DELAWARE GROUP EQUITY FUNDS V INC, 485APOS, 1999-01-29

DELAWARE GROUP EQUITY FUNDS V INC
485APOS, 1999-01-29

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

File No. 33-11419
File No. 811-4997

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 22 [X]

AND

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

Amendment No. 22

DELAWARE GROUP EQUITY FUNDS V, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)

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

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

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

Approximate Date of Public Offering: March 30, 1999
--------------
It is proposed that this filing will become effective:

_____ immediately upon filing pursuant to paragraph (b)

_____ on (date) pursuant to paragraph (b)

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

__X__ on March 30, 1999 pursuant to paragraph (a)(1)

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

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

Title of Securities Being Registered
------------------------------------

Small Cap Value Fund Institutional Class, Small Cap Value Fund A Class, Small
Cap Value Fund B Class, Small Cap Value Fund C Class, Retirement Income Fund
Institutional Class, Retirement Income Fund A Class, Retirement Income Fund B
Class, Retirement Income Fund C Class, Mid-Cap Value Fund Institutional Class,
Mid-Cap Value Fund A Class, Mid-Cap Value Fund B Class, Mid-Cap Value Fund C
Class, Small Cap Contrarian Fund Institutional Class, Small Cap Contrarian Fund
A Class, Small Cap Contrarian Fund B Class, Small Cap Contrarian Fund C Class

<PAGE>

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

This Post-Effective Amendment No. 22 to Registration File No. 33-11419 includes
the following:

1. Facing Page

2. Contents Page

3. Cross-Reference Sheet

4. Part A - Prospectuses

5. Part B - Statement of Additional Information

6. Part C - Other Information

7. Signatures

<PAGE>

CROSS-REFERENCE SHEET
PART A

Small Cap Value Fund
Class A
Class B Small Cap Value Fund
Item No. Description Class C Institutional Class
- -------- ----------- ------- -------------------
<S> <C> <C> <C>
1 Front and Back Cover Pages Same Same

2 Risk/Return Summary: Fund profile Fund profile
Investments, Risks and Performance

3 Risk/Return Summary: Fund profile Fund profile
Fee Table

4 Investment Objectives, Principal How we manage the How we manage the
Investment Strategies, and Related Fund Fund
Risks

5 Management's Discussion of N/A N/A
Performance

6 Management, Organization, and Who manages the Fund Who manages the Fund
Capital Structure

7 Shareholder Information How to buy shares; How to buy shares;
How to redeem shares; How to redeem shares;
Special services; Special services;
Dividends, distributions Dividends, distributions
and taxes all under and taxes all under
About your account About your account

8 Distribution Arrangements Choosing a share class; About your account
How to reduce sales
charges under About
your account

9 Financial Highlights Information Financial Information Financial Information

</TABLE>

<PAGE>

CROSS-REFERENCE SHEET
PART A (Continued)

Small Cap Contrarian
Fund
Class A Small Cap Contrarian
Class B Fund
Item No. Description Class C Institutional Class
- -------- ------------ ------- -------------------
<S> <C> <C> <C>
1 Front and Back Cover Pages Same Same

2 Risk/Return Summary: Fund profile Fund profile
Investments, Risks and Performance

3 Risk/Return Summary: Fund profile Fund profile
Fee Table

4 Investment Objectives, Principal How we manage the How we manage the
Investment Strategies, and Related Fund Fund
Risks

5 Management's Discussion of N/A N/A
Performance

6 Management, Organization, and Who manages the Fund Who manages the Fund
Capital Structure

8 Distribution Arrangements Choosing a share class; About your account
How to reduce sales
charges under About
your account

9 Financial Highlights Information Financial Information Financial Information

</TABLE>

<PAGE>

CROSS-REFERENCE SHEET
PART A (continued)

Mid-Cap Value Fund
Class A
Class B Mid-Cap Value Fund
Item No. Description Class C Institutional Class
- -------- ----------- ------- -------------------
<S> <C> <C> <C>
1 Front and Back Cover Pages Same Same

2 Risk/Return Summary: Fund profile Fund profile
Investments, Risks and Performance

3 Risk/Return Summary: Fund profile Fund profile
Fee Table

4 Investment Objectives, Principal How we manage the How we manage the
Investment Strategies, and Related Fund Fund
Risks

5 Management's Discussion of N/A N/A
Performance

6 Management, Organization, and Who manages the Fund Who manages the Fund
Capital Structure

8 Distribution Arrangements Choosing a share class; About your account
How to reduce sales
charges under About
your account

9 Financial Highlights Information Financial Information Financial Information

</TABLE>

<PAGE>

CROSS-REFERENCE SHEET
PART A (continued)

Retirement Income Fund
Class A Retirement Income
Class B Fund
Item No. Description Class C Institutional Class
- -------- ----------- ------- -------------------
<S> <C> <C> <C>
1 Front and Back Cover Pages Same Same

2 Risk/Return Summary: Fund profile Fund profile
Investments, Risks and Performance

3 Risk/Return Summary: Fund profile Fund profile
Fee Table

4 Investment Objectives, Principal How we manage the How we manage the
Investment Strategies, and Related Fund; Other investment Fund; Other investment
Risks policies and risk policies and risk
considerations considerations

5 Management's Discussion of N/A N/A
Performance

6 Management, Organization, and Who manages the Fund Who manages the Fund
Capital Structure

8 Distribution Arrangements Choosing a share class; About your account
How to reduce sales
charges under About
your account

9 Financial Highlights Information Financial Information Financial Information

</TABLE>

<PAGE>

CROSS-REFERENCE SHEET

PART B

Location in Statement of Additional
Item No. Description Information
- -------- ----------- -----------
<S> <C> <C>
10 Cover Page and Table of Contents Same

11 Fund History General Information

12 Description of the Fund and Its Investments and Investment Policies and Portfolio
Risks Techniques

13 Management of the Fund Officers and Directors; Purchasing
Shares

14 Control Persons and Principal Holders of Securities Officers and Directors

15 Investment Advisory and Other Services Officers and Directors; Purchasing
Shares; Investment Management
Agreements; General Information;
Financial Statements

16 Brokerage Allocation and Other Practices Trading Practices and Brokerage

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

18 Purchase, Redemption, and Pricing of Shares Purchasing Shares; Redemption and
Exchange; Determining Offering Price
and Net Asset Value

19 Taxation of the Fund Taxes

20 Underwriters Purchasing Shares

21 Calculation of Performance Data Performance Information

22 Financial Statements Financial Statements

</TABLE>

<PAGE>

CROSS-REFERENCE SHEET

PART C

Item No. Description Location in Part C
- -------- ----------- ------------------
<S> <C> <C>
23 Exhibits Item 23

24 Persons Controlled by or under Item 24
Common Control with Registrant

25 Indemnification Item 25

26 Business and Other Connections Item 26
of the Investment Adviser

27 Principal Underwriters Item 27

28 Location of Accounts and Item 28
Records

29 Management Services Item 29

30 Undertakings Item 30

</TABLE>

<PAGE>

DELAWARE
INVESTMENTS
-----------
Philadelphia * London

Small Cap Value Fund

Class A * Class B * Class C

Prospectus
March 30, 1999

Growth of Capital Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.

<PAGE>

[inside front cover]

Table of Contents

Fund profile page
Small Cap Value Fund

How we manage the Fund page
Our investment strategies
The securities we typically invest in
The risks of investing in the Fund

Who manages the Fund page
Investment manager
Portfolio manager
Fund administration (Who's who)

About your account page
Investing in the Fund
Choosing a share class
How to reduce your sales charge
How to buy shares
Retirement plans
How to redeem shares
Account minimums
Special services
Dividends, distributions and taxes

Certain management considerations page

Financial information page

<PAGE>

[sidebar copy at bottom of page]
How to use this prospectus

Here are guidelines to help you use this prospectus to make well-informed
investment decisions about our funds. If you're looking for a specific piece of
information, the table of contents can guide you directly to the appropriate
section.

Step 1
Take a look at the fund profile for an overview of the Fund.

Step 2
Learn in-depth information about how the Fund invests, the risks involved and
the people and organizations responsible for the Fund's day-to-day operations.

Step 3
Determine which fund features and services you would like to take advantage of.

Step 4
Use the glossary that begins on page ___ to find definitions of words printed in
bold type in the text throughout the prospectus.

<PAGE>

Fund Profile:
Investment Overview
When choosing a mutual fund to invest in, you have a variety of options and
important information to consider. This prospectus provides information about
Small Cap Value Fund, one of the Delaware Investments Family of Funds.

Before evaluating individual funds, however, your first step is to define your
personal financial goals. Knowing your goals and determining your investment
time horizon in advance can help you make a more appropriate fund selection. It
is also important to select a fund in the context of your entire investment
program. Diversification, or spreading your money among different types of
investments, is usually a sound investment strategy. This is commonly called
"asset allocation." The way your choose to allocate your money depends on a
number of factors. A professional financial adviser can help you build an
investment portfolio that fits your financial situation, your investment
objectives and your risk tolerance.

Investing for growth of capital with Small Cap Value Fund...
Investors with long-term goals often choose mutual funds designed to provide
growth of capital. These funds provide the potential to increase the value of
your investment through increases in stock prices. These funds may experience a
relatively high level of volatility, but generally offer greater return
opportunities than total return equity funds or bond funds. Like all mutual
funds, funds seeking growth of capital allow you to invest conveniently in a
diversified portfolio without having to select and monitor individual securities
on your own.

[House Graphic - Highlight 2nd blue tier of the house - growth of capital funds]

Growth Equity Funds for...

Growth of Capital
These stock funds provide long-term growth potential with relatively high
volatility.

<PAGE>

Profile: Small Cap Value Fund

What are the Fund's goals?
Small Cap Value Fund seeks capital appreciation. Although the Fund will strive
to meet its goals, there is no assurance that it will.

What are the Fund's main investment strategies?
We invest primarily in stocks of small companies whose stock prices appear low
relative to their underlying value or future potential. Among other factors, we
consider the financial strength of a company, its management, the prospects for
its industry and any anticipated changes within the company, which might suggest
a more favorable outlook going forward.

What are the main risks of investing in the Fund?
Investing in any mutual fund involves risk, including the risk that you may lose
part or all of the money you invest. The price of Fund shares will increase and
decrease according to changes in the value of the Fund's investments. This Fund
will be affected by declines in stock prices. In addition, the companies that
Small Cap Value Fund invests in may involve greater risk due to their size,
narrow product lines and limited financial resources. For a more complete
discussion of risk, please turn to page x.

An investment in the Fund is not a deposit of the bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.

Who should invest in the Fund
Investors with long-term financial goals. Investors seeking an
investment primarily in common stocks.
Investors seeking exposure to the capital appreciation
opportunities of small companies.

Who should not invest in the Fund
Investors with short-term financial goals. Investors whose
primary goal is current income.
Investors who are unwilling to accept share prices that may
fluctuate, sometimes significantly over the short term.

<PAGE>

How has the Fund performed?

This bar chart and table can help you evaluate the potential risks of investing
in the Fund. We show how returns for the Fund's Class A shares have varied over
the past ten calendar years as well as the average annual returns of all shares
for one, five, and ten years - all compared to the performance of the Russell
2000 Index. You should remember that unlike the Fund, the index is unmanaged and
doesn't reflect the actual costs of operating a mutual fund, such as the costs
of buying, selling, and holding securities. The Fund's past performance does not
necessarily indicate how it will perform in the future.

* Small Cap Value Fund
* Russell 2000 Index

[GRAPHIC OMITTED: BAR CHART SHOWING YEAR BY YEAR TOTAL RETURN (CLASS A) ]
Year-by-year total return

Small Cap Value Fund Russell 2000 Index.
Class A

1989 00.00% 00.00%
1990 00.00% 00.00%
1991 00.00% 00.00%
1992 00.00% 00.00%
1993 00.00% 00.00%
1994 00.00% 00.00%
1995 00.00% 00.00%
1996 00.00% 00.00%
1997 00.00% 00.00%
1998 00.00% 00.00%

As of December 31, 1998, the Fund `s Class A had a year-to-date return of 0.00%.
During the periods illustrated in this bar chart, Class A's highest return was
00.00% for the quarter ended ____________ and its lowest return was 00.00% for
the quarter ended_____________.

The maximum Class A sales charge of 5.75%, which is normally deducted when you
purchase shares, is not reflected in the total returns above. If this fee were
included, the returns would be less than those shown. The average annual returns
shown below do include the sales charge.
<TABLE>
<CAPTION>

Average annual returns for the period ending 12/31/98

CLASS A B (if redeemed)* C (if redeemed)* Russell 2000
(Inception (Inception 9/6/94) (Inception 11/29/95) Index**
6/24/87)

<S> <C> <C> <C> <C>
1 year 00.00% 00.00% 00.00% 0.00%
5 years 00.00% N/A N/A 0.00%
10 years or
Lifetime 00.00% 00.00% 00.00% 0.00%
</TABLE>

*If redeemed at end of period shown. If shares were not redeemed, the returns
for Class B would be 0.00% and 0.00%, respectively, for the one year and
lifetime periods. Returns for Class C would be 0.00% and 0.00%, respectively,
for the one year and lifetime periods. **Lifetime returns are shown if the Fund
or Class existed for less than 10 years. Russell 2000 returns are for 10 years.
Russell 2000 returns for Class B and Class C lifetime were 0.00% and 0.00%,
respectively. Maximum sales charges are included in the returns shown in the
table above.

<PAGE>

What are the Fund's fees and expenses?
Sales charges are fees paid directly from your investments when you buy or sell
shares of the Fund. The Fund may waive or reduce sales charges; please see the
Statement of Additional Information for details.
<TABLE>
<CAPTION>

CLASS A B C
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum sales charge (load) imposed on purchases as 5.75% none None
a percentage of offering price
-------------------------------------------------------------------------------------
Maximum contingent deferred sales charge (load) as a none1 5%2 1%3
percentage of original purchase price or redemption
price, whichever is lower
-------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on reinvested none none None
dividends
-------------------------------------------------------------------------------------
Redemption fees none none None
-------------------------------------------------------------------------------------
</TABLE>

Annual fund operating expenses are deducted from the Fund's assets before it
pays dividends and before its net asset value and total return are calculated.
We will not charge you separately for these expenses. These expenses are based
on amounts incurred during the Fund's most recent fiscal year.

----------------------------------------------------------------------
Management fees 0.00% 0.00% 0.00%
----------------------------------------------------------------------
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
----------------------------------------------------------------------
Other expenses 0.00% 0.00% 0.00%
----------------------------------------------------------------------
Total operating expenses 0.00% 0.00% 0.00%
----------------------------------------------------------------------

This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds with similar investment
objectives. We show the cumulative amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5% return over the time shown. 4 This is an
example only, and does not represent future expenses, which may be greater or
less than those shown here.

-------------------------------------------------------------------------------
CLASS5 A B B C C
(if redeemed) (if redeemed)
-------------------------------------------------------------------------------
1 year $000 $000 $000 $000 $000
-------------------------------------------------------------------------------
3 years $000 $000 $000 $000 $000
-------------------------------------------------------------------------------
5 years $000 $000 $000 $000 $000
-------------------------------------------------------------------------------
10 years $000 $000 $000 $000 $000
-------------------------------------------------------------------------------

1 A purchase of Class A shares of $1 million or more may be made at net
asset value. However, if you buy the shares through a financial adviser
who is paid a commission, a contingent deferred sales charge will be
imposed on certain redemptions.. Additional Class A purchase options
that involve a contingent deferred sales charge may be permitted from
time to time and will be disclosed in the prospectus if they are
available.

2 If you redeem Class B shares during the first year after you buy them,
you will pay a contingent deferred sales charge of 5%, which declines
to 4% during the second year, 3% during the third and fourth years, 2%
during the fifth year, 1% during the sixth year, and 0% thereafter.

3 Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.

4 The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods
we show.

5 The Class B example reflects the conversion of Class B shares to Class
A shares after approximately eighth years. Information for the ninth
and tenth years reflects expenses of the Class A shares.

<PAGE>

How we manage the Fund

Our investment strategies
We research individual companies and analyze economic and market conditions,
seeking to identify the securities or market sectors that we think are the best
investments for Small Cap Value Fund. Following is a description of how the
portfolio manager pursues the Fund's investment goal.

We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.

We strive to identify small-companies that offer above-average opportunities for
long-term price appreciation because their current stock price does not
accurately reflect the companies' underlying value or future earning potential.

Under normal conditions, at least 65% of the Fund's net assets will be invested
in the common stock of small cap companies, those having a market capitalization
generally less than $1.5 billion. Our focus will be on value stocks, defined as
stocks whose price is historically low based on a given financial measure such
as profits, book value or cashflow.

Companies may be undervalued for many reasons. They may be unknown to stock
analysts, they may have experienced poor earnings or their industry may be in
the midst of a period of weak growth.

We will carefully evaluate the financial strength of the company, the nature of
its management, any developments affecting the company or its industry,
anticipated new products or services, possible management changes, projected
takeovers or technological breakthroughs. Using this extensive analysis, our
goal is to pinpoint the companies within the universe of undervalued stocks,
whose true value is likely to be recognized and rewarded with a rising stock
price in the future.

Because there is added risk when investing in smaller companies, which may
still be in their early developmental stages, we maintain a well-diversified
portfolio, typically holding xx to xx different stocks, representing a wide
array of industries.

<PAGE>

The securities we typically invest in
Stocks offer investors the potential for capital appreciation, and may pay
dividends as well.
<TABLE>
<CAPTION>

- -----------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- -----------------------------------------------------------------------------------------------------------------------------
Small Cap Value Fund
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Common stocks: Securities that represent shares Generally, we invest 90% to 100% of net assets in common stock of
of ownership in a corporation. Stockholders small companies that we believe are selling for less than their
participate in the corporation's profits and true value. Under normal conditions, we will hold at least 65% of
losses, proportionate to the number of shares the Fund's net assets in these stocks.
they own.
- -----------------------------------------------------------------------------------------------------------------------------
Real Estate Investment Trusts: A company, usually The Fund is permitted to invest in REITs and would typically do so
traded publicly, that manages a portfolio of real when this sector or specific companies within the sector appeared to
estate to earn profits for shareholders. offer opportunities for price appreciation.
- -----------------------------------------------------------------------------------------------------------------------------
Foreign Securities and American Depositary Although Small Cap Value Fund may invest up to 25% of its net assets
Receipts in foreign securities or depository receipts, the manager has no
Securities of foreign entities issued directly present intention of doing so. We may hold ADRs when we believe they
or, in the case of American Depositary Receipts, offer greater value and greater appreciation potential than U.S.
through a U.S. bank. ADRs are issued by a U.S. securities.
bank and represent a stated number of shares of a
foreign corporation that the bank holds in its
vault. An ADR entitles the holder to all
dividends and capital gains earned by the
underlying foreign shares. ADRs are bought and
sold the same as U.S. securities.
- -----------------------------------------------------------------------------------------------------------------------------
Repurchase agreements: An agreement between a Typically, we use repurchase agreements as a short-term investment
buyer and seller of securities in which the for a Fund's cash position. In order to enter into these repurchase
seller agrees to buy the securities back within a agreements, the Fund must have collateral of at least 102% of the
specified time at the same price the buyer paid repurchase price. Small Cap Value Fund may not have more than 10% of
for them, plus an amount equal to an agreed upon its total assets in repurchase agreements with maturities of over
interest rate. Repurchase agreements are often seven days.
viewed as equivalent to cash.

- -----------------------------------------------------------------------------------------------------------------------------
Restricted securities: Privately placed We may invest without limitation in privately placed securities that
securities whose resale is restricted under are eligible for resale only among certain institutional buyers
securities law. without registration. These are commonly known as Rule 144A
Securities. Other restricted securities must be limited to 10% of
total fund assets.
- -----------------------------------------------------------------------------------------------------------------------------
Illiquid Securities: Securities that do not have We may invest up to 10% of net assets in illiquid securities.
a ready market, and cannot be easily sold,
if at all, at a reasonable price.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

Small Cap Value Fund may also invest in other securities including convertible
securities, warrants, preferred stocks, and bonds. Small Cap Value Fund may
invest up to 25% of its net assets in foreign securities. Please see the
Statement of Additional Information for additional descriptions and risk
information on these securities as well as those listed in the table above. You
can find additional information about the investments in the Fund's portfolio in
the annual or semi-annual shareholder report.

<PAGE>

Lending securities
Small Cap Value Fund may lend up to 25% of its assets to qualified dealers and
investors for their use in security transactions.

Portfolio turnover
We anticipate that Small Cap Value Fund's annual portfolio turnover will be less
than 100%. A turnover rate of 100% would occur if a Fund sold and replaced
securities valued at 100% of its net assets within one year.

<PAGE>

- ---------------------------------------------- -------------------------------------------------------------------------------------
<S> <C>
Market risk is the risk that all or a We maintain a long-term investment approach and focus on stocks we believe can
majority of the securities in a certain ppreciate over an extended time frame regardless of interim market fluctuations. We
market -- like the stock or bond market -- do not try to predict overall stock market movements and do not trade for short-term
will decline in value because of factors purposes.
such as economic conditions, future
expectations or investor confidence. We may hold a substantial part of Small Cap Value Fund's assets in cash or cash
equivalents as a temporary, defensive strategy.
- ---------------------------------------------- -------------------------------------------------------------------------------------
Industry and security risk is the risk that We limit the amount of Small Cap Value Fund's assets invested in any one industry
the value of securities in a particular and in any individual security. We also follow a rigorous selection process before
industry or the value of an individual stock choosing securities and continuously monitor them while they remain in the portfolio.
or bond will decline because of changing
expectations for the performance of that
industry or for the individual company
issuing the stock.

- ---------------------------------------------- -------------------------------------------------------------------------------------
Small company risk is the risk that prices Small Cap Value Fund maintains a well-diversified portfolio, selects stocks
of smaller companies may be more volatile carefully and monitors them continuously. And, because we focus on stocks that are
than larger companies because of limited already selling at relatively low prices, we believe we may experience less price
financial resources or dependence on narrow volatility than small-cap funds that do not use a value-oriented strategy.
product lines.
- ---------------------------------------------- -------------------------------------------------------------------------------------
Interest rate risk is the risk that We analyze each company's financial situation and its cashflow to determine the
securities will decrease in value if company's ability to finance future expansion and operations. The potential affect
interest rates rise. The risk is generally that rising interest rates might have on a stock is taken into consideration before
associated with bonds; however, because the stock is purchased.
smaller companies often borrow money to
finance their operations, they may be
adversely affected by rising interest rates.
- ---------------------------------------------- -------------------------------------------------------------------------------------
Foreign risk is the risk that foreign We typically invest only a small portion of Small Cap Value Fund's portfolio in
securities may be adversely affected by foreign securities. When we do purchase foreign securities, they are often
political instability, changes in currency denominated in U.S. dollars. To the extent we invest in foreign securities, we
or inadequate regulatory and accounting invest primarily in issuers of developed countries, which are less likely to
standards. encounter these foreign risks than issuers in developing countries. The Fund may
use hedging techniques to help offset potential foreign losses.
- ---------------------------------------------- -------------------------------------------------------------------------------------
Liquidity risk is the possibility that We limit exposure to illiquid securities.
securities cannot be readily sold, or
can only be sold at a price significantly
lower than their broadly recognized value.
- ---------------------------------------------- -------------------------------------------------------------------------------------
</TABLE>

<PAGE>

Who manages the Fund

Investment Manager
The Fund is managed by Delaware Management Company, a series of Delaware
Management Business Trust which is an indirect, wholly owned subsidiary of
Delaware Management Holdings, Inc. Delaware Management Company makes investment
decisions for the Fund, manages the Fund's business affairs and provides daily
administrative services. For these services, the manager was paid 0.00% as a
percentage of average daily net assets for the last fiscal year.

Portfolio Manager

Christopher S. Beck, Vice President/Senior Portfolio Manager of the Fund,
assumed primary responsibility for making day-to-day investment decisions for
the Fund in May 1997. Mr. Beck has been in the investment business for 16 years,
starting with Wilmington Trust in 1981. Later, he became Director of Research at
Cypress Capital Management in Wilmington and Chief Investment Officer of the
University of Delaware Endowment Fund. Prior to joining Delaware Investments in
May 1997, he managed the Small Cap Fund for two years at Pitcairn Trust Company.
He holds a BS from the University of Delaware, an MBA from Lehigh University and
is a CFA charterholder. When making investment decisions for the Fund, Mr. Beck
regularly consults with and Andrea Giles.

Andrea Giles, Research Analyst for the Fund, holds a BSAD from the Massachusetts
Institute of Technology and an MBA in Finance from Columbia University. Prior to
joining Delaware Investments in 1996, she was an account officer in the
Leveraged Capital Group with Citibank.

<PAGE>

Who's who?
This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.

[GRAPHIC OMITTED: DIAGRAM SHOWING THE VARIOUS ORGANIZATIONS INVOLVED
WITH MANAGING, ADMINISTERING, AND SERVICING THE DELAWARE INVESTMENTS
FUNDS]
<TABLE>
<CAPTION>

Board of Directors

<S> <C> <C>
Investment Manager The Funds Custodian
Delaware Management Company The Chase Manhattan Bank
One Commerce Square 4 Chase Metrotech Center
Philadelphia, PA 19103 Brooklyn, NY 11245

Portfolio managers Distributor Service agent
(see page __ for details) Delaware Distributors, L.P. Delaware Service Company, Inc.
1818 Market Street 1818 Market Street
Philadelphia, PA 19103 Philadelphia, PA 19103
</TABLE>

Financial advisers

Shareholders

Board of directors A mutual fund is governed by a board of directors which has
oversight responsibility for the management of the fund's business affairs.
Directors establish procedures and oversee and review the performance of the
investment manager, the distributor and others that perform services for the
fund. At least 40% of the board of directors must be independent of the fund's
investment manager or distributor. These independent fund directors, in
particular, are advocates for shareholder interests.

Investment manager An investment manager is a company responsible for selecting
portfolio investments consistent with the objective and policies stated in the
mutual fund's prospectus. The investment manager places portfolio orders with
broker/dealers and is responsible for obtaining the best overall execution of
those orders. A written contract between a mutual fund and its investment
manager specifies the services the manager performs. Most management contracts
provide for the manager to receive an annual fee based on a percentage of the
fund's average daily net assets. The manager is subject to numerous legal
restrictions, especially regarding transactions between itself and the funds it
advises.

Sub-adviser A sub-adviser is a company generally responsible for the management
of the fund's assets. They are selected and supervised by the investment
manager.

Portfolio managers Portfolio managers are employed by the investment manager or
sub-adviser to make investment decisions for individual portfolios on a
day-to-day basis.

Custodian Mutual funds are legally required to protect their portfolio
securities and typically place them with a qualified bank custodian who
segregates fund securities from other bank assets.

Distributor Most mutual funds continuously offer new shares to the public
through distributors who are regulated as broker-dealers and are subject to
National Association of Securities Dealers, Inc. (NASD) rules governing mutual
fund sales practices.

Service agent Mutual fund companies employ service agents (sometimes called
transfer agents) to maintain records of shareholder accounts, calculate and
disburse dividends and capital gains and prepare and mail shareholder statements
and tax information, among other functions. Many service agents also provide
customer service to shareholders.
<PAGE>

Financial advisers Financial advisers provide advice to their clients--analyzing
their financial objectives and recommending appropriate funds or other
investments. Financial advisers are compensated for their services, generally
through sales commissions, and through 12b-1 and/or service fees deducted from
the fund's assets.

Shareholders Like shareholders of other companies, mutual fund shareholders have
specific voting rights, including the right to elect directors. Material changes
in the terms of a fund's management contract must be approved by a shareholder
vote, and funds seeking to change fundamental investment objectives or policies
must also seek shareholder approval.

<PAGE>

About your account

Investing in the Fund
You can choose from a number of share classes for the Fund. Because each share
class has a different combination of sales charges, fees, and other features,
you should consult your financial adviser to determine which class best suits
your investment goals and time frame.

Choosing a share class

Class A
o Class A shares have an up-front sales charge of up to 5.75% that you
pay when you buy the shares. The offering price for Class A shares
includes the front-end sales charge.

o If you invest $50,000 or more, your front-end sales charge will be
reduced.

o You may qualify for other reduced sales charges, as described in "How
to reduce your sales charge," and under certain circumstances the sales
charge may be waived; please see the Statement of Additional
Information.

o Class A shares are also subject to an annual 12b-1 fee no greater than
0.30% of average daily net assets, which is lower than the 12b-1 fee
for Class B and Class C shares.

o Class A shares generally are not subject to a contingent deferred sales
charge.

Class B
o Class B shares have no up-front sales charge, so the full amount of
your purchase is invested in the Fund. However, you will pay a
contingent deferred sales charge if you redeem your shares within six
years after you buy them.

o If you redeem Class B shares during the first year after you buy them,
the shares will be subject to a contingent deferred sales charge of 5%.
The contingent deferred sales charge is 4% during the second year, 3%
during the third and fourth years, 2% during the fifth year, 1% during
the sixth year, and 0% thereafter.

o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.

o For approximately eight years after you buy your Class B shares, they
are subject to annual 12b-1 fees no greater than 1% of average daily
net assets, of which 0.25% are service fees paid to the distributor,
dealers or others for providing services and maintaining accounts.

o Because of the higher 12b-1 fees, Class B shares have higher expenses
and any dividends paid on these shares are lower than dividends on
Class A shares.

o Approximately eight years after you buy them, Class B shares
automatically convert into Class A shares with a 12b-1 fee of no more
than 0.30%. Conversion may occur as late as three months after the
eighth anniversary of purchase, during which time Class B's higher
12b-1 fees apply.

o You may purchase up to $250,000 of Class B shares at any one time. The
limitation on maximum purchases varies for retirement plans.

<PAGE>

Class C

o Class C shares have no up-front sales charge, so the full amount of
your purchase is invested in the Fund. However, you will pay a
contingent deferred sales charge if you redeem your shares within 12
months after you buy them.

o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.

o Class C shares are subject to an annual 12b-1 fee which may not be
greater than 1% of average daily net assets, of which 0.25% are service
fees paid to the distributor, dealers or others for providing personal
services and maintaining shareholder accounts.

o Because of the higher 12b-1 fees, Class C shares have higher expenses
and pay lower dividends than Class A shares.

o Unlike Class B shares, Class C shares do not automatically convert into
another class.

o You may purchase any amount less than $1,000,000 of Class C shares at
any one time. The limitation on maximum purchases varies for retirement
plans.

Each share class of the Fund has adopted a separate 12b-1 plan that allows it to
pay distribution fees for the sales and distribution of its shares. Because
these fees are paid out of the Fund's assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than
paying other types of sales charges.

<PAGE>

Class A Sales Charges

- --------------------------------------------------------------------------------------------------------
Amount of purchase Sales charge as % Sales charge as % of amount Dealer's commission as %
of offering price invested of offering price
- --------------------------------------------------------------------------------------------------------

<S> <C> <C> <C>
Less than $50,000 5.75% % 5.00%

$50,000 but 4.75% % 4.00%
under $100,000

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

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

$500,000 but 2.00% % 1.60%
under $1 million
</TABLE>

As shown below, there is no front-end sales charge when you purchase $1 million
or more of Class A shares. However, if your financial adviser is paid a
commission on your purchase, you may have to pay a limited contingent deferred
sales charge of 1% if you redeem these shares within the first year and 0.50% if
you redeem them within the second year.

Amount of purchase Sales charge as % Sales charge as % of amount Dealer's commission as %
of offering price invested of offering price
- -------------------------- ----------------------- ----------------------------------- ---------------------------------
<S> <C> <C> <C>
$1 million up to $5 none None 1.00%
million
- -------------------------- ----------------------- ----------------------------------- ---------------------------------
Next $20 million none None 0.50%
Up to $25 million
- -------------------------- ----------------------- ----------------------------------- ---------------------------------
Amount over $25 million none None 0.25%
- -------------------------- ----------------------- ----------------------------------- ---------------------------------
</TABLE>

<PAGE>

About your account (continued)

How to reduce your sales charge
We offer a number of ways to reduce or eliminate the sales charge on shares.
Please refer to the Statement of Additional Information for detailed information
and eligibility requirements. You can also get additional information from your
financial adviser. You or your financial adviser must notify us at the time you
purchase shares if you are eligible for any of these programs.

- --------------------------------------------------------------------------------------------------------------------------
Program How it works Share class
A B C
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Letter of Intent Through a Letter of Intent you X Although the Letter of
agree to invest a certain Intent and Rights of
amount in Delaware Investment Accumulation do not apply
Funds (except money market to the purchase of Class
funds with no sales charge) B and C shares, you can
over a 13-month period to combine your purchase of
qualify for reduced front-end Class A shares with your
sales charges. purchase of B and C
shares to fulfill your
Letter of Intent or
qualify for Rights of
Accumulation.
- --------------------------------------------------------------------------------------------------------------------------
Rights of accumulation You can combine your holdings X
or purchases of all funds in the
Delaware Investments family
(except money market funds with
no sales charge) as well as the
holdings and purchases of your
spouse and children under 21 to
qualify for reduced front-end
sales charges.
- --------------------------------------------------------------------------------------------------------------------------
Reinvestment of redeemed shares Up to 12 months after you X Not available.
redeem shares, you can reinvest
the proceeds without paying a
front-end sales charge.
- --------------------------------------------------------------------------------------------------------------------------
SIMPLE IRA, SEP IRA, SARSEP, Prototype These investment plans may X Not available.
Profit Sharing, Pension, 401(k), SIMPLE qualify for reduced sales
401(k), 403(b)(7), and 457 Retirement charges by combining the
Plans purchases of all members of the
group. Members of these groups
may also qualify to purchase
shares without a front-end sales
charge and a waiver of any
contingent deferred sales
charges.
- --------------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

How to buy shares

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Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.

[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]

By mail
Complete an investment slip and mail it with your check, made payable to the
fund and class of shares you wish to purchase, to Delaware Investments, 1818
Market Street, Philadelphia, PA 19103-3682. If you are making an initial
purchase by mail, you must include a completed investment application (or an
appropriate retirement plan application if you are opening a retirement account)
with your check.

[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]

By wire
Ask your bank to wire the amount you want to invest to First Union Bank, ABA
#031201467, Bank Account number 2014 12893 4013. Include your account number and
the name of the fund in which you want to invest. If you are making an initial
purchase by wire, you must call us so we can assign you an account number.

[GRAPHIC OMITTED: ILLUSTRATION OF AN EXCHANGE SYMBOL]

By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that under most circumstances you are allowed to exchange only
between like classes of shares. To open an account by exchange, call the
Shareholder Service Center at 800o523o1918.

[GRAPHIC OMITTED: ILLUSTRATION OF A KEYPAD]

Through automated shareholder services
You can purchase or exchange shares through Delaphone, our automated telephone
service, or through our web site, www.delawarefunds.com. For more information
about how to sign up for these services, call our Shareholder Service Center at
800o523o1918.

<PAGE>

About your account (continued)

How to buy shares (continued)

Once you have completed an application, you can open an account with an initial
investment of $1,000--and make additional investments at any time for as little
as $100. If you are buying shares in an IRA or Roth IRA, under the Uniform Gifts
to Minors Act or the Uniform Transfers to Minors Act; or through an Automatic
Investing Plan, the minimum purchase is $250, and you can make additional
investments of only $25. The minimum for an Education IRA is $500. The minimums
vary for retirement plans other than IRAs, Roth IRAs or Education IRAs.

The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receives your order before the close of trading on
the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a business day,
you will pay that day's closing share price which is based on the Fund's net
asset value. If we receive your order after the close of trading, you will pay
the next business day's price. A business day is any day that the New York Stock
Exchange is open for business. Currently the Exchange is closed when the
following holidays are observed: New Year's Day, Martin Luther King, Jr.'s
Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas. We reserve the right to reject any purchase
order.

We determine the Fund's net asset value (NAV) per share at the close of trading
of the New York Stock Exchange each business day that the Exchange is open. We
calculate this value by adding the market value of all the securities and assets
in the Fund's portfolio, deducting all liabilities, and dividing the resulting
number by the number of shares outstanding. The result is the net asset value
per share. We price securities and other assets for which market quotations are
available at their market value. We price fixed-income securities on the basis
of valuations provided to us by an independent pricing service that uses methods
approved by the board of directors. Any fixed-income securities that have a
maturity of less than 60 days we price at amortized cost. We price all other
securities at their fair market value using a method approved by the board of
directors.

Retirement plans
In addition to being an appropriate investment for your Individual Retirement
Account (IRA), Roth IRA and Education IRA, shares in the Fund may be suitable
for group retirement plans. You may establish your IRA account even if you are
already a participant in an employer-sponsored retirement plan. For more
information on how shares in the Fund can play an important role in your
retirement planning or for details about group plans, please consult your
financial adviser, or call 800o523o1918.

<PAGE>

How to redeem shares

[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]

Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.

[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]

By mail
You can redeem your shares (sell them back to the fund) by mail by writing to:
Delaware Investments, 1818 Market Street, Philadelphia, PA 19103-3682. All
owners of the account must sign the request, and for redemptions of $50,000 or
more, you must include a signature guarantee for each owner. Signature
guarantees are also required when redemption proceeds are going to an address
other than the address of record on an account.

[GRAPHIC OMITTED: ILLUSTRATION OF A TELEPHONE]

By telephone
You can redeem up to $50,000 of your shares by telephone. You may have the
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you
may have the proceeds sent directly to your bank by wire. Bank information must
be on file before you request a wire redemption.

[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]

By wire
You can redeem $1,000 or more of your shares and have the proceeds deposited
directly to your bank account the next business day after we receive your
request. If you request a wire deposit, the First Union Bank fee (currently
$7.50) will be deducted from your proceeds. Bank information must be on file
before you request a wire redemption.

[GRAPHIC OMITTED: ILLUSTRATION OF A KEYPAD]

Through automated shareholder services
You can redeem shares through Delaphone, our automated telephone service, or
through our web site, www.delawarefunds.com. For more information about how to
sign up for these services, call our Shareholder Service Center at 800o523o1918.

<PAGE>

About your account (continued)

How to redeem shares (continued)

If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.

When you send us a properly completed request to redeem or exchange shares, you
will receive the net asset value as determined on the business day we receive
your request. We will deduct any applicable contingent deferred sales charges.
You may also have to pay taxes on the proceeds from your sale of shares. We will
send you a check, normally the next business day, but no later than seven days
after we receive your request to sell your shares. If you purchased your shares
by check, we will wait until your check has cleared, which can take up to 15
days, before we send your redemption proceeds.

If you are required to pay a contingent deferred sales charge when you redeem
your shares, the amount subject to the fee will be based on the shares' net
asset value when you purchased them or their net asset value when you redeem
them, whichever is less. This arrangement assures that you will not pay a
contingent deferred sales charge on any increase in the value of your shares.
You also will not pay the charge on any shares acquired by reinvesting dividends
or capital gains. If you exchange shares of one fund for shares of another, you
do not pay a contingent deferred sales charge at the time of the exchange. If
you later redeem those shares, the purchase price for purposes of the contingent
deferred sales charge formula will be the price you paid for the original
shares--not the exchange price. The redemption price for purposes of this
formula will be the NAV of the shares you are actually redeeming.

Account minimum
If you redeem shares and your account balance falls below the required account
minimum of $1,000 ($250 for IRAs, Uniform Gift to Minors Act accounts or
accounts with automatic investing plans, $500 for Education IRAs) for three or
more consecutive months, you will have until the end of the current calendar
quarter to raise the balance to the minimum. If your account is not at the
minimum by the required time, you will be charged a $9 fee for that quarter and
each quarter after that until your account reaches the minimum balance. If your
account does not reach the minimum balance, the Fund may redeem your account
after 60 days' written notice to you.

<PAGE>

Special services
To help make investing with us as easy as possible, and to help you build your
investments, we offer the following special services.

Automatic Investing Plan
The Automatic Investing Plan allows you to make regular monthly investments
directly from your checking account.

Direct Deposit
With Direct Deposit you can make additional investments through payroll
deductions, recurring government or private payments such as social security or
direct transfers from your bank account.

Wealth Builder Option
With the Wealth Builder Option you can arrange automatic monthly exchanges
between your shares in one or more Delaware Investments funds. Wealth Builder
exchanges are subject to the same rules as regular exchanges (see below) and
require a minimum monthly exchange of $100 per fund.

Dividend Reinvestment Plan
Through our Dividend Reinvestment Plan, you can have your distributions
reinvested in your account or the same share class in another fund in the
Delaware Investments family. The shares that you purchase through the Dividend
Reinvestment Plan are not subject to a front-end sales charge or to a contingent
deferred sales charge. Under most circumstances, you may reinvest dividends only
into like classes of shares.

Exchanges
You can exchange all or part of your shares for shares of the same class in
another Delaware Investments fund without paying a sales charge and without
paying a contingent deferred sales charge at the time of the exchange. However,
if you exchange shares from a money market fund that does not have a sales
charge you will pay any applicable sales charges on your new shares. When
exchanging Class B and Class C shares of one fund for similar shares in other
funds, your new shares will be subject to the same contingent deferred sales
charge as the shares you originally purchased. The holding period for the CDSC
will also remain the same, with the amount of time you held your original shares
being credited toward the holding period of your new shares. You don't pay sales
charges on shares that you acquired through the reinvestment of dividends. You
may have to pay taxes on your exchange. When you exchange shares, you are
purchasing shares in another fund so you should be sure to get a copy of the
fund's prospectus and read it carefully before buying shares through an
exchange.

<PAGE>

About your account (continued)

Special services (continued)

MoneyLineSM On Demand Service
Through our MoneyLineSM On Demand Service, you or your financial adviser may
transfer money between your Fund account and your predesignated bank account by
telephone request. This service is not available for retirement plans, except
for purchases into IRAs. MoneyLine has a minimum transfer of $25 and a maximum
transfer of $50,000.

MoneyLine Direct Deposit Service
Through our MoneyLine Direct Deposit Service you can have $25 or more in
dividends and distributions deposited directly to your bank account. Delaware
Investments does not charge a fee for this service; however, your bank may
assess one.
This service is not available for retirement plans.

Systematic Withdrawal Plan
Through our Systematic Withdrawal Plan you can arrange a regular monthly or
quarterly payment from your account made to you or someone you designate. If the
value of your account is $5,000 or more, you can make withdrawals of at least
$25 monthly, or $75 quarterly. You may also have your withdrawals deposited
directly to your bank account through our MoneyLine Direct Deposit Service.

Dividends, distributions and taxes
Dividends and capital gains, if any, are paid annually. We automatically
reinvest all dividends and any capital gains, unless you tell us otherwise.

Tax laws are subject to change, so we urge you to consult your tax adviser about
your particular tax situation and how it might be affected by current tax law.
The tax status of your dividends from the Fund is the same whether you reinvest
your dividends or receive them in cash. Distributions from the Fund's long-term
capital gains are taxable as capital gains, while distributions from short-term
capital gains and net investment income are generally taxable as ordinary
income. Any capital gains may be taxable at different rates depending on the
length of time the Fund held the assets. In addition, you may be subject to
state and local taxes on distributions.

We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.

<PAGE>

Certain management considerations

Year 2000
As with other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer systems
used by its service providers do not properly process and calculate date-related
information from and after January 1, 2000. This is commonly known as the "Year
2000 Problem." The Fund is taking steps to obtain satisfactory assurances that
its major service providers are taking steps reasonably designed to address the
Year 2000 Problem on the computer systems that the service providers use.
However, there can be no assurance that these steps will be sufficient to avoid
any adverse impact on the business of the Fund.

Investments by Fund of Funds
Small Cap Value Fund accepts investments from the series portfolios of Delaware
Group Foundation Funds, a fund of funds. From time to time, the Fund may
experience large investments or redemptions due to allocations or rebalancings
by Foundation Funds. While it is impossible to predict the overall impact of
these transactions over time, there could be adverse effects on portfolio
management. For example, the Fund may be required to sell securities or invest
cash at times when it would not otherwise do so. These transactions could also
have tax consequences if sales of securities result in gains, and could also
increase transactions costs or portfolio turnover. The manager will monitor
transactions by Foundation Funds and will attempt to minimize any adverse
effects on both Small Cap Value Fund and Foundation Funds as a result of these
transactions.

<PAGE>

Financial highlights

The financial highlights table is intended to help you understand the Fund's
financial performance for the past five years. All "per share" information
reflects financial results for a single Fund share. This information has been
audited by Ernst & Young LLP, whose report, along with the Fund's financial
statements, is included in the Fund's annual report, which is available upon
request by calling 800-523-1918.

Class A Shares
Year Ended 11/30
----------------------------------------------------------
Small Cap Value Fund 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------

<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $25.780 $22.760 $19.320 $20.070

Income from investment operations
Net investment income 0.131 0.122 0.253 0.142
Net realized and net unrealized gain on investments 7.914 4.028 3.597 (0.687)
----- ----- ----- -------
Total from investment operations 8.045 4.150 3.850 (0.545)
----- ----- ----- -------

Less dividends and distributions
Dividends from net investment income (0.135) (0.240) (0.160) (0.035)
Distributions from realized gain on investments (3.900) (0.890) (0.250) (0.170)
------- ------- ------- -------
Total dividends and distributions (4.035) (1.130) (0.410) (0.205)
------- ------- ------- -------

Net asset value, end of period $29.790 $25.780 $22.760 $19.320
======= ======= ======= =======

Total return 36.38% 19.08% 20.39% (2.78%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) $268,266 $192,297 $177,011 $179,498
Ratio of expenses to average net assets 1.39% 1.45% 1.48% 1.46%
Ratio of net investment income to average net assets 0.51% 0.51% 1.18% 0.75%
Portfolio turnover 53% 87% 65% 14%
- ----------------------------------------------------------------------- ----------- ----------- ----------- ----------- -----------

Volatility
Volatility, as indicated by year-by-year total return(1) 1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------
Volatility chart is not part of Financial highlights and has not been 36.38% 19.08% 20.39% (2.78%)
audited by Ernst & Young LLP

</TABLE>

(1) 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.

<PAGE>

Class B Shares
Year Ended 11/30
------------------------------------------------
Small Cap Value Fund 1998 1997 1996 1995 1994
--------- --------- -------- --------- ---------

<S> <C> <C> <C> <C>
Net asset value, beginning of period $25.570 $22.590 $19.300 $20.280

Income from investment operations
Net investment income (0.042) (0.041) 0.141 0.011
Net realized and net unrealized gain on investments 7.832 4.006 3.549 (0.991)
----- ----- ----- -------
Total from investment operations 7.790 3.965 3.690 (0.980)
----- ----- ----- -------

Less dividends and distributions
Dividends from net investment income none (0.095) (0.150) none
Distributions from realized gain on investments (3.900) (0.890) (0.250) none
------- ------- ------- ----
Total dividends and distributions (3.900) (0.985) (0.400) none
------- ------- ------- ----

Net asset value, end of period $29.460 $25.570 $22.590 $19.300
======= ======= ======= =======

Total return 35.36% 18.26% 19.55% (4.83%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) $39,733 $12,730 $5,788 $1,455
Ratio of expenses to average net assets 2.09% 2.15% 2.18% 2.16%
Ratio of net investment income to average net assets (0.19%) (0.19%) 0.48% 0.05%
Portfolio turnover 53% 87% 65% 14%
- ------------------------------------------------------------------------------- --------- --------- -------- --------- ---------

Volatility
Volatility, as indicated by year-by-year total return(1) 1998 1997 1996 1995 1994
--------- --------- -------- --------- ---------

Volatility chart is not part of Financial highlights and has not been audited 35.36% 18.26% 19.55% (4.83%)
by Ernst & Young LLP
</TABLE>

<PAGE>

Class C Shares
Year Ended 11/30
--------------------------------------
Small Cap Value Fund 1998 1997 1996 1995
--------- --------- -------- ---------

<S> <C> <C> <C>
Net asset value, beginning of period $25.550 $22.760 $22.510

Income from investment operations
Net investment income (0.033) (0.043) none
Net realized and net unrealized gain on investments 7.823 4.003 0.250
----- ----- -----
Total from investment operations 7.790 3.960 0.250
----- ----- -----

Less dividends and distributions
Dividends from net investment income none (0.280) none
Distributions from realized gain on investments (3.900) (0.890) none
------- ------- ----
Total dividends and distributions (3.900) (1.170) none
------- ------- ----

Net asset value, end of period $29.440 $25.550 $22.760
======= ======= =======

Total return 35.40% 18.23% 4

Ratios and supplemental data:
Net assets, end of period (000 omitted) $12,547 $3,360 $5
Ratio of expenses to average net assets 2.09% 2.15% 4
Ratio of expenses to average net assets
prior to expense limitation
Ratio of net investment income to average net assets (0.19%) (0.19%) 4
Ratio of net investment income to average net assets
prior to expense limitation
Portfolio turnover 53% 87% 4
- ------------------------------------------------------------------------------- --------- --------- -------- ---------

Volatility
Volatility, as indicated by year-by-year total return(1) 1998 1997 1996 1995
--------- --------- -------- ---------

Volatility chart is not part of Financial highlights and has not been audited 35.40% 18.23% 4
by Ernst & Young LLP
</TABLE>

<PAGE>

How to read the Financial highlights

Net investment income
Net investment income includes dividend and interest income earned from the
Fund's securities; it is after expenses have been deducted.

Net gains (losses) on investments (both realized and unrealized)
A realized gain occurs when we sell an investment at a profit, while a realized
loss occurs when we sell an investment at a loss. When an investment increases
or decreases in value but we do not sell it, we record an unrealized gain or
loss. The amount of realized gain per share that we pay to shareholders is
listed under "Less dividends and distributions-Distributions from net realized
gain on investments."

Net asset value (NAV)
This is the value of a mutual fund share, calculated by dividing the net assets
by the number of shares outstanding.

Total return
This represents the rate that an investor would have earned or lost on an
investment in the Fund. In calculating this figure for the financial highlights
table, we include fee waivers, exclude front-end and contingent deferred sales
charges, and assume the shareholder has reinvested all dividends and realized
gains.

Net assets
Net assets represent the total value of all the assets in the Fund's portfolio,
less any liabilities, that are attributable to that class of the Fund.

(continues on page ___)

<PAGE>

How to read the financial highlights
(begins on page ___)

Ratio of expenses to average daily net assets
The expense ratio is the percentage of net assets that a fund pays annually for
operating expenses and management fees. These expenses include accounting and
administration expenses, services for shareholders, and similar expenses.

Ratio of net investment income to average daily net assets
We determine this ratio by dividing net investment income by average net assets.

Portfolio turnover rate
This figure tells you the amount of trading activity in a fund's portfolio. For
example, a fund with a 50% turnover has bought and sold half of the value of its
total investment portfolio during the stated period.

<PAGE>

[begin glossary]

How to use this glossary

Words found in the glossary are printed in boldface only the first time they
appear in the prospectus. So if you would like to know the meaning of a word
that isn't in boldface, you might still find it in the glossary.

Glossary A-B

Amortized cost
Amortized cost is a method used to value a fixed income security that starts
with the face value of the security and then adds or subtracts from that value
depending on whether the purchase price was greater or less than the value of
the security at maturity. The amount greater or less than the par value is
divided equally over the time remaining until maturity.

Average maturity
An average of when the individual bonds and other debt securities held in a
portfolio will mature.

[glossary to be continued]

Bond
A debt security, like an IOU, issued by a company, municipality or government
agency. In return for lending money to the issuer, a bond buyer generally
receives fixed periodic interest payments and repayment of the loan amount on a
specified maturity date. A bond's price changes prior to maturity and is
inversely related to current interest rates. When interest rates rise, bond
prices fall, and when interest rates fall, bond prices rise.

Bond ratings
Independent evaluations of creditworthiness, ranging from Aaa/AAA (highest
quality) to D (lowest quality). Bonds rated Baa/BBB or better are considered
investment grade. Bonds rated Ba/BB or lower are commonly known as junk bonds.
See also Nationally recognized statistical rating organization.

[glossary to be continued]

[glossary continued]

C-C

Capital
The amount of money you invest.

Capital appreciation
An increase in the value of an investment.

Capital gains distributions
Payments to mutual fund shareholders of profits (realized gains) from the sale
of a fund's portfolio securities. Usually paid once a year; may be either
short-term gains or long-term gains.

Commission
The fee an investor pays to a financial adviser for investment advice and help
in buying or selling mutual funds, stocks, bonds or other securities.

[glossary to be continued]
<PAGE>

[glossary continued]

Compounding
Earnings on an investment's previous earnings.

Consumer Price Index (CPI)
Measurement of U.S. inflation; represents the price of a basket of commonly
purchased goods.

Contingent deferred sales charge (CDSC)
Fee charged by some mutual funds when shares are redeemed (sold back to the
fund) within a set number of years; an alternative method for investors to
compensate a financial adviser for advice and service, rather than an up-front
commission.

[glossary to be continued]

[glossary continued]

C-E

Corporate bond
A debt security issued by a corporation. See "bond."

Depreciation
A decline in an investment's value.

Diversification
The process of spreading investments among a number of different securities,
asset classes or investment styles to reduce the risks of investing.

[glossary to be continued]

[glossary continued]
Dividend distribution
Payments to mutual fund shareholders of dividends passed along from the fund's
portfolio of securities.

Duration
A measurement of a fixed-income investment's price volatility. The larger the
number, the greater the likely price change for a given change in interest
rates.

Expense ratio
A mutual fund's total operating expenses, expressed as a percentage of its total
net assets. Operating expenses are the costs of running a mutual fund, including
management fees, offices, staff, equipment and expenses related to maintaining
the fund's portfolio of securities and distributing its shares. They are paid
from the fund's assets before any earnings are distributed to shareholders.

[glossary to be continued]

[glossary continued]
<PAGE>

F-M

Financial adviser
Financial professional (e.g., broker, banker, accountant, planner or insurance
agent) who analyzes clients' finances and prepares personalized programs to meet
objectives.

Fixed-income securities
With fixed-income securities, the money you originally invested is paid back at
a pre-specified maturity date. These securities, which include government,
corporate or municipal bonds, as well as money market securities, typically pay
a fixed rate of return (often referred to as interest). See Bonds.

[glossary to be continued]

[glossary continued]

Inflation
The increase in the cost of goods and services over time. U.S. inflation is
frequently measured by changes in the Consumer Price Index (CPI).

Investment goal
The objective, such as long-term capital growth or high current income, that a
mutual fund pursues.

Management fee
The amount paid by a mutual fund to the investment adviser for management
services, expressed as an annual percentage of the fund's average daily net
assets.

[glossary to be continued]

[glossary continued]

M-P

Market capitalization
The value of a corporation determined by multiplying the current market price of
a share of common stock by the number of shares held by shareholders. A
corporation with one million shares outstanding and the market price per share
of $10 has a market capitalization of $10 million.

Maturity
The length of time until a bond issuer must repay the underlying loan principal
to bondholders.

National Association of Securities Dealers (NASD)
A self-regulating organization, consisting of brokerage firms (including
distributors of mutual funds), that is responsible for overseeing the actions of
its members.

[glossary to be continued]

[glossary continued]

Nationally recognized statistical rating organization (NRSRO)
A company that assesses the credit quality of bonds, commercial paper, preferred
and common stocks and municipal short-term issues, rating the probability that
the issuer of the debt will meet the scheduled interest payments and repay the
principal. Ratings are published by such companies as Moody's Investors Service
(Moody's), Standard & Poor's Corporation (S&P), Duff & Phelps, Inc. (Duff), and
Fitch Investor Services, Inc. (Fitch).
<PAGE>

Net asset value (NAV)
The daily dollar value of one mutual fund share. Equal to a fund's net assets
divided by the number of shares outstanding.

Preferred stock
Preferred stock has preference over common stock in the payment of dividends and
liquidation of assets. Preferred stocks also often pays dividends at a fixed
rate and is sometimes convertible into common stock.

[glossary to be continued]

[glossary continued]

P-S

Price/earnings ratio
A measure of a stock's value calculated by dividing the current market price of
a share of stock by its annual earnings per share. A stock selling for $100 per
share with annual earnings per share of $5 has a P/E of 20.

Principal
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.

Prospectus
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.

[glossary to be continued]

[glossary continued]

Redeem
To cash in your shares by selling them back to the mutual fund.

Risk
Generally defined as variability of value; also credit risk, inflation risk,
currency and interest rate risk. Different investments involve different types
and degrees of risk.

S&P 500 Index
The Standard & Poor's 500 Composite Stock Index; an unmanaged index of 500
widely held common stocks that is often used to represent performance of the
U.S. stock market.

Sales charge
Charge on the purchase or redemption of fund shares sold through financial
advisers. May vary with the amount invested. Typically used to compensate
advisers for advice and service provided.

[glossary to be continued]

[glossary continued]
<PAGE>

S-S

SEC (Securities and Exchange Commission)
Federal agency established by Congress to administer the laws governing the
securities industry, including mutual fund companies.

Share classes
Different classifications of shares; mutual fund share classes offer a variety
of sales charge choices.

Signature guarantee
Certification by a bank, brokerage firm or other financial institution that a
customer's signature is valid; signature guarantees can be provided by members
of the STAMP program.

[Glossary to be continued]

[glossary continued]

Standard deviation
A measure of an investment's volatility; for mutual funds, measures how much a
fund's total return has typically varied from its historical average.

Statement of Additional Information (SAI)
The document serving as "Part B" of a fund's prospectus that provides more
detailed information about the fund's organization, investments, policies and
risks.

Stock
An investment that represents a share of ownership (equity) in a corporation.
Stocks are often referred to as "equities."

[glossary to be continued]

[glossary continued]

T-V

Total return
An investment performance measurement, expressed as a percentage, based on the
combined earnings from dividends, capital gains and change in price over a given
period.

[glossary to be continued]

[glossary continued]

Uniform Gift to Minors Act and Uniform Transfers to Minors Act
Federal and state laws that provide a simple way to transfer property to a minor
with special tax advantages.

Volatility
The tendency of an investment to go up or down in value by different magnitudes.
There are investments which are more likely to be "low volatility" and
investments which are more likely to be "high volatility" investments.

[end glossary]

<PAGE>

Small Cap Value Fund

Additional information about the Fund's investments is available in the Fund's
annual and semi-annual reports to shareholders. In the Fund's shareholder
reports, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during the report
period. You can find more detailed information about the Fund in the current
Statement of Additional Information, which we have filed electronically with the
Securities and Exchange Commission (SEC) and which is legally a part of this
prospectus. If you want a free copy of the Statement of Additional Information,
the annual or semi-annual report, or if you have any questions about investing
in the Fund, you can write to us at 1818 Market Street, Philadelphia, PA 19103,
or call toll-free 800o523o1918. You may also obtain additional information about
the Fund from your financial adviser.

You can find reports and other information about the Fund on the SEC web site
(http://www.sec.gov), or you can get copies of this information, after payment
of a duplicating fee, by writing to the Public Reference Section of the SEC,
Washington, D.C. 20549-6009. Information about the Fund, including its Statement
of Additional Information, can be reviewed and copied at the Securities and
Exchange Commission's Public Reference Room in Washington, D.C. You can get
information on the public reference room by calling the SEC at 1o800oSECo0330.

Web site
www.delawarefunds.com

E-mail
[email protected]

Shareholder Service Center

800o523o1918

Call the Shareholder Service Center Monday to Friday, 8 a.m. to 8 p.m.
Eastern time:

oFor fund information; literature; price, yield and performance figures.

oFor information on existing regular investment accounts and retirement plan
accounts including wire investments; wire redemptions; telephone redemptions and
telephone exchanges.

Delaphone Service

800o362oFUND (800o362o3863)

oFor convenient access to account information or current performance information
on all Delaware Investments Funds seven days a week, 24 hours a day, use this
Touch-Tone(R) service.

Investment Company Act file number: 811-4997

DELAWARE
INVESTMENTS
-----------------
Philadelphia * London

P-002 [--] PP 3/99

<PAGE>

DELAWARE
INVESTMENTS
-----------
Philadelphia * London

Small Cap Value Fund

Institutional Class

Prospectus
March 30, 1998

Growth of Capital Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.

<PAGE>

[inside front cover]

Table of Contents

Fund profile page
Small Cap Value Fund

How we manage the Fund page
Our investment strategies
The securities we typically invest in
The risks of investing in the Fund

Who manages the Fund page
Investment manager
Portfolio manager
Fund administration (Who's who)

About your account page
Investing in the Fund
How to buy shares
How to redeem shares
Account minimum
Exchanges

Dividends, distributions and taxes

Certain management considerations

Financial information page

2
<PAGE>

[sidebar copy at bottom of page]
How to use this prospectus

Step 1
Take a look at the fund profiles for an overview of the Fund.

Step 2
Learn in-depth information about how the Fund invests, the risks involved and
the people and organizations responsible for the Fund's day-to-day operations.

Step 3
Determine which fund features and services you would like to take advantage of.

Step 4
Use the glossary that begins on page ___ to find definitions of words printed in
bold type in the text throughout the prospectus.

3
<PAGE>

[House Graphic - Highlight 2nd blue tier of the house - growth of
capital funds]

Growth Equity Funds for...

Growth of Capital
These stock funds provide long-term growth potential with relatively high
volatility.

4
<PAGE>

Profile: Small Cap Value Fund
- -----------------------------

What are the Fund's goals?
Small Cap Value Fund seeks capital appreciation. Although the Fund will strive
to meet its goals, there is no assurance that it will.

An investment in the Fund is not a deposit of the bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

<PAGE>

How has the Fund performed?

This bar chart and table can help you evaluate the potential risks of investing
in the Fund. We show how returns for the Fund's Institutional Class shares have
varied over the past ten calendar years, as well as the average annual returns
for one, five and ten years -- all compared to the performance of the Russell
2000 Index. Small Cap Value Fund's Institutional Class commenced operations on
November 9, 1992. Return information for the Class for the periods prior to the
time the Class commenced operations is calculated by taking the performance of
Small Cap Value Fund A Class and eliminating all sales charges that apply to
Class A shares. However, for those periods, Class A 12b-1 payments were not
eliminated, and performance would have been affected if this adjustment had been
made. You should remember that unlike the Fund, the indexes are unmanaged and
don't reflect the actual costs of operating a mutual fund, such as buying,
selling, and holding securities. The Fund's past performance does not
necessarily indicate how it will perform in the future.

[GRAPHIC OMITTED: BAR CHART SHOWING YEAR BY YEAR TOTAL RETURN
(INSTITUTIONAL CLASS)]

* Small Cap Value Fund
* Russel 2000 Index

Year-by-year total return (Institutional Class)

Small Cap Value Fund Russell 2000 Index

1989 00.00% 00.00%
1990 00.00% 00.00%
1991 00.00% 00.00%
1992 00.00% 00.00%
1993 00.00% 00.00%
1994 00.00% 00.00%
1995 00.00% 00.00%
1996 00.00% 00.00%
1997 00.00% 00.00%
1998 00.00% 00.00%

As of December 31, 1998, the Institutional Class had a year-to-date return of
0.00%. During the ten years illustrated in this bar chart, the Institutional
Class' highest return was 00.00% for the quarter ended __________ and its lowest
return was 00.00% for the quarter ended __________.

Average annual return as of 12/31/98

Institutional Class Russell 2000 Index

1 year 00.00% 0.00%
5 years 00.00% 0.00%
10 years 00.00% 0.00%

6
<PAGE>

What are the Fund's fees and expenses?
You do not pay sales charges directly from your investments when you buy or sell
shares of the Institutional Class.

-----------------------------------------------------------------
Maximum sales charge (load) imposed on purchases as none
a percentage of offering price
-----------------------------------------------------------------
Maximum contingent deferred sales charge none
(load) as a percentage of original purchase
price or redemption price, whichever is lower
-----------------------------------------------------------------
Maximum sales charge (load) imposed on none
reinvested dividends
-----------------------------------------------------------------
Redemption fees none
-----------------------------------------------------------------
Exchange Fees1 none
-----------------------------------------------------------------

------------------------------------------------------------------
Management fees 0.00%
------------------------------------------------------------------
Distribution and service (12b-1) fees None
------------------------------------------------------------------
Other expenses 0.00%
------------------------------------------------------------------
Total operating expenses 0.00%
------------------------------------------------------------------

This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds with similar investment
objectives. We show the cumulative amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5% return over the time shown. 2 This is an
example only, and does not represent future expenses, which may be greater or
less than those shown here.

----------------------------
1 year $00
----------------------------
3 years $000
----------------------------
5 years $000
----------------------------
10 years $000
----------------------------

(1) Exchanges are subject to the requirements of each fund in the Delaware
Investments family. A front-end sales charge may apply if you exchange your
shares into a fund that has a front-end sales charge.

(2) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the Fund's
total operating expenses remain unchanged in each of the periods we show.

<PAGE>

How we manage the Fund
- ----------------------

We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.

Companies may be undervalued for many reasons. They may be unknown to stock
analysts, they may have experienced poor earnings or their industry may be in
the midst of a period of weak growth.

Because there is added risk when investing in smaller companies, which may still
be in their early developmental stages, we maintain a well-diversified
portfolio, typically holding xx to xx different stocks, representing a wide
array of industries.

<PAGE>

The securities we typically invest in
Stocks offer investors the potential for capital appreciation, and may pay
dividends as well.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ----------------------------------------------------------------------------------------------------------------------------
Small Cap Value Fund
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Common stocks: Securities that represent Generally, we invest 90% to 100% of net assets in common stock of
shares of ownership in a corporation. small companies that we believe are selling for less than their true
Stockholders participate in the corporation's value. Under normal conditions, we will hold at least 65% of the
profits and losses, proportionate to the Fund's net assets in these stocks.
number of shares they own.
- ----------------------------------------------------------------------------------------------------------------------------
Real Estate Investment Trusts: A The Fund is permitted to invest in REITs and would typically do so
company, usually traded publicly, that when this sector or specific companies within the sector appeared to
manages a portfolio of real estate to earn offer opportunities for price appreciation.
profits for shareholders.
- ----------------------------------------------------------------------------------------------------------------------------
Foreign Securities and American Although Small Cap Value Fund may invest up to 25% of its net assets
Depositary Receipts in foreign securities or depository receipts, the manager has no
Securities of foreign entities issued directly present intention of doing so. We may hold ADRs when we believe they
or, in the case of American Depositary offer greater value and greater appreciation potential than U.S.
Receipts, through a U.S. bank. ADRs are securities.
issued by a U.S. bank and represent a
stated number of shares of a foreign
corporation that the bank holds in its vault.
An ADR entitles the holder to all dividends
and capital gains earned by the underlying
foreign shares. ADRs are bought and sold
the same as U.S. securities.
- ----------------------------------------------------------------------------------------------------------------------------
Repurchase agreements: An agreement Typically, we use repurchase agreements as a short-term investment for
between a buyer and seller of securities in a Fund's cash position. In order to enter into these repurchase
which the seller agrees to buy the securities agreements, the Fund must have collateral of at least 102% of the
back within a specified time at the same repurchase price. Small Cap Value Fund may not have more than 10% of
price the buyer paid for them, plus an its total assets in repurchase agreements with maturities of over
amount equal to an agreed upon interest seven days.
rate. Repurchase agreements are often
viewed as equivalent to cash.
- ----------------------------------------------------------------------------------------------------------------------------
Restricted securities: Privately placed We may invest without limitation in privately placed securities that
securities whose resale is restricted under are eligible for resale only among certain institutional buyers
securities law. without registration. These are commonly known as Rule 144A
Securities. Other restricted securities must be limited to 10% of
total fund assets.
- ----------------------------------------------------------------------------------------------------------------------------
Illiquid Securities: Securities that do not We may invest up to 10% of net assets in illiquid securities.
have a ready market, and cannot be easily
sold, if at all, at a reasonable price.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

9
<PAGE>

Lending securities
Small Cap Value Fund may lend up to 25% of its assets to qualified dealers and
investors for their use in security transactions.

Purchasing securities on a when-issued or delayed delivery basis
Small Cap Value Fund may buy or sell securities on a when-issued or delayed
delivery basis; that is, paying for securities before delivery or taking
delivery at a later date.
Portfolio turnover
We anticipate that Small Cap Value Fund's annual portfolio turnover will be less
than 100%. A turnover rate of 100% would occur if a Fund sold and replaced
securities valued at 100% of its net assets within one year.

<PAGE>

The risks of investing in the Fund
Investing in any mutual fund involves risk, including the risk that you may
receive little or no return on your investment, and the risk that you may lose
part or all of the money you invest. Before you invest in a Fund you should
carefully evaluate the risks. Because of the nature of the Fund, you should
consider an investment in either one to be a long-term investment that typically
provides the best results when held for a number of years. The following are the
chief risks you assume when investing in Small Cap Value Fund. Please see the
Statement of Additional Information for further discussion of these risks and
the other risks not discussed here.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- ----------------------------------------------------------------------------------------------------------------------------
Small Cap Value Fund
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Market risk is the risk that all or a We maintain a long-term investment approach and focus on stocks we
majority of the securities in a certain believe can appreciate over an extended time frame regardless of
market -- like the stock or bond market interim market fluctuations. We do not try to predict overall stock
- -- will decline in value because of market movements and do not trade for short-term purposes. We may hold
factors such as economic conditions, a substantial part of Small Cap Value Fund's assets in cash or cash
future expectations or investor equivalents as a temporary, defensive strategy.
confidence.
- ----------------------------------------------------------------------------------------------------------------------------
Industry and security risk is the risk We limit the amount of Small Cap Value Fund's assets invested in any
that the value of securities in a one industry and in any individual security. We also follow a rigorous
particular industry or the value of an selection process before choosing securities and continuously monitor
individual stock or bond will decline them while they remain in the portfolio.
because of changing expectations for
the performance of that industry or for
the individual company issuing the stock.
- ----------------------------------------------------------------------------------------------------------------------------
Small company risk is the risk that Small Cap Value Fund maintains a well-diversified portfolio, selects
prices of smaller companies may be stocks carefully and monitors them continuously. And, because we focus
more volatile than larger companies on stocks that are already selling at relatively low prices, we
because of limited financial resources believe we may experience less price volatility than small-cap funds
or dependence on narrow product that do not use a value-oriented strategy.
lines.
- -----------------------------------------------------------------------------------------------------------------------------
Interest rate risk is the risk that We analyze each company's financial situation and its cashflow to
securities will decrease in value if determine the company's ability to finance future expansion and
interest rates rise. The risk is generally operations. The potential affect that rising interest rates might have
associated with bonds; however, on a stock is taken into consideration before the stock is purchased.
because smaller companies often
borrow money to finance their
operations, they may be adversely
affected by rising interest rates.
- ----------------------------------------------------------------------------------------------------------------------------
Foreign risk is the risk that foreign We typically invest only a small portion of Small Cap Value Fund's portfolio
securities may be adversely affected in foreign securities. When we do purchase foreign securities, they are often
by political instability, changes in denominated in U.S. dollars. To the extent we invest in foreign securities,
currency exchange rates, foreign we invest primarily in issuers of developed countries, which are less likely
economic conditions or inadequate to encounter these foreign risks than issuers in developing countries. The
regulatory and accounting standards. Fund may use hedging techniques to help offset potential foreign losses.
- ----------------------------------------------------------------------------------------------------------------------------
Liquidity risk is the possibility that We limit exposure to illiquid securities.
securities cannot be readily sold, or
can only be sold at a price significantly
lower than their broadly recognized
value.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

11
<PAGE>

Who manages the Fund

Portfolio Manager

12
<PAGE>

Who's who?
This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.

[GRAPHIC OMITTED: DIAGRAM SHOWING THE VARIOUS ORGANIZATIONS INVOLVED
WITH MANAGING, ADMINISTERING, AND SERVICING THE DELAWARE INVESTMENTS
FUNDS]
<TABLE>
<CAPTION>

Board of Directors
<S> <C> <C>
Investment Manager The Funds Custodian

Delaware Management Company The Chase Manhattan Bank
One Commerce Square 4 Chase Metrotech Center
Philadelphia, PA 19103 Brooklyn, NY 11245

Portfolio managers Distributor Service agent
(see page ___ for details) Delaware Distributors, L.P.. Delaware Service Company, Inc.
1818 Market Street 1818 Market Street
Philadelphia, PA 19103 Philadelphia, PA 19103
</TABLE>

Shareholders

Portfolio managers Portfolio managers are employed by the investment manager to
make investment decisions for individual portfolios on a day-to-day basis.

Custodian Mutual funds are legally required to protect their portfolio
securities and typically place them with a qualified bank custodian who
segregates fund securities from other bank assets.

<PAGE>

About your account
- ------------------

Investing in the Fund
Institutional Class shares are available for purchase only by the
following:

o retirement plans introduced by persons not associated with brokers or
dealers that are primarily engaged in the retail securities business and
rollover individual retirement accounts from such plans

o tax-exempt employee benefit plans of the manager or its affiliates and
securities dealer firms with a selling agreement with the distributor

o institutional advisory accounts of the manager, or its affiliates and those
having client relationships with Delaware Investment Advisers, an affiliate
of the manager, or its affiliates and their corporate sponsors, as well as
subsidiaries and related employee benefit plans and rollover individual
retirement accounts from such institutional advisory accounts

o a bank, trust company and similar financial institution investing for its
own account or for the account of its trust customers for whom such
financial institution is exercising investment discretion in purchasing
shares of the Class, except where the investment is part of a program that
requires payment to the financial institution of a Rule 12b-1 Plan fee

o registered investment advisers investing on behalf of clients that consist
solely of institutions and high net-worth individuals having at least
$1,000,000 entrusted to the adviser for investment purposes, but only if
the adviser is not affiliated or associated with a broker or dealer and
derives compensation for its services exclusively from its clients for such
advisory services

14
<PAGE>

How to buy shares

[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]

By mail
Complete an investment slip and mail it with your check, made payable
to the fund and class of shares you wish to purchase, to Delaware Investments,
1818 Market Street, Philadelphia, PA 19103-3682. If you are making an initial
purchase by mail, you must include a completed investment application (or an
appropriate retirement plan application if you are opening a retirement account)
with your check.

[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]

By wire
Ask your bank to wire the amount you want to invest to First Union Bank, ABA
#031201467, Bank Account number 2014128934013. Include your account number and
the name of the fund in which you want to invest. If you are making an initial
purchase by wire, you must call us at 800-510-4015 so we can assign you an
account number.

[GRAPHIC OMITTED: ILLUSTRATION OF AN EXCHANGE SYMBOL]

By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that you may not exchange your shares for Class B or Class C
shares. To open an account by exchange, call your Client Services Representative
at 800-510-4015.

[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]

Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.

15
<PAGE>

About your account (continued)

How to buy shares (continued)

The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receives your order before the close of trading on
the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a business day,
you will pay that day's closing share price which is based on the Fund's net
asset value. If we receive your order after the close of trading, you will pay
the next business day's price. A business day is any day that the New York Stock
Exchange is open for business. Currently, the Exchange is closed when the
following holidays are observed: New Year's Day, Martin Luther King, Jr.'s
Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas. We reserve the right to reject any purchase
order.

<PAGE>

How to redeem shares

[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]

By mail
You can redeem your shares (sell them back to the fund) by mail by writing to:
Delaware Investments, 1818 Market Street, Philadelphia, PA 19103-3682. All
owners of the account must sign the request, and for redemptions of $50,000 or
more, you must include a signature guarantee for each owner. You can also fax
your written request to 215-255-8864. Signature guarantees are also required
when redemption proceeds are going to an address other than the address of
record on an account.

[GRAPHIC OMITTED: ILLUSTRATION OF A TELEPHONE]

[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]

By wire
You can redeem $1,000 or more of your shares and have the proceeds deposited
directly to your bank account the next business day after we receive your
request. Bank information must be on file before you request a wire redemption.

[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]

Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.

17
<PAGE>

About your account (continued)

How to redeem shares (cont.)

If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.

When you send us a properly completed request to redeem or exchange shares, you
will receive the net asset value as determined on the business day we receive
your request. We will send you a check, normally the next business day, but no
later than seven days after we receive your request to sell your shares. If you
purchased your shares by check, we will wait until your check has cleared, which
can take up to 15 days, before we send your redemption proceeds.

Account minimum
If you redeem shares and your account balance falls below $250, the Fund may
redeem your account after 60 days' written notice to you.

Exchanges
You can exchange all or part of your shares for shares of the same class in
another Delaware Investments fund. If you exchange shares to a fund that has a
sales charge you will pay any applicable sales charges on your new shares. You
don't pay sales charges on shares that are acquired through the reinvestment of
dividends. You may have to pay taxes on your exchange. When you exchange shares,
you are purchasing shares in another fund so you should be sure to get a copy of
the fund's prospectus and read it carefully before buying shares through an
exchange. You may not exchange your shares for Class B and Class C shares of the
funds in the Delaware Investments family.

Dividends, distributions and taxes
Dividends and capital gains, if any, are paid annually. We automatically
reinvest all dividends and any capital gains.

Tax laws are subject to change, so we urge you to consult your tax adviser about
your particular tax situation and how it might be affected by current tax law.
The tax status of your dividends from this Fund is the same whether you reinvest
your dividends or receive them in cash. Distributions from the Fund's long-term
capital gains are taxable as capital gains, while distributions from short-term
capital gains and net investment income are generally taxable as ordinary
income. Any capital gains may be taxable at different rates depending on the
length of time the Fund held the assets. In addition, you may be subject to
state and local taxes on distributions.

We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.

<PAGE>

Certain management considerations

<PAGE>

Financial highlights

- -----------------------------------------------------------------------------------------------------------------------------------
Institutional Class
Year Ended 11/30
--------------------------------------------------------------
--------------------------------------------------------------
Small Cap Value Fund 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $25.910 $22.860 $19.400 $20.140

Income from investment operations

Net investment income 0.209 0.193 0.297 0.195

Net realized and net unrealized gain on investments 7.936 4.047 3.628 (0.685)

Total from investment operations 8.145 4.240 3.925 (0.490)

Less dividends and distributions

Dividends from net investment income (0.205) (0.300) (0.215) (0.080)

Distributions from realized gain on investments (3.900) (0.890) (0.250) (0.170)

Total dividends and distributions (4.105) (1.190) (0.465) (0.250)

Net asset value, end of period $29.950 $25.910 $22.860 $19.400

Total return 36.73 19.45 20.76 (2.51)

Ratios and supplemental data:

Net assets, end of period (000 omitted) $14,878 $16,373 $7,294 $6,385

Ratio of expenses to average net assets 1.09 1.15 1.18 1.16

Ratio of expenses to average net assets
prior to expense limitation

Ratio of net investment income to average net assets 0.81 0.81 1.48 1.05

Ratio of net investment income to average net assets
prior to expense limitation

Portfolio turnover 53 87 65 14%
- -----------------------------------------------------------------------------------------------------------------------------------

Volatility
Volatility, as indicated by year-by-year total return(1) 1998 1997 1996 1995 1994
--------------------------------------------------------------
Volatility chart is not part of Financial highlights and has not 36.73 19.45 20.76 (2.51)
been audited by Ernst & Young LLP
</TABLE>

(1) 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.

20
<PAGE>

How to read the financial highlights

Net investment income
Net investment income includes dividend and interest income earned from the
Fund's securities; it is after expenses have been deducted.

Net realized and unrealized gain on investments
A realized gain occurs when we sell an investment at a profit, while a realized
loss occurs when we sell an investment at a loss. When an investment increases
or decreases in value but we do not sell it, we record an unrealized gain or
loss. The amount of realized gain per share that we pay to shareholders is
listed under "Less dividends and distributions-Distributions from net realized
gain on investments."

Net asset value (NAV)
This is the value of a mutual fund share, calculated by dividing the net assets
by the number of shares outstanding.

Net assets
Net assets represent the total value of all the assets in the Fund's portfolio,
less any liabilities, that are attributable to that class of the Fund.

Ratio of expenses to average daily assets
The expense ratio is the percentage of net assets that a fund pays annually for
operating expenses and management fees. These expenses include accounting and
administration expenses, services for shareholders, and similar expenses.

Ratio of net investment income to average daily net assets
We determine this ratio by dividing net investment income by average net assets.

21
<PAGE>

[begin glossary]

How to use this glossary

Glossary A-C

[glossary to be continued]

[glossary continued]

Capital
The amount of money you invest.

[glossary to be continued]

[glossary continued]

C-D

Capital appreciation
An increase in the value of an investment.

Compounding
Earnings on an investment's previous earnings.

Consumer Price Index (CPI)
Measurement of U.S. inflation; represents the price of a basket of commonly
purchased goods.

[glossary to be continued]

22
<PAGE>

[glossary continued]

Corporate bond
A debt security issued by a corporation. See "bond."

Cost basis
- ----------
The original purchase price of an investment, used in determining capital gains
and losses.

Depreciation
A decline in an investment's value.

Diversification
The process of spreading investments among a number of different securities,
asset classes or investment styles to reduce the risks of investing.

[glossary to be continued]

[glossary continued]

D-I

Dividend distribution
Payments to mutual fund shareholders of dividends passed along from the fund's
portfolio of securities.

[glossary to be continued]

[glossary continued]

Financial adviser
Financial professional (e.g., broker, banker, accountant, planner or insurance
agent) who analyzes clients' finances and prepares personalized programs to meet
objectives.

Inflation
The increase in the cost of goods and services over time. U.S. inflation is
frequently measured by changes in the Consumer Price Index (CPI).

[glossary to be continued]

[glossary continued]

I-N

Investment goal
The objective, such as long-term capital growth or high current income, that a
mutual fund pursues.

23
<PAGE>

Management fee
The amount paid by a mutual fund to the investment adviser for management
services, expressed as an annual percentage of the fund's average daily net
assets.

[glossary to be continued]

[glossary continued]

[glossary to be continued]

[glossary continued]

N-S

Net asset value (NAV)
The daily dollar value of one mutual fund share. Equal to a fund's net assets
divided by the number of shares outstanding.

[glossary to be continued]
24
<PAGE>

[glossary continued]

Principal
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.

Prospectus
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.

Redeem
To cash in your shares by selling them back to the mutual fund.

Risk
Generally defined as variability of value; also credit risk, inflation risk,
currency and interest rate risk. Different investments involve different types
and degrees of risk.

[glossary to be continued]

[glossary continued]

S-T

S&P 500 Index
The Standard & Poor's 500 Composite Stock Index; an unmanaged index of 500
widely held common stocks that is often used to represent performance of the
U.S. stock market.

SEC (Securities and Exchange Commission)
Federal agency established by Congress to administer the laws governing the
securities industry, including mutual fund companies.

Share classes
Different classifications of shares; mutual fund share classes offer a variety
of sales charge choices.

[glossary to be continued]

[glossary continued]

Signature guarantee
Certification by a bank, brokerage firm or other financial institution that a
customer's signature is valid; signature guarantees can be provided by members
of the STAMP program.

Standard deviation
A measure of an investment's volatility; for mutual funds, measures how much a
fund's total return has typically varied from its historical average.

25
<PAGE>

Stock
An investment that represents a share of ownership (equity) in a corporation.
Stocks are often referred to as "equities."

Total return
An investment performance measurement, expressed as a percentage, based on the
combined earnings from dividends, capital gains and change in price over a given
period.

[glossary continued]

Volatility
- ----------
The tendency of an investment to go up or down in value by different magnitudes.
There are investments which are more likely to be "low volatility" and
investments which are more likely to be "high volatility" investments.

[end glossary]

26
<PAGE>

[back cover]

Small Cap Value Fund

Additional information about the Fund's investments is available in the Fund's
annual and semi-annual reports to shareholders. In the Fund's shareholder
reports, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during the report
period. You can find more detailed information about the Fund in the current
Statement of Additional Information, which we have filed electronically with the
Securities and Exchange Commission (SEC) and which is legally a part of this
prospectus. If you want a free copy of the Statement of Additional Information,
the annual or semi-annual report, or if you have any questions about investing
in this Fund, you can write to us at 1818 Market Street, Philadelphia, PA
19103-3682, or call toll-free 800-523-1918. You may also obtain additional
information about the Fund from your financial adviser.

Web site
www.delawarefunds.com
- ---------------------

E-mail
[email protected]

Client Services Representative

800-510-4015

Delaphone Service

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

For convenient access to account information or current performance information
on all Delaware Investments Funds seven days a week, 24 hours a day, use this
Touch-Tone service.

DELAWARE
INVESTMENTS
-----------
Philadelphia * London

P-002 [--] PP 3/99

<PAGE>

Small Cap Contrarian Fund Retail

DELAWARE
INVESTMENTS
--------------------
Philadelphia * London

Small Cap Contrarian Fund

Class A * Class B* Class C

Prospectus
March 30, 1998

Growth of Capital Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.

<PAGE>

[inside front cover]

Table of Contents

Fund profile page
Small Cap Contrarian Fund

How we manage the Fund page
Our investment strategies
The securities we typically invest in
The risks of investing in the Fund

Who manages the Fund page
Investment manager
Portfolio manager
Fund administration (Who's who)

Certain management considerations page

Financial highlights page

Glossary page
<PAGE>

How to use this prospectus

Step 1
Take a look at the fund profiles for an overview of the Fund.

Step 2
Learn in-depth information about how the Fund invests, the risks involved and
the people and organizations responsible for the Fund's day-to-day operations.

Step 3
Determine which fund features and services you would like to take advantage of.

Step 4
Use the glossary that begins on page ___ to find definitions of words printed in
bold type in the text throughout the prospectus.

<PAGE>

Fund Profile:
Investment Overview
When choosing a mutual fund to invest in, you have a variety of options and
important information to consider. This prospectus provides information about
Small Cap Contrarian Fund, one of the Delaware Investments Family of Funds.

Investing for growth of capital with Small Cap Contrarian Fund...
Investors with long-term goals often choose mutual funds designed to provide
growth of capital. These funds provide the potential to increase the value of
your investment through increases in stock prices. These funds may experience a
relatively high level of volatility, but generally offer greater return
opportunities than total return equity funds or bond funds. Like all mutual
funds, funds seeking growth of capital allow you to invest conveniently in a
diversified portfolio without having to select and monitor individual securities
on your own.

[House Graphic - Highlight 2nd blue tier of the house - growth of capital funds]

Growth Equity Funds for...

Growth of Capital
These stock funds provide long-term growth potential with relatively high
volatility.

<PAGE>

Profile: Small Cap Contrarian Fund

What are the Fund's goals?
Small Cap Contrarian Fund seeks long-term capital appreciation. Although the
Fund will strive to meet its goals, there is no assurance that it will.

What are the main risks of investing in the Fund?
Investing in any mutual fund involves risk, including the risk that you may lose
part or all of the money you invest. The price of Fund shares will increase and
decrease according to changes in the value of the Fund's investments. This Fund
will be affected by declines in stock prices. The companies that Small Cap
Contrarian Fund invests in may involve greater risk due to their size, narrow
product lines and limited financial resources. In addition, the Small Cap
Contrarian Fund may be concentrated in certain industries at any given time, a
strategy that may increase volatility. For a more complete discussion of risk,
please turn to page x.

An investment in the Fund is not a deposit of the bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency.

<PAGE>

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

- ------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
Purchases as a percentage of offering price 5.75% none none
- ------------------------------------------------------------------------------
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
Redemption price, whichever is lower none1 5%2 1%3
- ------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
Reinvested dividends None none none
- ------------------------------------------------------------------------------
Redemption fees None none none
- ------------------------------------------------------------------------------

Annual fund operating expenses are deducted from the Fund's asets before it
pays dividends and before its net asset value and total return are calculated.
We will not charge you separately for these expenses. These expenses are based
on amounts incurred during the Fund's most recent fiscal year.

- ----------------------------------------------------------------------------
Management fees 0.00% 0.00% 0.00%

- ----------------------------------------------------------------------------
Distribution and service (12b-1) fees4 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------
Other expenses5 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------
Total operating expenses6 0.00% 0.00% 0.00%
- ----------------------------------------------------------------------------

This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds with similar investment
objectives. We show the cumulative amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5% return over the time shown. 7 This is an
example only, and does not represent future expenses, which may be greater or
less than those shown here.

------------------------------------------------------------------------------
CLASS8 A B B (if redeemed) C C (if redeemed)
------------------------------------------------------------------------------
1 year $000 $000 $000 $000 $000
------------------------------------------------------------------------------
3 years $000 $000 $000 $000 $000
------------------------------------------------------------------------------

1 A purchase of Class A shares of $1 million or more may be made at net asset
value. However, if you buy the shares through a financial adviser who is
paid a commission, a contingent deferred sales charge will apply to certain
redemptions. Additional Class A purchase options that involve a contingent
deferred sales charge may be permitted from time to time and will be
disclosed in the prospectus if they are available.

2 If you redeem Class B shares during the first year after you buy them, you
will pay a contingent deferred sales charge of 5%, which declines to 4%
during the second year, 3% during the third and fourth years, 2% during the
fifth year, 1% during the sixth year, and 0% thereafter.

3 Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.

4 The Class A shares are subject to a 12b-1 fee of 0.30% of average daily net
assets and Class B and C shares are each subject to a 12b-1 fee of 1.00% of
average daily net assets. The distributor has agreed to waive these 12b-1
fees through May 31, 1999.

5 Other expenses are based on estimated amounts for the current fiscal year.

6 The investment manager has agreed to waive fees and pay expenses through May
31, 1999 in order to prevent total operating expenses (excluding any taxes,
interest, brokerage fees, extraordinary expenses and 12b-1 fees) from
exceeding 0.75% of average daily net assets.
<PAGE>

7 The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show. In addition, this example does not reflect the voluntary expense cap
described in footnote 6.

8 Class B shares automatically convert to Class A shares at the end of the
eighth year. The example does not assume this conversion since it only
reflects expenses for one and three years.

<PAGE>

How we manage the Fund

Our investment strategies
We research individual companies and analyze economic and market conditions,
seeking to identify the securities or market sectors that we think are the best
investments for Small Cap Contrarian Fund. Following is a description of how the
portfolio manager pursues the Fund's investment goal.

We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.

Companies may be undervalued for many reasons. They may be unknown to stock
analysts, they may have experienced poor earnings or their industry may be in
the midst of a period of weak growth.

We will use a selection model which we developed ourselves, to help identify
companies that meet our investment guidelines. Our initial search will focus on
several key characteristics including price-to-sales ratio, price-to-cash flow
ratio and price-to-earnings ratio.

We will then carefully evaluate the financial strength of the company, the
nature of its management, any developments affecting the company or its
industry, anticipated new products or services, possible management changes,
projected takeovers or technological breakthroughs. Using this extensive
analysis, our goal is to pinpoint the companies within the universe of
undervalued stocks, whose true value is likely to be recognized and rewarded
with a rising stock price in the future.

Because there is added risk when investing in smaller companies, which may still
be in their early developmental stages, we maintain a well-diversified
portfolio, typically holding xx to xx different stocks, representing a wide
array of industries.

<PAGE>

The securities we typically invest in
Stocks offer investors the potential for capital appreciation, and may pay
dividends as well.
<TABLE>
<CAPTION>

- --------------------------------------------------- -----------------------------------------------------------------------
Securities How we use them
- --------------------------------------------------- -----------------------------------------------------------------------
Small Cap Contrarian Fund
- --------------------------------------------------- -----------------------------------------------------------------------
<S> <C>
Common stocks: Securities that represent shares Generally, we invest 90% to 100% of net assets in common stock of
of ownership in a corporation. Stockholders small companies that we believe are selling for less than their
participate in the corporation's profits and true value. Under normal conditions, we will hold at least 65% of
losses, proportionate to the number of shares the Fund's net assets in these stocks.
they own.
- --------------------------------------------------- -----------------------------------------------------------------------
Real Estate Investment Trusts: A company, usually The Fund is permitted to invest in REITs and would typically do so
traded publicly, that manages a portfolio of real when this sector or specific companies within the sector appeared to
estate to earn profits for shareholders. offer opportunities for price appreciation.
- --------------------------------------------------- -----------------------------------------------------------------------
Foreign Securities and American Depositary Small Cap Contrarian Fund may invest up to 25% of its net assets in
Receipts foreign securities or depository receipts. We have no present
Securities of foreign entities issued directly intention of investing directly in foreign securities; however, we
or, in the case of American Depositary Receipts, may hold ADRs when we believe they offer greater value and greater
through a U.S. bank. ADRs are issued by a U.S. appreciation potential than U.S. securities.
bank and represent a stated number of shares of a
foreign corporation that the bank holds in its
vault. An ADR entitles the holder to all
dividends and capital gains earned by the
underlying foreign shares. ADRs are bought and
sold the same as U.S. securities.
- --------------------------------------------------- -----------------------------------------------------------------------
Repurchase agreements: An agreement between a Typically, we use repurchase agreements as a short-term investment
buyer and seller of securities in which the for a Fund's cash position. In order to enter into these repurchase
seller agrees to buy the securities back within a agreements, the Fund must have collateral of at least 102% of the
specified time at the same price the buyer paid repurchase price. Small Cap Contrarian Fund may not have more than
for them, plus an amount equal to an agreed upon 15% of its total assets in repurchase agreements with maturities of
interest rate. Repurchase agreements are often over seven days.
viewed as equivalent to cash.
- --------------------------------------------------- -----------------------------------------------------------------------
Restricted securities: Privately placed We may invest without limitation in privately placed securities that
securities whose resale is restricted under are eligible for resale only among certain institutional buyers
securities law. without registration. These are commonly known as Rule 144A
Securities. Other restricted securities must be limited to 15% of
total fund assets.
- --------------------------------------------------- -----------------------------------------------------------------------
Illiquid Securities: Securities that do not have We may invest up to 15% of net assets in illiquid securities.
a ready market, and cannot be easily sold,
if at all, at a reasonable price.
- --------------------------------------------------- -----------------------------------------------------------------------
</TABLE>

Small Cap Contrarian Fund may also invest in other securities including
convertible securities, warrants, preferred stocks, and bonds. Small Cap
Contrarian Fund may invest up to 25% of its net assets in foreign securities.
Please see the Statement of Additional Information for additional descriptions
and risk information on these securities as well as those listed in the table
above. You can find additional information about the investments in the Fund's
portfolio in the annual or semi-annual shareholder report.

Lending securities
Small Cap Contrarian Fund may lend up to 25% of its assets to qualified dealers
and investors for their use in security transactions.

Purchasing securities on a when-issued or delayed delivery basis
Small Cap Contrarian Fund may buy or sell securities on a when-issued or delayed
delivery basis; that is, paying for securities before delivery or taking
delivery at a later date.

Portfolio turnover
We anticipate that Small Cap Contrarian Fund's annual portfolio turnover will be
less than 100%. A turnover rate of 100% would occur if a Fund sold and replaced
securities valued at 100% of its net assets within one year.

<PAGE>

- ------------------------------------------------- ----------------------------------------------------------------------------------
Risks How we strive to manage them
- ------------------------------------------------- ----------------------------------------------------------------------------------
Small Cap Contrarian Fund
- ------------------------------------------------- ----------------------------------------------------------------------------------
<S> <C>
Market risk is the risk that all or a majority We maintain a long-term investment approach and focus on stocks we believe can
of the securities in a certain market -- like appreciate over an extended time frame regardless of interim market fluctuations.
the stock or bond market -- will decline in We do not try to predict overall stock market movements and do not trade for
value because of factors such as economic short-term purposes.
conditions, future expectations or investor
confidence. We may hold a substantial part of Small Cap Contrarian Fund's assets in cash or
cash equivalents as a temporary, defensive strategy.
- ------------------------------------------------- ----------------------------------------------------------------------------------
Industry and security risk is the risk that the We follow a rigorous selection process before choosing securities and
value of securities in a particular industry or continuously monitor them while they remain in the portfolio.
the value of an individual stock or bond will
decline because of changing expectations for The Small Cap Contrarian Fund is a diversified portfolio with investments in
the performance of that industry or for the companies representing many different industries. We do not make additional
individual company issuing the stock. investments in a stock if that stock represents 5% of net assets, nor in an
industry if that industry represents 25% of net assets. However, it is likely
that our holdings will be more concentrated in certain industries if the
industry as a whole has strong value characteristics. This could increase
volatility.

- ------------------------------------------------- ----------------------------------------------------------------------------------
Small company risk is the risk that prices of Small Cap Contrarian Fund maintains a well-diversified portfolio, selects stocks
smaller companies may be more volatile than carefully and monitors them continuously. And, because we focus on stocks that
larger companies because of limited financial are already selling at relatively low prices, we believe we may experience less
resources or dependence on narrow product lines. price volatility than small-cap funds that do not use a value-oriented strategy.
- ------------------------------------------------- ----------------------------------------------------------------------------------
Interest rate risk is the risk that securities We analyze each company's financial situation and its cashflow to determine the
will decrease in value if interest rates rise. company's ability to finance future expansion and operations. The potential
The risk is generally associated with bonds; affect that rising interest rates might have on a stock is taken into
however, because smaller companies often borrow consideration before the stock is purchased.
money to finance their operations, they may be
adversely affected by rising interest rates.
- ------------------------------------------------- ----------------------------------------------------------------------------------
Foreign risk is the risk that foreign We typically invest only a small portion of Small Cap Contrarian Fund's
securities may be adversely affected by portfolio in foreign securities. When we do purchase foreign securities, they
political instability, changes in currency are often denominated in U.S. dollars. To the extent we invest in foreign
exchange rates, foreign economic conditions or securities, we invest primarily in issuers of developed countries, which are
inadequate regulatory and accounting standards. less likely to encounter these foreign risks than issuers in developing
countries. The Fund may use hedging techniques to help offset potential foreign
currency losses.
- ------------------------------------------------- ----------------------------------------------------------------------------------
Liquidity risk is the possibility that We limit exposure to illiquid securities.
securities cannot be readily sold, or can only
be sold at a price significantly lower than
their broadly recognized value.
- ------------------------------------------------- ----------------------------------------------------------------------------------
</TABLE>

<PAGE>

Who manages the Fund

Investment Manager
The Fund is managed by Delaware Management Company, a series of Delaware
Management Business Trust which is an indirect, wholly owned subsidiary of
Delaware Management Holdings, Inc. Delaware Management Company makes investment
decisions for the Fund, manages the Fund's business affairs and provides daily
administrative services For these services, the Manager is paid an annual fee
equal to on an annual basis: 0.75% on the first $500 million of average daily
net assets; 0.70% on the next $500 million; 0.65% on the next $1.5 billion; and
0.60% on the average daily net assets in excess of $2.5 billion.

Portfolio Managers

Andrea Giles, [Assistant Vice President/Portfolio Manager] of the Fund, holds a
BSAD from the Massachusetts Institute of Technology and an MBA in Finance from
Columbia University. Prior to joining Delaware Investments in 1996, she was an
account officer in the Leveraged Capital Group with Citibank.

<PAGE>

Who's who?
This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.

[GRAPHIC OMITTED: DIAGRAM SHOWING THE VARIOUS ORGANIZATIONS INVOLVED
WITH MANAGING, ADMINISTERING, AND SERVICING THE DELAWARE INVESTMENTS
FUNDS]
<TABLE>
<CAPTION>

Board of Directors

Investment manager The Fund Custodian

Delaware Management Company The Chase Manhattan Bank
One Commerce Square 4 Chase Metrotech Center
Philadelphia, PA 19103 Brooklyn, NY 11245

Portfolio managers Distributor Service agent
(see page ___ for details) Delaware Distributors, L.P. Delaware Service Company, Inc.
1818 Market Street 1818 Market Street
Philadelphia, PA 19103 Philadelphia, PA 19103

Financial advisers

Shareholders
</TABLE>

Portfolio managers Portfolio managers are employed by the investment manager to
make investment decisions for individual portfolios on a day-to-day basis.

Custodian Mutual funds are legally required to protect their portfolio
securities and typically place them with a qualified bank custodian who
segregates fund securities from other bank assets.

<PAGE>

About your account

Investing in the Funds
You can choose from a number of share classes for each Fund. Because each share
class has a different combination of sales charges, fees, and other features,
you should consult your financial adviser to determine which class best suits
your investment goals and time frame.

Choosing a share class

Class A
o Class A shares have an up-front sales charge of up to 5.75% that you
pay when you buy the shares. The offering price for Class A shares
includes the front-end sales charge.

o If you invest $50,000 or more, your front-end sales charge will be
reduced.

o Absent 12b-1 fee waivers, Class A shares are also subject to an annual
12b-1 fee no greater than 0.30% of average daily net assets, which is
lower than the 12b-1 fee for Class B and Class C shares.

o Class A shares generally are not subject to a contingent deferred sales
charge.

o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.

o For approximately eight years after you buy your Class B shares, absent
12b-1 fee waivers, they are subject to annual 12b-1 fees no greater
than 1% of average daily net assets, of which 0.25% are service fees
paid to the distributor, dealers or others for providing services and
maintaining accounts.

o Because of the higher 12b-1 fees, Class B shares have higher expenses
and any dividends paid on these shares are lower than dividends on
Class A shares.

o Approximately eight years after you buy them, Class B shares
automatically convert into Class A shares with a 12b-1 fee of no more
than 0.30%, which is currently being waived. Conversion may occur as
late as three months after the eighth anniversary of purchase, during
which time Class B's higher 12b-1 fees apply.

o You may purchase up to $250,000 of Class B shares at any one time. The
limitation on maximum purchases varies for retirement plans.

<PAGE>

Class C
o Class C shares have no up-front sales charge, so the full amount of
your purchase is invested in the Fund. However, you will pay a
contingent deferred sales charge if you redeem your shares within 12
months after you buy them.

o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.

o Absent 12b-1 fee waivers, Class C shares are subject to an annual 12b-1
fee which may not be greater than 1% of average daily net assets, of
which 0.25% are service fees paid to the distributor, dealers or others
for providing personal services and maintaining shareholder accounts.

o Because of the higher 12b-1 fees, Class C shares have higher expenses
and pay lower dividends than Class A shares.

o Unlike Class B shares, Class C shares do not automatically convert into
another class.

o You may purchase any amount less than $1,000,000 of Class C shares at
any one time. The limitation on maximum purchases varies for retirement
plans.

<PAGE>

Class A Sales Charges
<TABLE>
<CAPTION>

- ------------------------------ ------------------- ---------------------- -------------------------------
Amount of purchase Sales charge Sales charge as % of Dealer's commission as %
as % amount invested Of offering price
of offering price
- ------------------------------ ------------------- ---------------------- -------------------------------
<S> <C> <C> <C>
Less than $50,000 5.75% 0.00% 5.00%

$50,000 but 4.75% 0.00% 4.00%
Under $100,000

$100,000 but 3.75% 0.00% 3.00%
Under $250,000

$250,000 but 2.50% 0.00% 2.00%
Under $500,000

$500,000 but 2.00% 0.00% 1.60%
Under $1 million

</TABLE>

--------------------------------------------------------------------------------------------------
Amount of purchase Sales charge as % Sales charge as % Dealer's commission as %
of offering price of amount invested of offering price
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1,000,000 up to $5 None None 1.00%
million
-------------------------------------------------------------------------------------------------
Next $20 million None None 0.50%
up to $25 million
-------------------------------------------------------------------------------------------------
Amount over $25 million None None 0.25%
-------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

About your account continued

- --------------------------------------------- ------------------------------------- ------------------------------------------
Program How it works Share class
A B C
- --------------------------------------------- ------------------------------------- ------------------------------------------
<S> <C> <C> <C>
Letter of Intent Through a Letter of Intent you X Although the Letter of
agree to invest a certain Intent and Rights of
amount in Delaware Investment Accumulation do not apply
Funds (except money market to the purchase of Class
funds with no sales charge) B and C shares, you can
over a 13-month period to combine your purchase of
qualify for reduced front-end Class A shares with your
sales charges. purchase of B and C
shares to fulfill your
Letter of Intent or
qualify for Rights of
Accumulation.

- --------------------------------------------- ------------------------------------- -------------- ---------------------------
Rights of accumulation You can combine your holdings X
or purchases of all funds in the
Delaware Investments family
(except money market funds with
no sales charge) as well as the
holdings and purchases of your
spouse and children under 21 to
qualify for reduced front-end
sales charges.
- --------------------------------------------- ------------------------------------- -------------- ---------------------------
Reinvestment of redeemed shares Up to 12 months after you X Not available.
redeem shares, you can reinvest
the proceeds without paying a
front-end sales charge.
- --------------------------------------------- ------------------------------------- -------------- ---------------------------
SIMPLE IRA, SEP IRA, SARSEP, Prototype These investment plans may X Not available.
Profit Sharing, Pension, 401(k), SIMPLE qualify for reduced sales
401(k), 403(b)(7), and 457 Retirement charges by combining the
Plans purchases of all members of the
group. Members of these groups
may also qualify to purchase
shares without a front-end sales
charge and a waiver of any
contingent deferred sales
charges.
- --------------------------------------------- ------------------------------------- -------------- ---------------------------

</TABLE>

<PAGE>

How to buy shares

Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.

<PAGE>

About your account (continued)

How to buy shares (continued)

The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receives your order before the close of trading on
the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a business day,
you will pay that day's closing share price which is based on the Fund's net
asset value. If we receive your order after the close of trading, you will pay
the next business day's price. A business day is any day that the New York Stock
Exchange is open for business. Currently the Exchange is closed when the
following holidays are observed: New Year's Day, Martin Luther King, Jr.'s
Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
We reserve the right to reject any purchase order.

<PAGE>

How to redeem shares

Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.

<PAGE>

About your account (continued)

How to redeem shares (continued)

If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.

<PAGE>

Special services
To help make investing with us as easy as possible, and to help you build your
investments, we offer the following special services.

Automatic Investing Plan
The Automatic Investing Plan allows you to make regular monthly investments
directly from your checking account.

<PAGE>

Dividends, distributions and taxes
Dividends and capital gains, if any, are paid annually. We automatically
reinvest all dividends and any capital gains.

We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.

<PAGE>

Certain management considerations

<PAGE>

Financial highlights

Financial highlights are not proviced for Class A, B and C shares because these
classes have not commenced commenced operations.