<PAGE>
For Growth of Capital
Small Cap Value Fund
(photo of illustration from
for Growth of Capital Brochure)
service and guidance
professional management
goals
1999
Semi-Annual
Report
DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London
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for growth
of capital
2 June 18, 1999
Dear Shareholder:
For the last six months, the stock market seems to have condemned the lessons of
Small is Beautiful, the 1973 book by E.F. Schumacher that extolled the benefits
of all things micro. While stock prices of large companies soared to new
heights, the prices of small cap stocks as represented by our benchmark, the
unmanaged Russell 2000 Index, provided more modest returns for much of the
period.
For the six months ended May 31, 1999, the Standard & Poor's 500 Index, an
unmanaged index composed primarily of large company stocks, returned 12.62%. In
comparison, the unmanaged Russell 2000 Index, which tracks the performance of
small company stocks, returned 11.02% for the same period. However, for much of
the period investors showed strong preference for larger companies as a hedge
against uncertain economic conditions. The gains provided by small-cap stocks
primarily occurred in the month of April.
Small Cap Value Fund provided a total return of +5.62% for the six months
ended May 31, 1999 (capital change with distributions reinvested based on net
asset value for A Class shares). Over the past year, your Fund's stringent
value-based investment discipline limited our ability to invest in some of the
better performing growth sectors in the market, including technology and health
care. Instead, we invested more significantly in basic industries, consumer
cyclicals and consumer services. Jacobs Engineering Group, Inc., M.A. Hanna Co.
and Zale Corp. represent some of our best performing holdings from these three
sectors. They are discussed further on pages 5 and 6.
We invested more significantly in basic industries, consumer cyclicals and
consumer services.
CUMULATIVE AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
Six Months Lifetime of the Fund
Ended From June 24, 1987
May 31, 1999 to May 31, 1999
- --------------------------------------------------------------------------------
Small Cap Value Fund A Class +5.62% +14.16%
- --------------------------------------------------------------------------------
Russell 2000 Index +11.02% +10.42%
- --------------------------------------------------------------------------------
Standard & Poor's 500 Index +12.62% +16.13
- --------------------------------------------------------------------------------
Lipper Small Cap Fund Average +9.41% (762 Funds) +12.17 (55 Funds)
- --------------------------------------------------------------------------------
All performance shown above assumes reinvestment of dividends and capital
gains. Fund and Lipper performance is at net asset value without the effect of
sales charges. Performance for all Small Cap Value Fund classes can be found on
page 8. The unmanaged Russell 2000 Index is a measure of small company stocks
while the unmanaged S&P 500 Index is a measure of large company stocks. You
cannot invest directly in an index.
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3
In the last two months of the six month period covered here, there was a
dramatic shift on Wall Street from growth to value investment styles and also a
rally in small cap stocks. From April 30 to May 31, the Russell 2000 delivered a
+1.46% return as compared with -2.36% for the S&P 500. Small cap stocks
represent nearly 85% of the listed companies on the three major exchanges
according to the March 21, 1999 New York Times. Given the number of small cap
stocks and the return potential they offer over longer periods, we believe they
will continue to be a necessary and effective tool in portfolio diversification.
Christopher S. Beck, your Fund's portfolio manager, explains the Fund's
strategy and provides an outlook for the second half of fiscal 1999 on the pages
that follow.
We applaud you for your patience during a difficult few years for small cap
stocks. We think our Fund's strong recent performance in April and May 1999,
displays what our strategy can do when conditions favor our market
capitalization and investment style. We thank you for your continued commitment
to Delaware Investments.
Sincerely,
/s/ Wayne A. Stork
- ----------------------
Wayne A. Stork
Chairman,
Delaware Investments Family of Funds
/s/ David K. Downes
- ----------------------
David K. Downes
President and Chief Executive Officer,
Delaware Investments Family of Funds
Small cap stocks represent nearly 85% of the listed companies on the three major
exchanges according to the New York Times. We believe they will continue to be
a necessary and effective tool in portfolio diversification.
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4
Portfolio Manager's Review
Overview
Throughout fiscal 1998 and much of fiscal 1999, uncertain global economic
conditions led investors to prefer large companies by an unprecedented margin.
We believe the underperformance of small cap companies can be explained in part
by:
o Rising international cash flow into the U.S. due to recessions in Russia,
Brazil and Japan. International investors tend to favor larger, more
recognizable companies.
o More predictable earnings delivered by large cap growth companies. This led
many investors to view the large cap sector as a safer place to invest money.
Many investors thought that small cap stocks, particularly small-cap value
stocks, which had not recovered in 1998 would do so in the first quarter of
1999. Even so, this market segment disappointed investors again for one primary
reason:
o In the fourth quarter of 1998, the flow of money into small cap mutual funds
declined. Some managers sold stock to meet redemptions. This put more downward
pressure on prices of small cap stocks.
Investment Strategy
When buying stocks, we prefer companies with a market capitalization of $400
million to $1.4 billion. From among some 2,500 small company stocks in the U.S.,
we seek businesses with strong positive cash flows that are undervalued or
undiscovered.
Our initial value screens narrow the field to about 1,100 companies. From
there we distill some 100 businesses that become candidates for intense
fundamental research, including company visits. We generally:
o Examine sales and earnings prospects relative to competitors;
o Seek companies whose stocks trade actively (which provides liquidity);
o Measure value with appropriate industry yardsticks; and
o Analyze free cash flow.
Free cash flow--the amount of money a company generates as revenue from
operations--tells us how much financial flexibility a business has to expand,
meet competitive threats and deal with unexpected events. A company will have
free cash flow if it takes in more cash from income and depreciation than it
pays out on capital spending and dividends. We think that if a company has
sustainable free cash flow, they have the ability to do one of four things:
o Make acquisitions;
o Pay down debt;
o Buy back stock;
o Increase the dividend.
We believe these actions are all positive for a company and make it an
excellent candidate for inclusion in the Delaware Investments Small Cap
Value Fund.
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5
Strategic Positioning
Our major investment stories took place in four sectors the past six months:
Basic Industries
This was one of our best performing sectors for the first half of fiscal 1999.
One standout investment among several in this sector was M.A. Hanna Co. M.A.
Hanna produces specialty chemicals for automobile paints, among other products.
We originally bought the stock at $12 a share in 1998. Its market price as of
May 31 was $15 7/8 a share.
M.A. Hanna Co. appointed a new president and chief executive officer on May
25--a seasoned executive with more than 30 years experience in the chemical and
plastics industries. We continue to look for good things from M.A. Hanna as they
turn their attention to focusing on markets and customers rather than on
products, to improve earnings and to help the company grow into a market leader.
Consumer Cyclicals
One of our major performers in this sector through the first half of fiscal 1999
was Jacobs Engineering Group, Inc. Jacobs provides engineering, design and
consulting services. The company also supplies construction and construction
management services, as well as process plant maintenance to a variety of
industrial, commercial and governmental clients around the globe. On March 10,
Jacobs Engineering Group announced that it had won contracts to design and build
more than $300 million in bridges and highways in India. Jacobs' Sverdrup Civil
Inc. unit will oversee the projects, which also includes the upgrade of 744
miles of state roads, widening many of them to two or four lanes.
Jacobs continues to maintain strong fundamentals such as a P/E ratio of 16.4
and a price-to-book value of 2.4 as of May 31, 1999, which is why it represented
1.88% of our portfolio. The company's
Small Cap Value Fund's Stock Selection Process
- --------------------------------------------------------------------------------
2,500 Stocks - Universe of Small Companies
- --------------------------------------------------------------------------------
--------------------------------------------------------------------
Quantitative Analysis of
1,000 Stocks - Stocks Exhibiting Value Characteristics
--------------------------------------------------------------------
--------------------------------------------------------------------
300-400 Stocks - Qualitative & Additional
Quantitative Analysis Comparisons by Industry
--------------------------------------------------------------------
--------------------------------------------------------------------
100 Stocks - Top Candidates for Company Visits
Value Compared to Russell 2000 Stocks
and Company History
--------------------------------------------------------------------
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6
chairman, Noel Watson, stated that Jacobs' goal is "to continue growing our
business at 15 to 20% a year." We expect good things from Jacobs Engineering
Group.
Consumer Services
Smart shoppers know better bargains are generally found around Christmas. In a
tough market for small cap stocks in December 1997, we originally discovered a
gem--Zale Corp. Zale's is a jewelry retailer that operates the Zale's, Gordon's
Jewelers and Bailey, Banks & Biddle chains in shopping malls. In December 1997,
the company's stock plummeted. We took advantage of this situation--making it a
buying opportunity, when industry competition appeared to be rising, threatening
Zale's profit margins. Since then, Zale Corp. has grown to become the largest
holding in the Fund (2.74% of our portfolio) and its share price is $38 9/16 as
of May 31.
As with all stocks in the Fund's portfolio, we can't guarantee that this
diamond will last forever. We are prepared to sell if the company's shares no
longer exhibit value characteristics. In our view, shareholders are best served
by a strict investment discipline that keeps us from falling in love with any of
the Fund's holdings. Zale Corp. has a market capitalization of $1.39 billion and
a P/E of 17.7 as of May 31, 1999. Those market characteristics make it a fitting
investment for this Fund.
Real Estate Investment Trusts
During the first half of fiscal 1999, we allocated 9.75% of Small Cap Value
Fund's assets to Real Estate Investment Trusts (REITs). We believed, despite
poor performance in fiscal 1998, that the REIT sector was still undervalued and
would benefit from stable rent and property prices, and healthy demand for
commercial and residential rental space.
While fundamentals in the real estate market have remained strong, returns
for Small Cap Value Fund's investments in this sector were disappointing through
<TABLE>
<CAPTION>
TOP TEN HOLDINGS - SMALL CAP VALUE FUND
- -------------------------------------------------------------------------------------------------------------
May 31, 1999
Company Price/Earnings Ratio Price/Book Value Percentage of Net Assets
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Zale Corp. 17.7x 2.0x 2.74%
BJs Wholesale Club 19.8x 4.0x 2.61%
Scotts Company 20.5x 3.2x 2.49%
Trigon Healthcare Inc. 19.3x 1.5x 2.38%
Universal Foods Corp. 14.8x 2.8x 2.36%
Borg-Warner Auto 11.1x 1.6x 2.27%
Jacobs Engineering Group 15.0x 2.4x 1.88%
Peoples Heritage Financial 11.6x 2.2x 1.87%
Horace Mann Educators 12.6x 2.3x 1.83%
Synopsis Inc. 17.7x 3.8x 1.83%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
Price to earnings ratios and price to book values are based on trailing earnings
and values for the six months ended May 31, 1999.
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7
February 1999. Since February, however, the market has rebounded significantly.
As of May 31, REITs recovered enough to provide a positive return for the first
half of fiscal 1999. We now believe that Wall Street is beginning to take note
of the attributes that originally attracted us to REITs in 1997.
Outlook
"When blue chips like Coca-Cola and Microsoft soared, stocks of small companies
sagged. But when the smoke clears and the next market cycle takes over, the
small caps may finally have their day."
--Forbes magazine, May 1999
In the coming months, we expect economic uncertainty to continue in some
foreign markets, including Russia, Japan and Latin America. For this reason, we
believe the Federal Reserve will not risk raising interest rates significantly
and halting the financial repair that is currently taking place all over the
globe. The U.S. economy remains robust and does not appear vulnerable to
recession as consumer spending continues to remain high.
As far as the small cap market goes, until very recently it's been a
situation where large cap stocks have dominated small cap stocks and growth
stocks have dominated value stocks. The small cap value part of the market, in
all honesty, has not been a profitable place to be. In the last month, however,
we have seen small cap value stocks start to make a comeback.
The Asian crisis may not be over, but we believe the American economy has
proven resilient to its impact. As investors become more confident in the U.S.
economy's ability to sustain the longest peacetime expansion on record, we
believe they will return to the small cap value market.
Many investors believe there is overvaluation in the stock market,
especially in the large cap sector. This can mean additional risk. The list of
large cap stocks that have consistently shared in the market's recent gains has
gotten narrower and narrower, resulting in a group of twenty stocks aptly named
the "nifty twenty." Investors had a high degree of confidence in the earnings of
these companies and focused on them to the exclusion of nearly all other
companies. But some of those names have stumbled--as the market broadened to
include value stocks and also stocks with smaller market capitalizations. Even
with recent declines in large cap growth stocks, we believe they remain richly
priced based on most valuation methods.
In contrast, smaller value companies are cheaper than their historical
average. We remain convinced that over the long term, smaller undervalued
companies offer investors substantial opportunities for capital appreciation.
Smaller value companies are cheaper than their historical average.
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8
Performance Summary
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND PERFORMANCE
- ----------------------------------------------------------------------------------------------------------
Average Annual Returns Through May 31, 1999
Lifetime Ten Years Five Years One Year
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A Class (Est. 6/24/87)
Excluding Sales Charge +14.16% +12.88% +12.80% -6.55%
Including Sales Charge +13.60% +12.21% +11.48% -11.93%
- ----------------------------------------------------------------------------------------------------------
B Class (Est. 9/6/94)
Excluding Sales Charge +12.71% -7.19%
Including Sales Charge +12.44% -11.83%
- ----------------------------------------------------------------------------------------------------------
C Class (Est. 11/29/95)
Excluding Sales Charge +13.65% -7.20%
Including Sales Charge +13.65% -8.12%
</TABLE>
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share value will fluctuate so that shares when
redeemed may be worth more or less than the original share price. Past
performance does not guarantee future results. Performance excluding sales
charges for B and C classes assumes contingent sales charges did not apply or
the investment was not redeemed.
A Class shares have a maximum front-end sales charge of 5.75% and 12b-1 fee.
B Class shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee, and a deferred sales charge of up to 5% if
redeemed before the end of the sixth year.
C Class shares have a 1% annual distribution and service fee. If shares are
redeemed within 12 months, a 1% contingent deferred sales charge applies.
The average annual total return for the lifetime, 10-year, five-year and
one-year periods ended 5/31/99 for Small Cap Value Fund's Institutional Class
were +14.35%, +13.10%, +13.14% and -6.30% respectively. The Institutional Class
(Est. 11/9/92) is available without sales charge only to certain eligible
institutional accounts. Performance prior to 11/9/92 is based on A Class
performance, adjusted to eliminate the sales charges, but not the asset-based
distribution charge.
<PAGE>
for growth of capital 9
Financial Statements
Delaware Group Equity Funds V, Inc. -
Small Cap Value Fund
Statement of Net Assets
May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Number Market
of Shares Value
---------- ----------
COMMON STOCK - 94.96%
Aerospace & Defense - 0.72%
Cordant Technologies ............................. 73,500 $ 3,564,750
----------
3,564,750
----------
Automobiles & Automotive Parts - 4.69%
Arvin Industries ................................. 184,600 7,245,550
Borg-Warner Automotive ........................... 201,798 11,187,179
CLARCOR .......................................... 257,100 4,724,213
----------
23,156,942
----------
Banking, Finance & Insurance - 14.84%
+*Avis Rent-A-Car .................................. 300,300 8,614,856
+*CMAC Investment .................................. 91,300 4,616,356
Enhance Financial Services Group ................. 324,700 6,351,944
Everest Reinsurance Holdings ..................... 158,970 5,226,139
*Farm Family Holdings ............................. 144,400 4,981,800
+*Financial Federal ................................ 241,850 5,411,394
+ Horace Mann Educators ............................ 349,900 9,053,663
Liberty Financial ................................ 140,600 3,673,175
North Fork Bancorporation ........................ 409,650 8,730,666
Peoples Heritage Financial Group ................. 493,300 9,233,959
+ Westamerica Bancorporation ....................... 212,300 7,337,619
----------
73,231,571
----------
Buildings & Materials - 2.92%
D.R. Horton ...................................... 418,600 7,116,200
*Griffon .......................................... 400,500 3,204,000
*Toll Brothers .................................... 187,100 4,081,119
----------
14,401,319
----------
Business Services - 1.32%
*Metamor Worldwide ................................ 84,500 2,310,547
*Modis Professional Services ...................... 286,000 4,218,500
----------
6,529,047
----------
Cable, Media & Publishing - 1.17%
*World Color Press ................................ 225,400 5,747,700
----------
5,747,700
----------
Capital Spending - 3.49%
Federal Signal ................................... 337,600 8,081,300
Harsco ........................................... 121,400 3,960,675
Smith (A.O.) ..................................... 211,600 5,157,750
----------
17,199,725
----------
Chemicals - 5.32%
Crompton & Knowles ............................... 215,700 3,896,081
M.A. Hanna ....................................... 296,400 4,371,900
OM Group ......................................... 152,900 5,714,638
+*Scotts ........................................... 279,300 12,289,200
----------
26,271,819
----------
Computers & Technology - 1.83%
*Synopsys ......................................... 203,900 9,035,319
----------
9,035,319
----------
<PAGE>
- --------------------------------------------------------------------------------
Number Market
of Shares Value
---------- ----------
COMMON STOCK (Continued)
Electronics & Electrical Equipment - 1.50%
*Etec Systems ..................................... 120,100 $ 3,223,934
*SCI Systems ...................................... 101,000 4,191,500
----------
7,415,434
----------
Energy - 6.88%
+*BJ Services ...................................... 122,300 3,370,894
NUI .............................................. 130,600 3,248,675
Nicor ............................................ 213,800 8,044,225
*Ocean Energy ..................................... 372,600 3,679,425
*Oceaneering International ........................ 347,400 5,362,988
*Santa Fe Snyder .................................. 398,200 3,384,700
Valero Energy .................................... 172,200 3,454,763
+*Weatherford International ........................ 103,700 3,422,100
----------
33,967,770
----------
Engineering & Construction - 1.88%
*Jacobs Engineering Group ......................... 249,800 9,289,438
----------
9,289,438
----------
Food, Beverage & Tobacco - 3.69%
Corn Products .................................... 222,200 6,554,900
Universal Foods .................................. 507,400 11,638,488
----------
18,193,388
----------
Healthcare & Pharmaceuticals - 3.90%
Arrow International .............................. 118,700 3,030,559
*Trigon Healthcare ................................ 307,900 11,738,688
+ Varian Associates ................................ 237,700 4,471,731
----------
19,240,978
----------
Industrial Machinery - 5.51%
Columbus McKinnon ................................ 186,800 4,664,163
Hussmann International ........................... 233,200 3,731,200
+ IDEX ............................................. 184,900 5,234,981
Milacron ......................................... 282,000 6,010,125
Regal-Beloit ..................................... 208,000 4,836,000
Watts Industries Class A ......................... 159,600 2,703,225
----------
27,179,694
----------
Leisure, Lodging & Entertainment - 1.30%
Viad ............................................. 215,700 6,417,075
----------
6,417,075
----------
Metals & Mining - 2.16%
*Bethlehem Steel .................................. 385,300 3,202,806
LTV .............................................. 457,500 2,802,188
*Mueller Industries ............................... 161,100 4,671,900
----------
10,676,894
----------
Paper & Forest Products - 2.48%
+ Caraustar Industries ............................. 161,200 4,236,538
+ Chesapeake ....................................... 82,400 2,971,550
+ Rayonier ......................................... 107,200 4,998,200
----------
12,206,288
----------
<PAGE>
10 for growth of capital
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
Number Market
of Shares Value
---------- ----------
COMMON STOCK (Continued)
REITS - 9.75%
Cabot Industrial Trust ........................... 299,500 $ 6,439,250
+ Chateau Communities .............................. 116,307 3,511,018
Duke Realty Investments .......................... 231,700 5,358,063
Kilroy Realty .................................... 175,700 4,348,575
+ Meristar Hospitality ............................. 227,061 4,966,965
New Plan Excel Realty Trust ...................... 221,280 4,425,600
+ Pan Pacific Retail Properties .................... 277,100 5,507,363
Prentiss Properties Trust ........................ 257,700 6,088,163
+ Reckson Associates Realty ........................ 288,300 7,459,763
----------
48,104,760
----------
Retail - 7.82%
BJ's Wholesale Club .............................. 495,600 12,885,600
Casey's General Stores ........................... 383,200 5,137,275
+ Pier 1 Imports ................................... 636,000 7,035,750
*Zale ............................................. 351,200 13,543,140
----------
38,601,765
----------
Textiles, Apparel & Furniture - 5.97%
*Furniture Brands International ................... 280,500 6,802,125
HON Industries ................................... 322,600 7,863,375
Kellwood ......................................... 264,600 6,284,250
Spring Industries - Class A ...................... 92,600 3,669,275
Wolverine World Wide ............................. 359,700 4,855,950
----------
29,474,975
----------
Transportation & Shipping - 4.28%
Alexander & Baldwin .............................. 168,900 3,821,363
*M.S. Carriers .................................... 201,000 6,394,313
*Mesaba Holdings .................................. 299,650 4,447,930
USFreightways .................................... 163,300 6,445,247
----------
21,108,853
----------
Utilities - 1.54%
California Water Service Group ................... 117,000 3,042,000
Sierra Pacific Resources ......................... 124,900 4,543,238
----------
7,585,238
----------
Total Common Stock (cost $416,043,119) .......... 468,600,742
-----------
Principal
Amount
---------
REPURCHASE AGREEMENTS - 4.55%
With Chase Manhattan 4.78% 6/01/99
(dated 5/28/99, collateralized by $2,766,000
U.S. Treasury Notes 5.50% due 2/28/03,
market value $2,785,538 and $1,811,000
U.S. Treasury Notes 6.25% due 2/28/02,
market value $1,867,916 and $2,943,000
U.S. Treasury Notes 7.50% due 5/15/02,
market value $3,099,834) ........................ $7,594,000 7,594,000
With PaineWebber 4.78% 6/01/99
(dated 5/28/99, collateralized by $1,519,000
U.S. Treasury Notes 5.375% due 6/30/03,
market value $1,536,443 and $2,943,000
U.S. Treasury Notes 6.25% due 1/31/02, market
value $3,051,699 and $2,943,000
U.S. Treasury Notes 6.375% due 5/15/00,
market value $2,981,402) ........................ 7,417,000 7,417,000
<PAGE>
- --------------------------------------------------------------------------------
Principal Market
Amount Value
----------------------------
REPURCHASE AGREEMENTS (Continued)
With Prudential Securities 4.75% 6/01/99
(dated 5/28/99, collateralized by $6,122,000
U.S. Treasury Notes 15.75% due 11/15/01,
market value $7,571,560) ........................ $7,416,000 $ 7,416,000
------------
Total Repurchase Agreements
(cost $22,427,000) .............................. 22,427,000
------------
Total Market Value of Securities Owned - 99.51%
(cost $438,470,119) ............................. $491,027,742
Receivables and Other Assets
Net of Liabilities - 0.49% ...................... 2,428,829
------------
Net assets applicable to 18,478,418 shares
($0.01 par value) outstanding - 100.00% ......... $493,456,571
============
Net Asset Value - Small Cap Value Fund A Class
($255,993,303 / 9,572,139 Shares) ............... $26.74
======
Net Asset Value - Small Cap Value Fund B Class
($86,518,546 / 3,269,612 Shares) ................ $26.46
======
Net Asset Value - Small Cap Value Fund C Class
($29,946,153 / 1,132,500 Share) ................. $26.44
======
Net Asset Value - Small Cap Value Fund Institutional
Class ($120,998,569 / 4,504,167 Shares) ......... $26.86
======
- ------------
+Security is partially or fully on loan.
*Non-income producing security for the six months
ended 5/31/99.
REITS - Real Estate Investment Trusts
Top 10 stock holdings, representing 22% of net
assets, are in bold face.
Components of Net Assets at May 31, 1999:
Common Stock, $0.01 par value, 500,000,000 shares
authorized to the Fund with 150,000,000 share allocated
to Small Cap Value Fund A Class, 100,000,000 shares allocated to
Small Cap Value Fund B Class, 50,000,000 shares allocated to
Small Cap Value Fund C Class, and 50,000,000 shares allocated to
Small Cap Value Fund Institutional Class .......... $429,440,739
Undistributed net investment income ................ 685,992
Accumulated net realized gain on investments ....... 10,773,757
Net unrealized appreciation of investments and
foreign currencies .............................. 52,556,083
------------
Total Net Assets ................................... $493,456,571
============
Net Asset Value and Offering Price Per Share -
Small Cap Value Fund A Class
Net asset value A Class (A) ........................ $26.74
Sales Charge (5.75% of offering price or 6.10% of
the amount invested per share) (B) .............. 1.63
------
Offering Price ..................................... $28.37
======
- ------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $50,000 or
more.
See accompanying notes
<PAGE>
for growth of capital 11
Delaware Group Equity Funds V, Inc. -
Small Cap Value Fund
Statement of Operations
Six Months Ended May 31, 1999
(unaudited)
- -------------------------------------------------------------------------------
Investment Income:
Interest ........................................... $ 519,228
Dividends .......................................... 4,349,367 $ 4,868,595
----------
Expenses:
Management fees .................................... 1,820,345
Distribution expense ............................... 945,699
Dividend disbursing, transfer agent fees
and other expenses .............................. 669,928
Accounting and administration ...................... 97,142
Registration fees .................................. 44,500
Professional fees .................................. 44,500
Reports and statements to shareholders ............. 35,000
Taxes (other than taxes on income) ................. 16,000
Custodian fees ..................................... 6,100
Directors' fees .................................... 5,530
Other .............................................. 53,882 3,738,626
--------- -----------
Less expenses paid indirectly ...................... (5,564)
-----------
Total expenses ..................................... 3,733,062
-----------
Net Investment Income .............................. 1,135,533
-----------
Net Realized and Unrealized Gain
on investments:
Net realized gain on investments ................... 12,618,939
Net change in unrealized appreciation/depreciation
of investments .................................. 10,994,616
-----------
Net Realized and Unrealized Gain
on investments .................................. 23,613,555
-----------
Net Increase in Net Assets Resulting
from Operations ................................. $24,749,088
===========
See accompanying notes
<PAGE>
Delaware Group Equity Funds V, Inc.-
Small Cap Value Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
---------------------------
Increase (Decrease) in Net Assets from Operations:
Net investment income .............................. $ 1,135,533 $ 2,791,464
Net realized gain (loss) on investments ............ 12,618,939 (1,782,359)
Net change in unrealized appreciation/depreciation
of investments .................................. 10,994,616 (46,031,653)
------------ ------------
Net increase (decrease) in net assets resulting
from operations ................................. 24,749,088 (45,022,548)
------------ ------------
Distributions to Shareholders from:
Net investment income:
A Class ......................................... (1,721,074) (1,285,317)
B Class ......................................... - -
C Class ......................................... - -
Institutional Class ............................. (1,089,465) (110,446)
Net realized gain on investments:
A Class ......................................... - (19,279,760)
B Class ......................................... - (3,029,492)
C Class ......................................... - (944,203)
Institutional Class ............................. - (1,054,260)
------------ ------------
(2,810,539) (25,703,478)
------------ ------------
Capital Share Transactions:
Proceeds from shares sold:
A Class ......................................... 39,251,571 205,546,496
B Class ......................................... 16,352,875 64,897,563
C Class ......................................... 5,623,783 26,227,243
Institutional Class ............................. 22,217,548 127,407,635
Net asset value of shares issued upon reinvestment
of distributions from net investment income
and net realized gain on investments:
A Class ......................................... 1,620,158 19,744,279
B Class ......................................... - 2,863,324
C Class ......................................... - 899,118
Institutional Class ............................. 1,085,627 1,160,155
------------ ------------
86,151,562 448,745,813
------------ ------------
Cost of shares repurchased:
A Class ......................................... (67,175,700) (179,392,003)
B Class ......................................... (17,724,306) (12,271,145)
C Class ......................................... (8,021,212) (4,573,233)
Institutional Class ............................. (21,774,702) (17,144,933)
------------ ------------
(114,695,920) (213,381,314)
------------ ------------
Increase (decrease) in net assets derived from
capital share transactions ...................... (28,544,358) 235,364,499
------------ ------------
Net Increase (decrease) in Net Assets .............. (6,605,809) 164,638,473
Net Assets:
Beginning of period ................................ 500,062,380 335,423,907
------------ ------------
End of period ...................................... $493,456,571 $500,062,380
============ ============
See accompanying notes
<PAGE>
12 for growth of capital
Delaware Group Equity Funds V, Inc.-
Small Cap Value Fund
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Small Cap Value Fund A Class
---------------------------------------------------------------------
Six Months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
5/31/99(3) 11/30/98 11/30/97 11/30/96 11/30/95 11/30/94
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $ 25.480 $ 29.790 $ 25.780 $ 22.760 $ 19.320 $ 20.070
Income (loss) from investment operations:
Net investment income(1) ........................... 0.081 0.215 0.131 0.122 0.253 0.142
Net realized and unrealized gain
(loss) on investments ............................ 1.342 (0.285) 7.914 4.028 3.597 (0.687)
-------- -------- -------- -------- -------- --------
Total from investment operations ................... 1.423 (2.070) 8.045 4.150 3.850 (0.545)
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ............... (0.163) (0.140) (0.135) (0.240) (0.160) (0.035)
Distributions from net realized
gain on investments .............................. - (2.100) (3.900) (0.890) (0.250) (0.170)
-------- -------- -------- -------- -------- --------
Total dividends and distributions .................. (0.163) (2.240) (4.035) (1.130) (0.410) (0.205)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ........................ $ 26.740 $ 25.480 $ 29.790 $ 25.780 $ 22.760 $ 19.320
======== ======== ======== ======== ======== ========
Total return(2) ....................................... 5.62% (7.47%) 36.38% 19.08% 20.39% (2.78%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $255,993 $271,192 $268,266 $192,297 $177,011 $179,498
Ratio of expenses to average net assets ............ 1.46% 1.39% 1.39% 1.45% 1.48% 1.46%
Ratio of net investment income to
average net assets ............................... 0.56% 0.81% 0.51% 0.51% 1.18% 0.75%
Portfolio turnover ................................. 42% 38% 53% 87% 65% 14%
</TABLE>
- ------------
(1) Per share information for the years ended November 30, 1996, and 1997, was
based on the average shares outstanding method.
(2) 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.
(3) Ratios have been annualized and total return has not been annualized.
See accompanying notes
<PAGE>
for growth of capital 13
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Small Cap Value Fund B Class
------------------------------------------------------------------------
Six Months Year Year Year Year Period
Ended Ended Ended Ended Ended 9/6/94(1) to
5/31/99(4) 11/30/98 11/30/97 11/30/96 11/30/95 11/30/94
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $25.140 $29.460 $25.570 $22.590 $19.300 $20.280
Income (loss) from investment operations:
Net investment income (loss)(2) ....................... (0.018) 0.052 (0.042) (0.041) 0.141 0.011
Net realized and unrealized gain
(loss) on investments ............................... 1.338 (2.272) 7.832 4.006 3.549 (0.991)
------- ------- ------- ------- ------- -------
Total from investment operations ...................... 1.320 (2.220) 7.790 3.965 3.690 (0.980)
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .................. -- -- -- (0.095) (0.150) --
Distributions from net realized
gain on investments ................................. -- (2.100) (3.900) (0.890) (0.250) --
------- ------- ------- ------- ------- -------
Total dividends and distributions ..................... -- (2.100) (3.900) (0.985) (0.400) --
------- ------- ------- ------- ------- -------
Net asset value, end of period ........................... $26.460 $25.140 $29.460 $25.570 $22.590 $19.300
======= ======= ======= ======= ======= =======
Total return(3) .......................................... 5.25% (8.08%) 35.36% 18.26% 19.55% (4.83%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $86,519 $83,899 $39,733 $12,730 $5,788 $1,455
Ratio of expenses to average net assets ............... 2.16% 2.09% 2.09% 2.15% 2.18% 2.16%
Ratio of net investment income (loss) to
average net assets .................................. (0.14%) 0.11% (0.19%) (0.19%) 0.48% 0.05%
Portfolio turnover .................................... 42% 38% 53% 87% 65% 14%
</TABLE>
- ----------
(1) Date of initial public offering; ratios have been annualized and total
return has not been annualized
(2) Per share information for the years ended November 30, 1996, and 1997, was
based on the average shares outstanding method.
(3) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(4) Ratios have been annualized and total return has not been annualized.
See accompanying notes
<PAGE>
14 for growth of capital
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Small Cap Value Fund C Class
----------------------------------------------------------------------
Six Months Year Year Year Period
Ended Ended Ended Ended 11/29/95(1) to
5/31/99(5) 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $25.120 $29.440 $25.550 $22.760 $22.510
Income (loss) from investment operations:
Net investment income (loss)(2) ...................... (0.018) 0.036 (0.033) (0.043) --
Net realized and unrealized gain
(loss) on investments .............................. 1.338 (2.256) 7.823 4.003 0.250
------- ------- ------- ------- -------
Total from investment operations ..................... 1.320 (2.220) 7.790 3.960 0.250
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................. -- -- -- (0.280) --
Distributions from net realized
gain on investments ................................ -- (2.100) (3.900) (0.890) --
------- ------- ------- ------- -------
Total dividends and distributions .................... -- (2.100) (3.900) (1.170) --
------- ------- ------- ------- -------
Net asset value, end of period .......................... $26.440 $25.120 $29.440 $25.550 $22.760
======= ======= ======= ======= =======
Total return(3) ......................................... 5.26% (8.08%) 35.40% 18.23% (4)
Ratios and supplemental data:
Net assets, end of period (000 omitted) .............. $29,946 $31,041 $12,547 $3,360 $5
Ratio of expenses to average net assets .............. 2.16% 2.09% 2.09% 2.15% (4)
Ratio of net investment income (loss) to
average net assets ................................. (0.14%) 0.11% (0.19%) (0.19%) (4)
Portfolio turnover ................................... 42% 38% 53% 87% (4)
</TABLE>
- ----------
(1) Date of initial public offering.
(2) Per share information for the years ended November 30,1996, and 1997, was
based on the average shares outstanding method.
(3) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(4) The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management
believes that such ratios and returns for this relatively short period are
not meaningful.
(5) Ratios have been annualized and total return has not been annualized.
See accompanying notes
<PAGE>
for growth of capital 15
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Small Cap Value Fund Institutional Class
------------------------------------------------------------------------
Six Months Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
5/31/99(2) 11/30/98 11/30/97 11/30/96 11/30/95 11/30/94
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $25.640 $29.950 $25.910 $22.860 $19.400 $20.140
Income (loss) from investment operations:
Net investment income(1) .............................. 0.110 0.160 0.209 0.193 0.297 0.195
Net realized and unrealized gain
(loss) on investments .............................. 1.353 (2.150) 7.936 4.047 3.628 (0.685)
-------- -------- ------- ------- ------- -------
Total from investment operations ...................... 1.463 (1.990) 8.145 4.240 3.925 (0.490)
-------- -------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .................. (0.243) (0.220) (0.205) (0.300) (0.215) (0.080)
Distributions from net realized
gain on investments ................................ - (2.100) (3.900) (0.890) (0.250) (0.170)
-------- -------- ------- ------- ------- -------
Total dividends and distributions ..................... (0.243) (2.320) (4.105) (1.190) (0.465) (0.250)
-------- -------- ------- ------- ------- -------
Net asset value, end of period ........................... $26.860 $25.640 $29.950 $25.910 $22.860 $19.400
======== ======== ======= ======= ======= =======
Total return ............................................. 5.77% (7.16%) 36.73% 19.45% 20.76% (2.51%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $120,999 $113,930 $14,878 $16,373 $7,294 $6,385
Ratio of expenses to average net assets ............... 1.16% 1.09% 1.09% 1.15% 1.18% 1.16%
Ratio of net investment income to
average net assets ................................. 0.86% 1.11% 0.81% 0.81% 1.48% 1.05%
Portfolio turnover .................................... 42% 38% 53% 87% 65% 14%
</TABLE>
- ----------
(1) Per share information for the years ended November 30, 1996, and 1997, was
based on the average shares outstanding method.
(2) Ratios have been annualized and total return has not been annualized.
See accompanying notes
<PAGE>
16 for growth of capital
Delaware Group Equity Funds V, Inc.-
Small Cap Value Fund
Notes to Financial Statements
May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Delaware Group Equity Funds V, Inc. (the "Company") is registered as a
diversified open-end investment company under the Investment Company Act of
1940, as amended. The company is organized as a Delaware Business Trust and
offers four funds, the Small Cap Value Fund, the Mid Cap Value Fund, the Small
Cap Contrarian Fund and the Retirement Income Fund. These financial statements
and related notes pertain to the Small Cap Value Fund (the "Fund"). The Small
Cap Value Fund A Class carries a 5.75% front-end sales charge. The Small Cap
Value Fund B Class carries a back-end deferred sales charge. The Small Cap Value
Fund C Class carries a level load deferred sales charge and the Small Cap Value
Fund Institutional Class has no sales charge. The Fund's objective is to seek
capital appreciation by investing primarily in common stocks whose market values
appear low relative to their underlying value or future potential.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund.
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of the close of the NYSE on the valuation date. Securities
not traded or securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices.
Federal Income Taxes - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Fund on the basis of daily net assets of each class. Distribution expenses
relating to a specific class are charged directly to that class.
Repurchase Agreements - The Fund may invest in a pooled cash account along with
other members of the Delaware Investments Family of Funds. The aggregate daily
balance of the pooled cash account is invested in repurchase agreements secured
by obligations of the U.S. government. The respective collateral is held by the
Fund's custodian bank until the maturity of the respective repurchase
agreements. Each repurchase agreement is at least 100% collateralized. However,
in the event of default or bankruptcy by the counterparty to the agreement,
realization of the collateral may be subject to legal proceedings.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Other - Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. The Fund declares and pays dividends from net
investment income and capital gains, if any, annually.
<PAGE>
Certain expenses of the Fund are paid through "soft dollar" arrangements with
brokers. These transactions are done subject to best price and execution. The
amount of these expenses was approximately $5,564 for the period ended May 31,
1999. In addition, the Fund receives earnings credits from its custodian when
positive cash balances are maintained, which are used to offset custody fees.
There were none for the period ended May 31, 1999. The expenses paid under the
above arragements are included in thier respective expense captions on the
statement of operations with the corresponding expense offset shown as "expenses
paid indirectly".
2. Investment Management and Other Transactions with Affiliates
Commencing April 15, 1999, and in accordance with the terms of the Investment
Management Agreement, the Fund pays Delaware Management Company, (DMC), the
Investment Manager of the Fund, an annual fee, which is calculated daily at the
rate of 0.75% on the first $500 million of average daily net assets of the Fund,
0.70% on the next $500 million, 0.65% on the next $1,500 million and 0.60% on
the net assets over $2,500 million, less fees paid to the unaffiliated
directors. Prior to April 15, 1999, the Fund paid DMC an annual fee, which was
calculated daily at the rate of 0.75% of the average daily net assets of the
Fund. At May 31, 1999, the Fund had a liability for Investment Management fees
and other expenses payable to DMC of $183,736.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to provide dividend disbursing, transfer agent and accounting and administrative
services. The Fund pays DSC a monthly fee based on the number of shareholder
accounts, shareholder transactions and average net assets, subject to certain
minimums. At May 31, 1999, the Fund had a liability for such fees and other
expenses payable to DSC of $123,897.
Pursuant to the Distribution Agreement, the Fund pays Delaware Distributors,
L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.30% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Classes. No distribution expenses are
paid by the Institutional Class.
For the six months ended May 31, 1999, DDLP earned $60,717 for commissions on
sales of the Fund A Class shares.
Certain officers of DMC, DSC and DDLP are officers, directors and/or employees
of the Fund. These officers, directors and employees are paid no compensation by
the Fund.
3. Investments
During the six months ended May 31, 1999, the Fund made purchases of $97,300,804
and sales of $121,389,926 of investment securities other than U.S. government
securities and temporary cash investments.
The cost of investments for federal income tax purposes approximates cost for
book purposes. At May 31, 1999, the aggregate cost of securities was
$438,470,119.
At May 31,1999, net unrealized appreciation was $52,557,623, of which
$69,931,698 related to unrealized appreciation of securities and $17,374,075
related to unrealized depreciation of securities.
For federal income tax purposes, as of November 30, 1998, the Fund had a capital
loss carryover of $1,453,770 that will expire in 2006.
<PAGE>
for growth of capital 17
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
4. Capital Stock
Transactions in capital stock shares were as follows:
Six Months
Ended 5/31/99 Year Ended
(Unaudited) 11/30/98
------------- ----------
Shares sold:
A Class ..................................... 1,546,522 7,335,761
B Class ..................................... 648,725 2,368,089
C Class ..................................... 223,365 954,136
Institutional Class ......................... 871,446 4,539,218
Shares issued upon reinvestment of distributions
from net investment income and net realized gain
on investments:
A Class ..................................... 64,266 720,644
B Class ..................................... - 105,269
C Class - 33,080
Institutional Class ......................... 42,927 42,218
---------- ----------
3,397,251 16,098,415
---------- ----------
Shares repurchased:
A Class ..................................... (2,681,636) (6,419,595)
B Class ..................................... (716,887) (484,073)
C Class ..................................... (326,648) (177,569)
Institutional Class ......................... (854,417) (633,955)
---------- ----------
(4,579,588) (7,715,192)
---------- ----------
Net increase (decrease) ........................ (1,182,337) 8,383,223
========== ==========
<PAGE>
5. Lines of Credit
The Fund has a committed line of credit for $10,000,000. No amount was
outstanding at May 31 ,1999, or at any time during the fiscal period.
6. Credit and Market Risk
The Fund may invest up to 10% of its total net assets in illiquid securities
which may include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The relative
illiquidity of some of these securities may adversely affect the Fund's ability
to dispose of such securities in a timely manner and at a fair price when it is
necessary to liquidate such securities.
7. Securities Lending
The Fund may participate, along with other funds in the Delaware Investments
Family of Funds, in a Securities Lending Agreement ("Lending Agreement").
Security loans made pursuant to the Lending Agreement are required at all times
to be secured by U.S. Treasury obligations and/or cash collateral at least equal
to 102% of the market value of securities issued in the U.S. Cash collateral
received is invested in fixed income securities, with a weighted average
maturity not to exceed 90 days, rated in one of the top two tiers by Standard &
Poor's Ratings Group or Moody's Investors Service, Inc. or repurchase agreements
collateralized by such securities. However, in the event of default or
bankruptcy by the lending agent, realization and/or retention of the collateral
may be subject to legal proceedings. In the event that the borrower fails to
return loaned securities, and the collateral received is insufficient to cover
the value of loaned securities and provided such collateral is not the result of
investment loss, the lending agent has agreed to pay the amount of the shortfall
to the Fund or, at the discretion of the lending agent, replace the loaned
securities. The market value of securities on loan to brokers and the related
cash collateral received at May 31,1999 were $20,836,122 and $21,252,845,
respectively. Net income from securities lending activities for the six months
ended May 31, 1999 was $52,697 and is included in interest income on the
statement of operations.
<PAGE>
18 for growth of capital
Proxy Results
(Unaudited)
- --------------------------------------------------------------------------------
For the period ended May 31, 1999, Delaware Group Equity Funds V, Inc.'s - Small
Cap Value Fund shareholders voted on the following proposals at the annual
meeting of shareholders on March 17, 1999. The description of each proposal and
number of shares voted are as follows.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
1.To elect the Fund's Board of Directors:
Jeffrey J. Nick ............................. 13,836,580 - 784,829
Walter P. Babich ............................ 13,848,522 - 772,887
John H. Durham .............................. 13,856,254 - 765,155
Anthony D. Knerr ............................ 13,856,604 - 764,805
Ann R. Leven ................................ 13,865,118 - 756,291
Thomas F. Madison ........................... 13,860,745 - 760,664
Charles E. Peck ............................. 13,862,973 - 758,436
Wayne A. Stork .............................. 13,865,217 - 756,192
Jan L. Yeomans .............................. 13,870,374 - 751,035
2. To approve the reclassification of the Fund's investment objective from
fundamental to non-fundamental.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
10,354,574 385,436 530,718
3. To approve standardized fundamental investment restrictions for the Fund
(proposal involves separate votes on seven sub-proposals 3A-3G).
3A. To adopt a new fundamental investment restriction concerning concentration
of the Fund's investments in the same industry.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
10,528,277 229,376 513,075
3B. To adopt a new fundamental investment restriction concerning borrowing money
and issuing senior securities.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
10,450,208 302,880 517,640
3C. To adopt a new fundamental investment restriction concerning underwriting.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
10,504,527 228,885 537,317
<PAGE>
3D. To adopt a new fundamental investment restriction concerning investments in
real estate.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
10,498,024 253,370 519,335
3E. To adopt a new fundamental investment restriction concerning investments in
commodities.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
10,455,278 292,044 523,406
3F. To adopt a new fundamental investment restriction concerning lending by the
Fund.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
10,489,049 251,369 530,309
3G.To reclassify all current fundamental investment restrictions as
non-fundamental.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
10,359,382 350,707 560,639
4. To approve a new investment management agreement with Delaware Management
Company for the Fund.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
10,414,109 342,381 514,237
5. To ratify the selection of Ernst & Young LLP, as the independent auditors for
the Delaware Group Equity Funds V, Inc.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
14,073,275 117,437 430,696
6. To approve the restructuring of the Delaware Group Equity Funds V, Inc. from
a Maryland Corporation into a Delaware Business Trust.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
10,541,790 486,189 521,489
<PAGE>
Delaware investments family of funds
For Growth of Capital
Aggressive Growth Fund
Trend Fund
DelCap Fund
Small Cap Value Fund
U.S. Growth Fund
Growth Stock Fund
Tax-Efficient Equity Fund
Social Awareness Fund
For Total Return
Blue Chip Fund
Devon Fund
Growth and Income Fund
Decatur Equity Income Fund
REIT Fund
Delaware Balanced Fund
For International Diversification
Emerging Markets Fund
New Pacific Fund
Overseas Equity Fund
International Equity Fund
Global Equity Fund
Global Bond Fund
<PAGE>
For Current Income
Delchester Fund
High-Yield Opportunities Fund
Extended Duration Bond Fund
Strategic Income Fund
Corporate Bond Fund
U.S. Government Fund
U.S. Government Securities Fund
Limited-Term Government Fund
For Tax-Exempt Income
National High Yield Municipal Bond Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
State Tax-Free Funds*
Money Market Funds
Delaware Cash Reserve
Tax-Free Money Fund
Asset Allocation Funds
Growth Portfolio
Balanced Portfolio
Income Portfolio
* Available for the following states: Arizona, California, Colorado, Florida,
Idaho, Iowa, Kansas, Minnesota, Missouri, North Dakota, New Jersey, New
Mexico, New York, Ohio, Oregon, Pennsylvania, Utah, Washington, Wisconsin.
Insured and intermediate bond funds are available in selected states.
funds
(photo of computer keyboard)
Complete information on any fund offered by Delaware Investments can be found in
each fund's current prospectus. Prospectuses for all funds offered by Delaware
Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.
<PAGE>
This semi-annual report is for the information of Small Cap Value Fund
shareholders, but it may be used with prospective investors when preceded or
accompanied by a current Prospectus for Small Cap Value Fund and the Delaware
Investments Performance Update for the most recently completed calendar quarter.
The prospectus sets forth details about charges, expenses, investment
objectives, and operating policies of the Fund. You should read the prospectus
carefully before you invest or send money. The figures in this report represent
past results which are not a guarantee of future results. The return and
principal value of an investment in the Fund will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
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Investment Manager
Delaware Management Company
Philadelphia, Pennsylvania
International Affiliate
Delaware International Advisers Ltd.
London, England
National Distributor
Delaware Distributors, L.P.
Philadelphia, Pennsylvania
Shareholder Servicing,
Dividend Disbursing
and Transfer Agent
Delaware Service Company, Inc.
Philadelphia, Pennsylvania
1818 Market Street
Philadelphia, PA 19103-3682
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Fund are
not FDIC or NCUSIF insured, are not guaranteed by any bank or any credit union,
and involve investment risk, including the possible loss of the principal amount
invested. Shares of the Fund are not bank or credit union deposits.
(c) Delaware Distributors, L.P.
DELAWARE(SM)
INVESTMENTS
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Philadelphia o London
Printed in the USA
on recycled paper
(J4883)
SA-021 [5/99] PP7/99
(1855)
