<PAGE>
DELAWARE(SM)
INVESTMENTS
-----------
2000 Semi-Annual Shareholder Report
-----------------------------------
- Delaware Mid-Cap Value Fund
- Delaware Retirement Income Fund
- Delaware Small Cap Contrarian Fund
July 12, 2000
Dear Shareholder:
Recap of Events - Over the past six months, record volatility dominated the U.S.
financial markets. As we started our fiscal period on December 1, 1999, market
performance was momentum-driven, with technology stocks providing the bulk of
performance. Technology stock euphoria pushed the Nasdaq Composite Index to a
string of record high closes. The Index rose above 5000 for the first time in
early March, 2000. Meanwhile, stocks in most other market sectors floundered as
a result of the technology craze.
On March 10, 2000, just after crossing a new milestone, the Nasdaq peaked. With
technology stocks hitting lofty price levels, it seemed investors finally began
to question the extreme valuations and earnings outlook for the sector. They
also began to see the attractiveness of many non-technology companies that have
improving fundamentals and low valuations. This apparent shift in investor
psychology led to a broadening of the market that put value investing - the
investment style followed by your Fund - back in the spotlight.
The market remained volatile for the rest of our fiscal period. As of May 31,
2000, the halfway point in our fiscal year, the Nasdaq was down 32% from its
March 10th record. Investor uncertainty about the direction of interest rates
contributed to the already volatile investing climate. The Federal Reserve Board
has raised interest rates six times since June, 1999 in an effort to slow U.S.
economic growth and cool down the financial markets. The 0.50% rate hike on May
16th (the latest as of this writing) boosted the federal funds rate to 6.5%, its
highest level since January, 1991.
Delaware Mid-Cap Value Fund delivered a 4.12% return (Institutional Class shares
with distributions reinvested). The Fund underperformed its benchmark, the
Russell Mid-Cap Value Index, and its peer group, the Lipper Mid-Cap Value Fund
Average, for the fiscal period (Source: Lipper Analytical Services, Inc).
(3434)
SA-476 [5/00] 7/00 J6155
<PAGE>
The Fund has a lower percentage of holdings in the technology sector than its
benchmark and other funds in its Lipper peer group. Our underweighted position
held back the Fund's performance early in our fiscal period as technology stocks
delivered strong performance from January through mid-March. However, beginning
in mid-March, the technology sector struggled as investors seemed to question
how much high-growth technology stocks were really worth, especially those
companies without earnings or any prospects for earnings in the near future.
From March through May, the Fund's performance was helped by our lower weighting
in the technology sector.
The Fund's performance was also impacted by our smaller percentage of holdings
in the utility sector compared to our benchmark. As investors migrated from
technology stocks in March and April in search of more safety, utility stocks
provided strong returns. Our underweighting in this sector hampered the Fund's
returns.
Delaware Retirement Income Fund returned 6.54% (Class A shares at net asset
value with distributions reinvested) for the period, significantly outpacing the
2.64% average return of its peers in the Lipper Income Funds Average (Source:
Lipper Analytical Services, Inc). Higher quality fixed income generally
performed best during the period, and the Fund held higher quality debt than the
average fund in its relative Lipper class. Also contributing to the
outperformance was the portfolio's relatively large allocation to cash and cash
equivalents, and a heavier-than-average weighting of telecommunications and
media bonds, which performed well.
The Fund seeks to achieve high current income with the potential for capital
appreciation. It's management team attempts to meet its objectives by investing
in a combination of income-generating equity securities and debt securities,
including dividend paying common stocks, securities of real estate investment
trusts, preferred stocks, warrants, rights, convertible securities, investment
grade bonds and foreign equities and fixed-income securities, among several
others.
Delaware Small Cap Contrarian Fund seeks to provide long-term capital
appreciation by investing in small company stocks that we believe to be
undervalued. Your Fund took advantage of the attractive opportunities that were
available among small-cap company stocks, returning 6.79% for the six-month
period ended May 31, 2000, outperforming the average returns of its peers in the
Lipper Small-Cap Value Funds Average (Source: Lipper Analytical Services, Inc),
but not its benchmark index, the Russell 2000 Index, which includes both growth
and value stocks.
2
<PAGE>
The Fund's largest holdings are in the banking and finance and the energy
sectors. We were able to find good value among small cap financial stocks during
the period. Our holdings benefited the Fund as many financial services stocks
held up relatively well during the recent market downturn.
In addition, many energy companies have performed admirably because of a
favorable energy backdrop. The substantial increase in energy prices over the
past several months has been beneficial for the operations of many energy
companies. As stock prices increased, we sold some of our holdings at a profit.
Our investment in Office/Industrial REITs particularly helped the Fund deliver
positive returns for the period, as this sector provided outstanding
performance, particularly from mid-March as investors abandoned tech stocks in
favor of more stable sectors.
Market Outlook - While we are currently seeing a good deal of volatility in the
market, we believe the Fund is well positioned to benefit from a broadening of
the market, especially if investors renew their appreciation of earnings and
valuations as the keys to stock appreciation. We thank you for your continued
confidence in 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
This semi-annual report is for the information of Delaware Mid-Cap Value Fund,
Delaware Retirement Income Fund and Delaware Small Cap Contrarian Fund
shareholders. The current prospectuses for the Funds set forth details about
charges, expenses, investment objectives and operating policies of each Fund.
You should read the Fund's prospectus carefully before you invest or send money.
Summary investment results are documented in each Fund's current Statement of
Additional Information.
3
<PAGE>
Delaware Mid-Cap Value Fund
Fund Objective
The Fund seeks to provide long-term capital growth.
Total Fund Assets
$1.97 million
Number of Holdings
58
Your Fund Manager
Christopher S. Beck earned a bachelor's degree at the University of Delaware and
an MBA degree at Lehigh University. He joined Delaware Investments in 1997. Mr.
Beck previously served as vice president at Pitcairn Trust Company, where he
managed small-capitalization stocks and analyzed equity sectors. Before that he
was chief investment officer of the University of Delaware and held management
positions at Cypress Capital Management and Wilmington Trust Company. Mr. Beck
is a Chartered Financial Analyst.
Delaware Retirement Income Fund
Fund Objective
The Fund seeks to provide high current income and an investment that has the
potential for capital appreciation.
Total Fund Assets
$3.14 million
Number of Holdings
55
Your Fund Manager
Gerald Nichols is a graduate of the University of Kansas, where he received a BS
in Business Administration and an MS in Finance. Prior to joining Delaware in
1989, Mr. Nichols worked at Waddell & Reed, Inc. and as an investment officer
for a merchant banking firm. Mr. Nichols is a CFA charterholder.
Delaware Small Cap Contrarian Fund
Fund Objective
The Fund seeks long-term capital growth.
Total Fund Assets
$2.24 million
Number of Holdings
73
Your Fund Manager
Andrea Giles is a graduate of the Massachusetts Institute of Technology and
received an MBA in Finance from Columbia University. Prior to joining Delaware
in 1996, she was an account officer in the Leveraged Capital Group at Citibank.
4
<PAGE>
Performance Summary
Total Return
For Periods Ended May 31, 2000
<TABLE>
<CAPTION>
Six Months Lifetime
<S> <C> <C>
Delaware Mid-Cap Value Fund
Class A (Est12/29/98)
Including Sales Charge -1.86% -5.11%
Excluding Sales Charge +4.12% -1.07%
Institutional Class (Est. 12/29/98) +4.12% -1.07%
Lipper Mid-Cap Value Fund Average +9.84% (186 funds) +10.66% (176 funds)
Russell Mid-Cap Value Index +5.92% +2.14%
Delaware Retirement Income Fund
Class A (Est. 12/2/96)
Including Sales Charge +0.37% +11.52%
Excluding Sales Charge +6.54% +13.43%
Institutional Class (Est. 12/2/96) +6.55% +13.41%
Lipper Income Funds Average +2.64% (97 funds) +3.89% (90 funds)
Standard & Poor's 500 Stock Index +2.90% +12.14%
Delaware Small Cap Contrarian Fund
Class A (Est. 12/29/98)
Including Sales Charge +0.70% +3.99%
Excluding Sales Charge +6.79% +8.42%
Institutional Class (Est. 12/29/98) +6.79% +8.42%
Lipper Small-Cap Value Funds Average +7.78% (348 funds) +8.95% (307 funds)
Russell 2000 Index +5.49% +10.31%
</TABLE>
The Institutional results shown above assume reinvestment of distributions.
Class A returns are based on net asset value and assume reinvestment of
distributions. Returns and share value will fluctuate so that shares, when
redeemed, may be worth more or less than the original share price. No sales
charge or 12b-1 fees were imposed on Class A shares for the periods shown and no
Class B or C shares were offered. The S&P 500 Index is an unmanaged composite of
mostly large capitalization U.S. stocks. The unmanaged Russell 2000 Index is a
measure of small company stocks. The unmanaged Russell Mid-Cap Value Index
contains stocks from the Russell Mid-Cap Index with less-than-average growth
orientation. For the Delaware Mid-Cap Value Fund, the Lipper category represents
the average returns of mid-cap value funds tracked by Lipper Analytical. For the
Delaware Retirement Income Fund, the Lipper category represents the average of
Lipper Income Funds tracked by Lipper Analytical. For Delaware Small Cap
Contrarian Fund, the Lipper category represents the average of small-cap value
funds tracked by Lipper Analytical (Source: Lipper Analytical Services Inc.). It
is not possible to invest in an index. Past performance does not guarantee
future results. This information is for shareholder use only.
5
<PAGE>
DELAWARE GROUP EQUITY FUNDS V
DELAWARE MID-CAP VALUE FUND
STATEMENT OF NET ASSETS
MAY 31, 2000
(UNAUDITED)
Number of Market
Shares Value
----------- --------
Common Stock - 92.03%
Aerospace & Defense - 1.31%
*Litton Industries 600 $ 25,763
--------
25,763
--------
Automobiles & Automotive Parts - 5.80%
*Avis Rent-A-Car 1,100 21,175
Borg-Warner Automotive 800 31,800
Delphi Automotive Systems 1,900 34,319
Harsco 1,000 26,875
--------
114,169
--------
Banking, Finance & Insurance - 13.46%
Compass Bancshares 1,750 35,438
Edwards (A.G.) 1,100 38,431
Everest Reinsurance Holdings 1,100 37,400
North Fork Bancorporation 1,750 28,984
Protective Life 800 22,000
SouthTrust 1,100 29,769
Summit Bancorp 1,000 28,688
Unionbancal Corporation 1,300 44,524
--------
265,234
--------
Buildings & Materials - 3.39%
*Jacobs Engineering Group 900 29,925
Southdown 600 36,825
--------
66,750
--------
Business Services - 1.66%
*Modis Professional Services 3,200 32,800
--------
32,800
--------
Cable, Media & Publishing - 3.77%
Knight-Ridder 700 37,100
Reynolds & Reynolds Class A 1,700 37,188
--------
74,288
--------
Chemicals - 1.42%
Crompton 2,300 27,888
--------
27,888
--------
Computers & Technology - 3.87%
*Computer Sciences 400 38,375
*Synopsys 800 37,850
--------
76,225
--------
6
<PAGE>
DELAWARE MID-CAP VALUE FUND
STATEMENT OF NET ASSETS (Continued)
Number of Market
Shares Value
----------- ---------
Common Stock (continued)
Consumer Products - 1.44%
US Industries 2,100 $ 28,350
---------
28,350
---------
Electronics & Electrical Equipment - 2.96%
Symbol Technologies 600 26,438
Teleflex 900 31,894
---------
58,332
---------
Energy - 15.20%
Conoco Class B 1,300 37,050
*Cooper Cameron 700 48,825
Nicor 800 29,350
Noble Affliates 1,300 51,105
*Santa Fe Snyder 4,100 51,762
Transocean Offshore 1,000 49,187
Valero Energy 1,100 32,175
---------
299,454
---------
Food, Beverage & Tobacco - 2.28%
*Suiza Foods 1,000 44,875
---------
44,875
---------
Healthcare & Pharmaceuticals - 6.49%
*AmeriSource Health Class A 1,500 36,563
*BioChem Pharma 1,100 25,644
*Sybron International 1,100 34,856
Tenet Healthcare 1,200 30,750
---------
127,813
---------
Industrial Machinery - 1.85%
Ingersoll-Rand 800 36,449
---------
36,449
---------
Leisure, Lodging & Entertainment - 3.29%
Viad 1,200 31,575
Wendy's International 1,700 33,256
---------
64,831
---------
Metals & Mining - 1.93%
Nucor 400 15,550
USX-U.S. Steel Group 1,000 22,563
---------
38,113
---------
Paper & Forest Products - 3.37%
Bowater 700 36,181
Westvaco 1,000 30,125
---------
66,306
---------
7
<PAGE>
DELAWARE MID-CAP VALUE FUND
STATEMENT OF NET ASSETS (Continued)
Number of Market
Shares Value
----------- ---------
Common Stock (continued)
Real Estate - 4.06%
Apartment Investment & Management 1,000 $ 40,062
Equity Office Properties Trust 1,500 39,844
---------
79,906
---------
Retail - 6.28%
*BJ's Wholesale Club 1,200 37,200
Ross Stores 2,300 48,588
*Zale 1,000 38,000
---------
123,788
---------
Textiles, Apparel & Furniture - 1.46%
*Furniture Brands International 1,800 28,687
---------
28,687
---------
Transportation & Shipping - 2.43%
CNF Transportation 500 13,156
CSX 800 17,400
Southwest Airlines 900 17,269
---------
47,825
---------
Utilities - 4.31%
American Water Works 1,300 30,388
DQE 800 33,800
Sierra Pacific Resources 1,440 20,790
---------
84,978
---------
Total Common Stock (cost $1,774,279) 1,812,824
---------
Principal
Amount
-----------
Repurchase Agreements - 7.72%
With Chase Manhattan 6.33% 6/1/00 (dated 5/31/00,
collateralized by $52,000 U.S. Treasury Notes
5.875% due 11/15/04, market value $50,595) $ 49,600 $ 49,600
With J.P. Morgan Securities 6.33% 6/1/00 (dated
5/31/00, collateralized by $15,000 U.S. Treasury
Notes 6.375% due 9/30/01, market value $15,374
and $20,000 U.S. Treasury Notes 6.50% due
5/31/01, market value $19,623 and $3,000 U.S.
Treasury Notes 6.50% due 8/31/01, market value
$3,108 and $14,000 U.S. Treasury Notes 6.625%
due 6/30/01, market value $14,132) 51,200 51,200
With PaineWebber 6.33% 6/1/00 (dated 5/31/00,
collateralized by $20,000 U.S. Treasury Notes
5.00% due 4/30/01, market value $19,456
and $13,000 U.S. Treasury Notes 6.25%
due 1/31/02, market value $12,663 and
$20,000 U.S. Treasury Notes 7.25% due 5/15/04,
market value $20,117) 51,200 51,200
--------
Total Repurchase Agreements (cost $152,000) 152,000
--------
8
<PAGE>
DELAWARE MID-CAP VALUE FUND
STATEMENT OF NET ASSETS (Continued)
Total Market Value of Securities - 99.75%
(cost $1,926,279) $1,964,824
Receivables and Other Assets Net of Liabilities - 0.25% 4,965
----------
Net Assets Applicable to 237,890 Shares
Outstanding - 100.00% $1,969,789
==========
Net Asset Value - Delaware Mid-Cap Value Fund A Class
($8.28 / 1 share) $ 8.28
==========
Net Asset Value - Delaware Mid-Cap Value Fund Institutional Class
($1,969,780 / 237,889 shares) $ 8.28
==========
----------
* Non-income producing security for the period ended May 31, 2000.
Components of Net Assets at May 31, 2000:
Shares of Beneficial Interest (unlimited authorization - no par) $2,020,009
Undistributed net investment income 9,543
Accumulated net realized loss on investments (98,308)
Net unrealized appreciation of investments 38,545
----------
Total net assets $1,969,789
==========
Net Asset Value and Offering Price Per Share -
Delaware Mid-Cap Value Fund
Net asset value A Class (A) $ 8.28
Sales charge (5.75% of offering price or 6.16% of the amount
invested per share) (B) 0.51
----------
Offering price $ 8.79
==========
----------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $50,000 or more.
See accompanying notes
9
<PAGE>
DELAWARE GROUP EQUITY FUNDS V
DELAWARE RETIREMENT INCOME FUND
STATEMENT OF NET ASSETS
MAY 31, 2000
(UNAUDITED)
Number of Market
Shares Value
----------- ---------
Common Stock - 45.09%
Aerospace & Defense - 1.56%
Lockheed Martin 2,000 $ 49,000
--------
49,000
--------
Automobiles & Automotive Parts - 3.52%
Dana 1,000 25,813
General Motors 1,200 84,750
--------
110,563
--------
Banking, Finance & Insurance - 13.56%
Bank of America 1,018 56,563
Chubb 1,500 105,000
First Union 1,000 35,188
Mellon Financial 2,800 107,975
St. Paul 2,000 75,000
Summit Bancorp 1,600 45,900
--------
425,626
--------
Cable, Media & Publishing - 0.41%
Gannett 200 12,950
--------
12,950
--------
Computers & Technology - 2.22%
Pitney Bowes 1,600 69,600
--------
69,600
--------
Energy - 2.77%
Chevron 600 55,463
Conoco Class B 1,103 31,436
--------
86,899
--------
Food, Beverage & Tobacco - 1.00%
Philip Morris 1,200 31,350
--------
31,350
--------
Healthcare - 0.78%
Abbott Laboratories 600 24,413
--------
24,413
--------
Industrial Machinery - 4.46%
Deere & Co. 2,500 103,906
Eaton 500 36,281
--------
140,187
--------
Leisure, Lodging & Entertainment - 1.65%
Starwood Hotels & Resorts Worldwide 1,750 51,734
--------
51,734
--------
Metals & Mining - 3.00%
Alcan Aluminum 1,800 59,063
Alcoa 600 35,063
--------
94,126
--------
10
<PAGE>
DELAWARE RETIREMENT INCOME FUND
STATEMENT OF NET ASSETS (continued)
Number of Market
Shares Value
----------- ---------
Common Stock (continued)
Paper & Forest Products - 1.58%
Temple-Inland 1,000 $ 49,688
----------
49,688
----------
Real Estate - 4.94%
Corporate Office Properties 5,500 47,781
Grove Property Trust 7,500 107,344
----------
155,125
----------
Telecommunications - 0.13%
Winstar Communications 139 3,942
----------
3,942
----------
Utilities - 3.51%
Duke Energy 1,000 58,250
Southern 2,000 51,875
----------
110,125
----------
Total Common Stock (cost $1,319,250) 1,415,328
----------
Convertible Preferred Stocks - 15.91%
Banking, Finance & Insurance - 3.15%
Newell Financial Trust I 5.25% 2,600 98,800
----------
98,800
----------
Buildings & Materials - 1.27%
Georgia-Pacific PEPS Units 1,100 40,013
----------
40,013
----------
Industrial Machinery - 1.46%
Ingersoll-Rand 6.75% 2,000 45,750
----------
45,750
----------
Telecommunications - 3.84%
Cox Communications 7.00% 1,200 70,800
Winstar Communications 7.00% 1,000 49,625
----------
120,425
----------
Transportation - 1.52%
Union Pacific Capital Trust 6.25% 1,100 47,713
----------
47,713
----------
Utilities - 4.67%
Houston Industries 7.00% 700 91,000
Texas Utilities 9.25% 1,300 55,575
----------
146,575
----------
Total Convertible Preferred Stocks (cost $514,356) 499,276
----------
Principal
Corporate Bonds - 7.91% Amount
-----------
Cable, Media & Publishing - 1.50%
American Media Operations 10.25% 5/1/09 $ 25,000 23,813
Sinclair Broadcast Group 10.00% 9/30/05 25,000 23,313
----------
47,126
----------
11
<PAGE>
DELAWARE RETIREMENT INCOME FUND
STATEMENT OF NET ASSETS (continued)
Principal Market
Amount Value
------------ ----------
Corporate Bonds (continued)
Leisure, Lodging & Entertainment - 1.07%
AFC Enterprises 10.25% 5/15/07 10,000 $ 9,650
Town Sports International unsec sr nts
9.75% 10/15/04 25,000 24,000
--------
33,650
--------
Packaging & Containers - 1.56%
Huntsman Packaging 9.125% 10/1/07 25,000 26,750
Precise Technology unsec 11.125% 6/15/07 25,000 22,125
--------
48,875
--------
Retail - 1.58%
Fleming 10.625% 12/15/01 50,000 49,688
--------
49,688
--------
Telecommunications - 2.20%
Level 3 Communications 9.125% 5/1/08 50,000 43,250
Voicestream Wire 10/375% 11/15/09 25,000 25,750
--------
69,000
--------
Total Corporate Bonds (cost $259,062) 248,339
--------
Convertible Bonds - 22.53%
Automobiles & Automotive Parts - 1.74%
Magna International 4.875% 12/15/05 60,000 54,600
--------
54,600
--------
Banking, Finance & Insurance - 2.02%
Bell Atlantic Financial Services 5.75% 4/1/03 65,000 63,538
--------
63,538
--------
Cable, Media & Publishing - 1.67%
World Color Press 6.00% 10/1/07 50,000 52,313
--------
52,313
--------
Computers & Technology - 7.36%
Siebel Systems 5.50% 9/15/06 85,000 230,988
--------
230,988
--------
Industrial Machinery - 6.64%
Mail-Well 5.00% 11/1/02 100,000 84,750
MascoTech 4.50% 12/15/03 90,000 69,638
Thermo Fibertek 4.50% 7/15/04 65,000 54,031
--------
208,419
--------
Telecommunications - 3.10%
Clear Channel Communications 1.50% 12/1/02 30,000 29,513
Level Three Communications 6.00% 9/15/09 50,000 67,813
--------
97,326
--------
Total Convertible Bonds (cost $570,650) 707,184
--------
12
<PAGE>
DELAWARE RETIREMENT INCOME FUND
STATEMENT OF NET ASSETS (continued)
Principal Market
Amount Value
------------ ----------
Repurchase Agreements - 8.22%
With Chase Manhattan 6.33% 6/1/00
(dated 5/31/00, collateralized by $89,000
U.S. Treasury Notes 5.875% due 11/15/04,
market value $86,305). $ 84,000 $ 84,000
With J.P. Morgan Securities 6.33% 6/1/00
(dated 5/31/00, collateralized by $33,000
U.S. Treasury Notes 6.50% due 5/31/01,
market value $33,338 and $23,000 U.S.
Treasury Notes 6.625% due 6/30/01, market
value $24,006, and $5,000 U.S. Treasury
Notes 6.50% due 8/31/01, market value $5,275,
and $26,000 U.S. Treasury Notes 6.375%
due 9/30/01, market value $26,098). 87,000 87,000
With PaineWebber 6.33% 6/1/00
(dated 5/31/00, collateralized by $33,000
U.S. Treasury Notes 5.00% due 4/30/01,
market value $33,056 and $21,000 U.S.
Treasury Notes 6.25% due 1/31/02, market
value $21,529 and $33,000 U.S. Treasury
Notes 7.25% due 5/15/04, market value $34,211). 87,000 87,000
-----------
Total Repurchase Agreements (cost $258,000) 258,000
-----------
Total Market Value of Securities - 99.66% $ 3,128,127
(cost $2,921,318)
Receivables and Other Assets Net of Liabilities - 0.34% 10,626
-----------
Net Assets Applicable to 330,696 Shares
Outstanding - 100.00% $ 3,138,753
===========
Net Asset Value - Delaware Retirement Income Fund A Class
($23,659 / 2,490 shares) $ 9.50
===========
Net Asset Value - Delaware Retirement Income Fund
Institutional Class
($3,115,093 / 328,206 shares) $ 9.49
===========
--------------------------------------------------------------------------------
nts - notes
PEPS - Premium Equity Participating Securities
sr - senior
unsec - unsecured
Components of Net Assets at May 31, 2000:
Shares of Beneficial Interest (unlimited authorization - no par) $ 2,905,528
Undistributed net investment income 54,163
Accumulated net realized loss on investments (27,748)
Net unrealized appreciation of investments 206,809
-----------
Total net assets $ 3,138,752
===========
13
<PAGE>
DELAWARE RETIREMENT INCOME FUND
STATEMENT OF NET ASSETS (continued)
Net Asset Value and Offering Price Per Share -
Delaware Retirement Income Fund
Net asset value A Class (A) $ 9.50
Sales charge (5.75% of offering price or 6.11% of the amount
invested per share)(B) 0.58
-----------
Offering price $ 10.08
===========
-------------------------------------------------------------------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
See accompanying notes
14
<PAGE>
DELAWARE GROUP EQUITY FUNDS V
DELAWARE SMALL CAP CONTRARIAN FUND
STATEMENT OF NET ASSETS
MAY 31, 2000
(UNAUDITED)
Number of Market
Shares Value
----------- -----------
Common Stock - 90.00%
Aerospace & Defense - 1.22%
Armor Holdings 2,500 $ 27,344
-----------
27,344
-----------
Automobiles & Automotive Parts - 3.50%
Avis Rent-A-Car 1,000 19,250
Clarcor 1,500 26,531
Federal Signal 1,700 32,831
-----------
78,612
-----------
Banking, Finance & Insurance - 15.60%
Alabama National Bancorp 1,500 28,500
Associated Banccorp 1,080 27,489
Community Trust Bancorp 1,480 21,460
Centura Banks 600 25,950
Commer Banks-Eastern US 1,518 27,889
Compass Bancshares 1,400 28,350
Cullen Frost Bankers 1,000 26,500
Everest Re Group 1,200 40,800
FBL Financial Group 1,600 23,400
Financial Federal 2,300 40,825
Mississippi Valley Bancshares 1,200 27,300
Republic Bancorp 3,260 31,785
-----------
350,248
-----------
Buildings & Materials - 5.71%
Cal Dive International 700 32,244
Florida Rock Industries 500 19,781
Griffon 3,700 22,431
Jacobs Engineering Group 1,100 36,575
Texas Industries 600 17,213
-----------
128,244
-----------
Business Services - 1.28%
Modis Professional Services 2,800 28,700
-----------
28,700
-----------
Cable, Media & Publishing - 0.71%
Houghton Mifflin 400 16,000
-----------
16,000
-----------
Chemicals - 3.94%
Great Lakes Chemical 400 11,100
Hanna (M.A.) 4,100 47,919
OM Group 600 29,325
-----------
88,344
-----------
15
<PAGE>
DELAWARE SMALL CAP CONTRARIAN FUND
STATEMENT OF NET ASSETS (continued)
Number of Market
Shares Value
----------- -----------
Common Stock (continued)
Computers & Technology - 2.38%
Mercury Computer Systems 800 $ 25,100
Synopsys 600 28,388
-----------
53,488
-----------
Consumer Services - 1.00%
Stewart Enterprises 5,600 22,400
-----------
22,400
-----------
Electronics & Electrical Equipment - 3.61%
Cohu 400 14,050
Galileo Technology 2,400 41,550
Thomas & Betts 900 25,538
-----------
81,138
-----------
Energy - 10.71%
Barrett Resources 1,000 39,562
Cooper Cameron 700 48,825
NUI 800 22,400
New Jersey Resources 500 19,375
Noble Affiliates 900 35,381
Santa Fe International 1,400 54,338
Valero Energy 700 20,475
-----------
240,356
-----------
Environmental Services - 2.10%
Waste Connections 2,400 47,100
-----------
47,100
-----------
Food, Beverage & Tobacco - 3.31%
Suiza Foods 1,000 44,875
Universal Foods 1,700 29,325
-----------
74,200
-----------
Healthcare & Pharmaceuticals - 6.33%
AmeriSource Health 700 17,062
Ameripath 3,800 32,537
Conmed 1,200 28,950
Omnicare 2,300 37,950
Oxford Health Plans 1,200 25,500
-----------
141,999
-----------
Industrial Machinery - 3.24%
Idex 1,300 43,387
United Dominion Industries 1,600 29,400
-----------
72,787
-----------
Leisure, Lodging & Entertainment - 0.66%
WMS Industries 1,200 14,850
-----------
14,850
-----------
16
<PAGE>
DELAWARE SMALL CAP CONTRARIAN FUND
STATEMENT OF NET ASSETS (continued)
Number of Market
Shares Value
----------- -----------
Common Stock (continued)
Mall REITs - 1.07%
Macerich 1,100 $ 23,994
-----------
23,994
-----------
Manufactered Housing REITs - 1.21%
Chateau Communities 1,000 27,125
-----------
27,125
-----------
Metals & Mining - 1.46%
CIRCOR International 3,100 32,744
-----------
32,744
-----------
Miscellaneuous - 1.16%
Consolidated Stores 2,000 26,000
-----------
26,000
-----------
Office/ Industrial REITs - 4.12%
Cabot Industrial Trust 600 11,625
Kilroy Realty 800 18,300
Prentiss Properties Trust 1,900 45,600
SL Green Realty 700 16,975
-----------
92,500
-----------
Retail - 0.61%
Tuesday Morning 1,300 13,650
-----------
13,650
-----------
Retail Strip Center REITs - 1.43%
Pan Pacific Retail Properties 1,600 32,000
-----------
32,000
-----------
Telecommunications - 3.31%
Brightpoint 3,800 44,412
TeleSpectrum Worldwide 6,700 29,941
-----------
74,353
-----------
Textils, Apparel & Furniture - 3.36%
Furniture Brands International 1,700 27,094
Kellwood 1,800 30,375
Stanley Furniture 800 18,050
-----------
75,519
-----------
Transportation & Shipping - 4.82%
Alexander & Baldwin 1,500 34,687
CNF Transportation 500 13,156
Tidewater 1,200 46,650
USFreightways 500 13,719
-----------
108,212
-----------
17
<PAGE>
DELAWARE SMALL CAP CONTRARIAN FUND
STATEMENT OF NET ASSETS (continued)
Number of Market
Shares Value
----------- ---------
Common Stock (continued)
Utilities - 2.15%
Kansas City Power & Light 1,000 $ 23,688
Scana 947 24,504
-----------
48,192
-----------
Total Common Stock (cost $1,853,744) 2,020,099
-----------
Principal
Amount
-------------
Repurchase Agreements - 8.82%
With Chase Manhattan 6.33% 6/1/00 (dated 5/31/00,
collateralized by $68,000 U.S. Treasury Notes
5.875% due 11/15/04, market value $65,906) $ 64,600 $ 64,600
With J.P. Morgan Securities 6.33% 6/1/00 (dated
5/31/00, collateralized by $19,900 U.S. Treasury
Notes 6.375% due 9/30/01, market value $20,029
and $26,000 U.S. Treasury Notes 6.50% due
5/31/01, market value $25,585 and $4,000 U.S.
Treasury Notes 6.50% due 8/31/01, market value
4,049 and $18,000 U.S. Treasury Notes 6.625%
due 6/30/01, market value $18,423) 66,700 66,700
With PaineWebber 6.33% 6/1/00 (dated 5/31/00,
collateralized by $24,800 U.S. Treasury Notes
5.00% due 4/30/01, market value $25,369
and $16,000 U.S. Treasury Notes 6.25%
due 1/31/02, market value $16,522 and
$26,000 U.S. Treasury Notes 7.25% due 5/15/04,
market value $26,255) 66,700 66,700
-----------
Total Repurchase Agreements (cost $198,000) 198,000
-----------
Total Market Value of Securities - 98.82%
(cost $2,051,744) $ 2,218,099
Receivables and other Assets Net of Liabilities - 1.18% 26,577
-----------
Net Assets Applicable to 255,557 Shares
Outstanding - 100.00% $ 2,244,676
===========
Net Asset Value - Delaware Small Cap Contrarian Fund A Class
($8.78 / 1 share) $ 8.78
===========
Net Asset Value - Delaware Small Cap Contrarian Fund
Institutional Class ($2,244,667 / 255,556 shares) $ 8.78
===========
--------------------------------------------------------------------------------
* Non-income producing security for the period ended 5/31/00.
REITs - Real Estate Investment Trusts
18
<PAGE>
DELAWARE SMALL CAP CONTRARIAN FUND
STATEMENT OF NET ASSETS (continued)
Components of Net Assets at May 31, 2000:
Shares of Beneficial Interest (unlimited authorization - no par) $ 2,169,199
Undistributed net investment income 13,825
Accumulated net realized loss on investments (104,703)
Net unrealized appreciation of investments 166,355
-----------
Total net assets $ 2,244,676
===========
Net Asset Value and Offering Price Per Share-
Delaware Small Cap Contrarian Fund
Net asset value A Class (A) $ 8.78
Sales charge (5.75% of offering price, or 6.15% of amount
invested per share) (B) 0.54
-----------
Offering price $ 9.32
-----------
--------------------------------------------------------------------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $50,000 or more.
See accompanying notes
19
<PAGE>
DELAWARE GROUP EQUITY FUNDS V
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MAY 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
Delaware Delaware Delaware
Mid-Cap Retirement Small Cap
Value Income Contrarian
Fund Fund Fund
---------- ------------ ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 3,478 $ 35,872 $ 5,442
Dividends 15,950 39,142 22,973
-------- -------- --------
19,428 75,014 28,415
-------- -------- --------
EXPENSES:
Management fees 6,968 9,880 7,918
Reports and statements to shareholders 360 300 4,150
Professional fees 1,800 63 4,040
Registration fees 600 210 2,472
Accounting and administration 570 615 473
Taxes (other than taxes on income) 834 318 555
Dividend disbursing, transfer agent fees and other expenses 780 1,129 312
Custodian fees 199 787 937
Trustees' fees 600 684 993
Distribution expense - 29 -
Other 280 499 988
-------- -------- --------
12,991 14,514 22,838
Less expenses waived or absorbed (5,983) (2,602) (14,649)
Less expenses paid indirectly (40) (522) (62)
-------- -------- --------
Total expenses 6,968 11,390 8,127
NET INVESTMENT INCOME 12,460 63,624 20,288
-------- -------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized loss on investments (98,569) (27,782) (104,642)
Net change in unrealized appreciation / depreciation
of investments 164,796 158,286 228,083
-------- -------- --------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 66,227 130,504 123,441
-------- -------- --------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 78,687 $194,128 $143,729
======== ======== ========
</TABLE>
See accompanying notes
20
<PAGE>
DELAWARE GROUP EQUITY FUNDS V
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Delaware
Mid-Cap
Value
Fund
----------------------------------
Six Months 12/29/98*
Ended To
5/31/00 11/30/99
(Unaudited)
----------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 12,460 $ 17,083
Net realized gain (loss) on investments (98,569) 261
Net change in unrealized appreciation/depreciation of investments 164,796 (126,251)
----------------------------------
Net increase (decrease) in net assets resulting from operations 78,687 (108,907)
----------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class - -
Institutional Class (20,000) -
Net realized gain on investments:
A Class - -
Institutional Class - -
----------------------------------
(20,000) -
----------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class 2 508
Institutional Class 2 2,000,009
Net asset value of shares issued upon reinvestment of distributions from net
investment income and net realized gain on investments:
A Class - -
Institutional Class 20,000 -
----------------------------------
20,004 2,000,517
----------------------------------
Cost of shares repurchased:
A Class - (512)
Institutional Class - -
----------------------------------
- (512)
----------------------------------
Increase in net assets derived from capital share transactions 20,004 2,000,005
----------------------------------
NET INCREASE IN NET ASSETS 78,691 1,891,098
NET ASSETS:
Beginning of period 1,891,098 -
----------------------------------
End of period $1,969,789 $1,891,098
==================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Delaware
Retirement
Income
Fund
-------------------------------
Six Months
Ended Year Ended
5/31/00 11/30/99
(Unaudited)
-------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 63,624 $ 134,014
Net realized gain (loss) on investments (27,782) 30,708
Net change in unrealized appreciation/depreciation of investments 158,286 (79,700)
-------------------------------
Net increase (decrease) in net assets resulting from operations 194,128 85,022
-------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class (989) (1,392)
Institutional Class (130,426) (173,404)
Net realized gain on investments:
A Class (231) (864)
Institutional Class (30,433) (107,679)
-------------------------------
(162,079) (283,339)
-------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class 2 -
Institutional Class 2 -
Net asset value of shares issued upon reinvestment of distributions from net
investment income and net realized gain on investments:
A Class 1,219 2,256
Institutional Class 160,858 281,083
-------------------------------
162,081 283,339
-------------------------------
Cost of shares repurchased:
A Class - (1,266)
Institutional Class (2,015) (14)
-------------------------------
(2,015) (1,280)
-------------------------------
Increase in net assets derived from capital share transactions 160,066 282,059
-------------------------------
NET INCREASE IN NET ASSETS 192,115 83,742
NET ASSETS:
Beginning of period 2,946,637 2,862,895
-------------------------------
End of period $3,138,752 $2,946,637
===============================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Delaware
Small Cap
Contrarian
Fund
----------------------------
Six Months 12/29/98*
Ended To
5/31/00 11/30/99
(Unaudited)
----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 20,288 $ 25,302
Net realized gain (loss) on investments (104,642) 137,352
Net change in unrealized appreciation/depreciation of investments 228,083 (61,728)
----------------------------
Net increase (decrease) in net assets resulting from operations 143,729 100,926
----------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class - -
Institutional Class (31,765) -
Net realized gain on investments:
A Class (1) -
Institutional Class (137,412) -
----------------------------
(169,178) -
----------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class 2 409
Institutional Class 2 2,000,008
Net asset value of shares issued upon reinvestment of distributions from net
investment income and net realized gain on investments:
A Class 1 -
Institutional Class 169,177 -
----------------------------
169,182 2,000,417
----------------------------
Cost of shares repurchased:
A Class - (400)
Institutional Class - -
----------------------------
- (400)
----------------------------
Increase in net assets derived from capital share transactions 169,182 2,000,017
----------------------------
NET INCREASE IN NET ASSETS 143,733 2,100,943
NET ASSETS:
Beginning of period 2,100,943 -
----------------------------
End of period $2,244,676 $2,100,943
============================
</TABLE>
*Date of commencement of operations.
See accompanying notes
21
<PAGE>
DELAWARE GROUP EQUITY FUNDS V
FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout the period were
as follows:
<TABLE>
<CAPTION>
Delaware
Mid-Cap Value Fund
Institutional Class
------------------------------
Six Months 12/29/98(1)
Ended To
5/31/00(2) 11/30/99
(Unaudited)
------------- ------------
<S> <C> <C>
Net asset value, beginning of period $ 8.040 $ 8.500
Income (loss) from investment operations:
Net investment income(3) 0.127 0.073
Net realized and unrealized gain (loss) on investments 0.198 (0.533)
------- -------
Total from investment operations 0.325 (0.460)
------- -------
Less dividends:
Dividends from net investment income (0.085) -
------- -------
Total dividends (0.085) -
------- -------
Net asset value, end of period $ 8.280 $ 8.040
======= =======
Total return(4) 4.12% (5.41%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) $ 1,970 $ 1,891
Ratio of expenses to average net assets 0.75% 0.75%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly 1.40% 1.33%
Ratio of net investment income to average net assets 1.35% 0.92%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid indirectly 0.70% 0.34%
Portfolio turnover 50% 37%
</TABLE>
-------------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Ratios have been annualized and total return has not been annualized.
(3) Per share information was based on the average shares outstanding method.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value.
Shares of the Delaware Mid-Cap Value Fund A Class were initially offered on
December 29, 1998. On May 3, 1999, the A Class sold shares which were
subsequently repurchased, leaving a balance of 1 share, which is the initial
seed purchase, as of May 31, 2000. This shareholder data are not being disclosed
because the data are not believed to be meaningful.
See accompanying notes
22
<PAGE>
DELAWARE GROUP EQUITY FUNDS V
FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Delaware
Retirement Income Fund
A Class
------------------------------
Six Months
Ended Year Ended
5/31/00(2) 11/30/99
(Unaudited)
------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 9.430 $ 10.160
Income (loss) from investment operations:
Net investment income(3) 0.194 0.431
Net realized and unrealized gain (loss) on investments 0.394 (0.156)
--------- ---------
Total from investment operations 0.588 0.275
--------- ---------
Less dividends and distributions:
Dividends from net investment income (0.420) (0.620)
Distributions from net realized gain on investments (0.098) (0.385)
--------- ---------
Total dividends and distributions (0.518) (1.005)
--------- ---------
Net asset value, end of period $ 9.500 $ 9.430
========= =========
Total return(4) 6.54% 3.14%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $ 24 $ 22
Ratio of expenses to average net assets 0.75% 0.75%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly 1.25% 1.17%
Ratio of net investment income to average net assets 4.19% 4.46%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid indirectly 3.69% 4.03%
Portfolio turnover 19% 42%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Delaware
Retirement Income Fund
A Class
-------------------------------
12/02/96(1)
Year Ended To
11/30/98 11/30/97
-------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 11.700 $ 8.500
Income (loss) from investment operations:
Net investment income(3) 0.632 0.558
Net realized and unrealized gain (loss) on investments (0.402) 2.685
--------- ---------
Total from investment operations 0.230 3.243
--------- ---------
Less dividends and distributions:
Dividends from net investment income (0.570) (0.043)
Distributions from net realized gain on investments (1.200) -
--------- ---------
Total dividends and distributions (1.770) (0.043)
--------- ---------
Net asset value, end of period $ 10.160 $11.700
========= =========
Total return(4) 2.22% 38.31%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $ 23 $ 9
Ratio of expenses to average net assets 0.75% 0.75%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly 1.62% 2.18%
Ratio of net investment income to average net assets 6.01% 5.48%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid indirectly 5.14% 4.05%
Portfolio turnover 91% 196%
</TABLE>
-------------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Ratios have been annualized and total return has not been annualized.
(3) Per share information was based on the average shares outstanding method.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value.
See accompanying notes
23
<PAGE>
DELAWARE GROUP EQUITY FUNDS V
DELAWARE RETIREMENT INCOME FUND
FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Delaware
Retirement Income Fund
Institutional Class
-------------------------------
Six Months
Ended Year Ended
5/31/00(2) 11/30/99
(Unaudited)
-------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 9.420 $ 10.150
Income (loss) from investment operations:
Net investment income(3) 0.194 0.431
Net realized and unrealized gain (loss) on investments 0.394 (0.156)
------- --------
Total from investment operations 0.588 0.275
------- --------
Less dividends and distributions:
Dividends from net investment income (0.420) (0.620)
Distributions from net realized gain on investments (0.098) (0.385)
------- --------
Total dividends and distributions (0.518) (1.005)
------- --------
Net asset value, end of period $ 9.490 $ 9.420
======= ========
Total return(4) 6.55% 3.15%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $ 3,115 $ 2,924
Ratio of expenses to average net assets 0.75% 0.75%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly 0.95% 0.87%
Ratio of net investment income to average net assets 4.19% 4.46%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid indirectly 3.99% 4.33%
Portfolio turnover 19% 42%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Delaware
Retirement Income Fund
Institutional Class
------------------------------
12/02/96(1)
Year Ended To
11/30/98 11/30/97
------------------------------
<S> <C> <C>
Net asset value, beginning of period $ 11.690 $ 8.500
Income (loss) from investment operations:
Net investment income(3) 0.632 0.558
Net realized and unrealized gain (loss) on investments (0.402) 2.675
-------- --------
Total from investment operations 0.230 3.233
-------- --------
Less dividends and distributions:
Dividends from net investment income (0.570) (0.043)
Distributions from net realized gain on investments (1.200) -
-------- --------
Total dividends and distributions (1.770) (0.043)
-------- --------
Net asset value, end of period $ 10.150 $ 11.690
======== ========
Total return(4) 2.22% 38.19%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $ 2,840 $ 2,763
Ratio of expenses to average net assets 0.75% 0.75%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly 1.32% 1.88%
Ratio of net investment income to average net assets 6.01% 5.48%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid indirectly 5.44% 4.35%
Portfolio turnover 91% 196%
</TABLE>
-------------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Ratios have been annualized and total return has not been annualized.
(3) Per share information was based on the average shares outstanding method.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value.
See accompanying notes
24
<PAGE>
DELAWARE GROUP EQUITY FUNDS V
FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout the period were
as follows:
<TABLE>
<CAPTION>
Delaware
Small Cap Contrarian
Institutional Class
-------------------------------
Six Months 12/29/98(1)
Ended To
5/31/00(2) 11/30/99
(Unaudited)
------------ ------------
<S> <C> <C>
Net asset value, beginning of period $ 8.930 $ 8.500
Income from investment operations:
Net investment income(3) 0.128 0.104
Net realized and unrealized gain on investments 0.441 0.326
------- -------
Total from investment operations 0.569 0.430
------- -------
Less dividends and distributions:
Dividends from net investment income (0.135) -
Distributions from net realized gain on investments (0.584) -
------- -------
Total dividends and distributions (0.719) -
------- -------
Net asset value, end of period $ 8.780 $ 8.930
======= =======
Total return(4) 6.79% 5.06%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $ 2,245 $ 2,101
Ratio of expenses to average net assets 0.75% 0.80%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly 2.11% 1.84%
Ratio of net investment income to average net assets 1.87% 1.27%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid indirectly 0.51% 0.18%
Portfolio turnover 119% 63%
</TABLE>
-------------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Ratios have been annualized and total return has not been annualized.
(3) Per share information was based on the average shares outstanding method.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value.
Shares of the Delaware Small Cap Contrarian Fund A Class were initially offered
on December 29, 1998. On March 16, 1999, the A Class sold shares which were
subsequently repurchased, leaving a balance of 1 share, which is the initial
seed purchase, as of May 31, 2000. This shareholder data is not being disclosed
because the data is not believed to be meaningful.
See accompanying notes
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
DELAWARE GROUP EQUITY FUNDS V
NOTES TO FINANCIAL STATEMENTS
MAY 31, 2000
(UNAUDITED)
Delaware Group Equity Funds V (the "Company") is organized as a Delaware
business trust and offers four funds: the Delaware Mid-Cap Value Fund, the
Delaware Retirement Income Fund, the Delaware Small Cap Contrarian Fund and the
Delaware Small Cap Value Fund. These financial statements and related notes
pertain to the Delaware Mid-Cap Value Fund, the Delaware Retirement Income Fund,
and the Delaware Small Cap Contrarian Fund (each referred to as a "Fund" or
collectively as the "Funds"). The Funds are registered as diversified open-end
investment companies under the Investment Company Act of 1940, as amended. The
Funds offer four classes of shares. The A Class carries a maximum front-end
sales charge of 5.75%. The B Class carries a back-end deferred sales charge. The
C Class carries a level-load deferred sales charge and the Institutional Class
has no sales charge. As of May 31, 2000, only the A and Institutional Classes
have commenced operations.
The Delaware Mid-Cap Value Fund's objective is to provide long-term capital
appreciation. The Delaware Retirement Income Fund's objective is to provide
investors with high current income and an investment that has the potential for
capital appreciation. The Delaware Small Cap Contrarian Fund's objective is to
provide long-term capital appreciation.
1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Funds.
Security Valuation- Securities listed on an exchange are valued at the last
quoted sales price as of the regular 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. Long-term debt securities are
valued by an independent pricing service and such prices are believed to reflect
the fair value of such securities. Money market instruments having less than 60
days to maturity are valued at amortized cost, which approximates market value.
Other securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Funds' Board of Trustees.
Federal Income Taxes- Each 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 accounting
principles generally accepted in the United States.
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Class Accounting- Investment income, common expenses and realized and unrealized
gain (loss) on investments are allocated to the various classes of each 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- Each 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 each
Fund's custodian bank until the maturity of the respective repurchase
agreements. Each repurchase agreement is 102% collateralized. However, in the
event of default or bankruptcy by the counterparty to the agreement, realization
of the collateral may be subject to legal proceedings.
Use of Estimates- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Other- Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. Each Fund declares and pays dividends from net
investment income and capital gains, if any, annually.
Certain expenses of the Funds are paid through commission arrangements with
brokers. These transactions are done subject to best price. In addition, the
Funds receive earnings credits from their custodian when positive cash balances
are maintained, which are used to offset custody fees. The expenses paid under
the above arrangements are included in their respective expense captions on the
Statement of Operations with the corresponding expense offset shown as "expenses
paid indirectly". The amount of these expenses for the period ended May 31, 2000
are as follows:
Delaware Delaware Delaware
Mid-Cap Retirement Small Cap
Value Fund Income Fund Contrarian Fund
--------------------------------------------
Commission Reimbursements $21 $35 $25
Earnings Credits 19 487 37
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Funds
pay Delaware Management Company (DMC), the Investment Manager of the Funds, an
annual fee which is calculated on the daily net assets of each Fund as follows:
Delaware Delaware Delaware
Mid-Cap Retirement Small Cap
Value Fund Income Fund Contrarian Fund
--------------------------------------------
On the first $500 million 0.75% 0.65% 0.75%
On the next $500 million 0.70% 0.60% 0.70%
On the next $1,500 million 0.65% 0.55% 0.65%
Over $2,500 million 0.60% 0.50% 0.60%
DMC has elected to waive that portion, if any, of the management fee and
reimburse each Fund to the extent that annual operating expenses, exclusive of
taxes, interest, distribution expenses, brokerage commissions and extraordinary
expenses, exceed 0.75% of the Funds' average daily net assets through November
30, 2000.
The Funds have engaged Delaware Service Company, Inc. (DSC), an affiliate of
DMC, to provide dividend disbursing, transfer agent and accounting and
administration services. Each 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, 2000, the Funds had liabilities for such fees and other expenses
payable to DMC and affiliates as follows:
Delaware Delaware Delaware
Mid-Cap Retirement Small Cap
Value Fund Income Fund Contrarian Fund
--------------------------------------------
Investment management fee
payable to DMC $255 $1,186 $ -
Dividend disbursing, transfer
agent accounting fees and
other expenses payable to DSC 581 760 739
Other expenses payable to DMC
and affiliates 4 90 4
Pursuant to the Distribution Agreement, the Funds pay Delaware Distributors,
L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.30% of the average daily assets of the A Class and 1.00% of the average
daily net assets of the B and C Classes. DDLP has elected voluntarily to waive
such fees.
Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Funds. These officers, trustees and employees are paid no compensation by
the Funds.
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
3. Investments
For the six months ended May 31, 2000, the Funds made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments for each Fund as follows:
Delaware Delaware Delaware
Mid-Cap Retirement Small Cap
Value Fund Income Fund Contrarian Fund
--------------------------------------------
Purchases $439,717 $274,638 $1,198,806
Sales 540,894 296,501 1,280,252
The cost of investments for federal income tax purposes approximates cost for
book purposes. At May 31, 2000, the aggregate cost of securities and unrealized
appreciation (depreciation) for federal income tax purposes for each Fund were
as follows:
Delaware Delaware Delaware
Mid-Cap Retirement Small Cap
Value Fund Income Fund Contrarian Fund
--------------------------------------------
Cost of investments $1,926,279 $2,921,318 $2,051,744
---------- ---------- ----------
Aggregate unrealized appreciation 219,083 441,264 278,134
Aggregate unrealized depreciation (180,538) (234,455) (117,779)
---------- ---------- ----------
Net unrealized appreciation $ 38,545 $ 206,809 $ 166,355
---------- ---------- ----------
4. Capital Shares
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Delaware Mid-Cap Delaware Retirement Delaware Small Cap
Value Fund Income Fund Contrarian Fund
Six Months Six Months Six Months
Ended 12/29/98* Ended Year Ended 12/29/98*
5/31/00 to 5/31/00 Ended 5/31/00 to
(Unaudited) 11/30/99 (Unaudited) 11/30/99 (Unaudited) 11/30/99
-------------- ------------ -------------- ------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class - 57 - - - 57
Institutional Class - 235,295 - - - 235,295
Shares upon reinvestment of
Distributions from net
Investment income and net
Realized gain on investments:
A Class - - 136 246 - -
Institutional Class 2,594 - 17,893 30,854 20,261 -
------------- ----------- ------------- ------------ ------------- -----------
2,594 235,352 18,029 31,100 20,261 235,352
------------- ----------- ------------- ------------ ------------- -----------
Shares repurchased:
A Class - (56) (224) (137) - (56)
Institutional Class - - - (1) - -
------------- ----------- ------------- ------------ ------------- -----------
- (56) (224) (138) - (56)
------------- ----------- ------------- ------------ ------------- -----------
Net increase 2,594 235,296 17,805 30,962 20,261 235,296
============= =========== ============= ============ ============= ===========
</TABLE>
*Date of commencement of operations.
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
5. Lines of Credit
The Fund along with certain other funds in the Delaware Investments Family of
Funds (the "Participants"), participate in a $683,500,000 revolving line of
credit facility to be used for temporary or emergency purposes as an additional
source of liquidity to fund redemptions of investor shares. The Participants are
charged an annual commitment fee, which is allocated across the Participants on
the basis of each fund's allocation of the entire facility. The Participants may
borrow up to a maximum of one-third of their net assets under the agreement. No
amount was outstanding at May 31, 2000, or at any time during the period.
6. Market and Credit Risk
The Delaware Mid-Cap Value Fund and the Delaware Small Cap Contrarian Fund may
invest up to 15% of their 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.
The Delaware Retirement Income Fund may invest up to 10% of its total 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.
30