<PAGE>
-------------------------------------
DELAWARE INVESTMENTS
-------------------------------------
PREMIUM FUND
-------------------------------------
-------------------------------------
-------------------------------------
SEMI-ANNUAL REPORT
-------------------------------------
JUNE 30, 1998
FOR GROWTH OF CAPITAL
TREND SERIES
DELCAP SERIES
SMALL CAP VALUE SERIES
FOR TOTAL RETURN
SOCIAL AWARENESS SERIES
DEVON SERIES
DECATUR TOTAL RETURN SERIES
REIT SERIES
DELAWARE SERIES
CONVERTIBLE SECURITIES SERIES
FOR INTERNATIONAL
DIVERSIFICATION
EMERGING MARKETS SERIES
INTERNATIONAL EQUITY SERIES
GLOBAL BOND SERIES
FOR INCOME
DELCHESTER SERIES
STRATEGIC INCOME SERIES
CAPITAL RESERVES SERIES
CASH RESERVE SERIES
(899)
SA-MED [6/98] 8/98
<PAGE>
July 6, 1998
Dear Policy Holder:
U.S. and European stock markets surged during the first half of 1998, shaking
off jitters caused by economic turmoil along the Pacific Rim last winter. Asia
sought to remedy its ailing economies but investment capital bled from the
Pacific Rim. Many foreign investors sought the relative safety of U.S.
Treasuries - bolstering the domestic bond market.
CUMULATIVE TOTAL RETURN SIX MONTHS ENDED JUNE 30, 1998
Standard & Poor's 500 Index +16.84%
Morgan Stanley Europe Australia Far East Index +15.27%
Russell 2000 Index +4.66%
Lehman Brothers Government/Corporate Bond Index +4.17%
Past performance does not guarantee future results. Performance quoted above
is at net asset value and assumes reinvestment of distributions.
A fortuitous fusion of robust growth, tame inflation, and low unemployment
in the U.S. lifted the Dow Jones Industrial Average above the 9000 point mark
for the first time. Short-term market expectations hurt many small cap stocks
as investors focused on larger cap stocks. The return of the S&P 500 was
nearly four times that of the Russell 2000 Index, as shown above.
Low interest rates and federal budget restraint powered a U.S. bond market
rally this past spring. Treasury prices rose to historic highs while yields
fell. Increased corporate profits boosted the sector's bond market as most
businesses met debt obligations.
European economic growth accelerated due to increased fiscal discipline on
the part of governments and private industry. Strong gains in the Morgan
Stanley Capital Europe Australia Far East (EAFE) Index largely resulted from
Continental Europe's economic growth prospects and reforms related to the
introduction of a common currency in 1999.
Asian stock markets languished for much of the period. A sustained rally in
Asian stocks seems unlikely over the coming months unless Japan, the main
engine of growth for the region, acts decisively to clean up its debt strapped
banking system and revives its economy.
At mid-year, the U.S. economy is buffeted by opposing forces. Domestic demand
for U.S. goods and services remains strong but exports have dropped due to the
Pacific Rim crises. We believe the Asian situation could have a moderating
effect on U.S. companies' profit growth for the remainder of the fiscal year.
We thank you for your investment in Premium Fund. We suggest you
periodically review your annuity investment options with the help of your
financial adviser.
Sincerely,
/s/ Wayne A. Stork /s/ Jeffrey J. Nick
- ----------------------------- ------------------------------
Wayne A. Stork Jeffrey J. Nick
Chairman President and Chief Executive
1
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-TREND SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK - 92.90%
AEROSPACE & DEFENSE - 1.86%
+AAR .......................................... 52,050 $ 1,538,728
*Kellstrom Industries ......................... 31,900 935,069
*LMI Aerospace ................................ 27,700 287,388
-----------
2,761,185
-----------
BANKING, FINANCE & INSURANCE - 14.29%
ACE Limited .................................. 41,200 1,606,800
+Ambac Financial Group ........................ 37,200 2,176,200
*Amerin ....................................... 7,400 215,756
Capital Automotive ........................... 126,800 1,802,937
Capital Re ................................... 26,800 1,919,550
*Capital Trust Class A ........................ 65,700 632,363
Centris Group ................................ 27,300 337,838
FIRST AMERICAN (TENNESSEE) ................... 95,700 4,608,553
*First Sierra Financial ....................... 31,200 949,650
Indymac Mortgage Holdings .................... 83,700 1,904,175
*Profit Recovery Group ........................ 74,800 2,096,737
Resource Asset Investment Trust .............. 38,100 607,219
Webster Financial ............................ 29,700 987,525
Western Bancorp .............................. 31,200 1,323,075
-----------
21,168,378
-----------
BUILDINGS & MATERIALS - 2.55%
*Comfort Systems USA .......................... 118,500 2,769,938
*J. Ray McDermott ............................. 24,400 1,012,600
-----------
3,782,538
-----------
CABLE, MEDIA, & PUBLISHING - 9.28%
+*CHANCELLOR MEDIA CLASS A ..................... 105,100 5,218,869
*Emmis Broadcasting ........................... 33,000 1,582,969
*Metro Networks ............................... 21,700 933,778
+*Snyder Communications ........................ 41,500 1,826,000
+TCA Cable TV ................................. 19,600 1,178,450
*The Petersen Companies Class A ............... 58,000 1,486,250
+*USA Networks ................................. 60,304 1,517,022
-----------
13,743,338
-----------
CHEMICALS - 1.42%
+*Mettler-Toledo International ................. 104,900 2,104,556
-----------
2,104,556
-----------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
COMPUTERS & TECHNOLOGY - 22.84%
+*AnswerThink Consulting Group .................. 23,300 $ 499,494
+*Aspect Development ............................ 33,600 2,538,900
*Brio Technology ............................... 25,600 344,800
+*Concord Communications ........................ 14,700 378,066
*EMC ........................................... 68,900 3,087,581
*FlexInternational Software .................... 94,000 666,812
+Henry(Jack) & Associates ...................... 59,800 2,059,363
+*Hyperion Software ............................. 75,700 2,159,816
+*Inktomi ....................................... 14,500 575,469
+*J.D. EDWARDS .................................. 66,100 2,838,169
+*Netgravity .................................... 7,200 94,275
+*Network Appliance ............................. 28,500 1,108,828
+*NOVA .......................................... 88,700 3,171,025
*Peerless Systems .............................. 106,100 2,214,838
+*PLATINUM TECHNOLOGY ........................... 138,295 3,954,373
*PMT Services .................................. 80,900 2,057,894
*SPR ........................................... 38,500 1,171,844
*SunGuard Data Systems ......................... 40,700 1,561,863
+*Veritas Software .............................. 51,975 2,148,841
+*Xylan ......................................... 40,200 1,197,206
-----------
33,829,457
-----------
CONSUMER PRODUCTS - 3.79%
*Cendant ....................................... 37,860 790,328
+G&K Services .................................. 40,900 1,789,375
*GEMSTAR INTERNATIONAL
GROUP LIMITED................................. 81,300 3,030,966
-----------
5,610,669
-----------
ELECTRONICS & ELECTRICAL EQUIPMENT - 5.06%
*Applied Micro Circuits ........................ 96,000 2,493,000
*Integrated Electrical Services ................ 38,600 776,825
+*Micrel ........................................ 52,900 1,735,781
+*MMC Networks .................................. 23,600 751,512
+Pittston Brink's Group ........................ 23,500 866,563
*Protection One ................................ 79,800 870,319
-----------
7,494,000
-----------
ENVIRONMENTAL SERVICES - 0.81%
*Superior Services ............................. 39,800 1,197,731
-----------
1,197,731
-----------
- -----------
Top 10 stock holdings, representing 23.3% of net assets, are printed in
boldface.
2
<PAGE>
Trend Series
Statement of Net Assets (Continued)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (Continued)
FOOD, BEVERAGES & TOBACCO - 1.09%
*The Cheesecake Factory ......................... 71,700 $1,622,213
----------
1,622,213
----------
HEALTHCARE & PHARMACEUTICALS - 5.27%
+*Alternative Living Services .................... 48,300 1,304,100
+*Atria Communities .............................. 27,400 471,794
*Brookdale Living Communities ................... 75,000 1,907,813
+*Coulter Pharmaceuticals ........................ 14,200 430,438
+*Renal Care Group ............................... 25,850 1,140,631
+*Sunrise Assisted Living ........................ 74,100 2,549,503
----------
7,804,279
----------
INDUSTRIAL MACHINERY - 0.13%
*Spinnaker Industries Common .................... 5,800 108,025
*Spinnaker Industries Class A ................... 4,500 87,750
----------
195,775
----------
LEISURE, LODGING & ENTERTAINMENT - 1.60%
*Dave & Buster's ................................ 51,500 1,282,672
Royal Caribbean Cruises ........................ 13,700 1,089,150
----------
2,371,822
----------
METALS & MINING - 0.46%
*Metals USA ..................................... 39,500 681,375
----------
681,375
----------
PAPER & FOREST PRODUCTS - 1.91%
+CONSOLIDATED GRAPHICS .......................... 47,900 2,826,100
----------
2,826,100
----------
RETAIL - 15.31%
*Barnett ........................................ 52,800 1,062,600
+*Bebe Stores .................................... 24,200 316,113
+*CDnow .......................................... 29,200 587,650
*CompUSA ........................................ 47,100 850,744
+*Concepts Direct ................................ 22,100 327,356
<PAGE>
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
RETAIL (CONTINUED)
*Cost Plus .................................. 76,900 $ 2,307,000
*DOLLAR TREE STORES ......................... 69,600 2,827,500
*Hibbett Sporting Goods ..................... 42,200 1,682,725
*LINENS N THINGS ............................ 97,500 2,979,844
+*MSC Industrial Direct Class A .............. 74,900 2,134,650
+*Marinemax .................................. 37,900 469,013
*Piercing Pagoda ............................ 23,900 857,413
+Restoration Hardware ....................... 25,000 626,563
Schultz Sav-O Stores ....................... 28,000 451,500
*Sonic ...................................... 24,750 552,234
+*Staples .................................... 96,475 2,794,760
+*Sunglass Hut International ................. 61,100 674,009
*Wilmar Industries .......................... 46,000 1,173,000
-----------
22,674,674
-----------
TELECOMMUNICATIONS - 2.71%
+*GeoTel Communications ...................... 51,000 2,068,688
+*Nextlink Communications Class A ............ 51,500 1,948,953
-----------
4,017,641
-----------
TRANSPORTATION & SHIPPING - 0.55%
+*Coach USA .................................. 17,700 807,563
-----------
807,563
-----------
UTILITIES - 1.22%
+*AES ........................................ 34,392 1,807,729
-----------
1,807,729
-----------
MISCELLANEOUS - 0.75%
+*Neff ....................................... 29,900 347,588
+*NFO Worldwide .............................. 42,300 756,113
Northland Cranberries ...................... 400 6,188
-----------
1,109,889
-----------
TOTAL COMMON STOCK
(COST $112,340,459) ........................ 137,610,912
-----------
3
<PAGE>
TREND SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
--------- -----------
REPURCHASE AGREEMENTS - 11.01%
With Chase Manhattan 5.85%
7/01/98 (dated 6/30/98,
collateralized by $6,102,000
U.S. Treasury Notes
5.375% due 6/30/03,
market value $6,073,107) ................ $ 5,952,000 $ 5,952,000
With PaineWebber 5.75%
7/01/98 (dated 6/30/98,
collateralized by $1,738,000
U.S. Treasury Notes
5.875% due 01/31/99,
market value $1,783,536 and
$3,405,000 U.S. Treasury Notes
6.00% due 8/15/99, market
value $3,496,730) ....................... 5,175,000 5,175,000
With J.P. Morgan Securities 5.75%
7/01/98 (dated 6/30/98,
collateralized by $190,000
U.S. Treasury Notes
5.50% due 3/31/03,
market value $192,425
and $4,850,000
U.S. Treasury Notes
6.25% due 02/15/03,
market value $5,096,466) ................ $ 5,175,000 $ 5,175,000
-----------
TOTAL REPURCHASE AGREEMENTS
(COST $16,302,000) ...................... 16,302,000
-----------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 103.91% (cost $128,642,459)............................. $153,912,912
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (3.91%).................................. (5,791,176)
------------
NET ASSETS APPLICABLE TO 7,839,785 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $18.89 PER SHARE - 100.00%................................................ $148,121,736
============
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $0.01 par value, 1,000,000,000 shares authorized to the Fund
with 50,000,000 shares allocated to the Series.......................................... $117,126,761
Undistributed net investment income........................................................ 12,396
Accumulated net realized gain on investments............................................... 5,712,126
Net unrealized appreciation of investments................................................. 25,270,453
------------
Total net assets........................................................................... $148,121,736
------------
</TABLE>
- -------------------
*Non-income producing security.
+Security is partially or fully on loan.
See accompanying notes
4
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-DELCAP SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK - 92.37%
BANKING, FINANCE, & INSURANCE - 13.91%
ACE Limited ................................. 39,100 $ 1,524,900
Ambac Financial Group ....................... 26,200 1,532,700
Bank of Boston .............................. 12,400 689,750
Blanch(E.W.)Holdings ........................ 54,500 2,002,875
FINOVA Group ................................ 21,100 1,194,788
FIRST AMERICAN (TENNESSEE) .................. 73,500 3,539,484
*Heller Financial ............................ 44,100 1,323,000
+Household International ..................... 34,700 1,726,325
National City ............................... 12,300 873,300
PartnerRe ................................... 18,000 918,000
Peoples Heritage Financial Group ............ 75,700 1,790,778
-----------
17,115,900
-----------
BUILDINGS & MATERIALS - 0.34%
*Dal-Tile International ...................... 6,300 61,819
*J. Ray McDermott, S.A ....................... 8,700 361,050
-----------
422,869
-----------
CABLE, MEDIA, & PUBLISHING - 6.75%
*Chancellor Media Class A .................... 34,600 1,718,106
+*Jacor Communications ........................ 23,200 1,370,250
Lamar Advertising ........................... 31,100 1,109,881
*Snyder Communications ....................... 62,900 2,767,600
*World Color Press ........................... 38,300 1,340,500
-----------
8,306,337
-----------
COMPUTERS & TECHNOLOGY - 19.57%
+12 Technologies ............................. 40,800 1,435,650
+*Acxiom ...................................... 63,200 1,581,975
+BMC SOFTWARE ................................ 59,500 3,092,141
Citrix Systems .............................. 12,400 848,238
*COMPUWARE ................................... 62,100 3,172,922
+*DST Systems ................................. 12,200 683,200
*Fore Systems ................................ 60,900 1,611,947
+*J.D. Edwards ................................ 40,300 1,730,381
Linear Technology ........................... 24,900 1,501,781
<PAGE>
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
COMPUTERS & TECHNOLOGY (CONTINUED)
*Network Appliance .............................. 15,700 $ 610,828
+Network Associates ............................. 24,850 1,188,917
*PLATINUM Technology ............................ 83,700 2,393,297
*PMC - Sierra ................................... 14,600 683,463
*Sterling Commerce .............................. 46,319 2,246,451
*SunGuard Data Systems .......................... 33,600 1,289,400
-----------
24,070,591
-----------
CONSUMER PRODUCTS - 3.12%
*Gemstar International Group Limited ............ 58,600 2,184,681
*Henry Schein ................................... 36,000 1,653,750
-----------
3,838,431
-----------
ELECTRONICS & ELECTRICAL EQUIPMENT - 2.67%
+*Analog Devices ................................. 45,700 1,122,506
+*MMC Networks ................................... 40,800 1,299,225
*Xilinx ......................................... 25,200 857,587
-----------
3,279,318
-----------
ENVIRONMENTAL SERVICES - 2.20%
*Republic Services Class A ...................... 12,900 309,600
+*USA Waste Services ............................. 48,548 2,397,033
-----------
2,706,633
-----------
FOOD, BEVERAGE, & TOBACCO - 2.43%
*Aurora Foods ................................... 22,000 464,750
Food Lion ...................................... 42,800 433,350
Food Lion Class A .............................. 69,300 734,147
+*Starbucks ...................................... 25,400 1,356,519
-----------
2,988,766
-----------
HEALTHCARE & PHARMACEUTICALS - 6.82%
*HEALTH MANAGEMENT ASSOCIATES
CLASS A ........................................ 128,418 4,293,960
+*HEALTHSOUTH .................................... 59,400 1,585,238
+*Phycor ......................................... 67,600 1,117,512
*Quorum Health Group ............................ 52,500 1,389,609
-----------
8,386,319
-----------
- ------------
Top 10 stock holdings, representing 29.0% of net assets, are printed in
boldface.
5
<PAGE>
DELCAP SERIES
STATEMENT OF NET ASSETS (CONTINUED)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
LEISURE, LODGING & ENTERTAINMENT - 5.98%
*OUTBACK STEAKHOUSE ........................... 80,600 $ 3,140,881
+*Papa John's International .................... 59,300 2,340,497
+*Prime Hospitality ............................ 55,300 964,294
Royal Caribbean Cruises ...................... 11,500 914,250
-----------
7,359,922
-----------
RETAIL - 10.38%
BED BATH & BEYOND ............................ 80,300 4,163,053
*CompUSA ...................................... 37,100 670,119
+Fastenal ..................................... 23,900 1,110,603
*Guitar Center ................................ 10,500 316,969
KOHL'S ....................................... 56,000 2,905,000
+STAPLES ...................................... 124,200 3,597,919
-----------
12,763,663
-----------
REAL ESTATE - 0.62%
*Catellus Development ......................... 43,200 764,100
-----------
764,100
-----------
TELECOMMUNICATIONS - 9.79%
+*ASCEND COMMUNICATIONS ........................ 79,900 3,957,547
+Clear Channel Communications ................. 23,700 2,586,263
*Heftel Broadcasting .......................... 19,900 888,659
*Pacific Gateway Exchange ..................... 18,300 733,716
+Star Telecommunications ...................... 75,900 1,695,891
+*Tellabs ...................................... 30,500 2,183,609
-----------
12,045,685
-----------
TEXTILES, APPAREL & FURNITURE - 1.09%
*Jones Apparel Group .......................... 36,700 1,341,844
-----------
1,341,844
-----------
TRANSPORTATION & SHIPPING - 1.65%
+Gatx ......................................... 29,600 1,298,700
Knight Transportation ........................ 37,800 730,012
-----------
2,028,712
-----------
UTILITIES - 3.11%
*AES .......................................... 72,794 3,826,235
-----------
3,826,235
-----------
MISCELLANEOUS - 1.94%
*Cendant ...................................... 59,650 1,245,194
*Cornell Corrections .......................... 39,500 829,500
+Personnel Group of America ................... 15,500 310,000
-----------
2,384,694
-----------
TOTAL COMMON STOCK
(COST $87,409,360) ........................... 113,630,019
-----------
6
<PAGE>
DELCAP SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
--------- ---------
REPURCHASE AGREEMENTS - 8.21%
With Chase Manhattan 5.85%
07/01/98 (dated 06/30/98,
collateralized by $3,764,000
U.S. Treasury Notes
5.375% due 06/30/03,
market value $3,782,221) ................ $ 3,689,000 $ 3,689,000
With JP Morgan Securities 5.75%
07/01/98 (dated 06/30/98,
collateralized by $3,006,000
U.S. Treasury Notes
6.25% due 02/15/03,
market value $3,159,108
and $118,000
U.S.Treasury Notes
5.50% due 03/31/03,
market value $119,277) .................. 3,208,000 3,208,000
With PaineWebber 5.75%
07/01/98 (dated 06/30/98,
collateralized by $1,077,000
U.S. Treasury Notes 5.875%
due 01/31/99, market value
$1,105,547 and $2,110,000
U.S. Treasury Notes 6.00%
due 08/31/99,
market value $2,167,492) ................ $ 3,208,000 $ 3,208,000
-----------
TOTAL REPURCHASE AGREEMENTS
(COST $10,105,000) ...................... 10,105,000
-----------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 100.58% (COST $97,514,360)............................ $123,735,019
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (0.58%)................................ (714,042)
------------
NET ASSETS APPLICABLE TO 6,936,780 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $17.73 PER SHARE - 100.00%.............................................. $123,020,977
============
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock $0.01 par value, 1,000,000,000 shares authorized to the Fund with
50,000,000 shares allocated to the Series............................................. $ 91,670,009
Undistributed net investment loss........................................................ (133,927)
Accumulated net realized gain on investments............................................. 5,264,236
Net unrealized appreciation on investments............................................... 26,220,659
------------
Total net assets......................................................................... $123,020,977
============
</TABLE>
- ------------
*Non-income producing security.
+Security is partially or fully on loan.
See accompanying notes
7
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-SMALL CAP VALUE SERIES (FORMERLY VALUE SERIES)
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK - 97.30%
AEROSPACE & DEFENSE - 0.77%
Cordant Technologies .......................... 17,100 $ 788,738
-----------
788,738
-----------
AUTOMOBILES & AUTOMOTIVE PARTS - 3.44%
Arvin Industries .............................. 35,800 1,299,988
CLARCOR ....................................... 50,750 1,065,750
Federal Signal ................................ 47,100 1,145,119
-----------
3,510,857
-----------
BANKING, FINANCE & INSURANCE - 21.57%
Arm Financial Group Class A ................... 48,400 1,070,850
*AVIS RENT-A-CAR ............................... 72,300 1,789,425
CMAC Investment ............................... 27,000 1,660,500
ENHANCE FINANCIAL
SERVICES GROUP ............................. 56,000 1,890,000
Everest Reinsurance Holdings .................. 30,800 1,183,875
*Farm Family Holdings .......................... 35,000 1,362,813
*Financial Federal ............................. 56,350 1,510,884
HORACE MANN EDUCATORS ......................... 67,200 2,318,400
Keystone Financial ............................ 20,150 743,031
M & T Bank .................................... 1,725 955,650
NAC RE Group .................................. 19,000 1,014,125
North Fork Bancorporation ..................... 61,750 1,509,016
Peoples Heritage Financial Group .............. 63,100 1,492,709
SCPIE Holdings ................................ 18,500 626,688
Union Planters ................................ 26,100 1,535,006
Westamerica Bancorporation .................... 41,300 1,331,925
-----------
21,994,897
-----------
BUILDINGS & MATERIALS - 3.70%
Chicago Bridge and Iron ....................... 42,900 664,950
D.R. Horton ................................... 73,400 1,532,225
*Jacobs Engineering Group ...................... 48,900 1,570,913
-----------
3,768,088
-----------
CABLE, MEDIA & PUBLISHING - 0.68%
Cadmus Communications ......................... 28,600 695,338
-----------
695,338
-----------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
CHEMICALS - 3.51%
A. Schulman ................................... 33,500 $ 653,250
Ferro ......................................... 28,700 726,469
Lawter International .......................... 56,500 614,438
*Scotts ........................................ 42,500 1,583,125
----------
3,577,282
----------
COMPUTERS & TECHNOLOGY - 5.54%
Novellus Systems .............................. 20,000 714,375
*Quantum ....................................... 27,200 563,550
SCI Systems ................................... 28,100 1,057,263
SCIENTIFIC-ATLANTA ............................ 75,400 1,913,275
*SpeedFam International ........................ 22,600 416,688
*Synopsys ...................................... 21,500 984,297
----------
5,649,448
----------
ELECTRONICS & ELECTRICAL EQUIPMENT - 1.28%
Kuhlman ....................................... 33,000 1,305,563
----------
1,305,563
----------
ENERGY - 8.02%
Nicor ......................................... 25,000 1,003,125
*Oceaneering International ..................... 81,100 1,439,525
*Offshore Logistics ............................ 22,600 403,269
*Pool Energy Services .......................... 43,300 641,381
*Seagull Energy ................................ 67,400 1,116,313
*Seitel ........................................ 68,900 1,115,319
*Swift Energy .................................. 64,870 1,033,866
Vintage Petroleum ............................. 75,600 1,426,950
----------
8,179,748
----------
FOOD, BEVERAGE & TOBACCO - 2.08%
*Corn Products ................................. 39,300 1,331,288
Universal Foods ............................... 35,600 789,875
----------
2,121,163
----------
HEALTHCARE & PHARMANEUTICALS - 4.22%
Arrow International ........................... 35,100 970,734
*Marquette Medical Systems ..................... 54,900 1,408,528
*TRIGON HEALTHCARE ............................. 53,200 1,925,175
----------
4,304,437
----------
- ----------
Top 10 stock holdings, representing 19.3% of net assets, are printed in
boldface.
8
<PAGE>
SMALL CAP VALUE SERIES
STATEMENT OF NET ASSETS (CONTINUED)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
INDUSTRIAL MACHINERY - 4.79%
Columbus McKinnon ............................... 44,400 $1,187,700
*Global Industries Technology .................... 45,600 655,500
IDEX ............................................ 35,850 1,236,825
Regal-Beloit .................................... 40,300 1,158,625
Watts Industries ................................ 31,100 649,213
----------
4,887,863
----------
LEISURE, LODGING & ENTERTAINMENT - 4.78%
American General Hospitality .................... 48,000 1,020,000
*Hollywood Park .................................. 37,500 473,438
King World Productions .......................... 62,100 1,583,550
VIAD ............................................ 64,700 1,795,425
----------
4,872,413
----------
METALS & MINING - 0.78%
*Lone Star Technologies .......................... 52,300 797,575
----------
797,575
----------
PAPER & FOREST PRODUCTS - 3.40%
Caraustar Industries ............................ 27,800 798,381
Chesapeake ...................................... 20,600 802,113
Glatfelter (P.H.) ............................... 57,400 907,638
Rayonier ........................................ 20,900 961,400
----------
3,469,532
----------
REAL ESTATE - 12.04%
Cabot Industrial Trust .......................... 59,200 1,280,200
Chateau Communities ............................. 27,716 796,829
Duke Realty Investments ......................... 41,100 973,556
Excel Legacy .................................... 35,200 154,880
*Excel Realty Trust .............................. 38,600 1,116,988
Mack-Cali Realty ................................ 33,600 1,155,000
Pan Pacific Retail Properties ................... 59,300 1,208,238
Patriot American Hospitality .................... 55,632 1,331,691
<PAGE>
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
REAL ESTATE (CONTINUED)
Prentiss Properties Trust ..................... 52,500 $ 1,276,406
Public Storage ................................ 33,000 924,000
Reckson Associates Realty ..................... 56,300 1,330,088
Reckson Service Industries .................... 8,832 30,029
Starwood Hotels & Resorts Trust ............... 14,450 698,116
-----------
12,276,021
-----------
RETAIL - 4.38%
*BJ's Wholesale Club ........................... 35,900 1,458,438
Casey's General Stores ........................ 16,600 275,456
*Sports Authority .............................. 54,700 817,081
*ZALE .......................................... 60,100 1,911,931
-----------
4,462,906
-----------
TEXTILES, APPAREL & FURNITURE - 3.91%
*Furniture Brands International ................ 29,900 839,069
KELLWOOD ...................................... 50,900 1,819,675
*Quaker Fabric ................................. 52,500 756,328
*Synthetic Industries .......................... 39,100 570,616
-----------
3,985,688
-----------
TRANSPORTATION & SHIPPING - 5.00%
*MESABA HOLDINGS ............................... 108,000 2,490,750
*M.S. Carriers ................................. 41,900 1,133,919
US Freightways ................................ 44,900 1,474,684
-----------
5,099,353
-----------
UTILITIES - 3.41%
AMERICAN WATER WORKS .......................... 59,400 1,841,400
Public Service Company of
New Mexico.................................... 33,100 750,956
Sierra Pacific Resources ...................... 24,400 886,025
-----------
3,478,381
-----------
TOTAL COMMON STOCK
(COST $86,529,212) ............................ 99,225,291
-----------
9
<PAGE>
SMALL CAP VALUE SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
--------- ---------
REPURCHASE AGREEMENTS - 4.88%
With Chase Manhattan 5.85%
07/01/98 (dated 06/30/98,
collateralized by $1,865,000
U.S. Treasury Notes
5.375% due 06/30/03,
market value $1,855,982) .................... $1,819,000 $1,819,000
With JP Morgan Securities 5.75%
07/01/98 (dated 06/30/98,
collateralized by $1,482,000
U.S. Treasury Notes
6.25% due 02/15/03,
market value $1,557,514,
and $58,000 U.S. Treasury Notes
5.50% due 03/31/03,
market value $58,806) ....................... 1,581,000 1,581,000
With PaineWebber 5.75% 07/01/98
(dated 06/30/98, collateralized by
$531,000 U.S. Treasury Notes
5.875% due 01/31/99,
market value $545,060, and
$1,040,000 U.S. Treasury Notes
6.00% due 08/31/99,
market value $1,068,624) .................... $1,582,000 $1,582,000
----------
TOTAL REPURCHASE AGREEMENTS
(COST $4,982,000) ........................... 4,982,000
----------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 102.18% (COST $91,511,212)................................... $104,207,291
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (2.18%)....................................... (2,223,869)
------------
NET ASSETS APPLICABLE TO 5,855,329 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $17.42 PER SHARE - 100.00%..................................................... $101,983,422
============
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $0.01 par value 1,000,000,000 shares authorized to the Fund with
50,000,000 shares allocated to the Series....................................................... $ 87,990,962
Undistributed net investment income............................................................. 663,059
Accumulated net realized gain on investments.................................................... 633,322
Net unrealized appreciation of investments...................................................... 12,696,079
------------
Total net assets................................................................................ $101,983,422
============
</TABLE>
- ------------
*Non-income producing security
ADR - American Depository Receipt
See accompanying notes
10
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-SOCIAL AWARENESS SERIES
(FORMERLY QUANTUM SERIES)
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK - 92.27%
AUTOMOBILES & AUTOMOTIVE PARTS - 0.10%
PACCAR ......................................... 300 $ 15,647
----------
15,647
----------
BANKING & FINANCE - 19.79%
AmSouth Bancorporation ......................... 2,970 116,758
Bank of Boston ................................. 3,140 174,663
BankAmerica .................................... 1,635 141,325
Bankers Trust New York ......................... 1,400 162,488
BEAR STEARNS ................................... 3,675 209,016
CHASE MANHATTAN ................................ 3,810 287,655
City National .................................. 4,025 148,673
Comerica ....................................... 2,662 176,357
Edwards (A.G.) ................................. 3,245 138,521
First Chicago NBD .............................. 440 38,995
First Union .................................... 3,170 184,653
Mellon Bank .................................... 2,105 146,561
National City .................................. 1,611 114,381
NationsBank .................................... 850 65,025
PNC Financial Group ............................ 1,800 96,863
Paine Webber Group ............................. 3,870 165,926
Republic New York .............................. 2,500 157,344
SLM Holding .................................... 3,002 147,098
T. Rowe Price Associates ....................... 2,200 82,638
TRAVELERS GROUP ................................ 4,590 278,269
----------
3,033,209
----------
BUILDINGS & MATERIALS - 2.01%
Kaufman & Broad Home ........................... 5,200 165,100
Masco .......................................... 1,300 78,650
Oakwood Homes .................................. 2,150 64,500
----------
308,250
----------
CABLE, MEDIA & PUBLISHING - 5.48%
Dun & Bradstreet ............................... 4,805 173,581
Ennis Business Forms ........................... 715 8,312
Gannett ........................................ 2,070 147,099
McGraw-Hill .................................... 1,800 146,813
New York Times ................................. 1,550 122,838
Omnicom Group .................................. 2,400 119,700
Reynolds & Reynolds Class A .................... 6,700 121,856
----------
840,199
----------
CHEMICALS - 0.17%
International Flavors & Fragrances ............. 585 25,411
----------
25,411
----------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
COMPUTERS & TECHNOLGY - 11.42%
American Power Conversion .................. 4,925 $ 147,134
Apple Computer ............................. 5,800 166,569
Cisco Systems .............................. 900 82,884
Dell Computer .............................. 400 37,113
Deluxe ..................................... 3,315 118,718
EMC ........................................ 870 38,987
HBO ........................................ 5,280 186,285
LEXMARK INTERNATIONAL GROUP A .............. 3,600 219,600
MICROSOFT .................................. 2,280 247,166
PeopleSoft ................................. 2,400 112,725
Pitney Bowes ............................... 1,500 72,188
Storage Technology ......................... 3,840 166,560
Symantec ................................... 5,900 153,769
----------
1,749,698
----------
CONSUMER PRODUCTS - 2.33%
Avon Products .............................. 1,130 87,575
Brinker International ...................... 8,600 165,550
Clorox ..................................... 1,090 103,959
----------
357,084
----------
ELECTRONICS & ELECTRICAL
EQUIPMENT - 1.21%
Solectron .................................. 3,700 155,631
Xerox ...................................... 300 30,488
----------
186,119
----------
ENERGY - 2.28%
Helmerich & Payne .......................... 4,780 106,355
Oryx Energy ................................ 2,610 57,746
Sun ........................................ 1,480 57,443
US Industries .............................. 5,140 127,215
----------
348,759
----------
ENVIRONMENTAL SERVICES - 1.03%
Republic Industries ........................ 6,300 157,500
----------
157,500
----------
FOOD, BEVERAGE & TOBACCO - 7.53%
Agribrands International ................... 27 817
Campbell Soup .............................. 1,790 95,094
Coca Cola .................................. 2,010 171,855
Fleming Companies .......................... 8,700 152,794
Flowers Industries ......................... 4,870 99,531
Hershey Foods .............................. 1,340 92,460
International Multifoods ................... 920 25,300
Interstate Bakeries ........................ 4,570 151,667
- -----------
Top 10 stock holdings, representing 17.0% of net assets, are printed in
boldface.
11
<PAGE>
Social Awareness Series
Statement of Net Assets (Continued)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (Continued)
FOOD, BEVERAGE & TOBACCO (CONTINUED)
McCormick and Company ........................ 3,600 $ 128,588
Quaker Oats .................................. 2,425 133,223
Ralston-Purina Group ......................... 270 31,539
Universal Foods .............................. 3,200 71,000
----------
1,153,868
----------
HEALTHCARE & PHARMACEUTICALS - 8.12%
Agouron Pharmaceuticals ...................... 1,750 53,211
Arterial Vascular Engineering ................ 4,900 175,022
Beverly Enterprises .......................... 11,150 154,009
Block Drug ................................... 3,500 132,453
Health Management
Associates Class A ........................ 1,500 50,156
ICN Pharmaceuticals .......................... 3,200 146,200
Johnson & Johnson ............................ 1,425 105,094
Lincare Holdings ............................. 2,590 108,861
PharMerica ................................... 1,433 17,286
SCHERING-PLOUGH .............................. 3,300 302,363
----------
1,244,655
----------
INDUSTRIAL MACHINERY - 1.51%
Cincinnati Milacron .......................... 900 21,881
Deere & Co. .................................. 2,475 130,866
Ingersoll-Rand ............................... 1,800 79,313
----------
232,060
----------
INSURANCE - 6.54%
Allstate ..................................... 1,890 173,053
Conseco ...................................... 3,700 172,975
Marsh & McLennan ............................. 2,715 164,088
Mercury General .............................. 1,520 97,755
Mid Ocean .................................... 1,100 86,350
Old Republic International ................... 5,190 152,132
Reliance Group Holdings ...................... 8,870 155,225
----------
1,001,578
----------
LEISURE, LODGING
& ENTERTAINMENT - 0.22%
Fleetwood Enterprises ........................ 290 11,600
King World Productions ....................... 870 22,185
----------
33,785
----------
METALS & MINING - 0.56%
Cleveland Cliffs Iron ........................ 1,600 85,800
----------
85,800
----------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
PACKAGING & CONTAINERS - 0.12%
Sealed Air ................................... 500 $ 18,375
-----------
18,375
-----------
RETAIL - 8.74%
CVS Corporation .............................. 2,850 110,972
Fingerhut .................................... 5,200 171,600
Gap .......................................... 2,142 132,001
Jostens ...................................... 7,245 174,786
Neiman-Marcus Group .......................... 2,000 86,875
Pier 1 Imports ............................... 6,500 155,188
Ross Stores .................................. 3,930 169,481
Safeway ...................................... 3,260 132,641
TJX .......................................... 8,520 205,545
-----------
1,339,089
-----------
TELECOMMUNICATIONS - 10.16%
ALLTEL ....................................... 4,750 220,875
AT&T ......................................... 5,195 296,764
AMERITECH .................................... 4,650 208,669
BELLSOUTH .................................... 5,090 341,666
SBC Communications ........................... 4,590 183,600
Tellabs ...................................... 2,000 143,187
U.S. West Communications Group ............... 3,470 163,090
-----------
1,557,851
-----------
TEXTILES, APPAREL & FURNITURE - 0.96%
Miller (Herman) .............................. 1,400 33,994
Tommy Hilfiger ............................... 1,820 113,750
-----------
147,744
-----------
TRANSPORTATION & SHIPPING - 1.13%
AMR .......................................... 1,820 151,515
UAL .......................................... 280 21,833
-----------
173,348
-----------
MISCELLANEOUS - 0.86%
Input/Output ................................. 7,400 131,813
-----------
131,813
-----------
TOTAL COMMON STOCK
(COST $12,072,529) ........................ $14,141,842
-----------
12
<PAGE>
SOCIAL AWARENESS SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------
REPURCHASE AGREEMENTS - 7.43%
With Chase Manhattan 5.85%
7/01/98 (dated 6/30/98
collateralized by $426,000
U.S. Treasury Notes
5.375% due 6/30/03,
market value $423,948) .................... $ 416,000 $ 416,000
With J.P. Morgan Securties 5.75%
7/01/98 (dated 6/30/98
collateralized by $339,000
U.S. Treasury Notes
6.25% due 2/15/03,
market value $355,771
and $13,000 U.S. Treasury Notes
5.50% due 3/31/03,
market value $13,433) ..................... 361,000 361,000
With PaineWebber 5.75%
7/01/98 (dated 6/30/98
collateralized by $238,000
U.S. Treasury Notes
6.00% due 8/15/99,
market value $244,098
and $121,000 U.S. Treasury Notes
5.875% due 1/31/99,
market value $124,504) .................... $ 361,000 $ 361,000
----------
TOTAL REPURCHASE AGREEMENTS
(COST $1,138,000) ......................... 1,138,000
----------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 99.70% (COST $13,210,529)............................................... $15,279,842
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.30%.................................................... 46,205
-----------
NET ASSETS APPLICABLE TO 1,059,363 SHARES ($0.01 PAR VALUE)
OUTSTANDING; EQUIVALENT TO $14.47 PER SHARE - 100.00%................................................... $15,326,047
===========
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $0.01 par value, 1,000,000,000 shares authorized to the Fund with 50,000,000 shares
allocated to the Series................................................................................. $13,228,158
Undistributed net investment income........................................................................ 51,490
Accumulated net realized loss on investments............................................................... (22,914)
Net unrealized appreciation of investments................................................................. 2,069,313
-----------
Total net assets........................................................................................... $15,326,047
===========
See accompanying notes
</TABLE>
13
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-DEVON SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK - 91.30%
AEROSPACE & DEFENSE - 0.62%
GenCorp ....................................... 9,000 $ 227,250
----------
227,250
----------
AUTOMOBILES &
AUTOMOTIVE PARTS - 1.64%
Danaher ....................................... 16,400 601,675
----------
601,675
----------
BANKING, FINANCE
& INSURANCE - 19.61%
AFLAC ......................................... 31,900 966,969
American International Group .................. 3,950 576,700
Chubb ......................................... 3,600 289,350
EQUIFAX ....................................... 38,400 1,394,400
FEDERAL HOME LOAN ............................. 32,300 1,520,119
Federal National Mortgage ..................... 6,200 376,650
Nationwide Financial Services
Class A ...................................... 9,700 494,700
PMI Group ..................................... 6,600 484,275
SAFECO ........................................ 8,400 381,412
Unum .......................................... 12,900 715,950
----------
7,200,525
----------
BUILDINGS & MATERIALS - 3.00%
MASCO ......................................... 18,200 1,101,100
----------
1,101,100
----------
CABLE, MEDIA & PUBLISHING - 1.02%
Wallace Computer Services ..................... 15,800 375,250
----------
375,250
----------
CHEMICALS - 1.87%
Valspar ....................................... 17,300 685,513
----------
685,513
----------
COMPUTERS & TECHNOLOGY - 3.49%
Hewlett-Packard ............................... 14,800 886,150
*SunGuard Data Systems ......................... 10,300 395,263
----------
1,281,413
----------
ELECTRONICS &
ELECTRICAL EQUIPMENT - 6.56%
Intel ......................................... 7,100 526,066
SYMBOL TECHNOLOGIES ........................... 39,150 1,477,913
Teleflex ...................................... 10,700 406,600
----------
2,410,579
----------
ENERGY - 3.53%
Compagnie Francaise de Petroleum Total ........ 7,200 470,700
Kerr-McGee .................................... 7,100 410,913
<PAGE>
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
ENERGY (CONTINUED)
Royal Dutch Petroleum ......................... 7,600 $ 416,575
----------
1,298,188
----------
ENVIRONMENTAL SERVICES - 3.50%
ECOLAB ........................................ 41,400 1,283,400
----------
1,283,400
----------
FOOD, BEVERAGE & TOBACCO - 7.47%
ConAgra ....................................... 15,100 478,481
Hannaford Brothers ............................ 11,400 501,600
Hershey Foods ................................. 5,200 358,800
Philip Morris ................................. 14,700 578,813
Ralston-Purina Group .......................... 2,300 268,669
Universal Foods ............................... 25,000 554,688
----------
2,741,051
----------
HEALTHCARE & PHARMACEUTICALS - 8.65%
AMERICAN HOME PRODUCTS ........................ 26,300 1,361,025
Johnson & Johnson ............................. 10,100 744,875
Tyco International ............................ 10,500 661,500
Nationwide Health Properties .................. 11,300 269,788
Sun Communities ............................... 4,200 139,125
----------
3,176,313
----------
PACKAGING & CONTAINERS - 0.24%
*Sealed Air .................................... 2,358 86,671
----------
86,671
----------
RETAIL - 9.63%
Intimate Brands ............................... 29,300 807,581
May Department Stores ......................... 4,800 314,400
RITE AID ...................................... 43,700 1,641,476
Sherwin-Williams .............................. 13,900 460,438
Developers Diversified Realty ................. 4,700 184,181
Storage USA ................................... 3,700 129,500
---------
3,537,576
---------
TELECOMMUNICATIONS - 4.59%
ALLTEL ........................................ 7,300 339,450
Ericsson (LM) Telefonaktiebolaget
ADR .......................................... 15,800 453,263
SBC COMMUNICATIONS ............................ 22,300 892,000
---------
1,684,713
---------
TEXTILES, APPAREL & FURNITURE - 5.75%
HON Industries ................................ 25,100 851,831
Hillenbrand Industries ........................ 11,600 696,000
Miller (Herman) ............................... 6,800 165,113
Newell ........................................ 8,000 398,500
---------
2,111,444
---------
- -----------
Top 10 stock holdings, representing 34.3% of net assets, are printed in
boldface.
14
<PAGE>
DEVON SERIES
STATEMENT OF NET ASSETS (CONTINUED)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
UTILITIES - 2.41%
CMS Energy .................................. 9,500 $ 418,000
Edison International ........................ 5,800 171,463
PacifiCorp .................................. 13,100 296,388
-----------
885,851
-----------
MISCELLANEOUS - 7.72%
FEDERAL SIGNAL .............................. 39,900 970,069
Highwoods Properties ........................ 4,800 155,100
Pentair ..................................... 7,500 318,750
Service International ....................... 11,700 501,638
Stewart Enterprises ......................... 33,200 889,137
-----------
2,834,694
-----------
TOTAL COMMON STOCK
(COST $30,688,675) .......................... $33,523,206
-----------
CONVERTIBLE PREFERRED STOCK - 0.61%
METALS & MINING - 0.37%
*Freeport-McMoRan
Copper & Gold 5.00% ......................... 7,000 136,500
-----------
136,500
-----------
PACKAGING & CONTAINERS - 0.24%
*Sealed Air-$2.00 4/1/08 Series A ............ 2,090 87,780
-----------
87,780
-----------
TOTAL CONVERTIBLE PREFERRED STOCK
(COST $266,851) ............................. 224,280
-----------
PRINCIPAL MARKET
AMOUNT VALUE
----------- ---------
REPURCHASE AGREEMENTS - 8.83%
With Chase Manhattan 5.85%
07/01/98 (dated 06/30/98,
collateralized by $1,213,000
U.S. Treasury Notes
5.375% due 06/30/03,
market value $1,207,022) .................. $1,183,000 $1,183,000
With JP Morgan Securities 5.75%
07/01/98 (dated 6/30/98,
collateralized by $964,000
U.S. Treasury Notes
6.25% due 02/15/03,
market value $1,013,000
and $38,000 U.S. Treasury Notes
5.50% due 03/31/03,
market value $38,244) ..................... 1,028,000 1,028,000
With PaineWebber 5.75%
07/01/98 (dated 06/30/98,
collateralized by $677,000
U.S. Treasury Notes
6.00% due 08/15/99,
market value $694,970
and $345,000 U.S. Treasury Notes
5.875% due 01/31/99,
market value $354,475) .................... 1,029,000 1,029,000
----------
TOTAL REPURCHASE AGREEMENTS
(COST $3,240,000) ......................... 3,240,000
----------
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES (COST $34,195,526) - 100.74%.............................. $36,987,486
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (0.74%).................................. (270,371)
-----------
NET ASSETS APPLICABLE TO 2,637,673 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $13.92 PER SHARE - 100.00%.................................................. $36,717,115
===========
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $0.01 par value, 1,000,000,000 shares authorized to the Fund with
50,000,000 shares allocated to the Series................................................. $33,210,693
Undistributed net investment income........................................................ 175,117
Accumulated net realized gain on investments............................................... 539,345
Net unrealized appreciation of investments................................................. 2,791,960
-----------
Total net assets........................................................................... $36,717,115
===========
</TABLE>
- ------------
*Non-income producing security
ADR - American Depository Receipt
See accompanying notes
15
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-DECATUR TOTAL RETURN SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK - 97.23%
AUTOMOBILES & AUTOMOTIVE PARTS - 5.51%
Cooper Industries ........................... 72,900 $ 4,004,944
Ford Motor .................................. 143,900 8,490,100
General Motors .............................. 121,100 8,090,994
Tenneco ..................................... 234,400 8,921,850
------------
29,507,888
------------
BANKING, FINANCE
& INSURANCE - 22.24%
+AMERICAN GENERAL ............................ 158,700 11,297,456
Aon ......................................... 138,625 9,738,406
BANK OF BOSTON .............................. 197,200 10,969,250
BankAmerica ................................. 97,900 8,462,231
Crestar Financial ........................... 146,600 7,998,863
First Chicago NBD ........................... 101,800 9,022,025
+First Union ................................. 170,826 9,950,615
Fleet Financial Group ....................... 72,500 6,053,750
Mellon Bank ................................. 100,700 7,011,238
+Mercantile Bancorporation ................... 120,100 6,050,038
National City ............................... 83,500 5,928,500
PNC Financial Group ......................... 15,400 828,713
SAFECO ...................................... 124,100 5,634,916
+St. Paul .................................... 184,600 7,764,738
Summit Bancorp .............................. 124,575 5,917,313
+U.S. Bancorp ................................ 151,500 6,514,500
------------
119,142,552
------------
CABLE, MEDIA & PUBLISHING - 3.02%
MCGRAW-HILL ................................. 198,300 16,173,844
------------
16,173,844
------------
CHEMICALS - 5.72%
duPont(E.I.)deNemours ....................... 82,100 6,126,713
+Hercules .................................... 41,200 1,694,350
HOECHST ADR ................................. 250,100 12,411,213
+Imperial Chemical ADR ....................... 156,600 10,100,700
PPG Industries .............................. 4,500 313,031
------------
30,646,007
------------
CONSUMER PRODUCTS - 3.38%
Kimberly-Clark .............................. 153,800 7,055,575
+MINNESOTA MINING &
MANUFACTURING .............................. 134,700 11,070,656
------------
18,126,231
-----------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
ELECTRONICS & ELECTRICAL
EQUIPMENT - 4.85%
+AMP ......................................... 169,500 $ 5,826,563
Eaton ....................................... 46,800 3,638,700
Emerson Electric ............................ 170,700 10,295,344
+Thomas & Betts .............................. 126,400 6,225,200
-----------
25,985,807
-----------
ENERGY - 11.20%
Atlantic Richfield .......................... 129,900 10,148,438
British Petroleum ADR ....................... 81,342 7,178,467
+Chevron ..................................... 126,500 10,507,406
Consolidated Natural Gas .................... 134,500 7,918,688
+Enron ....................................... 126,700 6,849,719
USX-Marathon Group .......................... 237,100 8,135,494
+Williams .................................... 274,900 9,277,875
-----------
60,016,087
-----------
ENVIROMENTAL SERVICES - 1.52%
+Browning Ferris ............................. 233,980 8,130,805
-----------
8,130,805
-----------
FOOD, BEVERAGE & TOBACCO - 9.51%
BESTFOODS ................................... 238,800 13,865,325
ConAgra ..................................... 302,800 9,594,975
Fortune Brands .............................. 273,900 10,528,031
Heinz (H.J.) ................................ 134,800 7,565,650
Philip Morris ............................... 239,200 9,418,500
-----------
50,972,481
-----------
HEALTHCARE & PHARMACEUTICALS - 9.67%
AMERICAN HOME PRODUCTS ...................... 275,200 14,241,600
BAXTER INTERNATIONAL ........................ 209,600 11,279,100
+Glaxo Wellcome ADR .......................... 126,000 7,536,375
Merck & Company ............................. 58,500 7,824,375
Pharmacia & Upjohn .......................... 237,400 10,950,075
-----------
51,831,525
-----------
METALS & MINING - 2.32%
+Allegheny Teledyne .......................... 295,500 6,759,563
+Aluminum Company of America ................. 86,300 5,690,406
-----------
12,449,969
-----------
PAPER & FOREST PRODUCTS - 1.97%
+Union Camp .................................. 105,700 5,245,363
Weyerhaeuser ................................ 114,300 5,279,231
-----------
10,524,594
-----------
- ------------------
Top 10 stock holdings, representing 23.6% of net assets, are printed in
boldface.
16
<PAGE>
DECATUR TOTAL RETURN SERIES
STATEMENT OF NET ASSETS (CONTINUED)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
RETAIL - 4.18%
MAY DEPARTMENT STORES ..................... 176,200 $ 11,541,100
+Penney (J.C.) ............................. 149,900 10,839,644
------------
22,380,744
------------
TELECOMMUNICATIONS - 7.55%
AT&T ...................................... 70,400 4,021,600
Bell Atlantic ............................. 167,700 7,651,313
+Cable & Wireless ADR ...................... 159,100 5,866,813
Frontier .................................. 265,300 8,356,950
GTE ....................................... 145,800 8,110,125
+SBC Communications ........................ 161,400 6,456,000
------------
40,462,801
------------
TRANSPORTATION & SHIPPING - 0.78%
+British Airways ADR ....................... 34,100 3,667,881
Norfolk Southern .......................... 17,100 509,794
------------
4,177,675
------------
UTILITIES - 1.30%
+Southern .................................. 252,200 6,982,788
------------
6,982,788
------------
MISCELLANEOUS - 2.51%
PITNEY BOWES .............................. 278,900 13,422,063
------------
13,422,063
------------
TOTAL COMMON STOCK
(COST $451,552,825) ....................... $520,933,861
------------
PRINCIPAL MARKET
AMOUNT VALUE
--------- -------
REPURCHASE AGREEMENTS - 2.62%
With Chase Manhattan 5.85%
07/01/98 (dated 06/30/98,
collateralized by $5,260,000
U.S. Treasury Notes
5.375% due 06/30/03,
market value $5,234,897) ................ $ 5,131,000 $ 5,131,000
With J.P. Morgan Securities 5.75%
07/01/98 (dated 06/30/98,
collateralized by $4,181,000
U.S. Treasury Notes
6.25% due 02/15/03,
market value $4,393,052, and
$164,000 U.S. Treasury Notes
5.50% due 03/31/03,
market value $165,866) .................. 4,460,000 4,460,000
With PaineWebber 5.75%
07/01/98 (dated 06/30/98,
collateralized by $1,498,000
U.S. Treasury Notes
5.875% due 01/31/99,
market value $1,537,372, and
$2,935,000 U.S. Treasury Notes
6.00% due 08/31/99,
market value $3,014,112) ................ 4,461,000 4,461,000
-----------
TOTAL REPURCHASE AGREEMENTS
(COST $14,052,000) ...................... 14,052,000
-----------
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 99.85% (COST $465,604,825).................................. $534,985,861
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.15%........................................ 803,734
------------
NET ASSETS APPLICABLE TO 27,704,927 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $19.34 PER SHARE - 100.00%....................................................... $535,789,595
============
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $0.01 par value, 1,000,000,000 shares authorized to the Fund with
50,000,000 shares allocated to the Series...................................................... $435,529,293
Undistributed net investment income............................................................ 1,914,174
Accumulated net realized gain on investments................................................... 28,965,092
Net unrealized appreciation of investments..................................................... 69,381,036
------------
Total net assets............................................................................... $535,789,595
============
</TABLE>
- -----------
+Security is partially or fully on loan.
ADR - American Depository Receipt
See accompanying notes
17
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-REIT SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK - 92.65%
HOTELS/DIVERSIFIED REITS - 17.82%
Capital Automotive .............................. 3,500 $ 49,766
*Catellus Development ............................ 3,000 53,063
Glenborough Realty Trust ........................ 2,300 60,663
Newhall Land & Farming .......................... 1,940 54,805
Patriot American Hospitality .................... 2,100 50,269
ROUSE ........................................... 2,250 70,734
STARWOOD HOTELS
& RESORTS TRUST ................................ 2,100 101,451
--------
440,751
--------
MALL REITS - 5.30%
General Growth Properties ....................... 1,700 63,538
Simon DeBartolo Group ........................... 2,080 67,600
--------
131,138
--------
MANUFACTURED HOUSING REITS - 4.50%
Chateau Communities ............................. 1,800 51,750
Sun Communities ................................. 1,800 59,625
--------
111,375
--------
MULTIFAMILY REITS - 17.34%
AVALON BAY COMMUNITIES .......................... 1,813 68,457
APARTMENT INVESTMENT
& MANAGEMENT ................................... 1,800 71,100
Camden Property Trust ........................... 2,300 68,425
Equity Residential Properties ................... 1,400 66,413
Essex Property Trust ............................ 2,000 62,000
Grove Property Trust ............................ 4,400 45,925
Pennsylvania Real Estate
Investment Trust ................................ 2,100 46,594
--------
428,914
--------
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
OFFICE/INDUSTRIAL REITS - 35.67%
AMB Property ................................ 2,400 $ 58,800
Alexandria R.E.Equities ..................... 2,000 59,875
CABOT INDUSTRIAL TRUST ...................... 3,200 69,200
CARRAMERICA REALTY .......................... 2,500 70,938
CRESCENT REAL ESTATE EQUITIES ............... 2,240 75,320
DUKE REALTY INVESTMENTS ..................... 2,900 68,694
EQUITY OFFICE PROPERTIES TRUST .............. 2,500 70,938
First Industrial Realty ..................... 2,000 63,500
Liberty Property Trust ...................... 1,900 48,569
Parkway Properties .......................... 1,400 41,300
Prentiss Properties Trust ................... 2,500 60,781
*Reckson Service Industries .................. 376 1,278
Reckson Associates Realty ................... 2,800 66,150
SL Green Realty ............................. 2,800 63,000
Spieker Properties .......................... 1,655 64,131
----------
882,474
----------
RETAIL STRIP CENTER REITS - 9.39%
Developers Diversified Realty ............... 1,400 54,863
Excel Realty Trust .......................... 1,700 49,194
JDN REALTY .................................. 2,300 73,313
Pan Pacific Retail Properties ............... 2,700 55,013
----------
232,383
----------
SELF STORAGE REITS - 2.63%
Public Storage .............................. 2,320 64,960
----------
64,960
----------
TOTAL COMMON STOCK
(COST $2,335,388) ........................... $2,291,995
----------
- -------------
Top 10 stock holdings, representing 29.9% of net assets, are printed in
boldface.
18
<PAGE>
REIT SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
--------- -------
REPURCHASE AGREEMENTS - 6.75%
With Chase Manhattan 5.85%
07/01/98 (dated 06/30/98,
collateralized by $63,000
U.S. Treasury Notes
5.375% due 06/30/03,
market value $62,214) ..................... $ 61,000 $ 61,000
With JP Morgan Securities 5.75%
07/01/98 (dated 6/30/98,
collateralized by $50,000
U.S. Treasury Notes
6.25% due 02/15/03,
market value $52,209 and
$2,000 U.S. Treasury Notes
5.50% due 03/31/03,
market value $1,971) ...................... 53,000 53,000
With PaineWebber 5.75%
07/01/98 (dated 06/30/98,
collateralized by $35,000
U.S. Treasury Notes
6.00% due 08/15/99,
market value $35,821 and
$18,000 U.S. Treasury Notes
5.875% due 01/31/99,
market value $18,271) ..................... $ 53,000 $ 53,000
--------
TOTAL REPURCHASE AGREEMENTS
(COST $167,000) ........................... 167,000
--------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 99.40% (COST $2,502,387).............................. $2,458,995
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.60%.................................. 14,757
----------
NET ASSETS APPLICABLE TO 251,239 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $9.85 PER SHARE - 100.00%............................................... $2,473,752
==========
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock $0.01 par value, 1,000,000,000 shares authorized to the Fund with
50,000,000 shares allocated to the Series.............................................. $2,494,270
Undistributed net investment income...................................................... 23,224
Accumulated net realized loss on investments............................................. (350)
Net unrealized depreciation of investments............................................... (43,392)
----------
Total net assets......................................................................... $2,473,752
==========
</TABLE>
- -----------
Reit: Real Estate Investment Trust
*Non-income producing security
See accompanying notes
19
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-DELAWARE SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK - 71.24%
AEROSPACE & DEFENSE - 0.50%
GenCorp ....................................... 32,900 $ 830,725
-----------
830,725
-----------
AUTOMOBILES & AUTOMOTIVE PARTS - 15.40%
+Danaher ....................................... 72,000 2,641,500
-----------
2,641,500
-----------
BANKING, FINANCE, & INSURANCE - 15.40%
AFLAC ......................................... 97,400 2,952,438
American International Group .................. 13,950 2,036,700
Chubb ......................................... 13,800 1,109,175
+EQUIFAX ....................................... 127,300 4,622,581
FEDERAL HOME LOAN ............................. 107,100 5,040,394
Federal National Mortgage ..................... 32,800 1,992,600
Nationwide Financial Services
Class A ...................................... 36,800 1,876,800
+PMI Group ..................................... 29,900 2,193,913
SAFECO ........................................ 31,400 1,425,756
+Unum .......................................... 40,700 2,258,850
-----------
25,509,207
-----------
BUILDINGS & MATERIALS - 3.11%
MASCO ......................................... 85,300 5,160,650
-----------
5,160,650
-----------
CHEMICALS- 1.28%
Valspar ....................................... 53,500 2,119,938
-----------
2,119,938
-----------
COMPUTERS & TECHNOLOGY - 3.23%
Hewlett-Packard ............................... 48,900 2,927,888
SunGuard Data Systems ......................... 15,500 594,813
Wallace Computer Services ..................... 76,700 1,821,625
-----------
5,344,326
-----------
CONSUMER PRODUCTS - 0.54%
General Electric .............................. 9,900 900,900
-----------
900,900
-----------
ELECTRONICS & ELECTRICAL EQUIPMENT - 4.87%
Intel ......................................... 25,000 1,852,344
SYMBOL TECHNOLOGIES ........................... 130,300 4,918,825
Teleflex ...................................... 34,000 1,292,000
-----------
8,063,169
-----------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
ENERGY - 2.82%
Compagnie Francaise de
Petroleum Total ............................ 29,558 $ 1,932,354
Kerr-McGee .................................. 24,400 1,412,150
+Royal Dutch Petroleum ....................... 24,300 1,331,944
-----------
4,676,448
-----------
ENVIROMENTAL SERVICES - 2.97%
ECOLAB ...................................... 158,300 4,907,300
-----------
4,907,300
-----------
FOOD, BEVERAGE & TOBACCO - 5.01%
+ConAgra ..................................... 55,900 1,771,331
Hannaford Brothers .......................... 26,100 1,148,400
Philip Morris ............................... 61,000 2,401,875
Ralston-Purina Group ........................ 12,100 1,413,431
Universal Foods ............................. 70,400 1,562,000
-----------
8,297,037
-----------
HEALTHCARE & PHARMACEUTICALS - 7.67%
AMERICAN HOME PRODUCTS ...................... 100,200 5,185,350
Johnson & Johnson ........................... 39,600 2,920,500
Stewart Enterprises ......................... 81,000 2,169,281
+Tyco International .......................... 38,600 2,431,800
-----------
12,706,931
-----------
PACKAGING & CONTAINERS - 0.32%
+Sealed Air .................................. 14,526 533,816
-----------
533,816
-----------
REAL ESTATE - 2.19%
Developers Diversified Realty ............... 18,700 732,806
Highwoods Properties ........................ 17,500 565,469
Nationwide Health Properties ................ 33,900 809,363
+Storage USA ................................. 20,800 728,000
Sun Communities ............................. 23,600 781,750
-----------
3,617,388
-----------
RETAIL - 7.34%
+INTIMATE BRANDS ............................. 108,600 2,993,288
May Department Stores ....................... 15,900 1,041,450
+RITE AID .................................... 159,100 5,976,194
Sherwin-Williams ............................ 64,600 2,139,875
-----------
12,150,807
-----------
- ---------------
Top 10 stock holdings, representing 27.0% of net assets, are printed in
boldface.
20
<PAGE>
DELAWARE SERIES
STATEMENT OF NET ASSETS (CONTINUED)
NUMBER MARKET
OF SHARES VALUE
--------- ----------
COMMON STOCK (CONTINUED)
TELECOMMUNICATIONS - 3.76%
+ALLTEL ...................................... 40,400 $ 1,878,600
Ericsson (LM) Telefonaktiebolaget
ADR ........................................ 49,000 1,405,688
+SBC COMMUNICATIONS .......................... 73,600 2,944,000
-----------
6,228,288
-----------
TEXTILES, APPAREL & FURNITURE - 3.95%
HON Industries .............................. 72,000 2,443,500
Hillenbrand Industries ...................... 38,400 2,304,000
Miller (Herman) ............................. 37,000 898,406
Newell ...................................... 18,100 901,606
-----------
6,547,512
-----------
UTILITIES - 1.14%
CMS Energy .................................. 32,000 1,408,000
+Edison International ........................ 16,000 473,000
-----------
1,881,000
-----------
MISCELLANEOUS - 3.55%
Federal Signal .............................. 112,100 2,725,431
Pentair ..................................... 27,600 1,173,000
+Service International ....................... 46,200 1,980,825
-----------
5,879,256
-----------
TOTAL COMMON STOCK
(COST $93,463,181) .......................... 117,996,198
-----------
CONVERTIBLE PREFERRED STOCK - 0.44%
METALS & MINING - 0.44%
Freeport-McMoRan Copper & Gold .............. 37,600 733,200
-----------
TOTAL CONVERTIBLE PREFERRED STOCK
(COST $898,510) ............................. 733,200
-----------
WARRANTS - 0.33%
Sealed Air .................................. 12,873 540,645
-----------
TOTAL WARRANTS (COST $575,221) .............. 540,645
-----------
PRINCIPAL MARKET
AMOUNT VALUE
--------- -------
ASSET BACKED SECURITIES - 4.82%
American Finance Home Equity
Series 94-2A1 6.95% 6/25/24 .................. $ 34,591 34,654
Series 92-5A 7.20% 2/15/08 ................... 70,508 71,269
Series 91-1A 8.00% 7/25/06 ................... 7,450 7,593
California Infrastructure PG&E
Series 97-1A4 6.16% 6/25/03 ................. 640,000 643,072
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
--------- -------
ASSET BACKED SECURITIES (CONTINUED)
Chase Manhattan RV Owner Trust
Series 1997-A A9 6.32% 12/15/08 ............... $ 145,000 $ 146,392
CIT RV Trust
Series 97-A A5 6.25% 11/17/08 ................. 570,000 573,078
Series 98-A A5 6.12% 7/15/14 .................. 535,000 541,520
EQCC Series 1998-2 A3F
6.23% 3/15/13 ................................. 500,000 500,156
First Plus Home Loan Trust
Series 98-3 A3 6.27% 5/10/13 .................. 650,000 651,828
First Union Residential Securitization
Tax Series 96-A2 6.46% 9/25/11 ................ 555,000 555,167
First USA Credit Card Master Trust
Series 97-10A 5.75% 9/17/03 ................... 125,000 125,038
MetLife Capital Equipment
Loan Trust Series 97-AA
6.85% 5/20/08 ................................. 420,000 431,634
NationsCredit Grantor Trust
Series 96-1 A 5.85% 9/15/11 ................... 181,597 180,307
Series 97-2 A1 6.35% 4/15/14 .................. 327,228 329,989
Neiman Marcus Group Series 95-1 A
7.60% 6/15/03 ................................. 180,000 185,953
Oakwood Mortgage Investors
Series 97C A3 6.65% 11/15/27 .................. 560,000 568,872
Standard Credit Card Master
Trust Series 94-4A 8.25% 11/7/03 .............. 600,000 641,311
The Money Store Home Equity Trust
Series 97-C AH5 6.59% 2/15/15 ................. 500,000 504,700
Series 97-AA9 7.235% 4/15/27 .................. 330,000 338,844
UCFC Home Equity Loan
Series 96-B1 A3 7.30% 4/15/14 ................. 460,000 462,760
World Omni Automobile Lease
Securitization Series 97-BA4
6.20% 11/25/03 ................................ 490,000 492,842
----------
TOTAL ASSET-BACKED SECURITIES
(COST $7,931,230) ............................. 7,986,979
----------
COLLATERALIZED MORTGAGE OBLIGATIONS - 5.00%
Asset Securitization Corporation
Series 97-D5 A2 6.81% 2/14/41 ................. 480,000 497,025
Series 97-D5 A3 6.864% 2/14/41 ................ 375,000 386,602
Series 96-D2 A1 6.92% 2/14/29 ................. 364,452 379,428
Series 96-D3 A1B 7.21% 10/13/26 ............... 360,000 378,394
21
<PAGE>
DELAWARE SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
--------- -------
COLLATERALIZED MORTGAGE
OBLIGATIONS (CONTINUED)
Series 97-D4 A1A 7.35% 4/14/29 .............. $ 221,796 $ 229,316
Series 97-MD7 A3 7.57% 1/13/30 .............. 400,000 432,563
Chase Commercial Mortgage Securities
Series 96-2 C 6.90% 11/19/06 ................ 250,000 253,438
GE Capital Mortgage Services
Series 94-2 A3 5.40% 1/25/09 ................ 69,776 69,518
Series 98-6 1A6 6.75% 4/25/28 ............... 380,000 379,763
LB Commercial Conduit Mortgage
Trust Series 98-Cl C 6.68% 2/18/08 .......... 470,000 473,819
Lehman Large Loan
Series 97-LLI A1 6.79% 6/12/04 .............. 438,444 450,022
Mortgage Capital Funding Conti Series
96-MC2 C 7.224% 9/20/06 ..................... 245,000 254,341
Series 96-MCI-D 7.80% 4/15/06 ............... 300,000 321,094
Nomura Asset Securities
Series 93-1 A1 6.68% 12/15/01 ............... 341,846 347,081
Series 96-MD5 A3 7.64% 4/13/36 .............. 340,000 368,156
Series 95-MD3 A1A 8.17% 8/4/20 .............. 319,686 332,224
Residential Accredit Loans
Series 98-QS9 A3 6.75% 8/25/28 .............. 400,000 401,938
Series 96-QS3 A13 7.29% 6/25/26 ............. 147,970 148,295
Series 96-QS2 A6 7.45% 4/25/23 .............. 445,000 453,135
Series 97-AS3 A3 7.50% 4/25/27 .............. 445,000 451,119
Series 97-QS6 A5 7.50% 6/25/12 .............. 356,458 372,526
Residential Funding Mortgage
Security I Series 98-S6 A6
6.75% 3/25/28 ............................... 510,000 509,283
Series 96-S9 7.25% 4/25/26 .................. 378,022 389,854
----------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS (COST $8,091,057) ............... 8,278,934
----------
CORPORATE BONDS - 4.50%
ABN-AMRO Bank NV 8.25% 8/1/09 80,000 90,000
Banco Santiago S.A. 7.00% 7/18/07 280,000 258,300
Commercial Credit 6.50% 8/1/04 450,000 455,625
Consumers Energy 6.38% 2/1/08 380,000 375,250
Continental Airlines pass thru
certificates 6.80% 1/2/09 395,000 401,419
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
--------- --------
CORPORATE BONDS (CONTINUED)
Credit Foncier de France
8.00% 1/14/02 .............................. $ 370,000 $ 392,663
Federal Express pass thru certificates
7.65% 1/15/14 .............................. 443,421 468,364
Firstar Capital Trust I
8.32% 12/15/26 ............................. 260,000 287,625
General Electric Capital
5.89% 5/11/01 .............................. 670,000 671,675
Health and Retirement Properties
6.75% 12/18/02 ............................. 400,000 402,500
MCI Communications 6.13% 4/15/02 .............. 350,000 349,563
Raytheon 5.95% 3/15/01 ........................ 350,000 350,000
+Sony 6.13% 3/4/03 ............................. 660,000 664,125
Southern Investments United Kingdom
unsec sr nts 6.38% 11/15/01 ................ 250,000 251,563
Summit Bank 6.75% 6/15/03 ..................... 320,000 326,800
+Travelers Property Casualty
6.75% 4/15/01 .............................. 775,000 790,500
U.S. Bancorp sub nts 8.13% 5/15/02 ............ 430,000 458,488
U.S. Bank N.A. 6.50% 2/1/08 ................... 450,000 457,875
----------
TOTAL CORPORATE BONDS
(COST $7,325,277) ............................. 7,452,335
----------
MORTGAGE-BACKED SECURITIES - 4.59%
Federal National Mortage Association
6.00% 3/1/11 to 4/1/13 ..................... 937,170 929,117
Federal National Mortage Association
6.50% 4/1/13 to 6/1/28 ..................... 4,525,084 4,529,060
Federal National Mortgage Association
7.00% 5/1/12 ............................... 496,000 506,385
Federal National Mortgage Association
7.50% 6/1/98 ............................... 404,139 415,253
Federal National Mortgage Association
9.50% 6/1/19 ............................... 197,203 212,610
Goverment National Mortgage
Association 6.50% 12/15/23
to 1/15/24 ................................. 86,755 87,108
Government National Mortgage
Association 7.00% 5/15/28 .................. 914,965 930,119
----------
TOTAL MORTGAGE-BACKED SECURITIES
(COST $7,563,531) ............................. 7,609,652
---------
22
<PAGE>
DELAWARE SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
--------- --------
MUNICIPAL BONDS - 0.23%
Philadelphia Pennsylvania Industrial
Development Authority Revenue
Series 97 6.49% 6/15/04 ..................... $ 371,71 $ 375,201
---------
TOTAL MUNICIPAL BONDS
(COST $371,716) ............................... 375,201
---------
U.S. TREASURY OBLIGATIONS - 5.25%
+U.S. Treasury Bond 7.50% 11/15/16 ............. 925,000 1,110,620
U.S. Treasury Note 5.38% 2/15/01 .............. 3,080,000 3,069,743
U.S. Treasury Note 5.50% 3/31/00 .............. 220,000 220,015
+U.S. Treasury Note 5.50% 2/15/08 .............. 2,195,000 2,193,222
+U.S. Treasury Note 5.75% 8/15/03 .............. 430,000 434,708
U.S. Treasury Note 6.26% 4/30/01 .............. 250,000 254,698
+U.S. Treasury Note 6.38% 8/15/27 .............. 1,285,000 1,413,309
---------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $8,559,305) ............................. 8,696,315
---------
REPURCHASE AGREEMENTS - 3.85%
With Chase Manhattan 5.85% 7/01/98
(dated 6/30/98 collateralized by
$2,388,000 U.S. Treasury Notes
5.375% due 06/30/03,
market value $2,376,417) .................... 2,329,000 2,329,000
With J.P. Morgan Securties 5.75%
7/01/98 (dated 6/30/98 collateralized
by $1,898,000 U.S. Treasury Notes
6.25% due 2/15/03, market value
$1,994,256 and $74,000 U.S. Treasury
Notes 5.50% due 3/31/03, market
value $75,296) .............................. 2,025,000 2,025,000
With PaineWebber 5.75% 7/01/98
(dated 6/30/98 collateralized by
$1,332,000 U.S. Treasury Notes
6.00% due 8/15/99, market value
$1,368,276 and $680,000 U.S. Treasury
Notes 5.875% due 1/31/99, market
value $697,900) ............................. 2,025,000 2,025,000
----------
TOTAL REPURCHASE AGREEMENTS
(COST $6,379,000) ........................... 6,379,000
----------
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 100.25% (COST $141,158,028)............................ $166,048,459
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (0.25%)................................. (413,407)
------------
NET ASSETS APPLICABLE TO 8,873,738 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $18.67 PER SHARE - 100.00%............................................... $165,635,052
============
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $ 0.01 par value, 1,000,000,000 shares authorized to the Fund
with 50,000,000 shares allocated to the Series......................................... $133,339,812
Undistributed net investment income....................................................... 1,355,893
Accumulated net realized gain on investments.............................................. 6,048,916
Net unrealized appreciation of investments................................................ 24,890,431
------------
Total net assets.......................................................................... $165,635,052
============
</TABLE>
- ------------
+Security is partially or fully on loan.
See accompanying notes
23
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-CONVERTIBLE SECURITIES SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
PRINCIPAL MARKET
AMOUNT VALUE
--------- --------
CONVERTIBLE BONDS - 28.19%
AUTOMOBILES & AUTOMOTIVE PARTS - 5.53%
MAGNA International
4.875% 02/15/05 ............................... $ 175,000 $ 194,032
Tower Automotive 5.00% 08/01/04 .................. 200,000 204,000
----------
398,032
----------
BANKING, FINANCE & INSURANCE - 1.92%
Bell Atlantic Financial Services
5.75% 04/01/03 ................................ 135,000 138,544
----------
138,544
----------
CABLE, MEDIA & PUBLISHING - 3.33%
Jacor Communications
0.00% 02/09/18 ................................ 300,000 130,500
World Color Press 6.00% 10/01/07 ................. 100,000 109,125
----------
239,625
----------
COMPUTERS & TECHNOLOGY - 4.94%
Network Associates 0.00% 02/13/18 ................ 440,000 204,600
Platinum Technology 6.25% 12/15/02 ............... 140,000 151,200
----------
355,800
----------
ENERGY - 1.76%
Parker Drilling 5.50% 08/01/04 ................... 147,000 126,420
----------
126,420
----------
FOOD, BEVERAGE & TOBACCO - 1.71%
Whole Foods Market 0.00% 03/02/18 ................ 300,000 123,000
----------
123,000
----------
HEALTHCARE & PHARMACEUTICALS - 1.68%
Atria Communities 5.00% 10/15/02 ................. 125,000 120,625
----------
120,625
----------
INDUSTRIAL MACHINERY - 2.01%
Thermo Fibertek 4.50% 07/15/04 ................... 140,000 145,075
----------
145,075
----------
LEISURE, LODGING & ENTERTAINMENT - 1.14%
Capstar Hotel 4.75% 10/15/04 ..................... 100,000 82,000
----------
82,000
----------
TELECOMMUNICATIONS - 2.81%
Tel-Save Holdings 5.00% 12/15/04 ................. 250,000 202,188
----------
202,188
----------
MISCELLANEOUS - 1.36%
COREStaff 2.94% 08/15/04 ......................... 100,000 97,750
----------
97,750
----------
TOTAL CONVERTIBLE BONDS
(COST $2,006,989) ............................. 2,029,059
----------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
----------- --------
COMMON STOCK - 21.27%
AUTOMOBILES & AUTOMOTIVE PARTS - 4.60%
Chrysler ......................................... 2,200 $124,025
General Motors ................................... 3,100 207,119
--------
331,144
--------
BANKING, FINANCE & INSURANCE - 0.67%
Capital Trust- Class A ........................... 5,000 48,125
--------
48,125
--------
ENERGY - 2.47%
Exxon ............................................ 2,500 178,281
--------
178,281
--------
ENVIRONMENTAL SERVICES - 0.82%
Browning-Ferris .................................. 1,700 59,075
--------
59,075
--------
REAL ESTATE - 10.09%
Corporate Office Properties ...................... 13,800 122,475
Grove Property Trust ............................. 16,100 168,044
SL Green Realty .................................. 9,700 218,250
Starwood Hotels & Resorts Trust .................. 4,500 217,406
--------
726,175
--------
MISCELLANEOUS - 2.62%
Dollar General ................................... 4,800 188,700
--------
188,700
--------
TOTAL COMMON STOCK ($1,503,424) .................. 1,531,500
---------
CONVERTIBLE PREFERRED STOCKS - 42.25%
AUTOMOBILES & AUTOMOTIVE PARTS - 1.62%
BTI Capital Trust 6.50% .......................... 2,700 116,438
-------
116,438
-------
BANKING, FINANCE & INSURANCE - 8.69%
American General 6.00% Series A .................. 1,800 162,450
American Heritage Life
Investment 8.50% .............................. 3,000 195,000
National Australia Bank-Units
7.875% ........................................ 5,500 157,781
SunAmerica $3.188 ................................ 2,300 110,400
--------
625,631
--------
CABLE, MEDIA & PUBLISHING - 1.93%
MetroMedia International
Group 7.25% ................................... 2,700 139,050
-------
139,050
-------
24
<PAGE>
CONVERTIBLE SECURITIES SERIES
STATEMENT OF NET ASSETS (CONTINUED)
NUMBER MARKET
OF SHARES VALUE
----------- --------
CONVERTIBLE PREFERRED STOCKS (CONTINUED)
CONSUMER PRODUCTS - 5.46%
Cendant 7.50% .................................... 4,600 $172,213
Newell Financial Trust I 5.25% ................... 3,800 220,875
--------
393,088
--------
HEALTHCARE & PHARMACEUTICALS - 3.93%
Herbalife DECS III 8.75% ......................... 11,000 227,563
MedPartners 6.50% ................................ 5,200 54,925
--------
282,488
--------
PAPER & FOREST PRODUCTS - 1.70%
International Paper 5.25% ........................ 2,500 122,500
--------
122,500
--------
REAL ESTATE - 8.72%
Crescent Real Estate 6.75% ....................... 10,000 224,375
General Growth Properties 7.25% .................. 7,400 186,850
Reckson Associates Realty 7.625% ................. 9,200 216,775
--------
628,000
--------
RETAIL - 1.80%
AnnTaylor Finance Trust 8.50% .................... 2,100 129,150
--------
129,150
--------
TELECOMMUNICATIONS - 2.73%
Winstar Communications 7.00% ..................... 3,600 196,650
--------
196,650
--------
TRANSPORTATION - 1.95%
Union Pacific Capital Trust 6.25% ................ 3,000 140,625
--------
140,625
--------
UTILITIES - 1.55%
Houston Industries 7.00% ......................... 1,500 111,750
--------
111,750
--------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
----------- --------
CONVERTIBLE PREFERRED STOCKS (CONTINUED)
MISCELLANEOUS - 2.17%
Central Parking Finance
Trust 5.25% ................................. 6,000 $ 156,000
---------
156,000
---------
TOTAL CONVERTIBLE PREFERRED STOCKS
(COST $3,019,007) ........................... 3,041,370
---------
PRINCIPAL
AMOUNT
-----------
REPURCHASE AGREEMENTS - 11.90%
With Chase Manhattan 5.85% 07/01/98
(dated 06/30/98, collateralized by
$321,000 U.S. Treasury Notes
5.375% due 06/30/03,
market value $319,265) ........................ $313,000 313,000
With JP Morgan Securities 5.75%
07/01/98 (dated 06/30/98,
collateralized by $255,000 U.S.
Treasury Notes 6.25% due 02/15/03,
market value $267,922, and $10,000
U.S. Treasury Notes 5.50% due
03/31/03, market value $10,116) ............... 272,000 272,000
With PaineWebber 5.75% 07/01/98
(dated 06/30/98, collateralized by
$91,000 U.S. Treasury Notes 5.875%
due 01/31/99, market value $93,761,
and $179,000 U.S. Treasury Notes
6.00% due 08/31/99, market
value $183,824) ............................... 272,000 272,000
--------
TOTAL REPURCHASE AGREEMENTS
(COST $857,000) ............................... 857,000
--------
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 103.61% (COST $7,386,420)............................ $7,458,929
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (3.61%)............................... (259,654)
----------
NET ASSETS APPLICABLE TO 623,851 SHARES ($0.01 PAR VALUE) OUTSTANDING; EQUIVALENT TO
$11.54 PER SHARE - 100.00%........................................................... $7,199,275
==========
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $0.01 par value 1,000,000,000 shares authorized to the Fund with
50,000,000 shares allocated to the Series............................................ $6,897,718
Undistributed net investment income..................................................... 95,679
Accumulated net realized gain on investments............................................ 133,369
Net unrealized appreciation on investments.............................................. 72,509
----------
Total net assets........................................................................ $7,199,275
==========
</TABLE>
See accompanying notes
25
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-EMERGING MARKETS SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
NUMBER MARKET
OF SHARES VALUE
----------- --------
(U.S.$)
COMMON STOCK - 85.75%
ARGENTINA - 3.48%
Central Puerto Class B ........................ 21,000 $ 48,307
Transportadora
de Gas del sur, Class B ..................... 21,000 46,627
YPF Sociedad Anonima .......................... 1,300 38,876
YPF Sociedad Anonima ADR ...................... 2,150 64,634
---------
198,444
--------
BRAZIL - 16.08%
Aracruz Celulose ADR .......................... 8,100 92,644
Brasmotor ..................................... 1,073,000 98,333
Centrais Electricas
de Santa Catrina GDR ........................ 600 49,282
COMPANHIA ENERGETICA
DE MINAS GERAIS GDR ........................... 3,937 120,830
Companhia Paranaense de
Energia-Copel ADR ........................... 10,092 93,351
ELVADORES ATLAS ............................... 7,500 114,781
Lojas Renner .................................. 870,000 25,200
GERDAU METALURGICA ............................ 3,640,000 118,023
Rossi Residential GDR ......................... 4,500 21,982
TELECOMMUNICACOES BRASILEIRAS
ADR ......................................... 1,500 163,781
Usinas Siderurgicas
de Minas Gerais ADR ......................... 1,400 6,832
Usinas Siderurgicas
de Minas Gerais ADR ......................... 2,334 11,744
---------
916,783
---------
CHILE - 4.44%
Administradora de Fondos
de Pensiones Provida ADR .................... 5,000 83,438
Banco BHIF ADR ................................ 4,140 61,841
Cia del Telecomunicaciones
de Chile ADR ................................ 1,910 38,797
Empresa Nacional Electricidad ADR ............. 4,850 69,113
---------
253,189
---------
CROATIA - 1.96%
*ZAGREBACKA BANKA GDR .......................... 5,600 112,000
---------
112,000
---------
CZECH REPUBLIC - 1.73%
Komercni Banka I.F ............................ 1,900 32,822
Restitucni Investment Fund .................... 2,300 65,693
---------
98,515
--------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
----------- --------
(U.S.$)
COMMON STOCK (Continued)
EGYPT - 2.11%
PAINTS AND CHEMICAL GDR ....................... 12,825 $120,234
--------
120,234
--------
ESTONIA - 0.56%
Eesti Uhispank GDR ............................ 4,054 32,331
--------
32,331
--------
GREECE - 2.49%
Attica Enterprises ............................ 5,160 74,348
Hellenic Bottling Company ..................... 2,200 67,874
--------
142,222
--------
HONG KONG - 5.81%
First Tractor ................................. 317,000 83,884
Guangdong Kelon Electric Holding .............. 106,000 83,465
Guangshen Railway ............................. 488,000 64,882
Shenzhen Expressway ........................... 536,000 98,939
--------
331,170
--------
INDIA - 7.39%
Gujarat Ambuja Cement GDR ..................... 3,400 16,065
India Fund, (The) ............................. 15,700 100,088
Larsen & Toubro GDR ........................... 7,750 70,331
Mahanagar Telephone
Nigam Limited GDR ........................... 10,000 104,750
Tata Engineering &
Locomotive Limited GDR ...................... 12,000 38,400
*Videsh Sanchar Nigam Limited .................. 8,560 91,592
--------
421,226
--------
INDONSIA - 0.20%
PT Bank Dagang Nasional ....................... 171,000 867
PT Semen Gresik ............................... 18,000 10,217
PT United Tractors ............................ 15,500 471
--------
11,555
--------
ISRAEL - 4.75%
BANK HAPOALIM ................................. 50,300 151,970
ISRAEL CHEMICALS LIMITED ...................... 93,300 119,103
--------
271,073
--------
MALAYSIA - 4.95%
Leader Universal Holdings ..................... 139,000 20,891
Petronas Dagangan ............................. 136,000 108,134
Public Finance ................................ 17,000 4,162
Resorts World ................................. 72,000 79,588
Sime Darby .................................... 100,000 69,329
--------
282,104
--------
- ---------
Top 10 stock holdings, representing 21.7% of net assets, are printed in
boldface.
26
<PAGE>
EMERGING MARKETS SERIES
STATEMENT OF NET ASSETS (CONTINUED)
NUMBER MARKET
OF SHARES VALUE
----------- --------
(U.S.$)
COMMON STOCK (CONTINUED)
MEXICO - 5.09%
ALFA, de C.V. Class A ....................... 13,300 $ 54,582
CEMEX DE C.V. CLASS B ....................... 24,500 108,197
*Grupo Minsa ADR ............................. 2,400 12,600
*Grupo Minsa Class C ......................... 103,096 51,738
Vitro ADR ................................... 9,900 63,113
--------
290,230
--------
PERU - 2.44%
Banco de Credito del Peru ................... 54,717 47,418
Creditcorp Limited .......................... 2,475 36,352
Telefonica del Peru ADR ..................... 2,700 55,181
--------
138,951
--------
POLAND - 1.07%
Elektrim Spolka Akcyjna ..................... 5,000 60,941
--------
60,941
--------
ROMANIA - 1.40%
Banco Turco Romana GDR ...................... 6,700 79,730
--------
79,730
--------
RUSSIA - 1.93%
Gazprom ADR ................................. 1,200 13,725
*Gazprom ADR Reg. S .......................... 1,900 21,043
Lukoil Holding ADR .......................... 1,400 46,788
Mosenergo ADR ............................... 5,700 28,364
--------
109,920
--------
SLOVENIA - 0.37%
Blagovno Trgovinski Center GDR .............. 1,925 12,128
SKB Banka GDR ............................... 800 9,160
--------
21,288
--------
SOUTH AFRICA - 8.21%
Amalgamated Banks of
South Africa .............................. 7,900 48,515
Anglo American Corporation of
South Africa Limited ........................ 2,850 94,606
Edgars Stores ............................... 2,325 20,259
Ingwe Coal .................................. 16,300 45,992
Iscor ....................................... 525,200 97,631
Sappi Limited ............................... 14,000 51,701
SASOL LIMITED ............................... 19,200 109,464
--------
468,168
--------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
----------- --------
(U.S.$)
COMMON STOCK (CONTINUED)
SOUTH KOREA - 0.77%
Pohang Iron & Steel Limited ................... 500 $ 16,673
Pohang Iron & Steel Limited ADR ............... 2,280 27,360
---------
44,033
---------
TAIWAN - 2.52%
Asia Cement GDR ............................... 8,753 78,775
*Yageo GDR ..................................... 7,900 65,175
---------
143,950
---------
THAILAND - 3.29%
Hana Microelectronics Public Co. ..............
Limited ....................................... 35,400 90,812
K.R. Precision ................................ 25,800 17,159
*Ruang Khao 2 Fund ............................. 553,600 63,118
Thai Reinsurance Public Co. ...................
Limited ....................................... 8,600 16,342
---------
187,431
---------
TURKEY - 2.71%
*Efes Sinai Yatirim Holdings ADR ............... 3,533 71,102
*Netas-Northern Eleckrik
Telekomunikayson ............................ 312,550 83,216
---------
154,318
---------
TOTAL COMMON STOCK
(COST $7,169,086) ............................. 4,889,806
---------
RIGHTS - 0.00%
CHILE - 0.00%
Cia del Telecomunicaciones
de Chile ADR ................................ 120 41
---------
TOTAL RIGHTS (COST $0) ........................ 41
---------
WARRANTS - 0.00%
HONG KONG - 0.00%
Guangdong Investment 7/99 ..................... 4,600 25
---------
TOTAL WARRANTS (COST $0) ...................... 25
---------
27
<PAGE>
EMERGING MARKETS SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
----------- --------
(U.S.$)
REPURCHASE AGREEMENTS - 14.52%
With Chase Manhattan 5.85% 07/01/98
(dated 06/30/98, collateralized by
$310,000 U.S. Treasury Notes
5.375% due 06/30/03,
market value $308,461) .......................... $302,000 $302,000
With JP Morgan Securities 5.75%
07/01/98 (dated 06/30/98, collateralized
by $246,000 U.S. Treasury Notes 6.25%
due 02/15/03, market value $258,856
and $10,000 U.S. Treasury Notes
5.50% due 03/31/03,
market value $9,773) ............................ 263,000 263,000
With PaineWebber 5.75% 07/01/98
(dated 06/30/98, collateralized by
$88,000 U.S. Treasury Notes 5.875%
due 01/31/99, market value $90,588,
and $173,000 U.S. Treasury Notes
6.00% due 08/31/99,
market value $177,604) ........................ 263,000 263,000
--------
TOTAL REPURCHASE AGREEMENTS
(COST $828,000) ............................... 828,000
--------
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 100.27% (COST $7,997,086)............................... $5,717,872
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (0.27%).................................. (15,337)
NET ASSETS APPLICABLE TO 792,450 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $7.20 PER SHARE - 100.00%................................................. $5,702,535
==========
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $0.01 par value, 1,000,000,000 shares authorized to the Fund
with 50,000,000 shares allocated to the Series........................................... $7,891,844
Undistributed net investment income**...................................................... 60,593
Accumulated net realized gain on investments............................................... 30,363
Net unrealized depreciation on investments and foreign currencies.......................... (2,280,265)
----------
Total net assets........................................................................... $5,702,535
==========
</TABLE>
- ------------
*Non-income producing security.
**Undistributed net investment income includes net realized gains (losses) on
foreign currencies. Net realized gains (losses) on foreign currencies are
treated as net investment income in accordance with provisions of the Internal
Revenue Code.
- ------------
ADR--American Depository Receipt
GDR--Global Depository Receipt
See accompanying notes
28
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-INTERNATIONAL EQUITY SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
NUMBER MARKET
OF SHARES VALUE
----------- --------
(U.S.$)
COMMON STOCK - 94.78%
AUSTRALIA - 10.86%
+Amcor ..................................... 1,415,000 $ 6,183,003
CSR ....................................... 1,904,966 5,486,517
FOSTER'S BREWING GROUP .................... 2,827,051 6,639,584
+National Australia Bank ................... 393,757 5,183,600
Orica ..................................... 378,600 2,234,640
-----------
25,727,344
-----------
BELGIUM - 3.25%
ELECTRABEL S.A ............................ 27,200 7,695,774
-----------
7,695,774
-----------
FRANCE - 9.77%
ALCATEL ALSTHOM ........................... 38,015 7,721,045
Compagnie de Saint Gobain ................. 25,299 4,679,203
Elf Aquitaine ............................. 36,583 5,130,517
Societe Generale .......................... 27,108 5,622,062
-----------
23,152,827
-----------
GERMANY - 11.51%
BAYER ..................................... 134,600 6,931,007
Bayerische Vereinsbank .................... 60,900 5,170,437
Continental ............................... 117,200 3,643,053
RHEINISCH WESTFAELISCHES
ELEKTRIC ................................ 121,000 7,160,951
Siemens ................................... 72,050 4,375,603
-----------
27,281,051
-----------
HONG KONG - 1.85%
Hong Kong Electric ........................ 810,000 2,509,359
Wharf Holdings ............................ 1,900,000 1,876,210
-----------
4,385,569
-----------
JAPAN - 13.64%
Amano ..................................... 185,000 1,620,894
Eisai ..................................... 287,000 3,898,726
Hitachi ................................... 888,000 5,776,179
+Kinki Coca-Cola Bottling .................. 191,000 2,306,331
Koito Manufacturing ....................... 596,000 2,934,377
MATSUSHITA ELECTRIC INDUSTRIAL ............ 435,000 6,972,254
Nichido Fire & Marine ..................... 783,000 4,080,175
West Japan Railway ........................ 1,309 4,732,457
-----------
32,321,393
-----------
MALAYSIA - 0.47%
Oriental Holdings Berhad .................. 510,720 854,243
Sime Darby Berhad ......................... 380,000 263,451
-----------
1,117,694
-----------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
----------- --------
(U.S.$)
COMMON STOCK (Continued)
NETHERLANDS - 5.72%
Elsevier .................................. 199,500 $ 3,004,857
Koninklijke Van Ommeren ................... 60,100 2,518,111
Royal Dutch Petroleum ..................... 63,000 3,486,520
Unilever .................................. 57,440 4,548,419
-----------
13,557,907
-----------
NEW ZEALAND - 2.28%
Carter Holt Harvey Limited ................ 1,187,800 1,033,372
*Telecom Corporation of
New Zealand ............................. 209,409 446,783
Telecom Corporation of
New Zealand ............................. 954,784 3,925,813
-----------
5,405,968
-----------
SINGAPORE - 0.38%
Jardine Matheson Holdings ................. 336,622 908,879
-----------
908,879
-----------
SPAIN - 6.96%
+Banco Central Hispanoamericano ............ 203,749 6,398,684
+Iberdrola S.A ............................. 197,800 3,209,032
+TELEFONICA DE ESPANA ...................... 148,909 6,878,846
-----------
16,486,562
-----------
UNITED KINGDOM - 28.09%
BASS ...................................... 366,964 6,855,480
BG ........................................ 617,647 3,574,916
Blue Circle Industry ...................... 688,236 3,868,685
BOOTS ..................................... 433,200 7,204,099
British Airways ........................... 529,472 5,700,790
CABLE & WIRELESS .......................... 556,000 6,765,441
Centrica .................................. 700,000 1,185,114
GKN ....................................... 504,000 6,380,700
Glaxo Wellcome ............................ 214,470 6,453,557
Great Universal Stores .................... 323,000 4,258,929
Rio Tinto ................................. 412,100 4,643,271
Taylor Woodrow ............................ 1,365,000 4,576,408
Unigate ................................... 458,000 5,072,588
-----------
66,539,978
-----------
TOTAL COMMON STOCK
(COST $180,746,258) ....................... 224,580,946
-----------
- -------------
Top 10 stock holdings, representing 29.9% of net assets, are printed in
boldface.
29
<PAGE>
INTERNATIONAL EQUITY SERIES
STATEMENT OF NET ASSETS (CONTINUED)
NUMBER MARKET
OF SHARES VALUE
----------- --------
(U.S.$)
WARRANTS - 0.01%
INDONESIA
*PT Bank Dagang Nasional ..................... 567,750 $ 269
-------
TOTAL WARRANTS (COST $0) .................... 269
-------
PRINCIPAL
AMOUNT
-----------
REPURCHASE AGREEMENTS - 4.90%
With Chase Manhattan 5.85% 7/01/98
(dated 6/30/98, collateralized by
$4,345,000 U.S. Treasury Notes
5.375% due 6/30/03, market value
$4,324,788) ............................... $4,239,000 4,239,000
With J.P. Morgan Securities 5.75%
7/01/98 (dated 6/30/98, collateralized by
$135,000 U.S. Treasury Notes 5.500%
due 3/31/03, market value $137,030
and $3,454,000 U.S. Treasury Notes
6.250% due 2/15/03, market
$3,629,301) ............................... 3,685,000 3,685,000
With PaineWebber 5.75% 7/01/98
(dated 6/30/98, collateralized by
$1,237,000 U.S. Treasury Notes 5.875%
due 1/31/99, market value $1,270,094
and $2,424,000 U.S. Treasury Notes
6.00% due 8/15/99, market value
$2,490,096) ............................... 3,685,000 3,685,000
----------
TOTAL REPURCHASE AGREEMENTS
(COST $11,609,000) ........................ 11,609,000
----------
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 99.69% (COST $192,355,258)............................. $236,190,215
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.31%................................... 728,434
------------
NET ASSETS APPLICABLE TO 14,085,200 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $16.82 PER SHARE - 100.00%............................................... $236,918,649
============
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $0.01 par value, 1,000,000,000 shares authorized to the Fund
with 50,000,000 shares allocated to the Series......................................... $191,814,511
Undistributed net investment income**..................................................... 2,854,072
Accumulated net realized loss on investments.............................................. (1,561,759)
Net unrealized appreciation of investments................................................ 43,811,825
------------
Total net assets.......................................................................... $236,918,649
============
</TABLE>
- -----------------
*Non-income producing security.
**Undistributed net investment income includes net realized gains (losses) on
foreign currencies. Net realized gains (losses) on foreign currencies are
treated as net investment income in accordance with provisions of the Internal
Revenue Code.
+Security is partially or fully on loan.
See accompanying notes
30
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-GLOBAL BOND SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
BONDS - 94.45%
AUSTRALIA - 18.45%
Australian Government
6.75% 11/15/06 ..............................A$ 1,700,000 $1,136,694
Australian Government
7.00% 04/15/00 .............................. 800,000 509,773
Australian Government
10.00% 10/15/02 ............................. 500,000 363,503
Federal National Mortgage
Association 5.75% 09/05/00 .................. 700,000 435,069
New South Wales Treasury
7.00% 02/01/00 .............................. 700,000 443,585
Queensland Treasury
8.00% 08/14/01 .............................. 750,000 497,649
----------
3,386,273
----------
CANADA - 12.05%
Abbey National Treasury Service
7.00% 12/31/99 ..............................C$ 550,000 382,218
Canada Government
7.50% 03/01/01 .............................. 500,000 359,646
Canada Government
8.75% 12/01/05 .............................. 300,000 246,898
Export-Import Bank of Japan
7.75% 10/08/02 .............................. 160,000 117,322
Japan Highway 7.875% 09/27/02 .................. 400,000 294,158
KFW International Finance
6.50% 12/28/01 .............................. 60,000 42,054
Kingdom of Norway
8.375% 01/27/03 ............................. 200,000 150,826
Ontario Hydro 10.00% 03/19/01 .................. 300,000 228,155
Ontario Hydro 10.875% 03/29/99 ................. 550,000 389,712
----------
2,210,989
----------
DENMARK - 1.77%
Kingdom of Denmark
7.00% 11/15/07 ..............................Dk 500,000 83,606
Kingdom of Denmark
8.00% 11/15/01 .............................. 1,500,000 241,233
----------
324,839
----------
GERMANY - 20.07%
Baden Wurt L-Finance NV
5.25% 09/26/01 ..............................Dem 1,000,000 567,962
Baden Wurt L-Finance NV
6.625% 08/20/03 ............................. 250,000 150,805
Deutsche Pfandbriefe Hypotheken
Bank 5.625% 02/07/03 ........................ 1,000,000 577,434
Deutschland Republic
6.50% 07/15/03 .............................. 1,500,000 905,310
Deutschland Republic
6.50% 07/04/27 .............................. 350,000 225,913
DSL Finance NV 6.00% 02/21/06 .................. 1,200,000 710,592
International Bank
Reconstruction & Development
6.125% 09/27/02 ............................. 150,000 88,305
Republic of Finland
5.50% 02/09/01 .............................. 800,000 456,582
----------
3,682,903
----------
NETHERLANDS - 5.85%
Netherlands Government
8.25% 09/15/07 ..............................Nlg 1,400,000 860,297
Netherlands Government
9.00% 05/15/00 .............................. 400,000 213,360
----------
1,073,657
----------
31
<PAGE>
GLOBAL BOND SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
BONDS (CONTINUED)
NEW ZEALAND - 11.89%
New Zealand Government
6.50% 02/15/00 ............................NZ$ 500,000 $ 255,740
New Zealand Government
7.00% 07/15/09 ............................ 200,000 108,934
New Zealand Government
8.00% 02/15/01 ............................ 750,000 396,116
New Zealand Government
8.00% 04/15/04 ............................ 1,350,000 740,973
New Zealand Government
8.00% 11/15/06 ............................ 1,000,000 568,030
New Zealand Government
10.00% 03/15/02 ........................... 200,000 113,513
----------
2,183,306
----------
SOUTH AFRICA - 2.91%
Republic of South Africa
12.50% 01/15/02 ...........................Sa 3,500,000 535,038
----------
535,038
----------
SWEDEN - 2.52%
Swedish Government
8.00% 08/15/07 ............................Sk 2,200,000 336,000
Swedish Government
9.00% 04/20/09 ............................ 300,000 49,916
Swedish Government
13.00% 06/15/01 ........................... 500,000 77,118
----------
463,034
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
BONDS (CONTINUED)
UNITED STATES - 18.94%
International America Development
Bank 6.325% 10/22/07 ...................... $ 300,000 $ 310,688
J. Sainsbury 6.25% 03/27/02 .................. 100,000 100,500
Korea Electric Power 6.325% 12/01/03 ......... 100,000 86,000
Matsushita Electric 7.25% 08/01/02 ........... 200,000 207,750
Republic of Finland 7.875% 07/28/04 .......... 200,000 220,500
U.S. Treasury Bill 5.75% 09/30/99 ............ 100,000 100,299
U.S. Treasury Inflation
Index Note 3.375% 01/15/07 ................ 409,504 396,707
U.S. Treasury Inflation
Index Note 3.625% 07/15/02 ................ 354,470 350,592
U.S. Treasury Inflation
Index Note 3.625% 01/15/08 ................ 250,998 248,174
U.S. Treasury Note 6.125% 07/13/00 ........... 300,000 303,624
U.S. Treasury Note 6.25% 02/15/07 ............ 200,000 209,474
U.S. Treasury Note 6.375% 08/15/27 ........... 550,000 604,917
U.S. Treasury Note 7.875% 11/15/04 ........... 300,000 336,978
-----------
3,476,203
-----------
TOTAL BONDS (COST $17,930,139) ............... 17,336,242
-----------
32
<PAGE>
GLOBAL BOND SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
REPURCHASE AGREEMENTS - 3.36%
With Chase Manhattan 5.85% 07/01/98
(dated 06/30/98, collateralized by
$231,000 U.S. Treasury Notes 5.375%
due 06/30/03, market value $229,856) ............ $225,000 $225,000
With J.P. Morgan Securities 5.75%
07/01/98 (dated 06/30/98, collateralized
by $7,000 U.S. Treasury Notes 5.50%
due 03/31/03, market value $7,283 and
$184,000 U.S. Treasury Notes 6.25%
due 02/15/03, market value $192,892) ............ 196,000 196,000
With PaineWebber 5.75% 07/01/98
(dated 06/30/98, collateralized by
$66,000 U.S. Treasury Notes 5.875%
due 01/31/99, market value $67,503 and
$129,000 U.S. Treasury Notes 6.00%
due 08/31/99, market value $132,345) ............ 196,000 196,000
--------
TOTAL REPURCHASE AGREEMENTS
(COST $617,000) ................................. 617,000
--------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 97.81% (cost $18,547,139)................................................... $17,953,242
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 2.19% ....................................................... 401,579
-----------
NET ASSETS APPLICABLE TO 1,807,324 SHARES ($0.01 par value) OUTSTANDING;
EQUIVALENT TO $10.16 PER SHARE - 100.00%.................................................................... $18,354,821
===========
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $0.01 par value, 1,000,000,000 shares authorized to the Fund with 50,000,000 shares allocated
to the Series................................................................................................. $18,874,525
Undistributed net investment income **......................................................................... 158,244
Accumulated net realized loss on investments................................................................... (72,628)
Net unrealized depreciation on investments .................................................................... (605,320)
-----------
Total net assets............................................................................................... $18,354,821
===========
</TABLE>
- ----------------
* Principal amount is stated in the currency in which each bond is denominated.
A$ - Australian Dollars Dem - German Deutsche Marks Sa - South African Rand
C$ - Canadian Dollars Nlg - Dutch Guilders Sk - Swedish Kroner
Dk - Danish Kroner NZ$ - New Zealand Dollars $ - U.S. Dollars
** Undistributed net investment income includes net realized gains (losses) on
foreign currencies. Net realized gains (losses) on foreign currencies are
treated as net investment income in accordance with provisions of the Internal
Revenue Code.
See accompanying notes
33
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-DELCHESTER SERIES
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS - 91.24%
AEROSPACE & DEFENSE - 0.46%
Federal Data sr sub nts
10.125% 8/1/05 .............................. $ 550,000 $ 568,563
----------
568,563
----------
AUTOMOBILES & AUTOMOTIVE PARTS - 2.95%
ADV Accessory/AAS Capital sr sub nts
9.75% 10/1/07 ............................... 650,000 658,125
CSK Auto sr sub nts 11.00% 11/1/06 ............. 130,000 143,000
Federal Mogul nts 7.875% 7/1/10 ................ 225,000 226,125
Motors and Gears sr nts
10.75% 11/15/06 ............................. 700,000 754,250
Newcor sr sub nts 9.875% 3/1/08 ................ 300,000 303,750
Ryder Transportation sr sub nts
10.00% 12/1/06 .............................. 275,000 319,688
Stanadyne Automotive sr sub nts
10.25% 12/15/07 ............................. 800,000 820,000
Talon Automotive sr sub nts
9.625% 5/1/08 ............................... 400,000 405,000
----------
3,629,938
----------
BANKING, FINANCE & INSURANCE - 1.31%
American Banknote unsec sr sub nts
11.25% 12/1/07 .............................. 1,500,000 1,522,500
Western Financial Bank-FSB sub debs
8.875% 8/1/07 ............................... 100,000 94,875
----------
1,617,375
----------
BUILDINGS & MATERIALS - 3.50%
American Builders and Contractors
sr unsec sub nts 10.625% 5/15/07 ............ 225,000 233,156
Atrium sr sub nts 10.50% 11/15/06 .............. 400,000 425,000
Clark Materials Handling unsec sr nts
10.75% 11/15/06 ............................. 500,000 541,250
Collins & Aikman Floorcovers
sr sub nts 10.00% 1/15/07 ................... 250,000 261,250
Nortek sr nts 9.25% 3/15/07 .................... 500,000 516,250
Reliant Building Products sr sub nts
10.875% 5/1/04 .............................. 100,000 100,750
Safelite Glass sr sub nts
9.875% 12/15/06 ............................. 500,000 530,000
Wesco Distribution sr sub nts
9.125% 6/1/08 ............................... 750,000 743,438
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
BUILDINGS & MATERIALS (CONTINUED)
Wesco International sr disc nts
0.00%/11.125% 6/1/08 ........................ $ 750,000 $ 440,625
Williams Scotsman sr nts
9.875% 6/1/07 ............................... 500,000 522,500
----------
4,314,219
----------
CABLE, MEDIA & PUBLISHING - 4.66%
Falcon Holdings debs
0.00%/9.285% 4/15/10 ........................ 1,500,000 969,370
Marcus Cable sr disc nts
0.00%/14.25% 12/15/05 ....................... 400,000 373,500
Marsulex sr sub nts 9.625% 7/1/08 .............. 150,000 153,000
Northland Cable Television sr sub nts
10.25% 11/15/07 ............................. 750,000 802,500
PSI Net sr nts 10.00% 2/15/05 .................. 400,000 410,000
PX Escrow sr disc nts
0.00%/9.625% 2/1/06 ......................... 1,250,000 903,125
Pathnet units 12.25% 4/15/08 ................... 300,000 325,500
Pegasus Communications sr nts
9.625% 10/15/05 ............................. 250,000 258,125
RH Donnelly sr sub nts
9.125% 6/1/08 ............................... 25,000 25,500
Sullivan Graphics sr sub nts
12.75% 8/1/05 ............................... 250,000 264,688
Trump Atlantic City Association II 1st
mtg nts 11.25% 5/1/06 ....................... 400,000 398,000
United International Holdings sr disc
nts 0.00%/10.75% 2/15/08 .................... 1,400,000 864,500
----------
5,747,808
----------
CHEMICALS - 3.58%
Aqua Chem sr sub nts 11.25% 7/1/08 ............. 800,000 812,000
Huntsman sr sub nts 9.50% 7/1/07 ............... 400,000 410,000
Koppers unsec sr sub nts
9.875% 12/1/07 .............................. 500,000 520,000
LaRoche Industries sr sub nts
9.50% 9/15/07 ............................... 1,500,000 1,477,500
PCI Chemical Canada company
guaranteed sub nts 9.25% 10/15/07 ........... 50,000 48,750
Philipp Brothers sr sub nts
9.875% 6/1/08 ............................... 400,000 404,000
Sterling Chemical Holdings sr disc nts
0.00%/13.50% 8/15/08 ........................ 1,275,000 742,688
----------
4,414,938
----------
34
<PAGE>
DELCHESTER SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
COMPUTERS & TECHNOLOGY - 0.68%
Cellnet Data Systems sr disc nts
0.00%/14.00% 10/1/07 ....................... $1,000,000 $ 573,750
Statia Terminals mtg nts
11.75% 11/15/03 ............................ 250,000 263,125
----------
836,875
----------
CONSUMER PRODUCTS - 4.57%
Calmar sr sub nts 11.50% 8/15/05 .............. 500,000 576,250
Desa International sr sub nts
9.875% 12/15/07 ............................ 615,000 616,538
Drypers sr nts 10.25% 6/15/07 ................. 500,000 516,875
French Fragrance sr nts
10.375% 5/15/07 ............................ 1,000,000 1,070,000
Iron Age sr sub nts 9.875% 5/1/08 ............. 500,000 501,250
Prime Succession Acquisition sr sub nts
10.75% 8/15/04 ............................. 200,000 219,500
Revlon Consumer Products sr sub nts
8.625% 2/1/08 .............................. 100,000 100,500
**Revlon Worldwide sr disc nts
9.57% 3/15/01 .............................. 600,000 465,750
Riddell Sports sr unsec sub nts
10.50% 7/15/07 ............................. 400,000 419,000
Spin Cycle units 0.00%/12.75%
5/1/05 ..................................... 500,000 357,500
Zeta Consumer Products sr nts
11.25% 11/30/07 ............................ 800,000 796,000
----------
5,639,163
----------
ELECTRONICS & ELECTRICAL EQUIPMENT - 1.86%
Elgar Holdings sr nts 9.875% 2/1/08 ........... 400,000 371,000
Phase Metrics sr nts 10.75% 2/1/05 ............ 1,700,000 1,241,000
Rhythms Netconnections
0.00/13.50% 5/15/08 ........................ 1,400,000 686,000
----------
2,298,000
----------
ENERGY - 6.03%
First Wave Marine sr nts
11.00% 2/1/08 .............................. 1,100,000 1,174,250
Michael Petroleum 11.50% 4/1/05 ............... 400,000 403,000
P & L Coal Holdings sr sub nts
9.625% 5/15/08 ............................. 550,000 566,500
Panaco unsec sr sub nts
10.625% 10/1/04 ............................ 925,000 925,000
Rutherford-Moran Oil sr sub nts
10.75% 10/1/04 ............................. 750,000 802,500
Tesoro Petroleum sr sub nts
9.00% 7/1/08 ............................... 500,000 501,250
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
ENERGY (CONTINUED)
Transamerican Energy sr disc nts
0.00%/13.00% 6/15/02 ........................ $1,000,000 $ 820,000
Transamerican Energy sr nts
11.50% 6/15/02 .............................. 250,000 237,500
Transamerican Refining units
16.00% 6/30/03 .............................. 1,000,000 1,065,000
Uiversal Compression sr disc nts
0.00%/9.875% 2/15/08 ........................ 1,000,000 640,000
Universal Compression Holdings sr
disc nts 11.375% 2/15/09 .................... 500,000 302,500
----------
7,437,500
----------
ENVIRONMENTAL SERVICES - 0.23%
Hydrochem Industrial Services
sr sub nts 10.375% 8/1/07 ................... 275,000 281,188
----------
281,188
----------
FOOD, BEVERAGE & TOBACCO - 4.75%
Ameriserve Food Distributors sr sub nts
10.125% 7/15/07 ............................. 750,000 783,750
B and G Foods unsec sr sub nts
9.625% 8/1/07 ............................... 500,000 508,750
Core-Mark International sr sub nts
11.375% 9/15/03 ............................. 200,000 213,250
Del Monte Foods sr disc nts
0.00%/12.50% 12/15/07 ....................... 1,750,000 1,146,250
DiGiorgio sr nts 10.00% 6/15/07 ................ 775,000 771,125
Electronic Retailing Systems
sr disc nts 0.00%/13.25% 2/1/04 ............. 500,000 232,500
Favorite Brands sr nts
10.75% 5/15/06 .............................. 800,000 809,000
Fresh Foods sr nts 10.75% 6/1/06 ............... 750,000 751,875
Windy Hill Pet Food sr sub nts
9.75% 5/15/07 ............................... 600,000 636,000
----------
5,852,500
----------
HEALTHCARE & PHARMACEUTICALS - 2.16%
Alliance Imaging sr sub nts
9.625% 12/15/05 ............................. 400,000 409,000
Dynacare sr nts 10.75% 1/15/06 ................. 500,000 536,250
Insight Health Services sr sub nts
9.625% 6/15/08 .............................. 700,000 700,000
Kinetic Concepts sr sub nts
9.625% 11/1/07 .............................. 1,000,000 1,012,500
----------
2,657,750
----------
35
<PAGE>
DELCHESTER SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
INDUSTRIAL MACHINERY - 3.95%
AEP Industries sr sub nts
9.875% 11/15/07 ............................. $ 200,000 $ 208,500
Burke Industries unsec sr nts
10.00% 5/15/07 .............................. 500,000 507,500
Cambridge Industries sr sub nts
10.25% 7/15/07 .............................. 800,000 828,000
Outboard Marine sr nts
10.75% 6/1/08 ............................... 400,000 413,000
Rental Service sr sub nts
9.00% 5/15/08 ............................... 500,000 500,000
Safety Components International
sr sub nts 10.125% 7/15/07 .................. 600,000 624,000
Spinnaker Industries sr nts
10.75% 10/15/06 ............................. 500,000 520,000
Trench Electric 10.25% 12/15/07 ................ 1,250,000 1,271,875
----------
4,872,875
----------
LEISURE, LODGING & ENTERTAINMENT - 3.16%
Aladdin Gaming units
0.00%/13.50% 3/1/10 ......................... 1,250,000 603,125
Premier Parks sr disc nts
0.00%/10.00% 4/1/08 ......................... 1,200,000 798,000
Regal Cinemas sr sub nts
9.50% 6/1/08 ................................ 700,000 708,750
Silver Cinemas sr sub nts
10.50% 4/15/05 .............................. 600,000 614,250
United Artists sr sub nts
9.75% 4/15/08 ............................... 1,175,000 1,172,063
----------
3,896,188
----------
METALS & MINING - 3.70%
Commonwealth Aluminum sr sub nts
10.75% 10/1/06 .............................. 200,000 213,000
Doe Run Resources sr nts
11.25% 3/15/05 .............................. 1,200,000 1,240,500
Great Lakes Carb sr sub nts
10.25% 5/15/08 .............................. 500,000 510,000
Jorgensen Earle M. sr sub nts
9.50% 4/1/05 ................................ 800,000 784,000
Metallurg sr nts 11.00% 12/1/07 ................ 1,250,000 1,309,375
Renco Steel Holding sr nts
10.875% 2/1/05 .............................. 500,000 505,000
----------
4,561,875
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
PACKAGING & CONTAINERS - 4.54%
Gaylord Container sr nts
9.75% 6/15/07 ............................ $ 550,000 $ 547,250
Gaylord Container sr sub nts
9.875% 2/15/08 ........................... 1,500,000 1,462,500
Graham Packaging/GPC Capital
sr disc nts 0.00%/10.75% 1/15/09 ......... 1,000,000 626,250
Graham Packaging/GPC Capital
sr sub nts 8.75% 1/15/08 ................. 500,000 501,250
Riverwood International unsec
sr sub nts 10.875% 4/1/08 ................ 1,800,000 1,827,000
**Silgan Holdings pik debs
12.13% 7/15/06 ........................... 561,000 634,631
----------
5,598,881
----------
PAPER & FOREST PRODUCTS - 2.40%
Fibermark sr nts 9.375% 10/15/06 ............ 400,000 421,000
Four M sr nts 12.00% 6/1/06 ................. 1,000,000 1,072,500
MAXXAM Group sr sec nts
12.00% 8/1/03 ............................ 600,000 672,000
MAXXAM Group sr sec nts
11.25% 8/1/03 ............................ 750,000 795,000
----------
2,960,500
----------
RETAIL - 6.06%
Advance Stores sr sub nts
10.25% 4/15/08 ........................... 800,000 831,000
Chief Auto Parts sr nts
10.50% 5/15/05 ........................... 900,000 1,014,750
Fleming sr sub nts 10.50% 12/1/04 ........... 1,750,000 1,811,250
Frank's Nursery and Crafts sr sub nts
10.25% 3/1/08 ............................ 500,000 506,250
Jitney-Jungle Stores unsec sr sub nts
10.375% 9/15/07 .......................... 1,300,000 1,391,000
Leslie's Poolmart sr nts
10.375% 7/15/04 .......................... 500,000 530,000
Petro Stopping Centers sr nts
10.50% 2/1/07 ............................ 350,000 375,375
Shoppers Food Warehouse sr nts
9.75% 6/15/04 ............................ 100,000 111,500
US Office Products 9.75% 6/15/08 ............ 900,000 902,250
----------
7,473,375
----------
36
<PAGE>
DELCHESTER SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
TELECOMMUNICATIONS - 21.52%
Adelphia Communications sr nts
9.50% 2/15/04 ............................. $ 40,437 $ 42,964
Advanstar Communications sr sub nts
9.25% 5/1/08 .............................. 450,000 454,500
American Mobile/AMSC Acquisition
units 12.25% 4/1/08 ....................... 700,000 665,000
Arch Communications sr nts
12.75% 7/1/07 ............................. 500,000 505,000
Arch Communications sr disc nts
0.00%/10.875% 3/15/08 ..................... 1,500,000 847,500
BTI Telecom sr nts 10.50% 9/15/07 ............ 1,500,000 1,515,000
Convergent Communication units
13.00% 4/1/08 ............................. 500,000 500,000
DTI Holdings units
0.00%/12.50% 3/1/08 ....................... 1,250,000 665,625
ECONOPHONE sr disc nts
0.00%/11.00% 2/15/08 ...................... 800,000 458,000
FirstWorld Communication units
0.00%/13.00% 4/15/08 ...................... 1,500,000 675,000
GST USA sr disc nts 0.00% 12/15/05 ........... 1,000,000 810,000
Global Crossing Holdings Limited
sr nts 9.625% 5/15/08 ..................... 900,000 939,375
Iridium LLC/Capital sr unsec nts
11.25% 7/15/05 ............................ 1,400,000 1,407,000
JACOR Communications unsec
sr sub nts 9.75% 12/15/06 ................. 500,000 546,250
KMC Telecom Holdings units
0.00%/12.50% 2/15/08 ...................... 1,500,000 903,750
McCaw International sr disc nts
0.00%/13.00% 4/15/07 ...................... 600,000 396,000
Metrocall unsec sr sub nts
10.375% 10/1/07 ........................... 1,475,000 1,530,313
Metronet Communications sr disc nts
9.95% 6/15/08 ............................. 1,300,000 802,750
Nextel Communications sr disc nts
0.00%/10.65% 9/15/07 ...................... 1,650,000 1,117,875
Nextel Communications sr disc nts
0.00%/9.95% 2/15/08 ....................... 2,500,000 1,600,000
Nextlink Communications sr disc nts
0.00%/9.45% 4/15/08 ....................... 700,000 430,500
Nextlink Communications sr nts
9.625% 10/1/07 ............................ 500,000 516,250
Paging Network sr sub nts
10.125% 8/1/07 ............................ 450,000 470,250
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
RCN sr nts 10.00% 10/15/07 ................... $ 200,000 $ 206,000
RCN sr disc nts
0.00%/11.125% 10/15/07 .................... 2,750,000 1,760,000
RCN sr disc nts 0.00%/9.80% 2/15/08 .......... 1,900,000 1,159,000
TELEX Communications sr sub nts
10.50% 5/1/07 ............................. 750,000 690,000
Teligent sr disc nts
0.00%/11.50% 3/1/08 ....................... 3,750,000 2,071,875
Teligent sr nts 11.50% 12/1/07 ............... 1,000,000 1,017,500
Twenty First Century
Telecommunications Group sr disc nts
0.00%/12.25% 2/15/08 ...................... 900,000 508,500
USA Mobile Communication sr nts
14.00% 11/1/04 ............................ 500,000 550,000
Viatel units 0.00%/12.50% 4/15/08 ............ 775,000 461,125
Viatel units 11.25% 4/15/08 .................. 300,000 315,000
-----------
26,537,902
-----------
TEXTILES, APPAREL & FURNITURE - 0.60%
CMI Industries sr sub nts
9.50% 10/1/03 ............................. 410,000 430,500
Scovill Fasteners sr unsec nts
11.25% 11/30/07 ........................... 300,000 313,500
-----------
744,000
-----------
TRANSPORTATION & SHIPPING - 1.10%
Ameriking sr nts 10.75% 12/1/06 .............. 450,000 486,000
Navigator Gas Transport nts
10.50% 6/30/07 ............................ 400,000 417,000
Navigator Gas Transport unit
12.00% 6/30/07 ............................ 400,000 458,000
-----------
1,361,000
-----------
MISCELLANEOUS - 7.47%
ATC Group Services sr sub nts
12.00% 1/15/08 ............................ 550,000 517,000
Accuride sr sub nts 9.25% 2/1/08 ............. 1,000,000 1,005,000
Comforce Operating sr nts
12.00% 12/1/07 ............................ 450,000 487,125
Derby Cycle/Lyon sr nts
10.00% 5/15/08 ............................ 1,300,000 1,300,000
EV International sr sub nts
11.00% 3/15/07 ............................ 1,000,000 943,750
Eagle-Picher Industries sr sub nts
9.375% 3/1/08 ............................. 1,000,000 1,018,750
37
<PAGE>
DELCHESTER SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
MISCELLANEOUS (CONTINUED)
Grove Worldwide sr sub nts
9.25% 5/1/08 ............................ $ 1,050,000 $ 1,050,000
Highwaymaster Communications
sr nts 13.75% 9/15/05 ................... 400,000 300,000
Home Interiors and Gifts sr sub nts
10.125% 6/1/08 .......................... 800,000 818,000
Indesco International sr sub nts
9.75% 4/15/08 ........................... 500,000 493,750
Iron Age Holdings sr disc nts
0.00%/12.125% 5/1/09 .................... 500,000 287,500
Paragon Corporate Holdings sr nts
9.625% 4/1/08 ........................... 200,000 184,000
Perry-Judd sr sub nts
10.625% 12/15/07 ........................ 500,000 527,500
Thermadyne Holdings debs
0.00%/12.50% 6/1/08 ..................... 500,000 277,500
-----------
9,209,875
-----------
TOTAL CORPORATE BONDS
(COST $111,849,416) ..................... 112,512,288
-----------
NUMBER
OF SHARES
PREFERRED STOCKS - 2.43%
CABLE, MEDIA & PUBLISHING - 0.23%
PEGASUS Communications unit pik
12.75% 1/1/02 ............................. 2,500 289,375
-----------
289,375
-----------
TELECOMMUNICATIONS - 0.90%
Dobson Communications ........................ 250 272,500
Echostar Communications ...................... 3,642 400,653
Nextel Communications ........................ 412 431,171
-----------
1,104,324
-----------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
PREFERRED STOCKS (CONTINUED)
UTILITIES - 0.53%
El Paso Electric pik ........................ 6,250 $ 657,812
---------
657,812
---------
Miscellaneous - 0.77%
Eagle-Picher Holdings ....................... 9,000 524,250
Nebco Evans Holding pik pfd ................. 4,106 424,988
---------
949,238
---------
Total Preferred Stock
(cost $2,839,463) ......................... 3,000,749
---------
CONVERTIBLE PREFERRED STOCKS - 0.61%
E.Spire Communications ...................... 6,910 754,918
---------
Total Convertible Preferred Stocks
(cost $706,812) ........................... 754,918
---------
WARRANTS - 0.05%
*American Banknote ........................... 18,723 15,000
*Cellnet Data Systems ........................ 13,671 40,000
*Electronic Retailing System ................. 500 5,000
*Gothic Energy ............................... 1,400 1,400
*Highway Master .............................. 600 1,200
*McCaw International ......................... 31 150
---------
TOTAL WARRANTS (COST $44,190) ............. 62,750
---------
RIGHTS - 0.01%
*Terex-Appreciation Rights ................... 800 17,600
---------
TOTAL RIGHTS (COST $2,000) ................ 17,600
---------
38
<PAGE>
DELCHESTER SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
REPURCHASE AGREEMENTS - 5.05%
With Chase Manhattan 5.85% 7/01/98
(dated 6/30/98 collateralized by
$2,330,000 U.S. Treasury Notes
5.375% due 06/30/03,
market value $2,318,674) ...................... $2,272,000 $2,272,000
With J.P. Morgan Securties 5.75%
7/01/98 (dated 6/30/98 collateralized
by $1,852,000 U.S. Treasury Notes
6.25% due 2/15/03, market value
$1,945,798 and $73,000 U.S. Treasury Notes
5.50% due 3/31/03,
market value $73,466) ......................... 1,976,000 1,976,000
With PaineWebber 5.75% 7/01/98
(dated 6/30/98 collateralized by
$1,300,000 U.S. Treasury Notes
6.00% due 8/31/99, market value
$1,335,029 and $663,000 U.S.
Treasury Notes 5.875% due 1/31/99,
market value $680,943) ........................ 1,976,000 1,976,000
----------
TOTAL REPURCHASE AGREEMENTS
(COST $6,224,000) ............................. 6,224,000
----------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 99.39% (COST $121,665,881)................................................... $122,572,305
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.61%......................................................... 746,079
------------
NET ASSETS APPLICABLE TO 12,938,149 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $9.53 PER SHARE - 100.00% ..................................................................... $123,318,384
============
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $0.01 par value, 1,000,000,000 shares authorized to the Fund with 50,000,000 shares
allocated to the Series ..................................................................................... $120,950,204
Undistributed net investment income ............................................................................ 131,239
Accumulated net realized gain on investments ................................................................... 1,330,517
Net unrealized appreciation on investments ..................................................................... 906,424
------------
Total net assets ............................................................................................... $123,318,384
============
</TABLE>
- --------------
* Non-income producing security.
** The interest rate shown for this security is the effective yield.
Summary of Abbreviations:
cv--convertible mtg--mortgage sec--secured
debs--debentures nts--notes sr--senior
def--deferred pfd--preferred sub--subordinated
disc--discount pik--pay-in-kind unsec--unsecured
See accompanying notes
39
<PAGE>
DELAWARE GROUP PREMIUM FUND-STRATEGIC INCOME SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
CORPORATE BONDS - 50.79%
AEROSPACE & DEFENSE - 0.16%
Roller Bearing Company of America
9.625% 06/15/07 ............................. $ 25,000 $ 25,438
--------
25,438
--------
AUTOMOBILES & AUTOMOTIVE PARTS - 2.37%
Prestolite Electric sr nts
9.625% 02/01/08 ............................. 75,000 76,688
Stanadyne Automotive sr sub nts
10.25% 12/15/07 ............................. 300,000 307,500
--------
384,188
--------
BANKING, FINANCE & INSURANCE - 2.35%
American Banknote 11.25% 12/01/07 .............. 300,000 304,500
Credit Foncier de France sr sub nts
8.00% 01/14/02 .............................. 25,000 26,531
Southern Investments United Kingdom
sr notes 6.375% 11/15/01 .................... 50,000 50,313
--------
381,344
--------
BUILDINGS & MATERIALS - 1.71%
American Builders and Contractors
sr sub nts 10.625% 05/15/07 ................. 100,000 103,625
American Standard sr nts
7.375% 02/01/08 ............................. 100,000 98,500
Burke Industries unsec sr nts
10.00% 05/15/07 ............................. 25,000 25,375
Reliant Building sr sub nts
10.875% 05/01/04 ............................ 50,000 50,375
--------
277,875
--------
CABLE, MEDIA & PUBLISHING - 2.34%
American Lawyer Media sr nts
9.75% 12/15/07 .............................. 100,000 104,000
STC Broadcasting sr sub nts
11.00% 03/15/07 ............................. 150,000 166,500
Shop At Home 11.00% 04/01/05 ................... 50,000 51,938
Turner Broadcasting sr nts
8.375% 07/01/13 ............................. 50,000 57,500
--------
379,938
--------
CHEMICALS - 2.05%
Huntsman sr sub nts 9.50% 07/01/07 ............. 25,000 25,625
Octel Developments 10.00% 05/01/06 ............. 300,000 306,750
--------
332,375
--------
<PAGE>
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
CORPORATE BONDS (CONTINUED)
COMPUTERS & TECHNOLOGY - 0.25%
Decisionone Holdings Units
11.50% 08/01/08 ................................. $ 25,000 $ 15,000
Precise Technology sr sub nts
11.125% 06/15/07 ................................ 25,000 25,625
--------
40,625
--------
ELECTRONICS & ELECTRICAL EQUIPMENT - 0.16%
Insilco sr sub nts 10.25% 08/15/07 ................. 25,000 26,219
--------
26,219
--------
ENERGY - 1.85%
First Wave Marine sr nts
11.00% 02/01/08 ................................. 100,000 106,750
Panaco sr nts 10.625% 10/01/04 ..................... 50,000 50,000
Transamerican Energy sr nts
11.50% 06/15/02 ................................. 125,000 118,750
United Refining sr unsec nts
10.75% 06/15/07 ................................. 25,000 24,125
--------
299,625
--------
ENVIRONMENTAL SERVICES - 0.16%
Hydrochem Industrial Services
10.375% 08/01/07 ................................ 25,000 25,563
--------
25,563
--------
FOOD, BEVERAGE & TOBACCO - 3.29%
Big V Supermarkets sr sub nts
11.00% 02/15/04 ................................. 150,000 157,688
CFP Holdings sr nts
11.625% 01/15/04 ................................ 100,000 94,000
Community Distributors sr nts
10.25% 10/15/04 ................................. 100,000 103,250
DiGiorgio sr nts 10.00% 06/15/07 ................... 75,000 74,625
Fleming sr sub nts
10.50% 12/01/04 ................................. 100,000 103,500
--------
533,063
--------
HEALTHCARE & PHARMACEUTICALS - 0.21%
Cardinal Health notes
6.00% 01/15/06 .................................. 35,000 34,344
--------
34,344
--------
40
<PAGE>
STRATEGIC INCOME SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
CORPORATE BONDS (CONTINUED)
INDUSTRIAL MACHINERY - 3.91%
Alliance Laundry Systems sr sub nts
9.625% 05/01/08 ............................. $ 300,000 $ 301,500
Embotelladora Andina
7.00% 10/01/07 .............................. 50,000 46,313
Morris Materials Handling sr nts
9.50% 04/01/08 .............................. 200,000 186,500
U.S. Filter 6.375% 05/15/01 .................... 100,000 100,125
----------
634,438
----------
LEISURE, LODGING & ENTERTAINMENT - 2.49%
Silver Cinemas sr sub nts
10.50% 04/15/05 ............................. 300,000 307,125
Trump Atlantic City 11.25% 05/01/06 ............ 100,000 97,500
----------
404,625
----------
METALS & MINING - 7.51%
Anker Coal Group sr nts
9.75% 10/01/07 .............................. 100,000 92,000
Doe Run Resources sr nts
11.25% 03/15/05 ............................. 300,000 310,125
JTM Industries sr sub nts
10.00% 04/15/08 ............................. 150,000 152,250
Keystone Consolidated sr nts
9.625% 08/01/07 ............................. 125,000 128,750
Metallurg sr nts 11.00% 12/01/07 ............... 100,000 104,750
Schuff Steel sr nts 10.50% 06/01/08 ............ 175,000 175,875
WHX sr nts 10.50% 04/15/05 ..................... 250,000 255,000
----------
1,218,750
----------
PACKAGING & CONTAINERS - 0.63%
Riverwood International sr
sub nts 10.875% 04/01/08 .................... 100,000 101,500
----------
101,500
----------
PAPER & FOREST PRODUCTS - 0.16%
Drypers sr nts 10.25% 06/15/07 ................. 25,000 25,844
----------
25,844
----------
RETAIL - 3.51%
Advance Stores sr sub nts
10.25% 04/15/08 ............................. 300,000 311,625
Leslie's Poolmart sr nts
10.375% 07/15/04 ............................ 25,000 26,500
US Office Products sr sub nts
9.75% 06/15/08 .............................. 100,000 100,250
Wilsons The Leather Expert sr
nts 11.25% 08/15/04 ......................... 125,000 131,250
----------
569,625
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
CORPORATE BONDS (CONTINUED)
TELECOMMUNICATIONS - 6.25%
Iridium LLC/Capital
11.25% 07/15/05 ........................... $ 350,000 $ 351,750
MCI Communications nts
6.125% 04/15/02 ........................... 50,000 49,938
Metrocall sr sub nts
10.375% 10/01/07 .......................... 150,000 155,625
Paging Network sr sub nts
10.125% 08/01/07 .......................... 150,000 156,750
Rural Cellular sr sub nts
9.625% 05/15/08 ........................... 300,000 299,250
----------
1,013,313
----------
TEXTILES, APPAREL & FURNITURE - 2.73%
Anvil Knitwear sr nts
10.875% 03/15/07 .......................... 100,000 103,625
Riddell Sports sr nts
10.50% 07/15/07 ........................... 25,000 26,188
Scovill Fasteners sr nts
11.25% 11/30/07 ........................... 300,000 313,500
----------
443,313
----------
TRANSPORTATION & SHIPPING - 0.64%
Chemical Leaman sr nts
10.375% 06/15/05 .......................... 50,000 52,875
Continental Airlines Pass Thru
Certificates 6.80% 01/02/09 ............... 50,000 50,813
----------
103,688
----------
MISCELLANEOUS - 6.06%
Derby Cycle/Lyon Cycle sr nts
10.00% 05/15/08 ........................... 300,000 300,000
EV International 11.00% 03/15/07 ............. 300,000 283,125
Highwaymaster Communications sr
nts 13.75% 09/15/05 ....................... 100,000 75,000
Norton McNaughton sr nts
12.50% 06/01/05 ........................... 150,000 150,750
Sony unsec nts 6.125% 03/04/03 ............... 70,000 70,438
Spinnaker Industries sr nts
10.75% 10/15/06 ........................... 100,000 104,000
----------
983,313
----------
TOTAL CORPORATE BONDS
(COST $8,258,533) ......................... 8,239,006
----------
41
<PAGE>
STRATEGIC INCOME SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
FOREIGN BONDS - 24.01%
AUSTRALIA - 2.26%
Bank of Austria
10.875% 11/17/04 ...........................A$ 200,000 $ 153,276
Queensland Treasury
8.00% 08/14/01 ............................ 130,000 86,259
Toyota Finance Australia
7.00% 12/05/01 ............................ 200,000 127,887
-----------
367,422
-----------
CANADA - 2.17%
Government of Canada
10.25% 03/15/14 ...........................C$ 100,000 102,541
Nippon Telegraph and Telephone
10.25% 10/19/99 ........................... 150,000 108,074
Quebec Hydroelectric
11.00% 02/09/99 ........................... 200,000 140,692
-----------
351,307
-----------
GREECE - 2.51%
Ford Credit Europe 9.45% 03/01/00 ............ 80,000,000 259,288
Hellenic Republic
11.00% 11/26/99 ...........................Grd 45,000,000 147,327
-----------
406,615
-----------
ITALY - 1.35%
Italian Government
9.50% 02/01/01 ............................Itl 250,000,000 157,223
Toyota Motor Credit 7.50% 11/05/01 ........... 100,000,000 60,999
-----------
218,222
-----------
MEXICO - 0.96%
Mexican Cetes Government
0.00% 10/22/98 ............................Mxp 150,000 155,704
-----------
155,704
-----------
NEW ZEALAND - 4.72%
New Zealand Government
6.50% 02/15/00 ............................NZ$ 40,000 20,459
New Zealand Government
8.00% 04/15/04 ............................ 500,000 274,435
New Zealand Government
8.00% 11/15/06 ............................ 750,000 426,022
New Zealand Government
10.00% 03/15/02 ........................... 80,000 45,405
-----------
766,321
-----------
<PAGE>
Principal Market
Amount* Value
(U.S.$)
FOREIGN BONDS (CONTINUED)
POLAND - 0.70%
International Bank of Reconstruction
& Development 19.50% 06/17/99 .................Plz 400,000 $ 114,410
---------
114,410
---------
SOUTH AFRICA - 4.35%
Electric Supply Communication
11.00% 6/01/08 ................................Sa 2,100,000 270,982
Republic of South Africa
12.50% 01/15/02 ............................... 1,900,000 290,449
Republic Of South Africa Series 184
12.50% 12/21/06 ............................... 1,000,000 144,392
---------
705,823
---------
SWEDEN - 2.60%
Swedish Government
8.00% 08/15/04 ................................Sk 800,000 122,182
Swedish Government
9.00% 04/20/09 ................................ 1,000,000 166,386
Swedish Government
10.25% 05/05/00 ............................... 400,000 55,204
Swedish Government
10.25% 05/05/03 ............................... 500,000 77,693
---------
421,465
---------
UNITED KINGDOM - 2.39%
DeBeer-Bearer Centenary Finance
8.25% 03/31/09 ................................Gbp 50,000 88,717
Korea Electric Power 8.50% 04/28/07 .............. 50,000 67,763
Northumbrian Water Group
9.25% 02/01/02 ................................ 40,000 70,473
UK Treasury 8.00% 06/10/03 ....................... 90,000 160,488
---------
387,441
---------
TOTAL FOREIGN BONDS
(COST $4,298,190) ............................. 3,894,730
---------
42
<PAGE>
STRATEGIC INCOME SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
AGENCY MORTGAGE-BACKED SECURITIES - 5.74%
Federal Home Loan Mortgage
6.00% 11/01/26 ................................ $ 19,005 $ 18,713
Federal Home Loan Mortgage
7.00% 03/01/11 ................................ 70,186 71,765
Federal National Mortgage Association
6.50% 06/01/28 ................................ 453,816 452,114
Federal National Mortgage Association
7.00% 01/01/13 ................................ 69,388 70,710
Federal National Mortgage Association
7.50% 03/01/28 ................................ 99,848 102,531
Government National Security
Federation 7.50% 12/15/27 ..................... 212,204 215,849
--------
TOTAL AGENCY MORTGAGE-BACKED
SECURITIES (COST $924,658) .................... 931,682
--------
ASSET-BACKED SECURITIES - 5.21%
AFC Home Equity Loan Trust
series 92-5 A 7.20% 02/15/08 .................. 65,220 65,924
California Infrastructure
Series 97-1 A3 6.28% 09/25/05 ................. 45,000 45,436
Chase Manhattan RV Owner Trust
Series 97-A A9 6.32% 12/15/08 ................. 100,000 100,960
CIT Group Securitization Series 95-2 A2
6.00% 05/15/26 ................................ 17,109 17,124
CIT RV Trust Series 98-A
A 5 6.12% 07/15/14 ............................ 100,000 101,218
Countrywide Home Equity Loan Series
97-1 A4 6.95% 05/25/21 ........................ 50,000 50,675
EQCC Series 98-2 A3F
6.23% 03/15/13 ................................ 100,000 100,031
First Plus Home Loan Trust
Series 98-3 A3 6.27% 05/10/13 ................. 100,000 100,281
First Union Residential Securitization
Trust Series 96-2 A2 6.46% 09/25/11 ........... 25,000 25,008
First USA Credit Card Master Trust
Series 97-10 A 5.75% 09/17/03 ................. 70,000 70,021
MetLife Capital Equipment Loan Trust
Series 97-AA 6.85% 05/20/08 ................... 50,000 51,385
NationsCredit Grantor Trust Series
97-2 A1 6.35% 04/15/14 ........................ 40,904 41,248
<PAGE>
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
ASSET-BACKED SECURITIES (CONTINUED)
Oakwood Mortgage Investors Series
97-C A3 6.65% 11/15/27 .......................... $ 25,000 $ 25,396
World Omni Automobile Lease
Securitization Series 97-B A4
6.20% 11/25/03 .................................. 50,000 50,290
--------
Total Asset-Backed Securities
(cost $839,710) ................................. 844,997
--------
COLLATERALIZED MORTGAGE OBLIGATIONS - 5.49%
Asset Securitization Corporation
Series 96-D2 A1 6.92% 02/14/29 .................. 47,954 49,925
Series 97-D5 A2 6.81% 02/14/41 .................. 75,000 77,660
Federal Home Loan Mortgage
Corporation Structured Pass Through
Securities 6.50% 01/25/15 ....................... 100,000 100,781
General Electric Capital
Mortgage Services
Series 98-6 1A6 6.75% 04/25/28 .................. 100,000 99,937
Lehman Brothers Commerical
Conduit Mortgage Trust 98-C1C
6.68% 02/18/08 .................................. 50,000 50,406
Lehman Large Loan 97-LLI A1
6.79% 06/12/04 .................................. 49,263 50,564
Nomura Asset Securities Series
95-MD3 A1A 8.17% 03/04/20 ....................... 21,312 22,148
Residential Accredit Loans
Series 98-QS9 A3 6.75% 08/25/28 ................. 100,000 100,484
Series 96-QS3 AI3 7.29% 06/25/26 ................ 48,090 48,196
Series 96-QS2 A6 7.45% 04/25/23 ................. 25,000 25,457
Series 97-QS6 A5 7.50% 06/25/12 ................. 98,267 102,696
Series 96-A4 A5 7.50% 04/25/27 .................. 130,000 131,788
Residential Funding Mortgage-
Series 94-S10 6.50% 3/25/09 ..................... 30,000 30,498
--------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS (COST $882,285) ..................... 890,540
--------
43
<PAGE>
STRATEGIC INCOME SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
MUNICIPAL BONDS - 0.58%
Philadelphia, Pennsylvania Authority
For Industrial Development Tax Claim
Revenue-Class A 6.488% 06/15/04 ............... $ 92,929 $ 93,800
--------
Total Municipal Bonds
(cost of $92,958) ............................. 93,800
--------
U.S. TREASURY OBLIGATIONS - 4.02%
U.S. Treasury Note 5.625% 05/15/08 ............... 330,000 334,587
U.S. Treasury Note 6.375% 8/15/27 ................ 100,000 109,984
U.S. Treasury Note 7.25% 08/15/04 ................ 190,000 206,657
--------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $644,880) ............................... 651,228
--------
Number
of shares
PREFERRED STOCKS - 0.32%
Telecommunications - 0.32%
Twenty-first Century Telecom Group ............... 50 $52,375
--------
Total Preferred Stocks
(cost $50,000) ................................ 52,375
--------
WARRANTS - 0.04%
Banking, Finance & Insurance - 0.02%
American Banknote ................................ 3,744 3,000
--------
3,000
--------
MISCELLANEOUS - 0.02%
HighwayMaster Communications ..................... 2,000 4,000
--------
4,000
--------
TOTAL WARRANTS
(cost $5,011) ................................. 7,000
--------
44
<PAGE>
STRATEGIC INCOME SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT* VALUE
(U.S.$)
REPURCHASE AGREEMENTS - 4.71%
With Chase Manhattan 5.85%
07/01/98 (dated 06/30/98,
collateralized by $286,000
U.S. Treasury Notes
5.375% due 06/30/03,
market value $284,246) ...................... $279,000 $279,000
With JP Morgan Securities 5.75%
07/01/98 (dated 06/30/98,
collateralized by $227,000
U.S. Treasury Notes
6.25% due 02/15/03, market
value $238,525 and $9,000
U.S. Treasury Notes
5.50% due 03/31/03,
market value $9,006) ........................ 242,000 242,000
With PaineWebber 5.75%
07/01/98 (dated 06/30/98,
collateralized by $81,000
U.S. Treasury Notes
5.875% due 01/31/99, market
value $83,477 and $159,000
U.S. Treasury Notes
6.00% due 08/31/99,
market value $163,661) ...................... 242,000 242,000
--------
TOTAL REPURCHASE AGREEMENTS
(COST $763,000) ............................. 763,000
--------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 100.91% (cost $16,759,225)......................................................... $16,368,358
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (0.91%)............................................................. (147,454)
-----------
NET ASSETS APPLICABLE TO 1,540,826 SHARES ($0.01 par value) OUTSTANDING:
EQUIVALENT TO $10.53 PER SHARE - 100.00% .......................................................................... $16,220,904
===========
Components of net assets at June 30, 1998:
Common stock, $0.01 par value 1,000,000,000 shares authorized to the Fund with
50,000,000 shares allocated to the Series........................................................................... $16,093,188
Undistributed net investment income ** ............................................................................... 500,248
Accumulated net realized gain on investments.......................................................................... 23,380
Net unrealized depreciation on investments ........................................................................... (395,912)
-----------
Total net assets...................................................................................................... $16,220,904
===========
</TABLE>
- ----------------
* Principal amount is stated in the currency in which each bond is denominated.
A$ - Australian Dollars Itl - Italian Lira Sa - South African Rand
C$ - Canadian Dollars Mxp - Mexican Peso Sk - Swedish Kroner
Gbp - British Pounds NZ$ - New Zealand Dollars $ - U.S. Dollars
Grd - Greek Drakma Plz - Polish Zolty
** Undistributed net investment income includes net realized gains (losses) on
foreign currencies. Net realized gains (losses) on foreign currencies are
treated as net investment income in accordance with provisions of the Internal
Revenue Code.
nts - notes
sr - senior
sub - subordinated
unsec - unsecured
See accompanying notes
45
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-CAPITAL RESERVES SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
PRINCIPAL MARKET
AMOUNT VALUE
ASSET-BACKED SECURITIES - 19.69%
American Finance Home Equity
Series 94-2A 6.950% 6/25/24 ................. $ 122,223 $ 122,443
Series 91-1A 8.00% 7/25/06 .................. 21,036 21,440
California Infrastructure PG&E
Series 97-1 A4 6.16% 6/25/03 ................ 555,000 557,664
Chase Manhattan RV Owner Trust
Series 1997-A A9 6.320% 12/15/08 ............ 170,000 171,632
CIT RV Trust
Series 97-A A5 6.25% 11/17/02 ............... 510,000 512,754
Series 98-A A5 6.12% 7/15/14 ................ 440,000 445,363
EQCC Home Equity Loan Trust
Series 1998-2 A3F 6.230% 3/15/13 ............ 410,000 410,128
First Plus Home Loan Trust
6.27% 5/10/13 ............................... 550,000 551,547
First Union Residential Securitization
Trust Series 96-2 A2 6.46% 9/25/11 .......... 615,000 615,185
First USA Credit Card Master Trust
5.746% 9/17/03 .............................. 125,000 125,038
MetLife Capital Equipment Loan
Trust Series 97-A A 6.85% 5/20/08 ........... 410,000 421,357
NationsCredit Grantor Trust
Series 96-1 A 5.85% 9/15/11 ................. 171,508 170,290
Series 97-2 A1 6.35% 4/15/14 ................ 290,415 292,865
The Money Store Home Equity Trust
Series 97-C AH5 6.59% 2/15/15 ............... 500,000 504,700
Series 97-A A9 7.235% 4/15/27 ............... 385,000 395,318
UCFC Home Equity Loan
Series 96-B1 A3 7.30% 4/15/14 ............... 625,000 628,750
World Omni Automobile Lease
Securitization Series 97-B A4
6.20% 11/25/03 .............................. 440,000 442,552
----------
Total Asset-Backed Securties
(cost $6,341,311) ........................... 6,389,026
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
COLLATERALIZED MORTGAGE
OBLIGATION - 24.74%
Asset Securitization Corporation
Series 97-D5 A2 6.814% 2/14/41 .......... $ 430,000 $ 445,252
Series 97-D5 A3 6.864% 2/14/41 .......... 320,000 329,900
Series 96-D2 A1 6.92% 2/14/29 ........... 623,404 649,022
Series 96-D3 A1B 7.21% 10/13/26 ......... 400,000 420,438
Series 97-D4 A1A 7.35% 4/14/29 .......... 341,225 352,794
GE Capital Mortgage Services
Series 94-2 A3 5.40% 1/25/09 ............ 61,148 60,922
Series 98-6 1A6 6.75% 4/25/28 ........... 335,000 334,791
LB Commercial Conduit Mortgage
Trust 1998-Cl C 6.68% 2/18/08 ........... 420,000 423,413
Lehman Large Loan
Series 97-LLI A1 6.79% 6/12/04 .......... 428,591 439,909
Mortgage Capital Funding
Series 96-MC2 C 7.224% 9/20/06 .......... 275,000 285,484
Conti Series 96-MCI D
7.80% 4/15/06 ........................... 360,000 385,313
Nomura Asset Securities
Series 93-1 A1 6.68% 12/15/01 ........... 341,846 347,081
Series 95-MD3 A1A 8.17% 3/4/20 .......... 447,561 465,114
Series 96-MD5 A3 7.64% 4/13/36 .......... 460,000 498,094
Residential Accredit Loans
Series 98-QS9 A5 6.75% 8/25/28 .......... 400,000 401,938
Series 96-QS3 AI3 7.29% 6/25/26 ......... 166,466 166,832
Series 96-QS2 A6 7.45% 4/25/23 .......... 540,000 549,872
Series 97-QS6 A5 7.50% 6/25/12 .......... 529,870 553,755
Series 97-QS3 A3 7.50% 4/25/27 .......... 540,000 547,425
Residential Funding Mortgage
Securities Series 96-S9
A10 7.25% 4/25/26 ....................... 358,637 369,862
----------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS (COST $7,833,430) ........... 8,027,211
----------
46
<PAGE>
CAPITAL RESERVES SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
MORTGAGE BACKED SECURITIES - 17.13%
Federal National Mortgage Association
6.00% 4/1/13 .............................. $ 447,655 $ 443,179
Federal National Mortgage Association
6.50% 4/1/13 .............................. 1,440,000 1,449,240
Federal National Mortgage Association
6.50% 6/1/28 .............................. 1,534,000 1,528,746
Federal National Mortgage Association
7.00% 5/1/12 .............................. 411,680 420,299
Federal National Mortgage Association
7.50% 6/1/28 .............................. 315,000 323,663
Federal National Mortgage Association
9.50% 11/1/21 to 5/1/22 ................... 121,847 132,508
Government National Mortgage
Association 6.50%
12/15/23 to 1/15/24 ....................... 360,430 361,895
Government National Mortgage
Association 7.00% 5/15/28 ................. 756,701 769,234
Government National Mortgage
Association 12.00%
6/20/14 to 2/20/16 ........................ 111,350 127,424
----------
TOTAL MORTGAGE BACKED SECURITIES
(COST $5,527,060) ......................... 5,556,188
----------
CORPORATE BONDS - 16.94%
Banco Santiago S.A. 7.00% 7/18/07 ............ 270,000 249,075
Consumers Energy 6.375% 2/1/08 ............... 335,000 330,813
Continental Airlines 6.80% 1/2/09 ............ 450,000 457,313
Credit Foncier de France
8.00% 1/14/02 ............................. 340,000 360,825
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
Firstar Capital 8.32% 12/15/26 ............... $ 315,000 $ 348,461
General Electric Capital
5.89% 5/11/01 ............................. 675,000 676,688
Great Western Financial
8.206% 2/1/27 ............................. 500,000 546,875
Health and Retirement Properties
6.75% 12/18/02 ............................ 360,000 362,250
Raytheon 5.95% 3/15/01 ....................... 570,000 570,000
Sony 6.125% 3/4/03 ........................... 700,000 704,375
Southern Investments
UK 6.375% 11/15/01 ........................ 320,000 322,000
Summit Bank 6.75% 6/15/03 .................... 430,000 439,138
U.S. Bancorp 8.125% 5/15/02 .................. 120,000 127,950
----------
TOTAL CORPORATE BONDS
(COST $5,389,932) ......................... 5,495,763
----------
U.S. TREASURY OBLIGATIONS - 17.76%
U.S. Treasury Notes 5.375% 2/15/01 ........... 220,000 219,267
U.S. Treasury Notes 5.500% 3/31/00 ........... 3,000,000 3,000,210
U.S. Treasury Notes 6.25% 4/30/01 ............ 45,000 45,846
U.S. Treasury Notes 6.375% 1/15/00 ........... 2,465,000 2,496,330
----------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $5,765,832) ......................... 5,761,653
----------
MUNICIPAL BONDS - 1.13%
Philadelphia, Pennsylvania Authority
For Industrial Development
Series 97 A 6.488% 6/15/04 ................ 362,423 365,822
----------
TOTAL MUNICIPAL BONDS
(COST $362,423) ........................... 365,822
----------
47
<PAGE>
CAPITAL RESERVES SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
REPURCHASE AGREEMENTS - 3.19%
With Chase Manhattan 5.85%
7/01/98 (dated 6/30/98
collateralized by $384,000
U.S. Treasury Notes
5.375% due 06/30/03,
market value $385,949) .................... $ 378,000 $ 378,000
With J.P. Morgan Securties 5.75%
7/01/98 (dated 6/30/98
collateralized by $308,000
U.S. Treasury Notes
6.25% due 2/15/03,
market value $323,883 and $12,000
U.S. Treasury Notes
5.50% due 3/31/03,
market value $12,229) ..................... 329,000 329,000
With PaineWebber 5.75% 7/01/98
(dated 6/30/98 collateralized by
$216,000 U.S. Treasury Notes
6.00% due 8/15/99,
market value $222,219 and
$110,000 U.S. Treasury Notes
5.875% due 1/31/99,
market value $113,345) .................... 329,000 329,000
----------
TOTAL REPURCHASE AGREEMENTS
(COST $1,036,000) ......................... 1,036,000
----------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES (COST $32,255,988) - 100.58%............................................... $32,631,663
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (0.58%)................................................... (188,519)
-----------
NET ASSETS APPLICABLE TO 3,307,902 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $9.81 PER SHARE - 100.00% ................................................................. $32,443,144
===========
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $0.01 par value, 1,0000,000,000 shares authorized to the Fund
with 50,000,000 shares allocated to the Series........................................................... $33,527,108
Accumulated net realized loss on investments ............................................................... (1,459,639)
Net unrealized appreciation of investments.................................................................. 375,675
-----------
Total net assets ........................................................................................... $32,443,144
===========
</TABLE>
See accompanying notes
48
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.-CASH RESERVE SERIES
STATEMENT OF NET ASSETS
June 30, 1998 (Unaudited)
PRINCIPAL MARKET
AMOUNT VALUE
COMMERCIAL PAPER - 77.53%
FINANCIAL SERVICES - 50.05%
ABN-AMRO North American Finance
5.52% 07/13/98 ........................ $ 1,000,000 $ 998,160
ABN-AMRO North American Finance
5.44% 08/25/98 ........................ 500,000 495,844
Allianz Of America Financial
5.51% 08/27/98 ........................ 2,000,000 1,982,553
Banc One Funding 5.52% 07/06/98 .......... 1,000,000 999,233
Bankers Trust New York
5.50% 09/08/98 ........................ 1,000,000 989,458
Bankers Trust New York
5.51% 10/15/98 ........................ 500,000 491,888
Ciesco L.P. 5.50% 07/28/98 ............... 1,500,000 1,493,813
Commonwealth Bank of Australia
5.37% 07/29/98 ........................ 1,000,000 995,823
Corporate Asset Funding
5.52% 07/24/98 ........................ 500,000 498,237
Corporate Asset Funding
5.53% 08/19/98 ........................ 1,500,000 1,488,710
Fleet Funding 5.52% 07/14/98 ............. 1,721,000 1,717,569
General Re 5.50% 09/03/98 ................ 880,000 871,396
General Electric Capital
5.35% 08/17/98 ........................ 1,000,000 993,015
ING America Insurance Holdings
5.47% 07/30/98 ........................ 1,000,000 995,594
ING America Insurance Holdings
5.50% 08/28/98 ........................ 500,000 495,569
MetLife Funding 5.51% 07/10/98 ........... 1,500,000 1,497,934
MetLife Funding 5.54% 08/24/98 ........... 500,000 495,845
Rabobank USA Financial
5.48% 10/20/98 ........................ 1,000,000 983,103
Swiss Re Financial Products
5.48% 07/14/98 ........................ 1,000,000 998,021
Swiss Re Financial Products
5.52% 07/27/98 ........................ 500,000 498,010
Teco Finance 5.47% 07/10/98 .............. 1,000,000 998,633
USAA Capital 5.52% 08/17/98 .............. 2,000,000 1,985,587
-----------
TOTAL FINANCIAL SERVICES ................. 22,963,995
-----------
INDUSTRIAL - 9.17%
Golden Peanut 5.50% 10/22/98 ............. 1,000,000 982,736
Henkel 5.46% 07/23/98 .................... 250,000 249,166
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
COMMERCIAL PAPER (CONTINUED)
INDUSTRIAL (CONTINUED)
Henkel 5.48% 11/17/98 ...................... $ 1,000,000 $ 978,841
Unilever NV 5.50% 07/29/98 ................. 1,000,000 995,722
Zeneca Wilmington 5.53% 07/07/98 ........... 1,000,000 999,078
-----------
Total Industrial ........................... 4,205,543
-----------
MORTGAGE BANKERS & BROKERS - 18.31%
Bear Stearns 5.51% 10/20/98 ................ 2,000,000 1,966,022
CS First Boston 5.50% 10/21/98 ............. 1,500,000 1,474,333
Goldman Sachs Group
5.62% 08/04/98 .......................... 1,000,000 994,692
Goldman Sachs Group
5.48% 10/07/98 .......................... 1,000,000 985,082
Merrill Lynch 5.48% 07/07/98 ............... 1,000,000 999,087
Merrill Lynch 5.53% 09/10/98 ............... 1,000,000 989,094
Morgan Stanley Group
5.51% 08/19/98 .......................... 1,000,000 992,500
-----------
TOTAL MORTGAGE
BANKERS & BROKERS ....................... 8,400,810
-----------
TOTAL COMMERCIAL PAPER ..................... 35,570,348
-----------
CERTIFICATES OF DEPOSIT - 6.54%
DOMESTIC - 4.36%
Harris Trust & Savings Bank
5.55% 07/07/98 .......................... 1,000,000 1,000,000
Wilmington Trust 5.58% 07/06/98 ............ 1,000,000 1,000,000
-----------
2,000,000
-----------
YANKEE - 2.18%
Canada Imperial Bank Commerce
5.82% 09/30/98 .......................... 1,000,000 999,981
-----------
999,981
-----------
TOTAL CERTIFICATES OF DEPOSIT .............. 2,999,981
-----------
FLOATING RATE NOTES* - 6.54%
Federal Home Loan Bank
5.601% 10/23/98 ......................... 500,000 500,000
Federal Home Loan Bank
5.481% 02/26/99 ......................... 500,000 499,839
Key Bank, New York 5.86% 10/02/98 .......... 1,000,000 1,000,139
Student Loan Marketing Association
5.621% 11/12/98 ......................... 1,000,000 1,000,000
-----------
TOTAL FLOATING RATE NOTES .................. 2,999,978
-----------
49
<PAGE>
CASH RESERVE SERIES
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
REPURCHASE AGREEMENTS - 9.16%
With Chase Manhattan 5.85%
07/01/98 (dated 06/30/98,
collateralized by $1,574,000
U.S. Treasury Notes
5.375% due 06/30/03,
market value $1,566,520) ...................... $1,535,000 $1,535,000
With J.P. Morgan Securities 5.75%
07/01/98 (dated 06/30/98,
collateralized by $49,000
U.S. Treasury Notes
5.50% due 03/31/03, market value
$49,635 and $1,251,000
U.S. Treasury Notes
6.25% due 02/15/03,
market value $1,314,602) ...................... 1,335,000 1,335,000
With PaineWebber 5.75%
07/01/98 (dated 06/30/98
collateralized by $448,000
U.S. Treasury Notes
5.875% due 01/31/99, market value
$460,052 and $878,000 U.S. Treasury Notes
6.00% due 08/15/99,
market value $901,960) ........................ 1,335,000 1,335,000
----------
TOTAL REPURCHASE AGREEMENTS ...................... 4,205,000
----------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES - 99.77% (COST $45,775,307)................................................... $45,775,307
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.23% ....................................................... 104,520
-----------
NET ASSETS APPLICABLE TO 4,587,983 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $10.00 PER SHARE - 100.00% ................................................................... $45,879,827
===========
</TABLE>
- --------------
*Floating Rate Notes - The interest rate shown is the rate as of June 30,
1998 and the maturity shown is the longer of the next interest readjustment
date or the date the principal amount shown can be recovered through demand.
See accompanying notes
50
<PAGE>
Delaware Group Premium Fund, Inc.
Statements Of Operations
Six Months Ended 6/30/98 (Unaudited)
<TABLE>
<CAPTION>
Small Cap Social
Trend Delcap Value Awareness
Series Series Series Series
------ ------ ------ ------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Interest ......................................... $370,109 $219,169 $197,527 $29,008
Dividends ........................................ 192,964 111,392 855,292 73,735
Foreign tax withheld ............................. -- -- -- --
------------ ------------ ------------ ------------
563,073 330,561 1,052,819 102,743
------------ ------------ ------------ ------------
EXPENSES:
Management fees .................................. 493,193 426,987 355,367 44,874
Custodian fees ................................... 5,983 10,080 5,367 3,225
Dividend disbursing and transfer
agent fees and expenses ....................... 2,225 6,300 1,150 348
Registration fees ................................ 4,930 5,820 7,099 2,025
Reports and statements to shareholders ........... 15,363 7,740 4,500 625
Accounting and administration .................... 32,135 29,532 22,948 2,842
Professional fees ................................ 5,485 8,250 4,752 943
Directors' fees .................................. 1,136 1,020 863 195
Taxes (other than taxes on income) ............... 4,062 5,187 3,709 312
Other ............................................ 5,399 26,363 2,357 --
------------ ------------ ------------ ------------
569,911 527,279 408,112 55,389
Less expenses absorbed by Delaware Management
Company or Delaware
International Advisers Ltd. ................... (46,127) (62,791) (24,654) (6,898)
------------ ------------ ------------ ------------
Total Expenses ................................... 523,784 464,488 383,458 48,491
------------ ------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) ..................... 39,289 (133,927) 669,361 54,252
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investment transactions ....................... 6,019,563 5,330,095 653,062 (17,673)
Foreign currencies ............................ -- -- -- --
------------ ------------ ------------ ------------
Net realized gain (loss) ......................... 6,019,563 5,330,095 653,062 (17,673)
------------ ------------ ------------ ------------
Net change in unrealized appreciation/depreciation
on investments and foreign currencies ......... 7,551,020 9,160,639 (1,155,239) 1,431,323
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES ........................ 13,570,583 14,490,734 (502,177) 1,413,650
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS .............. $13,609,872 $14,356,807 $167,184 $1,467,902
============ ============ ============ ============
</TABLE>
* Date of commencement of operations.
See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Decatur 5/1/98*
Total to 6/30/98
Devon Return REIT Delaware
INVESTMENT INCOME: Series Series Series Series
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Interest .............................................. $70,057 $363,596 $4,410 $1,377,955
Dividends ............................................. 195,895 5,847,831 21,598 890,225
Foreign tax withheld .................................. -- -- -- --
--------- ---------- -------- ----------
265,952 6,211,427 26,008 2,268,180
--------- ---------- -------- ----------
EXPENSES:
Management fees ....................................... 76,709 1,435,536 2,505 450,530
Custodian fees ........................................ 549 6,654 64 12,004
Dividend disbursing and transfer
agent fees and expenses ............................ 901 4,000 10 3,056
Registration fees ..................................... 80 33,200 200 2,350
Reports and statements to shareholders ................ 691 31,923 158 4,811
Accounting and administration ......................... 6,067 115,837 145 39,236
Professional fees ..................................... 348 26,625 158 10,050
Directors' fees ....................................... 268 3,510 50 1,275
Taxes (other than taxes on income) .................... 32 22,186 125 6,250
Other ................................................. 379 8,792 53 5,390
--------- ---------- -------- ----------
86,024 1,688,263 3,468 534,952
Less expenses absorbed by Delaware Management
Company or Delaware
International Advisers Ltd. ........................ -- -- (684) --
--------- ---------- -------- ----------
Total Expenses ........................................ 86,024 1,688,263 2,784 534,952
--------- ---------- -------- ----------
NET INVESTMENT INCOME (LOSS) .......................... 179,928 4,523,164 23,224 1,733,228
--------- ---------- -------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investment transactions ............................ 547,095 29,122,870 (350) 6,086,111
Foreign currencies ................................. -- -- -- --
--------- ---------- -------- ----------
Net realized gain (loss) .............................. 547,095 29,122,870 (350) 6,086,111
--------- ---------- -------- ----------
Net change in unrealized appreciation/depreciation
on investments and foreign currencies .............. 1,631,143 7,686,692 (43,392) 4,900,177
--------- ---------- -------- ----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES ............................. 2,178,238 36,809,562 (43,742) 10,986,288
--------- ---------- -------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS ................... $2,358,166 $41,332,726 ($20,518) $12,719,516
========= =========== ======== ===========
</TABLE>
- -----------------
* Date of commencement of operations.
See accompanying notes
51
<PAGE>
Delaware Group Premium Fund, Inc.
Statements of Operations
Six Months Ended 6/30/98 (Unaudited)
<TABLE>
<CAPTION>
Convertible Emerging International Global
Securities Markets Equity Bond
Series Series Series Series
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ......................................... $62,065 $19,499 $395,753 $590,712
Dividends ........................................ 58,195 91,843 3,822,537 --
Foreign tax withheld ............................. -- (4,404) (309,356) --
------------ ------------ ------------ ------------
120,260 106,938 3,908,934 590,712
------------ ------------ ------------ ------------
EXPENSES:
Management fees .................................. 19,706 38,077 831,739 67,154
Custodian fees ................................... -- 9,508 46,290 4,850
Dividend disbursing and transfer
agent fees and expenses ....................... 26 300 3,553 320
Registration fees ................................ 107 602 5,800 842
Reports and statements to shareholders ........... -- 900 10,200 2,501
Accounting and administration .................... 1,254 1,480 57,249 3,798
Professional fees ................................ 71 700 14,980 6,246
Directors' fees .................................. 162 173 1,824 272
Taxes (other than taxes on income) ............... -- 341 3,688 --
Other ............................................ -- 2,742 2,306 2,732
------------ ------------ ------------ ------------
21,326 54,823 977,629 88,715
Less expenses absorbed by Delaware Management
Company or Delaware
International Advisers Ltd. ................... (43) (10,035) (28,730) (15,983)
------------ ------------ ------------ ------------
Total Expenses ................................... 21,283 44,788 948,899 72,732
------------ ------------ ------------ ------------
NET INVESTMENT INCOME ............................ 98,977 62,150 2,960,035 517,980
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investment transactions ....................... 134,018 30,874 (44,005) (71,799)
Foreign currencies ............................ -- 1,062 (59,400) 10,271
------------ ------------ ------------ ------------
Net realized gain (loss) ......................... 134,018 31,936 (103,405) (61,528)
Net change in unrealized appreciation/depreciation
on investments and foreign currencies ......... (179,300) (1,256,594) 22,239,285 (326,690)
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES ........................ (45,282) (1,224,658) 22,135,880 (388,218)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS .............. $53,695 ($1,162,508) $25,095,915 $129,762
============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Strategic Capital Cash
Delchester Income Reserves Reserve
Series Series Series Series
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ......................................... $5,472,921 $552,169 $1,032,335 $1,043,667
Dividends ........................................ 134,909 -- -- --
Foreign tax withheld ............................. -- (446) -- --
----------- ----------- ----------- -----------
5,607,830 551,723 1,032,335 1,043,667
----------- ----------- ----------- -----------
EXPENSES:
Management fees .................................. 336,278 43,327 93,189 92,746
Custodian fees ................................... 7,000 2,894 5,600 1,344
Dividend disbursing and transfer
agent fees and expenses ....................... 2,066 300 2,083 720
Registration fees ................................ 600 1,525 1,400 1,062
Reports and statements to shareholders ........... 4,112 300 5,879 1,400
Accounting and administration .................... 27,168 3,175 7,575 9,050
Professional fees ................................ 3,950 978 1,577 997
Directors' fees .................................. 1,021 204 431 447
Taxes (other than taxes on income) ............... 4,599 663 2,924 2,908
Other ............................................ 2,825 809 1,240 2,080
----------- ----------- ----------- -----------
389,619 54,175 121,898 112,754
Less expenses absorbed by Delaware Management
Company or Delaware
International Advisers Ltd. ................... -- (1,451) -- --
----------- ----------- ----------- -----------
Total Expenses ................................... 389,619 52,724 121,898 112,754
----------- ----------- ----------- -----------
NET INVESTMENT INCOME ............................ 5,218,211 498,999 910,437 930,913
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investment transactions ....................... 1,328,770 23,328 116,016 --
Foreign currencies ............................ -- 5,500 -- --
----------- ----------- ----------- -----------
Net realized gain (loss) ......................... 1,328,770 28,828 116,016 --
Net change in unrealized appreciation/depreciation
on investments and foreign currencies ......... (1,516,476) (369,469) (76,426) --
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES ........................ (187,706) (340,641) 39,590 --
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS .............. $5,030,505 $158,358 $950,027 $930,913
=========== =========== =========== ===========
</TABLE>
See accompanying notes
52
<PAGE>
Delaware Group Premium Fund, Inc.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Six Months
Ended Year Ended Year
6/30/98 Ended 6/30/98 Ended
Trend 12/31/97 DelCap 12/31/97
Series Trend Series DelCap
(Unaudited) Series (Unaudited) Series
----------- ------ ----------- ------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) ..................... $39,289 $132,509 ($133,927) ($59,352)
Net realized gain (loss) on investments
and foreign currencies ........................ 6,019,563 2,089,208 5,330,095 9,871,869
Net change in unrealized appreciation/depreciation
on investments ................................ 7,551,020 13,569,520 9,160,639 3,608,725
------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations ..................... 13,609,872 15,791,237 14,356,807 13,421,242
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ............................ (135,410) (204,613) -- --
Net realized gain on investment transactions ..... (2,315,513) (736,608) (9,882,425) (4,513,513)
------------ ------------ ------------ ------------
(2,450,923) (941,221) (9,882,425) (4,513,513)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ........................ 55,112,486 56,666,244 7,878,048 28,573,142
Net asset value of shares issued upon reinvestment
of dividends from net investment income and net
realized gain on investment transactions ...... 2,450,923 941,222 9,882,425 4,513,513
------------ ------------ ------------ ------------
57,563,409 57,607,466 17,760,473 33,086,655
Cost of shares repurchased ....................... (38,876,712) (10,604,885) (9,668,383) (11,440,355)
------------ ------------ ------------ ------------
Increase in net assets derived
from capital share transactions ............... 18,686,697 47,002,581 8,092,090 21,646,300
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS ....................... 29,845,646 61,852,597 12,566,472 30,554,029
------------ ------------ ------------ ------------
NET ASSETS:
Beginning of period .............................. 118,276,090 56,423,493 110,454,505 79,900,476
------------ ------------ ------------ ------------
End of period .................................... $148,121,736 $118,276,090 $123,020,977 $110,454,505
============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Six Months Six Months 5/1/97*
Ended 6/30/98 Year Ended Ended 6/30/98 to
Small Cap 12/31/97 Social 12/31/97
Value Small Cap Awareness Social
Series Value Series Awareness
(Unaudited) Series (Unaudited) Series
----------- ------ ----------- ------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
From Operations:
Net investment income (loss) ..................... $669,361 $629,715 $54,252 $30,982
Net realized gain (loss) on investments
and foreign currencies ........................ 653,062 2,326,391 (17,673) 119,612
Net change in unrealized appreciation/depreciation
on investments ................................ (1,155,239) 10,895,658 1,431,323 637,990
------------ ----------- ---------- ----------
Net increase in net assets
resulting from operations ..................... 167,184 13,851,764 1,467,902 788,584
------------ ----------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ............................ (638,385) (197,794) (33,744) --
Net realized gain on investment transactions ..... (2,340,745) (1,672,255) (124,853) --
------------ ----------- ---------- ----------
(2,979,130) (1,870,049) (158,597) --
------------ ----------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ........................ 22,803,910 49,431,262 8,472,594 8,018,354
Net asset value of shares issued upon reinvestment
of dividends from net investment income and net
realized gain on investment transactions ...... 2,979,130 1,870,049 158,597 --
------------ ----------- ---------- ----------
25,783,040 51,301,311 8,631,191 8,018,354
Cost of shares repurchased ....................... (5,058,815) (2,894,623) (2,414,554) (1,006,833)
------------ ----------- ---------- ----------
Increase in net assets derived
from capital share transactions ............... 20,724,225 48,406,688 6,216,637 7,011,521
------------ ----------- ---------- ----------
NET INCREASE IN NET ASSETS ....................... 17,912,279 60,388,403 7,525,942 7,800,105
------------ ----------- ---------- ----------
NET ASSETS:
Beginning of period .............................. 84,071,143 23,682,740 7,800,105 --
------------ ----------- ---------- ----------
End of period .................................... $101,983,422 $84,071,143 $15,326,047 $7,800,105
============ =========== ========== ==========
</TABLE>
- ------------------
* Date of commencement of operations.
See accompanying notes
53
<PAGE>
Delaware Group Premium Fund, Inc.
Statements of Changes in Net Assets (Continued)
<TABLE>
<CAPTION>
Six Months Six Months 5/1/98*
Ended 5/1/97* Ended 6/30/98 Year Ended to
6/30/98 to Decatur Total 12/31/97 6/30/98
Devon 12/31/97 Return Decatur Total REIT
Series Devon Series Return Series
(Unaudited) Series (Unaudited) Series (Unaudited)
----------- ------ ----------- ------ ----------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
<S> <C> <C> <C> <C> <C>
Net investment income ............................ $179,928 $105,114 $4,523,164 $5,543,484 $23,224
Net realized gain (loss) on investments .......... 547,095 273,934 29,122,870 23,181,744 (350)
Net change in unrealized appreciation/depreciation
on investments ................................ 1,631,143 1,160,816 7,686,692 40,216,861 (43,392)
----------- ----------- ------------ ------------ ----------
Net increase (decrease) in net assets
resulting from operations ..................... 2,358,166 1,539,864 41,332,726 68,942,089 (20,518)
----------- ----------- ------------ ------------ ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ............................ (109,925) -- (3,187,258) (5,726,790) --
Net realized gain on investment transactions ..... (281,684) -- (23,162,228) (14,788,457) --
----------- ----------- ------------ ------------ ----------
(391,609) -- (26,349,486) (20,515,247) --
----------- ----------- ------------ ------------ ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ........................ 20,340,628 16,373,026 108,534,796 187,531,270 2,494,414
Net asset value of shares issued upon reinvestment
of dividends from net investment income and net
realized gain on investment transactions ...... 391,609 -- 26,349,486 20,515,247 --
----------- ----------- ------------ ------------ ----------
20,732,237 16,373,026 134,884,282 208,046,517 2,494,414
Cost of shares repurchased ....................... (2,635,170) (1,259,399) (15,479,897) (21,717,966) (144)
----------- ----------- ------------ ------------ ----------
Increase in net assets derived
from capital share transactions ............... 18,097,067 15,113,627 119,404,385 186,328,551 2,494,270
----------- ----------- ------------ ------------ ----------
NET INCREASE IN NET ASSETS ....................... 20,063,624 16,653,491 134,387,625 234,755,393 2,473,752
----------- ----------- ------------ ------------ ----------
NET ASSETS:
Beginning of period .............................. 16,653,491 -- 401,401,970 166,646,577 --
----------- ----------- ------------ ------------ ----------
End of period .................................... $36,717,115 $16,653,491 $535,789,595 $401,401,970 $2,473,752
=========== =========== ============ ============ ==========
</TABLE>
- -------------------
* Date of commencement of operations.
See accompanying notes
54
<PAGE>
Delaware Group Premium Fund, Inc.
Statements Of Changes In Net Assets (Continued)
<TABLE>
<CAPTION>
Six Months Six Months Six Months
Ended Year Ended 6/30/98 5/1/97* To Ended 6/30/98 5/1/97* To
6/30/98 Ended Convertible 12/31/97 Emerging 12/31/97
Delaware 12/31/97 Securities Convertible Markets Emerging
Series Delaware Series Securities Series Markets
(Unaudited) Series (Unaudited) Series (Unaudited) Series
----------- -------- ------------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ............................. $1,733,228 $2,840,175 $98,977 $106,880 $62,150 $26,256
Net realized gain on investments
and foreign currencies ......................... 6,086,111 11,425,156 134,018 24,638 31,936 128,987
Net change in unrealized appreciation/depreciation
on investments and foreign currencies .......... 4,900,177 9,349,683 (179,300) 251,809 (1,256,594) (1,023,671)
------------ ------------ --------- --------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations ...................... 12,719,516 23,615,014 53,695 383,327 (1,162,508) (868,428)
------------ ------------ --------- --------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ............................. (2,481,307) (2,590,776) (110,178) -- (19,005) --
Net realized gain on investment transactions ...... (11,439,840) (4,899,878) (25,287) -- (139,368) --
------------ ------------ --------- --------- ---------- ----------
(13,921,147) (7,490,654) (135,465) -- (158,373) --
------------ ------------ --------- --------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ......................... 27,549,804 36,224,621 3,482,982 3,639,322 1,718,141 7,423,878
Net asset value of shares issued upon reinvestment
of dividends from net investment income and net
realized gain on investment transactions ....... 13,921,147 7,490,655 135,465 -- 158,373 --
------------ ------------ --------- --------- ---------- ----------
41,470,951 43,715,276 3,618,447 3,639,322 1,876,514 7,423,878
Cost of shares repurchased ........................ (2,309,612) (7,566,399) (258,779) (101,272) (628,882) (779,666)
------------ ------------ --------- --------- ---------- ----------
Increase in net assets derived
from capital share transactions ................ 39,161,339 36,148,877 3,359,668 3,538,050 1,247,632 6,644,212
------------ ------------ --------- --------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS ............. 37,959,708 52,273,237 3,277,898 3,921,377 (73,249) 5,775,784
------------ ------------ --------- --------- ---------- ----------
NET ASSETS:
Beginning of period ............................... 127,675,344 75,402,107 3,921,377 -- 5,775,784 --
------------ ------------ --------- --------- ---------- ----------
End of period ..................................... $165,635,052 $127,675,344 $7,199,275 $3,921,377 $5,702,535 $5,775,784
============ ============ ========= ========= ========== ==========
</TABLE>
- --------------
* Date of commencement of operations.
See accompanying notes
55
<PAGE>
Delaware Group Premium Fund, Inc.
Statements Of Changes In Net Assets (Continued)
<TABLE>
<CAPTION>
Six Months Six Months Six Months
Ended 6/30/98 Year Ended Ended 6/30/98 Year Ended Ended Year
International 12/31/97 Global 12/31/97 6/30/98 Ended
Equity International Bond Global Delchester 12/31/97
Series Equity Series Bond Series Delchester
(Unaudited) Series (Unaudited) Series (Unaudited) Series
----------- -------- ------------- ----------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ............................. $2,960,035 $3,977,084 $517,980 $880,323 $5,218,211 $7,487,122
Net realized gain (loss) on investments
and foreign currencies ......................... (103,405) 2,577,473 (61,528) (30,733) 1,328,770 3,130,833
Net change in unrealized appreciation/depreciation
on investments and foreign currencies .......... 22,239,285 1,459,920 (326,690) (543,397) (1,516,476) (168,776)
----------- ----------- ---------- ---------- ----------- -----------
Net increase in net assets
resulting from operations ...................... 25,095,915 8,014,477 129,762 306,193 5,030,505 10,449,179
----------- ----------- ---------- ---------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ............................. (7,202,615) (4,927,079) (710,028) (605,362) (5,162,840) (7,411,254)
Net realized gain on investment transactions ...... -- -- (16,416) (83,855) (32,038) --
----------- ----------- ---------- ---------- ----------- -----------
(7,202,615) (4,927,079) (726,444) (689,217) (5,194,878) (7,411,254)
----------- ----------- ---------- ---------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ......................... 25,786,771 70,066,962 3,130,163 12,524,510 24,912,059 32,766,122
Net asset value of shares issued upon reinvestment
of dividends from net investment income and net
realized gain on investment transactions ....... 7,202,615 4,927,079 726,444 689,217 4,939,518 7,413,795
----------- ----------- ---------- ---------- ----------- -----------
32,989,386 74,994,041 3,856,607 13,213,727 29,851,577 40,179,917
Cost of shares repurchased ........................ (12,827,298) (10,645,895) (1,780,700) (5,425,925) (5,243,702) (12,007,637)
----------- ----------- ---------- ---------- ----------- -----------
Increase in net assets derived
from capital share transactions ................ 20,162,088 64,348,146 2,075,907 7,787,802 24,607,875 28,172,280
----------- ----------- ---------- ---------- ----------- -----------
NET INCREASE IN NET ASSETS ........................ 38,055,388 67,435,544 1,479,225 7,404,778 24,443,502 31,210,205
----------- ----------- ---------- ---------- ----------- -----------
NET ASSETS:
Beginning of period ............................... 198,863,261 131,427,717 16,875,596 9,470,818 98,874,882 67,664,677
----------- ----------- ---------- ---------- ----------- -----------
End of period ..................................... $236,918,649 $198,863,261 $18,354,821 $16,875,596 $123,318,384 $98,874,882
=========== =========== ========== ========== =========== ===========
</TABLE>
See accompanying notes
56
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED 6/30/98 5/1/97* TO ENDED 6/30/98 YEAR ENDED ENDED 6/30/98 YEAR ENDED
STRATEGIC 12/31/97 CAPITAL 12/31/97 CASH 12/31/97
INCOME STRATEGIC RESERVES CAPITAL RESERVE CASH
SERIES INCOME SERIES RESERVES SERIES RESERVE
(UNAUDITED) SERIES (UNAUDITED) SERIES (UNAUDITED) SERIES
------------ ----------- ------------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ................ $498,999 $245,976 $910,437 $1,760,693 $930,913 $1,496,752
Net realized gain on investments
and foreign currencies ............ 28,828 19,293 116,016 47,064 -- --
Net change in unrealized appreciation/
depreciation on investments and
foreign currencies ................ (369,469) (26,443) (76,426) 237,399 -- --
----------- ------------ ------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations ......... 158,358 238,826 950,027 2,045,156 930,913 1,496,752
----------- ------------ ------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ................ (246,632) -- (910,437) (1,761,161) (930,913) (1,496,752)
Net realized gain on investment
transactions ...................... (22,836) -- -- -- -- --
----------- ------------ ------------ ------------ ------------ ------------
(269,468) -- (910,437) (1,761,161) (930,913) (1,496,752)
----------- ------------ ------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ............ 10,396,740 9,406,419 7,745,303 6,092,500 46,811,501 83,437,024
Net asset value of shares issued
upon reinvestment of dividends
from net investment income and
net realized gain on investment
transactions ...................... 269,468 -- 869,331 1,762,129 879,750 1,497,151
----------- ------------ ------------ ------------ ------------ ------------
10,666,208 9,406,419 8,614,634 7,854,629 47,691,251 84,934,175
Cost of shares repurchased ........... (2,940,381) (1,039,058) (5,387,912) (6,729,405) (32,522,600) (80,701,553)
----------- ------------ ------------ ------------ ------------ ------------
Increase in net assets derived
from capital share transactions ... 7,725,827 8,367,361 3,226,722 1,125,224 15,168,651 4,232,622
----------- ------------ ------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS ........... 7,614,717 8,606,187 3,266,312 1,409,219 15,168,651 4,232,622
----------- ------------ ------------ ------------ ------------ ------------
NET ASSETS:
Beginning of period .................. 8,606,187 -- 29,176,832 27,767,613 30,711,176 26,478,554
----------- ------------ ------------ ------------ ------------ ------------
End of period ........................ $16,220,904 $8,606,187 $32,443,144 $29,176,832 $45,879,827 $30,711,176
=========== ============ ============ ============ ============ ============
</TABLE>
- -----------------------------------
* Date of commencement of operations.
See accompanying notes
57
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.
FINANCIAL HIGHLIGHTS
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TREND SERIES
----------------------------------------------------------------------
SIX MONTHS 12/27/93(1)
ENDED YEAR ENDED DECEMBER 31, TO
6/30/98(3) 1997 1996 1995 1994 12/31/93
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $17.380 $14.560 $14.020 $10.160 $10.200 $10.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................... 0.006 0.019 0.050 0.098 0.079 none
Net realized and unrealized
gain (loss) on investments ............. 1.866 3.031 1.380 3.852 (0.119) 0.200
------- ------- ------ ------- ------ ------
Total from investment operations ......... 1.872 3.050 1.430 3.950 (0.040) 0.200
------- ------- ------ ------- ------ ------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income ..... (0.020) (0.050) (0.090) (0.090) none none
Distributions from net realized gain
on investment transactions ............. (0.342) (0.180) (0.800) none none none
------- ------- ------ ------- ------ ------
Total dividends and distributions ........ (0.362) (0.230) (0.890) (0.090) none none
------- ------- ------ ------- ------ ------
Net asset value, end of period .............. $18.890 $17.380 $14.560 $14.020 $10.160 $10.200
======= ======= ======= ======= ======= =======
Total return ................................ 10.98% 21.37% 11.00% 39.21% (0.39%) 2.00%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) .. $148,122 $118,276 $56,423 $20,510 $7,087 $204
Ratio of expenses to average net assets .. 0.80% 0.80% 0.80% 0.80% 0.80% (2)
Ratio of expenses to average net
assets prior to expense limitation ..... 0.87% 0.88% 0.92% 0.96% 1.47% (2)
Ratio of net investment income to
average net assets ..................... 0.06% 0.16% 0.56% 1.03% 1.63% (2)
Ratio of net investment income to
average net assets prior to
expense limitation .................... (0.01%) 0.08% 0.44% 0.87% 0.96% (2)
Portfolio turnover ....................... 145% 125% 112% 76% 59% (2)
Average commission rate paid(4) .......... $0.0599 $0.0599 $0.0600 N/A N/A N/A
</TABLE>
- ----------------------
(1)Date of initial public offering; ratios have been annualized and total return
has not been annualized.
(2)The ratio of expenses and net investment income to average net assets and
portfolio turnover have been omitted as management believes that such ratios
are not meaningful due to the limited net assets of this Series.
(3)Ratios have been annualized and total return has not been annualized.
(4)Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.
See accompanying notes
58
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
DELCAP SERIES
------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/98(1) 1997 1996 1995 1994 1993
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $17.270 $15.890 $15.130 $11.750 $12.240 $11.120
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(2) ............. (0.019) (0.010) (0.015) 0.072 0.069 0.056
Net realized and unrealized
gain (loss) on investments ................ 1.944 2.260 2.030 3.378 (0.499) 1.214
-------- -------- -------- -------- ------- --------
Total from investment operations ............ 1.925 2.250 2.015 3.450 (0.430) 1.270
-------- -------- -------- -------- ------- --------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income ........ none none (0.070) (0.070) (0.060) (0.020)
Distributions from net realized gain
on investment transactions ................ (1.465) (0.870) (1.185) none none (0.130)
-------- -------- -------- -------- ------- --------
Total dividends and distributions ........... (1.465) (0.870) (1.255) (0.070) (0.060) (0.150)
-------- -------- -------- -------- ------- --------
Net asset value, end of period ................. $17.730 $17.270 $15.890 $15.130 $11.750 $12.240
======== ======== ======== ======== ======= ========
Total return .................................. 13.62% 14.90% 14.46% 29.53% (3.54%) 11.56%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ..... $123,021 $110,455 $79,900 $58,123 $39,344 $33,180
Ratio of expenses to average net assets ..... 0.82% 0.80% 0.80% 0.80% 0.80% 0.80%
Ratio of expenses to average net
assets prior to expense limitation ........ 0.93% 0.87% 0.82% 0.85% 0.88% 1.00%
Ratio of net investment income to
average net assets ........................ (0.24%) (0.06%) (0.11%) 0.61% 0.64% 0.67%
Ratio of net investment income to
average net assets prior to expense
limitation ............................... (0.35%) (0.13%) (0.13%) 0.56% 0.56% 0.47%
Portfolio turnover .......................... 137% 134% 85% 73% 43% 57%
Average commission rate paid(3) ............. $0.0600 $0.0600 $0.0600 N/A N/A N/A
</TABLE>
- ------------------------
(1)Ratios have been annualized and total return has not been annualized.
(2)Per share information for the period ended December 31, 1997 was based on the
average shares outstanding method.
(3)Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.
See accompanying notes
59
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
SMALL CAP VALUE SERIES
----------------------------------------------------------------------
SIX MONTHS 12/27/93(1)
ENDED YEAR ENDED DECEMBER 31, TO
6/30/98(3) 1997 1996 1995 1994 12/31/93
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $17.920 $14.500 $12.470 $10.290 $10.210 $10.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.114 0.122 0.112 0.192 0.148 none
Net realized and unrealized
gain (loss) on investments ................ 0.016 4.338 2.548 2.208 (0.068) 0.210
-------- -------- -------- -------- ------- --------
Total from investment operations ............ 0.130 4.460 2.660 2.400 0.080 0.210
-------- -------- -------- -------- ------- --------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income ........ (0.135) (0.110) (0.180) (0.150) none none
Distributions from net realized gain
on investment transactions ............... (0.495) (0.930) (0.450) (0.070) none none
-------- -------- -------- -------- ------- --------
Total dividends and distributions ........... (0.630) (1.040) (0.630) (0.220) none none
-------- -------- -------- -------- ------- --------
Net asset value, end of period ................ $17.420 $17.920 $14.500 $12.470 $10.290 $10.210
======== ======== ======== ======== ======= ========
Total return ................................... 0.82% 32.91% 22.55% 23.85% 0.78% 2.10%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ..... $101,983 $84,071 $23,683 $11,929 $6,291 $210
Ratio of expenses to average net assets ..... 0.82% 0.80% 0.80% 0.80% 0.80% (2)
Ratio of expenses to average net assets
prior to expense limitation .............. 0.87% 0.90% 0.99% 0.96% 1.41% (2)
Ratio of net investment income to average
net assets ................................ 1.42% 1.24% 1.28% 2.13% 2.62% (2)
Ratio of net investment income to average
net assets prior to expense limitation .... 1.37% 1.14% 1.09% 1.97% 2.01% (2)
Portfolio turnover .......................... 41% 41% 84% 71% 26% (2)
Average commission rate paid(4) ............. $0.0600 $0.0600 $0.0600 N/A N/A N/A
</TABLE>
- ---------------------
(1)Date of initial public offering; total return has not been annualized.
(2)The ratio of expenses and net investment income to average net assets and
portfolio turnover have been omitted as management believes that such ratios
are not meaningful due to the limited net assets of this Series.
(3)Ratios have been annualized and total return has not been annualized.
(4)Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.
See accompanying notes
60
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
SOCIAL AWARENESS SERIES DEVON SERIES
------------------------ ---------------------
SIX MONTHS 5/1/97(1) SIX MONTHS 5/1/97(1)
ENDED TO ENDED TO
6/30/98(2) 12/31/97 6/30/98(2) 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............ $12.840 $10.000 $12.730 $10.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.048 0.051 0.271 0.080
Net realized and unrealized
gain on investments ........................ 1.817 2.789 1.204 2.650
-------- -------- -------- --------
Total from investment operations ............. 1.865 2.840 1.475 2.730
-------- -------- -------- --------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income ......... (0.050) none (0.080) none
Distributions from net realized gain
on investment transactions ................. (0.185) none (0.205) none
-------- -------- -------- --------
Total dividends and distributions ............ (0.235) none (0.285) none
-------- -------- -------- --------
Net asset value, end of period ................. $14.470 $12.840 $13.920 $12.730
======== ======== ======== ========
Total return ................................... 14.82% 28.40% 11.83% 27.30%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ...... $15,326 $7,800 $36,717 $16,653
Ratio of expenses to average net assets ...... 0.82% 0.80% 0.68% 0.80%
Ratio of expenses to average net
assets prior to expense limitation ......... 0.93% 1.40% 0.68% 0.91%
Ratio of net investment income to
average net assets ......................... 0.91% 1.13% 1.42% 2.01%
Ratio of net investment income to
average net assets prior to expense
limitation ................................. 0.80% 0.53% 1.42% 1.90%
Portfolio turnover ........................... 24% 52% 43% 80%
Average commission rate paid(3) .............. $0.0396 $0.0334 $0.0600 $0.0568
</TABLE>
- -----------------------
(1)Date of initial public offering; ratios have been annualized and total return
has not been annualized.
(2)Ratios have been annualized and total return has not been annualized.
(3)Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.
See accompanying notes
61
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
DECATUR TOTAL RETURN SERIES
-------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/98(1) 1997 1996 1995 1994 1993
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............. $18.800 $15.980 $14.830 $11.480 $12.510 $11.220
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......................... 0.169 0.324 0.377 0.416 0.412 0.434
Net realized and unrealized
gain (loss) on investments ................... 1.548 4.216 2.398 3.574 (0.422) 1.266
-------- -------- -------- -------- -------- -------
Total from investment operations ............... 1.717 4.540 2.775 3.990 (0.010) 1.700
-------- -------- -------- -------- -------- -------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income ........... (0.127) (0.370) (0.420) (0.430) (0.420) (0.410)
Distributions from net realized gain
on investment transactions .................. (1.050) (1.350) (1.205) (0.210) (0.600) none
-------- -------- -------- -------- -------- -------
Total dividends and distributions .............. (1.177) (1.720) (1.625) (0.640) (1.020) (0.410)
-------- -------- -------- -------- -------- -------
Net asset value, end of period ................... $19.340 $18.800 $15.980 $14.830 $11.480 $12.510
======== ======== ======== ======== ======== =======
Total return ..................................... 9.71% 31.00% 20.72% 36.12% (0.20%) 15.45%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ........ $535,790 $401,402 $166,647 $109,003 $72,725 $65,519
Ratio of expenses to average net assets ........ 0.71% 0.71% 0.67% 0.69% 0.71% 0.75%
Ratio of expenses to average net
assets prior to expense limitation ........... 0.71% 0.71% 0.67% 0.69% 0.71% 0.76%
Ratio of net investment income to
average net assets .......................... 1.90% 2.02% 2.66% 3.24% 3.63% 3.95%
Ratio of net investment income to
average net assets prior to expense
limitation .................................. 1.90% 2.02% 2.66% 3.24% 3.63% 3.94%
Portfolio turnover ............................. 70% 54% 81% 85% 91% 67%
Average commission rate paid(2) ................ $0.0600 $0.0600 $0.0600 N/A N/A N/A
</TABLE>
- ---------------------------
(1)Ratios have been annualized and total return has not been annualized.
(2)Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.
See accompanying notes
62
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout the period
was as follows:
<TABLE>
<CAPTION>
REIT SERIES
------------
5/1/98(1)
TO 6/30/98
(UNAUDITED)
<S> <C>
Net asset value, beginning of period ............. $10.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................... 0.092
Net realized and unrealized
loss on investments ......................... (0.242)
-------
Total from investment operations .............. (0.150)
-------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income .......... none
Distributions from net realized gain
on investment transactions .................. none
-------
Total dividends and distributions ............. none
-------
Net asset value, end of period ................... $9.850
=======
Total return .................................... (1.50%)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ....... $2,474
Ratio of expenses to average net assets ....... 0.83%
Ratio of expenses to average net
assets prior to expense limitation .......... 1.03%
Ratio of net investment income to
average net assets .......................... 6.94%
Ratio of net investment income to
average net assets prior to expense
limitation .................................. 6.74%
Portfolio turnover ............................ 2%
Average commission rate paid(2) ............... $0.0423
</TABLE>
(1)Date of initial public offering; ratios have been annualized and total return
has not been annualized.
(2)Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.
See accompanying notes
63
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
DELAWARE SERIES
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/98(1) 1997 1996 1995 1994 1993
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $19.050 $16.640 $15.500 $12.680 $13.330 $13.550
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................ 0.179 0.435 0.530 0.509 0.437 0.328
Net realized and unrealized
gain (loss) on investments ................. 1.381 3.575 1.765 2.761 (0.447) 0.692
--------- -------- ------- ------- -------- -------
Total from investment operations ............. 1.560 4.010 2.295 3.270 (0.010) 1.020
--------- -------- ------- ------- -------- -------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income ......... (0.340) (0.530) (0.500) (0.450) (0.340) (0.460)
Distributions from net realized gain
on investment transactions ................. (1.600) (1.070) (0.655) none (0.300) (0.780)
--------- -------- ------- ------- -------- -------
Total dividends and distributions ............ (1.940) (1.600) (1.155) (0.450) (0.640) (1.240)
--------- -------- ------- ------- -------- -------
Net asset value, end of period .................. $18.670 $19.050 $16.640 $15.500 $12.680 $13.330
========= ======== ======= ======= ======== =======
Total return .................................... 9.04% 26.40% 15.91% 26.58% (0.15%) 8.18%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ...... $165,635 $127,675 $75,402 $63,215 $47,731 $37,235
Ratio of expenses to average net assets ...... 0.72% 0.67% 0.68% 0.69% 0.70% 0.80%
Ratio of expenses to average net
assets prior to expense limitation ......... 0.72% 0.67% 0.68% 0.69% 0.70% 0.89%
Ratio of net investment income to
average net assets ......................... 2.32% 2.85% 3.56% 3.75% 3.71% 3.33%
Ratio of net investment income to
average net assets prior to expense
limitation ................................. 2.32% 2.85% 3.56% 3.75% 3.71% 3.24%
Portfolio turnover ........................... 127% 67% 92% 106% 140% 162%
Average commission rate paid(2) .............. $0.0600 $0.0600 $0.0600 N/A N/A N/A
</TABLE>
- --------------------------
(1)Ratios have been annualized and total return has not been annualized.
(2)Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.
See accompanying notes
64
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
CONVERTIBLE SECURITIES SERIES
-----------------------------
SIX MONTHS 5/1/97(1)
ENDED TO
6/30/98(2) 12/31/97
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period ........... $11.660 $10.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ...................... 0.141 0.318
Net realized and unrealized
gain on investments ....................... 0.114 1.342
------- -------
Total from investment operations ............ 0.255 1.660
------- -------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income ........ (0.305) none
Distributions from net realized gain
on investment transactions ................ (0.070) none
------- -------
Total dividends and distributions ........... (0.375) none
------- -------
Net asset value, end of period ................ $11.540 $11.660
======= =======
Total return ................................... 2.28% 16.60%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ..... $7,199 $3,921
Ratio of expenses to average net assets ..... 0.82% 0.80%
Ratio of expenses to average net
assets prior to expense limitation ........ 0.82% 2.30%
Ratio of net investment income to
average net assets ....................... 3.80% 5.68%
Ratio of net investment income to
average net assets prior to expense
limitation ................................ 3.80% 4.18%
Portfolio turnover .......................... 104% 209%
Average commission rate paid(3) ............. $0.0589 $0.0597
</TABLE>
- -----------------------------
(1)Date of initial public offering; ratios have been annualized and total return
has not been annualized.
(2)Ratios have been annualized and total return has not been annualized.
(3)Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.
See accompanying notes
65
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
EMERGING MARKETS SERIES
-----------------------
SIX MONTHS 5/1/97(1)
ENDED TO
6/30/98(3) 12/31/97
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period ............. $8.880 $10.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(2) ...................... 0.088 0.060
Net realized and unrealized
loss on investments ......................... (1.518) (1.180)
------- -------
Total from investment operations .............. (1.430) (1.120)
------- -------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income .......... (0.030) none
Distributions from net realized gain
on investment transactions .................. (0.220) none
------- -------
Total dividends and distributions ............. (0.250) none
------- -------
Net asset value, end of period .................. $7.200 $8.880
======= =======
Total return ..................................... (16.33%) (11.20%)
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ....... $5,703 $5,776
Ratio of expenses to average net assets ....... 1.50% 1.50%
Ratio of expenses to average net
assets prior to expense limitation .......... 1.83% 2.45%
Ratio of net investment income to
average net assets .......................... 2.04% 0.89%
Ratio of net investment income to
average net assets prior to expense
limitation .................................. 1.71% (0.06%)
Portfolio turnover ............................ 26% 48%
Average commission rate paid(4) ............... $0.0074 $0.0036
</TABLE>
- -------------------------
(1)Date of initial public offering; ratios have been annualized and total return
has not been annualized.
(2)Per share information for the periods ended June 30, 1998 and December 31,
1997 was based on the average shares outstanding method.
(3)Ratios have been annualized and total return has not been annualized.
(4)Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.
See accompanying notes
66
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY SERIES
------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/98(1) 1997 1996 1995 1994 1993
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............. $15.520 $15.110 $13.120 $11.840 $11.620 $10.030
INCOME FROM INVESTMENT OPERATIONS:
Net investment income(2) ....................... 0.199 0.359 0.557 0.419 0.220 0.052
Net realized and unrealized gain
on investments and foreign currencies ........ 1.666 0.596 1.966 1.191 0.080 1.548
-------- -------- -------- ------- ------- -------
Total from investment operations ............... 1.865 0.955 2.523 1.610 0.300 1.600
-------- -------- -------- ------- ------- -------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income ........... (0.565) (0.545) (0.420) (0.240) (0.070) (0.010)
Distributions from net realized gain
on investment transactions ................... none none (0.113) (0.090) (0.010) none
-------- -------- -------- ------- ------- -------
Total dividends and distributions .............. (0.565) (0.545) (0.533) (0.330) (0.080) (0.010)
-------- -------- -------- ------- ------- -------
Net asset value, end of period .................... $16.820 $15.520 $15.110 $13.120 $11.840 $11.620
======== ======== ======== ======= ======= =======
Total return ...................................... 12.41% 6.60% 20.03% 13.98% 2.57% 15.97%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ........ $236,919 $198,863 $131,428 $81,548 $57,649 $16,664
Ratio of expenses to average net assets ........ 0.86% 0.85% 0.80% 0.80% 0.80% 0.80%
Ratio of expenses to average net
assets prior to expense limitation ........... 0.89% 0.90% 0.91% 0.89% 1.01% 1.85%
Ratio of net investment income to
average net assets ........................... 2.69% 2.28% 4.71% 3.69% 2.63% 1.85%
Ratio of net investment income to average
net assets prior to expense limitation ....... 2.66% 2.23% 4.60% 3.60% 2.42% 0.80%
Portfolio turnover ............................. 4% 7% 8% 19% 13% 9%
Average commission rate paid(3) ................ $0.0175 $0.0150 $0.0100 N/A N/A N/A
</TABLE>
- ----------
(1)Ratios have been annualized and total return has not been annualized.
(2)Per share information for the periods ended June 30, 1998 and December 31,
1997 was based on the average shares outstanding method.
(3)Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.
See accompanying notes
67
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
GLOBAL BOND SERIES
---------------------------------
SIX MONTHS YEAR 5/2/96(1)
ENDED ENDED TO
6/30/98(3) 12/31/97 12/31/96
(UNAUDITED)
<S> <C> <C> <C>
Net asset value, beginning of period $10.500 $10.960 $10.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (2) ....................... 0.300 0.636 0.339
Net realized and unrealized gain (loss)
on investments and foreign currencies ......... (0.210) (0.551) 0.831
------- ------- -------
Total from investment operations ................ 0.090 0.085 1.170
------- ------- -------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income ............ (0.420) (0.460) (0.210)
Distributions from net realized gain
on investment transactions .................... (0.010) (0.085) none
------- ------- -------
Total dividends and distributions ............... (0.430) (0.545) (0.210)
------- ------- -------
Net asset value, end of period ..................... $10.160 $10.500 $10.960
======= ======= =======
Total return ....................................... 0.84% 0.88% 11.79%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ......... $18,355 $16,876 $9,471
Ratio of expenses to average net assets ......... 0.82% 0.80% 0.80%
Ratio of expenses to average net
assets prior to expense limitation ............ 1.00% 1.08% 1.19%
Ratio of net investment income to
average net assets ............................ 5.83% 6.03% 6.51%
Ratio of net investment income to average
net assets prior to expense limitation......... 5.65% 5.75% 6.12%
Portfolio turnover .............................. 89% 97% 56%
</TABLE>
- ----------
(1)Date of initial public offering; ratios have been annualized and total return
has not been annualized.
(2)Per share information for the periods ended June 30, 1998 and December 31,
1997 was based on the average shares outstanding method.
(3)Ratios have been annualized and total return has not been annualized.
See accompanying notes
68
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
DELCHESTER SERIES
------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/98(1) 1997 1996 1995 1994 1993
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............. $9.510 $9.170 $8.940 $8.540 $9.770 $9.290
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......................... 0.446 0.863 0.853 0.872 0.962 0.976
Net realized and unrealized
gain (loss) on investments ................... 0.020 0.332 0.230 0.400 (1.230) 0.480
------ ------ ------ ------ ------ ------
Total from investment operations ............... 0.466 1.195 1.083 1.272 (0.268) 1.456
------ ------ ------ ------ ------ ------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income ........... (0.443) (0.855) (0.853) (0.872) (0.962) (0.976)
Distributions from net realized gain
on investment transactions ................... (0.003) none none none none none
------ ------ ------ ------ ------ ------
Total dividends and distributions .............. (0.446) (0.855) (0.853) (0.872) (0.962) (0.976)
------ ------ ------ ------ ------ ------
Net asset value, end of period .................... $9.530 $9.510 $9.170 $8.940 $8.540 $9.770
====== ====== ------ ====== ====== ======
Total return ...................................... 4.93% 13.63% 12.79% 15.50% (2.87%) 16.36%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ........ $123,318 $98,875 $67,665 $56,605 $43,686 $34,915
Ratio of expenses to average net assets ........ 0.70% 0.70% 0.70% 0.69% 0.72% 0.80%
Ratio of expenses to average net
assets prior to expense limitation ........... 0.70% 0.70% 0.70% 0.69% 0.72% 0.82%
Ratio of net investment income to
average net assets ........................... 9.36% 9.24% 9.54% 9.87% 10.56% 10.05%
Ratio of net investment income to average
net assets prior to expense limitation ....... 9.36% 9.24% 9.54% 9.87% 10.56% 10.03%
Portfolio turnover ............................. 112% 121% 93% 74% 47% 43%
</TABLE>
- -----------
(1)Ratios have been annualized and total return has not been annualized.
See accompanying notes
69
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
STRATEGIC INCOME SERIES
-------------------------
SIX MONTHS 5/1/97(1)
ENDED TO
6/30/98(2) 12/31/97
(UNAUDITED)
Net asset value, beginning of period $10.620 $10.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .......................... 0.396 0.523
Net realized and unrealized gain (loss)
on investments and foreign currencies ........ (0.191) 0.097
------- -------
Total from investment operations ............... 0.205 0.620
------- -------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income ........... (0.270) none
Distributions from net realized gain
on investment transactions ................... (0.025) none
------- -------
Total dividends and distributions .............. (0.295) none
------- -------
Net asset value, end of period .................... $10.530 $10.620
======= =======
Total return ...................................... 1.95% 6.20%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ........ $16,221 $8,606
Ratio of expenses to average net assets ........ 0.80% 0.80%
Ratio of expenses to average net
assets prior to expense limitation ........... 0.82% 1.23%
Ratio of net investment income to
average net assets ........................... 7.54% 7.44%
Ratio of net investment income to average
net assets prior to expense limitation ....... 7.52% 7.01%
Portfolio turnover ............................. 185% 70%
- ----------
(1)Date of initial public offering; ratios have been annualized and total return
has not been annualized.
(2)Ratios have been annualized and total return has not been annualized.
See accompanying notes
70
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
CAPITAL RESERVES SERIES
------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/98(1) 1997 1996 1995 1994 1993
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................. $9.790 $9.690 $9.930 $9.300 $10.260 $10.200
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................. 0.286 0.613 0.623 0.643 0.636 0.636
Net realized and unrealized
gain (loss) on investments ...................... 0.020 0.100 (0.240) 0.630 (0.905) 0.145
------ ------ ------ ------ ------ ------
Total from investment operations .................. 0.306 0.713 0.383 1.273 (0.269) 0.781
------ ------ ------ ------ ------ ------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income .............. (0.286) (0.613) (0.623) (0.643) (0.636) (0.636)
Distributions from net realized gain
on investment transactions ...................... none none none none (0.055) (0.085)
------ ------ ------ ------ ------ ------
Total dividends and distributions ................. (0.286) (0.613) (0.623) (0.643) (0.691) (0.721)
------ ------ ------ ------ ------ ------
Net asset value, end of period ....................... $9.810 $9.790 $9.690 $9.930 $9.300 $10.260
====== ====== ====== ====== ====== =======
Total return ......................................... 3.17% 7.60% 4.05% 14.08% (2.68%) 7.85%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ........... $32,443 $29,177 $27,768 $27,935 $25,975 $24,173
Ratio of expenses to average net assets ........... 0.79% 0.75% 0.72% 0.71% 0.74% 0.80%
Ratio of expenses to average net
assets prior to expense limitation .............. 0.79% 0.75% 0.72% 0.71% 0.74% 0.85%
Ratio of net investment income to
average net assets .............................. 5.88% 6.31% 6.43% 6.64% 6.57% 6.20%
Ratio of net investment income to average
net assets prior to expense limitation .......... 5.88% 6.31% 6.43% 6.64% 6.57% 6.15%
Portfolio turnover ................................ 162% 120% 122% 145% 219% 198%
</TABLE>
- ------------
(1)Ratios have been annualized and total return has not been annualized.
See accompanying notes
71
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
CASH RESERVE SERIES
-------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
6/30/98(1) 1997 1996 1995 1994 1993
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............... $10.000 $10.000 $10.000 $10.000 $10.000 $10.000
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................... 0.250 0.497 0.482 0.535 0.361 0.245
Net realized and unrealized
gain (loss) on investments .................... none none none none none none
------- ------- ------- ------- ------- -------
Total from investment operations ................ 0.250 0.497 0.482 0.535 0.361 0.245
------- ------- ------- ------- ------- -------
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income ............ (0.250) (0.497) (0.482) (0.535) (0.361) (0.245)
Distributions from net realized gain
on investment transactions .................... none none none none none none
------- ------- ------- ------- ------- -------
Total dividends and distributions ............... (0.250) (0.497) (0.482) (0.535) (0.361) (0.245)
------- ------- ------- ------- ------- -------
Net asset value, end of period ..................... $10.000 $10.000 $10.000 $10.000 $10.000 $10.000
======= ======= ======= ======= ======= =======
Total return ....................................... 2.52% 5.10% 4.93% 5.48% 3.68% 2.48%
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) ......... $45,880 $30,711 $26,479 $16,338 $20,125 $10,245
Ratio of expenses to average net assets ......... 0.61% 0.64% 0.61% 0.62% 0.66% 0.80%
Ratio of expenses to average net
assets prior to expense limitation ............ 0.61% 0.64% 0.61% 0.62% 0.66% 0.86%
Ratio of net investment income to
average net assets ............................ 5.03% 4.98% 4.82% 5.35% 3.79% 2.44%
Ratio of net investment income to average
net assets prior to expense limitation ........ 5.03% 4.98% 4.82% 5.35% 3.79% 2.38%
</TABLE>
- -------------
(1)Ratios have been annualized and total return has not been annualized.
See accompanying notes
72
<PAGE>
DELAWARE GROUP PREMIUM FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998 (Unaudited)
Delaware Group Premium Fund, Inc. (The "Fund"), is registered as a diversified
open-end investment company under the Investment Company Act of 1940, as
amended. The Fund is organized as a Maryland Corporation and offers 16 series:
the Trend Series, the DelCap Series, the Small Cap Value Series (formerly the
Value Series), the Social Awareness Series (formerly the Quantum Series), the
Devon Series, the Decatur Total Return Series, the REIT Series, the Delaware
Series, the Convertible Securities Series, the Emerging Markets Series, the
International Equity Series, the Global Bond Series, the Delchester Series,
the Strategic Income Series, the Capital Reserves Series, and the Cash Reserve
Series (the "Series"). The shares of the Fund are sold only to separate
accounts of life insurance companies.
1. SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Series:
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. Securities listed on a
foreign exchange are valued at the last quoted sales price before the Series
is valued. Long-term debt securities are valued by an independent pricing
service and such prices are believed to reflect the fair value of such
securities. Money market instruments having less than 60 days to maturity are
valued at amortized cost which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at
fair value as determined in good faith by or under the direction of the Fund's
Board of Directors.
Federal Income Taxes--Each series intends to qualify or 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.
Repurchase Agreements--Each Series 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 Series' 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.
Foreign Currency Transactions--Transactions denominated in foreign currencies
are recorded at the current prevailing exchange rates. The value of all assets
and liabilities denominated in foreign currencies are translated into U.S.
dollars at the exchange rate of such currencies against the U.S. dollar as of
3:00 PM EST. Transaction gains or losses resulting from changes in exchange
rates during the reporting period or upon settlement of the foreign currency
transaction are reported in operations for the current period. It is not
practical to isolate that portion of both realized and unrealized gains and
losses on investments in equity securities that result from fluctuations in
foreign currency exchange rates in the statement of operations. The Series do
isolate that portion of gains and losses on investments in debt securities
which are due to changes in the foreign exchange rate from that which are due
to changes in market prices of debt securities. The Series report certain
foreign currency related transactions as components of realized gains for
financial reporting purposes, whereas such components are treated as ordinary
income (loss) for federal income tax purposes.
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. Foreign dividends are also recorded on the
ex-dividend date or as soon after the ex-dividend date that the Series are
aware of such dividends, net of all non-rebatable tax withholdings. Original
issue discounts are accreted to interest income over the lives of the
respective securities. Withholding taxes on foreign dividends have been
provided for in accordance with the Series' understanding of the applicable
country's tax rules and rates.
73
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Delchester Series, the Strategic Income Series, the Capital Reserves
Series and the Cash Reserves Series declare dividends daily from net
investment income and pay such dividends monthly. Distributions from net
realized gain on investment transactions, if any, normally will be distributed
following the close of the fiscal year.
The Devon Series, the Decatur Total Return Series, the Delaware Series, the
Convertible Securities Series and the Global Bond Series will make payments
from the Series' net investment income quarterly and distributions from net
realized gain on investment transactions, if any, following the close of the
fiscal year.
The Trend Series, the DelCap Series, the Small Cap Value Series, the Social
Awareness Series, the REIT Series, the International Equity Series and the
Emerging Markets Series will make payments from net income and net realized
gain on investment transactions, if any, once a year.
Certain Fund expenses are paid through "soft dollar" arrangements with
brokers. The amount of these expenses is less than 0.01% of each Series'
average daily net assets.
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.
2. INVESTMENT MANAGEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
In accordance with the terms of the Investment Management Agreement, each
Series pays Delaware Management Company ("DMC") the investment manager of each
Series except the Emerging Markets Series, the International Equity Series,
and the Global Bond Series, and Delaware International Advisers Ltd. ("DIAL"),
the investment manager of the Emerging Markets Series, the International
Equity Series, and the Global Bond Series, an annual fee which is calculated
daily based on the net assets of each Series, less the fees paid to the
unaffiliated directors for the DelCap Series, the Decatur Total Return Series,
the Delaware Series, the International Equity Series, the Delchester Series,
the Capital Reserves Series, and the Cash Reserve Series. The management fee
for the Trend Series, the Small Cap Value Series, the Social Awareness Series,
the Devon Series, the REIT Series, the Convertible Securities Series, the
Emerging Markets Series, the Global Bond Series, and the Strategic Income
Series are calculated daily on the net assets of each Series without
consideration of amounts paid to unaffiliated directors.
Lincoln Investment Manager, Inc., an affiliate of DMC, receives 30% of the
advisory fee paid to DMC for acting as a sub-advisor to the REIT Series.
Vantage Global Advisors, Inc. ("Vantage") receives a fee equal to 0.25% of
average daily net assets up to $20 million, 0.35% of average daily net assets
between $20 million and $50 million, and 0.40% of average daily net assets
over $50 million of the Social Awareness Series for acting as a sub-advisor to
this Series.
DMC and DIAL have elected to waive their fees and reimburse each Series to the
extent that annual operating expenses exclusive of taxes, interest, brokerage
commissions and extraordinary expenses do not exceed the following percentages
of net assets through October 31, 1998.
74
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The management fee rates, waiver rates and total expenses absorbed by DMC and
DIAL for the period ended June 30, 1998 are as follows:
<TABLE>
<CAPTION>
MANAGEMENT FEE WAIVER AS
AS A PERCENTAGE A PERCENTAGE EXPENSES
OF AVERAGE DAILY OF AVERAGE DAILY ABSORBED
NET ASSETS NET ASSETS BY DMC
(PER ANNUM) (PER ANNUM) OR DIAL
---------------- ---------------- --------
<S> <C> <C> <C>
Trend Series ................................ 0.75% 0.85%** $46,127
DelCap Series ............................... 0.75% 0.85%** 62,791
Small Cap Value Series ...................... 0.75% 0.85%** 24,655
Social Awareness Series ..................... 0.75% 0.85%** 6,898
Devon Series ................................ 0.60% 0.80% --
Decatur Total Return Series ................. 0.60% 0.80% --
REIT Series ................................. 0.75%* 0.85% 684
Delaware Series ............................. 0.60% 0.80% --
Convertible Securities Series ............... 0.75% 0.85%** 43
Emerging Markets Series ..................... 1.25% 1.50% 10,035
International Equity Series ................. 0.75% 0.95% 28,730
Global Bond Series .......................... 0.75% 0.85%** 15,983
Delchester Series ........................... 0.60% 0.80% --
Strategic Income Series ..................... 0.65% 0.80% 1,451
Capital Reserves Series ..................... 0.60% 0.80% --
Cash Reserve Series ......................... 0.50% 0.80% --
- -------------
*Assets up to $500 million: 0.75% of average daily net assets
Assets over $500 million - $1,000 million: 0.70% of average daily net assets
Assets over $1,000 million - $2,500 million: 0.65% of average daily net assets
Assets over $2,500 million: 0.60% of average daily net assets
**Prior to May 1, 1998 the expense limitation was 0.80%.
</TABLE>
75
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Fund has engaged Delaware Service Company, Inc. ("DSC"), an affiliate of
DMC, to serve as dividend disbursing agent, transfer agent and accounting
services agent for each Series.
The amounts expensed for each Series were as follows:
<TABLE>
<CAPTION>
Dividend disbursing,
transfer agent fees Accounting
and other expenses fees
------------------- ----------
<S> <C> <C>
Trend Series .................................. $2,225 $25,920
DelCap Series ................................. 6,300 16,932
Small Cap Value Series ........................ 1,150 18,667
Social Awareness Series ....................... 348 2,352
Devon Series .................................. 901 5,026
Decatur Total Return Series ................... 4,000 94,466
REIT Series ................................... 10 130
Delaware Series ............................... 3,056 31,672
Convertible Securities Series ................. 26 1,034
Emerging Markets Series ....................... 300 1,200
International Equity Series ................... 3,553 47,027
Global Bond Series ............................ 320 3,531
Delchester Series ............................. 2,066 22,157
Strategic Income Series ....................... 300 2,621
Capital Reserves Series ....................... 2,083 6,153
Cash Reserve Series ........................... 720 7,341
</TABLE>
76
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
On June 30, 1998, the Series had payables to affiliates as follows:
<TABLE>
<CAPTION>
OTHER
INVESTMENT DIVIDEND DISBURSING, EXPENSES
MANAGEMENT TRANSFER AGENT FEES, PAYABLE
FEE PAYABLE TO ACCOUNTING FEES, AND OTHER TO DMC
DMC OR DIAL EXPENSES PAYABLE TO DSC AND AFFILIATES
-------------- -------------------------- --------------
<S> <C> <C> <C>
Trend Series .................................... $387,761 $4,990 $2,367
DelCap Series ................................... 310,176 4,869 2,153
Small Cap Value Series .......................... 283,345 3,872 1,800
Social Awareness Series ......................... 41,667 5,461 3,022
Devon Series .................................... 92,600 1,371 450
Decatur Total Return Series ..................... 162,687 18,940 8,447
REIT Series ..................................... 1,821 85 16
Delaware Series ................................. 70,603 5,459 2,665
Convertible Securities Series ................... 5,560 2,274 2,828
Emerging Markets Series ......................... 10,068 767 592
International Equity Series ..................... 680,203 7,500 4,043
Global Bond Series .............................. 44,082 748 337
Delchester Series ............................... 45,924 4,034 2,061
Strategic Income Series ......................... 40,718 4,929 3,458
Capital Reserves Series ......................... 16,199 893 589
Cash Reserve Series ............................. 18,796 1,494 787
</TABLE>
Certain officers of DMC and DSC 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 period ended June 30, 1998, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments for each Series as follows:
Purchases Sales
--------- -----
Trend Series ............................ $105,021,010 $86,075,182
DelCap Series ........................... 72,316,424 76,482,792
Small Cap Value Series .................. 40,469,121 17,834,021
Social Awareness Series ................. 6,648,872 1,306,504
Devon Series ............................ 21,576,116 4,962,216
Decatur Total Return Series ............. 254,854,815 161,768,361
REIT Series ............................. 2,343,088 8,200
Delaware Series ......................... 66,832,022 44,759,696
Convertible Securities Series ........... 5,689,240 2,500,718
Emerging Markets Series ................. 2,016,720 691,739
International Equity Series ............. 20,322,373 4,302,626
Global Bond Series ...................... 8,235,679 4,648,933
Delchester Series ....................... 87,594,950 59,525,635
Strategic Income Series ................. 14,155,841 5,069,751
Capital Reserves Series ................. 13,817,261 12,055,177
77
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
During the period ended June 30, 1998 the Series made purchases and sales of
U.S. government securities for each Series as follows:
Purchases Sales
--------- -----
Delaware Series .......................... $47,615,070 $43,985,269
Global Bond Series ....................... 1,392,985 2,776,859
Strategic Income Series .................. 5,360,501 5,366,098
Capital Reserves Series .................. 14,596,459 12,151,613
At June 30, 1998, the aggregate cost of securities and unrealized appreciation
(depreciation) for federal income tax purposes for each Series were as
follows:
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE NET UNREALIZED
COST OF UNREALIZED UNREALIZED APPRECIATION
INVESTMENTS APPRECIATION DEPRECIATION (DEPRECIATION)
----------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Trend Series ................................ $128,699,342 $27,202,026 ($1,988,456) $25,213,570
DelCap Series ............................... 97,555,822 28,382,752 (2,203,555) 26,179,197
Small Cap Value Series ...................... 91,512,761 15,540,182 (2,845,652) 12,694,530
Social Awareness Series ..................... 13,210,968 2,292,972 (224,098) 2,068,874
Devon Series ................................ 34,195,526 3,291,383 (499,423) 2,791,960
Decatur Total Return Series ................. 466,343,728 78,205,354 (9,563,221) 68,642,133
REIT Series ................................. 2,502,387 18,828 (62,220) (43,392)
Delaware Series ............................. 141,230,371 25,951,288 (1,133,200) 24,818,088
Convertible Securities Series ............... 7,396,822 336,520 (274,413) 62,107
Emerging Markets Series ..................... 7,997,086 130,394 (2,409,608) (2,279,214)
International Equity Series ................. 192,355,258 61,361,032 (17,526,075) 43,834,957
Global Bond Series .......................... 18,547,139 204,225 (798,122) (593,897)
Delchester Series ........................... 121,686,875 3,057,461 (2,172,031) 885,430
Strategic Income Series ..................... 16,759,225 141,443 (532,310) (390,867)
Capital Reserves Series ..................... 32,255,988 421,965 (46,290) 375,675
Cash Reserve Series ......................... 45,775,307 -- -- --
</TABLE>
For federal income tax purposes, the Fund had accumulated capital losses at
December 31, 1997 for each Series as follows:
YEAR OF YEAR OF YEAR OF
EXPIRATION EXPIRATION EXPIRATION
2002 2004 2005
---------- ---------- ----------
International Equity Series .......... $522,833 $971,541
Capital Reserves Series .............. $1,281,450 292,208
78
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. CAPITAL STOCK
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
Shares issued upon
reinvestment of dividends
from net investment
income and net
realized gains on Shares Net
Shares sold investment transactions repurchased increase
----------- ----------------------- ----------- --------
<S> <C> <C> <C> <C>
Period ended June 30, 1998*:
Trend Series ................................ 3,048,709 147,114 (2,159,380) 1,036,443
DelCap Series ............................... 462,443 657,513 (578,160) 541,796
Small Cap Value Series ...................... 1,279,881 175,656 (292,592) 1,162,945
Social Awareness Series ..................... 608,016 12,698 (168,696) 452,018
Devon Series ................................ 1,505,074 31,229 (206,869) 1,329,434
Decatur Total Return Series ................. 5,669,424 1,479,672 (797,039) 6,352,057
REIT Series ................................. 251,254 -- (15) 251,239
Delaware Series ............................. 1,490,366 806,301 (125,064) 2,171,603
Convertible Securities Series ............... 297,312 12,084 (21,800) 287,596
Emerging Markets Series ..................... 198,615 20,252 (76,794) 142,073
International Equity Series ................. 1,575,397 474,168 (780,259) 1,269,306
Global Bond Series .......................... 301,243 70,279 (171,607) 199,915
Delchester Series ........................... 2,576,607 510,804 (543,861) 2,543,550
Strategic Income Series ..................... 982,139 25,762 (277,611) 730,290
Capital Reserves Series ..................... 789,410 88,687 (549,784) 328,313
Cash Reserve Series ......................... 4,681,150 87,975 (3,252,260) 1,516,865
</TABLE>
79
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
SHARES ISSUED UPON
REINVESTMENT OF DIVIDENDS
FROM NET INVESTMENT
INCOME AND NET
REALIZED GAINS ON SHARES NET
SHARES SOLD INVESTMENT TRANSACTIONS REPURCHASED INCREASE
----------- ----------------------- ----------- --------
<S> <C> <C> <C> <C>
Period ended December 31, 1997**:
Trend Series ................................. 3,548,538 63,254 (682,630) 2,929,162
DelCap Series ................................ 1,806,689 296,551 (737,831) 1,365,409
Small Cap Value Series ....................... 3,108,967 135,708 (185,778) 3,058,897
Social Awareness Series ...................... 695,631 -- (88,286) 607,345
Devon Series ................................. 1,418,088 -- (109,849) 1,308,239
Decatur Total Return Series .................. 10,893,570 1,321,652 (1,289,152) 10,926,070
Delaware Series .............................. 2,134,206 483,216 (447,850) 2,169,572
Convertible Securities Series ................ 344,954 -- (8,699) 336,255
Emerging Markets Series ...................... 727,021 -- (76,644) 650,377
International Equity Series .................. 4,451,284 342,396 (674,626) 4,119,054
Global Bond Series ........................... 1,188,335 65,554 (510,926) 742,963
Delchester Series ............................ 3,508,373 793,870 (1,287,419) 3,014,824
Strategic Income Series ...................... 909,478 -- (98,942) 810,536
Capital Reserves Series ...................... 627,274 181,652 (694,053) 114,873
Cash Reserve Series .......................... 8,343,717 149,715 (8,070,169) 423,263
</TABLE>
- --------------
*The REIT Series commenced operations on 5/1/98.
**The Social Awareness Series, the Devon Series, the Convertible Securities
Series, the Emerging Markets Series, and the Strategic Income Series commenced
operations on 5/1/97.
5. FOREIGN EXCHANGE CONTRACTS
A Series will generally enter into forward foreign currency contracts as a way
of managing foreign exchange rate risk. A Series may enter into these
contracts to fix the U.S. dollar value of a security that it has agreed to buy
or sell for the period between the date the trade was entered into and the
date the security is delivered and paid for. A Series may also use these
contracts to hedge the U.S. dollar value of securities it already owns
denominated in foreign currencies.
Forward foreign currency contracts are valued at the mean between the bid and
asked prices of the contracts and are marked-to-market daily. Interpolated
values are derived when the settlement date of the contract is an interim date
for which quotations are not available. The change in market value is recorded
as an unrealized gain or loss. When the contract is closed, a realized gain or
loss equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed is recorded.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the securities, but it does establish a rate of
exchange that can be achieved in the future. Although forward foreign currency
contracts limit the risk of loss due to a decline in the value of the hedged
currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, a Series could be exposed to
risks if the counterparties to the contracts are unable to meet the terms of
their contracts.
80
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. CREDIT AND MARKET RISK
Some countries in which the Emerging Markets Series, the International Equity
Series and the Global Bond Series may invest require governmental approval for
the repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. In addition, if there is a deterioration in a
country's balance of payments or for other reasons, a country may impose
temporary restrictions on foreign capital remittances abroad.
The securities exchanges of certain foreign markets are substantially smaller,
less liquid and more volatile than the major securities markets in the United
States. Consequently, acquisition and disposition of securities by the Series
may be inhibited. In addition, a significant proportion of the aggregate
market value of equity securities listed on the major securities exchanges in
emerging markets are held by a smaller number of investors. This may limit the
number of shares available for acquisition or disposition of the Series.
The Delchester Series, Strategic Income Series and Convertible Securities
Series may invest in high-yield fixed income securities which carry ratings of
BB or lower by S&P and/or Ba or lower by Moody's. Investments in these higher
yielding securities may be accompanied by a greater degree of credit risk than
higher rated securities. Additionally, lower rated securities may be more
susceptible to adverse economic and competitive industry conditions than
investment grade securities.
The Capital Reserves Series and the Delaware Series may invest in securities
whose value is derived from an underlying pool of mortgages or consumer loans.
Prepayment of these loans may shorten the stated maturity of the respective
obligation and may result in a loss of premium, if any has been paid.
With the exception of the Convertible Securities Series, each Series 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 Convertible
Securities Series may invest up to 15% in such securities. The relative
illiquidity of some of these securities may adversely affect the Series'
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
Securities on loan are required at all times to be secured by collateral at
least equal to 102% of the market value of securities issued in the U.S. and
105% of the market value of securities issued outside of the U.S. However, in
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings. In the event that the borrower fails to return loaned securities,
and cash collateral being maintained by the borrower is insufficient to cover
the value of loaned securities and provided such collateral insufficiency is
not the result of investment losses, the lending agent has agreed to pay the
amount of the shortfall to the Series or, at the option of the lending agent,
replace the loaned securities. The market value of securities on loan to
brokers and the related collateral received at June 30, 1998 for each Series
was as follows:
MARKET VALUE OF
SECURITIES ON LOAN COLLATERAL
------------------ ----------
Trend Series ....................... $31,830,105 $32,606,804
DelCap Series ...................... 23,917,109 25,151,650
Decatur Total Return Series ........ 52,843,000 53,906,220
Delaware Series .................... 25,837,661 30,699,605
International Equity Series ........ 21,751,673 27,099,982
81
