DELAWARE GROUP PREMIUM FUND INC, N-30D, 1999-09-08

DELAWARE GROUP PREMIUM FUND INC
N-30D, 1999-09-08

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<PAGE>
July 20, 1999

Dear Policy Holder:

During the first half of 1999, investors started paying closer attention to
less-expensive international stocks. As countries like Brazil and Japan showed
signs of turning the corner, the dominance of growth investments began to wane,
benefiting many value stocks. Regardless, international and global equity
investments delivered positive returns for the first six months of fiscal 1999.

Six-Month Returns
Ended June 30, 1999
Standard & Poor's 500 Index +12.38%
Morgan Stanley Europe, Australia, Far East (EAFE) Index +4.11%
Morgan Stanley World Index +8.69%

Performance quoted above assumes reinvestment of dividends. It is not intended
to represent the performance of any Premium Fund Series. Past performance does
not guarantee future results. The indexes are unmanaged and assume no management
fees or expenses. The Standard & Poor's 500 Index is composed of 500 large U.S.
company stocks, while the Morgan Stanley EAFE Index consists of international
equity stocks. The unmanaged Morgan Stanley World Index includes U.S. market
performance as well as international equity performance. All returns stated in
U.S. dollars. A direct investment in an unmanaged index is not possible.

The United States' Dow Jones Industrial Average closed above both the 10,000
and 11,000 marks for the first time during the first six months of our fiscal
year. While many on Wall Street heralded these milestones, it is important to
recognize that large "blue chip" companies primarily drove the run-up of these
indexes, while medium size and smaller stocks have remained on the sidelines.
Key factors, however, that led to the narrow market of the last three to four
years appeared to be changing. We believe this change has been spurred by
improved international economic growth. Anecdotal evidence and official
government statistics from virtually all corners of the globe point to economic
recovery.

Growing investor confidence in the recovery of many worldwide economies
boosted the performance of foreign commodity issues, including oil, utility and
paper companies. Rising demand from recovering world markets and the
intervention of OPEC, an intergovernmental organization working to bring
stability to the petroleum market, contributed to higher oil prices.

During the first quarter of '99, Japan's economy, the world's second largest,
grew 1.9%, reversing a trend of five consecutive quarters of contraction
(source: Bloomberg). Despite this encouraging news, we still believe the road to
economic recovery in Japan will be long and difficult. We will continue to
monitor the progress of economic recovery in Japan, while searching for select
companies that we think offer reasonably priced stocks.

In the coming months, we believe the international market will be relatively
more stable. The United Kingdom, in our opinion, offers significant promise for
investors, although we believe that the Sterling, the country's currency, is
slightly overvalued. We also continue to see value in Australia and New Zealand,
which have benefited from growing investor interest in commodity-based stocks.

After a tumultuous period like we have encountered recently, it is important
to remember that your annuity is a long-term investment that requires patience
and a long-term perspective. If your annuity is well diversified among a variety
of asset classes, you should be well positioned for whatever opportunities the
international market brings for the remainder of the year. We thank you for your
confidence in Delaware Investments.

Sincerely,

/s/ Wayne A. Stork /s/ David K. Downes
- --------------------------- ------------------------------------
Wayne A. Stork David K. Downes
Director of the Fund President and Chief Executive Officer
Chairman, Delaware Investments Delaware Investments Family of Funds
Family of Funds

<PAGE>
Delaware Group Premium Fund, Inc.-Global Bond Series
Statement of Net Assets
June 30, 1999 (Unaudited)

Market
Principal Value
Amount* (U.S. $)
Bonds-94.97%
Australia-12.65%
Australian Government 6.75% 11/15/06 A$ 700,000 $ 482,695
Australian Republic 7.25% 5/3/07 .... Eu 500,000 309,985
Federal National Mortgage Association
5.75% 9/5/00 ..................... A$ 700,000 469,168
New South Wales Treasury
7.00% 2/1/00 ..................... 1,100,000 741,083
Queensland Treasury 8.00% 8/14/01 ... 1,150,000 803,111
-----------
2,806,042
-----------
Canada-15.67%
Abbey National Treasury Service
7.00% 12/31/99 ................... C$ 1,350,000 928,373
Export-Import Bank of Japan
7.75% 10/8/02 .................... 160,000 115,062
Government of Canada 7.50% 3/1/01 ... 350,000 247,696
Government of Canada 10.25% 3/15/14 . 600,000 600,188
Japan Highway 7.875% 9/27/02 ........ 800,000 576,977
KFW International Finance
6.50% 12/28/01 ................... 60,000 41,611
Kingdom of Norway 8.375% 1/27/03 .... 200,000 147,090
Ontario Hydro 5.60% 6/2/08 .......... 900,000 601,050
Ontario Hydro 10.00% 3/19/01 ........ 300,000 219,437
-----------
3,477,484
-----------
Germany-18.30%
Baden Wurt L-Finance 6.625% 8/20/03 . Eu 600,000 347,485
Deutsche Pfandbriefe Hypotheken Bank
5.625% 2/7/03 .................... 802,258 878,912
Deutschland Republic 6.00% 1/4/07 ... 806,775 917,261
DSL Finance NV Amsterdam
5.75% 3/19/09 .................... 400,000 224,735
DSL Finance NV Amsterdam
6.00% 2/21/06 .................... 1,400,000 800,501
Halifax 5.625% 7/23/07 .............. 1,600,000 891,955
-----------
4,060,849
-----------
Netherlands-4.32%
Netherlands Government 8.25% 9/15/07 Eu 742,852 959,527
-----------
959,527
-----------
<PAGE>

Market
Principal Value
Amount* (U.S. $)
Bonds (Continued)
New Zealand-11.62%
International Bank Reconstruction &
Development 5.50% 4/15/04 ...... NZ$ 700,000 $ 356,030
New Zealand Government
7.00% 7/15/09 .................. 200,000 109,464
New Zealand Government
8.00% 4/15/04 .................. 1,050,000 599,844
New Zealand Government
8.00% 11/15/06 ................. 1,900,000 1,100,523
New Zealand Government
10.00% 3/15/02 ................. 700,000 412,855
----------
2,578,716
----------
South Africa-4.19%
Republic of South Africa
12.50% 1/15/02 ................. Sa 3,500,000 564,523
Republic of South Africa
13.00% 8/31/10 ................. 2,500,000 365,434
----------
929,957
----------
Sweden-7.47%
Swedish Export Credit 6.50% 6/5/01 Sk 2,500,000 307,626
Swedish Government 8.00% 8/15/07 .. 2,700,000 383,280
Swedish Government 9.00% 4/20/09 .. 6,300,000 967,904
----------
1,658,810
----------
United States-20.75%
Korea Electric Power 6.375% 12/1/03 $ 100,000 93,605
U.S. Treasury Inflation Index Notes
3.375% 1/15/07 ................. 624,858 599,278
U.S. Treasury Inflation Index Notes
3.625% 7/15/02 ................. 360,588 357,207
U.S. Treasury Inflation Index Notes
3.625% 1/15/08 ................. 510,665 496,462
U.S. Treasury Notes 5.875% 2/15/04 250,000 250,932
U.S. Treasury Notes 6.25% 2/15/07 . 2,200,000 2,242,494
U.S. Treasury Notes 6.375% 8/15/27 550,000 563,428
----------
4,603,406
----------
Total Bonds (cost $21,975,082) .... 21,074,791
----------

Global Bond-1
<PAGE>
Global Bond Series
Statement of Net Assets (Continued)
Market
Principal Value
Amount* (U.S. $)
Repurchase Agreements-3.15%
With Chase Manhattan 4.65% 7/1/99
(dated 6/30/99, collateralized by
$121,000 U.S. Treasury Notes
6.375% due 2/15/01, market value
$123,154 and $61,000
U.S. Treasury Notes 6.375% due
9/30/01, market value $62,337
and $52,000 U.S. Treasury Notes
6.125% due 12/31/01
market value $52,339) ................... $232,000 $232,000
With J.P. Morgan Securities 4.70% 7/1/99
(dated 6/30/99, collateralized by
$67,000 U.S. Treasury Notes
6.375% due 8/15/02, market value
$69,505 and $61,000
U.S. Treasury Notes 6.25% due
8/31/02, market value $62,528
and $42,000 U.S. Treasury Notes 5.75%
due 11/30/02, market value $41,962
and $61,000 U.S Treasury Notes
5.50% due 1/31/03,
market value $61,260) ................... 230,000 230,000

Market
Principal Value
Amount* (U.S. $)
Repurchase Agreements (Continued)
With PaineWebber 4.80% 7/1/99
(dated 6/30/99, collateralized by
$57,000 U.S. Treasury Notes
7.125% due 2/29/00, market value
$59,267 and $61,000
U.S. Treasury Notes 5.625% due
11/30/00, market value $60,916
and $121,000 U.S. Treasury Notes
5.75% due 11/30/02,
market value $121,351)................... $237,000 $237,000
--------
Total Repurchase Agreements
(cost $699,000) ......................... $699,000
--------

TOTAL MARKET VALUE OF SECURITIES-98.12% (COST $22,674,082)..........$21,773,791

RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-1.88%............... 416,565
-----------
NET ASSETS APPLICABLE TO 2,195,905 SHARES ($0.01 PAR VALUE)
OUTSTANDING; EQUIVALENT TO $10.11 PER SHARE-100.00% .............$22,190,356
===========
COMPONENTS OF NET ASSETS AT JUNE 30, 1999:
Common stock, $0.01 par value, 1,000,000,000 shares
authorized to the Fund with 50,000,000 shares allocated to
the Series.........................................................$22,929,945
Undistributed net investment income ** ............................. 228,045
Accumulated net realized loss on investments........................ (53,242)
Net unrealized depreciation of investments and foreign
currencies......................................................... (914,392)
-----------
Total net assets....................................................$22,190,356
===========
- --------------
*Principal amount is stated in the currency in which each bond is denominated.
A$ - Australian Dollars
C$ - Canadian Dollars
Eu - Euro
NZ$ - New Zealand Dollars
Sa - South African Rand
Sk - Swedish Kroner
$ - 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
Global Bond-2
<PAGE>

Delaware Group Premium Fund, Inc.-
Global Bond Series
Statement of Assets and Liabilities
Six Months Ended June 30, 1999
(Unaudited)

ASSETS:
Investments at market ........................................... $21,773,791
Cash and Foreign Currencies ..................................... 1,228
Dividends and interest receivable ............................... 572,447
Receivable for securities sold .................................. 907,061
-----------
Total assets .................................................... 23,254,527
-----------
LIABILITIES:
Payable for securities purchased ................................ 1,027,566
Other accounts payable and accrued expenses ..................... 36,605
-----------
Total liabilities ............................................... 1,064,171
-----------

Total Net Assets ................................................ $22,190,356
===========

Investments at cost ............................................. $22,674,082
-----------

See accompanying notes

<PAGE>

Delaware Group Premium Fund, Inc.-
Global Bond Series
Statement of Operations
Six Months Ended June 30, 1999
(Unaudited)

INVESTMENT INCOME:
Interest .......................................................... $ 710,689
---------
710,689
---------
EXPENSES:
Management fees ................................................... 82,963
Accounting and administration ..................................... 4,317
Custodian fees .................................................... 1,600
Directors' fees ................................................... 434
Professional fees ................................................. 250
Registration fees ................................................. 250
Reports and statements to shareholders ............................ 250
Taxes (other than taxes on income) ................................ 90
Dividend disbursing and transfer agent
fees and expenses .............................................. 20
Other ............................................................. 2,311
---------
92,485

Less expenses paid indirectly ..................................... (254)
---------
Total expenses .................................................... 92,231
---------

NET INVESTMENT INCOME ............................................. 618,458
---------

NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments .................................................... (43,035)
Foreign currencies ............................................. 230
---------
Net realized loss ................................................. (42,805)
Net change in unrealized appreciation / depreciation
of investments and foreign currencies .......................... (945,130)
---------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCIES ............................. (987,935)
---------

NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................................................ ($369,477)
=========
See accompanying notes

Global Bond-3
<PAGE>

Delaware Group Premium Fund, Inc.-Global Bond Series
Statements of Changes in Net Assets

Six Months Year
Ended 6/30/99 Ended
(Unaudited) 12/31/98
----------- --------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .................................. $ 618,458 $1,103,809
Net realized gain (loss) on investments and foreign
currencies............................................. (42,805) 47,334
Net change in unrealized appreciation / depreciation on
investments and foreign currencies .................... (945,130) 309,368
----------- ----------
Net increase (decrease) in net assets resulting
from operations........................................ (369,477) 1,460,511
----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income .................................. (703,899) (1,059,148)
Net realized gain on investment transactions............ (128,139) (16,415)
----------- ----------
(832,038) (1,075,563)
----------- ----------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold............................... 3,054,790 6,858,379
Net asset value of shares issued upon reinvestment
of distributions from net investment income and net
realized gain on investments........................... 832,038 1,075,563
----------- ----------
3,886,828 7,933,942
Cost of shares repurchased ............................. (2,206,127) (3,483,316)
----------- ----------
Increase in net assets derived from capital share
transactions........................................... 1,680,701 4,450,626
----------- ----------

NET INCREASE IN NET ASSETS.............................. 479,186 4,835,574
----------- ----------

NET ASSETS:
Beginning of period .................................... 21,711,170 16,875,596
----------- ----------
End of period...........................................$22,190,356 $21,711,170
=========== ===========

See accompanying notes

Global Bond-4

<PAGE>

Delaware Group Premium Fund, Inc.-Global Bond Series
Financial Highlights
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Six Months
Ended 6/30/99 Year Ended 5/2/96(2) to
(Unaudited)(1) 1998 1997 12/31/96
------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................... $10.680 $10.500 $10.960 $10.000

Income (loss) from investment operations:
Net investment income(3)................................ 0.292 0.608 0.636 0.339
Net realized and unrealized gain (loss) on
investments and foreign currencies .................. (0.466) 0.182 (0.551) 0.831
------- ------- ------- -------
Total from investment operations ....................... (0.174) 0.790 0.085 1.170
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................... (0.334) (0.600) (0.460) (0.210)
Distributions from net realized gain on investments .... (0.062) (0.010) (0.085) none
------- ------- ------- -------
Total dividends and distributions ...................... (0.396) (0.610) (0.545) (0.210)
------- ------- ------- -------

Net asset value, end of period ......................... $10.110 $10.680 $10.500 $10.960
======= ======= ======= =======
Total return ........................................... (1.64%) 7.82% 0.88% 11.79%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $22,190 $21,711 $16,876 $ 9,471
Ratio of expenses to average net assets ................ 0.84% 0.83% 0.80% 0.80%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ............. 0.84% 0.92% 1.08% 1.19%
Ratio of net investment income to average net assets ... 5.64% 5.83% 6.03% 6.51%
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly ..................................... 5.64% 5.74% 5.75% 6.12%
Portfolio turnover ..................................... 106% 79% 97% 56%
</TABLE>
- -------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(3) Per share information for the period ended June 30, 1999 and the years ended
December 31, 1997 and 1998 was based on the average shares outstanding
method.

See accompanying notes

Global Bond-5
<PAGE>
Delaware Group Premium Fund, Inc.-Global Bond Series
Notes to Financial Statements
June 30, 1999
(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 17 series:
the Aggressive Growth Series, the Capital Reserves Series, the Cash Reserve
Series, the Convertible Securities Series, the Delaware Balanced Series
(formerly the Delaware Series), the DelCap Series, the Delchester Series, the
Devon Series, the Emerging Markets Series, the Global Bond Series, the Growth
and Income Series (formerly the Decatur Total Return Series), the International
Equity Series, the REIT Series, the Small Cap Value Series, the Social Awareness
Series, the Strategic Income Series, and the Trend Series. These financial
statements and the related notes pertain to the Global Bond 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--The Series intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from generally
accepted accounting principles.

Repurchase Agreements--The 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 prevailing exchange rates on the valuation date. 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. The
Series does 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 reports
certain foreign currency related transactions as components of realized gains
(losses) for financial reporting purposes, whereas such components are treated
as ordinary income (loss) for federal income tax purposes.

Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Other--Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Interest income is recorded on the accrual basis. Withholding taxes on foreign
interest have been provided for in accordance with the Series' understanding of
the applicable country's tax rules and rates. Original issue discounts are
accreted to interest income over the lives of the respective securities.

<PAGE>

The Global Bond Series will make payments from net investment income quarterly
and distributions from net realized gain on investments, if any, following the
close of the fiscal year.

2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Series
pays Delaware International Advisers Ltd. ("DIAL"), the Investment Manager of
the Series, an annual fee which is calculated at the following rates: 0.75% on
the first $500 million of average daily net assets of the Series, 0.70% on the
next $500 million, 0.65% on the next $1,500 million and 0.60% on the average
daily net assets over $2,500 million. These rates became effective May 1, 1999.
Prior to May 1, 1999 the management fee was calculated at the rate of 0.75% on
the average daily net assets of the Series.

DIAL has elected to waive that portion, if any, of the annual management fee
payable to the extent necessary to ensure that annual operating expenses
exclusive of taxes, interest, brokerage commissions and extraordinary expenses
do not exceed 0.85% of average daily net assets of the Series through October
31, 1999.

Global Bond-6

<PAGE>
Global Bond Series
Notes to Financial Statements (Continued)

The Series has engaged Delaware Service Company, Inc. ("DSC"), an affiliate of
Delaware Management Company ("DMC"), to provide dividend disbursing, transfer
agent and accounting services. The Series pays DSC a monthly fee based on the
number of shareholder accounts, shareholder transactions and average net assets,
subject to certain minimums.

On June 30, 1999, the Series had liabilities payable to affiliates as follows:

Dividend disbursing Other
Investment transfer agent, expenses
Management accounting fees payable
fee payable to and other expenses to DMC
DIAL payable to DSC and affiliates
-------------- ------------------- --------------
$13,766 $1,289 $680

Certain officers of DMC, DSC and DIAL 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, 1999, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases .................................... $ 9,704,988
Sales ........................................ $10,643,526

During the period ended June 30, 1999 the Series made purchases of U.S.
government securities as follows:

Purchases .................................... $ 3,077,070
Sales ........................................ $ 327,234

The cost of investments for federal income tax purposes approximates cost for
book purposes. At June 30, 1999, the aggregate cost of securities and unrealized
appreciation (depreciation) for the Series were as follows:

Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation depreciation
----------- ------------ ------------ --------------
$22,674,082 $107,808 ($1,008,099) ($900,291)

4. Capital Stock
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
Shares issued upon
reinvestment of distributions
from net investment
income and net realized Shares Net
Shares sold gain on investments repurchased increase
----------- ----------------------------- ----------- --------
<S> <C> <C> <C> <C>
Period ended June 30, 1999 ........ 291,816 81,054 (210,370) 162,500
Year ended December 31, 1998 ...... 656,617 103,550 (334,171) 425,996
</TABLE>
5. Foreign Exchange Contracts
The Series will generally enter into forward foreign currency contracts as a way
of managing foreign exchange rate risk. These contracts may be entered into 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. They may also be used 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 is recorded 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.

The use of forward foreign currency contracts does not eliminate fluctuations in
the underlying prices of the Series' 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.

Global Bond-7
<PAGE>

Global Bond Series
Notes to Financial Statements (Continued)

There were no forward foreign currency contracts outstanding at June 30, 1999.

6. Credit and Market Risk
Some countries in which the 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.

The Series may invest up to 10% of its total assets in illiquid securities which
may include securities with contractual restrictions on resale and other
securities which may not be readily marketable. 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.

Global Bond-8

<PAGE>

Delaware Group Premium Fund, Inc.-Global Bond Series
Proxy Results
(Unaudited)

For the six months ended June 30, 1999, Delaware Premium Fund, Inc.-Global Bond
Series shareholders voted on the following proposals at the annual meeting of
shareholders on March 17, 1999 or as adjourned. The description of each proposal
and number of shares voted are as follows:

1. To elect the Delaware Group Premium Fund, Inc. Board of Directors.

Shares Shares Voted
Voted Withheld
For Authority Abstain
------ ------------ -------
Jeffrey J. Nick ........... 1,951,876 44,429
Walter P. Babich .......... 1,950,481 42,960
John H. Durham ............ 1,951,859 41,582
Anthony D. Knerr........... 1,950,891 42,549
Ann R. Leven .............. 1,950,941 42,499
Thomas F. Madison ......... 1,951,859 41,582
Charles E. Peck ........... 1,950,481 42,960
Wayne A. Stork ............ 1,951,859 41,582
Jan L. Yeomans ............ 1,951,654 41,786

2. To approve the reclassification of the investment objective from fundamental
to non-fundamental.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
1,765,095 81,101 150,109

3. To approve standardized fundamental investment restrictions (proposal
involves separate votes on seven sub-proposals 3A-3G).

3A. To adopt a new fundamental investment restriction concerning concentration
of the investments in the same industry.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
1,789,027 45,392 161,886

3B. To adopt a new fundamental investment restriction concerning borrowing money
and issuing senior securities.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
1,771,809 68,567 155,929

3C. To adopt a new fundamental investment restriction concerning underwriting.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
1,777,758 51,161 167,386

<PAGE>

3D. To adopt a new fundamental investment restriction concerning investments in
real estate.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
1,768,733 61,799 165,774

3E. To adopt a new fundamental investment restriction concerning investments in
commodities.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
1,784,585 49,625 162,096

3F. To adopt a new fundamental investment restriction concerning lending by the
Fund.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
1,784,184 57,376 154,746

3G. To reclassify all current fundamental investment restrictions as
non-fundamental.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
1,773,059 72,847 150,399

4. To approve a new investment management agreement with Delaware International
Advisers Ltd.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
1,795,173 54,196 146,937

5. To ratify the selection of Ernst & Young LLP, as the independent auditors for
Delaware Group Premium Fund, Inc.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
1,874,351 10,329 111,625

6. To approve the restructuring of Delaware Group Premium Fund, Inc. from a
Maryland Corporation into a Delaware Business Trust.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
1,819,748 27,574 148,983

Global Bond-9

<PAGE>
Delaware Group Premium Fund, Inc.-Growth and Income Series
(Formerly Decatur Total Return Series)
Statement of Net Assets
June 30, 1999 (Unaudited)

Number of Market
Shares Value
COMMON STOCK-97.82%
Aerospace & Defense-2.51%
+General Dynamics ................................. 117,400 $8,041,900
Lockheed Martin .................................. 191,900 7,148,275
----------
15,190,175
----------
Automobiles & Automotive Parts-6.41%
Dana ............................................. 143,500 6,609,969
Ford Motor ....................................... 138,500 7,816,594
General Motors ................................... 141,400 9,332,400
Rockwell International ........................... 126,900 7,709,175
TRW .............................................. 131,800 7,232,525
----------
38,700,663
----------
Banking, Finance & Insurance-19.27%
American General ................................. 221,500 16,695,563
Aon .............................................. 241,987 9,981,964
Bank of America .................................. 305,311 22,383,113
Bank One ......................................... 219,194 13,055,743
Chase Manhattan .................................. 94,500 8,186,063
Fannie Mae ....................................... 183,100 12,519,463
Mellon Bank ...................................... 312,000 11,349,000
Summit Bancorp ................................... 184,375 7,709,180
U.S. Bancorp ..................................... 427,400 14,531,600
----------
116,411,689
----------
Cable, Media & Publishing-3.11%
McGraw-Hill ...................................... 348,400 18,791,825
----------
18,791,825
----------
Chemicals-4.26%
Dow Chemical ..................................... 60,200 7,637,875
E.I. duPont deNemours ............................ 129,400 8,839,638
Imperial Chemical ADR ............................ 232,200 9,229,950
----------
25,707,463
----------
Computers & Technology-3.39%
Pitney Bowes ..................................... 179,000 11,500,750
Xerox ............................................ 152,400 9,001,125
----------
20,501,875
----------
Electronics & Electrical Equipment-2.39%
Emerson Electric ................................. 134,500 8,456,688
+Thomas & Betts ................................... 126,400 5,972,400
----------
14,429,088
----------
Energy-14.34%
+BP Amoco ADR ..................................... 99,142 10,756,907
Chevron .......................................... 160,400 15,268,075
Duke Energy ...................................... 134,300 7,302,563
Mobil ............................................ 137,200 13,582,800
Royal Dutch Petroleum ............................ 278,000 16,749,500
Sonat ............................................ 333,400 11,043,875
Unocal ........................................... 301,000 11,927,125
----------
86,630,845
----------
- --------------
Top 10 stock holdings, representing 28.58% of net assets, are in bold.

<PAGE>

Number of Market
Shares Value
COMMON STOCK (Continued)
Food, Beverage & Tobacco-8.36%
Bestfoods ........................................ 309,600 $15,325,200
H.J. Heinz ....................................... 151,600 7,598,950
Nabisco Group Holdings ........................... 316,000 6,181,750
PepsiCo .......................................... 216,300 8,368,106
Philip Morris .................................... 257,000 10,328,188
R.J. Reynolds Tobacco Holdings ................... 85,566 2,695,329
----------
50,497,523
----------
Healthcare & Pharmaceuticals-4.77%
AstraZenca ADR ................................... 233,500 9,150,281
Baxter International ............................. 186,300 11,294,438
Glaxo Wellcome ADR ............................... 132,900 7,525,463
Pharmacia & Upjohn ............................... 14,600 829,463
----------
28,799,645
----------
Industrial Machinery-1.99%
Baker Hughes ..................................... 30,000 1,005,000
Deere & Co. ...................................... 278,800 11,047,450
----------
12,052,450
----------
Metals & Mining-3.58%
Alcoa ............................................ 221,500 13,705,313
Alcan Aluminum ................................... 247,300 7,898,144
----------
21,603,457
----------
Paper & Forest Products-6.78%
International Paper .............................. 328,667 16,597,684
Kimberly-Clark ................................... 210,000 11,970,000
Weyerhaeuser ..................................... 180,400 12,402,500
----------
40,970,184
----------
Retail-1.60%
Albertson's ...................................... 12,600 649,688
May Department Stores ............................ 220,900 9,029,288
----------
9,678,976
----------
Telecommunications-10.33%
AT&T ............................................. 183,000 10,213,688
ALLTEL ........................................... 133,500 9,545,250
Ameritech ........................................ 251,800 18,507,300
Cable & Wireless ADR ............................. 159,100 6,304,338
GTE .............................................. 235,300 17,809,269
----------
62,379,845
----------
Transportation & Shipping-2.97%
+British Airways ADR .............................. 149,700 10,694,194
Norfolk Southern ................................. 241,100 7,263,138
----------
17,957,332
----------
Utilities-0.71%
PG&E ............................................. 132,500 4,306,250
----------
4,306,250
----------
Miscellaneous-1.05%
+H&R Block ........................................ 126,800 6,340,000
----------
6,340,000
----------
Total Common Stock
(cost $526,109,584) ............................. 590,949,285
----------

Growth and Income-1

<PAGE>

Growth and Income Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
REPURCHASE AGREEMENTS-2.50%
With Chase Manhattan 4.65% 7/1/99
(dated 6/30/99, collateralized by
$2,616,000 U.S. Treasury Notes 6.375%
due 2/15/01, market value $2,655,651
and $1,308,000 U.S. Treasury Notes
6.375% due 9/30/01, market value
$1,344,207 and $1,121,000 U.S. Treasury
Notes 6.125% due 12/31/01 market
value $1,128,614) ............................. $5,002,000 $5,002,000
With J.P. Morgan Securities
4.70% 7/1/99 (dated 6/30/99,
collateralized by $1,444,000 U.S.
Treasury Notes 6.375% due 8/15/02,
market value $1,498,786 and $1,308,000
U.S. Treasury Notes 6.25% due 8/31/02,
market value $1,348,328 and $904,000
U.S. Treasury Notes 5.75% due 11/30/02,
market value $904,853 and $1,308,000
U.S Treasury Notes 5.50% due 1/31/03,
market value $1,320,993) ...................... 4,970,000 4,970,000

Principal Market
Amount Value
REPURCHASE AGREEMENTS (Continued)
With PaineWebber 4.80% 7/1/99
(dated 6/30/99, collateralized by
$1,234,000 U.S. Treasury Notes 7.125%
due 2/29/00, market value $1,278,004
and $1,308,000 U.S. Treasury Notes
5.625% due 11/30/00, market value
$1,313,565 and $2,616,000 U.S. Treasury
Notes 5.75% due 11/30/02, market
value $2,616,771) ............................. $5,101,000 $5,101,000
----------
Total Repurchase Agreements
(cost $15,073,000) ............................ 15,073,000
----------

TOTAL MARKET VALUE OF SECURITIES-100.32% (cost $541,182,584) $606,022,285

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(0.32%) (1,908,683)
------------

NET ASSETS APPLICABLE TO 32,175,391 SHARES ($0.01 PAR VALUE)
OUTSTANDING; EQUIVALENT TO $18.78 PER SHARE-100.00% $604,113,602
============
COMPONENTS OF NET ASSETS AT JUNE 30, 1999:
Common stock, $0.01 par value, 1,000,000,000 shares
authorized to the Fund with 50,000,000 shares allocated
to the Series $516,463,312
Undistributed net investment income 2,162,078
Accumulated net realized gain on investments 20,648,511
Net unrealized appreciation of investments 64,839,701
------------
Total net assets $604,113,602
============
- -------------------
+Security is partially or fully on loan.
ADR-American Depository Receipt

See accompanying notes

Growth and Income-2
<PAGE>

Delaware Group Premium Fund, Inc.-
Growth and Income Series
Statement of Operations
Six Months Ended June 30, 1999
(Unaudited)

INVESTMENT INCOME:
Dividends ......................................... $ 7,153,835
Interest .......................................... 290,508
-----------
7,444,343
-----------

EXPENSES:
Management fees ................................... 1,791,213
Accounting and administration ..................... 114,747
Reports and statements to shareholders ............ 39,000
Professional fees ................................. 26,200
Registration fees ................................. 23,734
Taxes (other than taxes on income) ................ 23,500
Dividend disbursing and transfer agent
fees and expenses .............................. 9,600
Custodian fees .................................... 6,300
Directors' fees ................................... 4,775
Other ............................................. 80,522
-----------
2,119,591
Less expenses absorbed or waived .................. (28,897)
Less expenses paid indirectly ..................... (6,768)
-----------
Total expenses .................................... 2,083,926
-----------
NET INVESTMENT INCOME ............................. 5,360,417

NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments .................. 20,985,958
Net change in unrealized appreciation /
depreciation of investments .................... 6,449,822
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS ................................. 27,435,780
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................................ $32,796,197
===========

See accompanying notes

<PAGE>

Delaware Group Premium Fund, Inc.-
Growth and Income Series
Statements of Changes in Net Assets

Six Months Year
Ended 6/30/99 Ended
(Unaudited) 12/31/98
----------- --------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ........................... $ 5,360,417 $ 10,116,886
Net realized gain on investments ................ 20,985,958 43,739,574
Net change in unrealized appreciation /
depreciation of investments .................. 6,449,822 (3,304,465)
------------ ------------
Net increase in net assets
resulting from operations .................... 32,796,197 50,551,995
------------ ------------

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ........................... (5,017,208) (8,876,285)
Net realized gain on investments ................ (43,919,243) (23,162,228)
------------ ------------
(48,936,451) (32,038,513)
------------ ------------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ....................... 36,338,254 180,559,930
Net asset value of shares issued upon
reinvestment of distributions from
net investment income and net
realized gain on investments ................. 48,936,451 32,038,513
------------ ------------
85,274,705 212,598,443
Cost of shares repurchased ...................... (44,927,546) (52,607,198)
------------ ------------
Increase in net assets derived from
capital share transactions ................... 40,347,159 159,991,245
------------ ------------

NET INCREASE IN NET ASSETS ...................... 24,206,905 178,504,727
------------ ------------
NET ASSETS:
Beginning of period ............................. 579,906,697 401,401,970
------------ ------------
End of period ................................... $604,113,602 $579,906,697
============ ============

See accompanying notes

Growth and Income-3

<PAGE>

Delaware Group Premium Fund, Inc.-Growth and Income Series
Financial Highlights

Selected data for each share of the Series outstanding throughout each period
were as follows:

<TABLE>
<CAPTION>
Six Months
Ended 6/30/99 Year Ended December 31,
(Unaudited)(1) 1998 1997 1996 1995 1994
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $19.420 $18.800 $15.980 $14.830 $11.480 $12.510

Income (loss) from investment operations:
Net investment income ................................. 0.167 0.361 0.324 0.377 0.416 0.412
Net realized and unrealized gain (loss) on investments. 0.834 1.636 4.216 2.398 3.574 (0.422)
------- ------- ------- ------- ------- -------
Total from investment operations ...................... 1.001 1.997 4.540 2.775 3.990 (0.010)
------- ------- ------- ------- ------- -------

Less dividends and distributions:
Dividends from net investment income .................. (0.161) (0.327) (0.370) (0.420) (0.430) (0.420)
Distributions from net realized gain on investments ... (1.480) (1.050) (1.350) (1.205) (0.210) (0.600)
------- ------- ------- ------- ------- -------
Total dividends and distributions ..................... (1.641) (1.377) (1.720) (1.625) (0.640) (1.020)
------- ------- ------- ------- ------- -------

Net asset value, end of period ........................ $18.780 $19.420 $18.800 $15.980 $14.830 $11.480
======= ======= ======= ======= ======= =======

Total return .......................................... 5.79% 11.35% 31.00% 20.72% 36.12% (0.20%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $604,114 $579,907 $401,402 $166,647 $109,003 $72,725
Ratio of expenses to average net assets ............... 0.71% 0.71% 0.71% 0.67% 0.69% 0.71%
Ratio of expenses to average net assets prior to
expenses absorbed, waived or paid indirectly ....... 0.72% 0.71% 0.71% 0.67% 0.69% 0.71%
Ratio of net investment income to average net assets .. 1.84% 2.00% 2.02% 2.66% 3.24% 3.63%
Ratio of net investment income to average net assets
prior to expenses absorbed, waived or paid indirectly 1.83% 2.00% 2.02% 2.66% 3.24% 3.63%
Portfolio turnover .................................... 120% 81% 54% 81% 85% 91%
</TABLE>

- -------------------
(1) Ratios have been annualized and total return has not been annualized.

See accompanying notes

Growth and Income-4

<PAGE>

Delaware Group Premium Fund, Inc.-Growth and Income Series
Notes to Financial Statements
June 30, 1999
(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 17 series:
the Aggressive Growth Series, the Capital Reserves Series, the Cash Reserve
Series, the Convertible Securities Series, the Delaware Balanced Series
(formerly the Delaware Series), the DelCap Series, the Delchester Series, the
Devon Series, the Emerging Markets Series, the Global Bond Series, the Growth
and Income Series (formerly the Decatur Total Return Series), the International
Equity Series, the REIT Series, the Small Cap Value Series, the Social Awareness
Series, the Strategic Income Series, and the Trend Series. These financial
statements and the related notes pertain to the Growth and Income 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.

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.

<PAGE>

The Growth and Income Series will make payments from net investment income
quarterly and distributions from net realized gain on investments, if any,
following the close of the fiscal year.

Certain expenses of the Series are paid through "soft dollar" arrangements with
brokers. These transactions are done subject to best price and execution. The
amount of these expenses was approximately $6,768 for the period ended June 30,
1999. The Series may receive earnings credits from its custodian when positive
cash balances are maintained, which are used to offset custody fees. These
credits were $0 for the period ended June 30, 1999. The expenses paid under the
above arrangements are included in their respective expense captions on the
Statement of Operations with the corresponding expense offset shown as "Expenses
paid indirectly".

2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Series
pays Delaware Management Company ("DMC"), the Investment Manager of the Series,
an annual fee which is calculated at the following rates: 0.65% on the first
$500 million of average daily net assets of the Series, 0.60% on the next $500
million, 0.55% on the next $1,500 million and 0.50% on the average daily net
assets over $2,500 million. These rates became effective May 1, 1999. The old
management fee was calculated at the rate of 0.60% on the average daily net
assets of the Series, less the fees paid to the unaffiliated directors. DMC has
elected to cap the management fee at 0.60% indefinitely.

DMC has elected to waive that portion, if any, of the annual management fee
payable to the extent necessary to ensure that annual operating expenses
exclusive of taxes, interest, brokerage commissions and extraordinary expenses
do not exceed 0.80% of average daily net assets of the Series through October
31, 1999.

The Series has engaged Delaware Service Company, Inc. ("DSC"), an affiliate of
DMC, to provide dividend disbursing, transfer agent and accounting services. The
Series pays DSC a monthly fee based on the number of shareholder accounts,
shareholder transactions and average net assets, subject to certain minimums.

Growth and Income-5

<PAGE>

Growth and Income Series
Notes to Financial Statements (Continued)

On June 30, 1999, the Series had liabilities payable to affiliates as follows:

Dividend disbursing Other
Investment transfer agent, expenses
management accounting fees payable
fee payable to and other expenses to DMC
DMC payable to DSC and affiliates
-------------- ------------------- --------------
$200,306 $19,261 $57,051

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 six months ended June 30, 1999, the Series made purchases and sales
of investment securities other than U.S. government securities and temporary
cash investments as follows:

Purchases .................................... $341,972,354
Sales ........................................ $346,497,350

The cost of investments for federal income tax purposes approximates cost for
book purposes. The aggregate cost of securities and unrealized appreciation
(depreciation) for the Series were as follows:

Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation appreciation
- ------------ ------------ ------------ --------------
$541,182,584 $74,957,622 ($10,117,921) $64,839,701

4. Capital Stock
Transactions in capital stock shares were as follows:

<TABLE>
<CAPTION>
Shares issued upon
reinvestment of
distributions from net
investment income
and net realized gain Shares Net
Shares sold on investments repurchased increase
----------- ---------------------- ----------- ---------
<S> <C> <C> <C> <C>
Six months ended June 30, 1999 ........ 1,920,960 2,786,378 (2,388,504) 2,318,834
Year ended December 31, 1998 .......... 9,550,511 1,783,160 (2,829,984) 8,503,687
</TABLE>

5. Securities Lending
The Series may participate, along with other funds in the Delaware Investments
Family of Funds, in a Securities Lending Agreement ("Lending Agreement").
Security loans made pursuant to the Lending Agreement are required at all times
to be secured by U.S. Treasury obligations and/or cash collateral at least equal
to 100% 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. Cash collateral received
is invested in fixed income securities, with a weighted average maturity not to
exceed 90 days, rated in one of the top two tiers by Standard & Poors Ratings
Group or Moody's Investors Service, Inc. or repurchase agreements collateralized
by such securities. However, in the event of default or bankruptcy by the
lending agent, realization and/or retention of the collateral may be subject to
legal proceedings. In the event that the borrower fails to return loaned
securities and the collateral received is insufficient to cover the value of the
loaned securities and provided such collateral is not the result of investment
losses, the lending agent has agreed to pay the amount of the shortfall to the
Series, or at the discretion of the lending agent, replace the loaned
securities. The market value of the securities on loan and the related
collateral received at June 30, 1999 were as follows:

Market value
of securities Market value
on loan of collateral
------------- -------------
$15,813,294 $16,290,900

Net income from securities lending activities for the period ended June 30, 1999
was $14,137 and is included in interest income on the statement of operations.

Growth and Income-6

<PAGE>

Delaware Group Premium Fund Inc.-Growth and Income Series
Proxy Results
(Unaudited)

For the six months ended June 30, 1999, Delaware Premium Fund, Inc.-Growth and
Income Series shareholders voted on the following proposals at the annual
meeting of shareholders on March 17, 1999 or as adjourned. The description of
each proposal and number of shares voted are as follows:

1. To elect the Delaware Group Premium Fund, Inc. Board of Directors.

Shares Shares Voted
Voted Withheld
For Authority Abstain
---------- ------------ -------
Jeffrey J. Nick .............. 29,258,511 433,156 -
Walter P. Babich ............. 29,239,412 452,256 -
John H. Durham ............... 29,272,169 419,498 -
Anthony D. Knerr ............. 29,233,952 457,415 -
Ann R. Leven ................. 29,258,257 433,411 -
Thomas F. Madison ............ 29,273,791 417,577 -
Charles E. Peck .............. 29,247,498 444,169 -
Wayne A. Stork ............... 29,265,207 423,460 -
Jan L. Yeomans ............... 29,224,278 467,090 -

2. To approve the reclassification of the investment objective from fundamental
to non-fundamental.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
26,444,852 1,249,088 1,997,728

3. To approve standardized fundamental investment restrictions (proposal
involves separate votes on seven sub-proposals 3A-3G).

3A. To adopt a new fundamental investment restriction concerning concentration
of the investments in the same industry.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
27,042,308 751,387 1,897,973

3B. To adopt a new fundamental investment restriction concerning borrowing money
and issuing senior securities.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
26,827,782 982,268 1,881,618

3C. To adopt a new fundamental investment restriction concerning underwriting.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
26,939,607 825,401 1,926,660

3D. To adopt a new fundamental investment restriction concerning investments in
real estate.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
26,863,808 959,130 1,868,729

<PAGE>

3E. To adopt a new fundamental investment restriction concerning investments in
commodities.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
26,781,683 1,045,070 1,864,914

3F. To adopt a new fundamental investment restriction concerning lending by the
Fund.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
26,965,530 906,394 1,819,743

3G. To reclassify all current fundamental investment restrictions as
non-fundamental.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
26,589,004 1,069,458 2,033,206

4. To approve a new investment management agreement with Delaware Management
Company.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
26,949,041 947,427 1,795,199

5. To ratify the selection of Ernst & Young LLP, as the independent auditors
for Delaware Group Premium Fund, Inc.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
27,888,166 329,662 1,473,840

6. To approve the restructuring of Delware Group Premium Fund, Inc. from a
Maryland Corporation into a Delaware Business Trust.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
27,129,907 663,967 1,897,795

Growth and Income-7

<PAGE>

Delaware Group Premium Fund, Inc.-Trend Series
Statement of Net Assets
June 30, 1999 (Unaudited)

Number of Market
Shares Value
COMMON STOCK-94.88%
Banking, Finance & Insurance-6.74%
Ambac Financial Group ............................ 88,700 $5,066,988
*Annuity And Life ................................. 11,400 256,144
Commerce One ..................................... 1,600 33,600
*Corporate Executive Board ........................ 15,500 551,703
Doral Financial .................................. 108,300 1,864,791
Freedom Securities ............................... 21,800 373,325
*Metris ........................................... 99,000 4,034,250
Webster Financial ................................ 97,000 2,637,188
----------
14,817,989
----------
Buildings & Materials-0.70%
*+Comfort Systems USA .............................. 44,900 808,200
*National Equipment Services ...................... 61,400 736,800
----------
1,545,000
----------
Business Services-2.44%
*+Profit Recovery Group ............................ 113,700 5,375,878
----------
5,375,878
----------
Cable, Media & Publishing-10.55%
*+Chancellor Media Class A ......................... 79,900 4,401,991
*Consolidated Graphics ............................ 116,100 5,805,000
*+Emmis Broadcasting ............................... 34,500 1,698,047
*+Metro Networks ................................... 30,700 1,636,694
*Radio One ........................................ 33,900 1,572,113
TCA Cable TV ..................................... 48,000 2,661,000
*+USA Networks ..................................... 135,304 5,424,845
----------
23,199,690
----------
Chemicals-2.56%
*Mettler-Toledo International ..................... 227,300 5,639,881
----------
5,639,881
----------
Computers & Technology-14.10%
*+Bindview Development ............................. 103,700 2,459,634
*Cisco Systems .................................... 85,599 5,513,116
*Clarify .......................................... 27,900 1,151,747
*Exchange Applications ............................ 77,600 3,164,625
Henry (Jack) & Associates ........................ 99,700 3,900,763
*Legato Systems ................................... 38,300 2,213,022
*Neon Systems ..................................... 13,300 442,225
*New Era of Networks .............................. 23,100 1,014,234
*+Onyx Software .................................... 37,900 817,219
*Persistence Software ............................. 9,700 132,769
*Softworks ........................................ 93,100 1,027,009
*SunGard Data Systems ............................. 62,300 2,149,350
*Veritas Software ................................. 73,675 6,996,823
----------
30,982,536
----------
Consumer Products-5.53%
G&K Services ..................................... 33,800 1,769,219
*Gemstar International Group
Limited .......................................... 159,200 10,397,750
----------
12,166,969
----------
Electronics & Electrical Equipment-11.94%
*Applied Micro Circuits ........................... 121,800 10,117,013
*+HI/FN ............................................ 20,500 1,554,797
*+Micrel ........................................... 102,100 7,568,163
*PMC - Sierra ..................................... 59,100 3,485,053
*Teradyne ......................................... 49,300 3,537,275
----------
26,262,301
----------
<PAGE>

Number of Market
Shares Value
COMMON STOCK (Continued)
Environmental Services-1.60%
*+Waste Connections ................................ 115,500 $ 3,522,750
-----------
3,522,750
-----------
Food, Beverage & Tobacco-1.85%
*Cheesecake Factory ............................... 118,900 3,619,019
*Packaged Ice ..................................... 74,600 445,269
-----------
4,064,288
-----------
Healthcare & Pharmaceuticals-4.65%
*Brookdale Living Communities ..................... 165,900 2,472,947
*+Pharmacopeia ..................................... 38,600 427,013
*QLT Phototheraputics ............................. 17,000 933,406
*Renal Care Group ................................. 35,475 916,807
*Trigon Healthcare ................................ 57,600 2,095,200
*+United Therapeutics .............................. 50,700 602,063
*Wesley Jessen VisionCare ......................... 32,500 1,045,078
*Women First Healthcare ........................... 38,200 510,925
*Xomed Surgical Products .......................... 25,400 1,230,313
-----------
10,233,752
-----------
Industrial Machinery-0.06%
*Spinnaker Industries Common ...................... 5,800 77,575
*Spinnaker Industries Class A ..................... 4,500 57,938
-----------
135,513
-----------
Leisure, Lodging & Entertainment-6.28%
*CEC Entertainment ................................ 109,300 4,617,925
*Dave & Buster's .................................. 81,900 2,375,100
*+Extended Stay America ............................ 135,900 1,630,800
Ruby Tuesday ..................................... 48,900 929,100
*Sonic Corp. ...................................... 131,850 4,268,644
-----------
13,821,569
-----------
Retail-17.84%
*+American Eagle Outfitters ........................ 92,600 4,216,194
*Cost Plus ........................................ 142,350 6,468,028
*Dollar Tree Stores ............................... 111,100 4,884,928
*+Duane Reade ...................................... 111,800 3,423,875
*Hibbett Sporting Goods ........................... 20,600 459,638
*Linens 'n Things ................................. 106,000 4,637,500
*+O'Reilly Automotive .............................. 58,400 2,938,250
*Schultz Sav-O Stores ............................. 30,000 483,750
*Staples .......................................... 205,512 6,351,605
Talbots .......................................... 34,500 1,315,313
*+Tweeter Home Entertainment Group ................. 57,700 2,253,906
*West Marine ...................................... 67,600 986,538
*+Zany Brainy ...................................... 81,600 787,950
-----------
39,207,475
-----------
Telecommunications-7.51%
*Concord Communications ........................... 66,000 2,945,250
*Network Appliance ................................ 96,600 5,400,544
*+Nextlink Communications Class A .................. 70,100 5,211,497
*+Pinnacle Holdings ................................ 121,000 2,956,938
-----------
16,514,229
-----------
Transportation & Shipping-0.53%
*+Forward Air Corp ................................. 41,300 1,160,272
-----------
1,160,272
-----------
Total Common Stock
(cost $142,007,381) 208,650,092
.................................................... -----------

- -------------------
Top 10 stock holdings, representing 32.0% of net assets, are printed in bold.

Trend-1

<PAGE>

Trend Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
REPURCHASE AGREEMENTS-9.91%
With Chase Manhattan 4.65% 7/1/99
(dated 6/30/99, collateralized by
$3,783,000 U.S. Treasury Notes 5.375%
due 2/15/01, market value $3,840,205
and $1,891,000 U.S. Treasury Notes
4.65% due 9/30/01, market value
$1,943,791 and $1,621,000
U.S. Treasury Notes 6.125% due 12/31/01,
market value $1,632,032) ....................... $7,233,000 $7,233,000
With J.P. Morgan Securities 4.70% 7/1/99
(dated 6/30/99, collateralized by
$2,089,000 U.S. Treasury Notes 6.375%
due 8/15/02, market value $2,167,320
and $1,891,000 U. S. Treasury Notes
6.25% due 8/31/02, market value
$1,949,750 and $1,308,000
U.S. Treasury Notes 5.75% due 11/30/02,
market value $1,308,464 and $1,891,000
U.S. Treasury Notes 5.50% due 1/31/03,
market value $1,910,223) ....................... 7,188,000 7,188,000

Principal Market
Amount Value
REPURCHASE AGREEMENTS (Continued)
With PaineWebber 4.80% 7/1/99
(dated 6/30/99, collateralized by
$1,785,000 U.S. Treasury Bills 7.125%
due 2/29/00, market value $1,848,058
and $1,891,000 U.S. Treasury Notes
5.625% due 11/30/00, market value
$1,899,481 and $3,783,000
U.S. Treasury Notes 5.75% due 11/30/02,
market value $3,783,983) ...................... $7,376,000 $ 7,376,000
-----------
Total Repurchase Agreements
(cost $21,797,000) ............................ $21,797,000
-----------

TOTAL MARKET VALUE OF SECURITIES-104.79% (cost $163,804,381) .. $230,447,092

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(4.79%) ....... (10,539,519)
------------
NET ASSETS APPLICABLE TO 9,202,887 SHARES ($0.01 PAR VALUE)
OUTSTANDING; EQUIVALENT TO $23.90 PER SHARE-100.00% ........ $219,907,573
============

COMPONENTS OF NET ASSETS AT JUNE 30, 1999:
Common stock, $0.01 par value, 1,000,000,000 shares
authorized to the Fund with 50,000,000 shares
allocated to the Series .................................... $142,779,608
Distributions in excess of net investment income .............. (241,868)
Accumulated net realized gain on investments .................. 10,727,122
Net unrealized appreciation of investments .................... 66,642,711
------------
Total net assets .............................................. $219,907,573
============

- -------------------
* Non-income producing security for the period ending June 30, 1999.
+ Security is partially or fully on loan.

See accompanying notes

Trend-2

<PAGE>

Delaware Group Premium Fund, Inc.-
Trend Series
Statement of Operations
Six Months Ended June 30, 1999
(Unaudited)

INVESTMENT INCOME:
Interest ........................................... $368,265
Dividends .......................................... 135,567
-----------
503,832
-----------

EXPENSES:
Management fees .................................... 672,599
Accounting and administration ...................... 44,556
Professional fees .................................. 9,280
Reports and statements to shareholders ............. 8,380
Taxes (other than taxes on income) ................. 3,429
Registration fees .................................. 2,750
Dividend disbursing and transfer agent fees
and expenses .................................... 2,370
Custodian fees ..................................... 2,000
Directors' fees .................................... 1,732
Other .............................................. 6,057
-----------
753,153
Less expenses absorbed or waived ................... (9,991)
Less expenses paid indirectly ...................... 2,064
-----------
Total expenses ..................................... 741,098
-----------

NET INVESTMENT LOSS ................................ (237,266)
-----------

NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments ................... 12,079,481
Net change in unrealized appreciation /
depreciation of investments ..................... 25,421,620
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS .................................. 37,501,101
-----------

NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS ...................................... $37,263,835
===========

See accompanying notes

<PAGE>

Delaware Group Premium Fund, Inc.-
Trend Series
Statements of Changes in Net Assets

Period Year
Ended 6/30/99 Ended
(Unaudited) 12/31/98
------------- --------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income (loss) ................... $ (237,266) $ 42,700
Net realized gain (loss) on investments ........ 12,079,481 (1,048,182)
Net change in unrealized appreciation /
depreciation of investments ................. 25,421,620 23,501,658
------------ ------------
Net increase in net assets resulting
from operations ............................. 37,263,835 22,496,176
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income .......................... (17,149) (135,410)
Net realized gain on investments ............... -- (2,315,513)
------------ ------------
(17,149) (2,450,923)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ...................... 69,259,240 113,799,362
Net asset value of shares issued upon
reinvestment of distributions from net
investment income and net realized
gain on investments ......................... 17,149 2,450,923
------------ ------------
69,276,389 116,250,285

Cost of shares repurchased ..................... (54,866,712) (86,320,418)
------------ ------------
Increase in net assets derived from capital
share transactions .......................... 14,409,677 29,929,867
------------ ------------
NET INCREASE IN NET ASSETS ..................... 51,656,363 49,975,120
------------ ------------
NET ASSETS:
Beginning of period ............................ 168,251,210 118,276,090
------------ ------------
End of period .................................. $219,907,573 $168,251,210
============ ============

See accompanying notes

Trend-3

<PAGE>

Delaware Group Premium Fund, Inc.-Trend Series
Financial Highlights

Selected data for each share of the Series outstanding throughout each period
were as follows:

<TABLE>
<CAPTION>
Six Months
Ended 6/30/99(1) Year Ended December 31,
(Unaudited) 1998 1997 1996 1995 1994
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $19.760 $17.380 $14.560 $14.020 $10.160 $10.200

Income (loss) from investment operations:
Net investment income .................................... (0.023) 0.006 0.019 0.050 0.098 0.079
Net realized and unrealized gain (loss) on investments ... 4.165 2.736 3.031 1.380 3.852 (0.119)
------- ------- ------- ------- ------- -------
Total from investment operations ......................... 4.142 2.742 3.050 1.430 3.950 (0.040)
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ..................... (0.002) (0.020) (0.050) (0.090) (0.090) none
Distributions from net realized gain on investments ...... none (0.342) (0.180) (0.800) none none
------- ------- ------- ------- ------- -------
Total dividends and distributions ........................ (0.002) (0.362) (0.230) (0.890) (0.090) none
------- ------- ------- ------- ------- -------

Net asset value, end of period ........................... $23.900 $19.760 $17.380 $14.560 $14.020 $10.160
======= ======= ======= ======= ======= =======

Total return ............................................. 20.97% 16.04% 21.37% 11.00% 39.21% (0.39%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $219,907 $168,251 $118,276 $56,423 $20,510 $7,087
Ratio of expenses to average net assets .................. 0.83% 0.81% 0.80% 0.80% 0.80% 0.80%
Ratio of expenses to average net assets
prior to expense limitation and expenses
paid indirectly ....................................... 0.84% 0.85% 0.88% 0.92% 0.96% 1.47%
Ratio of net investment income to average net assets ..... (0.27%) 0.03% 0.16% 0.56% 1.03% 1.63%
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly ....................................... (0.28%) (0.01%) 0.08% 0.44% 0.87% 0.96%
Portfolio turnover ....................................... 104% 121% 125% 112% 76% 59%
</TABLE>

- -------------------
(1) Ratios have been annualized and total return has not been annualized.

See accompanying notes

Trend-4

<PAGE>

Delaware Group Premium Fund, Inc.-Trend Series
Notes to Financial Statements
June 30, 1999
(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 17 series:
the Aggressive Growth Series, the Capital Reserves Series, the Cash Reserve
Series, the Convertible Securities Series, the Delaware Balanced Series
(formerly the Delaware Series), the DelCap Series, the Delchester Series, the
Devon Series, the Emerging Markets Series, the Global Bond Series, the Growth
and Income Series (formerly the Decatur Total Return Series), the International
Equity Series, the REIT Series, the Small Cap Value Series, the Social Awareness
Series, the Strategic Income Series, and the Trend Series. These financial
statements and the related notes pertain to the Trend 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.

<PAGE>

Other--Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis.

The Trend Series will make payments from net income and net realized gain on
investments, if any, following the close of the fiscal year.

Certain expenses of the Series are paid through "soft dollar" arrangements with
brokers. These transactions are done subject to best price and execution. The
amount of these expenses was approximately $2,064 for the period ended June 30,
1999. The Series may receive earnings credits from its custodian when positive
cash balances are maintained, which are used to offset custody fees. There were
no earnings credits for the period ended June 30, 1999. The expenses paid under
the above arrangements are included in their respective expense captions on the
Statement of Operations with the corresponding expense offset shown as "Expenses
paid indirectly".

2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Series
pays Delaware Management Company ("DMC"), the Investment Manager of the Series,
an annual fee which is calculated at the following rates: 0.75% of the first
$500 million of average daily net assets of the series, 0.70% on the next $500
million, 0.65% on the next $1,500 million and 0.60% on the average daily net
assets over $2,500 million. These rates became effective May 1, 1999. The old
management fee was calculated at the rate of 0.75% on the average daily net
assets of the Series.

DMC has elected to waive that portion, if any, of the annual management fee
payable to the extent necessary to ensure that annual operating expenses
exclusive of taxes, interest, brokerage commissions and extraordinary expenses
do not exceed 0.85% of average daily net assets of the Series through October
31, 1999.

Trend-5

<PAGE>

Trend Series
Notes to Financial Statements (Continued)

On June 30, 1999, the Series had liabilities payable to affiliates as follows:

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, 1999, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases .................................... $98,899,222
Sales ........................................ $87,552,860

For federal income tax purposes, the Series had accumulated capital losses at
December 31, 1998 as follows:

Year of
expiration
2006
-----------
$916,288

<PAGE>

4. Capital Stock
Transactions in capital stock shares were as follows:

<TABLE>
<CAPTION>
Shares issued upon
reinvestment of
distributions from net
investment income
and net realized gain Shares Net
Shares sold on investments repurchased increase
----------- ---------------------- ----------- ---------
<S> <C> <C> <C> <C>
Period ended June 30, 1999 ............ 3,334,682 895 (2,649,504) 686,073
Year ended December 31, 1998 .......... 6,458,076 147,114 (4,891,718) 1,713,472
</TABLE>

Market value
of securities Market value
on loan of collateral
------------- -------------
$33,649,483 $34,032,450

Net income from securities lending activities for the period ended June 30, 1999
was $44,504 and is included in interest income on the statement of operations.

Trend-6

<PAGE>

Delaware Group Premium Fund Inc.-Trend Series
Proxy Results
(Unaudited)

For the six months ended June 30, 1999, Delaware Premium Fund, Inc. - Trend
Series shareholders voted on the following proposals at the annual meeting of
shareholders on March 17, 1999 or as adjourned. The description of each proposal
and number of shares voted are as follows:

1. To elect the Delaware Group Premium Fund, Inc. Board of Directors.

Shares Shares Voted
Voted Withheld
For Authority Abstain
---------- ------------ -------
Jeffrey J. Nick ................. 8,228,270 207,630 -
Walter P. Babich ................ 8,227,819 208,081 -
John H. Durham .................. 8,242,542 193,369 -
Anthony D. Knerr ................ 8,240,765 195,135 -
Ann R. Leven .................... 8,215,497 220,403 -
Thomas F. Madison ............... 8,241,934 193,966 -
Charles E. Peck ................. 8,227,353 208,547 -
Wayne A. Stork .................. 8,239,149 196,751 -
Jan L. Yeomans .................. 8,208,494 227,406 -

2. To approve the reclassification of the investment objective from fundamental
to non-fundamental.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
7,464,471 439,478 531,951

2. To approve standardized fundamental investment restrictions (proposal
involves separate votes on seven sub-proposals 3A-3G).

3A. To adopt a new fundamental investment restriction concerning concentration
of the investments in the same industry.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
7,645,408 287,628 502,864

3B. To adopt a new fundamental investment restriction concerning borrowing money
and issuing senior securities.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
7,613,455 308,112 523,333

3C. To adopt a new fundamental investment restriction concerning underwriting.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
7,636,398 243,008 556,495

3D. To adopt a new fundamental investment restriction concerning investments in
real estate.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
7,641,021 304,236 490,642

<PAGE>

3E. To adopt a new fundamental investment restriction concerning investments in
commodities.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
7,620,227 305,744 509,929

3F. To adopt a new fundamental investment restriction concerning lending by the
Fund.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
7,648,984 292,128 494,788

3G. To reclassify all current fundamental investment restrictions as
non-fundamental.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
7,518,084 394,994 522,823

4. To approve a new investment management agreement with Delaware Management
Company.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
7,631,543 331,007 473,350

5. To ratify the selection of Ernst & Young LLP, as the independent auditors for
Delaware Group Premium Fund, Inc.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
7,914,842 108,714 412,343

6. To approve the restructuring of Delaware Group Premium Fund, Inc. from a
Maryland Corporation into a Delaware Business Trust.

Shares Shares Shares
Voted Voted Voted
For Against Abstain
---------- --------- ---------
7,565,860 321,435 548,605

Trend-7