<PAGE>
DELAWARE GROUP
- -----------------------
PREMIUM FUND
- -----------------------
SMALL CAP VALUE SERIES
- -----------------------
REIT SERIES
- -----------------------
ANNUAL REPORT
- ---------------------
DECEMBER 31, 1998
DELAWARE
INVESTMENTS
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Philadelphia o London
<PAGE>
January 10, 1999
Dear Policy Holder:
Fiscal year 1998 was the best and worst of times for equity and fixed-income
investors. While the year began and ended with U.S. stocks posting tremendous
gains, the events in between left investors a bit uncertain about the outlook
going forward.
1998 Total Return
Standard & Poor's 500 Index +28.56%
Russell 2000 Index -2.55%
Lehman Brothers Government/Corporate Bond Index +8.69%
Morgan Stanley Europe, Australia, Far East (EAFE) Index +20.33%
Performance quoted above assumes reinvestment of dividends. It is not intended
to represent the performance of any Premium Fund Series. Complete performance
information can be found following each discussion section of this report. Past
performance does not guarantee future results. The indexes are unmanaged and
assume no management fees or expenses. A direct investment in an unmanaged index
is not possible.
During the first half of 1998, U.S. and European stock markets continued to
hit record levels fueled by a positive environment with low inflation, low
interest rates and low unemployment. Between January 1 and July 17, the Standard
& Poor's 500 Index rose +23.3% and the Morgan Stanley Europe, Australia, Far
East (EAFE) Index had posted a comparable gain of +21.3%.
However, as U.S. corporations began lowering their earnings expectations for
the second half of 1998 and investors learned of escalating financial problems
in Asia, Russia and Latin America, concern mounted that the U.S. economy would
weaken. Foreign investors responded by moving their money out of riskier
investments--stocks and non-government bonds--and into U.S. Treasuries for their
safety and liquidity.
Stock and non-government bond prices spiraled downward. Conversely, prices of
U.S. Treasury securities skyrocketed causing yields to decline. For the first
time since the 1960s, the yield on the benchmark 30-year U.S. Treasury fell
below 5% to 4.97% at the end of September.
To help ease the strain on the U.S. economy, the Federal Reserve responded by
lowering its target for short-term interest rates three times in the fall. By
the end of November, the federal funds rate (the interest rate charged between
banks for overnight loans) was reduced a total of 0.75 percentage points to
4.75%.
The impact of the Fed's rate cuts was tremendous. U.S. stocks soared to new
highs--the large-cap S&P 500 Index returned +21.28% in the fourth quarter after
reporting a near 10% drop in the third quarter. Small and mid-cap stocks also
rebounded, but still underperformed their large-cap counterparts in 1998.
Most strategists believe that the economies of Southeast Asia will bottom out
in 1999, that Japan may begin to recover from its recession, and that the
Federal Reserve has the capability, and the will, to keep the U.S. economy
growing. As long as the economy continues to grow, we think the stock market
will enjoy a favorable environment, though volatility may continue and returns
may not be in the 20+% range we have seen for the past four years.
On the following pages, the performance of each Series of Premium Fund is
discussed in detail. After a difficult period like we encountered in 1998, it is
important to remember that your annuity is a long-term investment that requires
patience and a long-term perspective. We thank you for placing your confidence
in Delaware Investments.
Sincerely,
/s/ Jeffrey J. Nick
Jeffrey J. Nick
Chairman, President and Chief Executive Officer
Delaware Investments Family of Funds
<PAGE>
FOR GROWTH OF CAPITAL
Small Cap Value Series
(Formerly Value Series)
Investment Strategy and Performance in 1998
After a strong start early in 1998, small company stocks lagged the broader
stock market for most of our 1998 fiscal period. Mounting concerns over
shrinking corporate profits, slowing economic growth and the possibility of
recession led investors to shun small company stocks for the perceived safety of
larger companies.
Small Cap Value Series delivered a disappointing total return of -4.79%
(capital change plus reinvestment of distributions) for the 12 months ended
December 31, 1998. This was slightly worse than the -2.55% return of its
benchmark, the Russell 2000 Index.
Because of our long-term focus on undervalued companies, we did not invest
significantly in growth sectors of the market, including technology. Technology
was the year's best performing sector, a key reason why we underperformed the
Index, which has a higher concentration of growth companies.
We typically invest in small companies that are temporarily undervalued,
out-of-favor, or relatively unknown, and which we believe offer higher sales and
earnings potential relative to competitors.
As investors worried about earnings disappointments from smaller companies,
stock prices fell during the summer months and finding buyers for stocks in
small, relatively unknown companies was especially difficult. Stronger earnings
from large-cap growth companies made investors view that sector as a safer place
to invest in 1998.
Portfolio Snapshot
In selecting stocks for the Small Cap Value Series portfolio, we target our
research on U.S. companies that have a market capitalization between $400
million and $1.4 billion. From this universe--which consists of approximately
2,500 companies--we narrow our selection to 100 companies.
A company's cash flow is one of the most important factors we evaluate.
Measuring the amount of money the business generates through operations helps us
rate a company's ability to expand, respond to competition and handle unexpected
challenges.
In fiscal 1998, Small Cap Value Series held the largest portion of its assets
in the financial services industry, focusing on banking and insurance companies.
Questionable management and lending practices in this industry caused some
investor concern and resulted in lackluster performance from the sector as a
whole.
The Series also held a relatively large position in real estate investment
trusts (REITs). Fundamentals in the real estate market remained positive in
1998. Rent and property prices were stable, and demand for commercial and
residential rental space was strong. Still, our investments in this sector did
not perform well. This was due in part to limited availability of credit capital
for REITs to expand.
Investment Outlook
The Federal Reserve has been providing and may continue to provide
substantial liquidity to financial markets in 1999. This could pave the way for
stronger performance from small-cap stocks. In our experience, a growing
domestic economy coupled with easing Fed policies has historically been a
favorable environment for small-cap stocks.
Already, there are some positive indications that the environment for
small-cap value stocks may improve. In late December, the government's report on
U.S. economic activity--the Conference Board's Index of Leading Economic
Indicators--confirmed the strength of the U.S. economy. In November the Index
recorded its biggest monthly increase in nearly two years.
We are confident that over the long term, small, undervalued companies offer
investors substantial opportunities for capital appreciation.
- --------------------------------------------------------------------------------
Small Cap Value Series Investment Objective
Seeks capital appreciation. It attempts to achieve this objective by investing
in stocks of small companies whose market value appears low relative to
underlying value or future earnings and growth potential. Emphasis is placed on
companies that may be temporarily out of favor or whose value is not yet
recognized by the market.
- --------------------------------------------------------------------------------
Small Cap Value-1
<PAGE>
Growth of a $10,000 Investment
December 27, 1993 through
December 31, 1998
Small Cap Value Series Russell 2000 Index
12/27/93 $10,000 $10,000
3/31/94 $10,139 $ 9,593
6/30/94 $ 9,979 $ 8,991
9/30/94 $10,468 $ 9,829
12/31/94 $10,288 $ 9,757
3/31/95 $10,637 $10,292
6/30/95 $11,178 $11,313
9/30/95 $12,067 $12,599
12/31/95 $12,741 $12,785
3/31/96 $13,287 $13,520
6/30/96 $13,858 $14,310
9/30/96 $13,750 $14,188
12/31/96 $14,870 $14,225
3/31/97 $16,063 $12,733
6/30/97 $17,326 $14,969
9/30/97 $20,767 $17,501
12/31/97 $20,756 $16,068
3/31/98 $22,021 $17,684
6/30/98 $20,928 $16,860
9/30/98 $17,552 $13,463
12/31/98 $19,762 $15,659
Small Cap Value Series
Average Annual Total Returns
- ----------------------------
Lifetime +14.55%
Five Years +14.12%
One Year -4.79%
For periods ending December 31, 1998
Past performance is not a guarantee of future results. Return and share price
will fluctuate so that shares, when redeemed, may be worth more or less than
their original cost.
The chart above shows a $10,000 investment in both the Small Cap Value Series
and the Russell 2000 Index for the period from the Series' inception on December
27, 1993 through December 31, 1998. All dividends and capital gains were
reinvested. The Index is unmanaged, with no set investment objective and does
not include the "real world" costs of managing a mutual fund. Earnings from a
variable annuity investment compound tax-free until withdrawal, so no
adjustments were made for income taxes. The effect of an expense limitation is
included in the chart. Performance does not reflect insurance fees related to a
variable annuity product investment nor the deferred sales charge that would
apply to certain withdrawals of investments held for less than eight years.
Performance shown here would have been reduced if such fees were included and
the expense limitation was removed. For more information about fees, consult
your variable annuity prospectus.
Small Cap Value-2
<PAGE>
Delaware Group Premium Fund, Inc.-Small Cap Value Series
Statement of Net Assets
December 31, 1998
Number Market
of Shares Value
COMMON STOCK-94.34%
Aerospace & Defense-0.51%
Cordant Technologies ........................... 14,200 $ 532,500
----------
532,500
----------
Automobiles & Automotive Parts-5.19%
Arvin Industries ............................... 35,800 1,492,413
CLARCOR ........................................ 51,750 1,035,000
Federal Signal ................................. 66,900 1,831,388
Smith (A.O.) ................................... 42,050 1,032,853
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5,391,654
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Banking, Finance & Insurance-16.64%
*Avis Rent A Car ................................ 73,800 1,785,038
CMAC Investment ................................ 22,500 1,033,594
Enhance Financial Services Group ............... 57,200 1,716,000
Everest Re Holdings ............................ 31,400 1,189,275
*Farm Family Holdings ........................... 28,600 972,400
*Financial Federal .............................. 47,950 1,186,763
Horace Mann Educators .......................... 68,600 1,955,100
M & T Bank ..................................... 1,725 895,167
NAC RE Group ................................... 19,000 891,813
North Fork Bancorporation ...................... 80,750 1,932,953
Peoples Heritage Financial Group ............... 87,000 1,742,719
SCPIE Holdings ................................. 15,000 454,688
Westamerica Bancorporation ..................... 42,200 1,552,169
----------
17,307,679
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Buildings & Materials-4.04%
Chicago Bridge and Iron ........................ 36,600 450,638
D.R. Horton .................................... 74,900 1,722,700
*Jacobs Engineering Group ....................... 49,900 2,033,425
----------
4,206,763
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Cable, Media & Publishing-1.74%
Cadmus Communications .......................... 23,700 451,781
*World Color Press .............................. 44,600 1,357,513
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1,809,294
----------
Chemicals-5.09%
Crompton & Knowles ............................. 41,800 864,738
Ferro .......................................... 23,100 600,600
OM Group ....................................... 29,700 1,084,050
RPM ............................................ 39,900 638,400
*Scotts ......................................... 54,900 2,110,219
----------
5,298,007
----------
Computers & Technology-6.84%
*Etec Systems ................................... 23,300 932,000
*Novellus Systems ............................... 16,700 825,084
*Quantum ........................................ 35,300 749,022
*SCI Systems .................................... 25,900 1,495,725
Scientific-Atlanta ............................. 55,400 1,263,813
*Synopsys ....................................... 34,100 1,847,794
----------
7,113,438
----------
Electronics & Electrical Equipment-2.13%
Kuhlman ......................................... 58,600 2,219,475
----------
2,219,475
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- ----------------------
Top 10 stock holdings, representing 21.3% of net assets, are printed in bold.
<PAGE>
Number Market
of Shares Value
COMMON STOCK (Continued)
Energy-5.12%
*BJ Services ...................................... 29,700 $ 464,063
Nicor ............................................ 37,100 1,567,475
*Oceaneering International ........................ 68,800 1,032,000
*Santa Fe Energy Resources ........................ 68,900 508,138
*Seagull Energy ................................... 87,600 552,975
Vintage Petroleum ................................ 84,200 726,225
*Weatherford International ........................ 24,500 474,688
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5,325,564
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Food, Beverage & Tobacco-3.65%
Corn Products .................................... 43,300 1,315,238
Universal Foods .................................. 90,200 2,474,863
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3,790,101
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Healthcare & Pharmaceuticals-3.28%
Arrow International .............................. 35,800 1,125,463
*Trigon Healthcare ................................ 61,100 2,279,794
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3,405,257
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Industrial Machinery-4.05%
Columbus McKinnon ................................ 36,800 655,500
*Global Industries Technology ..................... 21,100 225,506
IDEX ............................................. 35,850 878,325
Milacron ......................................... 51,500 991,375
Regal Beloit ..................................... 41,100 945,300
Watts Industries ................................. 31,100 517,038
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4,213,044
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Leisure, Lodging & Entertainment-3.69%
*Hollywood Park ................................... 31,200 259,350
*King World Productions ........................... 39,200 1,153,950
Viad ............................................. 79,700 2,420,888
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3,834,188
----------
Paper & Forest Products-3.77%
Bowater .......................................... 22,300 924,056
Caraustar Industries ............................. 31,500 897,750
Chesapeake ....................................... 15,900 586,313
Glatfelter (P.H.) ................................ 44,600 551,925
Rayonier ......................................... 20,900 960,094
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3,920,138
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Real Estate-9.02%
Cabot Industrial Trust ........................... 59,200 1,209,900
Chateau Communities .............................. 22,715 665,833
Duke Realty Investments .......................... 44,500 1,034,625
Kilroy Realty .................................... 16,800 386,400
MeriStar Hospitality ............................. 44,945 834,292
New Plan Excel Realty Trust ...................... 42,480 942,525
Pan Pacific Retail Properties .................... 54,800 1,092,575
Patriot American Hospitality ..................... 33,932 203,592
Prentiss Properties Trust ........................ 51,000 1,137,938
Public Storage ................................... 22,100 598,081
Reckson Associates Realty ........................ 57,500 1,275,781
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9,381,542
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Small Cap Value-3
<PAGE>
Small Cap Value Series
Statement of Net Assets (Continued)
Number Market
of Shares Value
COMMON STOCK (Continued)
Retail-6.70%
*BJ's Wholesale Club .............................. 49,200 $2,278,575
Casey's General Stores ........................... 77,800 1,013,831
Pier 1 Imports ................................... 124,800 1,209,000
*Zale ............................................. 76,300 2,460,675
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6,962,081
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Textiles, Apparel & Furniture-6.16%
*Furniture Brands International ................... 55,300 1,506,925
HON Industries ................................... 65,000 1,555,938
*Jones Apparel Group .............................. 48,300 1,065,619
Kellwood ......................................... 48,300 1,207,500
*Quaker Fabric .................................... 16,750 106,520
Wolverine World Wide ............................. 72,500 960,625
----------
6,403,127
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Transportation & Shipping-3.48%
*Mesaba Holdings .................................. 59,300 1,221,209
*M.S. Carriers .................................... 39,900 1,301,738
USFreightways .................................... 37,700 1,098,013
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3,620,960
----------
Utilities-3.24%
American Water Works ............................. 56,100 1,893,375
Public Service Company of New Mexico ............. 26,900 549,769
Sierra Pacific Resources ......................... 24,400 927,200
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3,370,344
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Total Common Stock
(cost $89,840,116) .............................. 98,105,156
----------
<PAGE>
Principal Market
Amount Value
Repurchase Agreements-7.24%
With Chase Manhattan 4.50% 1/4/99
(dated 12/31/98, collateralized by
$1,941,000 U.S. Treasury Notes 7.875%
due 8/15/01, market value $2,153,017) .......... $2,109,000 $2,109,000
With J.P. Morgan Securities 4.75%
1/4/99 (dated 12/31/98, collateralized
by $2,691,000 U.S. Treasury Notes
5.75% due 10/31/00, market value $2,767,905) ... 2,711,000 2,711,000
With PaineWebber 4.85% 1/4/99
(dated 12/31/98, collateralized by
$590,000 U.S. Treasury Notes 7.75% due
12/31/99, market value $607,841
and $825,000 U.S. Treasury Notes 7.75% due
1/31/00, market value $878,237 and
$828,000 U.S. Treasury Notes 6.25% due
8/31/00, market value $866,934 and $395,000
U.S. Treasury Notes 6.50% due
5/31/01, market value $413,522) ................ 2,711,000 2,711,000
----------
Total Repurchase Agreements
(cost $7,531,000) .............................. 7,531,000
----------
TOTAL MARKET VALUE OF SECURITIES-101.58%
(cost $97,371,116) ............................. $105,636,156
LIABILITIES NET OF RECEIVABLES AND OTHER
ASSETS-(1.58%) ................................. (1,646,732)
------------
NET ASSETS APPLICABLE TO 6,320,130 SHARES
($0.01, PAR VALUE) OUTSTANDING; EQUIVALENT TO
$16.45 PER SHARE-100.00% ....................... $103,989,424
============
COMPONENTS OF NET ASSETS AT DECEMBER 31, 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 ........................ $ 95,332,481
Undistributed net investment income ............... 1,223,580
Accumulated net realized loss on investments ...... (831,677)
Net unrealized appreciation of investments ........ 8,265,040
------------
Total net assets .................................. $103,989,424
============
- ----------------------
* Non-income producing security for the year ended December 31, 1998.
See accompanying notes
Small Cap Value-4
<PAGE>
Delaware Group Premium Fund, Inc.-
Small Cap Value Series
Statement of Operations
Year Ended December 31, 1998
INVESTMENT INCOME:
Dividends ......................................... $1,693,215
Interest .......................................... 331,712
-----------
2,024,927
-----------
EXPENSES:
Management fees ................................... 706,066
Accounting and administration ..................... 37,011
Registration fees ................................. 11,649
Professional fees ................................. 11,011
Reports and statements to shareholders ............ 8,850
Custodian fees .................................... 7,804
Taxes (other than taxes on income) ................ 5,119
Dividend disbursing and transfer agent
fees and expenses .............................. 1,500
Directors' fees ................................... 1,467
Other ............................................. 15,116
-----------
805,593
-----------
Less expenses absorbed or waived by
Delaware Management Company .................... (25,707)
-----------
Total expenses .................................... 779,886
-----------
NET INVESTMENT INCOME ............................. 1,245,041
-----------
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS:
Net realized loss on investments .................. (827,096)
Net change in unrealized appreciation/
depreciation of investments .................... (5,586,278)
-----------
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS ............................ (6,413,374)
-----------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS ...................... ($5,168,333)
-----------
See accompanying notes
<PAGE>
Delaware Group Premium Fund, Inc.-
Small Cap Value Series
Statements of Changes in Net Assets
Year Ended Year Ended
12/31/98 12/31/97
---------- ----------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ............................. $ 1,245,041 $ 629,715
Net realized gain (loss) on investments ........... (827,096) 2,326,391
Net change in unrealized appreciation /
depreciation of investments .................... (5,586,278) 10,895,658
------------ -----------
Net increase (decrease) in net assets
resulting from operations ...................... (5,168,333) 13,851,764
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DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ............................. (638,385) (197,794)
Net realized gain on investments .................. (2,340,745) (1,672,255)
------------ -----------
(2,979,130) (1,870,049)
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CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ......................... 34,478,733 49,431,262
Net asset value of shares issued upon
reinvestment of distributions from net
investment income and net realized
gain on investments ............................ 2,979,130 1,870,049
------------ -----------
37,457,863 51,301,311
Cost of shares repurchased ........................ (9,392,119) (2,894,623)
------------ -----------
Increase in net assets derived from capital
share transactions ............................. 28,065,744 48,406,688
------------ -----------
NET INCREASE IN NET ASSETS ........................ 19,918,281 60,388,403
------------ -----------
NET ASSETS:
Beginning of year ................................. 84,071,143 23,682,740
------------ -----------
End of year ....................................... $103,989,424 $84,071,143
============ ===========
See accompanying notes
Small Cap Value-5
<PAGE>
Delaware Group Premium Fund, Inc.-Small Cap Value Series
Financial Highlights
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
1998 1997 1996 1995 1994
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ................ $ 17.920 $14.500 $12.470 $10.290 $10.210
Income (loss) from investment operations:
Net investment income ............................. 0.196 0.122 0.112 0.192 0.148
Net realized and unrealized gain (loss) on
investments .................................... (1.036) 4.338 2.548 2.208 (0.068)
-------- ------- ------- ------- -------
Total from investment operations .................. (0.840) 4.460 2.660 2.400 0.080
-------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .............. (0.135) (0.110) (0.180) (0.150) none
Distributions from net realized gain
on investments ................................. (0.495) (0.930) (0.450) (0.070) none
-------- ------- ------- ------- -------
Total dividends and distributions ................. (0.630) (1.040) (0.630) (0.220) none
-------- ------- ------- ------- -------
Net asset value, end of year ...................... $ 16.450 $17.920 $14.500 $12.470 $10.290
======== ======= ======= ======= =======
Total return ...................................... (4.79%) 32.91% 22.55% 23.85% 0.78%
Ratios and supplemental data:
Net assets, end of year (000 omitted) ............. $103,989 $84,071 $23,683 $11,929 $ 6,291
Ratio of expenses to average net assets ........... 0.83% 0.80% 0.80% 0.80% 0.80%
Ratio of expenses to average net assets
prior to expense limitation .................... 0.85% 0.90% 0.99% 0.96% 1.41%
Ratio of net investment income to average
net assets ..................................... 1.32% 1.24% 1.28% 2.13% 2.62%
Ratio of net investment income to average net
assets prior to expense limitation ............. 1.30% 1.14% 1.09% 1.97% 2.01%
Portfolio turnover ................................ 45% 41% 84% 71% 26%
</TABLE>
See accompanying notes
Small Cap Value-6
<PAGE>
Delaware Group Premium Fund, Inc.-Small Cap Value Series
Notes to Financial Statements
December 31, 1998
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. These financial statements and the related notes pertain to the Small
Cap Value 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. 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.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Other--Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis.
The Small Cap Value Series will make payments from net investment income and net
realized gain on investments, if any, following the close of the fiscal year.
Certain expenses of the Fund are paid through "soft dollar" arrangements with
brokers. The amount of these expenses is less than 0.01% of the Series' average
daily net assets.
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 rate of 0.75% of 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 April 30,
1999. Prior to May 1, 1998, the expense limitation was 0.80%.
Small Cap Value-7
<PAGE>
Small Cap Value Series
Notes to Financial Statements (Continued)
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.
On December 31, 1998, the Series had liabilities payable to affiliates as
follows:
Dividend disbursing
Investment transfer agent,
management accounting fees
fee payable to and other expenses
DMC payable to DSC
-------------- -------------------
$61,761 $3,695
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 year ended December 31, 1998, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:
Purchases ...................................... $67,051,105
Sales .......................................... $39,625,573
At December 31, 1998, the aggregate cost of securities and unrealized
appreciation (depreciation) for federal income tax purposes for the Series were
as follows:
Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation appreciation
----------- ------------ ------------ --------------
$97,395,146 $14,628,809 ($6,387,799) $8,241,010
For federal income tax purposes, the Series had accumulated capital losses at
December 31, 1998 as follows:
Year of
expiration
2006
----------
$807,647
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>
Year ended December 31, 1998 ..... 2,030,407 175,656 (578,317) 1,627,746
Year ended December 31, 1997 ..... 3,108,967 135,708 (185,778) 3,058,897
</TABLE>
Small Cap Value-8
<PAGE>
Delaware Group Premium Fund, Inc.-Small Cap Value Series
Report of Independent Auditors
To the Shareholders and Board of Directors
Delaware Group Premium Fund, Inc.-Small Cap Value Series
We have audited the accompanying statement of net assets of Delaware Group
Premium Fund, Inc.-Small Cap Value Series (the "Fund") as of December 31, 1998,
and the related statement of operations for the year then ended, the statements
of changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1998, by correspondence with the Fund's
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Group Premium Fund, Inc.-Small Cap Value Series at December 31, 1998,
the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and its financial
highlights for each of the five years in the period then ended, in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
---------------------
Philadelphia, Pennsylvania Ernst & Young LLP
February 5, 1999
Small Cap Value-9
<PAGE>
FOR TOTAL RETURN
REIT Series
Investment Strategy and Performance in 1998
During 1998, share prices of real estate investment trusts (REITs) declined
as investors and lending institutions became wary of credit risk. Loan defaults
overseas and in the U.S. raised concerns about lenders' ability to finance
development.
REIT Series was introduced on May 4, 1998, just a few months before stock
market volatility and negative industry trends began to brew in the real estate
market. Between May 4, 1998 and December 31, 1998, the Series had a total return
of -9.00% (capital change plus reinvestment of distributions). We do not think
our performance during this short time period is indicative of long-term
performance.
During the same eight-month period, the Series' performance benchmark--the
NAREIT Equity REIT Index--had a total return of -14.33%.
More cautious lending in late summer made it difficult for REITs to raise
capital needed to acquire new properties and companies. Lack of capital drove
down prices on commercial real estate by as much as 25%, and reduced the supply
of new construction. Even REITs with better financing opportunities did not
escape the year unscathed.
In this difficult environment, we focused on REITs that seemed able to expand
using cash flow from operations. We believe these companies are better equipped
to sustain their growth rates going forward than REITs that rely heavily on
acquisitions to grow.
Portfolio Snapshot
Many of REIT Series' portfolio holdings are companies that own and operate
properties in "infill" locations; that is, areas of the country that have
tremendous appeal, but where land is expensive and zoning laws are more
restrictive. The demand for these "garden spots" outweighs the supply, which
bodes well for companies that own and operate them. In 1998, we found infill
locations in the Northwest, Northeast and Mid-Atlantic regions of the country.
The Series' largest sector allocation through December 31, 1998 was in office
and industrial REITs. We believe this sector has solid earnings potential, and
we are focusing on companies that have strong internal growth rates.
Retail strip center REITs were a source of positive performance for the
Series. We believe this sector is more stable, since leases are generally for
longer time periods. The retail sector also relies more on internal expansion to
drive earnings growth.
Investment Outlook
Credit markets improved somewhat in recent months as the Federal Reserve
reduced its target for short-term interest rates by cutting the federal funds
rate by a total of 0.75%. We believe lending and market conditions will continue
to improve in 1999.
Even so, we will continue to focus REIT Series on quality companies that have
solid management, strong balance sheets and good capital structure. We will try
to avoid companies whose earnings are primarily acquisition-driven in an effort
to preserve capital in the portfolio.
We expect growth rates in the real estate industry to moderate in 1999 and
2000. However, we believe that the earnings growth from REITs will remain higher
than that of large companies in the unmanaged Standard & Poor's 500 Index.
Our long-term outlook for the real estate market remains positive. We believe
the current credit crunch will benefit REITs long term as long as it does not
lead to a recession. We remain confident that REIT Series can play an integral
part of a long-term asset allocation strategy.
- --------------------------------------------------------------------------------
REIT Series Investment Objective
Seeks to achieve maximum long-term total return. Capital appreciation is a
secondary objective. It seeks to achieve its objectives by investing in
securities of companies primarily engaged in the real estate industry.
- --------------------------------------------------------------------------------
REIT-1
<PAGE>
Performance of a $10,000 Investment
May 4, 1998 through
December 31, 1998
REIT Series NAREIT Equity REIT Index
----------- ------------------------
5/1/98 $10,000 $10,000
5/31/98 $ 9,900 $10,000
6/30/98 $ 9,850 $ 9,932
7/31/98 $ 9,329 $ 9,287
8/31/98 $ 8,590 $ 8,411
9/30/98 $ 9,020 $ 8,887
10/31/98 $ 8,810 $ 8,722
11/30/98 $ 9,049 $ 8,850
12/31/98 $ 9,100 $ 8,627
REIT Series
Cumulative Total Return
- -----------------------
Lifetime -9.00%
From May 4, 1998 through December 31, 1998
Past performance is not a guarantee of future results. Return and share price
will fluctuate so that shares, when redeemed, may be worth more or less than
their original cost.
The chart above shows a $10,000 investment in both the REIT
Series and the NAREIT Equity REIT Index for the period from the Series'
inception on May 4, 1998 through December 31, 1998. All dividends and capital
gains were reinvested. The Index is unmanaged, with no set investment objective
and does not include the "real world" costs of managing a mutual fund. Earnings
from a variable annuity investment compound tax-free until withdrawal, so no
adjustments were made for income taxes. The effect of an expense limitation is
included in the chart. Performance does not reflect insurance fees related to a
variable annuity product investment nor the deferred sales charge that would
apply to certain withdrawals of investments held for less than eight years.
Performance shown here would have been reduced if such fees were included and
the expense limitation was removed. For more information about fees, consult
your variable annuity prospectus.
REIT-2
<PAGE>
Delaware Group Premium Fund, Inc.-REIT Series
Statement of Net Assets
December 31, 1998
Number Market
of Shares Value
COMMON STOCK-93.23%
Health Care REITs-2.09%
Healthcare Realty Trust .................................5,200 $116,025
--------
116,025
--------
Hotels/Diversified REITs-8.32%
*Catellus Development ....................................10,900 156,006
Newhall Land & Farming ..................................5,810 151,060
Starwood Hotels & Resorts Trust .........................6,870 155,863
--------
462,929
--------
Mall REITs-5.86%
General Growth Properties ...............................4,050 153,394
Simon Property Group ....................................6,050 172,425
--------
325,819
--------
Manufactured Housing REITs-5.37%
Chateau Communities .....................................4,660 136,596
Sun Communities .........................................4,660 162,226
--------
298,822
--------
Multifamily REITs-16.42%
Apartment Investment &
Management ..............................................4,710 175,153
AvalonBay Communities ...................................4,673 160,054
Camden Property Trust ...................................5,380 139,880
Equity Residential Properties ...........................3,250 131,422
Essex Property Trust ....................................6,060 180,285
Grove Property Trust ...................................10,750 126,313
--------
913,107
--------
Office/Industrial REITs-37.95%
Alexandria Real Estate Equities .........................4,370 135,197
AMB Property ............................................6,290 138,380
- -------------------
Top 10 stock holdings, representing 32.4% of net assets, are printed in bold.
Number Market
of Shares Value
COMMON STOCK (Continued)
Office/Industrial REITs (Continued)
Boston Properties ........................................3,500 $106,750
Cabot Industrial Trust ...................................8,400 171,675
CarrAmerica Realty .......................................7,680 184,320
Duke Realty Investments ..................................7,300 169,725
Equity Office Properties Trust ...........................7,290 174,960
First Industrial Realty ..................................5,270 141,302
Liberty Property Trust ...................................4,760 117,215
Prentiss Properties Trust ................................6,280 140,122
Reckson Associates Realty ................................8,390 186,153
SL Green Realty ..........................................7,090 153,321
Spieker Properties .......................................4,515 156,332
Trizec Hahn ..............................................6,600 135,300
---------
2,110,752
---------
Retail Strip Center REITs-14.35%
Developers Diversified Realty ............................8,680 154,070
First Washington .........................................5,400 127,913
JDN Realty ...............................................8,270 178,322
Kimco Realty .............................................5,200 206,375
Pan Pacific Retail Properties ............................6,590 131,388
---------
798,068
---------
Self Storage REITs-2.87%
Public Storage ...........................................5,900 159,669
---------
159,669
---------
Total Common Stock
(cost $5,288,590 )........................................ 5,185,191
---------
REIT-3
<PAGE>
REIT Series
Statement of Net Assets (Continued)
Principal Market
Amount Value
REPURCHASE AGREEMENTS-6.94%
With Chase Manhattan 4.50%
1/4/99 (dated 12/31/98,
collateralized by $99,000
U.S. Treasury Notes 7.875%
due 8/15/01, market value
$110,353) ............................................$108,000 $108,000
With J.P. Morgan Securities
4.75% 1/4/99 (dated 12/31/98,
collateralized by $138,000
U.S. Treasury Notes 5.75%
due 10/31/00, market value
$141,869) .............................................139,000 139,000
Principal Market
Amount Value
REPURCHASE AGREEMENTS (Continued)
With PaineWebber 4.85%
1/4/99 (dated 12/31/98,
collateralized by $30,000
U.S. Treasury Notes 7.75%
due 12/31/99, market value
$31,155 and $42,000 U.S.
Treasury Notes 7.75% due 1/31/00,
market value $45,014 and
$42,000 U.S. Treasury Notes
6.25% due 8/31/00, market value
$44,435 and $20,000 U.S.
Treasury Notes 6.50% due
5/31/01, market value $21,195) .......................$139,000 $139,000
--------
Total Repurchase Agreements
(cost $386,000) .............................................. $386,000
--------
TOTAL MARKET VALUE OF SECURITIES-100.17% (cost $5,674,590) $5,571,191
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(0.17%) .................(9,399)
----------
NET ASSETS APPLICABLE TO 611,400 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $9.10 PER SHARE-100.00% ..............................$5,561,792
==========
COMPONENTS OF NET ASSETS AT DECEMBER 31, 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 ................$5,708,620
Undistributed net investment income ...................................132,582
Accumulated net realized loss on investments .........................(176,011)
Net unrealized depreciation of investments ...........................(103,399)
----------
Total net assets $5,561,792
==========
- ----------
*Non-income producing security for the period ended December 31, 1998.
REIT - Real Estate Investment Trust
See accompanying notes
REIT-4
<PAGE>
Delaware Group Premium Fund, Inc.-REIT Series
Statement of Operations
5/4/98* to
12/31/98
----------
INVESTMENT INCOME:
Dividends .......................................................... $137,776
Interest ........................................................... 12,034
--------
149,810
--------
EXPENSES:
Management fees .................................................... 15,449
Reports and statements to shareholders ............................. 2,249
Accounting and administration ...................................... 827
Custodian fees ..................................................... 768
Registration fees .................................................. 550
Professional fees .................................................. 344
Taxes (other than taxes on income) ................................. 125
Dividend disbursing and transfer agent fees and expenses ........... 58
Directors' fees 50
Other 362
--------
................................................................... 20,782
--------
Less expenses absorbed or waived by
Delaware Management Company ..................................... (3,554)
--------
Total expenses ..................................................... 17,228
--------
NET INVESTMENT INCOME .............................................. 132,582
--------
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS:
Net realized loss on investments ................................... (176,011)
Net change in unrealized appreciation /
depreciation of investments ..................................... (103,399)
--------
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS ............................................. (279,410)
--------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS ....................................... ($146,828)
=========
- ----------
*Date of commencement of operations.
See accompanying notes
Delaware Group Premium Fund, Inc.-REIT Series
Statement of Changes in Net Assets
5/4/98* to
12/31/98
----------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income .............................................. $132,582
Net realized loss on investments ................................... (176,011)
Net change in unrealized appreciation /
depreciation of investments ..................................... (103,399)
--------
Net decrease in net assets resulting from
operations ...................................................... (146,828)
---------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold .......................................... 5,925,102
Cost of shares repurchased ......................................... (216,482)
---------
Increase in net assets derived from capital
share transactions .............................................. 5,708,620
---------
NET INCREASE IN NET ASSETS ......................................... 5,561,792
---------
NET ASSETS:
Beginning of period ................................................ -
----------
End of period ...................................................... $5,561,792
==========
- ----------
*Date of commencement of operations.
See accompanying notes
REIT-5
<PAGE>
Delaware Group Premium Fund, Inc.-REIT Series
Financial Highlights
Selected data for each share of the Series outstanding throughout the period was
as follows:
5/4/98(1)
to
12/31/98
--------
Net asset value, beginning of period ............................... $10.000
Income (loss) from investment operations:
Net investment income .............................................. 0.217
Net realized and unrealized loss on investments .................... (1.117)
---------
Total from investment operations ................................... (0.900)
---------
Net asset value, end of period ..................................... $ 9.100
=========
Total return ....................................................... (9.00%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................ $ 5,562
Ratio of expenses to average net assets ............................ 0.85%
Ratio of expenses to average net assets
prior to expense limitation ..................................... 1.02%
Ratio of net investment income to average net assets 6.42%
Ratio of net investment income to average net
assets prior to expense limitation .............................. 6.25%
Portfolio turnover ................................................. 39%
- ---------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
See accompanying notes
REIT-6
<PAGE>
Delaware Group Premium Fund, Inc.-REIT Series
Notes to Financial Statements
December 31, 1998
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. These financial statements and the related notes pertain to the REIT
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. 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 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.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Other--Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis.
The REIT Series will make payments from net investment income and net realized
gain on investments, if any, following the close of the fiscal year.
Certain expenses of the Fund are paid through "soft dollar" arrangements with
brokers. The amount of these expenses is less than 0.01% of the Series' average
daily net assets.
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 daily at the rate of 0.75% on the first $500
million, 0.70% on the next $500 million, 0.65% on the next $1,500 million, and
0.60% on the net assets over $2,500 million. Lincoln Investment Management,
Inc., an affiliate of DMC, receives 30% of the advisory fee paid to DMC for
acting as a sub-adviser to 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 April 30,
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.
REIT-7
<PAGE>
REIT Series
Notes to Financial Statements (Continued)
On December 31, 1998, the Series had liabilities payable to affiliates as
follows:
Dividend disbursing
Investment transfer agent,
management accounting fees
fee payable to and other expenses
DMC payable to DSC
-------------- ------------------
$3,060 $190
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 December 31, 1998, the Series made purchases and sales
of investment securities other than U.S. government securities and temporary
cash investments as follows:
Purchases ....................................... $6,295,802
Sales ........................................... $832,170
At December 31, 1998, the aggregate cost of securities and unrealized
appreciation (depreciation) for federal income tax purposes for the Series were
as follows:
Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation depreciation
----------- ------------ ------------ --------------
$5,684,053 $85,908 ($198,770) ($112,862)
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 December 31, 1998* ..... 636,299 - (24,899) 611,400
</TABLE>
- ---------------
*Commenced operations on 5/4/98.
REIT-8
<PAGE>
Delaware Group Premium Fund, Inc.-REIT Series
Report of Independent Auditors
To the Shareholders and Board of Directors
Delaware Group Premium Fund, Inc.-REIT Series
We have audited the accompanying statement of net assets of Delaware Group
Premium Fund, Inc.-REIT Series (the "Fund") as of December 31, 1998, and the
related statement of operations, statement of changes in net assets and
financial highlights for the period May 4, 1998 (commencement of operations)
through December 31, 1998. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements and
financial highlights. Our procedures included confirmation of securities owned
as of December 31, 1998, by correspondence with the Fund's custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Group Premium Fund, Inc.-REIT Series at December 31, 1998, and the
results of its operations, changes in its net assets and its financial
highlights for the period May 4, 1998 (commencement of operations) through
December 31, 1998, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
-----------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
February 5, 1999
REIT-9
