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.-Emerging Markets Series
Statement of Net Assets
June 30, 1999 (Unaudited)

Number Market
of Shares Value
(U.S.$)
COMMON STOCK-82.60%
Argentina-1.97%
Central Puerto Class B ..................... 41,000 $ 93,493
Transportadora de Gas del sur Class B ...... 44,500 82,781
----------
176,274
----------
Brazil-19.06%
Aracruz Celulose ........................... 8,100 178,200
Brasmotor .................................. 1,073,000 81,741
Centrais Electricas de Santa
Catarina GDR ............................ 600 22,674
Centrais Eletricas de Santa Catarina ....... 198,000 75,418
Companhia Energetica de Minas
Gerais ADR .............................. 2,700,000 56,794
Companhia Energetica de Minas
Gerais ADR .............................. 3,937 82,162
Companhia Paranaense de Energia ............ 22,092 185,021
Elevadores Atlas ........................... 7,500 107,447
Gerdau Metalurgica ......................... 8,000,000 241,046
Petroleo Brasileiro-Petrobras .............. 1,100,000 170,722
Renner Participacoes ....................... 870,000 940
Rossi Residential .......................... 4,500 5,330
Telecomunicacoes de Minas Gerais ........... 4,820,000 120,294
Telecomunicacoes do Parana ................. 900,000 160,659
Uniao de Bancos Brasileiros ................ 8,000,000 136,441
Usinas Siderurgicas de Minas Gerais ........ 20,500 69,926
Usinas Siderurgicas de Minas
Gerais ADR .............................. 3,734 12,637
----------
1,707,452
----------
Chile-3.27%
Administradora de Fondos de Pensiones
Provida ................................. 9,000 198,000
Empresa Nacional Electricidad S.A. ADR ..... 7,800 94,575
----------
292,575
----------
Croatia-1.08%
Zagrebacka Banka GDR ....................... 9,540 97,070
----------
97,070
----------
Egypt-0.93%
Paints & Chemical Industries GDR ........... 12,825 83,042
----------
83,042
----------
Estonia-1.36%
Eesti Uhispank ............................. 15,554 79,714
Eesti Telekom GDR .......................... 2,112 41,923
----------
121,637
----------
Hong Kong-7.40%
First Tractor .............................. 317,000 93,972
Guangdong Kelon Electric Holding ........... 168,000 195,961
Guangshen Railway .......................... 774,000 118,713
Hengan International Group ................. 210,000 106,236
Shenzhen Expressway ........................ 701,300 148,238
----------
663,120
----------
Hungary-1.95%
Gedeon Richter GDR ......................... 4,000 175,000
----------
175,000
----------
India-4.13%
India Fund, (The) .......................... 15,700 156,019
Larsen & Toubro GDR ........................ 7,750 119,350
Mahanagar Telephone GDR .................... 9,300 94,395
----------
369,764
----------

<PAGE>

Number Market
of Shares Value
(U.S.$)
COMMON STOCK (Continued)
Indonesia-0.08%
PT United Tractors ......................... 15,500 $ 6,863
----------
6,863
----------
Israel-3.57%
Bank Hapoalim .............................. 73,200 187,980
ECI Telecommunications ..................... 4,000 132,125
----------
320,105
----------
Malaysia-5.87%
Leader Universal Holdings .................. 139,000 58,161
Petronas Dagangan .......................... 136,000 148,884
Public Finance ............................. 17,000 17,895
Resorts World .............................. 72,000 169,579
Sime Darby ................................. 100,000 131,053
----------
525,572
----------
Mexico-5.45%
Alfa de C.V. Class A ....................... 34,800 145,201
Cemex de C.V. Class B ...................... 42,000 209,038
Grupo Minsa ADR ............................ 2,400 6,900
Grupo Minsa C Shares ....................... 103,096 31,864
Vitro ADR .................................. 18,600 95,325
----------
488,328
----------
Peru-1.28%
Banco de Credito del Peru .................. 64,101 42,330
Telefonica del Peru ADR .................... 4,800 72,600
----------
114,930
----------
Portugal-1.12%
Creditcorp Limited ......................... 9,100 100,100
----------
100,100
----------
Romania-0.41%
Banco Turco Romana GDR ..................... 6,700 36,683
----------
36,683
----------
Russia-1.82%
Gazprom ADR ................................ 1,900 21,375
Gazprom ADR ................................ 5,400 60,750
Lukoil Holding ADR ......................... 1,400 55,426
Mosenergo ADR .............................. 5,700 25,536
----------
163,087
----------
Slovenia-0.24%
Blagovno Trgovinski Center GDR ............. 1,925 12,272
SKB Banka GDR .............................. 800 9,800
----------
22,072
----------
South Africa-9.79%
Amalgamated Banks of South Africa .......... 28,479 161,656
Edgars Consolidated Stores ................. 3,778 29,452
Iscor ...................................... 699,000 219,590
Sanlam Limited ............................. 81,772 97,182
Sappi Limited .............................. 21,500 157,956
Sasol Limited .............................. 29,500 211,091
----------
876,927
----------
South Korea-2.46%
Pohang Iron & Steel ADR .................... 4,780 160,728
Pohang Iron & Steel ........................ 500 59,475
----------
220,203
----------
Taiwan-0.80%
Yageo GDR .................................. 14,760 71,955
----------
71,955
----------

Emerging Markets-1

<PAGE>

Emerging Markets Series
Statement of Net Assets (Continued)

Number Market
of Shares Value
(U.S.$)
COMMON STOCK (Continued)
Thailand-5.06%
Bangkok Bank .............................. 51,600 $ 193,264
Hana Microelectronics ..................... 48,300 145,510
Thai Reinsurance .......................... 60,000 113,991
----------
452,765
----------
Turkey-2.24%
Efes Sinai Yatirim ADR .................... 32,150 29,739
Efes Sinai Yatirim Holding ................ 10,228,660 94,544
Koc Holdings .............................. 1,211,200 76,069
----------
200,352
----------
United Kingdom-1.26%
Anglo American ............................ 2,400 112,495
----------
112,495
----------
Total Common Stock
(cost $8,783,686) ......................... 7,398,371
----------

WARRANTS
Hong Kong-0.00%
*Guangdong Investments 7/99 ................ 4,600 6
----------
Total Warrants (cost $0) .................. 6
----------

Principal Market
Amount Value

REPURCHASE AGREEMENTS-25.85%
With Chase Manhattan 4.65% 7/1/99
(dated 6/30/99, collateralized by
$172,000 U.S. Treasury Notes
5.375% due 2/15/01, market value
$173,339 and $200,000
U.S. Treasury Notes 6.375% due 9/30/01,
market value $206,882 and $401,000
U.S. Treasury Notes 6.125% due 12/31/01,
market value $407,871) ......................... $768,000 $768,000
With J.P. Morgan Securities 4.70% 7/1/99
(dated 6/30/99, collateralized by
$138,000 U.S. Treasury Notes
6.375% due 8/15/02, market value
$138,973 and $201,000 U. S. Treasury Notes
6.25% due 8/31/02, market value $202,886 and
$221,000 U.S. Treasury Notes 5.75%
due 11/30/02, market value $230,192 and
$200,000 U.S. Treasury Notes 5.50%
due 1/31/03, market value $207,084) ............ 764,000 764,000
With PaineWebber 4.80% 7/1/99
(dated 6/30/99, collateralized by
$189,000 U.S. Treasury Notes
7.125% due 2/29/00, market value
$196,283 and $201,000
U.S. Treasury Notes 5.625% due 11/30/00,
market value $201,745 and $402,000
U.S. Treasury Notes 5.75% due 11/30/02,
market value $401,899) ......................... 783,000 783,000
----------
Total Repurchase Agreements
(cost $2,315,000) .............................. $2,315,000
----------

<PAGE>

<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES-108.45% (cost $11,098,686) ................................ $ 9,713,377
-----------

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(8.45%) .................................... (756,897)
-----------

NET ASSETS APPLICABLE TO 1,248,983 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $7.17 PER SHARE-100.00% ................................................... $ 8,956,480
===========

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 ................................................ $10,737,370
Undistributed net investment income** ...................................................... 24,895
Accumulated net realized loss on investments ............................................... (416,759)
Net unrealized depreciation of investments and foreign currencies .......................... (1,389,026)
-----------
Total net assets ............................................................... $ 8,956,480
===========
</TABLE>
- ----------------
* Non-income producing security for the period ended June 30, 1999.
** 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.

ADR-American Depository Receipt
GDR-Global Depository Receipt

See accompanying notes

Emerging Markets-2

<PAGE>

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

INVESTMENT INCOME:
Dividends .................................................. $ 91,185
Interest ................................................... 27,163
Foreign tax withheld ....................................... (2,995)
-----------
115,353
-----------

Expenses:
Management fees ............................................ 39,460
Accounting and administration .............................. 1,231
Custodian fees ............................................. 4,560
Professional fees .......................................... 645
Reports and statements to shareholders ..................... 1,976
Registration fees .......................................... 800
Taxes (other than taxes on income) ......................... 128
Dividend disbursing and transfer agent
fees and expenses ....................................... 140
Directors' fees ............................................ 269
Other ...................................................... 2,291
-----------
51,500
-----------

Less expenses absorbed or waived ........................... (4,784)
Less expenses paid indirectly .............................. (85)
-----------
Total expenses ............................................. 46,631
-----------

NET INVESTMENT INCOME ...................................... 68,722
-----------

NET REALIZED AND UNREALIZED LOSS
ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized loss on:
Investments transactions ................................ (189,159)
Foreign currencies ...................................... (28,143)
-----------
Net realized loss .......................................... (217,302)
-----------
Net change in unrealized appreciation /
depreciation of investments and foreign currencies ...... 1,796,236
-----------
Net realized and unrealized loss on investments
and foreign currencies .................................. 1,578,934
-----------

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ............................... $ 1,647,656
===========

See accompanying notes

<PAGE>

Delaware Group Premium Fund, Inc.-
Emerging Markets 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 ...................... $ 68,722 $ 134,046
Net realized loss on investments
and foreign currencies .................. (217,302) (246,532)
Net change in unrealized appreciation /
depreciation of investments and
foreign currencies ...................... 1,796,236 (2,161,591)
----------- -----------
Net increase (decrease) in net assets
resulting from operations ............... 1,647,656 (2,274,077)
----------- -----------

DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income ...................... (127,668) (19,005)
Net realized gain (loss) on investments .... -- (139,368)
----------- -----------
(127,668) (158,373)
----------- -----------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold .................. 2,579,815 2,966,309
Net asset value of shares issued upon
reinvestment of distributions from net
investment income and net realized
gain on investments ..................... 127,668 158,373
----------- -----------
2,707,483 3,124,682
Cost of shares repurchased ................. (627,059) (1,111,948)
----------- -----------
Increase in net assets derived from capital
share transactions ...................... 2,080,424 2,012,734
----------- -----------

NET INCREASE IN NET ASSETS ................. 3,600,412 (419,716)
----------- -----------

NET ASSETS:
Beginning of period ........................ 5,356,068 5,775,784
----------- -----------
End of period .............................. $ 8,956,480 $ 5,356,068
=========== ===========

See accompanying notes

Emerging Markets-3

<PAGE>

Delaware Group Premium Fund, Inc.-Emerging Markets Series
Financial Highlights

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

<TABLE>
<CAPTION>
Six Months Year 5/1/97(2)
Ended 6/30/99 Ended to
(Unaudited)(1) 12/31/98 12/31/97
--------------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period .................... $5.810 $8.880 $10.000

Income (loss) from investment operations:
Net investment income(3)................................. 0.066 0.171 0.060
Net realized and unrealized gain (loss)
on investments and foreign currencies ................ 1.427 (2.991) (1.180)
------ ------ ------
Total from investment operations ........................ 1.493 (2.820) (1.120)
------ ------ ------

Less dividends and distributions:
Dividends from net investment income .................... (0.133) (0.030) none
Distributions from net realized gain on investments ..... none (0.220) none
------ ------ ------
Total dividends and distributions ....................... (0.133) (0.250) none
------ ------ ------

Net asset value, end of period .......................... $7.170 $5.810 $8.880
====== ====== ======

Total return ............................................ 26.56% (32.48%) (11.20%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $8,956 $5,356 $5,776
Ratio of expenses to average net assets ................. 1.49% 1.50% 1.50%
Ratio of expenses to average net assets
prior to expense limitation .......................... 1.64% 1.67% 2.45%
Ratio of net investment income to average net assets .... 2.19% 2.34% 0.89%
Ratio of net investment income to average net
assets prior to expense limitation ................... 2.04% 2.17% (0.06%)
Portfolio turnover ...................................... 19% 38% 48%
</TABLE>
- ----------
(1)Ratios have been annualized and total return has not been annualized.
(2)Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(3)Per share information was based on the average shares outstanding method.

See accompanying notes

Emerging Markets-4

<PAGE>

Delaware Group Premium Fund, Inc.-Emerging Markets 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 Emerging Markets 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. 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. It is
not practical to isolate that portion of both realized and unrealized gains and
losses on investments in equity securities in the statement of operations that
result from fluctuations in foreign currency exchange rates. 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.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. Foreign dividends are also recorded on the
ex-dividend date or as soon after the ex-dividend date that the Series became
aware of such dividends, net of all non-rebatable tax withholdings. Withholding
taxes on foreign dividends have been provided for in accordance with the Series'
understanding of the applicable country's tax rules and rates.
<PAGE>

The Emerging Markets 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. These transactions are done subject to best price and execution. The
amount of these expenses was approximately $73 for the period ended June 30,
1999. The Fund may receive earnings credits from its custodian when positive
cash balances are maintained, which are used to offset custody fees. These
credits were $12 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 International Advisers Ltd. ("DIAL"), the Investment Manager of
the Series, an annual fee which is calculated at the following rates: 1.25% on
the first $500 million of average daily net assets of the Series, 1.20% on the
next $500 million, 1.15% on the next $1,500 million and 1.10% 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 1.25% 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 1.50% of average daily net assets of the Series through October
31, 1999.

Emerging Markets-5

<PAGE>

Emerging Markets 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
-------------- ------------------- --------------
$8,324 $280 $722

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 ....................................... $1,713,589
Sales ........................................... $509,021

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
----------- ------------ ------------ ------------
$11,098,686 $526,512 ($1,911,821) ($1,385,309)

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

Year of
expiration
2006
----------
$227,600

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 ................. 402,650 24,552 (100,274) 326,928
Year ended December 31, 1998 ............... 405,355 20,252 (153,929) 271,678
</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.

Emerging Markets-6

<PAGE>

Emerging Markets Series
Notes to Financial Statements (Continued)

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.

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. In addition, a significant proportion of the aggregate market
value of equity securities listed on the major securities exchanges in emerging
markets are held by a smaller number of investors. This may limit the number of
shares available for acquisition or disposition by the Series.

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.

Emerging Markets-7

<PAGE>

Delaware Group Premium Fund, Inc.-Emerging Markets Series
Proxy Results
(Unaudited)

For the six months ended June 30, 1999, Delaware Premium Fund, Inc. - Emerging
Markets 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 ............. 665,577 28,468 --
Walter P. Babich ............ 665,577 28,468 --
John H. Durham .............. 665,577 28,468 --
Anthony D. Knerr ............ 665,577 28,468 --
Ann R. Leven ................ 665,577 28,468 --
Thomas F. Madison ........... 665,577 28,468 --
Charles E. Peck ............. 665,577 28,468 --
Wayne A. Stork .............. 665,577 28,468 --
Jan L. Yeomans .............. 665,577 28,468 --

2. To approve the reclassification of the investment objective from fundamental
to non-fundamental.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------- ------- -------
595,145 47,419 51,480

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
------- ------- -------
618,298 40,741 35,005

3B. To adopt a new fundamental investment restriction concerning borrowing money
and issuing senior securities.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------- ------- -------
619,456 40,393 34,196

3C. To adopt a new fundamental investment restriction concerning underwriting.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------- ------- -------
620,051 38,987 35,005

3D. To adopt a new fundamental investment restriction concerning investments in
real estate.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------- ------- -------
415,856 42,842 35,347

3E. To adopt a new fundamental investment restriction concerning investments in
commodities.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------- ------- -------
615,407 43,631 35,005

3F. To adopt a new fundamental investment restriction concerning lending by the
Fund.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------- ------- -------
620,051 38,987 35,005

3G. To reclassify all current fundamental investment restrictions as
non-fundamental.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------- ------- -------
621,355 37,334 35,355

4. To approve a new investment management agreement with Delaware International
Advisers Ltd.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------- ------- -------
604,321 53,669 36,053

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
------- ------- -------
626,090 37,589 30,365

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
------- ------- -------
617,264 23,870 52,910

Emerging Markets-8

<PAGE>

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

Number Market
of Shares Value
COMMON STOCK-94.92%
Aerospace & Defense-0.66%
Cordant Technologies .................... 15,000 $ 677,812
----------
677,812
----------
Automobiles & Automotive Parts-7.93%
Arvin Industries ........................ 37,500 1,420,312
Borg-Wagner Automotive .................. 41,408 2,277,440
CLARCOR ................................. 52,750 1,012,140
Federal Signal .......................... 68,900 1,459,819
Harsco .................................. 25,300 809,600
Smith (A.O.) ............................ 43,450 1,200,306
----------
8,179,617
----------
Banking, Finance & Insurance-14.71%
*Avis Rent-A-Car ......................... 61,400 1,788,275
Enhance Financial Services Group ........ 66,200 1,307,450
Everest Re Holdings ..................... 32,400 1,057,050
*Farm Family Holdings .................... 29,300 1,001,694
*Financial Federal ....................... 49,950 1,098,900
Horace Mann Educators ................... 71,600 1,946,625
Liberty Financial Companies ............. 28,800 835,200
North Fork Bancorporation ............... 83,650 1,782,790
Peoples Heritage Financial Group ........ 100,800 1,899,450
Radian Group ............................ 18,000 878,625
Westamerica Bancorporation .............. 43,000 1,568,156
----------
15,164,215
----------
Buildings & Materials-4.16%
D.R. Horton ............................. 85,300 1,418,112
*Griffon ................................. 81,800 639,062
*Jacobs Engineering Group ................ 50,800 1,930,400
*Toll Brothers ........................... 14,200 304,413
----------
4,291,987
----------
Cable, Media & Publishing-1.22%
*World Color Press ....................... 45,900 1,262,250
----------
1,262,250
----------
Chemicals-5.46%
Crompton & Knowles ...................... 43,900 858,794
Hanna (M.A.) ............................ 60,100 987,894
OM Group ................................ 31,300 1,079,850
*Scotts .................................. 56,700 2,700,337
----------
5,626,875
----------
Computers & Technology-4.12%
*Etec Systems ............................ 33,200 1,099,750
*Metamor Worldwide ....................... 17,200 412,800
*Metro Information Services .............. 26,800 443,875
*Synopsys ................................ 41,500 2,288,984
----------
4,245,409
----------
Energy-6.97%
*BJ Services ............................. 25,600 753,600
Nicor ................................... 44,300 1,686,169
NUI ..................................... 26,900 669,138
*Ocean Energy ............................ 77,600 746,900
*Oceaneering International ............... 71,100 1,146,487

- ----------
Top 10 stock holdings, representing 22.16% of net assets, are in bold.

<PAGE>
Number Market
of Shares Value
COMMON STOCK (Continued)
Energy (Continued)
*Santa Fe Snyder ........................... 81,400 $ 620,675
Valero Energy ............................. 36,000 771,750
*Weatherford International ................. 21,500 787,437
----------
7,182,156
----------
Food, Beverage & Tobacco-4.81%
Corn Products ............................. 45,400 1,381,862
*Suiza Foods ............................... 33,200 1,390,250
Universal Foods ........................... 103,500 2,186,437
----------
4,958,549
----------
Healthcare & Pharmaceuticals-2.22%
*Trigon Healthcare ......................... 62,900 2,287,988
----------
2,287,988
----------
Industrial Machinery-6.24%
Columbus McKinnon ......................... 37,900 900,125
Hussmann International .................... 59,900 992,094
IDEX ...................................... 37,850 1,244,319
Milacron .................................. 57,700 1,067,450
Regal-Beloit .............................. 42,600 1,006,425
Varian Medical Systems .................... 48,600 1,227,150
----------
6,437,563
----------
Metals & Mining-2.91%
*Bethlehem Steel ........................... 78,900 606,544
LTV ....................................... 93,400 624,613
*Mueller Industries ........................ 33,300 1,130,119
Watts Industries .......................... 33,100 635,106
----------
2,996,382
----------
Paper & Forest Products-2.46%
Caraustar Industries ...................... 32,600 802,775
Chesapeake ................................ 16,900 632,694
Rayonier .................................. 22,200 1,105,837
----------
2,541,306
----------
Real Estate-9.26%
Cabot Industrial Trust .................... 61,100 1,298,375
Chateau Communities ....................... 24,215 724,936
Duke-Weeks Realty ......................... 47,300 1,067,206
Kilroy Realty ............................. 35,900 872,819
MeriStar Hospitality ...................... 46,345 1,039,866
New Plan Excel Realty Trust ............... 45,480 818,640
Pan Pacific Retail Properties ............. 56,700 1,102,106
Prentiss Properties Trust ................. 53,000 1,245,500
Reckson Associates Realty ................. 58,800 1,381,800
----------
9,551,248
----------
Retail-7.70%
*BJ's Wholesale Club ....................... 80,800 2,429,050
Casey's General Stores .................... 78,700 1,178,041
Pier 1 Imports ............................ 129,300 1,454,625
*Zale ...................................... 72,000 2,880,000
----------
7,941,716
----------
Telecommunications-0.70%
*Brightpoint ............................... 119,400 727,594
----------
727,594
----------

Small Cap Value-1

<PAGE>

Small Cap Value Series
Statement of Net Assets (Continued)

Number Market
of Shares Value
COMMON STOCK (Continued)
Textiles, Apparel & Furniture-6.63%
*Furniture Brands International .......... 56,900 $1,586,088
HON Industries .......................... 65,900 1,923,456
Kellwood ................................ 54,000 1,464,750
Springs Industries-Class A .............. 19,300 841,963
Wolverine World Wide .................... 72,600 1,016,400
----------
6,832,657
----------
Transportation & Shipping-4.18%
Alexander & Baldwin ..................... 34,600 767,688
*Mesaba Holdings ......................... 61,500 782,203
*M.S. Carriers ........................... 41,400 1,227,769
USFreightways ........................... 33,200 1,528,238
----------
4,305,898
----------
Utilities-1.50%
California Water Service Group .......... 23,800 621,775
Sierra Pacific Resources ................ 25,300 920,288
----------
1,542,063
----------
Miscellaneous-1.08%
*Modis Professional Services ............. 81,300 1,117,875
----------
1,117,875
----------
Total Common Stock
(cost $88,304,985) ..................... 97,871,160
----------

Principal Market
Amount Value
REPURCHASE AGREEMENTS-5.00%
With Chase Manhattan 4.65% 7/1/99
(dated 6/30/99, collateralized by $894,000
U.S. Treasury Notes 6.375% due 2/15/01,
market value $907,710 and $447,000
U.S. Treasury Notes 6.375% due 9/30/01,
market value $459,454 and $383,000
U.S. Treasury Notes 6.125% due 12/31/01
market value $385,764) ......................... $1,710,000 $1,710,000
With J.P. Morgan Securities 4.70%
7/1/99 (dated 6/30/99, collateralized
by $494,000 U.S. Treasury Notes 6.375%
due 8/15/02, market value $512,290
and $447,000 U.S. Treasury Notes
6.25% due 8/31/02, market value
$460,863 and $309,000 U.S. Treasury
Notes 5.75% due 11/30/02, market value
$309,282 and $447,000 U.S Treasury
Notes 5.50% due 1/31/03,
market value $451,520) ......................... 1,699,000 1,699,000
With PaineWebber 4.80% 7/1/99
(dated 6/30/99, collateralized by
$422,000 U.S. Treasury Notes 7.125%
due 2/29/00, market value $436,826
and $447,000 U.S. Treasury Notes
5.625% due 11/30/00, market value
$448,981 and $894,000 U.S. Treasury
Notes 5.75% due 11/30/02,
market value $894,421) ......................... 1,743,000 1,743,000
----------
Total Repurchase Agreements
(cost $5,152,000) .............................. 5,152,000
----------
<PAGE>

<TABLE>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES-99.92% (cost $93,456,985) .......................... $103,023,160

RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-0.08% ............................... 78,678
------------

NET ASSETS APPLICABLE TO 6,160,046 SHARES ($0.01, PAR VALUE) OUTSTANDING;
EQUIVALENT TO $16.74 PER SHARE-100.00% ........................................... $103,101,838
============

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 ........................................ $ 92,856,763
Undistributed net investment income ................................................. 502,333
Accumulated net realized gain on investments ........................................ 176,567
Net unrealized appreciation of investments .......................................... 9,566,175
------------
Total net assets .................................................................... $103,101,838
============
</TABLE>

- ----------
*Non-income producing security for the period ended June 30, 1999.

See accompanying notes

Small Cap Value-2

<PAGE>

Delaware Group Premium Fund, Inc.-
Small Cap Value Series
Statement of Operations
For the Six Months Ended June 30, 1999
(Unaudited)

INVESTMENT INCOME:
Dividends ............................................... $ 789,441
Interest ................................................ 128,207
-----------
917,648
-----------
EXPENSES:
Management fees ......................................... 366,243
Accounting and administration ........................... 19,056
Professional fees ....................................... 6,050
Reports and statements to shareholders .................. 3,750
Registration fees ....................................... 2,750
Custodian fees .......................................... 2,591
Taxes (other than taxes on income) ...................... 1,980
Dividend disbursing and transfer agent
fees and expenses .................................... 1,400
Directors' fees ......................................... 1,313
Other ................................................... 7,668
-----------
412,801
Less expenses paid indirectly ........................... (1,124)
-----------
Total expenses .......................................... 411,677
-----------

NET INVESTMENT INCOME ................................... 505,971
-----------

NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain on investments ........................ 1,511,718
Net change in unrealized appreciation /
depreciation of investments .......................... 1,301,135
-----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS .................................. 2,812,853
-----------

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ............................ $ 3,318,824
===========

See accompanying notes

<PAGE>

Delaware Group Premium Fund, Inc.-
Small Cap Value 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 .................... $ 505,971 $ 1,245,041
Net realized gain (loss) on investments .. 1,511,718 (827,096)
Net change in unrealized appreciation /
depreciation of investments ........... 1,301,135 (5,586,278)
------------- -------------
Net increase (decrease) in net assets
resulting from operations ............. 3,318,824 (5,168,333)
------------- -------------

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income .................... (1,227,218) (638,385)
Net realized gain on investments ......... (503,474) (2,340,745)
------------- -------------
(1,730,692) (2,979,130)
------------- -------------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ................ 8,489,139 34,478,733
Net asset value of shares issued upon
reinvestment of distributions from net
investment income and net realized
gain on investments ................... 1,730,692 2,979,130
------------- -------------
10,219,831 37,457,863
Cost of shares repurchased ............... (12,695,549) (9,392,119)
------------- -------------
Increase (Decrease) in net assets derived
from capital share transactions ....... (2,475,718) 28,065,744
------------- -------------

NET INCREASE (DECREASE)
IN NET ASSETS ......................... (887,586) 19,918,281
------------- -------------

NET ASSETS:
Beginning of period ...................... 103,989,424 84,071,143
------------- -------------
End of period ............................ $ 103,101,838 $ 103,989,424
============= =============

See accompanying notes

Small Cap Value-3

<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>
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 ...................... $16.450 $17.920 $14.500 $12.470 $10.290 $10.210

Income (loss) from investment operations:
Net investment income ..................................... 0.083 0.196 0.122 0.112 0.192 0.148
Net realized and unrealized gain (loss) on investments .... 0.482 (1.036) 4.338 2.548 2.208 (0.068)
------- ------- ------- ------- ------- -------
Total from investment operations .......................... 0.565 (0.840) 4.460 2.660 2.400 0.080
------- ------- ------- ------- ------- -------

Less dividends and distributions:
Dividends from net investment income ...................... (0.195) (0.135) (0.110) (0.180) (0.150) none
Distributions from net realized gain on investments ....... (0.080) (0.495) (0.930) (0.450) (0.070) none
------- ------- ------- ------- ------- -------
Total dividends and distributions ......................... (0.275) (0.630) (1.040) (0.630) (0.220) none
------- ------- ------- ------- ------- -------

Net asset value, end of period ............................ $16.740 $16.450 $17.920 $14.500 $12.470 $10.290
======= ======= ======= ======= ======= =======

Total return .............................................. 3.69% (4.79%) 32.91% 22.55% 23.85% 0.78%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $103,101 $103,989 $84,071 $23,683 $11,929 $6,291
Ratio of expenses to average net assets ................... 0.85% 0.83% 0.80% 0.80% 0.80% 0.80%
Ratio of expenses to average net assets
prior to expense limitation and expenses paid indirectly 0.85% 0.85% 0.90% 0.99% 0.96% 1.41%
Ratio of net investment income to average net assets ...... 1.04% 1.32% 1.24% 1.28% 2.13% 2.62%
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly ........................................ 1.04% 1.30% 1.14% 1.09% 1.97% 2.01%
Portfolio turnover ........................................ 49% 45% 41% 84% 71% 26%
</TABLE>
- ----------
(1)Ratios have been annualized and total return has not been annualized.

See accompanying notes

Small Cap Value-4

<PAGE>

Delaware Group Premium Fund, Inc.-Small Cap Value 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 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.

<PAGE>

The Small Cap Value Series will make payments from net investment income and net
realized gain on investments, if any, once a year.

Certain expenses of the Fund are paid through "soft dollar" arrangements with
brokers. These transactions are done subject to best price and execution. The
amount of these expenses was approximately $1,124 for the period ended June 30,
1999. In addition, the Fund receives 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: 0.75% on 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.

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.

Small Cap Value-5

<PAGE>

Small Cap Value Series
Notes to Financial Statements (Continued)

On June 30, 1999, 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
-------------- ------------------
$72,985 $3,408

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 ....................................... $22,723,729
Sales ........................................... $25,784,150

Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation appreciation
----------- ------------ ------------ ------------
$93,456,985 $13,255,356 ($3,659,169) $9,566,175

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 decrease
----------- ----------------------------- ----------- --------
<S> <C> <C> <C> <C>
Period ended June 30, 1999 ...................... 543,769 118,948 (822,801) (160,084)
Year ended December 31, 1998 .................... 2,030,407 175,656 (578,317) 1,627,746
</TABLE>

Small Cap Value-6

<PAGE>

Delaware Group Premium Fund, Inc.-Small Cap Value Series
Proxy Results
(Unaudited)

For the six months ended June 30, 1999, Delaware Premium Fund, Inc. - Small Cap
Value 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 .............. 6,181,225 121,968 --
Walter P. Babich ............. 6,179,529 123,665 --
John H. Durham ............... 6,182,255 120,939 --
Anthony D. Knerr ............. 6,177,651 125,543 --
Ann R. Leven ................. 6,182,982 120,212 --
Thomas F. Madison ............ 6,183,345 119,848 --
Charles E. Peck .............. 6,179,468 123,725 --
Wayne A. Stork ............... 6,183,224 119,969 --
Jan L. Yeomans ............... 6,183,345 119,848 --

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

3B. 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
--------- ------- -------
5,752,263 123,526 427,405

3C. To adopt a new fundamental investment restriction concerning underwriting.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
--------- ------- -------
5,753,803 148,969 400,421

<PAGE>

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

Shares Shares Shares
Voted Voted Voted
For Against Abstain
--------- ------- -------
5,716,972 179,717 406,505

3E. To adopt a new fundamental investment restriction concerning investments in
commodities.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
--------- ------- -------
5,711,415 186,303 405,475

3F. To adopt a new fundamental investment restriction concerning lending by the
Fund.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
--------- ------- -------
5,712,705 189,132 401,356

3G. To reclassify all current fundamental investment restrictions as
non-fundamental.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
--------- ------- -------
5,721,522 175,476 406,196

4. To approve a new investment management agreement with Delaware Management
Company.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
--------- ------- -------
5,753,541 132,979 416,674

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
--------- ------- -------
5,750,960 120,330 431,904

Small Cap Value-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.

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.

<PAGE>

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.

Trend-5

<PAGE>

Trend 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
-------------- ------------------- --------------
$125,342 $ 7,414 $16,743

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

Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation appreciation
- ------------ ------------ ------------ --------------
$163,804,381 $67,695,609 ($1,052,898) $66,642,711

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>

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
------------- -------------
$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

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