DELAWARE GROUP PREMIUM FUND, N-30D, 2000-08-29

DELAWARE GROUP PREMIUM FUND
N-30D, 2000-08-29

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<PAGE>

September 11, 2000

Dear Policy Holder:

When we last reported to you on February 10 of this year, the U.S. Federal
Reserve had just made the fourth in a series of six interest rate hikes since
June 1999. The U.S. economy was entering an unprecedented tenth straight year of
expansion, the corporate profit picture was outstanding, and domestic equity
markets were reaching new highs. In fact, record growth in the U.S. seemed
capable of pulling along much of the rest of the global economy. European
technology stocks were enjoying a run of their own, and many troubled economies
in Southeast Asia were showing signs of pulling through recent crises, with
governments agreeing to adopt pro-business policy changes.
While impressed with the fledgling recoveries shaping up in the world's
depressed regions, we suggested that U.S. stocks were performing well in a
market that was much too narrow. Early in 2000, interest in Internet-related
investments clearly reached a crescendo. It seemed that some individual
investors were disregarding current earnings in their strict focus on runaway
growth stocks. In addition, we predicted that worldwide demand for bonds and
other fixed-income would continue to be weak as long as economic growth and the
strong stock market continued.
On March 10, U.S. stock markets began a 10-week sell-off that included a
number of days with sharp declines on the major indexes. The technology-heavy
Nasdaq Composite, which had perched above 5000, retreated 37% before reaching a
trough in May. And the S&P 500 Index had retreated 11% at its low point in May.
In our opinion, the downturn was healthy in many ways. Investors seeking
refuge bought into U.S. Treasury issues and occasionally sought out the
corporate bond market, which had been sorely lacking demand. More importantly,
it appeared that a renewed focus on earnings was causing investors to look at a
broader array of companies.
Although the spring pullback cast some doubt on many of the recoveries
abroad, we believe the fundamentals of those recoveries are sound. We are
hopeful that China's impending entry into the World Trade Organization will
boost economic strength in the Pacific Rim, including Japan, still currently
mired in recession.
In global bond markets, we see a brighter picture than we have in some time,
with liquidity occasionally reappearing and select foreign currencies showing
value when held against the strong dollar.
The Fed's ongoing campaign of ratcheting up rates at home, meanwhile, is
directly aimed at slowing growth and choking off inflation. Recent economic data
has been mixed, suggesting that the desired "soft landing" may be coming.
The stock market's path over the last six months was rocky, but we do not
believe the ups and downs were without reason. New types of investors and
heavier trading in the markets seem to indicate that increased volatility is a
sign of the times. We believe that the New Economy is here to stay - that it is
changing capital markets and positively affecting the very nature of the world's
economies.
As always, we encourage investors to take a long-term approach, follow a
regular investment plan, and diversify assets. History shows that stocks, as a
class, outpace other types of investments and inflation - but only over long
periods. A well-diversified portfolio should include some stocks, bonds, and
cash - asset classes which are all available through the investment options in
your variable annuity.
As of this writing, we believe that the stage is set for a bright second half
of 2000. The Fed passed on a seventh rate hike in June, leaving open the
possibility of one occurring on August 22. We expect volatility to continue
until the Fed clearly steps to the sidelines, but believe the fundamentals
currently in place for long-term, global investing are as strong as they have
been in some time.

Total Return
12/31/99-6/30/00
Standard & Poor's 500 Index -0.42%
Russell 2000 Index +3.03%
Lehman Brothers Government/Corporate Bond Index +4.16%
Morgan Stanley Europe, Australasia, Far East Index -3.95%

Performance noted above assumes reinvestment of dividends. It is not intended to
represent the performance of any Premium Fund Series. The Standard & Poor's 500
Index is a weighted, unmanaged index that generally tracks the performance of
large company stocks. The Lehman Brothers Government/Corporate Bond Index is an
unmanaged index that generally tracks the performance of government and
corporate bonds. The Morgan Stanley Europe, Australasia, Far East Index is an
unmanaged index that generally tracks the performance of non-U.S. stocks. The
indexes assume no management fees or expenses. You cannot invest directly in an
index. Past performance does not guarantee future results.

Sincerely,

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

1
<PAGE>

Delaware Group Premium Fund-Balanced Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Number of Market
Shares Value
COMMON STOCK-53.83%
Banking, Finance & Insurance-7.31%
Bank of New York ................................ 36,200 $ 1,683,300
Capital One Financial ........................... 45,700 2,039,363
Chase Manhattan ................................. 40,500 1,865,531
Citigroup ....................................... 42,300 2,548,575
Schwab (Charles) ................................ 60,900 2,047,763
-----------
10,184,532
-----------
Cable, Media & Publishing-0.28%
*Barnes & Noble .................................. 17,400 387,150
-----------
387,150
-----------
Chemicals-1.06%
Pharmacia ....................................... 28,441 1,470,044
-----------
1,470,044
-----------
Computers & Technology-9.90%
*+BEA Systems ..................................... 29,800 1,473,238
*Cadence Design Systems .......................... 181,100 3,689,913
Compaq Computer ................................. 54,100 1,382,931
International Business Machines ................. 15,700 1,720,131
*J.D. Edwards .................................... 38,100 573,881
Micron Technology ............................... 31,600 2,782,775
*Microsoft ....................................... 27,100 2,168,000
-----------
13,790,869
-----------
Electronics & Electrical Equipment-3.86%
*Integrated Device Technology .................... 18,100 1,083,738
Intel ........................................... 22,100 2,954,494
Texas Instruments ............................... 19,500 1,339,406
-----------
5,377,638
-----------
Energy-5.50%
+Anadarko Petroleum .............................. 30,500 1,504,031
Halliburton ..................................... 24,600 1,160,813
*Nabors Industries ............................... 28,700 1,192,844
Schlumberger Limited ............................ 39,700 2,962,613
Unocal .......................................... 25,500 844,688
-----------
7,664,989
-----------
Healthcare & Pharmaceuticals-5.58%
American Home Products .......................... 49,500 2,908,125
*+Amgen ........................................... 37,000 2,599,250
*Genentech ....................................... 13,200 2,270,400
-----------
7,777,775
-----------
Retail-5.57%
*Best Buy ........................................ 35,900 2,270,675
Circuit City Stores ............................. 36,100 1,198,069
*Safeway ......................................... 95,100 4,291,388
-----------
7,760,132
-----------
Telecommunications-11.75%
ALLTEL .......................................... 24,800 1,536,050
*+Nextel Communications ........................... 32,400 1,982,475
Nortel Networks ................................. 56,600 3,862,950
SBC Communications .............................. 68,400 2,958,300
*+Sprint .......................................... 22,300 1,326,850
*Tellabs ......................................... 44,000 3,011,250
*+Winstar Communications .......................... 50,000 1,693,750
-----------
16,371,625
-----------

<PAGE>

Number of Market
Shares Value
COMMON STOCK (Continued)
Transportation & Shipping-3.02%
*FedEx ............................................ 16,800 $ 638,400
Kansas City Southern Industries .................. 40,200 3,565,238
-----------
4,203,638
-----------
Total Common Stock
(cost $67,034,844) .............................. 74,988,392
-----------

Principal
Amount
ASSET-BACKED SECURITIES-2.89%
California Infrastructure PG&E
Series 97-1 A4 6.16% 6/25/03 .................... $ 534,525 531,146
Discover Card Master Trust
Series 99-2 A 5.90% 10/15/04 .................... 810,000 792,828
Ford Credit Auto Owner Trust
Series 00-A A4 7.09% 11/17/03 ................... 740,000 740,044
Series 97-1A 6.75% 8/15/13 ...................... 531,577 522,008
+Peco Energy Transition Trust
Series 99A A4 5.80% 3/1/07 ...................... 785,000 746,260
Philadelphia, Pennsylvania Industrial
Development Authority Revenue
Series 97 6.488% 6/15/04 ........................ 353,692 329,596
Standard Credit Card Master Trust
Series 94-4 A 8.25% 11/07/03 .................... 355,000 358,990
-----------
Total Asset-Backed Securities
(cost $4,123,983) ............................... 4,020,872
-----------

COLLATERALIZED MORTGAGE OBLIGATIONS-1.32%
Federal National Mortgage Association
Whole Loan 6.50% 7/25/28 ........................ 536,842 524,930
Government National Mortgage Association
Series 98-9 B 6.85% 12/20/25 .................... 810,000 781,383
Residential Accredit Loans
Series 98-QS9 A3 6.75% 7/25/28 .................. 550,000 541,320
-----------
Total Collateralized Mortgage
Obligations (cost $1,902,108) ................... 1,847,633
-----------

COMMERCIAL MORTGAGE-BACKED SECURITIES-1.30%
Chase Commercial Mortgage Securities
Series 96-2 C 6.90% 11/19/06 .................... 250,000 239,102
DLJ Commercial Mortgage
Series 99-CG1 A1B 6.46% 1/10/09 ................. 930,000 867,806
Lehman Large Loan Series 97-LLI A1
6.79% 6/12/04 ................................... 416,583 411,508
Nomura Asset Securities
Series 93-1 A1 6.68% 12/15/01 ................... 295,419 289,234
-----------
Total Commercial Mortgage-Backed
Securities (cost $1,857,876) ..................... 1,807,650
-----------

Balanced-1
<PAGE>

Balanced Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
CORPORATE BONDS-7.13%
ABN-AMRO Bank NV 8.25% 8/1/09 .................... $ 80,000 $ 80,253
Banco Santander 6.50% 11/01/05 ................... 360,000 344,440
Consumer Energy 6.375% 2/1/08 .................... 380,000 342,398
Cox Communications 6.15% 8/1/03 .................. 455,000 432,252
Daimler Chrysler 6.90% 9/1/04 .................... 1,080,000 1,057,050
Deutsche Tel 8.00% 6/15/10 ....................... 1,000,000 1,010,142
+E.I duPont deNemours
6.75% 10/15/04 ................................. 500,000 494,192
+Finova Capital 7.25% 11/8/04 ..................... 950,000 837,569
Ford Motor Credit 6.70% 7/16/04 .................. 655,000 652,046
MCI Communications 6.125% 4/15/02 ................ 350,000 341,927
+MCI Worldcom 7.55% 4/1/04 ........................ 1,050,000 1,049,407
Osprey Trust 8.31% 1/15/03 ....................... 825,000 828,135
Safeway 7.00% 9/15/02 ............................ 450,000 446,579
Stagecoach Holdings 8.625% 11/15/09 .............. 610,000 517,864
Sun Microsystems 7.65% 8/15/09 ................... 510,000 510,575
United Health Care 6.60% 12/1/03 ................. 665,000 635,028
USA Waste Services 6.125% 7/15/01 ................ 360,000 348,687
-----------
Total Corporate Bonds
(cost $10,327,583) .............................. 9,928,544
-----------

MORTGAGE-BACKED SECURITIES-12.33%
Federal Home Loan Mortgage Corporation
6.00% 3/1/11 .................................... 147,107 140,993
7.00% 4/1/29 .................................... 1,158,514 1,119,052
Federal National Mortgage Association
6.00% 4/1/13 .................................... 580,072 554,513
6.00% 5/1/13 .................................... 307,281 293,741
7.00% 8/1/28 .................................... 392,381 378,402
7.00% 12/1/28 ................................... 649,286 626,155
7.00% 8/1/29 .................................... 1,084,252 1,047,997
7.00% 2/1/30 .................................... 1,984,059 1,917,097
7.50% 6/1/28 .................................... 287,327 283,107
7.50% 10/1/29 ................................... 8,427,489 8,315,683
8.00% 3/1/30 .................................... 1,072,331 1,077,358
9.50% 6/1/19 .................................... 81,328 83,540
Government National Mortgage
Association 8.00% 04/15/30 ...................... 1,328,197 1,343,554
-----------
Total Mortgage-Backed Securities
(cost $17,498,184) .............................. 17,181,192
-----------

<PAGE>

Principal Market
Amount Value
U.S. GOVERNMENT AGENCY OBLIGATIONS-6.19%
Federal National Mortgage Association
5.75% 4/15/03 .................................. $ 620,000 $ 601,154
6.50% 8/15/04 .................................. 4,550,000 4,465,720
+7.125% 2/15/05 ................................. 1,300,000 1,305,769
+7.125% 1/15/30 ................................. 500,000 502,779
+7.25% 1/15/10 .................................. 1,000,000 1,009,883
7.375% 5/15/03 ................................. 725,000 732,362
----------
Total U.S. Government Agency
Obligations (cost $8,611,484) ................... 8,617,667
----------

U.S. TREASURY OBLIGATIONS-6.09%
+U.S. Treasury Bond 6.25% 5/15/30 ................ 1,735,000 1,821,750
+U.S. Treasury Note 6.50% 2/15/10 ................ 4,860,000 5,020,876
#+U.S. Treasury Strip 6.478% 2/15/27 .............. 8,000,000 1,637,104
----------
Total U.S. Treasury Obligations
(cost $8,088,693) .............................. 8,479,730
----------

Certificate of Deposit-0.24%
Bank of New York ................................ 330,000 329,932
----------
Total Certificate of Deposit
(cost $329,972) ................................ 329,932
----------

Balanced-2

<PAGE>

Balanced Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
Repurchase Agreements-5.69%
With J.P. Morgan Securities 6.40% 7/3/00
(dated 6/30/00, collateralized by
$1,602,000 U.S. Treasury Notes 5.875%
due 11/15/04, market value $1,591,027
and $1,032,000 U.S. Treasury Notes
7.875% due 11/15/04, market
value $1,103,922) .............................. $2,639,000 $2,639,000
With PaineWebber 6.50% 7/3/00 (dated
6/30/00, collateralized by $641,000
U.S. Treasury Notes 5.25% due 5/31/01,
market value $637,035 and $721,000
U.S. Treasury Notes 6.125% due
12/31/01, market value $717,666 and
$506,000 U.S. Treasury Notes 6.25%
due 10/31/01, market value $509,760
and $801,000 U.S. Treasury Notes
7.25% due 5/15/04, market
value $833,776) ................................ 2,644,000 2,644,000

<PAGE>

Principal Market
Amount Value
Repurchase Agreements (Continued)
With Prudential Securities 6.50% 7/3/00
(dated 6/30/00, collateralized by
$721,000 U.S. Treasury Notes 4.50%
due 9/30/00, market value $726,539 and
$205,000 U.S. Treasury Notes 4.625%
due 11/30/00, market value $204,888
and $801,000 U.S. Treasury Notes
11.875% due 11/15/03, market value
$944,843 and $721,000 U.S. Treasury
Notes 15.75% due 11/15/01, market
value $821,638) ................................ $2,643,000 $2,643,000
----------
Total Repurchase Agreements
(cost $7,926,000) .............................. 7,926,000
----------

TOTAL MARKET VALUE OF SECURITIES-97.01% (COST $127,700,727) ..... $135,127,612

RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-2.99% ........... 4,163,580
------------
NET ASSETS APPLICABLE TO 8,977,982 SHARES OUTSTANDING-100.00% ... $139,291,192
============
NET ASSET VALUE-BALANCED SERIES STANDARD CLASS
($139,286,042 / 8,977,650 SHARES) .............................. $15.51
======
NET ASSET VALUE-BALANCED SERIES SEVICE CLASS
($5,150 / 332 SHARES) .......................................... $15.51
======
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization-no par) .. $138,515,487
Undistributed net investment income ............................. 1,244,097
Accumulated net realized loss on investments .................... (7,895,277)
Net unrealized appreciation of investments ...................... 7,426,885
------------
Total net assets ................................................ $139,291,192
============
----------------
* Non-income producing security for the period ended June 30, 2000.
+ Security is partially or fully on loan.
# Zero-coupon security as of June 30, 2000. The coupon shown is the effective
yield.

See accompanying notes

Balanced-3

<PAGE>

Delaware Group Premium Fund-
Balanced Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

Investment Income:
Interest .......................................... $ 2,069,025
Dividends ......................................... 378,832
-----------
2,447,857
-----------

Expenses:
Management fees ................................... 476,555
Accounting and administration ..................... 30,105
Custodian fees .................................... 26,882
Taxes (other than taxes on income) ................ 22,234
Registration fees ................................. 11,505
Reports and statements to shareholders ............ 9,407
Dividend disbursing and transfer agent fees
and expenses ................................... 7,332
Trustees' fees .................................... 2,817
Distribution expense-Service Class ................ 1
Other ............................................. 6,755
-----------
593,593
Less expenses paid indirectly ..................... (20,552)
-----------
Total expenses .................................... 573,041
-----------
Net Investment Income ............................. 1,874,816
-----------
Net Realized and Unrealized Gain (Loss)
on Investments:
Net realized loss on investments .................. (8,089,245)
Net change in unrealized appreciation /
depreciation of investments .................... 2,007,558
-----------
Net Realized and Unrealized Loss
on Investments ................................. (6,081,687)
-----------
Net Decrease in Net Assets Resulting
from Operations ................................ ($4,206,871)
===========

See accompanying notes

<PAGE>

Delaware Group Premium Fund -
Balanced Series
Statements of Changes in Net Assets

Six Months Year
Ended 6/30/00 Ended
(Unaudited) 12/31/99
------------- ------------

Increase (Decrease) In Net Assets
From Operations:
Net investment income $ 1,874,816 $ 4,240,181
Net realized gain (loss) on investments (8,089,245) 9,856,207
Net change in unrealized appreciation /
depreciation of investments 2,007,558 (30,081,326)
------------ ------------
Net decrease in net assets resulting
from operations (4,206,871) (15,984,938)
------------ ------------

Distributions To Shareholders From:
Net investment income:
Standard Class (3,324,852) (3,997,585)
Service Class (13) -
Net realized gain on investments:
Standard Class (9,869,975) (8,076,774)
Service Class - -
------------ ------------
(13,194,840) (12,074,359)
------------ ------------
Capital Share Transactions:
Proceeds from shares sold:
Standard Class 1,011,035 22,178,765
Service Class 4,999 -
Net asset value of shares issued upon
reinvestment of distributions from net
investment income and net realized gain
on investments:
Standard Class 13,194,826 12,074,359
Service Class 13 -
------------ ------------
14,210,873 34,253,124
------------ ------------
Cost of shares repurchased:
Standard Class (29,520,272) (36,047,049)
Service Class - -
------------ ------------
(29,520,272) (36,047,049)
------------ ------------
Decrease in net assets derived from capital
share transactions (15,309,399) (1,793,925)
------------ ------------
Net Decrease In Net Assets (32,711,110) (29,853,222)
------------ ------------

Net Assets:
Beginning of period 172,002,302 201,855,524
------------ ------------
End of period $139,291,192 $172,002,302
============ ============

See accompanying notes

Balanced-4

<PAGE>

Delaware Group Premium Fund-Balanced Series
Financial Highlights

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

<TABLE>
<CAPTION>
Balanced Series Standard Class
Six Months
Ended 6/30/00(1) Year Ended December 31,
(Unaudited) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $17.340 $20.040 $19.050 $16.640 $15.500 $12.680

Income (loss) from investment operations:
Net investment income(2) .................................. 0.200 0.408 0.349 0.435 0.530 0.509
Net realized and unrealized gain (loss) on investments .... (0.557) (1.958) 2.831 3.575 1.765 2.761
------- ------- ------ ------ ------ -------
Total from investment operations .......................... (0.357) (1.550) 3.180 4.010 2.295 3.270
------- ------- ------ ------ ------ -------
Less dividends and distributions:
Dividends from net investment income ...................... (0.371) (0.380) (0.420) (0.530) (0.500) (0.450)
Distributions from net realized gain on investments ....... (1.102) (0.770) (1.770) (1.070) (0.655) none
------- ------- ------ ------ ------ -------
Total dividends and distributions ......................... (1.473) (1.150) (2.190) (1.600) (1.155) (0.450)
------- ------- ------ ------ ------ -------
Net asset value, end of period ............................ $15.510 $17.340 $20.040 $19.050 $16.640 $15.500
======= ======= ======= ======= ======= =======

Total return .............................................. (1.97%) (7.85%) 18.62% 26.40% 15.91% 26.58%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $139,286 $172,002 $201,856 $127,675 $75,402 $63,215
Ratio of expenses to average net assets(3) ................ 0.78% 0.74% 0.70% 0.67% 0.68% 0.69%
Ratio of net investment income to average net assets ...... 2.56% 2.17% 2.20% 2.85% 3.56% 3.75%
Portfolio turnover ........................................ 162% 107% 94% 67% 92% 106%
</TABLE>

(1) Ratios have been annualized and total return has not been annualized.
(2) Per share information for the six months ended June 30, 2000 was based on
the average shares outstanding method.
(3) Ratio for the period ended June 30, 2000 including fees paid indirectly in
accordance with Securities and Exchange Commission rules was 0.81%.

See accompanying notes

Balanced-5

<PAGE>

Delaware Group Premium Fund-Balanced Series
Financial Highlights (Continued)

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

<TABLE>
<CAPTION>
Balanced Series Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
-----------
<S> <C>
Net asset value, beginning of period ............................................... $15.080

Income from investment operations:
Net investment income(2) ........................................................... 0.058
Net realized and unrealized gain on investments .................................... 0.412
-------
Total from investment operations ................................................... 0.470
-------

Less dividends and distributions:
Dividends from net investment income ............................................... (0.040)
Distributions from net realized gain on investments ................................ none
-------
Total dividends and distributions .................................................. (0.040)
-------

Net asset value, end of period ..................................................... $15.510
=======
Total return ....................................................................... 3.12%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................................ $5
Ratio of expenses to average net assets(3) ......................................... 0.93%
Ratio of net investment income to average net assets ............................... 2.41%
Portfolio turnover ................................................................. 162%
</TABLE>

-------------------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Per share information was based on the average shares outstanding method.
(3) Ratio including fees paid indirectly in accordance with Securities and
Exchange Commission rules was 0.96%.

See accompanying notes

Balanced-6

<PAGE>

Delaware Group Premium Fund-Balanced Series
Notes to Financial Statements
June 30, 2000
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Balanced
Series (the "Series"). The Series is a diversified open-end investment company
under the Investment Company Act of 1940, as amended. The Series offers two
classes of shares. The Standard Class shares do not carry a 12b-1 fee and the
Service class shares do carry a 12b-1 fee. The shares of the Fund are sold only
to separate accounts of life insurance companies.

The investment objective of the Series is to seek a balance of capital
appreciation, income and preservation of capital. The Series invests primarily
in common stocks of established companies believed to have potential for
long-term capital growth and has at least 25 percent of its assets in various
types of fixed income securities.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. Long-term debt
securities are valued by an independent pricing service and such prices are
believed to reflect the fair value of such securities. Money market instruments
having less than 60 days to maturity are valued at amortized cost, which
approximates market value. Other securities and assets for which market
quotations are not readily available are valued at fair value as determined in
good faith under the direction of the Fund's Board of Trustees.

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 accounting
principles generally accepted in the United States.

Class Accounting--Investment income, common expenses and realized and unrealized
gain (loss) on investments are allocated to the various classes of the Series on
the basis of daily net assets of each class. Distribution expenses relating to a
specific class are charged directly to that class.

Repurchase Agreements--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 102% collateralized. However, in the
event of default or bankruptcy by the counterparty to the agreement, realization
of the collateral may be subject to legal proceedings.

<PAGE>

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

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

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $1,696 for the period ended June 30, 2000. The
Series receives earnings credits from its custodian when positive cash balances
are maintained, which are used to offset custody fees. These credits were
$18,856 for the period ended June 30, 2000. The expenses paid under the above
arrangements are included in their respective expense captions on the Statement
of Operations with the corresponding offset shown as "expenses paid indirectly".

DMC has elected to waive its fee and reimburse the Series to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and distribution
expenses, do not exceed 0.80% of average daily net assets of the Series through
April 30, 2001. No reimbursement was due for the period ended June 30, 2000.

Balanced-7
<PAGE>

Balanced 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, accounting and
administrative services. The Series pays DSC a monthly fee based on average net
assets and subject to certain minimums.

Pursuant to the Distribution Agreement, the Series pays Delaware Distributors,
L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee up to 0.30%
of the average daily net assets of the Service Class. The Board of Trustees has
initially set the fee at an annual rate of 0.15% of the Service Class average
daily net assets.

On June 30, 2000, 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
-------------- -------------------
$64,443 $5,720

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases ...................................... $90,321,378
Sales .......................................... $129,798,838

The cost of investments for federal income tax purposes approximates cost for
book purposes. At June 30, 2000 the aggregate cost of securities and unrealized
appreciation (depreciation) for the Series were as follows:
<TABLE>
<CAPTION>
Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation appreciation
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
$127,700,727 $11,928,963 ($4,502,078) $7,426,885
</TABLE>

4. Capital Shares
Transactions in capital shares were as follows:

<TABLE>
<CAPTION>
Period Year
ended ended
6/30/00 12/31/99
------- --------
<S> <C> <C>
Shares sold:
Standard Class ....................................................................... 63,948 1,185,181
Service Class ........................................................................ 331 -

Shares issued upon reinvestment of distributions from net investment income and
net realized gain on investments:
Standard Class ....................................................................... 857,288 677,710
Service Class ........................................................................ 1 -
---------- ----------
921,568 1,862,891
Shares repurchased:
Standard Class ....................................................................... (1,860,919) (2,020,042)
Service Class ........................................................................ - -
---------- ----------
(1,860,919) (2,020,042)
---------- ----------
Net decrease ............................................................................ (939,351) (157,151)
========== ==========
</TABLE>

Balanced-8
<PAGE>

Balanced Series
Notes to Financial Statements (Continued)

5. Line of Credit
The Series, along with certain other funds in the Delaware Investments Family of
Funds (the "Participants"), participate in a $683,500,000 revolving line of
credit facility to be used for temporary or emergency purposes as an additional
source of liquidity to fund redemptions of investor shares. The Participants are
charged an annual commitment fee, which is allocated across the Participants on
the basis of each fund's allocation of the entire facility. The Participants may
borrow up to a maximum of one third of their net assets under the agreement. No
amounts were outstanding at June 30, 2000, or at any time during the period.

6. Credit and Market Risk
The Series may invest in securities whose value is derived from an underlying
pool of mortgages or consumer loans. Prepayment of these loans may shorten the
stated maturity of the respective obligation and may result in a loss of
premium, if any has been paid.

7. 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. 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, 2000, were as follows:

Market value
of securities Market value
on loan of collateral
------------ -------------
$23,626,419 $23,871,182

Net income from securities lending activity for the period ended June 30, 2000,
was $46,109 and is included in interest income on the Statement of Operations.

Balanced-9

<PAGE>

Delaware Group Premium Fund-Capital Reserves Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Principal Market
Amount Value
AGENCY OBLIGATIONS-16.58%
Federal Home Loan Mortgage Corporation
7.00% 2/15/03 ..................................... $2,100,000 $2,102,505
Federal National Mortgage Association
6.50% 8/15/04 ..................................... 1,950,000 1,913,880
7.125% 2/15/05 .................................... 860,000 863,817
----------
Total Agency Obligations
(cost $4,880,011) ................................. 4,880,202
----------

ASSET-BACKED SECURITIES-10.17%
California Infrastructure PG&E Series
97-1 A4 6.16% 6/25/03 ............................. 463,533 460,604
Discover Card Master Trust Series
99-2 A 5.90% 10/15/04 ............................. 670,000 655,796
NationsCredit Grantor Trust Series
97-1 A 6.75% 8/15/13 .............................. 336,382 330,327
PECO Energy Transition Trust Series
99-A A4 5.80% 3/1/07 .............................. 650,000 617,923
Philadelphia, Pennsylvania Authority For
Industrial Development Tax Claim
Revenue Class A 6.488% 6/15/04 .................... 344,849 321,357
Standard Credit Card Master Trust Series
94-4 A 8.25% 11/7/03 .............................. 600,000 606,744
----------
Total Asset-Backed Securities
(cost $3,075,377) ................................. 2,992,751
----------

COLLATERALIZED MORTGAGE OBLIGATIONS-5.52%
Federal National Mortgage Association
Whole Loan Series
98-W3 A2 6.50% 7/25/28 ............................ 404,762 395,781
Government National Mortgage Association
Series 98-9 B 6.85% 12/20/25 ...................... 765,000 737,973
Residential Accredit Loans Series
98-QS9 A3 6.75% 7/25/28 ........................... 500,000 492,109
----------
Total Collateralized Mortgage
Obligations (cost $1,677,648) ..................... 1,625,863
----------

COMMERCIAL MORTGAGE-BACKED SECURITIES-5.43%
DLJ Commercial Mortgage Series
99-CG1 A1B 6.46% 1/10/09 .......................... 890,000 830,481
Lehman Large Loan Series 97-LLI A1
6.79% 6/12/04 ..................................... 407,222 402,261
Nomura Asset Securities Series
93-1 A1 6.68% 12/15/01 ............................ 371,881 364,095
----------
Total Commercial Mortgage-Backed
Securities (cost $1,630,277) ...................... 1,596,837
----------

<PAGE>

Principal Market
Amount Value
CORPORATE BONDS-27.28%
American Financial Group
7.125% 4/15/09 .................................... $250,000 $219,844
Banco Santander 6.50% 11/1/05 ........................ 340,000 325,305
Consumers Energy 6.375% 2/1/08 ....................... 335,000 301,851
Cox Communications 6.15% 8/1/03 ...................... 375,000 356,252
Daimler Chrysler 6.90% 9/1/04 ........................ 465,000 455,119
Deutsche Telekom International Financial
8.00% 6/15/10 ..................................... 550,000 555,578
Finova Capital 7.25% 11/8/04 ......................... 845,000 744,996
Ford Motor Credit 7.50% 3/15/05 ...................... 620,000 617,204
Morgan Stanley Dean Witter
7.75% 6/15/05 ..................................... 830,000 835,172
Osprey Trust 8.31% 1/15/03 ........................... 600,000 602,279
Safeway 7.00% 9/15/02 ................................ 570,000 565,667
Sun Microsystems 7.65% 8/15/09 ....................... 375,000 375,423
Tommy Hilfiger USA 6.85% 6/1/08 ...................... 615,000 396,975
United Health Care 6.60% 12/1/03 ..................... 625,000 596,831
USA Waste Services 6.125% 7/15/01 .................... 295,000 285,730
Worldcom 7.55% 4/1/04 ................................ 795,000 794,551
----------
Total Corporate Bonds
(cost $8,544,862) ................................. 8,028,777
----------

MORTGAGE-BACKED SECURITIES-15.34%
Federal Home Loan Mortgage
Corporation-Gold 7.00% 4/1/29 ..................... 345,190 333,432
Federal National Mortgage Association
7.00% 8/1/28 ...................................... 324,141 312,593
7.00% 11/1/28 ..................................... 514,921 496,577
7.00% 8/1/29 ...................................... 399,461 386,104
7.50% 6/1/28 ...................................... 223,952 220,663
7.50% 9/1/29 ...................................... 1,469,807 1,449,597
8.00% 3/1/30 ...................................... 793,231 796,950
Government National Mortgage Association
8.00% 4/15/30 ..................................... 459,376 464,688
12.00% 6/20/14 .................................... 22,928 25,666
12.00% 3/20/15 .................................... 15,658 17,850
12.00% 2/20/16 .................................... 7,967 8,962
----------
Total Mortgage-Backed Securities
(cost $4,621,714) ................................. 4,513,082
----------

Capital Reserves-1
<PAGE>

Capital Reserves Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
U.S. TREASURY OBLIGATIONS-16.97%
U.S. Treasury Notes
5.50% 2/28/03 ..................................... $225,000 $220,219
6.25% 8/31/02 ..................................... 195,000 194,330
6.50% 2/15/10 ..................................... 3,250,000 3,357,582
6.75% 5/15/05 ..................................... 1,195,000 1,223,381
----------
Total U.S. Treasury Obligations
(cost $4,903,556) ................................. 4,995,512
----------

Principal Market
Amount Value
CERTIFICATES OF DEPOSIT-2.33%
Bank of New York 7.22% 5/9/01 ........................ $685,000 $684,860
----------
Total Certificates of Deposit
(cost $684,941) ................................... 684,860
----------
<TABLE>
<CAPTION>

<S> <C>
TOTAL MARKET VALUE OF SECURITIES-99.62% (COST $30,018,386) ................................ $29,317,884

RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-0.38% ..................................... 111,708
-----------

NET ASSETS APPLICABLE TO 3,175,998 SHARES OUTSTANDING-100.00% ............................. $29,429,592
===========
NET ASSET VALUE-CAPITAL RESERVES SERIES STANDARD CLASS ($29,424,512 / 3,175,450 SHARES) ... $9.27
=====
NET ASSET VALUE-CAPITAL RESERVES SERIES SERVICE CLASS ($5,080 / 548 SHARES) ............... $9.27
=====
COMPONENTS ON NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization-no par) ............................ $32,795,468
Accumulated net realized loss on investments .............................................. (2,665,374)
Net unrealized depreciation of investments ................................................ (700,502)
-----------
Total net assets .......................................................................... $29,429,592
===========
</TABLE>

See accompanying notes

Capital Reserves-2
<PAGE>

Delaware Group Premium Fund-
Capital Reserves Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Interest .................................................... $1,102,460
----------
1,102,460
----------
EXPENSES:
Management fees ............................................. 78,712
Reports and statements to shareholders ...................... 8,004
Custodian fees .............................................. 6,861
Accounting and administration ............................... 6,465
Professional fees ........................................... 4,394
Dividend disbursing and transfer agent fees
and expenses ............................................. 1,332
Taxes (other than taxes on income) .......................... 360
Trustees' fees .............................................. 272
Distribution expense-Service Class .......................... 1
Other ....................................................... 3,226
----------
109,627
Less expenses paid indirectly ............................... (1,463)
----------
Total expenses .............................................. 108,164
----------

NET INVESTMENT INCOME ....................................... 994,296
----------

NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized loss on investments ............................ (903,454)
Net change in unrealized appreciation /
depreciation of investments .............................. 547,603
----------

NET REALIZED AND UNREALIZED LOSS
ON INVESTMENTS ........................................... (355,851)
----------

NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .......................................... $638,445
==========

See accompanying notes
<PAGE>

Delaware Group Premium Fund-
Capital Reserves Series
Statements of Changes in Net Assets

Six Months Year
Ended 6/30/00 Ended
(Unaudited) 12/31/99
----------- --------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ................................ $994,296 $2,298,535
Net realized loss on investments ..................... (903,454) (567,640)
Net change in unrealized appreciation /
depreciation of investments ....................... 547,603 (1,610,612)
---------- -----------
Net increase in net assets
resulting from operations ......................... 638,445 120,283
---------- -----------

DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class .................................... (994,243) (2,298,535)
Service Class ..................................... (53) -
---------- -----------
(994,296) (2,298,535)
---------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class .................................... 1,455,092 9,387,985
Service Class ..................................... 5,002 -
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
Standard Class .................................... 1,006,569 2,301,248
Service Class ..................................... 46 -
---------- -----------
2,466,709 11,689,233
---------- -----------
Cost of shares repurchased:
Standard Class .................................... (9,382,351) (14,521,380)
Service Class ..................................... - -
---------- -----------
(9,382,351) (14,521,380)
---------- -----------
Decrease in net assets derived from capital
share transactions ................................ (6,915,642) (2,832,147)
---------- -----------

DECREASE IN NET ASSETS ............................... (7,271,493) (5,010,399)
---------- -----------

NET ASSETS:
Beginning of period .................................. 36,701,085 41,711,484
---------- -----------
End of period ........................................$29,429,592 $36,701,085
========== ===========

See accompanying notes

Capital Reserves-3
<PAGE>

Delaware Group Premium Fund-Capital Reserves Series
Financial Highlights

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

<TABLE>
<CAPTION>
Capital Reserves Series Standard Class
Six Months
Ended
6/30/00(1) Year Ended December 31,
(Unaudited) 1999 1998 1997 1996 1995
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $9.360 $9.880 $9.790 $9.690 $9.930 $9.300

Income (loss) from investment operations:
Net investment income ...................................... 0.291 0.546 0.556 0.613 0.623 0.643
Net realized and unrealized gain (loss) on investments ..... (0.090) (0.520) 0.090 0.100 (0.240) 0.630
------- ------- ------- ------- ------- -------
Total from investment operations ........................... 0.201 0.026 0.646 0.713 0.383 1.273
------- ------- ------- ------- ------- -------

Less dividends:
Dividends from net investment income ....................... (0.291) (0.546) (0.556) (0.613) (0.623) (0.643)
------- ------- ------- ------- ------- -------
Total dividends ............................................ (0.291) (0.546) (0.556) (0.613) (0.623) (0.643)
------- ------- ------- ------- ------- -------

Net asset value, end of period ............................. $9.270 $9.360 $9.880 $9.790 $9.690 $9.930
======= ======= ======= ======= ======= =======

Total return ............................................... 2.20% 0.28% 6.78% 7.60% 4.05% 14.08%

Ratios and supplemental data:
Net assets, end of period (000 omitted) .................... $29,425 $36,701 $41,711 $29,177 $27,768 $27,935
Ratio of expenses to average net assets(2) ................. 0.69% 0.79% 0.79% 0.75% 0.72% 0.71%
Ratio of net investment income to average net assets ....... 6.32% 5.68% 5.62% 6.31% 6.43% 6.64%
Portfolio turnover ......................................... 174% 129% 166% 120% 122% 145%
</TABLE>

-------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Ratio for the period ended June 30, 2000 including fees paid indirectly in
accordance with Securities and Exchange Commission rules was 0.70%.

See accompanying notes

Capital Reserves-4

<PAGE>

Delaware Group Premium Fund-Capital Reserves Series
Financial Highlights (Continued)

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

<TABLE>
<CAPTION>
Capital Reserves Series
Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
-----------
<S> <C>
Net asset value, beginning of period ........................................... $9.210

Income from investment operations:
Net investment income .......................................................... 0.097
Net realized and unrealized gain on investments ................................ 0.060
------
Total from investment operations ............................................... 0.157
------

Less dividends:
Dividends from net investment income ........................................... (0.097)
------
Total dividends ................................................................ (0.097)
------
Net asset value, end of period ................................................. $9.270
======
Total return ................................................................... 1.71%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ........................................ $5
Ratio of expenses to average net assets(2)...................................... 0.84%
Ratio of net investment income to average net assets ........................... 6.17%
Portfolio turnover ............................................................. 174%
</TABLE>

(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Ratio including fees paid indirectly in accordance with Securities and
Exchange Commission rules was 0.85%.

See accompanying notes

Capital Reserves-5

<PAGE>
Delaware Group Premium Fund-Capital Reserves Series
Notes to Financial Statements
June 30, 2000
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Capital
Reserves Series (the "Series"). The Series is a diversified open-end investment
company under the Investment Company Act of 1940, as amended. The Series offers
two classes of shares. The Standard Class shares do not carry a 12b-1 fee and
the Service class shares do carry a 12b-1 fee. The shares of the Fund are sold
only to separate accounts of life insurance companies.

The investment objective of the Series is to seek a high, stable level of
current income while attempting to minimize fluctuations in principal and
provide maximum liquidity. It attempts to achieve its objective by investing in
short- and intermediate-term securities including securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities,
instruments secured by U.S. government securities and debt securities issued by
U.S. corporations.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Money market instruments having less than 60 days to maturity are
valued at amortized cost, which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Fund's Board
of Trustees.

The Series declares dividends daily from net investment income and pays such
dividends monthly. Distributions from net realized gain on investments, if any,
will be distributed following the close of the fiscal year.

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $364 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $1,099 for the period ended June 30, 2000. 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".

Capital Reserves-6
<PAGE>

Capital Reserves Series
Notes to Financial Statements (Continued)

On June 30, 2000, 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
-------------- ------------------- --------------
$12,205 $1,048 $351

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases ................................ $27,104,996
Sales .................................... $33,983,724

<TABLE>
<CAPTION>
Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation depreciation
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
$30,018,386 $126,051 ($826,553) ($700,502)
</TABLE>

For federal income tax purposes, the Series had accumulated capital losses at
June 30, 2000 as follows:
<TABLE>
<CAPTION>
Year of Expiration
2002 2004 2007 Total
---- ---- ---- -----
<S> <C> <C> <C> <C>
$884,453 $292,208 $543,334 $1,719,995

4. Capital Shares
Transactions in capital shares were as follows:
</TABLE>
<TABLE>
<CAPTION>
Period Year
Ended Ended
6/30/00 12/31/99
--------- ---------
<S> <C> <C>
Shares sold:
Standard Class .............................................................. 157,411 975,002
Service Class ............................................................... 543 -

Shares issued upon reinvestment of dividends from net investment income:
Standard Class .............................................................. 108,697 239,847
Service Class ............................................................... 5 -
---------- ---------
266,656 1,214,849
Shares repurchased:
Standard Class .............................................................. (1,011,424) (1,516,970)
Service Class ............................................................... - -
---------- ---------
(1,011,424) (1,516,970)
---------- ---------
Net decrease ................................................................... (744,768) (302,121)
========== =========
</TABLE>
<PAGE>

Capital Reserves-7
<PAGE>
Delaware Group Premium Fund-Cash Reserve Series
Statement of Net Assets
June 30, 2000 (Unaudited)
Principal Market
Amount Value
COMMERCIAL PAPER-71.32%
Financial Services-32.01%
Allianz of America
6.13% 7/6/00 ...................................... $1,000,000 $ 999,149
6.58% 8/8/00 ...................................... 1,000,000 993,054
GE Capital International Funding
6.67% 8/25/00 ..................................... 2,000,000 1,979,619
HD Real Estate Funding
6.78% 11/21/00 .................................... 2,000,000 1,946,137
ING America 6.10% 7/10/00 ............................ 1,500,000 1,497,713
Leland Stran Jr 6.64% 8/21/00 ........................ 2,000,000 1,981,187
Metlife Funding 6.63% 8/10/00 ........................ 1,500,000 1,488,950
Motorola Credit 6.54% 8/18/00 ........................ 700,000 693,896
Swiss Re Financial 6.60% 9/8/00 ...................... 2,000,000 1,974,700
USAA Capital 6.51% 7/5/00 ............................ 2,000,000 1,998,553
-----------
15,552,958
-----------
INDUSTRIAL-15.21%
Clorox Company 6.08% 7/10/00 ......................... 2,000,000 1,996,960
Henkel 6.02% 8/9/00 .................................. 2,000,000 1,986,957
New York Times 6.58% 7/26/00 ......................... 1,413,000 1,406,543
Pharmacia 6.95% 7/5/00 ............................... 2,000,000 1,998,456
-----------
7,388,916
-----------
MORTGAGE BANKERS & Brokers-24.10%
Bear Stearns 6.60% 7/17/00 ........................... 2,000,000 1,994,124
Credit Suisse First Boston
6.07% 8/23/00 ..................................... 1,000,000 991,064
Goldman Sachs 6.50% 7/17/00 .......................... 1,000,000 997,111
Merrill Lynch 6.58% 7/24/00 .......................... 2,000,000 1,991,592
Morgan Stanley Group 6.66% 9/5/00 .................... 2,500,000 2,469,475
Svenska Handelsbanken
6.20% 9/29/00 ..................................... 2,300,000 2,264,350
Westpac Trust 6.87% 7/3/00 ........................... 1,000,000 999,618
11,707,334
-----------
Total Commercial Paper ............................... 34,649,208
-----------

<PAGE>

Principal Market
Amount Value
CERTIFICATES OF DEPOSIT-17.20%
Bank of New York 7.22% 5/9/01 ..................... $ 355,000 $ 354,971
Bank One National Illinois
6.99% 11/22/00 .................................... 2,000,000 2,000,000
Harris Trust & Savings 6.57% 7/6/00 ............... 2,000,000 2,000,000
Northern Trust Company 6.36% 8/31/00 .............. 2,000,000 2,000,121
Wilmington Trust 6.68% 8/9/05 ..................... 2,000,000 2,000,000
-----------
Total Certificates of Deposit ..................... 8,355,092
-----------

*FLOATING RATE NOTES-12.35%
AT&T 6.24% 7/31/00 ................................ 1,000,000 999,987
Bank of America 6.65% 4/27/01 ..................... 2,000,000 2,000,000
Emerson Electric 6.62% 6/6/01 ..................... 2,000,000 2,000,000
Goldman Sachs 7.11% 9/18/00 ....................... 1,000,000 1,000,338
-----------
Total Floating Rate Notes ......................... 6,000,325
-----------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES -100.87% (COST $49,004,625)** .............................. $49,004,625

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(0.87%) ..................................... (422,488)
-----------

NET ASSETS APPLICABLE TO 4,858,214 SHARES OUTSTANDING-100.00% ............................... $48,582,137
===========

NET ASSET VALUE-CASH RESERVE SERIES STANDARD CLASS ($48,577,096 / 4,857,710 SHARES) ......... $10.00
======

NET ASSET VALUE-CASH RESERVE SERIES SERVICE CLASS ($5,041 / 504 SHARES) ..................... $10.00
======
</TABLE>

* Floating Rate Notes-The interest rate shown is the rate as of June 30, 2000
and the maturity shown is the longer of the next interest readjustment date or
the date the principal amount shown can be recovered through demand.
**Also the cost for federal income tax purposes.

See accompanying notes

Cash Reserve-1
<PAGE>

Delaware Group Premium Fund-
Cash Reserve Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Interest ........................................................... $1,632,455
----------
1,632,455
----------

EXPENSES:
Management fees .................................................... 118,852
Custodian fees ..................................................... 15,411
Accounting and administration ...................................... 10,746
Reports and statements to shareholders ............................. 2,700
Professional fees .................................................. 2,600
Dividend disbursing and transfer agent
fees and expenses ............................................... 2,330
Taxes (other than taxes on income) ................................. 2,270
Trustees' fees ..................................................... 962
Registration fees .................................................. 600
Distribution expense-Service Class ................................. 1
Other .............................................................. 2,581
----------
159,053

Less expenses paid indirectly ...................................... (1,022)
----------
Total expenses ..................................................... 158,031
----------

NET INVESTMENT INCOME .............................................. 1,474,424
----------

NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................................................. $1,474,424
==========

See accompanying notes

<PAGE>

Delaware Group Premium Fund-
Cash Reserve Series
Statements of Changes in Net Assets

<TABLE>
<CAPTION>
Six Months Year
Ended 6/30/00 Ended
(Unaudited) 12/31/99
------------- ---------
<S> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ........................... $ 1,474,424 $ 2,500,077
------------ ------------
Net increase in net assets resulting
from operations .............................. 1,474,424 2,500,077
------------ ------------

DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class ............................... (1,474,376) (2,500,077)
Service Class ................................ (48) -
------------ ------------
(1,474,424) (2,500,077)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ............................... 121,798,112 170,410,782
Service Class ................................ 5,000 -
Net asset value of shares issued upon
reinvestment of dividends from net
investment income
Standard Class ............................... 1,481,012 2,476,890
Service Class ................................ 41 -
------------ ------------
123,284,165 172,887,672
------------ ------------
Cost of shares repurchased:
Standard Class ............................... (132,122,824) (158,359,931)
Service Class ................................ - -
------------ ------------
(132,122,824) (158,359,931)
------------ ------------

Increase (decrease) in net assets derived
from capital share transactions .............. (8,838,659) 14,527,741
------------ ------------

NET INCREASE (DECREASE)
IN NET ASSETS ................................ (8,838,659) 14,527,741
------------ ------------

NET ASSETS:
Beginning of period ............................. 57,420,796 42,893,055
------------ ------------
End of period ................................... $ 48,582,137 $ 57,420,796
============ ============
</TABLE>

See accompanying notes

Cash Reserve-2
<PAGE>

Delaware Group Premium Fund-Cash Reserve Series
Financial Highlights

Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Cash Reserve Series Standard Class
Six Months
Ended Year Ended December 31,
6/30/00(1)
(Unaudited) 1999 1998 1997 1996 1995
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................... $10.000 $10.000 $10.000 $10.000 $10.000 $10.000

Income from investment operations:
Net investment income .................................. 0.278 0.471 0.497 0.497 0.482 0.535
------- ------- ------- ------- ------- -------
Total from investment operations ....................... 0.278 0.471 0.497 0.497 0.482 0.535
------- ------- ------- ------- ------- -------

Less dividends:
Dividends from net investment income ................... (0.278) (0.471) (0.497) (0.497) (0.482) (0.535)
------- ------- ------- ------- ------- -------
Total dividends ........................................ (0.278) (0.471) (0.497) (0.497) (0.482) (0.535)
------- ------- ------- ------- ------- -------
Net asset value, end of period ......................... $10.000 $10.000 $10.000 $10.000 $10.000 $10.000
======= ======= ======= ======= ======= =======

Total return ........................................... 2.81% 4.81% 5.08% 5.10% 4.93% 5.48%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $48,577 $57,421 $42,893 $30,711 $26,479 $16,338
Ratio of expenses to average net assets ................ 0.60% 0.56% 0.59% 0.64% 0.61% 0.62%
Ratio of net investment income to average net assets ... 5.58% 4.72% 4.96% 4.98% 4.82% 5.35%
</TABLE>

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

See accompanying notes

Cash Reserve-3
<PAGE>
Delaware Group Premium Fund-Cash Reserve Series
Financial Highlights (Continued)

Selected data for each share of the Series outstanding throughout the period was
as follows:
<TABLE>
<CAPTION>
Cash Reserve Series Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
-----------
<S> <C>
Net asset value, beginning of period ............................ $10.000

Income from investment operations:
Net investment income ........................................... 0.094
-------
Total from investment operations ................................ 0.094
-------
Less dividends:
Dividends from net investment income ............................ (0.094)
-------
Total dividends ................................................. (0.094)
-------
Net asset value, end of period .................................. $10.000
=======

Total return .................................................... 0.94%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ......................... $5
Ratio of expenses to average net assets ......................... 0.75%
Ratio of net investment income to average net assets ............ 5.43%
</TABLE>
----------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.

See accompanying notes

Cash Reserve-4

<PAGE>
Delaware Group Premium Fund-Cash Reserve Series
Notes to Financial Statements
June 30, 2000 (Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Cash Reserve
Series (the "Series"). The Series is a diversified open-end investment company
under the Investment Company Act of 1940, as amended. The Series offers two
classes of shares. The Standard Class shares do not carry a 12b-1 fee and the
Service class shares do carry a 12b-1 fee. The shares of the Fund are sold only
to separate accounts of life insurance companies.

The investment objective of the Series is to seek to provide maximum current
income while preserving principal and maintaining liquidity by investing its
assets in a diversified portfolio of money market securities and managing the
Series to maintain a constant net asset value of $10 per share.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--Securities are valued at amortized cost, which approximates
market value.

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $611 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $411 for the period ended June 30, 2000. 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".

Cash Reserve-5
<PAGE>
Cash Reserve Series
Notes to Financial Statements (Continued)

On June 30, 2000, 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
-------------- --------------------
$19,104 $2,179

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Capital Shares
Transactions in capital shares were as follows:

Six Months Year
Ended Ended
6/30/00 12/31/99
---------- ----------
Shares sold:
Standard Class .................................. 12,179,811 17,041,078
Service Class ................................... 500 -

Shares issued upon reinvestment of dividends
from net investment income:
Standard Class .................................. 148,101 247,689
Service Class ................................... 4 -
----------- -----------
12,328,416 17,288,767
Shares repurchased:
Standard Class .................................. (13,212,282) (15,835,993)
Service Class ................................... - -
----------- -----------
(13,212,282) (15,835,993)
----------- -----------
Net increase (decrease) ............................ (883,866) 1,452,774
=========== ===========

4. Credit and Market Risk
An investment in the Series is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the Series seeks
to preserve the value of your investment at $10.00 per share, it is possible to
lose money by investing in the Series.

Cash Reserve-6

<PAGE>
Delaware Group Premium Fund-Convertible Securities Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Principal Market
Amount Value
CONVERTIBLE BONDS-35.82%
Automobiles & Automotive Parts-3.10%
Magna International 4.875% 2/15/05 ................ $175,000 $ 158,813
Tower Automotive 5.00% 8/1/04 ..................... 200,000 154,750
----------
313,563
----------
Banking, Finance & Insurance-1.30%
Bell Atlantic Financial Services
5.75% 4/1/03 ..................................... 135,000 130,976
----------
130,976
----------
Cable, Media & Publishing-4.67%
Clear Channel Communications
1.50% 12/1/02 .................................... 300,000 293,625
**Jacor Communications 4.625% 2/9/18 ................ 300,000 177,750
----------
471,375
----------
Computers & Technology-14.98%
Amazon.com 4.75% 2/1/09 ........................... 155,000 98,038
Mercury Interactive 4.75% 7/1/07 .................. 175,000 175,000
National Data 5.00% 11/1/03 ....................... 200,000 166,000
**Network Associates 4.127% 2/13/18 ................. 220,000 78,375
**Network Associates 4.628% 2/13/18 ................. 300,000 106,875
Rational Software 5.00% 2/1/07 .................... 175,000 260,969
Siebel Systems 5.50% 9/15/06 ...................... 175,000 627,375
----------
1,512,632
----------
Consumer Products-2.05%
Devon Energy 4.95% 8/15/08 ........................ 215,000 206,938
----------
206,938
----------
Food, Beverage & Tobacco-1.05%
**Whole Foods Market 4.93% 3/2/18 ................... 300,000 106,500
----------
106,500
----------
Industrial Machinery-1.17%
Thermo Fibertek 4.50% 7/15/04 ..................... 140,000 118,300
----------
118,300
----------
Metals & Mining-1.86%
MascoTech 4.50% 12/15/03 .......................... 250,000 187,813
----------
187,813
----------
Telecommunications-5.64%
Allied Riser 7.50% 6/15/07 ........................ 240,000 240,000
Level Three Communications
6.00% 9/15/09 .................................... 100,000 148,875
Level Three Communications
6.00% 3/15/10 .................................... 200,000 181,000
----------
569,875
----------
Total Convertible Bonds
(cost $3,281,576) 3,617,972
----------
Number of
Shares
COMMON STOCK-18.83%
Automobiles & Automotive Parts-1.78%
General Motors .................................... 3,100 179,994
----------
179,994
----------
Energy-4.10%
Exxon Mobil ....................................... 5,272 413,852
----------
413,852
----------
Leisure, Lodging & Entertainment-2.40%
Starwood Hotels & Resorts
Worldwide ........................................ 7,500 242,344
----------
242,344
----------

<PAGE>
Number of Market
Shares Value
COMMON STOCK (Continued)
Real Estate-10.45%
Equity Office Properties Trust .................... 4,600 $ 126,788
Grove Property Trust .............................. 26,200 425,750
Public Storage .................................... 10,400 243,750
SL Green Realty ................................... 9,700 259,475
----------
1,055,763
----------
Telecommunications-0.10%
*Winstar Communications ............................ 303 10,267
----------
10,267
----------
Total Common Stock
(cost $1,699,755) ................................ 1,902,220
----------

CONVERTIBLE PREFERRED STOCKS-41.58%
Banking, Finance & Insurance-9.23%
American General Series A 6.00% ................... 2,500 195,000
American Heritage Life
Investment 8.50% ................................. 4,100 336,713
National Australia Bank Units 7.85% ............... 5,500 155,719
Sovereign Capital Trust II 7.50% .................. 5,000 245,000
----------
932,432
----------
Buildings & Materials-3.39%
Kaufman and Broad Homes 8.25% ..................... 33,000 214,500
Georgia-Pacific PEPS 7.50% ........................ 4,000 128,000
----------
342,500
----------
Cable, Media & Publishing-4.85%
Cox Communications PRIDES 7.00% ................... 5,800 356,338
Tribune 6.25% ..................................... 8,000 134,000
----------
490,338
----------
Computers & Technology-8.90%
*Maxtor DECS 7.00% ................................. 47,000 487,625
*Metromedia Fiber Networks
DECS 6.25% ....................................... 6,000 411,750
----------
899,375
----------
Paper & Forest Products-0.94%
International Paper 5.25% ......................... 2,500 94,688
----------
94,688
----------
Real Estate-5.83%
General Growth Properties 7.25% ................... 7,400 160,950
Kimco Realty 7.50% ................................ 5,900 154,506
Reckson Associates Realty 7.625% .................. 12,300 272,906
----------
588,362
----------
Telecommunications-2.57%
Winstar Communications PIK 7.00% .................. 4,600 259,900
----------
259,900
----------
Transportation-1.75%
Union Pacific Capital Trust 6.25% ................. 4,500 176,625
----------
176,625
----------
Utilities-4.12%
Houston Industries 7.00% .......................... 1,500 186,563
Texas Utilities 9.25% ............................. 5,900 229,363
----------
415,926
----------
Total Convertible Preferred Stocks
(cost $4,028,339) ................................ 4,200,146
----------

Convertible Securities-1
<PAGE>
Convertible Securities Series
Statement of Net Assets (Continued)

Number of Market
Shares Value
WARRANTS-0.28%
*Cendant Rights .................................... 3,400 $28,688
-------
Total Warrants
(cost $0) ........................................ 28,688
-------
Principal
Amount
REPURCHASE AGREEMENTS-4.95%
With J.P. Morgan Securities 6.40% 7/3/00
(dated 6/30/00, collateralized by
$101,000 U.S. Treasury Notes
5.875% due 11/15/04, market value
$100,368 and $65,100 U.S. Treasury
Notes 7.875% due 11/15/04,
market value $69,639) ........................... $166,500 166,500
With PaineWebber 6.50% 7/3/00
(dated 6/30/00, collateralized by
$40,400 U.S. Treasury Notes 5.25%
due 5/31/01, market value $40,186
and $32,000 U.S. Treasury Notes
6.25% due 10/31/01, market
value $32,157 and $45,500 U.S.
Treasury Notes 6.125% due
12/31/01, market value
$45,273 and $50,500 U.S.
Treasury Notes 7.25% due
5/15/04, market value $52,598) ................... 166,700 166,700
With Prudential Securities 6.50% 7/3/00
(dated 6/30/00, collateralized by
$45,500 U.S. Treasury Notes 4.50%
due 9/30/00, market value $45,833
and $13,000 U.S. Treasury Notes
4.625% due 11/30/00, market
value $12,925 and $45,500
U.S. Treasury Notes 15.75% due
11/15/01, market value
$51,832 and $50,500 U.S. Treasury
Notes 11.875% due 11/15/03,
market value $59,604) ............................ 166,800 166,800
--------
Total Repurchase Agreements
(cost $500,000) .................................. 500,000
--------
<TABLE>
<CAPTION>
<S> <C>

TOTAL MARKET VALUE OF SECURITIES-101.46% (cost $9,509,670) .................................. $10,249,026

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(1.46%) ..................................... (147,919)
-----------
NET ASSETS APPLICABLE TO 858,453 SHARES OUTSTANDING-100.00% ................................. $10,101,107
===========
NET ASSET VALUE-CONVERTIBLE SECURITIES SERIES STANDARD CLASS ($10,096,000/858,019 SHARES) ... $11.77
======
NET ASSET VALUE-CONVERTIBLE SECURITIES SERIES SERVICE CLASS ($5,107/434 SHARES) ............. $11.77
======
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization-no par) .............................. $ 9,466,640
Undistributed net investment income ......................................................... 243,365
Accumulated net realized loss on investments ................................................ (348,254)
Net unrealized appreciation of investments .................................................. 739,356
-----------
Total net assets ............................................................................ $10,101,107
===========
</TABLE>
---------------
* Non-income producing security for the period ended June 30, 2000.
** Zero coupon security as of June 30, 2000. The interest rate shown is the
effective yield.

Summary of Abbreviations:
DECS-Dividend Enhanced Convertible Stock
PEPS-Premium Equity Participating Securities
PIK-Payment in Kind
PRIDES-Preferred Redeemable Increased Dividend Securities

See accompanying notes

Convertible Securities-2
<PAGE>
Delaware Group Premium Fund-
Convertible Securities Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Dividends ............................................ $ 182,376
Interest ............................................. 92,569
---------
274,945
---------

EXPENSES:
Management fees ...................................... 37,269
Accounting and administration ........................ 2,028
Reports and statements to shareholders ............... 468
Dividend disbursing and transfer agent
fees and expenses ................................. 319
Custodian fees ....................................... 280
Trustees' fees ....................................... 254
Registration fees .................................... 150
Distribution expense-Service Class ................... 1
Other ................................................ 113
---------
40,882

Less expenses paid indirectly ........................ (225)
---------
Total expenses ....................................... 40,657
---------

NET INVESTMENT INCOME ................................ 234,288
---------

NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments ..................... 91,755
Net change in unrealized appreciation /
depreciation of investments ....................... 300,814
---------

NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS .................................... 392,569
---------

NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................................... $ 626,857
=========

See accompanying notes
<PAGE>

Delaware Group Premium Fund-
Convertible Securities Series
Statements of Changes in Net Assets

Six Months
Ended Year
6/30/00 Ended
(Unaudited) 12/31/99
----------- ----------
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ............................. $ 234,288 $ 406,857
Net realized gain on investments .................. 91,755 4,848
Net change in unrealized appreciation /
depreciation of investments .................... 300,814 213,388
----------- ----------
Net increase in net assets
resulting from operations ...................... 626,857 625,093
----------- ----------

DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class ................................. (395,429) (292,545)
Service Class .................................. - -
----------- ----------
(395,429) (292,545)
----------- ----------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ................................. 970,674 2,813,309
Service Class .................................. 5,000 -
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
Standard Class ................................. 395,429 292,545
Service Class .................................. - -
----------- ----------
1,371,103 3,105,854
----------- ----------
Cost of shares repurchased:
Standard Class ................................. (1,137,941) (1,934,838)
Service Class .................................. - -
----------- ----------
(1,137,941) (1,934,838)
----------- ----------
Increase in net assets derived from
capital share transactions ..................... 233,162 1,171,016
----------- ----------

NET INCREASE IN NET ASSETS ........................ 464,590 1,503,564
----------- ----------

NET ASSETS:
Beginning of period ............................... 9,636,517 8,132,953
----------- ----------
End of period ..................................... $10,101,107 $9,636,517
=========== ==========

See accompanying notes

Convertible Securities-3
<PAGE>
Delaware Group Premium Fund-Convertible Securities Series
Financial Highlights

Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Convertible Securities Series Standard Class
Six Months 5/1/97(2)
Ended 6/30/00(1) Year Ended December 31, to
(Unaudited) 1999 1998 12/31/97
---------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................................ $11.490 $11.160 $11.660 $10.000

Income (loss) from investment operations:
Net investment income(3) ............................................ 0.279 0.493 0.386 0.318
Net realized and unrealized gain (loss) on investments .............. 0.466 0.247 (0.511) 1.342
------- ------- ------- -------
Total from investment operations .................................... 0.745 0.740 (0.125) 1.660
------- ------- ------- -------

Less dividends and distributions:
Dividends from net investment income(2) ............................. (0.465) (0.410) (0.305) none
Distributions from net realized gain on investments ................. none none (0.070) none
------- ------- ------- -------
Total dividends and distributions ................................... (0.465) (0.410) (0.375) none
------- ------- ------- -------

Net asset value, end of period ...................................... $11.770 $11.490 $11.160 $11.660
======= ======= ======= =======

Total return ........................................................ 6.48% 6.97% (1.17%) 16.60%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................. $10,096 $9,637 $8,133 $3,921
Ratio of expenses to average net assets ............................. 0.82% 0.83% 0.82% 0.80%
Ratio of expenses to average net assets prior to expense limitation
and expenses paid indirectly ..................................... 0.82% 0.83% 0.82% 2.30%
Ratio of net investment income to average net assets ................ 4.74% 4.64% 4.78% 5.68%
Ratio of net investment income to average net assets prior to expense
limitation and expenses paid indirectly .......................... 4.74% 4.64% 4.78% 4.18%
Portfolio turnover .................................................. 39% 35% 77% 209%
</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 for the period ended June 30, 2000 was based on the
average shares outstanding method.

See accompanying notes

Convertible Securities-4
<PAGE>
Delaware Group Premium Fund-Convertible Securities Series
Financial Highlights (Continued)

Selected data for each share of the Series outstanding throughout the period was
as follows:
<TABLE>
<CAPTION>

Convertible Securities Series Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
-----------
<S> <C>
Net asset value, beginning of period ................................ $11.520

Income from investment operations:
Net investment income(2) ............................................ 0.089
Net realized and unrealized gain on investments ..................... 0.161
-------
Total from investment operations .................................... 0.250
-------

Less dividends and distributions:
Dividends from net investment income ................................ none
Distributions from net realized gain on investments ................. none
-------
Total dividends and distributions ................................... none
-------

Net asset value, end of period ...................................... $11.770
=======

Total return ....................................................... 2.17%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................ $5
Ratio of expenses to average net assets ............................ 0.97%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ........................... 0.97%
Ratio of net investment income to average net assets ............... 4.59%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid indirectly .......... 4.59%
Portfolio turnover ................................................. 39%
</TABLE>
-----------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Per share information was based on the average shares outstanding method.

See accompanying notes

Convertible Securities-5

<PAGE>

Delaware Group Premium Fund-Convertible Securities Series
Notes to Financial Statements
June 30, 2000
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Convertible
Securities Series (the "Series"). The Series is a diversified open-end
investment company under the Investment Company Act of 1940, as amended. The
Series offers two classes of shares. The Standard Class shares do not carry a
12b-1 fee and the Service class shares do carry a 12b-1 fee. The shares of the
Fund are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek a high level of total return
through a combination of capital appreciation and current income. It seeks to
achieve this objective by investing primarily in preferred stocks, fixed-income
securities or other securities that can be converted into common stock.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

<PAGE>

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $114 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $111 for the period ended June 30, 2000. 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".

DMC has elected to waive its fee and reimburse the Series to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and distribution
expenses, do not exceed 0.85% of average daily net assets of the Series through
April 30, 2001. No reimbursement was due for the period ended June 30, 2000.

Convertible Securities-6

<PAGE>

Convertible Securities Series
Notes to Financial Statements (Continued)

On June 30, 2000, 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
-------------- -------------------
$6,237 $510

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases $1,851,269
Sales $2,039,938

Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation appreciation
----------- ------------ ------------ --------------
$9,509,670 $1,449,052 ($709,696) $739,356

For federal income tax purposes, the Series had accumulated capital losses at
June 30, 2000 as follows:

Year of
expiration
2006
----------
$415,439

4. Capital Shares
Transactions in capital shares were as follows:

Period Year
Ended Ended
6/30/00 12/31/99
------- --------
Shares sold:
Standard Class .................................... 83,578 258,217
Service Class ..................................... 434 -

Shares issued upon reinvestment of dividends
from net investment income:
Standard Class .................................... 33,596 27,782
Service Class ..................................... - -
-------- --------
117,608 285,999
Shares repurchased:
Standard Class .................................... (97,931) (175,771)
Service Class ..................................... - -
-------- --------
(97,931) (175,771)
-------- --------
Net increase ......................................... 19,677 110,228
======== ========

Convertible Securities-7

<PAGE>

Convertible Securities Series
Notes to Financial Statements (Continued)

6. Credit and Market Risk
The Series may invest in high-yield fixed income securities which carry ratings
of BB or lower by S&P and/or Ba or lower by Moody's. Investments in these higher
yielding securities may be accompanied by a greater degree of credit risk than
higher rated securities. Additionally, lower rated securities may be more
susceptible to adverse economic and competitive industry conditions than
investment grade securities.

The Series may invest up to 15% of its total assets in illiquid securities which
may include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The relative
illiquidity of some of these securities may adversely affect the Series' ability
to dispose of such securities in a timely manner and at a fair price when it is
necessary to liquidate such securities.

Convertible Securities-8
<PAGE>

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

Number Market
of Shares Value
COMMON STOCK-97.37%
Aerospace & Defense-2.69%
Honeywell International ........................ 21,587 $ 727,212
United Technologies ............................ 13,200 777,150
-----------
1,504,362
-----------
Banking, Finance & Insurance-16.50%
American International Group ................... 4,906 576,455
Axa Financial .................................. 15,500 527,000
Bank of New York ............................... 15,800 734,700
Capital One Financial .......................... 8,800 392,700
Chase Manhattan ................................ 15,200 700,150
Citigroup ...................................... 18,000 1,084,500
Federal Home Loan .............................. 33,300 1,348,650
Fleet Boston Financial ......................... 36,000 1,224,000
MBNA ........................................... 66,500 1,803,813
Wells Fargo .................................... 21,400 829,250
-----------
9,221,218
-----------
Cable, Media & Publishing-4.14%
Gannett ........................................ 22,300 1,333,819
Knight-Ridder .................................. 18,400 978,650
-----------
2,312,469
-----------
Chemicals-1.65%
Avery Dennison ................................. 13,700 919,613
-----------
919,613
-----------
Computers & Technology-12.98%
*America Online ................................. 7,900 416,725
CGS Systems International ...................... 11,200 627,900
Compaq ......................................... 24,400 623,725
Computer Associates International .............. 18,800 962,325
Gateway ........................................ 10,000 567,500
Hewlett-Packard ................................ 6,100 761,737
IBM ............................................ 13,400 1,468,137
*Microsoft ...................................... 15,600 1,248,000
Pitney Bowes ................................... 14,500 580,000
-----------
7,256,049
-----------
Consumer Products-0.97%
Tyco International ............................. 11,500 544,813
-----------
544,813
-----------
Electronics & Electrical Equipment-10.74%
*Atmel .......................................... 17,200 634,250
General Electric ............................... 25,500 1,351,500
Intel .......................................... 11,900 1,590,881
Motorola ....................................... 29,400 854,438
*National Semiconductor ......................... 11,600 658,300
Symbol Technologies ............................ 16,900 912,600
-----------
6,001,969
-----------
Energy-10.90%
Amerada Hess ................................... 10,600 654,550
Anadarko Petroleum ............................. 11,300 557,231
Coastal ........................................ 18,000 1,095,750
Halliburton .................................... 22,300 1,052,281
Nabors Industries .............................. 18,400 764,750
Schlumberger Limited ........................... 7,700 574,613
Shell Transport & Trading ...................... 17,800 888,887
Tosco .......................................... 17,800 503,963
-----------
6,092,025
-----------
<PAGE>

Number Market
of Shares Value
COMMON STOCK (Continued)
Food, Beverage & Tobacco-1.01%
Suiza Foods .................................... 11,500 $ 562,063
-----------
562,063
-----------
Healthcare & Pharmaceuticals-10.12%
American Home Products ......................... 15,100 887,125
Biomet ......................................... 29,500 1,133,905
Bristol-Myers Squibb ........................... 17,400 1,013,550
Cardinal Health ................................ 12,600 932,400
Johnson & Johnson .............................. 16,600 1,691,125
-----------
5,658,105
-----------
Industrial Machinery-0.72%
Pentair ........................................ 11,300 401,150
-----------
401,150
-----------
Leisure, Lodging & Entertainment-3.06%
Viad ........................................... 62,700 1,708,575
-----------
1,708,575
-----------
Metals & Mining-1.04%
Alcoa .......................................... 20,000 580,000
-----------
580,000
-----------
Retail-6.16%
Circuit City Stores ............................ 20,200 670,387
Kroger ......................................... 60,500 1,334,781
Lowe's Companies ............................... 16,200 665,213
Wal-Mart Stores ................................ 13,400 772,175
-----------
3,442,556
-----------
Telecommunications-12.02%
ALLTEL ......................................... 20,100 1,244,943
A T & T ........................................ 29,300 926,613
GTE ............................................ 20,200 1,257,450
SBC Communications ............................. 34,800 1,505,100
Sprint ......................................... 10,600 540,600
*Tellabs ........................................ 18,200 1,245,563
-----------
6,720,269
-----------
Transportation & Shipping-1.67%
Tidewater ...................................... 26,000 936,000
-----------
936,000
-----------
Utilities-1.00%
Unicom ......................................... 14,400 557,100
-----------
557,100
-----------
Total Common Stock
(cost $53,939,391) ............................ 54,418,336
-----------

Convertible Preferred Stocks - 1.74%
Sealed Air ..................................... 19,190 971,494
-----------
Total Convertible Preferred
Stock (cost $889,422) .......................... 971,494
-----------

Devon-1

<PAGE>

Devon Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
REPURCHASE AGREEMENTS-1.72%
With J.P. Morgan Securities
6.40% 7/3/00 (dated 6/30/00,
collateralized by $194,000
U.S. Treasury Notes
5.875% due 11/15/04, market
value $193,508 and $125,000
U.S. Treasury Notes
7.875% due 11/15/04,
market value $133,753) ....................... $321,000 $321,000
With PaineWebber 6.50% 7/3/00
(dated 6/30/00, collateralized
by $78,000 U.S. Treasury Notes
5.25% due 5/31/01, market value
$77,479 and $62,000 U.S. Treasury
Notes 6.25% due 10/31/01, market
value $62,000 and $88,000 U.S.
Treasury Notes 6.125% due
12/31/01, market value $87,286
and $97,000 U.S. Treasury
Notes 7.25% due 5/15/04,
market value $101,408) ....................... 321,000 321,000

<PAGE>

Principal Market
Amount Value
REPURCHASE AGREEMENTS (Continued)
With Prudential Securities
6.50% 7/3/00 (dated 6/30/00,
collateralized by $88,000
U.S. Treasury Notes 4.50%
due 9/30/00, market value $88,365
and $25,000 U.S. Treasury
Notes 4.625% due 11/30/00,
market value $24,920 and
$88,000 U.S. Treasury Notes
15.75% due 11/15/01, market
value $99,932 and $97,000
U.S. Treasury Notes 11.875%
due 11/15/03, market
value $114,917) .............................. $322,000 $322,000
--------
Total Repurchase Agreements
(cost $964,000) 964,000
--------

TOTAL MARKET VALUE OF SECURITIES-100.83% (COST $55,792,813) ....... $56,353,830

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(0.83%) ........... (465,055)
-----------
NET ASSETS APPLICABLE TO 4,286,235 SHARES OUTSTANDING-100.00% ..... $55,888,775
===========
NET ASSET VALUE-DEVON SERIES STANDARD CLASS
($55,883,831 / 4,285,856 SHARES) ................................. $13.04
======
NET ASSET VALUE-DEVON SERIES SERVICE CLASS
($4,944 / 379 SHARES) ............................................ $13.04
======
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization - no par) .. $59,813,161
Undistributed net investment income ............................... 191,928
Accumulated net realized loss on investments ...................... (4,677,331)
Net unrealized appreciation of investments ........................ 561,017
-----------
Total net assets .................................................. $55,888,775
===========
-----------
* Non-income producing security for the period ended June 30, 2000.

See accompanying notes

Devon-2

<PAGE>

Delaware Group Premium Fund-
Devon Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Dividends .................................................... $ 405,540
Interest ..................................................... 40,003
------------
445,543
------------
EXPENSES:
Management fees .............................................. 205,238
Accounting and administration ................................ 15,650
Registration fees ............................................ 13,720
Reports and statements to shareholders ....................... 6,500
Professional fees ............................................ 4,050
Dividend disbursing and transfer agent fees
and expenses ................................................ 3,140
Taxes (other than taxes on income) ........................... 2,115
Custodian fees ............................................... 1,521
Trustees' fees ............................................... 950
Distribution expense - Service class ......................... 1
Other ........................................................ 8,127
------------
261,012

Less expenses absorbed or waived ............................. (7,320)
Less expenses paid indirectly ................................ (1,248)
------------
Total expenses ............................................... 252,444
------------

NET INVESTMENT INCOME ........................................ 193,099
------------

NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS:
Net realized loss on investments ............................. (2,122,571)
Net change in unrealized appreciation / depreciation
of investments .............................................. (933,362)
------------

NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS ......................................... (3,055,933)
------------

NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................................... ($2,862,834)
============

See accompanying notes

<PAGE>

Delaware Group Premium Fund-
Devon Series
Statements of Changes in Net Assets

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class .................................. 2,779,371 38,341,698
Service Class ................................... 5,000 -
Net asset value of shares issued upon
reinvestment of distributions from
net investment income and net
realized gain on investments:
Standard Class .................................. 735,763 1,437,876
Service Class ................................... - -
----------- -----------
3,520,134 39,779,574
----------- -----------
Cost of shares repurchased:
Standard Class .................................. (21,962,079) (20,384,439)
Service Class ................................... - -
----------- -----------
(21,962,079) (20,384,439)
----------- -----------
Increase (decrease) in net assets derived
from capital share transactions ................ (18,441,945) 19,395,135
----------- -----------

NET INCREASE (DECREASE)
IN NET ASSETS ................................... (22,040,542) 9,215,052
----------- -----------

NET ASSETS:
Beginning of period .............................. 77,929,317 68,714,265
----------- -----------
End of period .................................... $55,888,775 $77,929,317
=========== ===========
See accompanying notes

Devon-3

<PAGE>

Delaware Group Premium Fund-Devon Series
Financial Highlights

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

<TABLE>
<CAPTION>
Devon Series Standard Class
Six Months 5/1/97(2)
Ended 6/30/00(1) Year Ended December 31, to
(Unaudited) 1999 1998 12/31/97
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............................... $13.620 $15.440 $12.730 $10.000

Income (loss) from investment operations:
Net investment income(3) ........................................... 0.040 0.113 0.106 0.080
Net realized and unrealized gain (loss) on investments ............. (0.469) (1.669) 2.889 2.650
------- ------- ------- -------
Total from investment operations ................................... (0.429) (1.556) 2.995 2.730
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............................... (0.151) (0.090) (0.080) none
Distributions from net realized gain on investments ................ none (0.174) (0.205) none
------- ------- ------- -------
Total dividends and distributions .................................. (0.151) (0.264) (0.285) none
------- ------- ------- -------
Net asset value, end of period ..................................... $13.040 $13.620 $15.440 $12.730
======= ======= ======= =======
Total return ....................................................... (3.14%) (10.13%) 24.05% 27.30%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................ $55,884 $77,929 $68,714 $16,653
Ratio of expenses to average net assets(4) ......................... 0.80% 0.75% 0.66% 0.80%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ......................... 0.83% 0.75% 0.66% 0.91%
Ratio of net investment income to average net assets ............... 0.62% 0.90% 1.30% 2.01%
Ratio of net investment income to average net assets prior
to expense limitation and expenses paid indirectly ............. 0.59% 0.90% 1.30% 1.90%
Portfolio turnover ................................................. 102% 101% 34% 80%

</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 for the six months ended June 30, 2000 was based on
the average shares outstanding method.
(4) Ratio for the period ended June 30, 2000 including fees paid indirectly in
accordance with Securities and Exchange Commission rules was 0.81%.

See accompanying notes

Devon-4

<PAGE>

Delaware Group Premium Fund-Devon Series
Financial Highlights (Continued)

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

Devon Series
Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
-------------

Net asset value, beginning of period ........................... $13.180

Income (loss) from investment operations:
Net investment income(2) ....................................... 0.014
Net realized and unrealized loss on investments ................ (0.154)
-------
Total from investment operations ............................... (0.140)
--------
Less dividends and distributions:
Dividends from net investment income ........................... none
Distributions from net realized gain on investments ............ none
-------
Total dividends and distributions .............................. none
-------
Net asset value, end of period ................................. $13.040
=======
Total return ................................................... (1.06%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) ........................ $5
Ratio of expenses to average net assets(3) ..................... 0.95%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ....................... 0.98%
Ratio of net investment income to average net assets ........... 0.47%
Ratio of net investment income to average net assets prior
to expense limitation and expenses paid indirectly ............ 0.44%
Portfolio turnover ............................................. 102%

-----------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Per share information was based on the average shares outstanding method.
(3) Ratio including fees paid indirectly in accordance with Securities and
Exchange Commission rules was 0.96%.

See accompanying notes

Devon-5

<PAGE>

Delaware Group Premium Fund-Devon Series
Notes to Financial Statements
June 30, 2000
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Devon Series
(the "Series"). The Series is a diversified open-end investment company under
the Investment Company Act of 1940, as amended. The Series offers two classes of
shares. The Standard Class shares do not carry a 12b-1 fee and the Service class
shares do carry a 12b-1 fee. The shares of the Fund are sold only to separate
accounts of life insurance companies.

The investment objective of the Series is to seek current income and capital
appreciation. It seeks to achieve this objective by investing primarily in
income-producing common stocks of large- and mid-cap U.S. companies that the
investment manager believes have the potential for above-average dividend
increases over time.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the lasted quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. 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 under the direction of the Fund's Board of Trustees.

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

<PAGE>

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $727 for the period ended June 30, 2000. 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 $521
for the period ended June 30, 2000. 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".

Devon-6

<PAGE>

Devon Series
Notes to Financial Statements (Continued)

On June 30, 2000 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
-------------- -------------------
$31,188 $2,884

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases ...................................... $31,853,067
Sales .......................................... $49,213,846

For Federal income tax purposes, the Series had accumulated capital losses at
June 30, 2000 as follows:

Year of
expiration
2007
----------
$2,345,618

4. Capital Shares
Transactions in capital shares were as follows:

Period Year
Ended Ended
6/30/00 12/31/99
------- --------
Shares sold:
Standard Class ................................... 214,629 2,647,758
Service Class .................................... 379 -

Shares issued upon reinvestment of
distributions from net investment income
and net realized gain on investments:
Standard Class ................................... 56,772 102,267
Service Class .................................... - -
--------- ---------
271,780 2,750,025

Shares repurchased:
Standard Class ................................... (1,707,794) (1,478,955)
Service Class .................................... - -
--------- ---------
(1,707,794) (1,478,955)
--------- ---------
Net increase (decrease) ........................... (1,436,014) 1,271,070
========= =========

Devon-7

<PAGE>

Delaware Group Premium Fund-Emerging Markets Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Market
Number of Value
Shares (U.S.$)
COMMON STOCK-90.68%
Argentina-1.66%
*Central Puerto Class B ........................... 64,838 $ 98,607
Transportadora de Gas del Sur Class B ............ 86,800 153,719
---------
252,326
---------
Brazil-20.14%
Aracruz Celulose ADR ............................. 16,200 312,863
Brasil Telecom ................................... 900,000 308,151
Centrais Eletricas de Santa Catarina ............. 339,000 124,059
*Centrais Eletricas de Santa
Catarina GDR ................................... 600 21,952
Companhia Energetica
de Minas Gerais ................................ 2,700,000 46,724
Companhia Energetica de Minas
Gerais ADR ..................................... 7,887 136,452
Companhia Paranaense de
Energia Copel ADR .............................. 43,680 406,770
Gerdau Metalurgica ............................... 19,578,000 412,511
Petroleo Brasileiro .............................. 16,244 490,873
Renner Participacoes ............................. 870,000 2,118
*Rossi Residential ................................ 8,100 13,470
Telecomunicacoes de Minas Gerais ................. 7,863,000 287,750
Uniao de Bancos Brasileiros ...................... 10,744,000 333,609
Usinas Siderurgicas de Minas Gerais .............. 30,600 141,675
Usinas Siderurgicas de Minas
Gerais ADR ..................................... 1,400 6,480
Usinas Siderurgicas de Minas
Gerais ADR ..................................... 2,334 10,803
---------
3,056,260
---------
Chile-2.47%
A.F.P. Provida ADR ............................... 13,600 289,000
*Empresa Nacional Electricidad ADR ................ 7,800 86,288
---------
375,288
---------
Croatia-1.14%
*Zagrebacka Banka GDR ............................. 9,540 173,151
---------
173,151
---------
Egypt-0.63%
*Paints & Chemical Industries GDR ................. 50,850 95,344
---------
95,344
---------
Estonia-1.49%
*Eesti Telekom GDR ................................ 5,264 105,543
*Eesti Uhispank GDR ............................... 22,335 120,051
---------
225,594
---------
Greece-1.48%
Hellenic Telecommunications ADR .................. 18,423 224,530
---------
224,530
---------
Hong Kong-6.76%
*Beijing Capital International Airport ............ 1,276,000 242,253
Guangdong Kelon Electric Holding ................. 387,000 209,746
Guangshen Railway ................................ 2,128,000 215,653
Hengan International Group ....................... 552,000 126,042
Shenzhen Expressway .............................. 1,671,300 231,544
---------
1,025,238
---------
Hungary-1.71%
*Gedeon Richter GDR ............................... 4,799 259,146
---------
259,146
---------
<PAGE>

Market
Number of Value
Shares (U.S.$)
COMMON STOCK (Continued)
India-8.29%
*Gas Authority of India GDR ....................... 26,917 $ 185,054
ICICI ADR ........................................ 11,316 212,175
*India Fund ....................................... 21,000 297,938
*Larsen & Toubro GDR .............................. 449 4,995
Larsen & Toubro GDR .............................. 8,001 89,011
Mahanagar Telephone Nigam GDR .................... 20,700 217,350
Videsh Sanchar Nigam GDR ......................... 15,962 251,401
---------
1,257,924
---------
Indonesia-0.07%
*United Tractors .................................. 43,400 11,033
---------
11,033
---------
Israel-4.21%
Bank Hapoalim .................................... 93,798 271,998
ECI Telecommunications ........................... 10,272 367,224
---------
639,222
---------
Malaysia-6.05%
Leader Universal Holdings ........................ 539,000 160,282
Petronas Dagangan ................................ 239,000 254,095
Public Finance ................................... 17,000 17,984
Resorts World .................................... 84,000 229,895
Sime Darby ....................................... 199,200 255,815
---------
918,071
---------
Mexico-4.18%
Alfa Class A ..................................... 55,100 126,207
Cemex Class B .................................... 83,531 389,444
*Grupo Minsa ADR .................................. 2,400 10,800
*Grupo Minsa Class C .............................. 103,096 47,857
Vitro ADR ........................................ 18,600 59,287
---------
633,595
---------
Peru-1.11%
*Banco de Credito del Peru ADR .................... 64,101 31,775
CrediCorp ........................................ 15,100 135,900
---------
167,675
---------
Russia-2.64%
*Gazprom ADR ...................................... 1,900 13,537
*Gazprom ADR ...................................... 19,940 142,072
Lukoil ADR ....................................... 4,800 245,376
---------
400,985
---------
Spain-1.27%
*Telefonica ADR ................................... 3,017 193,295
---------
193,295
---------
South Africa-12.03%
ABSA Group ....................................... 71,279 269,988
Iscor ............................................ 140,433 239,057
Kersaf Investments ............................... 44,562 174,701
Network Heathcare ................................ 938,150 116,145
Sanlam Limited ................................... 280,400 331,025
Sappi ............................................ 44,200 332,233
Sasol ............................................ 53,900 361,452
---------
1,824,601
---------
South Korea-2.67%
Pohang Iron & Steel .............................. 500 43,481
Pohang Iron & Steel ADR .......................... 15,080 361,920
---------
405,401
---------

Emerging Markets-1

<PAGE>

Emerging Markets Series
Statement of Net Assets (Continued)

Market
Number of Value
Shares (U.S.$)
COMMON STOCK (Continued)
Taiwan-4.37%
China Steel GDR .................................. 23,468 $ 319,751
*Yageo ............................................ 9,763 75,668
*Yageo GDR ........................................ 34,620 268,305
----------
663,724
----------
Thailand-5.32%
Bangkok Bank ..................................... 101,700 124,610
Electricity Generating Public
Corporation .................................... 298,400 319,918
Hana Microelectronics ............................ 39,400 309,769
Thai Reinsurance ................................. 60,000 52,074
----------
806,371
----------
Turkey-0.99%
*Efes Sinai Yatirim ADR ........................... 1,607 35,916
*Efes Sinai Yatirim Holding Class B ............... 10,228,660 113,630
----------
149,546
----------
Total Common Stock
(cost $15,038,615) ............................. 13,758,320
----------

Market
Principal Value
Amount (U.S.$)
REPURCHASE AGREEMENTS-5.33%
With J.P. Morgan Securities 6.40% 7/3/00
(dated 6/30/00, collateralized by
$164,000 U.S. Treasury Notes
5.875% due 11/15/04,
market value $162,395 and $105,000
U.S. Treasury Notes 7.875% due 11/15/04,
market value $112,676)......................... $269,000 $269,000
With PaineWebber 6.50% 7/3/00
(dated 6/30/00, collateralized by
$65,000 U.S. Treasury Notes
5.25% due 5/31/01, market value
$65,022 and $52,000 U.S. Treasury
Notes 6.25% due 10/31/01, market value
$52,031 and $74,000 U.S. Treasury
Notes 6.125% due 12/31/01, market value
$73,252 and $82,000 U.S. Treasury
Notes 7.25% due 5/15/04,
market value $85,103)........................... 270,000 270,000
With Prudential Securities 6.50% 7/3/00
(dated 6/30/00, collateralized by
$74,000 U.S. Treasury Notes 4.50% due
9/30/00, market value $74,157 and
$21,000 U.S. Treasury Notes 4.625% due
11/30/00, market value $20,913
and $74,000 U.S. Treasury Notes 15.75%
due 11/15/01, market value $83,864
and $82,000 U.S. Treasury Notes
11.875% due 11/15/03,
market value $96,439)........................... 270,000 270,000
--------
Total Repurchase Agreements
(cost $809,000) ................................ 809,000
--------

<PAGE>

TOTAL MARKET VALUE OF SECURITIES-96.01% (cost $15,847,615) ....... $14,567,320

RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-3.99% ............ 605,754
-----------
NET ASSETS APPLICABLE TO 2,001,382 SHARES OUTSTANDING-100.00% .... $15,173,074
===========
NET ASSET VALUE-EMERGING MARKETS SERIES STANDARD
CLASS ($15,168,047 / 2,000,719 SHARES) ......................... $7.58
=====
NET ASSET VALUE-EMERGING MARKETS SERIES SERVICE
CLASS ($5,027 / 663 SHARES) .................................... $7.58
=====
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization-no par) ... $16,738,091
Undistributed net investment income** ............................ 24,423
Accumulated net realized loss on investments ..................... (308,787)
Net unrealized depreciation of investments and foreign
currencies ..................................................... (1,280,653)
-----------
Total net assets ................................................. $15,173,074
===========

----------------------
* Non-income producing security for the period ended June 30, 2000.
** Undistributed net investment income includes net realized gains (losses) on
foreign currencies. Net realized gains (losses) on foreign currencies are
treated as net investment income in accordance with provisions of the
Internal Revenue Code.

ADR-American Depositary Receipt
GDR-Global Depositary Receipt

See accompanying notes

Emerging Markets-2

<PAGE>

Delaware Group Premium Fund-
Emerging Markets Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Dividends ................................................... $ 245,970
Interest .................................................... 51,160
Foreign tax withheld ........................................ (10,198)
----------
286,932
----------
EXPENSES:
Management fees ............................................. 90,062
Reports and statements to shareholders ...................... 12,700
Custodian fees .............................................. 6,970
Accounting and administration ............................... 3,050
Taxes (other than taxes on income) .......................... 1,360
Professional fees ........................................... 290
Trustee's fees .............................................. 280
Dividend disbursing and transfer agent fees
and expenses ............................................. 120
Registration fees ........................................... 50
Distribution expense-Service Class .......................... 1
Other ....................................................... 254
----------
............................................................ 115,137
Less expenses absorbed or waived ............................ (7,367)
Less expenses paid indirectly ............................... (637)
----------
Total expenses .............................................. 107,133
----------
NET INVESTMENT INCOME ....................................... 179,799
----------

NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized loss on:
Investments .............................................. (22,178)
Foreign currencies ....................................... (15,608)
----------
Net realized loss ........................................... (37,786)
Net change in unrealized appreciation / depreciation
of investments and foreign currencies .................... (1,485,203)
----------

NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCIES ....................... (1,522,989)
----------

NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS .......................................... ($1,343,190)
==========

See accompanying notes

<PAGE>

Delaware Group Premium Fund-
Emerging Markets Series
Statements of Changes in Net Assets

Six Months Year
Ended 6/30/00 Ended
(Unaudited) 12/31/99
------------- --------

INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ............................. $ 179,799 $ 147,834
Net realized loss on investments
and foreign currencies ........................ (37,786) (78,514)
Net change in unrealized appreciation /
depreciation of investments and
foreign currencies ............................. (1,485,203) 3,389,812
----------- -----------
Net increase (decrease) in net assets
resulting from operations ...................... (1,343,190) 3,459,132
----------- -----------

DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class ................................. (252,413) (127,668)
Service Class .................................. - -
----------- -----------
(252,413) (127,668)
----------- -----------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ................................. 6,208,252 7,257,077
Service Class .................................. 5,000 -
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
Standard Class ................................. 252,413 127,668
Service Class .................................. - -
----------- -----------
6,465,665 7,384,745
----------- -----------
Cost of shares repurchased:
Standard Class ................................. (3,045,831) (2,723,434)
Service Class .................................. - -
----------- -----------
(3,045,831) (2,723,434)
----------- -----------
Increase in net assets derived from capital
share transactions ............................. 3,419,834 4,661,311
----------- -----------
NET INCREASE IN NET ASSETS ........................ 1,824,231 7,992,775
----------- -----------
NET ASSETS:
Beginning of period ............................... 13,348,843 5,356,068
----------- -----------
End of period ..................................... $15,173,074 $13,348,843
=========== ===========

See accompanying notes

Emerging Markets-3

<PAGE>

Delaware Group Premium Fund-Emerging Markets Series
Financial Highlights

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

Emerging Markets Series Standard Class
Six Months 5/1/97(2)
Ended 6/30/00(1) Year Ended December 31, to
(Unaudited) 1999 1998 12/31/97
--------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................... $ 8.400 $ 5.810 $ 8.880 $10.000

Income (loss) from investment operations:
Net investment income(3) ............................... 0.097 0.126 0.171 0.060
Net realized and unrealized gain (loss) on
investments and foreign currencies .................. (0.775) 2.597 (2.991) (1.180)
------- ------- ------- -------
Total from investment operations ....................... (0.678) 2.723 (2.820) (1.120)
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................... (0.142) (0.133) (0.030) none
Distributions from net realized gain on investments .... none none (0.220) none
------- ------- ------- -------
Total dividends and distributions ...................... (0.142) (0.133) (0.250) none
------- ------- ------- -------
Net asset value, end of period ......................... $ 7.580 $ 8.400 $ 5.810 $ 8.880
======= ======= ======= =======
Total return ........................................... (8.23%) 48.28% (32.48%) (11.20%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $15,168 $13,349 $ 5,356 $ 5,776
Ratio of expenses to average net assets(4) ............. 1.49% 1.47% 1.50% 1.50%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ..... 1.60% 1.53% 1.67% 2.45%
Ratio of net investment income to average net assets ... 2.50% 1.88% 2.34% 0.89%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly .......................................... 2.39% 1.82% 2.17% (0.06%)
Portfolio turnover ..................................... 11% 20% 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.
(4) Ratio for the period ended June 30, 2000 including fees paid indirectly in
accordance with Securities and Exchange Commission rules was 1.50%.

See accompanying notes

Emerging Markets-4

<PAGE>

Delaware Group Premium Fund-Emerging Markets Series
Financial Highlights (Continued)

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

Emerging Markets Series
Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
-----------------------

Net asset value, beginning of period ...................... $7.540

Income (loss) from investment operations:
Net investment income(2) .................................. 0.049
Net realized and unrealized loss on investments and
foreign currencies ..................................... (0.009)
------
Total from investment operations .......................... 0.040
------

Less dividends and distributions:
Dividends from net investment income ...................... none
Distributions from net realized gain on investments ....... none
------
Total dividends and distributions ......................... none
------
Net asset value, end of period ............................ $7.580
======
Total return .............................................. 0.53%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $ 5
Ratio of expenses to average net assets(3) ................ 1.64%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ........ 1.75%
Ratio of net investment income to average net assets ...... 2.35%
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly ........................................ 2.24%
Portfolio turnover ........................................ 11%

--------------------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Per share information was based on the average shares outstanding method.
(3) Ratio including fees paid indirectly in accordance with Securities and
Exchange Commission rules was 1.65%.

See accompanying notes

Emerging Markets-5

<PAGE>

Delaware Group Premium Fund-Emerging Markets Series
Notes to Financial Statements
June 30, 2000
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Emerging
Markets Series (the "Series"). The Series is a non-diversified open-end
investment company under the Investment Company Act of 1940, as amended. The
Series offers two classes of shares. The Standard Class shares do not carry a
12b-1 fee and the Service class shares do carry a 12b-1 fee. The shares of the
Fund are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek long-term capital
appreciation. It seeks to achieve this objective by investing primarily in the
stocks of companies located or operating in emerging market countries.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. 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 under the direction of the Fund's Board of Trustees.

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 daily. 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.

<PAGE>

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

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $167 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $470 for the period ended June 30, 2000. 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".

Emerging Markets-6

<PAGE>

Emerging Markets Series
Notes to Financial Statements (Continued)

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% of 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.

DIAL has elected to waive its fee and reimburse the Series to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and distribution
expenses, do not exceed 1.50% of average daily net assets of the Series through
April 30, 2001.

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

On June 30, 2000, 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
-------------- ------------------- --------------
$10,744 $12,047 $18,022

Certain officers of DMC, DSC, DIAL and DDLP are officers, trustees and/or
employees of the Fund. These officers, trustees and employees are paid no
compensation by the Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases ....................................... $5,053,109
Sales ........................................... $ 664,022

Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation depreciation
----------- ------------ ------------ --------------
$15,847,615 $1,173,326 ($2,453,621) ($1,280,295)

For federal income tax purposes, the Series had accumulated capital losses at
June 30, 2000 as follows:

Year of Expiration
2006 2007 Total
-------- ------- --------
$227,600 $58,465 $286,065

Emerging Markets-7

<PAGE>
Emerging Markets Series
Notes to Financial Statements (Continued)

4. Capital Shares
Transactions in capital shares were as follows:
Period Year
Ended Ended
6/30/00 12/31/99
-------- --------
Shares sold:
Standard Class .................................... 750,298 1,036,898
Service Class ..................................... 663 -

Shares issued upon reinvestment of dividends from
net investment income:
Standard Class .................................... 30,265 24,552
Service Class ..................................... - -
-------- ---------
781,226 1,061,450
Shares repurchased:
Standard Class .................................... (368,786) (394,563)
Service Class ..................................... - -
-------- ---------
(368,786) (394,563)
-------- ---------
Net increase ......................................... 412,440 666,887
======== =========

6. Foreign Exchange Contracts
The Series will generally enter into forward foreign currency exchange 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 exchange contracts are valued at the mean between the
bid and asked prices of the contracts and are marked-to-market daily.
Interpolated values are derived when the settlement date of the contract is an
interim date for which quotations are not available. The change in market value
is recorded as an unrealized gain or loss. When the contract is closed, a
realized gain or loss is recorded equal to the difference between the value of
the contract at the time it was opened and the value at the time it was closed.

The use of forward foreign currency exchange 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 exchange 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 exchange contracts outstanding at June
30, 2000.

7. 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-8

<PAGE>

Delaware Group Premium Fund-Global Bond Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Market
Principal Value
Amount* (U.S. $)
BONDS-96.84%
Australia-9.63%
New South Wales Treasury
6.50% 5/1/06 ................................. AUD 1,350,000 $ 808,851
Queensland Treasury
6.50% 6/14/05 ................................ 1,100,000 660,503
8.00% 8/14/01 ................................ 100,000 60,954
Queensland Treasury Global
8.00% 8/14/01 ................................ 200,000 121,935
----------
1,652,243
----------
Austria-1.24%
Republic of Austria 7.25% 5/3/07 ................ DEM 400,000 212,842
----------
212,842
----------
Belgium-3.11%
Belgium Kingdom 5.75% 6/28/10 ................... EUR 550,000 532,590
----------
532,590
----------
Canada-2.80%
Government of Canada
7.50% 3/1/01 ................................. CAD 150,000 102,607
10.25% 3/15/14 ............................... 180,000 170,233
Ontario Hydro
5.60% 6/2/08 ................................. 320,000 208,044
----------
480,884
----------
Finland-3.62%
Finnish Government 5.00% 4/25/09 ................ EUR 670,000 620,427
----------
620,427
----------
Germany-12.23%
Bundesrepublic Deutschland
8.375% 5/21/01 ............................... EUR 300,000 294,871
Depfa Pfandbriefbank 5.625% 2/7/03 .............. 802,258 767,674
Deutschland Republic 6.25% 1/4/24 ............... 1,000,000 1,034,786
----------
2,097,331
----------
Japan-3.90%
Export-Import Bank of Japan
7.75% 10/8/02 ................................ CAD 160,000 111,005
Japan Highway Public Corporation
7.875% 9/27/02 ............................... 800,000 556,864
----------
667,869
----------
Korea-0.55%
Korea Electric Power 6.375% 12/1/03 ............. US$ 100,000 94,580
----------
94,580
----------
Netherlands-13.56%
Baden Wurt L - Finance
6.625% 8/20/03 ............................... DEM 700,000 352,862
DSL Finance
5.75% 3/19/09 ................................ 1,000,000 484,492
6.00% 2/21/06 ................................ 1,400,000 693,014
Netherlands Government 8.75% 9/15/01 ............ EUR 800,000 795,678
----------
2,326,046
----------

<PAGE>

Market
Principal Value
Amount* (U.S. $)
BONDS (Continued)
New Zealand-12.28%
New Zealand Government
6.00% 11/15/11 ............................... NZD 1,300,000 $ 574,583
7.00% 7/15/09 ................................ 200,000 95,269
8.00% 4/15/04 ................................ 450,000 219,318
8.00% 11/15/06 ............................... 1,900,000 945,896
10.00% 3/15/02 ............................... 550,000 270,946
----------
2,106,012
----------
Norway-0.82%
Kingdom of Norway 8.375% 1/27/03 ................ CAD 200,000 141,332
----------
141,332
----------
Portugal-5.23%
Portugese Government 5.375% 6/23/08 ............. EUR 950,000 897,348
----------
897,348
----------
South Africa-4.09%
Republic of South Africa
12.50% 1/15/02 ............................... ZAR 2,400,000 356,415
13.00% 8/31/10 ............................... 2,500,000 345,011
----------
701,426
----------
Supranational-4.38%
International Bank Reconstruction & Development
5.25% 1/12/09 ................................ US$ 500,000 441,500
5.50% 4/15/04 ................................ NZD 700,000 309,982
----------
751,482
----------
United Kingdom-4.50%
Halifax 5.625% 7/23/07 .......................... DEM 1,600,000 771,946
----------
771,946
----------
United States-14.90%
Federal National Mortgage Association
5.75% 9/5/00 ................................. AUD 450,000 268,754
KFW International Finance
6.50% 12/28/01 ............................... CAD 60,000 40,599
U.S. Treasury Inflation Index Notes
3.375% 1/15/07 ............................... US$ 561,768 539,298
3.625% 1/15/08 ............................... 741,356 719,115
U.S. Treasury Notes
5.75% 8/15/03 ................................ 750,000 737,344
6.25% 2/15/07 ................................ 250,000 250,313
----------
2,555,423
----------
Total Bonds (cost $18,328,144) .................. 16,609,781
----------

Global Bond-1

<PAGE>

Global Bond Series
Statement of Net Assets (Continued)

Market
Principal Value
Amount* (U.S. $)
REPURCHASE AGREEMENTS-0.50%
With J.P. Morgan Securities 6.40% 7/3/00
(dated 6/30/00, collateralized by
$17,400 U.S. Treasury Notes
5.875% due 11/15/04, market value
$17,263 and $11,200
U.S. Treasury Notes 7.875% due
11/15/04, market value $11,978) .............. $28,650 $28,650
With PaineWebber 6.50% 7/3/00
(dated 6/30/00, collateralized by
$7,000 U.S. Treasury Notes
5.25% due 5/31/01, market value
$6,912 and $5,500
U.S. Treasury Notes 6.25% due
10/31/01, market value
$5,531 and $7,800
U.S. Treasury Notes 6.125% due
12/31/01, market value
$7,787 and $8,700
U.S. Treasury Notes 7.25% due
5/15/04, market value $9,047) ................ 28,700 28,700

Market
Principal Value
Amount* (U.S. $)
REPURCHASE AGREEMENTS (Continued)
With Prudential Securities 6.50% 7/3/00
(dated 6/30/00, collateralized by
$7,800 U.S. Treasury Notes 4.50% due
9/30/00, market value $7,883 and
$2,200 U.S. Treasury Notes 4.625% due
11/30/00, market value $2,223 and
$7,800 U.S. Treasury Notes 15.75% due
11/15/01, market value $8,915 and
$8,700 U.S. Treasury Notes 11.875% due
11/15/03, market value $10,252) .............. $28,650 $28,650
-------
Total Repurchase Agreements
(cost $86,000) ............................... 86,000
-------

<PAGE>

TOTAL MARKET VALUE OF SECURITIES-97.34% (cost $18,414,144) ........ $16,695,781

RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-2.66% ............. 455,544
-----------
NET ASSETS APPLICABLE TO 1,807,851 SHARES OUTSTANDING-100.00% ..... $17,151,325
===========
NET ASSET VALUE-GLOBAL BOND SERIES STANDARD CLASS
($17,146,155 / 1,807,306 SHARES) ............................... $9.49
=====
NET ASSET VALUE-GLOBAL BOND SERIES SERVICE CLASS
($5,170 / 545 SHARES) .......................................... $9.49
=====
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization - no par) .. $19,197,985
Undistributed net investment income ** ............................ 44,445
Accumulated net realized loss on investments ...................... (363,715)
Net unrealized depreciation of investments and foreign currencies . (1,727,390)
-----------
Total net assets .................................................. $17,151,325
===========
-------------------
*Principal amount is stated in the currency in which each bond is denominated.
AUD - Australian Dollar
CAD - Canadian Dollar
DEM - German Deutsche Mark
EUR - European Monetary Unit
NZD - New Zealand Dollar
US$ - U. S. Dollar
ZAR - South African Rand

**Undistributed net investment income includes net realized gains (losses) on
foreign currencies. Net realized gains (losses) on foreign currencies are
treated as net investment income in accordance with provisions of the Internal
Revenue Code.

See accompanying notes

Global Bond-2
<PAGE>

Delaware Group Premium Fund-Global Bond Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Interest ....................................................... $595,471
--------
595,471
--------
EXPENSES:
Management fees ................................................ 67,567
Accounting and administration .................................. 3,700
Custodian fees ................................................. 2,561
Reports and statements to shareholders ......................... 790
Dividend disbursing and transfer agent
fees and expenses ........................................... 557
Trustees' fees ................................................. 386
Taxes (other than taxes on income) ............................. 225
Professional fees .............................................. 200
Registration fees .............................................. 200
Distribution expense - Service Class ........................... 1
Other .......................................................... 748
--------
76,935
Less expenses paid indirectly .................................. (267)
--------
Total expenses ................................................. 76,668
--------
NET INVESTMENT INCOME .......................................... 518,803
--------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCIES:
Net realized loss on:
Investments ................................................. (188,693)
Foreign currencies .......................................... (462,855)
--------
Net realized loss .............................................. (651,548)
Net change in unrealized appreciation / depreciation
of investments and foreign currencies ....................... (216,925)
--------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCIES .......................... (868,473)
--------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............................................. ($349,670)
========
See accompanying notes

<PAGE>

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

Six Months
Ended Year
6/30/00 Ended
(Unaudited) 12/31/99
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ............................. $ 518,803 $ 1,228,010
Net realized loss on investments
and foreign currencies ......................... (651,548) (479,448)
Net change in unrealized appreciation /
depreciation on investments and
foreign currencies ............................. (216,925) (1,541,203)
----------- -----------
Net decrease in net assets
resulting from operations ...................... (349,670) (792,641)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class ................................. (153,893) (1,084,242)
Service Class .................................. - -
Net realized gain on investments:
Standard Class ................................. - (128,140)
Service Class .................................. - -
----------- -----------
(153,893) (1,212,382)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ................................. 1,106,530 4,466,372
Service Class .................................. 5,000 -
Net asset value of shares issued upon
reinvestment of distributions from net
investment income and net realized
gain on investments:
Standard Class ................................. 153,893 1,212,382
Service Class .................................. - -
----------- -----------
1,265,423 5,678,754
----------- -----------
Cost of shares repurchased:
Standard Class ................................. (3,841,391) (5,154,045)
Service Class .................................. - -
----------- -----------
(3,841,391) (5,154,045)
----------- -----------
Increase (decrease) in net assets derived
from capital share transactions ................ (2,575,968) 524,709
----------- -----------
NET DECREASE IN NET ASSETS ........................ (3,079,531) (1,480,314)
----------- -----------
NET ASSETS:
Beginning of period ............................... 20,230,856 21,711,170
----------- -----------
End of period ..................................... $17,151,325 $20,230,856
=========== ===========

See accompanying notes

Global Bond-3

<PAGE>

Delaware Group Premium Fund-Global Bond Series
Financial Highlights

Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Global Bond Series Standard Class
Six Months 5/2/96(2)
Ended 6/30/00(1) Year Ended December 31, to
(Unaudited) 1999 1998 1997 12/31/96
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................... $ 9.730 $10.680 $10.500 $10.960 $10.000

Income (loss) from investment operations:
Net investment income(3) ............................... 0.277 0.576 0.608 0.636 0.339
Net realized and unrealized gain (loss) on
investments and foreign currencies .................. (0.436) (0.950) 0.182 (0.551) 0.831
------- ------- ------- ------- -------
Total from investment operations ....................... (0.159) (0.374) 0.790 0.085 1.170
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................... (0.081) (0.514) (0.600) (0.460) (0.210)
Distributions from net realized gain on investments .... none (0.062) (0.010) (0.085) none
------- ------- ------- ------- -------
Total dividends and distributions ...................... (0.081) (0.576) (0.610) (0.545) (0.210)
------- ------- ------- ------- -------
Net asset value, end of period ......................... $ 9.490 $ 9.730 $10.680 $10.500 $10.960
======= ======= ======= ======= =======
Total return ........................................... (1.63%) (3.60%) 7.82% 0.88% 11.79%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $17,146 $20,231 $21,711 $16,876 $ 9,471
Ratio of expenses to average net assets ................ 0.85% 0.85% 0.83% 0.80% 0.80%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ..... 0.85% 0.85% 0.92% 1.08% 1.19%
Ratio of net investment income to average net assets ... 5.76% 5.64% 5.83% 6.03% 6.51%
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly ..................................... 5.76% 5.64% 5.74% 5.75% 6.12%
Portfolio turnover ..................................... 58% 100% 79% 97% 56%
</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 for the period ended June 30, 2000 and the years ended
December 31, 1997, 1998 and 1999 was based on the average shares outstanding
method.

See accompanying notes

Global Bond-4

<PAGE>

Delaware Group Premium Fund-Global Bond Series
Financial Highlights (Continued)

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

Global Bond Series Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
---------------------------------

Net asset value, beginning of period ......... $9.180

Income from investment operations:
Net investment income(2) ..................... 0.089
Net realized and unrealized gain on
investments and foreign currencies ......... 0.221
------
Total from investment operations ............. 0.310
------

Less dividends and distributions:
Dividends from net investment income ......... none
Distributions from net realized
gain on investments ........................ none
------
Total dividends and distributions ............ none
------
Net asset value, end of period ............... $9.490
======
Total return ................................. 3.38%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ...... $ 5
Ratio of expenses to average net assets ...... 1.00%
Ratio of expenses to average net assets
prior to expense limitation and expenses
paid indirectly ............................ 1.00%
Ratio of net investment income to average
net assets ................................. 5.61%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly ............... 5.61%
Portfolio turnover ........................... 58%

(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Per share information was based on the average shares outstanding method.

See accompanying notes

Global Bond-5

<PAGE>

Delaware Group Premium Fund-Global Bond Series
Notes to Financial Statements
June 30, 1999
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Global Bond
Series (the "Series"). The Series is a non-diversified open-end investment
company under the Investment Company Act of 1940, as amended. The Series offers
two classes of shares. The Standard Class shares do not carry a 12b-1 fee and
the Service class shares do carry a 12b-1 fee. The shares of the Fund are sold
only to separate accounts of life insurance companies.

The investment objective of the Series is to seek current income consistent with
the preservation of principal. It attempts to achieve this objective by
investing primarily in fixed income securities from at least three different
countries, one of which may be the United States, that may also provide the
potential for capital appreciation.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--Securities listed on a foreign exchange are valued at the
last quoted sales price before the Series is valued. Long-term debt securities
are valued by an independent pricing service and such prices are believed to
reflect the fair value of such securities. Money market instruments having less
than 60 days to maturity are valued at amortized cost, which approximates market
value. Other securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith under the
direction of the Fund's Board of Trustees.

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 daily. Transaction gains or losses resulting from changes in exchange
rates during the reporting period or upon settlement of the foreign currency
transaction are reported in operations for the current period. The Series
isolates that portion of gains and losses on investments in debt securities
which are due to changes in the foreign exchange rate from that which are due to
changes in market prices of debt securities. The Series reports certain foreign
currency related transactions as components of realized gains (losses) for
financial reporting purposes, whereas such components are treated as ordinary
income (loss) for federal income tax purposes.

<PAGE>

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

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $208 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $59 for the period ended June 30, 2000. 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".

Global Bond-6

<PAGE>

Global Bond Series
Notes to Financial Statements (Continued)

2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Series
pays Delaware International Advisers Ltd. (DIAL), the Investment Manager of the
Series, an annual fee which is calculated at the following rates: 0.75% 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.

DIAL has elected to waive its fee and reimburse the Series to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and distribution
expenses, do not exceed 0.85% of average daily net assets of the Series through
April 30, 2001. No reimbursement was due for the period ended June 30, 2000.

On June 30, 2000, the Series had liabilities payable to affiliates as follows:

Dividend disbursing
Investment transfer agent,
management accounting fees
fee payable to and other expenses
DIAL payable to DSC
-------------- -------------------
$10,601 $779

Certain officers of DMC, DSC, DIAL and DDLP are officers, trustees and/or
employees of the Fund. These officers, trustees and employees are paid no
compensation by the Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases ....................................... $5,050,277
Sales ........................................... $6,951,553

For federal income tax purposes, the Series had accumulated capital losses at
June 30, 2000 as follows:

Year of
expiration
2007
----------
$147,409

Global Bond-7
<PAGE>
Global Bond Series
Notes to Financial Statements (Continued)

4. Capital Shares
Transactions in capital shares were as follows:
Period Year
ended ended
6/30/00 12/31/99
------- --------
Shares sold:
Standard Class .................................... 116,788 433,476
Service Class ..................................... 545 -

Shares issued upon reinvestment of distributions
from net investment income and
net realized gain on investments:
Standard Class .................................... 16,267 119,782
Service Class ..................................... - -
-------- --------
133,600 553,258
Shares repurchased:
Standard Class .................................... (405,625) (506,787)
Service Class ..................................... - -
-------- --------
(405,625) (506,787)
-------- --------
Net increase (decrease) .............................. (272,025) 46,471
======== ========

There were no forward foreign currency exchange contracts outstanding at June
30, 2000.

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 portion 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, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The relative
illiquidity of some of these securities may adversely affect the Series' ability
to dispose of such securities in a timely manner and at a fair price when it is
necessary to liquidate such securities.

Global Bond-8
<PAGE>

Delaware Group Premium Fund-Growth and Income Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Number of Market
Shares Value
COMMON STOCK-99.69%
Aerospace & Defense-0.96%
Boeing ................................. 86,900 $ 3,633,506
-----------
3,633,506
-----------
Automobiles & Automotive Parts-2.97%
General Motors ......................... 94,700 5,498,519
Rockwell International ................. 66,700 2,101,050
TRW .................................... 84,500 3,665,188
-----------
11,264,757
-----------
Banking, Finance & Insurance-24.11%
American General ....................... 148,800 9,076,800
Aon .................................... 259,387 8,057,209
Bank of America ........................ 139,711 6,007,573
Bank of New York ....................... 167,300 7,779,450
Chase Manhattan ........................ 176,550 8,132,334
Federal National Mortgage .............. 187,900 9,806,031
Fleet Boston Financial ................. 213,500 7,259,000
Marsh & McLennan ....................... 95,200 9,942,450
MBNA ................................... 180,200 4,887,925
Mellon Financial ....................... 237,000 8,635,688
Morgan (J.P.) .......................... 19,700 2,169,463
*PNC Financial Services Group ........... 56,400 2,643,750
*Wells Fargo ............................ 93,300 3,615,375
XL Capital Limited - Class A ........... 65,900 3,566,838
-----------
91,579,886
-----------
Cable, Media & Publishing-3.92%
*Gannett ................................ 65,700 3,929,681
McGraw-Hill ............................ 203,200 10,972,800
-----------
14,902,481
-----------
Chemicals-3.51%
Dow Chemical ........................... 130,200 3,930,413
+Imperial Chemical ADR .................. 201,400 6,205,638
*Rohm & Haas ............................ 92,600 3,194,700
-----------
13,330,751
-----------
Computers & Technology-3.50%
Minnesota Mining & Manufacturing ....... 39,500 3,258,750
Pitney Bowes ........................... 250,500 10,020,000
-----------
13,278,750
-----------
Consumer Products-3.60%
Avon Products .......................... 125,100 5,566,950
+Clorox ................................. 180,900 8,106,581
-----------
13,673,531
-----------
Electronics & Electrical Equipment-2.62%
Eaton .................................. 83,300 5,581,100
Emerson Electric ....................... 72,600 4,383,225
-----------
9,964,325
-----------
Energy-14.08%
Baker Hughes ........................... 200,400 6,412,800
Chevron ................................ 107,300 9,100,381
Conoco Class B ......................... 206,823 5,080,090

<PAGE>
Number of Market
Shares Value
COMMON STOCK (Continued)
Energy (Continued)
+El Paso Energy ................... 166,100 $8,460,719
Exxon Mobil ...................... 124,653 9,785,261
Royal Dutch Petroleum ............ 158,600 9,763,813
Williams ......................... 116,900 4,873,269
-----------
53,476,333
-----------
Food, Beverage & Tobacco-6.85%
Anheuser-Busch ................... 90,900 6,789,094
General Mills .................... 148,500 5,680,125
PepsiCo .......................... 231,400 10,282,838
*Ralston-Ralston Purina ........... 163,800 3,265,763
-----------
26,017,820
-----------
Healthcare & Pharmaceuticals-9.83%
*Abbott Laboratories .............. 144,900 6,457,106
American Home Products ........... 185,800 10,915,750
AstraZenca ADR ................... 91,600 4,259,400
*Baxter International ............. 118,500 8,332,031
Bristol-Myers Squibb ............. 126,900 7,391,925
-----------
37,356,212
-----------
Industrial Machinery-3.56%
Caterpillar ...................... 144,300 4,888,163
Deere & Company .................. 130,200 4,817,400
*Honeywell International .......... 113,600 3,826,900
-----------
13,532,463
-----------
Metals & Mining-2.56%
Alcoa ............................ 335,000 9,715,000
-----------
9,715,000
-----------
Paper & Forest Products-4.33%
International Paper .............. 194,267 5,791,585
Kimberly-Clark ................... 139,200 7,986,600
Weyerhaeuser ..................... 62,000 2,666,000
-----------
16,444,185
-----------
Telecommunications-8.37%
ALLTEL ........................... 106,400 6,590,150
A T & T .......................... 84,300 2,665,988
+Cable & Wireless ADR ............. 97,700 4,891,106
GTE .............................. 158,500 9,866,625
SBC Communications ............... 179,524 7,764,413
-----------
31,778,282
-----------
Utilities-4.92%
Dominion Resources ............... 115,700 4,960,638
Duke Energy ...................... 69,800 3,934,975
P G & E .......................... 157,800 3,885,825
TXU .............................. 200,100 5,902,950
-----------
18,684,388
-----------
Total Common Stock
(cost $361,445,268) .............. 378,632,670
-----------

Growth and Income-1
<PAGE>
Growth and Income Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
REPURCHASE AGREEMENTS-0.88%
With J.P. Morgan Securities
6.40% 7/3/00 (dated 6/30/00,
collateralized by $677,000
U.S. Treasury Notes 5.875%
due 11/15/04, market value
$672,061 and $436,000 U.S.
Treasury Notes 7.875% due
11/15/04, market value $466,305).............. $1,115,000 $1,115,000
With PaineWebber 6.50% 7/3/00
(dated 6/30/00, collateralized by
$271,000 U.S. Treasury Notes 5.25%
due 5/31/01, market value $269,088
and $214,000 U.S. Treasury Notes
6.25% due 10/31/01, market value
$215,326 and $305,000 U.S.
Treasury Notes 6.125% due
12/31/01, market value $303,148
and $338,000 U.S. Treasury Notes
7.25% due 5/15/04, market value
$352,193) .................................... 1,116,000 1,116,000

Principal Market
Amount Value
REPURCHASE AGREEMENTS (Continued)
With Prudential Securities
6.50% 7/3/00 (dated 6/30/00,
collateralized by $305,000 U.S.
Treasury Notes 4.50% due 9/30/00,
market value $306,896 and $87,000
U.S. Treasury Notes 4.625% due
11/30/00, market value $86,546 and
$305,000 U.S. Treasury Notes
15.75% due 11/15/01, market value
$347,066 and $338,000 U.S.
Treasury Notes 11.875% due
11/15/03, market value $399,109).............. $1,117,000 $1,117,000
----------
Total Repurchase Agreements
(cost $3,348,000) ............................ 3,348,000
----------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES-100.57% (cost $364,793,268) ................................... $381,980,670

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(0.57%) ........................................ (2,169,000)
------------
NET ASSETS APPLICABLE TO 26,438,975 SHARES OUTSTANDING-100.00% ................................. $379,811,670
============

NET ASSET VALUE-GROWTH & INCOME SERIES STANDARD CLASS ($379,806,728 / 26,438,631 SHARES) ....... $14.37
======
NET ASSET VALUE-GROWTH & INCOME SERIES SERVICE CLASS ($4,942 / 344 SHARES) ..................... $14.37
======
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization - no par)................................ $419,913,173
Undistributed net investment income ............................................................ 1,254,017
Accumulated net realized loss on investments ................................................... (58,542,922)
Net unrealized appreciation of investments ..................................................... 17,187,402
------------
Total net assets ............................................................................... $379,811,670
============
</TABLE>
-------------
* Non-income producing security for the period ended June 30, 2000.

ADR-American Depositary Receipt

+ Security is partially or fully on loan.

See accompanying notes

Growth and Income-2
<PAGE>
Delaware Group Premium Fund-
Growth and Income Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Dividends ............................. $ 5,152,650
Interest .............................. 171,974
------------
5,324,624
------------

EXPENSES:
Management fees ....................... 1,253,422
Accounting and administration ......... 102,438
Professional fees ..................... 20,893
Dividend disbursing and transfer agent
fees and expenses .................. 15,689
Custodian fees ........................ 14,486
Taxes (other than taxes on income) .... 13,240
Reports and statements to shareholders 7,600
Trustees' fees ........................ 5,737
Distribution expense - Service Class .. 1
Other ................................. 13,606
------------
1,447,112

Less expenses paid indirectly ......... (4,831)
------------
Total expenses ........................ 1,442,281
------------

NET INVESTMENT INCOME ................. 3,882,343
------------

NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized loss on investments ...... (44,619,905)
Net change in unrealized appreciation /
depreciation of investments ........ 9,273,692
------------

NET REALIZED AND UNREALIZED LOSS
ON INVESTMENTS ..................... (35,346,213)
------------

NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS .................... ($31,463,870)
============

See accompanying notes

<PAGE>

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

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ............................... 28,906,139 48,519,273
Service Class ................................ 4,999 --
Net asset value of shares issued upon
reinvestment of distributions from net
investment income and net realized
gain on investments:
Standard Class ............................... 40,782,604 55,043,340
Service Class ................................ 34 --
------------ ------------
69,693,776 103,562,613
------------ ------------
Cost of shares repurchased:
Standard Class ............................... (119,564,052) (109,895,317)
Service Class ................................ -- --
------------ ------------
(119,564,052) (109,895,317)
------------ ------------
Decrease in net assets derived from capital
share transactions ........................... (49,870,276) (6,332,704)
------------ ------------

NET DECREASE IN NET ASSETS ...................... (122,116,784) (77,978,243)
------------ ------------

NET ASSETS:
Beginning of period ............................. 501,928,454 579,906,697
------------ ------------
End of period ................................... $379,811,670 $501,928,454
============ ============

See accompanying notes

Growth and Income-3

<PAGE>
Delaware Group Premium Fund-Growth and Income Series
Financial Highlights

Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Growth and Income Series Standard Class
Six Months
Ended 6/30/00(1) Year Ended December 31,
(Unaudited) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $17.020 $19.420 $18.800 $15.980 $14.830 $11.480

Income (loss) from investment operations:
Net investment income(2) ................................ 0.144 0.323 0.361 0.324 0.377 0.416
Net realized and unrealized gain (loss)
on investments ....................................... (1.237) (0.882) 1.636 4.216 2.398 3.574
------- ------- ------- ------- ------- -------
Total from investment operations ........................ (1.093) (0.559) 1.997 4.540 2.775 3.990
------- ------- ------- ------- ------- -------

Less dividends and distributions:
Dividends from net investment income .................... (0.125) (0.361) (0.327) (0.370) (0.420) (0.430)
Distributions from net realized gain
on investments ....................................... (1.432) (1.480) (1.050) (1.350) (1.205) (0.210)
------- ------- ------- ------- ------- -------
Total dividends and distributions ....................... (1.557) (1.841) (1.377) (1.720) (1.625) (0.640)
------- ------- ------- ------- ------- -------

Net asset value, end of period .......................... $14.370 $17.020 $19.420 $18.800 $15.980 $14.830
======= ======= ======= ======= ======= =======

Total return ............................................ (6.24%) (2.98%) 11.35% 31.00% 20.72% 36.12%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $379,807 $501,928 $579,907 $401,402 $166,647 $109,003
Ratio of expenses to average net assets ................. 0.69% 0.71% 0.71% 0.71% 0.67% 0.69%
Ratio of net investment income to average net assets .... 1.86% 1.75% 2.00% 2.02% 2.66% 3.24%
Portfolio turnover ...................................... 87% 92% 81% 54% 81% 85%
</TABLE>
-------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Per share information for the period ended June 30, 2000 was based on the
average shares outstanding method.

See accompanying notes

Growth and Income-4
<PAGE>

Delaware Group Premium Fund-Growth and Income Series
Financial Highlights (Continued)

Selected data for each share of the Series outstanding throughout the period was
as follows:
<TABLE>
<CAPTION>
Growth and Income Series Standard Class
5/1/00(1)
to
6/30/00
(Unaudited)
---------------------------------------
<S> <C>
Net asset value, beginning of period ...................... $14.640

Income (loss) from investment operations:
Net investment income(2) .................................. 0.051
Net realized and unrealized loss on investments ........... (0.221)
-------
Total from investment operations .......................... (0.170)
-------

Less dividends and distributions:
Dividends from net investment income ...................... (0.100)
Distributions from net realized gain on investments ....... none
-------
Total dividends and distributions ......................... (0.100)
-------

Net asset value, end of period ............................ $14.370
=======

Total return .............................................. (1.18%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $5
Ratio of expenses to average net assets ................... 0.84%
Ratio of net investment income to average net assets ...... 1.71%
Portfolio turnover ........................................ 87%
</TABLE>
--------------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Per share information was based on the average shares outstanding method.

See accompanying notes

Growth and Income-5
<PAGE>
Delaware Group Premium Fund-Growth and Income Series
Notes to Financial Statements
June 30, 2000 (Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Growth and
Income Series (the "Series"). The Series is a diversified open-end investment
company under the Investment Company Act of 1940, as amended. The Series offers
two classes of shares. The Standard Class shares do not carry a 12b-1 fee and
the Service class shares do carry a 12b-1 fee. The shares of the Fund are sold
only to separate accounts of life insurance companies.

The objective of the Series is to seek the highest possible total rate of return
by selecting securities that offer the potential for capital appreciation while
providing higher than average dividend income.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. 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 under the direction of the Fund's Board of Trustees.

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $4,831 for the period ended June 30, 2000. 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
credits for the period ended June 30, 2000. 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".

<PAGE>

Growth and Income-6
<PAGE>
Growth and Income Series
Notes to Financial Statements (Continued)

On June 30, 2000, 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
-------------- -------------------
$197,479 $16,975

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases ..................................... $180,377,880
Sales ......................................... $257,961,828

4. Capital Shares
Transactions in capital shares were as follows:

Period Year
ended ended
6/30/00 12/31/99
------- --------
Shares sold:
Standard Class .................................... 1,939,670 2,609,244
Service Class ..................................... 342 -

Shares issued upon reinvestment of distributions
from net investment income and net realized
gain on investments:
Standard Class .................................... 2,875,757 3,149,796
Service Class ..................................... 2 -
---------- ----------
4,815,771 5,759,040
Shares repurchased:
Standard Class .................................... (7,863,621) (6,128,772)
Service Class ..................................... - -
---------- ----------
(7,863,621) (6,128,772)
---------- ----------
Net decrease ......................................... (3,047,850) (369,732)
========== ==========

Growth and Income-7
<PAGE>

Growth and Income Series
Notes to Financial Statements (Continued)

6. 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. 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, 2000 were as follows:

Market value
of securities Market value
on loan of collateral
------------- -------------
$12,337,867 $12,615,200

Net income from securities lending activities for the period ended June 30, 2000
was $38,776 and is included in interest income on the Statement of Operations.

Growth and Income-8

<PAGE>
Delaware Group Premium Fund-Growth Opportunities Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Number of Market
Shares Value
COMMON STOCK-94.14%
Banking, Finance & Insurance-6.47%
Ambac Financial Group ........................ 26,400 $ 1,447,050
Capital One Financial ........................ 30,800 1,374,450
*+CompuCredit .................................. 118,700 3,561,000
Heller Financial ............................. 176,900 3,626,450
Zions ........................................ 114,400 5,249,888
-----------
15,258,838
-----------
Business Services-6.34%
+Cintas ....................................... 120,400 4,417,175
*Convergys .................................... 113,500 5,887,813
Fiserv ....................................... 107,100 4,632,075
-----------
14,937,063
-----------
Cable, Media & Publishing-7.21%
*AMFM ......................................... 48,400 3,339,600
*Clear Channel Communications ................. 79,961 5,997,075
*EchoStar Communications Class A .............. 86,800 2,873,894
*Hispanic Broadcasting ........................ 81,800 2,709,625
*+Lamar Advertising ............................ 48,100 2,083,331
-----------
17,003,525
-----------
Computers & Technology-11.75%
*12 Technologies .............................. 32,340 3,371,950
*Extreme Networks ............................. 86,600 9,136,300
*Peregrine Systems ............................ 158,500 5,497,969
*+Veritas Software ............................. 85,750 9,691,090
-----------
27,697,309
-----------
Consumer Products-2.46%
*Gemstar International Group Limited .......... 94,200 5,788,884
-----------
5,788,884
-----------
Electronics & Electrical Equipment-21.38%
*Altera ....................................... 65,300 6,656,519
*Applied Materials ............................ 53,600 4,857,500
*Burr-Brown ................................... 46,400 4,022,300
*E-Tek Dynamics ............................... 21,500 5,671,969
*JDS Uniphase ................................. 74,000 8,870,750
*PMC-Sierra ................................... 57,200 10,163,725
*Xilinx ....................................... 123,100 10,163,444
-----------
50,406,207
-----------

<PAGE>

Number of Market
Shares Value
COMMON STOCK (Continued)
Healthcare & Pharmaceuticals-2.07%
*Genentech .................................... 28,400 $ 4,884,800
-----------
4,884,800
-----------
Leisure, Lodging & Entertainment-4.30%
*Brinker International ........................ 202,600 5,926,050
*Premier Parks ................................ 184,600 4,199,650
-----------
10,125,700
-----------
Retail-14.54%
*Bed Bath & Beyond ............................ 99,900 3,621,375
*Best Buy ..................................... 37,000 2,340,250
*Dollar Tree Stores ........................... 63,150 2,498,372
Intimate Brands .............................. 191,900 3,790,025
*Jack in the Box .............................. 99,200 2,442,800
*Kohl's ....................................... 158,200 8,799,875
Nordstrom .................................... 88,000 2,123,000
*Outback Steakhouse ........................... 110,100 3,220,425
*Staples ...................................... 40,200 618,075
*Starbucks .................................... 126,100 4,815,444
-----------
34,269,641
-----------
Telecommunications-15.75%
*Amdocs Limited ............................... 23,700 1,818,975
*+American Tower-Class A ....................... 146,800 6,119,725
*Ciena ........................................ 35,300 5,884,069
*Crown Castle ................................. 50,800 1,854,200
*GT Group Telecom-Class B ..................... 91,600 1,448,425
*+McLeodUSA-Class A ............................ 207,300 4,288,519
*Network Appliance ............................ 119,200 9,595,600
*NEXTLINK Communications-Class A .............. 101,600 3,854,450
*Time Warner
Telecommunications-Class A ................... 35,300 2,272,435
-----------
37,136,398
-----------
Miscellaneous-1.87%
PerkinElmer .................................. 66,600 4,403,925
-----------
4,403,925
-----------
Total Common Stock
(cost $133,050,273) ......................... 221,912,290
-----------

Growth Opportunities-1

<PAGE>
Growth Opportunities Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
REPURCHASE AGREEMENTS-6.22%
With J.P. Morgan Securities 6.40% 7/3/00
(dated 6/30/00, collateralized by $2,965,000
U.S. Treasury Notes 5.875% due 11/15/04,
market value $2,944,584 and $1,911,000
U.S. Treasury Notes 7.875% due 11/15/04,
market value $2,043,078) ........................ $4,885,000 $4,885,000
With PaineWebber 6.50% 7/3/00 (dated 6/30/00,
collateralized by $1,186,000 U.S. Treasury
Notes 5.25% due 5/31/01, market value
$1,178,988 and $937,000 U.S. Treasury Notes
6.25% due 10/31/01, market value $943,436 and
$1,334,000 U.S. Treasury Notes 6.125% due
12/31/01, market value $1,328,217 and
$1,483,000 U.S. Treasury Notes 7.25% due
5/15/04, market value $1,543,107) ............... 4,892,000 4,892,000

Principal Market
Amount Value
REPURCHASE AGREEMENTS (Continued)
With Prudential Securities 6.50% 7/3/00
(dated 6/30/00, collateralized by $1,334,000
U.S. Treasury Notes 4.50% due 9/30/00, market
value $1,344,639 and $380,000 U.S. Treasury
Notes 4.625% due 11/30/00, market value
$379,196 and $1,334,000 U.S. Treasury Notes
15.75% due 11/15/01, market value $1,520,641
and $1,483,000 U.S. Treasury Notes 11.875%
due 11/15/03, market value $1,748,664) .......... $ 4,892,000 $ 4,892,000
-----------
Total Repurchase Agreements
(cost $14,669,000) .............................. 14,669,000
-----------

<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES-100.36% (cost $147,719,273) ........................................ 236,581,290

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(0.36%) ............................................. (838,554)
------------
NET ASSETS APPLICABLE TO 8,324,935 SHARES OUTSTANDING-100.00% ....................................... $235,742,736
============
NET ASSET VALUE-GROWTH OPPORTUNITIES SERIES STANDARD CLASS ($231,313,576 / 8,168,524 SHARES) ........ $28.32
======
NET ASSET VALUE-GROWTH OPPORTUNITIES SERIES SERVICE CLASS ($4,429,160 / 156,411 SHARES) ............. $28.32
======
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization-no par) ...................................... $130,712,943
Accumulated net realized gain on investments ........................................................ 16,167,776
Net unrealized appreciation of investments .......................................................... 88,862,017
------------
Total net assets .................................................................................... $235,742,736
============
</TABLE>
-------------
* Non-income producing security for the period ended June 30, 2000.
+ Security is partially or fully on loan.

See accompanying notes

Growth Opportunities-2
<PAGE>
Delaware Group Premium Fund-
Growth Opportunities Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Interest ................................................ $ 406,868
Dividends ............................................... 80,122
-----------
486,990
-----------
EXPENSES:
Management fees ............................................. 896,985
Accounting and administration ............................... 64,551
Reports and statements to shareholders ...................... 13,500
Professional fees ........................................... 10,668
Custodian fees .............................................. 8,073
Taxes (other than taxes on income) .......................... 7,500
Dividend disbursing and transfer agent fees
and expenses ............................................. 3,099
Trustees' fees .............................................. 2,700
Distribution expense-Service Class .......................... 822
Other ....................................................... 5,648
-----------
1,013,546

Less expenses paid indirectly ............................... (5,624)
-----------

Total expenses .............................................. 1,007,922
-----------

NET INVESTMENT LOSS ......................................... (520,932)
-----------

NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments ............................ 16,570,008
Net change in unrealized appreciation / depreciation
of investments ........................................... (350,827)
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS ........................................... 16,219,181
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .......................................... $15,698,249
===========

See accompanying notes
<PAGE>

Delaware Group Premium Fund-
Growth Opportunities Series
Statements of Changes in Net Assets

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments:
Standard Class ......................... (23,169,557) (6,882,148)
Service Class .......................... -- --
------------ ------------
(23,169,557) (6,882,148)
------------ ------------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ......................... 34,646,572 52,179,408
Service Class .......................... 4,238,718 --
Net asset value of shares issued upon
reinvestment of distributions
from net realized gain on investments:
Standard Class ......................... 23,169,557 6,882,148
Service Class .......................... -- --
------------ ------------
62,054,847 59,061,556
------------ ------------

Cost of shares repurchased:
Standard Class ......................... (34,897,549) (48,111,245)
Service Class .......................... (5,099) --
------------ ------------
(34,902,648) (48,111,245)
------------ ------------
Increase in net assets derived from capital
share transactions ..................... 27,152,199 10,950,311
------------ ------------

NET INCREASE IN NET ASSETS ................ 19,680,891 85,514,146
------------ ------------

NET ASSETS:
Beginning of period ....................... 216,061,845 130,547,699
------------ ------------
End of period ............................. $235,742,736 $216,061,845
============ ============

See accompanying notes

Growth Opportunities-3

<PAGE>
Delaware Group Premium Fund-Growth Opportunities Series
Financial Highlights

Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Growth Opportunities Series Standard Class
Six Months
Ended
6/30/00(1) Year Ended December 31,
(Unaudited) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $28.550 $18.550 $17.270 $15.890 $15.130 $11.750

Income (loss) from investment operations:
Net investment income (loss)(2) .......................... (0.065) (0.055) (0.026) (0.010) (0.015) 0.072
Net realized and unrealized gain on investments .......... 2.830 11.055 2.901 2.260 2.030 3.378
------- ------- ------- ------- ------- -------
Total from investment operations ......................... 2.765 11.000 2.875 2.250 2.015 3.450
------- ------- ------- ------- ------- -------

Less dividends and distributions:
Dividends from net investment income ..................... none none none none (0.070) (0.070)
Distributions from net realized gain on investments ...... (2.995) (1.000) (1.595) (0.870) (1.185) none
------- ------- ------- ------- ------- -------
Total dividends and distributions ........................ (2.995) (1.000) (1.595) (0.870) (1.255) (0.070)
------- ------- ------- ------- ------- -------

Net asset value, end of period ........................... $28.320 $28.550 $18.550 $17.270 $15.890 $15.130
======= ======= ======= ======= ======= =======

Total return ............................................. 7.99% 62.94% 18.81% 14.90% 14.46% 29.53%

Ratios and supplemental data:
Net assets, end of year (000 omitted) .................... $231,314 $216,062 $130,548 $110,455 $79,900 $58,123
Ratio of expenses to average net assets .................. 0.85% 0.82% 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% 0.82% 0.86% 0.87% 0.82% 0.85%
Ratio of net investment income (loss) to average
net assets ............................................ (0.44%) (0.27%) (0.16%) (0.06%) (0.11%) 0.61%
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly .............................. (0.44%) (0.27%) (0.22%) (0.13%) (0.13%) 0.56%
Portfolio turnover ....................................... 121% 132% 142% 134% 85% 73%
</TABLE>
-----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Per share information for the period ended June 30, 2000 and the years ended
December 31, 1997, 1998 and 1999 was based on the average shares outstanding
method.

See accompanying notes

Growth Opportunities-4
<PAGE>
Delaware Group Premium Fund-Growth Opportunities Series
Financial Highlights (Continued)

Selected data for each share of the Series outstanding throughout the period was
as follows:
<TABLE>
<CAPTION>
Growth Opportunities Series Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
-----------------------------------------
<S> <C>
Net asset value, beginning of period .................................................. $28.020

Income (loss) from investment operations:
Net investment loss(2)................................................................. (0.026)
Net realized and unrealized gain on investments ....................................... 0.326
-------
Total from investment operations ...................................................... 0.300
-------

Less dividends and distributions:
Dividends from net investment income .................................................. none
Distributions from net realized gain on investments ................................... none
-------
Total dividends and distributions ..................................................... none
-------

Net asset value, end of period ........................................................ $28.320
=======
Total return .......................................................................... 1.07%

Ratios and supplemental data:
Net assets, end of year (000 omitted) ................................................. $4,429
Ratio of expenses to average net assets ............................................... 1.00%
Ratio of expenses to average net assets prior to expense limitation and expenses
paid indirectly ..................................................................... 1.00%
Ratio of net investment loss to average net assets .................................... (0.59%)
Ratio of net investment loss to average net assets prior to expense limitation and
expenses paid indirectly ............................................................ (0.59%)
Portfolio turnover .................................................................... 121%
</TABLE>
-----------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Per share information was based on the average shares outstanding method.

See accompanying notes

Growth Opportunities-5
<PAGE>
Delaware Group Premium Fund-Growth Opportunities Series
Notes to Financial Statements
June 30, 2000 (Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Growth
Opportunities Series (the "Series"). The Series is a diversified open-end
investment company under the Investment Company Act of 1940, as amended. The
Series offers two classes of shares. The Standard Class shares do not carry a
12b-1 fee and the Service class shares do carry a 12b-1 fee. The shares of the
Fund are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek long-term capital appreciation
by investing its assets in a diversified portfolio of securities exhibiting the
potential for significant growth.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. 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 under the direction of the Fund's Board of Trustees.

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $2,760 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $2,864 for the period ended June 30, 2000. 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".

<PAGE>

DMC has elected to waive its fee and reimburse the Series to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and distribution
expenses, do not exceed 0.85% of average daily net assets of the Series through
April 30, 2001. No reimbursement was due for the period ended June 30, 2000.

Growth Opportunities-6
<PAGE>
Growth Opportunities Series
Notes to Financial Statements (Continued)

On June 30, 2000, the Series had liabilities payable to affiliates as follows:

Dividend disbursing
Investment transfer agent,
management accounting fees Other expenses
fee payable to and other expenses payable to DMC
DMC payable to DSC and affiliates
-------------- ------------------- --------------
$144,619 $1,572 $12,296

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases .............................. $141,239,620
Sales ................................... $136,652,446

4. Capital Shares
Transactions in capital shares were as follows:

Period Year
Ended Ended
6/30/00 12/31/99
------- --------
Shares sold:
Standard Class .............................. 1,152,077 2,424,830
Service Class ............................... 156,605 --

Shares issued upon reinvestment of distributions
from net realized gain on investments:
Standard Class .............................. 685,895 404,119
Service Class ............................... -- --
---------- ----------
1,994,577 2,828,949
Shares repurchased:
Standard Class .............................. (1,237,847) (2,296,410)
Service Class ............................... (194) --
---------- ----------
(1,238,041) (2,296,410)
---------- ----------
Net increase ................................... 756,536 532,539
========== ==========

6. Credit and Market Risk
The Series invests a significant portion of its assets in small and medium-sized
companies and may be subject to certain risks associated with ownership of
securities of small and medium-sized companies. Investments in smaller companies
may be more volatile than investments in larger companies because of the limited
financial resources of small and medium-sized companies or their dependence on
narrow product lines.

Growth Opportunities-7
<PAGE>

Growth Opportunities Series
Notes to Financial Statements (Continued)

Market value
of securities Market value
on loan of collateral
------------- -------------
$22,500,400 $22,671,101

Net income from securities lending activities for the period ended June 30, 2000
was $53,115 and is included in interest income on the Statement of Operations.

Growth Opportunities-8

<PAGE>

Delaware Group Premium Fund-High Yield Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Principal Market
Amount Value
CORPORATE BONDS-85.25%
Automobiles & Automotive Parts-2.98%
American Axle & Manufacturing
co guarantee 9.75% 3/1/09 ................... $1,840,000 $1,725,000
Venture Holdings sr sub nts
12.00% 6/1/09 ............................... 1,000,000 605,000
----------
2,330,000
----------
Buildings & Materials-3.01%
Formica sr sub nts 10.875% 3/1/09 ............. 800,000 628,000
K.Hovnanian Enterprises
co guarantee 9.125% 5/1/09 .................. 700,000 623,000
Nortek sr nts 9.25% 3/15/07 ................... 500,000 470,000
Toll co guarantee 8.125% 2/1/09 ............... 700,000 633,500
----------
2,354,500
----------
Cable, Media & Publishing-8.17%
Adelphia Communications sr nts
9.375% 11/15/09 ............................. 1,250,000 1,162,500
+Charter Communication Holdings
sr disc nts 11.75% 1/15/10 .................. 1,800,000 1,028,250
Echostar DBS sr nts 9.25% 2/1/06 .............. 625,000 610,938
+PX Escrow sr disc nts 9.625% 2/1/06 ........... 750,000 352,500
Sinclair Broadcast Group sr sub nts
8.75% 12/15/07 .............................. 1,200,000 1,062,000
Sullivan Graphics sr sub nts
12.75% 8/1/05 ............................... 250,000 255,000
Telewest sr nts 9.875% 2/1/10 ................. 1,000,000 935,000
+United International Holdings
sr disc nts 10.75% 2/15/08 .................. 1,400,000 987,000
----------
6,393,188
----------
Chemicals-2.80%
Avecia Group co guarantee
11.00% 7/1/09 ............................... 1,600,000 1,576,000
Huntsman sr sub nts 9.50% 7/1/07 .............. 400,000 366,000
Lyondell Chemical sr sub nts
10.875% 5/1/09 .............................. 250,000 249,375
----------
2,191,375
----------
Computers & Technology-5.82%
Exodus Communications sr nts
10.75% 12/15/09 ............................. 175,000 169,750
Covad Communications sr nts
12.50% 2/15/09 .............................. 750,000 603,750
Crown Castle International sr nts
10.75% 8/1/11 ............................... 750,000 764,063
Dobson Communications sr nts
10.875% 7/1/10 .............................. 1,000,000 1,010,000
Voicestream Wire sr nts
10.375% 11/15/09 ............................ 800,000 832,000
Williams Communications sr nts
10.875% 10/1/09 ............................. 425,000 417,563
Winstar Communications sr nts
12.75% 4/15/10 .............................. 800,000 750,000
----------
4,547,126
----------
Consumer Products-0.32%
Drypers sr nts 10.25% 6/15/07 ................. 275,000 178,750
+Iron Age sr disc nts 12.125% 5/1/09 ........... 500,000 72,500
----------
251,250
----------
<PAGE>

Principal Market
Amount Value
CORPORATE BONDS (Continued)
Electronics & Electrical Equipment-2.73%
Flextronics International sr sub nts
9.875% 7/1/10 ................................. $1,000,000 $1,012,500
Protection One Alarm co guarantee
7.375% 8/15/05 ................................ 1,500,000 1,125,000
----------
2,137,500
----------
Energy-8.06%
Chesapeake Energy co guarantee
9.625% 5/1/05 ................................. 1,100,000 1,072,500
Clark R&M sr sub nts
8.875% 11/15/07 ............................... 300,000 193,500
Clark USA sr nts
10.875% 12/1/05 ............................... 785,000 435,675
First Wave Marine sr nts
11.00% 2/1/08 ................................. 900,000 535,500
Frontier Oil sr nts 11.75% 11/15/09 ............. 1,000,000 1,005,000
Parker Drilling co guarantee
9.75% 11/15/06 ................................ 1,000,000 972,500
RBF Finance co guarantee
11.375% 3/15/09 ............................... 1,250,000 1,362,500
+Universal Compression sr disc nts
9.875% 2/15/08 ................................ 1,000,000 725,000
----------
6,302,175
----------
Environmental Services-1.93%
Allied Waste sr sub nts
10.00% 8/1/09 ................................. 1,300,000 1,092,000
Norcal Waste Systems co guarantee
13.50% 11/15/05 ............................... 400,000 418,000
----------
1,510,000
----------
Food, Beverage & Tobacco-3.12%
Ameriking sr nts 10.75% 12/1/06 ................. 500,000 423,125
Carrols sr sub nts 9.50% 12/1/08 ................ 800,000 672,000
Del Monte Foods sr disc nts
12.50% 12/15/07 ............................... 550,000 411,125
DiGiorgio sr nts 10.00% 6/15/07 ................. 500,000 430,000
Fresh Foods co guarantee
10.75% 6/1/06 ................................. 800,000 500,000
----------
2,436,250
----------
Healthcare & Pharmaceuticals-4.57%
+Alaris Medical sr disc nts
11.125% 8/1/08 ................................ 535,000 84,261
Fisher Scientific International
sr sub nts 9.00% 2/1/08 ....................... 1,850,000 1,702,000
Insight Health Services co guarantee
9.625% 6/15/08 ................................ 700,000 633,500
Kinetic Concepts sr sub nts
9.625% 11/1/07 ................................ 250,000 193,750
Tenet Healthcare sr sub nts
8.625% 1/15/07 ................................ 1,000,000 960,000
----------
3,573,511
----------
Industrial Machinery-0.98%
Blount co guarantee 13.00% 8/1/09 ............... 750,000 768,750
----------
768,750
----------

High Yield-1
<PAGE>

High Yield Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
CORPORATE BONDS (Continued)
Leisure, Lodging & Entertainment-5.89%
Boca Resorts co guarantee
9.875% 4/15/09 .............................. $ 950,000 $ 895,375
Cinemark USA sr sub nts
9.625% 8/1/08 ............................... 800,000 420,000
Hollywood Casino co guarantee
11.25% 5/1/07 ............................... 1,000,000 1,027,500
Hollywood Casino 1st mtg
13.00% 8/1/06 ............................... 450,000 479,250
Hollywood Casino 1st mtg
13.00% 8/1/06 ............................... 550,000 587,125
Mohegan Tribal Gaming sr sub nts
8.75% 1/1/09 ................................ 1,000,000 955,000
Premier Parks sr disc nts
10.00% 4/1/08 ............................... 350,000 239,313
----------
4,603,563
----------
Metals & Mining-3.05%
Jorgensen Earle sr nts 9.50% 4/1/05 ........... 750,000 701,250
P&L Coal Holdings co guarantee
9.625% 5/15/08 .............................. 1,000,000 932,500
WCI Steel sr nts 10.00% 12/1/04 ............... 800,000 748,000
----------
2,381,750
----------
Packaging & Containers-0.97%
+SF Holdings Group sr disc nts
12.75% 3/15/08 .............................. 1,500,000 757,500
----------
757,500
----------
Paper & Forest Products-1.20%
Fibermark sr nts 9.375% 10/15/06 .............. 400,000 386,000
MAXXAM Group sr sec nts
12.00% 8/1/03 ............................... 600,000 556,500
----------
942,500
----------
Retail-2.98%
Advance Stores sr sub nts
10.25% 4/15/08 .............................. 800,000 664,000
Buhrman USA co guarantee
12.25% 11/1/09 .............................. 900,000 949,500
Fleming sr sub nts 10.50% 12/1/04 ............. 800,000 720,000
----------
2,333,500
----------
Telecommunications-24.56%
BTI Telecom sr nts 10.50% 9/15/07 ............. 550,000 421,438
+Call-Net Enterprises sr disc nts
10.80% 5/15/09 .............................. 1,000,000 365,000
Flag Telecom 11.625% 3/30/10 .................. 200,000 195,000
Global Crossing sr nts 9.50% 11/15/09 ......... 600,000 582,000
Globix sr nts 12.50% 2/1/10 ................... 800,000 660,000
Hyperion Telecommunications sr nts
12.25% 9/1/04 ............................... 750,000 761,250
Intermedia Communications sr nts
8.60% 6/1/08 ................................ 800,000 744,000
+KMC Telecom Holdings sr disc nts
12.50% 2/15/08 .............................. 2,500,000 1,187,500
KMC Telecom Holdings sr nts
13.50% 5/15/09 .............................. 400,000 354,000
Level 3 Communications sr nts
9.125% 5/1/08 ............................... 800,000 722,000
<PAGE>

Principal Market
Amount Value
CORPORATE BONDS (Continued)
Telecommunications (Continued)
Metromedia Fiber sr nts
10.00% 11/15/08 ............................. $ 1,350,000 $ 1,336,500
+Microcell Telecommunications
sr disc nts 14.00% 6/1/06 ................... 2,010,000 1,864,275
+Nextel Communications sr disc nts
10.65% 9/15/07 .............................. 1,000,000 790,000
+Nextel Partners sr disc nts
14.00% 2/1/09 ............................... 974,000 676,930
+Nextlink Communications sr disc nts
12.125% 12/1/09 ............................. 1,000,000 580,000
Nextlink Communications sr nts
10.75% 11/15/08 ............................. 800,000 792,000
PSINet sr nts 11.00% 8/1/09 ................... 1,000,000 930,000
RCN sr nts 10.125% 1/15/10 .................... 400,000 335,000
+RCN sr disc nts 11.125% 10/15/07 .............. 1,000,000 630,000
RSL Communications Limited
co guarantee 12.25% 11/15/06 ................ 750,000 543,750
+Telecorp PCS co guarantee
11.625% 4/15/09 ............................. 850,000 558,875
+Teligent sr disc nts 11.50% 3/1/08 ............ 2,475,000 1,163,250
Teligent sr nts 11.50% 12/1/07 ................ 1,000,000 780,000
+Viatel sr disc nts 12.50% 4/15/08 ............. 1,125,000 511,875
Viatel sr nts 11.50% 3/15/09 .................. 391,000 299,115
Worldwide Fiber sr nts 12.00% 8/1/09 .......... 1,500,000 1,425,000
-----------
19,208,758
-----------
Transportation & Shipping-1.21%
Avis Rent A Car co guarantee 11.00% 5/1/09 .... 900,000 942,750
-----------
942,750
-----------
Utilities-0.90%
Trench Electric & Trench co guarantee
10.25% 12/15/07 ............................. 1,000,000 706,250
-----------
706,250
-----------
Total Corporate Bonds
(cost $73,371,149) .......................... 66,672,196
-----------

Number of
Shares
PREFERRED STOCK-3.63%
*Dobson Communications pik ................... 3,378 336,659
*Eagle-Picher Holdings pik ................... 9,000 227,250
*Intermedia Communications pik ............... 6,412 620,343
*Nebco Evans Holding pik ..................... 4,846 1,817
*Nextel Communications pik ................... 10,990 1,178,678
*Pegasus Communications pik .................. 1,501 151,262
*Pegasus Communications Unit ................. 2,500 288,125
*SF Holdings Class C ......................... 3,000 30,000
*TCR Holdings Class B ........................ 3,802 38
*TCR Holdings Class C ........................ 2,091 21
*TCR Holdings Class D ........................ 5,512 55
*TCR Holdings Class E ........................ 11,405 114
----------
Total Preferred Stock
(cost $3,512,428) ......................... 2,834,362
----------

High Yield-2
<PAGE>

High Yield Series
Statement of Net Assets (Continued)

Number of Market
Shares Value
CONVERTIBLE PREFERRED STOCK-1.31%
*E.Spire Communications pik .................... 17,295 $ 339,419
*PSINet ........................................ 20,000 682,500
----------
Total Convertible Preferred Stock
(cost $2,108,822) ........................... 1,021,919
----------
RIGHTS AND WARRANTS-0.08%
*American Banknote ............................. 18,723 1,500
*Cellnet Data Systems .......................... 9,569 438
*Electronic Retailing System ................... 500 5
*Gothic Energy ................................. 1,400 14
*KMC Telecom Holdings .......................... 1,500 37,500
*Millenium Seacarriers ......................... 1,000 25
*Nextel International .......................... 31 12,267
*Spincycle ..................................... 500 5
*Terex-Appreciation ............................ 800 11,300
Total Rights and Warrants
----------
(cost $78,994) .............................. 63,054
----------

Principal
Amount
REPURCHASE AGREEMENTS-6.92%
With J.P. Morgan Securities 6.40% 7/3/00
dated 6/30/00, collateralized by
$1,094,000 U.S. Treasury Notes
5.875% due 11/15/04, market
value $1,086,579 and $705,000
U.S. Treasury Notes 7.875% due
11/15/04, market value $753,915) .............. $1,803,000 1,803,000

Principal Market
Amount Value
REPURCHASE AGREEMENTS (Continued)
With PaineWebber 6.50% 7/3/00
(dated 6/30/00, collateralized by
$438,000 U.S. Treasury Notes
5.25% due 5/31/01, market value
$435,058 and $492,000
U.S. Treasury Notes 6.125% due
12/31/01, market value $490,125
and $346,000 U.S. Treasury Notes
6.25% due 10/31/01, market value
$348,137 and $547,000 U.S.
Treasury Notes 7.25% due
5/15/04, market value $569,421) ............. $1,805,000 $1,805,000
With Prudential Securities 6.50% 7/3/00
(dated 6/30/00, collateralized by
$492,000 U.S. Treasury Notes 4.50%
due 9/30/00, market value $496,184
and $140,000 U.S. Treasury Notes
4.625% due 11/30/00, market value
$139,927 and $550,000 U.S. Treasury
Notes 15.75% due 11/15/01, market
value $561,131 and $632,000 U.S.
Treasury Notes 11.875% due
11/15/03, market value $645,273) ............ 1,805,000 1,805,000
----------
Total Repurchase Agreements
(cost $5,413,000) ........................... 5,413,000
----------
<PAGE>

<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES-97.19% (cost $84,484,393) ....................... $ 76,004,531

RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-2.81% ............................ 2,201,445
------------
NET ASSETS APPLICABLE TO 11,827,849 SHARES OUTSTANDING-100.00% ................... $ 78,205,976
============
NET ASSET VALUE-HIGH YIELD SERIES STANDARD CLASS ($78,201,035/11,827,102 SHARES).. $6.61
=====
NET ASSET VALUE-HIGH YIELD SERIES SERVICE CLASS ($4,941 / 747 SHARES) ............ $6.61
=====
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization - no par) ................. $115,430,724
Undistributed net investment income .............................................. 1,524,707
Accumulated net realized loss on investments ..................................... (30,269,593)
Net unrealized depreciation of investments ....................................... (8,479,862)
------------
Total net assets ................................................................. $ 78,205,976
============
</TABLE>
----------
* Non-income producing security for the period ended June 30, 2000.
+ Zero coupon security as of June 30, 2000. The coupon shown is the step up
rate.

Summary of Abbreviations:
co guarantee - company guaranteed
debs - debentures
disc - discount
mtg - mortgage
nts- notes
pik - payment in kind
sr - senior
sub - subordinated
unsec- unsecured

See accompanying notes

High Yield-3
<PAGE>

Delaware Group Premium Fund-
High Yield Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Interest .................................. $ 4,831,965
Dividends ................................. 174,008
------------
5,005,973
------------
EXPENSES:
Management fees ........................... 285,296
Accounting and administration ............. 19,437
Reports and statements to shareholders .... 9,527
Custodian fees ............................ 8,587
Taxes (other than taxes on income) ........ 4,510
Dividend disbursing and transfer agent fees
and expenses ........................... 2,684
Trustees' fees ............................ 1,649
Registration fees ......................... 548
Distribution expense - Service Class ...... 1
Other ..................................... 1,015
------------
333,254
Less expenses paid indirectly ............. (3,827)
------------

Total expenses ............................ 329,427
------------

NET INVESTMENT INCOME ..................... 4,676,546
------------

NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on investments .......... (15,648,881)
Net change in unrealized appreciation /
depreciation of investments ............ 3,784,409
------------
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS .................... (11,864,472)
------------

NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................ ($7,187,926)
============
See accompanying notes
<PAGE>

Delaware Group Premium Fund-
High Yield Series
Statements of Changes in Net Assets

Six Months Year
Ended 6/30/00 Ended
(Unaudited) 12/31/99

INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS:
Net investment income ................. $ 4,676,546 $ 11,413,207
Net realized loss on investments ...... (15,648,881) (13,315,901)
Net change in unrealized appreciation /
depreciation of investments ........ 3,784,409 (1,219,031)
------------- -------------
Net decrease in net assets
resulting from operations .......... (7,187,926) (3,121,725)
------------- -------------

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class ..................... (3,224,707) (11,458,462)
Service Class ...................... -- --
Net realized gain on investments:
Standard Class ..................... -- (726,836)
Service Class ...................... -- --
------------- -------------
(3,224,707) (12,185,298)
------------- -------------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ..................... 6,837,884 24,182,918
Service Class ...................... 5,000 --
Net asset value of shares issued upon
reinvestment of distributions from
net investment income and net
realized gain on investments:
Standard Class ..................... 3,498,866 12,213,628
Service Class ...................... -- --
------------- -------------
10,341,750 36,396,546
------------- -------------
Cost of shares repurchased:
Standard Class ..................... (24,356,625) (39,164,311)
Service Class ...................... -- --
------------- -------------
(24,356,625) (39,164,311)
------------- -------------
Decrease in net assets derived from
capital share transactions ......... (14,014,875) (2,767,765)
------------- -------------

NET DECREASE IN NET ASSETS ............ (24,427,508) (18,074,788)
------------- -------------

NET ASSETS:
Beginning of period ................... 102,633,484 120,708,272
------------- -------------
End of period ......................... $ 78,205,976 $102,633,484
============= =============

See accompanying notes

High Yield-4
<PAGE>

Delaware Group Premium Fund-High Yield Series
Financial Highlights

Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
High Yield Series Standard Class
Six Months
Ended
6/30/00(1) Year Ended December 31,
(Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $ 7.420 $ 8.460 $ 9.510 $ 9.170 $ 8.940 $ 8.540

Income (loss) from investment operations:
Net investment income(2)................................... 0.368 0.781 0.906 0.863 0.853 0.872
Net realized and unrealized gain (loss)
on investments ......................................... (0.932) (0.987) (1.048) 0.332 0.230 0.400
-------- --------- --------- -------- -------- --------
Total from investment operations .......................... (0.564) (0.206) (0.142) 1.195 1.083 1.272
-------- --------- --------- -------- -------- --------

Less dividends and distributions:
Dividends from net investment income ...................... (0.246) (0.784) (0.905) (0.855) (0.853) (0.872)
Distributions from net realized gain on investments ....... none (0.050) (0.003) none none none
-------- --------- --------- -------- -------- --------
Total dividends and distributions ......................... (0.246) (0.834) (0.908) (0.855) (0.853) (0.872)
-------- --------- --------- -------- -------- --------

Net asset value, end of period ............................ $6.610 $7.420 $8.460 $9.510 $9.170 $8.940
======== ========= ========= ======== ======== ========

Total return .............................................. (7.75%) (2.64%) (1.83%) 13.63% 12.79% 15.50%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $78,201 $102,633 $120,708 $98,875 $67,665 $56,605
Ratio of expenses to average net assets(3) ................ 0.75% 0.72% 0.70% 0.70% 0.70% 0.69%
Ratio of net investment income to average net assets ...... 10.65% 9.75% 9.85% 9.24% 9.54% 9.87%
Portfolio turnover ........................................ 83% 110% 86% 121% 93% 74%
</TABLE>
----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Per share information for the six months ended June 30, 2000 was based on
the average shares outstanding method.
(3) Ratio for the period ended June 30, 2000 including fees paid indirectly in
accordance with the Securities and Exchange Commission rules was 0.76%.

See accompanying notes

High Yield-5
<PAGE>

Delaware Group Premium Fund-High Yield Series
Financial Highlights (Continued)

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

High Yield Series Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
-----------
Net asset value, beginning of period ............... $ 6.690

Income (loss) from investment operations:
Net investment income(2) ........................... 0.125
Net realized and unrealized loss on investments .... (0.205)
-------
Total from investment operations ................... (0.080)
-------

Less dividends and distributions:
Dividends from net investment income ............... none
Distributions from net realized gain on investments none
-------
Total dividends and distributions .................. none
-------

Net asset value, end of period ..................... $ 6.610
=======

Total return ....................................... (1.20%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $5
Ratio of expenses to average net assets(3) ......... 0.90%
Ratio of net investment income to average net assets 10.50%
Portfolio turnover ................................. 83%

----------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Per share information was based on the average shares outstanding method.
(3) Ratio including fees paid indirectly in accordance with Securities and
Exchange Commission rules was 0.91%.

See accompanying notes

High Yield-6
<PAGE>

Delaware Group Premium Fund-High Yield Series
Notes to Financial Statements
June 30, 1999
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to High Yield
Series (the "Series"). The Series is a diversified open-end investment company
under the Investment Company Act of 1940, as amended. The Series offers two
classes of shares. The Standard Class shares do not carry a 12b-1 fee and the
Service class shares do carry a 12b-1 fee. The shares of the Fund are sold only
to separate accounts of life insurance companies.

The investment objective of the Series is to seek total return and, as a
secondary objective, high current income. It seeks to achieve its objective by
investing primarily in high-yield corporate bonds. An investment in this Series
may involve greater risks than an investment in a portfolio comprised primarily
of investment grade bonds.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $1,015 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $2,812 for the period ended June 30, 2000. 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".

High Yield-7
<PAGE>

High Yield Series
Notes to Financial Statements (Continued)

On June 30, 2000, 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
-------------- --------------------
$26,837 $3,016

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases ........................ $32,986,012
Sales ............................ $41,304,989

The cost of investments for federal income tax purposes approximates cost for
book purposes. At June 30, 2000, the aggregate cost of securities and unrealized
appreciation (depreciation) for the Series were as follows:

For federal income tax purposes, the Series had accumulated capital losses at
June 30, 2000 as follows:

Year of
expiration
2007
-----------
$13,033,766

4. Capital Shares
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Period Year
Ended Ended
6/30/00 12/31/99
------- --------
<S> <C> <C>
Shares sold:
Standard Class ............................................................... 997,900 2,979,441
Service Class ................................................................ 747 -

Shares issued upon reinvestment of distributions from net investment income
and net realized gain on investments:
Standard Class ............................................................... 497,217 1,528,740
Service Class ................................................................ - -
---------- ----------
1,495,864 4,508,181
Shares repurchased:
Standard Class ............................................................... (3,497,426) (4,943,297)
Service Class ................................................................ - -
---------- ----------
(3,497,426) (4,943,297)
---------- ----------
Net decrease .................................................................... (2,001,562) (435,116)
========== ==========
</TABLE>
High Yield-8
<PAGE>

High Yield Series
Notes to Financial Statements (Continued)

The Series may invest up to 15% of its net assets in illiquid securities which
may include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The relative
illiquidity of some of these securities may adversely affect the Series' ability
to dispose of such securities in a timely manner and at a fair price when it is
necessary to liquidate such securities.

High Yield-9

<PAGE>

Delaware Group Premium Fund-International Equity Series
Statement of Net Assets
June 30, 1999 (Unaudited)

Market
Number of Value
Shares (U.S. $)
COMMON STOCK-97.21%
Australia-10.13%
+Amcor ........................... 1,415,000 $ 4,938,347
CSR ............................. 1,904,966 5,281,328
Foster's Brewing Group .......... 2,411,051 6,770,834
National Australia Bank ......... 587,657 9,795,687
Orica ........................... 599,900 2,716,260
*Paperlinx ....................... 471,666 893,372
-----------
30,395,828
-----------
Belgium-1.08%
Electrabel ...................... 13,115 3,241,319
-----------
3,241,319
-----------
France-11.13%
Alcatel Alsthom ................. 190,075 12,465,312
+Compagnie de Saint Gobain ....... 34,299 4,636,243
Societe Generale ................ 108,432 6,521,079
Total Fina Class B .............. 63,688 9,763,928
-----------
33,386,562
-----------
Germany-8.55%
Bayer ........................... 168,400 6,446,261
Bayerische Hypo-und Vereinsbank . 103,900 6,794,031
Continental ..................... 117,200 1,969,073
+RWE ............................. 146,000 4,954,660
Siemens ......................... 36,750 5,500,787
-----------
25,664,812
-----------
Hong Kong-3.94%
Hong Kong Electric .............. 1,458,000 4,694,478
Jardine Matheson Holdings Limited 669,022 2,930,316
Wharf Holdings .................. 2,353,285 4,211,189
-----------
11,835,983
-----------
Japan-15.43%
Canon ........................... 197,000 9,800,814
Eisai ........................... 250,000 8,009,049
Hitachi ......................... 648,000 9,341,754
Kinki Coca-Cola Bottling ........ 177,000 2,351,551
Matsushita Elecric .............. 286,000 7,410,725
Nichido Fire & Marine ........... 479,000 2,617,734
West Japan Railway .............. 1,669 6,762,181
-----------
46,293,808
-----------
Malaysia-0.52%
Oriental Holdings ............... 510,720 1,075,200
Sime Darby ...................... 380,000 488,000
-----------
1,563,200
-----------

<PAGE>

Market
Number of Value
Shares (U.S. $)
COMMON STOCK (Continued)
Netherlands-7.38%
Elsevier ......................... 424,150 $ 5,138,099
+ING Groep ........................ 90,200 6,096,228
Royal Dutch Petroleum ............ 109,500 6,804,818
+Unilever ......................... 51,285 2,352,400
Vopak ............................ 80,534 1,768,188
-----------
22,159,733
-----------
New Zealand-2.07%
+Carter Holt Harvey ............... 1,187,800 1,031,364
+Telecom Corporation of New Zealand 1,486,193 5,196,708
-----------
6,228,072
-----------
Singapore-1.00%
Overseas Chinese Banking ......... 434,000 2,990,504
-----------
2,990,504
-----------
Spain-6.99%
Banco Santander Central
Hispanamericano .................. 733,492 7,737,116
+Iberdrola ........................ 465,800 6,002,811
+Telefonica de Espana ............. 336,367 7,224,659
-----------
20,964,586
-----------
United Kingdom-28.99%
Bass ............................. 492,145 5,502,344
BG ............................... 1,349,176 8,695,382
Blue Circle Industries ........... 918,236 5,945,773
Boots ............................ 648,199 4,942,528
British Airways .................. 889,471 5,116,951
Cable & Wireless ................. 457,100 7,759,153
GKN .............................. 482,000 6,136,368
Glaxo Wellcome ................... 318,720 9,269,081
Great Universal Stores ........... 1,361,000 8,498,757
Halifax Group .................... 610,700 5,825,366
PowerGen ......................... 949,500 8,159,312
Rio Tinto ........................ 271,100 4,437,792
Taylor Woodrow ................... 1,365,000 3,128,639
Unigate .......................... 808,000 3,569,476
-----------
86,986,922
-----------
Total Common Stock
(cost $238,679,417) .............. 291,711,329
-----------

International Equity-1
<PAGE>

International Equity Series
Statement of Net Assets (Continued)

Market
Principal Value
Amount (U.S. $)
REPURCHASE AGREEMENTS-0.54%
With J.P. Morgan Securities 6.40% 7/3/00
(dated 6/30/00, collateralized by
$328,000 U.S. Treasury Notes
5.875% due 11/15/04, market value
$325,592 and $211,000 U.S.Treasury
Notes 7.875% due 11/15/04,
market value $225,910). ............................. $540,000 $540,000
With PaineWebber 6.50% 7/3/00
(dated 6/30/00, collateralized by
$131,000 U.S. Treasury Notes 5.25%
due 5/31/01, market value $130,365
and $104,000 U.S. Treasury Notes
6.25% due 10/31/01, market value
$104,319 and $148,000 U.S. Treasury
Notes 6.125% due 12/31/01, market
value $146,865 and $164,000 U.S.
Treasury Notes 7.25% due 5/15/04,
market value $170,626) .............................. 541,000 541,000

Market
Principal Value
Amount (U.S. $)
REPURCHASE AGREEMENTS (Continued)
With Prudential Securities 6.50% 7/3/00
(dated 6/30/00, collateralized by
$148,000 U.S. Treasury Notes 4.50%
due 9/30/00, market value $148,681
and $42,000 U.S. Treasury Notes
4.625% due 11/30/00, market value
$41,929 and $148,000 U.S. Treasury
Notes 15.75% due 11/15/01, market
value $168,142 and $164,000 U.S.
Treasury Notes 11.875% due 11/15/03,
market value $193,356) .............................. $541,000 $ 541,000
----------
Total Repurchase Agreements
(cost $1,622,000) ................................... 1,622,000
----------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES-97.75% (cost $240,301,417) .......................................... $293,333,329

RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-2.25% ................................................ 6,739,084
------------
NET ASSETS APPLICABLE TO 16,722,688 SHARES OUTSTANDING-100.00% ....................................... $300,072,413
============
NET ASSET VALUE-INTERNATIONAL EQUITY SERIES STANDARD CLASS ($300,067,067 / 16,722,390 SHARES) ........ $17.94
======
NET ASSET VALUE-INTERNATIONAL EQUITY SERIES SERVICE CLASS ($5,346 / 298 SHARES) ...................... $17.94
======
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization-no par) ....................................... $235,992,041
Undistributed net investment income** ................................................................ 3,174,091
Accumulated net realized gain on investments ......................................................... 7,718,179
Net unrealized appreciation of investments and foreign currencies .................................... 53,188,102
------------
Total net assets ..................................................................................... $300,072,413
============
</TABLE>
---------------
* Non-income producing security for the period ended June 30, 2000.
** Undistributed net investment income includes net realized gains (losses) on
foreign currencies. Net realized gains (losses) on foreign currencies are
treated as net investment income in accordance with provisions of the
Internal Revenue Code.
+ Security is partially or fully on loan.

See accompanying notes

International Equity-2
<PAGE>
Delaware Group Premium Fund-
International Equity Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Dividends ................................ $ 5,040,704
Interest ................................. 394,185
Foreign tax withheld ..................... (503,325)
-----------
4,931,564
-----------

EXPENSES:
Management fees .......................... 1,212,116
Custodian fees ........................... 91,852
Accounting and administration ............ 58,000
Reports and statements to shareholders ... 30,500
Professional fees ........................ 12,500
Taxes (other than taxes on income) ....... 9,950
Dividend disbursing and transfer agent
fees and expenses ..................... 7,460
Trustees' fees ........................... 2,600
Registration fees ........................ 1,200
Distribution expense - Service Class ..... 1
Other .................................... 22,931
-----------
1,449,110

Less expenses absorbed or waived ......... (90,383)
Less expenses paid indirectly ............ (5,150)
-----------
Total expenses ........................... 1,353,577
-----------

NET INVESTMENT INCOME .................... 3,577,987
-----------

NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized gain (loss) on:
Investments ........................... 7,727,960
Foreign currencies .................... (117,421)
-----------
Net realized gain ..................... 7,610,539
Net change in unrealized appreciation /
depreciation of investments and
foreign currencies ................... (9,445,634)
-----------

NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCIES .... (1,835,095)
-----------

NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ....................... $ 1,742,892
===========

See accompanying notes
<PAGE>
Delaware Group Premium Fund-
International Equity Series
Statements of Changes in Net Assets

Six Months Year
Ended 6/30/00 Ended
(Unaudited) 12/31/99
------------- --------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ................... $ 3,577,987 $ 5,483,397
Net realized gain on investments and
foreign currencies ................... 7,610,539 7,583,008
Net change in unrealized appreciation /
depreciation of investments and
foreign currencies ................... (9,445,634) 26,659,663
------------ ------------
Net increase in net assets resulting
from operations ...................... 1,742,892 39,726,068
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class ....................... (6,674,306) (5,284,951)
Service Class ........................ -- --
Net realized gain on investments:
Standard Class ....................... (5,471,283) (385,980)
Service Class ........................ -- --
------------ ------------
(12,145,589) (5,670,931)
------------ ------------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ....................... 109,675,927 150,884,715
Service Class ........................ 5,001 --
Netasset value of shares issued upon
reinvestment of distributions from net
investment income and net realized
gain on investments:
Standard Class ....................... 12,145,589 5,670,931
Service Class ........................ -- --
------------ ------------
121,826,517 156,555,646
------------ ------------
Cost of shares repurchased:
Standard Class ....................... (115,411,458) (130,086,773)
Service Class ........................ -- --
------------ ------------
(115,411,458) (130,086,773)
------------ ------------
Increase in net assets derived from
capital share transactions ........... 6,415,059 26,468,873
------------ ------------
NET INCREASE (DECREASE) IN
NET ASSETS ........................... (3,987,638) 60,524,010
------------ ------------
NET ASSETS:
Beginning of period ..................... 304,060,051 243,536,041
------------ ------------
End of period ........................... $300,072,413 $304,060,051
============ ============

See accompanying notes

International Equity-3
<PAGE>

Delaware Group Premium Fund-International Equity Series
Financial Highlights

Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
International Equity Series Standard Class
Six Months
Ended 6/30/00(1) Year Ended December 31,
(Unaudited) 1999 1998 1997 1996 1995
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $18.630 $16.480 $15.520 $15.110 $13.120 $11.840

Income (loss) from investment operations:
Net investment income(2) ................................. 0.215 0.371 0.386 0.359 0.557 0.419
Net realized and unrealized gain (loss)
on investments and foreign currencies ................. (0.168) 2.161 1.169 0.596 1.966 1.191
------- ------- ------- ------- ------- -------
Total from investment operations ......................... 0.047 2.532 1.555 0.955 2.523 1.610
------- ------- ------- ------- ------- -------

Less dividends and distributions:
Dividends from net investment income ..................... (0.405) (0.356) (0.595) (0.545) (0.420) (0.240)
Distributions from net realized gain on investments ...... (0.332) (0.026) none none (0.113) (0.090)
------- ------- ------- ------- ------- -------
Total dividends and distributions ........................ (0.737) (0.382) (0.595) (0.545) (0.533) (0.330)
------- ------- ------- ------- ------- -------

Net asset value, end of period ........................... $17.940 $18.630 $16.480 $15.520 $15.110 $13.120
======= ======= ======= ======= ======= =======

Total return ............................................ 0.53% 15.76% 10.33% 6.60% 20.03% 13.98%

Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $300,067 $304,060 $243,536 $198,863 $131,428 $81,548
Ratio of expenses to average net assets .................. 0.95% 0.92% 0.87% 0.85% 0.80% 0.80%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ....... 1.02% 0.94% 0.88% 0.90% 0.91% 0.89%
Ratio of net investment income to average net assets ..... 2.51% 2.16% 2.41% 2.28% 4.71% 3.69%
Ratio of net investment income to average net
assets prior to expense limitation and
expenses paid indirectly .............................. 2.44% 2.14% 2.40% 2.23% 4.60% 3.60%
Portfolio turnover ....................................... 10% 9% 5% 7% 8% 19%
</TABLE>
------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Per share information for the period ended June 30, 2000 and the years ended
December 31, 1997, 1998 and 1999 was based on the average shares outstanding
method.

See accompanying notes

International Equity-4
<PAGE>

Delaware Group Premium Fund-International Equity Series
Financial Highlights (Continued)

Selected data for each share of the Series outstanding throughout the period was
as follows:
<TABLE>
<CAPTION>
International Equity Series
Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
----------------------------
<S> <C>
Net asset value, beginning of period ...................................................... $16.780

Income from investment operations:
Net investment income(2) .................................................................. 0.110
Net realized and unrealized gain on investments and foreign currencies .................... 1.050
-------
Total from investment operations .......................................................... 1.160
-------

Less dividends and distributions:
Dividends from net investment income ...................................................... none
Distributions from net realized gain on investments ....................................... none
-------
Total dividends and distributions ......................................................... none
-------

Net asset value, end of period ............................................................ $17.940
=======

Total return .............................................................................. 6.91%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................................................... $5
Ratio of expenses to average net assets ................................................... 1.10%
Ratio of expenses to average net assets prior to expense limitation and expenses
paid indirectly ......................................................................... 1.17%
Ratio of net investment income to average net assets ...................................... 2.36%
Ratio of net investment income to average net assets prior to expense limitation
and expenses paid indirectly ............................................................ 2.29%
Portfolio turnover ........................................................................ 10%
</TABLE>
---------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Per share information was based on the average shares outstanding method.

See accompanying notes

International Equity-5

<PAGE>
Delaware Group Premium Fund-International Equity Series
Notes to Financial Statements
June 30, 2000 (Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to
International Equity Series (the "Series"). The Series is a diversified open-end
investment company under the Investment Company Act of 1940, as amended. The
Series offers two classes of shares. The Standard Class shares do not carry a
12b-1 fee and the Service class shares do carry a 12b-1 fee. The shares of the
Fund are sold only to separate accounts of life insurance companies.

The investment objective of the Series is to seek long-term growth without undue
risk to principal. It seeks to achieve its objective by investing primarily in
stocks of foreign companies providing the potential for capital appreciation and
income.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. 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 under the direction of the Fund's Board of Trustees.

<PAGE>

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

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $3,298 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $1,852 for the period ended June 30, 2000. 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: 0.85% of the
first $500 million of average daily net assets of the series, 0.80% on the next
$500 million, 0.75% on the next $1,500 million and 0.70% on the average daily
net assets over $2,500 million.

International Equity-6
<PAGE>

International Equity Series
Notes to Financial Statements (Continued)

DIAL has elected to waive its fee and reimburse the Series to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and distribution
expenses, do not exceed 0.95% of average daily net assets of the Series through
April 30, 2001.

On June 30, 2000, the Series had liabilities payable to affiliates as follows:

Dividend disbursing
Investment transfer agent,
management accounting fees
fee payable to and other expenses
Dial payable to DSC
-------------- -------------------
$187,209 $1,169

Certain officers of DMC, DSC, DIAL and DDLP are officers, trustees and/or
employees of the Fund. These officers, trustees and employees are paid no
compensation by the Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases ..................................... $17,990,417
Sales ......................................... $14,309,266

Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation appreciation
------------ ------------ ------------ --------------
$240,301,417 $72,406,359 ($19,374,447) $53,031,912

4. Capital Shares
Transactions in capital shares were as follows:

Period Year
Ended Ended
6/30/00 12/31/99
------- --------
Shares sold:
Standard Class .................................. 6,352,209 8,758,569
Service Class ................................... 298 -

Shares issued upon reinvestment of distributions
from net investment income and
net realized gain on investments:
Standard Class .................................. 724,677 356,214
Service Class ................................... - -
---------- ----------
7,077,184 9,114,783
Shares repurchased:
Standard Class .................................. (6,674,350) (7,575,588)
Service Class ................................... - -
---------- ----------
(6,674,350) (7,575,588)
---------- ----------
Net increase ....................................... 402,834 1,539,195
========== ==========

International Equity-7
<PAGE>
International Equity Series
Notes to Financial Statements (Continued)

There were no forward foreign currency exchange contracts outstanding at June
30, 2000.

<PAGE>

8. 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, 2000 were as follows:

Market value of Market value of
securities on loan collateral
------------------ ---------------
$36,154,117 $37,702,220

Net income from securities lending activities for the period ended June 30, 2000
was $75,118 and is included in interest income on the Statement of Operations.

International Equity-8

<PAGE>

Delaware Group Premium Fund-REIT Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Number of Market
Shares Value
Common Stock-92.45%
Hotels/Diversified REITs-2.41%
MeriStar Hospitality .............................. 23,100 $ 485,100
-----------
485,100
-----------
Mall REITs-6.95%
*General Growth Properties ......................... 7,900 250,825
Macerich .......................................... 23,300 514,056
Simon Property Group .............................. 28,750 637,891
-----------
1,402,772
-----------
Manufactured Housing REITs-6.59%
Chateau Communities ............................... 24,960 705,120
Sun Communities ................................... 18,660 623,944
-----------
1,329,064
-----------
Multifamily REITs-17.15%
Apartment Investment & Management ................. 19,310 835,158
AvalonBay Communities ............................. 18,173 758,727
Equity Residential Properties Trust ............... 14,600 671,600
Essex Property Trust .............................. 15,710 659,820
Grove Property Trust .............................. 32,950 535,438
-----------
3,460,743
-----------
Office/Industrial REITs-40.93%
Alexandria R.E.Equities ........................... 19,470 668,064
AMB Property ...................................... 34,190 779,959
Cabot Industrial Trust ............................ 17,900 352,406
CarrAmerica Realty ................................ 24,080 638,120
Duke-Weeks Realty ................................. 40,100 897,238
Equity Office Properties Trust .................... 33,190 914,799
Liberty Property Trust ............................ 15,160 393,213
Prentiss Properties Trust ......................... 28,080 673,920
ProLogis .......................................... 40,200 856,763
Reckson Associates Realty ......................... 32,990 783,513
SL Green Realty ................................... 26,290 703,258
Spieker Properties ................................ 12,615 596,059
-----------
8,257,312
-----------

<PAGE>

Number of Market
Shares Value
Common Stock (Continued)
Real Estate Operating Companies-8.77%
*Catellus Development .............................. 35,900 $ 538,500
Starwood Hotels & Resorts Worldwide ............... 23,570 761,606
Trizec Hahn ....................................... 26,300 470,113
-----------
1,770,219
-----------
Retail Strip Center REITs-6.93%
Kimco Realty ...................................... 16,300 668,300
Pan Pacific Retail Properties ..................... 36,290 730,336
-----------
1,398,636
-----------
Self Storage REITs-2.72%
Public Storage .................................... 23,400 548,438
-----------
548,438
-----------
Total Common Stock
(cost $17,310,874) ................................ 18,652,284
-----------

REIT-1
<PAGE>

REIT Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
REPURCHASE AGREEMENTS-14.86%
With J.P. Morgan Securities 6.40% 7/3/00
(dated 6/30/00, collateralized by $606,000
U.S. Treasury Notes 5.875% due 11/15/04,
market value $602,005 and $391,000
U.S. Treasury Notes 7.875% due 11/15/04,
market value $417,697) ........................... $1,000,000 $1,000,000
With PaineWebber 6.50% 7/3/00
(dated 6/30/00, collateralized by $242,000
U.S. Treasury Notes 5.25% due 5/31/01,
market value $241,038 and $191,000 U.S.
Treasury Notes 6.25% due 10/31/01, market
value $192,880 and $273,000 U.S. Treasury
Notes 6.125% due 12/31/01, market value
$271,547 and $303,000 U.S. Treasury
Notes 7.25% due 5/15/04,
market value $315,480) ........................... 999,000 999,000

<PAGE>

Principal Market
Amount Value
REPURCHASE AGREEMENTS (Continued)
With Prudential Securities 6.50% 7/3/00
(dated 6/30/00, collateralized by $273,000
U.S. Treasury Notes 4.50% due 9/30/00,
market value $274,904 and $78,000
U.S. Treasury Notes 4.625% due 11/30/00,
market value $77,525 and $273,000
U.S. Treasury Notes 15.75% due 11/15/01,
market value $310,887 and $303,000
U.S. Treasury Notes 11.875% due 11/15/03,
market value $357,505) ........................... $1,000,000 $1,000,000
----------
Total Repurchase Agreements
(cost $2,999,000) ................................ 2,999,000
----------

TOTAL MARKET VALUE OF SECURITES-107.31% (COST $20,309,874) ....... $21,651,284

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(7.31%) .......... (1,474,739)
-----------
NET ASSETS APPLICABLE TO 2,069,734 SHARES OUTSTANDING-100.00% .... $20,176,545
===========

NET ASSET VALUE-REIT SERIES STANDARD CLASS
($20,171,233 / 2,069,189 SHARES) ................................ $9.75
=====
NET ASSET VALUE-REIT SERIES SERVICE CLASS
($5,312 / 545 SHARES) ........................................... $9.75
=====

COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization-no par) ... $18,990,512
Undistributed net investment income .............................. 374,878
Accumulated net realized loss on investments ..................... (530,255)
Net unrealized appreciation of investments ....................... 1,341,410
-----------
Total net assets ................................................. $20,176,545
===========

-----------
REITs: Real Estate Investment Trusts
*Non-income producing security for the period ended June 30, 2000.

See accompanying notes

REIT-2
<PAGE>

Delaware Group Premium Fund-
REIT Series
Statement of Operations
Six Months Ended June 30, 2000 (Unaudited)

INVESTMENT INCOME:
Dividends ...................................................... $ 335,123
Interest ....................................................... 26,338
----------
361,461
----------
EXPENSES:
Management fees ................................................ 51,421
Reports and statements to shareholders ......................... 9,923
Accounting and administration .................................. 3,027
Custodian fees ................................................. 1,950
Dividend disbursing and transfer agent fees
and expenses .................................................. 1,262
Professional fees .............................................. 570
Taxes (other than taxes on income) ............................. 297
Trustees' fees ................................................. 227
Registration fees .............................................. 45
Distribution expense-Service Class ............................. 1
Other .......................................................... 587
----------
69,310

Less expenses absorbed or waived ............................... (10,981)
Less expenses paid indirectly .................................. (320)
----------
Total expenses ................................................. 58,009
----------

NET INVESTMENT INCOME .......................................... 303,452
----------

NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments ............................... (28,991)
Net change in unrealized appreciation /
depreciation of investments ................................. 1,896,210
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS ................................................ 1,867,219
----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..................................... $2,170,671
==========

See accompanying notes

<PAGE>

Delaware Group Premium Fund-
REIT Series
Statements of Changes in Net Assets

Six Months Year
Ended 6/30/00 Ended
(Unaudited) 12/31/99
------------- --------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ............................. $ 303,452 $ 486,270
Net realized loss on investments .................. (28,991) (325,253)
Net change in unrealized appreciation /
depreciation of investments ...................... 1,896,210 (451,401)
----------- -----------
Net increase (decrease) in net assets
resulting from operations ........................ 2,170,671 (290,384)
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class ................................... (412,878) (134,548)
Service Class .................................... - -
----------- -----------
(412,878) (134,548)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ................................... 9,468,312 7,672,323
Service Class .................................... 4,999 -
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
Standard Class ................................... 412,878 134,548
Service Class .................................... - -
----------- -----------
9,886,189 7,806,871
----------- -----------
Cost of shares repurchased:
Standard Class ................................... (3,090,942) (1,320,226)
Service Class .................................... - -
----------- -----------
(3,090,942) (1,320,226)
----------- -----------
Increase in net assets derived from capital
share transactions ............................... 6,795,247 6,486,645
----------- -----------
NET INCREASE IN NET ASSETS ........................ 8,553,040 6,061,713
----------- -----------
NET ASSETS:
Beginning of period ............................... 11,623,505 5,561,792
----------- -----------
End of period ..................................... $20,176,545 $11,623,505
=========== ===========
See accompanying notes

REIT-3

<PAGE>

Delaware Group Premium Fund-REIT Series
Financial Highlights

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

<TABLE>
<CAPTION>
REIT Series Standard Class
Six Months
Ended 5/4/98(2)
6/30/00(1) Year Ended to
(Unaudited) 12/31/99 12/31/98
-----------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period ................................ $8.670 $9.100 $10.000

Income (loss) from investment operations:
Net investment income(3) ............................................ 0.205 0.334 0.217
Net realized and unrealized gain (loss) on investments .............. 1.157 (0.574) (1.117)
------- ------- -------
Total from investment operations .................................... 1.362 (0.240) (0.900)
------- ------- -------
Less dividends:
Dividends from net investment income ................................ (0.282) (0.190) none
------- ------- -------
Total dividends ..................................................... (0.282) (0.190) none
------- ------- -------
Net asset value, end of period ...................................... $ 9.75 $ 8.670 $ 9.100
======= ======= =======
Total return ........................................................ 16.20% (2.61%) (9.00%)

Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................. $20,171 $11,624 $5,562
Ratio of expenses to average net assets ............................. 0.85% 0.85% 0.85%
Ratio of expenses to average net assets prior
to expense limitation and expenses paid indirectly ................. 1.01% 0.96% 1.02%
Ratio of net investment income to average net assets ................ 4.42% 5.65% 6.42%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid indirectly ........... 4.26% 5.54% 6.25%
Portfolio turnover .................................................. 20% 33% 39%

See accompanying notes

REIT-4
<PAGE>

Delaware Group Premium Fund-REIT Series
Financial Highlights (continued)

Selected data for each share of the Series outstanding throughout the period was
as follows:
REIT Series
Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
-------------
Net asset value, beginning of period .......................... $9.180

Income from investment operations:
Net investment income(2) ...................................... 0.056
Net realized and unrealized gain on investments ............... 0.514
------
Total from investment operations .............................. 0.570
------

Less dividends:
Dividends from net investment income .......................... none
------
Total dividends ............................................... none
------
Net asset value, end of period ................................ $9.75
======
Total return .................................................. 6.21%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ....................... $5
Ratio of expenses to average net assets ....................... 1.00%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly .............. 1.16%
Ratio of net investment income to average net assets .......... 4.27%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid indirectly ..... 4.11%
Portfolio turnover ............................................ 20%

-----------
(1)Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2)Per share information was based on the average shares outstanding method.

See accompanying notes

REIT-5
<PAGE>

Delaware Group Premium Fund-REIT Series
Notes to Financial Statements
June 30, 2000
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to REIT Series
(the "Series"). The Series is a non-diversified open-end investment company
under the Investment Company Act of 1940, as amended. The Series offers two
classes of shares. The Standard Class shares do not carry a 12b-1 fee and the
Service class shares do carry a 12b-1 fee. The shares of the Fund are sold only
to separate accounts of life insurance companies.

The objective of the Series is to seek to achieve maximum long-term total
return. Capital appreciation is a secondary objective. It seeks to achieve its
objective by investing in securities of companies primarily engaged in the real
estate industry. The Series will invest at least 65% of its assets in stocks of
real estate investment trusts.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. 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 under the direction of the Fund's Board of Trustees.

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

<PAGE>

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $158 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $162 for the period ended June 30, 2000. 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. Lincoln Investment Management, Inc., an affiliate of
DMC, receives 30% of the advisory fee paid to DMC for acting as a sub-advisor to
the Series.

DMC has elected to waive its fee and reimburse the Series to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and distribution
expenses, do not exceed 0.85% of average daily net assets of the Series through
April 30, 2001.

REIT-6
<PAGE>

REIT Series
Notes to Financial Statements (Continued)

On June 30, 2000, the Series had liabilities payable to affiliates as follows:

Dividend disbursing
Investment transfer agent, Other
management accounting fees expenses
fee payable to and other expenses payable to DMC
DMC payable to DSC and affiliates
-------------- ------------------- ---------------
$6,623 $1,262 $806

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases .......................................... $7,303,983
Sales .............................................. $1,298,209

For federal income tax purposes, the Series had accumulated capital losses at
June 30, 2000 as follows:

Year of Expiration
2006 2007 Total
-------- -------- --------
$127,938 $147,232 $275,170

4. Capital Shares
Transactions in capital shares were as follows:
Period Year
Ended Ended
6/30/00 12/31/99
------- --------
Shares sold:
Standard Class ..................................... 1,018,050 864,979
Service Class ...................................... 545 --

Shares issued upon reinvestment of dividends
from net investment income:
Standard Class ..................................... 48,688 15,718
Service Class ...................................... - -
--------- -------
1,067,283 880,697
Shares repurchased:
Standard Class ..................................... (337,503) (152,143)
Service Class ...................................... - -
--------- -------
(337,503) (152,143)
--------- -------
Net increase ........................................ 729,780 728,554
========= =======
5. Line of Credit
The Series, along with certain other funds in the Delaware Investments Family of
Funds (the "Participants"), participate in a $683,500,000 revolving line of
credit facility to be used for temporary or emergency purposes as an additional
source of liquidity to fund redemptions of investor shares. The Participants are
charged an annual commitment fee, which is allocated across the Participants on
the basis of each fund's allocation of the entire facility. The Participants may
borrow up to a maximum of one third of their net assets under the agreement. No
amounts were outstanding at June 30, 2000, or at any time during the period.

6. Credit and Market Risk
The Series concentrates its investments in the real estate industry and may be
subject to certain risks associated with that industry. If the Series holds real
estate directly as a result of defaults or receives rental income directly from
real estate holdings, its tax status as a regulated investment company may be
jeopardized. The Series is also affected by interest rate changes, particularly
if the real estate investment trusts it holds use floating rate debt to finance
their ongoing operations. Its investments may also tend to fluctuate more in
value than a portfolio that invests in a broader range of industries.

REIT-7

<PAGE>

Delaware Group Premium Fund-Select Growth Series
Statement of Net Assets
June 30, 1999 (Unaudited)

Number of Market
Shares Value
COMMON STOCK-95.73%
Banking, Finance & Insurance-7.79%
Capital One Financial ......................... 13,700 $ 611,363
Fleet Boston Financial ........................ 37,500 1,275,000
Merrill Lynch & Company ....................... 14,900 1,713,500
Morgan Stanley Dean Witter .................... 14,000 1,165,500
Schwab (Charles) .............................. 42,150 1,417,294
Zions Bancorp ................................. 48,600 2,230,284
----------
8,412,941
----------
Cable, Media & Publishing-9.84%
*AT&T-Liberty Media Class A .................... 71,400 1,731,450
*Clear Channel Communications .................. 33,700 2,527,500
InterPublic Group ............................. 5,200 223,600
Omnicom Group ................................. 5,300 472,032
*Radio One ..................................... 35,700 1,055,380
*Radio One-Class D ............................. 71,400 1,575,262
*USA Networks .................................. 48,200 1,042,325
*Viacom Class B ................................ 29,200 1,991,075
----------
10,618,624
----------
Computers & Technology-21.45%
*America Online ................................ 86,500 4,562,875
*Cisco Systems ................................. 15,200 966,150
*Extreme Networks .............................. 34,200 3,608,100
First Data .................................... 45,000 2,233,125
*NetIQ ......................................... 22,800 1,359,450
*Peregrine Systems ............................. 99,300 3,444,468
*StorageNetworks ............................... 3,700 333,925
*Sun Microsystems .............................. 16,500 1,500,469
*VeriSign ...................................... 13,800 2,435,700
*Veritas Software .............................. 24,025 2,715,200
----------
23,159,462
----------
Consumer Products-1.90%
*Gemstar International Group Limited ........... 33,400 2,052,534
----------
2,052,534
----------
Electronics & Electrical Equipment-15.36%
*Altera ........................................ 13,800 1,406,738
*Applied Micro Circuits ........................ 20,200 1,994,750
*E-Tek Dynamics ................................ 7,900 2,084,119
*Globespan ..................................... 24,400 2,978,706
*JDS Uniphase .................................. 22,300 2,673,213
*Maxim Integrated Products ..................... 22,000 1,494,625
*MICREL ........................................ 52,600 2,284,813
*Xilinx ........................................ 20,100 1,659,506
----------
16,576,470
----------
Healthcare & Pharmaceuticals-7.59%
*Genentech ..................................... 29,000 4,988,000
*United Theraputics ............................ 29,600 3,207,900
----------
8,195,900
----------
Industrial Machinery-1.50%
*Applied Materials ............................. 17,900 1,622,188
----------
1,622,188
----------
<PAGE>

Number of Market
Shares Value
COMMON STOCK (Continued)
Leisure, Lodging & Entertainment-4.12%
*Bally Total Fitness Holdings .............. 39,400 $ 999,775
*Brinker International ..................... 40,300 1,178,775
*Outback Steakhouse ........................ 47,700 1,395,225
*P.F. Chang's China Bistro ................. 27,500 878,281
-----------
4,452,056
-----------
Real Estate-1.61%
*Pinnacle Holdings ......................... 32,100 1,733,400
-----------
1,733,400
-----------
Retail-12.31%
*Bed Bath & Beyond ......................... 42,900 1,555,125
*Best Buy .................................. 16,000 1,012,000
Intimate Brands ........................... 42,000 829,500
*Kohl's .................................... 67,800 3,771,375
Limited ................................... 74,400 1,608,900
*Staples ................................... 56,900 874,838
*Starbucks ................................. 56,200 2,146,138
Walgreen .................................. 46,400 1,493,500
-----------
13,291,376
-----------
Telecommunications-9.10%
*Amdocs Limited ............................ 25,700 1,972,475
*American Tower Class A .................... 41,600 1,734,200
*Ditech Communications ..................... 6,900 652,480
*Network Appliance ......................... 28,100 2,262,050
*NEXTEL Communications ..................... 34,200 2,092,612
*Nextlink Communications Class A ........... 29,200 1,107,775
-----------
9,821,592
-----------
Transportation & Shipping-1.00%
Expeditors International .................. 22,800 1,083,000
-----------
1,083,000
-----------
Utilities-2.16%
Duke Energy ............................... 20,700 1,166,963
Dynegy .................................... 17,100 1,168,144
-----------
2,335,107
-----------
Total Common Stock
(cost $84,658,273) ...................... . 103,354,650
-----------

Select Growth-1
<PAGE>

Select Growth Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
REPURCHASE AGREEMENTS-6.35%
With J.P. Morgan Securities 6.40% 7/3/00
(dated 6/30/00, collateralized by
$892,000 U.S. Treasury Notes 4.875%
due 11/15/04, market value $953,687
and $1,384,000 U.S. Treasury Notes
5.875% due 11/15/04, market
value $1,375,236).............................. $2,282,000 $2,282,000
With PaineWebber 6.50% 7/3/00
(dated 6/30/00, collateralized by
$554,000 U.S. Treasury Notes 5.25% due
5/31/01, market value $550,634 and
$437,000 U.S. Treasury Notes 6.25% due
10/31/01, market value $440,622 and
$623,000 U.S. Treasury Notes 6.125% due
12/31/01, market value $620,330 and
$692,000 U.S. Treasury Notes 7.25% due
5/15/04, market value $720,692)................ 2,284,000 2,284,000

<PAGE>

Principal Market
Amount Value
REPURCHASE AGREEMENTS (Continued)
With Prudential Securities 6.50% 7/3/00
(dated 6/30/00, collateralized by
$623,000 U.S. Treasury Notes 4.50% due
9/30/00, market value $627,999 and
$178,000 U.S. Treasury Notes 4.625% due
11/30/00, market value $177,099 and
$623,000 U.S. Treasury Notes 15.75% due
11/15/01, market value $710,199 and
$692,000 U.S. Treasury Notes 11.875% due
11/15/03, market value $816,695) ............... $2,285,000 $2,285,000
----------
Total Repurchase Agreements
(cost $6,851,000)............................... 6,851,000
----------

<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES-102.08% (COST $91,509,273) ........................... $110,205,650

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(2.08%) ............................... (2,248,606)
------------
NET ASSETS APPLICABLE TO 7,781,573 SHARES OUTSTANDING-100.00% ......................... $107,957,044
============
NET ASSET VALUE-SELECT GROWTH SERIES STANDARD CLASS ($94,203,611/6,790,065 SHARES) .... $13.87
======
NET ASSET VALUE-SELECT GROWTH SERIES SERVICE CLASS ($13,753,433/991,508 SHARES) ....... $13.87
======
COMPONENTS OF NET ASSETS AT JUNE 30, 2000
Shares of beneficial interest (unlimited authorization-no par) ........................ $98,829,437
Accumulated net investment loss ....................................................... (80,318)
Accumulated net realized loss on investments .......................................... (9,488,452)
Net unrealized appreciation of investments ............................................ 18,696,377
------------
Total net assets ...................................................................... $107,957,044
============
</TABLE>

----------
*Non-income producing security for the period ended June 30, 2000.

See accompanying notes

Select Growth-2

<PAGE>

Delaware Group Premium Fund-Select Growth Series
Statement of Assets and Liabilities
June 30, 1999 (Unaudited)

ASSETS:
Investments at market ...................................... $110,205,650
Cash ....................................................... 401,739
Dividends and interest receivable .......................... 12,636
Receivable for securities sold ............................. 6,720,787
Subscriptions receivable ................................... 153,288
Other assets ............................................... 1,701
------------
Total assets ............................................... 117,495,801
------------
LIABILITIES:
Payable for securities purchased ........................... 9,508,477
Liquidations payable ....................................... 106
Other accounts payable and accrued expenses ................ 30,174
------------
Total liabilities .......................................... 9,538,757
------------
TOTAL NET ASSETS ........................................... $107,957,044
============
INVESTMENTS AT COST ........................................ $ 91,509,273
------------

See accompanying notes

<PAGE>

Delaware Group Premium Fund-Select Growth Series
Statements of Operations
Six Months Ended June 30, 1999 (Unaudited)

INVESTMENT INCOME:
Interest .................................................. $ 207,735
Dividends ................................................. 40,893
-----------
248,628
-----------
EXPENSES:
Management fees ........................................... 313,257
Accounting and administration ............................. 7,175
Reports and statements to shareholders .................... 3,400
Distribution expense-Service Class ........................ 2,363
Professional fees ......................................... 1,300
Custodian fees ............................................ 1,196
Dividend disbursing and transfer agent
fees and expenses ...................................... 1,050
Taxes (other than taxes on income) ........................ 525
Trustees' fees ............................................ 450
Registration fees ......................................... 60
Other ..................................................... 1,045
-----------
331,821

Less expenses absorbed or waived .......................... (1,701)
Less expenses paid indirectly ............................. (1,561)
-----------

Total expenses ............................................ 328,559
-----------
NET INVESTMENT LOSS ....................................... (79,931)
-----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on investments .......................... (9,085,920)
Net change in unrealized appreciation/
depreciation of investments ............................ 7,263,619
-----------
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS .................................... (1,822,301)
-----------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............................. ($1,902,232)
===========

See accompanying notes

Select Growth-3

<PAGE>

Delaware Group Premium Fund-Select Growth Series
Statements of Changes in Net Assets

<TABLE>
<CAPTION>
Six Months 5/3/99*
Ended 6/30/00 to
(Unaudited) 12/31/99
------------- --------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) ...................................... ($79,931) $ 41,738
Net realized gain (loss) on investments ........................... (9,085,920) 1,312,565
Net change in unrealized appreciation/depreciation
of investments ................................................. 7,263,619 11,432,758
------------ -----------
Net increase (decrease) in net assets resulting
from operations ................................................ (1,902,232) 12,787,061
------------ -----------

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class ................................................. (42,125) --
Service Class .................................................. -- --
Net realized gain on investments:
Standard Class ................................................. (1,715,097) --
Service Class .................................................. -- --
------------ -----------
(1,757,222) --
------------ -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ................................................. 53,452,326 45,344,441
Service Class .................................................. 12,777,840 --
Net asset value of shares issued upon reinvestment
of distributions from net investment income and
net realized gain on investments:
Standard Class ................................................. 1,757,222 --
Service Class .................................................. -- --
------------ -----------
67,987,388 45,344,441
------------ -----------
Cost of shares repurchased:
Standard Class ................................................. (9,884,219) (4,602,949)
Service Class .................................................. (15,224) --
------------ -----------
(9,899,443) (4,602,949)
------------ -----------
Increase in net assets derived from capital share transactions .... 58,087,945 40,741,492
------------ -----------
NET INCREASE IN NET ASSETS ........................................ 54,428,491 53,528,553
------------ -----------
NET ASSETS:
Beginning of period ............................................... 53,528,553 --
------------ -----------
End of period ..................................................... $107,957,044 $53,528,553
============ ===========
</TABLE>

----------
*Date of commencement of operations.

See accompanying notes

Select Growth-4

<PAGE>

Delaware Group Premium Fund-Select Growth Series
Financial Highlights

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

<TABLE>
<CAPTION>
Select Growth Series Standard Class
Six Months 5/3/99(2)
Ended 6/30/00(1) to
(Unaudited) 12/31/99
------------- --------
<S> <C> <C>
Net asset value, beginning of period ....................... $14.300 $10.000

Income from investment operations:
Net investment income (loss)(3) ............................ (0.014) 0.011
Net realized and unrealized gain (loss) on investments (0.124) 4.289
------- -------
Total from investment operations ........................... (0.138) 4.300
------- -------
Less dividends and distributions:
Dividends from net investment income ....................... (0.007) none
Distributions from net realized gain on investments ........ (0.285) none
------- -------
Total dividends and distributions .......................... (0.292) none
------- -------
Net asset value, end of period ............................. $13.870 $14.300
======= =======

Total return ............................................... (1.17%) 42.90%

Ratios and supplemental data:
Net assets, end of period (000 omitted) .................... $94,204 $53,529
Ratio of expenses to average net assets .................... 0.78% 0.80%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ......... 0.78% 0.81%
Ratio of net investment income (loss) to average
net assets .............................................. (0.19%) 0.32%
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly ................................ (0.19%) 0.29%
Portfolio turnover ......................................... 175% 174%
</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 for the period ended June 30, 2000 was based on the
average shares outstanding method.

See accompanying notes

Select Growth-5
<PAGE>

Delaware Group Premium Fund-Select Growth Series
Financial Highlights (Continued)

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

<TABLE>
<CAPTION>
Select Growth Series Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
-----------
<S> <C>
Net asset value, beginning of period ....................................... $13.160

Income from investment operations:
Net investment loss(2) ..................................................... (0.006)
Net realized and unrealized gain on investments ............................ 0.716
-------
Total from investment operations ........................................... 0.710
-------
Less dividends and distributions:
Dividends from net investment income ....................................... none
-------
Distributions from net realized gain on investments ........................ none
-------
Total dividends and distributions .......................................... none
-------
Net asset value, end of period ............................................. $13.870
=======
Total return ............................................................... 5.40%

Ratios and supplemental data:
Net assets, end of period (000 omitted) .................................... $13,753
Ratio of expenses to average net assets .................................... 0.93%
Ratio of expenses to average net assets
prior to expense limitation and expenses paid indirectly................... 0.93%
Ratio of net investment loss to average net assets ......................... (0.34%)
Ratio of net investment loss to average net assets prior
to expense limitation and expenses paid indirectly ........................ (0.34%)
Portfolio turnover ......................................................... 175%
</TABLE>

----------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Per share information was based on the average shares outstanding method.

See accompanying notes

Select Growth-6

<PAGE>

Delaware Group Premium Fund-Select Growth Series
Notes to Financial Statements
June 30, 2000
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Select
Growth Series (the "Series"). The Series is a diversified open-end investment
company under the Investment Company Act of 1940, as amended. The Series offers
two classes of shares. The Standard Class shares do not carry a 12b-1 fee and
the Service class shares do carry a 12b-1 fee. The shares of the Fund are sold
only to separate accounts of life insurance companies.

The investment objective of the Series is to seek to provide long-term capital
appreciation. It seeks to achieve its objective by investing primarily in equity
securities of companies providing the potential for high earnings growth.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. 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 under the direction of the Fund's Board of Trustees.

<PAGE>

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $970 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $591 for the period ended June 30, 2000. 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".

DMC has elected to waive its fee and reimburse the Series to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and distribution
expenses, do not exceed 0.85% of average daily net assets of the Series through
April 30, 2001.

Select Growth-7

<PAGE>

Select Growth Series
Notes to Financial Statements (Continued)

On June 30, 2000, the Series had liabilities payable to affiliates as follows:

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000 the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases............ $127,113,671
Sales................ $66,485,962

<TABLE>
<CAPTION>
Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation appreciation
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
$91,509,273 $20,360,723 ($1,664,346) $18,696,377
</TABLE>

4. Capital Shares
Transactions in capital shares were as follows:

Period Period
ended ended
6/30/00 12/31/99*
------- ---------
Shares sold:
Standard Class ................................. 3,596,073 4,188,091
Service Class .................................. 992,781 --

Shares issued upon reinvestment of distributions
from net investment income and realized gain
on investments:
Standard Class ................................. 105,286 --
Service Class .................................. -- --
--------- ---------
4,694,140 4,188,091
Shares repurchased:
Standard Class ................................. (655,031) (444,354)
Service Class .................................. (1,273) --
--------- ---------
(656,304) (444,354)
--------- ---------
Net increase ...................................... 4,037,836 3,743,737
========= =========

----------
*Commenced operations on 5/3/99.

Select Growth-8

<PAGE>
Delaware Group Premium Fund-Small Cap Value Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Number of Market
Shares Value
COMMON STOCK-96.02%
Automobiles & Automotive Parts-2.65%
Borg-Warner Automotive ................. 34,708 $ 1,219,119
Clarcor ................................ 60,550 1,203,431
-----------
2,422,550
-----------
Banking, Finance & Insurance-17.56%
Associated Banc-Corp ................... 39,380 858,976
*Avis Group Holdings .................... 77,200 1,447,500
Bank United ............................ 37,400 1,316,013
Centura Banks .......................... 11,600 393,675
Colonial Bancgroup ..................... 121,700 1,171,363
Commercial Federal ..................... 59,900 932,194
Compass Bancshares ..................... 66,500 1,134,656
Cullen Frost Bankers ................... 50,800 1,336,675
Everest Reinsurance Holdings ........... 54,200 1,781,825
*Financial Federal ...................... 74,850 1,300,519
Hudson United Bancorp .................. 56,000 1,256,500
Liberty Financial Companies ............ 50,500 1,107,844
*PMI Group .............................. 22,600 1,073,500
Westamerica Bancorporation ............. 35,600 930,050
-----------
16,041,290
-----------
Buildings & Materials-2.24%
D.R. Horton ............................ 91,900 1,246,394
*Griffon ................................ 144,600 804,338
-----------
2,050,732
-----------
Business Services-1.50%
*Modis Professional Services ............ 154,300 1,369,413
-----------
1,369,413
-----------
Cable, Media & Publishing-0.56%
*Belo (A.H.) ............................ 29,700 514,181
-----------
514,181
-----------
Chemicals-6.07%
Crompton ............................... 64,200 786,450
Hanna (M.A.) ........................... 86,400 777,600
Minerals Technologies .................. 20,300 933,800
OM Group ............................... 41,700 1,834,800
*Scotts ................................. 33,200 1,211,800
-----------
5,544,450
-----------
Computers & Technology-2.72%
*Mercury Computer Systems ............... 32,500 1,050,156
*Synopsys ............................... 41,600 1,437,800
-----------
2,487,956
-----------
Electronics & Electrical Equipment-5.49%
*Burr-Brown ............................. 13,000 1,126,938
*Galileo Technology ..................... 63,100 1,356,650
*International Rectifier ................ 23,100 1,293,600
*Plexus ................................. 11,000 1,243,000
-----------
5,020,188
-----------
Energy-14.81%
Helmerich & Payne ...................... 53,800 2,010,775
*Louis Dreyfus Natural Gas .............. 28,800 901,800
*Marine Drilling ........................ 30,400 851,200
NICOR .................................. 56,900 1,856,363
NUI .................................... 36,600 988,200
*Ocean Energy ........................... 96,200 1,364,838
*Oceaneering International .............. 69,500 1,320,500
*Santa Fe Snyder ........................ 155,500 1,768,813
*Tom Brown .............................. 47,400 1,093,163
Valero Energy .......................... 43,600 1,384,300
-----------
13,539,952
-----------
<PAGE>
Number of Market
Shares Value
COMMON STOCK (Continued)
Engineering & Construction-1.86%
*Jacobs Engineering Group .......... 52,000 $1,699,750
----------
1,699,750
----------
Food, Beverage & Tobacco-3.89%
*Suiza Foods ....................... 53,500 2,614,813
Universal Foods ................... 50,800 939,800
----------
3,554,613
----------
Healthcare & Pharmaceuticals-9.58%
*AmeriSource Health Class A ........ 44,100 1,367,100
*BioChem Pharma .................... 35,500 874,188
*Conmed ............................ 46,400 1,200,600
Invacare .......................... 49,100 1,288,875
Mentor ............................ 29,400 799,313
*Varian Medical Systems ............ 82,400 3,223,900
----------
8,753,976
----------
Industrial Machinery-2.44%
Harsco ............................ 37,100 946,050
Milacron .......................... 88,400 1,281,800
----------
2,227,850
----------
Metals & Mining-1.06%
CIRCOR International .............. 20,700 169,481
*Mueller Industries ................ 28,500 798,000
----------
967,481
----------
Real Estate-7.87%
Cabot Industrial Trust ............ 83,900 1,651,781
Kilroy Realty ..................... 47,700 1,237,219
Pan Pacific Retail Properties ..... 77,600 1,561,700
Prentiss Properties Trust ......... 60,800 1,459,200
Reckson Associates Realty ......... 54,000 1,282,500
----------
7,192,400
----------
Retail-4.05%
*BJ's Wholesale Club ............... 38,500 1,270,500
*Zale .............................. 66,600 2,430,900
----------
3,701,400
----------
Telecommunications-1.67%
*Brightpoint ....................... 132,000 1,142,625
*Harmonic .......................... 15,400 381,150
----------
1,523,775
----------
Textiles, Apparel & Furniture-2.20%
*Furniture Brands International .... 67,000 1,013,375
Wolverine World Wide .............. 100,800 995,400
----------
2,008,775
----------
Transportation & Shipping-2.64%
Alexander & Baldwin ............... 46,500 1,025,906
*Mesaba Holdings ................... 84,000 803,250
USFreightways ..................... 23,900 587,044
----------
2,416,200
----------
Utilities-1.90%
California Water Service Group .... 30,100 729,925
Conectiv .......................... 64,400 1,002,225
----------
1,732,150
----------
Miscellaneous-3.26%
Federal Signal .................... 94,500 1,559,250
Smith (A.O.) ...................... 67,650 1,416,422
----------
2,975,672
----------
Total Common Stock
(cost $84,175,366) ................ 87,744,754
----------

Small Cap Value-1
<PAGE>

Small Cap Value Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
REPURCHASE AGREEMENTS-5.04%
With J.P. Morgan Securities 6.40% 7/3/00
(dated 6/30/00, collateralized by
$931,000 U.S. Treasury Notes 5.875%
due 11/15/04, market value $924,385
and $600,000 U.S. Treasury Notes
7.875% due 11/15/04,
market value $641,378) ............................ $1,533,000 $1,533,000
With PaineWebber 6.50% 7/3/00
(dated 6/30/00, collateralized by
$372,000 U.S. Treasury Notes 5.25%
due 5/31/01, market value $370,117
and $294,000 U.S. Treasury Notes
6.25% due 10/31/01, market value
$296,170 and $419,000 U.S. Treasury
Notes 6.125% due 12/31/01, market
value $416,964 and $465,000 U.S.
Treasury Notes 7.25% due 5/15/04,
market value $484,423) ............................ 1,536,000 1,536,000

Principal Market
Amount Value
REPURCHASE AGREEMENTS (Continued)
With Prudential Securities 6.50% 7/3/00
(dated 6/30/00, collateralized by
$419,000 U.S. Treasury Notes 4.50%
due 9/30/00, market value $422,119
and $119,000 U.S. Treasury Notes
4.625% due 11/30/00, market value
$119,040 and $419,000 U.S. Treasury
Notes 15.75% due 11/15/01, market
value $477,371 and $465,000 U.S.
Treasury Notes 11.875% due 11/15/03,
market value $548,953) ........................... $1,536,000 $1,536,000
----------
Total Repurchase Agreements
(cost $4,605,000) ............................... 4,605,000
----------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES-101.06% (cost $88,780,366) .................................... $92,349,754

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(1.06%) ........................................ (973,084)
-----------
NET ASSETS APPLICABLE TO 6,106,706 SHARES OUTSTANDING-100.00% .................................. $91,376,670
===========

NET ASSET VALUE-SMALL CAP VALUE SERIES STANDARD CLASS ($91,371,642 / 6,106,370 SHARES) ......... $14.96
======
NET ASSET VALUE-SMALL CAP VALUE SERIES SERVICE CLASS ($5,028 / 336 SHARES) ..................... $14.96
======
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization-no par) ................................. $92,085,135
Undistributed net investment income ............................................................ 535,867
Accumulated net realized loss on investments ................................................... (4,813,720)
Net unrealized appreciation of investments ..................................................... 3,569,388
-----------
Total net assets ............................................................................... $91,376,670
===========
</TABLE>
---------------
*Non-income producing security for the period ended June 30, 2000.

See accompanying notes

Small Cap Value-2
<PAGE>

Delaware Group Premium Fund-
Small Cap Value Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Dividends ................................. $ 782,540
Interest .................................. 143,701
-----------
926,241
-----------
EXPENSES:
Management fees ........................... 342,799
Reports and statements to shareholders .... 23,675
Accounting and administration ............. 18,748
Professional fees ......................... 6,680
Dividend disbursing and transfer agent fees
and expenses ........................... 3,612
Taxes (other than taxes on income) ........ 2,700
Trustee's fees ............................ 1,607
Custodian fees ............................ 1,028
Distribution expense-Service Class ........ 1
Other ..................................... 4,479
-----------
405,329

Less expenses absorbed or waived .......... (14,382)
Less expenses paid indirectly ............. (1,906)
-----------
Total expenses ............................ 389,041
-----------

NET INVESTMENT INCOME ..................... 537,200

NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized loss on investments .......... (4,149,390)
Net change in unrealized appreciation /
depreciation of investments ............ 3,714,115
-----------
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS .................... (435,275)
-----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ 101,925
===========

See accompanying notes
<PAGE>
Delaware Group Premium Fund-
Small Cap Value Series
Statements of Changes in Net Assets

DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class ................................. (1,124,954) (1,227,218)
Service Class .................................. - -
Net realized gain on investments:
Standard Class ................................. (1,404,672) (503,474)
Service Class .................................. - -
----------- ------------
(2,529,626) (1,730,692)
----------- ------------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ................................. 10,259,988 18,087,758
Service Class .................................. 5,000 -
Net asset value of shares issued upon
reinvestment of distributions from net
investment income and net realized
gain on investments:
Standard Class ................................. 2,529,626 1,730,692
Service Class .................................. - -
----------- ------------
12,794,614 19,818,450
----------- ------------
Cost of shares repurchased:
Standard Class ................................. (14,415,125) (21,445,285)
Service Class .................................. - -
----------- ------------
(14,415,125) (21,445,285)
----------- ------------
Decrease in net assets derived
from capital share transactions ................ (1,620,511) (1,626,835)
----------- ------------

NET DECREASE IN NET ASSETS ........................ (4,048,212) (8,564,542)
----------- ------------

NET ASSETS:
Beginning of period ............................... 95,424,882 103,989,424
----------- ------------
End of period ..................................... $91,376,670 $ 95,424,882
=========== ============

See accompanying notes

Small Cap Value-3
<PAGE>

Delaware Group Premium Fund-Small Cap Value Series
Financial Highlights

Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Small Cap Value Series Standard Class
Six Months
Ended
6/30/00(1) Year Ended December 31,
(Unaudited) 1999 1998 1997 1996 1995
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $15.360 $16.450 $17.920 $14.500 $12.470 $10.290

Income (loss) from investment operations:
Net investment income(2) .................................. 0.089 0.182 0.196 0.122 0.112 0.192
Net realized and unrealized gain (loss) on investments .... (0.073) (0.997) (1.036) 4.338 2.548 2.208
------- ------- ------- ------- ------- -------
Total from investment operations .......................... 0.016 (0.815) (0.840) 4.460 2.660 2.400
------- ------- ------- ------- ------- -------

Less dividends and distributions:
Dividends from net investment income ...................... (0.185) (0.195) (0.135) (0.110) (0.180) (0.150)
Distributions from net realized gain on investments ....... (0.231) (0.080) (0.495) (0.930) (0.450) (0.070)
------- ------- ------- ------- ------- -------
Total dividends and distributions ......................... (0.416) (0.275) (0.630) (1.040) (0.630) (0.220)
------- ------- ------- ------- ------- -------

Net asset value, end of period ............................ $14.960 $15.360 $16.450 $17.920 $14.500 $12.470
======= ======= ======= ======= ======= =======

Total return ............................................. 0.24% (4.86%) (4.79%) 32.91% 22.55% 23.85%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $91,372 $95,425 $103,989 $84,071 $23,683 $11,929
Ratio of expenses to average net assets ................... 0.85% 0.85% 0.83% 0.80% 0.80% 0.80%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ........ 0.88% 0.85% 0.85% 0.90% 0.99% 0.96%
Ratio of net investment income to average net assets ...... 1.18% 1.16% 1.32% 1.24% 1.28% 2.13%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid indirectly 1.15% 1.16% 1.30% 1.14% 1.09% 1.97%
Portfolio turnover ........................................ 90% 47% 45% 41% 84% 71%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Per share information for the period ended June 30, 2000 was based on the
average shares outstanding method.

See accompanying notes

Small Cap Value-4
<PAGE>

Delaware Group Premium Fund-Small Cap Value Series
Financial Highlights (Continued)

Selected data for each share of the Series outstanding throughout the period was
as follows:
<TABLE>
<CAPTION>
Small Cap Value Series
Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
----------------------
<S> <C>
Net asset value, beginning of period ......................................................................... $14.860

Income from investment operations:
Net investment income(2) ..................................................................................... 0.025
Net realized and unrealized gain on investments .............................................................. 0.075
------
Total from investment operations ............................................................................. 0.100
------

Less dividends and distributions:
Dividends from net investment income ......................................................................... none
Distributions from net realized gain on investments .......................................................... none
------
Total dividends and distributions ............................................................................ none
------

Net asset value, end of period ............................................................................... $14.960
=======

Total return ................................................................................................. 0.74%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ...................................................................... $5
Ratio of expenses to average net assets ...................................................................... 1.00%
Ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly ............. 1.03%
Ratio of net investment income to average net assets ......................................................... 1.03%
Ratio of net investment income to average net assets prior to expense limitation and expenses paid indirectly 1.00%
Portfolio turnover ........................................................................................... 90%
</TABLE>
----------
(1) Date of commencement of operations; Ratios have been annualized and total
return has not been annualized.
(2) Per share information was based on the average shares outstanding method.

See accompanying notes

Small Cap Value-5
<PAGE>
Delaware Group Premium Fund-Small Cap Value Series
Notes to Financial Statements
June 30, 2000
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Small Cap
Value Series (the "Series"). The Series is a diversified open-end investment
company under the Investment Company Act of 1940, as amended. The Series offers
two classes of shares. The Standard Class shares do not carry a 12b-1 fee and
the Service class shares do carry a 12b-1 fee. The shares of the Fund are sold
only to separate accounts of life insurance companies.

The investment objective of the Series is to seek capital appreciation. It seeks
to achieve its objective by investing in stocks of small companies whose market
value appears low relative to underlying value or future earnings and growth
potential.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. 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 under the direction of the Fund's Board of Trustees.

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $1,057 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $849 for the period ended June 30, 2000. 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".
<PAGE>

DMC has elected to waive its fee and reimburse the Series to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and distribution
expenses, do not exceed 0.85% of average daily net assets of the Series through
April 30, 2001.

Small Cap Value-6

<PAGE>
Small Cap Value Series
Notes to Financial Statements (Continued)

On June 30, 2000, 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
-------------- -------------------
$50,996 $4,086

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases ..................................... $38,988,397
Sales ......................................... $40,452,701

4. Capital Shares
Transactions in capital shares were as follows:

Period Year
Ended Ended
6/30/00 12/31/99
------- --------
Shares sold:
Standard Class ..................................... 695,546 1,162,723
Service Class ...................................... 336 -

Shares issued upon reinvestment of distributions
from net investment income and net realized
gain on investments:
Standard Class ..................................... 173,261 118,948
Service Class ...................................... - -
-------- ----------
869,143 1,281,671
Shares repurchased:
Standard Class ..................................... (973,454) (1,390,784)
Service Class ...................................... - -
-------- ----------
(973,454) (1,390,784)
-------- ----------
Net decrease .......................................... (104,311) (109,113)
======== ==========

6. Credit and Market Risk
The Series invests a significant portion of its assets in small companies and
may be subject to certain risks associated with ownership of securities of small
companies. Investments in smaller companies may be more volatile than
investments in larger companies because of the limited financial resources of
smaller companies or their dependence on narrow product lines.

Small Cap Value-7

<PAGE>

Delaware Group Premium Fund-Social Awareness Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Number of Market
Shares Value
COMMON STOCK-99.01%
Banking, Finance & Insurance-19.10%
A.G. Edwards ..................................... 4,745 $ 185,055
Allmerica Financial .............................. 2,000 104,750
Allstate ......................................... 6,380 141,955
American Express ................................. 8,400 437,850
American International Group ..................... 4,125 484,687
Bank of America .................................. 15,100 649,300
Bank One ......................................... 3,012 80,006
Citigroup ........................................ 15,735 948,034
City National .................................... 2,300 81,650
Comerica ......................................... 2,662 119,457
Countrywide Credit ............................... 3,600 109,125
Dime Bancorp ..................................... 12,800 201,600
Federal Home Loan ................................ 2,100 85,050
Federal National Mortgage ........................ 7,000 365,312
First Union ...................................... 3,200 79,400
Hibernia Class A ................................. 11,500 125,062
J.P. Morgan ...................................... 1,600 176,200
John Nuveen ...................................... 3,000 125,812
Marsh & McLennan ................................. 3,215 335,767
Merrill Lynch & Company .......................... 1,500 172,500
Metris ........................................... 5,565 139,821
MGIC Investment .................................. 1,800 81,900
Morgan Stanley Dean Witter ....................... 6,100 507,825
National City .................................... 7,220 123,191
Paine Webber Group ............................... 3,870 176,085
PMI Group ........................................ 2,350 111,625
PNC Financial Group .............................. 5,500 257,813
SLM Holding ...................................... 3,002 112,387
SouthTrust ....................................... 3,400 76,925
St. Paul ......................................... 2,500 85,313
T. Rowe Price Associates ......................... 2,200 93,500
UnionBanCal ...................................... 6,900 128,081
Washington Mutual ................................ 4,000 115,500
---------
7,018,538
---------
Buildings & Materials-0.43%
Kaufman & Broad Home ............................. 8,000 158,500
---------
158,500
---------
Cable, Media & Publishing-5.42%
Dun and Bradstreet ............................... 4,805 137,543
Gannett .......................................... 2,070 123,812
Knight-Ridder .................................... 1,900 101,056
McGraw-Hill ...................................... 5,800 313,200
New York Times ................................... 8,200 323,900
Omnicom Group .................................... 1,200 106,875
Reynolds & Reynolds Class A ...................... 6,700 122,275
*R.H. Donnelley ................................... 5,361 103,869
Time Warner ...................................... 3,100 235,600
*Valassis Communications .......................... 6,400 244,000
Viacom Class B ................................... 2,600 177,288
---------
1,989,418
---------
Chemicals-0.70%
Lubrizol ......................................... 12,100 254,100
---------
254,100
---------

<PAGE>

Number of Market
Shares Value
COMMON STOCK (Continued)
Computers & Technology-23.25%
Adobe Systems .................................... 1,100 $ 143,000
*America Online ................................... 8,200 432,550
*Apple Computer ................................... 6,600 345,675
*Applied Materials ................................ 2,800 253,750
*BMC Software ..................................... 3,100 113,102
*Cisco Systems .................................... 24,400 1,550,925
Compaq Computer .................................. 5,000 127,812
Computer Associates International ................ 8,600 440,212
*Compuware ........................................ 7,100 73,662
*Comverse Technology .............................. 3,600 334,800
*Dell Computer .................................... 8,500 419,156
Deluxe ........................................... 3,800 89,537
*EMC .............................................. 13,880 1,067,892
*Lexmark International Group A .................... 1,400 94,150
Linear Technology ................................ 1,400 89,512
Micron Technology ................................ 4,100 361,056
*Microsoft ........................................ 18,060 1,444,800
*Oracle ........................................... 8,000 672,500
SunGard Data Systems ............................. 4,000 124,000
*Symantec ......................................... 1,300 70,119
*Teradyne ......................................... 2,800 205,800
*Yahoo ............................................ 700 86,713
---------
8,540,723
---------
Consumer Products-2.82%
Avon Products .................................... 4,060 180,670
Clorox ........................................... 2,380 106,654
Gillete .......................................... 3,300 115,294
Keebler Foods .................................... 9,300 345,262
*United Stationers ................................ 8,900 288,138
---------
1,036,018
---------
Electronics & Electrical Equipment-2.83%
Avnet ............................................ 2,000 118,500
AVX .............................................. 2,900 66,519
General Cable .................................... 8,000 65,000
*LSI Logic ........................................ 5,200 281,450
Novellus Systems ................................. 2,100 118,781
*Sanmina .......................................... 2,800 239,400
*Waters ........................................... 1,200 149,775
---------
1,039,425
---------
Energy-6.00%
Apache ........................................... 6,900 405,806
BP Amoco ADR ..................................... 12,800 724,000
Enron ............................................ 10,800 696,600
Equitable Resources .............................. 5,800 279,850
*Noble Drilling ................................... 2,300 94,731
---------
2,200,987
---------
Food & Beverage-2.72%
General Mills .................................... 6,400 244,800
McCormick and Company ............................ 3,500 113,750
Quaker Oats ...................................... 3,925 294,866
*Suiza Foods ...................................... 3,900 190,613
Supervalu ........................................ 5,000 95,313
Universal Foods .................................. 3,200 59,200
---------
998,542
---------

Social Awareness-1

<PAGE>

Social Awareness Series
Statement of Net Assets (Continued)

Number of Market
Shares Value
COMMON STOCK (Continued)
Healthcare & Pharmaceuticals-10.30%
*AmeriSource Health Class A ....................... 5,200 $ 161,200
*Amgen ............................................ 7,500 526,875
Beckman Coulter .................................. 1,700 99,237
Bergen Brunswig Class A .......................... 12,294 67,617
*Biogen ........................................... 1,600 103,200
*Boston Scientific ................................ 4,000 87,750
Cardinal Health .................................. 3,553 262,922
C.R. Bard ........................................ 5,100 245,437
Eli Lilly ........................................ 12,500 1,248,437
ICN Pharmaceuticals .............................. 2,800 77,875
IVAX ............................................. 5,100 211,650
McKesson ......................................... 4,600 96,313
Medtronic ........................................ 9,688 482,584
Mylan Laboratories ............................... 6,200 113,150
---------
3,784,247
---------
Industrial Machinery-1.31%
Illinois Tool Works .............................. 4,121 234,897
Ingersoll-Rand ................................... 6,100 245,525
---------
480,422
---------
Leisure, Lodging & Entertainment-1.33%
McDonald's ....................................... 6,200 204,213
Walt Disney ...................................... 7,300 283,331
---------
487,544
---------
Metals & Mining-0.31%
Cleveland Cliffs Iron ............................ 2,700 69,694
Worthington Industries ........................... 4,300 45,150
---------
114,844
---------
Retail-6.40%
Home Depot ....................................... 11,400 569,287
Lowe's Companies ................................. 3,800 156,038
Ross Stores ...................................... 5,300 90,431
*Safeway .......................................... 3,000 135,375
Target ........................................... 1,600 92,800
TJX .............................................. 8,520 159,750
Tupperware ....................................... 3,600 79,200
Wal-Mart Stores .................................. 14,800 852,850
*Zale ............................................. 5,900 215,350
---------
2,351,081
---------

<PAGE>

Number of Market
Shares Value
COMMON STOCK (Continued)
Telecommunications-14.30%
ALLTEL ........................................... 4,850 $ 300,397
BellSouth ........................................ 14,280 608,685
Corning .......................................... 3,300 890,587
Nortel Networks .................................. 13,700 935,025
*QUALCOMM ......................................... 1,100 66,000
SBC Communications ............................... 22,300 964,475
Sprint ........................................... 1,500 76,500
*Tellabs .......................................... 3,000 205,313
U.S. West ........................................ 5,370 460,478
Vodafone Group ADR ............................... 5,000 207,188
*WORLDCOM ......................................... 11,700 536,738
---------
5,251,386
---------
Textiles, Apparel & Furniture-0.18%
Westpoint Stevens ................................ 5,900 65,638
---------
65,638
---------
Transportation & Shipping-1.03%
Delta Air Lines .................................. 2,300 116,294
Tidewater ........................................ 4,400 158,400
UAL .............................................. 1,800 104,738
---------
379,432
---------
Utilities-0.58%
Puget Sound Energy ............................... 10,000 213,125
---------
213,125
---------
Total Common Stock
(cost $28,951,091) ............................... 36,363,970
----------

Social Awareness-2

<PAGE>

Social Awareness Series
Statement of Net Assets (Continued)

Principal Market
Amount Value
REPURCHASE AGREEMENTS -1.07%
With J.P. Morgan Securities 6.40% 7/3/00
(dated 6/30/00, collateralized by
$79,000 U.S. Treasury Notes
5.875% due 11/15/04,
market value $78,688 and $51,000
U.S. Treasury Notes 7.875% due 11/15/04,
market value $54,597) ............................ $130,500 $130,500
With PaineWebber 6.50% 7/3/00
(dated 6/30/00, collateralized by $32,000
U.S. Treasury Notes 5.25% due 5/31/01,
market value $31,506 and $36,000
U.S. Treasury Notes 6.125% due 12/31/01,
market value $35,494 and $25,000
U.S. Treasury Notes 6.25% due 10/31/01,
market value $25,211 and $40,000
U.S. Treasury Notes 7.25% due 5/15/04,
market value $41,236) ............................ 130,750 130,750

Principal Market
Amount Value
REPURCHASE AGREEMENTS (Continued)
With Prudential Securities 6.50% 7/3/00
(dated 6/30/00, collateralized by $36,000
U.S. Treasury Notes 4.50% due 9/30/00,
market value $35,933 and $10,000
U.S. Treasury Notes 4.625% due 11/30/00,
market value $10,133 and $40,000
U.S. Treasury Notes 11.875% due 11/15/03,
market value $46,730 and $36,000
U.S. Treasury Notes 15.75% due 11/15/01,
market value $40,636) ............................ $130,750 $130,750
--------
Total Repurchase Agreements
(cost $392,000) .................................. 392,000
--------

TOTAL MARKET VALUE OF SECURITIES-100.08% (cost $29,343,091) ...... $36,755,970

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(0.08%) .......... (27,967)
-----------
NET ASSETS APPLICABLE TO 2,222,315 SHARES OUTSTANDING-100.00% ... $36,728,003
===========
NET ASSET VALUE-SOCIAL AWARENESS SERIES STANDARD CLASS
($36,722,977 / 2,222,011 SHARES) ................................ $16.53
======
NET ASSET VALUE-SOCIAL AWARENESS SERIES SERVICE CLASS
($5,026 / 304 SHARES) ........................................... $16.53
======
COMPONENTS OF NET ASSETS AT JUNE 30, 2000
Shares of beneficial interest (unlimited authorization-no par) ... $29,190,404
Undistributed net investment income .............................. 47,131
Accumulated net realized gain on investments ..................... 77,589
Net unrealized appreciation of investments ....................... 7,412,879
-----------
Total net assets ................................................. $36,728,003
===========
----------
* Non income producing security for the six months ended June 30, 2000.
ADR-American Depositary Receipt

See accompanying notes

Social Awareness-3

<PAGE>

Delaware Group Premium Fund-
Social Awareness Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Dividends ........................................... $188,022
Interest ............................................ 14,497
--------
202,519
--------

EXPENSES:
Management fees ..................................... 134,728
Reports and statements to shareholders .............. 14,724
Accounting and administration ....................... 6,285
Dividend disbursing and transfer agent
fees and expenses ................................ 2,090
Taxes (other than taxes on income) .................. 1,575
Registration fees ................................... 1,000
Trustees' fees ...................................... 701
Custodian fees ...................................... 238
Distribution expense-Service Class .................. 1
Other ............................................... 1,554
--------
162,896
Less expenses absorbed or waived .................... (9,508)
Less expenses paid indirectly ....................... (503)
--------

Total expenses ...................................... 152,885
--------

NET INVESTMENT INCOME ............................... 49,634
--------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments .................... 310,387
Net change in unrealized appreciation /
depreciation of investments ...................... 110,179
--------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS ................................... 420,566
--------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .................................. $470,200
========

See accompanying notes

<PAGE>

Delaware Group Premium Fund-
Social Awareness Series
Statements of Changes in Net Assets

Six Months Year
Ended 6/30/00 Ended
(Unaudited) 12/31/99
------------- --------

INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ............................... $ 49,634 $ 95,809
Net realized gain on investments .................... 310,387 344,943
Net change in unrealized appreciation /
depreciation of investments ...................... 110,179 3,613,446
---------- -----------
Net increase in net assets resulting
from operations .................................. 470,200 4,054,198
---------- -----------

DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class ................................... (94,365) (123,491)
Service Class .................................... - -
---------- -----------
(94,365) (123,491)
---------- -----------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ................................... 4,835,544 15,310,894
Service Class .................................... 5,001 -
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
Standard Class ................................... 94,365 123,491
Service Class .................................... - -
----------- -----------
4,934,910 15,434,385
----------- -----------
Cost of shares repurchased:
Standard Class ................................... (5,321,360) (9,588,372)
Service Class .................................... - -
----------- -----------
(5,321,360) (9,588,372)
----------- -----------
Increase (decrease) in net assets derived
from capital share transactions .................. (386,450) 5,846,013
----------- -----------

NET INCREASE (DECREASE) IN
NET ASSETS ....................................... (10,615) 9,776,720
----------- -----------

NET ASSETS:
Beginning of period ................................. 36,738,618 26,961,898
----------- ----------
End of period ....................................... $36,728,003 $36,738,618
=========== ===========

See accompanying notes

Social Awareness-4

<PAGE>

Delaware Group Premium Fund-Social Awareness Series
Financial Highlights

Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Social Awareness Series Standard Class
Six Months 5/1/97(2)
Ended 6/30/00(1) Year Ended December 31, to
(Unaudited) 1999 1998 12/31/97
--------------------------------------------------

<S> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $16.360 $14.550 $12.840 $10.000

Income from investment operations:
Net investment income(3) .................................. 0.022 0.036 0.065 0.051
Net realized and unrealized gain on investments ........... 0.190 1.834 1.880 2.789
------- ------- ------- -------
Total from investment operations .......................... 0.212 1.870 1.945 2.840
------- ------- ------- -------

Less dividends and distributions:
Dividends from net investment income ...................... (0.042) (0.060) (0.050) none
Distributions from net realized gain on investments ....... none none (0.185) none
------- ------- ------- -------
Total dividends and distributions ......................... (0.042) (0.060) (0.235) none
------- ------- ------- -------

Net asset value, end of period ............................ $16.530 $16.360 $14.550 $12.840
======= ======= ======= =======

Total return ............................................. 1.29% 12.91% 15.45% 28.40%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $36,723 $36,739 $26,962 $7,800
Ratio of expenses to average net assets ................... 0.85% 0.85% 0.83% 0.80%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ................ 0.90% 0.90% 0.89% 1.40%
Ratio of net investment income to average net assets ...... 0.27% 0.30% 0.80% 1.13%
Ratio of net investment income to average net assets
prior to expense limitation
and expenses paid indirectly ........................... 0.22% 0.25% 0.74% 0.53%
Portfolio turnover ........................................ 41% 22% 30% 52%
</TABLE>

See accompanying notes

Social Awareness-5

<PAGE>

Delaware Group Premium Fund-Social Awareness Series
Financial Highlights (Continued)

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

Social Awareness Series Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
-----------

Net asset value, beginning of period ........................ $16.440

Income from investment operations:
Net investment income(2) .................................... 0.004
Net realized and unrealized gain on investments ............. 0.086
-------
Total from investment operations ............................ 0.090
-------

Less dividends and distributions:
Dividends from net investment income ........................ none
Distributions from net realized gain on investments ......... none
-------
Total dividends and distributions ........................... none
-------

Net asset value, end of period .............................. $16.53
=======

Total return ................................................ 0.55%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ..................... $5
Ratio of expenses to average net assets ..................... 1.00%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ................... 1.05%
Ratio of net investment income to average net assets ........ 0.12%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid indirectly.. 0.07%
Portfolio turnover .......................................... 41%
----------
(1) Date of commencement of operations; ratios have been annualized
and total return has not been annualized.
(2) Per share information for the period ended June 30, 2000 was
based on the average shares outstanding method.

See accompanying notes

Social Awareness-6

<PAGE>

Delaware Group Premium Fund-Social Awareness Series
Notes to Financial Statements
June 30, 2000
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Social
Awareness Series (the "Series"). The Series is a diversified open-end investment
company under the Investment Company Act of 1940, as amended. The Series offers
two classes of shares. The Standard Class shares do not carry a 12b-1 fee and
the Service class shares do carry a 12b-1 fee. The shares of the Fund are sold
only to separate accounts of life insurance companies.

The investment objective of the Series is to seek long-term capital
appreciation. It seeks to achieve its objective by investing in large- and
mid-capitalization stocks of U.S. companies expected to grow over time and
deemed socially responsible.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. 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 under the direction of the Fund's Board of Trustees.

<PAGE>

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $415 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $88 for the period ended June 30, 2000. 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. Vantage Global Advisors, Inc., an affiliate of DMC,
receives a fee from DMC equal to 0.25% of average daily net assets up to $20
million, 0.35% of average daily net assets between $20 million and $50 million,
and 0.40% of average daily net assets over $50 million of the Series for acting
as a sub-advisor to this Series. The Series does not pay any fees directly to
the sub-adviser.

DMC has elected to waive its fee and reimburse the Series to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and distribution
expenses, do not exceed 0.85% of average daily net assets of the Series through
April 30, 2001.

Social Awareness-7
<PAGE>

Social Awareness Series
Notes to Financial Statements (Continued)

On June 30, 2000, the Series had liabilities payable to affiliates as follows:

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases ................................. $7,284,134
Sales ..................................... $7,779,669

The cost of investments for federal income tax purposes approximates cost for
book purposes. At June 30, 2000 the aggregate cost of securities and unrealized
appreciation (depreciation) for the Series were as follows:
Aggregate Aggregate
Cost of unrealized unrealized Net unrealized
investments appreciation depreciation appreciation
----------- ------------ ------------ --------------
$29,343,091 $10,351,201 ($2,938,322) $7,412,879

For federal income tax purposes, the Series had accumulated capital losses at
June 30, 2000 as follows:

Year of Expiration
2006 2007 Total
-------- -------- --------
$103,467 $129,331 $232,798
4. Capital Shares
Transactions in capital shares were as follows:
Period Year
Ended Ended
6/30/00 12/31/99
------- --------
Shares sold:
Standard Class .................................. 303,165 1,034,353
Service Class ................................... 304 -

Shares issued upon reinvestment of dividends from
net investment income:
Standard Class .................................. 5,541 8,635
Service Class ................................... - -
-------- ---------
309,010 1,042,988
Shares repurchased:
Standard Class .................................. (332,566) (650,169)
Service Class ................................... - -
-------- ---------
(332,566) (650,169)
-------- ---------
Net increase (decrease) ............................ (23,556) 392,819
======== =========

6. Credit and Market Risk
The Series only invests in companies that meet its definition of "socially
responsible" and may be subject to certain risks as a result of investing
exclusively in socially responsible companies. By avoiding certain companies not
considered socially responsible, it could miss out on strong performance from
those companies.
Social Awareness-8

<PAGE>

Delaware Group Premium Fund-Strategic Income Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Market
Principal Value
Amount* (U.S. $)
CORPORATE BONDS-41.62%
Automobiles & Automotive Parts-1.26%
Avis Group Holdings 11.00% 5/1/09 .................. $200,000 $209,500
--------
209,500
--------
Banking, Finance & Insurance-0.89%
Banco Santander 6.50% 11/1/05 ...................... 50,000 47,839
Osprey Trust 8.31% 1/15/03 ......................... 100,000 100,380
--------
148,219
--------
Buildings & Materials-1.60%
Henry 10.00% 4/15/08 ............................... 200,000 131,000
K Hovnanian Enterprises 9.125% 5/1/09 .............. 150,000 133,500
--------
264,500
--------
Cable, Media & Publishing-4.56%
Adelphia Communications
9.375% 11/15/09 ................................. 150,000 139,500
American Media 10.25% 5/1/09 ....................... 100,000 98,500
Charter Communications Holdings
10.00% 4/1/09 ................................... 200,000 194,000
Muzak 9.875% 3/15/09 ............................... 200,000 185,000
PSiNet 10.00% 2/15/05 .............................. 150,000 138,750
--------
755,750
--------
Chemicals-2.55%
Du Pont (E.I.) de Nemours
6.75% 10/15/04 .................................. 100,000 98,838
General Chemical Industrial Products
10.625% 5/1/09 .................................. 200,000 175,000
Lyondell Chemical 9.625% 5/1/07 .................... 150,000 148,125
--------
421,963
--------
Computers & Technology-4.93%
Covad Communications Group
12.00% 2/15/10 .................................. 150,000 117,750
Exodus Communications
10.75% 12/15/09 ................................. 625,000 606,250
Seagate Technology 7.45% 3/1/37 .................... 100,000 93,659
--------
817,659
--------
Energy-1.54%
Frontier Oil 11.75% 11/15/09 ....................... 150,000 150,750
PSEG Energy Holdings 10.00% 10/1/09 ................ 100,000 105,098
--------
255,848
--------
Food, Beverage & Tobacco-1.48%
Big V Supermarkets 11.00% 2/15/04 .................. 150,000 119,250
Fleming Companies 10.625% 7/31/07 .................. 150,000 126,000
--------
245,250
--------
Industrial Machinery-1.16%
Alliance Laundry Systems
9.625% 5/1/08 ................................... 100,000 83,500
Holley Performance Products
12.25% 9/15/07 .................................. 150,000 108,750
--------
192,250
--------
Leisure, Lodging & Entertainment-3.19%
Cinemark USA 9.625% 8/1/08 ......................... 50,000 26,250
Hollywood Casino 11.25% 5/1/07 ..................... 200,000 205,500
Venetian Casino Resort 12.25% 11/15/04 ............. 150,000 152,250
YankeeNets 12.75% 3/1/07 ........................... 150,000 144,750
--------
528,750
--------
<PAGE>

Market
Principal Value
Amount* (U.S. $)
CORPORATE BONDS (Continued)
Metals & Mining-0.66%
Algoma Steel 12.375% 7/15/05 .................... $125,000 $ 109,375
----------
109,375
----------
Packaging & Containers-0.53%
Riverwood International
10.875% 4/1/08 ............................... 100,000 88,500
----------
88,500
----------
Retail-1.50%
Advance Stores 10.25% 4/15/08 ................... 300,000 249,000
----------
249,000
----------
Telecommunications-10.97%
Global Crossing 9.50% 11/15/09 .................. 150,000 145,500
KMC Telecom Holdings
13.50% 5/15/09 ............................... 175,000 154,875
Level 3 Communications
11.25% 3/15/10 ............................... 150,000 148,500
Metromedia Fiber Network
10.00% 11/15/08 .............................. 150,000 148,500
***Microcell Telecommunications
14.00% 6/1/06 ................................ 175,000 162,313
***Nextel Communications
10.65% 9/15/07 ............................... 300,000 237,000
Nextlink Communications
10.75% 11/15/08 .............................. 150,000 148,500
***Telecorp PCS 11.00% 4/15/09 ..................... 350,000 230,125
Voicestream Wireless
10.375% 11/15/09 ............................. 150,000 156,000
Williams Communications Group
10.875% 10/1/09 .............................. 150,000 147,375
Winstar Communications
12.75% 4/15/10 ............................... 150,000 140,625
----------
1,819,313
----------
Textiles, Apparel & Furniture-1.50%
McNaughton Apparel Group
12.50% 6/1/05 ................................ 150,000 135,000
Tommy Hilfiger USA 6.85% 6/1/08 ................. 175,000 112,960
----------
247,960
----------
Utilities-0.70%
RAS Laffan Liquid Natural Gas
8.294% 3/15/14 ............................... 125,000 115,781
----------
115,781
----------
Miscellaneous-2.60%
Allied Waste 10.00% 8/1/09 ...................... 250,000 210,000
Deutsche Telecome International
Financial 8.00% 6/15/10 ...................... 75,000 75,761
First Wave Marine 11.00% 2/1/08 ................. 100,000 59,500
Stagecoach Holdings
8.625% 11/15/09 .............................. 100,000 84,896
----------
430,157
----------
Total Corporate Bonds
(cost $7,341,557) ............................ 6,899,775
----------

Strategic Income-1
<PAGE>

Strategic Income Series
Statement of Net Assets (Continued)

Market
Principal Value
Amount* (U.S. $)
FOREIGN BONDS-34.89%
Australia-2.12%
New South Wales Treasury
7.00% 4/1/04 ................................. AUD 130,000 $ 79,374
Queensland Treasury
8.00% 8/14/01 ................................ 150,000 91,431
8.00% 8/14/01 ................................ 100,000 60,968
Toyota Finance Australia 7.00% 12/5/01 .......... 200,000 120,002
--------
351,775
--------
Austria-2.10%
Bank of Austria 10.875% 11/17/04 ................ 200,000 135,680
Republic of Austria 7.25% 5/3/07 ................ DEM 400,000 212,842
--------
348,522
--------
Canada-2.11%
General Electric Capital of Canada
7.125% 2/12/04 ............................... CAD 40,000 27,497
Government of Canada 10.25% 3/15/14 ............. 70,000 66,202
Ontario Province 6.25% 12/3/08 .................. NZD 400,000 171,594
Scott's Hospitality 10.95% 4/16/01 .............. CAD 100,000 16,391
Toyota Credit Canada 8.00% 12/29/00 ............. 100,000 68,070
--------
349,754
--------
Germany-0.50%
Deutschland Republic 6.25% 1/4/24 ............... EUR 80,000 82,783
--------
82,783
--------
Greece-1.52%
Hellenic Republic
8.60% 3/26/08 ................................ GRD 39,000,000 126,831
8.70% 4/8/05 ................................. 40,000,000 125,227
--------
252,058
--------
Italy-1.35%
Buoni Poliennali Del Tes
4.50% 5/1/09 ................................. EUR 160,000 141,922
9.50% 2/1/01 ................................. 83,000 81,300
--------
223,222
--------
Mexico-1.67%
Mexican Government 7.375% 7/6/06 ................ 290,000 276,834
--------
276,834
--------
Netherlands-2.02%
Bank Neder Gemeenten 9.125% 9/27/04 ............. CAD 250,000 184,716
Rabobank Nederland 9.75% 8/5/04 ................. 200,000 150,341
--------
335,057
--------
New Zealand-2.34%
New Zealand Government
8.00% 4/15/04 ................................ NZD 100,000 48,737
8.00% 11/15/06 ............................... 680,000 338,531
--------
387,268
--------
Poland-3.13%
Poland Government
6.00% 5/24/09 ................................ PLZ 700,000 106,100
12.00% 10/12/03 .............................. 2,000,000 412,342
--------
518,442
--------
South Africa-7.44%
Electric Supply Communication
11.00% 6/1/08 ................................ ZAR 2,100,000 258,414

<PAGE>

Market
Principal Value
Amount* (U.S. $)
FOREIGN BONDS (Continued)
South Africa (Continued)
Republic of South Africa
12.50% 1/15/02 ............................. ZAR 1,200,000 $ 178,208
12.50% 12/21/06 ............................ 3,300,000 455,028
13.00% 8/31/10 ............................. 1,300,000 179,406
Transnet 16.50% 4/1/10 ....................... 1,000,000 162,645
----------
1,233,701
----------
Supranational-2.41%
International Bank of Reconstruction
& Development 5.50% 4/15/04 ................ NZD 200,000 88,566
International Finance 6.75% 7/15/09 .......... 700,000 311,132
----------
399,698
----------
Sweden-4.72%
Swedish Government
8.00% 8/15/07 .............................. SEK 3,800,000 498,503
9.00% 4/20/09 .............................. 1,000,000 142,558
10.25% 5/5/03 .............................. 1,100,000 140,935
----------
781,996
----------
United Kingdom-1.16%
Halifax 5.625% 7/23/07 ....................... DEM 400,000 192,987
----------
192,987
----------
United States-0.30%
Toyota Motor Credit 7.50% 11/5/01 ............ ITL 100,000,000 50,595
----------
50,595
----------
Total Foreign Bonds
(cost $6,719,059) .......................... 5,784,692
----------

U.S. TREASURY OBLIGATIONS-2.55%
U.S. Treasury Bill 5.83% 3/1/01 .............. 100,000 96,305
U.S. Treasury Note
5.875% 11/15/04 ............................ 60,000 59,101
+6.125% 8/15/29 ............................. 240,000 242,761
6.50% 3/31/02 .............................. 25,000 25,016
----------
Total U.S. Treasury Obligations
(cost $425,035) ............................ 423,183
----------
Agency Mortgage-Backed Securities-13.23%
Federal Home Loan Mortgage
Corporation
6.50% 1/25/15 .............................. 100,000 97,247
6.85% 12/20/25 ............................. 100,000 96,467
7.375% 5/15/03 ............................. 75,000 75,762
8.00% 3/1/30 ............................... 299,254 301,125
Federal National Mortgage Association
6.50% 7/25/28 .............................. 42,606 41,661
6.625% 9/15/09 ............................. 30,000 28,981
+++7.09% 6/1/17 ............................... 475,000 143,159
7.25% 1/15/10 .............................. 290,000 292,866
7.50% 9/1/29 ............................... 88,188 86,976
Government National Mortgage
Association
7.50% 11/15/29 ............................. 373,001 370,903
8.00% 5/15/30 .............................. 449,956 455,159
8.00% 5/15/30 .............................. 200,001 202,313
----------
Total Agency Mortgage-Backed
Securities (cost $2,194,750) ............... 2,192,619
----------

Strategic Income-2

<PAGE>

Strategic Income Series
Statement of Net Assets (Continued)

Market
Principal Value
Amount* (U.S. $)
ASSET BACKED SECURITIES-1.27%
Countrywide Home Equity Loan
Series 97-1 A4 6.95% 5/25/21 ...................... $48,551 $ 48,095
MBNA Master Credit Card Trust Series
96-K A 6.78% 3/15/06 .............................. 15,000 15,015
NationsCredit Grantor Trust Series
97-1A 6.75% 8/15/13 ............................... 65,916 64,729
Philadelphia, Pennsylvania Authority For
Industrial Development Tax Claim
Revenue Class A 6.488% 6/15/04 .................... 88,423 82,399
--------
Total Asset-Backed Securities
(cost $219,116) ................................... 210,238
--------
COLLATERALIZED MORTGAGE OBLIGATIONS-2.12%
DLJ Commercial Mortgage Series
99-CG1 A1B 6.46% 1/10/09 .......................... 100,000 93,313
Lehman Large Loan Series
97-LLI A1 6.79% 6/12/04 ........................... 93,614 92,474
Nomura Asset Securities Series
931 A1 6.68% 12/15/01 ............................. 69,510 68,055
Residential Accredit Loans Series
98-QS9 A3 6.75% 7/25/28 ........................... 100,000 98,422
--------
Total Collateralized Mortgage
Obligations (cost $361,506) ....................... 352,264
--------

Market
Number of Value
Shares (U.S. $)
Preferred Stocks-0.00%
TCR Holdings
**Class B ........................................ 219 $ 2
**Class C ........................................ 121 1
**Class D ........................................ 318 3
**Class E ........................................ 658 7
----
Total Preferred Stocks
(cost $78) ....................................... 13
----
Warrants-0.00%
**American Banknote .................................. 3,745 300
----
Total Warrants (cost $3,011) ....................... 300
----

<PAGE>

<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES-95.68% (cost $17,264,112) .................................. $15,863,084

RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-4.32% ....................................... 715,521
-----------
NET ASSETS APPLICABLE TO 1,954,065 SHARES OUTSTANDING-100.00% ............................... $16,578,605
===========
NET ASSET VALUE-STRATEGIC INCOME SERIES STANDARD CLASS ($16,573,550 / 1,953,469 Shares) ..... $8.48
=====
NET ASSET VALUE-STRATEGIC INCOME SERIES SERVICE CLASS ($5,055 / 596 Shares) ................. $8.48
=====
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization-no par) .............................. $20,455,085
Undistributed net investment income++ ....................................................... 543,656
Accumulated net realized loss on investments ................................................ (3,014,483)
Net unrealized depreciation of investments and foreign currencies ........................... (1,405,653)
-----------
Total net assets ............................................................................ $16,578,605
===========
</TABLE>

-------------------
*Principal amount is stated in the currency in which each bond is denominated.

AUD-Australian Dollar NZD-New Zealand Dollar
CAD-Canadian Dollar PLZ-Polish Zloty
DEM-German DeutscheMark SEK-Swedish Kroner
EUR-European Monetary Unit US$-U. S. Dollar
GRD-Greek Drakma ZAR-South African Rand
ITL-Italian Lire

-------------------
**Non income producing security for the period ended June 30, 2000.
***Zero coupon security as of June 30, 2000. The coupon shown is the
step-up rate.
+Fully or partially pledged as collateral for financial futures contracts.
++Undistributed net investment income includes net realized gains (losses) on
foreign currencies. Net realized gains (losses) on foreign currencies are
treated as net investment income in accordance with provisions of the
Internal Revenue Code.
+++Zero coupon bond. The interest rate shown is the effective rate as of
June 30, 2000.

See accompanying notes

Strategic Income-3

<PAGE>

Delaware Group Premium Fund-
Strategic Income Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Interest .................................................... $ 830,531
Dividends ................................................... 1,860
-----------
832,391
-----------

EXPENSES:
Management fees ............................................. 57,274
Reports and statements to shareholders ...................... 4,525
Accounting and administration ............................... 3,619
Dividend disbursing and transfer agent
fees and expenses ........................................ 1,000
Registration fees ........................................... 1,000
Taxes (other than taxes on income) .......................... 900
Trustees' fees .............................................. 454
Custodian fees .............................................. 362
Professional fees ........................................... 250
Distribution expense-Service Class .......................... 1
Other ....................................................... 1,525
-----------
70,910

Less expenses paid indirectly ............................... (316)
-----------
Total expenses .............................................. 70,594
-----------

NET INVESTMENT INCOME ....................................... 761,797
-----------

NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCIES:
Net realized loss on:
Investments .............................................. (1,122,773)
Futures contracts ........................................ (6,523)
Options written .......................................... (8,374)
Foreign currencies ....................................... (179,221)
-----------
Net realized loss (1,316,891)

Net change in unrealized appreciation /
depreciation of investments and foreign currencies ....... 5,959
-----------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCIES ....................... (1,310,932)
-----------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS .......................................... $ (549,135)
===========
See accompanying notes

<PAGE>

Delaware Group Premium Fund-
Strategic Income Series
Statements of Changes in Net Assets

Six Months Year
Ended 6/30/00 Ended
(Unaudited) 12/31/99
------------- --------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ........................... $ 761,797 $ 1,681,193
Net realized loss on investments and
foreign currencies ........................... (1,316,891) (1,824,770)
Net change in unrealized appreciation /
depreciation of investments and
foreign currencies ........................... 5,959 (600,544)
----------- -----------
Net decrease in net assets resulting
from operations .............................. (549,135) (744,121)
----------- -----------

DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class ............................... (1,661,618) (1,197,603)
Service Class ................................ - -
----------- -----------
(1,661,618) (1,197,603)
----------- -----------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ............................... 965,380 5,634,142
Service Class ................................ 4,998 -
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
Standard Class ............................... 1,661,618 1,197,603
Service Class ................................ - -
----------- -----------
2,631,996 6,831,745
----------- -----------
Cost of shares repurchased:
Standard Class ............................... (3,684,457) (5,618,966)
Service Class ................................ - -
----------- -----------
(3,684,457) (5,618,966)
----------- -----------
Increase (decrease) in net assets derived
from capital share transactions .............. (1,052,461) 1,212,779
----------- -----------

NET DECREASE IN NET ASSETS ...................... (3,263,214) (728,945)
----------- -----------

NET ASSETS:
Beginning of period ............................. 19,841,819 20,570,764
----------- -----------
End of period ................................... $16,578,605 $19,841,819
=========== ===========

See accompanying notes

Strategic Income-4

<PAGE>

Delaware Group Premium Fund-Strategic Income Series
Financial Highlights

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

<TABLE>
<CAPTION>
Strategic Income Series Standard Class
Six Months 5/1/97(2)
Ended 6/30/00(1) Year Ended December 31, to
(Unaudited) 1999 1998 12/31/97
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $9.660 $10.600 $10.620 $10.000

Income (loss) from investment operations:
Net investment income(3) .................................. 0.393 0.779 0.832 0.523
Net realized and unrealized gain (loss)
on investments and foreign currencies .................. (0.668) (1.109) (0.557) 0.097
------ ------- ------- -------
Total from investment operations .......................... (0.275) (0.330) 0.275 0.620
------ ------- ------- -------

Less dividends and distributions:
Dividends from net investment income ...................... (0.905) (0.610) (0.270) none
Distributions from net realized gain
on investments ......................................... none none (0.025) none
------ ------- ------- -------
Total dividends and distributions ......................... (0.905) (0.610) (0.295) none
------ ------- ------- -------

Net asset value, end of period ............................ $8.480 $9.660 $10.600 $10.620
====== ======= ======= =======

Total return .............................................. (2.97%) (3.29%) 2.63% 6.20%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $16,574 $19,842 $20,571 $8,606
Ratio of expenses to average net assets ................... 0.80% 0.80% 0.80% 0.80%
Ratio of expenses to average net assets
prior to expense limitation
and expenses paid indirectly ........................... 0.80% 0.80% 0.81% 1.23%
Ratio of net investment income to average net assets ...... 8.65% 7.88% 7.90% 7.44%
Ratio of net investment income to average net assets
prior to expense limitation and expenses
paid indirectly ........................................ 8.65% 7.88% 7.89% 7.01%
Portfolio turnover ........................................ 150% 101% 143% 70%
</TABLE>

See accompanying notes

Strategic Income-5

<PAGE>

Delaware Group Premium Fund-Strategic Income Series
Financial Highlights (Continued)

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

Strategic Income
Series Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
--------------------

Net asset value, beginning of period ..................... $8.390

Income (loss) from investment operations:
Net investment income(2) ................................. 0.119
Net realized and unrealized loss on investments
and foreign currencies ................................ (0.029)
------
Total from investment operations ......................... 0.090
------
Less dividends and distributions:
Dividends from net investment income ..................... none
Distributions from net realized gain on investments ...... none
------
Total dividends and distributions ........................ none
------

Net asset value, end of period ........................... $8.480
======
Total return ............................................. 1.07%

Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $5
Ratio of expenses to average net assets .................. 0.95%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ....... 0.95%
Ratio of net investment income to average net assets ..... 8.50%
Ratio of net investment income to average net assets
prior to expense limitation and expenses
paid indirectly ....................................... 8.50%
Portfolio turnover ....................................... 150%

See accompanying notes

Strategic Income-6

<PAGE>

Delaware Group Premium Fund-Strategic Income Series
Notes to Financial Statements
June 30, 2000
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Strategic
Income Series (the "Series"). The Series is a diversified open-end investment
company under the Investment Company Act of 1940, as amended. The Series offers
two classes of shares. The Standard Class shares do not carry a 12b-1 fee and
the Service class shares do carry a 12b-1 fee. The shares of the Fund are sold
only to separate accounts of life insurance companies.

The investment objective of the Series is to seek high current income and total
return. It seeks to achieve its objective by investing primarily in three
sectors of the fixed-income market: high-yield, investment grade U.S. bonds and
high quality international fixed-income securities.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. Securities listed on a
foreign exchange are valued at the last quoted sales price before the Series is
valued. Long-term debt securities are valued by an independent pricing service
and such prices are believed to reflect the fair value of such securities. Money
market instruments having less than 60 days to maturity are valued at amortized
cost, which approximates market value. Other securities and assets for which
market quotations are not readily available are valued at fair value as
determined in good faith under the direction of the Fund's Board of Trustees.

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 daily. 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 does
isolate that portion of gains and losses on investments in debt securities which
are due to changes in the foreign exchange rate from that which are due to

<PAGE>

changes in market prices of debt securities. The Series reports certain foreign
currency related transactions as components of realized gains (losses) for
financial reporting purposes, whereas such components are treated as ordinary
income (loss) for federal income tax purposes.

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

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $204 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $112 for the period ended June 30, 2000. 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".

Strategic Income-7
<PAGE>

Strategic Income Series
Notes to Financial Statements (Continued)

2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Series
pays Delaware Management Company (DMC), the Investment Manager of the Series, an
annual fee which is calculated at the following rates: 0.65% of the first $500
million of average daily net assets of the Series, 0.60% on the next $500
million, 0.55% on the next $1,500 million and 0.50% on the average daily net
assets over $2,500 million. Delaware International Advisers Ltd., the
sub-adviser to this Series and an affiliate of DMC, receives one third of the
management fee paid to DMC for managing the foreign bond portion of the Series.

On June 30, 2000, the Series had liabilities payable to affiliates as follows:

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases ...................................... $12,512,795
Sales .......................................... $13,191,832

For federal income tax purposes the Series had accumulated capital losses at
June 30, 2000 as follows:

Year of Expiration
2006 2007 Total
------ ---------- ----------
$7,365 $1,573,761 $1,581,126

Strategic Income-8

<PAGE>

Strategic Income Series
Notes to Financial Statements (Continued)

4. Capital Shares
Transactions in capital shares were as follows:

Period Year
Ended Ended
6/30/00 12/31/99
------- --------
Shares sold:
Standard Class ...................................... 110,705 563,667
Service Class ....................................... 596 -

Shares issued upon reinvestment of dividends
from net investment income:
Standard Class ...................................... 193,436 120,241
Service Class ....................................... - -
--------- -------
304,737 683,908
Shares repurchased:
Standard Class ...................................... (404,858) (570,992)
Service Class ....................................... - -
--------- -------
(404,858) (570,992)
--------- -------
Net increase (decrease) .............................. (100,121) 112,916
========= =======
5. Line of Credit
The Series, along with certain other funds in the Delaware Investments Family of
Funds (the "Participants"), participate in a $683,500,000 revolving line of
credit facility to be used for temporary or emergency purposes as an additional
source of liquidity to fund redemptions of investor shares. The Participants are
charged an annual commitment fee, which is allocated across the Participants on
the basis of each fund's allocation of the entire facility. The Participants may
borrow up to a maximum of one third of their net assets under the agreement. No
amounts were outstanding at June 30, 2000, or at any time during the period.

No forward foreign currency exchange contracts were outstanding at June 30,
2000.

7. Futures Contracts
The Series invests in financial futures contracts for the purpose of hedging its
existing portfolio securities against fluctuations in fair value caused by
changes in prevailing market rates. Upon entering into a futures contract, the
Series deposits cash or pledges U.S. government securities to a broker, equal to
the minimum "initial margin" requirements of the exchange on which the contract
is traded. (In some cases, due to the form of the futures agreement, initial
margin is held in a segregated account with the Series' custodian, rather than
directly with the broker.) Subsequent payments are received from the broker or
paid to the broker (or added to the segregated account) each day, based on the
daily fluctuation in the market value of the contract. These receipts or
payments are known as "variation margin" and are recorded daily by the Series as
unrealized gains or losses until the contracts are closed. When the contracts

<PAGE>

are closed, the Series records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at the
time it was closed. Risk may arise upon entering into futures contracts from
potential imperfect correlation between the futures contracts and the underlying
securities and from the possibility of an illiquid secondary market for these
instruments.

Financial futures contracts open at June 30, 2000 were as follows:

Contracts Notional Expiration Unrealized
to buy cost amount date gain
--------- ----------- ---------- ----------
2 U.S. Treasury 10 year notes $195,000 9/00 $1,969

Strategic Income-9

<PAGE>

Strategic Income Series
Notes to Financial Statements (Continued)

8. Options Written
During the period ended June 30, 2000, the Series entered into options contracts
in accordance with its investment objectives. When the Series writes an option,
a premium is received and a liability is recorded and adjusted on a daily basis
to reflect the current market value of the option written. Premiums received
from writing options that expire unexercised are treated by the Series on the
expiration date as realized gains from investments. The difference between the
premium and the amount paid on effecting a closing purchase transaction,
including brokerage commissions, is also treated as a realized gain or loss. If
a call option is exercised, the premium is added to the proceeds from the sale
of the underlying security in determining whether the Series has realized a gain
or loss. If a put option is exercised, the premium reduces the cost basis of the
securities purchased by the Series. The Series as writer of an option bears the
market risk of an unfavorable change in the price of the security underlying the
written option.

Transactions in options written during the period ended June 30, 2000 for the
Series were as follows:

Number Premiums
Of Contracts Received
------------ --------
Options outstanding at December 31, 1999 ............ - $ -
Options written ..................................... 22 5,953
Options terminated in closing purchase transaction .. (22) (5,953)
--- -------
Options written outstanding at June 30, 2000 ........ - -
=== =======
9. 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 portion 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 in high-yield fixed income securities which carry ratings
of BB or lower by S&P and/or Ba or lower by Moody's. Investments in these higher
yielding securities may be accompanied by a greater degree of credit risk than
higher rated securities. Additionally, lower rated securities may be more
susceptible to adverse economic and competitive industry conditions than
investment grade securities.

Strategic Income-10

<PAGE>

Delaware Group Premium Fund - Trend Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Number of Market
Shares Value

COMMON STOCK-92.67%
Banking, Finance & Insurance-2.21%
Doral Financial ............................... 277,400 $ 3,172,763
Metris ........................................ 352,950 8,867,869
*Radian Group .................................. 22,500 1,146,094
Webster Financial ............................. 232,300 5,154,156
------------
18,340,882
------------
Business Services-9.63%
*BISYS Group ................................... 211,400 13,001,100
*+Bright Horizons Family Solutions .............. 307,900 6,581,363
*Corporate Executive Board ..................... 226,400 13,555,700
*Diamond Technology Partners ................... 92,800 8,166,400
*+Digital Insight ............................... 91,700 3,117,800
*ESpeed ........................................ 153,700 6,676,344
*+Exult ......................................... 16,000 160,000
*Hall,Kinion & Associates ...................... 81,900 2,728,294
*Heidrick & Struggles .......................... 41,100 2,594,438
*Trimeris ...................................... 198,100 13,854,619
*Trimeris Restricted ........................... 28,800 2,014,200
*West Teleservices ............................. 288,200 7,295,063
------------
79,745,321
------------
Cable, Media & Publishing-2.52%
*Acme Communications ........................... 89,300 1,629,725
*Radio One ..................................... 197,700 5,844,506
*+Radio One - Class D ........................... 395,400 8,723,513
True North Communications ..................... 107,100 4,712,400
------------
20,910,144
------------
Chemicals-2.09%
*Mettler-Toledo International .................. 433,400 17,336,000
------------
17,336,000
------------
Computers & Technology-16.63%
*12 Technologies ............................... 137,335 14,319,320
*Broadbase Software ............................ 244,200 7,478,625
*Caresience .................................... 254,700 2,690,269
*Cysive ........................................ 175,100 4,180,513
*Exchange Applications ......................... 206,000 5,484,750
*Extensity ..................................... 115,400 3,952,450
+Henry(Jack) & Associates ...................... 425,000 21,303,125
*+Lam Research .................................. 208,300 7,811,250
*NetIQ ......................................... 191,500 11,418,188
*New Era of Networks ........................... 312,000 13,260,000
*+Onyx Software ................................. 191,900 5,697,031
*+Register.com .................................. 103,300 3,157,106
*RSA Security .................................. 102,100 7,070,425
*+Sanchez Computer Associates ................... 23,000 546,250
*+Veritas Software .............................. 259,887 29,371,292
------------
137,740,594
------------
Consumer Products-1.94%
+Gemstar International Group Limited ........... 261,700 16,082,283
------------
16,082,283
------------

<PAGE>

Number of Market
Shares Value

COMMON STOCK (Continued)
Electronics & Electrical Equipment-16.56%
*Advanced Energy Industries .................... 184,400 $ 10,868,075
*Applied Micro Circuits ........................ 285,600 28,203,000
*LTX ........................................... 280,400 9,796,475
*Micrel ........................................ 740,000 32,143,750
*Novellus Systems .............................. 142,000 8,031,875
*PMC - Sierra .................................. 193,400 34,364,763
*Teradyne ...................................... 187,100 13,751,850
------------
137,159,788
------------
Food, Beverage & Tobacco-0.52%
*American Italian Pasta - Class A .............. 207,000 4,282,313
------------
4,282,313
------------
Healthcare & Pharmaceuticals-7.62%
*CIMA Labs ..................................... 103,300 2,091,825
*CIMA Labs Restricted .......................... 60,600 1,173,155
*+Cubist Pharmaceuticals ........................ 126,300 6,220,275
*Cubist Pharmaceuticals Restricted ............. 57,300 2,822,025
*+Exelixis ...................................... 70,500 2,352,938
*+Inhale Therapeutic Systems .................... 72,700 7,376,778
*+Intrabiotics Pharmaceuticals .................. 338,400 9,031,050
*Neurocrine Biosciences ........................ 115,500 4,107,469
*Pharmacopeia .................................. 71,600 3,320,450
*Pharmacopeia Restricted ....................... 120,300 5,578,913
*+United Therapeutics ........................... 151,000 16,364,625
*Wesley Jessen VisionCare ...................... 72,500 2,723,281
------------
63,162,784
------------
Industrial Machinery-0.01%
*Spinnaker Industries Class A .................. 4,500 45,281
------------
45,281
------------
Leisure, Lodging & Entertainment-6.38%
*+CEC Entertainment ............................. 470,400 12,054,000
*Extended Stay America ......................... 421,400 3,897,950
*Insight Communications ........................ 61,100 954,688
Morrison Management Specialist ................ 70,840 1,996,803
+Ruby Tuesday .................................. 397,600 4,994,850
*Sonic ......................................... 368,350 10,820,281
*The Cheesecake Factory ........................ 435,150 11,966,625
*Westwood One .................................. 181,400 6,190,275
------------
52,875,472
------------
Retail-11.80%
*Cost Plus ..................................... 444,825 12,760,917
*Dollar Tree Stores ............................ 658,500 26,051,906
*+Duane Reade ................................... 388,600 10,006,450
*Getty Images .................................. 236,400 8,761,575
*+Hot Topic ..................................... 246,300 7,881,600
*Linens'n Things ............................... 408,800 11,088,700
MSC Industrial Direct Class A ................. 38,700 810,281
Schultz Sav-O Stores .......................... 30,000 311,250
*+Too ........................................... 323,000 8,216,313
*+Tweeter Home Entertainment Group .............. 376,300 11,430,113
*West Marine ................................... 69,000 472,219
------------
97,791,324
------------

Trend Series-1
<PAGE>

Trend Series
Statement of Net Assets (Continued)

Number of Market
Shares Value

COMMON STOCK (Continued)
Telecommunications-14.76%
*+Concord Communications ........................ 128,900 $ 5,139,888
*+Digital Island ................................ 181,800 8,840,025
*Ditech Communications ......................... 4,900 463,356
*Dycom ......................................... 454,350 20,900,100
*eLoyalty ...................................... 128,100 1,633,275
*+Nextlink Communications Class A ............... 580,600 22,026,513
*Network Appliance ............................. 445,700 35,878,850
*Pinnacle Holdings ............................. 331,100 17,879,400
*SBA Communcations ............................. 182,500 9,478,594
------------
122,240,001
------------
Total Common Stock
(cost $529,784,894) .......................... 767,712,187
------------

Principal
Amount
REPURCHASE AGREEMENTS-7.88%
With J.P. Morgan Securities
6.40% 7/3/00 (dated 6/30/00,
collateralized by $13,190,000
U.S. Treasury Notes 5.875%
due 11/15/04, market value
$13,099,374 and $8,500,000 U.S.
Treasury Notes 7.875% due
11/15/04, market value $9,088,906) ............. $21,730,000 21,730,000

<PAGE>

Principal Market
Amount Value
REPURCHASE AGREEMENTS (Continued)
With PaineWebber
6.50% 7/3/00 (dated 6/30/00,
collateralized by $5,276,000
U.S. Treasury Notes 5.25%
due 5/31/01, market value
$5,244,885 and $4,166,000 U.S.
Treasury Notes 6.25% due
10/31/01, market value
$4,196,999 and $5,935,000 U.S.
Treasury Notes 6.125% due
12/31/01, market value $5,908,751
and $6,595,000 U.S. Treasury
Notes 7.25% due 5/15/04,
market value $6,864,717) ....................... $21,763,000 $21,763,000
With Prudential Securities
6.50% 7/3/00 (dated 6/30/00,
collateralized by $5,935,000
U.S. Treasury Notes 4.50%
due 9/30/00, market value
$5,981,805 and $1,691,000 U.S.
Treasury Notes 4.625% due
11/30/00, market value
$1,686,902 and $5,935,000 U.S.
Treasury Notes 15.75% due
11/15/01, market value $6,764,776
and $6,595,000 U.S. Treasury
Notes 11.875% due 11/15/03,
market value $7,779,163) ....................... 21,764,000 21,764,000
------------
Total Repurchase Agreements
(cost $65,257,000) $ 65,257,000
------------

TOTAL MARKET VALUE OF SECURITIES-100.55% (cost $595,041,894) .... $832,969,187

LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(0.55%) ......... (4,519,123)
------------
NET ASSETS APPLICABLE TO 22,591,788 SHARES OUTSTANDING-100.00% .. $828,450,064
============
NET ASSET VALUE-TREND SERIES STANDARD CLASS
($828,444,857 / 22,591,646 SHARES) ............................. $36.67
======
NET ASSET VALUE-TREND SERIES SERVICE CLASS
($5,207 / 142 SHARES) .......................................... $36.67
======
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest
(unlimited authorization - no par) ............................. $583,325,475
Accumulated net realized gain on investments .................... 7,197,296
Net unrealized appreciation of investments ...................... 237,927,293
------------
Total net assets ................................................ $828,450,064
============

-----------
* Non-income producing security for the period ended June 30, 2000.
+ Security is partially or fully on loan.

See accompanying notes

Trend Series-2
<PAGE>

Delaware Group Premium Fund-
Trend Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Interest ....................................................... $ 2,223,850
Dividends ...................................................... 194,707
-----------
2,418,557
-----------
EXPENSES:
Management fees ................................................ 2,625,392
Accounting and administration .................................. 117,000
Registration fees .............................................. 47,570
Professional fees .............................................. 44,250
Reports and statements to shareholders ......................... 32,000
Dividend disbursing and transfer agent .........................
fees and expenses ............................................. 28,335
Custodian fees ................................................. 16,600
Taxes (other than taxes on income) ............................. 9,500
Trustees' fees ................................................. 2,320
Distribution expense - Service Class ........................... 1
Other .......................................................... 54,087
-----------
2,977,055
Less expenses paid indirectly .................................. (30,980)
-----------
Total expenses ................................................. 2,946,075
-----------

NET INVESTMENT LOSS ............................................ (527,518)
-----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS:
Net realized gain on investments ............................... 8,668,090
Net change in unrealized appreciation /
depreciation of investments ................................... 71,203,701
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS ................................................ 79,871,791
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............................................... $79,344,273
===========

See accompanying notes

<PAGE>

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

Six Months Year
Ended 6/30/00 Ended
(Unaudited) 12/31/99
------------- --------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment loss ........................... ($527,518) ($431,269)
Net realized gain on investments .............. 8,668,090 42,917,993
Net change in unrealized appreciation /
depreciation of investments .................. 71,203,701 125,502,501
------------ ------------
Net increase in net assets
resulting from operations .................... 79,344,273 167,989,225
------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income:
Standard Class ............................... - (17,149)
Service Class ................................ - -
Net realized gain on investments:
Standard Class ............................... (42,073,039) -
Service Class ................................ - -
------------ ------------
(42,073,039) (17,149)
------------ ------------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ............................... 372,151,596 299,364,862
Service Class ................................ 5,000 -
Net asset value of shares issued upon
reinvestment of distributions from net
investment income and net realized
gain on investments:
Standard Class ............................... 42,073,039 17,149
Service Class ................................ - -
------------ ------------
414,229,635 299,382,011
------------ ------------
Cost of shares repurchased:
Standard Class ............................... (126,708,096) (131,948,006)
Service Class ................................ - -
------------ ------------
(126,708,096) (131,948,006)
------------ ------------
Increase in net assets derived from capital
share transactions ........................... 287,521,539 167,434,005
------------ ------------
NET INCREASE IN NET ASSETS .................... 324,792,773 335,406,081
------------ ------------
NET ASSETS:
Beginning of period ........................... 503,657,291 168,251,210
------------ ------------
End of period ................................. $828,450,064 $503,657,291
============ ============

See accompanying notes

Trend Series-3

<PAGE>

Delaware Group Premium Fund-Trend Series
Financial Highlights

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

<TABLE>
<CAPTION>
Trend Series Standard Class
Six Months
Ended 6/30/00(1) Year Ended December 31,
(Unaudited) 1999 1998 1997 1996 1995
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $33.660 $19.760 $17.380 $14.560 $14.020 $10.160

Income (loss) from investment operations:
Net investment income (loss)(2) ....................... (0.025) (0.043) 0.006 0.019 0.050 0.098
Net realized and unrealized gain on investments ....... 5.168 13.945 2.736 3.031 1.380 3.852
------- ------- ------- ------- ------- -------
Total from investment operations ...................... 5.143 13.902 2.742 3.050 1.430 3.950
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .................. none (0.002) (0.020) (0.050) (0.090) (0.090)
Distributions from net realized gain on investments ... (2.133) none (0.342) (0.180) (0.800) none
------- ------- ------- ------- ------- -------
Total dividends and distributions ..................... (2.133) (0.002) (0.362) (0.230) (0.890) (0.090)
------- ------- ------- ------- ------- -------
Net asset value, end of period ........................ $36.670 $33.660 $19.760 $17.380 $14.560 $14.020
======= ======= ======= ======= ======= =======
Total return .......................................... 14.58% 70.45% 16.04% 21.37% 11.00% 39.21%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $828,445 $503,657 $168,251 $118,276 $56,423 $20,510
Ratio of expenses to average net assets(3) ............ 0.82% 0.82% 0.81% 0.80% 0.80% 0.80%
Ratio of expenses to average net assets
prior to expense limitation and expenses
paid indirectly ...................................... 0.82% 0.82% 0.85% 0.88% 0.92% 0.96%
Ratio of net investment income (loss) to
average net assets ................................... (0.15%) (0.18%) 0.03% 0.16% 0.56% 1.03%
Ratio of net investment income (loss) to average net
assets prior to expense limitation and expenses
paid indirectly ...................................... (0.15%) (0.18%) (0.01%) 0.08% 0.44% 0.87%
Portfolio turnover .................................... 76% 82% 121% 125% 112% 76%
</TABLE>

-----------
(1)Ratios have been annualized and total return has not been annualized.
(2)Per share information for the period ended June 30, 2000 was based on the
average shares outstanding method.
(3)Ratio for the period ended June 30, 2000 including fees paid indirectly in
accordance with Securities and Exchange Commission rules was 0.83%.

See accompanying notes

Trend Series-4

<PAGE>

Delaware Group Premium Fund-Trend Series
Financial Highlights (Continued)

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

Trend Series
Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
-------------

Net asset value, beginning of period ............................ $35.260

Income (loss) from investment operations:
Net investment loss(2) .......................................... (0.025)
Net realized and unrealized gain on investments ................. 1.435
-------
Total from investment operations ................................ 1.410
-------
Less dividends and distributions:
Dividends from net investment income ............................ none
Distributions from net realized gain on investments ............. none
-------
Total dividends and distributions ............................... none
-------

Net asset value, end of period .................................. $36.67
======
Total return .................................................... 4.00%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ......................... $5
Ratio of expenses to average net assets(3) ...................... 0.97%
Ratio of expenses to average net assets prior
to expense limitation and expenses paid indirectly ............. 0.97%
Ratio of net investment loss to average net assets .............. (0.30%)
Ratio of net investment loss to average net assets prior
to expense limitation and expenses paid indirectly ............. (0.30%)
Portfolio turnover .............................................. 76%

-----------
(1)Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2)Per share information was based on the average shares outstanding method.
(3)Ratio including fees paid indirectly in accordance with Securities and
Exchange Commission rules was 0.98%.

See accompanying notes

Trend Series-5

<PAGE>

Delaware Group Premium Fund-Trend Series
Notes to Financial Statements
June 30, 2000 (Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to Trend Series
(the "Series"). The Series is a diversified open-end investment company under
the Investment Company Act of 1940, as amended. The Series offers two classes of
shares. The Standard Class shares do not carry a 12b-1 fee and the Service class
shares do carry a 12b-1 fee. The shares of the Fund are sold only to separate
accounts of life insurance companies.

The objective of the Series is to seek long-term capital appreciation. It
attempts to achieve this objective by investing primarily in small
growth-oriented companies that we believe are responsive to changes in the
marketplace and have the fundamental characteristics to support continued
growth.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. 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 under the direction of the Fund's Board of Trustees.

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

<PAGE>

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $8,263 for the period ended June 30, 2000. The
Series may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. These credits
were $22,717 for the period ended June 30, 2000. 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".

DMC has elected to waive its fee and reimburse the Series to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and distribution
expenses, do not exceed 0.85% of average daily net assets of the Series through
April 30, 2001. No reimbursement was due for the period ended June 30, 2000.

Trend Series-6

<PAGE>

Trend Series
Notes to Financial Statements (Continued)

On June 30, 2000, the Series had liabilities payable to affiliates as follows:

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases .................................... $485,723,746
Sales ........................................ $243,350,019

4. Capital Shares
Transactions in capital shares were as follows:

Period Year
ended ended
6/30/00 12/31/99
------- --------
Shares sold:
Standard Class ....................................... 10,099,842 12,063,724
Service Class ........................................ 142 -

Shares issued upon reinvestment of distributions
from net investment income and net realized gain
on investments:
Standard Class ....................................... 1,020,942 895
Service Class ........................................ - -
---------- ----------
11,120,926 12,064,619
Shares repurchased:
Standard Class ....................................... (3,493,737) (5,616,834)
Service Class ........................................ - -
---------- ----------
(3,493,737) (5,616,834)
---------- ----------
Net increase .......................................... 7,627,189 6,447,785
========== ==========
5. Line of Credit
The Series, along with certain other funds in the Delaware Investments Family of
Funds (the "Participants"), participate in a $683,500,000 revolving line of
credit facility to be used for temporary or emergency purposes as an additional
source of liquidity to fund redemptions of investor shares. The Participants are
charged an annual commitment fee, which is allocated across the Participants on
the basis of each fund's allocation of the entire facility. The Participants may
borrow up to a maximum of one third of their net assets under the agreement. No
amounts were outstanding at June 30, 2000, or at any time during the period.

Trend Series-7

<PAGE>

Trend Series
Notes to Financial Statements (Continued)

Market value of Market value of
securities on loan collateral
------------------ ----------------
$117,917,926 $118,486,250

Net income from securities lending activities for the period ended June 30, 2000
was $268,104 and is included in interest income on the Statement of Operations.

Trend Series-8

<PAGE>

Delaware Group Premium Fund-U.S. Growth Series
Statement of Net Assets
June 30, 2000 (Unaudited)

Number of Market
Shares Value

COMMON STOCK-98.35%
Banking, Finance & Insurance-4.56%
Citigroup .............................. 12,000 $ 723,000
Morgan Stanley Dean Witter ............. 7,500 624,375
---------
1,347,375
---------
Cable, Media & Publishing-5.97%
The News Corporation ................... 14,900 812,050
Time Warner ............................ 2,800 212,800
*Viacom-Class B ......................... 10,850 739,834
---------
1,764,684
---------
Computers & Technology-24.07%
*Cisco Systems .......................... 11,200 711,900
Corning ................................ 3,000 809,625
*EMC .................................... 9,400 723,213
*General Motors-Class H ................. 7,600 666,900
Hewlett-Packard ........................ 4,100 511,987
International Business Machines ........ 7,200 788,850
*Microsoft .............................. 10,500 840,000
*Oracle ................................. 6,000 504,375
SAP AG ADR ............................. 9,300 436,519
*Sun Microsystems ....................... 5,000 454,687
*Yahoo .................................. 5,400 668,925
---------
7,116,981
---------
Electronics & Electrical Equipment-14.40%
*Agilent Technologies ................... 1,563 115,271
*Applied Materials ...................... 3,200 290,000
*Celestica .............................. 12,000 595,500
Emerson Electric ....................... 16,600 1,002,225
Intel .................................. 7,000 935,813
*National Semiconductor ................. 5,500 312,125
*PMC-Sierra ............................. 2,500 444,219
Texas Instruments ...................... 8,200 563,238
---------
4,258,391
---------
Energy-11.53%
*AES .................................... 12,000 547,500
Dynegy ................................. 13,500 922,218
Enron .................................. 11,000 709,500
Schlumberger ........................... 5,500 410,438
*Transocean Sedco Forex ................. 15,345 819,998
---------
3,409,654
---------

<PAGE>

Number of Market
Shares Value

COMMON STOCK (Continued)
Healthcare & Pharmaceuticals-17.86%
Abbott Laboratories ..................... 13,500 $ 601,594
Celera Genomics Group ................... 4,200 392,700
Eli Lilly ............................... 7,400 739,075
*Genentech ............................... 5,000 860,000
*Guidant ................................. 9,000 445,500
*Inhale Therapeutic Systems 6,000 608,813
Johnson & Johnson ....................... 7,000 713,125
Medtronic ............................... 4,100 204,230
PE Biosystems Group ..................... 10,800 711,450
----------
5,276,487
----------
Retail-4.06%
Home Depot .............................. 12,500 624,219
Wal-Mart Stores ......................... 10,000 576,250
----------
1,200,469
----------
Telecommunications-15.90%
*Ciena ................................... 6,000 1,000,125
*Exodus Communications ................... 16,000 737,000
*Network Appliance ....................... 5,700 458,850
*NEXTEL Communications ................... 11,000 673,063
Nokia ................................... 12,000 599,250
*Sprint .................................. 9,000 535,500
*Voicestream Wireless .................... 6,000 697,781
----------
4,701,569
----------
Total Common Stock
(cost $25,862,115) ..................... 29,075,610
----------

U.S. Growth-1
<PAGE>

U.S. Growth Series
Statement of Net Assets (Continued)

Principal Market
Amount Value

REPURCHASE AGREEMENTS - 0.96%
With J.P. Morgan Securities 6.40% 7/3/00
(dated 6/30/00, collateralized by
$57,000 U.S. Treasury Notes
5.875% due 11/15/04, market
value $56,808 and $37,000
U.S. Treasury Notes 7.875% due
11/15/04, market value $39,416) .................... $94,200 $94,200
With PaineWebber 6.50% 7/3/00
(dated 6/30/00, collateralized by
$23,000 U.S. Treasury Notes 5.25% due
5/31/01, market value $22,745 and
$18,000 U.S. Treasury Notes 6.25% due
10/31/01, market value $18,201 and
$26,000 U.S. Treasury Notes 6.125% due
12/31/01, market value $25,624 and
$29,000 U.S. Treasury Notes 7.25% due
5/15/04, market value $29,770) ..................... 94,400 94,400

<PAGE>

Principal Market
Amount Value

REPURCHASE AGREEMENTS (Continued)
With Prudential Securities 6.50% 7/3/00
(dated 6/30/00, collateralized by
$26,000 U.S. Treasury Notes 4.50% due
9/30/00, market value $25,941 and
$7,000 U.S. Treasury Notes 4.625% due
11/30/00, market value $7,316 and
$26,000 U.S. Treasury Notes 15.75% due
11/15/01, market value $29,337 and
$29,000 U.S. Treasury Notes 11.875% due
11/15/03, market value $33,736) ................... $94,400 $ 94,400
-------
Total Repurchase Agreements
(cost $283,000) ................................... 283,000
-------

<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES-99.31% (COST $26,145,115) .......................... $29,358,610

RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-0.69% ............................... 203,799
-----------
NET ASSETS APPLICABLE TO 2,591,488 SHARES OUTSTANDING-100.00% ....................... $29,562,409
===========
NET ASSET VALUE-U.S. GROWTH SERIES STANDARD CLASS ($29,557,181/2,591,030 SHARES) .... $11.41
======
NET ASSET VALUE-U.S. GROWTH SERIES SERVICE CLASS ($5,228/458 SHARES) ................ $11.41
======
COMPONENTS OF NET ASSETS AT JUNE 30, 2000:
Shares of beneficial interest (unlimited authorization - no par) .................... $27,424,428
Undistributed net investment income 112,692
Accumulated net realized loss on investments ........................................ (1,188,206)
Net unrealized appreciation of investments .......................................... 3,213,495
-----------
Total net assets .................................................................... $29,562,409
===========
</TABLE>

----------
*Non-income producing security for the period ending June 30, 2000.
ADR-American Depositary Receipt

See accompanying notes

U.S. Growth-2

<PAGE>

Delaware Group Premium Fund-
U.S. Growth Series
Statement of Operations
Six Months Ended June 30, 2000
(Unaudited)

INVESTMENT INCOME:
Interest ....................................... $ 164,379
Dividends ...................................... 33,210
----------
197,589
----------
EXPENSES:
Management fees ................................ 72,598
Accounting and administration .................. 4,630
Reports and statements to shareholders 1,340
Registration fees .............................. 1,000
Dividend disbursing and transfer agent
fees and expenses ........................... 910
Professional fees .............................. 910
Custodian fees ................................. 655
Trustee's fees ................................. 262
Taxes (other than taxes on income) ............. 150
Distribution expense-Service Class ............. 1
Other .......................................... 1,245
----------
83,701
Less expenses absorbed or waived ............... (672)
Less expenses paid indirectly .................. (260)
----------
Total expenses ................................. 82,769
----------
NET INVESTMENT INCOME .......................... 114,820
----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized loss on investments ............... (1,188,206)
Net change in unrealized appreciation/
depreciation of investments ................. 2,853,424
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS .............................. 1,665,218
----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................... $1,780,038
==========

See accompanying notes
<PAGE>

Delaware Group Premium Fund-
U.S. Growth Series
Statements of Changes in Net Assets

Six Months 11/15/99*
Ended 6/30/00 to
(Unaudited) 12/31/99
----------- --------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income ........................ $ 114,820 $ 21,462
Net realized loss on investments ............. (1,188,206) --
Net change in unrealized appreciation/
depreciation of investments ............... 2,853,424 360,071
----------- ----------
Net increase in net assets
resulting from operations ................. 1,780,038 381,533
----------- ----------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income:
Standard Class ............................ (23,590) --
Service Class ............................. -- --
----------- ----------
(23,590) --
----------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Standard Class ............................ 20,334,288 8,362,469
Service Class ............................. 5,000 --
Netasset value of shares issued upon
reinvestment of dividends from net
investment income:
Standard Class ............................ 23,590 --
Service Class ............................. -- --
----------- ----------
20,362,878 8,362,469
----------- ----------
Cost of shares repurchased:
Standard Class ............................ (1,300,497) (422)
Service Class ............................. -- --
----------- ----------
(1,300,497) (422)
----------- ----------
Increase in net assets derived from
capital share transactions ................ 19,062,381 8,362,047
----------- ----------
NET INCREASE IN NET ASSETS ................... 20,818,829 8,743,580
----------- ----------
NET ASSETS:
Beginning of period .......................... 8,743,580 --
----------- ----------
End of period ................................ $29,562,409 $8,743,580
=========== ==========

----------
*Date of commencement of operations.

See accompanying notes

U.S. Growth-3

<PAGE>

Delaware Group Premium Fund-U.S. Growth Series
Financial Highlights

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

<TABLE>
<CAPTION>
U.S. Growth Series Standard Class
Six Months
Ended 11/15/99(2)
6/30/00(1) To
(Unaudited) 12/31/99
----------- --------
<S> <C> <C>
Net asset value, beginning of period ........................... $10.590 $10.000

Income from investment operations:
Net investment income(3) ....................................... 0.063 0.026
Net realized and unrealized gain on investments ................ 0.768 0.564
------- -------
Total from investment operations ............................... 0.831 0.590
------- -------

Less dividends and distributions:
Dividends from net investment income ........................... (0.011) none
Distributions from net realized gain on investments ............ - none
------- -------
Total dividends and distributions .............................. (0.011) none
------- -------
Net asset value, end of period ................................. $11.410 $10.590
======= =======

Total return ................................................... 7.85% 5.90%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ........................ $29,557 $8,744
Ratio of expenses to average net assets ........................ 0.73% 0.75%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ...................... 0.74% 0.79%
Ratio of net investment income to average net assets ........... 1.02% 3.33%
Ratio of net investment income to average net assets prior
to expense limitation and expenses paid indirectly ........... 1.01% 3.29%
Portfolio turnover ............................................. 89% 0%
</TABLE>

See accompanying notes

U.S. Growth-4
<PAGE>

Delaware Group Premium Fund-U.S. Growth Series
Financial Highlights (Continued)

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

<TABLE>
<CAPTION>
U.S. Growth Series
Service Class
5/1/00(1)
to
6/30/00
(Unaudited)
------------------
<S> <C>
Net asset value, beginning of period ......................... $10.910

Income from investment operations:
Net investment income(2) ..................................... 0.002
Net realized and unrealized gain on investments .............. 0.498
-------
Total from investment operations ............................. 0.500
-------
Less dividends and distributions:
Dividends from net investment income ......................... none
Distributions from net realized gain on investments .......... none
-------
Total dividends and distributions ............................ none
-------
Net asset value, end of period ............................... $11.410
=======
Total return ................................................ 4.58%

Ratios and supplemental data:
Net assets, end of period (000 omitted) ...................... $5
Ratio of expenses to average net assets ...................... 0.88%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ............. 0.89%
Ratio of net investment income to average net assets ......... 0.87%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid indirectly .... 0.86%
Portfolio turnover ........................................... 89%
</TABLE>

----------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Per share information was based on the average shares outstanding method.

See accompanying notes

U.S. Growth-5
<PAGE>

Delaware Group Premium Fund-U.S. Growth Series
Notes to Financial Statements
June 30, 2000
(Unaudited)

Delaware Group Premium Fund (the "Fund") is organized as a Delaware business
trust and offers 18 series: Balanced Series (formerly Delaware Balanced Series),
Capital Reserves Series, Cash Reserve Series, Convertible Securities Series,
Devon Series, Emerging Markets Series, Global Bond Series, Growth and Income
Series, Growth Opportunities Series (formerly DelCap Series), High Yield Series
(formerly Delchester Series), International Equity Series, REIT Series, Select
Growth Series (formerly Aggressive Growth Series), Small Cap Value Series,
Social Awareness Series, Strategic Income Series, Trend Series and U.S. Growth
Series. These financial statements and the related notes pertain to U.S. Growth
Series (the "Series"). The Series is a diversified open-end investment company
under the Investment Company Act of 1940, as amended. The Series offers two
classes of shares. The Standard Class shares do not carry a 12b-1 fee and the
Service class shares do carry a 12b-1 fee. The shares of the Fund are sold only
to separate accounts of life insurance companies.

The investment objective of the Series is to seek to provide maximum capital
appreciation. It invests primarily in companies of all sizes that the investment
manager believes will grow faster than the U.S. economy in general.

1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Series.

Security Valuation--All equity securities are valued at the last quoted sales
price as of the regular close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. 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 under the direction of the Fund's Board of Trustees.

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

Certain expenses of the Series are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $260 for the period ended June 30, 2000. 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
credits for the period ended June 30, 2000. 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".

<PAGE>

DMC has elected to waive its fee and reimburse the Series to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and distribution
expenses, do not exceed 0.75% of average daily net assets of the Series through
April 30, 2001.

U.S. Growth-6

<PAGE>

U.S. Growth Series
Notes to Financial Statements (Continued)

On June 30, 2000, the Series had liabilities payable to affiliates as follows:

<TABLE>
<CAPTION>
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
--------------- ------------------- --------------
<S> <C> <C> <C>
$76,503 $5,495 $2,975
</TABLE>

Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.

3. Investments
During the period ended June 30, 2000, the Series made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:

Purchases ....... $29,834,038
Sales ........... $ 7,740,221

4. Capital Shares
Transactions in capital shares were as follows:
Period 11/15/99*
ended to
6/30/00 12/31/99
--------- ---------
Shares sold:
Standard Class .................................... 1,881,079 825,396
Service Class ..................................... 458 -

Shares issued upon reinvestment of dividends
from net investment income:
Standard Class .................................... 2,050 -
Service Class ..................................... - -
--------- -------
1,883,587 825,396
Shares repurchased:
Standard Class .................................... (117,454) (41)
Service Class ..................................... - -
--------- -------
(117,454) (41)
--------- -------
Net increase ......................................... 1,766,133 825,355
========= =======

----------
*Date of commencement of operations.

U.S. Growth-7