<PAGE>
DELAWARE(SM)
INVESTMENTS
------------
Delaware REIT Fund
Total Return
2000 ANNUAL REPORT
(Total Return Artwork)
<PAGE>
TABLE OF CONTENTS
-----------------
Letter to Shareholders 1
Portfolio Management
Review 3
Performance Summary 5
Financial Statements
Statement of Net Assets 6
Statement of Operations 8
Statements of Changes in
Net Assets 9
Financial Highlights 10
Notes to Financial
Statements 15
Report of Independent
Auditors 18
<PAGE>
A TRADITION OF SOUND INVESTING SINCE 1929
-----------------------------------------
A Commitment To Our Investors
Experienced
[ ] Our seasoned investment professionals average 11 years' experience.
[ ] We began managing investments in 1929 and opened our first mutual fund in
1938. Over the past 70 years, we have weathered a full range of economic and
market environments.
Disciplined
[ ] We follow strict investment policies and clear buy/sell guidelines.
[ ] We strive to balance risk and reward in order to provide sound investment
alternatives within any given asset class.
Consistent
[ ] We clearly articulate our investment policies and follow them consistently.
[ ] Our commitment to consistency has earned us the confidence of
discriminating institutional and individual investors to manage more than
$44 billion in assets as of September 30, 2000.
Comprehensive
[ ] We offer more than 70 mutual funds in these asset classes.
o Large-cap equity o High-yield bonds
o Mid-cap equity o Investment grade bonds
o Small-cap equity o Municipal bonds
o International equity (single-state and national funds)
o Balanced o International fixed-income
[ ] Our funds are available through financial advisers who can offer you
individualized attention and valuable investment advice.
Funds are not FDIC insured and are not guaranteed. It is possible to lose the
principal amount invested.
(C)Delaware Distributors, L.P.
<PAGE>
"REIT INDEXES BEGAN TRENDING UPWARD AROUND THE NEW YEAR, THEN CONTINUED TO GAIN
GROUND IN THE SECOND QUARTER OF 2000 WHILE THE REST OF THE U.S. STOCK MARKET
STRUGGLED."
Dear Shareholder
December 4, 2000
Recap of Events -- Over the past year, REIT investors who stayed the course
through the difficult markets of 1998 and 1999 finally saw their patience
rewarded. REIT indexes began trending upward around the new year, then continued
to gain ground in the second quarter of 2000 while the rest of the U.S. stock
market struggled.
The REIT rally in 2000 can be credited to the compelling valuations in REIT
stocks, brought about by the extended market downturn and a continued balance of
supply and demand in virtually all major real estate markets.
We believe these compelling valuations, along with attractive dividends and
modest but predictable earnings growth, gave investors an excellent alternative
to other markets, particularly the technology-oriented Nasdaq, which turned
downward in the spring of 2000 and has generally been volatile ever since. REITs
enjoyed positive relative performance versus the Nasdaq Composite, and to a
lesser degree the S&P 500 and Dow Jones Industrials for the year ended October
31, 2000. This relative strong performance is not surprising since real estate
has historically shown low correlation with other major asset classes.
Delaware REIT Fund returned +24.87% during the fiscal year ended October 31,
2000 (Class A shares at net asset value with distributions reinvested),
outperforming its benchmark, the NAREIT Equity REIT Index (+13.85%), as well as
the Lipper Real Estate Funds Average (+19.22%). Your Fund's strong performance
can be attributed in part to our holding a higher percentage of REITs, relative
to the benchmark, in sectors that saw significant appreciation during the year.
Total Return
For the Period Ended October 31, 2000 One Year
--------------------------------------------------------------------------------
Delaware REIT Fund Class A +24.87%
--------------------------------------------------------------------------------
NAREIT Equity REIT Index +13.85%
Russell 2000 Index +17.41%
Lipper REIT Funds Average (153 funds) +19.22%
--------------------------------------------------------------------------------
All performance shown above is at net asset value without the effect of sales
charges and assumes reinvestment of all distributions. Performance information
for all Fund classes can be found on page 5. The NAREIT Equity REIT Index is an
unmanaged composite of real estate investment trusts that invest in many types
of U.S. property. The Russell 2000 Index is an unmanaged composite that tracks
the stocks of 2000 U.S. companies with small market capitalizations. The Lipper
category represents the average returns of REIT mutual funds with similar
investment objectives tracked by Lipper (Source: Lipper Inc.). You cannot invest
directly in an index. Past performance does not guarantee future results.
1
<PAGE>
Market Outlook -- Continued strength in the REIT markets is likely to hinge on
the supply-demand dynamics of the major real estate sub-markets and the broad
direction of the U.S. economy. Assuming continued firm real estate fundamentals,
REITs could remain an appealing investment option to investors looking for
earnings stability amidst broad market volatility.
Since it is impossible to predict the short-term direction of the markets with
any real accuracy, we recommend that investors continue to rely on basic, sound
principles of investing. These include sticking to a regular investment plan,
diversifying your assets, and keeping a long-term outlook, as well as
considering your own risk tolerance and financial goals.
We believe that REITs continue to be a sound long-term total return investment.
As an asset class, REITs provide the opportunity for both capital appreciation
and current income. Exposure to the real estate markets also offers some degree
of diversification within an investment portfolio. For help in determining the
role REITs should play in your portfolio, contact your investment advisor.
Thank you once again for your continued confidence and commitment to Delaware
Investments.
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
(Total Return Artwork)
2
<PAGE>
Damon J. Andres
Vice President/
Portfolio Manager
Thomas J. Trotman
Vice President/
Portfolio Manager
December 4, 2000
PORTFOLIO MANAGEMENT REVIEW
---------------------------
The Fund's Results
REITs, in general, had a good year. Delaware REIT Fund performed well in this
environment, posting a +24.87% total return for the 12-month period ended
October 31, 2000 (Class A shares at net asset value with distributions
reinvested).
In our opinion, the sector benefited during the year from modest earnings
growth, a well-balanced real estate market, and investors' recognition of the
overall value that REITs continue to offer. Additionally, increased volatility
in the stock market may have led some investors to consider alternative
investments such as real estate. Along with these factors, we believe your
Fund's strong performance can be attributed to a combination of careful stock
selection, a prudent sector allocation, and our consistent application of a
disciplined investment strategy.
During the year, the strength of the general economy was reflected in strong
regional demand for space among most property types. Robust demand was
translated into accelerated rental growth and lower vacancies as a lack of new
supply bolstered most major markets. Your Fund was able to take advantage of
this environment by emphasizing companies that we consider best able to
capitalize on these strong leasing fundamentals.
Portfolio Highlights
Office and multifamily REITs remain your Fund's two largest sectors and
continued to outperform all other REIT sectors throughout the fiscal year. In
particular, Spieker Properties, SL Green Realty, and Essex Property Trust were
strong contributors to your Fund's overall return.
The Fund also benefited from its higher percentage of holdings compared to the
benchmark in the industrial and hotel sectors. Economic prosperity and
employment growth has fueled demand for both industrial and hotel properties. In
particular, the hotel sector enjoyed strong performance during the year. Plagued
by fears of oversupply, the sector was severely discounted in late 1999. Rising
interest rates, and reluctant lenders diminished the supply risk in early 2000,
and your Fund enjoyed the benefit of a heavier weighting than our benchmark in
the sector.
3
<PAGE>
Delaware REIT Fund
Sector Allocation
As of October 31, 2000
Office 23.5%
Diversified REITs 0.7%
Hotels 1.5%
Self Storage 2.6%
Other 2.7%
Mall REITs 6.4%
Retail Strip Centers 6.5%
Manufactured Housing 6.6%
Real Estate Operating Companies 8.1%
Multifamily REITs 21.8%
Industrial 10.1%
Office/Industrial 9.5%
<PAGE>
We continue to watch certain areas of the market very carefully - especially
retail and healthcare-related REITs. The general slowing of the economy could
affect consumer spending, which could slow the demand for retail space and rent
growth for property owners. Healthcare properties, meanwhile, continue to be
adversely affected by glacier-like rent growth, bankruptcies in nursing homes,
and the impact of managed care on the entire sector. Because of our concerns, we
have fewer holdings in these types of REITs than our benchmark.
Outlook
We remain cautiously optimistic as we look ahead to the next year. The real
estate market nationwide appears to be in a general state of supply-demand
equilibrium. Results of a survey by the Federal Deposit Insurance Corporation's
(FDIC) Division of Research and Statistics showed that, in the first half of
2000, the number of local property markets considered to be in balance
outnumbered those with either tight or excess supply. Although the overbuilding
that could upset this balance has not yet occurred, the FDIC's Division of
Insurance more recently identified 13 metropolitan markets that have become "at
risk" for overbuilding.
Nonetheless, we continue to think that a slowing U.S. economy remains the most
significant risk to domestic real estate over the intermediate term. Absent a
severe economic downturn, we believe REIT earnings will do well over the next 6
to 12 months. Given that, we continue to view quality real estate securities as
compelling vehicles for total return.
Portfolio Characteristics
October 31, 2000
--------------------------------------------------------------------------------
Median Market Capitalization $1.87 billion
--------------------------------------------------------------------------------
Price to Funds from Operations Ratio* 9.1x
--------------------------------------------------------------------------------
Current 30-day SEC Yield** +4.55%
--------------------------------------------------------------------------------
*This is a measure of a REIT fund's cash flow from rents and management fees.
It is comparable to the price-to-earnings (P/E) ratio for the S&P 500 Index.
** For Class A shares measured according to Securities and Exchange Commission
(SEC) guidelines.
Current 30-day SEC yields as of October 31, 2000 for Class B, Class C and
Institutional class shares were +4.09%, +4.09% and +5.08%, respectively.
(Total Return Artwork)
4
<PAGE>
FUND BASICS
-----------
Fund Objective
The Fund seeks maximum long-term total return with capital appreciation as a
secondary objective.
Total Fund Assets
As of October 31, 2000
$94.06 million
Number of Holdings
33
Fund Start Date
December 6, 1995
Your Fund Managers
Damon J. Andres earned a bachelor's degree in Business Administration with an
emphasis in Finance and Accounting from the University of Richmond. Prior to
joining Delaware Investments in 1994, Mr. Andres performed investment consulting
services as a Consulting Associate with Cambridge Associates, Inc. in Arlington,
Virginia.
Thomas J. Trotman is a CFA charterholder. Prior to joining Delaware Investments
in 1995, he was Vice President and Director of Investment Research at
Independence Capital Management. Before that, he held credit-related positions
at Marine Midland Bank, U.S. Steel Corporation, and Amerada Hess.
Nasdaq Symbols
Class A DPREX
Class B DPRBX
Class C DPRCX
Nasdaq Symbol Institutional Class: DPRSX
<PAGE>
FUND PERFORMANCE
----------------
Growth of a $10,000 Investment
December 6, 1995 (Fund inception) through October 31, 2000
Delaware REIT Fund Class A NAREIT Equity REIT Index
Dec.'95 $ 9,425 $10,000
Apr.'96 $10,050 $10,279
Oct.'96 $11,887 $11,719
Apr.'97 $14,094 $13,246
Oct.'97 $17,414 $15,556
Apr.'98 $17,707 $15,664
Oct.'98 $15,502 $13,567
Apr.'99 $16,539 $13,985
Oct.'99 $15,085 $12,612
Apr.'00 $17,006 $13,988
Oct.'00 $18,838 $14,360
Chart assumes $10,000 invested on December 6, 1995 and includes the effect of a
5.75% maximum front-end sales charge and the reinvestment of all distributions.
Performance of other Fund classes will vary due to differing charges and
expenses. Returns plotted on the chart were as of the last day of each
successive April and October. You cannot invest directly in an index.
Average Annual Total Returns
Through October 31, 2000 Lifetime One Year
--------------------------------------------------------------------------------
Class A (Est. 12/6/95)
Excluding Sales Charge +15.16% +24.87%
Including Sales Charge +13.78% +17.69%
--------------------------------------------------------------------------------
Class B (Est. 11/11/97)
Excluding Sales Charge +2.02% +23.92%
Including Sales Charge +1.21% +18.92%
--------------------------------------------------------------------------------
Class C (Est. 11/11/97)
Excluding Sales Charge +2.02% +23.92%
Including Sales Charge +2.02% +22.92%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charge as
noted below. Returns and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
share results, excluding sales charges, assume either that contingent deferred
sales charges did not apply or the investment was not redeemed. Past performance
is not a guarantee of future results.
Class A shares have a 5.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a contingent
deferred sales charge of up to 5% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
The average annual total returns for the lifetime and one-year periods ended
October 31, 2000 for Delaware REIT Fund's Institutional Class were 15.35% and
25.18%, respectively. For the Real Estate Investment Trust Portfolio Class, they
were 15.34% and 25.09%, respectively. The Institutional Class and the Real
Estate Investment Trust Portfolio Class were originally available on November
11, 1997 and November 4, 1997, respectively, and are available without sales or
asset based distribution charges only to certain eligible institutional
accounts. Performance prior to these dates is based on the performance of the
original class (established December 6, 1995) which operated under a
substantially similar expense structure.
Effective November 4, 1997, The Real Estate Investment Trust Portfolio was
redesignated whereby the legal name of the original class (the "Pooled Trust
Class") was changed to the "Class A" and a distribution fee of 0.25% was
implemented. The Class A performance information prior to that date reflects the
performance of the original class and has not been adjusted to reflect the
effect of the distribution fee.
An expense limitation was in effect for all classes of Delaware REIT Fund during
the periods shown. Performance would have been lower if the expense limitation
was not in effect.
Funds that concentrate investments in one industry may involve greater risks
than more diversified funds, including greater potential for volatility.
5
<PAGE>
Statement of Net Assets
DELAWARE REIT FUND
Number of Market
October 31, 2000 Shares Value
--------------------------------------------------------------------------------
Common Stock - 97.19%
Diversified REITs - 0.70%
Crescent Real Estate Equities .......................... 32,800 $ 660,100
----------
660,100
----------
Hotel REITs - 1.49%
MeriStar Hospitality ................................... 73,500 1,405,688
----------
1,405,688
----------
Industrial REITs - 10.05%
AMB Property ........................................... 167,100 3,926,850
First Industrial Realty ................................ 79,800 2,463,825
ProLogis Trust ......................................... 145,600 3,057,600
----------
9,448,275
----------
Mall REITs - 6.40%
General Growth Properties .............................. 65,700 1,938,150
Macerich ............................................... 61,800 1,212,825
Simon Property Group ................................... 105,300 2,349,506
Taubman Centers ........................................ 47,100 515,156
----------
6,015,637
----------
Manufactured Housing REITs - 6.59%
Chateau Communities .................................... 121,648 3,421,350
Sun Communities ........................................ 91,500 2,779,313
----------
6,200,663
----------
Multifamily REITs - 21.77%
Apartment Investment & Management ...................... 86,500 3,951,969
AvalonBay Communities .................................. 93,794 4,308,662
Camden Property Trust .................................. 57,400 1,643,075
Equity Residential Properties .......................... 71,600 3,369,675
Essex Property Trust ................................... 62,100 3,229,200
Grove Property Trust ................................... 234,400 3,977,475
----------
20,480,056
----------
Office REITs - 23.46%
Alexandria R.E. Equities ............................... 97,200 3,292,650
CarrAmerica Realty ..................................... 102,300 3,024,244
Equity Office Properties Trust ......................... 199,702 6,016,023
Prentiss Properties Trust .............................. 152,500 3,869,688
SL Green Realty ........................................ 130,800 3,507,075
Spieker Properties ..................................... 42,600 2,358,975
----------
22,068,655
----------
Office/Industrial REITs -9.52%
Duke-Weeks Realty ...................................... 171,500 4,062,406
Liberty Property Trust ................................. 65,600 1,734,300
Reckson Associates Realty .............................. 139,600 3,158,450
----------
8,955,156
----------
Real Estate Operating Companies -8.12%
*Catellus Development ................................... 155,400 2,826,338
Starwood Hotels & Resorts Worldwide .................... 114,350 3,387,619
Trizec Hahn ............................................ 95,100 1,420,556
----------
7,634,513
----------
<PAGE>
Number of Market
Shares Value
--------------------------------------------------------------------------------
Common Stock (continued)
Retail Strip Center REITs - 6.51%
Kimco Realty ............................................ 78,300 $3,151,575
Pan Pacific Retail Properties ........................... 145,500 2,973,656
----------
6,125,231
----------
Self-Storage REITs - 2.58%
Public Storage .......................................... 107,700 2,423,250
----------
2,423,250
----------
Total Common Stock (cost $83,894,479) ................... 91,417,224
----------
Principal
Amount
---------
Repurchase Agreements - 2.51%
With Chase Manhattan 6.55% 11/1/00
(dated 10/31/00, collateralized by $831,000
U.S. Treasury Notes 4.75% due 2/15/04,
market value $812,379) .................................. $792,000 792,000
With J.P. Morgan Securities 6.52% 11/1/00
(dated 10/31/00, collateralized by $329,000
U.S.Treasury Notes 6.25% due 2/15/03,
market value $335,534 and $224,000
U.S. Treasury Notes 5.25% due 8/15/03,
market value $222,375 and $224,000
U.S. Treasury Notes 7.25% due 5/15/04,
market value $240,686) ................................. 782,500 782,500
With PaineWebber 6.54% 11/1/00
(dated 10/31/00, collateralized by $775,000
U.S. Treasury Notes 5.875% due 11/15/05,
market value $799,302) ................................. 782,500 782,500
-----------
Total Repurchase Agreements
(cost $2,357,000) 2,357,000
-----------
Total Market Value of Securities - 99.70%
(cost $86,251,479) 93,774,224
Receivables and Other Assets
Net of Liabilities - 0.30% 284,746
-----------
Net Assets Applicable to 6,987,826 Shares
Outstanding - 100.00% $94,058,970
===========
Net Asset Value - Delaware REIT Fund A Class
($40,412,148 / 3,002,675 Shares) $13.46
------
Net Asset Value - Delaware REIT Fund B Class
($16,547,488 / 1,229,643 Shares) $13.46
------
Net Asset Value - Delaware REIT Fund C Class
($8,512,860 / 632,533 Shares) $13.46
------
Net Asset Value - Delaware REIT Fund Institutional Class
($2,012,644 / 149,449 Shares) $13.47
------
Net Asset Value - Delaware REIT Fund The Real Estate
Investment Trust Portfolio Class
($26,573,830 / 1,973,526 Shares) $13.47
------
6
<PAGE>
Statement of Net Assets (continued)
Delaware REIT Fund
--------------------------------------------------------------------------------
Components of Net Assets at October 31, 2000:
Shares of beneficial interest
(unlimited authorization - no par) ........................... $87,300,749
Undistributed net investment income ........................... 402,077
Accumulated net realized loss
on investments ............................................... (1,166,601)
Net unrealized appreciation of investments .................... 7,522,745
-----------
Total net assets .............................................. $94,058,970
===========
----------
REIT - Real Estate Investment Trust
*Non-income producing security for the year ended October 31, 2000.
Net Asset Value and Offering Price
per Share - Delaware REIT Fund
Net asset value A Class (A) ................................... $13.46
Sales charge (5.75% of the offering price or
6.09% of the amount invested per share) (B) ................ 0.82
------
Offering price ................................................ $14.28
------
----------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See the current prospectus for purchases of $50,000 or more.
See accompanying notes
7
<PAGE>
Statement of Operations
Year Ended October 31, 2000 Delaware REIT Fund
--------------------------------------------------------------------------------
Investment Income:
Dividends ...............................................$4,248,133
Interest ................................................ 155,530 $4,403,663
---------- ----------
Expenses:
Management fees ......................................... 582,756
Distribution expense .................................... 275,884
Dividend disbursing and transfer agent fees and expenses 105,787
Reports and statements to shareholders .................. 66,678
Registration fees ....................................... 64,950
Accounting and administration ........................... 28,296
Custodian fees .......................................... 9,101
Taxes (other than taxes on income) ...................... 6,920
Professional fees ....................................... 4,449
Trustees' fees .......................................... 1,980
Other ................................................... 10,640 1,157,441
----------
Less expenses absorbed or waived ........................ (151,757)
Less expenses paid indirectly ........................... (1,771)
-----------
Total expenses .......................................... 1,003,913
-----------
Net Investment Income ................................... 3,399,750
-----------
Net Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments ........................ (726,710)
Net change in unrealized appreciation/depreciation
of investments ......................................... 13,645,809
-----------
Net Realized and Unrealized Gain on Investments ......... 12,919,099
-----------
Net Increase in Net Assets Resulting from Operations .... $16,318,849
===========
See accompanying notes
8
<PAGE>
Statements of Changes in Net Assets
Delaware REIT Fund
--------------------------------------------------------------------------------
Year Ended
10/31/00 10/31/99
Increase (Decrease) in Net Assets from Operations:
Net investment income ................................$ 3,399,750 $ 2,897,865
Net realized gain (loss) on investments .............. (726,710) 403,065
Net change in unrealized appreciation/depreciation
of investments ..................................... 13,645,809 (3,952,465)
-------------------------
Net increase (decrease) in net assets resulting
from operations .................................... 16,318,849 (651,535)
-------------------------
Distributions to Shareholders from:
Net investment income:
A Class ........................................... (1,396,546) (953,499)
B Class ........................................... (524,777) (666,418)
C Class ........................................... (228,957) (145,314)
Institutional Class ............................... (77,151) (86,881)
The Real Estate Investment Trust Portfolio Class .. (1,164,747) (2,002,180)
Net realized gain on investments:
A Class ........................................... -- (689,750)
B Class ........................................... -- (674,750)
C Class ........................................... -- (135,690)
Institutional Class ............................... -- (69,929)
The Real Estate Investment Trust Portfolio Class .. -- (2,051,762)
-------------------------
(3,392,178) (7,476,173)
-------------------------
Capital Share Transactions:
Proceeds from shares sold:
A Class ........................................... 24,150,162 17,964,602
B Class ........................................... 5,838,214 5,088,095
C Class ........................................... 4,840,758 2,538,627
Institutional Class ............................... 3,739,451 814,239
The Real Estate Investment Trust Portfolio Class .. -- --
Net asset value of shares issued upon reinvestment
of distributions:
A Class ........................................... 1,190,681 1,494,177
B Class ........................................... 434,225 1,188,069
C Class ........................................... 184,697 209,959
Institutional Class ............................... 77,151 156,808
The Real Estate Investment Trust Portfolio Class .. 788,688 3,166,874
-------------------------
41,244,027 32,621,450
-------------------------
Cost of shares repurchased:
A Class ...........................................(14,073,362) (6,148,789)
B Class ........................................... (5,458,485) (3,614,467)
C Class ........................................... (1,280,108) (1,073,668)
Institutional Class ............................... (3,400,202) (971,824)
The Real Estate Investment Trust Portfolio Class .. -- (19,472,821)
-------------------------
(24,212,157) (31,281,569)
-------------------------
Increase in net assets derived from capital
share transactions ................................. 17,031,870 1,339,881
-------------------------
Net Increase (Decrease) in Net Assets ................ 29,958,541 (6,787,827)
Net Assets:
Beginning of period .................................. 64,100,429 70,888,256
-------------------------
End of period ........................................$94,058,970 $64,100,429
=========================
See accompanying notes
9
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware REIT Fund A Class
------------------------------------------------------------------------------------------------------------------------
Year Period from
Ended 12/6/95(1)
10/31/00(4) 10/31/99(4) 10/31/98(3) 10/31/97 to 10/31/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $11.300 $12.980 $16.260 $12.490 $10.000
Income (loss) from investment operations:
Net investment income ................................... 0.565 0.514 1.118 0.616 0.652
Net realized and unrealized gain (loss) on investments .. 2.165 (0.809) (2.713) 4.664 1.938
---------------------------------------------------------
Total from investment operations ........................ 2.730 (0.295) (1.595) 5.280 2.590
---------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income .................... (0.570) (0.710) (0.865) (0.720) (0.100)
Distributions from net realized gain on investments ..... -- (0.675) (0.820) (0.790) --
---------------------------------------------------------
Total dividends and distributions ....................... (0.570) (1.385) (1.685) (1.510) (0.100)
---------------------------------------------------------
Net asset value, end of period ............................ $13.460 $11.300 $12.980 $16.260 $12.490
=========================================================
Total return(2) ........................................... 24.87% (2.69%) (10.98%) 46.50% 26.12%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $40,412 $23,975 $13,340 $60,089 $26,468
Ratio of expenses to average net assets ................. 1.20% 1.20% 1.11% 0.82% 0.89%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ............... 1.40% 1.43% 1.27% 0.99% 1.02%
Ratio of net investment income to average net assets .... 4.52% 4.18% 4.31% 4.25% 6.70%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ............................................ 4.32% 3.95% 4.15% 4.08% 6.57%
Portfolio turnover ...................................... 31% 48% 51% 58% 109%
</TABLE>
----------------------
(1) Date of commencement of operations; ratios have been annualized and total
return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Effective November 4, 1997, the original class of The Real Estate Investment
Trust Portfolio was redesignated the REIT Fund A Class and became subject to
a 0.25% 12B-1 distribution fee. Before that date, that class was not subject
to such a fee; the financial highlights presented above have not been
restated to reflect a 0.25% fee for the period prior to the portfolio
redesignation. In conjunction with the redesignation of the original class,
four additional classes of shares (Delaware REIT Fund B Class, Delaware REIT
Fund C Class, Delaware REIT Fund Institutional Class and The Real Estate
Investment Trust Portfolio Class), were created. Delaware REIT Fund A Class
shares representing $54.9 million and $1.8 million were exchanged by
shareholders for The Real Estate Investment Trust Portfolio Class and
Institutional Class shares, respectively.
(4) Per share information was based on the average shares outstanding method.
See accompanying notes
10
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware REIT Fund B Class
------------------------------------------------------------------------------------------------
Year Period from
Ended 11/11/97(1)
10/31/00(2) 10/31/99(2) to 10/31/98
<S> <C> <C> <C>
Net asset value, beginning of period .................... $11.300 $12.990 $16.230
Income (loss) from investment operations:
Net investment income ................................ 0.473 0.422 0.914
Net realized and unrealized gain (loss) on
investments ........................................ 2.162 (0.810) (2.559)
--------------------------------
Total from investment operations ..................... 2.635 (0.388) (1.645)
--------------------------------
Less dividends and distributions:
Dividends from net investment income ................. (0.475) (0.627) (0.775)
Distributions from net realized gain on investments .. -- (0.675) (0.820)
--------------------------------
Total dividends and distributions .................... (0.475) (1.302) (1.595)
--------------------------------
Net asset value, end of period .......................... $13.460 $11.300 $12.990
================================
Total return(3) ......................................... 23.92% (3.43%) (11.31%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) .............. $16,547 $13,575 $12,802
Ratio of expenses to average net assets .............. 1.95% 1.95% 1.86%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly .... 2.15% 2.18% 2.02%
Ratio of net investment income to average net assets.. 3.77% 3.43% 3.56%
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly .................................... 3.57% 3.20% 3.40%
Portfolio turnover ................................... 31% 48% 51%
</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) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
11
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware REIT Fund C Class
------------------------------------------------------------------------------------------------
Year Period from
Ended 11/11/97(1)
10/31/00(2) 10/31/99(2) to 10/31/98
<S> <C> <C> <C>
Net asset value, beginning of period ..................... $11.300 $12.990 $16.230
Income (loss) from investment operations:
Net investment income ................................. 0.473 0.422 0.914
Net realized and unrealized (loss) on investments ..... 2.162 (0.810) (2.559)
--------------------------------
Total from investment operations ...................... 2.635 (0.388) (1.645)
--------------------------------
Less dividends and distributions:
Dividends from net investment income .................. (0.475) (0.627) (0.775)
Distributions from net realized gain on investments ... -- (0.675) (0.820)
--------------------------------
Total dividends and distributions ..................... (0.475) (1.302) (1.595)
--------------------------------
Net asset value, end of period ........................... $13.460 $11.300 $12.990
================================
Total return(3) .......................................... 23.92% (3.43%) (11.31%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $8,513 $3,657 $2,435
Ratio of expenses to average net assets ............... 1.95% 1.95% 1.86%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ..... 2.15% 2.18% 2.02%
Ratio of net investment income to average net assets .. 3.77% 3.43% 3.56%
Ratio of net investment income to average net
assets prior to expense limitation and expenses paid
indirectly .......................................... 3.57% 3.20% 3.40%
Portfolio turnover .................................... 31% 48% 51%
</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) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
12
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware REIT Fund Institutional Class
------------------------------------------------------------------------------------------------
Year Period from
Ended 11/11/97(1)
10/31/00(2) 10/31/99(2) to 10/31/98
<S> <C> <C> <C>
Net asset value, beginning of period .................... $11.310 $12.990 $16.230
Income (loss) from investment operations:
Net investment income ................................ 0.596 0.545 1.134
Net realized and unrealized (loss) on investments .... 2.167 (0.807) (2.659)
--------------------------------
Total from investment operations ..................... 2.763 (0.262) (1.525)
--------------------------------
Less dividends and distributions:
Dividends from net investment income ................. (0.603) (0.743) (0.895)
Distributions from net realized gain on investments .. -- (0.675) (0.820)
--------------------------------
Total dividends and distributions .................... (0.603) (1.418) (1.715)
--------------------------------
Net asset value, end of period .......................... $13.470 $11.310 $12.990
================================
Total return(3) ......................................... 25.18% (2.42%) (10.56%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) .............. $2,013 $1,313 $1,504
Ratio of expenses to average net assets .............. 0.95% 0.95% 0.86%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly .... 1.15% 1.18% 1.02%
Ratio of net investment income to average net assets.. 4.77% 4.43% 4.56%
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly .................................... 4.57% 4.20% 4.40%
Portfolio turnover ................................... 31% 48% 51%
</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) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value.
See accompanying notes
13
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Delaware REIT Fund
Selected data for each share of the Fund outstanding The Real Estate Investment
throughout each period were as follows: Trust Portfolio Class
------------------------------------------------------------------------------------------------
Year Period from
Ended 11/4/97(1)
10/31/00(2) 10/31/99(2) to 10/31/98
<S> <C> <C> <C>
Net asset value, beginning of period ...................... $11.310 $12.990 $16.340
Income (loss) from investment operations:
Net investment income .................................. 0.596 0.545 1.134
Net realized and unrealized (loss) on investments ...... 2.167 (0.807) (2.769)
--------------------------------
Total from investment operations ....................... 2.763 (0.262) (1.635)
--------------------------------
Less dividends and distributions:
Dividends from net investment income ................... (0.603) (0.743) (0.895)
Distributions from net realized gain on investments .... -- (0.675) (0.820)
--------------------------------
Total dividends and distributions ...................... (0.603) (1.418) (1.715)
--------------------------------
Net asset value, end of period ............................ $13.470 $11.310 $12.990
================================
Total return(3) ........................................... 25.09% (2.42%) (11.17%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $26,574 $21,580 $40,807
Ratio of expenses to average net assets ................ 0.95% 0.95% 0.86%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ...... 1.15% 1.18% 1.02%
Ratio of net investment income to average net assets ... 4.77% 4.43% 4.56%
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly ...................................... 4.57% 4.20% 4.40%
Portfolio turnover ..................................... 31% 48% 51%
</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) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value.
See accompanying notes
14
<PAGE>
Notes to Financial Statements
October 31, 2000
--------------------------------------------------------------------------------
The Real Estate Investment Trust Portfolio (the"Delaware REIT Fund" or the
"Fund") is a series of Delaware Pooled Trust, which is organized as a Delaware
business trust. The Fund is registered as a diversified open-end investment
company under the Investment Company Act of 1940, as amended, and currently
offers five classes of shares. The A Class carries a maximum front-end sales
charge of 5.75%. The B Class carries a back-end deferred sales charge, The C
Class carries a level load deferred sales charge, and The Institutional and Real
Estate Investment Trust Portfolio Classes carry no sales charge. This report
contains information relating only to Delaware REIT Fund. All other Delaware
Pooled Trust portfolios are included in a separate report.
The Fund seeks to achieve a maximum long-term total return, with capital
appreciation as a secondary objective. It seeks to achieve its objectives by
investing in securities of companies primarily engaged in the real estate
industry. The Fund 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
Fund.
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of the close of the NYSE on the valuation date. Securities
not traded or securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices. Money market instruments having less than 60
days to maturity are valued at amortized cost, which approximates market value.
Other securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith under the
direction of the Fund's Board of Trustees.
Federal Income Taxes - The Fund 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 Fund 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 Fund 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
Fund's 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.
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. The Fund declares and pays dividends from net
investment income on a quarterly basis. Net capital gains, if any, will be
distributed annually.
Certain expenses of the Fund are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $1,771 for the year ended October 31, 2000. In
addition, the Fund receives earnings credits from its custodian when positive
cash balances are maintained, which are used to offset custody fees. There were
no earnings credits for the year ended October 31, 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".
15
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company (DMC), the Investment Manager of the Fund, an
annual fee, which is calculated daily at the rate of 0.75% on the first $500
million of net assets of the Fund, 0.70% on the next $500 million, 0.65% on the
next $1.5 billion and 0.60% on the net assets over $2.5 billion. At October 31,
2000, the Fund had a liability for Investment Management fees and other expenses
payable to DMC of $53,627.
DMC has entered into a sub-advisory agreement with Lincoln Investment
Management, Inc., an affiliate of DMC, with respect to the management of the
Fund. For the services provided to DMC, Lincoln Investment Management receives
30% of the advisory fee paid to DMC for acting as sub-advisor to the Fund.
DMC has elected to waive that portion of the management fee and reimburse the
Fund to the extent that annual operating expenses, exclusive of taxes, interest,
brokerage commissions, distribution fees, and extraordinary expenses, exceed
0.95% of the Fund's average daily net assets through February 28, 2001.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to provide dividend disbursing, transfer agent, accounting and administration
services. The Fund pays DSC a monthly fee based on the number of shareholder
accounts, shareholder transactions and average net assets, subject to certain
minimums. At October 31, 2000, the Fund had a liability for such fees and other
expenses payable to DSC of $14,964.
Pursuant to the Distribution Agreement, the Fund pays Delaware Distributors,
L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.25% of the average daily net assets attributable to A Class shares and
1.00% of the average daily net assets attributable to B Class and C Class
shares. At October 31, 2000, the Fund had a liability for distribution fees and
other expenses payable to DDLP of $20,565.
For the year ended October 31, 2000, DDLP earned $18,104 for commissions on
sales of the Fund A Class shares.
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 year ended October 31, 2000, the Fund made purchases of $40,732,187
and sales of $22,780,068 of investments securities other than temporary cash
investments.
At October 31, 2000, the aggregate net unrealized appreciation for federal
income tax purposes was $6,818,493 of which $9,158,789 related to unrealized
appreciation of securities and $2,340,296 related to unrealized depreciation of
securities. At October 31, 2000, the aggregate cost of securities for federal
income tax purposes was $86,955,731.
For federal income tax purposes, the Fund had accumulated capital losses as of
October 31, 2000 of $567,107 which may be carried forward and applied against
future gains; $178,810 that will expire in 2007 and $388,297 that will expire in
2008.
<PAGE>
4. Capital Shares
Transactions in capital stock shares were as follows:
Year Ended
10/31/00 10/31/99
Shares sold:
A Class ............................................. 1,948,158 1,471,049
B Class ............................................. 452,919 414,465
C Class ............................................. 398,061 207,473
Institutional Class ................................. 290,075 65,124
The Real Estate Investment Trust
Portfolio Class ................................... -- --
Shares issued upon reinvestment of distributions:
A Class ............................................. 98,631 124,187
B Class ............................................. 36,350 98,229
C Class ............................................. 15,250 17,467
Institutional Class ................................. 6,353 13,031
The Real Estate Investment Trust
Portfolio Class ................................... 65,527 263,387
---------- ----------
3,311,324 2,674,412
---------- ----------
Shares repurchased:
A Class ............................................. (1,165,158) (501,722)
B Class ............................................. (460,885) (297,118)
C Class ............................................. (104,354) (88,808)
Institutional Class ................................. (263,112) (77,809)
The Real Estate Investment Trust
Portfolio Class ................................... -- (1,496,409)
---------- ----------
(1,993,509) (2,461,866)
---------- ----------
Net increase .......................................... 1,317,815 212,546
========== ==========
16
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
5. Lines of Credit
The Funds, along with certain other funds in the Delaware Investments Family of
Funds (the "Participants"), participate in a $375,400,000 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 one third of their net assets under the agreement. The Fund had no
amounts outstanding at October 31, 2000 or at any time during the fiscal year.
6. Market and Credit Risk
The Real Estate Investment Portfolio concentrates its investments in the real
estate industry and may be subject to certain risks associated with that
industry. If the Portfolio 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 Portfolio 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.
7. Tax Information (unaudited)
The information set forth below is for the Fund's fiscal year as required by
federal laws. Shareholders, however, must report distributions on a calendar
year basis for income tax purposes, which may include distributions for portions
of two fiscal years of a fund. Accordingly, the information needed by
shareholders for income tax purposes will be sent to them in early 2001. Please
consult your tax advisor for proper treatment of this information.
For the fiscal year ended October 31, 2000, the Fund designates distributions
paid during the year as follows:
(A) (B)
Long-Term Ordinary (C)
Capital Gains Income Total (D)
Distributions Distributions Distributions Qualifying
(Tax Basis) (Tax Basis) (Tax Basis) Dividends(1)
------------- ------------- ------------- ------------
-- 100% 100% --
(A) and (B) are based on a percentage of the Fund's total distributions.
(D) is based on a percentage of ordinary income of the Fund.
----------------------
(1) Qualifying dividends represent dividends which qualify for the corporate
dividends received deduction.
17
<PAGE>
Report of Independent Auditors
--------------------------------------------------------------------------------
To the Shareholders and Board of Trustees
Delaware Pooled Trust - The Real Estate Investment Trust Portfolio
We have audited the accompanying statement of net assets of The Real Estate
Investment Trust Portfolio (the "Fund") as of October 31, 2000, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the periods indicated therein. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 2000, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Real Estate Investment Trust Portfolio at October 31, 2000, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and its financial highlights for each of
the periods indicated therein, in conformity with accounting principles
generally accepted in the United States.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
December 8, 2000
18
<PAGE>
This page intentionally left blank.
19
<PAGE>
This page intentionally left blank.
20
<PAGE>
DELAWARE INVESTMENTS FAMILY OF FUNDS
------------------------------------
More information on any fund offered by Delaware Investments can be found in
each fund's current prospectus. Prospectuses for all funds offered by Delaware
Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.
BUILDING BLOCKS
OF A DIVERSIFIED PORTFOLIO
AGGRESSIVE GROWTH EQUITY FUNDS
GROWTH EQUITY FUNDS
TAX-
TAXABLE EXEMPT INTERNATIONAL ASSET
MODERATE GROWTH BOND BOND AND GLOBAL ALLOCATION
EQUITY FUNDS FUNDS FUNDS FUNDS FUNDS
STABILITY OF PRINCIPAL
<TABLE>
<CAPTION>
<S> <C> <C>
[ ] Growth of Capital [ ] International and Global [ ] Tax-Exempt Income
o Technology and Innovation o Emerging Markets Fund o National High-Yield
Fund o New Pacific Fund Municipal Bond Fund
o Select Growth Fund o Overseas Equity Fund o Tax-Free USA Fund
o Trend Fund o International Equity Fund o Tax-Free Insured Fund
o Growth Opportunities Fund* o Global Equity Fund o Tax-Free USA
o Small Cap Value Fund o Global Bond Fund Intermediate Fund
o U.S. Growth Fund o State Tax-Free Funds**
o Tax-Efficient Equity Fund [ ] Current Income
o Social Awareness Fund o Delchester Fund [ ] Stability of Principal
o High-Yield o Cash Reserve
[ ] Total Return Opportunities Fund o Tax-Free Money Fund
o Blue Chip Fund o Strategic Income Fund
o Devon Fund o Corporate Bond Fund [ ] Asset Allocation
o Growth and Income Fund o Extended Duration o Foundation Funds
o Decatur Equity Income Fund Bond Fund Growth Portfolio
o REIT Fund o American Government Balanced Portfolio
o Balanced Fund Bond Fund Income Portfolio
o U.S. Government
Securities Fund
o Limited-Term
Government Fund
</TABLE>
-------------------
* Formerly known as DelCap Fund.
** Available for the following states: Arizona, California, Colorado, Florida,
Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, New Jersey,
New Mexico, New York, Oregon, Pennsylvania and Wisconsin. Insured and
intermediate bond funds are available in selected states.
(C)Delaware Distributors, L.P.
21
<PAGE>
DELAWARE(SM)
INVESTMENTS
---------------------
Philadelphia o London
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
This annual report is for the information of Delaware REIT Fund shareholders,
but it may be used with prospective investors when preceded or accompanied by a
current prospectus for Delaware REIT Fund and the Delaware Investments
Performance Update for the most recently completed calendar quarter. The
prospectus sets forth details about charges, expenses, investment objectives and
operating policies of the Fund. You should read the prospectus carefully before
you invest. The figures in this report represent past results which are not a
guarantee of future results. The return and principal value of an investment in
the Fund will fluctuate so that shares, when redeemed, may be worth more or less
than their original cost.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
BOARD OF TRUSTEES Charles E. Peck Investment Manager
Retired Delaware Management Company
Wayne A. Stork Fredericksburg, VA Philadelphia, PA
Chairman
Delaware Investments Family of Funds Janet L. Yeomans International Affiliate
Philadelphia, PA Vice President and Treasurer Delaware International Advisers Ltd.
3M Corporation London, England
Walter P. Babich St. Paul, MN
Board Chairman National Distributor
Citadel Constructors, Inc. Delaware Distributors, L.P.
King of Prussia, PA AFFILIATED OFFICERS Philadelphia, PA
David K. Downes Charles E. Haldeman, Jr. Sub-advisor
President and Chief Executive Officer President and Chief Executive Officer Lincoln Investment Management
Delaware Investments Family of Funds Delaware Management Holdings, Inc. Fort Wayne, IN
Philadelphia, PA Philadelphia, PA
Shareholder Servicing, Dividend
John H. Durham Richard J. Flannery Disbursing and Transfer Agent
Private Investor Executive Vice President Delaware Service Company, Inc.
Horsham, PA and General Counsel Philadelphia, PA
Delaware Investments Family of Funds
Anthony D. Knerr Philadelphia, PA 2005 Market Street
Consultant, Anthony Knerr & Associates Philadelphia, PA 19103-3682
New York, NY Bruce D. Barton
President and Chief Executive Officer
Ann R. Leven Delaware Distributors, L.P.
Former Treasurer, National Gallery of Art Philadelphia, PA
Washington, DC
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
</TABLE>
(4096) Printed in the USA
AR-095 [10/00] PPL 12/00 (J6574)
