U.S. Growth Fund
Overseas Equity Fund
New Pacific Fund
[GRAPHIC OMITTED: PHOTO OF A MAN ON THE GLOBE]
service and guidance
professional management
goals
1998
Semi-Annual Report
[GRAPHIC OMITTED: LOGO OF DELAWARE INVESTMENTS
----------------------------
Philadelphia * London]
May 15, 1998
Dear Shareholder:
U.S. AND EUROPEAN STOCK MARKETS surged during the first half of
fiscal 1998, shaking off jitters caused by economic turmoil along
the Pacific Rim last autumn. However, many Asian economies suffered
as governments sought solutions to the region's financial problems.
In the U.S., a rare combination of robust growth, tame
inflation, low interest rates and low unemployment in the U.S.
lifted the Standard & Poor's 500 Index above the 1000 point level
for the first time.
European economies benefited from many of the same positive
economic trends as the U.S. Strict fiscal controls have been enacted
by European governments to qualify for economic union and a single
currency in 1999. This has helped generate investor confidence.
Gains in Europe contributed to the Morgan Stanley Europe
Australia Far East (EAFE) Index's strong total return for the first
half, as shown below. Meanwhile, Japan's stock market languished as
attempts to lift the country out of recession failed. Elsewhere
along the Pacific Rim, currency devaluations and high debt levels
led to major stock market slumps and a liquidity crisis.
EUROPEAN ECONOMIES BENEFITED FROM MANY OF THE SAME POSITIVE ECONOMIC
TRENDS AS THE U.S. DURING THE FIRST HALF OF FISCAL 1998.
U.S. exports have been only modestly affected by the crisis in
Asia. Domestic consumer spending and corporate investment remained
high throughout the fiscal period, U.S. government statistics show.
On April 30, the U.S. Commerce Department reported that inflation
was at its lowest level in more than a decade. A drop in oil prices
and corporate productivity improvements have helped to keep prices
down. Low inflation enabled the Federal Reserve Board to maintain
its interest rate target at current levels.
CUMULATIVE TOTAL RETURN
FOR PERIODS ENDED APRIL 30, 1998
Six Months One Year
U.S. Growth Fund A Class +21.39% +48.50%
Standard & Poor's 500 Index +22.50% +41.06%
Lipper Growth Fund Average
(864 Funds) +17.31% +39.11%
Overseas Equity Fund A Class +3.59% +7.99%
Morgan Stanley EAFE Index +15.59% +19.23%
Lipper International Fund Average
(466 Funds) +16.25% +20.89%
New Pacific Fund A Class -17.68% -37.64%
Morgan Stanley Pacific Index -8.53% -17.87%
Lipper Pacific Fund Average
(45 Funds) -9.11% -23.41%
Fund performance shown above is based on net asset value without
effect of sales charges and assumes reinvestment of distributions.
Each index is unmanaged. For complete performance of all share
classes, see pages 5 and 8. All returns stated in U.S. dollars. Past
performance does not guarantee future results.
Since autumn, U.S. Growth Fund has performed exceptionally
well. The Fund's returns have been bolstered by pharmaceutical and
broadcasting stocks and shares of other consumer growth companies.
Overseas Equity Fund's results for the first half of fiscal
1998 were disappointing due to sharp market declines in Japan and
emerging markets. Delaware International Advisers Ltd. repositioned
the portfolio after assuming subadvisory responsibility from Walter
Scott & Co. at the end of fiscal 1997. This repositioning included a
substantial reduction in the Fund's weighting in Japanese stocks and
increased country diversification, moves we believe can help the
Fund provide more competitive long-term results.
New Pacific Fund has been significantly affected by Asia's
economic turmoil. As was the case for its peers, the Fund was unable
to find shelter from the economic tsunami that battered the region
during calendar 1997.
One of the best ways you can approach turbulent times is with
the help of your financial adviser. He or she can help you develop
an investment plan that takes advantage of the fact that global
markets seldom move in sync over the long term. We believe
investments in emerging markets should constitute only a modest
portion of most investors' portfolios because of the special
economic and political risks.
ONE OF THE BEST WAYS YOU CAN APPROACH TURBULENT TIMES IS WITH THE
HELP OF YOUR FINANCIAL ADVISOR.
Successful domestic investing requires a hands-on analysis of
individual companies. International investing also requires a keen
understanding of regional politics, economics and management
practices. On the following pages, your Funds' subadvisers in New
York and London explain each Fund's performance and provide their
outlooks for the coming months.
Sincerely,
/S/WAYNE A. STORK
WAYNE A. STORK
Chairman
/S/JEFFREY J. NICK
JEFFREY J. NICK
President and Chief Executive Officer
Portfolio Managers' Review
U.S. GROWTH FUND
We are pleased to report that U.S. Growth Fund provided a total
return of +21.39% (capital change plus distributions for A Class
shares at net asset value) for the six months ended April 30, 1998.
This was more than 400 basis points (4%) higher than the average of
the Fund's Lipper peer group.
Prudent stock selection and effective portfolio management have
helped U.S. Growth Fund outpace both the unmanaged S&P 500 Index and
the average of the Fund's growth fund peers for the past 12 months,
as shown on page 2.
We attribute U.S. Growth Fund's strong performance to an
emphasis on large companies exhibiting signs of positive fundamental
change, accelerating earnings and strong long-term growth prospects.
Currently, we believe opportunities exist in telecommunications &
radio, and some financial and technology stocks.
During the first half, the star performer among our
telecommunications holdings was Lucent Technologies, Inc. The
company's 1998 first quarter earnings more than doubled from a year
earlier, exceeding our expectations. Continued consumer and business
demand for Lucent's data services and computer networking systems
contributed to the company's strong performance.
The few disappointments during the six months ended April 30,
1998 came from the Fund's holdings in the energy and paper products
sectors. A combination of Pacific Rim turmoil and the El Nino
weather pattern reduced earnings prospects in these areas and
dampened investor enthusiasm.
By focusing on companies with better-than-average earnings
prospects, we believe we have positioned U.S. Growth Fund well for
the remainder of fiscal 1998. We plan to emphasize companies such as
duPont and Washington Mutual where ongoing change may lead to an
acceleration of earnings growth. Overall, we anticipate that
companies we hold in the Fund's portfolio can expand earnings by 20%
in 1998, compared to just 8% for companies in the S&P 500.
[GRAPHIC OMITTED: PIE CHART OF U.S. GROWTH FUND PORTFOLIO HIGHLIGHTS]
U.S. GROWTH FUND
PORTFOLIO HIGHLIGHTS
APRIL 30, 1998
Retail and Food 10.3%
Energy/Utilities 2.6%
Banking, Finance and
Insurance 6.7%
Cable, Media and
Publishing 14.0%
Transportation 2.1%
Consumer and
Business Services 2.3%
Chemicals 9.0%
Technology and
Electronics 13.1%
Healthcare 10.3%
Telecommunications 13.2%
Capital Goods 5.6%
Cash 5.5%
Paper and
Packaging 5.3%
Median Market Capitalization $13.1 billion
Number of Stocks 58
Average Price-to-Earnings Ratio 22.6x
Beta 1.02
Price/earnings ratio based on analysts' earnings estimates for
calendar 1998. Beta is a measure of risk relative to the S&P 500
Index. A number less than 1.0 means less historical price
volatility than the index. A number higher than 1.0 means more
historical volatility.
In 1998, some large company stocks have been trading at prices
we think are too high relative to the companies' underlying growth
rate. For example, near the end of the first half we sold our
position in Pfizer, Inc., a pharmaceutical company whose stock
experienced extraordinary price appreciation due to enthusiasm for
Viagra -- a new drug for male impotence.
Pfizer shares reached our price target near the end of April
while its P/E climbed to nearly 60 times projected earnings. We also
believe it is unclear if the sales momentum of Viagra can be
sustained, especially in light of insurance coverage uncertainties.
Over the past 40 years, the average annual earnings growth rate
of companies in the S&P 500 has been between 7% and 8%. In the
1990s, however, companies have enjoyed unusually high earnings
growth rates as a result of restructurings, technology-related
productivity enhancements and falling interest rates. As profit
growth reverts to historical norms in the months ahead, we believe
investors will prize those businesses with better-than-average
prospects.
LYNCH & MAYER
May 15, 1998
U.S. GROWTH FUND PERFORMANCE
AVERAGE ANNUAL RETURNS THROUGH APRIL 30, 1998
Lifetime One Year
Class A (Est. 12/3/93)
Excluding Sales Charge +20.03% +48.50%
Including Sales Charge +18.71% +41.44%
Class B (Est. 3/29/94)
Excluding Sales Charge +20.95% +47.51%
Including Sales Charge +20.68% +43.88%
Class C (Est. 5/23/94)
Excluding Sales Charge +23.10% +47.45%
Including Sales Charge +23.10% +46.52%
All performance includes reinvestment of distributions and
applicable sales charges as described below. Return and share price
will fluctuate so that shares when redeemed may be worth more or
less than the original cost. Past performance does not guarantee
future results. Performance for Class B and C shares excluding sales
charge assumes contingent sales charges did not apply or the
investment was not redeemed. Expense limitations were in effect for
the period shown. Performance would have been lower if the
limitations were not in effect.
Class A shares have a 4.75% maximum front-end sales charge and a
12b-1 fee.
Class B shares do not carry a front-end sales charge, but are
subject to a 1% annual distribution and service fee. They are also
subject to a deferred sales charge of up to 4% if redeemed before
the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If
shares are redeemed within 12 months, a 1% contingent deferred sales
charge applies.
Average annual total returns for the lifetime and one- year periods
and cumulative returns for the six-month period ended April 30, 1998
for U.S. Growth Fund's Institutional Class were +19.81%, +48.93%.
and +21.55%, respectively. This class was initially offered February
3, 1994 and is available without sales or asset-based distribution
charges only to institutional accounts.
OVERSEAS EQUITY FUND
Overseas Equity Fund provided a total return of +3.59% (capital
change plus distributions for A Class shares at net asset value) for
the six months ended April 30, 1998.
Financial turmoil along the Pacific Rim made our task
challenging. Last summer's continent-wide currency
crisis, which began in Thailand and quickly spread throughout the
region, has generated continuing equity market volatility.
Overseas Equity Fund had a heavy weighting in Japan at the
beginning of the 1998 fiscal year and this hurt the Fund's
performance. Delaware International significantly reduced this
positioning beginning last winter to preserve capital amid a 4.48%
decline in Japan's benchmark Nikkei Index. As of April 30, just over
8% of the Fund's net assets were invested in Japan compared
to 40% at the end of October.
Delaware International employs a "dividend discount" approach
to the Fund by seeking undervalued stocks in both developed and
emerging international markets. This differs from the growth style
of the Fund's prior subadviser -- Walter Scott & Co.
Before buying a stock, Delaware International scrutinizes the
company's balance sheets and management strength. The Fund's
management then calculates a stock's "fair market value" by
projecting a company's future cash flow and earnings. Stocks with
strong balance sheets and management, which are also selling below
fair market value, become candidates for the Fund's portfolio.
As of April 30, about 70% of your Fund's net assets were
allocated to developed countries and the remaining 30% to emerging
markets. Delaware International believes developed countries can
provide relative stability for the Fund while emerging markets offer
greater capital appreciation potential in return for the additional
risk associated with such securities.
[GRAPHIC OMITTED: PIE CHART OF OVERSEAS EQUITY FUND COUNTRY/REGION
ALLOCATION]
OVERSEAS EQUITY FUND
COUNTRY/REGION ALLOCATION
APRIL 30, 1998
Cash 6.0%
South Africa 3.8%
Hong Kong 4.6%
France 6.2%
Germany 7.0%
Japan 8.4%
Australia/New Zealand 10.9%
Other Western Europe 12.0%*
United Kingdom 19.8%
Latin America 9.4%
Other Asia 7.2%**
Eastern Europe 2.9%
Middle East 1.8%
Footnote reads:
* Belgium, Netherlands, Spain.
** India, Indonesia, Thailand, Taiwan, Singapore, Malaysia.
The United Kingdom is currently your Fund's largest country,
accounting for 20% of net assets, more than double the percentage
six months earlier. The strong pound helped boost returns of British
stocks for U.S. investors during the first half of fiscal 1998.
Stocks in the U.K. generally offer higher dividend yields than
stocks in many other developed countries around the world. Here in
London, Delaware International remains confident that the Blair
administration's decision last fall to give more autonomy to
Britain's central bank can continue to bolster confidence in U.K.
equities. Britain's decision to forego joining the European Economic
Union could give the U.K. a higher degree of economic flexibility
than Continental Europe in the coming months.
Since October, Continental European stocks have rallied as
governments strive to qualify for a single currency in 1999.
Stricter financial controls helped trim inflation and government
budget deficits.
In Asia, many emerging market countries were unfairly affected
by the region's economic and political turmoil. This presented
Delaware International with promising opportunities to focus on
selected industries such as utilities, telecommunications and banks.
Your Fund's exposure to emerging markets may increase in the
months ahead. Delaware International is paying particularly close
attention to China. The most populous country in Asia has remained
relatively unscathed during the Pacific Rim's turmoil. Your Fund's
managers are currently analyzing companies that make household
appliances because we believe housing sales are likely to remain
strong.
This past spring, your Fund's managers traveled to Thailand,
South Korea and Malaysia to see first hand how these countries are
coping with the growing pains of their developing economies.
Generally, these countries are abandoning efforts to subsidize
unprofitable companies and banks. This bodes well for the Pacific
Rim's long-term economic health.
ROBERT AKESTER AND
CLIVE GILLMORE
Delaware International
May 15, 1998
OVERSEAS EQUITY FUND PERFORMANCE
AVERAGE ANNUAL RETURNS THROUGH APRIL 30, 1998
Lifetime One Year
Class A (Est. 12/3/93)
Excluding Sales Charge +7.76% -7.99%
Including Sales Charge +6.58% +2.85%
Class B (Est. 3/29/94)
Excluding Sales Charge +6.31% +7.22%
Including Sales Charge +5.92% +3.76%
Class C (Est. 5/23/94)
Excluding Sales Charge +6.54% +7.30%
Including Sales Charge +6.54% +6.43%
NEW PACIFIC FUND PERFORMANCE
AVERAGE ANNUAL RETURNS THROUGH APRIL 30, 1998
Lifetime One Year
Class A (Est. 12/3/93)
Excluding Sales Charge -9.90% -37.64%
Including Sales Charge -10.89% -40.60%
Class B (Est. 3/29/94)
Excluding Sales Charge -10.29% -37.98%
Including Sales Charge -10.70% -40.44%
Class C (Est. 5/23/94)
Excluding Sales Charge -11.50% -38.21%
Including Sales Charge -11.50% -38.83%
All performance includes reinvestment of distributions and
applicable sales charges as described below. Return and share price
will fluctuate so that shares when redeemed may be worth more or
less than the original cost. Past performance does not guarantee
future results. Performance for Class B and C shares excluding sales
charge assumes contingent sales charges did not apply or the
investment was not redeemed. Expense limitations were in effect for
the period shown. Performance would have been lower if the
limitations were not in effect.
Class A shares have a 4.75% maximum front-end sales charge and a
12b-1 fee.
Class B shares do not carry a front-end sales charge, but are
subject to a 1% annual distribution and service fee. They are also
subject to a deferred sales charge of up to 4% if redeemed before
the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If
shares are redeemed within 12 months, a 1% contingent deferred sales
charge applies.
Average annual total returns for the lifetime and one- year periods
and six-month cumulative returns for the period ended April 30, 1998
for Overseas Equity Fund's Institutional Class were +6.90%, +8.38%
and +3.78%, respectively. This class was initially offered February
3, 1994 and is available without sales or asset-based distribution
charges only to institutional accounts.
Average annual total returns for the lifetime and one- year periods
and cumulative six-month returns for the period ended April 30, 1998
for New Pacific Fund's Institutional Class were -12.15%, -37.31%,
and -17.40%, respectively. This class was initially offered February 3,
1994 and is available without sales or asset-based distribution charges
only to institutional accounts.
NEW PACIFIC FUND
Preserving capital has been a challenging task for New Pacific Fund
since October.
Emerging markets along the Pacific Rim were some of the world's
worst performing stock markets during the fall of calendar 1997. The
widespread loss of investor confidence in the region significantly
affected your Fund.
Asia's emerging markets have significant economic and political
risks, and the scope of these risks became apparent as currency
devaluations, inflation, social unrest and recession affected nearly
every country except China and Australia.
New Pacific Fund's net asset value declined 17.87% for the six
months ended April 30, 1998 (for Class A with distributions
reinvested). The Fund's loss was double that of its benchmark, the
unmanaged Morgan Stanley Pacific Index and our peers, primarily
because the Fund had a higher concentration of stocks in harder-hit
emerging markets than the Index and other Pacific Rim funds. (some
70% of Index holdings are Japanese companies).
Signs of recovery can be seen in developments this past spring.
Thailand has a new government that is encouraging a recapitalization
of banks and a retooling of the nation's financial system. China
is pushing reforms designed to liberalize state-owned industries and
attract foreign capital.
Prudent country selection appears more important than ever. In
Indonesia, Suharto's failed attempt to stay in power led to riots
and prompted companies and embassies to evacuate employees. In
India, nuclear testing inspired by nationalism appears to have led
to market unrest. We plan to underweight such countries for the
balance of 1998.
In a challenging environment, we believe it is important to
focus on stable Pacific Rim companies whose operations are not
dependent on any one country or regional economy. For example, in
Japan the Fund's largest holding is Fuji Photo Film. Its operations
are export-driven and in America, the company is winning a battle
for consumer market share against archrival Eastman Kodak. Likewise,
in Hong Kong the Fund's largest holding is HSBC Holdings, one of the
world's largest banks.
[GRAPHIC OMITTED: PIE CHART OF NEW PACIFIC FUND COUNTRY/REGION ALLOCATION]
NEW PACIFIC FUND
COUNTRY/REGION ALLOCATION
APRIL 30, 1998
Philippines 3.2%
India 7.5%
Singapore/Malaysia 10.3%
Japan 23.6%
China/Hong Kong 29.3%
Thailand 4.2%
Cash 1.6%
South Korea 3.7%
Taiwan 10.5%
Australia 6.1%
Footnote reads:
The fund also held an Indonesian stock representing 0.1% of net assets.
The past year has been one of the most difficult periods for
the Pacific Rim in a generation. Rapid economic expansion in the
late 1980s and early 1990s, without regulatory underpinnings,
created a modern day South Sea bubble of debt that finally burst
last summer. Only time and level-headed policies can sponge away the
region's financial and political excesses.
It has been said that a prudent time to invest is at the point
of maximum pessimism about a company, when prospects appear
bleakest. Your Fund's management is encouraged to see that despite
short-term returns that contrast sharply with returns from U.S. and
European stocks, investor cash flow into New Pacific Fund has
remained positive. In fact, the number of shareholders between
January and April rose 5%.
For investors who are willing to accept the risks associated
with the Pacific Rim's growing pains -- risks which have been
substantial since the Fund's inception and are likely to be higher
than those of developed markets for the foreseeable future- the
rewards could be substantial.
In our view, over a period of seven to 10 years, the Pacific
Rim's recovery and growth could outpace growth in the U.S. and other
parts of the world. We believe regional interest rates will begin to
fall in the latter months of 1998 and that, barring major new
political turmoil, the area's growth could resume in 1999.
Two out of every five people in the world live in Asia. The
region has some of the world's highest savings rates. With proper
financial regulations within fair and free markets, and
participatory political systems, we believe the so-called Tiger
economies are more likely to purr rather than hiss at investors as
we enter the next millennium.
JANE PICKARD
AIB Govett Asset Management Ltd.
May 15, 1998
FINANCIAL STATEMENTS
DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND
STATEMENT OF NET ASSETS
APRIL 30, 1998 (UNAUDITED)
NUMBER MARKET
OF SHARES VALUE
COMMON STOCK - 95.03%
AUTOMOBILE & AUTO EQUIPMENT - 1.45%
Magna International Class A 7,900 $ 589,044
------------
589,044
============
BANKING, FINANCE & INSURANCE - 6.74%
American Express 11,100 1,132,200
Morgan Stanley Dean Witter Discover 13,100 1,033,262
Washington Mutual 8,300 581,259
------------
2,746,721
------------
CABLE, MEDIA, & PUBLISHING - 14.04%
CBS 34,000 1,211,250
* Chancellor Media Class A 23,400 1,109,306
* Jacor Communications 13,800 784,444
The News Corp Limited 52,800 1,442,100
Time Warner 15,000 1,177,500
------------
5,724,600
------------
CHEMICALS - 9.00%
Dial 38,000 926,250
* W.R. Grace & Company 26,500 538,281
Imperial Chemical 8,100 588,769
Monsanto 14,600 771,975
duPont(E.I.)deNemours 11,600 844,625
------------
3,669,900
------------
COMPUTERS & TECHNOLOGY - 11.34%
* America Online 5,300 424,000
* Computer Horizons 7,700 291,877
* EMC 21,100 973,238
First Data 1 34
Hewlett-Packard 9,700 730,531
* Microsoft 4,000 360,625
* Network Associates 9,700 665,056
* PeopleSoft 8,000 371,750
Xerox 7,100 805,850
------------
4,622,961
------------
CONSUMER PRODUCTS - 1.35%
* Cendant 22,000 550,000
------------
550,000
------------
ELECTRONICS & ELECTRICAL - 1.77%
Schlumberger Limited 8,700 721,013
------------
721,013
------------
ENERGY - 1.42%
Anadarko Petroleum 7,900 578,675
------------
578,675
------------
- ------------
Top 10 holdings, representing 29.67% of net assets, are in boldface.
ENVIRONMENTAL SERVICES - 0.95%
USA Waste Services 7,900 387,594
------------
387,594
------------
FOOD, BEVERAGE & TOBACCO - 2.20%
PepsiCo 13,000 515,938
Wrigley 4,300 382,700
------------
898,638
------------
HEALTHCARE & PHARMACEUTICAL - 10.31%
* Biochem Pharma 16,000 406,000
* Centocor 11,600 488,650
Guidant 3,800 254,125
Medtronic 15,400 810,425
Pfizer 6,800 773,925
* Phycor 16,500 373,828
Warner-Lambert 5,800 1,097,287
------------
4,204,240
------------
INDUSTRIAL MACHINERY - 4.11%
McDermott International 20,000 827,500
* R & B Falcon 26,400 846,450
------------
1,673,950
------------
PACKAGING & CONTAINERS - 0.59%
* Sealed Air 3,859 241,924
------------
241,924
------------
PAPER & FOREST PRODUCTS - 4.72%
Bowater 13,300 743,969
Fort James 23,800 1,181,075
------------
1,925,044
------------
RETAIL - 8.06%
Colgate-Palmolive 8,100 726,469
Home Depot Inc. 18,400 1,281,100
Kroger 12,800 536,000
* Safeway 19,400 742,050
------------
3,285,619
------------
TELECOMMUNICATIONS - 13.21%
AT & T 11,800 708,738
* Brightpoint 15,800 308,100
* Ciena 9,200 512,612
* Intermedia Communications 6,000 437,625
Lucent Technologies 6,600 502,425
* Nextel Communications 11,700 335,278
* Qualcomm 7,300 410,397
SBC Communications 17,900 741,731
* WorldCom 33,400 1,428,894
------------
5,385,800
------------
TEXTILES, APPAREL, & FURNITURE - 0.47%
* Jones Apparel Group 3,200 191,400
------------
191,400
------------
TRANSPORTATION & SHIPPING - 2.08%
CNF Transportation 21,900 $ 845,888
------------
845,888
------------
UTILITIES - 1.22%
* AES 9,000 496,688
------------
496,688
------------
Total Common Stock (cost $31,712,019) $38,739,699
------------
PRINCIPAL
AMOUNT
REPURCHASE AGREEMENT - 3.42%
With Chase Manhattan Bank 5.48%
5/01/98 (dated 4/30/98,
collateralized by $454,000 U.S.
Treasury Notes 6.625% due
06/30/01, market value $475,852) $466,000 $466,000
With Paine Webber 5.50% 5/01/98
(dated 4/30/98, collateralized by
$234,000 U.S. Treasury Notes 5.125%
due 12/31/98, market value $237,967
and $227,000 U.S. Treasury Notes
6.25% due 6/30/99, market
value $235,529) 464,000 464,000
With J.P. Morgan Securities 5.50%
5/01/98 (dated 4/30/98,
collateralized by $470,000 U.S.
Treasury Notes 6.375% due
4/30/99, market value $473,479) 463,000 463,000
------------
Total Repurchase Agreements
(cost $1,393,000) 1,393,000
------------
- ------------
* Non-income producing security
TOTAL MARKET VALUE OF SECURITIES - 98.45%
(cost $33,105,019) $40,132,699
RECEIVABLE AND OTHER ASSETS NET OF
LIABILITIES - 1.55% 633,600
------------
NET ASSETS APPLICABLE TO 3,199,133 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% $40,766,299
============
NET ASSET VALUE - U.S. GROWTH FUND A CLASS
($11,008,141 /872,569 shares) $12.62
============
NET ASSET VALUE - U.S. GROWTH FUND B CLASS
($3,477,665 /287,730 SHARES) $12.09
============
NET ASSET VALUE - U.S. GROWTH FUND C CLASS
($893,398 /68,707 SHARES) $13.00
============
NET ASSET VALUE - U.S. GROWTH FUND INSTITUTIONAL
CLASS
($25,387,095 /1,970,127 SHARES) $12.89
============
COMPONENTS OF NET ASSETS AT APRIL 30,1998:
Common stock $.01 par value, 70,000,000 shares
authorized with 20,000,000 shares allocated to
the U.S. Growth Fund A Class, 20,000,000 shares
allocated to the U.S. Growth Fund B Class,
15,000,000 shares allocated to the U.S. Growth
Fund C Class, 15,000,000 shares allocated to the
U.S. Growth Fund
Institutional Class $31,444,670
Undistributed Net Investment Income 4,807
Accumulated net realized gain on investments 2,289,142
Net unrealized appreciation of investments 7,027,680
------------
Total net assets $40,766,299
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
U.S. GROWTH FUND A CLASS - APRIL 30, 1998
Net asset value A Class (A) $12.62
Sales Charge (4.75% of offering price or 4.99%
of the amount invested per share) (B) 0.63
------
Offering price $13.25
======
- ------------
(A) Net asset value per share, as illustrated, is the estimated
amount which would be paid upon redemption or repurchase of
shares.
(B) See Buying Shares in the current Prospectus for purchases of
$100,000 or more.
See accompanying notes
DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND
STATEMENT OF NET ASSETS
APRIL 30, 1998 (UNAUDITED)
NUMBER OF MARKET
SHARES VALUE
COMMON STOCK - 94.14%
ARGENTINA - 0.90%
YPF Sociedad Anonima 1,200 $ 41,850
------------
41,850
------------
AUSTRALIA - 8.15%
Amcor 20,000 90,377
CSR 27,000 85,922
Foster's Brewing Group 48,000 104,119
National Australia Bank 6,400 90,611
Orica 1,230 9,019
------------
380,048
------------
BELGIUM - 2.27%
Electrabel 400 106,127
------------
106,127
------------
BRAZIL - 3.60%
Aracruz Celulose S.A. ADR 2,400 37,800
Companhia Energetica de Minas Gerais
S.A. ADR 750 35,370
Unis Siderurgicas de Minas Gerais S.A.
ADR 5,600 38,640
Telecommunicacoes Brasileiras S.A.
ADR 460 56,034
------------
167,844
------------
CHILE - 1.43%
Administradora de Fondos de Pensiones
Provida S.A. ADR 1,400 25,025
Banco BHIF ADR 1,400 17,413
Empresa Nacional Electricidad S.A.
ADR 1,400 24,413
------------
66,851
------------
CZECH REPUBLIC - 0.49%
* Komercni Banka I.F. 400 7,274
Restitucni Investment Fund 500 15,386
------------
22,660
------------
EGYPT - 0.74%
Paints and Chemical GDR 3,000 34,575
------------
34,575
------------
ESTONIA - 0.28%
* EESTI Uhispank-(Union Bank of Estonia) 945 12,852
------------
12,852
------------
- ------------
Top 10 holdings, representing 24.82% of net assets, are in boldface.
FRANCE - 6.20%
Compagnie de Saint Gobain 540 89,918
Elf Aquitaine 630 82,604
Societe Generale 560 116,514
------------
289,036
------------
GERMANY - 6.98%
Bayer 2,400 106,907
Bayerische Vereinsbank 1,200 89,535
Rheinisch Westfaelisches Elektric 860 43,959
Siemens 1,450 85,299
------------
325,700
------------
GREECE - 0.83%
Attica Enterprises S.A. 1,200 20,045
Hellenic Bottling Company S.A. 500 18,613
------------
38,658
------------
HONG KONG - 4.58%
First Tractor 42,000 23,443
Guangdong Kelon Electric Holding 30,000 30,780
Guangshen Railway 100,000 18,713
Hong Kong Electric 24,000 73,717
Shenzhen Expressway 128,000 35,104
Wharf Holdings 20,000 32,006
------------
213,763
------------
INDIA - 1.78%
Gujarat Ambuja Cement GDR 3,200 23,920
* India Fund, (The) 4,000 33,000
Tata Engineering & Locomotive Limited
GDR 3,600 26,190
------------
83,110
------------
INDONESIA - 0.44%
* PT Mahanagar Telephone Nigam GDR 1,260 20,318
------------
20,318
------------
JAPAN - 8.43%
Eisai 6,000 85,856
Hitachi 12,000 85,766
Koito Manufacturing 9,000 46,091
Matsushita Elecric 5,000 79,831
West Japan Railway 27 95,572
------------
393,116
------------
MEXICO - 2.30%
ALFA, S.A. de C.V. Class A 5,400 29,322
Cemex S.A. de C.V. Class B 7,500 44,523
Vitro S.A. ADR 3,000 33,563
------------
107,408
------------
NETHERLANDS - 4.83%
Elsevier 5,200 78,441
Koninklijke Van Ommeren 1,300 55,937
Royal Dutch Petroleum 1,650 90,991
------------
225,369
------------
NEW ZEALAND - 2.78%
Carter Holt Harvey 28,000 37,057
* Telecom Corporation of New Zealand IR 6,386 17,080
Telecom Corporation of New Zealand 16,000 75,753
------------
129,890
------------
PERU - 1.15%
Creditcorp 2,420 40,535
Telefonica del Peru S.A. ADR 600 13,275
------------
53,810
------------
RUSSIA - 1.31%
Gazprom ADR 1,000 18,438
Lukoil Holding ADR 300 19,833
Mosenergo ADR 650 23,049
------------
61,320
------------
SINGAPORE/MALAYSIA - 2.54%
Petronas Dagangan Berhad 30,000 34,240
Resorts World Berhad 18,000 34,722
Rothmans of Pall Mall Berhad 3,000 24,715
Sime Darby Berhad 28,000 24,756
------------
118,433
------------
SOUTH AFRICA - 3.84%
Anglo American Corporation of South
Africa Limited 760 44,949
Edgars Stores 481 8,420
Ingwe Coal 3,800 13,605
* Iscor 85,500 27,567
* Sappi Limited 5,000 29,077
Sasol Limited 5,500 55,484
------------
179,102
------------
- ------------
* Non-income producing security
ADR - American Depository Receipt
GDR - Global Depository Receipt
SPAIN - 4.96%
Iberdrola S.A. 6,600 106,068
Telefonica de Espana 3,000 125,156
------------
231,224
------------
TAIWAN - 0.98%
Asia Cement GDR 2,000 21,250
* Yageo GDR 2,000 24,260
------------
45,510
------------
THAILAND - 1.50%
* Hana Microelectronics Public Company
Limited 8,000 35,071
* K.R. Precision 6,600 17,463
* Ruang Khao 2 Fund 119,000 17,595
------------
70,129
------------
TURKEY - 1.03%
* Efes Sinai Yatirim ADR 857 15,747
Larsen & Toubro GDR 2,500 32,438
------------
48,185
------------
UNITED KINGDOM - 19.82%
Bass 5,357 103,038
Blue Circle Industries 15,000 89,249
Boots 5,800 89,148
British Airways 9,600 100,832
GKN 6,000 173,303
Glaxo Wellcome 4,000 113,195
PowerGen 6,900 93,995
Rio Tinto 7,200 103,441
Taylor Woodrow 16,000 58,738
------------
924,939
------------
Total Common Stock (cost $4,040,578) 4,391,827
------------
WARRANTS & RIGHTS
WARRANTS/ MARKET
RIGHTS VALUE
SPAIN - 0.05%
Telephonica de Espana Rights 3,000 $ 2,322
------------
Total Warrants & Rights (cost $0) 2,322
============
PRINCIPAL
AMOUNT
REPURCHASE AGREEMENT - 4.07%
With Chase Manhattan Bank 5.48%
5/01/98 (dated 4/30/98,
collateralized by $62,000 U.S.
Treasury Notes 6.625% due
06/30/01, market value $64,904) $64,000 $ 64,000
With Paine Webber 5.50% 5/01/98
(dated 4/30/98, collateralized by
$32,000 U.S. Treasury Notes 5.125%
due 12/31/98, market value $32,458
and $31,000 U.S. Treasury Notes
6.25% due 6/30/99, market
value $32,125) 63,000 63,000
With J.P. Morgan Securities 5.50%
5/01/98 (dated 4/30/98,
collateralized by $64,000 U.S.
Treasury Notes 4/30/99
due 2/28/99, market value $64,581) 63,000 63,000
------------
Total Repurchase Agreements
(cost $190,000) 190,000
------------
TOTAL MARKET VALUE OF SECURITIES - 98.26%
(cost $4,230,578) 4,584,149
RECEIVABLE AND OTHER ASSETS NET OF
LIABILITIES - 1.74% 81,385
------------
NET ASSETS APPLICABLE TO 455,001 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% $ 4,665,534
============
NET ASSET VALUE - OVERSEAS EQUITY FUND A CLASS
($2,935,129 /275,534 shares) $10.65
======
NET ASSET VALUE - OVERSEAS EQUITY FUND B CLASS
($1,500,075 /156,187 shares) $9.60
======
NET ASSET VALUE - OVERSEAS EQUITY FUND C CLASS
($163,639 /17,007 shares) $9.62
======
NET ASSET VALUE - OVERSEAS EQUITY FUND
INSTITUTIONAL CLASS
($66,691 /6,273 shares) $10.63
======
COMPONENTS OF NET ASSETS AT APRIL 30,1998:
Common stock $.01 par value, 70,000,000 shares
authorized with 20,000,000 shares allocated to
the Overseas Equity Fund A Class, 20,000,000
shares allocated to the Overseas Equity Fund B
Class, 15,000,000 shares allocated to the
Overseas Equity Fund C Class,
15,000,000 shares allocated to the Overseas
Equity Fund Institutional Class $ 3,583,649
Distributions in excess of net income (10,483)
Accumulated net realized gain on investments 738,206
Net unrealized appreciation of investments and
foreign currencies 354,162
------------
Total net assets $ 4,665,534
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
OVERSEAS EQUITY FUND A CLASS - APRIL 30, 1998
Net asset value A Class (A) $10.65
Sales Charge (4.75% of offering price or 4.98%
of the amount invested per share) (B) 0.53
------
Offering price $11.18
======
- ------------
(A) Net asset value per share, as illustrated, is the estimated
amount which would be paid upon redemption or repurchase of
shares.
(B) See Buying Shares in the current prospectus for purchases of
$100,000 or more.
See accompanying notes
DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND
STATEMENT OF NET ASSETS
APRIL 30, 1998 (UNAUDITED)
NUMBER MARKET
OF SHARES VALUE
COMMON STOCK - 87.89%
AUSTRALIA - 6.14%
Australia & New Zealand Banking
Group 24,000 $ 166,826
Goodman Fielder 80,300 124,119
Pasminco 119,300 125,517
Santos 27,600 99,124
* Sydney Harbour Casino Holdings 146,000 103,353
------------
618,939
------------
CHINA - 4.03%
* Huaneng Power International ADR 4,200 92,400
* Inner Mongolia Yital Coal 188,500 65,598
* Zhejiang Southeast Electric Power 722,000 248,368
------------
406,366
------------
HONG KONG - 25.12%
Beijing Enterprises Holdings 38,000 81,409
Cheung Kong (Holdings) 51,000 338,969
China Resources Beijing Land 182,000 96,303
* China Telecom 84,000 159,360
Citic Pacific 38,000 116,719
CLP Holdings 30,000 144,028
Dao Heng Bank Group 50,000 147,771
Founder Hong Kong 122,200 101,722
Guangdong Kelon Electric Holdings 51,000 52,326
HSBC Holdings 12,400 353,668
* Hutchison Whampoa 28,000 173,092
Jiangsu Expressway 412,000 118,307
New World Development 46,000 130,903
NG Fung Hong 190,000 171,646
Qingling Motors 398,000 172,072
Shanghai Industrial Holdings 50,000 171,323
------------
2,529,618
------------
INDIA - 7.45%
* BSES GDR 6,300 103,478
* Mahanagar Telephone Nigam GDR 12,500 201,563
Ranbaxy Laboratories GDR 4,800 118,800
* Reliance Industries ADR 24,180 220,643
State Bank of India GDR 5,550 105,450
------------
749,934
------------
INDONESIA - 0.12%
PT Medco Energi 32,500 11,636
------------
11,636
------------
JAPAN - 23.62%
Aderans 7,200 169,724
Fuji Photo Film 8,000 283,777
Fujitsu 17,000 197,808
Kikkoman 14,000 75,599
Matsushita Communication Industrial 6,000 176,683
Matsushita Electric Works 16,000 143,395
- ------------
Top ten holdings, representing 30.86% of net assets, are in boldface.
Mitsui Fudosan 5,000 45,488
NIFCO 800 5,302
Nintendo 1,400 128,001
Nippon Telegraph & Telephone 13 113,571
NTT Data 4 172,315
Omron 13,000 203,155
Orix 2,700 186,059
Promise 3,500 177,135
Ricoh 13,000 134,229
Sony 2,000 165,838
------------
2,378,079
------------
PHILIPPINES - 3.24%
Far East Bank & Trust 3,479 3,933
Metropolitan Bank & Trust 21,000 163,043
Philippine Long Distance Telephone
ADR 5,900 158,931
------------
325,907
------------
SINGAPORE/MALAYSIA - 10.28%
DBS Land 144,000 217,341
Development Bank of Singapore 9,000 59,678
* Development Bank of Singapore
(bonus issue) 1,800 11,708
IOI Corporated Berhad 224,000 168,038
Overseas Union Bank 47,000 178,087
Sembawang 105,000 209,536
Tanjong plc 45,000 102,478
* Want Want Holdings 74,000 88,800
------------
1,035,666
------------
SOUTH KOREA - 3.71%
Hyundai Heavy Industries 1,900 61,130
L.G. Chemical 5,800 44,699
L.G. Electronics 6,000 71,380
Samsung Display Devices 1,000 49,757
Samsung Electronics 2,650 146,726
------------
373,692
------------
THAILAND - 4.18%
Advanced Information Service Public 16,000 112,062
BEC World Public 24,200 128,062
Eastern Water Resources Development
and Management Public 14,700 17,160
Eastern Water Resources Development
and Management Public - Foreign 32,900 38,405
Thai Farmers Bank Public 54,600 125,346
------------
421,035
------------
Total Common Stock (cost $9,225,718) 8,850,872
------------
INVESTMENT COMPANIES - 6.29%
* Taipei Fund 63 633,150
------------
Total Investment Companies
(cost $588,809) 633,150
------------
WARRANTS/
RIGHTS
WARRANTS & RIGHTS - 0.06%
* Belle Warrants 98,000 280
* Far East Bank & Trust Rights 249 3,514
* Optec Warrants 20 563
* Oriental Press Group Warrants 44,200 57
* Rashid Hussain Berhad Warrants 5,571 1,642
------------
Total Warrants & Rights (cost $24,077) 6,056
------------
PRINCIPAL
AMOUNT
CONVERTIBLE BONDS - 0.09%
* Multi-Purpose Holdings 112,000 8,852
------------
Total Convertible Bonds (cost $45,098) 8,852
------------
REPURCHASE AGREEMENTS - 4.53%
With Chase 5.49% 05/01/98
(dated 04/30/98,
collateralized by $149,000 U.S.
Treasury Notes 6.625% due 06/30/01
market value $155,771) 153,000 153,000
With Paine Webber 5.49% 05/01/98
(dated 4/30/98, collateralized by
$77,000 U.S. Treasury Notes 5.125%
due 12/31/98, market value $77,899
and $74,000 U.S. Treasury Notes
6.25% due 6/30/99, market
value $77,101) 151,000 151,000
With J.P. Morgan 5.49% 05/01/98
(dated 04/30/98,
collateralized by $154,000 U.S.
Treasury Notes 6.375% due 04/30/99
market value $154,994) 152,000 152,000
------------
Total Repurchase Agreements
(cost $456,000) 456,000
------------
- ------------
* Non-income producing security
ADR - American Depository Receipt
GDR - Global Depository Receipt
TOTAL MARKET VALUE OF SECURITIES - 98.86%
(cost $10,339,702) 9,954,930
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 1.14% 115,211
------------
NET ASSETS APPLICABLE TO 1,678,968 SHARES
($.01 Par Value) Outstanding - 100% $10,070,141
============
NET ASSET VALUE - NEW PACIFIC FUND A CLASS
($7,138,729 / 1,196,415 shares) $5.97
=====
NET ASSET VALUE - NEW PACIFIC FUND B CLASS
($2,615,574 / 430,184 shares) $6.08
=====
NET ASSET VALUE - NEW PACIFIC FUND C CLASS
($124,026 / 20,867 shares) $5.94
=====
NET ASSET VALUE - NEW PACIFIC FUND INSTITUTIONAL CLASS
($191,812 / 31,502 shares) $6.09
=====
COMPONENTS OF NET ASSETS AT APRIL 30, 1998
Common stock $.01 par value, 70,000,000 shares
authorized with 20,000,000 shares allocated to
the New Pacific Fund A Class, 20,000,000 shares
allocated to the New Pacific Fund B Class,
15,000,000 shares allocated to the New Pacific
Fund C Class, 15,000,000 shares allocated to
the New Pacific Fund
Institutional Class $15,407,181
Distributions in excess of net investment
income (115,686)
Accumulated net realized loss on investments (4,823,949)
Net unrealized depreciation of investments and
foreign currencies (397,405)
------------
Total net assets $10,070,141
============
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
NEW PACIFIC FUND A CLASS - APRIL 30, 1998
Net asset value A class (A) $5.97
Sales Charge (4.75% of offering price or 5.03%,
of the amount invested per share) (B) 0.30
-----
Offering price $6.27
=====
- ------------
(A) Net asset value per share, as illustrated, is the estimated
amount which would be paid upon redemption or repurchase of
shares.
(B) See Buying Shares in the current prospectus for purchases of
$100,000 or more.
See accompanying notes
<TABLE>
<CAPTION>
DELAWARE GROUP ADVISER FUNDS, INC.
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1998 (UNAUDITED)
U.S. GROWTH OVERSEAS EQUITY NEW PACIFIC
FUND FUND FUND
-------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 73,801 $ 21,377 $ 16,888
Dividends 108,805 42,168 41,520
Foreign tax withheld 0 (2,216) (3,023)
------------ ------------ ------------
182,606 61,329 55,385
------------ ------------ ------------
EXPENSES:
Management fees 112,427 26,754 21,901
Custodian fees 2,100 10,541 41,900
Dividend disbursing and transfer agent
fees and expenses 19,980 11,936 25,770
Distribution expense 26,356 14,868 22,531
Federal and state registration fees 2,889 10,687 8,846
Reports and statements to shareholders 721 4,410 3,228
Professional fees 2,500 1,000 1,700
Accounting fees and salaries 2,000 900 1,300
Taxes (other than taxes on income) 500 1,350 500
Amortization of organization expenses 773 977 936
Directors' fees 200 112 200
Other 7,353 3,496 5,127
------------ ------------ ------------
177,799 87,031 133,939
Less expenses absorbed by the adviser 0 25,334 40,558
------------ ------------ ------------
NET INVESTMENT INCOME (LOSS) 4,807 (368) (37,996)
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCIES:
Net Realized Gain (loss) on:
Investment transactions 2,386,779 735,338 (3,686,115)
Foreign currencies 0 (10,573) (30,314)
------------ ------------ ------------
Net realized gain (loss) 2,386,779 724,765 (3,716,429)
Net change in unrealized appreciation/
depreciation of investments and foreign
currencies 4,144,163 (878,656) 1,960,082
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCIES 6,530,942 (153,891) (1,756,347)
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $6,535,749 $ (154,259) $(1,794,343)
============ ============ ============
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
DELAWARE GROUP ADVISOR FUNDS, INC.
STATEMENT OF CHANGES IN NET ASSETS
U. S. GROWTH FUND OVERSEAS EQUITY FUND
- ------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
4/30/98 10/31/97 4/30/98 10/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 4,807 $ (91,868) $ (368) $ (84,832)
Net realized gain (loss) on investments
and foreign currencies 2,386,779 10,854,607 724,765 2,291,320
Net change in unrealized appreciation/
depreciation on investments and foreign
currencies 4,144,163 (830,970) (878,656) (584,515)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations 6,535,749 9,931,769 (154,259) 1,621,973
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class -- -- (454,027) (522,689)
B Class -- -- (65,715) (46,161)
C Class -- -- (7,302) (4,286)
Institutional Class -- -- (2,683) (803)
Net realized gain from investment transactions:
A Class (2,703,268) (1,626,328) (1,431,930) (396,523)
B Class (719,445) (85,057) (207,256) (35,183)
C Class (114,013) (5,841) (23,031) (3,252)
Institutional Class (7,317,628) (1,003,161) (8,463) (610)
------------ ------------ ------------ ------------
(10,854,354) (2,720,387) (2,200,407) (1,009,507)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class 6,180,211 10,781,745 319,063 2,484,892
B Class 1,630,544 797,219 87,215 382,413
C Class 635,532 221,107 52,682 96,743
Institutional Class 5,794,061 7,357,639 18,506 104,137
Net asset value of shares issued upon
reinvestment of dividends from net investment
income and net realized gain on investment
transactions:
A Class 2,614,091 1,622,653 1,867,982 913,591
B Class 591,336 84,600 264,050 74,801
C Class 109,009 5,683 29,819 7,537
Institutional Class 7,317,628 1,003,161 11,146 1,413
------------ ------------ ------------ ------------
24,872,412 21,873,807 2,650,463 4,065,527
------------ ------------ ------------ ------------
Cost of shares repurchased:
A Class (3,713,648) (25,598,341) (8,024,436) (8,030,552)
B Class (172,217) (241,326) (78,675) (214,003)
C Class (87,061) (52,050) (51,747) (55,031)
Institutional Class (3,108,396) (2,884,902) (13,406) (330,279)
------------ ------------ ------------ ------------
(7,081,322) (28,776,619) (8,168,264) (8,629,865)
------------ ------------ ------------ ------------
Increase (decrease) in net assets derived from
capital share transactions 17,791,090 (6,902,812) (5,517,801) (4,564,338)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS 13,472,485 308,750 (7,872,467) (3,951,872)
NET ASSETS:
Beginning of period 27,293,814 26,985,244 12,538,001 16,489,873
------------ ------------ ------------ ------------
End of period $ 40,766,299 $ 27,293,814 $ 4,665,534 $ 12,538,001
============ ============ ============ ============
<CAPTION>
NEW PACIFIC FUND
---------------------------
SIX MONTHS YEAR
ENDED ENDED
4/30/98 10/31/97
(UNAUDITED)
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (37,996) $ (20,150)
Net realized gain (loss) on investments
and foreign currencies (3,716,429) (992,876)
Net change in unrealized appreciation/
depreciation on investments and foreign
currencies 1,960,082 (1,602,579)
------------ ------------
Net increase (decrease) in net assets
resulting from operations (1,794,343) (2,615,605)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class (56,023) (190,598)
B Class (19,441) (8,912)
C Class (1,015) (761)
Institutional Class (2,021) (370)
Net realized gain from investment transactions
A Class -- --
B Class -- --
C Class -- --
Institutional Class -- --
------------ ------------
(78,500) (200,641)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class 2,821,652 9,268,516
B Class 1,104,497 2,799,014
C Class 66,966 152,523
Institutional Class 444,668 996,240
Net asset value of shares issued upon
reinvestment of dividends from net investment
income and net realized gain on investment
transactions:
A Class 55,567 189,818
B Class 18,639 8,437
C Class 1,013 761
Institutional Class 2,018 371
------------ ------------
4,515,020 13,415,680
------------ ------------
Cost of shares repurchased:
A Class (1,516,856) (11,746,630)
B Class (582,766) (383,325)
C Class (46,906) (27,334)
Institutional Class (482,170) (863,361)
(2,628,698) (13,020,650)
Increase (decrease) in net assets derived from
capital share transactions 1,886,322 395,030
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS 13,479 (2,421,216)
NET ASSETS:
Beginning of period 10,056,662 12,477,878
------------ ------------
End of period $ 10,070,141 $ 10,056,662
============ ============
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
DELAWARE GROUP ADVISER FUNDS, INC.
FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout each period were as follows:
U.S. GROWTH FUND A CLASS
-------------------------------------------------
SIX MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value, beginning of period $16.650 $13.820 $12.430 $10.210
Income from investment operations:
Net investment loss (0.006)4 (0.060)4 (0.090) (0.090)
Net realized and unrealized gain
on investment transactions 2.346 4.250 1.480 2.310
------------ ------------ ------------ ------------
Total from investment operations 2.340 4.190 1.390 2.220
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment
income -- -- -- --
Distributions from net realized
gain on investment transactions (6.370) (1.360) -- --
------------ ------------ ------------ ------------
Total dividends and distributions (6.370) (1.360) 0.000 0.000
------------ ------------ ------------ ------------
Net asset value, end of period $12.620 $16.650 $13.820 $12.430
============ ============ ============ ============
Total Return2 21.39% 33.18% 11.18% 21.74%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $11,008 $6,933 $16,118 $13,574
Ratio of expenses to average net
assets 1.24% 1.44% 1.80% 1.85%
Ratio of expenses to average net
assets prior to expense limitation N/A N/A 1.88% 2.18%
Ratio of net investment loss to
average net assets (0.10%) (0.38%) (0.77%) (0.88%)
Ratio of net investment loss to
average net assets prior to expense
limitation N/A N/A (0.85%) (1.21%)
Portfolio turnover rate 54% 144% 131% 58%
Average commission rate paid3 $0.0575 $0.0575 $0.0519 N/A
<CAPTION>
PERIOD
12/3/931
TO
10/31/94
<S> <C>
Net asset value, beginning of period $10.000
Income from investment operations: <C>
Net investment loss (0.040)
Net realized and unrealized gain
on investment transactions 0.260
------------
Total from investment operations 0.220
------------
Less dividends and distributions:
Dividends from net investment
income (0.010)
Distributions from net realized
gain on investment transactions --
------------
Total dividends and distributions (0.010)
------------
Net asset value, end of period $10.210
============
Total Return2 2.18%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $10,669
Ratio of expenses to average net
assets 1.85%
Ratio of expenses to average net
assets prior to expense limitation 2.94%
Ratio of net investment loss to
average net assets (0.51%)
Ratio of net investment loss to
average net assets prior to expense
limitation (1.60%)
Portfolio turnover rate 66%
Average commission rate paid3 N/A
- ------------------------
1 Date of initial public offering; ratios have been annualized.
2 Does not include maximum sales charge of 4.75% nor the 1% limited contingent deferred sales charge
that would apply in the event of certain redemptions within 12 months of purchase of A Class
shares. Does not include contingent deferred sales charge which varies from 1-4% depending upon
the holding period for Class B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total number of shares purchased
and sold during the period for which there was a commission charged.
4 The average shares outstanding method has been applied for per share information.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding throughout each period were as follows:
U.S. GROWTH FUND B CLASS
-------------------------------------------------
SIX MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value, beginning of period $16.260 $13.610 $12.330 $10.190
Income from investment operations:
Net investment loss (0.046)4 (0.160)4 (0.170) (0.140)
Net realized and unrealized gain on
investment transactions 2.246 4.170 1.450 2.280
------------ ------------ ------------ ------------
Total from investment operations 2.200 4.010 1.280 2.140
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income -- -- -- --
Distributions from net realized gain
on investment transactions (6.370) (1.360) -- --
------------ ------------ ------------ ------------
Total dividends and distributions (6.370) (1.360) 0.000 0.000
------------ ------------ ------------ ------------
Net asset value, end of period $12.090 $16.260 $13.610 $12.330
============ ============ ============ ============
Total Return2 20.93% 32.30% 10.38% 21.00%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $3,478 $1,653 $809 $567
Ratio of expenses to average net
assets 1.94% 2.14% 2.48% 2.50%
Ratio of expenses to average net
assets prior to expense limitation N/A N/A 2.56% 2.83%
Ratio of net investment loss to
average net assets (0.80%) (1.08%) (1.45%) (1.57%)
Ratio of net investment loss to
average net assets prior to expense
limitation N/A N/A (1.53%) (1.90%)
Portfolio turnover rate 54% 144% 131% 58%
Average commission rate paid3 $0.0575 $0.0575 $0.0519 N/A
<CAPTION>
PERIOD
3/29/941
TO
10/31/94
<S> <C>
Net asset value, beginning of period $10.000
Income from investment operations:
Net investment loss (0.030)
Net realized and unrealized gain on
investment transactions 0.220
------------
Total from investment operations 0.190
------------
Less dividends and distributions:
Dividends from net investment income --
Distributions from net realized gain
on investment transactions --
------------
Total dividends and distributions 0.000
------------
Net asset value, end of period $10.190
============
Total Return2 1.90%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $204
Ratio of expenses to average net
assets 2.50%
Ratio of expenses to average net
assets prior to expense limitation 3.60%
Ratio of net investment loss to
average net assets (1.26%)
Ratio of net investment loss to
average net assets prior to expense
limitation (2.36%)
Portfolio turnover rate 66%
Average commission rate paid3 N/A
- ------------------------
1 Date of initial public offering; ratios have been annualized.
2 Does not include maximum sales charge of 4.75% nor the 1% limited contingent deferred sales charge
that would apply in the event of certain redemptions within 12 months of purchase of A Class shares.
Does not include contingent deferred sales charge which varies from 1-4% depending upon the holding
period for Class B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total number of shares purchased
and sold during the period for which there was a commission charged.
4 The average shares outstanding method has been applied for per share information.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding throughout each period were as follows:
U.S. GROWTH FUND C CLASS
--------------------------------------------------
SIX MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value, beginning of period $17.020 $14.180 $12.850 $10.620
Income from investment operations:
Net investment loss (0.049)4 (0.170)4 (0.160) (0.100)
Net realized and unrealized gain
on investment transactions 2.399 4.370 1.490 2.330
------------ ------------ ------------ ------------
Total from investment operations 2.350 4.200 1.330 2.230
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment
income -- -- -- --
Distributions from net realized
gain on investment transactions (6.370) (1.360) -- --
------------ ------------ ------------ ------------
Total dividends and distributions (6.370) (1.360) 0.000 0.000
------------ ------------ ------------ ------------
Net asset value, end of period $13.000 $17.020 $14.180 $12.850
============ ============ ============ ============
Total Return2 20.93% 32.26% 10.35% 21.00%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $893 $252 $55 $27
Ratio of expenses to average net
assets 1.94% 2.14% 2.48% 2.50%
Ratio of expenses to average net
assets prior to expense limitation N/A N/A 2.56% 2.82%
Ratio of net investment loss to
average net assets (0.80%) (1.08%) (1.45%) (1.61%)
Ratio of net investment loss to
average net assets
prior to expense limitation N/A N/A (1.53%) (1.93%)
Portfolio turnover rate 54% 144% 131% 58%
Average commission rate paid3 $0.0575 $0.0575 $0.0519 N/A
<CAPTION>
PERIOD
5/23/941
TO
10/31/94
<S> <C>
Net asset value, beginning of period $10.000
Income from investment operations:
Net investment loss (0.030)
Net realized and unrealized gain
on investment transactions 0.650
------------
Total from investment operations 0.620
------------
Less dividends and distributions:
Dividends from net investment
income --
Distributions from net realized
gain on investment transactions --
------------
Total dividends and distributions 0.000
------------
Net asset value, end of period $10.620
============
Total Return2 6.17%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $5
Ratio of expenses to average net
assets 2.50%
Ratio of expenses to average net
assets prior to expense limitation 3.54%
Ratio of net investment loss to
average net assets (1.09%)
Ratio of net investment loss to
average net assets
prior to expense limitation (2.13%)
Portfolio turnover rate 66%
Average commission rate paid3 N/A
- ------------------------
1 Date of initial public offering; ratios have been annualized.
2 Does not include maximum sales charge of 4.75% nor the 1% limited contingent deferred sales charge
that would apply in the event of certain redemptions within 12 months of purchase of A Class shares.
Does not include contingent deferred sales charge which varies from 1-4% depending upon the holding
period for Class B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total number of shares purchased
and sold during the period for which there was a commission charged.
4 The average shares outstanding method has been applied for per share information.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding throughout each period were as follows:
U.S. GROWTH FUND INSTITUTIONAL CLASS
-----------------------------------------------------
SIX MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value, beginning of period $16.860 $13.940 $12.500 $10.230
Income from investment operations:
Net investment income (loss) 0.0124 (0.010)4 (0.050) (0.050)
Net realized and unrealized
gain (loss) on investment
transactions 2.388 4.290 1.490 2.320
------------ ------------ ------------ ------------
Total from investment
operations 2.400 4.280 1.440 2.270
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment
income -- -- -- --
Distributions from net realized
gain on investment transactions (6.370) (1.360) -- --
------------ ------------ ------------ ------------
Total dividends and distributions (6.370) (1.360) 0.000 0.000
------------ ------------ ------------ ------------
Net asset value, end of period $12.890 $16.860 $13.940 $12.500
============ ============ ============ ============
Total Return2 21.55% 33.57% 11.52% 22.19%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $25,387 $18,455 $10,003 $4,819
Ratio of expenses to average
net assets 0.94% 1.14% 1.48% 1.50%
Ratio of expenses to average
net assets
prior to expense limitation N/A N/A 1.56% 1.83%
Ratio of net investment income
(loss) to average net assets 0.20% (0.08%) (0.45%) (0.59%)
Ratio of net investment loss to
average net assets prior to
expense limitation N/A N/A (0.53%) (0.92%)
Portfolio turnover rate 54% 144% 131% 58%
Average commission rate paid3 $0.0575 $0.0575 $0.0519 N/A
<CAPTION>
PERIOD
2/3/941
TO
10/31/94
<S> <C>
Net asset value, beginning of period $10.520
Income from investment operations:
Net investment income (loss) (0.010)
Net realized and unrealized
gain (loss) on investment
transactions (0.280)
------------
Total from investment
operations (0.290)
------------
Less dividends and distributions:
Dividends from net investment
income --
Distributions from net realized
gain on investment transactions --
------------
Total dividends and distributions 0.000
------------
Net asset value, end of period $10.230
============
Total Return2 (2.78%)
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $1,630
Ratio of expenses to average
net assets 1.50%
Ratio of expenses to average
net assets
prior to expense limitation 2.60%
Ratio of net investment income
(loss) to average net assets (0.27%)
Ratio of net investment loss to
average net assets prior to
expense limitation (1.37%)
Portfolio turnover rate 66%
Average commission rate paid3 N/A
- ------------------------
1 Date of initial public offering; ratios have been annualized.
2 Does not include maximum sales charge of 4.75% nor the 1% limited contingent deferred sales charge
that would apply in the event of certain redemptions within 12 months of purchase of A Class shares.
Does not include contingent deferred sales charge which varies from 1-4% depending upon the holding
period for Class B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total number of shares purchased
and sold during the period for which there was a commission charged.
4 The average shares outstanding method has been applied for per share information.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding through each period were as follows:
OVERSEAS EQUITY FUND CLASS A
-----------------------------------------------------
SIX MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value, beginning of period $12.520 $12.390 $11.400 $11.000
Income from investment operations:
Net investment income (loss) 0.0084 (0.060)4 (0.060) 0.010
Net realized and unrealized gain
from investments and currencies 0.282 0.960 1.070 0.400
------------ ------------ ------------ ------------
Total from investment operations 0.290 0.900 1.010 0.410
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment
income (0.520) (0.440) (0.020) (0.010)
Distributions from net realized
gain on investment transactions (1.640) (0.330) -- --
------------ ------------ ------------ ------------
Total dividends and distributions (2.160) (0.770) (0.020) (0.010)
------------ ------------ ------------ ------------
Net asset value, end of period $10.650 $12.520 $12.390 $11.400
============ ============ ============ ============
Total Return2 3.59% 7.74% 8.90% 3.81%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $2,935 $10,868 $14,886 $13,018
Ratio of expenses to average
net assets 1.80% 1.80% 1.82% 1.85%
Ratio of expenses to average
net assets prior to expense
limitation 2.61% N/A 2.60% 2.96%
Ratio of net investment income
(loss) to average net assets 0.16% (0.45%) (0.51%) 0.00%
Ratio of net investment loss to
average net assets prior to
expense limitation (0.65%) N/A (1.29%) (1.11%)
Portfolio turnover rate 65% 18% 21% 9%
Average commission rate paid3 $0.0364 $0.0529 $0.0448 N/A
PERIOD
12/3/931
TO
10/31/94
<S> <C>
Net asset value, beginning of period $10.000
Income from investment operations:
Net investment income (loss) 0.020
Net realized and unrealized gain
from investments and currencies 1.010
------------
Total from investment operations 1.030
------------
Less dividends and distributions:
Dividends from net investment
income (0.030)
Distributions from net realized
gain on investment transactions --
------------
Total dividends and distributions (0.030)
------------
Net asset value, end of period $11.000
============
Total Return2 10.25%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $11,721
Ratio of expenses to average
net assets 1.85%
Ratio of expenses to average
net assets prior to expense
limitation 3.56%
Ratio of net investment income
(loss) to average net assets 0.25%
Ratio of net investment loss to
average net assets prior to
expense limitation (1.96%)
Portfolio turnover rate 6%
Average commission rate paid3 N/A
- ------------------------
1 Date of initial public offering; ratios have been annualized.
2 Does not include maximum sales charge of 4.75% nor the 1% limited contingent deferred sales charge
that would apply in the event of certain redemptions within 12 months of purchase of A Class shares.
Does not include contingent deferred sales charge which varies from 1-4% depending upon the holding
period for Class B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total number of shares purchased
and sold during the period for which there was a commission charged.
4 The average shares outstanding method has been applied for per share information.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding through each period were as follows:
OVERSEAS EQUITY FUND CLASS B
-------------------------------------------------------
SIX MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.540 $11.560 $10.710 $10.400
Income from investment operations:
Net investment income (loss) (0.023)4 (0.140)4 (0.060) (0.020)
Net realized and unrealized gain
from investments and currencies 0.243 0.890 0.930 0.350
------------ ------------ ------------ ------------
Total from investment operations 0.220 0.750 0.870 0.330
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment
income (0.520) (0.440) (0.020) (0.020)
Distributions from net realized
gain on investment transactions (1.640) (0.330) -- --
------------ ------------ ------------ ------------
Total dividends and distributions (2.160) (0.770) (0.020) (0.020)
------------ ------------ ------------ ------------
Net asset value, end of period $ 9.600 $11.540 $11.560 $10.710
============ ============ ============ ============
Total Return2 3.22% 6.95% 8.16% 3.19%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $1,500 $1,450 $1,208 $1,183
Ratio of expenses to average
net assets 2.50% 2.50% 2.50% 2.50%
Ratio of expenses to average
net assets prior to expense
limitation 3.31% N/A 3.28% 3.61%
Ratio of net investment loss
to average net assets (0.54%) (1.16%) (1.19%) (0.57%)
Ratio of net investment loss
to average net assets prior to
expense limitation (1.35%) N/A (1.97%) (1.68%)
Portfolio turnover rate 65% 18% 21% 9%
Average commission rate paid3 $0.0364 $0.0529 $0.0448 N/A
PERIOD
3/29/941
TO
10/31/94
<S> <C>
Net asset value, beginning of period $10.000
Income from investment operations:
Net investment income (loss) --
Net realized and unrealized gain
from investments and currencies 0.430
------------
Total from investment operations 0.430
------------
Less dividends and distributions:
Dividends from net investment
income (0.030)
Distributions from net realized
gain on investment transactions --
------------
Total dividends and distributions (0.030)
------------
Net asset value, end of period $10.400
============
Total Return2 4.28%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $523
Ratio of expenses to average
net assets 2.50%
Ratio of expenses to average
net assets prior to expense
limitation 4.22%
Ratio of net investment loss
to average net assets (0.37%)
Ratio of net investment loss
to average net assets prior to
expense limitation (2.09%)
Portfolio turnover rate 6%
Average commission rate paid3 N/A
- ------------------------
1 Date of initial public offering; ratios have been annualized.
2 Does not include maximum sales charge of 4.75% nor the 1% limited contingent deferred sales charge
that would apply in the event of certain redemptions within 12 months of purchase of A Class shares.
Does not include contingent deferred sales charge which varies from 1-4% depending upon the holding
period for Class B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total number of shares purchased
and sold during the period for which there was a commission charged.
4 The average shares outstanding method has been applied for per share information.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding through each period were as follows:
OVERSEAS EQUITY FUND CLASS C
-------------------------------------------------------
SIX MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.550 $11.580 $10.730 $10.430
Income from investment operations:
Net investment income (loss) (0.023)4 (0.140)4 (0.060) (0.060)
Net realized and unrealized
gain from investments and
currencies 0.253 0.880 0.930 0.390
------------ ------------ ------------ ------------
Total from investment operations 0.230 0.740 0.870 0.330
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment
income (0.520) (0.440) (0.020) (0.030)
Distributions from net realized
gain on investment transactions (1.640) (0.330) -- --
------------ ------------ ------------ ------------
Total dividends and distributions (2.160) (0.770) (0.020) (0.030)
------------ ------------ ------------ ------------
Net asset value, end of period $ 9.620 $11.550 $11.580 $10.730
============ ============ ============ ============
Total Return2 3.30% 6.85% 8.15% 3.16%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $164 $159 $112 $43
Ratio of expenses to average
net assets 2.50% 2.50% 2.50% 2.50%
Ratio of expenses to average
net assets prior to expense
limitation 3.31% N/A 3.28% 3.61%
Ratio of net investment income
(loss) to average net assets (0.54%) (1.16%) (1.19%) (0.62%)
Ratio of net investment loss
to average net assets prior to
expense limitation (1.35%) N/A (1.97%) (1.73%)
Portfolio turnover rate 65% 18% 21% 9%
Average commission rate paid3 $0.0364 $0.0529 $0.0448 N/A
PERIOD
5/10/941
TO
10/31/94
<S> <C>
Net asset value, beginning of period $10.000
Income from investment operations:
Net investment income (loss) 0.010
Net realized and unrealized
gain from investments and
currencies 0.440
------------
Total from investment operations 0.450
------------
Less dividends and distributions:
Dividends from net investment
income (0.020)
Distributions from net realized
gain on investment transactions --
------------
Total dividends and distributions (0.020)
------------
Net asset value, end of period $10.430
============
Total Return2 4.45%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $38
Ratio of expenses to average
net assets 2.50%
Ratio of expenses to average
net assets prior to expense
limitation 4.23%
Ratio of net investment income
(loss) to average net assets 0.16%
Ratio of net investment loss
to average net assets prior to
expense limitation (1.57%)
Portfolio turnover rate 6%
Average commission rate paid3 N/A
- ------------------------
1 Date of initial public offering; ratios have been annualized.
2 Does not include maximum sales charge of 4.75% nor the 1% limited contingent deferred sales charge
that would apply in the event of certain redemptions within 12 months of purchase of A Class shares.
Does not include contingent deferred sales charge which varies from 1-4% depending upon the holding
period for Class B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total number of shares purchased
and sold during the period for which there was a commission charged.
4 The average shares outstanding method has been applied for per share information.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding through each period were as follows:
OVERSEAS EQUITY FUND INSTITUTIONAL CLASS
------------------------------------------------------
SIX MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value, beginning of period $12.480 $12.320 $11.440 $11.020
Income from investment operations:
Net investment income (loss) 0.0254 (0.020)4 (0.060) 0.040
Net realized and unrealized gain
from investments and currencies 0.285 0.950 0.960 0.410
------------ ------------ ------------ ------------
Total from investment operations 0.310 0.930 0.900 0.450
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment
income (0.520) (0.440) (0.020) (0.030)
Distributions from net realized
gain on investment transactions (1.640) (0.330) -- --
------------ ------------ ------------ ------------
Total dividends and distributions (2.160) (0.770) (0.020) (0.030)
------------ ------------ ------------ ------------
Net asset value, end of period $10.630 $12.480 $12.320 $11.440
============ ============ ============ ============
Total Return2 3.78% 8.04% 7.91% 4.22%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $67 $60 $284 $161
Ratio of expenses to average
net assets 1.50% 1.50% 1.50% 1.50%
Ratio of expenses to average
net assets prior to expense
limitation 2.32% N/A 2.28% 2.61%
Ratio of net investment income
(loss) to average net assets 0.47% (0.15%) (0.19%) 0.40%
Ratio of net investment loss
to average net assets prior to
expense limitation (0.35%) N/A (0.97%) (0.71%)
Portfolio turnover rate 65% 18% 21% 9%
Average commission rate paid3 $0.0364 $0.0529 $0.0448 N/A
PERIOD
2/3/941
TO
10/31/94
<S> <C>
Net asset value, beginning of period $10.500
Income from investment operations:
Net investment income (loss) 0.040
Net realized and unrealized gain
from investments and currencies 0.520
------------
Total from investment operations 0.560
------------
Less dividends and distributions:
Dividends from net investment
income (0.040)
Distributions from net realized
gain on investment transactions --
------------
Total dividends and distributions (0.040)
------------
Net asset value, end of period $11.020
============
Total Return2 5.26%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $63
Ratio of expenses to average
net assets 1.50%
Ratio of expenses to average
net assets prior to expense
limitation 3.21%
Ratio of net investment income
(loss) to average net assets 0.76%
Ratio of net investment loss
to average net assets prior to
expense limitation (0.95%)
Portfolio turnover rate 6%
Average commission rate paid3 N/A
- ------------------------
1 Date of initial public offering; ratios have been annualized.
2 Does not include maximum sales charge of 4.75% nor the 1% limited contingent deferred sales charge
that would apply in the
event of certain redemptions within 12 months of purchase of A Class shares. Does not include
contingent deferred sales charge which varies from 1-4% depending upon the holding period for Class
B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total number of shares purchased
and sold during the period for which there was a commission charged.
4 The average shares outstanding method has been applied for per share information.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding throughout each period were as follows:
NEW PACIFIC FUND A CLASS
-------------------------------------------------------
SIX MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 7.320 $ 9.421 $ 8.710 $10.440
Income from investment operations:
Net investment (loss) (0.019)4 (0.010)4 (0.050) (0.050)
Net realized and unrealized gain
loss from investments and currencies (1.276) (1.940) 0.770 (1.390)
------------ ------------ ------------ ------------
Total from investment operations (1.295) (1.950) 0.720 (1.440)
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment
income (0.055) (0.150) (0.010) --
Distributions from net realized
gain on investment transactions -- -- -- (0.290)
------------ ------------ ------------ ------------
Total dividends and distributions (0.055) (0.150) (0.010) (0.290)
------------ ------------ ------------ ------------
Net asset value, end of period $ 5.970 $ 7.320 $ 9.420 $ 8.710
============ ============ ============ ============
Total Return2 (17.68%) (21.15%) 8.26% (13.99%)
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $7,139 $7,144 $11,752 $10,353
Ratio of expenses to average
net assets 1.80% 1.80% 1.82% 1.85%
Ratio of expenses to average
net assets prior to expense
limitation 2.66% 1.86% 2.77% 3.73%
Ratio of net investment income
loss to average net assets (0.59%) (0.08%) (0.41%) (0.60%)
Ratio of net investment loss
to average net assets prior to
expense limitation (1.45%) (0.14%) (1.36%) (2.48%)
Portfolio turnover rate 88% 178% 163% 163%
Average commission rate paid3 $0.0067 $0.0079 $0.0118 N/A
PERIOD
12/31/931
TO
10/31/94
<S> <C>
Net asset value, beginning of period $10,000
Income from investment operations:
Net investment (loss) (0.020)
Net realized and unrealized gain
from investments and currencies 0.470
------------
Total from investment operations 0.450
------------
Less dividends and distributions:
Dividends from net investment
income (0.010)
Distributions from net realized
gain on investment transactions --
------------
Total dividends and distributions (0.010)
------------
Net asset value, end of period $10.440
============
Total Return2 4.53%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $11,333
Ratio of expenses to average 1.85%
net assets
Ratio of expenses to average
net assets prior to expense
limitation 3.66%
Ratio of net investment income
(loss) to average net assets (0.21%)
Ratio of net investment loss
to average net assets prior to
expense limitation (2.02%)
Portfolio turnover rate 104%
Average commission rate paid3 N/A
- ------------------------
1 Date of initial public offering; ratios have been annualized.
2 Does not include maximum sales charge of 4.75% nor the 1% limited contingent deferred sales charge
that would apply in the event of certain redemptions within 12 months of purchase of A Class
shares.
Does not include contingent deferred sales
charge which varies from 1-4% depending upon the holding period for Class B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total number of shares purchased
and sold during the period for which there was a commission charged.
4 The average shares outstanding method has been applied for per share information.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding throughout each period were as follows:
NEW PACIFIC FUND B CLASS
------------------------------------------------------
SIX MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value, beginning
of period $ 7.470 $ 9.680 $ 9.010 $10.860
Income from investment
operations:
Net investment loss (0.041)4 (0.080)4 (0.050) (0.100)
Net realized and
unrealized gain (loss)
from investments and
currencies (1.294) (1.980) 0.730 (1.460)
------------ ------------ ------------ ------------
Total from investment
operations (1.335) (2.060) 0.680 (1.560)
------------ ------------ ------------ ------------
Less dividends and
distributions:
Dividends from net
investment income (0.055) (0.150) (0.010) --
Distributions from net
realized gain on
investment transactions -- -- -- (0.290)
------------ ------------ ------------ ------------
Total dividends and distributions (0.055) (0.150) (0.010) (0.290)
------------ ------------ ------------ ------------
Net asset value, end of
period $ 6.080 $ 7.470 $ 9.680 $ 9.010
============ ============ ============ ============
Total Return2 (17.86%) (21.72%) 7.54% (14.56%)
Ratios and supplemental
data:
Net assets, end of
period (000 omitted) $2,616 $2,534 $562 $573
Ratio of expenses to
average net assets 2.50% 2.50% 2.50% 2.50%
Ratio of expenses to
average net assets
prior to expense
limitation 3.36% 2.56% 3.45% 4.38%
Ratio of net
investment loss to
average net assets (1.29%) (0.77%) (1.09%) (1.20%)
Ratio of net investment
loss to average net
assets prior to expense
limitation (2.15%) (0.83%) (2.04%) (3.08%)
Portfolio turnover rate 88% 178% 163% 163%
Average commission rate
paid3 $0.0067 $0.0079 $0.0118 N/A
PERIOD
3/29/941
TO
10/31/94
<S> <C>
Net asset value, beginning
of period $10.000
Income from investment
operations:
Net investment loss (0.030)
Net realized and
unrealized gain (loss)
from investments and 0.890
currencies ------------
Total from investment 0.860
operations ------------
Less dividends and
distributions:
Dividends from net --
investment income
Distributions from net
realized gain on --
investment transactions ------------
Total dividends and distributions 0.000
------------
Net asset value, end of $10.860
period ============
8.58%
Total Return2
Ratios and supplemental
data:
Net assets, end of $431
period (000 omitted)
Ratio of expenses to 2.50%
average net assets
Ratio of expenses to
average net assets
prior to expense 4.32%
limitation
Ratio of net
investment loss to (0.88%)
average net assets
Ratio of net investment
loss to average net
assets prior to expense (2.70%)
limitation 104%
Portfolio turnover rate
Average commission rate N/A
paid3
- ------------------------
1 Date of initial public offering; ratios and total return have been annualized.
2 Does not include maximum sales charge of 4.75% nor the 1% limited contingent deferred sales charge
that would apply in the event of certain redemptions within 12 months of purchase of A Class shares.
Does not include contingent deferred sales
charge which varies from 1-4% depending upon the holding period for Class B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total number of shares purchased and
sold during the period for which there was a commission charged.
4 The average shares outstanding method has been applied for per share information.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding throughout each period were as follows:
NEW PACIFIC FUND C CLASS
---------------------------------------------------------------
SIX MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value, beginning
of period $ 7.320 $ 9.490 $ 8.830 $10.660
Income from investment
operations:
Net investment loss (0.041)4 (0.080)4 (0.050) (0.080)
Net realized and
unrealized gain (loss)
from investments and
currencies (1.284) (1.940) 0.720 (1.460)
------------ ------------ ------------ ------------
Total from investment
operations (1.325) (2.020) 0.670 (1.540)
------------ ------------ ------------ ------------
Less dividends and
distributions:
Dividends from net
investment income (0.055) (0.150) (0.010) --
Distributions from net
realized gain on
investment transactions -- -- -- (0.290)
------------ ------------ ------------ ------------
Total dividends and
distributions (0.055) (0.150) (0.010) (0.290)
------------ ------------ ------------ ------------
Net asset value, end of
period $ 5.940 $ 7.320 $ 9.490 $ 8.830
============ ============ ============ ============
Total Return2 (17.98%) (21.85%) 7.58% (14.57%)
Ratios and supplemental data:
Net assets, end of
period (000 omitted) $124 $129 $44 $17
Ratio of expenses to
average net assets 2.50% 2.50% 2.50% 2.50%
Ratio of expenses to
average net assets
prior to expense
limitation 3.36% 2.56% 3.45% 4.38%
Ratio of net investment
loss to average
net assets (1.29%) (0.77%) (1.09%) (1.02%)
Ratio of net investment
loss to average net
assets prior to expense
limitation (2.15%) (0.83%) (2.04%) (2.90%)
Portfolio turnover rate 88% 178% 163% 163%
Average commission rate
paid3 $0.0067 $0.0079 $0.0118 N/A
PERIOD
7/7/941
TO
10/31/94
<S> <C>
Net asset value, beginning
of period $10.000
Income from investment
operations:
Net investment loss
Net realized and (0.020)
unrealized gain (loss)
from investments and
currencies 0.680
Total from investment ------------
operations 0.660
------------
Less dividends and
distributions:
Dividends from net
investment income
Distributions from net --
realized gain on
investment transactions --
Total dividends and
distributions 0.000
------------
Net asset value, end of
period $10.660
============
Total Return2 6.55%
Ratios and supplemental data:
Net assets, end of
period (000 omitted) $12
Ratio of expenses to
average net assets 2.50%
Ratio of expenses to
average net assets
prior to expense
limitation 4.31%
Ratio of net investment
loss to average
net assets (0.83%)
Ratio of net investment
loss to average net
assets prior to expense
limitation (2.64%)
Portfolio turnover rate 104%
Average commission rate
paid3 N/A
- ------------------------
1 Date of initial public offering; ratios have been annualized.
2 Does not include maximum sales charge of 4.75% nor the 1% limited contingent deferred sales charge
that would apply in the event of certain redemptions within 12 months of purchase of A Class shares.
Does not include contingent deferred sales charge which varies from 1-4% depending upon the holding
period for Class B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total number of shares purchased and
sold during the period for which there was a commission charged.
4 The average shares outstanding method has been applied for per share information.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding throughout each period were as follows:
NEW PACIFIC FUND INSTITUTIONAL CLASS
---------------------------------------------------------------------
SIX MONTHS
ENDED
4/30/98 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1997 1996 1995
<S> <C> <C> <C> <C>
Net asset value, beginning
of period $ 7.440 $ 9.530 $ 8.770 $10.480
Income from investment operations:
Net investment income (loss) (0.009)4 0.0204 (0.050) (0.010)
Net realized and unrealized
gain (loss) from investments
and currencies (1.286) (1.960) 0.820 (1.410)
------------ ------------ ------------ ------------
Total from investment
operations (1.295) (1.940) 0.770 (1.420)
------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment
income (0.055) (0.150) (0.010) --
Distributions from net
realized gain on investment
transactions -- -- -- (0.290)
------------ ----------- ------------ ------------
Total dividends and
distributions (0.055) (0.150) (0.010) (0.290)
------------ ------------ ------------ ------------
Net asset value, end of
period $ 6.090 $ 7.440 $ 9.530 $ 8.770
============ ============ ============ ============
Total Return2 (17.40%) (20.79%) 8.77% (13.65%)
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $192 $250 $119 $62
Ratio of expenses to
average net assets 1.50% 1.50% 1.50% 1.50%
Ratio of expenses to
average net assets prior
to expense limitation 2.36% 1.56% 2.45% 3.38%
Ratio of net investment
income (loss) to average
net assets (0.29%) 0.22% (.09%) (0.16%)
Ratio of net investment
income (loss) to average
net assets prior to
expense limitation (1.15%) 0.16% (1.04%) (2.04%)
Portfolio turnover rate 88% 178% 163% 163%
Average commission rate
paid3 $0.0067 $0.0079 $0.0118 N/A
PERIOD
2/3/941
TO
10/31/94
<S> <C>
Net asset value, beginning
of period $11.140
Income from investment operations:
Net investment income (loss) 0.010
Net realized and unrealized
gain (loss) from investments (0.670)
and currencies -----------
Total from investment
operations (0.660)
-----------
Less dividends and distributions:
Dividends from net investment
income --
Distributions from net
realized gain on investment
transactions --
------------
Total dividends and
distributions 0.000
------------
Net asset value, end of
period $10.480
============
Total Return2 (5.98%)
Ratios and supplemental data:
Net assets, end of period
(000 omitted) $47
Ratio of expenses to
average net assets 1.50%
Ratio of expenses to
average net assets prior
to expense limitation 3.31%
Ratio of net investment
income (loss) to average
net assets 0.23%
Ratio of net investment
income (loss) to average
net assets prior to
expense limitation (1.58%)
Portfolio turnover rate 104%
Average commission rate
paid3 N/A
- ------------------------
1 Date of initial public offering; ratios have been annualized.
2 Does not include maximum sales charge of 4.75% nor the 1% limited contingent deferred sales charge
that would apply in the event of certain redemptions within 12 months of purchase of A Class shares.
Does not include contingent deferred sales charge which varies from 1-4% depending upon the holding
period for Class B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total number of shares purchased
and sold during the period for which there was a commission charged.
4 The average shares outstanding method has been applied for per share information.
See accompanying notes
</TABLE>
DELAWARE GROUP ADVISER FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1998
(UNAUDITED)
Delaware Group Adviser Funds, Inc. ("The Company") is registered as
a diversified open-end investment company under the Investment
Company Act of 1940, as amended. The Company is organized as a
Maryland Corporation. The Delaware Group Adviser Funds, Inc.
currently issues three separate series of shares (each referred to
as a "Fund" or collectively as the "Funds"); the U.S. Growth Fund,
the Overseas Equity Fund (formerly known as the World Growth Fund)
and the New Pacific Fund. Each fund offers four classes of shares.
The A Class carries a front-end sales charge of 4.75%. The B Class
carries a back-end deferred sales charge, C Class carries a level
load deferred sales charge and the Institutional Class has no sales
charge.
The U.S. Growth Fund seeks to maximize capital appreciation. The
Overseas Equity fund seeks to maximize total return by investing in
an internationally diversified mix of stocks. The New Pacific Fund
seeks long term capital appreciation by investing in Pacific Basin
countries.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally
accepted accounting principles 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. Securities listed on a foreign exchange are valued at the
last quoted sales price before the Fund is valued. Long-term debt
securities are valued by an independent pricing service and such
prices are believed to reflect the fair value of such securities.
Money market instruments having less than 60 days to maturity are
valued at amortized cost, which approximates market value. Other
securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or
under the direction of the company Board of Directors.
Federal Income Taxes - Each 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 generally accepted accounting
principles.
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 - Each Fund may invest in a pooled cash
account along with other members of the Delaware Investments Family
of Mutual 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 at least 100%
collateralized. However, in the event of default or bankruptcy by
the counterparty to the agreement, realization of the collateral may
be subject to legal proceedings.
Foreign Currency Transactions - Transactions denominated in foreign
currencies are recorded at the current prevailing exchange rates.
The value of all assets and liabilities denominated in foreign
currencies are translated into U.S. dollars at the exchange rate of
such currencies against the U.S. dollar as of 3:00 PM EST.
Transaction gains or losses resulting from changes in exchange rates
during the reporting period or upon settlement of the foreign
currency transaction are reported in operations for the current
period. It is not practical to isolate that portion of both realized
and unrealized gains and losses on investments in equity securities
in the statement of operations that result from fluctuations in
foreign currency exchange rates. The Fund does isolate that portion
of gains and losses on investments in debt securities which are due
to changes in the foreign exchange rate from that which are due to
changes in market prices of debt securities. The Fund's report
certain foreign currency related transactions as components of
realized gains 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 Mutual 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 Funds are aware of such dividends, net of all non-rebatable tax
withholdings. Original issue discounts are accreted to interest
income over the lives of the respective securities. Withholding
taxes on foreign dividends have been provided for in accordance with
the Fund's understanding of the applicable country's tax rules and
rates. The Fund declares and pays dividends from net investment
income and capital gains annually.
Certain Fund expenses are paid through "soft dollar" arrangements
with brokers. The amount of these expenses is less than 0.01% of
each Fund's average daily net assets.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates.
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement,
the Fund currently pays Delaware Management Company, (DMC) the
"Investment Manager" of each Fund, a monthly fee based upon each
Fund's average daily net assets at the following annual rates:
U.S. GROWTH OVERSEAS NEW PACIFIC
FUND EQUITY FUND FUND
- ------------------------------------------------------------------
Management fee as a
percentage of average
daily net assets
(per annum) .70% 1.00% .80%
DMC has entered into sub-advisory agreements with Lynch & Mayer Inc.
with respect to the management of the U.S. Growth Fund, with
Delaware Investment Advisors Limited, as of September 15, 1997, with
respect to the Overseas Equity Fund, both affiliates of and with
John Govett & Company Limited with respect to the management of the
New Pacific Fund. The sub-advisers receive sub-advisory fees from
the Investment Manager for their services calculated in accordance
with the schedule set forth below. The Funds do not pay any fees to
the sub-advisers:
U.S. GROWTH OVERSEAS NEW PACIFIC
FUND EQUITY FUND FUND
- ------------------------------------------------------------------
Sub-advisory fee as a
percentage of average
daily net assets
(per annum) .40% .80% .50%
DMC has elected to waive that portion, if any, of the management fee
and reimburse the Fund to the extent that annual operating expenses
exclusive of taxes, interest, brokerage commissions and
extraordinary expenses, exceed 1.50% of average daily net assets of
each Fund through April 30, 1998. On May 1,1998 the annual operating
expenses of the Overseas Equity Fund and New Pacific Fund will
increase to 1.55% and 1.70% respectively. Total expenses absorbed by
DMC for the six months ended April 30, 1998 were as follows:
U.S. GROWTH OVERSEAS NEW PACIFIC
FUND EQUITY FUND FUND
- ------------------------------------------------------------------
Total expenses absorbed
by DMC $0 $25,334 $40,558
The Funds have engaged Delaware Service Company, Inc. (DSC), an
affiliate of DMC, to serve as dividend disbursing and transfer agent,
and to provide accounting services for the Funds. For the six months
ended April 30, 1998, the amount expensed for each Fund were as follows:
U.S. GROWTH OVERSEAS NEW PACIFIC
FUND EQUITY FUND FUND
- ------------------------------------------------------------------
Dividend disbursing,
transfer agent fees
and expenses $19,980 $11,936 $25,770
Accounting fees $ 1,634 $ 705 $ 405
On April 30, 1998, the Funds had payables to affiliates as follows:
U.S. GROWTH OVERSEAS NEW PACIFIC
FUND EQUITY FUND FUND
- ------------------------------------------------------------------
Investment management
fee and other
expenses payable to
DMC and affiliates $67,196 $ 0 $ 0
Dividend disbursing,
transfer agent
fees, accounting
fees and other
expenses payable
to DSC $11,611 $3,354 $ 4,935
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 0.30% of the average daily net assets of
the A Class and 1.00% of the average daily net assets of the B and C
Class.
For the six months ended April 30, 1998 DDLP earned commissions on
sales of the Class A shares for each Series as follows:
U.S. GROWTH OVERSEAS NEW PACIFIC
FUND EQUITY FUND FUND
- ------------------------------------------------------------------
$7,710 $719 $5,126
Certain officers of DMC, DSC and DDLP are officers, directors and/or
employees of the Funds. These officers, directors and employees are
paid no compensation by the Funds.
3. Investments
During the six months ended April 30, 1998, each Fund made purchases
and sales of investment securities other than U.S. government
securities and temporary cash investments as follows:
U.S. GROWTH OVERSEAS NEW PACIFIC
FUND EQUITY FUND FUND
- ------------------------------------------------------------------
Purchases $22,196,007 $ 4,016,670 $10,761,774
Sales $16,575,879 $11,633,084 $ 7,504,776
At April 30, 1998, the aggregate cost of securities and unrealized
appreciation (depreciation) for federal income tax purposes are as
follows:
U.S. GROWTH OVERSEAS NEW PACIFIC
FUND EQUITY FUND FUND
- ------------------------------------------------------------------
Cost Of Investments $33,105,019 $4,230,578 $10,339,702
=========== ========== ===========
Aggregated unrealized
appreciation $ 7,311,496 $ 481,951 $ 389,250
Aggregated unrealized
depreciation (283,816) (128,380) (774,022)
----------- ----------- -----------
Net unrealized
appreciation
(depreciation) $ 7,027,680 $ 353,571 $ (384,772)
=========== ========== ===========
For federal income tax purposes, the New Pacific Fund had a capital
loss carryforward at October 31, 1997 of $1,117,944 which may be
carried forward and applied against future capital gains. The
capital loss carryforward expires in 2004.
4. Capital Stock
Transactions in capital stock shares were as follows:
U.S. GROWTH FUND
-----------------------------------
SIX MONTHS
ENDED YEAR
4/30/98 ENDED
(UNAUDITED) 10/31/97
Shares sold:
A Class 516,856 708,527
B Class 143,318 52,772
C Class 50,822 13,752
Institutional Class 469,244 492,699
Shares issued upon reinvestment of
distributions from net realized gains
from investment transactions:
A Class 246,836 125,787
B Class 58,146 6,677
C Class 9,964 429
Institutional Class 677,567 76,989
------------ ------------
2,172,753 1,477,632
------------ ------------
Shares repurchased:
A Class (307,565) (1,584,408)
B Class (15,403) (17,225)
C Class (6,914) (3,236)
Institutional Class (271,083) (193,024)
------------ ------------
(600,965) (1,797,893)
Net Increase (Decrease) 1,571,788 (320,261)
============ ============
OVERSEAS EQUITY FUND
-----------------------------------
SIX MONTHS
ENDED YEAR
4/30/98 ENDED
(UNAUDITED) 10/31/97
Shares sold:
A Class 29,877 196,269
B Class 9,363 32,677
C Class 5,727 8,181
Institutional Class 1,699 8,181
Shares issued upon reinvestment of
distributions from net realized gains
from investment transactions:
A Class 188,305 79,030
B Class 29,437 6,991
C Class 3,317 702
Institutional Class 1,127 123
------------ ------------
268,852 332,154
------------ ------------
Shares repurchased:
A Class (811,043) (607,946)
B Class (8,320) (18,445)
C Class (5,836) (4,765)
Institutional Class (1,363) (26,488)
------------ ------------
(826,562) (657,644)
Net Decrease (557,710) (325,490)
============ ============
NEW PACIFIC FUND
-----------------------------------
SIX MONTHS
ENDED YEAR
4/30/98 ENDED
(UNAUDITED) 10/31/97
Shares sold:
A Class 458,265 1,056,867
B Class 178,849 319,098
C Class 10,763 16,227
Institutional Class 68,198 119,458
Shares issued upon reinvestment of
distributions from net realized gains
from investment transactions:
A Class 8,030 20,129
B Class 2,640 872
C Class 146 80
Institutional Class 286 39
------------ ------------
727,177 1,532,770
------------ ------------
Shares repurchased:
A Class (245,865) (1,348,426)
B Class (90,623) (38,756)
C Class (7,677) (3,309)
Institutional Class (70,593) (98,419)
------------ ------------
(414,758) (1,488,910)
Net Increase 312,419 43,860
============ ============
5. Foreign Exchange Contracts
The Overseas Equity and New Pacific Fund will generally enter into
forward foreign currency contracts as a way of managing foreign
exchange rate risk. A fund may enter into these contracts 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. A fund may also use
these contracts to hedge the U.S. dollar value of securities it
already owns denominated in foreign currencies.
Forward foreign currency contracts are valued at the mean between
the bid and asked prices of the contracts and are marked-to-market
daily. Interpolated values are derived when the settlement date of
the contract is an interim date for which quotations are not
available. The change in market value is recorded by the Fund as an
unrealized gain or loss. When the contract is closed, the Fund
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.
The use of forward foreign currency contracts does not eliminate
fluctuations in the underlying prices of the Fund's securities, but
it does establish a rate of exchange that can be achieved in the
future. Although forward foreign currency contracts limit the risk
of loss due to a decline in the value of the hedged currency, they
also limit any potential gain that might result should the value of
the currency increase. In addition, the Fund could be exposed to
risks if the counterparties to the contracts are unable to meet the
terms of their contracts.
The following forward foreign currency contract was outstanding for
the New Pacific Fund at April 30, 1998:
Contract In Exchange Settlement Unrealized
To Deliver For Date (Depreciation)
- ------------ ------------ ------------ ------------
690,300 180,000 7/7/98 ($1,771)
Malaysian Rinngit
6. Credit and Market Risk
Some countries in which the Overseas Equity and New Pacific Fund 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 Overseas Equity Fund and the
New Pacific Fund 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 funds..
7. Lines of Credit
The committed lines of credit are $1,000,000, $500,000 and $800,000
for the U.S. Growth Fund, Overseas Equity Fund and New Pacific Fund,
respectively. No amounts were outstanding at April 30, 1998, or at
any time during the fiscal year.
A REPORT ON THE OVERSEAS EQUITY FUND SPECIAL MEETING OF SHAREHOLDERS
A special meeting of shareholders was held on November 18, 1997. The
matter submitted to a vote of shareholders was the approval of a
sub-advisory agreement on behalf of the Overseas Equity Fund between
Delaware Management Company and Delaware International Advisers
Limited.
Number of Votes:
FOR ABSTAIN AGAINST
- ------------ ------------ ------------
779,858 2,420 22,537
THIS SEMI-ANNUAL REPORT IS FOR THE INFORMATION OF U.S. GROWTH FUND,
OVERSEAS EQUITY FUND AND NEW PACIFIC Fund shareholders, but it may
be used with prospective investors when preceded or accompanied by a
current Prospectus for U.S. Growth Fund, Overseas Equity Fund and
New Pacific Fund, which sets forth details about charges, expenses,
investment objectives and operating policies of each Fund. You
should read the prospectus carefully before you invest. Summary
investment results are documented in each Fund's current Statement
of Additional Information. 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 each Fund will fluctuate so that
shares, when redeemed, may be worth more or less than their original
cost.
INVESTMENT MANAGER
Delaware Management Company
Philadelphia
INTERNATIONAL AFFILIATE (SUBADVISER)
Delaware International Advisers Ltd.
London
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia
SUBADVISERS
Lynch & Mayer
New York
AIB Govett Asset Management Ltd.
London
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia
1818 Market Street
Philadelphia, PA 19103-3682
[GRAPHIC OMITTED: PHOTO OF 3 GLOBES]
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawarefunds.com
International investing has special risks that include less stable
economies and governments, currency fluctuations and different
accounting standards.
Be sure to consult your financial adviser when making investments.
Mutual funds can be a valuable part of your financial plan; however,
shares of the Fund are not FDIC or NCUSIF insured, are not
guaranteed by any bank or any credit union, and involve investment
risk, including the possible loss of the principal. Shares of the
Fund are not bank or credit union deposits.
(copyright) Delaware Distributors, L.P.
[LOGO OMITTED: DELAWARE INVESTMENTS
---------------------
Philadelphia * London]
Printed in the USA
on recycled paper
SA-DAF [4/98] PP6/98
(775)
ONE COMMERCE SQUARE
PHILADELPHIA, PA 19103
DELAWARE INVESTMENTS
Investment Company Act of 1940
File No. 811-7972
Rule 30b2-1
June 29, 1998
Filed via EDGAR (CIK #0000910682)
- --------------------------------
Securities and Exchange Commission
Document Control
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: File No. 811-7972
DELAWARE GROUP ADVISER FUNDS, INC. - U.S. GROWTH FUND,
OVERSEAS EQUITY FUND AND NEW PACIFIC FUND
- -----------------------------------------------------------------------
Dear Commission:
In accordance with Rule 30b2-1 under the Investment Company Act of 1940,
filed electronically via the EDGAR system, please find the Semi-Annual
Report to shareholders of Delaware Group Adviser Funds, Inc. - U.S.
Growth Fund, Overseas Equity Fund and New Pacific Fund.
Very truly yours,
/s/Michael D. Mabry
- ---------------------------------------
Michael D. Mabry
Assistant Vice President/
Assistant Secretary/Senior Counsel
