DELAWARE GROUP ADVISER FUNDS INC /MD/, 485BPOS, 1998-02-27

DELAWARE GROUP ADVISER FUNDS INC /MD/
485BPOS, 1998-02-27

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A
File No. 33-67490
File No. 811-7972

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /

Pre-Effective Amendment No. / /

Post-Effective Amendment No. 9 / X /

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /

Amendment No. 11
--
DELAWARE GROUP ADVISER FUNDS, INC.
- -------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)

1818 Market Street, Philadelphia, Pennsylvania 19103
- -------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (215) 255-2923
--------------
George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)

Approximate Date of Public Offering: February 28, 1998
-----------------

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
-------
X on February 28, 1998 pursuant to paragraph (b)
-------
60 days after filing pursuant to paragraph (a)(1)
-------
on (date) pursuant to paragraph (a)(1)
-------
75 days after filing pursuant to paragraph (a)(2)
-------
on (date) pursuant to paragraph (a)(2) of Rule 485
-------

If appropriate:

this post-effective amendment designates a new
------- effective date for a previously filed post-effective
amendement

Title of Securities Being Registered
-----------------------------------------
U.S. Growth Fund A Class, U.S. Growth Fund B Class, U.S. Growth Fund C Class,
U.S. Growth Fund Institutional Class, Overseas Equity Fund A Class,
Overseas Equity Fund B Class, Overseas Equity Fund C Class,
Overseas Equity Fund Institutional Class, New Pacific Fund A Class,
New Pacific Fund B Class,
New Pacific Fund C Class and New Pacific Fund Institutional Class

<PAGE>

--- C O N T E N T S ---

This Post-Effective Amendment No. 9 to Registration File No. 33-67490
includes the following:

1. Facing Page

2. Contents Page

3. Cross-Reference Sheets

4. Part A - Prospectuses

5. Part B - Statement of Additional Information

6. Part C - Other Information

7. Signatures

<PAGE>

CROSS-REFERENCE SHEET*

PART A
<TABLE>
<CAPTION>

Location in
Item No. Description Prospectuses
- -------- ----------- ------------

A Classes/
B Classes/ Institutional
C Classes Classes
<S> <C> <C> <C>
1 Cover Page.......................................... Cover Cover

2 Synopsis............................................ Synopsis; Summary Synopsis; Summary
of Expenses of Expenses

3 Condensed Financial Information..................... Financial Highlights Financial Highlights

4 General Description of Registrant .................. Investment Investment
Objectives and Objectives and
Strategies; Strategies;
Implementation of Implementation of
Investment Objectives Investment Objectives
and Policies and Policies

5 Management of the Fund.............................. Management of Management of
the Funds the Funds

6 Capital Stock and Other Securities ................. The Delaware Dividends and
Difference; Distributions;
Dividends and Taxes
Distributions;
Taxes

7 Purchase of Securities Being Offered................ Cover; How Cover; How
to Buy Shares; to Buy Shares;
Calculation of Calculation of
Offering Price and Net Net Asset Value
Asset Value Per Share; Per Share;
Management Management of the
of the Funds of the Funds

8 Redemption or Repurchase............................ How to Buy How to Buy
Shares; Redemption Shares; Redemption
and Exchange and Exchange

9 Legal Proceedings................................... None None

</TABLE>

<PAGE>

* This filing relates to Class A Shares, Class B Shares and Class C
Shares of U.S. Growth Fund, Overseas Equity Fund and New Pacific Fund,
which are described in one prospectus. This filing also relates to the
Institutional Class of each Fund, which is described in another
prospectus. The three Funds (and twelve classes) have a common Part B
and Part C.

<PAGE>

CROSS-REFERENCE SHEET

PART B
<TABLE>
<CAPTION>

Location in
Item No. Description Prospectuses
- -------- ----------- ------------

10 Cover Page..................................................... Cover

11 Table of Contents.............................................. Table of Contents

12 General Information and History................................ General Information

13 Investment Objectives and Policies............................. Investment Objectives and
Policies; Investment Restrictions

14 Management of the Registrant................................... Officers and Directors

15 Control Persons and Principal Holders of Securities............ Officers and Directors

16 Investment Advisory and Other Services......................... Plans Under Rule 12b-1 for
the Fund Classes (under
Purchasing Shares); Investment
Management Agreements;
General Information;
Financial Statements

17 Brokerage Allocation........................................... Trading Practices and Brokerage

18 Capital Stock and Other Securities............................. Capitalization and
Noncumulative Voting
(under General Information)

19 Purchase, Redemption and Pricing of Securities
Being Offered.................................................. Purchasing Shares;
Determining Offering Price
and Net Asset Value;
Redemption and Repurchase;
Exchange Privilege

20 Tax Status..................................................... Dividends, Distributions and Taxes

21 Underwriters .................................................. Purchasing Shares

22 Calculation of Performance Data................................ Performance Information

23 Financial Statements........................................... Financial Statements
</TABLE>

<PAGE>

CROSS-REFERENCE SHEET

PART C
<TABLE>
<CAPTION>

Location in
Part C
-----------
<S> <C> <C>

24 Financial Statements and Exhibits....................................... Item 24

25 Persons Controlled by or under Common
Control with Registrant................................................. Item 25

26 Number of Holders of Securities......................................... Item 26

27 Indemnification......................................................... Item 27

28 Business and Other Connections of Investment Adviser.................... Item 28

29 Principal Underwriters.................................................. Item 29

30 Location of Accounts and Records........................................ Item 30

31 Management Services..................................................... Item 31

32 Undertakings............................................................ Item 32
</TABLE>

<PAGE>

(DAF-R)

TABLE OF CONTENTS

Cover Page

Synopsis

Summary of Expenses

Financial Highlights

Investment Objectives and Strategies
U.S. Growth Fund
Overseas Equity Fund
New Pacific Fund

The Delaware Difference
Plans and Services

Classes of Shares

How to Buy Shares

Redemption and Exchange

Dividends and Distributions

Taxes

Calculation of Offering Price and Net Asset Value Per Share

Management of the Funds

Implementation of Investment Objectives and Policies

<PAGE>

(DAF-R)

U.S. GROWTH FUND PROSPECTUS
OVERSEAS EQUITY FUND (formerly World Growth Fund) FEBRUARY 28, 1998
NEW PACIFIC FUND

A CLASS SHARES
B CLASS SHARES
C CLASS SHARES

--------------------------------------------------------------------

1818 Market Street, Philadelphia, PA 19103

For Prospectus and Performance: Nationwide 800-523-4640

Information on Existing Accounts: (SHAREHOLDERS ONLY)
Nationwide 800-523-1918

Dealer Services: (BROKER/DEALERS ONLY)
Nationwide 800-362-7500

Representatives of Financial Institutions
Nationwide 800-659-2265

Delaware Group Adviser Funds, Inc. ("Adviser Funds, Inc.") is an
open-end management investment company. Adviser Funds, Inc. currently issues
three separate series of shares (each referred to as a "Fund" or collectively
as the "Funds") each representing a separate, diversified portfolio of
securities. The Funds are U.S. Growth Fund, Overseas Equity Fund (formerly
World Growth Fund) and New Pacific Fund. See Restructuring of the Funds in
Part B. Each Fund has a fundamental investment objective and certain
investment policies which are described in this Prospectus.

Each Fund offers three retail classes of shares: "Class A Shares,"
"Class B Shares" and "Class C Shares." Each class is referred to individually
as a "Class" and collectively as the "Classes."

This Prospectus relates only to the Classes listed above and sets
forth information that you should read and consider before you invest. Please
retain it for future reference. The Funds' Statement of Additional Information
("Part B" of Adviser Funds, Inc.'s registration statement) dated February 28,
1998, as it may be amended from time to time, contains additional information
about the Funds and has been filed with the Securities and Exchange Commission
(the "SEC"). Part B is incorporated by reference into this Prospectus and is
available, without charge, by writing to Delaware Distributors, L.P. at the
above address or by calling any of the above numbers. The Funds' financial
statements appear in their Annual Report, which will accompany any response to
requests for Part B. The SEC also maintains a Web site (http://www.sec.gov)
that contains Part B, material we incorporated by reference, and other
information regarding registrants that electronically file with the SEC.

This Prospectus contains useful information that can help the
investor decide whether a Fund's investment objective matches his/her own.
Achievement of a Fund's investment objective cannot, of course, be assured due
to the risk of capital loss from fluctuating prices inherent in any investment
in securities. Investments in the Funds are neither insured or guaranteed by
any entity.

-1-

<PAGE>

(DAF-R)

Each Fund also offers an Institutional Class, which is available for
purchase only by certain investors. A prospectus for the Funds' Institutional
Classes can be obtained by writing to Delaware Distributors, L.P. at the above
address or by calling the above number.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

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
FUNDS ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY
CREDIT UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
SHARES OF THE FUNDS ARE NOT BANK OR CREDIT UNION DEPOSITS.

-2-

<PAGE>

(DAF-R)

SYNOPSIS

The following synopsis is qualified in its entirety by the more
detailed information appearing in the body of the Prospectus.

Investment Objectives and Policies

The investment objective of U.S. Growth Fund is to maximize capital
appreciation by investing in companies of all sizes which have low dividend
yields, strong balance sheets and high expected earnings growth rates relative
to their industry. The investment objective of Overseas Equity Fund is to
maximize total return (capital appreciation and income), principally through
investments in an internationally diversified portfolio of equity securities.
The investment objective of New Pacific Fund is long-term capital appreciation
by investing primarily in companies which are domiciled in or have their
principal business activities in the Pacific Basin. Each objective is
"fundamental" and may be changed only with the approval of the holders of a
majority of the outstanding voting securities of the Fund, as defined in the
Investment Company Act of 1940 (the "1940 Act"). Certain investment policies
also are fundamental and thus require approval of shareholders if a Fund
wishes to change them. See Investment Restrictions in Part B. Still other
investment policies reflect current practices of the Funds and may be changed
by the Funds without the approval of shareholders.

Risk Factors
Prospective investors should consider a number of factors:

1. Overseas Equity Fund and New Pacific Fund may invest substantially
all of their assets in nonUnited States issuers. U.S. Growth Fund may invest
20% of its assets in such issuers. Investing in securities of non-United
States companies which are generally denominated in foreign currencies and the
utilization of forward foreign currency exchange contracts in connection with
those investments involve certain risk and opportunity considerations not
typically associated with investing in United States companies. Some of these
investments may be in markets of emerging countries, which may be subject to a
greater degree of economic, political and social instability than is the case
in the United States and Western European and other developed markets. See
Risk Factors and Special Considerations - Foreign Investments under Investment
Objectives and Strategies, and Implementation of Investment Objectives and
Policies.

2. Each Fund has the right to engage in options and futures
transactions for certain hedging, return enhancement and risk management
purposes in accordance with regulations of the Commodity Futures Trading
Commission ("CFTC"). While the Funds do not engage in options and futures for
speculative purposes, there are risks which result from the use of these
instruments, and an investor should carefully review the descriptions of these
risks in this Prospectus. Certain options and futures may be considered to be
derivative securities. See Implementation of Investment Objectives and
Policies.

3. Each Fund may invest in interest rate, currency and other types of
swaps for hedging purposes which could subject the Fund to increased risks.
Interest rate swaps may be considered to be derivative securities.
See Implementation of Investment Objectives and Policies.

4. U.S. Growth Fund may invest up to 10% of its assets in
non-investment grade fixed-income securities ("junk bonds"). Consequently,
greater risks may be involved with an investment in this Fund. See Risk
Factors and Special Considerations - Lower Rated Securities under Investment
Objectives and Strategies.

-3-

<PAGE>

(DAF-R)

Investment Manager, Sub-Adviser, Distributor and Transfer Agent

Delaware Management Company, Inc. (the "Manager") furnishes
investment management services to each Fund subject to the supervision and
direction of Adviser Funds, Inc.'s Board of Directors. See Restructuring of
the Funds in Part B. The Manager also provides investment management services
to certain other funds available from Delaware Investments. Delaware
Distributors, L.P. (the "Distributor") is the national distributor for each
Fund and for all of the other mutual funds available from Delaware
Investments. Delaware Service Company, Inc. (the "Transfer Agent") is the
shareholder servicing, dividend disbursing, accounting services and transfer
agent for each Fund and for all of the other mutual funds available from
Delaware Investments.

The Manager has selected sub-advisers to provide the day-to-day
investment management of the Funds. The sub-advisers for the Funds are: Lynch
& Mayer, Inc. for U.S. Growth Fund; Delaware International Advisers Ltd. for
Overseas Equity Fund; and AIB Govett, Inc. for New Pacific Fund.

See Summary of Expenses and Management of the Funds for further
information regarding the Manager and the fees payable under each Fund's
Investment Management Agreement and Sub-Advisory Agreement.

Sales Charges

The price of each of the Class A Shares includes a maximum front-end
sales charge of 4.75% of the offering price. The front-end sales charge is
reduced on certain transactions of at least $100,000 but under $1,000,000. For
purchases of $1,000,000 or more, the front-end sales charge is eliminated
(subject to a contingent deferred sales charge ("Limited CDSC") of 1% if
shares are redeemed within 12 months of purchase and if a dealer commission
was paid in connection with such purchase). Class A Shares are subject to
annual 12b-1 Plan expenses for the life of the investment.

The price of each of the Class B Shares is equal to the net asset
value per share. Class B Shares are subject to a CDSC of: (i) 4% if shares are
redeemed within two years of purchase; (ii) 3% if shares are redeemed during
the third or fourth year following purchase; (iii) 2% if shares are redeemed
during the fifth year following purchase; and (iv) 1% if shares are redeemed
during the sixth year following purchase. Class B Shares are subject to annual
12b-1 Plan expenses for approximately eight years after purchase.

The price of each of the Class C Shares is equal to the net asset
value per share. Class C Shares are subject to a CDSC of 1% if shares are
redeemed within 12 months of purchase. Class C Shares are subject to annual
12b-1 Plan expenses for the life of the investment.

See Classes of Shares and Distribution (12b-1) and Service under
Management of the Funds.

Purchase Amounts
Generally, the minimum initial investment in any Class is $1,000.
Subsequent investments generally must be at least $100.

Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000. For Class C Shares, each purchase must be in an amount
that is less than $1,000,000. An investor may exceed these maximum purchase
limitations for Class B Shares and Class C Shares by making cumulative
purchases over a period of time. An investor should keep in mind, however,
that reduced front-end sales charges apply to investments of $100,000 or more
in Class A Shares, and that Class A Shares are subject to lower annual 12b-1
Plan expenses than Class B Shares and Class C Shares and generally are not
subject to a CDSC. The minimum and maximum purchase amounts for retirement
plans may vary. See How to Buy Shares.

-4-

<PAGE>

(DAF-R)
Redemption and Exchange

Class A Shares of each Fund may be redeemed or exchanged at the net
asset value calculated after receipt of the redemption or exchange request.
Neither the Funds nor the Distributor assesses a charge for redemptions or
exchanges of Class A Shares, except for certain redemptions of shares
purchased at net asset value, which may be subject to a CDSC if a dealer's
commission was paid in connection with such purchases. See Front-End Sales
Charge Alternative - Class A Shares under Classes of Shares.

Class B Shares and Class C Shares may be redeemed or exchanged at the
net asset value calculated after receipt of the redemption or exchange request
subject, in the case of redemptions, to any applicable CDSC. Neither the Funds
nor the Distributor assesses any charges other than the CDSC for redemptions
or exchanges of Class B Shares or Class C Shares. There are certain
limitations on an investor's ability to exchange shares between the various
classes of shares that are offered. See Redemption and Exchange.

Open-End Investment Company

Adviser Funds, Inc. is an open-end management investment company.
Each Fund's portfolio of assets is diversified as defined by the 1940 Act.
Adviser Funds, Inc. was organized as a Maryland corporation on August 10,
1993. See Other Shareholder Matters under Management of the Funds.

-5-

<PAGE>

(DAF-R)

SUMMARY OF EXPENSES

A general comparison of the sales arrangements and other expenses
applicable to each Fund's Class A Shares, Class B Shares and Class C Shares
follows:
<TABLE>
<CAPTION>

U.S. Growth Overseas Equity New Pacific
Class A Class B Class C Class A Class B Class C Class A Class B Class C
Shareholder Transaction Expenses Shares Shares Shares Shares Shares Shares Shares Shares Shares
- -------------------------------- ------ ------ ------ ------ ------ ------ ------ ------ ------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price)........... 4.75% None None 4.75% None None 4.75% None None

Maximum Sales Charge Imposed
on Reinvested Dividends (as
a percentage of offering price) None None None None None None None None None

Maximum Contingent Deferred
Sales Charge (as a percentage
of original purchase price or
redemption proceeds, whichever
is lower) (1)................ None 4.00% 1.00% None 4.00% 1.00% None 4.00% 1.00%

Redemption Fees (2).......... None None None None None None None None None

</TABLE>

- ------------------------

(1) Class A purchases of $1,000,000 or more may be made at net asset value.
However, if in connection with any such purchase a dealer's commission
is paid to the financial adviser through whom such purchase is effected,
a Limited CDSC of 1% will be imposed on certain redemptions within 12
months of purchase. Additional Class A purchase options involving the
imposition of a CDSC may be permitted as described in the Prospectus
from time to time. Class B Shares are subject to a CDSC of: (i) 4% if
shares are redeemed within two years of purchase; (ii) 3% if shares are
redeemed during the third or fourth year following purchase; (iii) 2% if
shares are redeemed during the fifth year following purchase; (iv) 1% if
shares are redeemed during the sixth year following purchase; and (v) 0%
thereafter. Class C Shares are subject to a CDSC of 1% if the shares are
redeemed within 12 months of purchase. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset
Value under Redemption and Exchange; and Deferred Sales Charge
Alternative - Class B Shares, Level Sales Charge Alternative - Class C
Shares and Contingent Deferred Sales Charge - Class B Shares and Class C
Shares under Classes of Shares.

(2) CoreStates Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire.

-6-

<PAGE>

(DAF-R)

Annual Operating Expenses
(as a percentage of average daily U.S. Growth Overseas Equity
net assets after fee waivers and Class A Class B Class C Class A Class B Class C
expense reimbursements) Shares Shares Shares Shares Shares Shares
- ----------------------- ------- ------- ------- ------- ------- -------

<S> <C> <C> <C> <C> <C> <C>
Management Fees
(after voluntary waivers) (3) 0.70% 0.70% 0.70% 1.10%(4) 1.10%(4) 1.10%(4)

12b-1 Expenses
(including service fees) (6) 0.30%(7) 1.00% 1.00% 0.30%(7) 1.00% 1.00%

Other Operating Expenses
(after any voluntary
payments) (3).............. 0.44% 0.44% 0.44% 0.40% 0.40% 0.40%

Total Operating Expenses
(after voluntary waivers
and voluntary payments)(3) 1.44% 2.14% 2.14% 1.80% 2.50% 2.50%

</TABLE>

Annual Operating Expenses
(as a percentage of average daily New Pacific
net assets after fee waivers and Class A Class B Class C
expense reimbursements) Shares Shares Shares
- ----------------------- ------- ------- -------

<S> <C> <C> <C>
Management Fees
(after voluntary waivers) (3) 0.74%(5) 0.74%(5) 0.74%(5)

12b-1 Expenses
(including service fees) (6) 0.30%(7) 1.00% 1.00%

Other Operating Expenses
(after any voluntary
payments) (3).............. 0.76% 0.76% 0.76%

Total Operating Expenses
(after voluntary waivers
and voluntary payments)(3) 1.80% 2.50% 2.50%

</TABLE>

- ------------------------
For expense information about the Institutional Classes, see the separate
Prospectus relating to those classes.

(3) The Manager elected voluntarily to waive that portion, if any, of the
annual Management Fees payable by a particular Fund and to pay a Fund
for its expenses to the extent necessary to ensure that the expenses of
that Fund do not exceed on an annualized basis 1.50%, as a percentage of
average net assets (exclusive of taxes, interest, brokerage commissions,
extraordinary expenses and 12b-1 Plan expenses) through April 30, 1998.
Absent such fee waivers and expense payments, "Total Operating Expenses"
including "Management Fees" were as follows:

Total Operating Expenses Management Fees
Class A Class B Class C Class A Class B Class C
------- ------- ------- ------- ------- -------

<S> <C> <C> <C> <C> <C> <C>
U.S. Growth Fund 1.44% 2.14% 2.14% 0.70% 0.70% 0.70%
Overseas Equity Fund 1.80% 2.50% 2.50% 1.10% 1.10% 1.10%
New Pacific Fund 1.86% 2.56% 2.56% 0.80% 0.80% 0.80%
</TABLE>

(4) Effective September 15, 1997, the investment management fee payable by
Overseas Equity Fund changed from 1.10% of average daily net assets to
1.00% of average daily net assets. The expense information has been
restated to reflect that change.

(5) Effective the close of business May 3, 1996, the investment management
fee payable by the New Pacific Fund changed from 1.10% of average daily
net assets to 0.80% of average daily net assets. The expense information
has been restated to reflect that change.

(6) Class A Shares, Class B Shares and Class C Shares of each Fund are
subject to separate 12b-1 Plans. Long-term shareholders may pay more
than the economic equivalent of the maximum front-end sales charges
permitted by rules of the National Association of Securities Dealers,
Inc. (the "NASD"). See Distribution (12b-1) and Service under Management
of the Funds.

-7-

<PAGE>

(DAF-R)

(7) Prior to May 6, 1996, 12b-1 Plan expenses for Class A Shares were 0.35%.
Beginning May 6, 1996, those expenses were reduced to 0.30%. The expense
information has been restated to reflect that change.

For expense information about the Funds' Institutional Classes of
shares, see the separate prospectus relating to those classes.

Investors utilizing the Asset Planner asset allocation service also
typically incur an annual maintenance fee of $35 per Strategy. However,
effective November 1, 1996, the annual maintenance fee is waived until further
notice. Investors who utilize the Asset Planner for an Individual Retirement
Account ("IRA") will pay an annual IRA fee of $15 per Social Security number.
See Delaware Group Asset Planner in Part B.

The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods, assuming (1) a 5% annual
rate of return, (2) redemption and no redemption at the end of each time
period and (3) for Class B Shares and Class C Shares, payment of a CDSC at the
time of redemption, if applicable. The following example assumes the voluntary
waiver of the management fee by the Manager as discussed in this Prospectus.

Assuming Redemption Assuming No Redemption
1 Year 3 Years 5 Years 10 Years 1 Year 3 Years 5 Years 10 Years
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Growth Fund
Class A $61(1) $91 $122 $212 $61 $91 $122 $212
Class B $62 $97 $135 $229(2) $22 $67 $115 $229(2)
Class C $32 $67 $115 $247 $22 $67 $115 $247

Overseas Equity Fund
Class A $65(1) $101 $140 $249 $65 $101 $140 $249
Class B $65 $108 $153 $266(2) $25 $78 $133 $266(2)
Class C $35 $78 $133 $283 $25 $78 $133 $283

New Pacific Fund
Class A $65(1) $101 $140 $249 $65 $101 $140 $249
Class B $65 $108 $153 $266(2) $25 $78 $133 $266(2)
Class C $35 $78 $133 $283 $25 $78 $133 $283

</TABLE>

(1) Generally, no redemption charge is assessed upon redemption of Class A
Shares. Under certain circumstances, however, a Limited CDSC or other
CDSC, which has not been reflected in this calculation, may be imposed
on certain redemptions. See Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange.

(2) At the end of approximately eight years after purchase, Class B Shares
of a Fund will be automatically converted into Class A Shares of that
Fund. The example above assumes conversion of Class B Shares at the end
of the eighth year. However, the conversion may occur as late as three
months after the eighth anniversary of purchase, during which time the
higher 12b-1 Plan fees payable by Class B Shares will continue to be
assessed. The ten-year expense numbers for Class B Shares reflects
the expenses of Class B Shares for year eight and the expenses of
Class A Shares for years nine and ten. See Automatic Conversion of Class
B Shares under Classes of Shares for a description of the automatic
conversion feature.

This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.

-8-

<PAGE>

(DAF-R)

The purpose of the above tables is to assist the investor in
understanding the various costs and expenses they will bear directly or
indirectly in owning shares of each Fund.

- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

The following financial highlights are derived from the financial statements
of Delaware Group Adviser Funds, Inc. - U.S. Growth Fund, Overseas Equity Fund
and New Pacific Fund and have been audited by Ernst & Young LLP, independent
auditors for the fiscal period ended October 31, 1997 and by the Funds'
previous auditors for the periods ended October 31, 1994 through October 31,
1996. The data should be read in conjunction with the financial statements,
related notes, and the report of Ernst & Young LLP, all of which are
incorporated by reference into Part B. Further information about each Fund's
performance is contained in its Annual Report to shareholders. A copy of the
Funds' Annual Report (including the report of Ernst & Young LLP) may be
obtained from Adviser Funds, Inc. upon request at no charge.
- -------------------------------------------------------------------------------

-9-

<PAGE>

(DAF-R)

DAF-CHT

Class A Shares Class B Shares
U.S. Growth Fund U.S. Growth Fund
Period Period
12/3/93(1) 3/29/94(1)
Year Ended through Year Ended through
10/31/97 10/31/96(2) 10/31/95 10/31/94 10/31/97 10/31/96(2) 10/31/95 10/31/94

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........... $13.82 $12.43 $10.21 $10.00 $13.61 $12.33 $10.19 $10.00

Income From Investment Operations:
- ----------------------------------
Net Investment Loss............................ (0.06)(3) (0.09) (0.09) (0.04) (0.16)(3) (0.17) (0.14) (0.03)
Net Realized and Unrealized Gain
From Investments......................... 4.25 1.48 2.31 0.26 4.17 1.45 2.28 0.22

Total From Investment Operations......... 4.19 1.39 2.22 0.22 4.01 1.28 2.14 0.19

Less Dividends and Distributions:
- ---------------------------------
Dividends From Net Investment Income........... none none none (0.01) none none none none
Distributions From Net Realized Gain
on Investments.......................... (1.36) none none none (1.36) none none none
Total Dividends and Distributions.............. (1.36) none none (0.01) (1.36) none none none

Net Asset Value, End of Period................. $16.65 $13.82 $12.43 $10.21 $16.26 $13.61 $12.33 $10.19

- ------------------------------

Total Return(4)................................ 33.18% 11.18% 21.74% 2.18% 32.30% 10.38% 21.00% 1.90%
- ------------------------------

Ratios and Supplemental Data:
- -----------------------------
Net Assets, End of Period (000's omitted)...... $6,933 $16,118 $13,574 $10,669 $1,653 $809 $567 $204
Ratio of Expenses to Average Net Assets........ 1.44% 1.80% 1.85% 1.85% 2.14% 2.48% 2.50% 2.50%
Ratio of Expenses to Average Net Assets
Prior to Expense Limitation............. N/A 1.88% 2.18% 2.94% N/A 2.56% 2.83% 3.60%
Ratio of Net Investment Loss to Average Net
Assets.................................. (0.38%) (0.77%) (0.88%) (0.51%) (1.08%) (1.45%) (1.57%) (1.26%)
Ratio of Net Investment Loss to Average
Net Assets Prior to Expense Limitation.. N/A (0.85%) (1.21%) (1.60%) N/A (1.53%) (1.90%) (2.36%)
Portfolio Turnover Rate........................ 144% 131% 58% 66% 144% 131% 58% 66%
Average Commission Rate Paid (5)............... $0.0575 $0.0519 N/A N/A $0.0575 $0.0519 N/A N/A
</TABLE>

<PAGE>

Class C Shares
U.S. Growth Fund
Period
5/23/94(1)
Year Ended through
10/31/97 10/31/96(2) 10/31/95 10/31/94

<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $14.18 $12.85 $10.62 $10.00

Income From Investment Operations:
- ----------------------------------
Net Investment Loss............................. (0.17)(3) (0.16) (0.10) (0.03)
Net Realized and Unrealized Gain
From Investments......................... 4.37 1.49 2.33 0.65

Total From Investment Operations......... 4.20 1.33 2.23 0.62

Less Dividends and Distributions:
- ---------------------------------
Dividends From Net Investment Income............ none none none none
Distributions From Net Realized Gain
on Investments........................... (1.36) none none none
Total Dividends and Distributions............... (1.36) none none none

Net Asset Value, End of Period.................. $17.02 $14.18 $12.85 $10.62

- ------------------------------

Total Return(4)................................. 32.26% 10.35% 21.00% 6.17%
- ------------------------------

Ratios and Supplemental Data:
- -----------------------------
Net Assets, End of Period (000's omitted)....... $252 $55 $27 $5
Ratio of Expenses to Average Net Assets......... 2.14% 2.48% 2.50% 2.50%
Ratio of Expenses to Average Net Assets
Prior to Expense Limitation.............. N/A 2.56% 2.82% 3.54%
Ratio of Net Investment Loss to Average Net
Assets................................... (1.08%) (1.45%) (1.61%) (1.09%)
Ratio of Net Investment Loss to Average
Net Assets Prior to Expense Limitation... N/A (1.53%) (1.93%) (2.13%)
Portfolio Turnover Rate......................... 144% 131% 58% 66%
Average Commission Rate Paid (5)................ $0.0575 $0.0519 N/A N/A

</TABLE>

- --------------------

(1) Date of initial public offering; ratios have been annualized.

(2) Beginning May 6, 1996, Delaware Management Company, Inc. became the
investment manager of the Funds. See Restructuring of the Funds in Part
B.
(3) The average share outstanding method has been applied for per share
information.
(4) Does not include maximum sales charge of 4.75% nor the 1% Limited CDSC
that would apply in the event of certain redemptions within 12 months of
purchase of A Class Shares. See Contingent Deferred Sales Charge for
Certain Redemptions of Class A Shares Made At Net Asset Value. Does not
include any applicable CDSC, which varies from 1-4%, depending on the
holding period for Class B Shares and 1% for Class C Shares for 12 months
from the date of purchase. Total return reflects the voluntary waivers as
discussed under Summary of Expenses.
(5) Computed by dividing the total amount of commission paid by the total
number of shares purchased and sold during the period for which there was
a commission charged.

-10-

<PAGE>

(DAF-R)

DAF-CHT

Class A Shares Class B Shares
Overseas Equity Fund Overseas Equity Fund
Period Period
12/3/93(1) 3/29/94(1)
Year Ended through Year Ended through
10/31/97 10/31/96(2) 10/31/95 10/31/94 10/31/97 10/31/96(2) 10/31/95 10/31/94

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $12.39 $11.40 $11.00 $10.00 $11.56 $10.71 $10.40 $10.00

Income From Investment Operations:
- ----------------------------------
Net Investment Income (Loss).................... (0.06)(3) (0.06) 0.01 0.02 (0.14)(3) (0.06) (0.02) none
Net Realized and Unrealized Gain
From Investments......................... 0.96 1.07 0.40 1.01 0.89 0.93 0.35 0.43
Total From Investment Operations................ 0.90 1.01 0.41 1.03 0.75 0.87 0.33 0.43

Less Dividends and Distributions:
- ---------------------------------
Dividends From Net Investment Income............ (0.44) (0.02) (0.01) (0.03) (0.44) (0.02) (0.02) (0.03)
Distributions From Net Realized Gain
on Investments........................... (0.33) none none none (0.33) none none none
Total Dividends and Distributions............... (0.77) (0.02) (0.01) (0.03) (0.77) (0.02) (0.02) (0.03)

Net Asset Value, End of Period.................. $12.52 $12.39 $11.40 $11.00 $11.54 $11.56 $10.71 $10.40

- ---------------------------------

Total Return(4)................................. 7.74% 8.90% 3.81% 10.25% 6.95% 8.16% 3.19% 4.28%
- ------------
- ---------------------------------

Ratios and Supplemental Data:
- -----------------------------
Net Assets, End of Period (000's omitted)....... $10,868 $14,886 $13,018 $11,721 $1,450 $1,208 $1,183 $523
Ratio of Expenses to Average Net Assets......... 1.80% 1.82% 1.85% 1.85% 2.50% 2.50% 2.50% 2.50%
Ratio of Expenses to Average Net Assets

Prior to Expense Limitation.............. N/A 2.60% 2.96% 3.56% N/A 3.28% 3.61% 4.22%
Ratio of Net Investment Income (Loss) to
Average Net Assets....................... (0.45%) (0.51%) 0.00% 0.25% (1.16%) (1.19%) (0.57%) (0.37%)
Ratio of Net Investment Income (Loss) to Average
Net Assets Prior to Expense Limitation... N/A (1.29%) (1.11%) (1.96%) N/A (1.97%) (1.68%) 2.09%
Portfolio Turnover Rate......................... 18% 21% 9% 6% 18% 21% 9% 6%
Average Commission Rate Paid (5)................ $0.0529 $0.0448 N/A N/A $0.0529 $0.0448 N/A N/A

</TABLE>

<PAGE>

Class C Shares
Overseas Equity Fund
Period
5/10/94(1)
Year Ended through
10/31/97 10/31/96(2) 10/31/95 10/31/94

<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $11.58 $10.73 $10.43 $10.00

Income From Investment Operations:
- ----------------------------------
Net Investment Income (Loss).................... (0.14)(3) (0.06) (0.06) 0.01
Net Realized and Unrealized Gain
From Investments......................... 0.88 0.93 0.39 0.44
Total From Investment Operations................ 0.74 0.87 0.33 0.45

Less Dividends and Distributions:
- ---------------------------------
Dividends From Net Investment Income............ (0.44) (0.02) (0.03) (0.02)
Distributions From Net Realized Gain
on Investments........................... (0.33) none none none
Total Dividends and Distributions............... (0.77) (0.02) (0.03) (0.02)

Net Asset Value, End of Period.................. $11.55 $11.58 $10.73 $10.43

- ---------------------------------

Total Return(4)................................. 6.85% 8.15% 3.16% 4.45%
- ------------
- ---------------------------------

Ratios and Supplemental Data:
- -----------------------------
Net Assets, End of Period (000's omitted)....... $159 $112 $43 $38
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.............. N/A 3.28% 3.61% 4.23%
Ratio of Net Investment Income (Loss) to
Average Net Assets....................... (1.16%) (1.19%) (0.62%) 0.16%
Ratio of Net Investment Income (Loss) to Average
Net Assets Prior to Expense Limitation... N/A (1.97%) (1.73%) (1.57%)
Portfolio Turnover Rate......................... 18% 21% 9% 6%
Average Commission Rate Paid (5)................ $0.0529 $0.0448 N/A N/A

</TABLE>

- --------------------

(1) Date of initial public offering; ratios have been annualized.

(2) Beginning May 6, 1996, Delaware Management Company, Inc. became the
investment manager of the Funds. Beginning September 15, 1997, Delaware
International Advisers Ltd. became sub-adviser to Overseas Equity Fund.
See Restructuring of the Funds in Part B.
(3) The average share outstanding method has been applied for per share
information.
(4) Does not include maximum sales charge of 4.75% nor the 1% Limited CDSC
that would apply in the event of certain redemptions within 12 months of
purchase of A Class Shares. See Contingent Deferred Sales Charge for
Certain Redemptions of Class A Shares Made At Net Asset Value. Does not
include any applicable CDSC, which varies from 1-4%, depending on the
holding period for Class B Shares and 1% for Class C Shares for 12 months
from the date of purchase. Total return reflects the voluntary waivers as
discussed under Summary of Expenses.

-11-

<PAGE>

(DAF-R)

(5) Computed by dividing the total amount of commission paid by the total
number of shares purchased and sold during the period for which there was
a commission charged.

-12-

<PAGE>

(DAF-R)

DAF-CHT

Class A Shares Class B Shares
New Pacific Fund New Pacific Fund
Period Period
12/3/93(1) 3/29/94(1)
Year Ended through Year Ended through
10/31/97 10/31/96(2) 10/31/95 10/31/94 10/31/97 10/31/96(2) 10/31/95 10/31/94

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $9.42 $8.71 $10.44 $10.00 $9.68 $9.01 $10.86 $10.00

Income From Investment Operations:
- ----------------------------------
Net Investment Loss............................. (0.01)(3) (0.05) (0.05) (0.02) (0.08)(3) (0.05) (0.10) (0.03)
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currencies.... (1.94) 0.77 (1.39) 0.47 (1.98) 0.73 (1.46) 0.89
Total From Investment Operations................ (1.95) 0.72 (1.44) 0.45 (2.06) 0.68 (1.56) 0.86

Less Dividends and Distributions:
- ---------------------------------
Dividends From Net Investment Income............ (0.15) (0.01) none (0.01) (0.15) (0.01) none none
Distributions From Net Realized Gain
on Investments........................... none none (0.29) none none none (0.29) none
Total Dividends and Distributions.............. (0.15) (0.01) (0.29) (0.01) (0.15) (0.01) (0.29) none

Net Asset Value, End of Period.................. $7.32 $9.42 $8.71 $10.44 $7.47 $9.68 $9.01 $10.86
- ---------------------------------
Total Return(4)................................. (21.15%) 8.26% (13.99%) 4.53% (21.72%) 7.54% (14.56%) 8.58%
- ------------
- ---------------------------------

Ratios and Supplemental Data:
- -----------------------------
Net Assets, End of Period (000's omitted)....... $7,144 $11,752 $10,353 $11,333 $2,534 $562 $573 $431
Ratio of Expenses to Average Net Assets......... 1.80% 1.82% 1.85% 1.85% 2.50% 2.50% 2.50% 2.50%
Ratio of Expenses to Average Net Asset
Prior to Expense Limitation.............. 1.86% 2.77% 3.73% 3.66% 2.56% 3.45% 4.38% 4.32%
Ratio of Net Investment Loss to Average Net
Assets................................... (0.08%) (0.41%) (0.60%) (0.21%) (0.77%) (1.09%) (1.20%) (0.88%)
Ratio of Net Investment Loss to Average Net
Assets Prior to Expense Limitation....... (0.14%) (1.36%) (2.48%) (2.02%) (0.83%) (2.04%) (3.08%) (2.70%)
Portfolio Turnover Rate......................... 178% 163% 163% 104% 178% 163% 163% 104%
Average Commission Rate Paid (5)................$0.0079 $0.0118 N/A N/A $0.0079 $0.0118 N/A N/A

</TABLE>

<PAGE>

Class C Shares
New Pacific Fund
Period
7/7/94(1)
Year Ended through
10/31/97 10/31/96(2) 10/31/95 10/31/94

<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $9.49 $8.83 $10.66 $10.00

Income From Investment Operations:
- ----------------------------------
Net Investment Loss............................. (0.08)(3) (0.05) (0.08) (0.02)
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currencies.... (1.94) 0.72 (1.46) 0.68
Total From Investment Operations................ (2.02) 0.67 (1.54) 0.66

Less Dividends and Distributions:
- ---------------------------------
Dividends From Net Investment Income............ (0.15) (0.01) none none
Distributions From Net Realized Gain
on Investments........................... none none (0.29) none
Total Dividends and Distributions.............. (0.15) (0.01) (0.29) none

Net Asset Value, End of Period.................. $7.32 $9.49 $8.83 $10.66
- ---------------------------------
Total Return(4)................................. (21.85%) 7.58% (14.57%) 6.55%
- ------------
- ---------------------------------

Ratios and Supplemental Data:
- -----------------------------
Net Assets, End of Period (000's omitted)....... $129 $44 $17 $12
Ratio of Expenses to Average Net Assets......... 2.50% 2.50% 2.50% 2.50%
Ratio of Expenses to Average Net Asset
Prior to Expense Limitation.............. 2.56% 3.45% 4.38% 4.31%
Ratio of Net Investment Loss to Average Net
Assets................................... (0.77%) (1.09%) (1.02%) (0.83%)
Ratio of Net Investment Loss to Average Net
Assets Prior to Expense Limitation....... (0.83%) (2.04%) (2.90%) (2.64%)
Portfolio Turnover Rate......................... 178% 163% 163% 104%
Average Commission Rate Paid (5)................ $0.0079 $0.0118 N/A N/A

</TABLE>

- --------------------
(1) Date of initial public offering; ratios have been annualized.

-13-

<PAGE>

(DAF-R)

INVESTMENT OBJECTIVES AND STRATEGIES

U.S. Growth Fund. This Fund's fundamental investment objective is to
seek to maximize capital appreciation by investing in companies of all sizes
which have low dividend yields, strong balance sheets and high expected
earnings growth rates relative to their industry.

The Manager or sub-adviser will seek investments in companies of all
sizes that the Manager or sub-adviser believes have earnings that may be
expected to grow faster than the U.S. economy in general. Such companies may
offer the possibility of accelerated earnings growth because of management
changes, new products or structural changes in the economy. In addition, those
companies with relatively high rates of return on invested capital may be able
to finance future growth from internal sources. Income derived from securities
in such companies will be only an incidental consideration of the Fund.

The Fund intends to invest primarily in common stocks believed by the
Manager or sub-adviser to have appreciation potential. However, common stock
is not always the class of security that provides the greatest possibility for
appreciation. The Fund may invest up to 35% of its assets in debt securities,
bonds, convertible bonds, preferred stock and convertible preferred stock. The
Fund may also invest up to 10% of its assets in securities rated lower than
Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's
Ratings Group ("S&P") if, in the opinion of the Manager, doing so would
further the Fund's objective. Lower-rated or unrated securities, commonly
referred to as "junk bonds," are more likely to react to developments
affecting market and credit risk than are more highly rated securities, which
react primarily to movements in the general level of interest rates. See Risk
Factors and Special Considerations for a description of the risks inherent in
such securities .

The Fund may invest up to 20% of its assets in foreign securities.

Overseas Equity Fund. This Fund's fundamental objective is to seek to
maximize total return (capital appreciation and income) by investing primarily
in equity securities of foreign issuers located in countries that the Fund's
Manager or sub-adviser deems to have attractive investment opportunities.
"Total return" refers to income plus realized and unrealized appreciation of
the securities. Under normal circumstances, the Fund will invest at least 65%
of the value of its total assets in securities of issuers located in at least
three countries other than the United States. However, more than 25% of the
Fund's total assets may be invested in the securities of issuers located in
the same country.

The Fund will emphasize established companies, although it may invest
in companies of varying sizes as measured by assets, sales and capitalization.
The Fund may invest in securities of issuers located in a variety of different
foreign regions and countries which includes, but is not limited to, the
following: Australia, Austria, Belgium, Canada, Denmark, Finland, France,
Germany, Greece, Hong Kong, Ireland, Italy, Japan, Luxembourg, Malaysia,
Mexico, The Netherlands, New Zealand, Norway, Portugal, Singapore, Spain,
Sweden, Switzerland, Thailand and The United Kingdom. The relative strength or
weakness of a particular country's currency or economy may dictate whether
securities of issuers located in such country will be purchased or sold.
Criteria for determining the appropriate distribution of investments among
various countries and regions include prospects for relative economic growth
among foreign countries, expected levels of inflation, government policies
influencing business conditions, the outlook for currency relationships, and
the range of investment opportunities available to international investors.

-14-

<PAGE>

(DAF-R)

convertible securities, consisting of debt securities or preferred stock that
may be converted into common stock or that carry the right to purchase common
stock. The Fund may invest in securities listed on foreign or domestic
securities exchanges and securities traded in foreign and domestic
over-the-counter markets and may invest in restricted or unlisted securities.
In addition, the Fund's investments may include American Depositary Receipts
(ADRs), American Depositary Shares (ADSs) and securities of foreign investment
funds or trusts to the extent permitted under the Fund's investment
restrictions. See Risk Factors and Special Considerations -- Foreign
Investments, below. For a complete list of the Fund's investment restrictions,
see Investment Restrictions in Part B.

The Fund may invest up to 40% of its assets in securities of companies
located in, or governments of, developing countries. For temporary defensive
purposes, the Fund may invest a major portion of its assets in securities of
U.S. issuers. In addition, the Fund may be invested in short-term debt
instruments to meet anticipated day-to-day operating expenses and liquidity
requirements.

New Pacific Fund. This Fund's fundamental investment objective is to
seek to maximize long-term capital appreciation by investing primarily in
equity securities of companies domiciled or having their principal business
activities in countries located in the Pacific Basin.

The Fund will invest in companies of varying size, measured by assets,
sales and capitalization. The Fund will invest in companies in one or more of
the following Pacific Basin countries:

Australia Pakistan
China Philippines
Hong Kong Singapore
India South Korea
Indonesia Sri Lanka
Japan Taiwan
Malaysia Thailand
New Zealand

The Fund may invest in companies located in other countries or regions
in the Pacific Basin as those economies and markets become more accessible.
The Fund will invest in other countries or regions only after the decision to
do so is disclosed in an amendment to this Prospectus. Any amendment to this
Prospectus containing such a material change will be delivered to investors.
While the Fund will generally have investments in companies located in at
least three different countries or regions, the Fund may from time to time
have investments only in one or a few countries or regions.

The Fund invests in common stock and may invest in other securities
with equity characteristics, consisting of trust or limited partnership
interests, preferred stock, rights and warrants. The Fund may also invest in
convertible securities, consisting of debt securities or preferred stock that
may be converted into common stock or that carry the right to purchase common
stock. The Fund may invest in securities listed on foreign or domestic
securities exchanges and securities traded in foreign and domestic
over-the-counter markets and may invest in restricted or unlisted securities.

Under normal circumstances, at least 65% of the Fund's assets will be
invested in equity securities of foreign issuers located in the Pacific Basin.
The Fund may invest in securities of companies located in, or governments of,
developing countries within the Pacific Basin. The Fund may invest up to 35%
of its assets in securities of U.S. issuers. In addition, the Fund may be
invested in short-term debt instruments to meet anticipated day-to-day
operating expenses and liquidity requirements.

-15-

<PAGE>

(DAF-R)

* * *

Ownership of shares of each Fund can reduce the bookkeeping and
administrative inconvenience that is typically connected with direct purchases
of the type of securities held in which the Funds invest.

An investor should not consider a purchase of shares of any of the
Funds as equivalent to a complete investment program. Delaware Investments
offers a family of funds, generally available through registered investment
dealers, which may be used together to create a more complete investment
program.

Certain Investment Guidelines
Illiquid Securities. Up to 10% of the assets of each Fund may be
invested in securities that are not readily marketable, including, where
applicable: (1) repurchase agreements with maturities greater than seven
calendar days; (2) time deposits maturing in more than seven calendar days;
(3) certain instruments, futures contracts and options thereon for which there
is no liquid secondary market; (4) certain over-the-counter options, as
described in Part B; (5) certain variable rate demand notes having a demand
period of more than seven days; and (6) certain Rule 144A restricted
securities (Rule 144A securities for which a dealer or institutional market
exists will not be considered illiquid).

Restricted Securities. U.S. Growth Fund, Overseas Equity Fund and New
Pacific Fund may invest in restricted securities. Restricted securities are
securities with legal or contractual restrictions on resale. Restricted
securities eligible for resale pursuant to Rule 144A that have a readily
available market will not be considered illiquid for purposes of the Funds'
investment restriction concerning illiquid securities.

Other Guidelines. In addition, each Fund may invest up to 5% of its
assets in the securities of issuers which have been in continuous operation
for less than three years. Each Fund may also borrow from banks for temporary
or other emergency purposes, but not for investment purposes, in an amount up
to one-third of its total assets, and may pledge its assets to the same extent
in connection with such borrowings. Whenever these borrowings, including
reverse repurchase agreements, exceed 5% of the value of a Fund's total
assets, the Fund will not purchase any securities. Except for the limitations
on borrowing, the investment guidelines set forth in this paragraph may be
changed at any time without shareholder consent by vote of the Board of
Directors. A complete list of investment restrictions that identifies
additional restrictions that cannot be changed without the approval of a
majority of an affected Fund's outstanding shares (as well as other
non-fundamental restrictions) is contained in Part B.

Risk Factors and Special Considerations

Fixed-Income Securities. The market value of fixed-income obligations
held by the Funds and, consequently, the net asset value per share of the
Funds investing in fixed-income securities can be expected to vary inversely
to changes in prevailing interest rates. When interest rates are falling, the
inflow of net new money to a Fixed-Income Fund will likely be invested in
instruments producing lower yields than the balance of assets in the Fund,
thereby reducing current yields. In periods of rising interest rates, the
opposite can be expected to occur. In addition, obligations purchased by U.S.
Growth Fund that are rated in the lowest of the top four ratings (Baa by
Moody's or BBB by S&P) are considered to have speculative characteristics and
changes in economic conditions or other circumstances are more likely to lead
to a weakened capacity to make principal and interest payments than is the
case with higher grade securities. See Lower-Rated Securities, below.

Foreign Investments. Overseas Equity Fund and New Pacific Fund may
invest substantially all of their assets in foreign investments. U.S. Growth
Fund may invest up to 20% of its assets in foreign securities. There are
certain risks involved in investing in foreign securities, including those
resulting from fluctuations in currency exchange rates, devaluation of
currencies, future political or economic developments and the possible
imposition of

-16-

<PAGE>

(DAF-R)

currency exchange blockages or other foreign governmental laws or
restrictions, reduced availability of public information concerning issuers,
and the fact that foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards or to other regulatory
practices and requirements comparable to those applicable to domestic
companies. Although the Funds' Manager or sub-advisers do not intend to expose
the Funds to such risks, with respect to certain foreign countries, there is
the possibility of expropriation, nationalization, confiscatory taxation and
limitations on the use or removal of funds or other assets of the Funds,
including the withholding of dividends. When the Funds' Manager or sub-adviser
believes that currency in which a Fund security or securities is denominated
may suffer a decline against the United States dollar, it may hedge such risk
by entering into a forward contract to sell an amount of foreign currency
approximating the value of some or all of the Funds' portfolio securities
denominated in such foreign currency.

Because foreign securities generally are denominated and pay dividends
or interest in foreign currencies, and the Funds hold various foreign
currencies from time to time, the value of the net assets of the Funds as
measured in United States dollars will be affected favorably or unfavorably by
changes in exchange rates. Generally, currency exchange transactions will be
conducted on a spot (i.e., cash) basis at the spot rate prevailing in the
currency exchange market. The cost of currency exchange transactions will
generally be the difference between the bid and offer spot rate of the
currency being purchased or sold. In order to protect against uncertainty in
the level of future foreign currency exchange rates, the Funds are authorized
to enter into certain foreign transactions. Investors should be aware that
exchange rate movements can be significant and can endure for long periods of
time. The Manager and sub-advisers of the Funds attempt to manage exchange
rate risk through active currency management.

In addition, while the volume of transactions effected on foreign
stock exchanges has increased in recent years, in most cases it remains
appreciably below that of the New York Stock Exchange. Accordingly, the Funds'
foreign investments may be less liquid and their prices may be more volatile
than comparable investments in securities of United States companies.
Moreover, the settlement periods for foreign securities, which are often
longer than those for securities of United States issuers, may affect
portfolio liquidity. In buying and selling securities on foreign exchanges,
the Funds normally pay fixed commissions that are generally higher than the
negotiated commissions charged in the United States. In addition, there is
generally less governmental supervision and regulation of securities
exchanges, brokers and issuers in foreign countries than in the United States.

U.S. Growth Fund, Overseas Equity Fund and New Pacific Fund may purchase
foreign equity and debt securities that are listed on a principal foreign
securities exchange or over-the-counter market, represented by American
Depositary Receipts (ADRs) or American Depositary Shares (ADSs). An ADR or ADS
facility may be either a "sponsored" or "unsponsored" arrangement. In a
sponsored arrangement, the foreign issuer establishes the facility, pays some or
all the depository's fees, and usually agrees to provide shareholder
communications. In an unsponsored arrangement, the foreign issuer is not
involved and the ADR or ADS holders pay the fees of the depository. Depository
banks arrange unsponsored ADR and ADS facilities, either upon their initiative
or at the urging of large shareholders of or dealers in the foreign securities.

Unsponsored ADRs or ADSs may involve more risk to the Fund than
sponsored ADRs or ADSs due to the additional costs involved to the Fund, the
relative illiquidity of the issue in U.S. markets, and the possibility of
higher trading costs in the over the counter market as opposed to
exchange-based trading. The Funds will take these and other risk
considerations into account before making an investment in an unsponsored ADR
or ADS.

Investments in foreign securities offer potential benefits not
available from investments in securities of domestic issuers. Such benefits
include the opportunity to invest in securities that appear to offer greater
potential for long-term capital appreciation than investments in domestic
securities, and to reduce fluctuations in Fund value by taking advantage of
foreign stock markets that do not move in a manner parallel to U.S. markets.

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Lower-Rated Securities. U.S. Growth Fund may invest up to 10% of its
total assets in debt securities rated lower than Baa by Moody's or BBB by S&P.
Prices for securities rated below investment grade may be affected by
legislative and regulatory developments. Securities rated Ba\BB or lower are
commonly referred to as "junk bonds."

Securities rated below investment grade as well as unrated securities
usually entail greater risk (including the possibility of default or
bankruptcy of the issuers), and generally involve greater price volatility and
risk of principal and income, and may be less liquid, than securities in
higher rated categories. Both price volatility and illiquidity may make it
difficult for the Fund to value certain of these securities at certain times
and these securities may be difficult to sell under certain market conditions.
Prices for securities rated below investment grade may be affected by
legislative and regulatory developments.

Borrowing. Each of the Funds may borrow money for temporary or
emergency purposes in amounts not in excess of one-third of each Fund's total
assets. If a Fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is repaid. If a Fund makes additional
investments while borrowings are outstanding, this may be construed as a form
of leverage. U.S. Growth Fund will purchase additional securities when money
borrowed exceeds 5% of the Fund's total assets.

Securities Lending. Each Fund may lend securities with a value of up
to one-third of its total assets to broker/dealers, institutions and other
persons as a means of earning additional income. Any such loan shall be
continuously secured by collateral at least equal to 100% of the value of the
security being loaned. If the collateral is cash, it may be invested in
short-term securities, U.S. government obligations or certificates of deposit.
Each Fund will retain the evidence of ownership of any loaned securities and
will continue to be entitled to the interest or dividends payable on the
loaned securities. In addition, the Fund will receive interest on the loan.
The loan will be terminable by the Fund at any time and will not be made to
affiliates of the Fund, the Manager or the respective sub-adviser. The Fund
may pay reasonable finder's fees to persons unaffiliated with it in connection
with the arrangement of loans.

If the other party to a securities loan becomes bankrupt, a Fund could
experience delays in recovering its securities. To the extent that, in the
meantime, the value of securities loans has increased, the Fund could
experience a loss.

Temporary Defensive Position. For temporary defensive purposes when
the Manager or sub-adviser determines that market conditions warrant, each
Fund may invest up to 100% of its assets in money market instruments. To the
extent a Fund is engaged in a temporary defensive position, the Fund will not
be pursuing its investment objective. Each Fund may also hold a portion of its
assets in cash for liquidity purposes.

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Portfolio Turnover. High turnover in any Fund could result in
additional brokerage commissions to be paid by the Fund. In addition, high
portfolio turnover may also mean that a proportionately greater amount of
distributions to shareholders will be taxed as ordinary income rather than
long-term capital gains compared to investment companies with lower portfolio
turnover. See Dividends and Distributions and Taxes.

* * *

For additional information about each Fund's investment policies and
certain risks associated with investments in certain types of securities
including purchasing put and call options, futures contracts and options
thereon, and options on foreign currencies, see Implementation of Investment
Objectives and Policies in this Prospectus. Part B provides more information
concerning the Funds' investment policies, restrictions and risk factors.

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THE DELAWARE DIFFERENCE

PLANS AND SERVICES

The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware
Investments family of funds.

SHAREHOLDER PHONE DIRECTORY

Investor Information Center
800-523-4640
Fund Information; Literature; Price; Yield and Performance Figures

Shareholder Service Center
800-523-1918
Information on Existing Regular Investment Accounts and Retirement
Plan Accounts; Wire Investments; Wire Liquidations; Telephone
Liquidations and Telephone Exchanges

Delaphone
800-362-FUND
(800-362-3863)

Performance Information
You can call the Investor Information Center at any time for current
performance information. Current yield and total return information may also
be included in advertisements and information given to shareholders. Yields
are computed on an annualized basis over a 30-day period.

Shareholder Services

During business hours, you can call Delaware Investments' Shareholder
Service Center. Our representatives can answer any questions about your
account, the Funds, various service features and other funds available from
Delaware Investments.

Delaphone Service

Delaphone is an account inquiry service for investors with
Touch-Tone(R) phone service. It enables you to get information on your account
faster than the mailed statements and confirmations. Delaphone also provides
current performance information on the Funds, as well as other funds available
from Delaware Investments. Delaphone is available seven days a week, 24 hours
a day.

Statements and Confirmations
You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent
following all transactions other than those involving a reinvestment of
dividends. You should examine statements and confirmations immediately and
promptly report any discrepancy by calling the Shareholder Service Center.

Duplicate Confirmations
If your financial adviser or investment dealer is noted on your
investment application, we will send a duplicate confirmation to him or her.
This makes it easier for your adviser to help you manage your investments.

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Tax Information

Each year, Adviser Funds, Inc. will mail to you information on the
tax status of your dividends and distributions.

Dividend Payments

Dividends, capital gains and other distributions, if any, are
automatically reinvested in your account, unless you elect to receive them in
cash. You may also elect to have the dividends earned in one fund
automatically invested in another Delaware Investments fund with a different
investment objective, subject to certain exceptions and limitations.

For more information, see Additional Methods of Adding to Your
Investment - Dividend Reinvestment Plan under How to Buy Shares or call the
Shareholder Service Center.

MoneyLine(SM) Services

Delaware Investments offers the following services for fast and
convenient transfer of funds between your personal bank account and your Fund
account:

1. MoneyLine(SM) Direct Deposit Service

If you elect to have your dividends and distributions paid
in cash and such dividends and distributions are in an amount of $25
or more, you may choose the MoneyLine(SM) Direct Deposit Service and
have such payments transferred from your Fund account to your
predesignated bank account. See Dividends and Distributions. In
addition, you may elect to have your Systematic Withdrawal Plan
payments transferred from your Fund account to your predesignated
bank account through this service. See Systematic Withdrawal Plans
under Redemption and Exchange. This service is not available for
certain retirement plans.

2. MoneyLine(SM) On Demand

You or your investment dealer may request purchases and
redemptions of Fund shares by using MoneyLine(SM) On Demand. When you
authorize the Fund to accept such requests from you or your
investment dealer, funds will be withdrawn from (for share purchases)
or deposited to (for share redemptions) your predesignated bank
account. Your request will be processed the same day if you call
prior to 4 p.m., Eastern time. There is a $25 minimum and a $50,000
maximum limit for MoneyLine(SM) On Demand transactions. This service
is not available for retirement plans, except for purchases of shares
by IRAs.

For each MoneyLine(SM) Service, it may take up to four business days
for the transactions to be completed. You can initiate either service by
completing an Account Services form. If your name and address are not
identical to the name and address on your Fund account, you must have your
signature guaranteed. The Funds do not charge a fee for any MoneyLine(SM)
Service; however, your bank may change a fee. Please call the Shareholder
Service Center for additional information about these services.

Retirement Planning

An investment in the Funds may be a suitable investment option for
tax-deferred retirement plans. Delaware Investments offers a full spectrum of
qualified and non-qualified retirement plans, including the popular 401(k)
deferred compensation plan, IRA, and the new Roth IRA. Just call Delaware
Investments at 1-800-523-1918 for more information.

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Right of Accumulation

With respect to Class A Shares, the Right of Accumulation feature
allows you to combine the value of your current holdings of Class A Shares,
Class B Shares and Class C Shares of a Fund with the dollar amount of new
purchases of Class A Shares of a Fund to qualify for a reduced front-end sales
charge on such purchases of Class A Shares. Under the Combined Purchases
Privilege, you may also include certain shares that you own in other funds
available from Delaware Investments. See Classes of Shares.

Letter of Intention

The Letter of Intention feature permits you to obtain a reduced
front-end sales charge on purchases of Class A Shares by aggregating certain
of your purchases of fund shares available from Delaware Investments over a
13-month period. See Classes of Shares and Part B.

12-Month Reinvestment Privilege
The 12-Month Reinvestment Privilege permits you to reinvest proceeds
from a redemption of Class A Shares, within one year of the date of the
redemption, without paying a front-end sales charge. See Part B.

Exchange Privilege

The Exchange Privilege permits you to exchange all or part of your
shares into shares of other mutual funds available from Delaware Investments,
subject to certain exceptions and limitations. For additional information on
exchanges, see Investing by Exchange under How to Buy Shares and Redemption
and Exchange.

Wealth Builder Option

You may elect to invest in the Funds through regular liquidations of
shares in your accounts in other funds available from Delaware Investments.
Investments under this feature are exchanges and are therefore subject to the
same conditions and limitations as other exchanges of Fund shares. See
Additional Methods of Adding to Your Investment - Wealth Builder Option and
Investing by Exchange under How to Buy Shares, and Redemption and Exchange.

Financial Information about the Funds
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
each Fund's investments and performance. Adviser Funds, Inc.'s fiscal year
ends on October 31.

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CLASSES OF SHARES

Alternative Purchase Arrangements
Shares may be purchased at a price equal to the next determined net
asset value per share, subject to a sales charge which may be imposed, at the
election of the purchaser, at the time of the purchase for Class A Shares
("front-end sales charge alternative"), or on a contingent deferred basis for
Class B Shares ("deferred sales charge alternative") or Class C Shares ("level
sales charge alternative").

Class A Shares. An investor who elects the front-end sales charge
alternative acquires Class A Shares, which incur a sales charge when they are
purchased, but generally are not subject to any sales charge when they are
redeemed. Class A Shares are subject to annual 12b-1 Plan expenses of up to a
maximum of 0.35% (currently, no more than 0.30%) of average daily net assets
of such shares. Certain purchases of Class A Shares qualify for reduced
front-end sales charges. See Front-End Sales Charge Alternative - Class A
Shares, below. See also Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value under Redemption
and Exchange and Distribution (12b-1) and Service under Management of the
Funds.

Class B Shares. An investor who elects the deferred sales charge
alternative acquires Class B Shares, which do not incur a front-end sales
charge when they are purchased, but are subject to a contingent deferred sales
charge if they are redeemed within six years of purchase. Class B Shares are
subject to annual 12b-1 Plan expenses of up to a maximum of 1% (0.25% of which
are service fees to be paid to the Distributor, dealers or others for
providing personal service and/or maintaining shareholder accounts) of average
daily net assets of such shares for approximately eight years after purchase.
Class B Shares permit all of the investor's dollars to work from the time the
investment is made. The higher 12b-1 Plan expenses paid by Class B Shares will
cause such shares to have a higher expense ratio and to pay lower dividends
than Class A Shares. At the end of approximately eight years after purchase,
Class B Shares automatically will be converted into Class A Shares and,
thereafter, for the remainder of the life of the investment, the annual 12b-1
Plan fee of up to 0.35% (currently, no more than 0.30%) for Class A Shares
will apply. See Automatic Conversion of Class B Shares, below. See
Restructuring of the Funds in Part B for information concerning the CDSC
schedule and conversion feature applicable to Class B Shares purchased on or
before May 3, 1996.

Class C Shares. An investor who elects the level sales charge
alternative acquires Class C Shares, which do not incur a front-end sales
charge when they are purchased, but are subject to a contingent deferred sales
charge if they are redeemed within 12 months of purchase. Class C Shares are
subject to annual 12b-1 Plan expenses of up to a maximum of 1% (0.25% of which
are service fees to be paid to the Distributor, dealers or others for
providing personal service and/or maintaining shareholder accounts) of average
daily net assets of such shares for the life of the investment. The higher
12b-1 Plan expenses paid by Class C Shares will cause such shares to have a
higher expense ratio and to pay lower dividends than Class A Shares. Unlike
Class B Shares, Class C Shares do not convert to another class.

The alternative purchase arrangements described above permit
investors to choose the method of purchasing shares that is most suitable
given the amount of their purchase, the length of time they expect to hold
their shares and other relevant circumstances. Investors should determine
whether, given their particular circumstances, it is more advantageous to
purchase Class A Shares and incur a front-end sales charge, purchase Class B
Shares and have the entire initial purchase amount invested in a Fund with
their investment being subject to a CDSC if they redeem shares within six
years of purchase, or purchase Class C Shares and have the entire initial
purchase amount invested in a Fund with their investment being subject to a
CDSC if they redeem shares within 12 months of purchase. In addition,
investors should consider the level of annual 12b-1 Plan expenses applicable
to each Class. The higher 12b-1 Plan expenses on Class B Shares and Class C
Shares will be offset to the extent a

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return is realized on the additional money initially invested upon the
purchase of such shares. However, there can be no assurance as to the return,
if any, that will be realized on such additional money. In addition, the
effect of any return earned on such additional money will diminish over time.
In comparing Class B Shares to Class C Shares, investors should also consider
the duration of the annual 12b-1 Plan expenses to which each of these classes
is subject and the desirability of an automatic conversion feature, which is
available only for Class B Shares.

For the distribution and related services provided to, and the
expenses borne on behalf of, the Funds, the Distributor and others will be
paid, in the case of Class A Shares, from the proceeds of the front-end sales
charge and 12b-1 Plan fees and, in the case of Class B Shares and Class C
Shares, from the proceeds of the 12b-1 Plan fees and, if applicable, the CDSC
incurred upon redemption. Financial advisers may receive different
compensation for selling Class A Shares, Class B Shares and Class C Shares.
Investors should understand that the purpose and function of the respective
12b-1 Plans and the CDSCs applicable to Class B Shares and Class C Shares are
the same as those of the 12b-1 Plan and the front-end sales charge applicable
to Class A Shares in that such fees and charges are used to finance the
distribution of the respective Classes. See Distribution (12b-1) and Service
under Management of the Funds.

Dividends, if any, paid on Class A Shares, Class B Shares and Class C
Shares will be calculated in the same manner, at the same time and on the same
day and will be in the same amount, except that the additional amount of 12b-1
Plan expenses relating to Class B Shares and Class C Shares will be borne
exclusively by such shares. See Calculation of Offering Price and Net Asset
Value Per Share.

The NASD has adopted certain rules relating to investment company
sales charges. Adviser Funds, Inc. and the Distributor intend to operate in
compliance with these rules.

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Front-End Sales Charge Alternative - Class A Shares
Class A Shares of each Fund may be purchased at the offering price,
which reflects a maximum front-end sales charge of 4.75%. See Calculation of
Offering Price and Net Asset Value Per Share.

Purchases of $100,000 or more carry a reduced front-end sales charge
as shown in the following table.

U.S. Growth Fund A Class
Overseas Equity Fund A Class
New Pacific Fund A Class

- --------------------------------------------------------------------------------------------------------------------------
Dealer's
Commission***
Front-End Sales Charge as % of as % of
Offering Offering
Amount of Purchase Price Amount Invested** Price
- --------------------------------------------------------------------------------------------------------------------------

U.S. Overseas New
Growth Equity Pacific
Fund Fund Fund

<S> <C> <C> <C> <C> <C>
Less than $100,000 4.75% 4.98% 4.95% 5.05% 4.00%
$100,000 but under $250,000 3.75 3.90 3.91 3.96 3.00
$250,000 but under $500,000 2.50 2.56 2.56 2.60 2.00
$500,000 but under $1,000,000* 2.00 2.04 2.08 2.05 1.60

</TABLE>

* There is no front-end sales charge on purchases of Class A Shares of
$1,000,000 or more but, under certain limited circumstances, a 1%
Limited CDSC may apply upon redemption of such shares.

** Based on the net asset value per share of the respective Class A Shares
as of the end of Adviser Funds, Inc.'s most recent fiscal year.

*** Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
- --------------------------------------------------------------------------------

A Fund must be notified when a sale takes place which would qualify for
the reduced front-end sales charge on the basis of previous or current
purchases. The reduced front-end sales charge will be granted upon
confirmation of the shareholder's holdings by such Fund. Such reduced
front-end sales charges are not retroactive.

From time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during
which the Distributor may reallow to dealers up to the full amount of the
front-end sales charge shown above. In addition, certain dealers who
enter into an agreement to provide extra training and information on
Delaware Investments products and services and who increase sales of
Delaware Investments funds may receive an additional commission of up to
0.15% of the offering price. Dealers who receive 90% or more of the sales
charge may be deemed to be underwriters under the Securities Act of 1933
(the "1933 Act").

- --------------------------------------------------------------------------------

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(DAF-R)

For initial purchases of Class A Shares of $1,000,000 or more, a
dealer's commission may be paid by the Distributor to financial advisers
through whom such purchases are made, in accordance with the following
schedule:

Dealer's Commission
(as a percentage of
Amount of Purchase amount purchased)
------------------ -----------------

Up to $2 million 1.00%
Next $1 million up to $3 million 0.75
Next $2 million up to $5 million 0.50
Amount over $5 million 0.25

For accounts with assets over $1 million, the dealer commission
resets annually to the highest incremental commission rate on the anniversary
of the first purchase. In determining a financial adviser's eligibility for
the dealer's commission, purchases of Class A Shares of other Delaware
Investments funds as to which a Limited CDSC applies may be aggregated with
those of Class A Shares of a Fund. Financial advisers also may be eligible for
a dealer's commission in connection with certain purchases made under a Letter
of Intention or pursuant to an investor's Right of Accumulation. Financial
advisers should contact the Distributor concerning the applicability and
calculation of the dealer's commission in the case of combined purchases.

An exchange from other Delaware Investments funds will not qualify
for payment of the dealer's commission, unless a dealer's commission or
similar payment has not been previously paid on the assets being exchanged.
The schedule and program for payment of the dealer's commission are subject to
change or termination at any time by the Distributor at its discretion.

Redemptions of Class A Shares purchased at net asset value may result
in the imposition of a Limited CDSC if the dealer's commission described above
was paid in connection with the purchase of those shares. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares Purchased at
Net Asset Value under Redemption and Exchange.

Combined Purchases Privilege

By combining your holdings of Class A Shares with your holdings of
Class B Shares and/or Class C Shares of a Fund and shares of the other funds
available from Delaware Investments, except as noted below, you can reduce the
front-end sales charges on any additional purchases of Class A Shares. Shares
of Delaware Group Premium Fund, Inc. beneficially owned in connection with
ownership of variable insurance products may be combined with other Delaware
Investments fund holdings. In addition, assets held by investment advisory
clients of the Manager or its affiliates in a stable value account may be
combined with other Delaware Investments fund holdings. Shares of other funds
that do not carry a front-end sales charge or CDSC may not be included unless
they were acquired through an exchange from a Delaware Investments fund that
does carry a front-end sales charge or CDSC.

This privilege permits you to combine your purchases and holdings
with those of your spouse, your children under 21 and any trust, fiduciary or
retirement account for the benefit of such family members.

It also permits you to use these combinations under a Letter of
Intention. A Letter of Intention allows you to make purchases over a 13-month
period and qualify the entire purchase for a reduction in front-end sales
charges on Class A Shares.

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Combined purchases of $1,000,000 or more, including certain purchases
made at net asset value pursuant to a Right of Accumulation or under a Letter
of Intention, may result in the payment of a dealer's commission and the
applicability of a Limited CDSC. Investors should consult their financial
advisers or the Shareholder Service Center about the operation of these
features. See Front-End Sales Charge Alternative -Class A Shares, above.

Allied Plans

Class A Shares are available for purchase by participants in certain
401(k) Defined Contribution Plans ("Allied Plans") which are made available
under a joint venture agreement between the Distributor and another
institution through which mutual funds are marketed and which allow
investments in Class A Shares of designated Delaware Investments funds
("eligible Delaware Investments fund shares"), as well as shares of designated
classes of non-Delaware Investments funds ("eligible non-Delaware Investments
fund shares"). Class B Shares and Class C Shares are not eligible for purchase
by Allied Plans.

With respect to purchases made in connection with an Allied Plan, the
value of eligible Delaware Investments and eligible non-Delaware Investments
fund shares held by the Allied Plan may be combined with the dollar amount of
new purchases by that Allied Plan to obtain a reduced front-end sales charge
on additional purchases of eligible Delaware Investments fund shares.

Participants in Allied Plans may exchange all or part of their
eligible Delaware Investments fund shares for other eligible Delaware
Investments fund shares or for eligible non-Delaware Investments fund shares
at net asset value without payment of a front-end sales charge. However,
exchanges of eligible fund shares, both Delaware Investments and non-Delaware
Investments, which were not subject to a front-end sales charge, will be
subject to the applicable sales charge if exchanged for eligible Delaware
Investments fund shares to which a sales charge applies. No sales charge will
apply if the eligible fund shares were previously acquired through the
exchange of eligible shares on which a sales charge was already paid or
through the reinvestment of dividends. See Investing by Exchange.

A dealer's commission may be payable on purchases of eligible
Delaware Investments fund shares under an Allied Plan. In determining a
financial adviser's eligibility for a dealer's commission on net asset value
purchases of eligible Delaware Investments fund shares in connection with
Allied Plans, all participant holdings in the Allied Plan will be aggregated.

The Limited CDSC is applicable to redemptions of net asset value
purchases from an Allied Plan on which a dealer's commission has been paid.
Waivers of the Limited CDSC, as described under Waiver of Limited Contingent
Deferred Sales Charge - Class A Shares under Redemption and Exchange, apply to
redemptions by participants in Allied Plans except in the case of exchanges
between eligible Delaware Investments and non- Delaware Investments fund
shares. When eligible Delaware Investments fund shares are exchanged into
eligible non-Delaware Investments fund shares, the Limited CDSC will be
imposed at the time of the exchange, unless the joint venture agreement
specifies that the amount of the Limited CDSC will be paid by the financial
adviser or selling dealer. See Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value under Redemption
and Exchange.

Buying Class A Shares at Net Asset Value

Class A Shares of a Fund may be purchased at net asset value under
the Delaware Investments Dividend Reinvestment Plan and, under certain
circumstances, the Exchange Privilege or the 12-Month Reinvestment Privilege.
See The Delaware Difference and Redemption and Exchange for additional
information.

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Purchases of Class A Shares may be made at net asset value by current
and former officers, directors and employees (and members of their families)
of the Manager, any affiliate, any of the funds in Delaware Investments,
certain of their agents and registered representatives and employees of
authorized investment dealers and by employee benefit plans for such entities.
Individual purchases, including those in retirement accounts, must be for
accounts in the name of the individual or a qualifying family member.

Purchases of Class A Shares may also be made by clients of registered
representatives of an authorized investment dealer at net asset value within
12 months after the registered representative changes employment, if the
purchase is funded by proceeds from an investment where a front-end sales
charge, contingent deferred sales charge or other sales charge has been
assessed. Purchases of Class A Shares may also be made at net asset value by
bank employees who provide services in connection with agreements between the
bank and unaffiliated brokers or dealers concerning sales of shares of
Delaware Investments funds. Officers, directors and key employees of
institutional clients of the Manager or any of its affiliates may purchase
Class A Shares at net asset value. Moreover, purchases may be effected at net
asset value for the benefit of the clients of brokers, dealers and registered
investment advisers affiliated with a broker or dealer, if such broker, dealer
or investment adviser has entered into an agreement with the Distributor
providing specifically for the purchase of Class A Shares in connection with
special investment products, such as wrap accounts or similar fee based
programs. Investors may be charged a fee when effecting transactions in Class
A Shares through a broker or agent that offers these special investment
products.

Purchases of Class A Shares at net asset value may also be made by
the following: institutions investing for the account of their trust customers
if they are not eligible to purchase shares of the Institutional Class of a
Fund; and any group retirement plan (excluding defined benefit pension plans),
or such plans of the same employer, for which plan participant records are
maintained on the Delaware Investment & Retirement Services, Inc. ("DIRSI")
proprietary record keeping system that (i) has in excess of $500,000 of plan
assets invested in Class A Shares of Delaware Investments funds and any stable
value account available to investment advisory clients of the Manager or its
affiliates, or (ii) is sponsored by an employer that has at any point after
May 1, 1997 had more than 100 employees while such plan has held Class A
Shares of a Delaware Investments fund and such employer has properly
represented to DIRSI in writing that it has the requisite number of employees
and has received written confirmation back from DIRSI. See Group Investment
Plans for information regarding the applicability of the Limited CDSC.

Investors in Delaware Investments Unit Investment Trusts may reinvest
monthly dividend checks and/or repayment of invested capital into Class A
Shares of any of the funds available from Delaware Investments at net asset
value.

Investments in Class A Shares made by plan level and/or participant
retirement accounts that are for the purpose of repaying a loan taken from
such accounts will be made at net asset value. Loan repayments made to a
Delaware Investments account in connection with loans originated from accounts
previously maintained by another investment firm will also be invested at net
asset value.

A Fund must be notified in advance that an investment qualifies for
purchase at net asset value.

Group Investment Plans

Group Investment Plans (e.g., SEP/IRA, SAR/SEP, SIMPLE IRA, SIMPLE
401(k), Profit Sharing and Money Purchase Pension Plans, 401(k) Defined
Contribution Plans, and 403(b)(7) and 457 Deferred Compensation Plans) may
benefit from the reduced front-end sales charges available on Class A Shares
based on total plan assets. If a company has more than one plan investing in
the Delaware Investments family of funds, then the total amount invested in
all plans will be aggregated to determine the applicable front-end sales
charge reduction on each

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(DAF-R)

purchase, both initial and subsequent, if, at the time of each such purchase,
the company notifies the Fund in which it is investing that it qualifies for
the reduction. Employees participating in such Group Investment Plans may also
combine the investments held in their plan account to determine the front-end
sales charge applicable to purchases in non-retirement investment accounts of
Delaware Investments if, at the time of each such purchase, they notify the
Fund in which they are investing that they are eligible to combine purchase
amounts held in their plan account.

The Limited CDSC is applicable to any redemptions of net asset value
purchases made on behalf of any group retirement plan on which a dealer's
commission has been paid only if such redemption is made pursuant to a
withdrawal of the entire plan from Delaware Investments funds. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares Purchased at
Net Asset Value under Redemption and Exchange.

For additional information on retirement plans, including plan forms,
applications, minimum investments and any applicable account maintenance fees,
contact your investment dealer or the Distributor.

Deferred Sales Charge Alternative - Class B Shares
Class B Shares may be purchased at net asset value without a
front-end sales charge and, as a result, the full amount of the investor's
purchase payment will be invested in Fund shares. The Distributor currently
anticipates compensating dealers or brokers for selling Class B Shares at the
time of purchase from its own assets in an amount equal to no more than 4% of
the dollar amount purchased. In addition, from time to time, upon written
notice to all of its dealers, the Distributor may hold special promotions for
specified periods during which the Distributor may pay additional compensation
to dealers or brokers for selling Class B Shares at the time of purchase. As
discussed below, however, Class B Shares are subject to annual 12b-1 Plan
expenses and, if redeemed within six years of purchase, a CDSC.

Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services, and
bearing related expenses, in connection with the sale of Class B Shares. These
payments support the compensation paid to dealers or brokers for selling Class
B Shares. Payments to the Distributor and others under the Class B 12b-1 Plan
may be in an amount equal to no more than 1% annually. The combination of the
CDSC and the proceeds of the 12b-1 Plan fees makes it possible for a Fund to
sell Class B Shares without deducting a front-end sales charge at the time of
purchase.

Holders of Class B Shares who exercise the exchange privilege
described below will continue to be subject to the CDSC schedule for Class B
Shares described in this Prospectus, even after the exchange. Such CDSC
schedule may be higher than the CDSC schedule for Class B Shares acquired as a
result of the exchange. See Redemption and Exchange.

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Automatic Conversion of Class B Shares

Class B Shares, other than shares acquired through reinvestment of
dividends, held for eight years after purchase are eligible for automatic
conversion into Class A Shares. Conversions of Class B Shares into Class A
Shares will occur only four times in any calendar year, on the last business
day of the second full week of March, June, September and December (each, a
"Conversion Date"). If the eighth anniversary after a purchase of Class B
Shares falls on a Conversion Date, an investor's Class B Shares will be
converted on that date. If the eighth anniversary occurs between Conversion
Dates, an investor's Class B Shares will be converted on the next Conversion
Date after such anniversary. Consequently, if a shareholder's eighth
anniversary falls on the day after a Conversion Date, that shareholder will
have to hold Class B Shares for as long as three additional months after the
eighth anniversary of purchase before the shares will automatically convert
into Class A Shares. See Restructuring of the Fund in Part B concerning the
conversion feature applicable to Class B Shares purchased on or before May 3,
1996.

Class B Shares of a fund acquired through a reinvestment of dividends
will convert to the corresponding Class A Shares of that fund (or, in the case
of Delaware Group Cash Reserve, Inc., the Delaware Cash Reserve Consultant
Class) pro-rata with Class B Shares of that fund not acquired through dividend
reinvestment.

All such automatic conversions of Class B Shares will constitute
tax-free exchanges for federal income tax purposes. See Taxes.

Level Sales Charge Alternative - Class C Shares

Class C Shares may be purchased at net asset value without a front-end
sales charge and, as a result, the full amount of the investor's purchase
payment will be invested in Fund shares. The Distributor currently anticipates
compensating dealers or brokers for selling Class C Shares at the time of
purchase from its own assets in an amount equal to no more than 1% of the dollar
amount purchased. As discussed below, Class C Shares are subject to annual 12b-1
Plan expenses and, if redeemed within 12 months of purchase, a CDSC.

Holders of Class C Shares who exercise the exchange privilege
described below will continue to be subject to the CDSC schedule for Class C
Shares as described in this Prospectus. See Redemption and Exchange.

Contingent Deferred Sales Charge - Class B Shares and Class C Shares

Class B Shares redeemed within six years of purchase may be subject
to a CDSC at the rates set forth below and Class C Shares redeemed within 12
months of purchase may be subject to a CDSC of 1%. CDSCs are charged as a
percentage of the dollar amount subject to the CDSC. The charge will be
assessed on an amount equal to the lesser of the net asset value at the time
of purchase of the shares being redeemed or the net asset value of those
shares at the time of redemption. No CDSC will be imposed on increases in net
asset value above the initial purchase price, nor will a CDSC be assessed on
redemptions of shares acquired through reinvestments of dividends or capital
gains distributions. For purposes of this formula, the "net asset value at the
time of purchase" will be the net asset value at purchase of Class B Shares or
Class C Shares of a Fund, even if those shares are later exchanged for shares
of another Delaware Investments fund. In the event of an exchange of the
shares, the "net asset value of such shares at the time of redemption" will be
the net asset value of the shares that were acquired in the exchange.

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The following table sets forth the rates of the CDSC for Class B
Shares of the Funds:

Contingent Deferred
Sales Charge (as a
Percentage of
Dollar Amount
Year After Purchase Made Subject to Charge)
------------------------ ------------------

0-2 4%
3-4 3%
5 2%
6 1%
7 and thereafter None

During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares, Class B Shares will still be subject to the
annual 12b-1 Plan expenses of up to 1% of average daily net assets of those
shares. See Automatic Conversion of Class B Shares, above. See also
Restructuring of the Funds in Part B for information concerning the CDSC
schedule applicable to Class B Shares purchased on or before May 3, 1996.
Investors are reminded that the Class A Shares into which Class B Shares will
convert are subject to ongoing annual 12b-1 Plan expenses of up to a maximum
of 0.35% (currently, no more than 0.30%) of average daily net assets of such
shares.

In determining whether a CDSC applies to a redemption of Class B
Shares, it will be assumed that shares held for more than six years are
redeemed first, followed by shares acquired through the reinvestment of
dividends or distributions, and finally by shares held longest during the
six-year period. With respect to Class C Shares, it will be assumed that
shares held for more than 12 months are redeemed first followed by shares
acquired through the reinvestment of dividends or distributions, and finally
by shares held for 12 months or less.

All investments made during a calendar month, regardless of what day
of the month the investment occurred, will age one month on the last day of
that month and each subsequent month.

The CDSC is waived on certain redemptions of Class B Shares and Class
C Shares. See Waiver of Contingent Deferred Sales Charge - Class B Shares and
Class C Shares under Redemption and Exchange.

Other Payments to Dealers -- Class A Shares, Class B Shares and Class C Shares
From time to time at the discretion of the Distributor, all
registered broker/dealers whose aggregate sales of the Classes exceed certain
limits, as set by the Distributor, may receive from the Distributor an
additional payment of up to 0.25% of the dollar amount of such sales. The
Distributor may also provide additional promotional incentives or payments to
dealers that sell shares of the Delaware Investments family of funds. In some
instances, these incentives or payments may be offered only to certain dealers
who maintain, have sold or may sell certain amounts of shares.

Subject to pending amendments to the NASD's Conduct Rules, in
connection with the promotion of Delaware Investments fund shares, the
Distributor may, from time to time, pay to participate in dealer-sponsored
seminars and conferences, reimburse dealers for expenses incurred in
connection with preapproved seminars, conferences and advertising and may,
from time to time, pay or allow additional promotional incentives to dealers,
which shall include non-cash concessions, such as certain luxury merchandise
or a trip to or attendance at a business or investment seminar at a luxury
resort, as part of preapproved sales contests. Payment of non-cash
compensation

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to dealers is currently under review by the NASD and the Securities and
Exchange Commission. It is likely that the NASD's Conduct Rules will be
amended such that the ability of the Distributor to pay non-cash compensation
as described above will be restricted in some fashion. The Distributor intends
to comply with the NASD's Conduct Rules as they may be amended.

U.S. Growth Fund Institutional Class, Overseas Equity Fund Institutional Class
and New Pacific Fund Institutional Class
In addition to offering Class A Shares, Class B Shares and Class C
Shares of each Fund, Adviser Funds, Inc. also offers an Institutional Class
for each Fund, which is described in a separate prospectus and is available
for purchase only by certain investors. Institutional Class shares generally
are distributed directly by the Distributor and do not have a front-end sales
charge, a CDSC or a Limited CDSC, and are not subject to 12b-1 plan
distribution expenses. To obtain the prospectus that describes the
Institutional Classes, contact the Distributor by writing to the address or by
calling the telephone number listed on the back cover of this Prospectus.

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HOW TO BUY SHARES

Purchase Amounts
Generally, the minimum initial purchase is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent purchases of shares of any Class
generally must be $100 or more. For purchases under a Uniform Gifts to Minors
Act or Uniform Transfers to Minors Act or through an Automatic Investing Plan,
there is a minimum initial purchase of $250 and a minimum subsequent purchase
of $25. Minimum purchase requirements do not apply to retirement plans other
than IRAs, for which there is a minimum initial purchase of $250, and a
minimum subsequent purchase of $25, regardless of which Class is selected.

There is a maximum purchase limitation of $250,000 on each purchase
of Class B Shares. For Class C Shares, each purchase must be in an amount that
is less than $1,000,000. An investor may exceed these maximum purchase
limitations by making cumulative purchases over a period of time. In doing so,
an investor should keep in mind that reduced front-end sales charges are
available on investments of $100,000 or more in Class A Shares, and that Class
A Shares (i) are subject to lower annual 12b-1 Plan expenses than Class B
Shares and Class C Shares and (ii) generally are not subject to a CDSC. For
retirement plans, the maximum purchase limitations apply only to the initial
purchase of Class B Shares or Class C Shares by the plan.

Investing through Your Investment Dealer

You can make a purchase of shares of the Funds through most
investment dealers who, as part of the service they provide, must transmit
orders promptly. They may charge for this service. If you want a dealer but do
not have one, Delaware Investments can refer you to one.

Investing by Mail

1. Initial Purchases--An Investment Application or, in the case of a
retirement plan account, an appropriate retirement plan application, must be
completed, signed and sent with a check, payable to the specific Fund and
Class selected, to Delaware Investments at 1818 Market Street, Philadelphia,
PA 19103.

2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to the specific Fund and Class selected. Your check
should be identified with your name(s) and account number. An investment slip
(similar to a deposit slip) is provided at the bottom of transaction
confirmations and dividend statements that you will receive from Adviser
Funds, Inc. Use of this investment slip can help expedite processing of your
check when making additional purchases. Your investment may be delayed if you
send additional purchases by certified mail.

Investing by Wire

You may purchase shares by requesting your bank to transmit funds by
wire to CoreStates Bank, N.A., ABA #031000011, account number 1412893401
(include your name(s) and your account number for the Fund and Class in which
you are investing).

1. Initial Purchases--Before you invest, telephone the Shareholder Service
Center to get an account number. If you do not call first, processing of your
investment may be delayed. In addition, you must promptly send your Investment
Application or, in the case of a retirement plan account, an appropriate
retirement plan application, to the specific Fund and Class selected, to
Delaware Investments at 1818 Market Street, Philadelphia, PA 19103.

2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You should advise the
Shareholder Service Center by telephone of each wire you send.

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If you want to wire investments to a retirement plan account, call
the Shareholder Service Center for special wiring instructions.

Investing by Exchange

If you have an investment in another mutual fund in Delaware
Investments, you may write and authorize an exchange of part or all of your
investment into shares of a Fund. If you wish to open an account by exchange,
call the Shareholder Service Center for more information. All exchanges are
subject to the eligibility and minimum purchase requirements set forth in each
fund's prospectus. See Redemption and Exchange for more complete information
concerning your exchange privilege.

Holders of Class A Shares of a Fund may exchange all or part of their
shares for certain of the shares of other funds available from Delaware
Investments, including other Class A Shares, but may not exchange their Class
A Shares for Class B Shares or Class C Shares of the Fund or of any other fund
available from Delaware Investments. Holders of Class B Shares of a Fund are
permitted to exchange all or part of their Class B Shares only into Class B
Shares of other Delaware Investments funds. Similarly, holders of Class C
Shares of a Fund are permitted to exchange all or part of their Class C Shares
only into Class C Shares of other Delaware Investments funds. Class B Shares
of a Fund and Class C Shares of a Fund acquired by exchange will continue to
carry the CDSC and, in the case of Class B Shares, the automatic conversion
schedule of the fund from which the exchange is made. The holding period of
Class B Shares of a Fund acquired by exchange will be added to that of the
shares that were exchanged for purposes of determining the time of the
automatic conversion into Class A Shares of that Fund.

Permissible exchanges into Class A Shares of a Fund will be made
without a front-end sales charge, except for exchanges of shares that were not
previously subject to a front-end sales charge (unless such shares were
acquired through the reinvestment of dividends). Permissible exchanges into
Class B Shares or Class C Shares of a Fund will be made without the imposition
of a CDSC by the fund from which the exchange is being made at the time of the
exchange.

See Allied Plans under Classes of Shares for information on exchanges
by participants in an Allied Plan.

Additional Methods of Adding to Your Investment
Call the Shareholder Service Center for more information if you wish
to use the following services:

1. Automatic Investing Plan
The Automatic Investing Plan enables you to make regular monthly
investments without writing or mailing checks. You may authorize Adviser
Funds, Inc. to transfer a designated amount monthly from your checking account
to your Fund account. Many shareholders use this as an automatic savings plan.
Shareholders should allow a reasonable amount of time for initial purchases
and changes to these plans to become effective.

This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, or 403(b)(7) or 457 Deferred
Compensation Plans.

2. Direct Deposit
You may have your employer or bank make regular investments directly
to your account for you (for example: payroll deduction, pay by phone, annuity
payments). Each Fund also accepts preauthorized recurring government and
private payments by Electronic Fund Transfer, which avoids mail time and check
clearing holds on payments such as social security, federal salaries, Railroad
Retirement benefits, etc.

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* * *

Should investments through an automatic investing plan or by direct
deposit be reclaimed or returned for some reason, Adviser Funds, Inc. has the
right to liquidate your shares to reimburse the government or transmitting
bank. If there are insufficient funds in your account, you are obligated to
reimburse the Fund.

3. MoneyLine(SM) On Demand
Through the MoneyLine(SM) On Demand service, you or your investment
dealer may call the Fund to request a transfer of funds from your
predesignated bank account to your Fund account. See MoneyLine(SM) Services
under The Delaware Difference for additional information about this service.

4. Wealth Builder Option

You can use our Wealth Builder Option to invest in a Fund through
regular liquidations of shares in your accounts in other funds in Delaware
Investments. You may also elect to invest in other mutual funds available from
Delaware Investments through the Wealth Builder Option through regular
liquidations of shares in your Fund account.

Under this automatic exchange program, you can authorize regular
monthly amounts (minimum of $100 per fund) to be liquidated from your account
in one or more funds available from Delaware Investments and invested
automatically into any other account in a Delaware Investments mutual fund
that you may specify. If in connection with the election of the Wealth Builder
Option, you wish to open a new account to receive the automatic investment,
such new account must meet the minimum initial purchase requirements described
in the prospectus of the fund that you select. All investments under this
option are exchanges and are therefore subject to the same conditions and
limitations as other exchanges noted above. You can terminate your
participation in Wealth Builder at any time by giving written notice to the
fund from which the exchanges are made. See Redemption and Exchange.

5. Dividend Reinvestment Plan

You can elect to have your distributions (capital gains and/or
dividend income) paid to you by check or reinvested in your account. Or, you
may invest your distributions in certain other funds available from Delaware
Investments, subject to the exceptions noted below as well as the eligibility
and minimum purchase requirements set forth in each fund's prospectus.

Reinvestments of distributions into Class A Shares of a Fund or of
other Delaware Investments funds are made without a front-end sales charge.
Reinvestments of distributions into Class B Shares of a Fund or of other
Delaware Investments funds or into Class C Shares of a Fund or of other
Delaware Investments funds are also made without any sales charge and will not
be subject to a CDSC if later redeemed. See Automatic Conversion of Class B
Shares under Classes of Shares for information concerning the automatic
conversion of Class B Shares acquired by reinvesting dividends.

Holders of Class A Shares of a Fund may not reinvest their
distributions into Class B Shares or Class C Shares of any fund available from
Delaware Investments, including the Funds. Holders of Class B Shares of a Fund
may reinvest their distributions only into Class B Shares of the funds
available from Delaware Investments which offer that class of shares.
Similarly, holders of Class C Shares of a Fund may reinvest their

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distributions only into Class C Shares of the funds available from Delaware
Investments which offer that class of shares. For more information about
reinvestments, call the Shareholder Service Center.

Capital gains and/or dividend distributions for participants in the
following retirement plans are automatically reinvested into the same Delaware
Investments fund in which their investments are held: SAR/SEP, SEP/IRA, SIMPLE
IRA, SIMPLE 401(k), Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, or 403(b)(7) or 457 Deferred Compensation Plans.

Purchase Price and Effective Date

The offering price and net asset value of Class A Shares, Class B
Shares and Class C Shares are determined as of the close of regular trading on
the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when
the Exchange is open.

The effective date of a purchase is the date the order is received by
a Fund in which the shares are being purchased, its agent or designee. The
effective date of a direct purchase is the day your wire, electronic transfer
or check is received, unless it is received after the time the offering price
or net asset value of shares is determined, as noted above. Purchase orders
received after such time will be effective the next business day.

The Conditions of Your Purchase

Each Fund reserves the right to reject any purchase order. If a
purchase is canceled because your check is returned unpaid, you are
responsible for any loss incurred. A Fund can redeem shares from your
account(s) to reimburse itself for any loss, and you may be restricted from
making future purchases in any of the funds in Delaware Investments. Each Fund
reserves the right to reject purchase orders paid by third-party checks or
checks that are not drawn on a domestic branch of a United States financial
institution. If a check drawn on a foreign financial institution is accepted,
you may be subject to additional bank charges for clearance and currency
conversion.

Each Fund also reserves the right, following shareholder
notification, to charge a service fee on non- retirement accounts that, as a
result of redemption, have remained below the minimum stated account balance
for a period of three or more consecutive months. Holders of such accounts may
be notified of their insufficient account balance and advised that they have
until the end of the current calendar quarter to raise their balance to the
stated minimum. If the account has not reached the minimum balance requirement
by that time, the Fund will charge a $9 fee for that quarter and each
subsequent calendar quarter until the account is brought up to the minimum
balance. The service fee will be deducted from the account during the first
week of each calendar quarter for the previous quarter, and will be used to
help defray the cost of maintaining low-balance accounts. No fees will be
charged without proper notice, and no CDSC will apply to such assessments.

Each Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under the minimum initial purchase
amount as a result of redemptions. An investor making the minimum initial
investment may be subject to involuntary redemption without the imposition of
a CDSC or Limited CDSC if he or she redeems any portion of his or her account.

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REDEMPTION AND EXCHANGE

You can redeem or exchange your shares in a number of different ways.
The exchange service is useful if your investment requirements change and you
want an easy way to invest in other equity funds, tax- advantaged funds, bond
funds or money market funds. This service is also useful if you are
anticipating a major expenditure and want to move a portion of your investment
into a fund that has the checkwriting feature. Exchanges are subject to the
requirements of each fund and all exchanges of shares constitute taxable
events. See Taxes. Further, in order for an exchange to be processed, shares
of the fund being acquired must be registered in the state where the acquiring
shareholder resides. You may want to consult your financial adviser or
investment dealer to discuss which funds in Delaware Investments will best
meet your changing objectives, and the consequences of any exchange
transaction. You may also call Delaware Investments directly for fund
information.

Your shares will be redeemed or exchanged at a price based on the net
asset value next determined after a Fund receives your request in good order,
subject, in the case of a redemption, to any applicable CDSC or Limited CDSC.
For example, redemption or exchange requests received in good order after the
time the offering price and net asset value of shares are determined will be
processed on the next business day. See Purchase Price and Effective Date
under How to Buy Shares. A shareholder submitting a redemption request may
indicate that he or she wishes to receive redemption proceeds of a specific
dollar amount. In the case of such a request, and in the case of certain
redemptions from retirement plan accounts, a Fund will redeem the number of
shares necessary to deduct the applicable CDSC in the case of Class B Shares
and Class C Shares, and, if applicable, the Limited CDSC in the case of Class
A Shares and tender to the shareholder the requested amount, assuming the
shareholder holds enough shares in his or her account for the redemption to be
processed in this manner. Otherwise, the amount tendered to the shareholder
upon redemption will be reduced by the amount of the applicable CDSC or
Limited CDSC. Redemption proceeds will be distributed promptly, as described
below, but not later than seven days after receipt of a redemption request.

Except as noted below, for a redemption request to be in "good
order," you must provide your account number, account registration, and the
total number of shares or dollar amount of the transaction. For exchange
requests, you must also provide the name of the fund in which you want to
invest the proceeds. Exchange instructions and redemption requests must be
signed by the record owner(s) exactly as the shares are registered. You may
request a redemption or an exchange by calling the Shareholder Service Center
at 800-523-1918. Each Fund may suspend, terminate, or amend the terms of the
exchange privilege upon 60 days' written notice to shareholders.

Each Fund will process written and telephone redemption requests to
the extent that the purchase orders for the shares being redeemed have already
settled. Each Fund will honor redemption requests as to shares for which a
check was tendered as payment, but a Fund will not mail or wire the proceeds
until it is reasonably satisfied that the purchase check has cleared, which
may take up to 15 days from the purchase date. You can avoid this potential
delay if you purchase shares by wiring Federal Funds. Each Fund reserves the
right to reject a written or telephone redemption request or delay payment of
redemption proceeds if there has been a recent change to the shareholder's
address of record.

There is no front-end sales charge or fee for exchanges made between
shares of funds which both carry a front-end sales charge. Any applicable
front-end sales charge will apply to exchanges from shares of funds not

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subject to a front-end sales charge, except for exchanges involving assets
that were previously invested in a fund with a front-end sales charge and/or
exchanges involving the reinvestment of dividends.

Holders of Class B Shares or Class C Shares that exchange their
shares ("Original Shares") for shares of other funds available from Delaware
Investments (in each case, "New Shares") in a permitted exchange, will not be
subject to a CDSC that might otherwise be due upon redemption of the Original
Shares. However, such shareholders will continue to be subject to the CDSC
and, in the case of Class B Shares, the automatic conversion schedule of the
Original Shares as described in this Prospectus and any CDSC assessed upon
redemption will be charged by the fund from which the Original Shares were
exchanged. In an exchange of Class B Shares from a Fund, the Fund's CDSC
schedule may be higher than the CDSC schedule relating to the New Shares
acquired as a result of the exchange. For purposes of computing the CDSC that
may be payable upon a disposition of the New Shares, the period of time that
an investor held the Original Shares is added to the period of time that an
investor held the New Shares. With respect to Class B Shares, the automatic
conversion schedule of the Original Shares may be longer than that of the New
Shares. Consequently, an investment in New Shares by exchange may subject an
investor to the higher 12b-1 fees applicable to Class B Shares of a Fund for a
longer period of time than if the investment in New Shares were made directly.
See Restructuring of the Funds in Part B for the CDSC schedule and the
conversion feature applicable to Class B Shares purchased on or before May 3,
1996.

Various redemption and exchange methods are outlined below. Except
for the CDSC applicable to certain redemptions of Class B Shares and Class C
Shares and the Limited CDSC applicable to certain redemptions of Class A
Shares purchased at net asset value, there is no fee charged by the Fund or
the Distributor for redeeming or exchanging your shares, but such fees could
be charged in the future. You may have your investment dealer arrange to have
your shares redeemed or exchanged. Your investment dealer may charge for this
service.

All authorizations given by shareholders, including selection of any
of the features described below, shall continue in effect until such time as a
written revocation or modification has been received by a Fund or its agent.

Written Redemption
You can write to each Fund at 1818 Market Street, Philadelphia, PA
19103 to redeem some or all of your shares. The request must be signed by all
owners of the account or your investment dealer of record. For redemptions of
more than $50,000, or when the proceeds are not sent to the shareholder(s) at
the address of record, the Funds require a signature by all owners of the
account and a signature guarantee for each owner. Each signature guarantee
must be supplied by an eligible guarantor institution. Each Fund reserves the
right to reject a signature guarantee supplied by an eligible institution
based on its creditworthiness. The Funds may require further documentation
from corporations, executors, retirement plans, administrators, trustees or
guardians.

Payment is normally mailed the next business day after receipt of
your redemption request. If your Class A Shares are in certificate form, the
certificate(s) must accompany your request and also be in good order.
Certificates are issued for Class A Shares only if a shareholder submits a
specific request. Certificates are not issued for Class B Shares or Class C
Shares.

Written Exchange

You may also write to each Fund (at 1818 Market Street, Philadelphia,
PA 19103) to request an exchange of any or all of your shares into another
mutual fund available from Delaware Investments, subject to the same
conditions and limitations as other exchanges noted above.

Telephone Redemption and Exchange

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To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge)
for you. If you choose to have your Class A Shares in certificate form, you
may redeem or exchange only by written request and you must return your
certificates.

The Telephone Redemption - Check to Your Address of Record service
and the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in which you have your
account in writing that you do not wish to have such services available with
respect to your account. Each Fund reserves the right to modify, terminate or
suspend these procedures upon 60 days' written notice to shareholders. It may
be difficult to reach the Funds by telephone during periods when market or
economic conditions lead to an unusually large volume of telephone requests.

Neither the Funds nor their Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, each Fund will follow
reasonable procedures to confirm that instructions communicated by telephone
are genuine (including verification of a form of personal identification) as,
if it does not, such Fund or the Transfer Agent may be liable for any losses
due to unauthorized or fraudulent transactions. Instructions received by
telephone are generally tape recorded, and a written confirmation will be
provided for all purchase, exchange and redemption transactions initiated by
telephone. By exchanging shares by telephone, you are acknowledging prior
receipt of a prospectus for the fund into which your shares are being
exchanged.

Telephone Redemption--Check to Your Address of Record
The Telephone Redemption feature is a quick and easy method to redeem
shares. You or your investment dealer of record can have redemption proceeds
of $50,000 or less mailed to you at your address of record. Checks will be
payable to the shareholder(s) of record. Payment is normally mailed the next
business day after receipt of the redemption request. This service is only
available to individual, joint and individual fiduciary- type accounts.

Telephone Redemption--Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must complete an Authorization Form and have your signature
guaranteed. For your protection, your authorization must be on file. If you
request a wire, your funds will normally be sent the next business day.
CoreStates Bank, N.A.'s fee (currently $7.50) will be deducted from your
redemption proceeds. If you ask for a check, it will normally be mailed the
next business day after receipt of your redemption request to your
predesignated bank account. There are no separate fees for this redemption
method, but the mail time may delay getting funds into your bank account.
Simply call the Shareholder Service Center prior to the time the offering
price and net asset value are determined, as noted above.

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MoneyLine(SM) On Demand
Through the MoneyLine(SM) On Demand service, you or your investment
dealer may call the Fund to request a transfer of funds from your Fund account
to your predesignated bank account. See MoneyLine(SM) Services under The
Delaware Difference for additional information about this service.

Telephone Exchange

The Telephone Exchange feature is a convenient and efficient way to
adjust your investment holdings as your liquidity requirements and investment
objectives change. You or your investment dealer of record can exchange your
shares into other funds available from Delaware Investments under the same
registration, subject to the same conditions and limitations as other
exchanges noted above. As with the written exchange service, telephone
exchanges are subject to the requirements of each fund, as described above.
Telephone exchanges may be subject to limitations as to amounts or frequency.

Systematic Withdrawal Plans
1. Regular Plans
This plan provides shareholders with a consistent monthly (or
quarterly) payment. This is particularly useful to shareholders living on
fixed incomes, since it can provide them with a stable supplemental amount.
With accounts of at least $5,000, you may elect monthly withdrawals of $25
(quarterly $75) or more. The Funds do not recommend any particular monthly
amount, as each shareholder's situation and needs vary. Payments are normally
made by check. In the alternative, you may elect to have your payments
transferred from your Fund account to your predesignated bank account through
the MoneyLine(SM) Direct Deposit Service. Your funds will normally be credited
to your bank account up to four business days after the payment date. There
are no separate fees for this redemption method. See MoneyLine(SM) Services
under The Delaware Difference for more information about this service.

2. Retirement Plans
For shareholders eligible under the applicable retirement plan to
receive benefits in periodic payments, the Systematic Withdrawal Plan provides
you with maximum flexibility. A number of formulas are available for
calculating your withdrawals depending upon whether the distributions are
required or optional. Withdrawals must be for $25 or more; however, no minimum
account balance is required. The MoneyLine(SM) Direct Deposit Service
described above is not available for certain retirement plans.

* * *

Shareholders should not purchase additional shares while
participating in a Systematic Withdrawal Plan.

Redemptions of Class A Shares via a Systematic Withdrawal Plan may be
subject to a Limited CDSC if the original purchase was made at net asset value
within the 12 months prior to the withdrawal and a dealer's commission was
paid on that purchase. See Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value, below.

The applicable CDSC for Class B Shares and Class C Shares redeemed
via a Systematic Withdrawal Plan will be waived if, on the date that the Plan
is established, the annual amount selected to be withdrawn is less than 12% of
the account balance. If the annual amount selected to be withdrawn exceeds 12%
of the account balance on the date that the Systematic Withdrawal Plan is
established, all redemptions under the Plan will be subject to the applicable
CDSC. Whether a waiver of the CDSC is available or not, the first shares to be
redeemed for each Systematic Withdrawal Plan payment will be those not subject
to a CDSC because they have either satisfied the required holding period or
were acquired through the reinvestment of distributions. The 12% annual limit
will be

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reset on the date that any Systematic Withdrawal Plan is modified (for
example, a change in the amount selected to be withdrawn or the frequency or
date of withdrawals), based on the balance in the account on that date. See
Waiver of Contingent Deferred Sales Charge - Class B Shares and Class C
Shares, below.

For more information on Systematic Withdrawal Plans, call the
Shareholder Service Center.

Contingent Deferred Sales Charge for Certain Redemptions of Class A Shares

Purchased at Net Asset Value A Limited CDSC will be imposed on certain
redemptions of Class A Shares (or shares into which such Class A Shares are
exchanged) made within 12 months of purchase, if such purchases were made at
net asset value and triggered the payment by the Distributor of the dealer's
commission previously described. See Classes of Shares.

The Limited CDSC will be paid to the Distributor and will be equal to
the lesser of 1% of: (1) the net asset value at the time of purchase of the
Class A Shares being redeemed; or (2) the net asset value of such Class A
Shares at the time of redemption. For purposes of this formula, the "net asset
value at the time of purchase" will be the net asset value at purchase of the
Class A Shares even if those shares are later exchanged for shares of another
Delaware Investments fund and, in the event of an exchange of Class A Shares,
the "net asset value of such shares at the time of redemption" will be the net
asset value of the shares acquired in the exchange.

Redemptions of such Class A Shares held for more than 12 months will
not be subjected to the Limited CDSC and an exchange of such Class A Shares
into another Delaware Investments fund will not trigger the imposition of the
Limited CDSC at the time of such exchange. The period a shareholder owns
shares into which Class A Shares are exchanged will count towards satisfying
the 12-month holding period. The Limited CDSC is assessed if such 12-month
period is not satisfied irrespective of whether the redemption triggering its
payment is of Class A Shares of a Fund or Class A Shares acquired in the
exchange.

In determining whether a Limited CDSC is payable, it will be assumed
that shares not subject to the Limited CDSC are the first redeemed followed by
other shares held for the longest period of time. The Limited CDSC will not be
imposed upon shares representing reinvested dividends or capital gains
distributions, or upon amounts representing share appreciation. All
investments made during a calendar month, regardless of what day of the month
the investment occurred, will age one month on the last day of that month and
each subsequent month.

Waiver of Limited Contingent Deferred Sales Charge - Class A Shares

The Limited CDSC for Class A Shares on which a dealer's commission
has been paid will be waived in the following instances: (i) redemptions that
result from the Fund's right to liquidate a shareholder's account if the
aggregate net asset value of the shares held in the account is less than the
then-effective minimum account size; (ii) distributions to participants from a
retirement plan qualified under section 401(a) or 401(k) of the Internal
Revenue Code of 1986, as amended (the "Code"), or due to death of a
participant in such a plan; (iii) redemptions pursuant to the direction of a
participant or beneficiary of a retirement plan qualified under section 401(a)
or 401(k) of the Code with respect to that retirement plan; (iv) periodic
distributions from an IRA, SIMPLE IRA or 403(b)(7) or 457 Deferred
Compensation Plan due to death, disability, or attainment of age 59 1/2, and
IRA distributions qualifying under Section 72(t) of the Code; (v) returns of
excess contributions to an IRA; (vi) distributions by other employee benefit
plans to pay benefits; (vii) distributions described in (ii), (iv), and (vi)
above pursuant to a systematic withdrawal plan; and (viii) redemptions by the
classes of shareholders who are permitted to purchase shares at net asset
value, regardless of the size of the purchase (see Buying Class A Shares at
Net Asset Value under Classes of Shares).

Waiver of Contingent Deferred Sales Charge - Class B Shares and Class C Shares

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The CDSC is waived on certain redemptions of Class B Shares in
connection with the following redemptions: (i) redemptions that result from
the Fund's right to liquidate a shareholder's account if the aggregate net
asset value of the shares held in the account is less than the then-effective
minimum account size; (ii) returns of excess contributions to an IRA, SIMPLE
IRA, SEP/IRA or 403(b)(7) or 457 Deferred Compensation Plan, (iii) periodic
distributions from an IRA, SIMPLE IRA, SAR/SEP, SEP/IRA or 403(b)(7) or 457
Deferred Compensation Plan due to death, disability or attainment of age 59
1/2, and IRA distributions qualifying under Section 72(t) of the Code; and
(iv) distributions from an account if the redemption results from the death of
all registered owners of the account (in the case of accounts established
under the Uniform Gifts to Minors or Uniform Transfers to Minors Acts or trust
accounts, the waiver applies upon the death of all beneficial owners) or a
total and permanent disability (as defined in Section 72 of the Code) of all
registered owners occurring after the purchase of the shares being redeemed.

The CDSC on Class C Shares is waived in connection with the following
redemptions: (i) redemptions that result from the Fund's right to liquidate a
shareholder's account if the aggregate net asset value of the shares held in
the account is less than the then-effective minimum account size; (ii) returns
of excess contributions to an IRA, SIMPLE IRA, 403(b)(7) or 457 Deferred
Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan, or 401(k)
Defined Contribution Plan; (iii) periodic distributions from a 403(b)(7) or
457 Deferred Compensation Plan upon attainment of age 59 1/2, Profit Sharing
Plan, Money Purchase Pension Plan, or 401(k) Defined Contribution Plans upon
attainment of age 70 1/2, and IRA distributions qualifying under Section 72(t)
of the Code; (iv) distributions from a 403(b)(7) or 457 Deferred Compensation
Plan, Profit Sharing Plan, or 401(k) Defined Contribution Plan, under hardship
provisions of the plan; (v) distributions from a 403(b)(7) or 457 Deferred
Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan or a
401(k) Defined Contribution Plan upon attainment of normal retirement age
under the plan or upon separation from service; (vi) periodic distributions
from an IRA or SIMPLE IRA on or after attainment of age 59 1/2; and (vii)
distributions from an account if the redemption results from the death of all
registered owners of the account (in the case of accounts established under
the Uniform Gifts to Minors or Uniform Transfers to Minors Acts or trust
accounts, the waiver applies upon the death of all beneficial owners) or a
total and permanent disability (as defined in Section 72 of the Code) of all
registered owners occurring after the purchase of the shares being redeemed.

In addition, the CDSC will be waived on Class B Shares and Class C
Shares redeemed in accordance with a Systematic Withdrawal Plan if the annual
amount selected to be withdrawn under the Plan does not exceed 12% of the
value of the account on the date that the Systematic Withdrawal Plan was
established or modified.

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DIVIDENDS AND DISTRIBUTIONS

Each Fund declare dividends from net investment income and usually
distribute such accrued dividends to shareholders at least annually. All
capital gains, if any, are distributed annually, usually in December. When a
capital gain dividend is declared, the net asset value per share is reduced by
the amount of the dividend. Investors considering buying shares of one of the
Funds just prior to a record date for a taxable dividend or capital gain
distribution should be aware that, regardless of whether the price of the Fund
shares to be purchased reflects the amount of the forthcoming dividend or
distribution payment, any such payment will be a taxable dividend or
distribution payment.

Both dividends and distributions, if any, are automatically reinvested
in your account at net asset value unless you elect otherwise. Any payment
by check of dividends or other distributions which cannot be delivered by the
United States Post Office or which remains uncashed for a period of more than
one year may be reinvested in your account at the then-current net asset value
and the dividend option may be changed from cash to reinvest. If you elect to
take your dividends and distributions in cash and such dividends and
distributions are in an amount of $25 or more, you may choose the MoneyLine (SM)
Direct Deposit Service and have such payments transferred from your Fund account
to your predesignated bank account. This service is not available for certain
retirement plans. See MoneyLine (SM) Services under The Delaware Difference for
more information about this service.

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TAXES

The tax discussion set forth below is included for general
information only. Investors should consult their own tax advisers concerning
the federal, state, local or foreign tax consequences of an investment in the
Fund.

On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping changes in
the Code. Because many of these changes are complex, and only indirectly
affect a Fund and its distributions to you, they are discussed in Part B.
Changes in the treatment of capital gains, however, are discussed in this
section.

Each Fund has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code. As such, a Fund
will not be subject to federal income tax, or to any excise tax, to the extent
its earnings are distributed as provided in the Code and it satisfies certain
other requirements relating to the sources of its income and diversification
of its assets.

Each Fund intends to distribute substantially all of its net
investment income and net capital gains, if any. Dividends from net investment
income or net short-term capital gains will be taxable to those investors who
are subject to income taxes as ordinary income, whether received in cash or in
additional shares. For corporate investors, dividends from net investment
income will generally qualify in part for the corporate dividends-received
deduction. The portion of dividends paid by a Fund that so qualifies will be
designated each year in a notice from Adviser Funds, Inc. to the Fund's
shareholders. For the fiscal year ended October 31, 1997, 4.63%, 36.28% and 0%
of U.S. Growth Fund's, Overseas Equity Fund's and New Pacific Fund's dividends
from net investment income qualified for the dividends-received deduction to
corporations.

Distributions paid by a Fund from long-term capital gains, whether
received in cash or in additional shares, are taxable to those investors who
are subject to income taxes as long-term capital gains, regardless of the
length of time an investor has owned shares in the Fund. A Fund does not seek
to realize any particular amount of capital gains during a year; rather,
realized gains are a by-product of Fund management activities. Consequently,
capital gains distributions may be expected to vary considerably from year to
year. Also, for those investors subject to tax, if purchases of shares in a
Fund are made shortly before the record date for a dividend or capital gains
distribution, a portion of the investment will be returned as a taxable
distribution.

The Treatment of Capital Gain Distributions under the Taxpayer Relief Act of
1997
The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors who are
in the 28% or higher federal income tax brackets, these gains will be taxed at
a maximum of 20%. For investors who are in the 15% federal income tax bracket,
these gains will be taxed at a maximum of 10%. Capital gain distributions will
qualify for these new maximum tax rates, depending on when a Fund's securities
were sold and how long they were held by a Fund before they were sold.
Investors who want more information on holding periods and other qualifying
rules relating to these new rates should review the expanded discussion in
Part B, or should contact their own tax advisers.

Adviser Funds, Inc. will advise you in its annual information
reporting at calendar year end of the amount of its capital gain distributions
which will qualify for these maximum federal tax rates.

Although dividends generally will be treated as distributed when
paid, dividends which are declared in October, November, or December to
shareholders of record on a specified date in one of those months, but which,
for operational reasons, may not be paid to the shareholder until the
following January, will be treated for tax purposes as if paid by the Fund and
received by the shareholder on December 31 of the year declared.

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The sale of shares of a Fund is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may
be realized from an ordinary redemption of shares or an exchange of shares
between the Fund and any other funds available from Delaware Investments. Any
loss incurred on a sale or exchange of Fund shares that had been held for six
months or less will be treated as a long-term capital loss to the extent of
capital gain dividends received with respect to such shares. All or a portion
of the sales charge incurred in acquiring Fund shares will be excluded from
the federal tax basis of any of such shares sold or exchanged within 90 days
of their purchase (for purposes of determining gain or loss upon sale of such
shares) if the sale proceeds are reinvested in a Fund or in another fund
available from Delaware Investments and a sales charge that would otherwise
apply to the reinvestment is reduced or eliminated. Any portion of such sales
charge excluded from the tax basis of the shares sold will be added to the tax
basis of the shares acquired in the reinvestment.

The automatic conversion of Class B Shares into Class A Shares at the
end of approximately eight years after purchase will be tax-free for federal
tax purposes. See Automatic Conversion of Class B Shares under Classes of
Shares.

In addition to the federal taxes described above, shareholders may or
may not be subject to various state and local taxes. For example,
distributions of interest income and capital gains realized from certain types
of U.S. government securities may be exempt from state personal income taxes.
Because investors' state and local taxes may be different than the federal
taxes described above, investors should consult their own tax advisers.

Each year, Adviser Funds, Inc. will mail to you information on the
tax status of the Fund's dividends and distributions. Shareholders will also
receive each year information as to the portion of dividend income, if any,
that is derived from U.S. government securities that are exempt from state
income tax. Of course, shareholders who are not subject to tax on their income
would not be required to pay tax on amounts distributed to them by the Fund.

Adviser Funds, Inc. is required to withhold 31% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your Investment Application your
proper Taxpayer Identification Number and by certifying that you are not
subject to backup withholding.

Certain Funds may be required to pay withholding and other taxes
imposed by foreign countries in connection with their investments outside the
U.S. generally at rates from 10% to 40%, which would reduce these Funds'
investment income.

Certain income received by Overseas Equity Fund and New Pacific Fund
may be subject to foreign taxes. If more than 50% of the value of a Fund's
total assets at the close of any taxable year consists of securities of
foreign corporations, a Fund may elect to treat any foreign taxes paid by it
as paid by its shareholders. If a Fund makes this election, its shareholders
will generally be required to include in income their respective pro-rata
positions in computing their taxable income or, alternatively, to claim
foreign tax

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credits (subject, in either case, to certain limitations). Each year that a
Fund makes such an election, it will report to its shareholders the amount per
share of foreign taxes it has elected to have treated as paid by its
shareholders.

See Dividends, Distributions and Taxes in Part B for additional
information on tax matters relating to each Fund and its shareholders.

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CALCULATION OF OFFERING PRICE AND NET ASSET VALUE PER SHARE

The net asset value ("NAV") per share is computed by adding the value
of all securities and other assets in the portfolio, deducting any liabilities
(expenses and fees are accrued daily) and dividing by the number of shares
outstanding. Portfolio securities for which market quotations are available
are priced at market value. Short-term investments having a maturity of less
than 60 days are valued at amortized cost, which approximates market value.
All other securities are valued at their fair value as determined in good
faith and in a method approved by Adviser Funds, Inc.'s Board of Directors.
See Determining Offering Price and Net Asset Value in Part B.

Class A Shares are purchased at the offering price per share, while
Class B Shares and Class C Shares are purchased at the NAV per share. The
offering price per share of Class A Shares consists of the NAV per share next
computed after the order is received, plus any applicable front-end sales
charges.

The offering price and NAV are computed as of the close of regular
trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on
days when the Exchange is open.

The net asset values of all outstanding shares of each class of a
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in that Fund represented by the value of
shares of that class. All income earned and expenses incurred by a Fund will
be borne on a pro-rata basis by each outstanding share of a class, based on
each class' percentage in that Fund represented by the value of shares of such
classes, except that the Institutional Classes will not incur any distribution
fees under the 12b-1 Plans and Class A Shares, Class B Shares and Class C
Shares alone will bear the 12b-1 Plan expenses payable under their respective
12b-1 Plan. Due to the specific distribution expenses and other costs that
will be allocable to each class, the net asset value of each class of a Fund
may vary.

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MANAGEMENT OF THE FUNDS

Directors
The business and affairs of Adviser Funds, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding the directors and officers.

Investment Manager
Delaware Management Company, Inc. (the "Manager") furnishes investment
management services to each Fund.

The Manager and its predecessors have been managing the funds in
Delaware Investments since 1938. On October 31, 1997, the Manager and its
affiliates within Delaware Investments, including Delaware International
Advisers Ltd., were managing in the aggregate more than $38 billion in assets
in the various institutional or separately managed (approximately
$22,496,609,000) and investment company (approximately $16,012,252,000)
accounts.

The Manager is an indirect, wholly owned subsidiary of Delaware
Management Holdings, Inc. ("DMH"). In turn, DMH is a wholly owned subsidiary,
and subject to the ultimate control, of Lincoln National Corporation ("Lincoln
National"). Lincoln National, with headquarters in Fort Wayne, Indiana, is a
diversified organization with operations in many aspects of the financial
services industry, including insurance and investment management.

The Manager administers the affairs of and is ultimately responsible
for the investment management of each of the Funds under separate Investment
Management Agreements with Adviser Funds, Inc. on behalf of U.S. Growth Fund
and New Pacific Fund dated May 4, 1996 and under an Amended and Restated
Investment Management Agreement with Advisers Funds, Inc. on behalf of
Overseas Equity Fund dated September 15, 1997 (the "New Agreement").

Investment Management Agreements. The Investment Management
Agreements for U.S. Growth Fund and New Pacific Fund were approved by the
Board of Directors of Adviser Funds, Inc., including a majority of the
Directors who are not "interested persons" of Adviser Funds, Inc., on February
23, 1996 and approved by the respective shareholders of the Funds at a
shareholder meeting held on May 3, 1996. See Restructuring of the Funds in
Part B.

The New Agreement for Overseas Equity Fund was approved by the Board
of Directors of Adviser Funds, Inc., including a majority of the Directors who
are not interested persons of Advisers Funds, Inc., on July 17, 1997. The New
Agreement lowered the Manager's annual fee from 1.10% of average daily net
assets under the previous Investment Management Agreement to an annual fee of
1.00% of average daily net assets.

Under the Investment Management Agreements, the Manager receives
advisory fees monthly based upon each Fund's average daily net assets at the
following annual rates:

U.S. Growth Fund 0.70%
Overseas Equity Fund 1.00%
New Pacific Fund 0.80%

The directors of Adviser Funds, Inc. annually review fees paid to the
Manager. The Manager elected voluntarily to waive that portion, if any, of its
investment advisory fees and to reimburse a Fund's expenses to the extent
necessary to ensure that a Fund's expenses do not exceed the amounts noted
under Summary of Expenses.

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The advisory fees for Overseas Equity and New Pacific Funds, while
higher than the advisory fees paid by other mutual funds in general, are
comparable to fees paid by other mutual funds with similar objectives and
policies.

For the fiscal year ended October 31, 1997, the following investment
management fees based on a percentage of a Fund's average daily net assets
were incurred and paid:

Incurred Paid
U.S. Growth Fund 0.70% 0.70%
Overseas Equity Fund* 1.10% 1.10%
New Pacific Fund 0.80% 0.74%

* The Board of Directors approved a reduction from 1.10% of average
daily net assets to 1.00% of average daily net assets in the
investment advisory fee for Overseas Equity Fund effective September
15, 1997.

The Investment Management Agreements will continue in effect for a
period of two years from the date of their execution, and will continue
annually thereafter if approved by a vote of a majority of the directors who
are not interested persons of Adviser Funds, Inc. or the Manager, at a meeting
called for the purpose of voting on such approval. The Investment Management
Agreements may be terminated without penalty at any time (1) on 60 days'
written notice, by vote of a majority of the Board of Directors of Adviser
Funds, Inc., (2) on 60 days' written notice, by vote of a majority of the
outstanding voting securities of the Funds, or (3) on 60 days' written notice
by the Manager. The Investment Management Agreements terminate automatically
in the event of "assignment." The terms "assignment," "majority of outstanding
voting securities" and "interested person" are as defined in the 1940 Act.

Investment Sub-Advisers
Pursuant to a sub-advisory agreement with the Manager (the
"Sub-Advisory Agreement" or, collectively, the "Sub-Advisory Agreements"),
each Fund's sub-adviser participates in the management of its respective
Fund's assets, is responsible for the day-to-day investment management of the
Fund, makes investment decisions for the Fund in accordance with the Fund's
investment objective and stated policies and places orders on behalf of the
Fund to effect the investment decisions made. The Manager continues to have
ultimate responsibility for all investment advisory services in connection
with the management of the Funds pursuant to the Investment Management
Agreement and supervises the sub-advisers' performance of such services.

The following registered investment advisers act as sub-advisers (the
"Sub-Advisers" or individually the "Sub-Adviser") to the Manager with respect
to the management of the assets of the Funds as indicated below.

Lynch & Mayer, Inc., Sub-Adviser to the Manager with respect to
management of the assets of the U.S. Growth Fund, 520 Madison Avenue, New
York, New York 10022, is an indirect, wholly owned subsidiary of Lincoln
National and an affiliate of the Manager. Lynch & Mayer, Inc. provides
investment advice to pension funds, foundations, endowments, trusts and high
net worth individuals and families and had assets under management, as of
October 31, 1997, in excess of $6.2 billion. Effective as of October 27, 1997,
Edward J. Petner assumed primary responsibility for making investment
decisions for U.S. Growth Fund. Mr. Petner currently serves as Chief Executive
Officer and Chief Financial Officer of Lynch & Mayer, Inc. Before joining
Lynch & Mayer, Inc. in 1983, Mr. Petner received a BA from Duquesne University
in 1981 and an MBA from the Wharton School in 1983.

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Delaware International Advisers Ltd., Sub-Adviser to the Manager with
respect to management of the assets of Overseas Equity Fund, Third Floor, 80
Cheapside, London, England EC2V 6EE, is an affiliate of the Manager. Delaware
International Advisers Ltd. began serving as a Sub-Adviser on September 15,
1997. The Sub- Advisory Agreement between Delaware International Advisers Ltd.
and the Manager was approved by shareholders of Overseas Equity Fund at a
special meeting held on November 18, 1997. Delaware International Advisers
Ltd. provides investment advisory services to certain other funds available
from Delaware Investments and to institutional accounts, primarily retirement
plans and endowment funds. As of October 31, 1997, Delaware International
Advisers Ltd. had assets in excess of $7 billion. Also effective September 15,
1997, Clive A. Gillmore and Robert Akester assumed primary responsibility for
making day-to-day investment decisions for Overseas Equity Fund. A graduate of
the University of Warwick and having begun his career at Legal and General
Investment Management, Mr. Gillmore joined Delaware Investments in 1990 after
eight years of investment experience. His most recent position prior to
joining Delaware Investments was as a Pacific Basin equity analyst and senior
portfolio manager for Hill Samuel Investment Advisers Ltd. Mr. Gillmore
completed the London Business School Investment program. Prior to joining
Delaware in 1996 as a Senior Portfolio Manager, Mr. Akester, who began his
investment career in 1969, was most recently a Director of Hill Samuel
Investment Advisers Ltd., which he joined in 1985. His prior experience
included working as a Senior Analyst and head of the South-East Asian Research
team at James Capel, and as a Fund Manager at Prudential Assurance Co., Ltd.
Mr. Akester holds a BS in Statistics and Economics from University College,
London and is an associate of the Institute of Actuaries, with a certificate
in Finance and Investment.

In making investment decisions for Overseas Equity Fund, Mr. Gillmore
and Mr. Akester regularly consult with an international equity team of nine
members, five of whom research the Pacific Basin and four of whom research the
European Markets. Mr. Gillmore and Mr. Akester also regularly consult with
David G. Tilles. Mr. Tilles, who is Chief Investment Officer for Delaware
International, is a graduate of the University of Warwick with a BS in
management sciences. Before joining Delaware Investments in 1990, he was Chief
Investment Officer of Hill Samuel Investment Advisers Ltd. He is a member of
the Institute of Investment Management & Research and the Operational Research
Society.

AIB Govett, Inc., Sub-Adviser to the Manager with respect to
management of the assets of the New Pacific Fund, 250 Montgomery Street, Suite
1200, San Francisco, California, 94104, provides investment advice to
investment trusts, investment companies, mutual funds and pension funds and
had assets under management, as of October 31, 1997, of $14.2 billion.
Effective as of November 12, 1997, Jane Pickard assumed primary responsibility
for making investment decisions for New Pacific Fund. Ms. Pickard graduated in
law from Endinburgh University. She joined Barclays de Zoete Wedd Securities
Limited in 1991, where she initially worked as a specialist in structured debt
products moving into the Pacific Rim equity division in 1992. She remained
there until 1995 when she moved to IAI International where she had
responsibility for Pacific Region investment for U.S. institutional and retail
funds. Ms. Pickard joined AIB Govett Asset Management, an affiliate of AIB
Govett, Inc., in 1996 and concentrates on investments in the Pacific region.
As a result of a corporate reorganization, sub-advisory services were
transferred from John Govett & Co., Inc. to AIB Govett, Inc., although there
was no actual change in control.

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The sub-advisers receive subadvisory fees from the Manager for their
services calculated in accordance with the schedule set forth below. The Funds
do not pay any fees to the sub-advisers.
<TABLE>
<CAPTION>

Fund Sub-Adviser Annual Fee
---- ----------- ----------

<S> <C> <C>
U.S. Growth Fund Lynch & Mayer, Inc. 0.40% of average
daily net assets

Overseas Equity Fund Delaware International Advisers Ltd. 80% of the fee paid
to the Manager

New Pacific Fund AIB Govett, Inc. 0.50% of average
daily net assets
</TABLE>

Custodian
The Chase Manhattan Bank serves as Custodian for each of the Funds
and, in that capacity, has custody of the Funds' securities. Its mailing
address is 4 Chase Metrotech Center, Brooklyn, NY 11245. The Chase Manhattan
Bank is not involved in the investment decisions made with respect to the
Funds.

Execution of Fund Transactions
Each Fund uses its best efforts to obtain the best available price
and most favorable execution for portfolio transactions. Orders may be placed
with brokers or dealers who provide brokerage and research services to the
Manager or its advisory clients. These services may be used by the Manager in
servicing any of its accounts. Subject to best price and execution, each Fund
may consider a broker/dealer's sales of Fund shares in placing portfolio
orders and may place orders with broker/dealers that have agreed to defray
certain Fund expenses such as custodian fees.

Affiliates of the Manager, such as Lynch & Mayer, Inc., may act as a
broker or futures commission merchant for Adviser Funds, Inc., provided that
the commissions, fees or other remuneration it receives are fair and
reasonable.

Performance Information
From time to time, each Fund may quote total return performance or
yield (if applicable) of its Classes in advertising and other types of
literature.

Total return will be based on a hypothetical $1,000 investment,
reflecting the reinvestment of all distributions at net asset value and: (i)
in the case of Class A Shares, the impact of the maximum front-end sales
charge at the beginning of each specified period; and (ii) in the case of
Class B Shares and Class C Shares, the deduction of any applicable CDSC at the
end of the relevant period. Each presentation will include the average annual
total return for one-, five- or ten-year periods, and life-of-fund period, as
applicable. Each Fund may also advertise aggregate and average total return
information concerning a Class over additional periods of time. In addition,
each Fund may present total return information that does not reflect the
deduction of the maximum front-end sales charge or any applicable CDSC. In
this case, such total return information would be more favorable than total
return information which includes deductions of the maximum front-end sales
charge or any applicable CDSC.

The current yield for a Class will be calculated by dividing the
annualized net investment income earned by that Class during a recent 30-day
period by the net asset value per share on the last day of the period. The
yield formula provides for semi-annual compounding which assumes that net
investment income is earned and reinvested at a constant rate and annualized
at the end of a six-month period.

Because securities prices fluctuate, investment results of the
Classes will fluctuate over time. Past performance should not be considered
as a representation of future results.

Distribution (12b-1) and Service
The Distributor, Delaware Distributors, L.P., serves as the national
distributor for each Fund under separate Distribution Agreements dated
September 25, 1995.

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(DAF-R)

Adviser Funds, Inc. has adopted a separate distribution plan under
Rule 12b-1 for each of the Class A Shares, Class B Shares and Class C Shares
(the "Plans"). Each Plan permits the Fund to which the Plan relates to pay the
Distributor from the assets of the respective Classes a monthly fee for the
Distributor's services and expenses in distributing and promoting sales of
shares.

These expenses include, among other things, preparing and
distributing advertisements, sales literature, and prospectuses and reports
used for sales purposes, compensating sales and marketing personnel, holding
special promotions for specified periods of time and paying distribution and
maintenance fees to brokers, dealers and others. In connection with the
promotion of shares of the Classes, the Distributor may, from time to time,
pay to participate in dealer-sponsored seminars and conferences, and reimburse
dealers for expenses incurred in connection with preapproved seminars,
conferences and advertising. The Distributor may pay or allow additional
promotional incentives to dealers as part of preapproved sales contests and/or
to dealers who provide extra training and information concerning a Class and
increase sales of the Class. In addition, each Fund may make payments from the
12b-1 Plan fees of its respective Classes directly to others, such as banks,
who aid in the distribution of Class shares or provide services in respect of
a Class, pursuant to service agreements with Adviser Funds, Inc.

The 12b-1 Plan expenses relating to each of the Class B Shares and
Class C Shares of the Funds are also used to pay the Distributor for advancing
the commission costs to dealers with respect to the initial sale of such
shares.

The aggregate fees paid a Fund from the assets of its respective
Classes to the Distributor and others under the Plans may not exceed 0.35% of
the Class A Shares' average daily net assets in any year, and 1% (0.25% of
which are service fees to be paid by such Fund to the Distributor, dealers and
others, for providing personal service and/or maintaining shareholder
accounts) of each of the Class B Shares' and Class C Shares' average daily net
assets in any year. Class A Shares, Class B Shares and Class C Shares will not
incur any distribution expenses beyond these limits, which may not be
increased without shareholder approval. The Distributor may, however, incur
additional expenses and make additional payments to dealers from its own
resources to promote the distribution of shares of the Classes.

Although the maximum fee payable under the Plan relating to each of
the Class A Shares is 0.35% of average daily net assets, effective at the
close of business on May 3, 1996, the annual fee payable on a monthly basis is
equal to 0.30% of average daily net assets.

While payments pursuant to the Plans may not exceed 0.35% (and
currently do not exceed 0.30%) annually with respect to each Fund's Class A
Shares, and 1% annually with respect to each Fund's Class B Shares and Class C
Shares, the Plans do not limit fees to amounts actually expended by the
Distributor. It is therefore possible that the Distributor may realize a
profit in any particular year. However, the Distributor currently expects that
its distribution expenses will likely equal or exceed payments to it under the
Plans. The Distributor may, however, incur such additional expenses and make
additional payments to dealers from its own resources to promote the
distribution of shares of the Classes. The monthly fees paid to the
Distributor under the Plans are subject to the review and approval of Adviser
Funds, Inc.'s unaffiliated directors, who may reduce the fees or terminate the
Plans at any time.

Adviser Funds, Inc.'s Plans do not apply to the Institutional Classes
of shares. Those shares are not included in calculating the Plans' fees, and
the Plans are not used to assist in the distribution and marketing of the
Institutional Classes.

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The directors of Adviser Funds, Inc. annually review fees paid to the
Distributor and the Transfer Agent. The Distributor and the Transfer Agent are
also indirect, wholly owned subsidiaries of DMH.

Expenses
Each Fund is responsible for all of its own expenses other than those
borne by the Manager under its Investment Management Agreements and those
borne by the Distributor under its Distribution Agreements. For the fiscal
year ended October 31, 1997, the ratios of expenses to average daily net
assets for each Class were as follows:
<TABLE>
<CAPTION>

Class A Shares Class B Shares Class C Shares
-------------- -------------- --------------

<S> <C> <C> <C>
U.S. Growth Fund 1.44% 2.14% 2.14%
Overseas Equity Fund 1.80% 2.50% 2.50%
New Pacific Fund 1.80% 2.50% 2.50%
</TABLE>

The expense ratio of each Class reflects the impact of its 12b-1 Plan
and the fee waiver and payments. See Summary of Expenses for current fee
waivers and payments .

Other Shareholder Matters
All shares of Adviser Funds, Inc. have equal voting rights and are
entitled to one vote per share with proportional voting for fractional shares.
As permitted by Maryland law, there will normally be no meetings of
shareholders for the purpose of electing directors unless and until such time
as fewer than a majority of the directors holding office have been elected by
shareholders. At that time, the directors in office will call a shareholders
meeting for election of directors. Shareholders have certain rights, including
the right to call a meeting upon a vote of 10% of Adviser Funds, Inc.'s
outstanding shares for the purpose of voting on the removal of one or more
directors or to transact any other business. The shares do not have cumulative
voting rights. Accordingly, the holders of a majority of the shares voting for
the election of directors can elect all the directors. Shares of Adviser
Funds, Inc., when issued, will be fully paid and non-assessable.

In matters which only affect a particular Fund, the matter shall have
been effectively acted upon by a majority vote of that Fund even though: (1)
the matter has not been approved by a majority vote of any other Fund; or (2)
the matter has not been approved by a majority vote of Adviser Funds, Inc.

In addition to Class A Shares, Class B Shares and Class C Shares,
each Fund also offers an Institutional Class of shares. Shares of each class
represent proportionate interests in the assets of the respective Fund and
have the same voting and other rights and preferences as the other classes of
that Fund, except that shares of the Institutional Classes are not subject to,
and may not vote on matters affecting, the 12b-1 Plans relating to the
Classes. Similarly, as a general matter, shareholders of Class A Shares, Class
B Shares and Class C Shares may vote only on matters affecting the 12b-1 Plan
that relates to the class of shares that they hold. However, Class B Shares
may vote on any proposal to increase materially the fees to be paid by a Fund
under the 12b-1 Plan relating to Class A Shares.

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General Information

Shareholder Services
Shareholder servicing, reporting and general shareholder services
functions for each Fund are performed by Delaware Service Company, Inc., which
maintains its offices at 1818 Market Street, Philadelphia, PA 19103.

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IMPLEMENTATION OF INVESTMENT OBJECTIVES AND POLICIES

In attempting to achieve their investment objectives and policies,
the Funds may employ, among others, one or more of the strategies set forth
below.

Convertible Securities
The Funds may invest in securities that either have warrants or
rights attached or are otherwise convertible into other or additional
securities. A convertible security is typically a fixed-income security (a
bond or preferred stock) that may be converted at a stated price within a
specified period of time into a specified number of shares of common stock of
the same or a different issuer. Convertible securities are generally senior to
common stocks in a corporation's capital structure but are usually
subordinated to similar non-convertible securities. While providing a
fixed-income stream (generally higher in yield than the income derivable from
a common stock but lower than that afforded by a similar non-convertible
security), a convertible security also affords an investor the opportunity,
through its conversion feature, to participate in capital appreciation
attendant upon a market price advance in the common stock underlying the
convertible security. In general, the market value of a convertible security
is at least the higher of its "investment value" (i.e., its value as a
fixed-income security) or its "conversion value" (i.e., its value upon
conversion into its underlying common stock). While no securities investment
is without some risk, investments in convertible securities generally entail
less risk than investments in the common stock of the same issuer.

U.S. Government Securities
The Funds may invest in securities of the U.S. government. Securities
guaranteed by the U.S. government include: (1) direct obligations of the U.S.
Treasury (such as Treasury bills, notes and bonds) and (2) federal agency
obligations guaranteed as to principal and interest by the U.S. Treasury (such
as GNMA certificates and Federal Housing Administration debentures). For these
securities, the payment of principal and interest is unconditionally
guaranteed by the U.S. government, and thus they are of the highest possible
credit quality. Such securities are subject to variations in market value due
to fluctuations in interest rates, but if held to maturity are deemed to be
free of credit risk for the life of the investment.

Securities issued by U.S. government instrumentalities and certain
federal agencies are neither direct obligations of, nor guaranteed by, the
U.S. Treasury. However, they generally involve federal sponsorship in one way
or another: some are backed by specific types of collateral; some are
supported by the issuer's right to borrow from the U.S. Treasury; some are
supported by the discretionary authority of the U.S. Treasury to purchase
certain obligations of the issuer; and others are supported only by the credit
of the issuing government agency or instrumentality. These agencies and
instrumentalities include, but are not limited to, Federal Land Banks, Farmers
Home Administration, Central Bank for Cooperatives, Federal Intermediate
Credit Banks, and Federal Home Loan Banks.

Repurchase Agreements

The Funds may enter into repurchase agreements, under which a Fund
buys a security (typically a U.S. government security or other money market
security) and obtains a simultaneous commitment from the seller to repurchase
the security at a specified time and price. The seller must maintain with the
Adviser Funds, Inc.'s Custodian collateral equal to at least 102% of the
repurchase price including accrued interest, as monitored daily by the Manager
and/or sub-adviser. A Fund only will enter into repurchase agreements
involving securities in which it could otherwise invest and with banks,
brokers or dealers deemed by the Board of Directors to be creditworthy. If the
seller under the repurchase agreement defaults, the Fund may incur a loss if
the value of the collateral securing the repurchase agreement has declined and
may incur disposition costs in connection with liquidating the collateral.

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(DAF-R)

If bankruptcy proceedings are commenced with respect to the seller,
realization upon the collateral by the Fund may be delayed or limited.

The funds in Delaware Investments have obtained an exemption from the
joint-transaction prohibitions of Section 17(d) of the 1940 Act to allow
Delaware Investments funds jointly to invest cash balances. The Funds may
invest cash balances in a joint repurchase agreement in accordance with the
terms of the Order and subject generally to the conditions described above.

When-Issued Securities and Firm Commitment Agreements
The Funds may purchase securities on a delayed delivery or
"when-issued" basis and enter into firm commitment agreements (transactions
whereby the payment obligation and interest rate are fixed at the time of the
transaction but the settlement is delayed). The transactions may involve
either corporate, municipal or government securities. A Fund as a purchaser
assumes the risk of any decline in value of the security beginning on the date
of the agreement or purchase. The Funds may invest in when-issued securities
in order to take advantage of securities that may be especially under or over
valued when trading on a when-issued basis.

Each Fund will segregate liquid assets such as cash, U.S. government
securities or other appropriate high grade debt obligations in an amount
sufficient to meet its payment obligations in these transactions. Although
these transactions will not be entered into for leveraging purposes, to the
extent a Fund's aggregate commitments under these transactions exceed its
holdings of cash and securities that do not fluctuate in value (such as money
market instruments), the Fund temporarily will be in a leveraged position
(i.e., it will have an amount greater than its net assets subject to market
risk). Should market values of a Fund's portfolio securities decline while
Adviser Funds, Inc. is in a leveraged position, greater depreciation of its
net assets would likely occur than were it not in such a position. The Funds
will not borrow money to settle these transactions and, therefore, will
liquidate other Fund securities in advance of settlement if necessary to
generate additional cash to meet their obligations thereunder.

Money Market Instruments
The Funds may invest in money market instruments without limit for
temporary or defensive purposes. These are shorter-term debt securities
generally maturing in one year or less which include (1) commercial paper
(short-term notes up to 9 months issued by corporations or governmental
bodies), (2) commercial bank obligations (certificates of deposit
(interest-bearing time deposits), bankers' acceptances (time drafts on a
commercial bank where the bank accepts an irrevocable obligation to pay at
maturity), and documented discount notes (corporate promissory discount notes
accompanied by a commercial bank guarantee to pay at maturity)), (3) corporate
bonds and notes (corporate obligations that mature, or that may be redeemed,
in one year or less), (4) variable rate demand notes, short-term tax-exempt
obligations and (5) savings association obligations (certificates of deposit
issued by mutual savings banks or savings and loan associations). Although
certain floating or variable rate obligations (securities which have a coupon
rate that changes at least annually and generally more frequently) have
maturities in excess of one year, they are also considered to be short-term
debt securities.

Investments by Funds of Funds
New Pacific Fund and U.S. Growth Fund accept investments from the
series portfolios of Delaware Group Foundation Funds, a fund of funds (the
"Foundation Funds"). From time to time, the Funds may experience large
investments or redemptions due to allocations or rebalancings by the
Foundation Funds. While it is impossible to predict the overall impact of
these transactions over time, there could be adverse effects on portfolio
management to the extent that the Funds may be required to sell securities or
invest cash at times when it would not otherwise do so. These transactions
could also have tax consequences if sales of securities result in gains and
could also increase transactions costs or portfolio turnover. The Manager will

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(DAF-R)

monitor such transactions and will attempt to minimize any adverse effects on
both the Funds and the Foundation Funds resulting from such transactions.

Strategic Transactions
General. The Funds may, but are not required to, utilize various
other investment strategies as described below to hedge various market risks
(such as interest rates, currency exchange rates, and broad or specific equity
or fixed-income market movements), to manage the effective maturity or
duration of fixed-income securities in the Fund's portfolio or to enhance
potential gain. Such strategies are generally accepted as modern Fund
management and are regularly utilized by many mutual funds and other
institutional investors. Techniques and instruments may change over time as
new instruments and strategies are developed or regulatory changes occur. In
the course of pursuing these investment strategies, the Fund may purchase and
sell derivative securities. In particular, the Funds may purchase and sell
exchange-listed and over-the-counter put and call options on securities,
equity and fixed-income indices and other financial instruments, purchase and
sell financial futures contracts and options thereon, enter into various
interest rate transactions such as swaps, caps, floors or collars, and enter
into various currency transactions such as currency forward contracts,
currency futures contracts, currency swaps or options on currencies or
currency futures (collectively, all the above are called "Strategic
Transactions"). Strategic Transactions may be used to attempt to protect
against possible changes in the market value of securities held in or to be
purchased for the Fund resulting from securities markets or currency exchange
rate fluctuations, to protect the Fund's unrealized gains in the value of its
Fund securities, to facilitate the sale of such securities for investment
purposes, to manage the effective maturity or duration of fixed-income
securities in a Fund, or to establish a position in the derivatives markets as
a temporary substitute for purchasing or selling particular securities. Any or
all of these investment techniques may be used at any time and there is no
particular strategy that dictates the use of one technique rather than
another, as use of any Strategic Transaction is a function of numerous
variables including market conditions. The ability of a Fund to utilize these
Strategic Transactions successfully will depend on the Manager's or
sub-adviser's ability to predict pertinent market movements, which cannot be
assured. The Funds will comply with applicable regulatory requirements when
implementing these strategies, techniques and instruments. Strategic
Transactions involving financial futures and options thereon will be
purchased, sold or entered into only for bona fide hedging, risk management or
Fund management purposes and not for speculative purposes. Additional
information relating to certain financial instruments or strategies is set
forth below. In addition, see Special Risks of Strategic Transactions, below,
for a discussion of certain risks.

Limitations on Futures and Options Transactions. A Fund will not
enter into any futures contract or option on a futures contract if, as a
result, the sum of initial margin deposits on futures contracts and related
options and premiums paid for options on futures contracts the Funds have
purchased, after taking into account unrealized profits and losses on such
contracts, would exceed 5% of the Fund's net asset value without reference to
the definition of "bona fide hedging transactions and positions" under the
Commodity Exchange Act, as amended, or unless the futures contract is covered
by cash equivalent set-asides equal to the total contract value.

In addition to the above limitations, each Fund will not (a) sell
futures contracts, purchase put options or write call options if, as a result,
more than 25% of a Fund's total assets would be hedged with futures and
options under normal conditions; (b) purchase futures contracts or write put
options if, as a result, a Fund's total obligations upon settlement or
exercise of purchased futures contracts and written put options would exceed
25% of its total assets; or (c) purchase call options if, as a result, the
current value of option premiums for call options purchased by a Fund would
exceed 5% of the Fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features similar
to options.

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(DAF-R)

The limitations on the Funds' investments in futures contracts and
options, and the Funds' policies regarding futures contracts and options
discussed elsewhere are not fundamental policies and may be changed as
regulatory agencies permit.

Options Transactions. The Funds may purchase and write (i.e., sell)
put and call options on securities and currencies that are traded on national
securities exchanges or in the over-the-counter market to enhance income or to
hedge their Funds. A call option gives the purchaser, in exchange for a
premium paid, the right for a specified period of time to purchase securities
or currencies subject to the option at a specified price (the exercise price
or strike price). When a Fund writes a call option, the Fund gives up the
potential for gain on the underlying securities in excess of the exercise
price of the option.

A put option gives the purchaser, in return for a premium, the right
for a specified period of time to sell the securities or currencies subject to
the option to the writer of the put at the specified exercise price. The
writer of the put option, in return for the premium, has the obligation, upon
exercise of the option, to acquire the securities underlying the option at the
exercise price. A Fund might, therefore, be obligated to purchase the
underlying securities for more than their current market price.

The Funds will write only "covered" options. An option is covered if
a Fund owns an offsetting position in the underlying security or maintains
cash, U.S. government securities or other high-grade debt obligations with a
value sufficient at all times to cover its obligations. See Part B.

Forward Foreign Currency Exchange Contracts. The Funds may enter into
forward foreign currency exchange contracts to protect the value of their
Funds against future changes in the level of currency exchange rates. The
Funds may enter into such contracts on a spot (i.e., cash) basis at the rate
then prevailing in the currency exchange market or on a forward basis, by
entering into a forward contract to purchase or sell currency at a future
date. A Fund's dealings in forward contracts will be limited to hedging
involving either specific transactions or Fund positions. Transaction hedging
generally arises in connection with the purchase or sale of its Fund
securities and accruals of interest or dividends receivable and Fund expenses.
Position hedging generally arises with respect of existing Fund security or
currency positions.

Futures Contracts and Options Thereon. The Funds may purchase and
sell financial futures contracts and options thereon which are exchange-listed
or over-the-counter for certain hedging, return enhancement and risk
management purposes in accordance with regulations of the CFTC. These futures
contracts and related options will be on interest-bearing securities,
financial indices and interest rate indices. A financial futures contract is
an agreement to purchase or sell an agreed amount of securities at a set price
for delivery in the future.

A Fund may not purchase or sell futures contracts and related options
if immediately thereafter the sum of the amount of initial margin deposits on
the Fund's existing futures and options on futures and premiums paid on such
related options would exceed 5% of the market value of the Fund's total
assets. In addition, the value of all futures contracts sold will not exceed
the total market value of the Fund.

Swap Agreements. The Funds may enter into interest rate swaps,
currency swaps, and other types of swap agreements such as caps, collars and
floors. In an interest rate swap, one party agrees to make regular payments of
a floating rate times a "notional" principal amount in return for payments of
a fixed rate times the same amount. Swaps may also depend on other prices or
rates such as the value of an index or mortgage prepayment rates.

Swap agreements usually involve a small investment of cash relative
to the magnitude of risk assumed. As a result, swaps can be very volatile and
may substantially impact a Fund's performance. Swap agreements are also

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subject to the risk of a counterpart's ability to perform (i.e.,
creditworthiness). A Fund may also suffer losses if it is unable to terminate
swap agreements or reduce exposure through offsetting transactions in a timely
manner.

Special Risks of Strategic Transactions. Participation in the options
or futures markets and in currency exchange transactions involves investment
risks and transaction costs to which a Fund would not be subject absent the
use of these Strategic Transactions. If the Manager's and/or sub-adviser's
prediction of movements in the direction of the securities, foreign currency
and interest rate markets are inaccurate, the adverse consequences to a Fund
may leave the Fund in a worse position than if such Strategic Transactions
were not used. Risks inherent in the use of options, foreign current and
futures contracts and options on futures contracts include (1) dependence on
the Manager's and/or sub-adviser's ability to predict current movements in the
direction of interest rates, securities prices and currency markets; (2)
imperfect correlation between the price of options and futures contracts and
options thereon and movements in the prices of securities being hedged; (3)
the fact that skills need to use these strategies are different from those
needed to select Fund securities; (4) the possible absence of a liquid
secondary market for any particular instrument at any time; (5) the possible
need to defer closing out certain hedged positions to avoid adverse tax
consequences; and (6) the possible inability of a Fund to purchase or sell a
Fund security at a time that otherwise would be favorable for it to do so, or
the possible need for a Fund to sell a Fund security at a disadvantageous
time, due to the need for a Fund to maintain "cover" or to segregate
securities in connection with Strategic Transactions. Although the use of
futures contracts and options transactions for hedging should tend to minimize
the risk of loss due to a decline in the value of the hedged position, at the
same time they tend to limit any potential gain which might result from an
increase in value of such position. Finally, the daily variation margin
requirements for futures contracts would create a greater ongoing potential
financial risk than would purchase of options, where the exposure is limited
to the cost of the initial premium. Losses resulting from the use of Strategic
Transactions would reduce net asset value, and possibly income, and such
losses can be greater than if the Strategic Transactions had not been
utilized. The Strategic Transactions that the Funds may use and some of their
risks are described more fully in Part B.

Each Fund's ability to engage in Strategic Transactions is limited by
the requirements of the Code, as amended, for qualification as a regulated
investment company. See Part B.

* * *

Part B describes certain of these investment policies and risk
considerations. Part B also sets forth other investment policies, risk
considerations and more specific investment restrictions.

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Delaware Investments includes funds with a wide range of investment
objectives. Stock funds, income funds, national and state specific tax-exempt
funds, money market funds, global and international funds and closed-end funds
give investors the ability to create a portfolio that fits their personal
financial goals. For more information, contact your financial adviser or call
Delaware Investments at 800-523-4640.

INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103

NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103

SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103

INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103

CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245

<PAGE>

- -------------------------------------------------------------------------------

DELAWARE GROUP ADVISER FUNDS, INC.

- -------------------------------------------------------------------------------

U.S. GROWTH FUND
- -------------------------------------------------------------------------------

OVERSEAS EQUITY FUND

(formerly World Growth Fund)

- -------------------------------------------------------------------------------

NEW PACIFIC FUND
- -------------------------------------------------------------------------------

A CLASSES
B CLASSES
C CLASSES
- -------------------------------------------------------------------------------

P R O S P E C T U S

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FEBRUARY 28, 1998

[GRAPHIC OMITTED]

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TABLE OF CONTENTS

Cover Page

Synopsis

Summary of Expenses

Financial Highlights

Investment Objectives and Strategies
U.S. Growth Fund
Overseas Equity Fund
New Pacific Fund

Classes of Shares

How to Buy Shares

Redemption and Exchange

Dividends and Distributions

Taxes

Calculation of Net Asset Value Per Share

Management of the Funds

Implementation of Investment Objectives and Policies

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U.S. GROWTH FUND PROSPECTUS
OVERSEAS EQUITY FUND (formerly World Growth Fund) FEBRUARY 28, 1998
NEW PACIFIC FUND

INSTITUTIONAL CLASSES

-----------------------------------------------------------------------------

1818 Market Street, Philadelphia, PA 19103

For more information about the Institutional Classes

call Delaware Investments at 800-828-5052.

Delaware Group Adviser Funds, Inc. ("Adviser Funds, Inc.") is an open-end
management investment company. Adviser Funds, Inc. currently issues three
separate series of shares (each referred to as a "Fund" or collectively as the
"Funds"), each representing a separate, diversified portfolio of securities.
The Funds are U.S. Growth Fund, Overseas Equity Fund (formerly World Growth
Fund) and New Pacific Fund. See Restructuring of the Funds in Part B. Each
Fund has a fundamental investment objective and certain investment policies
which are described in this Prospectus.

Each Fund offers an Institutional Class, which is referred to
individually as a "Class" and collectively as the "Classes."

This Prospectus relates only to the Classes and sets forth
information that you should read and consider before you invest. Please retain
it for future reference. The Funds' Statement of Additional Information ("Part
B" of Adviser Funds, Inc.'s registration statement), dated February 28, 1998,
as it may be amended from time to time, contains additional information about
the Funds and has been filed with the Securities and Exchange Commission (the
"SEC"). Part B is incorporated by reference into this Prospectus and is
available, without charge, by writing to Delaware Distributors, L.P. at the
above address or by calling the above number. The Funds' financial statements
appear in their Annual Report, which will accompany any response to requests
for Part B. The SEC also maintains a Web site (http://www.sec.gov) that
contains Part B, material we incorporated by reference, and other information
regarding registrants that electronically file with the SEC.

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Each Fund also offers Class A Shares, Class B Shares and Class C
Shares. Shares of these classes are subject to sales charges and other
expenses, which may affect their performance. A prospectus for these classes
can be obtained by writing to Delaware Distributors, L.P. at the above address
or by calling the above number.

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SYNOPSIS

The following synopsis is qualified in its entirety by the more
detailed information appearing in the body of the Prospectus.

Investment Objectives and Policies

Risk Factors
Prospective investors should consider a number of factors:

4. U.S. Growth Fund may invest up to 10% of its assets in
non-investment grade fixed-income securities ("junk bonds"). Consequently,
greater risks may be involved with an investment in this Fund. See Risk
Factors and Special Considerations - Lower-Rated Securities under Investment
Objectives and Strategies.

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Investment Manager, Sub-Adviser, Distributor and Transfer Agent
Delaware Management Company, Inc. (the "Manager") furnishes
investment management services to each Fund subject to the supervision and
direction of Adviser Funds, Inc.'s Board of Directors. See Restructuring of
the Funds in Part B. The Manager also provides investment management services
to certain other funds available from Delaware Investments. Delaware
Distributors, L.P. (the "Distributor") is the national distributor for each
Fund and for all of the other mutual funds available from Delaware
Investments. Delaware Service Company, Inc. (the "Transfer Agent") is the
shareholder servicing, dividend disbursing, accounting services and transfer
agent for each Fund and for all of the other mutual funds available from
Delaware Investments.

See Summary of Expenses and Management of the Funds for further
information regarding the Manager and the fees payable under each Fund's
Investment Management Agreement and Sub-Advisory Agreement.

Purchase Price
Shares of each Class offered by this Prospectus are available at net
asset value, without a front-end or contingent deferred sales charge and are
not subject to distribution fees under a Rule 12b-1 distribution plan. See
Classes of Shares.

Redemption and Exchange
Shares of each Class are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.

Open-End Investment Company

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SUMMARY OF EXPENSES
<TABLE>
<CAPTION>

U.S. Growth Fund New Pacific Fund Overseas Equity Fund
Shareholder Transaction Expenses Institutional Class Institutional Class Institutional Class
- -------------------------------- ------------------- ------------------- -------------------

<S> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price)........................ None None None

Maximum Sales Charge Imposed
on Reinvested Dividends (as
a percentage of offering price)........... None None None

Exchange Fees (1)......................... None None None

</TABLE>

- ------------------------

(1) Exchanges are subject to the requirements of each Fund and a front-end
sales charge may apply.

Annual Operating Expenses
(as a percentage of average
daily net assets after fee waivers U.S. Growth Fund Overseas Equity Fund New Pacific Fund
and expense payments) Institutional Class Institutional Class Institutional Class
- ---------------------------------- -------------------- -------------------- -------------------
<S> <C> <C> <C>
Management Fees
(after voluntary waivers) (2)........... 0.70% 1.10%(3) 0.74%(4)

12b-1 Expenses............................ None None None

Other Operating Expenses
(after any voluntary payments) (2). 0.44% 0.40% 0.76%

Total Operating Expenses
(after voluntary waivers and
voluntary payments) (2)......... 1.14% 1.50% 1.50%

</TABLE>

(2) The Manager elected voluntarily to waive that portion, if any, of the
annual Management Fees payable by a particular Fund and to pay a Fund
for its expenses to the extent necessary to ensure that the expenses
of that Fund (exclusive of taxes, interest, brokerage commissions and
extraordinary expenses) do not exceed 1.50% through April 30, 1998.
Absent such fee waivers and expense payments, "Total Operating
Expenses" including "Management Fees" were as follows:

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Total Operating Expenses Management Fees
------------------------ ---------------

<S> <C> <C>
U.S. Growth Fund Institutional Class......................... 1.14% 0.70%
Overseas Equity Fund Institutional Class..................... 1.50% 1.10%
New Pacific Fund Institutional Class......................... 1.50% 0.80%

</TABLE>

(3) Effective September 15, 1997, the investment management fee payable
by Overseas Equity Fund changed from 1.10% of average daily net
assets to 1.00% of average daily net assets. The expense information
has been restated to reflect that change.

(4) Effective the close of business May 3, 1996, the investment
management fee payable by the New Pacific Fund changed from 1.10% of
average daily net assets to 0.80% of average daily net assets. The
expense information has been restated to reflect that change.

For expense information about Class A Shares, Class B Shares and
Class C Shares of each Fund, see the separate Prospectus relating to those
classes.

The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods, assuming (1) a 5% annual
rate of return and (2) redemption at the end of each time period. The Funds do
not charge redemption fees. The following example reflects the voluntary
waivers and payments by the Manager as discussed in this Prospectus.

1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------

<S> <C> <C> <C> <C>
U.S. Growth Fund Institutional Class $12 $36 $63 $139
Overseas Equity Fund Institutional Class $15 $47 $82 $179
New Pacific Fund Institutional Class $15 $47 $82 $179

</TABLE>

This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.

The purpose of the above tables is to assist the investor in
understanding the various costs and expenses they will bear directly or
indirectly in owning shares of each Fund.

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(DAF-I)

- --------------------------------------------------------------------------------

FINANCIAL HIGHLIGHTS

The following financial highlights are derived from the financial
statements of Delaware Group Adviser Funds, Inc. - U.S. Growth Fund, Overseas
Equity Fund and New Pacific Fund and have been audited by Ernst & Young LLP,
independent auditors for the fiscal period ended October 31, 1997 and by the
Funds' previous auditors for the periods ended October 31, 1994 through
October 31, 1996. The data should be read in conjunction with the financial
statements, related notes, and the report of Ernst & Young LLP, all of which
are incorporated by reference into Part B. Further information about each
Fund's performance is contained in its Annual Report to shareholders. A copy
of the Funds' Annual Report (including the report of Ernst & Young LLP) may be
obtained from Adviser Funds, Inc. upon request at no charge.
- --------------------------------------------------------------------------------

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DAF-CHT
<TABLE>
<CAPTION>
U.S. Growth Fund Overseas Equity Fund
Period
2/3/94(1)
Year Ended through Year Ended
10/31/97 10/31/96(2) 10/31/95 10/31/94 10/31/97(3) 10/31/96(2) 10/31/95

<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................ $13.94 $12.50 $10.23 $10.52 $12.32 $11.44 $11.02

Income From Investment Operations:
- ----------------------------------
Net Investment Income (Loss)........................ (0.01)(4) (0.05) (0.05) (0.01) (0.02)(4) (0.06) 0.04
Net Realized and Unrealized Gain (Loss)
From Investments................................ 4.29 1.49 2.32 (0.28) 0.95 0.96 0.41
Total From Investment Operations................ 4.28 1.44 2.27 (0.29) 0.93 0.90 0.45

Less Dividends and Distributions:
- ---------------------------------
Dividends From Net Investment Income................ none none none none (0.44) (0.02) (0.03)
Distributions From Net Realized Gain
on Investments.................................. (1.36) none none none (0.33) none none
Total Dividends and Distributions................... (1.36) none none none (0.77) (0.02) (0.03)

Net Asset Value, End of Period...................... $16.86 $13.94 $12.50 $10.23 $12.48 $12.32 $11.44
- ----------------------------------

Total Return(5)..................................... 33.57% 11.52% 22.19% (2.78%) 8.04% 7.91% 4.22%

- ------------
- ----------------------------------

Ratios and Supplemental Data:
- -----------------------------
Net Assets, End of Period (000's omitted)........... $18,455 $10,003 $4,819 $1,630 $60 $284 $161
Ratio of Expenses to Average Net Assets............. 1.14% 1.48% 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of Expenses to Average Net Assets
Prior to Expense Limitation..................... N/A 1.56% 1.83% 2.60% N/A 2.28% 2.61%
Ratio of Net Investment Loss to Average Net Assets.. (0.08%) (0.45%) (0.59%) (0.27%) (0.15%) (0.19%) 0.40%
Ratio of Net Investment Loss to Average Net Assets
Prior to Expense Limitation..................... N/A (0.53%) (0.92%) (1.37%) N/A (0.97%) (0.71%)
Portfolio Turnover Rate............................. 144% 131% 58% 66% 18% 21% 9%
Average Commission Rate Paid (6).................... $0.0575 $0.519 N/A N/A $0.0529 $0.0448 N/A

</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Overseas Equity Fund New Pacific Fund
Period Period
2/3/94(1) 2/3/94(1)
through Year Ended through
10/31/94 10/31/97 10/31/96(2) 10/31/95 10/31/94

<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................ $10.50 $9.53 $8.77 $10.48 $11.14

Income From Investment Operations:
- ----------------------------------
Net Investment Income (Loss)........................ 0.04 0.02(4) (0.05) (0.01) 0.01
Net Realized and Unrealized Gain (Loss)
From Investments................................ 0.52 (1.96) 0.82 (1.41) (0.67)
Total From Investment Operations................ 0.56 (1.94) 0.77 (1.42) (0.66)

Less Dividends and Distributions:
- ---------------------------------
Dividends From Net Investment Income................ (0.04) (0.15) (0.01) none none
Distributions From Net Realized Gain
on Investments.................................. none none none (0.29) none
Total Dividends and Distributions................... (0.04) (0.15) (0.01) (0.29) none

Net Asset Value, End of Period...................... $11.02 $7.44 $9.53 $8.77 $10.48
- ----------------------------------

Total Return(5)..................................... 5.26% (20.79%) 8.77% (13.65%) (5.98%)

- ------------
- ----------------------------------

Ratios and Supplemental Data:
- -----------------------------
Net Assets, End of Period (000's omitted)........... $63 $250 $119 $62 $47
Ratio of Expenses to Average Net Assets............. 1.50% 1.50% 1.50% 1.50% 1.50%
Ratio of Expenses to Average Net Assets
Prior to Expense Limitation..................... 3.21% 1.56% 2.45% 3.38% 3.31%
Ratio of Net Investment Loss to Average Net Assets.. 0.76% 0.22% (0.09%) (0.16%) 0.23%
Ratio of Net Investment Loss to Average Net Assets
Prior to Expense Limitation..................... (0.95%) 0.16% (1.04%) (2.04%) (1.58%)
Portfolio Turnover Rate............................. 6% 178% 163% 163% 104%
Average Commission Rate Paid (6).................... N/A $0.0079 $0.0118 N/A N/A

</TABLE>

- --------------------
(1) Date of initial public offering; ratios have been annualized.

(2) Beginning May 6, 1996, Delaware Management Company, Inc. became the
investment manager of the Funds. See Restructuring of the Funds in Part B.
(3) Beginning September 15, 1997, Delaware International Advisers Ltd. became
the sub-adviser to Overseas Equity Fund.
(4) The average share outstanding method has been applied for per share
information.
(5) Total return reflects the voluntary fee waivers described under Summary of
Expenses and Management of the Funds.
(6) Computed by dividing the total amount of commission paid by the total
number of shares purchased and sold during the period for which there was a
commission charged.

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(DAF-I)

INVESTMENT OBJECTIVES AND STRATEGIES

U.S. Growth Fund. This Fund's fundamental investment objective is to seek
to maximize capital appreciation by investing in companies of all sizes which
have low dividend yields, strong balance sheets and high expected earnings
growth rates relative to their industry.

The Fund intends to invest primarily in common stocks believed by the
Manager or sub-adviser to have appreciation potential. However, common stock
is not always the class of security that provides the greatest possibility for
appreciation. The Fund may invest up to 35% of its assets in debt securities,
bonds, convertible bonds, preferred stock and convertible preferred stock. The
Fund may also invest up to 10% of its assets in securities rated lower than
Baa by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's
Ratings Group ("S&P") if, in the opinion of the Manager, doing so would
further the Fund's objective. Lower-rated or unrated securities, commonly
referred to as "junk bonds," are more likely to react to developments
affecting market and credit risk than are more highly rated securities, which
react primarily to movements in the general level of interest rates. See Risk
Factors and Special Considerations, below, for a description of the risks
inherent in such securities .

The Fund may invest up to 20% of its assets in foreign securities.

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(DAF-I)

convertible securities, consisting of debt securities or preferred stock that
may be converted into common stock or that carry the right to purchase common
stock. The Fund may invest in securities listed on foreign or domestic
securities exchanges and securities traded in foreign and domestic
over-the-counter markets and may invest in restricted or unlisted securities.
In addition, the Fund's investments may include American Depositary Receipts
(ADRs), American Depositary Shares (ADSs) and securities of foreign investment
funds or trusts to the extent permitted under the Fund's investment
restrictions. See Risk Factors and Special Considerations - Foreign
Investments, below. For a complete list of the Fund's investment restrictions,
see Investment Restrictions in Part B.

The Fund may invest up to 40% of its assets in securities of
companies located in, or governments of, developing countries. For temporary
defensive purposes, the Fund may invest a major portion of its assets in
securities of U.S. issuers. In addition, the Fund may be invested in
short-term debt instruments to meet anticipated day-to-day operating expenses
and liquidity requirements.

The Fund will invest in companies of varying size, measured by
assets, sales and capitalization. The Fund will invest in companies in one or
more of the following Pacific Basin countries:

Australia Pakistan
China Philippines
Hong Kong Singapore
India South Korea
Indonesia Sri Lanka
Japan Taiwan
Malaysia Thailand
New Zealand

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(DAF-I)

* * *

Restricted Securities. U.S. Growth, Overseas Equity and New Pacific
Funds may invest in restricted securities. Restricted securities are
securities with legal or contractual restrictions on resale. Restricted
securities eligible for resale pursuant to Rule 144A that have a readily
available market will not be considered illiquid for purposes of the Funds'
investment restriction concerning illiquid securities.

Risk Factors and Special Considerations

Foreign Investments. Overseas Equity Fund and New Pacific Fund may invest
substantially all of their assets in foreign investments. U.S. Growth Fund may
invest up to 20% of its assets in foreign securities. There are certain risks
involved in investing in foreign securities, including those resulting from
fluctuations in currency exchange rates, devaluation of currencies, future
political or economic developments and the possible imposition of

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(DAF-I)

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(DAF-I)

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(DAF-I)

* * *

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(DAF-I)

CLASSES OF SHARES

The Distributor serves as the national distributor for each Fund.
Shares may be purchased directly by contacting a Fund or its agent or through
authorized investment dealers. All purchases of shares are at net asset value.
There is no front-end or contingent deferred sales charge.

Investment instructions given on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees considering purchasing shares as part of
their retirement program should contact their employer for details.

Shares of each Class are available for purchase only by: (a)
retirement plans introduced by persons not associated with brokers or dealers
that are primarily engaged in the retail securities business and rollover
individual retirement accounts from such plans; (b) tax-exempt employee
benefit plans of the Manager, or its affiliates and securities dealer firms
with a selling agreement with the Distributor; (c) institutional advisory
accounts of the Manager, or its affiliates and those having client
relationships with Delaware Investment Advisers, a division of the Manager, or
its affiliates and their corporate sponsors, as well as subsidiaries and
related employee benefit plans and rollover individual retirement accounts
from such institutional advisory accounts; (d) a bank, trust company and
similar financial institution investing for its own account or for the account
of its trust customers for whom such financial institution is exercising
investment discretion in purchasing shares of the Class, except where the
investment is part of a program that requires payment to the financial
institution of a Rule 12b-1 Plan fee; and (e) registered investment advisers
investing on behalf of clients that consist solely of institutions and high
net-worth individuals having at least $1,000,000 entrusted to the adviser for
investment purposes, but only if the adviser is not affiliated or associated
with a broker or dealer and derives compensation for its services exclusively
from its clients for such advisory services.

Class A Shares, Class B Shares and Class C Shares

In addition to offering Institutional Class shares, each Fund also
offers Class A Shares, Class B Shares and Class C Shares, which are described
in a separate prospectus relating only to those classes. Class A Shares ,
Class B Shares and Class C Shares of each Fund may be purchased through
authorized investment dealers or directly by contacting the relevant Fund or
its Distributor. Class A Shares, Class B Shares and Class C Shares may have
different sales charges and other expenses which may affect performance. To
obtain a prospectus relating to such classes, contact the Distributor by
writing to the address or by calling the phone numbers listed on the back
cover of this Prospectus.

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(DAF-I)

HOW TO BUY SHARES

Each Fund makes it easy to invest by mail, by wire, by exchange and
by arrangement with your investment dealer. In all instances, investors must
qualify to purchase shares of the Classes.

Investing Directly by Mail

1. Initial Purchases--An Investment Application or, in the case of a
retirement plan account, an appropriate retirement plan application, must be
completed, signed and sent with a check payable to the specific Fund and Class
selected, to Delaware Investments at 1818 Market Street, Philadelphia, PA
19103.

Investing Directly by Wire
You may purchase shares by requesting your bank to transmit funds by
wire to CoreStates Bank, N.A., ABA #031000011, account number 1412893401
(include your name(s) and your account number for the Fund and Class in which
you are investing).

1. Initial Purchases--Before you invest, telephone the Client Services
Department at 800-828-5052 to get an account number. If you do not call first,
it may delay processing your investment. In addition, you must promptly send
your Investment Application or, in the case of a retirement account, an
appropriate retirement plan application, for the specific Fund and Class
selected, to Delaware Investments at 1818 Market Street, Philadelphia, PA
19103.

2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You must advise your
Client Services Representative by telephone at 800-828- 5052 prior to sending
your wire.

Investing by Exchange

If you have an investment in another mutual fund in Delaware
Investments and you qualify to purchase shares of a Class, you may write and
authorize an exchange of part or all of your investment into shares of the
Fund. However, Class B Shares and Class C Shares of each Fund and Class B
Shares and Class C Shares of the other funds available from Delaware
Investments offering such a class of shares may not be exchanged into the
Classes. If you wish to open an account by exchange, call your Client Services
Representative at 800-828-5052 for more information. See Redemption and
Exchange for more complete information concerning your exchange privileges.

Investing through Your Investment Dealer
You can make a purchase of shares of the Funds through most
investment dealers who, as part of the service they provide, must transmit
orders promptly to a Fund. They may charge for this service.

Purchase Price and Effective Date
The purchase price (net asset value) is determined as of the close of
regular trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern
time) on days when the Exchange is open.

The effective date of a purchase is the date the order is received by
the Fund in which the shares are being purchased, its agent or designee. The
effective date of a direct purchase is the day your wire, electronic transfer
or

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(DAF-I)

check is received, unless it is received after the time the share price is
determined, as noted above. Purchase orders received after such time will be
effective the next business day.

The Conditions of Your Purchase

Each Fund reserves the right to reject any purchase order. If a
purchase is canceled because your check is returned unpaid, you are
responsible for any loss incurred. Each Fund can redeem shares from your
account(s) to reimburse itself for any loss, and you may be restricted from
making future purchases in any of the funds in Delaware Investments. Each Fund
reserves the right to reject purchases by third-party checks or checks that
are not drawn on a domestic branch of a United States financial institution.
If a check drawn on a foreign financial institution is accepted, you may be
subject to additional bank charges for clearance and currency conversion.

Each Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under $250 as a result of
redemptions.

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(DAF-I)

REDEMPTION AND EXCHANGE

Redemption and exchange requests made on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees should therefore contact their employer
for details.

Your shares will be redeemed or exchanged at a price equal to the net
asset value next determined after the Fund receives your request in good
order. For example, redemption and exchange requests received in good order
after the time the net asset value of shares is determined will be processed
on the next business day. See Purchase Price and Effective Date under How to
Buy Shares. Except as otherwise noted below, for a redemption request to be in
"good order," you must provide your Class account number, account
registration, and the total number of shares or dollar amount of the
transaction. With regard to exchanges, you must also provide the name of the
fund in which you want to invest the proceeds. Exchange instructions and
redemption requests must be signed by the record owner(s) exactly as the
shares are registered. You may also request a redemption or an exchange by
calling a Fund at 800-828-5052. Redemption proceeds will be distributed
promptly, as described below, but not later than seven days after receipt of a
redemption request.

Each Fund will process written and telephone redemption requests to
the extent that the purchase orders for the shares being redeemed have already
settled. Each Fund will honor written redemption requests as to shares for
which a check was tendered as payment, but neither Fund will mail or wire the
proceeds until it is reasonably satisfied that the check has cleared, which
may take up to 15 days from the purchase date. You can avoid this potential
delay if you purchase shares by wiring Federal Funds. Each Fund reserves the
right to reject a written or telephone redemption request or delay payment of
redemption proceeds if there has been a recent change to the shareholder's
address of record.

Shares of a Class may be exchanged into any other Delaware
Investments mutual fund provided: (1) the investment satisfies the eligibility
and other requirements set forth in the prospectus of the fund being acquired,
including the payment of any applicable front-end sales charge; and (2) the
shares of the fund being acquired are in a state where that fund is
registered. If exchanges are made into other shares that are eligible for
purchase only by those permitted to purchase shares of the Classes, such
exchange will be exchanged at net asset value. Shares of the Classes may not
be exchanged into Class B Shares or Class C Shares of any of the funds
available from Delaware Investments. A Fund may suspend, terminate, or amend
the terms of the exchange privilege upon 60 days' written notice to
shareholders.

Various redemption and exchange methods are outlined below. No fee is
charged by the Funds or the Distributor for redeeming or exchanging your
shares, although in the case of an exchange, a sales charge may apply. You may
also have your investment dealer arrange to have your shares redeemed or
exchanged. Your investment dealer may charge for this service.

Written Redemption and Exchange

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(DAF-I)

You can write to a Fund at 1818 Market Street, Philadelphia, PA 19103
to redeem some or all of your shares or to request an exchange of any or all
your shares into another mutual fund available from Delaware Investments,
subject to the same conditions and limitations as other exchanges noted above.
The request must be signed by all owners of the account or your investment
dealer of record.

For redemptions of more than $50,000, or when the proceeds are not
sent to the shareholder(s) at the address of record, each Fund requires a
signature by all owners of the account and may require a signature guarantee.
Each signature guarantee must be supplied by an eligible guarantor
institution. Each Fund reserves the right to reject a signature guarantee
supplied by an eligible institution based on its creditworthiness. A Fund may
require further documentation from corporations, executors, retirement plans,
administrators, trustees or guardians.

Payment is normally mailed the next business day after receipt of
your redemption request. Certificates are issued for shares only if you submit
a specific request. If your shares are in certificate form, the certificate(s)
must accompany your request and also be in good order.

You also may submit your written request for redemption or exchange by
facsimile transmission at the following number: 215-255-8864.

Telephone Redemption and Exchange

To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge)
for you. If you choose to have your shares in certificate form, you may redeem
or exchange only by written request and you must return your certificate(s).

The Telephone Redemption - Check to Your Address of Record service
and the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in which you are investing
in writing that you do not wish to have such services available with respect
to your account. Each Fund reserves the right to modify, terminate or suspend
these procedures upon 60 days' written notice to shareholders. It may be
difficult to reach a Fund by telephone during periods when market or economic
conditions lead to an unusually large volume of telephone requests.

Neither the Funds nor their Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, a Fund will follow
reasonable procedures to confirm that instructions communicated by telephone
are genuine (including verification of a form of personal identification) as,
if it does not, the Fund or the Transfer Agent may be liable for any losses
due to unauthorized or fraudulent transactions. A written confirmation will be
provided for all purchase, exchange and redemption transactions initiated by
telephone. By exchanging shares by telephone, you are acknowledging prior
receipt of a prospectus for the fund into which your shares are being
exchanged.

Telephone Redemption-Check to Your Address of Record
You or your investment dealer of record can have redemption proceeds
of $50,000 or less mailed to you at your address of record. Checks will be
payable to the shareholder(s) of record. Payment is normally mailed the next
business day after receipt of the redemption request.

-19-

<PAGE>

(DAF-I)

Telephone Redemption-Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must submit a written authorization and you may need to have your
signature guaranteed. For your protection, your authorization must be on file.
If you request a wire, your funds will normally be sent the next business day.
If you ask for a check, it will normally be mailed the next business day after
receipt of your redemption request to your predesignated bank account. There
are no fees for this redemption method, but the mail time may delay getting
funds into your bank account. Simply call your Client Services Representative
prior to the time the net asset value is determined, as noted above.

Telephone Exchange

You or your investment dealer of record can exchange shares into any
fund available from Delaware Investments under the same registration. As with
the written exchange service, telephone exchanges are subject to the same
conditions and limitations as other exchanges noted above. Telephone exchanges
may be subject to limitations as to amounts or frequency.

-20-

<PAGE>

(DAF-I)

DIVIDENDS AND DISTRIBUTIONS

Each Fund declares dividends from net investment income and usually
distribute such accrued dividends to shareholders at least annually. All
capital gains, if any, are distributed annually, usually in December. When a
capital gain dividend is declared, the net asset value per share is reduced by
the amount of the dividend. Investors considering buying shares of a Fund just
prior to a record date for a taxable dividend or capital gain distribution
should be aware that, regardless of whether the price of the Fund shares to be
purchased reflects the amount of the forthcoming dividend or distribution
payment, any such payment will be a taxable dividend or distribution payment.

Both dividends and distributions, if any, are automatically
reinvested in your account at net asset value.

-21-

<PAGE>

(DAF-I)

TAXES

On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping changes in
the Internal Revenue Code (the "Code"). Because many of these changes are
complex, and only indirectly affect a Fund and its distributions to you, they
are discussed in Part B. Changes in the treatment of capital gains, however,
are discussed in this section.

Each Fund intends to distribute substantially all of its net
investment income and net capital gains, if any. Dividends from net investment
income or net short-term capital gains will be taxable to those investors who
are subject to income taxes as ordinary income, whether received in cash or in
additional shares. For corporate investors, dividends from net investment
income will generally qualify in part for the corporate dividends-received
deduction. The portion of dividends paid by a Fund that so qualifies will be
designated each year in a notice from Adviser Funds, Inc. to the Fund's
shareholders. For the fiscal year ended October 31, 1997, 0%, 0% and 0% of
U.S. Growth Fund's, Overseas Equity Fund's and New Pacific Fund's dividends
from net investment income qualified for the dividends-received deduction to
corporations.

The Treatment of Capital Gain Distributions under the Taxpayer Relief
Act of 1997

The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors who are
in the 28% or higher federal income tax brackets, these gains will be taxed at
a maximum rate of 20%. For investors who are in the 15% federal income tax
bracket, these gains will be taxed at a maximum rate of 10%. Capital gain
distributions will qualify for these new maximum tax rates, depending on when
a Fund's securities were sold and how long they were held by a Fund before
they were sold. Investors who want more information on holding periods and
other qualifying rules relating to these new rates should review the expanded
discussion in Part B, or should contact their own tax advisers.

Adviser Funds, Inc. will advise you in its annual information reporting
at calendar year end of the amount of its capital gain distributions which
will qualify for these maximum federal tax rates.

-22-

<PAGE>

(DAF-I)

for operational reasons, may not be paid to the shareholder until the
following January, will be treated for tax purposes as if paid by the Fund and
received by the shareholder on December 31 of the year declared.

Certain income received by Overseas Equity Fund and New Pacific Fund
may be subject to foreign taxes. If more than 50% of the value of the Fund's
total assets at the close of any taxable year consists of securities of
foreign corporations, the Fund may elect to treat any foreign taxes paid by it
as paid by its shareholders. If a Fund makes this election, its shareholders
will generally be required to include in income their respective pro-rata
positions in computing their taxable income or, alternatively, to claim
foreign tax credits (subject, in either case, to certain limitations). Each
year that a Fund makes such an election, it will report to its shareholders
the amount per share of foreign taxes it has elected to have treated as paid
by its shareholders.

See Dividends, Distributions and Taxes in Part B for additional
information on tax matters relating to each Fund and its shareholders.

-23-

<PAGE>

(DAF-I)

CALCULATION OF NET ASSET VALUE PER SHARE

The purchase and redemption price of a Class is the NAV per share of
the Class next computed after the order is received. The NAV is computed as of
the close of regular trading on the New York Stock Exchange (ordinarily, 4
p.m., Eastern time) on days when the Exchange is open.

The net asset values of all outstanding shares of each class of a
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in the Fund represented by the value of shares
of that class. All income earned and expenses incurred by a Fund will be borne
on a pro-rata basis by each outstanding share of a class, based on each class'
percentage in the Fund represented by the value of shares of such classes,
except that the Classes will not incur any of the expenses under Adviser
Funds, Inc.'s 12b-1 Plans and each Fund's Class A Shares, Class B Shares and
Class C Shares alone will bear the 12b-1 Plan fees payable under their
respective 12b-1 Plan. Due to the specific distribution expenses and other
costs that will be allocable to each class, the net asset value of and
dividends paid to each class of a Fund may vary.

-24-

<PAGE>

(DAF-I)

MANAGEMENT OF THE FUNDS

Directors
The business and affairs of Adviser Funds, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding the directors and officers.

Investment Manager
Delaware Management Company, Inc. (the "Manager") furnishes investment
management services to each Fund.

Under the Investment Management Agreements, the Manager receives
advisory fees monthly based upon each Fund's average daily net assets at the
following annual rates:

U.S. Growth Fund 0.70%
Overseas Equity Fund 1.00%
New Pacific Fund 0.80%

The directors of Adviser Funds, Inc. annually review fees paid to the
Manager. The Manager elected voluntarily to waive that portion, if any, of its
investment advisory fees and to pay a Fund's expenses to the extent necessary
to ensure that a Fund's expenses do not exceed the amounts noted under Summary
of Expenses.

-25-

<PAGE>

(DAF-I)

The advisory fees for Overseas Equity Fund and New Pacific Fund,
while higher than the advisory fees paid by other mutual funds in general, are
comparable to fees paid by other mutual funds with similar objectives and
policies.

For the fiscal year ended October 31, 1997, the following investment
management fees based on a percentage of a Fund's average daily net assets
were incurred and paid and reflect the voluntary waiver described above:

Incurred Paid
U.S. Growth Fund 0.70% 0.70%
Overseas Equity Fund* 1.10% 1.10%
New Pacific Fund 0.74% 0.74%

-26-

<PAGE>

(DAF-I)

Delaware International Advisers Ltd., Sub-Adviser to the Manager with
respect to management of the assets of the Overseas Equity Fund, Third Floor,
80 Cheapside, London, England EC2V 6EE, is an affiliate of the Manager.
Delaware International Advisers Ltd. began serving as a Sub-Adviser on
September 15, 1997. The Sub- Advisory Agreement between Delaware International
Advisers Ltd. and the Manager was approved by shareholders of Overseas Equity
Fund at a special meeting held on November 18, 1997. Delaware International
Advisers Ltd. provides investment advisory services to certain other funds
available from Delaware Investments and to institutional accounts, primarily
retirement plans and endowment funds. As of October 31, 1997, Delaware
International Advisers Ltd. had assets in excess of $7 billion. Also effective
September 15, 1997, Clive A. Gillmore and Robert Akester assumed primary
responsibility for making day-to-day investment decisions for Overseas Equity
Fund. A graduate of the University of Warwick and having begun his career at
Legal and General Investment Management, Mr. Gillmore joined Delaware
Investments in 1990 after eight years of investment experience. His most
recent position prior to joining Delaware Investments was as a Pacific Basin
equity analyst and senior portfolio manager for Hill Samuel Investment
Advisers Ltd. Mr. Gillmore completed the London Business School Investment
program. Prior to joining Delaware in 1996 as a Senior Portfolio Manager, Mr.
Akester, who began his investment career in 1969, was most recently a Director
of Hill Samuel Investment Advisers Ltd., which he joined in 1985. His prior
experience included working as a Senior Analyst and head of the South-East
Asian Research team at James Capel, and as a Fund Manager at Prudential
Assurance Co., Ltd. Mr. Akester holds a BS in Statistics and Economics from
University College, London and is an associate of the Institute of Actuaries,
with a certificate in Finance and Investment.

In making investment decisions for Overseas Equity Fund, Mr. Gillmore
and Mr. Akester regularly consult with an international equity team of nine
members, five of whom research the Pacific Basin and four of whom research the
European Markets. Mr. Gillmore and Mr. Akester also regularly consult with David
G. Tilles. Mr. Tilles, who is Chief Investment Officer for Delaware
International, is a graduate of the University of Warwick with a BS in
management sciences. Before joining Delaware Investments in 1990, he was Chief
Investment Officer of Hill Samuel Investment Advisers Ltd. He is a member of the
Institute of Investment Management & Research and the Operational Research
Society.

AIB Govett, Inc., Sub-Adviser to the Manager with respect to management
of the assets of New Pacific Fund, 250 Montgomery Street, Suite 1200, San
Francisco, California 94104, provides investment advice to investment trusts,
investment companies, mutual funds and pension funds and had assets under
management, as of October 31, 1997, of $14.2 billion. Effective as of November
12, 1997, Jane Pickard assumed primary responsibility for making investment
decisions for New Pacific Fund. Ms. Pickard graduated in law from Endinburgh
University. She joined Barclays de Zoete Wedd Securities Limited in 1991, where
she initially worked as a specialist in structured debt products moving into the
Pacific Rim equity division in 1992. She remained there until 1995 when she
moved to IAI International where she had responsibility for Pacific Region
investment for U.S. institutional and retail funds. Ms. Pickard joined AIB
Govett Asset Management, an affiliate of AIB Govett, Inc., in 1996 and
concentrates on investments in the Pacific region. As a result of a corporate
reorganization, sub-advisory services were transferred from John Govett & Co.,
Inc. to AIB Govett, Inc., although there was no actual change in control.

-27-

<PAGE>

(DAF-I)

Fund Sub-Adviser Annual Fee
---- ----------- ----------
<S> <C> <C> <C>
U.S. Growth Fund Lynch & Mayer, Inc. 0.40% of average
daily net assets

Overseas Equity Fund Delaware International Advisers Ltd. 80% of the fee paid
to the Manager

New Pacific Fund AIB Govett, Inc. 0.50% of average
daily net assets
</TABLE>

Performance Information
From time to time, the each Fund may quote total return performance
or yield (if applicable) of its Class in advertising and other types of
literature.

Total return will be based on a hypothetical $1,000 investment,
reflecting the reinvestment of all distributions at net asset value. Each
presentation will include the average annual total return for one-, five- or
ten-year periods, and life-of-fund period, as applicable. Each Fund may also
advertise aggregate and average total return information concerning a Class
over additional periods of time.

The current yield will be calculated by dividing the annualized net
investment income earned by the Class during a recent 30-day period by the net
asset value per share on the last day of the period. The yield formula
provides for semi-annual compounding which assumes that net investment income
is earned and reinvested at a constant rate and annualized at the end of a
six-month period.

Because securities prices fluctuate, investment results of the
Classes will fluctuate over time . Past performance should not be considered
as a representation of future results.

Financial Information about the Funds

-28-

<PAGE>

(DAF-I)

Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
each Fund's investments and performance. Adviser Funds, Inc.'s fiscal year
ends on October 31.

Distribution and Service

The Distributor, Delaware Distributors, L.P., serves as the national
distributor for each Fund under separate Distribution Agreements dated
September 25, 1995. The Distributor bears all of the costs of promotion and
distribution.

The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for each Fund
under separate Agreements dated September 25, 1995. The Transfer Agent also
provides accounting services to the Funds pursuant to the terms of a separate
Fund Accounting Agreement. Certain recordkeeping and other shareholder
services that otherwise would be performed by the Transfer Agent may be
performed by certain other entities and the Transfer Agent may elect to enter
into an agreement to pay such other entities for those services. In addition,
participant account maintenance fees may be assessed for certain recordkeeping
provided as part of retirement plan and administration service packages. These
fees are based on the number of participants in the plan and the various
services selected. Fees will be quoted upon request and are subject to change.

The directors of Adviser Funds, Inc. annually review fees paid to the
Distributor and the Transfer Agent. The Distributor and the Transfer Agent are
also indirect, wholly owned subsidiaries of DMH and Lincoln National.

U.S. Growth Fund Institutional Class 1.14%
Overseas Equity Fund Institutional Class 1.50%
New Pacific Fund Institutional Class 1.50%

The expense ratio of each Class reflects the fee waiver and payments. See
Summary of Expenses for current fee waivers and payments.

-29-

<PAGE>

(DAF-I)

Other Shareholder Matters

All shares of Adviser Funds, Inc. have equal voting rights and are
entitled to one vote per share with proportional voting for fractional shares.
As permitted by Maryland law, there will normally be no meetings of shareholders
for the purpose of electing directors unless and until such time as fewer than a
majority of the directors holding office have been elected by shareholders. At
that time, the directors in office will call a shareholders meeting for election
of directors. Shareholders have certain rights, including the right to call a
meeting upon a vote of 10% of Adviser Funds, Inc.'s outstanding shares for the
purpose of voting on the removal of one or more directors or to transact any
other business. The shares do not have cumulative voting rights. Accordingly,
the holders of a majority of the shares voting for the election of directors can
elect all the directors. Shares of Adviser Funds, Inc., when issued, will be
fully paid and non-assessable.

Each Fund also offers Class A Shares, Class B Shares and Class C
Shares. Shares of those classes represent proportionate interests in the
assets of the respective Fund and have the same voting and other rights and
preferences as the Classes, except that shares of the Classes are not subject
to, and may not vote on matters affecting, the Distribution Plans under Rule
12b-1 relating to Class A Shares, Class B Shares and Class C Shares of the
Funds.

General Information

-30-

<PAGE>

(DAF-I)

IMPLEMENTATION OF INVESTMENT OBJECTIVES AND POLICIES

In attempting to achieve their investment objectives and policies,
the Funds may employ, among others, one or more of the strategies set forth
below.

Repurchase Agreements

-31-

<PAGE>

(DAF-I)

If bankruptcy proceedings are commenced with respect to the seller,
realization upon the collateral by the Fund may be delayed or limited.

-32-

<PAGE>

(DAF-I)

monitor such transactions and will attempt to minimize any adverse effects on
both the Funds and the Foundation Funds resulting from such transactions.

-33-

<PAGE>

(DAF-I)

-34-

<PAGE>

(DAF-I)

Special Risks of Strategic Transactions. Participation in the options
or futures markets and in currency exchange transactions involves investment
risks and transaction costs to which a Fund would not be subject absent the
use of these Strategic Transactions. If the Manager's and/or sub-adviser's
prediction of movements in the direction of the securities, foreign currency
and interest rate markets are inaccurate, the adverse consequences to a Fund
may leave the Fund in a worse position than if such Strategic Transactions
were not used. Risks inherent in the use of options, foreign currency and
futures contracts and options on futures contracts include (1) dependence on
the Manager's and/or sub-adviser's ability to predict current movements in the
direction of interest rates, securities prices and currency markets; (2)
imperfect correlation between the price of options and futures contracts and
options thereon and movements in the prices of securities being hedged; (3)
the fact that skills need to use these strategies are different from those
needed to select Fund securities; (4) the possible absence of a liquid
secondary market for any particular instrument at any time; (5) the possible
need to defer closing out certain hedged positions to avoid adverse tax
consequences; and (6) the possible inability of a Fund to purchase or sell a
Fund security at a time that otherwise would be favorable for it to do so, or
the possible need for a Fund to sell a Fund security at a disadvantageous
time, due to the need for a Fund to maintain "cover" or to segregate
securities in connection with Strategic Transactions. Although the use of
futures contracts and options transactions for hedging should tend to minimize
the risk of loss due to a decline in the value of the hedged position, at the
same time they tend to limit any potential gain which might result from an
increase in value of such position. Finally, the daily variation margin
requirements for futures contracts would create a greater ongoing potential
financial risk than would purchase of options, where the exposure is limited
to the cost of the initial premium. Losses resulting from the use of Strategic
Transactions would reduce net asset value, and possibly income, and such
losses can be greater than if the Strategic Transactions had not been
utilized. The Strategic Transactions that the Funds may use and some of their
risks are described more fully in Part B.

Each Fund's ability to engage in Strategic Transactions is limited by
the requirements of the Code for qualification as a regulated investment
company. See Part B.

-35-

<PAGE>

(DAF-I)

For more information contact Delaware
Investments at 800-828-5052.

INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103

NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103

SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103

INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103

CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245

- ---------------------------------------------------------

DELAWARE GROUP ADVISER FUNDS, INC.

- ---------------------------------------------------------

U.S. GROWTH FUND
- ---------------------------------------------------------

OVERSEAS EQUITY FUND

(formerly World Growth Fund)

- ---------------------------------------------------------

NEW PACIFIC FUND
- ---------------------------------------------------------

INSTITUTIONAL CLASSES
- ---------------------------------------------------------

P R O S P E C T U S

- ---------------------------------------------------------

FEBRUARY 28, 1998

[GRAPHIC OMITTED]

-36-

<PAGE>

(DAF-SAI/PART B)

- -------------------------------------------------------------------------------

PART B--STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 28, 1998
- -------------------------------------------------------------------------------
DELAWARE GROUP ADVISER FUNDS, INC.
- -------------------------------------------------------------------------------
U.S. GROWTH FUND

OVERSEAS EQUITY FUND (formerly World Growth Fund)

NEW PACIFIC FUND
- -------------------------------------------------------------------------------
1818 Market Street
Philadelphia, PA 19103
- -------------------------------------------------------------------------------

For more information about the Institutional Class shares of each Fund:
800-828-5052

For a Prospectus and Performance information for Class A Shares, Class B
Shares and Class C Shares of each Fund: 800-523-4640

For Information on Existing Accounts of Class A Shares, Class B Shares and
Class C Shares of each Fund:
(SHAREHOLDERS ONLY) 800-523-1918

Dealer Services: (BROKER/DEALERS ONLY) 800-362-7500

- -------------------------------------------------------------------------------
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
Cover Page
- -------------------------------------------------------------------------------
Investment Objectives and Policies
- -------------------------------------------------------------------------------
Investment Restrictions
- -------------------------------------------------------------------------------
Performance Information
- -------------------------------------------------------------------------------
Trading Practices and Brokerage
- -------------------------------------------------------------------------------
Purchasing Shares
- -------------------------------------------------------------------------------
Investment Plans
- -------------------------------------------------------------------------------
Determining Offering Price and Net Asset Value
- -------------------------------------------------------------------------------
Redemption and Repurchase
- -------------------------------------------------------------------------------
Dividends, Distributions and Taxes
- -------------------------------------------------------------------------------
Investment Management Agreements
- -------------------------------------------------------------------------------
Officers and Directors
- -------------------------------------------------------------------------------
Exchange Privilege
- -------------------------------------------------------------------------------
General Information
- -------------------------------------------------------------------------------

Appendix A - Description of Security Ratings

- -------------------------------------------------------------------------------
Financial Statements
- -------------------------------------------------------------------------------

-1-

<PAGE>

(DAF-SAI/PART B)

Delaware Group Adviser Funds, Inc. ("Adviser Funds, Inc.") is a
professionally-managed mutual fund of the series type which currently offers
three series of shares: the U.S. Growth Fund series, the Overseas Equity Fund
series (formerly World Growth series) and the New Pacific Fund series (each a
"Fund" and collectively, the "Funds").

This Statement of Additional Information ("Part B" of Adviser Funds,
Inc.'s registration statement) describes each of the Funds, except where
noted.

Each Fund of Adviser Funds, Inc. offers three retail classes: U.S.
Growth Fund A Class, Overseas Equity Fund A Class and New Pacific Fund A Class
(the "Class A Shares"); U.S. Growth Fund B Class, Overseas Equity Fund B Class
and New Pacific Fund B Class (the "Class B Shares"); and U.S. Growth Fund C
Class, Overseas Equity Fund C Class and New Pacific Fund C Class (the "Class C
Shares"). Class A Shares, Class B Shares and Class C Shares are collectively
referred to as the "Fund Classes." Each Class also offers an institutional
class: U.S. Growth Fund Institutional Class, Overseas Equity Fund
Institutional Class and New Pacific Fund Institutional Class (collectively,
the "Institutional Classes"). Each class may be referred to individually as a
"Class" and collectively as the "Classes."

Class B Shares, Class C Shares and Institutional Class shares of each
Fund may be purchased at a price equal to the next determined net asset value
per share. Class A Shares may be purchased at the public offering price, which
is equal to the next determined net asset value per share, plus a front-end
sales charge. Class A Shares are subject to a maximum front-end sales charge
of 4.75% and annual 12b-1 Plan expenses of up to 0.35% (currently no more than
0.30%). Class B Shares are subject to a contingent deferred sales charge
("CDSC") which may be imposed on redemptions made within six years of purchase
and annual 12b-1 Plan expenses of up to 1%, which are assessed against Class B
Shares for approximately eight years after purchase. See Automatic Conversion
of Class B Shares under Classes of Shares in the Fund Classes' Prospectus.
Class C Shares are subject to a CDSC which may be imposed on redemptions made
within 12 months of purchase and annual 12b-1 Plan expenses of up to 1%, which
are assessed against Class C Shares for the life of the investment.

This Part B supplements the information contained in the current
Prospectus for the Fund Classes and the current Prospectus for the
Institutional Classes of U.S. Growth Fund, Overseas Equity Fund and New
Pacific Fund, each dated February 28, 1998, as they may be amended from time
to time. Part B should be read in conjunction with the Classes' Prospectuses.
Part B is not itself a prospectus but is, in its entirety, incorporated by
reference into each Classes' Prospectuses. A Prospectus relating to the Fund
Classes and a Prospectus relating to the Institutional Classes may be obtained
by writing or calling your investment dealer or by contacting Adviser Funds,
Inc.'s national distributor, Delaware Distributors, L.P. (the "Distributor"),
1818 Market Street, Philadelphia, PA 19103.

All references to "shares" in this Part B refer to all Classes of
shares of the Funds, except where noted.

-2-

<PAGE>

(DAF-SAI/PART B)

INVESTMENT OBJECTIVES AND POLICIES

The Prospectuses discuss the Funds' investment objectives and the
policies followed to achieve those objectives. The following discussion
supplements the description of the Funds' investment objectives and policies
in the Prospectuses. Capitalized terms that are not defined herein are defined
in the Funds' Prospectuses.

Lower-Rated Debt Securities

U.S. Growth Fund may purchase securities that are rated lower than
Baa by Moody's Investors Service, Inc. ("Moody's") or lower than BBB by
Standard & Poor's Ratings Group ("S&P"). These securities are often considered
to be speculative and involve significantly higher risk of default on the
payment of principal and interest or are more likely to experience significant
price fluctuation due to changes in the issuer's creditworthiness. Market
prices of these securities may fluctuate more than higher-rated debt
securities and may decline significantly in periods of general economic
difficulty which may follow periods of rising interest rates. While the market
for high yield corporate debt securities has been in existence for many years
and has weathered previous economic downturns, the market in recent years has
experienced a dramatic increase in the large-scale use of such securities to
fund highly leveraged corporate acquisitions and restructurings. Accordingly,
past experience may not provide an accurate indication of future performance
of the high yield bond market, especially during periods of economic
recession. See Appendix A - Description of Security Ratings in this Part B.

The market for lower-rated securities may be less active than that
for higher-rated securities, which can adversely affect the prices at which
these securities can be sold. If market quotations are not available, these
securities will be valued in accordance with procedures established by the
Board of Directors, including the use of outside pricing services. Judgment
plays a greater role in valuing high yield corporate debt securities than is
the case for securities for which more external sources for quotations and
last-sale information are available. Adverse publicity and changing investor
perceptions may affect the ability of outside pricing services used by the
Fund to value its portfolio securities and the Fund's ability to dispose of
these lower-rated debt securities.

Since the risk of default is higher for lower-quality securities, the
Manager's and/or sub-adviser's research and credit analysis is an integral
part of managing any securities of this type held by the Fund. In considering
investments for the Fund, the Manager and/or sub-adviser will attempt to
identify those issuers of high-yielding securities whose financial condition
is adequate to meet future obligations, has improved, or is expected to
improve in the future. The Manager's and/or sub-adviser's analysis focuses on
relative values based on such factors as interest or dividend coverage, asset
coverage, earnings prospects, and the experience and managerial strength of
the issuer. There can be no assurance that such analysis will prove accurate.

The Fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise exercise its rights as security holder to seek
to protect the interests of security holders if it determines this to be in
the best interest of shareholders.

Mortgage-Backed Securities
Each Fund may invest in mortgage-related securities including those
representing an undivided ownership interest in a pool of mortgages.

Government National Mortgage Association Certificates. Certificates
issued by the Government National Mortgage Association ("GNMA") are
mortgage-backed securities representing part ownership of a pool of mortgage
loans, which are issued by lenders such as mortgage bankers, commercial banks
and savings and loan associations, and are either insured by the Federal
Housing Administration or guaranteed by the Veterans Administration. A pool of
these mortgages is assembled and, after being approved by GNMA, is offered to

-3-

<PAGE>

(DAF-SAI/PART B)

investors through securities dealers. The timely payment of interest and
principal on each mortgage is guaranteed by GNMA and backed by the full faith
and credit of the U.S. government.

Principal is paid back monthly by the borrower over the term of the
loan. Investment of prepayments may occur at higher or lower rates than the
anticipated yield on the certificates. Due to the prepayment feature and the
need to reinvest prepayments of principal at current market rates, GNMA
certificates can be less effective than typical bonds of similar maturities at
"locking in" yields during periods of declining interest rates. GNMA
certificates typically appreciate or decline in market value during periods of
declining or rising interest rates, respectively. Due to the regular repayment
of principal and the prepayment feature, the effective maturities of mortgage
pass-through securities are shorter than stated maturities, will vary based on
market conditions and cannot be predicted in advance. The effective maturities
of newly-issued GNMA certificates backed by relatively new loans at or near
the prevailing interest rates are generally assumed to range between
approximately nine and 12 years.

FNMA and FHLMC Mortgage-Backed Obligations. The Federal National
Mortgage Association ("FNMA"), a federally chartered and privately-owned
corporation, issues pass-through securities representing interests in a pool
of conventional mortgage loans. FNMA guarantees the timely payment of
principal and interest but this guarantee is not backed by the full faith and
credit of the U.S. government. The Federal Home Loan Mortgage Corporation
("FHLMC"), a corporate instrumentality of the U.S. government, issues
participation certificates which represent an interest in a pool of
conventional mortgage loans. FHLMC guarantees the timely payment of interest
and the ultimate collection of principal, and maintains reserves to protect
holders against losses due to default, but the certificates are not backed by
the full faith and credit of the U.S. government.

As is the case with GNMA certificates, the actual maturity of and
realized yield on particular FNMA and FHLMC pass-through securities will vary
based on the prepayments of the underlying pool of mortgages and cannot be
predicted.

Foreign Investments

Overseas Equity Fund and New Pacific Fund may invest substantially
all of their assets in foreign investments, and U.S. Growth Fund may invest
20% of its assets in foreign securities. Foreign investments can involve
significant risks in addition to the risks inherent in U.S. investments. The
value of securities denominated in or indexed to foreign currencies, and of
dividends and interest from such securities, can change significantly when
foreign currencies strengthen or weaken relative to the U.S. dollar. Foreign
securities markets generally have less trading volume and less liquidity than
U.S. markets, and prices on some foreign markets can be highly volatile. Many
foreign countries lack uniform accounting and disclosure standards comparable
to those applicable to U.S. companies, and it may be more difficult to obtain
reliable information regarding an issuer's financial condition and operations.
In addition, the costs of foreign investing, including withholding taxes,
brokerage commissions, and custodial costs, are generally higher than for U.S.
investments.

Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers, brokers, and securities markets may be subject to
less government supervision. Foreign security trading practices, including
those involving the release of assets in advance of payment, may involve
increased risks in the event of a failed trade or the insolvency of a
broker-dealer, and may involve substantial delays. It may also be difficult to
enforce legal rights in foreign countries.

Investing abroad also involves different political and economic
risks. Foreign investments may be affected by actions of foreign governments
adverse to the interests of U.S. investors, including the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention. There
may be a greater

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(DAF-SAI/PART B)

possibility of default by foreign governments or foreign government-sponsored
enterprises. Investments in foreign countries also involve a risk of local
political, economic, or social instability, military action or unrest, or
adverse diplomatic developments. There is no assurance that the Manager or
sub-adviser will be able to anticipate or counter these potential events.

The considerations noted above generally are intensified for
investments in developing countries. Developing countries may have relatively
unstable governments, economies based on only a few industries, and securities
markets that trade a small number of securities.

The Funds may invest in foreign securities that impose restrictions
on transfer within the United States or to U.S. persons. Although securities
subject to transfer restrictions may be marketable abroad, they may be less
liquid than foreign securities of the same class that are not subject to such
restrictions.

American Depositary Receipts and European Depositary Receipts ("ADRs"
and "EDRs") are certificates evidencing ownership of shares of a foreign-based
issuer held in trust by a bank or similar financial institution. Designed for
use in U.S. and European securities markets, respectively, ADRs and EDRs are
alternatives to the purchase of the underlying securities in their national
markets and currencies.

Mortgage Dollar Rolls
Each Fund may enter into mortgage "dollar rolls" in which the Fund
sells mortgage-backed securities for delivery in the current month and
simultaneously contracts to repurchase substantially similar (same type,
coupon and maturity) securities on a specified future date. Dollar roll
transactions consist of the sale by a Fund of mortgage-backed securities,
together with a commitment to purchase similar, but not necessarily identical,
securities at a future date. Any difference between the sale price and the
purchase price is netted against the interest income foregone on the
securities to arrive at an implied borrowing (reverse repurchase) rate.
Alternatively, the sale and purchase transactions which constitute the dollar
roll can be executed at the same price, with the Fund being paid a fee as
consideration for entering into the commitment to purchase. Dollar rolls may
be renewed prior to cash settlement and initially may involve only a firm
commitment agreement by the Fund to buy a security. If the broker/dealer to
whom the Fund sells the security becomes insolvent, the Fund's right to
purchase or repurchase the security may be restricted; the value of the
security may change adversely over the term of the dollar roll; the security
that the Fund is required to repurchase may be worth less than the security
that the Fund originally held, and the return earned by the Fund with the
proceeds of a dollar roll may not exceed transaction costs. The Fund will
place U.S. government or other liquid, high quality assets in a segregated
account in an amount sufficient to cover its repurchase obligation.

Options on Foreign and U.S. Currencies and Securities
The Funds may purchase and sell (write) put and call options on
securities, although the present intent is to write only covered call options.
These covered call options must remain covered so long as a Fund is obligated
as a writer. A call option written by a Fund is "covered" if the Fund owns the
security underlying the option or has an absolute and immediate right to
acquire that security without additional cash consideration (or for additional
cash consideration held in a segregated account by the Fund's Custodian) upon
conversion or exchange of other securities held in its fund. A call option is
also covered if a Fund holds on a share-for-share basis a call on the same
security as the call written where the exercise price of the call held is
equal to or less than the exercise price of the call written or greater than
the exercise price of the call written if the difference is maintained by the
Fund in cash, treasury bills or other high grade, short-term debt obligations
in a segregated account with the Custodian. The premium paid by the purchaser
of an option will reflect, among other things, the relationship of the
exercise price to the market price and volatility of the underlying security,
the remaining term of the option, supply and demand and interest rates.

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(DAF-SAI/PART B)

If the writer of an option wishes to terminate the obligation, he or
she may effect a "closing purchase transaction." This is accomplished by
buying an option of the same series as the option previously written. The
effect of the purchase is that the writer's position will be canceled by the
clearing corporation. However, a writer may not effect a closing purchase
transaction after he or she has been notified of the exercise of an option.
Similarly, an investor who is the holder of an option may liquidate his or her
position by effecting a "closing sale transaction." This is accomplished by
selling an option of the same series as the option previously purchased. There
is no guarantee that either a closing purchase or a closing sale transaction
can be effected. To secure the obligation to deliver the underlying security
in the case of a call option, the writer of the option (whether an
exchange-traded option or a NASDAQ option) is required to pledge for the
benefit of the broker the underlying security or other assets in accordance
with the rules of The Options Clearing Corporation (OCC), the Chicago Board of
Trade and the Chicago Mercantile Exchange, institutions which interpose
themselves between buyers and sellers of options. Technically, each of these
institutions assumes the other side of every purchase and sale transaction on
an exchange and, by doing so, guarantees the transaction.

An option position may be closed out only on an exchange, board of
trade or other trading facility which provides a secondary market for an
option of the same series. Although a Fund will generally purchase or write
only those options for which there appears to be an active secondary market,
there is no assurance that a liquid secondary market on an exchange or other
trading facility will exist for any particular option, or at any particular
time, and for some options no secondary market on an exchange or otherwise may
exist. In such event it might not be possible to effect closing transactions
in particular options, with the result that the Fund would have to exercise
its options in order to realize any profit and would incur brokerage
commissions upon the exercise of call options and upon the subsequent
disposition of underlying securities acquired through the exercise of call
options or upon the purchase of underlying securities for the exercise of put
options. If a Fund as a covered call option writer is unable to effect a
closing purchase transaction in a secondary market, it will not be able to
sell the underlying security until the option expires or it delivers the
underlying security upon exercise.

Reasons for the absence of a liquid secondary market on an exchange
include the following: (i) there may be insufficient trading interest in
certain options; (ii) restrictions may be imposed by an exchange on opening
transactions or closing transactions or both; (iii) trading halts, suspensions
or other restrictions may be imposed with respect to particular classes or
series of options or underlying securities; (iv) unusual or unforeseen
circumstances may interrupt normal operations on an exchange; (v) the
facilities of an exchange or a clearing corporation may not at all times be
adequate to handle current trading volume; or (vi) one or more exchanges
could, for economic or other reasons, decide or be compelled at some future
date to discontinue the trading of options (or a particular class or series of
options), in which event the secondary market on that exchange (or in the
class or series of options) would cease to exist, although outstanding options
on that exchange that had been issued by a clearing corporation as a result of
trades on that exchange would continue to be exercisable in accordance with
their terms. There is no assurance that higher than anticipated trading
activity or other unforeseen events might not, at times, render certain of the
facilities of any of the clearing corporations inadequate, and thereby result
in the institution by an exchange of special procedures which may interfere
with the timely execution of customers' orders. However, the OCC, based on
forecasts provided by the U.S. exchanges, believes that its facilities are
adequate to handle the volume of reasonably anticipated options transactions,
and such exchanges have advised such clearing corporation that they believe
their facilities will also be adequate to handle reasonably anticipated
volume.

Options on Stock Indices
Options on stock indices are similar to options on stock except that,
rather than the right to take or make delivery of stock at a specified price,
an option on a stock index gives the holder the right to receive, upon
exercise of the option, an amount of cash if the closing level of the stock
index upon which the option is based is greater than, in the case of a call,
or less than, in the case of a put, the exercise price of the option. This
amount of cash is

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(DAF-SAI/PART B)

equal to such difference between the closing price of the index and the
exercise price of the option expressed in dollars times a specified multiple
(the "multiplier"). The writer of the option is obligated, in return for the
premium received, to make delivery of this amount. Unlike stock options, all
settlements are in cash.

The multiplier for an index option performs a function similar to the
unit of trading for a stock option. It determines the total dollar value per
contract of each point in the difference between the exercise price of an
option and the current level of the underlying index. A multiplier of 100
means that a one-point difference will yield $100. Options on different indices
may have different multipliers.

Except as described below, a Fund will write call options on indices
only if on such date it holds a portfolio of securities at least equal to the
value of the index times the multiplier times the number of contracts. When a
Fund writes a call option on a broadly-based stock market index, the Fund will
segregate or put into escrow with the Custodian, or pledge to a broker as
collateral for the option, cash, cash equivalents or at least one "qualified
security" with a market value at the time the option is written of not less
than 100% of the current index value times the multiplier times the number of
contracts. A Fund will write call options on broadly-based stock market
indices only if at the time of writing it holds a diversified portfolio of
stocks.

If a Fund has written an option on an industry or market segment
index, it will so segregate or put into escrow with the Custodian, or pledge
to a broker as collateral for the option, at least ten "qualified securities,"
which are stocks of an issuer in such industry or market segment, with a
market value at the time the option is written of not less than 100% of the
current index value times the multiplier times the number of contracts. Such
stocks will include stocks which represent at least 50% of the Fund's holdings
in that industry or market segment. No individual security will represent more
than 15% of the amount so segregated, pledged or escrowed in the case of
broadly-based stock market index options or 25% of such amount in the case of
industry or market segment index options.

If at the close of business, the market value of such qualified
securities so segregated, escrowed or pledged falls below 100% of the current
index value times the multiplier times the number of contracts, a Fund will
segregate, escrow or pledge an amount in cash, Treasury bills or other high
grade short-term debt obligations equal in value to the difference. In
addition, when a Fund writes a call on an index which is in-the-money at the
time the call is written, the Fund will segregate with the Custodian or pledge
to the broker as collateral, cash, U.S. government or other high grade
short-term debt obligations equal in value to the amount by which the call is
in-the-money times the multiplier times the number of contracts. Any amount
segregated pursuant to the foregoing sentence may be applied to the Fund's
obligation to segregate additional amounts in the event that the market value
of the qualified securities falls below 100% of the current index value times
the multiplier times the number of contracts. However, if a Fund holds a call
on the same index as the call written where the exercise price of the call
held is equal to or less than the exercise price of the call written or
greater than the exercise price of the call written if the difference is
maintained by the Fund in cash, Treasury bills or other high grade short-term
debt obligations in a segregated account with the Custodian, it will not be
subject to the requirements described in this paragraph.

Risks of Options on Stock Indices. Index prices may be distorted if
trading of certain securities included in the index is interrupted. Trading in
the index options also may be interrupted in certain circumstances, such as if
trading were halted in a substantial number of securities included in the
index. If this occurred, a Fund would not be able to close out options which
it had purchased or written and, if restrictions on exercise were imposed, may
be unable to exercise an option it holds, which could result in substantial
losses to the Fund. It is the Funds' policy to purchase or write options only
on indices which include a number of securities sufficient to minimize the
likelihood of a trading halt in the index.

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(DAF-SAI/PART B)

Special Risks of Writing Calls on Stock Indices. Unless a Fund has
other liquid assets which are sufficient to satisfy the exercise of a call,
the Fund would be required to liquidate portfolio securities in order to
satisfy the exercise. Because an exercise must be settled within hours after
receiving the notice of exercise, if a Fund fails to anticipate an exercise it
may have to borrow from a bank (in amounts not exceeding 20% of the value of
the Fund's total assets) pending settlement of the sale of securities in its
portfolio and would incur interest charges thereon.

When a Fund has written a call, there is also a risk that the market
may decline between the time the Fund has a call exercised against it, at a
price which is fixed as of the closing level of the index on the date of
exercise, and the time the Fund is able to sell securities in its portfolio.
As with stock options, a Fund will not learn that an index option has been
exercised until the day following the exercise date. Unlike a call on stock
where the Fund would be able to deliver the underlying securities in
settlement, the Fund may have to sell part of its portfolio in order to make
settlement in cash, and the price of such securities might decline before they
can be sold. This timing risk makes certain strategies involving more than one
option substantially more risky with index options than with stock options.
For example, even if an index call which a Fund has written is "covered" by an
index call held by the Fund with the same strike price, the Fund will bear the
risk that the level of the index may decline between the close of trading on
the date the exercise notice is filed with the clearing corporation and the
close of trading on the date the Fund exercises the call it holds or the time
the Fund sells the call, which in either case would occur no earlier than the
day following the day the exercise notice was filed.

Over-the-Counter Options and Illiquid Securities. As indicated in the
Prospectuses, each Fund may deal in over-the-counter ("OTC") options. The
Funds understand the position of the staff of the Securities and Exchange
Commission ("SEC") to be that purchased OTC options and the assets used as
"cover" for written OTC options are illiquid securities. The Funds, the
Manager, and the sub-advisers disagree with this position and have found the
dealers with which they engage in OTC options transactions generally agreeable
to and capable of entering into closing transactions. As also indicated in the
Prospectuses, the Funds have adopted procedures for engaging in OTC options
for the purpose of reducing any potential adverse impact of such transactions
upon the liquidity of each Fund's portfolio.

As part of these procedures the Funds will engage in OTC options
transactions only with primary dealers that have been specifically approved by
the Board of Directors of Adviser Funds, Inc. and the Manager and/or
sub-advisers believe that the approved dealers should be agreeable and able to
enter into closing transactions if necessary and, therefore, present minimal
credit risks to the Funds. The Funds anticipate entering into written
agreements with those dealers to whom the Funds may sell OTC options, pursuant
to which the Funds would have the absolute right to repurchase the OTC options
from such dealers at any time at a price determined pursuant to a formula set
forth in certain no action letters published by the SEC staff. A Fund will not
engage in OTC options transactions if the amount invested by the Fund in OTC
options plus, with respect to OTC options written by the Fund, the amounts
required to be treated as illiquid pursuant to the terms of such letters (and
the value of the assets used as cover with respect to OTC option sales which
are not within the scope of such letters), plus the amount invested by the
Fund in illiquid securities, would exceed 15% of the Fund's total assets. OTC
options on securities other than U.S. government securities may not be within
the scope of such letters and, accordingly, the amount invested by a Fund in
OTC options on such other securities and the value of the assets used as cover
with respect to OTC option sales regarding such non-U.S. government securities
will be treated as illiquid and subject to the 10% limitation on the Fund's
net assets that may be invested in illiquid securities. See Illiquid
Securities, below.

Futures Contracts and Options Thereon
A futures contract is an agreement in which the writer (or seller) of
the contract agrees to deliver to the buyer an amount of cash or securities
equal to a specific dollar amount times the difference between the value of a

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(DAF-SAI/PART B)

specific fixed-income security or index at the close of the last trading day
of the contract and the price at which the agreement is made. No physical
delivery of the underlying securities is made. When the futures contract is
entered into, each party deposits with a broker or in a segregated custodial
account approximately 5% of the contract amount, called the "initial margin."
Subsequent payments to and from the broker, called "variation margin," will be
made on a daily basis as the price of the underlying security or index
fluctuates, making the long and short positions in the futures contracts more
or less valuable, a process known as "marking to market." In the case of
options on futures contracts, the holder of the option pays a premium and
receives the right, upon exercise of the option at a specified price during
the option period, to assume a position in the futures contract (a long
position if the option is a call and a short position if the option is a put).
If the option is exercised by the holder before the last trading day during
the option period, the option writer delivers the futures position, as well as
any balance in the writer's futures margin account. If it is exercised on the
last trading day, the option writer delivers to the option holder cash in an
amount equal to the difference between the option exercise price and the
closing level of the relevant security or index on the date the option
expires.

Each Fund intends to engage in futures contracts and options thereon
as a hedge against changes, resulting from market conditions, in the value of
securities which are held by the Fund or which the Fund intends to purchase,
in accordance with the rules and regulations of the Commodity Futures Trading
Commission ("CFTC"). Additionally, the Funds may write options on futures
contracts to realize through the receipt of premium income a greater return
than would be realized in a Fund's portfolio securities alone.

Risks of Transactions in Futures Contracts. There are several risks
in connection with the use of futures contracts as a hedging device.
Successful use of futures contracts by a Fund is subject to the ability of the
Fund's Manager or sub-adviser to correctly predict movements in the direction
of interest rates or changes in market conditions. These predictions involve
skills and techniques that may be different from those involved in the
management of the portfolio being hedged. In addition, there can be no
assurance that there will be a correlation between movements in the price of
the underlying index or securities and movements in the price of the
securities which are the subject of the hedge. A decision of whether, when and
how to hedge involves the exercise of skill and judgment, and even a
well-conceived hedge may be unsuccessful to some degree because of market
behavior or unexpected trends in interest rates.

Although certain Funds will purchase or sell futures contracts only
on exchanges where there appears to be an adequate secondary market, there is
no assurance that a liquid secondary market on an exchange will exist for any
particular contract or at any particular time. Accordingly, there can be no
assurance that it will be possible, at any particular time, to close a futures
position. In the event a Fund could not close a futures position and the value
of such position declined, the Fund would be required to continue to make
daily cash payments of variation margin. However, in the event futures
contracts have been used to hedge portfolio securities, such securities will
not be sold until the futures contract can be terminated. In such
circumstances, an increase in the price of the securities, if any, may
partially or completely offset losses on the futures contract. However, there
is no guarantee that the price movements of the securities will, in fact,
correlate with the price movements in the futures contract and thus provide an
offset to losses on a futures contract.

The hours of trading of futures contracts may not conform to the
hours during which a Fund may trade the underlying securities. To the extent
that the futures markets close before the securities markets, significant
price and rate movements can take place in the securities markets that cannot
be reflected in the futures market.

Foreign Currency Transactions. U.S. Growth Fund, Overseas Equity Fund
and New Pacific Fund may hold foreign currency deposits from time to time and
may convert dollars and foreign currencies in the foreign exchange markets.
Currency conversion involves dealer spreads and other costs, although
commissions usually are

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(DAF-SAI/PART B)

not charged. Currencies may be exchanged on a spot (i.e., cash) basis, or by
entering into forward contracts to purchase or sell foreign currencies at a
future date and price. Forward contracts generally are traded in an interbank
market conducted directly between currency traders (usually large commercial
banks) and their customers. The parties to a forward contract may agree to
offset or terminate the contract before its maturity, or may hold the contract
to maturity and complete the contemplated currency exchange.

Forward Foreign Currency Exchange Contracts
The Funds' dealings in forward contracts will be limited to hedging
involving either specific transactions or portfolio positions. Transaction
hedging is the purchase or sale of forward contracts with respect to specific
receivables or payables of a Fund generally arising in connection with the
purchase or sale of its portfolio securities and accruals of interest or
dividends receivable and Fund expenses. Position hedging is the sale of a
foreign currency with respect to portfolio security positions denominated or
quoted in that currency. A Fund may not position hedge with respect to a
particular currency for an amount greater than the aggregate market value
(determined at the time of making any sale of a forward contract) of
securities held in its portfolio denominated or quoted in, or currently
convertible into, such currency.

When a Fund enters into a contract for the purchase or sale of a
security denominated in a foreign currency, or when a Fund anticipates the
receipt in a foreign currency of dividends or interest payments on a security
which it holds, the Fund may desire to "lock in" the U.S. dollar price of the
security or the U.S. dollar equivalent of such dividend or interest payment as
the case may be. By entering into a forward contract for a fixed amount of
dollars for the purchase or sale of the amount of foreign currency involved in
the underlying transactions, a Fund will be able to protect itself against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the subject foreign currency during the period between the
date on which the security is purchased or sold, or on which the dividend or
interest payment is declared, and the date on which such payments are made or
received.

Additionally, when the Manager and/or applicable sub-adviser believes
that the currency of a particular foreign country may suffer a substantial
decline against the U.S. dollar, a Fund may enter into a forward contract for
a fixed amount of dollars, to sell the amount of foreign currency
approximating the value of some or all of the securities of the Fund
denominated in such foreign currency.

The Funds may use currency forward contracts to manage currency risks
and to facilitate transactions in foreign securities. The following discussion
summarizes the principal currency management strategies involving forward
contracts that could be used by these Funds.

In connection with purchases and sales of securities denominated in
foreign currencies, a Fund may enter into currency forward contracts to fix a
definite price for the purchase or sale in advance of the trade's settlement
date. This technique is sometimes referred to as a "settlement hedge" or
"transaction hedge." The Manager and/or sub-advisers expect to enter into
settlement hedges in the normal course of managing the Funds' foreign
investments. The Funds could also enter into forward contracts to purchase or
sell a foreign currency in anticipation of future purchases or sales of
securities denominated in foreign currency, even if the specific investments
have not yet been selected by the Manager and/or sub-adviser.

The Funds may also use forward contracts to hedge against a decline
in the value of existing investments denominated in foreign currency. For
example, if a Fund owned securities denominated in pounds sterling, it could
enter into a forward contract to sell pounds sterling in return for U.S.
dollars to hedge against possible declines in the pound's value. Such a hedge
(sometimes referred to as a "position hedge") would tend to offset both
positive and negative currency fluctuations, but would not offset changes in
security values caused by other factors. The Fund could also hedge the
position by selling another currency expected to perform similarly to the
pound sterling --

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(DAF-SAI/PART B)

for example, by entering into a forward contract to sell Deutschemarks or
European Currency Units in return for U.S. dollars. This type of hedge,
sometimes referred to as a "proxy hedge," could offer advantages in terms of
cost, yield, or efficiency, but generally will not hedge currency exposure as
effectively as a simple hedge into U.S. dollars. Proxy hedges may result in
losses if the currency used to hedge does not perform similarly to the
currency in which the hedged securities are denominated.

Under certain conditions, SEC guidelines require mutual funds to set
aside cash and appropriate liquid assets in a segregated custodian account to
cover currency forward contracts. As required by SEC guidelines, U.S. Growth
Fund, Overseas Equity Fund and New Pacific Fund will segregate assets to cover
currency forward contracts, if any, whose purpose is essentially speculative.
The Funds will not segregate assets to cover forward contracts, including
settlement hedges, position hedges, and proxy hedges. Successful use of
forward currency contracts will depend on the Manager's and/or sub-advisers'
skill in analyzing and predicting currency values. Forward contracts may
substantially change the Funds' investment exposure to changes in currency
exchange rates, and could result in losses to the Funds if currencies do not
perform as the Manager and/or sub-advisers anticipate. For example, if a
currency's value rose at a time when the Manager and/or applicable sub-adviser
had hedged a Fund by selling that currency in exchange for dollars, the Fund
would be unable to participate in the currency's appreciation. If the Manager
and/or applicable sub-adviser hedges currency exposure through proxy hedges, a
Fund could realize currency losses from the hedge and the security position at
the same time if the two currencies do not move in tandem. Similarly, if the
Manager and/or sub-adviser increases a Fund's exposure to a foreign currency,
and that currency's value declines, the Fund will realize a loss. There is no
assurance that the Manager's and/or sub-advisers' use of forward currency
contracts will be advantageous to the Funds or that it will hedge at an
appropriate time.

Foreign Currency Options
U.S. Growth Fund, Overseas Equity Fund and New Pacific Fund may
purchase U.S. exchange-listed call and put options on foreign currencies. Such
options on foreign currencies operate similarly to options on securities.
Options on foreign currencies are affected by all of those factors which
influence foreign exchange rates and investments generally.

The value of a foreign currency option is dependent upon the value of
the foreign currency and the U.S. dollar, and may have no relationship to the
investment merits of a foreign security. Because foreign currency transactions
occurring in the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency options, investors
may be disadvantaged by having to deal in an odd lot market (generally
consisting of transactions of less than $1 million) for the underlying foreign
currencies at prices that are less favorable than for round lots.

There is no systematic reporting of last sale information for foreign
currencies and there is no regulatory requirement that quotations available
through dealer or other market sources be firm or revised on a timely basis.
Available quotation information is generally representative of very large
transactions in the interbank market and thus may not reflect relatively
smaller transactions (less than $1 million) where rates may be less favorable.
The interbank market in foreign currencies is a global, around-the-clock
market. To the extent that the U.S. options markets are closed while the
markets for the underlying currencies remain open, significant price and rate
movements may take place in the underlying markets that cannot be reflected in
the options market.

Foreign Currency Conversion
Although foreign exchange dealers do not charge a fee for currency
conversion, they do realize a profit based on the difference (the "spread")
between prices at which they are buying and selling various currencies. Thus,

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(DAF-SAI/PART B)

a dealer may offer to sell a foreign currency to U.S. Growth Fund, Overseas
Equity Fund or New Pacific Fund at one rate, while offering a lesser rate of
exchange should those Funds desire to resell that currency to the dealer.

Combined Transactions
Each Fund may enter into multiple transactions, including multiple
options transactions, multiple futures transactions, multiple currency
transactions (including forward currency contracts) and multiple interest rate
transactions and any combination of futures, options, currency and interest
rate transactions ("component" transactions), instead of a single transaction,
as part of a single or combined strategy when, in the opinion of the Manager
and/or sub-adviser, it is in the best interests of the Fund to do so. A
combined transaction will usually contain elements of risk that are present in
each of its component transactions. Although combined transactions are
normally entered into based on the Manager's and/or sub-adviser's judgment
that the combined strategies will reduce risk or otherwise more effectively
achieve the desired portfolio management goal, it is possible that the
combination will instead increase such risks or hinder achievement of the
portfolio management objective.

Swaps, Caps, Floors and Collars
Each Fund may enter into interest rate, currency and index swaps and
the purchase or sale of related caps, floors and collars. The Funds expect to
enter into these transactions primarily to preserve a return or spread on a
particular investment or portion of its portfolio, to protect against currency
fluctuations, as a duration management technique or to protect against any
increase in the price of securities the Fund anticipates purchasing at a later
date. The Funds intend to use these transactions as hedges and not speculative
investments and will not sell interest rate caps or floors where it does not
own securities or other instruments providing the income stream the Fund may
be obligated to pay. Interest rate swaps involve the exchange by the Fund with
another party of their respective commitments to pay or receive interest,
e.g., an exchange of floating rate payments for fixed rate payments with
respect to a nominal amount of principal. A currency swap is an agreement to
exchange cash flows on a notional amount of two or more currencies based on
the relative value differential among them and an index swap is an agreement
to swap cash flows on a notional amount based on changes in the values of the
reference indices. The purchase of a cap entitles the purchaser to receive
payments on a notional principal amount from the party selling such cap to the
extent that a specified index exceeds a predetermined interest rate or amount.
The purchase of a floor entitles the purchaser to receive payments on a
notional principal amount from the party selling such floor to the extent that
a specified index falls below a predetermined interest rate or amount. A
collar is a combination of a cap and a floor that preserves a certain return
within a predetermined range of interest rates or values.

A Fund will usually enter into swaps on a net basis, i.e., the two
payment streams are netted out in a cash settlement on the payment date or
dates specified in the instrument, with the Fund receiving or paying, as the
case may be, only the net amount of the two payments. Inasmuch as these swaps,
caps, floors and collars are entered into for good faith hedging purposes, the
investment manager and the Fund believe such obligations do not constitute
senior securities under the Investment Company Act of 1940 (the "1940 Act")
and, accordingly, will not treat them as being subject to its borrowing
restrictions. A Fund will not enter into any swap, cap, floor or collar
transaction unless, at the time of entering into such transaction, the
unsecured long-term debt of the counterparty, combined with any credit
enhancements, is rated at least A by S&P or Moody's or is determined to be of
equivalent credit quality by the Manager and/or sub-adviser. If there is a
default by the counterparty, the Fund may have contractual remedies pursuant
to the agreements related to the transaction. The swap market has grown
substantially in recent years with a large number of banks and investment
banking firms acting both as principals and as agent utilizing standardized
swap documentation. As a result, the swap market has become relatively liquid.
Caps, floors and collars are more recent innovations for which standardized
documentation has not yet been fully developed and, accordingly, they are less
liquid than swaps.

Eurodollar Instruments

-12-

<PAGE>

(DAF-SAI/PART B)

The Funds may make investments in Eurodollar instruments. Eurodollar
instruments are U.S. dollar-denominated futures contracts or options thereon
which are linked to the London Interbank Offered Rate ("LIBOR"), although
foreign currency-denominated instruments are available from time to time.
Eurodollar futures contracts enable purchasers to obtain a fixed rate for the
lending of funds and sellers to obtain a fixed rate for borrowings. A Fund
might use Eurodollar futures contracts and options thereon to hedge against
changes in LIBOR, to which many interest rate swaps and fixed-income
instruments are linked.

Lending of Portfolio Securities
As discussed in the Prospectuses, each Fund has the ability to lend
securities from its portfolio to brokers, dealers and other financial
organizations. Such loans, if and when made, may not exceed one-third of a
Fund's total assets. A Fund may not lend its portfolio securities to Lincoln
National Corporation or its affiliates unless it has applied for and received
specific authority from the SEC. Loans of securities by the Funds will be
collateralized by cash, letters of credit or U.S. government securities, which
will be maintained at all times in an amount equal to at least 100% of the
current market value of the loaned securities. From time to time, a Fund may
return a part of the interest earned from the investment of collateral
received for securities loaned to the borrower and/or a third party, which is
unaffiliated with the Fund or with Lincoln National Corporation, and which is
acting as a "finder."

In lending its portfolio securities, a Fund can increase its income
by continuing to receive interest on the loaned securities as well as by
either investing the cash collateral in short-term instruments or obtaining
yield in the form of interest paid by the borrower when government securities
are used as collateral. Requirements of the SEC, which may be subject to
future modifications, currently provide that the following conditions must be
met whenever portfolio securities are loaned: (a) the Fund must receive at
least 102% cash collateral or equivalent securities from the borrower; (b) the
borrower must increase such collateral whenever the market value of the loaned
securities rises above the level of such collateral; (c) the Fund must be able
to terminate the loan at any time; (d) the Fund must receive reasonable
interest on the loan, as well as an amount equal to any dividends, interest or
other distributions on the loaned securities, and any increase in market
value; (e) the Fund may pay only reasonable custodian fees in connection with
the loan; and (f) voting rights on the loaned securities may pass to the
borrower; however, if a material event adversely affecting the investment
occurs, the Fund's Board of Directors must terminate the loan and regain the
right to vote the securities. The risks in lending portfolio securities, as
with other extensions of secured credit, consist of possible delay in
receiving additional collateral or in the recovery of the securities or
possible loss of rights in the collateral should the borrower fail
financially.

When-Issued Securities
As discussed in the Prospectuses, the Funds may purchase securities
on a "when-issued" basis. When a Fund agrees to purchase securities, the
Custodian will set aside cash or liquid portfolio securities equal to the
amount of the commitment in a separate account. Normally, the Custodian will
set aside portfolio securities to satisfy a purchase commitment. In such a
case, a Fund may be required subsequently to place additional assets in the
separate account in order to assure that the value of the account remains
equal to the amount of the Fund's commitment. It may be expected that a Fund's
net assets will fluctuate to a greater degree when it sets aside portfolio
securities to cover such purchase commitments than when it sets aside cash. No
Fund intends to purchase "when-issued" securities for speculative purposes but
only in furtherance of its investment objective. Because a Fund will set aside
cash or liquid portfolio securities to satisfy its purchase commitments in the
manner described, the Fund's liquidity and the ability of the Manager or
sub-adviser to manage the Fund might be affected in the event its commitments
to purchase when-issued securities ever exceeded 25% of the value of its
assets.

When a Fund engages in "when-issued" transactions, it relies on the
seller to consummate the trade. Failure of the seller to do so may result in
the Fund's incurring a loss or missing the opportunity to obtain a price
considered to be advantageous.

-13-

<PAGE>

(DAF-SAI/PART B)

Money Market Instruments
Each Fund may invest for defensive purposes in corporate government
bonds and notes and money market instruments. Money market instruments in
which the Funds may invest include U.S. government securities; certificates of
deposit, time deposits and bankers' acceptances issued by domestic banks
(including their branches located outside the U.S. and subsidiaries located in
Canada), domestic branches of foreign banks, savings and loan associations and
similar institutions; high grade commercial paper; and repurchase agreements
with respect to the foregoing types of instruments. The following is a more
detailed description of such money market instruments.

Bank Obligations
Certificates of deposit ("CDs") are short-term negotiable obligations
of commercial banks; time deposits ("TDs") are non-negotiable deposits
maintained in banking institutions for specified periods of time at stated
interest rates; and bankers' acceptances are time drafts drawn on commercial
banks by borrowers usually in connection with international transactions.

Obligations of foreign branches of domestic banks, such as CDs and
TDs, may be general obligations of the parent bank in addition to the issuing
branch, or may be limited by the terms of a specific obligation and government
regulation. Such obligations are subject to different risks than are those of
domestic banks or domestic branches of foreign banks. These risks include
foreign economic and political developments, foreign governmental restrictions
that may adversely affect payment of principal and interest on the
obligations, foreign exchange controls and foreign withholding and other taxes
on interest income. Foreign branches of domestic banks are not necessarily
subject to the same or similar regulatory requirements that apply to domestic
banks, such as mandatory reserve requirements, loan limitations, and
accounting, auditing and financial recordkeeping requirements. In addition,
less information may be publicly available about a foreign branch of a
domestic bank than about a domestic bank. CDs issued by wholly owned Canadian
subsidiaries of domestic banks are guaranteed as to repayment of principal and
interest (but not as to sovereign risk) by the domestic parent bank.

Obligations of domestic branches of foreign banks may be general
obligations of the parent bank in addition to the issuing branch, or may be
limited by the terms of a specific obligation and by governmental regulation
as well as governmental action in the country in which the foreign bank has
its head office. A domestic branch of a foreign bank with assets in excess of
$1 billion may or may not be subject to reserve requirements imposed by the
Federal Reserve System or by the state in which the branch is located if the
branch is licensed in that state. In addition, branches licensed by the
Comptroller of the Currency and branches licensed by certain states ("State
Branches") may or may not be required to: (a) pledge to the regulator by
depositing assets with a designated bank within the state, an amount of its
assets equal to 5% of its total liabilities; and (b) maintain assets within
the state in an amount equal to a specified percentage of the aggregate amount
of liabilities of the foreign bank payable at or through all of its agencies
or branches within the state. The deposits of state branches may not
necessarily be insured by the FDIC. In addition, there may be less publicly
available information about a domestic branch of a foreign bank than about a
domestic bank.

In view of the foregoing factors associated with the purchase of CDs
and TDs issued by foreign branches of domestic banks or by domestic branches
of foreign banks, the Manager and/or sub-advisers will carefully evaluate such
investments on a case-by-case basis.

Savings and loan associations whose CDs may be purchased by the Funds
are supervised by the Office of Thrift Supervision and are insured by the
Savings Association Insurance Fund, which is administered by the FDIC and is
backed by the full faith and credit of the U.S. government. As a result, such
savings and loan associations are subject to regulation and examination.

-14-

<PAGE>

(DAF-SAI/PART B)

Reverse Repurchase Agreements
All Funds are authorized to enter into reverse repurchase agreements.
A reverse repurchase agreement is the sale of a security by a Fund and its
agreement to repurchase the security at a specified time and price. A Fund
will maintain in a segregated account with the Custodian cash, cash
equivalents or U.S. government securities in an amount sufficient to cover its
obligations under reverse repurchase agreements with broker/dealers (but no
collateral is required on reverse repurchase agreements with banks). Under the
1940 Act, reverse repurchase agreements may be considered borrowings by a
Fund; accordingly, each Fund will limit its investments in reverse repurchase
agreements, together with any other borrowings, to no more than one-third of
its total assets. The use of reverse repurchase agreements by a Fund creates
leverage which increases the Fund's investment risk. If the income and gains
on securities purchased with the proceeds of reverse repurchase agreements
exceed the costs of the agreements, a Fund's earnings or net asset value will
increase faster than otherwise would be the case; conversely, if the income
and gains fail to exceed the costs, earnings or net asset value would decline
faster than otherwise would be the case.

"Roll" Transactions
Each Fund may engage in "roll" transactions. A "roll" transaction is
the sale of securities together with a commitment (for which a Fund may
receive a fee) to purchase similar, but not identical, securities at a future
date. Under the 1940 Act, these transactions may be considered borrowings by
the Funds; accordingly, each Fund will limit its use of these transactions,
together with any other borrowings, to no more than one-third of its total
assets. The Funds will segregate liquid assets such as cash, U.S. government
securities or other high grade debt obligations in an amount sufficient to
meet their payment obligations in these transactions. Although these
transactions will not be entered into for leveraging purposes, to the extent a
Fund's aggregate commitments under these transactions exceed its holdings of
cash and securities that do not fluctuate in value (such as short-term money
market instruments), the Fund temporarily will be in a leveraged position
(i.e., it will have an amount greater than its net assets subject to market
risk). Should the market value of a Fund's portfolio securities decline while
the Fund is in a leveraged position, greater depreciation of its net assets
would likely occur than were it not in such a position. As a Fund's aggregate
commitments under these transactions increase, the opportunity for leverage
similarly increases.

Repurchase Agreements
While the Funds are permitted to do so, they normally do not invest
in repurchase agreements, except to invest cash balances.

The funds available from Delaware Investments have obtained an
exemption (the "Order") from the joint-transaction prohibitions of Section
17(d) of the 1940 Act to allow Delaware Investments funds jointly to invest
cash balances. The Funds may invest cash balances in a joint repurchase
agreement in accordance with the terms of the Order and subject generally to
the conditions described below.

A repurchase agreement is a short-term investment by which the
purchaser acquires ownership of a debt security and the seller agrees to
repurchase the obligation at a future time and set price, thereby determining
the yield during the purchaser's holding period. Should an issuer of a
repurchase agreement fail to repurchase the underlying security, the loss to
the Funds, if any, would be the difference between the repurchase price and
the market value of the security. A Fund will limit its investments in
repurchase agreements to those which the Manager and/or subadviser, under the
guidelines of the Board of Directors, determines to present minimal credit
risks and which are of high quality. In addition, a Fund must have collateral
of at least 102% of the repurchase price, including the portion representing
the Fund's yield under such agreements, which is monitored on a daily basis.

Illiquid Securities
Each Fund may invest no more than 10% of the value of its net assets
in illiquid securities.

-15-

<PAGE>

(DAF-SAI/PART B)

Each Fund may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933 (the "1933 Act"). Rule 144A
permits many privately placed and legally restricted securities to be freely
traded among certain institutional buyers such as the Funds.

While maintaining oversight, the Board of Directors has delegated to
the Manager the day-to-day function of determining whether or not individual
Rule 144A Securities are liquid for purposes of a Fund's 10% limitation on
investments in illiquid assets. The Board has instructed the Manager to
consider the following factors in determining the liquidity of a Rule 144A
Security: (i) the frequency of trades and trading volume for the security;
(ii) whether at least three dealers are willing to purchase or sell the
security and the number of potential purchasers; (iii) whether at least two
dealers are making a market in the security; and (iv) the nature of the
security and the nature of the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers, and the mechanics of
transfer).

If the Manager determines that a Rule 144A Security that was
previously determined to be liquid is no longer liquid and, as a result, a
Fund's holdings of illiquid securities exceed the Fund's 10% limit on
investment in such securities, the Manager will determine what action to take
to ensure that the Fund continues to adhere to such limitation.

Variable and Floating Rate Notes
Variable rate master demand notes, in which the Funds may invest, are
unsecured demand notes that permit the indebtedness thereunder to vary and
provide for periodic adjustments in the interest rate according to the terms
of the instrument. A Fund will not invest over 5% of its assets in variable
rate master demand notes. Because master demand notes are direct lending
arrangements between a Fund and the issuer, they are not normally traded.
Although there is no secondary market in the notes, a Fund may demand payment
of principal and accrued interest at any time. While the notes are not
typically rated by credit rating agencies, issuers of variable amount master
demand notes (which are normally manufacturing, retail, financial, and other
business concerns) must satisfy the same criteria as set forth above for
commercial paper. In determining average weighted portfolio maturity, a
variable amount master demand note will be deemed to have a maturity equal to
the period of time remaining until the principal amount can be recovered from
the issuer through demand.

A variable rate note is one whose terms provide for the adjustment of
its interest rate on set dates and which, upon such adjustment, can reasonably
be expected to have a market value that approximates its par value. A floating
rate note is one whose terms provide for the adjustment of its interest rate
whenever a specified interest rate changes and which, at any time, can
reasonably be expected to have a market value that approximates its par value.
Such notes are frequently not rated by credit rating agencies; however,
unrated variable and floating rate notes purchased by a Fund will be
determined by the Fund's Manager and/or sub-adviser under guidelines
established by the Fund's Board of Directors to be of comparable quality at
the time of purchase to rated instruments eligible for purchase under the
Fund's investment policies. In making such determinations, the Manager and/or
sub-adviser, if any, will consider the earning power, cash flow and other
liquidity ratios of the issuers of such notes (such issuers include financial,
merchandising, bank holding and other companies) and will continuously monitor
their financial condition. Although there may be no active secondary market
with respect to a particular variable or floating rate note purchased by a
Fund, the Fund may re-sell the note at any time to a third party. The absence
of such an active secondary market, however, could make it difficult for the
Fund to dispose of the variable or floating rate note involved in the event
the issuer of the note defaulted on its payment obligations, and the Fund
could, for this or other reasons, suffer a loss to the extent of the default.
Variable or floating rate notes may be secured by bank letters of credit.

-16-

<PAGE>

(DAF-SAI/PART B)

Variable and floating rate notes for which no readily available
market exists will be purchased in an amount which, together with securities
with legal or contractual restrictions on resale or for which no readily
available market exists (including repurchase agreements providing for
settlement more than seven days after notice), exceed 10% of the Fund's total
assets only if such notes are subject to a demand feature that will permit the
Fund to demand payment of the Principal within seven days after demand by the
Fund. If not rated, such instruments must be found by the Fund's Manager
and/or sub-adviser under guidelines established by the Fund's Board of
Directors, to be of comparable quality to instruments that are rated high
quality. A rating may be relied upon only if it is provided by a nationally
recognized statistical rating organization that is not affiliated with the
issuer or guarantor of the instruments. For a description of the rating
symbols of S&P and Moody's used in this paragraph, see the Prospectuses. The
Fund may also invest in Canadian Commercial Paper, which is commercial paper
issued by a Canadian corporation or a Canadian counterpart of a U.S.
corporation, and in Europaper which is U.S. dollar denominated commercial
paper of a foreign issuer.

Municipal Securities
Municipal Securities are issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities such
as bridges, highways, roads, schools, water and sewer works, and other
utilities. Other public purposes for which Municipal Securities may be issued
include refunding outstanding obligations, obtaining funds for general
operating expenses and obtaining funds to lend to other public institutions
and facilities. In addition, certain debt obligations known as "private
activity bonds" may be issued by or on behalf of municipalities and public
authorities to obtain funds to provide certain water, sewage and solid waste
facilities, qualified residential rental projects, certain local electric, gas
and other heating or cooling facilities, qualified hazardous waste facilities,
high-speed intercity rail facilities, governmentally-owned airports, docks and
wharves and mass commuting facilities, certain qualified mortgages, student
loan and redevelopment bonds and bonds used for certain organizations exempt
from federal income taxation. Certain debt obligations known as "industrial
development bonds" under prior federal tax law may have been issued by or on
behalf of public authorities to obtain funds to provide certain
privately-operated housing facilities, sports facilities, industrial parks,
convention or trade show facilities, airport, mass transit, port or parking
facilities, air or water pollution control facilities, sewage or solid waste
disposal facilities, and certain facilities for water supply. Other private
activity bonds and industrial development bonds issued to finance the
construction, improvement, equipment or repair of privately-operated
industrial, distribution, research, or commercial facilities may also be
Municipal Securities, but the size of such issues is limited under current and
prior federal tax law.

Information about the financial condition of issuers of Municipal
Securities may be less available than about corporations with a class of
securities registered under the Securities Exchange Act of 1934 (the "1934
Act").

-17-

<PAGE>

(DAF-SAI/PART B)

INVESTMENT RESTRICTIONS

Each Fund has adopted policies and investment restrictions. The
investment restrictions numbered 1 through 9 may not be changed without a
majority vote of its outstanding shares, and are considered fundamental. Such
majority is defined in the 1940 Act as the vote of the lesser of: (i) 67% or
more of the outstanding voting securities present at a meeting, if the holders
of more than 50% of the outstanding voting securities are present in person or
by proxy, or (ii) more than 50% of the outstanding voting securities. All
percentage limitations expressed in the following investment restrictions are
measured immediately after and giving effect to the relevant transaction.
Investment restrictions numbered 10 through 12 may be changed by the vote of a
majority of the Board of Directors.

Each Fund normally may not:

1. Purchase any security (other than obligations of the U.S.
government, its agencies or instrumentalities) if as a result, with respect to
75% of the Fund's total assets, more than 5% of the Fund's assets (determined
at the time of investment) would then be invested in securities of a single
issuer;

2. Purchase any securities (other than obligations of the U.S.
government, its agencies and instrumentalities) if as a result 25% or more of
the value of the Fund's total assets (determined at the time of investment)
would be invested in the securities of one or more issuers conducting their
principal business activities in the same industry, provided that there is no
limitation with respect to money market instruments of domestic banks, U.S.
branches of foreign banks that are subject to the same regulations as U.S.
banks and foreign branches of domestic banks (provided that the domestic bank
is unconditionally liable in the event of the failure of the foreign branch to
make payment on its instruments for any reason). Foreign governments,
including agencies and instrumentalities thereof, and each of the electric
utility, natural gas distribution, natural gas pipeline, combined electric and
natural gas utility, and telephone industries shall be considered as a
separate industry for this purpose;

3. Buy or sell real estate, interests in real estate or commodities
or commodity contracts; however, each Fund may invest in debt securities
secured by real estate or interests therein, or issued by companies which
invest in real estate or interests therein, including real estate investment
trusts, and may purchase or sell currencies (including forward currency
contracts) and financial futures contracts and options thereon;

4. Engage in the business of underwriting securities of other
issuers, except to the extent that the disposal of an investment position may
technically cause Adviser Funds, Inc. to be considered an underwriter as that
term is defined under the 1933 Act, as amended;

5. Make loans in an aggregate amount in excess of one-third of a
Fund's total assets, taken at the time any loan is made, provided that
entering into certain repurchase agreements and purchasing debt securities
shall not be deemed loans for the purposes of this restriction;

6. Make short sales of securities or maintain a short position if,
when added together, more than 25% of the value of the Fund's net assets would
be (i) deposited as collateral for the obligation to replace securities
borrowed to effect short sales and (ii) allocated to segregated accounts in
connection with short sales;

7. Borrow money, except from banks for temporary or emergency
purposes not in excess of one-third of the value of a Fund's assets, and
except that Funds may enter into reverse repurchase agreements and engage in
"roll" transactions, provided that reverse repurchase agreements, "roll"
transactions and any other transactions constituting borrowing by a Fund may
not exceed one-third of the Fund's total assets;

-18-

<PAGE>

(DAF-SAI/PART B)

8. Invest in securities of other investment companies except as may
be acquired as part of a merger, consolidation, reorganization or acquisition
of assets and except that each of the Funds may invest up to 5% of its total
assets in the securities of any one investment company, but may not own more
than 3% of the securities of any investment company or invest more than 10% of
its total assets in the securities of other investment companies;

9. Make investments for the purpose of exercising control or
management;

10. Invest in securities of any issuer if, to the knowledge of
Adviser Funds, Inc., any officer or director of the Adviser Funds, Inc. or the
Manager or any sub-adviser owns more than 1/2 of 1% of the outstanding
securities of such issuer, and such officers and directors who own more than
1/2 of 1% own in the aggregate more than 5% of the outstanding securities of
such issuer;

11. Purchase any security if as a result a Fund would then have more
than 5% of its total assets (determined at the time of investment) invested in
securities of companies (including predecessors) less than three years old; or

12. Purchase illiquid securities or other securities that are not
readily marketable if more than 10% of the total assets of the Fund would be
invested in such securities.

In order to comply with certain state "blue sky" restrictions, each
Fund will not as a matter of operating policy:

1. Invest in oil, gas and mineral leases or programs;

2. Purchase warrants if as a result the Fund would then have more
than 5% of its net assets (determined at the time of investment) invested in
warrants. Warrants will be valued at the lower of cost or market and
investment in warrants which are not listed on the New York Stock Exchange or
American Stock Exchange will be limited to 2% of the net assets of Adviser
Funds, Inc. (determined at the time of investment). For the purpose of this
limitation, warrants acquired in units or attached to securities are deemed to
be without value;

3. In connection with investment restriction number eight above,
invest in securities issued by other investment companies without waiving the
advisory fee on that portion of its assets invested in such securities; or

4. Purchase puts, calls, straddles, spreads, and any combination
thereof if by reason thereof the value of its aggregate investment in such
classes of securities will exceed 5% of its total assets.

-19-

<PAGE>

(DAF-SAI/PART B)

PERFORMANCE INFORMATION

From time to time, each Fund may state total return for its Classes
in advertisements and other types of literature. Any statements of total
return performance data for a Class will be accompanied by information on the
average annual compounded rate of return for that Class over, as relevant, the
most recent one-, five- and ten-year or life-of-fund periods, as applicable.
Each Fund may also advertise aggregate and average compounded rate of return
information of each Class over additional periods of time.

In presenting performance information for Class A Shares, the Limited
CDSC, applicable only to certain redemptions of those shares, will not be
deducted from any computations of total return. See the Prospectus for the
Fund Classes for a description of the Limited CDSC and the limited instances
in which it applies. All references to a CDSC in this Performance Information
section will apply to Class B Shares or Class C Shares.

The average annual total rate of return for each Class is based on a
hypothetical $1,000 investment that includes capital appreciation and
depreciation during the stated periods. The following formula will be used for
the actual computations:

n
P(1+T) = ERV

Where: P = a hypothetical initial purchase order of $1,000
from which, in the case of only Class A Shares,
the maximum front-end sales charge is deducted;

T = average annual total return;

n = number of years;

ERV = redeemable value of the hypothetical
$1,000 purchase at the end of the period
after the deduction of the applicable
CDSC, if any, with respect to Class B
Shares and Class C Shares.

-20-

<PAGE>

(DAF-SAI/PART B)

Aggregate or cumulative total return is calculated in a similar
manner, except that the results are not annualized. Each calculation assumes
the maximum front-end sales charge, if any, is deducted from the initial
$1,000 investment at the time it is made with respect to Class A Shares and
that all distributions are reinvested at net asset value, and, with respect to
Class B Shares and Class C Shares, reflects the deduction of the CDSC that
would be applicable upon complete redemption of such shares. In addition, each
Fund may present total return information that does not reflect the deduction
of the maximum front-end sales charge or any applicable CDSC.

Each Fund may also state total return performance for its Classes in
the form of an average annual return. This average annual return figure will
be computed by taking the sum of a Class' annual returns, then dividing that
figure by the number of years in the overall period indicated. The computation
will reflect the impact of the maximum front-end sales charge or CDSC, if any,
paid on the illustrated investment amount against the first year's return.
From time to time, each Fund may quote actual total return performance for its
Classes in advertising and other types of literature compared to indices or
averages of alternative financial products available to prospective investors.
For example, the performance comparisons may include the average return of
various bank instruments, some of which may carry certain return guarantees
offered by leading banks and thrifts as monitored by Bank Rate Monitor, and
those of generally-accepted corporate bond and government security price
indices of various durations prepared by Lehman Brothers and Salomon Brothers,
Inc. These indices are not managed for any investment goal.

The performance of Class A Shares, Class B Shares, Class C Shares and
the Institutional Class, as shown below, is the average annual total return
quotations through October 31, 1997, computed as described above.

The average annual total return for Class A Shares at offer reflects
the maximum front-end sales charge of 4.75% paid on the purchase of shares.
The average annual total return for Class A Shares at net asset value (NAV)
does not reflect the payment of any front-end sales charge.

The average annual total return for Class B Shares and Class C Shares
including deferred sales charge reflects the deduction of the applicable CDSC
that would be paid if the shares were redeemed on October 31, 1997. The
average annual total return for Class B Shares and Class C Shares excluding
deferred sales charge assumes the shares were not redeemed on October 31, 1997
and therefore does not reflect the deduction of a CDSC.

Pursuant to applicable regulation, total return shown for the
Institutional Classes for the periods prior to the commencement of operations
of such Classes is calculated by taking the performance of the respective
Class A Shares and adjusting it to reflect the elimination of all front-end
sales charges. However, for those periods, no adjustment has been made to
eliminate the impact of 12b-1 payments, and performance may have been affected
had such an adjustment been made.

-21-

<PAGE>

(DAF-SAI/PART B)

Securities prices fluctuated during the periods covered and past
results should not be considered as representative of future performance.

Average Annual Total Return(1)

U.S. Growth Fund
Class B Class B
Class A Class A Shares Shares
Shares(2)(3) Shares(2) (including (excluding
(at offer) (at NAV) CDSC)(5) CDSC)

1 year 1 year
ended ended
10/31/97 26.85% 33.18% 10/31/97 28.30% 32.30%

3 years 3 years
ended ended
10/31/97 19.74% 21.70% 10/31/97 20.21% 20.90%

Period Period
12/3/93(4) 3/29/94(4)
through through
10/31/97 15.46% 16.90% 10/31/97 17.23% 17.77%

Average Annual Total Return(1)

Class C Class C
Shares Shares
(including (excluding Institutional
CDSC) CDSC) Class

1 year 1 year
ended ended
10/31/97 31.26% 32.26% 10/31/97 33.57%

3 years 3 years
ended ended
10/31/97 20.87% 20.87% 10/31/97 22.10%

Period Period
5/23/94(4) 2/3/94(4)
through through
10/31/97 20.03% 20.03% 10/31/97 16.48%

- ----------------------------

(1) The Manager has committed to waive a portion of its ann ual compensation
or pay expenses to limit the operating expenses of the Funds. See
Investment Management Agreements. In the absence of such waivers or
payments, performance would have been affected negatively.

(2) The 12b-1 fees payable by each Fund for Class A Shares were at a rate
equal to 0.35% of the average daily net assets. Beginning May 6, 1996,
the payments were set at 0.30%. Performance calculations for periods
after May 6, 1996 will be made using the lower 12b-1 fee rate.
(3) The maximum front-end sales charge was reduced from 5.50% to 4.75%
effective May 6, 1996. The above performance figures are calculated
using 4.75% as the applicable sales charge for all time periods.
(4) Commencement of operations.
(5) Effective May 6, 1996, Class B Shares will be subject to a CDSC schedule
of (i) 4% if shares are redeemed within two years of purchase; (ii) 3%
if shares are redeemed during the third or fourth year following
purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; (iv) 1% if shares are redeemed during the sixth year
following purchase; and (v) 0% thereafter.
The above performance figures are calculated using the new applicable
CDSC schedule.

-22-

<PAGE>

(DAF-SAI/PART B)
<TABLE>
<CAPTION>

Average Annual Total Return(1)
Overseas Equity Fund
Class B Class B Class C Class C
Class A Class A Shares Shares Shares Shares
Shares(2)(3) Shares(2) (including (excluding (including (excluding Institutional
(at offer) (at NAV) CDSC)(5) CDSC) CDSC) CDSC) Class

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 1 year 1 year 1 year
ended ended ended ended
10/31/97 2.60% 7.74% 10/31/97 2.96% 6.95% 10/31/97 5.85% 6.85% 10/31/97 8.04%

3 years 3 years 3 years 3 years
ended ended ended ended
10/31/97 5.07% 6.79% 10/31/97 5.19% 6.08% 10/31/97 6.03% 6.03% 10/31/97 6.71%

Period Period Period Period
12/3/93(4) 3/29/94(4) 5/10/94(4) 2/3/94(4)
through through through through
10/31/97 6.48% 7.82% 10/31/97 5.56% 6.27% 10/31/97 6.50% 6.50% 10/31/97 6.78%

New Pacific Fund
Class B Class B Class C Class C
Class A Class A Shares Shares Shares Shares
Shares(2)(3) Shares(2) (including (excluding (including (excluding Institutional
(at offer) (at NAV) CDSC)(5) CDSC) CDSC) CDSC) Class

1 year 1 year 1 year 1 year
ended ended ended ended
10/31/97 (24.90%) (21.15%) 10/31/97 (24.81%) (21.72%) 10/31/97 (22.61%) (21.85%) 10/31/97 (20.79%)

3 years 3 years 3 years 3 years
ended ended ended ended
10/31/97 (11.24%) (9.79%) 10/31/97 (11.27%) (10.41%) 10/31/97 (10.44%) (10.44%) 10/31/97 (9.39%)

Period Period Period Period
12/3/93(4) 3/29/94(4) 7/7/94(4) 2/3/94(4)
through through through through
10/31/97 (7.71%) (6.55%) 10/31/97 (7.40%) (6.64%) 10/31/97 (7.75%) (7.75%) 10/31/97 (9.12%)
</TABLE>

- ----------------------------
(1) The Manager has committed to waive a portion of its annual compensation
or pay expenses to limit the operating expenses of the Funds. See
Investment Management Agreements. In the absence of such waivers or
payments, performance would have been affected negatively.

(2) The 12b-1 fees payable by each Fund for Class A Shares were at a rate
equal to 0.35% of the average daily net assets. Beginning May 6, 1996,
the payments were set at 0.30%. Performance calculations for periods
after May 6, 1996 will be made using the lower 12b-1 fee rate.
(3) The maximum front-end sales charge was reduced from 5.50% to 4.75%
effective May 6, 1996. The above performance figures are calculated
using 4.75% as the applicable sales charge for all time periods.
(4) Commencement of operations.
(5) Effective May 6, 1996, Class B Shares will be subject to a CDSC schedule
of (i) 4% if shares are redeemed within two years of purchase; (ii) 3%
if shares are redeemed during the third or fourth year following
purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; (iv) 1% if shares are redeemed during the sixth year
following purchase; and (v) 0% thereafter. The above performance figures
are calculated using the new applicable CDSC schedule.

-23-

<PAGE>

(DAF-SAI/PART B)

Total return performance of each Class will reflect the appreciation
or depreciation of principal, reinvestment of income and any capital gains
distributions paid during any indicated period, and the impact of the maximum
front-end sales charge or CDSC, if any, paid on the illustrated investment
amount, annualized. The results will not reflect any income taxes, if
applicable, payable by shareholders on the reinvested distributions included
in the calculations. As securities prices fluctuate, an illustration of past
performance should not be considered as representative of future results.

From time to time, each Fund may also quote its Classes' actual total
return performance , dividend results and other performance information in
advertising and other types of literature. This information may be compared to
that of other mutual funds with similar investment objectives and to stock,
bond and other relevant indices or to rankings prepared by independent
services or other financial or industry publications that monitor the
performance of mutual funds. For example, the performance of a Fund (or Fund
Class) may be compared to data prepared by Lipper Analytical Services, Inc. ,
Morningstar, Inc. , or to the S&P 500 Index, the Dow Jones Industrial Average,
the Morgan Stanley Capital International (MSCI), Europe, Australia and Far
East (EAFE) Index, the MSCI Emerging Markets Free Index, or the Salomon
Brothers World Government Bond Index.

Lipper Analytical Services, Inc. maintains statistical performance
databases, as reported by a diverse universe of independently-managed mutual
funds. Morningstar , Inc. is a mutual fund rating service that rates mutual
funds on the basis of risk-adjusted performance. Rankings that compare a
Fund's performance to another fund in appropriate categories over specific
time periods also may be quoted in advertising and other types of literature.
The S&P 500 and the Dow Jones Industrial Average are industry- accepted
unmanaged indices of generally-conservative securities used for measuring
general market performance. Similarly, the MSCI EAFE Index, the MSCI Emerging
Markets Free Index, and the Salomon Brothers World Government Bond Index are
industry-accepted unmanaged indices of equity securities in developed
countries and global debt securities, respectively, used for measuring general
market performance. The total return performance reported for these indices
will reflect the reinvestment of all distributions on a quarterly basis and
market price fluctuations. The indices do not take into account any sales
charges or other fees. A direct investment in an unmanaged index is not
possible.

Current interest rate and yield information on government debt
obligations of various durations, as reported weekly by the Federal Reserve
(Bulletin H.15), may also be used. As well, current industry rate and yield
information on all industry available fixed-income securities , as reported
weekly by The Bond Buyer, may also be used in preparing comparative
illustrations.

Each Fund may also promote its Classes' yield and/or total return
performance and use comparative performance information computed by and
available from certain industry and general market research and publications,
such as Lipper Analytical Services, Inc., IBC/Donoghue's Money Market Report
and Morningstar, Inc.

-24-

<PAGE>

(DAF-SAI/PART B)

The performance of multiple indices compiled and maintained by
statistical research firms, such as Morgan Stanley, Salomon Brothers and
Lehman Brothers, may be combined to create a blended performance result for
comparative purposes. Generally, the indices selected will be representative
of the types of securities in which the Funds may invest and the assumptions
that were used in calculating the blended performance will be described.

Ibbotson Associates of Chicago, Illinois ("Ibbotson") provides
historical returns of the capital markets in the United States, including
common stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the Consumer Price Index ), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices. The Funds may use the
performance of these capital markets in order to demonstrate general
risk-versus-reward investment scenarios. Performance comparisons may also
include the value of a hypothetical investment in any of these capital
markets. The risks associated with the security types in any capital market
may or may not correspond directly to those of the Funds. The Funds may also
compare performance to that of other compilations or indices that may be
developed and made available in the future.

The Funds may include discussions or illustrations of the potential
investment goals of a prospective investor (including materials that describe
general principles of investing, such as asset allocation, diversification,
risk tolerance, and goal setting, questionnaires designed to help create a
personal financial profile, worksheets used to project savings needs based on
assumed rates of inflation and hypothetical rates of return and action plans
offering investment alternatives), investment management techniques, policies
or investment suitability of a Fund (such as value investing, market timing,
dollar cost averaging, asset allocation, constant ratio transfer, automatic
account rebalancing, the advantages and disadvantages of investing in
tax-deferred and taxable investments or global or international investments),
economic and political conditions, the relationship between sectors of the
economy and the economy as a whole, the effects of inflation and historical
performance of various asset classes, including but not limited to, stocks,
bonds and Treasury bills. From time to time advertisements, sales literature,
communications to shareholders or other materials may summarize the substance
of information contained in shareholder reports (including the investment
composition of a Fund), as well as the views as to current market, economic,
trade and interest rate trends, legislative, regulatory and monetary
developments, investment strategies and related matters believed to be of
relevance to a Fund. In addition, selected indices may be used to illustrate
historic performance of selected asset classes. The Funds may also include in
advertisements, sales literature, communications to shareholders or other
materials, charts, graphs or drawings which illustrate the potential risks and
rewards of investment in various investment vehicles, including but not
limited to, domestic and international stocks, and/or bonds, treasury bills
and shares of a Fund. In addition, advertisements, sales literature,
communications to shareholders or other materials may include a discussion of
certain attributes or benefits to be derived by an investment in a Fund and/or
other mutual funds, shareholder profiles and hypothetical investor scenarios,
timely information on financial management, tax and retirement planning (such
as information on Roth IRAs and Educational IRAs) and investment alternatives
to certificates of deposit and other financial instruments. Such sales
literature, communications to shareholders or other materials may include
symbols, headlines or other material which highlight or summarize the
information discussed in more detail therein.

-25-

<PAGE>

(DAF-SAI/PART B)

Materials may refer to the CUSIP numbers of the Funds and may
illustrate how to find the listings of the Funds in newspapers and
periodicals. Materials may also include discussions of other Funds, products,
and services.

The Funds may quote various measures of volatility and benchmark
correlation in advertising. In addition, the Funds may compare these measures
to those of other funds. Measures of volatility seek to compare the historical
share price fluctuations or total returns to those of a benchmark. Measures of
benchmark correlation indicate how valid a comparative benchmark may be.
Measures of volatility and correlation may be calculated using averages of
historical data. A Fund may advertise its current interest rate sensitivity,
duration, weighted average maturity or similar maturity characteristics.
Advertisements and sales materials relating to a Fund may include information
regarding the background and experience of its portfolio managers.

The following tables present examples, for purposes of illustration
only, of cumulative total return performance for each Class through October
31, 1997. For these purposes, the calculations reflect maximum sales charges,
if any, and assume the reinvestment of any capital gains distributions and
income dividends paid during the indicated periods. The performance does not
reflect any income taxes payable by shareholders on the reinvested
distributions included in the calculations. The performance of Class A Shares
reflects the maximum front-end sales charge paid on the purchase of shares but
may also be shown without reflecting the impact of any front-end sales charge.
The performance of Class B Shares and Class C Shares is calculated both with
the applicable CDSC included and excluded. Pursuant to applicable regulation,
total return shown for an Institutional Class for the periods prior to the
commencement of operations of such Class is calculated by taking the
performance of the respective Class A Shares and adjusting it to reflect the
elimination of all sales charges. However, for those periods, no adjustment
has been made to eliminate the impact of 12b-1 payments, and performance may
have been affected had such an adjustment been made.

-26-

<PAGE>

(DAF-SAI/PART B)

The net asset value of a Class fluctuates so shares, when redeemed,
may be worth more or less than the original investment, and a Class' results
should not be considered as representative of future performance.

Cumulative Total Return(1)
U.S. Growth Fund
Class B Class B Class C Class C
Class A Shares Shares Shares Shares
Shares(2) (including (excluding (including (excluding Institutional
(at offer) CDSC)(4) CDSC) CDSC) CDSC) Class
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 months 3 months 3 months 3 months
ended ended ended ended
10/31/97 (6.30%) 10/31/97 (5.74%) (1.81%) 10/31/97 (2.83%) (1.85%) 10/31/97 (1.58%)

6 months 6 months 6 months 6 months
ended ended ended ended
10/31/97 16.52%(5) 10/31/97 17.98% 21.98% 10/31/97 20.94% 21.94% 10/31/97 22.53%

9 months 9 months 9 months 9 months
ended ended ended ended
10/31/97 14.20% 10/31/97 15.30% 19.30% 10/31/97 18.20% 19.20% 10/31/97 20.09%

1 year 1 year 1 year 1 year
ended ended ended ended
10/31/97 26.85% 10/31/97 28.30% 32.30% 10/31/97 31.26% 32.26% 10/31/97 33.57%

3 years 3 years 3 years 3 years
ended ended ended ended
10/31/97 71.69% 10/31/97 73.70% 76.70% 10/31/97 76.60% 76.60% 10/31/97 82.01%

Period Period Period Period
12/3/93(3) 3/29/94(3) 5/23/94(3) 2/3/94(3)
through through through through
10/31/97 75.46% 10/31/97 77.05% 80.05% 10/31/97 87.55% 87.55% 10/31/97 77.00%

</TABLE>

- ----------------------------

(1) The Manager has committed to waive a portion of its annual compensation
or pay expenses to limit the operating expenses of the Funds. See
Investment Management Agreements. In the absence of such waivers or
payments, performance would have been affected negatively.

(2) The 12b-1 fees payable by each Fund for Class A Shares were at a rate
equal to 0.35% of the average daily net assets. Beginning May 6, 1996,
the payments were set at 0.30%. Performance calculations for periods
after May 6, 1996 will be made using the lower 12b-1 fee rate. The
maximum front-end sales charge was reduced from 5.50% to 4.75% effective
May 6, 1996. The above performance figures are calculated using 4.75% as
the applicable sales charge for all time periods.
(3) Commencement of operations.
(4) Effective May 6, 1996, Class B Shares will be subject to a CDSC schedule
of (i) 4% if shares are redeemed within two years of purchase; (ii) 3%
if shares are redeemed during the third or fourth year following
purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; (iv) 1% if shares are redeemed during the sixth year
following purchase; and (v) 0% thereafter.
The above performance figures are calculated using the new applicable
CDSC schedule.

(5) For the six months ended October 31, 1997, cumulative total return for
U.S. Growth Fund A Class at net asset value was 22.34%.

-27-

<PAGE>

(DAF-SAI/PART B)

Cumulative Total Return(1)
Overseas Equity Fund
Class B Class B Class C Class C
Class A Shares Shares Shares Shares
Shares(2) (including (excluding (including (excluding Institutional
(at offer) CDSC)(4) CDSC) CDSC) CDSC) Class

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 months 3 months 3 months 3 months
ended ended ended ended
10/31/97 (13.77%) 10/31/97 (13.25%) (9.63%) 10/31/97 (10.60%) (9.70%) 10/31/97 (9.43%)

6 months 6 months 6 months 6 months
ended ended ended ended
10/31/97 (0.71%)(5) 10/31/97 (0.13%) 3.87% 10/31/97 2.87% 3.87% 10/31/97 4.44%

9 months 9 months 9 months 9 months
ended ended ended ended
10/31/97 1.05% 10/31/97 1.49% 5.49% 10/31/97 4.48% 5.48% 10/31/97 6.30%

1 year 1 year 1 year 1 year
ended ended ended ended
10/31/97 2.60% 10/31/97 2.96% 6.95% 10/31/97 5.85% 6.85% 10/31/97 8.04%

3 years 3 years 3 years 3 years
ended ended ended ended
10/31/97 16.00% 10/31/97 16.38% 19.38% 10/31/97 19.21% 19.21% 10/31/97 21.50%

Period Period Period Period
12/3/93(3) 3/29/94(3) 5/10/94(3) 2/3/94(3)
through through through through
10/31/97 27.84% 10/31/97 21.45% 24.45% 10/31/97 24.51% 24.51% 10/31/97 27.84%

</TABLE>

- ----------------------------

(1) The Manager has committed to waive a portion of its annual compensation
or pay expenses to limit the operating expenses of the Funds. See
Investment Management Agreements. In the absence of such waivers or
payments, performance would have been affected negatively.

(2) The 12b-1 fees payable by each Fund for Class A Shares were at a rate
equal to 0.35% of the average daily net assets. Beginning May 6, 1996,
the payments were set at 0.30%. Performance calculations for periods
after May 6, 1996 will be made using the lower 12b-1 fee rate. The
maximum front-end sales charge was reduced from 5.50% to 4.75% effective
May 6, 1996. The above performance figures are calculated using 4.75% as
the applicable sales charge for all time periods.
(3) Commencement of operations.
(4) Effective May 6, 1996, Class B Shares will be subject to a CDSC schedule
of (i) 4% if shares are redeemed within two years of purchase; (ii) 3%
if shares are redeemed during the third or fourth year following
purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; (iv) 1% if shares are redeemed during the sixth year
following purchase; and (v) 0% thereafter.
The above performance figures are calculated using the new applicable
CDSC schedule.

(5) For the six months ended October 31, 1997, cumulative total return for
Overseas Equity Fund A Class at net asset value was 4.25%.

-28-

<PAGE>

(DAF-SAI/PART B)
<TABLE>
<CAPTION>

New Pacific Fund
Class B Class B Class C Class C
Class A Shares Shares Shares Shares
Shares(2) (including (excluding (including (excluding Institutional
(at offer) CDSC)(4) CDSC) CDSC) CDSC) Class

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 months 3 months 3 months 3 months
ended ended ended ended
10/31/97 (33.42%) 10/31/97 (32.94%) (30.15%) 10/31/97 (30.97%) (30.28%) 10/31/97 (30.04%)

6 months 6 months 6 months 6 months
ended ended ended ended
10/31/97 (27.84%)(5) 10/31/97 (27.51%) (24.49%) 10/31/97 (25.42%) (24.67%) 10/31/97 (24.11%)

9 months 9 months 9 months 9 months
ended ended ended ended
10/31/97 (28.82%) 10/31/97 (28.53%) (25.55%) 10/31/97 (26.48%) (25.74%) 10/31/97 (25.03%)

1 year 1 year 1 year 1 year
ended ended ended ended
10/31/97 (24.90%) 10/31/97 (24.81%) (21.72%) 10/31/97 (22.61%) (21.85%) 10/31/97 (20.79%)

3 years 3 years 3 years 3 years
ended ended ended ended
10/31/97 (30.06%) 10/31/97 (30.15%) (28.08%) 10/31/97 (28.18%) (28.18%) 10/31/97 (25.61%)

Period Period Period Period
12/3/93(3) 3/29/94(3) 7/7/94(3) 2/3/94(3)
through through through through
10/31/97 (26.93%) 10/31/97 (24.14%) (21.90%) 10/31/97 (23.51%) (23.51%) 10/31/97 (30.08%)

</TABLE>

- ----------------------------

(1) The Manager has committed to waive a portion of its annual compensation
or pay expenses to limit the operating expenses of the Funds. See
Investment Management Agreements. In the absence of such waivers or
payments, performance would have been affected negatively.

(2) The 12b-1 fees payable by each Fund for Class A Shares were at a rate
equal to 0.35% of the average daily net assets. Beginning May 6, 1996,
the payments were set at 0.30%. Performance calculations for periods
after May 6, 1996 will be made using the lower 12b-1 fee rate. The
maximum front-end sales charge was reduced from 5.50% to 4.75% effective
May 6, 1996. The above performance figures are calculated using 4.75% as
the applicable sales charge for all time periods.
(3) Commencement of operations.
(4) Effective May 6, 1996, Class B Shares will be subject to a CDSC schedule
of (i) 4% if shares are redeemed within two years of purchase; (ii) 3%
if shares are redeemed during the third or fourth year following
purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; (iv) 1% if shares are redeemed during the sixth year
following purchase; and (v) 0% thereafter.
The above performance figures are calculated using the new applicable
CDSC schedule.

(5) For the six months ended October 31, 1997, cumulative total return for
New Pacific Fund A Class at net asset value was (24.25%).

-29-

<PAGE>

(DAF-SAI/PART B)

Because every investor's goals and risk threshold are different, the
Distributor, as distributor for the Funds and other mutual funds available
from Delaware Investments, will provide general information about investment
alternatives and scenarios that will allow investors to assess their personal
goals. This information will include general material about investing as well
as materials reinforcing various industry-accepted principles of prudent and
responsible personal financial planning. One typical way of addressing these
issues is to compare an individual's goals and the length of time the
individual has to attain these goals to his or her risk threshold. In
addition, the Distributor will provide information that discusses the
Manager's and Sub-Adviser's overriding investment philosophy and how that
philosophy impacts the Funds', and other Delaware Investments funds',
investment disciplines employed in seeking their objectives. The Distributor
may also from time to time cite general or specific information about the
institutional clients of the Manager and Sub-Adviser, including the number of
such clients serviced by such persons.

Dollar-Cost Averaging
For many people, deciding when to invest can be a difficult decision.
Security prices tend to move up and down over various market cycles and logic
says to invest when prices are low. However, even experts can't always pick
the highs and the lows. By using a strategy known as dollar-cost averaging,
you schedule your investments ahead of time. If you invest a set amount on a
regular basis, that money will always buy more shares when the price is low
and fewer when the price is high. You can choose to invest at any regular
interval--for example, monthly or quarterly--as long as you stick to your
regular schedule. Dollar-cost averaging looks simple and it is, but there are
important things to remember.

Dollar-cost averaging works best over longer time periods, and it
doesn't guarantee a profit or protect against losses in declining markets. If
you need to sell your investment when prices are low, you may not realize a
profit no matter what investment strategy you utilize. That's why dollar-cost
averaging can make sense for long-term goals. Since the potential success of a
dollar-cost averaging program depends on continuous investing, even through
periods of fluctuating prices, you should consider your dollar-cost averaging
program a long-term commitment and invest an amount you can afford and
probably won't need to withdraw. You also should consider your financial
ability to continue to purchase shares during periods of high fund share
prices. Delaware Investments offers three services -- Automatic Investing
Program, Direct Deposit Program and the Wealth Builder Option -- that can help
to keep your regular investment program on track. See Investing by Electronic
Fund Transfer - Direct Deposit Purchase Plan and Automatic Investing Plan
under Investment Plans and Wealth Builder Option under Investment Plans for a
complete description of these services, including restrictions or limitations.

-30-

<PAGE>

(DAF-SAI/PART B)

The example below illustrates how dollar-cost averaging can work. In a
fluctuating market, the average cost per share over a period of time will be
lower than the average price per share for the same time period.

Investment Price Per Number of
Amount Share Shares Purchased

Month 1 $100 $10.00 10
Month 2 $100 $12.50 8
Month 3 $100 $5.00 12
Month 4 $100 $10.00 10
----- ------ --
$400 $37.50 48

Total Amount Invested: $400
Total Number of Shares Purchased: 48
Average Price Per Share: $9.38 ($37.50/4)
Average Cost Per Share: $8.33 ($400/48 shares)

This example is for illustration purposes only. It is not intended to
represent the actual performance of any stock or bond fund available from
Delaware Investments.

THE POWER OF COMPOUNDING
When you opt to reinvest your current income for additional Fund
shares, your investment is given yet another opportunity to grow. It's called
the Power of Compounding. Each Fund may include illustrations showing the
power of compounding in advertisements and other types of literature.

-31-

<PAGE>

(DAF-SAI/PART B)

TRADING PRACTICES AND BROKERAGE

Fund transactions are executed by the Manager or any sub-adviser
(collectively referred to in this section as the "Manager") on behalf of the
Fund in accordance with the standards described below.

Brokers, dealers, banks and others are selected to execute
transactions for the purchase or sale of portfolio securities or other
instruments on the basis of the Manager's judgment of their professional
capability to provide the service. The primary consideration is to have
brokers, dealers or banks execute securities transactions at best price and
execution. Best price and execution refers to many factors, including the
price paid or received for a security, the commission charged, the promptness
and reliability of execution, the confidentiality and placement accorded the
order and other factors affecting the overall benefit obtained by the account
on the transaction. Trades are generally made on a net basis where securities
are either bought or sold directly from or to a broker, dealer or bank or
others. In these instances, there is no direct commission charged, but there
is a spread (the difference between the buy and sell price) which is the
equivalent of a commission. When a commission is paid, the Funds pay
reasonably competitive brokerage commission rates based upon the professional
knowledge of the Manager's trading department as to rates paid and charged for
similar transactions throughout the securities industry. In some instances,
the Funds pay a minimal share transaction cost when the transaction presents
no difficulty.

During the past three fiscal years, the aggregate dollar amounts of
brokerage commissions paid by U.S. Growth Fund, Overseas Equity Fund and New
Pacific Fund were as follows:

October 31,
1997 1996 1995
---- ---- ----

U.S. Growth Fund $85,141 $55,744 $27,955
Overseas Equity Fund $30,918 $31,960 $31,838
New Pacific Fund $264,369 $236,538 $142,441

The Manager may allocate out of all commission business generated
by all of the funds and accounts under their management, brokerage business to
brokers, dealers or members of an exchange who provide brokerage and research
services. These services include advice, either directly or through
publications or writings, as to the value of securities, the advisability of
investing in, purchasing or selling securities, and the availability of
securities or purchasers or sellers of securities; furnishing of analyses and
reports concerning issuers, securities or industries; providing information on
economic factors and trends; assisting in determining portfolio strategy;
providing computer software and hardware used in security analyses; and
providing portfolio performance evaluation and technical market analyses. Such
services are used by the Manager in connection with its investment
decision-making process with respect to one or more funds and accounts managed
by it, and may not be used, or used exclusively, with respect to the fund or
account generating the brokerage.

During the fiscal year ended October 31, 1997, portfolio
transactions of U.S. Growth Fund, Overseas Equity Fund and New Pacific Fund in
the amounts of $97,469,359, $10,018,547 and $47,921,076, respectively,
resulting in brokerage commissions of $85,141, $30,918 and $264,369,
respectively, were directed to brokers for brokerage and research services
provided.

-32-

<PAGE>

(DAF-SAI/PART B)

As provided in the 1934 Act and the Investment Management and
Sub-Advisory Agreements, higher commissions are permitted to be paid to
brokers, dealers or members of an exchange who provide brokerage and research
services than to broker, dealers or members of an exchange who do not provide
such services, if such higher commissions are deemed reasonable in relation to
the value of the brokerage and research services provided. Although
transactions are directed to brokers, dealers or members of an exchange who
provide such brokerage and research services, the Fund believes that the
commissions paid to such broker/dealers are not, in general, higher than
commissions that would be paid to broker/dealers not providing such services
and that such commissions are reasonable in relation to the value of the
brokerage and research services provided. In some instances, services may be
provided to the Manager which constitute in some part brokerage and research
services used by the Manager in connection with its investment decision-making
process and constitute in some part services used by the Manager in connection
with administrative or other functions not related to its investment
decision-making process. In such cases, the Manager will make a good faith
allocation of brokerage and research services and will pay out of its own
resources for services used by the Manager in connection with administrative
or other functions not related to its investment decision-making process. In
addition, so long as no fund is disadvantaged, portfolio transactions which
generate commissions or their equivalent are allocated to broker/dealers who
provide daily portfolio pricing services to the Funds and to other funds
available from Delaware Investments. Subject to best price and execution,
commissions allocated to brokers providing such pricing services may or may
not be generated by the funds receiving the pricing service.

The Manager may place a combined order for two or more accounts or
funds engaged in the purchase or sale of the same security if, in its
judgment, joint execution is in the best interest of each participant and will
result in best price and execution. Transactions involving commingled orders
are allocated in a manner deemed equitable to each account or fund. When a
combined order is executed in a series of transactions at different prices,
each account participating in the order may be allocated an average price
obtained from the executing broker. It is believed that the ability of the
accounts to participate in volume transactions will generally be beneficial to
the accounts and funds. Although it is recognized that, in some cases, the
joint execution of orders could adversely affect the price or volume of the
security that a particular account or fund may obtain, it is the opinion of
the Manager and the Board of Directors that the advantages of combined orders
outweigh the possible disadvantages of separate transactions.

Consistent with the Conduct Rules of the National Association of
Securities Dealers, Inc. (the "NASD"), and subject to seeking best price and
execution, the Manager may place orders with broker/dealers that have agreed
to defray certain expenses of the funds available from Delaware Investments
such as custodian fees, and may, at the request of the Distributor, give
consideration to sales of shares of such funds as a factor in the selection of
brokers and dealers to execute portfolio transactions.

Subject to the above considerations, an affiliate of the Manager
may act as a securities broker for the Funds. In order for an affiliate of the
Manager to effect any portfolio transactions for the Funds, the commissions,
fees or other remuneration received by the affiliate must be reasonable and
fair compared to the commissions, fees or other remuneration paid to other
brokers in connection with comparable transactions involving similar
securities being purchased or sold on an exchange during a comparable period
of time. This standard would allow an affiliate of the Manager to receive no
more than the remuneration which would be expected to be received by an
unaffiliated broker in a commensurate arm's-length transaction. Furthermore,
the Directors of Adviser Funds, Inc., including a majority of the Directors
who are not "interested" persons, have adopted procedures which are reasonably
designed to provide that any commissions, fees or other remuneration paid to
an affiliate of the Manager are consistent with the foregoing standard. In
accordance with Section 11(a) under the 1934 Act, an affiliate of the Manager
may not retain compensation for effecting transactions on a national
securities exchange for the Funds unless Adviser Funds, Inc. has expressly
authorized the retention of such compensation in a written contract executed
by Adviser Funds,

-33-

<PAGE>

(DAF-SAI/PART B)

Inc. and such affiliate. Section 11(a) provides that an affiliate of the
Manager must furnish to the Adviser Funds, Inc. at least annually a statement
setting forth the total amount of all compensation retain by the affiliate
from transactions effected for the Funds during the applicable period.
Brokerage and futures transactions with an affiliate of the Manager are also
subject to such fiduciary standards as may be imposed by applicable law. No
such trade have been made through affiliates to date.

Portfolio Turnover
While the Funds do not intend to trade in securities for
short-term profits, securities may be sold without regard to the amount of
time they have been held by a Fund when warranted by the circumstances. A
Fund's portfolio turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities for the particular fiscal year by
the monthly average of the value of the portfolio securities owned by the
Fund, during the particular fiscal year, exclusive of securities whose
maturities at the time of acquisition are one year or less. Securities with
remaining maturities of one year or less at the date of acquisition are
excluded from the calculation. A portfolio turnover rate of 100% would occur,
for example, if all the securities in the Fund's portfolio were replaced once
during a period of one year. A high rate of portfolio turnover in any year may
increase brokerage commissions paid and could result in high amounts of
realized investment gain subject to the payment of taxes by shareholders. The
turnover rate may also be affected by cash requirements from redemptions and
repurchases of fund shares.

During the past two fiscal years, the portfolio turnover rates of
the Funds were as follows:

October 31,
1997 1996

U.S. Growth Fund 144% 131%
Overseas Equity Fund 18% 21%
New Pacific Fund 178% 163%

-34-

<PAGE>

(DAF-SAI/PART B)

PURCHASING SHARES

The Distributor serves as the national distributor for each Fund's
shares and has agreed to use its best efforts to sell shares of each Fund. See
the Prospectuses for information on how to invest. Shares of each Fund are
offered on a continuous basis and may be purchased through authorized
investment dealers or directly by contacting Adviser Funds, Inc. or the
Distributor.

The minimum initial investment generally is $1,000 for Class A
Shares, Class B Shares and Class C Shares. Subsequent purchases of such
classes generally must be at least $100. The initial and subsequent investment
minimums for Class A Shares will be waived for purchases by officers,
directors and employees of any Delaware Investments fund, the Manager or any
of the Manager's affiliates if the purchases are made pursuant to a payroll
deduction program. Shares purchased pursuant to the Uniform Gifts to Minors
Act or Uniform Transfers to Minors Act and shares purchased in connection with
an Automatic Investing Plan are subject to a minimum initial purchase of $250
and a minimum subsequent purchase of $25. Accounts opened under the Asset
Planner service are subject to a minimum initial investment of $2,000 per
Asset Planner Strategy selected. There are no minimum purchase requirements
for the Institutional Classes, but certain eligibility requirements must be
satisfied.

Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000. For Class C Shares, each purchase must be in an amount
that is less than $1,000,000. See Investment Plans for purchase limitations
applicable to retirement plans. Adviser Funds, Inc. will reject any purchase
order for more than $250,000 of Class B Shares and $1,000,000 or more of Class
C Shares. An investor may exceed these limitations by making cumulative
purchases over a period of time. In doing so, an investor should keep in mind,
however, that reduced front-end sales charges apply to investments of $100,000
or more in Class A Shares, and that Class A Shares are subject to lower annual
12b-1 Plan expenses than Class B Shares and Class C Shares and generally are
not subject to a CDSC.

Selling dealers are responsible for transmitting orders promptly.
Adviser Funds, Inc. reserves the right to reject any order for the purchase of
its shares of any Fund if in the opinion of management such rejection is in
such Fund's best interest.

The NASD has adopted amendments to its Conduct Rules, as amended,
relating to investment company sales charges. Adviser Funds, Inc. and the
Distributor intend to operate in compliance with these rules.

Class A Shares are purchased at the offering price which reflects a
maximum front-end sales charge of 4.75%; however, lower front-end sales
charges apply for larger purchases. Class A Shares are also subject to annual
12b-1 Plan expenses.

Class B Shares are purchased at net asset value and are subject to a
CDSC of: (i) 4% if shares are redeemed within two years of purchase; (ii) 3%
if shares are redeemed during the third or fourth year following purchase;
(iii) 2% if shares are redeemed during the fifth year following purchase; and
(iv) 1% if shares are redeemed during the sixth year following purchase. Class
B Shares are also subject to annual 12b-1 Plan expenses which are higher than
those to which Class A Shares are subject and are assessed against Class B
Shares for approximately eight years after purchase. Class B Shares will
automatically convert to Class A Shares at the end of approximately eight
years after purchase and, thereafter, be subject to annual 12b-1 Plan expenses
of up to a maximum of 0.35% (currently no more than 0.30%) of average daily
net assets of such shares. See Automatic Conversion of Class B Shares under
Classes of Shares in the Fund Classes' Prospectus.

-35-

<PAGE>

(DAF-SAI/PART B)

Class C Shares are purchased at net asset value and are subject to a
CDSC of 1% if shares are redeemed within 12 months following purchase. Class C
Shares are also subject to annual 12b-1 Plan expenses for the life of the
investment which are equal to those to which Class B Shares are subject.
Unlike Class B Shares, Class C Shares do not convert to another class.

Institutional Class shares are purchased at the net asset value per
share without the imposition of a front-end or contingent deferred sales
charge or 12b-1 Plan expenses. See Plans Under Rule 12b-1 for the Fund Classes
under Purchasing Shares, and Determining Offering Price and Net Asset Value in
this Part B.

Class A Shares, Class B Shares, Class C Shares and Institutional
Class shares represent a proportionate interest in a Fund's assets and will
receive a proportionate interest in that Fund's income, before application, as
to Class A, Class B and Class C Shares, of any expenses under that Fund's
12b-1 Plans.

Certificates representing shares purchased are not ordinarily issued
unless, in the case of Class A Shares or Institutional Class shares, a
shareholder submits a specific request. Certificates are not issued in the
case of Class B Shares or Class C Shares or in the case of any retirement
plans accounts including self-directed IRAs. However, purchases not involving
the issuance of certificates are confirmed to the investor and credited to the
shareholder's account on the books maintained by Delaware Service Company,
Inc. (the "Transfer Agent"). The investor will have the same rights of
ownership with respect to such shares as if certificates had been issued. An
investor that is permitted to obtain a certificate may receive a certificate
representing full share denominations purchased by sending a letter signed by
each owner of the account to the Transfer Agent requesting the certificate. No
charge is assessed by Adviser Funds, Inc. for any certificate issued. A
shareholder may be subject to fees for replacement of a lost or stolen
certificate, under certain conditions, including the cost of obtaining a bond
covering the lost or stolen certificate. Please contact your Fund for further
information. Investors who hold certificates representing any of their shares
may only redeem those shares by written request. The investor's certificate(s)
must accompany such request.

Alternative Purchase Arrangements

The alternative purchase arrangements of Class A Shares, Class B
Shares and Class C Shares permit investors to choose the method of purchasing
shares that is most suitable for their needs given the amount of their
purchase, the length of time they expect to hold their shares and other
relevant circumstances. Investors should determine whether, given their
particular circumstances, it is more advantageous to purchase Class A Shares
and incur a front-end sales charge and annual 12b-1 Plan expenses of up to a
maximum of 0.35% (currently, no more than 0.30%) of the average daily net
assets of Class A Shares or to purchase either Class B or Class C Shares and
have the entire initial purchase amount invested in the Fund with the
investment thereafter subject to a CDSC and annual 12b-1 Plan expenses.

Class A Shares

Purchases of $100,000 or more of Class A Shares at the offering price
carry reduced front-end sales charges and may include a series of purchases
over a 13-month period under a Letter of Intention signed by the purchaser.
See Front-End Sales Charge Alternative - Class A Shares in the Prospectus for
the Fund Classes for a table illustrating reduced front-end sales charges. See
also Special Purchase Features - Class A Shares, below, for more information
on ways in which investors can avail themselves of reduced front-end sales
charges and other purchase features.

Certain dealers who enter into an agreement to provide extra training
and information on Delaware Investments products and services and who increase
sales of Delaware Investments funds may receive an additional commission of up
to 0.15% of the offering price in connection with sales of Class A Shares.
Such dealers

-36-

<PAGE>

(DAF-SAI/PART B)

must meet certain requirements in terms of organization and distribution
capabilities and their ability to increase sales. The Distributor should be
contacted for further information on these requirements as well as the basis
and circumstances upon which the additional commission will be paid.
Participating dealers may be deemed to have additional responsibilities under
the securities laws.

Dealer's Commission

As described more fully in the Prospectus for the Fund Classes, for
initial purchases of Class A Shares of $1,000,000 or more, a dealer's
commission may be paid by the Distributor to financial advisers through whom
such purchases are effected. See Front-End Sales Charge Alternative - Class A
Shares in the Prospectus for the Fund Classes for the applicable schedule and
further details.

Contingent Deferred Sales Charge - Class B Shares and Class C Shares

Class B Shares and Class C Shares are purchased without a front-end
sales charge. Class B Shares redeemed within six years of purchase may be
subject to a CDSC at the rates set forth above and Class C Shares redeemed
within 12 months of purchase may be subject to a CDSC of 1%. CDSCs are charged
as a percentage of the dollar amount subject to the CDSC. The charge will be
assessed on an amount equal to the lesser of the net asset value at the time
of purchase of the shares being redeemed or the net asset value of those
shares at the time of redemption. No CDSC will be imposed on increases in net
asset value above the initial purchase price, nor will a CDSC be assessed on
redemption of shares acquired through reinvestment of dividends or capital
gains distributions. See Waiver of Contingent Deferred Sales Charge - Class B
Shares and Class C Shares under Redemption and Exchange in the Prospectus for
the Fund Classes for a list of the instances in which the CDSC is waived.
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares, Class B Shares will still be subject to the
annual 12b-1 Plan expenses of up to 1% of average daily net assets of those
shares. At the end of approximately eight years after purchase, the investor's
Class B Shares will be automatically converted into Class A Shares of the same
Fund. See Automatic Conversion of Class B Shares under Classes of Shares in
the Fund Classes' Prospectus. Such conversion will constitute a tax-free
exchange for federal income tax purposes. See Dividends, Distributions and
Taxes in the Prospectus for the Fund Classes.

Plans Under Rule 12b-1 for the Fund Classes

Pursuant to Rule 12b-1 under the 1940 Act, Adviser Funds, Inc. has
adopted a separate plan for each of the Class A Shares, Class B Shares and
Class C Shares of each Fund (the "Plans"). Each Plan permits the particular
Fund to pay for certain distribution, promotional and related expenses
involved in the marketing of only the Classes of shares to which the Plan
applies. The Plans do not apply to the Institutional Classes of shares. Such
shares are not included in calculating the Plans' fees, and the Plans are not
used to assist in the distribution and marketing of shares of the
Institutional Classes. Shareholders of the Institutional Classes may not vote
on matters affecting the Plans.

The Plans permit the Funds, pursuant to the Distribution Agreements,
to pay out of the assets of Class A Shares, Class B Shares and Class C Shares
monthly fees to the Distributor for its services and expenses in distributing
and promoting sales of shares of such classes. These expenses include, among
other things, preparing and distributing advertisements, sales literature and
prospectuses and reports used for sales purposes, compensating sales and
marketing personnel, and paying distribution and maintenance fees to
securities brokers and dealers who enter into agreements with the Distributor.
The Plan expenses relating to Class B Shares and Class C Shares are also used
to pay the Distributor for advancing the commission costs to dealers with
respect to the initial sale of such shares.

-37-

<PAGE>

(DAF-SAI/PART B)

In addition, the Funds may make payments out of the assets of Class A
Shares, Class B Shares and Class C Shares directly to other unaffiliated
parties, such as banks, who either aid in the distribution of shares of, or
provide services to, such classes.

The maximum aggregate fee payable by the Funds under the Plans, and
the Funds' Distribution Agreements, is on an annual basis up to 0.35% of
average daily net assets of Class A Shares, and up to 1% (0.25% of which are
service fees to be paid to the Distributor, dealers and others for providing
personal service and/or maintaining shareholder accounts) of each of Class B
Shares' and Class C Shares' average daily net assets for the year. Adviser
Funds, Inc.'s Board of Directors may reduce these amounts at any time. The
Distributor has agreed to waive these distribution fees to the extent such
fees for any day exceeds the net investment income realized by the Fund
Classes for such day.

Effective at the close of business on May 3, 1996, the annual fee
payable on a monthly basis under Class A Shares' Plan is equal to 0.30% of
average daily net assets.

All of the distribution expenses incurred by the Distributor and
others, such as broker/dealers, in excess of the amount paid on behalf of
Class A Shares, Class B Shares and Class C Shares would be borne by such
persons without any payment from such classes. Subject to seeking best price
and execution, the Fund may, from time to time, buy or sell portfolio
securities from or to firms which receive payments under the Plans. From time
to time, the Distributor may pay additional amounts from its own resources to
dealers for aid in distribution or for aid in providing administrative
services to shareholders.

The Plans and the Distribution Agreement, as amended, have been
approved by the Board of Directors of Adviser Funds, Inc., including a
majority of the directors who are not "interested persons" (as defined in the
1940 Act) of Adviser Funds, Inc. and who have no direct or indirect financial
interest in the Plans, by vote cast in person at a meeting duly called for the
purpose of voting on the Plans and such Distribution Agreement. Continuation
of the Plans and the Distribution Agreement, as amended, must be approved
annually by the Board of Directors in the same manner as specified above.

Each year, the directors must determine whether continuation of the
Plans is in the best interest of shareholders of, respectively, Class A
Shares, Class B Shares and Class C Shares of each Fund and that there is a
reasonable likelihood of the Plan relating to a Fund Class providing a benefit
to the relevant shareholders of that Class. The Plans and the Distribution
Agreement, as amended, may be terminated at any time without penalty by a
majority of those directors who are not "interested persons" or by a majority
vote of the relevant Class' outstanding voting securities . Any amendment
materially increasing the percentage payable under the Plans must likewise be
approved by a majority vote of the relevant Class' outstanding voting
securities , as well as by a majority vote of those directors who are not
"interested persons." With respect to the Class A Shares' Plan, any material
increase in the maximum percentage payable thereunder must also be approved by
a majority of the outstanding voting securities of the respective Fund's B
Class. Also, any other material amendment to the Plans must be approved by a
majority vote of the directors, including a majority of the directors who are
not "interested persons" of Adviser Funds, Inc. having no interest in the
Plans. In addition, in order for the Plans to remain effective, the selection
and nomination of directors who are not "interested persons" of Adviser Funds,
Inc. must be effected by the directors who themselves are not "interested
persons" and who have no direct or indirect financial interest in the Plans.
Persons authorized to make payments under the Plans must provide written
reports at least quarterly to the Board of Directors for their review.

-38-

<PAGE>

(DAF-SAI/PART B)

For the fiscal year ended October 31, 1997, payments from Class A
Shares, Class B Shares and Class C Shares of U.S. Growth Fund amounted to
$13,629, $2,255 and $183, respectively. Such amounts were used for the
following purposes:

<TABLE>
<CAPTION>
U.S. Growth Fund U.S. Growth Fund U.S. Growth Fund
A Class B Class C Class
------- ------- -------

<S> <C> <C> <C>
Advertising ----- ----- -----
Annual/Semi-Annual Reports $2,572 ----- -----
Broker Trails $5,037 $562 -----
Broker Sales Charges ----- $934 $130
Dealer Service Expenses ----- ----- -----
Interest on Broker Sales Charges ----- $644 $12
Commissions to Wholesalers $82 $85 $35
Promotional-Broker Meetings $660 $23 $6
Promotional-Other $5,205 ----- -----
Prospectus Printing $18 ----- -----
Telephone $28 $7 -----
Wholesaler Expenses $27 ----- -----
Other ----- ----- -----
</TABLE>

For the fiscal year ended October 31, 1997, payments from Class A
Shares, Class B Shares and Class C Shares of Overseas Equity Fund amounted to
$11,432, $3,093 and $279, respectively. Such amounts were used for the
following purposes:
<TABLE>
<CAPTION>

Overseas Equity Overseas Equity Overseas Equity
Fund A Class Fund B Class Fund C Class
------------ ------------ ------------
<S> <C> <C> <C>
Advertising $959 ----- -----
Annual/Semi-Annual Reports $3,068 ----- -----
Broker Trails $4,115 $773 -----
Broker Sales Charges ----- $1,182 -----
Dealer Service Expenses $113 $14 -----
Interest on Broker Sales Charges ----- $983 $17
Commissions to Wholesalers $205 $80 $262
Promotional-Broker Meetings $1,004 $31 -----
Promotional-Other $1,586 ----- -----
Prospectus Printing $106 ----- -----
Telephone $42 $7 -----
Wholesaler Expenses $234 $23 -----
Other ----- ----- -----
</TABLE>

-39-

<PAGE>

(DAF-SAI/PART B)

For the fiscal year ended October 31, 1997, payments from Class A
Shares, Class B Shares and Class C Shares of New Pacific Fund amounted to
$9,170, $1,485 and $121, respectively. Such amounts were used for the
following purposes:

New Pacific Fund New Pacific Fund New Pacific Fund
A Class B Class C Class
------- ------- -------

<S> <C> <C> <C>
Advertising $373 ----- -----
Annual/Semi-Annual Reports $2,817 ----- -----
Broker Trails $3,397 $370 -----
Broker Sales Charges ----- $459 $112
Dealer Service Expenses $104 ----- -----
Interest on Broker Sales Charges ----- $581 $5
Commissions to Wholesalers $210 $45 $3
Promotional-Broker Meetings $806 $28 $1
Promotional-Other $919 ----- -----
Prospectus Printing $108 ----- -----
Telephone $34 $1 -----
Wholesaler Expenses $402 $1 -----
Other ----- ----- -----
</TABLE>

Other Payments to Dealers - Class A Shares, Class B Shares and Class C Shares
From time to time at the discretion of the Distributor, all
registered broker/dealers whose aggregate sales of the Fund Classes exceed
certain limits as set by the Distributor, may receive from the Distributor an
additional payment of up to 0.25% of the dollar amount of such sales. The
Distributor may also provide additional promotional incentives or payments to
dealers that sell shares of Delaware Investments. In some instances, these
incentives or payments may be offered only to certain dealers who maintain,
have sold or may sell certain amounts of shares. The Distributor may also pay
a portion of the expense of preapproved dealer advertisements promoting the
sale of Delaware Investments fund shares.

Special Purchase Features - Class A Shares

Buying Class A Shares at Net Asset Value
Class A Shares may be purchased without a front-end sales charge
under the Dividend Reinvestment Plan and, under certain circumstances, the
Exchange Privilege and the 12-Month Reinvestment Privilege.

Current and former officers, directors and employees of Adviser
Funds, Inc., any other fund in Delaware Investments, the Manager, or any of
the Manager's current affiliates and those that may in the future be created,
legal counsel to the funds, and registered representatives and employees of
broker/dealers who have entered into Dealer's Agreements with the Distributor
may purchase Class A Shares and any such class of shares of any of the other
funds available from Delaware Investments, including any fund that may be
created, at the net asset value per share. Family members (regardless of age)
of such persons at their direction, and any employee benefit plan established
by any of the foregoing funds, corporations, counsel or broker/dealers may
also purchase shares at net asset value. Class A Shares may also be purchased
at net asset value by current and former officers, directors and employees
(and members of their families) of the Dougherty Financial Group LLC.
Purchases of Class A Shares may also be made by clients of registered
representatives of an authorized investment dealer at net asset value within
12 months of a change of the registered representative's employment, if the
purchase is funded by

-40-

<PAGE>

(DAF-SAI/PART B)

proceeds from an investment where a front-end sales charge, contingent
deferred sales charge or other sales charge has been assessed. Purchases of
Class A Shares may also be made at net asset value by bank employees who
provide services in connection with agreements between the bank and
unaffiliated brokers or dealers concerning sales of shares of Delaware
Investments funds. Officers, directors and key employees of institutional
clients of the Manager or any of its affiliates may purchase Class A Shares at
net asset value. Moreover, purchases may be effected at net asset value for
the benefit of the clients of brokers, dealers and registered investment
advisers affiliated with a broker or dealer, if such broker, dealer or
investment adviser has entered into an agreement with the Distributor
providing specifically for the purchase of Class A Shares in connection with
special investment products, such as wrap accounts or similar fee based
programs. Such purchasers are required to sign a letter stating that the
purchase is for investment only and that the securities may not be resold
except to the issuer. Such purchasers may also be required to sign or deliver
such other documents as Adviser Funds, Inc. may reasonably require to
establish eligibility for purchase at net asset value.

Purchases of Class A Shares at net asset value may also be made by
the following: financial institutions investing for the account of their trust
customers if they are not eligible to purchase shares of the Institutional
Class of a Fund; any group retirement plan (excluding defined benefit pension
plans), or such plans of the same employer, for which plan participant records
are maintained on the Delaware Investment & Retirement Services, Inc.
("DIRSI") proprietary record keeping system that (i) has in excess of $500,000
of plan assets invested in Class A Shares of Delaware Investments funds and
any stable value product available through Delaware Investments, or (ii) is
sponsored by an employer that has at any point after May 1, 1997 had more than
100 employees while such plan has held Class A Shares of a Delaware
Investments fund and such employer has properly represented to DIRSI in
writing that it has the requisite number of employees and has received written
confirmation back from DIRSI.

Investors in Delaware Investments Unit Investment Trusts may reinvest
monthly dividend checks and/or repayment of invested capital into Class A
Shares of any of the Funds available from Delaware Investments at net asset
value.

Adviser Funds, Inc. must be notified in advance that the trade
qualifies for purchase at net asset value.

Letter of Intention
The reduced front-end sales charges described above with respect to
Class A Shares are also applicable to the aggregate amount of purchases made
within a 13-month period pursuant to a written Letter of Intention provided by
the Distributor and signed by the purchaser, and not legally binding on the
signer or Adviser Funds, Inc. which provides for the holding in escrow by the
Transfer Agent, of 5% of the total amount of Class A Shares intended to be
purchased until such purchase is completed within the 13-month period. A
Letter of Intention may be dated to include shares purchased up to 90 days
prior to the date the Letter is signed. The 13-month period begins on the date
of the earliest purchase. If the intended investment is not completed, except
as noted below, the purchaser will be asked to pay an amount equal to the
difference between the front-end sales charge on Class A Shares purchased at
the reduced rate and the front-end sales charge otherwise applicable to the
total shares purchased. If such payment is not made within 20 days following
the expiration of the 13-month period, the Transfer Agent will

-41-

<PAGE>

(DAF-SAI/PART B)

surrender an appropriate number of the escrowed shares for redemption in order
to realize the difference. Such purchasers may include the value (at offering
price at the level designated in their Letter of Intention) of all their
shares of the Funds and of any class of any of the other mutual funds
available from Delaware Investments (except shares of any Delaware Investments
fund which do not carry a front-end sales charge, CDSC or Limited CDSC other
than shares of Delaware Group Premium Fund, Inc. beneficially owned in
connection with the ownership of variable insurance products, unless they were
acquired through an exchange from a Delaware Investments fund which carried a
front-end sales charge, CDSC or Limited CDSC) previously purchased and still
held as of the date of their Letter of Intention toward the completion of such
Letter.

Employers offering a Delaware Investments retirement plan may also
complete a Letter of Intention to obtain a reduced front-end sales charge on
investments of Class A Shares made by the plan. The aggregate investment level
of the Letter of Intention will be determined and accepted by the Transfer
Agent at the point of plan establishment. The level and any reduction in
front-end sales charge will be based on actual plan participation and the
projected investments in Delaware Investments funds that are offered with a
front-end sales charge, CDSC or Limited CDSC for a 13-month period. The
Transfer Agent reserves the right to adjust the signed Letter of Intention
based on this acceptance criteria. The 13-month period will begin on the date
this Letter of Intention is accepted by the Transfer Agent. If actual
investments exceed the anticipated level and equal an amount that would
qualify the plan for further discounts, any front-end sales charges will be
automatically adjusted. In the event this Letter of Intention is not fulfilled
within the 13-month period, the plan level will be adjusted (without
completing another Letter of Intention) and the employer will be billed for
the difference in front-end sales charges due, based on the plan's assets
under management at that time. Employers may also include the value (at
offering price at the level designated in their Letter of Intention) of all
their shares intended for purchase that are offered with a front-end sales
charge, CDSC or Limited CDSC of any class. Class B Shares and Class C Shares
of a Fund and other Delaware Investments funds which offer corresponding
classes of shares may also be aggregated for this purpose.

Combined Purchases Privilege

In determining the availability of the reduced front-end sales charge
previously set forth with respect to Class A Shares, purchasers may combine
the total amount of any combination of Class A Shares, Class B Shares and/or
Class C Shares of the Funds, as well as shares of any other class of any of
the other Delaware Investments funds (except shares of any Delaware
Investments fund which do not carry a front-end sales charge, CDSC or Limited
CDSC, other than shares of Delaware Group Premium Fund, Inc. beneficially
owned in connection with the ownership of variable insurance products, unless
they were acquired through an exchange from a Delaware Investments fund which
carried a front-end sales charge, CDSC or Limited CDSC). In addition, assets
held by investment advisory clients of the Manager or its affiliates in a
stable value account may be combined with other Delaware Investments fund
holdings.

The privilege also extends to all purchases made at one time by an
individual; or an individual, his or her spouse and their children under 21;
or a trustee or other fiduciary of trust estates or fiduciary accounts for the
benefit of such family members (including certain employee benefit programs).

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(DAF-SAI/PART B)

Right of Accumulation

In determining the availability of the reduced front-end sales charge
with respect to Class A Shares, purchasers may also combine any subsequent
purchases of Class A Shares, Class B Shares and Class C Shares of a Fund, as
well as shares of any other class of any of the other Delaware Investments
funds which offer such classes (except shares of any Delaware Investments fund
which do not carry a front-end sales charge, CDSC or Limited CDSC, other than
shares of Delaware Group Premium Fund, Inc. beneficially owned in connection
with the ownership of variable insurance products, unless they were acquired
through an exchange from a Delaware Investments fund which carried a front-end
sales charge, CDSC or Limited CDSC). If, for example, any such purchaser has
previously purchased and still holds Class A Shares and/or shares of any other
of the classes described in the previous sentence with a value of $40,000 and
subsequently purchases $60,000 at offering price of additional shares of Class
A Shares, the charge applicable to the $60,000 purchase would currently be
3.75%. For the purpose of this calculation, the shares presently held shall be
valued at the public offering price that would have been in effect were the
shares purchased simultaneously with the current purchase. Investors should
refer to the table of sales charges for Class A Shares in the Prospectus to
determine the applicability of the Right of Accumulation to their particular
circumstances.

12-Month Reinvestment Privilege

Holders of Class A Shares of a Fund (and of Institutional Classes
holding shares which were acquired through an exchange from one of the other
mutual funds available from Delaware Investments offered with a front-end
sales charge) who redeem such shares have one year from the date of redemption
to reinvest all or part of their redemption proceeds in Class A Shares of that
Fund or in Class A Shares of any of the other funds available from Delaware
Investments, subject to applicable eligibility and minimum purchase
requirements, in states where shares of such other funds may be sold, at net
asset value without the payment of a front-end sales charge. This privilege
does not extend to Class A Shares where the redemption of the shares triggered
the payment of a Limited CDSC. Persons investing redemption proceeds from
direct investments in mutual funds available from Delaware Investments offered
without a front-end sales charge will be required to pay the applicable sales
charge when purchasing Class A Shares. The reinvestment privilege does not
extend to a redemption of either Class B Shares or Class C Shares.

Any such reinvestment cannot exceed the redemption proceeds (plus any
amount necessary to purchase a full share). The reinvestment will be made at
the net asset value next determined after receipt of remittance. A redemption
and reinvestment could have income tax consequences. It is recommended that a
tax adviser be consulted with respect to such transactions. Any reinvestment
directed to a fund in which the investor does not then have an account will be
treated like all other initial purchases of a fund's shares. Consequently, an
investor should obtain and read carefully the prospectus for the fund in which
the investment is intended to be made before investing or sending money. The
prospectus contains more complete information about the fund, including
charges and expenses.

Investors should consult their financial advisers or the Transfer
Agent, which also serves as the Funds' shareholder servicing agent, about the
applicability of the Limited CDSC (see Contingent Deferred Sales Charge for
Certain Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange in the Fund Classes' Prospectus) in connection with
the features described above.

Group Investment Plans

Group Investment Plans which are not eligible to purchase shares of
the Institutional Classes may also benefit from the reduced front-end sales
charges for investments in Class A Shares set forth in the table in the
Prospectus, based on total plan assets. If a company has more than one plan
investing in Delaware Investments, then the total amount invested in all plans
would be used in determining the applicable front-end sales

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(DAF-SAI/PART B)

charge reduction upon each purchase, both initial and subsequent, upon
notification to the Fund in which the investment is being made at the time of
each such purchase. Employees participating in such Group Investment Plans may
also combine the investments made in their plan account when determining the
applicable front-end sales charge on purchases to non-retirement Delaware
Investments investment accounts if they so notify the Fund in which they are
investing in connection with each purchase. See Retirement Plans for the Fund
Classes under Investment Plans for information about Retirement Plans.

Institutional Classes

The Institutional Class of each Fund is available for purchase only
by: (a) retirement plans introduced by persons not associated with brokers or
dealers that are primarily engaged in the retail securities business and
rollover individual retirement accounts from such plans; (b) tax-exempt
employee benefit plans of the Manager or its affiliates and securities dealer
firms with a selling agreement with the Distributor; (c) institutional
advisory accounts of the Manager or its affiliates and those having client
relationships with Delaware Investment Advisers, a division of the Manager, or
its affiliates and their corporate sponsors, as well as subsidiaries and
related employee benefit plans and rollover individual retirement accounts
from such institutional advisory accounts; (d) a bank, trust company and
similar financial institution investing for its own account or for the account
of its trust customers for whom such financial institution is exercising
investment discretion in purchasing shares of the Class, except where the
investment is part of a program that requires payment to the financial
institution of a Rule 12b-1 Plan fee; and (e) registered investment advisers
investing on behalf of clients that consist solely of institutions and high
net-worth individuals having at least $1,000,000 entrusted to the adviser for
investment purposes, but only if the adviser is not affiliated or associated
with a broker or dealer and derives compensation for its services exclusively
from its clients for such advisory services.

Shares of Institutional Classes are available for purchase at net
asset value, without the imposition of a front-end or contingent deferred
sales charge and are not subject to Rule 12b-1 expenses.

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(DAF-SAI/PART B)

INVESTMENT PLANS

Reinvestment Plan/Open Account
Unless otherwise designated by shareholders in writing, dividends
from net investment income and distributions from realized securities profits,
if any, will be automatically reinvested in additional shares of the
respective Fund Class in which an investor has an account (based on the net
asset value in effect on the reinvestment date) and will be credited to the
shareholder's account on that date. All dividends and distributions of the
Institutional Class are reinvested in the accounts of the holders of such
shares (based on the net asset value in effect on the reinvestment date).
Confirmations of any distributions from realized securities profits will be
mailed to shareholders in the first quarter of each fiscal year.

Under the Reinvestment Plan/Open Account, shareholders may purchase
and add full and fractional shares to their plan accounts at any time either
through their investment dealers or by sending a check or money order to the
specific Fund and Class in which shares are being purchased. Such purchases,
which must meet the minimum subsequent purchase requirements set forth in the
Prospectuses and this Part B, are made for Class A Shares at the public
offering price, and for Institutional Class shares, Class B Shares and Class C
Shares at the net asset value, at the end of the day of receipt. A
reinvestment plan may be terminated at any time. This plan does not assure a
profit nor protect against depreciation in a declining market.

Reinvestment of Dividends in Other Delaware Investments Funds
Subject to applicable eligibility and minimum initial purchase
requirements and the limitations set forth below, holders of Class A Shares,
Class B Shares and Class C Shares may automatically reinvest dividends and/or
distributions in any of the mutual funds available from Delaware Investments,
including the Funds, in states where their shares may be sold. Such
investments will be at net asset value at the close of business on the
reinvestment date without any front-end sales charge or service fee. The
shareholder must notify the Transfer Agent in writing and must have
established an account in the fund into which the dividends and/or
distributions are to be invested. Any reinvestment directed to a fund in which
the investor does not then have an account will be treated like all other
initial purchases of a fund's shares. Consequently, an investor should obtain
and read carefully the prospectus for the fund in which the investment is
intended to be made before investing or sending money. The prospectus contains
more complete information about the fund, including charges and expenses. See
also Additional Methods of Adding to Your Investment - Dividend Reinvestment
Plan under How to Buy Shares in the Prospectus for the Fund Classes.

Subject to the following limitations, dividends and/or distributions
from other funds available from Delaware Investments may be invested in shares
of the Funds, provided an account has been established. Dividends from Class A
Shares may not be directed to Class B Shares or Class C Shares. Dividends from
Class B Shares may only be directed to other Class B Shares and dividends from
Class C Shares may only be directed to other Class C Shares.

Capital gains and/or dividend distributions to participants in the
following retirement plans are automatically reinvested into the same Delaware
Investments fund in which their investments are held: SAR/SEP, SEP/IRA, SIMPLE
IRA, SIMPLE 401(k), Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, or 403(b)(7) or 457 Deferred Compensation Plans.

Investing by Electronic Fund Transfer

Direct Deposit Purchase Plan--Investors may arrange for any Fund to
accept for investment in Class A Shares, Class B Shares or Class C Shares,
through an agent bank, preauthorized government or private recurring payments.
This method of investment assures the timely credit to the shareholder's
account of payments such as

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(DAF-SAI/PART B)

social security, veterans' pension or compensation benefits, federal salaries,
Railroad Retirement benefits, private payroll checks, dividends, and
disability or pension fund benefits. It also eliminates lost, stolen and
delayed checks.

Automatic Investing Plan--Shareholders of Class A Shares, Class B
Shares and Class C Shares may make automatic investments by authorizing, in
advance, monthly payments directly from their checking account for deposit
into their Fund account. This type of investment will be handled in either of
the following ways. (1) If the shareholder's bank is a member of the National
Automated Clearing House Association ("NACHA"), the amount of the investment
will be electronically deducted from his or her account by Electronic Fund
Transfer ("EFT"). The shareholder's checking account will reflect a debit each
month at a specified date although no check is required to initiate the
transaction. (2) If the shareholder's bank is not a member of NACHA,
deductions will be made by preauthorized checks, known as Depository Transfer
Checks. Should the shareholder's bank become a member of NACHA in the future,
his or her investments would be handled electronically through EFT.

* * *

Initial investments under the Direct Deposit Purchase Plan and the
Automatic Investing Plan must be for $250 or more and subsequent investments
under such plans must be for $25 or more. An investor wishing to take
advantage of either service must complete an authorization form. Either
service can be discontinued by the shareholder at any time without penalty by
giving written notice.

Payments to a Fund from the federal government or its agencies on
behalf of a shareholder may be credited to the shareholder's account after
such payments should have been terminated by reason of death or otherwise. Any
such payments are subject to reclamation by the federal government or its
agencies. Similarly, under certain circumstances, investments from private
sources may be subject to reclamation by the transmitting bank. In the event
of a reclamation, a Fund may liquidate sufficient shares from a shareholder's
account to reimburse the government or the private source. In the event there
are insufficient shares in the shareholder's account, the shareholder is
expected to reimburse the Fund.

Direct Deposit Purchases by Mail
Shareholders may authorize a third party, such as a bank or employer,
to make investments directly to their Fund accounts. Any Fund will accept
these investments, such as bank-by-phone, annuity payments and payroll
allotments, by mail directly from the third party. Investors should contact
their employers or financial institutions who in turn should contact Adviser
Funds, Inc. for proper instructions.

Wealth Builder Option

Shareholders can use the Wealth Builder Option to invest in the Fund
Classes through regular liquidations of shares in their accounts in other
mutual funds available from Delaware Investments. Shareholders of the Fund
Classes may elect to invest in one or more of the other mutual funds available
from Delaware Investments through the Wealth Builder Option. See Wealth
Builder Option and Redemption and Exchange in the Prospectus for the Fund
Classes.

Under this automatic exchange program, shareholders can authorize
regular monthly investments (minimum of $100 per fund) to be liquidated from
their account and invested automatically into other mutual funds available
from Delaware Investments, subject to the conditions and limitations set forth
in the Fund Classes' Prospectus.

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(DAF-SAI/PART B)

The investment will be made on the 20th day of each month (or, if the fund
selected is not open that day, the next business day) at the public offering
price or net asset value, as applicable, of the fund selected on the date of
investment. No investment will be made for any month if the value of the
shareholder's account is less than the amount specified for investment.

Periodic investment through the Wealth Builder Option does not insure
profits or protect against losses in a declining market. The price of the fund
into which investments are made could fluctuate. Since this program involves
continuous investment regardless of such fluctuating value, investors
selecting this option should consider their financial ability to continue to
participate in the program through periods of low fund share prices. This
program involves automatic exchanges between two or more fund accounts and is
treated as a purchase of shares of the fund into which investments are made
through the program. See Exchange Privilege for a brief summary of the tax
consequences of exchanges. Shareholders can terminate their participation in
Wealth Builder at any time by giving written notice to the fund from which
exchanges are made.

Asset Planner
To invest in Delaware Investments funds using the Asset Planner asset
allocation service, you should complete an Asset Planner Account Registration
Form, which is available only from a financial adviser or investment dealer.
Effective September 1, 1997, the Asset Planner Service is only available to
financial advisers or investment dealers who have previously used this
service. The Asset Planner service offers a choice of four predesigned asset
allocation strategies (each with a different risk/reward profile) in
predetermined percentages in Delaware Investments' funds. With the help of a
financial adviser, you may also design a customized asset allocation strategy.

The sales charge on an investment through the Asset Planner service
is determined by the individual sales charges of the underlying funds and
their percentage allocation in the selected Strategy. Exchanges from existing
Delaware Investments accounts into the Asset Planner service may be made at
net asset value under the circumstances described under Investing by Exchange
in the Prospectus. Also see Buying Class A Shares at Net Asset Value under
Classes of Shares. The minimum initial investment per Strategy is $2,000;
subsequent investments must be at least $100. Individual fund minimums do not
apply to investments made using the Asset Planner service. Class A Shares,
Class B Shares and Class C Shares are available through the Asset Planner
service. Generally, only shares within the same class may be used within the
same Strategy. However, Class A Shares of a Fund and of other funds available
from Delaware Investments may be used in the same Strategy with consultant
class shares that are offered by certain other Delaware Investments funds.

An annual maintenance fee, currently $35 per Strategy, is due at the
time of initial investment and by September 30 of each subsequent year. The
fee, payable to Delaware Service Company, Inc. to defray extra costs
associated with administering the Asset Planner service, will be deducted
automatically from one of the funds within your Asset Planner account if not
paid by September 30. However, effective November 1, 1996, the annual
maintenance fee is waived until further notice. Investors who utilize the
Asset Planner for an IRA will continue to pay an annual IRA fee of $15 per
Social Security number. Investors will receive a customized quarterly Strategy
Report summarizing all Asset Planner investment performance and account
activity during the prior period. Confirmation statements will be sent
following all transactions other than those involving a reinvestment of
distributions.

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(DAF-SAI/PART B)

Certain shareholder services are not available to investors using the
Asset Planner service, due to its special design. These include Delaphone,
Checkwriting, Wealth Builder Option and Letter of Intention. Systematic
Withdrawal Plans are available after the account has been open for two years.

Retirement Plans for the Fund Classes

An investment in each Fund may be suitable for tax-deferred
retirement plans. Delaware Investments offers a full spectrum of qualified and
non-qualified retirement plans, including the 401(k) deferred compensation
plan, Individual Retirement Account ("IRA"), and the new Roth IRA.

The CDSC may be waived on certain redemptions of Class B Shares and
Class C Shares. See Waiver of Contingent Deferred Sales Charge - Class B
Shares and Class C Shares under Redemption and Exchange in the Prospectuses
for the Fund Classes for a list of the instances in which the CDSC is waived.

Purchases of Class B Shares are subject to a maximum purchase
limitation of $250,000 for retirement plans. Purchases of Class C Shares must
be in an amount that is less than $1,000,000 for such plans. The maximum
purchase limitations apply only to the initial purchase of shares by the
retirement plan.

Minimum investment limitations generally applicable to other
investors do not apply to retirement plans, other than Individual Retirement
Accounts for which there is a minimum initial purchase of $250, and a minimum
subsequent purchase of $25, regardless of which class is selected. Retirement
plans may be subject to plan establishment fees, annual maintenance fees
and/or other administrative or trustee fees. Fees are based upon the number of
participants in the plan as well as the services selected. Additional
information about fees is included in retirement plan materials. Fees are
quoted upon request. Annual maintenance fees may be shared by Delaware
Management Trust Company, the Transfer Agent, other affiliates of the Manager
and others that provide services to such plans.

Certain shareholder investment services available to non-retirement
plan shareholders may not be available to retirement plan shareholders.
Certain retirement plans may qualify to purchase shares of the Institutional
Classes. See Institutional Classes, above. For additional information on any
of the plans and Delaware's retirement services, call the Shareholder Service
Center telephone number.

It is advisable for an investor considering any one of the retirement
plans described below to consult with an attorney, accountant or a qualified
retirement plan consultant. For further details, including applications for
any of these plans, contact your investment dealer or the Distributor.

Taxable distributions from the retirement plans may be subject to
withholding.

Please contact your investment dealer or the Distributor for the
special application forms required for the plans.

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(DAF-SAI/PART B)

Prototype Profit Sharing or Money Purchase Pension Plans
Prototype Plans are available for self-employed individuals,
partnerships and corporations. These plans can be maintained as Section
401(k), profit sharing or money purchase pension plans. Contributions may be
invested only in Class A and Class C Shares.

Individual Retirement Account ("IRA")
A document is available for an individual who wants to establish an
IRA and make contributions which may be tax-deductible, even if the individual
is already participating in an employer-sponsored retirement plan. Even if
contributions are not deductible for tax purposes, as indicated below,
earnings will be tax-deferred. In addition, an individual may make
contributions on behalf of a spouse who has no compensation for the year or,
for years prior to 1997, elects to be treated as having no compensation for
the year. Investments in each of the Fund Classes are permissible.

An individual can contribute up to $2,000 to his or her IRA each
year. Contributions may or may not be deductible depending upon the taxpayer's
adjusted gross income and whether the taxpayer or his or her spouse is an
active participant in an employer-sponsored retirement plan. Even if a
taxpayer (or his or her spouse) is an active participant in an
employer-sponsored retirement plan, the full $2,000 deduction is still
available if the taxpayer's adjusted gross income is below $25,000 ($40,000
for taxpayers filing joint returns). A partial deduction is allowed for
married couples with incomes between $40,000 and $50,000, and for single
individuals with incomes between $25,000 and $35,000. No deductions are
available for contributions to IRAs by taxpayers whose adjusted gross income
before IRA deductions exceeds $50,000 ($35,000 for singles) and who are active
participants in an employer-sponsored retirement plan. Taxpayers who are not
allowed deductions on IRA contributions still can make nondeductible IRA
contributions of as much as $2,000 for each working spouse ($2,250 for
one-income couples for years prior to 1997), and defer taxes on interest or
other earnings from the IRAs. Special rules apply for determining the
deductibility of contributions made by married individuals filing separate
returns.

Effective for tax years beginning after 1996, one-income couples can
contribute up to $2,000 to each spouse's IRA provided the combined
compensation of both spouses is at least equal to the total contributions for
both spouses. If the working spouse is an active participant in an
employer-sponsored retirement plan and earns over $40,000, the maximum
deduction limit is reduced in the same way that the limit is reduced for
contributions to a non-spousal IRA.

A company or association may establish a Group IRA for employees or
members who want to purchase shares of a Fund. Purchases of $1 million or more
of Class A Shares qualify for purchase at net asset value but may, under
certain circumstances, be subject to a Limited CDSC. See Purchasing Shares for
information on reduced front-end sales charges applicable to Class A Shares.

Investments generally must be held in the IRA until age 59 1/2 in
order to avoid premature distribution penalties, but distributions generally
must commence no later than April 1 of the calendar year following the year in
which the participant reaches age 70 1/2. Individuals are entitled to revoke
the account, for any reason and without penalty, by mailing written notice of
revocation to Delaware Management Trust Company within seven days after the
receipt of the IRA Disclosure Statement or within seven days after the
establishment of the IRA, except, if the IRA is established more than seven
days after receipt of the IRA Disclosure Statement, the account may not be
revoked. Distributions from the account (except for the pro-rata portion of
any nondeductible contributions) are fully taxable as ordinary income in the
year received. Excess contributions removed after the tax filing deadline,
plus extensions, for the year in which the excess contributions were made are
subject to a 6% excise tax on the amount of excess. Premature distributions
(distributions made before age 59 1/2, except for death, disability and
certain other limited circumstances) will be subject to a 10% excise tax on
the amount prematurely distributed, in

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(DAF-SAI/PART B)

addition to the income tax resulting from the distribution. See Alternative
Purchase Arrangements - Class B Shares and Class C Shares under Classes of
Shares, Contingent Deferred Sales Charge - Class B Shares and Class C Shares
under Classes of Shares, and Waiver of Contingent Deferred Sales Charge -
Class B Shares and Class C Shares under Redemption and Exchange in the Fund
Classes' Prospectuses concerning the applicability of a CDSC upon redemption.

Effective January 1, 1997, the 10% premature distribution penalty
will not apply to distributions from an IRA that are used to pay medical
expenses in excess of 7.5% of adjusted gross income or to pay health insurance
premiums by an individual who has received unemployment compensation for 12
consecutive weeks.

Simplified Employee Pension Plan ("SEP/IRA")
A SEP/IRA may be established by an employer who wishes to sponsor a
tax-sheltered retirement program by making contributions on behalf of all
eligible employees. Each of the Fund Classes is available for investment by a
SEP/IRA.

Salary Reduction Simplified Employee Pension Plan ("SAR/SEP")
Although new SAR/SEP plans may not be established after December 31,
1996, existing plans may be maintained by employers having 25 or fewer
employees. An employer may elect to make additional contributions to such
existing plans.

Prototype 401(k) Defined Contribution Plan

Section 401(k) of the Code permits employers to establish qualified
plans based on salary deferral contributions. Plan documents are available to
enable employers to establish a plan. An employer may also elect to make
profit sharing contributions and/or matching contributions with investments in
only Class A Shares and Class C Shares or certain other funds available from
Delaware Investments. Purchases under the plan may be combined for purposes of
computing the reduced front-end sales charge applicable to Class A Shares as
set forth in the table in the Prospectus for the Fund Classes.

Deferred Compensation Plan for Public Schools and Non-Profit Organizations
("403(b)(7)")

Section 403(b)(7) of the Code permits public school systems and
certain non-profit organizations to use mutual fund shares held in a custodial
account to fund deferred compensation arrangements for their employees. A
custodial account agreement is available for those employers who wish to
purchase any of the Fund Classes in conjunction with such an arrangement.
Applicable front-end sales charges with respect to Class A Shares for such
purchases are set forth in the table in the Prospectus for the Fund Classes.

Deferred Compensation Plan for State and Local Government Employees ("457")

Section 457 of the Code permits state and local governments, their
agencies and certain other entities to establish a deferred compensation plan
for their employees who wish to participate. This enables employees to defer a
portion of their salaries and any federal (and possibly state) taxes thereon.
Such plans may invest in shares of any of the Fund Classes. Although investors
may use their own plan, there is available a Delaware Investments 457 Deferred
Compensation Plan. Interested investors should contact the Distributor or
their investment dealers to obtain further information. Applicable front-end
sales charges for such purchases of Class A Shares are set forth in the table
in the Prospectus for the Fund Classes.

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(DAF-SAI/PART B)

SIMPLE IRA

A SIMPLE IRA combines many of the features of an IRA and a 401(k)
Plan but is easier to administer than a typical 401(k) Plan. It requires
employers to make contributions on behalf of their employees and also has a
salary deferral feature that permits employees to defer a portion of their
salary into the plan on a pre-tax basis.

SIMPLE 401(k)
A SIMPLE 401(k) is like a regular 401(k) except that plan sponsors
are limited to 100 employees and, in exchange for mandatory plan sponsor
contributions, discrimination testing is no longer required. Class B Shares
are not available for purchase by such plans.

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(DAF-SAI/PART B)

DETERMINING OFFERING PRICE AND NET ASSET VALUE

Orders for purchases of Class A Shares are effected at the offering
price next calculated by the Fund in which shares are being purchased after
receipt of the order by the Fund , its agent or certain other authorized
persons. Orders for purchases of Class B Shares, Class C Shares and
Institutional Class shares are effected at the net asset value per share next
calculated by the Fund in which shares are being purchased after receipt of
the order by the Fund , its agent or certain other authorized persons. Selling
dealers are responsible for transmitting orders promptly.

The offering price for Class A Shares consists of the net asset value
per share plus any applicable sales charges. Offering price and net asset
value are computed as of the close of regular trading on the New York Stock
Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is open.
The New York Stock Exchange is scheduled to be open Monday through Friday
throughout the year except for New Year's Day, Martin Luther King, Jr.'s
Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas. When the New York Stock Exchange is closed,
the Funds will generally be closed, pricing calculations will not be made and
purchase and redemption orders will not be processed.

An example showing how to calculate the net asset value per share
and, in the case of Class A Shares, the offering price per share, is included
in each Fund's financial statements which are incorporated by reference into
this Part B.

Each Fund's net asset value per share is computed by adding the value
of all securities and other assets in the portfolio of the Funds, deducting
any liabilities and dividing by the number of shares outstanding. Expenses and
income are accrued daily. U.S. government and other debt securities are valued
at the mean between the last reported bid and asked prices. Options are valued
at the last reported sales price or, if no sales are reported, at the mean
between the last reported bid and asked prices. Short-term investments having
remaining maturities of 60 days or less are valued at amortized cost. Foreign
securities and the prices of foreign securities denominated in foreign
currencies are translated to U.S. dollars at the mean between the bid and
offer quotations of such currencies based on rates in effect as of the close
of the London Stock Exchange. All other securities and assets, including
non-Exchange-traded options, are valued at fair value as determined in good
faith by the Board of Directors of Adviser Funds, Inc.

Each Class of the Funds will bear, pro-rata, all of the common
expenses of the particular Fund. The net asset values of all outstanding
shares of each Class of a Fund will be computed on a pro-rata basis for each
outstanding share based on the proportionate participation in the Funds
represented by the value of shares of that Class. All income earned and
expenses incurred by the Funds will be borne on a pro-rata basis by each
outstanding share of a Class, based on each Class' percentage in the Funds
represented by the value of shares of such Classes, except that the
Institutional Classes will not incur any of the expenses under the Funds'
12b-1 Plans and Class A Shares, Class B Shares and Class C Shares alone will
bear the 12b-1 Plan expenses payable under their respective Plans. Due to the
specific distribution expenses and other costs that would be allocable to each
Class, the dividends paid to each Class of a Fund and the net asset value of
each Class may vary. However, the net asset value per share of each Class is
expected to be equivalent.

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(DAF-SAI/PART B)

REDEMPTION AND REPURCHASE

Any shareholder may require a Fund to redeem shares by sending a
written request, signed by the record owner or owners exactly as the shares
are registered, to the Fund, at 1818 Market Street, Philadelphia, PA 19103. In
addition, certain expedited redemption methods described below are available
when stock certificates have not been issued. Certificates are issued for
Class A Shares and Institutional Class shares only if a shareholder
specifically requests them. Certificates are not issued for Class B Shares or
Class C Shares. If stock certificates have been issued for shares being
redeemed, they must accompany the written request. For redemptions of $50,000
or less paid to the shareholder at the address of record, the request must be
signed by all owners of the shares or the investment dealer of record, but a
signature guarantee is not required. When the redemption is for more than
$50,000, or if payment is made to someone else or to another address,
signatures of all record owners are required and a signature guarantee may be
required. Each signature guarantee must be supplied by an eligible guarantor
institution. Each Fund reserves the right to reject a signature guarantee
supplied by an eligible institution based on its creditworthiness. The Funds
may request further documentation from corporations, retirement plans,
executors, administrators, trustees or guardians.

In addition to redemption of Fund shares, the Distributor, acting as
agent of the Funds, offers to repurchase Fund shares from broker/dealers
acting on behalf of shareholders. The redemption or repurchase price, which
may be more or less than the shareholder's cost, is the net asset value per
share next determined after receipt of the request in good order by the
respective Fund , its agent or certain other authorized persons, subject to
any applicable CDSC or Limited CDSC. See Distribution and Service under
Investment Management Agreements and Sub-Advisory Agreements. This is computed
and effective at the time the offering price and net asset value are
determined. See Determining Offering Price and Net Asset Value. The Funds and
the Distributor end their business days at 5 p.m., Eastern time. This offer is
discretionary and may be completely withdrawn without further notice by the
Distributor.

Orders for the repurchase of Fund shares which are submitted to the
Distributor prior to the close of its business day will be executed at the net
asset value per share computed that day (subject to the applicable CDSC or
Limited CDSC), if the repurchase order was received by the broker/dealer from
the shareholder prior to the time the offering price and net asset value are
determined on such day. The selling dealer has the responsibility of
transmitting orders to the Distributor promptly. Such repurchase is then
settled as an ordinary transaction with the broker/dealer (who may make a
charge to the shareholder for this service) delivering the shares repurchased.

Certain redemptions of Class A Shares purchased at net asset value
may result in the imposition of a Limited CDSC. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset Value
under Redemption and Exchange in the Prospectus for the Fund Classes.
Redemptions of Class B Shares made within three years of purchase are subject
to a CDSC of: (i) 4% if shares are redeemed within two years of purchase; (ii)
3% if shares are redeemed during the third or fourth year following purchase;
(iii) 2% if shares are redeemed during the fifth year following purchase; (iv)
1% if shares are redeemed during the sixth year following purchase; and (v) 0%
thereafter. See Restructuring of the Funds in this Part B. Class C Shares are
subject to a CDSC of 1% if shares are redeemed within 12 months following
purchase. See Contingent Deferred Sales Charge - Class B Shares and Class C
Shares under Classes of Shares in the Prospectus for the Fund Classes. Except
for the applicable CDSC or Limited CDSC and, with respect to the expedited
payment by wire described below for which, in the case of the Fund Classes,
there is currently a $7.50 bank wiring cost, neither the Funds nor the
Distributor charges a fee for redemptions or repurchases, but such fees could
be charged at any time in the future.

Payment for shares redeemed will ordinarily be mailed the next
business day, but in no case later than seven days, after receipt of a
redemption request in good order; provided, however, that each commitment to
mail or wire

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(DAF-SAI/PART B)

redemption proceeds by a certain time, as described below, is modified by the
qualifications described in the next paragraph.

Each Fund will process written or telephone redemption requests to
the extent that the purchase orders for the shares being redeemed have already
been settled. A Fund will honor the redemption requests as to shares for which
a check was tendered as payment, but a Fund will not mail or wire the proceeds
until it is reasonably satisfied that the check has cleared. This potential
delay can be avoided by making investments by wiring Federal Funds.

If a shareholder has been credited with a purchase by a check which
is subsequently returned unpaid for insufficient funds or for any other
reason, the Fund involved will automatically redeem from the shareholder's
account the shares purchased by the check plus any dividends earned thereon.
Shareholders may be responsible for any losses to a Fund or to the
Distributor.

In case of a suspension of the determination of the net asset value
because the New York Stock Exchange is closed for other than weekends or
holidays, or trading thereon is restricted or an emergency exists as a result
of which disposal by a Fund of securities owned by it is not reasonably
practical, or it is not reasonably practical for a Fund fairly to value its
assets, or in the event that the SEC has provided for such suspension for the
protection of shareholders, a Fund may postpone payment or suspend the right
of redemption or repurchase. In such case, the shareholder may withdraw the
request for redemption or leave it standing as a request for redemption at the
net asset value next determined after the suspension has been terminated.

Payment for shares redeemed or repurchased may be made either in cash
or kind, or partly in cash and partly in kind. Any portfolio securities paid
or distributed in kind would be valued as described in Determining Offering
Price and Net Asset Value. Subsequent sale by an investor receiving a
distribution in kind could result in the payment of brokerage commissions.
However, Adviser Funds, Inc. has elected to be governed by Rule 18f-1 under
the 1940 Act pursuant to which each Fund is obligated to redeem shares solely
in cash up to the lesser of $250,000 or 1% of the net asset value of such Fund
during any 90-day period for any one shareholder.

The value of a Fund's investments is subject to changing market
prices. Thus, a shareholder reselling shares to a Fund may sustain either a
gain or loss, depending upon the price paid and the price received for such
shares.

Small Accounts
Before the Funds involuntarily redeem shares from an account that,
under the circumstances listed in the relevant Prospectus, has remained below
the minimum amounts required by the Funds' Prospectuses and sends the proceeds
to the shareholder, the shareholder will be notified in writing that the value
of the Fund shares in the account is less than the minimum required and will
be allowed 60 days from the date of notice to make an additional investment to
meet the required minimum. See The Conditions of Your Purchase under How to
Buy Shares in the Funds' Prospectuses. Any redemption in an inactive account
established with a minimum investment may trigger mandatory redemption. No
CDSC or Limited CDSC will apply to the redemptions described in this
paragraph.

* * *
<PAGE>

Each Fund has made available certain special redemption privileges,
as described below. The Funds reserve the right to suspend or terminate these
expedited payment procedures upon 60 days' written notice to shareholders.

Expedited Telephone Redemptions

Shareholders of the Fund Classes or their investment dealers of
record wishing to redeem any amount of shares of $50,000 or less for which
certificates have not been issued may call the Shareholder Service Center at
800- 523-1918 or, in the case of shareholders of Institutional Classes, their
Client Services Representative at 800-828- 5052 prior to the time the offering
price and net asset value are determined, as noted above, and have the
proceeds mailed to them at the address of record. Checks payable to the
shareholder(s) of record will normally be mailed the next business day, but no
later than seven days, after the receipt of the redemption request. This
option is only available to individual, joint and individual fiduciary-type
accounts.

In addition, redemption proceeds of $1,000 or more can be transferred
to your predesignated bank account by wire or by check by calling the phone
numbers listed above. An authorization form must have been completed by the
shareholder and filed with the relevant Fund before the request is received.
Payment will be made by wire or check to the bank account designated on the
authorization form as follows:

1. Payment by Wire: Request that Federal Funds be wired to the bank
account designated on the authorization form. Redemption proceeds will
normally be wired on the next business day following receipt of the redemption
request. There is a $7.50 wiring fee (subject to change) charged by CoreStates
Bank, N.A. which will be deducted from the withdrawal proceeds each time the
shareholder requests a redemption from Class A Shares, Class B Shares and
Class C Shares. If the proceeds are wired to the shareholder's account at a
bank which is not a member of the Federal Reserve System, there could be a
delay in the crediting of the funds to the shareholder's bank account.

2. Payment by Check: Request a check be mailed to the bank account
designated on the authorization form. Redemption proceeds will normally be
mailed the next business day, but no later than seven days, from the date of
the telephone request. This procedure will take longer than the Payment by
Wire option (1 above) because of the extra time necessary for the mailing and
clearing of the check after the bank receives it.

Redemption Requirements: In order to change the name of the bank and
the account number it will be necessary to send a written request to the
relevant Fund and a signature guarantee may be required. Each signature
guarantee must be supplied by an eligible guarantor institution. The Funds
reserve the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness.

To reduce the shareholder's risk of attempted fraudulent use of the
telephone redemption procedure, payment will be made only to the bank account
designated on the authorization form.

If expedited payment under these procedures could adversely affect a
Fund, such Fund may take up to seven days to pay the shareholder.

Neither the Funds nor the Funds' Transfer Agent is responsible for
any shareholder loss incurred in acting upon written or telephone instructions
for redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, each Fund will follow
reasonable procedures to confirm that instructions communicated by telephone
are genuine (including verification of a form of personal identification) as,
if it does not, such Fund or the Transfer Agent may be liable for any losses
due to unauthorized or fraudulent transactions. Telephone instructions
received by shareholders of the Fund Classes are generally tape recorded. A
written confirmation will be provided for all purchase, exchange and
redemption transactions initiated by telephone.

Systematic Withdrawal Plans
Shareholders of Class A Shares, Class B Shares and Class C Shares who
own or purchase $5,000 or more of shares at the offering price, or net asset
value, as applicable, for which certificates have not been issued may
establish a Systematic Withdrawal Plan for monthly withdrawals of $25 or more,
or quarterly withdrawals of $75 or more, although the Funds do not recommend
any specific amount of withdrawal. This $5,000 minimum does not

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<PAGE>

(DAF-SAI/PART B)

apply for a Fund's prototype retirement plans. Shares purchased with the
initial investment and through reinvestment of cash dividends and realized
securities profits distributions will be credited to the shareholder's account
and sufficient full and fractional shares will be redeemed at the net asset
value calculated on the third business day preceding the mailing date.

Checks are dated either the 1st or the 15th of the month, as selected
by the shareholder (unless such date falls on a holiday or a weekend), and are
normally mailed within two business days. Both ordinary income dividends and
realized securities profits distributions will be automatically reinvested in
additional shares of a Class at net asset value. This plan is not recommended
for all investors and should be started only after careful consideration of
its operation and effect upon the investor's savings and investment program.
To the extent that withdrawal payments from the plan exceed any dividends
and/or realized securities profits distributions paid on shares held under the
plan, the withdrawal payments will represent a return of capital, and the
share balance may in time be depleted, particularly in a declining market.

The sale of shares for withdrawal payments constitutes a taxable
event and a shareholder may incur a capital gain or loss for federal income
tax purposes. This gain or loss may be long-term or short-term depending on
the holding period for the specific shares liquidated. Premature withdrawals
from retirement plans may have adverse tax consequences.

Withdrawals under this plan made concurrently with the purchases of
additional shares may be disadvantageous to the shareholder. Purchases of
Class A Shares through a periodic investment program in a fund managed by the
Manager must be terminated before a Systematic Withdrawal Plan with respect to
such shares can take effect, except if the shareholder is a participant in one
of our retirement plans or is investing in Delaware Investments funds which do
not carry a sales charge. Redemptions of Class A Shares pursuant to a
Systematic Withdrawal Plan may be subject to a Limited CDSC if the purchase
was made at net asset value and a dealer's commission has been paid on that
purchase. Redemptions of Class B Shares or Class C Shares pursuant to a
Systematic Withdrawal Plan may be subject to a CDSC, unless the annual amount
selected to be withdrawn is less than 12% of the account balance on the date
that the Systematic Withdrawal Plan was established. See Waiver of Contingent
Deferred Sales Charge - Class B Shares and Class C Shares and Waiver of
Limited Contingent Deferred Sales Charge - Class A Shares under Redemption and
Exchange in the Prospectus for the Fund Classes. Shareholders should consult
with their financial advisers to determine whether a Systematic Withdrawal
Plan would be suitable for them.

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<PAGE>

(DAF-SAI/PART B)

An investor wishing to start a Systematic Withdrawal Plan must
complete an authorization form. If the recipient of Systematic Withdrawal Plan
payments is other than the registered shareholder, the shareholder's signature
on this authorization must be guaranteed. Each signature guarantee must be
supplied by an eligible guarantor institution. The Funds reserve the right to
reject a signature guarantee supplied by an eligible institution based on its
creditworthiness. This plan may be terminated by the shareholder or the
Transfer Agent at any time by giving written notice.

The Systematic Withdrawal Plan is not available for Institutional
Classes.

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<PAGE>

(DAF-SAI/PART B)

DIVIDENDS, DISTRIBUTIONS AND TAXES

The following supplements the information in each Prospectus under
the heading Dividends, Distributions and Taxes.

Under the Taxpayer Relief act of 1997 (the "1997 Act"), a Fund is
required to track its sales of portfolio securities and to report its capital
gain distributions to you according to the following categories of holding
periods:

"Pre-Act long-term capital gains": securities sold by a Fund before
May 7, 1997, that were held for more than 12 months. These gains will
be taxable to individual investors at a maximum rate of 28%.

"Mid-term capital gains" or "28 percent rate gain": securities sold
by a Fund after July 28, 1997 that were held more than one year but
not more than 18 months. These gains will be taxable to individual
investors at a maximum rate of 28%.

"1997 Act long-term capital gains" or "20 percent rate gain":
securities sold by a Fund between May 7, 1997 and July 28, 1997 that
were held for more than 12 months, and securities sold by a Fund
after July 28, 1997 that were held for more than 18 months. These
gains will be taxable to individual investors at a maximum rate of
20% for investors in the 28% or higher federal income tax brackets,
and at a maximum rate of 10% for investors in the 15% federal income
tax bracket.

"Qualified 5-year gains": For individuals in the 15% bracket,
qualified 5-year gains are net gains on securities held for more than
5 years which are sold after December 31, 2000. For individual who
are subject to tax at higher rate brackets, qualified 5-year gains
are net gains on securities which are purchased after December 31,
2000 and are held for more than 5 years. Taxpayers subject to tax at
a higher rate brackets may also make an election for shares held on
January 1, 2001 to recognize gain on their shares in order to qualify
such shares as qualified 5-year property. These gains will be taxable
to individual investors at a maximum rate of 18% for investors in the
28% or higher federal income tax brackets, and at a maximum rate of
8% for investors in the 15% federal income tax bracket.

Tax Information Concerning All Funds

Each Fund has qualified and intends to continue to qualify as a
regulated investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"). By doing so, each Fund expects to eliminate
or reduce to a nominal amount the federal income taxes to which it may be
subject.

In order to qualify as a regulated investment company, each Fund
must, among other things, (1) derive at least 90% of its gross income from
dividends, interest, payment with respect to securities loans, and gains from
the sale or other disposition of stock or securities, foreign currencies or
other income (including gains from options, futures or forward contracts)
derived with respect to its business of investing in stock, securities or
currencies, (2) derive less than 30% of its gross income from the sale or
other disposition of stock, securities, options, futures, forward contracts,
and certain foreign currencies (or options, futures, or forward contracts on
foreign currencies) held for less than three months, and (3) diversify its
holdings so that at the end of each quarter of its taxable year (i) at least
50% of the market value of the Fund's assets is represented by cash or cash
items (including receivables), United States Government securities, securities
of other regulated investment companies, and other securities

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(DAF-SAI/PART B)

limited, in respect of any one issuer, to an amount not greater than 5% of the
value of the Fund's assets at the date of purchase and 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of the value of
its assets is invested in the securities of any one issuer (other than United
States Government securities or the securities of other regulated investment
companies) or of two or more issuers that Adviser Funds, Inc. controls and
that are engaged in the same, similar or related trades or businesses. These
requirements may restrict the degree to which the Adviser Funds, Inc. may
engage in short-term trading and limit the range of Adviser Funds, Inc.'s
investments. If a Fund qualifies as a regulated investment company, it will
not be subject to federal income tax on the part of its income distributed to
shareholders, provided the Fund distributes at least 90% of its net investment
income (including short-term capital gains) other than long-term capital gains
in each year. Each Fund intends to make sufficient distributions to
shareholders to meet this requirement.

Consequently, in order to avoid realizing a gain within the
three-month period, each Fund may be required to defer the closing out of a
contract beyond the time when it might otherwise be advantageous to do so.
Each Fund may also be restricted in the sale of purchased put options and the
purchase of put options for the purpose of hedging underlying securities
because of the application of the short sale holding period rules with respect
to such underlying securities.

The Code imposes a non-deductible excise tax on regulated investment
companies that do not distribute in each calendar year (regardless of whether
they otherwise have a non-calendar taxable year) an amount equal to 98% of
their "ordinary income" (as defined) for the calendar year plus 98% of their
"capital gain net income" (as defined) for the one-year period ending on
October 31 of such calendar year plus 100% of the prior calendar year's
undistributed income (if any). The balance, if any, of such income must be
distributed during the next calendar year. For the foregoing purposes, a Fund
is treated as having distributed any amount on which it is subject to income
tax for any taxable year ending in such calendar year. If distributions during
a calendar year are less than the required amount, that particular Fund will
be subject to a non-deductible excise tax equal to 4% of the deficiency.

Shareholders of the Funds will generally pay federal income tax on
distributions received from the Fund. Dividends that are attributable to a
Fund's taxable net investment income will be taxed as ordinary income.
Distributions of net capital gain that are designated by a Fund as capital
gain dividends will generally be taxable as long-term capital gain.
Distributions in excess of a Fund's current and accumulated earnings and
profits will be treated by shareholders receiving such distributions as a
return of capital; a return of capital is taxable to a shareholder as capital
gain to the extent that it exceeds such shareholder's basis in its shares in
the Fund. Shareholders not subject to tax on their income generally will not
be required to pay tax on amounts distributed to them. Such shareholders will
include qualified retirement plans.

Each Fund intends to pay out substantially all of its net investment
income and net realized capital gains. Such payments, if any, will be made
once a year. Checks are normally mailed within three business days of the
payable date. Any check in payment of dividends or other distributions which
cannot be delivered by the United States Post Office or which remains uncashed
for a period of more than one year may be reinvested in the shareholder's
account at the then-current net asset value and the dividend option may be
changed from cash to reinvest. A Fund may deduct from a shareholder's account
the costs of the Fund's effort to locate a shareholder if a shareholder's mail
is returned by the United States Post Office or the Fund is otherwise unable
to locate the shareholder or verify the shareholder's mailing address. These
costs may include a percentage of the account when a search company charges a
percentage fee in exchange for their location services. Net investment income
earned on days when a Fund is not open will be declared as a dividend on the
next business day. Purchases of Fund shares by wire begin earning dividends
when converted into Federal Funds and available for investment, normally the
next business day after receipt. Purchases by check earn dividends upon
conversion to Federal Funds, normally one business day after receipt.

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(DAF-SAI/PART B)

Each class of a Fund will share proportionately in the investment
income and expenses of the Fund, except that Class A Shares, Class B Shares
and Class C Shares alone will incur distribution fees under their respective
12b- 1 Plans.

For each of the Fund classes, dividends and realized securities
profits distributions are automatically reinvested in additional shares of a
Fund at net asset value in effect on the payable date, and credited to the
shareholder's account, unless an election to receive distributions in cash has
been made by the shareholder. All dividends and distributions are reinvested
for the Institutional Class. Dividend payments of $1.00 or less will be
automatically reinvested, notwithstanding a shareholder's election to receive
dividends in cash. If such a shareholder's dividends increase to greater than
$1.00, the shareholder would have to file a new election in order to begin
receiving dividends in cash again.

Adviser Funds, Inc. anticipates distributing to its shareholders
substantially all of a Fund's net investment income. Any net short-term
capital gains after deducting any net long-term capital losses (including
carryforwards) would be distributed quarterly but, in the discretion of
Adviser Funds, Inc.'s Board of Directors, might be distributed less
frequently. Distributions of net long-term gains, if any, realized on sales of
investments will be distributed annually during the quarter following the
close of the fiscal year.

Taxation of Shareholders
Gain or loss on the sale of a security generally will be long-term
capital gain or loss if a Fund has held the securities for more than one year.
Gain or loss on the sale of securities held for not more than one year will be
short-term. If one of the Funds acquires a debt security at a substantial
discount, a portion of any gain upon the sale or redemption will be taxed as
ordinary income, rather than capital gain to the extent it reflects accrued
market discount. Alternatively, this discount may be accredited as ordinary
income on a daily basis rather than recognized at disposition.

Dividends of net investment income and distributions of net realized
short-term capital gains will be taxable to shareholders as ordinary income
for federal income tax purposes, whether received in cash or reinvested in
additional shares. Dividends received by corporate shareholders will qualify
for the dividends-received deduction only to the extent that each Fund
designates the amount distributed as a dividend and the amount so designated
does not exceed the aggregate amount of dividends received by the Funds from
domestic corporations for the taxable year. The federal dividends-received
deduction for corporate shareholders may be further reduced or disallowed if
the shares with respect to which dividends are received are treated as
debt-financed or are deemed to have been held for less than 46 days.

Foreign countries may impose withholding and other taxes on dividends
and interest paid to the Funds with respect to investments in foreign
securities. However, certain foreign countries have entered into tax
conventions with the U.S. to reduce or eliminate such taxes.

Distributions of long-term capital gains will be taxable to
shareholders as such, whether paid in cash or reinvested in additional shares
and regardless of the length of time that the shareholder has held his or her
interest in one of the Funds. If a shareholder receives a distribution taxable
as long-term capital gain with respect to his or her investment in a Fund and
redeems or exchanges the shares before he or she has held them for more than
six months, any loss on the redemption or exchange that is less than or equal
to the amount of the distribution will be treated as a long-term capital loss.

If a shareholder: (a) incurs a sales charge or in acquiring or
redeeming shares of one of the Funds; (b) disposes of those shares and
acquires within 90 days after the original acquisition; or (c) acquires within
90 days of

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(DAF-SAI/PART B)

the redemption those shares in a mutual fund for which the otherwise
applicable sales charge is reduced by reason of reinvestment right (i.e., an
exchange privilege), the original sales charge increases the shareholder's tax
basis in the original shares only to the extent the other applicable sales
charge for the second acquisition is not reduced. The portion of the original
sales charge that does not increase the shareholder's tax basis in the
original shares would be treated as incurred with respect to the second
acquisition and, as a general rule, would increase the shareholder's tax basis
in the newly acquired shares. Furthermore, the same rule also applies to a
disposition of the newly acquired or redeemed shares made within 90 days of
the second acquisition. This provision prevents a shareholder from immediately
deducting the sales charge by shifting his or her investment in a family of
mutual funds.

Investors considering buying shares of a Fund just prior to a record
date for a taxable dividend or capital gain distribution should be aware that,
regardless of whether the price of the Fund shares to be purchased reflects
the amount of the forthcoming dividend or distribution payment, any such
payment will be a taxable dividend or distribution payment. This is of
particular concern for investors in the Equity Funds since these Funds may
make distributions on an annual basis.

Each Fund will be required in certain cases to withhold and remit to
the United States Treasury 31% of taxable dividends or of gross proceeds from
redemptions paid to any shareholder who has provided either an incorrect tax
identification number or no number at all, or who is subject to withholding by
the Internal Revenue Service for failure to properly include on his tax return
payments of interest or dividends. This withholding, known as backup
withholding, is not an additional tax, and any amounts withheld may be
credited against the shareholder's ultimate U.S. tax liability.

Certain investments and hedging activities of the Funds, including
transactions in options, futures contracts, hedging transactions, forward
contracts, straddles, foreign currencies, and foreign securities will be
subject to special tax rules. See Option Transactions, Straddles and Wash
Sales, below. In a given case, these rules may accelerate income to a Fund,
defer losses to a Fund, cause adjustments in the holding periods of a Fund's
securities, convert short-term capital losses into long-term capital losses,
or otherwise affect the character of a Fund's income. These rules could
therefore affect the amount, timing and character of distributions to
shareholders. Each Fund will endeavor to make any available elections
pertaining to such transactions in a manner believed to be in the best
interest of a Fund.

Certain securities purchased by the Funds (such as STRIPS, CUBES,
TRs, TIGRs and CATS), are sold at original issue discount and do not make
periodic cash interest payments. A Fund will be required to include as part of
its current income the imputed interest on such obligations even though a Fund
has not received any interest payments on such obligations during that period.
Because a Fund distributes all of its net investment income to its
shareholders (including such imputed interest), a Fund may have to sell
securities in order to generate the cash necessary for the required
distributions. Such sales may occur at a time when the Manager or sub-adviser
would not have chosen to sell such securities and which may result in a
taxable gain or loss.

The foregoing is only a summary of some of the important federal tax
considerations generally affecting purchasers of shares of each Fund of
Adviser Funds, Inc. Further tax information regarding Overseas Equity and New
Pacific Funds are included in following sections of this Part B. No attempt is
made to present a detailed explanation of the federal income tax treatment of
each Fund or its shareholders, and this discussion is not intended as a
substitute for careful tax planning. Accordingly, prospective purchasers of
shares of a Fund are urged to consult their tax advisors with specific
reference to their own tax situation, including the potential application of
state and local taxes.

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(DAF-SAI/PART B)

The foregoing discussion and the discussion below regarding Overseas
Equity Fund and New Pacific Fund are based on tax laws and regulations which
are in effect on the date of this Part B; such laws and regulations may be
changed by legislative or administrative action, and such changes may be
retroactive.

Additional Tax Information Concerning Overseas Equity Fund and New Pacific Fund
Gain or loss on the sale or other disposition of foreign currency by
Overseas Equity Fund and New Pacific Fund on a spot (or cash) basis will
result in ordinary gain or loss for federal income tax purposes.

Gains from foreign currencies (including foreign currency options,
foreign currency futures and foreign currency forward contracts) will
constitute qualifying income for purposes of the 90% test. However, future
Treasury regulations may exclude from qualifying income foreign currency gains
not directly related to a Fund's business of investing in stock or securities
(and may further define those foreign currency transactions that are not
directly related).

Investment by a Fund in certain "passive foreign investment
companies" could subject a Fund to U.S. federal income tax or other charge on
distributions received from, or the sale of its investment in, such a company,
which tax cannot be eliminated by making distributions to shareholders. If the
Funds elect to treat a passive foreign investment company as a "qualified
electing fund," different rules would apply, although the Funds do not expect
to be in the position to make such elections.

Foreign Tax Credit
Shareholders of Overseas Equity Fund and New Pacific Fund who are
U.S. citizens may be able to claim a foreign tax credit or deduction on their
U.S. income tax returns with respect to foreign taxes paid by the Funds.
Generally, a credit for foreign taxes is subject to the limitation that it may
not exceed the shareholder's U.S. tax attributable to his or her total foreign
source taxable income. For this purpose, the source of a Fund's income flows
through to its shareholders. A Fund's gains from the sale of securities
generally will be treated as derived from U.S. sources and certain currency
fluctuation gains, including fluctuation gains from foreign currency
denominated debt securities, receivables and payables, will be treated as
ordinary income derived from U.S. sources. With limited exceptions, the
foreign tax credit is allowed to offset only 90% of the alternative minimum
tax imposed on corporations and individuals. Because of these limitations,
shareholders may be unable to claim a credit for the full amount of their
proportionate share of the foreign taxes paid by a Fund.

The foregoing is only a general description of the treatment of
foreign withholding or other foreign taxes under the U.S. federal income tax
laws. Because the availability of a credit or deduction depends on the
particular circumstances of each shareholder, shareholders are advised to
consult their own tax advisers.

Options Transactions
When a Fund writes a call option, an amount equal to the premium
received by it is included in the Fund's assets and liabilities as an asset
and as an equivalent liability. The amount of the liability is subsequently
"marked to market" to reflect the current market value of the option written.
The current market value of a written option is the last sale price on the
principal Exchange on which such option is traded or, in the absence of a
sale, the mean between the last bid and asked prices. If an option which a
Fund has written expires on its stipulated expiration date, or if a Fund
enters into a closing purchase transaction, the Fund realizes a gain (or loss
if the cost of the closing transaction exceeds the premium received when the
option was sold) without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is extinguished.
Any such gain or loss is a short-term capital gain or loss for federal income
tax purposes. If a call option which a Fund has written is exercised, the Fund
realizes a capital gain or loss (long-term or short-term, depending on the
holding period of the underlying security)

-61-

<PAGE>

(DAF-SAI/PART B)

from the sale of the underlying security, and the proceeds from such sale are
increased by the premium originally received.

The premium paid by a Fund for the purchase of a put option is
recorded in the section of the Fund's assets and liabilities as an investment
and subsequently adjusted daily to the current market value of the option. For
example, if the current market value of the option exceeds the premium paid,
the excess would be unrealized appreciation and, conversely, if the premium
exceeds the current market value, such excess would be unrealized
depreciation. If a put option which a Fund has purchased expires on the
stipulated expiration date, that Fund realizes a long- or short-term capital
loss for federal income tax purposes in the amount of the cost of the option.
If the Fund sells the put option, it realizes a long- or short-term capital
gain or loss, depending on whether the proceeds from the sale are greater or
less than the cost of the option. If the Fund exercises a put option, it
realizes a capital gain or loss (long-term or short-term, depending on the
holding period of the underlying security) from the sale of the underlying
security and the proceeds from such sale will be decreased by the premium
originally paid. However, since the purchase of a put option is treated as a
short sale for federal income tax purposes, the holding period of the
underlying security will be affected by such a purchase.

Futures Contracts
The initial margin deposits made when entering into futures contracts
are recognized as assets due from the broker. During the period the futures
contract is open, changes in the value of the contract will be reflected at
the end of each day.

Regulated futures contracts held by the Fund at the end of each
fiscal year will be required to be "marked to market" for federal income tax
purposes. Any unrealized gain or loss on futures contracts will therefore be
recognized and deemed to consist of 60% long-term capital gain or loss and 40%
short-term capital gain or loss. Therefore, adjustments are made to the tax
basis in the futures contract to reflect the gain or loss recognized at year
end.

Straddles
The Code contains rules applicable to "straddles," that is,
"offsetting positions in actively traded personal property." Such personal
property includes offsetting puts of the same class, section 1256 contracts or
other investment contracts. Where applicable, the straddle rules generally
override the other provisions of the Code. In general, investment positions
will be offsetting if there is a substantial diminution in the risk of loss
from holding one position by reason of holding one or more other positions
(although certain covered call options would not be treated as part of a
straddle). The Funds are authorized to enter into covered call and covered put
positions. Depending on what other investments are held by a Fund, at the time
it enters into one of the above transactions, the Fund may create a straddle
for purposes of the Code.

-62-

<PAGE>

(DAF-SAI/PART B)

Wash Sales
"Wash sale" rules will apply to prevent the recognition of loss with
respect to a position where an identical or substantially identical position
has been acquired 30 days prior to or 30 days after the date of the loss.

The foregoing is only a summary of certain federal tax considerations
generally affecting the Funds and their shareholders and is not intended as a
substitute for careful tax planning. Shareholders are urged to consult their
tax advisers with specific reference to their own tax situations, including
their state and local tax liabilities.

-63-

<PAGE>

(DAF-SAI/PART B)

INVESTMENT MANAGEMENT AGREEMENTS

The Manager, located at One Commerce Square, Philadelphia, PA 19103,
furnishes investment management services to each Fund, subject to the
supervision and direction of the Board of Directors of Adviser Funds, Inc.

The Manager and its predecessors have been managing the funds in
Delaware Investments since 1938. On October 31, 1997, the Manager and its
affiliates within Delaware Investments, including the Delaware International
Advisers Ltd., were managing in the aggregate more than $38 billion in assets
in the various institutional or separately managed (approximately
$22,496,609,000) and investment company (approximately $16,012,252,000)
accounts.

Separate Investment Management Agreements for U.S. Growth Fund and
New Pacific Fund are dated May 4, 1996. An Amended and Restated Investment
Management Agreement for Overseas Equity Fund is dated September 15, 1997. The
Agreements have an initial term of two years and may be further renewed only
so long as such renewals and continuance are specifically approved at least
annually by the Board of Directors or by vote of a majority of the outstanding
voting securities of the relevant Fund, and only if the terms and renewal
thereof have been approved by the vote of a majority of the directors of
Adviser Funds, Inc. who are not parties thereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval. The Agreements are terminable without penalty on 60 days'
notice by the directors of Adviser Funds, Inc. or by the Manager. An Agreement
will terminate automatically in the event of its assignment.

The Investment Management Agreements provide that each Fund shall pay
the Manager an annual management fee payable monthly and computed on the
average daily net assets of each Fund at the following annual rates:

Management
Fund Fee Rate

U.S. Growth Fund 0.70%
Overseas Equity Fund 1.00%
New Pacific Fund 0.80%

On October 31, 1997, each Fund's total net assets were as follows:

U.S. Growth Fund $27,293,814
Overseas Equity Fund $12,583,001
New Pacific Fund $10,056,662

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<PAGE>

(DAF-SAI/PART B)

The total investment management fees incurred by each Fund during the
fiscal years ended October 31, 1997, October 31, 1996 and October 31, 1995
were as follows below. Beginning May 6, 1996, the fees were paid to the
Manager, Delaware Management Company, Inc. Fees paid prior to May 6, 1996 were
paid to the previous investment manager, Lincoln Investment Management, Inc.
<TABLE>
<CAPTION>

Management Fees Incurred
Fund 1997 1996 1995

<S> <C> <C> <C>
U.S. Growth Fund $230,497 earned $154,309 earned $105,965 earned
$230,497 paid $137,359 paid $63,298 paid
-$0- waived $16,950 waived $42,667 waived

Overseas Equity Fund $176,619 earned $167,584 earned $142,529 earned
$176,619 paid $47,994 paid $5,771 paid
-$0- waived $119,590 waived $136,758 waived

New Pacific Fund $118,010 earned $116,131 earned $119,820 earned
$109,011 paid $203 paid -$0- paid
$8,999 waived $115,928 waived $119,820 waived

</TABLE>

As authorized by the Investment Management Agreements relating to
each Fund, the Investment Manager, under the general supervision of the Board
of Directors, has selected and contracted with various sub-advisers to assist
with the management of the Fund's portfolios in accordance with each Fund's
stated objectives and policies. The Manager is responsible for compensating
such sub-advisers. The Manager has entered into separate Sub- Advisory
Agreements on behalf of U.S. Growth Fund and New Pacific Fund dated May 4,
1996 and on behalf of Overseas Equity Fund dated November 18, 1997. The terms
of the Sub-Advisory Agreements and requirements for Board approval and
termination are the same for these agreements as they are for the Investment
Management Agreements described above.

Each Fund pays all of its other expenses, including its proportionate
share of rent and certain other administrative expenses.

The ratios of expenses to average daily net assets for the fiscal
year ended October 31, 1997 for each Class of the Funds were as follows with
and without giving effect to any expense waivers or payments, as more fully
described below:

Ratio (With Ratio (Without
Giving Effect Giving Effect
Fund To Waiver) To Waiver)
---- ---------- ----------

U.S. Growth Fund

Class A Shares 1.44% 1.44%
Class B Shares 2.14% 2.14%
Class C Shares 2.14% 2.14%
Institutional Class 1.14% 1.14%

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<PAGE>

(DAF-SAI/PART B)

Ratio (With Ratio (Without
Giving Effect Giving Effect
Fund To Waiver) To Waiver)
---- ---------- ----------

Overseas Equity Fund
Class A Shares 1.80% 1.80%
Class B Shares 2.50% 2.50%
Class C Shares 2.50% 2.50%
Institutional Class 1.50% 1.50%

New Pacific Fund

Class A Shares 1.80% 1.86%
Class B Shares 2.50% 2.56%
Class C Shares 2.50% 2.56%
Institutional Class 1.50% 1.56%

The Manager has voluntarily committed to waive its fees or pay
expenses for the Funds beginning as of the close of business May 3, 1996
through April 30, 1998, as reflected below. The cap for each Fund has been
lowered from that maintained by the previous investment manager by 0.05%,
reflecting the reduction from 0.35% to 0.30% of the 12b-1 fees payable by the
Funds with respect to Class A Shares. The expense waivers and/or payments will
be reevaluated by the Manager periodically. The expense ratios presently being
maintained are as follows:

U.S. Growth Fund Overseas Equity Fund New Pacific Fund
---------------- -------------------- ----------------

<S> <C> <C> <C>
Class A Shares 1.44% 1.80% 1.80%
Class B Shares 2.14% 2.50% 2.50%
Class C Shares 2.14% 2.50% 2.50%
Institutional Class Shares 1.14% 1.50% 1.50%
</TABLE>

Sub-Advisers
The following registered investment advisers serve as sub-advisers to
the Funds indicated: Lynch & Mayer, Inc. serves as sub-adviser of U.S. Growth
Fund; Delaware International Advisers Ltd. serves as sub-adviser of Overseas
Equity Fund; and AIB Govett, Inc. serves as sub-adviser of New Pacific Fund.

During the past three fiscal years, the Sub-Adviser received fees from
the Manager in the following amounts:

October 31
1997 1996 1995
---- ---- ----
Lynch & Mayer $131,858 $ 88,177 $ 60,551
Delaware International
Advisers Ltd. 132,730 121,879 103,657
AIB Govett, Inc. 73,483 72,581 74,888

Lynch & Mayer, Inc. Dennis Lynch and Eldon Mayer established Lynch &
Mayer, Inc. in 1976. Lynch & Mayer, Inc. provides investment advice to pension
funds, foundations, endowments, trusts and high net worth individuals and
families. The firm also manages a closed-end convertible security fund which
is traded on the New York Stock Exchange. Lynch & Mayer, Inc.'s investment
expertise is in equities and convertible securities. As of October 31, 1997,
Lynch & Mayer, Inc. had total assets under management in excess of $6.2 billion.

Delaware International Adviser Ltd. was established in 1990 and began
serving as Sub-Adviser to Overseas Equity Fund on September 15, 1997. Delaware
International Advisers Ltd. provides investment advisory services to certain
other funds available from Delaware Investments and to institutional clients.
As of October 31, 1997, Delaware International Advisers Ltd. had total assets
under management in excess of $7 billion.

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<PAGE>

(DAF-SAI/PART B)

AIB Govett, Inc. is a unit of AIB Asset Management Holdings Limited,
a majority owned subsidiary of Allied Irish Bank plc ("AIB"), Ireland's
largest bank. AIB Govett, Inc. coordinates with its offices and affiliates
worldwide, including AIB Govett Asset Management Limited in London to provide
asset management, client service, marketing and business development for AIB's
North American asset management business. AIB Govett, Inc. has been an
investment adviser to clients such as investment trusts, investment companies,
mutual funds and pension funds since its inception in the 1920s. As of October
31, 1997, AIB Govett, Inc. had assets under management in excess of $14
billion.

Distribution and Service
The Distributor, Delaware Distributors, L.P. (which formerly
conducted business as Delaware Distributors, Inc.), located at 1818 Market
Street, Philadelphia, PA 19103, serves as the national distributor of the
Funds' shares under separate Distribution Agreements dated September 25, 1995.
The Distributor is an affiliate of the Manager and bears all of the costs of
promotion and distribution, except for payments by Class A Shares, Class B
Shares and Class C Shares of the Funds under their respective 12b-1 Plans.
Prior to September 25, 1995, LNC Equity Sales, Inc. served as the national
distributor of the Fund's shares. Delaware Distributors Inc. ("DDI") is the
corporate general partner of Delaware Distributors, L.P. and both DDI and
Delaware Distributors, L.P. are indirect, wholly owned subsidiaries of
Delaware Management Holdings, Inc. which, in turn, is a wholly owned
subsidiary of Lincoln National Corporation.

The Transfer Agent, Delaware Service Company, Inc., another affiliate
of the Manager located at 1818 Market Street, Philadelphia, PA 19103, serves
as the shareholder servicing, dividend disbursing and transfer agent for each
Fund pursuant to a Shareholders Services Agreement dated September 25, 1995.
The Transfer Agent also provides accounting services to the Funds pursuant to
the terms of a separate Fund Accounting Agreement. The Transfer Agent is also
an indirect, wholly owned subsidiary of Delaware Management Holdings, Inc.
and, therefore, Lincoln National Corporation.

The Fund has authorized one or more brokers to accept on its behalf
purchase and redemption orders in addition to the Transfer Agent. Such brokers
are authorized to designate other intermediaries to accept purchase and
redemption orders on the behalf of the Funds. For purposes of pricing, the
Funds will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts
the order.

-67-

<PAGE>

(DAF-SAI/PART B)

OFFICERS AND DIRECTORS

The business and affairs of Adviser Funds, Inc. are managed under the
direction of its Board of Directors.

Certain officers and directors of Adviser Funds, Inc. hold identical
positions in each of the other funds in Delaware Investments. On January 31,
1998, Adviser Fund's officers and directors owned less than 1% of the
outstanding shares of each of the Class A Shares, Class B Shares, Class C
Shares and the Institutional Class of each Fund, respectively.

As of January 31, 1998, management believes the following accounts
held 5% or more of the outstanding shares of a Fund's Class:

Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------

<S> <C> <C> <C>
U.S. Growth Fund Donaldson Lufkin Jenrette 49,184 6.36%
A Class Securities Corporation, Inc.
P.O. Box 2052
Jersey City, NJ 07303

U.S. Growth Fund Merrill Lynch, Pierce, Fenner & Smith 23,675 11.15%
B Class For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive, 3rd Floor
Jacksonville, FL 32246

U.S. Growth Fund RS Cimm's Inc. 401(k) Plan 6,837 19.05%
C Class Attn: Retirement Plans
1818 Market Street
Philadelphia, PA 19103

RS- Rommel Electric Co. 2,833 7.89%
Attn: Retirement Plans
1818 Market Street
Philadelphia, PA 19103

Nelson Family Trust 2,361 6.57%
Mary Corina Nelson TTE
P.O. Box 189
Hondo, TX 78861

Robert M. Wells 1,894 5.27%
11508 Cherry Blossom W. Dr.
Fishers, IN 46038

</TABLE>

-68-

<PAGE>

(DAF-SAI/PART B)

Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------

<S> <C> <C> <C>
U.S. Growth Fund Federated Life Insurance Co. 1,793,322 98.44%
Institutional Class Separate Account A
Attn: Tom Koch
P.O. Box 328
Owatonna, MN 55060

Overseas Equity Fund Merrill Lynch, Pierce, Fenner & Smith 26,964 17.06%
B Class For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive East, 3rd Floor
Jacksonville, FL 32246

DMTC C/F The Rollover IRA of 9,041 5.71%
Carl W. Niederwimmer
301 NW 73rd Terrace
Gladstone, MO 64118

Overseas Equity Prudential Securities Inc. FBO 2,049 12.97%
Fund C Class Crane Rental Service, Inc.
Account B
1901 West Collins Avenue
Orange, CA 92867

Merrill Lynch, Pierce, Fenner & Smith 1,318 8.34%
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive East, 3rd Floor
Jacksonville, FL 32246

NFSC FBO Chester M. Boltwood 1,269 8.03%
and Karen A. Boltwood
BNW-302864
828 Cobblestone Circle
Modesto, CA 95355

J.C. Bradford & Co. Cust FBO 1,139 7.21%
Sally S. Alterman
330 Commerce Street
Nashville, TN 37201

</TABLE>

-69-

<PAGE>

(DAF-SAI/PART B)

Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>
Overseas Equity
Fund PJH Prime Account 1,096 6.94%
C Class Donald W. Nelson, M.D.
Joanna R. Nelson
JT TEN WROS
5015 NW 127th Street
Vancouver, WA 98685

Carroll L. Englehardt and 979 6.19%
Joan L. Englehardt JT WROS
1210 3rd Street, South
Moorhead, MN 56560

DMTC Custodian for the IRA of 848 5.37%
Andrew W. Morris
3725 Arrowhead Drive
St. Augustine, FL 32086

Overseas Equity
Fund RS DMC Employee Profit Sharing Plan 4,515 85.29%
Institutional Class Delaware Management Co.
Employee Profit Sharing Trust
C/o Rick Seidel
1818 Market Street
Philadelphia, PA 19103

Lincoln National Investment Management 572 10.80%
Attn: Securities Adm. -3RO3
200 East Berry Street
Fort Wayne, IN 46802

New Pacific Fund Dale L. Sheaffer TTE 1,516 9.18%
C Class Dale L. Sheaffer DDS RET PL
FBO Dale L. Sheaffer
50 Evergreen Lane
Carlisle, PA 17013

Ronald Hoffman 1,283 7.76%
6 Elm Street
Newton, NJ 07860

</TABLE>

-70-

<PAGE>

(DAF-SAI/PART B)

Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>

New Pacific Fund David F. Lewis 1,189 7.19%
C Class 10750 Longfellow Trace
Shreveport, LA 71106

Mark M. Elkins 1,149 6.95%
1552 Heatherstone Drive
Fredericksburg, VA 22407

NFSC/FMTC IRA 1,030 6.23%
FBO Joseph G. Chin
33 Loughran Avenue
Stamford, CT 06902

New Pacific Fund RS DMC Employee Profit Sharing Plan 23,372 97.30%
Institutional Class Delaware Management Co.
Employee Profit Sharing Trust
c/o Rick Seidel
1818 Market Street
Philadelphia, PA 19103

</TABLE>

DMH Corp., Delvoy, Inc., Delaware Management Company, Inc., Delaware
Distributors, L.P., Delaware Distributors, Inc., Delaware Service Company,
Inc., Delaware Management Trust Company, Delaware International Holdings Ltd.,
Founders Holdings, Inc., Delaware International Advisers Ltd., Delaware
Capital Management, Inc. and Delaware Investment & Retirement Services, Inc.
are direct or indirect, wholly owned subsidiaries of Delaware Management
Holdings, Inc. ("DMH"). On April 3, 1995, a merger between DMH and a wholly
owned subsidiary of Lincoln National Corporation ("Lincoln National") was
completed. DMH and the Manager are now indirect, wholly owned subsidiaries,
and subject to the ultimate control, of Lincoln National. Lincoln National,
with headquarters in Fort Wayne, Indiana, is a diversified organization with
operations in many aspects of the financial services industry, including
insurance and investment management. After Lincoln National's acquisition of
DMH and the Manager, Lincoln National was operating two mutual fund complexes,
Delaware Investments and Lincoln Advisor Funds, Inc. (the "Lincoln Funds").
The directors and management of both mutual fund complexes concluded that the
extensive mutual fund experience and resources of Delaware Investments
warranted the consolidation of Lincoln Funds into Delaware Investments. On May
3, 1996, the shareholders of the Lincoln Funds approved the Investment
Management and Sub-Advisory Agreements and other matters giving effect to the
restructuring of the Funds to integrate them into Delaware Investments. See
Restructuring of the Funds in this Part B.

Certain officers and directors of Adviser Funds, Inc. hold identical
positions in each of the other funds available from Delaware Investments.
Directors and principal officers of Adviser Funds, Inc. are noted below along
with their ages and their business experience for the past five years. Unless
otherwise noted, the address of each officer and director is One Commerce
Square, Philadelphia, PA 19103.

-71-

<PAGE>

(DAF-SAI/PART B)

*Wayne A. Stork (60)

Chairman and Director and/or Trustee of Adviser Funds, Inc., each of
the other 33 investment companies in Delaware Investments,
Delaware Management Holdings, Inc. and Delaware Capital
Management, Inc.

Chairman, President, Chief Executive Officer and Director of DMH
Corp., Delaware Distributors, Inc. and Founders Holdings,
Inc.
Chairman, President, Chief Executive Officer, Chief Investment
Officer and Director of Delaware Mana gemen t Comp any, Inc.
Chairman, Chief Executive Officer and Director of Delaware
International Advisers Ltd. and Delaware International
Holdings Ltd.

Chairman of Delaware Distributors, L.P.
Chief Executive Officer of Delvoy, Inc.

Director of Delaware Service Company, Inc. and Delaware Investment &
Retirement Services, Inc.

During the past five years, Mr. Stork has served in various
executive capacities at different times within the Delaware
organization.

* Jeffrey J. Nick (44)

President, Chief Executive Officer and Director and/or Trustee of
Adviser Funds, Inc. and each of the other 33 investment
companies in Delaware Investments.

President, Chief Executive Officer and Director of Lincoln National
Investment Companies, Inc. and Delaware Management Holdings,
Inc
President of Lincoln Funds Corporation.
From 1992 to 1996, Mr. Nick was Managing Director of Lincoln
National UK plc and from 1989 to 1992, he was Senior Vice
President responsible for corporate planning and development
for Lincoln National Corporation.

Richard G. Unruh, Jr. (58)

Executive Vice President of Adviser Funds, Inc., each of the other 33
investment companies in Delaware Investments, Delaware
Management Holdings, Inc. and Delaware Capital Management,
Inc.

Executive Vice President and Director of Delaware Management Company,
Inc.
Director of Delaware International Advisers Ltd.
During the past five years, Mr. Unruh has served in various
executive capacities at different times within the Delaware
organization.

- ----------------------
*Director affiliated with Adviser Funds, Inc.'s investment manager and
considered an "interested person" as defined in the 1940 Act.

-72-

<PAGE>

(DAF-SAI/PART B)

Paul E. Suckow (50)

Executive Vice President/Chief Investment Officer, Fixed Income of
Adviser Funds, Inc., each of the other 33 investment
companies in Delaware Investments, Delaware Management
Company, Inc. and Delaware Management Holdings, Inc.
Executive Vice President and Director of Founders Holdings, Inc.
Executive Vice President of Delaware Capital Management, Inc.
Director of Founders CBO Corporation and HYPPCO Finance Company Ltd.
Before returning to Delaware Investments in 1993, Mr. Suckow was
Executive Vice President and Director of Fixed Income for
Oppenheimer Management Corporation, New York, NY from 1985
to 1992. Prior to that, Mr. Suckow was a fixed-income
portfolio manager for Delaware Investments.

Walter P. Babich (70)

Director and/or Trustee of Adviser Funds, Inc. and each of the other
33 investment companies in Delaware Investments.

460 North Gulph Road, King of Prussia, PA 19406.
Board Chairman, Citadel Constructors, Inc.
From 1986 to 1988, Mr. Babich was a partner of Irwin & Leighton
and from 1988 to 1991, he was a partner of I&L Investors.

Anthony D. Knerr (59)

Director and/or Trustee of Adviser Funds, Inc. and each of the other
33 investment companies in Delaware Investments.

500 Fifth Avenue, New York, NY 10110.
Founder and Managing Director, Anthony Knerr & Associates.
From 1982 to 1988, Mr. Knerr was Executive Vice President/Finance
and Treasurer of Columbia University, New York. From 1987 to
1989, he was also a lecturer in English at the University.
In addition, Mr. Knerr was Chairman of The Publishing Group,
Inc., New York, from 1988 to 1990. Mr. Knerr founded The
Publishing Group, Inc. in 1988.

Ann R. Leven (57)

Director and/or Trustee of Adviser Funds, Inc. and each of the other
33 investment companies in Delaware Investments.

785 Park Avenue, New York, NY 10021.
Treasurer, National Gallery of Art.
From 1984 to 1990, Ms. Leven was Treasurer and Chief Fiscal
Officer of the Smithsonian Institution, Washington, DC, and
from 1975 to 1992, she was Adjunct Professor of Columbia
Business School.

W. Thacher Longstreth (77)

Director and/or Trustee of Adviser Funds, Inc. and each of the other
33 investment companies in Delaware Investments.

City Hall, Philadelphia, PA 19107.
Philadelphia City Councilman.

-73-

<PAGE>

(DAF-SAI/PART B)

Thomas F. Madison (61)

Director and/or Trustee of Adviser Funds, Inc. and each of the other
33 investment companies in Delaware Investments.

President and Chief Executive Officer, MLM Partners, Inc.
200 South Fifth Street, Suite 2100, Minneapolis, Minnesota 55402.
Mr. Madison has also been Chairman of the Board of Communications
Holdings, Inc. since 1996.
From February to September 1994, Mr. Madison served as Vice
Chairman--Office of the CEO of The Minnesota Mutual Life
Insurance Company and from 1988 to 1993, he was President of
U.S. WEST Communications--Markets.

Charles E. Peck (72)

Director and/or Trustee of Adviser Funds, Inc. and each of the other
33 investment companies in Delaware Investments.

P.O. Box 1102, Columbia, MD 21044.
Secretary/Treasurer, Enterprise Homes, Inc.
From 1981 to 1990, Mr. Peck was Chairman and Chief Executive
Officer of The Ryland Group, Inc., Columbia, MD.

David K. Downes (58)

Executive Vice President, Chief Operating Officer, Chief Financial
Officer of Adviser Funds, Inc., each of the other 33
investment companies in Delaware Investments, Delaware
Management Holdings, Inc, Founders CBO Corporation, Delaware
Capital Management, Inc. and Delaware Distributors, L.P.
Executive Vice President, Chief Operating Officer, Chief Financial
Officer and Director of Delaware Management Company, Inc.,
DMH Corp., Delaware Distributors, Inc., and Founders
Holdings, Inc.

President, Chief Executive Officer, Chief Financial Officer and
Director of Delaware Service Company, Inc.
President, Chief Operating Officer, Chief Financial Officer and
Director of Delaware International Holdings Ltd.

Chairman, Chief Executive Officer and Director of Delaware Investment
& Retirement Services, Inc.
Chairman and Director of Delaware Management Trust Company.
Director of Delaware International Advisers Ltd. and Delvoy, Inc.

Vice President of Lincoln Funds Corporation

Before joining Delaware Investments in 1992, Mr. Downes was Chief
Administrative Officer, Chief Financial Officer and
Treasurer of Equitable Capital Management Corporation, New
York, from December 1985 through August 1992, Executive Vice
President from December 1985 through March 1992, and Vice
Chairman from March 1992 through August 1992.

-74-

<PAGE>

(DAF-SAI/PART B)

George M. Chamberlain, Jr. (51)

Senior Vice President, Secretary and General Counsel of Adviser
Funds, Inc., each of the other 33 investment companies in
Delaware Investments, Delaware Distributors, L.P. and
Delaware Management Holdings, Inc.
Senior Vice President, Secretary, General Counsel and Director of
DMH Corp., Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Service Company, Inc., Founders
Holdings, Inc., Delaware Investment & Retirement Services,
Inc., and Delaware Capital Management, Inc.

Executive Vice President, Secretary, General Counsel and Director of
Delaware Management Trust Company.

Senior Vice President and Director of Delaware International Holdings
Ltd.
Director of Delaware International Advisers Ltd. and Delvoy, Inc.
Secretary of Lincoln Funds Corporation

Attorney.
During the past five years, Mr. Chamberlain has served in various
capacities at different times within the Delaware
organization.

Joseph H. Hastings (48)

Senior Vice President/Corporate Controller of Adviser Funds, Inc.,
each of the other 33 investment companies in Delaware
Investments and Founders Holdings, Inc.
Senior Vice President/Corporate Controller and Treasurer of
Delaware Management Holdings, Inc., DMC Corp., Delaware
Management Company, Inc., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Capital Management, Inc. and Delaware International
Holdings Ltd.
Senior Vice President/Controller and Treasurer of Delvoy, Inc.

Chief Financial Officer/Treasurer of Delaware Investment &
Retirement Services, Inc.
Executive Vice President/Chief Financial Officer/Treasurer of
Delaware Management Trust Company.
Senior Vice President/Assistant Treasurer of Founders CBO Corporation.
Treasurer of Lincoln Funds Corporation
1818 Market Street, Philadelphia, PA 19103.

Before joining Delaware Investments in 1992, Mr. Hastings was Chief
Financial Officer for Prudential Residential Services, L.P.,
New York, NY from 1989 to 1992. Prior to that, Mr. Hastings
served as Controller and Treasurer for Fine Homes
International, L.P., Stamford, CT from 1987 to 1989.

Michael P. Bishof (35)

Senior Vice President/Treasurer of Adviser Funds, Inc., each of the
other 33 investment companies in Delaware Investments,
Delaware Distributors, Inc. and Founders Holdings, Inc.
Senior Vice President/Investment Accounting of Delaware Management
Company, Inc. and Delaware Service Company, Inc.

Senior Vice President and Treasurer/Manager of Investment Accounting of
Delaware Distributors, L.P.
Senior Vice President and Manager of Investment Accounting of Delaware
International Holdings Ltd.
Assistant Treasurer of Founders CBO Corporation.

Before joining Delaware Investments in 1995, Mr. Bishof was a Vice
President for Bankers Trust, New York, NY from 1994 to 1995,
a Vice President for CS First Boston Investment Management,
New York, NY from 1993 to 1994 and an Assistant Vice
President for Equitable Capital Management Corporation, New
York, NY from 1987 to 1993.

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(DAF-SAI/PART B)

The following is a compensation table listing for each director
entitled to receive compensation, the aggregate compensation received from
Adviser Funds, Inc. and the total compensation received from all Delaware
Investments funds for the fiscal year ended October 31, 1997 and an estimate
of annual benefits to be received upon retirement under the Delaware
Investments Retirement Plan for Directors/Trustees as of December 31, 1997.
<TABLE>
<CAPTION>

Pension or
Retirement
Benefits Total
Accrued as Estimated Compensation
Aggregate Part of Annual from all 34
Compensation Adviser Benefits Investment Companies
from Adviser Funds, Inc. Upon in Delaware
Name Funds, Inc. Expenses Retirement* Investments
- ---- ----------- -------- ----------- -----------

<S> <C> <C> <C> <C>
W. Thacher Longstreth $1,155 None $38,500 $58,618
Ann R. Leven $1,191 None $38,500 $63,743
Walter P. Babich $1,426 None $38,500 $62,473
Anthony D. Knerr $1,183 None $38,500 $62,743
Charles E. Peck $1,293 None $38,500 $55,432
Thomas F. Madison** $535 None $38,500 $30,913

</TABLE>

* Under the terms of the Delaware Investments Retirement Plan for
Directors/Trustees, each disinterested director who, at the time of
his or her retirement from the Board, has attained the age of 70 and
served on the Board for at least five continuous years, is entitled
to receive payments from each fund available from Delaware
Investments for a period equal to the lesser of the number of years
that such person served as a director or the remainder of such
person's life. The amount of such payments will be equal, on an
annual basis, to the amount of the annual retainer that is paid to
directors of each fund at the time of such person's retirement. If an
eligible director retired as of December 31, 1997, he or she would be
entitled to annual payments totaling $38,500, in the aggregate, from
all of the funds available from Delaware Investments, based on the
number of funds available from Delaware Investments as of that date.

*** Thomas F. Madison joined Adviser Funds, Inc.'s Board of Directors on
April 30, 1997.

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<PAGE>

(DAF-SAI/PART B)

EXCHANGE PRIVILEGE

The exchange privileges available for shareholders of the Classes and
for shareholders of classes of other funds available from Delaware Investments
are set forth in the relevant prospectuses for such classes. The following
supplements that information. Each Fund may modify, terminate or suspend the
exchange privilege upon 60 days' notice to shareholders.

All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and
carefully read that fund's prospectus before buying shares in an exchange. The
prospectus contains more complete information about the fund, including
charges and expenses. A shareholder requesting an exchange will be sent a
current prospectus and an authorization form for any of the other mutual funds
available from Delaware Investments. Exchange instructions must be signed by
the record owner(s) exactly as the shares are registered.

An exchange constitutes, for tax purposes, the sale of one fund and
the purchase of another. The sale may involve either a capital gain or loss to
the shareholder for federal income tax purposes.

In addition, investment advisers and dealers may make exchanges
between funds available from Delaware Investments on behalf of their clients
by telephone or other expedited means. This service may be discontinued or
revised at any time by the Transfer Agent. Such exchange requests may be
rejected if it is determined that a particular request or the total requests
at any time could have an adverse effect on any of the funds. Requests for
expedited exchanges may be submitted with a properly completed exchange
authorization form, as described above.

Telephone Exchange Privilege

Shareholders owning shares for which certificates have not been
issued or their investment dealers of record may exchange shares by telephone
for shares in other mutual funds available from Delaware Investments. This
service is automatically provided unless the relevant Fund receives written
notice from the shareholder to the contrary.

Shareholders or their investment dealers of record may contact the
Shareholder Service Center at 800-523- 1918 or, in the case of shareholders of
the Institutional Class, their Client Services Representative at 800-828-5052
to effect an exchange. The shareholder's current Fund account number must be
identified, as well as the registration of the account, the share or dollar
amount to be exchanged and the fund into which the exchange is to be made.
Requests received on any day after the time the offering price and net asset
value are determined will be processed the following day. See Determining
Offering Price and Net Asset Value. Any new account established through the
exchange will automatically carry the same registration, shareholder
information and dividend option as the account from which the shares were
exchanged. The exchange requirements of the fund into which the exchange is
being made, such as sales charges, eligibility and investment minimums, must
be met. (See the prospectus of the fund desired or inquire by calling the
Transfer Agent or, as relevant, your Client Services Representative.) Certain
funds are not available for retirement plans.

The telephone exchange privilege is intended as a convenience to
shareholders and is not intended to be a vehicle to speculate on short-term
swings in the securities market through frequent transactions in and out of
the funds available from Delaware Investments. Telephone exchanges may be
subject to limitations as to amounts or frequency. The Transfer Agent and each
Fund reserves the right to record exchange instructions received by telephone
and to reject exchange requests at any time in the future.

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<PAGE>

(DAF-SAI/PART B)

As described in the Funds' Prospectuses, neither the Funds nor the
Transfer Agent is responsible for any shareholder loss incurred in acting upon
written or telephone instructions for redemption or exchange of Fund shares
which are reasonably believed to be genuine.

Right to Refuse Timing Accounts

With regard to accounts that are administered by market timing
services ("Timing Firms") to purchase or redeem shares based on changing
economic and market conditions ("Timing Accounts"), the Funds will refuse any
new timing arrangements, as well as any new purchases (as opposed to
exchanges) in Delaware Investments funds from Timing Firms. The Funds reserve
the right to temporarily or permanently terminate the exchange privilege or
reject any specific purchase order for any person whose transactions seem to
follow a timing pattern who: (i) makes an exchange request out of a Fund
within two weeks of an earlier exchange request out of such Fund, or (ii)
makes more than two exchanges out of a Fund per calendar quarter, or (iii)
exchanges shares equal in value to at least $5 million, or more than 1/4 of 1%
of a Fund's net assets. Accounts under common ownership or control, including
accounts administered so as to redeem or purchase shares based upon certain
predetermined market indicators, will be aggregated for purposes of the
exchange limits.

Restrictions on Timed Exchanges

Timing Accounts operating under existing timing agreements may only
execute exchanges between the following eight Delaware Investments funds: (1)
Decatur Income Fund, (2) Decatur Total Return Fund, (3) Delaware Fund, (4)
Limited-Term Government Fund, (5) USA Fund, (6) Delaware Cash Reserve, (7)
Delchester Fund and (8) Tax-Free Pennsylvania Fund. No other Delaware
Investments funds are available for timed exchanges. Assets redeemed or
exchanged out of Timing Accounts in Delaware Investments funds not listed
above may not be reinvested back into that Timing Account. The Funds reserve
the right to apply these same restrictions to the account(s) of any person
whose transactions seem to follow a time pattern (as described above).

Each Fund also reserves the right to refuse the purchase side of an
exchange request by any Timing Account, person, or group if, in the Manager's
judgment, a Fund would be unable to invest effectively in accordance with its
investment objective and policies, or would otherwise potentially be adversely
affected. A shareholder's purchase exchanges may be restricted or refused if a
Fund receives or anticipates simultaneous orders affecting significant
portions of the Fund's assets. In particular, a pattern of exchanges that
coincide with a "market timing" strategy may be disruptive to a Fund and
therefore may be refused.

Except as noted above, only shareholders and their authorized brokers
of record will be permitted to make exchanges or redemptions.

* * *

Following is a summary of the investment objectives of the other
Delaware Investments funds:

Delaware Fund seeks long-term growth by a balance of capital
appreciation, income and preservation of capital. It uses a dividend-oriented
valuation strategy to select securities issued by established companies that
are believed to demonstrate potential for income and capital growth. Devon
Fund seeks current income and capital appreciation by investing primarily in
income-producing common stocks, with a focus on common stocks the Manager
believes have the potential for above average dividend increases over time.

Trend Fund seeks long-term growth by investing in common stocks
issued by emerging growth companies exhibiting strong capital appreciation
potential.

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(DAF-SAI/PART B)

Small Cap Value Fund seeks capital appreciation by investing
primarily in common stocks whose market values appear low relative to their
underlying value or future potential.

DelCap Fund seeks long-term capital growth by investing in common
stocks and securities convertible into common stocks of companies that have a
demonstrated history of growth and have the potential to support continued
growth.

Decatur Income Fund seeks the highest possible current income by
investing primarily in common stocks that provide the potential for income and
capital appreciation without undue risk to principal. Decatur Total Return
Fund seeks long-term growth by investing primarily in securities that provide
the potential for income and capital appreciation without undue risk to
principal. Blue Chip Fund seeks to achieve long-term capital appreciation.
Current income is a secondary objective. It seeks to achieve these objectives
by investing primarily in equity securities and any securities that are
convertible into equity securities. Social Awareness Fund seeks to achieve
long-term capital appreciation. It seeks to achieve this objective by
investing primarily in equity securities of medium- to large-sized companies
expected to grow over time that meet the Fund's "Social Criteria" strategy.

Delchester Fund seeks as high a current income as possible by
investing principally in high yield, high risk corporate bonds, and also in
U.S. government securities and commercial paper. Strategic Income Fund seeks
to provide investors with high current income and total return by using a
multi-sector investment approach, investing principally in three sectors of
the fixed-income securities markets: high yield, higher risk securities,
investment grade fixed-income securities and foreign government and other
foreign fixed-income securities. High-Yield Opportunities Fund seeks to
provide investors with total return and, as a secondary objective, high
current income.

U.S. Government Fund seeks high current income by investing primarily
in long-term debt obligations issued or guaranteed by the U.S. government, its
agencies or instrumentalities.

Limited-Term Government Fund seeks high, stable income by investing
primarily in a portfolio of short-and intermediate-term securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities and
instruments secured by such securities. U.S. Government Money Fund seeks
maximum current income with preservation of principal and maintenance of
liquidity by investing only in short-term securities issued or guaranteed as
to principal and interest by the U.S. government, its agencies or
instrumentalities, and repurchase agreements collateralized by such
securities, while maintaining a stable net asset value.

Delaware Cash Reserve seeks the highest level of income consistent
with the preservation of capital and liquidity through investments in
short-term money market instruments, while maintaining a stable net asset
value.

REIT Fund seeks to achieve maximum long-term total return with
capital appreciation as a secondary objective. It seeks to achieve its
objectives by investing in securities of companies primarily engaged in the
real estate industry.

Tax-Free USA Fund seeks high current income exempt from federal
income tax by investing in municipal bonds of geographically-diverse issuers.
Tax-Free Insured Fund invests in these same types of securities but with an
emphasis on municipal bonds protected by insurance guaranteeing principal and
interest are paid when due. Tax- Free USA Intermediate Fund seeks a high level
of current interest income exempt from federal income tax, consistent with the
preservation of capital by investing primarily in municipal bonds.

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(DAF-SAI/PART B)

Tax-Free Money Fund seeks high current income, exempt from federal
income tax, by investing in short-term municipal obligations, while
maintaining a stable net asset value.

Tax-Free New Jersey Fund seeks a high level of current interest
income exempt from federal income tax and New Jersey state and local taxes,
consistent with preservation of capital. Tax-Free Ohio Fund seeks a high level
of current interest income exempt from federal income tax and Ohio state and
local taxes, consistent with preservation of capital. Tax-Free Pennsylvania
Fund seeks a high level of current interest income exempt from federal income
tax and Pennsylvania state and local taxes, consistent with the preservation
of capital.

International Equity Fund seeks to achieve long-term growth without
undue risk to principal by investing primarily in international securities
that provide the potential for capital appreciation and income. Global Bond
Fund seeks to achieve current income consistent with the preservation of
principal by investing primarily in global fixed-income securities that may
also provide the potential for capital appreciation. Global Assets Fund seeks
to achieve long-term total return by investing in global securities which will
provide higher current income than a portfolio comprised exclusively of equity
securities, along with the potential for capital growth. Emerging Markets Fund
seeks long-term capital appreciation by investing primarily in equity
securities of issuers located or operating in emerging countries.

Delaware Group Premium Fund, Inc. offers 15 funds available
exclusively as funding vehicles for certain insurance company separate
accounts. Decatur Total Return Series seeks the highest possible total rate of
return by selecting issues that exhibit the potential for capital appreciation
while providing higher than average dividend income. Delchester Series seeks
as high a current income as possible by investing in rated and unrated
corporate bonds, U.S. government securities and commercial paper. Capital
Reserves Series seeks a high stable level of current income while minimizing
fluctuations in principal by investing in a diversified portfolio of short-and
intermediate-term securities. Cash Reserve Series seeks the highest level of
income consistent with preservation of capital and liquidity through
investments in short-term money market instruments. DelCap Series seeks
long-term capital appreciation by investing its assets in a diversified
portfolio of securities exhibiting the potential for significant growth.
Delaware Series seeks a balance of capital appreciation, income and
preservation of capital. It uses a dividend-oriented valuation strategy to
select securities issued by established companies that are believed to
demonstrate potential for income and capital growth. International Equity
Series seeks long-term growth without undue risk to principal by investing
primarily in equity securities of foreign issuers that provide the potential
for capital appreciation and income. Value Series seeks capital appreciation
by investing in small- to mid- cap common stocks whose market values appear
low relative to their underlying value or future earnings and growth
potential. Emphasis will also be placed on securities of companies that may be
temporarily out of favor or whose value is not yet recognized by the market.
Trend Series seeks long-term capital appreciation by investing primarily in
small-cap common stocks and convertible securities of emerging and other
growth-oriented companies. These securities will have been judged to be
responsive to changes in the market place and to have fundamental
characteristics to support growth. Income is not an objective. Global Bond
Series seeks to achieve current income consistent with the preservation of
principal by investing primarily in global fixed-income securities that may
also provide the potential for capital appreciation. Strategic Income Series
seeks high current income and total return by using a multi-sector investment
approach, investing primarily in three sectors of the fixed-income securities
markets: high-yield, higher risk securities; investment grade fixed-income
securities; and foreign government and other foreign fixed-income securities.
Devon Series seeks current income and capital appreciation by investing
primarily in income-producing common stocks, with a focus on common stocks
that the investment manager believes have the potential for above-average
dividend increases over time. Emerging Markets Series seeks to achieve
long-term capital appreciation by investing primarily in equity securities of
issuers located or operating in emerging countries. Convertible Securities
Series seeks a high level of total return on its assets through a

-80-

<PAGE>

(DAF-SAI/PART B)

combination of capital appreciation and current income by investing primarily
in convertible securities. Quantum Series seeks to achieve long-term capital
appreciation by investing primarily in equity securities of medium to large-
sized companies expected to grow over time that meet the Series' "Social
Criteria" strategy.

Delaware-Voyageur US Government Securities Fund seeks to provide a
high level of current income consistent with the prudent investment risk by
investing in U.S. Treasury bills, notes, bonds, and other obligations issued
or unconditionally guaranteed by the full faith and credit of the U.S.
Treasury, and repurchase agreements fully secured by such obligations.

Delaware-Voyageur Tax-Free Arizona Insured Fund seeks to provide a
high level of current income exempt from federal income tax and the Arizona
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Minnesota Insured Fund seeks to provide a high level of
current income exempt from federal income tax and the Minnesota personal
income tax, consistent with the preservation of capital.

Delaware-Voyageur Tax-Free Minnesota Intermediate Fund seeks to
provide a high level of current income exempt from federal income tax and the
Minnesota personal income tax, consistent with preservation of capital. The
Fund seeks to reduce market risk by maintaining an average weighted maturity
from five to ten years.

Delaware-Voyageur Tax-Free California Insured Fund seeks to provide a
high level of current income exempt from federal income tax and the California
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Florida Insured Fund seeks to provide a high level
of current income exempt from federal income tax, consistent with the
preservation of capital. The Fund will seek to select investments that will
enable its shares to be exempt from the Florida intangible personal property
tax. Delaware-Voyageur Tax- Free Florida Fund seeks to provide a high level of
current income exempt from federal income tax, consistent with the
preservation of capital. The Fund will seek to select investments that will
enable its shares to be exempt from the Florida intangible personal property
tax. Delaware-Voyageur Tax-Free Kansas Fund seeks to provide a high level of
current income exempt from federal income tax, the Kansas personal income tax
and the Kansas Intangible personal property tax, consistent with the
preservation of capital. Delaware-Voyageur Tax-Free Missouri Insured Fund
seeks to provide a high level of current income exempt from federal income tax
and the Missouri personal income tax, consistent with the preservation of
capital. Delaware-Voyageur Tax-Free New Mexico Fund seeks to provide a high
level of current income exempt from federal income tax and the New Mexico
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Oregon Insured Fund seeks to provide a high level
of current income exempt from federal income tax and the Oregon personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Tax-Free Utah Fund seeks to provide a high level of current income exempt from
federal income tax, consistent with the preservation of capital. Delaware-
Voyageur Tax-Free Washington Insured Fund seeks to provide a high level of
current income exempt from federal income tax, consistent with the
preservation of capital.

Delaware-Voyageur Tax-Free Florida Intermediate Fund seeks to provide
a high level of current income exempt from federal income tax, consistent with
the preservation of capital. The Fund will seek to select investments that
will enable its shares to be exempt from the Florida intangible personal
property tax. The Fund seeks to reduce market risk by maintaining an average
weighted maturity from five to ten years.

Delaware-Voyageur Tax-Free Arizona Fund seeks to provide a high level
of current income exempt from federal income tax and the Arizona personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Tax-Free California Fund seeks to provide a high level of current income
exempt from federal income tax and the California personal income tax,
consistent with the preservation of capital. Delaware- Voyageur Tax-Free Iowa
Fund seeks to provide a high level of current income exempt from federal
income tax and the Iowa personal income tax, consistent with the preservation
of capital. Delaware-Voyageur Tax-Free Idaho Fund seeks to provide a high
level of current income exempt from federal income tax and the Idaho personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Minnesota High Yield Municipal Bond Fund seeks to provide a high level of
current income exempt from federal income tax and the Minnesota personal
income tax primarily through investment in medium and lower grade municipal
obligations. National High Yield Municipal Fund seeks to provide a high level
of income exempt from federal income tax, primarily through investment in
medium and lower grade municipal obligations. Delaware-Voyageur Tax-Free New
York Fund seeks to provide a high level of current income exempt from federal
income tax and the personal income tax of the state of New York and the city
of New York, consistent with the preservation of capital. Delaware- Voyageur
Tax-Free Wisconsin Fund seeks to provide a high level of current income exempt
from federal income tax and the Wisconsin personal income tax, consistent with
the preservation of capital.

Delaware-Voyageur Tax-Free Colorado Fund seeks to provide a high
level of current income exempt from federal income tax and the Colorado
personal income tax, consistent with the preservation of capital.

Aggressive Growth Fund seeks long-term capital appreciation, which
the Fund attempts to achieve by investing primarily in equity securities
believed to have the potential for high earnings growth. Although the Fund, in
seeking its objective, may receive current income from dividends and interest,
income is only an incidental consideration in the selection of the Fund's
investments. Growth Stock Fund has an objective of long-term capital
appreciation. The Fund seeks to achieve its objective from equity securities
diversified among individual companies and industries. Tax-Efficient Equity
Fund seeks to obtain for taxable investors a high total return on an after-tax
basis. The Fund will attempt to achieve this objective by seeking to provide a
high long-term after-tax total return through managing its portfolio in a
manner that will defer the realization of accrued capital gains and minimize
dividend income.

Delaware-Voyageur Tax-Free Minnesota Fund seeks to provide a high
level of current income exempt from federal income tax and the Minnesota
personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free North Dakota Fund seeks to provide a high level of
current income exempt from federal income tax and the North Dakota personal
income tax, consistent with the preservation of capital.

-81-

<PAGE>

(DAF-SAI/PART B)

For more complete information about any of the Delaware Investments
funds, including charges and expenses, you can obtain a prospectus from the
Distributor. Read it carefully before you invest or forward funds.

Each of the summaries above is qualified in its entirety by the
information contained in each fund's prospectus(es).

-82-

<PAGE>

(DAF-SAI/PART B)

GENERAL INFORMATION

The Manager is the investment manager of each Fund of Adviser Funds,
Inc. The Manager also provides investment management services to certain of
the other funds available from Delaware Investments. The Manager, through a
separate division, also manages private investment accounts. While investment
decisions of the Funds are made independently from those of the other funds
and accounts, investment decisions for such other funds and accounts may be
made at the same time as investment decisions for the Funds.

The Manager, or its affiliate Delaware International Advisers Ltd.,
also manages the investment options for Delaware Medallion(SM) III Variable
Annuity. Medallion is issued by Allmerica Financial Life Insurance and Annuity
Company (First Allmerica Financial Life Insurance Company in New York and
Hawaii). Delaware Medallion offers 15 different investment series ranging from
domestic equity funds, international equity and bond funds and domestic fixed
income funds. Each investment series available through Medallion utilizes an
investment strategy and discipline the same as or similar to one of the
Delaware Investments mutual funds available outside the annuity. See Delaware
Group Premium Fund, Inc., above.

Access persons and advisory persons of the Delaware Investments
family of funds, as those terms are defined in SEC Rule 17j-1 under the 1940
Act, who provide services to the Manager, the International Advisers Ltd. or
their affiliates, are permitted to engage in personal securities transactions
subject to the exceptions set forth in Rule 17j-1 and the following general
restrictions and procedures: (1) certain blackout periods apply to personal
securities transactions of those persons; (2) transactions must receive
advance clearance and must be completed on the same day as the clearance was
received; (3) certain persons are prohibited from investing in initial public
offerings of securities and other restrictions apply to investments in private
placements of securities; (4) opening positions may only be closed-out at a
profit after a 60-day holding period has elapsed; and (5) the Compliance
Officer must be informed periodically of all securities transactions and
duplicate copies of brokerage confirmations and account statements must be
supplied to the Compliance Officer.

The Distributor acts as national distributor for each Fund and for
the other mutual funds available from Delaware Investments. As previously
described, prior to September 25, 1995, LNC Equity Sales, Inc. ("LNC Equity")
served as the national distributor for the Funds. The Distributor received net
commissions from each Fund on behalf of Class A Shares, after reallowances to
dealers, as follows:

U.S. Growth Fund
Class A Shares

Total
Fiscal Amount of Amounts Net
Year Underwriting Reallowed Commission
Ended Commissions to Dealers to DDLP
----- ----------- ---------- -------

<S> <C> <C> <C>
10/31/97 $32,142 $7,034 $25,108
10/31/96 $2,551 $2,141 $410

</TABLE>

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<PAGE>

(DAF-SAI/PART B)
<TABLE>
<CAPTION>

Overseas Equity Fund
Class A Shares
Total
Fiscal Amount of Amounts Net
Year Underwriting Reallowed Commission
Ended Commissions to Dealers to DDLP
----- ----------- ---------- -------

<S> <C> <C> <C>
10/31/97 $15,657 $3,194 $12,463
10/31/96 $4,626 $3,880 $746

New Pacific Fund
Class A Shares
Total
Fiscal Amount of Amounts Net
Year Underwriting Reallowed Commission
Ended Commissions to Dealers to DDLP
----- ----------- ---------- -------
<S> <C> <C> <C>
10/31/97 $28,375 $5,847 $22,528
10/31/96 $4,740 $3,912 $828
</TABLE>

The Distributor received in the aggregate Limited CDSC payments with
respect to Class A Shares of each Fund as follows:

Limited CDSC Payments
Fiscal
Year U.S. Growth Overseas Equity New Pacific
Ended Fund A Class Fund A Class Fund A Class
----- ------------ ------------ ------------

<S> <C> <C> <C>
10/31/97 $-0- $-0- $-0-
10/31/96 $-0- $-0- $-0-

</TABLE>

The Distributor received in the aggregate CDSC payments with respect
to Class B Shares of each Fund as follows:

CDSC Payments
Fiscal
Year U.S. Growth Overseas Equity New Pacific
Ended Fund B Class Fund B Class Fund B Class
----- ------------ ------------ ------------
<S> <C> <C> <C>

10/31/97 $3,339 $2,815 $4,476
10/31/96 $643 $3,542 $742

</TABLE>

The Distributor received in the aggregate CDSC payments with respect
to Class C Shares of each Fund as follows:

CDSC Payments
Fiscal
Year U.S. Growth Overseas Equity New Pacific
Ended Fund C Class Fund C Class Fund C Class
----- ------------ ------------ ------------

<S> <C> <C> <C>
10/31/97 $108 $24 $33
10/31/96 $36 $20 $4

</TABLE>

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<PAGE>

(DAF-SAI/PART B)

The Transfer Agent, an affiliate of the Manager, acts as shareholder
servicing, dividend disbursing and transfer agent for each Fund and for the
other mutual funds available from Delaware Investments. The Transfer Agent is
paid a fee by each Fund for providing these services consisting of an annual
per account charge of $5.50 plus transaction charges for particular services
according to a schedule. Compensation is fixed each year and approved by the
Board of Directors, including a majority of the disinterested directors. The
Transfer Agent also provides accounting services to each Fund. Those services
include performing all functions related to calculating each Fund's net asset
value and providing all financial reporting services, regulatory compliance
testing and the related accounting services. For its services, the Transfer
Agent is paid a fee based on total assets of all funds available from Delaware
Investments for which it provides such accounting services. Such fee is equal
to 0.25% multiplied by the total amount of assets in the complex for which the
Transfer Agent furnishes accounting services, where such aggregate complex
assets are $10 billion or less, and 0.20% of assets if such aggregate complex
assets exceed $10 billion. The fees are charged to each fund, including each
Fund, on an aggregate pro-rata basis. The asset-based fee payable to the
Transfer Agent is subject to a minimum fee calculated by determining the total
number of investment portfolios and associated classes.

The Manager and its affiliates own the name "Delaware Group." Under
certain circumstances, including the termination of Adviser Funds, Inc.'s
advisory relationships with the Manager or its distribution relationships with
the Distributor, the Manager and its affiliates could cause Adviser Funds,
Inc. to delete the words "Delaware Group" from Adviser Funds, Inc.'s name.

The Chase Manhattan Bank ("Chase"), 4 Chase Metrotech Center,
Brooklyn, NY 11245 is custodian of Adviser Funds, Inc.'s securities and cash.
As custodian, Chase maintains a separate account for each Fund; receives,
holds and releases portfolio securities on account of the Funds; receives and
disburses money on behalf of each Fund; and collects and receives income and
other payments and distributions on account of each Fund's portfolio
securities.

Restructuring of the Funds
Until April 26, 1996, Adviser Funds, Inc. consisted of nine series of
shares (U.S. Growth Fund, World Growth Fund (now named Overseas Equity Fund)
and New Pacific Fund, as well as six other funds) and was named Lincoln
Advisor Funds, Inc. ("LAF"). On February 23, 1996, LAF's Board of Directors
approved a restructuring to integrate fully LAF into the Delaware Investments
family of funds. The restructuring provided, among other things, for the
liquidation of three funds; the appointment of Delaware Management Company,
Inc. as the investment manager of each of the Funds; the appointment of
certain sub-advisers; changes in certain names, including: Lincoln U.S. Growth
Portfolio to U.S. Growth Fund; Lincoln World Growth Portfolio to World Growth
Fund; and Lincoln New Pacific Portfolio to New Pacific Fund; and the change of
the LAF to Delaware Group Adviser Funds, Inc. The liquidations were completed
on April 26, 1996 and following required shareholder approval of the
investment management and sub- advisory arrangements at a meeting of
shareholders held on May 3, 1996, the restructuring was consummated.

In accordance with the restructuring, beginning May 6, 1996, the
former Class D shares have been redesignated as the Institutional Class
shares.

On July 17, 1997, the Board of Directors approved the liquidations of
three additional funds. These liquidations were completed on September 19,
1997. Effective September 15, 1997, the name of World Growth Fund changed to
Overseas Equity Fund.

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(DAF-SAI/PART B)

In accordance with the restructuring, the front-end sales charges for
and 12b-1 Plan distribution fees assessable against Class A Shares and the
contingent deferred sales charge schedule for Class B Shares, as well as its
feature for conversion to Class A Shares, have been modified to be made
consistent with the charges, fees and features that generally apply to all
other Delaware Investments funds. The charges and fees previously applicable
to the Class C Shares have not been changed.

Beginning May 6, 1996, the charges, fees and features described in
the Prospectus have been applied to the respective shares, except for Class B
Shares purchased before that date. Class B Shares purchased prior to May 6,
1996 continue to be subject to the following contingent deferred sales charge
schedule if redemptions are made during the time periods described: within the
first year after purchase (5.0%); within the second year after purchase
(4.0%); within the third year after purchase (4.0%); within the fourth year
after purchase (3.0%); within the fifth year after purchase (2.0%); within the
sixth year after purchase (1.0%); and thereafter, none. In addition, Class B
Shares purchased prior to May 6, 1996 still will convert to Class A Shares
after the expiration of approximately six years after purchase. Class B Shares
purchased with reinvested dividends, whether effected before or after May 6,
1996, will be aggregated and converted pro-rata with other Class B Shares.

Capitalization
Adviser Funds, Inc. was incorporated under the laws of Maryland on
August 12, 1993 under the name Lincoln Renaissance Funds, Inc. On November 29,
1993, the name Lincoln Renaissance Funds, Inc. was changed to Lincoln Advisor
Funds, Inc. Adviser Funds, Inc. and all of its series (the Funds) shall
continue perpetually subject to the provisions in the Articles of
Incorporation concerning termination by action of the shareholders or by the
directors by written notice to the shareholders.

The authorized capital of Adviser Funds, Inc. consists of 810,000,000
shares of Common Stock, $.01 par value, issued in separate series. Each Fund,
for federal income tax purposes, will constitute a separate entity which will
be governed by the provisions of the Articles of Incorporation. All shares of
any Fund issued and outstanding will be fully paid and non-assessable by
Adviser Funds, Inc. The assets of Adviser Funds, Inc. received for the issue
or sale of the shares of each Fund and all income, earnings, profits and
proceeds thereof, subject only to the rights of creditors of such Fund, are
specially allocated to such Fund and constitute the underlying assets of such
Fund. The underlying assets of each Fund are segregated on the books of
account, and are to be charged with the liabilities in respect to such Fund
and with a share of the general liabilities incurred by each Fund of Adviser
Funds, Inc. General liabilities of the Fund include, without limitation,
director's fees, professional expenses and printing expenses. Under no
circumstances would the assets of a Fund be used to meet liabilities which are
not otherwise properly chargeable to it. Expenses with respect to any two or
more Funds are to be allocated in proportion to the net asset value of the
respective Fund except where allocations of direct expenses can otherwise be
fairly made. The officers of Adviser Funds, Inc., subject to the general
supervision of the Board of Directors, have the power to determine which
liabilities are allocable to a given Fund or which are general or allocable to
two or more Funds. Upon redemption of shares of a Fund, the shareholder will
receive proceeds solely of the assets of such Fund. In the event of the
dissolution or liquidation of Adviser Funds, Inc., the holders of the shares
of any Fund are entitled to receive as a class the underlying assets of such
Fund available for distribution to shareholders.

Pursuant to the Articles of Incorporation, the directors may
authorize the creation of additional series of shares (the proceeds of which
would be invested in separate, independently managed portfolios with distinct
investment objectives and policies and share purchase, redemption and net
asset valuation procedures) and additional classes of shares within any Fund
(which would be used to distinguish among the rights of different categories
of shareholders as might be required by future regulations or other unforeseen
circumstances) with such preferences, privileges, limitations and voting and
dividend rights as the directors may determine. All consideration

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(DAF-SAI/PART B)

received by Adviser Funds, Inc. for shares of any additional series or class,
and all assets in which such consideration is invested, would belong to that
series or class (subject only to the rights of creditors of such series or
class) and would be subject to the liabilities related thereto. Pursuant to
the 1940 Act, shareholders of any additional series or class of shares would
normally have to approve the adoption of any advisory contract relating to
such series or class and of any changes in the investment policies related
thereto.

Adviser Funds, Inc. does not intend to hold shareholders' meetings
unless otherwise required by law. Adviser Funds, Inc. will not be required to
hold meetings of shareholders unless the election of directors is required to
be acted on by shareholders under the 1940 Act. Shareholders have certain
rights, including the right to call a meeting upon a vote of 10% of a Fund's
outstanding shares for the purpose of voting on the removal of one or more
directors or to transact any other business.

Identifiable expenses to each Fund will be paid by that Fund. General
expenses of all Funds will be allocated on a pro-rata basis according to asset
size. Where matters must be submitted to a vote of shareholders, the holders
of a majority of shares of each Fund affected must vote affirmatively for that
class to be affected.

All shares have no preemptive rights, are fully transferable and,
when issued, are fully paid and nonassessable and, except as described above,
have equal voting rights. All shares of the Advisers Funds, Inc.
participate equally in dividends, and upon liquidation would share equally.

Each Class of each Fund represents a proportionate interest in the
assets of each Fund of Adviser Funds, Inc. and has the same voting and other
rights and preferences, except that shares of Institutional Classes may not
vote on matters affecting the Funds' Distribution Plans under Rule 12b-1.
Similarly, as a general matter, shareholders of Class A Shares, Class B Shares
and Class C Shares may vote only on matters affecting the 12b-1 Plan that
relates to the class of shares that they hold. However, shareholders of Class
B Shares must be given a vote on any material increase in the 12b-1 fees
payable by Class A Shares under the Plans for the Funds. General expenses of
each Fund will be allocated on a pro-rata basis to the Classes according to
asset size, except that expenses of the 12b-1 Plans of Class A Shares, Class B
Shares and Class C Shares will be allocated solely to those classes.

As of the close of business on May 3, 1996, the changes of the names
of the Funds were as follows: Lincoln U.S. Growth Portfolio to U.S. Growth
Fund; Lincoln World Growth Portfolio to World Growth Fund; and Lincoln New
Pacific Portfolio to New Pacific Fund. In addition, as of the close of
business May 3, 1996, the name of Lincoln Advisor Funds, Inc. was changed to
Delaware Group Adviser Funds, Inc.

Noncumulative Voting
Adviser Funds, Inc.'s shares have noncumulative voting rights which
means that the holders of more than 50% of the shares of Adviser Funds, Inc.
voting for the election of directors can elect all the directors if they
choose to do so, and, in such event, the holders of the remaining shares will
not be able to elect any directors.

This Part B does not include all of the information contained in the
Registration Statement which is on file with the SEC.

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(DAF-SAI/PART B)

APPENDIX A - DESCRIPTION OF SECURITIES RATINGS

U.S. Growth Fund has the ability to invest up to 10% of its net
assets in high yield, high risk fixed-income securities. However, the Fund had
no such investments as of its fiscal year ended October 31, 1997. The
following paragraphs contain excerpts from Moody's and S&P's rating
descriptions. These credit ratings evaluate only the safety of principal and
interest and do not consider the market value risk associated with high yield
securities.

General Rating Information

MOODY'S INVESTORS SERVICE

BOND RATINGS
Aaa: Bonds which are rated Aaa are judged to be of the best quality.
They carry the smallest degree of investment risk and are generally referred
to as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.

Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than Aaa bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
which make the long-term risks appear somewhat larger than in Aaa securities.

A: Bonds which are rated A possess many favorable investment
attributes and are considered as upper medium grade obligations. Factors
giving security to principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment sometime in the
future.

Baa: Bonds that are rated Baa are considered medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.

Ba: Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

B: Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

Caa: Bonds which are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect to
principal or interest.

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(DAF-SAI/PART B)

Ca: Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have other
marked shortcomings.

C: Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.

SHORT-TERM DEBT RATINGS
Moody's short-term debt ratings are opinions of the ability of
issuers to repay punctually senior obligations which have an original maturity
not exceeding one year.

P-1: Issuers rated "PRIME-1" or "P-1" (or supporting institutions)
have superior ability for repayment of senior short-term debt obligations.

P-2: Issuers rated "PRIME-2" or "P-2" (or supporting institutions)
have a strong ability for repayment of senior short-term debt obligations.

P-3: Issuers rated "PRIME-3" or "P-3" (or supporting institutions)
have an acceptable ability for repayment of senior short-term debt
obligations.

MUNICIPAL NOTE RATINGS
Issuers or the features associated with Moody's MIG or VMIG ratings
are identified by date of issue, date of maturity or maturities or rating
expiration date and description to distinguish each rating from other ratings.
Each rating designation is unique with no implication as to any other similar
issue of the same obligor. MIG ratings terminate at the retirement of the
obligation while VMIG rating expiration will be a function of each issue's
specific structural or credit features.

MIG 1/VMIG 1: This designation denotes best quality. There is
present strong protection by established cash
flows, superior liquidity support, or demonstrated
broad-based access to the market for refinancing.

MIG 2/VMIG 2: This designation denotes high quality. Margins of
protection are ample although not so large as in
the preceding group.

MIG 3/VMIG 3: This designation denotes favorable quality. All
security elements are accounted for but there is
lacking the undeniable strength of the preceding
grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely
to be less well established.

MIG 4/VMIG 4: This designation denotes adequate quality.
Protection commonly regarded as required of an
investment security is present and although not
distinctly or predominantly speculative, there is
specific risk.

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(DAF-SAI/PART B)

STANDARD & POOR'S RATINGS GROUP

BOND RATINGS
AAA: Debt rated AAA has the highest rating assigned by S&P to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.

AA: Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the highest rated issues only in a small
degree.

A: Debt rated A has a strong capacity to pay interest and repay
principal although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than debt in higher rated
categories.

BBB: Debt rated BBB is regarded as having an adequate capacity to pay
interest an repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

BB, B, CCC and CC: Debt rated BB, B, CCC or CC is regarded, on
balance, as predominately speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB
indicates the lowest degree of speculation and CC the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.

C: This rating is reserved for income bonds on which no interest is
being paid.

D: Debt rated D is in default, and payment of interest and/or
repayment of principal is in arrears.

COMMERCIAL PAPER RATINGS
S&P's commercial paper ratings are current assessments of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days.

A-1: The A-1 designation indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. A plus (+)
designation is applied only to those issues rated A-1 which possess an
overwhelming degree of safety.

A-2: Capacity for timely payment on issues with the designation A-2
is strong. However, the relative degree of safely is not as high as for issues
designated A-1.

A-3: Issues carrying this designation have a satisfactory capacity
for timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.

MUNICIPAL NOTE RATINGS
An S&P municipal note rating reflects the liquidity concerns and
market access risks unique to notes. Notes due in 3 years or less will likely
receive a note rating. Notes maturing beyond 3 years will most likely receive
a long-term debt rating. The following criteria will be used in making that
assessment:

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(DAF-SAI/PART B)

Amortization schedule (the larger the final maturity relative to
other maturities, the more likely it will be treated as a note).

Sources of payment (the more dependent the issue is on the market for
its refinancing, the more likely it will be treated as a note).

SP-1: Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.

SP-2: Satisfactory capacity to pay principal and interest.

SP-3: Speculative capacity to pay principal and interest.

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(DAF-SAI/PART B)

FINANCIAL STATEMENTS

Adviser Funds, Inc.'s Board of Directors selected Ernst & Young LLP
to serve as the Funds' independent auditors for the fiscal year ended October
31, 1997 at the Board of Directors' meeting on November 21, 1996. Coopers &
Lybrand LLP previously served as the independent auditors for the Funds and,
in its capacity as such, audited the annual financial statements of the Funds.
The Funds' Statements of Net Assets, Statements of Assets and Liabilities,
Statements of Operations, Statements of Changes in Net Assets, Financial
Highlights and Notes to Financial Statements, as well as the report of Ernst &
Young LLP, independent auditors, for the fiscal year ended October 31, 1997
are included in the Funds' Annual Report to shareholders. The financial
statements and financial highlights, the notes relating thereto and the report
of Ernst & Young LLP listed above are incorporated by reference from the
Annual Report into this Part B. The Statements of Changes in Net Assets for
the year ended October 31, 1996 and Financial Highlights for the periods ended
October 31, 1994 through October 31, 1996 were audited by Coopers & Lybrand
LLP whose report, dated December 20, 1996, expressed an unqualified opinion on
those statements and financial highlights.

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<PAGE>

(DAF-SAI/PART B)

Delaware Investments offers funds with a wide range of investment
objectives. Stock funds, income funds, national and state-specific tax-exempt
funds, money market funds, global and international funds and closed-end funds
give investors the ability to create a portfolio that fits their personal
financial goals. For more information, shareholders of the Fund Classes should
contact their financial adviser or call Delaware Investments at 800-523-4640
and shareholders of the Institutional Classes should contact Delaware
Investments at 800-828-5052.

INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103

INVESTMENT SUB-ADVISERS
Lynch & Mayer, Inc.
520 Madison Avenue
New York, NY 10022

Delaware International Advisers Ltd.

Third Floor, 80 Cheapside
London, England EC 2V 6EE

AIB Govett, Inc.
250 Montgomery Street, Suite 1200
San Francisco, CA 94104

NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103

SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103

INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103

CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245
- -------------------------------------------------------

DELAWARE GROUP ADVISER FUNDS, INC.

- -------------------------------------------------------

A CLASSES
B CLASSES
C CLASSES
- -------------------------------------------------------

INSTITUTIONAL CLASSES
- -------------------------------------------------------

PART B

STATEMENT OF
ADDITIONAL INFORMATION

- -------------------------------------------------------

FEBRUARY 28, 1998

[GRAPHIC OMITTED]

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<PAGE>

PART C

Other Information

Item 24. Financial Statements and Exhibits

(a) Financial Statements:

Part A - Financial Highlights

*Part B - Statements of Net Assets
Statements of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
Financial Highlights
Report of Independent Accounts

* The financial statements and Accountant's Report
listed above relating to U.S. Growth Fund, Overseas
Fund and New Pacific Fund are incorporated by
reference into Part B from the Registrant's Annual
Report for the fiscal year ended October 31, 1997.

(b) Exhibits:

(1) Articles of Incorporation. Articles of
Incorporation, as amended and supplemented to
date incorporated into this filing by reference
to Post-Effective Amendment No. 7 filed February
28, 1997.

(a) Executed Articles Supplementary (December
18, 1997) incorporated into this filing
by reference to Post-Effective Amendment
No. 8 filed December 23, 1997.

(2) By-Laws. By-Laws, as amended to date,
incorporated into this filing by reference to
Post-Effective Amendment No. 7 filed February
28, 1997.

(3) Voting Trust Agreement. Inapplicable.

(4) Copies of all Instruments Defining the Rights of
Holders.

(a) Articles of Incorporation. Article IV of
Articles of Incorporation (August 12,
1993) incorporated into this filing by
reference to Post-Effective Amendment No.
7 filed February 28, 1997.

<PAGE>

PART C - Other Information
(Continued)

(i) Executed Articles Supplementary
(December 18, 1997) incorporated
into this filing by reference to
Post-Effective Amendment No. 8
filed December 23, 1997.

(b) By-Laws. Article I and Article IV
incorporated into this filing by
reference to Post-Effective Amendment No.
7 filed February 28, 1997.

(5) Investment Management and Sub-Advisory Agreements.

(a) Executed Investment Management Agreement between
Delaware Management Company, Inc. and the
Registrant on behalf of U.S. Growth Fund (May 6,
1996) incorporated into this filing by reference
to Post-Effective Amendment No. 7 filed February
28, 1997.

(b) Amended and Restated Investment Management
Agreement between Delaware Management Company,
Inc. and the Registrant on behalf of Overseas
Equity Fund (December 1997) incorporated into
this filing by reference to Post-Effective
Amendment No. 8 filed December 23, 1997.

(c) Executed Investment Management Agreement between
Delaware Management Company, Inc. and the
Registrant on behalf of New Pacific Fund (May 6,
1996) incorporated into this filing by reference
to Post-Effective Amendment No. 7 filed February
28, 1997.

(d) Executed Sub-Advisory Agreement between Delaware
Management Company, Inc. and Lynch & Mayer, Inc.
on behalf of U.S. Growth Fund (May 6, 1996)
incorporated into this filing by reference to
Post-Effective Amendment No. 7 filed February
28, 1997.

(e) Form of Sub-Advisory Agreement between Delaware
Management Company, Inc. and Delaware
International Advisors Ltd. on behalf of
Overseas Equity Fund (1997) incorporated into
this filing by reference to Post-Effective
Amendment No. 8 filed December 23, 1997.

(f) Form of Sub-Advisory Agreement between Delaware
Management Company, Inc. and AIB Govett, Inc. on
behalf of New Pacific Fund (1997) attached as
Exhibit.

(6) (a) Distribution Agreements. Executed
Distribution Agreements between Delaware
Distributors, L.P. and the Registrant on behalf
of each Class (September 25, 1995) incorporated
into this filing by reference to Post-Effective
Amendment No. 4 filed February 28, 1996.

<PAGE>

PART C - Other Information
(Continued)

(b) Administration and Service Agreement.
Administration and Service Agreement (as amended
November 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 5
filed March 12, 1996.

(c) Dealer's Agreement. Dealer's Agreement (as
amended November 1995) incorporated into this
filing by reference to Post-Effective Amendment
No. 5 filed March 12, 1996.

(d) Mutual Fund Agreement for the Delaware Group of
Funds (as amended November 1995) incorporated
into this filing by reference to Post-Effective
Amendment No. 5 filed March 12, 1996.

(7) Bonus, Profit Sharing, Pension Contracts.

(a) Amended and Restated Profit Sharing Plan
(November 17, 1994) incorporated into this
filing by reference to Post-Effective Amendment
No. 5 filed March 12, 1996.

(b) Amendment to Profit Sharing Plan (December 21,
1995) incorporated into this filing by reference
to Post-Effective Amendment No. 5 filed March
12, 1996.

(8) Custodian Agreements.

(a) Form of Custodian Agreement (May 1996) between
The Chase Manhattan Bank and the Registrant
incorporated into this filing by reference to
Post-Effective Amendment No. 7 filed February
28, 1997.

(i) Form of Amendment (November 1997) to
Custodian Agreement between The Chase
Manhattan Bank and the Registrant
incorporated into this filing by reference
to Post-Effective Amendment No. 8 filed
December 23,1997.

(b) Form of Securities Lending Agreement (May 1996)
between The Chase Manhattan Bank and the
Registrant incorporated into this filing by
reference to Post-Effective Amendment No. 7
filed February 28, 1997.

(9) Other Material Contracts.

(a) Shareholders Services Agreement (September 25,
1995) between Delaware Service Company, Inc. and
the Registrant incorporated into this filing by
reference Post-Effective Amendment No. 4 filed
February 28, 1996.

(b) Executed Fund Accounting Agreement (August 19,
1996) between Delaware Service Company, Inc. and
the Registrant incorporated into this filing by
reference to Post-Effective Amendment No. 7
filed February 28, 1997.

<PAGE>

PART C - Other Information
(Continued)

(i) Executed Amendment No. 7 (October 14,
1997) to Schedule A to Delaware Group of
Funds Fund Accounting Agreement attached
as Exhibit.

(ii) Executed Amendment No. 8 (December 18,
1997) to Schedule A to Delaware Group of
Funds Fund Accounting Agreement attached
as Exhibit.

(10) Opinion and Consent of Counsel. Inapplicable.

(11) Consent of Auditors. Attached as Exhibit.

(12) Inapplicable.

(13) Inapplicable.

(14) Model Plans. To be filed by Post-Effective Amendment.

(15) Plans under Rule 12b-1.

(a) Plan under Rule 12b-1 for U.S. Growth Fund A Class
(September 25, 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 4 filed
February 28, 1996.

(b) Plan under Rule 12b-1 for U.S. Growth Fund B
Class (September 25,1995) incorporated into this
filing by reference to Post-Effective Amendment
No. 4 filed February 28, 1996.

(c) Plan under Rule 12b-1 for U.S. Growth Fund C
Class (September 25,1995) incorporated into this
filing by reference to Post-Effective Amendment
No. 4 filed February 28, 1996.

(d) Plan under Rule 12b-1 for Overseas Equity Fund A
Class (September 25,1995) incorporated into this
filing by reference to Post-Effective Amendment
No. 4 filed February 28, 1996.

(e) Plan under Rule 12b-1 for Overseas Equity Fund B
Class (September 25,1995) incorporated into this
filing by reference to Post-Effective Amendment
No. 4 filed February 28, 1996.

(f) Plan under Rule 12b-1 for Overseas Equity Fund C
Class (September 25,1995) incorporated into this
filing by reference to Post-Effective Amendment
No. 4 filed February 28, 1996.

<PAGE>

PART C - Other Information
(Continued)

(g) Plan under Rule 12b-1 for New Pacific Fund A
Class (September 25,1995) incorporated into this
filing by reference to Post-Effective Amendment
No. 4 filed February 28, 1996.

(h) Plan under Rule 12b-1 for New Pacific Fund B
Class (September 25,1995) incorporated into this
filing by reference to Post-Effective Amendment
No. 4 filed February 28, 1996.

(i) Plan under Rule 12b-1 for New Pacific Fund B
Class (September 25,1995) incorporated into this
filing by reference to Post-Effective Amendment
No. 4 filed February 28, 1996.

(16) Schedules of Computation for each Performance Quotation.

(a) Incorporated into this filing by reference to
Post-Effective Amendment No. 7 filed February
28, 1997.

(b) Schedules of Computation for each Performance
Quotation for periods not previously filed
attached as Exhibit.

(17) Financial Data Schedules. Attached as Exhibit.

(18) Inapplicable

(19) Other: Directors' Power of Attorney. Attached as
Exhibit.

Item 25. Persons Controlled by or under Common Control with Registrant.
None.

<PAGE>

PART C - Other Information
(Continued)

Item 26. Number of Holders of Securities.

(1) (2)

Number of
Title of Class Record Holders

Delaware Group Adviser Funds, Inc.'s
U.S. Growth Fund:

U.S. Growth Fund A Class
Common Stock Par Value 998 Accounts as of
$0.01 Per Share January 31, 1998

U.S. Growth Fund B Class
Common Stock Par Value 454 Accounts as of
$0.01 Per Share January 31, 1998

U.S. Growth Fund C Class
Common Stock Par Value 100 Accounts as of
$0.01 Per Share January 31, 1998

U.S. Growth Fund Institutional Class
Common Stock Par Value 10 Accounts as of
$0.01 Per Share January 31, 1998

Delaware Group Adviser Funds, Inc.'s
Overseas Equity Fund:

Overseas Equity Fund A Class
Common Stock Par Value 807 Accounts as of
$0.01 Per Share January 31, 1998

Overseas Equity Fund B Class
Common Stock Par Value 252 Accounts as of
$0.01 Per Share January 31, 1998

Overseas Equity Fund C Class
Common Stock Par Value 46 Accounts as of
$0.01 Per Share January 31, 1998

<PAGE>

PART C - Other Information
(Continued)

(1) (2)

Number of
Title of Class Record Holders

Overseas Equity Fund Institutional Class
Common Stock Par Value 8 Accounts as of
$0.01 Per Share January 31, 1998

Delaware Group Adviser Funds, Inc.'s
New Pacific Fund:

New Pacific Fund A Class
Common Stock Par Value 964 Accounts as of
$0.01 Per Share January 31, 1998

New Pacific Fund B Class
Common Stock Par Value 392 Accounts as of
$0.01 Per Share January 31, 1998

New Pacific Fund C Class
Common Stock Par Value 61 Accounts as of
$0.01 Per Share January 31, 1998

New Pacific Fund Institutional Class
Common Stock par Value 10 Accounts as of
$0.01 Per Share January 31, 1998

Item 27. Indemnification. Incorporated into this filing by reference to
Post-Effective Amendment No. 6 filed May 2, 1996.

<PAGE>

PART C - Other Information
(Continued)

Item 28. (a) Business and Other Connections of Investment Adviser.

Delaware Management Company, Inc. (the "Manager") serves as
investment manager to the Registrant and also serves as investment manager or
sub-adviser to certain of the other funds in the Delaware Group (Delaware
Group Equity Funds I, Inc., Delaware Group Equity Funds II, Inc., Delaware
Group Equity Funds III, Inc., Delaware Group Equity Funds IV, Inc., Delaware
Group Equity Funds V, Inc., Delaware Group Government Fund, Inc., Delaware
Group Income Funds, Inc., Delaware Group Limited-Term Government Funds, Inc.,
Delaware Group Cash Reserve, Inc., Delaware Group Tax-Free Fund, Inc.,
Delaware Group State Tax-Free Income Trust, Delaware Group Tax-Free Money
Fund, Inc., Delaware Group Premium Fund, Inc., Delaware Group Global &
International Funds, Inc., Delaware Pooled Trust, Inc., Delaware Group
Dividend and Income Fund, Inc., Delaware Group Global Dividend and Income
Fund, Inc., Delaware Group Foundation Funds, Inc., Voyageur Tax-Free Funds,
Inc., Voyageur Intermediate Tax-Free Funds, Inc., Voyageur Insured Funds,
Inc., Voyageur Funds, Inc., Voyageur Investment Trust, Voyageur Investment
Trust II, Voyageur Mutual Funds, Inc., Voyageur Mutual Funds II, Inc.,
Voyageur Mutual Funds III, Inc., Voyageur Arizona Municipal Income Fund, Inc.,
Voyageur Colorado Insured Municipal Income Fund, Inc., Voyageur Florida
Insured Municipal Income Fund, Voyageur Minnesota Municipal Fund, Inc.,
Voyageur Minnesota Municipal Fund II, Inc. and Voyageur Minnesota Municipal
Fund III, Inc.) and provides investment advisory services to institutional
accounts, primarily retirement plans and endowment funds. In addition, certain
directors of the Manager also serve as directors/trustees of the other
Delaware Group funds, and certain officers are also officers of these other
funds. A company owned by the Manager's parent company acts as principal
underwriter to the mutual funds in the Delaware Group (see Item 29 below) and
another such company acts as the shareholder services, dividend disbursing,
accounting servicing and transfer agent for all of the mutual funds in the
Delaware Group.

The following persons serving as directors or officers of the
Manager have held the following positions during the past two years:
<TABLE>
<CAPTION>

Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Wayne A. Stork Chairman of the Board, President, Chief Executive Officer, Chief Investment
Officer and Director of Delaware Management Company, Inc.; Chairman of the
Board, President, Chief Executive Officer and Director of DMH Corp., Delaware
Distributors, Inc. and Founders Holdings, Inc.; Chairman, Chief Executive Officer
and Director of Delaware International Holdings Ltd. and Delaware International
Advisers Ltd.; Chairman of the Board and Director of the Registrant, each of the
other funds in the Delaware Group, Delaware Management Holdings, Inc. and
Delaware Capital Management, Inc.; Chairman of Delaware Distributors, L.P.;
President and Chief Executive Officer of Delvoy, Inc.; and Director of Delaware
Service Company, Inc. and Delaware Investment & Retirement Services, Inc.
</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>

Richard G. Unruh, Jr. Executive Vice President and Director of Delaware Management
Company, Inc.; Executive Vice President of the Registrant, each of
the other funds in the Delaware Group, Delaware Management
Holdings, Inc. and Delaware Capital Management, Inc; and Director
of Delaware International Advisers Ltd.

Board of Directors, Chairman of Finance Committee, Keystone
Insurance Company since 1989, 2040 Market Street, Philadelphia,
PA; Board of Directors, Chairman of Finance Committee, AAA Mid
Atlantic, Inc. since 1989, 2040 Market Street, Philadelphia, PA;
Board of Directors, Metron, Inc. since 1995, 11911 Freedom Drive,
Reston, VA

Paul E. Suckow Executive Vice President/Chief Investment Officer, Fixed Income of
Delaware Management Company, Inc., the Registrant, each of the
other funds in the Delaware Group and Delaware Management
Holdings, Inc.; Executive Vice President and Director of Founders
Holdings, Inc.; Executive Vice President of Delaware Capital
Management, Inc.; and Director of Founders CBO Corporation

Director, HYPPCO Finance Company Ltd.

David K. Downes Executive Vice President, Chief Operating Officer, Chief Financial Officer and
Director of Delaware Management Company, Inc., DMH Corp, Delaware
Distributors, Inc., Founders Holdings, Inc. and Delvoy, Inc.; Executive Vice
President, Chief Operating Officer and Chief Financial Officer of the Registrant and
each of the other funds in the Delaware Group, Delaware Management Holdings,
Inc., Founders CBO Corporation, Delaware Capital Management, Inc. and
Delaware Distributors, L.P.; President, Chief Executive Officer, Chief Financial
Officer and Director of Delaware Service Company, Inc.; President, Chief
Operating Officer, Chief Financial Officer and Director of Delaware International
Holdings Ltd.; Chairman, Chief Executive Officer and Director of Delaware
Investment & Retirement Services, Inc.; Chairman and Director of Delaware
Management Trust Company; Director of Delaware International Advisers Ltd.;
and Vice President of Lincoln Funds Corporation

Chef Executive Officer and Director of Forewarn, Inc. since 1993, 8 Clayton
Place, Newtown Square, PA

</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

George M. Senior Vice President, General Counsel, Secretary and Director of
Chamberlain, Jr. Delaware Management Company, Inc., DMH Corp., Delaware
Distributors, Inc., Delaware Service Company, Inc., Founders
Holdings, Inc., Delaware Capital Management, Inc., Delaware
Investment & Retirement Services, Inc. and Delvoy, Inc.; Senior
Vice President, Secretary and General Counsel of the Registrant,
each of the other funds in the Delaware Group, Delaware
Distributors, L.P. and Delaware Management Holdings, Inc.; Senior
Vice President and Director of Delaware International Holdings
Ltd.; Executive Vice President, Secretary, General Counsel and
Director of Delaware Management Trust Company; Director of
Delaware International Advisers Ltd.; Secretary of Lincoln Funds
Corporation

Richard J. Flannery Senior Vice President/Corporate and International Affairs of the Registrant, each
of the other funds in the Delaware Group, Delaware Management Holdings, Inc.,
DMH Corp., Delaware Management Company, Inc., Delaware Distributors, Inc.,
Delaware Distributors, L.P., Delaware Management Trust Company, Delaware
Capital Management, Inc., Delaware Service Company, Inc. and Delaware
Investment & Retirement Services, Inc.; Executive Vice President/Corporate and
International Affairs and Director of Delaware International Holdings Ltd.; Senior
Vice President/Corporate and International Affairs and Director of Founders
Holdings, Inc. and Delvoy, Inc.; Senior Vice President of Founders CBO
Corporation; and Director of Delaware International Advisers Ltd.

Director, HYPPCO Finance Company Ltd.

Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd., Elverton, PA;
Director and Member of Executive Committee of Stonewall Links, Inc. since 1991,
Bulltown Rd., Elverton, PA

Michael P. Bishof Senior Vice President and Treasurer of the Registrant, each of the other funds in
the Delaware Group and Founders Holdings, Inc.; Senior Vice
President/Investment Accounting of Delaware Management Company, Inc. and
Delaware Service Company, Inc.; Senior Vice President and Treasurer/Manager,
Investment Accounting of Delaware Distributors, L.P.; Assistant Treasurer of
Founders CBO Corporation; and Senior Vice President and Manager of
Investment Accounting of Delaware International Holdings Ltd.

</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

Joseph H. Hastings Senior Vice President/Corporate Controller and Treasurer of Delaware
Management Holdings, Inc., DMH Corp., Delaware Management Company, Inc.,
Delaware Distributors, Inc., Delaware Capital Management, Inc., Delaware
Distributors, L.P., Delaware Service Company, Inc., Delaware International
Holdings Ltd. and Delvoy, Inc.; Senior Vice President/Corporate Controller of the
Registrant, each of the other funds in the Delaware Group and Founders Holdings,
Inc.; Executive Vice President, Chief Financial Officer and Treasurer of Delaware
Management Trust Company; Chief Financial Officer and Treasurer of Delaware
Investment & Retirement Services, Inc.; Senior Vice President/Assistant Treasurer
of Founders CBO Corporation; and Treasurer of Lincoln Funds Corporation.

Michael T. Taggart Senior Vice President/Facilities Management and Administrative Services of
Delaware Management Company, Inc.

Douglas L. Anderson Senior Vice President/Operations of Delaware Management Company,
Inc., Delaware Investment and Retirement Services, Inc. and
Delaware Service Company, Inc.; Senior Vice President/Operations
and Director of Delaware Management Trust Company

James L. Shields Senior Vice President/Chief Information Officer of Delaware Management
Company, Inc., Delaware Service Company, Inc. and Delaware Investment &
Retirement Services, Inc.

Eric E. Miller Vice President, Assistant Secretary and Deputy General Counsel of the Registrant
and each of the other funds in the Delaware Group, Delaware Management
Company, Inc., Delaware Management Holdings, Inc., DMH Corp., Delaware
Distributors, L.P., Delaware Distributors Inc., Delaware Service Company, Inc.,
Delaware Management Trust Company, Founders Holdings, Inc., Delaware
Capital Management, Inc. and Delaware Investment & Retirement Services, Inc.;
and Vice President and Assistant Secretary of Delvoy, Inc.
</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

Richelle S. Maestro Vice President and Assistant Secretary of Delaware Management Company, Inc.,
the Registrant, each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc., Delaware Distributors, L.P., Delaware Distributors,
Inc., Delaware Service Company, Inc., DMH Corp., Delaware Management Trust
Company, Delaware Capital Management, Inc., Delaware Investment &
Retirement Services, Inc., Founders Holdings, Inc. and Delvoy, Inc.; Vice
President and Secretary of Delaware International Holdings Ltd.; and Secretary of
Founders CBO Corporation;

Partner of Tri-R Associates since 1989, 10001 Sandmeyer Lane, Philadelphia, PA

Richard Salus1 Vice President/Assistant Controller of Delaware Management Company, Inc. and
Delaware Management Trust Company

Bruce A. Ulmer Vice President/Director of LNC Internal Audit of Delaware
Management Company, Inc., the Registrant, each of the other funds
in the Delaware Group, Delaware Management Holdings, Inc., DMH
Corp., Delaware Management Trust Company and Delaware Investment &
Retirement Services, Inc.; Vice President/Director of Internal
Audit of Delvoy, Inc.

Christopher Adams Vice President/Strategic Planning of Delaware Management Company, Inc. and
Delaware Service Company, Inc.

Susan L. Hanson Vice President/Strategic Planning of Delaware Management Company, Inc. and
Delaware Service Company, Inc.

Dennis J. Mara2 Vice President/Acquisitions of Delaware Management Company, Inc.

Scott Metzger Vice President/Business Development of Delaware Management Company, Inc.
and Delaware Service Company, Inc.

Lisa O. Brinkley Vice President/Compliance of Delaware Management Company, Inc.,
the Registrant, each of the other funds in the Delaware Group, DMH
Corp., Delaware Distributors, L.P., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Delaware Management Trust Company,
Delaware Capital Management, Inc. and Delaware Investment &
Retirement Services, Inc.; Vice President of Delvoy, Inc.
</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

PART C - Other Information
(Continued)

<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>

Rosemary E. Milner Vice President/Legal Registrations of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware
Group, Delaware Distributors, L.P. and Delaware Distributors, Inc.

Mary Ellen Carrozza Vice President/Client Services of Delaware Management Company, Inc. and the
Registrant

Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc. and each of the tax-exempt funds, the fixed income
funds and the closed-end funds in the Delaware Group (excluding
the Registrant); Vice President of Founders Holdings, Inc.; and
Treasurer, Assistant Secretary and Director of Founders CBO
Corporation

Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., each of the tax-exempt funds, the fixed income
funds and the closed-end funds in the Delaware Group (excluding
the Registrant); Vice President of Founders Holdings, Inc.; and
President and Director of Founders CBO Corporation.

Gary A. Reed Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., each of the tax-exempt funds and the fixed income
funds in the Delaware Group (excluding the Registrant) and
Delaware Capital Management, Inc.

Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., the Registrant, each of the tax-exempt funds and
the fixed income funds in the Delaware Group and Delaware Capital
Management, Inc.

Roger A. Early Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., each of the tax-exempt funds and the fixed income
funds in the Delaware Group (excluding the Registrant)

Mitchell L. Conery3 Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., and each of the tax-exempt and fixed income funds
in the Delaware Group (excluding the Registrant)

George H. Burwell Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.
and each of the equity funds in the Delaware Group (excluding the Registrant)
</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

John B. Fields Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc., each of the equity funds in the Delaware Group
(excluding the Registrant) and Delaware Capital Management, Inc.

Gerald S. Frey4 Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.
and each of the equity funds in the Delaware Group (excluding the Registrant)

Christopher Beck5 Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.
and each of the equity funds in the Delaware Group (excluding the Registrant)

Elizabeth H. Howell6 Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc. and the Delaware-Voyageur Tax-Free Minnesota
Intermediate, Delaware- Voyageur Minnesota Insured,
Delaware-Voyageur Tax-Free Minnesota, Delaware-Voyageur Tax-Free
Idaho, Delaware-Voyageur Tax-Free Kansas, Delaware-Voyageur
Tax-Free Missouri, Delaware-Voyageur Tax-Free Oregon,
Delaware-Voyageur Tax-Free Washington, Delaware-Voyageur Tax-Free
Iowa and Delaware-Voyageur Tax-Free Wisconsin Funds

Andrew M. McCullagh7 Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.
and the Delaware-Voyageur Tax-Free Arizona Insured, Delaware-Voyageur Tax-
Free Arizona, Delaware-Voyageur Tax-Free California Insured, Delaware-
Voyageur Tax-Free Colorado, Delaware-Voyageur Tax-Free New Mexico,
Delaware-Voyageur Tax-Free North Dakota and Delaware-Voyageur Tax-Free
Utah Funds

Babak Zenouzi Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.
and each of the equity funds and the closed-end funds in the Delaware Group
(exclunding the Registrant)

Paul Grillo Vice President/Portfolio Manager of Delaware Management Company, Inc. and
each of the tax-exempt and fixed income funds in the Delaware Group

Marshall T. Bassett Vice President/Portfolio Manager of Delaware Management Company, Inc. and
each of the equity funds in the Delaware Group (excluding the Registrant)

John Heffern Vice President/Portfolio Manager of Delaware Management Company, Inc. and
each of the equity funds in the Delaware Group (excluding the Registrant)
</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

PART C - Other Information
(Continued)

1 SENIOR MANAGER, Ernst & Young LLP prior to December 1996.
2 CORPORATE CONTROLLER, IIS prior to July 1997 and DIRECTOR, FINANCIAL
PLANNING, Decision One prior to March 1996.
3 INVESTMENT OFFICER, Travelers Insurance prior to January 1997.
4 SENIOR DIRECTOR, Morgan Grenfell Capital Management prior to June 1996.
5 SENIOR PORTFOLIO MANAGER, Pitcairn Trust Company prior to May 1997.
6 SENIOR PORTFOLIO MANAGER, Voyageur Fund Managers, Inc. prior to May 1997.
7 SENIOR VICE PRESIDENT, SENIOR PORTFOLIO MANAGER, Voyageur Asset
Management LLC prior to May 1997.

Item 28. (b) Business and Other Connections of Sub-Investment
Advisers

Lynch & Mayer, Inc. serves as sub-investment adviser to U.S.
Growth Fund. The directors and officers of Lynch & Mayer, Inc. are listed below.
Unless otherwise indicated, the address of each person is 520 Madison Avenue,
New York, New York 10022.
<TABLE>
<CAPTION>
Name Positions and Offices with Lynch & Mayer, Inc.
- ---- ----------------------------------------------
<S> <C>

Dennis P. Lynch Chairman and Co-Chief Executive Officer and Director

Eldon C. Mayer, Jr. Vice Chairman and Director

Edward J. Petner President and Co-Chief Executive Officer and Director

Dennis A. Blume Director

*H. Thomas McMeekin Director

*Laurence E. Ach Senior Vice President

Robert R. Coby Senior Vice President

Dallas L. Corser Senior Vice President

Kevin P. Ferguson Senior Vice President

Francis J. Houghton, Jr. Senior Vice President

Howard M. Kaufman Senior Vice President, Treasurer and Secretary
</TABLE>

* Business address is 200 East Berry Street, Fort Wayne, IN 46802.

<PAGE>

PART C - Other Information
(Continued)

<TABLE>
<CAPTION>
Name Positions and Offices with Lynch & Mayer, Inc.
- ---- ----------------------------------------------
<S> <C>

William A. Kissell Senior Vice President

John C. Levinson Senior Vice President

Bradley A. Roberts Senior Vice President

Michael F. Sassi Senior Vice President

Anthony A. Segalas Senior Vice President

W. Denman Zirkle Senior Vice President

Paul R. Ainslie Vice President

Philip C. Coburn Vice President

Billie Cook Vice President

Katherine D. Elliott Vice President

Aiman N. Labib Vice President

Enrique Lopez-Balboa Vice President

Thomas E. McGowan Vice President

Ron M. Panzier Vice President

Kevin W. Putt Vice President

Charles Rose Vice President

Robert D. Schwartz Vice President

Rufus R. Winton Vice President

Armi D. Viti Vice President

</TABLE>

* Business address is 200 East Berry Street, Fort Wayne, IN 46802.

<PAGE>

PART C - Other Information
(Continued)

<TABLE>
<CAPTION>
Name Positions and Offices with Lynch & Mayer, Inc.
- ---- ----------------------------------------------
<S> <C>

Brian S. Becher Assistant Secretary

James N. Westafer Assistant Secretary
</TABLE>

Delaware International Advisers Ltd. ("Delaware
International") serves as sub-investment adviser to Overseas Equity Fund of the
Registrant and also serves as investment manager or sub-investment adviser to
certain of the other funds in the Delaware Group (Delaware Group Global Dividend
and Income Fund, Inc., Delaware Group Global & International Funds, Inc.,
Delaware Pooled Trust, Inc. and Delaware Group Premium Fund, Inc.) and other
institutional accounts.

<PAGE>

PART C - Other Information
(Continued)

Information regarding the officers and directors of Delaware
International and the positions they have held with the Registrant during the
past two fiscal years is provided below.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ---------------- -------------------------------------------------------
<S> <C>
*Wayne A. Stork Chairman, Chief Executive Officer and Director of Delaware Management
Holdings, Inc., Delaware International Holdings Ltd. and Delaware International
Advisers Ltd.; Chairman of the Board, President, Chief Executive Officer, Chief
Investment Officer and Director of Delaware Management Company, Inc.;
Chairman of the Board, President, Chief Executive Officer and Director of DMH
Corp., Delaware Distributors, Inc. and Founders Holdings, Inc.; Chairman of the
Board and Director of the Registrant, each of the other funds in the Delaware
Group and Delaware Capital Management, Inc.; President and Chief Executive
Officer of Delvoy, Inc.; Chairman of Delaware Distributors, L.P.; and Director
of Delaware Service Company, Inc. and Delaware Investment & Retirement
Services, Inc.

**G. Roger H. Kitson Vice Chairman and Director of Delaware International Advisers Ltd.

**Ian G. Sims Deputy Managing Director/Chief Investment Officer/Global Fixed Income and
Director of Delaware International Advisers Ltd.

**David G. Tilles Managing Director, Chief Investment Officer and Director of Delaware
International Advisers Ltd. and Chief Investment Officer and Director of
Delaware International Holdings, Ltd.

**John Emberson Secretary, Compliance Officer, Finance Director and Director of Delaware
International Advisers Ltd.

**Nigel G. May Director/Head of Pacific Basin Group and Director of Delaware International
Advisers Ltd.

**Elizabeth A. Desmond Director/Head of European Group and Director of Delaware International
Advisers Ltd.

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London, England EC2V 6EE.

</TABLE>

<PAGE>

PART C - Other Information
(Continued)

<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ---------------- -------------------------------------------------------
<S> <C>

*David K. Downes Director of Delaware International Advisers Ltd. and Delaware Voyageur
Holding, Inc.; Executive Vice President, Chief Operating Officer, Chief Financial
Officer and Director of Delaware Management Company, Inc., DMH Corp,
Delaware Distributors, Inc., Founders Holdings, Inc. and Delvoy, Inc.; Executive
Vice President, Chief Operating Officer and Chief Financial Officer of the
Registrant and each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc., Founders CBO Corporation, Delaware Capital
Management, Inc. and Delaware Distributors, L.P.; President, Chief Executive
Officer, Chief Financial Officer and Director of Delaware Service Company, Inc.;
President, Chief Operating Officer, Chief Financial Officer and Director of
Delaware International Holdings Ltd.; Chairman, Chief Executive Officer and
Director of Delaware Investment & Retirement Services, Inc.; Chairman and
Director of Delaware Management Trust Company; and Vice President of
Lincoln Funds Corporation

Chief Executive Officer and Director of Forewarn, Inc. since 1993, 8 Clayton
Place, Newtown Square, PA

*Richard G. Unruh, Jr. Director of Delaware International Advisers Ltd.; Executive Vice
President and Director of Delaware Management Company, Inc.;
Executive Vice President of the Registrant, each of the other
funds in the Delaware Group, Delaware Management Holdings, Inc and
Delaware Capital Management, Inc

Board of Directors, Chairman of Finance Committee, Keystone
Insurance Company since 1989, 2040 Market Street, Philadelphia,
PA; Board of Directors, Chairman of Finance Committee, Mid
Atlantic, Inc. since 1989, 2040 Market Street, Philadelphia, PA;
Board of Directors, Metron, Inc. since 1995, 11911 Freedom Drive,
Reston, VA

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London, England EC2V 6EE.

</TABLE>

<PAGE>

PART C - Other Information
(Continued)

*Richard J. Flannery Director of Delaware International Advisers Ltd.; Executive Vice
President and Director of Delaware Management Company, Inc.;
Executive Vice President of the Registrant, each of the other
funds in the Delaware Group, Delaware Management Holdings, Inc and
Delaware Capital Management, Inc

Board of Directors, Chairman of Finance Committee, Keystone
Insurance Company since 1989, 2040 Market Street, Philadelphia,
PA; Board of Directors, Chairman of Finance Committee, Mid
Atlantic, Inc. since 1989, 2040 Market Street, Philadelphia, PA;
Board of Directors, Metron, Inc. since 1995, 11911 Freedom Drive,
Reston, VA

*John C. E. Campbell Diector of Delaware International Advisers Ltd.

*George M. Chamberlain, Jr. Director of Delaware International Advisers Ltd.; Senior Vice President, General
Counsel, Secretary and Director of Delaware Management Company, Inc., DMH
Corp., Delaware Distributors, Inc., Delaware Service Company, Inc., Founders
Holdings, Inc., Delaware Capital Management, Inc., Delaware Investment &
Retirement Services, Inc. and Delvoy, Inc.; Senior Vice President, Secretary and
General Counsel of the Registrant, each of the other funds in the Delaware
Group, Delaware Distributors, L.P. and Delaware Management Holdings, Inc.;
Senior Vice President and Director of Delaware International Holdings Ltd.;
Executive Vice President, Secretary, General Counsel and Director of Delaware
Management Trust Company; and Secretary of Lincoln Funds Corporation

*George E. Deming Director of Delaware International Advisers Ltd.

**Timothy W. Sanderson Senior Portfolio Manager, Deputy Compliance Officer, Director Equity Research
and Director of Delaware International Advisers Ltd.

**Clive A. Gillmore Senior Portfolio Manager, Director U.S. Mutual Fund Liaison and Director of
Delaware International Advisers Ltd.

**Hamish O. Parker Senior Portfolio Manager, Director U.S. Marketing Liaison and Director of
Delaware International Advisers Ltd.

**Gavin A. Hall Senior Portfolio Manager of Delaware International Advisers Ltd.

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London, England EC2V 6EE.

</TABLE>

<PAGE>

PART C - Other Information
(Continued)

**Robert Akester Senior Portfolio Manager of Delaware International Advisers Ltd.

**Hywel Morgan Senior Portfolio Manager of Delaware International Advisers Ltd.
</TABLE>

AIB Govett, Inc. serves as sub-investment adviser to New Pacific
Fund. The directors and officers of AIB Govett, Inc. (formerly John Govett &
Company Limited), a majority owned indirect subsidiary of the AIB Group of
Companies as of December 29, 1995, are listed below. Unless otherwise
indicated, the address of each person is 250 Montgomery Street, Suite 1200,
San Francisco, CA 94104.
<TABLE>
<CAPTION>

Name Positions and Offices with AIB Govett, Inc.
- ---- -------------------------------------------
<S> <C>
Andrew Barnett Director

Peter Cotgrove Director

Charles Fowler Joint Chairman

Peter Kysel Director

Caroline Lane Director

Brian Lee Managing Director Operations

Rachael Maunder Director

Peter Moffatt Director

Rosemary Morgan Director

Ian Morley Director

John Murray Director

Kevin Pakenham Joint Chairman and Chief Executive Officer

Peter Pejacsevich Director and Chief Investment Officer

Gareth Watts Director

</TABLE>

<PAGE>

PART C - Other Information
(Continued)

<TABLE>
<CAPTION>
Name Positions and Offices with AIB Govett, Inc.
- ---- -------------------------------------------
<S> <C>

Steve Wood Director

Andrew Yates Director

Colm Doherty Director

Patrick Cunneen Director

Michael Wilson Director
</TABLE>

Item 29. Principal Underwriters.

(a) Delaware Distributors, L.P. serves as principal
underwriter for all the mutual funds in the Delaware Group.

(b) Information with respect to each director, officer or
partner of principal underwriter:
<TABLE>
<CAPTION>

Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------

<S> <C> <C>
Delaware Distributors, Inc. General Partner None

Delaware Management
Company, Inc. Limited Partner Investment Manager

Delaware Capital
Management, Inc. Limited Partner None

Wayne A. Stork Chairman Chairman

Bruce D. Barton President and Chief Executive None
Officer

David K. Downes Executive Vice President, Executive Vice
Chief Operating Officer President/Chief
and Chief Financial Officer Operating Officer/
Chief Financial Officer
</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

PART C - Other Information
(Continued)

Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>

George M. Chamberlain, Jr. Senior Vice President/Secretary/ Senior Vice President/
General Counsel Secretary/General Counsel

Richard J. Flannery Senior Vice President/Corporate Senior Vice President/
and International Affairs Corporate and
International Affairs

Joseph H. Hastings Senior Vice President/Corporate Senior Vice President/
Controller and Treasurer Corporate Controller

Terrence P. Cunningham Senior Vice President/Financial None
Institutions

Thomas E. Sawyer Senior Vice President/ None
National Sales Director

Holly W. Reimel Vice President/Manager, National None
Accounts

Mac McAuliffe Senior Vice President/Sales None
Manager, Western Division

William F. Hostler Senior Vice President/ None
Marketing Services

J. Chris Meyer Senior Vice President/ None
Director Product Management

Stephen H. Slack Senior Vice President/Wholesaler None

William M. Kimbrough Senior Vice President/Wholesaler None

Daniel J. Brooks Senior Vice President/Wholesaler None

Bradley L. Kolstoe Senior Vice President/Western None
Division Sales Manager
</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

PART C - Other Information
(Continued)
<TABLE>
<CAPTION>

Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>

Henry W. Orvin Senior Vice President/Eastern None
Division Sales Manager

Michael P. Bishof Senior Vice President and Treasurer/ Senior Vice President/
Manager, Investment Accounting Treasurer

Eric E. Miller Vice President/Assistant Secretary/ Vice President/
Deputy General Counsel Assistant Secretary/
Deputy General Counsel

Richelle S. Maestro Vice President/Assistant Vice President/Assistant
Secretary Secretary

Lisa O. Brinkley Vice President/Compliance Vice President/Compliance

Rosemary E. Milner Vice President/Legal Registrations Vice President/Legal
Registrations

Daniel H. Carlson Vice President/Strategic Marketing None

Diane M. Anderson Vice President/Plan Record Keeping None
and Administration

Anthony J. Scalia Vice President/Defined Contribution None
Sales, SW Territory

Courtney S. West Vice President/Defined Contribution None
Sales, NE Territory

Denise F. Guerriere Vice President/Client Services None

Gordon E. Searles Vice President/Client Services None

Julia R. Vander Els Vice President/Participant Services None
</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

PART C - Other Information
(Continued)

<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>

Jerome J. Alrutz Vice President/Retail Sales None

Joanne A. Mettenheimer Vice President/New Business None
Development

Scott Metzger Vice President/Business Development Vice President/Business
Development

Stephen C. Hall Vice President/Institutional Sales None

Gregory J. McMillan Vice President/ National Accounts None

Christopher H. Price Vice President/Manager, None
Insurance

Stephen J. DeAngelis Vice President/Product None
Development

Andrew W. Whitaker Vice President/Financial Institutions None

Jesse Emery Vice President/Marketing None
Communications

Darryl S. Grayson Vice President, Broker/Dealer None
Internal Sales

Susan T. Friestedt Vice President/Client Service None

Dinah J. Huntoon Vice President/Product None
Manager Equity

Soohee Lee Vice President/Fixed Income None
Product Management

Michael J. Woods Vice President/UIT Product None
Management
</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

PART C - Other Information
(Continued)

Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>

Ellen M. Krott Vice President/Marketing None

Dale L. Kurtz Vice President/Marketing Support None

Richard Allen Vice President/Wholesaler None

David P. Anderson Vice President/Wholesaler None

Lee D. Beck Vice President/Wholesaler None

Gabriella Bercze Vice President/Wholesaler None

Terrence L. Bussard Vice President/Wholesaler None

William S. Carroll Vice President/Wholesaler None

William L. Castetter Vice President/Wholesaler None

Thomas J. Chadie Vice President/Wholesaler None

Thomas C. Gallagher Vice President/Wholesaler None

Douglas R. Glennon Vice President/Wholesaler None

Ronald A. Haimowitz Vice President/Wholesaler None

Christopher L. Johnston Vice President/Wholesaler None

Michael P. Jordan Vice President/Wholesaler None

Jeffrey A. Keinert Vice President/Wholesaler None

Thomas P. Kennett Vice President/ Wholesaler None

Debbie A. Marler Vice President/Wholesaler None

Nathan W. Medin Vice President/Wholesaler None
</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

PART C - Other Information
(Continued)

Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>

Roger J. Miller Vice President/Wholesaler None

Patrick L. Murphy Vice President/Wholesaler None

Stephen C. Nell Vice President/Wholesaler None

Joseph T. Owczarek Vice President/Wholesaler None

Mary Ellen Pernice-Fadden Vice President/Wholesaler None

Mark A. Pletts Vice President/Wholesaler None

Philip G. Rickards Vice President/Wholesaler None

Laura E. Roman Vice President/Wholesaler None

Linda Schulz Vice President/Wholesaler None

Edward B. Sheridan Vice President/Wholesaler None

Robert E. Stansbury Vice President/Wholesaler None

Julia A. Stanton Vice President/Wholesaler None

Larry D. Stone Vice President/Wholesaler None

Edward J. Wagner Vice President/Wholesaler None

Wayne W. Wagner Vice President/Wholesaler None

John A. Wells Vice President/Marketing Technology None

Scott Whitehouse Vice President/Wholesaler None
</TABLE>

*Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

PART C - Other Information
(Continued)

Item 30. Location of Accounts and Records.

(a) Delaware Group Adviser Funds, Inc.
One Commerce Square
Philadelphia, PA 19103
(Articles of Incorporation and By-Laws)

(b) Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
(with respect to their services as investment adviser)

(d) Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
(with respect to their services as distributor)

(e) Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
(with respect to their services as shareholder
services agent)

(f) Lynch & Mayer, Inc.
520 Madison Avenue
New York, NY 10022
(with respect to their services as sub-adviser)

(g) Delaware International Advisers Ltd.
Third Floor
80 Cheapside
London, England EC2V 6EE
(with respect to their services as sub-adviser)

(h) AIB Govett, Inc.
250 Montgomery Street
Suite 1200
San Francisco, CA 94104
(with respect to their services as sub-adviser)

<PAGE>

PART C - Other Information
(Continued)

Item 31. Management Services. None.

Item 32. Undertakings.

(a) Not Applicable.

(b) Not Applicable.

(c) The Registrant hereby undertakes to furnish each person
to whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders, upon
request and without charge.

(d) The Registrant hereby undertakes to promptly call a
meeting of shareholders for the purpose of voting upon
the question of removal of any director when requested
in writing to do so by the record holders of not less
than 10% of the outstanding shares.

<PAGE>

PART C - Other Information
(Continued)

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Philadelphia, Commonwealth of Pennsylvania on this
18th day of February, 1998.

DELAWARE GROUP ADVISER FUNDS, INC.

By Wayne A. Stork
------------------------------------
Wayne A. Stork
Chairman

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>

Signature Title Date
--------- ----- ----

<S> <C> <C>
/s/ Wayne A. Stork Chariman of the Board and Director February 18, 1998
- --------------------------------------
Wayne A. Stork

Executive Vice President/Chief Operating
Officer/Chief Financial Officer
/s/ David K. Downes (Principal Financial Officer and Principal February 18, 1998
- -------------------------------------- Accounting Officer)
David K. Downes

/s/Walter P. Babich * Director February 18, 1998
- --------------------------------------
Walter P. Babich

/s/Anthony D. Knerr * Director February 18, 1998
- --------------------------------------
Anthony D. Knerr

/s/Ann R. Leven * Director February 18, 1998
- --------------------------------------
Ann R. Leven

/s/W. Thacher Longstreth * Director February 18, 1998
- --------------------------------------
W. Thacher Longstreth

/s/Thomas F. Madison * Director February 18, 1998
- --------------------------------------
Thomas F. Madison

/s/Jeffrey J. Nick * Director February 18, 1998
- --------------------------------------
Jeffrey J. Nick

/s/Charles E. Peck * Director February 18, 1998
- --------------------------------------
Charles E. Peck

*By /s/ Wayne A. Stork
------------------------------
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated

</TABLE>

<PAGE>

PART C - Other Information
(Continued)

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

Exhibits

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

<PAGE>

PART C - Other Information
(Continued)

INDEX TO EXHIBITS

Exhibit No. Exhibit
- ----------- -------

EX-99.B5F Form of Sub-Advisory Agreement between Delaware Management
Comapny, Inc. and AIB Govett, Inc. on behalf of New Pacific
Fund

EX-99.B9BI Executed Amendment No. 7 (October 14, 1997) to Schedule A to
Delaware Group of Funds Fund Accounting Agreement

EX-99.B9BII Executed Amendment No. 8 (December 18, 1997) to Schedule A to
Delaware Group of Funds Fund Accounting Agreement

EX-99.B11 Consent of Auditors

EX-99.B16B Schedules of Computation for each Performance Quotation for
periods not previously filed

EX-27 Financial Data Schedules

EX-99.B19 Power of Attorney

<PAGE>

EX-99.B5F
Exhibit 24(b)(5)(f)

DELAWARE GROUP ADVISER FUNDS, INC.

SUB-ADVISORY AGREEMENT

AGREEMENT, made by and between DELAWARE MANAGEMENT COMPANY, INC., a
Delaware corporation ("Investment Manager"), and AIB GOVETT, INC., a Maryland
corporation ("Sub-Adviser").

W I T N E S S E T H:

WHEREAS, DELAWARE GROUP ADVISER FUNDS, INC., a Maryland corporation
("Fund"), on behalf of the New Pacific Fund ("Portfolio"), has been organized
and operates as an investment company registered under the Investment Company
Act of 1940 ("1940 Act") and engages in the business of investing and
reinvesting its assets in securities, and
WHEREAS, the Investment Manager and the Fund have entered into an
agreement of even date herewith ("Investment Management Agreement") whereby
the Investment Manager will provide investment advisory services to the Fund
on behalf of the Portfolio; and
WHEREAS, the Investment Management Agreement permits the Investment
Manager to hire one or more sub-advisers to assist the Investment Manager in
providing investment advisory services to the Fund on behalf of the Portfolio;
and

-1-

<PAGE>

WHEREAS, the Investment Manager and the Sub-Adviser are registered
investment advisers under the Investment Advisers Act of 1940 and engage in
the business of providing investment management services; and
WHEREAS, the Investment Manager previously entered into a
Sub-Advisory Agreement with John Govett & Co., Limited dated as of May 4,
1996; and
WHEREAS, as a result of an internal restructuring, the services and
personnel of John Govett & Co. Limited were transferred to the Sub-Adviser,
thus triggering the necessity to enter into the this Sub-Advisory Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it is
agreed as follows:
1. The Investment Manager hereby employs the Sub-Adviser to manage
the investment and reinvestment of the Portfolio's assets, subject to the
direction of the Fund's Board of Directors and officers of the Fund for the
period and on the terms hereinafter set forth. The Sub-Adviser hereby accepts
such employment and agrees during such period to render the services and
assume the obligations herein set forth for the compensation herein provided.
The Sub-Adviser shall for all purposes herein be deemed to be an independent
contractor, and shall, unless otherwise expressly provided and authorized,
have no authority to act for or represent the Fund in any way, or in any way
be deemed an agent of the Fund. The Sub-Adviser shall regularly make decisions
as to what securities and other instruments to purchase and sell on behalf of
the Portfolio, shall effect the purchase and sale of such investments, as
agent for the Fund on behalf of the Portfolio, in furtherance of the
Portfolio's objectives and policies and shall furnish the Board of Directors
of the Fund with such information and reports regarding its activities as the
Investment Manager deems appropriate

-2-

<PAGE>

or as the Directors of the Fund may reasonably request consistent with the
provisions of Section 15(c) of the 1940 Act.
In the performance of its duties and obligations under this
Agreement, the Sub-Adviser shall act in conformity with the Articles of
Incorporation, By-Laws and Prospectus of the Fund and with the instructions
and directions of the Investment Manager and of the Board of Directors of the
Fund and will conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986 and all other applicable federal and state laws
and regulations.
2. Under the terms of the Investment Management Agreement, the Fund
shall conduct its own business and affairs and shall bear the expenses and
salaries necessary and incidental thereto including, but not in limitation of
the foregoing, the costs incurred in: the maintenance of its corporate
existence; the maintenance of its own books, records and procedures; dealing
with its own shareholders; the payment of dividends; transfer of stock,
including issuance and repurchase of shares; preparation of share
certificates; reports and notices to shareholders; calling and holding of
shareholders' meetings; miscellaneous office expenses; brokerage commissions;
custodian fees; legal and accounting fees; taxes; and federal and state
registration fees.
Directors, officers and employees of the Sub-Adviser may be
directors, officers and employees of other funds which have employed the
Sub-Adviser as sub-adviser or investment manager.
In the conduct of the respective business of the parties hereto and
in the performance of this Agreement, the Fund, the Investment Manager and the
Sub-Adviser may share facilities common to each, with appropriate proration of
expenses between and among them.
3. (a) Subject to the primary objective of obtaining the best
available prices and execution, the Sub-Adviser will place orders for the
purchase and sale of portfolio securities and other

-3-

<PAGE>

instruments with such broker/dealers who provide statistical, factual and
financial information and services to the Fund, to the Investment Manager, to
the Sub-Adviser or to any other fund for which the Investment Manager or
Sub-Adviser provides investment advisory services and/or with broker/dealers
who sell shares of the Fund or who sell shares of any other fund for which the
Investment Manager or Sub-Adviser provides investment advisory services.
Broker/dealers who sell shares of the funds for which the Investment Manager
or Sub-Adviser provides advisory services shall only receive orders for the
purchase or sale of portfolio securities to the extent that the placing of
such orders is in compliance with the Rules of the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above
and subject to the policies and procedures as may be adopted by the Board of
Directors and officers of the Fund, the Sub-Adviser may ask the Fund and the
Fund may agree to pay a member of an exchange, broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another member of an exchange, broker or dealer would have charged
for effecting that transaction, in such instances where it and the Sub-Adviser
have determined in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
member, broker or dealer, viewed in terms of either that particular
transaction or the Sub-Adviser's overall responsibilities with respect to the
Fund and to other funds and other advisory accounts for which the Investment
Manager or the Sub-Adviser exercises investment discretion.
4. The Sub-Adviser shall maintain all books and records with respect
to the Portfolio's portfolio transactions required by subparagraphs (b) (5),
(6), (7), (9), (10) and (11) and paragraph

-4-

<PAGE>

(f) of Rule 31a-1 under the 1940 Act and shall render to the Fund's Board of
Directors such periodic and special reports as the Board may reasonably
request.
The Sub-Adviser shall keep the Portfolio's books and records
required to be maintained by the Sub-Adviser pursuant to this Paragraph 4 and
shall timely furnish to the Investment Manager all information relating to the
Sub-Adviser's services hereunder needed by the Investment Manager to keep the
other books and records of the Portfolio required by Rule 31a-1 under the 1940
Act. The Sub-Adviser agrees that all records which it maintains for the
Portfolio are the property of the Fund and the Sub-Adviser will surrender
promptly to the Fund any of such records upon the Fund's request, provided
however that the Sub-Adviser may retain a copy of such records. The Sub-
Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 of
the Securities and Exchange Commission under the 1940 Act any such records as
are required to be maintained by it pursuant to this Paragraph 4.
5. As compensation for the services to be rendered to the Fund for
the benefit of the Portfolio by the Sub-Adviser under the provisions of this
Agreement, the Investment Manager shall pay to the Sub-Adviser a fee at an
annual rate of .50% of the average daily net assets of the Portfolio. The fee
shall be computed daily and will be paid to the Sub-Adviser, quarterly, in
arrears.
If this Agreement is terminated prior to the end of any calendar
month, the Sub-Advisory fee shall be prorated for the portion of any month in
which this Agreement is in effect according to the proportion which the number
of calendar days, during which the Agreement is in effect, bears to the number
of calendar days in the month, and shall be payable within 10 days after the
date of termination.

-5-

<PAGE>

6. The services to be rendered by the Sub-Adviser to the Fund for the
benefit of the Portfolio under the provisions of this Agreement are not to be
deemed to be exclusive, and the Sub- Adviser shall be free to render similar
or different services to others so long as its ability to render the services
provided for in this Agreement shall not be impaired thereby; provided,
however, except for advisory arrangements implemented prior to the date of
this Agreement, during the term of this Agreement, the Sub-Adviser, will not,
without the written consent of the Investment Manager, which consent will not
be unreasonably withheld, render investment management (or similar services)
to another registered investment company (or portfolio thereof) which the
Investment Manager reasonably determines would be in competition with and
which has investment policies similar to those of the Portfolio.
7. The Investment Manager agrees that it shall not use the
Sub-Adviser's name or otherwise refer to the Sub-Adviser in any materials
distributed to third parties, including the Portfolio's shareholders, without
the prior written consent of the Sub-Adviser.
8. In the absence of willful misfeasance, bad faith, gross
negligence, or a reckless disregard of the performance of its duties as
Sub-Adviser to the Fund, the Sub-Adviser shall not be subject to liability to
the Fund, to the Investment Manager or to any shareholder of the Fund for any
action or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security, or otherwise.
9. This Agreement shall be executed and become effective as of the
date written below if approved by the vote of a majority of the outstanding
voting securities of the Portfolio. It shall continue in effect for a period
of two years and may be renewed thereafter only so long as such renewal and
continuance is specifically approved at least annually by the Board of
Directors or by the

-6-

<PAGE>

vote of a majority of the outstanding voting securities of the Portfolio and
only if the terms and the renewal hereof have been approved by the vote of a
majority of the Directors of the Fund who are not parties hereto or interested
persons of any such party, cast in person at a meeting called for the purpose
of voting on such approval. Notwithstanding the foregoing, this Agreement may
be terminated by the Investment Manager or the Fund at any time, without the
payment of a penalty, on sixty days' written notice to the Sub-Adviser, of the
Investment Manager's or the Fund's intention to do so, in the case of the
Fund, pursuant to action by the Board of Directors of the Fund or pursuant to
the vote of a majority of the outstanding voting securities of the Portfolio.
The Sub-Adviser may terminate this Agreement at any time, without the payment
of a penalty on sixty days' written notice to the Investment Manager and the
Fund of its intention to do so. Upon termination of this Agreement, the
obligations of all the parties hereunder shall cease and terminate as of the
date of such termination, except for any obligation to respond for a breach of
this Agreement committed prior to such termination, and except for the
obligation of the Investment Manager to pay to the Sub-Adviser the fee
provided in Paragraph 5 hereof, prorated to the date of termination. This
Agreement shall automatically terminate in the event of its assignment. This
Agreement shall automatically terminate upon the termination of the Investment
Management Agreement.
10. If the Investment Manager has any complaint about the way in
which the Sub-Adviser has carried out its obligations under this Agreement,
the matter should be raised in the first instance with the Sub-Adviser's
compliance officer, who will arrange to investigate the complaint and respond
with his findings. The Investment Manager also has the right to complain
directly to the Investment Ombudsman at 6 Frederick's Place, London EC2R 8BT.
11. This Agreement shall extend to and bind the successors of the
parties hereto.

-7-

<PAGE>

This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original. This Agreement shall become effective when one or
more counterparts have been signed and delivered by each of the parties
hereto.
12. For the purposes of this Agreement, the terms "vote of a majority
of the outstanding voting securities", "interested person", and "assignment"
shall have the meaning defined in the 1940 Act.

-8-

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused their corporate
seals to be affixed and duly attested and their presents to be signed by their
duly authorized officers as of the ___ day of December, 1997.

DELAWARE MANAGEMENT COMPANY, INC.

By:
------------------------------------

Attest:
------------------------------------

AIB GOVETT, INC.

By:
------------------------------------

Attest:
------------------------------------

Agreed to and accepted as of the
day and year first above written:

DELAWARE GROUP ADVISER FUNDS, INC.
on behalf of the New Pacific Fund

By:
------------------------------------

Attest:
------------------------------------

-9-

<PAGE>

EX-99.B9BI
Exhibit 24(b)(9)(b)(ii)

AMENDMENT NO.7
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT

Delaware Group Adviser Funds, Inc.
Corporate Income Fund (liquidated September 19, 1997)
Enterprise Fund (liquidated September 19, 1997)
Federal Bond Fund (liquidated September 19, 1997)
New Pacific Fund
U.S. Growth Fund
Overseas Equity Fund

Delaware Group Cash Reserve, Inc.

Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund

Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)

Delaware Group Equity Funds III, Inc. (formerly Trend)
Trend Fund

Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund

Delaware Group Equity Funds V, Inc. (formerly Value)
Value Fund
Retirement Income Fund (New)

Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )

- ------------------
*Except as otherwise noted, all Portfolios included on this Schedule
A are Existing Portfolios for purposes of the compensation described on
Schedule B to that Fund Accounting Agreement between Delaware Service Company,
Inc. and the Delaware Group of Funds dated as of August 19, 1996
("Agreement"). All portfolios added to this Schedule A by amendment executed
by a Company on behalf of such Portfolio hereof shall be a New Portfolio for
purposes of Schedule B to the Agreement.

<PAGE>

Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)

Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)

Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund

Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Defensive Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (deregistered January 14, 1997)
The Emerging Markets Portfolio (New) The Fixed Income Portfolio The
Global Fixed Income Portfolio The High-Yield Bond Portfolio (New) The
International Equity Portfolio The International Fixed Income
Portfolio (New) The Labor Select International Equity Portfolio The
Limited-Term Maturity Portfolio (New) The Real Estate Investment
Trust Portfolio The Global Equity Portfolio (New)
The Real Estate Investment Trust Portfolio II (New)

<PAGE>

Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
Strategic Income Series (New)
Trend Series
Value Series

Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund

Delaware Group Tax-Free Money Fund, Inc.

Delaware Group State Tax-Free Income Trust (formerly DMCT Tax-Free Income
Trust-Pennsylvania)
Tax-Free Pennsylvania Fund
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)

Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)

Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)

Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)

<PAGE>

Voyageur Investment Trust
California Insured Tax Free Fund (New) Florida Insured Tax Free Fund
(New) Florida Tax Free Fund (New) Kansas Tax Free Fund (New) Missouri
Insured Tax Free Fund (New) New Mexico Tax Free Fund (New) Oregon
Insured Tax Free Fund (New) Utah Tax Free Fund (New) Washington
Insured Tax Free Fund (New)

Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)

Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)

Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)

Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)

Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)

<PAGE>

Dated as of October 14, 1997

DELAWARE SERVICE COMPANY, INC.

By: /s/ David K. Downes
David K. Downes
President, Chief Executive Officer and Chief Financial Officer

DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED -TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.

By: /s/ Wayne A. Stork
--------------------------------------
Wayne A. Stork
Chairman

<PAGE>

EX-99.B9BII
Exhibit 24(b)(9)(b)(ii)

AMENDMENT NO. 8
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT

Delaware Group Cash Reserve, Inc.

Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund

Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)

Delaware Group Equity Funds III, Inc. (formerly Trend)
Trend Fund

Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund

Delaware Group Equity Funds V, Inc. (formerly Value)
Small Cap Value Fund (formerly Value Fund)
Retirement Income Fund (New)

- ------------------
*Except as otherwise noted, all Portfolios included on this Schedule A
are Existing Portfolios for purposes of the compensation described on Schedule B
to that Fund Accounting Agreement between Delaware Service Company, Inc. and the
Delaware Group of Funds dated as of August 19, 1996 ("Agreement"). All
portfolios added to this Schedule A by amendment executed by a Company on behalf
of such Portfolio hereof shall be a New Portfolio for purposes of Schedule B to
the Agreement.

<PAGE>

Delaware Group Foundation Funds (New)
Balanced Portfolio (New)
Growth Portfolio (New)
Income Portfolio (New)

Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )

Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)

Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)

Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund

Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Large-Cap Value Equity Portfolio
(formerly The Defensive Equity Portfolio)
The Small/Mid-Cap Value Equity Portfolio (New)
(formerly The Defensive Equity Small/Mid-Cap Portfolio)
The Defensive Equity Utility Portfolio (deregistered January 14, 1997)
The Emerging Markets Portfolio (New)
The Intermediate Fixed Income Portfolio
(formerly The Fixed Income Portfolio) The Global Fixed Income
Portfolio The High-Yield Bond Portfolio (New) The International Equity
Portfolio The International Fixed Income Portfolio (New) The Labor
Select International Equity Portfolio The Limited-Term Maturity
Portfolio (New) The Real Estate Investment Trust Portfolio The Global
Equity Portfolio (New) The Real Estate Investment Trust Portfolio II
(New) The Diversified Core Fixed Income Portfolio (New) The Aggregate
Fixed Income Portfolio (New)

<PAGE>

Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund

Delaware Group Tax-Free Money Fund, Inc.

Delaware Group State Tax-Free Income Trust (formerly DMCT Tax-Free Income
Trust-Pennsylvania)
Tax-Free Pennsylvania Fund
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)

Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)

Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)

<PAGE>

Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)

Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)

Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)

Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)

<PAGE>

Dated as of December 18, 1997

DELAWARE SERVICE COMPANY, INC.

By: /s/ David K. Downes
David K. Downes
President, Chief Executive Officer and Chief Financial Officer

DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP FOUNDATION FUNDS
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.

By: /s/ Wayne A. Stork
------------------------------------
Wayne A. Stork
Chairman

<PAGE>

Consent of Ernst & Young LLP, Independent Auditors

We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectuses and "Financial Statements" in the Statement of
Additional Information and to the incorporation by reference in this
Post-Effective Amendment No. 9 to the Registration Statement (Form N-1A)
(No. 33-67490) of Delaware Group Adviser Funds, Inc. of our reports dated
December 5, 1997, included in the 1997 Annual Report to shareholders.

/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP

Philadelphia, Pennsylvania
February 25, 1998

<PAGE>

Report of Independent Auditors

To the Shareholders and Board of Directors
Delaware Group Adviser Funds, Inc.

We have audited the accompanying statements of net assets and the statements of
assets and liabilities of Delaware Group Adviser Funds, Inc. (comprised of the
U.S. Growth Fund, the Overseas Equity Fund, and the New Pacific Fund) (the
"Funds") as of October 31, 1997, and the related statements of operations,
statements of changes in net assets, and financial highlights for the year then
ended. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. The statements of changes in net assets for the year ended October 31,
1996 and the financial highlights for the periods ended October 31, 1994
through October 31, 1996 were audited by other auditors whose report dated
December 20, 1996, expressed an unqualified opinion on those statements and
financial highlights.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of October 31, 1997, by correspondence with
the Funds' custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the 1997 financial statements and financial highlights referred
to above present fairly, in all material respects the financial position of each
of the respective portfolios constituting the Delaware Group Adviser Funds, Inc.
at October 31, 1997, the results of their operations, changes in their net
assets, and their financial highlights for the year then ended, in conformity
with generally accepted accounting principles.

/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP

December 5, 1997

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in this Post-Effective Amendment
No. 9 to the Registration Statement under the Securities Act of 1933 on Form
N-1A (File No. 33-67490) of our reported dated December 20, 1996 on our audit of
the financial statements and financial highlights of Delaware Group Adviser
Funds, Inc. We also consent to the reference to our Firm under the caption
"Financial Highlights" in the Prospectus and under the caption "Financial
Statements" in the Statement of Additional Information.

/s/ Coopers & Lybrand L.L.P.
- -------------------------------
Coopers & Lybrand L.L.P.

2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 25, 1998

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND A
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- --------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $ 734.19

T = -9.79%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND A
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- --------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $ 699.37

T = -11.24%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND A
TOTAL RETURN PERFORMANCE
THREE YEARS
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.44
Initial Shares 95.785

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1995 95.785 $0.287 2.962 98.747
- -------------------------------------------------------------------------------
1996 98.747 $0.010 0.097 98.844
- -------------------------------------------------------------------------------
1997 98.844 $0.152 1.593 100.437
- -------------------------------------------------------------------------------

Ending Shares 100.437
Ending NAV x $7.31
-------
Investment Return $734.19

Total Return Performance
- ------------------------
Investment Return $734.19
Less Initial Investment $1,000.00
---------
($265.81) / $1,000.00 x 100

Total Return: -26.58%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND A
TOTAL RETURN PERFORMANCE
THREE YEARS
- -------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.96
Initial Shares 91.241

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1995 91.241 $0.287 2.822 94.063
- -------------------------------------------------------------------------------
1996 94.063 $0.010 0.092 94.155
- -------------------------------------------------------------------------------
1997 94.155 $0.152 1.518 95.673
- -------------------------------------------------------------------------------

Ending Shares 95.673
Ending NAV x $7.31
----------
Investment Return $699.37

Total Return Performance
- ------------------------
Investment Return $699.37
Less Initial Investment $1,000.00
----------
($300.63) / $1,000.00 x 100

Total Return: -30.06%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND B
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -----------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $ 698.55

T = -11.27%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND B
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -----------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $719.16

T = -10.41%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND B
TOTAL RETURN PERFORMANCE
THREE YEARS (INCLUDING CDSC)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.86
Initial Shares 92.081

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1995 92.081 $0.287 2.741 94.822
- -------------------------------------------------------------------------------
1996 94.822 $0.010 0.090 94.912
- -------------------------------------------------------------------------------
1997 94.912 $0.152 1.490 96.402
- ------------------------------------------------------------------------------

Ending Shares 96.402
Ending NAV x $7.46
---------
$719.16
Less CDSC $20.61
---------

Investment Return $698.55

Total Return Performance
- ------------------------
Investment Return $698.55
Less Initial Investment $1,000.00
---------
($301.45) / $1,000.00 x 100

Total Return: -30.15%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND B
TOTAL RETURN PERFORMANCE
THREE YEARS (EXCLUDING CDSC)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.86
Initial Shares 92.081

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

Ending Shares 96.402
Ending NAV x $7.46
---------
Investment Return $719.16

Total Return Performance
- ------------------------
Investment Return $719.16
Less Initial Investment $1,000.00
---------
($280.84) / $1,000.00 x 100

Total Return: -28.08%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND C
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -----------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
1
$1000(1 - T) = $ 718.25

T = -10.44%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND C
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -----------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $ 718.25

T = -10.44%

<PAGE>
DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND C
TOTAL RETURN PERFORMANCE
THREE YEARS (INCLUDING CDSC)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.65
Initial Shares 93.897

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1995 93.897 $0.287 2.849 96.746
- -------------------------------------------------------------------------------
1996 96.746 $0.010 0.094 96.840
- -------------------------------------------------------------------------------
1997 96.840 $0.152 1.551 98.391
- ------------------------------------------------------------------------------

Ending Shares 98.391
Ending NAV x $7.30
---------
$718.25
Less CDSC $0.00
---------

Investment Return $718.25

Total Return Performance
- ------------------------
Investment Return $718.25
Less Initial Investment $1,000.00
---------
($281.75) / $1,000.00 x 100

Total Return: -28.18%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND C
TOTAL RETURN PERFORMANCE
THREE YEARS (EXCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.65
Initial Shares 93.897

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

Ending Shares 98.391
Ending NAV x $7.30
-----------
Investment Return $718.25

Total Return Performance
- ------------------------
Investment Return $718.25
Less Initial Investment $1,000.00
-----------
($281.75)$1,000.00 x 100

Total Return: -28.18%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND INSTITUTIONAL
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -----------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $ 743.90

T = -9.39%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
NEW PACIFIC FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
THREE YEARS
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.47
Initial Shares 95.511

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1995 95.511 $0.287 2.944 98.455
- -------------------------------------------------------------------------------
1996 98.455 $0.010 0.096 98.551
- -------------------------------------------------------------------------------
1997 98.551 $0.152 1.570 100.121
- ------------------------------------------------------------------------------

Ending Shares 100.121
Ending NAV x $7.43
---------
Investment Return $743.90

Total Return Performance
- ------------------------
Investment Return $743.90
Less Initial Investment $1,000.00
---------
($256.10) / $1,000.00 x 100

Total Return: -25.61%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND A
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -----------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,159.95

T = -5.07%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND A
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -----------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,218.03

T = -6.79%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND A
TOTAL RETURN PERFORMANCE
THREE YEARS
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.99
Initial Shares 90.992

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1995 90.992 $0.009 0.074 91.066
- ------------------------------------------------------------------------------
1996 91.066 $0.023 0.180 91.246
- ------------------------------------------------------------------------------
1997 91.246 $0.765 6.041 97.287
- ------------------------------------------------------------------------------

Ending Shares 97.287
Ending NAV x $12.52
-----------
Investment Return $1,218.03

Total Return Performance
- ------------------------
Investment Return $1,218.03
Less Initial Investment $1,000.00
-----------
$218.03 / $1,000.00 x 100

Total Return: 21.80%

<PAGE>
DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND A
TOTAL RETURN PERFORMANCE
THREE YEARS
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $11.54
Initial Shares 86.655

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1995 86.655 $0.009 0.070 86.725
- -------------------------------------------------------------------------------
1996 86.725 $0.023 0.172 86.897
- ------------------------------------------------------------------------------
1997 86.897 $0.765 5.751 92.648
- -----------------------------------------------------------------------------

Ending Shares 92.648
Ending NAV x $12.52
-----------
Investment Return $1,159.95

Total Return Performance
- ------------------------
Investment Return $1,159.95
Less Initial Investment $1,000.00
-----------
$159.95 / $1,000.00 x 100

Total Return: 16.00%

<PAGE>
DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND B
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,193.76

T = 6.08%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND B
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,163.96

T = 5.19%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND B
TOTAL RETURN PERFORMANCE
THREE YEARS (INCLUDING CDSC)
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.40
Initial Shares 96.154

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1995 96.154 $0.020 0.198 96.352
- -------------------------------------------------------------------------------
1996 96.352 $0.023 0.203 96.555
- ------------------------------------------------------------------------------
1997 96.555 $0.765 6.890 103.445
- ------------------------------------------------------------------------------

Ending Shares 103.445
Ending NAV x $11.54
-----------
$1,193.76
Less CDSC $30.00
-----------

Investment Return $1,163.76

Total Return Performance
- ------------------------
Investment Return $1,163.76
Less Initial Investment $1,000.00
-----------
$163.76 / $1,000.00 x 100

Total Return: 16.38%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND B
TOTAL RETURN PERFORMANCE
THREE YEARS (EXCLUDING CDSC)
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.40
Initial Shares 96.154

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1995 96.154 $0.287 0.198 96.352
- -------------------------------------------------------------------------------
1996 96.352 $0.010 0.203 96.555
- -------------------------------------------------------------------------------
1997 96.555 $0.152 6.890 103.445
- -------------------------------------------------------------------------------

Ending Shares 103.445
Ending NAV x $11.54
----------
Investment Return $1,193.76

Total Return Performance
- ------------------------
Investment Return $1,193.76
Less Initial Investment $1,000.00
-----------
$193.76 / $1,000.00 x 100

Total Return: 19.38%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND C
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,192.06

T = 6.03%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND C
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,192.06

T = 6.03%

<PAGE>
DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND C
TOTAL RETURN PERFORMANCE
THREE YEARS (INCLUDING CDSC)
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.43
Initial Shares 95.877

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1995 95.877 $0.027 0.267 96.144
- -------------------------------------------------------------------------------
1996 96.144 $0.023 0.202 96.346
- ------------------------------------------------------------------------------
1997 96.346 $0.765 6.863 103.209
- ------------------------------------------------------------------------------

Ending Shares 103.209
Ending NAV x $11.55
----------
$1,192.06
Less CDSC $0.00
----------
Investment Return $1,192.06

Total Return Performance
- ------------------------
Investment Return $1,192.06
Less Initial Investment $1,000.00
----------
$192.06 / $1,000.00 x 100

Total Return: 19.21%

<PAGE>
DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND C
TOTAL RETURN PERFORMANCE
THREE YEARS (EXCLUDING CDSC)
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.43
Initial Shares 95.877

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

Ending Shares 103.209
Ending NAV x $11.55
----------
Investment Return $1,192.06

Total Return Performance
- ------------------------
Investment Return $1,192.06
Less Initial Investment $1.000.00
----------
$ 192.06 /$1,000.00 x 100

Total Return: 19.21%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND INSTITUTIONAL
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,215.02

T = 6.71%
<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
OVERSEAS EQUITY FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
THREE YEARS
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $11.01
Initial Shares 90.827

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1995 90.827 $0.031 0.272 91.099
- -------------------------------------------------------------------------------
1996 91.099 $0.023 0.181 91.280
- ------------------------------------------------------------------------------
1997 91.280 $0.765 6.077 97.357
- ------------------------------------------------------------------------------

Ending Shares 97.357
Ending NAV x $12.48
-----------
Investment Return $1,215.02

Total Return Performance
- ------------------------
Investment Return $1,215.02
Less Initial Investment $1,000.00
-----------
$215.02 / $1,000.00 x 100

Total Return: 21.50%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND A
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- ---------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,802.68

T = 21.70%

<PAGE>
DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND A
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,716.91

T = 19.74%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND A
TOTAL RETURN PERFORMANCE
THREE YEARS
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.21
Initial Shares 97.943

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1997 97.943 $1.360 10.326 108.269
- -------------------------------------------------------------------------------

Ending Shares 108.269
Ending NAV x $16.65
-----------

Investment Return $1,802.68

Total Return Performance
- ------------------------
Investment Return $1,802.68
Less Initial Investment $1,000.00
-----------
$802.68 / $1,000.00 x 100

Total Return: 80.27%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND A
TOTAL RETURN PERFORMANCE
THREE YEARS
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.72
Initial Shares 93.284

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1997 93.284 $1.360 9.834 103.118
- -------------------------------------------------------------------------------

Ending Shares 103.118
Ending NAV x $16.65
----------
Investment Return $1,716.91

Total Return Performance
- ------------------------
Investment Return $1,716.91
Less Initial Investment $1,000.00
----------
$716.91 / $1,000.00 x 100

Total Return: 71.69%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND B
TOTAL RETURN PERFORMANCE
THREE YEARS (EXCLUDING CDSC)
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.19
Initial Shares 98.135

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1997 98.135 $1.360 10.534 108.669
- -------------------------------------------------------------------------------

Ending Shares 108.669
Ending NAV x $16.26
-----------
Investment Return $1,766.96

Total Return Performance
- ------------------------
Investment Return $1,766.96
Less Initial Investment $1,000.00
-----------
$766.96 / $1,000.00 x 100

Total Return: 76.70%

<PAGE>
DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND B
TOTAL RETURN PERFORMANCE
THREE YEARS (INCLUDING CDSC)
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.19
Initial Shares 98.135

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1997 98.135 $1.360 10.534 108.669
- -------------------------------------------------------------------------------

Ending Shares 108.669
Ending NAV x $16.26
-----------
$1,766.96
Less CDSC $30.00
-----------
Investment Return $1,736.96

Total Return Performance

- ------------------------
Investment Return $1,736.96
Less Initial Investmetn $1,000.00
-----------
$736.96 / $1,000.00 x 100

Total Return: 73.70%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND B
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,766.96

T = 20.90%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND B
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,736.96

T = 20.21%

<PAGE>
DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND C
TOTAL RETURN PERFORMANCE
THREE YEARS (INCLUDING CDSC)
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.62
Initial Shares 94.162

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1997 94.162 $1.360 9.658 103.820
- -------------------------------------------------------------------------------

Ending Shares 103.820
Ending NAV x $17.01
-----------
$1,765.98
Less CDSC $0.00
-----------

Investment Return $1,765.98

Total Return Performance
- ------------------------
Investment Return $1,765.98
Less Initial Investment $1,000.00
-----------
$765.98 / $1,000.00 x 100

Total Return: 76.60%

<PAGE>
DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND C
TOTAL RETURN PERFORMANCE
THREE YEARS (EXCLUDING CDSC)
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $10.62
Initial Shares 94.162

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1997 94.162 $1.360 9.658 103.820
- -------------------------------------------------------------------------------

Ending Shares 103.820
Ending NAV x $17.01
-----------
Investment Return $1,765.98

Total Return Performance
- ------------------------
Investment Return $1,765.98
Less Initial Investment $1,000.00
-----------
$765.98 / $1,000.00 x 100

Total Return: 76.60%

<PAGE>
DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND C
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- ------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
1
$1000(1 - T) = $1,765.98

T = 20.87%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH FUND C
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,765.98

T = 20.87%

<PAGE>

DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH INSTITUTIONAL
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------

Average Annual Compounded Rate of Return:

n
P(1 + T) = ERV

THREE
YEARS
-----
3
$1000(1 - T) = $1,820.12

T = 22.10%

<PAGE>
DELAWARE GROUP ADVISER FUNDS, INC.
U.S. GROWTH INSTITUTIONAL
TOTAL RETURN PERFORMANCE
THREE YEARS
- -------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $13.94
Initial Shares 71.736

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares

- -------------------------------------------------------------------------------
1997 71.736 $1.360 36.219 107.955
- -------------------------------------------------------------------------------

Ending Shares 107.955
Ending NAV x $16.86
-----------
Investment Return $1,820.12

Total Return Performance
- ------------------------
Investment Return $1,820.12
Less Initial Investment $1,000.00
-----------
$820.12 / $1,000.00 x 100

Total Return: 82.01%

<ARTICLE> 6
<CIK> 0000910682
<NAME> DELAWARE GROUP ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 051
<NAME> NEW PACIFIC FUND A CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 11,672,898
<INVESTMENTS-AT-VALUE> 9,323,371
<RECEIVABLES> 0
<ASSETS-OTHER> 599,836
<OTHER-ITEMS-ASSETS> 582
<TOTAL-ASSETS> 9,923,789
<PAYABLE-FOR-SECURITIES> (85,474)
<SENIOR-LONG-TERM-DEBT> (12,672)
<OTHER-ITEMS-LIABILITIES> (34,727)
<TOTAL-LIABILITIES> (132,873)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,520,859
<SHARES-COMMON-STOCK> 975,985
<SHARES-COMMON-PRIOR> 1,558,196
<ACCUMULATED-NII-CURRENT> 31,125
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,137,834)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,357,488)
<NET-ASSETS> 7,143,529
<DIVIDEND-INCOME> 38,946
<INTEREST-INCOME> 214,688
<OTHER-INCOME> 0
<EXPENSES-NET> 273,844
<NET-INVESTMENT-INCOME> (20,210)
<REALIZED-GAINS-CURRENT> (992,876)
<APPREC-INCREASE-CURRENT> (1,602,519)
<NET-CHANGE-FROM-OPS> (2,615,605)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 190,598
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,058,867
<NUMBER-OF-SHARES-REDEEMED> 1,348,426
<SHARES-REINVESTED> 20,129
<NET-CHANGE-IN-ASSETS> (2,421,216)
<ACCUMULATED-NII-PRIOR> 2,413
<ACCUMULATED-GAINS-PRIOR> 101,120
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 282,844
<AVERAGE-NET-ASSETS> 13,415,713
<PER-SHARE-NAV-BEGIN> 9.42
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> (1.94)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.15
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 7.32
<EXPENSE-RATIO> 1.80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000910682
<NAME> DELAWARE GROUP ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 052
<NAME> NEW PACIFIC FUND B CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 11,672,898
<INVESTMENTS-AT-VALUE> 9,323,371
<RECEIVABLES> 0
<ASSETS-OTHER> 599,836
<OTHER-ITEMS-ASSETS> 582
<TOTAL-ASSETS> 9,923,789
<PAYABLE-FOR-SECURITIES> (85,474)
<SENIOR-LONG-TERM-DEBT> (12,672)
<OTHER-ITEMS-LIABILITIES> (34,727)
<TOTAL-LIABILITIES> (132,873)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,520,859
<SHARES-COMMON-STOCK> 339,918
<SHARES-COMMON-PRIOR> 136,335
<ACCUMULATED-NII-CURRENT> 31,125
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,137,834)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,357,488)
<NET-ASSETS> 2,533,998
<DIVIDEND-INCOME> 38,946
<INTEREST-INCOME> 214,688
<OTHER-INCOME> 0
<EXPENSES-NET> 273,844
<NET-INVESTMENT-INCOME> (20,210)
<REALIZED-GAINS-CURRENT> (992,876)
<APPREC-INCREASE-CURRENT> (1,602,519)
<NET-CHANGE-FROM-OPS> (2,615,605)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 8,912
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 319,098
<NUMBER-OF-SHARES-REDEEMED> 38,756
<SHARES-REINVESTED> 872
<NET-CHANGE-IN-ASSETS> (2,421,216)
<ACCUMULATED-NII-PRIOR> 2,413
<ACCUMULATED-GAINS-PRIOR> 101,120
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 282,844
<AVERAGE-NET-ASSETS> 1,190,014
<PER-SHARE-NAV-BEGIN> 9.68
<PER-SHARE-NII> (0.08)
<PER-SHARE-GAIN-APPREC> (1.98)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.15
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 7.47
<EXPENSE-RATIO> 2.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000910682
<NAME> DELAWARE GROUP ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 053
<NAME> NEW PACIFIC FUND C CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 11,672,898
<INVESTMENTS-AT-VALUE> 9,323,371
<RECEIVABLES> 0
<ASSETS-OTHER> 599,836
<OTHER-ITEMS-ASSETS> 582
<TOTAL-ASSETS> 9,923,789
<PAYABLE-FOR-SECURITIES> (85,474)
<SENIOR-LONG-TERM-DEBT> (12,672)
<OTHER-ITEMS-LIABILITIES> (34,727)
<TOTAL-LIABILITIES> (132,873)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,520,859
<SHARES-COMMON-STOCK> 17,635
<SHARES-COMMON-PRIOR> 7,316
<ACCUMULATED-NII-CURRENT> 31,125
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,137,834)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,357,488)
<NET-ASSETS> 129,028
<DIVIDEND-INCOME> 38,946
<INTEREST-INCOME> 214,688
<OTHER-INCOME> 0
<EXPENSES-NET> 273,844
<NET-INVESTMENT-INCOME> (20,210)
<REALIZED-GAINS-CURRENT> (992,876)
<APPREC-INCREASE-CURRENT> (1,602,519)
<NET-CHANGE-FROM-OPS> (2,615,605)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 761
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 16,227
<NUMBER-OF-SHARES-REDEEMED> 3,309
<SHARES-REINVESTED> 80
<NET-CHANGE-IN-ASSETS> (2,421,216)
<ACCUMULATED-NII-PRIOR> 2,413
<ACCUMULATED-GAINS-PRIOR> 101,120
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 282,844
<AVERAGE-NET-ASSETS> 79,794
<PER-SHARE-NAV-BEGIN> 9.49
<PER-SHARE-NII> (0.08)
<PER-SHARE-GAIN-APPREC> (1.94)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.15
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 7.32
<EXPENSE-RATIO> 2.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000910682
<NAME> DELAWARE GROUP ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 054
<NAME> NEW PACIFIC FUND INSTITUTIONAL CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 11,672,898
<INVESTMENTS-AT-VALUE> 9,323,371
<RECEIVABLES> 0
<ASSETS-OTHER> 599,836
<OTHER-ITEMS-ASSETS> 582
<TOTAL-ASSETS> 9,923,789
<PAYABLE-FOR-SECURITIES> (85,474)
<SENIOR-LONG-TERM-DEBT> (12,672)
<OTHER-ITEMS-LIABILITIES> (34,727)
<TOTAL-LIABILITIES> (132,873)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,520,859
<SHARES-COMMON-STOCK> 33,011
<SHARES-COMMON-PRIOR> 9,000
<ACCUMULATED-NII-CURRENT> 31,125
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1,137,834)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,357,488)
<NET-ASSETS> 250,107
<DIVIDEND-INCOME> 38,946
<INTEREST-INCOME> 214,688
<OTHER-INCOME> 0
<EXPENSES-NET> 273,844
<NET-INVESTMENT-INCOME> (20,210)
<REALIZED-GAINS-CURRENT> (992,876)
<APPREC-INCREASE-CURRENT> (1,602,519)
<NET-CHANGE-FROM-OPS> (2,615,605)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 370
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 119,458
<NUMBER-OF-SHARES-REDEEMED> 98,419
<SHARES-REINVESTED> 39
<NET-CHANGE-IN-ASSETS> (2,421,216)
<ACCUMULATED-NII-PRIOR> 2,413
<ACCUMULATED-GAINS-PRIOR> 101,120
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 282,844
<AVERAGE-NET-ASSETS> 83,049
<PER-SHARE-NAV-BEGIN> 9.53
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> (1.96)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.15
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 7.44
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000910682
<NAME> DELAWARE GROUP ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 041
<NAME> OVERSEAS EQUITY FUND A CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 11,277,619
<INVESTMENTS-AT-VALUE> 12,510,316
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 18,000
<TOTAL-ASSETS> 12,528,316
<PAYABLE-FOR-SECURITIES> (10,000)
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 315
<TOTAL-LIABILITIES> (9,685)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,101,449
<SHARES-COMMON-STOCK> 868,395
<SHARES-COMMON-PRIOR> 1,257,748
<ACCUMULATED-NII-CURRENT> 530,298
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,673,548
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,232,706
<NET-ASSETS> 10,868,180
<DIVIDEND-INCOME> 36,511
<INTEREST-INCOME> 187,417
<OTHER-INCOME> 0
<EXPENSES-NET> 308,760
<NET-INVESTMENT-INCOME> (84,832)
<REALIZED-GAINS-CURRENT> 2,291,320
<APPREC-INCREASE-CURRENT> (584,515)
<NET-CHANGE-FROM-OPS> 1,621,973
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 522,689
<DISTRIBUTIONS-OF-GAINS> 396,523
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 196,269
<NUMBER-OF-SHARES-REDEEMED> 607,946
<SHARES-REINVESTED> 79,030
<NET-CHANGE-IN-ASSETS> (3,951,872)
<ACCUMULATED-NII-PRIOR> (85,926)
<ACCUMULATED-GAINS-PRIOR> 355,708
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 308,760
<AVERAGE-NET-ASSETS> 15,044,265
<PER-SHARE-NAV-BEGIN> 12.39
<PER-SHARE-NII> (0.06)
<PER-SHARE-GAIN-APPREC> 0.96
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.77
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.52
<EXPENSE-RATIO> 1.80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000910682
<NAME> DELAWARE GROUP ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 042
<NAME> OVERSEAS EQUITY FUND B CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 11,277,619
<INVESTMENTS-AT-VALUE> 12,510,316
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 18,000
<TOTAL-ASSETS> 12,528,316
<PAYABLE-FOR-SECURITIES> (10,000)
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 315
<TOTAL-LIABILITIES> (9,685)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,101,449
<SHARES-COMMON-STOCK> 125,707
<SHARES-COMMON-PRIOR> 118,245
<ACCUMULATED-NII-CURRENT> 530,298
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,673,548
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,232,706
<NET-ASSETS> 1,450,365
<DIVIDEND-INCOME> 36,511
<INTEREST-INCOME> 187,417
<OTHER-INCOME> 0
<EXPENSES-NET> 308,760
<NET-INVESTMENT-INCOME> (84,832)
<REALIZED-GAINS-CURRENT> 2,291,320
<APPREC-INCREASE-CURRENT> (584,515)
<NET-CHANGE-FROM-OPS> 1,621,973
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 46,161
<DISTRIBUTIONS-OF-GAINS> 35,183
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 32,677
<NUMBER-OF-SHARES-REDEEMED> 18,445
<SHARES-REINVESTED> 6,991
<NET-CHANGE-IN-ASSETS> (3,951,872)
<ACCUMULATED-NII-PRIOR> (85,926)
<ACCUMULATED-GAINS-PRIOR> 355,708
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 308,760
<AVERAGE-NET-ASSETS> 1,359,876
<PER-SHARE-NAV-BEGIN> 11.56
<PER-SHARE-NII> (0.14)
<PER-SHARE-GAIN-APPREC> 0.89
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.77
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.54
<EXPENSE-RATIO> 2.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000910682
<NAME> DELAWARE GROUP ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 043
<NAME> OVERSEAS EQUITY FUND C CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 11,277,619
<INVESTMENTS-AT-VALUE> 12,510,316
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 18,000
<TOTAL-ASSETS> 12,528,316
<PAYABLE-FOR-SECURITIES> (10,000)
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 315
<TOTAL-LIABILITIES> (9,685)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,101,449
<SHARES-COMMON-STOCK> 13,799
<SHARES-COMMON-PRIOR> 10,730
<ACCUMULATED-NII-CURRENT> 530,298
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,673,548
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,232,706
<NET-ASSETS> 159,444
<DIVIDEND-INCOME> 36,511
<INTEREST-INCOME> 187,417
<OTHER-INCOME> 0
<EXPENSES-NET> 308,760
<NET-INVESTMENT-INCOME> (84,832)
<REALIZED-GAINS-CURRENT> 2,291,320
<APPREC-INCREASE-CURRENT> (584,515)
<NET-CHANGE-FROM-OPS> 1,621,973
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 4,286
<DISTRIBUTIONS-OF-GAINS> 3,252
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,181
<NUMBER-OF-SHARES-REDEEMED> 4,765
<SHARES-REINVESTED> 702
<NET-CHANGE-IN-ASSETS> (3,951,872)
<ACCUMULATED-NII-PRIOR> (85,926)
<ACCUMULATED-GAINS-PRIOR> 355,708
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 308,760
<AVERAGE-NET-ASSETS> 133,455
<PER-SHARE-NAV-BEGIN> 11.58
<PER-SHARE-NII> (0.14)
<PER-SHARE-GAIN-APPREC> 0.88
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.77
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.55
<EXPENSE-RATIO> 2.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000910682
<NAME> DELAWARE GROUP ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 044
<NAME> OVERSEAS EQUITY FUND INSTITUTIONAL CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 11,277,619
<INVESTMENTS-AT-VALUE> 12,510,316
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 18,000
<TOTAL-ASSETS> 12,528,316
<PAYABLE-FOR-SECURITIES> (10,000)
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 315
<TOTAL-LIABILITIES> (9,685)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9,101,449
<SHARES-COMMON-STOCK> 4,810
<SHARES-COMMON-PRIOR> 4,113
<ACCUMULATED-NII-CURRENT> 530,298
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1,673,548
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,232,706
<NET-ASSETS> 60,012
<DIVIDEND-INCOME> 36,511
<INTEREST-INCOME> 187,417
<OTHER-INCOME> 0
<EXPENSES-NET> 308,760
<NET-INVESTMENT-INCOME> (84,832)
<REALIZED-GAINS-CURRENT> 2,291,320
<APPREC-INCREASE-CURRENT> (584,515)
<NET-CHANGE-FROM-OPS> 1,621,973
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 809
<DISTRIBUTIONS-OF-GAINS> 610
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,181
<NUMBER-OF-SHARES-REDEEMED> 26,488
<SHARES-REINVESTED> 123
<NET-CHANGE-IN-ASSETS> (3,951,872)
<ACCUMULATED-NII-PRIOR> (85,926)
<ACCUMULATED-GAINS-PRIOR> 355,708
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 308,760
<AVERAGE-NET-ASSETS> 53,699
<PER-SHARE-NAV-BEGIN> 12.32
<PER-SHARE-NII> (0.02)
<PER-SHARE-GAIN-APPREC> 0.95
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 0.77
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.48
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000910682
<NAME> DELAWARE GROUP ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 031
<NAME> U.S. GROWTH FUND A CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 23,771,112
<INVESTMENTS-AT-VALUE> 26,654,629
<RECEIVABLES> 1,150,000
<ASSETS-OTHER> 18,794
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27,823,423
<PAYABLE-FOR-SECURITIES> 343,374
<SENIOR-LONG-TERM-DEBT> 88,000
<OTHER-ITEMS-LIABILITIES> 98,235
<TOTAL-LIABILITIES> 529,609
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,653,580
<SHARES-COMMON-STOCK> 416,442
<SHARES-COMMON-PRIOR> 1,483,488
<ACCUMULATED-NII-CURRENT> (91,868)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,848,585
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,883,517
<NET-ASSETS> 6,933,484
<DIVIDEND-INCOME> 92,008
<INTEREST-INCOME> 257,988
<OTHER-INCOME> 0
<EXPENSES-NET> 441,864
<NET-INVESTMENT-INCOME> (91,868)
<REALIZED-GAINS-CURRENT> 10,854,607
<APPREC-INCREASE-CURRENT> (830,970)
<NET-CHANGE-FROM-OPS> 9,931,769
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1,626,328
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 708,527
<NUMBER-OF-SHARES-REDEEMED> 1,584,408
<SHARES-REINVESTED> 125,787
<NET-CHANGE-IN-ASSETS> 308,750
<ACCUMULATED-NII-PRIOR> (77,857)
<ACCUMULATED-GAINS-PRIOR> 1,806,960
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 441,864
<AVERAGE-NET-ASSETS> 17,448,429
<PER-SHARE-NAV-BEGIN> 13.82
<PER-SHARE-NII> (0.06)
<PER-SHARE-GAIN-APPREC> 4.25
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 1.36
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 16.65
<EXPENSE-RATIO> 1.44
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000910682
<NAME> DELAWARE GROUP ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 032
<NAME> U.S. GROWTH FUND B CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 23,771,112
<INVESTMENTS-AT-VALUE> 26,654,629
<RECEIVABLES> 1,150,000
<ASSETS-OTHER> 18,794
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27,823,423
<PAYABLE-FOR-SECURITIES> 343,374
<SENIOR-LONG-TERM-DEBT> 88,000
<OTHER-ITEMS-LIABILITIES> 98,235
<TOTAL-LIABILITIES> 529,609
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,653,580
<SHARES-COMMON-STOCK> 101,669
<SHARES-COMMON-PRIOR> 81,033
<ACCUMULATED-NII-CURRENT> (91,868)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,848,585
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,883,517
<NET-ASSETS> 1,653,169
<DIVIDEND-INCOME> 92,008
<INTEREST-INCOME> 257,988
<OTHER-INCOME> 0
<EXPENSES-NET> 441,864
<NET-INVESTMENT-INCOME> (91,868)
<REALIZED-GAINS-CURRENT> 10,854,607
<APPREC-INCREASE-CURRENT> (830,970)
<NET-CHANGE-FROM-OPS> 9,931,769
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 85,057
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 52,772
<NUMBER-OF-SHARES-REDEEMED> 17,225
<SHARES-REINVESTED> 6,677
<NET-CHANGE-IN-ASSETS> 308,750
<ACCUMULATED-NII-PRIOR> (77,857)
<ACCUMULATED-GAINS-PRIOR> 1,806,960
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 441,864
<AVERAGE-NET-ASSETS> 1,172,085
<PER-SHARE-NAV-BEGIN> 13.61
<PER-SHARE-NII> (0.16)
<PER-SHARE-GAIN-APPREC> 4.17
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 1.36
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 16.26
<EXPENSE-RATIO> 2.14
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000910682
<NAME> DELAWARE GROUP ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 033
<NAME> U.S. GROWTH FUND C CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 23,771,112
<INVESTMENTS-AT-VALUE> 26,654,629
<RECEIVABLES> 1,150,000
<ASSETS-OTHER> 18,794
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27,823,423
<PAYABLE-FOR-SECURITIES> 343,374
<SENIOR-LONG-TERM-DEBT> 88,000
<OTHER-ITEMS-LIABILITIES> 98,235
<TOTAL-LIABILITIES> 529,609
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,653,580
<SHARES-COMMON-STOCK> 14,835
<SHARES-COMMON-PRIOR> 7,066
<ACCUMULATED-NII-CURRENT> (91,868)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,848,585
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,883,517
<NET-ASSETS> 252,461
<DIVIDEND-INCOME> 92,008
<INTEREST-INCOME> 257,988
<OTHER-INCOME> 0
<EXPENSES-NET> 441,864
<NET-INVESTMENT-INCOME> (91,868)
<REALIZED-GAINS-CURRENT> 10,854,607
<APPREC-INCREASE-CURRENT> (830,970)
<NET-CHANGE-FROM-OPS> 9,931,769
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 5,841
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 13,752
<NUMBER-OF-SHARES-REDEEMED> 3,236
<SHARES-REINVESTED> 429
<NET-CHANGE-IN-ASSETS> 308,750
<ACCUMULATED-NII-PRIOR> (77,857)
<ACCUMULATED-GAINS-PRIOR> 1,806,960
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 441,864
<AVERAGE-NET-ASSETS> 128,392
<PER-SHARE-NAV-BEGIN> 14.18
<PER-SHARE-NII> (0.17)
<PER-SHARE-GAIN-APPREC> 4.37
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 1.36
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 17.02
<EXPENSE-RATIO> 2.14
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000910682
<NAME> DELAWARE GROUP ADVISER FUNDS, INC.
<SERIES>
<NUMBER> 034
<NAME> U.S. GROWTH FUND INSTITUTIONAL CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 23,771,112
<INVESTMENTS-AT-VALUE> 26,654,629
<RECEIVABLES> 1,150,000
<ASSETS-OTHER> 18,794
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 27,823,423
<PAYABLE-FOR-SECURITIES> 343,374
<SENIOR-LONG-TERM-DEBT> 88,000
<OTHER-ITEMS-LIABILITIES> 98,235
<TOTAL-LIABILITIES> 529,609
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 13,653,580
<SHARES-COMMON-STOCK> 1,094,399
<SHARES-COMMON-PRIOR> 956,199
<ACCUMULATED-NII-CURRENT> (91,868)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,848,585
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,883,517
<NET-ASSETS> 18,454,700
<DIVIDEND-INCOME> 92,008
<INTEREST-INCOME> 257,988
<OTHER-INCOME> 0
<EXPENSES-NET> 441,864
<NET-INVESTMENT-INCOME> (91,868)
<REALIZED-GAINS-CURRENT> 10,854,607
<APPREC-INCREASE-CURRENT> (830,970)
<NET-CHANGE-FROM-OPS> 9,931,769
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1,003,161
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 492,699
<NUMBER-OF-SHARES-REDEEMED> 193,024
<SHARES-REINVESTED> 76,989
<NET-CHANGE-IN-ASSETS> 308,750
<ACCUMULATED-NII-PRIOR> (77,857)
<ACCUMULATED-GAINS-PRIOR> 1,806,960
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 441,864
<AVERAGE-NET-ASSETS> 14,215,721
<PER-SHARE-NAV-BEGIN> 13.94
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> 4.29
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 1.36
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 16.86
<EXPENSE-RATIO> 1.14
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>

EX-99.B19
Exhibit 24(b)(19)

POWER OF ATTORNEY

Each of the undersigned, a member of the Boards of Directors/Trustees
of the Delaware Group Funds listed on Exhibit A to this Power of Attorney,
hereby constitutes and appoints on behalf of each of the Funds listed on Exhibit
A, Wayne A. Stork, Jeffrey J. Nick and Walter P. Babich and any one of them
acting singly, his true and lawful attorneys-in-fact, in his name, place, and
stead, to execute and cause to be filed with the Securities and Exchange
Commission and other federal or state government agency or body, such
registration statements, and any and all amendments thereto as either of such
designees may deem to be appropriate under the Securities Act of 1933, as
amended, the Investment Company Act of 1940, as amended, and all other
applicable federal and state securities laws.

IN WITNESS WHEREOF, the undersigned have executed this instrument as of
this 18th day of December, 1997.

/s/ Walter P. Babich /s/ Thomas F. Madison
- ----------------------------- ---------------------------
Walter P. Babich Thomas F. Madison

/s/Anthony D. Knerr /s/Jeffrey J. Nick
- ----------------------------- ---------------------------
Anthony D. Knerr Jeffrey J. Nick

/s/Ann R. Leven /s/Charles E. Peck
- ----------------------------- ---------------------------
Ann R. Leven Charles E. Peck

/s/W. Thacher Longstreth /s/Wayne A. Stork
- ----------------------------- ---------------------------
W. Thacher Longstreth Wayne A. Stork

<PAGE>

POWER OF ATTORNEY

EXHIBIT A
DELAWARE GROUP FUNDS

DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP FOUNDATION FUNDS
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
VOYAGEUR TAX FREE FUNDS, INC.
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.