DELAWARE GROUP ADVISER FUNDS INC /MD/, 497, 1999-03-10

DELAWARE GROUP ADVISER FUNDS INC /MD/
497, 1999-03-10

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<PAGE>
DELAWARE
INVESTMENTS
- -----------
Philadelphia o London

U.S. Growth Fund
Class A o Class B o Class C
Prospectus March 1, 1999

Growth of Capital Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.

<PAGE>

Table of contents

- --------------------------------------------
Fund profile page 2
U.S. Growth Fund 2

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

How we manage the Fund page 4
Our investment strategies 4
The risks of investing in the Fund 6

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

Who manages the Fund page 10
Investment manager and sub-adviser 10
Portfolio manager 10
Fund adminstration (Who's who) 11

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

About your account page 12
Investing in the Fund 12
Choosing a share class 12
How to reduce your sales charge 15
How to buy shares 16
Retirement plans 17
How to redeem shares 18
Account minimum 19
Special services 20
Dividends, distributions and taxes 21

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

Implementation of investment
objectives and policies page 22

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

Certain management considerations page 29

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

Financial information page 30

1
<PAGE>

Profile: U.S. Growth Fund

What is the Fund's goal?
U.S. Growth Fund seeks maximum capital appreciation. Although the Fund
will strive to achieve its investment goal, there is no assurance that it
will.

What are the Fund's main investment strategies? We invest primarily in stocks of
companies of all sizes. We look for stocks with low dividend yields, strong
balance sheets and high expected earnings growth rates as compared to other
companies in the same industry. Our strategy is to identify companies whose
earning are expected to grow faster than the U.S. economy in general. Whether
companies provide dividend income and how much income they provide will not be a
primary factor in the Fund's selection decisions.

What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease according to changes
in the value of the Fund's investments. This Fund will be particularly affected
by changes in stock prices, which tend to fluctuate more than bond prices. Stock
prices may be negatively affected by declines in the stock market or poor
performance in specific industries or companies. Stocks of companies with high
growth expectations may be more susceptible to price declines if they do not
meet those high expectations. For a more complete discussion of risk, please
turn to page 6.

An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.

Who should invest in the Fund

o Investors with long-term financial goals.

o Investors looking for capital growth potential.

o Investors looking for a fund that can be a complement to income-producing or
value-oriented investments.

Who should not invest in the Fund

o Investors with short-term financial goals.

o Investors who are unwilling to accept share prices that may fluctuate,
sometimes significantly, over the short term.

o Investors whose primary goal is to receive current income.

How has the U.S. Growth Fund performed?
- --------------------------------------------------------------------------------

This bar chart can help you evaluate the potential risks of investing in the
Fund. We show how returns for the Fund's Class A shares have varied over the
past five calendar years, as well as average annual returns of all shares for
the one and five years and since inception, if applicable. The Fund's past
performance does not necessarily indicate how it will perform in the future. The
Class' returns reflect voluntary expense caps. The returns would be lower
without the voluntary caps.

<PAGE>

[BAR CHART APPEARS HERE]

- --------------------------------------------------------------------------------
Year-by-year total return (Class A)

1994 1995 1996 1997 1998
- -3.39% 23.94% 19.56% 30.93% 29.57%

As of December 31, 1998, the Fund had a year-to-date return of 29.57%. During
the periods illustrated in this bar chart, the Fund's highest return was 25.89%
for the quarter ended December 31,1998 and its lowest return was -14.21% for the
quarter ended September 30, 1998.

The maximum Class A sales charge of 5.75%, which is normally deducted when you
purchase shares, is not reflected in the total returns above. If this fee were
included, the returns would be less than those shown. The average annual returns
shown on page 3 do include the sales charge.

2
<PAGE>
How has the U.S. Growth Fund performed? (continued)
- --------------------------------------------------------------------------------
Average annual returns for periods ending 12/31/98
<TABLE>
<CAPTION>
CLASS A B C
(if redeemed)* (if redeemed)* S&P 500
Inception 12/3/93 Inception 3/29/94 Inception 5/23/94 Index**
<S> <C> <C> <C> <C>
1 year 22.09% 23.53% 27.99% 28.60%
5 years 18.02% N/A N/A 24.05%
Lifetime** 17.80% 19.56% 21.65% 23.91%
</TABLE>

The table above shows the Fund's average annual returns over various time
periods compared to the performance of the S&P 500 Index. You should
remember that unlike the Fund, the index is unmanaged and doesn't reflect
the actual costs of operating a mutual fund, such as the costs of buying,
selling, and holding the securities.

* If redeemed at end of period shown. If shares were not redeemed, the returns
for Class B would be 28.53% and 19.77% for the one-year and lifetime
periods, respectively. Returns for Class C would be 28.99% and 21.65% for
the one-year and lifetime periods, respectively.

** Lifetime returns are shown if the Fund or Class existed for less than 10
years. S&P 500 returns are for Class A lifetime. S&P 500 returns for Class B
and Class C lifetimes were 26.49% and 26.77%, respectively. Maximum sales
charges are included in the Fund returns above.
<PAGE>
<TABLE>
<CAPTION>
What are the Fund's fees and expenses? CLASS A B C
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales charges are fees paid directly Maximum sales charge (load) imposed on
from your investments when you buy or purchases as a percentage of offering price 5.75% none none
sell shares of the Fund. The Fund may
waive or reduce sales charges; please Maximum contingent deferred sales charge (load)
see the Statement of Additional as a percentage of original purchase price or
Information for details. redemption price, whichever is lower none(1) 5%(2) 1%(3)

Maximum sales charge (load) imposed on
reinvested dividends none none none

Redemption fees none none none

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

Annual fund operating expenses are Management fees 0.70% 0.70% 0.70%
deducted from the Fund's assets before
it pays dividends and before its net Distribution and service (12b-1) fees 0.30%(4) 1.00% 1.00%
asset value and total return are
calculated. We will not charge you Other expenses 0.49% 0.49% 0.49%
separately for these expenses. These
expenses are based on amounts incurred Total operating expenses 1.49% 2.19% 2.19%
during the Fund's most recent fiscal
year.
</TABLE>

CLASS(6) A B B C C
(if redeemed) (if redeemed)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
This example is intended to help you 1 year $718 $222 $722 $222 $322
compare the cost of investing in the
Fund to the cost of investing in other 3 years $1,019 $685 $985 $685 $685
mutual funds with similar investment
objectives. We show the cumulative 5 years $1,341 $1,175 $1,375 $1,175 $1,175
amount of Fund expenses on a
hypothetical investment of $10,000 10 years $2,252 $2,347 $2,347 $2,524 $2,524
with an annual 5% return over the time
shown.5 This is an example only, and
does not represent future expenses,
which may be greater or less than
those shown here.
</TABLE>
(1) A purchase of Class A shares of $1 million or more may be made at net asset
value. However, if you buy the shares through a financial adviser who is
paid a commission, a contingent deferred sales charge will apply to certain
redemptions. Additional Class A purchase options that involve a contingent
deferred sales charge may be permitted from time to time and will be
disclosed in the prospectus if they are available.
(2) If you redeem Class B shares during the first year after you buy them, you
will pay a contingent deferred sales charge of 5%, which declines to 4%
during the second year, 3% during the third and fourth years, 2% during the
fifth year, 1% during the sixth year, and 0% thereafter.
(3) Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.
(4) 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%.
(5) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show.
(6) The Class B example reflects the conversion of Class B shares to Class A
shares after approximately eight years. Information for the ninth and tenth
years reflects expenses of the Class A shares.

3
<PAGE>

How we manage the Fund

Our investment strategies

U.S. Growth Fund's investment goal 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.

We take a disciplined approach to investing, combining
investment strategies and risk management techniques
that can help shareholders meet their goals.

We will seek investments in companies of all sizes that we believe 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 of such companies will be only an incidental
consideration of the Fund.

We intend to invest primarily in common stocks that we think have appreciation
potential. However, common stock is not always the class of security that
provides the greatest possibility for appreciation. We may invest up to 35% of
its assets in debt securities, bonds, convertible bonds, preferred stock and
convertible preferred stock. We 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 we believe that 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 "The risks of
investing in the Fund," on page 6 for a description of the risks inherent in
such securities.

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

How to use
this glossary
<TABLE>
<CAPTION>

<S> <C> <C> <C>
Words found in the glossary
are printed in boldface only Glossary A-B Amortized cost Average maturity
the first time they appear in -----------------------------------------------------------------------------
the prospectus. So if you Amortized cost is a method used to value An average of when the
would like to know the a fixed-income security that starts with individual bonds and other
meaning of a word that isn't the face value of the security and then debt securities held in a
in boldface, you might still adds or subtracts from that value portfolio will mature.
find it in the glossary. depending on whether the purchase price
was greater or less than the value of the
security at maturity. The amount greater
or less than the par value is divided
equally over the time remaining until
maturity.
</TABLE>

4
<PAGE>
Certain Investment Guidelines

Illiquid securities Up to 10% of the assets of the Fund may be invested in
securities that are not readily marketable, including:

o repurchase agreements with maturities greater than seven calendar days;

o time deposits maturing in more than seven calendar days;

o certain instruments, futures contracts and options on them for which there is
no liquid secondary market; w certain over-the-counter options, as described
in the Statement of Additional Information;

o certain variable rate demand notes having a demand period of more than seven
days; and

o certain Rule 144A restricted securities. Rule 144A Securities are securities
which are eligible for resale only to certain institutional investors. Rule
144A securities for which a dealer or institutional market exists will not be
considered illiquid.

Restricted securities Restricted securities are securities with legal or
contractual restrictions on resale. Restricted securities eligible for resale
under Rule 144A that have a readily available market will not be considered
illiquid for purposes of the Fund's investment restriction concerning illiquid
securities.

Other guidelines In addition, the 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. The Fund may also borrow from banks for temporary or other
emergency purposes, but not for investment purposes. The Fund may borrow 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 the 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. These restrictions are called "Non-fundamental restrictions." A
complete list of investment restrictions that identifies additional restrictions
that cannot be changed without the approval of a majority of the Fund's
outstanding shares, as well as other non-fundamental restrictions, is contained
in the Statement of Additional Information.

<TABLE>
<CAPTION>
Bond Bond ratings
- --------------------------------------------------------------------------------------------------
<S> <C>
A debt security, like an IOU, issued by a Independent evaluations of creditworthiness,
company, municipality or government ranging from Aaa/AAA (highest quality) to D
agency. In return for lending money to (lowest quality). Bonds rated Baa/BBB or
the issuer, a bond buyer generally better are considered investment grade.
receives fixed periodic interest payments Bonds rated Ba/BB or lower are commonly
and repayment of the loan amount on a known as junk bonds. See also Nationally
specified maturity date. A bond's price recognized statistical rating organization.
changes prior to maturity and is
inversely related to current interest
rates. When interest rates rise, bond
prices fall, and when interest rates
fall, bond prices rise.
</TABLE>

<PAGE>
How we manage the Fund (continued)

The risks of investing
in the Fund

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- -------------------------------------------------------------------------------------------------------------------------------
U.S. Growth Fund
<S> <C>
Market risk is the risk that all or a majority of We maintain a long-term investment approach and
the securities in a certain market -- like the focus on stocks we believe can appreciate over an
stock or bond market -- will decline in value extended time frame regardless of interim market
because of factors such as economic conditions, fluctuations. We do not try to predict overall
future expectations or investor confidence. stock market movements and do not trade for
short-term purposes.

We may hold a substantial part of the Fund's
assets in cash or cash equivalents as a temporary,
defensive strategy.

Industry and security risk is the risk that the We limit the amount of U.S. Growth Fund's assets
value of securities in a particular industry or invested in any one industry and in any individual
the value of an individual stock or bond will security.
decline because of changing expectations for the
performance of that industry or for the individual
company issuing the stock or bond.

Foreign risk is the risk that foreign securities We are permitted to invest up to 20% of the Fund's
may be adversely affected by political portfolio in foreign securities. When we do
instability, changes in currency exchange rates, purchase foreign securities, they are generally
foreign economic conditions or inadequate American Depositary Receipts which are denominated
regulatory and accounting standards. in U.S. dollars and traded on U.S. stock
exchanges.

Liquidity risk is the possibility that securities We limit exposure to illiquid securities.
cannot be readily sold, if at all, at
approximately the price that the Fund values them.

Credit risk is the possibility that a bond's We limit the amount of high-yield bonds in the
issuer (or an entity that insures the bond) will portfolio to 10% of net assets. When we do invest
be unable to make timely payments of interest and in high-yield bonds, we typically invest primarily
principal. in bonds rated lower than Baa by Moody's or BBB by
S&P. This limitation, combined with our careful,
credit-oriented bond selection and our commitment
to hold a diversified selection of high-yield
bonds are designed to manage this risk.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
C-C Capital Capital appreciation Capital gains distributions Commission
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The amount of money you An increase in the value of Payments to mutual fund The fee an investor pays to
invest. an investment. shareholders of profits (realized a financial adviser for
gains) from the sale of a investment advice and help
fund's portfolio securities. in buying or selling mutual
Usually paid once a year; funds, stocks, bonds or
may be either short-term other securities.
gains or long-term gains.
</TABLE>

6
<PAGE>
Additional information on risk factors

Fixed-income
securities

To the extent that the Fund is invested in fixed-income securities (for example,
bonds), the Fund's total return will be sensitive to interest rates. This is
because when interest rates rise, the prices of fixed-income securities tend to
fall, and when interest rates fall, the prices of fixed-income securities tend
to rise.

In addition, fixed-income securities purchased by the Fund that are rated in the
lowest of the top four credit 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 debt
securities.

Borrowing

The Fund may borrow money for temporary or emergency purposes in amounts not in
excess of one-third of its total assets. If the Fund borrows money, its share
price may be subject to greater fluctuation until the borrowing is repaid. If
the Fund makes additional investments while borrowings are outstanding, this may
be construed as a form of leverage.

Securities lending

The 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. The 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
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, the 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.

<TABLE>
<CAPTION>
Compounding Consumer Price Index (CPI) Contingent deferred sales charge (CDSC) Corporate bond
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Earnings on an Measurement of U.S. Fee charged by some mutual funds A debt security
investment's inflation; represents when shares are redeemed (sold back issued by a
previous earnings. the price of a basket to the fund) within a set number of corporation.
of commonly purchased goods. years; an alternative method for See bond.
investors to compensate a financial
adviser for advice and service,
rather than an up-front commission.
</TABLE>
7
<PAGE>
Temporary defensive
position

Portfolio turnover

High turnover in the 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.

* * *

For additional information about the 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. The Statement of Additional Information provides
more information concerning the Fund's investment policies, restrictions and
risk factors.

<TABLE>
<CAPTION>
D-F Depreciation Diversification Dividend distribution
---------------------------------------------------------------------------------------------------
<S> <C> <C>
A decline in an The process of spreading investments Payments to mutual fund
investment's value. among a number of different securities, shareholders of dividends
asset classes or investment styles to passed along from the fund's
reduce the risks of investing. portfolio of securities.
</TABLE>

<PAGE>

Who manages the Fund

Investment manager
and sub-adviser

The Fund is managed by Delaware Management Company, a series of Delaware
Management Business Trust, which is an indirect, wholly owned subsidiary of
Delaware Management Holdings, Inc. Lynch & Mayer, Inc. is the Fund's
sub-adviser. As sub-adviser, Lynch & Mayer is responsible for day-to-day
management of the Fund's assets. Delaware Management Company administers the
Fund's affairs and has ultimate responsibility for all investment advisory
services for the Fund. Delaware Management Company also supervises the
sub-adviser's performance. For their services to the Fund, the manager and
sub-adviser were paid an aggregate fee for the last fiscal year as follows:

Investment Management Fees

U.S. Growth Fund
As a percentage of average daily net assets 0.70%

Portfolio
managers

Frank Houghton and Rufus Winton have primary responsibility for making
investment decisions for U.S. Growth Fund. When making decisions for the
Fund, Mr. Houghton and Mr. Winton regularly consult with the Lynch & Mayer
investment team and Edward J. Petner.

Frank Houghton, Senior Vice President and Portfolio Manager, joined Lynch &
Mayer in 1990. Prior to joining Lynch & Mayer, Mr. Houghton was Chairman of
BMI Capital from 1984 to 1990, a Portfolio Manager at Neuberger & Berman from
1977 to 1984 and a Partner at Oppenheimer & Co., Inc from 1969-1977. Mr.
Houghton received a BBA from Manhattan College and attended New York
University Graduate School of Business Administration.

Rufus Winton, Senior Vice President and Equity Analyst, joined Lynch & Mayer
in 1993. Prior to joining Lynch & Mayer, Mr. Winton was a Planning Analyst at
Northwest Airlines, Inc., Director of Business Development at Postal
Automation Inc. and a Manager in Mortgage-Backed Securities Sales at Citicorp
Investment Bank. He received a BA in Economics from Connecticut College in
1982 and an MBA from Kellogg Graduate School of Management in 1991, where he
was an Amoco Scholar.

Edward J. Petner is Chief Executive Officer and Chief Financial Officer of
Lynch & Mayer. 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.

Duration
- --------
A measurement of a fixed-income investment's price volatility. The larger the
number, the greater the likely price change for a given change in interest
rates.

Expense ratio
- -------------
A mutual fund's total operating expenses, expressed as a percentage of its total
net assets. Operating expenses are the costs of running a mutual fund, including
management fees, offices, staff, equipment and expenses related to maintaining
the fund's portfolio of securities and distributing its shares. They are paid
from the fund's assets before any earnings are distributed to shareholders.

Financial adviser
- -----------------
Financial professional (e.g., broker, banker, accountant, planner or insurance
agent) who analyzes clients' finances and prepares personalized programs to meet
objectives.

Fixed-income securities
- -----------------------
With fixed-income securities, the money you originally invested is paid back at
a pre-specified maturity date. These securities, which include government,
corporate or municipal bonds, as well as money market securities, typically pay
a fixed rate of return (often referred to as interest). See Bonds.

9
<PAGE>

Who's who?

This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.

Board of Directors

Investment manager
Delaware Management Company
One Commerce Square
Philadelphia, PA 19103

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

The Fund

Sub-adviser
Lynch & Mayer, Inc.
520 Madison Avenue
New York, NY 10022

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

Service agent
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

Financial advisers

Portfolio managers
(see page 9 for details)

Shareholders

Board of directors A mutual fund is governed by a board of directors which has
oversight responsibility for the management of the fund's business affairs.
Directors establish procedures and oversee and review the performance of the
investment manager, the distributor and others that perform services for the
fund. At least 40% of the board of directors must be independent of the fund's
investment manager or distributor. These independent fund directors, in
particular, are advocates for shareholder interests.

Investment manager An investment manager is a company responsible for selecting
portfolio investments consistent with the objective and policies stated in the
mutual fund's prospectus. The investment manager places portfolio orders with
broker/dealers and is responsible for obtaining the best overall execution of
those orders. A written contract between a mutual fund and its investment
manager specifies the services the manager performs. Most management contracts
provide for the manager to receive an annual fee based on a percentage of the
fund's average daily net assets. The manager is subject to numerous legal
restrictions, especially regarding transactions between itself and the funds it
advises.

Sub-adviser A sub-adviser is a company generally responsible for the management
of the fund's assets. They are selected and supervised by the investment
manager.

Portfolio managers Portfolio managers are employed by the investment manager or
sub-adviser to make investment decisions for individual portfolios on a
day-to-day basis.

Custodian Mutual funds are legally required to protect their portfolio
securities and typically place them with a qualified bank custodian who
segregates fund securities from other bank assets.

Distributor Most mutual funds continuously offer new shares to the public
through distributors who are regulated as broker-dealers and are subject to
National Association of Securities Dealers, Inc. (NASD) rules governing mutual
fund sales practices.

<PAGE>

Service agent Mutual fund companies employ service agents (sometimes called
transfer agents) to maintain records of shareholder accounts, calculate and
disburse dividends and capital gains and prepare and mail shareholder statements
and tax information, among other functions. Many service agents also provide
customer service to shareholders.

Financial Advisers Financial advisers provide investment advice to their clients
- -- analyzing their financial objectives and recommending appropriate funds or
other investments. Financial advisers are compensated for their services,
generally through sales commissions, and through 12b-1 and/or service fees
deducted from the fund's assets.

Shareholders Like shareholders of other companies, mutual fund shareholders have
specific voting rights, including the right to elect directors. Material changes
in the terms of a fund's management contract must be approved by a shareholder
vote, and funds seeking to change fundamental investment objectives or policies
must also seek shareholder approval.

I-N

Inflation
- ---------
The increase in the cost of goods and services over time. U.S. inflation is
frequently measured by changes in the Consumer Price Index (CPI).

Investment goal
- ---------------
The objective, such as long-term capital growth or high current income, that a
mutual fund pursues.

Management fee
- --------------
The amount paid by a mutual fund to the investment adviser for management
services, expressed as an annual percentage of the fund's average daily net
assets.

10
<PAGE>

About your account

Investing in
the Fund

You can choose from a number of share classes for the Fund. Because each share
class has a different combination of sales charges, fees, and other features,
you should consult your financial adviser to determine which class best suits
your investment goals and time frame.

Choosing a share class

Class
A

o Class A shares have an up-front sales charge of up to 5.75% that you pay when
you buy the shares. The offering price for Class A shares includes the
front-end sales charge.

o If you invest $50,000 or more, your front-end sales charge will be reduced.

o You may qualify for other reduced sales charges, as described in "How to
reduce your sales charge," and under certain circumstances the sales charge
may be waived; please see the Statement of Additional Information.

o Class A shares are also subject to an annual 12b-1 fee no greater than 0.35%
(currently, no more than 0.30%) of average daily net assets, which is lower
than the 12b-1 fee for Class B and Class C shares.

o Class A shares generally are not subject to a contingent deferred sales
charge.

Class A Sales Charges
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Sales charge as % Sales charge as % of Dealer's commission as %
Amount of purchase of offering price amount invested of offering price
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 5.75% 6.09% 5.00%

$50,000 but
under $100,000 4.75% 4.96% 4.00%

$100,000 but
under $250,000 3.75% 3.92% 3.00%

$250,000 but
under $500,000 2.50% 2.52% 2.00%

$500,000 but
under $1 million 2.00% 2.00% 1.60%
- --------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

As shown below, there is no front-end sales charge when you purchase $1 million
or more of Class A shares. However, if your financial adviser is paid a
commission on your purchase, you may have to pay a limited contingent deferred
sales charge of 1% if you redeem these shares within the first year and 0.50% if
you redeem them within the second year.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Sales charge as % Sales charge as % of Dealer's commission as %
Amount of purchase of offering price amount invested of offering price
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1 million up to $5 million none none 1.00%

Next $20 million
up to $25 million none none 0.50%

Amount over $25 million none none 0.25%
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

Market capitalization
- ---------------------
The value of a corporation determined by multiplying the current market price of
a share of common stock by the number of shares held by shareholders. A
corporation with one million shares outstanding and the market price per share
of $10 has a market capitalization of $10 million.

Maturity
- --------
The length of time until a bond issuer must repay the underlying loan principal
to bondholders.

National Association of Securities Dealers (NASD)
- -------------------------------------------------
A self-regulating organization, consisting of brokerage firms (including
distributors of mutual funds), that is responsible for overseeing the actions of
its members.

11
<PAGE>

About your account (continued)

Class
B

o Class B shares have no up-front sales charge, so the full amount of your
purchase is invested in the Fund. However, you will pay a contingent deferred
sales charge if you redeem your shares within six years after you buy them.

o If you redeem Class B shares during the first year after you buy them, the
shares will be subject to a contingent deferred sales charge of 5%. The
contingent deferred sales charge is 4% during the second year, 3% during the
third and fourth years, 2% during the fifth year, 1% during the sixth year,
and 0% thereafter.

o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.

o For approximately eight years after you buy your Class B shares, they are
subject to annual 12b-1 fees no greater than 1% of average daily net assets,
of which 0.25% are service fees paid to the distributor, dealers or others for
providing services and maintaining accounts.

o Because of the higher 12b-1 fees, Class B shares have higher expenses and any
dividends paid on these shares are lower than dividends on Class A shares.

o Approximately eight years after you buy them, Class B shares automatically
convert into Class A shares with a 12b-1 fee of no more than 0.35% (currently
no more than 0.30%) Conversion may occur as late as three months after the
eighth anniversary of purchase, during which time Class B's higher 12b-1 fees
apply.

o You may purchase up to $250,000 of Class B shares at any one time. The
limitation on maximum purchases varies for retirement plans.

N-R

Nationally recognized statistical rating organization (NRSRO)
- -------------------------------------------------------------
A company that assesses the quality of bonds, commercial paper, preferred and
common stocks and municipal short-term issues, rating the probability that the
issuer of the debt will meet the scheduled interest payments and repay the
principal. Ratings are published by such companies as Moody's Investors Service
(Moody's), Standard & Poor's Corporation (S&P), Duff & Phelps, Inc. (Duff), and
Fitch Investor Services, Inc. (Fitch).

Net asset value (NAV)
- ---------------------
The daily dollar value of one mutual fund share. Equal to a fund's net assets
divided by the number of shares outstanding.

Preferred stock
- ---------------
Preferred stock has preference over common stock in the payment of dividends and
liquidation of assets. Preferred stocks also often pays dividends at a fixed
rate and is sometimes convertible into common stock.

12
<PAGE>

Class
C

o Class C shares have no up-front sales charge, so the full amount of your
purchase is invested in the Fund. However, you will pay a contingent deferred
sales charge if you redeem your shares within 12 months after you buy them.

o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.

o Class C shares are subject to an annual 12b-1 fee which may not be greater
than 1% of average daily net assets, of which 0.25% are service fees paid to
the distributor, dealers or others for providing services and maintaining
shareholder accounts.

o Because of the higher 12b-1 fees, Class C shares have higher expenses and pay
lower dividends than Class A shares.

o Unlike Class B shares, Class C shares do not automatically convert into
another class.

o You may purchase any amount less than $1,000,000 of Class C shares at any one
time. The limitation onmaximum purchases varies for retirement plans.

Each share class of the Fund has adopted a separate 12b-1 plan that allows it to
pay distribution fees for the sales and distribution of its shares. Because
these fees are paid out of the Fund's assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than
paying other types of sales charges.

Price-to-earnings ratio
- -----------------------
A measure of a stock's value calculated by dividing the current market price of
a share of stock by its annual earnings per share. A stock selling for $100 per
share with annual earnings per share of $5 has a P/E of 20.

Principal
- ---------
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.

Prospectus
- ----------
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.

Redeem
- ------
To cash in your shares by selling them back to the mutual fund.

Risk
- ----
Generally defined as variability of value; also credit risk, inflation risk,
currency and interest rate risk. Different investments involve different types
and degrees of risk.

13
<PAGE>

About your account (continued)

How to reduce your
sales charge

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Share class
Program How it works A B C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Letter of Intent Through a Letter of Intent you agree X Although the Letter of Intent and Rights of
to invest a certain amount in Accumulation do not apply to the purchase of
Delaware Investment Funds (except Class B and C shares, you can combine your
money market funds with no sales purchase of Class A shares with your
charge) over a 13-month period to purchase of B and C shares to fulfill your
qualify for reduced front-end sales Letter of Intent or qualify for Rights of
charges. Accumulation.

Rights of Accumulation You can combine your holdings or X
purchases of all funds in the
Delaware Investments family (except
money market funds with no sales
charge) as well as the holdings and
purchases of your spouse and
children under 21 to qualify for
reduced front-end sales charges.

Reinvestment of Redeemed Up to 12 months after you redeem X Not available
Shares shares, you can reinvest the
proceeds without paying a front-end
sales charge.

SIMPLE IRA, SEP IRA, These investment plans may X Not available
SARSEP, Prototype Profit qualify for reduced sales
Sharing, Pension 401(k), charges by combining the
SIMPLE 401(k), purchases of all members of the
403(b)(7), and 457 group. Members of these groups
Retirement Plans may also qualify to purchase
shares without a front-end sales
charge and a waiver of any
contingent deferred sales
charges.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

S-S

S&P 500 Index
- -------------
The Standard & Poor's 500 Composite Stock Index; an unmanaged index of 500
widely held common stocks that is often used to represent performance of the
U.S. stock market.

Sales charge
- ------------
Charge on the purchase or redemption of fund shares sold through financial
advisers. May vary with the amount invested. Typically used to compensate
advisers for advice and service provided.

SEC (Securities and Exchange Commission)
- ----------------------------------------
Federal agency established by Congress to administer the laws governing the
securities industry, including mutual fund companies.

Share classes
- -------------
Different classifications of shares; mutual fund share classes offer a variety
of sales charge choices.

14
<PAGE>

How to buy shares

[GRAPHIC OMITTED]

Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.

[GRAPHIC OMITTED]

By mail
Complete an investment slip and mail it with your check, made payable to the
fund and class of shares you wish to purchase to Delaware Investments, 1818
Market Street, Philadelphia, PA 19103-3682. If you are making an initial
purchase by mail, you must include a completed investment application (or an
appropriate retirement plan application if you are opening a retirement account)
with your check.

[GRAPHIC OMITTED]

By wire
Ask your bank to wire the amount you want to invest to First Union Bank, ABA
#031201467, Bank Account number 2014 12893 4013. Include your account number and
the name of the fund in which you want to invest. If you are making an initial
purchase by wire, you must call us so we can assign you an account number.

[GRAPHIC OMITTED]

By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that under most circumstances you are allowed to exchange only
between like classes of shares. To open an account by exchange, call the
Shareholder Service Center at 800.523.1918.

[GRAPHIC OMITTED]

Through automated shareholder services
You can purchase or exchange shares through Delaphone, our automated telephone
service, or through our web site, www.delawarefunds.com. For more information
about how to sign up for these services, call our Shareholder Service Center at
800.523.1918.

Signature guarantee
- -------------------
Certification by a bank, brokerage firm or other financial institution that a
customer's signature is valid; signature guarantees can be provided by members
of the STAMP program.

Standard Deviation
- ------------------
A measure of an investment's volatility; for mutual funds, measures how much a
fund's total return has typically varied from its historical average.

Statement of Additional Information (SAI)
- -----------------------------------------
The document serving as "Part B" of a fund's prospectus that provides more
detailed information about the fund's organization, investments, policies and
risks.

Stock
- -----
An investment that represents a share of ownership (equity) in a corporation.
Stocks are often referred to as "equities."

15
<PAGE>

About your account (continued)

How to buy shares
(continued)

Once you have completed an application, you can generally open an account with
an initial investment of $1,000 and make additional investments at any time for
as little as $100. If you are buying shares in an IRA or Roth IRA, under the
Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, or through
an Automatic Investing Plan, the minimum purchase is $250, and you can make
additional investments of only $25. The minimum for an Education IRA is $500.
The minimums vary for retirement plans other than IRAs, Roth IRAs or Education
IRAs.

The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receive your order before the close of trading on
the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a business day,
you will pay that day's closing share price which is based on the Fund's net
asset value. If we receive your order after the close of trading, you will pay
the next business day's price. A business day is any day that the New York Stock
Exchange is open for business. Currently the Exchange is closed when the
following holidays are observed: New Year's Day, Martin Luther King, Jr.'s
Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas. We reserve the right to reject any purchase
order.

We determine the Fund's net asset value (NAV) per share at the close of trading
of the New York Stock Exchange each business day that the Exchange is open. We
calculate this value by adding the market value of all the securities and assets
in the Fund's portfolio, deducting all liabilities, and dividing the resulting
number by the number of shares outstanding. The result is the net asset value
per share. We price securities and other assets for which market quotations are
available at their market value. We price fixed-income securities on the basis
of valuations provided to us by an independent pricing service that uses methods
approved by the board of directors. Any fixed-income securities that have a
maturity of less than 60 days we price at amortized cost. We price all other
securities at their fair market value using a method approved by the board of
directors.

Retirement plans

In addition to being an appropriate investment for your Individual Retirement
Account (IRA), Roth IRA and Education IRA, shares in the Fund may be suitable
for group retirement plans. You may establish your IRA account even if you are
already a participant in an employer-sponsored retirement plan. For more
information on how shares in the Fund can play an important role in your
retirement planning or for details about group plans, please consult your
financial adviser, or call 800.523.1918.

T-V

Total return
- ------------
An investment performance measurement, expressed as a percentage, based on the
combined earnings from dividends, capital gains and change in price over a given
period.

Uniform Gift to Minors Act and Uniform Transfers to Minors Act
- --------------------------------------------------------------
Federal and state laws that provide a simple way to transfer property to a minor
with special tax advantages.

Volatility
- ----------
The tendency of an investment to go up or down in value by different magnitudes.
Investments that generally go up or down in value in relatively small amounts
are considered "low volatility" investments, whereas those investments that
generally go up or down in value in relatively large amounts are considered
"high volatility" investments.

16
<PAGE>

How to redeem
shares

[GRAPHIC OMITTED]

Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.

[GRAPHIC OMITTED]

By mail
You can redeem your shares (sell them back to the fund) by mail by writing to:
Delaware Investments, 1818 Market Street, Philadelphia, PA 19103-3682. All
owners of the account must sign the request, and for redemptions of $50,000 or
more, you must include a signature guarantee for each owner. Signature
guarantees are also required when redemption proceeds are going to an address
other than the address of record on an account.

[GRAPHIC OMITTED]

By telephone
You can redeem up to $50,000 of your shares by telephone. You may have the
proceeds sent to you by check, or if you redeem at least $1,000 of shares, you
may have the proceeds sent directly to your bank by wire. Bank information must
be on file before you request a wire redemption.

[GRAPHIC OMITTED]

By wire
You can redeem $1,000 or more of your shares and have the proceeds deposited
directly to your bank account the next business day after we receive your
request. If you request a wire deposit, the First Union Bank fee (currently
$7.50) will be deducted from your proceeds. Bank information must be on file
before you request a wire redemption.

[GRAPHIC OMITTED]

Through automated shareholder services
You can redeem shares through Delaphone, our automated telephone service, or
through our web site, www.delawarefunds.com. For more information about how to
sign up for these services, call our Shareholder Service Center at 800.523.1918.

17
<PAGE>

About your account (continued)

How to redeem shares
(continued)

If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.

When you send us a properly completed request to redeem or exchange shares, you
will receive the net asset value as determined on the business day we receive
your request. We will deduct any applicable contingent deferred sales charges.
You may also have to pay taxes on the proceeds from your sale of shares. We will
send you a check, normally the next business day, but no later than seven days
after we receive your request to sell your shares. If you purchased your shares
by check, we will wait until your check has cleared, which can take up to 15
days, before we send your redemption proceeds.

If you are required to pay a contingent deferred sales charge when you redeem
your shares, the amount subject to the fee will be based on the shares' net
asset value when you purchased them or their net asset value when you redeem
them, whichever is less. This arrangement assures that you will not pay a
contingent deferred sales charge on any increase in the value of your shares.
You also will not pay the charge on any shares acquired by reinvesting dividends
or capital gains. If you exchange shares of one fund for shares of another, you
do not pay a contingent deferred sales charge at the time of the exchange. If
you later redeem those shares, the purchase price for purposes of the contingent
deferred sales charge formula will be the price you paid for the original
shares, not the exchange price. The redemption price for purposes of this
formula will be the NAV of the shares you are actually redeeming.

Account minimum

If you redeem shares and your account balance falls below the required account
minimum of $1,000 ($250 for IRAs, Uniform Gift to Minors Act accounts or
accounts with automatic investing plans, $500 for Education IRAs) for three or
more consecutive months, you will have until the end of the current calendar
quarter to raise the balance to the minimum. If your account is not at the
minimum by the required time, you will be charged a $9 fee for that quarter and
each quarter after that until your account reaches the minimum balance. If your
account does not reach the minimum balance, the Fund may redeem your account
after 60 days' written notice to you.

18
<PAGE>

Special services

To help make investing with us as easy as possible, and to help you build your
investments, we offer the following special services.

Automatic
Investing Plan

The Automatic Investing Plan allows you to make regular monthly investments
directly from your checking account.

Direct Deposit

With Direct Deposit you can make additional investments through payroll
deductions, recurring government or private payments such as Social Security or
direct transfers from your bank account.

Wealth Builder Option

With the Wealth Builder Option you can arrange automatic monthly exchanges
between your shares in one or more Delaware Investments funds. Wealth Builder
exchanges are subject to the same rules as regular exchanges (see below) and
require a minimum monthly exchange of $100 per fund.

Dividend
Reinvestment Plan

Through our Dividend Reinvestment Plan, you can have your distributions
reinvested in your account or the same share class in another fund in the
Delaware Investments family. The shares that you purchase through the Dividend
Reinvestment Plan are not subject to a front-end sales charge or to a contingent
deferred sales charge. Under most circumstances, you may reinvest dividends only
into like classes of shares.

Exchanges

You can exchange all or part of your shares for shares of the same class in
another Delaware Investments fund without paying a sales charge and without
paying a contingent deferred sales charge at the time of the exchange. However,
if you exchange shares from a money market fund that does not have a sales
charge you will pay any applicable sales charges on your new shares. When
exchanging Class B and Class C shares of one fund for similar shares in other
funds, your new shares will be subject to the same contingent deferred sales
charge as the shares you originally purchased. The holding period for the CDSC
will also remain the same, with the amount of time you held your original shares
being credited toward the holding period of your new shares. You don't pay sales
charges on shares that you acquired through the reinvestment of dividends. You
may have to pay taxes on your exchange. When you exchange shares, you are
purchasing shares in another fund so you should be sure to get a copy of the
fund's prospectus and read it carefully before buying shares through an
exchange.

19
<PAGE>

About your account (continued)

Special services
(continued)

MoneyLine(SM)
On Demand Service

Through our MoneyLine(SM) On Demand Service, you or your financial adviser may
transfer money between your Fund account and your predesignated bank account by
telephone request. This service is not available for retirement plans, except
for purchases into IRAs. MoneyLine has a minimum transfer of $25 and a maximum
transfer of $50,000.

MoneyLine
Direct Deposit Service

Through our MoneyLine Direct Deposit Service you can have $25 or more in
dividends and distributions deposited directly to your bank account. Delaware
Investments does not charge a fee for this service; however, your bank may
assess one. This service is not available for retirement plans.

Systematic
Withdrawal Plan

Through our Systematic Withdrawal Plan you can arrange a regular monthly or
quarterly payment from your account made to you or someone you designate. If the
value of your account is $5,000 or more, you can make withdrawals of at least
$25 monthly, or $75 quarterly. You may also have your withdrawals deposited
directly to your bank account through our MoneyLine Direct Deposit Service.

Dividends,
distributions
and taxes

Dividends and capital gains, if any, are paid annually. We automatically
reinvest all dividends and any capital gains, unless you tell us otherwise.

Tax laws are subject to change, so we urge you to consult your tax adviser about
your particular tax situation and how it might be affected by current tax law.
The tax status of your dividends from the Fund is the same whether you reinvest
your dividends or receive them in cash. Distributions from the Fund's long-term
capital gains are taxable as capital gains, while distributions from short-term
capital gains and net investment income are generally taxable as ordinary
income. Any capital gains may be taxable at different rates depending on the
length of time the Fund held the assets. In addition, you may be subject to
state and local taxes on distributions.

We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.
<PAGE>

Implementation of investment objectives and policies

Convertible
securities

In attempting to achieve its investment objective and policies, the Fund may
employ, among others, one or more of the strategies set forth below.

The Fund 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 Fund may invest in securities of the U.S. government. Securities guaranteed
by the U.S. government include:

o direct obligations of the U.S. Treasury (such as Treasury bills, notes and
bonds) and

o 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.

<PAGE>

Implementation of investment objectives and policies (continued)

Repurchase
agreements

The Fund may enter into repurchase agreements, under which the 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 Fund'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. The 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. If bankruptcy proceedings are commenced with
respect to the seller, realization upon the collateral by the Fund may be
delayed or limited.

When-Issued
securities and firm
commitment
agreements

The Fund 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. The 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 Fund 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.

The 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 the 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 the
Fund's portfolio securities decline while it is in a leveraged position, greater
depreciation of its net assets would likely occur than were it not in such a
position. The Fund 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.

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 currency exchange blockages or other foreign governmental laws or
restrictions, reduced availability of public information concerning foreign
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 U.S.

<PAGE>

Foreign
investments
(continued)

domestic companies. Although we do not intend to expose the Fund 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 Fund, including the withholding of
dividends. When we believe that currency in which the 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 Fund's portfolio
securities denominated in such foreign currency.

Because foreign securities generally are denominated and pay dividends or
interest in foreign currencies, and the Fund holds various foreign currencies
from time to time, the value of the net assets of the Fund 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 Fund is 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. We attempt to manage
exchange rate risk through active currency management, although there is no
guarantee that they will be successful.

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 Fund's 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 Fund normally pays 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.

The 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
Fund will take these and other risk considerations into account before making an
investment in an unsponsored ADR or ADS.

23
<PAGE>

Implementation of investment objectives and policies (continued)

Foreign
investments
(continued)

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.

Money market
instruments

The Fund 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:

o commercial paper (short-term notes up to 9 months issued by corporations or
governmental bodies);

o 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));

o corporate bonds and notes (corporate obligations that mature, or that may be
redeemed, in one year or less);

o variable rate demand notes, short-term tax-exempt obligations; and w 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.

Strategic
transactions

<PAGE>

Strategic
transactions
(continued)

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 the 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 the 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 Fund 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

The 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 Fund 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, the Fund will
not:

o sell futures contracts, purchase put options or write call options if, as a
result, more than 25% of its total assets would be hedged with futures and
options under normal conditions;

o purchase futures contracts or write put options if, as a result, the Fund's
total obligations upon settlement or exercise of purchased futures contracts
and written put options would exceed 25% of its total assets; or

o purchase call options if, as a result, the current value of option premiums
for call options purchased by the Fund would exceed 5% of its 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.

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

<PAGE>

Implementation of investment objectives and policies (continued)

Options transactions

The Fund 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 its 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 the 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. The Fund might, therefore, be obligated to purchase the underlying
securities for more than their current market price.

The Fund will write only "covered" options. An option is covered if the 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 the Statement of
Additional Information.

Forward foreign
currency exchange
contracts

The Fund 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 Fund 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. The 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 Fund 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.

The 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.

<PAGE>

Swap agreements

The Fund 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.

Special risks of
strategic
transactions

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

Participation in the options or futures markets and in currency exchange
transactions involves investment risks and transaction costs to which the 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 the 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:

o 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;

o imperfect correlation between the price of options and futures contracts and
options thereon and movements in the prices of securities being hedged;

o the fact that skills need to use these strategies are different from those
needed to select Fund securities;

o the possible absence of a liquid secondary market for any particular
instrument at any time;

o the possible need to defer closing out certain hedged positions to avoid
adverse tax consequences; and w the possible inability of the Fund to purchase
or sell a security at a time that otherwise would be favorable for it to do
so, or the possible need for the Fund to sell a security at a disadvantageous
time, due to the need for the Fund to maintain "cover" or to segregate
securities in connection with strategic transactions.

<PAGE>

Implementation of investment objectives and policies (continued)

Special risks of
strategic
transactions
(continued)

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 Fund may use and some of
their risks are described more fully in the Statement of Additional Information.

The Fund's ability to engage in strategic transactions is limited by the
requirements of the Internal Revenue Code for qualification as a regulated
investment company. See the Statement of Additional Information.

* * *

The Statement of Additional Information describes certain of these investment
policies and risk considerations. The Statement of Additional Information also
sets forth other investment policies, risk considerations and more specific
investment restrictions.

<PAGE>

Certain management considerations

Year 2000

As with other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer systems
used by their service providers do not properly process and calculate
date-related information from and after January 1, 2000. This is commonly known
as the "Year 2000 Problem." The Fund is taking steps to obtain satisfactory
assurances that its major service providers are taking steps reasonably designed
to address the Year 2000 Problem on the computer systems that the service
providers use. However, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the business of the Fund. The Year
2000 Problem may also adversely affect the issuers of securities in which the
Fund invests. The portfolio managers and investment professionals of the Fund
consider Year 2000 compliance in the securities selection and investment
process. However, there can be no guarantee that, even with their due diligence
efforts, they will be able to predict the affect of Year 2000 on any company or
the performace of its securities.

Investments by
fund of funds

U.S. Growth Fund accepts investments from the series portfolios of Delaware
Group Foundation Funds, a fund of funds. From time to time, the Fund may
experience large investments or redemptions due to allocations or rebalancings
by Foundation Funds. While it is impossible to predict the overall impact of
these transactions over time, there could be adverse effects on portfolio
management. For example, the Fund 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 transaction costs or portfolio turnover. The manager will monitor
transactions by Foundation Funds and will attempt to minimize any adverse
effects on both U.S. Growth Fund and Foundation Funds as a result of these
transactions.

<PAGE>

Financial information

Financial highlights

<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.650 $13.820 $12.430 $10.210 $10.000
Income from investment operations
Net investment loss (0.062) (0.060) (0.090) (0.090) (0.040)
Net realized and unrealized gain on investments 1.272 4.250 1.480 2.310 0.260
------- ------ ------- ------- -------
Total from investment operations 1.210 4.190 1.390 2.220 0.220
------- ------ ------- ------- -------
Less dividends and distributions
Dividends from net investment income none none none none (0.010)
Distributions from net realized gain on investments (6.370) (1.360) none none none
------ ------ ------- ------- -------
Total dividends and distributions (6.370) (1.360) none none (0.010)
------ ------ ------- ------- -------
Net asset value, end of period $11.490 $16.650 $13.820 $12.430 $10.210
======= ======= ======= ======= =======
Total return(2) 10.52%(3) 33.18% 11.18%(3) 21.74%(3) 2.18%(3)
Ratios and supplemental data
Net assets, end of period (000 omitted) $14,130 $6,933 $16,118 $13,574 $10,669
Ratio of expenses to average net assets 1.49% 1.44% 1.80% 1.85% 1.85%(4)
Ratio of expenses to average net assets prior to
expense limitation 1.49% N/A 1.88% 2.18% 2.94%(4)
Ratio of net investment loss to average net assets (0.52%) (0.38%) (0.77%) (0.88%) (0.51%)(4)
Ratio of net investment loss to average net
assets prior to expense limitation (0.52%) N/A (0.85%) (1.21%) (1.60%)(4)
Portfolio turnover 135% 144% 131% 58% 66%

Volatility

Class A Shares Period
Year Ended 10/31 12/3/931 to
1998 1997 1996 1995 10/31/94
10.52%(3) 33.18% 11.18%(3) 21.74%(3) 2.18%(3)
</TABLE>

Volatility, as indicated by year-by-year return(2)

Volatility chart is not part of the Financial highlights and has not been
audited by Ernst & Young LLP.

(1) Commencement of operations.
(2) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(3) Total return reflects voluntary expense caps.
(4) Annualized.
(5) To calculate the net investment income per share, we have used the "average
shares outstanding method." This means that we have divided the total net
investment income by the average number of shares outstanding during the
period to determine the net investment income per share.
(6) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.

<PAGE>

How to read the
Financial highlights

Net investment
income

Net investment income includes dividend and interest income earned from the
Fund's securities; it is after expenses have been deducted.

Net realized and
unrealized gain on
investments

A realized gain occurs when we sell an investment at a profit, while a realized
loss occurs when we sell an investment at a loss. When an investment increases
or decreases in value but we do not sell it, we record an unrealized gain or
loss. The amount of realized gain per share that we pay to shareholders is
listed under "Less dividends and distributions--Distributions from net realized
gain on investments."

Net asset value (NAV)

This is the value of a mutual fund share, calculated by dividing the net assets
by the number of shares outstanding.

<PAGE>

Financial information (continued)

Financial highlights

<TABLE>
<CAPTION>
Class B Shares Period
Year Ended 10/31 3/29/94(1) to
<S> <C> <C> <C> <C> <C> <C>
U.S. Growth Fund 1998(5) 1997(5) 1996(6) 1995 10/31/94

Net asset value, beginning of period $16.260 $13.610 $12.330 $10.190 $10.000
Income from investment operations
Net investment loss (0.140) (0.160) (0.170) (0.140) (0.030)
Net realized and unrealized gain on investments 1.210 4.170 1.450 2.280 0.220
------- ------- ------- ------- -------
Total from investment operations 1.070 4.010 1.280 2.140 0.190
------- ------- ------- ------- -------
Less dividends and distributions
Dividends from net investment income none none none none (0.010)
Distributions from net realized gain on investments (6.370) (1.360) none none none
------- ------- ------- ------- -------
Total dividends and distributions (6.370) (1.360) none none none
------- ------- ------- ------- -------
Net asset value, end of period $10.960 $16.260 $13.610 $12.330 $10.190
======= ======= ======= ======= =======
Total return(2) 9.62%(3) 32.30% 10.38%(3) 21.00%(3) 1.90%(3)
Ratios and supplemental data
Net assets, end of period (000 omitted) $5,418 $1,653 $809 $567 $204
Ratio of expenses to average net assets 2.19% 2.14% 2.48% 2.50% 2.50%(4)
Ratio of expenses to average net assets prior to
expense limitation 2.19% N/A 2.56% 2.83% 3.60%(4)
Ratio of net investment loss to average net assets (1.22%) (1.08%) (1.45%) (1.57%) (1.26%)(4)
Ratio of net investment loss to average net
assets prior to expense limitation (1.22%) N/A (1.53%) (1.90%) (2.36%)(4)
Portfolio turnover 135% 144% 131% 58% 66%

Volatility

Class B Shares Period
Year Ended 10/31 3/29/94(1) to
1998 1997 1996 1995 10/31/94
9.62%(3) 32.30% 10.38%(3) 21.00%(3) 2.90%(3)
</TABLE>

Volatility, as indicated by year-by-year return*(2)

Volatility chart is not part of the Financial highlights and has not been
audited by Ernst & Young LLP.

<PAGE>

How to read the
Financial highlights

Total return

This represents the rate that an investor would have earned or lost on an
investment in the Fund. In calculating this figure for the financial highlights
table, we include applicable fee waivers, exclude front-end and contingent
deferred sales charges, and assume the shareholder has reinvested all dividends
and realized gains.

Net assets

Net assets represent the total value of all the assets in the Fund's portfolio,
less any liabilities, that are attributable to that class of the Fund.

Ratio of expenses to
average net assets

The expense ratio is the percentage of net assets that a fund pays annually for
operating expenses and management fees. These expenses include accounting and
administration expenses, services for shareholders, and similar expenses.

<PAGE>

Financial information (continued)

Financial highlights

<TABLE>
<CAPTION>
Class C Shares Period
Year Ended 10/31 5/23/941 to
<S> <C> <C> <C> <C> <C>
U.S. Growth Fund 1998(5) 1997(5) 1996(6) 1995 10/31/94

Net asset value, beginning of period $17.020 $14.180 $12.850 $10.620 $10.000
Income from investment operations
Net investment loss (0.148) (0.170) (0.160) (0.100) (0.030)
Net realized and unrealized gain on investments 1.328 4.370 1.490 2.330 0.650
------- ------- ------- ------- -------
Total from investment operations 1.180 4.200 1.330 2.230 0.620
------- ------- ------- ------- -------
Less dividends and distributions
Dividends from net investment income none none none none none
Distributions from net realized gain on investments (6.370) (1.360) none none none
------- ------- ------- ------- -------
Total dividends and distributions (6.370) (1.360) none none none
------- ------- ------- ------- -------
Net asset value, end of period $11.830 $17.020 $14.180 $12.850 $10.620
======= ======= ======= ======= =======
Total return(2) 10.04%(3) 32.26% 10.35%(3) 21.00%(3) 6.17%(3)
Ratios and supplemental data
Net assets, end of period (000 omitted) $1,657 $252 $55 $27 $5
Ratio of expenses to average net assets 2.19% 2.14% 2.48% 2.50% 2.50%(4)
Ratio of expenses to average net assets prior to
expense limitation 2.19% N/A 2.56% 2.82% 3.54%(4)
Ratio of net investment loss to average net assets (1.22%) (1.08%) (1.45%) (1.61%) (1.09%)(4)
Ratio of net investment loss to average net
assets prior to expense limitation (1.22%) N/A (1.53%) (1.93%) (2.13%)(4)
Portfolio turnover 135% 144% 131% 58% 66%

Volatility

Class C Shares Period
Year Ended 10/31 5/23/94(1) to
1998 1997 1996 1995 10/31/94
10.04%(3) 32.26% 10.35%(3) 21.00%(3) 6.17%(3)
</TABLE>

Volatility, as indicated by year-by-year return(2)

Volatility chart is not part of the Financial highlights and has not been
audited by Ernst & Young LLP.

34
<PAGE>

How to read the
Financial highlights

Ratio of net invest-
ment income to
average net assets

We determine this ratio by
dividing net investment income by average net assets.

Portfolio turnover

This figure tells you the amount of trading activity in a fund's portfolio. For
example, a fund with a 50% turnover has bought and sold half of the value of its
total investment portfolio during the stated period.

<PAGE>

This page intentionally left blank

<PAGE>

This page intentionally left blank

<PAGE>

U.S. Growth Fund

Additional information about the Fund's investments is available in the Fund's
annual and semi-annual reports to shareholders. In the Fund's shareholder
reports, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during the report
period. You can find more detailed information about the Fund in the current
Statement of Additional Information, which we have filed electronically with the
Securities and Exchange Commission (SEC) and which is legally a part of this
prospectus. If you want a free copy of the Statement of Additional Information,
the annual or semi-annual report, or if you have any questions about investing
in the Fund, you can write to us at 1818 Market Street, Philadelphia, PA
19103-3682, or call toll-free 800.523.1918. You may also obtain additional
information about the Fund from your financial adviser.

You can find reports and other information about the Fund on the SEC web site
(http://www.sec.gov), or you can get copies of this information, after payment
of a duplicating fee, by writing to the Public Reference Section of the SEC,
Washington, D.C. 20549-6009. Information about the Fund, including its Statement
of Additional Information, can be reviewed and copied at the Securities and
Exchange Commission's Public Reference Room in Washington, D.C. You can get
information on the public reference room by calling the SEC at 1.800.SEC.0330.

Web site

www.delawarefunds.com

E-mail

[email protected]

Shareholder Service Center

800.523.1918

Call the Shareholder Service Center:
Monday to Friday, 8 a.m. to 8 p.m. Eastern time.

o For fund information; literature; price, yield and performance figures.

o For information on existing regular investment accounts and retirement plan
accounts including wire investments; wire redemptions; telephone redemptions
and telephone exchanges.

Delaphone Service

800.362.FUND (800.362.3863)

o For convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this Touch-Tone(R) service.

Registrant's Investment Company Act file number: 811-7972

CUSIP NASDAQ
----- ------
Class A 245917505 DUGAX
Class B 245917604 DEUBX
Class C 245917703 DEUCX

DELAWARE
INVESTMENTS
- -----------
Philadelphia o London

P-101 [--] PP 2/99

<PAGE>
DELAWARE
INVESTMENTS
- -----------
Philadelphia o London

U.S. Growth Fund
Institutional Class

Prospectus March 1, 1999

Growth of Capital Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.

<PAGE>

Table of contents

- --------------------------------------------------------------------------------
Fund profile page 2
U.S. Growth Fund 2
- --------------------------------------------------------------------------------
How we manage the Fund page 4
Our investment strategies 4
The securities we typically invest in 5
The risks of investing in the Fund 6
- --------------------------------------------------------------------------------
Who manages the Fund page 9
Investment manager and sub-adviser 9
Portfolio manager 9
Fund adminstration (Who's who) 10
- --------------------------------------------------------------------------------
About your account page 11
Investing in the Fund 11
Institutional Class shares 11
How to buy shares 12
How to redeem shares 14
Account minimum 15
Exchanges 15
Dividends, distributions and taxes 15
- --------------------------------------------------------------------------------
Implementation of investment
objectives and policies page 16
- --------------------------------------------------------------------------------
Certain management considerations page 23
- --------------------------------------------------------------------------------
Financial information page 24

1
<PAGE>
Profile: U.S. Growth Fund
- --------------------------------------------------------------------------------

What is the Fund's goal?

U.S. Growth Fund seeks maximum capital appreciation. Although the Fund will
strive to achieve its investment goal, there is no assurance that it will.

An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

Who should invest in the Fund

o Investors with long-term financial goals.

o Investors looking for capital growth potential.

o Investors looking for a fund that can be a complement to income-producing or
value-oriented investments.

Who should not invest in the Fund

o Investors with short-term financial goals.

o Investors who are unwilling to accept share prices that may fluctuate,
sometimes significantly, over the short term.

o Investors whose primary goal is to receive current income.

How has the U.S. Growth Fund performed?
- --------------------------------------------------------------------------------
This bar chart can help you evaluate the potential risks of investing in the
Fund. We show how returns for the Fund's Institutional Class shares have varied
over the past four calendar years, as well as average annual returns for the one
year and since inception. The Fund's past performance does not necessarily
indicate how it will perform in the future. The Class' returns reflect voluntary
expense caps. The returns would be lower without the voluntary caps.

[BAR CHART APPEARS HERE]
Year-by-year total return (Institutional Class)
1995 1996 1997 1998
24.28% 19.94% 31.36% 29.89%
- --------------------------------------------------------------------------------

As of December 31, 1998, the Fund had a year-to-date return of 29.89%. During
the periods illustrated in this bar chart, the Institutional Class' highest
return was 25.94% for the quarter ended December 31, 1998 and its lowest return
was -14.07% for the quarter ended September 30, 1998.

2
<PAGE>

How has the U.S. Growth Fund performed? (continued)
- --------------------------------------------------------------------------------
Average annual returns for periods ending 12/31/98

Institutional S&P 500
Class Index
1 year 29.89% 28.60%
Since inception (2/3/94) 19.01% 23.66%

The table above shows the Fund's average annual returns over various time
periods compared to the performance of the S&P 500 Index. You should remember
that unlike the Fund, the index is unmanaged and doesn't reflect the actual
costs of operating a mutual fund, such as the costs of buying, selling, and
holding the securities.

What are the Fund's fees and expenses?
- --------------------------------------------------------------------------------
You do not pay sales charges directly from your investments when you buy or sell
shares of the Institutional Class.

Maximum sales charge (load) imposed on
purchases as a percentage of offering price none
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none
Maximum sales charge (load) imposed on
reinvested dividends none
Redemption fees none
Exchange Fees(1) none

- --------------------------------------------------------------------------------
Annual fund operating expenses are deducted from
the Fund's assets before it pays dividends and before its net asset value and
total return are calculated. We will not charge you separately for these
expenses. These expenses are based on amounts incurred during the Fund's most
recent fiscal year.

Management fees 0.70%
Distribution and service (12b-1) fees none
Other expenses 0.49%
Total operating expenses 1.19%

- --------------------------------------------------------------------------------
This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds with similar investment
objectives. We show the cumulative amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5% return over the time shown.(2) This is
an example only, and does not represent future expenses, which may be greater or
less than those shown here.

1 year $121
3 years $378
5 years $654
10 years $1,443

(1) Exchanges are subject to the requirements of each fund in the Delaware
Investments family. A front-end sales charge may apply if you exchange your
shares into a fund that has a front-end sales charge.
(2) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show.

3
<PAGE>
How we manage the Fund
- --------------------------------------------------------------------------------

Our investment strategies

We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.

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

How to use
this glossary

Words found in the glossary are printed in boldface only the first time they
appear in the prospectus. So if you would like to know the meaning of a word
that isn't in boldface, you might still find it in the glossary.

Glossary A-B

Amortized cost
- --------------
Amortized cost is a method used to value a fixed-income security that starts
with the face value of the security and then adds or subtracts from that value
depending on whether the purchase price was greater or less than the value of
the security at maturity. The amount greater or less than the par value is
divided equally over the time remaining until maturity.

Average maturity
- --------------
An average of when the individual bonds and other debt securities held in a
portfolio will mature.

4
<PAGE>
Certain investment guidelines

Illiquid securities Up to 10% of the assets of the Fund may be invested in
securities that are not readily marketable, including:

o repurchase agreements with maturities greater than seven calendar days;

o time deposits maturing in more than seven calendar days;

o certain instruments, futures contracts and options on them for which there is
no liquid secondary market;

o certain over-the-counter options, as described in the Statement of Additional
Information;

o certain variable rate demand notes having a demand period of more than seven
days; and

o certain Rule 144A restricted securities. Rule 144A Securities are securities
which are eligible for resale only to certain Rule 144A securities for which
a dealer or institutional market exists will not be considered illiquid.

Other guidelines In addition, the 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. The Fund may also borrow from banks for temporary or other
emergency purposes, but not for investment purposes. The Fund may borrow 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 the 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. These restrictions are called "Non-fundamental restrictions." A
complete list of investment restrictions that identifies additional restrictions
that cannot be changed without the approval of a majority of an the Fund's
outstanding shares, as well as other non-fundamental restrictions, is contained
in the Statement of Additional Information.

Bond
- ----
A debt security, like an IOU, issued by a company, municipality or government
agency. In return for lending money to the issuer, a bond buyer generally
receives fixed periodic interest payments and repayment of the loan amount on a
specified maturity date. A bond's price changes prior to maturity and is
inversely related to current interest rates. When interest rates rise, bond
prices fall, and when interest rates fall, bond prices rise. See also Nationally
recognized statistical rating organization.

Bond ratings
- ------------
Independent evaluations of creditworthiness, ranging from Aaa/AAA (highest
quality) to D (lowest quality). Bonds rated Baa/BBB or better are considered
investment grade. Bonds rated Ba/BB or lower are commonly known as junk bonds.
See also Nationally recognized statistical rating organization. See also
Nationally recognized statistical rating organization.

5
<PAGE>
How we manage the Fund (continued)

The risks of investing
in the Fund

Investing in any mutual fund involves risk, including the risk that you may
receive little or no return on your investment, and the risk that you may lose
part or all of the money you invest. Before you invest in the Fund you should
carefully evaluate the risks. An investment in the Fund typically provides the
best results when held for a long period of time. The following are the chief
risks you assume when investing in U.S. Growth Fund. Please see the Statement of
Additional Information for further discussion of these risks and the other risks
not discussed here.
- --------------------------------------------------------------------------------
Risks
- --------------------------------------------------------------------------------
Market risk is the risk that all or a majority of the securities in a certain
market -- like the stock or bond market -- will decline in value because of
factors such as economic conditions, future expectations or investor confidence.

Industry and security risk is the risk that the value of securities in a
particular industry or the value of an individual stock or bond will decline
because of changing expectations for the performance of that industry or for the
individual company issuing the stock or bond.

Foreign risk is the risk that foreign securities may be adversely affected by
political instability, changes in currency exchange rates, foreign economic
conditions or inadequate regulatory and accounting standards.

Liquidity risk is the possibility that securities cannot be readily sold, if at
all, at approximately the price that the Fund values them.

Credit risk is the possibility that a bond's issuer (or an entity that insures
the bond) will be unable to make timely payments of interest and principal.
- --------------------------------------------------------------------------------
How we strive to manage them
- --------------------------------------------------------------------------------
U.S. Growth Fund
- --------------------------------------------------------------------------------

We maintain a long-term investment approach and focus on stocks we believe can
appreciate over an extended time frame regardless of interim market
fluctuations. We do not try to predict overall stock market movements and do not
trade for short-term purposes.

We may hold a substantial part of the Fund's assets in cash or cash equivalents
as a temporary, defensive strategy.

We limit the amount of U.S. Growth Fund's assets invested in any one industry
and in any individual security.

We are permitted to invest up to 20% of the Fund's portfolio in foreign
securities. When we do purchase foreign securities, they are generally American
Depositary Receipts which are denominated in U.S. dollars and traded on U.S.
stock exchanges.

We limit exposure to illiquid securities.

We limit the amount of high-yield bonds in the portfolio to 10% of net assets.
When we do invest in high-yield bonds, we typically invest primarily in bonds
rated lower than Baa by Moody's or BBB by S&P. This limitation, combined with
our careful, credit-oriented bond selection and our commitment to hold a
diversified selection of high-yield bonds are designed to manage this risk.

C-C

Capital
- -------
The amount of money you invest.

Capital appreciation
- --------------------
An increase in the value of an investment.

Capital gains distributions
- --------------------
Payments to mutual fund shareholders of profits
(realized gains) from the sale of a fund's portfolio securities. Usually paid
once a year; may be either short-term gains or long-term gains.

6
<PAGE>

Additional information on risk factors

Fixed-income
securities

Borrowing

Securities lending

Temporary defensive
position

Compounding
- -----------
Earnings on an investment's previous earnings.

Consumer Price Index (CPI)
- --------------------------
Measurement of U.S. inflation; represents the price of a basket of commonly
purchased goods.

Corporate bond
- --------------
A debt security issued by a corporation. See bond.

Cost Basis
- ----------
The original purchase price of an investment, used in determining capital gains
and losses.

Depreciation
- ------------
A decline in an investment's value.

7
<PAGE>
Additional information on risk factors (continued)

Portfolio turnover

High turnover in the 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.

* * *

D-F

Diversification
- ---------------
The process of spreading investments among a number of different securities,
asset classes or investment styles to reduce the risks of investing.

Dividend distribution
- ---------------------
Payments to mutual fund shareholders of dividends passed along from the fund's
portfolio of securities.

Duration
- --------
A measurement of a fixed-income investment's price volatility. The larger the
number, the greater the likely price change for a given change in interest
rates.

<PAGE>

Who manages the Fund

Investment manager
and sub-adviser

Investment Management Fees

U.S. Growth Fund
As a percentage of average daily net assets 0.70%

Portfolio
managers

Frank Houghton and Rufus Winton have primary responsibility for making
investment decisions for U.S. Growth Fund. When making decisions for the Fund,
Mr. Houghton and Mr. Winton regularly consult with the Lynch & Mayer investment
team and Edward J. Petner.

Frank Houghton, Senior Vice President and Portfolio Manager, joined Lynch &
Mayer in 1990. Prior to joining Lynch & Mayer, Mr. Houghton was Chairman of BMI
Capital from 1984 to 1990, a Portfolio Manager at Neuberger & Berman from 1977
to 1984 and a Partner at Oppenheimer & Co., Inc from 1969-1977. Mr. Houghton
received a BBA from Manhattan College and attended New York University Graduate
School of Business Administration.

Rufus Winton, Senior Vice President and Equity Analyst, joined Lynch & Mayer in
1993. Prior to joining Lynch & Mayer, Mr. Winton was a Planning Analyst at
Northwest Airlines, Inc., Director of Business Development at Postal Automation
Inc. and a Manager in Mortgage-Backed Securities Sales at Citicorp Investment
Bank. He received a BA in Economics from Connecticut College in 1982 and an MBA
from Kellogg Graduate School of Management in 1991, where he was an Amoco
Scholar.

Edward J. Petner is Chief Executive Officer and Chief Financial Officer of Lynch
& Mayer. 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.

9
<PAGE>

Who's who?

This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.

Board of Directors

Investment manager
Delaware Management Company
One Commerce Square
Philadelphia, PA 19103

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

The Fund

Sub-adviser
Lynch & Mayer, Inc.
520 Madison Avenue
New York, NY 10022

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

Service agent
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

Portfolio managers
(see page 9 for details)

Shareholders

Investment manager An investment manager is a company responsible for selecting
portfolio investments consistent with objective and policies stated in the
mutual fund's prospectus. The investment manager places portfolio orders with
broker/dealers and is responsible for obtaining the best overall execution of
those orders. A written contract between a mutual fund and its investment
manager specifies the services the manager performs. Most management contracts
provide for the manager to receive an annual fee based on a percentage of the
fund's average daily net assets. The manager is subject to numerous legal
restrictions, especially regarding transactions between itself and the funds it
advises.

Sub-adviser A sub-adviser is a company generally responsible for the management
of the fund's assets. They are selected and supervised by the investment
manager.

Portfolio managers Portfolio managers are employed by the investment manager or
sub-adviser to make investment decisions for individual portfolios on a
day-to-day basis.

Custodian Mutual funds are legally required to protect their portfolio
securities and typically place them with a qualified bank custodian who
segregates fund securities from other bank assets.

<PAGE>

I-N

Inflation
- ---------
The increase in the cost of goods and services over time. U.S. inflation is
frequently measured by changes in the Consumer Price Index (CPI).

Investment goal
- ---------------
The objective, such as long-term capital growth or high current income, that a
mutual fund pursues.

Management fee
- --------------
The amount paid by a mutual fund to the investment adviser for management
services, expressed as an annual percentage of the fund' s average daily net
assets.

10
<PAGE>

About your account

Investing in
the Fund

Institutional Class shares are available for purchase only by the following:

o 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

o tax-exempt employee benefit plans of the manager or its affiliates and
securities dealer firms with a selling agreement with the distributor

o institutional advisory accounts of the manager, or its affiliates and those
having client relationships with Delaware Investment Advisers, an affiliate
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

o 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

o 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

Maturity
- --------
The length of time until a bond issuer must repay the underlying loan principal
to bondholders.

National Association of Securities Dealers (NASD)
- -------------------------------------------------
A self-regulating organization, consisting of
brokerage firms (including distributors of mutual funds), that is responsible
for overseeing the actions of its members.

11
<PAGE>

About your account (continued)

How to buy shares

[GRAPHIC OMITTED]

By mail
Complete an investment slip and mail it with your check, made payable to the
fund and class of shares you wish to purchase, to Delaware Investments, 1818
Market Street, Philadelphia, PA 19103-3682. If you are making an initial
purchase by mail, you must include a completed investment application (or an
appropriate retirement plan application if you are opening a retirement account)
with your check.

[GRAPHIC OMITTED]

By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that you may not exchange your shares for Class B or Class C
shares. To open an account by exchange, call the Shareholder Service Center at
800.510.4015.

[GRAPHIC OMITTED]

Through automated shareholder services
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.

N-R

Nationally recognized statistical rating organization (NRSRO)
- -------------------------------------------------------------
A company that assesses the credit quality of bonds, commercial paper, preferred
and common stocks and municipal short-term issues, rating the probability that
the issuer of the debt will meet the scheduled interest payments and repay the
principal. Ratings are published by such companies as Moody's Investors Service
(Moody's), Standard & Poor's Corporation (S&P), Duff & Phelps, Inc. (Duff), and
Fitch Investor Services, Inc. (Fitch).

Net asset value (NAV)
- ---------------------
The daily dollar value of one mutual fund share. Equal to a fund's net assets
divided by the number of shares outstanding.

12
<PAGE>

How to buy shares
(continued)

The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receives your order before the close of trading on
the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a business day,
you will pay that day's closing share price which is based on the Fund's net
asset value. If we receive your order after the close of trading, you will pay
the next business day's price. A business day is any day that the New York Stock
Exchange is open for business. Currently the Exchange is closed when the
following holidays are observed: New Years Day, Martin Luther King, Jr.'s
Birthday, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas. We reserve the right to reject any purchase
order.

Principal
- ---------
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.

Prospectus
- ----------
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.

Redeem
- ------
To cash in your shares by selling them back to the mutual fund.

Risk
- ----
Generally defined as variability of value; also credit risk, inflation risk,
currency and interest rate risk. Different investments involve different types
and degrees of risk.

13
<PAGE>

About your account (continued)

How to redeem
shares

[GRAPHIC OMITTED]

By mail
You can redeem your shares (sell them back to the fund) by mail by
writing to: Delaware Investments, 1818 Market Street, Philadelphia, PA
19103-3682. All owners of the account must sign the request, and for redemptions
of $50,000 or more, you must include a signature guarantee for each owner. You
can also fax your written request to 215-255-8864. Signature guarantees are also
required when redemption proceeds are going to an address other than the address
of record on an account.

[GRAPHIC OMITTED]

By wire
You can redeem $1,000 or more of your shares and have the proceeds deposited
directly to your bank account the next business day after we receive your
request. Bank information must be on file before you request a wire redemption.

[GRAPHIC OMITTED]

Through automated shareholder services
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.

S-S

Share classes
- -------------
Different classifications of shares; mutual fund share classes offer a variety
of sales charge choices.

14
<PAGE>

How to redeem shares
(continued)

If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.

Account minimum

If you redeem shares and your account balance falls below $250, the Fund may
redeem your account after 60 days' written notice to you.

Exchanges

You can exchange all or part of your shares for shares of the same class in
another Delaware Investments fund. If you exchange shares to a fund that has a
sales charge you will pay any applicable sales charges on your new shares. You
don't pay sales charges on shares that are acquired through the reinvestment of
dividends. You may have to pay taxes on your exchange. When you exchange shares,
you are purchasing shares in another fund so you should be sure to get a copy of
the fund's prospectus and read it carefully before buying shares through an
exchange. You may not exchange your shares for Class B and Class C shares of the
funds in the Delaware Investments family.

Dividends,
distributions and
taxes

Dividends and capital gains, if any, are paid annually. We automatically
reinvest all dividends and any capital gains.

We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.

Standard deviation
- ------------------
A measure of an investment's volatility; for mutual funds, measures how much a
fund's total return has typically varied from its historical average.

Stock
- -----
An investment that represents a share of ownership (equity) in a corporation.
Stocks are often referred to as "equities."

15
<PAGE>

Implementation of investment objectives and policies

In attempting to achieve its investment objective and policies, the Fund may
employ, among others, one or more of the strategies set forth below.

Convertible
securities

U.S. government
securities

The Fund may invest in securities of the U.S. government. Securities guaranteed
by the U.S. government include:

o direct obligations of the U.S. Treasury (such as Treasury bills, notes and
bonds) and

o federal agency obligations guaranteed as to principal and interest by the
U.S. Treasury (such as GNMA certificates and Federal Housing Administration
debentures).

T-V

Total return
- ------------
An investment performance measurement, expressed as a percentage, based on the
combined earnings from dividends, capital gains and change in price over a given
period.

16
<PAGE>

Repurchase
agreements

When-issued
securities and firm
commitment
agreements

Foreign
investments

17
<PAGE>

Implementation of investment objectives and policies (continued)

Foreign
investments
(continued)

tions on the use or removal of funds or other assets of the Fund, including the
withholding of dividends. When we believe that currency in which the 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
Fund's portfolio securities denominated in such foreign currency.

18
<PAGE>

Foreign
investments
(continued)

Money market
instruments

The Fund 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:

o commercial paper (short-term notes up to 9 months issued by corporations or
governmental bodies);

o corporate bonds and notes (corporate obligations that mature, or that may be
redeemed, in one year or less);

o variable rate demand notes, short-term tax-exempt obligations; and

o 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.

Strategic
transactions

General The Fund may, but is 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 Fund
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

19
<PAGE>

Implementation of investment objectives and policies (continued)

Strategic
transactions
(continued)

manage the effective maturity or duration of fixed-income securities in the
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 the 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 Fund 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

In addition to the above limitations, the Fund will not:

o sell futures contracts, purchase put options or write call options if, as a
result, more than 25% of its total assets would be hedged with futures and
options under normal conditions;

o purchase call options if, as a result, the current value of option premiums
for call options purchased by the Fund would exceed 5% of its 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.

Options transactions

20
<PAGE>

Options transactions
(continued)

Forward foreign
currency exchange
contracts

Futures contracts
and options thereon

Swap agreements

21
<PAGE>

Special risks of
strategic
transactions

o 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;

o imperfect correlation between the price of options and futures contracts and
options thereon and movements in the prices of securities being hedged;

o the fact that skills need to use these strategies are different from those
needed to select Fund securities;

o the possible absence of a liquid secondary market for any particular
instrument at any time;

o the possible need to defer closing out certain hedged positions to avoid
adverse tax consequences; and

o the possible inability of the Fund to purchase or sell a security at a time
that otherwise would be favorable for it to do so, or the possible need for
the Fund to sell a security at a disadvantageous time, due to the need for
the 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 Fund may use and some of
their risks are described more fully in the Statement of Additional Information.

* * *

<PAGE>

Certain management considerations

Year 2000

Investments by
fund of funds

23
<PAGE>
Financial information

Financial highlights
- --------------------------------------------------------------------------------

The financial highlights table is intended to help you understand the Fund's
financial performance. All "per share" information reflects financial results
for a single Fund share. The information for the years ended October 31, 1998
and 1997 has been audited by Ernst & Young LLP, whose report, along with the
Fund's financial statements, is included in the Fund's annual report, which is
available upon request by calling 800-523-1918. The information for the fiscal
periods ending on or before October 31, 1996 has been audited by the Fund's
previous independent auditor.
<TABLE>
<CAPTION>
Institutional Class Shares Period
Year Ended 10/31 2/3/94(1) to
U.S. Growth Fund 1998(5) 1997(5) 1996(6) 1995 10/31/94
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $16.860 $13.940 $12.500 $10.230 $10.520
Income (loss) from investment operations
Net investment loss (0.027) (0.010) (0.050) (0.050) (0.010)
Net realized and unrealized gain (loss) on
investments 1.287 4.290 1.490 2.320 (0.280)
------- ------- ------- ------- -------
Total from investment operations 1.260 4.280 1.440 2.270 (0.290)
------- ------- ------- ------- -------
Less dividends and distributions
Dividends from net investment income none none none none none
Distributions from net realized gain on
investments (6.370) (1.360) none none none
------- ------- ------- ------- -------
Total dividends and distributions (6.370) (1.360) none none none
------- ------- ------- ------- -------
Net asset value, end of period $11.750 $16.860 $13.940 $12.500 $10.230
======= ======= ======= ======= =======
Total return(2) 10.80%(3) 33.57% 11.52%(3) 22.19%(3) (2.78%)(3)
Ratios and supplemental data
Net assets, end of period (000 omitted) $28,606 $18,455 $10,003 $4,819 $1,630
Ratio of expenses to average net assets 1.19% 1.14% 1.48% 1.50% 1.50%(4)
Ratio of expenses to average net assets prior to
expense limitation 1.19% N/A 1.56% 1.83% 2.60%(4)
Ratio of net investment loss to average net assets (0.22%) (0.08%) (0.45%) (0.59%) (0.27%)(4)
Ratio of net investment loss to average net assets
prior to expense limitation (0.22%) N/A (0.53%) (0.92%) (1.37%)(4)
Portfolio turnover rate 135% 144% 131% 58% 66%
</TABLE>

Volatility
- --------------------------------------------------------------------------------

Volatility, as indicated
by year-by-year return(2)

Volatility chart is not part of the Financial highlights and has not been
audited by Ernst & Young LLP.

<TABLE>
<CAPTION>
Institutional Class Shares Period
Year Ended 10/31 2/3/94(1) to
1998 1997 1996 1995 10/31/94
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10.80%(3) 33.57% 11.52%(3) -22.19%(3) -2.78%(3)
</TABLE>

(1) Commencement of operations.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions.
(3) Total return reflects voluntary expense caps.
(4) Annualized.
(5) To calculate the net investment income per share, we have used the "average
shares outstanding method." This means that we have divided the total net
investment income by the average number of shares outstanding during the
period to determine the net investment income per share.
(6) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.

24
<PAGE>

How to read the
Financial highlights
- --------------------------------------------------------------------------------

Net investment income

Net investment income includes dividend and interest income earned from the
Fund's securities after its expenses have been deducted.

Net realized and
unrealized gain (loss) on investments

A realized gain occurs when we sell an investment at a profit, while a realized
loss occurs when we sell an investment at a loss. When an investment increases
or decreases in value but we do not sell it, we record an unrealized gain or
loss. The amount of realized gain per share that we pay to shareholders is
listed under "Less dividends and distributions-Distributions from net realized
gain on investments."

Net asset value (NAV)

This is the value of a mutual fund share, calculated by dividing the net assets
by the number of shares outstanding.

Total return

This represents the rate that an investor would have earned or lost on an
investment in the Fund. In calculating this figure for the financial highlights
table, we include applicable fee waivers and assume the shareholder has
reinvested all dividends and realized gains.

Net assets

Net assets represent the total value of all the assets in the Fund's portfolio,
less any liabilities that are attributable to that class of the Fund.

Ratio of expenses to average net assets

The expense ratio is the percentage of total net assets that a fund pays
annually for operating expenses and management fees. These expenses include
accounting and administration expenses, services for shareholders, and similar
expenses.

Ratio of net investment income to average net assets

We determine this ratio by dividing net investment income by average net assets.

Portfolio turnover

<PAGE>

U.S. Growth Fund

Web site

www.delawarefunds.com

E-mail

[email protected]

Client Services Representative

800.510.4015

Delaphone Service

800.362.FUND (800.362.3863)

For convenient access to account information or current performance information
on all Delaware Investments Funds seven days a week, 24 hours a day, use this
Touch-Tone(R) service.

Registrant's Investment Company Act file number: 811-7972

CUSIP NASDAQ
----- ------
Institutional Class 245917802 DEUIX

DELAWARE
INVESTMENTS
- ---------------------
Philadelphia o London

P-104 [--] PP 2/99
<PAGE>
DELAWARE
INVESTMENTS
- -----------
Philadelphia o London

Overseas Equity Fund
Class A o Class B o Class C
Prospectus March 1, 1999

International Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.

<PAGE>

Table of contents

- --------------------------------------------------------------------------------
Fund profile page 2
Overseas Equity Fund 2
- --------------------------------------------------------------------------------
How we manage the Fund page 5
Our investment strategies 5
The risks of investing in the Fund 7
- --------------------------------------------------------------------------------
Who manages the Fund page 12
Investment manager and sub-adviser 12
Portfolio managers 12
Fund administration (Who's who) 13
- --------------------------------------------------------------------------------
About your account page 14
Investing in the Fund 14
Choosing a share class 14
How to reduce your sales charge 17
How to buy shares 18
Retirement plans 19
How to redeem shares 20
Account minimum 21
Special services 22
Dividends, distributions and taxes 23
- --------------------------------------------------------------------------------
Implementation of investment
objectives and policies page 24
- --------------------------------------------------------------------------------
Certain management considerations page 31
- --------------------------------------------------------------------------------
Financial information page 32

1
<PAGE>
Profile: Overseas Equity Fund
- --------------------------------------------------------------------------------

What is the Fund's goal?

Overseas Equity Fund seeks to maximize total return (capital appreciation
and income) principally through investments in an internationally
diversified portfolio of equity securities. Although the Fund will strive to
achieve its goal, there is no assurance that it will.

Who should invest in the Fund

o Investors with long-term financial goals.

o Investors looking for capital growth potential.

o Investors willing to accept the sometimes sharp and unpredictable
fluctuations in value that a foreign fund can experience. These fluctuations
can be even more pronounced for funds like Overseas Equity Fund, which
invest in developing countries.

Who should not invest in the Fund

o Investors with short-term financial goals.

o Investors who are unwilling to accept share prices that may fluctuate,
sometimes significantly, over the short term.

o Investors whose primary goal is to receive current income.

o Investors who do not understand the significant risks associated with
international investing.

What are the Fund's main investment strategies? We invest in stocks of companies
based in foreign countries which are believed to offer appreciation potential.
We may invest in companies based in established countries. We may also invest up
to 40% of our net assets in companies located in developing countries.

In determining what portion of the Overseas Equity Fund's assets should be
allocated to a particular country, we consider: how weak or strong the country's
currency is, the country's prospects for economic growth compared to other
countries, expected levels of inflation, political environment and the range of
investment opportunities available in the country.

In selecting individual stocks for the portfolio, we evaluate each stock on its
growth prospects and the potential value of its future income stream. We
estimate how much a stock is likely to pay in dividends. We then adjust that for
inflation to determine a current value for the stock. We compare that value to
other stocks available to us and decide what companies appear to have the best
future prospects. This strategy allows us to compare stocks across a variety of
countries and is typically considered to be a value approach to investing.

What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The value of the securities held by the Fund may increase and decrease,
sometimes rapidly and unpredictably. Consequently, the Fund's share price could
increase or decrease significantly, particularly over the short term. Because
the Fund invests in international securities in both established and developing
countries, it will be affected by international investment risks related to
changes in currency valuations, political instability, economic instability or
lax accounting and regulatory standards. These risks and others are described
more fully on page 7.

An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

2
<PAGE>

How has the Overseas Equity Fund performed?
- --------------------------------------------------------------------------------
Year-by-year total return (Class A)

[BAR CHART APPEARS HERE]

1994 1995 1996 1997 1998
4.21% 11.10% 9.53% 1.76% -6.74%

As of December 31, 1998, the Fund had a year-to-date return of -6.74%. During
the periods illustrated in this bar chart, the Fund's highest return was 11.28%
for the quarter ended June 30, 1997 and its lowest return was -13.70% for the
quarter ended September 30, 1998.

Average annual returns for periods ending 12/31/98

<TABLE>
<CAPTION>
CLASS A B C
(if redeemed)* (if redeemed)* Morgan Stanley
(Inception 12/3/93) (Inception 3/29/94) (Inception 5/10/94) EAFE Index**
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 year -12.11% -10.97% -8.24% 20.33%
- ---------------------------------------------------------------------------------------------------------------
5 years 2.54% N/A N/A 9.50%
- ---------------------------------------------------------------------------------------------------------------
Lifetime** 2.36% 1.74% 2.03% 10.86%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>

The table above shows the Fund's average annual returns over various time
periods compared to the performance of the Morgan Stanley EAFE Index. You
should remember that unlike the Fund, the index is unmanaged and doesn't
reflect the actual costs of operating a mutual fund, such as the costs of
buying, selling, and holding the securities.

*If redeemed at end of period shown. If shares were not redeemed, the returns
for Class B would be -7.51% and 1.98% for the one-year and lifetime periods,
respectively. Returns for Class C would be -7.54% and 2.03% for the one-year
and lifetime periods, respectively.

**Lifetime returns are shown if the Fund or Class existed for less than 10
years. Morgan Stanley returns are for Class A lifetime. Morgan Stanley returns
for Class B and Class C lifetimes were 9.22% and 8.42%, respectively. Maximum
sales charges are included in the Fund returns above.

3
<PAGE>
How has the Overseas Equity Fund performed (continued)

What are the Fund's fees and expenses?
Sales charges are fees paid directly from your investments when you buy or sell
shares of the Fund. The Fund may waive or reduce sales charges; please see the
Statement of Additional Information for details.

CLASS A B C
- --------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
purchases as a percentage of offering price 5.75% none none
- --------------------------------------------------------------------------------
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none(1) 5%(2) 1%(3)
- --------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
reinvested dividends none none none
- --------------------------------------------------------------------------------
Redemption fees none none none

- --------------------------------------------------------------------------------
Annual fund operating expenses are deducted from the Fund's assets before it
pays dividends and before its net asset value and total return are calculated.
We will not charge you separately for these expenses. These expenses are based
on amounts incurred during the Fund's most recent fiscal year.

Management fees 1.00% 1.00% 1.00%
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.30%(4) 1.00% 1.00%
- --------------------------------------------------------------------------------
Other expenses 2.45% 2.45% 2.45%
- --------------------------------------------------------------------------------
Total operating expenses(5) 3.75% 4.45% 4.45%

- --------------------------------------------------------------------------------
This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds with similar investment
objectives. We show the cumulative amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5% return over the time shown.6 This is an
example only, and does not represent future expenses, which may be greater or
less than those shown here.

CLASS(7) A B B C C
(if redeemed) (if redeemed)
- --------------------------------------------------------------------------------
1 year $931 $446 $946 $446 $546
- --------------------------------------------------------------------------------
3 years $1,655 $1,346 $1,646 $1,346 $1,346
- --------------------------------------------------------------------------------
5 years $2,398 $2,256 $2,456 $2,256 $2,256
- --------------------------------------------------------------------------------
10 years $4,338 $4,433 $4,433 $4,574 $4,574
- --------------------------------------------------------------------------------

(1) A purchase of Class A shares of $1 million or more may be made at net asset
value. However, if you buy the shares through a financial adviser who is
paid a commission, a contingent deferred sales charge will apply to certain
redemptions. Additional Class A purchase options that involve a contingent
deferred sales charge may be permitted from time to time and will be
disclosed in the prospectus if they are available.

(2) If you redeem Class B shares during the first year after you buy them, you
will pay a contingent deferred sales charge of 5%, which declines to 4%
during the second year, 3% during the third and fourth years, 2% during the
fifth year, 1% during the sixth year, and 0% thereafter.

(3) Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.

(4) 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%.

(5) The investment manager has agreed to waive fees and pay expenses from May 1,
1998 through April 30, 1999 in order to prevent total operating expenses
(excluding any taxes, interest, brokerage fees, extraordinary expenses and
12b-1 fees) from exceeding 1.55% of average daily net assets. The manager's
voluntary commitments of waiver and payment were different prior to May 1,
1998.

(6) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show. In addition, the example does not assume the voluntary expense
limitation discussed in footnote 5.

(7) The Class B example reflects the conversion of Class B shares to Class A
shares after approximately eight years. Information for the ninth and tenth
years reflects expenses of the Class A shares.

4
<PAGE>
How we manage the Fund

Our investment strategies

Overseas Equity Fund's investment objective is to maximize total return (capital
appreciation and income) principally through investments in an internationally
diversified portfolio of equity securities.

We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.

Overseas Equity Fund's investment goal is to seek to maximize total return
(capital appreciation and income). It seeks to achieve this objective by
investing primarily in equity securities of foreign issuers located in countries
that the 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 including:

Australia Hong Kong Norway
Austria India Portugal
Belgium Ireland Singapore
Brazil Italy South Africa
Canada Japan Spain
Denmark Luxembourg Sweden
Finland Malaysia Switzerland
France Mexico Thailand
Germany The Netherlands The United
Greece New Zealand 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.

How to use
this glossary

Glossary A

Average maturity
- --------------
An average of when the individual bonds and other debt securities held in a
portfolio will mature.

5
<PAGE>

How we manage the Funds (continued)

securities, consisting of fixed-income 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 "The risks of investing
in the Fund" on page 7. For a complete list of the Fund's investment
restrictions, see Investment Restrictions in the Statement of Additional
Information.

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.

Certain investment guidelines

Illiquid securities Up to 10% of the assets of the Fund may be invested in
securities that are not readily marketable, including, where applicable:

o repurchase agreements with maturities greater than seven calendar days;

o time deposits maturing in more than seven calendar days;

o certain instruments, futures contracts and options thereon for which there is
no liquid secondary market;

o certain over-the-counter options, as described in the Statement of Additional
Information;

o certain variable rate demand notes having a demand period of more than seven
days; and

o certain Rule 144A restricted securities (Rule 144A securities for which a
dealer or institutional market exists will not be considered illiquid).

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 Fund's investment restriction concerning
illiquid securities.

Other guidelines

B-C

6
<PAGE>

Other guidelines
(continued)

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 the 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 the Fund's outstanding
shares (as well as other non-fundamental restrictions) is contained in the
Statement of Additional Information.

The risks of investing
in the Fund

- --------------------------------------------------------------------------------
Risks
- --------------------------------------------------------------------------------
Market risk is the risk that all or a majority of the securities in a certain
market -- like the stock or bond market -- or in a certain country or region
will decline in value because of factors such as economic conditions, future
expectations or investor confidence.
- --------------------------------------------------------------------------------
Industry and security risk is the risk that the value of securities in a
particular industry or the value of an individual stock or bond will decline
because of changing expectations for the performance of that industry or for the
individual company issuing the stock or bond.
- --------------------------------------------------------------------------------

Currency risk The value of the Fund's investments may be negatively affected by
changes in foreign currency exchange rates. Adverse changes in exchange rates
may reduce or eliminate any gains produced by investments that are denominated
in foreign currencies and may increase any losses.

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

- --------------------------------------------------------------------------------
How we strive to manage them
- --------------------------------------------------------------------------------
Overseas Equity Fund
- --------------------------------------------------------------------------------
We maintain a long-term investment approach and focus on stocks we believe can
appreciate over an extended time frame regardless of interim market
fluctuations. In deciding what portion of our portfolio should be invested in
any individual country, we evaluate the country's economy, politics, liquidity,
corporate earnings, interest rates and valuations relative to other countries.

We may hold a substantial part of the Fund's assets in cash or cash equivalents
as a temporary, defensive strategy. We may also invest a major portion of the
Fund's net assets in U.S. securities as a temporary defensive measure.

- --------------------------------------------------------------------------------
We hold a number of different securities in a variety of sectors in order to
minimize the impact that any one poorly performing security would have on
Overseas Equity Fund's overall performance.

- --------------------------------------------------------------------------------
Overseas Equity Fund may try to hedge its currency risk by purchasing foreign
currency exchange contracts. By agreeing to purchase or sell foreign currencies
at a pre-set price on a future date, Overseas Equity Fund strives to protect the
value of the stocks it owns from future changes in currency rates. Overseas
Equity Fund will use currency exchange contracts only for defensive measures,
not to enhance portfolio returns. However, there is no assurance that a strategy
such as this will be successful.
- --------------------------------------------------------------------------------

<PAGE>

Capital
- -------
The amount of money you invest.

Capital appreciation
- --------------------
An increase in the value of an investment.

Capital gains distributions
- ---------------------------
Payments to mutual fund shareholders of profits (realized gains) from the sale
of a fund's portfolio securities. Usually paid once a year; may be either
short-term gains or long-term gains.

Commission
- ----------
The fee an investor pays to a financial adviser for investment advice and help
in buying or selling mutual funds, stocks, bonds or other securities.

Compounding
- -----------
Earnings on an investment's previous earnings.

7
<PAGE>

How we manage the Funds (continued)
- --------------------------------------------------------------------------------
Risks
- --------------------------------------------------------------------------------
Political risk The risk that countries or the entire region where we invest may
experience political instability, which may cause greater fluctuation in the
value of our investments due to changes in currency exchange rates, governmental
seizures or nationalization of assets.

- --------------------------------------------------------------------------------
Emerging market risk is the possibility that the risks associated with
international investing will be greater in emerging markets than in more
developed foreign markets because, among other things, emerging markets may have
less stable political and economic environments.

- --------------------------------------------------------------------------------
Inefficient market risk Foreign markets may be less liquid, have greater price
volatility, less regulation and higher transaction costs than U.S. markets.

- --------------------------------------------------------------------------------
Information risk Foreign companies are subject to different accounting, auditing
and financial reporting standards than U.S. companies. There may be less
information available about foreign issuers than domestic issuers. Furthermore,
regulatory oversight of foreign issuers may be less stringent or less
consistently applied than in the United States.

- --------------------------------------------------------------------------------
How we strive to manage them
- --------------------------------------------------------------------------------
Overseas Equity Fund
- --------------------------------------------------------------------------------
We carefully evaluate the political situations in the countries where we invest
and take into account any potential risks before we select securities for the
portfolio. However, there is no way to eliminate political risk when investing
internationally.

- --------------------------------------------------------------------------------
We carefully select securities within emerging markets and strive to consider
all relevant risks associated with an individual company. Typically a larger
percentage of our net assets is allocated to established countries than to
developing countries. However, we cannot eliminate emerging market risk and
consequently encourage shareholders to invest in this Fund only if they have a
long-term time horizon, over which the potential of individual securities is
more likely to be realized.

- --------------------------------------------------------------------------------
The Fund will attempt to reduce these risks through investing in a number of
different countries, credit analysis and attention to trends in the the economy,
industries and financial markets. The fact that we are investing for the long
term makes short-term liquidity less important and helps to reduce the high
transaction costs that may be associated with funds which engage in more
short-term trading.

- --------------------------------------------------------------------------------
We conduct a great deal of fundamental research on the companies we invest in
rather than relying solely on information available through financial reporting.
We believe this will help us better uncover any potential weakness in individual
companies.
- --------------------------------------------------------------------------------

C-D

Consumer Price Index (CPI)
- --------------------------
Measurement of U.S. inflation; represents the price of a basket of commonly
purchased goods.

Contingent deferred sales charge (CDSC)
- ---------------------------------------
Fee charged by some mutual funds when shares are redeemed (sold back to the
fund) within a set number of years; an alternative method for investors to
compensate a financial adviser for advice and service, rather than an up-front
commission.

Corporate bond
- --------------
A debt security issued by a corporation. See bond.
<PAGE>

Additional Information on risk factors

Fixed-income
securities

Foreign
investments

Overseas Equity Fund may invest substantially all of its assets in foreign
investments. 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 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 manager or sub-adviser does not intend to
expose the Fund 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 Fund,
including the withholding of dividends. When the manager or sub-adviser believes
that currency in which the 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 Fund's portfolio securities denominated in such
foreign currency.

Because foreign securities generally are denominated and pay dividends or
interest in foreign currencies, and the Fund holds various foreign currencies
from time to time, the value of the net assets of the Fund 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 Fund is 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-adviser
attempt to manage exchange rate risk through active currency management, but
there is no guarantee that they will be successful.

Depreciation
- ------------
A decline in an investment's value.

Diversification
- ---------------
The process of spreading investments among a number of different securities,
asset classes or investment styles to reduce the risks of investing.

Dividend distribution
- ---------------------
Payments to mutual fund shareholders of dividends passed along from the fund's
portfolio of securities.

Duration
- --------
A measurement of a fixed-income investment's price volatility. The larger the
number, the greater the likely price change for a given change in interest
rates.

9
<PAGE>

Additional information on risk factors (continued)

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 Fund normally pays 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.

Borrowing

E-I

10
<PAGE>

Securities
lending

Temporary defensive
position

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

Portfolio
turnover

High turnover in the 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.

* * *

Inflation
- ---------
The increase in the cost of goods and services over time. U.S. inflation is
frequently measured by changes in the Consumer Price Index (CPI).

Investment goal
- ---------------
The objective, such as long-term capital growth or high current income, that a
mutual fund pursues.

11
<PAGE>

Who manages the Fund

Investment manager
and sub-adviser

The Fund is managed by Delaware Management Company, a series of Delaware
Management Business Trust which is an indirect, wholly owned subsidiary of
Delaware Management Holdings, Inc. Delaware International Advisers Ltd., an
affiliate of Delaware Management Company, is the Fund's sub-adviser. As
sub-adviser, Delaware International is responsible for day-to-day management of
the Fund's assets. Delaware Management Company administers the Fund's affairs
and has ultimate responsibility for all investment advisory services for the
Fund. Delaware Management Company also supervises the sub-adviser's performance.
No fees were paid to the manager or sub-adviser for the last fiscal year.

Portfolio
managers

Clive A. Gillmore and Robert Akester have had primary responsibility for making
day-to-day investment decisions for the Fund since September 15, 1997.

Clive A. Gilmore is a graduate of the University of Warwick. He began his career
at Legal and General Investment Management and joined Delaware International in
1990 after eight years of investment experience. His most recent position prior
to joining Delaware International was as a Pacific Basin equity analyst and
senior portfolio manager for Hill Samuel Investment Management Ltd. Mr. Gillmore
completed the London Business School Investment program.

Robert Akester joined Delaware International in 1996 as a Senior Portfolio
Manager. He began his investment career in 1969 and was most recently a Director
of Hill Samuel Investment Management 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. From time to time, Mr. Gillmore and Mr. Akester also consult with David
G. Tilles regarding investment decisions for the Fund.

David G. Tilles, Chief Investment Officer for Delaware International, is a
graduate of the University of Warwick with a BS in management sciences. Before
joining Delaware International in 1990, he was Chief Investment Officer of Hill
Samuel Investment Management Ltd. He is a member of the Institute of Investment
Management & Research and the Operational Research Society.

M-N

Management fee
- --------------
The amount paid by a mutual fund to the investment adviser for management
services, expressed as an annual percentage of the fund's average daily net
assets.

Maturity
- --------
The length of time until a bond issuer must repay the underlying loan principal
to bondholders.

12
<PAGE>

Who's who?

This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.

Board of directors

Investment manager
Delaware Management Company
One Commerce Square
Philadelphia, PA 19103

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

The Fund

Sub-adviser
Delaware International Advisers LTD.
Third Floor 80 Cheapside
London England EC2V 6EE

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

Service agent
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

Financial advisers

Portfolio managers
(see page 12 for details)

Shareholders

Sub-adviser A sub-adviser is a company generally responsible for the management
of the fund's assets. They are selected and supervised by the investment
manager.

Portfolio managers Portfolio managers are employed by the investment manager or
sub-adviser to make investment decisions for individual portfolios on a
day-to-day basis.

Custodian Mutual funds are legally required to protect their portfolio
securities and typically place them with a qualified bank custodian who
segregates fund securities from other bank assets.

<PAGE>

Financial advisers Financial advisers provide advice to their clients--analyzing
their financial objectives and recommending appropriate funds or other
investments. Financial advisers are compensated for their services, generally
through sales commissions, and through 12b-1 and/or service fees deducted from
the fund's assets.

Morgan Stanley EAFE Index
- -------------------------
The Morgan Stanley Capital International EAFE Stock Index is an international
index including stocks traded on certain exchanges in Europe, Australia and the
Far East, weighted by capitalization.

13
<PAGE>

About your account

Investing in
the Fund

Choosing a share class

Class
A

o Class A shares have an up-front sales charge of up to 5.75% that you pay when
you buy the shares. The offering price for Class A shares includes the
front-end sales charge.

o If you invest $50,000 or more, your front-end sales charge will be reduced.

o Class A shares generally are not subject to a contingent deferred sales
charge.

Class A Sales Charges

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
Sales charge as % Sales charge as % of Dealer's commission as %
Amount of purchase of offering price amount invested of offering price
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.75% 6.15% 5.00%

$50,000 but
under $100,000 4.75% 5.03% 4.00%

$100,000 but
under $250,000 3.75% 3.91% 3.00%

$250,000 but
under $500,000 2.50% 2.57% 2.00%

$500,000 but
under $1 million 2.00% 2.01% 1.60%
- -------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Sales charge as % Sales charge as % of Dealer's commission as %
Amount of purchase of offering price amount invested of offering price
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1 million up to $5 million none none 1.00%

Next $20 million
up to $25 million none none 0.50%

Amount over $25 million none none 0.25%
- ------------------------------------------------------------------------------------------------------------
</TABLE>

N-R

Net asset value (NAV)
- ---------------------
The daily dollar value of one mutual fund share. Equal to a fund's net assets
divided by the number of shares outstanding.

14
<PAGE>

Class
B

o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.

o Because of the higher 12b-1 fees, Class B shares have higher expenses and any
dividends paid on these shares are lower than dividends on Class A shares.

o Approximately eight years after you buy them, Class B shares automatically
convert into Class A shares with a 12b-1 fee of no more than 0.35% (currently
no more than 0.30%). Conversion may occur as late as three months after the
eighth anniversary of purchase, during which time Class B's higher 12b-1 fees
apply.

o You may purchase up to $250,000 of Class B shares at any one time. The
limitation on maximum purchases varies for retirement plans.

Principal
- ---------
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.

Prospectus
- ----------
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.

Redeem
- ------
To cash in your shares by selling them back to the mutual fund.

Risk
- ----
Generally defined as variability of value; also credit risk, inflation risk,
currency and interest rate risk. Different investments involve different types
and degrees of risk.

15
<PAGE>

About your account (continued)

Class
C

o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.

o Because of the higher 12b-1 fees, Class C shares have higher expenses and pay
lower dividends than Class A shares.

o Unlike Class B shares, Class C shares do not automatically convert into
another class.

o You may purchase any amount less than $1,000,000 of Class C shares at any one
time. The limitation on maximum purchases varies for retirement plans.

S-S

Share classes
- -------------
Different classifications of shares; mutual fund share classes offer a variety
of sales charge choices.

16
<PAGE>

How to reduce your
sales charge

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Share class
Program How it works A B C
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Letter of Intent Through a Letter of Intent you agree X Although the Letter of Intent and
to invest a certain amount in Rights of Accumulation do not apply
Delaware Investment Funds (except to the purchase of Class B and C
money market funds with no sales shares, you can combine your
charge) over a 13-month period to purchase of Class A shares with your
qualify for reduced front-end sales purchase of B and C shares to
charges. fulfill your Letter of Intent or
qualify for Rights of Accumulation.

Reinvestment of Redeemed Up to 12 months after you redeem X
Shares shares, you can reinvest the
proceeds without paying a front-end
sales charge.

SIMPLE IRA, SEP IRA, These investment plans may qualify X Not available
SARSEP, Prototype Profit for reduced sales charges by
Sharing, Pension, combining the purchases of all
401(k), SIMPLE 401(k), members of the group. Members of
403(b)(7), and 457 these groups may also qualify to
Retirement Plans purchase shares without a front-end
sales charge and a waiver of any
contingent deferred sales charges.

- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

Standard deviation
- ------------------
A measure of an investment's volatility; for mutual funds, measures how much a
fund's total return has typically varied from its historical average.

Stock
- -----
An investment that represents a share of ownership (equity) in a corporation.
Stocks are often referred to as "equities."

17
<PAGE>

About your account (continued)

How to buy shares

[GRAPHIC OMITTED]

Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.

[GRAPHIC OMITTED]

T-V

Total return
- ------------
An investment performance measurement, expressed as a percentage, based on the
combined earnings from dividends, capital gains and change in price over a given
period.

18
<PAGE>

How to buy shares
(continued)

Once you have completed an application, you can generally open an account with
an initial investment of $1,000 and make additional investments at any time for
as little as $100. If you are buying shares in an IRA or Roth IRA under the
Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, or through
an Automatic Investing Plan, the minimum purchase is $250, and you can make
additional investments of only $25. The minimum for an Education IRA is $500.
The minimums vary for retirement plans other than IRAs, Roth IRAs or Education
IRAs.

Retirement plans

19
<PAGE>

About your account (continued)

How to redeem shares

[GRAPHIC OMITTED]

Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.

[GRAPHIC OMITTED]

By mail
You can redeem your shares (sell them back to the fund) by mail by
writing to: Delaware Investments, 1818 Market Street, Philadelphia, PA
19103-3682. All owners of the account must sign the request, and for redemptions
of $50,000 or more, you must include a signature guarantee for each owner.
Signature guarantees are also required when redemption proceeds are going to an
address other than the address of record on an account.

[GRAPHIC OMITTED]

By telephone
You can redeem up to $50,000 of your shares by telephone. You may have the
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you
may have the proceeds sent directly to your bank by wire. Bank information must
be on file before you request a wire redemption.

[GRAPHIC OMITTED]

Through automated shareholder services
You can redeem shares through Delaphone, our automated telephone
service, or through our web site, www.delawarefunds.com. For more information
about how to sign up for these services, call our Shareholder Service Center at
800.523.1918.

20
<PAGE>

How to redeem shares
(continued)

If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.

If you are required to pay a contingent deferred sales charge when you redeem
your shares, the amount subject to the fee will be based on the shares' net
asset value when you purchased them or their net asset value when you redeem
them, whichever is less. This arrangement assures that you will not pay a
contingent deferred sales charge on any increase in the value of your shares.
You also will not pay the charge on any shares acquired by reinvesting dividends
or capital gains. If you exchange shares of one fund for shares of another, you
do not pay a contingent deferred sales charge at the time of the exchange. If
you later redeem those shares, the purchase price for purposes of the contingent
deferred sales charge formula will be the price you paid for the original
shares--not the exchange price. The redemption price for purposes of this
formula will be the NAV of the shares you are actually redeeming.

Account minimum

21
<PAGE>

About your account (continued)

Special services

To help make investing with us as easy as possible, and to help you build your
investments, we offer the following special services.

Automatic
Investing Plan

The Automatic Investing Plan allows you to make regular monthly investments
directly from your checking account.

Direct Deposit

With Direct Deposit you can make additional investments through payroll
deductions, recurring government or private payments such as Social Security or
direct transfers from your bank account.

Wealth Builder Option

Dividend
Reinvestment Plan

Exchanges

22
<PAGE>

Special services
(continued)

MoneyLine(SM)
On Demand Service

MoneyLine(SM)
Direct Deposit Service

Systematic
Withdrawal Plan

Dividends,
distributions
and taxes

Dividends and capital gains, if any, are paid annually. We automatically
reinvest all dividends and any capital gains, unless you tell us otherwise.

We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.

23
<PAGE>

Implementation of investment
objectives and policies

In attempting to achieve its investment objective and policies, the Fund may
employ, among others, one or more of the strategies set forth below.

Convertible
securities

U.S. government
securities

The Fund may invest in securities of the U.S. government. Securities guaranteed
by the U.S. government include:

o direct obligations of the U.S. Treasury (such as Treasury bills, notes and
bonds) and

o federal agency obligations guaranteed as to principal and interest by the U.S.
Treasury (such as GNMA certificates and Federal Housing Administration
debentures).

24
<PAGE>

Repurchase
agreements

When-issued
securities and firm
commitment
agreements

The 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 the 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 the
Fund's portfolio securities decline while it is in a leveraged position, greater
depreciation of its net assets would likely occur than were it not in such a
position. The Fund 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.

25
<PAGE>

Implementation of investment objectives and policies (continued)

Money market
instruments

The Fund 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:

o commercial paper (short-term notes up to 9 months issued by corporations or
governmental bodies);

o corporate bonds and notes (corporate obligations that mature, or that may be
redeemed, in one year or less);

o variable rate demand notes, short-term tax-exempt obligations; and

o 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.

Strategic
transactions

General. The Fund may, but is 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 Fund
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 the 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

26
<PAGE>

Strategic
transactions
(continued)

Strategic transaction is a function of numerous variables including market
conditions. The ability of the 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 Fund 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

In addition to the above limitations, the Fund will not:

o sell futures contracts, purchase put options or write call options if, as a
result, more than 25% of its total assets would be hedged with futures and
options under normal conditions;

o purchase call options if, as a result, the current value of option premiums
for call options purchased by the Fund would exceed 5% of its 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.

Options transactions

27
<PAGE>

Implementation of investment objectives and policies (continued)

Options transactions
(continued)

Forward foreign
currency exchange
contracts

Futures contracts
and options thereon

Swap agreements

28
<PAGE>

Swap agreements
(continued)

Special risks of
strategic
transactions

o 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;

o imperfect correlation between the price of options and futures contracts and
options thereon and movements in the prices of securities being hedged;

o the fact that skills need to use these strategies are different from those
needed to select Fund securities;

o the possible absence of a liquid secondary market for any particular
instrument at any time;

o the possible need to defer closing out certain hedged positions to avoid
adverse tax consequences; and

o the possible inability of the Fund to purchase or sell a security at a time
that otherwise would be favorable for it to do so, or the possible need for
the Fund to sell a security at a disadvantageous time, due to the need for the
Fund to maintain "cover" or to segregate securities in connection with
strategic transactions.

29
<PAGE>

Implementation of investment objectives and policies (continued)

Special risks of
strategic
transactions
(continued)

* * *

30
<PAGE>

Certain management considerations

Year 2000

Investments by
fund of funds

Overseas Equity Fund accepts investments from the series portfolios of Delaware
Group Foundation Funds, a fund of funds. From time to time, the Fund may
experience large investments or redemptions due to allocations or rebalancings
by Foundation Funds. While it is impossible to predict the overall impact of
these transactions over time, there could be adverse effects on portfolio
management. For example, the Fund 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 transaction costs or portfolio turnover. The manager will monitor
transactions by Foundation Funds and will attempt to minimize any adverse
effects on both Overseas Equity Fund and Foundation Funds as a result of these
transactions.

31
<PAGE>
Financial information

The Financial highlights table is intended to help you understand the Fund's
financial performance. All "per share" information reflects financial results
for a single Fund share. The information for the years ended October 31,1998 and
1997 has been audited by Ernst & Young LLP, whose report, along with the Fund's
financial statements, is included in the Fund's annual report, which is
available upon request by calling 800-523-1918. The information for the fiscal
periods ending on or before October 31, 1996 has audited by the Fund's previous
independent auditors.

<TABLE>
<CAPTION>
Financial highlights
- ------------------------------------------------------------------------------------------------------------------------------------
Class A

Year Period 12/3/93(1)
Ended 10/31 to
Overseas Equity Fund 1998(5) 1997(5) 1996(6) 1995 10/31/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.520 $12.390 $11.400 $11.000 $10.000
Income (loss) from investment operations
Net investment income (loss) 0.091 (0.060) (0.060) 0.010 0.020
Net realized and unrealized gain (loss) on investments
and foreign currencies (1.501) (0.960) 1.073 0.400 1.010
------- ------- ------- ------- -------
Total from investment operations (1.410) (0.900) 1.013 0.400 1.030
------- ------- ------- ------- -------
Less dividends and distributions
Dividends from net investment income (0.520) (0.440) (0.023) (0.010) (0.030)
Distributions from net realized gain on investments (1.640) (0.330) none none none
------- ------- ------- ------- -------
Total dividends and distributions (2.160) (0.770) (0.023) (0.010) (0.030)
------- ------- ------- ------- -------
Net asset value, end of period $ 8.950 $12.520 $12.390 $11.400 $11.000
======= ======= ======= ======= =======
Total return(2) (12.95%)(3) 7.74% 8.90%(3) 3.81%(3) 10.25%(3)
Ratios and supplemental data
Net assets, end of period (000 omitted) $ 2,034 $10,868 $14,886 $13,018 $11,721
Ratio of expenses to average net assets 1.83% 1.80% 1.82% 1.85% 1.85%(4)
Ratio of expenses to average net assets prior to
expense limitation 3.75% N/A 2.60% 2.96% 3.56%(4)
Ratio of net investment income (loss) to average
net assets 0.93% (0.45%) (0.51%) 0.00% 0.25%(4)
Ratio of net investment loss to average net assets
prior to expense limitation (0.99%) N/A (1.29%) (1.11%) (1.96%)(4)
Portfolio turnover 87% 18% 21% 9% 6%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Volatility
- ------------------------------------------------------------------------------------------------------------------------------------
Period 12/3/93(1)
Year Ended 10/31 to
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10.25%(3)
7.74% 8.90%(3)

3.81%(3)

-12.95%(3)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Volatility, as indicated
by year-by-year return(2)

Volatility chart is not part of the
Financial highlights and
has not been audited
by Ernst & Young LLP.

(1) Commencement of operations.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Total return reflects voluntary expense caps.
(4) Annualized.
(5) To calculate the net investment income per share, we have used the "average
shares outstanding method." This means that we have divided the total net
investment income by the average number of shares outstanding during the
period to determine the net investment income per share.
(6) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.

32
<PAGE>
How to read the
Financial highlights
- --------------------------------------------------------------------------------
Net investment Net asset value (NAV)
income
This is the value of a
Net investment income mutual fund share,
includes dividend and calculated by dividing the
interest income earned net assets by the number
from the Fund's securities; of shares outstanding.
it is after expenses
have been deducted.

Net realized and
unrealized gain (loss)
on investments and
foreign currencies

A realized gain occurs
when we sell an investment
at a profit, while a realized
loss occurs when we sell an
investment at a loss. When an
investment increases or
decreases in value but we do
not sell it, we record an
unrealized gain or loss. The
amount of realized gain per
share that we pay to shareholders
is listed under "Less dividends
and distributions-Distributions
from net realized gain on
investments."

33
<PAGE>
Financial information (continued)

<TABLE>
<CAPTION>
Financial highlights
- ------------------------------------------------------------------------------------------------------------------------------------
Class B

Period 3/29/94(1)
Year Ended 10/31 to
Overseas Equity Fund 1998(5) 1997(5) 1996(6) 1995 10/31/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.540 $11.560 $10.710 $10.400 $10.000
Income (loss) from investment operations
Net investment income (loss) 0.033 (0.140) (0.060) (0.020) none
Net realized and unrealized gain (loss) on investments
and foreign currencies (1.383) 0.890 0.930 0.350 0.430
------- ------- ------- ------- -------
Total from investment operations (1.350) 0.750 0.870 0.330 0.430
------- ------- ------- ------- -------
Less dividends and distributions
Dividends from net investment income (0.520) (0.440) (0.020) (0.020) (0.030)
Distributions from net realized gain on investments (1.640) (0.330) none none none
------- ------- ------- ------- -------
Total dividends and distributions (2.160) (0.770) (0.020) (0.220) (0.030)
------- ------- ------- ------- -------
Net asset value, end of period $ 8.030 $11.540 $11.560 $10.710 $10.400
======= ======= ======= ======= =======
Total return(2) (13.66%)(3) 6.95% 8.16%(3) 3.19%(3) 4.28%(3)
Ratios and supplemental data
Net assets, end of period (000 omitted) $1,166 $ 1,450 $ 1,208 $1,183 $523
Ratio of expenses to average net assets 2.53% 2.50% 2.50% 2.50% 2.50%(4)
Ratio of expenses to average net assets prior to
expense limitation 4.45% N/A 3.28% 3.61% 4.22%(4)
Ratio of net investment loss to average net assets 0.23% (1.16%) (1.19%) (0.57%) (0.37%)(4)
Ratio of net investment loss to average net assets
prior to expense limitation (1.69%) N/A (1.97%) (1.68%) (2.09%)(4)
Portfolio turnover 87% 18% 21% 9% 6%
</TABLE>

<TABLE>
<CAPTION>
Volatility
- ------------------------------------------------------------------------------------------------------------------------------------
Period 3/29/94(1)
Year Ended 10/31 to
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
8.16%
6.95%
4.28%(3)
3.19%(3)

-13.66%(3)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Volatility, as indicated
by year-by-year return(2)

Volatility chart is not part of the
Financial highlights and
has not been audited
by Ernst & Young LLP.

(1) Commencement of operations.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Total return reflects voluntary expense caps.
(4) Annualized.
(5) To calculate the net investment income per share, we have used the "average
shares outstanding method." This means that we have divided the total net
investment income by the average number of shares outstanding during the
period to determine the net investment income per share.
(6) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.

34
<PAGE>

How to read the
Financial highlights
(continued)
- --------------------------------------------------------------------------------
Total return Ratio of expenses to
average net assets
This represents the rate that an
investor would have earned or lost The expense ratio is the percentage
on an investment in the Fund. In of net assets that a fund pays
calculating this figure for the annually for operating expenses and
financial highlights table, we management fees. These expenses
include applicable fee waivers, include accounting and
exclude front-end and contingent administration expenses, services
deferred sales charges, and assume for shareholders, and similar
the shareholder has reinvested all expenses.
dividends and realized gains.

Net assets

Net assets represent the total
value of all the assets in the
Fund's portfolio, less any
liabilities, that are attributable
to that class of the Fund.

35
<PAGE>

Financial information (continued)

<TABLE>
<CAPTION>
Financial highlights
- ------------------------------------------------------------------------------------------------------------------------------------
Class C
Period 5/10/94(1)
Year Ended 10/31 to
Overseas Equity Fund 1998(5) 1997(5) 1996(6) 1995 10/31/94
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.550 $11.580 $10.730 $10.430 $10.000
Income (loss) from investment operations
Net investment income (loss) 0.033 (0.140) (0.060) (0.060) 0.010
Net realized and unrealized gain (loss) on investments
and foreign currencies (1.383) 0.880 0.930 0.390 0.440
------- ------- ------- ------- -------
Total from investment operations (1.350) 0.740 0.870 0.330 0.450
------- ------- ------- ------- -------
Less dividends and distributions
Dividends from net investment income (0.520) (0.440) (0.020) (0.030) (0.020)
Distributions from net realized gain on investments (1.640) (0.330) none none none
------- ------- ------- ------- -------
Total dividends and distributions (2.160) (0.770) (0.020) (0.030) (0.020)
------- ------- ------- ------- -------
Net asset value, end of period $ 8.040 $11.550 $11.580 $10.730 $10.430
======= ======= ======= ======= =======
Total return(2) (13.67%)(3) 6.85% 8.15%(3) 3.16%(3) 4.45%(3)
Ratios and supplemental data
Net assets, end of period (000 omitted) $179 $159 $ 112 $43 $38
Ratio of expenses to average net assets 2.53% 2.50% 2.50% 2.50% 2.50%(4)
Ratio of expenses to average net assets prior to
expense limitation 4.45% N/A 3.28% 3.61% 4.23%(4)
Ratio of net investment loss to average net assets 0.23% (1.16%) (1.19%) (0.62%) 0.16%(4)
Ratio of net investment loss to average net assets prior
to expense limitation (1.69%) N/A (1.97%) (1.73%) (1.57%)(4)
Portfolio turnover 87% 18% 21% 9% 6%
</TABLE>

<TABLE>
<CAPTION>
Volatility
- ------------------------------------------------------------------------------------------------------------------------------------
Period 5/10/94(1)
Year Ended 10/31 to
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>

8.15%(3)
6.85%
4.45%(3)
3.16%(3)
-13.67%(3)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Volatility, as indicated by year-by-year return(2)

Volatility chart is not part of the
Financial highlights and
has not been audited
by Ernst & Young LLP.

(1) Commencement of operations.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Total return reflects voluntary expense caps.
(4) Annualized.
(5) To calculate the net investment income per share, we have used the "average
shares outstanding method." This means that we have divided the total net
investment income by the average number of shares outstanding during the
period to determine the net investment income per share.
(6) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.

36
<PAGE>

How to read the
Financial highlights
(continued)
- --------------------------------------------------------------------------------
Ratio of net investment income to Portfolio turnover
average net assets
This figure tells you the amount of
We determine this ratio by dividing trading activity in a fund's
net investment income by average portfolio. For example, a fund with
net assets. a 50% turnover has bought and sold
half of the value of its total
investment portfolio during the
stated period.

37
<PAGE>

Overseas Equity Fund

You can find reports and
other information about the Fund on the SEC web site (http://www.sec.gov), or
you can get copies of this information, after payment of a duplicating fee, by
writing to the Public Reference Section of the SEC, Washington, D.C. 20549-6009.
Information about the Fund, including its Statement of Additional Information,
can be reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. You can get information on the public
reference room by calling the SEC at 1-800-SEC-0330.

Web site

www.delawarefunds.com

E-mail

[email protected]

Shareholder Service Center

800.523.1918

Call the Shareholder Service Center:
Monday to Friday, 8 a.m. to 8 p.m. Eastern time.

o For fund information; literature; price, yield and performance figures.

o For information on existing regular investment accounts and retirement plan
accounts including wire investments; wire redemptions; telephone redemptions and
telephone exchanges.

Delaphone Service

800.362.FUND (800.362.3863)

o For convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a day,
use this Touch-Tone(R) service.

Investment Company Act file number: 811-7972

CUSIP NASDAQ
----- ------
Class A 245917885 DEWGX
Class B 245917877 DEWBX
Class C 245917869 DEWCX

DELAWARE
INVESTMENTS
- -----------
Philadelphia o London

P-109 [--] PP 2/99

<PAGE>
DELAWARE
INVESTMENTS
- ---------------------
Philadelphia o London

Overseas Equity
Fund

Institutional Class

Prospectus March 1, 1999

International Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.

<PAGE>

Table of contents

...............................................................................
Fund profile page 2
Overseas Equity Fund 2
...............................................................................
How we manage the Fund page 4
Our investment strategies 4
The risks of investing in the Fund 5
...............................................................................
Who manages the Fund page 11
Investment manager and Sub-adviser 11
Portfolio managers 11
Fund administration (Who's who) 12
...............................................................................
About your account page 13
Investing in the Fund 13
Institutional Class shares 13
How to buy shares 14
How to redeem shares 16
Account minimum 17
Exchanges 17
Dividends, distributions and taxes 17
...............................................................................
Implementation of investment
objectives and policies page 18
...............................................................................
Certain management considerations page 25
...............................................................................
Financial information page 26

1
<PAGE>
Profile: Overseas Equity Fund

What is the Fund's goal?

Overseas Equity Fund seeks to maximize total return (capital appreciation and
income) principally through investments in an internationally diversified
portfolio of equity securities. Although the Fund will strive to achieve its
goal, there is no assurance that it will.

Who should invest in the Fund

o Investors with long-term financial goals.

o Investors looking for capital growth potential.

o Investors willing to accept the sometimes sharp and unpredictable
fluctuations in value that a foreign fund can experience. These
fluctuations can be even more pronounced for funds like Overseas Equity
Fund, which invest in developing countries.

Who should not invest in the Fund

o Investors with short-term financial goals.

o Investors who are unwilling to accept share prices that may fluctuate,
sometimes significantly, over the short term.

o Investors whose primary goal is to receive current income.

o Investors who do not understand the significant risks associated with
international investing.

An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

<PAGE>

How has the Overseas Equity Fund performed?
- --------------------------------------------------------------------------------

This bar chart can help you evaluate the potential risks of investing in the
Fund. We show how returns for the Fund's Institutional Class shares have varied
over the past five calendar years, as well as average annual returns of all
shares for one year and since inception. The Fund's past performance does not
necessarily indicate how it will perform in the future. The Class' returns
reflect voluntary expense caps. The returns would be lower without the voluntary
caps.

[BAR CHART APPEARS HERE]

Year-by-year total return (Institutional Class)

1995 1996 1997 1998
10.19% 9.88% 2.02% -6.59%

As of December 31, 1998, the Fund had a year-to-date return of -6.59%. During
the periods illustrated in this bar chart, the Institutional Class' highest
return was 11.41% for the quarter ended June 30, 1997 and its lowest return was
- -13.73% for the quarter ended September 30, 1998.

Average annual returns for periods ending 12/31/98
- --------------------------------------------------------------------------------
Institutional Morgan Stanley
Class EAFE Index
1 year -6.59% 20.33%
Since inception (2/3/94) 2.71% 7.87%
- --------------------------------------------------------------------------------
The table above shows the Fund's average annual returns over various time
periods compared to the performance of the Morgan Stanley EAFE Index. You should
remember that unlike the Fund, the index is unmanaged and doesn't reflect the
actual costs of operating a mutual fund, such as the costs of buying, selling,
and holding the securities.

What are the Fund's fees and expenses?

You do not pay sales charges directly from your investments when you buy or sell
shares of the Institutional Class.

Annual fund operating expenses are deducted from the Fund's assets before it
pays dividends and before its net asset value and total return are calculated.
We will not charge you separately for these expenses. These expenses are based
on amounts incurred during the Fund's most recent fiscal year.

<PAGE>

This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds with similar investment
objectives. We show the cumulative amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5% return over the time shown.3 This is an
example only, and does not represent future expenses, which may be greater or
less than those shown here.

- --------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
purchases as a percentage of offering price none
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none
Maximum sales charge (load) imposed on
reinvested dividends none
Redemption fees none
Exchange Fees(1) none
- --------------------------------------------------------------------------------
Management fees 1.00%
Distribution and service (12b-1) fees none
Other expenses 2.45%
Total operating expenses(2) 3.45%
- --------------------------------------------------------------------------------
1 year $348
3 years $1,059
5 years $1,793
10 years $3,730

(2) The investment manager has agreed to waive fees and pay expenses May 1, 1998
through April 30, 1999 in order to prevent total operating expenses
(excluding any taxes, interest, brokerage fees and extraordinary expenses)
from exceeding 1.55% of average daily net assets. The manager's voluntary
commitments of waiver and payment were different prior to May 1, 1998.

(3) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show. In addition, the example does not assume the voluntary expense
limitation discussed in footnote 2.
3
<PAGE>
How we manage the Fund

Our investment strategies

We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.

How to use
this glossary

Glossary A-B

Average maturity
- ----------------
An average of when the individual bonds and other debt securities held in a
portfolio will mature.

4
<PAGE>
How we manage the Funds (continued)

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 fixed-income 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 "The risks of investing
in the Fund" on page 6. For a complete list of the Fund's investment
restrictions, see Investment Restrictions in the Statement of Additional
Information.

Certain investment guidelines

Illiquid securities Up to 10% of the assets of the Fund may be invested in
securities that are not readily marketable, including, where applicable:

o repurchase agreements with maturities greater than seven calendar days;

o time deposits maturing in more than seven calendar days;

o certain instruments, futures contracts and options thereon for which there is
no liquid secondary market;

o certain over-the-counter options, as described in the Statement of Additional
Information;

o certain variable rate demand notes having a demand period of more than seven
days; and

o certain Rule 144A restricted securities (Rule 144A securities for which a
dealer or institutional market exists will not be considered illiquid).

5
<PAGE>
How we manage the Funds (continued)

Other guidelines

In addition, the 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. The
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 the 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 the Fund's outstanding shares (as well as other non-fundamental
restrictions) is contained in the Statement of Additional Information.

The risks of investing in the Fund

We maintain a long-term investment approach and focus on stocks we believe can
appreciate over an extended time frame regardless of interim market
fluctuations. In deciding what portion of our portfolio should be invested in
any individual country, we evaluate the country's economy, politics, liquidity,
corporate earnings, interest rates and valuations relative to other countries.

We hold a number of different securities in a variety of sectors in order to
minimize the impact that any one poorly performing security would have on
Overseas Equity Fund's overall performance.

<PAGE>

Overseas Equity Fund may try to hedge its currency risk by purchasing foreign
currency exchange contracts. By agreeing to purchase or sell foreign currencies
at a pre-set price on a future date, Overseas Equity Fund strives to protect the
value of the stocks it owns from future changes in currency rates. Overseas
Equity Fund will use currency exchange contracts only for defensive measures,
not to enhance portfolio returns. However, there is no assurance that a strategy
such as this will be successful.
- --------------------------------------------------------------------------------
C-D

Capital
- -------
The amount of money you invest.

Capital appreciation
- --------------------
An increase in the value of an investment.

Compounding
- -----------
Earnings on an investment's previous earnings.

6
<PAGE>

- --------------------------------------------------------------------------------
Risks
- --------------------------------------------------------------------------------
Political risk The risk that countries or the entire region where we invest may
experience political instability, which may cause greater fluctuation in the
value of our investments due to changes in currency exchange rates, governmental
seizures or nationalization of assets.

Emerging market risk is the possibility that the risks associated with
international investing will be greater in emerging markets than in more
developed foreign markets because, among other things, emerging markets may have
less stable political and economic environments.

Inefficient market risk Foreign markets may be less liquid, have greater price
volatility, less regulation and higher transaction costs than U.S. markets.

Information risk Foreign companies are subject to different accounting, auditing
and financial reporting standards than U.S. companies. There may be less
information available about foreign issuers than domestic issuers. Furthermore,
regulatory oversight of foreign issuers may be less stringent or less
consistently applied than in the United States.

- --------------------------------------------------------------------------------
How we strive to manage them
- --------------------------------------------------------------------------------
Overseas Equity Fund
- --------------------------------------------------------------------------------
We carefully evaluate the political situations in the countries where we invest
and take into account any potential risks before we select securities for the
portfolio. However, there is no way to eliminate political risk when investing
internationally.

We carefully select securities within emerging markets and strive to consider
all relevant risks associated with an individual company. Typically a larger
percentage of our net assets is allocated to established countries than to
developing countries. However, we cannot eliminate emerging market risk and
consequently encourage shareholders to invest in this Fund only if they have a
long-term time horizon, over which the potential of individual securities is
more likely to be realized.

The Fund will attempt to reduce these risks through investing in a number of
different countries, credit analysis and attention to trends in the economy,
industries and financial markets. The fact that we are investing for the long
term makes short-term liquidity less important and helps to reduce the high
transaction costs that may be associated with funds which engage in more
short-term trading.

We conduct a great deal of fundamental research on the companies we invest in
rather than relying solely on information available through financial reporting.
We believe this will help us better uncover any potential weakness in individual
companies.
- --------------------------------------------------------------------------------

Consumer Price Index (CPI)
- --------------------------
Measurement of U.S. inflation; represents the price of a basket of commonly
purchased goods.

Corporate bond
- --------------
A debt security issued by a corporation. See bond.

Cost Basis
- ----------
The original purchase price of an investment, used in determining capital gains
and losses.

Depreciation
- ------------
A decline in an investment's value.

7
<PAGE>

Additional information on risk factors

Fixed-income
securities

Foreign
investments

Because foreign securities generally are denominated and pay dividends or
interest in foreign currencies, and the Fund holds various foreign currencies
from time to time, the value of the net assets of the Fund 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 Fund is 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-adviser
attempt to manage exchange rate risk through active currency management, but
there is no guarantee that they will be successful.

D-F

Diversification
- ---------------
The process of spreading investments among a number of different securities,
asset classes or investment styles to reduce the risks of investing.

Dividend distribution
- ---------------------
Payments to mutual fund shareholders of dividends passed along from the fund's
portfolio of securities.

Duration
- --------
A measurement of a fixed-income investment's price volatility. The larger the
number, the greater the likely price change for a given change in interest
rates.

<PAGE>

Additional information on risk factors (continued)

Borrowing

9
<PAGE>
Securities
lending

Temporary defensive
position

Portfolio
turnover

High turnover in the 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.

* * *

I-N

Inflation
- ---------
The increase in the cost of goods and services over time. U.S. inflation is
frequently measured by changes in the Consumer Price Index (CPI).

Investment goal
- ---------------
The objective, such as long-term capital growth or high current income, that a
mutual fund pursues.

Management fee
- --------------
The amount paid by a mutual fund to the investment adviser for management
services, expressed as an annual percentage of the fund' s average daily net
assets.

<PAGE>

Who manages the Fund

Investment manager
and sub-adviser

Portfolio
managers

Clive A. Gillmore and Robert Akester have had primary responsibility for making
day-to-day investment decisions for the Fund since September 15, 1997.

Maturity
- --------
The length of time until a bond issuer must repay the underlying loan principal
to bondholders.

11
<PAGE>

Who's who?

This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.

Board of directors

Investment manager
Delaware Management Company
One Commerce Square
Philadelphia, PA 19103

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

The Fund

Sub-adviser
Delaware International Advisers LTD.
Third Floor 80 Cheapside
London England EC2V 6EE

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

Service agent
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

Portfolio managers
(see page 11 for details)

Shareholders

Sub-adviser A sub-adviser is a company generally responsible for the management
of the fund's assets. They are selected and supervised by the investment
manager.

<PAGE>

Portfolio managers Portfolio managers are employed by the investment manager or
sub-adviser to make investment decisions for individual portfolios on a
day-to-day basis.

Custodian Mutual funds are legally required to protect their portfolio
securities and typically place them with a qualified bank custodian who
segregates fund securities from other bank assets

N-R

Net asset value (NAV)
- ---------------------
The daily dollar value of one mutual fund share. Equal to a fund's net assets
divided by the number of shares outstanding.

<PAGE>

About your account

Investing in
the Fund

Institutional Class shares are available for purchase only by the following:

o tax-exempt employee benefit plans of the manager or its affiliates and
securities dealer firms with a selling agreement with the distributor

o institutional advisory accounts of the manager, or its affiliates and those
having client relationships with Delaware Investment Advisers, an affiliate 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

Price to earnings ratio
- -----------------------
A measure of a stock's value calculated by dividing the current market price of
a share of stock by its annual earnings per share. A stock selling for $100 per
share with annual earnings per share of $5 has a P/E of 20.

Principal
- ---------
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.

Prospectus
- ----------
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.

Redeem
- ------
To cash in your shares by selling them back to the mutual fund.

Risk
- ----
Generally defined as variability of value; also credit risk, inflation risk,
currency and interest rate risk. Different investments involve different types
and degrees of risk.

13
<PAGE>

About your account (continued)

How to buy shares

By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that you may not exchange your shares for Class B or Class C
shares. To open an account by exchange, call the Shareholder Service Center at
800.510.4015.

Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.

S-S

Share classes
- -------------
Different classifications of shares; mutual fund share classes offer a variety
of sales charge choices.

<PAGE>

How to buy shares
(continued)

Standard deviation
- ------------------
A measure of an investment's volatility; for mutual funds, measures how much a
fund's total return has typically varied from its historical average.

Stock
- -----
An investment that represents a share of ownership (equity) in a corporation.
Stocks are often referred to as "equities."

<PAGE>

About your account (continued)

How to redeem shares

By mail
You can redeem your shares (sell them back to the fund) by mail by writing to:
Delaware Investments, 1818 Market Street, Philadelphia, PA 19103-3682. All
owners of the account must sign the request, and for redemptions of $50,000 or
more, you must include a signature guarantee for each owner. You can also fax
your written request to 215-255-8864. Signature guarantees are also required
when redemption proceeds are going to an address other than the address of
record on an account.

Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.

T-V

Total return
- ------------
An investment performance measurement, expressed as a percentage, based on the
combined earnings from dividends, capital gains and change in price over a given
period.

<PAGE>

How to redeem shares
(continued)

If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.

Account minimum

If you redeem shares and your account balance falls below $250, the Fund may
redeem your account after 60 days' written notice to you.

Exchanges

Dividends,
distributions
and taxes

Dividends and capital gains, if any, are paid annually. We automatically
reinvest all dividends and any capital gains.

We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.

<PAGE>
Implementation of investment objectives and policies
- --------------------------------------------------------------------------------

In attempting to achieve its investment objective and policies, the Fund may
employ, among others, one or more of the strategies set forth below.

Convertible
securities

U.S. government
securities

The Fund may invest in securities of the U.S. government. Securities guaranteed
by the U.S. government include:

o direct obligations of the U.S. Treasury (such as Treasury bills, notes and
bonds) and

o federal agency obligations guaranteed as to principal and interest by the U.S.
Treasury (such as GNMA certificates and Federal Housing Administration
debentures).

18
<PAGE>

Repurchase
agreements

When-issued
securities and firm
commitment
agreements

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 Fund 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. The Fund 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. The 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 Fund 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.

19
<PAGE>
Implementation of investment objectives and policies (continued)

Money market
instruments

The Fund 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:

o commercial paper (short-term notes up to 9 months issued by corporations or
governmental bodies);

o corporate bonds and notes (corporate obligations that mature, or that may be
redeemed, in one year or less);

o variable rate demand notes, short-term tax-exempt obligations; and

o 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.

Strategic
transactions

General. The Fund may, but is 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 Fund
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 the 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

20
<PAGE>

Strategic
transactions
(continued)

Limitations on
futures and options
transactions

In addition to the above limitations, the Fund will not:

o sell futures contracts, purchase put options or write call options if, as a
result, more than 25% of its total assets would be hedged with futures and
options under normal conditions;

o purchase call options if, as a result, the current value of option premiums
for call options purchased by the Fund would exceed 5% of its 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.

Options
transactions

21
<PAGE>
Implementation of investment objectives and policies (continued)

Options
transactions
(continued)

Forward foreign
currency exchange
contracts

Futures contracts
and options thereon

22
<PAGE>
Swap agreements

Special risks
of strategic
transactions

o 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;

o imperfect correlation between the price of options and futures contracts and
options thereon and movements in the prices of securities being hedged;

o the fact that skills needed to use these strategies are different from those
needed to select Fund securities;

o the possible absence of a liquid secondary market for any particular
instrument at any time;

o the possible need to defer closing out certain hedged positions to avoid
adverse tax consequences; and

o the possible inability of the Fund to purchase or sell a security at a time
that otherwise would be favorable for it to do so, or the possible need for
the Fund to sell a security at a disadvantageous time, due to the need for the
Fund to maintain "cover" or to segregate securities in connection with
strategic transactions.

23
<PAGE>
Implementation of investment objectives and policies (continued)

Special risks
of strategic
transactions (continued)

* * *

<PAGE>
Certain management considerations
- --------------------------------------------------------------------------------

Year 2000

Investments by
fund of funds

25
<PAGE>
Financial information
- --------------------------------------------------------------------------------

Financial highlights
- --------------------------------------------------------------------------------

The Financial highlights table is intended to help you understand the Fund's
financial performance. All "per share" information reflects financial results
for a single Fund share. The information for the years ended October 31, 1998
and 1997 has been audited by Ernst & Young LLP, whose report, along with the
Fund's financial statements, is included in the Fund's annual report, which is
available upon request by calling 800-523-1918. The information for the fiscal
periods ending on or before October 31, 1996 has been audited by the Fund's
previous independent auditors.

Institutional Class
- ---------------------------------------------------------------------------------------------------------------------------
Year Ended Period 2/3/94(1)
10/31 to
Overseas Equity Fund 1998(5) 1997(5) 1996(6) 1995 10/31/94
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.480 $12.320 $11.440 $11.020 $10.500
Income (loss) from investment operations
Net investment income (loss) 0.123 (0.020) (0.060) 0.040 0.040
Net realized and unrealized gain (loss)
on investments and foreign currencies (1.513) 0.950 0.963 0.410 0.520
------- ------- ------- ------- -------
Total from investment operations (1.390) 0.930 0.903 0.450 0.560
------- ------- ------- ------- -------
Less dividends and distributions
Dividends from net investment income (0.520) (0.440) (0.023) (0.030) (0.040)
Distributions from net realized gain
on investments (1.640) (0.330) none none none
------- ------- ------- ------- -------
Total dividends and distributions (2.160) (0.770) (0.023) (0.030) (0.040)
------- ------- ------- ------- -------
Net asset value, end of period $ 8.930 $12.480 $12.320 $11.440 $11.020
======= ======= ======= ======= =======
Total return(2) (12.82%)(3) 8.04% 7.91%(3) 4.22%(3) 5.26%(3)
Ratios and supplemental data
Net assets, end of period (000 omitted) $59 $60 $284 $161 $63
Ratio of expenses to average net assets 1.53% 1.50% 1.50% 1.50% 1.50%(4)
Ratio of expenses to average net assets
prior to expense limitation 3.45% N/A 2.28% 2.61% 3.21%(4)
Ratio of net investment income (loss)
to average net assets 1.23% (0.15%) (0.19%) 0.40% 0.76%(4)
Ratio of net investment loss to average
net assets prior to expense limitation (0.69%) N/A (0.97%) (0.71%) (0.95%)(4)
Portfolio turnover 87% 18% 21% 9% 6%
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

Volatility
- --------------------------------------------------------------------------------
Volatility, as indicated by year-by-year return (2)(3) Volatility chart is not
part of the Financial highlights and has not been audited by Ernst & Young LLP.

Year Ended 10/31 to Period 2/3/94(1)
1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------
8.04%
7.91%(3)
5.26%(3)
4.22%(3)
- -----------------------------------------------------------------------------
- -12.82%(3)

(1) Commencement of operations.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions.
(3) Total return reflects expense limitations in effect during the period.
(4) Annualized.
(5) To calculate the net investment income per share, we have used the "average
shares outstanding method." This means that we have divided the total net
investment income by the average number of shares outstanding during the
period to determine the net investment income per share.
(6) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.

26
<PAGE>

How to read the
Financial highlights

Net investment income

Net investment income includes dividend and interest income earned from the
Fund's securities after its expenses have been deducted.

Net realized and unrealized gain (loss) on investments and foreign currency

Net asset value (NAV)

This is the value of a mutual fund share, calculated by dividing the net assets
by the number of shares outstanding.

Total return

This represents the rate that an investor would have earned or lost on an
investment in the Fund. In calculating this figure for the financial highlights
table, we include applicable fee waivers and assume the shareholder has
reinvested all dividends and realized gains.

Net assets

Net assets represent the total value of all the assets in the Fund's portfolio,
less any liabilities that are attributable to that class of the Fund.

Ratio of expenses to average net assets

Ratio of net investment income to average net assets

We determine this ratio by dividing net investment income by average net assets.

Portfolio turnover

27
<PAGE>

This page intentionally left blank

<PAGE>
Overseas Equity Fund

Web site

www.delawarefunds.com

E-mail

[email protected]

Shareholder Service Center

800.523.1918

Delaphone Service

800.362.FUND (800.362.3863)

o For convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this Touch-Tone(R) service.

Registrant's Investment Company Act file number: 811-7972

CUSIP NASDAQ
----- ------
Institutional Class 245917851 DEWIX

DELAWARE
INVESTMENTS
- -----------
Philadephia o London

P-112 [--] PP 2/99
<PAGE>
DELAWARE
INVESTMENTS
- -----------
Philadelphia o London

New Pacific Fund

Class A o Class B o Class C

Prospectus March 1, 1999

International Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.

<PAGE>

Table of contents

................................................................................
Fund profile page 2
New Pacific Fund 2
................................................................................
How we manage the Fund page 5
Our investment strategies 5
The risks of investing in the Fund 7
................................................................................
Who manages the Fund page 12
Investment manager and sub-adviser 12
Portfolio managers 12
Fund administration (Who's who) 13
................................................................................
About your account page 14
Investing in the Fund 14
Choosing a share class 14
How to reduce your sales charge 17
How to buy shares 18
Retirement plans 19
How to redeem shares 20
Account minimum 21
Special services 22
Dividends, distributions and taxes 23
................................................................................
Implementation of investment
objectives and policies page 24
................................................................................
Certain management considerations page 31
................................................................................
Financial information page 32

1
<PAGE>

Profile: New Pacific Fund

What is the Fund's goal?

New Pacific Fund seeks to maximize long-term capital appreciation by
investing primarily in equity securities of companies that are domiciled in
or have their principal business activities in the Pacific Basin. Although
the Fund will strive to achieve its goal, there is no assurance that it will.

Who should invest in the Fund

o Investors with long-term financial goals.

o Investors looking for capital growth potential.

o Investors willing to accept the sometimes sharp and unpredictable
fluctuations in value that a foreign fund can experience. These fluctuations
can be even more pronounced for funds like New Pacific which concentrate
investments in a single region.

Who should not invest in the Fund

o Investors with short-term financial goals.

o Investors who are unwilling to accept share prices that may fluctuate,
sometimes significantly, over the short term.

o Investors whose primary goal is to receive current income.

o Investors who do not understand the significant risks associated with
international investing.

What are the Fund's main investment strategies? We invest primarily in stocks of
companies of all sizes that are located in or have their principal business
activities in countries located in the Pacific Basin. These countries include,
but are not limited to, Australia, China, Hong Kong, Japan, Philippines,
Singapore, Taiwan and Malaysia. We may invest in both established and
developing countries. Under normal circumstances we will invest at least 65% of
our net assets in Pacific Basin countries.

In selecting stocks for the portfolio, we look for companies that can benefit
from future economic growth in the region. We evaluate both individual countries
to determine how much of our portfolio should be allocated to companies located
there and also individual companies. When evaluating individual companies, we
consider the growth prospects for the company and its industry, the financial
strength of the company and the quality of its management, and whether the stock
appears overvalued or undervalued compared to other stocks in the market or in
its industry.

An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

2
<PAGE>

How has the New Pacific Fund performed?
- --------------------------------------------------------------------------------
This bar chart can help you evaluate the potential risks of investing in the
Fund. We show how returns for the Fund's Class A shares have varied over the
past five calendar years, as well as average annual returns of all shares for
the one and five years and since inception, if applicable. The Fund's past
performance does not necessarily indicate how it will perform in the future. The
Class' returns reflect voluntary expense caps. The returns would be lower
without the voluntary caps.

[BAR CHART APPEARS HERE]

Year-by-year total return (Class A)

1994 1995 1996 1997 1998
-11.02% -3.75% 7.72% -31.85% -22.24%

As of December 31, 1998, the Fund had a year-to-date return of -22.24%. During
the periods illustrated in this bar chart, the Fund's highest return was 16.01%
for the quarter ended December 31,1998 and its lowest return was -26.10% for the
quarter ended December 31, 1997.

Average annual returns for periods ending 12/31/98

CLASS A B C
(if redeemed)* (if redeemed)* Morgan Stanley
(Inception 12/3/93) (Inception 3/29/94) (Inception 7/7/94) Pacific Index**
<S> <C> <C> <C> <C>
1 year -26.69% -26.69% -23.52% 2.69%

5 years -14.36% N/A N/A -3.95%

Lifetime** -12.81% -12.66% -13.42% -2.60%
</TABLE>

The table above shows the Fund's average annual returns over various time
periods compared to the performance of the Morgan Stanley Pacific Index. You
should remember that unlike the Fund, the index is unmanaged and doesn't
reflect the actual costs of operating a mutual fund, such as the costs of
buying, selling, and holding the securities.

*If redeemed at end of period shown. If shares were not redeemed, the returns
for Class B would be -22.83% and -12.31% for the one-year and lifetime
periods, respectively. Returns for Class C would be -22.74% and -13.42% for
the one-year and lifetime periods, respectively.

**Lifetime returns are shown if the Fund or Class existed for less than 10
years. Morgan Stanley returns are for Class A lifetime. Morgan Stanley returns
for Class B and Class C lifetimes were -5.73% and -8.07%, respectively.
Maximum sales charges are included in the Fund returns above.

3
<PAGE>

What are the New Pacific Fund's fees and expenses?
- --------------------------------------------------------------------------------
Sales charges are fees paid directly from your investments when you buy or sell
shares of the Fund. The Fund may waive or reduce sales charges; please see the
Statement of Additional Information for details.

<TABLE>
<CAPTION>
CLASS A B C
<S> <C> <C> <C>
Maximum sales charge (load) imposed on
purchases as a percentage of offering price 5.75% none none

Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none(1) 5%(2) 1%(3)

Maximum sales charge (load) imposed on
reinvested dividends none none none

Redemption fees none none none

- ----------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Management fees 0.80% 0.80% 0.80%

Distribution and service (12b-1) fees 0.30%(4) 1.00% 1.00%

Other expenses 2.13% 2.13% 2.13%

Total operating expenses(5) 3.23% 3.93% 3.93%

- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds with similar investment
objectives. We show the cumulative amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5% return over the time shown.(6) This is
an example only, and does not represent future expenses, which may be greater or
less than those shown here.

CLASS(7) A B B C C
(if redeemed) (if redeemed)

1 year $882 $395 $895 $395 $495

3 years $1,513 $1,198 $1,498 $1,198 $1,198

5 years $2,166 $2,018 $2,218 $2,018 $2,018

10 years $3,903 $3,998 $3,998 $4,147 $4,147

<PAGE>

(3) Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.

(4) 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%.

(5) The investment manager has agreed to waive fees and pay expenses from May 1,
1998 through April 30, 1999 in order to prevent total operating expenses
(excluding any taxes, interest, brokerage fees, extraordinary expenses and
12b-1 fees) from exceeding 1.70% of average daily net assets. The manager's
voluntary commitments of waiver and payment were different prior to May 1,
1998.

(7) The Class B example reflects the conversion of Class B shares to Class A
shares after approximately eight years. Information for the ninth and tenth
years reflects expenses of the Class A shares.

4
<PAGE>

How we manage the Fund

Our investment strategies

New Pacific Fund's investment goal is to seek to maximize long-term capital
appreciation. It seeks to achieve this objective 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 Japan Singapore
China Malaysia South Korea
Hong Kong New Zealand Sri Lanka
India Pakistan Taiwan
Indonesia Philippines Thailand

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.

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.

We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.

How to use
this glossary

Glossary A

Amortized cost
- --------------
Amortized cost is a method used to value a fixed income security that starts
with the face value of the security and then adds or subtracts from that value
depending on whether the purchase price was greater or less than the value of
the security at maturity. The amount greater or less than the par value is
divided equally over the time remaining until maturity.

Average maturity
- ----------------
An average of when the individual bonds and other debt securities held in a
portfolio will mature.

5
<PAGE>

How we manage the Fund (continued)

Certain investment guidelines

Illiquid securities Up to 10% of the assets of the Fund may be invested in
securities that are not readily marketable, including, where applicable:

o repurchase agreements with maturities greater than seven calendar days;

o time deposits maturing in more than seven calendar days;

o certain instruments, futures contracts and options thereon for which there
is no liquid secondary market;

o certain over-the-counter options, as described in the Statement of Additional
Information;

o certain variable rate demand notes having a demand period of
more than seven days; and

o certain Rule 144A restricted securities (Rule 144A securities for which a
dealer or institutional market exists will not be considered illiquid).

Other guidelines In addition, the 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. The 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 the 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 the Fund's outstanding shares
(as well as other non-fundamental restrictions) is contained in the Statement of
Additional Information.

B-C

6
<PAGE>

The risks of investing
in the Fund

- ---------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- ---------------------------------------------------------------------------------------------------
New Pacific Fund
<S> <C>
Market risk is the risk that all or a We maintain a long-term investment approach and
majority of the securities in a certain focus on stocks we believe can appreciate over an
market-- like the stock or bond market extended time frame regardless of interim market
- -- or in a certain country or region fluctuations. In deciding what portion of our
will decline in value because of portfolio should be invested in any individual
factors such as economic conditions, country, we evaluate the country's economy,
future expectations or investor politics, liquidity, corporate earnings, interest
confidence. rates and valuations relative to other countries.

We may hold a substantial part of the Fund's
assets in cash or cash equivalents as a temporary,
defensive strategy.

Industry and security risk is the risk We hold a number of different securities in a
that the value of securities in a variety of sectors in order to minimize the impact
particular industry or the value of an that any one poorly performing security would have
individual stock or bond will decline on New Pacific Fund's overall performance.
because of changing expectations for
the performance of that industry or for
the individual company issuing the
stock or bond.

Currency risk The value of the Fund's New Pacific Fund may try to hedge its currency
investments may be negatively affected risk by purchasing foreign currency exchange
by changes in foreign currency exchange contracts. By agreeing to purchase or sell foreign
rates. Adverse changes in exchange currencies at a pre-set price on a future date,
rates may reduce or eliminate any gains New Pacific Fund strives to protect the value of
produced by investments that are the stocks it owns from future changes in currency
denominated in foreign currencies and rates. However, there is no assurance that a
may increase any losses. strategy such as this will be successful.
</TABLE>

Capital
- -------
The amount of money you invest.

Capital appreciation
- --------------------
An increase in the value of an investment.

Capital gains distributions
- ---------------------------
Payments to mutual fund shareholders
of profits (realized gains) from the sale of a fund's portfolio securities.
Usually paid once a year; may be either short-term gains or long-term gains.

Commission
- ----------
The fee an investor pays to a financial adviser for investment advice and help
in buying or selling mutual funds, stocks, bonds or other securities.

Compounding
- -----------
Earnings on an investment's
previous earnings.

7
<PAGE>

How we manage the Fund (continued)

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- ----------------------------------------------------------------------------------------------------
New Pacific Fund
-----------------------------
<S> <C>
Political risk The risk that countries We carefully evaluate the political situations in
or the entire region where we invest the countries where we invest and take into account
may experience political instability, any potential risks before we select securities for
which may cause greater fluctuation in the portfolio. However, there is no way to eliminate
the value of our investments due to political risk when investing internationally.
changes in currency exchange rates,
governmental seizures or
nationalization of assets.

Emerging market risk is the possibility We carefully select securities within emerging
that the risks associated with markets and strive to consider all relevant risks
international investing will be greater associated with an individual company. We cannot
in emerging markets than in more eliminate emerging market risk and consequently
developed foreign markets because, encourage shareholders to invest in this Fund only
among other things, emerging markets if they have a long-term time horizon, over which
may have less stable political and the potential of individual securities is more
economic environments. likely to be realized.

Inefficient market risk Foreign markets The Fund will attempt to reduce these risks through
may be less liquid, have greater price investing in a number of different countries, credit
volatility, less regulation and higher analysis and attention to trends in the economy,
transaction costs than U.S. markets. industries and financial markets.

Information risk Foreign companies are We conduct a great deal of fundamental research on
subject to different accounting, the companies we invest in rather than relying
auditing and financial reporting solely on information available through financial
standards than U.S. companies. There reporting.
may be less information available about
foreign issuers than domestic issuers.
Furthermore, regulatory oversight of
foreign issuers may be less stringent
or less consistently applied than in
the United States.
- ---------------------------------------------------------------------------------------------------
</TABLE>

C-D

Consumer Price Index (CPI)
- --------------------------
Measurement of U.S. inflation; represents the price of a basket of commonly
purchased goods.

Corporate bond
- --------------
A debt security issued by a corporation. See bond.

8
<PAGE>

Additional Information on risk factors

Fixed-Income
securities

Foreign
investments

New Pacific Fund may invest substantially all of its assets in foreign
investments. 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 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 manager or sub-adviser does not intend to
expose the Fund 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 Fund,
including the withholding of dividends. When the manager or sub-adviser believes
that currency in which the 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 Fund's portfolio securities denominated in such
foreign currency.

Because foreign securities generally are denominated and pay dividends or
interest in foreign currencies, and the Fund holds various foreign currencies
from time to time, the value of the net assets of the Fund 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 Fund is 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-adviser
attempt to manage exchange rate risk through active currency management, but
there is no guarantee that they will be successful.

Depreciation
- ------------
A decline in an investment's value.

Diversification
- ---------------
The process of spreading investments among a number of different securities,
asset classes or investment styles to reduce the risks of investing.

Dividend distribution
- ----------------------
Payments to mutual fund shareholders of dividends passed along from the fund's
portfolio of securities.

Duration
- --------
A measurement of a fixed-income investment's price volatility. The larger the
number, the greater the likely price change for a given change in interest
rates.

9
<PAGE>

Additional information on risk factors (continued)

Borrowing

E-I

10
<PAGE>

Securities
lending

Temporary defensive
position

Portfolio
turnover

High turnover in the 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.

* * *

Inflation
- ---------
The increase in the cost of goods and services over time. U.S. inflation is
frequently measured by changes in the Consumer Price Index (CPI).

Investment goal
- ---------------
The objective, such as long-term capital growth or high current income, that a
mutual fund pursues.

11
<PAGE>
Who manages the Fund

Investment manager
and sub-adviser

The Fund is managed by Delaware Management Company, a series of Delaware
Management Business Trust which is an indirect, wholly owned subsidiary of
Delaware Management Holdings, Inc. AIB Govett, Inc. is the Fund's sub-adviser.
As sub-adviser, AIB Govett is responsible for day-to-day management of the
Fund's assets. Delaware Management Company administers the Fund's affairs and
has ultimate responsibility for all investment advisory services for the Fund.
Delaware Management Company also supervises the sub-adviser's performance. No
fees were paid to the manager or sub-adviser for the last fiscal year.

Portfolio
manager

Jane Pickard has had primary responsibility for making day-to-day investment
decisions for the Fund since November 12, 1997. 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.

M-N

Management fee
- --------------
The amount paid by a mutual fund to the investment adviser for management
services, expressed as an annual percentage of the fund's average daily net
assets.

Maturity
- --------
The length of time until a bond issuer must repay the underlying loan principal
to bondholders.

12
<PAGE>
Who's who?

This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.

Board of Directors

Investment manager
Delaware Management Company
One Commerce Square
Philadelphia, PA 19103

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

The Fund

Sub-Adviser
AIB Govett, Inc.
250 Montgomery Street, Suite 1200
San Francisco, CA 94104

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

Service agent
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

Financial Advisers

Portfolio managers
(see page x for details)

Shareholders

Sub-adviser A sub-adviser is a company generally responsible for the management
of the fund's assets. They are selected and supervised by the investment
manager.

Portfolio managers Portfolio managers are employed by the investment manager or
sub-adviser to make investment decisions for individual portfolios on a
day-to-day basis.
<PAGE>

Custodian Mutual funds are legally required to protect their portfolio
securities and typically place them with a qualified bank custodian who
segregates fund securities from other bank assets.

Financial Advisers Financial advisers provide advice to their clients--analyzing
their financial objectives and recommending appropriate funds or other
investments. Financial advisers are compensated for their services, generally
through sales commissions, and through 12b-1 and/or service fees deducted from
the fund's assets.

Morgan Stanley Pacific Index
- ----------------------------
A total return index, reported in U.S. dollars, based on share prices and
reinvested gross dividends of approximately 500 companies (only those securities
deemed sufficiently liquid for trading by investors) from the following 6
countries: Australia, Hong Kong, Japan, Malaysia, New Zealand, Singapore.

<PAGE>
About your account

Investing in
the Fund

Class
A

Choosing a share class

o Class A shares have an up-front sales charge of up to 5.75% that you pay when
you buy the shares. The offering price for Class A shares includes the
front-end sales charge.

o If you invest $50,000 or more, your front-end sales charge will be reduced.

o Class A shares generally are not subject to a contingent deferred sales
charge.
<TABLE>
<CAPTION>
Class A Sales Charges
- -----------------------------------------------------------------------------------------------------
Sales charge as % Sales charge as % of Dealer's commission as %
Amount of purchase of offering price amount invested of offering price
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.00%
- -----------------------------------------------------------------------------------------------------
$50,000 but
under $100,000 4.75% 5.01% 4.00%
- -----------------------------------------------------------------------------------------------------
$100,000 but
under $250,000 3.75% 3.92% 3.00%
- -----------------------------------------------------------------------------------------------------
$250,000 but
under $500,000 2.50% 2.61% 2.00%
- -----------------------------------------------------------------------------------------------------
$500,000 but
under $1 million 2.00% 1.96% 1.60%
- -----------------------------------------------------------------------------------------------------
As shown below, there is no front-end sales charge when you purchase $1 million
or more of Class A shares. However, if your financial adviser is paid a
commission on your purchase, you may have to pay a limited contingent deferred
sales charge of 1% if you redeem these shares within the first year and 0.50% if
you redeem them within the second year.
- -----------------------------------------------------------------------------------------------------
Sales charge as % Sales charge as % of Dealer's commission as %
Amount of purchase of offering price amount invested of offering price
- -----------------------------------------------------------------------------------------------------
$1 million
up to $5 million none none 1.00%
- -----------------------------------------------------------------------------------------------------
Next $20 million
up to $25 million none none 0.50%
- -----------------------------------------------------------------------------------------------------
Amount over $25 million none none 0.25%
- -----------------------------------------------------------------------------------------------------
</TABLE>
N-R

Net asset value (NAV)
- ---------------------
The daily dollar value of one mutual fund share. Equal to a fund's net assets
divided by the number of shares outstanding.

14
<PAGE>
Class
B

o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.

o Because of the higher 12b-1 fees, Class B shares have higher expenses and any
dividends paid on these shares are lower than dividends on Class A shares.

o You may purchase up to $250,000 of Class B shares at any one time. The
limitation on maximum purchases varies for retirement plans.

Principal
- ---------
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.

Prospectus
- ----------
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.

Redeem
- ------
To cash in your shares by selling them back to the mutual fund.

Risk
- ----
Generally defined as variability of value; also credit risk, inflation risk,
currency and interest rate risk. Different investments involve different types
and degrees of risk.

15
<PAGE>
About your account (continued)

Class
C

o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.

o Because of the higher 12b-1 fees, Class C shares have higher expenses and pay
lower dividends than Class A shares.

o Unlike Class B shares, Class C shares do not automatically convert into
another class.

o You may purchase any amount less than $1,000,000 of Class C shares at any one
time. The limitation on maximum purchases varies for retirement plans.

S-S

Share classes
- -------------
Different classifications of shares; mutual fund share classes offer a variety
of sales charge choices.

16
<PAGE>
How to reduce your
sales charge

We offer a number of ways to reduce or eliminate the sales charge on shares.
Please refer to the Statement of Additional Information for detailed information
and eligibility requirements. You can also get additional information from your
financial adviser. You or your financial adviser must notify us at the time you
purchase shares if you are eligible for any of these programs.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Share class
Program How it works A B C
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Letter of Intent Through a Letter of Intent you X Although the Letter of Intent
agree to invest a certain and Rights of Accumulation do
amount in Delaware Investment not apply to the purchase of
Funds (except money market Class B and C shares, you can
funds with no sales charge) combine your purchase of Class
over a 13-month period to A shares with your purchase of
qualify for reduced front-end B and C shares to fulfill your
sales charges. Letter of Intent or qualify
for Rights of Accumulation.
Rights of Accumulation You can combine your holdings X
or purchases of all funds in
the Delaware Investments
family (except money market
funds with no sales charge) as
well as the holdings and
purchases of your spouse and
children under 21 to qualify
for reduced front-end sales
charges.

Reinvestment of Redeemed Up to 12 months after you X Not available
Shares redeem shares, you can
reinvest the proceeds without
paying a front-end sales
charge.

SIMPLE IRA, SEP IRA, These investment plans may X Not available
SARSEP, Prototype Profit qualify for reduced sales
Sharing, Pension, 401(k), charges by combining the
SIMPLE 401(k), 403(b)(7), purchases of all members of
and 457 Retirement Plans the group. Members of these
groups may also qualify to
purchase shares without a
front-end sales charge and a
waiver of any contingent
deferred sales charges.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

Standard deviation
- ------------------
A measure of an investment's volatility; for mutual funds, measures how much a
fund's total return has typically varied from its historical average.

Stock
- -----
An investment that represents a share of ownership (equity) in a corporation.
Stocks are often referred to as "equities."

17
<PAGE>
About your account (continued)

How to buy shares

Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.

T-V

Total return
- ------------
An investment performance measurement, expressed as a percentage, based on the
combined earnings from dividends, capital gains and change in price over a given
period.

18
<PAGE>
How to buy shares
(continued)

Once you have completed an application, you can generally open an account with
an initial investment of $1,000 and make additional investments at any time for
as little as $100. If you are buying shares in an IRA or Roth IRA under the
Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act, or through
an Automatic Investing Plan, the minimum purchase is $250, and you can make
additional investments of only $25. The minimum for an Education IRA is $500.
The minimums vary for retirement plans other than IRAs, Roth IRAs or Education
IRAs.

Retirement plans

19
<PAGE>
About your account (continued)

How to redeem shares

Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.

<PAGE>

How to redeem shares
(continued)

If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.

If you are required to pay a contingent deferred sales charge when you redeem
your shares, the amount subject to the fee will be based on the shares' net
asset value when you purchased them or their net asset value when you redeem
them, whichever is less. This arrangement assures that you will not pay a
contingent deferred sales charge on any increase in the value of your shares.
You also will not pay the charge on any shares acquired by reinvesting dividends
or capital gains. If you exchange shares of one fund for shares of another, you
do not pay a contingent deferred sales charge at the time of the exchange. If
you later redeem those shares, the purchase price for purposes of the contingent
deferred sales charge formula will be the price you paid for the original
shares--not the exchange price. The redemption price for purposes of this
formula will be the NAV of the shares you are actually redeeming.

Account minimum

21
<PAGE>
About your account (continued)

Special services

To help make investing with us as easy as possible, and to help you build your
investments, we offer the following special services.

Automatic
Investing Plan

The Automatic Investing Plan allows you to make regular monthly investments
directly from your checking account.

Direct Deposit

With Direct Deposit you can make additional investments through payroll
deductions, recurring government or private payments such as Social Security or
direct transfers from your bank account.

Wealth Builder Option

Dividend
Reinvestment Plan

Exchanges

22
<PAGE>
Special services
(continued)

MoneyLine(SM)
On Demand Service

MoneyLine(SM)
Direct Deposit Service

Through our MoneyLine Direct Deposit Service you can have
$25 or more in dividends and distributions deposited directly to your bank
account. Delaware Investments does not charge a fee for this service; however,
your bank may assess one. This service is not available for retirement plans.

Systematic
Withdrawal Plan

Dividends,
distributions
and taxes

Dividends and capital gains, if any, are paid annually. We automatically
reinvest all dividends and any capital gains, unless you tell us otherwise.

We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.

23
<PAGE>
Implementation of investment
objectives and policies
- --------------------------------------------------------------------------------

In attempting to achieve its investment objective and policies, the Fund may
employ, among others, one or more of the strategies set forth below.

Convertible
securities

U.S. government
securities

The Fund may invest in securities of the U.S. government. Securities guaranteed
by the U.S. government include:

o direct obligations of the U.S. Treasury (such as Treasury bills, notes and
bonds) and

o federal agency obligations guaranteed as to principal and interest by the U.S.
Treasury (such as GNMA certificates and Federal Housing Administration
debentures).

24
<PAGE>
Repurchase
agreements

When-Issued
securities and firm
commitment
agreements

25
<PAGE>
Implementation of investment objectives and policies (continued)

Money market
instruments

The Fund 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:

o commercial paper (short-term notes up to 9 months issued by corporations or
governmental bodies);

o corporate bonds and notes (corporate obligations that mature, or that may be
redeemed, in one year or less);

o variable rate demand notes, short-term tax-exempt obligations; and

o 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.

Strategic
transactions

General. The Fund may, but is 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 Fund
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 the 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

26
<PAGE>
Strategic
transactions
(continued)

strategic transaction is a function of numerous variables including market
conditions. The ability of the 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 Fund 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.

In addition to the above limitations, the Fund will not:

o sell futures contracts, purchase put options or write call options if, as a
result, more than 25% of its total assets would be hedged with futures and
options under normal conditions;

o purchase call options if, as a result, the current value of option premiums
for call options purchased by the Fund would exceed 5% of its 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.

Options transactions

<PAGE>
Implementation of investment objectives and policies (continued)

Options transactions
(continued)

Forward foreign
currency exchange
contracts

Futures contracts
and options thereon

Swap agreements

28
<PAGE>

Swap agreements
(continued)

Special risks of
strategic
transactions

o 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;

o imperfect correlation between the price of options and futures contracts and
options thereon and movements in the prices of securities being hedged;

o the fact that skills need to use these strategies are different from those
needed to select Fund securities;

o the possible absence of a liquid secondary market for any particular
instrument at any time;

o the possible need to defer closing out certain hedged positions to avoid
adverse tax consequences; and

o the possible inability of the Fund to purchase or sell a security at a time
that otherwise would be favorable for it to do so, or the possible need for
the Fund to sell a security at a disadvantageous time, due to the need for the
Fund to maintain "cover" or to segregate securities in connection with
strategic transactions.

29
<PAGE>
Implementation of investment objectives and policies (continued)

Special risks of
strategic
transactions
(continued)

* * *

30
<PAGE>

Certain management considerations

Year 2000

As with other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer systems
used by their service providers do not properly process and calculate
date-related information from and after January 1, 2000. This is commonly known
as the "Year 2000 Problem." The Fund is taking steps to obtain satisfactory
assurances that its major service providers are taking steps reasonably designed
to address the Year 2000 Problem on the computer systems that the service
providers use. However, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the business of the Fund. The Year
2000 Problem may also adversely affect the issuers of securities in which the
Fund invests. The portfolio manager and investment professionals of the Fund
consider Year 2000 compliance in the securities selection and investment
process. However, there can be no guarantee that, even with their due diligence
efforts, they will be able to predict the affect of Year 2000 on any company or
the performace of its securities.

Investments by
fund of funds

New Pacific Fund accepts investments from the series portfolios of Delaware
Group Foundation Funds, a fund of funds. From time to time, the Fund may
experience large investments or redemptions due to allocations or rebalancings
by Foundation Funds. While it is impossible to predict the overall impact of
these transactions over time, there could be adverse effects on portfolio
management. For example, the Fund 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 transaction costs or portfolio turnover. The manager will monitor
transactions by Foundation Funds and will attempt to minimize any adverse
effects on both New Pacific Fund and Foundation Funds as a result of these
transactions.
<PAGE>

Financial information

Financial highlights
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Period 12/3/93(1)
Year Ended 10/31 to
New Pacific Fund 1998(4) 1997(4) 1996(5) 1995 10/31/94
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $7.320 $9.420 $8.710 $10.440 $10.000

Income (loss) from investment operations

Net investment income (loss) 0.008 (0.010) (0.050) (0.050) (0.020)

Net realized and unrealized gain (loss)
on investments and foreign currencies (2.683) (1.940) 0.769 (1.390) 0.470
------ ------ ------ ------ -------
Total from investment operations (2.675) (1.950) 0.719 (1.440) 0.450
------ ------ ------ ------ -------
Less dividends and distributions

Dividends from net investment income (0.055) (0.150) (0.009) none (0.010)
------ ------ ------ ------ -------
Distributions from net realized gain
on investments none none none (0.290) none
------ ------ ------ ------ -------
Total dividends and distributions (0.055) (0.150) (0.009) (0.290) (0.010)

Net asset value, end of period $4.590 $7.320 $9.420 $8.710 $10.440
====== ====== ====== ====== =======
Total return(2) (36.85%) (21.15%) 8.26% (13.99%) 4.53%

Ratios and supplemental data

Net assets, end of period (000 omitted) $5,887 $7,144% $11,752 $10,353 $11,333

Ratio of expenses to average net assets 1.90% 1.80% 1.82% 1.85% 1.85%(3)

Ratio of expenses to average net assets
prior to expense limitation 3.23% 1.86% 2.77% 3.73% 3.66%(3)

Ratio of net investment income (loss)
to average net assets 0.15% (0.08%) (0.41%) (0.60%) (0.21%)(3)

Ratio of net investment loss to average
net assets prior to expense limitation (1.18%) (0.14%) (1.36%) (2.48%) (2.02%)(3)

Portfolio turnover 188% 178% 163% 163% 104%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

Volatility
- --------------------------------------------------------------------------------

Volatility, as indicated by year-by-year return (2)

Volatility chart is not part of the Financial highlights and has not been
audited by Ernst & Young LLP.

Period 12/3/93(1)
Year Ended 10/31 to
1998 1997 1996 1995 10/31/94
- ---------------------------------------------------------------------

- -36.85% -21.15% 8.26% -13.99% 4.53%

(1) Commencement of operations.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge. Total return
reflects voluntary expense caps.
(3) Annualized.
(4) To calculate the net investment income per share, we have used the "average
shares outstanding method." This means that we have divided the total net
investment income by the average number of shares outstanding during the
period to determine the net investment income per share.
(5) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.

How to read the
Financial highlights

Net investment income

Net investment income includes dividend and interest income earned from the
Fund's securities; it is after expenses have been deducted.

Net realized and
unrealized gain (loss)
on investments and
foreign currencies

Net asset value (NAV)

This is the value of a mutual fund share, calculated by dividing the net assets
by the number of shares outstanding.

32
<PAGE>

Financial information (continued)

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Period 3/29/94(1)
Year Ended 10/31 to
New Pacific Fund 1998(4) 1997(4) 1996(5) 1995 10/31/94
<S> <C> <C> <C> <C> <C>

Net asset value, beginning of period $7.470 $9.680 $9.010 $10.860 $10.000

Income (loss) from investment operations

Net investment loss (0.031) (0.080) (0.050) (0.100) (0.030)

Net realized and unrealized gain (loss)
on investments and foreign currencies (2.724) (1.980) 0.730 (1.460) 0.890
------ ------ ------ ------- -------
Total from investment operations (2.755) (2.060) 0.680 (1.560) 0.860
------ ------ ------ ------- -------
Less dividends and distributions

Dividends from net investment income (0.055) (0.150) (0.010) none none

Distributions from net realized gain
on investments none none none (0.290) none
------ ------ ------ ------- -------
Total dividends and distributions (0.055) (0.150) (0.010) (0.290) 0.000
------ ------ ------ ------- -------
Net asset value, end of period $4.660 $7.470 $9.680 $9.010 $10.860
====== ====== ====== ======= =======
Total return(2) (37.05%) (21.72%) 7.54% (14.56%) 8.58%

Ratios and supplemental data

Net assets, end of period (000 omitted) $2,236 $2,534 $562 $573 $431

Ratio of expenses to average net assets 2.60% 2.50% 2.50% 2.50% 2.50%(3)

Ratio of expenses to average net assets
prior to expense limitation 3.93% 2.56% 3.45% 4.38% 4.32%(3)

Ratio of net investment loss to average net
assets (0.55%) (0.77%) (1.09%) (1.20%) (0.88%)(3)

Ratio of net investment loss to average net
assets prior to expense limitation (1.88%) (0.83%) (2.04%) (3.08%) (2.70%)(3)

Portfolio turnover 188% 178% 163% 163% 104%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

Volatility
- --------------------------------------------------------------------------------
Volatility, as indicated by year-by-year return (2)

Volatility chart is not part of the Financial highlights and has not been
audited by Ernst & Young LLP.

Period 12/3/93(1)
Year Ended 10/31 to
1998 1997 1996 1995 10/31/94
- ---------------------------------------------------------------------

7.54% -14.56% 8.58%

(1) Commencement of operations.

(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge. Total return
reflects voluntary expense caps.

(3) Annualized.

(4) To calculate the net investment income per share, we have used the "average
shares outstanding method." This means that we have divided the total net
investment income by the average number of shares outstanding during the
period to determine the net investment income per share.

(5) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.

How to read the
Financial highlights
(continued)

Total return

Net assets

Net assets represent the total value of all the assets in the Fund's portfolio,
less any liabilities, that are attributable to that class of the Fund.

Ratio of expenses to average net assets

33
<PAGE>

Financial information (continued)

Financial highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Period 7/7/94(1)
Year Ended 10/31 to
New Pacific Fund 1998(4) 1997(4) 1996(5) 1995 10/31/94
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $7.320 $9.490 $8.830 $10.660 $10.000

Income (loss) from investment operations

Net investment loss (0.029) (0.080) (0.050) (0.080) (0.020)

Net realized and unrealized gain (loss)
on investments and foreign currencies (2.686) (1.940) 0.718 (1.460) 0.680
------- ------ ------ ------- ------
Total from investment operations (2.715) (2.020) 0.668 (1.540) 0.660
------- ------ ------ ------- ------
Less dividends and distributions

Dividends from net investment income (0.055) (0.150) (0.008) none none

Distributions from net realized gain
on investments none none none (0.290) none
------- ------ ------ ------- ------
Total dividends and distributions (0.055) (0.150) (0.008) (0.290) none
------- ------ ------ ------- ------
Net asset value, end of period $4.550 $7.320 $9.490 $8.830 $10.660
====== ====== ====== ====== =======
Total return(2) (37.18%) (21.85%) 7.58% (14.57%) 6.55%

Ratios and supplemental data

Net assets, end of period (000 omitted) $130 $129 $44 $17 $12

Ratio of expenses to average net assets 2.60% 2.50% 2.50% 2.50% 2.50%(3)

Ratio of expenses to average net assets
prior to expense limitation 3.93% 2.56% 3.45% 4.38% 4.31%(3)

Ratio of net investment loss to
average net assets (0.55%) (0.77%) (1.09%) (1.02%) (0.83%)(3)

Ratio of net investment loss to
average net assets prior to expense limitation (1.88%) (0.83%) (2.04%) (2.90%) (2.64%)(3)

Portfolio turnover 188% 178% 163% 163% 104%
</TABLE>

<PAGE>

Volatility

Volatility, as indicated by year-by-year return

(2) Volatility chart is not part of the Financial highlights and has not been
audited by Ernst & Young LLP.

Period 7/7/94(1)
Year Ended 10/31 to
1998 1997 1996 1995 10/31/94
- -----------------------------------------------------------------------

- -37.18% -21.85% 7.58% -14.57% 6.55%

(1) Commencement of operations.

(3) Annualized.

(5) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.

How to read the
Financial highlights
(continued)

Ratio of net investment income to average net assets

We determine this ratio by dividing net investment income by average net assets.

Portfolio turnover
This figure tells you the amount of trading activity in a fund's portfolio. For
example, a fund with a 50% turnover has bought and sold half of the value of its
total investment portfolio during the stated period.

37
<PAGE>

New Pacific Fund

Web site

www.delawarefunds.com

E-mail

[email protected]

Shareholder Service Center

800.523.1918

Call the Shareholder Service Center: Monday to Friday, 8 a.m. to 8 p.m. Eastern
time.

o For fund information; literature; price, yield and performance figures.

o For information on existing regular investment accounts and retirement plan
accounts including wire investments; wire redemptions; telephone redemptions
and telephone exchanges.

Delaphone Service

800.362.FUND (800.362.3863)

o For convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this Touch-Tone(R) service.

Investment Company Act file number: 811-7972

CUSIP NASDAQ
------- ------
Class A 245917844 DENPX
Class B 245917836 DENBX
Class C 245917828 DENCX

<PAGE>
DELAWARE
INVESTMENTS
- -----------
Philadelphia o London

New Pacific Fund

Institutional Class

Prospectus March 1, 1999

International Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.

<PAGE>

Table of contents

.................................................................
Fund profile page 2
New Pacific Fund 2
.................................................................
How we manage the Fund page 4
Our investment strategies 4
The risks of investing in the Fund 6
.................................................................
Who manages the Fund page 11
Investment manager and sub-adviser 11
Portfolio manager 11
Fund administration (Who's who) 12
.................................................................
About your account page 13
Investing in the Fund 13
Institutional Class shares 13
How to buy shares 14
How to redeem shares 16
Account minimum 17
Exchanges 17
Dividends, distributions and taxes 17
.................................................................
Implementation of investment
objectives and policies page 18
.................................................................
Certain management considerations page 25
.................................................................
Financial information page 26

<PAGE>

Profile: New Pacific Fund

What is the Fund's goal?

Who should invest in the Fund

o Investors with long-term financial goals.

o Investors looking for capital growth potential.

o Investors willing to accept the sometimes sharp and unpredictable fluctuations
in value that a foreign fund can experience. These fluctuations can be even
more pronounced for funds like New Pacific which concentrate investments in a
single region.

Who should not invest in the Fund

o Investors with short-term financial goals.

o Investors who are unwilling to accept share prices that may fluctuate,
sometimes significantly, over the short term.

o Investors whose primary goal is to receive current income.

o Investors who do not understand the significant risks associated with
international investing.

What are the Fund's main investment strategies? We invest primarily in stocks of
companies of all sizes that are located in or have their principal business
activities in countries located in the Pacific Basin. These countries include,
but are not limited to, Australia, China, Hong Kong, Japan, Philippines,
Singapore, Taiwan and Malaysia. We may invest in both established and developing
countries. Under normal circumstances we will invest at least 65% of our net
assets in Pacific Basin countries.

An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

2
<PAGE>
How has the New Pacific Fund performed?

This bar chart can help you evaluate the potential risks of investing in the
Fund. We show how returns for the Fund's Institutional Class shares have varied
over the past four calendar years, as well as average annual returns for the one
year and since inception. The Fund's past performance does not necessarily
indicate how it will perform in the future. The Class' returns reflect voluntary
expense caps. The returns would be lower without the voluntary caps.

[BAR CHART APPEARS HERE]

Year-by-year total return (Institutional Class)

1995 1996 1997 1998
-3.21% 8.20% -31.53% -21.83%

As of December 31, 1998, the Fund had a year-to-date return of -21.83%. During
the periods illustrated in this bar chart, the Institutional Class' highest
return was 16.10% for the quarter ended December 31, 1998 and its lowest return
was -25.83% for the quarter ended December 31, 1997.

Average annual returns for periods ending 12/31/98

<TABLE>
<CAPTION>
Institutional Class Morgan Stanley Pacific Index
<S> <C> <C>
1 year -21.83% 2.69%
Since inception (2/3/94) -13.68% -6.13%
</TABLE>
The table above shows the Fund's average annual returns over various time
periods compared to the performance of the Morgan Stanley Pacific Index. You
should remember that unlike the Fund, the index is unmanaged and doesn't reflect
the actual costs of operating a mutual fund, such as the costs of buying,
selling, and holding the securities.

<TABLE>
<CAPTION>
What are the Fund's fees and expenses?
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
You do not pay sales charges directly Maximum sales charge (load) imposed on
from your investments when you buy or purchases as a percentage of offering price none
sell shares of the Institutional Class.
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none

Maximum sales charge (load) imposed on
reinvested dividends none

Redemption fees none

Exchange Fees(1) none
- ---------------------------------------------------------------------------------------------------------------------
Annual fund operating expenses are deducted Management fees 0.80%
from the Fund's assets before it pays
dividends and before its net asset value and Distribution and service (12b-1) fees none
total return are calculated. We will not
charge you separately for these expenses. Other expenses 2.13%
These expenses are based on amounts incurred
during the Fund's mostrecent fiscal year. Total operating expenses(2) 2.93%

- ---------------------------------------------------------------------------------------------------------------------
This example is intended to help you compare 1 year $296
the cost of investing in the Fund to the cost
of investing in other mutual funds with 3 years $907
similar investment objectives. We show the
cumulative amount of Fund expenses on a 5 years $1,543
hypothetical investment of $10,000 with an
annual 5% return over the time shown.(3) This 10 years $3,252
is an example only, and does not represent
future expenses, which may be greater or
less than those shown here.
</TABLE>
(1) Exchanges are subject to the requirements of each fund in the Delaware
Investments family. A front-end sales charge may apply if you exchange your
shares into a fund that has a front-end sales charge.
(2) The investment manager has agreed to waive fees and pay expenses through
April 30,1999 in order to prevent total operating expenses (excluding any
taxes, interest, brokerage fees and extraordinary expenses) from exceeding
1.70% of average daily net assets. The manager's voluntary commitments of
waiver and payment were different prior to May 1, 1998
(3) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show. In addition, the example does not assume the voluntary expense
limitation discussed in footnote 2.

3
<PAGE>

How we manage the Fund

Our investment strategies

We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.

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

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.

How to use
this glossary

Glossary A-B

Average maturity
- ----------------
An average of when the individual bonds and other debt securities held in a
portfolio will mature.

<PAGE>

How we manage the Fund (continued)

Certain investment guidelines

Illiquid securities Up to 10% of the assets of the Fund may be invested in
securities that are not readily marketable, including, where applicable:

o repurchase agreements with maturities greater than seven calendar days;

o time deposits maturing in more than seven calendar days;

o certain instruments, futures contracts and options thereon for which there is
no liquid secondary market;

o certain over-the-counter options, as described in the Statement of Additional
Information;

o certain variable rate demand notes having a demand period of more than seven
days; and

o certain Rule 144A restricted securities (Rule 144A securities for which a
dealer or institutional market exists will not be considered illiquid).

Other guidelines In addition, the 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. The 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 the 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 the Fund's outstanding shares
(as well as other non-fundamental restrictions) is contained in the Statement of
Additional Information.

<PAGE>

The risks of investing
in the Fund

- --------------------------------------------------------------------------------
How we strive to manage them
- --------------------------------------------------------------------------------
New Pacific Fund
- --------------------------------------------------------------------------------
We maintain a long-term investment approach and focus on stocks we believe can
appreciate over an extended time frame regardless of interim market
fluctuations. In deciding what portion of our portfolio should be invested in
any individual country, we evaluate the country's economy, politics, liquidity,
corporate earnings, interest rates and valuations relative to other countries.

We may hold a substantial part of the Fund's assets in cash or cash equivalents
as a temporary, defensive strategy.

We hold a number of different securities in a variety of sectors in order to
minimize the impact that any one poorly performing security would have on New
Pacific Fund's overall performance.

New Pacific Fund may try to hedge its currencies risk by purchasing foreign
currency exchange contracts. By agreeing to purchase or sell foreign currencies
at a pre-set price on a future date, New Pacific Fund strives to protect the
value of the stocks it owns from future changes in currency rates. However,
there is no assurance that a strategy such as this will be successful.

C-D

Capital
- -------
The amount of money you invest.

Capital appreciation
- --------------------
An increase in the value of an investment.

Compounding
- -----------
Earnings on an investment's previous earnings.

6
<PAGE>

How we manage the Funds (continued)

- --------------------------------------------------------------------------------
Risks
- --------------------------------------------------------------------------------
Political risk The risk that countries or the entire region where we invest may
experience political instability, which may cause greater fluctuation in the
value of our investments due to changes in currency exchange rates, governmental
seizures or nationalization of assets.

Inefficient market risk Foreign markets may be less liquid, have greater price
volatility, less regulation and higher transaction costs than U.S. markets.

- --------------------------------------------------------------------------------
How we strive to manage them
- --------------------------------------------------------------------------------
New Pacific Fund
- --------------------------------------------------------------------------------
We carefully evaluate the political situations in the countries where we invest
and take into account any potential risks before we select securities for the
portfolio. However, there is no way to eliminate political risk when investing
internationally.

We carefully select securities within emerging markets and strive to consider
all relevant risks associated with an individual company. We cannot eliminate
emerging market risk and consequently encourage shareholders to invest in this
Fund only if they have a long-term time horizon, over which the potential of
individual securities is more likely to be realized.

The Fund will attempt to reduce these risks through investing in a number of
different countries, credit analysis and attention to trends in the economy,
industries and financial markets.

We conduct a great deal of fundamental research on the companies we invest in
rather than relying solely on information available through financial reporting.

Consumer Price Index (CPI)
- --------------------------
Measurement of U.S. inflation; represents the price of a basket of commonly
purchased goods.

Corporate bond
- --------------
A debt security issued by a corporation. See bond.

Cost basis
- ----------
The original purchase price of an investment, used in determining capital gains
and losses.

Depreciation
- ------------
A decline in an investment's value.

<PAGE>

Additional information on risk factors

Fixed-income
securities

Foreign
investments

Because foreign securities generally are denominated and pay dividends or
interest in foreign currencies, and the Fund holds various foreign currencies
from time to time, the value of the net assets of the Fund 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 Fund is 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-adviser
attempt to manage exchange rate risk through active currency management, but
there is no guarantee that they will be successful.

D-F

Diversification
- ---------------
The process of spreading investments among a number of different securities,
asset classes or investment styles to reduce the risks of investing.

Dividend distribution
- ---------------------
Payments to mutual fund shareholders of dividends passed along from the fund's
portfolio of securities.

Duration
- --------
A measurement of a fixed-income investment's price volatility. The larger the
number, the greater the likely price change for a given change in interest
rates.

<PAGE>

Additional information on risk factors (continued)

Borrowing

<PAGE>

Securities
lending

Temporary defensive
position

Portfolio
turnover

High turnover in the 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.

* * *

I-N

Inflation
- ---------
The increase in the cost of goods and services over time. U.S. inflation is
frequently measured by changes in the Consumer Price Index (CPI).

Investment goal
- ---------------
The objective, such as long-term capital growth or high current income, that a
mutual fund pursues.

Management fee
- ---------------
The amount paid by a mutual fund to the investment adviser for management
services, expressed as an annual percentage of the fund's average daily net
assets.

10
<PAGE>
Who manages the Fund

Investment manager
and sub-adviser

The Fund is managed by Delaware Management Company, a series of Delaware
Management Business Trust which is an indirect, wholly owned subsidiary of
Delaware Management Holdings, Inc. AIB Govett, Inc. is the Fund's sub-adviser.
As sub-adviser, AIB Govett is responsible for day-to-day management of the
Fund's assets. Delaware Management Company administers the Fund's affairs and
has ultimate responsibility for all investment advisory services for the Fund.
Delaware Management Company also supervises the sub-adviser's performance. No
fees were paid to the manager or sub-adviser for the last fiscal year.

Portfolio
manager

Maturity
- --------
The length of time until a bond issuer must repay the underlying loan principal
to bondholders.

11
<PAGE>
Who's who?

This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.

Board of Directors

Investment Manager
Delaware Management Company
One Commerce Square
Philadelphia, PA 19103

The Fund

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

Sub-Adviser
AIB Govett, Inc.
250 Montgomery Street, Suite 1200
San Francisco, CA 94104

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

Service agent
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

Portfolio manager
(see page 11 for details)

Shareholders

Sub-adviser A sub-adviser is a company generally responsible for the management
of the fund's assets. They are selected and supervised by the investment
manager.

<PAGE>

Portfolio managers Portfolio managers are employed by the investment manager or
sub-adviser to make investment decisions for individual portfolios on a
day-to-day basis.

Custodian Mutual funds are legally required to protect their portfolio
securities and typically place them with a qualified bank custodian who
segregates fund securities from other bank assets.

N-R

Net asset value (NAV)
- ---------------------
The daily dollar value of one mutual fund share. Equal to a fund's net assets
divided by the number of shares outstanding.

12
<PAGE>
About your account

Investing in
the Fund

Institutional Class shares are available for purchase only by the following:

o tax-exempt employee benefit plans of the manager or its affiliates and
securities dealer firms with a selling agreement with the distributor

o institutional advisory accounts of the manager, or its affiliates and those
having client relationships with Delaware Investment Advisers, an affiliate 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

Principal
- ---------
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.

Prospectus
- ----------
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.

Redeem
- ------
To cash in your shares by selling them back to the mutual fund.

Risk
- ----
Generally defined as variability of value; also credit risk, inflation risk,
currency and interest rate risk. Different investments involve different types
and degrees of risk.

13
<PAGE>
About your account (continued)

How to buy shares

By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that you may not exchange your shares for Class B or Class C
shares. To open an account by exchange, call the Shareholder Service Center at
800-510-4015.

Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.

S-T

Share classes
- -------------
Different classifications of shares; mutual fund share classes offer a variety
of sales charge choices.

14
<PAGE>
How to buy shares
(continued)

Standard deviation
- ------------------
A measure of an investment's volatility; for mutual funds, measures how much a
fund's total return has typically varied from its historical average.

Stock
- -----
An investment that represents a share of ownership (equity) in a corporation.
Stocks are often referred to as "equities."

Total return
- ------------
An investment performance measurement, expressed as a percentage, based on the
combined earnings from dividends, capital gains and change in price over a given
period.

15
<PAGE>
About your account (continued)

How to redeem shares

By mail
You can redeem your shares (sell them back to the fund) by mail by writing to:
Delaware Investments, 1818 Market Street, Philadelphia, PA 19103-3682. All
owners of the account must sign the request, and for redemptions of $50,000 or
more, you must include a signature guarantee for each owner. You can also fax
your written request to 215-255-8864. Signature guarantees are also required
when redemption proceeds are going to an address other than the address of
record on an account.

Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.

16
<PAGE>
How to redeem shares
(continued)

If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.

Account minimum

If you redeem shares and your account balance falls below $250, the Fund may
redeem your account after 60 days' written notice to you.

Exchanges

Dividends,
distributions
and taxes

Dividends and capital gains, if any, are paid annually. We automatically
reinvest all dividends and any capital gains.

We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.

17
<PAGE>
Implementation of investment
objectives and policies
- --------------------------------------------------------------------------------

In attempting to achieve its investment objective and policies, the Fund may
employ, among others, one or more of the strategies set forth below.

Convertible
securities

U.S. government
securities

The Fund may invest in securities of the U.S. government. Securities guaranteed
by the U.S. government include:

o direct obligations of the U.S. Treasury (such as Treasury bills, notes and
bonds) and

o federal agency obligations guaranteed as to principal and interest by the U.S.
Treasury (such as GNMA certificates and Federal Housing Administration
debentures).

<PAGE>

Repurchase
agreements

When-issued
securities and
firm commitment
agreements

<PAGE>

Implementation of investment objectives and policies (continued)

Money market
instruments

The Fund 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:

o commercial paper (short-term notes up to 9 months issued by corporations or
governmental bodies);

o corporate bonds and notes (corporate obligations that mature, or that may be
redeemed, in one year or less);

o variable rate demand notes, short-term tax-exempt obligations; and

o 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.

Strategic
transactions

General. The Fund may, but is 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 Fund
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 the 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 the 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 Fund will

<PAGE>

Strategic
transactions
(continued)

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

In addition to the above limitations, the Fund will not:

o sell futures contracts, purchase put options or write call options if, as a
result, more than 25% of its total assets would be hedged with futures and
options under normal conditions;

o purchase call options if, as a result, the current value of option premiums
for call options purchased by the Fund would exceed 5% of its 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. The limitations on the Fund's
investments in futures contracts and options, and the Fund's policies regarding
futures contracts and options discussed elsewhere are not fundamental policies
and may be changed as regulatory agencies permit.

Options transactions

<PAGE>

Implementation of investment objectives and policies (continued)

Options transactions
(continued)

Forward foreign
currency exchange
contracts

Futures contracts
and options thereon

Swap agreements

<PAGE>

Swap agreements
(continued)

Special risks of
strategic
transactions

o 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;

o imperfect correlation between the price of options and futures contracts and
options thereon and movements in the prices of securities being hedged;

o the fact that skills need to use these strategies are different from those
needed to select Fund securities;

o the possible absence of a liquid secondary market for any particular
instrument at any time;

o the possible need to defer closing out certain hedged positions to avoid
adverse tax consequences; and

o the possible inability of the Fund to purchase or sell a security at a time
that otherwise would be favorable for it to do so, or the possible need for
the Fund to sell a security at a disadvantageous time, due to the need for the
Fund to maintain "cover" or to segregate securities in connection with
strategic transactions.

<PAGE>

Implementation of investment objectives and policies (continued)

Special risks of
strategic
transactions
(continued)

* * *

24
<PAGE>

Certain management considerations

Year 2000

As with other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer systems
used by their service providers do not properly process and calculate
date-related information from and after January 1, 2000. This is commonly known
as the "Year 2000 Problem." The Fund is taking steps to obtain satisfactory
assurances that its major service providers are taking steps reasonably designed
to address the Year 2000 Problem on the computer systems that the service
providers use. However, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the business of the Fund. The Year
2000 Problem may also adversely affect the issuers of securities in which the
Fund invests. The portfolio manager and investment professionals of the Fund
consider Year 2000 compliance in the securities selection and investment
process. However, there can be no guaranteee that, even with their due diligence
efforts, they will be able to predict the afffect of Year 2000 on any company or
the performance of its securities.

Investments by
fund of funds

<PAGE>

Financial information

Financial highlights
- --------------------------------------------------------------------------------

Institutional
Class Shares Period
Year Ended 10/31 2/3/94(1) to
<S> <C> <C> <C> <C> <C> <C>
New Pacific Fund 1998(4) 1997(4) 1996(5) 1995 10/31/94

Net asset value, beginning of period $7.440 $9.530 $8.770 $10.480 $11.140
Income (loss) from investment operations
Net investment income (loss) 0.024 0.020 (0.050) (0.010) 0.010
Net realized and unrealized gain (loss) on
investments and foreign currencies (2.719) (1.960) 0.820 (1.410) (0.670)
------- ------- ------- ------- -------
Total from investment operations (2.695) (1.940) 0.770 (1.420) (0.660)
------- ------- ------- ------- -------
Less dividends and distributions
Dividends from net investment income (0.055) (0.150) (0.010) none none
Distributions from net realized gain on investments none none none (0.290) none
------- ------- ------- ------- -------
Total dividends and distributions (0.055) (0.150) (0.010) (0.290) none
------- ------- ------- ------- -------
Net asset value, end of period $4.690 $7.440 $9.530 $8.770 $10.480
======= ======= ======= ======= =======
Total return(2) (36.39%) (20.79%) 8.77% (13.65%) (5.98%)
Ratios and supplemental data
Net assets, end of period (000 omitted) $219 $250 $119 $62 $47
Ratio of expenses to average net assets 1.60% 1.50% 1.50% 1.50% 1.50%(3)
Ratio of expenses to average net assets prior to
expense limitation 2.93% 1.56% 2.45% 3.38% 3.31%(3)
Ratio of net investment income (loss) to average net assets 0.45% 0.22% (0.09%) (0.16%) 0.23%(3)
Ratio of net investment income (loss) to average net assets
prior to expense limitation (0.88%) 0.16% (1.04%) (2.04%) (1.58%)(3)
Portfolio turnover 188% 178% 163% 163% 104%
</TABLE>

Volatility
<TABLE>
<CAPTION>
Institutional
Class Shares Period
Year Ended 10/31 2/3/94(1) to
<S> <C> <C> <C> <C> <C>
Volatility, as indicated by year-by-year return(2) 1998 1997 1996 1995 10/31/94

Volatility chart is not part of the Financial highlights
and has not been audited by Ernst & Young LLP. -36.39% -20.79% 8.77% -13.65% -5.98%
</TABLE>

(1) Commencement of operations.

(2) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions. Total
return also reflects expense limitations in effect during the period.

(3) Annualized.

(5) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.

26
<PAGE>

How to read the
financial highlights

Net investment
income

Net investment income includes dividend and interest income earned from the
Fund's securities after its expenses have been deducted.

Net realized and
unrealized gain (loss)
on investments and
foreign currency

A realized gain occurs when we sell an investment at a profit, while a realized
loss occurs when we sell an investment at a loss. When an investment increases
or decreases in value but we do not sell it, we record an unrealized gain or
loss. The amount of realized gain per share that we pay to shareholders is
listed under "Less dividends and distributions-Distributions from net realized
gain on investments."

Net asset value (NAV)

This is the value of a mutual fund share, calculated by dividing the net assets
by the number of shares outstanding.

Total return

This represents the rate that an investor would have earned or lost on an
investment in the Fund. In calculating this figure for the financial highlights
table, we include applicable fee waivers and assume the shareholder has
reinvested all dividends and realized gains.

Net assets

Net assets represent the total value of all the assets in the Fund's portfolio,
less any liabilities that are attributable to that class of the Fund.

Ratio of expenses to
average net assets

Ratio of net invest-
ment income to
average net assets

We determine this ratio by dividing net investment income by average net assets.

Portfolio turnover

<PAGE>

New Pacific Fund

Web site

www.delawarefunds.com

E-mail

[email protected]

Client Services Representative

800.510.4015

Delaphone Service

800.362.FUND (800.362.3863)

o For convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this Touch-Tone(R) service.

Registrant's Investment Company Act file number: 811-7972

CUSIP NASDAQ
----- ------
Institutional Class 245917810 DENIX

DELAWARE
INVESTMENTS
- -----------
Philadelphia o London

P-116 [--] PP 2/99