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FOR GROWTH OF CAPITAL
Delaware U.S. Growth Fund
(various photos demonstrating service and guidance, professional management
and goals)
service and guidance
professional management
goals
1999
Annual
Report
DELAWARE(SM)
INVESTMENTS
- ----------------------
Philadelphia o London
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A TRADITION OF SOUND INVESTING
commitment
A Commitment
To Our Investors
(photo of computer keyboard)
(photo of illustration from Growth of Capital Brochure)
Delaware Investments has a tradition of money management that dates back to
1929. We have a long and distinguished history of helping individuals and
institutions--including some of America's largest pension funds--reach their
financial goals.
Headquartered in Philadelphia, a block from the nation's oldest stock
exchange, the Delaware organization established its first mutual fund in 1938.
Delaware International Advisers Ltd., our international affiliate, was
established in 1990 and is headquartered in London.
Delaware Investments offers a full range of mutual funds. We also manage
investments for variable annuities and closed-end funds as well as offer a wide
range of retirement plan services for individuals and businesses.
Delaware Investments has approximately $45 billion in mutual fund assets
and institutional advisory accounts under management for more than
half-a-million investors.
Complete information on any fund offered by Delaware Investments can be found in
each fund's current prospectus. Prospectuses for all funds offered by Delaware
Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.
Investment Objective
Delaware U.S. Growth Fund seeks to provide maximum capital appreciation.
Table of Contents
LETTER TO SHAREHOLDERS Page 1
PORTFOLIO MANAGERS' REVIEW Page 3
PERFORMANCE SUMMARY Page 8
STATEMENT OF NET ASSETS Page 9
FINANCIAL HIGHLIGHTS Page 12
growth of
capital
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November 17, 1999
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1
Dear Shareholder:
LIKE A CLASSIC AUTOMOBILE THAT KEEPS ON running, the U.S. economy moved into its
ninth consecutive year of economic prosperity, despite a few fits and stops
along the way.
Late in the fall of 1998, in an attempt to calm worldwide economic turmoil,
governments from around the globe banded together to increase liquidity by
expanding the money supply. The U.S. economy, as well as the economies of many
other nations, rebounded strongly from previous economic uncertainty. U. S.
equity investors were once again able to benefit from a rising market as the
economy thrived on strong consumer demand and low inflation.
As winter came to an end, economic indicators hinted at inflation on the
horizon. In February and early March of 1999, concerns that the Federal Reserve
Board might raise short-term interest rates made for a bumpy ride in the stock
market. The Fed did not change its interest rate policy in March and on March
29, 1999, the Dow Jones Industrial Average, a widely followed stock market
indicator, closed above 10,000 points for the first time ever. The Dow continued
to climb, flirting with both sides of the 11,000 mark until August.
Increased stock market gains throughout spring and early summer bolstered
consumer confidence. Consumer spending and borrowing enjoyed robust growth.
However, fears of inflation resurfaced and this time, in response, the Fed
initiated two interest rate hikes--one in June and another in August (a third
rate increase occurred after the close of the Fund's fiscal period).
DELAWARE U.S. GROWTH FUND'S FISCAL PERIOD ENDED ON A POSITIVE NOTE AS ECONOMIC
ANNOUNCEMENTS POINTED TOWARD CONTINUED DOMESTIC GROWTH IN A LOW INFLATIONARY
ENVIRONMENT.
TOTAL RETURN--AS OF OCTOBER 31, 1999
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One Year
- --------------------------------------------------------------------------------
Delaware U.S. Growth Fund A Class +33.33%
Standard & Poor's 500 Stock Index +25.66%
Lipper Large-Cap Growth Fund Average (336 Funds) +38.76%
- --------------------------------------------------------------------------------
All performance shown above assumes reinvestment of dividends and capital gains.
Fund and Lipper performance is at net asset value without the effect of sales
charges. The Lipper category represents the average returns of large-cap growth
funds tracked by Lipper Analytical. Performance of other share classes varies
due to different fees and expenses. Performance information for all Delaware
U.S. Growth Fund classes can be found on page 8. The unmanaged Standard & Poor's
500 Stock Index is a measure of large capitalization domestic stocks. It is not
possible to invest directly in any index. Past performance is not a guarantee of
future results.
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Higher interest rates generally hindered equity market performance,
including the performance of growth companies during this period. This is
because growing companies that borrow to finance projects are faced with higher
costs of capital when interest rates increase. In addition, the amount investors
are willing to pay for this type of company tends to shrink in the face of
higher interest rates.
Equity investors spent the remainder of late summer and early fall 1999
struggling to predict the direction of interest rates. Skittish investors looked
to the Federal Reserve Board for indications of what to expect. Investor
preoccupation with Federal Reserve announcements led to dramatic stock market
swings in October. Delaware U.S. Growth Fund's fiscal period ended on a positive
note, however, as economic announcements pointed toward continued domestic
growth in a low inflationary environment. Stock prices stabilized somewhat
toward the end of October, encouraging investors.
Delaware U.S. Growth Fund performed well over the past year, substantially
outpacing the Standard and Poor's 500 Stock Index, your Fund's unmanaged
benchmark (as shown on page 1). The Fund's focus on technology companies helped
it perform favorably when performance in other sectors of the market lagged.
Delaware U.S. Growth Fund provided a robust 33.33% return for the 12-month
period ended October 31, 1999 (performance calculated for Class A shares at net
asset value).
On the following pages, Francis Houghton and Rufus Winton, portfolio
managers for Delaware U.S. Growth Fund, discuss in further detail the
performance and sector allocation of the Fund over the past year. We strongly
urge you to review their commentary.
We see the coming year as a time to be cautiously optimistic. High
productivity has kept inflationary pressures at bay, despite record high
national employment levels. As a result, U.S. economic growth continues to move
forward at a healthy pace. We expect this trend to continue as we move into the
new millennium.
Thank you for your continued confidence in Delaware Investments. We look
forward to reporting to you again next spring.
Sincerely,
/s/ Wayne A. Stork
- ------------------
WAYNE A. STORK
Chairman,
Delaware Investments Family of Funds
/s/ David K. Downes
- -------------------
DAVID K. DOWNES
President and Chief Executive Officer,
Delaware Investments Family of Funds
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Portfolio Managers' Review
BY FRANCIS HOUGHTON
Senior Portfolio Manager
RUFUS WINTON
Portfolio Manager
Lynch and Mayer, Inc.
November 17, 1999
MIXED SIGNALS FROM THE U.S. ECONOMY over the past year set a challenging
backdrop for equity investors. Equity markets flourished during much of the
first half of Delaware U.S. Growth Fund's fiscal year. With the arrival of
spring, however, came fears of inflation and increasing interest rates--this
began to erode investor confidence.
Delaware U.S. Growth Fund performed well during the past year, providing a
robust 33.33% return for the 12 months ended October 31, 1999 (for Class A
shares at net asset value). The Fund's performance was somewhat lower than the
Lipper Large-Cap Growth Fund average, a category that consists of 336 mutual
funds that, like Delaware U.S. Growth Fund, invest primarily in large-cap growth
companies. The average return of these funds was 38.76% during this period.
Delaware U.S. Growth Fund strives to maintain a well-balanced portfolio to
offset the risks associated with mutual funds that invest heavily in only one
sector. This may be the reason the Fund performed less favorably than the
average of the funds tracked by Lipper, Inc. that fall in the large-cap growth
fund category.
For the same time period, the Fund substantially outpaced its unmanaged
benchmark, the Standard & Poor's 500 Stock Index, that returned 25.66%. We
believe the Fund was able to perform well due to our focus on companies that
took advantage of technological advances. We see dynamic growth opportunities in
electronic commerce, technology and broadband communications. We attribute these
opportunities to significant technological innovation, new product cycles and
continued consumer confidence. As a result, a large number of Delaware U.S.
Growth Fund's holdings are found in these sectors. We will discuss how our
positions in each of these sectors affected the Fund's performance during the
past year in further detail on the following pages.
WE SEE DYNAMIC GROWTH OPPORTUNITIES IN ELECTRONIC COMMERCE, TECHNOLOGY AND
BROADBAND COMMUNICATIONS.
overview
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As always, we focus on companies that we believe are positioned to increase
their earnings and growth rates. We particularly focus on companies that we
believe are undergoing a positive fundamental change such as,
o a new product introduction;
o an improved industry environment; or,
o a corporate restructuring or a "turnaround" situation.
ADVANCEMENT IN INTERNET INFRASTRUCTURE COMPANIES
Information technology has prospered over the past year as businesses
rushed to provide faster and more efficient services to their clients. Personal
and business use of the Internet has become widespread, creating a new kind of
Internet company--the Internet infrastructure company. These companies usually
allow Internet services to thrive, performing necessary duties behind the scenes
and supporting dramatic growth. We expect Internet technology to expand
exponentially over the next few years, which should, in our opinion, place
Internet infrastructure companies in a strong growth position.
With this industry growing at an impressive pace, we increased our holdings
in the computer and technology sector to 24.3% of Delaware U.S. Growth Fund's
portfolio. We believe this industry will continue to grow well into the 21st
century for a number of reasons:
o U.S. corporations have continued to build their technological
infrastructure as e-commerce has become less of a novelty and more of a
business necessity. Not only have consumers generally embraced Internet
advances, paving the way for corporations to enhance their on-line
services, but business-to-business transactions also have increased in
popularity. For example, Dell Computer recently implemented a policy with
its suppliers to conduct all transactions solely through Internet channels.
WE EXPECT INTERNET TECHNOLOGY TO EXPAND EXPONENTIALLY OVER THE NEXT FEW YEARS,
WHICH SHOULD, IN OUR OPINION, PLACE INTERNET INFRASTRUCTURE COMPANIES IN A
STRONG GROWTH POSITION.
(photo of couple talking to financial adviser)
DELAWARE U.S. GROWTH FUND
SECTOR ALLOCATION
- --------------------------------------------------------------------------------
OCTOBER 31, 1999
Computers & Technology 24.3%
Energy 7.3%
Telecommunications 22.1%
Cash 0.5%
Electronics & Electrical Equipment 5.7%
Retail 14.0%
Industrial Machinery 2.3%
Healthcare & Pharmaceuticals 10.9%
Miscellaneous 2.4%
Cable, Media & Publishing 10.5%
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(photo of family on beach)
o Global economies, which have previously lagged the U.S. in Internet
advances, have recently begun to realize the benefits of the World Wide
Web. We expect U.S. technology companies to benefit as overseas demand for
these products increases over the coming years.
We maintain a substantial holding of Cisco Systems, a leading provider of
Internet networking devices. Cisco provides services to large enterprises,
service providers and small-to-medium sized businesses. Its wide market appeal
should leave this company in a healthy position to grow as the popularity of
on-line transactions expands even more.
Another company that has contributed to Delaware U.S. Growth Fund's strong
performance over the past year is Oracle. Oracle provides database and
networking solutions for corporations, allowing enhanced access to
database-driven Intranet and Web applications.
WIRELESS COMMUNICATION EXPLODES
The popularity of cellular telephones and other wireless communications devices
has exploded over the past year. Only recently, it seems, have consumers
recognized the benefits and convenience of these decade-old products.
This summer we purchased holdings of two leading wireless communications
corporations. Sprint PCS, a division of Sprint, provides national digital
wireless cellular telephone services to nearly 270 million Americans. This
corporation boasts superior technology and service features and is, in our
opinion, positioned to take advantage of increased market penetration in the
wireless communications arena.
We also continue to hold MCI Worldcom, a major player in the
telecommunications industry. Although the company's stock price hasn't
THE POPULARITY OF CELLULAR TELEPHONES AND OTHER WIRELESS COMMUNICATIONS DEVICES
HAS EXPLODED OVER THE PAST YEAR.
growth
DELAWARE U.S. GROWTH FUND PORTFOLIO HIGHLIGHTS
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OCTOBER 31, 1999
- --------------------------------------------------------------------------------
Median Market Capitalization $28 billion
Number of Stocks 45
Average Price-to-Earnings Ratio* 36.9x
Beta** 1.06
Portfolio Turnover 132%
Total Net Assets $123 million
- --------------------------------------------------------------------------------
* Average weighted P/E ratio is based on First Call fiscal 2000 forward
earnings estimates.
** Beta is a measure of risk relative to the S&P 500 Stock Index. A number
less than 1.0 means less historical price volatility than the index. A
number higher than 1.0 means more historical volatility than the index.
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(photo of computer keyboard)
appreciated in value as much as we had hoped over the past year, we still
believe it is worth holding. We think this company is managed in an efficient
manner and has, in our opinion, strong growth potential over the long term.
CONSUMER SPENDING BOOSTS RETAIL SALES
A combination of high consumer spending and the recent "digitilization" of
popular consumer products has allowed a number of retailers, particularly those
who specialize in technology products, to flourish over the past year. Consumers
have been racing to stores to purchase the newest line of available digital
products like digital video drives (DVD), digital cameras and digital
televisions. An explosion in the popularity of these products has contributed to
rapid growth among technology product superstores like BestBuy and Circuit City
that supply these items to consumers at discount prices. We added positions in
each of these companies to your Fund's portfolio during the summer.
We anticipate that consumer spending will continue at high levels through
the holiday season, supporting continued strong performance of selected retail
stocks over the next few months.
HEALTHCARE SECTOR: NEW ADVANCES IN MEDICINE
New product innovation, an aging U.S. population and consolidation within the
industry produced several investment opportunities for us during the past 12
months. We have focused particularly on medical and biotechnology companies that
have led advances in medicine. As always, when selecting medical stocks for
Delaware U.S. Growth Fund's portfolio, we look for companies that exhibit the
following characteristics:
o dynamic product development;
o financial stability along with dominant market positions; and
o accelerating growth.
NEW PRODUCT INNOVATION, AN AGING U.S. POPULATION AND CONSOLIDATION WITHIN THE
HEALTHCARE INDUSTRY PRODUCED SEVERAL INVESTMENT OPPORTUNITIES FOR US DURING THE
PAST 12 MONTHS.
DELAWARE U.S. GROWTH FUND TOP 10 HOLDINGS
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OCTOBER 31, 1999
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Johnson & Johnson 4.3%
Cisco Systems 3.8%
VoiceStream Wireless 3.8%
USA Networks 3.7%
BestBuy 3.6%
Oracle 3.3%
Amazon.com 3.2%
Tandy 3.2%
MCI Worldcom 2.8%
Microsoft 2.7%
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This past winter we purchased stock of a number of medical device
manufacturers, including Guidant and Johnson & Johnson. Johnson & Johnson's wide
array of products include prescription drugs, over-the-counter products, and
professional and surgical products. Guidant is a major producer of
cardiovascular devices, including cardiac pacemakers and defibrillators.
A large portion of our holdings in the healthcare sector are companies that
produce medical technology products. We expect continued positive revenue and
earnings growth potential from this sector as advancements in the healthcare
arena continue.
We have decreased our focus on pharmaceutical companies over the past few
months. Although it is our opinion that these pharmaceutical companies remain
well managed, we believe that their expected growth rates for the future won't
match the attractive rates that they achieved during 1998.
OUTLOOK
Our outlook for the U.S. economy during the next few months remains favorable.
Although consumer prices have risen slightly, price increases have remained in
line with economic analysts' expectations. That is, prices haven't risen any
higher than was expected over the past few months. Thus, inflationary pressures
remain at moderate levels. This, in conjunction with continued economic growth
and "manageable" interest rates, creates an environment of cautious optimism for
growth investors.
The Federal Reserve Board raised the federal funds rate one more time after
the close of this fiscal year--effectively "taking back" the third in the series
of rate cuts it "gave" the economy in autumn 1998. Although this caused some
short-term turbulence in the equity markets, we believe that conditions for
stock outperformance are favorable. Despite economic vitality, strong gains in
productivity continue to keep inflation in check.
We believe that Delaware U.S. Growth Fund is well positioned to take
advantage of advances in numerous technological areas over the coming year. As
always, we will focus on stocks that demonstrate signs of positive fundamental
change, accelerating earnings and strong long-term growth prospects. We expect
continued growth from these companies which should, in our opinion, enable
Delaware U.S. Growth Fund to continue to provide healthy returns for its
shareholders.
WE BELIEVE THAT DELAWARE U.S. GROWTH FUND IS WELL POSITIONED TO TAKE ADVANTAGE
OF ADVANCES IN NUMEROUS TECHNOLOGICAL AREAS OVER THE COMING YEAR.
outlook
(PHOTO OF GLASSES PEN AND KEYBOARD)
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Performance Summary
DELAWARE U.S. GROWTH FUND
GROWTH OF A $10,000 INVESTMENT
DECEMBER 3, 1993 (FUND INCEPTION) TO OCTOBER 31, 1999
Delaware U.S. Growth Fund Class A Standard & Poor's 500 Stock Index
Dec.'93 $ 9,425 $10,000
Dec.'94 $ 9,106 $ 9,846
Dec.'95 $11,286 $13,205
Dec.'96 $13,493 $15,880
Dec.'97 $17,667 $20,805
Dec.'98 $22,891 $26,353
Oct.'99 $25,486 $29,219
Chart assumes $10,000 invested December 3, 1993, and includes the effect of a
5.75% sales charge and reinvestment of distributions. The unmanaged Standard &
Poor's 500 Stock Index is a measure of large capitalization domestic stocks. It
is not possible to invest directly in any index. Performance of other Fund
classes will vary due to differing charges and expenses. Past performance does
not guarantee future results.
DELAWARE U.S. GROWTH FUND PERFORMANCE
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH OCTOBER 31, 1999
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 12/3/93)
Excluding Sales Charge +18.40% +21.58% +33.33%
Including Sales Charge +17.22% +20.15% +25.68%
- --------------------------------------------------------------------------------
Class B (Est. 3/29/94)
Excluding Sales Charge +18.73% +20.73% +32.39%
Including Sales Charge +18.65% +20.54% +27.39%
- --------------------------------------------------------------------------------
Class C (Est. 5/23/94)
Excluding Sales Charge +20.28% +20.80% +32.38%
Including Sales Charge +20.28% +20.80% +31.38%
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share value will fluctuate so that shares, when
redeemed, may be worth more or less than the original cost. Past performance
does not guarantee future results. B and C class results excluding sales charge
assume either contingent sales charges did not apply or the investment was not
redeemed.
Class A shares have a 5.75% front-end sales charge and a 12b-1 fee.
Class B shares do not have a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred sales
charge of up to 5% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
Average annual total returns for the lifetime, five-year and one-year periods
ended 10/31/99, for Delaware U.S. Growth Fund's Institutional Class were
+18.29%, +21.96% and +33.79%, respectively. The Institutional Class was made
available without sales charges only to certain eligible institutional accounts
on 12/3/93.
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for growth of capital 9
Financial Statements
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE U.S. GROWTH FUND
STATEMENT OF NET ASSETS
OCTOBER 31, 1999
NUMBER MARKET
OF SHARES VALUE
-------------------------------
COMMON STOCK - 99.48%
CABLE, MEDIA & PUBLISHING - 10.48%
*AT&T - Liberty Media Class A .......... 60,000 $ 2,381,250
*Clear Channel Communications .......... 35,413 2,846,319
Time Warner ........................... 44,400 3,094,125
*USA Networks .......................... 101,700 4,579,677
-----------
12,901,371
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COMPUTERS & TECHNOLOGY - 24.25%
*America Online ........................ 22,000 2,853,125
*Cisco Systems ......................... 63,700 4,715,791
*Covad Communications Group ............ 49,800 2,393,513
*EMC ................................... 42,200 3,080,600
International Business Machines ....... 24,000 2,361,000
*Micron Technology ..................... 35,800 2,552,988
*Microsoft ............................. 35,600 3,295,225
*Oracle ................................ 84,350 4,014,533
Pitney Bowes .......................... 66,500 3,029,906
*Sun Microsystems ...................... 14,800 1,565,563
-----------
29,862,244
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ELECTRONICS & ELECTRICAL EQUIPMENT - 5.75%
*Altera ................................ 44,700 2,173,538
Intel ................................. 34,000 2,631,813
*Solectron ............................. 30,200 2,272,550
-----------
7,077,901
-----------
ENERGY - 7.26%
Enron ................................. 67,200 2,683,800
Schlumberger Limited .................. 51,400 3,112,912
Transocean Offshore ................... 72,700 1,976,531
*Triton Energy ......................... 70,200 1,162,688
-----------
8,935,931
-----------
HEALTHCARE & PHARMACEUTICALS - 10.93%
*Amgen ................................. 26,000 2,072,688
*Genetech .............................. 15,000 2,186,250
*Genzyme-General Division .............. 44,600 1,703,163
*Genzyme Surgical Products ............. 1 5
Guidant ............................... 22,600 1,115,875
Johnson & Johnson ..................... 50,067 5,244,560
Medtronic ............................. 33,000 1,142,625
-----------
13,465,166
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INDUSTRIAL MACHINERY - 2.32%
*Celetica .............................. 51,400 2,859,125
-----------
2,859,125
-----------
MISCELLANEOUS - 2.37%
*Yahoo ................................. 16,300 2,919,738
-----------
2,919,738
-----------
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NUMBER MARKET
OF SHARES VALUE
-------------------------------
COMMON STOCK (CONTINUED)
Retail - 14.00%
*Abercrombie & Fitch Class A ........... 94,300 $ 2,569,675
*Amazon.com ............................ 55,200 3,896,775
*Best Buy .............................. 79,700 4,428,330
Circuit City Stores ................... 58,000 2,475,875
Tandy ................................. 61,600 3,876,950
-----------
17,247,605
-----------
TELECOMMUNICATIONS - 22.12%
*Ciena ................................. 68,800 2,423,050
*Exodus Communications ................. 29,800 2,560,006
GTE ................................... 24,500 1,837,500
Lucent Technologies ................... 37,400 2,402,950
*MCI Worldcom .......................... 40,500 3,474,141
*McLeod Class A ........................ 56,600 2,524,006
*Nextel Communications ................. 20,600 1,776,106
Nortel Networks ....................... 37,000 2,291,688
*Sprint PCS ............................ 39,600 3,284,325
*Voicestream Wireless .................. 47,300 4,672,352
-----------
27,246,124
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Total Common Stock (cost $100,075,252) 122,515,205
-----------
PRINCIPAL
AMOUNT
----------
REPURCHASE AGREEMENTS - 6.17%
With Chase Manhattan 5.20% 11/1/99 (dated
10/29/99, collateralized by $2,465,000 U.S.
Treasury Notes 6.125% due 12/31/01, market
value $2,527,369) ......................... $2,465,000 2,465,000
With J.P. Morgan Securities 5.20% 11/1/99
(dated 10/29/99, collateralized by
$1,770,000 U.S. Treasury Notes 5.625% due
5/15/01, market value $1,811,186 and
$791,000 U.S. Treasury Notes 6.50% due
8/31/01, market value $808,636) ........... 2,567,000 2,567,000
With PaineWebber 5.20% 11/1/99 (dated
10/29/99, collateralized by $885,000 U.S.
Treasury Notes 6.25% due 10/31/01,
market value $919,485 and $1,665,000
U.S. Treasury Notes 6.25% due 2/15/03,
market value $1,700,880) .................. 2,567,000 2,567,000
----------
Total Repurchase Agreements
(cost $7,599,000) ......................... 7,599,000
----------
<PAGE>
10 for growth of capital
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES - 105.65% .................... $130,114,205
(COST $107,674,252)
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (5.65%)** ... (6,953,768)
------------
NET ASSETS APPLICABLE TO 8,041,950 SHARES ($0.01 PAR VALUE)
OUTSTANDING - 100.00% ...................................... $123,160,437
============
NET ASSET VALUE - DELAWARE U.S. GROWTH FUND A CLASS
($37,771,321 / 2,467,027 SHARES) ........................... $15.31
======
NET ASSET VALUE - DELAWARE U.S. GROWTH FUND B CLASS
($25,937,847 / 1,788,670 SHARES) ........................... $14.50
======
NET ASSET VALUE - DELAWARE U.S. GROWTH FUND C CLASS
($6,682,229 / 426,856 SHARES) .............................. $15.65
======
NET ASSET VALUE - DELAWARE U.S. GROWTH FUND INSTITUTIONAL CLASS
($52,769,040 / 3,359,397 SHARES) ........................... $15.71
======
COMPONENTS OF NET ASSETS AT OCTOBER 31, 1999:
Common Stock, $0.01 par value, 70,000,000 shares authorized to
the Fund with 20,000,000 shares allocated to the Delaware
U.S. Growth Fund A Class, 20,000,000 shares allocated to the
Delaware U.S. Growth Fund B Class, 15,000,000 shares allocated
to the Delaware U.S. Growth Fund C Class, and 15,000,000
shares allocated to the Delaware U.S. Growth Fund
Institutional Class .......................................... $ 96,046,869
Accumulated net realized gain on investments .................... 4,673,615
Net unrealized appreciation of investments ...................... 22,439,953
------------
Total net assets ................................................ $123,160,437
============
- ------------
* Non-income producing security for the year ended October 31, 1999.
** Of this amount, $6,932,622 represents payable for securities purchased at
October 31, 1999.
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
DELAWARE U.S. GROWTH FUND
Net asset value A Class (A) ..................................... $15.31
Sales charge (5.75% of offering price or 6.07% of the amount
invested per share) (B) ...................................... 0.93
------
Offering price .................................................. $16.24
======
- ----------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See the current prospectus for purchases of $50,000 or more.
See accompanying notes
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for growth of capital 11
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE U.S. GROWTH FUND
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1999
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends ........................................ $400,649
Interest ......................................... 275,052
--------
$ 675,701
EXPENSES:
Management fees .................................. 606,514
Dividend disbursing and transfer agent fees
and expenses .................................. 555,007
Distribution expense ............................. 263,810
Registration fees ................................ 81,740
Reports and statements to shareholders ........... 81,740
Professional fees ................................ 45,500
Accounting and administration .................... 32,270
Custodian fees ................................... 9,595
Taxes (other than taxes on income) ............... 7,240
Directors' fees .................................. 4,294
Other ............................................ 18,640 1,706,350
--------
Less expenses paid indirectly .................... (9,107)
-----------
Total expenses ................................... 1,697,243
-----------
NET INVESTMENT LOSS .............................. (1,021,542)
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments ................. 7,328,259
Net change in unrealized appreciation/depreciation
of investments ................................ 14,391,314
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS ................................ 21,719,573
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............................... $20,698,031
===========
See accompanying notes
<PAGE>
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE U.S. GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
YEAR YEAR
ENDED ENDED
10/31/99 10/31/98
------------ -------------
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment loss ................................ $ (1,021,542) $ (160,171)
Net realized gain (loss) on investments ............ 7,328,259 (2,654,644)
Net change in unrealized appreciation/depreciation
of investments .................................. 14,391,314 5,165,122
------------ ------------
Net increase in net assets resulting
from operations ................................. 20,698,031 2,350,307
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments:
A Class ......................................... -- (2,703,511)
B Class ......................................... -- (722,725)
C Class ......................................... -- (110,828)
Institutional Class ............................. -- (7,317,726)
------------ ------------
-- (10,854,790)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ......................................... 26,392,044 12,827,868
B Class ......................................... 20,813,118 4,264,169
C Class ......................................... 5,196,397 1,702,784
Institutional Class ............................. 36,039,896 15,808,803
Net asset value of shares issued upon
reinvestment of distributions from
net realized gain on investments:
A Class ......................................... -- 2,613,993
B Class ......................................... -- 591,336
C Class ......................................... -- 109,009
Institutional Class ............................. -- 7,317,726
------------ ------------
88,441,455 45,235,688
------------ ------------
Cost of shares repurchased:
A Class ......................................... (8,790,855)
B Class ......................................... (3,097,377) (377,480)
C Class ......................................... (999,392) (261,212)
Institutional Class ............................. (22,902,507)
------------ ------------
(35,790,131) (14,213,937)
------------ ------------
Increase in net assets derived from
capital share transactions ...................... 52,651,324 31,021,751
------------ ------------
NET INCREASE IN NET ASSETS ......................... 73,349,355 22,517,268
NET ASSETS:
Beginning of year .................................. 49,811,082 27,293,814
------------ ------------
End of year ........................................ $123,160,437 $49,811,082
============ ============
See accompanying notes
<PAGE>
12 for growth of capital
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE U.S. GROWTH FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each year were as follows:
DELAWARE U.S. GROWTH FUND A CLASS
------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/99(2) 10/31/98(2) 10/31/97(2) 10/31/96(3) 10/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............................... $11.490 $16.650 $13.820 $12.430 $10.210
Income (loss) from investment operations:
Net investment loss ........................................... (0.161) (0.062) (0.060) (0.090) (0.090)
Net realized and unrealized gain on investments ............... 3.981 1.272 4.250 1.480 2.310
------- ------- ------- ------- -------
Total from investment operations .............................. 3.820 1.210 4.190 1.390 2.220
------- ------- ------- ------- -------
Less distributions:
Distributions from net realized gain on investments ........... -- (6.370) (1.360) -- --
------- ------- ------- ------- -------
Total distributions ........................................... -- (6.370) (1.360) -- --
------- ------- ------- ------- -------
Net asset value, end of year ..................................... $15.310 $11.490 $16.650 $13.820 $12.430
======= ======= ======= ======= =======
Total return(1) .................................................. 33.33% 10.52% 33.18% 11.18% 21.74%
Ratios and supplemental data:
Net assets, end of year (000 omitted) ......................... $37,771 $14,130 $6,933 $16,118 $13,574
Ratio of expenses to average net assets ....................... 1.86% 1.49% 1.44% 1.80% 1.85%
Ratio of expenses to average net assets prior
to expense limitations and expenses
paid indirectly ............................................. 1.86% 1.49% N/A 1.88% 2.18%
Ratio of net investment loss to average net assets ............ (1.12%) (0.52%) (0.38%) (0.77%) (0.88%)
Ratio of net investment loss to average net assets
prior to expense limitations and expenses
paid indirectly ............................................. (1.12%) (0.52%) N/A (0.85%) (1.21%)
Portfolio turnover rate ....................................... 132% 135% 144% 131% 58%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DELAWARE U.S. GROWTH FUND B CLASS
------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/99(2) 10/31/98(2) 10/31/97(2) 10/31/96(3) 10/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............................... $10.960 $16.260 $13.610 $12.330 $10.190
Income (loss) from investment operations:
Net investment loss ........................................... (0.253) (0.140) (0.160) (0.170) (0.140)
Net realized and unrealized gain on investments ............... 3.793 1.210 4.170 1.450 2.280
------- ------- ------- ------- -------
Total from investment operations .............................. 3.540 1.070 4.010 1.280 2.140
------- ------- ------- ------- -------
Less distributions:
Distributions from net realized gain on investments ........... -- (6.370) (1.360) -- --
------- ------- ------- ------- -------
Total distributions ........................................... -- (6.370) (1.360) -- --
------- ------- ------- ------- -------
Net asset value, end of year ..................................... $14.500 $10.960 $16.260 $13.610 $12.330
======= ======= ======= ======= =======
Total return(1) .................................................. 32.39% 9.62% 32.30% 10.38% 21.00%
Ratios and supplemental data:
Net assets, end of year (000 omitted) ......................... $25,938 $5,418 $1,653 $809 $567
Ratio of expenses to average net assets ....................... 2.56% 2.19% 2.14% 2.48% 2.50%
Ratio of expenses to average net assets prior to
expense limitations and expenses
paid indirectly ............................................. 2.56% 2.19% N/A 2.56% 2.83%
Ratio of net investment loss to average net assets ............ (1.82%) (1.22%) (1.08%) (1.45%) (1.57%)
Ratio of net investment loss to average net assets
prior to expense limitations and expenses
paid indirectly ............................................. (1.82%) (1.22%) N/A (1.53%) (1.90%)
Portfolio turnover rate ....................................... 132% 135% 144% 131% 58%
</TABLE>
- --------------------
(1) 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.
(2) The average shares outstanding method has been applied for per share
information.
(3) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.
See accompanying notes
<PAGE>
for growth of capital 13
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each year were as follows:
DELAWARE U.S. GROWTH FUND C CLASS
------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/99(2) 10/31/98(2) 10/31/97(2) 10/31/96(3) 10/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............................... $11.830 $17.020 $14.180 $12.850 $10.620
Income (loss) from investment operations:
Net investment loss ........................................... (0.264) (0.148) (0.170) (0.160) (0.100)
Net realized and unrealized gain on investments ............... 4.084 1.328 4.370 1.490 2.330
------- ------- ------- ------- -------
Total from investment operations .............................. 3.820 1.180 4.200 1.330 2.230
------- ------- ------- ------- -------
Less distributions:
Distributions from net realized gain on investments ........... -- (6.370) (1.360) -- --
------- ------- ------- ------- -------
Total distributions ........................................... -- (6.370) (1.360) -- --
------- ------- ------- ------- -------
Net asset value, end of year ..................................... $15.650 $11.830 $17.020 $14.180 $12.850
======= ======= ======= ======= =======
Total return(1) .................................................. 32.38% 10.04% 32.26% 10.35% 21.00%
Ratios and supplemental data:
Net assets, end of year (000 omitted) ......................... $6,682 $1,657 $252 $55 $27
Ratio of expenses to average net assets ....................... 2.56% 2.19% 2.14% 2.48% 2.50%
Ratio of expenses to average net assets prior to
expense limitations and expenses
paid indirectly ............................................. 2.56% 2.19% N/A 2.56% 2.82%
Ratio of net investment loss to average net assets ............ (1.82%) (1.22%) (1.08%) (1.45%) (1.61%)
Ratio of net investment loss to average net assets
prior to expense limitations and expenses
paid indirectly ............................................. (1.82%) (1.22%) N/A (1.53%) (1.93%)
Portfolio turnover rate ....................................... 132% 135% 144% 131% 58%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DELAWARE U.S. GROWTH FUND INSTITUTIONAL CLASS
------------------------------------------------------------
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/99(2) 10/31/98(2) 10/31/97(2) 10/31/96(3) 10/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ............................... $11.750 $16.860 $13.940 $12.500 $10.230
Income (loss) from investment operations:
Net investment loss ........................................... (0.118) (0.027) (0.010) (0.050) (0.050)
Net realized and unrealized gain on investments ............... 4.078 1.287 4.290 1.490 2.320
------- ------- ------- ------- -------
Total from investment operations .............................. 3.960 1.260 4.280 1.440 2.270
------- ------- ------- ------- -------
Less distributions:
Distributions from net realized gain on investments ........... -- (6.370) (1.360) -- --
------- ------- ------- ------- -------
Total distributions ........................................... -- (6.370) (1.360) -- --
------- ------- ------- ------- -------
Net asset value, end of year ..................................... $15.710 $11.750 $16.860 $13.940 $12.500
======= ======= ======= ======= =======
Total return(1) .................................................. 33.79% 10.80% 33.57% 11.52% 22.19%
Ratios and supplemental data:
Net assets, end of year (000 omitted) ......................... $52,769 $28,606 $18,455 $10,003 $4,819
Ratio of expenses to average net assets ....................... 1.56% 1.19% 1.14% 1.48% 1.50%
Ratio of expenses to average net assets prior to
expense limitations and expenses
paid indirectly ............................................. 1.56% 1.19% N/A 1.56% 1.83%
Ratio of net investment loss to average net assets ............ (0.82%) (0.22%) (0.08%) (0.45%) (0.59%)
Ratio of net investment loss to average net assets
prior to expense limitations and expenses
paid indirectly ............................................. (0.82%) (0.22%) N/A (0.53%) (0.92%)
Portfolio turnover rate ....................................... 132% 135% 144% 131% 58%
</TABLE>
- ----------------------
(1) 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.
(2) The average shares outstanding method has been applied for per share
information.
(3) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.
See accompanying notes
<PAGE>
14 for growth of capital
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE U.S. GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999
- --------------------------------------------------------------------------------
Delaware Group Adviser Funds, Inc. ("The Company") is registered as a
diversified open-end investment company under the Investment Company Act of
1940, as amended. The Company is organized as a Delaware Business Trust. The
Company currently issues three separate series of shares: the Delaware U.S.
Growth Fund, the Delaware Overseas Equity Fund and the Delaware New Pacific
Fund. These financial statements and related notes pertain to the Delaware U.S.
Growth Fund (the "Fund"). The Fund offers four classes of shares. The A Class
carries a front-end sales charge of 5.75%. The B Class carries a back-end
deferred sales charge. The C Class carries a level load deferred sales charge
and the Institutional Class has no sales charge.
The objective of the Fund is to seek to maximize capital appreciation.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund.
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of the close of the NYSE on the valuation date. Securities
not traded or securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices. Money market instruments having less than 60
days to maturity are valued at amortized cost, which approximates market value.
Other securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith or under the
direction of the Company's Board of Directors.
Federal Income Taxes - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from generally
accepted accounting principles.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Fund on the basis of daily net assets of each class. Distribution expenses
relating to a specific class are charged directly to that class.
Repurchase Agreements - The Fund may invest in a pooled cash account along with
other members of the Delaware Investments Family of Funds. The aggregate daily
balance of the pooled cash account is invested in repurchase agreements secured
by obligations of the U.S. Government. The respective collateral is held by the
Fund's custodian bank until the maturity of the respective repurchase
agreements. Each repurchase agreement is at least 100% collateralized. However,
in the event of default or bankruptcy by the counterparty to the agreement,
realization of the collateral may be subject to legal proceedings.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
<PAGE>
Other - Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. The Fund declares and pays dividends from net
investment income and capital gains, if any, annually.
Certain expenses of the Fund are paid through "soft dollar" arrangements with
brokers. These transactions are done subject to best price and execution. The
amount of these expenses was approximately $2,113 for the year ended October 31,
1999. In addition, the Fund receives earnings credits from its custodian when
positive balances are maintained, which are used to offset custody fees. These
credits were $6,994 for the year ended October 31, 1999. The expenses paid under
the above arrangements are included in their respective expense captions on the
Statement of Operations with the corresponding expense offset shown as "Expenses
paid indirectly".
2. Investment Management and Other Transactions with Affiliates
Effective April 1, 1999, in accordance with the terms of the Investment
Management Agreement, the Fund pays Delaware Management Company ("DMC"), the
Investment Manager of the Fund, an annual fee which is calculated at a rate of
0.65% on the first $500 million of average daily net assets, 0.60% on the next
$500 million, 0.55% on the next $1.5 billion, and 0.50% on the average daily net
assets in excess of $2.5 billion. Prior to April 1, 1999, DMC was paid at a rate
of 0.70% of the average daily net assets of the Fund. At October 31, 1999, the
Fund had a liability for investment management fees and other expenses payable
to DMC for $64,432.
DMC has entered into a sub-advisory agreement with Lynch & Mayer, Inc., an
affiliate of DMC, with respect to the management of the Fund. The sub-adviser
receives sub-advisory fees from the Investment Manager for its services which is
calculated at a rate of 0.40% of the daily average net assets of the Fund. The
Fund does not pay any fees directly to the sub-adviser.
The Fund has engaged Delaware Service Company, Inc. ("DSC"), an affiliate of
DMC, to provide dividend disbursing, transfer agent and accounting services. The
Fund pays DSC a monthly fee based on the number of shareholder accounts,
shareholder transactions, and average net assets, subject to certain minimums.
At October 31, 1999, the Fund had a liability for such fees and other expenses
payable to DSC for $27,457.
Pursuant to the Distribution Agreement, the Fund pays Delaware Distributors,
L.P. ("DDLP"), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.30% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Classes. At October 31, 1999, the Fund
had a liability for distribution fees and other expenses payable to DDLP of
$54,830.
For the year ended October 31, 1999 DDLP earned $34,402 for commissions on sales
of the Fund A Class shares.
Certain officers of DMC, DSC and DDLP are officers, directors and/or employees
of the Fund. These officers, directors and employees are paid no compensation by
the Fund.
<PAGE>
for growth of capital 15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. Investments
During the year ended October 31, 1999, the Fund made purchases of $167,073,395
and sales of $114,712,301 of investment securities other than U.S. government
securities and temporary cash investments.
At October 31, 1999, net unrealized appreciation was $22,035,370 of which
$24,725,701 related to unrealized appreciation of securities and $2,690,331
related to unrealized depreciation of securities. At October 31, 1999, the
aggregate cost of securities was $108,078,835.
4. Capital Stock
Transactions in capital stock shares were as follows:
YEAR YEAR
ENDED ENDED
10/31/99 10/31/98
---------- ----------
Shares sold:
A Class .......................................... 1,847,598 1,076,710
B Class .......................................... 1,523,020 369,583
C Class .......................................... 356,169 138,063
Institutional Class .............................. 2,506,744 1,291,956
Shares issued upon reinvestment of distributions
from net realized gain on investments:
A Class .......................................... -- 246,836
B Class .......................................... -- 58,145
C Class .......................................... -- 9,964
Institutional Class .............................. -- 677,567
---------- ----------
6,233,531 3,868,824
---------- ----------
Shares repurchased:
A Class .......................................... (610,432) (510,127)
B Class .......................................... (228,770) (34,977)
C Class .......................................... (69,457) (22,718)
Institutional Class .............................. (1,581,540) (629,729)
---------- ----------
(2,490,199) (1,197,551)
---------- ----------
Net Increase ........................................ 3,743,332 2,671,273
========== ==========
5. Lines of Credit
The Fund has a committed line of credit for $5,200,000. No amount was
outstanding at October 31, 1999, or at any time during the period.
<PAGE>
16 for growth of capital
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE U.S. GROWTH FUND
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
DELAWARE GROUP ADVISER FUNDS, INC. - DELAWARE U.S. GROWTH FUND
We have audited the accompanying statement of net assets of Delaware U.S. Growth
Fund (the "Fund") as of October 31, 1999, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the three years in the period then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for the
periods ended October 31, 1995 and 1996 were audited by other auditors whose
report dated December 20, 1996 expressed an unqualified opinion on those
financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1999, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware U.S. Growth Fund at October 31, 1999, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and its financial highlights for each of the three years
in the period then ended, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
---------------------
Philadelphia, Pennsylvania
December 3, 1999
<PAGE>
THIS ANNUAL REPORT IS FOR THE INFORMATION OF SHAREHOLDERS OF DELAWARE U.S.
GROWTH Fund, but it may be used with prospective investors when preceded or
accompanied by a current Prospectus for Delaware U.S. Growth Fund and the
Delaware Investments Performance Update for the most recently completed calendar
quarter. The Prospectus sets forth details about charges, expenses, investment
objectives and operating policies of the Fund. You should read the prospectus
carefully before you invest or send money. The figures in this report represent
past results which are not a guarantee of future results. The return and
principal value of an investment in the Fund will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
<TABLE>
<CAPTION>
<S> <C>
Board of Directors Affiliated Officers
WAYNE A. STORK RICHARD J. FLANNERY
Chairman Executive Vice President and General Counsel
Delaware Investments Family of Funds Delaware Investments Family of Funds
Philadelphia, PA Philadelphia, PA
WALTER P. BABICH BRUCE D. BARTON
Board Chairman, Citadel Constructors, Inc. President and Chief Executive Officer
King of Prussia, PA Delaware Distributors, L.P.
Philadelphia, PA
DAVID K. DOWNES
President and Chief Executive Officer ERIC E. MILLER
Delaware Investments Family of Funds Senior Vice President, Secretary
Philadelphia, PA and Deputy General Counsel
Delaware Investments Family of Funds
JOHN H. DURHAM Philadelphia, PA
Private Investor
Horsham, PA
ANTHONY D. KNERR
Consultant, Anthony Knerr & Associates
New York, NY
ANN R. LEVEN
Former Treasurer, National Gallery of Art [photo of globes]
Washington, DC
THOMAS F. MADISON
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
CHARLES E. PECK
Retired
Fredericksburg, VA directors & officers
JAN L. YEOMANS
Vice President and Treasurer
3M Corporation
St. Paul, Minnesota
- ---------------------------------------------------------------------------------------------------------
INVESTMENT MANAGER SUBADVISER
Delaware Management Company Lynch & Mayer, Inc.
Philadelphia, Pennsylvania New York, NY
INTERNATIONAL AFFILIATE SHAREHOLDER SERVICING,
Delaware International Advisers Ltd. DIVIDEND DISBURSING
London, England AND TRANSFER AGENT
Delaware Service Company, Inc.
NATIONAL DISTRIBUTOR Philadelphia, Pennsylvania
Delaware Distributors, L.P.
Philadelphia, Pennsylvania 1818 Market Street
Philadelphia, PA 19103-3682
</TABLE>
<PAGE>
When used with prospective investors, this report must be [photo of globes]
preceded or accompanied by a current Delaware U.S. Growth
Fund Prospectus and the Delaware Investments Performance
Update for the most recently completed calendar quarter. For
a prospectus of any other mutual fund from Delaware
Investments, contact your financial adviser or Delaware
Investments.
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
DELAWARE(SM)
INVESTMENTS
- ----------------------
Philadelphia o London Be sure to consult your financial adviser when
making investments. Mutual funds can be a valuable
part of your financial plan; however, shares of
the Fund are not FDIC or NCUSIF insured, are not
guaranteed by any bank or any credit union, and
Printed in the USA involve investment risk, including the possible
on recycled paper loss of the principal amount invested. Shares of
the Fund are not bank or credit union deposits.
(2401)
AR-101[10/99] PPL12/99 (C) Delaware Distributors, L.P.
