<PAGE>
F O R I N T E R N A T I O N A L D I V E R S I F I C A T I O N
New Pacific Fund
service and guidance
professional management
[GRAPHIC OMITTED]
goals
1999
Semi-Annual
Report
(photo of illustration from
International Diversification Brochure)
DELAWARE
INVESTMENTS
- ---------------------
Philadelphia o London
<PAGE>
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international
diversification
2
May 15, 1999
Dear Shareholder:
Stocks of companies in emerging markets have staged a dramatic come-back during
the past six months as many international economies bounced back from the
turbulent summer of 1998. In the aftermath of last year's Asian crisis, there is
rising optimism for many economies of the Pacific Rim.
After the Federal Reserve Board lowered domestic interest rates last autumn
in order to increase liquidity to world-wide markets, many central banks around
the world followed suit. Governments in Taiwan, Japan and Singapore tried to
increase cash flow in their economies. Central bank activity around the globe
produced a favorable amount of liquidity in international markets and allowed
many Asian economies to begin their slow recovery. The results so far have been
favorable, as indicated by the 27.67% return provided by the Morgan Stanley
Pacific Index for the six month period ended April 30, 1999. New Pacific Fund
provided 29.04% for the same time period (for Class A Shares at net asset value
with all distributions reinvested), outpacing its benchmark.
In mid-1998, as Asian economies were just beginning to regain momentum, we
saw exceptional value in these economies. As Japan made strides to improve its
economic situation, fears that China would devalue its national currency
subsided. This helped calm many of the lingering fears about Asian economic
stability. Although economies in many Pacific nations are still a bit shaky due
to currency destabilization, we have seen a visible improvement in conditions.
Growing GDP, falling interest rates and a slight increase in consumer spending
in many Asian nations seem to point to expanding economies. In addition, many
businesses across Asia recently announced plans for corporate restructuring, a
move we expect will benefit shareholders over the long term. As a result of the
crisis last year, we were able to purchase securities at prices we considered to
be substantial discounts. Recently we have seen an increase in imports while
interest rates began to fall, both leading to our expectations that these
investments will contribute to your Fund's performance as the health of these
nations improves even more.
CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------------------------
For the period ended April 30, 1999
Six Months
- --------------------------------------------------------------------------------
New Pacific Fund A Class +29.04%
Morgan Stanley Pacific Index +27.67%
Lipper Pacific Region Fund Average (54 Funds) +31.93%
- --------------------------------------------------------------------------------
Source: Lipper Analytical Services.
All performance shown above is based on net asset value without effect of sales
charges and assumes reinvestment of all distributions. See page 7 for complete
performance information for all classes. Performance for other Fund classes
varies due to different expenses. The Morgan Stanley Pacific Index is an
unmanaged measure of international stocks in established Pacific markets. All
returns are stated in U.S. dollars. Past performance does not guarantee future
results.
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3
New Pacific Fund performed favorably over the past six months amid these
conditions. As Asian economies continue to improve, we believe your portfolio is
poised to reap the benefits of an economic recovery in this area of the world.
Although there are substantial risks inherent in international investing,
such as currency and political risks, there can also be great growth potential.
On the pages that follow, Jane Pickard, your Fund's portfolio manager, discusses
in further detail New Pacific Fund's performance since November. I urge you to
read her commentary.
Riding out the turbulent times faced by Asian markets over the past few years
has been difficult. We appreciate the confidence you have shown in the New
Pacific Fund during this period and applaud your decision to remain invested in
the Asian region despite the difficulties it has faced. We believe the long-term
prospects for this region are extremely favorable and that your patience will be
rewarded over time.
Sincerely,
/s/ Wayne A. Stork
- --------------------------------------
Wayne A. Stork
Director,
Delaware Investments Family of Funds
Chairman,
Delaware Management Holdings, Inc.
/s/ David K. Downes
- --------------------------------------
David K. Downes
Executive Vice President and
Chief Operating Officer
Delaware Investments Family of Funds
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4
Portfolio Manager's Review
By Jane Pickard
AIB Govett, Inc.
May 15, 1999
Slowly but surely, economies in Asia have taken on new life over the past six
months. Consumer confidence has risen somewhat, and corporate restructuring has
helped increase Gross Domestic Product (GDP) in Pacific region nations. Asian
stock markets have regained strength this winter - in sharp contrast to the
significant losses of last summer.
Looking back to last year, the outlook for Asian economies wasn't very
favorable. Many nations struggled with soaring interest rates, bankruptcies, and
currency woes. Economies slowed, export volumes fell and corporate earnings
declined within many sectors. As these recessionary conditions spread throughout
eastern Asia, stock markets the world over suffered. New Pacific Fund was down
- -36.85% for fiscal 1998 (for Class A shares at net asset value with all
distributions reinvested). After many disappointments, however, early autumn
marked a turning point for many Asian economies.
Reaping the benefits of the market turnaround, New Pacific Fund provided a
total return of 29.04% for the six months ended April 30, 1999 (for Class A
shares at NAV with reinvestment of all distributions). This performance was
quite strong, outpacing the 27.67% return provided by the Fund's unmanaged
benchmark, the Morgan Stanley Pacific Index. New Pacific Fund's performance was,
however, slightly below the 31.93% average of the 54 Pacific region funds
tracked by Lipper Analytical Services. We believe our performance may have been
slightly lower than the average of our peers due in part to our lack of holdings
New Pacific Fund Country Allocation
- --------------------------------------------------------------------------------
April 30, 1999
India 3.6% Singapore 9.6%
Japan 36.4% South Korea 7.9%
China 1.7% Thailand 6.2%
Hong Kong 11.6% Net Cash and Other Assets 12.6%
Philippines 2.9%
Australia 7.5%
<PAGE>
for
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5
in Malaysian markets, the top performing Asian market during the past six
months. We believe that the high degree of political uncertainty that abounds in
Malaysia would introduce undue risk to your portfolio.
Although it appears that the worst is over, it will take time for the
economies of the Far East to fully recover. We expect this recovery period to
provide us with opportunities to purchase attractive stocks as companies shift
their management strategies. Japanese companies like Sony and Nissan are working
through corporate restructurings. Both expect continued organizational changes
to help them compete more effectively with American and European corporations.
We attribute rebounding economic growth in Asian markets over the past six
months to the following factors:
o Asian currencies have remained stable amid declining U.S. interest rates; and,
o A number of corporations, particularly in Japan and Korea, announced plans to
restructure operations in an attempt to streamline their businesses and increase
earnings potential.
In our last report, we explained that we had established a large cash
position in an effort to preserve principal amid the widespread uncertainty. As
Asian economies strengthened and buying opportunities arose, we reallocated a
large portion of our cash position into stocks in Japan, the Philippines, and
Singapore. This winter we purchased Softbank Corp., a Japanese software
development company. As Japanese and other word-wide markets increase their
reliance on computers, we expect to see continued growth potential in the
technology sector. We also purchased holdings of Rio Tinto, an Australian
diversified commodities mining company. We maintained large positions in
Singapore and Thailand, where companies are making significant progress in
corporate restructuring. Also, lower interest rates in Singapore continue to
spark interest in the housing market. As a result we expect real estate
companies like DBS Land and Allgreen Properties could add to your Fund's return.
We expect the recovery period in the Pacific region to provide us with
opportunities to purchase attractive stocks as companies shift their management
strategies.
<PAGE>
for
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6
Outlook
As anticipation of recovery in the Asian markets grows, we expect to see stock
prices in this region rise even further. We believe that Asian markets can
continue to improve for the following reasons:
o Political conditions should remain fairly stable;
o We expect a continuation of corporate restructuring; and,
o Interest rates appear to be moving lower.
In light of recent improvements along the Pacific Rim, it is our opinion that
there are substantial long-term opportunities available by investing in emerging
markets along the Pacific Rim. We expect to see continued economic recovery
throughout the remainder of 1999.
New Pacific Fund
Portfolio Highlights
- --------------------------------------------------------------------------------
April 30, 1999
- --------------------------------------------------------------------------------
Number of Stocks 65
Number of Countries 9
Portfolio Turnover 49%
Beta* 0.79
*Beta is a measure of volatility relative to the unmanaged MSCI Pacific Index
for the past three years ended April 30, 1999. A number less than 1.0 means a
security has fluctuated less in price than the index. A number more than 1.0
means the security has fluctuated more than the index.
<PAGE>
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7
Performance Summary
New Pacific Fund Performance
- --------------------------------------------------------------------------------
Average Annual Return Through April 30, 1999
Lifetime Five Years One Year
Class A (Est. 12/3/93)
Excluding Sales Charge -8.32% -9.02% -1.01%
Including Sales Charge -9.32% -10.09% -6.64%
- --------------------------------------------------------------------------------
Class B (Est. 3/29/94)
Excluding Sales Charge -8.65% -9.58% -1.65%
Including Sales Charge -8.82% -9.93% -6.56%
- --------------------------------------------------------------------------------
Class C (Est. 7/7/94)
Excluding Sales Charge -9.55% -1.68%
Including Sales Charge -9.55% -2.67%
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 carry a front-end sales charge, but are subject to
a 1% annual distribution and service fee. They are also subject to a
deferred sales charge of up to 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, one-year
periods and six-month cumulative return for the periods ended 4/30/99,
for New Pacific Fund's Institutional Class were -10.06%, -8.62%%,
-0.66%, and +29.00%, respectively. The institutional class was made
available without sales charges only to certain eligible institutional
accounts on 2/3/94.
An expense limitation of 1.70%, exclusive of 12b-1 fees, was in effect
during this period. Performance would have been lower had the expense
limitation not been in effect.
<PAGE>
8 for international diversification
Financial Statements
Delaware Group Adviser Funds, Inc.
New Pacific Fund
Statement of Net Assets
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Number Market
of Shares Value
-----------------------
Common Stock - 83.90%
Australia - 7.46%
Australia & New Zealand Banking Group ................ 14,000 $110,863
National Mutual Holdings ............................. 92,000 161,895
Orica ................................................ 39,000 226,940
Pasminco ............................................. 153,300 171,392
Rio Tinto ............................................ 11,000 185,201
Telstra .............................................. 28,500 154,604
---------
1,010,895
---------
China - 1.71%
Guangdong Kelon Electric Holding ..................... 257,000 232,110
---------
232,110
---------
Hong Kong - 11.59%
*China Telecom ........................................ 66,000 150,723
CLP Holdings ......................................... 30,000 161,019
Dairy Farm International ............................. 143,000 211,640
First Pacific ........................................ 154,000 119,216
HSBC Holdings ........................................ 5,600 208,085
Hutchison Whampoa .................................... 13,000 116,571
New World Development ................................ 82,000 203,131
NG Fung Hong ......................................... 139,927 135,402
South China Morning Post ............................. 234,000 141,143
Sun Hung Kai Properties .............................. 14,000 122,828
---------
1,569,758
---------
India - 3.61%
BSES Limited, GDR .................................... 2,593 24,958
ICICI, GDR ........................................... 6,170 39,334
Mahanagar Tele Nigam, GDR ............................ 12,500 130,000
Reliance Industries, GDR ............................. 20,680 155,100
State Bank Of India, GDR ............................. 10,070 89,623
Videsh Sanchar Nigam Limited, GDR .................... 4,110 49,320
---------
488,335
---------
Japan - 36.40%
Denso ................................................ 13,000 264,139
Fuji Photo Film ...................................... 6,000 226,728
Fujitsu .............................................. 24,000 411,228
Ito-Yokado ........................................... 5,000 307,080
Kao .................................................. 11,000 279,263
Kirin Brewery ........................................ 22,000 248,848
Mitsubishi ........................................... 36,000 238,291
Mitsui Fudosan ....................................... 31,000 285,714
Nifco ................................................ 800 6,917
Nippon Telegraph & Telephone ......................... 26 283,201
Nissin Food Products ................................. 10,000 219,522
NTT Mobile Communications ............................ 4 234,604
Omron ................................................ 21,000 289,443
Orix ................................................. 3,400 273,766
<PAGE>
- --------------------------------------------------------------------------------
Number Market
of Shares Value
-----------------------
Common Stock (Continued)
Japan (Continued)
Ricoh Company ........................................ 28,000 $269,795
Sekisui Chemical ..................................... 35,000 234,018
Shohkoh Fund & Company ............................... 600 351,906
Softbank Corporation ................................. 1,900 252,962
Yamanouchi Pharmaceutical ............................ 8,000 253,372
---------
4,930,797
---------
Phillipines - 2.87%
Far East Bank & Trust ................................ 3,479 5,856
Metropolitan Bank & Trust ............................ 9,700 96,936
Philippine Long Distance, ADR ........................ 5,900 190,275
San Miguel ........................................... 45,000 95,858
---------
388,925
---------
Singapore - 6.17%
*Allgreen Properties .................................. 100,000 60,776
DBS Land ............................................. 80,000 148,222
Fraser & Neave ....................................... 70,000 309,780
Keppel ............................................... 60,000 171,353
Sembcorp Industries .................................. 26 32
*Singapore Press Holdings ............................. 10,000 146,334
---------
836,497
---------
South Korea - 7.89%
*Housing & Commercial Bank ............................ 8,740 205,908
Korea Electric Power ................................. 6,180 177,835
L.G. Chemical Limited ................................ 12,978 223,854
Pohang Iron & Steel .................................. 2,860 243,540
Samsung Electronics .................................. 2,825 217,254
---------
1,068,391
---------
Thailand - 6.20%
Advanced Info Service ................................ 13,000 138,264
*Bangkok Expressway Public ............................ 226,400 197,607
*Krung Thai Bank Public ............................... 289,600 201,301
*PTT Exploration & Production ......................... 14,500 133,864
Total Access Communication ........................... 49,800 169,320
---------
840,356
---------
Total Common Stock (cost $9,225,460) ................. 11,366,064
---------
Investment Companies - 4.35%
*Taipei Fund .......................................... 70 589,750
---------
Total Investment Companies (cost $637,053) ........... 589,750
---------
Warrants - 3.47%
*Development Bank Singapore ........................... 49,000 355,270
*Singapore Airlines ................................... 19,000 115,174
---------
Total Warrants (cost $321,791) ....................... 470,444
---------
<PAGE>
for international diversification 9
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
------------------------------
Repurchase Agreements - 7.89%
With Chase Manhattan 4.85% 5/3/99
(dated 4/30/99, collateralized by
$161,000 U.S. Treasury Notes 5.50% due
12/31/00, market value $165,416 and
$130,000 U.S. Treasury Notes 5.50% due
12/31/00, market value $132,333 and
$66,000 U.S. Treasury Notes 5.75% due
8/15/03, market value $67,789) ...................... $358,000 $358,000
With J.P. Morgan Securities 4.85% 5/3/99
(dated 4/30/99, collateralized by
$100,000 U.S. Treasury Notes 5.50% due
5/31/03, market value $103,329 and
$93,000 U.S. Treasury Notes 5.50% due
5/31/03, market value $94,634 and
$161,000 U.S. Treasury Notes 5.75% due
10/31/02, market value $164,214) .................... 355,000 355,000
With PaineWebber 4.85% 5/3/99
(dated 4/30/99, collateralized by
$136,000 U.S. Treasury Notes 4.000% due
10/31/00, market value $133,536 and
$132,000 U.S. Treasury Notes 6.25% due
10/31/01, market value $135,792 and
$91,000 U.S. Treasury Notes 6.375% due
7/15/99, market value $92,977) ...................... 355,000 355,000
-----------
Total Repurchase Agreements
(cost $1,068,000) ................................... 1,068,000
-----------
Total Market Value of Securities - 99.61%
(COST $11,252,304) .................................. $13,494,258
Receivables and Other Assets Net of Liabilities - 0.39% 53,203
-----------
Net Assets Applicable to 2,285,173 Shares
($.01 Par Value) Outstanding - 100% ................. $13,547,461
===========
Net Asset Value - New Pacific Fund A Class
($8,982,219 / 1,520,886 Shares) ..................... $5.91
=====
Net Asset Value - New Pacific Fund B Class
($3,598,865 / 602,104 Shares) ....................... $5.98
=====
Net Asset Value - New Pacific Fund C Class
($414,396 / 70,966 Shares) .......................... $5.84
=====
Net Asset Value - New Pacific Fund Institutional Class
($551,981 / 91,217 Shares) .......................... $6.05
=====
<PAGE>
- --------------------------------------------------------------------------------
Components of Net Assets at April 30, 1999:
Common Stock $.01 par value, 70,000,000 shares authorized with
20,000,000 shares allocated to the New Pacific Fund A Class,
20,000,000 shares allocated to the New Pacific Fund B Class,
15,000,000 shares allocated to the New Pacific Fund C Class and
15,000,000 shares allocated to the New Pacific Fund
Institutional Class ............................................ $18,126,557
Accumulated net investment loss** ................................. (58,552)
Accumulated net realized loss on investments ...................... (6,749,429)
Net unrealized appreciation of investments and foreign currencies . 2,228,885
-----------
Total Net Assets .................................................. $13,547,461
===========
- ----------
* Non-income producing security
** Undistributed net investment income includes net realized gains (losses) on
foreign currencies. Net realized gains (losses) on foreign currencies are
treated as net investment income in accordance with provisions of the
Internal Revenue Code.
ADR - American Depository Receipt
GDR - Global Depository Receipt
Net Asset Value and Offering Price Per Share -
New Pacific Fund A Class
Net asset value A Class (A) ....................................... $5.91
Sales charge (5.75% of offering price or 6.09% of the amount
invested per share) (B) ........................................ 0.36
-----
Offering price .................................................... $6.27
=====
- ----------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $100,000 or
more for New Pacific Fund Class A.
See Notes to Financial Statements for change in front-end sales charge effective
November 2, 1998.
See accompanying notes
<PAGE>
10 for international diversification
Delaware Group Adviser Funds, Inc.
New Pacific Fund
Statement of Assets and Liabilities
April 30, 1999
(Unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investments at market .................................... $13,494,258
Cash and foreign currencies .............................. 124,786
Dividends and interest receivable ........................ 49,829
Subscriptions receivable ................................. 309,179
Receivable for securities sold ........................... 1,361,935
Other assets ............................................. 3,240
-----------
Total assets ............................................. 15,343,227
-----------
LIABILITIES:
Liquidations payable ..................................... 51,539
Payable for securities purchased ......................... 1,691,356
Other accounts payable and accrued expenses .............. 52,871
-----------
Total liabilities ........................................ 1,795,766
-----------
Total Net Assets ......................................... $13,547,461
===========
Investments at cost ...................................... $11,252,304
===========
See accompanying notes
<PAGE>
Delaware Group Adviser Funds, Inc.
New Pacific Fund
Statement of Operations
Six Months Ended April 30, 1999
(Unaudited)
- --------------------------------------------------------------------------------
Investment Income:
Dividends ............................................... $39,519
Interest ................................................ 12,733
Foreign tax withheld .................................... (4,726) 47,526
-------
Expenses:
Management fees ......................................... 40,130
Registration fees ....................................... 43,490
Dividend disbursing and transfer agent
fees and expenses .................................... 29,290
Distribution expense .................................... 26,786
Custodian fees and expenses ............................. 18,124
Reports and statements to shareholders .................. 10,997
Accounting and administration ........................... 3,485
Directors' fees ......................................... 2,520
Taxes (other than taxes on income) ...................... 1,670
Professional fees ....................................... 255
Amortization of organization expenses ................... 182
Other ................................................... 3,368 180,297
------- ----------
Less expenses absorbed or waived by Delaware
Management Company ................................... (70,928)
Less expenses paid indirectly ........................... (180)
----------
Total expenses .......................................... 109,189
----------
Net Investment Loss ..................................... (61,663)
----------
Net Realized and Unrealized Gain
on Investments and Foreign Currencies:
Net realized gain on:
Investments .......................................... 340,872
Foreign currencies ................................... 3,111
----------
Net realized gain ....................................... 343,983
Net change in unrealized appreciation/depreciation
of investments and foreign currencies ................ 2,399,897
----------
Net Realized and Unrealized
Gain on Investments
and Foreign Currencies ............................... 2,743,880
----------
Net Increase in Net Assets
Resulting From Operations ............................ $2,682,217
==========
See accompanying notes
<PAGE>
for international diversification 11
Delaware Group Adviser Funds, Inc.
New Pacific Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year
4/30/99 ended
(Unaudited) 10/31/98
---------------------------
OPERATIONS:
<S> <C> <C>
Net investment loss ................................................................................ $ (61,663) $ (3,358)
Net realized gain (loss) on investments and foreign currencies ..................................... 343,983 (6,395,951)
Net change in unrealized appreciation/depreciation of investments and foreign currencies ........... 2,399,897 2,186,476
----------- -----------
Net increase (decrease) in net assets resulting from operations .................................... 2,682,217 (4,212,833)
----------- -----------
Distributions To Shareholders From:
Net investment income:
A Class ......................................................................................... - (55,976)
B Class ......................................................................................... - (19,082)
C Class ......................................................................................... - (1,015)
Institutional Class ............................................................................. - (2,018)
----------- -----------
- (78,091)
----------- -----------
Capital Share Transactions:
Proceeds from shares sold:
A Class ......................................................................................... 2,091,761 4 ,005,717
B Class ......................................................................................... 927,306 1,715,579
C Class ......................................................................................... 258,825 107,657
Institutional Class ............................................................................. 1,513,479 738,249
Net asset value of shares issued upon reinvestment of distributions from net investment income:
A Class ......................................................................................... - 55,567
B Class ......................................................................................... - 18,639
C Class ......................................................................................... - 1,013
Institutional Class ............................................................................. - 2,018
----------- -----------
4,791,371 6,644,439
----------- -----------
Cost of shares repurchased:
A Class ......................................................................................... (828,172) (2,239,821)
B Class ......................................................................................... (276,142) (938,555)
C Class ......................................................................................... (43,328) (49,819)
Institutional Class ............................................................................. (1,250,419) (710,048)
----------- -----------
(2,398,061) (3,938,243)
----------- -----------
Increase in net assets derived from capital share transaction ...................................... 2,393,310 2,706,196
----------- -----------
Net increase (decrease) In Net Assets .............................................................. 5,075,527 (1,584,728)
Net Assets:
Beginning of period ................................................................................ 8,471,934 10,056,662
----------- -----------
End of period ...................................................................................... $13,547,461 $ 8,471,934
=========== ===========
</TABLE>
See accompanying notes
<PAGE>
12 for international diversification
Delaware Group Adviser Funds, Inc.
New Pacific Fund
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
New Pacific Fund A Class
-----------------------------------------------------------------------------
Six Months Year Year Year Year Period
Ended Ended Ended Ended Ended 12/3/93(5) to
4/30/99(3) 10/31/98(3) 10/31/97(3) 10/31/96(4) 10/31/95 10/31/94
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $4.590 $7.320 $9.420 $8.710 $10.440 $10.000
Income from investment operations:
Net investment income (loss) .............. (0.026) 0.008 (0.010) (0.050) (0.050) (0.020)
Net realized and unrealized gain (loss) on
investments and foreign currencies ...... 1.346 (2.683) (1.940) 0.769 (1.390) 0.470
Total from investment operations .......... 1.320 (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) - (0.010)
Distributions from net realized gain
on investments .......................... - - - - (0.290) -
Total dividends and distributions ......... - (0.055) (0.150) (0.009) (0.290) (0.010)
Net asset value, end of period ............ $5.910 $4.590 $7.320 $9.420 $8.710 $10.440
Total return(1) .............................. 29.04% (36.85%) (21.15%) 8.26% (13.99%) 4.53%
Ratios and supplemental data:
Net assets, end of period (000 omitted).... $8,982 $5,887 $7,144 $11,752 $10,353 $11,333
Ratio of expenses to average net assets.... 2.00%(2) 1.90% 1.80% 1.82% 1.85% 1.85%(2)
Ratio of expenses to average net assets....
prior to expense limitation ............. 3.41%(2) 3.23% 1.86% 2.77% 3.73% 3.66%(2)
Ratio of net investment income (loss) to
average net assets ...................... (1.05%)(2) 0.15% (0.08%) (0.41) (0.60%) (0.21%)(2)
Ratio of net investment loss to average
net assets prior to expense limitation .. (2.46%)(2) (1.18%) (0.14%) (1.36) (2.48%) (2.02%)(2)
Portfolio turnover rate.................... 49% 188% 178% 163% 163% 104%
</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) Annualized
(3) The average shares outstanding method has been applied for per share
information.
(4) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.
(5) Commencement of operations
See accompanying notes
<PAGE>
for international diversification 13
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
New Pacific Fund B Class
----------------------------------------------------------------------------
Six Months Year Year Year Year Period
Ended Ended Ended Ended Ended 3/29/94(5) to
4/30/99(3) 10/31/98(3) 10/31/97(3) 10/31/96(4) 10/31/95 10/31/94
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $4.660 $7.470 $9.680 $9.010 $10.860 $10.000
Income from investment operations:
Net investment loss ........................ (0.045) (0.031) (0.080) (0.050) (0.100) (0.030)
Net realized and unrealized gain (loss)
on investments and foreign currencies..... 1.365 (2.724) (1.980) 0.730 (1.460) 0.890
Total from investment operations............ 1.320 (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) - -
Distributions from net realized gain
on investments ........................... - - - - (0.290) -
Total dividends and distributions .......... - (0.055) (0.150) (0.010) (0.290) -
Net asset value, end of period ............. $5.980 $4.660 $7.470 $9.680 $9.010 $10.860
Total return(1)................................ 28.33% (37.05%) (21.72%) 7.54% (14.56%) 8.58%
Ratios and supplemental data:
Net assets, end of period (000 omitted)..... $3,599 $2,236 $2,534 $562 $573 $431
Ratio of expenses to average net assets..... 2.70%(2) 2.60% 2.50% 2.50% 2.50% 2.50%(2)
Ratio of expenses to average net assets
prior to expense limitation............... 4.11%(2) 3.93% 2.56% 3.45% 4.38% 4.32%(2)
Ratio of net investment loss to
average net assets........................ (1.75%)(2) (0.55%) (0.77%) (1.09%) (1.20%) (0.88%)(2)
Ratio of net investment loss to average
net assets prior to expense limitation.... (3.16%)(2) (1.88%) (0.83%) (2.04%) (3.08%) (2.70%)(2)
Portfolio turnover rate..................... 49% 188% 178% 163% 163% 104%
</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) Annualized
(3) The average shares outstanding method has been applied for per share
information.
(4) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.
(5) Commencement of operations
See accompanying notes
<PAGE>
14 for international diversification
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
New Pacific Fund C Class
----------------------------------------------------------------------------
Six Months Year Year Year Year Period
Ended Ended Ended Ended Ended 7/7/94(5) to
4/30/99(3) 10/31/98(3) 10/31/97(3) 10/31/96(4) 10/31/95 10/31/94
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $4.550 $7.320 $9.490 $8.830 $10.660 $10.000
Income from investment operations:
Net investment loss ........................ (0.039) (0.029) (0.080) (0.050) (0.080) (0.020)
Net realized and unrealized gain (loss) on
investments and foreign currencies ....... 1.329 (2.686) (1.940) 0.718 (1.460) 0.680
Total from investment operations ........... 1.290 (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) - -
Distributions from net realized
gain on investments ...................... - - - - (0.290) -
Total dividends and distributions .......... - (0.055) (0.150) (0.008) (0.290) -
Net asset value, end of period ............. $5.840 $4.550 $7.320 $9.490 $8.830 $10.660
Total return(1)................................ 28.35% (37.18%) (21.85%) 7.58% (14.57%) 6.55%
Ratios and supplemental data:
Net assets, end of period (000 omitted)..... $414 $130 $129 $44 $17 $12
Ratio of expenses to average net assets..... 2.70%(2) 2.60% 2.50% 2.50% 2.50% 2.50%(2)
Ratio of expenses to average net assets
prior to expense limitation .............. 4.11%(2) 3.93% 2.56% 3.45% 4.38% 4.31%(2)
Ratio of net investment loss to
average net assets........................ (1.75%)(2) (0.55%) (0.77%) (1.09%) (1.02%) (0.83%)(2)
Ratio of net investment loss to average
net assets prior to expense limitation... (3.16%)(2) (1.88%) (0.83%) (2.04%) (2.90%) (2.64%)(2)
Portfolio turnover rate .................... 49% 188% 178% 163% 163% 104%
</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) Annualized
(3) The average shares outstanding method has been applied for per share
information.
(4) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.
(5) Commencement of operations
See accompanying notes
<PAGE>
for international diversification 15
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
New Pacific Fund Institutional Class
-----------------------------------------------------------------------------
Six Months Year Year Year Year Period
Ended Ended Ended Ended Ended 2/3/94(5) to
4/30/99(3) 10/31/98(3) 10/31/97(3) 10/31/96(4) 10/31/95 10/31/94
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $4.690 $7.440 $9.530 $8.770 $10.480 $11.140
Income from investment operations:
Net investment income (loss)................ (0.018) 0.024 0.020 (0.050) (0.010) 0.010
Net realized and unrealized gain (loss)
on investments and foreign currencies..... 1.378 (2.719) (1.960) 0.820 (1.410) (0.670)
Total from investment operations ........... 1.360 (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) - -
Distributions from net realized
gain on investments....................... - - - - (0.290) -
Total dividends and distributions .......... - (0.055) (0.150) (0.010) (0.290) -
Net asset value, end of period ............. $6.050 $4.690 $7.440 $9.530 $8.770 $10.480
Total return(1) ............................... 29.00% (36.39%) (20.79%) 8.77% (13.65%) (5.98%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)..... $552 $219 $250 $119 $62 $47
Ratio of expenses to average net assets..... 1.70%(2) 1.60% 1.50% 1.50% 1.50% 1.50%(2)
Ratio of expenses to average net assets
prior to expense limitation .............. 3.11%(2) 2.93% 1.56% 2.45% 3.38% 3.31%(2)
Ratio of net investment income (loss) to
average net assets ....................... (0.75%)(2) 0.45% 0.22% (.09%) (0.16%) 0.23%(2)
Ratio of net investment income (loss) to
average net assets prior to
expense limitation ....................... (2.16%)(2) (0.88%) 0.16% (1.04%) (2.04%) (1.58%)(2)
Portfolio turnover rate .................... 49% 188% 178% 163% 163% 104%
</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) Annualized
(3) The average shares outstanding method has been applied for per share
information.
(4) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.
(5) Commencement of operations
See accompanying notes
<PAGE>
16 for international diversification
Delaware Group Adviser Funds, Inc.
New Pacific Fund
Notes to Financial Statements
April 30, 1999
(Unaudited)
Delaware Group Adviser Funds, Inc. ("The Company") is registered as a
diversified open-end investment company under the Investment Company Act of
1940, as amended. The Company is organized as a Delaware Business Trust. The
Delaware Group Adviser Funds, Inc. currently issues three separate series of
shares: the U.S. Growth Fund, the Overseas Equity Fund (formerly known as the
World Growth Fund) and the New Pacific Fund. These financial statements and
related notes pertain to the New Pacific Fund (The "Fund"). The Fund offers four
classes of shares. The New Pacific Fund A Class carries a front-end sales charge
of 5.75%. The New Pacific Fund B Class carries a back-end deferred sales charge.
The New Pacific Fund C Class carries a level load deferred sales charge. The New
Pacific Fund Institutional Class has no sales charge.
The objective of the Fund is seek long term capital appreciation by investing in
Pacific Basin countries.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund.
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of the close of the NYSE on the valuation date. Securities
not traded or securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices. Securities listed on a foreign exchange are
valued at the last quoted sales price before the Fund is valued. Long-term debt
securities are valued by an independent pricing service and such prices are
believed to reflect the fair value of such securities. Money market instruments
having less than 60 days to maturity are valued at amortized cost, which
approximates market value. Other securities and assets for which market
quotations are not readily available are valued at fair value as determined in
good faith by or under the direction of the company Board of Directors.
Federal Income Taxes - 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.
<PAGE>
Government. The respective collateral is held by the Fund's custodian bank until
the maturity of the respective repurchase agreements. Each repurchase agreement
is at least 100% collateralized. However, in the event of default or bankruptcy
by the counterparty to the agreement, realization of the collateral may be
subject to legal proceedings.
Foreign Currency Transactions - Transactions denominated in foreign currencies
are recorded at the current prevailing exchange rates. The value of all assets
and liabilities denominated in foreign currencies are translated into U.S.
dollars at the exchange rate of such currencies against the U.S. dollar as of
3:00 PM EST. Transaction gains or losses resulting from changes in exchange
rates during the reporting period or upon settlement of the foreign currency
transaction are reported in operations for the current period. It is not
practical to isolate that portion of both realized and unrealized gains and
losses on investments in equity securities in the statement of operations that
result from fluctuations in foreign currency exchange rates. The Fund reports
certain foreign currency related transactions as components of realized gains
for financial reporting purposes, whereas such components are treated as
ordinary income (loss) for federal income tax purposes.
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.
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. Foreign dividends are also recorded on the
ex-dividend date or as soon after the ex-dividend date that the Funds are aware
of such dividends, net of all non-rebatable tax withholdings. Original issue
discounts are accreted to interest income over the lives of the respective
securities. Withholding taxes on foreign dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax rules
and rates. The Fund declares and pays dividends from net investment income and
capital gains annually.
Certain 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 $115.80 for the period ended April
30, 1999. The Fund may receive earnings credit used to offset custody fees when
positive balances are maintained at the custodian. These credits were $64.43 for
the period ended April 30, 1999. The "soft dollar" reimbursement and the
earnings credit are combined as expenses paid indirectly in the Statement of
Operations.
<PAGE>
for international diversification 17
Notes to Financial Statements (Continued)
2. Investment Management and Other Transactions with Affiliates
Effective April 1, 1999, in accordance with the terms of the Investment
Management Agreement, the Fund currently pays Delaware Management Company, Inc.,
("DMC") the Investment Manager of the Fund, an annual fee at an annual rate of
0.85% of the first $500,000,000 of the average daily net assets of the Fund,
0.80% of the next $500,000,000, 0.75% of the next $1,500,000,000, and 0.70% of
the average daily net assets of the Fund in excess of $2,500,000,000, all are
less fees paid to the unaffiliated directors. Prior to April 1, DMC was paid at
an annual fee of 0.80% of the average daily net assets of the Fund, less fees
paid to the unaffiliated directors.
DMC has entered into sub-advisory agreements with John Govett & Company Limited
with respect to the management of the New Pacific Fund. The sub-advisers receive
sub-advisory fees from the Investment Manager for their services calculated at a
rate of 0.50% of the daily average net assets of the Fund. The Fund does not pay
any fees to the sub-adviser.
DMC has elected to waive that portion, if any, of the management fee and
reimburse the Fund to the extent that annual operating expenses exclusive of
taxes, interest, brokerage commissions and extraordinary expenses, exceed 1.70%
of average daily net assets of each Fund through October 31, 1999.
The Fund has engaged Delaware Service Company, Inc. ("DSC"), an affiliate of
DMC, to serve as dividend disbursing, transfer agent, accounting and
administration services.
The Fund pays DSC a monthly fee based on the number of shareholders accounts,
shareholder transactions, and average net assets, subject to certain minimums.
At April 30, 1999, the Fund had payables to affiliates of $8,730 for dividend
disbursing, transfer agent fees, accounting fees and other expenses payable to
DSC.
Pursuant to the Distribution Agreement, the Fund pays Delaware Distributors,
L.P. ("DDLP"), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.30% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Class. The Fund had a liability for
distribution fees and other expenses payable to DDLP and other affiliates of
$9,256.
For the six months ended April 30, 1999, DDLP earned $21,542 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 Funds. These officers, directors and employees are paid no compensation
by the Fund.
<PAGE>
3. Investments
During the six months ended April 30, 1999, the Fund made purchases of
$7,223,902 and sales of $4,505,982 of investment securities other than U.S.
government securities and temporary cash investments.
The cost of investments for federal income tax purposes approximates cost for
book purposes. At April 30, 1999, the aggregate cost of securities was
$11,252,304.
At April 30, 1999, net unrealized appreciation for federal income tax purposes
aggregated $2,241,954 of which $2,553,596 related to unrealized appreciation of
securities and $311,642 related to unrealized depreciation of securities.
For federal income tax purposes, the New Pacific Fund had a capital loss
carryforward at October 31, 1998 of $7,001,625 which may be carried forward and
applied against future capital gains. The capital loss carryforward expires as
follows: 2004 - $19,890; 2005 - $1,055,928; and 2006 - $5,925,807.
4. Capital Stock
Transactions in capital stock shares were as follows:
Six Months
Ended Year
4/30/99 Ended
(Unaudited) 10/31/98
----------- --------
Shares sold:
A Class ......................................... 399,020 703,209
B Class ......................................... 176,089 303,076
C Class ......................................... 51,015 19,220
Institutional Class ............................. 270,525 130,843
Shares issued upon reinvestment of distributions from
net investment income and net realized gains from
investments:
A Class ......................................... - 8,030
B Class ......................................... - 2,640
C Class ......................................... - 146
Institutional Class ............................. - 286
------- ---------
896,649 1,167,450
------- ---------
Shares repurchased:
A Class ......................................... (161,615) (403,742)
B Class ......................................... (54,013) (165,007)
C Class ......................................... (8,619) (8,431)
Institutional Class ............................. (225,959) (118,089)
------- ---------
(450,206) (695,269)
------- ---------
Net Increase ....................................... 446,443 472,181
======= =========
<PAGE>
18 for international diversification
Notes to Financial Statements (Continued)
5. Foreign Exchange Contracts
The New Pacific Fund will generally enter into forward foreign currency
contracts as a way of managing foreign exchange rate risk. The Fund may enter
into these contracts to fix the U.S. dollar value of a security that it has
agreed to buy or sell for the period between the date the trade was entered into
and the date the security is delivered and paid for. The Fund may also use these
contracts to hedge the U.S. dollar value of securities it already owns
denominated in foreign currencies.
Forward foreign currency contracts are valued at the mean between the bid and
asked prices of the contracts and are marked-to-market daily. Interpolated
values are derived when the settlement date of the contract is an interim date
for which quotations are not available. The change in market value is recorded
by the Fund as an unrealized gain or loss. When the contract is closed, the Fund
records a realized gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in
the underlying prices of the Fund's securities, but it does establish a rate of
exchange that can be achieved in the future. Although forward foreign currency
contracts limit the risk of loss due to a decline in the value of the hedged
currency, they also limit any potential gain that might result should the value
of the currency increase. In addition, the Fund could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their contracts.
The Fund had no forward foreign currency contract outstanding at April 30, 1999.
6. Credit and Market Risk
Some countries in which the New Pacific Fund may invest require governmental
approval for the repatriation of investment income, capital or the proceeds of
sales of securities by foreign investors. In addition, if there is a
deterioration in a country's balance of payments or for other reasons, a country
may impose temporary restrictions on foreign capital remittances abroad.
The securities exchanges of certain foreign markets are substantially smaller,
less liquid and more volatile than the major securities markets in the United
States. Consequently, acquisition and disposition of securities by the New
Pacific Fund may be inhibited. In addition, a significant proportion of the
aggregate market value of equity securities listed on the major securities
exchanges in emerging markets are held by a smaller number of investors. This
may limit the number of shares available for acquisition or disposition by the
Fund.
7. Lines of Credit
The committed line of credit is $800,000 for the Fund. No amounts were
outstanding at April 30, 1999, or at any time during the fiscal year.
<PAGE>
for international diversification 19
Proxy Results
(Unaudited)
For the period year ended April 30, 1999, the Delaware Group Adviser Funds, Inc.
shareholders voted on the following proposals at the annual meeting of
shareholders on December 21, 1998. The description of each proposal and number
of shares voted are as follows:
1. To elect the Fund's Board of Directors:
Shares Shares Voted
Voted Withheld
For Authority
------ ------------
Jeffrey J. Nick ................................ 5,136,543 384,167
Walter P. Babich ............................... 5,136,870 383,840
John H. Durham ................................. 5,138,701 382,009
Anthony D. Knerr ............................... 5,138,664 382,046
Ann R. Leven ................................... 5,138,744 381,966
W. Thacher Longstreth .......................... 5,138,744 381,966
Thomas F. Madison .............................. 5,138,744 381,966
Charles E. Peck ................................ 5,138,744 381,966
Wayne A. Stork ................................. 5,138,744 381,966
Jan R. Yeomans ................................. 5,138,744 381,966
2. To approve the reclassification of the Fund's investment objective from
fundamental to non-fundamental.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
966,157 20,471 143,734
3. To approve standardized fundamental investment restrictions for the Fund
(proposal involves separate votes on seven sub-proposals 3A-3G).
3A. To adopt a new fundamental investment restriction concerning concentration
of the Fund's investments in the same industry.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
958,698 20,595 151,068
3B. To adopt a new fundamental investment restriction concerning borrowing money
and issuing senior securities.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
973,222 28,659 128,481
3C. To adopt a new fundamental investment restriction concerning underwriting.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
981,964 13,045 135,352
<PAGE>
3D. To adopt a new fundamental investment restriction concerning investments in
real estate.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
969,651 14,436 146,274
3E. To adopt a new fundamental investment restriction concerning investments in
commodities.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
979,262 18,482 132,617
3F.To adopt a new fundamental investment restriction concerning lending by the
Fund.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
970,002 19,584 140,776
3G. To reclassify all current fundamental investment restrictions as
non-fundamental.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
971,758 19,719 138,885
4. To approve a new investment management agreement with Delaware Management
Company for the Fund.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
962,467 22,562 145,333
5. To approve a new sub-advisor agreement with AIB Govett, Inc. for the Fund.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
962,131 23,549 144,682
6. To ratify the selection of Ernst & Young LLP, as the independent auditors
for Delaware Group Adviser Funds, Inc.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
5,176,543 64,551 279,612
7. To approve the restructuring of the Delaware Group Adviser Funds, Inc. from
a Maryland Corporation into a Delaware Business Trust.
Shares Shares Shares
Voted Voted Voted
For Against Abstain
------ ------- -------
4,677,993 87,609 313,676
<PAGE>
This Semi-Annual Report is for the information of New Pacific Fund shareholders,
but it may be used with prospective investors when preceded or accompanied by a
current Prospectus for any of these Funds 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 each 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.
________________________________________________________________________________
Investment Manager
Delaware Management Company
Philadelphia, Pennsylvania
International Affiliate (Subadviser)
Delaware International Advisers Ltd.
London, England
National Distributor
Delaware Distributors, L.P.
Philadelphia, Pennsylvania
Subadviser
AIB Govett, Inc.
London, England
Shareholder Servicing,
Dividend Disbursing
and Transfer Agent
Delaware Service Company, Inc.
Philadelphia, Pennsylvania
1818 Market Street
Philadelphia, PA 19103-3682
photo of globes
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
International investing has special risks that include less stable economies and
governments, currency fluctuations and different accounting standards.
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Fund are
not FDIC or NCUSIF insured, are not guaranteed by any bank or any credit union,
and involve investment risk, including the possible loss of the principal amount
invested. Shares of the Fund are not bank or credit union deposits.
(C) Delaware Distributors, L.P.
Printed in the USA
on recycled paper
(J4799)
SA-113 [4/98] PP6/98
(1788)
DELAWARE
INVESTMENTS
- ---------------------
Philadelphia o London
