<PAGE>
DELAWARE(SM)
INVESTMENTS
------------
Delaware New Pacific Fund
International Diversification
2000 ANNUAL REPORT
(International Diversification Artwork)
<PAGE>
TABLE OF CONTENTS
-----------------
Letter to Shareholders 1
Portfolio Management
Review 3
Performance Summary 6
Financial Statements
Statement of Net Assets 7
Statement of Operations 10
Statements of Changes in
Net Assets 11
Financial Highlights 12
Notes to Financial
Statements 16
Report of Independent
Auditors 19
A TRADITION OF SOUND INVESTING SINCE 1929
-----------------------------------------
A Commitment To Our Investors
Experienced
[ ] Our seasoned investment professionals average 11 years' experience.
[ ] We began managing investments in 1929 and opened our first mutual fund in
1938. Over the past 70 years, we have weathered a full range of economic
and market environments.
Disciplined
[ ] We follow strict investment policies and clear buy/sell guidelines.
[ ] We strive to balance risk and reward in order to provide sound investment
alternatives within any given asset class.
Consistent
[ ] We clearly articulate our investment policies and follow them consistently.
[ ] Our commitment to consistency has earned us the confidence of discriminating
institutional and individual investors to manage more than $44 billion in
assets as of September 30, 2000.
Comprehensive
[ ] We offer more than 70 mutual funds in these asset classes.
o Large-cap equity o High-yield bonds
o Mid-cap equity o Investment grade bonds
o Small-cap equity o Municipal bonds (single-
o International equity state and national funds)
o Balanced o International fixed-income
[ ] Our funds are available through financial advisers who can offer you
individualized attention and valuable investment advice.
Funds are not FDIC insured and are not guaranteed. It is possible to lose the
principal amount invested.
(C)Delaware Distributors, L.P.
<PAGE>
"MUCH OF THE
CAUTIONARY SENTIMENT
AT HOME MAY HAVE
TRICKLED DOWN TO
MARKETS IN ASIA AND
THE PACIFIC RIM."
Dear Shareholder
December 4, 2000
Recap of Events -- The pace of global economic growth slowed this past year as
tightening financial conditions, combined with the high price of oil, generally
presented a challenge to businesses worldwide. During the year, the U.S. Federal
Reserve Board, the European Central Bank, and, for the first time since 1990,
even the Bank of Japan raised interest rates.
This tighter monetary environment has contributed to the generally weak
performance of global equity markets. In a poor environment for stocks, returns
in many overseas markets have been lackluster, while major U.S. equity indexes
such as the Dow Jones Industrial Average and the S&P 500 Index are in negative
territory year-to-date as of October 31, 2000. Much of the cautionary sentiment
at home may have trickled down to markets in Asia and the Pacific Rim. As a
result, the year was generally challenging for investors looking to those areas
of the world.
Delaware New Pacific Fund, which invests in both developed and emerging Pacific
Basin markets, returned -18.35% (Class A shares at net asset value with
distributions reinvested) for the fiscal year ended October 31, 2000. During the
same year, the MSCI Pacific Equity Index -- a stock index that is your Fund's
benchmark, and which generally tracks Pacific Basin markets -- fell by 10.34%,
while the Lipper Pacific Region Funds Average lost 11.67%.
Despite a difficult year for investors in Pacific Basin equities, there are some
clear reasons for optimism. For one, many emerging market countries in the
region continue to adopt pro-business policy changes. As a result, the
technology sector has continued to grow in parts of the region, providing
newfound diversity to a handful of emerging market economies. Developed markets,
meanwhile, are becoming more interdependent each year. China's entry into the
World Trade Organization, for example, likely bodes well for the entire region
over the long term. The increasing globalization of financial markets and
businesses is a very real trend that could be encouraging to Pacific Basin
investors who maintain a long-term perspective. We hope that investors have the
patience to weather the current downturn in Pacific Basin markets, and that they
will be rewarded by an eventual market rebound.
Total Return
For the Period Ended October 31, 2000 One Year
--------------------------------------------------------------------------------
Delaware New Pacific Fund Class A Shares -18.35%
--------------------------------------------------------------------------------
MSCI Pacific Equity Index -10.34%
Lipper Pacific Region Funds Average (27 funds) -11.67%
--------------------------------------------------------------------------------
All performance shown above is at net asset value and assumes reinvestment of
all distributions. Performance information for all Fund classes can be found on
page 6. The MSCI Pacific Equity Index is an unmanaged total return index,
reported in U.S. dollars, of approximately 500 companies from the following six
countries: Australia, Hong Kong, Japan, Malaysia, New Zealand, and Singapore.
The Lipper category represents the average return of funds with similar
investment objectives tracked by Lipper (Source: Lipper, Inc.). You cannot
invest directly in an index. Past performance does not guarantee future results.
Foreign investments are subject to risks not ordinarily associated with domestic
investments (i.e., currency, economic and political risks).
1
<PAGE>
"WE THINK THAT
INVESTORS COMMITTED
TO RIDING OUT EMERGING
MARKET VOLATILITY CAN
ACHIEVE CAPITAL
APPRECIATION OVER THE
LONG TERM."
(International Diversification Artwork)
Market Outlook
We believe that the damage done in Pacific Basin equity markets by oil prices,
rising interest rates, and a strong U.S. dollar, are excessive. We think good
values are available in both emerging and developed international markets, but
investors will need to remain focused on companies that can produce sustained
profitability.
We continue to believe that investing in overseas markets adds important
diversification to your portfolio. Investments in non-U.S. stocks can provide
opportunity for capital appreciation, but they also come with increased risks
and volatility that call for a long investment time horizon. We think that
investors committed to riding out emerging market volatility can achieve capital
appreciation over the long term. We commend you for remaining steadfast with
regard to your international investments.
Thank you for your continued confidence and commitment to Delaware Investments.
Sincerely,
/s/ Wayne A. Stork /s/ David K. Downes
Wayne A. Stork David K. Downes
Chairman, President and Chief Executive Officer,
Delaware Investments Family of Funds Delaware Investments Family of Funds
2
<PAGE>
Calum Graham
Portfolio Manager & Director
AIB Govett Asset Management Ltd.
December 4, 2000
"...MANY ASIAN MARKETS
EXPERIENCED THE SAME
INCREASED DIVERGENCE
BETWEEN OLD ECONOMY
AND NEW ECONOMY
STOCKS THAT OCCURRED IN
THE UNITED STATES."
PORTFOLIO MANAGEMENT REVIEW
---------------------------
The Fund's Results
Delaware New Pacific Fund performed well early in its fiscal year, when Pacific
Basin markets generally saw strong performance in the technology and
telecommunications sectors. Unfortunately, the extended rebound that took place
in many Asian markets during 1999 came to an end in the spring of 2000. Fears of
rising U.S. interest rates, high oil prices, and slowing in the technology
sector pulled many of these markets strongly downward.
The Fund, which had posted a positive return and was outpacing its benchmark
index at mid-fiscal-year, finished the year ended October 31, 2000 with a return
of -18.35% (Class A shares at net asset value with distributions reinvested).
For the full fiscal year, performance was worse than that of the benchmark MSCI
Pacific Equity Index, which fell by 10.34%. Our heavier weightings in technology
contributed to the Fund's returns falling harder than the benchmark as Pacific
Basin markets took a turn downward.
During the fiscal year, countries such as Japan, South Korea, Hong Kong, and
India continued to develop reputations as Internet industry hotbeds. As a
result, many Asian markets experienced the same increased divergence between Old
Economy and New Economy stocks that occurred in the United States. Sectors such
as technology and telecommunications generally outperformed other sectors across
Asian markets when those markets performed well, and then fell harder during the
downturns.
Portfolio Highlights
As of October 31, 2000, technology and financial services were your Fund's two
largest sectors. During the year we took a cautious approach to our selection of
technology holdings. While we believe in the long-term growth prospects of many
technology companies in our markets, we have selected stocks that we believe are
undervalued.
Our investment process includes both a "top-down" and a "bottom-up" approach. We
start by using a top-down view of the entire region to select our country
allocation, taking into account factors such as long-term regional growth rates,
currency values, and the ratio of market-capitalization-to-Gross Domestic
Product within a country. Once our country allocation is in place, we select
individual stocks using a bottom-up approach to fundamental analysis, always
keeping a focus on "growth at a reasonable price."
3
<PAGE>
Delaware New Pacific Fund
Country Allocation
As of October 31, 2000
Hong Kong 11.0%
Japan 50.1%
Australia 8.0%
South Korea 6.2%
Singapore 6.1%
Taiwan 3.3%
India 3.3%
Malaysia 2.2%
China 1.7%
Thailand 0.2%
(International Diversification Artwork)
During the year, a number of Southeast Asian markets fared poorly. As of fiscal
year end, we have reduced our holdings in Thailand and eliminated our exposure
to the Philippines, due to instability in those markets. In another
poor-performing market, the Fund's return was hurt during the year by the stock
of resort developer Resorts World Berhad, our single Malaysian holding as of
October 31, 2000.
Since we last reported to you, we have also made adjustments to our holdings in
South Korea, one of the hardest hit markets during the year. Our largest South
Korean holding at the start of the fiscal year was Samsung Electronics. We have
reduced our positions in Samsung due to the company's uncertain earnings
outlook. During the year, Samsung stock lost significant value, hurting the
Fund's performance.
A large percentage of the portfolio remains invested in Japan (50.1%), although
we hold a smaller percentage of Japanese stocks than our benchmark index. During
the year, we decreased our exposure to Internet-related technology stocks in
Japan and concentrated more heavily on electronics and telecommunications
companies. Some of these stocks, such Kyocera and Omron, held up fairly well
during the year, while others, such as Sony, detracted from performance. As of
October 31, 2000, the Japanese stock market had reached a 20-month low, with the
average price-to-earnings ratio at a 15-year low (Source: Barron's). Although
this would seem to indicate that there is value in the Japanese market, we
believe that the country's cloudy economic forecast should prompt investors to
remain cautious. We will continue to monitor Japan for signs of economic
recovery and look for the value that may now be represented there.
We also believe that the Taiwanese stock market sold off to extreme levels in
recent months and now generally represents value. We have been encouraged by
government policymaking in Taiwan, which seems to be promoting the development
of the equities market there.
Moving forward, we expect to continue to hold positions in China and Hong Kong,
which are currently benefiting from relatively strong economies. Both countries
have also recently been given heavier weightings in the MSCI EAFE Index. Among
the Fund's top holdings is HSBC Holdings, a U.K.-based bank that operates in
Hong Kong. We will also be looking to Australia, where the increasingly cheap
Australian dollar has been making some investors take note of possible value
there.
4
<PAGE>
Delaware New Pacific Fund
Portfolio Characteristics
October 31, 2000
-------------------------------------------------
Beta* 0.91
-------------------------------------------------
Average Price-to-
Earnings Ratio** 17.80
-------------------------------------------------
Median Market
Capitalization $39.08 billion
-------------------------------------------------
*Beta is a measure of risk relative to the
S&P 500 Index. A number less than 1.0
means less historical price volatility
than the Index. A number higher than
1.0 means more historical volatility.
**P/Es are based on analysts' forward
earnings estimates as reported by First
Call Thomson Financial.
Outlook
We believe that concerns about economic and corporate earnings growth have been
largely responsible for the downward momentum in Asian stock markets. We believe
it is possible that many markets will sell off too sharply, which could create
buying opportunities and perhaps the potential for a strong rally.
Still, it seems clear to us that there continue to be strong links between Asian
markets and the U.S. equities market. Thus, we believe that the Federal
Reserve's monetary policy and a clear outlook for the U.S. economy will be keys
to an Asian market recovery. During this period of lower prices, we will
continue to look for opportunities in countries where we perceive good values.
Top 10 Holdings
October 31, 2000
<TABLE>
<CAPTION>
Percentage of
Company Country Sector Net Assets
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Sakura Bank Japan Banking & Financial Services 5.1%
----------------------------------------------------------------------------------------------------------------
2. Mitsubishi Japan Business Services 4.7%
----------------------------------------------------------------------------------------------------------------
3. United Overseas Bank Singapore Banking & Financial Services 4.6%
----------------------------------------------------------------------------------------------------------------
4. Mitsui Fudosan Japan Other Financial Services 3.8%
----------------------------------------------------------------------------------------------------------------
5. Omron Japan Technology/Communications 3.5%
----------------------------------------------------------------------------------------------------------------
6. Orix Japan Other Financial Services 3.4%
----------------------------------------------------------------------------------------------------------------
7. Nippon Express Japan Transportation 2.6%
----------------------------------------------------------------------------------------------------------------
8. HSBC Holdings Hong Kong Banking & Financial Services 2.5%
----------------------------------------------------------------------------------------------------------------
9. Rohm Japan Technology/Communications 2.4%
----------------------------------------------------------------------------------------------------------------
10. Matsumotokiyoshi Japan Consumer/Retail 2.3%
----------------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
FUND BASICS
-----------
Fund Objectives
The Fund seeks to maximize
long-term capital appreciation. It
does so primarily by investing in
companies which are located or
have their principal business
activities in the Pacific Basin.
Total Fund Assets
As of October 31, 2000
$6.43 million
Number of Holdings
68
Fund Start Date
December 3, 1993
Your Fund Manager
Calum Graham joined AIB Govett
Asset Management Limited in 1996
as Director of Emerging Markets.
He was previously head of the Latin
America desk. Prior to joining AIB
Govett Asset Management Limited,
he worked for Cazenove & Co.
where he helped set up the firm's
equity research and sales operation
in Latin America.
Nasdaq Symbols
Class A DENPX
Class B DENBX
Class C DENCX
<PAGE>
DELAWARE NEW PACIFIC FUND PERFORMANCE
--------------------------------------
Growth of a $10,000 Investment
December 3, 1993 (Fund inception) through October 31, 2000
Delaware New
Pacific Fund MSCI Pacific
Class A Shares Equity Index
Dec. 3 '93 $9,425 $10,000
Apr. '94 $9,453 $11,288
Oct. '94 $9,849 $11,887
Apr. '95 $8,276 $11,601
Oct. '95 $8,471 $10,576
Apr. '96 $9,813 $12,495
Oct. '96 $9,170 $10,947
Apr. '97 $9,546 $ 9,810
Oct. '97 $7,231 $ 8,809
Apr. '98 $5,952 $ 8,057
Oct. '98 $4,567 $ 7,602
Apr. '99 $5,893 $ 9,705
Oct. '99 $7,239 $11,546
Apr. '00 $7,644 $11,968
Oct. '00 $6,241 $10,731
Chart assumes $10,000 invested on December 3, 1993 and includes the effect of a
5.75% maximum front-end sales charge and the reinvestment of all distributions
and capital gains. Performance of other Fund classes will vary due to differing
charges and expenses. Returns plotted on the chart were as of the last day of
each month shown. You cannot invest directly in an index.
<TABLE>
<CAPTION>
Average Annual Total Returns
Through October 31, 2000 Lifetime Five Years One Year
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A (Est. 12/3/93)
Excluding Sales Charge -6.53% -6.95% -18.35%
Including Sales Charge -7.33% -8.04% -23.02%
------------------------------------------------------------------------------------------------
Class B (Est. 3/29/94)
Excluding Sales Charge -6.85% -7.56% -18.93%
Including Sales Charge -6.85% -7.92% -22.94%
------------------------------------------------------------------------------------------------
Class C (Est. 5/10/94)
Excluding Sales Charge -7.45% -7.59% -18.82%
Including Sales Charge -7.45% -7.59% -19.62%
------------------------------------------------------------------------------------------------
</TABLE>
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Returns and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
share results, excluding sales charges, assume either that contingent deferred
sales charges did not apply or the investment was not redeemed.
Past performance does not guarantee future results.
Class A shares have a 5.75% maximum 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 contingent
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.
The average annual total returns for the lifetime, five-year and one-year
periods ended October 31, 2000 for Delaware New Pacific Fund Institutional Class
shares were -7.78%, -6.52% and -18.12%, respectively. The Institutional Class
was originally made available without sales charges or asset-based distribution
charges only to a certain eligible institutional accounts on February 3, 1994.
An expense limitation was in effect for all classes of Delaware New Pacific Fund
during the periods shown. Performance would have been lower if the expense
limitation was not in effect.
6
<PAGE>
Statement of Net Assets
DELAWARE NEW PACIFIC FUND
-------------------------
Number of Market
October 31, 2000 Shares Value (US$)
--------------------------------------------------------------------------------
Common Stock - 92.24%
Australia - 8.02%
BHP .................................................. 7,500 $ 72,685
*ERG .................................................. 8,522 41,736
*Lend Lease ........................................... 7,500 87,785
National Australia Bank .............................. 6,000 83,335
News Corporation ..................................... 6,600 69,025
Onesteel ............................................. 2,288 1,091
Telstra .............................................. 22,600 73,742
Westpac Banking ...................................... 12,600 86,026
---------
515,425
---------
China - 1.74%
Petrochina ........................................... 532,000 111,871
---------
111,871
---------
Hong Kong - 11.00%
Cheung Kong (Holdings) ............................... 12,000 132,709
China Telecom (Hong Kong) ............................ 7,000 45,102
HSBC Holdings ........................................ 11,600 161,380
New World Infrastructure ............................. 105,000 95,589
Smartone Telecommunications .......................... 26,000 38,505
Sun Hung Kai Properties .............................. 15,000 124,054
Yue Yuen Industrial (Holdings) ....................... 59,000 109,315
---------
706,654
---------
India - 3.32%
Hindalco Industries - GDR ............................ 4,540 69,008
*ICICI - ADR .......................................... 3,370 31,804
I.T.C. - GDR ......................................... 3,900 70,785
*Satyam Computer Participation Notes .................. 4,750 31,084
SSI - GDR ............................................ 2,185 10,663
---------
213,344
---------
Japan - 50.11%
DDI .................................................. 21 98,525
Fujitsu .............................................. 7,000 124,695
Funai Electric ....................................... 700 52,854
Ito-Yokado ........................................... 3,000 135,526
Kyocera .............................................. 1,000 130,120
Matsumotokiyoshi ..................................... 1,900 150,426
Mitsubishi ........................................... 37,000 305,141
Mitsui Fudosan ....................................... 20,000 242,280
Murata Mfg ........................................... 1,000 119,674
Nippon Express ....................................... 28,000 168,056
Nippon Telegraph & Telephone ......................... 16 145,588
NTT DoCoMo ........................................... 5 123,247
Omron ................................................ 9,000 221,845
Orix ................................................. 2,100 220,333
Rohm ................................................. 600 151,251
Ryohin Keikaku Limited ............................... 1,500 76,148
*Sakura Bank .......................................... 45,000 327,820
Sekisui House ........................................ 10,000 105,745
Shin-Etsu Chemical ................................... 2,000 82,104
<PAGE>
Number of Market
Shares Value (US$)
--------------------------------------------------------------------------------
Common Stock (continued)
Japan (continued)
SMC .................................................. 900 $ 127,334
*Sony ................................................. 1,400 111,867
----------
3,220,579
----------
Malaysia - 2.18%
Resorts World Berhad ................................. 80,000 140,002
----------
140,002
----------
Singapore - 6.08%
Elec and Eletek International ........................ 34,000 94,860
Sembcorp Industries .................................. 26 25
United Overseas Bank ................................. 40,000 296,077
----------
390,962
----------
South Korea - 6.21%
H&CB ................................................. 2,800 67,323
Hyundai Motor ........................................ 1,200 13,714
Kookmin Bank ......................................... 6,100 69,714
Korea Electric Power ................................. 1,700 37,960
*Korea Telecom - ADR .................................. 1,070 39,456
Korea Telecom Freetel ................................ 770 27,145
L.G. Chemical ........................................ 2,778 27,353
Pohang Iron & Steel .................................. 460 26,731
Samsung Electronics .................................. 205 25,681
SK Telecom ........................................... 300 63,956
----------
399,033
----------
Taiwan - 3.35%
Acer Communications & Multimedia ..................... 19,000 22,630
Asustek Computer ..................................... 6,307 31,415
Far Eastern Textile .................................. 51,120 42,066
Siliconware Precision Industries ..................... 37,620 28,630
Systex ............................................... 4,000 6,682
Taiwan Celluar ....................................... 7,000 14,617
*United Microelectronics .............................. 23,800 41,968
Universal Scientific Industrial ...................... 14,000 12,473
Via Technologies ..................................... 1,000 7,176
Winbond Electronics .................................. 8,000 7,746
----------
215,403
----------
Thailand - 0.23%
Advanced Information Service ......................... 1,800 14,806
----------
14,806
----------
Total Common Stock (cost $6,822,341) ................. 5,928,079
----------
7
<PAGE>
Statement of Net Assets (continued)
Principal
Amount Market
Delaware New Pacific Fund (US$) Value (US$)
--------------------------------------------------------------------------------
Repurchase Agreements - 5.01%
With Chase Manhattan 6.55% 11/1/00
(dated 10/31/00, collateralized by
$114,000 U.S. Treasury Notes 4.75%
due 2/15/04, market value $110,983) ................. $108,000 $ 108,000
With J.P. Morgan Securities 6.52% 11/1/00
(dated 10/31/00, collateralized by
$45,000 U.S. Treasury Notes 6.25%
due 2/15/03, market value $45,839 and
$31,000 U.S. Treasury Notes 5.25%
due 8/15/03, market value $31,380 and
$31,000 U.S. Treasury Notes 7.25%
due 5/15/04, market value $33,881) .................. 107,000 107,000
With PaineWebber 6.54% 11/1/00 (dated
10/31/00, collateralized by $106,000
U.S. Treasury Notes 5.875% due 11/15/05,
market value $109,196) .............................. 107,000 107,000
----------
Total Repurchase Agreements
(cost of $322,000) .................................. 322,000
----------
Total Market Value of Securities - 97.25%
(cost $7,144,341) ................................... 6,250,079
Receivables and Other Assets
Net of Liabilities - 2.75% .......................... 176,868
----------
Net Assets Applicable to 1,098,491
Shares Outstanding - 100.00% ........................ $6,426,947
----------
Net Asset Value - Delaware New Pacific
Fund A Class
($3,600,682 / 617,039 Shares) ....................... $5.84
-----
Net Asset Value - Delaware New Pacific
Fund B Class
($1,792,000 / 305,083 Shares) ....................... $5.87
-----
Net Asset Value - Delaware New Pacific
Fund C Class
($532,810 / 92,862 Shares) .......................... $5.74
-----
Net Asset Value - Delaware New Pacific
Fund Institutional Class
($501,455 / 83,507 Shares) .......................... $6.00
-----
<PAGE>
--------------------------------------------------------------------------------
Components of Net Assets At October 31, 2000:
Shares of beneficial interest
(unlimited authorization - no par) ................. $ 8,412,283
Distributions in excess of net
investment income** ................................ (21,364)
Accumulated net realized (loss)
on investments ..................................... (1,068,600)
Net unrealized depreciation of investments
and foreign currencies ............................. (895,372)
----------
Total net assets .................................... $6,426,947
==========
----------------------
*Non-Income producing security for the year ended October 31, 2000.
**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 Depositary Receipt
GDR - Global Depositary Receipt
Net Asset Value and Offering Price per
Share - Delaware New Pacific Fund
Net asset value A Class (A) ......................... $5.84
Sales charge (5.75% of offering price or 6.16%
of the amount invested per share) (B) .............. 0.36
-----
Offering price ...................................... $6.20
-----
---------------------
(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
8
<PAGE>
Statement of Assets and Liabilities
October 31, 2000 Delaware New Pacific Fund
--------------------------------------------------------------------------------
Assets:
Investments at market (cost $7,144,341) ............... $6,250,079
Foreign currency ...................................... 94,354
Dividends and interest receivable ..................... 7,921
Subscriptions receivable .............................. 229,463
Receivable for securities sold ........................ 979
----------
Total assets .......................................... 6,582,796
----------
Liabilities:
Liquidations payable .................................. 104,029
Payable for securities purchased ...................... 40,455
Other accounts payable and accrued expenses ........... 11,365
----------
Total liabilities ..................................... 155,849
----------
Total Net Assets ...................................... $6,426,947
==========
See accompanying notes
9
<PAGE>
Statement of Operations
Year Ended October 31, 2000 Delaware New Pacific Fund
--------------------------------------------------------------------------------
Investment Income:
Dividends ............................................. $120,892
Interest .............................................. 29,725
Foreign tax withheld .................................. (13,531) $ 137,086
-------- ----------
Expenses:
Management fees ....................................... 123,739
Distribution expense .................................. 78,878
Registration fees ..................................... 52,149
Dividend disbursing and transfer agent fees and
expenses ............................................ 83,661
Reports and statements to shareholders ................ 34,180
Custodian fees and expenses ........................... 18,800
Taxes (other than taxes on income) .................... 1,264
Trustees' fees ........................................ 1,500
Accounting and administration ......................... 7,200
Other ................................................. 1,894 403,265
--------
Less expenses absorbed or waived ...................... (72,475)
Less expenses paid indirectly ......................... (333)
----------
Total expenses ........................................ 330,457
----------
Net Investment Loss ................................... (193,371)
----------
Net Realized and Unrealized Gain (Loss) on Investments
and Foreign Currencies:
Net realized gain on:
Investments ......................................... 4,769,933
Foreign currencies .................................. 9,996
----------
Net realized gain ..................................... 4,779,929
Net change in unrealized appreciation/depreciation of
investments and foreign currencies .................. (5,054,521)
----------
Net Realized and Unrealized Loss on Investments and
Foreign Currencies .................................. (274,592)
----------
Net Decrease in Net Assets Resulting From Operations .. $ (467,963)
==========
See accompanying notes
10
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Delaware New Pacific Fund
--------------------------------------------------------------------------------------
Year Ended
10/31/00 10/31/99
<S> <C> <C>
Increase (Decrease) in Net Assets From Operations:
Net investment loss ....................................... $ (193,371) $ (114,759)
Net realized gain on investments and foreign currencies ... 4,779,929 1,848,536
Net change in unrealized appreciation/depreciation of
investments and foreign currencies ...................... (5,054,521) 4,330,161
--------------------------
Net increase (decrease) in net assets resulting from
operations .............................................. (467,963) 6,063,938
--------------------------
Distributions To Shareholders:
In excess of net investment income:
A Class ................................................. (218,207) --
B Class ................................................. (72,839) --
C Class ................................................. (14,136) --
Institutional Class ..................................... (23,218) --
--------------------------
(328,400) --
--------------------------
Capital Share Transactions:
Proceeds from shares sold:
A Class ................................................. 10,005,837 7,036,523
B Class ................................................. 2,257,832 2,617,747
C Class ................................................. 300,046 1,070,210
Institutional Class ..................................... 10,186,317 5,731,523
Net asset value of shares issued upon reinvestment of
distributions:
A Class ................................................. 214,161 --
B Class ................................................. 72,083 --
C Class ................................................. 12,669 --
Institutional Class ..................................... 23,218 --
--------------------------
23,072,163 16,456,003
--------------------------
Cost of shares repurchased:
A Class ................................................. (18,415,000) (4,807,802)
B Class ................................................. (5,898,080) (815,140)
C Class ................................................. (696,261) (303,950)
Institutional Class ..................................... (10,903,809) (5,000,686)
--------------------------
(35,913,150) (10,927,578)
--------------------------
Increase (decrease) in net assets derived from capital
share transactions ...................................... (12,840,987) 5,528,425
--------------------------
Net Increase (Decrease) In Net Assets ..................... (13,637,350) 11,592,363
Net Assets:
Beginning of period ....................................... 20,064,297 8,471,934
--------------------------
End of period ............................................. $ 6,426,947 $20,064,297
==========================
</TABLE>
See accompanying notes
11
<PAGE>
Financial Highlights
Selected data for each share of the Fund outstanding throughout each year were
as follows:
<TABLE>
<CAPTION>
Delaware New Pacific Fund A Class
-----------------------------------------------------------------------------------------------------------------------------
Year Ended
10/31/00(2) 10/31/99(2) 10/31/98(2) 10/31/97(2) 10/31/96(3)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................... $7.260 $4.590 $7.320 $9.420 $8.710
Income (loss) from investment operations:
Net investment income (loss) ................................. (0.084) (0.039) 0.008 (0.010) (0.050)
Net realized and unrealized gain (loss) on investments
and foreign currencies ..................................... (1.201) 2.709 (2.683) (1.940) 0.769
---------------------------------------------------------
Total from investment operations ............................. (1.285) 2.670 (2.675) (1.950) 0.719
---------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income ......................... -- -- (0.055) (0.150) (0.009)
In excess of net investment income ........................... (0.135) -- -- -- --
---------------------------------------------------------
Total dividends .............................................. (0.135) -- (0.055) (0.150) (0.009)
---------------------------------------------------------
Net asset value, end of period ................................. $5.840 $7.260 $4.590 $7.320 $9.420
=========================================================
Total return(1) ................................................ (18.35%) 58.52% (36.85%) (21.15%) 8.26%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ...................... $3,601 $12,113 $5,887 $7,144 $11,752
Ratio of expenses to average net assets ...................... 2.04% 1.96% 1.90% 1.80% 1.82%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly .................... 2.54% 2.57% 3.23% 1.86% 2.77%
Ratio of net investment income (loss) to average net assets .. (1.09%) (0.65%) 0.15% (0.08%) (0.41%)
Ratio of net investment loss to average net assets prior
to expense limitation and expenses paid indirectly ......... (1.59%) (1.26%) (1.18%) (0.14%) (1.36%)
Portfolio turnover ........................................... 125% 93% 188% 178% 163%
</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
12
<PAGE>
Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each year were
as follows:
<TABLE>
<CAPTION>
Delaware New Pacific Fund B Class
------------------------------------------------------------------------------------------------------------------------------------
Year Ended
10/31/00(2) 10/31/99(2) 10/31/98(2) 10/31/97(2) 10/31/96(3)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......................... $7.320 $4.660 $7.470 $9.680 $9.010
Income (loss) from investment operations:
Net investment loss ........................................ (0.139) (0.081) (0.031) (0.080) (0.050)
Net realized and unrealized gain (loss) on investments
and foreign currencies ................................... (1.221) 2.741 (2.724) (1.980) 0.730
-----------------------------------------------------------------
Total from investment operations ........................... (1.360) 2.660 (2.755) (2.060) 0.680
-----------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income ....................... -- -- (0.055) (0.150) (0.010)
In excess of net investment income ......................... (0.090) -- -- -- --
-----------------------------------------------------------------
Total dividends ............................................ (0.090) -- (0.055) (0.150) (0.010)
-----------------------------------------------------------------
Net asset value, end of period ............................... $5.870 $7.320 $4.660 $7.470 $9.680
=================================================================
Total return(1) .............................................. (18.93%) 57.08% (37.05%) (21.72%) 7.54%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................... $1,792 $5,654 $2,236 $2,534 $562
Ratio of expenses to average net assets .................... 2.74% 2.66% 2.60% 2.50% 2.50%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly .................. 3.24% 3.27% 3.93% 2.56% 3.45%
Ratio of net investment loss to average net assets ......... (1.79%) (1.35%) (0.55%) (0.77%) (1.09%)
Ratio of net investment loss to average net assets prior
to expense limitation and expenses paid indirectly ..... (2.29%) (1.96%) (1.88%) (0.83%) (2.04%)
Portfolio turnover ......................................... 125% 93% 188% 178% 163%
</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
13
<PAGE>
Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each year were
as follows:
<TABLE>
<CAPTION>
Delaware New Pacific Fund C Class
------------------------------------------------------------------------------------------------------------------------------------
Year Ended
10/31/00(2) 10/31/99(2) 10/31/98(2) 10/31/97(2) 10/31/96(3)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.......................... $7.150 $4.550 $7.320 $9.490 $8.830
Income (loss) from investment operations:
Net investment loss ........................................ (0.135) (0.082) (0.029) (0.080) (0.050)
Net realized and unrealized gain (loss) on investments
and foreign currencies ................................... (1.185) 2.682 (2.686) (1.940) 0.718
-----------------------------------------------------------------
Total from investment operations ........................... (1.320) 2.600 (2.715) (2.020) 0.668
-----------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income ....................... -- -- (0.055) (0.150) (0.008)
In excess of net investment income ......................... (0.090) -- -- -- --
-----------------------------------------------------------------
Total dividends ............................................ (0.090) -- (0.055) (0.150) (0.008)
-----------------------------------------------------------------
Net asset value, end of period ............................... $5.740 $7.150 $4.550 $7.320 $9.490
=================================================================
Total return(1) .............................................. (18.82%) 57.14% (37.18%) (21.85%) 7.58%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................... $533 $1,093 $130 $129 $44
Ratio of expenses to average net assets .................... 2.74% 2.66% 2.60% 2.50% 2.50%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly .................. 3.24% 3.27% 3.93% 2.56% 3.45%
Ratio of net investment loss to average net assets ......... (1.79%) (1.35%) (0.55%) (0.77%) (1.09%)
Ratio of net investment loss to average net assets prior
to expense limitation and expenses paid indirectly ....... (2.29%) (1.96%) (1.88%) (0.83%) (2.04%)
Portfolio turnover ......................................... 125% 93% 188% 178% 163%
</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
14
<PAGE>
Financial Highlights (continued)
Selected data for each share of the Fund outstanding throughout each year were
as follows:
<TABLE>
<CAPTION>
Delaware New Pacific Fund Institutional Class
------------------------------------------------------------------------------------------------------------------------------------
Year Ended
10/31/00(2) 10/31/99(2) 10/31/98(2) 10/31/97(2) 10/31/96(3)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......................... $7.460 $4.690 $7.440 $9.530 $8.770
Income (loss) from investment operations:
Net investment income (loss) ................................ (0.061) (0.020) 0.024 0.020 (0.050)
Net realized and unrealized gain (loss) on investments
and foreign currencies .................................... (1.249) 2.790 (2.719) (1.960) 0.820
-----------------------------------------------------------------
Total from investment operations ............................ (1.310) 2.770 (2.695) (1.940) 0.770
-----------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income ........................ -- -- (0.055) (0.150) (0.010)
In excess of net investment income .......................... (0.150) -- -- -- --
-----------------------------------------------------------------
Total dividends ............................................. (0.150) -- (0.055) (0.150) (0.010)
-----------------------------------------------------------------
Net asset value, end of period ................................ $6.000 $7.460 $4.690 $7.440 $9.530
=================================================================
Total return(1) ............................................... (18.12%) 59.06% (36.39%) (20.79%) 8.77%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ..................... $501 $1,204 $219 $250 $119
Ratio of expenses to average net assets ..................... 1.74% 1.66% 1.60% 1.50% 1.50%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ................... 2.24% 2.27% 2.93% 1.56% 2.45%
Ratio of net investment income (loss) to average net assets . (0.79%) (0.35%) 0.45% 0.22% (0.09%)
Ratio of net investment income (loss) to average net assets
prior to expense limitation and expenses paid indirectly .. (1.29%) (0.96%) (0.88%) 0.16% (1.04%)
Portfolio turnover .......................................... 125% 93% 188% 178% 163%
</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.
(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
15
<PAGE>
Notes to Financial Statements
October 31, 2000
--------------------------------------------------------------------------------
Delaware Group Adviser Funds (the "Trust") is organized as a Delaware business
trust and offers three series: the Delaware U.S. Growth Fund, the Delaware New
Pacific Fund and the Delaware Overseas Equity Fund. These financial statements
and related notes pertain to the Delaware New Pacific Fund (the "Fund"). The
Fund is a diversified open-end investment company under the Investment Company
Act of 1940, as amended. The Fund offers four classes of shares. The A Class
carries a maximum 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 maximize long-term capital appreciation. It does
so primarily by investing in Pacific Basin countries.
1. Significant Accounting
Policies The following accounting policies are in accordance with accounting
principles generally accepted in the United States and are consistently followed
by the Fund.
Security Valuation -- All domestic equity securities are valued at the last
quoted sales price as of the close of the New York Stock Exchange (NYSE) on the
valuation date. If on a particular day an equity security does not trade, then
the mean between the bid and asked prices will be used. Securities listed on a
foreign exchange are valued at the last quoted sales price before the Fund is
valued. 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 under the direction of the Fund's Board of Trustees.
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 accounting
principles generally accepted in the United States.
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 102% 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.
<PAGE>
Foreign Currency Transactions -- Transactions denominated in foreign currencies
are recorded at the prevailing exchange rates on the valuation date. 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 daily. 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 that result from fluctuations in
foreign currency exchange rates in the Statement of Operations. The Fund reports
certain foreign currency related transactions as components of realized gains
(losses) for financial reporting purposes, where such components are treated as
ordinary income (loss) for federal income tax purposes.
Use of Estimates -- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States 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 Fund is aware of
such dividends, net of all non-rebatable tax withholdings. 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 net capital gains, if any,
annually.
Certain expenses of the Fund are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $333 for the period ended October 31, 2000. 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
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company (DMC), a series of Delaware Management Business
Trust and the Investment Manager of the Fund, an annual fee which is calculated
daily at the rate of 0.85% on the first $500 million of net assets, 0.80% on the
next $500 million, 0.75% on the next $1.5 billion, and 0.70% on the net assets
in excess of $2.5 billion.
16
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
2. Investment Management and Other Transactions with Affiliates
(continued)
DMC has entered into a sub-advisory agreement with AIB Govett, Inc. with respect
to the management of the Fund. For the services provided to DMC, DMC pays AIB
Govett an annual fee which is calculated at a rate of 0.50% of the daily average
net assets of the Fund. The Fund does not pay any fees directly to the AIB
Govett.
DMC has elected to waive its management fee and reimburse the Fund to the extent
necessary to ensure that annual operating expenses, exclusive of taxes,
interest, brokerage commissions, distribution fees and extraordinary expenses
does not exceed 2.00% of the average daily net assets through October 31, 2001.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to provide dividend disbursing, transfer agent, accounting and administration
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, 2000, the Fund had a liability for such fees and other
expenses payable to DSC of $6,283.
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, 2000, the Fund
had a liability for such fees and other expenses payable to DDLP of $6,044.
For the period ended October 31, 2000, DDLP earned $5,728 for commissions on
sales of the Fund A Class shares.
Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.
3. Investments
For the period ended October 31, 2000, the Fund made purchases of $16,788,439
and sales of $28,488,755 of investment securities other than U.S. government
securities and temporary cash investments.
As of October 31, 2000, the net unrealized depreciation for federal income tax
purposes aggregated $955,864 of which $502,512 related to unrealized
appreciation of securities and $1,458,376 related to unrealized depreciation of
securities. At October 31, 2000, the aggregate cost of securities for federal
income tax purposes was $7,205,941.
For federal income tax purposes, the Fund had accumulated capital losses as of
October 31, 2000 of $1,007,000 which may be carried forward and applied against
future capital gains. The capital loss carryforward expires in 2006.
<PAGE>
4. Capital Shares
Transactions in capital shares were as follows:
Year Ended
10/31/00 10/31/99
Shares sold:
A Class ............................................ 1,319,166 1,124,218
B Class ............................................ 284,310 424,919
C Class ............................................ 38,591 175,563
Institutional Class ................................ 1,244,592 876,299
Shares issued upon reinvestment of distributions:
A Class ............................................ 26,538 --
B Class ............................................ 8,812 --
C Class ............................................ 1,585 --
Institutional Class ................................ 2,801 --
---------- ---------
2,926,395 2,600,999
---------- ---------
Shares repurchased:
A Class ............................................ (2,397,050) (739,315)
B Class ............................................ (760,173) (132,812)
C Class ............................................ (100,179) (51,268)
Institutional Class ................................ (1,325,265) (761,571)
---------- ---------
(4,582,667) (1,684,966)
---------- ---------
Net increase (decrease) .............................. (1,656,272) 916,033
========== =========
5. Foreign Exchange Contracts
The Fund may 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 exchange 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 as an unrealized gain or loss. When the contract is closed, a
realized gain or loss is recorded 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.
17
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
5. Foreign Exchange Contracts (continued)
The use of forward foreign currency exchange contracts does not eliminate
fluctuations in the underlying prices of the Fund's securities, but does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency exchange 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 contracts outstanding at October 31,
2000.
6. Credit and Market Risk
Some countries in which the 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 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 Fund, along with certain other funds in the Delaware Investments Family of
Funds (the "Participants"), participates in a $375,400,000 revolving line of
credit facility to be used for temporary or emergency purposes as an additional
source of liquidity to fund redemptions of investor shares. The Participants are
charged an annual commitment fee, which is allocated across the Participants on
the basis of each Fund's allocation of the entire facility. The Participants may
borrow up to a maximum of one third of their net assets under the agreement. The
Fund had no amount outstanding at October 31, 2000, or at any time during the
fiscal year.
8. Tax Information (Unaudited)
The information set forth below is for the Fund's fiscal year as required by
federal laws. Shareholders, however, must report distributions on a calendar
basis for income tax purposes, which may include distributions for portions of
two fiscal years of a fund. Accordingly, the information needed by shareholders
for income tax purposes will be sent to them in early 2001. Please consult your
tax advisor for proper treatment of this information.
For the fiscal year ended October 31, 2000, the Fund designates distributions
paid during the year as follows:
(A) (B)
Ordinary Income Total
Distribution Distributions
--------------- -------------
100% 100%
18
<PAGE>
Report of Independent Auditors
--------------------------------------------------------------------------------
To the Shareholders and Board of Trustees
Delaware Group Adviser Funds -- Delaware New Pacific Fund
We have audited the accompanying statement of net assets and the statement of
assets and liabilities of Delaware New Pacific Fund (the "Fund") as of October
31, 2000, 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 four 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 period ended October 31, 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 auditing standards generally accepted
in the United States. 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, 2000, 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 New Pacific Fund at October 31, 2000, 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 four years
in the period then ended, in conformity with accounting principles generally
accepted in the United States.
/s/ Ernst & Young LLP
---------------------------------
Philadelphia, Pennsylvania
December 19, 2000
19
<PAGE>
This page intentionally left blank.
20
<PAGE>
DELAWARE INVESTMENTS FAMILY OF FUNDS
------------------------------------
More 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.
<TABLE>
<CAPTION>
<S> <C>
BUILDING BLOCKS
OF A DIVERSIFIED PORTFOLIO
-----------------------------------------------------------------------------------
AGGRESSIVE GROWTH EQUITY FUNDS
-------------------------------
GROWTH EQUITY FUNDS
--------------------------------
MODERATE GROWTH TAXABLE TAX- INTERNATIONAL ASSET
EQUITY FUNDS BOND EXEMPT AND GLOBAL ALLOCATION
FUNDS BOND FUNDS FUNDS
FUNDS
-----------------------------------------------------------------------------------
STABILITY OF PRINCIPAL
-----------------------------------------------------------------------------------
[ ] Growth of Capital [ ] International and [ ] Tax-Exempt Income
o Technology and Innovation Fund Global o National High-Yield
o Select Growth Fund o Emerging Markets Fund Municipal Bond Fund
o Trend Fund o New Pacific Fund o Tax-Free USA Fund
o Growth Opportunities Fund* o Overseas Equity Fund o Tax-Free Insured Fund
o Small Cap Value Fund o International Equity Fund o Tax-Free USA
o U.S. Growth Fund o Global Equity Fund Intermediate Fund
o Tax-Efficient Equity Fund o Global Bond Fund o State Tax-Free Funds**
o Social Awareness Fund
[ ] Current Income [ ] Stability of Principal
[ ] Total Return o Delchester Fund o Cash Reserve
o Blue Chip Fund o High-Yield o Tax-Free Money Fund
o Devon Fund Opportunities Fund
o Growth and Income Fund o Strategic Income Fund [ ] Asset Allocation
o Decatur Equity Income Fund o Corporate Bond Fund o Foundation Funds
o REIT Fund o Extended Duration Growth Portfolio
o Balanced Fund Bond Fund Balanced Portfolio
o American Government Income Portfolio
Bond Fund
o U.S. Government
Securities Fund
o Limited-Term
Government Fund
</TABLE>
* Formerly known as DelCap Fund.
** Available for the following states: Arizona, California, Colorado, Florida,
Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, New Jersey,
New Mexico, New York, Oregon, Pennsylvania and Wisconsin. Insured and
intermediate bond funds are available in selected states.
(C)Delaware Distributors, L.P.
<PAGE>
DELAWARE(SM)
INVESTMENTS
-----------
Philadelphia o London
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
This annual report is for the information of Delaware New Pacific Fund
shareholders, but it may be used with prospective investors when preceded or
accompanied by a current prospectus for Delaware New Pacific 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. 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.
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BOARD OF TRUSTEES Charles E. Peck Investment Manager
Retired Delaware Management Company
Wayne A. Stork Fredericksburg, VA Philadelphia, PA
Chairman
Delaware Investments Family of Funds Janet L. Yeomans International Affiliate
Philadelphia, PA Vice President and Treasurer Delaware International Advisers Ltd.
3M Corporation London, England
Walter P. Babich St. Paul, MN
Board Chairman Subadviser
Citadel Constructors, Inc. AFFILIATED OFFICERS AIB Govett
King of Prussia, PA
Charles E. Haldeman, Jr. National Distributor
David K. Downes President and Chief Executive Officer Delaware Distributors, L.P.
President and Chief Executive Officer Delaware Management Holdings, Inc. Philadelphia, PA
Delaware Investments Family of Funds Philadelphia, PA
Philadelphia, PA Shareholder Servicing, Dividend
Richard J. Flannery Disbursing and Transfer Agent
John H. Durham Executive Vice President Delaware Service Company, Inc.
Private Investor and General Counsel Philadelphia, PA
Horsham, PA Delaware Investments Family of Funds
Philadelphia, PA 2005 Market Street
Anthony D. Knerr Philadelphia, PA 19103-3682
Consultant, Anthony Knerr & Associates Bruce D. Barton
New York, NY President and Chief Executive Officer
Delaware Distributors, L.P.
Ann R. Leven Philadelphia, PA
Former Treasurer, National Gallery of Art
Washington, DC
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
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(4084) Printed in the USA
AR-113 [10/00] PPL 12/00 (J6569)
