Delaware Group Adviser Funds, et al. – ‘485BPOS’ on 2/25/05

On:  Friday, 2/25/05, at 4:41pm ET   ·   Effective:  2/25/05   ·   Accession #:  950116-5-781   ·   File #s:  33-67490, 811-07972

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Post-Effective Amendment
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 485BPOS     Form 485B Pos / Adviser Funds                        256   1.13M 
 2: EX-99       Exh99-P1.Txt                                           9     30K 
 4: EX-99       Exhibit 99.J                                           1      5K 
 3: EX-99       Miscellaneous Exhibit -- ex99_p2                      10     31K 
 5: EX-99       Miscellaneous Exhibit -- ex99_q                        7     33K 

485BPOS   —   Form 485B Pos / Adviser Funds
Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 FORM N-1A

                                                               File No. 33-67490
                                                               File No. 811-7972

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933               [X]       

Pre-Effective Amendment No.____                                     [ ]     

Post-Effective Amendment No. 24                                     [X]     

 AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940       [X]       

Amendment No.  26                                                           

DELAWARE GROUP ADVISER FUNDS
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)

2005 Market Street, Philadelphia, Pennsylvania                19103-7094  
----------------------------------------------                ----------  
 (Address of Principal Executive Offices)                   (Zip Code)

Registrant's Telephone Number, including Area Code: (800) 523-1918              

Richelle S. Maestro, 2005 Market Street, Philadelphia, PA 19103-7094
--------------------------------------------------------------------
 (Name and Address of Agent for Service)

Approximate Date of Public Offering:  February 25, 2005                         

It is proposed that this filing will become effective:                          

[ ]  immediately upon filing pursuant to paragraph (b)      

[X]  on February 25, 2005 pursuant to paragraph (b)         

[ ]  60 days after filing pursuant to paragraph (a)(1)      

[ ]  on (date) pursuant to paragraph (a)(1)                 

[ ]  75 days after filing pursuant to paragraph (a)(2)      

[ ]  on (date) pursuant to paragraph (a)(2) of Rule 485     

If appropriate, check the following box:                                        
 [ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.                                      

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

This Post-Effective Amendment No. 24 to Registration File No. 33-67490 includes 
the following:                                                                  

1.   Facing Page                                            

2.   Contents Page                                          

3.   Part A - Prospectuses                                  

4.   Part B - Statement of Additional Information           

5.   Part C - Other Information                             

6.   Signatures                                             

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                                              [LOGO OF DELAWARE INVESTMENTS(SM)]

FIXED INCOME                                                                    

PROSPECTUS FEBRUARY 25, 2005                                                    

--------------------------------------------------------------------------------
DELAWARE DIVERSIFIED INCOME FUND                          
CLASS A o CLASS B o CLASS C o CLASS R                     

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

                                                                               1

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TABLE OF CONTENTS                                                               

FUND PROFILE                                                           PAGE  3  
Delaware Diversified Income Fund                                             3  

HOW WE MANAGE THE FUND                                                 PAGE  7  
Our investment strategies                                                    7  
The securities we typically invest in                                        9  
The risks of investing in the Fund                                          14  
Disclosure of portfolio holdings information                                19  

WHO MANAGES THE FUND                                                   PAGE 20  
Investment manager and sub-advisor                                          20  
Portfolio managers                                                          20  
Who's who?                                                                  21  

ABOUT YOUR ACCOUNT                                                     PAGE 23  
Investing in the Fund                                                       23  
Choosing a share class                                                    23
How to reduce your sales charge                                             27  
How to buy shares                                                           28  
Fair valuation                                                              29  
Retirement plans                                                            29  
How to redeem shares                                                        31  
Account minimums                                                            31  
Special services                                                            31  
Frequent trading of Fund shares (market timing)                             34  
Dividends, distributions and taxes                                          35  

Certain management considerations                                           36  

FINANCIAL HIGHLIGHTS                                                   PAGE 37  

GLOSSARY                                                               PAGE 42  

                                                                             2

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PROFILE: DELAWARE DIVERSIFIED INCOME FUND                                       

WHAT IS THE FUND'S GOAL?                                                        
Delaware Diversified Income Fund seeks maximum long-term total return,          
consistent with reasonable risk. Although the Fund will strive to achieve its   
goal, there is no assurance that it will.                                       

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?                                 
The Fund allocates its investments principally among the following three sectors
of the fixed-income securities markets: the U.S. Investment Grade Sector, the   
U.S. High-Yield Sector, and the International Sector. Under normal              
circumstances, the Fund will invest at least 80% of its net assets in fixed     
income securities (the "80% Policy"). We will determine how much of the Fund to 
allocate to each of the three sectors, based on our evaluation of economic and  
market conditions and our assessment of the returns and potential for           
appreciation that can be achieved from investments in each of the three sectors.
We will periodically reallocate the Fund's assets, as deemed necessary.         

In unusual market conditions, in order to meet redemption requests, for         
temporary defensive purposes, and pending investment, the Fund may hold a       
substantial portion of its assets in cash or short-term fixed-income            
obligations. The Fund may also use a wide range of hedging instruments,         
including options, futures contracts and options on futures contracts subject to
certain limitations.                                                            

The Fund's 80% Policy described above may be changed without shareholder        
approval. However, shareholders will be given notice at least 60 days prior to  
any such change.                                                                

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?                               
Investing in any mutual fund involves risk, including the risk that you may lose
part or all of the money you invest. The value of your investment in the Fund   
will increase and decrease according to changes in the value of the Fund's      
investments. The Fund will be affected primarily by changes in bond prices and  
currency exchange rates. Investments in high-yield, high risk or "junk" bonds   
entail certain risks, including the risk of loss of principal, which may be     
greater than the risks presented by investment grade bonds and which should be  
considered by investors contemplating an investment in the Fund. Among these    
risks are those that result from the absence of a liquid secondary market and   
the dominance in the market of institutional investors. The Fund will also be   
affected by prepayment risk due to its holdings of mortgage-backed securities.  
With prepayment risk, when homeowners prepay mortgages during periods of low    
interest rates, the Fund may be forced to re-deploy its assets in lower yielding
securities. Investments in securities of non-U.S. issuers are generally         
denominated in foreign currencies and involve certain risk and opportunity      
considerations not typically associated with investing in U.S. issuers, and     
investments in securities of companies in emerging markets present a greater    
degree of risk than tends to be the case for foreign investments in developed   
markets. If, and to the extent that, we invest in forward foreign currency      
contracts or use other investments to hedge against currency risks, the Fund    
will be subject to the special risks associated with those activities.          

For a more complete discussion of risk, please see "The risks of investing in   
the Fund on page [ ].                                                           

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

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

WHO SHOULD INVEST IN THE FUND                                                   
o    Investors with long-term financial goals.                                  

o    Investors looking for an investment that offers professional allocation    
among key types of fixed-income securities.                           

o    Investors looking for a fixed-income investment that offers potential for  
high current income and total return.                                 

WHO SHOULD NOT INVEST IN THE FUND                                               
o    Investors with short-term financial goals.                                 
o    Investors who are unwilling to own an investment whose value may fluctuate,
sometimes significantly, over the short term.                         

                                                                               3

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HOW HAS DELAWARE DIVERSIFIED INCOME FUND PERFORMED?                             

THIS BAR CHART AND TABLE can help you evaluate the risks of investing in        
Delaware Diversified Income Fund. We show how returns for Delaware Diversified  
Income Fund have varied over the past seven calendar years, as well as average  
annual returns for one year, five year and lifetime periods. The Fund's past    
performance does not necessarily indicate how it will perform in the future. The
Fund's returns reflect voluntary expense caps. The returns would be lower       
without the voluntary caps.                                                     

On October 28, 2002, the Fund acquired all of the assets and assumed all of the 
liabilities of the Diversified Core Fixed Income Portfolio of Delaware Pooled   
Trust (the "Predecessor Fund"), which had investment objectives and policies    
identical to those of the Fund. The Fund had no operations prior to October 28, 
2002. Shareholders of the Predecessor Fund received Class A shares of the Fund  
in connection with this transaction. As a result of this transaction, Class A   
shares of the Fund assumed the performance history of the Predecessor Fund for  
periods prior to the closing date of the transaction. In accordance with current
Securities and Exchange Commission requirements, the average annual total       
returns of the Fund for periods prior to October 28, 2002 have been restated to 
reflect the maximum sales charge applicable to Class A shares, but not to       
reflect the distribution and service (12b-1) fees and higher management and     
transfer agency fees borne by Class A shares of the Fund.                       

Class A shares of the Fund currently bear the cost of distribution and service  
fees at the annual rate of up to 0.30% of the average daily net assets of the   
Class A shares. Shares of the Predecessor Fund were not subject to distribution 
and service fees. The Fund bears the expense of management fees at the maximum  
annual rate of 0.55% of the Fund's average daily net assets. The Predecessor    
Fund had a management fee at the annual rate of 0.43% of its average daily net  
assets. For transfer agency services, the Fund currently pays an annual dollar  
charge per account ranging from $3.00 to $19.00 (depending on the type of       
account), as well as per transaction fees. By contrast, the Predecessor Fund    
paid a fee at the annual rate of 0.01% of its average daily net assets for      
transfer agency services. If the current higher expenses of the Fund had been in
effect for the Predecessor Fund, the total returns set forth in the bar chart   
and table below would have been lower for all periods.                          

[GRAPHIC OMITTED: BAR CHART SHOWING YEAR BY YEAR TOTAL RETURN (Delaware         
Diversified Income Fund)]                                                       

                                             YEAR-BY-YEAR TOTAL RETURN (Class A)

1998                       10.28%                         
1999                        1.60%                         
2000                       13.12%                         
2001                        8.33%                         
2002                       11.03%                         
2003                       13.88%                         
2004                        9.60%                         

During the periods illustrated in this bar chart, the Fund's highest quarterly  
return was 5.62% for the quarter ended June 30, 2003 and its lowest quarterly   
return was -1.82% for the quarter ended June 30, 2004.                          

The maximum Class A sales charge of 4.50%, which is normally deducted when you  
purchase shares, is not reflected in the total returns in the previous paragraph
or in the bar chart. If this fee were included, the returns would be less than  
those shown. The average annual returns in the table on page [ ] do include the 
sales charge.                                                                   

                                                                               4

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                              AVERAGE ANNUAL RETURNS FOR PERIODS ENDING 12/31/04

                                                        [Enlarge/Download Table]


                                                                       1 YEAR     5 YEARS     LIFETIME**  
--------------------------------------------------------------------  --------   ---------   ------------ 
                                                                                                          
Class A return before taxes                                                                               
 (Inception 12/29/97)                                                     4.69%      10.16%          8.88%
Class A return after taxes on distributions                                                               
 (Inception 12/29/97)                                                     2.50%       7.09%          5.66%
Class A return after taxes on distributions and sale of Fund shares                                       
 (Inception 12/29/97)                                                     3.01%       6.85%          5.59%
Class B (if redeemed) return before taxes*                                4.67%        N/A          11.41%
Class C (if redeemed) return before taxes*                                7.68%        N/A          12.28%
Class R (if redeemed) return before taxes*                                9.11%        N/A           8.54%
Lehman Brothers Aggregate Bond Index                                                                      
(reflects no deduction for fees, expenses, or taxes)                      4.34%       7.71%          6.59%

The Fund's returns are compared to the performance of the Lehman Brothers       
Aggregate Bond Index. You should remember that unlike the Fund, the index is    
unmanaged and does not reflect the costs of operating a mutual fund, such as the
costs of buying, selling and holding securities. Maximum sales charges are      
included in the Fund returns above.                                             

After-tax performance is presented only for Class A shares of the Fund. The     
after-tax returns for other Fund classes may vary. Actual after-tax returns     
depend on the investor's individual tax situation and may differ from the       
returns shown. After-tax returns are not relevant for shares held in            
tax-deferred investment vehicles such as employer-sponsored 401(k) plans and    
individual retirement accounts. The after-tax returns shown are calculated using
the highest individual federal marginal income tax rates in effect during the   
Fund's lifetime and do not reflect the impact of state and local taxes. The     
after-tax rate used is based on the current tax characterization of the elements
of the fund's returns (e.g., qualified vs. non-qualified dividends) and may be  
different than the final tax characterization of such elements. Past            
performance, both before and after taxes, is not a guarantee of future results. 

*    Total returns assume redemption of shares at the end of period. If shares  
  were not redeemed, the returns for Class B would be 8.67% and 12.32% for
    the one-year and lifetime periods, respectively. Returns for Class C would
  be 8.68% and 12.28% for the one-year and lifetime periods, respectively.

**   Lifetime returns are shown if the Fund or Class existed for less than 10   
  years. The inception date for Class B and Class C shares was October 28,
2002. The inception date for Class R shares was June 2, 2003. Lehman  
  Brothers Aggregate Bond Index lifetime return is for the period December
31, 1997 through December 31, 2004.                                   

WHAT ARE THE FUND'S FEES AND EXPENSES?                                          
SALES CHARGES are fees paid directly from your investments when you buy or sell 
shares of the Fund.                                                             

                                                        [Enlarge/Download Table]

CLASS                                                        A             B             C             R     
-------------------------------------------------------  ----------    ----------    ----------    ----------
                                                                                                             
Maximum sales charge (load) imposed on purchases as a          4.50%         none          none          none
 percentage of offering price                                                                                
Maximum contingent deferred sales charge (load) as a           none(1)       4.00%(2)      1.00%(3)      none
 percentage of original purchase price or redemption                                                         
 price, whichever is lower                                                                                   
Maximum sales charge (load) imposed on reinvested              none          none          none          none
 dividends                                                                                                   
Redemption fees                                                none          none          none          none
Exchange fees(4)                                               none          none          none          none

ANNUAL FUND OPERATING EXPENSES are deducted from the Fund's assets.             

                                                                               5

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                                                        [Enlarge/Download Table]


CLASS                                                        A              B             C             R      
-------------------------------------------------------  ----------    ----------    ----------    ----------  
                                                                                                               
Management fees                                                0.55%         0.55%         0.55%         0.55% 
Distribution and service (12b-1) fees(5)                       0.30%         1.00%         1.00%         0.60% 
Other expenses                                                 0.34%         0.34%         0.34%         0.34% 
Total operating expenses                                       1.19%         1.89%         1.89%         1.49% 
Fee waivers and payments(6)                                   (0.19)%       (0.14)%       (0.14)%       (0.14)%
Net expenses                                                   1.00%         1.75%         1.75%         1.35% 

This example is intended to help you compare the cost of investing in the Fund  
to the cost of investing in other mutual funds with similar investment          
objectives. We show the cumulative amount of Fund expenses on a hypothetical    
investment of $10,000 with an annual 5% return over the time shown.7 This is an 
example only, and does not represent future expenses, which may be greater or   
less than those shown here.                                                     

                                                        [Enlarge/Download Table]

CLASS(8)              A          B             B             C            C             R    
---------------  ----------  ----------  -------------  ----------  -------------  ----------
                                         (IF REDEEMED)              (IF REDEEMED)            
                                                                                             
1 year           $      547  $      178  $         578  $      178  $         278  $      137
3 years          $      793  $      580  $         805  $      580  $         580  $      457
5 years          $    1,057  $    1,008  $       1,158  $    1,008  $       1,008  $      800
10 years         $    1,812  $    2,018  $       2,018  $    2,200  $       2,200  $    1,768

(1)  A purchase of Class A shares of $1 million or more may be made at net asset
  value. However, if you buy the shares through a financial advisor who is
paid a commission, a contingent deferred sales charge will apply to   
    redemptions made within two years of purchase. Additional Class A purchase
  options that involve a contingent deferred sales charge may be permitted
from time to time and will be disclosed in the Prospectus if they are 
available.                                                            
(2)  If you redeem Class B shares during the first year after you buy them, you 
 will pay a contingent deferred sales charge of 4.00%, which declines to
     3.00% during the second year, 2.25% during the third year, 1.50% during the
    fourth and fifth years, 1.00% during the sixth year, and 0.00% thereafter.
(3)  Class C shares redeemed within one year of purchase are subject to a 1.00% 
contingent deferred sales charge.                                     
(4)  Exchanges are subject to the requirements of each fund in the Delaware     
     Investments family. A front-end sales charge may apply if you exchange your
shares into a fund that has a front-end sales charge.                 
(5)  Class A shares are subject to a maximum 12b-1 fee of 0.30% of average daily
   net assets. However, the distributor has contracted to waive a portion of
  that 12b-1 fee through February 28, 2006 in order to prevent total 12b-1
plan expenses from exceeding 0.25% of average daily net assets.       
(6)  The investment manager has contracted to waive fees and pay expenses       
through February 28, 2006 in order to prevent total operating expenses
 (excluding any taxes, interest, brokerage fees, extraordinary expenses,
 12b-1 fees and certain insurance costs) from exceeding 0.75% of average
daily net assets.                                                     
(7)  The Fund's actual rate of return may be greater or less than the           
 hypothetical 5% return we use here. Also, this example reflects the net
     operating expenses with expense waivers for the one year contractual period
    and total operating expenses without expense waivers for years two through
ten.                                                                  
(8)  The Class B example reflects the conversion of Class B shares to Class A   
     shares after approximately eight years. Information for the ninth and tenth
years reflects expenses of the Class A shares.                        

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HOW WE MANAGE THE FUND                                                          

OUR INVESTMENT STRATEGIES                                                       
We analyze economic and market conditions, seeking to identify the securities or
market sectors that we think are the best investments for the Fund. Following   
are descriptions of how the portfolio managers pursue the Fund's investment     
goals.                                                                          

The Fund allocates its investment principally among the U.S. Investment Grade,  
U.S. High-Yield and International sectors. The relative proportion of the Fund's
assets to be allocated among these sectors is described below.                  

   o    U.S. INVESTMENT GRADE SECTOR Under normal circumstances, there is no
        limit to the amount of the Fund's total assets that will be invested
      in the U.S. investment grade sector. In managing the Fund's assets
        allocated to the investment grade sector, we will invest principally
        in debt obligations issued or guaranteed by the U.S. Government, its
         agencies or instrumentalities and by U.S. corporations. The corporate
       debt obligations in which the Fund may invest include bonds, notes,
          debentures and commercial paper of U.S. companies. The U.S. Government
securities in which the Fund may invest include a variety of
  securities which are issued or guaranteed as to the payment of
          principal and interest by the U.S. Government, and by various agencies
        or instrumentalities which have been established or sponsored by the
U.S. Government.                                            

  The investment grade sector of the Fund's assets may also be invested in
     mortgage-backed securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or by government sponsored corporations.
     Other mortgage-backed securities in which the Fund may invest are issued by
certain private, non-government entities. Subject to the quality      
 limitations, the Fund may also invest in securities which are backed by
assets such as receivables on home equity and credit card loans,      
  automobile, mobile home, recreational vehicle and other loans, wholesale
dealer floor plans and leases.                                        

     Securities purchased by the Fund within this sector will be rated in one of
  the four highest rating categories or will be unrated securities that we
determine are of comparable quality.                                  

    o    U.S. HIGH-YIELD SECTOR Under normal circumstances, between 5% and 50%
       of the Fund's total assets will be allocated to the U.S. High-Yield
      Sector. We will invest the Fund's assets that are allocated to the
     domestic high-yield sector primarily in those securities having a
        liberal and consistent yield and those tending to reduce the risk of
       market fluctuations. The Fund may invest in domestic corporate debt
obligations, including, notes, which may be convertible or  
     non-convertible, commercial paper, units consisting of bonds with
    stock or warrants to buy stock attached, debentures, convertible
      debentures, zero coupon bonds and pay-in-kind securities ("PIKs").

    The Fund will invest in both rated and unrated bonds. The rated bonds that
     the Fund may purchase in this sector will generally be rated BB or lower by
S&P or Fitch, Ba or lower by Moody's, or similarly rated by another   
     nationally recognized statistical rating organization. Unrated bonds may be
more speculative in nature than rated bonds.                          

     o    INTERNATIONAL SECTOR Under normal circumstances, between 5% and 50% of
         the Fund's total assets will be invested in the International Sector.
         The International Sector invests primarily in fixed-income securities
         of issuers organized or having a majority of their assets or deriving
    a majority of their operating income in foreign countries. These
       fixed-income securities include foreign government securities, debt
obligations of foreign companies, and securities issued by  
supranational entities. A supranational entity is an entity 
       established or financially supported by the national governments of
   one or more countries to promote reconstruction or development.
 Examples of supranational entities include, among others, the
        International Bank for Reconstruction and Development (more commonly
  known as the World Bank), the European Economic Community, the
      European Investment Bank, the Inter-Development Bank and the Asian
Development Bank.                                           

The Fund may invest in securities issued in any currency and may hold foreign   
currencies. Securities of issuers within a given country may be denominated in  
the currency of another country or in multinational currency units, such as the 
Euro. The Fund may, from time to time, purchase or sell foreign currencies      
and/or engage in forward foreign currency transactions in order to expedite     
settlement of Fund transactions and to minimize currency value                  

                                                                               7

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fluctuations. Currency considerations carry a special risk for a portfolio that 
allocates a significant portion of its assets to foreign securities.            

The Fund will invest in both rated and unrated foreign securities. It may       
purchase securities of issuers in any foreign country, developed and            
underdeveloped. These investments may include direct obligations of issuers     
located in emerging markets countries and so-called Brady Bonds. However,       
investments in emerging markets, Brady Bonds and in foreign securities that are 
rated below investment grade (e.g. lower than BBB by S&P), or if unrated, judged
to be of comparable quality, will, in the aggregate, be limited to no more than 
5% of the Fund's total assets. In addition, the Fund may invest in sponsored and
unsponsored American Depositary Receipts, European Depositary Receipts, or      
Global Depositary Receipts. The Fund may also invest in zero coupon bonds and   
may purchase shares of other investment companies.                              

Additionally, the Manager will limit non-U.S. dollar denominated securities to  
no more than 25% of net assets.                                                 

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THE SECURITIES WE TYPICALLY INVEST IN                                           
Fixed-income securities offer the potential for greater income payments than    
stocks, and also may provide capital appreciation.                              

                                                        [Enlarge/Download Table]

                    SECURITIES                                                    HOW WE USE THEM                               
------------------------------------------------------  ------------------------------------------------------------------------
                                                                                                                                
CORPORATE BONDS: Debt obligations issued by a           The Fund may invest in bonds rated in one of the four highest rating    
corporation.                                            categories for its U.S. Investment Grade Sector, and it may invest in   
                                                        bonds rated BB or lower by S&P or Fitch and Ba or lower by Moody's for  
                                                        its U.S. High-Yield Sector and International Sector.                    

HIGH-YIELD CORPORATE BONDS: Debt obligations issued     Emphasis is typically on those rated BB or Ba by an NRSRO.              
by a corporation and rated lower than investment                                                                                
grade by a nationally recognized statistical            We carefully evaluate an individual company's financial situation, its  
ratings organization (NRSRO) such as S&P or             management, the prospects for its industry and the technical factors    
Moody's. High-yield bonds are issued by                 related to its bond offering. Our goal is to identify those companies   
corporations that have lower credit quality and may     that we believe will be able to repay their debt obligations in spite of
have difficulty repaying principal and interest.        poor ratings. The Fund may invest in unrated bonds if we believe their  
                                                        credit quality is comparable to the rated bonds we are permitted to     
                                                        invest in. Unrated bonds may be more speculative in nature than rated   
                                                        bonds.                                                                  

MORTGAGE-BACKED SECURITIES: Fixed-income securities     The Fund may invest in mortgage-backed securities issued or guaranteed  
that represent pools of mortgages, with investors       by the U.S. government, its agencies or instrumentalities or by         
receiving principal and interest payments as the        government sponsored corporations.                                      
underlying mortgage loans are paid back. Many are                                                                               
issued and guaranteed against default by the U.S.                                                                               
government or its agencies or instrumentalities, such                                                                           
as the Federal Home Loan Mortgage Corporation, the                                                                              
Fannie Mae and the Government National Mortgage                                                                                 
Association. Others are issued by private financial                                                                             
institutions, with some fully collateralized by                                                                                 
certificates issued or guaranteed by the government or                                                                          
its agencies or instrumentalities.                                                                                              

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS) AND REAL     The Fund may invest in CMOs and REMICs. Certain CMOs and REMICs may have
ESTATE MORTGAGE INVESTMENT CONDUITS (REMICS): CMOs      variable or floating interest rates and others may be stripped. Stripped
are privately issued mortgage-backed bonds whose        mortgage securities are generally considered illiquid and to such       
underlying value is the mortgages that are              extent, together with any other illiquid investments, will not exceed   
collected into different pools according to their       the Fund's limit on illiquid securities. In addition, subject to certain
maturity. They are issued by U.S. government            quality and collateral limitations, the Fund may invest up to 20% of its
agencies and private issuers. REMICs are privately      total assets in CMOs and REMICs issued by private entities which are not
issued mortgage-backed bonds whose underlying value     collateralized by securities issued or guaranteed by the U.S.           
is a fixed pool of mortgages secured by an interest     government, its agencies or instrumentalities, so called non-agency     
in real property. Like CMOs, REMICs offer different     mortgage backed securities.                                             
pools.                                                                                                                          

ASSET-BACKED SECURITIES: Bonds or notes backed by       The Fund may invest in asset-backed securities rated in one of the four 
accounts receivables, including home equity,            highest rating categories by an NRSRO.                                  
automobile or credit loans.                                                                                                     

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                    SECURITIES                                                    HOW WE USE THEM                               
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U.S. GOVERNMENT SECURITIES: U.S. Treasury securities    The Fund may invest in U.S. government securities for temporary purposes
are backed by the "full faith and credit" of the        or otherwise, as is consistent with its investment objective and        
United States. Securities issued or guaranteed by       policies. These securities are issued or guaranteed as to the payment of
federal agencies and U.S. government sponsored          principal and interest by the U.S. government, or by various agencies or
instrumentalities may or may not be backed by the       instrumentalities which have been established or sponsored by the U.S.  
"full faith and credit" of the United States. In the    government.                                                             
case of securities not backed by the "full faith and                                                                            
credit" of the United States, investors in such                                                                                 
securities look principally to the agency or                                                                                    
instrumentality issuing or guaranteeing the obligation                                                                          
for ultimate repayment.                                                                                                         

FOREIGN GOVERNMENT SECURITIES: Debt issued by a         The fixed-income securities in which the Fund may invest include those  
government other than the United States or by an        issued by foreign governments.                                          
agency, instrumentality or political subdivision of                                                                             
such governments.                                                                                                               

REPURCHASE AGREEMENTS: An agreement between a buyer,    While the Fund is permitted to do so, it normally does not invest in    
such as a fund, and a seller of securities in which     repurchase agreements except to invest cash balances or for temporary   
the seller agrees to buy the securities back within a   defensive purposes. In order to enter into these repurchase agreements, 
specified time at the same price the buyer paid for     the Fund must have collateral of at least 102% of the repurchase price. 
them, plus an amount equal to an agreed upon interest   The Fund will only enter into repurchase agreements in which the        
rate. Repurchase agreements are often viewed as         collateral is comprised of U.S. government securities.                  
equivalent to cash.                                                                                                             

RESTRICTED SECURITIES: Privately placed securities      The Fund may invest in restricted securities, including securities      
whose resale is restricted under securities law.        eligible for resale without registration pursuant to Rule 144A under the
                                                        Securities Act of 1933. To the extent restricted securities are         
                                                        illiquid, the Fund will limit its investments in them in accordance with
                                                        its policy concerning illiquid securities. See "Illiquid Securities"    
                                                        below.                                                                  

ILLIQUID SECURITIES: Securities that do not have a      The Fund may invest no more than 15% of net assets in illiquid          
ready market, and cannot be easily sold within seven    securities.                                                             
days at approximately the price that a fund has valued                                                                          
them. Illiquid securities include repurchase                                                                                    
agreements maturing in more than seven days.                                                                                    

SHORT-TERM DEBT INVESTMENTS: These instruments include  The Fund may invest in these instruments either as a means to achieve   
(1) time deposits, certificates of deposit and bankers  its investment objective or, more commonly, as temporary defensive      
acceptances issued by a U.S. commercial bank; (2)       investments or pending investment in the Fund's principal investment    
commercial paper of the highest quality rating; (3)     securities. When investing all or a significant portion of its assets in
short-term debt obligations with the highest quality    these instruments, the Fund may not be able to achieve its investment   
rating; (4) U.S. government securities; and (5)         objective.                                                              
repurchase agreements collateralized by those                                                                                   
instruments.                                                                                                                    

TIME DEPOSITS: Time deposits are non-negotiable         Time deposits maturing in more than seven days will not be purchased by 
deposits maintained in a banking institution for a      the Fund, and time deposits maturing from two business days through     
specified period of time at a stated interest rate.     seven calendar days will not exceed 15% of the total assets of the Fund.

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                    SECURITIES                                                    HOW WE USE THEM                               
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ZERO COUPON AND PAY-IN-KIND BONDS: Zero coupon bonds    The Fund may purchase fixed-income securities, including zero coupon    
are debt obligations which do not entitle the holder    bonds and PIK bonds, consistent with its investment objective.          
to any periodic payments of interest prior to maturity                                                                          
or a specified date when the securities begin paying                                                                            
current interest, and therefore are issued and traded                                                                           
at a discount from their face amounts or par value.                                                                             
Pay-in-kind ("PIK") bonds pay interest through the                                                                              
issuance to holders of additional securities.                                                                                   

AMERICAN DEPOSITARY RECEIPTS (ADRS), EUROPEAN           The Fund may invest in sponsored and unsponsored ADRs. Such ADRs that   
DEPOSITARY RECEIPTS (EDRS), AND GLOBAL DEPOSITARY       the Fund may invest in will be those that are actively traded in the    
RECEIPTS (GDRS): ADRs are receipts issued by a U.S.     United States.                                                          
depositary (usually a U.S. bank) and EDRs and GDRs are                                                                          
receipts issued by a depositary outside of the U.S.     In conjunction with its investments in foreign securities, the Fund may 
(usually a non-U.S. bank or trust company or a foreign  also invest in sponsored and unsponsored EDRs and GDRs.                 
branch of a U.S. bank). Depositary receipts represent                                                                           
an ownership interest in an underlying security that                                                                            
is held by the depositary. Generally, the underlying                                                                            
security represented by an ADR is issued by a foreign                                                                           
issuer and the underlying security represented by an                                                                            
EDR or GDR may be issued by a foreign or U.S. issuer.                                                                           
Sponsored depositary receipts are issued jointly by                                                                             
the issuer of the underlying security and the                                                                                   
depositary, and unsponsored depositary receipts are                                                                             
issued by the depositary without the participation of                                                                           
the issuer of the underlying security. Generally, the                                                                           
holder of the depositary receipt is entitled to all                                                                             
payments of interest, dividends or capital gains that                                                                           
are made on the underlying security.                                                                                            

BRADY BONDS: These are debt securities issued under     The Fund may invest in Brady Bonds consistent with its respective       
the framework of the Brady Plan, an initiative          investment objective. We believe that economic reforms undertaken by    
announced by the U.S. Treasury Secretary Nicholas F.    countries in connection with the issuance of Brady Bonds may make the   
Brady in 1989, as a mechanism for debtor nations to     debt of countries which have issued or have announced plans to issue    
restructure their outstanding external indebtedness     Brady Bonds a viable opportunity for investment.                        
(generally, commercial bank debt).                                                                                              

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                    SECURITIES                                                    HOW WE USE THEM                               
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FUTURES AND OPTIONS: A futures contract is a bilateral  The Fund may invest in futures, options and closing transactions related
agreement providing for the purchase and sale of a      thereto. These activities will not be entered into for speculative      
specified type and amount of a financial instrument,    purposes, but rather for hedging purposes and to facilitate the ability 
or for the making and acceptance of a cash settlement,  to quickly deploy into the market the Fund's cash, short-term debt      
at a stated time in the future for a fixed price. A     securities and other money market instruments at times when the Fund's  
call option is a short-term contract pursuant to which  assets are not fully invested. The Fund may only enter into these       
the purchaser of the call option, in return for the     transactions for hedging purposes if it is consistent with its          
premium paid, has the right to buy the security or      respective investment objective and policies. The Fund may not engage in
other financial instrument underlying the option at a   such transactions to the extent that obligations resulting from these   
specified exercise price at any time during the term    activities, in the aggregate, exceed 25% of the Fund's assets. In       
of the option. A put option is a similar contract       addition, the Fund may enter into futures contracts, purchase or sell   
which gives the purchaser of the put option, in return  options on futures contracts, and trade in options on foreign           
for a premium, the right to sell the underlying         currencies, and may enter into closing transactions with respect to such
security or other financial instrument at a specified   activities to hedge or "cross hedge" the currency risks associated with 
price during the term of the option.                    its investments. Generally, futures contracts on foreign currencies     
                                                        operate similarly to futures contracts concerning securities, and       
                                                        options on foreign currencies operate similarly to options on           
                                                        securities. See also "Foreign Currency Transactions" below.             

FOREIGN CURRENCY TRANSACTIONS: A forward foreign        Although the Fund values its assets daily in terms of U.S. dollars, it  
currency exchange contract involves an obligation to    does not intend to convert its holdings of foreign currencies into U.S. 
purchase or sell a specific currency on a fixed future  dollars on a daily basis. The Fund may, however, from time to time,     
date at a price that is set at the time of the          purchase or sell foreign currencies and/or engage in forward foreign    
contract. The future date may be any number of days     currency transactions in order to expedite settlement of Fund           
from the date of the contract as agreed by the parties  transactions and to minimize currency value fluctuations.               
involved.                                                                                                                       

INTEREST RATE SWAP AND INDEX SWAP AGREEMENTS: In an     The Fund may use interest rate swaps to adjust its sensitivity to       
interest rate swap, a fund receives payment from        interest rates by changing its duration. We may also use interest rate  
another party based on a floating interest rate in      swaps to hedge against changes in interest rates. We use index swaps to 
return for making payments based on a fixed interest    gain exposure to markets that the Fund invests in, such as the corporate
rate. An interest rate swap can also work in reverse,   bond market. We may also use index swaps as a substitute for futures,   
with a fund receiving payments based on a fixed         options or forward contracts if such contracts are not directly         
interest rate and making payments based on a floating   available to the Fund on favorable terms.                               
interest rate. In an index swap, a fund receives gains                                                                          
or incurs losses based on the total return of an        Interest rate swaps and index swaps will be considered illiquid         
index, in exchange for making fixed or floating         securities.                                                             
interest rate payments to another party.                                                                                        

The Fund may also invest in other securities. Please see the Statement of       
Additional Information for additional descriptions on these securities as well  
as those listed in the table above.                                             

LENDING SECURITIES The Fund may lend up to 25% of its assets to qualified       
brokers, dealers and institutional investors for their use in securities        
transactions. These transactions, if any, may generate additional income for the
Fund.                                                                           

BORROWING FROM BANKS The Fund may borrow money as a temporary measure for       
extraordinary purposes or to facilitate redemptions. To the extent that it does 
so, the Fund may be unable to meet its investment objective.                    

PURCHASING SECURITIES ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS The Fund may   
buy or sell securities on a when-issued or delayed delivery basis; that is,     
paying for securities before delivery or taking delivery at a later date. The   
Fund will designate cash or securities in amounts sufficient to cover its       
obligations, and will value the designated assets daily.                        

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PORTFOLIO TURNOVER We anticipate that the Fund's annual portfolio turnover will 
exceed 100%, and may be considerably in excess of 200%. A portfolio turnover    
rate of 100% would occur, for example, if all the securities in the fund's      
portfolio were replaced once during a period of one year. A high rate of        
portfolio turnover in any year may increase brokerage commissions paid and could
result in high amounts of realized investment gain subject to the payment of    
taxes by shareholders. The turnover rate may also be affected by cash           
requirements from redemptions and repurchases of fund shares.                   

TEMPORARY DEFENSIVE POSITIONS For temporary defensive purposes, we may invest up
to 100% of the Fund's assets in money market instruments when the manager       
determines that market conditions warrant. We may also hold a portion of the    
Fund's assets in cash for liquidity purposes. To the extent that we do so, the  
Fund may be unable to achieve its investment objective.                         

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THE RISKS OF INVESTING IN THE FUND                                              

Investing in any mutual fund involves risk, including the risk that you may     
receive little or no return on your investment, and the risk that you may lose  
part or all of the money you invest. Before you invest in the Fund you should   
carefully evaluate the risks. Because of the nature of the Fund, you should     
consider your investment to be a long-term investment that typically provides   
the best results when held for a number of years. Following are the chief risks 
you assume when investing in the Fund. Please see the Statement of Additional   
Information for further discussion of these risks and other risks not discussed 
here.                                                                           

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                      RISKS                                                  HOW WE STRIVE TO MANAGE THEM                       
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MARKET RISK is the risk that all or a majority of the   We maintain a long-term approach and focus on securities that we believe
securities in a certain market-like the stock or bond   can continue to provide returns over an extended period of time         
market-will decline in value because of factors such    regardless of these interim market fluctuations. Generally, we do not   
as economic conditions, future expectations or          try to predict overall market movements or trade for short-term         
investor confidence.                                    purposes.                                                               

Index swaps are subject to the same market risks as     In evaluating the use of an index swap for the Fund, we carefully       
the investment market or sector that the index          consider how market changes could affect the swap and how that compares 
represents. Depending on the actual movements of the    to our investing directly in the market the swap is intended to         
index and how well the portfolio manager forecasts      represent. When selecting dealers with whom we would make interest rate 
those movements, a fund could experience a higher or    or index swap agreements for the Fund, we focus on those dealers with   
lower return than anticipated.                          high quality ratings and do careful credit analysis before engaging in  
                                                        the transaction.                                                        

INTEREST RATE RISK is the risk that securities,         We limit the amount of the Fund's assets invested in any one industry   
particularly bonds with longer maturities, will         and in any individual security.                                         
decrease in value if interest rates rise and increase                                                                           
in value if interest rates fall. Investments in equity  The Fund is subject to various interest rate risks depending upon its   
securities issued by small and medium sized companies,  investment objectives and policies. We cannot eliminate this risk, but  
which often borrow money to finance operations, may     we do try to address it by monitoring economic conditions, especially   
also be adversely affected by rising interest rates.    interest rate trends and their potential impact on the Fund. The Fund   
                                                        does not try to increase returns on its investments in debt securities  
Swaps may be particularly sensitive to interest rate    by predicting and aggressively capitalizing on interest rate movements. 
changes. Depending on the actual movements of interest                                                                          
rates and how well the portfolio manager anticipates    The Fund, by investing in swaps, is subject to additional interest rate 
them, a portfolio could experience a higher or lower    risk. The Fund will not invest in interest rate or index swaps with     
return than anticipated. For example, if a portfolio    maturities of more than two years. Each business day we will calculate  
holds interest rate swaps and is required to make       the amount the Fund must pay for any swaps it holds and will segregate  
payments based on variable interest rates, it will      enough cash or other liquid securities to cover that amount.            
have to make increased payments if interest rates                                                                               
rise, which will not necessarily be offset by the                                                                               
fixed-rate payments it is entitled to receive under                                                                             
the swap agreement.                                                                                                             

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                      RISKS                                                  HOW WE STRIVE TO MANAGE THEM                       
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CREDIT RISK is the possibility that a bond's issuer     Our careful, credit-oriented bond selection and our commitment to hold a
(or an entity that insures the bond) will not be able   diversified selection of high-yield bonds are designed to manage this   
to make timely payments of interest and principal.      risk.                                                                   

Investing in so-called "junk" or "high-yield" bonds     It is likely that protracted periods of economic uncertainty would cause
entails the risk of principal loss, which may be        increased volatility in the market prices of high-yield bonds, an       
greater than the risk involved in investment grade      increase in the number of high-yield bond defaults and corresponding    
bonds. High-yield bonds are sometimes issued by         volatility in the Fund's net asset value.                               
companies whose earnings at the time the bond is                                                                                
issued are less than the projected debt payments on     Our holdings of high quality investment grade bonds are less subject to 
the bonds.                                              credit risk and may help to balance any credit problems experienced by  
                                                        individual high-yield bond issuers or foreign issuers.                  
Some analysts believe a protracted economic downturn                                                                            
would severely disrupt the market for high-yield        When selecting dealers with whom we would make interest rate or index   
bonds, adversely affect the value of outstanding bonds  swap agreements, we focus on those with high quality ratings and do     
and adversely affect the ability of high-yield issuers  careful credit analysis before investing.                               
to repay principal and interest.                                                                                                

FOREIGN RISK is the risk that foreign securities may    We attempt to reduce the risks presented by such investments by         
be adversely affected by political instability,         conducting world-wide fundamental research with an emphasis on company  
changes in currency exchange rates, foreign economic    visits. In addition, we monitor current economic and market conditions  
conditions or inadequate regulatory and accounting      and trends, the political and regulatory environment and the value of   
standards. In addition, there is the possibility of     currencies in different countries in an effort to identify the most     
expropriation, nationalization or confiscatory          attractive countries and securities. Additionally, when currencies      
taxation, taxation of income earned in foreign nations  appear significantly overvalued compared to average real exchange rates,
or other taxes imposed with respect to investments in   the Fund may hedge exposure to those currencies for defensive purposes. 
foreign nations, foreign exchange controls, which may                                                                           
include suspension of the ability to transfer currency                                                                          
from a given country, and default in foreign                                                                                    
government securities. As a result of these factors,                                                                            
foreign securities markets may be less liquid and more                                                                          
volatile than U.S. markets and the Funds may                                                                                    
experience difficulties and delays in converting                                                                                
foreign currencies back into U.S. dollars. Such events                                                                          
may cause the value of certain foreign securities to                                                                            
fluctuate widely and may make it difficult to                                                                                   
accurately value foreign securities.                                                                                            

Several European countries began participating in the                                                                           
European Economic and Monetary Union, which has                                                                                 
established a common currency for participating                                                                                 
countries. This currency is commonly known as the                                                                               
"Euro." The long-term consequences of the Euro                                                                                  
conversion for foreign exchange rates, interest rates                                                                           
and the value of European securities in which the Fund                                                                          
may invest are unclear. The consequences may adversely                                                                          
affect the value and/or increase the volatility of                                                                              
securities held by the Fund.                                                                                                    

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                      RISKS                                                  HOW WE STRIVE TO MANAGE THEM                       
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CURRENCY RISK is the risk that the value of an          The Fund may be affected by changes in currency rates and exchange      
investment may be negatively affected by changes in     control regulations and may incur costs in connection with conversions  
foreign currency exchange rates. Adverse changes in     between currencies. To hedge this currency risk associated with         
exchange rates may reduce or eliminate any gains        investments in non-U.S. dollar denominated securities, the Fund may     
produced by investments that are denominated in         invest in forward foreign currency contracts. These activities pose     
foreign currencies and may increase losses.             special risks which do not typically arise in connection with           
                                                        investments in U.S. securities. In addition, the Fund may engage in     
                                                        foreign currency options and futures transactions.                      

EMERGING MARKETS RISK is the possibility that the       The Fund may invest a portion of its assets in securities of issuers    
risks associated with international investing will be   located in emerging markets. The Fund cannot eliminate these risks but  
greater in emerging markets than in more developed      will attempt to reduce these risks through portfolio diversification,   
foreign markets because, among other things, emerging   credit analysis, and attention to trends in the economy, industries and 
markets may have less stable political and economic     financial markets and other relevant factors.                           
environments. In addition, in many emerging markets,                                                                            
there is substantially less publicly available                                                                                  
information about issuers and the information that is                                                                           
available tends to be of a lesser quality. Economic                                                                             
markets and structures tend to be less mature and                                                                               
diverse and the securities markets which are subject                                                                            
to less government regulation or supervision may also                                                                           
be smaller, less liquid and subject to greater price                                                                            
volatility.                                                                                                                     

LOWER RATED FIXED-INCOME SECURITIES (high-yield,        The Fund will limit its investments in high-risk, high-yield            
high-risk securities), while generally having higher    fixed-income securities of foreign governments including, with specified
yields, are subject to reduced creditworthiness of      limitations, Brady Bonds to 30% of its assets. The Fund will also       
issuers, increased risks of default and a more limited  attempt to reduce the risk associated with its investment in high-yield 
and less liquid secondary market than higher rated      debt securities through portfolio diversification, credit analysis,     
securities. These securities are subject to greater     attention to trends in the economy, industries and financial markets,   
price volatility and risk of loss of income and         and complying with the limits on the exposure to this asset class       
principal than are higher rated securities. Lower       described in this Prospectus.                                           
rated and unrated fixed-income securities tend to                                                                               
reflect short-term corporate and market developments                                                                            
to a greater extent than higher rated fixed-income                                                                              
securities, which react primarily to fluctuations in                                                                            
the general level of interest rates. Fixed-income                                                                               
securities of this type are considered to be of poor                                                                            
standing and primarily speculative. Such securities                                                                             
are subject to a substantial degree of credit risk.                                                                             

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                      RISKS                                                  HOW WE STRIVE TO MANAGE THEM                       
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LIQUIDITY RISK is the possibility that securities       We limit the Fund's exposure to illiquid securities as described under  
cannot be readily sold within seven days at             "Additional Investment Information - Illiquid Securities."              
approximately the price that the Fund values them.                                                                              
                                                        Swap agreements entered into by the Fund will be treated as illiquid    
The high-yield secondary market is particularly         securities. However, most swap dealers will be willing to repurchase    
susceptible to liquidity problems when institutional    interest rate swaps.                                                    
investors, such as mutual funds and certain other                                                                               
financial institutions, temporarily stop buying bonds                                                                           
for regulatory, financial or other reasons.                                                                                     

FUTURES CONTRACTS, OPTIONS ON FUTURES CONTRACTS,        The Fund may use certain options strategies or may use futures contracts
FORWARD CONTRACTS, AND CERTAIN OPTIONS used as          and options on futures contracts. The Fund will not enter into futures  
investments for hedging and other non-speculative       contracts and options thereon to the extent that more than 5% of its    
purposes involve certain risks. For example, a lack of  assets are required as futures contract margin deposits and premiums on 
correlation between price changes of an option or       options and only to the extent that obligations under such futures      
futures contract and the assets being hedged could      contracts and options thereon would not exceed 20% of the Fund's total  
render a fund's hedging strategy unsuccessful and       assets.                                                                 
could result in losses. The same results could occur                                                                            
if movements of foreign currencies do not correlate as  See also "Foreign Risk" and "Currency Risk" above.                      
expected by the investment advisor at a time when a                                                                             
fund is using a hedging instrument denominated in one                                                                           
foreign currency to protect the value of a security                                                                             
denominated in a second foreign currency against                                                                                
changes caused by fluctuations in the exchange rate                                                                             
for the dollar and the second currency. If the                                                                                  
direction of securities prices, interest rates or                                                                               
foreign currency prices is incorrectly predicted, the                                                                           
fund will be in a worse position than if such                                                                                   
transactions had not been entered into. In addition,                                                                            
since there can be no assurance that a liquid                                                                                   
secondary market will exist for any contract purchased                                                                          
or sold, a fund may be required to maintain a position                                                                          
(and in the case of written options may be required to                                                                          
continue to hold the securities used as cover) until                                                                            
exercise or expiration, which could result in losses.                                                                           
Further, options and futures contracts on foreign                                                                               
currencies, and forward contracts, entail particular                                                                            
risks related to conditions affecting the underlying                                                                            
currency. Over-the-counter transactions in options and                                                                          
forward contracts also involve risks arising from the                                                                           
lack of an organized exchange trading environment.                                                                              

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                      RISKS                                                  HOW WE STRIVE TO MANAGE THEM                       
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ZERO COUPON AND PAY-IN-KIND BONDS are generally         The Fund may invest in zero coupon and pay-in-kind bonds to the extent  
considered to be more interest sensitive than           consistent with its investment objective. We cannot eliminate the risks 
income-bearing bonds, to be more speculative than       of zero coupon bonds, but we do try to address them by monitoring       
interest-bearing bonds, and to have certain tax         economic conditions, especially interest rate trends and their potential
consequences which could, under certain circumstances   impact on the Fund.                                                     
be adverse to the Fund. For example, the Fund accrues,                                                                          
and is required to distribute to shareholders, income                                                                           
on its zero coupon bonds. However, the Fund may not                                                                             
receive the cash associated with this income until the                                                                          
bonds are sold or mature. If the Fund does not have                                                                             
sufficient cash to make the required distribution of                                                                            
accrued income, the Fund could be required to sell                                                                              
other securities in its portfolio or to borrow to                                                                               
generate the cash required.                                                                                                     

PORTFOLIO TURNOVER RATES reflect the amount of          The Fund will normally experience an annual portfolio turnover rate     
securities that are replaced from the beginning of the  exceeding 200%.                                                         
year to the end of the year by the Fund. The higher                                                                             
the amount of portfolio activity, the higher the                                                                                
brokerage costs and other transaction costs of the                                                                              
Fund are likely to be. The amount of portfolio                                                                                  
activity will also affect the amount of taxes payable                                                                           
by the Fund's shareholders that are subject to federal                                                                          
income tax, as well as the character (ordinary income                                                                           
vs. capital gains) of such tax obligations.                                                                                     

PREPAYMENT RISK is the risk that homeowners will        The Fund may invest in Mortgage-Backed Securities, Collateralized       
prepay mortgages during periods of low interest rates,  Mortgage Obligations (CMOs) and Real Estate Mortgage Investment Conduits
forcing an investor to reinvest money at interest       (REMICs). The Fund takes into consideration the likelihood of prepayment
rates that might be lower than those on the prepaid     when mortgages are selected. The Fund may look for mortgage securities  
mortgage.                                               that have characteristics that make them less likely to be prepaid, such
                                                        as low outstanding loan balances or below-market interest rates.        

TRANSACTION COSTS RISK is the risk that the cost of     The Fund is subject to transaction costs risk to the extent that its    
buying, selling and holding foreign securities,         respective objective and policies permit it to invest, and it actually  
including brokerage, tax and custody costs, may be      does invest, in foreign securities. We strive to monitor transaction    
higher than those involved in domestic transactions.    costs and to choose an efficient trading strategy for the Fund.         

FOREIGN GOVERNMENT SECURITIES RISKS involve the         The Fund attempts to reduce the risks associated with investing in      
ability of a foreign government or government-related   foreign governments by limiting the portion of portfolio assets that may
issuer to make timely principal and interest payments   be invested in such securities.                                         
on its external debt obligations. This ability to make                                                                          
payments will be strongly influenced by the issuer's                                                                            
balance of payments, including export performance, its                                                                          
access to international credits and investments,                                                                                
fluctuations in interest rates and the extent of its                                                                            
foreign reserves.                                                                                                               

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                      RISKS                                                  HOW WE STRIVE TO MANAGE THEM                       
------------------------------------------------------  ------------------------------------------------------------------------
                                                                                                                                
VALUATION RISK: A less liquid secondary market as       We will strive to manage this risk by carefully evaluating individual   
described above makes it more difficult for the Fund    bonds and by limiting the amount of the Fund's assets that can be       
to obtain precise valuations of the high-yield          allocated to privately placed high-yield securities.                    
securities in its portfolio. During periods of reduced                                                                          
liquidity, judgment plays a greater role in valuing                                                                             
high-yield securities.                                                                                                          

LEGISLATIVE AND REGULATORY RISK: The United States      We monitor the status of regulatory and legislative proposals to        
Congress has from time to time taken or considered      evaluate any possible effects they might have on the Fund's portfolio.  
legislative actions that could adversely affect the                                                                             
high-yield bond market. For example, Congressional                                                                              
legislation has, with some exceptions, generally                                                                                
prohibited federally insured savings and loan                                                                                   
institutions from investing in high-yield securities.                                                                           
Regulatory actions have also affected the high-yield                                                                            
market. Similar actions in the future could reduce                                                                              
liquidity for high-yield securities, reduce the number                                                                          
of new high-yield securities being issued and could                                                                             
make it more difficult for the Fund to attain its                                                                               
investment objective.                                                                                                           

DISCLOSURE OF PORTFOLIO HOLDINGS INFORMATION                                    
A description of the Fund's policies and procedures with respect to the         
disclosure of the Fund's portfolio securities is available in the Fund's        
Statement of Additional Information and at www.delawarefunds.com.               

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WHO MANAGES THE FUND                                                            

INVESTMENT MANAGER AND SUB-ADVISOR                                              
Effective September 1, 2004, the Fund is managed by Delaware Management Company,
a series of Delaware Management Business Trust, which is an indirect, wholly    
owned subsidiary of Delaware Management Holdings, Inc. Delaware Management      
Company makes investment decisions for the Fund, manages the Fund's business    
affairs and provides daily administrative services. For these services, the     
manager is entitled to receive an aggregate fee of 0.55% of the Fund's average  
daily net assets.                                                               

Prior to September 1, 2004, the Fund was sub-advised by Delaware International  
Advisers Ltd. ("DIAL") which furnished investment recommendations, assets       
allocation advice, research and other investment services regarding foreign     
securities for the Fund. For its services to the Fund, DIAL was paid a          
sub-advisory fee equal to the fee received by the manager that is attributable  
to the foreign assets in the Fund's investment portfolio.                       

PORTFOLIO MANAGERS                                                              
Timothy L. Rabe, Paul Grillo and Philip R. Perkins have primary responsibility  
for making day-to-day investment decisions for the Fund. When making decisions  
for the Fund, Messrs. Rao, Rabe, Grillo and Perkins regularly consult with Ryan 
K. Brist and Stephen R. Cianci.                                                 

TIMOTHY L. RABE, Senior Vice President/Senior Portfolio Manager, received a     
bachelor's degree in finance from the University of Illinois. Prior to joining  
Delaware Investments in 2000, Mr. Rabe was a high-yield portfolio manager for   
Conseco Capital Management. Before that, Mr. Rabe worked as a tax analyst for   
The Northern Trust Company. Mr. Rabe is a CFA charterholder.                    

PAUL GRILLO, Vice President/Senior Portfolio Manager, holds a BA in Business    
Management from North Carolina State University and an MBA in Finance from Pace 
University. Prior to joining Delaware Investments in 1993, Mr. Grillo served as 
mortgage strategist and trader at the Dreyfus Corporation. He also served as    
Mortgage Strategist and Portfolio Manager at Chemical Investment Group and as   
Financial Analyst at Chemical Bank. Mr. Grillo is a CFA charterholder.          

PHILIP R. PERKINS, Senior Vice President/Senior Portfolio Manager, holds a B.A. 
from the University of Notre Dame. He joined Delaware Investments in June 2003  
from Deutsche Bank A.G., where he served as a Managing Director in Global       
Markets. He was Chief Operating Officer for the Bank's Emerging Markets         
Division, based in London. From 1998 to 2001, he was based in Moscow and        
responsible for Local Markets Trading. Prior to that, Mr. Perkins was Chief     
Executive Officer of Dinner Key Advisors Inc., a Registered Broker dealer       
founded to trade derivative mortgage backed bonds with institutional clients. He
began his career at Salomon Brothers, where he was a Mortgage/CMO trader from   
1985 to 1990.                                                                   

RYAN K. BRIST, Executive Vice President/Managing Director/Chief Investment      
Officer, Fixed Income, earned his bachelor's degree from Indiana University.    
Prior to joining Delaware Investments in August 2000, he served as a Senior     
Trader and Corporate Specialist for Conseco Capital Management's fixed-income   
group. He previously worked in oil/gas investment banking as an Analyst for Dean
Witter Reynolds in New York. He is a CFA Charterholder.                         

STEPHEN R. CIANCI, Senior Vice President/Senior Portfolio Manager, holds a BS   
and an MBA in Finance from Widener University. He joined Delaware Investments'  
Fixed Income Department in 1992 as an investment grade quantitative research    
analyst. In addition to his quantitative research responsibilities, Mr. Cianci  
also served as a mortgage-backed and asset-backed securities analyst. Mr. Cianci
is an Adjunct Professor of Finance at Widener University and a CFA              
charterholder.                                                                  

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WHO'S WHO?                                                                      
This diagram shows the various organizations involved with managing,            
administering and servicing the Delaware Investments Funds.                     

[GRAPHIC OMITTED: DIAGRAM SHOWING THE VARIOUS ORGANIZATIONS INVOLVED WITH       
MANAGING, ADMINISTERING, AND SERVICING THE DELAWARE INVESTMENTS FUNDS]          

                                                        [Enlarge/Download Table]
                                            BOARD OF TRUSTEES                                                
                                                                                                             
INVESTMENT MANAGER                                                                   CUSTODIAN               
Delaware Management Company                                                          JP Morgan Chase Bank    
2005 Market Street                                                                   4 Chase Metrotech Center
Philadelphia, PA 19103-7094                      THE FUND                            Brooklyn, NY 11245      

                             DISTRIBUTOR                          SERVICE AGENT                              
                             Delaware Distributors, L.P.          Delaware Service Company, Inc.             
                             2005 Market Street                   2005 Market Street                         
                             Philadelphia, PA 19103-7094          Philadelphia, PA 19103-7094                

                             FINANCIAL INTERMEDIARY WHOLESALER                                               
                             Lincoln Financial Distributors, Inc.                                            
                             2001 Market Street                                                              
                             Philadelphia, PA 19103-7055                                                     
PORTFOLIO MANAGERS                                                                                           
(see page 20 for details)                                                                                    

FINANCIAL ADVISORS
SHAREHOLDERS

BOARD OF TRUSTEES A mutual fund is governed by a Board of Trustees which has    
oversight responsibility for the management of the fund's business affairs.     
Trustees establish procedures and oversee and review the performance of the     
investment manager, the distributor and others that perform services for the    
fund. Generally, at least 40% of the Board of Trustees must be independent of   
the fund's investment manager and distributor. However, the Fund relies on      
certain exemptive rules created by the SEC that require the Board of Trustees   
overseeing the Fund to be comprised of a majority of such independent trustees. 
These independent fund trustees, in particular, are advocates for shareholder   
interests.                                                                      

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

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

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

DISTRIBUTOR Most mutual funds continuously offer new shares to the public       
through distributors who are regulated as broker-dealers and are subject to NASD
Regulation, Inc. (NASDR(SM)) rules governing mutual fund sales practices.       

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FINANCIAL INTERMEDIARY WHOLESALER Pursuant to a contractual arrangement with    
Delaware Distributors, L.P., Lincoln Financial Distributors, Inc. (LFD) is      
primarily responsible for promoting the sale of Fund shares through             
broker/dealers, financial advisors and other financial intermediaries.          

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

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

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

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ABOUT YOUR ACCOUNT                                                              

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

CHOOSING A SHARE CLASS                                                          

CLASS A                                                                         
o    Class A shares have an up-front sales charge of up to 4.50% that you pay   
     when you buy the shares. The offering price for Class A shares includes the
front-end sales charge.                                               

o    If you invest $100,000 or more, your front-end sales charge will be        
reduced.                                                              

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

o    Class A shares are also subject to an annual 12b-1 fee no greater than     
  0.30% (currently 0.25%) of average daily net assets, which is lower than
the 12b-1 fee for Class B, Class C and Class R shares.                

o    Class A shares generally are not subject to a contingent deferred sales    
  charge except in the limited circumstances described in the table below.

o    Class A shares generally are not available for purchase by anyone qualified
to purchase Class R shares.                                           

CLASS A SALES CHARGES                                                           

The following sales charge as a percentage of the amount invested is the maximum
percentage of the amount invested rounded to the nearest hundredth. The actual  
percentage will vary depending on the amount invested, rounding and the         
then-current NAV. Similarly, the actual sales charge as a percentage of offering
price may be different due to the amount invested, rounding and the then-current
offering price may be greater or lesser than the percentage shown.              

                                     Sales charge         Sales charge
                                    as % of               as %
Amount of purchase                       offering price    of amount invested*  
-------------------------------------    --------------   --------------------- 
Less than $100,000                            4.50%               5.13%         
$100,000 but under $250,000                   3.50%               4.00%         
$250,000 but under $500,000                   2.50%               3.00%         
$500,000 but under $1,000,000                 2.00%               2.44%         

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

                                    Sales charge        Sales charge
                                   as % of             as % of
Amount of purchase                       offering price     amount invested     
-------------------------------------    --------------   --------------------- 
$1 million up to $5 million                   none                none          
Next $20 million                                                                
Up to $25 million                             none                none          
Amount over $25 million                       none                none          

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CLASS B                                                                         

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

o    If you redeem Class B shares during the first year after you buy them, the 
    shares will be subject to a contingent deferred sales charge of 4.00%. The
 contingent deferred sales charge is 3.00% during the second year, 2.25%
during the third year, 1.50% during the fourth and fifth years, 1.00% 
during the sixth year, and 0% thereafter.                             

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

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

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

o    Approximately eight years after you buy them, Class B shares automatically 
convert into Class A shares with a 12b-1 fee of no more than 0.30%    
   (currently 0.25%). Conversion may occur as late as three months after the
  eighth anniversary of purchase, during which time Class B's higher 12b-1
fees apply.                                                           

o    You may purchase only up to $100,000 of Class B shares at any one time. The
limitation on maximum purchases varies for retirement plans.          

CLASS C                                                                         

o    Class C shares have no up-front sales charge, so the full amount of your   
     purchase is invested in a Fund. However, you will pay a contingent deferred
     sales charge of 1% if you redeem your shares within 12 months after you buy
them.                                                                 

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

o    Class C shares are subject to an annual 12b-1 fee no greater than 1% of    
average daily net assets, of which 0.25% are service fees paid to the 
distributor, dealers or others for providing services and maintaining 
shareholder accounts.                                                 

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

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

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

CLASS R                                                                         

o    Class R shares have no up-front sales charge, so the full amount of your   
purchase is invested in a fund. Class R shares are not subject to a   
contingent deferred sales charge.                                     

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o    Class R shares are subject to an annual 12b-1 fee no greater than 0.60% of 
     average daily net assets, which is lower than the 12b-1 fee for Class B and
Class C shares.                                                       

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

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

o    Class R shares generally are available only to (i) qualified and           
non-qualified plan shareholders covering multiple employees (including
401(k), 401(a), 457, and non-custodial 403(b) plans, as well as other 
    non-qualified deferred compensation plans) with assets (at the time shares
are considered for purchase) of $10 million or less; and (ii) to IRA  
rollovers from plans maintained on Delaware's retirement recordkeeping
system that are offering Class R shares to participants.              

Except as noted above, no other IRA accounts are eligible for Class R shares    
(e.g., no Simple IRA's, SEP-IRA's, SAR-SEP IRA's, Roth IRA's, etc.). For        
purposes of determining plan asset levels, affiliated plans may be combined at  
the request of the plan sponsor.                                                

DEALER COMPENSATION                                                             

Your financial advisor that sells you shares of the Fund may be eligible to     
receive the following amounts as compensation for your investment in the Fund.  
These amounts are paid by the distributor to the securities dealer with whom    
your financial advisor is associated.                                           

                                                                [Download Table]

                          CLASS A*  CLASS B**  CLASS C***  CLASS R****
                          --------  ---------  ----------  -----------
                                                                      
COMMISSION (%)                -       4.00%       1.00%          -    
Investment up to $49,999   4.00%         -           -           -    
$50,000 - $99,999          4.00%         -           -           -    
$100,000 - $249,999        3.00%         -           -           -    
$250,000 - $499,999        2.00%         -           -           -    
$500,000 - $999,999        1.60%         -           -           -    
$1,000,000 - $4,999,999    1.00%         -           -           -    
$5,000,000 - $24,999,999   0.50%         -           -           -    
$25,000,000 +              0.25%         -           -           -    
12b-1 FEE TO DEALER        0.30%      0.25%       1.00%       0.60%   

* On sales of Class A shares, the Distributor re-allows to your securities      
dealer a portion of the front-end sales charge depending upon the amount you    
invested. Your securities dealer is eligible to receive up to 0.30% 12b-1 fee   
applicable to Class A shares, however the Distributor has contracted to limit   
this amount to 0.25% through February 28, 2006.                                 

** On sales of Class B shares, the Distributor pays your securities dealer an   
up-front commission of 4.00%. Your securities dealer also may be eligible to    
receive a 12b-1 of up to 0.25% from the date of purchase. After approximately   
eight years, Class B shares automatically convert into Class A shares and       
dealers may then be eligible to receive the 0.30% 12b-1 fee applicable to Class 
A.                                                                              

*** On sales of Class C shares, the Distributor pays your securities dealer an  
up-front commission of 1.00%. The up-front commission includes an advance of the
first year's 12b-1 service fee of up to 0.25%. During the first 12 months, the  
Distributor retains the full 1.00% 12b-1 fee to partially offset the up-front   
commission and the prepaid 0.25% service fee advanced at the time of purchase.  
Starting in the 13th month, your securities dealer may be eligible to receive   
the full 1.00% 12b-1 fee applicable to Class C.                                 

**** On sales of Class R shares, the Distributor does not pay your securities   
dealer an up-front commission. Your securities dealer may be eligible to receive
a 12b-1 of up to 0.60% from the date of purchase.                               

Each share class may be eligible for purchase through programs sponsored by     
financial intermediaries where such program requires the purchase of a specific 
class of shares.                                                                

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Any account holding Class A shares as of June 1, 2003 (the date Class R shares  
were made available) continues to be eligible to purchase Class A shares after  
that date. Any account holding Class R shares is not eligible to purchase Class 
A shares.                                                                       

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

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ABOUT YOUR ACCOUNT (continued)                                                  

HOW TO REDUCE YOUR SALES CHARGE                                                 
We offer a number of ways to reduce or eliminate the sales charge on shares.    
Please refer to the Statement of Additional Information for detailed information
and eligibility requirements. You can also get additional information from your 
financial advisor. You or your financial advisor must notify us at the time you 
purchase shares if you are eligible for any of these programs. You may also need
to provide information to your financial advisor or the Fund in order to qualify
for a reduction in sales charges, such as your other Delaware Fund holdings and 
the names and holdings of qualifying family members. Class R shares have no     
up-front sales charge.                                                          

                                                        [Enlarge/Download Table]

                                                                                        SHARE CLASS                       
                                                                ----------------------------------------------------------
PROGRAM                  HOW IT WORKS                                  A                     B                    C       
-----------------------  -------------------------------------  --------------   -----------------------------------------
                                                                                                                          
Letter of Intent         Through a Letter of Intent you agree          X         Although the Letter of Intent and Rights 
                         to invest a certain amount in                           of Accumulation do not apply to the      
                         Delaware Investments Funds (except                      purchase of Class B and Class C shares,  
                         money market funds with no sales                        you can combine your purchase of Class A 
                         charge) over a 13-month period to                       shares with your purchase of Class B and 
                         qualify for reduced front-end sales                     Class C shares to fulfill your Letter of 
                         charges.                                                Intent or qualify for Rights of          
                                                                                 Accumulation.                            

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

Reinvestment of          Up to 12 months after you redeem       For Class A,     For Class B, your account   Not          
Redeemed Shares          shares, you can reinvest the           you will not     will be credited with the   available.   
                         proceeds without paying a sales        have to pay      contingent deferred sales                
                         charge as noted to the right.          an additional    charge you previously paid               
                                                                front-end        on the amount you are                    
                                                                sales charge.    reinvesting. Your schedule               
                                                                                 for contingent deferred                  
                                                                                 sales charges and                        
                                                                                 conversion to Class A will               
                                                                                 not start over again, it                 
                                                                                 will pick up from the                    
                                                                                 point at which you                       
                                                                                 redeemed your shares.                    

SIMPLE IRA, SEP IRA,     These investment plans may qualify            X         There is no reduction in sales charges   
SARSEP, Prototype        for reduced sales charges by                            for Class B or Class C shares for group  
Profit Sharing,          combining the purchases of all                          purchases by retirement plans.           
Pension, 401(k), SIMPLE  members of the group. Members of                                                                 
401(k), 403(b)(7), and   these groups may also qualify to                                                                 
457 Retirement Plans     purchase shares without a front-end                                                              
                         sales charge and may qualify for a                                                               
                         waiver of any contingent deferred                                                                
                         sales charges.                                                                                   

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ABOUT YOUR ACCOUNT (continued)                                                  

HOW TO BUY SHARES                                                               

[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]                                     

THROUGH YOUR FINANCIAL ADVISOR                                                  
Your financial advisor can handle all the details of purchasing shares,         
including opening an account. Your advisor may charge a separate fee for this   
service.                                                                        

[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]                                  

BY MAIL                                                                         
Complete an investment slip and mail it with your check, made payable to the    
fund and class of shares you wish to purchase, to Delaware Investments, 2005    
Market Street, Philadelphia, PA 19103-7094. If you are making an initial        
purchase by mail, you must include a completed investment application (or an    
appropriate retirement plan application if you are opening a retirement account)
with your check.                                                                

[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]                                

BY WIRE                                                                         
Ask your bank to wire the amount you want to invest to Bank of New York, ABA    
#021000018, Bank Account number 8900403748. Include your account number and the 
name of the fund in which you want to invest. If you are making an initial      
purchase by wire, you must call us so we can assign you an account number.      

[GRAPHIC OMITTED: ILLUSTRATION OF AN EXCHANGE SYMBOL]                           

BY EXCHANGE                                                                     
You can exchange all or part of your investment in one or more funds in the     
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that under most circumstances you are allowed to exchange only
between like classes of shares. To open an account by exchange, call the        
Shareholder Service Center at 800 523-1918.                                     

[GRAPHIC OMITTED: ILLUSTRATION OF A KEYPAD]                                     

THROUGH AUTOMATED SHAREHOLDER SERVICES                                          
You can purchase or exchange shares through Delaphone, our automated telephone  
service, or through our web site, www.delawareinvestments.com. For more         
information about how to sign up for these services, call our Shareholder       
Service Center at 800 523-1918.                                                 

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

The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receives your order before the close of regular    
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a   
business day, you will pay that day's closing share price which is based on the 
Fund's net asset value. If your order is received after the close of regular    
trading, you will pay the next business day's price. A business day is any day  
that the New York Stock Exchange is open for business. We reserve the right to  
reject any purchase order. In particular, we reserve the right to reject any    
specific purchase order for any person whose transactions seem to follow a      
market timing pattern.                                                          

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ABOUT YOUR ACCOUNT (continued)                                                  

HOW TO BUY SHARES (continued)                                                   

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

FAIR VALUATION                                                                  
When the Fund uses fair value pricing, it may take into account any factors it  
deems appropriate. The Fund may determine fair value based upon developments    
related to a specific security, current valuations of foreign stock indices (as 
reflected in U.S. futures markets) and/or U.S. sector or broader stock market   
indices. The prices of securities used by the Fund to calculate its NAV may     
differ from quoted or published prices for the same securities. Fair value      
pricing may involve subjective judgments and it is possible that the fair value 
determined for a security is materially different than the value that could be  
realized upon the sale of that security.                                        

The Fund anticipates using fair value pricing for securities primarily traded on
U.S. exchanges only under very limited circumstances, such as the early closing 
of the exchange on which a security is traded or suspension of trading in the   
security. Funds may use fair value pricing more frequently for securities       
primarily traded in non-U.S. markets because, among other things, most foreign  
markets close well before the Fund values its securities at 4:00 p.m., Eastern  
time. The earlier close of these foreign markets gives rise to the possibility  
that significant events, including broad market moves, may have occurred in the 
interim. To account for this, the Fund may frequently value many foreign equity 
securities using fair value prices based on third party vendor modeling tools to
the extent available.                                                           

Subject to the Board of Trustee's oversight, the Fund's Board of Trustees has   
delegated responsibility for valuing the Fund's assets to a Pricing Committee of
the Manager, which operates under the policies and procedures approved by the   
Board of Trustees, to value the Fund's assets on behalf of the Fund. The Pricing
Committee values Fund assets as described above.                                

RETIREMENT PLANS                                                                
In addition to being an appropriate investment for your IRA, Roth IRA and       
Coverdell Education Savings Account, shares in the Fund may be suitable for     
group retirement plans. You may establish your IRA account even if you are      
already a participant in an employer-sponsored retirement plan. For more        
information on how shares in the Fund can play an important role in your        
retirement planning or for details about group plans, please consult your       
financial advisor, or call 800 523-1918.                                        

[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]                                     

THROUGH YOUR FINANCIAL ADVISOR                                                  
Your financial advisor can handle all the details of redeeming your shares. Your
advisor may charge a separate fee for this service.                             

[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]                                  

BY MAIL                                                                         
You can redeem your shares (sell them back to the fund) by mail by writing to:  
Delaware Investments, 2005 Market Street, Philadelphia, PA 19103-7094. All      
owners of the account must sign the request, and for redemptions of more than   
$100,000, you must include a signature guarantee for each owner. Signature      
guarantees are also required when redemption proceeds are going to an address   
other than the address of record on an account.                                 

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[GRAPHIC OMITTED: ILLUSTRATION OF A TELEPHONE]                                  

BY TELEPHONE                                                                    
You can redeem up to $100,000 of your shares by telephone. You may have the     
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you 
may have the proceeds sent directly to your bank by wire. Bank information must 
be on file before you request a wire redemption.                                

[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]                                

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

[GRAPHIC OMITTED: ILLUSTRATION OF A KEYPAD]                                     

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ABOUT YOUR ACCOUNT (continued)                                                  

HOW TO REDEEM SHARES (continued)                                                

THROUGH AUTOMATED SHAREHOLDER SERVICES                                          
You can redeem shares through Delaphone, our automated telephone service, or    
through our web site, www.delawareinvestments.com. For more information about   
how to sign up for these services, call our Shareholder Service Center at 800   
523-1918.                                                                       

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

When you send us a properly completed request to redeem or exchange shares, and 
we or an authorized agent receives the request before the close of regular      
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time), you   
will receive the net asset value next determined after we receive your request. 
If we receive your request after the close of regular trading on the New York   
Stock Exchange, you will receive the net asset value next determined on the next
business day. We will deduct any applicable contingent deferred sales charges.  
You may also have to pay taxes on the proceeds from your sale of shares. We will
send you a check, normally the next business day, but no later than seven days  
after we receive your request to sell your shares. If you purchased your shares 
by check, we will wait until your check has cleared, which can take up to 15    
days, before we send your redemption proceeds.                                  

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

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

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

AUTOMATIC INVESTING PLAN                                                        
The Automatic Investing Plan allows you to make regular monthly or quarterly    
investments directly from your checking account.                                

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

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ABOUT YOUR ACCOUNT (continued)                                                  

ONLINE ACCOUNT ACCESS                                                           
Account access is a password protected area of the Delaware Investments Web site
that gives you access to your account information and allows you to perform     
transactions in a secure environment.                                           

ELECTRONIC DELIVERY                                                             
With Delaware eDelivery, you can receive your fund documents electronically     
instead of via the U.S. mail. When you sign up for eDelivery, you can access    
your account statements, shareholder reports, and other fund materials online,  
in a secure environment at any time, from anywhere.                             

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

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

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

MONEYLINE(SM) ON DEMAND SERVICE                                                 
Through our MoneyLine(SM) On Demand Service, you or your financial advisor may  
transfer money between your Fund account and your predesignated bank account by 
telephone request. This service is not available for retirement plans, except   
for purchases into IRAs. MoneyLine has a minimum transfer of $25 and a maximum  
transfer of $50,000. Delaware Investments does not charge a fee for this        
service; however, your bank may assess one.                                     

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

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

The applicable Limited CDSC for Class A Shares and CDSC for Class B and Class C 
Shares redeemed via a Systematic Withdrawal Plan will be waived if the annual   
amount withdrawn in each year is less than 12% of the account balance on the    
date that the Plan is established. If the annual amount withdrawn in any year   
exceeds 12% of the account balance on the date that the Systematic Withdrawal   
Plan is established, all redemptions under the                                  

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Plan will be subjected to the applicable contingent deferred sales charge,      
including an assessment for previously redeemed amounts under the Plan.         

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ABOUT YOUR ACCOUNT (continued)                                                  

FREQUENT TRADING OF FUND SHARES (MARKET TIMING)                                 
The Fund discourages purchases by market timers and purchase orders (including  
the purchase side of exchange orders) by shareholders identified as market      
timers may be rejected. The Fund's Board of Trustees has adopted policies and   
procedures designed to detect, deter and prevent trading activity detrimental to
the Fund and its shareholders, such as market timing. The Fund will consider    
anyone who follows a pattern of market timing in any fund in the Delaware       
Investments Family of Funds or the Optimum Funds Trust to be a market timer and 
may consider anyone who has followed a similar pattern of market timing at an   
unaffiliated fund family to be a market timer.                                  

Market timing of a fund occurs when investors make consecutive rapid short-term 
"roundtrips", or in other words, purchases into a fund followed quickly by      
redemptions out of that fund. A short-term roundtrip is any redemption of fund  
shares within 20 business days of a purchase of that fund's shares. If you make 
a second such short-term roundtrip in a fund within the same calendar quarter of
a previous short-term roundtrip in that fund, you may be considered a market    
timer. The purchase and sale of fund shares through the use of the exchange     
privilege are also included in determining whether market timing has occurred.  
The Fund also reserves the right to consider other trading patterns as market   
timing.                                                                         

Your ability to use the Fund's exchange privilege may be limited if you are     
identified as a market timer. If you are identified as a market timer, we will  
execute the redemption side of your exchange order but may refuse the purchase  
side of your exchange order. The Fund reserves the right to restrict, reject or 
cancel, without prior notice, any purchase or exchange order for any reason,    
including any purchase or exchange order accepted by any shareholder's financial
intermediary or in any omnibus-type account. Transactions placed in violation of
the Fund's market timing policy are not necessarily deemed accepted by the Fund 
and may be cancelled or revoked by the Fund on the next business day following  
receipt by the Fund.                                                            

However, sales of Fund shares back to a Fund or redemptions will continue to be 
permitted in accordance with the terms of the Fund's current Prospectus. This   
may result in an undesirable situation where a shareholder with an account      
closed to new purchases could be faced with a costly redemption of Fund shares  
if, for example, these shares have declined in value, the shareholder recently  
paid a front-end sales charge or the shares are subject to a CDSC, or the sale  
results in adverse tax consequences to the shareholder. To avoid this risk, a   
shareholder should carefully monitor the purchases, sales, and exchanges of Fund
shares and avoid frequent trading in Fund shares.                               

The Fund reserves the right to modify this policy, including any monitoring     
procedures and the procedures to close accounts to new purchases established    
from time to time to effectuate this policy, at any time without notice. Though 
the implementation of this policy involves judgments that are inherently        
subjective and involves some selectivity in their application, we seek to make  
judgments and applications that are consistent with the interests of the Fund's 
shareholders. While we will seek to take actions that will detect market timing,
we cannot represent that such trading activity can be completely eliminated.    

RISKS OF MARKET TIMING                                                          
By realizing profits through short-term trading, shareholders that engage in    
rapid purchases and sales or exchanges of the Fund's shares dilute the value of 
shares held by long-term shareholders. Volatility resulting from excessive      
purchases and sales or exchanges of Fund shares, especially involving large     
dollar amounts, may disrupt efficient portfolio management. In particular, the  
Fund may have difficulty implementing its long-term investment strategies if it 
is forced to maintain a higher level of its assets in cash to accommodate       
significant short-term trading activity. Excessive purchases and sales or       
exchanges of the Fund's shares may force the Fund to sell portfolio securities  
at inopportune times to raise cash to accommodate short-term trading activity.  
In addition, the Fund may incur increased expenses if one or more shareholders  
engage in excessive or short-term trading. For example, the Fund may be forced  
to liquidate investments as a result of short-term trading and incur increased  
brokerage costs and realization of taxable capital gains without attaining any  
investment advantage. All of these factors may adversely affect Fund            
performance.                                                                    

A fund that invests significantly in foreign securities may be particularly     
susceptible to short-term trading strategies. This is because foreign securities
are typically traded on markets that close well before the time a fund          
calculates its NAV at 4:00 p.m. Eastern time, which gives rise to the           
possibility that developments may have occurred in the interim that would affect
the value of these securities. The time zone differences among international    
stock markets can allow a shareholder engaging in a short-term trading strategy 
to exploit differences in fund share prices that are                            

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based on closing prices of foreign securities established some time before the  
fund calculates its own share price. Any fund that invests in securities that   
are, among other things, thinly traded, traded infrequently, or relatively      
illiquid has the risk that the current market price for the securities may not  
accurately reflect current market values. A shareholder may seek to engage in   
short-term trading to take advantage of these pricing differences. Funds that   
may be adversely affected by such arbitrage include, in particular, funds that  
significantly invest in small cap securities, technology and other specific     
industry sector securities, and in certain fixed-income securities, such as high
yield bonds, asset-backed securities, or municipal bonds.                       

TRANSACTION MONITORING PROCEDURES                                               
The Fund, through its transfer agent, maintains surveillance procedures designed
to detect excessive or short-term trading in Fund shares. This monitoring       
process involves several factors, which includes scrutinizing transactions in   
Fund shares for transactions in violation of the Fund's market timing policy or 
other patterns of short-term or excessive trading. For purposes of these        
transaction monitoring procedures, the Fund may consider trading activity in    
multiple accounts under common ownership, control, or influence. Trading        
activity identified by either, or a combination, of these factors, or as a      
result of any other information available at the time, will be evaluated to     
determine whether such activity might constitute excessive or short-term        
trading. These procedures may be modified from time to time, as necessary or    
appropriate to improve the detection of excessive or short-term trading or to   
address specific circumstances, such as for certain retirement plans, to conform
to plan exchange limits or U.S. Department of Labor regulations, or for certain 
automated or pre-established exchange, asset allocation or dollar cost averaging
programs, or omnibus account arrangements.                                      

Omnibus account arrangements are common forms of holding shares of the Fund,    
particularly among certain brokers, dealers, and other financial intermediaries,
including sponsors of retirement plans and variable insurance products. The Fund
seeks to apply its monitoring procedures to these omnibus account arrangements  
and to the individual participant level in such accounts. In efforts to         
discourage market timers in such accounts the Fund may consider enforcement     
against market timers at the participant level and at the omnibus level, up to  
and including termination of the omnibus account.                               

LIMITATIONS ON ABILITY TO DETECT AND CURTAIL MARKET TIMING                      
Shareholders seeking to engage in market timing may employ a variety of         
strategies to avoid detection and, despite the efforts of the Fund and its      
agents to detect market timing in Fund shares, there is no guarantee that the   
Fund will be able to identify these shareholders or curtail their trading       
practices. In particular, the Fund may not be able to detect market timing in   
Fund shares attributable to a particular investor who effects purchase and/or   
exchange activity in Fund shares through omnibus accounts. Also, multiple tiers 
of these entities may exist, each utilizing an omnibus account arrangement,     
which may further compound the difficulty of detecting excessive or short       
duration trading activity in Fund shares.                                       

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              
Dividends, if any, are declared daily and paid monthly. Capital gains, if any,  
are paid annually. We automatically reinvest all dividends and any capital      
gains, unless you direct us to do otherwise.                                    

In addition, in order to satisfy certain distribution requirements of the Tax   
Reform Act of 1986, the Fund may declare special year-end dividend and capital  
gains distributions during November and December to shareholders of record on a 
date in such month. Such distributions, if received by shareholders by January, 
are deemed to have been paid by the Fund and received by shareholders on the    
earlier of the date paid or December 31 of the prior year.                      

The tax status of your dividends from the Fund is the same whether you reinvest 
your dividends or receive them in cash.                                         

Distributions from the Fund's long-term capital gains are taxable as capital    
gains, while distributions from short-term capital gains and net investment     
income are generally taxable as ordinary income. The tax rate on capital gains  
is less than the tax rate on ordinary income.                                   

You also may be subject to state and local taxes on distributions. Tax laws are 
subject to change, so we urge you to consult your tax advisor about your        
particular tax situation and how it might be affected by current tax law.       

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

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CERTAIN MANAGEMENT CONSIDERATIONS                                               

INVESTMENTS BY FUND OF FUNDS AND INVESTMENT VEHICLES THAT OPERATE SIMILARLY TO  
FUNDS OF FUNDS                                                                  
The Fund accepts investments from funds of funds, including those within        
Delaware Investments family, and investment vehicles that operate similarly to  
funds of funds, such as 529 plans. A "529 Plan" is a college savings program    
that operates under section 529 of the Internal Revenue Code. From time to time,
the Fund may experience large investments or redemptions due to allocations or  
rebalancings by these funds of funds and/or similar investment vehicles. While  
it is impossible to predict the overall impact of these transactions over time, 
there could be adverse effects on portfolio management. For example, the Fund   
may be required to sell securities or invest cash at times when it would not    
otherwise do so. These transactions could also have tax consequences if sales of
securities result in gains, and could also increase transaction costs or        
portfolio turnover. The manager will monitor transactions by the funds of funds 
and/or similar investment vehicles and will attempt to minimize any adverse     
effects on the Fund and funds of funds and/or similar investment vehicle as a   
result of these transactions.                                                   

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FINANCIAL HIGHLIGHTS                                                            

Financial highlights table is intended to help you understand the Fund's        
financial performance. All "per share" information reflects financial results   
for a single Fund share. This information has been audited by Ernst & Young,    
LLP, whose report, along with the Fund's financial statements, is included in   
the Fund's annual report, which is available upon request by calling 800        
523-1918.                                                                       

                                                        [Enlarge/Download Table]

                                                                                           Delaware Diversified Income Fund 
                                                                                                                    Class A 
                                                  ------------------------------------------------------------------------- 
                                                                                                                   Year     
                                                                                                                   Ended    
                                                                                                                   10/31    
                                                     2004           2003            2002(3)*         2001*         2000*    
                                                  ----------     ----------        ----------     ----------     ---------- 
                                                                                                                            
NET ASSET VALUE, BEGINNING OF PERIOD              $    8.590     $    8.960        $    9.440     $    8.600     $    8.550 

Income (loss) from investment operations:              0.377          0.374             0.444          0.541          0.528 
Net investment income(1)                               0.450          0.804            (0.001)         0.685          0.077 
                                                  ----------     ----------        ----------     ----------     ---------- 
Net realized and unrealized gain (loss) on                                                                                  
 investments and foreign currencies                    0.827          1.178             0.443          1.226          0.605 
                                                  ----------     ----------        ----------     ----------     ---------- 
TOTAL FROM INVESTMENT OPERATIONS                                                                                            

LESS DIVIDENDS AND DISTRIBUTIONS FROM:                                                                                      
Net investment income                                 (0.434)        (1.274)           (0.477)        (0.361)        (0.555)
Net realized gain on investments                      (0.053)        (0.274)           (0.446)        (0.025)             - 
                                                  ----------     ----------        ----------     ----------     ---------- 
Total dividends and distributions                     (0.487)        (1.548)           (0.923)        (0.386)        (0.555)
                                                  ----------     ----------        ----------     ----------     ---------- 

NET ASSET VALUE, END OF PERIOD                    $    8.930     $    8.590        $    8.960     $    9.440     $    8.600 
                                                  ==========     ==========        ==========     ==========     ========== 

TOTAL RETURN(2)                                         9.92%         14.80%             5.39%         14.78%          7.59%

RATIOS AND SUPPLEMENTAL DATA:                                                                                               
Net assets, end of period (000 omitted)           $  294,033     $   83,100        $    4,391     $    8,672     $    7,724 
Ratio of expenses to average net assets                 1.02%          1.00%             0.58%          0.55%          0.54%
Ratio of expenses to average net assets prior to                                                                            
 expense limitation and expenses paid indirectly        1.19%          1.60%             1.11%          0.62%          0.61%
Ratio of net investment income to average net                                                                               
 assets                                                 4.33%          4.51%             5.09%          6.05%          6.35%
Ratio of net investment income to average net                                                                               
 assets prior to expense limitation and expenses                                                                            
 paid indirectly                                        4.16%          3.91%             4.56%          5.98%          6.28%
Portfolio turnover                                       452%           620%              545%           252%           143%

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(1)  The average shares outstanding method has been applied for per share       
information.                                                          
(2)  Total investment return is based on the change in net asset value of a     
share during the period and assumes reinvestment or dividends and     
     distributions at net asset value and does not reflect the impact of a sales
  charge. Total investment return reflects a waiver and payment of fees by
 the manager and distributor, as applicable. Performance would have been
lower had the expense limitation not been in effect.                  
(3)  As required, effective November 1, 2001, the Fund adopted the provisions of
     the AICPA Audit and Accounting Guide for Investment Companies that requires
amortization of all premiums and discounts on debt securities and the 
recording of paydown gains and losses on mortgage- and asset-backed   
     securities as an adjustment to interest income. The effect of these changes
     for the year ended October 31, 2002 was a decrease in net investment income
   per share of $0.044, an increase in net realized gain (loss) per share of
     $0.044, and a decrease in the ratio of net investment income to average net
     assets of 0.51%. Per share data and ratios for periods prior to November 1,
2001 have not been restated to reflect these changes in accounting.   

*    Effective October 28, 2002, Delaware Pooled Trust - The Delaware           
Diversified Core Fixed Income Portfolio ("Pooled Trust Portfolio") was
    merged into the Delaware Group Adviser Funds - Delaware Diversified Income
Fund. Financial highlights for the periods prior to October 28, 2002, 
  reflect the operating history of the Pooled Trust Portfolio. Performance
   prior to October 28, 2002 does not reflect the impact of distribution and
 service (12b-1) fees and the higher management and transfer agency fees
currently borne by holders of Class A shares.                         

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                                                        [Enlarge/Download Table]

DELAWARE DIVERSIFIED INCOME FUND                                                                        
                                                                    CLASS B                             
                                                                 Year Ended                  Year Ended 
                                                                      10/31                       10/31 
                                                        2004           2003          2004          2003 
                                                  ----------     ----------    ----------    ---------- 
                                                                                                        
NET ASSET VALUE, BEGINNING OF PERIOD              $    8.590     $    8.960    $    8.590    $    8.960 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:                                                               
Net investment income(2)                               0.312          0.313         0.312         0.315 
Net realized and unrealized gain (loss) on                                                              
 investments and foreign currencies                    0.440          0.807         0.450         0.798 
                                                  ----------     ----------    ----------    ---------- 
TOTAL FROM INVESTMENT OPERATIONS                       0.752          1.120         0.762         1.113 
                                                  ----------     ----------    ----------    ---------- 

LESS DIVIDENDS AND DISTRIBUTIONS FROM:                (0.369)        (1.216)       (0.369)       (1.209)
Net investment income                                 (0.053)        (0.274)       (0.053)       (0.274)
                                                  ----------     ----------    ----------    ---------- 
Net realized gain on investments                      (0.422)        (1.490)       (0.422)       (1.483)
                                                  ----------     ----------    ----------    ---------- 
TOTAL DIVIDENDS AND DISTRIBUTIONS                                                                       

Net asset value, end of period                    $    8.920     $    8.590    $    8.930    $    8.590 
                                                  ==========     ==========    ==========    ========== 

TOTAL RETURN(3)                                         9.10%         14.03%         9.11%        13.95%

RATIOS AND SUPPLEMENTAL DATA:                                                                           
Net assets, end of period (000 omitted)           $   43,335     $   16,147    $  109,911    $   48,989 
Ratio of expenses to average net assets                 1.77%          1.75%         1.77%         1.75%
Ratio of expenses to average net assets prior to                                                        
 expense limitation and expenses paid indirectly        1.89%          2.30%         1.89%         2.30%
Ratio of net investment income to average net                                                           
 assets                                                 3.58%          3.76%         3.58%         3.76%
Ratio of net investment income to average net                                                           
 assets prior to expense limitation and expenses                                                        
 paid indirectly                                        3.46%          3.21%         3.46%         3.21%
Portfolio turnover                                       452%           620%          452%          620%


DELAWARE DIVERSIFIED INCOME FUND                                                                        
                                                      CLASS C                      CLASS R              
                                                       Period                       Period              
                                                  10/28/02(1)     Year Ended     6/2/03(1)              
                                                           to          10/31            to              
                                                     10/31/02           2004      10/31/03              
                                                  -----------     ----------    ----------              
                                                                                                        
NET ASSET VALUE, BEGINNING OF PERIOD               $    8.860     $    8.590    $    8.620              

INCOME (LOSS) FROM INVESTMENT OPERATIONS:                                                               
Net investment income(2)                                0.005          0.347         0.142              
Net realized and unrealized gain (loss) on                                                              
investments and foreign currencies                      0.095          0.450        (0.036)             
                                                   ----------     ----------    ----------              
TOTAL FROM INVESTMENT OPERATIONS                        0.100          0.797         0.106              
                                                   ----------     ----------    ----------              
LESS DIVIDENDS AND DISTRIBUTIONS FROM:                     --         (0.404)       (0.136)             
Net investment income                                      --         (0.053)           --              
                                                   ----------     ----------    ----------              
Net realized gain on investments                           --         (0.457)       (0.136)             
                                                   ----------     ----------    ----------              
TOTAL DIVIDENDS AND DISTRIBUTIONS                                                                       

Net asset value, end of period                     $    8.960     $    8.930    $    8.590              
                                                   ==========     ==========    ==========              

TOTAL RETURN(3)                                          1.13%          9.55%         1.24%             

RATIOS AND SUPPLEMENTAL DATA:                                                                           
Net assets, end of period (000 omitted)            $       10     $    5,557    $      256              
Ratio of expenses to average net assets                  1.75%          1.37%         1.35%             
Ratio of expenses to average net assets prior to                                                        
 expense limitation and expenses paid indirectly           --(4)        1.49%         1.98%             
Ratio of net investment income to average net                                                           
 assets                                                  4.01%          3.98%         4.20%             
Ratio of net investment income to average net                                                           
assets prior to expense limitation and expenses                                                         
paid indirectly                                            --(4)        3.86%         3.57%             
Portfolio turnover                                        545%           452%          620%             

(1)  Date of commencement of operations; ratios and portfolio turnover have been
annualized and total return has not been annualized.                  
(2)  The average shares outstanding method has been applied for per share       
information.                                                          
(3)  Total investment return is based on the change in net asset value of a     
share during the period and assumes reinvestment of dividends and     
     distributions at net asset value and does not reflect the impact of a sales
  charge. Total investment return reflects a waiver and payment of fees by
   the manager. Performance would have been lower had the expense limitation
   not been in effect. Because Class C shares commenced operations only four
 days prior to the Fund's fiscal year end, the total return noted In the
 table above Is not necessarily representative of the performance of the
Class C shares over a longer period of time.                          
(4)  The ratios of expenses and net investment income to average net assets     
    prior to expense limitation and expenses paid indirectly have been omitted
as                                                                    

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   management believes that such ratios for this relatively short period are
not meaningful.                                                       
(5)  As of October 31, 2003, the Delaware Diversified Income Fund Class B had   
    one share outstanding, representing the initial seed purchase. Shareholder
     data for this class is not disclosed because management does not believe it
to be meaningful.                                                     

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HOW TO READ THE FINANCIAL HIGHLIGHTS                                            

NET INVESTMENT INCOME (LOSS)                                                    
Net investment income (loss) includes dividend and interest income earned from a
fund's investments; it is after expenses have been deducted.                    

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                          
A realized gain occurs when we sell an investment at a profit, while a realized 
loss occurs when we sell an investment at a loss. When an investment increases  
or decreases in value but we do not sell it, we record an unrealized gain or    
loss. The amount of realized gain per share, if any, that we pay to shareholders
would be listed under "Less dividends and distributions from - Net realized gain
on investments."                                                                

NET ASSET VALUE (NAV)                                                           
This is the value of a mutual fund share, calculated by dividing the net assets 
by the number of shares outstanding.                                            

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

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

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

RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS                     
We determine this ratio by dividing net investment income by average net assets.

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

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HOW TO USE THIS GLOSSARY                                                        
The glossary includes definitions of investment terms, many of which are used   
throughout the Prospectus. If you would like to know the meaning of an          
investment term that is not explained in the text please check the glossary.    

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

AVERAGE MATURITY                                                                
An average of when the individual bonds and other debt securities held in a     
portfolio will mature.                                                          

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

BOND RATINGS                                                                    
Independent evaluations of creditworthiness, ranging from Aaa/AAA (highest      
quality) to D (lowest quality). Bonds rated Baa/BBB or better are considered    
investment grade. See also Nationally recognized statistical ratings            
organization.                                                                   

CAPITAL                                                                         
The amount of money you invest.                                                 

CAPITAL APPRECIATION                                                            
An increase in the value of an investment.                                      

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

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

COMPOUNDING                                                                     
Earnings on an investment's previous earnings.                                  

CONSUMER PRICE INDEX (CPI)                                                      
Measurement of U.S. inflation; represents the price of a basket of commonly     
purchased goods.                                                                

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

CORPORATE BOND                                                                  
A debt security issued by a corporation. See Bond.                              

COST BASIS                                                                      
The original purchase price of an investment, used in determining capital gains 
and losses.                                                                     

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DEPRECIATION                                                                    
A decline in an investment's value.                                             

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

DIVIDEND DISTRIBUTION                                                           
Payments to mutual fund shareholders of dividends passed along from the fund's  
portfolio of securities.                                                        

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

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

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

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

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

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

MANAGEMENT FEE                                                                  
The amount paid by a mutual fund to the investment advisor for management       
services, expressed as an annual percentage of the fund's average daily net     
assets.                                                                         

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

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

NASD REGULATION, INC. (NASDR(SM))                                               
The independent subsidiary of the National Association of Securities Dealers,   
Inc. responsible for regulating the securities industry.                        

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NATIONALLY RECOGNIZED STATISTICAL RATINGS ORGANIZATION (NRSRO)                  
A company that assesses the credit quality of bonds, commercial paper, preferred
and common stocks and municipal short-term issues, rating the probability that  
the issuer of the debt will meet the scheduled interest payments and repay the  
principal. Ratings are published by such companies as Moody's Investors Service,
Inc. (Moody's), Standard & Poor's (S&P) and Fitch, Inc. (Fitch).                

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

NET ASSETS                                                                      
Net assets for purposes of a Fund's 80% Policy means the total value of all     
assets in the Fund's portfolio, minus any liabilities, plus the amount of the   
Fund's borrowings, if any, for investment purposes.                             

PREFERRED STOCK                                                                 
Preferred stock has preference over common stock in the payment of dividends and
liquidation of assets. Preferred stocks also often pay dividends at a fixed rate
and are sometimes convertible into common stock.                                

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

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

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

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

SALES CHARGE                                                                    
Charge on the purchase or redemption of fund shares sold through financial      
advisors. May vary with the amount invested. Typically used to compensate       
advisors for advice and service provided.                                       

SEC (SECURITIES AND EXCHANGE COMMISSION)                                        
Federal agency established by Congress to administer the laws governing the     
securities industry, including mutual fund companies.                           

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

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

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

STATEMENT OF ADDITIONAL INFORMATION (SAI)                                       
The document serving as "Part B" of a fund's prospectus that provides more      
detailed information about the fund's organization, investments, policies and   
risks.                                                                          

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STOCK                                                                           
An investment that represents a share of ownership (equity) in a corporation.   
Stocks are often referred to as common stocks or equities.                      

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

UNIFORM GIFT TO MINORS ACT AND UNIFORM TRANSFERS TO MINORS ACT                  
Federal and state laws that provide a simple way to transfer property to a minor
with special tax advantages.                                                    

U.S. GOVERNMENT SECURITIES                                                      
Securities issued by U.S. government or its agencies. They include Treasuries as
well as agency-backed securities such as Fannie Maes.                           

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

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DELAWARE DIVERSIFIED INCOME FUND                                                

ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS is available in the Fund's  
annual and semi-annual reports to shareholders. In the Fund's shareholder       
reports, you will find a discussion of the market conditions and investment     
strategies that significantly affected the Fund's performance during the report 
period. You can find more detailed information about the Fund in the current    
Statement of Additional Information, which we have filed electronically with the
Securities and Exchange Commission (SEC) and which is legally a part of this    
Prospectus. If you want a free copy of the Statement of Additional Information, 
the annual or semi-annual report, or if you have any questions about investing  
in the Fund, you can write to us at 2005 Market Street, Philadelphia, PA        
19103-7094, or call toll-free 800 523-1918. You may also obtain additional      
information about the Fund from your financial advisor.                         

You can find reports and other information about the Fund on the EDGAR Database 
on the SEC web site (http://www.sec.gov). You can also get copies of this       
information, after payment of a duplicating fee, by e-mailing the SEC at        
publicinfo@sec.gov or by writing to the Public Reference Section of the SEC,    
Washington, D.C. 20549-0102. Information about the Fund, including its Statement
of Additional Information, can be reviewed and copied at the S EC's Public      
Reference Room in Washington, D.C. You can get information on the Public        
Reference Room by calling the SEC at 202 942-8090.                              

WEB SITE                                                                        
www.delawareinvestments.com                                                     

E-MAIL                                                                          
service@delinvest.com                                                           

SHAREHOLDER SERVICE CENTER                                                      

800 523-1918                                                                    

Call the Shareholder Service Center:                                            
Monday to Friday, 8 a.m. to 7 p.m. Eastern time.                                

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

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

DELAPHONE SERVICE                                                               

800 362-FUND (800 362-3863)                                                     

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

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

DELAWARE DIVERSIFIED INCOME FUND SYMBOLS              CUSIP         NASDAQ      
----------------------------------------            ---------       ------      
Class A                                             246248744        DPDFX      
Class B                                             246248611        DPBFX      
Class C                                             246248595        DPCFX      
Class R                                             246248553        DPRFX      

[LOGO OF DELAWARE INVESTMENTS(SM)]

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                                              [LOGO OF DELAWARE INVESTMENTS(SM)]

FIXED INCOME                                                                    

PROSPECTUS   FEBRUARY 25, 2005                                                  

DELAWARE DIVERSIFIED INCOME FUND                      
INSTITUTIONAL CLASS                                   

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

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TABLE OF CONTENTS                                                               

FUND PROFILE                                                           PAGE  3  
Delaware Diversified Income Fund                                             3  

HOW WE MANAGE THE FUND                                                          
Our investment strategies                                              PAGE  7  
The securities we typically invest in                                        9  
The risks of investing in the Fund                                           14 

Disclosure of portfolio holdings information                                23  

WHO MANAGES THE FUND                                                   PAGE 24  
Investment manager                                                          24  
Portfolio managers                                                          24  
Who's who?                                                             PAGE 25  

ABOUT YOUR ACCOUNT                                                          27  
Investing in the Fund                                                       27  
How to buy shares                                                           28  

Fair valuation                                                              29  

How to redeem shares                                                        30  
Account minimums                                                            31  
Exchanges                                                                   31  

Frequent trading of Fund shares (market timing)                             31  

Dividends, distributions and taxes                                          33  

CERTAIN MANAGEMENT CONSIDERATIONS                                           33  

FINANCIAL HIGHLIGHTS                                                   PAGE 34  

GLOSSARY                                                               PAGE 36  

                                                                           2

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PROFILE: DELAWARE DIVERSIFIED INCOME FUND                                       

WHAT IS THE FUND'S GOAL?                                                        
Delaware Diversified Income Fund seeks maximum long-term total return,          
consistent with reasonable risk. Although the Fund will strive to achieve its   
goal, there is no assurance that it will.                                       

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?                                 
The Fund allocates its investments principally among the following three sectors
of the fixed-income securities markets: the U.S. Investment Grade Sector, the   
U.S. High-Yield Sector, and the International Sector. Under normal              
circumstances, the Fund will invest at least 80% of its net assets in fixed     
income securities (the "80% Policy"). We will determine how much of the Fund to 
allocate to each of the three sectors, based on our evaluation of economic and  
market conditions and our assessment of the returns and potential for           
appreciation that can be achieved from investments in each of the three sectors.
We will periodically reallocate the Fund's assets, as deemed necessary.         

In unusual market conditions, in order to meet redemption requests, for         
temporary defensive purposes, and pending investment, the Fund may hold a       
substantial portion of its assets in cash or short-term fixed-income            
obligations. The Fund may also use a wide range of hedging instruments,         
including options, futures contracts and options on futures contracts subject to
certain limitations.                                                            

The Fund's 80% Policy described above may be changed without shareholder        
approval. However, shareholders will be given notice at least 60 days prior to  
any such change.                                                                

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?                               
Investing in any mutual fund involves risk, including the risk that you may lose
part or all of the money you invest. The value of your investment in the Fund   
will increase and decrease according to changes in the value of the Fund's      
investments. The Fund will be affected primarily by changes in bond prices and  
currency exchange rates. Investments in high-yield, high risk or "junk" bonds   
entail certain risks, including the risk of loss of principal, which may be     
greater than the risks presented by investment grade bonds and which should be  
considered by investors contemplating an investment in the Fund. Among these    
risks are those that result from the absence of a liquid secondary market and   
the dominance in the market of institutional investors. The Fund will also be   
affected by prepayment risk due to its holdings of mortgage-backed securities.  
With prepayment risk, when homeowners prepay mortgages during periods of low    
interest rates, the Fund may be forced to re-deploy its assets in lower yielding
securities. Investments in securities of non-U.S. issuers are generally         
denominated in foreign currencies and involve certain risk and opportunity      
considerations not typically associated with investing in U.S. issuers, and     
investments in securities of companies in emerging markets present a greater    
degree of risk than tends to be the case for foreign investments in developed   
markets. If, and to the extent that, we invest in forward foreign currency      
contracts or use other investments to hedge against currency risks, the Fund    
will be subject to the special risks associated with those activities.          

For a more complete discussion of risk, please see "The risks of investing in   
the Fund" on page [__].                                                         

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

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

WHO SHOULD INVEST IN THE FUND                                                   
o    Investors with long-term financial goals.                                  
o    Investors looking for an investment that offers professional allocation    
among key types of fixed-income securities.                           
o    Investors looking for a fixed-income investment that offers potential for  
high current income and total return.                                 

WHO SHOULD NOT INVEST IN THE FUND                                               
o    Investors with short-term financial goals.                                 
o    Investors who are unwilling to own an investment whose value may fluctuate,
sometimes significantly, over the short term.                         

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HOW HAS DELAWARE DIVERSIFIED INCOME FUND PERFORMED?                             

This bar chart and table can help you evaluate the risks of investing in        
Delaware Diversified Income Fund. We show how returns for Delaware Diversified  
Income Fund have varied over the past seven calendar years, as well as average  
annual returns for one year, five year and lifetime periods. Because the        
Institutional Class of the Fund did not commence operations until to October 25,
2002, we have included performance information for Class A shares of the Fund   
for 1998, 1999, 2000, 2001 and 2002. Class A shares of the Fund are offered     
under a separate prospectus. Institutional Class shares would have had          
substantially similar annual returns as Class A shares because they represent   
interests in the same portfolio of securities. However, the returns of          
Institutional Class shares would differ from the returns of the Class A shares  
due to the higher operating expenses of Class A shares and the sales charge     
applicable to Class A shares. The Fund's past performance does not necessarily  
indicate how it will perform in the future. The Fund's returns reflect voluntary
expense caps. The returns would be lower without the voluntary caps.            

On October 28, 2002, the Fund acquired all of the assets and assumed all of the 
liabilities of the Diversified Core Fixed Income Portfolio of Delaware Pooled   
Trust (the "Predecessor Fund") which had investment objectives and policies     
identical to those of the Fund. The Fund had no operations prior to October 28, 
2002. Shareholders of the Predecessor Fund received Class A shares of the Fund  
in connection with this transaction. As a result of this transaction, Class A   
shares of the Fund assumed the performance history of the Predecessor Fund for  
periods prior to the closing date of the transaction, however, the performance  
history of the Predecessor Fund has not been restated in the bar chart and table
below to reflect the higher management and transfer agency fees borne by the    
Fund.                                                                           

The Fund bears the expense of management fees at the maximum annual rate of     
0.55% of the Fund's average daily net assets. The Predecessor Fund had a        
management fee at the annual rate of 0.43% of its average daily net assets. For 
transfer agency services, the Fund currently pays an annual dollar charge per   
account ranging from $3.00 to $19.00 (depending on the type of account), as well
as per transaction fees. By contrast, the Predecessor Fund paid a fee at the    
annual rate of 0.01% of its average daily net assets for transfer agency        
services. If these higher expenses of the Fund had been in effect for the       
Predecessor Fund, the total returns set forth in the bar chart and table below  
would have been lower for all periods.                                          

[GRAPHIC OMITTED: BAR CHART SHOWING YEAR BY YEAR TOTAL RETURN]                  

YEAR-BY-YEAR TOTAL RETURN*                                                      

1998                       10.28%                         
1999                       1.60%                          
2000                       13.12%                         
2001                       8.33%                          
2002                       10.96%                         
2003                       14.30%                         
2004                       9.74%                          

During the periods illustrated in this bar chart, the Fund's Institutional Class
highest quarterly return was 5.69% for the quarter ended June 30, 2003 and its  
lowest quarterly return was -1.88% for the quarter ended June 30, 2004.         

The maximum Class A sales charge of 4.50%, which is normally deducted when you  
purchase shares, is not reflected in the total returns in the bar chart. If this
fee was included, the returns would be less than those shown.                   

*        Year-by-year total return for 1998, 1999, 2000 and 2001 reflects Class 
   A shares. 2002 reflects a blended total return for Class A Shares
    (January 1, 2002 through October 25, 2002) and Institutional Class
         Shares (October 28, 2002 through December 31, 2002). Year-by-year total
return for 2003 and 2004 reflects Institutional Class shares. 

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                                                        [Enlarge/Download Table]


                                                          AVERAGE ANNUAL RETURNS FOR PERIODS ENDING 12/31/04 

-------------------------------------------------------------------------------------------------------------
                                                                                                LIFETIME     
                                                                                               (INCEPTION    
                                                                   1 YEAR        5 YEARS(1)   12/29/97)(2)   
-------------------------------------------------------------------------------------------------------------
                                                                                                             
Return before taxes                                                 9.74%         11.27%           9.66%     
-------------------------------------------------------------------------------------------------------------
Return after taxes on distributions                                 7.36%          8.13%           6.40%     
-------------------------------------------------------------------------------------------------------------
Return after taxes on distributions and sale of Fund shares         6.28%          7.78%           6.26%     
-------------------------------------------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index (reflects no deduction                                                  
for fees, expenses, or taxes)                                       4.34%          7.71%          6.59%(3)   
-------------------------------------------------------------------------------------------------------------

The Fund's returns are compared to the performance of the Lehman Brothers       
Aggregate Bond Index. You should remember that unlike the Fund, the index is    
unmanaged and does not reflect the costs of operating a mutual fund, such as the
costs of buying, selling and holding securities.                                

Actual after-tax returns depend on the investor's individual tax situation and  
may differ from the returns shown. After-tax returns are not relevant for shares
held in tax-deferred investment vehicles such as employer-sponsored 401(k) plans
and individual retirement accounts. The after-tax returns shown are calculated  
using the highest individual federal marginal income tax rates in effect during 
the Fund's lifetime and do not reflect the impact of state and local taxes. The 
after-tax rate used is based on the current tax characterization of the elements
of the fund's returns (e.g., qualified vs. non-qualified dividends) and may be  
different than the final tax characterization of such elements. Past            
performance, both before and after taxes, is not a guarantee of future results. 

(1)  Average annual return  reflects a blend of Class A Shares  (January 1, 2000
     through October 25, 2002) and Institutional  Class Shares (October 28, 2002
through December 31, 2004).                                           

(2)  Average annual return reflects a blend of Class A Shares (December 29, 1997
     through October 25, 2002) and Institutional  Class Shares (October 28, 2002
through December 31, 2004).                                           

(3)  Lehman  Brothers  Aggregate  Bond Index  lifetime  return is for the period
December 31, 1997 through December 31, 2004.                          

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WHAT ARE THE FUND'S FEES AND EXPENSES?                                          
You do not pay sales charges directly from your investments when you buy or sell
shares of the Institutional Class.                                              

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

ANNUAL FUND OPERATING EXPENSES are deducted from the Fund's assets.             

Management fees                                                       0.55%     
Distribution and service (12b-1) fees                                 none      
Other expenses                                                        0.34%     
Total operating expenses                                              0.89%     
Fee waivers and payments                                             (0.14)%    
Net expenses(2)                                                       0.75%     

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

1 year              $    77                                                     
3 years             $   270                                                     
5 years             $   479                                                     
10 years            $ 1,083                                                     

     (1)  Exchanges are subject to the requirements of each fund in the Delaware
          Investments family. A front-end sales charge may apply if you exchange
your shares into a fund that has a front-end sales charge.  

   (2)  The investment manager has contracted to waive fees and pay expenses
          through February 28, 2006 in order to prevent total operating expenses
          (excluding any taxes, interest, brokerage fees, extraordinary expenses
          and certain insurance costs) from exceeding 0.75% of average daily net
assets.                                                     

(3)  The Fund's actual rate of return may be greater or less than the 
       hypothetical 5% return we use here. Also, this example reflects the
net operating expenses with expense waivers for the one year
   contractual period and total operating expenses without expense
waivers for years two through ten.                          

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HOW WE MANAGE THE FUND                                                          

OUR INVESTMENT STRATEGIES                                                       
We analyze economic and market conditions, seeking to identify the securities or
market sectors that we think are the best investments for the Fund. Following   
are descriptions of how the portfolio managers pursue the Fund's investment     
goals.                                                                          

The Fund allocates its investment principally among the U.S. Investment Grade,  
U.S. High-Yield and International sectors. The relative proportion of the Fund's
assets to be allocated among these sectors is described below.                  

o    U.S. INVESTMENT GRADE SECTOR Under normal circumstances, there is no limit 
    to the amount of the Fund's total assets that will be invested in the U.S.
 investment grade sector. In managing the Fund's assets allocated to the
 investment grade sector, we will invest principally in debt obligations
issued or guaranteed by the U.S. Government, its agencies or          
    instrumentalities and by U.S. corporations. The corporate debt obligations
in which the Fund may invest include bonds, notes, debentures and     
     commercial paper of U.S. companies. The U.S. Government securities in which
 the Fund may invest include a variety of securities which are issued or
guaranteed as to the payment of principal and interest by the U.S.    
  Government, and by various agencies or instrumentalities which have been
established or sponsored by the U.S. Government.                      

  The investment grade sector of the Fund's assets may also be invested in
     mortgage-backed securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities or by government sponsored corporations.
     Other mortgage-backed securities in which the Fund may invest are issued by
certain private, non-government entities. Subject to the quality      
 limitations, the Fund may also invest in securities which are backed by
assets such as receivables on home equity and credit card loans,      
  automobile, mobile home, recreational vehicle and other loans, wholesale
dealer floor plans and leases.                                        

     Securities purchased by the Fund within this sector will be rated in one of
  the four highest rating categories or will be unrated securities that we
determine are of comparable quality.                                  

o    U.S. HIGH-YIELD SECTOR Under normal circumstances, between 5% and 50% of   
     the Fund's total assets will be allocated to the U.S. High-Yield Sector. We
     will invest the Fund's assets that are allocated to the domestic high-yield
    sector primarily in those securities having a liberal and consistent yield
   and those tending to reduce the risk of market fluctuations. The Fund may
    invest in domestic corporate debt obligations, including, notes, which may
  be convertible or non-convertible, commercial paper, units consisting of
     bonds with stock or warrants to buy stock attached, debentures, convertible
debentures, zero coupon bonds and pay-in-kind securities ("PIKs").    

    The Fund will invest in both rated and unrated bonds. The rated bonds that
     the Fund may purchase in this sector will generally be rated BB or lower by
S&P or Fitch, Ba or lower by Moody's, or similarly rated by another   
     nationally recognized statistical rating organization. Unrated bonds may be
more speculative in nature than rated bonds.                          

o    INTERNATIONAL SECTOR Under normal circumstances, between 5% and 50% of the 
Fund's total assets will be invested in the International Sector. The 
International Sector invests primarily in fixed-income securities of  
issuers organized or having a majority of their assets or deriving a  
     majority of their operating income in foreign countries. These fixed-income
securities include foreign government securities, debt obligations of 
foreign companies, and securities issued by supranational entities. A 
   supranational entity is an entity established or financially supported by
     the national governments of one or more countries to promote reconstruction
   or development. Examples of supranational entities include, among others,
  the International Bank for Reconstruction and Development (more commonly
 known as the World Bank), the European Economic Community, the European
     Investment Bank, the Inter-Development Bank and the Asian Development Bank.

The Fund may invest in securities issued in any currency and may hold foreign   
currencies. Securities of issuers within a given country may be denominated in  
the currency of another country or in multinational currency units, such as the 
Euro. The Fund may, from time to time, purchase or sell foreign currencies      
and/or engage in forward foreign currency transactions in order to expedite     
settlement of Fund transactions and to minimize currency value fluctuations.    
Currency considerations carry a special risk for a portfolio that allocates a   
significant portion of its assets to foreign securities.                        

The Fund will invest in both rated and unrated foreign securities. It may       
purchase securities of issuers in any foreign country, developed and            
underdeveloped. These investments may include direct obligations of issuers     
located in emerging markets countries and Brady Bonds. However, investments in  
emerging markets, Brady Bonds and in foreign                                    

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securities that are rated below investment grade (e.g. lower than BBB by S&P),  
or if unrated, judged to be of comparable quality, will, in the aggregate, be   
limited to no more than 5% of the Fund's total assets. In addition, the Fund may
invest in sponsored and unsponsored American Depositary Receipts, European      
Depositary Receipts, or Global Depositary Receipts. The Fund may also invest in 
zero coupon bonds and may purchase shares of other investment companies.        
Additionally, the Manager will limit non-U.S. dollar denominated securities to  
no more than 25% of net assets.                                                 

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THE SECURITIES WE TYPICALLY INVEST IN                                           
Stocks generally offer investors the potential for capital appreciation, and may
pay dividends as well.                                                          

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SECURITIES                                                                           HOW WE USE THEM                             
-------------------------------------------------------  ------------------------------------------------------------------------
                                                                                                                                 
CORPORATE BONDS: Debt obligations issued by a            The Fund may invest in bonds rated in one of the four highest rating    
corporation.                                             categories for its U.S. Investment Grade Sector, and it may invest in   
                                                         bonds rated BB or lower by S&P or Fitch and Ba or lower by Moody's for  
                                                         its U.S. High-Yield Sector and International Sector.                    

HIGH-YIELD CORPORATE BONDS: Debt obligations issued by   Emphasis is typically on those rated BB or Ba by an NRSRO.              
a corporation and rated lower than investment grade by                                                                           
a nationally recognized statistical ratings              We carefully evaluate an individual company's financial situation, its  
organization (NRSRO) such as S&P or Moody's.             management, the prospects for its industry and the technical factors    
High-yield bonds are issued by corporations that have    related to its bond offering. Our goal is to identify those companies   
lower credit quality and may have difficulty repaying    that we believe will be able to repay their debt obligations in spite of
principal and interest.                                  poor ratings. The Fund may invest in unrated bonds if we believe their  
                                                         credit quality is comparable to the rated bonds we are permitted to     
                                                         invest in. Unrated bonds may be more speculative in nature than rated   
                                                         bonds.                                                                  

MORTGAGE-BACKED SECURITIES: Fixed-income securities      The Fund may invest in mortgage-backed securities issued or guaranteed  
that represent pools of mortgages, with investors        by the U.S. government, its agencies or instrumentalities or by         
receiving principal and interest payments as the         government sponsored corporations.                                      
underlying mortgage loans are paid back. Many are                                                                                
issued and guaranteed against default by the U.S.                                                                                
government or its agencies or instrumentalities, such                                                                            
as the Federal Home Loan Mortgage Corporation, the                                                                               
Fannie Mae and the Government National Mortgage                                                                                  
Association. Others are issued by private financial                                                                              
institutions, with some fully collateralized by                                                                                  
certificates issued or guaranteed by the government or                                                                           
its agencies or instrumentalities.                                                                                               

COLLATERALIZED MORTGAGE OBLIGATIONS (CMOs) AND REAL      The Fund may invest in CMOs and REMICs. Certain CMOs and REMICs may have
ESTATE MORTGAGE INVESTMENT CONDUITS (REMICs): CMOs are   variable or floating interest rates and others may be stripped. Stripped
privately issued mortgage-backed bonds whose             mortgage securities are generally considered illiquid and to such       
underlying value is the mortgages that are collected     extent, together with any other illiquid investments, will not exceed   
into different pools according to their maturity. They   the Fund's limit on illiquid securities. In addition, subject to certain
are issued by U.S. government agencies and private       quality and collateral limitations, the Fund may invest up to 20% of its
issuers. REMICs are privately issued mortgage-backed     total assets in CMOs and REMICs issued by private entities which are not
bonds whose underlying value is a fixed pool of          collateralized by securities issued or guaranteed by the U.S.           
mortgages secured by an interest in real property.       government, its agencies or instrumentalities, so called non-agency     
Like CMOs, REMICs offer different pools.                 mortgage backed securities.                                             

ASSET-BACKED SECURITIES: Bonds or notes backed by        The Fund may invest in asset-backed securities rated in one of the four 
accounts receivables, including home equity,             highest rating categories by an NRSRO.                                  
automobile or credit loans.                                                                                                      

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SECURITIES                                                                           HOW WE USE THEM                             
-------------------------------------------------------  ------------------------------------------------------------------------
                                                                                                                                 
U.S. GOVERNMENT SECURITIES: U.S. Treasury securities     The Fund may invest in U.S. government securities for temporary purposes
are backed by the "full faith and credit" of the         or otherwise, as is consistent with its investment objectives and       
United States. Securities issued or guaranteed by        policies. These securities are issued or guaranteed as to the payment of
federal agencies and U.S. government sponsored           principal and interest by the U.S. government, or by various agencies or
instrumentalities may or may not be backed by the        instrumentalities which have been established or sponsored by the U.S.  
"full faith and credit" of the United States. In the     government.                                                             
case of securities not backed by the "full faith and                                                                             
credit" of the United States, investors in such                                                                                  
securities look principally to the agency or                                                                                     
instrumentality issuing or guaranteeing the obligation                                                                           
for ultimate repayment.                                                                                                          

FOREIGN GOVERNMENT SECURITIES: Debt issued by a          The fixed-income securities in which the Fund may invest include those  
government other than the United States or by an         issued by foreign governments.                                          
agency, instrumentality or political subdivision of                                                                              
such governments.                                                                                                                

REPURCHASE AGREEMENTS: An agreement between a buyer,     While the Fund is permitted to do so, it normally does not invest in    
such as a fund, and a seller of securities in which      repurchase agreements except to invest cash balances or for temporary   
the seller agrees to buy the securities back within a    defensive purposes. In order to enter into these repurchase agreements, 
specified time at the same price the buyer paid for      the Fund must have collateral of at least 102% of the repurchase price. 
them, plus an amount equal to an agreed upon interest    The Fund will only enter into repurchase agreements in which the        
rate. Repurchase agreements are often viewed as          collateral is comprised of U.S. government securities.                  
equivalent to cash.                                                                                                              

RESTRICTED SECURITIES: Privately placed securities       The Fund may invest in restricted securities, including securities      
whose resale is restricted under securities law.         eligible for resale without registration pursuant to Rule 144A under the
                                                         Securities Act of 1933. To the extent restricted securities are         
                                                         illiquid, the Fund will limit its investments in them in accordance with
                                                         its policy concerning illiquid securities. See "Illiquid Securities"    
                                                         below.                                                                  

ILLIQUID SECURITIES: Securities that do not have a       The Fund may invest no more than 15% of its net assets in illiquid      
ready market, and cannot be easily sold within seven     securities.                                                             
days at approximately the price that the Fund has                                                                                
valued them. Illiquid securities include repurchase                                                                              
agreements maturing in more than seven days.                                                                                     

SHORT-TERM DEBT INVESTMENTS: These instruments include   The Fund may invest in these instruments either as a means to achieve   
(1) time deposits, certificates of deposit and bankers   its investment objective or, more commonly, as temporary defensive      
acceptances issued by a U.S. commercial bank; (2)        investments or pending investment in the Fund's principal investment    
commercial paper of the highest quality rating; (3)      securities. When investing all or a significant portion of its assets in
short-term debt obligations with the highest quality     these instruments, the Fund may not be able to achieve its investment   
rating; (4) U.S. government securities; and (5)          objective.                                                              
repurchase agreements collateralized by those                                                                                    
instruments.                                                                                                                     

TIME DEPOSITS: Time deposits are non-negotiable          Time deposits maturing in more than seven days will not be purchased by 
deposits maintained in a banking institution for a       the Fund, and time deposits maturing from two business days through     
specified period of time at a stated interest rate.      seven calendar days will not exceed 15% of the total assets of the Fund.

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SECURITIES                                                                           HOW WE USE THEM                             
-------------------------------------------------------  ------------------------------------------------------------------------
                                                                                                                                 
ZERO COUPON AND PAY-IN-KIND BONDS: Zero coupon bonds     The Fund may purchase fixed-income securities, including zero coupon    
are debt obligations which do not entitle the holder     bonds and PIK bonds, consistent with its investment objective.          
to any periodic payments of interest prior to maturity                                                                           
or a specified date when the securities begin paying                                                                             
current interest, and therefore are issued and traded                                                                            
at a discount from their face amounts or par value.                                                                              
Pay-in-kind ("PIK") bonds pay interest through the                                                                               
issuance to holders of additional securities.                                                                                    

AMERICAN DEPOSITARY RECEIPTS (ADRS), EUROPEAN            The Fund may invest in sponsored and unsponsored ADRs. Such ADRs that   
DEPOSITARY RECEIPTS (EDRS), AND GLOBAL DEPOSITARY        the Fund may invest in will be those that are actively traded in the    
RECEIPTS (GDRS): ADRs are receipts issued by a U.S.      United States.                                                          
depositary (usually a U.S. bank) and EDRs and GDRs are                                                                           
receipts issued by a depositary outside of the U.S.      In conjunction with its investments in foreign securities, the Fund may 
(usually a non-U.S. bank or trust company or a foreign   also invest in sponsored and unsponsored EDRs and GDRs.                 
branch of a U.S. bank). Depositary receipts represent                                                                            
an ownership interest in an underlying security that                                                                             
is held by the depositary. Generally, the underlying                                                                             
security represented by an ADR is issued by a foreign                                                                            
issuer and the underlying security represented by an                                                                             
EDR or GDR may be issued by a foreign or U.S. issuer.                                                                            
Sponsored depositary receipts are issued jointly by                                                                              
the issuer of the underlying security and the                                                                                    
depositary, and unsponsored depositary receipts are                                                                              
issued by the depositary without the participation of                                                                            
the issuer of the underlying security. Generally, the                                                                            
holder of the depositary receipt is entitled to all                                                                              
payments of interest, dividends or capital gains that                                                                            
are made on the underlying security.                                                                                             

BRADY BONDS: These are debt securities issued under      The Fund may invest in Brady Bonds consistent with its respective       
the framework of the Brady Plan, an initiative           investment objective. We believe that economic reforms undertaken by    
announced by the U.S. Treasury Secretary Nicholas F.     countries in connection with the issuance of Brady Bonds may make the   
Brady in 1989, as a mechanism for debtor nations to      debt of countries which have issued or have announced plans to issue    
restructure their outstanding external indebtedness      Brady Bonds a viable opportunity for investment.                        
(generally, commercial bank debt).                                                                                               

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SECURITIES                                                                           HOW WE USE THEM                             
-------------------------------------------------------  ------------------------------------------------------------------------
                                                                                                                                 
FUTURES AND OPTIONS: A futures contract is a bilateral   The Fund may invest in futures, options and closing transactions related
agreement providing for the purchase and sale of a       thereto. These activities will not be entered into for speculative      
specified type and amount of a financial instrument,     purposes, but rather for hedging purposes and to facilitate the ability 
or for the making and acceptance of a cash settlement,   to quickly deploy into the market the Fund's cash, short-term debt      
at a stated time in the future for a fixed price. A      securities and other money market instruments at times when the Fund's  
call option is a short-term contract pursuant to which   assets are not fully invested. The Fund may only enter into these       
the purchaser of the call option, in return for the      transactions for hedging purposes if it is consistent with its          
premium paid, has the right to buy the security or       respective investment objective and policies. The Fund may not engage in
other financial instrument underlying the option at a    such transactions to the extent that obligations resulting from these   
specified exercise price at any time during the term     activities, in the aggregate, exceed 25% of the Fund's assets. In       
of the option. A put option is a similar contract        addition, the Fund may enter into futures contracts, purchase or sell   
which gives the purchaser of the put option, in return   options on futures contracts, and trade in options on foreign           
for a premium, the right to sell the underlying          currencies, and may enter into closing transactions with respect to such
security or other financial instrument at a specified    activities to hedge or "cross hedge" the currency risks associated with 
price during the term of the option.                     its investments. Generally, futures contracts on foreign currencies     
                                                         operate similarly to futures contracts concerning securities, and       
                                                         options on foreign currencies operate similarly to options on           
                                                         securities. See also "Foreign Currency Transactions" below.             

FOREIGN CURRENCY TRANSACTIONS: A forward foreign         Although the Fund values its assets daily in terms of U.S. dollars, it  
currency exchange contract involves an obligation to     does not intend to convert its holdings of foreign currencies into U.S. 
purchase or sell a specific currency on a fixed future   dollars on a daily basis. The Fund may, however, from time to time,     
date at a price that is set at the time of the           purchase or sell foreign currencies and/or engage in forward foreign    
contract. The future date may be any number of days      currency transactions in order to expedite settlement of Fund           
from the date of the contract as agreed by the parties   transactions and to minimize currency value fluctuations.               
involved.                                                                                                                        

INTEREST RATE SWAP AND INDEX SWAP AGREEMENTS: In an      The Fund may use interest rate swaps to adjust its sensitivity to       
interest rate swap, a fund receives payment from         interest rates by changing its duration. We may also use interest rate  
another party based on a floating interest rate in       swaps to hedge against changes in interest rates. We use index swaps to 
return for making payments based on a fixed interest     gain exposure to markets that the Fund invests in, such as the corporate
rate. An interest rate swap can also work in reverse,    bond market. We may also use index swaps as a substitute for futures,   
with a fund receiving payments based on a fixed          options or forward contracts if such contracts are not directly         
interest rate and making payments based on a floating    available to the Fund on favorable terms.                               
interest rate. In an index swap, a fund receives gains                                                                           
or incurs losses based on the total return of an         Interest rate swaps and index swaps will be considered illiquid         
index, in exchange for making fixed or floating          securities.                                                             
interest rate payments to another party.                                                                                         

The Fund may also invest in other securities. Please see the Statement of       
Additional Information for additional descriptions on these securities as well  
as those listed in the table above.                                             

LENDING SECURITIES The Fund may lend up to 25% of its assets to qualified       
brokers, dealers and institutional investors for their use in securities        
transactions. These transactions, if any, may generate additional income for the
Fund.                                                                           

BORROWING FROM BANKS The Fund may borrow money as a temporary measure for       
extraordinary purposes or to facilitate redemptions. To the extent that it does 
so, the Fund may be unable to meet its investment objective.                    

PURCHASING SECURITIES ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS The Fund may   
buy or sell securities on a when-issued or delayed delivery basis; that is,     
paying for securities before delivery or taking delivery at a later date. The   
Fund will designate cash or securities in amounts sufficient to cover its       
obligations, and will value the designated assets daily.                        

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PORTFOLIO TURNOVER We anticipate that the Fund's annual portfolio turnover will 
exceed 100% and may be considerably in excess of 200%. A portfolio turnover rate
of 100% would occur, for example, if all the securities in the fund's portfolio 
were replaced once during a period of one year. A high rate of portfolio        
turnover in any year may increase brokerage commissions paid and could result in
high amounts of realized investment gain subject to the payment of taxes by     
shareholders. The turnover rate may also be affected by cash requirements from  
redemptions and repurchases of fund shares.                                     

TEMPORARY DEFENSIVE POSITIONS For temporary defensive purposes, we may invest up
to 100% of the Fund's assets in money market instruments when the manager       
determines that market conditions warrant. We may also hold a portion of the    
Fund's assets in cash for liquidity purposes. To the extent that we do so, the  
Fund may be unable to achieve its investment objective.                         

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THE RISKS OF INVESTING IN THE FUND                                              
Investing in any mutual fund involves risk, including the risk that you may     
receive little or no return on your investment, and the risk that you may lose  
part or all of the money you invest. Before you invest in the Fund you should   
carefully evaluate the risks. Because of the nature of the Fund, you should     
consider your investment to be a long-term investment that typically provides   
the best results when held for a number of years. Following are the chief risks 
you assume when investing in the Fund. Please see the Statement of Additional   
Information for further discussion of these risks and the other risks not       
discussed here.                                                                 

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            RISKS                                    HOW WE STRIVE TO MANAGE THEM                  
-----------------------------------  --------------------------------------------------------------
                                                                                                   
MARKET RISK is the risk that all or  We maintain a long-term approach and focus on securities that 
a majority of the securities in a    we believe can continue to provide returns over an extended   
certain market-like the stock or     period of time regardless of these interim market             
bond market-will decline in value    fluctuations. Generally, we do not try to predict overall     
because of factors such as economic  market movements or trade for short-term purposes.            
conditions, future expectations or                                                                 
investor confidence.                 In evaluating the use of an index swap for the Fund, we       
                                     carefully consider how market changes could affect the swap   
Index swaps are subject to the same  and how that compares to our investing directly in the market 
market risks as the investment       the swap is intended to represent. When selecting dealers with
market or sector that the index      whom we would make interest rate or index swap agreements for 
represents. Depending on the actual  the Fund, we focus on those dealers with high quality ratings 
movements of the index and how well  and do careful credit analysis before engaging in the         
the portfolio manager forecasts      transaction.                                                  
those movements, a fund could                                                                      
experience a higher or lower return                                                                
than anticipated.                                                                                  

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INTEREST RATE RISK is the risk that  We limit the amount of the Fund's assets invested in any one  
securities, particularly bonds with  industry and in any individual security.                      
longer maturities, will decrease in                                                                
value if interest rates rise and     The Fund is subject to various interest rate risks depending  
increase in value if interest rates  upon its investment objectives and policies. We cannot        
fall. Investments in equity          eliminate that risk, but we do try to address it by monitoring
securities issued by small and       economic conditions, especially interest rate trends and their
medium sized companies, which often  potential impact on the Fund. The Fund does not try to        
borrow money to finance operations,  increase returns on its investments in debt securities by     
may also be adversely affected by    predicting and aggressively capitalizing on interest rate     
rising interest rates.               movements.                                                    

Swaps may be particularly sensitive  The Fund, by investing in swaps, is subject to additional     
to interest rate changes. Depending  interest rate risk. The Fund will not invest in interest rate 
on the actual movements of interest  or index swaps with maturities of more than two years. Each   
rates and how well the portfolio     business day we will calculate the amount the Fund must pay   
manager anticipates them, a          for any swaps it holds and will segregate enough cash or other
portfolio could experience a higher  liquid securities to cover that amount.                       
or lower return than anticipated.                                                                  
For example, if a portfolio holds                                                                  
interest rate swaps and is required                                                                
to make payments based on variable                                                                 
interest rates, it will have to                                                                    
make increased payments if interest                                                                
rates rise, which will not                                                                         
necessarily be offset by the                                                                       
fixed-rate payments it is entitled                                                                 
to receive under the swap                                                                          
agreement.                                                                                         

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CREDIT RISK is the possibility that  Our careful, credit-oriented bond selection and our commitment
a bond's issuer (or an entity that   to hold a diversified selection of high-yield bonds are       
insures the bond) will not be able   designed to manage this risk.                                 
to make timely payments of interest                                                                
and principal.                       It is likely that protracted periods of economic uncertainty  
                                     would cause increased volatility in the market prices of      
Investing in so-called "junk" or     high-yield bonds, an increase in the number of high-yield bond
"high-yield" bonds entails the risk  defaults and corresponding volatility in the Fund's net asset 
of principal loss, which may be      value.                                                        
greater than the risk involved in                                                                  
investment grade bonds. High-yield   Our holdings of high quality investment grade bonds are less  
bonds are sometimes issued by        subject to credit risk and may help to balance any credit     
companies whose earnings at the      problems experienced by individual high-yield bond issuers or 
time the bond is issued are less     foreign issuers.                                              
than the projected debt payments on                                                                
the bonds.                           When selecting dealers with whom we would make interest rate  
                                     or index swap agreements, we focus on those with high quality 
Some analysts believe a protracted   ratings and do careful credit analysis before investing.      
economic downturn would severely                                                                   
disrupt the market for high-yield                                                                  
bonds, adversely affect the value                                                                  
of outstanding bonds and adversely                                                                 
affect the ability of high-yield                                                                   
issuers to repay principal and                                                                     
interest.                                                                                          

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FOREIGN RISK is the risk that        We attempt to reduce the risks presented by such investments  
foreign securities may be adversely  by conducting world-wide fundamental research with an emphasis
affected by political instability,   on company visits. In addition, we monitor current economic   
changes in currency exchange rates,  and market conditions and trends, the political and regulatory
foreign economic conditions or       environment and the value of currencies in different countries
inadequate regulatory and            in an effort to identify the most attractive countries and    
accounting standards. In addition,   securities. Additionally, when currencies appear significantly
there is the possibility of          overvalued compared to average real exchange rates, the Fund  
expropriation, nationalization or    may hedge exposure to those currencies for defensive purposes.
confiscatory taxation, taxation of                                                                 
income earned in foreign nations or                                                                
other taxes imposed with respect to                                                                
investments in foreign nations,                                                                    
foreign exchange controls, which                                                                   
may include suspension of the                                                                      
ability to transfer currency from a                                                                
given country, and default in                                                                      
foreign government securities. As a                                                                
result of these factors, foreign                                                                   
securities markets may be less                                                                     
liquid and more volatile than U.S.                                                                 
markets and the Funds may                                                                          
experience difficulties and delays                                                                 
in converting foreign currencies                                                                   
back into U.S. dollars. Such events                                                                
may cause the value of certain                                                                     
foreign securities to fluctuate                                                                    
widely and may make it difficult to                                                                
accurately value foreign                                                                           
securities.                                                                                        

Several European countries began                                                                   
participating in the European                                                                      
Economic and Monetary Union, which                                                                 
has established a common currency                                                                  
for participating countries. This                                                                  
currency is commonly known as the                                                                  
"Euro." The long-term consequences                                                                 
of the Euro conversion for foreign                                                                 
exchange rates, interest rates and                                                                 
the value of European securities in                                                                
which the Fund may invest are                                                                      
unclear. The consequences may                                                                      
adversely affect the value and/or                                                                  
increase the volatility of                                                                         
securities held by the Fund.                                                                       

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CURRENCY RISK is the risk that the   The Fund may be affected by changes in currency rates and     
value of an investment may be        exchange control regulations and may incur costs in connection
negatively affected by changes in    with conversions between currencies. To hedge this currency   
foreign currency exchange rates.     risk associated with investments in non-U.S. dollar           
Adverse changes in exchange rates    denominated securities, the Fund which focuses on global and  
may reduce or eliminate any gains    international investments may invest in forward foreign       
produced by investments that are     currency contracts. Those activities pose special risks which 
denominated in foreign currencies    do not typically arise in connection with investments in U.S. 
and may increase losses.             securities. In addition, the Fund may engage in foreign       
                                     currency options and futures transactions.                    

EMERGING MARKETS RISK is the         The Fund may invest a portion of its assets in securities of  
possibility that the risks           issuers located in emerging markets. The Fund cannot eliminate
associated with international        these risks but will attempt to reduce these risks through    
investing will be greater in         portfolio diversification, credit analysis, and attention to  
emerging markets than in more        trends in the economy, industries and financial markets and   
developed foreign markets because,   other relevant factors.                                       
among other things, emerging                                                                       
markets may have less stable                                                                       
political and economic                                                                             
environments. In addition, in many                                                                 
emerging markets, there is                                                                         
substantially less publicly                                                                        
available information about issuers                                                                
and the information that is                                                                        
available tends to be of a lesser                                                                  
quality. Economic markets and                                                                      
structures tend to be less mature                                                                  
and diverse and the securities                                                                     
markets which are subject to less                                                                  
government regulation or                                                                           
supervision may also be smaller,                                                                   
less liquid and subject to greater                                                                 
price volatility.                                                                                  

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LOWER RATED FIXED-INCOME SECURITIES  The Fund will limit its investments in high-risk, high-yield  
(high-yield, high-risk securities),  fixed-income securities of foreign governments including, with
while generally having higher        specified limitations, Brady Bonds to 30% of its assets. The  
yields, are subject to reduced       Fund will also attempt to reduce the risk associated with its 
creditworthiness of issuers,         investment in high-yield debt securities through portfolio    
increased risks of default and a     diversification, credit analysis, attention to trends in the  
more limited and less liquid         economy, industries and financial markets, and complying with 
secondary market than higher rated   the limits on the exposure to this asset class described in   
securities. These securities are     this Prospectus.                                              
subject to greater price volatility                                                                
and risk of loss of income and                                                                     
principal than are higher rated                                                                    
securities. Lower rated and unrated                                                                
fixed-income securities tend to                                                                    
reflect short-term corporate and                                                                   
market developments to a greater                                                                   
extent than higher rated                                                                           
fixed-income securities, which                                                                     
react primarily to fluctuations in                                                                 
the general level of interest                                                                      
rates. Fixed-income securities of                                                                  
this type are considered to be of                                                                  
poor standing and primarily                                                                        
speculative. Such securities are                                                                   
subject to a substantial degree of                                                                 
credit risk.                                                                                       

LIQUIDITY RISK is the possibility    We limit the Fund's exposure to illiquid securities as        
that securities cannot be readily    described under "Additional Investment Information - Illiquid 
sold within seven days at            Securities."                                                  
approximately the price that the                                                                   
Fund values them.                    Swap agreements entered into by the Fund will be treated as   
                                     illiquid securities. However, most swap dealers will be       
The high-yield secondary market is   willing to repurchase interest rate swaps.                    
particularly susceptible to                                                                        
liquidity problems when                                                                            
institutional investors, such as                                                                   
mutual funds and other certain                                                                     
financial institutions, temporarily                                                                
stop buying bonds for regulatory,                                                                  
financial or other reasons.                                                                        

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FUTURES CONTRACTS, OPTIONS ON        The Fund may use certain options strategies or may use futures
FUTURES CONTRACTS, FORWARD           contracts and options on futures contracts. The Fund will not 
CONTRACTS, AND CERTAIN OPTIONS used  enter into futures contracts and options thereon to the extent
as investments for hedging and       that more than 5% of its assets are required as futures       
other non-speculative purposes       contract margin deposits and premiums on options and only to  
involve certain risks. For example,  the extent that obligations under such futures contracts and  
a lack of correlation between price  options thereon would not exceed 20% of the Fund's total      
changes of an option or futures      assets.                                                       
contract and the assets being                                                                      
hedged could render a Fund's         See also "Foreign Risk" and "Currency Risk" above.            
hedging strategy unsuccessful and                                                                  
could result in losses. The same                                                                   
results could occur if movements of                                                                
foreign currencies do not correlate                                                                
as expected by the investment                                                                      
advisor at a time when a Fund is                                                                   
using a hedging instrument                                                                         
denominated in one foreign currency                                                                
to protect the value of a security                                                                 
denominated in a second foreign                                                                    
currency against changes caused by                                                                 
fluctuations in the exchange rate                                                                  
for the dollar and the second                                                                      
currency. If the direction of                                                                      
securities prices, interest rates                                                                  
or foreign currency prices is                                                                      
incorrectly predicted, the Fund                                                                    
will be in a worse position than if                                                                
such transactions had not been                                                                     
entered into. In addition, since                                                                   
there can be no assurance that a                                                                   
liquid secondary market will exist                                                                 
for any contract purchased or sold,                                                                
a Fund may be required to maintain                                                                 
a position (and in the case of                                                                     
written options may be required to                                                                 
continue to hold the securities                                                                    
used as cover) until exercise or                                                                   
expiration, which could result in                                                                  
losses. Further, options and                                                                       
futures contracts on foreign                                                                       
currencies, and forward contracts,                                                                 
entail particular risks related to                                                                 
conditions affecting the underlying                                                                
currency. Over-the-counter                                                                         
transactions in options and forward                                                                
contracts also involve risks                                                                       
arising from the lack of an                                                                        
organized exchange trading                                                                         
environment.                                                                                       

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ZERO COUPON AND PAY-IN-KIND BONDS    The Fund may invest in zero coupon and pay-in-kind bonds to   
are generally considered to be more  the extent consistent with its investment objective. We cannot
interest sensitive than              eliminate the risks of zero coupon bonds, but we do try to    
income-bearing bonds, to be more     address them by monitoring economic conditions, especially    
speculative than interest-bearing    interest rate trends and their potential impact on the Fund.  
bonds, and to have certain tax                                                                     
consequences which could, under                                                                    
certain circumstances be adverse to                                                                
the Fund. For example, the Fund                                                                    
accrues, and is required to                                                                        
distribute to shareholders, income                                                                 
on its zero coupon bonds. However,                                                                 
the Fund may not receive the cash                                                                  
associated with this income until                                                                  
the bonds are sold or mature. If                                                                   
the Fund does not have sufficient                                                                  
cash to make the required                                                                          
distribution of accrued income, the                                                                
Fund could be required to sell                                                                     
other securities in its portfolio                                                                  
or to borrow to generate the cash                                                                  
required.                                                                                          

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             RISKS                                    HOW WE STRIVE TO MANAGE THEM                 
-----------------------------------  --------------------------------------------------------------
                                                                                                   
PORTFOLIO TURNOVER RATES reflect     The Fund will normally experience an annual portfolio turnover
the amount of securities that are    rate exceeding 200%.                                          
replaced from the beginning of the                                                                 
year to the end of the year by the                                                                 
Fund. The higher the amount of                                                                     
portfolio activity, the higher the                                                                 
brokerage costs and other                                                                          
transaction costs of the Fund are                                                                  
likely to be. The amount of                                                                        
portfolio activity will also affect                                                                
the amount of taxes payable by the                                                                 
Fund's shareholders that are                                                                       
subject to federal income tax, as                                                                  
well as the character (ordinary                                                                    
income vs. capital gains) of such                                                                  
tax obligations.                                                                                   

PREPAYMENT RISK is the risk that     The Fund may invest in Mortgage-Backed Securities,            
homeowners will prepay mortgages     Collateralized Mortgage Obligations (CMOs) and Real Estate    
during periods of low interest       Mortgage Investment Conduits (REMICs). The Fund takes into    
rates, forcing an investor to        consideration the likelihood of prepayment when mortgages are 
reinvest money at interest rates     selected. The Fund may look for mortgage securities that have 
that might be lower than those on    characteristics that make them less likely to be prepaid, such
the prepaid mortgage.                as low outstanding loan balances or below-market interest     
                                     rates.                                                        

TRANSACTION COSTS RISK is the risk   The Fund is subject to transaction costs risk to the extent   
that the cost of buying, selling     that its respective objective and policies permit it to       
and holding foreign securities,      invest, and it actually does invest, in foreign securities. We
including brokerage, tax and         strive to monitor transaction costs and to choose an efficient
custody costs, may be higher than    trading strategy for the Fund.                                
those involved in domestic                                                                         
transactions.                                                                                      

FOREIGN GOVERNMENT SECURITIES RISKS  The Fund attempts to reduce the risks associated with         
involve the ability of a foreign     investing in foreign governments by limiting the portion of   
government or government-related     portfolio assets that may be invested in such securities.     
issuer to make timely principal and                                                                
interest payments on its external                                                                  
debt obligations. This ability to                                                                  
make payments will be strongly                                                                     
influenced by the issuer's balance                                                                 
of payments, including export                                                                      
performance, its access to                                                                         
international credits and                                                                          
investments, fluctuations in                                                                       
interest rates and the extent of                                                                   
its foreign reserves.                                                                              

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             RISKS                                    HOW WE STRIVE TO MANAGE THEM                 
-----------------------------------  --------------------------------------------------------------
                                                                                                   
VALUATION RISK: A less liquid        We will strive to manage this risk by carefully evaluating    
secondary market as described above  individual bonds and by limiting the amount of the Fund's     
makes it more difficult for the      assets that can be allocated to privately placed high-yield   
Fund to obtain precise valuations    securities.                                                   
of the high-yield securities in its                                                                
portfolio. During periods of                                                                       
reduced liquidity, judgment plays a                                                                
greater role in valuing high-yield                                                                 
securities.                                                                                        

LEGISLATIVE AND REGULATORY RISK:     We monitor the status of regulatory and legislative proposals 
The United States Congress has from  to evaluate any possible effects they might have on the Fund's
time to time taken or considered     portfolio.                                                    
legislative actions that could                                                                     
adversely affect the high-yield                                                                    
bond market. For example,                                                                          
Congressional legislation has, with                                                                
some exceptions, generally                                                                         
prohibited federally insured                                                                       
savings and loan institutions from                                                                 
investing in high-yield securities.                                                                
Regulatory actions have also                                                                       
affected the high-yield market.                                                                    
Similar actions in the future could                                                                
reduce liquidity for high-yield                                                                    
securities, reduce the number of                                                                   
new high-yield securities being                                                                    
issued and could make it more                                                                      
difficult for the Fund to attain                                                                   
its investment objective.                                                                          

DISCLOSURE OF PORTFOLIO HOLDINGS INFORMATION                                    
A description of the Fund's policies and procedures with respect to the         
disclosure of the Fund's portfolio securities is available in the Fund's        
Statement of Additional Information and at www.delawarefunds.com.               

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WHO MANAGES THE FUND                                                            

INVESTMENT MANAGER AND SUB-ADVISOR                                              
Effective September 1, 2004, the Fund is managed by Delaware Management Company,
a series of Delaware Management Business Trust, which is an indirect, wholly    
owned subsidiary of Delaware Management Holdings, Inc. Delaware Management      
Company makes investment decisions for the Fund, manages the Fund's business    
affairs and provides daily administrative services. For these services, the     
manager is entitled to receive an aggregate fee of 0.55% of the Fund's average  
daily net assets.                                                               

Prior to September 1, 2004, the Fund was sub-advised by Delaware International  
Advisers Ltd. ("DIAL") which furnished investment recommendations, assets       
allocation advice, research and other investment services regarding foreign     
securities for the Fund. For its services to the Fund, DIAL was paid a          
sub-advisory fee equal to the fee received by the manager that is attributable  
to the foreign assets in the Fund's investment portfolio.                       

A discussion regarding the basis upon which the Fund's Board of Trustees        
approves investment advisory contracts of the Fund is available in the Fund's   
Annual Report to Shareholders for the period ending October 30, 2004.           

PORTFOLIO MANAGERS                                                              
Timothy L. Rabe, Paul Grillo and Philip R. Perkins have primary responsibility  
for making day-to-day investment decisions for the Fund. When making decisions  
for the Fund, Messrs. Rabe, Grillo and Perkins regularly consult with Ryan      
K. Brist and Stephen R. Cianci.                                                 

TIMOTHY L. RABE, Senior Vice President/Senior Portfolio Manager, received a     
bachelor's degree in finance from the University of Illinois. Prior to joining  
Delaware Investments in 2000, Mr. Rabe was a high-yield portfolio manager for   
Conseco Capital Management. Before that, Mr. Rabe worked as a tax analyst for   
The Northern Trust Company. Mr. Rabe is a CFA charterholder.                    

PAUL GRILLO, Vice President/Senior Portfolio Manager, holds a BA in Business    
Management from North Carolina State University and an MBA in Finance from Pace 
University. Prior to joining Delaware Investments in 1993, Mr. Grillo served as 
mortgage strategist and trader at the Dreyfus Corporation. He also served as    
Mortgage Strategist and Portfolio Manager at Chemical Investment Group and as   
Financial Analyst at Chemical Bank. Mr. Grillo is a CFA charterholder.          

PHILIP R. PERKINS, Senior Vice President/Senior Portfolio Manager, holds a B.A. 
from the University of Notre Dame. He joined Delaware Investments in June 2003  
from Deutsche Bank A.G., where he served as a Managing Director in Global       
Markets. He was Chief Operating Officer for the Bank's Emerging Markets         
Division, based in London. From 1998 to 2001, he was based in Moscow and        
responsible for Local Markets Trading. Prior to that, Mr. Perkins was Chief     
Executive Officer of Dinner Key Advisors Inc., a Registered Broker dealer       
founded to trade derivative mortgage backed bonds with institutional clients. He
began his career at Salomon Brothers, where he was a Mortgage/CMO trader from   
1985 to 1990.                                                                   

RYAN K. BRIST, Executive Vice President/Managing Director/Chief Investment      
Officer, Fixed Income, earned his bachelor's degree from Indiana University.    
Prior to joining Delaware Investments in August 2000, he served as a Senior     
Trader and Corporate Specialist for Conseco Capital Management's fixed-income   
group. He previously worked in oil/gas investment banking as an Analyst for Dean
Witter Reynolds in New York. He is a CFA Charterholder.                         

STEPHEN R. CIANCI, Senior Vice President/Senior Portfolio Manager, holds a BS   
and an MBA in Finance from Widener University. He joined Delaware Investments'  
Fixed Income Department in 1992 as an investment grade quantitative research    
analyst. In addition to his quantitative research responsibilities, Mr. Cianci  
also served as a mortgage-backed and asset-backed securities analyst. Mr. Cianci
is an Adjunct Professor of Finance at Widener University and a CFA              
charterholder.                                                                  

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WHO'S WHO?                                                                      

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

[GRAPHIC OMITTED: DIAGRAM SHOWING THE VARIOUS ORGANIZATIONS INVOLVED WITH       
MANAGING, ADMINISTERING, AND SERVICING THE DELAWARE INVESTMENTS FUNDS]          

                                                        [Enlarge/Download Table]
                                                                                                                  
                                                 BOARD OF TRUSTEES                                                
                                                      THE FUND                                                    
INVESTMENT MANAGER                                                                        CUSTODIAN               
Delaware Management Company                                                               JP Morgan Chase Bank    
2005 Market Street                                                                        4 Chase Metrotech Center
Philadelphia, PA 19103-7094                           THE FUND                            Brooklyn, NY 11245      

                             DISTRIBUTOR                            SERVICE AGENT                                 
                             Delaware Distributors, L.P.            Delaware Service Company, Inc.                
                             2005 Market Street                     2005 Market Street                            
                             Philadelphia, PA 19103-7094            Philadelphia, PA 19103-7094                   

                             FINANCIAL INTERMEDIARY WHOLESALER                                                    
                             Lincoln Financial Distributors, Inc.                                                 
                             2001 Market Street                                                                   
                             Philadelphia, PA 19103-7055                                                          

PORTFOLIO MANAGERS                                                              
(see page 24 for details)                                                       

SHAREHOLDERS

BOARD OF TRUSTEES A mutual fund is governed by a Board of Trustees which has    
oversight responsibility for the management of the fund's business affairs.     
Trustees establish procedures and oversee and review the performance of the     
investment manager, the distributor and others that perform services for the    
fund. Generally, at least 40% of the Board of Trustees must be independent of   
the fund's investment manager and distributor. However, the Fund relies on      
certain exemptive rules created by the SEC that require the Board of Trustees   
overseeing the Fund to be comprised of a majority of such independent trustees. 
These independent fund trustees, in particular, are advocates for shareholder   
interests.                                                                      

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

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

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

DISTRIBUTOR Most mutual funds continuously offer new shares to the public       
through distributors who are regulated as broker-dealers and are subject to NASD
Regulation, Inc. (NASDR(SM)) rules governing mutual fund sales practices.       

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FINANCIAL INTERMEDIARY WHOLESALER Pursuant to a contractual arrangement with    
Delaware Distributors, L.P., Lincoln Financial Distributors, Inc. (LFD) is      
primarily responsible for promoting the sale of Fund shares through             
broker/dealers, financial advisors and other financial intermediaries.          

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

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

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ABOUT YOUR ACCOUNT                                                              

INVESTING IN THE FUND                                                           
Institutional Class shares are available for purchase only by the following:    

o    retirement plans introduced by persons not associated with brokers or      
  dealers that are primarily engaged in the retail securities business and
rollover individual retirement accounts from such plans;              

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

o    institutional advisory accounts of the Fund's manager, or its affiliates   
     and those having client relationships with Delaware Investment Advisers, an
   affiliate of the manager, or its affiliates and their corporate sponsors,
 as well as subsidiaries and related employee benefit plans and rollover
   individual retirement accounts from such institutional advisory accounts;

o    a bank, trust company and similar financial institution investing for its  
own account or for the account of its trust customers for whom the    
 financial institution is exercising investment discretion in purchasing
    shares of the Class, except where the investment is part of a program that
 requires payment to the financial institution of a Rule 12b-1 Plan fee;

o    registered investment advisors investing on behalf of clients that consist 
solely of institutions and high net-worth individuals having at least 
 $1,000,000 entrusted to the advisor for investment purposes. Use of the
     Institutional Class shares is restricted to advisors who are not affiliated
     or associated with a broker or dealer and who derive compensation for their
services exclusively from advisory clients; and                       

o    programs sponsored by financial intermediaries where such program requires 
the purchase of Institutional Class shares.                           

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HOW TO BUY SHARES                                                               

[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]                                  

BY MAIL                                                                         
Complete an investment slip and mail it with your check, made payable to the    
fund and class of shares you wish to purchase, to Delaware Investments, 2005    
Market Street, Philadelphia, PA 19103-7094. If you are making an initial        
purchase by mail, you must include a completed investment application (or an    
appropriate retirement plan application if you are opening a retirement account)
with your check.                                                                

[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]                                

BY WIRE                                                                         
Ask your bank to wire the amount you want to invest to Bank of New York, ABA    
#021000018, Bank Account number 8900403748. Include your account number and the 
name of the fund in which you want to invest. If you are making an initial      
purchase by wire, you must call us at 800 510-4015 so we can assign you an      
account number.                                                                 

[GRAPHIC OMITTED: ILLUSTRATION OF AN EXCHANGE SYMBOL]                           

BY EXCHANGE                                                                     
You can exchange all or part of your investment in one or more funds in the     
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that you may not exchange your shares for Class B or Class C  
shares. To open an account by exchange, call your Client Services Representative
at 800 510-4015.                                                                

[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]                                     

THROUGH YOUR FINANCIAL ADVISOR                                                  
Your financial advisor can handle all the details of purchasing shares,         
including opening an account. Your advisor may charge a separate fee for this   
service.                                                                        

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ABOUT YOUR ACCOUNT (continued)                                                  

HOW TO BUY SHARES (CONTINUED)                                                   

The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receives your order before the close of regular    
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a   
business day, you will pay that day's closing share price which is based on the 
Fund's net asset value. If your order is received after the close of regular    
trading, you will pay the next business day's price. A business day is any day  
that the New York Stock Exchange is open for business. We reserve the right to  
reject any purchase order.                                                      

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

FAIR VALUATION                                                                  
When the Fund uses fair value pricing, it may take into account any factors it  
deems appropriate. The Fund may determine fair value based upon developments    
related to a specific security, current valuations of foreign stock indices (as 
reflected in U.S. futures markets) and/or U.S. sector or broader stock market   
indices. The prices of securities used by the Fund to calculate its NAV may     
differ from quoted or published prices for the same securities. Fair value      
pricing may involve subjective judgments and it is possible that the fair value 
determined for a security is materially different than the value that could be  
realized upon the sale of that security.                                        

The Fund anticipates using fair value pricing for securities primarily traded on
U.S. exchanges only under very limited circumstances, such as the early closing 
of the exchange on which a security is traded or suspension of trading in the   
security. Funds may use fair value pricing more frequently for securities       
primarily traded in non-U.S. markets because, among other things, most foreign  
markets close well before the Fund values its securities at 4:00 p.m., Eastern  
time. The earlier close of these foreign markets gives rise to the possibility  
that significant events, including broad market moves, may have occurred in the 
interim. To account for this, the Fund may frequently value many foreign equity 
securities using fair value prices based on third party vendor modeling tools to
the extent available.                                                           

Subject to the Board's oversight, the Fund's Board has delegated responsibility 
for valuing the Fund's assets to a Pricing Committee of the Manager, which      
operates under the policies and procedures approved by the Board, to value the  
Fund's assets on behalf of the Fund. The Pricing Committee values Fund assets as
described above.                                                                

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HOW TO REDEEM SHARES                                                            

[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]                                  

BY MAIL                                                                         
You can redeem your shares (sell them back to the fund) by mail by writing to:  
Delaware Investments, 2005 Market Street, Philadelphia, PA 19103-7094. All      
owners of the account must sign the request, and for redemptions of more than   
$100,000, you must include a signature guarantee for each owner. You can also   
fax your written request to 267 256-8992. Signature guarantees are also required
when redemption proceeds are going to an address other than the address of      
record on an account.                                                           

[GRAPHIC OMITTED: ILLUSTRATION OF A TELEPHONE]                                  

BY TELEPHONE                                                                    
You can redeem up to $100,000 of your shares by telephone. You may have the     
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you 
may have the proceeds sent directly to your bank by wire. Bank information must 
be on file before you request a wire redemption.                                

[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]                                

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

[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]                                     

THROUGH YOUR FINANCIAL ADVISOR                                                  
Your financial advisor can handle all the details of redeeming your shares. Your
advisor may charge a separate fee for this service.                             

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ABOUT YOUR ACCOUNT (continued)                                                  

HOW TO REDEEM SHARES (cont.)                                                    

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

When you send us a properly completed request to redeem or exchange shares, and 
we or an authorized agent receives the request before the close of regular      
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time), you   
will receive the net asset value next determined after we receive your request. 
If we receive your request after the close of regular trading on the New York   
Stock Exchange, you will receive the net asset value determined on the next     
business day. You may have to pay taxes on the proceeds from your sale of       
shares. We will send you a check, normally the next business day, but no later  
than seven days after we receive your request to sell your shares. If you       
purchased your shares by check, we will wait until your check has cleared, which
can take up to 15 days, before we send your redemption proceeds.                

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

EXCHANGES                                                                       
You can exchange all or part of your shares for shares of the same class in     
another Delaware Investments Fund. If you exchange shares to a fund that has a  
sales charge you will pay any applicable sales charges on your new shares. You  
don't pay sales charges on shares that are acquired through the reinvestment of 
dividends. You may have to pay taxes on your exchange. When you exchange shares,
you are purchasing shares in another fund so you should be sure to get a copy of
the fund's prospectus and read it carefully before buying shares through an     
exchange. You may not exchange your shares for Class B and Class C shares of the
funds in the Delaware Investments family. We may refuse the purchase side of any
exchange request, if, in the Investment Manager's judgment, the Fund would be   
unable to invest effectively in accordance with its investment objectives and   
policies or would otherwise potentially be adversely affected. In particular, a 
pattern of exchanges that coincide with a "market timing" strategy may be       
refused.                                                                        

FREQUENT TRADING OF FUND SHARES (MARKET TIMING)                                 

The Fund discourages purchases by market timers and purchase orders (including  
the purchase side of exchange orders) by shareholders identified as market      
timers may be rejected. The Fund's Board of Trustees has adopted policies and   
procedures designed to detect, deter and prevent trading activity detrimental to
the Fund and its shareholders, such as market timing. The Fund will consider    
anyone who follows a pattern of market timing in any fund in the Delaware       
Investments Family of Funds or the Optimum Funds Trust to be a market timer and 
may consider anyone who has followed a similar pattern of market timing at an   
unaffiliated fund family to be a market timer.                                  

Market timing of a fund occurs when investors make consecutive rapid short-term 
"roundtrips", or in other words, purchases into a fund followed quickly by      
redemptions out of that fund. A short-term roundtrip is any redemption of fund  
shares within 20 business days of a purchase of that fund's shares. If you make 
a second such short-term roundtrip in a fund within the same calendar quarter of
a previous short-term roundtrip in that fund, you may be considered a market    
timer. The purchase and sale of fund shares through the use of the exchange     
privilege are also included in determining whether market timing has occurred.  
The Fund also reserves the right to consider other trading patterns as market   
timing.                                                                         

Your ability to use the Fund's exchange privilege may be limited if you are     
identified as a market timer. If you are identified as a market timer, we will  
execute the redemption side of your exchange order but may refuse the purchase  
side of your exchange order. The Fund reserves the right to restrict, reject or 
cancel, without prior notice, any purchase or exchange order for any reason,    
including any purchase or exchange order accepted by any shareholder's financial
intermediary or in any omnibus-type account. Transactions placed in violation of
the Fund's market timing policy are not necessarily deemed accepted by the Fund 
and may be cancelled or revoked by the Fund on the next business day following  
receipt by the Fund.                                                            

However, sales of Fund shares back to a Fund or redemptions will continue to be 
permitted in accordance with the terms of the Fund's current Prospectus. This   
may result in an undesirable situation where a shareholder with an account      
closed to new purchases could be faced with a costly redemption of Fund shares  
if, for example, these shares have declined in value, the shareholder recently  
paid a front-end sales charge or the shares are subject to a CDSC, or           

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the sale results in adverse tax consequences to the shareholder. To avoid this  
risk, a shareholder should carefully monitor the purchases, sales, and exchanges
of Fund shares and avoid frequent trading in Fund shares.                       

The Fund reserves the right to modify this policy, including any monitoring     
procedures and the procedures to close accounts to new purchases established    
from time to time to effectuate this policy, at any time without notice. Though 
the implementation of this policy involves judgments that are inherently        
subjective and involves some selectivity in their application, we seek to make  
judgments and applications that are consistent with the interests of the Fund's 
shareholders. While we will seek to take actions that will detect market timing,
we cannot represent that such trading activity can be completely eliminated.    

RISKS OF MARKET TIMING                                                          

By realizing profits through short-term trading, shareholders that engage in    
rapid purchases and sales or exchanges of the Fund's shares dilute the value of 
shares held by long-term shareholders. Volatility resulting from excessive      
purchases and sales or exchanges of Fund shares, especially involving large     
dollar amounts, may disrupt efficient portfolio management. In particular, a    
Fund may have difficulty implementing its long-term investment strategies if it 
is forced to maintain a higher level of its assets in cash to accommodate       
significant short-term trading activity. Excessive purchases and sales or       
exchanges of a Fund's shares may force the Fund to sell portfolio securities at 
inopportune times to raise cash to accommodate short-term trading activity. In  
addition, a Fund may incur increased expenses if one or more shareholders engage
in excessive or short-term trading. For example, a Fund may be forced to        
liquidate investments as a result of short-term trading and incur increased     
brokerage costs and realization of taxable capital gains without attaining any  
investment advantage. All of these factors may adversely affect Fund            
performance.                                                                    

A Fund that invests significantly in foreign securities may be particularly     
susceptible to short-term trading strategies. This is because foreign securities
are typically traded on markets that close well before the time a Fund          
calculates its NAV at 4:00 p.m. Eastern time, which gives rise to the           
possibility that developments may have occurred in the interim that would affect
the value of these securities. The time zone differences among international    
stock markets can allow a shareholder engaging in a short-term trading strategy 
to exploit differences in Fund share prices that are based on closing prices of 
foreign securities established some time before the Fund calculates its own     
share price. Any Fund that invests in securities that are, among other things,  
thinly traded, traded infrequently, or relatively illiquid has the risk that the
current market price for the securities may not accurately reflect current      
market values. A shareholder may seek to engage in short-term trading to take   
advantage of these pricing differences. Funds that may be adversely affected by 
such arbitrage include, in particular, funds that significantly invest in small 
cap securities, technology and other specific industry sector securities, and in
certain fixed-income securities, such as high yield bonds, asset-backed         
securities, or municipal bonds.                                                 

TRANSACTION MONITORING PROCEDURES                                               

The Fund, through its transfer agent, maintains surveillance procedures designed
to detect excessive or short-term trading in Fund shares. This monitoring       
process involves several factors, which includes scrutinizing transactions in   
Fund shares for transactions in violation of the Fund's market timing policy or 
other patterns of short-term or excessive trading. For purposes of these        
transaction monitoring procedures, the Funds may consider trading activity in   
multiple accounts under common ownership, control, or influence. Trading        
activity identified by either, or a combination, of these factors, or as a      
result of any other information available at the time, will be evaluated to     
determine whether such activity might constitute excessive or short-term        
trading. These procedures may be modified from time to time, as necessary or    
appropriate to improve the detection of excessive or short-term trading or to   
address specific circumstances, such as for certain retirement plans, to conform
to plan exchange limits or U.S. Department of Labor regulations, or for certain 
automated or pre-established exchange, asset allocation or dollar cost averaging
programs, or omnibus account arrangements.                                      

Omnibus account arrangements are common forms of holding shares of the Funds,   
particularly among certain brokers, dealers, and other financial intermediaries,
including sponsors of retirement plans and variable insurance products. The     
Funds seek to apply their monitoring procedures to these omnibus account        
arrangements and to the individual participant level in such accounts. In       
efforts to discourage market timers in such accounts the Funds may consider     
enforcement against market timers at the participant level and at the omnibus   
level, up to and including termination of the omnibus account.                  

LIMITATIONS ON ABILITY TO DETECT AND CURTAIL MARKET TIMING                      

Shareholders seeking to engage in market timing may employ a variety of         
strategies to avoid detection and, despite the efforts of the Fund and its      
agents to detect market timing in Fund shares, there is no guarantee that the   
Fund will be able to identify these shareholders or curtail their trading       
practices. In particular, the Fund may not be able to detect                    

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market timing in Fund shares attributable to a particular investor who effects  
purchase and/or exchange activity in Fund shares through omnibus accounts. Also,
multiple tiers of these entities may exist, each utilizing an omnibus account   
arrangement, which may further compound the difficulty of detecting excessive or
short duration trading activity in Fund shares.                                 

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              
Dividends, if any, are declared daily and paid monthly. Capital gains, if any,  
are paid annually. We automatically reinvest all dividends and any capital      
gains, unless you direct us to do otherwise.                                    

In addition, in order to satisfy certain distribution requirements of the Tax   
Reform Act of 1986, the Fund may declare special year-end dividend and capital  
gains distributions during November and December to shareholders of record on a 
date in such month. Such distributions, if received by shareholders by January, 
are deemed to have been paid by the Fund and received by shareholders on the    
earlier of the date paid or December 31 of the prior year.                      

The tax status of your dividends from the Fund is the same whether you reinvest 
your dividends or receive them in cash.                                         

Distributions from the Fund's long-term capital gains are taxable as capital    
gains, while distributions from short-term capital gains and net investment     
income are generally taxable as ordinary income. The tax rate on capital gains  
is less than the tax rate on ordinary income.                                   

You also may be subject to state and local taxes on distributions. Tax laws are 
subject to change, so we urge you to consult your tax advisor about your        
particular tax situation and how it might be affected by current tax law.       

Any capital gains may be taxable at different rates depending on the length of  
time the Fund held the assets.                                                  

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

CERTAIN MANAGEMENT CONSIDERATIONS                                               

INVESTMENTS BY FUND OF FUNDS AND INVESTMENT VEHICLES THAT OPERATE SIMILARLY TO  
FUNDS OF FUNDS                                                                  

The Fund accepts investments from funds of funds, including those within        
Delaware Investments family, and investment vehicles that operate similarly to  
funds of funds, such as 529 plans. A "529 Plan" is a college savings program    
that operates under section 529 of the Internal Revenue Code. From time to time,
the Fund may experience large investments or redemptions due to allocations or  
rebalancings by these funds of funds and/or similar investment vehicles. While  
it is impossible to predict the overall impact of these transactions over time, 
there could be adverse effects on portfolio management. For example, the Fund   
may be required to sell securities or invest cash at times when it would not    
otherwise do so. These transactions could also have tax consequences if sales of
securities result in gains, and could also increase transaction costs or        
portfolio turnover. The manager will monitor transactions by the funds of funds 
and/or similar investment vehicles and will attempt to minimize any adverse     
effects on the Fund and funds of funds and/or similar investment vehicle as a   
result of these transactions.                                                   

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FINANCIAL HIGHLIGHTS                                                            

THE FINANCIAL HIGHLIGHTS TABLE is intended to help you understand the Fund's    
financial performance. All "per share" information reflects financial results   
for a single Fund share. This information has been audited by Ernst & Young LLP,
whose report, along with the Fund's financial statements, is included in the    
Fund's annual report, which is available upon request by calling 800 523-1918.  

                                                        [Enlarge/Download Table]

                                                                            YEAR ENDED 
                                                                                 10/31 
 DELAWARE DIVERSIFIED INCOME FUND                                    2004         2003 
-------------------------------------------------------------  ----------   ---------- 
                                                                                       
Net asset value, beginning of period                           $    8.600   $    8.960 

INCOME (LOSS) FROM INVESTMENT OPERATIONS:                                              
Net investment income(1)                                            0.399        0.395 
Net realized and unrealized gain (loss) on investments and                             
foreign currencies                                                  0.439        0.806 
                                                               ----------   ---------- 
Total from investment operations                                    0.838        1.201 
                                                               ----------   ---------- 

LESS DIVIDENDS AND DISTRIBUTIONS FROM:                                                 
Net investment income                                              (0.455)      (1.287)
                                                               ----------   ---------- 
Net realized gain on investments                                   (0.053)      (0.274)
                                                               ----------   ---------- 
Total dividends and distributions                                  (0.508)      (1.561)
                                                               ----------   ---------- 

NET ASSET VALUE, END OF PERIOD                                 $    8.930   $    8.600 
                                                               ==========   ========== 

TOTAL RETURN(2)                                                     10.05%       15.10%

RATIOS AND SUPPLEMENTAL DATA:                                                          
Net assets, end of period (000 omitted)                        $    6,194   $      567 
Ratio of expenses to average net assets                              0.77%        0.75%
Ratio of expenses to average net assets prior to expense                               
 limitations and expenses paid indirectly                            0.89%        1.30%
Ratio of net investment income to average net assets                 4.58%        4.76%
Ratio of net investment income to average net assets prior to                          
 expense limitation and expenses paid indirectly                     4.46%        4.21%
Portfolio turnover                                                    452%         620%

(1)  The average shares outstanding method has been applied for per share       
information.                                                          
(2)  Total investment return is based on the change in net asset value of a     
share during the period and assumes reinvestment of dividends and     
     distributions at net asset value and does not reflect the impact of a sales
  charge. Total investment return reflects a waiver and payment of fees by
   the manager. Performance would have been lower had the expense limitation
not been in effect.                                                   

As of October 31, 2002, the Delaware Diversified Income Fund Institutional Class
had one share outstanding representing the initial seed purchase. Shareholder   
data for this class is not disclosed because management does not believe it is  
meaningful.                                                                     

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HOW TO READ THE FINANCIAL HIGHLIGHTS                                            

NET INVESTMENT INCOME (LOSS)                                                    
Net investment income (loss) includes dividend and interest income earned from a
fund's investments; it is after expenses have been deducted.                    

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                          
A realized gain occurs when we sell an investment at a profit, while a realized 
loss occurs when we sell an investment at a loss. When an investment increases  
or decreases in value but we do not sell it, we record an unrealized gain or    
loss. The amount of realized gain per share, if any, that we pay to shareholders
would be listed under "Less dividends and distributions from - Net realized gain
on investments."                                                                

NET ASSET VALUE (NAV)                                                           
This is the value of a mutual fund share, calculated by dividing the net assets 
by the number of shares outstanding.                                            

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

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

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

RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS                     
We determine this ratio by dividing net investment income by average net assets.

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

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HOW TO USE THIS GLOSSARY                                                        
The glossary includes definitions of investment terms, many of which are used   
throughout the Prospectus. If you would like to know the meaning of an          
investment term that is not explained in the text please check the glossary.    

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

AVERAGE MATURITY                                                                
An average of when the individual bonds and other debt securities held in a     
portfolio will mature.                                                          

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

BOND RATINGS                                                                    
Independent evaluations of creditworthiness, ranging from Aaa/AAA (highest      
quality) to D (lowest quality). Bonds rated Baa/BBB or better are considered    
investment grade. See also Nationally recognized statistical ratings            
organization.                                                                   

CAPITAL                                                                         
The amount of money you invest.                                                 

CAPITAL APPRECIATION                                                            
An increase in the value of an investment.                                      

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

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

COMPOUNDING                                                                     
Earnings on an investment's previous earnings.                                  

CONSUMER PRICE INDEX (CPI)                                                      
Measurement of U.S. inflation; represents the price of a basket of commonly     
purchased goods.                                                                

CORPORATE BOND                                                                  
A debt security issued by a corporation. See Bond.                              

COST BASIS                                                                      
The original purchase price of an investment, used in determining capital gains 
and losses.                                                                     

DEPRECIATION                                                                    
A decline in an investment's value.                                             

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

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DIVIDEND DISTRIBUTION                                                           
Payments to mutual fund shareholders of dividends passed along from the fund's  
portfolio of securities.                                                        

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

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

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

GOVERNMENT SECURITIES                                                           
Securities issued by U.S. government or its agencies. They include Treasuries as
well as agency-backed securities such as Fannie Maes.                           

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

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

MANAGEMENT FEE                                                                  
The amount paid by a mutual fund to the investment advisor for management       
services, expressed as an annual percentage of the fund's average daily net     
assets.                                                                         

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

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

NASD REGULATION, INC. (NASDR(SM))                                               
The independent subsidiary of the National Association of Securities Dealers,   
Inc. responsible for regulating the securities industry.                        

NATIONALLY RECOGNIZED STATISTICAL RATINGS ORGANIZATION  (NRSRO)                 
A company that assesses the credit quality of bonds, commercial paper, preferred
and common stocks and municipal short-term issues, rating the probability that  
the issuer of the debt will meet the scheduled interest payments and repay the  
principal. Ratings are published by such companies as Moody's Investors Service,
Inc. (Moody's), Standard & Poor's (S&P) and Fitch, Inc. (Fitch).                

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

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NET ASSETS                                                                      
Net assets for purposes of a Fund's 80% Policy means the total value of all     
assets in the Fund's portfolio, minus any liabilities, plus the amount of the   
Fund's borrowings, if any, for investment purposes.                             

PREFERRED STOCK                                                                 
Preferred stock has preference over common stock in the payment of dividends and
liquidation of assets. Preferred stocks also often pay dividends at a fixed rate
and are sometimes convertible into common stock.                                

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

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

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

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

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

S&P 500 COMPOSITE STOCK PRICE INDEX                                             
The S&P 500 Composite Stock Price Index; an unmanaged index of 500 widely held  
common stocks that is often used to represent performance of the U.S. stock     
market.                                                                         

SEC (SECURITIES AND EXCHANGE COMMISSION)                                        
Federal agency established by Congress to administer the laws governing the     
securities industry, including mutual fund companies.                           

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

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

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

STATEMENT OF ADDITIONAL INFORMATION (SAI)                                       
The document serving as "Part B" of a fund's prospectus that provides more      
detailed information about the fund's organization, investments, policies and   
risks.                                                                          

STOCK                                                                           
An investment that represents a share of ownership (equity) in a corporation.   
Stocks are often referred to as common stocks or equities.                      

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

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

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DELAWARE DIVERSIFIED INCOME FUND                                                

Additional information about the Fund's investments is available in the Fund's  
annual and semi-annual reports to shareholders. In the Fund's shareholder       
reports, you will find a discussion of the market conditions and investment     
strategies that significantly affected the Fund's performance during the report 
period. You can find more detailed information about the Fund in the current    
Statement of Additional Information, which we have filed electronically with the
Securities and Exchange Commission (SEC) and which is legally a part of this    
Prospectus. If you want a free copy of the Statement of Additional Information, 
the annual or semi-annual report, or if you have any questions about investing  
in the Fund, you can write to us at 2005 Market Street, Philadelphia, PA        
19103-7094, or call toll-free 800 510-4015. You may also obtain additional      
information about the Fund from your financial advisor.                         

You can find reports and other information about the Fund on the EDGAR Database 
on the SEC web site (http://www.sec.gov). You can also get copies of this       
information, after payment of a duplicating fee, be e-mailing the SEC at        
publicinfo@sec.gov or by writing to the Public Reference Section of the SEC,    
Washington, D.C. 20549-0102. Information about the Fund, including its Statement
of Additional Information, can be reviewed and copied at the SEC's Public       
Reference Room in Washington, D.C. You can get information on the Public        
Reference Room by calling the SEC at 202 942-8090.                              

WEB SITE                                                                        
www.delawareinvestments.com                                                     

E-MAIL                                                                          
service@delinvest.com                                                           

CLIENT SERVICES REPRESENTATIVE                                                  

800 510-4015                                                                    

DELAPHONE SERVICE                                                               

800 362-FUND (800 362-3863)                                                     

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

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

DELAWARE DIVERSIFIED INCOME FUND SYMBOLS            CUSIP              NASDAQ   
----------------------------------------          --------             ------   
Institutional Class                               246248587             DPFFX   

[LOGO OF DELAWARE INVESTMENTS(SM)]

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                                              [LOGO OF DELAWARE INVESTMENTS(SM)]

GROWTH EQUITY                                                                   

PROSPECTUS  FEBRUARY 25, 2005                                                   

--------------------------------------------------------------------------------
DELAWARE U.S. GROWTH FUND                               
CLASS A o CLASS B o CLASS C o CLASS R                   

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

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TABLE OF CONTENTS                                                               

FUND PROFILE                                                             PAGE  3
Delaware U.S. Growth Fund                                                      3

HOW WE MANAGE THE FUND PAGE                                                    7
Our investment strategies                                                      7
The securities we typically invest in                                          8
The risks of investing in the Fund                                            10
Disclosure of portfolio holdings information                                  12

WHO MANAGES THE FUND                                                     PAGE 13
Investment manager                                                            13
Portfolio managers                                                            13
Who's who?                                                                    14

ABOUT YOUR ACCOUNT                                                       PAGE 16
Investing in the Fund                                                         16
Choosing a share class                                                        16
How to reduce your sales charge                                               20
How to buy shares                                                             21
Fair valuation                                                                22
Retirement plans                                                              22
How to redeem shares                                                          23
Account minimums                                                              24
Special services                                                              25
Frequent trading of Fund shares (market timing)                               26
Dividends, distributions and taxes                                            28

CERTAIN MANAGEMENT CONSIDERATIONS                                        PAGE 29

FINANCIAL HIGHLIGHTS                                                     PAGE 30

GLOSSARY                                                                 PAGE 33

                                                                               2

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PROFILE: DELAWARE U.S. GROWTH FUND                                              

WHAT IS THE FUND'S GOAL?                                                        
Delaware U.S. Growth Fund seeks maximum capital appreciation by investing in    
companies of all sizes which have low dividend yields, strong balance sheets and
high expected earnings growth rates relative to their industry. Although the    
Fund will strive to meet its investment goal, there is no assurance that it     
will.                                                                           

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?                                 
We invest primarily in common stocks. Our goal is to identify companies whose   
earnings are expected to grow faster than the U.S. economy in general. We look  
for stocks with low dividend yields, strong balance sheets and high expected    
earnings growth rates as compared to other companies in the same industry.      
Whether companies provide dividend income and how much income they provide will 
not be a primary factor in the Fund's selection decisions. We may also invest up
to 20% of the Fund's assets in debt securities and bonds. We may also invest in 
convertible bonds, preferred stock and convertible preferred stocks, provided   
that these instruments, when aggregated with the Fund's investments in debt     
securities and bonds, do not exceed 35% of the Fund's assets.                   

Under normal circumstances, the Fund will invest at least 80% of its net assets 
in U.S. investments. This policy is not a fundamental investment policy and can 
be changed without shareholder approval. However, shareholders will be given    
notice at least 60 days prior to any such change.                               

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?                               
Investing in any mutual fund involves risk, including the risk that you may lose
part or all of the money you invest. Over time, the value of your investment in 
the Fund will increase and decrease according to changes in the value of the    
securities in the Fund's portfolio. This Fund will be particularly affected by  
declines in stock prices, which tend to fluctuate more than bond prices. Stock  
prices may be negatively affected by a drop in the stock market or poor         
performance in specific companies or industries. Stocks of companies with high  
growth expectations may be more susceptible to price declines if they do not    
meet those high expectations.                                                   

For a more complete discussion of risk, please see "The risks of investing in   
the Fund" on page [__].                                                         

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

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

WHO SHOULD INVEST IN THE FUND                                                   
o    Investors with long-term financial goals.                                  
o    Investors looking for capital growth potential.                            
o    Investors looking for a fund that can be a complement to income-producing  
or value-oriented investments.                                        

WHO SHOULD NOT INVEST IN THE FUND                                               
o    Investors with short-term financial goals.                                 
o    Investors who are unwilling to accept share prices that may fluctuate,     
sometimes significantly, over the short term.                         
o    Investors whose primary goal is to receive current income.                 

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HOW HAS DELAWARE U.S. GROWTH FUND PERFORMED?                                    

THIS BAR CHART AND TABLE can help you evaluate the risks of investing in the    
Fund. We show how returns for the Fund's Class A shares have varied over the    
past ten calendar years, as well as average annual returns of all shares for    
one-year, five-year and ten-year or lifetime periods, as applicable. The Fund's 
past performance does not necessarily indicate how it will perform in the       
future. The Fund's returns reflect expense caps. The returns would be lower     
without the caps.                                                               

[GRAPHIC OMITTED: BAR CHART SHOWING YEAR BY YEAR TOTAL RETURN (CLASS A)]        

YEAR-BY-YEAR TOTAL RETURN (Class A)                                             

1995                   23.94%                                   
1996                   19.56%                                   
1997                   30.93%                                   
1998                   29.57%                                   
1999                   40.34%                                   
2000                   -7.60%                                   
2001                  -24.36%                                   
2002                  -29.01%                                   
2003                   23.28%                                   
2004                    3.01%                                   

During the periods illustrated in this bar chart, the Fund's highest quarterly  
return was 30.56% for the quarter ended December 31, 1999 and its lowest        
quarterly return was -21.01% for the quarter ended March 31, 2001.              

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

                              AVERAGE ANNUAL RETURNS FOR PERIODS ENDING 12/31/04

                                                                [Download Table]


                                                                           10 YEARS 
                                                                              OR    
                                                       1 YEAR   5 YEARS   LIFETIME**
                                                       ------   -------   ----------
                                                                                    
Class A return before taxes                             -2.92%    -9.90%    7.68%   
Class A return after taxes on distributions             -2.92%    -9.94%    5.89%   
Class A return after taxes on distributions                                         
 and sale of Fund shares                                -1.90%    -8.12%    5.77%   
Class B (if redeemed) return before taxes*              -1.58%    -9.86%    7.69%   
Class C (if redeemed) return before taxes*               1.32%    -9.46%    7.59%   
Class R (if redeemed) return before taxes*               2.84%      N/A     8.88%   
S&P 500 Index                                                                       
 (reflects no deduction for fees, expenses, or taxes)   10.87%     2.30%   12.07%   

The Fund's returns are compared to the performance of the S&P 500 Index. You    
should remember that unlike the Fund, the index is unmanaged and does not       
reflect the costs of operating a mutual fund, such as the costs of buying,      
selling and holding securities. Maximum sales charges are included in the Fund  
returns above.                                                                  

After-tax performance is presented only for Class A shares of the Fund. The     
after-tax returns for other Fund classes may vary. Actual after-tax returns     
depend on the investor's individual tax situation and may differ from the       
returns shown. After-tax returns are not relevant for shares held in            
tax-deferred investment vehicles such as employer-sponsored 401(k) plans and    
individual retirement accounts. The after-tax returns shown are calculated using
the highest individual federal marginal income tax rates in effect during the   
Fund's lifetime and do not reflect the impact of state and local taxes. The     
after-tax rate used is based on the current tax characterization of the elements
of the fund's returns (e.g., qualified vs. non-qualified dividends) and may be  
different than the final tax characterization of such elements. Past            
performance, both before and after taxes, is not a guarantee of future results. 

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*    Total returns assume redemption of shares at end of period. If shares were 
   not redeemed, the returns before taxes for Class B would be 2.42%, -9.46%
   and 7.69% for the one-year, five-year and ten-year periods, respectively.
    If shares were not redeemed, the returns before taxes for Class C would be
   2.32%, -9.46% and 7.59% for the one-year, five-year and ten-year periods,
respectively.                                                         
**   Lifetime returns are shown if the Fund or Class existed for less than 10   
   years. Inception dates for Class A, Class B, Class C shares were December
   3, 1993, March 29, 1994, May 23, 1994 and June 2, 2003, respectively. The
  ten-year returns for Class B shares reflect conversion to Class A shares
     after eight years. S&P 500 Index returns are for Class A's ten-year period.
     S&P 500 Index reports returns on a monthly basis. Index returns for Class R
lifetime was 10.37%.                                                  

WHAT ARE THE FUND'S FEES AND EXPENSES?                                          

SALES CHARGES are fees paid directly from your investments when you buy or sell 
shares of the Fund.                                                             

                                                        [Enlarge/Download Table]

CLASS                                                    A            B             C             R    
----------------------------------------------------  --------     --------      --------      --------
                                                                                                       
Maximum sales charge (load) imposed on purchases as       5.75%        none          none          none
 a percentage of offering price                                                                        
Maximum contingent deferred sales charge (load) as a      none(1)      4.00%(2)      1.00%(3)      none
 percentage of original purchase price or redemption                                                   
 price, whichever is lower                                                                             
Maximum sales charge (load) imposed on reinvested         none         none          none          none
 dividends                                                                                             
Redemption fees                                           none         none          none          none
Exchange fees(4)                                          none         none          none          none

Annual fund operating expenses are deducted from the Fund's assets.             

                                                        [Enlarge/Download Table]

CLASS                                                    A          B          C          R      
----------------------------------------------------  --------   --------   --------   --------  
                                                                                                 
Management fees                                           0.65%      0.65%      0.65%      0.65% 
Distribution and service (12b-1) fees(5)                  0.35%      1.00%      1.00%      0.60% 
Other expenses(6)                                         0.84%      0.84%      0.84%      0.84% 
Total operating expenses                                  1.84%      2.49%      2.49%      2.09% 
Fee waivers and payments(7)                              (0.44)%    (0.39)%    (0.39)%    (0.39)%
Net expenses                                              1.40%      2.10%      2.10%      1.70% 

This example is intended to help you compare the cost of investing in the Fund  
to the cost of investing in other mutual funds with similar investment          
objectives. We show the cumulative amount of Fund expenses on a hypothetical    
investment of $10,000 with an annual 5% return over the time shown.(8) This is  
an example only, and does not represent future expenses, which may be greater or
less than those shown here.                                                     

                                                                [Download Table]

CLASS(9)     A         B            B            C             C            R    
--------  --------  --------  --------------  --------  --------------   --------
                               (IF REDEEMED)              (IF REDEEMED)          
                                                                                 
1 year    $    709  $    213  $          613  $    213  $          313   $    173
3 years   $  1,080  $    738  $        1,013  $    738  $          738   $    617
5 years   $  1,475  $  1,291  $        1,516  $  1,291  $        1,291   $  1,088
10 years  $  2,576  $  2,636  $        2,636  $  2,797  $        2,797   $  2,390

    (1)  A purchase of Class A shares of $1 million or more may be made at net
   asset value. However, if you buy the shares through a financial
        advisor who is paid a commission, a contingent deferred sales charge
will                                                        

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      apply to redemptions made within two years of purchase. Additional
     Class A purchase options that involve a contingent deferred sales
          charge may be permitted from time to time and will be disclosed in the
Prospectus if they are available.                           
     (2)  If you redeem Class B shares during the first year after you buy them,
   you will pay a contingent deferred sales charge of 4.00%, which
          declines to 3.25% during the second year, 2.75% during the third year,
         2.25% during the fourth and fifth years, 1.50% during the sixth year,
and 0% thereafter.                                          
   (3)  Class C shares redeemed within one year of purchase are subject to a
1% contingent deferred sales charge.                        
     (4)  Exchanges are subject to the requirements of each fund in the Delaware
          Investments family. A front-end sales charge may apply if you exchange
your shares into a fund that has a front-end sales charge.  

  (5)  Class A shares are subject to a 12b-1 fee of 0.35% of average daily
         net assets and Class B and Class C shares are each subject to a 12b-1
        fee of 1.00% of average daily net assets. Class R shares are subject
   to a 12b-1 fee of 0.60% of average daily net assets. The Fund's
    distributor has contracted to limit the Class A shares 12b-1 fee
        through February 28, 2006 to no more than 0.30% of average daily net
assets.                                                     

   (6)  Other expenses have been restated to reflect an expected decrease in
   other expenses in the current fiscal year due to a reduction in
        transfer agency costs associated with servicing retirement accounts.

   (7)  The investment manager has contracted to waive fees and pay expenses
          through February 28, 2006 in order to prevent total operating expenses
 (excluding any taxes, interest, brokerage fees, extraordinary
          expenses, 12b-1 fees and certain insurance costs) from exceeding 1.10%
of average daily net assets.                                

(8)  The Fund's actual rate of return may be greater or less than the 
     hypothetical 5% return we use here. This example reflects the net
        operating expenses with expense waivers for the one-year contractual
       period and the total operating expenses without expense waivers for
years two through 10.                                       

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

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HOW WE MANAGE THE FUND                                                          

OUR INVESTMENT STRATEGIES                                                       
We research individual companies and analyze economic and market conditions,    
seeking to identify the securities or market sectors that we think are the best 
investments for the Fund. Following are descriptions of how the portfolio       
management team pursues the Fund's investment goals.                            

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

Delaware U.S. Growth Fund seeks to maximize capital appreciation. We invest     
primarily in common stocks and though we have the flexibility to invest in      
companies of all sizes, we generally focus on medium and large-sized companies. 
Our goal is to own companies with the potential to grow earnings faster than the
U.S. economy in general. We look for companies that have:                       

o    low dividend yields;                                                       
o    strong balance sheets; and                                                 
o    high expected earnings growth rates relative to their industry.            

There are a number of catalysts that might increase a company's potential for   
accelerated earnings growth. Our disciplined, research-intensive selection      
process is designed to identify earnings catalysts such as:                     

o    management changes;                                                        
o    new products;                                                              
o    structural changes in the economy; or                                      
o    corporate restructurings and turnaround situations.                        

We maintain a diversified portfolio representing a number of different          
industries. Such an approach helps to minimize the impact that any one security 
or industry could have on the portfolio if it were to experience a period of    
slow or declining earnings growth.                                              

Because our objective is capital appreciation, the amount of dividend income    
that a stock provides is only an incidental consideration for us.               

Under normal circumstances, the Fund will invest at least 80% of its net assets 
in U.S. investments. This policy is not a fundamental investment policy and can 
be changed without shareholder approval. However, shareholders will be given    
notice at least 60 days prior to any such change.                               

The Fund's investment objective is non-fundamental. This means that the Board of
Trustees may change the objective without obtaining shareholder approval. If the
objective were changed, we would notify shareholders before the change in the   
objective became effective.                                                     

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THE SECURITIES WE TYPICALLY INVEST IN                                           
Stocks generally offer investors the potential for capital appreciation, and may
pay dividends as well.                                                          

                                                        [Enlarge/Download Table]

SECURITIES                                                                           HOW WE USE THEM                      
------------------------------------------------------------  ------------------------------------------------------------
                                                                                DELAWARE U.S. GROWTH FUND                 
                                                              ------------------------------------------------------------
                                                                                                                          
COMMON STOCKS: Securities that represent shares of ownership  Generally, we invest 85% to 100% of the Fund's net assets   
in a corporation. Stockholders participate in the             in common stock of companies that we think have             
corporation's profits and losses, proportionate to the        appreciation potential. We may invest in companies of all   
number of shares they own.                                    sizes, but typically focus on medium and large-size         
                                                              companies.                                                  

FOREIGN SECURITIES AND AMERICAN DEPOSITARY RECEIPTS:          The Fund may invest up to 20% of its assets in securities of
Securities of foreign entities issued directly or, in the     foreign issuers. Such foreign securities may be traded on a 
case of American Depositary Receipts (ADRs), through a U.S.   foreign exchange, or they may be in the form of American    
bank. ADRs represent a bank's holding of a stated number of   Depositary Receipts (ADRs). Direct ownership of foreign     
shares of a foreign corporation. An ADR entitles the holder   securities will typically not be a significant part of our  
to all dividends and capital gains earned by the underlying   strategy. We may, however own ADRs when we think they offer 
foreign shares. ADRs are bought and sold in the same way as   greater appreciation potential than domestic stocks.        
U.S. securities.                                                                                                          

REPURCHASE AGREEMENTS: An agreement between a buyer of        Typically, we use repurchase agreements as a short-term     
securities, such as the Fund, and a seller of securities, in  investment for the Fund's cash position. In order to enter  
which the seller agrees to buy the securities back within a   into these repurchase agreements, the Fund must have        
specified time at the same price the buyer paid for them,     collateral of 102% of the repurchase price. The Fund would  
plus an amount equal to an agreed upon interest rate.         only enter into repurchase agreements in which the          
Repurchase agreements are often viewed as equivalent to       collateral is comprised of U.S. government securities.      
cash.                                                                                                                     

RESTRICTED SECURITIES: Privately placed securities whose      We may invest in privately placed securities including those
resale is restricted under securities law.                    that are eligible for resale only among certain             
                                                              institutional buyers without registration, which are        
                                                              commonly known as Rule 144A Securities. Restricted          
                                                              securities that are determined to be illiquid may not exceed
                                                              the Fund's 10% limit on illiquid securities, which is       
                                                              described below.                                            

ILLIQUID SECURITIES: Securities that do not have a ready      We may invest up to 10% of net assets in illiquid           
market, and cannot be easily sold within seven days at        securities.                                                 
approximately the price that a fund has valued them.                                                                      

FIXED-INCOME SECURITIES: Securities that may include debt     We may invest up to 20% of the Fund's assets in debt        
securities, bonds, convertible bonds, as well as,             securities and bonds. We may also invest up to 10% of this  
non-investment grade fixed-income securities.                 portion in non-investment grade bonds if we believe that    
                                                              doing so would help us to meet the Fund's objective. We may 
                                                              also invest in convertible bonds, preferred stocks and      
                                                              convertible preferred stock, provided that these            
                                                              investments, when aggregated with the Fund's investments in 
                                                              debt securities and bonds, do not exceed 35% of the Fund's  
                                                              assets.                                                     

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                                                        [Enlarge/Download Table]

SECURITIES                                                                           HOW WE USE THEM                      
------------------------------------------------------------  ------------------------------------------------------------
                                                                                DELAWARE U.S. GROWTH FUND                 
                                                              ------------------------------------------------------------
                                                                                                                          
OPTIONS AND FUTURES: Options represent a right to buy or      If we have stocks that appreciated in price, we may want to 
sell a security or group of securities at an agreed upon      protect those gains when we anticipate adverse conditions.  
price at a future date. The purchaser of an option may or     We might use options or futures to neutralize the effect of 
may not choose to go through with the transaction.            any anticipated price declines, without selling the         
                                                              security. We might also use options or futures to gain      
                                                              exposure to a particular market segment without purchasing  
                                                              individual securities in that segment, particularly if we   
                                                              had excess cash that we wanted to invest quickly.           

Writing a call option on a security obligates the owner of                                                                
the security to sell it at an agreed upon price on an agreed                                                              
upon date (usually no more than nine months in the future.)   We might use covered call options if we believe that doing  
The owner of the security receives a premium payment from     so would help the Fund to meet its investment objective.    
the purchaser of the call, but if the security appreciates                                                                
to a price greater than the agreed upon selling price, the    Use of these strategies can increase the operating costs of 
fund would lose out on those gains. A call option written by  the Fund and can lead to loss of principal.                 
the Fund is "covered" if the Fund owns the security                                                                       
underlying the option or has an absolute and immediate right                                                              
to acquire that security without additional cash                                                                          
consideration.                                                                                                            

Futures contracts are agreements for the purchase or sale of                                                              
securities at a specified price, on a specified date. Unlike                                                              
an option, a futures contract must be executed unless it is                                                               
sold before the settlement date.                                                                                          

Options and futures are generally considered to be                                                                        
derivative securities.                                                                                                    

The Fund may also invest in other securities, including preferred stock and U.S.
government securities. Please see the Statement of Additional Information for   
additional descriptions on these securities as well as those listed in the table
above.                                                                          

LENDING SECURITIES The Fund may lend up to one-third of its assets to qualified 
brokers, dealers and institutional investors for their use in securities        
transactions. These transactions, if any, may generate additional income for the
Fund.                                                                           

BORROWING FROM BANKS The Fund may borrow money as a temporary measure for       
extraordinary purposes or to facilitate redemptions. To the extent that it does 
so, the Fund may be unable to meet its investment objective.                    

PURCHASING SECURITIES ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS The Fund may   
buy or sell securities on a when-issued or delayed delivery basis; that is,     
paying for securities before delivery or taking delivery at a later date. The   
Fund will designate cash or securities in amounts sufficient to cover its       
obligations, and will value the designated assets daily.                        

PORTFOLIO TURNOVER We anticipate that the Fund's annual portfolio turnover may  
be greater than 100%. A portfolio turnover rate of 100% would occur, for        
example, if all the securities in the fund's portfolio were replaced once during
a period of one year. A high rate of portfolio turnover in any year may increase
brokerage commissions paid and could result in high amounts of realized         
investment gain subject to the payment of taxes by shareholders. The turnover   
rate may also be affected by cash requirements from redemptions and repurchases 
of fund shares.                                                                 

TEMPORARY DEFENSIVE POSITIONS For temporary defensive purposes, we may invest up
to 100% of the Fund's assets in money market instruments when the manager       
determines that market conditions warrant. We may also hold a portion of the    
Fund's assets in cash for liquidity purposes. To the extent that we do so, the  
Fund may be unable to achieve its investment objective.                         

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THE RISKS OF INVESTING IN THE FUND                                              
Investing in any mutual fund involves risk, including the risk that you may     
receive little or no return on your investment, and the risk that you may lose  
part or all of the money you invest. Before you invest in the Fund, you should  
carefully evaluate the risks. Because of the nature of the Fund, you should     
consider your investment to be a long-term investment that typically provides   
the best results when held for a number of years. Following are the chief risks 
you assume when investing in the Fund. Please see the Statement of Additional   
Information for further discussion of these risks and other risks not discussed 
here.                                                                           

                                                        [Enlarge/Download Table]

                            RISKS                                             HOW WE STRIVE TO MANAGE THEM                
------------------------------------------------------------  ------------------------------------------------------------
                                                                                DELAWARE U.S. GROWTH FUND                 
                                                              ------------------------------------------------------------
                                                                                                                          
MARKET RISK is the risk that all or a majority of the         We maintain a long-term investment approach and focus on    
securities in a certain market -- like the stock or bond      stocks we believe can appreciate over an extended time frame
market -- will decline in value because of factors such as    regardless of interim market fluctuations. We do not try to 
economic conditions, future expectations or investor          predict overall stock market movements and generally do not 
confidence.                                                   trade for short-term purposes.                              

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

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

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FOREIGN RISK is the risk that foreign securities may be       We attempt to reduce the risks presented by such investments
adversely affected by political instability, changes in       by conducting world-wide fundamental research with an       
currency exchange rates, foreign economic conditions or       emphasis on company visits. In addition, we monitor current 
inadequate regulatory and accounting standards. In addition,  economic and market conditions and trends, the political and
there is the possibility of expropriation, nationalization    regulatory environment and the value of currencies in       
or confiscatory taxation, taxation of income earned in        different countries in an effort to identify the most       
foreign nations or other taxes imposed with respect to        attractive countries and securities. Additionally, when     
investments in foreign nations, foreign exchange controls,    currencies appear significantly overvalued compared to      
which may include suspension of the ability to transfer       average real exchange rates, the Fund may hedge exposure to 
currency from a given country, and default in foreign         those currencies for defensive purposes.                    
government securities. As a result of these factors, foreign                                                              
securities markets may be less liquid and more volatile than                                                              
U.S. markets and the Funds may experience difficulties and                                                                
delays in converting foreign currencies back into U.S.                                                                    
dollars. Such events may cause the value of certain foreign                                                               
securities to fluctuate widely and may make it difficult to                                                               
accurately value foreign securities.                                                                                      

Several European countries began participating in the                                                                     
European Economic and Monetary Union, which has established                                                               
a common currency for participating countries. This currency                                                              
is commonly known as the "Euro." The long-term consequences                                                               
of the Euro conversion for foreign exchange rates, interest                                                               
rates and the value of European securities in which the Fund                                                              
may invest are unclear. The consequences may adversely                                                                    
affect the value and/or increase the volatility of                                                                        
securities held by the Fund.                                                                                              

LIQUIDITY RISK is the possibility that securities cannot be   We limit exposure to illiquid securities.                   
readily sold within seven days at approximately the price                                                                 
that a fund has valued them.                                                                                              

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                            RISKS                                             HOW WE STRIVE TO MANAGE THEM                
------------------------------------------------------------  ------------------------------------------------------------
                                                                                DELAWARE U.S. GROWTH FUND                 
                                                              ------------------------------------------------------------
                                                                                                                          
CREDIT RISK is the possibility that a bond's issuer (or an    Fixed-income securities are not typically a significant     
entity that insures the bond) will be unable to make timely   component of our strategy. However, when we do invest in    
payments of interest and principal. Bonds rated below         fixed-income securities, we will not hold more than 10% of  
investment grade are particularly subject to this risk.       net assets in high-yield, non-investment grade bonds. This  
                                                              limitation, combined with our careful, credit-oriented bond 
                                                              selection and our commitment to hold a diversified selection
                                                              of high-yield bonds are designed to manage this risk.       

FUTURES AND OPTIONS RISK is the possibility that a fund may   We will not use futures and options for speculative reasons.
experience a loss if it employs an options or futures         We may use options and futures to protect gains in the      
strategy related to a security or a market index and that     portfolio without actually selling a security. We may also  
security or index moves in the opposite direction from what   use options and futures to quickly invest excess cash so    
the manager anticipated. Futures and options also involve     that the portfolio is generally fully invested.             
additional expenses, which could reduce any benefit or                                                                    
increase any loss that a fund gains from using the strategy.                                                              

PORTFOLIO TURNOVER RATES reflect the amount of securities     The Fund will normally experience an annual portfolio       
that are replaced from the beginning of the year to the end   turnover rate exceeding 100%, but this rate is not expected 
of the year by the Fund. The higher the amount of portfolio   to exceed 200%.                                             
activity, the higher the brokerage costs and other                                                                        
transaction costs of the Fund are likely to be. The amount                                                                
of portfolio activity will also affect the amount of taxes                                                                
payable by the Fund's shareholders that are subject to                                                                    
federal income tax, as well as the character (ordinary                                                                    
income vs. capital gains) of such tax obligations.                                                                        


DISCLOSURE OF PORTFOLIO HOLDINGS INFORMATION                                    
A description of the Fund's policies and procedures with respect to the         
disclosure of the Fund's portfolio securities is available in the Fund's        
Statement of Additional Information and at www.delawarefunds.com.               

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WHO MANAGES THE FUND                                                            

INVESTMENT MANAGER                                                              
The Fund is managed by Delaware Management Company, a series of Delaware        
Management Business Trust, which is an indirect, wholly owned subsidiary of     
Delaware Management Holdings, Inc. Delaware Management Company makes investment 
decisions for the Fund, manages the Fund's business affairs and provides daily  
administrative services. For their services to the Fund, the manager was paid an
aggregate fee of 0% of average daily net assets for the last fiscal year.       

PORTFOLIO MANAGERS                                                              
Gerald S. Frey has primary responsibility for making day-to-day investment      
decisions for Delaware U.S. Growth Fund. Mr. Frey has been part of the growth   
team that has managed the Fund since 2001. In making investment decisions for   
the Fund, Mr. Frey regularly consults with Marshall T. Bassett, John A. Heffern,
Jeffrey W. Hynoski, Steven T. Lampe, Matthew Todorow and Lori P. Wachs.         

GERALD S. FREY, Managing Director/Chief Investment Officer, Growth Investing,   
has 24 years' experience in the money management business and holds a BA in     
Economics from Bloomsburg University and attended Wilkes College and New York   
University. Prior to joining Delaware Investments in 1996, Mr. Frey was a Senior
Director with Morgan Grenfell Capital Management in New York.                   

MARSHALL T. BASSETT, Senior Vice President/Senior Portfolio Manager, holds a    
bachelor's degree and an MBA from Duke University. Prior to joining Delaware    
Investments in 1997, he served as Vice President in Morgan Stanley Asset        
Management's Emerging Growth Group, where he analyzed small growth companies and
as a trust officer at Sovran Bank and Trust Company.                            

JOHN A. HEFFERN, Senior Vice President/Portfolio Manager, holds a bachelor's    
degree and an MBA from the University of North Carolina at Chapel Hill. He      
joined Delaware Investments in 1997. Previously, he was a Senior Vice President,
Equity Research at NatWest Securities Corporation's Specialty Finance Services  
unit and a Principal and Senior Regional Bank Analyst at Alex. Brown & Sons.    

JEFFREY W. HYNOSKI, Vice President/Portfolio Manager, joined Delaware           
Investments in 1998. Previously, he served as a Vice President at Bessemer Trust
Company in the mid and large capitalization growth group. Prior to that, Mr.    
Hynoski held positions at Lord Abbett & Co. and Cowen Asset Management. Mr.     
Hynoski holds a BS in Finance from the University of Delaware and an MBA from   
Pace University.                                                                

STEVEN T. LAMPE, Vice President/Portfolio Manager, received a bachelor's degree 
in Economics and an MBA with a concentration in Finance from the University of  
Pennsylvania's Wharton School. He joined Delaware Investments in 1995. He       
previously served as a manager at Price Waterhouse, specializing in financial   
services firms. Mr. Lampe is a Certified Public Accountant.                     

MATTHEW TODOROW, Vice President/Portfolio Manager, holds a BBA from Temple      
University and an MBA from the University of Georgia's Terry College of         
Business. Prior to joining Delaware Investments in 2003, he served as Executive 
Director for Morgan Stanley Investment Management and as Portfolio Manager for  
the Small/Mid Cap Group. Prior to that, he held positions at Keeton Capital     
Management.                                                                     

LORI P. WACHS, Vice President/Portfolio Manager, joined Delaware Investments in 
1992 from Goldman Sachs, where she was an equity analyst for two years. She is a
graduate of the University of Pennsylvania's Wharton School, where she majored  
in Finance and Oriental Studies.                                                

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WHO'S WHO?                                                                      
This diagram shows the various organizations involved with managing,            
administering and servicing the Delaware Investments Funds.                     

[GRAPHIC OMITTED: DIAGRAM SHOWING THE VARIOUS ORGANIZATIONS INVOLVED WITH       
MANAGING, ADMINISTERING, AND SERVICING THE DELAWARE INVESTMENTS FUNDS]          

                                                        [Enlarge/Download Table]

                                                     BOARD OF TRUSTEES                                                     
                                                                                                                           
INVESTMENT MANAGER                                                                                 CUSTODIAN               
Delaware Management Company                                                                        JP Morgan Chase Bank    
2005 Market Street                                        THE FUND                                 4 Chase Metrotech Center
Philadelphia, PA 19103-7094                                                                        Brooklyn, NY 11245      

                             DISTRIBUTOR                            SERVICE AGENT                                          
                             Delaware Distributors, L.P.            Delaware Service Company, Inc.                         
                             2005 Market Street                     2005 Market Street                                     
                             Philadelphia, PA 19103-7094            Philadelphia, PA 19103-7094                            

                             FINANCIAL INTERMEDIARY WHOLESALER                                                             
                             Lincoln Financial Distributors, Inc.                                                          
                             2001 Market Street                                                                            
                             Philadelphia, PA 19103-7055                                                                   
PORTFOLIO MANAGERS                                                                                                         
(see page 13 for details)                                                                                                  

FINANCIAL ADVISORS

SHAREHOLDERS

BOARD OF TRUSTEES A mutual fund is governed by a Board of Trustees which has    
oversight responsibility for the management of the fund's business affairs.     
Trustees establish procedures and oversee and review the performance of the     
investment manager, the distributor and others that perform services for the    
fund. Generally, at least 40% of the Board of Trustees must be independent of   
the fund's investment manager and distributor. However, the Delaware U.S. Growth
Fund relies on certain exemptive rules created by the SEC that require the Board
of Trustees overseeing the Fund to be comprised of a majority of such           
independent trustees. These independent fund trustees, in particular, are       
advocates for shareholder interests.                                            

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

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

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

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DISTRIBUTOR Most mutual funds continuously offer new shares to the public       
through distributors who are regulated as broker/dealers and are subject to NASD
Regulation, Inc. (NASDR(SM)) rules governing mutual fund sales practices.       

FINANCIAL INTERMEDIARY WHOLESALER Pursuant to a contractual arrangement with    
Delaware Distributors, L.P., Lincoln Financial Distributors, Inc. (LFD) is      
primarily responsible for promoting the sale of Fund shares through             
broker/dealers, financial advisors and other financial intermediaries.          

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

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

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

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ABOUT YOUR ACCOUNT                                                              

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

CHOOSING A SHARE CLASS                                                          
CLASS A                                                                         

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

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

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

     o    Class A shares are also subject to an annual 12b-1 fee no greater than
      0.35% (currently, waived not to exceed 0.30%) of average daily net
      assets, which is lower than the 12b-1 fee for Class B, Class C and
Class R shares.                                             

o    Class A shares generally are not subject to a contingent deferred
       sales charge except in the limited circumstances noted in the table
below.                                                      

o    Class A shares generally are not available for purchase by anyone
qualified to purchase Class R shares.                       

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CLASS A SALES CHARGES                                                           

The following sales charge as a percentage of the amount invested is the maximum
percentage of the amount invested rounded to the nearest hundredth. The actual  
percentage will vary on the amount invested, rounding and the then-current NAV. 
Similarly, the actual sales charge as a percentage of offering price may be     
different due to the amount invested, rounding and the then-current offering    
price may be greater or lesser than the percentage shown.                       

                             SALES CHARGE AS % OF   SALES CHARGE AS % OF
AMOUNT OF PURCHASE            OFFERING PRICE        AMOUNT INVESTED*
------------------------------   --------------------   --------------------    
Less than $50,000               5.75%                   6.54%     
$50,000 but under $100,000           4.75%                   5.41%          
$100,000 but under $250,000          3.75%                   4.31%          
$250,000 but under $500,000          2.50%                   3.00%          
$500,000 but under $1 million         2.00%                   2.44%           

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

                             SALES CHARGE AS % OF   SALES CHARGE AS % OF
AMOUNT OF PURCHASE            OFFERING PRICE        AMOUNT INVESTED*
------------------------------   --------------------   --------------------    
$1,000,000 up to $5 million          none                   none            
Next $20 million up to                                                  
$25 million                  none                   none    
Amount over $25 million            none                   none          

CLASS B                                                                         

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

     o    If you redeem Class B shares during the first year after you buy them,
       the shares will be subject to a contingent deferred sales charge of
          4.00%. The contingent deferred sales charge is 3.25% during the second
        year, 2.75% during the third year, 2.25% during the fourth and fifth
years, 1.50% during the sixth year, and 0% thereafter.      

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

   o    For approximately eight years after you buy your Class B shares, the
    shares are subject to annual 12b-1 fees no greater than 1.00% of
         average daily net assets, of which 0.25% are service fees paid to the
         distributor, dealers or others for providing services and maintaining
shareholder accounts.                                       

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

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

o    You may purchase only up to $100,000 of Class B shares at any one
          time. The limitation on maximum purchases varies for retirement plans.

CLASS C                                                                         

  o    Class C shares have no up-front sales charge, so the full amount of
  your purchase is invested in the Fund. However, you will pay a
       contingent deferred sales charge of 1.00% if you redeem your shares
within 12 months after you buy them.                        

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

o    Class C shares are subject to an annual 12b-1 fee no greater than
      1.00% of average daily net assets, of which 0.25% are service fees
         paid to the distributor, dealers or others for providing services and
maintaining shareholder accounts.                           

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

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

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

CLASS R                                                                         

  o    Class R shares have no up-front sales charge, so the full amount of
          your purchase is invested in a fund. Class R shares are not subject to
a contingent deferred sales charge.                         

o    Class R shares are subject to an annual 12b-1 fee no greater than
        0.60% of average daily net assets, which is lower than the 12b-1 fee
for Class B and Class C shares.                             

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

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

o    Class R shares generally are available only to (i) qualified and 
          non-qualified plan shareholders covering multiple employees (including
         401(k), 401(a), 457, and non-custodial 403(b) plans, as well as other
       non-qualified deferred compensation plans) with assets (at the time
        shares are considered for purchase) of $10 million or less; and (ii)
   to IRA rollovers from plans maintained on Delaware's retirement
          recordkeeping system that are offering Class R shares to participants.

Except as noted above, no other IRA accounts are eligible for Class R shares    
(e.g., no SIMPLE IRA's SEP-IRA's, SAR-SEP IRA's, Roth IRA's, etc.). For purposes
of determining plan asset levels, affiliated plans may be combined at the       
request of the plan sponsor.                                                    

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DEALER COMPENSATION                                                             

Your financial advisor that sells you shares of the Fund may be eligible to     
receive the following amounts as compensation for your investment in the Fund.  
These amounts are paid by the distributor to the securities dealer with whom    
your financial advisor is associated.                                           

                   CLASS A*   CLASS B**   CLASS C***   CLASS R****
                   --------   ---------   ----------   -----------
COMMISSION (%)                   -        4.00%        1.00%            -       
Investment up to $49,999      5.00%          -            -             -       
$50,000 - $99,999             4.00%          -            -             -       
$100,000 - $249,999           3.00%          -            -             -       
$250,000 - $499,999           2.00%          -            -             -       
$500,000 - $999,999           1.60%          -            -             -       
$1,000,000 - $4,999,999       1.00%          -            -             -       
$5,000,000 - $24,999,999      0.50%          -            -             -       
$25,000,000 +                 0.25%          -            -             -       
12B-1 FEE TO DEALER           0.30%       0.25%        1.00%         0.60%      

* On sales of Class A shares, the Distributor re-allows to your securities      
dealer a portion of the front-end sales charge depending upon the amount you    
invested. Your securities dealer is eligible to receive up to 0.30% 12b-1 fee   
applicable to Class A shares, however the Distributor has contracted to limit   
this amount to 0.30% through February 28, 2006.                                 

** On sales of Class B shares, the Distributor pays your securities dealer an   
up-front commission of 4.00%. Your securities dealer also may be eligible to    
receive a 12b-1 of up to 0.25% from the date of purchase. After approximately   
eight years, Class B shares automatically convert into Class A shares and       
dealers may then be eligible to receive the 0.30% 12b-1 fee applicable to       
Class                                                                           
A.                                                                              

*** On sales of Class C shares, the Distributor pays your securities dealer an  
up-front commission of 1.00%. The up-front commission includes an advance of the
first year's 12b-1 service fee of up to 0.25%. During the first 12 months, the  
Distributor retains the full 1.00% 12b-1 fee to partially offset the up-front   
commission and the prepaid 0.25% service fee advanced at the time of purchase.  
Starting in the 13th month, your securities dealer may be eligible to receive   
the full 1.00% 12b-1 fee applicable to Class C.                                 

**** On sales of Class R shares, the Distributor does not pay your securities   
dealer an up-front commission. Your securities dealer may be eligible to receive
a 12b-1 of up to 0.60% from the date of purchase.                               

Any account holding Class A shares as of June 1, 2003 (the date Class R shares  
were made available) continues to be eligible to purchase Class A shares after  
that date. Any account holding Class R shares is not eligible to purchase Class 
A shares.                                                                       

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

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ABOUT YOUR ACCOUNT (CONTINUED)                                                  

HOW TO REDUCE YOUR SALES CHARGE                                                 
We offer a number of ways to reduce or eliminate the sales charge on shares.    
Please refer to the Statement of Additional Information for detailed information
and eligibility requirements. You can also get additional information from your 
financial advisor. You or your financial advisor must notify us at the time you 
purchase shares if you are eligible for any of these programs. You may also need
to provide information to your financial advisor or the Fund in order to qualify
for a reduction in sales charges, such as your other Delaware Fund holdings and 
the names and holdings of qualifying members. Class R shares have no up-front   
sales charge.                                                                   

                                                        [Enlarge/Download Table]

                                                                                      SHARE CLASS                       
                                                            ------------------------------------------------------------
      PROGRAM                      HOW IT WORKS                   A                        B                      C     
----------------------  ----------------------------------  -------------   --------------------------------------------
                                                                                                                        
Letter of Intent        Through a Letter of Intent you           X          Although the Letter of Intent and Rights    
                        agree to invest a certain amount                    of Accumulation do not apply to the         
                        in Delaware Investments Funds                       purchase of Class B and Class C shares,     
                        (except money market funds with no                  you can combine your purchase of Class A    
                        sales charge) over a 13-month                       shares with your purchase of Class B and    
                        period to qualify for reduced                       Class C shares to fulfill your Letter of    
                        front-end sales charges.                            Intent or qualify for Rights of             
                                                                            Accumulation.                               

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

Reinvestment of         Up to 12 months after you redeem    For Class A,    For Class B, your account         Not       
Redeemed Shares         shares, you can reinvest the        you will not    will be credited with the         available.
                        proceeds without paying a sales     have to pay     contingent deferred sales                   
                        charge as noted to the right.       an additional   charge you previously paid                  
                                                            front-end       on the amount you are                       
                                                            sales charge.   reinvesting. Your schedule                  
                                                                            for contingent deferred                     
                                                                            sales charges and conversion                
                                                                            to Class A will not start                   
                                                                            over again, it will pick up                 
                                                                            from the point at which you                 
                                                                            redeemed your shares.                       

SIMPLE IRA, SEP IRA,    These investment plans may qualify       X          There is no reduction in sales charges      
SARSEP, Prototype       for reduced sales charges by                        for Class B or Class C shares for group     
Profit Sharing,         combining the purchases of all                      purchases by retirement plans.              
Pension, 401(k),        members of the group. Members of                                                                
SIMPLE 401(k),          these groups may also qualify to                                                                
403(b)(7), and 457      purchase shares without a                                                                       
Retirement Plans        front-end sales charge and may                                                                  
                        qualify for a waiver of any                                                                     
                        contingent deferred sales charges.                                                              

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HOW TO BUY SHARES                                                               

[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]                                     

THROUGH YOUR FINANCIAL ADVISOR                                                  
Your financial advisor can handle all the details of purchasing shares,         
including opening an account. Your advisor may charge a separate fee for this   
service.                                                                        

[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]                                  

BY MAIL                                                                         
Complete an investment slip and mail it with your check, made payable to the    
fund and class of shares you wish to purchase, to Delaware Investments, 2005    
Market Street, Philadelphia, PA 19103-7094. If you are making an initial        
purchase by mail, you must include a completed investment application (or an    
appropriate retirement plan application if you are opening a retirement account)
with your check.                                                                

[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]                                

BY WIRE                                                                         
Ask your bank to wire the amount you want to invest to Bank of New York, ABA    
#021000018, Bank Account number 8900403748. Include your account number and the 
name of the fund in which you want to invest. If you are making an initial      
purchase by wire, you must call us so we can assign you an account number.      

[GRAPHIC OMITTED: ILLUSTRATION OF AN EXCHANGE SYMBOL]                           

BY EXCHANGE                                                                     
You can exchange all or part of your investment in one or more funds in the     
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that under most circumstances you are allowed to exchange only
between like classes of shares. To open an account by exchange, call the        
Shareholder Service Center at 800 523-1918.                                     

[GRAPHIC OMITTED: ILLUSTRATION OF A KEYPAD]                                     

THROUGH AUTOMATED SHAREHOLDER SERVICES                                          
You can purchase or exchange shares through Delaphone, our automated telephone  
service, or through our web site, www.delawareinvestments.com. For more         
information about how to sign up for these services, call our Shareholder       
Service Center at 800 523-1918.                                                 

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ABOUT YOUR ACCOUNT (continued)                                                  

HOW TO BUY SHARES (continued)                                                   

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

The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receives your order before the close of regular    
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a   
business day, you will pay that day's closing share price which is based on the 
Fund's net asset value. If your order is received after the close of regular    
trading, you will pay the next business day's price. A business day is any day  
that the New York Stock Exchange is open for business. We reserve the right to  
reject any purchase order. In particular, we reserve the right to reject any    
specific purchase order for any person whose transaction seem to follow a market
timing pattern.                                                                 

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

FAIR VALUATION                                                                  
When the Fund uses fair value pricing, it may take into account any factors it  
deems appropriate. The Fund may determine fair value based upon developments    
related to a specific security, current valuations of foreign stock indices (as 
reflected in U.S. futures markets) and/or U.S. sector or broader stock market   
indices. The prices of securities used by the Fund to calculate its NAV may     
differ from quoted or published prices for the same securities. Fair value      
pricing may involve subjective judgments and it is possible that the fair value 
determined for a security is materially different than the value that could be  
realized upon the sale of that security.                                        

The Fund anticipates using fair value pricing for securities primarily traded on
U.S. exchanges only under very limited circumstances, such as the early closing 
of the exchange on which a security is traded or suspension of trading in the   
security. Funds may use fair value pricing more frequently for securities       
primarily traded in non-U.S. markets because, among other things, most foreign  
markets close well before the Fund values its securities at 4:00 p.m., Eastern  
time. The earlier close of these foreign markets gives rise to the possibility  
that significant events, including broad market moves, may have occurred in the 
interim. To account for this, the Fund may frequently value many foreign equity 
securities using fair value prices based on third party vendor modeling tools to
the extent available.                                                           

Subject to the Board's oversight, the Fund's Board has delegated responsibility 
for valuing the Fund's assets to a Pricing Committee of the Manager, which      
operates under the policies and procedures approved by the Board, to value the  
Fund's assets on behalf of the Fund. The Pricing Committee values Fund assets as
described above.                                                                

RETIREMENT PLANS                                                                
In addition to being an appropriate investment for your IRA, Roth IRA and       
Coverdell Education Savings Account, shares in the Fund may be suitable for     
group retirement plans. You may establish your IRA account even if you are      
already a participant in an employer-sponsored retirement plan. For more        
information on how shares in the Fund can play an important role in your        
retirement planning or for details about group plans, please consult your       
financial advisor, or call 800 523-1918.                                        

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HOW TO REDEEM SHARES                                                            

[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]                                     

THROUGH YOUR FINANCIAL ADVISOR                                                  
Your financial advisor can handle all the details of redeeming your shares. Your
advisor may charge a separate fee for this service.                             

[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]                                  

BY MAIL                                                                         
You can redeem your shares (sell them back to the fund) by mail by writing to:  
Delaware Investments, 2005 Market Street, Philadelphia, PA 19103-7094. All      
owners of the account must sign the request, and for redemptions of more than   
$100,000, you must include a signature guarantee for each owner. Signature      
guarantees are also required when redemption proceeds are going to an address   
other than the address of record on an account.                                 

[GRAPHIC OMITTED: ILLUSTRATION OF A TELEPHONE]                                  

BY TELEPHONE                                                                    
You can redeem up to $100,000 of your shares by telephone. You may have the     
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you 
may have the proceeds sent directly to your bank by wire. Bank information must 
be on file before you request a wire redemption.                                

[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]                                

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

[GRAPHIC OMITTED: ILLUSTRATION OF A KEYPAD]                                     

THROUGH AUTOMATED SHAREHOLDER SERVICES                                          
You can redeem shares through Delaphone, our automated telephone service, or    
through our web site, www.delawareinvestments.com. For more information about   
how to sign up for these services, call our Shareholder Service Center at 800   
523-1918.                                                                       

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ABOUT YOUR ACCOUNT (continued)                                                  

HOW TO REDEEM SHARES (continued)                                                

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

When you send us a properly completed request to redeem or exchange shares, and 
we or an authorized agent receives the request before the close of regular      
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time), you   
will receive the net asset value next determined after we receive your request. 
If we receive your request after the close of regular trading on the New York   
Stock Exchange, you will receive the net asset value next determined on the next
business day. We will deduct any applicable contingent deferred sales charges.  
You may also have to pay taxes on the proceeds from your sale of shares. We will
send you a check, normally the next business day, but no later than seven days  
after we receive your request to sell your shares. If you purchased your shares 
by check, we will wait until your check has cleared, which can take up to 15    
days, before we send your redemption proceeds.                                  

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

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

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

AUTOMATIC INVESTING PLAN                                                        
The Automatic Investing Plan allows you to make regular monthly or quarterly    
investments directly from your checking account.                                

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

ELECTRONIC DELIVERY                                                             
With Delaware eDelivery, you can receive your fund documents electronically     
instead of via the U.S. mail. When you sign up for eDelivery, you can access    
your account statements, shareholder reports and other fund materials online, in
a secure environment at any time, from anywhere.                                

ONLINE ACCOUNT ACCESS                                                           
Account access is a password protected area of the Delaware Investment's web    
site that gives you access to your account information and allows you to perform
transactions in a secure environment.                                           

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

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

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

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ABOUT YOUR ACCOUNT (CONTINUED)                                                  

SPECIAL SERVICES (CONTINUED)                                                    

MONEYLINE(SM) ON DEMAND SERVICE                                                 
Through our MoneyLine(SM) On Demand Service, you or your financial advisor may  
transfer money between your Fund account and your predesignated bank account by 
telephone request. This service is not available for retirement plans, except   
for purchases into IRAs. MoneyLine has a minimum transfer of $25 and a maximum  
transfer of $50,000. Delaware Investments does not charge a fee for this        
service; however, your bank may assess one.                                     

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

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

The applicable Limited CDSC for Class A Shares and CDSC for Class B and Class C 
Shares redeemed via a Systematic Withdrawal Plan will be waived if the annual   
amount withdrawn in each year is less than 12% of the account balance on the    
date that the Plan is established. If the annual amount withdrawn in any year   
exceeds 12% of the account balance on the date that the Systematic Withdrawal   
Plan is established, all redemptions under the Plan will be subjected to the    
applicable contingent deferred sales charge, including an assessment for        
previously redeemed amounts under the Plan.                                     

FREQUENT TRADING OF FUND SHARES (MARKET TIMING)                                 
The Fund discourages purchases by market timers and purchase orders (including  
the purchase side of exchange orders) by shareholders identified as market      
timers may be rejected. The Fund's Board of Trustees has adopted policies and   
procedures designed to detect, deter and prevent trading activity detrimental to
the Fund and its shareholders, such as market timing. The Fund will consider    
anyone who follows a pattern of market timing in any fund in the Delaware       
Investments Family of Funds or the Optimum Funds Trust to be a market timer and 
may consider anyone who has followed a similar pattern of market timing at an   
unaffiliated fund family to be a market timer.                                  

Market timing of a fund occurs when investors make consecutive rapid short-term 
"roundtrips", or in other words, purchases into a fund followed quickly by      
redemptions out of that fund. A short-term roundtrip is any redemption of fund  
shares within 20 business days of a purchase of that fund's shares. If you make 
a second such short-term roundtrip in a fund within the same calendar quarter of
a previous short-term roundtrip in that fund, you may be considered a market    
timer. The purchase and sale of fund shares through the use of the exchange     
privilege are also included in determining whether market timing has occurred.  
The Fund also reserves the right to consider other trading patterns as market   
timing.                                                                         

Your ability to use the Fund's exchange privilege may be limited if you are     
identified as a market timer. If you are identified as a market timer, we will  
execute the redemption side of your exchange order but may refuse the purchase  
side of your exchange order. The Fund reserves the right to restrict, reject or 
cancel, without prior notice, any purchase or exchange order for any reason,    
including any purchase or exchange order accepted by any shareholder's financial
intermediary or in any omnibus-type account. Transactions placed in violation of
the Fund's market timing policy are not necessarily deemed accepted by the Fund 
and may be cancelled or revoked by the Fund on the next business day following  
receipt by the Fund.                                                            

However, sales of Fund shares back to a Fund or redemptions will continue to be 
permitted in accordance with the terms of the Fund's current Prospectus. This   
may result in an undesirable situation where a shareholder with an account      
closed to new purchases could be faced with a costly redemption of Fund shares  
if, for example, these                                                          

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shares have declined in value, the shareholder recently paid a front-end sales  
charge or the shares are subject to a CDSC, or the sale results in adverse tax  
consequences to the shareholder. To avoid this risk, a shareholder should       
carefully monitor the purchases, sales, and exchanges of Fund shares and avoid  
frequent trading in Fund shares.                                                

The Fund reserves the right to modify this policy, including any monitoring     
procedures and the procedures to close accounts to new purchases established    
from time to time to effectuate this policy, at any time without notice. Though 
the implementation of this policy involves judgments that are inherently        
subjective and involves some selectivity in their application, we seek to make  
judgments and applications that are consistent with the interests of the Fund's 
shareholders. While we will seek to take actions that will detect market timing,
we cannot represent that such trading activity can be completely eliminated.    

RISKS OF MARKET TIMING                                                          

By realizing profits through short-term trading, shareholders that engage in    
rapid purchases and sales or exchanges of the Fund's shares dilute the value of 
shares held by long-term shareholders. Volatility resulting from excessive      
purchases and sales or exchanges of Fund shares, especially involving large     
dollar amounts, may disrupt efficient portfolio management. In particular, a    
Fund may have difficulty implementing its long-term investment strategies if it 
is forced to maintain a higher level of its assets in cash to accommodate       
significant short-term trading activity. Excessive purchases and sales or       
exchanges of a Fund's shares may force the Fund to sell portfolio securities at 
inopportune times to raise cash to accommodate short-term trading activity. In  
addition, a Fund may incur increased expenses if one or more shareholders engage
in excessive or short-term trading. For example, a Fund may be forced to        
liquidate investments as a result of short-term trading and incur increased     
brokerage costs and realization of taxable capital gains without attaining any  
investment advantage. All of these factors may adversely affect Fund            
performance.                                                                    

A Fund that invests significantly in foreign securities may be particularly     
susceptible to short-term trading strategies. This is because foreign securities
are typically traded on markets that close well before the time a Fund          
calculates its NAV at 4:00 p.m. Eastern time, which gives rise to the           
possibility that developments may have occurred in the interim that would affect
the value of these securities. The time zone differences among international    
stock markets can allow a shareholder engaging in a short-term trading strategy 
to exploit differences in Fund share prices that are based on closing prices of 
foreign securities established some time before the Fund calculates its own     
share price. Any Fund that invests in securities that are, among other things,  
thinly traded, traded infrequently, or relatively illiquid has the risk that the
current market price for the securities may not accurately reflect current      
market values. A shareholder may seek to engage in short-term trading to take   
advantage of these pricing differences. Funds that may be adversely affected by 
such arbitrage include, in particular, funds that significantly invest in small 
cap securities, technology and other specific industry sector securities, and in
certain fixed-income securities, such as high yield bonds, asset-backed         
securities, or municipal bonds.                                                 

TRANSACTION MONITORING PROCEDURES                                               

The Fund, through its transfer agent, maintains surveillance procedures designed
to detect excessive or short-term trading in Fund shares. This monitoring       
process involves several factors, which includes scrutinizing transactions in   
Fund shares for transactions in violation of the Fund's market timing policy or 
other patterns of short-term or excessive trading. For purposes of these        
transaction monitoring procedures, the Funds may consider trading activity in   
multiple accounts under common ownership, control, or influence. Trading        
activity identified by either, or a combination, of these factors, or as a      
result of any other information available at the time, will be evaluated to     
determine whether such activity might constitute excessive or short-term        
trading. These procedures may be modified from time to time, as necessary or    
appropriate to improve the detection of excessive or short-term trading or to   
address specific circumstances, such as for certain retirement plans, to conform
to plan exchange limits or U.S. Department of Labor regulations, or for certain 
automated or pre-established exchange, asset allocation or dollar cost averaging
programs, or omnibus account arrangements.                                      

Omnibus account arrangements are common forms of holding shares of the Funds,   
particularly among certain brokers, dealers, and other financial intermediaries,
including sponsors of retirement plans and variable insurance products. The     
Funds seek to apply their monitoring procedures to these omnibus account        
arrangements and to the individual participant level in such accounts. In       
efforts to discourage market timers in such accounts the Funds may consider     
enforcement against market timers at the participant level and at the omnibus   
level, up to and including termination of the omnibus account.                  

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LIMITATIONS ON ABILITY TO DETECT AND CURTAIL MARKET TIMING                      

Shareholders seeking to engage in market timing may employ a variety of         
strategies to avoid detection and, despite the efforts of the Fund and its      
agents to detect market timing in Fund shares, there is no guarantee that the   
Fund will be able to identify these shareholders or curtail their trading       
practices. In particular, the Fund may not be able to detect market timing in   
Fund shares attributable to a particular investor who effects purchase and/or   
exchange activity in Fund shares through omnibus accounts. Also, multiple tiers 
of these entities may exist, each utilizing an omnibus account arrangement,     
which may further compound the difficulty of detecting excessive or short       
duration trading activity in Fund shares.                                       

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              
Dividends and capital gains, if any, are paid annually. We automatically        
reinvest all dividends and any capital gains, unless you direct us to do        
otherwise.                                                                      

In addition, in order to satisfy certain distribution requirements of the Tax   
Reform Act of 1986, the Fund may declare special year-end dividend and capital  
gains distributions during November and December to shareholders of record on a 
date in such month. Such distributions, if received by shareholders by January, 
are deemed to have been paid by the Fund and received by shareholders on the    
earlier of the date paid or December 31 of the prior year.                      

The tax status of your dividends from the Fund is the same whether you reinvest 
your dividends or receive them in cash.                                         

Distributions from the Fund's long-term capital gains are taxable as capital    
gains, while distributions from short-term capital gains and net investment     
income are generally taxable as ordinary income. The tax rate on capital gains  
is less than the tax rate on ordinary income.                                   

You also may be subject to state and local taxes on distributions. Tax laws are 
subject to change, so we urge you to consult your tax advisor about your        
particular tax situation and how it might be affected by current tax law.       

Any capital gains may be taxable at different rates depending on the length of  
time the Fund held the assets.                                                  

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

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CERTAIN MANAGEMENT CONSIDERATIONS                                               

INVESTMENTS BY FUNDS OF FUNDS                                                   
Delaware U.S. Growth Fund accepts investments from funds of funds, including    
those within Delaware Investments family, and investment vehicles that operate  
similarly to funds of funds, such as 529 plans. A "529 Plan" is a college       
savings program that operates under section 529 of the Internal Revenue Code.   
From time to time, the Fund may experience large investments or redemptions due 
to allocations or rebalancings by these funds of funds and/or similar investment
vehicles. While it is impossible to predict the overall impact of these         
transactions over time, there could be adverse effects on portfolio management. 
For example, the Fund may be required to sell securities or invest cash at times
when it would not otherwise do so. These transactions could also have tax       
consequences if sales of securities result in gains, and could also increase    
transaction costs or portfolio turnover. The manager will monitor transactions  
by the funds of funds and/or similar investment vehicles and will attempt to    
minimize any adverse effects on the Fund and funds of funds and/or similar      
investment vehicle as a result of these transactions.                           

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FINANCIAL HIGHLIGHTS                                                            

The financial highlights table is intended to help you understand the Fund's    
financial performance. All "per share" information reflects financial results   
for a single Fund share. This information has been audited by Ernst & Young LLP,
whose report, along with the Fund's financial statements, is included in the    
Fund's annual report, which is available upon request by calling 800 523-1918.  

                                                        [Enlarge/Download Table]

                                                                                      CLASS A                                     
                                                                                  YEAR ENDED 10/31                                
                                                    ----------------------------------------------------------------------------  
DELAWARE U.S. GROWTH FUND                               2004            2003            2002            2001            2000      
--------------------------------------------------  ------------    ------------    ------------    ------------    ------------  
                                                                                                                                  
Net asset value, beginning of period                $     10.840    $      9.260    $     11.800    $     19.390    $     15.310  

INCOME (LOSS) FROM INVESTMENT OPERATIONS:                                                                                         
Net investment loss(2)                                    (0.064)         (0.039)         (0.058)         (0.045)         (0.171) 
Net realized and unrealized gain (loss)                                                                                           
 on investments                                           (0.156)          1.619          (2.482)         (7.314)          4.843  
                                                    ------------    ------------    ------------    ------------    ------------  
Total from investment operations                          (0.220)          1.580          (2.540)         (7.359)          4.672  
                                                    ------------    ------------    ------------    ------------    ------------  

LESS DIVIDENDS AND DISTRIBUTIONS FROM:                                                                                            
Net realized gain on investments                              --              --              --          (0.231)         (0.592) 
                                                    ------------    ------------    ------------    ------------    ------------  
Total dividends and distributions                             --              --              --          (0.231)         (0.592) 
                                                    ------------    ------------    ------------    ------------    ------------  
NET ASSET VALUE, END OF PERIOD                      $     10.620    $     10.840    $      9.260    $     11.800    $     19.390  
                                                    ============    ============    ============    ============    ============  
TOTAL RETURN(3)                                            (2.03)%         17.06%         (21.53)%        (38.36)%         30.84% 

RATIOS AND SUPPLEMENTAL DATA:                                                                                                     
Net assets, end of period (000 omitted)             $     38,339    $     60,934    $     51,887    $     66,897    $    102,791  
Ratio of expenses to average net assets                     1.40%           1.40%           1.40%           1.46%           1.60% 
Ratio of expenses to average net assets                                                                                           
 prior to expense limitation and expenses                                                                                         
 paid indirectly                                            2.15%           2.28%           1.88%           1.70%           1.60% 
Ratio of net investment loss to average net assets         (0.59)%         (0.40)%         (0.51)%         (0.30)%         (0.87%)
Ratio of net investment loss to average                                                                                           
 net assets prior to expense limitation                                                                                           
 and expenses paid indirectly                              (1.34)%         (1.28)%         (0.99)%         (0.54)%         (0.87%)
Portfolio turnover                                           158%             77%            103%             70%            111% 

(1)  Date of commencement of operations.                                        
(2)  The average shares outstanding method has been applied for per share       
information.                                                          
(3)  Total investment return is based on the change in net asset value of a     
share during the period and assumes reinvestment of dividends and     
     distributions at net asset value and does not reflect the impact of a sales
  charge. Total investment return reflects a waiver and payment of fees by
 the manager and distributor, as applicable. Performance would have been
lower had the expense limitation not been in effect.                  

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                                                                          CLASS B                                
                                                                       YEAR ENDED 10/31                          
                                           -------------------------------------------------------------------   
DELAWARE U.S. GROWTH FUND                     2004          2003          2002          2001          2000       
-----------------------------------------  -----------   -----------   -----------   -----------   -----------   
                                                                                                                 
Net asset value, beginning of period       $     9.950   $     8.560   $    10.990   $    18.200   $    14.500   
INCOME (LOSS) FROM INVESTMENT OPERATIONS:                                                                        
Net investment loss(2)                          (0.132)       (0.100)       (0.131)       (0.138)       (0.297)  
Net realized and unrealized gain                                                                                 
 (loss) on investments                          (0.128)        1.490        (2.299)       (6.841)        4.589   
                                           -----------   -----------   -----------   -----------   -----------   
Total from investment operations                (0.260)        1.390        (2.430)       (6.979)        4.292   
                                           -----------   -----------   -----------   -----------   -----------   
LESS DIVIDENDS AND DISTRIBUTIONS FROM:                                                                           
Net realized gain on investments                    --            --            --        (0.231)       (0.592)  
                                           -----------   -----------   -----------   -----------   -----------   
Total distributions                                 --            --            --        (0.231)       (0.592)  
                                           -----------   -----------   -----------   -----------   -----------   
NET ASSET VALUE, END OF PERIOD             $     9.690   $     9.950   $     8.560   $    10.990   $    18.200   
                                           ===========   ===========   ===========   ===========   ===========   
TOTAL RETURN(1)                                  (2.61)%       16.24%       (22.11)%      (38.79)%       29.91%  
RATIOS AND SUPPLEMENTAL DATA:                                                                                    
Net assets, end of period (000 omitted)    $    30,686   $    39,613   $    40,196   $    62,658   $    92,827   
Ratio of expenses to average net assets           2.10%         2.10%         2.10%         2.16%         2.30%  
Ratio of expenses to average net assets                                                                          
 prior to expense                                                                                                
 limitation and expenses paid indirectly          2.80%         2.94%         2.58%         2.40%         2.30%  
Ratio of net investment loss to average                                                                          
 net assets                                      (1.29)%       (1.10)%       (1.21)%       (1.00)%       (1.57)% 
Ratio of net investment loss to average                                                                          
 net assets prior to expense limitation                                                                          
 and expenses paid indirectly                    (1.99)%       (1.94)%       (1.69)%       (1.24)%       (1.57)% 
Portfolio turnover                                 158%           77%          103%           70%          111%  



                                                                          CLASS C                                
                                                                       YEAR ENDED 10/31                          
                                           -------------------------------------------------------------------   
DELAWARE U.S. GROWTH FUND                     2004          2003          2002          2001          2000       
-----------------------------------------  -----------   -----------   -----------   -----------   -----------   
                                                                                                                 
Net asset value, beginning of period       $    10.790    $     9.280   $    11.910   $    19.700   $    15.650  

INCOME (LOSS) FROM INVESTMENT OPERATIONS:                                                                        
Net investment loss(2)                          (0.140)        (0.108)       (0.139)       (0.148)       (0.311) 
Net realized and unrealized gain                                                                                 
 (loss) on investments                          (0.150)         1.618        (2.491)       (7.411)        4.953  
                                           -----------    -----------   -----------   -----------   -----------  
Total from investment operations                (0.290)         1.510        (2.630)       (7.559)        4.642  
                                           -----------    -----------   -----------   -----------   -----------  
LESS DIVIDENDS AND DISTRIBUTIONS FROM:                                                                           
Net realized gain on investments                    --             --            --        (0.231)       (0.592) 
                                           -----------    -----------   -----------   -----------   -----------  
Total distributions                                 --             --            --        (0.231)       (0.592) 
                                           -----------    -----------   -----------   -----------   -----------  
NET ASSET VALUE, END OF PERIOD             $    10.500    $    10.790   $     9.280   $    11.910   $    19.700  
                                           ===========    ===========   ===========   ===========   ===========  
TOTAL RETURN(1)                                  (2.69)%        16.27%       (22.08)%      (38.78)%       29.95% 
RATIOS AND SUPPLEMENTAL DATA:                                                                                    
Net assets, end of period (000 omitted)    $     8,387    $    10,684   $    10,792   $    14,959   $    19,412  
Ratio of expenses to average net assets           2.10%          2.10%         2.10%         2.16%         2.30% 
Ratio of expenses to average net assets                                                                          
 prior to expense                                                                                                
 limitation and expenses paid indirectly          2.80%          2.94%         2.58%         2.40%         2.30% 
Ratio of net investment loss to average                                                                          
 net assets                                      (1.29)%        (1.10)%       (1.21)%       (1.00)%       (1.57)%
Ratio of net investment loss to average                                                                          
 net assets prior to expense limitation                                                                          
 and expenses paid indirectly                    (1.99)%        (1.94)%       (1.69)%       (1.24)%       (1.57)%
Portfolio turnover                                 158%             77%          103%           70%          111%


                                             CLASS R                                                             
                                           -----------                                                           
                                                           PERIOD                                                
                                            YEAR ENDED    6/2/03(1)                                              
                                              10/31          TO                                                  
DELAWARE U.S. GROWTH FUND                     2004        10/31/03                                               
-----------------------------------------  -----------   -----------                                             
                                                                                                                 
Net asset value, beginning of period       $    10.830   $    10.120                                             

INCOME (LOSS) FROM INVESTMENT OPERATIONS:                                                                        
Net investment loss(2)                          (0.097)       (0.033)                                            
Net realized and unrealized gain                                                                                 
 (loss) on investments                          (0.143)        0.743                                             
                                           -----------   -----------                                             
Total from investment operations                (0.240)        0.710                                             
                                           -----------   -----------                                             
LESS DIVIDENDS AND DISTRIBUTIONS FROM:                                                                           
Net realized gain on investments                    --            --                                             
                                           -----------   -----------                                             
Total distributions                                 --            --                                             
                                           -----------   -----------                                             
NET ASSET VALUE, END OF PERIOD             $    10.590   $    10.830                                             
                                           ===========   ===========                                             
TOTAL RETURN(1)                                  (2.22)%        7.02%                                            
RATIOS AND SUPPLEMENTAL DATA:                                                                                    
Net assets, end of period (000 omitted)    $       245   $       189                                             
Ratio of expenses to average net assets           1.70%         1.70%                                            
Ratio of expenses to average net assets                                                                          
 prior to expense                                                                                                
 limitation and expenses paid indirectly          2.40%         2.71%                                            
Ratio of net investment loss to average                                                                          
 net assets                                      (0.89)%       (0.76%)                                           
Ratio of net investment loss to average                                                                          
 net assets prior to expense limitation                                                                          
 and expenses paid indirectly                    (1.59)%       (1.77%)                                           
Portfolio turnover                                 158%           77%                                            


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HOW TO READ THE FINANCIAL HIGHLIGHTS                                            

NET INVESTMENT INCOME (LOSS)                                                    
Net investment income (loss) includes dividend and interest income earned from a
fund's securities; it is after expenses have been deducted.                     

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                          
A realized gain occurs when we sell an investment at a profit, while a realized 
loss occurs when we sell an investment at a loss. When an investment increases  
or decreases in value but we do not sell it, we record an unrealized gain or    
loss. The amount of realized gain per share, if any, that we pay to shareholders
would be listed under "Less dividends and distributions from - Net realized gain
on investments."                                                                

NET ASSET VALUE (NAV)                                                           
This is the value of a mutual fund share, calculated by dividing the net assets 
by the number of shares outstanding.                                            

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

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

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

RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS                              
We determine this ratio by dividing net investment income by average net assets.

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

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HOW TO USE THIS GLOSSARY                                                        
The glossary includes definitions of investment terms, many of which are used   
throughout the Prospectus. If you would like to know the meaning of an          
investment term that is not explained in the text please check the glossary.    

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

AVERAGE MATURITY                                                                
An average of when the individual bonds and other debt securities held in a     
portfolio will mature.                                                          

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

BOND RATINGS                                                                    
Independent evaluations of creditworthiness, ranging from Aaa/AAA (highest      
quality) to D (lowest quality). Bonds rated Baa/BBB or better are considered    
investment grade. See also Nationally recognized statistical ratings            
organization.                                                                   

CAPITAL                                                                         
The amount of money you invest.                                                 

CAPITAL APPRECIATION                                                            
An increase in the value of an investment.                                      

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

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

COMPOUNDING                                                                     
Earnings on an investment's previous earnings.                                  

CONSUMER PRICE INDEX (CPI)                                                      
Measurement of U.S. inflation; represents the price of a basket of commonly     
purchased goods.                                                                

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

CORPORATE BOND                                                                  
A debt security issued by a corporation. See Bond.                              

COST BASIS                                                                      
The original purchase price of an investment, used in determining capital gains 
and losses.                                                                     

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DEPRECIATION                                                                    
A decline in an investment's value.                                             

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

DIVIDEND DISTRIBUTION                                                           
Payments to mutual fund shareholders of dividends passed along from the fund's  
portfolio of securities.                                                        

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

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

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

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

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

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

MANAGEMENT FEE                                                                  
The amount paid by a mutual fund to the investment advisor for management       
services, expressed as an annual percentage of the fund's average daily net     
assets.                                                                         

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

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

NASD REGULATION, INC. (NASDR(SM))                                               
The independent subsidiary of the National Association of Securities Dealers,   
Inc. responsible for regulating the securities industry.                        

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NATIONALLY RECOGNIZED STATISTICAL RATINGS ORGANIZATION (NRSRO)                  
A company that assesses the credit quality of bonds, commercial paper, preferred
and common stocks and municipal short-term issues, rating the probability that  
the issuer of the debt will meet the scheduled interest payments and repay the  
principal. Ratings are published by such companies as Moody's Investors Service,
Inc. (Moody's), Standard & Poor's (S&P) and Fitch, Inc. (Fitch).                

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

NET ASSETS                                                                      
Net assets for purposes of a fund's 80% policy means the total value of all     
assets in the fund's portfolio, minus any liabilities, plus the amount of the   
fund's borrowings, if any, for investment purposes.                             

PREFERRED STOCK                                                                 
Preferred stock has preference over common stock in the payment of dividends and
liquidation of assets. Preferred stocks also often pay dividends at a fixed rate
and are sometimes convertible into common stock.                                

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

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

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

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

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

S&P 500 INDEX                                                                   
The S&P 500 Index; an unmanaged index of 500 widely held common stocks that is  
often used to represent performance of the U.S. stock market.                   

SALES CHARGE                                                                    
Charge on the purchase or redemption of fund shares sold through financial      
advisors. May vary with the amount invested. Typically used to compensate       
advisors for advice and service provided.                                       

SEC (SECURITIES AND EXCHANGE COMMISSION)                                        
Federal agency established by Congress to administer the laws governing the     
securities industry, including mutual fund companies.                           

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

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

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

STATEMENT OF ADDITIONAL INFORMATION (SAI)                                       
The document serving as "Part B" of a fund's prospectus that provides more      
detailed information about the fund's organization, investments, policies and   
risks.                                                                          

STOCK                                                                           
An investment that represents a share of ownership (equity) in a corporation.   
Stocks are often referred to as common stock or equities.                       

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

UNIFORM GIFTS TO MINORS ACT AND UNIFORM TRANSFERS TO MINORS ACT                 
Federal and state laws that provide a simple way to transfer property to a minor
with special tax advantages.                                                    

U.S. GOVERNMENT SECURITIES                                                      
Securities issued by U.S. government or its agencies. They include Treasuries as
well as agency-backed securities such as Fannie Maes.                           

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

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DELAWARE U.S. GROWTH FUND                                                       

ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS is available in the Fund's  
annual and semi annual reports to shareholders. In the Fund's shareholder       
reports, you will find a discussion of the market conditions and investment     
strategies that significantly affected the Fund's performance during the report 
period. You can find more detailed information about the Fund in the current    
Statement of Additional Information, which we have filed electronically with the
Securities and Exchange Commission (SEC) and which is legally a part of this    
Prospectus. If you want a free copy of the Statement of Additional Information, 
the annual or semi annual report, or if you have any questions about investing  
in the Fund, you can write to us at 2005 Market Street, Philadelphia, PA        
19103-7094, or call toll-free 800 523-1918. You may also obtain additional      
information about the Fund from your financial advisor.                         

You can find reports and other information about the Fund on the EDGAR Database 
on the SEC web site (http://www.sec.gov). You can also get copies of this       
information, after payment of a duplicating fee, by e-mailing the SEC at        
publicinfo@sec.gov or by writing to the Public Reference Section of the SEC,    
Washington, D.C. 20549-0102. Information about the Fund, including its Statement
of Additional Information, can be reviewed and copied at the SEC's Public       
Reference Room in Washington, D.C. You can get information on the Public        
Reference Room by calling the SEC at 202 942-8090.                              

WEB SITE                                                                        
www.delawareinvestments.com                                                     

E-MAIL                                                                          
service@delinvest.com                                                           

SHAREHOLDER SERVICE CENTER                                                      

800 523-1918                                                                    

Call the Shareholder Service Center:                                            
Monday to Friday, 8 a.m. to 7 p.m. Eastern time.                                

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

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

DELAPHONE SERVICE                                                               

800 362-FUND (800 362-3863)                                                     

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

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

DELAWARE U.S. GROWTH FUND SYMBOLS     CUSIP     NASDAQ                          
---------------------------------   ---------   -------                         
Class A                             245917505    DUGAX                          
Class B                             245917604    DEUBX                          
Class C                             245917703    DEUCX                          
Class R                             245917711    DEURX                          

 [LOGO OF DELAWARE INVESTMENTS (SM)]

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                                              [LOGO OF DELAWARE INVESTMENTS(SM)]

GROWTH EQUITY                                                                   

PROSPECTUS  FEBRUARY 25, 2005                                                   

DELAWARE U.S. GROWTH FUND                               
INSTITUTIONAL CLASS                                     

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

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TABLE OF CONTENTS                                                               

FUND PROFILE                                                             PAGE  3
Delaware U.S. Growth Fund                                                      3

HOW WE MANAGE THE FUND                                                   PAGE  6
Our investment strategies                                                      6
The securities we typically invest in                                          7
The risks of investing in the Fund                                             9

Disclosure of portfolio holdings information                                  11

WHO MANAGES THE FUND                                                     PAGE 12
Investment manager                                                            12
Portfolio managers                                                            12
Who's who                                                                     13

ABOUT YOUR ACCOUNT                                                       PAGE 15
Investing in the Fund                                                         15
How to buy shares                                                             16
Fair valuation                                                                17
How to redeem shares                                                          18
Account minimum                                                               19
Exchanges                                                                     19
Frequent trading of Fund shares (market timing)                               19
Dividends, distributions and taxes                                            21

CERTAIN MANAGEMENT CONSIDERATIONS                                        PAGE 22

FINANCIAL HIGHLIGHTS                                                     PAGE 23

GLOSSARY                                                                 PAGE 25

                                                                               2

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PROFILE: DELAWARE U.S. GROWTH FUND                                              

WHAT IS THE FUND'S GOAL?                                                        
Delaware U.S. Growth Fund seeks maximum capital appreciation by investing in    
companies of all sizes which have low dividend yields, strong balance sheets and
high expected earnings growth rates relative to their industry. Although the    
Fund will strive to meet its investment goal, there is no assurance that it     
will.                                                                           

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?                                 
We invest primarily in common stocks. Our goal is to identify companies whose   
earnings are expected to grow faster than the U.S. economy in general. We look  
for stocks with low dividend yields, strong balance sheets and high expected    
earnings growth rates as compared to other companies in the same industry.      
Whether companies provide dividend income and how much income they provide will 
not be a primary factor in the Fund's selection decisions. We may also invest up
to 20% of the Fund's assets in debt securities and bonds. We may also invest in 
convertible bonds, preferred stocks and convertible preferred stocks, provided  
that these investments, when aggregated with the Fund's investments in debt     
securities and bonds, do not exceed 35% of the Fund's assets.                   

Under normal circumstances, the Fund will invest at least 80% of its net assets 
in U.S. investments. This policy is not a fundamental investment policy and can 
be changed without shareholder approval. However, shareholders will be given    
notice at least 60 days prior to any such change.                               

WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?                               
Investing in any mutual fund involves risk, including the risk that you may lose
part or all of the money you invest. Over time, the value of your investment in 
the Fund will increase and decrease according to changes in the value of the    
securities in the Fund's portfolio. This Fund will be particularly affected by  
declines in stock prices, which tend to fluctuate more than bond prices. Stock  
prices may be negatively affected by a drop in the stock market or poor         
performance in specific companies or industries. Stocks of companies with high  
growth expectations may be more susceptible to price declines if they do not    
meet those high expectations.                                                   

For a more complete discussion of risk, please see "The risks of investing in   
the Fund" on page [__].                                                         

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

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

WHO SHOULD INVEST IN THE FUND                                                   
o    Investors with long-term financial goals.                                  
o    Investors looking for capital growth potential.                            
o    Investors looking for a fund that can be a complement to income-producing  
or value-oriented investments.                                        

WHO SHOULD NOT INVEST IN THE FUND                                               
o    Investors with short-term financial goals.                                 
o    Investors who are unwilling to accept share prices that may fluctuate,     
sometimes significantly, over the short term.                         
o    Investors whose primary goal is to receive current income.                 

                                                                               3

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HOW HAS THE FUND PERFORMED?                                                     

THIS BAR CHART AND TABLE can help you evaluate the risks of investing in the    
Fund. We show how returns for the Fund's Institutional Class have varied over   
the past ten calendar years, as well as average annual returns for one-year,    
five-year and ten-year periods. The Fund's past performance does not necessarily
indicate how it will perform in the future. The Fund's returns reflect expense  
caps. The returns would be lower without the caps.                              

[GRAPHIC OMITTED: BAR CHART SHOWING YEAR BY YEAR TOTAL RETURN (Institutional    
Class)]                                                                         

YEAR-BY-YEAR TOTAL RETURN (Institutional Class)                                 

1995                       24.28                          
1996                       19.94                          
1997                       31.36                          
1998                       29.89                          
1999                       40.77                          
2000                       -7.35                          
2001                      -24.09                          
2002                      -28.81                          
2003                       23.60%                         
2004                        3.41%                         

During the periods illustrated in this bar chart, the Institutional Class'      
highest quarterly return was 30.66% for the quarter ended December 31, 1999 and 
its lowest quarterly return was -20.96% for the quarter ended March 31, 2001.   

                              AVERAGE ANNUAL RETURNS FOR PERIODS ENDING 12/31/04

                                                        [Enlarge/Download Table]

                                                              1 YEAR    5 YEARS   10 YEARS 
                                                             --------   -------   -------- 
                                                                                           
Return before taxes                                              3.41%    -8.54%      8.64%
Return after taxes on distributions                              3.41%    -8.58%      6.87%
Return after taxes on distributions and sale of Fund shares      2.22%    -7.04%      6.65%
S&P 500 Index                                                                              
(reflects no deduction for fees, expenses, or taxes)            10.87%    -2.30%     12.07%

The Fund's returns are compared to the performance of the S&P 500 Index. You    
should remember that unlike the Fund, the index is unmanaged and does not       
reflect the costs of operating a mutual fund, such as the costs of buying,      
selling and holding securities.                                                 

Actual after-tax returns depend on the investor's individual tax situation and  
may differ from the returns shown. After-tax returns are not relevant for shares
held in tax-deferred investment vehicles such as employer-sponsored 401(k) plans
and individual retirement accounts. The after-tax returns shown are calculated  
using the highest individual federal marginal income tax rates in effect during 
the Fund's lifetime and do not reflect the impact of state and local taxes. The 
after-tax rate used is based on the current tax characterization of the elements
of the fund's returns (e.g., qualified vs. non-qualified dividends) and may be  
different than the final tax characterization of such elements. Past            
performance, both before and after taxes, is not a guarantee of future results. 

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WHAT ARE THE FUND'S FEES AND EXPENSES?                                          
You do not pay sales charges directly from your investments when you buy or sell
shares of the Institutional Class.                                              

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

Annual fund operating expenses are deducted from the Fund's assets.             

Management fees                                              0.65%              
Distribution and service (12b-1) fees                        none               
Other expenses(2)                                            0.84%              
Total operating expenses                                     1.49%              
Fee waivers and payments(3)                                 (0.39)%             
Net expenses                                                 1.10%              

This example is intended to help you compare the cost of investing in the Fund  
to the cost of investing in other mutual funds with similar investment          
objectives. We show the cumulative amount of Fund expenses on a hypothetical    
investment of $10,000 with an annual 5% return over the time shown. (4) This is 
an example only, and does not represent future expenses, which may be greater or
less than those shown here.                                                     

1 year              $   112                                                     
3 years             $   433                                                     
5 years             $   776                                                     
10 years            $ 1,746                                                     

(1)  Exchanges are subject to the requirements of each fund in the Delaware     
     Investments family. A front-end sales charge may apply if you exchange your
shares into a fund that has a front-end sales charge.                 

(2)  Other expenses have been restated to reflect an expected decrease in other 
   expenses in the current fiscal year due to a reduction in transfer agency
costs associated with servicing retirement accounts.                  

(3)  The investment manager has contracted to waive fees and pay expenses       
through February 28, 2006 in order to prevent total operating expenses
    (excluding any taxes, interest, brokerage fees, extraordinary expenses and
    certain insurance costs) from exceeding 1.10% of average daily net assets.

(4)  The Fund's actual rate of return may be greater or less than the           
     hypothetical 5% return we use here. This example reflects the net operating
   expenses with expense waivers for the one-year contractual period and the
    total operating expenses without expense waivers for years two through 10.

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HOW WE MANAGE THE FUND                                                          

OUR INVESTMENT STRATEGIES                                                       
We research individual companies and analyze economic and market conditions,    
seeking to identify the securities or market sectors that we think are the best 
investments for the Fund. Following are descriptions of how the portfolio       
management team pursues the Fund's investment goals.                            

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

Delaware U.S. Growth Fund seeks to maximize capital appreciation. We invest     
primarily in common stocks and though we have the flexibility to invest in      
companies of all sizes, we generally focus on medium and large-size companies.  
Our goal is to own companies with the potential to grow earnings faster than the
U.S. economy in general. We look for companies that have:                       

o    low dividend yields;                                                       
o    strong balance sheets; and                                                 
o    high expected earnings growth rates relative to their industry.            

There are a number of catalysts that might increase a company's potential for   
accelerated earnings growth. Our disciplined, research-intensive selection      
process is designed to identify earnings catalysts such as:                     

o    management changes;                                                        
o    new products;                                                              
o    structural changes in the economy; or                                      
o    corporate restructurings and turnaround situations.                        

We maintain a diversified portfolio representing a number of different          
industries. Such an approach helps to minimize the impact that any one security 
or industry could have on the portfolio if it were to experience a period of    
slow or declining earnings growth.                                              

Because our objective is capital appreciation, the amount of dividend income    
that a stock provides is only an incidental consideration for us.               

Under normal circumstances, the Fund will invest at least 80% of its net assets 
in U.S. investments. This policy is not a fundamental investment policy and can 
be changed without shareholder approval. However, shareholders will be given    
notice at least 60 days prior to any such change.                               

The Fund's investment objective is non-fundamental. This means that the Board of
Trustees may change the objective without obtaining shareholder approval. If the
objective were changed, we would notify shareholders before the change in the   
objective became effective.                                                     

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THE SECURITIES WE TYPICALLY INVEST IN                                           
Stocks generally offer investors the potential for capital appreciation, and may
pay dividends as well.                                                          

                                                        [Enlarge/Download Table]

                                                                 HOW WE USE THEM                        
                                          --------------------------------------------------------------
SECURITIES                                                  DELAWARE U.S. GROWTH FUND                   
----------------------------------------  --------------------------------------------------------------
                                                                                                        
COMMON STOCKS: Securities that represent  Generally, we invest 85% to 100% of the Fund's net assets in  
shares of ownership in a corporation.     common stock of companies that we think have appreciation     
Stockholders participate in the           potential. We may invest in companies of all sizes, but       
corporation's profits and losses,         typically focus on medium and large-size companies.           
proportionate to the number of shares                                                                   
they own.                                                                                               

FOREIGN SECURITIES AND AMERICAN           The Fund may invest up to 20% of its assets in securities of  
DEPOSITARY RECEIPTS: Securities of        foreign issuers. Such foreign securities may be traded on a   
foreign entities issued directly or, in   foreign exchange, or they may be in the form of American      
the case of American Depositary Receipts  Depositary Receipts (ADRs). Direct ownership of foreign       
(ADRs), through a U.S. bank. ADRs         securities will typically not be a significant part of our    
represent a bank's holding of a stated    strategy. We may, however, own ADRs when we think they offer  
number of shares of a foreign             greater appreciation potential than domestic stocks.          
corporation. An ADR entitles the holder                                                                 
to all dividends and capital gains                                                                      
earned by the underlying foreign shares.                                                                
ADRs are bought and sold in the same way                                                                
as U.S. securities.                                                                                     

REPURCHASE AGREEMENTS: An agreement       Typically, we use repurchase agreements as a short-term       
between a buyer of securities, such as    investment for the Fund's cash position. In order to enter    
the Fund, and a seller of securities, in  into these repurchase agreements, the Fund must have          
which the seller agrees to buy the        collateral of 102% of the repurchase price. The Fund would    
securities back within a specified time   only enter into repurchase agreements in which the collateral 
at the same price the buyer paid for      is comprised of U.S. government securities.                   
them, plus an amount equal to an agreed                                                                 
upon interest rate. Repurchase                                                                          
agreements are often viewed as                                                                          
equivalent to cash.                                                                                     

RESTRICTED SECURITIES: Privately placed   We may invest in privately placed securities including those  
securities whose resale is restricted     that are eligible for resale only among certain institutional 
under securities law.                     buyers without registration, which are commonly known as Rule 
                                          144A Securities. Restricted securities that are determined to 
                                          be illiquid may not exceed the Fund's 10% limit on illiquid   
                                          securities, which is described below.                         

ILLIQUID SECURITIES: Securities that do   We may invest up to 10% of net assets in illiquid securities. 
not have a ready market, and cannot be                                                                  
easily sold within seven days at                                                                        
approximately the price that a fund has                                                                 
valued them.                                                                                            

FIXED-INCOME SECURITIES: Securities that  We may invest up to 20% of the Fund's assets in debt          
may include debt securities, bonds,       securities and bonds. We may also invest up to 10% of this    
convertible bonds, as well as,            portion in non-investment grade bonds if we believe that doing
non-investment grade fixed-income         so would help us to meet the Fund's objective. We may also    
securities.                               invest in convertible bonds, preferred stocks and convertible 
                                          preferred stock, provided that these investments, when        
                                          aggregated with the Fund's investments in debt securities and 
                                          bonds, do not exceed 35% of the Fund's assets.                

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                                                                 HOW WE USE THEM                        
                                          --------------------------------------------------------------
SECURITIES                                                  DELAWARE U.S. GROWTH FUND                   
----------------------------------------  --------------------------------------------------------------
                                                                                                        
OPTIONS AND FUTURES: Options represent a  If we have stocks that appreciate in price, we may want to    
right to buy or sell a security or group  protect those gains when we anticipate adverse conditions. We 
of securities at an agreed upon price at  might use options or futures to neutralize the effect of any  
a future date. The purchaser of an        anticipated price declines, without selling the security. We  
option may or may not choose to go        might also use options or futures to gain exposure to a       
through with the transaction.             particular market segment without purchasing individual       
                                          securities in that segment, particularly if we had excess cash
                                          that we wanted to invest quickly.                             

Writing a call option on a security       We might use covered call options if we believe that doing so 
obligates the owner of the security to    would help the Fund meet its investment objective.            
sell it for at an agreed upon price on                                                                  
an agreed upon date (usually no more      Use of these strategies can increase the operating costs of   
than nine months in the future.) The      the Fund and can lead to loss of principal.                   
writer of the call option receives a                                                                    
premium payment from the purchaser of                                                                   
the call, but if the security                                                                           
appreciates to a price greater than the                                                                 
agreed upon selling price, the fund                                                                     
would lose out on those gains. A call                                                                   
option written by the Fund is "covered"                                                                 
if the Fund owns the security underlying                                                                
the option or has an absolute and                                                                       
immediate right to acquire that security                                                                
without additional cash consideration.                                                                  

Futures contracts are agreements for the                                                                
purchase or sale of securities at a                                                                     
specified price, on a specified date.                                                                   
Unlike an option, a futures contract                                                                    
must be executed unless it is sold                                                                      
before the settlement date.                                                                             

Options and futures are generally                                                                       
considered to be derivative securities.                                                                 

The Fund may also invest in other securities, including preferred stock and U.S.
government securities. Please see the Statement of Additional Information for   
additional descriptions on these securities as well as those listed in the table
above.                                                                          

LENDING SECURITIES The Fund may lend up to one-third of its assets to qualified 
brokers, dealers and institutional investors for their use in securities        
transactions. These transactions, if any, may generate additional income for the
Fund.                                                                           

BORROWING FROM BANKS The Fund may borrow money as a temporary measure for       
extraordinary purposes or to facilitate redemptions. To the extent that it does 
so, the Fund may be unable to meet its investment objective.                    

PURCHASING SECURITIES ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS The Fund may   
buy or sell securities on a when-issued or delayed delivery basis; that is,     
paying for securities before delivery or taking delivery at a later date. The   
Fund will designate cash or securities in amounts sufficient to cover its       
obligations, and will value the designated assets daily.                        

PORTFOLIO TURNOVER We anticipate that the Fund's annual portfolio turnover may  
be greater than 100%. A portfolio turnover rate of 100% would occur, for        
example, if all the securities in the fund's portfolio were replaced once during
a period of one year. A high rate of portfolio turnover in any year may increase
brokerage commissions paid and could result in high amounts of realized         
investment gain subject to the payment of taxes by shareholders. The turnover   
rate may also be affected by cash requirements from redemptions and repurchases 
of fund shares.                                                                 

TEMPORARY DEFENSIVE POSITIONS For temporary defensive purposes, we may invest up
to 100% of the Fund's assets in money market instruments when the manager       
determines that market conditions warrant. We may also hold a portion of the    
Fund's assets in cash for liquidity purposes. To the extent that we do so, the  
Fund may be unable to achieve its investment objective.                         

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THE RISKS OF INVESTING IN THE FUND                                              
Investing in any mutual fund involves risk, including the risk that you may     
receive little or no return on your investment, and the risk that you may lose  
part or all of the money you invest. Before you invest in the Fund, you should  
carefully evaluate the risks. Because of the nature of the Fund, you should     
consider your investment to be a long-term investment that typically provides   
the best results when held for a number of years. Following are the chief risks 
you assume when investing in the Fund. Please see the Statement of Additional   
Information for further discussion of these risks and the other risks not       
discussed here.                                                                 

                                                        [Enlarge/Download Table]

                                                              HOW WE STRIVE TO MANAGE THEM              
                                          --------------------------------------------------------------
                 RISKS                                          DELAWARE U.S. GROWTH FUND               
----------------------------------------  --------------------------------------------------------------
                                                                                                        
MARKET RISK is the risk that all or a     We maintain a long-term investment approach and focus on      
majority of the securities in a certain   stocks we believe can appreciate over an extended time frame  
market -- like the stock or bond market   regardless of interim market fluctuations. We do not try to   
-- will decline in value because of       predict overall stock market movements and generally do not   
factors such as economic conditions,      trade for short-term purposes.                                
future expectations or investor                                                                         
confidence.                               We may hold a substantial part of the Fund's assets in cash or
                                          cash equivalents as a temporary, defensive strategy.          

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

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                                                        [Enlarge/Download Table]
                                                                                                        

FOREIGN RISK is the risk that foreign     We attempt to reduce the risks presented by such investments  
securities may be adversely affected by   by conducting world-wide fundamental research with an emphasis
political instability, changes in         on company visits. In addition, we monitor current economic   
currency exchange rates, foreign          and market conditions and trends, the political and regulatory
economic conditions or inadequate         environment and the value of currencies in different countries
regulatory and accounting standards. In   in an effort to identify the most attractive countries and    
addition, there is the possibility of     securities. Additionally, when currencies appear significantly
expropriation, nationalization or         overvalued compared to average real exchange rates, the Fund  
confiscatory taxation, taxation of        may hedge exposure to those currencies for defensive purposes.
income earned in foreign nations or                                                                     
other taxes imposed with respect to                                                                     
investments in foreign nations, foreign                                                                 
exchange controls, which may include                                                                    
suspension of the ability to transfer                                                                   
currency from a given country, and                                                                      
default in foreign government                                                                           
securities. As a result of these                                                                        
factors, foreign securities markets may                                                                 
be less liquid and more volatile than                                                                   
U.S. markets and the Funds may                                                                          
experience difficulties and delays in                                                                   
converting foreign currencies back into                                                                 
U.S. dollars. Such events may cause the                                                                 
value of certain foreign securities to                                                                  
fluctuate widely and may make it                                                                        
difficult to accurately value foreign                                                                   
securities.                                                                                             

Several European countries began                                                                        
participating in the European Economic                                                                  
and Monetary Union, which has                                                                           
established a common currency for                                                                       
participating countries. This currency                                                                  
is commonly known as the "Euro." The                                                                    
long-term consequences of the Euro                                                                      
conversion for foreign exchange rates,                                                                  
interest rates and the value of European                                                                
securities in which the Fund may invest                                                                 
are unclear. The consequences may                                                                       
adversely affect the value and/or                                                                       
increase the volatility of securities                                                                   
held by the Fund.                                                                                       

LIQUIDITY RISK is the possibility that    We limit exposure to illiquid securities.                     
securities cannot be readily sold within                                                                
seven days at approximately the price                                                                   
that a fund has valued them.                                                                            

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                                                              HOW WE STRIVE TO MANAGE THEM              
                                          --------------------------------------------------------------
                 RISKS                                          DELAWARE U.S. GROWTH FUND               
----------------------------------------  --------------------------------------------------------------
                                                                                                        
CREDIT RISK is the possibility that a     Fixed-income securities are not typically a significant       
bond's issuer (or an entity that insures  component of our strategy. However, when we do invest in      
the bond) will be unable to make timely   fixed-income securities, we will not hold more than 10% of net
payments of interest and principal.       assets in high-yield, non-investment grade bonds. This        
Bonds rated below investment grade are    limitation, combined with our careful, credit-oriented bond   
particularly subject to this risk.        selection and our commitment to hold a diversified selection  
                                          of high-yield bonds are designed to manage this risk.         

FUTURES AND OPTIONS RISK is the           We will not use futures and options for speculative reasons.  
possibility that a fund may experience a  We may use options and futures to protect gains in the        
loss if it employs an options or futures  portfolio without actually selling a security. We may also use
strategy related to a security or a       options and futures to quickly invest excess cash so that the 
market index and that security or index   portfolio is generally fully invested.                        
moves in the opposite direction from                                                                    
what the manager anticipated. Futures                                                                   
and options also involve additional                                                                     
expenses, which could reduce any benefit                                                                
or increase any loss that a fund gains                                                                  
from using the strategy.                                                                                

PORTFOLIO TURNOVER RATES reflect the      The Fund will normally experience an annual portfolio turnover
amount of securities that are replaced    rate exceeding 100%, but this rate is not expected to exceed  
from the beginning of the year to the     200%.                                                         
end of the year by the Fund. The higher                                                                 
the amount of portfolio activity, the                                                                   
higher the brokerage costs and other                                                                    
transaction costs of the Fund are likely                                                                
to be. The amount of portfolio activity                                                                 
will also affect the amount of taxes                                                                    
payable by the Fund's shareholders that                                                                 
are subject to federal income tax, as                                                                   
well as the character (ordinary income                                                                  
vs. capital gains) of such tax                                                                          
obligations.                                                                                            


DISCLOSURE OF PORTFOLIO HOLDINGS                                                
A description of the Fund's policies and procedures with respect to the         
disclosure of the Fund's portfolio securities is available in the Fund's        
Statement of Additional Information and at www.delawarefunds.com.               

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WHO MANAGES THE FUND                                                            

INVESTMENT MANAGER                                                              
The Fund is managed by Delaware Management Company, a series of Delaware        
Management Business Trust, which is an indirect, wholly owned subsidiary of     
Delaware Management Holdings, Inc. Delaware Management Company makes investment 
decisions for the Fund, manages the Fund's business affairs and provides daily  
administrative services. For their services to the Fund, the manager was paid an
aggregate fee of 0% of average daily net assets for the last fiscal year.       

PORTFOLIO MANAGERS                                                              
Gerald S. Frey has primary responsibility for making day-to-day investment      
decisions for Delaware U.S. Growth Fund. Mr. Frey has been part of the growth   
team that has managed the Fund since 2001. In making investment decisions for   
the Fund, Mr. Frey regularly consults with Marshall T. Bassett, John A. Heffern,
Jeffrey W. Hynoski, Steven T. Lampe, Matthew Todorow and Lori P. Wachs.         

GERALD S. FREY, Managing Director/Chief Investment Officer, Growth Investing,   
has 24 years' experience in the money management business and holds a BA in     
Economics from Bloomsburg University and attended Wilkes College and New York   
University. Prior to joining Delaware Investments in 1996, Mr. Frey was a Senior
Director with Morgan Grenfell Capital Management in New York.                   

MARSHALL T. BASSETT, Senior Vice President/Senior Portfolio Manager, holds a    
bachelor's degree and an MBA from Duke University. Prior to joining Delaware    
Investments in 1997, he served as Vice President in Morgan Stanley Asset        
Management's Emerging Growth Group, where he analyzed small growth companies and
as a trust officer at Sovran Bank and Trust Company.                            

JOHN A. HEFFERN, Senior Vice President/Portfolio Manager, holds a bachelor's    
degree and an MBA from the University of North Carolina at Chapel Hill. He      
joined Delaware Investments in 1997. Previously, he was a Senior Vice President,
Equity Research at NatWest Securities Corporation's Specialty Finance Services  
unit and a Principal and Senior Regional Bank Analyst at Alex. Brown & Sons.    

JEFFREY W. HYNOSKI, Vice President/Portfolio Manager, joined Delaware           
Investments in 1998. Previously, he served as a Vice President at Bessemer Trust
Company in the mid and large capitalization growth group. Prior to that, Mr.    
Hynoski held positions at Lord Abbett & Co. and Cowen Asset Management. Mr.     
Hynoski holds a BS in Finance from the University of Delaware and an MBA from   
Pace University.                                                                

STEVEN T. LAMPE, Vice President/Portfolio Manager, received a bachelor's degree 
in Economics and an MBA with a concentration in Finance from the University of  
Pennsylvania's Wharton School. He joined Delaware Investments in 1995. He       
previously served as a manager at Price Waterhouse, specializing in financial   
services firms. Mr. Lampe is a Certified Public Accountant.                     

MATTHEW TODOROW, Vice President/Portfolio Manager, holds a BBA from Temple      
University and an MBA from the University of Georgia's Terry College of         
Business. Prior to joining Delaware Investments in 2003, he served as Executive 
Director for Morgan Stanley Investment Management and as Portfolio Manager for  
the Small/Mid Cap Group. Prior to that, he held positions at Keeton Capital     
Management.                                                                     

LORI P. WACHS, Vice President/Portfolio Manager, joined Delaware Investments in 
1992 from Goldman Sachs, where she was an equity analyst for two years. She is a
graduate of the University of Pennsylvania's Wharton School, where she majored  
in Finance and Oriental Studies.                                                

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WHO'S WHO?                                                                      
This diagram shows the various organizations involved with managing,            
administering and servicing the Delaware Investments Funds.                     

[GRAPHIC OMITTED: DIAGRAM SHOWING THE VARIOUS ORGANIZATIONS INVOLVED WITH       
MANAGING, ADMINISTERING, AND SERVICING THE DELAWARE INVESTMENTS FUNDS]          

                                   BOARD OF TRUSTEES

                                                        [Enlarge/Download Table]
                                                                                                              
INVESTMENT MANAGER                                                                    CUSTODIAN               
Delaware Management Company                                                           JP Morgan Chase Bank    
2005 Market Street                                                                    4 Chase Metrotech Center
Philadelphia, PA 19103-7094                           THE FUND                        Brooklyn, NY 11245      

                             DISTRIBUTOR                          SERVICE AGENT                               
                             Delaware Distributors, L.P.          Delaware Service Company, Inc.              
                             2005 Market Street                   2005 Market Street                          
                             Philadelphia, PA 19103-7094          Philadelphia, PA 19103-7094                 

                             FINANCIAL INTERMEDIARY WHOLESALER                                                
                             Lincoln Financial Distributors, Inc.                                             
                             2001 Market Street                                                               
                             Philadelphia, PA 19103-7055                                                      

PORTFOLIO MANAGERS                                                              
(see page 12 for details)                                                       

SHAREHOLDERS

BOARD OF TRUSTEES A mutual fund is governed by a Board of Trustees which has    
oversight responsibility for the management of the fund's business affairs.     
Trustees establish procedures and oversee and review the performance of the     
investment manager, the distributor and others that perform services for the    
fund. Generally, at least 40% of the Board of Trustees must be independent of   
the fund's investment manager and distributor. However, the Delaware U.S. Growth
Fund relies on certain exemptive rules created by the SEC that require the Board
of Trustees overseeing the Fund to be comprised of a majority of such           
independent trustees. These independent fund trustees, in particular, are       
advocates for shareholder interests.                                            

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

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

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

DISTRIBUTOR Most mutual funds continuously offer new shares to the public       
through distributors who are regulated as broker/dealers and are subject to NASD
Regulation, Inc. (NASDR(SM)) rules governing mutual fund sales practices.       

FINANCIAL INTERMEDIARY WHOLESALER Pursuant to a contractual arrangement with    
Delaware Distributors, L.P., Lincoln Financial Distributors, Inc. (LFD) is      
primarily responsible for promoting the sale of Fund shares through             
broker/dealers, financial advisors and other financial intermediaries.          

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

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

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ABOUT YOUR ACCOUNT                                                              

INVESTING IN THE FUND                                                           

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

o    retirement plans introduced by persons not associated with brokers or      
  dealers that are primarily engaged in the retail securities business and
rollover individual retirement accounts from such plans;              

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

o    institutional advisory accounts of the Fund's manager, or its affiliates   
     and those having client relationships with Delaware Investment Advisers, an
   affiliate of the manager, or its affiliates and their corporate sponsors,
 as well as subsidiaries and related employee benefit plans and rollover
   individual retirement accounts from such institutional advisory accounts;

o    a bank, trust company and similar financial institution investing for its  
own account or for the account of its trust customers for whom the    
 financial institution is exercising investment discretion in purchasing
    shares of the Class, except where the investment is part of a program that
 requires payment to the financial institution of a Rule 12b-1 Plan fee;

o    registered investment advisors investing on behalf of clients that consist 
solely of institutions and high net-worth individuals having at least 
 $1,000,000 entrusted to the advisor for investment purposes. Use of the
     Institutional Class shares is restricted to advisors who are not affiliated
     or associated with a broker or dealer and who derive compensation for their
services exclusively from advisory clients;                           

o    certain plans qualified under Section 529 of the Internal Revenue Code for 
  which the Funds' manager, distributor or service agent or one or more of
their affiliates provide record keeping, administrative, investment   
management, marketing, distribution or similar services; or           

o    programs sponsored by financial intermediaries where such program requires 
the purchase of Institutional Class shares.                           

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HOW TO BUY SHARES                                                               

[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]                                  

BY MAIL                                                                         
Complete an investment slip and mail it with your check, made payable to the    
fund and class of shares you wish to purchase, to Delaware Investments, 2005    
Market Street, Philadelphia, PA 19103-7094. If you are making an initial        
purchase by mail, you must include a completed investment application (or an    
appropriate retirement plan application if you are opening a retirement account)
with your check.                                                                

[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]                                

BY WIRE                                                                         
Ask your bank to wire the amount you want to invest to Bank of New York, ABA    
#021000018, Bank Account number 8900403748. Include your account number and the 
name of the fund in which you want to invest. If you are making an initial      
purchase by wire, you must call us at 800 510-4015 so we can assign you an      
account number.                                                                 

[GRAPHIC OMITTED: ILLUSTRATION OF AN EXCHANGE SYMBOL]                           

BY EXCHANGE                                                                     
You can exchange all or part of your investment in one or more funds in the     
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that you may not exchange your shares for Class B or Class C  
shares. To open an account by exchange, call your Client Services Representative
at 800 510-4015.                                                                

[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]                                     

THROUGH YOUR FINANCIAL ADVISOR                                                  
Your financial advisor can handle all the details of purchasing shares,         
including opening an account. Your advisor may charge a separate fee for this   
service.                                                                        

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ABOUT YOUR ACCOUNT (continued)                                                  

HOW TO BUY SHARES (CONTINUED)                                                   

The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receives your order before the close of regular    
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a   
business day, you will pay that day's closing share price which is based on the 
Fund's net asset value. If your order is received after the close of regular    
trading, you will pay the next business day's price. A business day is any day  
that the New York Stock Exchange is open for business. We reserve the right to  
reject any purchase order. In particular, we reserve the right to reject any    
specific purchase order for any person whose transactions seem to follow a      
market timing pattern.                                                          

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

FAIR VALUATION                                                                  
When the Fund uses fair value pricing, it may take into account any factors it  
deems appropriate. The Fund may determine fair value based upon developments    
related to a specific security, current valuations of foreign stock indices (as 
reflected in U.S. futures markets) and/or U.S. sector or broader stock market   
indices. The prices of securities used by the Fund to calculate its NAV may     
differ from quoted or published prices for the same securities. Fair value      
pricing may involve subjective judgments and it is possible that the fair value 
determined for a security is materially different than the value that could be  
realized upon the sale of that security.                                        

The Fund anticipates using fair value pricing for securities primarily traded on
U.S. exchanges only under very limited circumstances, such as the early closing 
of the exchange on which a security is traded or suspension of trading in the   
security. Funds may use fair value pricing more frequently for securities       
primarily traded in non-U.S. markets because, among other things, most foreign  
markets close well before the Fund values its securities at 4:00 p.m., Eastern  
time. The earlier close of these foreign markets gives rise to the possibility  
that significant events, including broad market moves, may have occurred in the 
interim. To account for this, the Fund may frequently value many foreign equity 
securities using fair value prices based on third party vendor modeling tools to
the extent available.                                                           

Subject to the Board's oversight, the Fund's Board has delegated responsibility 
for valuing the Fund's assets to a Pricing Committee of the Manager, which      
operates under the policies and procedures approved by the Board, to value the  
Fund's assets on behalf of the Fund. The Pricing Committee values Fund assets as
described above.                                                                

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HOW TO REDEEM SHARES                                                            

[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]                                  

BY MAIL                                                                         
You can redeem your shares (sell them back to the fund) by mail by writing to:  
Delaware Investments, 2005 Market Street, Philadelphia, PA 19103-7094. All      
owners of the account must sign the request, and for redemptions of more than   
$100,000, you must include a signature guarantee for each owner. You can also   
fax your written request to 267 256-8990. Signature guarantees are also required
when redemption proceeds are going to an address other than the address of      
record on an account.                                                           

[GRAPHIC OMITTED: ILLUSTRATION OF A TELEPHONE]                                  

BY TELEPHONE                                                                    
You can redeem up to $100,000 of your shares by telephone. You may have the     
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you 
may have the proceeds sent directly to your bank by wire. Bank information must 
be on file before you request a wire redemption.                                

[GRAPHIC OMITTED: ILLUSTRATION OF A JAGGED LINE]                                

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

[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]                                     

THROUGH YOUR FINANCIAL ADVISOR                                                  
Your financial advisor can handle all the details of redeeming your shares. Your
advisor may charge a separate fee for this service.                             

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ABOUT YOUR ACCOUNT (continued)                                                  

HOW TO REDEEM SHARES (cont.)                                                    

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

When you send us a properly completed request to redeem or exchange shares, and 
we or an authorized agent receives the request before the close of regular      
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time), you   
will receive the net asset value next determined after we receive your request. 
If we receive your request after the close of regular trading on the New York   
Stock Exchange, you will receive the net asset value determined on the next     
business day. You may have to pay taxes on the proceeds from your sale of       
shares. We will send you a check, normally the next business day, but no later  
than seven days after we receive your request to sell your shares. If you       
purchased your shares by check, we will wait until your check has cleared, which
can take up to 15 days, before we send your redemption proceeds.                

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

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

FREQUENT TRADING OF FUND SHARES (MARKET TIMING)                                 

The Fund discourages purchases by market timers and purchase orders (including  
the purchase side of exchange orders) by shareholders identified as market      
timers may be rejected. The Fund's Board of Trustees has adopted policies and   
procedures designed to detect, deter and prevent trading activity detrimental to
the Fund and its shareholders, such as market timing. The Fund will consider    
anyone who follows a pattern of market timing in any fund in the Delaware       
Investments Family of Funds or the Optimum Funds Trust to be a market timer and 
may consider anyone who has followed a similar pattern of market timing at an   
unaffiliated fund family to be a market timer.                                  

Market timing of a fund occurs when investors make consecutive rapid short-term 
"roundtrips", or in other words, purchases into a fund followed quickly by      
redemptions out of that fund. A short-term roundtrip is any redemption of fund  
shares within 20 business days of a purchase of that fund's shares. If you make 
a second such short-term roundtrip in a fund within the same calendar quarter of
a previous short-term roundtrip in that fund, you may be considered a market    
timer. The purchase and sale of fund shares through the use of the exchange     
privilege are also included in determining whether market timing has occurred.  
The Fund also reserves the right to consider other trading patterns as market   
timing.                                                                         

Your ability to use the Fund's exchange privilege may be limited if you are     
identified as a market timer. If you are identified as a market timer, we will  
execute the redemption side of your exchange order but may refuse the purchase  
side of your exchange order. The Fund reserves the right to restrict, reject or 
cancel, without prior notice, any purchase or exchange order for any reason,    
including any purchase or exchange order accepted by any shareholder's financial
intermediary or in any omnibus-type account. Transactions placed in violation of
the Fund's market timing policy are not necessarily deemed accepted by the Fund 
and may be cancelled or revoked by the Fund on the next business day following  
receipt by the Fund.                                                            

However, sales of Fund shares back to a Fund or redemptions will continue to be 
permitted in accordance with the terms of the Fund's current Prospectus. This   
may result in an undesirable situation where a shareholder with an account      
closed to new purchases could be faced with a costly redemption of Fund shares  
if, for example, these shares have declined in value, the shareholder recently  
paid a front-end sales charge or the shares are subject to a CDSC, or the sale  
results in adverse tax consequences to the shareholder. To avoid this risk, a   
shareholder should carefully monitor the purchases, sales, and exchanges of Fund
shares and avoid frequent trading in Fund shares.                               

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The Fund reserves the right to modify this policy, including any monitoring     
procedures and the procedures to close accounts to new purchases established    
from time to time to effectuate this policy, at any time without notice. Though 
the implementation of this policy involves judgments that are inherently        
subjective and involves some selectivity in their application, we seek to make  
judgments and applications that are consistent with the interests of the Fund's 
shareholders. While we will seek to take actions that will detect market timing,
we cannot represent that such trading activity can be completely eliminated.    

RISKS OF MARKET TIMING                                                          

By realizing profits through short-term trading, shareholders that engage in    
rapid purchases and sales or exchanges of the Fund's shares dilute the value of 
shares held by long-term shareholders. Volatility resulting from excessive      
purchases and sales or exchanges of Fund shares, especially involving large     
dollar amounts, may disrupt efficient portfolio management. In particular, a    
Fund may have difficulty implementing its long-term investment strategies if it 
is forced to maintain a higher level of its assets in cash to accommodate       
significant short-term trading activity. Excessive purchases and sales or       
exchanges of a Fund's shares may force the Fund to sell portfolio securities at 
inopportune times to raise cash to accommodate short-term trading activity. In  
addition, a Fund may incur increased expenses if one or more shareholders engage
in excessive or short-term trading. For example, a Fund may be forced to        
liquidate investments as a result of short-term trading and incur increased     
brokerage costs and realization of taxable capital gains without attaining any  
investment advantage. All of these factors may adversely affect Fund            
performance.                                                                    

A Fund that invests significantly in foreign securities may be particularly     
susceptible to short-term trading strategies. This is because foreign securities
are typically traded on markets that close well before the time a Fund          
calculates its NAV at 4:00 p.m. Eastern time, which gives rise to the           
possibility that developments may have occurred in the interim that would affect
the value of these securities. The time zone differences among international    
stock markets can allow a shareholder engaging in a short-term trading strategy 
to exploit differences in Fund share prices that are based on closing prices of 
foreign securities established some time before the Fund calculates its own     
share price. Any Fund that invests in securities that are, among other things,  
thinly traded, traded infrequently, or relatively illiquid has the risk that the
current market price for the securities may not accurately reflect current      
market values. A shareholder may seek to engage in short-term trading to take   
advantage of these pricing differences. Funds that may be adversely affected by 
such arbitrage include, in particular, funds that significantly invest in small 
cap securities, technology and other specific industry sector securities, and in
certain fixed-income securities, such as high yield bonds, asset-backed         
securities, or municipal bonds.                                                 

TRANSACTION MONITORING PROCEDURES                                               

The Fund, through its transfer agent, maintains surveillance procedures designed
to detect excessive or short-term trading in Fund shares. This monitoring       
process involves several factors, which includes scrutinizing transactions in   
Fund shares for transactions in violation of the Fund's market timing policy or 
other patterns of short-term or excessive trading. For purposes of these        
transaction monitoring procedures, the Funds may consider trading activity in   
multiple accounts under common ownership, control, or influence. Trading        
activity identified by either, or a combination, of these factors, or as a      
result of any other information available at the time, will be evaluated to     
determine whether such activity might constitute excessive or short-term        
trading. These procedures may be modified from time to time, as necessary or    
appropriate to improve the detection of excessive or short-term trading or to   
address specific circumstances, such as for certain retirement plans, to conform
to plan exchange limits or U.S. Department of Labor regulations, or for certain 
automated or pre-established exchange, asset allocation or dollar cost averaging
programs, or omnibus account arrangements.                                      

Omnibus account arrangements are common forms of holding shares of the Funds,   
particularly among certain brokers, dealers, and other financial intermediaries,
including sponsors of retirement plans and variable insurance products. The     
Funds seek to apply their monitoring procedures to these omnibus account        
arrangements and to the individual participant level in such accounts. In       
efforts to discourage market timers in such accounts the Funds may consider     
enforcement against market timers at the participant level and at the omnibus   
level, up to and including termination of the omnibus account.                  

LIMITATIONS ON ABILITY TO DETECT AND CURTAIL MARKET TIMING                      

Shareholders seeking to engage in market timing may employ a variety of         
strategies to avoid detection and, despite the efforts of the Fund and its      
agents to detect market timing in Fund shares, there is no guarantee that the   
Fund will be able to identify these shareholders or curtail their trading       
practices. In particular, the Fund may not be able to detect market timing in   
Fund shares attributable to a particular investor who effects purchase and/or   
exchange activity in Fund shares through omnibus accounts. Also, multiple tiers 
of these entities may exist, each utilizing an omnibus account                  

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arrangement, which may further compound the difficulty of detecting excessive or
short duration trading activity in Fund shares.                                 

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              
Dividends and capital gains, if any, are paid annually. We automatically        
reinvest all dividends and any capital gains, unless you direct us to do        
otherwise.                                                                      

In addition, in order to satisfy certain distribution requirements of the Tax   
Reform Act of 1986, the Fund may declare special year-end dividend and capital  
gains distributions during November and December to shareholders of record on a 
date in such month. Such distributions, if received by shareholders by January, 
are deemed to have been paid by the Fund and received by shareholders on the    
earlier of the date paid or December 31 of the prior year.                      

The tax status of your dividends from the Fund is the same whether you reinvest 
your dividends or receive them in cash.                                         

Distributions from the Fund's long-term capital gains are taxable as capital    
gains, while distributions from short-term capital gains and net investment     
income are generally taxable as ordinary income. The tax rate on capital gains  
is less than the tax rate on ordinary income.                                   

You also may be subject to state and local taxes on distributions. Tax laws are 
subject to change, so we urge you to consult your tax advisor about your        
particular tax situation and how it might be affected by current tax law.       

Any capital gains may be taxable at different rates depending on the length of  
time the Fund held the assets.                                                  

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

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CERTAIN MANAGEMENT CONSIDERATIONS                                               

INVESTMENTS BY FUND OF FUNDS AND INVESTMENT VEHICLES THAT OPERATE SIMILARLY TO  
FUNDS OF FUNDS                                                                  
The Fund accepts investments from funds of funds, including those within        
Delaware Investments family, and investment vehicles that operate similarly to  
funds of funds, such as 529 plans. A "529 Plan" is a college savings program    
that operates under section 529 of the Internal Revenue Code. From time to time,
the Fund may experience large investments or redemptions due to allocations or  
rebalancings by these funds of funds and/or similar investment vehicles. While  
it is impossible to predict the overall impact of these transactions over time, 
there could be adverse effects on portfolio management. For example, the Fund   
may be required to sell securities or invest cash at times when it would not    
otherwise do so. These transactions could also have tax consequences if sales of
securities result in gains, and could also increase transaction costs or        
portfolio turnover. The manager will monitor transactions by the funds of funds 
and/or similar investment vehicles and will attempt to minimize any adverse     
effects on the Fund and funds of funds and/or similar investment vehicle as a   
result of these transactions.                                                   

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FINANCIAL HIGHLIGHTS                                                            

THE FINANCIAL HIGHLIGHTS TABLE is intended to help you understand the Fund's    
financial performance. All "per share" information reflects financial results   
for a single Fund share. This information has been audited by Ernst & Young LLP,
whose report, along with the Fund's financial statements, is included in the    
Fund's annual report, which is available upon request by calling 800 523-1918.  

                                                        [Enlarge/Download Table]

                                                                         INSTITUTIONAL CLASS SHARES                         
                                                                               YEAR ENDED 10/31                             
                                                    ----------------------------------------------------------------------  
U.S. GROWTH FUND                                       2004           2003           2002           2001           2000     
--------------------------------------------------  ----------     ----------     ----------     ----------     ----------  
                                                                                                                            
Net asset value, beginning of period                $   11.270     $    9.600     $   12.190     $   19.970     $   15.710  

INCOME (LOSS) FROM INVESTMENT OPERATIONS:                                                                                   
Net investment loss(1)                                  (0.031)        (0.010)        (0.024)            --         (0.111) 
Net realized and unrealized gain (loss) on                                                                                  
 investments                                            (0.159)         1.680         (2.566)        (7.549)         4.963  
                                                    ----------     ----------     ----------     ----------     ----------  
Total from investment operations                        (0.190)         1.670         (2.590)        (7.549)         4.852  
                                                    ----------     ----------     ----------     ----------     ----------  

LESS DIVIDENDS AND DISTRIBUTIONS FROM:                                                                                      

Net realized gain on investments                            --             --             --         (0.231)        (0.592) 
                                                    ----------     ----------     ----------     ----------     ----------  
Total dividends and distributions                           --             --             --         (0.231)        (0.592) 
                                                    ----------     ----------     ----------     ----------     ----------  

NET ASSET VALUE, END OF PERIOD                      $   11.080     $   11.270     $    9.600     $   12.190     $   19.970  
                                                    ==========     ==========     ==========     ==========     ==========  

TOTAL RETURN(2)                                          (1.69)%        17.40%        (21.25)%       (38.20)%        31.21% 

RATIOS AND SUPPLEMENTAL DATA                                                                                                
Net assets, end of period (000 omitted)             $    2,666     $   27,420     $   30,575     $   42,302     $   71,726  
Ratio of expenses to average net assets                   1.10%          1.10%          1.10%          1.16%          1.30% 
Ratio of expenses to average net assets prior to                                                                            
 expense limitations and expenses paid indirectly         1.80%          1.94%          1.58%          1.40%          1.30% 
Ratio of net investment loss to average net assets       (0.29)%        (0.10)%        (0.21)%         0.00%         (0.57)%
Ratio of net investment loss to average net assets                                                                          
 prior to expense limitation and expenses paid                                                                              
 indirectly                                              (0.99)%        (0.94)%        (0.69)%        (0.24)%        (0.57)%
Portfolio turnover                                         158%            77%           103%            70%           111% 

(1) The average shares outstanding method has been applied for per share        
information.                                                                    
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of dividends and distributions at net
asset value. Total investment return reflects a waiver and payment of fees by   
the manager, as applicable. Performance would have been lower had the expense   
limitation not been in effect.                                                  

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HOW TO READ THE FINANCIAL HIGHLIGHTS                                            

NET INVESTMENT INCOME (LOSS)                                                    
Net investment income (loss) includes dividend and interest income earned from a
fund's investments; it is after expenses have been deducted.                    

NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS                          
A realized gain occurs when we sell an investment at a profit, while a realized 
loss occurs when we sell an investment at a loss. When an investment increases  
or decreases in value but we do not sell it, we record an unrealized gain or    
loss. The amount of realized gain per share, if any, that we pay to shareholders
would be listed under "Less dividends and distributions from net realized gain  
on investments."                                                                

NET ASSET VALUE (NAV)                                                           
This is the value of a mutual fund share, calculated by dividing the net assets 
by the number of shares outstanding.                                            

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

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

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

RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS                              
We determine this ratio by dividing net investment income by average net assets.

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

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HOW TO USE THIS GLOSSARY                                                        
The glossary includes definitions of investment terms, many of which are used   
throughout the Prospectus. If you would like to know the meaning of an          
investment term that is not explained in the text please check the glossary.    

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

AVERAGE MATURITY                                                                
An average of when the individual bonds and other debt securities held in a     
portfolio will mature.                                                          

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

BOND RATINGS                                                                    
Independent evaluations of creditworthiness, ranging from Aaa/AAA (highest      
quality) to D (lowest quality). Bonds rated Baa/BBB or better are considered    
investment grade. See also Nationally recognized statistical ratings            
organization.                                                                   

CAPITAL                                                                         
The amount of money you invest.                                                 

CAPITAL APPRECIATION                                                            
An increase in the value of an investment.                                      

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

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

COMPOUNDING                                                                     
Earnings on an investment's previous earnings.                                  

CONSUMER PRICE INDEX (CPI)                                                      
Measurement of U.S. inflation; represents the price of a basket of commonly     
purchased goods.                                                                

CORPORATE BOND                                                                  
A debt security issued by a corporation. See Bond.                              

COST BASIS                                                                      
The original purchase price of an investment, used in determining capital gains 
and losses.                                                                     

DEPRECIATION                                                                    
A decline in an investment's value.                                             

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

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DIVIDEND DISTRIBUTION                                                           
Payments to mutual fund shareholders of dividends passed along from the fund's  
portfolio of securities.                                                        

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

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

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

GOVERNMENT SECURITIES                                                           
Securities issued by U.S. government or its agencies. They include Treasuries as
well as agency-backed securities such as Fannie Maes.                           

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

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

MANAGEMENT FEE                                                                  
The amount paid by a mutual fund to the investment advisor for management       
services, expressed as an annual percentage of the fund's average daily net     
assets.                                                                         

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

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

NASD REGULATION, INC. (NASDR(SM))                                               
The independent subsidiary of the National Association of Securities Dealers,   
Inc. responsible for regulating the securities industry.                        

NATIONALLY RECOGNIZED STATISTICAL RATINGS ORGANIZATION (NRSRO)                  
A company that assesses the credit quality of bonds, commercial paper, preferred
and common stocks and municipal short-term issues, rating the probability that  
the issuer of the debt will meet the scheduled interest payments and repay the  
principal. Ratings are published by such companies as Moody's Investors Service,
Inc. (Moody's), Standard & Poor's (S&P) and Fitch, Inc. (Fitch).                

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

NET ASSETS                                                                      
Net assets for purposes of a fund's 80% policy means the total value of all     
assets in the fund's portfolio, minus any liabilities, plus the amount of the   
fund's borrowings, if any, for investment purposes.                             

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PREFERRED STOCK                                                                 
Preferred stock has preference over common stock in the payment of dividends and
liquidation of assets. Preferred stocks also often pay dividends at a fixed rate
and are sometimes convertible into common stock.                                

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

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

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

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

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

S&P 500 INDEX                                                                   
The S&P 500 Index; an unmanaged index of 500 widely held common stocks that is  
often used to represent performance of the U.S. stock market.                   

SEC (SECURITIES AND EXCHANGE COMMISSION)                                        
Federal agency established by Congress to administer the laws governing the     
securities industry, including mutual fund companies.                           

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

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

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

STATEMENT OF ADDITIONAL INFORMATION (SAI)                                       
The document serving as "Part B" of a fund's prospectus that provides more      
detailed information about the fund's organization, investments, policies and   
risks.                                                                          

STOCK                                                                           
An investment that represents a share of ownership (equity) in a corporation.   
Stocks are often referred to as common stock or equities.                       

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

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

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DELAWARE U.S. GROWTH FUND                                                       
Additional information about the Fund's investments is available in the Fund's  
annual and semi annual reports to shareholders. In the Fund's shareholder       
reports, you will find a discussion of the market conditions and investment     
strategies that significantly affected the Fund's performance during the report 
period. You can find more detailed information about the Fund in the current    
Statement of Additional Information, which we have filed electronically with the
Securities and Exchange Commission (SEC) and which is legally a part of this    
Prospectus. If you want a free copy of the Statement of Additional Information, 
the annual or semi annual report, or if you have any questions about investing  
in the Fund, you can write to us at 2005 Market Street, Philadelphia, PA        
19103-7094, or call toll-free 800 510-4015. You may also obtain additional      
information about the Fund from your financial advisor.                         

You can find reports and other information about the Fund on the EDGAR Database 
on the SEC web site (http://www.sec.gov). You can also get copies of this       
information, after payment of a duplicating fee, by e-mailing the SEC at        
publicinfo@sec.gov or by writing to the Public Reference Section of the SEC,    
Washington, D.C. 20549-0102. Information about the Fund, including its Statement
of Additional Information, can be reviewed and copied at the SEC's Public       
Reference Room in Washington, D.C. You can get information on the Public        
Reference Room by calling the SEC at 202 942-8090.                              

WEB SITE                                                                        
www.delawareinvestments.com                                                     

E-MAIL                                                                          
service@delinvest.com                                                           

CLIENT SERVICES REPRESENTATIVE                                                  

800 510-4015                                                                    

DELAPHONE SERVICE                                                               

800 362-FUND (800 362-3863)                                                     

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

 [LOGO OF DELAWARE INVESTMENTS(SM)

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

DELAWARE U.S. GROWTH FUND SYMBOLS     CUSIP     NASDAQ                          
---------------------------------   ---------   ------                          
Institutional Class                 245917802    DEUIX                          

                                                                              28

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DELAWARE GROUP ADVISER FUNDS                                                    

DELAWARE DIVERSIFIED INCOME FUND                                                
DELAWARE U.S. GROWTH FUND                                                       

CLASS A SHARES                                                                  
CLASS B SHARES                                                                  
CLASS C SHARES                                                                  
CLASS R SHARES                                                                  
INSTITUTIONAL CLASS                                                             

PART B                                                                          

STATEMENT OF                                                                    
ADDITIONAL INFORMATION                                                          

FEBRUARY 25, 2005                                                               

                                              [LOGO OF DELAWARE INVESTMENTS(SM)]

Delaware Investments includes funds with a                                      
wide range of investment objectives. Stock                                      
funds, income funds, national and                                               
state-specific tax-exempt funds, money market                                   
funds, global and international funds and                                       
closed-end funds give investors the ability                                     
to create a portfolio that fits their                                           
personal financial goals. For more                                              
information, shareholders of the Fund Classes                                   
should contact their financial advisor or                                       
call Delaware Investments at 800 523-1918 and                                   
shareholders of the Institutional Class                                         
should contact Delaware Investments at 800                                      
510-4015.                                                                       

INVESTMENT MANAGER                                                              
Delaware Management Company                                                     
2005 Market Street                                                              
Philadelphia, PA  19103-7094                                                    

NATIONAL DISTRIBUTOR                                                            
Delaware Distributors, L.P.                                                     
2005 Market Street                                                              
Philadelphia, PA 19103-7094                                                     

SHAREHOLDER SERVICING,                                                          
DIVIDEND DISBURSING,                                                            
ACCOUNTING SERVICES                                                             
AND TRANSFER AGENT                                                              
Delaware Service Company, Inc.                                                  
2005 Market Street                                                              
Philadelphia, PA 19103-7094                                                     

LEGAL COUNSEL                                                                   
Stradley, Ronon, Stevens & Young, LLP                                           
2005 Market Street                                                              
Philadelphia, PA 19103                                                          

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                                   
Ernst & Young LLP                                                               
2001 Market Street                                                              
Philadelphia, PA 19103                                                          

CUSTODIAN                                                                       
JPMorgan Chase Bank                                                             
4 Chase Metrotech Center                                                        
Brooklyn, NY 11245                                                              

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 STATEMENT OF ADDITIONAL INFORMATION

 FEBRUARY 25, 2005

DELAWARE GROUP ADVISER FUNDS
DELAWARE DIVERSIFIED INCOME FUND
 DELAWARE U.S. GROWTH FUND

2005 MARKET STREET
 PHILADELPHIA, PA 19103-7094

FOR MORE INFORMATION ABOUT THE INSTITUTIONAL CLASS: 800 510-4015

 FOR PROSPECTUS, PERFORMANCE AND INFORMATION ON EXISTING ACCOUNTS OF
CLASS A SHARES, CLASS B SHARES, CLASS C SHARES AND
 CLASS R SHARES: NATIONWIDE 800 523-1918

DEALER SERVICES: (BROKER/DEALERS ONLY) NATIONWIDE 800 362-7500

Delaware Group Adviser Funds ("Adviser Funds") is a             
professionally-managed mutual fund of the series type which currently offers two
series of shares: Delaware Diversified Income Fund and Delaware U.S. Growth Fund
(individually, a "Fund", and collectively, the "Funds"). This Statement of      
Additional Information describes Delaware Diversified Income Fund and Delaware  
U.S. Growth Fund.                                                               

      Each Fund offers three retail classes: Class A Shares, Class B Shares,
Class C Shares, Class R Shares and an Institutional Class (together referred to 
as the "Fund Classes"). Each Fund also offers Class R Shares and an             
Institutional Class (the "Institutional Class"). Each class may be referred to  
individually as a "Class" and collectively as the "Classes."                    

      This Statement of Additional Information ("Part B" of the registration
statement) supplements the information contained in the current Prospectuses for
Delaware Diversified Income Fund and Delaware U.S. Growth Fund dated February   
25, 2005, as they may be amended from time to time. Part B should be read in    
conjunction with the respective Class' Prospectuses. Part B is not itself a     
Prospectus but is, in its entirety, incorporated by reference into each Class'  
Prospectuses. A Prospectus may be obtained by writing or calling your investment
dealer or by contacting the Funds' national distributor, Delaware Distributors, 
L.P. (the "Distributor"), at the above address or by calling the above phone    
numbers. The Funds' financial statements, the notes relating thereto, the       
financial highlights and the report of the Independent Registered Public        
Accounting Firm are incorporated by reference from the Annual Report into this  
Part B. The Annual Report will accompany any request for Part B. The Annual     
Report can be obtained, without charge, by calling 800 523-1918.                

                                                        [Enlarge/Download Table]

TABLE OF CONTENTS                               PAGE                                              PAGE
----------------------------------------------  ----  ------------------------------------------  ----
                                                                                                      
COVER PAGE                                        2    DIVIDENDS, DISTRIBUTIONS AND TAXES          55 
INVESTMENT RESTRICTIONS AND POLICIES              3    INVESTMENT MANAGEMENT AGREEMENT             61 
PERFORMANCE INFORMATION                          19    OFFICERS AND TRUSTEES                       64 
TRADING PRACTICES AND BROKERAGE                  24    GENERAL INFORMATION                         72 
PURCHASING SHARES                                26    FINANCIAL STATEMENTS                        77 
INVESTMENT PLANS                                 38    APPENDIX A--DESCRIPTION OF RATINGS          78 
DETERMINING OFFERING PRICE AND NET ASSET VALUE   47                                                   
REDEMPTION AND EXCHANGE                          48                                                   

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INVESTMENT RESTRICTIONS AND POLICIES                                            

INVESTMENT RESTRICTIONS                                                         

FUNDAMENTAL RESTRICTIONS - Each Fund has adopted the following  
restrictions which cannot be changed without approval by the holders of a       
"majority" of each Fund's outstanding shares, which is a vote by the holders of 
the lesser of a) 67% or more of the voting securities present in person or by   
proxy at a meeting, if the holders of more than 50% of the outstanding voting   
securities are present or represented by proxy; or b) more than 50% of the      
outstanding voting securities. The percentage limitations contained in the      
restrictions and policies set forth herein apply at the time of purchase of     
securities.                                                                     

The Funds shall not:                                                            

       1.      Make investments that will result in the concentration (as that
term may be defined in the Investment Company Act of 1940 ("1940 Act"), any rule
or order thereunder, or U.S. Securities and Exchange Commission ("SEC") staff   
interpretation thereof) of their investments in the securities of issuers       
primarily engaged in the same industry, provided that this restriction does not 
limit each Fund from investing in obligations issued or guaranteed by the U.S.  
government, its agencies or instrumentalities, or in tax-exempt securities or   
certificates of deposit.                                                        

        2.      Borrow money or issue senior securities, except as the 1940 Act,
any rule or order thereunder, or SEC staff interpretation thereof, may permit.  

    3.      Underwrite the securities of other issuers, except that each
Fund may engage in transactions involving the acquisition, disposition or resale
of their portfolio securities, under circumstances where they may be considered 
to be an underwriter under the 1933 Act.                                        

    4.      Purchase or sell real estate, unless acquired as a result of
ownership of securities or other instruments and provided that this restriction 
does not prevent the Funds from investing in issuers which invest, deal or      
otherwise engage in transactions in real estate or interests therein, or        
investing in securities that are secured by real estate or interests therein.   

   5.      Purchase or sell physical commodities, unless acquired as a
result of ownership of securities or other instruments and provided that this   
restriction does not prevent the Funds from engaging in transactions involving  
futures contracts and options thereon or investing in securities that are       
secured by physical commodities.                                                

       6.      Make loans, provided that this restriction does not prevent the
Funds from purchasing debt obligations, entering into repurchase agreements,    
loaning their assets to broker/dealers or institutional investors and investing 
in loans, including assignments and participation interests.                    

      NON-FUNDAMENTAL RESTRICTIONS - In addition to the fundamental policies
and investment restrictions described above, and the various general investment 
policies described in the prospectus, the Funds will be subject to the following
investment restrictions, which are considered non-fundamental and may be changed
by the Board of Trustees without shareholder approval.                          

       1.      Each Fund is permitted to invest in other investment companies,
including open-end, closed-end or unregistered investment companies, either     
within the percentage limits set forth in the 1940 Act, any rule or order       
thereunder, or SEC staff interpretation thereof, or without regard to percentage
limits in connection with a merger, reorganization, consolidation or other      
similar transaction. However, the Delaware U.S. Growth Fund may not operate as a
"fund of funds" which invests primarily in the shares of other investment       
companies as permitted by Section 12(d)(1)(F) or (G) of the 1940 Act, if its own
shares are utilized as investments by such a "fund of funds."                   

   2.      Each Fund may not invest more than 15% of its net assets in
securities which it cannot sell or dispose of in the ordinary course of business
within seven days at approximately the value at which Delaware U.S. Growth Fund 
has valued the investment.                                                      

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     The following are additional non-fundamental investment restrictions:

The Fund normally may not:                                                      

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

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

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

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

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

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

  7.      Borrow money, except from banks for temporary or emergency
purposes not in excess of one-third of the value of the Fund's assets, and      
except that Fund may enter into reverse repurchase agreements and engage in     
"roll" transactions, provided that reverse repurchase agreements, "roll"        
transactions and any other transactions constituting borrowing by the Fund may  
not exceed one-third of the Fund's total assets and if the Fund's borrowing,    
including reverse repurchase agreements, exceeds 5% of the value of the Fund's  
total assets, we will not purchase any additional securities;                   

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

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

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

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

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

In order to comply with certain state "blue sky" restrictions, Delaware U.S.    
Growth Fund will not as a matter of operating policy:                           

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

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

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

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

 The Prospectuses discuss each Fund's investment objective and the
policies followed to achieve that objective. The following discussion           
supplements the description of the Fund's investment objectives and policies in 
the Prospectuses.                                                               

LOWER-RATED DEBT SECURITIES                                                     

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

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

     Since the risk of default is higher for lower-quality securities, the
Manager's research and credit analysis is an integral part of managing any      
securities of this type held by each Fund. In considering investments for each  
Fund, the Manager will attempt to identify those issuers of high-yielding       
securities whose financial condition is adequate to meet future obligations, has
improved, or is expected to improve in the future. The Manager's analysis       

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focuses on relative values based on such factors as interest or dividend        
coverage, asset coverage, earnings prospects, and the experience and managerial 
strength of the issuer. There can be no assurance that such analysis will prove 
accurate.                                                                       

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

MORTGAGE-BACKED SECURITIES                                                      

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

   GOVERNMENT NATIONAL MORTGAGE ASSOCIATION CERTIFICATES. Certificates
issued by the Government National Mortgage Association ("GNMA") are             
mortgage-backed securities representing part ownership of a pool of mortgage    
loans, which are issued by lenders such as mortgage bankers, commercial banks   
and savings and loan associations, and are either insured by the Federal Housing
Administration or guaranteed by the Veterans Administration. A pool of these    
mortgages is assembled and, after being approved by GNMA, is offered to         
investors through securities dealers. The timely payment of interest and        
principal on each mortgage is guaranteed by GNMA and backed by the full faith   
and credit of the U.S. government.                                              

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

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

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

FOREIGN INVESTMENTS                                                             

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

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

      Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments adverse to
the interests of U.S. investors, including the possibility of expropriation or  
nationalization of assets, confiscatory taxation, restrictions on U.S.          
investment or on the ability to repatriate assets or convert currency into U.S. 
dollars, or other government intervention. There may be a greater possibility of
default by foreign governments or foreign government-sponsored enterprises.     
Investments in foreign countries also involve a risk of local political,        
economic, or social instability, military action or unrest, or adverse          
diplomatic developments. There is no assurance that the Manager will be able to 
anticipate or counter these potential events.                                   

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

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

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

MORTGAGE DOLLAR ROLLS                                                           

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

OPTIONS ON FOREIGN AND U.S. CURRENCIES AND SECURITIES                           

Each Fund may purchase and sell (write) put and call options on 
securities, although the present intent is to write only covered call options.  
These covered call options must remain covered so long as each Fund is obligated
as a writer. A call option written by each Fund is "covered" if the Funds own   
the security underlying the option or has an absolute and immediate right to    
acquire that security without additional cash consideration (or for additional  
cash consideration held in a segregated account by the Fund's Custodian) upon   
conversion or exchange of other securities held in its fund. A call option is   
also covered if each Fund holds on a share-for-share basis a call on the same   
security as the call written where the exercise price of the call held is equal 
to or less than the exercise price of                                           

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the call written or greater than the exercise price of the call written if the  
difference is maintained by the Fund in cash, treasury bills or other high      
grade, short-term debt obligations in a segregated account with the Custodian.  
The premium paid by the purchaser of an option will reflect, among other things,
the relationship of the exercise price to the market price and volatility of the
underlying security, the remaining term of the option, supply and demand and    
interest rates.                                                                 

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

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

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

OPTIONS ON STOCK INDICES                                                        

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

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

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

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

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

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

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

     SPECIAL RISKS OF WRITING CALLS ON STOCK INDICES. Unless each Fund has
other liquid assets which are sufficient to satisfy the exercise of a call, each
Fund would be required to liquidate portfolio securities in order to satisfy the
exercise. Because an exercise must be settled within hours after receiving the  
notice of exercise, if the                                                      

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Funds fail to anticipate an exercise it may have to borrow from a bank (in      
amounts not exceeding 20% of the value of each Fund's total assets) pending     
settlement of the sale of securities in its portfolio and would incur interest  
charges thereon.                                                                

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

      OVER-THE-COUNTER OPTIONS AND ILLIQUID SECURITIES. Delaware U.S. Growth
Fund may deal in over-the-counter ("OTC") options. The Fund understands the     
position of the staff of the Securities and Exchange Commission ("SEC") to be   
that purchased OTC options and the assets used as "cover" for written OTC       
options are illiquid securities. The Fund and the Manager, and the sub-advisors 
disagree with this position and have found the dealers with which they engage in
OTC options transactions generally agreeable to and capable of entering into    
closing transactions. The Fund has adopted procedures for engaging in OTC       
options for the purpose of reducing any potential adverse impact of such        
transactions upon the liquidity of the Fund's portfolio.                        

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

FUTURES CONTRACTS AND OPTIONS THEREON                                           

     A futures contract is an agreement in which the writer (or seller) of
the contract agrees to deliver to the buyer an amount of cash or securities     
equal to a specific dollar amount times the difference between the value of a   
specific fixed-income security or index at the close of the last trading day of 
the contract and the price at which the agreement is made. No physical delivery 
of the underlying securities is made. When the futures contract is entered into,
each party deposits with a broker or in a segregated custodial account          
approximately 5% of the contract amount, called the "initial margin." Subsequent
payments to and from the broker, called "variation margin," will be made on a   
daily basis as the price of the underlying security or index fluctuates, making 
the long and short positions in the futures contracts more or less valuable, a  
process known as "marking to market." In the case of options on futures         
contracts, the holder of the option pays a premium and receives the right, upon 
exercise of the option at a specified price during the option                   

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period, to assume a position in the futures contract (a long position if the    
option is a call and a short position if the option is a put). If the option is 
exercised by the holder before the last trading day during the option period,   
the option writer delivers the futures position, as well as any balance in the  
writer's futures margin account. If it is exercised on the last trading day, the
option writer delivers to the option holder cash in an amount equal to the      
difference between the option exercise price and the closing level of the       
relevant security or index on the date the option expires.                      

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

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

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

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

  FOREIGN CURRENCY TRANSACTIONS. Each Fund may hold foreign currency
deposits from time to time and may convert dollars and foreign currencies in the
foreign exchange markets. Currency conversion involves dealer spreads and other 
costs, although commissions usually are not charged. Currencies may be exchanged
on a spot (i.e., cash) basis, or by entering into forward contracts to purchase 
or sell foreign currencies at a future date and price. Forward contracts        
generally are traded in an interbank market conducted directly between currency 
traders (usually large commercial banks) and their customers. The parties to a  
forward contract may agree to offset or terminate the contract before its       
maturity, or may hold the contract to maturity and complete the contemplated    
currency exchange.                                                              

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS                                     

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

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

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

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

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

      The Funds may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For example, 
if the Funds owned securities denominated in pounds sterling, it could enter    
into a forward contract to sell pounds sterling in return for U.S. dollars to   
hedge against possible declines in the pound's value. Such a hedge (sometimes   
referred to as a "position hedge") would tend to offset both positive and       
negative currency fluctuations, but would not offset changes in security values 
caused by other factors. Each Fund could also hedge the position by selling     
another currency expected to perform similarly to the pound sterling -- for     
example, by entering into a forward contract to sell Euros in return for U.S.   
dollars. This type of hedge, sometimes referred to as a "proxy hedge," could    
offer advantages in terms of cost, yield, or efficiency, but generally will not 
hedge currency exposure as effectively as a simple hedge into U.S. dollars.     
Proxy hedges may result in losses if the currency used to hedge does not perform
similarly to the currency in which the hedged securities are denominated.       

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

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assurance that the Manager's use of forward currency contracts will be          
advantageous to each Fund or that it will hedge at an appropriate time.         

FOREIGN CURRENCY OPTIONS                                                        

   The Funds may purchase U.S. exchange-listed call and put options on
foreign currencies. Such options on foreign currencies operate similarly to     
options on securities. Options on foreign currencies are affected by all of     
those factors that influence foreign exchange rates and investments generally.  

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

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

FOREIGN CURRENCY CONVERSION                                                     

  Although foreign exchange dealers do not charge a fee for currency
conversion, they do realize a profit based on the difference (the "spread")     
between prices at which they are buying and selling various currencies. Thus, a 
dealer may offer to sell a foreign currency to the Fund at one rate, while      
offering a lesser rate of exchange should either Fund desire to resell that     
currency to the dealer.                                                         

COMBINED TRANSACTIONS                                                           

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

CONVERTIBLE SECURITIES                                                          

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

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some risk, investments in convertible securities generally entail less risk than
investments in the common stock of the same issuer.                             

SWAPS, CAPS, FLOORS AND COLLARS                                                 

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

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

EURODOLLAR INSTRUMENTS                                                          

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

LENDING OF PORTFOLIO SECURITIES                                                 

  Each Fund has the ability to lend securities from its portfolio to
brokers, dealers and other financial organizations. Such loans, if and when     
made, may not exceed one-third of either Fund's total assets. The Fund may not  
lend its portfolio securities to Lincoln National Corporation or its affiliates 
unless it has applied for and received specific authority from the SEC. Loans of
securities by the Funds will be collateralized by cash, letters of credit or    
U.S. government securities, which will be maintained at all times in an amount  
equal to at least 100% of the current market value of the loaned securities.    
From time to time, the Funds may return a part of the interest earned from the  

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investment of collateral received for securities loaned to the borrower and/or a
third party, which is unaffiliated with the Fund or with Lincoln National       
Corporation, and which is acting as a "finder."                                 

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

WHEN-ISSUED SECURITIES                                                          

       The Funds may purchase securities on a "when-issued" basis. When either
Fund agrees to purchase securities, it will reserve cash or securities in       
amounts sufficient to cover its obligations, and will value the reserved assets 
daily. It may be expected that each Fund's net assets will fluctuate to a       
greater degree when it sets aside portfolio securities to cover such purchase   
commitments than when it sets aside cash. The Funds do not intends to purchase  
"when-issued" securities for speculative purposes but only in furtherance of    
their investment objective. Because each Fund will set reserve cash or liquid   
portfolio securities to satisfy its purchase commitments in the manner          
described, each Fund's liquidity and the ability of the Manager or sub-advisor  
to manage the Funds might be affected in the event its commitments to purchase  
when-issued securities ever exceeded 25% of the value of its assets.            

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

MONEY MARKET INSTRUMENTS                                                        

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

BANK OBLIGATIONS                                                                

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

       Obligations of foreign branches of domestic banks, such as CDs and TDs,
may be general obligations of the parent bank in addition to the issuing branch,
or may be limited by the terms of a specific obligation and government          
regulation. Such obligations are subject to different risks than are those of   
domestic banks or domestic branches of foreign banks. These risks include       
foreign economic and political developments, foreign governmental restrictions  
that may adversely affect payment of principal and interest on the obligations, 
foreign exchange controls and foreign                                           

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withholding and other taxes on interest income. Foreign branches of domestic    
banks are not necessarily subject to the same or similar regulatory requirements
that apply to domestic banks, such as mandatory reserve requirements, loan      
limitations, and accounting, auditing and financial recordkeeping requirements. 
In addition, less information may be publicly available about a foreign branch  
of a domestic bank than about a domestic bank. CDs issued by wholly owned       
Canadian subsidiaries of domestic banks are guaranteed as to repayment of       
principal and interest (but not as to sovereign risk) by the domestic parent    
bank.                                                                           

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

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

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

REVERSE REPURCHASE AGREEMENTS                                                   

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

"ROLL" TRANSACTIONS                                                             

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

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its net assets subject to market risk). Should the market value of each Fund's  
portfolio securities decline while each Fund is in a leveraged position, greater
depreciation of their net assets would likely occur than were they not in such a
position. As each Fund's aggregate commitments under these transactions         
increase, the opportunity for leverage similarly increases.                     

REPURCHASE AGREEMENTS                                                           

     While each Fund is permitted to do so, it normally does not invest in
repurchase agreements, except to invest cash balances.                          

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

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

ILLIQUID SECURITIES                                                             

  Delaware Diversified Income Fund and Delaware U.S. Growth Fund may
invest no more than 15% and 10% respectively of the value of its net assets in  
illiquid securities.                                                            

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

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

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

VARIABLE AND FLOATING RATE NOTES                                                

     Variable rate master demand notes, in which each Fund may invest, are
unsecured demand notes that permit the indebtedness thereunder to vary and      
provide for periodic adjustments in the interest rate according to the terms of 
the instrument. Both Funds will not invest over 5% of their assets in variable  
rate master demand notes. Because master demand notes are direct lending        
arrangements between the Fund and the issuer, they are not normally traded.     
Although there is no secondary market in the notes, the Fund may demand payment 
of principal and accrued interest at any time. While the notes are not typically
rated by credit rating agencies, issuers of variable amount master              

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demand notes (which are normally manufacturing, retail, financial, and other    
business concerns) must satisfy the same criteria as set forth above for        
commercial paper. In determining average weighted portfolio maturity, a variable
amount master demand note will be deemed to have a maturity equal to the period 
of time remaining until the principal amount can be recovered from the issuer   
through demand.                                                                 

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

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

MUNICIPAL SECURITIES                                                            

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

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

DISCLOSURE OF PORTFOLIO HOLDINGS INFORMATION                                    

       The Fund has adopted a policy generally prohibiting providing portfolio
holdings to any person until after thirty calendar days have passed. We post a  
list of the Fund's portfolio holdings monthly, with a thirty day lag, on the    
Fund's website, www.delawarefunds.com. In addition, on a ten day lag, we also   
make available a month-end summary listing of the number of the Fund's          
securities, country and asset allocations, and top ten securities and sectors by
percentage of holdings for the Fund. This information is available publicly to  
any and all shareholders free of charge once posted on the website by calling   
1-800-523-1918.                                                                 

    Other entities, including institutional investors and intermediaries
that distribute the Fund's shares, are generally treated similarly and are not  
provided with the Fund's portfolio holdings in advance of when they are         
generally available to the public. Third-party service providers and affiliated 
persons of the Fund are provided with the Fund's portfolio holdings only to the 
extent necessary to perform services under agreements relating to the Funds.    

      Third-party rating agencies and consultants who have signed agreements
("Non-Disclosure Agreements") with the Fund or the Manager may receive portfolio
holdings information more quickly than the thirty day lag. The Non-Disclosure   
Agreements require that the receiving entity hold the information in the        
strictest confidence and prohibit the receiving entity from disclosing the      
information or trading on the information (either in Fund shares or in shares of
the Fund's portfolio securities). In addition, the receiving party must agree to
provide copies of any research or reports generated using the portfolio holdings
information in order to allow for monitoring of use of the information. Neither 
the Fund, the Manager nor any affiliate receive any compensation or             
consideration with respect to these agreements.                                 

       Non-Disclosure Agreements must be approved by a member of the Manager's
Legal Department and Compliance Department and any deviation in the use of the  
portfolio holdings information by the receiving party must be approved in       
writing by the Fund's Chief Compliance Officer prior to such use.               

PERFORMANCE INFORMATION                                                         

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

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

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

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                         P(1+T) TO THE POWER n = ERV

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

T  =    average annual total return;      

n  =    number of years;                  

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

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

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

       The average annual total return quotations through October 31, 2004 are
shown below for Class A shares and Class C shares of Delaware Diversified Income
Fund and each Class of Delaware U.S. Growth Fund and are computed as described  
above. Returns for Class A Shares at offer reflect the maximum front-end sales  
charge paid on the purchase of shares (5.75% on Class A shares of Delaware U.S. 
Growth Fund and 4.50% on Class A shares of Delaware Diversified Income Fund);   
returns for Class A Shares at net asset value (NAV) do not reflect the payment  
of any front-end sales charge. Returns for Class B Shares and Class C Shares    
including deferred sales charge reflect the deduction of the applicable CDSC    
that would be paid if the shares were redeemed on October 31, 2003; returns for 
Class B Shares and Class C Shares excluding deferred sales charge assume the    
shares were not redeemed on October 31, 2004 and therefore do not reflect the   
deduction of a CDSC. No return information currently is provided for Class R    
Shares.                                                                         

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

AVERAGE ANNUAL TOTAL RETURN(1)

                                                        [Enlarge/Download Table]


                                                                          10 year        Lifetime   
DELAWARE U.S. GROWTH FUND                 1 year ended   5 year ended      ended         through    
(INCEPTION 12/3/93)                         10/31/04       10/31/04       10/31/04       10/31/04   
----------------------------------------  ------------   ------------   ------------   ------------ 
                                                                                                    
CLASS A AT OFFER BEFORE TAXES(2)                 (7.65%)        (7.31%)         6.16%          5.84%
(INCEPTION 12/3/93)                                                                                 
CLASS A AT OFFER AFTER TAXES ON                  (7.65%)        (7.48%)         4.40%          4.40%
DISTRIBUTIONS(2)                                                                                    
(INCEPTION 12/3/93)                                                                                 
CLASS A AT OFFER AFTER TAXES ON                  (4.97%)        (6.04%)         4.47%          4.47%
DISTRIBUTIONS AND SALE OF FUND SHARES(2)                                                            
(INCEPTION 12/3/93)                                                                                 
CLASS A AT NAV BEFORE TAXES                      (2.03%)        (6.21%)         6.79%          6.41%
(INCEPTION 12/3/93)                                                                                 
CLASS B INCLUDING CDSC BEFORE TAXES(3)           (6.51%)        (7.26%)         6.18%          6.06%
(INCEPTION 3/29/94)                                                                                 
CLASS B INCLUDING CDSC AFTER TAXES ON            (6.51%)        (7.44%)         4.37%          4.37%
DISTRIBUTIONS(3)                                                                                    
(INCEPTION 3/29/94)                                                                                 
CLASS B INCLUDING CDSC AFTER TAXES ON            (4.23%)        (5.99%)         4.36%          4.36%
DISTRIBUTIONS AND SALE OF FUND SHARES(3)                                                            
(INCEPTION 3/29/94)                                                                                 
CLASS B EXCLUDING CDSC BEFORE TAXES              (2.61%)        (6.85%)         6.18%          6.06%
(INCEPTION 3/29/94)                                                                                 
CLASS C INCLUDING CDSC BEFORE TAXES              (3.66%)        (6.85%)         6.08%          6.43%
(INCEPTION 5/23/94)                                                                                 
CLASS C INCLUDING CDSC AFTER TAXES ON            (3.66%)        (7.01%)         4.36%          4.36%
DISTRIBUTIONS                                                                                       
(INCEPTION 5/23/94)                                                                                 
CLASS C INCLUDING CDSC AFTER TAXES ON            (2.38%)        (5.66%)         4.45%          4.45%
DISTRIBUTIONS AND SALE OF FUND SHARES                                                               
(INCEPTION 5/23/94)                                                                                 
CLASS C EXCLUDING CDSC BEFORE TAXES              (2.69%)        (6.85%)         6.08%          6.43%
(INCEPTION 5/23/94)                                                                                 
CLASS R BEFORE TAXES                             (2.22%)          N/A            N/A           3.26%
(INCEPTION 6/2/03)                                                                                  
CLASS R AFTER TAXES ON DISTRIBUTIONS             (2.22%)          N/A            N/A           3.26%
(INCEPTION 6/2/03)                                                                                  
CLASS R AFTER TAXES ON DISTRIBUTIONS AND         (1.44%)          N/A            N/A           2.77%
SALE OF FUND SHARES                                                                                 
(INCEPTION 6/2/03)                                                                                  
INSTITUTIONAL CLASS BEFORE TAXES                 (1.69%)        (5.92%)         7.12%          6.33%
(INCEPTION 2/3/94)                                                                                  
INSTITUTIONAL CLASS AFTER TAXES ON               (1.69%)        (6.08%)         5.36%          5.36%
DISTRIBUTIONS                                                                                       
(INCEPTION 2/3/94)                                                                                  
INSTITUTIONAL CLASS AFTER TAXES ON               (1.10%)        (4.91%)         5.32%          5.32%
DISTRIBUTIONS AND SALE OF FUND SHARES                                                               
(INCEPTION 2/3/94)                                                                                  

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AVERAGE ANNUAL TOTAL RETURN(1)

                                                        [Enlarge/Download Table]

                                             1 year        5 years        10 years      Lifetime   
                                              ended          ended          ended       through    
DELAWARE DIVERSIFIED INCOME FUND(4)         10/31/04       10/31/04       10/31/04      10/31/04   
----------------------------------------  ------------   ------------   ------------  ------------ 
                                                                                                   
CLASS A AT OFFER BEFORE TAXES                     5.03%          9.43%           N/A          8.66%
(INCEPTION 12/29/97)                                                                               
CLASS A AT OFFER AFTER TAXES ON                   3.03%          5.96%           N/A          5.47%
DISTRIBUTIONS                                                                                      
(INCEPTION 12/29/97)                                                                               
CLASS A AT OFFER AFTER TAXES ON                   3.23%          5.90%           N/A          5.41%
DISTRIBUTIONS AND SALE OF FUND SHARES                                                              
(INCEPTION 12/29/97)                                                                               
CLASS A AT NAV BEFORE TAXES                       9.92%         10.43%           N/A          9.39%
(INCEPTION 12/29/97)                                                                               
CLASS B INCLUDING CDSC BEFORE TAXES(3)            5.10%           N/A            N/A         10.97%
(INCEPTION 10/28/02)                                                                               
CLASS B INCLUDING CDSC AFTER TAXES ON             3.30%           N/A            N/A          6.40%
DISTRIBUTIONS(3)                                                                                   
(INCEPTION 10/28/02)                                                                               
CLASS B INCLUDING CDSC AFTER TAXES ON             3.29%           N/A            N/A          6.49%
DISTRIBUTIONS AND SALE OF FUND SHARES(3)                                                           
(INCEPTION 10/28/02)                                                                               
CLASS B EXCLUDING CDSC BEFORE TAXES               9.10%           N/A            N/A         11.97%
(INCEPTION 10/28/02)                                                                               
CLASS C AT OFFER BEFORE TAXES                     8.11%           N/A            N/A         11.94%
(INCEPTION 10/28/02)                                                                               
CLASS C AT OFFER AFTER TAXES ON                   5.24%           N/A            N/A          7.65%
DISTRIBUTIONS AND SALE OF FUND SHARES                                                              
(INCEPTION 10/28/02)                                                                               
CLASS C AT OFFER AFTER TAXES ON                   6.31%           N/A            N/A          7.78%
DISTRIBUTIONS                                                                                      
(INCEPTION 10/28/02)                                                                               
CLASS C AT NAV BEFORE TAXES                       9.11%           N/A            N/A         11.94%
(INCEPTION 10/28/02)                                                                               
CLASS R BEFORE TAXES                              9.55%           N/A            N/A          7.58%
(INCEPTION 6/2/03)                                                                                 
CLASS R AFTER TAXES ON DISTRIBUTIONS              7.59%           N/A            N/A          5.80%
(INCEPTION 6/2/03)                                                                                 
CLASS R AFTER TAXES ON DISTRIBUTIONS AND          6.17%           N/A            N/A          5.40%
SALE OF FUND SHARES                                                                                
(INCEPTION 6/2/03)                                                                                 
INSTITUTIONAL CLASS BEFORE TAXES                 10.05%           N/A            N/A         12.98%
(INCEPTION 10/28/02)                                                                               
INSTITUTIONAL CLASS AFTER TAXES ON                7.86%           N/A            N/A          8.44%
DISTRIBUTIONS                                                                                      
(INCEPTION 10/28/02)                                                                               
INSTITUTIONAL CLASS AFTER TAXES ON                6.48%           N/A            N/A          8.31%
DISTRIBUTIONS AND SALE OF FUND SHARES                                                              
(INCEPTION 10/28/02)                                                                               

(1)     Reflects applicable expense caps in effect during the periods. See      
Investment Management Agreement and Sub-Advisory Agreement for  
        information regarding expense caps for the Funds. In the absence of such
   voluntary waivers, performance would have been affected negatively.
(2)     The 12b-1 fees payable by Delaware U.S. Growth Fund for Class A Shares  
      were at a rate equal to 0.35% of the average daily net assets prior to
   May 6, 1996. Beginning May 6, 1996, the payments were set at 0.30%.
        Performance calculations for periods after May 6, 1996 reflect the lower
12b-1 fee rate for Class A shares of Delaware U.S. Growth Fund. 
        Effective November 2, 1998, the maximum front-end sales charge is 5.75%.
The above performance numbers are calculated using 5.75% as the 
applicable sales charge for all time periods.                   
(3)     Effective November 18, 2002, the CDSC schedule for Class B Shares of    
      Delaware U.S. Growth Fund was changed to: 4.00% during the first year,
       3.25% during the second year, 2.75% during the third year, 2.25% during
  the fourth and fifth years, 1.50% during the sixth year, and 0.00%
 thereafter. The above figures have been calculated using this new
schedule.                                                       
(4)     On October 28, 2002, the Fund acquired all of the assets and assumed all
    of the liabilities of The Diversified Core Fixed Income Portfolio of
    Delaware Pooled Trust (the "Predecessor Fund"). Share holders of the
       Predecessor Fund received Class A shares of the Fund in connection with
        this transaction. As a result of this transaction, Class A shares of the
        Fund assumed the performance history of the Predecessor Fund for periods
        prior to the closing date of the transaction. In accordance with current
Securities and                                                  

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 Exchange Commission requirements, the performance of the Fund for
  periods prior to October 28, 2002 has been restated to reflect the
     maximum sales charge applicable to Class A shares, but not to reflect
   the distribution and service (12b-1) fees and higher management and
        transfer agency fees borne by Class A shares of the Fund. Class A shares
        of the Fund bear the cost of distribution and service fees at the annual
  rate of up to 0.30% of the average daily net assets of the Class A
       shares. Shares of the Predecessor Fund were not subject to distribution
      and service fees. The Fund bears the expense of management fees at the
        maximum annual rate of 0.55% of the Fund's average daily net assets. The
        Predecessor Fund had a management fee at the annual rate of 0.43% of its
average daily net assets. For transfer agency services, the Fund
        currently pays an annual dollar charge per account ranging from $3.00 to
     $19.00 (depending on the type of account), as well as per transaction
        fees. By contrast, the Predecessor Fund paid a fee at the annual rate of
      0.01% of its average daily net assets for transfer agency services. If
  the current higher expenses of the Fund had been in effect for the
      Predecessor Fund, the total returns set forth in the table above would
have been lower for all periods.                                

DOLLAR-COST AVERAGING                                                           

     For many people, deciding when to invest can be a difficult decision.
Security prices tend to move up and down over various market cycles and logic   
says to invest when prices are low. However, even experts can't always pick the 
highs and the lows. By using a strategy known as dollar-cost averaging, you     
schedule your investments ahead of time. If you invest a set amount on a regular
basis, that money will always buy more shares when the price is low and fewer   
when the price is high. You can choose to invest at any regular interval--for   
example, monthly or quarterly--as long as you stick to your regular schedule.   
Dollar-cost averaging looks simple and it is, but there are important things to 
remember.                                                                       

 Dollar-cost averaging works best over longer time periods, and it
doesn't guarantee a profit or protect against losses in declining markets. If   
you need to sell your investment when prices are low, you may not realize a     
profit no matter what investment strategy you utilize. That's why dollar-cost   
averaging can make sense for long-term goals. Since the potential success of a  
dollar-cost averaging program depends on continuous investing, even through     
periods of fluctuating prices, you should consider your dollar-cost averaging   
program a long-term commitment and invest an amount you can afford and probably 
won't need to withdraw. You also should consider your financial ability to      
continue to purchase shares during periods of high fund share prices. Delaware  
Investments offers three services -- Automatic Investing Program, Direct Deposit
Program and the Wealth Builder Option -- that can help to keep your regular     
investment program on track. See Investing by Electronic Fund Transfer - Direct 
Deposit Purchase Plan and Automatic Investing Plan under Investment Plans and   
Wealth Builder Option under Investment Plans for a complete description of these
services, including restrictions or limitations.                                

      The example below illustrates how dollar-cost averaging can work. In a
fluctuating market, the average cost per share over a period of time will be    
lower than the average price per share for the same time period.                

           INVESTMENT   PRICE PER        NUMBER OF
                AMOUNT       SHARE      SHARES PURCHASED
              ----------   ----------   ----------------
Month 1   $      100   $    10.00          10   
Month 2   $      100   $    12.50           8   
Month 3   $      100   $     5.00          12   
Month 4   $      100   $    10.00          10   

       $      400   $    37.50          48

Total Amount Invested:  $400                    
Total Number of Shares Purchased:  48           
Average Price Per Share:  $9.38 ($37.50/4)      
Average Cost Per Share:  $8.33 ($400/48 shares) 

     This example is for illustration purposes only. It is not intended to
represent the actual performance of any stock or bond fund available from       
Delaware Investments.                                                           

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THE POWER OF COMPOUNDING                                                        

        When you opt to reinvest your current income for additional Fund shares,
your investment is given yet another opportunity to grow. It's called the Power 
of Compounding. Each Fund may include illustrations showing the power of        
compounding in advertisements and other types of literature.                    

TRADING PRACTICES AND BROKERAGE                                                 

Fund transactions are executed by the Manager or, in the case of
Delaware Diversified Income Fund, the sub-advisor, on behalf of each Fund in    
accordance with the standards described below.                                  

       Brokers, dealers, banks and others are selected to execute transactions
for the purchase or sale of portfolio securities or other instruments on the    
basis of the Manager's judgment of their professional capability to provide the 
service. The primary consideration is to have brokers, dealers or banks execute 
securities transactions at best execution. Best execution refers to many        
factors, including the price paid or received for a security, the commission    
charged, the promptness and reliability of execution, the confidentiality and   
placement accorded the order and other factors affecting the overall benefit    
obtained by the account on the transaction. Trades are generally made on a net  
basis where securities are either bought or sold directly from or to a broker,  
dealer or bank or others. In these instances, there is no direct commission     
charged, but there is a spread (the difference between the buy and sell price)  
which is the equivalent of a commission. When a commission is paid, each Fund   
pays reasonably competitive brokerage commission rates based upon the           
professional knowledge of the Manager's trading department as to rates paid and 
charged for similar transactions throughout the securities industry. In some    
instances, each Fund pays a minimal share transaction cost when the transaction 
presents no difficulty.                                                         

   During the past three fiscal years, the aggregate dollar amounts of
brokerage commissions paid by the Delaware U.S. Growth Fund were as follows:    

FISCAL YEAR ENDED OCTOBER 31,   
------------------------------------    
2004         2003         2002    
----------   ----------   ----------    
$  465,619   $  299,791   $  488,846    

   During the past three fiscal years, the aggregate dollar amounts of
brokerage commissions paid by the Delaware Diversified Income Fund were as      
follows:                                                                        

FISCAL YEAR ENDED OCTOBER 31,   
------------------------------------    
2004         2003         2002    
----------   ----------   ----------    
$   53,260   $   23,352   $    2,258    

        The Manager may allocate out of all commission business generated by all
of the funds and accounts under their management, brokerage business to brokers,
dealers or members of an exchange who provide brokerage and research services.  
These services include advice, either directly or through publications or       
writings, as to the value of securities, the advisability of investing in,      
purchasing or selling securities, and the availability of securities or         
purchasers or sellers of securities; furnishing of analyses and reports         
concerning issuers, securities or industries; providing information on economic 
factors and trends; assisting in determining portfolio strategy; providing      
computer software and hardware used in security analyses; and providing         
portfolio performance evaluation and technical market analyses. Such services   
are used by the Manager in connection with its investment decision-making       
process with respect to one or more funds and accounts managed by it, and may   
not be used, or used exclusively, with respect to the fund or account generating
the brokerage.                                                                  

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        During the fiscal year ended October 31, 2004, portfolio transactions of
the Delaware U.S. Growth Fund in the amount of $156,379,393, resulting in       
brokerage commissions of $202,806, were directed to brokers for brokerage and   
research services provided.                                                     

As provided in the 1934 Act and the Investment Management and   
Sub-Advisory Agreements, higher commissions are permitted to be paid to brokers,
dealers or members of an exchange who provide brokerage and research services   
than to broker, dealers or members of an exchange who do not provide such       
services, if such higher commissions are deemed reasonable in relation to the   
value of the brokerage and research services provided. Although transactions are
directed to brokers, dealers or members of an exchange who provide such         
brokerage and research services, the Funds believe that the commissions paid to 
such broker/dealers are not, in general, higher than commissions that would be  
paid to broker/dealers not providing such services and that such commissions are
reasonable in relation to the value of the brokerage and research services      
provided. In some instances, services may be provided to the Manager which      
constitute in some part brokerage and research services used by the Manager in  
connection with its investment decision-making process and constitute in some   
part services used by the Manager in connection with administrative or other    
functions not related to its investment decision-making process. In such cases, 
the Manager will make a good faith allocation of brokerage and research services
and will pay out of its own resources for services used by the Manager in       
connection with administrative or other functions not related to its investment 
decision-making process. In addition, so long as no fund is disadvantaged,      
portfolio transactions which generate commissions or their equivalent are       
allocated to broker/dealers who provide daily portfolio pricing services to each
Fund and to other funds available from Delaware Investments. Subject to best    
execution, commissions allocated to brokers providing such pricing services may 
or may not be generated by the funds receiving the pricing service.             

        The Manager may place a combined order for two or more accounts or funds
engaged in the purchase or sale of the same security if, in its judgment, joint 
execution is in the best interest of each participant and will result in best   
price and execution. Transactions involving commingled orders are allocated in a
manner deemed equitable to each account or fund. When a combined order is       
executed in a series of transactions at different prices, each account          
participating in the order that receives allocation may be allocated an average 
price obtained from the executing broker. It is believed that the ability of the
accounts to participate in volume transactions will generally be beneficial to  
the accounts and funds. Although it is recognized that, in some cases, the joint
execution of orders could adversely affect the price or volume of the security  
that a particular account or fund may obtain, it is the opinion of the Manager  
and the Board of Trustees that the advantages of combined orders outweigh the   
possible disadvantages of separate transactions.                                

        Consistent with the NASD Regulation, Inc. (the "NASDRSM") and subject to
seeking best execution, the Manager may place orders with broker/dealers that   
have agreed to defray certain expenses of the funds available from Delaware     
Investments such as custodian fees.                                             

PORTFOLIO TURNOVER                                                              

     While each Fund does not intend to trade in securities for short-term
profits, securities may be sold without regard to the amount of time they have  
been held by the Funds when warranted by the circumstances. The Funds' portfolio
turnover rates are calculated by dividing the lesser of purchases or sales of   
portfolio securities for the particular fiscal year by the monthly average of   
the value of the portfolio securities owned by the Funds, during the particular 
fiscal year, exclusive of securities whose maturities at the time of acquisition
are one year or less. Securities with remaining maturities of one year or less  
at the date of acquisition are excluded from the calculation. The Funds may be  
expected to engage in active and frequent trading of portfolio securities, which
means that portfolio turnover can be expected to exceed 100%. In particular,    
Delaware Diversified Income Fund has, in the past, experienced portfolio        
turnover rates that were significantly in excess of 100%. A portfolio turnover  
rate of 100% would occur, for example, if all the securities in the fund's      
portfolio were replaced once during a period of one year. A high rate of        
portfolio turnover in any year may increase brokerage commissions paid and could
result in high amounts of realized investment gain subject to the payment of    
taxes by shareholders. The turnover rate may also be affected by cash           
requirements from redemptions and repurchases of fund shares.                   

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     During the past two fiscal years, the portfolio turnover rates of the
Delaware Diversified Income Fund were as follows:                               

FISCAL YEAR ENDED OCTOBER 31, 
----------------------------- 
2004            2003  
-------------   ------------- 
452%            620%

        Delaware Diversified Income Fund may be expected to engage in active and
frequent trading of portfolio securities, which means that portfolio turnover   
can be expected to exceed 100%. The Fund has, in the past, experienced portfolio
turnover rates that were significantly in excess of 100%.                       

     During the past two fiscal years, the portfolio turnover rates of the
Delaware U.S. Growth Fund were as follows:                                      

FISCAL YEAR ENDED OCTOBER 31, 
----------------------------- 
2004            2003  
-------------   ------------- 
158%             77%

PURCHASING SHARES                                                               

  The Distributor serves as the national distributor for each Fund's
shares and has agreed to use its best efforts to sell shares of each Fund. See  
the Prospectuses for information on how to invest. Shares of each Fund are      
offered on a continuous basis and may be purchased through authorized investment
dealers or directly by contacting Adviser Funds or the Distributor.             

      The minimum initial investment generally is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent purchases of such Classes         
generally must be at least $100. The initial and subsequent investment minimums 
for Class A Shares will be waived for purchases by officers, directors and      
employees of any Delaware Investments Fund, the Manager or any of the Manager's 
affiliates if the purchases are made pursuant to a payroll deduction program.   
Shares purchased pursuant to the Uniform Gifts to Minors Act or Uniform         
Transfers to Minors Act and shares purchased in connection with an Automatic    
Investing Plan are subject to a minimum initial purchase of $250 and a minimum  
subsequent purchase of $25. Accounts opened under the Delaware Investments Asset
Planner service are subject to a minimum initial investment of $2,000 per Asset 
Planner Strategy selected. There are no minimum purchase requirements for Class 
R and the Institutional Class, but certain eligibility requirements must be     
satisfied.                                                                      

Each purchase of Class B Shares is subject to a maximum purchase
limitation of $100,000. For Class C Shares, each purchase must be in an amount  
that is less than $1,000,000. See Investment Plans for purchase limitations     
applicable to retirement plans. Adviser Funds will reject any purchase order for
more than $100,000 of Class B Shares and $1,000,000 or more of Class C Shares.  
An investor may exceed these limitations by making cumulative purchases over a  
period of time. In doing so, an investor should keep in mind, however, that     
reduced front-end sales charges apply to investments of $50,000 or more in Class
A Shares, and that Class A Shares are                                           

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subject to lower annual 12b-1 Plan expenses than Class B Shares and Class C     
Shares and generally are not subject to a CDSC.                                 

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

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

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

      The NASDR(SM) has adopted amendments to its Conduct Rules, relating to
investment company sales charges. Adviser Funds and the Distributor intend to   
operate in compliance with these rules.                                         

   Class A Shares are purchased at the offering price which reflects a
maximum front-end sales charge of 5.75% for Delaware U.S. Growth Fund and 4.50% 
for Delaware Diversified Income Fund; however, lower front-end sales charges    
apply for larger purchases. See the table in the Fund Classes' Prospectus.      

      Class B shares of Delaware U.S. Growth Fund are purchased at net asset
value and are subject to a CDSC of: (i) 4.00% if shares are redeemed during the 
first year after purchase; (ii) 3.25% if shares are redeemed during the second  
year following purchase; (iii) 2.75% if shares are redeemed during the third    
year following purchase; (iv) 2.25% if shares are redeemed during the fourth and
fifth year following purchase; (v) 1.50% if shares are redeemed during the sixth
year following purchase; and (vi) 0.00% thereafter. Class B Shares of the       
Delaware Diversified Income Fund are purchased at net asset value and are       
subject to a CDSC of: (i) 4.00% if shares are redeemed during the first year    
following purchase; (ii) 3.00% if shares are redeemed during the second year    
following purchase; (iii) 2.25% if shares are redeemed during the third year    
following purchase; (iv) 1.50% if shares are redeemed during the fourth and     
fifth years following purchase; (v) 1.00% if shares are redeemed during the     
sixth year following purchase; and (vi) 0.00% thereafter. Class B Shares are    
also subject to annual 12b-1 Plan expenses which are higher than those to which 
Class A Shares are subject and are assessed against Class B Shares for          
approximately eight years after purchase. See Automatic Conversion of Class B   
Shares, below.                                                                  

    Class C Shares are purchased at net asset value and are subject to a
CDSC of 1% if shares are redeemed within 12 months following purchase. Class C  
Shares are also subject to annual 12b-1 Plan expenses for the life of the       
investment which are equal to those to which Class B Shares are subject.        

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     Class R Shares are purchased at the net asset value per share without
the imposition of a front-end or contingent deferred sales charge. Class R      
Shares are subject to annual 12b-1 Plan expenses for the life of the investment.

   Institutional Class shares are purchased at the net asset value per
share without the imposition of a front-end or contingent deferred sales charge 
or 12b-1 Plan expenses.                                                         

        See Plans Under Rule 12b-1 for the Fund Classes under Purchasing Shares,
and Determining Offering Price and Net Asset Value in this Part B.              

    Certificates representing shares purchased are not ordinarily issued
unless, in the case of Class A Shares or Institutional Class shares, a          
shareholder submits a specific request. Certificates are not issued in the case 
of Class B Shares, Class C Shares or Class R Shares or in the case of any       
retirement plan account including self-directed IRAs. However, purchases not    
involving the issuance of certificates are confirmed to the investor and        
credited to the shareholder's account on the books maintained by Delaware       
Service Company, Inc. (the "Transfer Agent"). The investor will have the same   
rights of ownership with respect to such shares as if certificates had been     
issued. An investor that is permitted to obtain a certificate may receive a     
certificate representing full share denominations purchased by sending a letter 
signed by each owner of the account to the Transfer Agent requesting the        
certificate. No charge is assessed by Adviser Funds for any certificate issued. 
A shareholder may be subject to fees for replacement of a lost or stolen        
certificate, under certain conditions, including the cost of obtaining a bond   
covering the lost or stolen certificate. Please contact either Fund for further 
information. Investors who hold certificates representing any of their shares   
may only redeem those shares by written request. The investor's certificate(s)  
must accompany such request.                                                    

ALTERNATIVE PURCHASE ARRANGEMENTS - CLASS A, B AND C SHARES                     

       The alternative purchase arrangements of Class A Shares, Class B Shares
and Class C Shares permit investors to choose the method of purchasing shares   
that is most suitable for their needs given the amount of their purchase, the   
length of time they expect to hold their shares and other relevant              
circumstances. Investors should determine whether, given their particular       
circumstances, it is more advantageous to purchase Class A Shares and incur a   
front-end sales charge and annual 12b-1 Plan expenses of up to a maximum of     
0.30% of the average daily net assets of Class A Shares of Delaware Diversified 
Income Fund or up to a maximum of 0.35% of the average daily net assets of      
Delaware U.S. Growth Fund, or to purchase either Class B or Class C Shares and  
have the entire initial purchase amount invested in each Fund with the          
investment thereafter subject to a CDSC and annual 12b-1 Plan expenses. Class B 
Shares are subject to a CDSC if the shares are redeemed within six years of     
purchase, and Class C Shares are subject to a CDSC if the shares are redeemed   
within 12 months of purchase. Class B and Class C Shares are each subject to    
annual 12b-1 Plan expenses of up to a maximum of 1% (0.25% of which are service 
fees to be paid to the Distributor, dealers or others for providing personal    
service and/or maintaining shareholder accounts) of average daily net assets of 
the respective Class. Class B Shares will automatically convert to Class A      
Shares at the end of approximately eight years after purchase and, thereafter,  
be subject to Class A Shares' annual 12b-1 Plan expenses. Unlike Class B Shares,
Class C Shares do not convert to another Class.                                 

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

      Class R Shares have no front-end sales charge and are not subject to a
CDSC, but incur annual 12b-1 expenses of up to a maximum of 0.60%. Class A      
Shares generally are not available for purchase by anyone qualified to purchase 
Class R Shares.                                                                 

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 In comparing Class B Shares and Class C Shares to Class R Shares,
investors should consider the higher 12b-1 Plan expenses on Class B Shares and  
Class C Shares. Investors also should consider the fact that Class R Shares do  
not have a front-end sales charge and, unlike Class B Shares and Class C Shares,
are not subject to a CDSC. In comparing Class B Shares to Class R Shares,       
investors should also consider the duration of the annual 12b-1 Plan expenses to
which each of the class is subject and the desirability of an automatic         
conversation feature to Class A Shares (with lower annual 12b-1 Plan fees),     
which is available only for Class B Shares and does not subject the investor to 
a CDSC.                                                                         

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

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

CLASS A SHARES                                                                  

    Purchases of $50,000 or more of Class A Shares at the offering price
carry reduced front-end sales charges as shown in the table in the Fund Classes'
Prospectus, and may include a series of purchases over a 13-month period under a
Letter of Intention signed by the purchaser. See Special Purchase Features -    
Class A Shares, below for more information on ways in which investors can avail 
themselves of reduced front-end sales charges and other purchase features.      

 From time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during which the  
Distributor may reallow to dealers up to the full amount of the front-end sales.
In addition, certain dealers who enter into an agreement to provide extra       
training and information on Delaware Investments products and services and who  
increase sales of Delaware Investments Funds may receive an additional          
commission of up to 0.15% of the offering price in connection with sales of     
Class A Shares. Such dealers must meet certain requirements in terms of         
organization and distribution capabilities and their ability to increase sales. 
The Distributor should be contacted for further information on these            
requirements as well as the basis and circumstances upon which the additional   
commission will be paid. Participating dealers may be deemed to have additional 
responsibilities under the securities laws. Dealers who receive 90% or more of  
the sales charge may be deemed to be underwriters under the 1933 Act.           

DEALER'S COMMISSION                                                             

       As described in the Prospectus, for initial purchases of Class A Shares
of $1,000,000 or more, a dealer's commission may be paid by the Distributor to  
financial advisors through whom such purchases are effected.                    

 In determining a financial advisor's eligibility for the dealer's
commission, purchases of Class A Shares of other Delaware Investments Funds as  
to which a Limited CDSC applies (see Contingent Deferred Sales Charge for       
Certain Redemptions of Class A Shares Purchased at Net Asset Value under        
Redemption and Exchange) may be aggregated with those of the Class A Shares of  
each Fund. Financial advisors also may be eligible for a dealer's commission in 
connection with certain purchases made under a Letter of Intention or pursuant  
to an investor's Right of Accumulation. Financial advisors should contact the   
Distributor concerning the applicability and calculation of the dealer's        
commission in the case of combined purchases.                                   

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

CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES AND CLASS C SHARES            

   Class B Shares and Class C Shares are purchased without a front-end
sales charge. Class B Shares redeemed within six years of purchase may be       
subject to a CDSC at the rates set forth above, and Class C Shares redeemed     
within 12 months of purchase may be subject to a CDSC of 1%. CDSCs are charged  
as a percentage of the dollar amount subject to the CDSC. The charge will be    
assessed on an amount equal to the lesser of the net asset value at the time of 
purchase of the shares being redeemed or the net asset value of those shares at 
the time of redemption. No CDSC will be imposed on increases in net asset value 
above the initial purchase price, nor will a CDSC be assessed on redemptions of 
shares acquired through reinvestment of dividends or capital gains              
distributions. For purposes of this formula, the "net asset value at the time of
purchase" will be the net asset value at purchase of Class B Shares or Class C  
Shares of each Fund, even if those shares are later exchanged for shares of     
another Delaware Investments Fund. In the event of an exchange of the shares,   
the "net asset value of such shares at the time of redemption" will be the net  
asset value of the shares that were acquired in the exchange. See Waiver of     
Contingent Deferred Sales Charge--Class B Shares and Class C Shares under       
Redemption and Exchange for the Fund Classes for a list of the instances in     
which the CDSC is waived.                                                       

       During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares, Class B Shares will still be subject to the  
annual 12b-1 Plan expenses of up to 1% of average daily net assets of those     
shares. At the end of approximately eight years after purchase, the investor's  
Class B Shares will be automatically converted into Class A Shares of each Fund.
See Automatic Conversion of Class B Shares, below. Investors are reminded that  
the Class A Shares into which Class B Shares will convert are subject to Class A
Shares' ongoing annual 12b-1 Plan expenses.                                     

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

DEFERRED SALES CHARGE ALTERNATIVE - CLASS B SHARES                              

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

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

       Holders of Class B Shares who exercise the exchange privilege described
below will continue to be subject to the CDSC schedule for Class B Shares       
described in this Part B, even after the exchange. Such CDSC schedule           

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may be higher than the CDSC schedule for Class B Shares acquired as a result of 
the exchange. See Redemption and Exchange.                                      

AUTOMATIC CONVERSION OF CLASS B SHARES                                          

  Class B Shares, other than shares acquired through reinvestment of
dividends, held for eight years after purchase are eligible for automatic       
conversion into Class A Shares. Conversions of Class B Shares into Class A      
Shares will occur only four times in any calendar year, on the 18th day or next 
business day of March, June, September and December (each, a "Conversion Date").
If the eighth anniversary after a purchase of Class B Shares falls on a         
Conversion Date, an investor's Class B Shares will be converted on that date. If
the eighth anniversary occurs between Conversion Dates, an investor's Class B   
Shares will be converted on the next Conversion Date after such anniversary.    
Consequently, if a shareholder's eighth anniversary falls on the day after a    
Conversion Date, that shareholder will have to hold Class B Shares for as long  
as three additional months after the eighth anniversary of purchase before the  
shares will automatically convert into Class A Shares.                          

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

LEVEL SALES CHARGE ALTERNATIVE - CLASS C SHARES                                 

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

     Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services, and     
bearing related expenses, in connection with the sale of Class C Shares. These  
payments support the compensation paid to dealers or brokers for selling Class C
Shares. Payments to the Distributor and others under the Class C 12b-1 Plan may 
be in an amount equal to no more than 1% annually.                              

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

PLANS UNDER RULE 12B-1 FOR THE FUND CLASSES                                     

      Pursuant to Rule 12b-1 under the 1940 Act, Adviser Funds has adopted a
separate plan for each of Class A Shares, Class B Shares, Class C Shares and    
Class R Shares of each Fund (the "Plans"). Each Plan permits the Funds to pay   
for certain distribution, promotional and related expenses involved in the      
marketing of only the Class of shares to which the Plan applies. The Plans do   
not apply to the Institutional Class of shares. Such shares are not included in 
calculating the Plans' fees, and the Plans are not used to assist in the        
distribution and marketing of shares of the Institutional Class. Shareholders of
the Institutional Class Shares may not vote on matters affecting the Plans.     

        The Plans permit the Funds, pursuant to their Distribution Agreement, to
pay out of the assets of Class A Shares, Class B Shares, Class C Shares and     
Class R Shares monthly fees to the Distributor for its services and expenses in 
distributing and promoting sales of shares of such classes. These expenses      
include, among other things, preparing and distributing advertisements, sales   
literature, and prospectuses and reports used for sales purposes, compensating  
sales and marketing personnel, holding special promotions for specified periods 
of time and paying distribution and maintenance fees to brokers, dealers and    
others. In connection with the promotion of shares of the Classes, the          
Distributor may, from time to time, pay to participate in dealer-sponsored      
seminars and conferences, and reimburse dealers for expenses incurred in        
connection with preapproved seminars, conferences and advertising. The          

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Distributor may pay or allow additional promotional incentives to dealers as    
part of preapproved sales contests and/or to dealers who provide extra training 
and information concerning a Class and increase sales of the Class.             

    In addition, each Fund may make payments from the 12b-1 Plan fees of
their respective Classes directly to others, such as banks, who aid in the      
distribution of Class shares or provide services in respect of a Class, pursuant
to service agreements with Adviser Funds. The Plan expenses relating to Class B 
Shares and Class C Shares are also used to pay the Distributor for advancing the
commission costs to dealers with respect to the initial sale of such shares.    

   The maximum aggregate fee payable by the Funds under the Plans, and
Adviser Funds' Distribution Agreement, on an annual basis, is up to 0.30% of    
average daily net assets of Delaware Diversified Income Fund's Class A shares,  
up to 0.35% of average daily net assets of Delaware U.S. Growth Fund's Class A  
Shares, up to 1% (0.25% of which are service fees to be paid to the Distributor,
dealers and others for providing personal service and/or maintaining shareholder
accounts) of the Funds' Class B Shares' and Class C Shares' average daily net   
assets for the year and up to 0.60% of the Class R Shares' average daily net    
assets for the year. Adviser Funds' Board of Trustees may reduce these amounts  
at any time.                                                                    

        All of the distribution expenses incurred by the Distributor and others,
such as broker/dealers, in excess of the amount paid on behalf of Class A       
Shares, Class B Shares, Class C Shares and Class R Shares would be borne by such
persons without any reimbursement from such Fund Classes. Subject to seeking    
best execution, the Funds may, from time to time, buy or sell portfolio         
securities from or to firms which receive payments under the Plans.             

      From time to time, the Distributor may pay additional amounts from its
own resources to dealers for aid in distribution or for aid in providing        
administrative services to shareholders.                                        

   The Plans and the Distribution Agreement, as amended, have all been
approved by the Board of Trustees of Adviser Funds, including a majority of the 
trustees who are not "interested persons" (as defined in the 1940 Act) of       
Adviser Funds and who have no direct or indirect financial interest in the Plans
by vote cast in person at a meeting duly called for the purpose of voting on the
Plans and such Agreement. Continuation of the Plans and the Distribution        
Agreement, as amended, must be approved annually by the Board of Trustees in the
same manner as specified above.                                                 

        Each year, the trustees must determine whether continuation of the Plans
is in the best interest of shareholders of, respectively, Class A Shares, Class 
B Shares, Class C Shares and Class R Shares of the Funds and that there is a    
reasonable likelihood of the Plan relating to a Class providing a benefit to    
that Class. The Plans and the Distribution Agreement, as amended, may be        
terminated with respect to a Class at any time without penalty by a majority of 
those trustees who are not "interested persons" or by a majority vote of the    
relevant Class' outstanding voting securities. Any amendment materially         
increasing the percentage payable under the Plans must likewise be approved by a
majority vote of the relevant Class' outstanding voting securities, as well as  
by a majority vote of those trustees who are not "interested persons." With     
respect to each Class A Shares' Plan, any material increase in the maximum      
percentage payable thereunder must also be approved by a majority of the        
outstanding voting securities of the Funds' Class B shares. Also, any other     
material amendment to the Plans must be approved by a majority vote of the      
trustees including a majority of the noninterested trustees of Adviser Funds    
having no interest in the Plans. In addition, in order for the Plans to remain  
effective, the selection and nomination of trustees who are not "interested     
persons" of Adviser Funds must be effected by the trustees who themselves are   
not "interested persons" and who have no direct or indirect financial interest  
in the Plans. Persons authorized to make payments under the Plans must provide  
written reports at least quarterly to the Board of Trustees of Adviser Funds for
their review.                                                                   

    For the fiscal year ended October 31, 2004, 12b-1 Plan payments from
Class A Shares, Class B Shares, Class C Shares and Class R Shares of Delaware   
U.S. Growth Fund amounted to $169,444, $368,987, $105,380 and $1,300,           
respectively. Such amounts were used for the following purposes:                

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                                                        [Enlarge/Download Table]

                                         CLASS A     CLASS B     CLASS C     CLASS R 
                                       ----------  ----------  ----------  ----------
                                                                                     
Advertising                                     -           -           -           -
Annual/Semi-Annual Reports             $    3,283           -  $      571  $       13
Broker Trails                          $  138,815  $   92,556  $   82,929  $    1,085
Broker Sales Charges                            -  $  224,223  $   14,142           -
Dealer Service Expenses                         -           -           -           -
Interest on Broker Sales Charges                -  $   52,208  $    2,332           -
Salaries & Commissions to Wholesalers           -           -           -           -
Promotional-Broker Meetings                     -           -           -           -
Promotional-Other                      $    5,826           -  $      634  $       90
Prospectus Printing                    $    3,342           -  $      572  $       11
Telephone                                       -           -           -           -
Wholesaler Expenses                    $   18,178           -  $    4,200  $      101
Other                                           -           -           -           -

    For the fiscal year ended October 31, 2004, 12b-1 Plan payments from
Class A Shares, Class B Shares, Class C Shares and Class R Shares of Delaware   
Diversified Income Fund amounted to $417,821, $308,075, $769,817 and $12,144,   
respectively. Such amounts were used for the following purposes:                

                                                        [Enlarge/Download Table]


                                         CLASS A     CLASS B     CLASS C     CLASS R 
                                       ----------  ----------  ----------  ----------
                                                                                     
Advertising                                     -           -           -           -
Annual/Semi-Annual Reports             $        9  $    1,227  $    1,692  $      216
Broker Trails                          $  416,809  $   77,123  $  133,072  $   10,109
Broker Sales Charges                            -  $  156,337  $  511,128           -
Dealer Service Expenses                         -           -           -           -
Interest on Broker Sales Charges                -  $   43,830  $   10,517           -
Salaries & Commissions to Wholesalers           -           -           -           -
Promotional-Broker Meetings                     -           -           -           -
Promotional-Other                      $      419  $    8,224  $    3,993  $       15
Prospectus Printing                    $      584  $    3,315  $    5,022  $      100
Telephone                                       -           -           -           -
Wholesaler Expenses                             -  $   18,019  $  104,393  $    1,704
Other                                           -           -           -           -
                                                                        
OTHER PAYMENTS TO DEALERS - CLASS A SHARES, CLASS B SHARES, CLASS C SHARES AND  
CLASS R SHARES                                                                  

       From time to time, at the discretion of the Distributor, all registered
broker/dealers whose aggregate sales of Fund Classes exceed certain limits as   
set by the Distributor, may receive from the Distributor an additional payment  
of up to 0.25% of the dollar amount of such sales. The Distributor may also     
provide additional promotional incentives or payments to dealers that sell      
shares of the Delaware Investments family of funds. In some instances, these    
incentives or payments may be offered only to certain dealers who maintain, have
sold or may sell certain amounts of shares. The Distributor may also pay a      
portion of the expense of preapproved dealer advertisements promoting the sale  
of Delaware Investments Fund shares.                                            

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SPECIAL PURCHASE FEATURES - CLASS A SHARES                                      

BUYING CLASS A SHARES AT NET ASSET VALUE                                        

     Class A Shares of the Funds may be purchased at net asset value under
the Delaware Investments Dividend Reinvestment Plan and, under certain          
circumstances, the Exchange Privilege and the 12-Month Reinvestment Privilege.  

        Current and former officers, trustees/directors and employees of Adviser
Funds, any other fund in the Delaware Investments family, the Manager, or any of
the Manager's current affiliates and those that may in the future be created,   
legal counsel to the funds and registered representatives and employees of      
broker/dealers who have entered into Dealer's Agreements with the Distributor   
may purchase Class A Shares and any such class of shares of any of the other    
funds in the Delaware Investments family, including any fund that may be        
created, at the net asset value per share. Family members (regardless of age) of
such persons at their direction, and any employee benefit plan established by   
any of the foregoing funds, corporations, counsel or broker/dealers may also    
purchase Class A Shares at net asset value.                                     

     Purchases of Class A Shares may also be made by clients of registered
representatives of an authorized broker/dealer at net asset value within 12     
months after the registered representative changes employment, if the purchase  
is funded by proceeds from an investment where a front-end sales charge,        
contingent deferred sales charge or other sales charge has been assessed.       
Purchases of Class A Shares may also be made at net asset value by bank         
employees who provide services in connection with agreements between the bank   
and unaffiliated brokers or dealers concerning sales of shares of funds in the  
Delaware Investments family. Officers, directors and key employees of           
institutional clients of the Manager or any of its affiliates may purchase Class
A Shares at net asset value. Moreover, purchases may be effected at net asset   
value for the benefit of the clients of brokers, dealers and registered         
investment advisors affiliated with a broker or dealer, if such broker, dealer  
or investment advisor has entered into an agreement with the Distributor        
providing specifically for the purchase of Class A Shares in connection with    
special investment products, such as wrap accounts or similar fee based         
programs. Such purchasers are required to sign a letter stating that the        
purchase is for investment only and that the securities may not be resold except
to the issuer. Such purchasers may also be required to sign or deliver such     
other documents as the Funds may reasonably require to establish eligibility for
purchase at net asset value. Investors may be charged a fee when effecting      
transactions in Class A Shares through a broker or agent that offers these      
special investment products.                                                    

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

  Purchases of Class A Shares at net asset value also may be made by
retirement plans that are maintained on retirement platforms sponsored by       
financial intermediary firms, provided the financial intermediary firm has      
entered into a Class A Share NAV Agreement with respect to such retirement      
platform.                                                                       

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       Purchases of Class A Shares at net asset value may also be made by bank
sponsored retirement plans that are no longer eligible to purchase Institutional
Class Shares or purchase interests in a collective trust as a result of a change
in distribution arrangements.                                                   

      Purchases of Class A Shares at net asset value may also be made by any
group retirement plan (excluding defined benefit pension plans) that purchases  
shares through a retirement plan alliance program that requires shares to be    
available at net asset value, provided RFS either is the sponsor of the alliance
program or has a product participation agreement with the sponsor of the        
alliance program.                                                               

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

      Adviser Funds must be notified in advance that the trade qualifies for
purchase at net asset value.                                                    

ALLIED PLANS                                                                    

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

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

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

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

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

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LETTER OF INTENTION                                                             

   The reduced front-end sales charges described above with respect to
Class A Shares are also applicable to the aggregate amount of purchases made by 
any such purchaser previously enumerated within a 13-month period pursuant to a 
written Letter of Intention provided by the Distributor and signed by the       
purchaser, and not legally binding on the signer or Adviser Funds which provides
for the holding in escrow by the Transfer Agent, of 5% of the total amount of   
Class A Shares intended to be purchased until such purchase is completed within 
the 13-month period. A Letter of Intention may be dated to include shares       
purchased up to 90 days prior to the date the Letter of Intention is signed. The
13-month period begins on the date of the earliest purchase. If the intended    
investment is not completed, except as noted below, the purchaser will be asked 
to pay an amount equal to the difference between the front-end sales charge on  
Class A Shares purchased at the reduced rate and the front-end sales charge     
otherwise applicable to the total shares purchased. If such payment is not made 
within 20 days following the expiration of the 13-month period, the Transfer    
Agent will surrender an appropriate number of the escrowed shares for redemption
in order to realize the difference. Such purchasers may include the values (at  
offering price at the level designated in their Letter of Intention) of all     
their shares of the Funds and of any class of any of the other mutual funds in  
Delaware Investments (except shares of any Delaware Investments Fund which do   
not carry a front-end sales charge, CDSC or Limited CDSC other than shares of   
Delaware Group Premium Fund beneficially owned in connection with the ownership 
of variable insurance products, unless they were acquired through an exchange   
from a Delaware Investments Fund which carried a front-end sales charge, CDSC or
Limited CDSC) previously purchased and still held as of the date of their Letter
of Intention toward the completion of such Letter. For purposes of satisfying an
investor's obligation under a Letter of Intention, Class B Shares and Class C   
Shares of the Funds and the corresponding classes of shares of other funds in   
the Delaware Investments family which offer such shares may be aggregated with  
Class A Shares of the Funds and the corresponding class of shares of the other  
funds in the Delaware Investments family.                                       

  Employers offering a Delaware Investments retirement plan may also
complete a Letter of Intention to obtain a reduced front-end sales charge on    
investments of Class A Shares made by the plan. The aggregate investment level  
of the Letter of Intention will be determined and accepted by the Transfer Agent
at the point of plan establishment. The level and any reduction in front-end    
sales charge will be based on actual plan participation and the projected       
investments in Delaware Investments Funds that are offered with a front-end     
sales charge, CDSC or Limited CDSC for a 13-month period. The Transfer Agent    
reserves the right to adjust the signed Letter of Intention based on this       
acceptance criteria. The 13-month period will begin on the date this Letter of  
Intention is accepted by the Transfer Agent. If actual investments exceed the   
anticipated level and equal an amount that would qualify the plan for further   
discounts, any front-end sales charges will be automatically adjusted. In the   
event this Letter of Intention is not fulfilled within the 13-month period, the 
plan level will be adjusted (without completing another Letter of Intention) and
the employer will be billed for the difference in front-end sales charges due,  
based on the plan's assets under management at that time. Employers may also    
include the value (at offering price at the level designated in their Letter of 
Intention) of all their shares intended for purchase that are offered with a    
front-end sales charge, CDSC or Limited CDSC of any class. Class B Shares and   
Class C Shares of the Funds and other Delaware Investments Funds which offer    
corresponding classes of shares may also be aggregated for this purpose.        

COMBINED PURCHASES PRIVILEGE                                                    

     In determining the availability of the reduced front-end sales charge
previously set forth with respect to Class A Shares, purchasers may combine the 
total amount of any combination of Class A Shares, Class B Shares and/or Class C
Shares of the Funds, as well as shares of any other class of any of the other   
Delaware Investments Funds (except shares of any Delaware Investments Fund which
do not carry a front-end sales charge, CDSC or Limited CDSC, other than shares  
of Delaware Group Premium Fund beneficially owned in connection with the        
ownership of variable insurance products, unless they were acquired through an  
exchange from a Delaware Investments Fund which carried a front-end sales       
charge, CDSC or Limited CDSC). In addition, assets held by investment advisory  
clients of Delaware Investment Advisers, the Manager's affiliate, or any of the 
Manager's other affiliates in a stable value account may be combined with other 
Delaware Investments Fund holdings.                                             

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  The privilege also extends to all purchases made at one time by an
individual; or an individual, his or her spouse and their children under 21; or 
a trustee or other fiduciary of trust estates or fiduciary accounts for the     
benefit of such family members (including certain employee benefit programs).   

RIGHT OF ACCUMULATION                                                           

     In determining the availability of the reduced front-end sales charge
with respect to the Class A Shares, purchasers may also combine any subsequent  
purchases of Class A Shares, Class B Shares and Class C Shares of the Funds, as 
well as shares of any other class of any of the other Delaware Investments Funds
which offer such classes (except shares of any Delaware Investments Fund which  
do not carry a front-end sales charge, CDSC or Limited CDSC, other than shares  
of Delaware Group Premium Fund beneficially owned in connection with the        
ownership of variable insurance products, unless they were acquired through an  
exchange from a Delaware Investments Fund which carried a front-end sales       
charge, CDSC or Limited CDSC). If, for example, any such purchaser has          
previously purchased and still holds Class A Shares of Delaware U.S. Growth Fund
and/or shares of any other of the classes described in the previous sentence    
with a value of $40,000 and subsequently purchases $10,000 at offering price of 
additional shares of Class A Shares of Delaware U.S. Growth Fund, the charge    
applicable to the $10,000 purchase would currently be 4.75%. For the purpose of 
this calculation, the shares presently held shall be valued at the public       
offering price that would have been in effect had the shares been purchased     
simultaneously with the current purchase. Investors should refer to the table of
sales charges for Class A Shares to determine the applicability of the Right of 
Accumulation to their particular circumstances.                                 

12-MONTH REINVESTMENT PRIVILEGE                                                 

     Holders of Class A Shares and Class B Shares of the Funds (and of the
Institutional Class holding shares which were acquired through an exchange from 
one of the other mutual funds in the Delaware Investments family offered with a 
front-end sales charge) who redeem such shares have one year from the date of   
redemption to reinvest all or part of their redemption proceeds in the same     
Class of the Funds or in the same Class of any of the other funds in the        
Delaware Investments family. In the case of Class A Shares, the reinvestment    
will not be assessed a front-end sales charge and in the case of Class B Shares,
the amount of the CDSC previously charged on the redemption will be reimbursed  
by the Distributor. The reinvestment will be subject to applicable eligibility  
and minimum purchase requirements and must be in states where shares of such    
other funds may be sold. This reinvestment privilege does not extend to Class A 
Shares where the redemption of the shares triggered the payment of a Limited    
CDSC. Persons investing redemption proceeds from direct investments in mutual   
funds in the Delaware Investments family, offered without a front-end sales     
charge will be required to pay the applicable sales charge when purchasing Class
A Shares. The reinvestment privilege does not extend to a redemption of Class C 
Shares.                                                                         

     Any such reinvestment cannot exceed the redemption proceeds (plus any
amount necessary to purchase a full share). The reinvestment will be made at the
net asset value next determined after receipt of remittance. In the case of     
Class B Shares, the time that the previous investment was held will be included 
in determining any applicable CDSC due upon redemptions as well as the automatic
conversion into Class A Shares.                                                 

     A redemption and reinvestment of Class B Shares could have income tax
consequences. Shareholders will receive from the Distributor the amount of the  
CDSC paid at the time of redemption as part of the reinvested shares, which may 
be treated as a capital gain to the shareholder for tax purposes. It is         
recommended that a tax advisor be consulted with respect to such transactions.  

       Any reinvestment directed to a fund in which the investor does not then
have an account will be treated like all other initial purchases of the fund's  
shares. Consequently, an investor should obtain and read carefully the          
prospectus for the fund in which the investment is intended to be made before   
investing or sending money. The prospectus contains more complete information   
about the fund, including charges and expenses.                                 

        Investors should consult their financial advisors or the Transfer Agent,
which also serves as the Fund's shareholder servicing agent, about the          
applicability of the Class A Limited CDSC in connection with the features       
described above.                                                                

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GROUP INVESTMENT PLANS                                                          

       Group Investment Plans which are not eligible to purchase shares of the
Institutional Class may also benefit from the reduced front-end sales charges   
for investments in Class A Shares, based on total plan assets. If a company has 
more than one plan investing in the Delaware Investments family of funds, then  
the total amount invested in all plans would be used in determining the         
applicable front-end sales charge reduction upon each purchase, both initial and
subsequent, upon notification to the Funds at the time of each such purchase.   
Employees participating in such Group Investment Plans may also combine the     
investments made in their plan account when determining the applicable front-end
sales charge on purchases to non-retirement Delaware Investments investment     
accounts if they so notify the Fund in which they are investing in connection   
with each purchase. See Retirement Plans for the Fund Classes under Investment  
Plans for information about Retirement Plans.                                   

        The Limited CDSC is generally applicable to any redemptions of net asset
value purchases made on behalf of a group retirement plan on which a dealer's   
commission has been paid only if such redemption is made pursuant to a          
withdrawal of the entire plan from a fund in the Delaware Investments family.   
See Contingent Deferred Sales Charge for Certain Redemptions of Class A Shares  
Purchased at Net Asset Value under Redemption and Exchange. Notwithstanding the 
foregoing, the Limited CDSC for Class A Shares on which a dealer's commission   
has been paid will be waived in connection with redemptions by certain group    
defined contribution retirement plans that purchase shares through a retirement 
plan alliance program which requires that shares will be available at net asset 
value, provided that RFS either is the sponsor of the alliance program or has a 
product participation agreement with the sponsor of the alliance program that   
specifies that the Limited CDSC will be waived.                                 

CLASS R SHARES                                                                  

Class R Shares generally are available only to (i) qualified and
non-qualified plan shareholders covering multiple employees (including 401(k),  
401(a), 457, and non-custodial 403(b) plans, as well as other non-qualified     
deferred compensation plans) with assets (at the time shares are considered for 
purchase) of $10 million or less; and (ii) to IRA rollovers from plans          
maintained on Delaware's retirement recordkeeping system that are offering R    
Class Shares to participants.                                                   

INSTITUTIONAL CLASS                                                             

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

   Shares of the Institutional Class are available for purchase at net
asset value, without the imposition of a front-end or contingent deferred sales 
charge and are not subject to Rule 12b-1 expenses.                              

INVESTMENT PLANS                                                                

REINVESTMENT PLAN/OPEN ACCOUNT                                                  

      Unless otherwise designated by shareholders in writing, dividends from
net investment income and distributions from realized securities profits, if    
any, will be automatically reinvested in additional shares of the               

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respective Fund Class in which an investor has an account (based on the net     
asset value in effect on the reinvestment date) and will be credited to the     
shareholder's account on that date. All dividends and distributions of the      
Institutional Class are reinvested in the accounts of the holders of such shares
(based on the net asset value in effect on the reinvestment date). A            
confirmation of each dividend payment from net investment income and of         
distributions from realized securities profits, if any, will be mailed to       
shareholders in the first quarter of the fiscal year.                           

       Under the Reinvestment Plan/Open Account, shareholders may purchase and
add full and fractional shares to their plan accounts at any time either through
their investment dealers or by sending a check or money order to the specific   
Class in which shares are being purchased. Such purchases, which must meet the  
minimum subsequent purchase requirements set forth in the Prospectuses and this 
Part B, are made for Class A Shares at the public offering price, and for Class 
B Shares, Class C Shares, Class R Shares and Institutional Class at the net     
asset value, at the end of the day of receipt. A reinvestment plan may be       
terminated at any time. This plan does not assure a profit nor protect against  
depreciation in a declining market.                                             

REINVESTMENT OF DIVIDENDS IN OTHER DELAWARE INVESTMENTS FAMILY OF FUNDS         

Subject to applicable eligibility and minimum initial purchase  
requirements and the limitations set forth below, holders of Class A Shares,    
Class B Shares, Class C Shares and Class R Shares may automatically reinvest    
dividends and/or distributions in any of the mutual funds in the Delaware       
Investments, including the Funds, in states where their shares may be sold. Such
investments will be at net asset value at the close of business on the          
reinvestment date without any front-end sales charge or service fee. The        
shareholder must notify the Transfer Agent in writing and must have established 
an account in the fund into which the dividends and/or distributions are to be  
invested. Any reinvestment directed to the Funds in which the investor does not 
then have an account will be treated like all other initial purchases of each   
Fund's shares. Consequently, an investor should obtain and read carefully the   
Prospectus for the fund in which the investment is intended to be made before   
investing or sending money. The Prospectus contains more complete information   
about the fund, including charges and expenses.                                 

    Subject to the following limitations, dividends and/or distributions
from other funds in Delaware Investments may be invested in shares of the Funds,
provided an account has been established. Dividends from Class A Shares may not 
be directed to Class B Shares, Class C Shares or Class R Shares. Dividends from 
Class B Shares may only be directed to other Class B Shares, dividends from     
Class C Shares may only be directed to other Class C Shares and dividends from  
Class R Shares may only be directed to other Class R Shares.                    

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

INVESTING BY EXCHANGE                                                           

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

        Holders of Class A Shares of the Funds may exchange all or part of their
shares for shares of other funds in the Delaware Investments family, including  
other Class A Shares, but may not exchange their Class A Shares for Class B     
Shares, Class C Shares or Class R Shares of the Funds or of any other fund in   
the Delaware Investments family. Holders of Class B Shares of the Funds are     
permitted to exchange all or part of their Class B Shares only into Class B     
Shares of other Delaware Investments funds. Similarly, holders of Class C Shares
of the Funds are permitted to exchange all or part of their Class C Shares only 
into Class C Shares of other Delaware Investments Funds. Class B Shares of the  
Funds and Class C Shares of the Funds acquired by exchange will continue to     
carry the CDSC and, in the case of Class B Shares, the automatic conversion     
schedule of the fund from which the                                             

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exchange is made. The holding period of Class B Shares of the Funds acquired by 
exchange will be added to that of the shares that were exchanged for purposes of
determining the time of the automatic conversion into Class A Shares of the     
Funds. Holders of Class R Shares of the Funds are permitted to exchange all or  
part of their Class R Shares only into Class R Shares of other Delaware         
Investments funds or, if Class R Shares are not available for a particular fund,
into the Class A Shares of such fund.                                           

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

INVESTING BY ELECTRONIC FUND TRANSFER                                           

    Direct Deposit Purchase Plan--Investors may arrange for the Funds to
accept for investment in Class A Shares, Class B Shares, Class C Shares or Class
R Shares, through an agent bank, preauthorized government or private recurring  
payments. This method of investment assures the timely credit to the            
shareholder's account of payments such as social security, veterans' pension or 
compensation benefits, federal salaries, Railroad Retirement benefits, private  
payroll checks, dividends, and disability or pension fund benefits. It also     
eliminates lost, stolen and delayed checks.                                     

        Automatic Investing Plan--Shareholders of Class A Shares, Class B Shares
and Class C Shares may make automatic investments by authorizing, in advance,   
monthly or quarterly payments directly from their checking account for deposit  
into their Fund account. This type of investment will be handled in either of   
the following ways. (1) If the shareholder's bank is a member of the National   
Automated Clearing House Association ("NACHA"), the amount of the investment    
will be electronically deducted from his or her account by Electronic Fund      
Transfer ("EFT"). The shareholder's checking account will reflect a debit each  
month or, as applicable, each quarter at a specified date although no check is  
required to initiate the transaction. (2) If the shareholder's bank is not a    
member of NACHA, deductions will be made by preauthorized checks, known as      
Depository Transfer Checks. Should the shareholder's bank become a member of    
NACHA in the future, his or her investments would be handled electronically     
through EFT.                                                                    

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

 * * *

  Initial investments under the Direct Deposit Purchase Plan and the
Automatic Investing Plan must be for $250 or more and subsequent investments    
under such plans must be for $25 or more. An investor wishing to take advantage 
of either service must complete an authorization form. Either service can be    
discontinued by the shareholder at any time without penalty by giving written   
notice.                                                                         

    Payments to the Funds from the federal government or its agencies on
behalf of a shareholder may be credited to the shareholder's account after such 
payments should have been terminated by reason of death or otherwise. Any such  
payments are subject to reclamation by the federal government or its agencies.  
Similarly, under certain circumstances, investments from private sources may be 
subject to reclamation by the transmitting bank. In the event of a reclamation, 
the Funds may liquidate sufficient shares from a shareholder's account to       
reimburse the government or the private source. In the event there are          
insufficient shares in the shareholder's account, the shareholder is expected to
reimburse the Funds.                                                            

DIRECT DEPOSIT PURCHASES BY MAIL                                                

        Shareholders may authorize a third party, such as a bank or employer, to
make investments directly to their Fund accounts. The Funds will accept these   
investments, such as bank-by-phone, annuity payments and payroll                

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allotments, by mail directly from the third party. Investors should contact     
their employers or financial institutions who in turn should contact Adviser    
Funds for proper instructions.                                                  

MONEYLINE(SM) ON DEMAND                                                         

     You or your investment dealer may request purchases of Fund shares by
phone using MoneyLineSM On Demand. When you authorize the Funds to accept such  
requests from you or your investment dealer, funds will be withdrawn from (for  
share purchases) your predesignated bank account. Your request will be processed
the same day if you call prior to 4 p.m., Eastern time. There is a $25 minimum  
and $50,000 maximum limit for MoneyLineSM On Demand transactions.               

It may take up to four business days for the transactions to be 
completed. You can initiate this service by completing an Account Services form.
If your name and address are not identical to the name and address on your Fund 
account, you must have your signature guaranteed. The Funds do not charge a fee 
for this service; however, your bank may charge a fee.                          

WEALTH BUILDER OPTION                                                           

    Shareholders can use the Wealth Builder Option to invest in the Fund
Classes through regular liquidations of shares in their accounts in other mutual
funds in the Delaware Investments family. Shareholders of the Fund Classes may  
elect to invest in one or more of the other mutual funds in Delaware Investments
family through the Wealth Builder Option. If in connection with the election of 
the Wealth Builder Option, you wish to open a new account to receive the        
automatic investment, such new account must meet the minimum initial purchase   
requirements described in the prospectus of the fund that you select. All       
investments under this option are exchanges and are therefore subject to the    
same conditions and limitations as other exchanges noted above.                 

 Under this automatic exchange program, shareholders can authorize
regular monthly investments (minimum of $100 per fund) to be liquidated from    
their account and invested automatically into other mutual funds in the Delaware
Investments family, subject to the conditions and limitations set forth in the  
Fund Classes' Prospectus. The investment will be made on the 20th day of each   
month (or, if the fund selected is not open that day, the next business day) at 
the public offering price or net asset value, as applicable, of the fund        
selected on the date of investment. No investment will be made for any month if 
the value of the shareholder's account is less than the amount specified for    
investment.                                                                     

     Periodic investment through the Wealth Builder Option does not insure
profits or protect against losses in a declining market. The price of the fund  
into which investments are made could fluctuate. Since this program involves    
continuous investment regardless of such fluctuating value, investors selecting 
this option should consider their financial ability to continue to participate  
in the program through periods of low fund share prices. This program involves  
automatic exchanges between two or more fund accounts and is treated as a       
purchase of shares of the fund into which investments are made through the      
program. See Redemption and Exchange for a brief summary of the tax consequences
of exchanges. Shareholders can terminate their participation in Wealth Builder  
at any time by giving written notice to the fund from which exchanges are made. 

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

ASSET PLANNER                                                                   

     To invest in Delaware Investments Funds using the Asset Planner asset
allocation service, you should complete an Asset Planner Account Registration   
Form, which is available only from a financial advisor or investment dealer.    
Effective September 1, 1997, the Asset Planner Service is only available to     
financial advisors or investment dealers who have previously used this service. 
The Asset Planner service offers a choice of four predesigned asset allocation  
strategies (each with a different risk/reward profile) in predetermined         
percentages in                                                                  

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Delaware Investments Funds. With the help of a financial advisor, you may also  
design a customized asset allocation strategy ("Strategy").                     

      The sales charge on an investment through the Asset Planner service is
determined by the individual sales charges of the underlying funds and their    
percentage allocation in the selected Strategy. Exchanges from existing Delaware
Investments accounts into the Asset Planner service may be made at net asset    
value under the circumstances described under Investing by Exchange. Also see   
Buying Class A Shares at Net Asset Value. The minimum initial investment per    
Strategy is $2,000; subsequent investments must be at least $100. Individual    
fund minimums do not apply to investments made using the Asset Planner service. 
Class A, Class B, Class C Shares and Class R Shares are available through the   
Asset Planner service. Generally, only shares within the same class may be used 
within the same Strategy. However, Class A Shares of the Fund and of other funds
in the Delaware Investments family may be used in the same Strategy with        
Consultant Class Shares that are offered by certain other Delaware Investments  
funds.                                                                          

    An annual maintenance fee, currently $35 per Strategy, is due at the
time of initial investment and by September 30 of each subsequent year. The fee,
payable to Delaware Service Company, Inc. to defray extra costs associated with 
administering the Asset Planner service, will be deducted automatically from one
of the funds within your Asset Planner account if not paid by September 30.     
However, effective November 1, 1996, the annual maintenance fee is waived until 
further notice. Investors who utilize the Asset Planner for an IRA will continue
to pay an annual IRA fee of $15 per Social Security number. Investors will      
receive a customized quarterly Strategy Report summarizing all Asset Planner    
investment performance and account activity during the prior period.            
Confirmation statements will be sent following all transactions other than those
involving a reinvestment of distributions.                                      

     Certain shareholder services are not available to investors using the
Asset Planner service, due to its special design. These include Delaphone,      
Checkwriting, Wealth Builder Option and Letter of Intention. Systematic         
Withdrawal Plans are available after the account has been open for two years.   

RETIREMENT PLANS FOR THE FUND CLASSES                                           

      An investment in the Funds may be suitable for tax-deferred retirement
plans. Delaware Investments offers a full spectrum of retirement plans,         
including a 401(k) Defined Contribution Plan, an Individual Retirement Account  
("IRA") and the new Roth IRA and the Coverdell Education Savings Account.       

    Among the retirement plans that Delaware Investments offers, Class B
Shares are available only for Individual Retirement Accounts, SIMPLE IRAs, Roth 
IRAs, Coverdell Education Savings Accounts, Simplified Employee Pension Plans,  
Salary Reduction Simplified Employee Pension Plans, 403(b)(7) Plans and 457     
Deferred Compensation Plans. The CDSC may be waived on certain redemptions of   
Class B Shares and Class C Shares. See Waiver of Contingent Deferred Sales      
Charge - Class B Shares and Class C Shares under Redemption and Exchange for a  
list of the instances in which the CDSC is waived.                              

        Purchases of Class B Shares are subject to a maximum purchase limitation
of $100,000 for retirement plans. Purchases of Class C Shares must be in an     
amount that is less than $1,000,000 for such plans. The maximum purchase        
limitations apply only to the initial purchase of shares by the retirement plan.

      Minimum investment limitations generally applicable to other investors
do not apply to retirement plans other than IRAs, for which there is a minimum  
initial purchase of $250 and a minimum subsequent purchase of $25, regardless of
which Class is selected. Retirement plans may be subject to plan establishment  
fees, annual maintenance fees and/or other administrative or trustee fees. Fees 
are based upon the number of participants in the plan as well as the services   
selected. Additional information about fees is included in the retirement plan  
materials. Fees are quoted upon request. Annual maintenance fees may be shared  
by Delaware Management Trust Company, the Transfer Agent, other affiliates of   
the Manager and others that provide services to such Plans.                     

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        Certain shareholder investment services available to non-retirement plan
shareholders may not be available to retirement plan shareholders. Certain      
retirement plans may qualify to purchase shares of the Institutional Class      
shares. See Institutional Class, above. For additional information on any of the
plans and Delaware's retirement services, call the Shareholder Service Center   
telephone number.                                                               

     IT IS ADVISABLE FOR AN INVESTOR CONSIDERING ANY ONE OF THE RETIREMENT
PLANS DESCRIBED BELOW TO CONSULT WITH AN ATTORNEY, ACCOUNTANT OR A QUALIFIED    
RETIREMENT PLAN CONSULTANT. FOR FURTHER DETAILS, INCLUDING APPLICATIONS FOR ANY 
OF THESE PLANS, CONTACT YOUR INVESTMENT DEALER OR THE DISTRIBUTOR.              

      Taxable distributions from the retirement plans described below may be
subject to withholding.                                                         

        Please contact your investment dealer or the Distributor for the special
application forms required for the Plans described below.                       

PROTOTYPE PROFIT SHARING OR MONEY PURCHASE PENSION PLANS                        

Prototype Plans are available for self-employed individuals,    
partnerships, corporations and other eligible forms of organizations. These     
plans can be maintained as Section 401(k), profit sharing or money purchase     
pension plans. Contributions may be invested only in Class A Shares, Class C    
Shares and Class R Shares.                                                      

INDIVIDUAL RETIREMENT ACCOUNT ("IRA")                                           

       A document is available for an individual who wants to establish an IRA
and make contributions which may be tax-deductible, even if the individual is   
already participating in an employer-sponsored retirement plan. Even if         
contributions are not deductible for tax purposes, as indicated below, earnings 
will be tax-deferred. In addition, an individual may make contributions on      
behalf of a spouse who has no compensation for the year; however, the           
deductibility of such contributions may be restricted based on certain income   
limits.                                                                         

IRA DISCLOSURES                                                                 

The Taxpayer Relief Act of 1997 provides new opportunities for  
investors. Individuals have five types of tax-favored IRA accounts that can be  
utilized depending on the individual's circumstances. A new Roth IRA and a      
Coverdell Education Savings Account are available in addition to the existing   
deductible IRA and non-deductible IRA.                                          

DEDUCTIBLE AND NON-DEDUCTIBLE IRAS                                              

     An individual can contribute up to $3,000 to his or her IRA each year
through 2004. Contributions may or may not be deductible depending upon the     
taxpayer's adjusted gross income ("AGI"), not counting any IRA deductions, and  
whether the taxpayer is an active participant in an employer sponsored          
retirement plan.                                                                

      In June 2001, The Economic Growth and Tax Relief Reconciliation Act of
2001 was signed into law and makes significant changes to the annual            
contribution limits. The current $3,000 limit will rise to $5,000 in 2008 with  
annual inflation adjustments thereafter. Individuals who have attained age 50 by
the end of the calendar year will be eligible to make additional "catch-up"     
contributions of $500 for 2002 through 2005, and $1,000 beginning in 2006.      

The annual contribution limits through 2008 are as follows:     

                            Age 50 and
Calendar Year   Under Age 50       Above      
-------------   ------------   ------------   
  2004       $      3,000   $      3,500
  2005       $      4,000   $      4,500
2006-2007     $      4,000   $      5,000 
  2008       $      5,000   $      6,000

    Even if a taxpayer is an active participant in an employer sponsored
retirement plan, the full $3,000 in 2004 and increased limits in subsequent     
years are still available if the taxpayer's AGI is not greater than $40,000     
($60,000                                                                        

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for taxpayers filing joint returns) for tax years beginning in 2004. A partial  
deduction is allowed for married couples with income greater than $65,000 and   
less than $75,000, and for single individuals with an AGI greater than $45,000  
and less than $55,000. These income phase-out limits are annually increased     
until they reach $80,000-$100,000 in 2007 for joint filers and $50,000-$60,000  
in 2005 for single filers. No deductions are available for contributions to IRAs
by taxpayers whose AGI exceeds the maximum income limit established for each    
year and who are active participants in an employer sponsored retirement plan.  

       Taxpayers who are not allowed deductions on IRA contributions still can
make non-deductible IRA contributions of as much as the annual contribution     
limits and defer taxes on interest or other earnings from the IRAs.             

Under the law, a married individual is not considered an active 
participant in an employer sponsored retirement plan merely because the         
individual's spouse is an active participant if the couple's combined AGI is not
greater than $150,000. The maximum deductible IRA contribution for a married    
individual who is not an active participant, but whose spouse is, is phased out 
for combined AGI greater than $150,000 and less than $160,000.                  

CONDUIT (ROLLOVER) IRAS                                                         

      Certain individuals who have received or are about to receive eligible
rollover distributions from an employer-sponsored retirement plan or another IRA
may rollover the distribution tax-free to a Conduit IRA. The rollover of the    
eligible distribution must be completed by the 60th day after receipt of the    
distribution.                                                                   

        A distribution qualifies as an "eligible rollover distribution" if it is
made from a qualified retirement plan, a 403(b) plan or another IRA and does not
constitute one of the following:                                                

      (1)     Substantially equal periodic payments over the employee's life
 or life expectancy or the joint lives or life expectancies of the
employee and his/her designated beneficiary;                    

        (2)     Substantially equal installment payments for a period certain of
10 or more years;                                               

  (3)     A distribution, all of which represents a required minimum
distribution after attaining age 70 1/2;                        

        (4)     A distribution due to a Qualified Domestic Relations Order to an
alternate payee who is not the spouse (or former spouse) of the 
employee; and                                                   

(5)     A distribution of after-tax contributions which is not  
includable in income.                                           

ROTH IRAS                                                                       

   For taxable years beginning after December 31, 1997, non-deductible
contributions of up to $3,000 each year through 2004 can be made to a Roth IRA, 
reduced by any contributions to a deductible or nondeductible IRA for the same  
year. The limits after 2004 are the same as for a regular IRA. The maximum      
contribution that can be made to a Roth IRA is phased out for single filers with
an AGI greater than $95,000 and less than $110,000, and for couples filing      
jointly with an AGI greater than $150,000 and less than $160,000. Qualified     
distributions from a Roth IRA are exempt from federal taxes. Qualified          
distributions are distributions (1) made after the five-taxable year period     
beginning with the first taxable year for which a contribution was made to a    
Roth IRA and (2) that are (a) made on or after the date on which the individual 
attains age 59 1/2, (b) made to a beneficiary on or after the death of the      
individual, (c) attributable to the individual being disabled, or (d) for a     
qualified special purpose (e.g., first time homebuyer expenses).                

      Distributions that are not qualified distributions are tax-free if the
taxpayer is withdrawing contributions, not accumulated earnings.                

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    Taxpayers with an AGI of $100,000 or less are eligible to convert an
existing IRA (deductible, nondeductible and conduit) to a Roth IRA. Earnings and
previously deducted contributions held in the IRA are subject to a tax upon     
conversion; however, no 10% additional tax for early withdrawal would apply.    

COVERDELL EDUCATION SAVINGS ACCOUNTS                                            

        The annual contribution that can be made for each designated beneficiary
is $2,000 and qualifying expenses will no longer be limited to those related to 
higher education.                                                               

    Elementary (including kindergarten) and secondary public, private or
religious school tuition expenses will now qualify. The new law specifically    
permits as elementary and secondary school expenses academic tutoring; certain  
computer technology; and expenses for uniforms, transportation, and extended day
programs.                                                                       

       The $2,000 annual limit is an addition to the annual contribution limit
as applicable to IRAs and Roth IRAs. Eligible contributions must be in cash and 
made prior to the date the beneficiary reaches age 18. Similar to the Roth IRA, 
earnings would accumulate tax-free. There is no requirement that the contributor
be related to the beneficiary, and there is no limit on the number of           
beneficiaries for whom one contributor can establish Coverdell Education Savings
Accounts. In addition, multiple Coverdell Education Savings Accounts can be     
created for the same beneficiary, however, the contribution limit of all        
contributions for a single beneficiary cannot exceed the annual limit.          

       The modified AGI limit increases for couples filing jointly to $190,000
for a full contribution through $220,000 for a partial contribution. Individuals
with modified AGI above the phase-out range are not allowed to make             
contributions to a Coverdell Education Savings Account established on behalf of 
any individual.                                                                 

       Distributions from a Coverdell Education Savings Account are excludable
from gross income to the extent that the distribution does not exceed qualified 
higher education expenses incurred by the beneficiary during the year the       
distribution is made regardless of whether the beneficiary is enrolled at an    
eligible educational institution on a full-time, half-time, or less than        
half-time basis.                                                                

     Any balance remaining in a Coverdell Education Savings Account at the
time a beneficiary becomes 30 years old must be distributed, and the earnings   
portion of such a distribution will be includable in gross income of the        
beneficiary and generally subject to an additional 10% tax if the distribution  
is not for qualified higher education expenses. Tax-free transfers and rollovers
of account balances from one Coverdell Education Savings Account benefiting one 
beneficiary to another Coverdell Education Savings Account benefiting a         
different beneficiary (as well as redesignations of the named beneficiary) are  
permitted, provided that the new beneficiary is a member of the family of the   
old beneficiary and that the transfer or rollover is made before the time the   
old beneficiary reaches age 30 and the new beneficiary reaches age 18.          

GROUP IRAS OR GROUP ROTH IRAS                                                   

        A company or association may establish a Group IRA or Group Roth IRA for
employees or members who want to purchase shares of either Fund.                

       Investments generally must be held in the IRA until age 59 1/2 in order
to avoid premature distribution penalties, but distributions generally must     
commence no later than April 1 of the calendar year following the year in which 
the participant reaches age 70 1/2. Individuals are entitled to revoke the      
account, for any reason and without penalty, by mailing written notice of       
revocation to Delaware Management Trust Company within seven days after the     
receipt of the IRA Disclosure Statement or within seven days after the          
establishment of the IRA, except, if the IRA is established more than seven days
after receipt of the IRA Disclosure Statement, the account may not be revoked.  
Distributions from the account (except for the pro-rata portion of any          
nondeductible contributions) are fully taxable as ordinary income in the year   
received. Excess contributions removed after the tax filing deadline, plus      
extensions, for the year in which the excess contributions were made are subject
to a 6% excise tax on the amount of excess. Premature distributions             
(distributions made before age 59 1/2, except for death, disability and certain 
other limited circumstances) will be subject to a 10% excise tax on the amount  
prematurely distributed, in                                                     

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addition to the income tax resulting from the distribution. For information     
concerning the applicability of a CDSC upon redemption of Class B Shares and    
Class C Shares, see Contingent Deferred Sales Charge - Class B Shares and Class 
C Shares.                                                                       

      Effective January 1, 1997, the 10% premature distribution penalty does
not apply to distributions from an IRA that are used to pay medical expenses in 
excess of 7.5% of adjusted gross income or to pay health insurance premiums by  
an individual who has received unemployment compensation for 12 consecutive     
weeks. In addition, effective January 1, 1998, the law allows for premature     
distribution without a 10% penalty if (i) the amounts are used to pay qualified 
higher education expenses (including graduate level courses) of the taxpayer,   
the taxpayer's spouse or any child or grandchild of the taxpayer or the         
taxpayer's spouse, or (ii) used to pay acquisition costs of a principle         
residence for the purchase of a first-time home by the taxpayer, taxpayer's     
spouse or any child or grandchild of the taxpayer or the taxpayer's spouse. A   
qualified first-time homebuyer is someone who has had no ownership interest in a
residence during the past two years. The aggregate amount of distribution for   
first-time home purchases cannot exceed a lifetime cap of $10,000.              

SIMPLIFIED EMPLOYEE PENSION PLAN ("SEP/IRA")                                    

   A SEP/IRA may be established by an employer who wishes to sponsor a
tax-sheltered retirement program by making contributions on behalf of all       
eligible employees. Each of the Classes are available for investment by a       
SEP/IRA.                                                                        

SALARY REDUCTION SIMPLIFIED EMPLOYEE PENSION PLAN ("SAR/SEP")                   

    Although new SAR/SEP plans may not be established after December 31,
1996, existing plans may continue to be maintained by employers having 25 or    
fewer employees. An employer may elect to make additional contributions to such 
existing plans.                                                                 

PROTOTYPE 401(K) DEFINED CONTRIBUTION PLAN                                      

   Section 401(k) of the Code permits employers to establish qualified
plans based on salary deferral contributions. Effective January 1, 1997,        
non-governmental tax-exempt organizations may establish 401(k) plans. Plan      
documents are available to enable employers to establish a plan. An employer may
also elect to make profit sharing contributions and/or matching contributions   
with investments in only Class A Shares, Class C Shares and Class R Shares or   
certain other funds in the Delaware Investments family. Purchases under the Plan
may be combined for purposes of computing the reduced front-end sales charge    
applicable to Class A Shares as set forth in the table in the Prospectus for the
Fund Classes.                                                                   

DEFERRED COMPENSATION PLAN FOR PUBLIC SCHOOLS AND NON-PROFIT ORGANIZATIONS      
("403(B)(7)")                                                                   

       Section 403(b)(7) of the Code permits public school systems and certain
non-profit organizations to use mutual fund shares held in a custodial account  
to fund deferred compensation arrangements for their employees. A custodial     
account agreement is available for those employers who wish to purchase shares  
of any of the Classes in conjunction with such an arrangement. Purchases under  
the Plan may be combined for purposes of computing the reduced front-end sales  
charge applicable to Class A Shares as set forth in the table in the Prospectus 
for the Fund Classes.                                                           

DEFERRED COMPENSATION PLAN FOR STATE AND LOCAL GOVERNMENT EMPLOYEES ("457")     

  Section 457 of the Code permits state and local governments, their
agencies and certain other entities to establish a deferred compensation plan   
for their employees who wish to participate. This enables employees to defer a  
portion of their salaries and any federal (and possibly state) taxes thereon.   
Such plans may invest in shares of the Funds. Although investors may use their  
own plan, there is available a Delaware Investments 457 Deferred Compensation   
Plan. Interested investors should contact the Distributor or their investment   
dealers to obtain further information. Purchases under the Plan may be combined 
for purposes of computing the reduced front-end sales charge applicable to Class
A Shares as set forth in the table in the Prospectus for the Fund Classes.      

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SIMPLE IRA                                                                      

      A SIMPLE IRA combines many of the features of an IRA and a 401(k) Plan
but is easier to administer than a typical 401(k) Plan. It requires employers to
make contributions on behalf of their employees and also has a salary deferral  
feature that permits employees to defer a portion of their salary into the plan 
on a pre-tax basis. A SIMPLE IRA is available only to plan sponsors with 100 or 
fewer employees.                                                                

SIMPLE 401(K)                                                                   

       SIMPLE 401(k) is like a regular 401(k) except that it is available only
to plan sponsors with 100 or fewer employees and, in exchange for mandatory plan
sponsor contributions, discrimination testing is no longer required. Class B    
Shares are not available for purchase by such plans.                            

DETERMINING OFFERING PRICE AND NET ASSET VALUE                                  

   Orders for purchases of Class A Shares are effected at the offering
price next calculated after receipt of the order by the Funds, their agent or   
certain other authorized persons. See Distribution and Service under Investment 
Management Agreement. Orders for purchases of Class B Shares, Class C Shares,   
Class R Shares and Institutional Class shares are effected at the net asset     
value per share next calculated after receipt of the order by the Funds, their  
agent or certain other authorized persons. Selling dealers are responsible for  
transmitting orders promptly.                                                   

     The offering price for Class A Shares consists of the net asset value
per share plus any applicable sales charges. Offering price and net asset value 
are computed as of the close of regular trading on the New York Stock Exchange  
(ordinarily, 4 p.m., Eastern time) on days when the New York Stock Exchange is  
open. The New York Stock Exchange is scheduled to be open Monday through Friday 
throughout the year except for days when the following holidays are observed:   
New Year's Day, Martin Luther King, Jr.'s Birthday, Presidents' Day, Good       
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas.  
When the New York Stock Exchange is closed, the Funds will generally be closed, 
pricing calculations will not be made and purchase and redemption orders will   
not be processed.                                                               

      An example showing how to calculate the net asset value per share and,
in the case of Class A Shares, the offering price per share, is included in the 
Funds' financial statements, which are incorporated by reference into this      
Part B.                                                                         

       The Funds' net asset value per share is computed by adding the value of
all the securities and other assets in the Funds' portfolios, deducting any     
liabilities of the Funds, and dividing by the number of the Funds' shares       
outstanding. Expenses and fees are accrued daily. In determining each Fund's    
total net assets, portfolio securities primarily listed or traded on a national 
or foreign securities exchange, except for bonds, are generally valued at the   
closing price on that exchange, unless such closing prices are determined to be 
not readily available pursuant to the Funds' pricing procedures. Exchange traded
options are valued at the last reported sale price or, if no sales are reported,
at the mean between bid and asked prices. Non-exchange traded options are valued
at fair value using a mathematical model. Futures contracts are valued at their 
daily quoted settlement price. Securities not traded on a particular day,       
over-the-counter securities, and government and agency securities are valued at 
the mean value between bid and asked prices. Money market instruments having a  
maturity of less than 60 days are valued at amortized cost. Debt securities     
(other than short-term obligations) are valued on the basis of valuations       
provided by a pricing service when such prices are believed to reflect the fair 
value of such securities. Foreign securities and the prices of foreign          
securities denominated in foreign currencies are translated to U.S. dollars at  
the mean between the bid and offer quotations of such currencies based on rates 
in effect as of the close of the London Stock Exchange. Use of a pricing service
has been approved by the Board of Trustees. Prices provided by a pricing service
take into account appropriate factors such as institutional trading in similar  
groups of securities, yield, quality, coupon rate, maturity, type of issue,     
trading characteristics and other market data. Subject to the foregoing,        
securities for which market quotations are not readily available and other      
assets are valued at fair value as determined in good faith and in a method     
approved by the Board of Trustees.                                              

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

REDEMPTION AND EXCHANGE                                                         

     YOU CAN REDEEM OR EXCHANGE YOUR SHARES IN A NUMBER OF DIFFERENT WAYS.
The exchange service is useful if your investment requirements change and you   
want an easy way to invest in other equity funds, tax-advantaged funds, bond    
funds or money market funds. This service is also useful if you are anticipating
a major expenditure and want to move a portion of your investment into a fund   
that has the checkwriting feature. Exchanges are subject to the requirements of 
the funds and all exchanges of shares constitute taxable events. Further, in    
order for an exchange to be processed, shares of the fund being acquired must be
registered in the state where the acquiring shareholder resides. You may want to
consult your financial advisor or investment dealer to discuss which funds in   
Delaware Investments will best meet your changing objectives, and the           
consequences of any exchange transaction. You may also call the Delaware        
Investments directly for fund information.                                      

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

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

       In addition to redemption of the Funds' shares, the Distributor, acting
as agent of the Funds, offers to repurchase Fund shares from broker/dealers     
acting on behalf of shareholders. The redemption or repurchase price, which may 
be more or less than the shareholder's cost, is the net asset value per share   
next determined after receipt of the request in good order by the Funds, their  
agent, or certain authorized persons, subject to applicable CDSC or Limited     
CDSC. This is computed and effective at the time the offering price and net     
asset value are determined. See Determining Offering Price and Net Asset Value. 
The Funds and the Distributor end their business days at 5 p.m., Eastern time.  
This offer is discretionary and may be completely withdrawn without further     
notice by the Distributor.                                                      

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   Orders for the repurchase of Fund shares which are submitted to the
Distributor prior to the close of its business day will be executed at the net  
asset value per share computed that day (subject to the applicable CDSC or      
Limited CDSC), if the repurchase order was received by the broker/dealer from   
the shareholder prior to the time the offering price and net asset value are    
determined on such day. The selling dealer has the responsibility of            
transmitting orders to the Distributor promptly. Such repurchase is then settled
as an ordinary transaction with the broker/dealer (who may make a charge to the 
shareholder for this service) delivering the shares repurchased.                

       Payment for shares redeemed will ordinarily be mailed the next business
day, but in no case later than seven days, after receipt of a redemption request
in good order by either Fund or certain other authorized persons (see           
Distribution and Service under Investment Management Agreement); provided,      
however, that each commitment to mail or wire redemption proceeds by a certain  
time, as described below, is modified by the qualifications described in the    
next paragraph.                                                                 

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

      If a shareholder has been credited with a purchase by a check which is
subsequently returned unpaid for insufficient funds or for any other reason, the
Funds will automatically redeem from the shareholder's account the shares       
purchased by the check plus any dividends earned thereon. Shareholders may be   
responsible for any losses to the Funds or to the Distributor.                  

   In case of a suspension of the determination of the net asset value
because the New York Stock Exchange is closed for other than weekends or        
holidays, or trading thereon is restricted or an emergency exists as a result of
which disposal by the Funds of securities owned by them are not reasonably      
practical, or they are not reasonably practical for the Funds fairly to value   
their assets, or in the event that the SEC has provided for such suspension for 
the protection of shareholders, the Funds may postpone payment or suspend the   
right of redemption or repurchase. In such case, the shareholder may withdraw   
the request for redemption or leave it standing as a request for redemption at  
the net asset value next determined after the suspension has been terminated.   

        Payment for shares redeemed or repurchased may be made either in cash or
kind, or partly in cash and partly in kind. Any portfolio securities paid or    
distributed in kind would be valued as described in Determining Offering Price  
and Net Asset Value. Subsequent sale by an investor receiving a distribution in 
kind could result in the payment of brokerage commissions. However, Adviser     
Funds has elected to be governed by Rule 18f-1 under the 1940 Act pursuant to   
which the Funds are obligated to redeem shares solely in cash up to the lesser  
of $250,000 or 1% of the net asset value of such Funds during any 90-day period 
for any one shareholder.                                                        

  The value of each Fund's investments is subject to changing market
prices. Thus, a shareholder reselling shares to the Funds may sustain either a  
gain or loss, depending upon the price paid and the price received for such     
shares.                                                                         

      Certain redemptions of Class A Shares purchased at net asset value may
result in the imposition of a Limited CDSC. See Contingent Deferred Sales Charge
for Certain Redemptions of Class A Shares Purchased at Net Asset Value, below.  
Class B Shares of Delaware U.S. Growth Fund are subject to a CDSC of: (i) 4.00% 
if shares are redeemed within one year of purchase; (ii) 3.25% if shares are    
redeemed during the second year after purchase (iii) 2.75% if shares are        
redeemed during the third year following purchase; (iv) 2.25% if shares are     
redeemed during the fourth or fifth year following purchase; (v) 1.50% if shares
are redeemed during the sixth year following purchase; and (vi) 0% thereafter.  
Class B Shares of the Delaware Diversified Income Fund are purchased at net     
asset value and are subject to a CDSC of: (i) 4.00% if shares are redeemed      
during the first year following purchase; (ii) 3.00% if                         

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shares are redeemed during the second year following purchase; (iii) 2.25% if   
shares are redeemed during the third year following purchase; (iv) 1.50% if     
shares are redeemed during the fourth and fifth years following purchase; (v)   
1.00% if shares are redeemed during the sixth year following purchase; and (vi) 
0.00% thereafter. Class C Shares are subject to a CDSC of 1% if shares are      
redeemed within 12 months following purchase. See Contingent Deferred Sales     
Charge - Class B Shares and Class C Shares under Purchasing Shares. Except for  
the applicable CDSC or Limited CDSC and, with respect to the expedited payment  
by wire described below for which, in the case of the Fund Classes, there may be
a bank wiring cost, neither the Funds nor the Distributor charge a fee for      
redemptions or repurchases, but such fees could be charged at any time in the   
future.                                                                         

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

   Each Fund also reserves the right to refuse the purchase side of an
exchange request by any person, or group if, in the Manager's judgment, the Fund
would be unable to invest effectively in accordance with its investment         
objectives and policies, or would otherwise potentially be adversely affected. A
shareholder's purchase exchanges may be restricted or refused if a Fund receives
or anticipates simultaneous orders affecting significant portions of the Fund's 
assets.                                                                         

WRITTEN REDEMPTION                                                              

  You can write to the Funds at 2005 Market Street, Philadelphia, PA
19103-7094 to redeem some or all of your shares. The request must be signed by  
all owners of the account or your investment dealer of record. For redemptions  
of more than $100,000, or when the proceeds are not sent to the shareholder(s)  
at the address of record, the Funds require a signature by all owners of the    
account and a signature guarantee for each owner. A signature guarantee can be  
obtained from a commercial bank, a trust company or a member of a Securities    
Transfer Association Medallion Program ("STAMP"). Each Fund reserves the right  
to reject a signature guarantee supplied by an eligible institution based on its
creditworthiness. The Funds may require further documentation from corporations,
executors, retirement plans, administrators, trustees or guardians.             

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

   The Fund discourages purchases by market timers and purchase orders
(including the purchase side of exchange orders) by shareholders identified as  
market timers may be rejected. The Fund will consider anyone who follows a      
pattern of market timing in any fund in the Delaware Investments Family of Funds
to be a market timer.                                                           

    Market timing of a fund occurs when investors make consecutive rapid
short-term "roundtrips", or in other words, purchases into a fund followed      
quickly by redemptions out of that fund. A short-term roundtrip is any          
redemption of fund shares within 20 business days of a purchase of that fund's  
shares. If you make a second such short-term roundtrip in a fund within the same
calendar quarter of a previous short-term roundtrip in that fund, you may be    
considered a market timer. The purchase and sale of fund shares through the use 
of the exchange privilege are also included in determining whether market timing
has occurred. The Fund also reserves the right to consider other trading        
patterns as market timing.                                                      

       Your ability to use the Fund's exchange privilege may be limited if you
are identified as a market timer. If you are identified as a market timer, we   
will execute the redemption side of your exchange order but may refuse the      
purchase side of your exchange order.                                           

WRITTEN EXCHANGE                                                                

        You may also write to the Funds (at 2005 Market Street, Philadelphia, PA
19103-7094) to request an exchange of any or all of your shares into another    
mutual fund in Delaware Investments, subject to the same conditions and         
limitations as other exchanges noted above.                                     

TELEPHONE REDEMPTION AND EXCHANGE                                               

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

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

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

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TELEPHONE REDEMPTION--CHECK TO YOUR ADDRESS OF RECORD                           

     THE TELEPHONE REDEMPTION FEATURE IS A QUICK AND EASY METHOD TO REDEEM
SHARES. You or your investment dealer of record can have redemption proceeds of 
$100,000 or less mailed to you at your address of record. Checks will be payable
to the shareholder(s) of record. Payment is normally mailed the next business   
day after receipt of the redemption request. This service is only available to  
individual, joint and individual fiduciary-type accounts.                       

TELEPHONE REDEMPTION--PROCEEDS TO YOUR BANK                                     

Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this       
service when you open your account. If you change your predesignated bank       
account, you must complete an Authorization Form and have your signature        
guaranteed. For your protection, your authorization must be on file. If you     
request a wire, your funds will normally be sent the next business day. If the  
proceeds are wired to the shareholder's account at a bank which is not a member 
of the Federal Reserve System, there could be a delay in the crediting of the   
funds to the shareholder's bank account. A bank wire fee may be deducted from   
Fund Class redemption proceeds. If you ask for a check, it will normally be     
mailed the next business day after receipt of your redemption request to your   
predesignated bank account. There are no separate fees for this redemption      
method, but the mail time may delay getting funds into your bank account. Simply
call the Shareholder Service Center prior to the time the offering price and net
asset value are determined, as noted above.                                     

TELEPHONE EXCHANGE                                                              

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

The telephone exchange privilege is intended as a convenience to
shareholders and is not intended to be a vehicle to speculate on short-term     
swings in the securities market through frequent transactions in and out of the 
funds in the Delaware Investments family. Telephone exchanges may be subject to 
limitations as to amounts or frequency. The Transfer Agent and each Fund reserve
the right to record exchange instructions received by telephone and to reject   
exchange requests at any time in the future.                                    

MONEYLINE(SM) ON DEMAND                                                         

   You or your investment dealer may request redemptions of Fund Class
shares by phone using MoneyLineSM On Demand. When you authorize the Funds to    
accept such requests from you or your investment dealer, funds will be deposited
to (for share redemptions) your predesignated bank account. Your request will be
processed the same day if you call prior to 4 p.m., Eastern time. There is a $25
minimum and $50,000 maximum limit for MoneyLineSM On Demand transactions. See   
MoneyLineSM On Demand under Investment Plans.                                   

SYSTEMATIC WITHDRAWAL PLANS                                                     

        Shareholders of Class A Shares, Class B Shares, Class C Shares and Class
R Shares who own or purchase $5,000 or more of shares at the offering price, or 
net asset value, as applicable, for which certificates have not been issued may 
establish a Systematic Withdrawal Plan for monthly withdrawals of $25 or more,  
or quarterly withdrawals of $75 or more, although the Funds do not recommend any
specific amount of withdrawal. This is particularly useful to shareholders      
living on fixed incomes, since it can provide them with a stable supplemental   
amount. This $5,000 minimum does not apply for the Funds' prototype retirement  
plans. Shares purchased with the initial investment and through reinvestment of 
cash dividends and realized securities profits distributions will be credited to
the shareholder's account and sufficient full and fractional shares will be     
redeemed at the net asset value calculated on the third business day preceding  
the mailing date.                                                               

        Checks are dated either the 1st or the 15th of the month, as selected by
the shareholder (unless such date falls on a holiday or a weekend), and are     
normally mailed within two business days. Both ordinary income dividends and    
realized securities profits distributions will be automatically reinvested in   
additional shares of the Class at net                                           

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asset value. This plan is not recommended for all investors and should be       
started only after careful consideration of its operation and effect upon the   
investor's savings and investment program. To the extent that withdrawal        
payments from the plan exceed any dividends and/or realized securities profits  
distributions paid on shares held under the plan, the withdrawal payments will  
represent a return of capital, and the share balance may in time be depleted,   
particularly in a declining market. Shareholders should not purchase additional 
shares while participating in a Systematic Withdrawal Plan.                     

      The sale of shares for withdrawal payments constitutes a taxable event
and a shareholder may incur a capital gain or loss for federal income tax       
purposes. This gain or loss may be long-term or short-term depending on the     
holding period for the specific shares liquidated. Premature withdrawals from   
retirement plans may have adverse tax consequences.                             

   Withdrawals under this plan made concurrently with the purchases of
additional shares may be disadvantageous to the shareholder. Purchases of Class 
A Shares through a periodic investment program in the Fund managed by the       
Manager must be terminated before a Systematic Withdrawal Plan with respect to  
such shares can take effect, except if the shareholder is a participant in one  
of our retirement plans or is investing in Delaware Investments Funds which do  
not carry a sales charge. Redemptions of Class A Shares pursuant to a Systematic
Withdrawal Plan may be subject to a Limited CDSC if the purchase was made at net
asset value and a dealer's commission has been paid on that purchase. The       
applicable Limited CDSC for Class A Shares and CDSC for Class B and C Shares    
redeemed via a Systematic Withdrawal Plan will be waived if the annual amount   
withdrawn in each year is less than 12% of the account balance on the date that 
the Plan is established. If the annual amount withdrawn in any year exceeds 12% 
of the account balance on the date that the Systematic Withdrawal Plan is       
established, all redemptions under the Plan will be subjected to the applicable 
contingent deferred sales charge, including an assessment for previously        
redeemed amounts under the Plan. Whether a waiver of the contingent deferred    
sales charge is available or not, the first shares to be redeemed for each      
Systematic Withdrawal Plan payment will be those not subject to a contingent    
deferred sales charge because they have either satisfied the required holding   
period or were acquired through the reinvestment of distributions. See Waiver of
Contingent Deferred Sales Charges, below.                                       

       An investor wishing to start a Systematic Withdrawal Plan must complete
an authorization form. If the recipient of Systematic Withdrawal Plan payments  
is other than the registered shareholder, the shareholder's signature on this   
authorization must be guaranteed. Each signature guarantee must be supplied by  
an eligible guarantor institution. Each Fund reserves the right to reject a     
signature guarantee supplied by an eligible institution based on its            
creditworthiness. This plan may be terminated by the shareholder or the Transfer
Agent at any time by giving written notice.                                     

      Systematic Withdrawal Plan payments are normally made by check. In the
alternative, you may elect to have your payments transferred from your Fund     
account to your predesignated bank account through the MoneyLineSM Direct       
Deposit Service. Your funds will normally be credited to your bank account up to
four business days after the payment date. There are no separate fees for this  
redemption method. It may take up to four business days for the transactions to 
be completed. You can initiate this service by completing an Account Services   
form. If your name and address are not identical to the name and address on your
Fund account, you must have your signature guaranteed. The Funds do not charge a
fee for this service; however, your bank may charge a fee. This service is not  
available for retirement plans.                                                 

     The Systematic Withdrawal Plan is not available for the Institutional
Class. Shareholders should consult with their financial advisors to determine   
whether a Systematic Withdrawal Plan would be suitable for them.                

CONTINGENT DEFERRED SALES CHARGE FOR CERTAIN REDEMPTIONS OF CLASS A SHARES      
PURCHASED AT NET ASSET VALUE                                                    

    For purchases of $1,000,000 or more made on or after July 1, 1998, a
Limited CDSC will be imposed on certain redemptions of Class A Shares (or shares
into which such Class A Shares are exchanged) according to the following        
schedule: (1) 1.00% if shares are redeemed during the first year after the      
purchase; and (2) 0.50% if such shares are redeemed during the second year after
the purchase, if such purchases were made at net asset value and triggered the  
payment by the Distributor of the dealer's commission described above.          

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

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

    In determining whether a Limited CDSC is payable, it will be assumed
that shares not subject to the Limited CDSC are the first redeemed followed by  
other shares held for the longest period of time. The Limited CDSC will not be  
imposed upon shares representing reinvested dividends or capital gains          
distributions, or upon amounts representing share appreciation.                 

WAIVERS OF CONTINGENT DEFERRED SALES CHARGES                                    

WAIVER OF LIMITED CONTINGENT DEFERRED SALES CHARGE - CLASS A SHARES             

      The Limited CDSC for Class A Shares on which a dealer's commission has
been paid will be waived in the following instances: (i) redemptions that result
from each Fund's right to liquidate a shareholder's account if the aggregate net
asset value of the shares held in the account is less than the then-effective   
minimum account size; (ii) distributions to participants from a retirement plan 
qualified under section 401(a) or 401(k) of the Internal Revenue Code of 1986,  
as amended (the "Code"), or due to death of a participant in such a plan; (iii) 
redemptions pursuant to the direction of a participant or beneficiary of a      
retirement plan qualified under section 401(a) or 401(k) of the Code with       
respect to that retirement plan; (iv) periodic distributions from an IRA, SIMPLE
IRA, or 403(b)(7) or 457 Deferred Compensation Plan due to death, disability, or
attainment of age 59 1/2, and IRA distributions qualifying under Section 72(t)  
of the Internal Revenue Code; (v) returns of excess contributions to an IRA;    
(vi) distributions by other employee benefit plans to pay benefits; (vii)       
distributions described in (ii), (iv), and (vi) above pursuant to a systematic  
withdrawal plan; (viii) distributions form an account if the redemption results 
from a death of a registered owner, or a registered joint owner, of the account 
(in the case of accounts established under the Uniform Gifts to Minors or       
Uniform transfers to Minors Acts or trust accounts, the waiver applies upon the 
death of all beneficial owners) or a total disability (as defined in Section 72 
of the Code) of all registered owners occurring after the purchase of the shares
being redeemed; (ix) redemptions by the classes of shareholders who are         
permitted to purchase shares at net asset value, regardless of the size of the  
purchase (see Buying Class A Shares at Net Asset Value under Purchasing Shares);
and (x) redemptions by certain group defined contribution retirement plans that 
purchase shares through a retirement plan alliance program which requires that  
shares will be available at net asset value, provided that RFS either is the    
sponsor of the alliance program or has a product participation agreement with   
the sponsor of the alliance program that specifies that the Limited CDSC will be
waived.                                                                         

WAIVER OF CONTINGENT DEFERRED SALES CHARGE - CLASS B SHARES AND CLASS C SHARES  

The CDSC is waived on certain redemptions of Class B Shares in  
connection with the following redemptions: (i) redemptions that result from each
Fund's right to liquidate a shareholder's account if the aggregate net asset    
value of the shares held in the account is less than the then-effective minimum 
account size; (ii) returns of excess contributions to an IRA, SIMPLE IRA,       
SEP/IRA, or 403(b)(7) or 457 Deferred Compensation Plan; (iii) periodic         
distributions from an IRA, SIMPLE IRA, SAR/SEP, SEP/IRA, or 403(b)(7) or 457    
Deferred Compensation Plan due to death, disability or attainment of age 59 1/2,
and IRA distributions qualifying under Section 72(t) of the Internal Revenue    
Code; and (iv) distributions from an account if the redemption results from the 
death of a registered owner, or a registered joint owner, of the account (in the
case of accounts established under the Uniform Gifts to                         

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Minors or Uniform Transfers to Minors Acts or trust accounts, the waiver applies
upon the death of all beneficial owners) or a total and permanent disability (as
defined in Section 72 of the Code) of all registered owners occurring after the 
purchase of the shares being redeemed.                                          

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

       The CDSC on Class C Shares also is waived for any group retirement plan
(excluding defined benefit pension plans) (i) that purchases shares through a   
retirement plan alliance program, provided Retirement Financial Services, Inc.  
either is the sponsor of the alliance program or has a product participation    
agreement with the sponsor of the alliance program, and (ii) for which          
Retirement Financial Services, Inc. provides fully-bundled retirement plan      
services and maintains participant records on its proprietary recordkeeping     
system.                                                                         

 * * *

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

DIVIDENDS, DISTRIBUTIONS AND TAXES                                              

The following supplements the information in each Prospectus.   

   Each Class of shares of each Fund will share proportionately in the
investment income and expenses of that Fund, except that, absent any applicable 
fee waiver, Class A Shares, Class B Shares, and Class C Shares alone will incur 
distribution fees under their respective 12b-1 Plans.                           

        Dividends, if any, are declared each day the Delaware Diversified Income
Fund is open and paid monthly. Dividends and capital gains for Delaware U.S.    
Growth Fund may be paid annually. Net investment income earned on days when     
either Fund is not open will be declared as a dividend on the prior business    
day. Capital gains, if any, may be paid annually.                               

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    Each Fund intends to pay out substantially all of its net investment
income and net realized capital gains. Such payments, if any, will be made once 
a year during the first quarter of the following fiscal year. All dividends and 
any capital gains distributions will be automatically credited to the           
shareholder's account in additional shares of the same class of the Fund at net 
asset value unless the shareholder requests in writing that such dividends      
and/or distributions be paid in cash. Dividend payments of $1.00 or less will be
automatically reinvested, notwithstanding a shareholder's election to receive   
dividends in cash. If such a shareholder's dividends increase to greater than   
$1.00, the shareholder would have to file a new election in order to begin      
receiving dividends in cash again.                                              

        Any check in payment of dividends or other distributions which cannot be
delivered by the United States Post Office or which remains uncashed for a      
period of more than one year may be reinvested in the shareholder's account at  
the then-current net asset value and the dividend option may be changed from    
cash to reinvest. The Funds may deduct from a shareholder's account the costs of
that Fund's efforts to locate a shareholder if a shareholder's mail is returned 
by the United States Post Office or the Funds are otherwise unable to locate the
shareholder or verify the shareholder's mailing address. These costs may include
a percentage of the account when a search company charges a percentage fee in   
exchange for their location services.                                           

 Each Fund has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Internal Revenue Code of 
1986, as amended (the "Code"). As a regulated investment company, a Fund        
generally pays no Federal Income tax on the income and gains it distributes.    
Each Fund intends to meet the calendar year distribution requirements imposed by
the Code to avoid the imposition of a 4% excise tax.                            

        Dividends from net investment income (e.g., dividends and interests less
expenses incurred in the operation of a Fund) and net short-term capital gains  
distributions are treated by shareholders as ordinary income for federal income 
tax purposes. Distributions from net long-term capital gains, if any, are       
taxable to shareholders as long-term capital gain rates, regardless of the      
length of time an investor has held such shares, and these gains are currently  
taxed at long-term capital gain rates. The tax status of dividends and          
distributions paid to shareholders will not be affected by whether they are paid
in cash or in additional shares.                                                

 A Fund will inform its shareholders of the amount of their income
dividends and capital gain distributions, and will advise them of their tax     
status for federal income tax purposes shortly after the close of each calendar 
year. If you have not owned your Fund shares for a full year, each Fund may     
designate and distribute to you, as ordinary income or capital gains, a         
percentage of income that may not be equal to the actual amount of each type of 
income earned during the period of your investment in the Funds. Distributions  
declared in December but paid in January are taxable to you as if paid in       
December.                                                                       

     Redemptions and exchanges of Fund shares are taxable transactions for
federal and state income tax purposes. If you redeem your Fund shares, or       
exchange them for shares of a different Delaware Investments fund, the IRS      
requires you to report any gain or loss on your redemption or exchange. If you  
hold your shares as a capital asset, any gain or loss that you realize is a     
capital gain or loss and is long-term or short-term, generally depending on how 
long you have owned your shares.                                                

      Any loss incurred on the redemption or exchange of shares held for six
months or less is treated as long-term capital loss to the extent of any        
long-term capital gains distributed to you by the Funds on those shares.        

    All or any portion of any loss that you realize on the redemption of
your Fund shares is disallowed to the extent that you buy other shares in the   
Funds (through reinvestment of dividends or otherwise) within 30 days before or 
after your share redemption. Any loss disallowed under these rules is added to  
your tax basis in the new shares.                                               

        If you redeem some or all of your shares in the Funds, and then reinvest
the redemption proceeds in that Fund or in another Delaware Investments fund    
within 90 days of buying the original shares, the sales charge that would       
otherwise apply to your reinvestment may be reduced or eliminated. In reporting 
any gain or loss in your                                                        

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redemption, all or a portion of the sales charge that you paid on your original 
shares in the Funds are excluded from your tax basis in the shares sold and     
added to your tax basis for the new shares.                                     

     The trustees reserve the right not to maintain the qualification of a
Fund as a regulated investment company if it determines such course of action to
be beneficial to shareholders. In such case, the Fund would be subject to       
federal, and possibly state, corporate taxes on its taxable income and gains,   
and distributions to you would be taxed as ordinary income dividends to the     
extent of the Fund's earnings and profits.                                      

        In order to qualify as a regulated investment company for federal income
tax purposes, each Fund must meet certain specific requirements, including:     

     (i)     The Fund must maintain a diversified portfolio of securities,
wherein no security (other than U.S. government securities and securities of    
other regulated investment companies) can exceed 25% of the Fund's total assets,
and, with respect to 50% of the Fund's total assets, no investment (other than  
cash and cash items, U.S. government securities and securities of other         
regulated investment companies) can exceed 5% of the Fund's total assets or 10% 
of the outstanding voting securities of the issuer;                             

  (ii)    The Fund must derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, and gains from  
the sale or disposition of stocks, securities or foreign currencies, or other   
income derived with respect to its business of investing in such stock,         
securities, or currencies; and                                                  

        (iii)   The Fund must distribute to its shareholders at least 90% of its
investment company taxable income and net tax-exempt income for each of its     
fiscal years.                                                                   

        The Code requires Mutual Funds to distribute at least 98% of its taxable
ordinary income earned during the calendar year, 98% of its net capital gain    
earned during the 12 month period ending October 31, and 100% of any            
undistributed amounts in the prior year, by December 31 of each year in order to
avoid federal excise tax. However, the federal excise tax will not apply to a   
Fund in a given calendar year, if all of its shareholders at all times during   
the calendar year are segregated asset accounts of life insurance companies     
where the shares are held in connection with variable products. If for any year 
a Fund did not meet this exception, then the Fund intends to as a matter of     
policy declare and pay sufficient dividends in December or January (which are   
treated as received in December) but does not guarantee and can give no         
assurances that its distributions will be sufficient to eliminate all such      
taxes.                                                                          

      When a Fund holds an option or contract which substantially diminishes
the risk of loss with respect to another position of the Fund (as might occur in
some hedging transactions), this combination of positions could be treated as a 
"straddle" for tax purposes, possibly resulting in deferral of losses,          
adjustments in the holding periods and conversion of short-term capital losses  
into long-term capital losses.                                                  

     Under rules relating to "Constructive Sale Transactions", a Fund must
recognize gain (but not loss) on any constructive sale of an appreciated        
financial position in stock, a partnership interest or certain debt instruments.
A Fund generally be treated as making a constructive sale when it: 1) enters    
into a short sale on the same or substantially identical property; 2) enters    
into an offsetting notional principal contract; or 3) enters into a futures or  
forward contract to deliver the same or substantially identical property. Other 
transactions (including certain financial instruments called collars) will be   
treated as constructive sales as provided in Treasury regulations. There are    
also certain exceptions that apply for transactions that are closed before the  
end of the 30th day after the close of the taxable year.                        

     INVESTMENT IN FOREIGN CURRENCIES AND FOREIGN SECURITIES--Each Fund is
authorized to invest certain limited amounts in foreign securities. Such        
investments, if made, will have the following additional tax consequences to the
Funds:                                                                          

       Under the Code, gains or losses attributable to fluctuations in foreign
currency exchange rates which occur between the time a Fund accrues income      
(including dividends), or accrues expenses which are denominated in a           

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foreign currency, and the time the Fund actually collects such income or pays   
such expenses generally are treated as ordinary income or loss. Similarly, on   
the disposition of debt securities denominated in a foreign currency and on the 
disposition of certain options, futures, or forward contracts, gain or loss     
attributable to fluctuations in the value of foreign currency between the date  
of acquisition of the security or contract and the date of its disposition are  
also treated as ordinary gain or loss. These gains or losses, referred to under 
the Code as "Section 988" gains or losses, may increase or decrease the amount  
of each Fund's net investment company taxable income, which, in turn, will      
affect the amount of income to be distributed to you by each Fund.              

      If each Fund's Section 988 losses exceed it's other investment company
taxable income during a taxable year, the Fund generally will not be able to    
make ordinary dividend distributions to you for that year, or distributions made
before the losses were realized will be recharacterized as return of capital    
distributions for federal income tax purposes, rather than as an ordinary       
dividend or capital gain distribution. If a distribution is treated as a return 
of capital, your tax basis in your Fund shares will be reduced by a like amount 
(to the extent of such basis), and any excess of the distribution over your tax 
basis in your Fund shares will be treated as capital gain to you.               

    Each Fund may be subject to foreign withholding taxes on income from
certain foreign securities. This, in turn, could reduce that Fund's income      
dividends paid to you.                                                          

       Most foreign exchange gains realized on the sale of debt securities are
treated as ordinary income by each Fund. Similarly, foreign exchange losses     
realized on the sale of debt securities generally are treated as ordinary       
losses. These gains when distributed are taxable to you as ordinary income, and 
any losses reduce the Fund's ordinary income otherwise available for            
distribution to you. This treatment could increase or decrease the Fund's       
ordinary income distributions to you, and may cause some or all of the Fund's   
previously distributed income to be classified as a return of capital. A return 
of capital generally is not taxable to you, but reduces the tax basis of your   
shares in the Fund. Any return of capital in excess of your basis, however, is  
taxable as a capital gain.                                                      

      INVESTMENT IN PASSIVE FOREIGN INVESTMENT COMPANY SECURITIES--Each Fund
may invest in shares of foreign corporations which may be classified under the  
Code as passive foreign investment companies ("PFICs"). In general, a foreign   
corporation is classified as a PFIC if at least one-half of its assets          
constitute investment-type assets or 75% or more of its gross income is         
investment-type income. If a Fund receives an "excess distribution" with respect
to PFIC stock, that Fund may be subject to U.S. federal income tax on a portion 
of the distribution, whether or not the corresponding income is distributed by  
the Fund to you. In general, under the PFIC rules, an excess distribution is    
treated as having been realized ratably over the period during which the Funds  
held the PFIC shares. Each Fund will be subject to tax on the portion, if any,  
of an excess distribution that is so allocated to prior Fund taxable years, and 
an interest factor will be added to the tax, as if the tax had been payable in  
such prior taxable years. In this case, you would not be permitted to claim a   
credit on your own tax return for the tax paid by the Funds. Certain            
distributions from a PFIC as well as gain from the sale of PFIC shares are      
treated as excess distributions. Excess distributions are characterized as      
ordinary income even though, absent application of the PFIC rules, certain      
distributions might have been classified as capital gain. This may have the     
effect of increasing Fund distributions to you that are treated as ordinary     
dividends rather than long-term capital gain dividends.                         

 Each Fund may be eligible to elect alternative tax treatment with
respect to PFIC shares. Under an election that currently is available in some   
circumstances, the Fund generally would be required to include in its gross     
income its share of the earnings of a PFIC on a current basis, regardless of    
whether distributions are received from the PFIC during such period. If this    
election were made, the special rules, discussed above, relating to the taxation
of excess distributions, would not apply. In addition, under another election   
that involves marking-to-market a Fund's PFIC shares at the end of each taxable 
year (and on certain other dates as prescribed in the Code), unrealized gains   
would be treated as though they were realized. A Fund would also be allowed an  
ordinary deduction for the excess, if any, of the adjusted basis of it's        
investments in the PFIC stock over its fair market value at the end of the      
taxable year. This deduction would be limited to the amount of any net          
mark-to-market gains previously included with respect to that particular PFIC   
security. If a Fund were to make this second PFIC election, tax at the Fund     
level under the PFIC rules generally would be eliminated.                       

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     The application of the PFIC rules may affect, among other things, the
amount of tax payable by a Fund (if any), the amounts distributable to you by a 
Fund, the time at which these distributions must be made, and whether these     
distributions will be classified as ordinary income or capital gain             
distributions to you.                                                           

        You should be aware that it is not always possible at the time shares of
a foreign corporation are acquired to ascertain that the foreign corporation is 
a PFIC, and that there is always a possibility that a foreign corporation will  
become a PFIC after a Fund acquires shares in that corporation. While each Fund 
generally will seek to avoid investing in PFIC shares to avoid the tax          
consequences detailed above, there are no guarantees that it will do so and they
reserve the right to make such investments as a matter of their fundamental     
investment policy.                                                              

TAXATION OF SHAREHOLDERS                                                        

    Dividends of net investment income and distributions of net realized
short-term capital gains will be taxable to shareholders as ordinary income for 
federal income tax purposes, whether received in cash or reinvested in          
additional shares. Dividends received by corporate shareholders will qualify for
the dividends-received deduction only to the extent that each Fund designates   
the amount distributed as a dividend and the amount so designated does not      
exceed the aggregate amount of dividends received by the Fund from domestic     
corporations for the taxable year. The federal dividends-received deduction for 
corporate shareholders may be further reduced or disallowed if the shares with  
respect to which dividends are received are treated as debt-financed or are     
deemed to have been held for less than 46 days.                                 

     Foreign countries may impose withholding and other taxes on dividends
and interest paid to the Funds with respect to investments in foreign           
securities. However, certain foreign countries have entered into tax conventions
with the U.S. to reduce or eliminate such taxes.                                

        Distributions of long-term capital gains will be taxable to shareholders
as such, whether paid in cash or reinvested in additional shares and regardless 
of the length of time that the shareholder has held his or her interest in one  
of the Funds. If a shareholder receives a distribution taxable as long-term     
capital gain with respect to his or her investment in a Fund and redeems or     
exchanges the shares before he or she has held them for more than six months,   
any loss on the redemption or exchange that is less than or equal to the amount 
of the distribution will be treated as a long-term capital loss.                

    Investors considering buying shares of a Fund just prior to a record
date for a taxable dividend or capital gain distribution should be aware that,  
regardless of whether the price of the Fund shares to be purchased reflects the 
amount of the forthcoming dividend or distribution payment, any such payment    
will be a taxable dividend or distribution payment. This is of particular       
concern for investors in the Equity Funds since these Funds may make            
distributions on an annual basis.                                               

        Each Fund will be required in certain cases to withhold and remit to the
United States Treasury 31% of taxable dividends or of gross proceeds from       
redemptions paid to any shareholder who has provided either an incorrect tax    
identification number or no number at all, or who is subject to withholding by  
the Internal Revenue Service for failure to properly include on his tax return  
payments of interest or dividends. This withholding, known as backup            
withholding, is not an additional tax, and any amounts withheld may be credited 
against the shareholder's ultimate U.S. tax liability.                          

  Certain investments and hedging activities of the Funds, including
transactions in options, futures contracts, hedging transactions, forward       
contracts, straddles, foreign currencies, and foreign securities will be subject
to special tax rules. See Option Transactions, Straddles and Wash Sales, below. 
In a given case, these rules may accelerate income to a Fund, defer losses to a 
Fund, cause adjustments in the holding periods of a Fund's securities, convert  
short-term capital losses into long-term capital losses, or otherwise affect the
character of a Fund's income. These rules could therefore affect the amount,    
timing and character of distributions to shareholders. Each Fund will endeavor  
to make any available elections pertaining to such transactions in a manner     
believed to be in the best interest of a Fund.                                  

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      Certain securities purchased by the Funds (such as STRIPS, CUBES, TRs,
TIGRs and CATS), are sold at original issue discount and do not make periodic   
cash interest payments. A Fund will be required to include as part of its       
current income the imputed interest on such obligations even though a Fund has  
not received any interest payments on such obligations during that period.      
Because a Fund distributes all of its net investment income to its shareholders 
(including such imputed interest), a Fund may have to sell securities in order  
to generate the cash necessary for the required distributions. Such sales may   
occur at a time when the Manager or sub-advisor would not have chosen to sell   
such securities and which may result in a taxable gain or loss.                 

    The foregoing is only a summary of some of the important federal tax
considerations generally affecting purchasers of shares of Delaware Diversified 
Income Fund and Delaware U.S. Growth Fund. No attempt is made to present a      
detailed explanation of the federal income tax treatment of either Fund or their
shareholders, and this discussion is not intended as a substitute for careful   
tax planning. Accordingly, prospective purchasers of shares of either Fund are  
urged to consult their tax advisors with specific reference to their own tax    
situation, including the potential application of state and local taxes.        

JOBS AND GROWTH TAX RELIEF RECONCILIATION ACT OF 2003 (JGTRRA)                  

       On May 28, 2003, President Bush signed into law the Jobs and Growth Tax
Relief Reconciliation Act of 2003 (JGTRRA) .The new law reduces the tax rate on 
dividends and capital gains to 15% (5% for taxpayers with income in the lower   
brackets; 0% for those taxpayers in 2008).                                      

REDUCTION OF TAX RATE ON DIVIDENDS                                              

        Qualifying dividends received by the funds after December 31, 2002, will
be taxed at a rate of 15% (5% for taxpayers with income in the lower brackets;  
0% for these taxpayers in 2008). Prior law will apply for tax years beginning   
after December 31, 2008. Dividends paid on foreign corporation stocks that are  
readily tradable on U.S. securities markets are eligible for the lower rates.   

        The amount of ordinary dividends qualifying for the lower tax rates that
may be paid by a RIC for any tax year may not exceed the amount of the aggregate
qualifying dividends received by the RIC, unless that aggregate is at least 95% 
of the RIC gross income (as specially computed), in which case the entire       
dividend qualifies. Obviously, money market and bond mutual fund distributions  
will generally not qualify.                                                     

      The lower tax rates are not available for dividends to the extent that
the taxpayer is obligated to make related payments with respect to positions in 
substantially similar or related property (e.g., payments in lieu of dividends  
under a short sale). The capital gain rates also do not apply to (1) dividends  
received from an organization that was exempt from tax under Section 501 or was 
a tax-exempt farmers' cooperative in either the tax year of the distribution or 
the preceding tax year; (2) dividends received from a mutual savings bank that  
received a deduction under Section 591; or (3) deductible dividends paid on     
employer securities (i.e., under Section 404(k)).                               

     Owners whose shares are lent in short sales would not qualify for the
lower rate. The lower tax rates would not apply under the law as enacted to     
"payments in lieu of dividends," which are received by someone whose stock is   
loaned to a short-seller. Brokerages have commonly lent stock out of margin     
accounts to short sellers, but may need to accommodate investors who do not want
to receive unfavorable dividend treatment because their stock was lent out.     
Depending on the details of regulations that may be issued later this year,     
brokerages may decide to limit any such loans after 2003 to securities that are 
held in accounts owned by tax-indifferent parties, such as pension funds. The   
legislative history indicates that the Service is to be liberal in waiving      
penalties for failure to report substitute payments properly for payors who are 
making good-faith efforts to comply, but cannot reasonably do so given the time 
needed to update their systems.                                                 

REDUCTION OF TAX RATE ON CAPITAL GAINS                                          

   Under JGTRRA, the top individual rate on adjusted net capital gain,
which was generally 20% (10% for taxpayers in the 10% and 15% brackets), is     
reduced to 15% (5% for taxpayers with income in the lower brackets). These lower
rates apply to both the regular tax and the alternative minimum tax. The lower  
rates apply to assets held more than one year. For taxpayers with income in the 
lower brackets, the 5% rate is reduced to 0% for 2008.                          

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    The tax rate on short-term capital gains is unchanged, and they will
continue to be taxed at the ordinary income rate. The capital gains changes     
apply to sales and exchanges (and installment payments received) on or after May
6, 2003, but not with respect to tax years beginning after December 31, 2008.   

       The special tax rates for gains on assets held for more than five years
(8% for taxpayers with income in the 10% and 15% brackets; 18% for other        
taxpayers with respect to assets purchased after 2000) have been repealed.      

BACK-UP WITHHOLDING CHANGES                                                     

Prior to the passage of JGTRRA the backup withholding rate for  
shareholders that did not provide taxpayer identification numbers was 30%. This 
rate has been reduced to 28%, retroactive to January 1, 2003.                   

INVESTMENT MANAGEMENT AGREEMENT                                                 

     Delaware Management Company ("Delaware" or "the Manager"), located at
2005 Market Street, Philadelphia, PA 19103-7094, furnishes investment management
services to each Fund, subject to the supervision and direction of the Board of 
Trustees of Delaware Group Adviser Funds.                                       

        The Fund has formally delegated to the Manager the ability to make all
proxy voting decisions in relation to portfolio securities held by the Fund. If 
and when proxies need to be voted on behalf of the Fund, the Manager will vote  
such proxies pursuant to its Proxy Voting Policies and Procedures (the          
"Procedures"). The Manager has established a Proxy Voting Committee (the        
"Committee") which is responsible for overseeing the Manager's proxy voting     
process for the Fund. One of the main responsibilities of the Committee is to   
review and approve the Procedures to ensure that the Procedures are designed to 
allow the Manager to vote proxies in a manner consistent with the goal of voting
in the best interests of the Fund.                                              

        In order to facilitate the actual process of voting proxies, the Manager
has contracted with Institutional Shareholder Services ("ISS") to analyze proxy 
statements on behalf of the Fund and other Advisor clients and vote proxies     
generally in accordance with the Procedures. The Committee is responsible for   
overseeing ISS's proxy voting activities. If a proxy has been voted for the     
Fund, ISS will create a record of the vote. Beginning no later than August 31,  
2004, information (if any) regarding how the Fund voted proxies relating to     
portfolio securities during the most recent 12-month period ended June 30 is    
available without charge (i) through the Fund's website at                      
http://www.delawareinvestments.com; and (ii) on the Commission's website at     
http://www.sec.gov.                                                             

  The Procedures contain a general guideline that recommendations of
company management on an issue (particularly routine issues) should be given a  
fair amount of weight in determining how proxy issues should be voted. However, 
the Manager will normally vote against management's position when it runs       
counter to its specific Proxy Voting Guidelines (the "Guidelines"), and the     
Manager will also vote against management's recommendation when it believes that
such position is not in the best interests of the Fund.                         

       As stated above, the Procedures also list specific Guidelines on how to
vote proxies on behalf of the Fund. Some examples of the Guidelines are as      
follows: (i) generally vote for shareholder proposals asking that a majority or 
more of directors be independent; (ii) generally vote against proposals to      
require a supermajority shareholder vote; (iii) votes on mergers and            
acquisitions should be considered on a case-by-case basis, determining whether  
the transaction enhances shareholder value; (iv) generally vote against         
proposals to create a new class of common stock with superior voting rights; (v)
generally vote re-incorporation proposals on a case-by-case basis; (vi) votes   
with respect to management compensation plans are determined on a case-by-case  
basis; and (vii) generally vote for reports on the level of greenhouse gas      
emissions from the company's operations and products.                           

       Because the Fund has delegated proxy voting to the Manager, the Fund is
not expected to encounter any conflict of interest issues regarding proxy voting
and therefore does not have procedures regarding                                

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this matter. However, the Manager does have a section in its Procedures that    
addresses the possibility of conflicts of interest. Most proxies which the      
Manager receives on behalf of the Fund are voted by ISS in accordance with the  
Procedures. Because almost all Fund proxies are voted by ISS pursuant to the    
pre-determined Procedures, it normally will not be necessary for the Manager to 
make an actual determination of how to vote a particular proxy, thereby largely 
eliminating conflicts of interest for the Manager during the proxy voting       
process. In the very limited instances where the Manager is considering voting a
proxy contrary to ISS's recommendation, the Committee will first assess the     
issue to see if there is any possible conflict of interest involving the Manager
or affiliated persons of the Manager. If a member of the Committee has actual   
knowledge of a conflict of interest, the Committee will normally use another    
independent third party to do additional research on the particular proxy issue 
in order to make a recommendation to the Committee on how to vote the proxy in  
the best interests of the Fund. The Committee will then review the proxy voting 
materials and recommendation provided by ISS and the independent third party to 
determine how to vote the issue in a manner which the Committee believes is     
consistent with the Procedures and in the best interests of the Fund.           

    On December 31, 2004, the Manager and its affiliates within Delaware
Investments were managing in the aggregate in excess of $100.0 billion in assets
in various institutional or separately managed, investment company and insurance
accounts.                                                                       

    The Investment Management Agreement for Delaware U.S. Growth Fund is
dated November 23, 1999 and was approved by the initial shareholder of Delaware 
U.S. Growth Fund on that date. The Investment Management Agreement for Delaware 
Diversified Income Fund is dated June 28, 2002 and was approved by its initial  
shareholder on June 28, 2002. Each Agreement has an initial term of two years   
and may be further renewed only so long as such renewals and continuance are    
specifically approved at least annually by the Board of Trustees or by vote of a
majority of the outstanding voting securities of each Fund, and only if the     
terms and renewal thereof have been approved by the vote of a majority of the   
trustees of Delaware Group Adviser Funds who are not parties thereto or         
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval. Each Agreement is terminable without penalty
on 60 days' notice by the trustees of Delaware Group Adviser Funds or by the    
Manager. Each Agreement will terminate automatically in the event of its        
assignment.                                                                     

The management fee rate schedule for each Fund is as follows:   

                                                                [Download Table]

                                               MANAGEMENT FEE SCHEDULE          
                                   (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
FUND NAME                                           ANNUAL RATE                 
--------------------------------   ---------------------------------------------
                                                                                
Delaware Diversified Income Fund   0.55% on first $500 million                  
                                   0.50% on next $500 million                   
                                   0.45% on next $1,500 million                 
                                   0.425% on assets in excess of $2,500 million 

Delaware U.S. Growth Fund          0.65% on first $500 million                  
                                   0.60% on next $500 million                   
                                   0.55% on next $1,500 million                 
                                   0.50% on assets in excess of $2,500 million  

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     On October 31, 2004, the Delaware U.S. Growth Fund's total net assets
were $80,322,333. On October 31, 2004, the Delaware Diversified Income Fund's   
total net assets were $459,029,674. The total investment management fees        
incurred by the Funds during the last three fiscal years are set forth in the   
table below. Beginning May 6, 1996, the fees were paid to the Manager, Delaware 
Management Company. With respect to Delaware Diversified Income Fund, for       
periods prior to October 28, 2002, the table reflects information on the        
investment management fees paid by the Predecessor Fund. See "Performance       
Information".                                                                   

                                                        [Enlarge/Download Table]


FUND                              OCTOBER 31, 2004   OCTOBER 31, 2003   OCTOBER 31, 2002 
--------------------------------  -----------------  -----------------  -----------------
                                                                                         
Delaware Diversified Income Fund  $1,652,880 earned  $312,717 earned    $37,901 earned   
                                  $1,249,781 paid    $2,487 paid        $12,599 paid     
                                  $403,099 waived    $315,204 waived    $25,302 waived   

Delaware U.S. Growth Fund         $689,437 earned    $878,695 earned    $1,414,744 earned
                                  $-0- paid          $-0- paid          $578,273 paid    
                                  $689,437 waived    $878,695 waived    $836,471 waived  

     Each Fund pays all of its other expenses, including its proportionate
share of rent and certain other administrative expenses.                        

DISTRIBUTION AND SERVICE                                                        

 Lincoln Financial Distributors, Inc. ("LFD"), an affiliate of the
Manager, serves as the Funds' financial intermediary wholesaler pursuant to a   
Second Amended and Restated Financial Intermediary Distribution Agreement with  
the Distributor dated August 21, 2003. LFD is primarily responsible for         
promoting the sale of the Fund shares through broker/dealers, financial advisors
and other financial intermediaries (collectively, "Financial Intermediaries").  
The address of LFD is 2001 Market Street, Philadelphia, PA 19103-7055. The rate 
of compensation, which is calculated and paid monthly, to LFD for the sales of  
shares of the retail funds of Delaware Investments Family of Funds (excluding   
the shares of Delaware VIP Trust series, money market funds and house accounts  
and shares redeemed within 30 days of purchase) is a non-recurring fee equal to 
the amount shown below:                                                         

                                                        [Enlarge/Download Table]

                                                                            Basis Points on Sales
                                                                            ---------------------
                                                                                                 
Retail Mutual Funds (Class A, B and C Shares)                                       0.50%        
Merrill Lynch Connect Program                                                       0.25%        
Registered Investment Advisors and                                                               
 H.D. Vest Institutional Classes                                                    0.45%        
Citigroup Global Capital Markets, Inc. (formerly Salomon Smith Barney) and                       
 Delaware International Value Equity Fund Class I Shares                               0%        

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     In addition to the non-recurring fee set forth above, the Distributor
pays LFD a fee at the annual rate set forth below of the average daily net      
assets of Fund shares of the Delaware Investments retail funds outstanding and  
beneficially owned by shareholders through Financial Intermediaries, including  
those Fund shares sold before the date of this Agreement.                       

                                                        [Enlarge/Download Table]

                                                                                    Basis Points on Sales
                                                                                    ---------------------
                                                                                                         
Retail Mutual Funds (including shares of money market funds and house accounts and                       
 shares redeemed within 30 days of purchase)                                                0.04%        
Merrill Lynch Connect Program                                                                  0%        
Registered Investment Advisors and                                                                       
 H.D. Vest Institutional Classes                                                            0.04%        
Citigroup Global Capital Markets, Inc. (formerly Salomon Smith Barney) and                               
 Delaware International Value Equity Fund Class I Shares                                    0.04%        

The fees associated with LFD's services to the Funds are borne  
exclusively by the Distributor and not by the Funds.                            

        The Transfer Agent, Delaware Service Company, Inc., another affiliate of
the Manager located at 2005 Market Street, Philadelphia, PA 19103-7094, serves  
as the shareholder servicing, dividend disbursing and transfer agent for each   
Fund pursuant to a Shareholder Services Agreement dated April 19, 2001. The     
Transfer Agent also provides accounting services to each Fund pursuant to the   
terms of a separate Fund Accounting Agreement. The Transfer Agent is also an    
indirect, wholly owned subsidiary of Delaware Management Holdings, Inc. and,    
therefore, Lincoln National Corporation.                                        

    Each Fund has authorized one or more brokers to accept on its behalf
purchase and redemption orders in addition to the Transfer Agent. Such brokers  
are authorized to designate other intermediaries to accept purchase and         
redemption orders on the behalf of each Fund. For purposes of pricing, each Fund
will be deemed to have received a purchase or redemption order when an          
authorized broker or, if applicable, a broker's authorized designee, accepts the
order.                                                                          

OFFICERS AND TRUSTEES                                                           

    The business and affairs of Delaware Group Adviser Funds are managed
under the direction of its Board of Trustees.                                   

  Certain officers and trustees of Delaware Group Adviser Funds hold
identical positions in each of the other funds in Delaware Investments. As of   
November 30, 2004, Delaware Group Adviser Funds' officers and trustees owned    
3.77% of the outstanding shares of Delaware U.S. Growth Fund Institutional      
Class. As of November 30, 2004, Delaware Group Adviser Funds' officers and      
trustees owned less than 1% of the outstanding shares of Class A, Class B, Class
C and Class R of the Delaware U.S. Growth Fund. As of November 30, 2004,        
Delaware Group Adviser Funds' officers and trustees owned less than 1% of the   
outstanding shares of each Class of the Delaware Diversified Income Fund.       

      As of January 31, 2005 management believes the following accounts held
5% or more of the outstanding shares of the Funds:                              

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                                                        [Enlarge/Download Table]

CLASS                        NAME AND ADDRESS OF ACCOUNT                SHARE AMOUNT   PERCENTAGE 
---------------------------  -----------------------------------------  -------------  ---------- 
                                                                                                  
Delaware Diversified Income  Merrill Lynch, Pierce, Fenner & Smith For    552,636.810       10.49%
Fund Class B                 the Sole Benefit of its Customers                                    
                             Attn: Fund Administration                                            
                             4800 Deer Lake Drive, 2nd Floor                                      
                             Jacksonville, FL 32246-6484                                          

Delaware Diversified Income  Merrill Lynch, Pierce, Fenner & Smith For  4,065,658.430       26.14%
Fund Class C                 the Sole Benefit of its Customers                                    
                             Attn: Fund Administration                                            
                             4800 Deer Lake Drive, 2nd Floor                                      
                             Jacksonville, FL 32246-6484                                          

Delaware Diversified Income  Merrill Lynch, Pierce, Fenner & Smith For    814,580.510       66.54%
Fund Class R                 the Sole Benefit of its Customers                                    
                             Attn: Fund Administration                                            
                             4800 Deer Lake Drive, 2nd Floor                                      
                             Jacksonville, FL 32246-6484                                          

                             Reliance Trust Co.                            64,280.510        5.25%
                             FBO Trace A Matic Corporation 401(k)                                 
                             P.O. Box 48529                                                       
                             Atlanta, GA 30362-1529                                               

Delaware Diversified Income  RS DMC Employee MPP Plan                     137,209.440       45.28%
Fund Institutional Class     Delaware Management Co. MPP Trust                                    
                             c/o Rick Seidel                                                      
                             1818 Market Street                                                   
                             Philadelphia, PA 19103-3638                                          

Delaware U.S. Growth Fund    Merrill Lynch, Pierce, Fenner & Smith For    122,771.350       16.12%
Class C                      the Sole Benefit of its Customers                                    
                             Attn: Fund Administration                                            
                             4800 Deer Lake Drive, 2nd Floor                                      
                             Jacksonville, FL 32246-6484                                          

Delaware U.S. Growth Fund    Merrill Lynch, Pierce, Fenner & Smith For     21,512.870       89.03%
Class R                      the Sole Benefit of its Customers                                    
                             Attn: Fund Administration                                            
                             4800 Deer Lake Drive, 2nd Floor                                      
                             Jacksonville, FL 32246-6484                                          

                             MCB Trust Services Custodian FBO               2,057.310        8.51%
                             DIW Group Inc.                                                       
                             700 17th Street, Suite 300                                           
                             Denver, CO 80202-3531                                                

Delaware U.S. Growth Fund    RS DMC Employee MPP Plan                     110,584.290       51.43%
Institutional Class          Delaware Management Co.                                              
                             Employee Money Purchase Pension                                      
                             c/o Rick Seidel                                                      
                             1818 Market Street                                                   
                             Philadelphia, PA 19103-3638                                          

                             MCB Trust Services Trustee FBO                77,969.900       36.26%
                             Scott Specialty Gases 401(k)                                         
                             700 17th Street, Suite 300                                           
                             Denver, CO 80202-3531                                                

                             MCB Trust Services Trustee FBO                12,805.880        5.95%
                             Clayton Foundation for Research 401(k)                               
                             700 17th Street, Suite 300                                           
                             Denver, CO 80202-3531                                                

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            DMH Corp., Delaware Investments U.S., Inc., Delaware General
Management, Inc. Delaware Management Company, Inc., Delaware Service Company,   
Inc., Delaware Distributors, Inc., Delaware Management Trust Company, Delaware  
Management Business Trust, Delaware Investment Advisers (a series of Delaware   
Management Business Trust), Delaware Management Company (a series of Delaware   
Management Business Trust), Delaware Lincoln Investment Advisers (a series of   
Delaware Management Business Trust), Delaware Capital Management (a series of   
Delaware Management Business Trust), Delaware Lincoln Cash Management (a series 
of Delaware Management Business Trust), Delaware Distributors, L.P., Retirement 
Financial Services, Inc. and LNC Administrative Services, Inc. are direct or    
indirect, wholly owned subsidiaries of Delaware Management Holdings, Inc.       
("DMH"). DMH is an indirect, wholly owned subsidiary, and is subject to the     
ultimate control, of Lincoln National Corporation. Lincoln National Corporation,
with headquarters in Philadelphia, Pennsylvania, is a diversified organization  
with operations in many aspects of the financial services industry, including   
insurance and investment management. Delaware Investments is the marketing name 
for DMH and its subsidiaries.                                                   

               Trustees and principal officers of Delaware Group Adviser Funds
are noted below along with their ages and their business experience for the past
five years.                                                                     

                                                        [Enlarge/Download Table]

                                                                                             NUMBER OF                              
                                                                                        PORTFOLIOS IN FUND                          
                        POSITION(S)                                                      COMPLEX OVERSEEN      OTHER DIRECTORSHIPS  
NAME, ADDRESS AND        HELD WITH    LENGTH OF TIME    PRINCIPAL OCCUPATION(S) DURING  BY TRUSTEE/DIRECTOR      HELD BY TRUSTEE/   
BIRTHDATE                 FUND(S)         SERVED                 PAST 5 YEARS                OR OFFICER        DIRECTOR OR OFFICER  
----------------------  -----------  -----------------  ------------------------------  -------------------  -----------------------
                                                                                                                                    
INTERESTED TRUSTEES                                                                                                                 

JUDE T. DRISCOLL(2)      Chairman,       5 Years -            Since August 2000,                77                    None          
2005 Market Street      President,   Executive Officer    Mr. Driscoll has served in                                                
Philadelphia, PA 19103     Chief                         various executive capacities                                               
                         Executive     Trustee since    at different times at Delaware                                              
March 10, 1963          Officer and    May 15, 2003             Investments(1)                                                      
                         Trustee(4)                                                                                                 
                                                           Senior Vice President and                                                
                                                           Director of Fixed-Income                                                 
                                                           Process - Conseco Capital                                                
                                                                  Management                                                        
                                                           (June 1998 - August 2000)                                                

INDEPENDENT TRUSTEES                                                                                                                

WALTER P. BABICH          Trustee        17 Years              Board Chairman -                 94                    None          
2005 Market Street                                           Citadel Construction                                                   
Philadelphia, PA 19103                                            Corporation                                                       
                                                               (1989 - Present)                                                     
October 1, 1927                                                                                                                     

JOHN H. DURHAM            Trustee       26 Years(3)            Private Investor                 94                  Trustee -       
2005 Market Street                                                                                              Abington Memorial   
Philadelphia, PA 19103                                                                                              Hospital        

August 7, 1937                                                                                                President/Director -  
                                                                                                                22 WR Corporation   

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JOHN A. FRY             Trustee(4)   4 Year       President - Franklin &      77        Director -       
2005 Market Street                                   Marshall College                Community Health    
Philadelphia, PA 19103                             (June 2002 - Present)                  Systems        

May 28, 1960                                    Executive Vice President -                               
                                                University of Pennsylvania                               
                                                 (April 1995 - June 2002)                                

ANTHONY D. KNERR          Trustee   12 Years    Founder/Managing Director -   94           None          
2005 Market Street                              Anthony Knerr & Associates                               
Philadelphia, PA 19103                            (Strategic Consulting)                                 
                                                     (1990 - Present)                                    
December 7, 1938                                                                                         

ANN R. LEVEN              Trustee   16 Years  Treasurer/Chief Fiscal Officer  94    Director and Audit   
2005 Market Street                               - National Gallery of Art        Committee Chairperson -
Philadelphia, PA 19103                                 (1994 - 1999)              Andy Warhol Foundation 

November 1, 1940                                                                         Director -      
                                                                                       Systemax Inc.     

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                                                                                             NUMBER OF                              
                                                                                        PORTFOLIOS IN FUND                          
                          POSITION(S)                                                    COMPLEX OVERSEEN      OTHER DIRECTORSHIPS  
NAME, ADDRESS AND         HELD WITH     LENGTH OF TIME  PRINCIPAL OCCUPATION(S) DURING   BY TRUSTEE/DIRECTOR      HELD BY TRUSTEE/  
BIRTHDATE                  FUND(S)           SERVED               PAST 5 YEARS                OR OFFICER        DIRECTOR OR OFFICER 
----------------------  --------------  --------------  ------------------------------  -------------------  -----------------------
                                                                                                                                    
INDEPENDENT TRUSTEES                                                                                                                
(continued)                                                                                                                         

THOMAS F. MADISON           Trustee        11 Years        President/Chief Executive              94                 Director -     
2005 Market Street                                       Officer - MLM Partners, Inc.                              Banner Health    
Philadelphia, PA 19103                                    (Small Business Investing &                                               
                                                                  Consulting)                                        Director -     
February 25, 1936                                          (January 1993 - Present)                             Center Point Energy 

                                                                                                                     Director -     
                                                                                                                 Digital River Inc. 

                                                                                                                     Director -     
                                                                                                                 Rimage Corporation 

                                                                                                                     Director -     
                                                                                                                Valmont Industries, 
                                                                                                                        Inc.        

JANET L. YEOMANS            Trustee         6 Years        Vice President/Mergers &               94                    None        
2005 Market Street                                              Acquisitions -                                                      
Philadelphia, PA 19103                                          3M Corporation                                                      
                                                           (January 2003 - Present)                                                 
July 31, 1948                                                                                                                       
                                                         Ms. Yeomans has held various                                               
                                                          management positions at 3M                                                
                                                            Corporation since 1983.                                                 

OFFICERS                                                                                                                            

MICHAEL P. BISHOF        Senior Vice    Chief Financial      Mr. Bishof has served in             92                    None(5)     
2005 Market Street      President and    Officer since     various executive capacities                                             
Philadelphia, PA 19103      Chief      February 17, 2005  at different times at Delaware                                            
                          Financial                                 Investments                                                     
                           Officer                                                                                                  

August 18, 1962                                                                                                                     

RICHELLE S. MAESTRO    Executive Vice       2 Years          Ms. Maestro has served in            92                    None(5)     
2005 Market Street       President,                        various executive capacities                                             
Philadelphia, PA 19103   Chief Legal                      at different times at Delaware                                            
                         Officer and                               Investments.                                                     
                          Secretary                                                                                                 

November 26, 1957                                                                                                                   

JOHN J. O'CONNOR         Senior Vice    Treasurer since     Mr. O'Connor has served in            92                    None(5)     
2005 Market Street      President and  February 17, 2005   various executive capacities                                             
Philadelphia, PA 19103    Treasurer                       at different times at Delaware                                            
                                                                    Investments                                                     

June 16, 1957                                                                                                                       


(1) Delaware Investments is the marketing name for Delaware Management Holdings,
 Inc. and its subsidiaries, including the registrant's investment advisor,
principal underwriter and its transfer agent.                           

(2) Mr. Driscoll is considered to be an "Interested Trustee" because he is an   
executive officer of the Fund's manager and distributor.                

(3) Mr. Durham served as a Director Emeritus from 1995 through 1998.            

(4) Mr. Driscoll and Mr. Fry are not Trustees of the funds of Voyageur Insured  
Funds, Voyageur Intermediate Tax Free Funds, Voyageur Investment Trust, 
  Voyageur Mutual Funds, Voyageur Mutual Funds II, Voyageur Mutual Funds III
and Voyageur Tax Free Funds.                                            

(5) Mr. Bishof, Ms. Maestro and Mr. O'Connor also serve in similar capacities   
for the six portfolios of the Optimum Fund Trust, which have the same   
investment advisor, principal underwriter and transfer agent as the     
registrant.                                                             

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      Following is additional information regarding investment professionals
affiliated with the Funds.                                                      

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NAME, ADDRESS                  POSITION(S) HELD WITH     LENGTH OF               PRINCIPAL OCCUPATION(S)            
AND BIRTHDATE                       POOLED TRUST        TIME SERVED                DURING PAST 5 YEARS              
---------------------------  -------------------------  -----------  -----------------------------------------------
                                                                                                                    
MARSHALL T. BASSETT          Senior Vice President and    7 Years    Mr. Bassett has served in various capacities at
2005 Market Street               Portfolio Manager                       different times at Delaware Investments    
Philadelphia, PA 19103                                                                                              

February 8, 1954                                                                                                    

RYAN K. BRIST                 Executive Vice President    5 Years     Mr. Brist has served in various capacities at 
2005 Market Street            and Managing Director -                    different times at Delaware Investments    
Philadelphia, PA 19103-7094         Fixed-Income                                                                    

March 22, 1971                                                                                                      

STEPHEN R. CIANCI            Vice President and Senior    11 Years    Mr. Cianci has served in various capacities at
2005 Market Street               Portfolio Manager                       different times at Delaware Investments    
Philadelphia, PA 19103                                                                                              

May 12, 1969                                                                                                        

GERALD S. FREY                 Managing Director and      8 Years      Mr. Frey has served in various capacities at 
2005 Market Street            Chief Investment Officer                   different times at Delaware Investments    
Philadelphia, PA 19103           - Growth Investing                                                                 

February 7, 1946                                                                                                    

PAUL GRILLO                  Vice President and Senior    11 Years    Mr. Grillo has served in various capacities at
2005 Market Street               Portfolio Manager                       different times at Delaware Investments    
Philadelphia, PA 19103                                                                                              

May 16, 1959                                                                                                        

JEFFREY W. HYNOSKI               Vice President and       5 Years    Mr. Hynoski has served in various capacities at
2005 Market Street                Portfolio Manage                       different times at Delaware Investments    
Philadelphia, PA 19103                                                                                              

September 19, 1962                                                                                                  

STEVEN T. LAMPE                  Vice President and       10 Years    Mr. Lampe has served in various capacities at 
2005 Market Street               Portfolio Manager                       different times at Delaware Investments    
Philadelphia, PA 19103                                                                                              

September 13, 1968                                                                                                  

PHILIP R. PERKINS            Senior Vice President and    2 years       Senior Vice President and Senior Portfolio  
2005 Market Street            Senior Portfolio Manager                  Manager - Delaware Investment Advisers, a   
Philadelphia, PA 19103-7094                                            series of Delaware Management Business Trust 
                                                                                     (2003 - Present)               
May 20, 1961                                                                                                        
                                                                      Chief Operating Officer and Managing Director 
                                                                       in Emerging Markets of Deutsche Bank (1998 - 
                                                                                          2003)                     

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NAME, ADDRESS                  POSITION(S) HELD WITH     LENGTH OF               PRINCIPAL OCCUPATION(S)            
AND BIRTHDATE                       POOLED TRUST        TIME SERVED                DURING PAST 5 YEARS              
---------------------------  -------------------------  -----------  -----------------------------------------------
                                                                                                                    
TIMOTHY L. RABE               Senior Vice President -     4 Years      Mr. Rabe has served in various capacities at 
2005 Market Street            Senior High Yield Trader                   different times at Delaware Investments    
Philadelphia, PA 19103-7094                                                                                         

September 18, 1970                                                                                                  

MATTHEW TODOROW                  Vice President and       2 Years    Vice President and Portfolio Manager - Delaware
2005 Market Street               Portfolio Manager                      Investment Advisers, a series of Delaware   
Philadelphia, PA 19103                                                          Management Business Trust           
                                                                                     (2003 - Present)               
November 22, 1968                                                                                                   
                                                                      Executive Director - Morgan Stanley Investment
                                                                                        Management                  
                                                                                       (2001- 2003)                 

                                                                      Portfolio Manager - Morgan Stanley Investment 
                                                                                        Management                  
                                                                                      (1994 - 2003)                 

LORI P. WACHS                    Vice President and       11 Years    Ms. Wachs has served in various capacities at 
2005 Market Street               Portfolio Manager                             different times at Delaware          
Philadelphia, PA 19103                                                                                              

November 8, 1968                                                                                                    

   The following table shows each Trustee's ownership of shares of the
Funds and of all Delaware Investments funds as of December 31, 2003.            

                                                        [Enlarge/Download Table]

                                                             AGGREGATE DOLLAR RANGE OF EQUITY   
                                                         SECURITIES IN ALL REGISTERED INVESTMENT
                   DOLLAR RANGE OF EQUITY SECURITIES IN  COMPANIES OVERSEEN BY TRUSTEE IN FAMILY
NAME                            THE FUNDS                        OF INVESTMENT COMPANIES        
-----------------  ------------------------------------  ---------------------------------------
                                                                                                
Jude T. Driscoll                   None                             $50,001 - $100,000          
Walter A. Babich            $10,001 - $50,000                         Over $100,000             
John H. Durham              $50,000 - $100,000                        Over $100,000             
John A. Fry                        None                               Over $100,000             
Anthony D. Knerr                   None                             $10,001 - $50,000           
Ann R. Leven                       None                               Over $100,000             
Thomas F. Madison                  None                             $10,001 - $50,000           
Janet L. Yeomans                   None                             $10,001 - $50,000           

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       The following is a compensation table listing for each trustee entitled
to receive compensation, the aggregate compensation received from Adviser Funds 
and the total compensation received from all investment companies in the        
Delaware Investments family for which he or she serves as a trustee or director 
for the fiscal year ended October 31, 2004 and an estimate of annual benefits to
be received upon retirement under the Delaware Group Retirement Plan for        
Directors/Trustees as of October 31, 2004. Only the independent trustees of     
Adviser Funds receive compensation from the Funds.                              

                                                        [Enlarge/Download Table]

                                   AGGREGATE          PENSION OR                           TOTAL COMPENSATION FROM
                              COMPENSATION FROM   RETIREMENT BENEFITS   ESTIMATED ANNUAL        THE INVESTMENT    
                                DELAWARE GROUP    ACCRUED AS PART OF     BENEFITS UPON      COMPANIES IN DELAWARE 
NAME                            ADVISER FUNDS        FUND EXPENSES        RETIREMENT(1)         INVESTMENTS(2)    
----------------------------  ------------------  -------------------  ------------------  -----------------------
                                                                                                                  
Walter P. Babich              $            2,717         none          $           70,000  $               110,870
John H. Durham                $            2,524         none          $           70,000  $               101,930
John A. Fry                   $            2,720         none          $           70,000  $                91,458
Anthony D. Knerr              $            2,746         none          $           70,000  $               109,345
Ann R. Leven                  $            2,919         none          $           70,000  $               115,870
Thomas F. Madison             $            2,775         none          $           70,000  $               109,620
Janet L. Yeomans              $            2,775         none          $           70,000  $               109,620

(1)  Under the terms of the Delaware Investments Retirement Plan for  
       Trustees/Directors, each disinterested Trustee/Director who, at the
         time of his or her retirement from the Board, has attained the age of
     70 and served on the Board for at least five continuous years, is
    entitled to receive payments from each investment company in the
Delaware Investments family for which he or she serves as   
      Trustee/Director for a period equal to the lesser of the number of
        years that such person served as a Trustee/Director or the remainder
        of such person's life. The amount of such payments will be equal, on
         an annual basis, to the amount of the annual retainer that is paid to
     trustees/directors of each investment company at the time of such
      person's retirement. If an eligible Trustee/Director retired as of
    October 31, 2004, he or she would be entitled to annual payments
       totaling the amounts noted above, in the aggregate, from all of the
        investment companies in the Delaware Investments family for which he
  or she serves as a trustee or director, based on the number of
      investment companies in the Delaware Investments family as of that
date.                                                       
  (2)  Each independent Trustee/Director currently receives a total annual
        retainer fee of $70,000 for serving as a Trustee/Director for all 32
      investment companies in Delaware Investments, plus $5,000 for each
          Board Meeting attended. The following compensation is in the aggregate
      from all investment companies in the complex. Members of the audit
         committee receive additional compensation of $2,500 for each meeting.
          Members of the nominating committee receive additional compensation of
       $1,700 for each meeting. In addition, the chairpersons of the audit
        and nominating committees each receive an annual retainer of $10,000
      and $1,500, respectively. The Coordinating Trustee/Director of the
          Delaware Investments funds receives an additional retainer of $25,000.
 (3)  In addition to this compensation, for the 12-month period ended on
       October 31, 2004, Mr. Fry received $8,827 in professional fees from
Voyageur Funds for services provided to the Fund's Board.   

The Board of Trustees has the following committees:             

 Audit Committee: This committee monitors accounting and financial
reporting policies and practices, and internal controls for the Delaware        
Investments funds. It also oversees the quality and objectivity of the Delaware 
Investments funds' financial statements and the independent audit thereof, and  
acts as a liaison between the Delaware Investments funds' Independent Registered
Public Accounting Firm and the full Board of Trustees. Three independent        
trustees comprise the committee. The Audit Committee held six meetings during   
Adviser Funds' last fiscal year.                                                

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    Nominating Committee: This committee recommends board members, fills
vacancies and considers the qualifications of board members. The committee also 
monitors the performance of counsel for independent trustees. Three independent 
trustees and one interested trustee serve on the committee. The Nominating      
Committee held eight meetings during Adviser Funds' last fiscal year.           

GENERAL INFORMATION                                                             

       Adviser Funds is an open-end management investment company. Each Fund's
portfolio of assets is diversified as defined by the 1940 Act. Adviser Funds was
organized as a Maryland corporation on August 10, 1993 and reorganized as a     
Delaware business trust on November 23, 1999.                                   

     The Delaware Diversified Income Fund commenced operations on June 28,
2002. On October 28, 2002, Delaware Pooled Trust Diversified Core Fixed Income  
Portfolio (the "Predecessor Fund") merged into Delaware Diversified Income Fund.
The Fund is treated as the surviving legal entity, but the Predecessor Fund, for
a variety of reasons, is treated as the surviving entity for such purposes as   
presentation of accounting, financial and performance information. Thus, all    
such information prior to October 28, 2002, represents that of the Predecessor  
Fund. The Predecessor Fund commenced operations on December 29, 1997.           

   Delaware furnishes investment management services to each Fund. The
Manager also provides investment management services to certain of the other    
funds in the Delaware Investments family. An affiliate of the Manager also      
manages private investment accounts. While investment decisions of each Fund are
made independently from those of the other funds and accounts, investment       
decisions for such other funds and accounts may be made at the same time as     
investment decisions for each Fund.                                             

      The Board of Trustees is responsible for overseeing the performance of
each Fund's investment adviser and determining whether to approve and/or renew  
each Fund's investment management agreement. When the Board considers whether to
renew an investment management agreement, it considers various factors that     
include:                                                                        

The nature, extent and quality of the services provided by the  
investment adviser.                                                             

The investment performance of the fund's assets managed by the  
investment adviser.                                                             

The fair market value of the services provided by the investment
adviser.                                                                        

     Comparative analysis of expense ratios of, and advisory fees paid by,
similar funds.                                                                  

       The extent to which the investment adviser has realized or will realize
economies of scale as the fund grows.                                           

        Other benefits accruing to the investment adviser or its affiliates from
its relationship with the fund.                                                 

    The investment adviser's management of the operating expenses of the
fund, such as transaction costs, including how portfolio transactions for the   
fund are conducted and brokers are chosen.                                      

       At its annual contract review meeting (the "Annual Meeting"), the Board
of Trustees was presented with information concerning each Delaware Investments 
service provider to the Funds, including the investment advisors, the           
Distributor and the transfer agent, shareholder servicing agent and fund        
accountant. The Board reviewed materials provided by Delaware Investments       
concerning the level of service provided to the Funds and both the costs to the 
Funds and the profit to Delaware Investments. Throughout the prior year, the    
Board also received regular reports detailing performance, the current          
investment strategies for the Funds and Fund expenses. In addition, at the      
Annual Meeting the Board separately received and reviewed independent historical
and comparative reports provided by Lipper, Inc. ("Lipper") that analyzed the   
Funds' performance over a ten-year period, as well as actual                    

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and contractual management and total expenses. The reports also provided        
comparative information for performance and expenses against the Funds' peer    
mutual funds. In addition to information pertaining to the Funds, the Board also
received similar information concerning all of the other investment companies in
the Delaware Investments Family of Funds.                                       

    In reviewing the investment management agreements for the Funds, the
Board of Trustees considered the Funds' performance relative to their           
performance goals, peers and benchmark, the investment process and controls used
in managing the Funds, the Funds' fees and expenses relative to its peers, the  
experience and qualifications of personnel responsible for managing the Funds   
and quality of other services provided to the Funds in addition to investment   
advice.                                                                         

        The Board met in executive session to consider the investment management
agreements. The independent Trustees also met separately with Lipper. The Board 
believed that management had effectively communicated with the Board and had    
been very responsive to the issues raised by the Board during the previous year.
The Board was pleased with the current staffing within the Funds' investment    
advisors during the past year, the emphasis on research, and the compensation   
system that had been implemented for investment advisory personnel. In          
particular, the Board noted that management had maintained and, in some         
instances, increased financial and personnel resources committed to fund        
management. The Board considered the overall benefits provided by Delaware      
Investments' strong corporate management and compliance oversight to all funds  
in the complex.                                                                 

        In considering the investment performance of the Funds and of comparable
mutual funds advised by Delaware, the Board looked at each Fund's performance   
relative to its peers and benchmark. The performance numbers excerpted from the 
materials reviewed by the Board below represent annualized total returns and are
calculated using a Fund's daily net asset value. Performance numbers assume     
reinvestment of income distributions and capital gains on the ex-dividend date. 
The Funds' performance over the past one, three and five year periods ended     
February 29, 2004 and quartile ranking of each of the Funds compared by Lipper  
to their respective peer group is as follows. The Funds' performance is ranked  
within its Lipper Investment Classification/Objective. A fund with the highest  
performance is ranked first, and a fund with the lowest performance is ranked   
last. The performance quartile illustrates the quartile position of the Fund    
within its Lipper Investment Classification/Objective. For purposes of total    
return, the quartiles are defined as the first quartile is the highest or best  
25%; the second quartile is the next 25%; the third quartile is the next 25%;   
and the fourth quartile is the lowest or worst 25%.                             

                                                        [Enlarge/Download Table]

                                         1 YEAR             3 YEARS             5 YEARS       
                                    ----------------    ---------------    ----------------   
                                                                                              
Delaware Diversified Income Fund               12.78%             10.04%               9.79%  
                                      third quartile(1)  first quartile(1)   first quartile(1)
Delaware Delaware U.S. Growth Fund             28.49%             -8.40%              -2.57%  
                                     fourth quartile(1)  third quartile(1)  second quartile(1)
                                                                            
     (1)     Performance measured against the Portfolio's peer universe. A
                Portfolio's peer universe comprises all funds that have the same
              investment objective as the Portfolio and is created by Lipper
                to expand a peer group and provide a broader view of performance
                within the investment objective. A peer group is a smaller group
             of funds that may be similar in management style, duration or
quality.                                        

      In considering the costs of the services to be provided and profits to
be realized by Delaware and its affiliates from the relationship with the Funds,
the Board considered the service fees charged to each Fund and the fair market  
value of the services provided by the investment advisors.                      

      The Board's objective is to limit the total expense ratio of the Funds
to an acceptable range as compared to the median of a peer group of comparable  
mutual funds. The Board took into consideration management's agreement with that
objective and the means of implementing that objective, which could include     
certain types of remedial actions as well as potential future voluntary or      
contractual expense caps.                                                       

     In considering the level of the Funds' expenses, the Board reviewed
each Fund's current average for its peers. The Board looked at the advisory fees
of each Fund compared to their peer groups and at overall levels of expenses for

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each of the Funds compared to its respective peer group. Each Fund's quartile   
rankings (as of each Fund's last fiscal year) for contractual management fees,  
actual management fees and total expenses were as follows. The Fund's expenses  
are ranked within the Expense Group or Expense Universe. A fund with the lowest 
expense is ranked first, and a fund with the highest expense is ranked last. The
expense quartile illustrates the position of the Fund within the Expense Group  
or Expense Universe. For purposes of expenses, the quartiles are defined as: the
first quartile in the lowest or best 25%; the second quartile is the next 25%;  
the third quartile is the next 25%; and the fourth quartile is the highest or   
worst 25%(1).                                                                   

   (1)     The performance quartile methodology is the opposite of the
          expense quartile methodology (e.g., the highest expense is
              defined as being in the fourth quartile, and the highest total
         return is defined as being in the fourth quartile, etc.).

                                                        [Enlarge/Download Table]

                                    Contractual                                          
                                  Management Fees  Actual Management Fees  Total Expenses
                                  ---------------  ----------------------  --------------
                                                                                         
Delaware Diversified Income Fund    2nd quartile        1st quartile        1st quartile 
Delaware U.S. Growth Fund           1st quartile        1st quartile        3rd quartile 

    The Board found each Fund's fees to be appropriate after considering
these factors and generally in line with fees charged to comparable funds in the
industry.                                                                       

The Board also reviewed the quality of services performed by the
investment adviser's affiliates on behalf of each Fund, including fund          
accounting, transfer agent, administrative, and shareholder services. The Board 
also considered the prestigious DALBAR service awards received by the investment
adviser's affiliate for the quality of service it provided to Portfolio         
investors.                                                                      

        Delaware provides investment management services to certain of the other
funds in the Delaware Investments family. While investment decisions for the    
Funds are made independently from those of the other funds and accounts,        
investment decisions for such other funds and accounts may be made at the same  
time as investment decisions for the Funds.                                     

      The Delaware Investments Family of Funds, Delaware Management Company,
Lincoln Investment Management, Inc. and Delaware Distributors, L.P., in         
compliance with SEC Rule 17j-1 under the 1940 Act, have adopted Codes of Ethics 
which govern personal securities transactions. Under the Codes of Ethics,       
persons subject to the Codes are permitted to engage in personal securities     
transactions, including securities that may be purchased or held by the         
Portfolios, subject to the requirements set forth in Rule 17j-1 and certain     
other procedures set forth in the applicable Code of Ethics. The Codes of Ethics
are on public file with, and are available from, the SEC.                       

The Manager manages the investment options for Delaware-Lincoln 
ChoicePlus and Delaware MedallionSM III Variable Annuities. ChoicePlus is issued
and distributed by Lincoln National Life Insurance Company. ChoicePlus offers a 
variety of different investment styles managed by leading money managers.       
Medallion is issued by Allmerica Financial Life Insurance and Annuity Company   
(First Allmerica Financial Life Insurance Company in New York and Hawaii).      
Delaware Medallion offers various investment series ranging from domestic equity
funds, international equity and bond funds and domestic fixed income funds. Each
investment series available through ChoicePlus and Medallion utilizes an        
investment strategy and discipline the same as or similar to one of the Delaware
Investments mutual funds available outside the annuity. The Manager also manages
many of the investment options for the Delaware-Lincoln ChoicePlus Variable     
Annuity. ChoicePlus is issued and distributed by Lincoln National Life Insurance
Company. Choice Plus offers a variety of different investment styles managed by 
ten leading money managers. See Delaware VIP Trust in Appendix B.               

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      The Distributor acts as national distributor for each Fund and for the
other mutual funds in the Delaware Investments family. The Distributor received 
net commissions from the Delaware U.S. Growth Fund on behalf of Class A Shares, 
after reallowances to dealers, as follows:                                      

CLASS A SHARES
----------------------------------------------------------------------- 
TOTAL AMOUNT OF       AMOUNTS   
                   UNDERWRITING      REALLOWED TO     NET COMMISSION
FISCAL YEAR ENDED     COMMISSIONS         DEALERS           TO DDLP     
-----------------   ---------------   ---------------   --------------- 
10/31/04            $        94,753   $        79,698   $        15,055 
10/31/03            $       159,989   $       144,983   $        15,006 
10/31/02            $       261,193   $       236,059   $        25,134 

      The Distributor acts as national distributor for each Fund and for the
other mutual funds in the Delaware Investments family. The Distributor received 
net commissions from the Delaware Diversified Income Fund on behalf of Class A  
Shares, after reallowances to dealers, as follows:                              

CLASS A SHARES
----------------------------------------------------------------------- 
TOTAL AMOUNT OF       AMOUNTS   
                   UNDERWRITING      REALLOWED TO     NET COMMISSION
FISCAL YEAR ENDED     COMMISSIONS         DEALERS           TO DDLP     
-----------------   ---------------   ---------------   --------------- 
10/31/04            $     1,396,834   $     1,216,958   $       179,876 
10/31/03            $     1,064,752   $       948,826   $       115,926 

    The Distributor received in the aggregate Limited CDSC payments from
Delaware U.S. Growth Fund with respect to Class A Shares and CDSC payments with 
respect to Class B Shares and Class C Shares as follows:                        

FISCAL YEAR ENDED      CLASS A        CLASS B        CLASS C            
----------------    ------------   ------------   ------------          
10/31/04                none       $    127,095   $      2,025          
10/31/03                none       $    152,663   $      3,345          
10/31/02                none       $    314,886   $      2,642          

      The Distributor received in the aggregate Limited CDSC payments from
Delaware Diversified Income Fund with respect to Class A Shares and CDSC        
payments with respect to Class B Shares and Class C Shares as follows:          

FISCAL YEAR ENDED      CLASS A        CLASS B        CLASS C            
-----------------   ------------   ------------   ------------          
10/31/04                none       $     59,366   $     43,309          
10/31/03                none               none           none          

    The Transfer Agent, an affiliate of the Manager, acts as shareholder
servicing, dividend disbursing and transfer agent for each Fund and for the     
other mutual funds in the Delaware Investments Family of Funds. The Transfer    
Agent is paid a fee by each Fund for providing these services consisting of an  
annual per account charge for (i) each open and closed account on their records 
and each account held on a sub-accounting system maintained by firms that hold  
accounts on an omnibus basis ("Shareholder Accounts"); and (ii) each account on 
a retirement processing system ("Retirement Accounts"). These charges are as    
follows:                                                                        

Shareholder Accounts    $ 21.25 Per Annum   
Retirement Accounts     $ 21.25 Per Annum   

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        These charges are assessed monthly on a pro rata basis and determined by
using the number of Shareholder and Retirement Accounts maintained as of the    
last calendar day of each month. Compensation is fixed each year and approved by
the Board of Trustees, including a majority of the disinterested trustees.      

        The Transfer Agent also provides accounting services to each Fund. Those
services include performing all functions related to calculating each Fund's net
asset value and providing all financial reporting services, regulatory          
compliance testing and other related accounting services. For its services, the 
Transfer Agent is paid a fee based on total assets of all funds in the Delaware 
Investments Family of Funds for which it provides such accounting services. Such
fee is equal to 0.025% multiplied by the total amount of assets in the complex  
for which the Transfer Agent furnishes accounting services, where such aggregate
complex assets are $10 billion. The fees are charged to each Fund and the other 
mutual funds in the Delaware Investments Family of Funds, on an aggregate pro   
rata basis. The asset-based fee payable to the Transfer Agent is subject to a   
minimum fee calculation based on the type and number of classes per Fund.       

   The Manager and its affiliates own the name "Delaware Group." Under
certain circumstances, including the termination of Adviser Funds' advisory     
relationship with the Manager or its distribution relationship with the         
Distributor, the Manager and its affiliates could cause Adviser Funds to delete 
the words "Delaware Group" from Adviser Funds' name.                            

        JPMorgan Chase Bank ("JPMorgan"), 4 Chase Metrotech Center, Brooklyn, NY
11245 is custodian of the Funds' securities and cash. As custodian for each     
Fund, JPMorgan maintains a separate account or accounts for each Fund; receives,
holds and releases portfolio securities on account of the Fund; receives and    
disburses money on behalf of the Fund; and collects and receives income and     
other payments and distributions on account of each Fund's portfolio securities.

RESTRUCTURING OF ADVISER FUNDS                                                  

      Until April 26, 1996, Adviser Funds consisted of nine series of shares
(U.S. Growth Fund and eight other funds) and was named Lincoln Advisor Funds,   
Inc. ("LAF"). On February 23, 1996, LAF's Board of Directors approved a         
restructuring to integrate fully LAF into the Delaware Investments family of    
funds. The restructuring provided, among other things, for the liquidation of   
three funds; the appointment of Delaware Management Company as the investment   
manager of each of the funds; the appointment of certain sub-advisors; changes  
in certain names, including Lincoln U.S. Growth Portfolio to U.S. Growth Fund,  
and the change of the LAF to Delaware Group Adviser Funds. The liquidations were
completed on April 26, 1996 and following required shareholder approval of the  
investment management and sub-advisory arrangements at a meeting of shareholders
held on May 3, 1996, the restructuring was consummated.                         

       In accordance with the restructuring, beginning May 6, 1996, the former
Class D shares have been redesignated as the Institutional Class shares.        

    On July 17, 1997, the Board of Trustees approved the liquidations of
three additional funds. These liquidations were completed on September 19, 1997.

     In accordance with the restructuring, the front-end sales charges for
and 12b-1 Plan distribution fees assessable against Class A Shares and the      
contingent deferred sales charge schedule for Class B Shares, as well as its    
feature for conversion to Class A Shares, have been modified to be made         
consistent with the charges, fees and features that generally apply to all other
Delaware Investments Funds. The charges and fees previously applicable to the   
Class C Shares have not been changed.                                           

       Beginning May 6, 1996, the charges, fees and features described in this
Part B have been applied to the respective shares, except for Class B Shares    
purchased before that date. Class B Shares purchased prior to May 6, 1996       
continue to be subject to the following contingent deferred sales charge        
schedule if redemptions are made                                                

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during the time periods described: within the first year after purchase (5.0%); 
within the second year after purchase (4.0%); within the third year after       
purchase (4.0%); within the fourth year after purchase (3.0%); within the fifth 
year after purchase (2.0%); within the sixth year after purchase (1.0%); and    
thereafter, none. In addition, Class B Shares purchased prior to May 6, 1996    
still will convert to Class A Shares after the expiration of approximately six  
years after purchase. Class B Shares purchased with reinvested dividends,       
whether effected before or after May 6, 1996, will be aggregated and converted  
pro-rata with other Class B Shares.                                             

CAPITALIZATION                                                                  

    Adviser Funds has a present unlimited authorized number of shares of
beneficial interest with no par value allocated to each Class. Each Class       
represents a proportionate interest in the assets of a Fund, and has the same   
voting and other rights and preferences as the other classes of the Fund, except
that shares of the Institutional Class may not vote on any matter that affects  
the Fund Classes' Distribution Plans under Rule 12b-1. Similarly, as a general  
matter, shareholders of Class A Shares, Class B Shares, Class C Shares and Class
R Shares may vote only on matters affecting the 12b-1 Plan that relates to the  
class of shares that they hold. However, Class B Shares may vote on any proposal
to increase materially the fees to be paid by each Fund under the Rule 12b-1    
Plan relating to Class A Shares. General expenses of each Fund will be allocated
on a pro-rata basis to the classes according to asset size, except that expenses
of the Plans of Class A Shares, Class B Shares, Class C Shares and Class R      
Shares will be allocated solely to those classes.                               

      All shares have no preemptive rights, are fully transferable and, when
issued, are fully paid and nonassessable and, except as described above, have   
equal voting rights.                                                            

  On November 29, 1993, the name Lincoln Renaissance Funds, Inc. was
changed to Lincoln Advisor Funds, Inc.                                          

        As of the close of business on May 3, 1996, the name Lincoln U.S. Growth
Portfolio was changed to U.S. Growth Fund. In addition, as of the close of      
business May 3, 1996, the name of Lincoln Advisor Funds, Inc. was changed to    
Delaware Group Adviser Funds, Inc. As of August 16, 1999, the name of the U.S.  
Growth Fund changed to Delaware U.S. Growth Fund. Corresponding changes were    
also made to the names of the Fund's classes on that date. Effective November   
23, 1999, the name of Delaware Group Adviser Funds, Inc. was changed to Delaware
Group Adviser Funds. Class R Shares of each Fund first were offered on June 1,  
2003.                                                                           

NONCUMULATIVE VOTING                                                            

       Adviser Funds' shares have noncumulative voting rights which means that
the holders of more than 50% of the shares of Adviser Funds voting for the      
election of trustees can elect all the trustees if they choose to do so, and, in
such event, the holders of the remaining shares will not be able to elect any   
trustees.                                                                       

    This Part B does not include all of the information contained in the
Registration Statement which is on file with the SEC.                           

FINANCIAL STATEMENTS                                                            

        Ernst & Young LLP serves as the Independent Registered Public Accounting
Firm for Delaware Group Adviser Funds and, in its capacity as such, audits the  
financial statements contained in each Fund's Annual Report. Each Fund's        
Statement of Net Assets, Statement of Assets and Liabilities (as applicable),   
Statement of Operations, Statement of Changes in Net Assets, Financial          
Highlights and Notes to Financial Statements, as well as the report of Ernst &  
Young LLP, the Independent Registered Public Accounting Firm, for the fiscal    
year ended October 31, 2004, are included in the Fund's Annual Report to        
shareholders. The financial statements and financial highlights, the notes      
relating thereto and the reports of Ernst & Young LLP listed above are          
incorporated by reference from the Annual Reports into this Part B.             

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APPENDIX A--DESCRIPTION OF RATINGS                                              

       Each Fund has the ability to invest up to 10% of its net assets in high
yield, high risk fixed-income securities. The following paragraphs contain      
excerpts from Moody's and S&P's rating descriptions. These credit ratings       
evaluate only the safety of principal and interest and do not consider the      
market value risk associated with high yield securities.                        

GENERAL RATING INFORMATION                                                      

MOODY'S INVESTORS SERVICE - BOND      Aaa         Bonds which are rated Aaa are 
RATINGS                                           judged to be of the best      
                                           quality. They carry the
                                                 smallest degree of investment
                                          risk and are generally
                                               referred to as "gilt edge."
                                         Interest payments are
                                                 protected by a large or by an
                                               exceptionally stable margin
                                                  and principal is secure. While
                                          the various protective
                                                  elements are likely to change,
                                          such changes as can be
                                                visualized are most unlikely
                                               to impair the fundamentally
                                           strong position of such
                           issues.

                                    Aa          Bonds which are rated Aa are
                                                judged to be of high quality
                                              by all standards. Together
                                           with the Aaa group they
                                               comprise what are generally
                                              known as high grade bonds.
                                                 They are rated lower than Aaa
                                            bonds because margins of
                                                  protection may not be as large
                                           as in Aaa securities or
                                             fluctuation of protective
                                              elements may be of greater
                                             amplitude or there may be
                                                 other elements which make the
                                          long-term risks appear
                                               somewhat larger than in Aaa
                               securities.

                               A           Bonds which are rated A
                                          possess many favorable
                                                 investment attributes and are
                                              considered as upper medium
                                              grade obligations. Factors
                                                giving security to principal
                                               and interest are considered
                                                adequate but elements may be
                                           present which suggest a
                                                susceptibility to impairment
                                           sometime in the future.

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                                    Baa         Bonds that are rated Baa are
                                           considered medium grade
                                               obligations, i.e., they are
                                                neither highly protected nor
                                            poorly secured. Interest
                                          payments and principal
                                                security appear adequate for
                                           the present but certain
                                              protective elements may be
                                     lacking or may be
                                                 characteristically unreliable
                                                  over any great length of time.
                                               Such bonds lack outstanding
                                                  investment characteristics and
                                            in fact have speculative
                                            characteristics as well.

                                    Ba          Bonds which are rated Ba are
                                              judged to have speculative
                                                 elements; their future cannot
                                                  be considered as well-assured.
                                           Often the protection of
                                          interest and principal
                                                  payments may be very moderate,
                                        and thereby not well
                                                safeguarded during both good
                                                  and bad times over the future.
                                           Uncertainty of position
                                               characterizes bonds in this
                          class.

                               B           Bonds which are rated B
                                                  generally lack characteristics
                                                of the desirable investment.
                                             Assurance of interest and
                                            principal payments or of
                                                 maintenance of other terms of
                                              the contract over any long
                                                period of time may be small.

                                     Caa         Bonds which are rated Caa are
                                                 of poor standing. Such issues
                                                  may be in default or there may
                                                 be present elements of danger
                                                with respect to principal or
                             interest.

                                Ca          Bonds which are rated Ca
                                               represent obligations which
                                             are speculative in a high
                                                 degree. Such issues are often
                                            in default or have other
                                        marked shortcomings.

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                                     Aaa         Bonds which are rated Aaa are
                                            judged to be of the best
                                           quality. They carry the
                                                 smallest degree of investment
                                          risk and are generally
                                               referred to as "gilt edge."
                                         Interest payments are
                                                 protected by a large or by an
                                               exceptionally stable margin
                                                  and principal is secure. While
                                          the various protective
                                                  elements are likely to change,
                                          such changes as can be
                                                visualized are most unlikely
                                               to impair the fundamentally
                                           strong position of such
                           issues.

                                   C           Bonds which are rated C are
                                             the lowest rated class of
                                                  bonds, and issues so rated can
                                         be regarded as having
                                               extremely poor prospects of
                                           ever attaining any real
                                        investment standing.

SHORT-TERM DEBT RATINGS                                                         

      Moody's short-term debt ratings are opinions of the ability of issuers
to repay punctually senior obligations which have an original maturity not      
exceeding one year                                                              

P-1     Issuers rated "PRIME-1" or "P-1" (or supporting institutions) have      
     superior ability for repayment of senior short-term debt obligations.

P-2     Issuers rated "PRIME-2" or "P-2" (or supporting institutions) have a    
   strong ability for repayment of senior short-term debt obligations.

P-3     Issuers rated "PRIME-3" or "P-3" (or supporting institutions) have an   
       acceptable ability for repayment of senior short-term debt obligations.

MUNICIPAL NOTE RATINGS                                                          

       Issuers or the features associated with Moody's MIG or VMIG ratings are
identified by date of issue, date of maturity or maturities or rating expiration
date and description to distinguish each rating from other ratings. Each rating 
designation is unique with no implication as to any other similar issue of the  
same obligor. MIG ratings terminate at the retirement of the obligation while   
VMIG rating expiration will be a function of each issue's specific structural or
credit features.                                                                

MIG 1/VMIG 1     This designation denotes best quality. There is present strong 
          protection by established cash flows, superior liquidity
               support, or demonstrated broad-based access to the market for
refinancing.                                  

MIG 2/VMIG 2     This designation denotes high quality. Margins of protection   
            are ample although not so large as in the preceding group.

MIG 3/VMIG 3     This designation denotes favorable quality. All security       
                elements are accounted for but there is lacking the undeniable
           strength of the preceding grades. Liquidity and cash flow
               protection may be narrow and market access for refinancing is
likely to be less well established.           

MIG 4/VMIG 4     This designation denotes adequate quality. Protection commonly 
               regarded as required of an investment security is present and
                although not distinctly or predominantly speculative, there is
specific risk.                                

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S&P'S - BOND RATINGS                 AAA          Debt rated AAA has the highest
                                               rating assigned by S&P to a
                                                debt obligation. Capacity to
                                          pay interest and repay
                                                  principal is extremely strong.

                               AA           Debt rated AA has a very
                                          strong capacity to pay
                                                interest and repay principal
                                                and differs from the highest
                                                rated issues only in a small
                           degree.

                                A            Debt rated A has a strong
                                                capacity to pay interest and
                                                  repay principal although it is
                                                somewhat more susceptible to
                                                  the adverse effects of changes
                                                 in circumstances and economic
                                                  conditions than debt in higher
                                     rated categories.

                                    BBB          Debt rated BBB is regarded as
                                                  having an adequate capacity to
                                         pay interest an repay
                                                  principal. Whereas it normally
                                                exhibits adequate protection
                                                parameters, adverse economic
                                          conditions or changing
                                                 circumstances are more likely
                                                  to lead to a weakened capacity
                                             to pay interest and repay
                                              principal for debt in this
                                                 category than in higher rated
                               categories.

                                     BB, B,       Debt rated BB, B, CCC or CC is
                               CCC and      regarded, on balance, as
                                     CC           predominately speculative with
                                              respect to capacity to pay
                                                interest and repay principal
                                                in accordance with the terms
                                         of the obligation. BB
                                                  indicates the lowest degree of
                                                  speculation and CC the highest
                                                degree of speculation. While
                                              such debt will likely have
                                               some quality and protective
                                              characteristics, these are
                                       outweighed by large
                                               uncertainties or major risk
                                        exposures to adverse
                               conditions.

                                  C            This rating is reserved for
                                            income bonds on which no
                                           interest is being paid.

                                  D            Debt rated D is in default,
                                                  and payment of interest and/or
                                                repayment of principal is in
                            arrears.

COMMERCIAL PAPER RATINGS                                                        

        S&P's commercial paper ratings are current assessments of the likelihood
of timely payment of debt having an original maturity of no more than 365 days. 

A-1     The A-1 designation indicates that the degree of safety regarding timely
        payment is either overwhelming or very strong. A plus (+) designation is
    applied only to those issues rated A-1 which possess an overwhelming
degree of safety.                                               

A-2     Capacity for timely payment on issues with the designation A-2 is       
    strong. However, the relative degree of safely is not as high as for
issues designated A-1.                                          

A-3     Issues carrying this designation have a satisfactory capacity for timely
   payment. They are, however, somewhat more vulnerable to the adverse
        effects of changes in circumstances than obligations carrying the higher
designations.                                                   

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MUNICIPAL NOTE RATINGS                                                          

       An S&P municipal note rating reflects the liquidity concerns and market
access risks unique to notes. Notes due in 3 years or less will likely receive a
note rating. Notes maturing beyond 3 years will most likely receive a long-term 
debt rating. The following criteria will be used in making that assessment:     

      Amortization schedule (the larger the final maturity relative to other
maturities, the more likely it will be treated as a note).                      

     Sources of payment (the more dependent the issue is on the market for
its refinancing, the more likely it will be treated as a note).                 

SP-1    Very strong or strong capacity to pay principal and interest. Those     
        issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.                                   

SP-2    Satisfactory capacity to pay principal and interest.                    

SP-3    Speculative capacity to pay principal and interest.                     

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PART C

 Other Information

Item 22.  Exhibits                                                              

(a)   Agreement and Declaration of Trust.                   

              (1)     Agreement and Declaration of Trust (December 17, 1998)
             incorporated into this filing by reference to
                        Post-Effective Amendment No. 12 filed November 22, 1999.

             (2)     Certificate of Trust (December 17, 1998) incorporated
               into this filing by reference to Post-Effective
         Amendment No. 12 filed November 22, 1999.

(b)   By-Laws. By-Laws (December 17, 1998) incorporated into
           this filing by reference to Post-Effective Amendment No. 12
filed November 22, 1999.                        

   (c)   Copies of All Instruments Defining the Rights of Holders.

               (1)     Agreement and Declaration of Trust. Articles III, V and
                     VI of Agreement and Declaration of Trust incorporated
               into this filing by reference to Post-Effective
         Amendment No. 12 filed November 22, 1999.

             (2)     By-Laws. Article II of By-Laws incorporated into this
                      filing by reference to Post-Effective Amendment No. 12
filed November 22, 1999.        

       (d)   Investment Management Agreements and Sub-Advisory Agreements.

              (1)     Executed Investment Management Agreement (November 23,
                      1999) between Delaware Management Company (a series of
                      Delaware Management Business Trust) and the Registrant
                     on behalf Delaware U.S. Growth Fund incorporated into
                        this filing by reference to Post-Effective Amendment No.
16 filed February 28, 2001.     

                (2)     Executed Amendment No. 1 (June 28, 2002) to Exhibit A of
                       the Investment Management Agreement (November 23, 1999)
                      between the Registrant and Delaware Management Company
                       (a series of Delaware Management Business Trust) adding
                       Delaware Diversified Income Fund incorporated into this
                      filing by reference to Post-Effective Amendment No. 20
filed December 31, 2002.        

          (3)     Form of Sub-Advisory Agreement (June 2002) between
                 Delaware Management Company (a series of Delaware
                     Management Business Trust) and Delaware International
                      Advisers Ltd. on behalf of Delaware Diversified Income
                  Fund incorporated into this filing by reference to
                        Post-Effective Amendment No. 20 filed December 31, 2002.

(e)   (1)     Distribution Agreements.                      

                      (i)     Executed Distribution Agreement (2003) between
                              Delaware Distributors, L.P. and the Registrant
                              on behalf of each Class incorporated into this
                               filing by reference to Post-Effective Amendment
               No. 22 filed December 30, 2003.

                      (ii)    Executed Amended Schedule I (June 28, 2002) to
                             Distribution Agreement incorporated into this
                               filing by reference to Post-Effective Amendment
               No. 20 filed December 31, 2002.

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                      (iii)   Executed Second Amended and Restated Financial
                               Intermediary Distribution Agreement (August 21,
                             2003) between Delaware Distributors, L.P. and
                              Lincoln Financial Distributors, Inc. on behalf
                               of the Registrant incorporated into this filing
                               by reference to Post-Effective Amendment No. 23
        filed December 27, 2004.

             (2)     Dealer's Agreement. Dealer's Agreement (January 2001)
             incorporated into this filing by reference to
                    Post-Effective Amendment No. 19 filed June 28, 2002.

                (3)     Vision Mutual Fund Gateway Agreement. Vision Mutual Fund
                        Gateway Agreement (November 2000) incorporated into this
                      filing by reference to Post-Effective Amendment No. 19
filed June 28, 2002.            

            (4)     Registered Investment Advisers Agreement. Registered
            Investment Advisers Agreement (January 2001)
             incorporated into this filing by reference to
                    Post-Effective Amendment No. 19 filed June 28, 2002.

                (5)     Bank/Trust Agreement. Bank/Trust Agreement (August 2004)
             incorporated into this filing by reference to
                        Post-Effective Amendment No. 23 filed December 27, 2004.

(f)   Inapplicable.                                         

(g)   Custodian Agreements.                                 

          (1)     Executed Custodian Agreement (May 1, 1996) between
                        JPMorgan Chase Bank and the Registrant incorporated into
                        this filing by reference to Post-Effective Amendment No.
                      7 filed February 27, 1997 and Post-Effective Amendment
No. 8 filed December 23, 1997.  

                (i)     Executed Amendment (July 1, 2001) to the
                               Custodian Agreement between JPMorgan Chase Bank
                                and the Registrant incorporated into this filing
                               by reference to Post-Effective Amendment No. 19
    filed June 28, 2002.

                   (ii)    Executed letter (June 2002) to add Delaware
                        Diversified Income Fund to the Custodian
                             Agreement between the Registrant and JPMorgan
                           Chase Bank incorporated into this filing by
                            reference to Post-Effective Amendment No. 20
        filed December 31, 2002.

                   (iii)   Executed Amendment No. 1 (July 17, 2003) to
                             Schedule A of the Custodian Agreement between
                      JPMorgan Chase Bank and the Registrant
                             incorporated into this filing by reference to
                              Post-Effective Amendment No. 23 filed December
27, 2004.       

           (2)     Executed Securities Lending Agreement (December 22,
                    1998) between JPMorgan Chase Bank and the Registrant
             incorporated into this filing by reference to
                        Post-Effective Amendment No. 16 filed February 28, 2001.

                   (i)     Executed Amendment (October 1, 2002) to the
                             Securities Lending Agreement between JPMorgan
                               Chase Bank and the Registrant incorporated into
                          this filing by reference to Post-Effective
                         Amendment No. 20 filed December 31, 2002.

                   (ii)    Executed Amendment No. 1 (July 17, 2003) to
                              Schedule A of the Securities Lending Agreement
                              between JPMorgan Chase Bank and the Registrant
                             incorporated into this filing by reference to
                              Post-Effective Amendment No. 22 filed December
30, 2003.       

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(h)   Other Material Contracts.                             

                (1)     Executed Shareholder Services Agreement (April 19, 2001)
              between Delaware Service Company, Inc. and the
                        Registrant incorporated into this filing by reference to
                        Post-Effective Amendment No. 17 filed December 28, 2001.

                        (i)     Executed Amended Schedule A (August 23, 2002) to
                                Shareholder Services Agreement incorporated into
                          this filing by reference to Post-Effective
                         Amendment No. 20 filed December 31, 2002.

                 (ii)    Executed Schedule B (May 16, 2002) to the
                                Shareholder Services Agreement incorporated into
                          this filing by reference to Post-Effective
                     Amendment No. 19 filed June 28, 2002.

            (2)     Executed Fund Accounting Agreement (August 19, 1996)
              between Delaware Service Company, Inc. and the
                        Registrant incorporated into this filing by reference to
                       Post-Effective Amendment No. 7 filed February 27, 1997.

                       (i)     Executed Amendment No. 29 (December 1, 2004) to
                       Delaware Group of Funds Fund Accounting
                          Agreement incorporated into this filing by
                            reference to Post-Effective Amendment No. 23
        filed December 27, 2004.

                 (ii)    Executed Schedule B (May 16, 2002) to the
                       Delaware Group of Funds Fund Accounting
                          Agreement incorporated into this filing by
                            reference to Post-Effective Amendment No. 19
    filed June 28, 2002.

       (i)   Legal Opinion. Legal Opinion incorporated into this filing by
           reference to Post-Effective Amendment No. 19 filed June 28,
2002.                                           

(j)   Consent and Report of Auditors. Attached as Exhibit.  

(k)   Inapplicable.                                         

(l)   Inapplicable.                                         

(m)   Plans under Rule 12b-1.                               

          (1)     Plan under Rule 12b-1 for A Class (April 19, 2001)
             incorporated into this filing by reference to
                        Post-Effective Amendment No. 17 filed December 28, 2001.

          (2)     Plan under Rule 12b-1 for B Class (April 19, 2001)
             incorporated into this filing by reference to
                        Post-Effective Amendment No. 17 filed December 28, 2001.

          (3)     Plan under Rule 12b-1 for C Class (April 19, 2001)
             incorporated into this filing by reference to
                        Post-Effective Amendment No. 17 filed December 28, 2001.

       (4)     Plan under Rule 12b-1 for R Class (May 1, 2003)
             incorporated into this filing by reference to
                     Post-Effective Amendment No. 21 filed April 30, 2003.

    (n)   Plan under Rule 18f-3. Plan under Rule 18f-3 (May 1, 2003)
            incorporated into this filing by reference to Post-Effective
Amendment No. 21 filed April 30, 2003.          

(o)   Inapplicable.                                         

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(p)   Codes of Ethics.                                      

                (1)     Codes of Ethics for Delaware Investments Family of Funds
    (December 2004) attached as Exhibit.

          (2)     Codes of Ethics for Delaware Management Company, a
                 series of Delaware Management Business Trust, and
                       Delaware Distributors, L.P. (December 2004) attached as
Exhibit.                        

               (3)     Code of Ethics for Lincoln Financial Distributors, Inc.
                      (June 2004) incorporated into this filing by reference
                     to Post-Effective Amendment No. 23 filed December 27,
2004.                           

  (q)   Trustees' Power of Attorney. Trustees' Power of Attorney
(February 17, 2005) attached as Exhibit.        

Item 23.  Persons Controlled by or under Common Control with Registrant. None.  

Item 24.  Indemnification. Article VI of the By-Laws incorporated into this     
filing by reference to Post-Effective Amendment No. 12 filed
November 22, 1999.                                          

Item 25.  Business and Other Connections of Investment Advisor.                 

     Delaware Management Company (the "Manager"), a series of Delaware
  Management Business Trust, serves as investment manager to the
      Registrant and also serves as investment manager or sub-advisor to
 certain of the other funds in the Delaware Investments family
        (Delaware Group Adviser Funds, Delaware Group Cash Reserve, Delaware
        Group Equity Funds I, Delaware Group Equity Funds II, Delaware Group
    Equity Funds III, Delaware Group Equity Funds IV, Delaware Group
          Equity Funds V, Delaware Group Foundation Funds, Delaware Group Global
         & International Funds, Delaware Group Government Fund, Delaware Group
        Income Funds, Delaware Group Limited-Term Government Funds, Delaware
    Group State Tax-Free Income Trust, Delaware Group Tax-Free Fund,
       Delaware Group Tax-Free Money Fund, Delaware Pooled Trust, Delaware
     VIP Trust, Voyageur Insured Funds, Voyageur Intermediate Tax-Free
     Funds, Voyageur Investment Trust, Voyageur Mutual Funds, Voyageur
        Mutual Funds II, Voyageur Mutual Funds III, Voyageur Tax-Free Funds,
 Delaware Investments Dividend and Income Fund, Inc., Delaware
Investments Global Dividend and Income Fund, Inc., Delaware 
         Investments Arizona Municipal Income Fund, Inc., Delaware Investments
      Colorado Insured Municipal Income Fund, Inc., Delaware Investments
         Florida Insured Municipal Income Fund, Delaware Investments Minnesota
         Municipal Income Fund, Inc., Delaware Investments Minnesota Municipal
     Income Fund II, Inc. and Delaware Investments Minnesota Municipal
          Income Fund III, Inc.) as well as to certain non-affiliated registered
      investment companies. In addition, certain officers of the Manager
       also serve as trustees of the other Delaware Investments funds, and
      certain officers are also officers of these other funds. A company
      indirectly owned by the Manager's parent company acts as principal
      underwriter to the mutual funds in the Delaware Investments family
        (see Item 26 below) and another such company acts as the shareholder
          services, dividend disbursing, accounting servicing and transfer agent
   for all of the mutual funds in the Delaware Investments family.

         The following persons serving as directors or officers of the Manager
have held the following positions during the past two years. Unless noted, the  
principal business address of the Manager is 2005 Market Street, Philadelphia,  
PA 19103-7094.                                                                  

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                    POSITIONS & OFFICES WITH DELAWARE MANAGEMENT
NAME AND PRINCIPAL          COMPANY AND ITS AFFILIATES AND OTHER                
BUSINESS ADDRESS*           POSITIONS & OFFICES HELD                            
------------------------    ----------------------------------------------------

Jude T. Driscoll            President/Chief Executive Officer of Delaware       
                        Management Company, Delaware Investment Advisers
                         and Delaware Capital Management (each a series of
           Delaware Management Business Trust)

                          Chairman/President/Chief Executive Officer of each
                        fund in the Delaware Investments Family of Funds

             President/Chief Executive Officer and
                         Director/Trustee of Delaware Management Holdings,
                        Inc., DMH Corp, Delaware Investments U.S., Inc.,
                   Delaware General Management, Inc., Delaware
                           Management Company, Inc., Delaware Service Company,
                     Inc., Delaware Distributors, Inc., Retirement
                     Financial Services, Inc., Delaware Management
                            Business Trust, Delaware Distributors, L.P., Lincoln
                   National Investment Companies, Inc. and LNC
           Administrative Services Corporation

                        President of Delaware Lincoln Cash Management (a
                     series of Delaware Management Business Trust)

               Director of HYPPCO Finance Company Ltd.

John C. E. Campbell         Executive Vice President/Global Marketing & Client  
                         Services of Delaware Management Company (a series
              of Delaware Management Business Trust)

                        Executive Vice President/Global Marketing Sales,
                 Client Services & Product Development and
                  President/Global Institutional Services of
                          Delaware Investment Advisers (a series of Delaware
  Management Business Trust)

Patrick P. Coyne            Executive Vice President/Managing Director/Chief    
                     Investment Officer - Fixed Income of Delaware
                         Management Company, Delaware Investment Advisers,
                   Delaware Capital Management (each series of
                     Delaware Management Business Trust), Delaware
                      Management Holdings, Inc., Delaware Management
                      Business Trust and Lincoln National Investment
Companies, Inc.         

                          Executive Vice President/Managing Director/Head of
                       Equity Investments of each fund in the Delaware
   Investments Family of Funds

                  President and Director of Lincoln National
                     Convertible Securities Fund, Inc. and Lincoln
  National Income Fund, Inc.

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                    POSITIONS & OFFICES WITH DELAWARE MANAGEMENT
NAME AND PRINCIPAL          COMPANY AND ITS AFFILIATES AND OTHER                
BUSINESS ADDRESS*           POSITIONS & OFFICES HELD                            
------------------------    ----------------------------------------------------

Joseph H. Hastings          Executive Vice President/Interim Chief Financial    
                           Officer/Treasurer/Controller of Delaware Management
                      Company, Delaware Capital Management, Delaware
                          Lincoln Cash Management (each a series of Delaware
                       Management Business Trust), Delaware Management
                       Holdings, Inc., DMH Corp., Delaware Investments
                      U.S., Inc., Delaware General Management, Inc.,
                           Delaware Management Company, Inc., Delaware Service
                          Company, Inc., Delaware Management Business Trust,
                           Lincoln National Investment Companies, Inc. and LNC
           Administrative Services Corporation

                Executive Vice President/Chief Financial
                  Officer/Treasurer and Director of Delaware
Management Trust Company

                        Executive Vice President/Chief Financial Officer
                       of Retirement Financial Services, Inc. and each
                        fund in the Delaware Investments Family of Funds

                        Executive Vice President/Interim Chief Financial
                          Officer/Controller of Delaware Investment Advisers
                        (a series of Delaware Management Business Trust)

                          Executive Vice President of Delaware Distributors,
            Inc. and Delaware Distributors, L.P.

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                    POSITIONS & OFFICES WITH DELAWARE MANAGEMENT
NAME AND PRINCIPAL          COMPANY AND ITS AFFILIATES AND OTHER                
BUSINESS ADDRESS*           POSITIONS & OFFICES HELD                            
------------------------    ----------------------------------------------------

Richelle S. Maestro         Executive Vice President/General Counsel/Secretary  
                of Delaware Management Company, Delaware
                        Investment Advisers, Delaware Capital Management
                    and Delaware Lincoln Cash Management (each a
                         series of Delaware Management Business Trust) and
                       each fund in the Delaware Investments Family of
Funds                   

                          Executive Vice President/General Counsel/Secretary
                   and Director/Trustee of Delaware Management
                       Holdings, Inc., DMH Corp., Delaware Investments
                         U.S., Delaware General Management, Inc., Delaware
                           Management Company, Inc., Delaware Service Company,
                     Inc., Delaware Distributors, Inc., Retirement
                  Financial Services, Inc., Lincoln National
                         Investment Companies, Inc. and LNC Administrative
Services Corporation    

                       Senior Vice President/General Counsel/Secretary
                   and Director/Trustee of Delaware Management
                      Business Trust and Delaware Distributors, L.P.

                          Senior Vice President/General Counsel/Secretary of
         Delaware Management Trust Company

                          Vice President/General Counsel of Lincoln National
                     Convertible Securities Fund, Inc. and Lincoln
  National Income Fund, Inc.

                       General Partner of Tri-R Associates since 1989,
               10001 Sandmeyer Lane, Philadelphia, PA.

See Yeng Quek               Executive Vice President/Managing Director/Chief    
                     Investment Officer - Fixed Income of Delaware
                        Management Company, Delaware Investment Advisers
                    and Delaware Lincoln Cash Management (each a
                         series of Delaware Management Business Trust) and
                       each fund in the Delaware Investments Family of
Funds                   

                        Executive Vice President/Managing Director/Chief
             Investment Officer - Fixed Income and
                         Director/Trustee of Delaware Management Holdings,
                    Inc., Delaware Management Business Trust and
                   Lincoln National Investment Companies, Inc.

                           Director/Trustee of DHM Corp., Delaware Investments
                      U.S., Inc., Delaware Management Company, Inc.,
                         Delaware Service Company, Inc. and HYPPCO Finance
Company Ltd.            

Gerald S. Frey              Managing Director/Chief Investment Officer -        
                        Growth Investing of Delaware Management Company,
                      Delaware Investment Advisers, Delaware Capital
                        Management (each a series of Delaware Management
                      Business Trust), Delaware Management Holdings,
                         Inc., Delaware Management Business Trust, Lincoln
                          National Investments Companies, Inc. and each fund
                   in the Delaware Investments Family of Funds

Douglas L. Anderson         Senior Vice President/Operations of Delaware        
                Management Company (a series of Delaware
                    Management Business Trust), Delaware Service
                   Company, Inc., Delaware Distributors, Inc.,
                        Retirement Financial Services, Inc. and Delaware
Distributors, L.P       

                        Senior Vice President/Operations and Director of
         Delaware Management Trust Company

Robert L. Arnold            Senior Vice President/Senior Portfolio Manager of   
                        Delaware Management Company, Delaware Investment
                        Advisers and Delaware Capital Management (each a
                         series of Delaware Management Business Trust) and
                       each fund in the Delaware Investments Family of
Funds                   

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                    POSITIONS & OFFICES WITH DELAWARE MANAGEMENT
NAME AND PRINCIPAL          COMPANY AND ITS AFFILIATES AND OTHER                
BUSINESS ADDRESS*           POSITIONS & OFFICES HELD                            
------------------------    ----------------------------------------------------

Marshall T. Bassett         Senior Vice President/Portfolio Manager of          
                Delaware Management Company and Delaware
                      Investment Advisers (each a series of Delaware
  Management Business Trust)

                         Senior Vice President/Senior Portfolio Manager of
                       each fund in the Delaware Investments Family of
Funds                   

Christopher S. Beck         Senior Vice President/Senior Portfolio Manager of   
                        Delaware Management Company, Delaware Investment
                     Advisers, Delaware Capital Management (each a
                         series of Delaware Management Business Trust) and
                       each fund in the Delaware Investments Family of
Funds                   

Michael P. Bishof           Senior Vice President/Investment Accounting of      
                     Delaware Management Company, Delaware Capital
                        Management (each a series of Delaware Management
                       Business Trust), Delaware Service Company, Inc.
       and Delaware Distributors, L.P.

                  Senior Vice President/Treasurer/Investment
                     Accounting of Delaware Investment Advisers (a
                     series of Delaware Management Business Trust)

                   Senior Vice President/Manager of Investment
                     Accounting of Delaware International Advisers
Ltd.,                   

                       Senior Vice President/Treasurer of each fund in
                the Delaware Investments Family of Funds

                   Chief Financial Officer of Lincoln National
                     Convertible Securities Fund, Inc. and Lincoln
  National Income Fund, Inc.

Ryan K. Brist               Senior Vice President/Senior Portfolio Manager of   
                        Delaware Management Company, Delaware Investment
                      Advisers (each a series of Delaware Management
                     Business Trust) and each fund in the Delaware
   Investments Family of Funds

Timothy G. Connors          Senior Vice President/Chief Investment Officer -    
                       Value Investing of Delaware Management Company,
                      Delaware Investment Advisers (each a series of
                     Delaware Management Business Trust), Delaware
                      Management Holdings, Inc., Delaware Management
                    Business Trust , Lincoln National Investment
                     Companies, Inc. and each fund in the Delaware
   Investments Family of Funds

Nancy M. Crouse             Senior Vice President/Senior Portfolio Manager of   
                        Delaware Management Company, Delaware Investment
                      Advisers (each a series of Delaware Management
                     Business Trust) and each fund in the Delaware
  Investment Family of Funds

George E. Deming            Senior Vice President/Senior Portfolio Manager of   
                        Delaware Management Company, Delaware Investment
                      Advisers (each a series of Delaware Management
                     Business Trust) and each fund in the Delaware
   Investments Family of Funds

                        Director of Delaware International Advisers Ltd.

Robert J. DiBraccio         Senior Vice President/Head of Equity Trading of     
                        Delaware Management Company, Delaware Investment
                        Advisers and Delaware Capital Management (each a
                     series of Delaware Management Business Trust)

John B. Fields              Senior Vice President/Senior Portfolio Manager of   
                        Delaware Management Company, Delaware Investment
                      Advisers (each a series of Delaware Management
                     Business Trust) and each fund in the Delaware
   Investments Family of Funds

                     Trustee of Delaware Management Business Trust

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                    POSITIONS & OFFICES WITH DELAWARE MANAGEMENT
NAME AND PRINCIPAL          COMPANY AND ITS AFFILIATES AND OTHER                
BUSINESS ADDRESS*           POSITIONS & OFFICES HELD                            
------------------------    ----------------------------------------------------

Carolyn McIntyre(1)         Senior Vice President/Human Resources of Delaware   
                         Management Company, Delaware Investment Advisers,
                          Delaware Capital Management, Delaware Lincoln Cash
                        Management (each a series of Delaware Management
                      Business Trust), Delaware Management Holdings,
                    Inc., DMH Corp., DIAL Holding Company, Inc.,
                   Delaware General Management, Inc., Delaware
                      Management Business Trust and Lincoln National
  Investment Companies, Inc.

Susan L. Natalini           Senior Vice President/Global Marketing & Client     
                   Services of Delaware Management Company and
                      Delaware Investment Advisers (each a series of
           Delaware Management Business Trust)

Francis X. Morris           Director - Fundamental Research/Senior Portfolio    
                        Manager of Delaware Management Company (a series
              of Delaware Management Business Trust)

                         Senior Vice President/Senior Portfolio Manager of
                          Delaware Investment Advisers (a series of Delaware
                       Management Business Trust) and each fund in the
            Delaware Investments Family of Funds

                  Vice President/Senior Portfolio Manager of
         Delaware General Management, Inc.

                        Vice President/Senior Equity Analyst of Delaware
                Capital Management (a series of Delaware
  Management Business Trust)

John J. O'Connor            Senior Vice President/Investment Accounting of      
                         Delaware Management Company (a series of Delaware
                       Management Business Trust) and Delaware Service
Company, Inc.           

        Senior Vice President/Investment
                  Accounting/Assistant Treasurer of Delaware
                 Investment Advisers (a series of Delaware
  Management Business Trust)

                         Senior Vice President/Assistant Treasurer of each
                        fund in the Delaware Investments Family of Funds

Philip R Perkins(2)         Senior Vice President/Senior Portfolio Manager of   
                Delaware Management Company and Delaware
                     Investment Adviser (each a series of Delaware
  Management Business Trust)

Timothy L. Rabe             Senior Vice President/Senior Portfolio Manager of   
                        Delaware Management Company, Delaware Investment
                      Advisers (each a series of Delaware Management
                     Business Trust) and each fund in the Delaware
   Investments Family of Funds

Paul M. Ross                Senior Vice President/Global Marketing & Client     
                   Services of Delaware Management Company and
                      Delaware Investment Advisers (each a series of
           Delaware Management Business Trust)

James L. Shields            Senior Vice President/Chief Information Officer of  
                        Delaware Management Company, Delaware Investment
                     Advisers, Delaware Capital Management (each a
                      series of Delaware Management Business Trust),
                  Delaware Service Company, Inc., Retirement
             Financial Services, Inc. and Delaware
Distributors, L.P.      

Ward W. Tatge               Senior Vice President/Director of Fixed Income      
                         Research of Delaware Management Company, Delaware
                      Investment Advisers (each a series of Delaware
                       Management Business Trust) and each fund in the
            Delaware Investments Family of Funds

Gary T. Abrams              Vice President/Equity Trader of Delaware            
                  Management Company and Delaware Investment
                      Advisers (each a series of Delaware Management
Business Trust)         

Christopher S. Adams        Vice President/Portfolio Manager/Senior Equity      
                        Analyst of Delaware Management Company (a series
                       of Delaware Management Business Trust) and each
                        fund in the Delaware Investments Family of Funds

                          Vice President/Senior Equity Analyst I of Delaware
                 Investment Advisers (a series of Delaware
  Management Business Trust)

Renee E. Anderson           Vice President/Portfolio Manager/Senior Equity      
                    Analyst II of Delaware Management Company (a
                         series of Delaware Management Business Trust) and
                       each fund in the Delaware Investments Family of
Funds                   

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                    POSITIONS & OFFICES WITH DELAWARE MANAGEMENT
NAME AND PRINCIPAL          COMPANY AND ITS AFFILIATES AND OTHER                
BUSINESS ADDRESS*           POSITIONS & OFFICES HELD                            
------------------------    ----------------------------------------------------

Damon J. Andres             Vice President/Senior Fixed Income Portfolio        
                          Manager I of Delaware Management Company (a series
              of Delaware Management Business Trust)

                       Vice President/Senior Portfolio Manager of each
                        fund in the Delaware Investments Family of Funds

                    Vice President/Portfolio Manager of Delaware
                 Investment Advisers (a series of Delaware
  Management Business Trust)

                      Vice President of Lincoln National Convertible
Securities Fund, Inc.   

Joseph R. Baxter            Vice President/Portfolio Manager of Delaware        
                        Management Company, Delaware Investment Advisers
                      (each a series of Delaware Management Business
                        Trust) and each fund in the Delaware Investments
Family of Funds         

Richard E. Biester          Vice President/Equity Trader of Delaware            
                  Management Company and Delaware Investment
                      Advisers (each a series of Delaware Management
Business Trust)         

Vincent A. Brancaccio       Vice President/Senior Equity Trader of Delaware     
                  Management Company and Delaware Investment
                      Advisers (each a series of Delaware Management
Business Trust)         

Michael P. Buckley          Vice President/Portfolio Manager/Director of        
                         Municipal Research of Delaware Management Company
                          and Delaware Investment Advisers (each a series of
           Delaware Management Business Trust)

                         Vice President/Portfolio Manager/Senior Municipal
                 Bond Analyst of each fund in the Delaware
   Investments Family of Funds

MaryEllen M. Carrozza       Vice President/Client Services of Delaware          
                        Management Company, Delaware Investment Advisers
                      (each a series of Delaware Management Business
                          Trust), Delaware General Management, Inc. and each
                        fund in the Delaware Investments Family of Funds

Stephen R. Cianci           Senior Vice President/Senior Portfolio Manager of   
                        Delaware Management Company, Delaware Investment
                      Advisers (each a series of Delaware Management
                     Business Trust) and each fund in the Delaware
   Investments Family of Funds

                    Vice President/Portfolio Manager of Delaware
                Capital Management (a series of Delaware
  Management Business Trust)

David F. Connor             Vice President/Deputy General Counsel/Assistant     
                          Secretary of Delaware Management Company, Delaware
                         Investment Advisers, Delaware Capital Management,
                          Delaware Lincoln Cash Management (each a series of
                     Delaware Management Business Trust), Delaware
                          Management Holdings, Inc., DMH Corp., DIAL Holding
                       Company, Inc., Delaware Investments U.S., Inc.,
                   Delaware Management Company, Inc., Delaware
                          Service Company, Inc., Delaware Distributors, Inc.
                     Retirement Financial Services, Inc., Delaware
                     Management Trust Company, Delaware Management
                    Business Trust, Delaware Distributors, L.P.,
                        Lincoln National Investment Companies, Inc., LNC
                         Administrative Services Corporation and each fund
                   in the Delaware Investments Family of Funds

                 Secretary of Lincoln National Convertible
                         Securities Fund, Inc. and Lincoln National Income
Fund, Inc.              

Joseph F. DeMichele         Vice President/High Grade Trading of Delaware       
                Management Company (a series of Delaware
  Management Business Trust)

                   Vice President/Senior High Grade Trading of
                          Delaware Investment Advisers (a series of Delaware
  Management Business Trust)

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                    POSITIONS & OFFICES WITH DELAWARE MANAGEMENT
NAME AND PRINCIPAL          COMPANY AND ITS AFFILIATES AND OTHER                
BUSINESS ADDRESS*           POSITIONS & OFFICES HELD                            
------------------------    ----------------------------------------------------

Joel A. Ettinger            Vice President/Taxation of Delaware Management      
                       Company, Delaware Investment Advisers, Delaware
                 Capital Management, Delaware Lincoln Cash
                        Management (each a series of Delaware Management
                      Business Trust), Delaware Management Holdings,
                    Inc., DMH Corp., DIAL Holding Company, Inc.,
                   Delaware General Management, Inc., Delaware
                  Management Company, Inc., Delaware Service
                  Company, Inc., Delaware Distributors, Inc.
                     Retirement Financial Services, Inc., Delaware
                         Management Business Trust, Delaware Distributors,
                          L.P., Lincoln National Investment Companies, Inc.,
                        LNC Administrative Services Corporation and each
                        fund in the Delaware Investments Family of Funds

Phoebe W. Figland           Vice President/Investment Accounting of Delaware    
                Management Company (a series of Delaware
                    Management Business Trust), Delaware Service
                   Company, Inc. and each fund in the Delaware
   Investments Family of Funds

Joseph Fiorilla             Vice President/Trading Operations of Delaware       
                  Management Company and Delaware Investment
                      Advisers (each a series of Delaware Management
Business Trust)         

Charles E. Fish             Vice President/Senior Equity Trader of Delaware     
                  Management Company and Delaware Investment
                      Advisers (each a series of Delaware Management
Business Trust)         

Clifford M. Fisher(3)       Vice President/Senior Bond Trader of Delaware       
                  Management Company and Delaware Investment
                      Advisers (each a series of Delaware Management
Business Trust)         

Denise A. Franchetti        Vice President/Portfolio Manager/Municipal Bond     
                      Credit Analyst of Delaware Management Company,
                      Delaware Investment Advisers (each a series of
                         Delaware Management Business Trust) and each fund
                   in the Delaware Investments Family of Funds

Brian Funk                  Vice President/High Yield Analyst of Delaware       
                        Management Company, Delaware Investment Advisers
                      (each a series of Delaware Management Business
                        Trust) and each fund in the Delaware Investments
Family of Funds         

James A. Furgele            Vice President/Investment Accounting of Delaware    
                        Management Company, Delaware Investment Advisers
                      (each a series of Delaware Management Business
                       Trust), Delaware Service Company, Inc. and each
                        fund in the Delaware Investments Family of Funds

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Brent C. Garrells           Vice President/ High Yield Analyst of Delaware      
                        Management Company, Delaware Investment Advisers
                      (each a series of Delaware Management Business
                        Trust) and each fund in the Delaware Investments
Family of Funds         

Daniel V. Geatens           Vice President/Investment Accounting of Delaware    
                Management Company (a series of Delaware
                    Management Business Trust), Delaware Service
                   Company, Inc. and each fund in the Delaware
   Investments Family of Funds

Stuart M. George            Vice President/Equity Trader of Delaware            
                  Management Company and Delaware Investment
                      Advisers (each a series of Delaware Management
Business Trust)         

Barry Gladstein             Vice President/Portfolio Analyst of Delaware        
                  Management Company and Delaware Investment
                          Advisers (a series of Delaware Management Business
Trust)                  

                         Vice President/Equity Analyst of Delaware Capital
                   Management (a series of Delaware Management
                     Business Trust) and each fund in the Delaware
   Investments Family of Funds

Paul Grillo                 Vice President/Senior Portfolio Manager of          
                        Delaware Management Company, Delaware Investment
                      Advisers (each a series of Delaware Management
                     Business Trust) and each fund in the Delaware
   Investments Family of Funds

                    Vice President/Portfolio Manager of Delaware
                Capital Management (a series of Delaware
  Management Business Trust)

Brian T. Hannon             Vice President/Equity Analyst of Delaware           
                        Management Company, Delaware Investment Advisers
                      (each a series of Delaware Management Business
                        Trust) and each fund in the Delaware Investments
Family of Funds         

Jonathan Hatcher(4)         Vice President/Senior High Yield Trader of          
                         Delaware Management Company (a series of Delaware
  Management Business Trust)

                    Vice President/Senior High Yield Analysis of
                          Delaware Investment Advisers (a series of Delaware
  Management Business Trust)

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                    POSITIONS & OFFICES WITH DELAWARE MANAGEMENT
NAME AND PRINCIPAL          COMPANY AND ITS AFFILIATES AND OTHER                
BUSINESS ADDRESS*           POSITIONS & OFFICES HELD                            
------------------------    ----------------------------------------------------

Jeffrey W. Hynoski          Vice President/Portfolio Manager of Delaware        
                        Management Company, Delaware Investment Advisers
                      (each a series of Delaware Management Business
                        Trust) and each fund in the Delaware Investments
Family of Funds         

Cynthia Isom                Vice President/Portfolio Manager of Delaware        
                        Management Company, Delaware Investment Advisers
                      (each a series of Delaware Management Business
                        Trust) and each fund in the Delaware Investments
Family of Funds         

Kenneth R. Jackson          Vice President/Equity Analyst of Delaware           
                        Management Company, Delaware Investment Advisers
                      (each a series of Delaware Management Business
                        Trust) and each fund in the Delaware Investments
Family of Funds         

Steven T. Lampe             Vice President/Portfolio Manager of Delaware        
                         Management Company, Delaware Investment Advisers,
                     Delaware Capital Management (each a series of
                         Delaware Management Business Trust) and each fund
                   in the Delaware Investments Family of Funds

Kevin S. Lee                Vice President/Assistant Controller of Delaware     
                         Management Company, Delaware Investment Advisers,
                          Delaware Capital Management, Delaware Lincoln Cash
                        Management (each a series of Delaware Management
                      Business Trust), Delaware Management Holdings,
                    Inc., DMH Corp., DIAL Holding Company, Inc.,
                         Delaware Investments U.S., Inc., Delaware General
                      Management, Inc., Delaware Management Company,
                      Inc., Delaware Service Company, Inc., Delaware
                         Distributors, Inc. Retirement Financial Services,
                         Inc., Delaware Management Trust Company, Delaware
                         Management Business Trust, Delaware Distributors,
                          L.P., Lincoln National Investment Companies, Inc.,
                       LNC Administrative Services Corporation and LNC
           Administrative Services Corporation

Andrew M. McCullagh, Jr.    Vice President/Senior Portfolio Manager of          
                        Delaware Management Company, Delaware Investment
                      Advisers (each a series of Delaware Management
                     Business Trust) and each fund in the Delaware
   Investments Family of Funds

Michael S. Morris           Vice President/Portfolio Manager of Delaware        
                  Management Company and Delaware Investment
                      Advisers (each a series of Delaware Management
Business Trust)         

                         Vice President/Senior Equity Analyst of each fund
                   in the Delaware Investments Family of Funds

John R. Murray              Vice President/Senior Equity Analyst of Delaware    
                Management Company (a series of Delaware
  Management Business Trust)

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Brian L. Murray. Jr.(5)     SeniorVice President/Chief Compliance Officer of    
                        Delaware Management Company, Delaware Investment
                     Advisers, Delaware Capital Management (each a
                      series of Delaware Management Business Trust),
                Delaware Service Company, Inc., Delaware
                          Distributors, Inc., Retirement Financial Services,
                          Inc., Delaware Management Business Trust, Delaware
                         Distributors, L.P., and each fund in the Delaware
   Investments Family of Funds

David P. O'Connor           Vice President/Associate General Counsel/Assistant  
                          Secretary of Delaware Management Company, Delaware
                         Investment Advisers, Delaware Capital Management,
                          Delaware Lincoln Cash Management (each a series of
                     Delaware Management Business Trust), Delaware
                          Management Holdings, Inc., DMH Corp., DIAL Holding
                       Company, Inc., Delaware Investments U.S., Inc.,
                   Delaware General Management, Inc., Delaware
                  Management Company, Inc., Delaware Service
                  Company, Inc., Delaware Distributors, Inc.
                     Retirement Financial Services, Inc., Delaware
                         Management Business Trust, Delaware Distributors,
                          L.P., Lincoln National Investment Companies, Inc.,
                        LNC Administrative Services Corporation and each
                        fund in the Delaware Investments Family of Funds

Philip O. Obazee(6)         Vice President/Derivatives Manager of Delaware      
                        Management Company, Delaware Investment Advisers
                      (each a series of Delaware Management Business
                        Trust) and each fund in the Delaware Investments
Family of Funds         

Donald G. Padilla           Vice President/Equity Analyst II of Delaware        
                  Management Company and Delaware Investment
                      Advisers (each a series of Delaware Management
Business Trust)         

                         Vice President/Equity Analyst of each fund in the
            Delaware Investments Family of Funds

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                    POSITIONS & OFFICES WITH DELAWARE MANAGEMENT
NAME AND PRINCIPAL          COMPANY AND ITS AFFILIATES AND OTHER                
BUSINESS ADDRESS*           POSITIONS & OFFICES HELD                            
------------------------    ----------------------------------------------------

Richard Salus               Vice President/Deputy Controller of Delaware        
                         Management Company, Delaware Investment Advisers,
                          Delaware Capital Management, Delaware Lincoln Cash
                        Management (each a series of Delaware Management
                      Business Trust), Delaware Management Holdings,
                    Inc., DMH Corp., DIAL Holding Company, Inc.,
                         Delaware Investments U.S., Inc., Delaware General
                      Management, Inc., Delaware Management Company,
                          Inc., Lincoln National Investment Companies, Inc.,
                       LNC Administrative Services Corporation and LNC
           Administrative Services Corporation

                       Vice President/Assistant Controller of Delaware
                     International Holdings Ltd., Delaware Service
                   Company, Inc., Delaware Distributors, Inc.,
                     Retirement Financial Services, Inc., Delaware
                     Management Trust Company, Delaware Management
                      Business Trust and Delaware Distributors, L.P.

Kevin C. Schildt            Vice President/Senior Municipal Credit Analyst of   
                Delaware Management Company and Delaware
                      Investment Advisers (each a series of Delaware
  Management Business Trust)

                      Vice President/Senior Research Analyst of each
                        fund in the Delaware Investments Family of Funds

Richard D. Seidel           Vice President/Assistant Controller/Manager -       
                        Payroll of Delaware Management Company, Delaware
                  Investment Advisers, Delaware Lincoln Cash
                        Management (each a series of Delaware Management
                    Business Trust), Delaware Investments, U.S.,
                   Delaware General Management, Inc., Delaware
                        Management Company, Inc., Delaware Distributors,
                  Inc., Retirement Financial Services, Inc.,
                   Delaware Management Business Trust, Lincoln
                         Investment Companies, Inc. and LNC Administrative
Services Corporation    

                      Vice President/Assistant Treasurer of Delaware
                Capital Management (a series of Delaware
                       Management Business Trust), Delaware Management
                        Holdings, Inc., DHM Corp., DIAL Holding Company,
                         Inc., Delaware Service Company, Inc. and Delaware
Distributors, L.P.      

Brenda L. Sprigman          Vice President/Business Manager - Fixed Income of   
                Delaware Management Company and Delaware
                      Investment Advisers (each a series of Delaware
  Management Business Trust)

Matthew J. Stephens         Vice President/Senior High Grade Analyst of         
                        Delaware Management Company, Delaware Investment
                      Advisers (each a series of Delaware Management
                     Business Trust) and each fund in the Delaware
   Investments Family of Funds

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Michael T. Taggart          Vice President/Facilities & Administrative          
                         Services of Delaware Management Company, Delaware
                      Investment Advisers (each a series of Delaware
                    Management Business Trust), Delaware Service
                      Company, Inc., Delaware Distributors, Inc. and
   Delaware Distributors, L.P.

Lori P. Wachs               Vice President/Portfolio Manager of Delaware        
                        Management Company, Delaware Investment Advisers
                      (each a series of Delaware Management Business
                        Trust) and each fund in the Delaware Investments
Family of Funds         

Laura Wagner                Vice President/Investment Accounting of Delaware    
                Management Company (a series of Delaware
                    Management Business Trust), Delaware Service
                   Company, Inc. and each fund in the Delaware
   Investments Family of Funds

Chris Welker                Vice President/Senior High Grade Trader of          
                Delaware Management Company and Delaware
                      Investment Advisers (each a series of Delaware
  Management Business Trust)

James J. Wright             Vice President/Senior Equity Analyst of Delaware    
                        Management Company, Delaware Investment Advisers
                      (each a series of Delaware Management Business
                        Trust) and each fund in the Delaware Investments
Family of Funds         

(1) HEAD OF HUMAN RESOURCES, Lincoln Life, 2001-2003.                           
(2) MANAGING DIRECTOR/GLOBAL MARKETS, Deutsche Bank, 1998-2003.                 
(3) VICE PRESIDENT/MUNICIPAL BOND, Advest, Inc., 1999-2002.                     
(4) SENIOR RESEARCH ANALYST, Strong Capital Management, 2000-2002.              
(5) ASSOCIATE CORPORATE COUNSEL, Franklin Templeton Investments, 1998-2002.     
(6) VICE PRESIDENT/QUANTITATIVE RESEARCH GROUP, First Union Capital Markets     
Corporation, 1998-2001.                                                 

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Item 26.        Principal Underwriters.                                         

      (a)(1) Delaware Distributors, L.P. serves as principal
                underwriter for all the mutual funds in the Delaware Investments
Family of Funds.                                

             (b)(1) Information with respect to each officer or partner of
               the principal underwriter and the Registrant is provided below.
        Unless noted, the principal business address of Delaware
Distributors, L.P. is                           

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2005 Market Street, Philadelphia, PA 19103-7094.

                                                        [Enlarge/Download Table]


NAME & PRINCIPAL BUSINESS                                                                                      
ADDRESS                       POSITIONS & OFFICES WITH UNDERWRITER     POSITIONS & OFFICES WITH REGISTRANT     
----------------------------  ---------------------------------------  ----------------------------------------

                                                                                                               
Delaware Distributors, Inc.   General Partner                          None                                    

Delaware Capital Management   Limited Partner                          None                                    

Delaware Investment Advisers  Limited Partner                          None                                    

Kevin J. Lucey                President/Chief Executive Officer        None                                    

Joseph H. Hastings            Executive Vice President                 Executive Vice President/Chief          
                                                                       Financial Officer                       

Joanne O. Hutcheson           Executive Vice President                 None                                    

Richelle S. Maestro           Executive Vice President/General         Executive Vice President/General        
                              Counsel/ Secretary                       Counsel/ Secretary (Chief Legal Officer)

Philip N. Russo               Executive Vice President/Chief           None                                    
                              Financial Officer                                                                

Diane M. Anderson             Senior Vice President/Retirement         None                                    
                              Operations                                                                       

Douglas L. Anderson           Senior Vice President/Operations         None                                    

Michael P. Bishof             Senior Vice President/Investment         Senior Vice President/Treasurer         
                              Accounting                                                                       

Thomas M. McConnell           Senior Vice President/Senior 529 Plans   None                                    
                              Product Manager                                                                  

Carolyn McIntyre              Senior Vice President/Human Resources    None                                    

Daniel J. Perullo             Senior Vice President/Eastern Director,  None                                    
                              Institutional Sales                                                              

Robert E. Powers              Senior Vice President/Senior Domestic    None                                    
                              Sales Manager                                                                    

James L. Shields              Senior Vice President/Chief Information  None                                    
                              Officer                                                                          

Trevor M. Blum                Vice President/Senior Consulting         None                                    
                              Relationship Manager                                                             

Elisa C. Colkitt              Vice President/Broker Dealer Operations  None                                    
                              & Service Support                                                                

David F. Connor               Vice President/Deputy General            Vice President/Deputy General           
                              Counsel/Assistant Secretary              Counsel/Assistant Secretary             

Joel A. Ettinger              Vice President/Taxation                  Vice President/Taxation                 

Susan T. Friestedt            Vice President/Retirement Services       None                                    

Edward M. Grant               Vice President/Defined Contribution      None                                    
                              Sales Manager                                                                    

Jeffrey M. Kellogg            Vice President/Senior Product            None                                    
                              Manager/Communications Manager                                                   

Kevin S. Lee                  Vice President/Assistant Controller      None                                    

Brian L. Murray, Jr.          Senior Vice President/Chief Compliance   Senior Vice President/Chief Compliance  
                              Officer                                  Officer                                 

David P. O'Connor             Vice President/Associate General         Vice President/Associate General        
                              Counsel/Assistant Secretary              Counsel/Assistant Secretary             

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                                                        [Enlarge/Download Table]


NAME & PRINCIPAL BUSINESS                                                                                      
ADDRESS                       POSITIONS & OFFICES WITH UNDERWRITER     POSITIONS & OFFICES WITH REGISTRANT     
----------------------------  ---------------------------------------  ----------------------------------------

                                                                                                               
Robinder Pal                  Vice President/Senior Retail e-Business  None                                    
                              / Production Services Manager                                                    

Richard Salus                 Vice President/Deputy Controller         None                                    

Richard D. Seidel             Vice President/Assistant Treasurer       None                                    

Theresa L. Sabol              Vice President/Defined Contribution      None                                    
                              Sales Manager                                                                    

Michael T. Taggart            Vice President/Facilities &              None                                    
                              Administrative Services                                                          

        (a)(2)  Lincoln Financial Distributors, Inc. ("LFD") serves as financial
                intermediary wholesaler for all the mutual funds in the Delaware
Investments Family of Funds.                    

      (b)(2)  Information with respect to each officer or partner of LFD and
             the Registrant is provided below. Unless noted, the principal
               business address of LFD is 2001 Market Street, Philadelphia, PA
19103-7055.                                     

                                                        [Enlarge/Download Table]

NAME & PRINCIPAL BUSINESS                                                                                 
ADDRESS                       POSITIONS & OFFICE WITH LFD              POSITIONS & OFFICES WITH REGISTRANT
----------------------------  ---------------------------------------  -----------------------------------
                                                                                                          
Westley V. Thompson           President/Chief Executive Officer and    None                               
                              Director                                                                    

David M. Kittredge            Senior Vice President and Director       None                               

Terrance Mullen               Senior Vice President                    None                               

Donald Roberson               Senior Vice President                    None                               

Margaret Skinner              Senior Vice President                    None                               

Patrick J. Caulfield(1)       Vice President/Chief Compliance Officer  None                               

Frederick J. Crawford(2)      Vice President/Treasurer                 None                               

Daniel P. Hickey(2)           Vice President                           None                               

Rochelle Krombolz             Vice President                           None                               

William Lamoin                Vice President                           None                               

Gregory Smith                 Vice President                           None                               

Michael S. Smith              Vice President, Chief Financial Officer  None                               
                              and Chief Administrative Officer                                            

Joyce L. Byrer(3)             Secretary                                None                               

(1) 350 Church Street, Hartford, CT 06103                                       
(2) 1500 Market Street, Philadelphia, PA 19103.                                 
(3) 1300 Clinton Street, Fort Wayne, IN 46802                                   

(c)     Not Applicable.                                         

Item 27.  Location of Accounts and Records.                                     

     All accounts and record are maintained in Philadelphia at 2005 Market
Street, Philadelphia, PA 19103.                                                 

Item 28.  Management Services. None.                                            

Item 29.  Undertakings. Inapplicable.                                           

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment   
Company Act of 1940, this Registrant certifies that it meets all the            
requirements for effectiveness of this Registration Statement pursuant to Rule  
485(b) under the Securities Act of 1933 and has duly caused this Registration   
Statement to be signed on its behalf by the undersigned, thereunto duly         
authorized, in this City of Philadelphia and Commonwealth of Pennsylvania on    
this 24th day of February, 2005.                                                

                                                    DELAWARE GROUP ADVISER FUNDS

                                             By   Jude T. Driscoll
                                                         -----------------------
                                                  Jude T. Driscoll
                                                     President

Pursuant to the requirements of the Securities Act of 1933, this Registration   
Statement has been signed below by the following persons in the capacities and  
on the dates indicated:                                                         

                                                        [Enlarge/Download Table]

   Signature                              Title                           Date        
---------------------------  --------------------------------------  -----------------

                                                                                      
Jude T. Driscoll             Chairman (Principal Executive Officer)  February 24, 2005
---------------------------  and Trustee                                              
Jude T. Driscoll                                                                      

                          *  Trustee                                 February 24, 2005
---------------------------                                                           

Walter P. Babich                                                                      

                          *  Trustee                                 February 24, 2005
---------------------------                                                           
John H. Durham                                                                        

                          *  Trustee                                 February 24, 2005
---------------------------                                                           
John A. Fry                                                                           

                          *  Trustee                                 February 24, 2005
---------------------------                                                           
Anthony D. Knerr                                                                      

                          *  Trustee                                 February 24, 2005
---------------------------                                                           
Ann R. Leven                                                                          

                          *  Trustee                                 February 24, 2005
---------------------------                                                           
Thomas F. Madison                                                                     

                          *  Trustee                                 February 24, 2005
---------------------------                                                           
Janet L. Yeomans                                                                      

          *By     Jude T. Driscoll
                  ----------------
                  Jude T. Driscoll
                 as Attorney-in-Fact for
                 each of the persons indicated

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 INDEX TO EXHIBITS

Exhibit No.     Exhibit                                                         
-----------     ----------------------------------------------------------------
EX-99.J         Consent and Report of Auditors                                  

EX-99.P1        Codes of Ethics for Delaware Investments Family of Funds        
(December 2004)                                 

EX-99.P2        Codes of Ethics for Delaware Management Company, a series of    
              Delaware Management Business Trust, and Delaware Distributors,
L.P. (December 2004)                            

EX-99.Q         Trustees' Power of Attorney (February 17, 2005)                 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘485BPOS’ Filing		Date		First		Last			Other Filings
		12/31/08		213		214
		2/28/06		8		130			485BPOS
Filed on / Effective on:		2/25/05		1		155
		2/24/05		255
		2/17/05		221		256
		1/31/05		217					N-Q
		12/31/04		7		215
		12/27/04		237		239			485APOS
		12/1/04		238
		11/30/04		217
		10/31/04		173		230			24F-2NT,  N-CSR,  N-CSR/A,  NSAR-B
		10/30/04		72
		9/1/04		22		72
		8/31/04		214
		6/30/04		6		52			N-PX
		2/29/04		226
		12/31/03		223
		12/30/03		236		237			485BPOS,  NSAR-B
		10/31/03		42		216			24F-2NT,  N-CSR,  NSAR-B
		8/21/03		216		237
		7/17/03		237
		6/30/03		6		52			NSAR-A
		6/2/03		7		93
		6/1/03		28		230
		5/28/03		213
		5/15/03		219
		5/6/03		214
		5/1/03		238
		4/30/03		238					485BPOS,  N-30D,  N-CSR,  NSAR-A
		1/1/03		214
		12/31/02		52		238			485BPOS
		11/18/02		175					497
		10/31/02		40		216			24F-2NT,  N-30D,  NSAR-B
		10/28/02		6		225			497
		10/25/02		52		53
		10/1/02		237
		8/23/02		238
		6/28/02		215		238			485BPOS
		5/16/02		238
		1/1/02		52
		12/28/01		238					485BPOS,  N-30D
		11/1/01		40
		7/1/01		237
		4/19/01		217		238
		3/31/01		92		129
		2/28/01		236		237
		1/1/00		53
		12/31/99		92		129
		11/23/99		215		236			485BPOS,  N-8A/A
		11/22/99		236		239			485BPOS
		8/16/99		230
		12/22/98		237
		12/17/98		236
		11/2/98		175
		7/1/98		206					497
		1/1/98		199
		12/31/97		7		197
		12/29/97		53		225
		12/23/97		237					24F-2NT,  485APOS
		9/19/97		229					PRES14A
		9/1/97		194
		7/17/97		229
		5/1/97		187
		2/27/97		237		238			485BPOS
		1/1/97		199
		12/31/96		199					N-30D
		11/1/96		195					497
		8/19/96		238
		5/6/96		175		230
		5/3/96		229		230			DEF 14A,  PRES14A
		5/1/96		237
		4/26/96		229
		2/23/96		229
		5/23/94		93
		3/29/94		93
		12/3/93		93
		11/29/93		230
		8/10/93		225
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