Retailers Help Propel Delaware Fund; Change Boosts Returns; American Services gets help from broader team; favoring Nordstrom's.(MUTUAL FUNDS)(MUTUAL FUND PROFILE)

Byline: JANET PURDY LEVAUX

After moving to change Delaware American Services Fund's sector weightings and some holdings in the first half of 2005, the fund's portfolio managers are seeing the fruits of their labor.

The fund's 4.29% gain for the past three months put it ahead of the broad market's 3.26%, though it was still trailing the 5.15% from the fund's mid-cap growth peers tracked by Morningstar.

For the year going into Wednesday, the fund was down 1.14% vs. a 3.21% gain for mid-cap growth funds tracked by Morningstar and a 0.73% gain for the S&P 500.

For the past five years, the fund has delivered an average annual return of 13.31% vs. -5.53% for its peers and -2.72% for the S&P 500.

Another contributing factor to results: Fund manager Marshall Bassett's decision to have Delaware Investments' analysts and portfolio managers -- who specialize by industry -- work more on different funds. Bassett also serves as chief investment officer of Delaware Investments' emerging growth team.

"He opened management of the Delaware American Services up to the whole Delaware group," co-manager Barry Gladstein said.