[LOGO]
VOYAGEUR
YOUR TAX SENSITIVE INVESTMENT MANAGER
MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
MINNESOTA TAX FREE FUND
MINNESOTA INSURED FUND
MINNESOTA LIMITED TERM TAX FREE FUND
SEMI-ANNUAL REPORT
DATED JUNE 30, 1996
Voyageur offers a family of mutual funds, each with an individual objective
stated in its prospectus. Investment objectives of the funds range from high
current income to long-term capital appreciation. Exchange privileges allow you
to change your investment between Voyageur Funds as your objectives or market
conditions change.
VOYAGEUR HIGH YIELD FUNDS seek high current income free from both Federal income
taxes and state income taxes (where applicable). The Funds invest in medium and
lower grade municipal bonds.
Voyageur MINNESOTA High Yield Municipal Bond Fund
VOYAGEUR TAX FREE FUNDS seek high current income free from both Federal income
taxes and state income taxes (where applicable). The Funds invest in investment
grade municipal bonds.
<TABLE>
<S> <C>
Voyageur ARIZONA Tax Free Fund Voyageur MINNESOTA Tax Free Fund
Voyageur CALIFORNIA Tax Free Fund Voyageur NATIONAL Tax Free Fund
Voyageur COLORADO Tax Free Fund Voyageur NEW MEXICO Tax Free Fund
Voyageur FLORIDA Tax Free Fund Voyageur NORTH DAKOTA Tax Free Fund
Voyageur IDAHO Tax Free Fund Voyageur UTAH Tax Free Fund
Voyageur IOWA Tax Free Fund Voyageur WISCONSIN Tax Free Fund
Voyageur KANSAS Tax Free Fund
</TABLE>
VOYAGEUR INSURED TAX FREE FUNDS seek high current income free from both Federal
income taxes and state income taxes (where applicable) with the added safety of
an insured portfolio. The Funds invest in insured municipal bonds.
<TABLE>
<S> <C>
Voyageur ARIZONA Insured Tax Free Fund Voyageur MISSOURI Insured Tax Free Fund
Voyageur CALIFORNIA Insured Tax Free Fund Voyageur NATIONAL Insured Tax Free Fund
Voyageur FLORIDA Insured Tax Free Fund Voyageur OREGON Insured Tax Free Fund
Voyageur MINNESOTA Insured Fund Voyageur WASHINGTON Insured Tax Free Fund
</TABLE>
VOYAGEUR LIMITED TERM FUNDS seek to preserve original investment principal while
providing income free from both Federal income taxes and state income taxes
(where applicable). The Funds invest in intermediate term investment grade
municipal bonds.
<TABLE>
<S> <C>
Voyageur FLORIDA Limited Term Tax Free Fund Voyageur NATIONAL Limited Term Tax Free Fund
Voyageur MINNESOTA Limited Term Tax Free Fund
</TABLE>
VOYAGEUR EQUITY FUNDS seek long term capital appreciation by investing in common
stocks.
<TABLE>
<S> <C>
Voyageur AGGRESSIVE GROWTH Fund Voyageur GROWTH Stock Fund
Voyageur GROWTH AND INCOME Fund Voyageur INTERNATIONAL Equity Fund
</TABLE>
VOYAGEUR INCOME FUNDS seek high current income from investments issued,
guaranteed or otherwise backed by the full faith and credit of the U.S.
Government.
Voyageur U.S. GOVERNMENT SECURITIES Fund
VOYAGEUR CASH TRUST SERIES MONEY MARKET FUNDS seek high current income,
principal protection and liquidity by investing in money market instruments.
<TABLE>
<S> <C>
Voyageur CALIFORNIA MUNICIPAL CASH Series Voyageur MUNICIPAL CASH Series
Voyageur FLORIDA MUNICIPAL CASH Series Voyageur OHIO MUNICIPAL CASH Series
Voyageur GOVERNMENT CASH Series Voyageur PRIME CASH Series
Voyageur MINNESOTA MUNICIPAL CASH Series Voyageur TREASURY CASH Series
</TABLE>
For more complete information regarding the investment objectives, fees and
expenses of the Funds, please obtain a prospectus from your Investment
Representative or from Voyageur, 90 South Seventh Street, Suite 4400,
Minneapolis, MN 55402-4115; (612) 376-7044 (local); 800-525-6584 (MKTG).
LETTER FROM THE PRESIDENT
[PHOTO] JOHN G. TAFT
PRESIDENT
Dear Shareholder:
Since our last report, the headline story in the municipal bond market has been
the demise of a radical tax reform. One of the best ways to illustrate this
demise is to look at how municipal bonds have traded in relation to Treasury
securities. At the height of the tax reform scare -- when Steve Forbes was
campaigning on his Flat Tax platform in January 1996 -- long municipal
securities were trading at a very cheap 90% of Treasuries. At the time of this
report, market fears have abated and municipal bonds are trading at a more
traditional 81%.
We believe the issue of reforming the tax code is far from thoroughly closed.
And it is likely -- in this a U.S. presidential election year -- that we may see
renewed discussions about less radical tax reforms. However, as is often the
case in the financial markets, we believe these times of short-term volatility
and uncertainty represent good opportunities for long-term investors.
At Voyageur, we continue to stress the importance of maintaining a long-term
view -- in both the investment horizons of our shareholders and in our approach
to purchasing securities for the Voyageur Tax Free Funds. In order to select the
best long-term securities for the funds, we favor purchasing negotiated new
municipal issues over those in the secondary or competitive market.
Unlike the taxable bond market where the structure of new bond issues are
frequently predetermined and fixed, we have more flexibility and negotiating
power in determining how a municipal bond issue will be structured. In many
cases, our credit research analysts -- who are experienced experts in the area
of municipal bond transactions -- work closely with municipal bond issuers to
determine the appropriate structure for new bond issues. Our analysts' intimate
knowledge of what's in the market and their ability to actually dissect
individual municipal securities helps us to determine appropriate prices that
accurately reflect an issuer's strength and value while assisting us in
protecting our shareholders' interests. They also help us pinpoint rising and
falling stars -- bonds whose credits may be upgraded or downgraded -- in the
municipal market.
We remain committed to providing our clients with the best investment products
and services available in today's financial markets. The Voyageur Tax Free Funds
allow you access to a wide variety of national and state-specific municipal
bonds funds, all of which are actively managed to meet their individual fund
objectives.
As part of our commitment to you, we have also redesigned our shareholder
reports to provide you with more in-depth information about your Voyageur fund
investments in an easier-to-read format. We welcome any comments you may have
about these changes and encourage you to call our Voyageur Shareholder Services
at 800.543.3863.
If at any time you have questions about your Voyageur fund investments, please
contact your personal financial advisor or Voyageur Shareholder Services. Our
Voyageur Shareholder Services 800 number -- known as Voyageur On Call(TM) --
allows you 24-hour access, seven days a week to an automated voice response
service with shareholder services representatives available from 8 a.m. to 5
p.m. Central Standard Time.
We appreciate your continued patronage of Voyageur Funds and look forward to
working with you and your financial advisors in creating products and services
designed to bring you closer to your investment goals.
Sincerely,
/s/ John G. Taft
John G. Taft
President
Minnesota High Yield Municipal Bond Fund
Minnesota Tax Free Fund
Minnesota Insured Fund
Minnesota Limited Term Tax Free Fund
VOYAGEUR MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
[PHOTO] ELIZABETH H. HOWELL IS THE
SENIOR MUNICIPAL BOND
MANAGER FOR THE VOYAGEUR
MINNESOTA HIGH YIELD
MUNICIPAL BOND FUND. MS.
HOWELL HAS MORE THAN 10
YEAR OF INVESTMENT INDUSTRY
EXPERIENCE.
The newest addition to Voyageur Minnesota Tax Free Fund offerings is the
Voyageur Minnesota Municipal High Yield Bond Fund, which started operations in
early June 1996.
In the Voyageur Minnesota High Yield Municipal Bond Fund, we remain committed to
building a diversified portfolio of high-yield bonds containing a wide range of
issuers, sectors, maturities and quality rankings.
Unlike its more conservative high-quality siblings, the Voyageur Minnesota High
Yield Municipal Bond Fund invests in high yield bonds in order to offer its
shareholders the opportunity to earn higher dividends.
Because the credit risk of high yield bonds is more speculative, these issues
generally pay a higher interest rate. Such bonds are often subject to more
price volatility than higher quality bonds.
VOYAGEUR MINNESOTA TAX FREE FUNDS
[PHOTO] ELIZABETH H. HOWELL IS THE
SENIOR MUNICIPAL BOND
MANAGER FOR THE VOYAGEUR
MINNESOTA TAX FREE
FUND, THE VOYAGEUR
MINNESOTA INSURED FUND,
AND THE VOYAGEUR MINNESOTA
LIMITED TERM TAX FREE
FUND. MS. HOWELL HAS MORE
THAN 10 YEARS OF INVESTMENT
INDUSTRY EXPERIENCE.
For the six months ended June 30, 1996, the total returns at net asset value
(NAV) for the Class A shares of Voyageur Minnesota Tax Free Funds were as
follows: Voyageur Minnesota Limited Term Tax Free Fund 0.02%; Voyageur Minnesota
Insured Fund -1.08%; and Voyageur Minnesota Tax Free Fund -1.66%.*
Within these Funds, we maintained our long-term outlook for lower interest rates
by keeping our Funds' durations long as compared to the industry average.
Although this caused the Funds' performance to lag somewhat when interest rates
rose, we believe the worst is over and are expecting to see a turnaround in the
bond market later this year or early 1997. All other commentary is applicable
for the Voyageur Minnesota Limited Term, Voyageur Minnesota Insured and the
Voyageur Minnesota Tax Free Funds only.
AREAS OF OPPORTUNITY
In the Funds, we remain committed to purchasing municipal bonds that our credit
research staff has identified as having investment grade credit ratings -- with
the Voyageur Minnesota Insured Fund invested in insured municipal securities.**
During the past six months, we continued to search for areas or sectors where we
could add value to the Funds' portfolios. One such area has been to include
investments that have added income to the portfolios. Although we still maintain
our commitment to total return, we believe this addition of income will help
dampen the effects of market volatility while allowing our shareholders to
benefit from higher income streams.
In order to attempt to protect our shareholders' current income level for a
longer period of time, we have continued to take advantage of opportunities to
extend the Funds' call protection. This focus on establishing extended call
protection has led to the majority of Funds in Voyageur Minnesota Limited Term
Tax Free Fund to be noncallable. It has also led to the Voyageur Minnesota
Insured Fund and Voyageur Minnesota Tax Free Fund to have an average call
protection of approximately eight years.
OUTLOOK FOR THE MUNICIPAL MARKET
The U.S. economy is still showing signs of moderate growth with moderate
inflation -- a trend we expect to see continue for the remainder of the year.
Our outlook for the municipal market continues to be favorable, and we expect
interest rates to decline over the long term. This has caused us to position the
Funds to take advantage of this trend -- staggering the length of duration in
each of the Voyageur Minnesota Tax Free Funds (with the exception of the
Voyageur High Yield Municipal Bond Fund) in order to maintain our cover the
yield curve strategy.
*Past performance is no guarantee of future results.
**Insurance pertains only to the timely payment of principal and interest by the
securities in the fund's portfolio. The value of the insured securities and the
Fund itself will fluctuate due to changing market conditions. No representation
is made as to any insurer's ability to meet its commitment.
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 1996
- ----------------------------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR
MINNESOTA MINNESOTA MINNESOTA MINNESOTA
HIGH YIELD TAX FREE INSURED LIMITED TERM
FUND FUND FUND TAX FREE FUND
<S> <C> <C> <C> <C>
------------- ------------- ------------- -------------
ASSETS
Investments in securities, at market value (note 1)
(identified costs, $1,065,278, $424,335,368,
$285,371,590 and $65,668,620, respectively) ......... $ 1,079,502 $ 435,275,077 $ 293,065,384 $ 67,675,097
Cash in bank on demand deposit ............................ 986,372 58,762 -- 260,849
Accrued interest receivable ............................... 6,806 8,339,119 6,347,986 1,485,353
Receivable for investment securities sold ................. -- -- 2,070,964 --
Receivable for Fund shares sold ........................... 86,192 161,972 4,863 778
Organizational costs (note 1) ............................. 19,667 -- -- --
------------- ------------- ------------- -------------
Total assets ........................................... 2,178,539 443,834,930 301,489,197 69,422,077
------------- ------------- ------------- -------------
LIABILITIES
Bank overdraft ............................................ -- -- 2,408,934 --
Dividends payable to shareholders ......................... 825 494,482 318,471 70,723
Payable for investment securities purchased ............... 782,753 2,350,783 1,757,152 --
Payable for Fund shares redeemed .......................... -- 245,133 115,364 25,258
Other accrued expenses .................................... 19,793 316,025 185,109 58,435
------------- ------------- ------------- -------------
Total liabilities ...................................... 803,371 3,406,423 4,785,030 154,416
------------- ------------- ------------- -------------
NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL STOCK ........ $ 1,375,168 $ 440,428,507 $ 296,704,167 $ 69,267,661
============= ============= ============= =============
Represented by:
Capital Stock - $.01 par value (note 1) ................ $ 1,367 $ 363,759 $ 286,520 $ 63,670
Additional paid-in capital ............................. 1,360,180 432,760,607 296,664,585 68,222,542
Distributions in excess of net investment income ....... (603) (462,398) (298,489) (72,822)
Accumulated net realized loss on investments (note 1) .. -- (3,173,170) (7,642,243) (952,206)
Unrealized appreciation of investments ................. 14,224 10,939,709 7,693,794 2,006,477
------------- ------------- ------------- -------------
TOTAL NET ASSETS .................................... $ 1,375,168 $ 440,428,507 $ 296,704,167 $ 69,267,661
============= ============= ============= =============
Net assets applicable to outstanding Class A shares ....... $ 1,046,143 $ 433,371,979 $ 287,566,520 $ 68,199,384
============= ============= ============= =============
Net assets applicable to outstanding Class B shares ....... $ 204,475 $ 4,235,091 $ 5,887,283 $ 141,756
============= ============= ============= =============
Net assets applicable to outstanding Class C shares ....... $ 124,550 $ 2,821,437 $ 3,250,364 $ 926,521
============= ============= ============= =============
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE
Class A - Shares of Capital Stock outstanding:
104,039; 35,793,206; 27,769,192 and 6,268,846,
respectively (note 4) ............................. $ 10.06 $ 12.11 $ 10.36 $ 10.88
============= ============= ============= =============
Class B - Shares of Capital Stock outstanding:
20,323; 349,787; 569,030 and 13,022,
respectively (note 4) ............................. $ 10.06 $ 12.11 $ 10.35 $ 10.89
============= ============= ============= =============
Class C - Shares of Capital Stock outstanding:
12,374; 232,913; 313,817 and 85,150,
respectively (note 4) ............................. $ 10.07 $ 12.11 $ 10.36 $ 10.88
============= ============= ============= =============
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF OPERATIONS (UNAUDITED) PERIOD ENDED JUNE 30, 1996
- -----------------------------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR
MINNESOTA MINNESOTA MINNESOTA MINNESOTA
HIGH YIELD TAX FREE INSURED LIMITED TERM
FUND* FUND FUND TAX FREE FUND
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Investment income:
Interest .............................................. $ 850 $ 13,413,448 $ 8,825,773 $ 1,969,219
------------ ------------ ------------ ------------
Expenses (note 3):
Investment advisory and management fee ................ 134 1,117,794 760,565 142,887
Dividend-disbursing, administrative and accounting
services fees ...................................... -- 228,448 161,679 48,103
Printing, postage and supplies ........................ -- 40,680 25,189 7,290
Audit and accounting fees ............................. -- 15,299 8,885 12,623
Legal fees ............................................ -- 4,105 1,614 496
Distribution fees - Class A ........................... 27 551,120 369,538 88,322
Distribution fees - Class B ........................... 63 18,287 26,575 282
Distribution fees - Class C ........................... 30 12,862 16,442 3,647
Directors' fees ....................................... -- 11,396 7,960 1,990
Registration fees ..................................... -- 8,516 6,694 5,846
Custodian fees ........................................ -- 68,335 34,089 13,161
Amortization of organizational costs .................. 333 -- -- --
Other ................................................. -- 3,369 2,680 1,227
------------ ------------ ------------ ------------
Total expenses ..................................... 587 2,080,211 1,421,910 325,874
Less: Expenses waived or absorbed .................... (363) (3,880) (5,638) (58)
------------ ------------ ------------ ------------
Net expenses before earnings credits on uninvested cash 224 2,076,331 1,416,272 325,816
Less: Earnings credits on uninvested cash ............ -- -- (4,139) --
------------ ------------ ------------
Total net expenses ................................. 224 2,076,331 1,412,133 325,816
------------ ------------ ------------ ------------
Investment income - net ............................ 626 11,337,117 7,413,640 1,643,403
------------ ------------ ------------ ------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) on security transactions (note 2) -- (152,500) 27,263 (104,799)
Net change in unrealized appreciation or depreciation
of investments .................................... 14,224 (18,341,167) (10,787,824) (1,493,477)
------------ ------------ ------------ ------------
Net gain (loss) on investments ................... 14,224 (18,493,667) (10,760,561) (1,598,276)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ...................................... $ 14,850 $ (7,156,550) $ (3,346,921) $ 45,127
============ ============ ============ ============
</TABLE>
* Period from June 4, 1996 (commencement of operations) to June 30, 1996.
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------------
VOYAGEUR MINNESOTA VOYAGEUR MINNESOTA
HIGH YIELD FUND TAX FREE FUND
--------------- -------------
PERIOD FROM SIX MONTHS YEAR
JUNE 4, 1996* TO ENDED ENDED
JUNE 30, 1996 JUNE 30, 1996 DECEMBER 31,
Operations: (UNAUDITED) (UNAUDITED) 1995
------------- ------------- -------------
<S> <C> <C> <C>
Investment income - net ................................................. $ 626 $ 11,337,117 $ 22,782,919
Realized gain (loss) on investments - net ............................... -- (152,500) (2,635,025)
Net change in unrealized appreciation or depreciation of
investments .......................................................... 14,224 (18,341,167) 50,741,624
------------- ------------- -------------
Net increase (decrease) in net assets resulting from operations ........ 14,850 (7,156,550) 70,889,518
------------- ------------- -------------
Distributions to shareholders from:
Investment income - net:
Class A .............................................................. (340) (11,268,515) (23,374,008)
Class B .............................................................. (212) (84,016) (37,979)
Class C .............................................................. (74) (55,749) (79,332)
Distributions in excess of net investment income:
Class A .............................................................. (455) (458,141) --
Class B .............................................................. (89) (1,875) --
Class C .............................................................. (59) (2,382) --
------------- ------------- -------------
Total distributions ................................................ (1,229) (11,870,678) (23,491,319)
------------- ------------- -------------
Capital share transactions (note 4):
Proceeds from sale of shares:
Class A (note 3) ..................................................... 1,038,493 18,334,305 44,321,375
Class B .............................................................. 199,720 1,798,717 2,627,889
Class C .............................................................. 123,018 1,078,443 1,563,516
Netasset value of shares issued in reinvestment of net investment income,
distributions in excess of net investment income and
realized gain distributions:
Class A ......................................................... 242 8,509,412 15,300,068
Class B ......................................................... 74 78,950 26,876
Class C ......................................................... -- 51,722 54,270
Payments for redemption of shares:
Class A .............................................................. -- (29,923,889) (58,049,869)
Class B (note 3) ..................................................... -- (192,433) (26,205)
Class C (note 3) ..................................................... -- (518,636) (534,040)
------------- ------------- -------------
Increase (decrease) in net assets from capital share transactions ....... 1,361,547 (783,409) 5,283,880
------------- ------------- -------------
Total increase (decrease) in net assets .............................. 1,375,168 (19,810,637) 52,682,079
Net assets at beginning of period .......................................... -- 460,239,144 407,557,065
------------- ------------- -------------
Net assets at end of period (including undistributed or (distributions
in excess of) net investment income of $(603); $(462,398) and
$71,163; $(298,489) and $4,200; and $(72,822) and $47;
respectively) ........................................................ $ 1,375,168 $ 440,428,507 $ 460,239,144
============= ============= =============
</TABLE>
* Commencement of operations.
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
- ---------------------------------------------------------------------------------------------------------
VOYAGEUR MINNESOTA VOYAGEUR MINNESOTA
INSURED FUND LIMITED TERM TAX FREE FUND
------------ --------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1996 DECEMBER 31, JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
------------- -------------- ------------ -------------
<S> <C> <C> <C> <C>
$ 7,413,640 $ 15,149,888 $ 1,643,403 $ 3,437,702
27,263 (7,669,506) (104,799) (74,374)
(10,787,824) 41,831,089 (1,493,477) 4,553,348
------------- -------------- ------------ -------------
(3,346,921) 49,311,471 45,127 7,916,676
------------- -------------- ------------ -------------
(7,234,044) (15,642,473) (1,628,116) (3,447,763)
(116,256) (79,826) (1,152) (311)
(67,540) (108,180) (14,182) (19,464)
(292,072) -- (72,424) --
(3,332) -- (8) --
(3,085) -- (390) --
------------- -------------- ------------ -------------
(7,716,329) (15,830,479) (1,716,272) (3,467,538)
------------- -------------- ------------ -------------
9,565,925 29,732,432 4,466,200 9,137,036
1,356,766 4,508,245 114,784 27,011
621,348 1,728,614 497,088 567,207
5,985,162 11,225,363 1,316,218 2,503,920
109,608 59,610 852 72
68,013 89,137 15,318 16,872
(24,964,387) (50,442,997) (8,333,494) (27,826,010)
(45,906) (57,331) -- (11)
(484,183) (425,889) (264,370) (257,614)
------------- -------------- ------------ -------------
(7,787,654) (3,582,816) (2,187,404) (15,831,517)
------------- -------------- ------------ -------------
(18,850,904) 29,898,176 (3,858,549) (11,382,379)
315,555,071 285,656,895 73,126,210 84,508,589
------------- -------------- ------------ -------------
$296,704,167 $315,555,071 $69,267,661 $73,126,210
============ ============ =========== ===========
</TABLE>
See accompanying notes to financial statements.
THE VOYAGEUR FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Voyageur Minnesota High Yield Municipal Bond Fund (Minnesota High Yield
Fund) a fund within Yoyageur Mutual Funds, Inc.; Voyageur Minnesota Tax Free
Fund (Minnesota Tax Free Fund) a fund within Voyageur Tax Free Funds, Inc.;
Voyageur Minnesota Insured Fund (Minnesota Insured Fund) a fund within Voyageur
Insured Funds, Inc. and Voyageur Minnesota Limited Term Tax Free Fund (Minnesota
Limited Term Tax Free Fund) a fund within Voyageur Intermediate Tax Free Funds,
Inc., (the Funds) are registered under the Investment Company Act of 1940 (as
amended) as open-end management investment companies. Minnesota High Yield Fund
is registered as a non-diversified fund. Minnesota Tax Free Fund, Minnesota
Insured Fund and Minnesota Limited Term Tax Free Fund are registered as
diversified funds. Minnesota High Yield Fund seeks high current income free from
both federal and state income taxes by investing in medium- and lower-grade
municipal bonds. The Minnesota Tax Free Fund seeks high current income free from
both federal and state income taxes by investing in investment grade municipal
bonds. Minnesota Insured Fund seeks high current income free from both federal
and state income taxes with the added safety of an insured portfolio by
investing in insured municipal bonds. Minnesota Limited Term Tax Free Fund seeks
to preserve original investment principal while providing income free from both
federal and state income taxes by investing in intermediate term investment
grade municipal bonds.
The Funds offer Class A, Class B and Class C Shares. Class A Shares are
sold with a front-end sales charge. Class B Shares may be subject to a
contingent deferred sales charge and such shares automatically convert to Class
A after eight years. Class C Shares may be subject to a contingent deferred
sales charge and have no conversion feature. All classes of shares have
identical voting, dividend, liquidation and other rights and the same terms and
conditions, except that the level of distribution fees charged differs between
classes. Income, expenses (other than expenses incurred under each class'
Distribution Agreement) and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative net
assets.
Pursuant to their amended articles of incorporation, Voyageur Mutual
Funds, Inc., Voyageur Tax Free Funds, Inc., Voyageur Insured Funds, Inc. and
Voyageur Limited Term Tax Free Funds, Inc. each have 10 trillion shares of
authorized capital stock that may be issued in one or more series.
The significant accounting policies followed by the Funds are summarized
as follows:
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of net increases (decreases) in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
INVESTMENTS IN SECURITIES
Securities are valued at fair value as determined by the Board of
Directors. Determination of fair value involves, among other things, using
pricing services or prices quoted by independent brokers. Short-term securities
are valued at amortized cost which approximates market value.
Security transactions are accounted for on the trade date. Securities
gains and losses are calculated on the identified-cost basis. Interest income,
including level-yield amortization of premium and original issue discount, is
accrued daily.
Each of the Funds concentrate their investments in limited geographical
areas, and therefore may have more credit risk related to the economic
conditions of these areas than a portfolio with broader geographical
diversification.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS
Delivery and payment for securities which have been purchased by the Fund
on a forward commitment or when-issued basis can take place up to a month or
more after the transaction date. During this period, such securities are subject
to market fluctuations and the portfolio maintains, in a segregated account with
its custodian, assets with a market value equal to or greater than the amount of
its purchase commitments.
ORGANIZATIONAL COSTS
Organizational costs are being amortized over 60 months on a straight line
basis for Minnesota High Yield Fund.
FEDERAL TAXES
The Funds' policy is to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income to shareholders in amounts that will avoid or minimize
federal income or excise taxes for the Funds. Net investment income and net
realized gains (losses) for the Funds may differ for financial statement and tax
purposes primarily because of losses deferred for tax purposes due to "wash
sale" transactions. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. The effect on dividend
distributions on certain book-to-tax differences is reflected as excess
distributions of net realized gains in the statement of changes in net assets.
Also, due to the timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the income or realized
gains (losses) were recorded by the fund.
For federal income tax purposes, as of December 31, 1995, Minnesota Tax
Free Fund had a capital loss carryover of $3,020,670 that will expire in 2003,
Minnesota Insured Fund had a capital loss carryover of $7,226,007 that will
expire in 2003 and 2004 and Minnesota Limited Term Tax Free Fund had a capital
loss carryover of $847,407 that will expire in 2003 if not offset by subsequent
capital gains. It is unlikely that the Board of Directors will authorize a
distribution of any net realized capital gains until the available capital loss
carryover has been offset or expires.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends declared daily from net investment income are payable monthly in
cash or reinvested in additional shares of each Fund. Distribution of net
short-term realized capital gains, if any, may be paid on a monthly or annual
basis. Net long-term realized capital gains, when available, are distributed
annually.
(2) SECURITIES TRANSACTIONS
Purchase cost and proceeds from sales of securities other than short-term
securities aggregated $1,065,278 and $0 for Minnesota High Yield Fund;
$86,581,722 and $88,977,903 for Minnesota Tax Free Fund; $27,662,691 and
$31,726,018 for Minnesota Insured Fund and $7,970,026 and $11,570,959 for
Minnesota Limited Term Tax Free Fund, respectively, during the period ended June
30, 1996.
(3) EXPENSES
Each Fund has an investment advisory and management agreement with
Voyageur Fund Managers, Inc. (Voyageur) under which Voyageur manages the Fund
assets and provides other specified services. The fee for investment management
and advisory services is paid monthly and is based on the average daily net
assets of each Fund at the annual rate of .65% for Minnesota High Yield Fund,
.50% for Minnesota Tax Free Fund and Minnesota Insured Fund and .40% for
Minnesota Limited Term Tax Free Fund. In addition, each Fund will pay most other
operating expenses including directors' fees, registration fees, printing of
shareholder reports, legal and auditing services and other miscellaneous
expenses. The Minnesota Insured Fund incurred portfolio insurance expense of
$378 for the six months ended June 30, 1996. Portfolio insurance expense, if
any, is recognized over the premium period. Voyageur is obligated to pay all
expenses of each Fund (excluding distribution fees, insurance premiums on
portfolio securities, taxes, interest and brokerage commissions) which exceed 1%
of average daily net assets, on an annual basis. During the period ended June
30, 1996, Voyageur absorbed $223 pursuant to the contractual 1% expense
limitation and, excluding waiver of distribution fees, voluntarily absorbed $140
for Minnesota High Yield Fund.
Each Fund will also pay a fee to Voyageur for acting as the Fund's
dividend disbursing, administrative and accounting services agent. The fee is
paid monthly and is equal to the sum of $1.33 per shareholder account per month,
a fixed monthly fee ranging from $1,000 to $1,500 based on the level of the
Fund's average daily net assets and an annualized percentage of average daily
net assets at reducing rates from .11% to .02%. Each Fund is also responsible
for reimbursing Voyageur's out-of-pocket expense in connection with the
performance of dividend-disbursing, administrative and accounting services.
All classes of shares have a Distribution Agreement under Rule 12b-1 of
the Investment Company Act of 1940 with Voyageur Fund Distributors, Inc. (Fund
Distributors). Under this plan each Fund is obligated to pay Fund Distributors a
monthly distribution fee at an annual rate of .25% of each Funds' average daily
net assets of the Class A Shares and 1.00% of each Funds' average daily net
assets of the Class B and Class C Shares. Fund Distributors may waive all or
part of its distribution fee at its sole discretion. During the period ended
June 30, 1996, Fund Distributors voluntarily waived Class B distribution fees of
$3,880 for Minnesota Tax Free Fund, $5,638 for Minnesota Insured Fund and $58
for Minnesota Limited Term Tax Free Fund. Minnesota Insured Fund earned $4,139
in credits on uninvested cash balances held at the custodian during the six
months ended June 30, 1996 which were used to reduce certain fees for various
custodial, pricing and accounting services provided by the custodian bank.
Sales charges paid by Class A shareholders were $4,860 for Minnesota High
Yield Fund, $468,771 for Minnesota Tax Free Fund, $272,753 for Minnesota Insured
Fund,and $39,837 for Minnesota Limited Term Tax Free Fund. Of these amounts,
Fund Distributors received $648 for Minnesota High Yield Fund, $60,079 for
Minnesota Tax Free Fund, $36,748 for Minnesota Insured Fund and $7,110 for
Minnesota Limited Term Tax Free Fund. Contingent deferred sales charges paid by
Class B shareholders were $2,425 for Minnesota Tax Free Fund and $1,698 for
Minnesota Insured Fund. Contingent deferred sales charges paid by Class C
shareholders were $14 for Minnesota Tax Free Fund and $100 for Minnesota Insured
Fund.
(4) SHARE TRANSACTIONS
Transactions in shares of capital stock during the periods shown were as
follows:
<TABLE>
<CAPTION>
MINNESOTA HIGH YIELD FUND
-------------------------
----------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
---------------- ----------------- -----------------
PERIOD FROM PERIOD FROM PERIOD FROM
JUNE 4, 1996* TO JUNE 12, 1996* TO JUNE 7, 1996* TO
JUNE 30, 1996 JUNE 30, 1996 JUNE 30, 1996
(UNAUDITED) (UNAUDITED) (UNAUDITED)
----------------------------------------------------------------------------------
<S> <C> <C> <C>
Shares sold............................ 104,015 20,316 12,374
Shares issued for
reinvested distributions............ 24 7 --
Shares redeemed........................ -- -- --
--------- -------- ---------
Increase in shares outstanding......... 104,039 20,323 12,374
========= ======== =========
</TABLE>
* Commencement of operations.
<TABLE>
<CAPTION>
MINNESOTA TAX FREE FUND
--------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
----------------------------- ----------------------------------- --------------------------
SIX MONTHS YEAR SIX MONTHS PERIOD FROM SIX MONTHS YEAR
ENDED ENDED ENDED MARCH 11, 1995* ENDED ENDED
JUNE 30, 1996 DECEMBER 31, JUNE 30, 1996 TO DECEMBER 31, JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 (UNAUDITED) 1995
----------------------------- ----------------------------------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Shares sold....................... 1,489,062 3,694,812 145,155 213,827 87,415 129,328
Shares issued for
reinvested distributions....... 690,457 1,273,503 6,424 2,195 4,201 4,487
Shares redeemed................... (2,440,786) (4,792,882) (15,707) (2,107) (42,303) (43,826)
----------- ----------- ---------- ----------- --------- ---------
Increase (decrease) in
shares outstanding............. (261,267) 175,433 135,872 213,915 49,313 89,989
=========== ============ ========== ========== ========== ========
</TABLE>
<TABLE>
<CAPTION>
MINNESOTA INSURED FUND
-----------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
---------------------------- --------------------------------- -----------------------------
SIX MONTHS YEAR SIX MONTHS PERIOD FROM SIX MONTHS YEAR
ENDED ENDED ENDED MARCH 7, 1995* ENDED ENDED
JUNE 30, 1996 DECEMBER 31, JUNE 30, 1996 TO DECEMBER 31, JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 (UNAUDITED) 1995
---------------------------- --------------------------------- ------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold....................... 909,338 2,902,567 128,896 433,849 58,919 168,194
Shares issued for
reinvested distributions....... 568,931 1,094,655 10,443 5,709 6,470 8,646
Shares redeemed................... (2,379,045) (4,895,900) (4,430) (5,437) (46,539) (40,592)
----------- ----------- ----------- ----------- ---------- ----------
Increase (decrease) in
shares outstanding............. (900,776) (898,678) 134,909 434,121 18,850 136,248
=========== =========== =========== =========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
MINNESOTA LIMITED TERM TAX FREE FUND
-------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
---------------------------- --------------------------------- -------------------------------
SIX MONTHS YEAR SIX MONTHS PERIOD FROM SIX MONTHS YEAR
ENDED ENDED ENDED AUGUST 5, 1995* ENDED ENDED
JUNE 30, 1996 DECEMBER 31, JUNE 30, 1996 TO DECEMBER 31, JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 (UNAUDITED) 1995
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold....................... 404,886 834,844 10,500 2,438 45,198 51,965
Shares issued for
reinvested distributions....... 119,439 230,452 78 7 1,392 1,545
Shares redeemed................... (757,716) (2,579,455) -- (1) (23,784) (23,639)
--------- ----------- ------------- -------- ---------- ----------
Increase (decrease) in
shares outstanding............. (233,391) (1,514,159) 10,578 2,444 22,806 29,871
============ ============= ============= ======== =========== ==========
</TABLE>
* Commencement of operations.
(5) FINANCIAL HIGHLIGHTS
Per shares data (rounded to the nearest cent) for a share of capital stock
outstanding and selected information for each period are as follows:
<TABLE>
<CAPTION>
MINNESOTA HIGH YIELD FUND
----------------------------------------------------
CLASS A CLASS B CLASS C
---------------- ---------------- ----------------
PERIOD FROM PERIOD FROM PERIOD FROM
JUNE 4, 1996(D) JUNE 12, 1996(D) JUNE 7, 1996(D)
TO JUNE 30, 1996 TO JUNE 30, 1996 TO JUNE 30, 1996
(UNAUDITED) (UNAUDITED) (UNAUDITED)
---------------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value:
Beginning of period................................ $10.00 $ 9.78 $ 9.99
------ ------ ------
Operations:
Net investment income.............................. .05 .03 .03
Net realized and unrealized gain on investments.... .06 .28 .08
------ ------ ------
Total from operations.......................... .11 .31 .11
------ ------ ------
Distributions to shareholders:
From net investment income (a)..................... (.05) (.03) (.03)
------ ------ ------
Net asset value:
End of period...................................... $10.06 $10.06 $10.07
====== ====== ======
Total investment return (b)........................... .94% 3.04% 1.05%
Net assets at end of period (000's omitted)........... $1,046 $204 $125
Ratios:
Ratio of expenses to
average daily net assets (f)..................... .63%(e) 1.33%(e) 1.26%(e)
Ratio of net investment income
to average daily net assets...................... 2.39%(e) 3.06%(e) 2.25%(e)
Assuming no voluntary waivers and reimbursements:
Expenses (c)............................... 1.25%(e) 2.00%(e) 2.00%(e)
Net investment income...................... 1.77%(e) 2.39%(e) 1.51%(e)
Portfolio turnover rate (excluding
short-term securities)........................... 0.00% 0.00% 0.00%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
MINNESOTA TAX FREE FUND
--------------------------------------------------------------
CLASS A
--------------------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, 1996 YEAR ENDED DECEMBER 31,
----------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period......................... $12.63 $11.33 $12.85 $12.21 $12.07 $11.67
------ ------ ------ ------ ------ ------
Operations:
Net investment income....................... .31 .62 .63 .64 .70 .75
Net realized and unrealized
gain (loss) on investments................ (.51) 1.32 (1.48) .87 .23 .49
------ ------ ------ ------ ------ ------
Total from operations................... (.20) 1.94 (.85) 1.51 .93 1.24
------ ------ ------ ------ ------ ------
Distributions to shareholders:
From net investment income (a).............. (.31) (.64) (.61) (.64) (.70) (.75)
In excess of net investment income.......... (.01) -- -- -- -- --
From net realized gains..................... -- -- (.05) (.23) (.09) (.09)
In excess of net realized gains............. -- -- (.01) -- -- --
------ ------ ------ ------ ------ ------
Total distributions....................... (.32) (.64) (.67) (.87) (.79) (.84)
------ ------ ------ ------ ------ ------
Net asset value:
End of period............................... $12.11 $12.63 $11.33 $12.85 $12.21 $12.07
====== ====== ====== ====== ====== ======
Total investment return (b).................... (1.66)% 17.49% (6.73)% 12.70% 7.97% 11.04%
Net assets at end of
period (000's omitted)...................... $433,372 $455,220 $406,497 $458,145 $331,314 $251,594
Ratios:
Ratio of expenses to
average daily net assets (f).............. .92%(e) .93% .90% 1.02% .96% .83%
Ratio of net investment income
to average daily net assets............... 5.08%(e) 5.11% 5.29% 5.02% 5.73% 6.44%
Assuming no voluntary waivers
and reimbursements:
Expenses (c)........................ .92%(e) .93% .90% 1.02% 1.04% .98%
Net investment income............... 5.08%(e) 5.11% 5.29% 5.02% 5.65% 6.29%
Portfolio turnover rate (excluding
short-term securities).................... 19.50% 50.84% 24.26% 31.77% 23.60% 26.40%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
MINNESOTA TAX FREE FUND
------------------------------------------------------------------
CLASS B CLASS C
-------------------------- --------------------------------------
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED MARCH 11, ENDED YEAR MAY 4,
JUNE 30, 1995(D) TO JUNE 30, ENDED 1994(D) TO
1996 DECEMBER 31, 1996 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 1994
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period................... $12.62 $11.90 $12.63 $11.33 $11.96
------ ------ ------ ------ ------
Operations:
Net investment income................. .28 .45 .27 .53 .34
Net realized and unrealized
gain (loss) on investments.......... (.50) .71 (.51) 1.32 (.61)
------ ------ ------ ------ ------
Total from operations............. (.22) 1.16 (.24) 1.85 (.27)
------ ------ ------ ------ ------
Distributions to shareholders:
From net investment income (a)........ (.28) (.44) (.27) (.55) (.32)
In excess of net investment income.... (.01) -- (.01) -- --
From net realized gains............... -- -- -- -- (.04)
------ ------ ------ ------ ------
Total distributions................. (.29) (.44) (.28) (.55) (.36)
------ ------ ------ ------ ------
Net asset value:
End of period......................... $12.11 $12.62 $12.11 $12.63 $11.33
====== ====== ====== ====== ======
Total investment return (b).............. (1.84)% 9.95% (2.03)% 16.62% (2.30)%
Net assets at end of
period (000's omitted)................ $4,235 $2,701 $2,821 $2,319 $1,061
Ratios:
Ratio of expenses to
average daily net assets (f)........ 1.46%(e) 1.38%(e) 1.67%(e) 1.67% 1.72%(e)
Ratio of net investment income
to average daily net assets......... 4.52%(e) 4.43%(e) 4.33%(e) 4.33% 4.56%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (c).................. 1.67%(e) 1.63%(e) 1.67%(e) 1.67% 1.72%(e)
Net investment income......... 4.31%(e) 4.18%(e) 4.33%(e) 4.33% 4.56%(e)
Portfolio turnover rate (excluding
short-term securities).............. 19.50% 50.84% 19.50% 50.84% 24.26%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
MINNESOTA INSURED FUND
-------------------------------------------------------------------
CLASS A
-------------------------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, 1996 YEAR ENDED DECEMBER 31,
---------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
------------- ---------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period...................... $10.73 $ 9.61 $11.02 $10.27 $10.07 $ 9.65
------ ------ ------ ------ ------ ------
Operations:
Net investment income.................... .26 .51 .54 .54 .59 .60
Net realized and unrealized
gain (loss) on investments............. (.36) 1.14 (1.39) .84 .25 .48
------ ------ ------ ------ ------ ------
Total from operations................ (.10) 1.65 (.85) 1.38 .84 1.08
------ ------ ------ ------ ------ ------
Distributions to shareholders:
From net investment income (a)........... (.26) (.53) (.52) (.54) (.59) (.60)
In excess of net investment income....... (.01) -- -- -- -- --
From net realized gains.................. -- -- (.04) (.09) (.05) (.06)
------ ------ ------ ------ ------ ------
Total distributions.................... (.27) (.53) (.56) (.63) (.64) (.66)
------ ------ ------ ------ ------ ------
Net asset value:
End of period............................ $10.36 $10.73 $ 9.61 $11.02 $10.27 $10.07
====== ====== ====== ====== ====== ======
Total investment return (b)................. (1.08)% 17.52 % (7.88)% 13.80% 8.57% 11.59%
Net assets at end of
period (000's omitted)................... $287,567 $307,734 $284,132 $311,187 $162,728 $68,250
Ratios:
Ratio of expenses to
average daily net assets (f)........... .91%(e) .87% .61% .70% .37% .78%
Ratio of net investment income
to average daily net assets............ 4.89%(e) 4.92% 5.29% 4.93% 5.66% 6.13%
Assuming no voluntary waivers
and reimbursements:
Expenses (c)..................... .91%(e) .92% .94% 1.02% 1.06% 1.16%
Net investment income............ 4.89%(e) 4.87% 4.96% 4.61% 4.97% 5.75%
Portfolio turnover rate (excluding
short-term securities)................. 9.20% 53.72% 24.75% 18.25% 14.11% 43.68%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
MINNESOTA INSURED FUND
-----------------------------------------------------------------
CLASS B CLASS C
-------------------------- ------------------------------------
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED MARCH 7, ENDED YEAR MAY 4,
JUNE 30, 1995(d) TO JUNE 30, ENDED 1994(d) TO
1996 DECEMBER 31, 1996 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 1994
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period.................... $10.72 $10.14 $10.73 $9.61 $10.23
------ ------ ------ ----- ------
Operations:
Net investment income.................. .23 .38 .22 .43 .30
Net realized and unrealized
gain (loss) on investments........... (.36) .58 (.36) 1.14 (.62)
------ ------ ------ ----- ------
Total from operations.............. (.13) .96 (.14) 1.57 (.32)
------ ------ ------ ----- ------
Distributions to shareholders:
From net investment income (a)......... (.23) (.38) (.22) (.45) (.28)
In excess of net investment income..... (.01) -- (.01) -- --
From net realized gains................ -- -- -- -- (.02)
------ ------ ------ ----- ------
Total distributions.................. (.24) (.38) (.23) (.45) (.30)
------ ------ ------ ----- ------
Net asset value:
End of period.......................... $10.35 $10.72 $10.36 $10.73 $9.61
====== ====== ====== ====== =====
Total investment return (b)............... (1.34)% 9.59% (1.45)% 16.63% (3.14)%
Net assets at end of
period (000's omitted)................. $5,887 $4,655 $3,250 $3,166 $1,525
Ratios:
Ratio of expenses to
average daily net assets (f)......... 1.45%(e) 1.34%(e) 1.67%(e) 1.66% 1.36%(e)
Ratio of net investment income
to average daily net assets.......... 4.35%(e) 4.15%(e) 4.15%(e) 4.11% 4.68%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (c)................... 1.66%(e) 1.64%(e) 1.67%(e) 1.67% 1.68%(e)
Net investment income.......... 4.14%(e) 3.85%(e) 4.15%(e) 4.10% 4.36%(e)
Portfolio turnover rate (excluding
short-term securities)............... 9.20% 53.72% 9.20% 53.72% 24.75%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
MINNESOTA LIMITED TERM TAX FREE FUND
---------------------------------------------------------------
CLASS A
---------------------------------------------------------------
SIX MONTHS
ENDED
JUNE 30, 1996 YEAR ENDED DECEMBER 31,
------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period.......................... $11.14 $10.50 $11.16 $10.83 $10.69 $10.32
------ ------ ------ ------ ------ ------
Operations:
Net investment income........................ .25 .51 .45 .47 .51 .55
Net realized and unrealized
gain (loss) on investments................. (.25) .64 (.66) .37 .18 .37
------ ------ ------ ------ ------ ------
Total from operations.................... -- 1.15 (.21) .84 .69 .92
------ ------ ------ ------ ------ ------
Distributions to shareholders:
From net investment income (a)............... (.25) (.51) (.45) (.47) (.51) (.55)
In excess of net investment income........... (.01) -- -- -- -- --
From net realized gains...................... -- -- -- (.04) (.04) --
------ ------ ------ ------ ------ ------
Total distributions........................ (.26) (.51) (.45) (.51) (.55) (.55)
------ ------ ------ ------ ------ ------
Net asset value:
End of period................................ $10.88 $11.14 $10.50 $11.16 $10.83 $10.69
====== ====== ====== ====== ====== ======
Total investment return (b)..................... .02% 11.00% (1.91)% 7.88% 6.62% 9.24%
Net assets at end of
period (000's omitted)....................... $68,199 $72,405 $84,168 $75,374 $48,210 $27,268
Ratios:
Ratio of expenses to
average daily net assets (f)............... .90%(e) .91% .92% .99% 1.09% 1.23%
Ratio of net investment income
to average daily net assets................ 4.61%(e) 4.61% 4.18% 4.18% 4.71% 5.35%
Assuming no voluntary waivers
and reimbursements:
Expenses (c)......................... .90%(e) .91% .92% .99% 1.09% 1.23%
Net investment income................ 4.61%(e) 4.61% 4.18% 4.18% 4.71% 5.35%
Portfolio turnover rate (excluding
short-term securities)..................... 6.40% 40.28% 42.06% 19.13% 25.56% 43.39%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
MINNESOTA LIMITED TERM TAX FREE FUND
-----------------------------------------------------------------
CLASS B CLASS C
---------------------------- -----------------------------------
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED AUGUST 15, ENDED YEAR APRIL 30,
JUNE 30, 1995(d) TO JUNE 30, ENDED 1994(d) TO
1996 DECEMBER 31, 1996 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 1994
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period.................... $11.14 $10.95 $11.13 $10.50 $10.74
------ ------ ------ ------ ------
Operations:
Net investment income.................. .24 .17 .22 .42 .24
Net realized and unrealized
gain (loss) on investments........... (.25) .19 (.24) .63 (.24)
------ ------ ------ ------ ------
Total from operations.............. (.01) .36 (.02) 1.05 --
------ ------ ------ ------ ------
Distributions to shareholders:
From net investment income (a)......... (.23) (.17) (.22) (.42) (.24)
In excess of net investment income..... (.01) -- (.01) -- --
------ ------ ------ ------ ------
Total distributions................ (.24) (.17) (.23) (.42) (.24)
------ ------ ------ ------ ------
Net asset value:
End of period.......................... $10.89 $11.14 $10.88 $11.13 $10.50
====== ====== ====== ====== ======
Total investment return (b)............... (.25)% 3.26% (.36)% 10.18% (0.03)%
Net assets at end of
period (000's omitted)................. $142 $27 $927 $694 $341
Ratios:
Ratio of expenses to
average daily net assets (f)......... 1.44%(e) 1.30%(e) 1.65%(e) 1.63% 1.71%(e)
Ratio of net investment income
to average daily net assets.......... 4.03%(e) 3.93%(e) 3.84%(e) 3.82% 3.35%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (c)................... 1.64%(e) 1.55%(e) 1.65%(e) 1.63% 1.71%(e)
Net investment income.......... 3.83%(e) 3.68%(e) 3.84%(e) 3.82% 3.35%(e)
Portfolio turnover rate (excluding
short-term securities)............... 6.40% 40.28% 6.40% 40.28% 42.05%
</TABLE>
See accompanying notes to Financial Highlights.
NOTES TO FINANCIAL HIGHLIGHTS
(a) For federal income tax purposes, all of the distributions from net
investment income were derived from interest on securities exempt from
federal income tax.
(b) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(c) Voyageur and Fund Distributors voluntarily waived or reimbursed a portion
of expenses during several periods presented. The annual contractual
expense limit for the Funds (excluding distribution fees, insurance
premiums on portfolio securities, taxes, interest and brokerage
commissions) is 1.00% of average daily net assets. The maximum distribution
fee is .25% of each Fund's average daily net assets for Class A Shares and
1.00% of each Fund's average daily net assets for Class B and Class C
Shares.
(d) Commencement of operations.
(e) Annualized.
(f) Beginning in the year ended December 31, 1995, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Funds. Prior period expense ratios have not
been adjusted.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
INVESTMENTS IN SECURITIES (UNAUDITED) JUNE 30, 1996
- -------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (d) RATE MATURITY VALUE (a)
- -------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
MINNESOTA MUNICIPAL BONDS (78.5%)
GENERAL OBLIGATION (28.9%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 100 Esko Independent School District (FSA Insured)................... 5.75% 04-01-17 $ 100,061
100 Inver Grove Heights Series A..................................... 5.75 02-01-13 100,000
100 Stewartville Independent School District Series A................ 5.75 02-01-12 100,125
100 Waconia Independent School District Series 93A (FSA Insured)..... 5.45 02-01-15 96,264
----------
396,450
----------
EDUCATION (14.3%):
-------------------------------------------------------------------------------------------------------
100 Minnesota Higher Education Facility Macalaster College 4C........ 5.50 03-01-12 95,838
100 Minnesota State University System Revenue........................ 6.10 06-30-23 101,301
----------
197,139
----------
HEALTH CARE (13.5%):
-------------------------------------------------------------------------------------------------------
100 Robbinsdale North Memorial Medical Center (AMBAC Insured) . . . . 5.50 05-15-23 94,762
100 St. Louis Park Methodist Hospital (AMBAC Insured)................ 5.10 07-01-13 91,125
----------
185,887
----------
HOUSING (14.6%):
-------------------------------------------------------------------------------------------------------
100 Eden Prairie Multi Family Housing Sub.-Tanger Creek ..... . . . . 8.00 06-20-31 100,875
100 Minnesota State Housing Finance Authority Single Family
Mortgage Series E............................................. 6.25 01-01-23 100,125
----------
201,000
----------
UTILITIES (7.2%):
-------------------------------------------------------------------------------------------------------
100 Southern Minnesota Municipal Power Agency Revenue
(FGIC Insured)................................................ 5.75 01-01-18 99,026
----------
TOTAL INVESTMENTS IN SECURITIES (cost:$1,065,278) (f) $1,079,502
==========
</TABLE>
See accompanying notes to investments in securities.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA TAX FREE FUND
INVESTMENTS IN SECURITIES (UNAUDITED) JUNE 30, 1996
- -------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (D) RATE MATURITY VALUE (A)
- -------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
MUNICIPAL BONDS (98.8%):
ESCROWED WITH U.S. GOVERNMENT BONDS (10.6%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,000 Anoka County Capital Improvement.................................... 7.20% 02-01-99 $ 1,060,230
250 Blaine IDR (Ball Corp) ............................................. 8.25 12-01-99 276,660
300 Blaine IDR (Ball Corp).............................................. 8.25 12-01-00 338,529
500 Bloomington Tax Increment .......................................... 9.75 02-01-05 650,530
390 Brainerd Independent School District #181........................... 7.00 06-01-01 426,231
1,000 Hopkins Senior Multi Family Facilities Augustana Home............... 9.00 07-01-97 1,065,730
575 Kimball Independent School District #739 ........................... 7.70 02-01-98 604,038
525 Kimball Independent School District #739 ........................... 7.60 02-01-98 550,720
500 Little Falls Independent School District #482 (AMBAC Insured)....... 6.80 02-01-99 528,445
1,990 Minnesota Public Facility Authority Water PCA....................... 7.10 03-01-12 2,183,030
5.220 Minnesota Public Facility Authority Water PCA ...................... 6.95 03-01-01 5,773,946
10,000 Maplewood Independent School District #622 (FSA Insured)............ 7.10 02-01-25 11,382,500
860 Northfield College Facility Revenue - St. Olaf College.............. 8.00 10-01-98 926,349
1,255 Northfield College Facility Revenue - St. Olaf College.............. 7.88 10-01-98 1,348,497
1,000 Owatonna Public Utilities........................................... 6.75 01-01-01 1,079,250
750 Rockford Independent School District #883........................... 7.20 12-15-98 801,840
1,000 Southern Minnesota Muni Power Agency Power Supply
(MBIA Insured)................................................... 5.75 01-01-18 1,000,000
1,000 St. Cloud Independent School District #742 ......................... 7.50 02-01-98 1,045,150
775 St. Louis Park Methodist Hospital (AMBAC Insured)................... 7.25 07-01-00 859,390
7,825 St. Paul Civic Center Revenue Sales Tax (MBIA Insured).............. 5.55 11-01-23 7,324,200
2,175 St. Paul Sewer Revenue Series 88A................................... 8.00 12-01-98 2,374,339
990 Southern Minnesota Municipal Power Agency (AMBAC Insured)........... 5.50 01-01-15 956,033
1,500 University of Minnesota Revenue Refunding........................... 6.00 02-01-11 1,500,000
1,560 Wayzata Independent School District #284............................ 7.10 02-01-99 1,648,265
625 Wayzata Independent School District #284 ........................... 7.05 02-01-99 659,613
185 Western Minnesota Municipal Power Agency (MBIA Insured)............. 9.75 01-01-16 268,814
-------------
46,632,329
-------------
GENERAL OBLIGATION (22.4%):
-------------------------------------------------------------------------------------------------------
1,450 Becker Independent School District #726 (FSA Insured).............. 5.30 02-01-11 1,414,026
1,235 Becker Independent School District #726 (FSA Insured).............. 5.38 02-01-14 1,190,738
1,000 Byron Independent School District #531 (AMBAC Insured)............. 5.30 06-01-14 954,120
1,805 Centennial Independent School District #12 (FGIC Insured).......... 4.88 02-01-10 1,658,344
2,850 Chaska Independent School District #112 (FGIC Insured)............. 5.25 02-01-11 2,700,375
5,085 Chaska Independent School District #112 (FGIC Insured)............. 5.38 02-01-14 4,824,394
1,000 Fairbault Independent School District #656 (MN School
District Credit Enhanced)....................................... 6.10 06-01-10 1,039,310
3,500 Farmington Independent School District #192 (AMBAC Insured)........ 5.13 02-01-15 3,251,360
Hennepin County 7,990.............................................. 5.75 10-01-10 8,114,883
3,675 Hopkins Independent School District #270 (MBIA Insured)............ 4.88 02-01-13 3,326,794
2,350 Kenyon Wanamingo Independent School District (MBIA Insured)........ 6.00(l) 02-01-18 2,364,570
8,500 Lakeville Independent School District #194 (MBIA Insured).......... 5.13 02-01-15 7,809,290
1,540 Mahtomedi Independent School District #832 Series B Zero
Coupon (MBIA Insured)........................................... 5.90(g) 02-01-14 557,957
1,015 Milaca Independent School District #921 (FSA Insured).............. 5.50 02-01-20 975,202
1,000 Minneapolis Convention Center Facilities........................... 5.45 04-01-13 978,430
850 Minneapolis Convention Center Facilities, Inverse Floater ......... 6.97(m) 04-01-14 789,905
8,440 Minneapolis GO..................................................... 5.11 10-01-20 7,645,374
2,000 Minneapolis G.O. Series B.......................................... 5.20 03-01-13 1,897,920
580 Minneapolis Sports Arena Project, Inverse Floater.................. 6.27(m) 04-01-14 495,175
1,750 Minneapolis Unlimited Tax Series 1992 G.O.......................... 6.30 10-01-08 1,863,225
1,540 North Branch Independent School District #138 (FGIC Insured)....... 5.50 02-01-12 1,516,207
1,000 North Branch Independent School District #138 (FGIC Insured)....... 5.63 02-01-17 982,020
2,250 North St. Paul, Maplewood Independent School District #622,
Inverse Floater................................................. 6.32(m) 02-01-20 1,706,468
240 Pine Island Independent School District #255 (FSA Insured)......... 6.63 06-01-12 251,993
310 Pine Island Independent School District #255 (FSA Insured)......... 6.63 06-01-13 324,811
330 Pine Island Independent School District #255 (FSA Insured)......... 6.63 06-01-14 345,695
355 Pine Island Independent School District #255 (FSA Insured)......... 6.63 06-01-15 371,110
380 Pine Island Independent School District #255 (FSA Insured)......... 6.63 06-01-16 397,244
385 Plainview Independent School District #810......................... 6.70 02-01-06 412,431
420 Plainview Independent School District #810......................... 6.75 02-01-07 450,975
445 Plainview Independent School District #810......................... 6.75 02-01-08 477,819
2,000 Puerto Rico Aqueduct & Sewer Authority............................. 5.00 07-01-15 1,781,340
1,000 Rochester Tax Increment............................................ 6.50 12-01-04 1,026,350
2,000 Rockford Independent School District #883 (FSA Insured)............ 5.25 12-15-14 1,892,120
4,000 Rosemount Independent School District #196 Inverse Floater......... 7.82(m) 04-01-15 4,017,960
1,375 Rosemount - Apple Valley Independent School District #196
(FSA Insured)................................................... 5.88 04-01-15 1,383,168
2,600 Rosemount Independent School District #196 Series B Zero
Coupon (FSA Insured)............................................ 5.93(g) 04-01-11 1,133,600
1,850 Rosemount Independent School District #196 Zero
Coupon (FSA Insured)............................................ 5.96(g) 04-01-12 756,632
1,915 Rosemount Independent School District #196 Zero
Coupon (FSA Insured)............................................ 6.01(g) 04-01-13 733,981
540 Sartell Independent School District #748 Zero Coupon
(MBIA Insured)................................................. 5.98(g) 02-01-13 208,958
1,075 Sartell Independent School District #748 Zero Coupon
(MBIA Insured).................................................. 6.10(g) 02-01-15 365,973
1,750 Sartell Independent School District #748 Zero Coupon
(MBIA Insured)................................................. 6.15(g) 02-01-16 559,528
1,600 Sartell Independent School District #748 Zero Coupon
(MBIA Insured).................................................. 6.15(g) 02-01-17 480,224
1,850 Sartell Independent School District #748 Series A
(MBIA Insured).................................................. 5.75 02-01-15 1,855,975
1,310 South Washington County Independent School District #833
(FGIC Insured).................................................. 4.88 06-01-12 1,187,188
1,350 South Washington County Independent School District #833
(FGIC Insured).................................................. 4.88 06-01-13 1,211,625
2,170 South Washington County Independent School District #833
(FGIC Insured).................................................. 4.88 06-01-14 1,931,300
2,000 Spring Lake Park Independent School District #16
(MBIA Insured).................................................. 5.23 02-01-17 1,859,900
3,000 Stillwater Independent School District #834 (MBIA Insured)......... 5.75 02-01-15 3,008,910
1,025 Stillwater Series A (FSA Insured).................................. 5.38 02-01-17 978,321
1,025 Stillwater Series A (FSA Insured).................................. 5.38 02-01-21 963,541
3,250 Waseca Independent School District #834 GO (MBIA Insured).......... 5.50 04-01-17 3,142,425
1,680 Washington County GO............................................... 5.90 02-01-10 1,706,981
5,750 White Bear Lake Independent School District #624 (FSA Insured)..... 5.30 02-01-14 5,470,722
------------
98,744,887
-------------
UTILITIES (16.1%):
-------------------------------------------------------------------------------------------------------
1,750 Bass Brook Pollution Control Revenue Power & Light
(MBIA Insured)................................................ 6.00 07-01-22 1,754,725
17,490 Bass Brook Pollution Control Revenue Rfg. Power & Light ......... 6.00 07-01-22 17,107,319
3,815 Northern Minnesota Municipal Power Agency Zero Coupon
(AMBAC Insured)............................................... 5.85(g) 01-01-09 1,922,684
5,875 Northern Minnesota Municipal Power Agency Series 89A............. 7.25 01-01-16 6,286,250
13,500 Northern Minnesota Municipal Power Agency Series B
(AMBAC Insured)............................................... 5.00 01-01-18 13,006,035
1,500 Puerto Rico Electric Power Authority......................... 5.25 07-01-21 1,354,740
2,930 Puerto Rico Electric Power Authority............................. 5.50 07-01-25 2,743,505
3,880 Southern Minnesota Municipal Power Agency Revenue
Series A (FGIC Insured)....................................... 5.75 01-01-18 3,559,900
1,125 Southern Minnesota Municipal Power Agency Series B
(FGIC Insured)................................................ 5.00 01-01-13 1,028,688
1,560 Southern Minnesota Municipal Power Agency Supply System
(AMBAC Insured)............................................... 5.50 01-01-15 1,507,334
7,200 Southern Minnesota Municipal Power Agency (MBIA Insured)......... 4.75 01-01-16 6,228,000
2,000 Southern Minnesota Municipal Power Agency (FGIC Insured)......... 5.75 01-01-18 1,975,700
9,770 Southern Minnesota Municipal Power Agency (MBIA Insured)......... 5.75 01-01-18 9,651,295
4,785 Southern Minnesota Municipal Power Agency (MBIA Insured)......... 6.77(g) 01-01-19 1,249,268
5,000 Southern Minnesota Municipal Power Agency Zero Coupon
(MBIA Insured)................................................ 6.14(g) 01-01-21 1,158,500
550 Western Minnesota Municipal Power Agency Revenue ................ 6.13 01-01-16 549,967
-------------
71,083,910
-------------
INDUSTRIAL (5.5%):
-------------------------------------------------------------------------------------------------------
1,000 Anoka Resource Recovery Revenue for NSP Series 85................ 7.15 12-01-08 1,071,110
2,000 Becker Pollution Control Revenue for Sherborne County
General Station............................................... 6.80 04-01-07 2,125,000
4,500 Duluth Seaway Port Authority Revenue Cargill .................... 6.13 05-01-14 4,550,490
1,000 East Grand Forks Amer Crystal Sugar Pollution Control Revenue.... 7.75 04-01-18 1,073,000
1,430 Minneapolis Community Development Agency
(Fireman's Fund Insured)...................................... 7.63 06-01-06 1,478,263
4,400 Minnesota Public Facilities Authority Water Control.............. 6.25% 03-01-16 4,562,272
745 Red Wing IDR K-Mart.............................................. 5.50 07-01-08 658,394
2,200 Richfield CDR for Richfield Shoppes.............................. 8.38(j) 10-01-13 2,389,750
4,704 St. Cloud Revenue Northwest Center Association................... 7.50(b) 08-01-12 4,780,410
1,300 St. Paul Port Authority Fort Road Medical/Twin Parks
(Asset Guaranty Reinsurance).................................. 7.50 09-01-02 1,390,142
-------------
24,078,831
-------------
HEALTH CARE (24.6%):
-------------------------------------------------------------------------------------------------------
1,000 Albert Lea St. John's Lutheran Home Project...................... 8.50 11-01-19 1,065,000
600 Bemidji Hospital Facilities Revenue North County................. 6.05 09-01-16 597,864
1,825 Bemidji Hospital Facilities Revenue North County................. 6.05 09-01-24 1,802,936
1,760 Bemidji Hospital Facilities Revenue North County................. 5.63 09-01-15 1,675,661
2,435 Bemidji Hospital Facilities Revenue North County................. 5.63 09-01-21 2,270,126
2,250 Brainerd Benedictine Health Systems (Connie Lee Insured)......... 6.00 02-15-12 2,263,342
9,450 Duluth Benedictine/St. Mary's Health (Connie Lee Insured)........ 6.00 02-15-20 9,407,853
4,295 Duluth Economic Development Authority St. Luke's Hospital
(Connie Lee Insured).......................................... 6.40 05-01-18 4,431,452
2,500 Edina Fairview Hospital Revenue.................................. 7.13 07-01-19 2,681,250
500 Glencoe/McLeod County Health Care................................ 8.50 12-01-15 540,850
1,000 Little Canada Health Care 1992 (Presbyterian Homes Guaranteed)... 7.25 07-01-12 995,000
250 Little Canada Senior Housing Facilities
(Presbyterian Homes Guaranteed)............................... 7.25 07-01-12 248,750
13,000 Minneapolis & St. Paul HRA Revenue (FSA Insured)................. 5.50 08-15-25 12,180,870
3,000 Minneapolis Fairview Hospital Revenue (MBIA Insured)............. 6.50 01-01-11 3,170,550
6,800 Minneapolis Fairview Hospital Revenue Series 1993A
(MBIA Insured)................................................ 5.25 11-15-13 6,339,300
2,635 Minneapolis Health Care American Baptist Homes................... 8.70 11-01-09 2,826,037
1,360 Minneapolis/St. Paul HRA HealthOne Group (MBIA Insured).......... 7.40 08-15-11 1,492,600
1,045 Minneapolis/St. Paul HRA Childrens Hospital
(FSA Insured)................................................. 5.50 08-15-25 981,600
10,725 Robbinsdale North Memorial Medical Center (AMBAC Insured)........ 5.50 05-15-23 10,094,585
1,500 Rochester Mayo Health Care Revenue............................... 5.90 11-15-10 1,550,640
6,000 Rochester Mayo Health Care Revenue Series 92H.................... 6.03 11-15-15 6,044,940
5,900 Rochester Mayo Foundation, Series 1992 D......................... 6.25 11-15-21 5,995,403
2,000 Roseville Presbyterian Homes, Inc. Health Care Project
(Presbyterian Homes Guaranteed)............................... 7.50 05-01-07 2,012,500
600 Spring Park Twin Birch Nursing Home
(Presbyterian Homes Guaranteed)............................... 8.25 08-01-11 630,750
750 Springfield St. John's Lutheran Home Project..................... 8.50 11-01-19 792,555
10,250 St. Cloud Hospital Revenue (AMBAC Insured)....................... 5.30 10-01-20 9,448,860
7,500 St. Louis Park Methodist Hospital (AMBAC Insured)................ 5.10 07-01-13 6,712,500
11,220 St. Louis Park Methodist Hospital (AMBAC Insured)................ 5.20 07-01-23 10,105,854
-------------
108,359,628
-------------
HOUSING (14.9%):
-------------------------------------------------------------------------------------------------------
500 Austin Housing and Redevelopment Authority Courtyard
Residence Series 95A.......................................... 7.25 01-01-26 503,015
2,500 Brooklyn Center Multifamily Housing Revenue (Section 8).......... 5.90 01-01-20 2,399,200
3,370 Burnsville Multifamily - Bridgeway Apartments (FHA Insured)...... 7.63 02-01-24 3,465,708
1,000 Burnsville Multifamily- Coventry Court Apartments Project
(FHA Insured)................................................. 7.50 09-01-17 1,049,490
195 Dakota County Housing and Redevelopment Authority Single
Family (GNMA Backed).......................................... 8.10 03-01-16 205,705
1,000 Eagan Forest Ridge Apartments Project (FHA Insured).............. 7.50 09-01-17 1,049,490
400 Eden Prairie Multifamily Revenue, Eden Investments (FHA Insured). 7.40 08-01-25 420,876
1,585 Eden Prairie Multifamily Windslope Apartments (Section 8)........ 7.10 11-01-17 1,640,285
7,605 Eden Prairie Multifamily Homes, Tanger Creek (GNMA Insured)...... 8.05 06-20-31 8,640,497
695 Eden Prairie Multifamily Homes Sub Tanager Creek................. 8.00 06-21-31 698,475
1,650 Edina Park Plaza (FHA Insured)................................... 7.50 12-01-09 1,758,108
1,250 Edina Park Plaza (FHA Insured)................................... 7.70 12-01-28 1,316,012
1,000 Hopkins Renaissance Section 8.................................... 6.38 04-01-20 1,004,810
1,000 Maplewood Hazel Ridge Apartments................................. 9.25 12-01-00 (c) 1,044,110
2,135 Minneapolis Community Development Agency and St. Paul
Housing Redevelopment Agency Family Housing Phase II.......... 7.75 07-01-06 2,197,449
1,000 Minneapolis Housing Facility Revenue 1993 Augustana Chapel View.. 7.00 04-01-18 987,760
4,000 Minneapolis Multifamily Mortgage Seward Towers (GNMA Backed)..... 7.38 12-20-30 4,205,840
1,000 Minnesota Housing Finance Agency Housing Development
(Section 8)................................................... 7.80 08-01-18 1,034,000
1,500 Minnesota Housing Finance Agency Multifamily Housing............. 6.95 02-01-14 1,561,605
745 Minnesota Housing Finance Agency Multifamily Housing............. 6.95 08-01-17 767,991
1,250 Minnesota Housing Finance Agency Rental Housing Series B......... 6.25 08-01-22 1,252,687
465 Minnesota Housing Finance Agency Single Family Mortgage
Series C...................................................... 7.65 07-01-08 497,355
380 Minnesota Housing Finance Agency Single Family Mortgage.......... 7.30 07-01-09 398,020
190 Minnesota Housing Finance Agency Single Family Mortgage
Series B...................................................... 7.30 07-01-10 199,010
1,010 Minnesota Housing Finance Agency Single Family Mortgage
Series C...................................................... 7.10 07-01-11 1,057,440
1,045 Minnesota Housing Finance Agency Single Family Mortgage
86 Series B................................................... 7.25 07-01-16 1,061,187
2,000 Minnetonka Multifamily - Beacon Hill Project..................... 7.70 06-01-25 2,055,000
1,500 Red Wing Housing and Redevelopment Agency Jordan
Tower (Section 8)............................................. 7.00 01-01-19 1,547,700
2,250 St. Cloud Germain Towers Housing Series 1993 (Section 8)......... 5.90 09-01-20 2,121,840
2,045 St. Cloud Housing and Redevelopment Agency Northway
A&B Project (Section 8)....................................... 7.50 12-01-18 2,065,450
3,855 St. Louis Park Multifamily Housing Revenue (FHA Insured)......... 6.25 12-01-28 3,873,465
3,865 St. Louis Park Multifamily Westwind Apartments Housing
(GNMA Backed)................................................. 5.75 01-01-29 3,699,887
1,890 St. Louis Park Single Family (GNMA Backed)....................... 7.25 04-20-23 1,982,477
1,000 St. Paul Housing and Redevelopment Agency Como Lake Project
(FHA Insured)................................................. 7.01%(i) 03-01-26 930,000
73 St. Paul Housing and Redevelopment Agency Single Family
Mortgage (FNMA Backed)........................................ 6.90 12-01-11 76,435
1,795 St. Paul Housing and Redevelopment Agency Single Family
Mortgage (FNMA Backed)........................................ 6.90 12-01-21 1,861,164
2,130 Wadena Housing and Redevelopment Agency Humphrey
Manor (Section 8)............................................. 6.00 02-01-19 2,035,194
1,110 Wells Housing and Redevelopment Agency Broadway Apartment
Project (Section 8).......................................... 7.00 01-01-19 1,159,684
2,050 Willmar Housing and Redevelopment Agency Highland
Apartments (Section 8)........................................ 5.85 06-01-19 1,956,930
-------------
65,781,351
-------------
EDUCATION (1.8%):
-------------------------------------------------------------------------------------------------------
1,000 Minnesota Higher Education Augsburg College Series 4F1........... 6.25 05-01-23 987,090
4,000 Minnesota Higher Education Carleton College...................... 5.75 11-01-12 4,020,520
1,360 Minnesota Higher Education St. Thomas University Series R2....... 5.60 09-01-14 1,322,151
1,540 St. Paul HRA St. Paul Academy Series 1993 ....................... 5.45 10-01-23 1,416,076
-------------
7,745,837
-------------
CERTIFICATE OF PARTICIPATION (0.4%):
-------------------------------------------------------------------------------------------------------
1,809 West St. Paul Commercial Mortgage (K-Mart Lessee)................ 7.00 11-01-07(j) 1,816,414
-------------
TRANSPORTATION (0.9%):
-------------------------------------------------------------------------------------------------------
3,000 Puerto Rico Commonwealth Highway & Transportation................ 5.50 07-01-26 2,806,620
1,000 Puerto Rico Highway Revenue...................................... 6.25 07-01-14 1,043,010
-------------
3,849,630
-------------
OTHER REVENUE (1.6%):
-------------------------------------------------------------------------------------------------------
5,750 Minneapolis Community Development Agency Zero Coupon
(MBIA Insured)................................................ 6.70(g) 09-01-09 2,793,867
855 Minneapolis Community Development Agency Common Bond Fund........ 7.95 12-01-11 917,586
795 Minneapolis Community Development Agency Common Bond Fund........ 7.40 12-01-21 826,554
510 Minneapolis Community Development Agency Limited Tax Series
1991-4 Opportunity............................................ 7.13 12-01-05 544,032
1,000 Seaway Port Authority Rfdg. Series A............................. 5.75 12-01-16 943,810
1,120 St. Louis Park Refunding Revenue G & K Partner, Methodist
Hospital Guaranteed........................................... 7.25 06-01-13 1,156,411
-------------
7,182,260
-------------
TOTAL INVESTMENTS IN SECURITIES (cost: $424,335,368) (f) $ 435,275,077
=============
</TABLE>
See accompanying notes to investments in securities.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA INSURED FUND
INVESTMENTS IN SECURITIES (UNAUDITED) JUNE 30, 1996
- -------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (d) RATE MATURITY VALUE (a)
- -------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
MINNESOTA MUNICIPAL BONDS (98.8%):
ESCROWED WITH U.S. GOVERNMENT BONDS (24.2%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,065 Brainerd Independent School District #181 ((FGIC Insured)........ 7.00% 06-01-01 $ 1,166,367
700 Centennial Independent School District #12 (FSA Insured)......... 7.15 02-01-00 757,274
200 Centennial Independent School District #12 (FSA Insured)......... 7.10 02-01-00 216,038
9,000 Dakota, Washington & Anoka Single Family Housing
(GNMA Insured)................................................ 8.45(e) 09-01-19 11,698,380
14,115 Dakota & Washington Counties HRA Single Family Mortgage
Revenue (GNMA Insured)........................................ 8.38(e) 09-01-21 18,042,357
405 Dakota & Washington Counties HRA (MBIA Insured).................. 8.15(e) 09-01-16 501,613
500 Delano Independent School District #879 (AMBAC Insured).......... 7.25 02-01-01 549,785
1,060 Duluth EDA Healthcare-Duluth Clinic (AMBAC Insured).............. 6.30 11-01-04 1,149,835
200 Elk River Independent School District #728 (FSA Insured)......... 7.00 02-01-00 214,364
1165 Elk River Independent School District #728 (FSA Insured)......... 6.30 02-01-02 1,245,467
450 Lake of the Woods Independent School District #390
(AMBAC Insured)............................................... 7.35 02-01-99 480,978
5,935 Maplewood Independent School District #622 (MBIA Insured)........ 7.10 02-01-19 6,755,514
11,525 Maplewood Independent School District #622 (FSA Insured)......... 7.10 02-01-25 13,118,331
760 Minnesota State University System (MBIA Insured)................. 7.40 06-30-99 821,324
520 South Washington County Independent School District #833
(FGIC Insured)................................................ 6.88 06-01-00 558,225
670 Southern Minnesota Municipal Power Agency (AMBAC Insured)........ 5.75 01-01-18 659,448
3,790 Southern Minnesota Municipal Power Agency-Refunded/Series A
(AMBAC Insured)............................................... 5.75 01-01-18 3,730,307
500 St. Cloud Hospital Facility Revenue (AMBAC Insured).............. 7.00 07-01-01 556,935
500 St. Cloud Hospital Facility Revenue (AMBAC Insured)............ 6.75 07-01-01 551,440
250 St. Francis Independent School District #15 (FGIC Insured)....... 7.60 02-01-98 262,442
500 St. Louis Park Methodist Hospital (AMBAC Insured)................ 7.25 07-01-00 554,445
725 St. Michael-Albert Independent School District (AMBAC Insured)... 7.25 02-01-98 754,000
775 St. Michael-Albert Independent School District (AMBAC Insured)... 7.25 02-01-98 806,000
255 St. Michael-Albert Independent School District (AMBAC Insured)... 7.25 02-01-98 265,200
795 St. Michael-Albert Independent School District (AMBAC Insured)... 7.25 02-01-98 826,800
1,000 Stillwater Independent School District #834 (FGIC Insured)....... 6.75 02-01-99 1,050,660
500 Washington County HRA Jail Facilities (MBIA Insured)............ 7.00 02-01-02 551,450
2,000 Western Minnesota Municipal Power Agency, Escrowed to Maturity... 6.60 01-01-10 2,181,680
530 Western Minnesota Municipal Power Agency (MBIA Insured).......... 9.75 01-01-16 770,117
1,000 Wright County (FSA Insured)...................................... 7.20(e) 12-01-99 1,079,850
------------
71,876,626
------------
GENERAL OBLIGATION (35.5%):
-------------------------------------------------------------------------------------------------------
1,575 Alexandria Independent School District #206 (MBIA Insured)....... 6.30 02-01-11 1,648,269
1,675 Alexandria Independent School District #206 (MBIA Insured)....... 6.30 02-01-12 1,746,539
1,775 Alexandria Independent School District #206 (MBIA Insured)....... 6.30 02-01-13 1,843,870
8,045 Anoka County (FGIC Insured)...................................... 5.90 02-01-11 8,154,975
6,300 Becker (MBIA Insured)............................................ 6.25(e) 08-01-15 6,458,823
2,000 Big Lake Independent School District #727 (AMBAC Insured)........ 5.70 02-01-13 1,999,900
1,030 Buffalo Independent School District #887 (FSA Insured)........... 6.10 02-01-15 1,048,890
515 Carver County HRA Jail Facility (MBIA Insured)................... 6.40 02-01-10 539,792
550 Carver County HRA Jail Facility (MBIA Insured)................... 6.40 02-01-11 575,432
585 Carver County HRA Jail Facility (MBIA Insured)................... 6.40 02-01-12 610,307
625 Carver County HRA Jail Facility (MBIA Insured)................... 6.40 02-01-13 650,213
670 Carver County HRA Jail Facility (MBIA Insured)................... 6.40 02-01-14 694,817
1,135 Dakota County (AMBAC Insured).................................... 6.40 02-01-08 1,183,237
1,000 Dakota County (AMBAC Insured).................................... 6.45 02-01-09 1,043,750
2,500 Dakota County (AMBAC Insured).................................... 6.45 02-01-10 2,609,375
1,125 Eden Prairie Independent School District #272, Inverse Floater
(MBIA Insured)................................................ 6.32(m) 02-01-14 954,203
1,000 Eden Prairie Independent School District #272, Inverse Floater
(MBIA Insured)................................................ 6.32(m) 02-01-15 841,200
2,500 Eden Prairie Independent School District #272 (FGIC Insured)..... 5.85 02-01-13 2,511,525
6,200 Eden Prairie Independent School District #272 (FGIC Insured)..... 5.65 02-01-13 6,166,706
1,075 Elk River Independent School District #728 A (AMBAC Insured)..... 6.00 02-01-09 1,112,840
3,950 Elk River Independent School District #728 Series 92 B
(AMBAC Insured)............................................... 6.00 02-01-09 4,066,999
230 Ellendale-Geneva Independent School District #762
(AMBAC Insured)............................................... 6.00 02-01-10 235,881
245 Ellendale-Geneva Independent School District #762
(AMBAC Insured)............................................... 6.00 02-01-11 250,250
265 Ellendale-Geneva Independent School District #762
(AMBAC Insured)............................................... 6.00 02-01-12 269,876
280 Ellendale-Geneva Independent School District #762
(AMBAC Insured).............................................. 6.00 02-01-13 284,385
300 Ellendale-Geneva Independent School District #762
(AMBAC Insured)............................................... 6.00 02-01-14 303,879
320 Ellendale-Geneva Independent School District #762
(AMBAC Insured).............................................. 6.00 02-01-15 324,137
850 Farmington Independent School District #192 (MBIA Insured)....... 6.80 02-01-11 897,651
1,800 Hennepin County (MBIA Insured)................................... 5.75 10-01-10 1,822,194
1,900 Hopkins Independent School District #270 (MBIA Insured).......... 4.80 02-01-10 1,753,472
2,500 Hopkins Independent School District #270 (MBIA Insured).......... 4.85 02-01-12 2,277,600
3,875 Hopkins Independent School District #270 (MBIA Insured).......... 4.88 02-01-14 3,475,139
1,100 Mankato Independent School District #77 (FSA Insured)............ 5.20 02-01-10 1,068,672
475 Moorhead Independent School District #152 (AMBAC Insured)........ 5.90 02-01-10 481,422
505 Moorhead Independent School District #152 (AMBAC Insured)........ 5.90 02-01-11 510,813
540 Moorhead Independent School District #152 (AMBAC Insured)........ 5.90 02-01-12 545,135
575 Moorhead Independent School District #152 (AMBAC Insured)........ 6.00 02-01-13 581,601
1,930 North Branch Independent School District (FGIC Insured)......... 5.49 02-01-11 1,907,612
2,000 Prior Lake Independent School District #719 (FGIC Insured)....... 5.13 02-01-14 1,846,960
500 Roseau Independent School District #682 (AMBAC Insured).......... 7.00 02-01-16 529,375
1,860 Rosemount Independent School District #196 Zero Coupon
(FSA Insured)................................................. 5.80(g) 04-01-09 924,643
2,240 Rosemount Independent School District #196 Series B Zero Coupon
(FSA Insured)................................................. 5.85(g) 04-01-10 1,040,122
625 South St. Paul Independent School District #6 (FGIC Insured)..... 6.25 02-01-10 641,675
500 South St. Paul Independent School District #6 (FGIC Insured)..... 6.45 02-01-11 516,650
300 South St. Paul Independent School District #6 (FGIC Insured)..... 6.45 02-01-12 309,351
1,430 South Washington County Independent School District #833
(FGIC Insured)................................................ 6.13 06-01-09 1,472,871
2,720 South Washington County Independent School District #833
(FGIC Insured)................................................ 6.13 06-01-11 2,787,918
4,350 Spring Lake Park Independent School District #16
(MBIA Insured)............................................... 5.23 02-01-14 4,084,302
1,580 Spring Lake Park Independent School District #16 (MBIA Insured).. 5.20 02-01-09 1,544,308
1,000 St. Cloud Independent School District #742 (FGIC Insured)....... 6.05 02-01-09 1,033,190
1,845 St. Francis Independent School District #15 (FGIC Insured)....... 5.90 04-01-10 1,879,704
5,995 Stillwater Independent School District #834 (FGIC Insured)....... 5.50 02-01-10 5,966,404
3,960 Warroad Independent School District #690 (AMBAC Insured)......... 5.20 02-01-13 3,758,634
400 Western Lake Superior Series A (MBIA Insured).................... 6.00(l) 10-01-08 403,000
425 Western Lake Superior Series A (MBIA Insured).................... 6.10(e)(l) 10-01-09 428,188
450 Western Lake Superior Series A (MBIA Insured).................... 6.20(e)(l) 10-01-10 453,375
475 Western Lake Superior Series A (MBIA Insured).................... 6.20(e)(l) 10-01-11 478,563
7,625 White Bear Lake Independent School District #624 (FSA Insured)... 5.30 02-01-11 7,413,559
4,100 Willmar Independent School District #347 (AMBAC Insured)......... 6.25 02-01-15 4,205,616
-------------
105,169,789
------------
UTILITIES (7.1%):
-------------------------------------------------------------------------------------------------------
5,250 Bass Brook Pollution Control Revenue for Minnesota
Power & Light Company (MBIA Insured).......................... 6.00 07-01-22 5,264,175
500 Marshall Utility Revenue (FSA Insured)........................... 6.45 07-01-10 530,845
100 Marshall Utility Revenue (FSA Insured)........................... 6.45 07-01-11 105,978
500 Marshall Utility Revenue (FSA Insured)........................... 6.50 07-01-12 529,835
500 Marshall Utility Revenue (FSA Insured)........................... 6.50 07-01-13 527,905
1,735 Moorhead Public Utilities (MBIA Insured)......................... 6.25 11-01-12 1,800,219
4,200 Northern Minnesota Municipal Power Agency Series B
(AMBAC Insured)............................................... 5.50 01-01-18 4,046,322
1,500 Southern Minnesota Municipal Power Agency Power Supply Revenue
(FGIC Insured)................................................ 5.73 01-01-18 1,478,685
1,000 Southern Minnesota Municipal Power Agency Revenue
(MBIA Insured)................................................ 4.75 01-01-16 865,000
1,330 Southern Minnesota Municipal Power Agency (AMBAC Insured)........ 5.75 01-01-18 1,313,841
4,570 Southern Minnesota Municipal Power Agency (FGIC Insured)......... 5.75 01-01-18 4,514,474
------------
20,977,279
------------
INDUSTRIAL (0.5%):
-------------------------------------------------------------------------------------------------------
1,500 Minnesota Public Facility Authority Water Pollution Control
(MBIA Insured)................................................ 6.50 03-01-14 1,584,165
-----------
------------
HEALTH CARE (20.9%):
-------------------------------------------------------------------------------------------------------
1,250 Bloomington Masonic Home Care Center (AMBAC Insured)............. 5.90 07-01-09 1,270,675
1,500 Brainerd Benedictine Health Care Systems (Connie Lee Insured).... 6.00 02-15-12 1,508,895
2,000 Brainerd Benedictine Health Care Systems(Connie Lee Insured)..... 6.00 02-15-20 1,979,920
1,630 Detroit Lakes Benedictine Health (Connie Lee Insured)............ 6.00 02-15-12 1,645,143
2,135 Detroit Lakes Benedictine Health (Connie Lee Insured)............ 6.00 02-15-19 2,128,809
2,690 Duluth EDA HealthCare-Duluth Clinic. (AMBAC Insured) ............ 6.30 11-01-22 2,757,062
10,000 Duluth EDA HealthCare -Duluth Clinic (Connie Lee Insured)........ 5.99 02-15-17 9,996,900
3,335 Duluth St. Luke's Hospital (Connie Lee Insured).................. 6.40 05-01-10 3,504,485
2,000 Duluth St. Luke's Hospital (Connie Lee Insured).................. 6.40 05-01-18 2,063,540
3,000 Minneapolis Fairview Hospital Series 91B (MBIA Insured).......... 6.50 01-01-11 3,170,550
3,750 Minneapolis Fairview Hospital Series 93A (MBIA Insured).......... 5.25 11-15-19 3,441,000
2,370 Minneapolis HRA HealthOne (MBIA Insured)......................... 7.40 08-15-11 2,601,075
12,190 Minneapolis/Saint Paul Healthspan Series 93A (AMBAC Insured)..... 5.00 11-15-13 11,051,332
3,625 Minneapolis/St. Paul HRA Childrens Hospital (FSA Insured)........ 5.70 08-15-16 3,555,695
3,100 Robbinsdale North Memorial Medical (AMBAC Insured)............... 5.45 05-15-13 2,967,940
5,400 Robbinsdale North Memorial Medical (AMBAC Insured)............... 5.50 05-15-23 5,082,588
2,500 St. Louis Park Healthcare Inverse Floater (AMBAC Insured)........ 6.47(m) 07-01-23 1,969,700
1,200 St. Paul Ramsey Medical (AMBAC Insured).......................... 5.50 05-15-13 1,161,504
------------
61,856,813
------------
HOUSING (9.9%):
-------------------------------------------------------------------------------------------------------
3,257 Chaska Waters Edge Multifamily Revenue (GNMA Insured)............ 7.30 01-20-30 3,507,496
6,450 Dakota County HRA Single Family Mortgage Revenue
(FNMA Insured)................................................ 6.70 10-01-17 6,640,146
200 Dakota, Washington and Stearns Counties HRA Single Family
Mortgage Revenue (MBIA Insured).............................. 7.85(e) 12-01-30 211,226
3,790 Hopkins Multi Finance Housing-Auburn Apartments
(GNMA Insured)................................................ 8.05 06-20-31 4,306,046
2,600 Minnesota Housing Finance Agency Single Family Housing Rental
(AMBAC Insured)............................................... 5.95 02-01-15 2,592,616
400 Minnesota Housing Finance Agency Single Family Housing
Series C (MBIA Insured)....................................... 9.00(e)(h) 08-01-18 417,680
180 Minnesota Housing Finance Agency Single Family Mortgage
Revenue Series 1988C (MBIA Insured)........................... 8.50(e)(h) 07-01-19 188,320
345 Minnesota Housing Finance Agency Single Family Mortgage
Revenue (AMBAC Insured)....................................... 7.95(e) 07-01-22 367,694
1,435 Minnesota Housing Finance Agency Single Family Mortgage
Revenue (AMBAC Insured)....................................... 7.45(e) 07-01-22 1,506,291
510 Minnesota Housing Finance Agency Single Family Mortgage
Revenue (AMBAC Insured)....................................... 7.05(e) 07-01-22 525,565
90 Minneapolis and St. Paul Housing Finance Board Housing Project
Phase V (GNMA Collateral) .................................... 8.88(e) 11-01-18 95,013
1,330 Minneapolis and St. Paul Housing Finance Board Housing Project
Phase IX (GNMA Collateral).................................... 7.25(e) 08-01-21 1,385,780
890 Minneapolis and St. Paul Housing Finance Board Housing Project
Phase IX (GNMA Collateral).................................... 7.30(e) 08-01-31 925,146
180 Minneapolis and St. Paul Housing Finance Board Single Family
Mortgage Revenue (GNMA Backed)................................ 8.13(e) 12-01-14 190,568
140 Minneapolis and St. Paul Housing Finance Board Single Family
Mortgage Revenue (GNMA Backed)................................ 8.30(e) 08-01-21 146,958
4,000 St. Paul HRA Multifamily Housing (FNMA Backed)................... 6.60 10-01-12 4,140,680
2,410 South St. Paul HRA Single Family Mortgage Series 1993
(FNMA Insured)................................................ 5.75 09-01-20 2,325,987
-------------
29,473,212
------------
OTHER REVENUE (0.7%):
-------------------------------------------------------------------------------------------------------
2,000 Stearns County HRA Courthouse Project (AMBAC Insured)............ 7.00 02-01-11 2,127,500
------------
TOTAL INVESTMENTS IN SECURITIES (cost: $285,371,590) (f) $293,065,384
============
</TABLE>
See accompanying notes to investments in securities.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA LIMITED TERM TAX FREE FUND
INVESTMENTS IN SECURITIES (UNAUDITED) JUNE 30, 1996
- -------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (d) RATE MATURITY VALUE (a)
- -------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
MINNESOTA MUNICIPAL BONDS (97.7%):
ESCROWED WITH U.S. GOVERNMENT BONDS (55.8%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$1,205 Austin Independent School District #492 (MBIA Insured)........... 6.88% 02-01-01 $ 1,303,015
3,015 Braham Independent School District #314 (AMBAC Insured).......... 6.30 02-01-01 3,198,734
250 Duluth EDA St. Mary's............................................ 7.80 02-15-97 255,800
250 Duluth EDA St. Mary's............................................ 7.90 02-15-98 264,093
150 Duluth EDA St. Mary's............................................ 7.90 02-15-99 162,099
615 Eden Valley Watkins Independent School District #463
(FSA Insured)................................................. 6.60 02-01-02 666,396
250 Eden Valley Watkins Independent School District #463
(FSA Insured)................................................ 6.55 02-01-02 270,288
2,570 Mankato Independent School District #77 G.O. (FSA Insured)....... 6.35 02-01-02 2,744,657
1,410 Minneapolis Hennepin Avenue Series C G.O......................... 6.70 03-01-02(c) 1,542,047
400 Minneapolis/Saint Paul HealthOne Series C........................ 7.45 08-15-99 432,840
325 Minneapolis/Saint Paul HealthOne Series B........................ 7.55 08-15-00 358,767
4,000 Minnesota State.................................................. 6.25 08-01-02 4,304,600
800 Olmsted County................................................... 6.85 02-01-01 869,384
900 Olmsted County................................................... 6.90 02-01-01 979,884
950 Olmsted County Solid Waste Recovery.............................. 6.95 02-01-01 1,036,260
1,500 Rush City Independent School District #139 (AMBAC Insured)....... 6.30 02-01-01 1,591,410
5,805 St. Cloud Hospital (AMBAC Insured)............................... 7.00 07-01-01 6,466,015
500 St. Cloud Hospital Facility Revenue (AMBAC Insured).............. 7.00 07-01-01 556,935
215 St. James IDR Tony Downs Food Company Project.................... 8.00 08-01-96 215,685
3,500 St. Louis Park Methodist Hospital (AMBAC Insured)................ 7.25 07-01-00 3,881,115
3,000 Waconia Independent School District #110 (FGIC Insured).......... 6.40 02-01-00 3,156,930
4,000 Washington County Jail (MBIA Insured)............................ 7.00 02-01-02 4,411,600
------------
38,668,554
-----------
GENERAL OBLIGATION (6.5%):
-------------------------------------------------------------------------------------------------------
1,000 Eden Prairie Independent School District #272.................... 5.25 02-01-02 1,017,540
500 Edina Independent School District #273........................... 5.40 02-01-03 512,370
3,260 Lakeville Independent School District Zero Coupon................ 5.22(g) 02-01-06 1,964,248
810 North Branch Independent School District #138 Series A
(FGIC Insured)................................................ 5.20 02-01-07 806,711
225 Western Lake Superior Sanitation District........................ 6.10 10-01-00 231,230
------------
4,532,099
-----------
UTILITIES (6.4%):
-------------------------------------------------------------------------------------------------------
2,500 Eveleth IDR for Minnesota Power & Light Company.................. 6.13 01-01-04 2,585,600
860 Northern Minnesota Municipal Power Agency........................ 7.20 01-01-99 912,125
1,000 Southern Minnesota Municipal Power Agency Revenue
(FGIC Insured)................................................ 5.00 01-01-08 961,270
------------
4,458,995
-----------
INDUSTRIAL (12.7%):
-------------------------------------------------------------------------------------------------------
1,000 Brooklyn Center CDR Brookdale Association........................ 5.70 06-01-01 1,000,050
260 Duluth Convention Center......................................... 5.75 12-01-97 262,132
275 Duluth Convention Center......................................... 6.00 12-01-98 278,960
1,250 Duluth Convention Center......................................... 7.00 12-01-03 1,329,950
250 Duluth Gross Revenue Rec. Facility Duluth Entertainment.......... 7.30 12-01-06 270,047
1,720 Minnesota Public Facilities Authority Revenue Series A........... 6.55 03-01-03 1,867,301
1,175 Olmsted County Resource Recovery Series A........................ 5.90 02-01-05 1,219,509
300 St. Paul HRA Minnesota Public Radio, First Bank Letter of Credit. 6.40 06-01-98 309,963
100 St. Paul HRA Minnesota Public Radio, First Bank Letter of Credit. 6.60 06-01-99 105,164
2,000 St. Paul Minnesota CDR Fort Rd Med (Asset Guaranty).............. 7.50 09-01-02 2,138,680
----------
8,781,756
-----------
HEALTH CARE (2.9%):
-------------------------------------------------------------------------------------------------------
100 Fergus Falls Health Care Facility ............................... 6.20 11-01-05 98,463
200 Fergus Falls Health Care Facility................................ 6.30 11-01-06 196,708
200 Fergus Falls Health Care Facility................................ 6.40 11-01-07 197,164
240 Fergus Falls Health Care Facility................................ 6.60 11-01-09 235,889
260 Fergus Falls Health Care Facility................................ 6.70 11-01-10 256,513
200 Rochester Nursing Home & Multi Family Housing Revenue............ 5.60 05-01-02 197,348
250 Rochester Nursing Home & Multi Family Housing Revenue............ 5.80 05-01-03 248,313
300 Rochester Nursing Home & Multi Family Housing Revenue............ 6.00 05-01-04 298,236
250 Rochester Nursing Home & Multi Family Housing Revenue............ 6.10 05-01-05 248,395
-----------
1,977,029
-----------
HOUSING (1.4%):
-------------------------------------------------------------------------------------------------------
580 Burnsville Multifamily Housing Revenue Burnsville Apts Project,
TCF Letter of Credit.......................................... 7.00 09-01-99(c) 591,600
115 Eden Prairie Multifamily Mortgage Revenue - Section 8 Series 91.. 5.80 11-01-96 115,428
215 Mankato Multifamily Housing Hi Hills (Asset Guaranty)............ 7.75 10-01-97(c) 217,068
70 Minnesota HFA Single Family Mortgage Revenue Series C............ 6.30 01-01-99 72,258
----------
996,354
-----------
EDUCATION (9.6%):
-------------------------------------------------------------------------------------------------------
3,700 Minnesota Higher Education Facility Authority Augsburg
Series 4F2.................................................... 5.75 05-01-16 3,656,562
3,000 Regents of University of Minnesota............................... 4.80 08-15-03 2,962,500
----------
6,619,062
-----------
CERTIFICATES OF PARTICIPATION (0.1%):
-------------------------------------------------------------------------------------------------------
47 Red Wing Pottery Project......................................... 7.75(k) 12-15-97 47,456
------------
OTHER REVENUE (2.3%):
-------------------------------------------------------------------------------------------------------
225 Minneapolis CDA Limited Tax Revenue - Common Bond Fund........... 7.90 06-01-97 231,230
1,290 Richfield Minnesota, Richfield Shoppes........................... 7.50 10-01-04 1,362,562
-----------
1,593,792
TOTAL INVESTMENTS IN SECURITIES (cost: $65,668,620) (f) $67,675,097
===========
</TABLE>
See accompanying notes to investments in securities.
VOYAGEUR MINNESOTA HIGH YIELD FUND
VOYAGEUR MINNESOTA TAX FREE FUND
VOYAGEUR MINNESOTA INSURED FUND
VOYAGEUR MINNESOTA LIMITED TERM TAX FREE FUND
NOTES TO INVESTMENTS IN SECURITIES (UNAUDITED)
- --------------------------------------------------------------------------------
(a) Securities are valued by procedures described in note 1 to the financial
statements.
(b) This security, representing 1.06% of total net assets, has been identified
by portfolio management as an illiquid security.
(c) The maturity dates for these issues represent mandatory puts or dates on
which, in the opinion of the Fund's investment advisor, the issue is
likely to be called.
(d) Investments in bonds, by rating category (unaudited) as a percentage of
total bonds, are as follows:
<TABLE>
<CAPTION>
Non-
Aaa/AAA Aa/AA A/A Baa/BBB rated Total
------- ----- --- ------- ----- -----
<S> <C> <C> <C> <C> <C>
Minnesota High Yield Fund................... 49% 31% 10% -- 10% 100%
Minnesota Tax Free Fund..................... 62% 10% 12% 7% 9% 100%
Minnesota Insured Fund...................... 100% -- -- -- -- 100%
Minnesota Limited Term Tax Free Fund........ 62% 15% 5% 9% 9% 100%
</TABLE>
(e) These securities are subject to the Alternative Minimum Tax. The aggregate
market value of securities subject to the Alternative Minimum Tax is equal
to 15.2% of total net assets for Minnesota Insured Fund.
(f) Also represents the cost of securities for federal income tax purposes for
Minnesota Tax Free Fund and Minnesota Limited Term Tax Free Fund. The cost
of securities for federal income tax purposes for Minnesota Insured Fund
is $285,371,590. The aggregate gross unrealized appreciation and
depreciation in securities based on these costs are as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Unrealized Unrealized Unrealized
Appreciation Depreciation Appreciation
------------ ------------ ------------
<S> <C> <C> <C>
Minnesota High Yield Fund................... $ 15,206 $ (982) $ 14,224
Minnesota Tax Free Fund..................... 14,104,567 (3,164,858) 10,939,709
Minnesota Insured Fund...................... 9,318,319 (2,068,024) 7,250,295
Minnesota Limited Term Tax Free Fund........ 2,135,953 (129,476) 2,006,477
</TABLE>
(g) The interest rate disclosed for zero coupon issues represents the
effective yield on the date of acquisition.
(h) Identifies issue covered under portfolio insurance purchased by the Fund.
(i) At June 30, 1996 the principal amount of issue in default amounted to
$1,000,000 for Minnesota Tax Free Fund. However, this issue is in default
as to the timely receipt of principal but is current as to interest
including interest at the stated rate since the maturity dates. This issue
is being valued based on procedures selected in good faith by the Board of
Directors.
(j) Minnesota Tax Free Fund entered into the following restricted security
transactions: on September 2, 1986, the Fund purchased $2,148,650 of
original par of West St. Paul Commercial Mortgage (K-Mart) with a cost
basis of $1,891,822, and on April 20, 1994, the Fund purchased $2,200,000
par of Richfield Commercial Development Revenue for Richfield Shoppes with
a cost basis of $2,200,000. These private placements are considered
illiquid and are equal to 1.0% of total net assets.
(k) Minnesota Limited Term Tax Free Fund entered into the following restricted
security transactions: on October 2, 1985 the Fund purchased $165,531 of
original par of Red Wing Pottery Project with a par value and cost basis
of $47,456 as of June 30, 1996. This private placement represents all of
the restricted illiquid securities owned by the Fund and is equal to 0.1%
of total net assets.
(l) At June 30, 1996, the cost of securities purchased on a when issued basis
was $197,160 for Minnesota High Yield Fund, $2,350,000 for Minnesota Tax
Free Fund and $1,750,000 for Minnesota Insured Fund.
(m) Inverse floater, represents a security that pays interest at rates that
increase (decrease) with a decline (increase) in a general money market
index. Interest rate disclosed is the rate in effect on June 30, 1996.
INVESTMENT ADVISER, TRANSFER AGENT,
DIVIDEND DISBURSING AGENT AND
ACCOUNTING SERVICES AGENT
Voyageur Fund Managers, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, MN 55402
UNDERWRITER
Voyageur Fund Distributors, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, MN 55402
CUSTODIAN
Norwest Bank Minnesota, N.A.
Sixth Street & Marquette Avenue
Minneapolis, MN 55479
GENERAL COUNSEL
Dorsey & Whitney P.L.L.P.
Minneapolis, MN 55402
AUDITORS
KPMG Peat Marwick LLP
Minneapolis, MN 55402
[LOGO] VOYAGEUR ON CALL (TM)
[LINE DRAWING: TELEPHONE RINGING]
800.545.3863
We invite you to use the Voyageur interactive voice response system, Voyageur
On Call (TM) (800.545.3863). The system is designed to give you information
about the Fund(s) in your account. It can also provide price and yield
information for the Fund(s). 24-hour access available to Touch Tone telephones
only.
[LOGO] Voyageur
Your tax sensitive investment manager
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402-4115
