<PAGE>
For Tax-Exempt Income
DELAWARE-VOYAGEUR
Minnesota Municipal
Bond Funds
1997
Semi-Annual
Report
professional management
service and guidance
goals
Tax-Free Minnesota Fund
Minnesota Insured Fund
Tax-Free Minnesota Intermediate Fund
Minnesota High Yield Municipal Bond Fund
DELAWARE
GROUP
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professional management
professional management
More Than 68 Years Of Investment Experience
has taught us that disciplined strategies and prudent risk management are a
sound approach to any market environment.
[PICTURE OF MAN]
goals
goals
[PICTURE OF BEACH]
Whatever Your Goals,
the years ahead will be shaped by choices you make today. Delaware offers
many options that can be an appropriate part of a sound investment plan.
service and guidance
service and guidance
Delaware Believes That The Guidance of a professional financial adviser is
vital to your long-term success. We are committed to providing you and your
adviser with the highest quality information and service.
[PICTURE OF THREE PEOPLE]
<PAGE>
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JULY 15, 1997
Dear Shareholder:
I am pleased to present the first shareholder report of our Minnesota
Municipal Bond Funds since the Voyageur funds joined the Delaware family on
April 30, 1997.
On behalf of all of us here in Philadelphia, I welcome you to an
organization of experienced financial professionals dedicated to helping you
reach your investment goals. Delaware has managed municipal bond investments
for more than 20 years and pioneered the concept of single-state, tax-exempt
funds.
I am delighted to report that during this transition period, three of
the Minnesota Funds outperformed their unmanaged benchmarks, as shown on page
10. Elizabeth H. Howell, the Funds' portfolio manager under Voyageur, continues
to oversee all four Minnesota portfolios from her office in Minneapolis.
We view the municipal bond market's long-term prospects as very
attractive, particularly in a state with an economy as diverse as Minnesota's.
Municipal bond prices have generally been stronger than U.S. Treasuries* during
1997, despite pending federal tax changes in Washington and a modest tightening
of monetary policy by the Federal Reserve Board.
IN THE COMING YEARS, WE BELIEVE IT WILL BECOME MORE IMPORTANT THAN EVER TO
CONSIDER THE IMPACT OF TAXES ON THE PERFORMANCE OF AN INVESTMENT PORTFOLIO.
As our nation's leaders grapple with tax issues and states take on a
greater fiscal responsibility for managing social and public works programs,
we believe it will become more important than ever to consider the impact of
taxes on the performance of an investment portfolio.
When Delaware offered its first municipal bond fund in 1977, federal
taxpayers were able to take many more deductions on their tax returns than
they can take today. Among these were:
* Interest on student and consumer loans,
* More extensive job-related moving expenses,
* Sales and gasoline taxes; and
* A portion of dividend income.
*THE PRINCIPLE AND INTEREST OF U.S. TREASURY SECURITIES ARE GUARANTEED BY THE
U.S. GOVERNMENT. MINNESOTA MUNICIPAL BONDS MAY OR MAY NOT BE GUARANTEED BY
THE STATE, A PRIVATE INSURER OR LOCAL GOVERNMENT ENTITY.
1997 semi-annual report 1
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In our opinion, the income from municipal bonds and the tax-free
compounding of such income over time has the potential to help investors reach
their financial goals more quickly. In addition to providing income free from
federal taxes, many Minnesota securities have the added benefit of being exempt
from the state's high income tax, which can be as much as 9.9%.
On the pages that follow, Ms. Howell reviews each Fund's performance
and outlines her approach for the coming months. We look forward to reporting
to you again in 1998 and serving your needs for many years to come.
Sincerely,
/s/ Wayne A. Stork
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Wayne A. Stork
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
Your Funds' Portfolio Manager
Prior to joining the Delaware-Voyageur family, Elizabeth H. Howell had managed
municipal bond funds at Voyageur Asset Management for six years. Ms. Howell has
more than 13 years experience that includes serving as a fixed-income portfolio
manager at Windsor Financial Group and investment management positions at Loomis
Sayles & Co. and Eaton Vance Management. She has an MBA from Babson College.
(Photo of Elizabeth H. Howell here)
ELIZABETH H. HOWELL
2 1997 semi-annual report
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Performance Review
Delaware-Voyageur's Minnesota municipal bond funds provided attractive total
returns during the first half of fiscal 1997 despite substantial interest
rate volatility and renewed efforts in Washington to cut income taxes.
With a below-average unemployment rate and an annualized economic
growth rate of 4.8% that ranks 10th nationwide, Minnesota exhibits credit
characteristics attractive to income-oriented investors. Per capita income in
the state is the highest of all Plains states and ranks 9th nationwide, while
the state's general obligation bonds carry a quality rating of AAA, the
highest available (See page 8).
Nationwide, our country's output of goods and services grew at a robust
pace in the first quarter. This prompted the Federal Reserve to raise its target
for short-term interest rates by a modest 25 basis points (0.25%) to 5.5% in an
effort to forestall inflation.
As the second calendar quarter of 1997 progressed, the bond market
welcomed news of possible slower U.S. economic growth. By the end of June,
long-term U.S. Treasury bonds yielded 6.78%, compared to more than 7% just a few
months earlier.
Between December 31, 1996 and mid-year, yields on short and
intermediate-term Minnesota general obligation bonds increased modestly, as
shown in the chart below. Yields on long-term bonds, those maturing in 15
years or more, showed little change during the period.
Short-Term Minnesota Bond Yields Have Risen Modestly
December 31, 1996 vs. June 30, 1997
Yield Yield
Minnesota Minnesota
General Obligation Bonds General Obligation Bonds
Maturity December 31, 1996 June 30, 1997
3 months 3.21% 3.29%
6 months 3.41% 3.47%
1 year 3.58% 3.73%
2 years 3.88% 4.05%
3 years 4.08% 4.26%
4 years 4.23% 4.41%
5 years 4.33% 4.51%
7 years 4.53% 4.67%
10 years 4.83% 4.91%
15 years 5.25% 5.26%
20 years 5.41% 5.41%
30 years 5.47% 5.47%
Source: Bloomberg Business News
1997 semi-annual report 3
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Since December, the supply of new municipal bonds issued in Minnesota
has declined by 38% to an annualized pace of $1.4 billion, according to THE
BOND BUYER, a trade publication. This has helped support the state's bond
prices since investor demand in Minnesota for securities providing tax-exempt
income has remained steady.
During the first half of fiscal 1997, we positioned Tax-Free
Minnesota Fund and Minnesota High-Yield Municipal Bond Fund to benefit from
what we anticipated would be a decline in long-term interest rates. Both
Funds' average effective duration was kept longer than that of their peers,
enabling each to benefit from the rise in bond prices that occurred in May
and June after government statistics showed very modest U.S. inflation.
We took a somewhat more conservative approach to interest rate risk
with Tax-Free Minnesota Intermediate Fund and Minnesota Insured Fund. Still,
the Intermediate Fund outperformed the average of its peers and matched the
return of the Merrill Lynch Three-to-Seven Year Municipal Bond Index (for A
Class shares at net asset value. See page 10 for the performance information
for all classes). The Insured Fund's returns were modestly lower than average,
the result of a shorter-than-average duration.
TAX-FREE MINNESOTA FUND: SEEKING GOOD STRUCTURE
Tax-Free Minnesota Fund provided a +3.37% total return for the six months
ended June 30, 1997 (for A Class shares at net asset value with dividends
reinvested).
The Fund was able to outpace its benchmark by having a longer duration
than our unmanaged benchmark and strong position in general obligation bonds
(16.6% of net assets). General obligation bonds (G.O.s) are primarily backed by
income taxes. They typically have credit characteristics superior to revenue
bonds which are based on user fees. General obligation bonds have performed well
since December.
TAX-FREE MINNESOTA FUND
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
June 30, 1997
Power Authority 16.4%
Higher Education 5.2%
Pre-Refunded Bonds 9.4%
Industrial Development 9.2%
General Obligation 17.3%
Hospitals 20.6%
Housing 17.2%
Other Revenue Bonds 3.2%
Cash 2.2%
Average Effective Maturity 11.1 years
Average Effective Duration 7.8 years
Average Quality AA
Thirty-Day Current SEC Yield* 4.68%
*FOR A CLASS SHARES BASED ON SECURITIES AND EXCHANGE
COMMISSION GUIDELINES. SEC YIELDS FOR B AND C CLASSES
WERE, RESPECTIVELY 4.26% AND 4.12%.
APPROXIMATELY 0.15% OF THE INCOME GENERATED BY TAX-FREE MINNESOTA FUND FOR
THE SIX MONTHS ENDED JUNE 30, 1997, WAS SUBJECT TO THE ALTERNATIVE MINIMUM
TAX.
4 1997 semi-annual report
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In managing the Fund's portfolio, we seek to achieve good structure -
a prudent combination of average coupon, call date, and effective maturity
that represent the mathematical underpinnings of the portfolio. By managing
duration as market conditions warranted, we sought to maximize the fund's
income and total return potential.
In addition to G.O.s, your Fund's portfolio included hospital, power
authority, nursing home, multifamily housing and college bonds as of June 30.
Since December, I have focused on bonds that were selling at a discount to
their face value, with good call protection features and long maturities.
This position enabled the Fund to perform well.
MINNESOTA INSURED FUND:
A CONSERVATIVE APPROACH
Minnesota Insured Fund provided a total return of +2.70% for the six months
ended June 30, 1997 (for A Class shares at net asset value with dividends
reinvested).
In our opinion, the Fund offered a very favorable risk profile relative
to the return we were able to generate. The Insured Fund invests exclusively in
bonds rated AAA by Moody's Investors Services or Standard & Poor's and
insured by a municipal bond insurance company. Consequently, the portfolio is
of the highest credit quality available in the municipal market.
As of June 30, about 20.6% of the Fund's net assets were bonds that
generate income subject to the alternative minimum tax (AMT). Of course, only
certain taxpayers are subject to this federal levy. Generally, we believe
that the superior income potential, favorable risk profile and diversification
benefits offered by certain AMT bonds warrant their inclusion in your Fund's
portfolio.
quality
MINNESOTA INSURED FUND
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
June 30, 1997
Power Authority 5.9%
General Obligations 28.3%
Hospitals 19.6%
Housing 19.3%
Other Revenue Bonds 1.8%
Pre-Refunded Bonds 25.1%
Average Effective Maturity 11.2 years
Average Effective Duration 7.5 years
Average Quality AAA
Thirty-Day Current SEC Yield* 4.42%
*FOR A CLASS SHARES BASED ON SECURITIES AND EXCHANGE
COMMISSION GUIDELINES. SEC YIELDS FOR B AND C CLASSES
WERE, RESPECTIVELY 3.85% AND 3.84%.
APPROXIMATELY 18.4% OF THE INCOME GENERATED BY MINNESOTA INSURED FUND FOR THE
SIX MONTHS ENDED JUNE 30, 1997, WAS SUBJECT TO THE ALTERNATIVE MINIMUM TAX.
1997 semi-annual report 5
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TAX-FREE MINNESOTA INTERMEDIATE FUND: BALANCING RISK AND RETURN For the six
months ended June 30, 1997, Tax-Free Minnesota Intermediate Fund outpaced its
peers and matched the +2.48% total return of Merrill Lynch Three-to-Seven
Municipal Bond Index, an unmanaged benchmark of intermediate-term bonds. The
Fund's duration (sensitivity to interest rates) was almost a full year shorter
than comparable mutual funds, according to Lipper Analytical Services.
We actively manage the Fund to take about 50% less interest rate risk
than Tax-Free Minnesota and Minnesota Insured Funds. The Intermediate Fund
seeks to generate a superior level of income and total return on a
risk-adjusted basis. We focus on very high quality securities.
At the end of June, the Fund had 43% of its holdings in pre-refunded
bonds, or bonds escrowed in U.S. government securities. These bonds are of
the highest credit quality and consequently rated AAA. Pre-refunded bonds are
also among the most liquid of all municipal bonds. They tend to have
above-average coupon rates and fluctuate less in price during periods of
interest rate volatility. The defensive nature of these securities helps
stabilize your Fund's share price. During the first half of 1997, this helped
us produce a stream of income that was about 90% of what is available from
the longest term bonds.
MINNESOTA HIGH YIELD
MUNICIPAL BOND FUND
Minnesota High Yield Municipal Bond Fund provided a total return of +3.98%
for the six months ended June 30, 1997, (for A Class shares at net asset value
with dividends reinvested).
The Fund's strong relative performance during the first half of
income
TAX-FREE MINNESOTA INTERMEDIATE FUND
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
June 30, 1997
Power Authority 5.7%
Higher Education 6.1%
General Obligations 2.4%
Hospitals 10.1%
Housing 3.1%
Other Revenue Bonds 5.1%
Pre-Refunded Bonds 43.1%
Cash 2.7%
Certificates of Participation 3.8%
Industrial Development 17.7%
Average Effective Maturity 5.1 years
Average Effective Duration 4.1 years
Average Quality AA
Thirty-Day Current SEC Yield* 4.01%
*FOR A CLASS SHARES BASED ON SECURITIES AND EXCHANGE COMMISSION GUIDELINES.
SEC YIELDS FOR B AND C CLASSES WERE, RESPECTIVELY 3.36% AND 3.36%.
NONE OF THE INCOME GENERATED BY TAX-FREE MINNESOTA INTERMEDIATE FUND FOR THE
SIX MONTHS ENDED JUNE 30, 1997, WAS SUBJECT TO THE ALTERNATIVE MINIMUM TAX.
6 1997 semi-annual report
<PAGE>
fiscal 1997 resulted from our positioning the Fund for a decline in interest
rates. During the period, the yield differential between high-yield bonds and
higher rated, investment grade bonds narrowed. That is, investors earned less
yield as they moved into lower rated securities compared to what we were able
to earn in prior years.
The High Yield Fund invests in higher risk bonds as well as more
liquid, rated investment grade bonds. As of June 30, approximately 58% of the
Fund's net assets were invested in bonds rated BBB or higher while the
balance was invested in unrated securities.
Our team of municipal credit analysts seeks bonds that are likely to
make timely payment of principal and interest over time. Bonds in the
portfolio must show ongoing credit strength or they are sold. We are pleased
to report that since the Fund's inception in June 1995, all of the bonds in the
Fund's portfolio have shown ongoing credit strength.
The Fund currently has large positions in unrated health care and
housing bonds. Health care includes not only hospitals but nursing homes and
assisted living centers. The housing sector includes financing for single
family homes, apartments, senior citizen communities and low-income (Section
8) housing.
Since the Fund's inception, we have had little difficulty investing
the Fund's more than $20 million in net assets. We have seen a steady flow of
new high-yield bond issues in the state and as of June 30, 1997, we held more
than 50 different issues. In the coming months, the portfolio has the
potential to generate a stream of income we believe will be significantly
higher than the income of investment grade municipal securities.
high yield
MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
June 30, 1997
Power Authority 5.5%
Higher Education 5.1%
Hospitals 37.5%
Housing 31.4%
Certificates of Participation 2.7%
Other Revenue Bonds 14.8%
General Obligations 1.8%
Industrial Development 1.3%
Average Effective Maturity 12.1 years
Average Effective Duration 7.1 years
Average Quality** A
Thirty-Day Current SEC Yield* 5.75%
* FOR A CLASS SHARES BASED ON SECURITIES AND EXCHANGE COMMISSION GUIDELINES.
SEC YIELDS FOR B AND C CLASSES WERE, RESPECTIVELY 5.22% AND 5.23%.
** REPRESENTS AVERAGE QUALITY OF THOSE SECURITIES THAT HAVE RATINGS.
APPROXIMATELY 20.6% OF THE INCOME GENERATED BY MINNESOTA HIGH YIELD MUNICIPAL
BOND FUND FOR THE SIX MONTHS ENDED JUNE 30, 1997, WAS SUBJECT TO THE ALTERNATIVE
MINIMUM TAX.
1997 semi-annual report 7
<PAGE>
SUMMARY OUTLOOK
In Minnesota and across the U.S., inflation appears to be benign. Despite a
strong U.S. economy, the Federal Reserve Board has been able to use monetary
policy to effectively manage consumer price increases. Should long-term
interest rates remain stable or decline for the balance of 1997, municipal
bond investments could potentially provide an attractive real rate
of return.
In our opinion, the long-term outlook for Minnesota's economy and
bond market is bright. Annual growth in per capita personal and disposal
income has been averaging about 7% in recent years. Municipalities will
continue to need capital from private investors to meet the needs of a
diverse population of more than 4 million, presenting investors with many
income opportunities.
Elizabeth H. Howell
VICE PRESIDENT
SENIOR PORTFOLIO MANAGER
July 15, 1997
outlook
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MINNESOTA AT A GLANCE
- --------------------------------------------------------------
Data as of June 30, 1997
General Obligation Bond Rating AAA
Budget Surplus $502 million
Per Capita Income $25,580
Population 4.4 million
Range of Individual Income Tax Rates 6% to 8.5%
Top Tax Bracket $51,330
Unemployment Rate 3.3%
SOURCES: BLOOMBERG BUSINESS NEWS, CATO INSTITUTE.
8 1997 SEMI-ANNUAL REPORT
<PAGE>
Performance Summary
COMPARATIVE TOTAL RETURNS FOR THE SIX MONTHS ENDED JUNE 30, 1997*
- ------------------------------------------------------------------
Tax-Free Minnesota Fund A 3.37%
Minnesota High-Yield Muni Bond Fund A 3.98%
Lehman Brothers Municipal Bond Index 3.20%
Minnesota Insured Fund A 2.70%
Lehman Brothers Insured Municipal Bond Index 3.12%
Tax-Free Minnesota Intermediate Fund A 2.48%
Merrill Lynch Three-to-Seven Year Municipal Bond Index 2.48%
* TOTAL RETURN IS BASED ON CHANGE IN NET ASSET VALUE WITH DISTRIBUTIONS
REINVESTED. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. PERFORMANCE OF
OTHER FUND CLASSES VARIES DUE TO DIFFERENT CHARGES AND EXPENSES. SEE PAGES 27
TO 32 FOR SIX-MONTH RETURNS FOR B AND C CLASSES. THE UNMANAGED INDEXES SHOWN
ABOVE INCLUDE TAX-EXEMPT BONDS FROM MANY STATES AND ASSUME NO MANAGEMENT FEES
OR OTHER EXPENSES.
TAX-FREE MINNESOTA FUND
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Average Annual Return Through June 30, 1997
<TABLE>
<CAPTION>
LIFETIME TEN YEARS FIVE YEARS ONE YEAR
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A (Est. 2/29/84)
Excluding Sales Charge +8.95% +7.50% +6.60% +8.49%
Including Sales Charge +8.64% +7.09% +5.79% +4.43%
- -----------------------------------------------------------------------------------------------------
Class B (Est. 3/11/95)
Excluding Sales Charge +6.85% +7.85%
Including Sales Charge +5.64% +3.85%
- -----------------------------------------------------------------------------------------------------
Class C (Est. 5/4/95)
Excluding Sales Charge +6.02% +7.67%
Including Sales Charge +6.02% +6.67%
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</TABLE>
ALL PERFORMANCE INCLUDES REINVESTMENT OF DISTRIBUTIONS AND APPLICABLE SALES
CHARGES AS DESCRIBED BELOW. RETURN AND SHARE VALUE WILL FLUCTUATE SO THAT
SHARES WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PAST
PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. PERFORMANCE FOR B AND C CLASS
SHARES "EXCLUDING SALES CHARGE" ASSUMES THE INVESTMENT WAS NOT REDEEMED. RETURNS
REFLECT A VOLUNTARY EXPENSE LIMITATION IN EFFECT AT THE TIME. RETURNS WOULD HAVE
BEEN LOWER WITHOUT THE LIMITATION.
CLASS A SHARES OF EACH FUND HAVE A 3.75% MAXIMUM FRONT-END SALES CHARGE
EXCEPT TAX-FREE MINNESOTA INTERMEDIATE FUND, WHICH HAS A 2.75% MAXIMUM
FRONT-END SALES CHARGE. ALL FUNDS HAVE A 12B-1 FEE.
CLASS B SHARES DO NOT CARRY A FRONT-END SALES CHARGE, BUT ARE SUBJECT TO A 1%
ANNUAL DISTRIBUTION AND SERVICE FEE. THEY ARE ALSO SUBJECT TO A DEFERRED
SALES CHARGE OF UP TO 4% IF REDEEMED BEFORE THE END OF THE SIXTH YEAR FOR
EACH FUND EXCEPT TAX-FREE MINNESOTA INTERMEDIATE FUND, WHICH IS SUBJECT TO A
DEFERRED SALES CHARGE OF UP TO 2% IF REDEEMED BEFORE THE END OF THE THIRD
YEAR.
CLASS C SHARES HAVE A 1% ANNUAL DISTRIBUTION AND SERVICE FEE. IF SHARES ARE
REDEEMED WITHIN 12 MONTHS, A 1% CONTINGENT DEFERRED SALES CHARGE APPLIES.
1997 semi-annual report 9
<PAGE>
MINNESOTA INSURED FUND
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Average Annual Return Through June 30, 1997
<TABLE>
<CAPTION>
LIFETIME TEN YEARS FIVE YEARS ONE YEAR
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A (Est. 5/1/87)
Excluding Sales Charge +7.45% +7.44% +6.57% +7.60%
Including Sales Charge +7.05% +7.03% +5.77% +3.60%
- ------------------------------------------------------------------------------------------------------
Class B (Est. 3/7/95)
Excluding Sales Charge +6.46% +6.83%
Including Sales Charge +5.26% +2.83%
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Class C (Est. 5/4/94)
Excluding Sales Charge +5.66% +6.80%
Including Sales Charge +5.66% +5.80%
- ------------------------------------------------------------------------------------------------------
</TABLE>
TAX-FREE MINNESOTA INTERMEDIATE FUND
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Average Annual Return Through June 30, 1997
<TABLE>
<CAPTION>
LIFETIME TEN YEARS FIVE YEARS ONE YEAR
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A (Est. 10/27/85)
Excluding Sales Charge +6.14% +5.90% +5.30% +5.90%
Including Sales Charge +5.89% +5.60% +4.61% +2.96%
- ------------------------------------------------------------------------------------------------------
Class B (Est. 8/15/95)
Excluding Sales Charge +4.33% +5.03%
Including Sales Charge +3.30% +3.03%
- ------------------------------------------------------------------------------------------------------
Class C (Est. 5/4/94)
Excluding Sales Charge +4.66% +5.11%
Including Sales Charge +4.66% +4.11%
- ------------------------------------------------------------------------------------------------------
</TABLE>
MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
Average Annual Return Through June 30, 1997
<TABLE>
<CAPTION>
LIFETIME ONE YEAR
- --------------------------------------------------------------------------------------
Class A (Est. 6/4/96)
<S> <C> <C>
Excluding Sales Charge +8.90% +7.88%
Including Sales Charge +5.09% +3.88%
- --------------------------------------------------------------------------------------
Class B (Est. 6/12/96)
Excluding Sales Charge +10.54% +7.08%
Including Sales Charge +6.76% +3.08%
- --------------------------------------------------------------------------------------
Class C (Est. 6/12/96)
Excluding Sales Charge +8.21% +6.97%
Including Sales Charge +8.21% +5.97%
- --------------------------------------------------------------------------------------
</TABLE>
PLEASE SEE PAGE 9 FOR IMPORTANT ADDITIONAL INFORMATION. ALL PERFORMANCE
INCLUDES REINVESTMENT OF DISTRIBUTIONS. PAST PERFORMANCE IS NOT A GUARANTEE
OF FUTURE RESULTS.
10 1997 semi-annual report
<PAGE>
Financial Statements
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------------
<S> <C> <C>
MUNICIPAL BONDS - 98.03%
GENERAL OBLIGATION BONDS - 16.62%
Centennial Independent School District #12
4.88% 02/01/10 (FGIC) .......................... $1,805,000 $1,751,247
Faribault Independent School District #656
(MN School District Credit Enhanced)
6.10% 06/01/10 ................................. 1,000,000 1,058,170
Farmington Independent School District #192
5.13% 02/01/15 (AMBAC) ......................... 1,500,000 1,445,235
Hennepin County 5.75% 10/01/10 ................... 7,990,000 8,305,445
Hopkins Independent School District #270
4.88% 02/01/13 (MBIA) .......................... 3,675,000 3,477,028
Hutchinson Independent School District Series A
(MN School District Enhanced)
5.85% 02/01/18 ................................. 1,700,000 1,748,518
Kenyon Wanamingo Independent School District
6.00% 02/01/18 (MBIA) .......................... 2,350,000 2,445,504
Lakeville Independent School District #194,
Inverse Floater 6.47% 02/01/15 (MBIA) ........... 4,250,000 3,930,485
Mahtomedi Independent School District #832
Series B Zero Coupon
5.51% 02/01/14 (MBIA) .......................... 1,540,000 621,405
Milaca Independent School District #912
5.50% 02/01/20 (FSA) ........................... 1,015,000 1,016,056
Minneapolis Convention Center Facilities, Inverse
Floater 7.07% 04/01/14 ......................... 850,000 861,143
Minneapolis Sports Arena Project, Inverse Floater
6.42% 10/01/20 ................................. 4,220,000 3,848,176
Minneapolis Sports Arena Project, Inverse Floater
6.37% 04/01/14 ................................. 580,000 552,549
Minneapolis Unlimited Tax Series 1992
6.30% 10/01/08 ................................. 1,750,000 1,884,103
Minnetonka Independent School District #276
5.75% 02/01/22 (FSA) ........................... 4,550,000 4,662,066
North Branch Independent School District #138
5.50% 02/01/12 (FGIC) .......................... 1,540,000 1,549,394
North St. Paul, Maplewood Independent School
District #622, Inverse Floater
6.42% 02/01/20 ................................. 2,250,000 2,016,338
Pine Island Independent School District #255
6.63% 06/01/12 (FSA) ........................... 240,000 252,814
Pine Island Independent School District #255
6.63% 06/01/13 (FSA) ........................... 310,000 325,993
Pine Island Independent School District #255
6.63% 06/01/14 (FSA) ........................... 330,000 346,427
Pine Island Independent School District #255
6.63% 06/01/15 (FSA) ........................... 355,000 372,033
Pine Island Independent School District #255
6.63% 06/01/16 (FSA) ........................... 380,000 397,552
</TABLE>
<PAGE>
Financial Statements
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
GENERAL OBLIGATION BONDS (CONTINUED)
Plainview Independent School District #810
6.70% 02/01/06 ................................. $ 385,000 $ 420,012
Plainview Independent School District #811
6.75% 02/01/07 ................................. 420,000 458,140
Plainview Independent School District #812
6.75% 02/01/08 ................................. 445,000 484,280
Puerto Rico Aqueduct & Sewer Authority
5.00% 07/01/15 ................................. 2,000,000 1,884,480
Rochester Tax Increment 6.50% 12/01/04 ........... 1,000,000 1,007,840
Rosemount - Apple Valley Independent School
District #196 7.92% 04/01/15 (FSA) .............. 4,000,000 4,189,720
Rosemount Independent School District #196
Series B 5.31% 04/01/11 (FSA) ................... 2,600,000 1,258,400
Rosemount Independent School District #196
5.47% 04/01/12 (FSA) ........................... 1,850,000 830,058
Rosemount Independent School District #196
5.52% 04/01/13 (FSA) ........................... 1,915,000 807,555
Rosemount Independent School District #196,
Inverse Floater 5.88% 04/01/15 .................. 1,375,000 1,410,269
Sartell Independent School District #748 Series A
5.75% 02/01/15 (MBIA) .......................... 1,850,000 1,881,191
Sartell Independent School District #748
5.46% 02/01/13 (MBIA) .......................... 540,000 231,908
Sartell Independent School District #748
5.50% 02/01/15 (MBIA) .......................... 1,075,000 410,672
Sartell Independent School District #748
5.55% 02/01/16 (MBIA) .......................... 1,750,000 628,355
Sartell Independent School District #748
5.51% 02/01/17 (MBIA) .......................... 1,600,000 547,840
South Washington County Independent School
District #833 4.88% 06/01/12 (FGIC) ............. 1,310,000 1,246,557
South Washington County Independent School
District #833 4.88% 06/01/13 (FGIC) ............. 1,350,000 1,274,900
South Washington County Independent School
District #833 4.88% 06/01/14 (FGIC) ............. 2,170,000 2,033,160
Spring Lake Park Independent School District #16,
Inverse Floater 6.67% 02/01/17 (MBIA) ........... 1,000,000 943,770
Stillwater Independent School District #834
5.75% 02/01/15 (MBIA) .......................... 3,000,000 3,062,550
Stillwater Series A 5.38% 02/01/21 (FSA) ......... 1,025,000 1,013,469
Washington County 5.90% 02/01/10 ................ 1,680,000 1,731,408
----------
70,624,215
----------
HIGHER EDUCATION REVENUE BONDS - 5.18%
Minnesota Higher Education Augsburg College Series
4F1 6.25% 05/01/23 ............................. 1,000,000 1,011,650
Minnesota Higher Education Carleton College
5.75% 11/01/12 ................................. 4,000,000 4,142,360
</TABLE>
1997 semi-annual report 11
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HIGHER EDUCATION REVENUE BONDS (CONTINUED)
Minnesota Higher Education Facilities Revenue-
Hamline 6.00% 10/01/12 ........................ $ 1,250,000 $ 1,274,725
Minnesota Higher Education Facilities Revenue-
Hamline 6.00% 10/01/16 ........................ 1,790,000 1,811,301
Minnesota Higher Education St. Benedicts College
6.20% 03/01/16 ................................ 1,000,000 1,013,250
Minnesota Higher Education St. Thomas University
Series R2 5.60% 09/01/14 ...................... 1,000,000 1,010,350
Minnesota State Higher Education Facilities
Authority Revenue(MacAlester College-Four-J)
5.55% 03/01/17 ................................ 700,000 703,059
St. Paul HRA St. Paul Academy Series 1993
5.45% 10/01/23 ................................ 1,540,000 1,478,847
University Of Minnesota Series A
5.50% 07/01/21 ................................ 9,500,000 9,550,445
----------
21,995,987
----------
HOSPITAL REVENUE BONDS - 20.60%
Albert Lea St. John's Luthern Home Project
8.50% 11/01/19 ................................ 1,000,000 1,068,260
Bemidji Hospital Facilities Revenue North County
Health 6.05% 09/01/16 ......................... 600,000 611,538
Bemidji Hospital Facilities Revenue North County
Health 6.05% 09/01/24 ......................... 1,825,000 1,848,232
Bemidji Hospital Facilities Revenue North County
Health 5.63% 09/01/15 ......................... 1,760,000 1,745,022
Bemidji Hospital Facilities Revenue North County
Health 5.63% 09/01/21 ......................... 2,435,000 2,395,285
Brainerd Benedictine Health Care Systems
6.00% 02/15/12 (Connie Lee) .................... 2,250,000 2,316,240
Duluth Benedictine/St. Mary's Health
6.40% 05/01/18 (Connie Lee) .................... 4,295,000 4,529,636
Duluth Economic Development Authority St. Luke's
Hospital 6.00% 02/15/20 (Connie Lee) ........... 9,450,000 9,581,638
Edina Fairview Hospital Revenue
7.13% 07/01/19 ................................ 2,500,000 2,649,850
Glencoe/Mcleod County Health Care
8.50% 12/01/15 ................................ 500,000 564,075
Little Canada Health Care 1992 Presbyterian Homes
Guaranteed 7.25% 07/01/12 ..................... 1,000,000 1,035,410
Minneapolis Fairview Hospital Revenue
Series 1993A 5.25% 11/15/13 (MBIA) ............. 4,000,000 3,913,800
Minneapolis Fairview Hospital Series 91B
6.50% 01/01/11 (MBIA) ......................... 3,000,000 3,229,680
Minneapolis Health Care-American Baptist Homes
8.70% 11/01/09 ................................ 2,485,000 2,749,479
Minneapolis/St. Paul HRA Children's Hospital
Health Care, Inverse Floater
7.17% 08/15/25 ................................ 6,500,000 6,262,165
Minneapolis/St. Paul HRA HealthOne
7.40% 08/15/11 (MBIA) ......................... 1,360,000 1,482,930
Robbinsdale North Memorial Medical
5.50% 05/15/23 (AMBAC) ........................ 10,725,000 10,521,118
</TABLE>
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Spring Park Twin Birch Nursing Home (Presbyterian
Homes Guaranteed) 8.25% 08/01/11 ................ $ 600,000 $ 638,292
Springfield St. John's Lutheran Home Revenue
8.50% 11/01/19 ................................. 600,000 634,926
St. Cloud Hospital Facilities Revenue for St .....
Cloud Hospital 5.30% 10/01/20 (AMBAC) ........... 10,250,000 9,787,930
St. Louis Park Commercial Development Revenue
7.25% 06/01/13 ................................. 1,120,000 1,194,357
St. Louis Park Methodist Hospital
5.20% 07/01/23 (AMBAC) ......................... 10,220,000 9,531,376
St. Paul Housing and Redevelopment Hospital Health
East Series A 6.63% 11/01/17 .................... 8,900,000 9,241,671
----------
87,532,910
----------
HOUSING REVENUE BONDS - 17.21%
Austin Housing and Redevelopment Authority
Courtyard Residence Series 95A
7.25% 01/01/26 ................................. 500,000 503,640
Brooklyn Center Multifamily Housing Revenue Bonds
Family Housing Project-Section 8
5.90% 01/01/20 ................................. 2,250,000 2,263,410
Burnsville Multifamily-Bridgeway Apartments
7.63% 02/01/24 (FHA) ........................... 3,370,000 3,444,207
Burnsville Multifamily-Coventry Court Apartments
Project 7.50% 09/01/17 (FHA) .................... 1,000,000 1,049,330
Carver County Housing and Redevelopment Authority
Multifamily Revenue Lake Grace Apartments
6.00% 07/01/28 ................................. 1,435,000 1,434,986
Dakota County Housing and Redevelopment Authority
Single Family 8.10% 03/01/16 (GNMA) ............. 165,000 171,489
Eagan Forest Ridge Apartments Project
7.50% 09/01/17 (FHA) ........................... 1,000,000 1,038,020
Eden Prairie Multifamily Revenue, Eden Investments
7.40% 08/01/25 (FHA) ........................... 400,000 422,860
Eden Prairie Multifamily Windslope Apartments-
Section 8 7.10% 11/01/17 ........................ 1,585,000 1,667,832
Eden Prairie Multifamily Homes, Tanager Creek
8.05% 06/20/31 (GNMA) .......................... 7,605,000 8,796,247
Edina Park Plaza Multifamily Housing
7.50% 12/01/09 (FHA) ........................... 1,575,000 1,666,145
Edina Park Plaza Multifamily Housing
7.70% 12/01/28 (FHA) ........................... 1,250,000 1,307,138
Hopkins Renaissance Multifamily Housing-
Section 8 6.38% 04/01/20 ....................... 1,000,000 1,019,340
Maplewood Hazel Ridge Apartments Multifamily
Housing 9.25% 12/01/15 ......................... 1,000,000 1,034,150
Minneapolis Housing Facility Revenue 1993
Augustana Chapel View 7.00% 04/01/18 ............ 1,000,000 1,024,220
Minneapolis Multifamily Mortgage Seward Towers
7.38% 12/20/30 (GNMA) .......................... 4,000,000 4,208,560
Minneapolis-Nicollet Multifamily Housing
6.00% 12/01/19 .................................. 2,000,000 2,031,240
</TABLE>
12 1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Minnesota Housing Finance Agency Housing
Development Series A-Section 8
7.80% 08/01/18 ................................ $1,000,000 $1,022,250
Minnesota Housing Finance Agency Multifamily
Housing 6.95% 02/01/14 ........................ 1,500,000 1,585,845
Minnesota Housing Finance Agency Multifamily
Housing Series 92A 6.95% 08/01/17 .............. 745,000 786,668
Minnesota Housing Finance Agency Rental Housing
Series B 6.25% 08/01/22 ....................... 985,000 995,047
Minnesota Housing Finance Agency Single Family
Mortgage 86 Series B 7.25% 07/01/16 ............ 955,000 969,249
Minnesota Housing Finance Agency Single Family
Mortgage Series B 7.30% 07/01/10 ............... 165,000 171,938
Minnesota Housing Finance Agency Single Family
Mortgage 7.30% 07/01/09 ....................... 340,000 354,950
Minnesota Housing Finance Agency Single Family
Mortgage Series C 7.65% 07/01/08 ............... 415,000 438,709
Minnesota Housing Finance Agency Single Family
Mortgage Series 91C 7.10% 07/01/11 ............. 1,010,000 1,071,155
Minnetonka Multifamily-Beacon Hill Project
(Presbyterian Homes Guaranteed)
7.70% 06/01/25 ................................ 2,000,000 2,107,720
Oakdale, Minnesota Housing-Oak Meadows Project
7.00% 04/01/27 ................................ 6,800,000 6,865,824
Red Wing Housing and Redevelopment Agency
Jordan Tower - Section 8 Series 1992
7.00% 01/01/19 ................................ 1,500,000 1,576,410
St. Cloud Germain Towers Housing Series 1993-
Section 8 5.90% 09/01/20 ...................... 2,000,000 2,010,080
St. Cloud Housing and Redevelopment Agency
Northway A&B Project-Section 8
7.50% 12/01/18 ................................ 2,045,000 2,109,826
St. Louis Park Multifamily Housing Revenue
6.25% 12/01/28 (FHA) .......................... 3,855,000 3,970,689
St. Louis Park Multifamily Westwind Apartments
Housing 5.75% 01/01/29 (GNMA) .................. 3,865,000 3,872,691
St. Louis Park Single Family
7.25% 04/20/23 (GNMA) ......................... 1,848,000 1,946,960
St. Paul Housing and Redevelopment Agency Como
Lake Project 7.50% 03/01/26 (FHA) .............. 1,000,000 935,000
St. Paul Housing and Redevelopment Single Family
Mortgage 6.90% 12/01/21 (FNMA) ................. 1,695,000 1,783,343
St. Paul Housing and Redevelopment Single Family
Mortgage 6.90% 12/01/11 (FNMA) ................. 70,000 73,801
Stillwater Multifamily Housing Cottages
7.00% 11/01/27 ................................ 1,000,000 1,006,850
Wadena Housing and Redevelopment Agency
Humphrey Manor-Section 8
6.00% 02/01/19 ................................ 2,130,000 2,154,303
Wells Housing and Redevelopment Agency
Broadway Apartment Project-Section 8
7.00% 01/01/19 ................................ 1,090,000 1,147,890
</TABLE>
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Willmar Housing and Redevelopment Agency
Highland Apartments-Section 8
5.85% 06/01/19 ................................. $ 1,050,000 $ 1,054,085
----------
73,094,097
----------
INDUSTRIAL DEVELOPMENT
REVENUE BONDS - 9.22%
Anoka Resource Recovery Revenue for NSP Series
85 7.15% 12/01/08 .............................. 1,000,000 1,071,390
Becker Pollution Control Revenue for NSP
Series 89 A 6.80% 04/01/07 ...................... 2,000,000 2,115,940
Cloquet Pollution Control Revenue for Potlatch
Corporation 5.90% 10/01/26 ...................... 15,000,000 15,121,050
Duluth Seaway Port Authority Revenue for Cargill,
Inc. 6.13% 11/01/14 ............................ 4,500,000 4,745,520
East Grand Forks for American Crystal Sugar
Pollution Control Revenue
7.75% 04/01/18 ................................. 1,230,000 1,348,560
Minneapolis Community Development Agency
Common Bond Fund 7.63% 06/01/06 ................. 1,430,000 1,469,339
Minnesota Public Facilities Authority Water
Pollution Control 6.25% 03/01/16 ................ 4,400,000 4,651,504
Richfield CDR for Richfield Shoppes
8.38% 10/01/13 ................................. 2,200,000 2,527,448
St. Cloud CDR for Northwest Center Association
7.50% 08/01/12 ................................. 4,573,971 4,755,695
St. Paul Minnesota CDR Fort Rd Medical
7.50% 09/01/02 (ASSET GTY) ...................... 1,300,000 1,371,409
----------
39,177,855
----------
LEASE/CERTIFICATES OF
PARTICIPATION - 0.68%
Beltrami County 6.20% 02/01/14 .................. 1,010,000 1,038,159
West St. Paul Commercial Mortgage (K-Mart Lease)
7.00% 11/01/07 ................................ 1,716,693 1,839,025
----------
2,877,184
----------
*PRE-REFUNDED BONDS - 9.39%
Anoka County Capital Improvement
7.20% 02/01/08 (Escrowed to maturity) .......... 1,000,000 1,040,320
Blaine IDR (Ball Corp.) 8.25% 12/01/99
(Escrowed to maturity) ........................ 250,000 272,313
Blaine IDR (Ball Corp.) 8.25% 12/01/00
(Escrowed to maturity) ........................ 300,000 335,592
Bloomington Tax Increment 9.75% 02/01/08
(Escrowed to maturity) ........................ 500,000 655,270
Brainerd Independent School District #181
7.00% 06/01/11 (Escrowed to maturity) .......... 390,000 420,673
Hopkins Senior Multifamily Facilities Augustana
Home 9.00% 07/1/20-97 ......................... 1,000,000 1,020,000
Kimball Independent School District #739
7.60% 02/01/04 (Escrowed to maturity) .......... 250,000 254,615
Kimball Independent School District #739
7.60% 02/01/05 (Escrowed to maturity) .......... 275,000 280,076
Kimball Independent School District #739
7.70% 02/01/06 (Escrowed to maturity) .......... 275,000 280,233
</TABLE>
1997 semi-annual report 13
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED BONDS (CONTINUED)
Kimball Independent School District #739
7.70% 02/01/07 (Escrowed to maturity) ...... $ 300,000 $ 305,709
Little Falls Independent School District #182
6.80% 02/01/08 (AMBAC)
(Escrowed to maturity) .................... 500,000 519,080
Maplewood Independent School District #622
7.10% 02/1/25-05 (FSA) .................... 10,000,000 11,439,300
Minnesota Public Facilities Authority (Water
Pollution Control) Series 90A
7.10% 03/1/12-00 .......................... 1,990,000 2,163,548
Minnesota Public Facilities Authority Water
Pollution Control 6.95% 03/1/13-01 ......... 5,220,000 5,752,283
Northfield College Facility Revenue-St. Olaf
College 7.88% 10/1/08-98 .................. 1,255,000 1,311,626
Northfield College Facility Revenue-St. Olaf
College 8.00% 10/1/18-98 .................. 860,000 900,093
Owatanna Public Utilities
6.75% 01/1/16-01 .......................... 1,000,000 1,073,340
Rockford Independent School District #883
7.20% 12/15/13-98 ......................... 750,000 778,943
Southern Minnesota Municipal Power Agency
Revenue 5.75% 01/01/18 (MBIA)
(Escrowed to maturity) .................... 1,000,000 1,023,750
Southern Minnesota Municipal Power Agency
Supply System 5.50% 01/01/15 (AMBAC)
(Escrowed to maturity) .................... 990,000 993,307
St. Cloud Independent School District #742
7.50% 02/01/10 (Escrowed to maturity) ...... 1,000,000 1,019,050
St. Louis Park Methodist Hospital
7.25% 07/1/18-00 (AMBAC) .................. 775,000 850,857
St. Paul Civic Center Revenue Sales Tax
5.55% 11/01/23 (MBIA)
(Escrowed to maturity) .................... 825,000 834,793
St. Paul Sewer Revenue Series 88A
8.00% 12/01/08 (Escrowed to maturity) ...... 2,175,000 2,305,304
University Of Minnesota Series A
6.00% 02/01/11 (Escrowed to maturity) ...... 1,500,000 1,500,705
Wayzata Independent School District #284
7.05% 02/01/06 (Escrowed to maturity) ...... 625,000 649,750
Wayzata Independent School District #284
7.10% 02/01/08 (Escrowed to maturity) ...... 1,000,000 1,040,360
Wayzata Independent School District #284
7.10% 02/01/09 (Escrowed to maturity) ...... 560,000 582,602
Western Minnesota Municipal Power Agency
Revenue 9.75% 01/01/16
(Escrowed to maturity) .................... 185,000 273,852
----------
39,877,344
----------
POWER AUTHORITY REVENUE BONDS - 16.34%
Bass Brook PCR for Minnesota Power and Light
Revenue 6.00% 07/01/22 .................... 17,490,000 17,668,573
Bass Brook Pollution Control Revenue for
Minnesota Power & Light Company
6.00% 07/01/22 ............................ 1,750,000 1,806,368
</TABLE>
14 1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
POWER AUTHORITY REVENUE BONDS (CONTINUED)
Northern Minnesota Municipal Power Agency
Electric System Revenue
5.50% 01/01/18 (AMBAC) ......................... $ 9,200,000 $ 9,166,328
Northern Minnesota Municipal Power Agency
Series 89A 7.25% 01/01/16 ...................... 5,875,000 6,206,232
Northern Minnesota Municipal Power Agency
Zero Coupon 5.24% 01/01/09 (AMBAC) .............. 3,815,000 2,095,732
Puerto Rico Electric Power Authority
5.25% 07/01/21 ................................. 1,500,000 1,406,730
Puerto Rico Electric Power Authority Series X
5.50% 07/01/25 ................................. 2,930,000 2,836,562
Southern Minnesota Municipal Power Agency
5.75% 01/01/18 (FGIC) .......................... 2,000,000 2,024,240
Southern Minnesota Municipal Power Agency
4.75% 01/01/16 (MBIA) .......................... 7,200,000 6,554,664
Southern Minnesota Municipal Power Agency
5.75% 01/01/18 (MBIA) .......................... 9,770,000 9,888,412
Southern Minnesota Municipal Power Agency
Series A 5.00% 01/01/12 (FGIC) .................. 3,880,000 3,744,239
Southern Minnesota Municipal Power Agency
Series B 5.00% 01/01/13 (FGIC) .................. 1,125,000 1,078,155
Southern Minnesota Municipal Power Agency Supply
System 5.50% 01/01/15 (AMBAC) ................... 1,560,000 1,553,058
Southern Minnesota Municipal Power Agency Zero
Coupon 5.57% 01/01/19 (MBIA) .................... 4,785,000 1,453,731
Southern Minnesota Municipal Power Agency Zero
Coupon 5.57% 01/01/21 (MBIA) .................... 5,000,000 1,359,650
Western Municipal Power Agency Revenue
6.13% 01/01/16 ................................. 550,000 551,172
----------
69,393,846
----------
WATER AND SEWER REVENUE BONDS - 0.65%
Puerto Rico Aqueduct & Sewer Authority
5.00% 07/01/19 ................................. 3,000,000 2,781,090
----------
2,781,090
----------
OTHER REVENUE BONDS - 2.14%
Minneapolis Community Development Agency
Common Bond Fund 7.95% 12/01/11 ................. 855,000 934,019
Minneapolis Community Development Agency
Common Bond Fund 7.40% 12/01/21 ................. 795,000 844,354
Minneapolis Community Development Agency
Common Bond Fund 1991-4 Opportunity
Workshop Project 7.13% 12/01/05 ................. 510,000 549,902
Minneapolis Community Development Agency Tax
Increment Revenue 0.00% 09/01/09 ................ 5,750,000 3,061,703
Rochester Health Care Facilities Revenue
7.87% 11/15/15 ................................. 2,500,000 2,680,425
Seaway Port Authority Rfdg. Series 93A for Cargill
Inc. 5.75% 12/01/16 ............................ 1,000,000 1,015,920
----------
9,086,323
----------
Total Municipal Bonds
(cost of $394,738,519) ......................... 416,440,851
----------
</TABLE>
14 1997 SEMI-ANNUAL REPORT
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------------------
<S> <C> <C>
SHORT TERM INVESTMENTS - 0.68%
Federated Minnesota Municipal Money Market ...... $ 2,884,000 $ 2,884,000
------------
Total Short Term Investments
(cost 2,884,000) .............................. 2,884,000
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.71%
(cost of $397,622,519)** ...................... 419,324,851
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.29% .................... 5,481,441
------------
NET ASSETS APPLICABLE TO 34,046,554 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ......... $424,806,292
============
NET ASSET VALUE - TAX FREE MINNESOTA FUND A CLASS
($414,564,179 / 33,225,790 shares) ............. $12.48
======
NET ASSET VALUE - TAX FREE MINNESOTA FUND B CLASS
($7,724,697 / 619,119 shares) ................. $12.48
======
NET ASSET VALUE - TAX FREE MINNESOTA FUND C CLASS
($2,517,416 / 201,645 shares) ................. $12.48
======
- --------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in
which each bond is pre-refunded.
** Also cost for federal tax purposes.
AMBAC - Insured by the AMBAC Indemnity Corporation
ASSET GTY - Insured by the Asset Guaranty Insurance Company
Connie Lee - Insured by the College Construction Insurance Association
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by the Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common Stock, $.01 par value, 10,000,000,000
shares authorized to the Fund with 1,000,000,000
shares allocated to Tax Free Minnesota Fund A Class
1,000,000,000 shares allocated to Tax Free
Minnesota Fund B Class 1,000,000,000 shares
allocated to Tax Free Minnesota Fund C Class ..... $ 404,458,383
Accumulated overdistribution net investment income (73,078)
Accumulated net realized loss on investments ...... (1,281,345)
Net unrealized gain on investments ................ 21,702,332
-------------
Total Net Assets .................................. $ 424,806,292
=============
</TABLE>
See accompanying notes
<PAGE>
DELAWARE-VOYAGEUR
MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------------
<S> <C> <C>
MUNICIPAL BONDS - 100.09%
GENERAL OBLIGATION BONDS - 28.32%
Alexandria Independent School District #206
6.30% 02/01/11 (MBIA) .......................... $1,575,000 $1,679,816
Alexandria Independent School District #206
6.30% 02/01/12 (MBIA) .......................... 1,675,000 1,786,471
Alexandria Independent School District #206
6.30% 02/01/13 (MBIA) .......................... 1,775,000 1,893,126
Anoka-Hennepin Independent School District #11
Series C 5.90% 02/01/11 ........................ 8,045,000 8,235,184
Becker 6.25% 08/01/15 (MBIA) ..................... 6,300,000 6,641,460
Becker Wastewater Treatment Facility Series A
5.95% 02/01/14 ................................. 500,000 514,470
Buffalo Independent School District #887
6.10% 02/01/15 (FSA) ........................... 1,030,000 1,071,808
Carver County HRA Jail Facility
6.40% 02/01/10 (MBIA) .......................... 515,000 549,129
Carver County HRA Jail Facility
6.40% 02/01/11 (MBIA) .......................... 550,000 586,449
Carver County HRA Jail Facility
6.40% 02/01/12 (MBIA) .......................... 585,000 623,768
Carver County HRA Jail Facility
6.40% 02/01/13 (MBIA) .......................... 625,000 666,419
Carver County HRA Jail Facility
6.40% 02/01/14 (MBIA) .......................... 670,000 714,401
Columbia Heights Independent School District #13
5.38% 02/01/19 (FSA) ........................... 3,865,000 3,837,984
Dakota County 6.40% 02/01/08 (AMBAC) ............. 1,135,000 1,180,990
Dakota County 6.45% 02/01/09 (AMBAC) ............. 1,000,000 1,041,720
Dakota County 6.45% 02/01/10 (AMBAC) ............. 2,500,000 2,601,225
Eden Prairie Independent School District #272
5.85% 02/01/13 (FGIC) .......................... 2,500,000 2,548,000
Eden Prairie Independent School District #272
6.42% 02/01/14 (FGIC) .......................... 1,125,000 1,061,291
Eden Prairie Independent School District #272,
Inverse Floater 5.65% 02/01/13 (MBIA) ........... 3,200,000 3,235,776
Eden Prairie Independent School District #272,
Inverse Floater 6.42% 02/01/15 (MBIA) ........... 1,000,000 930,140
Elk River Independent School District #728
Series 92 B 6.00% 02/01/09 (AMBAC) .............. 3,950,000 4,130,239
Ellendale Geneva Independent School District #762
6.00% 02/01/10 (AMBAC) ......................... 230,000 239,927
Ellendale Geneva Independent School District #762
6.00% 02/01/11 (AMBAC) ......................... 245,000 254,972
Ellendale Geneva Independent School District #762
6.00% 02/01/12 (AMBAC) ......................... 265,000 274,490
Ellendale Geneva Independent School District #762
6.00% 02/01/13 (AMBAC) ......................... 280,000 289,344
Ellendale Geneva Independent School District #762
6.00% 02/01/14 (AMBAC) ......................... 300,000 310,011
</TABLE>
1997 semi-annual report 15
<PAGE>
DELAWARE-VOYAGEUR MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
GENERAL OBLIGATION BONDS (CONTINUED)
Ellendale Geneva Independent School District #762
6.00% 02/01/15 (AMBAC) ......................... $ 320,000 $ 330,678
Farmington Independent School District #192
6.80% 02/01/11 (MBIA) .......................... 850,000 913,895
Hennepin County 5.75% 10/01/10 (MBIA) ........... 1,800,000 1,864,440
Hopkins Independent School District #270
4.85% 02/01/12 (MBIA) .......................... 2,500,000 2,364,775
Hopkins Independent School District #270
4.88% 02/01/14 (MBIA) .......................... 3,875,000 3,637,656
Lakeville Independent School District
5.40% 02/01/13 (FGIC) .......................... 1,100,000 1,095,358
Moorhead Minnesota Independent School District
152 5.90% 02/01/10 (AMBAC) ..................... 475,000 485,702
Moorhead Minnesota Independent School District
152 5.90% 02/01/11 (AMBAC) ..................... 505,000 515,555
Moorhead Minnesota Independent School District
152 5.90% 02/01/12 (AMBAC) ..................... 540,000 549,526
Moorhead Minnesota Independent School District
152 6.00% 02/01/13 (AMBAC) .................... 575,000 587,932
Mora Series A 6.85% 02/01/10 (AMBAC) ............ 245,000 260,016
Mora Series A 6.85% 02/01/11 (AMBAC) ............ 265,000 281,242
North Branch Independent School District #138,
Inverse Floater 7.17% 02/01/11 ................. 965,000 990,930
Prior Lake Independent School District #719,
Inverse Floater 6.17% 02/01/14 (FGIC) .......... 1,000,000 943,370
Roseau Independent School District #682
7.00% 02/01/16 (AMBAC) ......................... 500,000 529,205
Rosemount Independent School District #196
Series B 5.26% 04/01/10 (FSA) .................. 2,240,000 1,150,061
Rosemount Independent School District #196
5.16% 04/01/09 (FSA) ........................... 1,860,000 1,017,811
South St. Paul Independent School District #6
6.45% 02/01/11 (FGIC) .......................... 500,000 522,590
South St. Paul Independent School District #6
6.45% 02/01/12 (FGIC) .......................... 300,000 313,554
South St. Paul Independent School District #6
6.25% 02/01/10 (FGIC) .......................... 625,000 650,231
South Washington County Independent School
District #883 6.13% 06/01/09 (FGIC) ............ 1,430,000 1,486,943
South Washington County Independent School
District #883 6.13% 06/01/11 (FGIC) ............ 2,720,000 2,818,546
Spring Lake Park Independent School District #16,
Inverse Floater 6.67% 02/01/14 (MBIA) .......... 2,175,000 2,111,294
St. Cloud Independent School District #742
6.05% 02/01/09 (FGIC) .......................... 1,000,000 1,050,510
St. Francis Independent School District #15
5.90% 04/01/10 (FGIC) .......................... 1,845,000 1,908,247
Stillwater Independent School District #834
5.50% 02/01/10 (FGIC) .......................... 2,995,000 3,023,752
Western Lake Superior Series A
6.00% 10/01/08 (MBIA) .......................... 400,000 425,328
Western Lake Superior Series A
6.10% 10/01/09 (MBIA) .......................... 425,000 451,805
</TABLE>
<PAGE>
DELAWARE-VOYAGEUR MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
GENERAL OBLIGATION BONDS (CONTINUED)
Western Lake Superior Series A
6.20% 10/01/10 (MBIA) ......................... $ 450,000 $ 479,817
Western Lake Superior Series A
6.20% 10/01/11 (MBIA) ......................... 475,000 504,835
Willmar Independent School District #347
6.25% 02/01/15 (AMBAC) ........................ 4,100,000 4,391,920
----------
84,556,134
----------
HOSPITAL REVENUE BONDS - 19.63%
Bloomington Masonic Home Care Center
5.90% 07/01/09 (AMBAC) ........................ 1,250,000 1,304,475
Brainerd Benedictine Health Care Systems
6.00% 02/15/12 (Connie Lee) .................... 1,500,000 1,544,160
Brainerd Benedictine Health Care Systems
6.00% 02/15/20 (Connie Lee) .................... 2,000,000 2,031,560
Detroit Lakes Benedictine Health
6.00% 02/15/12 (Connie Lee) .................... 1,630,000 1,687,213
Detroit Lakes Benedictine Health
6.00% 02/15/19 (Connie Lee) .................... 1,000,000 1,018,250
Duluth Benedictine/St. Mary's Health
6.40% 05/01/18 (Connie Lee) .................... 500,000 527,315
Duluth EDA Health Care - Duluth Clinic
6.30% 11/01/22 (AMBAC) ........................ 2,690,000 2,842,980
Duluth EDA Health Care Revenue, Inverse Floater
8.22% 02/15/17 ................................ 5,000,000 5,132,100
Duluth Economic Development Authority St. Luke's
Hospital 6.00% 02/15/20 (Connie Lee) ........... 1,300,000 1,318,109
Duluth St. Luke's Hospital 6.40% 05/01/10
(Connie Lee) .................................. 3,335,000 3,580,856
Minneapolis Fairview Hospital Series 91B
6.50% 01/01/11 (MBIA) ......................... 3,000,000 3,229,680
Minneapolis Fairview Hospital Series 93A
5.25% 11/15/19 (MBIA) ......................... 3,750,000 3,560,588
Minneapolis/St. Paul HRA-Childrens Hospital
7.57% 08/15/16 (FSA) .......................... 1,310,000 1,333,344
Minneapolis/St. Paul HRA Health Care, Inverse
Floater 5.00% 11/15/13 (FSA) ................... 9,490,000 8,991,395
Minneapolis/St. Paul HRA HealthOne
7.40% 08/15/05 (MBIA) ......................... 600,000 656,064
Minneapolis/St. Paul HRA HealthOne
7.40% 08/15/11 (MBIA) ......................... 2,370,000 2,584,224
Minnesota Agricultural & Economic Development
(Health Care Systems-Fairview Hospital-Series A)
5.75% 11/15/26 ................................ 8,250,000 8,314,680
Robbinsdale North Memorial Medical
5.50% 05/15/23 (AMBAC) ........................ 5,400,000 5,297,346
St. Cloud Hospital Facility Revenue
6.75% 07/01/11 (AMBAC) ........................ 400,000 441,432
St. Louis Park Health Care, Inverse Floater
6.32% 07/01/23 (AMBAC) ........................ 2,500,000 2,197,925
St. Paul Ramsey Medical
5.50% 05/15/13 (AMBAC) ........................ 1,000,000 1,003,090
----------
58,596,786
----------
</TABLE>
16 1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS - 19.27%
Anoka County, Minnesota Housing & Redevelopment
Authority (Ice Arena-A) 5.70% 02/01/23 .......... $1,000,000 $1,013,200
Chaska Waters Edge Multifamily Revenue
7.30% 01/20/30 (GNMA) ........................... 3,257,000 3,595,402
Dakota County HRA Single Family Mortgage Revenue
5.85% 10/01/30 (GNMA / FNMA) .................... 7,000,000 6,968,710
Dakota County HRA Single Family Mortgage Revenue
6.70% 10/01/17 (FNMA) ........................... 6,290,000 6,579,780
Dakota, Washington and Stearns Counties HRA
Single Family Mortgage Revenue
7.85% 12/01/30 (MBIA) ........................... 180,000 189,074
Eagan Multifamily Revenue Woodridge Apartments
5.90% 08/01/20 (GNMA) ........................... 1,000,000 1,015,880
Hopkins Multifamily Housing-Auburn Apartments
8.05% 06/20/31 (GNMA) ........................... 3,790,000 4,273,831
Minneapolis and St. Paul Housing Finance Board
Housing Project Phase V
8.88% 11/01/18 (GNMA) ........................... 75,000 77,555
Minneapolis and St. Paul Housing Finance Board
Single Family Mortgage Revenue
8.30% 08/01/21 (GNMA) ........................... 125,000 127,824
Minneapolis and St. Paul Housing Finance Board
Single Family Mortgage Revenue
8.13% 12/01/14 (GNMA) ........................... 160,000 167,550
Minneapolis and St. Paul Housing Finance Board
Housing Project Phase IX
7.25% 08/01/21 (GNMA) ........................... 1,265,000 1,342,519
Minneapolis and St. Paul Housing Finance Board
Housing Project Phase IX
7.30% 08/01/31 (GNMA) ........................... 845,000 894,289
Minnesota Housing Finance Agency Single Family
Mortgage Revenue Series A
8.38% 02/01/15 (FHA) ............................ 80,000 81,802
Minnesota Housing Finance Agency Single Family
Mortgage Revenue Series B
7.25% 07/01/06 (MBIA) ........................... 150,000 152,936
Minnesota Housing Finance Agency Single Family
Mortgage Revenue Series A
8.50% 02/01/17 (FHA) ............................ 65,000 66,355
Minnesota Housing Finance Agency Single Family
Mortgage Revenue Series C
9.00% 08/01/18 (FHA) ............................ 400,000 408,232
Minnesota Housing Finance Agency Single Family
Mortgage Revenue Series A
7.95% 07/01/22 (MBIA) ........................... 320,000 336,208
Minnesota Housing Finance Agency Single Family
Mortgage Revenue Series A
7.45% 07/01/22 (AMBAC) .......................... 1,435,000 1,510,524
Minnesota Housing Finance Agency Single Family
Mortgage Revenue Series A
7.05% 07/01/22 (AMBAC) .......................... 510,000 537,091
Minnesota Housing Finance Agency Single Family
Housing Rental Series A
(AMT) 5.88% 08/01/28 ............................ 2,610,000 2,610,966
</TABLE>
<PAGE>
DELAWARE-VOYAGEUR MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS - 19.27%
Minnesota Housing Finance Agency Single Family
Housing Rental
5.95% 02/01/15 (AMBAC) ........................... $2,480,000 $ 2,528,806
Minnesota Housing Finance Agency Single Family
Housing Rental
5.95% 02/01/18 (MBIA) ............................ 7,525,000 7,634,188
Minnesota Housing Finance Agency Single Family
Mortgage Series D (AMT)
5.80% 07/01/21 ................................... 5,000,000 5,008,250
Minnetonka Multifamily Housing Cedar Hills Project
7.50% 12/01/27 (FHA) ............................. 500,000 515,645
Minnetonka Multifamily Housing Cedar Hills Project
7.50% 12/01/17 (FHA) ............................. 400,000 418,952
Scott County, Minnesota Housing & Redevelopment
Authority Facility Lease Revenue-Justice Center
Project 5.50% 12/01/15 ........................... 1,755,000 1,763,178
South St. Paul, HRA Single Family Housing Mortgage
Series 1993 5.75% 09/01/20 (FNMA)................. 2,410,000 2,414,603
St. Paul HRA Multifamily Housing
6.60% 10/01/12 (FHA) ............................. 4,000,000 4,222,880
White Bear Lake Multifamily Housing Lake Square
5.88% 02/01/15 (FHA) ............................. 1,055,000 1,067,787
-----------
57,524,017
-----------
LEASE/CERTIFICATES OF
PARTICIPATION - 0.69%
Stearns County HRA Courthouse Project
7.00% 02/01/11 (AMBAC) ........................... 2,000,000 2,075,480
----------
2,075,480
-----------
POLLUTION CONTROL
REVENUE BONDS - 0.54%
Minnesota Public Facilities Authority Water
Pollution Control Revenue
6.50% 03/01/14 (MBIA) ............................ 1,500,000 1,605,210
----------
1,605,210
-----------
POWER AUTHORITY
REVENUE BONDS - 5.91%
Bass Brook Pollution Control Revenue for Minnesota
Power & Light Company
6.00% 07/01/22 .................................. 3,250,000 3,354,682
Marshall Utility Revenue
6.45% 07/01/10 (FSA) ............................. 500,000 539,025
Marshall Utility Revenue
6.45% 07/01/11 (FSA) ............................. 100,000 107,591
Marshall Utility Revenue
6.50% 07/01/12 (FSA) ............................. 500,000 536,560
Marshall Utility Revenue
6.50% 07/01/13 (FSA) ............................. 500,000 535,230
Northern Minnesota Municipal Power Agency
Electric System Revenue
5.50% 01/01/18 (AMBAC) ........................... 4,200,000 4,184,627
Northern Minnesota Municipal Power Agency
Series B 5.90% 01/01/08 (AMBAC)................... 700,000 735,399
Southern Minnesota Municipal Power Agency
5.75% 01/01/18 (FGIC) ............................ 4,570,000 4,625,387
</TABLE>
1997 semi-annual report 17
<PAGE>
DELAWARE-VOYAGEUR MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
POWER AUTHORITY REVENUE BONDS (CONTINUED)
Southern Minnesota Municipal Power Agency
4.75% 01/01/16 (MBIA)............................. $ 1,000,000 $ 910,370
Southern Minnesota Municipal Power Agency
Revenue 5.75% 01/01/18 (AMBAC).................... 1,330,000 1,346,119
Southern Minnesota Municipal Power Agency,
Inverse Floater 7.67% 01/01/18.................... 750,000 760,650
----------
17,635,640
----------
*PRE-REFUNDED BONDS - 25.08%
Brainerd Independent School District #181
7.00% 06/01/09 (FGIC)
(Escrowed to maturity) ........................... 515,000 557,410
Brainerd Independent School District #181
7.00% 06/01/10 (FGIC)
(Escrowed to maturity) ........................... 550,000 595,293
Centennial Independent School District #12
7.10% 02/1/09-00 (FSA) ........................... 200,000 213,466
Centennial Independent School District #12
7.15% 02/1/11-00 (FSA) ........................... 450,000 480,843
Centennial Independent School District #12
7.15% 02/1/12-00 (FSA) ........................... 250,000 267,135
Dakota & Washington Counties HRA Single Family
Mortgage Revenue 8.38% 09/01/21 (GNMA)
(Escrowed to maturity) ........................... 14,115,000 18,987,639
Dakota & Washington Counties HRA Single Family
Mortgage Revenue 8.15% 09/01/16 (MBIA)
(Escrowed to maturity) ........................... 405,000 518,611
Dakota, Washington & Anoka Counties HRA Single
Family Housing 8.45% 09/01/19 (GNMA)
(Escrowed to maturity) ........................... 9,000,000 11,993,940
Delano Independent School District #879
7.25% 02/01/10 (AMBAC)
(Escrowed to maturity) ........................... 500,000 542,025
Duluth EDA Health Care-Duluth Clinic
6.30% 11/1/22-04 (AMBAC) ......................... 1,060,000 1,163,339
Elk River Independent School District
7.00% 02/01/10 (FSA)
(Escrowed to maturity) ........................... 200,000 211,682
Elk River Independent School District #728
6.30% 02/01/14 (FSA)
(Escrowed to maturity) ........................... 500,000 532,160
Elk River Independent School District #728
6.30% 02/01/15 (FSA)
(Escrowed to maturity) ........................... 665,000 707,773
Lake Of The Woods Independent School
District #390 7.35% 02/01/15 (AMBAC)
(Escrowed to maturity) ........................... 200,000 209,292
Lake Of The Woods Independent School
District #390 7.35% 02/01/16 (AMBAC)
(Escrowed to maturity) ........................... 250,000 261,615
Maplewood Independent School District #622
7.10% 02/1/25-05 (FSA). .......................... 11,525,000 13,183,792
Maplewood Independent School District #622
7.10% 02/1/19-05 (MBIA) .......................... 5,935,000 6,809,522
Minnesota State University System
7.40% 06/30/19-99 (MBIA) ......................... 760,000 806,596
</TABLE>
<PAGE>
DELAWARE-VOYAGEUR MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED BONDS (CONTINUED)
South Washington County Independent School
District #883 6.88% 06/01/11 (FGIC)
(Escrowed to maturity) ........................... $520,000 $552,297
Southern Minnesota Municipal Power Agency
Revenue 5.75% 01/01/18 (MBIA)
(Escrowed to maturity) ........................... 3,790,000 3,880,013
Southern Minnesota Municipal Power Agency
Revenue 5.75% 01/01/18 (MBIA)
(Escrowed to maturity) ........................... 1,000,000 1,023,750
Southern Minnesota Municipal Power Agency
Revenue 5.75% 01/01/18 (AMBAC)
(Escrowed to maturity) ........................... 670,000 685,913
St. Cloud Hospital Facility Revenue
7.00% 07/1/07-01 (AMBAC) ......................... 500,000 556,325
St. Cloud Hospital Revenue Series C
6.75% 07/1/15-01 (AMBAC) ......................... 500,000 550,820
St. Francis Independent School District #15
7.60% 02/01/09 (FGIC)
(Escrowed to maturity) ........................... 250,000 254,833
St. Louis Park Methodist Hospital
7.25% 07/1/18-00 (AMBAC) ......................... 500,000 548,940
St. Michael Albertville Independent School
District 7.25% 02/01/10 (AMBAC)
(Escrowed to maturity) ........................... 725,000 737,999
St. Michael Albertville Independent School
District 7.25% 02/01/11 (AMBAC)
(Escrowed to maturity) ........................... 775,000 788,896
St. Michael Albertville Independent School
District 7.25% 02/01/12 (AMBAC)
(Escrowed to maturity) ........................... 255,000 259,572
St. Michael Albertville Independent School
District 7.25% 02/01/13 (AMBAC)
(Escrowed to maturity) ........................... 795,000 809,254
Stillwater Independent School District #834
6.75% 02/01/10 (FGIC)
(Escrowed to maturity) ........................... 1,000,000 1,035,860
Warroad Independent School District #690
6.85% 02/01/13 (AMBAC)
(Escrowed to maturity) ........................... 500,000 527,400
Washington County HRA Jail Facilities
7.00% 02/1/12-02 (MBIA) .......................... 500,000 552,040
Western Minnesota Municipal Power Agency
Revenue 9.75% 01/01/16
(Escrowed to maturity) ........................... 530,000 784,548
Western Municipal Power Agency Series A
6.60% 01/01/10 (MBIA)
(Escrowed to maturity) ........................... 2,000,000 2,221,800
Wright County 7.20% 12/1/12-99 (FSA)............... 1,000,000 1,064,269
----------
74,876,662
----------
WATER AND SEWER REVENUE BONDS - 0.26%
Moorhead Minnesota Public Utilities
6.25% 11/01/12 (MBIA) ............................ 735,000 771,485
----------
771,485
----------
</TABLE>
18 1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
OTHER REVENUE BONDS - 0.39%
Minneapolis Tax Increment Revenue
7.00% 03/01/03 (MBIA) ............................ $1,140,000 $ 1,159,528
------------
1,159,528
------------
Total Municipal Bonds
(cost of $284,471,124) ........................... 298,800,942
------------
SHORT TERM INVESTMENTS - 0.67%
Federated Minnesota Municipal Money Market......... 2,018,000 2,018,000
------------
Total Short Term Investments
(cost 2,018,000) ................................. 2,018,000
------------
TOTAL MARKET VALUE OF SECURITIES OWNED -100.77%
(cost of $286,489,124)** ......................... 300,818,942
LIABILITIES NET OF RECEIVABLES AND
OTHER ASSETS - (0.77%) ........................... (2,294,613)
------------
NET ASSETS APPLICABLE TO 28,143,438 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ........... 298,524,329
============
NET ASSET VALUE - MINNESOTA INSURED FUND A CLASS
($287,495,963 / 27,103,124 shares) ............... $10.61
======
NET ASSET VALUE - MINNESOTA INSURED FUND B CLASS
($7,848,843 / 740,630 shares) .................... $10.60
======
NET ASSET VALUE - MINNESOTA INSURED FUND C CLASS
($3,179,523 / 299,684 shares) .................... $10.61
======
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which each bond is
pre-refunded.
** Also cost for federal tax purposes.
AMBAC - Insured by the AMBAC Indemnity Corporation
AMT - Subject to Alternative Minimum Tax
Connie Lee - Insured by the College Construction Insurance Association
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common Stock, $.01 par value, 10,000,000,000 shares
authorized to the Fund with 1,000,000,000 shares allocated
to Minnesota Insured Fund A Class 1,000,000,000 shares
allocated to Minnesota Insured Fund B Class 1,000,000,000
shares allocated to Minnesota Insured Fund C Class ............................ $291,981,660
Accumulated overdistributed net investment income .............................. (83,132)
Accumulated net realized loss on investments ................................... (7,704,017)
Net unrealized gain on investments ............................................. 14,329,818
------------
Total Net Assets ............................................................... $298,524,329
============
</TABLE>
See accompanying notes
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE
MINNESOTA INTERMEDIATE FUND
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS - 97.01%
GENERAL OBLIGATION BONDS - 2.38%
Olmstead County Resource Recovery Series A
5.90% 02/01/05 ........................................ $1,175,000 $1,232,903
Western Lake Superior Sanitation District
6.10% 10/01/00 ........................................ 225,000 229,975
----------
1,462,878
----------
HIGHER EDUCATION REVENUE BONDS - 6.12%
Minnesota Higher Education Facility Authority
Augsburg Series 4F2 5.75% 05/01/16..................... 3,700,000 3,767,266
-----------
3,767,266
-----------
HOSPITAL REVENUE BONDS - 10.11%
Furgus Falls Health Care Facility Broer Memorial
Home Project 6.20% 11/01/05 ........................... 100,000 101,285
Furgus Falls Health Care Facility Broer Memorial
Home Project 6.30% 11/01/06 ........................... 200,000 202,792
Furgus Falls Health Care Facility Broer Memorial
Home Project 6.40% 11/01/07 ........................... 200,000 202,778
Furgus Falls Health Care Facility Broer Memorial
Home Project 6.60% 11/01/09 ........................... 240,000 243,302
Furgus Falls Health Care Facility Broer Memorial
Home Project 6.70% 11/01/10 ........................... 260,000 263,562
Maplewood Healthcare Facility Healtheast
5.70% 11/15/02 ........................................ 1,000,000 1,007,260
Maplewood Healthcare Facility Healtheast
5.95% 11/15/06 ........................................ 2,200,000 2,217,160
Minneapolis Health Care Facility Jones-Harrison
Project 8.35% 09/01/21 ................................ 905,000 968,079
Rochester Nursing Home & Multifamily Housing
Revenue Samaritan Bethany, Inc.
5.60% 05/01/02 ........................................ 200,000 201,830
Rochester Nursing Home & Multifamily Housing
Revenue Samaritan Bethany, Inc.
5.80% 05/01/03 ........................................ 250,000 252,278
Rochester Nursing Home & Multifamily Housing
Revenue Samaritan Bethany, Inc.
6.00% 05/01/04 ........................................ 300,000 302,718
Rochester Nursing Home & Multifamily Housing
Revenue Samaritan Bethany, Inc.
6.10% 05/01/05 ........................................ 250,000 252,260
----------
6,215,304
----------
HOUSING REVENUE BONDS - 3.04%
Burnsville Multifamily Housing Revenue Burnsville
Apts. Project (LOC: TCF)
7.00% 09/01/19 ........................................ 580,000 582,655
Minnesota HFA Single Family Mortgage Revenue
Series C 6.30% 01/01/99 ............................... 70,000 70,717
Oakdale, Minnesota Housing-Oak Meadows Project
6.50% 04/01/10 ........................................ 295,000 297,926
</TABLE>
1997 semi-annual report 19
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA INTERMEDIATE FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Oakdale, Minnesota Housing-Oak Meadows Project
6.20% 04/01/07......................................... $ 150,000 $ 151,511
Oakdale, Minnesota Housing-Oak Meadows
6.30% 04/01/08......................................... 260,000 262,605
St. Paul HRA Minnesota Public Radio, (LOC: First
Bank) 6.40% 06/01/98................................... 300,000 304,050
St. Paul HRA Minnesota Public Radio, (LOC: First
Bank) 6.60% 06/01/99................................... 100,000 102,217
St. Paul Housing and Redevelopment Single Family
Mortgage 6.90% 12/01/21 (FNMA)......................... 95,000 99,951
----------
1,871,632
----------
INDUSTRIAL DEVELOPMENT
REVENUE BOND - 17.66%
Brooklyn Center CDR Brookdale Association
5.70% 12/01/07 (NWNL GTY).............................. 1,000,000 1,039,640
Duluth Gross Revenue Bond-Duluth Entertainment
Project 5.75% 12/01/97................................. 260,000 261,394
Duluth Gross Revenue Bond-Duluth Entertainment
Project 6.00% 12/01/98................................. 275,000 279,241
Duluth Gross Revenue Bond-Duluth Entertainment
Project 7.00% 12/01/03................................. 1,250,000 1,355,675
Duluth Gross Revenue Rec. Facility Duluth
Entertainment 7.30% 12/01/06........................... 250,000 277,360
Metropolitan Council HHH Metrodome Sports
Facility Revenue 1992 6.00% 10/01/09................... 3,520,000 3,659,850
Minnesota Public Facilities Authority Revenue
Series A 6.55% 03/01/03................................ 1,720,000 1,876,038
St. Paul Minnesota CDR Fort Rd Medical
7.50% 09/01/02 (ASSET GTY)............................. 2,000,000 2,109,860
----------
10,859,058
----------
LEASE/CERTIFICATES OF
PARTICIPATION - 3.75%
Beltrami County Housing & Redevelopment
Authority Revenue 5.70% 02/01/06....................... 315,000 324,945
Beltrami County Housing & Redevelopment
Authority Revenue 5.80% 02/01/07....................... 335,000 345,536
Beltrami County Housing & Redevelopment
Authority Revenue 5.90% 02/01/08....................... 355,000 366,122
Beltrami County Housing & Redevelopment
Authority Revenue 6.00% 02/01/09....................... 380,000 391,860
Beltrami County Housing & Redevelopment
Authority Revenue 6.00% 02/01/10....................... 405,000 415,121
Beltrami County Housing & Redevelopment
Authority Revenue 6.10% 02/01/11...................... 430,000 442,035
Red Wing Pottery Project 7.75% 12/15/97................. 18,402 18,402
----------
2,304,021
----------
*PRE-REFUNDED BONDS - 43.15%
Austin Independent School District #492
6.88% 02/01/12
(MBIA)(Escrowed to maturity)........................... 1,205,000 1,291,555
Braham Independent School District #314
6.30% 02/01/19 (AMBAC)
(Escrowed to maturity)................................. 3,015,000 3,175,066
</TABLE>
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA INTERMEDIATE FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED BONDS (CONTINUED)
Duluth EDU St. Mary's Hospital
7.90% 02/15/98 (Escrowed to maturity).................. $ 250,000 $ 256,155
Duluth EDU St. Mary's Hospital
7.90% 02/15/99 (Escrowed to maturity).................. 150,000 158,793
Eden Valley Watkins Independent School
District #463 6.55% 02/01/11 (FSA)
(Escrowed to maturity)................................. 250,000 268,625
Eden Valley Watkins Independent School
District #463 6.60% 02/01/16 (FSA)
(Escrowed to maturity)................................. 615,000 662,072
Mankato Independent School District #77
6.35% 02/01/13 (FSA)
(Escrowed to maturity)................................. 2,570,000 2,740,520
Minneapolis/St. Paul HealthOne Series B
7.55% 08/15/00 (Escrowed to maturity).................. 325,000 354,884
Minneapolis/St. Paul HealthOne Series C
7.45% 08/15/99 (Escrowed to maturity).................. 400,000 426,372
Minnesota State 6.25% 08/1/10-02........................ 4,000,000 4,312,520
Olmstead County 6.85% 02/1/02-01........................ 800,000 863,912
Olmstead County 6.90% 02/1/03-01........................ 900,000 973,377
Olmstead County 6.95% 02/1/04-01........................ 950,000 1,029,012
St. Cloud Hospital Facility Revenue
7.00% 07/1/20-01 (AMBAC)............................... 2,740,000 3,043,345
St. Louis Park Methodist Hospital
7.25% 07/1/15-00 (AMBAC)............................... 3,500,000 3,842,580
Waconia Independent School District #110
6.40% 02/01/15 (FGIC)
(Escrowed to maturity)................................. 3,000,000 3,131,940
-----------
26,530,728
-----------
POWER AUTHORITY REVENUE BONDS - 5.70%
Eveleth IDR for Minnesota Power And Light
Company 6.13% 01/01/04................................. 2,500,000 2,606,500
Northern Minnesota Municipal Power Agency
7.20% 01/01/99......................................... 860,000 896,232
-----------
3,502,732
-----------
OTHER REVENUE BONDS - 5.09%
Hibbing Economic Development Authority Revenue
5.40% 02/01/03......................................... 1,180,000 1,172,660
Hibbing Economic Development Authority Revenue
6.10% 02/01/08......................................... 650,000 647,108
Richfield Shoppes CDR-Richfield Shoppes Project
7.50% 10/01/04......................................... 1,185,000 1,309,259
-----------
3,129,027
-----------
Total Municipal Bonds
(cost of $57,570,194).................................. 59,642,646
-----------
SHORT TERM INVESTMENTS - 1.23%
Federated Minnesota Municipal Money Market
3.75%.................................................. 753,000 753,000
-----------
Total Short Term Investments
(cost $753,000)........................................ 753,000
-----------
</TABLE>
20 1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA INTERMEDIATE FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
MARKET
VALUE
-------------
<S> <C>
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.24%
(cost of $58,323,194)**................................................... $60,395,646
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.76%................................................ 1,082,897
-----------
NET ASSETS APPLICABLE TO 5,596,428 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00%.................................... $61,478,543
===========
NET ASSET VALUE - TAX FREE MINNESOTA INTERMEDIATE
FUND A CLASS ($59,541,342 / 5,420,131 shares)............................. $10.99
======
NET ASSET VALUE - TAX FREE MINNESOTA INTERMEDIATE
FUND B CLASS ($741,739 / 67,483 shares)................................... $10.99
======
NET ASSET VALUE - TAX FREE MINNESOTA INTERMEDIATE
FUND C CLASS ($1,195,462 / 108,814 shares)................................ $10.99
======
</TABLE>
- --------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in
which each bond is pre-refunded.
** Also cost for federal tax purposes.
AMBAC - Insured by the AMBAC Indemnity Corporation
AMT - Subject to Alternative Minimum Tax
ASSET GTY - Insured by the Asset Guaranty Insurance Company
Connie Lee - Insured by the College Construction Insurance Association
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
NWNL GTY - Insured by the Northwestern National Life Insurance Company
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
MARKET
VALUE
-------------
<S> <C>
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common Stock, $.01 par value, 10,000,000,000 shares
authorized to the Fund with 1,000,000,000 shares allocated to
Tax Free Minnesota Intermediate Fund A Class 1,000,000,000
shares allocated to Tax Free Minnesota Intermediate Fund
B Class 1,000,000,000 shares allocated to Tax Free
Minnesota Intermediate Fund C Class.................................... $59,854,878
Accumulated overdistributed net investment income....................... (9,332)
Accumulated net realized loss on investments............................ (439,455)
Net unrealized gain on investments...................................... 2,072,452
-----------
Total Net Assets........................................................ $61,478,543
===========
</TABLE>
See accompanying notes
<PAGE>
DELAWARE-VOYAGEUR
MINNESOTA HIGH YIELD FUND
STATEMENT OF NET ASSETS
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS - 100.85%
GENERAL OBLIGATION BONDS - 1.87%
Esko Independent School District #99
5.75% 04/01/17 (FSA)................................... $ 100,000 $ 101,712
Inver Grove Heights Series A
5.75% 02/01/13......................................... 100,000 102,097
Stewartville Independent School District Series A
5.75% 02/01/12......................................... 100,000 103,340
Waconia Independent School District Series 93A
5.45% 02/01/15 (FSA)................................... 100,000 100,159
----------
407,308
----------
HIGHER EDUCATION REVENUE BONDS - 5.10%
Minnesota State Higher Education Facility
Macalaster College 4C 5.50% 03/01/12................... 100,000 101,615
Minnesota State Higher Education Facility St.
Mary's College 3Q 6.15% 10/01/23....................... 900,000 908,577
Minnesota State University System Revenue
Bonds 93A 6.10% 06/30/23............................... 100,000 101,715
----------
1,111,907
----------
HOSPITAL REVENUE BONDS - 37.98%
Cambridge Healthcare Facility Revenue-Grandview
Christian Home 7.25% 09/01/26.......................... 125,000 126,525
Cannon Falls Nursing Home-Franciscan Health
Community Project 7.25% 07/01/21....................... 100,000 101,037
Duluth St. Francis Health Care Facility
6.75% 12/01/17......................................... 325,000 338,315
Fergus Falls Health Care Facility Revenue-
Lake Region Hospital 6.50% 09/01/18.................... 750,000 772,868
Glencoe Health Care Revenue
6.40% 12/01/15......................................... 275,000 273,510
Little Canada Senior Facility Residence 1992-Pres.
Home 7.25% 07/01/12.................................... 250,000 258,853
Mankato Health Facilities Revenue Series A-
Lutheran Homes 6.875% 10/01/26......................... 300,000 302,505
Minneapolis Health Care-American Baptist Homes
8.70% 11/01/09......................................... 150,000 165,965
Minneapolis, Minnesota Housing & Health Care
Facility Revenue (Augustana Chapel View Homes)
6.50% 06/01/17......................................... 1,370,000 1,363,834
Minnesota Agricultural & Economic Development
Health Care Systems-Fairview Hospital-A
5.50% 11/15/17......................................... 1,000,000 992,660
Robbinsdale North Memorial Medical
5.50% 05/15/23 (AMBAC)................................. 100,000 98,099
Rochester Health Care Facilities Revenue
7.874% 11/15/15........................................ 1,500,000 1,608,254
</TABLE>
1997 semi-annual report 21
<PAGE>
DELAWARE-VOYAGEUR MINNESOTA HIGH YIELD FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Springfield St. John's Lutheran Home Revenue
8.50% 11/01/19......................................... $ 150,000 $ 158,732
St. Paul Housing and Redevelopment Hospital
Health East Series B 6.625% 11/01/17................... 500,000 519,195
St. Paul Housing and Redevelopment Hospital
Health East Series A 6.63% 11/01/17.................... 250,000 259,598
Waconia Good Samaritan Housing and
Redevelopment 6.00% 06/01/14........................... 660,000 664,910
Wadena County Health Care Facility
7.75% 09/01/24......................................... 250,000 267,123
----------
8,271,983
----------
HOUSING REVENUE BONDS - 31.44%
Brooklyn Center Four Court Multifamily Housing
7.50% 06/01/25......................................... 370,000 373,563
Carver Multifamily Housing Lake Grace
6.25% 07/01/28......................................... 335,000 334,997
Carver Multifamily Housing Lake Grace
8.00% 07/01/28......................................... 200,000 199,998
Chanhassen Multifamily Housing Heritage Park
6.20% 07/01/30......................................... 300,000 305,928
Eden Prairie Multifamily Housing Subordinated-
Tanager Creek 8.00% 06/20/31........................... 785,000 799,860
Minneapolis Multifamily Housing Olson Townhomes
6.00% 12/01/19......................................... 800,000 800,464
Minneapolis-Nicollet Multifamily Housing
6.00% 12/01/19......................................... 300,000 304,686
Minnesota Housing Finance Authority Single Family
Mortgage Series E 6.25% 01/01/23....................... 100,000 102,081
Minnesota Housing Finance Authority Single Family
Housing 5.875% 01/01/17................................ 100,000 101,418
Minnetonka Multifamily Housing Beacon Hill
7.55% 06/01/19......................................... 200,000 210,156
New Brighton Multifamily Polynesian Village
7.60% 04/01/25......................................... 300,000 305,538
Oakdale, Minnesota Housing-Oak Meadows Project
6.75% 04/01/15......................................... 1,500,000 1,514,700
St. Anthony Multifamily Housing Chandler
6.05% 11/20/16 (GNMA).................................. 135,000 138,561
St. Louis Park Multifamily Mortgage Revenue
5.50% 11/01/13......................................... 125,000 123,269
</TABLE>
<PAGE>
DELAWARE-VOYAGEUR MINNESOTA HIGH YIELD FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Stillwater Multifamily Housing Cottages
6.75% 11/01/11............................... $ 205,000 $ 205,246
Stillwater Multifamily Housing Cottages
7.00% 11/01/27............................... 340,000 342,329
Stillwater Multifamily Housing Cottages
7.00% 11/01/16............................... 680,000 684,658
----------
6,847,452
----------
INDUSTRIAL DEVELOPMENT
REVENUE BONDS - 1.33%
Red Wing IDR Kmart (First Mortgage)
5.50% 07/01/08............................... 300,000 290,154
----------
290,154
----------
LEASE/CERTIFICATES OF
PARTICIPATION - 2.75%
Beltrami County 6.10% 02/01/12................ 460,000 471,449
Rice County 6.00% 12/01/21.................... 125,000 127,420
----------
598,869
----------
POWER AUTHORITY
REVENUE BONDS - 5.58%
Bass Brook PCR for Minnesota Power and Light
Revenue 6.00% 07/01/22....................... 805,000 813,219
Southern Minnesota Municipal Power Agency
5.75% 01/01/18 (FGIC)........................ 100,000 101,212
Western Municipal Power Agency Revenue
6.125% 01/01/16.............................. 300,000 300,639
----------
1,215,070
----------
OTHER REVENUE BONDS - 14.80%
Hibbing Economic Development Authority
6.40% 02/01/12............................... 530,000 531,468
Minneapolis, Minnesota Community Development
Agency (Common Board Fund-Series 2)
6.20% 06/01/17............................... 750,000 767,835
Minneapolis, Minnesota Community Development
Agency Supported Development Revenue Ltd.
Tax-Series 4 6.20% 06/01/17.................. 1,055,000 1,069,727
Puerto Rico 5.375% 07/01/25................... 500,000 481,455
Woodbury Golf Course Revenue
6.75% 02/01/22............................... 365,000 374,516
----------
3,225,001
----------
Total Municipal Bonds
(cost $21,641,411)........................... 21,967,744
----------
SHORT TERM INVESTMENTS - 0.04%
Federated Minnesota Municipal Money Market.... 9,000 9,000
----------
Total Short Term Investments
(cost $9,000)................................ 9,000
----------
</TABLE>
22 1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR MINNESOTA HIGH YIELD FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
MARKET
VALUE
-------------
<S> <C>
TOTAL MARKET VALUE OF SECURITIES OWNED -100.89%
(cost of $21,650,411)**.......................................... $21,976,744
LIABILITIES NET OF RECEIVABLES
AND OTHER ASSETS - (0.89%)....................................... (194,806)
-----------
NET ASSETS APPLICABLE TO 2,124,637 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00%........................... $21,781,938
===========
NET ASSET VALUE - MINNESOTA HIGH YIELD MUNICIPAL BOND
FUND A CLASS ($13,399,482 / 1,307,286 shares).................... $10.25
======
NET ASSET VALUE - MINNESOTA HIGH YIELD MUNICIPAL BOND
FUND B CLASS ($6,150,313 / 599,611 shares)....................... $10.26
======
NET ASSET VALUE - MINNESOTA HIGH YIELD MUNICIPAL BOND
FUND C CLASS ($2,232,143 / 217,741 shares)....................... $10.25
======
</TABLE>
- ---------------
** Also cost for federal tax purposes.
AMBAC - Insured by the AMBAC Indemnity Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
<PAGE>
DELAWARE-VOYAGEUR MINNESOTA HIGH YIELD FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
MARKET
VALUE
-------------
<S> <C>
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common Stock, $.01 par value, 100,000,000,000 shares
authorized to the Fund with 10,000,000,000 shares allocated
to Minnesota High Yield Municipal Bond Fund A Class
10,000,000,000 shares allocated to Minnesota High Yield
Municipal Bond Fund B Class 10,000,000,000 shares allocated
to Minnesota High Yield Municipal Bond Fund C Class................. $21,513,985
Accumulated overdistributed net investment income.................... (43,440)
Accumulated net realized loss on investments......................... (14,940)
Net unrealized gain on investments................................... 326,333
-----------
Total Net Assets..................................................... $21,781,938
===========
</TABLE>
See accompanying notes
1997 semi-annual report 23
<PAGE>
DELAWARE-VOYAGEUR FUNDS
STATEMENT OF OPERATIONS
SIX MONTHS ENDING JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
TAX-FREE MINNESOTA
TAX-FREE MINNESOTA HIGH YIELD
MINNESOTA MINNESOTA INTERMEDIATE MUNICIPAL
FUND INSURED FUND FUND BOND FUND
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ................................................ $13,239,684 $9,068,236 $1,841,638 $466,986
----------- ---------- ---------- --------
13,239,684 9,068,236 1,841,638 466,986
----------- ---------- ---------- --------
EXPENSES:
Management fees ......................................... 1,060,030 751,534 125,587 32,709
Dividend disbursing, transfer agent and custodian
fees and expenses ...................................... 305,337 187,143 83,860 9,850
Distribution expense .................................... 566,470 414,741 85,237 43,077
Registration fees ....................................... 5,567 12,994 4,435 4,023
Reports and statements to shareholders .................. 43,863 32,295 6,611 1,502
Accounting fees and salaries ............................ 39,241 26,719 5,769 1,886
Professional fees ....................................... 22,943 15,361 7,906 4,058
Directors' fees ......................................... 7,724 5,353 1,514 375
Amortization of organization expenses ................... -- -- -- 688
Other ................................................... 9,240 8,840 1,136 557
----------- ---------- ---------- --------
2,060,415 1,454,980 322,055 98,725
Less expenses waived or absorbed ........................ (109,324) (32,390) (17,547) (57,585)
----------- ---------- ---------- --------
Total net expenses ...................................... 1,951,091 1,422,590 304,548 41,140
----------- ---------- ---------- --------
NET INVESTMENT INCOME ................................... 11,288,593 7,645,646 1,537,130 425,846
----------- ---------- ---------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investments: ................ 1,223,541 299,259 349,808 (8,131)
Net change in unrealized appreciation (depreciation)
of investments: ....................................... 1,364,610 37,541 (367,257) 237,472
----------- ---------- ---------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS ......................................... 2,588,151 336,800 (17,449) 229,341
----------- ---------- ---------- --------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................................ $13,876,744 $7,982,446 $1,519,681 $655,187
=========== ========== ========== ========
</TABLE>
See accompanying notes
24 1997 semi-annual report
<PAGE>
THE DELAWARE-VOYAGEUR FUNDS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
TAX-FREE MINNESOTA FUND MINNESOTA INSURED FUND
------------------------ ------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
6/30/97 12/31/96 6/30/97 12/31/96
(UNAUDITED) (UNAUDITED)
INCREASE IN NET ASSETS FROM
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income .................. $11,288,593 $22,746,587 $7,645,646 $14,894,385
Net realized gain (loss) on
investments............................ 1,223,541 515,784 299,259 293,417
Net change in unrealized appreciation
(depreciation) of investments ......... 1,364,610 (8,943,154) 37,541 (4,586,047)
----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations.............. 13,876,744 14,319,217 7,982,446 10,601,755
----------- ----------- ----------- -----------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income:
A Class................................ (11,222,128) (22,406,019) (7,563,064) (14,451,758)
B Class................................ (163,061) (203,627) (157,051) (248,884)
C Class................................ (64,076) (120,510) (69,894) (136,712)
----------- ----------- ----------- -----------
(11,449,265) (22,730,156) (7,790,009) (14,837,354)
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class................................ 18,784,413 28,935,567 7,871,374 19,743,497
B Class................................ 1,707,725 3,893,971 1,354,915 2,213,483
C Class................................ 332,468 1,575,266 470,076 962,058
Net asset value of shares issued in
connection with the acquisition of
Great Hall Minnesota Insured Tax-
Exempt Fund (note 5):
A Class................................ N/A N/A N/A 23,310,124
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class................................ 8,047,582 14,510,299 5,793,134 10,183,091
B Class................................ 132,545 159,491 131,960 198,159
C Class................................ 60,502 95,792 63,356 118,019
----------- ----------- ---------- -----------
29,065,235 49,170,386 15,684,815 56,728,431
Cost of shares repurchased: ----------- ----------- ---------- -----------
A Class................................ (43,004,687) (61,934,519) (31,224,261) (51,938,099)
B Class................................ (405,805) (500,598) (465,103) (213,150)
C Class................................ (972,106) (867,298) (483,850) (1,076,363)
----------- ----------- ----------- -----------
(44,382,598) (63,302,415) (32,173,214) (53,227,612)
----------- ----------- ----------- -----------
Increase (Decrease) in assets derived
from capital share transactions........ (15,317,363) (14,132,029) (16,488,399) 3,500,819
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS............................. (12,889,884) (22,542,968) (16,295,962) (734,780)
NET ASSETS:
Beginning of period .................... 437,696,176 460,239,144 314,820,291 315,555,071
----------- ----------- ----------- -----------
End of period........................... $424,806,292 $437,696,176 298,524,329 $314,820,291
----------- ----------- ----------- -----------
</TABLE>
<PAGE>
RESTUBBD TABLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
TAX-FREE MINNESOTA MINNESOTA HIGH YIELD
INTERMEDIATE FUND MUNICPAL BOND FUND
------------------------ --------------------------
SIX MONTHS SIX MONTHS PERIOD FROM
ENDED YEAR ENDED ENDED 6/4/96*
6/30/97 12/31/96 6/30/97 TO 12/31/96
(UNAUDITED) (UNAUDITED)
INCREASE IN NET ASSETS FROM
OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income .................. $1,537,130 $3,281,209 $425,846 $145,301
Net realized gain (loss) on
investments............................ 349,808 58,144 (8,131) (6,809)
Net change in unrealized appreciation
(depreciation) of investments ......... (367,257) (1,060,245) 237,472 88,861
----------- ----------- ----------- ----------
Net increase in net assets
resulting from operations.............. 1,519,681 2,279,108 655,187 227,353
----------- ----------- ----------- ----------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income:
A Class................................ (1,514,123) (3,233,948) (298,217) (88,229)
B Class................................ (11,423) (7,825) (133,717) (41,302)
C Class................................ (26,018) (34,381) (40,555) (13,370)
----------- ----------- ----------- ----------
(1,551,564) (3,276,154) (472,489) (142,901)
----------- ----------- ----------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class................................ 3,326,788 8,813,544 7,377,187 7,102,907
B Class................................ 351,003 372,719 3,446,458 2,696,693
C Class................................ 496,744 862,998 1,328,876 948,440
Net asset value of shares issued in
connection with the acquisition of
Great Hall Minnesota Insured Tax-
Exempt Fund (note 5):
A Class................................ N/A N/A N/A N/A
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class................................ 1,177,390 2,225,412 188,566 43,874
B Class................................ 11,228 5,862 68,067 13,064
C Class................................ 27,165 27,628 34,444 7,823
----------- ----------- ----------- ----------
5,390,318 12,308,163 12,443,598 10,812,801
Cost of shares repurchased: ----------- ----------- ----------- ----------
A Class................................ (10,952,902) (16,425,703) (341,241) (1,124,003)
B Class................................ (30,531) 0 (157,504) 0
C Class................................ (466,350) (441,733) (51,164) (67,699)
----------- ----------- ----------- ----------
(11,449,783) (16,867,436) (549,909) (1,191,702)
----------- ----------- ----------- ----------
Increase (Decrease) in assets derived
from capital share transactions........ (6,059,465) (4,559,273) 11,893,689 9,621,099
----------- ----------- ----------- ----------
NET INCREASE (DECREASE) IN
NET ASSETS............................. (6,091,348) (5,556,319) 12,076,387 9,705,551
NET ASSETS:
Beginning of period .................... 67,569,891 73,126,210 9,705,551 0
----------- ----------- ----------- ----------
End of period........................... $61,478,543 $67,569,891 $21,781,938 $9,705,551
----------- ----------- ----------- ----------
</TABLE>
- ----------
* Commencement of operations.
See accompanying notes
1997 semi-annual report 25
<PAGE>
THE DELAWARE-VOYAGEUR FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
TAX-FREE MINNESOTA FUND - A CLASS
-----------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $ 12.40 $ 12.63 $ 11.33 $ 12.85 $ 12.21 $ 12.07
Income from investment operations:
Net investment income (loss) ................ 0.32 0.63 0.62 0.63 0.64 0.70
Net realized and unrealized gain from
investments ................................ 0.08 (0.23) 1.32 (1.48) 0.87 0.23
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net assets from
investment operations ...................... 0.40 0.40 1.94 (0.85) 1.51 0.93
--------- --------- --------- --------- --------- ---------
Less dividends and distributions:
Dividends from net investment income(1)...... (0.32) (0.63) (0.64) (0.61) (0.64) (0.70)
Distributions from net realized gain on
security transactions ...................... -- -- -- (0.05) (0.23) (0.09)
In excess of net realized gains ............. -- -- -- (0.01) -- --
Total dividends and distributions ........... (0.32) (0.63) (0.64) (0.67) (0.87) (0.79)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period ............... $ 12.48 $ 12.40 $ 12.63 $ 11.33 $ 12.85 $ 12.21
========= ========= ========= ========= ========= =========
Total Return(2) ............................. 3.37% 3.33% 17.49% (6.73%) 12.70% 7.97%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $414,564 $428,380 $455,220 $406,497 $458,145 $331,314
Ratio of expenses to average net assets(3) .. 0.91%(4) 0.92% 0.93% 0.90% 1.02% 0.96%
Ratio of expenses to average net assets
prior to expense limitation ................ 0.96%(4) 0.92% 0.93% 0.90% 1.02% 1.04%
Ratio of net investment income to average
net assets ................................. 5.33%(4) 5.13% 5.11% 5.29% 5.02% 5.73%
Ratio of net investment income to average net
assets prior to expense limitation ......... 5.28%(4) 5.13% 5.11% 5.29% 5.02% 5.65%
Portfolio turnover .......................... 19.46%(4) 27.67% 50.84% 24.26% 31.77% 23.60%
</TABLE>
- ---------------------
(1) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from
federal income tax.
(2) 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.
(3) For the years ended December 31, 1995 and 1996, the expense ratio
reflects the effect of gross expenses attributable to earnings
credits on uninvested cash balances received by the Fund. Prior
period expense ratios have not been adjusted.
(4) Annualized.
26 1997 SEMI-ANNUAL REPORT
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
TAX-FREE MINNESOTA FUND - B CLASS TAX-FREE MINNESOTA FUND - C CLASS
------------------------------------ ----------------------------------------------
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED YEAR ENDED 3/11/95(1) ENDED YEAR ENDED YEAR ENDED 5/4/94(1)
6/30/97 12/31/96 TO 12/31/95 6/30/97 12/31/96 12/31/95 TO 12/31/94
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $12.40 $12.62 $11.90 $12.41 $12.63 $11.33 $11.96
Income from investment operations:
Net investment income........................ 0.28 0.56 0.45 0.27 0.54 0.53 0.34
Net realized and unrealized gain (loss) from
investments................................. 0.08 (0.22) 0.71 0.07 (0.22) 1.32 (0.61)
------ ------ ------ ------ ------ ------ ------
Net increase (decrease) in net assets from
investment operations....................... 0.36 0.34 1.16 0.34 0.32 1.85 (0.27)
------ ------ ------ ------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income(2)...... (0.28) (0.56) (0.44) (0.27) (0.54) (0.55) (0.32)
Distributions from net realized gain on
security transactions....................... -- -- -- -- -- -- (0.04)
Total dividends and distributions ........... (0.28) (0.56) (0.44) (0.27) (0.54) (0.55) (0.36)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ............... $12.48 $12.40 $12.62 $12.48 $12.41 $12.63 $11.33
====== ====== ====== ====== ====== ====== ======
Total Return(3)............................... 3.05% 2.83% 9.95% 2.87% 2.64% 16.62% (2.30%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ..... $7,725 $6,233 $2,701 $2,517 $3,083 $2,319 $1,061
Ratio of expenses to average net assets(4)... 1.51%(5) 1.50% 1.38%(5) 1.66%(5) 1.67% 1.67% 1.72%(5)
Ratio of expenses to average net assets
prior to expense limitation................. 1.71%(5) 1.67% 1.63%(5) 1.71%(5) 1.67% 1.67% 1.72%(5)
Ratio of net investment income to average
net assets.................................. 4.73%(5) 4.53% 4.43%(5) 4.58%(5) 4.38% 4.33% 4.56%(5)
Ratio of net investment income to average net
assets prior to expense limitation ......... 4.53%(5) 4.36% 4.18%(5) 4.53%(5) 4.38% 4.33% 4.56%(5)
Portfolio turnover........................... 19.46%(5) 27.67% 50.84% 19.46%(5) 27.67% 50.84% 24.26%
</TABLE>
- ---------------------
(1) Commencement of operations.
(2) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(3) 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.
(4) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(5) Annualized.
1997 semi-annual report 27
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
MINNESOTA INSURED FUND - A CLASS
----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 10.60 $ 10.73 $ 9.61 $ 11.02 $ 10.27 $ 10.07
Income from investment operations:
Net investment income ....................... 0.26 0.52 0.51 0.54 0.54 0.59
Net realized and unrealized gain (loss) from
investments ............................... 0.01 (0.13) 1.14 (1.39) 0.84 0.25
--------- --------- --------- --------- --------- ---------
Net increase (decrease) in net assets from
investment operations ..................... 0.27 0.39 1.65 (0.85) 1.38 0.84
--------- --------- --------- --------- --------- ---------
Less dividends and distributions:
Dividends from net investment income(1) .... (0.26) (0.52) (0.53) (0.52) (0.54) (0.59)
Distributions from net realized
gain on security transactions ............. -- -- -- (0.04) (0.09) (0.05)
--------- --------- --------- --------- --------- ---------
Total dividends and distributions .......... (0.26) (0.52) (0.53) (0.56) (0.63) (0.64)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period .............. $ 10.61 $ 10.60 $ 10.73 $ 9.61 $ 11.02 $ 10.27
========= ========= ========= ========= ========= =========
Total Return(2) ............................ 2.70% 3.75% 17.52% (7.88%) 13.80% 8.57%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .... $287,496 $304,877 $307,734 $284,132 $311,187 $162,728
Ratio of expenses to average net assets(3) . 0.92%(4) 0.92% 0.87% 0.61% 0.70% 0.37%
Ratio of expenses to average net assets prior
to expense limitation ..................... 0.94%(4) 0.92% 0.92% 0.94% 1.02% 1.06%
Ratio of net investment income
to average net assets ..................... 5.11%(4) 4.93% 4.92% 5.29% 4.93% 5.66
Ratio of net investment income to average
net assets prior to expense limitation .... 5.09%(4) 4.93% 4.87% 4.96% 4.61% 4.97%
Portfolio turnover ......................... 29.41%(4) 14.04% 53.72% 24.75% 18.25% 14.11%
</TABLE>
- ----------
(1) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(2) 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.
(3) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(4) Annualized.
28 1997 semi-annual report
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
MINNESOTA INSURED FUND - B CLASS MINNESOTA INSURED FUND - C CLASS
---------------------------------------------------------------------------------------
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED YEAR ENDED 3/7/95(1) ENDED YEAR ENDED YEAR ENDED 5/4/94(1)
6/30/97 12/31/96 TO 12/31/95 6/30/97 12/31/96 12/31/95 TO 12/31/94
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $10.58 $10.72 $10.14 $10.60 $10.73 $ 9.61 $ 10.23
Income from investment operations:
Net investment income ...................... 0.22 0.45 0.38 0.22 0.44 0.43 0.30
Net realized and unrealized gain (loss) from
investments ............................... 0.02 (0.14) 0.58 0.01 (0.13) 1.14 (0.62)
------ ------ ------ ------ ------ -------- -------
Net increase (decrease) in net assets from
investment operations ..................... 0.24 0.31 0.96 0.23 0.31 1.57 (0.32)
------ ------ ------ ------ ------ -------- -------
Less dividends and distributions:
Dividends from net investment income(2) .... (0.22) (0.45) (0.38) (0.22) (0.44) (0.45) (0.28)
Distributions from net realized gain on
security transactions ..................... -- -- -- -- -- -- (0.02)
------ ------ ------ ------ ------ -------- -------
Total dividends and distributions .......... (0.22) (0.45) (0.38) (0.22) (0.44) (0.45) (0.30)
------ ------ ------ ------ ------ -------- -------
Net asset value, end of period ............. $10.60 $10.58 $10.72 $10.61 $10.60 $ 10.73 $ 9.61
====== ====== ====== ====== ====== ======== =======
Total Return(3) ........................... 2.40% 3.03% 9.59% 2.30% 2.98% 16.63% (3.14%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) .... $7,849 $6,817 $4,655 $3,180 $3,126 $ 3,166 $ 1,525
Ratio of expenses to average net assets(4) . 1.67%(5) 1.56% 1.34%(5) 1.67%(5) 1.68% 1.66% 1.36%(5)
Ratio of expenses to average net assets
prior to expense limitation ............... 1.69%(5) 1.68% 1.64%(5) 1.69%(5) 1.68% 1.67% 1.68%(5)
Ratio of net investment income to average
net assets ................................ 4.36%(5) 4.29% 4.15%(5) 4.36%(5) 4.18% 4.11% 4.68%(5)
Ratio of net investment income to average
net assets prior to expense limitation .... 4.34%(5) 4.17% 3.85%(5) 4.34%(5) 4.18% 4.10% 4.36%(5)
Portfolio turnover ......................... 29.41%(5) 14.04% 53.72% 29.41%(5) 14.04% 53.72% 24.75%
</TABLE>
- ---------
(1) Commencement of operations.
(2) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(3) 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.
(4) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(5) Annualized.
1997 semi-annual report 29
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
TAX-FREE MINNESOTA INTERMEDIATE FUND - A CLASS
----------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6/30/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 10.99 $ 11.14 $ 10.50 $ 11.16 $ 10.83 $ 10.69
Income from investment operations:
Net investment income ....................... 0.26 0.51 0.51 0.45 0.47 0.51
Net realized and unrealized gain (loss) from
investments ................................ -- (0.15) 0.64 (0.66) 0.37 0.18
------- ------- ------- ------- ------- -------
Net increase (decrease) in net assets from
investment operations ...................... 0.26 0.36 1.15 (0.21) 0.84 0.69
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income(1)...... (0.26) (0.51) (0.51) (0.45) (0.47) (0.51)
Distributions from net realized gain
on security transactions ................... -- -- -- -- (0.04) (0.04)
------- ------- ------- ------- ------- -------
Total dividends and distributions ........... (0.26) (0.51) (0.51) (0.45) (0.51) (0.55)
------- ------- ------- ------- ------- -------
Net asset value, end of period .............. $ 10.99 $ 10.99 $ 11.14 $ 10.50 $ 11.16 $ 10.83
======= ======= ======= ======= ======= =======
Total Return(2) ............................ 2.48% 3.46% 11.00% (1.91%) 7.88% 6.62%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ..... $59,541 $66,024 $72,405 $84,168 $75,374 $48,210
Ratio of expenses to average net assets(3) .. 0.95%(4) 0.89% 0.91% 0.92% 0.99% 1.09%
Ratio of expenses to average net assets prior
to expense limitation ....................... 1.00%(4) 0.89% 0.91% 0.92% 0.99% 1.09%
Ratio of net investment income
to average net assets ....................... 4.92%(4) 4.69% 4.61% 4.18% 4.18% 4.71%
Ratio of net investment income to average
net assets prior to expense limitation ..... 4.87%(4) 4.69% 4.61% 4.18% 4.18% 4.71%
Portfolio turnover .......................... 8.39%(4) 28.18% 40.28% 42.06% 19.13% 25.56%
</TABLE>
- ----------
(1) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(2) 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.
(3) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(4) Annualized.
30 1997 semi-annual report
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE
MINNESOTA INTERMEDIATE FUND - B CLASS MINNESOTA INTERMEDIATE FUND - C CLASS
------------------------------------- -------------------------------------------------
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED YEAR ENDED 8/15/95(1) ENDED YEAR ENDED YEAR ENDED 4/30/94(1)
6/30/97 12/31/96 TO 12/31/95 6/30/97 12/31/96 12/31/95 TO 12/31/94
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $10.99 $11.14 $10.95 $10.99 $11.13 $10.50 $10.74
Income from investment operations:
Net investment income ....................... 0.22 0.44 0.17 0.22 0.43 0.42 0.24
Net realized and unrealized gain (loss) from
investments ................................ -- (0.15) 0.19 -- (0.14) 0.63 (0.24)
------ ------ ------ ------ ------ ------ ------
Net increase in net assets from
investment operations ...................... 0.22 0.29 0.36 0.22 0.29 1.05 --
------ ------ ------ ------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income(2) ..... (0.22) (0.44) (0.17) (0.22) (0.43) (0.42) (0.24)
------ ------ ------ ------ ------ ------ ------
Total dividends and distributions ........... (0.22) (0.44) (0.17) (0.22) (0.43) (0.42) (0.24)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period ............... $10.99 $10.99 $11.14 $10.99 $10.99 $11.13 $10.50
====== ====== ====== ====== ====== ====== ======
Total Return(3)............................... 2.08% 2.74% 3.26% 2.08% 2.69% 10.18% (0.03%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ..... $ 742 $ 408 $ 27 $1,195 $1,137 $ 694 $ 341
Ratio of expenses to average net assets(4) .. 1.69%(5) 1.56% 1.30%(5) 1.70%(5) 1.64% 1.63% 1.71%(5)
Ratio of expenses to average net assets prior
to expense limitation ...................... 1.75%(5) 1.62% 1.55%(5) 1.75%(5) 1.64% 1.63% 1.71%(5)
Ratio of net investment income
to average net assets ...................... 4.17%(5) 3.99% 3.93%(5) 4.17%(5) 3.94% 3.82% 3.35%(5)
Ratio of net investment income to average
net assets prior to expense limitation ..... 4.11%(5) 3.93% 3.68%(5) 4.11%(5) 3.94% 3.82% 3.35%(5)
Portfolio turnover .......................... 8.39%(5) 28.18% 40.28% 8.39%(5) 28.18% 40.28% 42.05%
</TABLE>
- -------------------
(1) Commencement of operations.
(2) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(3) 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.
(4) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(5) Annualized.
1997 semi-annual report 31
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
MINNESOTA HIGH YIELD MINNESOTA HIGH YIELD MINNESOTA HIGH YIELD
MUNICIPAL BOND FUND - A CLASS MUNICIPAL BOND FUND - B CLASS MUNICIPAL BOND FUND - C CLASS
----------------------------- ------------------------------ -----------------------------
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED 6/4/96(1) ENDED 6/12/96(1) ENDED 6/7/96(1)
6/30/97 TO 12/31/96 6/30/97 TO 12/31/96 6/30/97 TO 12/31/96
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 10.18 $10.00 $10.19 $ 9.78 $ 10.18 $ 9.99
Income from investment operations:
Net investment income .................... 0.29 0.35 0.26 0.29 0.26 0.30
Net realized and unrealized gain from
investments ............................. 0.09 0.18 0.09 0.41 0.09 0.19
------- ------ ------ ------ ------- ------
Net increase in net assets from
investment operations ................... 0.38 0.53 0.35 0.70 0.35 0.49
------- ------ ------ ------ ------- ------
Less dividends and distributions:
Dividends from net investment income(2) .. (0.31) (0.35) (0.28) (0.29) (0.28) (0.30)
------- ------ ------ ------ ------- ------
Total dividends and distributions ........ (0.31) (0.35) (0.28) (0.29) (0.28) (0.30)
------- ------ ------ ------ ------- ------
Net asset value, end of period ............ $ 10.25 $10.18 $10.26 $10.19 $ 10.25 $10.18
======= ====== ====== ====== ======= ======
Total Return(3)............................ 3.98% 5.40% 3.57% 7.29% 3.57% 5.02%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .. $13,399 $6,068 $6,150 $2,738 $ 2,232 $ 900
Ratio of expenses to average net assets(4) 0.22%(5) 0.24%(5) 0.97%(5) 0.95%(5) 0.97%(5) 0.99%(5)
Ratio of expenses to average net assets
prior to expense limitation ............. 0.96%(5) 1.25%(5) 1.71%(5) 2.00%(5) 1.71%(5) 2.00%(5)
Ratio of net investment income
to average net assets ................... 5.72%(5) 5.78%(5) 4.98%(5) 5.14%(5) 4.98%(5) 4.90%(5)
Ratio of net investment income to average
net assets prior to expense limitation .. 4.98%(5) 4.77%(5) 4.24%(5) 4.09%(5) 4.24%(5) 3.89%(5)
Portfolio turnover ....................... 51.36%(5) 14.97% 51.36%(5) 14.97% 51.36%(5) 14.97%
</TABLE>
- ----------
(1) Commencement of operations.
(2) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(3) 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.
(4) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(5) Annualized.
32 1997 semi-annual report
<PAGE>
The Delaware-Voyageur Funds
Notes To Financial Statements
June 30, 1997 (Unaudited)
Delaware-Voyageur Tax-Free Minnesota Fund (formerly Voyageur Minnesota Tax
Free Fund)( "Tax-Free Minnesota Fund"), a series of the Voyageur Tax Free
Funds, Inc.; Delaware-Voyageur Minnesota Insured Fund (formerly Voyageur
Minnesota Insured Fund)("Minnesota Insured Fund"), a series of the Voyageur
Insured Funds, Inc.; Delaware-Voyageur Tax-Free Minnesota Intermediate Fund
(formerly Voyageur Minnesota Limited Term Tax Free Fund)("Tax-Free Minnesota
Intermediate Fund"), a series of the Voyageur Tax Free Funds, Inc.;
Delaware-Voyageur Minnesota High Yield Municipal Bond Fund (formerly Voyageur
Minnesota High Yield Municipal Bond Fund)("Minnesota High Yield Municipal
Bond Fund") a series of the Delaware-Voyageur Mutual Funds, Inc., (each
referred to as a "Fund" or collectively as the "Funds") are registered under
the Investment Company Act of 1940 (as amended) as open-end management
investment companies. The Tax-Free Minnesota Fund, Minnesota Insured Fund,
and Tax-Free Minnesota Intermediate Fund are registered as diversified funds.
The Minnesota High Yield Municipal Bond Fund is registered as a
non-diversified fund. The Tax-Free Minnesota 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. The Tax-Free Minnesota
Intermediate 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 Minnesota High
Yield Municipal Bond Fund seeks high current income free from both federal
and state income taxes by investing in medium and lower-grade municipal
bonds.The Funds each offer 3 classes of shares.
1. Fund Reorganization
On April 30, 1997, Lincoln National Corporation ("LNC") acquired Voyageur
Fund Manager Inc.'s ("Voyageur") parent, Dougherty Financial Group, Inc.
("DFG") pursuant to an agreement and plan of merger dated January 15, 1997,
in which LNC would acquire DFG including the mutual fund investment advisory
business of DFG conducted by Voyageur. Upon completion of the acquisition,
Delaware Management Company, Inc. ("DMC") became the investment adviser to
the Funds, Delaware Distributors, L.P. ("DDLP") became the distributor for
the Funds, Delaware Service Company, Inc. ("DSC") became the transfer,
dividend-disbursing, shareholder servicing agent and accounting service agent
for the Funds.
2. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of
such securities. Money market instruments having less than 60 days to
maturity are valued at amortized cost which approximates market value. Other
securities and assets for which market quotations are not readily available
are valued at fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
Federal Income Taxes - Each Fund intends to continue to qualify as a
regulated investment company and make the requisite distributions to
shareholders. Accordingly, no provision for federal income taxes has been
made in the financial statements. Income and capital gain distributions are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Funds on the basis of daily net assets of each class. Distribution
expenses relating to a specific class are charged directly to that class.
<PAGE>
Other - Expenses common to all Funds within the Delaware-Voyageur Funds are
allocated amongst the Funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the sale
of investment securities are those of the specific securities sold. Interest
income is recorded on the accrual basis. Original issue discounts are
accreted to interest income over the lives of the respective securities. The
Funds declare dividends from net investment income daily and pay them
monthly. Capital gains are distributed annually.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
3. Investment Management and Other Transactions with Affiliates
Commencing May 1, 1997, and in accordance with the terms of the Investment
Management Agreement, the Fund pays DMC the Investment Manager of each Fund,
an annual fee, which is calculated daily on the average daily net assets of
each Fund. The management fee rates are as follows:
Tax-Free Minnesota
Tax-Free Tax-Free Minnesota High Yield
Minnesota Minnesota Intermediate Municipal
Fund Insured Fund Fund Bond Fund
--------- ----------- ------------ ----------
Management fee as a
percentage of average
daily net assets
(per annum)................ 0.50% 0.50% 0.40% 0.65%
DMC has elected to waive their fees and reimburse each Fund to the extent
that annual operating expenses exclusive of 12b-1 distribution fees, taxes,
interest, brokerage commissions and extraordinary expenses, exceed 0.66%,
0.67%, 0.71%, 0.05% of average daily net assets for the Tax-Free Minnesota
Fund, Minnesota Insured Fund, Tax-Free Minnesota Intermediate Fund and
Minnesota High Yield Municipal Bond Fund, respectively, through December 31,
1997. Total expenses absorbed by DMC for the two month period ended June 30,
1997 are as follows:
Tax-Free Minnesota
Tax-Free Tax-Free Minnesota High Yield
Minnesota Minnesota Intermediate Municipal
Fund Insured Fund Fund Bond Fund
--------- ----------- ------------ ----------
Total expenses
absorbed by DMC ........... $57,650 $52,795 $4,372 $33,097
Prior to May 1, 1997, the Funds had an investment advisory and management
agreement with Voyageur. Voyageur received a fee for its investment advisory
and management services based on the average daily net assets of the Tax Free
Minnesota Fund and Minnesota Insured Fund at an annual rate of 0.50%, at an
annual rate of 0.40% for the Tax-Free Minnesota Intermediate Fund and at an
annual rate of 0.25% for the Minnesota High Yield Municipal Bond Fund. During
the period January 1, 1997, to April 30, 1997, Voyageur waived $93,816, $29,190,
$24,897, and $26,037 of the Tax-Free Minnesota Fund, Minnesota Insured Fund,
Tax-Free Minnesota Intermediate Fund, and Minnesota High Yield Municipal Bond,
respectively.
1997 semi-annual report 33
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Commencing May 1, 1997, the Funds have engaged DSC, an affiliate of DMC, to
serve as dividend disbursing, transfer agent and accounting services agent
for the Funds. For the two month period ended June 30, 1997, the amounts
expensed for each Fund were as follows:
Tax-Free Minnesota
Tax-Free Tax-Free Minnesota High Yield
Minnesota Minnesota Intermediate Municipal
Fund Insured Fund Fund Bond Fund
--------- ------------ ------------ ----------
Dividend disbursing,
transfer agent fees and
other expenses ........ $100,274 $91,917 $20,055 $4,679
Accounting fees ........ $27,241 $19,219 $3,969 $1,187
Prior to May 1, 1997, the Funds paid a fee to Voyageur for acting as the
Fund's dividend disbursing, administrative and accounting services agent.
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.
On June 30, 1997, the Funds had payables to affiliates as follows:
Tax-Free Minnesota
Tax-Free Tax-Free Minnesota High Yield
Minnesota Minnesota Intermediate Municipal
Fund Insured Fund Fund Bond Fund
--------- ------------ ------------ ----------
Investment Management
fee payable to DMC .... $177,672 $124,877 $20,520 $11,442
Dividend disbursing,
transfer agent fees,
accounting fees and
other expenses
payable to DSC ........ $35,140 $29,003 $6,028 $3,202
Other expenses payable
to DMC and affiliates . $21,776 $25,665 $3,643 $4,894
Commencing May 1, 1997, and pursuant to the Distribution Agreement, the Funds
pay DDLP, the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.25% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Class for each Series. For the period
May 1, 1997 to June 30, 1997, DDLP voluntarily waived $1,831, for the
Tax-Free Minnesota Fund Class B. For the two month period ended June 30,
1997, DDLP earned commissions on sales of the Fund A Class shares for each
Fund as follows:
Tax-Free Minnesota
Tax-Free Tax-Free Minnesota High Yield
Minnesota Minnesota Intermediate Municipal
Fund Insured Fund Fund Bond Fund
--------- ------------ ------------ ----------
$47,737 $22,873 $9,339 $13,575
<PAGE>
Prior to May 1, 1997 each class of shares had a Distribution Agreement with
Voyageur Fund Distributors, Inc. ("VFD"). Under the plan the Funds paid VFD a
fee at an annual rate of 0.25% of the average daily net assets of the Class A
Shares and 1.00% of the average daily net assets of the Class B and C Shares.
For the period January 1, 1997 to April 30, 1997, VFD voluntarily waived $6,265,
for the Tax-Free Minnesota Fund Class B.
Certain officers of DMC, DSC and DDLP are officers, directors and/or
employees of the Funds. These officers, directors and employees are paid no
compensation by the Funds.
4. Investments
During the period ended June 30, 1997, the Funds made purchases and sales of
investment securities other than U.S. government securities and
temporary cash investments for each Fund as follows:
Tax-Free Minnesota
Tax-Free Tax-Free Minnesota High Yield
Minnesota Minnesota Intermediate Municipal
Fund Insured Fund Fund Bond Fund
--------- ------------ ------------ ----------
Purchases............ 39,085,777 42,037,323 2,638,698 14,674,416
Sales................ 58,921,096 52,654,947 11,386,926 3,763,856
At June 30, 1997, the aggregate unrealized appreciation (depreciation) of
securities for federal income tax purposes for each Fund were as follows:
Tax-Free Minnesota
Tax-Free Tax-Free Minnesota High Yield
Minnesota Minnesota Intermediate Municipal
Fund Insured Fund Fund Bond Fund
--------- ------------ ------------ ----------
Aggregate unrealized
appreciation........... 21,773,417 14,405,094 2,086,337 335,174
Aggregate unrealized
depreciation........... 71,085 75,276 13,885 8,841
---------- ---------- --------- -------
Net unrealized
appreciation........... 21,702,332 14,329,818 2,072,452 326,333
For federal income tax purposes, as of December 31, 1996, Tax-Free Minnesota
Fund had a capital loss carryover of $2,504,886 that will expire in 2003,
Minnesota Insured Fund had a capital loss carryover of $7,559,777 that will
expire in 2001 through 2003, Tax-Free Minnesota Intermediate Fund had a
capital loss carryover of $789,263 that will expire in 2003, and Minnesota
High Yield Municipal Bond Fund had a capital loss carryover of $6,809 that
will expire in 2004.
5 Fund Merger
On November 9, 1996, Voyageur Minnesota Insured Fund acquired all of the net
assets of Great Hall Minnesota Insured Tax-Exempt Fund (Great Hall Fund)
pursuant to an Agreement and Plan of Reorganization approved by the Great
Hall shareholders on November 6, 1996. The acquisition was accompanied to by
a tax-free exchange of 2,317,110 Great Hall shares for 2,205,310 Class A
shares of Minnesota Insured Fund. The aggregate net assets of Minnesota
Insured Fund and Great Hall Fund before the acquisition were $295,563,851 and
$23,310,124 (including $396,706 of net unrealized appreciation of
investments, $627,187 of accumulated net realized loss on investments and
$23,540,605 of paid-in capital for Great Hall Fund), respectively, resulting
in combined net assets of $318,873,975 on November 9, 1996.
34 1997 semi-annual report
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. Capital Stock
<TABLE>
<CAPTION>
Tax-Free Minnesota Minnesota High Yield
Tax-Free Minnesota Fund Minnesota Insured Fund Intermediate Fund Municipal Bond Fund
----------------------- ----------------------- -------------------- -------------------------
Six Months Six Months Six Months Six Months Period From
Ended Year Ended Ended Year Ended Ended Year Ended Ended 6/4/96*
6/30/97 12/31/96 6/30/97 12/31/96 6/30/97 12/31/96 6/30/97 12/31/96
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ---------- ----------- --------- ----------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class................. 1,515,113 2 ,351,584 748,481 1,875,386 303,449 803,384 726,255 703,876
B Class................. 138,575 316,743 128,416 211,514 32,096 34,174 339,633 267,494
C Class................. 26,915 127,900 44,912 91,722 45,481 78,645 130,934 94,294
Shares issued in connection
with the acquisition of Great
Hall Minnesota Insured
Tax-Exempt Fund:
A Class................. N/A N/A N/A 2,205,310 N/A N/A N/A N/A
B Class................. N/A N/A N/A N/A N/A N/A N/A N/A
C Class................. N/A N/A N/A N/A N/A N/A N/A N/A
Shares issued upon reinvestment
of dividends from net investment
income:
A Class................. 650,420 1,180,162 549,700 969,663 107,421 202,700 18,552 4,348
B Class................. 10,713 12,994 12,535 18,904 1,023 536 6,691 1,293
C Class................. 4,888 7,795 6,011 11,243 2,478 2,520 3,387 775
--------- ---------- ---------- ---------- ---------- ---------- --------- ---------
2,346,624 3,997,178 1,490,055 5,383,742 491,948 1,121,959 1,225,452 1,072,080
--------- ---------- ---------- ---------- ---------- ---------- --------- ---------
Shares repurchased:
A Class................. (3,477,834) (5,048,128) (2,967,742) (4,947,642) (1,000,826) (1,498,234) (33,715) (112,030)
B Class................. (32,842) (40,979) (44,435) (20,425) (2,790) 0 (15,500) 0
C Class................. (78,631) (70,822) (46,257) (102,914) (42,673) (39,981) (5,028) (6,621)
--------- ---------- ---------- ---------- ---------- ---------- --------- ---------
(3,589,307) (5,159,929) (3,058,434) (5,070,981) (1,046,289) (1,538,215) (54,243) (118,651)
========== ========== ========== ========== ========== ========== ========= ========
Net increase (decrease) . (1,242,683) (1,162,751) (1,568,379) 312,761 (554,341) (416,256) 1,171,209 953,429
========== ========== ========== ========== ========== ========== ========= ========
</TABLE>
- -----------------------
* Commencement of operations.
7. Concentration of Credit Risk
The Funds concentrate their investments in securites mainly issued by
Minnesota municipalities. The value of these investments may be adversly
affected by new legislation within the state, regional or local economic
conditions, and differing levels of supply and demand for municipal bonds.
Many municipalities insure repayment for their obligations. Although bond
insurance reduces the risk of loss due to default by an issuer, such bonds
remain subject to the risk that market may fluctuate for other reasons and
there is no assurance that the insurance company will meet its obligations.
These securities have been identified in the Statement of Net Assets.
The Funds may invest up to 15% of its total assets in illiquid securities
which may include securities with contractual restrictions on resale,
securities exempt from registration under Rule 144A of the Securities Act of
1933, as amended, and other securities which may not be readily marketable.
The relative illiquidity of some of these securities may adversely affect the
Fund's ability to dispose of such securities in a timely manner and at a fair
price when it is necessary to liquidate such securities. These securities, if
any, have been denoted in the Statement of Net Assets.
1997 semi-annual report 35
<PAGE>
VOYAGEUR FUNDS
SHAREHOLDER MEETING RESULTS
- --------------------------------------------------------------------------------
A meeting of the funds' shareholders was held on April 11, 1997. The matters
submitted to a vote of shareholders were the election of new directors and
the approval of a new investment management agreement. Whenever there is a
change in control of an investment manager, the Investment Company Act of
1940 requires shareholders to vote on a new investment management agreement.
<TABLE>
<CAPTION>
TAX-FREE MINNESOTA FUND
NUMBER OF VOTES
------------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
------------------------------------------------------
<S> <C> <C> <C>
Walter P. Babich ............................................... 22,672,463 171,624 --
Anthony D. Knerr ............................................... 22,681,171 162,916 --
Ann R. Leven ................................................... 22,680,981 163,106 --
W. Thacher Longstreth .......................................... 22,673,648 170,439 --
Thomas F. Madison .............................................. 22,689,171 154,916 --
Jeffrey J. Nick ................................................ 22,679,675 164,412 --
Charles E. Peck ................................................ 22,673,648 170,439 --
Wayne A. Stork ................................................. 22,679,675 164,412 --
Approval of New Investment Management Agreement ................ 20,027,554 689,221 2,127,312
MINNESOTA INSURED FUND
NUMBER OF VOTES
------------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
------------------------------------------------------
Walter P. Babich ............................................... 17,771,187 82,907 --
Anthony D. Knerr ............................................... 17,771,758 82,336 --
Ann R. Leven ................................................... 17,697,558 156,536 --
W. Thacher Longstreth .......................................... 17,771,187 82,907 --
Thomas F. Madison .............................................. 17,771,758 82,336 --
Jeffrey J. Nick ................................................ 17,771,758 82,336 --
Charles E. Peck ................................................ 17,770,699 83,395 --
Wayne A. Stork ................................................. 17,770,755 83,339 --
Approval of New Investment Management Agreement ................ 16,109,124 474,759 1,270,211
TAX-FREE MINNESOTA INTERMEDIATE FUND
NUMBER OF VOTES
------------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
------------------------------------------------------
Walter P. Babich ............................................... 3,913,918 76,910 --
Anthony D. Knerr ............................................... 3,915,440 75,388 --
Ann R. Leven ................................................... 3,915,440 75,388 --
W. Thacher Longstreth .......................................... 3,911,087 79,741 --
Thomas F. Madison .............................................. 3,913,918 76,910 --
Jeffrey J. Nick ................................................ 3,915,440 75,388 --
Charles E. Peck ................................................ 3,911,087 79,741 --
Wayne A. Stork ................................................. 3,915,440 75,388 --
Approval of New Investment Management Agreement ................ 3,127,619 206,340 656,869
MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
NUMBER OF VOTES
------------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
------------------------------------------------------
Walter P. Babich ................................................ 834,293 5,022 --
Anthony D. Knerr ................................................ 834,293 5,022 --
Ann R. Leven .................................................... 834,293 5,022 --
W. Thacher Longstreth ........................................... 834,293 5,022 --
Thomas F. Madison ............................................... 834,293 5,022 --
Jeffrey J. Nick ................................................. 834,293 5,022 --
Charles E. Peck ................................................. 834,293 5,022 --
Wayne A. Stork .................................................. 834,293 5,022 --
Approval of New Investment Management Agreement ................. 766,011 13,087 60,217
</TABLE>
36 1997 semi-annual report
<PAGE>
DELAWARE GROUP OF FUNDS
For Growth of Capital
Aggressive Growth Fund
Trend Fund
DelCap Fund
Small Cap Value Fund
U.S. Growth Fund
Growth Stock Fund
Tax Efficient Equity Fund
For Total Return
Quantum Fund
Blue Chip Fund
Devon Fund
Decatur Total Return Fund
Decatur Income Fund
Delaware Fund
For International Diversification
Emerging Markets Fund
New Pacific Fund
World Growth Fund
International Equity Fund
Global Assets Fund
Global Bond Fund
For Current Income
Delchester Fund
Strategic Income Fund
U.S. Government Fund
Delaware-Voyageur
U.S. Government Securities Fund
Limited-Term Government Fund
For Tax-Exempt Current Income
National High Yield Municipal Bond Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
State Tax-Exempt Funds*
Money Market Funds
Delaware Cash Reserve
U.S. Government Money Fund
Tax-Free Money Fund
* Available for the following states: AZ, CA, CO, FL, ID, IA, KS, MN, MO,
ND, NJ, NM, NY, OH, OR, PA, UT, WA, WI. Insured and intermediate bond funds
are available in selected states.
funds
Complete information on any Delaware Group fund can be found in each Fund's
current prospectus. Prospectuses for all Delaware Group funds are available
from your financial adviser. Please read the prospectus carefully before you
invest or send money.
<PAGE>
THIS SEMI-ANNUAL REPORT IS FOR THE INFORMATION OF SHAREHOLDERS OF THE
DELAWARE-VOYAGEUR MINNESOTA MUNICIPAL BOND FUNDS, BUT IT MAY BE USED WITH
PROSPECTIVE INVESTORS WHEN PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS
FOR THE APPROPRIATE FUND. EACH PROSPECTUS SETS FORTH DETAILS ABOUT CHARGES,
EXPENSES, INVESTMENT OBJECTIVES AND OPERATING POLICIES OF EACH FUND. YOU
SHOULD READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST. SUMMARY INVESTMENT
RESULTS ARE DOCUMENTED IN THE FUNDS' CURRENT STATEMENT OF ADDITIONAL
INFORMATION. THE FIGURES IN THIS REPORT REPRESENT PAST RESULTS WHICH ARE NOT
A GUARANTEE OF FUTURE RESULTS. THE RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUNDS WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
INVESTMENT MANAGER
Delaware Management Company, Inc.
Philadelphia
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING AND
TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia
1818 Market Street
Philadelphia, PA 19103-3682
FOR SHAREHOLDERS
1.800.523.1918
FOR SECURITIES DEALERS
1.800.362.7500
FOR FINANCIAL INSTITUTIONS
REPRESENTATIVES ONLY
1.800.659.2265
Be sure to consult your financial adviser when making investments. Mutual
funds can be a valuable part of your financial plan; however, shares of the
Funds are not FDIC or NCUSIF insured, are not guaranteed by any bank or any
credit union, and involve investment risk, including the possible loss of the
principal amount invested. Shares of the Funds are not bank or credit union
deposits.
Copy Rights Delaware Distributors, L.P.
Printed in the USA on
recycled paper
(132)
SA-VOYMN[--] PP8/97
