VOYAGEUR
YOUR TAX SENSITIVE INVESTMENT MANAGER
MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
MINNESOTA TAX FREE FUND
MINNESOTA INSURED FUND
MINNESOTA LIMITED TERM TAX FREE FUND
ANNUAL REPORT
DATED DECEMBER 31, 1996
Voyageur offers a family of mutual funds, each with an individual objective
stated in its prospectus. Investment objectives of the funds range from high
current income to long-term capital appreciation. Exchange privileges allow you
to change your investment between Voyageur Funds as your objectives or market
conditions change.
VOYAGEUR HIGH YIELD FUNDS seek high current income free from both Federal income
taxes and state income taxes (where applicable). The Funds invest in medium and
lower grade municipal bonds.
Voyageur MINNESOTA High Yield Municipal Bond Fund
Voyageur NATIONAL High Yield Municipal Bond Fund
VOYAGEUR TAX FREE FUNDS seek high current income free from both Federal income
taxes and state income taxes (where applicable). The Funds invest in investment
grade municipal bonds.
<TABLE>
<S> <C>
Voyageur ARIZONA Tax Free Fund Voyageur MINNESOTA Tax Free Fund
Voyageur CALIFORNIA Tax Free Fund Voyageur NATIONAL Tax Free Fund
Voyageur COLORADO Tax Free Fund Voyageur NEW MEXICO Tax Free Fund
Voyageur FLORIDA Tax Free Fund Voyageur NEW YORK Tax Free Fund
Voyageur IDAHO Tax Free Fund Voyageur NORTH DAKOTA Tax Free Fund
Voyageur IOWA Tax Free Fund Voyageur UTAH Tax Free Fund
Voyageur KANSAS Tax Free Fund Voyageur WISCONSIN Tax Free Fund
</TABLE>
VOYAGEUR INSURED TAX FREE FUNDS seek high current income free from both Federal
income taxes and state income taxes (where applicable) with the added safety of
an insured portfolio. The Funds invest in insured municipal bonds.
<TABLE>
<S> <C> <C>
Voyageur ARIZONA Insured Tax Free Fund Voyageur MISSOURI Insured Tax Free Fund
Voyageur CALIFORNIA Insured Tax Free Fund Voyageur NATIONAL Insured Tax Free Fund
Voyageur FLORIDA Insured Tax Free Fund Voyageur OREGON Insured Tax Free Fund
Voyageur MINNESOTA Insured Fund Voyageur WASHINGTON Insured Tax Free Fund
</TABLE>
VOYAGEUR LIMITED TERM FUNDS seek to preserve original investment principal while
providing income free from both Federal income taxes and state income taxes
(where applicable). The Funds invest in intermediate term investment grade
municipal bonds.
<TABLE>
<S> <C> <C>
Voyageur FLORIDA Limited Term Tax Free Fund Voyageur NATIONAL Limited Term Tax Free Fund
Voyageur MINNESOTA Limited Term Tax Free Fund
</TABLE>
VOYAGEUR EQUITY FUNDS seek long term capital appreciation by investing in common
stocks.
<TABLE>
<S> <C> <C>
Voyageur AGGRESSIVE GROWTH Fund Voyageur GROWTH Stock Fund
Voyageur GROWTH AND INCOME Fund Voyageur INTERNATIONAL Equity Fund
</TABLE>
VOYAGEUR INCOME FUNDS seek high current income from investments issued,
guaranteed or otherwise backed by the full faith and credit of the U.S.
Government.
Voyageur U.S. GOVERNMENT SECURITIES Fund
VOYAGEUR CASH TRUST SERIES MONEY MARKET FUNDS seek high current income,
principal protection and liquidity by investing in money market instruments.
<TABLE>
<S> <C> <C>
Voyageur CALIFORNIA MUNICIPAL CASH Series Voyageur MUNICIPAL CASH Series
Voyageur FLORIDA MUNICIPAL CASH Series Voyageur OHIO MUNICIPAL CASH Series
Voyageur GOVERNMENT CASH Series Voyageur PRIME CASH Series
Voyageur MINNESOTA MUNICIPAL CASH Series Voyageur TREASURY CASH Series
</TABLE>
For more complete information regarding the investment objectives, fees and
expenses of the Funds, please obtain a prospectus from your Investment
Representative or from Voyageur, 90 South Seventh Street, Suite 4400,
Minneapolis, MN 55402-4115; (612) 376-7044 (local); 800-525-6584 (MKTG).
LETTER FROM THE PRESIDENT
[PHOTO]
JOHN G. TAFT
PRESIDENT
Dear Shareholder:
The year 1996 was marked with mixed economic events. During the first half of
the year, interest rates rose steadily, propelled by market fears that faster
Gross Domestic Product (GDP) growth would ignite inflation. Once these fears
abated in June, interest rates began a descent that lasted throughout most of
the remainder of the year.
In comparison to their peer group of funds, the overall performance of the
Voyageur Tax Free Funds was excellent in 1996. The main reason for this strong
performance was Voyageur portfolio managers' subtle shift toward adding income
to the portfolios. This additional income allowed us to better position the
Funds during the first half of the year when interest rates were rising and
municipal bond prices were falling. Within all of our Tax Free Funds, we
continued to extend call protection, where possible, in order to better provide
for income for longer periods of time.
In January 1997, Lincoln National Corporation (NYSE: LNC) announced that it
planned to acquire the parent company of Voyageur Fund Managers, Inc. -- the
investment adviser for the Voyageur Tax Free Funds. LNC, with headquarters in
Fort Wayne, Indiana, is a diversified organization with operations in many
aspects of the financial services industry, including insurance and investment
management. Delaware Management Company, Inc. (DMC), an indirect wholly owned
subsidiary of LNC, and its affiliate, Delaware International Advisers Ltd.,
serve as the investment advisers to the investment companies in the Delaware
Group of Funds (the Delaware Group), which currently includes 16 open-end funds
and two closed-end funds (comprising 48 separate investment portfolios). DMC
through its Delaware Investment Advisers division, Delaware International
Advisers Ltd. and certain other subsidiaries of Delaware Management Holdings,
Inc. (DMH) also provides investment advice with respect to separately managed
accounts of institutional and other clients. DMH, through its subsidiaries, is
responsible for the management of approximately $32 billion. Voyageur Fund
shareholders should benefit from this acquisition by being able to select from a
wider variety of mutual funds in the expanded Delaware-Voyageur fund family.
Delaware Management, like Voyageur, has a conservative, long-term investment
philosophy. The continuity in the Voyageur Tax Free Funds' management styles
should also be further maintained since Andrew M. McCullagh and Elizabeth
Howell, two of the senior municipal bond portfolio managers for the Voyageur Tax
Free Funds, will continue to play a key role in the management of the Voyageur
Tax Free Funds after the transition.
We appreciate your patronage and confidence in Voyageur Fund Managers. If at any
time you have questions about your Voyageur fund investment, I urge you to
contact your personal financial adviser or Voyageur Client Service
representatives are available from 7 a.m. to 6 p.m. (Central Standard Time) to
answer any questions you may have concerning this transaction or your Voyageur
fund investment.
Sincerely,
/s/ John G. Taft
John G. Taft
President
Voyageur Minnesota High Yield Municipal Bond Fund
Voyageur Minnesota Tax Free Fund
Voyageur Minnesota Insured Fund
Voyageur Minnesota Limited Term Tax Free Fund
VOYAGEUR MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
[PHOTO]
ELIZABETH H. HOWELL IS THE
SENIOR MUNICIPAL BOND MANAGER
FOR THE VOYAGEUR MINNESOTA HIGH
YIELD MUNICIPAL BOND FUND. MS.
HOWELL HAS MORE THAN 10 YEARS OF
INVESTMENT INDUSTRY EXPERIENCE.
In the first half of the year, bond prices fell as yields rose. Economic data
during this period showed surprising strength in the domestic economy and raised
the specter of inflation. During the summer, bond yields stabilized as investors
became increasingly confident that Federal Reserve Chairman Alan Greenspan would
monitor and tweak short-term interest rates in order to achieve a moderate
economic growth and low inflation. The flat tax debate which stimulated a great
deal of discussion and speculation in political and economic circles in 1995 and
early 1996, lost momentum and largely faded away after the election. The
tax-exempt bond market finished the year with modest, positive total returns.
Municipal securities outperformed taxable bonds throughout 1996. The high yield
sector and short duration funds produced the best performance within the fixed
income markets.
For the period ended December 31, 1996, the total return at net asset value
(NAV) for the class A shares of the Voyageur Minnesota High Yield Municipal Bond
Fund was 5.40%* (inception June 4, 1996 through December 31, 1996).
Since inception in June 1996, this Fund has produced competitive total returns.
In a year when the general level of interest rates fluctuated up and down, this
Fund was able to produce an above market rate of income and thereby post
better-than-average total returns. In the time since its inception, we have been
able to identify and purchase several high-yield issues in the Minnesota
marketplace. We have chosen to purchase higher-yielding, lower-rated securities
that we believe offer good long-term investment prospects. The securities we
have bought are ones that we believe -- based on our credit research and
continuous monitoring of credit risk -- are economically viable.
The projects in which we have made an investment are well diversified across
municipal industries as well as geographically within the state of Minnesota.
The Fund's holdings are diversified in a variety of municipal sectors within the
state of Minnesota with the strongest emphasis on the health care and housing
sectors.
OUTLOOK
Overall, the U.S. economy is still showing signs of moderate growth and moderate
inflation. Our outlook for the municipal market continues to be favorable, and
we expect interest rates to decline over the long term.
The Minnesota economy continues to be strong. The economy is well diversified in
comparison to other states and has historically been less cyclical than that of
the coasts. As a result, the overall credit quality of Minnesota bonds is very
good.
*PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS.
HIGH YIELDING INVESTING INVOLVES
UNIQUE RISKS. REFER TO THE
"RISKS AND SPECIAL INVESTMENT
CONSIDERATIONS" SECTION OF THE
FUND'S PROSPECTUS FOR A MORE
COMPLETE DESCRIPTION OF CREDIT
RISK.
VOYAGEUR MINNESOTA TAX FREE FUNDS
[PHOTO]
ELIZABETH H. HOWELL IS THE
SENIOR MUNICIPAL BOND MANAGER
FOR THE VOYAGEUR MINNESOTA TAX
FREE FUND,THE VOYAGEUR MINNESOTA
INSURED FUND, AND THE VOYAGEUR
MINNESOTA LIMITED TERM TAX FREE
FUND. MS. HOWELL HAS MORE THAN
10 YEARS OF INVESTMENT INDUSTRY
EXPERIENCE.
*PAST PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS.
INSURANCE PERTAINS ONLY TO THE
TIMELY PAYMENT OF PRINCIPAL AND
INTEREST BY THE SECURITIES IN THE
VOYAGEUR MINNESOTA INSURED FUND'S
PORTFOLIO. THE VALUE OF THE
INSURED SECURITIES AND THE FUND
ITSELF WILL FLUCTUATE DUE TO
CHANGING MARKET CONDITIONS. NO
REPRESENTATION IS MADE AS TO ANY
INSURER'S ABILITY TO MEET ITS
COMMITMENT.
In the first half of the year, bond prices fell as yields rose. Economic data
during this period showed surprising strength in the domestic economy and raised
the specter of inflation. During the summer, bond yields stabilized as investors
became increasingly confident that Federal Reserve Chairman Alan Greenspan would
monitor and tweak short-term interest rates in order to achieve a moderate
economic growth and low inflation. The flat tax debate which stimulated a great
deal of discussion and speculation in political and economic circles in 1995 and
early 1996, lost momentum and largely faded away after the election. The
tax-exempt bond market finished the year with modest, positive total returns.
Municipal securities outperformed taxable bonds throughout 1996. The high yield
sector and short duration funds produced the best performance within the fixed
income markets.
VOYAGEUR MINNESOTA TAX FREE FUNDS
For the year ended December 31, 1996, the total returns at net asset value (NAV)
for the class A shares of the Voyageur Minnesota Tax Free Funds were as follows:
Voyageur Minnesota Insured Fund 3.75%*; Voyageur Minnesota Tax Free Fund 3.33%*;
and Voyageur Minnesota Limited Term Tax Free Fund 3.46%.*
VOYAGEUR MINNESOTA INSURED FUND
A key objective in 1996 for the Voyageur Minnesota Insured Fund was to add
incremental yield to the portfolios. To achieve this objective, we allocated a
greater percentage of the Fund's assets to housing bonds. Housing bonds are
generally believed to produce a greater amount of coupon income to the
portfolio. The state of Minnesota has an active market for housing bonds; we
were able to purchase both new issue insured housing bonds as well as insured
housing bonds in the secondary market for the Voyageur Minnesota Insured Fund.
The portfolio remains well diversified by sector and individual issues, and the
average credit quality is Aaa/AAA.
VOYAGEUR MINNESOTA TAX FREE FUND
Adding incremental yield to the portfolio was an important objective for the
Voyageur Minnesota Tax Free Fund. We achieved this objective by purchasing more
housing bonds which are known to produce a greater amount of coupon income; we
also purchased a select number of higher yielding municipal revenue bonds for
the portfolio. By increasing these two sector allocations, we were able to add
more income and reduce a corresponding amount of price volatility. In addition
to this important strategy, the portfolio remains well diversified by sector and
individual issues.-inue to maintain an average credit quality of A+ to AA.
VOYAGEUR MINNESOTA LIMITED TERM TAX FREE FUND
The Voyageur Minnesota Limited Term Tax Free Fund performed very well in 1996.
Given the volatility in the bond market, short and intermediate -- including the
Voyageur Minnesota Limited Term Tax Free Fund -- municipal bond funds performed
as well as longer-term bond funds, but did so with considerably less price
volatility.
Throughout the year, we maintained high average credit quality of Aa/AA, held
non-callable bonds, and held high coupon bonds. All of these factors contributed
to our strong total return and helped the portfolio minimize price volatility.
The Fund has a high -- more than 50% -- allocation in pre-refunded bonds. These
pre-refunded bonds, which are backed by U.S. Treasury bonds, are noted for their
extremely high credit quality and defensive performance characteristics.
OUTLOOK
Overall, the U.S. economy is still showing signs of moderate growth and moderate
inflation. Our outlook for the municipal market continues to be favorable, and
we expect interest rates to decline over the long term.
The Minnesota economy continues to be strong. The economy is well diversified in
comparison to other states and has historically been less cyclical than that of
the coasts. As a result, the credit quality of our Minnesota bonds remains
excellent, and these Funds' holdings are diversified in a wide variety of
municipal sectors within the state of Minnesota.
VOYAGEUR MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
Portfolio Abstract
For the Period Ended December 31, 1996
CLASS A SHARES
[GRAPH]
<TABLE>
<CAPTION>
MN High Yield Municipal Bond MN High Yield Municipal Bond Lehman Bros. 20
Without Sales Charge With Sales Charge Year Municipal Bond Index
<S> <C> <C> <C>
June-96 10000 9625 10000
10094 9715 10000
10137 9757 10186
10109 9730 10184
10254 9870 10326
10400 10010 10443
10516 10122 10634
Dec-96 10539 10144 10589
</TABLE>
Voyageur Minnesota High Yield Fund Without Sales Charge - Ending Value $10,540
Voyageur Minnesota High Yield Fund With Sales Charge - Ending Value $10,145
Lehman Bros. Municipal Bond Index - Ending Value $10,590
The Lehman Bros. Municipal Bond Index is a broad, unmanaged index of securities
of United States Municipalities. The index assumes that no operating expenses,
transaction fees or sales loads are incurred by a hypothetical investor who
directly owns the securities maintained in the index. In order to outperform an
index over any specific time frame, a fund must return to investors an amount
greater than that provided by the index plus total operating expenses. For this
reason, few fixed income funds are able to outperform broad market indices over
the long term. The chart above is comprised of data that represents the
cumulative total return of a hypothetical investment in Class A Shares of
$10,000 made on the date the Fund commenced operations through December 31,
1996.
The performance of separate classes will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes.
Performance quoted represents past performance and is not indicative of
future results.
* Average annual total returns include the maximum 3.75% sales charge.
** Commencement of operations.
*** Assumes redemption on December 31, 1996
Voyageur Minnesota High Yield Municipal Bond Fund
Total Returns
(Class A Shares)
Since
6/4/96**
Without Sales Charge 5.40%
With Sales Charge* 1.45%
Lehman Bros. 5.90%
Municipal
Bond Index
Voyageur Minnesota High Yield Municipal Bond Fund
Total Returns
(Class B Shares)
Since
6/12/96**
Without Contingent 7.29%
Deferred Sales Charge
With Contingent 2.29%
Deferred Sales Charge***
Voyageur Minnesota High Yield Municipal Bond Fund
Total Returns
(Class C Shares)
Since
6/7/96**
5.02%
Quality Breakdown
[PIE GRAPH]
Ba/BB 3%
B/B 7%
Aa/AA 7%
Aaa/AAA 9%
A/A 16%
Baa/BBB 17%
NR/NR 41%
Sector Breakdown
(shown as % of total net assets)
Health Care 43.9%
Housing 38.3%
Utilities 10.4%
Lease/C.O.P. 6.0%
General Obligation 4.2%
Other Revenue 3.8%
Industrial 2.9%
Education 2.1%
Statistics
Average Maturity 12.5 Years
Average Coupon 6.57%
Portfolio Duration 7.8 Years
Average Quality B/B
VOYAGEUR MINNESOTA TAX FREE FUND
Portfolio Abstract
For the Period Ended December 31, 1996
Class A Shares
[GRAPH]
<TABLE>
<CAPTION>
MN Tax Free MN Tax Free Lehman Bros. 20
Without Sales Charge With Sales Charge Year Municipal Bond Index
<S> <C> <C> <C>
10000 9625 10000
Feb-84 10029 9653 9989
10096 9717 9969
9949 9576 10008
9881 9511 9320
10285 9899 9505
10484 10091 10031
10594 10197 10258
10828 10421 10214
10679 10278 10320
Dec-84 11063 10648 10463
11369 10943 10676
11448 11019 11289
11420 10992 11000
11868 11423 11098
12157 11701 11513
12326 11864 11970
12184 11727 12120
12408 11942 12096
12349 11885 12030
12621 12148 11934
12941 12456 12333
Dec-85 13239 12743 12782
13620 13109 13008
13859 13339 13831
14095 13567 14458
14158 13627 14407
14082 13554 14386
14093 13565 14100
14232 13699 14198
14523 13978 14320
14644 14095 15095
14903 14344 15056
15060 14495 15282
Dec-86 15244 14672 15627
15452 14873 15582
15584 15000 16135
15604 15019 16151
15065 14500 15993
14945 14385 15059
15219 14648 14944
15356 14780 15369
15427 14849 15513
15085 14519 15581
14843 14287 15052
15259 14687 15065
Dec-87 15409 14832 15455
15850 15256 15686
16008 15408 16373
15959 15360 16591
16031 15430 16292
16067 15464 16432
16358 15745 16429
16398 15783 16747
16496 15877 16890
16742 16114 16913
16964 16328 17309
16958 16322 17697
Dec-88 16998 16360 17554
17291 16642 17787
17203 16558 18244
17206 16561 18024
17419 16766 17982
17702 17038 18477
17992 17317 18916
18135 17455 19160
18131 17451 19427
18065 17388 19221
18261 17576 19079
18395 17705 19374
Dec-89 18545 17850 19729
18554 17858 19871
18649 17950 19708
18743 18040 19903
18664 17964 19945
18851 18144 19753
19023 18310 20259
19210 18490 20421
19082 18366 20762
19159 18441 20341
19319 18595 20316
19627 18891 20690
Dec-90 19849 19104 21183
19959 19210 21286
20155 19399 21544
20250 19490 21721
20361 19598 21738
20530 19760 22053
20646 19872 22283
20831 20050 22218
21070 20280 22542
21310 20511 22844
21480 20674 23155
21614 20803 23382
Dec-91 22039 21212 23419
22065 21237 23918
22182 21351 23968
22207 21375 23978
22324 21487 24036
22459 21616 24262
22780 21926 24579
23441 22562 25032
23291 22418 25928
23445 22566 25604
23199 22329 25732
23585 22701 25366
Dec-92 23795 22902 26011
24147 23241 26351
24814 23884 26633
24835 23904 27763
24973 24037 27521
25212 24267 27868
25532 24575 28099
25492 24536 28616
26015 25039 28651
26419 25428 29335
26498 25505 29705
26353 25364 29758
Dec-93 26815 25809 29431
26997 25985 30140
26425 25434 30520
25532 24575 29614
25418 24465 28053
25684 24721 28283
25545 24587 28617
25879 24908 28331
25933 24960 28979
25576 24617 29061
25107 24166 28479
24549 23628 27727
Dec-94 25009 24071 27079
25769 24803 27929
26644 25645 29021
26829 25823 30074
26857 25850 30417
27719 26679 30411
27408 26380 31558
27506 26474 31072
27741 26701 31233
28046 26994 31661
28444 27377 31911
29028 27940 32591
Dec-95 29383 28281 33311
29553 28445 33778
29369 28267 33950
28738 27660 33563
28646 27572 33026
28674 27599 32864
28896 27812 32933
29166 28072 33398
29244 28147 33725
29637 28525 33671
29959 28835 34351
30476 29333 34763
Dec-96 30361 29223 35490
</TABLE>
Voyageur Minnesota Tax Free Fund Without Sales Charge - Ending Value $30,362
Voyageur Minnesota Tax Free Fund With Sales Charge - Ending Value $29,223
Lehman Bros. 20 Year Municipal Bond Index - Ending Value $35,281
The Lehman Bros. 20 Year Municipal Bond Index is a broad, unmanaged index of
securities of United States Municipalities. The index assumes that no operating
expenses, transaction fees or sales loads are incurred by a hypothetical
investor who directly owns the securities maintained in the index. In order to
outperform an index over any specific time frame, a fund must return to
investors an amount greater than that provided by the index plus total operating
expenses. For this reason, few fixed income funds are able to outperform broad
market indices over the long term. The chart above is comprised of data that
represents the cumulative total return of a hypothetical investment in Class A
Shares of $10,000 made on the date the Fund commenced operations through
December 31, 1996.
The performance of separate classes will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes.
Performance quoted represents past performance and is not indicative of
future results.
* Average annual total returns include the maximum 3.75% sales charge.
** Commencement of operations.
*** Assumes redemption on December 31, 1996
Voyageur Minnesota Tax Free Fund
Average Annual Total Returns
(Class A Shares)
1 5 10 Since
Year Years Years 2/27/84**
Without Sales Charge 3.33% 6.61% 7.12% 9.03%
With Sales Charge* (0.54%) 5.80% 6.72% 8.70%
Lehman Bros. 20 4.45% 8.08% 8.52% 10.32%
Year Municipal
Bond Index
Voyageur Minnesota Tax Free Fund
Average Annual Total Returns
(Class B Shares)
Since
1 Year 3/11/95**
Without Contingent 2.83% 7.00%
Deferred Sales Charge
With Contingent (2.17%) 4.90%
Deferred Sales Charge***
Voyageur Minnesota Tax Free Fund
Average Annual Total Returns
(Class C Shares)
Since
1 Year 5/4/94**
2.64% 6.04%
Quality Breakdown
[PIE CHART]
Baa/BBB 9%
NR/NR 10%
Aa/AA 12%
A/A 15%
Aaa/AAA 54%
Sector Breakdown
(shown as % of total net assets)
Health Care 22.8%
General Obligation 20.4%
Utilities 17.7%
Housing 15.5%
Pre-Refunded/Escrow 9.2%
Industrial 8.8%
Education 2.9%
Other Revenue 1.7%
Lease/C.O.P. 0.4%
Statistics
Average Maturity 13.3 Years
Average Coupon 6.05%
Portfolio Duration 8.3 Years
Average Quality A/A
VOYAGEUR MINNESOTA INSURED FUND
Portfolio Abstract
For the Period Ended December 31, 1996
Class A Shares
[GRAPH]
<TABLE>
<CAPTION>
MN Insured MN Insured Lehman Bros. Long
Without Sales Charge With Sales Charge Insured Municipal Bond Index
<S> <C> <C> <C>
10000 9625 10000
May-87 9912 9540 9924
10131 9751 10205
10209 9826 10301
10244 9859 10347
10029 9653 9995
9793 9426 10004
10072 9695 10263
Dec-87 10148 9767 10416
10454 10062 10872
10558 10162 11017
10515 10120 10818
10560 10164 10911
10589 10192 10909
10763 10360 11121
10795 10390 11215
10861 10453 11231
11055 10640 11494
11196 10776 11751
11202 10782 11656
Dec-88 11233 10812 11811
11405 10977 12115
11380 10953 11968
11363 10937 11941
11540 11107 12269
11734 11294 12561
11899 11452 12723
11984 11535 12900
12013 11563 12763
11968 11519 12669
12085 11632 12865
12163 11707 13101
Dec-89 12240 11781 13195
12294 11833 13087
12355 11892 13216
12413 11947 13244
12358 11895 13117
12488 12019 13453
12582 12110 13560
12708 12232 13787
12626 12153 13507
12607 12134 13491
12703 12227 13739
12942 12457 14066
Dec-90 13057 12567 14135
13103 12612 14306
13232 12736 14423
13279 12781 14435
13354 12853 14644
13471 12965 14796
13532 13024 14753
13691 13177 14969
13850 13331 15169
14052 13525 15376
14184 13653 15526
14245 13711 15551
Dec-91 14570 14024 15883
14574 14027 15916
14621 14073 15922
14640 14091 15960
14746 14193 16111
14852 14295 16322
15092 14526 16622
15587 15002 17217
15438 14859 17002
15545 14962 17087
15394 14817 16844
15668 15081 17272
Dec-92 15818 15225 17498
16096 15492 17686
16576 15954 18435
16513 15894 18275
16621 15998 18505
16809 16179 18659
17061 16421 19002
17028 16390 19025
17393 16741 19480
17664 17002 19725
17759 17093 19761
17660 16998 19543
Dec-93 18000 17325 20014
18128 17448 20266
17747 17082 19665
17100 16458 18628
17012 16374 18781
17139 16496 19003
17032 16393 18813
17329 16679 19243
17256 16609 19297
17012 16374 18911
16630 16007 18412
16213 15605 17981
Dec-94 16582 15960 18546
17161 16518 19271
17795 17128 19971
17925 17252 20198
17966 17293 20194
18466 17774 20955
18315 17628 20633
18393 17703 20740
18419 17728 21024
18713 18011 21190
18954 18243 21642
19284 18561 22120
Dec-95 19488 18757 22430
19639 18903 22544
19533 18800 22287
19170 18451 21930
19118 18401 21843
19141 18423 21869
19278 18555 22177
19452 18722 22395
19514 18782 22359
19708 18969 22810
19960 19211 23084
20269 19509 23567
Dec-96 20219 19461 23428
</TABLE>
Voyageur Minnesota Insured Tax Free Fund Without Sales Charge - Ending Value
$20,219
Voyageur Minnesota Insured Tax Free Fund With Sales Charge - Ending Value
$19,461
Lehman Bros. 20 Year Municipal Bond Index - Ending Value $23,428
The Lehman Bros. 20 Year Municipal Bond Index is a broad, unmanaged index of
securities of United States Municipalities. The index assumes that no operating
expenses, transaction fees or sales loads are incurred by a hypothetical
investor who directly owns the securities maintained in the index. In order to
outperform an index over any specific time frame, a fund must return to
investors an amount greater than that provided by the index plus total operating
expenses. For this reason, few fixed income funds are able to outperform broad
market indices over the long term. The chart above is comprised of data that
represents the cumulative total return of a hypothetical investment in Class A
Shares of $10,000 made on the date the Fund commenced operations through
December 31, 1996.
The performance of separate classes will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes.
Performance quoted represents past performance and is not indicative of
future results.
* Average annual total returns include the maximum 3.75% sales charge.
** Commencement of operations.
*** Assumes redemption on December 31, 1996
Voyageur Minnesota Insured Fund
Average Annual Total Returns
(Class A Shares)
1 5 Since
Year Years 5/1/87**
Without Sales Charge 3.75% 6.76% 7.54%
With Sales Charge* (0.14%) 5.95% 7.12%
Lehman Bros. 20 4.45% 8.08% 9.19%
Year Municipal
Bond Index
Voyageur Minnesota Insured Fund
Average Annual Total Returns
(Class B Shares)
Since
1 Year 3/7/95**
Without Contingent 3.03% 6.88%
Deferred Sales Charge
With Contingent (1.97%) 4.79%
Deferred Sales Charge***
Voyageur Minnesota Insured Fund
Average Annual Total Returns
(Class C Shares)
Since
1 Year 5/4/94**
2.98% 5.84%
Quality Breakdown
[PIE CHART]
Aa/AA 1%
Aaa/AAA 99%
Sector Breakdown
(shown as % of total net assets)
General Obligation 32.2%
Pre-Refunded/Escrow 24.2%
Health Care 18.2%
Utilities 11.9%
Housing 10.1%
Lease/C.O.P. 0.7%
Industrial 0.5%
Other 0.4%
Statistics
Average Maturity 11.5 Years
Average Coupon 6.34%
Portfolio Duration 7.4 Years
Average Quality Aaa/AAA
VOYAGEUR MINNESOTA LIMITED TERM TAX FREE FUND
Portfolio Abstract
For the Period Ended December 31, 1996
Class A Shares
[GRAPH]
<TABLE>
<CAPTION>
MN Limited Term Tax MN Limited Term Tax Lehman Bros. 3
Free Without Sales Charge Free With Sales Charge Year Municipal Bond Index
<S> <C> <C> <C>
Oct-95 10000 9725 10000
10004 9728 10020
10274 9991 10128
Dec-85 10324 10040 10015
10417 10130 10407
10511 10222 10523
10609 10317 10656
10664 10371 10717
10721 10426 10715
10755 10459 10814
10818 10521 10795
10947 10646 10907
11006 10703 10969
11091 10786 11120
11158 10851 11187
Dec-86 11209 10901 11176
11310 10999 11320
11365 11053 11380
11392 11078 11390
11214 10906 11209
11223 10914 11225
11305 10994 11446
11393 11080 11495
11464 11149 11491
11381 11068 11324
11360 11048 11473
11489 11173 11529
Dec-87 11543 11225 11621
11651 11331 11840
11721 11399 11918
11788 11464 11918
11845 11520 12006
11861 11534 11930
11934 11606 11992
11974 11645 12030
12002 11671 11970
12055 11723 12081
12151 11817 12152
12180 11845 12141
Dec-88 12201 11865 12157
12255 11918 12291
12258 11921 12221
12246 11909 12166
12324 11985 12327
12459 12116 12495
12571 12225 12637
12653 12305 12783
12718 12368 12769
12759 12408 12804
12846 12493 12906
12908 12553 13025
Dec-89 12985 12628 13099
13041 12682 13137
13100 12739 13215
13166 12804 13212
13160 12798 13219
13250 12886 13385
13343 12976 13489
13447 13077 13604
13481 13110 13610
13540 13168 13655
13619 13245 13791
13737 13359 13949
Dec-90 13841 13460 14023
13902 13520 14204
14031 13645 14321
14093 13706 14335
14171 13781 14469
14263 13871 14545
14328 13934 14560
14433 14037 14674
14568 14167 14813
14689 14285 14941
14767 14361 15037
14872 14463 15124
Dec-91 15119 14703 15415
15155 14738 15491
15240 14821 15489
15188 14770 15471
15264 14844 15585
15368 14945 15710
15501 15075 15884
15738 15305 16199
15801 15366 16113
15908 15470 16235
15914 15476 16214
16035 15594 16350
Dec-92 16120 15676 16453
16283 15836 16575
16538 16083 16834
16537 16083 16780
16657 16199 16872
16685 16226 16924
16789 16327 17024
16771 16310 17021
16982 16515 17176
17102 16632 17246
17131 16660 17281
17100 16629 17267
Dec-93 17391 16913 17452
17512 17030 17600
17226 16753 17420
16892 16428 17213
16965 16499 17339
17055 16586 17420
17050 16581 17413
17204 16731 17554
17263 16788 17619
17161 16689 17577
17061 16592 17547
16898 16433 17547
Dec-94 17058 16589 17586
17236 16762 17702
17544 17062 17874
17691 17205 18077
17792 17302 18137
18159 17659 18424
18213 17712 18468
18335 17831 18682
18475 17967 18820
18582 18071 18860
18690 18176 18931
18863 18345 19051
Dec-95 18936 18415 19138
19145 18618 19324
19095 18570 19310
18891 18372 19278
18859 18340 19297
18863 18344 19299
18939 18418 19420
19050 18526 19527
19109 18583 19560
19221 18692 19682
19386 18853 19821
19568 19030 20008
Dec-96 19590 19052 20018
</TABLE>
Voyageur Minnesota Limited Term Tax Free Fund Without Sales Charge - Ending
Value $19,591
Voyageur Minnesota Limited Term Tax Free Fund With Sales Charge - Ending Value
$19,052
Lehman Bros. 3 Year Municipal Government Obligation Index - Ending Value $20,018
The Lehman Bros. 3 Year Municipal Government Obligation Index is a broad,
unmanaged index of securities of United States Municipalities. The index assumes
that no operating expenses, transaction fees or sales loads are incurred by a
hypothetical investor who directly owns the securities maintained in the index.
In order to outperform an index over any specific time frame, a fund must return
to investors an amount greater than that provided by the index plus total
operating expenses. For this reason, few fixed income funds are able to
outperform broad market indices over the long term. The chart above is comprised
of data that represents the cumulative total return of a hypothetical investment
in Class A Shares of $10,000 made on the date the Fund commenced operations
through December 31, 1996.
The performance of separate classes will vary based on the differences in
sales loads and distribution fees paid by shareholders investing in the
different classes.
Performance quoted represents past performance and is not indicative of
future results.
* Average annual total returns include the maximum 2.75% sales charge.
** Commencement of operations.
*** Assumes redemption on December 31, 1996
Voyageur Minnesota Limited Term Tax Free Fund
Average Annual Total Returns
(Class A Shares)
1 5 10 Since
Year Years Years 10/27/85**
Without Sales Charge 3.46% 5.31% 5.74% 6.19%
With Sales Charge* 0.61% 4.72% 5.44% 5.93%
Lehman Bros. 3 4.60% 5.36% 6.00% 6.40%
Year Municipal
Goverment Obligation Index
Voyageur Minnesota Limited Term Tax Free Fund
Average Annual Total Returns
(Class B Shares)
Since
1 Year 8/15/95**
Without Contingent 2.74% 4.37%
Deferred Sales Charge
With Contingent (1.26%) 2.22%
Deferred Sales Charge***
Voyageur Minnesota Limited Term Tax Free Fund
Average Annual Total Returns
(Class C Shares)
Since
1 Year 5/4/94**
2.69% 4.73%
Quality Breakdown
[PIE CHART]
A/A 9%
Aa/AA 10%
NR/NR 10%
Baa/BBB 18%
Aaa/AAA 53%
Sector Breakdown
(shown as % of total net assets)
Pre-Refunded/Escrow 51.2%
Industrial 16.6%
Health Care 9.2%
Education 8.3%
Utilities 5.2%
Lease/C.O.P. 3.7%
General Obligation 3.7%
Other Revenue 2.2%
Housing 1.3%
Statistics
Average Maturity 5.7 Years
Average Coupon 6.49%
Portfolio Duration 4.6 Years
Average Quality A/A
(This page left blank intentionally.)
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Voyageur Mutual Funds, Inc.
Voyageur Tax Free Funds, Inc.
Voyageur Insured Funds, Inc.
Voyageur Intermediate Tax Free Funds, Inc.:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments in securities, of Voyageur Minnesota High
Yield Municipal Bond Fund (a Fund within Voyageur Mutual Funds, Inc.), Voyageur
Minnesota Tax Free Fund (a Fund within Voyageur Tax Free Funds, Inc.), Voyageur
Minnesota Insured Fund (a Fund within Voyageur Insured Funds, Inc.), and
Voyageur Minnesota Limited Term Tax Free Fund (a fund within Voyageur
Intermediate Tax Free Funds, Inc.) as of December 31, 1996, and the related
statements of operations for the year then ended (for the period from June 14,
1996, commencement of operations, to December 31, 1996 for Voyageur Minnesota
High Yield Municipal Bond Fund), the statements of changes in net assets for
each of the years in the two-year period ended December 31, 1996 (for the period
from June 4, 1996 to December 31, 1996 for Voyageur Minnesota High Yield
Municipal Bond Fund), and the financial highlights for each of the years in the
five-year period ended December 31, 1996 (for the period from June 4, 1996 to
December 31, 1996 for Voyageur Minnesota High Yield Municipal Bond Fund). These
financial statements and the financial highlights are the responsibility of Fund
management. Our responsibility is to express an opinion on these financial
statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Investment securities
held in custody are confirmed to us by the custodian. As to securities purchased
and sold but not received or delivered, we request confirmations from brokers,
and where replies are not received, we carry out other appropriate auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Voyageur Minnesota High Yield Municipal Bond Fund, Voyageur Minnesota Tax Free
Fund, Voyageur Minnesota Insured Fund, and Voyageur Minnesota Limited Term Tax
Free Fund as of December 31, 1996 and the results of their operations, changes
in their net assets and the financial highlights for the periods stated in the
first paragraph above, in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
February 14, 1997
<TABLE>
<CAPTION>
VOYAGEUR FUNDS
STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 1996
- ----------------------------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR
MINNESOTA HIGH MINNESOTA MINNESOTA MINNESOTA
YIELD MUNICIPAL TAX FREE INSURED LIMITED TERM
BOND FUND FUND FUND TAX FREE FUND
--------------- --------- --------- -------------
ASSETS
<S> <C> <C> <C> <C>
Investments in securities, at market value (note 1)
(identified costs, $10,739,767, $414,868,560,
$294,856,518 and $66,062,034, respectively) ....... $ 10,828,628 $ 435,206,282 $ 309,148,795 $ 68,501,743
Accrued interest receivable ............................ 164,581 8,293,447 6,526,973 1,434,335
Receivable for investment securities sold .............. -- -- 991,793 2,831
Receivable for Fund shares sold ........................ -- 72,031 1,084 58,928
Organizational costs (note 1) .......................... 6,077 -- -- --
------------- ------------- ------------- -------------
Total assets ........................................ 10,999,286 443,571,760 316,668,645 69,997,837
------------- ------------- ------------- -------------
LIABILITIES
Bank overdraft ......................................... 555,007 1,542,534 225,355 2,123,141
Dividends payable to shareholders ...................... 44,685 1,860,148 1,283,418 259,539
Payable for investment securities purchased ............ 678,716 1,963,966 -- --
Payable for Fund shares redeemed ....................... -- 235,758 120,152 --
Distribution fees payable .............................. 5,727 227,977 183,556 25,508
Other accrued expenses ................................. 9,600 45,201 35,873 19,758
------------- ------------- ------------- -------------
Total liabilities ................................... 1,293,735 5,875,584 1,848,354 2,427,946
------------- ------------- ------------- -------------
NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL STOCK ..... $ 9,705,551 $ 437,696,176 $ 314,820,291 $ 67,569,891
============= ============= ============= =============
Represented by:
Capital Stock - $.01 par value (note 1) ............. $ 9,534 $ 352,892 $ 297,118 $ 61,508
Additional paid-in capital .......................... 9,610,762 419,422,854 308,172,941 65,852,835
Undistributed net investment income ................. 3,203 87,594 61,231 5,102
Accumulated net realized loss on investments (note 1) (6,809) (2,504,886) (8,003,276) (789,263)
Unrealized appreciation of investments .............. 88,861 20,337,722 14,292,277 2,439,709
------------- ------------- ------------- -------------
TOTAL NET ASSETS .................................. $ 9,705,551 $ 437,696,176 $ 314,820,291 $ 67,569,891
============= ============= ============= =============
Net assets applicable to outstanding Class A shares .... $ 6,067,647 $ 428,379,970 $ 304,876,891 $ 66,024,295
============= ============= ============= =============
Net assets applicable to outstanding Class B shares .... $ 2,737,647 $ 6,233,411 $ 6,817,309 $ 408,320
============= ============= ============= =============
Net assets applicable to outstanding Class C shares .... $ 900,257 $ 3,082,795 $ 3,126,091 $ 1,137,276
============= ============= ============= =============
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE
Class A - Shares of Capital Stock outstanding:
596,194; 34,538,091; 28,772,685 and 6,010,087,
respectively (note 6) ........................... $ 10.18 $ 12.40 $ 10.60 $ 10.99
============= ============= ============= =============
Class B - Shares of Capital Stock outstanding:
268,787; 502,673; 644,114 and 37,154,
respectively (note 6) ........................... $ 10.19 $ 12.40 $ 10.58 $ 10.99
============= ============= ============= =============
Class C - Shares of Capital Stock outstanding:
88,448; 248,473; 295,018 and 103,528,
respectively (note 6) ........................... $ 10.18 $ 12.41 $ 10.60 $ 10.99
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR FUNDS
STATEMENTS OF OPERATIONS PERIOD ENDED DECEMBER 31, 1996
- -----------------------------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR VOYAGEUR VOYAGEUR
MINNESOTA HIGH MINNESOTA MINNESOTA MINNESOTA
YIELD MUNICIPAL TAX FREE INSURED LIMITED TERM
BOND FUND* FUND FUND TAX FREE FUND
--------------- --------- --------- -------------
<S> <C> <C> <C> <C>
Investment income:
Interest .............................................. $ 156,337 $ 26,899,147 $ 17,763,069 $ 3,913,199
------------ ------------ ------------ ------------
Expenses (note 3):
Investment advisory and management fee ................ 17,203 2,222,690 1,518,301 281,038
Dividend-disbursing, administrative and accounting
services fees ....................................... 13,721 472,689 355,578 110,484
Printing, postage and supplies ........................ 241 66,930 46,415 7,788
Audit and accounting fees ............................. 5,928 31,256 27,548 18,523
Legal fees ............................................ 28 14,400 11,763 705
Distribution fees - Class A ........................... 3,846 1,093,043 736,300 172,919
Distribution fees - Class B ........................... 8,177 45,609 58,570 2,048
Distribution fees - Class C ........................... 2,636 27,693 32,890 8,875
Directors' fees ....................................... 178 30,236 20,626 4,236
Registration fees ..................................... 3,274 11,229 12,036 5,433
Custodian fees ........................................ 3,267 103,170 27,024 17,352
Amortization of organizational costs .................. 803 -- -- --
Other ................................................. 654 41,639 28,629 2,713
------------ ------------ ------------ ------------
Total expenses ...................................... 59,956 4,160,584 2,875,680 632,114
Less: Expenses waived or absorbed .................... (45,653) (8,024) (6,996) (124)
------------ ------------ ------------ ------------
Net expenses before earnings credits on uninvested cash 14,303 4,152,560 2,868,684 631,990
Less: Earnings credits on uninvested cash ............ (3,267) -- -- --
------------ ------------ ------------ ------------
Total net expenses .................................. 11,036 4,152,560 2,868,684 631,990
------------ ------------ ------------ ------------
Investment income - net ............................. 145,301 22,746,587 14,894,385 3,281,209
------------ ------------ ------------ ------------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) on security transactions (note 2) (6,809) 515,784 293,417 58,144
Net change in unrealized appreciation or depreciation
of investments ..................................... 88,861 (8,943,154) (4,586,047) (1,060,245)
------------ ------------ ------------ ------------
Net gain (loss) on investments .................... 82,052 (8,427,370) (4,292,630) (1,002,101)
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ...................................... $ 227,353 $ 14,319,217 $ 10,601,755 $ 2,279,108
============ ============ ============ ============
</TABLE>
- -----------------------------------------------------
* Period from June 4, 1996 (commencement of operations) to December 31, 1996.
<TABLE>
<CAPTION>
VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
VOYAGEUR MINNESOTA
HIGH YIELD MUNICIPAL VOYAGEUR MINNESOTA
BOND FUND TAX FREE FUND
-------------------- -----------------------------
PERIOD FROM YEAR YEAR
JUNE 4, 1996* TO ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
Operations: 1996 1996 1995
-------------------- -------------- -------------
<S> <C> <C> <C>
Investment income - net ................................ $ 145,301 $ 22,746,587 $ 22,782,919
Realized gain (loss) on security transactions .......... (6,809) 515,784 (2,635,025)
Net change in unrealized appreciation or depreciation of
investments .......................................... 88,861 (8,943,154) 50,741,624
------------- ------------- -------------
Net increase in net assets resulting from operations .. 227,353 14,319,217 70,889,518
------------- ------------- -------------
Distributions to shareholders from:
Investment income - net:
Class A .............................................. (88,229) (22,406,019) (23,374,008)
Class B .............................................. (41,302) (203,627) (37,979)
Class C .............................................. (13,370) (120,510) (79,332)
------------- ------------- -------------
Total distributions ................................ (142,901) (22,730,156) (23,491,319)
------------- ------------- -------------
Capital share transactions (note 6):
Proceeds from sale of shares:
Class A (note 3) ..................................... 7,102,907 28,935,567 44,321,375
Class B .............................................. 2,696,693 3,893,971 2,627,889
Class C .............................................. 948,440 1,575,266 1,563,516
Net asset value of shares issued in connection with
acquisition of Great Hall Minnesota Insured Tax-Exempt
Fund (note 4):
Class A .......................................... N/A N/A N/A
Net asset value of shares issued in reinvestment of net
investment income distributions:
Class A .......................................... 43,874 14,510,299 15,300,068
Class B .......................................... 13,064 159,491 26,876
Class C .......................................... 7,823 95,792 54,270
Payments for redemption of shares:
Class A .............................................. (1,124,003) (61,934,519) (58,049,869)
Class B (note 3) ..................................... -- (500,598) (26,205)
Class C (note 3) ..................................... (67,699) (867,298) (534,040)
------------- ------------- -------------
Increase (decrease) in net assets from capital share
transactions ......................................... 9,621,099 (14,132,029) 5,283,880
------------- ------------- -------------
Total increase (decrease) in net assets .............. 9,705,551 (22,542,968) 52,682,079
Net assets at beginning of period ......................... -- 460,239,144 407,557,065
------------- ------------- -------------
Net assets at end of period (including undistributed net
investment income of $3,203; $87,594 and $71,163;
$61,231 and $4,200; and $5,102 and $47; respectively) $ 9,705,551 $ 437,696,176 $ 460,239,144
============= ============= =============
- -----------------------------------------------------
* Commencement of operations.
</TABLE>
[WIDE TABLE CONTINUED]
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA VOYAGEUR MINNESOTA
INSURED FUND LIMITED TERM TAX FREE FUND
--------------------------------- -----------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
Operations: 1996 1995 1996 1995
--------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
Investment income - net ................................ $ 14,894,385 $ 15,149,888 $ 3,281,209 $ 3,437,702
Realized gain (loss) on security transactions .......... 293,417 (7,669,506) 58,144 (74,374)
Net change in unrealized appreciation or depreciation of
investments .......................................... (4,586,047) 41,831,089 (1,060,245) 4,553,348
------------- ------------- ------------- -------------
Net increase in net assets resulting from operations .. 10,601,755 49,311,471 2,279,108 7,916,676
------------- ------------- ------------- -------------
Distributions to shareholders from:
Investment income - net:
Class A .............................................. (14,451,758) (15,642,473) (3,233,948) (3,447,763)
Class B .............................................. (248,884) (79,826) (7,825) (311)
Class C .............................................. (136,712) (108,180) (34,381) (19,464)
------------- ------------- ------------- -------------
Total distributions ................................ (14,837,354) (15,830,479) (3,276,154) (3,467,538)
------------- ------------- ------------- -------------
Capital share transactions (note 6):
Proceeds from sale of shares:
Class A (note 3) ..................................... 19,743,497 29,732,432 8,813,544 9,137,036
Class B .............................................. 2,213,483 4,508,245 372,719 27,011
Class C .............................................. 962,058 1,728,614 862,998 567,207
Net asset value of shares issued in connection with
acquisition of Great Hall Minnesota Insured Tax-Exempt
Fund (note 4):
Class A .......................................... 23,310,124 N/A N/A N/A
Net asset value of shares issued in reinvestment of net
investment income distributions:
Class A .......................................... 10,183,091 11,225,363 2,225,412 2,503,920
Class B .......................................... 198,159 59,610 5,862 72
Class C .......................................... 118,019 89,137 27,628 16,872
Payments for redemption of shares:
Class A .............................................. (51,938,099) (50,442,997) (16,425,703) (27,826,010)
Class B (note 3) ..................................... (213,150) (57,331) -- (11)
Class C (note 3) ..................................... (1,076,363) (425,889) (441,733) (257,614)
------------- ------------- ------------- -------------
Increase (decrease) in net assets from capital share ... 3,500,819 (3,582,816) (4,559,273) (15,831,517)
transactions ......................................... -- -- -- --
(734,780) 29,898,176 (5,556,319) (11,382,379)
Total increase (decrease) in net assets .............. 315,555,071 285,656,895 73,126,210 84,508,589
Net assets at beginning of period ......................... -- -- -- --
Net assets at end of period (including undistributed net
investment income of $3,203; $87,594 and $71,163; .... $ 314,820,291 $ 315,555,071 $ 67,569,891 $ 73,126,210
$61,231 and $4,200; and $5,102 and $47; respectively) ============= ============= ============= =============
</TABLE>
THE VOYAGEUR FUNDS
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Voyageur Minnesota High Yield Municipal Bond Fund (Minnesota High Yield Fund)
a fund within Voyageur Mutual Funds, Inc.; Voyageur Minnesota Tax Free Fund
(Minnesota Tax Free Fund) a fund within Voyageur Tax Free Funds, Inc.; Voyageur
Minnesota Insured Fund (Minnesota Insured Fund) a fund within Voyageur Insured
Funds, Inc. and Voyageur Minnesota Limited Term Tax Free Fund (Minnesota Limited
Term Tax Free Fund) a fund within Voyageur Intermediate Tax Free Funds, Inc.,
(the Funds) are registered under the Investment Company Act of 1940 (as amended)
as open-end management investment companies. Minnesota High Yield Fund is
registered as a non-diversified fund. Minnesota Tax Free Fund, Minnesota Insured
Fund and Minnesota Limited Term Tax Free Fund are registered as diversified
funds. Minnesota High Yield Fund seeks high current income free from both
federal and state income taxes by investing in medium and lower-grade municipal
bonds. The Minnesota Tax Free Fund seeks high current income free from both
federal and state income taxes by investing in investment grade municipal bonds.
Minnesota Insured Fund seeks high current income free from both federal and
state income taxes with the added safety of an insured portfolio by investing in
insured municipal bonds. Minnesota Limited Term Tax Free Fund seeks to preserve
original investment principal while providing income free from both federal and
state income taxes by investing in intermediate term investment grade municipal
bonds.
The Funds offer Class A, Class B and Class C Shares. Class A Shares are sold
with a front-end sales charge. Class B Shares may be subject to a contingent
deferred sales charge and such shares automatically convert to Class A after
eight years. Class C Shares may be subject to a contingent deferred sales charge
and have no conversion feature. All classes of shares have identical voting,
dividend, liquidation and other rights and the same terms and conditions, except
that the level of distribution fees charged differs between classes. Income,
expenses (other than expenses incurred under each class' Distribution Agreement)
and realized and unrealized gains or losses on investments are allocated to each
class of shares based upon its relative net assets.
Pursuant to their amended articles of incorporation, Voyageur Mutual Funds,
Inc., Voyageur Tax Free Funds, Inc., Voyageur Insured Funds, Inc. and Voyageur
Limited Term Tax Free Funds, Inc. each have 10 trillion shares of authorized
capital stock that may be issued in one or more series. The significant
accounting policies followed by the Funds are summarized as follows:
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of net increases (decreases) in net assets resulting from
operations during the reporting period. Actual results could differ from those
estimates.
INVESTMENTS IN SECURITIES
The values of fixed income securities are determined using pricing services
or prices quoted by independent brokers. When market quotations are not readily
available, or in certain other circumstances, securities are valued at fair
value according to methods selected in good faith by the Board of Directors.
Short-term securities are valued at amortized cost which approximates market
value.
Security transactions are accounted for on the trade date. Securities gains
and losses are calculated on the identified-cost basis. Interest income,
including level-yield amortization of premium and original issue discount, is
accrued daily.
The Funds concentrate their investments in limited geographical areas, and
therefore may have more credit risk related to the economic conditions of these
areas than a portfolio with broader geographical diversification.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS
Delivery and payment for securities which have been purchased by the Fund on
a forward commitment or when-issued basis can take place up to a month or more
after the transaction date. During this period, such securities are subject to
market fluctuations and the portfolio maintains, in a segregated account with
its custodian, assets with a market value equal to or greater than the amount of
its purchase commitments.
ORGANIZATIONAL COSTS
Organizational costs are being amortized over 60 months on a straight line
basis for Minnesota High Yield Fund.
FEDERAL TAXES
The Funds' policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders in amounts that will avoid or minimize federal
income or excise taxes for the Funds. Net investment income and net realized
gains (losses) for the Funds may differ for financial statement and tax purposes
primarily because of losses deferred for tax purposes due to "wash sale"
transactions. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the fund.
For federal income tax purposes, as of December 31, 1996, Minnesota High
Yield Fund had a capital loss carryover of $6,809 that will expire in 2004,
Minnesota Tax Free 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 and Minnesota Limited Term Tax
Free Fund had a capital loss carryover of $789,263 that will expire in 2003 if
not offset by subsequent capital gains. It is unlikely that the Board of
Directors will authorize a distribution of any net realized capital gains until
the available capital loss carryover has been offset or expires.
On the statement of assets and liabilities, as a result of permanent
book-to-tax differences, reclassification adjustments have been made to increase
undistributed net investment income and decrease additional paid-in capital $803
for Minnesota High Yield Fund.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends declared daily from net investment income are payable monthly in
cash or reinvested in additional shares of each Fund. Distribution of net
short-term realized capital gains, if any, may be paid on a monthly or annual
basis. Net long-term realized capital gains, when available, are distributed
annually.
ILLIQUID SECURITIES
At December 31, 1996, investments in securities for the Funds may include
issues that are illiquid. The Funds currently limit investments in illiquid
securities to 15% of net assets, at market value, at the date of purchase. The
aggregate value of such securities at December 31, 1996, was $580,538 (6.0% of
net assets) for Minnesota High Yield Fund, $32,635,511 (7.5% of net assets) for
Minnesota Tax Free Fund, $15,528,137 (4.9% of net assets) for Minnesota Insured
Fund and $1,286,501 (1.9% of net assets) for Minnesota Limited Term Tax Free
Fund.
(2) SECURITIES TRANSACTIONS
Purchase cost and proceeds from sales of securities other than short-term
securities aggregated $11,535,053 and $788,477 for Minnesota High Yield Fund;
$123,288,810 and $135,820,083 for Minnesota Tax Free Fund; $64,526,526 and
$59,371,079 for Minnesota Insured Fund and $19,444,151 and $22,814,613 for
Minnesota Limited Term Tax Free Fund, respectively, during the period ended
December 31, 1996. Included in the cost of purchases for Minnesota Insured Fund
is the cost of securities that were purchased in association with the
acquisition of Great Hall Minnesota Insured Tax-Exempt Fund of $22,423,620.
(3) EXPENSES
Each Fund has an investment advisory and management agreement with Voyageur
Fund Managers, Inc. (Voyageur) under which Voyageur manages the Fund assets and
provides other specified services. The fee for investment management and
advisory services is paid monthly and is based on the average daily net assets
of each Fund at the annual rate of .65% for Minnesota High Yield Fund, .50% for
Minnesota Tax Free Fund and Minnesota Insured Fund and .40% for Minnesota
Limited Term Tax Free Fund. In addition, each Fund will pay most other operating
expenses including directors' fees, registration fees, printing of shareholder
reports, legal and auditing services and other miscellaneous expenses. The
Minnesota Insured Fund incurred portfolio insurance expense of $1,228 for the
year ended December 31, 1996. Portfolio insurance expense, if any, is recognized
over the premium period. Voyageur is obligated to pay all expenses of each Fund
(excluding distribution fees, insurance premiums on portfolio securities, taxes,
interest and brokerage commissions) which exceed 1% of average daily net assets,
on an annual basis. During the period ended December 31, 1996, Voyageur absorbed
$18,827 pursuant to the contractual 1% expense limitation and, excluding waiver
of distribution fees, voluntarily absorbed $26,826 for Minnesota High Yield
Fund.
Each Fund will also pay a fee to Voyageur for acting as the Fund's dividend
disbursing, administrative and accounting services agent. The fee is paid
monthly and is equal to the sum of $1.33 per shareholder account per month, a
fixed monthly fee ranging from $1,000 to $1,500 based on the level of the Fund's
average daily net assets and an annualized percentage of average daily net
assets at reducing rates from .11% to .02%. Each Fund is also responsible for
reimbursing Voyageur's out-of-pocket expense in connection with the performance
of dividend-disbursing, administrative and accounting services.
All classes of shares have a Distribution Agreement under Rule 12b-1 of the
Investment Company Act of 1940 with Voyageur Fund Distributors, Inc. (Fund
Distributors). Under this plan each Fund is obligated to pay Fund Distributors a
monthly distribution fee at an annual rate of .25% of each Funds' average daily
net assets of the Class A Shares and 1.00% of each Funds' average daily net
assets of the Class B and Class C Shares. Fund Distributors may waive all or
part of its distribution fee at its sole discretion. During the period ended
December 31, 1996, Fund Distributors voluntarily waived Class B distribution
fees of $8,024 for Minnesota Tax Free Fund, $6,996 for Minnesota Insured Fund
and $124 for Minnesota Limited Term Tax Free Fund. Minnesota High Yield Fund
earned $3,267 in credits on uninvested cash balances held at the custodian
during the period ended December 31, 1996 which were used to reduce certain fees
for various custodial services provided by the custodian bank.
Sales charges paid by Class A shareholders were $88,450 for Minnesota High
Yield Fund, $650,734 for Minnesota Tax Free Fund, $454,762 for Minnesota Insured
Fund and $71,429 for Minnesota Limited Term Tax Free Fund. Of these amounts,
Fund Distributors received $20 for Minnesota High Yield Fund, $69,682 for
Minnesota Tax Free Fund, $33,673 for Minnesota Insured Fund and $5,306 for
Minnesota Limited Term Tax Free Fund. Contingent deferred sales charges paid by
Class B shareholders were $11,641 for Minnesota Tax Free Fund and $3,613
forMinnesota Insured Fund. Contingent deferred sales charges paid by Class C
shareholders were $15 for Minnesota Tax Free Fund, $411 for Minnesota Insured
Fund and $421 for Minnesota Limited Term Tax Free Fund.
(4) 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.
(5) PROPOSED FUND REORGANIZATION
On January 15, 1997 Voyageur's parent, Dougherty Financial Group, Inc.
("DFG"), executed an agreement and plan of merger with Lincoln National
Corporation ("LNC") pursuant to which LNC would acquire DFG, including the
mutual fund investment advisory business of DFG conducted by Voyageur. This
merger is subject to approval of the Fund's Board of Directors and shareholders.
(6) SHARE TRANSACTIONS
Transactions in shares of capital stock during the periods shown were as
follows:
<TABLE>
<CAPTION>
MINNESOTA HIGH YIELD FUND
---------------------------------------------------------------------------
CLASS A CLASS B CLASS C
---------------------- ---------------------- ------------------
PERIOD FROM PERIOD FROM PERIOD FROM
JUNE 4, 1996* TO JUNE 12, 1996* TO JUNE 7, 1996* TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1996 1996
---------------------- ---------------------- ------------------
<S> <C> <C> <C>
Shares sold .................. 703,876 267,494 94,294
Shares issued for
reinvested distributions .. 4,348 1,293 775
Shares redeemed .............. 112,030) -- (6,621)
------- -------- --------
Increase in shares outstanding 596,194 268,787 88,448
======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
MINNESOTA TAX FREE FUND
------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------- --------------------------- -------------------------
YEAR YEAR YEAR PERIOD FROM YEAR YEAR
ENDED ENDED ENDED MARCH 11, 1995* ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, TO DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995 1996 1995
------------ ----------- ----------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ................. 2,351,584 3,694,812 316,743 213,827 127,900 129,328
Shares issued for
reinvested distributions 1,180,162 1,273,503 12,994 2,195 7,795 4,487
Shares redeemed ............. (5,048,128) (4,792,882) (40,979) (2,107) (70,822) (43,826)
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in
shares outstanding ....... (1,516,382) 175,433 288,758 213,915 64,873 89,989
========== ========== ========== ========== ========== ==========
</TABLE>
- ------------------------------------
* Commencement of operations.
<TABLE>
<CAPTION>
MINNESOTA INSURED FUND
------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------- --------------------------- -------------------------
YEAR YEAR YEAR PERIOD FROM YEAR YEAR
ENDED ENDED ENDED MARCH 7, 1995* ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, TO DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995 1996 1995
------------ ----------- ----------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares sold .................... 1,875,386 2,902,567 211,514 433,849 91,722 168,194
Shares issued in connection with
acquisition of Great Hall
Minnesota Insured Tax-
Exempt Fund ................. 2,205,310 N/A N/A N/A N/A N/A
Shares issued for
reinvested distributions .... 969,663 1,094,655 18,904 5,709 11,243 8,646
Shares redeemed ................ (4,947,642) (4,895,900) (20,425) (5,437) (102,914) (40,592)
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in
shares outstanding .......... 102,717 (898,678) 209,993 434,121 51 136,248
========== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
MINNESOTA LIMITED TERM TAX FREE FUND
------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
---------------------- ----------------------------- -------------------------
YEAR YEAR YEAR PERIOD FROM YEAR YEAR
ENDED ENDED ENDED AUGUST 15, 1995* ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, TO DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995 1996 1995
------------ ----------- ----------- --------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ................. 803,384 834,844 34,174 2,438 78,645 51,965
Shares issued for
reinvested distributions . 202,700 230,452 536 7 2,520 1,545
Shares redeemed ............. (1,498,234) (2,579,455) -- (1) (39,981) (23,639)
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in
shares outstanding ....... (492,150) (1,514,159) 34,710 2,444 41,184 29,871
========== ========== ========== ========== ========== ==========
</TABLE>
- -----------------------------------
* Commencement of operations.
(7) FINANCIAL HIGHLIGHTS
Per shares data (rounded to the nearest cent) for a share of capital stock
outstanding and selected information for each period are as follows:
<TABLE>
<CAPTION>
MINNESOTA HIGH YIELD FUND
-----------------------------------------------------------
CLASS A CLASS B CLASS C
------------------- ---------------- -------------------
PERIOD FROM PERIOD FROM PERIOD FROM
JUNE 4, 1996(d) JUNE 12, 1996(d) JUNE 7, 1996(d)
TO DECEMBER 31, TO DECEMBER 31, TO DECEMBER 31,
1996 1996 1996
------------------- ---------------- -------------------
<S> <C> <C> <C>
Net asset value:
Beginning of period................................ $10.00 $9.78 $9.99
--------- --------- ---------
Operations:
Net investment income.............................. .35 .29 .30
Net realized and unrealized gain on investments.... .18 .41 .19
--------- --------- ---------
Total from operations.......................... .53 .70 .49
--------- --------- ---------
Distributions to shareholders:
From net investment income (a)..................... (.35) (.29) (.30)
--------- --------- ---------
Net asset value:
End of period...................................... $10.18 $10.19 $10.18
========= ========= =========
Total investment return (b)........................... 5.40% 7.29% 5.02%
Net assets at end of period (000's omitted)........... $6,068 $2,738 $900
Ratios:
Ratio of expenses to
average daily net assets (f)..................... .24%(e) .95%(e) .99%(e)
Ratio of net investment income
to average daily net assets...................... 5.78%(e) 5.14%(e) 4.90%(e)
Assuming no voluntary waivers and reimbursements:
Expenses (c)............................... 1.25%(e) 2.00%(e) 2.00%(e)
Net investment income...................... 4.77%(e) 4.09%(e) 3.89%(e)
Portfolio turnover rate (excluding
short-term securities)........................... 14.97% 14.97% 14.97%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
MINNESOTA TAX FREE FUND
----------------------------------------------------------
CLASS A
----------------------------------------------------------
YEAR ENDED DECEMBER 31 ,
----------------------------------------------------------
1996 1995 1994 1993 1992
------------ ---------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period......................... $12.63 $11.33 $12.85 $12.21 $12.07
------ ------ ------ ------ ------
Operations:
Net investment income....................... .63 .62 .63 .64 .70
Net realized and unrealized
gain (loss) on investments................ (.23) 1.32 (1.48) .87 .23
------ ------ ------ ------ ------
Total from operations................... .40 1.94 (.85) 1.51 .93
------ ------ ------ ------ ------
Distributions to shareholders:
From net investment income (a).............. (.63) (.64) (.61) (.64) (.70)
From net realized gains..................... -- -- (.05) (.23) (.09)
In excess of net realized gains............. -- -- (.01) -- --
------ ------ ------ ------ ------
Total distributions....................... (.63) (.64) (.67) (.87) (.79)
------ ------ ------ ------ ------
Net asset value:
End of period............................... $12.40 $12.63 $11.33 $12.85 $12.21
====== ====== ====== ====== ======
Total investment return (b).................... 3.33% 17.49% (6.73)% 12.70% 7.97%
Net assets at end of
period (000's omitted)...................... $428,380 $455,220 $406,497 $458,145 $331,314
Ratios:
Ratio of expenses to
average daily net assets (f).............. .92% .93% .90% 1.02% .96%
Ratio of net investment income
to average daily net assets............... 5.13% 5.11% 5.29% 5.02% 5.73%
Assuming no voluntary waivers
and reimbursements:
Expenses (c)........................ .92% .93% .90% 1.02% 1.04%
Net investment income............... 5.13% 5.11% 5.29% 5.02% 5.65%
Portfolio turnover rate (excluding
short-term securities).................... 27.67% 50.84% 24.26% 31.77% 23.60%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
MINNESOTA TAX FREE FUND
---------------------------------------------------------------------
CLASS B CLASS C
-------------------------- -----------------------------------------
PERIOD FROM PERIOD FROM
YEAR MARCH 11, YEAR YEAR MAY 4,
ENDED 1995(d) TO ENDED ENDED 1994(d) TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995 1994
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period................... $12.62 $11.90 $12.63 $11.33 $11.96
------ ------ ------ ------ ------
Operations:
Net investment income................. .56 .45 .54 .53 .34
Net realized and unrealized
gain (loss) on investments.......... (.22) .71 (.22) 1.32 (.61)
------ ------ ------ ------ ------
Total from operations............. .34 1.16 .32 1.85 (.27)
------ ------ ------ ------ ------
Distributions to shareholders:
From net investment income (a)........ (.56) (.44) (.54) (.55) (.32)
From net realized gains............... -- -- -- -- (.04)
------ ------ ------ ------ ------
Total distributions................. (.56) (.44) (.54) (.55) (.36)
------ ------ ------ ------ ------
Net asset value:
End of period......................... $12.40 $12.62 $12.41 $12.63 $11.33
====== ====== ====== ====== ======
Total investment return (b).............. 2.83% 9.95% 2.64% 16.62% (2.30)%
Net assets at end of
period (000's omitted)................ $6,233 $2,701 $3,083 $2,319 $1,061
Ratios:
Ratio of expenses to
average daily net assets (f)........ 1.50% 1.38%(e) 1.67% 1.67% 1.72%(e)
Ratio of net investment income
to average daily net assets......... 4.53% 4.43%(e) 4.38% 4.33% 4.56%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (c).................. 1.67% 1.63%(e) 1.67% 1.67% 1.72%(e)
Net investment income......... 4.36% 4.18%(e) 4.38% 4.33% 4.56%(e)
Portfolio turnover rate (excluding
short-term securities).............. 27.67% 50.84% 27.67% 50.84% 24.26%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
MINNESOTA INSURED FUND
--------------------------------------------------------
CLASS A
--------------------------------------------------------
YEAR ENDED DECEMBER 31 ,
--------------------------------------------------------
1996 1995 1994 1993 1992
----------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period........................ $10.73 $ 9.61 $11.02 $10.27 $10.07
------ ------ ------ ------ ------
Operations:
Net investment income....................... .52 .51 .54 .54 .59
Net realized and unrealized
gain (loss) on investments................ (.13) 1.14 (1.39) .84 .25
------ ------ ------ ------ ------
Total from operations................... .39 1.65 (.85) 1.38 .84
------ ------ ------ ------ ------
Distributions to shareholders:
From net investment income (a).............. (.52) (.53) (.52) (.54) (.59)
From net realized gains.................... -- -- (.04) (.09) (.05)
------ ------ ------ ------ ------
Total distributions....................... (.52) (.53) (.56) (.63) (.64)
------ ------ ------ ------ ------
Net asset value:
End of period............................... $10.60 $10.73 $ 9.61 $11.02 $10.27
====== ====== ====== ====== ======
Total investment return (b).................... 3.75% 17.52 % (7.88)% 13.80% 8.57%
Net assets at end of
period (000's omitted)...................... $304,877 $307,734 $284,132 $311,187 $162,728
Ratios:
Ratio of expenses to
average daily net assets (f).............. .92% .87% .61% .70% .37%
Ratio of net investment income
to average daily net assets............... 4.93% 4.92% 5.29% 4.93% 5.66%
Assuming no voluntary waivers
and reimbursements:
Expenses (c)........................ .92% .92% .94% 1.02% 1.06%
Net investment income............... 4.93% 4.87% 4.96% 4.61% 4.97%
Portfolio turnover rate (excluding
short-term securities).................... 14.04% 53.72% 24.75% 18.25% 14.11%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
MINNESOTA INSURED FUND
---------------------------------------------------------------------
CLASS B CLASS C
-------------------------- -----------------------------------------
PERIOD FROM PERIOD FROM
YEAR MARCH 7, YEAR YEAR MAY 4,
ENDED 1995(D) TO ENDED ENDED 1994(D) TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995 1994
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period.................... $10.72 $10.14 $10.73 $9.61 $10.23
------ ------ ------ ----- ------
Operations:
Net investment income.................. .45 .38 .44 .43 .30
Net realized and unrealized
gain (loss) on investments........... (.14) .58 (.13) 1.14 (.62)
------ ------ ------ ----- ------
Total from operations.............. .31 .96 .31 1.57 (.32)
------ ------ ------ ----- ------
Distributions to shareholders:
From net investment income (a)......... (.45) (.38) (.44) (.45) (.28)
From net realized gains................ -- -- -- -- (.02)
------ ------ ------ ----- ------
Total distributions.................. (.45) (.38) (.44) (.45) (.30)
------ ------ ------ ----- ------
Net asset value:
End of period.......................... $10.58 $10.72 $10.60 $10.73 $9.61
====== ====== ====== ====== =====
Total investment return (b)............... 3.03% 9.59% 2.98% 16.63% (3.14)%
Net assets at end of
period (000's omitted)................. $6,817 $4,655 $3,126 $3,166 $1,525
Ratios:
Ratio of expenses to
average daily net assets (f)......... 1.56% 1.34%(e) 1.68% 1.66% 1.36%(e)
Ratio of net investment income
to average daily net assets.......... 4.29% 4.15%(e) 4.18% 4.11% 4.68%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (c)................... 1.68% 1.64%(e) 1.68% 1.67% 1.68%(e)
Net investment income.......... 4.17% 3.85%(e) 4.18% 4.10% 4.36%(e)
Portfolio turnover rate (excluding
short-term securities)............... 14.04% 53.72% 14.04% 53.72% 24.75%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
MINNESOTA LIMITED TERM TAX FREE FUND
--------------------------------------------------------
CLASS A
--------------------------------------------------------
YEAR ENDED DECEMBER 31 ,
--------------------------------------------------------
1996 1995 1994 1993 1992
----------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period......................... $11.14 $10.50 $11.16 $10.83 $10.69
------ ------ ------ ------ ------
Operations:
Net investment income....................... .51 .51 .45 .47 .51
Net realized and unrealized
gain (loss) on investments................ (.15) .64 (.66) .37 .18
------ ------ ------ ------ ------
Total from operations................... .36 1.15 (.21) .84 .69
------ ------ ------ ------ ------
Distributions to shareholders:
From net investment income (a).............. (.51) (.51) (.45) (.47) (.51)
From net realized gains..................... -- -- -- (.04) (.04)
------ ------ ------ ------ ------
Total distributions....................... (.51) (.51) (.45) (.51) (.55)
------ ------ ------ ------ ------
Net asset value:
End of period............................... $10.99 $11.14 $10.50 $11.16 $10.83
====== ====== ====== ====== ======
Total investment return (b).................... 3.46% 11.00% (1.91)% 7.88% 6.62%
Net assets at end of
period (000's omitted)...................... $66,024 $72,405 $84,168 $75,374 $48,210
Ratios:
Ratio of expenses to
average daily net assets (f).............. .89% .91% .92% .99% 1.09%
Ratio of net investment income
to average daily net assets............... 4.69% 4.61% 4.18% 4.18% 4.71%
Assuming no voluntary waivers
and reimbursements:
Expenses (c)........................ .89% .91% .92% .99% 1.09%
Net investment income............... 4.69% 4.61% 4.18% 4.18% 4.71%
Portfolio turnover rate (excluding
short-term securities).................... 28.18% 40.28% 42.06% 19.13% 25.56%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
MINNESOTA LIMITED TERM TAX FREE FUND
-----------------------------------------------------------------------------------
CLASS B CLASS C
-------------------------- -----------------------------------------
PERIOD FROM PERIOD FROM
YEAR AUGUST 15, YEAR YEAR APRIL 30,
ENDED 1995(d) TO ENDED ENDED 1994(d) TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995 1994
----------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period.................... $11.14 $10.95 $11.13 $10.50 $10.74
------ ------ ------ ------ ------
Operations:
Net investment income.................. .44 .17 .43 .42 .24
Net realized and unrealized
gain (loss) on investments........... (.15) .19 (.14) .63 (.24)
------ ------ ------ ------ ------
Total from operations.............. .29 .36 .29 1.05 --
------ ------ ------ ------ ------
Distributions to shareholders:
From net investment income (a)......... (.44) (.17) (.43) (.42) (.24)
------ ------ ------ ------ ------
Total distributions................ (.44) (.17) (.43) (.42) (.24)
------ ------ ------ ------ ------
Net asset value:
End of period.......................... $10.99 $11.14 $10.99 $11.13 $10.50
====== ====== ====== ====== ======
Total investment return (b)............... 2.74% 3.26% 2.69% 10.18% (0.03)%
Net assets at end of
period (000's omitted)................. $408 $27 $1,137 $694 $341
Ratios:
Ratio of expenses to
average daily net assets (f)......... 1.56% 1.30%(e) 1.64% 1.63% 1.71%(e)
Ratio of net investment income
to average daily net assets.......... 3.99% 3.93%(e) 3.94% 3.82% 3.35%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (c)................... 1.62% 1.55%(e) 1.64% 1.63% 1.71%(e)
Net investment income.......... 3.93% 3.68%(e) 3.94% 3.82% 3.35%(e)
Portfolio turnover rate (excluding
short-term securities)............... 28.18% 40.28% 28.18% 40.28% 42.05%
</TABLE>
See accompanying notes to Financial Highlights.
NOTES TO FINANCIAL HIGHLIGHTS
(a) For federal income tax purposes, all of the distributions from net
investment income were derived from interest on securities exempt from
federal income tax.
(b) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(c) Voyageur and Fund Distributors voluntarily waived or reimbursed a portion
of expenses during several periods presented. The annual contractual
expense limit for the Funds (excluding distribution fees, insurance
premiums on portfolio securities, taxes, interest and brokerage
commissions) is 1.00% of average daily net assets. The maximum distribution
fee is .25% of each Fund's average daily net assets for Class A Shares and
1.00% of each Fund's average daily net assets for Class B and Class C
Shares.
(d) Commencement of operations.
(e) Annualized.
(f) Beginning in the year ended December 31, 1995, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Funds. Prior period expense ratios have not
been adjusted.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
INVESTMENTS IN SECURITIES DECEMBER 31, 1996
- -------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (d) RATE MATURITY VALUE (a)
- -------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
MINNESOTA MUNICIPAL BONDS (111.6%):
GENERAL OBLIGATION (4.2%):
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 100 Esko Independent School District #99 (FSA Insured)............... 5.75% 04-01-17 $ 101,500
100 Inver Grove Heights Series A..................................... 5.75 02-01-13 101,500
100 Stewartville Independent School District Series A................ 5.75 02-01-12 102,375
100 Waconia Independent School District Series 93A (FSA Insured)..... 5.45 02-01-15 100,250
-------
405,625
-------
EDUCATION (2.1%):
------------------------------------------------------------------------------------------------------
100 Minnesota Higher Education Facility Macalaster College 4C........ 5.50 03-01-12 99,000
100 Minnesota State University System Revenue Bonds 93A.............. 6.10 06-30-23 101,250
-------
200,250
-------
HEALTH CARE (43.9%):
-------------------------------------------------------------------------------------------------------
125 Cambridge Healthcare Facility Revenue-Grandview Christian Home... 7.25 09-01-26 126,250
100 Cannon Falls Nursing Home-Fransican Health Community Project..... 7.25 07-01-21 102,375
325 Duluth St. Francis Health Care Facility.......................... 6.75 12-01-17 324,188
750 Fergus Falls Health Care Facility Revenue-Lake Region Hospital... 6.50 09-01-18 766,875
250 Little Canada Senior Facility Residence 1992-Pres. Home.......... 7.25 07-01-12 252,500
300 Mankato Health Facilities Revenue Series A-Lutheran Homes........ 6.88 10-01-26 299,625
150 Minneapolis Health Care American Baptist Homes................... 8.70 11-01-09 165,375
100 Robbinsdale North Memorial Medical Center (AMBAC Insured) . . . . 5.50 05-15-23 97,250
300 St. Louis Park Methodist Hospital (AMBAC Insured)................ 5.10 07-01-13 278,062
750 St. Paul Housing and Redevelopment Hospital Health East.......... 6.63 11-01-17 765,000
150 Springfield St. John's Lutheran Home Revenue..................... 8.50 11-01-19 158,438
660 Waconia Good Samaritan Housing and Redevelopment................. 6.00 06-01-14 662,475
250 Wadena County Health Care Facility............................... 7.75 09-01-24 263,125
---------
4,261,538
---------
HOUSING (38.3%):
------------------------------------------------------------------------------------------------------
370 Brooklyn Center Four Court Multifamily Housing...................7.50(e) 06-01-25 370,925
300 Chanhassen Multifamily Housing Heritage Park.....................6.20(e) 07-01-30 301,875
293 Eden Prairie Multifamily Housing Subordinated-Tanager Creek . . . .8.00(b) 06-20-31 296,663
250 Minneapolis Multifamily Housing Olson Townhomes..................6.00(e) 12-01-19 246,562
300 Minneapolis Multifamily Housing Nicollet Towers Section 8........ 6.00 12-01-19 299,625
100 Minnesota Housing Finance Authority Single Family
Mortgage Series E............................................. 6.25(e) 01-01-23 100,875
100 Minnesota Housing Finance Authority Single Family Housing........ 5.88 01-01-17 99,250
200 Minnetonka Multifamily Housing Beacon Hill....................... 7.55 06-01-19 212,250
300 New Brighton Multifamily Polynesian Village......................7.60(e) 04-01-25 303,750
135 St. Anthony Multifamily Housing Chandler (GNMA Insured).......... 6.05 11-20-16 136,856
125 St. Louis Park Multifamily Mortgage Revenue...................... 5.50 11-01-13 121,250
205 Stillwater Multifamily Housing Cottages.......................... 6.75 11-01-11 203,719
680 Stillwater Multifamily Housing Cottages..........................7.00(l) 11-01-16 680,000
340 Stillwater Multifamily Housing Cottages.......................... 7.00 11-01-27 340,000
---------
3,713,600
---------
UTILITIES (10.4%):
------------------------------------------------------------------------------------------------------
605 Bass Brook PCR for Minnesota Power and Light Revenue............. 6.00% 07-01-22 $ 608,025
100 Southern Minnesota Municipal Power Agency Revenue
(FGIC Insured)................................................ 5.75 01-01-18 100,375
300 Western Municipal Power Agency Revenue........................... 6.13 01-01-16 300,453
---------
1,008,853
---------
INDUSTRIAL (2.9%):
------------------------------------------------------------------------------------------------------
300 Red Wing IDR Kmart (First Mortgage).............................. 5.50(b) 07-01-08 283,875
----------
CERTIFICATES OF PARTICIPATION (6.0%):
------------------------------------------------------------------------------------------------------
400 Beltrami County.................................................. 6.10 02-01-12 455,400
125 Rice County...................................................... 6.00 12-01-21 127,187
----------
582,587
----------
OTHER (3.8%):
----------------------------------------------------------------------------------------------------
365 Woodbury Golf Course Revenue..................................... 6.75 02-01-22 372,300
----------
TOTAL INVESTMENTS IN SECURITIES (cost:$10,739,767) (f) $ 10,828,628
============
</TABLE>
See accompanying notes to investments in securities.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA TAX FREE FUND
INVESTMENTS IN SECURITIES DECEMBER 31, 1996
- -------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (d) RATE MATURITY VALUE (a)
- -------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
MUNICIPAL BONDS (99.4%):
ESCROWED WITH U.S. GOVERNMENT BONDS (9.2%):
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 1,000 Anoka County Capital Improvement.................................... 7.20% 02-01-99 $ 1,054,970
250 Blaine IDR (Ball Corp) ............................................. 8.25 12-01-99 274,800
300 Blaine IDR (Ball Corp).............................................. 8.25 12-01-00 337,778
500 Bloomington Tax Increment .......................................... 9.75 02-01-05 654,140
390 Brainerd Independent School District #181........................... 7.00 06-01-01 427,712
1,000 Hopkins Senior Multifamily Facilities Augustana Home................ 9.00 07-01-97 1,043,170
575 Kimball Independent School District #739 ........................... 7.70 02-01-98 595,619
525 Kimball Independent School District #739............................ 7.60 02-01-98 543,283
500 Little Falls Independent School District #482 (AMBAC Insured)....... 6.80 02-01-99 526,120
1,990 Minnesota Public Facility Authority Water PCA....................... 7.10 03-01-00 2,183,586
5,220 Minnesota Public Facility Authority Water PCA ...................... 6.95 03-01-01 5,792,216
10,000 Maplewood Independent School District #622 (FSA Insured)............ 7.10 02-01-25 11,516,100
1,255 Northfield College Facility Revenue - St. Olaf College.............. 7.88 10-01-98 1,330,676
860 Northfield College Facility Revenue - St. Olaf College.............. 8.00 10-01-98 913,637
1,000 Owatonna Public Utilities........................................... 6.75 01-01-01 1,080,880
750 Rockford Independent School District #883........................... 7.20 12-15-98 793,230
1,000 Southern Minnesota Muni Power Agency Power Supply
(MBIA Insured)................................................... 5.75 01-01-16 1,011,470
990 Southern Minnesota Municipal Power Agency (AMBAC Insured)........... 5.50 01-01-15 987,188
1,000 St. Cloud Independent School District #742 ......................... 7.50 02-01-98 1,032,200
775 St. Louis Park Methodist Hospital (AMBAC Insured)................... 7.25 07-01-00 860,041
825 St. Paul Civic Center Revenue Sales Tax (MBIA Insured).............. 5.55 11-01-23 809,135
2,175 St. Paul Sewer Revenue Series 88A................................... 8.00 12-01-98 2,343,345
1,500 University of Minnesota Revenue Refunding........................... 6.00 02-01-11 1,500,000
1,560 Wayzata Independent School District #284............................ 7.10 02-01-99 1,641,120
625 Wayzata Independent School District #284 ........................... 7.05 02-01-99 656,888
185 Western Minnesota Municipal Power Agency (MBIA Insured)............. 9.75 01-01-16 276,923
----------
40,186,227
----------
GENERAL OBLIGATION (20.4%):
------------------------------------------------------------------------------------------------------
1,805 Centennial Independent School District #12 (FGIC Insured).......... 4.88 02-01-10 1,713,649
2,850 Chaska Independent School District #112 (FGIC Insured)............. 5.25 02-01-11 2,797,104
5,085 Chaska Independent School District #112 (FGIC Insured)............. 5.38 02-01-14 4,992,911
1,000 Faribault Independent School District #656 (MN School
District Credit Enhanced)....................................... 6.10 06-01-10 1,059,060
3,500 Farmington Independent School District #192 (AMBAC Insured)........ 5.13 02-01-15 3,314,325
Hennepin County 7,990.............................................. 5.75 10-01-10 8,240,566
3,675 Hopkins Independent School District #270 (MBIA Insured)............ 4.88 02-01-13 3,443,071
1,700 Hutchinson Independent School District Series A (MN School
District Enhanced).............................................. 5.85% 02-01-18 1,731,127
2,350 Kenyon Wanamingo Independent School District (MBIA Insured)........ 6.00 02-01-18 2,413,309
4,250 Lakeville Independent School District #194, Inverse Floater
(MBIA Insured).................................................. 5.67(m) 02-01-15 3,883,523
1,540 Mahtomedi Independent School District #832 Series B Zero
Coupon (MBIA Insured)........................................... 5.90(g) 02-01-14 602,910
1,015 Milaca Independent School District #912 (FSA Insured).............. 5.50 02-01-20 1,010,615
850 Minneapolis Convention Center Facilities, Inverse Floater ......... 6.27(m) 04-01-14 853,366
2,000 Minneapolis Series B............................................... 5.20 03-01-13 1,966,200
4,220 Minneapolis Sports Arena Project, Inverse Floater.................. 5.62(m) 10-01-20 3,810,069
580 Minneapolis Sports Arena Project, Inverse Floater.................. 5.57(m) 04-01-14 543,709
1,750 Minneapolis Unlimited Tax Series 1992 ............................. 6.30 10-01-08 1,880,533
4,550 Minnetonka Independent School District #276 (FSA Insured).......... 5.75 02-02-22 4,609,287
1,555 New Ulm Independent School District #88 (FSA Insured).............. 5.50 02-01-17 1,555,435
1,540 North Branch Independent School District #138 (FGIC Insured)....... 5.50 02-01-12 1,545,898
2,000 North Branch Independent School District #138 (FGIC Insured)....... 5.63 02-01-17 2,010,460
2,250 North St. Paul, Maplewood Independent School District #622,
Inverse Floater................................................. 5.62(m) 02-01-20 1,876,298
240 Pine Island Independent School District #255 (FSA Insured)......... 6.63 06-01-12 253,385
310 Pine Island Independent School District #255 (FSA Insured)......... 6.63 06-01-13 326,979
330 Pine Island Independent School District #255 (FSA Insured)......... 6.63 06-01-14 348,404
355 Pine Island Independent School District #255 (FSA Insured)......... 6.63 06-01-15 373,375
380 Pine Island Independent School District #255 (FSA Insured)......... 6.63 06-01-16 399,669
385 Plainview Independent School District #810......................... 6.70 02-01-06 416,763
420 Plainview Independent School District #810......................... 6.75 02-01-07 456,225
445 Plainview Independent School District #810......................... 6.75 02-01-08 483,381
1,000 Rochester Tax Increment............................................ 6.50 12-01-04 1,026,910
4,000 Rosemount Independent School District #196, Inverse Floater........ 7.12(m) 04-01-15 4,156,160
1,375 Rosemount - Apple Valley Independent School District #196
(FSA Insured)................................................... 5.88 04-01-15 1,406,818
2,600 Rosemount Independent School District #196 Series B Zero
Coupon (FSA Insured)............................................ 5.93(g) 04-01-11 1,214,330
1,850 Rosemount Independent School District #196 Zero
Coupon (FSA Insured)............................................ 5.96(g) 04-01-12 812,983
1,915 Rosemount Independent School District #196 Zero
Coupon (FSA Insured)............................................ 6.01(g) 04-01-13 791,067
540 Sartell Independent School District #748 Zero Coupon
(MBIA Insured)................................................. 5.98(g) 02-01-13 225,104
1,075 Sartell Independent School District #748 Zero Coupon
(MBIA Insured).................................................. 6.10(g) 02-01-15 396,621
1,750 Sartell Independent School District #748 Zero Coupon
(MBIA Insured)................................................. 6.15(g) 02-01-16 608,160
1,600 Sartell Independent School District #748 Zero Coupon
(MBIA Insured).................................................. 6.15(g)% 02-01-17 523,504
1,850 Sartell Independent School District #748 Series A
(MBIA Insured).................................................. 5.75 02-01-15 1,882,597
1,310 South Washington County Independent School District #833
(FGIC Insured).................................................. 4.88 06-01-12 1,222,387
1,350 South Washington County Independent School District #833
(FGIC Insured).................................................. 4.88 06-01-13 1,251,950
2,170 South Washington County Independent School District #833
(FGIC Insured).................................................. 4.88 06-01-14 2,000,241
1,000 Spring Lake Park Independent School District #16, Inverse Floater
(MBIA Insured).................................................. 5.87(m) 02-01-17 944,340
3,000 Stillwater Independent School District #834 (MBIA Insured)......... 5.75 02-01-15 3,048,210
1,025 Stillwater Series A (FSA Insured).................................. 5.38 02-01-17 1,013,182
1,025 Stillwater Series A (FSA Insured).................................. 5.38 02-01-21 1,002,358
3,250 Waseca Independent School District #829 (MBIA Insured)............. 5.50 04-01-17 3,251,820
1,680 Washington County ................................................. 5.90 02-01-10 1,733,256
2,000 White Bear Lake Independent School District #624 (FSA Insured)..... 5.30 02-01-14 1,948,440
----------
89,372,044
----------
UTILITIES (17.7%):
------------------------------------------------------------------------------------------------------
1,750 Bass Brook Pollution Control Revenue, Minnesota Power & Light
(MBIA Insured)................................................ 6.00 07-01-22 1,783,320
17,490 Bass Brook Pollution Control Revenue Rfg., Minnesota Power and
Light ........................................................ 6.00 07-01-22 17,476,183
3,815 Northern Minnesota Municipal Power Agency Zero Coupon
(AMBAC Insured)............................................... 5.85(g) 01-01-09 2,035,570
5,875 Northern Minnesota Municipal Power Agency Series 89A............. 7.25 01-01-16 6,271,563
13,500 Northern Minnesota Municipal Power Agency Series B
(AMBAC Insured)............................................... 5.50 01-01-18 13,326,255
2,000 Puerto Rico Aqueduct & Sewer Authority........................... 5.00 07-01-15 1,870,540
3,000 Puerto Rico Aqueduct & Sewer Authority........................... 5.00 07-01-19 2,742,750
1,500 Puerto Rico Electric Power Authority............................. 5.25 07-01-21 1,387,290
2,930 Puerto Rico Electric Power Authority............................. 5.50 07-01-25 2,800,289
3,880 Southern Minnesota Municipal Power Agency Revenue
Series A (FGIC Insured)....................................... 5.75 01-01-18 3,695,079
1,125 Southern Minnesota Municipal Power Agency Series B
(FGIC Insured)................................................ 5.00 01-01-13 1,066,253
1,560 Southern Minnesota Municipal Power Agency Supply System
(AMBAC Insured)............................................... 5.50 01-01-15 1,537,240
7,200 Southern Minnesota Municipal Power Agency (MBIA Insured)......... 4.75 01-01-16 6,474,456
2,000 Southern Minnesota Municipal Power Agency (FGIC Insured)......... 5.75 01-01-18 2,010,780
9,770 Southern Minnesota Municipal Power Agency (MBIA Insured)......... 5.75 01-01-18 9,822,660
4,785 Southern Minnesota Municipal Power Agency Zero Coupon
(MBIA Insured)................................................ 6.77(g)% 01-01-19 1,358,365
5,000 Southern Minnesota Municipal Power Agency Zero Coupon
(MBIA Insured)................................................ 6.14(g) 01-01-21 1,265,800
550 Western Minnesota Municipal Power Agency Revenue ................ 6.13 01-01-16 550,017
----------
77,474,410
----------
INDUSTRIAL (8.8%):
-------------------------------------------------------------------------------------------------------
1,000 Anoka Resource Recovery Revenue for NSP Series 85................ 7.15 12-01-08 1,071,040
2,000 Becker Pollution Control Revenue for NSP Series 89A.............. 6.80 04-01-07 2,132,500
14,000 Cloquet Pollution Control Revenue for Potlatch Corporation....... 5.90 10-01-26 14,033,740
4,500 Duluth Seaway Port Authority Revenue for Cargill, Inc............ 6.13 05-01-14 4,686,840
1,000 East Grand Forks for American Crystal Sugar Pollution Control
Revenue....................................................... 7.75 04-01-18 1,079,070
1,430 Minneapolis Community Development Agency Common Bond Fund
Series 86-1 (Fireman's Fund Insured).......................... 7.63 06-01-06 1,471,113
1,000 Minnesota Public Facilities Water Pollution Control.............. 5.38 03-01-14 992,730
4,400 Minnesota Public Facilities Water Pollution Control.............. 6.25 03-01-16 4,670,468
2,200 Richfield CDR for Richfield Shoppes.............................. 8.38(j) 10-01-13 2,395,250
4,574 St. Cloud CDR for Northwest Center Association................... 7.50(b) 08-01-12 4,716,908
1,300 St. Paul Port Authority Fort Road Medical/Twin Parks
(Asset Guaranty Reinsurance).................................. 7.50 09-01-02 1,380,977
----------
38,630,636
----------
HEALTH CARE (22.8%):
------------------------------------------------------------------------------------------------------
1,000 Albert Lea St. John's Lutheran Home Project...................... 8.50 11-01-19 1,067,500
600 Bemidji Hospital Facilities Revenue North County Health.......... 6.05 09-01-16 606,990
1,825 Bemidji Hospital Facilities Revenue North County Health.......... 6.05 09-01-24 1,832,135
1,760 Bemidji Hospital Facilities Revenue North County Health.......... 5.63 09-01-15 1,726,982
2,435 Bemidji Hospital Facilities Revenue North County Health.......... 5.63 09-01-21 2,344,686
2,250 Brainerd Benedictine Health Systems for St. Joseph's Hospital
(Connie Lee Insured).......................................... 6.00 02-15-12 2,321,168
9,450 Duluth Benedictine/St. Mary's Health (Connie Lee Insured)........ 6.00 02-15-20 9,636,921
4,295 Duluth Economic Development Authority St. Luke's Hospital
(Connie Lee Insured).......................................... 6.40 05-01-18 4,526,243
2,500 Edina Fairview Hospital Revenue.................................. 7.13 07-01-19 2,687,500
500 Glencoe/McLeod County Health Care................................ 8.50 12-01-15 542,335
1,000 Little Canada Health Care 1992 (Presbyterian Homes Guaranteed)... 7.25 07-01-12 1,010,000
3,000 Minneapolis Fairview Hospital Revenue (MBIA Insured)............. 6.50 01-01-11 3,206,220
4,000 Minneapolis Fairview Hospital Revenue Series 1993A
(MBIA Insured)................................................ 5.25 11-15-13 3,874,960
2,485 Minneapolis Health Care-American Baptist Homes................... 8.70% 11-01-09 2,690,013
1,360 Minneapolis/St. Paul HRA HealthOne Obligated Group
(MBIA Insured)................................................ 7.40 08-15-11 1,504,500
1,045 Minneapolis/St. Paul HRA Children's Hospital
(FSA Insured)................................................. 5.50 08-15-25 1,014,173
6,500 Minneapolis/St. Paul HRA Children's Hospital Health Care, Inverse
Floater....................................................... 6.37(m) 08-15-25 6,206,070
10,725 Robbinsdale North Memorial Medical Center (AMBAC Insured)........ 5.50 05-15-23 10,419,123
6,000 Rochester Mayo Health Care Revenue Series 92H.................... 6.03 11-15-15 6,208,740
5,900 Rochester Mayo Foundation, Series 1992 D......................... 6.25 11-15-21 6,159,659
2,000 Roseville Presbyterian Homes, Inc. Health Care Project
(Presbyterian Homes Guaranteed)............................... 7.50 05-01-07 2,022,500
600 Spring Park Twin Birch Nursing Home
(Presbyterian Homes Guaranteed)............................... 8.25 08-01-11 637,500
600 Springfield St. John's Lutheran Home Project..................... 8.50 11-01-19 636,126
10,250 St. Cloud Hospital Facilities Revenue for St. Cloud Hospital
(AMBAC Insured)............................................... 5.30 10-01-20 9,753,798
7,300 St. Louis Park Methodist Hospital (AMBAC Insured)................ 5.10 07-01-13 6,743,375
11,220 St. Louis Park Methodist Hospital (AMBAC Insured)................ 5.20 07-01-23 10,457,825
-----------
99,837,042
-----------
HOUSING (15.5%):
------------------------------------------------------------------------------------------------------
500 Austin Housing and Redevelopment Authority Courtyard
Residence Series 95A.......................................... 7.25 01-01-26 509,080
1,010 Beltrami County ................................................. 6.20 02-01-14 1,002,385
2,500 Brooklyn Center Multifamily Housing Revenue Ponds Family
Housing Project-Section 8..................................... 5.90 01-01-20 2,451,300
3,370 Burnsville Multifamily - Bridgeway Apartments (FHA Insured)...... 7.63 02-01-24 3,491,084
1,000 Burnsville Multifamily- Coventry Court Apartments Project
(FHA Insured)................................................. 7.50 09-01-17 1,050,120
175 Dakota County Housing and Redevelopment Authority Single
Family (GNMA Backed).......................................... 8.10 03-01-16 183,717
1,000 Eagan Forest Ridge Apartments Project (FHA Insured).............. 7.50 09-01-17 1,050,120
400 Eden Prairie Multifamily Revenue, Eden Investments (FHA Insured). 7.40 08-01-25 422,224
1,585 Eden Prairie Multifamily Windslope Apartments -Section 8......... 7.10 11-01-17 1,651,110
7,605 Eden Prairie Multifamily Homes, Tanager Creek (GNMA Insured)..... 8.05 06-20-31 8,728,030
497 Eden Prairie Multifamily Homes Subordinated Tanager Creek........ 8.00(b) 06-20-31 505,076
1,615 Edina Park Plaza Multifamily Housing (FHA Insured)............... 7.50 12-01-09 1,726,322
1,250 Edina Park Plaza Multifamily Housing (FHA Insured)............... 7.70 12-01-28 1,317,213
1,000 Hopkins Renaissance Multifamily Housing-Section 8................ 6.38 04-01-20 1,016,020
1,000 Maplewood Hazel Ridge Apartments Multifamily Housing............. 9.25 12-01-00(c) 1,036,990
1,000 Minneapolis Housing Facility Revenue 1993 Augustana Chapel View 7.00 04-01-18 1,002,670
4,000 Minneapolis Multifamily Mortgage Seward Towers (GNMA Backed) 7.38 12-20-30 4,226,760
2,000 Minneapolis-Nicollet Multifamily Housing ....................... 6.00 12-01-19 2,006,620
1,000 Minnesota Housing Finance Agency Housing Development
Series A -Section 8........................................... 7.80% 08-01-18 1,031,720
1,500 Minnesota Housing Finance Agency Multifamily Housing............. 6.95 02-01-14 1,569,225
745 Minnesota Housing Finance Agency Multifamily Housing Series 92A 6.95 08-01-17 771,507
1,205 Minnesota Housing Finance Agency Rental Housing Series B......... 6.25 08-01-22 1,211,856
450 Minnesota Housing Finance Agency Single Family Mortgage
Series C...................................................... 7.65 07-01-08 481,685
360 Minnesota Housing Finance Agency Single Family Mortgage.......... 7.30 07-01-09 377,212
180 Minnesota Housing Finance Agency Single Family Mortgage
Series B...................................................... 7.30 07-01-10 188,606
1,010 Minnesota Housing Finance Agency Single Family Mortgage
Series 91C.................................................... 7.10 07-01-11 1,064,449
955 Minnesota Housing Finance Agency Single Family Mortgage
86 Series B................................................... 7.25 07-01-16 968,876
2,000 Minnetonka Multifamily - Beacon Hill Project (Presbyterian Homes
Guaranteed)................................................... 7.70 06-01-25 2,078,320
1,500 Red Wing Housing and Redevelopment Agency Jordan
Tower -Section 8 Series 1992.................................. 7.00 01-01-19 1,553,880
2,250 St. Cloud Germain Towers Housing Series 1993 -Section 8.......... 5.90 09-01-20 2,170,913
2,045 St. Cloud Housing and Redevelopment Agency Northway
A&B Project -Section 8........................................ 7.50 12-01-18 2,083,344
1,000 Stillwater Multifamily Housing Stillwater Cottages............... 7.00 11-01-27 1,002,250
3,855 St. Louis Park Multifamily Housing Revenue (FHA Insured)......... 6.25 12-01-28 3,913,789
3,865 St. Louis Park Multifamily Westwind Apartments Housing
(GNMA Backed)................................................. 5.75 01-01-29 3,792,879
1,848 St. Louis Park Single Family (GNMA Backed)....................... 7.25 04-20-23 1,951,876
1,000 St. Paul Housing and Redevelopment Agency Como Lake Project
(FHA Insured)................................................. 7.01(i) 03-01-26 930,000
71 St. Paul Housing and Redevelopment Agency Single Family
Mortgage (FNMA Backed)........................................ 6.90 12-01-11 74,973
1,735 St. Paul Housing and Redevelopment Agency Single Family
Mortgage (FNMA Backed)........................................ 6.90 12-01-21 1,811,323
2,130 Wadena Housing and Redevelopment Agency Humphrey
Manor -Section 8.............................................. 6.00 02-01-19 2,079,519
1,100 Wells Housing and Redevelopment Agency Broadway Apartment
Project -Section 8........................................... 7.00 01-01-19 1,155,506
2,050 Willmar Housing and Redevelopment Agency Highland
Apartments -Section 8......................................... 5.85 06-01-19 2,000,411
----------
67,640,960
----------
EDUCATION (2.9%):
------------------------------------------------------------------------------------------------------
$ 1,000 Minnesota Higher Education Augsburg College Series 4F1........... 6.25% 05-01-23 $1,009,580
4,000 Minnesota Higher Education Carleton College...................... 5.75 11-01-12 4,086,440
1,250 Minnesota Higher Education Facilities Revenue-Hamline............ 6.00 10-01-12 1,271,050
1,000 Minnesota Higher Education Facilities Revenue-Hamline............ 6.00 10-01-16 1,010,460
1,000 Minnesota Higher Education St. Benedicts College................. 6.20 03-01-16 1,016,650
1,000 Minnesota Higher Education St. Thomas University Series R2....... 5.60 09-01-14 1,000,600
1,540 St. Paul HRA St. Paul Academy Series 1993 ....................... 5.45 10-01-23 1,449,171
2,000 University of Minnesota Series A................................. 5.50(l) 07-01-21 1,958,640
----------
12,802,591
----------
CERTIFICATES OF PARTICIPATION (0.4%):
------------------------------------------------------------------------------------------------------
1,764 West St. Paul Commercial Mortgage (K-Mart Lessee)................ 7.00 (j) 11-01-07 1,814,742
-----------
OTHER REVENUE (1.7%):
------------------------------------------------------------------------------------------------------
5,750 Minneapolis Community Development Agency Zero Coupon
(MBIA Insured)................................................ 6.70(g) 09-01-09 2,977,350
855 Minneapolis Community Development Agency Common Bond Fund........ 7.95 12-01-11 923,981
795 Minneapolis Community Development Agency Common Bond Fund........ 7.40 12-01-21 833,772
510 Minneapolis Community Development Agency Common Bond Fund
1991-4 Opportunity Workshop Project........................... 7.13 12-01-05 547,011
1,000 Seaway Port Authority Rfdg. Series 93A for Cargill, Inc.......... 5.75 12-01-16 975,650
1,120 St. Louis Park Refunding Revenue G & K Partner, Methodist
Hospital Guaranteed........................................... 7.25 06-01-13 1,189,866
---------
7,447,630
---------
TOTAL INVESTMENTS IN SECURITIES (cost: $414,868,560) (f) $ 435,206,282
=============
</TABLE>
See accompanying notes to investments in securities.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA INSURED FUND
INVESTMENTS IN SECURITIES DECEMBER 31, 1996
- -------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
MINNESOTA MUNICIPAL BONDS (98.2%):
ESCROWED WITH U.S. GOVERNMENT BONDS (24.2%):
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 1,065 Brainerd Independent School District #181 (FGIC Insured)......... 7.00% 06-01-01 $ 1,170,211
700 Centennial Independent School District #12 (FSA Insured)......... 7.15 02-01-00 756,553
200 Centennial Independent School District #12 (FSA Insured)......... 7.10 02-01-00 215,874
9,000 Dakota, Washington & Anoka Single Family Housing
(GNMA Insured)................................................ 8.45(e) 09-01-19 12,082,950
14,115 Dakota & Washington Counties HRA Single Family Mortgage
Revenue (GNMA Insured)........................................ 8.38(e) 09-01-21 19,010,364
405 Dakota & Washington Counties HRA (MBIA Insured).................. 8.15(e) 09-01-16 520,777
500 Delano Independent School District #879 (AMBAC Insured).......... 7.25 02-01-01 550,590
1,060 Duluth EDA Healthcare-Duluth Clinic (AMBAC Insured).............. 6.30 11-01-04 1,165,459
200 Elk River Independent School District #728 (FSA Insured)......... 7.00 02-01-00 214,414
1,165 Elk River Independent School District #728 (FSA Insured)......... 6.30 02-01-02 1,253,598
450 Lake of the Woods Independent School District #390
(AMBAC Insured)............................................... 7.35 02-01-99 477,887
5,935 Maplewood Independent School District #622 (MBIA Insured)........ 7.10 02-01-05 6,834,805
11,525 Maplewood Independent School District #622 (FSA Insured)......... 7.10 02-01-05 13,272,305
760 Minnesota State University System (MBIA Insured)................. 7.40 06-30-99 817,023
510 Mora Series A (AMBAC Insured).................................... 6.85 02-01-10 547,913
520 South Washington County Independent School District #833
(FGIC Insured)................................................ 6.88 06-01-00 559,213
5,460 Southern Minnesota Municipal Power Agency (AMBAC Insured)........ 5.75 07-01-16 5,529,748
500 St. Cloud Hospital Facility Revenue (AMBAC Insured).............. 7.00 07-01-01 559,105
500 St. Cloud Hospital Facility Revenue (AMBAC Insured)............ 6.75 07-01-01 554,075
250 St. Francis Independent School District #15 (FGIC Insured)....... 7.60 02-01-98 258,840
500 St. Louis Park Methodist Hospital (AMBAC Insured)................ 7.25 07-01-00 554,865
300 St. Louis Park Multifamily Housing Community Housing Service
Revenue (FHA Insured)......................................... 7.38 06-01-97 310,101
2,550 St. Michael-Albertville Independent School District
(AMBAC Insured)............................................... 7.25 02-01-98 2,626,500
1,000 Stillwater Independent School District #834 (FGIC Insured)....... 6.75 02-01-99 1,047,170
500 Warroad Independent School District #690 (AMBAC Insured)......... 6.85 02-01-00 534,940
500 Washington County HRA Jail Facilities (MBIA Insured)............ 7.00 02-01-02 553,690
2,000 Western Minnesota Municipal Power Agency, Escrowed to Maturity... 6.60 01-01-10 2,239,840
530 Western Minnesota Municipal Power Agency (MBIA Insured).......... 9.75 01-01-16 793,346
1,000 Wright County (FSA Insured)...................................... 7.20(e) 12-01-99 1,077,160
----------
76,089,316
----------
GENERAL OBLIGATION (32.2%):
------------------------------------------------------------------------------------------------------
1,575 Alexandria Independent School District #206 (MBIA Insured)....... 6.30 02-01-11 1,669,154
1,675 Alexandria Independent School District #206 (MBIA Insured)....... 6.30 02-01-12 1,770,659
1,775 Alexandria Independent School District #206 (MBIA Insured)....... 6.30 02-01-13 1,874,009
1,030 Anoka-Hennepin Independent School District #11 Series C
(FGIC Insured)................................................ 5.00% 02-01-09 1,008,957
1,000 Anoka-Hennepin Independent School District #11 Series C
(FGIC Insured)................................................ 5.10 02-01-11 977,390
8,045 Anoka County (FGIC Insured)...................................... 5.90 02-01-11 8,281,925
500 Becker Wastewater Treatment Facility Series A (MBIA Insured)..... 5.95 02-01-14 513,305
6,300 Becker (MBIA Insured) ........................................... 6.25(e) 08-01-15 6,604,920
2,000 Big Lake Independent School District #727 (AMBAC Insured)........ 5.70 02-01-13 2,019,600
1,030 Buffalo Independent School District #887 (FSA Insured)........... 6.10 02-01-15 1,069,274
515 Carver County HRA Jail Facility (MBIA Insured)................... 6.40 02-01-10 544,082
550 Carver County HRA Jail Facility (MBIA Insured)................... 6.40 02-01-11 580,558
585 Carver County HRA Jail Facility (MBIA Insured)................... 6.40 02-01-12 616,169
625 Carver County HRA Jail Facility (MBIA Insured)................... 6.40 02-01-13 657,594
670 Carver County HRA Jail Facility (MBIA Insured)................... 6.40 02-01-14 704,177
545 Cass Lake Independent School District #115 (FSA Insured)......... 5.00 02-01-16 515,499
1,135 Dakota County (AMBAC Insured).................................... 6.40 02-01-08 1,190,331
1,000 Dakota County (AMBAC Insured).................................... 6.45 02-01-09 1,050,000
2,500 Dakota County (AMBAC Insured).................................... 6.45 02-01-10 2,625,000
1,000 Duluth Independent School District #709 Series A (FSA Insured)... 5.20 02-01-11 981,390
1,125 Eden Prairie Independent School District #272, Inverse Floater
(MBIA Insured)................................................ 5.62(m) 02-01-15 1,049,164
1,000 Eden Prairie Independent School District #272, Inverse Floater
(MBIA Insured)................................................ 5.62(m) 02-01-14 919,130
2,500 Eden Prairie Independent School District #272 (FGIC Insured)..... 5.85 02-01-13 2,542,550
4,200 Eden Prairie Independent School District #272 (FGIC Insured)..... 5.65 02-01-13 4,237,338
3,950 Elk River Independent School District #728 Series 92 B
(AMBAC Insured)............................................... 6.00 02-01-09 4,133,398
230 Ellendale-Geneva Independent School District #762
(AMBAC Insured)............................................... 6.00 02-01-10 240,069
245 Ellendale-Geneva Independent School District #762
(AMBAC Insured)............................................... 6.00 02-01-11 255,339
265 Ellendale-Geneva Independent School District #762
(AMBAC Insured)............................................... 6.00 02-01-12 275,134
280 Ellendale-Geneva Independent School District #762
(AMBAC Insured).............................................. 6.00 02-01-13 290,150
300 Ellendale-Geneva Independent School District #762
(AMBAC Insured)............................................... 6.00 02-01-14 310,293
320 Ellendale-Geneva Independent School District #762
(AMBAC Insured).............................................. 6.00 02-01-15 329,642
850 Farmington Independent School District #192 (MBIA Insured)....... 6.80 02-01-11 901,178
1,800 Hennepin County (MBIA Insured)................................... 5.75 10-01-10 1,857,600
1,900 Hopkins Independent School District #270 (MBIA Insured).......... 4.80 02-01-10 1,806,007
2,500 Hopkins Independent School District #270 (MBIA Insured).......... 4.85 02-01-12 2,348,300
3,875 Hopkins Independent School District #270 (MBIA Insured).......... 4.88 02-01-14 3,607,703
1,100 Lakeville Independent School District (FGIC Insured)............. 5.40 02-01-13 1,086,580
475 Moorhead Independent School District #152 (AMBAC Insured)........ 5.90% 02-01-10 487,383
505 Moorhead Independent School District #152 (AMBAC Insured)........ 5.90 02-01-11 517,236
540 Moorhead Independent School District #152 (AMBAC Insured)........ 5.90 02-01-12 551,497
575 Moorhead Independent School District #152 (AMBAC Insured)........ 6.00 02-01-13 589,680
750 Mora Series A (AMBAC Insured).................................... 5.13 02-01-11 738,308
965 North Branch Independent School District #138, Inverse Floater
(FGIC Insured)................................................ 6.37(m) 02-01-11 978,037
265 Perham Independent School District #549 (FSA Insured)............ 5.25 02-01-10 263,259
295 Perham Independent School District #549 (FSA Insured)............ 5.30 02-01-11 292,967
1,000 Prior Lake Independent School District #719, Inverse Floater
(FGIC Insured)................................................ 5.62(m) 02-01-14 932,590
500 Roseau Independent School District #682 (AMBAC Insured).......... 7.00 02-01-16 532,500
1,860 Rosemount Independent School District #196 Zero Coupon
(FSA Insured)................................................. 5.80(g) 04-01-09 984,200
2,240 Rosemount Independent School District #196 Series B Zero Coupon
(FSA Insured)................................................. 5.85(g) 04-01-10 1,110,794
625 South St. Paul Independent School District #6 (FGIC Insured)..... 6.25 02-01-10 644,800
500 South St. Paul Independent School District #6 (FGIC Insured)..... 6.45 02-01-11 518,355
300 South St. Paul Independent School District #6 (FGIC Insured)..... 6.45 02-01-12 310,584
1,430 South Washington County Independent School District #833
(FGIC Insured)................................................ 6.13 06-01-09 1,487,071
2,720 South Washington County Independent School District #833
(FGIC Insured)................................................ 6.13 06-01-11 2,822,571
2,175 Spring Lake Park Independent School District #16, Inverse Floater
(MBIA Insured)............................................... 5.87(m) 02-01-14 2,088,392
1,000 St. Cloud Independent School District #742 (FGIC Insured)....... 6.05 02-01-09 1,049,010
1,845 St. Francis Independent School District #15 (FGIC Insured)....... 5.90 04-01-10 1,914,852
2,995 Stillwater Independent School District #834 (FGIC Insured)....... 5.50 02-01-10 3,007,998
600 Waconia Independent School District #110 Series A (FSA Insured).. 5.15 02-01-08 600,750
3,960 Warroad Independent School District #690 (AMBAC Insured)......... 5.20 02-01-13 3,893,393
400 Western Lake Superior Series A (MBIA Insured).................... 6.00(e) 10-01-08 412,000
425 Western Lake Superior Series A (MBIA Insured).................... 6.10(e) 10-01-09 437,219
450 Western Lake Superior Series A (MBIA Insured).................... 6.20(e) 10-01-10 464,625
475 Western Lake Superior Series A (MBIA Insured).................... 6.20(e) 10-01-11 488,656
7,625 White Bear Lake Independent School District #624 (FSA Insured)... 5.30 02-01-11 7,520,690
4,100 Willmar Independent School District #347 (AMBAC Insured)......... 6.25 02-01-15 4,269,125
-----------
101,352,110
-----------
UTILITIES (11.9%):
------------------------------------------------------------------------------------------------------
5,250 Bass Brook Pollution Control Revenue for Minnesota
Power & Light Company (MBIA Insured).......................... 6.00 07-01-22 5,349,960
500 Marshall Utility Revenue (FSA Insured)........................... 6.45 07-01-10 535,170
100 Marshall Utility Revenue (FSA Insured)........................... 6.45 07-01-11 106,920
500 Marshall Utility Revenue (FSA Insured)........................... 6.50 07-01-12 534,545
500 Marshall Utility Revenue (FSA Insured)........................... 6.50 07-01-13 533,835
300 Marshall Utility Revenue (FSA Insured)........................... 5.25 01-01-10 296,937
325 Marshall Utility Revenue (FSA Insured)........................... 5.25 01-01-11 319,940
735 Moorhead Public Utilities (MBIA Insured)......................... 6.25 11-01-12 772,132
4,200 Northern Minnesota Municipal Power Agency Series B
(AMBAC Insured)............................................... 5.50% 01-01-18 4,145,946
700 Northern Municipal Power Agency Electric System Revenue
(AMBAC Insured)............................................... 5.90 01-01-08 737,905
750 Shakopee Public Utilities Commission Revenue (AMBAC Insured)..... 5.60 08-01-18 745,973
1,000 Southern Minnesota Municipal Power Agency Revenue
(MBIA Insured)................................................ 4.75 01-01-16 899,230
1,330 Southern Minnesota Municipal Power Agency (AMBAC Insured)........ 5.75 01-01-18 1,337,169
4,570 Southern Minnesota Municipal Power Agency (FGIC Insured)......... 5.75 01-01-18 4,594,632
750 Southern Minnesota Municipal Power Agency, Inverse Floater
(FGIC Insured)................................................ 6.87(m) 01-01-18 753,503
2,000 St. Paul Sewer Revenue (AMBAC Insured)........................... 5.60 12-01-08 2,058,980
300 Western Municipal Power Agency Series A (MBIA Insured)........... 6.88 01-01-09 305,955
1,025 Western Municipal Power Agency (AMBAC Insured)................... 5.50 01-01-11 1,026,251
2,000 Western Municipal Power Agency (AMBAC Insured)................... 5.50 01-01-12 1,993,920
10,490 Western Municipal Power Agency (AMBAC Insured)................... 5.50 01-01-13 10,443,528
----------
37,492,431
----------
INDUSTRIAL (0.5%):
------------------------------------------------------------------------------------------------------
1,500 Minnesota Public Facility Authority Water Pollution Control
(MBIA Insured)................................................ 6.50 03-01-14 1,607,235
-----------
HEALTH CARE (18.2%):
------------------------------------------------------------------------------------------------------
1,250 Bloomington Masonic Home Care Center (AMBAC Insured)............. 5.90 07-01-09 1,298,025
1,500 Brainerd Benedictine Health Care Systems (Connie Lee Insured).... 6.00 02-15-12 1,547,445
2,000 Brainerd Benedictine Health Care Systems(Connie Lee Insured)..... 6.00 02-15-20 2,029,180
1,630 Detroit Lakes Benedictine Health (Connie Lee Insured)............ 6.00 02-15-12 1,689,642
2,135 Detroit Lakes Benedictine Health (Connie Lee Insured)............ 6.00 02-15-19 2,180,134
2,690 Duluth EDA HealthCare-Duluth Clinic (AMBAC Insured) ............. 6.30 11-01-22 2,827,109
1,300 Duluth EDA Health Care Facility Revenue (Connie Lee Insured)..... 6.00 02-15-20 1,325,714
5,000 Duluth EDA HealthCare Revenue, Inverse Floater
(Connie Lee Insured).......................................... 7.37(m) 02-15-17 5,263,700
3,335 Duluth St. Luke's Hospital (Connie Lee Insured).................. 6.40 05-01-10 3,553,309
500 Duluth St. Luke's Hospital (Connie Lee Insured).................. 6.40 05-01-18 526,920
3,000 Minneapolis Fairview Hospital Series 91B (MBIA Insured).......... 6.50 01-01-11 3,206,220
3,750 Minneapolis Fairview Hospital Series 93A (MBIA Insured).......... 5.25 11-15-19 3,553,912
2,370 Minneapolis HRA HealthOne (MBIA Insured)......................... 7.40 08-15-11 2,621,813
600 Minneapolis HRA HealthOne (MBIA Insured)......................... 7.40 08-15-05 663,750
13,240 Minneapolis/Saint Paul Healthspan Series 93A (AMBAC Insured)..... 5.00 11-15-13 12,469,167
1,005 Minneapolis/St. Paul HRA Childrens Hospital (FSA Insured)........ 5.70 08-15-16 1,006,518
1,310 Minneapolis/St. Paul HRA Health Care, Inverse Floater
(FSA Insured)................................................. 6.77(m) 08-15-16 1,318,096
5,400 Robbinsdale North Memorial Medical (AMBAC Insured)............... 5.50 05-15-23 5,245,992
435 Robbinsdale Hospital Revenue Series B (AMBAC Insured)............ 5.30 05-15-06 440,951
750 Robbinsdale Hospital Revenue Series B (AMBAC Insured)............ 5.30 05-15-07 755,483
150 Robbinsdale Hospital Revenue Series A (AMBAC Insured)............ 5.30 05-15-07 151,097
400 St. Cloud Hospital Revenue Series C (AMBAC Insured).............. 6.75% 07-01-11 443,260
145 St. Cloud Nursing Home Revenue Series A (AMBAC Insured).......... 5.35 10-01-16 140,437
2,500 St. Louis Park Healthcare, Inverse Floater (AMBAC Insured)....... 5.77(m) 07-01-23 2,225,525
1,000 St. Paul Ramsey Medical (AMBAC Insured).......................... 5.50 05-15-13 991,200
----------
57,474,599
----------
HOUSING (10.1%):
------------------------------------------------------------------------------------------------------
3,257 Chaska Waters Edge Multifamily Revenue (GNMA Insured)............ 7.30 01-20-30 3,561,823
6,450 Dakota County HRA Single Family Mortgage Revenue
(FNMA Insured)................................................ 6.70 10-01-17 6,700,002
200 Dakota, Washington and Stearns Counties HRA Single Family
Mortgage Revenue (MBIA Insured).............................. 7.85 12-01-30 211,638
3,790 Hopkins Multi Family Housing-Auburn Apartments
(GNMA Insured)................................................ 8.05 06-20-31 4,349,669
80 Minneapolis and St. Paul Housing Finance Board Housing Project
Phase V (GNMA Collateral) .................................... 8.88(e) 11-01-18 82,404
1,300 Minneapolis and St. Paul Housing Finance Board Housing Project
Phase IX (GNMA Collateral).................................... 7.25(e) 08-01-21 1,365,520
870 Minneapolis and St. Paul Housing Finance Board Housing Project
Phase IX (GNMA Collateral).................................... 7.30(e) 08-01-31 911,038
170 Minneapolis and St. Paul Housing Finance Board Single Family
Mortgage Revenue (GNMA Backed)................................ 8.13(e) 12-01-14 179,692
130 Minneapolis and St. Paul Housing Finance Board Single Family
Mortgage Revenue (GNMA Backed)................................ 8.30 08-01-21 135,958
2,480 Minnesota Housing Finance Agency Single Family Housing Rental
(AMBAC Insured)............................................... 5.95 02-01-15 2,502,295
400 Minnesota Housing Finance Agency Single Family Housing
Series C (MBIA Insured)....................................... 9.00(e)(h) 08-01-18 413,640
170 Minnesota Housing Finance Agency Single Family Mortgage
Revenue Series 1988C (MBIA Insured)........................... 8.50(e)(h) 07-01-19 176,718
330 Minnesota Housing Finance Agency Single Family Mortgage
Revenue (AMBAC Insured)....................................... 7.95(e) 07-01-22 352,117
1,435 Minnesota Housing Finance Agency Single Family Mortgage
Revenue (AMBAC Insured)....................................... 7.45(e) 07-01-22 1,514,772
510 Minnesota Housing Finance Agency Single Family Mortgage
Revenue (AMBAC Insured)....................................... 7.05(e) 07-01-22 530,104
80 Minnesota Housing Finance Agency Single Family Mortgage
Revenue Series A (FHA Insured)................................ 8.38(h) 02-01-15 83,816
150 Minnesota Housing Finance Agency Single Family Mortgage
Revenue Series B (MBIA Insured)............................... 7.25(h) 07-01-06 153,006
65 Minnesota Housing Finance Agency Single Family Mortgage
Revenue Series A (FHA Insured)................................ 8.50(h) 02-01-17 67,062
500 Minnetonka Multifamily Housing Cedar Hills Project (FHA Insured). 7.50(h) 12-01-27 520,580
400 Minnetonka Multifamily Housing Cedar Hills Project (FHA Insured). 7.50(h)% 12-01-17 416,732
4,000 St. Paul HRA Multifamily Housing (FNMA Backed)................... 6.60 10-01-12 4,158,880
2,410 South St. Paul HRA Single Family Mortgage Series 1993
(FNMA Insured)................................................ 5.75 09-01-20 2,379,128
1,055 White Bear Lake Multifamily Housing Lake Square (FHA Insured).... 5.88 02-01-15 1,063,735
----------
31,830,329
----------
OTHER REVENUE (0.4%):
------------------------------------------------------------------------------------------------------
1,140 Minneapolis Tax Increment Revenue (MBIA Insured)................. 7.00 03-01-03 1,172,775
---------
CERTIFICATES OF PARTICIPATION (0.7%):
------------------------------------------------------------------------------------------------------
2,000 Stearns County HRA Courthouse Project (AMBAC Insured)............ 7.00 02-01-11 2,130,000
---------
TOTAL INVESTMENTS IN SECURITIES (cost: $294,856,518) (f) 309,148,795
============
</TABLE>
See accompanying notes to investments in securities.
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA LIMITED TERM TAX FREE FUND
INVESTMENTS IN SECURITIES (CONTINUED) DECEMBER 31, 1996
- -------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (d) RATE MATURITY VALUE (a)
- -------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
MINNESOTA MUNICIPAL BONDS (101.4%):
ESCROWED WITH U.S. GOVERNMENT BONDS (51.2%):
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1,205 Austin Independent School District #492 (MBIA Insured)........... 6.88% 02-01-01 $1,307,027
3,015 Braham Independent School District #314 (AMBAC Insured).......... 6.30 02-01-01 3,214,653
250 Duluth EDA St. Mary's Hospital................................... 7.80 02-15-97 251,107
250 Duluth EDA St. Mary's Hospital................................... 7.90 02-15-98 260,092
150 Duluth EDA St. Mary's Hospital................................... 7.90 02-15-99 160,794
615 Eden Valley Watkins Independent School District #463
(FSA Insured)................................................. 6.60 02-01-02 670,030
250 Eden Valley Watkins Independent School District #463
(FSA Insured)................................................ 6.55 02-01-02 271,810
2,570 Mankato Independent School District #77 (FSA Insured)........... 6.35 02-01-02 2,762,801
1,410 Minneapolis Series C ............................................ 6.70 03-01-02(c) 1,549,787
400 Minneapolis/Saint Paul HealthOne Series C........................ 7.45 08-15-99 430,852
325 Minneapolis/Saint Paul HealthOne Series B........................ 7.55 08-15-00 358,680
4,000 Minnesota State.................................................. 6.25 08-01-02 4,337,200
800 Olmsted County................................................... 6.85 02-01-01 871,648
900 Olmsted County................................................... 6.90 02-01-01 982,260
950 Olmsted County................................................... 6.95 02-01-01 1,038,587
1,500 Rush City Independent School District #139 (AMBAC Insured)....... 6.30 02-01-01 1,599,330
2,740 St. Cloud Hospital Facility Revenue (AMBAC Insured).............. 7.00 07-01-01 3,063,895
3,500 St. Louis Park Methodist Hospital (AMBAC Insured)................ 7.25 07-01-00 3,884,055
3,000 Waconia Independent School District #110 (FGIC Insured).......... 6.40 02-01-00 3,165,120
4,000 Washington County Jail (MBIA Insured)............................ 7.00 02-01-02 4,429,520
----------
34,609,248
----------
GENERAL OBLIGATION (3.7%):
------------------------------------------------------------------------------------------------------
1,000 Eden Prairie Independent School District #272.................... 5.25 02-01-02 1,029,970
1,175 Olmsted County Resource Recovery Series A........................ 5.90 02-01-05 1,229,273
225 Western Lake Superior Sanitation District........................ 6.10 10-01-00 230,891
----------
2,490,134
----------
UTILITIES (5.2%):
------------------------------------------------------------------------------------------------------
2,500 Eveleth IDR for Minnesota Power & Light Company.................. 6.13 01-01-04 2,623,550
860 Northern Minnesota Municipal Power Agency........................ 7.20 01-01-99 905,812
----------
3,529,362
----------
INDUSTRIAL (16.6%):
------------------------------------------------------------------------------------------------------
1,000 Brooklyn Center CDR Brookdale Association (NWNL Guaranteed)...... 5.70 06-01-01 1,000,900
260 Duluth Gross Revenue Bond-Duluth Entertainment Project........... 5.75 12-01-97 262,002
275 Duluth Gross Revenue Bond-Duluth Entertainment Project........... 6.00 12-01-98 279,502
1,250 Duluth Gross Revenue Bond-Duluth Entertainment Project........... 7.00 12-01-03 1,345,263
250 Duluth Gross Revenue Rec. Facility Duluth Entertainment.......... 7.30 12-01-06 273,827
3,520 Metropolitan Council HHH Metrodome Sports Facility Revenue 1992 6.00 10-01-09 3,615,955
1,720 Minnesota Public Facilities Authority Revenue Series A........... 6.55 03-01-03 1,874,508
300 St. Paul HRA Minnesota Public Radio, (LOC: First Bank)........... 6.40% 06-01-98 308,541
100 St. Paul HRA Minnesota Public Radio, (LOC: First Bank)........... 6.60 06-01-99 104,843
2,000 St. Paul Minnesota CDR Fort Rd Medical (Asset Guaranty).......... 7.50 09-01-02 2,124,580
----------
11,189,921
----------
HEALTH CARE (9.2%):
------------------------------------------------------------------------------------------------------
100 Fergus Falls Health Care Facility Broer Memorial Home Project.... 6.20 11-01-05 100,124
200 Fergus Falls Health Care Facility Broer Memorial Home Project.... 6.30 11-01-06 200,268
200 Fergus Falls Health Care Facility Broer Memorial Home Project.... 6.40 11-01-07 200,932
240 Fergus Falls Health Care Facility Broer Memorial Home Project.... 6.60 11-01-09 240,485
260 Fergus Falls Health Care Facility Broer Memorial Home Project.... 6.70 11-01-10 261,638
1,000 Maplewood Healthcare Facility Healtheast......................... 5.70 11-15-02 1,003,670
2,200 Maplewood Healthcare Facility Healtheast......................... 5.95 11-15-06 2,214,058
905 Minneapolis Health Care Facility Jones-Harrison Project.......... 8.35 09-01-21 978,359
200 Rochester Nursing Home & Multifamily Housing Revenue Samaritan
Bethany, Inc................................................. 5.60 05-01-02 199,854
250 Rochester Nursing Home & Multifamily Housing Revenue Samaritan
Bethany, Inc.................................................. 5.85 05-01-03 251,120
300 Rochester Nursing Home & Multifamily Housing Revenue Samaritan
Bethany, Inc.................................................. 6.00 05-01-04 301,734
250 Rochester Nursing Home & Multifamily Housing Revenue Samaritan
Bethany, Inc.................................................. 6.10 05-01-05 251,440
---------
6,203,682
---------
HOUSING (1.3%):
------------------------------------------------------------------------------------------------------
580 Burnsville Multifamily Housing Revenue Burnsville Apts Project,
(LOC: TCF).................................................... 7.00 09-01-99(c) 585,800
215 Mankato Multifamily Housing Hi Hills (Asset Guaranty)............ 7.75 10-01-97(c) 215,720
70 Minnesota HFA Single Family Mortgage Revenue Series C............ 6.30 01-01-99 72,086
-------
873,606
-------
EDUCATION (8.3%):
------------------------------------------------------------------------------------------------------
3,700 Minnesota Higher Education Facility Authority Augsburg
Series 4F2.................................................... 5.75 05-01-16 3,738,628
495 Minnesota Higher Education Facility Authority Hamline............ 5.35 10-01-04 500,298
1,400 University of Minnesota ......................................... 4.80 08-15-03 1,401,750
---------
5,640,676
---------
CERTIFICATES OF PARTICIPATION (3.7%):
------------------------------------------------------------------------------------------------------
245 Beltrami County Housing and Redevelopment Authority Revenue...... 5.60 02-01-05 243,922
315 Beltrami County Housing and Redevelopment Authority Revenue...... 5.70 02-01-06 313,488
335 Beltrami County Housing and Redevelopment Authority Revenue...... 5.80 02-01-07 334,377
355 Beltrami County Housing and Redevelopment Authority Revenue...... 5.90 02-01-08 354,297
380 Beltrami County Housing and Redevelopment Authority Revenue ..... 6.00% 02-01-09 378,241
405 Beltrami County Housing and Redevelopment Authority Revenue...... 6.00 02-01-10 400,148
430 Beltrami County Housing and Redevelopment Authority Revenue...... 6.10 02-01-11 426,139
32 Red Wing Pottery Project......................................... 7.75(k) 12-15-97 31,882
---------
2,482,494
---------
OTHER REVENUE (2.2%):
------------------------------------------------------------------------------------------------------
225 Minneapolis CDA - Common Bond Fund............................... 7.90 06-01-97 228,001
1,185 Richfield Shoppes CDR-Richfield Shoppes Project.................. 7.50(b) 10-01-04 1,254,619
---------
1,482,620
---------
TOTAL INVESTMENTS IN SECURITIES (cost: $66,062,034) (f) $68,501,743
===========
</TABLE>
See accompanying notes to investments in securities.
VOYAGEUR MINNESOTA HIGH YIELD FUND
VOYAGEUR MINNESOTA TAX FREE FUND
VOYAGEUR MINNESOTA INSURED FUND
VOYAGEUR MINNESOTA LIMITED TERM TAX FREE FUND
NOTES TO INVESTMENTS IN SECURITIES
- --------------------------------------------------------------------------------
(a) Securities are valued by procedures described in note 1 to the financial
statements.
(b) These securities have been identified by portfolio management as illiquid.
The total of such securities is equal to 6.0%, 1.2% and 1.9% of total net
assets for Minnesota High Yield Fund, Minnesota Tax Free Fund and
Minnesota Limited Term Tax Free Fund, respectively. Such determinations
are reviewed from time to time by Fund management and are subject to
change.
(c) The maturity date for this issue represents a mandatory put or date on
which, in the opinion of the Fund's investment advisor, the issue is
likely to be called.
(d) Investments in bonds, by rating category (unaudited) as a percentage of
total bonds, are as follows:
<TABLE>
<CAPTION>
Non-
investment Non-
Aaa/AAA Aa/AA A/A Baa/BBB grade rated Total
------- ----- --- ------- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Minnesota High Yield Fund............. 9% 7% 16% 17% 10% 41% 100%
Minnesota Tax Free Fund............... 54% 12% 15% 9% -- 10% 100%
Minnesota Insured Fund ............... 99% 1% -- -- -- -- 100%
Minnesota Limited Term Tax Free Fund.. 53% 10% 9% 18% -- 10% 100%
</TABLE>
(e) These securities are subject to the Alternative Minimum Tax. As of
December 31, 1996, the aggregate market value of securities subject to the
Alternative Minimum Tax is equal to 14.8% of total net assets for
Minnesota Insured Fund and 13.6% of total net assets for Minnesota High
Yield Fund.
(f) Also represents the cost of securities for federal income tax purposes for
Minnesota High Yield Fund, Minnesota Tax Free Fund and Minnesota Limited
Term Tax Free Fund. The cost of securities for federal income tax purposes
for Minnesota Insured Fund is $295,300,017. The aggregate gross unrealized
appreciation and depreciation in securities based on these costs are as
follows:
<TABLE>
<CAPTION>
Gross Gross Net
Unrealized Unrealized Unrealized
Appreciation Depreciation Appreciation
------------ ------------ ------------
<S> <C> <C> <C>
Minnesota High Yield Fund................... $104,091 $(15,230) $88,861
Minnesota Tax Free Fund..................... $20,707,905 $(370,183) $20,337,722
Minnesota Insured Fund...................... $14,143,863 $(295,085) $13,848,778
Minnesota Limited Term Tax Free Fund........ $2,459,629 $(19,950) $ 2,439,709
</TABLE>
(g) The interest rate disclosed for zero coupon issues represents the
effective yield on the date of acquisition.
(h) Identifies issue covered under portfolio insurance purchased by the Fund.
(i) At December 31, 1996 the principal amount of issue in default amounted to
$1,000,000 for Minnesota Tax Free Fund and is equal to .2% of the Fund's
total net assets. However, this issue is in default as to the timely
receipt of principal but is current as to interest including interest at
the stated rate since the maturity dates. This issue is considered
illiquid and is being valued based on procedures selected in good faith by
the Board of Directors.
(j) Minnesota Tax Free Fund entered into the following restricted security
transactions: on September 2, 1986, the Fund purchased $2,148,650 of
original par of West St. Paul Commercial Mortgage (K-Mart) with a cost
basis of $1,891,822, and on April 20, 1994, the Fund purchased $2,200,000
par of Richfield Commercial Development Revenue for Richfield Shoppes with
a cost basis of $2,200,000. These private placements are considered
illiquid and are equal to .96% of total net assets.
(k) Minnesota Limited Term Tax Free Fund entered into the following restricted
security transaction: on October 2, 1985 the Fund purchased $165,531 of
original par of Red Wing Pottery Project with a par value and cost basis
of $31,882 as of December 31, 1996. This private placement is considered
illiquid and is equal to .05% of the Fund's total net assets.
(l) At December 31, 1996, the cost of securities purchased on a when issued
basis was $678,716 for Minnesota High Yield Fund and $1,952,660 for
Minnesota Tax Free Fund.
(m) Inverse floater, represents a security that pays interest at rates that
increase (decrease) with a decline (increase) in a general money market
index. Interest rate disclosed is the rate in effect on December 31, 1996.
As of December 31, 1996, the total of such securities is equal to 5.1% and
4.9% of total net assets for Minnesota Tax Free Fund and Minnesota Insured
Fund, respectively. Inverse floaters are considered illiquid securities.
FEDERAL INCOME TAX INFORMATION
- --------------------------------------------------------------------------------
Information for federal income tax purposes is presented as an aid to
shareholders in reporting the dividend distributions for the year ended December
31, 1996 shown below. Exempt interest dividends are exempt from federal income
tax and should not be included in shareholder's gross income, but need to be
reported on the income tax return for informational purposes. Each shareholder
should consult a tax adviser about reporting this income for state and local
purposes. In January 1997, the Fund separately provided each shareholder with
tax information for calendar year 1996.
<TABLE>
VOYAGEUR MINNESOTA HIGH YIELD FUND
---------------------------------------------------
PER CLASS PER CLASS PER CLASS
A SHARE B SHARE C SHARE
---------------- ---------------- -----------------
PERIOD FROM PERIOD FROM PERIOD FROM
JUNE 4, 1996 JUNE 12, 1996 JUNE 7, 1996
TO DECEMBER 31, TO DECEMBER 31, TO DECEMBER 31,
1996 1996 1996
---------------- ---------------- -----------------
<S> <C> <C> <C>
Net investment income distributions (none qualifying for
corporate dividend received deduction)...................... $.3508 $.2926 $.2976
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA TAX FREE FUND
---------------------------------------------------
PER CLASS PER CLASS PER CLASS
A SHARE B SHARE C SHARE
---------------- ---------------- -----------------
YEAR YEAR YEAR
ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1996 1996
---------------- ---------------- -----------------
<S> <C> <C> <C>
Net investment income distributions (none qualifying for
corporate dividend received deduction)...................... $.6292 $.5596 $.5370
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA INSURED FUND
---------------------------------------------------
PER CLASS PER CLASS PER CLASS
A SHARE B SHARE C SHARE
---------------- ---------------- -----------------
YEAR YEAR YEAR
ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1996 1996
---------------- ---------------- -----------------
<S> <C> <C> <C>
Net investment income distributions (none qualifying for
corporate dividend received deduction)...................... $.5151 $.4503 $.4363
====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR MINNESOTA LIMITED TERM TAX FREE FUND
---------------------------------------------------
PER CLASS PER CLASS PER CLASS
A SHARE B SHARE C SHARE
---------------- ---------------- -----------------
YEAR YEAR YEAR
ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1996 1996
---------------- ---------------- -----------------
<S> <C> <C> <C>
Net investment income distributions (none qualifying for
corproate dividend received deduction)...................... $.5125 $.4449 $.4301
====== ====== ======
</TABLE>
For federal income tax purposes, 100.00%, 99.54%, 99.82%, and 99.98% of the
above net investment income distributions for Voyageur Minnesota High Yield
Fund, Voyageur Minnesota Tax Free Fund, Voyageur Minnesota Insured Fund and
Voyageur Minnesota Limited Term Tax Free Fund, respectively, were derived from
interest exempt from federal income tax.
VOY-MNAR 3/97
