<PAGE>
For Tax-Exempt Income
DELAWARE-VOYAGEUR
Tax-Free Colorado Fund
Tax-Free North Dakota Fund
Tax-Free New Mexico Fund
Tax-Free Utah Fund
1997 Semi-Annual Report
professional management
service and guidance
goals
DRAWING OF AIRPORT
DELAWARE
GROUP
===========
<PAGE>
- --------------------------------------------------------------------------------
JULY 25, 1997
Dear Shareholder:
I AM PLEASED TO PRESENT YOUR FUNDS' FIRST SHAREHOLDER REPORT since the Voyageur
funds joined the Delaware family on April 30, 1997.
On behalf of all of us here in Philadelphia, I welcome you to an
organization of experienced financial professionals dedicated to helping you
reach your investment goals. Delaware has managed municipal bond investments
for more than 20 years and pioneered the concept of single-state, tax-exempt
funds.
IN THE COMING YEARS, WE BELIEVE
IT WILL BECOME MORE IMPORTANT THAN
EVERTO CONSIDER THE IMPACT OF
TAXES ON THE PERFORMANCE OF AN
INVESTMENT PORTFOLIO.
I am delighted to report that during this transition period, each Fund
outperformed the unmanaged Lehman Brothers Municipal Bond Index, as shown on
page 12. Tax-Free Colorado Fund provided especially strong results for the six
months ended June 30, 1997.
We view the municipal bond market's long-term prospects as very
attractive, particularly in a region as dynamic as America's West. Municipal
bond prices have generally been stronger than U.S. Treasuries during 1997,
despite federal tax changes in Washington and a modest tightening of monetary
policy by the Federal Reserve Board.
As our nation's leaders grapple with tax issues and states take on a
greater fiscal responsibility for managing social and public works programs,
we believe it will become more important than
ever to consider the impact of taxes on the performance of an investment
portfolio.
When Delaware offered its first municipal bond fund in 1977, federal
taxpayers were able to take many more deductions on their tax returns than
they can take today. Among these were:
* Interest on student and consumer loans,
* More extensive job-related moving expenses,
* Sales and gasoline taxes; and,
* A portion of dividend income.
In our opinion, the dividends from municipal bond funds and the
tax-free compounding of such income over time has the potential to help
heavily taxed investors reach their financial goals
more quickly.
2
1997 semi-annual report
<PAGE>
On the pages that follow, the Funds' portfolio managers review each
Fund's performance and outline their approaches for the coming months. We look
forward to reporting to you again in 1998 and serving your needs for many years
to come.
Sincerely,
/S/ Wayne A. Stork
- ---------------------------
Wayne A. Stork
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
Your Funds' Portfolio Managers
---------------------- Andrew M. McCullagh Jr. is co-manager
for all four Funds. He has more than 23
years of experience in municipal bond
trading, underwriting and portfolio
[PICTURE] management. He holds a graduate
certificate in public finance from the
University of Michigan and a bachelor's
degree in economics from Washington
College in Maryland.
- -----------------------
ANDREW M. MCCULLAGH JR.
Thor Raarup is co-manager of Tax-Free ----------------------
Utah Fund and Tax-Free New Mexico Fund.
He joined Voyageur Asset Management in
December 1994 as a fixed-income trader
and was named co-manager of the Utah and
New Mexico Funds in September 1996. [PICTURE]
Prior to Voyageur, Mr. Raarup was a
commodity trader at the Minneapolis
Grain Exchange. He holds a bachelor's
degree in financial economics and
history from Gustavus Adolphus College -----------------------
in St. Peter, Minn. THOR RAARUP
Mark D. Schierman is co-manager of
- ----------------------- Tax-Free North Dakota Fund. He joined
Voyageur Asset Management in October
1993 as a fixed-income trader and was
named co-manager of the North Dakota
Fund in September 1996. Prior to
[PICTURE] Voyageur, Mr. Schierman was a
fixed-income trader at First Trust,
N.A.. He holds a bachelor's degree in
business administration from the
University of St. Thomas in St. Paul,
Minn.
- -----------------------
MARK D SCHIERMAN
3
1997 semi-annual report
<PAGE>
PERFORMANCE REVIEW
Delaware-Voyageur's municipal bond funds in four Western states provided
solid total returns during the first half of fiscal 1997 despite substantial
interest rate volatility and renewed efforts in Washington to cut income
taxes.
Nationwide, our country's output of goods and services grew at a
robust pace of 5.9% - the highest rate since 1988 - in the first quarter.
This prompted the Federal Reserve to raise its target for short-term interest
rates by a modest 25 basis points (0.25%) to 5.5% in an effort to forestall
inflation.
As the second calendar quarter of 1997 progressed, the bond market
welcomed news of possible slower U.S. economic growth. Indeed producer prices
- - what companies pay for raw materials and semi-finished goods - have actually
fallen in recent months. By the end of June, long-term U.S. Treasury bonds
yielded 6.78%, compared to more than 7% this past spring.
WE SEEK TO ACHIEVE GOOD
STRUCTURE - A PRUDENT COMBINATION
OF AVERAGE COUPON, CALL DATE AND
EFFECTIVE MATURITY THAT REPRESENT
THE MATHEMATICAL UNDERPINNINGS OF
THE PORTFOLIO.
In managing each Fund's portfolio, we seek to achieve good structure - a
prudent combination of average coupon, call date and effective maturity that
represent the mathematical underpinning of the portfolio. By managing duration
as market conditions warranted, we sought to maximize each Fund's income and
total return potential.
Since December, the change in supply of new municipal bonds in Western
states has varied widely, according to THE BOND BUYER, a trade publication.
Compared to the nation as a whole, each of the four states featured in this
report has historically issued relatively small amounts of new bonds.
NEW BOND SUPPLY IN BILLIONS OF DOLLARS
- ----------------------------------------------------------------------
Six months through June 30
1996 1997 CHANGE
- ----------------------------------------------------------------------
Colorado $1.4 $1.0 -25.8%
North Dakota $0.3 $0.3 +7.0%
New Mexico $0.5 $0.9 +76.6%
Utah $1.4 $0.8 -41.1%
SOURCE: THE BOND BUYER
4
1997 semi-annual report
<PAGE>
TAX-FREE COLORADO FUND
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
- ------------------------------------------------------------------------------
June 30, 1997
Housing 17.3%
Certificates of Participation 3.3%
General Obligation 20.0%
Power Authority 2.0%
Water/Sewer 3.0%
Transportation 11.2%
Higher Education 5.9%
Industrial Development 2.4%
Other Revenue Bonds 14.8%
Hospitals 19.2%
- ----------------------------------------------------------
Average Effective Maturity 12.4 years
Average Effective Duration 8.3 years
Average Quality A+
Thirty-Day Current SEC Yield* 5.05%
*FOR A CLASS SHARES BASED ON SECURITIES AND EXCHANGE COMMISSION GUIDELINES.
SEC YIELDS FOR B AND C CLASSES WERE 4.37% AND 4.38%, RESPECTIVELY.
NONE OF THE INCOME DISTRIBUTED BY TAX-FREE COLORADO FUND FOR THE SIX MONTHS
ENDED JUNE 30, 1997, WAS SUBJECT TO THE ALTERNATIVE MINIMUM TAX.
TAX-FREE COLORADO FUND
STRATEGIC POSITIONING
AND OUTLOOK
Tax-Free Colorado Fund provided a relatively strong total return of +3.85%
for the six months ended June 30, 1997 (for A Class shares at net asset value
with dividends reinvested). The Fund outpaced the unmanaged Lehman Brothers
Municipal Bond Index by some 65 basis points (0.65%), and surpassed the
average of its 19 peers.
We attribute our results to a positioning that sought to capitalize on
declining interest rates. For much of the period, we kept the Fund's duration
(sensitivity to interest rates) longer than that of the index and the average of
19 other Colorado tax-exempt funds as measured by Lipper Analytical Services.
While Tax-Free Colorado Fund has consistently strived to maximize
total return, since December we have taken steps to augment the Fund's yield.
Although the Fund continues to invest primarily in higher rated, investment
grade municipal bonds, during the first half of fiscal 1997 we found an
opportunity to increase our income potential by moving down a notch in
quality. We reduced the average quality of bonds in the portfolio from AA to A+.
The Fund benefited from this slight shift because moderate quality,
investment grade bonds have generally outperformed the highest rated bonds in
1997, especially since the spring. By purchasing a limited quantity of bonds
rated BBB+, BBB- and some unrated credits, the Fund benefited from both
higher bond prices and increased yield with only a modest increase in credit
risk.
Since December, we have been attempting to improve the Fund's dividend
yield by selling lower yielding bonds with short call periods and replacing them
with higher yielding bonds with longer call protection periods. Colorado's
strong economy permitted us to make these swaps on favorable terms.
5
1997 semi-annual report
<PAGE>
In Denver and other parts of the state, we believe strength in
non-residential construction, high technology industries and financial services
should continue to fuel Colorado's economic growth for the next few years.
Economists anticipate job growth will remain steady in 1997 while the state's
unemployment is expected to fall to about 3.5% by year's end, well below the
national average.
Consumer price inflation is somewhat higher in Colorado than in other
states. Prices are rising at a 4% annual pace compared to about 3% nationwide,
according to regional labor officials. However, this is offset by 7% annual
growth in personal income - a rate that has been and is expected to remain much
higher than the national average. Colorado residents' per capita income ranks
13th among states.
We believe Colorado's key economic strength going into the 21st
Century will be its diversity. A hub for communications and transportation,
the state also has a strong manufacturing base, health care industry and
tourism sector. For the fourth straight year, Colorado received the highest
grade in the nation for economic performance in the Corporation for
Enterprise Development's 1996 Report Card for the state, an objective rating
based on economic performance.
In our opinion, this bodes well for the credit quality of the state's
bond market. According to the Cato Institute, an independent tax watchdog,
the state's finances are helped by constitutional caps on spending and "by
one of the nation's most anti-tax electorates."
TAX-FREE NORTH DAKOTA FUND
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
- ------------------------------------------------------------------------------
June 30, 1997
Housing 26.5%
General Obligation 6.3%
Power Authority 14.2%
School District 2.4%
Pre-Refunded Bonds 1.0%
Transportation 4.6%
Higher Education 3.3%
Industrial Development 1.7%
Other Revenue Bonds 11.2%
Cash 3.8%
Hospitals 25.0%
- ------------------------------------------------------------------------------
Average Effective Maturity 11.7 years
Average Effective Duration 7.4 years
Average Quality AA
Thirty-Day Current SEC Yield* 4.53%
* FOR A CLASS SHARES BASED ON SECURITIES AND EXCHANGE
COMMISSION GUIDELINES. SEC YIELDS FOR B AND C
CLASSES WERE 4.24% AND 3.78% RESPECTIVELY.
APPROXIMATELY 15.2% OF THE INCOME GENERATED BY TAX-FREE NORTH DAKOTA FUND FOR
THE SIX MONTHS ENDED JUNE 30, 1997, WAS SUBJECT TO THE ALTERNATIVE MINIMUM
TAX.
6
1997 semi-annual report
<PAGE>
TAX-FREE NORTH
DAKOTA FUND STRATEGIC
POSITIONING AND OUTLOOK
For the six months ended June 30, 1997, Tax-Free North Dakota Fund provided a
total return of +3.44% (for A Class shares at net asset value with dividends
reinvested).
We did well relative to our benchmark because we positioned the Fund for
a decline in interest rates and focused on high-quality securities.Approximately
99% of the bonds in the Fund's portfolio were investment grade as of mid-year.
The supply of new bonds issued in North Dakota is fairly limited,
reflecting the state's relatively small population - about 642,000 people.
Nevertheless, economic growth has been surprisingly robust. In calendar 1996,
personal income grew by 11.2%, the fastest pace in the nation in percentage
terms.
Financial services firms and others have been adding back office jobs
in the state. The state's economy is also benefiting from a major reform of
the state's workers' compensation system a few years ago.
This past spring, flooding affected some portions of North Dakota.
However, this appeared not to adversely affect the state's bond market or its
economy. The unemployment rate as of mid-year was just 3.2%, the fourth
lowest rate in the nation. State officials project a budget surplus of $63
million on revenues of $1.37 billion for fiscal 1997. North Dakota's general
obligation bonds are rated AA- by Standard & Poor's.
As of June 30, more than half of the Fund's net assets were allocated
to three sectors - hospital, housing and power authority bonds. We believe
these areas offer superior income potential. Since 1996, we have increased
our weighting in hospital bonds and slightly decreased our allocation to
utility bonds, reflecting our belief that the healthcare sector represents a
somewhat greater long-term value on a risk-adjusted basis.
TAX-FREE NEW MEXICO FUND
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
- -------------------------------------------------------------------------------
June 30, 1997
Housing 28.7%
Hospitals 9.9%
Cash 1.4%
Utility 5.0%
Water/Sewer 5.0%
Municipal Lease 5.4%
Higher Education 9.9%
Industrial Development 15.0%
Other Revenue Bonds 19.7%
- -------------------------------------------------------------------------------
Average Effective Maturity 11.6 years
Average Effective Duration 7.1 years
Average Quality AA+
Thirty-Day Current SEC Yield* 4.77%
*FOR A CLASS SHARES BASED ON SECURITIES AND EXCHANGE COMMISSION GUIDELINES.
SEC YIELDS FOR B AND C CLASSES WERE 4.16% AND 4.04% RESPECTIVELY.
APPROXIMATELY 15.4% OF THE INCOME GENERATED BY TAX-FREE NEW MEXICO FUND FOR
THE SIX MONTHS ENDED JUNE 30, 1997, WAS SUBJECT TO THE ALTERNATIVE MINIMUM
TAX.
7
1997 semi-annual report
<PAGE>
TAX-FREE NEW MEXICO FUND
STRATEGIC POSITIONING
AND OUTLOOK
Tax-Free New Mexico Fund provided an above-average total return of +3.67% for
the six months ended June 30, 1997 (for A Class shares at net asset value
with dividends reinvested).
The Fund's A Class six-month return not only outpaced its benchmark -
the unmanaged Lehman Brothers Municipal Bond Index - but ranked 2nd among its
62 peers in total return for the period, as measured by Lipper Analytical
Services.* Lipper, an independent evaluator of mutual funds, places the Fund
in its Other States Municipal Debt category.
Since December, we have sold some very highly rated bonds and bought
more moderate quality, investment grade bonds seeking to increase the Fund's
dividend yield. For example, we purchased Farmington New Mexico Pollution
Control Revenue bonds because our analysis showed that the creditworthiness of
this superior-yielding issue was beginning to improve.
INVESTMENT GRADE BONDS OF
MODERATE QUALITY WITH GOOD CALL
PROTECTION GENERALLY PROVIDED
SUPERIOR RETURNS DURING THE FIRST
HALF OF FISCAL 1997.
Investment grade bonds of moderate quality with good call protection
generally provided superior returns during the first half of fiscal 1997, and
our focus on this area allowed us to outperform both the index and our peers.
The percentage of the Fund's net assets invested in bonds rated AAA, the highest
quality available, was reduced slightly, from 51.9% in December to 49.6% as of
June 30.
We believe New Mexico's strengthening economy provides many tax-exempt
investment opportunities. The total supply of new bonds issued in New Mexico
increased by 76% during the first half of fiscal 1997, yet still remained at a
modest level compared to many other states. This provided us with a greater
opportunity to pick and choose among bonds that in our opinion, offered the best
income and total return potential.
*FOR THE ONE-YEAR AND THREE-YEAR PERIODS ENDED JUNE 30, 1997, THE FUND'S A
CLASS SHARES RANKED 4TH OUT OF 62 FUNDS AND 5TH OUT OF 44 FUNDS RESPECTIVELY.
SEE PAGE 13 FOR COMPLETE PERFORMANCE INFORMATION. LIPPER RANKINGS ASSUME
REINVESTMENT OF DIVIDENDS AND ARE BASED ON CHANGES IN A FUND'S NET ASSET
VALUE WITHOUT EFFECT OF SALES CHARGES. PAST PERFORMANCE DOES NOT GUARANTEE
FUTURE RESULTS.
8
1997 semi-annual report
<PAGE>
As of mid-year, the state had an unemployment rate that was about a
percentage point higher than the national average. However,the jobless rate
among its 1.5 million residents has been dropping rapidly since mid-1996, when
New Mexico had the worst unemployment rate of any of the 50 states.
Thanks to labor shortages elsewhere in the country,
New Mexico has become an attractive alternative for business expansion and
relocations. Intel Corp. has said it plans to hire 2,000 workers through the
end of 1987 to make Pentium chips for personal computers at its Rio Rancho,
N.M. office. Citicorp is reportedly adding 600 workers to its credit card
processing center in Albuquerque.
Such growth has been good news for the state's bond market. New Mexico's
general obligation bonds are rated AA+ by Standard & Poor's and the state had a
1996 budget surplus of $144 million on revenues of $2.76 billion.
We believe demand for tax-exempt securities among New Mexicans is likely
to remain strong. Individual income tax rates range as high as 8.5% and
according to the Cato Institute, a tax watchdog, state levies on income are 30%
above the national average.
TAX-FREE UTAH FUND
STRATEGIC POSITIONING
AND OUTLOOK
Tax-Free Utah Fund provided an above-average total return of +3.36% for the
six months ended June 30, 1997 (for A Class shares at net asset value with
dividends reinvested).
TAX-FREE UTAH FUND
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
- -------------------------------------------------------------------------------
June 30, 1997
Utilities 2.6%
Municipal Lease 10.9%
Cash 2%
Higher Education 27.7%
Housing 25.9%
Other Revenue Bonds 2.6%
Hospitals 3.7%
General Obligation 14.1%
Other 2.6%
Water/Sewer 17.2%
- -------------------------------------------------------------------------------
Average Effective Maturity 12.4 years
Average Effective Duration 7.6 years
Average Quality AA+
Thirty-Day Current SEC Yield* 4.83%
*FOR A CLASS SHARES BASED ON SECURITIES AND EXCHANGE COMMISSION GUIDELINES.
THE SEC YIELD FOR B CLASS WAS 4.19%.
APPROXIMATELY 13.2% OF THE INCOME GENERATED BY TAX-FREE UTAH FUND FOR THE SIX
MONTHS ENDED JUNE 30, 1997, WAS SUBJECT TO THE ALTERNATIVE MINIMUM TAX.
THE ABOVE CHART ADDS UP TO MORE THAN 100% DUE TO TRANSACTIONS THAT HAD NOT
SETTLED AS OF JUNE 30, 1997.
9
1997 semi-annual report
<PAGE>
While the Fund has consistently strived to maximize total return, since
December we have taken steps to augment the Fund's yield. Although the Fund
continues to invest primarily in higherrated, investment grade municipal bonds,
during the first half of fiscal 1997 we found an opportunity to increase our
income potential by purchasing some unrated bonds.
For example, we purchased unrated bonds that the Utah State Board of
Regents issued on behalf of Southern Utah University. Our investment analysis
showed that these securities were of an attractive quality, providing us with
a significant opportunity to increase yield with what we believed to be a
negligible increase in risk.
Overall, the percentage of the Fund's portfolio invested in bonds
rated AAA, the highest quality available, decreased from 67.6% in December to
61.6% as of June 30. We positioned the portfolio to maximize the potential
benefit of a possible decline in interest rates, and focused on bonds with
longer call protection periods. With only a modest increase in credit risk,
we believe our strategy may help the Fund provide a more stable level
of income over a longer period of time.
Utah's economy is booming, a positive for the state's bond market. The
state's 3.0% unemployment rate was the third lowest in the nation as of mid-
year. Traditionally a mix of mining, agriculture and tourism, Utah's economy has
been adding more high-technology jobs in recent years. In addition, Salt Lake
City will be the site of the 2002 Winter Olympics, providing additional public
and private sector investment opportunities.
Last year, Utah was ranked as the best managed state in the nation by
FINANCIAL WORLD magazine. Its general obligation bonds enjoy a AAA rating
from Standard & Poor's, the highest available.
UTAH HAS A UNIQUE DEMOGRAPHIC
PROFILE THAT WE BELIEVE BODES
WELL FOR FUTURE ECONOMIC GROWTH
AND A STABLE CREDIT RATING.
Utah has a unique demographic profile that we believe bodes well for
future economic growth and a stable credit rating. Thanks to a high birth rate,
the median age of its 1.7 million populace is the lowest in the nation, while
the state's per capita income growth rate is the fourth highest in the country.
(picture of family on beach)
10
1997 semi-annual report
<PAGE>
OUTLOOK
We are optimistic that demand for tax-exempt bonds could increase in the
coming months among high tax bracket investors. In the West and across the
U.S., inflation appears to be benign. Despite a strong U.S. economy, the
Federal Reserve Board has been able to use monetary policy to effectively
control consumer price increases. Should interest rates remain stable or
decline for the balance of 1997, municipal bond investments could provide an
attractive real rate of return.
In our opinion, the long-term outlook for the economy and the bond
market in many Western states is bright. Municipalities will continue to need
capital from private investors to meet the needs of a growing regional
population, presenting investors with many income opportunities.
Andrew M. McCullagh Jr.
VICE PRESIDENT
SENIOR PORTFOLIO MANAGER
Thor Raarup
ASSOCIATE PORTFOLIO MANAGER
Mark D. Schierman
ASSOCIATE PORTFOLIO MANAGER
July 25, 1997
AT A GLANCE
- ------------------------------------------------------------------------------
Data as of June 30, 1997
COLORADO NORTH DAKOTA NEW MEXICO UTAH
- ------------------------------------------------------------------------------
General Obligation
Bond Rating none* AA- AA+ AAA
Budget Surplus nominal $63 million $144 million $9.1 million
Per Capita Income $25,084 $20,710 $18,770 $19,156
Population 3.3 million 642,000 1.5 million 1.7 million
Range of Individual
Income Tax Rates 5.0% 2.1 to 5.5% 1.7% to 8.5% 2.6% to 7.2%
Top Tax Bracket not applicable* Same as federal $65,000 $3,750
Unemployment Rate 3.5% 3.5% 6.3% 3.0%
* COLORADO HAS A FLAT TAX SYSTEM. THE STATE DOES NOT ISSUE GENERAL OBLIGATION
BONDS. MUNICIPALITIES WITHIN COLORADO DO, HOWEVER, AND THEIR RATINGS VARY.
DRAWINGS OF COLORADO, NORTH DAKOTA, NEW MEXICO & UTAH
11
1997 semi-annual report
<PAGE>
Performance Summary
COMPARATIVE TOTAL RETURNS
FOR THE SIX MONTHS ENDED JUNE 30, 1997*
Tax-Free Colorado Fund A Class +3.85%
Tax-Free North Dakota Fund A Class +3.44%
Tax-Free New Mexico Fund A Class +3.67%
Tax-Free Utah Fund A Class +3.36%
Lehman Brothers Municipal Bond Index +3.20%
*TOTAL RETURN IS BASED ON CHANGE IN NET ASSET VALUE WITH DISTRIBUTIONS
REINVESTED. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. PERFORMANCE
OF OTHER FUND CLASSES VARIES DUE TO DIFFERENT CHARGES AND EXPENSES. SEE PAGES
24, 26, 28 AND 30 FOR SIX-MONTH RETURNS FOR B AND C CLASSES. THE UNMANAGED
INDEX SHOWN ABOVE INCLUDES TAX-EXEMPT BONDS FROM MANY STATES AND DOES NOT
INCLUDE ANY MANAGEMENT FEES OR EXPENSES.
TAX-FREE COLORADO FUND
- --------------------------------------------------------------------------------
Average Annual Return Through June 30, 1997
LIFETIME FIVE YEARS ONE YEAR
- --------------------------------------------------------------------------------
Class A (Est. 4/23/87)
Excluding Sales Charge +8.15% +7.37% +9.17%
Including Sales Charge +7.75% +6.56% +5.07%
- --------------------------------------------------------------------------------
Class B (Est. 3/22/95)
Excluding Sales Charge +7.26% +8.25%
Including Sales Charge +6.05% +4.25%
- --------------------------------------------------------------------------------
Class C (Est. 5/6/94)
Excluding Sales Charge +6.68% +8.13%
Including Sales Charge +6.68% +7.13%
TAX-FREE NORTH DAKOTA FUND
- --------------------------------------------------------------------------------
Average Annual Return Through June 30, 1997
LIFETIME FIVE YEARS ONE YEAR
- --------------------------------------------------------------------------------
Class A (Est. 4/1/91)
Excluding Sales Charge +7.74% +7.01% +8.26%
Including Sales Charge +7.09% 6.20% +4.25%
- --------------------------------------------------------------------------------
Class B (Est. 5/10/94)
Excluding Sales Charge +7.40% +7.76%
Including Sales Charge +6.57% +3.76%
- --------------------------------------------------------------------------------
Class C (Est. 7/29/95)
Excluding Sales Charge +6.40% +7.17%
Including Sales Charge +6.40% +6.17%
PLEASE SEE PAGE 13 FOR IMPORTANT ADDITIONAL INFORMATION. ALL PERFORMANCE
INCLUDES REINVESTMENT OF DISTRIBUTIONS AND APPLICABLE SALES CHARGES AS DESCRIBED
ON PAGE 13. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS.
12 1997 semi-annual report
<PAGE>
performance
TAX-FREE NEW MEXICO FUND
- --------------------------------------------------------------------------------
Average Annual Return Through June 30, 1997
LIFETIME ONE YEAR
- --------------------------------------------------------------------------------
Class A (Est. 10/5/92)
Excluding Sales Charge +7.35% +8.97%
Including Sales Charge +6.49% +4.88%
- --------------------------------------------------------------------------------
Class B (Est. 3/3/94)
Excluding Sales Charge +5.19% +8.13%
Including Sales Charge +4.38% +4.13%
- --------------------------------------------------------------------------------
Class C (Est. 5/7/96)
Excluding Sales Charge +8.45% +8.08%
Including Sales Charge +8.45% +7.08%
TAX-FREE UTAH FUND
- --------------------------------------------------------------------------------
Average Annual Return Through June 30, 1997
LIFETIME ONE YEAR
- --------------------------------------------------------------------------------
Class A (Est. 10/5/92)
Excluding Sales Charge +7.70% +8.11%
Including Sales Charge +6.83% +4.09%
- --------------------------------------------------------------------------------
Class B (Est. 5/27/95)
Excluding Sales Charge +5.79% +7.22%
Including Sales Charge +4.43% +3.22%
ALL PERFORMANCE INCLUDES REINVESTMENT OF DISTRIBUTIONS AND APPLICABLE
SALES CHARGES AS DESCRIBED BELOW. RETURN AND SHARE VALUE WILL FLUCTUATE SO THAT
SHARES WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PAST
PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. PERFORMANCE FOR CLASS B AND C
SHARES "EXCLUDING SALES CHARGE" ASSUMES THE INVESTMENT WAS NOT REDEEMED. RETURNS
REFLECT A VOLUNTARY EXPENSE LIMITATION IN EFFECT AT THE TIME. RETURNS WOULD HAVE
BEEN LOWER WITHOUT THE LIMITATION.
CLASS A SHARES HAVE A 3.75% MAXIMUM FRONT-END SALES CHARGE. ALL FOUR FUNDS
HAVE A 12B-1 FEE.
CLASS B SHARES DO NOT CARRY A FRONT-END SALES CHARGE, BUT ARE SUBJECT TO A 1%
ANNUAL DISTRIBUTION AND SERVICE FEE. THEY ARE ALSO SUBJECT TO A DEFERRED SALES
CHARGE OF UP TO 4% IF REDEEMED BEFORE THE END OF THE SIXTH YEAR.
CLASS C SHARES HAVE A 1% ANNUAL DISTRIBUTION AND SERVICE FEE. IF SHARES ARE
REDEEMED WITHIN 12 MONTHS, A 1% CONTINGENT DEFERRED SALES CHARGE APPLIES.
13
1997 semi-annual report
<PAGE>
Financial Statements
DELAWARE-VOYAGEUR TAX-FREE COLORADO FUND
STATEMENT OF NET ASSETS --
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
<S> <C> <C>
MUNICIPAL BONDS - 99.16%
GENERAL OBLIGATION BONDS - 20.02%
Arapahoe Colorado Water & Sanitation Series
1995A 6.00% 12/01/15.............................. $ 8,010,000 $ 8,246,455
Arapahoe Colorado Water & Sanitation Series
1995A 6.15% 12/01/19.............................. 10,075,000 10,399,919
Arapahoe County School District #5-Cherry Creek,
Inverse Floater 6.47% 12/15/15.................... 3,000,000 2,767,770
Boulder Valley School District #RE-2 Series A
6.30% 12/01/13.................................... 3,000,000 3,228,810
Boulder Valley School District #RE-2 Series A
6.30% 12/01/14.................................... 5,000,000 5,365,350
Eagles Nest Metropolitan District Limited Tax
6.50% 11/15/17.................................... 6,575,000 6,685,723
El Paso County School District #20,
Inverse Floater 7.27% 12/15/14.................... 1,250,000 1,269,713
Highlands Ranch Metropolitan School District #2,
Inverse Floater 6.17% 06/15/16.................... 1,850,000 1,620,656
Highlands Ranch Metropolitan School District #4
6.00% 12/01/15.................................... 4,200,000 4,361,154
Interstate South Metropolitan District
6.00% 12/01/20.................................... 8,755,000 8,933,865
Jefferson County Metropolitan District-Section 14,
Series A 6.20% 12/01/13........................... 2,250,000 2,381,108
Jefferson County Metropolitan District-Section 14,
Series A 6.20% 06/01/14........................... 1,000,000 1,055,130
Montezuma County School District
#RE 4A-Delores 7.00% 12/01/19..................... 1,500,000 1,646,805
Puerto Rico Commonwealth
5.375% 07/01/25 (MBIA)............................ 2,500,000 2,448,600
Puerto Rico Commonwealth
5.375% 07/01/25................................... 11,000,000 10,592,010
----------
71,003,068
----------
HIGHER EDUCATION REVENUE BONDS - 5.88%
Aurora Educational Development
6.00% 10/15/15 (Connie Lee)....................... 500,000 513,060
Colorado Education Facilities Authority University
of Denver 6.00% 03/01/16 (Connie Lee)............. 2,000,000 2,055,360
Colorado Post Secondary Education Auraria Fund
Project 6.00% 09/01/15 (FGIC)..................... 1,000,000 1,035,750
Colorado Post Secondary Education Facilities
Authority, Inverse Floater 8.17% 03/01/16......... 3,350,000 3,535,222
Colorado Post Secondary Education Facilities Authority
Ocean Journey Project 8.375% 12/01/26............. 10,000,000 10,223,500
University of Northern Colorado Revenue Auxiliary
Facilities Systems 5.60% 06/01/24................. 3,500,000 3,502,800
----------
20,865,692
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS - 19.19%
Boulder County Hospital Revenue Longmont United
Project 5.875% 12/01/20........................... $ 3,250,000 $ 3,171,123
Colorado Health Facilities Authority Covenant
Retirement 6.75% 12/01/25......................... 4,150,000 4,313,178
Colorado Health Facilities Authority Covenant
Retirement 6.75% 12/01/15......................... 1,750,000 1,850,398
Colorado Health Facilities Authority National
Benevolent Series A 6.90% 06/01/15................ 1,085,000 1,157,077
Colorado Health Facilities Authority Parkview
Hospital 6.00% 09/01/16........................... 4,000,000 3,968,120
Colorado Health Facilities Authority Parkview
Hospital 6.125% 09/01/25.......................... 7,750,000 7,702,880
Colorado Health Facilities Authority Revenue,
Inverse Floater 6.67% 10/01/26.................... 3,375,000 3,012,559
Colorado Health Facilities Authority Rocky
Mountain Adventist Healthcare
6.625% 02/01/22................................... 5,885,000 6,080,617
Colorado Health Facilities Authority Rocky
Mountain Adventist Healthcare
6.625% 02/01/13................................... 13,000,000 13,512,070
Colorado Health Facilities Authority Vail Valley
Medical Center Revenue
6.50% 01/15/13.................................... 2,400,000 2,482,560
Colorado Health Facilities Authority Vail Valley
Medical Center Revenue
6.60% 01/15/20.................................... 6,500,000 6,698,965
Colorado Springs Memorial Hospital
6.00% 12/15/24 (MBIA)............................. 8,500,000 8,806,680
Eagle County Vail Valley Medical Development
5.625% 01/15/19................................... 1,165,000 1,097,791
University Of Colorado Hospital Revenue
6.40% 11/15/22 (AMBAC)............................ 4,000,000 4,215,280
-----------
68,069,298
-----------
HOUSING REVENUE BONDS - 17.33%
Adams County Housing Authority Mortgage Revenue
Aztec Villa Apartments Project
5.85% 12/01/17.................................... 345,000 344,976
Adams County Housing Authority Mortgage Revenue
Aztec Villa Apartments Project
5.85% 12/01/27................................... 1,825,000 1,799,359
Adams County Housing Authority Greenbrias Project
6.75% 07/01/21.................................... 1,730,000 1,758,286
Aurora Single Family Mortgage Revenue
7.30% 05/01/10.................................... 9,715,000 10,437,310
Colorado Housing Finance Authority Multifamily
Series C-3 6.10% 10/01/28......................... 4,120,000 4,224,030
</TABLE>
14
1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE COLORADO FUND
STATEMENT OF NET ASSETS (Continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Colorado Housing Finance Authority Multifamily
Series A-3 5.85% 10/01/28 (FHA)................... $4,000,000 $ 4,040,200
Colorado Housing Finance Authority Multifamily
Series A-3 6.25% 10/01/26......................... 8,530,000 8,839,639
Colorado Housing Finance Authority Single Family
Mortgage 7.50% 11/01/24 (FHA)..................... 2,980,000 3,306,846
Colorado Housing Finance Authority Single Family
Housing Project Series
C-2 7.45% 06/01/17................................ 945,000 1,033,225
Colorado Housing Finance Authority Single Family
Housing Series A-2 7.15% 11/01/14................. 1,510,000 1,670,241
Colorado Housing Finance Authority Single Family
Housing Series A-3 7.45% 11/01/27................. 2,500,000 2,793,975
Colorado Housing Finance Authority Single Family
Housing Series C-2 7.10% 05/01/15................. 1,260,000 1,383,190
Colorado State Single Family Housing Authority
Senior Revenue 7.10% 06/01/14..................... 995,000 1,093,047
Englewood Multifamily Marks Apartments
Series 96 6.65% 12/01/26.......................... 5,700,000 5,940,312
Englewood Multifamily Marks Apartments
Series B 6.00% 12/15/18........................... 8,950,000 9,001,821
Pueblo County Single Family Mortgage Reveue
Series 1994A 7.05% 11/01/27 (GNMA)................ 3,505,000 3,785,190
----------
61,451,647
----------
INDUSTRIAL DEVELOPMENT
REVENUE BONDS - 2.38%
Fort Collins PCR Anheuser-Busch Project
6.00% 09/01/31.................................... 8,250,000 8,431,748
----------
8,431,748
----------
LEASE/CERTIFICATES OF PARTICIPATION - 3.29%
Conejos & Alamosa Counties, Colorado School
District No.Re Certificates of Participation
6.50% 04/01/11.................................... 1,780,000 1,768,590
Greeley Building Authority 6.10% 08/15/16.......... 2,600,000 2,605,798
Jefferson County, Inverse Floater
6.67% 12/01/09 (MBIA)............................. 5,000,000 5,045,500
Pueblo County Colorado School District #60,
Inverse Floater 6.92% 12/01/10 (MBIA)............. 2,220,000 2,258,561
----------
11,678,449
----------
POWER AUTHORITY REVENUE BONDS - 2.01%
Platte River Power Authority Series BB
6.125% 06/01/14................................... 5,000,000 5,194,800
Puerto Rico Electric Power Authority Series X
5.50% 07/01/25.................................... 2,000,000 1,936,220
----------
7,131,020
----------
*PRE-REFUNDED BONDS - 0.53%
Auraria Higher Education Center Fee
6.50% 05/01/12-01 (AMBAC)......................... 1,750,000 1,870,628
----------
1,870,628
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
SCHOOL AUTHORITY/DISTRICT
REVENUE BONDS - 0.28%
Larimer County, Colorado School District #R-1
Poudre Certificates of Participation
5.65% 12/01/16.................................... $1,000,000 $1,006,150
----------
1,006,150
----------
TRANSPORTATION REVENUE BONDS - 11.17%
Arapahoe County Capital Improvement E-470
7.00% 08/31/26.................................... 10,000,000 11,395,500
Arapahoe County Vehicle Reg E-470
6.15% 08/31/26 (MBIA)............................. 8,530,000 8,994,373
Denver City & County Airport Revenue
5.60% 11/15/20 (MBIA)............................. 7,900,000 7,868,795
Denver City & County Airport Revenue
5.70% 11/15/25 (MBIA)............................. 11,325,000 11,350,368
----------
39,609,036
----------
WATER AND SEWER REVENUE BONDS - 2.99%
Centennial County Water and Sanitary
District Revenue 6.00% 12/01/15
(LOC-Swiss Bank).................................. 4,000,000 4,102,480
Westminster Water & Sewer Utility Revenue
6.25% 12/01/14 (AMBAC)............................ 1,000,000 1,059,420
Widefield, Colorado Water & Sewer Revenue-A
5.60% 12/01/26.................................... 5,450,000 5,459,320
----------
10,621,220
----------
OTHER REVENUE BONDS - 14.09%
Aurora Saddle Rock Golf Course
6.20% 12/01/15.................................... 2,000,000 2,028,620
Denver, Colorado City & County Airport Revenue-
Series D 5.50% 11/15/25........................... 10,000,000 9,760,800
GVR Metropolitan District Series A
6.00% 12/01/15.................................... 7,075,000 7,357,293
GVR Metropolitan District Series A
6.125% 12/01/19................................... 4,725,000 4,919,954
Lowry Colorado Economic Redevelopment Authority
7.50% 12/01/10.................................... 13,700,000 13,920,844
Pueblo Urban Renewal Authority Jr Lien
6.625% 12/01/19................................... 2,200,000 2,286,394
Pueblo Urban Renewal Authority Revenue
6.15% 12/01/19 (AMBAC)............................ 1,685,000 1,756,023
Puerto Rico Public Buildings Authority Revenue
Guaranteed Government Facilities-Series B
5.25% 07/01/21.................................... 5,975,000 5,634,604
South Suburban District Golf and Ice Arena Facility
6.00% 11/01/15.................................... 2,330,000 2,327,181
-----------
49,991,713
-----------
Total Municipal Bonds (cost $338,426,064).......... 351,729,669
-----------
</TABLE>
15
1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE COLORADO FUND
STATEMENT OF NET ASSETS (Continued)
- --------------------------------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.16%
(cost $338,426,064)**............................. $351,729,669
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 0.84%........................ 2,977,838
------------
NET ASSETS APPLICABLE TO 32,570,411 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00%............ $354,707,507
============
NET ASSET VALUE - TAX-FREE COLORADO FUND A CLASS
($347,395,728 / 31,899,009 shares)................ $10.89
======
NET ASSET VALUE - TAX-FREE COLORADO FUND B CLASS
($5,748,069 / 527,842 shares)..................... $10.89
======
NET ASSET VALUE - TAX-FREE COLORADO FUND C CLASS
($1,563,710 / 143,560 shares)..................... $10.89
======
- -----------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in
which each bond is pre-refunded.
** Also cost for federal tax purposes.
AMBAC - Insured by the AMBAC Idemnity Corporation
Connie Lee - Insured by College Construction Insurance Association
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
GNMA - Insured by Government National Mortgage Association
LOC - Swiss Bank - Letter of Credit by Swiss Bank of New York
MBIA - Insured by the Municipal Bond Insurance Association
- -----------------
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common Stock, $.01 par value, 10,000,000,000 shares authorized to the Fund
with 1,000,000,000 shares allocated to Tax-Free Colorado Fund A Class, and
1,000,000,000 shares allocated to Tax-Free Colorado Fund B Class
1,000,000,000 shares allocated to
Tax-Free Colorado Fund C Class.................... $349,470,581
Accumulated undistributed net investment income.... 172,650
Accumulated net realized loss on investments....... (8,239,319)
Net unrealized appreciation of investments......... 13,303,595
------------
Total Net Assets................................... $354,707,507
============
See accompanying notes
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE
NORTH DAKOTA FUND
STATEMENT OF NET ASSETS --
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
<S> <C> <C>
MUNICIPAL BONDS - 96.16%
GENERAL OBLIGATION BONDS - 6.28%
Grand Forks Sales Tax-Cirrus Project
5.90% 05/01/17.................................... $ 195,000 $ 197,283
Grand Forks Sewer Reserve
6.70% 06/01/07.................................... 270,000 287,782
Grand Forks Water Revenue
5.80% 06/01/13.................................... 165,000 170,696
Grand Forks Water Revenue
5.85% 06/01/14.................................... 175,000 181,487
North Dakota State Real Estate
6.00% 09/01/13.................................... 215,000 216,967
Puerto Rico Aqueduct & Sewer Authority
5.00% 07/01/15.................................... 1,000,000 942,240
----------
1,996,455
----------
HIGHER EDUCATION REVENUE BONDS - 3.32%
Burleigh County University Facilities Mary PJ Bank
Qualified 7.125% 12/01/11......................... 250,000 263,558
North Dakota State University Housing and
Auxiliary Facility 6.30% 04/01/07................. 250,000 263,733
North Dakota State University Housing and
Auxiliary Facility 6.50% 04/01/12................. 500,000 529,225
----------
1,056,516
----------
HOSPITAL REVENUE BONDS - 25.04%
Bismarck Hospital Alexius Medical Center
6.90% 05/01/06 (AMBAC)............................ 500,000 545,900
Bismarck Hospital Medical Center One Inc.
7.50% 05/01/13 (BIGI)............................. 250,000 266,920
Catholic Health Corporation-Carrington
6.25% 11/15/15.................................... 500,000 514,795
Catholic Health Corporation-Cass County Villa
Nazareth Project 6.25% 11/15/14................... 1,000,000 1,032,620
Fargo Health Care Facility-Meritcare
5.375% 06/01/27................................... 2,750,000 2,645,115
Fargo Hospital Facility St. Luke's Hospital,
Series 1992 6.50% 06/01/15........................ 1,000,000 1,053,560
Grand Forks United Hospital
6.125% 12/01/14 (MBIA)............................ 225,000 239,632
Grand Forks United Hospital
6.25% 12/01/19 (MBIA)............................. 250,000 265,693
Ward County Trinity Health Care Facility
6.00% 07/01/11.................................... 1,400,000 1,397,368
----------
7,961,603
----------
</TABLE>
16
1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE NORTH DAKOTA FUND
STATEMENT OF NET ASSETS (Continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS - 26.52%
Grand Forks Multifamily Housing Authority Revenue-
Ryan House Section 8 6.30% 03/01/22.............. $ 305,000 $ 315,986
Minot Single Family Mortgage
7.70% 08/01/10.................................... 280,000 293,247
North Dakota Housing Finance Authority Single
Family Mortgage Series A
6.30% 07/01/16.................................... 2,000,000 2,083,740
North Dakota Housing Finance Authority Single
Family Mortgage 6.25% 01/01/17.................... 2,255,000 2,343,080
North Dakota Single Housing Finance Agency
Single Family Mortgage Series A
6.75% 07/01/12 (FHA).............................. 190,000 199,966
North Dakota State Housing
Finance Agency Revenue
6.125% 12/01/15 (FNMA)............................ 500,000 513,715
North Dakota State Housing Finance Agency
Revenue Multifamily
6.15% 12/01/17 (FNMA)............................. 1,300,000 1,338,168
North Dakota State Housing Finance Authority
Single Family Mortgage Series A
6.95% 07/01/12.................................... 375,000 398,104
North Dakota State Housing Finance Agency
Single Family Mortgage Series E
6.30% 01/01/15 (FNMA)............................. 905,000 947,327
-----------
8,433,333
-----------
INDUSTRIAL DEVELOPMENT
REVENUE BONDS - 1.68%
Mercer County Pollution Control Otter Tail Power
6.90% 02/01/19.................................... 500,000 535,380
-----------
535,380
-----------
POWER AUTHORITY REVENUE BONDS - 14.14%
Mercer County Pollution Control Revenue
Montana/Dakota 6.65% 06/01/22 (FGIC).............. 500,000 536,105
Mercer County Pollution Control Revenue Basin
Electric Revenue 6.05% 01/01/19................... 1,250,000 1,306,900
Morton County Pollution Control Revenue
6.65% 06/01/22.................................... 750,000 801,465
Oliver County Pollution Control Revenue, Sq. Butte
Electric Co-op 7.00% 12/31/10..................... 165,000 164,988
Puerto Rico Electric Power Authority
5.25% 07/01/21.................................... 1,800,000 1,688,076
-----------
4,497,534
-----------
*PRE-REFUNDED BONDS - 1.01%
Devils Lake Public School District #1
6.80% 05/01/11-99................................. 100,000 104,502
Fargo Park District Revenue
7.25% 11/01/11-00................................. 200,000 216,740
-----------
321,242
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
SCHOOL AUTHORITY/DISTRICT
REVENUE BONDS - 2.38%
Fargo School District Building Authority Revenue
6.00% 04/15/09.................................... $ 365,000 $ 368,822
Fargo School District Building Authority Revenue
6.00% 04/15/10.................................... 385,000 389,031
-----------
757,853
-----------
TRANSPORTATION REVENUE BONDS - 4.58%
Puerto Rico Commonwealth Highway & Transportation
Authority (Highway Improvements) Series Y
5.50% 07/01/26.................................... 1,500,000 1,455,600
-----------
1,455,600
-----------
OTHER REVENUE BONDS - 11.21%
North Dakota Building Authority Revenue
6.00% 12/01/14 (FSA).............................. 1,310,000 1,359,020
North Dakota Building Authority Revenue
6.10% 12/01/16 (FSA).............................. 1,480,000 1,535,174
North Dakota State Muni Bond Bank
6.25% 12/01/11.................................... 450,000 458,937
North Dakota State Student Loan
7.00% 07/01/05 (AMBAC)............................ 200,000 211,012
-----------
3,564,143
-----------
Total Municipal Bonds (cost $29,309,836)........... 30,579,659
-----------
SHORT TERM INVESTMENTS - 2.42%
Norwest Advantage Municipal
Money Market Fund................................. 768,719 768,719
-----------
Total Short Term Investments
(cost $768,719)................................... 768,719
-----------
</TABLE>
1997 semi-annual report
17
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE NORTH DAKOTA FUND
STATEMENT OF NET ASSETS (Continued)
- --------------------------------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.58%
(cost $30,078,555)**.............................. $31,348,378
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.42%........................ 450,559
-----------
NET ASSETS APPLICABLE TO 2,898,660 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00%............ $31,798,937
===========
NET ASSET VALUE - TAX FREE NORTH DAKOTA FUND A CLASS
($30,914,375 / 2,818,019 shares).................. $10.97
======
NET ASSET VALUE - TAX FREE NORTH DAKOTA FUND B CLASS
($845,832 / 77,108 shares)........................ $10.97
======
NET ASSET VALUE - TAX FREE NORTH DAKOTA FUND C CLASS
($38,730 / 3,533 shares).......................... $10.96
======
- ----------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in
which each bond is pre-refunded.
** Also cost for federal tax purposes.
AMBAC - Insured by the AMBAC Idemnity Corporation
BIGI - Insured by the Board Investors Guaranty Insurance Company
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
- ---------------
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common Stock, $.01 par value, 10,000,000,000 shares
authorized to the Fund with 1,000,000,000 shares
allocated to North Dakota Tax Free Fund A Class
1,000,000,000 shares allocated to North Dakota
Tax Free Fund B Class and 1,000,000,000 shares
allocated to North Dakota Tax Free Fund C Class... $30,925,686
Accumulated undistributed net investment income.... 21,169
Accumulated net realized loss on investments....... (417,741)
Net unrealized appreciation of investments......... 1,269,823
-----------
Total Net Assets................................... $31,798,937
===========
See accompanying notes
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE
NEW MEXICO FUND
STATEMENT OF NET ASSETS --
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
<S> <C> <C>
MUNICIPAL BONDS - 98.55%
HIGHER EDUCATION REVENUE BONDS - 9.86%
New Mexico Education Assistance Foundation
6.65% 11/01/25.................................... $1,000,000 $1,014,170
State University Refund and Improvements
5.75% 04/01/16.................................... 1,000,000 1,021,160
----------
2,035,330
----------
HOSPITAL REVENUE BONDS - 9.91%
Hobbs Health Facility Evangelical Lutheran
5.70% 05/01/16 (AMBAC)............................ 1,000,000 1,005,520
State Hospital Equipment Memorial Medical Center
Project 6.40% 06/01/16............................ 1,000,000 1,041,370
----------
2,046,890
----------
HOUSING REVENUE BONDS - 28.67%
New Mexico Mortgage Finance Authority Series
1994B 6.75% 07/01/25.............................. 1,000,000 1,083,460
New Mexico Mortgage Finance Authority Series
1994E 6.20% 07/01/28.............................. 1,000,000 1,017,780
New Mexico Mortgage Finance Authority Series
1994F 6.95% 01/01/26.............................. 1,000,000 1,082,740
New Mexico Mortgage Finance Authority Series
1996G 6.85% 01/01/21.............................. 1,500,000 1,694,400
Santa Fe Single Family Mortgage Revenue
6.20% 11/01/16.................................... 1,000,000 1,042,900
----------
5,921,280
----------
INDUSTRIAL DEVELOPMENT
REVENUE BONDS - 15.02%
Farmington Pollution Control Revenue
6.375% 04/01/22................................... 1,000,000 1,027,770
Las Cruses Solid Waste Authority
6.00% 06/01/16.................................... 1,000,000 1,013,740
Lordsburg Pollution Control
6.50% 04/01/13.................................... 1,000,000 1,060,320
----------
3,101,830
----------
MUNICIPAL LEASE BONDS - 5.38%
University of New Mexico Technical Development
Lease Revenue 6.55% 08/15/25...................... 1,000,000 1,110,320
----------
1,110,320
----------
UTILITY REVENUE BONDS - 5.00%
Los Alamos Utility System Revenue 1994A
6.00% 07/01/15 (FSA).............................. 1,000,000 1,032,950
----------
1,032,950
----------
WATER AND SEWER REVENUE BONDS - 5.00%
Rio Rancho Water & Wastewater Revenue
6.00% 05/15/22 (FSA).............................. 1,000,000 1,032,510
----------
1,032,510
----------
</TABLE>
18
1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE NEW MEXICO FUND
STATEMENT OF NET ASSETS (Continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
OTHER REVENUE BONDS - 19.71%
Albuquerque Special Assessment #223
6.45% 01/01/15.................................... $1,000,000 $ 1,002,240
Bernalillo County Gross Tax Receipts
5.75% 04/01/26.................................... 1,000,000 1,005,350
Dona Ana County Tax Reference & Improvement
6.00% 06/01/19.................................... 1,000,000 1,030,370
Truth Or Consequences Gross Tax Receipts
6.30% 07/01/16.................................... 1,000,000 1,032,810
-----------
4,070,770
-----------
Total Municipal Bonds (cost $19,322,134)........... 20,351,880
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.55%
(cost $19,322,134)*............................... $20,351,880
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 1.45%............................... 299,140
-----------
NET ASSESTS APPLICABLE TO 1,893,879 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00%............ $20,651,020
===========
NET ASSET VALUE - TAX-FREE NEW MEXICO A CLASS
($19,456,043 / 1,784,331 shares).................. $10.90
======
NET ASSET VALUE - TAX-FREE NEW MEXICO B CLASS
($924,115 / 84,714 shares)........................ $10.91
======
NET ASSET VALUE - TAX-FREE NEW MEXICO C CLASS
($270,862 / 24,834 shares)........................ $10.91
======
</TABLE>
- -----------------
*Also cost for federal tax purposes.
AMBAC - Insured by the AMBAC Indemnity Corporation
FSA - Insured by the Financial Security Assurance
- -----------------
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common Stock, $.01 par value, unlimited shares
authorized to the New Mexico Tax-Free Fund........ $20,418,445
Accumulated undistributed net investment income.... 9,424
Accumulated net realized loss on investments....... (806,595)
Net unrealized appreciation of investments......... 1,029,746
-----------
Total net assets................................... $20,651,020
===========
See accompanying notes
'
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE
UTAH FUND
STATEMENT OF NET ASSETS --
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
<S> <C> <C>
MUNICIPAL BONDS - 104.67%
GENERAL OBLIGATION BONDS - 14.05%
Iron County School District
6.50% 01/15/13 (MBIA)............................. $100,000 $ 108,339
Nebo, Utah School District
6.00% 06/15/18.................................... 200,000 205,422
Provo, Utah City School District
6.25% 06/15/13.................................... 100,000 105,995
Salt Lake County Service Area # 1
6.00% 12/15/12.................................... 100,000 103,228
----------
522,984
----------
HIGHER EDUCATION
REVENUE BONDS - 27.66%
Southern Utah University Board of Regents
6.35% 05/01/10 (AMBAC)............................ 150,000 162,134
Southern Utah University Pavillion Student Fee
6.30% 06/01/16.................................... 390,000 399,145
Utah State Board of Regents
6.30% 06/01/12 (AMBAC)............................ 100,000 104,777
Utah State Board of Regents
5.875% 07/01/21 (MBIA)............................ 100,000 101,710
Utah State University Revenue
6.15% 12/01/14 (MBIA)............................. 150,000 157,254
Weber State University Board of Regents
6.25% 04/01/10 (MBIA)............................. 100,000 104,440
----------
1,029,460
----------
HOSPITAL REVENUE BONDS - 3.75%
Utah County Utah Hospital-IHC Health Services
5.25% 08/15/26.................................... 150,000 139,665
----------
139,665
----------
HOUSING REVENUE BONDS - 25.84%
Provo City Multifamily Lookout Pointe Apartments
5.80% 07/20/22 (GNMA)............................. 150,000 149,601
Salt Lake City Multifamily Housing Authority
6.00% 04/01/25.................................... 100,000 100,428
Salt Lake County Housing Authority Multifamily
Bridgeside 6.30% 11/01/28 (FHA)................... 270,000 277,857
Utah Housing Finance Authority Single Family
Mortgage Revenue Series 1992D-1
6.70% 07/01/12.................................... 130,000 135,555
Utah Housing Finance Authority Single Family
Mortgage Revenue Series 1994C
6.30% 07/01/16.................................... 90,000 94,016
Utah Housing Finance Multifamily Cottonwood
Project 6.30% 07/01/15 (FNMA)..................... 200,000 204,294
----------
961,751
----------
</TABLE>
1997 semi-annual report
19
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE UTAH FUND
STATEMENT OF NET ASSETS (Continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
MUNICIPAL LEASE BONDS - 10.95%
Salt Lake City Municipal Building Authority Lease
Revenue Series A 6.375% 10/01/12.................. $100,000 $ 104,614
Weber County Utah Municipal Building Authority
Lease Revenue 5.75% 12/15/19...................... 200,000 199,242
West Valley City Municipal Building Authority
Lease Revenue 6.00% 01/15/10...................... 100,000 103,850
---------
407,706
---------
UTILITY REVENUE BONDS - 2.60%
Puerto Rico Electric Power Authority Series X
5.50% 07/01/25.................................... 100,000 96,811
---------
96,811
---------
WATER AND SEWER
REVENUE BONDS - 17.23%
Puerto Rico Aqueduct & Sewer Authority
5.00% 07/01/15.................................... 200,000 188,448
Utah Water Finance Agency Revenue-Series A
5.60% 10/01/17.................................... 250,000 249,075
White City Water District Revenue
5.90% 02/01/22.................................... 200,000 203,944
---------
641,467
---------
OTHER REVENUE BONDS - 2.59%
West Valley City Redevelopment Agency Tax
Increment Revenue 5.375% 03/01/12................. 100,000 96,502
---------
96,502
---------
Total Municipal Bonds (cost $3,768,699)............ $3,896,346
---------
SHORT TERM INVESTMENTS - 1.99%
Norwest Advantage Municipal
Money Market Fund................................. 74,176 74,176
---------
Total Short Term Investments (cost $74,176)........ 74,176
---------
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 106.66%
(cost $3,842,875)*................................ $3,970,522
LIABILITIES NET OF RECEIVABLES AND
OTHER ASSETS - (6.66%)............................ (248,140)
----------
NET ASSESTS APPLICABLE TO 341,092 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00%............ $3,722,382
==========
NET ASSET VALUE - TAX-FREE UTAH A CLASS
($3,211,093 / 294,249 shares)..................... $10.91
======
NET ASSET VALUE - TAX-FREE UTAH B CLASS
($511,289 / 46,843 shares)........................ $10.91
======
- -----------------
*Also cost for federal tax purposes.
AMBAC - Insured by the AMBAC Indemnity Corporation
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
- -----------------
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common Stock, $.01 par value, unlimited shares
authorized to the Tax-Free Utah Fund.............. $3,662,166
Accumulated undistributed net investment income.... 38
Accumulated net realized loss on investments....... (67,469)
Net unrealized appreciation of investments......... 127,647
----------
Total net assets................................... $3,722,382
==========
See accompanying notes
20
1997 semi-annual report
<PAGE>
THE DELAWARE-VOYAGEUR FUNDS
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Tax-Free Tax-Free Tax-Free Tax-Free
Colorado North Dakota New Mexico Utah
Fund Fund Fund Fund
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ............................................ $ 10,945,619 $ 992,132 $ 626,219 $ 119,722
------------ ------------ ------------ ------------
10,945,619 992,132 626,219 119,722
------------ ------------ ------------ ------------
EXPENSES:
Management fees ..................................... 883,660 81,341 51,500 10,047
Dividend disbursing, transfer agent, and custodian
fees and expenses .................................. 213,051 48,563 24,796 12,459
Distribution expense ................................ 466,069 43,841 29,930 6,564
Registration fees ................................... 2,377 1,593 1,199 149
Reports and statements to shareholders .............. 31,969 4,721 2,908 2,000
Accounting fees and salaries ........................ 32,763 2,805 1,928 409
Professional fees ................................... 14,949 4,351 2,312 935
Directors' fees ..................................... 6,426 779 165 402
Other ............................................... 6,499 7,089 6,022 407
------------ ------------ ------------ ------------
1,657,763 195,083 120,760 33,372
------------ ------------ ------------ ------------
Less expenses waived or absorbed .................... (191,045) (30,476) (15,120) (17,900)
------------ ------------ ------------ ------------
Total net expenses .................................. 1,466,718 164,607 105,640 15,472
------------ ------------ ------------ ------------
NET INVESTMENT INCOME ............................... 9,478,901 827,525 520,579 104,250
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments: ................... 1,032,752 123,232 84,426 26,844
Net change in unrealized appreciation of investments: 2,897,150 139,366 138,947 272
------------ ------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ..... 3,929,902 262,598 223,373 27,116
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 13,408,803 $ 1,090,123 $ 743,952 $ 131,366
============ ============ ============ ============
</TABLE>
See accompanying notes
1997 semi-annual report 21
<PAGE>
THE DELAWARE-VOYAGEUR FUNDS
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Tax-Free Tax-Free Tax-Free
Colorado Fund North Dakota Fund New Mexico Fund
------------------------------------------------------------------------------------------
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
6/30/97 12/31/96 6/30/97 12/31/96 6/30/97 12/31/96
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ............... $ 9,478,901 $ 19,646,268 $ 827,525 $ 1,753,300 $ 520,579 $ 1,084,569
Net realized gain (loss) on
investments ........................ 1,032,752 133,826 123,232 (385,738) 84,426 (6,878)
Net change in unrealized
appreciation ....................... 2,897,150 (5,488,422) 139,366 (90,482) 138,947 (241,314)
------------ ------------ ----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations .......... 13,408,803 14,291,672 1,090,123 1,277,080 743,952 836,377
------------ ------------ ----------- ----------- ----------- -----------
DISTRIBUTION TO SHAREHOLDERS
FROM:
Net investment income:
A Class ............................ (9,739,200) (18,915,160) (822,151) (1,698,579) (511,837) (1,036,927)
B Class ............................ (111,940) (109,036) (18,969) (24,585) (18,068) (27,156)
C Class ............................ (36,580) (59,059) (858) (722) (6,199) (5,150)
------------ ------------ ----------- ----------- ----------- -----------
(9,887,720) (19,083,255) (841,978) (1,723,886) (536,104) (1,069,233)
------------ ------------ ----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ............................ 14,876,578 21,914,760 529,342 1,894,680 661,353 2,700,528
B Class ............................ 1,550,737 3,017,003 124,877 360,271 110,970 362,012
C Class ............................ 307,048 784,158 -- 28,000 62,981 344,523
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class ............................ 6,862,298 12,151,368 576,245 1,092,516 278,255 424,981
B Class ............................ 99,602 68,715 12,771 18,141 10,174 14,983
C Class ............................ 35,920 49,099 883 731 6,771 4,197
------------ ------------ ----------- ----------- ----------- -----------
23,732,183 37,985,103 1,244,118 3,394,339 1,130,504 3,851,224
------------ ------------ ----------- ----------- ----------- -----------
Cost of shares repurchased:
A Class ............................ (36,113,930) (63,749,843) (4,144,441) (4,927,263) (1,813,839) (4,156,051)
B Class ............................ (137,463) (567,194) (9) (49,185) -- (186,300)
C Class ............................ (317,002) (354,884) (3,000) (8,304) (142,247) (15,000)
------------ ------------ ----------- ----------- ----------- -----------
(36,568,395) (64,671,921) (4,147,450) (4,984,752) (1,956,086) (4,357,351)
------------ ------------ ----------- ----------- ----------- -----------
Decrease in net assets derived from
capital share transactions .......... (12,836,212) (26,686,818) (2,903,332) (1,590,413) (825,582) (506,127)
------------ ------------ ----------- ----------- ----------- -----------
NET DECREASE IN NET ASSETS .......... (9,315,129) (31,478,401) (2,655,187) (2,037,219) (617,734) (738,983)
NET ASSETS:
Beginning of period ................. 364,022,636 395,501,037 34,454,124 36,491,343 21,268,754 22,007,737
------------ ------------ ----------- ----------- ----------- -----------
End of period ....................... $354,707,507 $364,022,636 $31,798,937 $34,454,124 $20,651,020 $21,268,754
============ ============ =========== =========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Tax-Free
Utah Fund
-----------------------------
Six Months Year
Ended Ended
6/30/97 12/31/96
(Unaudited)
<S> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ............... $ 104,250 $ 222,176
Net realized gain (loss) on
investments ........................ 26,844 (22,702)
Net change in unrealized
appreciation ....................... 272 (61,332)
----------- -----------
Net increase in net assets
resulting from operations .......... 131,366 138,142
----------- -----------
DISTRIBUTION TO SHAREHOLDERS
FROM:
Net investment income:
A Class ............................ (97,295) (206,175)
B Class ............................ (9,198) (16,604)
C Class ............................ N/A N/A
----------- -----------
(106,493) (222,779)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ............................ 143,613 181,975
B Class ............................ 100,899 25,000
C Class ............................ N/A N/A
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class ............................ 35,754 86,770
B Class ............................ 9,716 16,214
C Class ............................ N/A N/A
----------- -----------
289,982 309,959
----------- -----------
Cost of shares repurchased:
A Class ............................ (850,480) (471,420)
B Class ............................ -- --
C Class ............................ N/A N/A
----------- -----------
(850,480) (471,420)
----------- -----------
Decrease in net assets derived from
capital share transactions .......... (560,498) (161,461)
----------- -----------
NET DECREASE IN NET ASSETS .......... (535,625) (246,098)
NET ASSETS:
Beginning of period ................. 4,258,007 4,504,105
----------- -----------
End of period ....................... $ 3,722,382 $ 4,258,007
=========== ===========
</TABLE>
22 1997 semi-annual report
<PAGE>
THE DELAWARE-VOYAGEUR FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
Tax-Free Colorado Fund - A Class
------------------------------------------------------------------------------------
Six Months
Ended Year Ended Year Ended Year Ended Year Ended Year Ended
6/30/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 10.78 $ 10.90 $ 9.53 $ 11.10 $ 10.57 $ 10.27
Income from investment operations:
Net investment income.................... 0.27 0.56 0.54 0.55 0.56 0.58
Net realized and unrealized gain (loss)
from investments ....................... 0.12 (0.13) 1.38 (1.54) 0.85 0.45
------- ------- ------ ------- ------- -------
Net increase (decrease) in net assets
from investment operations ............. 0.39 0.43 1.92 (0.99) 1.41 1.03
------- ------- ------ ------- ------- -------
Less dividends and distributions:
Dividends from net investment income(1).. (0.28) (0.55) (0.55) (0.54) (0.56) (0.58)
Distributions from net realized gain
on security transactions................ - - - (0.04) (0.32) (0.15)
------- ------- ------ ------- ------- -------
Total dividends and distributions........ (0.28) (0.55) (0.55) (0.58) (0.88) (0.73)
------- ------- ------ ------- ------- -------
Net asset value, end of period............ $10.89 $10.78 $10.90 $9.53 $11.10 $10.57
======= ======= ====== ======= ======= =======
Total return(2)........................... 3.85% 4.08% 20.54% (9.12%) 13.72% 10.42%
Ratios and supplemental data:
Net assets, end of period (000 omitted).. $347,396 $358,328 $392,815 $354,138 $399,218 $202,165
Ratio of expenses to average net assets(3) 0.81%(4) 0.78% 0.76% 0.66% 0.75% 0.80%
Ratio of expenses to average net assets
prior to expense limitation............. 0.92%(4) 0.91% 0.93% 0.72% 0.75% 0.80%
Ratio of net investment income to
average net assets...................... 5.38%(4) 5.27% 5.18% 5.35% 4.97% 5.59%
Ratio of net investment income to average
net assets prior to expense limitation.. 5.27%(4) 5.14% 5.01% 5.29% 4.97% 5.59%
Portfolio turnover....................... 46.87%(4) 40.35% 82.83% 69.32% 58.61% 69.72%
</TABLE>
- ------------------
(1) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
For Class A Shares for the years ended December 31, 1993 and 1992, $.01 per
Class A Share of the distributions from net investment income were subject
to state income tax.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(4) Annualized.
See accompanying notes
1997 semi-annual report 23
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
TAX-FREE COLORADO FUND- B CLASS TAX-FREE COLORADO FUND - C CLASS
--------------------------------------- ----------------------------------------------
Six Months Period From Six Months Period From
Ended Year Ended 3/22/95(1) Ended Year Ended Year Ended 5/6/94(1)
6/30/97 12/31/96 to 12/31/95 6/30/97 12/31/96 12/31/95 to 12/31/94
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $10.78 $10.90 $10.25 $10.78 $10.90 $ 9.53 $10.21
Income from investment operations:
Net investment income .................... 0.23 0.47 0.35 0.23 0.46 0.45 0.29
Net realized and unrealized gain (loss)
from investments ........................ 0.12 (0.13) 0.65 0.12 (0.13) 1.37 (0.67)
------ ------ ------ ------ ------ ------ ------
Net increase (decrease) in net assets
from investment operations .............. 0.35 0.34 1.00 0.35 0.33 1.82 (0.38)
------ ------ ------ ------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income(2)... (0.24) (0.46) (0.35) (0.24) (0.45) (0.45) (0.27)
Distributions from net realized gain
on security transactions................. - - - - - - (0.03)
------ ------ ------ ------ ------ ------ ------
Total dividends and distributions......... (0.24) (0.46) (0.35) (0.24) (0.45) (0.45) (0.30)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period............. $10.89 $10.78 $10.90 $10.89 $10.78 $10.90 $ 9.53
====== ====== ====== ====== ====== ====== ======
Total return(3)............................ 3.39% 3.25% 9.96% 3.39% 3.17% 19.44% (3.75%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)... $5,748 $4,172 $1,643 $1,564 $1,522 $1,042 $465
Ratio of expenses to average net assets(4) 1.56%(5) 1.58% 1.39%(5) 51.56%(5) 1.66% 1.66% 1.80%(5)
Ratio of expenses to average net assets
prior to expense limitation ............. 1.56%(5) 1.65% 1.60%(5) 1.56%(5) 1.66% 1.66% 1.81%(5)
Ratio of net investment income to
average net assets....................... 4.52%(5) 4.45% 3.96%(5) 4.52%(5) 4.40% 4.20% 4.23%(5)
Ratio of net investment income to average
net assets prior to expense limitation... 4.52%(5) 4.38% 3.75%(5) 4.52%(5) 4.40% 4.20% 4.22%(5)
Portfolio turnover........................ 46.87%(5) 40.35% 82.83% 46.87%(5) 40.35% 82.83% 69.32%
</TABLE>
- ---------------------
(1) Commencement of operations.
(2) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
For Class A Shares for the years ended December 31, 1993 and 1992, $.01 per
Class A Share of the distributions from net investment income were subject
to state income tax.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(5) Annualized.
See accompanying notes
24 1997 semi-annual report
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
Tax-Free North Dakota - A Class
------------------------------------------------------------------------------------
Six Months
Ended Year Ended Year Ended Year Ended Year Ended Year Ended
6/30/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 10.88 $ 11.00 $ 9.85 $ 11.07 $ 10.59 $ 10.34
Income from investment operations:
Net investment income ...................... 0.27 0.54 0.54 0.56 0.58 0.62
Net realized and unrealized gain (loss) from
investments................................ 0.09 (0.13) 1.18 (1.15) 0.58 0.34
------- ------- ------- ------- ------- -------
Net increase (decrease) in net assets from
investment operations...................... 0.36 0.41 1.72 (0.59) 1.16 0.96
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income(1)..... (0.27) (0.53) (0.57) (0.53) (0.58) (0.62)
Distributions from net realized gain on
security transactions...................... - - - (0.08) (0.10) (0.09)
In excess of net realized gains............. - - - (0.02) - -
------- ------- ------- ------- ------- -------
Total dividends and distributions .......... (0.27) (0.53) (0.57) (0.63) (0.68) (0.71)
------- ------- ------- ------- ------- -------
Net asset value, end of period............... $10.97 $10.88 $11.00 $9.85 $11.07 $10.59
======= ======= ======= ======= ======= =======
Total return(2).............................. 3.44% 3.89% 17.81% (5.47%) 11.20% 9.70%
Ratios and supplemental data:
Net assets, end of period (000 omitted)..... $30,914 $33,713 $36,096 $33,829 $34,880 $15,846
Ratio of expenses to average net assets(3).. 1.00%(4) 0.88% 0.81% 0.46% 0.59% 0.40%
Ratio of expenses to average net assets
prior to expense limitation ............... 1.18%(4) 1.08% 1.05% 1.14% 1.25% 1.25%
Ratio of net investment income to average
net assets................................. 5.10%(4) 5.01% 5.07% 5.36% 5.11% 5.78%
Ratio of net investment income to average
net assets prior to expense limitation..... 4.92%(4) 4.81% 4.83% 4.68% 4.45% 4.93%
Portfolio turnover.......................... 45.78%(4) 57.60% 45.34% 32.60% 27.39% 26.27%
</TABLE>
- ------------------
(1) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(4) Annualized.
See accompanying notes
1997 semi-annual report 25
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
TAX-FREE NORTH DAKOTA FUND - B CLASS TAX-FREE NORTH DAKOTA FUND - C CLASS
------------------------------------------------ --------------------------------------
Six Months Period From Six Months Period From
Ended Year Ended Year Ended 5/10/94(1) Ended Year Ended 7/29/95(1)
6/30/97 12/31/96 12/31/95 12/31/97 6/30/97 12/31/96 to 12/31/95
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $10.88 $11.00 $ 9.85 $10.31 $10.87 $11.00 $10.51
Income from investment operations:
Net investment income..................... 0.24 0.49 0.48 0.30 0.22 0.44 0.17
Net realized and unrealized gain (loss)
from investments......................... 0.09 (0.13) 1.18 (0.39) 0.09 (0.14) 0.50
------ ------ ------ ------ ------ ------ ------
Net increase (decrease) in net assets from
investment operations.................... 0.33 0.36 1.66 (0.09) 0.31 0.30 0.67
------ ------ ------ ------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income(2)... (0.24) (0.48) (0.51) (0.27) (0.22) (0.43) (0.18)
Distributions from net realized gain
on security transactions................. - - - (0.08) - - -
In excess of net realized gains........... - - - (0.02) - - -
------ ------ ------ ------ ------ ------ ------
Total dividends and distributions......... (0.24) (0.48) (0.51) (0.37) (0.22) (0.43) (0.18)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period............. $10.97 $10.88 $11.00 $9.85 $10.96 $10.87 $11.00
====== ====== ====== ====== ====== ====== ======
Total return(3)............................ 3.19% 3.39% 17.24% (0.77%) 2.94% 2.81% 6.47%
Ratios and supplemental data:
Net assets, end of period (000 omitted)... $846 $700 $375 $144 $39 $40 $20
Ratio of expenses to average net assets(4) 1.46%(5) 1.36% 1.29% 0.99%(5) 1.75%(5) 1.75% 1.73%(5)
Ratio of expenses to average net assets
prior to expense limitation ............. 1.75%(5) 1.83% 1.79% 1.89%(5) 1.75%(5) 1.75% 1.73%(5)
Ratio of net investment income to average
net assets............................... 4.64%(5) 4.52% 4.56% 4.97%(5) 4.17%(5) 4.06% 4.00%(5)
Ratio of net investment income to average
net assets prior to expense limitation... 4.17%(5) 4.05% 4.06% 4.07%(5) 4.17%(5) 4.06% 4.00%(5)
Portfolio turnover........................ 45.78%(5) 57.60% 45.34% 32.60% 45.78%(5) 57.60% 45.34%
</TABLE>
- -----------------
(1) Commencement of operations.
(2) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(5) Annualized.
See accompanying notes
26 1997 semi-annual report
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
TAX-FREE NEW MEXICO FUND - A CLASS
---------------------------------------------------------------------------------------
Six Months Two Months Period From
Ended Year Ended Year Ended Ended Year Ended Year Ended 10/5/92(1)
6/30/97 12/31/96 12/31/95 12/31/94 10/31/94 10/31/93 to 10/31/92
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 10.79 $ 10.89 $ 9.59 $ 9.77 $ 10.92 $ 10.00 $ 10.00
Income from investment operations:
Net investment income ..................... 0.26 0.54 0.52 0.11 0.56 0.57 -
Net realized and unrealized gain (loss)
from investments.......................... 0.12 (0.11) 1.33 (0.20) (1.16) 0.98 -
------- ------- ------ ------ ------- ------- -------
Net increase (decrease) in net assets from
investment operations..................... 0.38 0.43 1.85 (0.09) (0.60) 1.55 -
------- ------- ------ ------ ------- ------- -------
Less dividends and distributions:
Dividends from net investment income(2).... (0.27) (0.53) (0.55) (0.09) (0.55) (0.57) -
Distributions from net realized gain on
security transactions..................... - - - - - (0.06) -
------- ------- ------ ------ ------- ------- -------
Total dividends and distributions.......... (0.27) (0.53) (0.55) (0.09) (0.55) (0.63) -
------- ------- ------ ------ ------- ------- -------
Net asset value, end of period.............. $10.90 $10.79 $10.89 $9.59 $9.77 $10.92 $10.00
======= ======= ====== ====== ======= ======= =======
Total return(3)............................. 3.67% 4.13% 19.64% (0.90%) (5.56%) 15.77% 0.00%
Ratios and supplemental data:
Net assets, end of period (000 omitted).... $19,456 $20,133 $21,402 $19,706 $23,096 $17,302 $361
Ratio of expenses to average net assets(4) 0.98%(5) 0.88% 0.87% 0.06%(5) 0.29% 0.00% 0.00%
Ratio of expenses to average net assets
prior to expense limitation .............. 1.13%(5) 1.07% 1.09% 1.25%(5) 1.16% 1.25% 0.00%
Ratio of net investment income to average
net assets................................ 5.10%(5) 5.06% 5.07% 6.38%(5) 5.26% 5.10% 0.00%
Ratio of net investment income to average
net assets prior to expense limitation.... 4.95%(5) 4.87% 4.85% 5.19%(5) 4.39% 3.85% 0.00%
Portfolio turnover......................... 14.68%(5) 42.12% 55.72% 2.21% 22.94% 30.76% 0.00%
</TABLE>
- ----------------
(1) Commencement of operations.
(2) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax. For Class A Shares for the years ended October 31, 1994 and
1993, $.01 and $.02, respectively, per share of the distributions from net
investment income were subject to state income tax.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(5) Annualized.
See accompanying notes
1997 semi-annual report 27
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
TAX-FREE NEW MEXICO FUND -
TAX-FREE NEW MEXICO FUND - B CLASS C CLASS
------------------------------------------------------------ --------------------------
Six Months Two Months Period From Six Months Period From
Ended Year Ended Year Ended Ended 3/3/94(1) Ended 5/7/96(1)
6/30/97 12/31/96 12/31/95 12/31/94 to 10/31/94 6/30/97 to 12/31/96
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $10.79 $10.89 $ 9.59 $9.77 $10.69 $10.79 $10.41
Income from investment operations:
Net investment income .................... 0.22 0.46 0.46 0.09 0.31 0.22 0.28
Net realized and unrealized gain (loss)
from investments ........................ 0.13 (0.11) 1.32 (0.19) (0.93) 0.12 0.37
------ ------ ------ ------ ------ ------ ------
Net increase (decrease) in net assets from
investment operations.................... 0.35 0.35 1.78 (0.10) (0.62) 0.34 0.65
------ ------ ------ ------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income(2)... (0.23) (0.45) (0.48) (0.08) (0.30) (0.22) (0.27)
Total dividends and distributions......... (0.23) (0.45) (0.48) (0.08) (0.30) (0.22) (0.27)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period............. $10.91 $10.79 $10.89 $9.59 $9.77 $10.91 $10.79
====== ====== ====== ====== ====== ====== ======
Total return(3)............................ 3.34% 3.39% 18.84% (0.98%) (5.84%) 3.28% 6.30%
Ratios and supplemental data:
Net assets, end of period (000 omitted)... $924 $794 $605 $272 $264 $271 $341
Ratio of expenses to average net assets(4) 1.75%(5) 1.61% 1.53% 0.75%(5) 0.98%(5) 1.75%(5) 1.74%(5)
Ratio of expenses to average net assets
prior to expense limitation ............. 1.88%(5) 1.82% 1.83% 2.00%(5) 1.86%(5) 1.75%(5) 1.83%(5)
Ratio of net investment income to
average net assets....................... 4.33%(5) 4.31% 4.33% 5.60%(5) 4.57%(5) 4.20%(5) 4.21%(5)
Ratio of net investment income to average
net assets prior to expense limitation... 4.20%(5) 4.10% 4.03% 4.35%(5) 3.69%(5) 4.20%(5) 4.12%(5)
Portfolio turnover........................ 14.68%(5) 42.12% 55.72% 2.21% 22.94% 14.68%(5) 42.12%
</TABLE>
- ------------------
(1) Commencement of operations.
(2) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax. For Class A Shares for the years ended October 31, 1994 and
1993, $.01 and $.02, respectively, per share of the distributions from net
investment income were subject to state income tax.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(5) Annualized.
See accompanying notes
28 1997 semi-annual report
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
TAX-FREE UTAH FUND - A CLASS
---------------------------------------------------------------------------------------
Six Months Two Months Period From
Ended Year Ended Year Ended Ended Year Ended Year Ended 10/5/92(1)
6/30/97 12/31/96 12/31/95 12/31/94 10/31/94 10/31/93 to 10/31/92
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $10.84 $11.04 $ 9.80 $9.94 $11.07 $10.00 $10.00
Income from investment operations:
Net investment income..................... 0.28 0.55 0.59 0.10 0.60 0.65 -
Net realized and unrealized gain (loss)
from investments......................... 0.07 (0.20) 1.24 (0.15) (1.07) 1.07 -
------ ------ ------ ------ ------ ------ ------
Net increase (decrease) in net assets
from investment operations .............. 0.35 0.35 1.83 (0.05) (0.47) 1.72 -
------ ------ ------ ------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income(2)... (0.28) (0.55) (0.59) (0.09) (0.60) (0.65) -
Distributions from net realized gain on
security transactions.................... - - - - (0.06) - -
------ ------ ------ ------ ------ ------ ------
Total dividends and distributions......... (0.28) (0.55) (0.59) (0.09) (0.66) (0.65) -
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period............. $10.91 $10.84 $11.04 $9.80 $9.94 $11.07 $10.00
====== ====== ====== ====== ====== ====== ======
Total return(3)............................ 3.36% 3.35% 19.06% (0.41%) (4.50%) 17.54% 0.00%
Ratios and supplemental data:
Net assets, end of period (000 omitted)... $3,211 $3,861 $4,142 $3,728 $4,054 $3,913 $19
Ratio of expenses to average net assets(4) 0.68%(5) 0.68% 0.38% 0.11%(5) 0.10% 0.00% 0.00%
Ratio of expenses to average net assets
prior to expense limitation.............. 1.51%(5) 1.25% 1.25% 1.14%(5) 1.25% 1.25% 0.00%
Ratio of net investment income to average
net assets............................... 5.27%(5) 5.14% 5.51% 6.38%(5) 5.64% 5.65% 0.00%
Ratio of net investment income to average
net assets prior to expense limitation... 4.44%(5) 4.57% 4.64% 5.35%(5) 4.49% 4.40% 0.00%
Portfolio turnover........................ 47.82%(5) 39.58% 35.28% 0.00% 2.77% 44.54% 0.00%
</TABLE>
- -------------------
(1) Commencement of operations.
(2) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax. For the years ended December 31, 1993 and 1992, $.01 per Class A
Share of the distributions from net investment income were subject to state
income tax.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(5) Annualized.
See accompanying notes
1997 semi-annual report 29
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
TAX-FREE UTAH FUND - B CLASS
------------------------------------------------------
Six Months Period From
Ended Year Ended 5/27/95(1)
6/30/97 12/31/96 TO 12/31/95
(Unaudited)
<S> <C> <C> <C>
Net asset value, beginning of period............................... $10.83 $11.04 $10.63
Income from investment operations:
Net investment income............................................. 0.23 0.47 0.30
Net realized and unrealized gain (loss) from investments.......... 0.08 (0.21) 0.39
------ ------ ------
Net increase (decrease) in net assets from investment operations.. 0.31 0.26 0.69
------ ------ ------
Less dividends and distributions:
Dividends from net investment income(2)........................... (0.23) (0.47) (0.28)
Distributions from net realized gain on security transactions..... - - -
------ ------ ------
Total dividends and distributions................................. (0.23) (0.47) (0.28)
------ ------ ------
Net asset value, end of period..................................... $10.91 $10.83 $11.04
====== ====== ======
Total return(3).................................................... 3.01% 2.47% 6.60%
Ratios and supplemental data:
Net assets, end of period (000 omitted)........................... $511 $397 $363
Ratio of expenses to average net assets(4)........................ 1.43%(5) 1.46% 0.92%(5)
Ratio of expenses to average net assets prior to
expense limitation............................................... 2.26%(5) 2.00% 2.00%(5)
Ratio of net investment income to average net assets.............. 4.44%(5) 4.34% 4.74%(5)
Ratio of net investment income to average net assets prior
to expense limitation............................................ 3.61%(5) 3.80% 3.66%(5)
Portfolio turnover................................................ 47.82%(5) 39.58% 35.28%
</TABLE>
- ----------------
(1) Commencement of operations.
(2) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax. For the years ended December 31, 1993 and 1992, $.01 per Class A
Share of the distributions from net investment income were subject to state
income tax.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
(5) Annualized.
See accompanying notes
30 1997 semi-annual report
<PAGE>
THE DELAWARE-VOYAGEUR FUNDS
NOTES TO FINANCIAL STATEMENTS --
JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
Delaware-Voyageur Tax-Free Colorado Fund (formerly Voyageur Colorado Tax Free
Fund) ("Tax-Free Colorado Fund"), series of the Voyageur Mutual Funds II,
Inc. and Delaware-Voyageur Tax-Free North Dakota Fund (formerly Voyageur
North Dakota Tax Free Fund) ("Tax-Free North Dakota Fund"), series of the
Voyageur Tax Free Funds, Inc are registered under the Investment Company Act
of 1940 (as amended) as open-end management investment companies. Tax-Free
Colorado Fund is registered as diversified and Tax-Free North Dakota Fund is
registered as non-diversified. Delaware-Voyageur Tax-Free New Mexico Fund
(formerly Voyageur New Mexico Tax Free) ("Tax-Free New Mexico Fund"), and
Delaware-Voyageur Tax-Free Utah Fund (formerly Voyageur Utah Tax Free Fund)
("Tax-Free Utah Fund"), series of the Voyageur Investment Trust, are
Massachusetts business trusts registered under the Investment Company Act of
1940 (as amended) as non-diversified, open-end management investment
companies. Tax-Free Colorado Fund, Tax-Free North Dakota Fund, Tax-Free New
Mexico Fund and Tax-Free Utah Fund, referred to separately as "Fund" or
collectively as "Funds" seek high current income free from both federal and
state income taxes by investing in investment grade municipal bonds. The
Funds each offer 3 classes of shares.
1. Fund Reorganization
On April 30, 1997, Lincoln National Corporation ("LNC") acquired Voyageur
Fund Manager Inc.'s ("Voyageur") parent, Dougherty Financial Group, Inc.
("DFG") pursuant to an agreement and plan of merger dated January 15, 1997,
in which LNC would acquire DFG including the mutual fund investment advisory
business of DFG conducted by Voyageur. Upon completion of the acquisition,
Delaware Management Company, Inc. ("DMC") became the investment adviser to
the Funds, Delaware Distributors, L.P. ("DDLP") became the distributor for
the Funds, Delaware Service Company, Inc. ("DSC") became the transfer,
dividend-disbursing, shareholder servicing agent and accounting service agent
for the Funds.
2. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of
such securities. Money market instruments having less than 60 days to
maturity are valued at amortized cost which approximates market value. Other
securities and assets for which market quotations are not readily available
are valued at fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
Federal Income Taxes - Each Fund intends to continue to qualify as a
regulated investment company and make the requisite distributions to
shareholders. Accordingly, no provision for federal income taxes has been
made in the financial statements. Income and capital gain distributions are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Funds on the basis of daily net assets of each class. Distribution
expenses relating to a specific class are charged directly to that class.
<PAGE>
Other - Expenses common to all Funds within the Delaware-Voyageur Funds are
allocated amongst the Funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the sale
of investment securities are those of the specific securities sold. Interest
income is recorded on the accrual basis. Original issue discounts are
accreted to interest income over the lives of the respective securities. The
Funds declare dividends from net investment income daily and pay them
monthly. Capital gains are distributed annually.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
3. Investment Management and Other Transactions with Affiliates
Commencing May 1, 1997, and in accordance with the terms of the Investment
Management Agreement, the Fund pays DMC the Investment Manager of each Fund,
an annual fee, which is calculated daily on the average daily net assets of
each Fund. The management fee rates are as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
COLORADO NORTH DAKOTA NEW MEXICO UTAH
FUND FUND FUND FUND
-------- ------------ ---------- --------
<S> <C> <C> <C> <C>
Management fee
as a percentage of
average daily net assets
(per annum).................... 0.50% 0.50% 0.50% 0.50%
</TABLE>
DMC has elected to waive their fees and reimburse each Fund to the extent
that annual operating expenses exclusive of 12b-1 distribution fees, taxes,
interest, brokerage commissions and extraordinary expenses, exceed 0.56%,
0.75%, 0.75%, 0.43% of average daily net assets for the Tax-Free Colorado
Fund, Tax-Free North Dakota Fund, Tax-Free New Mexico Fund and Tax-Free Utah
Fund, respectively, through December 31, 1997. Total expenses absorbed by DMC
for the two month period ended June 30, 1997
are as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
COLORADO NORTH DAKOTA NEW MEXICO UTAH
FUND FUND FUND FUND
-------- ------------ ---------- --------
<S> <C> <C> <C> <C>
Total expenses absorbed
by DMC).................... $0 $0 $0 $1,539
</TABLE>
Prior to May 1, 1997, the Funds had an investment advisory and management
agreement with Voyageur. Voyageur received a fee for its investment advisory
and management services based on the average daily net assets of each Fund at
an annual rate of .50%. During the period January 1, 1997 to April 30, 1997,
Voyageur waived $12,711 of the Tax-Free Utah Fund.
1997 semi-annual report 31
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Commencing May 1, 1997, the Funds have engaged DSC, an affiliate of DMC, to
serve as dividend disbursing, transfer agent and accounting services agent for
the Fund. For the two month period ended June 30, 1997, the amounts expensed for
each Fund were as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
COLORADO NORTH DAKOTA NEW MEXICO UTAH
FUND FUND FUND FUND
-------- ------------ ---------- --------
<S> <C> <C> <C> <C>
Dividend disbursing, transfer
agent fees and other
expenses........................ $83,562 $14,205 $8,357 $3,343
Accounting fees................. $22,763 $2,005 $1,328 $259
</TABLE>
Prior to May 1, 1997, the Funds paid a fee to Voyageur for acting as the
Fund's dividend disbursing, administrative and accounting services agent.
Each Fund is also responsible for reimbursing Voyageur's out-of-pocket
expense in connection with the performance of dividend-disbursing,
administrative and accounting services.
On June 30, 1997, the Funds had payable to affiliates as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
COLORADO NORTH DAKOTA NEW MEXICO UTAH
FUND FUND FUND FUND
-------- ------------ ---------- --------
<S> <C> <C> <C> <C>
Investment Management
fee payable to DMC.............. $148,615 $13,299 $8,617 $1,596
Dividend disbursing, transfer
agent fees, accounting fees
and other expenses payable
to DSC.......................... $28,288 $3,083 $1,616 $363
Other expenses payable
to DMC and affiliates........... $16,604 $3,757 $1,895 $640
</TABLE>
Commencing May 1, 1997, and pursuant to the Distribution Agreement, the Funds
pay DDLP, the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.25% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Class for each Series. For the period
May 1, 1997, to June 30, 1997, DDLP voluntarily waived $63,894, for the
Tax-Free Colorado Fund A Class, $9,124 and $650 for the Tax-Free North Dakota
Fund A Class and B Class shares, respectively and $4,873 and $171 for the
Tax-Free New Mexico Fund A Class and B Class shares, respectively and $1,098
and $73 for the Tax-Free Utah Fund A Class and B Class shares, respectively.
For the two-month period ended June 30, 1997, DDLP earned commissions on
sales of the Fund A Class shares for each Fund as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
COLORADO NORTH DAKOTA NEW MEXICO UTAH
FUND FUND FUND FUND
-------- ------------ ---------- --------
<S> <C> <C> <C> <C>
$46,250 $925 $2,300 $6
</TABLE>
<PAGE>
Prior to May 1, 1997 each class of shares had a Distribution Agreement with
Voyageur Fund Distributors, Inc. ("VFD"). Under the plan the Funds paid VFD a
fee at an annual rate of 0.25% of the average daily net assets of the Class A
shares and 1.00% of the average daily net assets of the Class B and C shares.
For the period January 1, 1997, to April 30, 1997, VFD voluntarily waived
$127,151 for the Tax-Free Colorado Fund A Class, $19,439 and $1,263 for the
Tax Free North Dakota Fund A Class and B Class shares, respectively, $9,754
and $322 for the Tax-Free New Mexico Fund A Class and B Class shares,
respectively, and $2,334 and $145 for the Tax-Free Utah Fund A Class and B
Class shares, respectively.
Certain officers of DMC, DSC and DDLP are officers, directors and/or
employees of the Fund. These officers, directors and employees are paid no
compensation by the Fund.
4. Investments
During the period ended June 30, 1997, the Fund made purchases and sales of
investment securities other than U.S. government securities and temporary
cash investments for each Fund as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
COLORADO NORTH DAKOTA NEW MEXICO UTAH
FUND FUND FUND FUND
-------- ------------ ---------- --------
<S> <C> <C> <C> <C>
Purchases....................... 77,763,944 7,409,669 1,505,000 955,868
Sales........................... 84,348,649 11,335,754 2,479,470 1,312,627
</TABLE>
At June 30, 1997, the aggregate unrealized appreciation (depreciation) of
securities for federal income tax purposes for each Fund were as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
COLORADO NORTH DAKOTA NEW MEXICO UTAH
FUND FUND FUND FUND
-------- ------------ ---------- --------
<S> <C> <C> <C> <C>
Aggregate unrealized
appreciation................... 13,409,741 1,270,847 1,029,746 128,046
Aggregate unrealized
depreciation................... (106,136) (1,024) 0 (399)
Net unrealized
appreciation................... 13,303,605 1,269,823 1,029,746 127,647
</TABLE>
For federal income tax purposes, as of December 31, 1996, Tax-Free Colorado
Fund had a capital loss carryover of $9,191,756 that will expire in 2003
through 2004, Tax-Free North Dakota Fund had a capital loss carryover of
$461,009 that will expire in 2003 through 2004, Tax-Free New Mexico Fund had
a capital loss carryover of $891,021 that will expire in 2001 through 2004,
and Tax-Free Utah Fund had a capital loss carryover of $94,313 that will
expire in 2001 through 2004.
32 1997 semi-annual report
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. Capital Stock
<TABLE>
<CAPTION>
Tax-Free Colorado Fund Tax-Free North Dakota Fund Tax-Free New Mexico Fund Tax-Free Utah Fund
---------------------- -------------------------- ------------------------ ----------------------
Six Months Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended Ended Year Ended
6/30/97 12/31/96 6/30/97 12/31/96 6/30/97 12/31/96 6/30/97 12/31/96
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ---------- ----------- ----------- ----------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class.............. 1,385,998 2,051,210 48,818 175,611 61,435 251,813 13,493 17,149
B Class.............. 144,199 282,979 11,552 33,146 10,187 34,046 9,265 2,314
C Class.............. 28,467 74,401 -- 2,582 5,828 32,608 N/A N/A
Shares issued upon
reinvestment of dividends
from net investment
income:
A Class.............. 637,407 1,139,876 53,047 101,442 25,775 39,919 3,310 8,069
B Class.............. 9,247 6,461 1,175 1,687 943 1,406 899 1,507
C Class.............. 3,336 4,619 81 68 627 394 N/A N/A
--------- --------- ------- ------- ------- ------- ------ ------
2,208,654 3,559,546 114,673 314,536 104,795 360,186 26,967 29,039
--------- --------- ------- ------- ------- ------- ------ ------
Shares repurchased:
A Class.............. (3,362,916) (5,983,150) (383,360) (458,594) (168,319) (392,056) (78,857) (44,175)
B Class.............. (12,742) (53,076) (1) (4,529) 0 (17,472) 0 0
C Class.............. (29,461) (33,412) (274) (770) (13,240) (1,383) N/A N/A
--------- --------- ------- ------- ------- ------- ------ ------
(3,405,119) (6,069,638) (383,635) (463,893) (181,559) (410,911) (78,857) (44,175)
--------- --------- ------- ------- ------- ------- ------ ------
Net Decrease.......... (1,196,465) (2,510,092) (268,962) (149,357) (76,764) (50,725) (51,890) (15,136)
========= ========= ======= ======= ======= ======= ====== ======
</TABLE>
6. Concentration of Credit Risk
The Funds concentrate their investments in securities mainly issued by each
specific states' municipalities. The value of these investments may be
adversely affected by new legislation within the state, regional or local
economic conditions, and differing levels of supply and demand for municipal
bonds. Many municipalities insure repayment for their obligations. Although
bond insurance reduces the risk of loss due to default by an issuer, such
bonds remain subject to the risk that market value may fluctuate for other
reasons and there is no assurance that the insurance company will meet its
obligations. These securities have been identified in the Statement of Net
Assets.
The Funds may invest up to 15% of their total assets in illiquid securities
which may include securities with contractual restrictions on resale,
securities exempt from registration under Rule 144A of the Securities Act of
1933, as amended, and other securities which may not be readily marketable.
The relative illiquidity of some of these securities may adversely affect the
Fund's ability to dispose of such securities in a timely manner and at a fair
price when it is necessary to liquidate such securities. These securities, if
any, have been denoted in the Statement of Net Assets.
1997 semi-annual report 33
<PAGE>
VOYAGEUR FUNDS
SHAREHOLDER MEETING RESULTS
- --------------------------------------------------------------------------------
A meeting of the funds' shareholders was held on April 11, 1997. The matters
submitted to a vote of shareholders were the election of new directors and
the approval of a new investment management agreement. Whenever there is a
change in control of an investment manager, the Investment Company Act of
1940 requires shareholders to vote on a new investment management agreement.
TAX-FREE COLORADO FUND
<TABLE>
<CAPTION>
NUMBER OF VOTES
-------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
-------------------------------------------------
<S> <C> <C> <C>
Walter P. Babich....................................... 22,335,542 280,031 --
Anthony D. Knerr....................................... 22,345,502 270,071 --
Ann R. Leven........................................... 22,339,320 276,253 --
W. Thacher Longstreth.................................. 22,322,578 292,995 --
Thomas F. Madison...................................... 22,351,562 264,011 --
Jeffrey J. Nick........................................ 22,349,132 266,441 --
Charles E. Peck........................................ 22,335,542 280,031 --
Wayne A. Stork......................................... 22,345,502 270,071 --
Approval of New Investment Management Agreement........ 20,246,339 762,595 1,606,639
TAX-FREE NORTH DAKOTA FUND
NUMBER OF VOTES
-------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
-------------------------------------------------
Walter P. Babich....................................... 2,088,336 15,232 --
Anthony D. Knerr....................................... 2,088,336 15,232 --
Ann R. Leven........................................... 2,088,336 15,232 --
W. Thacher Longstreth.................................. 2,087,811 15,757 --
Thomas F. Madison...................................... 2,088,336 15,232 --
Jeffrey J. Nick........................................ 2,088,336 15,232 --
Charles E. Peck........................................ 2,088,336 15,232 --
Wayne A. Stork......................................... 2,088,336 15,232 --
Approval of New Investment Management Agreement........ 1,956,424 30,124 117,020
TAX-FREE NEW MEXICO FUND
NUMBER OF VOTES
-------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
-------------------------------------------------
Walter P. Babich....................................... 1,355,006 33,375 --
Anthony D. Knerr....................................... 1,356,595 31,786 --
Ann R. Leven........................................... 1,355,997 32,384 --
W. Thacher Longstreth.................................. 1,354,408 33,973 --
Thomas F. Madison...................................... 1,356,595 31,786 --
Jeffrey J. Nick........................................ 1,355,456 32,925 --
Charles E. Peck........................................ 1,355,006 33,375 --
Wayne A. Stork......................................... 1,356,595 31,786 --
Approval of New Investment Management Agreement........ 1,100,586 41,096 246,699
TAX-FREE UTAH FUND
NUMBER OF VOTES
-------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
-------------------------------------------------
Walter P. Babich....................................... 298,168 14,841 --
Anthony D. Knerr....................................... 298,168 14,841 --
Ann R. Leven........................................... 298,168 14,841 --
W. Thacher Longstreth.................................. 298,168 14,841 --
Thomas F. Madison...................................... 298,168 14,841 --
Jeffrey J. Nick........................................ 298,168 14,841 --
Charles E. Peck........................................ 298,168 14,841 --
Wayne A. Stork......................................... 298,168 14,841 --
Approval of New Investment Management Agreement........ 268,647 14,841 29,521
</TABLE>
34 1997 semi-annual report
<PAGE>
D E L A W A R E G R O U P O F F U N D S
FOR GROWTH OF CAPITAL
Aggressive Growth Fund
Trend Fund
DelCap Fund
Small Cap Value Fund
U.S. Growth Fund
Growth Stock Fund
Tax-Efficient Equity Fund
FOR TOTAL RETURN
Quantum Fund
Blue Chip Fund
Devon Fund
Decatur Total Return Fund
Decatur Income Fund
Delaware Fund
FOR INTERNATIONAL DIVERSIFICATION
Emerging Markets Fund
New Pacific Fund
World Growth Fund
International Equity Fund
Global Assets Fund
Global Bond Fund
FOR CURRENT INCOME
Delchester Fund
Strategic Income Fund
U.S. Government Fund
Delaware-Voyageur
U.S. Government
Securities Fund
Limited-Term Government Fund
FOR TAX-EXEMPT CURRENT INCOME
National High Yield Municipal Bond Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
State Tax-Exempt Funds*
MONEY MARKET FUNDS
Delaware Cash Reserve
U.S. Government Money Fund
Tax-Free Money Fund
* Available for the following states: AZ, CA, CO, FL, ID, IA, KS, MN, MO,
ND, NJ, NM, NY, OH, OR, PA, UT, WA, WI. Insured and Intermediate bond funds
are available in selected states.
funds
COMPLETE INFORMATION ON ANY DELAWARE GROUP FUND CAN BE FOUND IN EACH FUND'S
CURRENT PROSPECTUS. PROSPECTUSES FOR ALL DELAWARE GROUP FUNDS ARE AVAILABLE
FROM YOUR FINANCIAL ADVISER. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
<PAGE>
THIS SEMI-ANNUAL REPORT IS FOR THE INFORMATION OF TAX-FREE COLORADO FUND,
TAX-FREE NORTH DAKOTA FUND, TAX-FREE NEW MEXICO FUND AND
TAX-FREE UTAH FUND SHAREHOLDERS, BUT IT MAY BE USED WITH PROSPECTIVE
INVESTORS WHEN PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS FOR EACH FUND,
WHICH SET FORTH DETAILS ABOUT CHARGES, EXPENSES, INVESTMENT OBJECTIVES AND
OPERATING POLICIES OF EACH FUND. YOU SHOULD READ THE PROSPECTUS CAREFULLY
BEFORE YOU INVEST. SUMMARY INVESTMENT RESULTS ARE DOCUMENTED IN THE FUNDS
CURRENT STATEMENT OF ADDITIONAL INFORMATION. THE FIGURES IN THIS REPORT
REPRESENT PAST RESULTS WHICH ARE NOT A GUARANTEE OF FUTURE RESULTS. THE
RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUNDS WILL FLUCTUATE SO
THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL
COST.
INVESTMENT MANAGER
Delaware Management Company, Inc.
Philadelphia
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING AND
TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia
1818 Market Street
Philadelphia, PA 19103-3682
FOR SHAREHOLDERS
1.800.523.1918
FOR SECURITIES DEALERS
1.800.362.7500
FOR FINANCIAL INSTITUTIONS
REPRESENTATIVES
1.800.659.2265
Be sure to consult your financial adviser when making investments. Mutual
funds can be a valuable part of your financial plan: however, shares of the
Funds are not FDIC or NCUSIF insured, are not guaranteed by any bank or any
credit union, and involve investment risk, including the possible loss of the
principal amount invested. Shares of the Funds are not bank or credit union
deposits.
(Copyright) Delaware Distributors, L.P.
DELAWARE
GROUP
======================
Philadelphia o London
Printed in the USA on
recycled paper
(156)
SA-VOY3 [6/97] PP8/97
