<PAGE>
FOR TAX-EXEMPT INCOME
Tax-Free Idaho Fund
Tax-Free Iowa Fund
Tax-Free Kansas Fund
Tax-Free Missouri Insured Fund
Tax-Free North Dakota Fund
Tax-Free Oregon Insured Fund
Tax-Free Washington Insured Fund
Tax-Free Wisconsin Fund
service and guidance
professional management
1998
Annual
Report
goals
(various photos demonstrating services and
guidance professional management and goals)
DELAWARE
INVESTMENTS
===================
Philadelphia*London
<PAGE>
A TRADITION OF SOUND INVESTING
commitment
A Commitment
To Our Investors
Delaware Investments has a money management tradition that dates back to 1929.
We have a long and distinguished history of helping individuals reach their
financial goals through a full range of investment opportunities that include
municipal bond mutual funds.
Headquartered in Philadelphia with an international affiliate in London,
the Delaware organization is one of the nation's leading municipal bond fund
managers.
Delaware Investments manages more than $40 billion in mutual fund assets
and institutional advisory accounts. We offer a wide variety of tax-advantaged
equity and fixed-income investments, retirement plan accounts, IRAs, investment
accounts for single and multi-manager variable annuities and closed-end funds.
Delaware's Tax-Advantaged Investment Lineup
* Tax-Efficient Equity Fund
* Municipal Bond Funds in 19 States
* Four National Tax-Exempt Bond Funds
* Tax-Free Money Fund
Complete information on any fund offered by Delaware Investments can be found in
each fund's current prospectus. Prospectuses for all funds offered by Delaware
Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.
tradition
tax-exempt income
(photo of keyboard)
(photo of illustation from tax-exempt income brochure)
Fund Objectives
Each Tax-Free Fund and Insured Fund seeks as high a level of current income
exempt from federal income tax and from the personal income tax, if any, of a
Fund's particular state, as is consistent with preservation of capital.
Table of Contents
LETTER TO SHAREHOLDERS Page 1
PORTFOLIO MANAGER'S REVIEW Page 3
TAX-FREE IDAHO FUND Page 4
TAX-FREE IOWA FUND Page 5
TAX-FREE KANSAS FUND Page 6
TAX-FREE MISSOURI INSURED FUND Page 7
TAX-FREE NORTH DAKOTA FUND Page 8
TAX-FREE OREGON INSURED FUND Page 9
TAX-FREE WASHINGTON INSURED FUND Page 10
TAX-FREE WISCONSIN FUND Page 12
PERFORMANCE SUMMARY Page 13
STATEMENTS OF NET ASSETS Page 19
FINANCIAL HIGHLIGHTS Page 39
<PAGE>
September 8, 1998
for tax-exempt
income
1
Dear Shareholder:
FISCAL 1998 WAS A CHALLENGING BUT rewarding time for Delaware Investments' eight
midwest and northwest municipal bond funds. Tax-exempt bonds provided
attractive, high single-digit returns during a period of increased stock market
volatility and global economic uncertainty.
Since August 1997, municipal bond supplies have increased substantially
in many states, with education, health care and transportation issues leading
the way. This provided the Funds' portfolio manager, Elizabeth H. Howell, ample
opportunity to select bonds with attractive yields, total return potential and
favorable credit characteristics.
We have changed the Funds' fiscal year end to August 31 to match the
fiscal year end of Delaware Investments' national municipal bond funds. We
believe this alignment may increase operational efficiency over the long term.
From now on, you will receive an annual report by early November and a
semi-annual report by May.
Total returns of each Fund in fiscal 1998 were competitive with the
unmanaged Lehman Brothers Bond Indexes shown below as well as each Fund's
respective peer group (for Class A shares at net asset value with distributions
reinvested).
Of special note is that the total returns provided by each of the eight
state funds in this report outpaced the +8.10% total return of the Standard &
Poor's 500 Index for the 12 months ended August 31, 1998.
FOR BOND INVESTORS, THE U.S. ECONOMIC ENVIRONMENT HAS BEEN CLOSE TO IDEAL.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
- ----------------------------------------------------------------------------------------------------
January 1, 1998 12 Months Ended
to August 31, 1998 August 31, 1998
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Tax-Free Idaho Fund A Class +4.19% +9.02%
Tax-Free Iowa Fund A Class +3.98% +8.18%
Tax-Free North Dakota Fund A Class +4.35% +8.37%
Tax-Free Wisconsin Fund A Class +3.80% +8.13%
Lipper Other States Municipal Debt Fund Average (74 funds) +3.89% +7.74%
- ----------------------------------------------------------------------------------------------------
Tax-Free Kansas Fund A Class +4.14% +9.17%
Lipper Kansas Municipal Debt Fund Average (12 funds) +3.88% +7.67%
- ----------------------------------------------------------------------------------------------------
Tax-Free Missouri Insured Fund A Class +3.70% +8.12%
Lipper Missouri Municipal Debt Fund Average (23 funds) +3.84% +7.78%
- ----------------------------------------------------------------------------------------------------
Tax-Free Oregon Insured Fund A Class +4.33% +8.78%
Lipper Oregon Municipal Debt Fund Average (25 funds) +3.93% +7.78%
- ----------------------------------------------------------------------------------------------------
Tax-Free Washington Insured Fund A Class +4.59% +9.44%
Lipper Washington Municipal Debt Fund Average (8 funds) +4.41% +8.71%
- ----------------------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +4.54% +8.65%
Lehman Brothers Insured Municipal Bond Index +4.70% +9.19%
- ----------------------------------------------------------------------------------------------------
</TABLE>
All performance shown above is at 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 as shown on pages 13 to 18.
The unmanaged Lehman Brothers Indexes are composed of bonds with a variety of
quality ratings from many states. Past performance does not guarantee future
results.
<PAGE>
for tax-exempt
income
2
discipline
While such results might seem unusual given the ebullient stock market of the
1990s, extended periods of higher returns from bonds rather than stocks have
been common in the 20th Century.
For example, bonds (as measured by the Lehman Brothers Municipal Bond
Index) outpaced stocks (as measured by the S&P 500) for the 10-year period from
1972 to 1982, a time of high inflation, recession and global political
instability.
Fortunately for today's tax-exempt bond investors, inflation is low and,
in the view of most economists, a domestic recession is unlikely. Most states
enjoy high credit ratings and have been benefiting from rising tax revenues.
Indeed, in the summer of 1998, income and other taxes were pouring into
municipal coffers at the fastest pace in eight years, according to the Nelson
Rockefeller Institute of Government, a think tank in Albany, New York.
We view the municipal debt market's current prospects as compelling,
especially when viewed against taxable fixed-income alternatives. Cash flows
into municipal bond mutual funds have accelerated in recent months as equity
investors have sought to diversify their portfolios, reduce risk and minimize
taxes.
We encourage you to review your asset allocation plan with your
financial and tax advisers to examine the potential benefits of increasing your
position in a single-state tax-exempt fund and other tax-advantaged investment
opportunities offered through Delaware Investments.
Sincerely,
/s/ Wayne A. Stork
- ------------------
Wayne A. Stork
Chairman
/s/ Jeffrey J. Nick
- -------------------------------------
Jeffrey J. Nick
President and Chief Executive Officer
High quality municipal bonds offered the highest income potential relative to
Treasuries in more than nine years at the end of fiscal 1998.
MUNICIPAL BONDS OFFER GOOD VALUE COMPARED TO TREASURIES
MARCH 1989 TO AUGUST 1998
Municipal Bond Yields/Treasury Bond Yields
Percent of Treasury Yield
Mar. '89 83.09% Dec. '93 82.04%
Jun. '89 85.26% Mar. '94 86.76%
Sep. '89 87.41% Jun. '94 82.76%
Dec. '89 85.93% Sep. '94 81.30%
Mar. '90 82.96% Dec. '94 83.80%
Jun. '90 84.54% Mar. '95 80.05%
Sep. '90 81.03% Jun. '95 89.13%
Dec. '90 85.00% Sep. '95 89.51%
Mar. '91 84.27% Dec. '95 87.50%
Jun. '91 82.72% Mar. '96 85.57%
Sep. '91 84.55% Jun. '96 83.43%
Dec. '91 86.56% Sep. '96 80.13%
Mar. '92 82.91% Dec. '96 82.15%
Jun. '92 80.41% Mar. '97 81.04%
Sep. '92 84.02% Jun. '97 80.36%
Dec. '92 82.52% Sep. '97 81.97%
Mar. '93 83.79% Dec. '97 84.84%
Jun. '93 81.69% Mar. '98 86.50%
Sep. '93 86.31% Jun. '98 89.73%
Aug. '98 93.80%
The above chart represents the percentage of income that the average 30-year
AAA-rated general obligation municipal bond provided compared to a 30-year
U.S. Treasury bond. Principal and interest of municipal bonds, unlike
Treasuries, are not guaranteed by the U.S. government. Source: Bloomberg
Business News.
<PAGE>
for tax-exempt
income
3
Portfolio Manager's Review
BY ELIZABETH H. HOWELL
Vice President/Senior Portfolio Manager
September 11, 1998
SINCE AUGUST 1997, TAX-EXEMPT BOND prices have benefited from strong domestic
growth, high average credit quality and state fiscal prudence. The one problem
facing the municipal bond market has been a huge increase in bond supplies as
municipalities have sought to refinance debt at lower interest rates.
The bond market absorbed unusually large increases in volume in many
regions of the country, including Iowa, Missouri and Kansas, states that
historically have not issued many bonds. Supplies in these three states have
risen more than 70% in 1998 from year earlier levels, and are up 43.7%
nationwide according to The Bond Buyer, a trade publication.
Yet even with all this additional supply, municipal bonds provided
excellent returns during fiscal 1998. In fact, for the six months ended August
31, 1998 the unmanaged Lehman Brothers Municipal Bond Index rose +3.44% while
stocks, as measured by the unmanaged Standard & Poor's 500 Index, declined
8.08%.
In managing each of the eight Funds in this report during fiscal 1998,
we sought an effective mix of average coupon, call date, and effective maturity.
As interest rates fell, we believed it was important to maintain a portfolio
with good call protection features and slightly longer-than-average durations.
As of August 31, 1998, prices had rallied so much during fiscal 1998
that 30-year bond yields had fallen to 5.24%, the lowest level in three decades.
Just 12 months earlier, long-term Treasuries yielded 6.61%.
U.S. government debt became the safe haven of choice for many
overseas investors as many emerging market economies grappled with recession,
currency
FOR THE SIX MONTHS ENDED AUGUST 31, 1998 THE UNMANAGED LEHMAN BROTHERS MUNICIPAL
BOND INDEX ROSE +3.44% WHILE STOCKS, AS MEASURED BY THE UNMANAGED STANDARD &
POOR'S 500 INDEX, DECLINED 8.08%.
CREDIT QUALITY
TAX-FREE IDAHO, IOWA, KANSAS, NORTH DAKOTA AND WISCONSIN FUNDS
August 31, 1998
Tax-Free Tax-Free Tax-Free Tax-Free North Tax-Free
Idaho Fund Iowa Fund Kansas Fund Dakota Fund Wisconsin Fund
- --------------------------------------------------------------------------------
AAA 21.9% 26.0% 25.4% 31.2% 36.0%
AA 7.0% 0% 14.1% 27.8% 6.3%
A 24.6% 46.3% 6.4% 13.7% 16.0%
BBB 33.8% 15.5% 13.9% 12.0% 11.5%
B & Unrated 12.7% 12.2% 40.2% 15.3% 30.2%
review
<PAGE>
for tax-exempt
income
4
devaluation and political instability. Municipal bond prices also rose,
though not nearly as much as Treasuries.
In our view, the strong performance of Treasuries relative to other
bonds during the summer of 1998 was temporary. A sharp drop in global equity
markets created unusually high demand for the safest fixed-income securities. At
current price levels, we believe high quality, long-term municipal bonds offer
exceptional value and relatively modest risks.
Given the high volume of U.S. stock trading this past summer, we believe
many equity mutual fund investors could receive large capital gains
distributions this fall - and thus have higher 1998 income tax liabilities. We
feel many equity investors will see it makes more sense from a tax perspective
to reduce their portfolios' risk profile by allocating assets to municipal bonds
rather than Treasuries. That is because Treasury income increases an investor's
federal and, in many cases, state tax burden.
TAX-FREE IDAHO FUND
Tax-Free Idaho Fund provided a strong total return of +9.02% for the 12 months
ended August 31, 1998 (for Class A shares at net asset value with distributions
reinvested). The Fund's results outpaced the +7.74% average of its peers, as
measured by Lipper Analytical Services and shown on page 1.
By keeping the Fund's duration slightly longer than other mutual funds
investing in Idaho bonds, we were able to provide exceptionally attractive
results. We provided higher-than-average tax-exempt income and captured most of
the bond market's total return potential.
During fiscal 1998, more than half of Tax-Free Idaho Fund's net assets
were invested in investment grade (mostly A and BBB) and unrated bonds.
Prices of unrated securities rose more than higher quality bonds as the
state's economy remained strong and investors were attracted by relatively
higher yields.
Overall, the state's municipalities issued $477 million in bonds for the
first eight months of 1998, a relatively modest amount compared to most states,
according to The Bond Buyer. Still, this amount was a 48% increase over the same
period in 1997.
In selecting bonds for Tax-Free Idaho Fund, we attempt to balance the
portfolio with investment grade and unrated bonds that produce an above-average
interest rate and bonds that can contribute to total return. During the year, we
modestly increased our weighting in the pollution control and higher education
sectors and exchanged some higher coupon hospital bonds for discount bonds.
For example, in July we purchased 5.45% bonds issued by the Elks
Rehabilitation Hospital in Boise, which specializes in helping victims of brain
injury and stroke. We acquired an approximately $1 million position at a
discount to par in July and by August 31 the bonds had appreciated to a price of
$100.43. With a bond rating of
DURING FISCAL 1998, MORE THAN HALF OF TAX-FREE IDAHO FUND'S NET ASSETS WERE
INVESTED IN INVESTMENT GRADE (MOSTLY A AND BBB) AND UNRATED BONDS.
tax-free
idaho
(photo of family on beach)
<PAGE>
for tax-exempt
income
5
BBB from S&P, the hospital has been consistently profitable for the past five
years.
As of late summer, Idaho's unemployment rate was 4.9%, low by historical
standards. Thanks in part to tourism, state economists expect Idaho's economy to
grow faster than the national economy over the next several years, although the
short-term outlook for the state's high technology sector is unclear. Micron
Technology, a leading employer, reported in July that demand for dynamic random
access memory chips (DRAMs - a key product in many computers), is beginning to
recover after a sharp drop during the first half of calendar 1998.
TAX-FREE IOWA FUND
Tax-Free Iowa Fund provided a total return of +8.18% for the 12 months ended
August 31, 1998 (for Class A shares at net asset value with distributions
reinvested). This exceeded the +7.74% average return of the Fund's peer group
for the period, as measured by Lipper Analytical Services and shown on page 1.
Iowa municipalities have historically issued relatively few bonds that
are exempt from both federal and state taxes. Although bond supplies increased
more than 70% to $1.3 billion from a year ago, according to The Bond Buyer,
so-called double tax-exempt bonds remained scarce. Still, we boosted the amount
of your Fund's net assets invested in Iowa bonds and reduced the Fund's position
in territorial bonds (bonds issued by Puerto Rico, Guam and the Virgin Islands)
in fiscal 1998.
Territorial bonds, which are exempt from federal and state income taxes
in all states, provide an additional element of diversification for the Fund and
help us meet our income, duration and total return objectives.
Iowa enjoyed healthy economic growth in fiscal 1998. The state's
unemployment rate was 2.5% as of August, among the lowest in the country, and
land values are rising. However, expected bumper crops of corn and soybeans have
depressed selling prices for farmers, leading to a reduction in farm income and
related state tax revenues.
tax-free
iowa
PORTFOLIO HIGHLIGHTS
AUGUST 31, 1998
<TABLE>
<CAPTION>
Tax-Free Tax-Free Tax-Free Tax-Free North Tax-Free
Idaho Fund Iowa Fund Kansas Fund Dakota Fund Wisconsin Fund
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Average Maturity 9.5 years 8.0 years 11.3 years 8.6 years 10.2 years
Average Duration 7.0 years 6.0 years 7.5 years 6.3 years 7.9 years
AMT Income* 13.24% 6.17% 20.26% 14.32% 21.22%
Current 30-Day
SEC Yield
(A Class) 3.72% 3.80% 4.13% 3.87% 4.02%
(B and C Classes) 3.12%** 3.20% 3.53%*** 3.28%+ 3.43%++
- ----------------------------------------------------------------------------------------------
</TABLE>
* Percentage of income generated for the eight months ended August 31, 1998
that was subject to the federal alternative minimum tax. ** 3.13% for Class
C shares. *** 3.54% for Class C shares. + 3.29% for Class C shares.
++ 3.41% for Class C shares.
<PAGE>
for tax-exempt
income
6
(photo of keyboard)
Corn futures on the Chicago Mercantile Exchange were at their lowest level in 10
years as of early September.
Another economic issue Iowans will have to grapple with in the coming
year is a surplus of hogs amid weak export demand for pork from key markets such
as Japan and the Pacific Rim. Government figures show America's pig population
is at an 18-year high and growing. More sows are giving birth and the number of
piglets per sow has risen to a near record 8.7, according to the U.S. Department
of Agriculture. Iowa raises more hogs than anywhere else, and wholesale pork
prices have fallen to $0.33 a pound, less than the $0.40 a pound it costs most
farmers to raise a pig.
Thus far, agricultural sector weakness has not affected the state's bond
market or most municipal credit ratings. The Fund has only limited exposure to
economic development bonds tied to farming. Tax-Free Iowa Fund's largest holding
as of August 31, 1998 was a bond issue of the Iowa Finance Authority Underground
Storage Tank (12% of net assets).
TAX-FREE KANSAS FUND
Tax-Free Kansas Fund provided a robust total return of +9.17% for the 12 months
ended August 31, 1998 (for Class A shares at net asset value with distributions
reinvested). This was higher than the returns of both the unmanaged Lehman
Brothers Municipal Bond Index (see chart on page 1) and the average of the
Fund's 12 peers (+7.67%).
Bond supplies in Kansas rose a sharp 84.9% during the first eight months
of calendar 1998 to $1.5 billion, according to The Bond Buyer. Most of the
issues that came to market were given high ratings by Moody's Investors Services
or Standard & Poor's.
Kansas' economy, while strong, has generally not been quite as dynamic
as some neighboring states. The jobless rate was a low 3.5% as of August. As of
the end of summer, growth in the state's manufacturing sector was beginning to
slow, according to a survey of factory managers by the Federal Reserve Bank of
Kansas City, Missouri.
Falling overseas demand for wheat amid bumper U.S. crops has hurt
Kansas' farming sector, which grows more wheat than any other state. Export
demand to emerging market countries has fallen 30% from year ago levels. More
countries have lacked the resources to buy American grain, which has become more
expensive
tax-free
kansas
BOND SUPPLIES IN KANSAS ROSE A SHARP 84.9% DURING THE FIRST EIGHT MONTHS OF
CALENDAR 1998 TO $1.5 BILLION.
STATES AT A GLANCE
August 31, 1998
Per Capita Unemployment Existing Single Family
Income Rate Home Sales+
- --------------------------------------------------------------------------------
Idaho $19,539 4.9% +1.3%
Iowa 22,560 2.5% +7.2%
Kansas 23,281 3.5% +4.7%
North Dakota 20,710 2.2% +1.4%
Wisconsin 23,269 3.2% +7.1%
- --------------------------------------------------------------------------------
+2nd quarter change from 1st quarter 1998.
Source: Bloomberg Business News.
<PAGE>
for tax-exempt
income
7
because the dollar has risen in value against many currencies, according to the
U.S. Department of Agriculture. During the summer, the USDA announced plans to
buy 80 million bushels of wheat to boost prices and feed famine victims in
Africa.
Our approach to bond credit quality given this economic backdrop can
best be described as a barbell strategy. Approximately a quarter of the Fund's
net assets were invested in bonds rated AAA, the highest quality bonds available
during the year. This provided the Fund with an element of safety of principal.
Another 40% was invested in medium quality and unrated bonds, which provided
above-average income and total return during fiscal 1998.
We only purchase unrated bonds that we conclude would qualify for an
investment grade rating if the issuer had sought one. We attempt to balance the
portfolio between unrated bonds that produce an above-average interest rate and
rated bonds that can contribute to total return. As a result of our credit
selections, we were able to provide a very attractive income stream at a
moderate level of risk.
During the second half of fiscal 1998, we increased the Fund's average
duration to 7.5 years in anticipation that interest rates will continue to fall
during the first half of fiscal 1999. We continue to seek rated bonds that have
higher-than-average call protection and good structural characteristics, as well
as unrated bonds we believe offer strong total return potential.
TAX-FREE MISSOURI
INSURED FUND
Missouri Insured Fund provided a total return of +8.12% for the 12 months ended
August 31, 1998 (for Class A shares at net asset value with distributions
reinvested). This was higher than the +7.78% total return provided by the
average of 23 insured municipal bond funds specializing in Missouri bonds, most
of which invest primarily in uninsured bonds.
The Fund offered a very attractive risk profile relative to its
performance - a total
tax-free
missouri
insured
<TABLE>
<CAPTION>
TAX-FREE MISSOURI INSURED, OREGON INSURED
AND WASHINGTON INSURED FUNDS ASSET MIX
AUGUST 31, 1998
Tax-Free Missouri Tax-Free Oregon Tax-Free Washington
Insured Fund Insured Fund Insured Fund
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Housing 17.0% 3.7% 23.6%
Hospital 24.2% 6.9% 17.3%
General Obligation 6.1% 19.1% 16.7%
Power Authority 6.9% 10.5% 8.2%
Pre-Refunded 23.8% 21.3% 0
Education 3.5% 16.2% 15.0%
Industrial 1.9% 0 2.1%
Other Revenue Bonds 6.5% 0 0
Lease/Certificates of Participation 1.9% 3.4% 0
Utility 4.1% 0 0
Water & Sewer 4.1% 10.2% 9.5%
Transportation 0 6.7% 5.1%
Cash and Other Assets 0 2.0% 2.5%
for tax-exempt income
</TABLE>
<PAGE>
for tax-exempt
income
8
return that outpaced the total return of the Standard & Poor's 500 Index for the
12 months ended August 31, 1998. Missouri Insured Fund invests exclusively in
bonds that are rated AAA by Moody's Investors Services or Standard & Poor's.
Insured Missouri bonds generally did not offer as much total return
potential as bonds in some other states because of the huge increase in new
issuance. The state's municipalities issued more than $3.4 billion in bonds
between January and August 1998, an 80% percent increase from year earlier
levels, according to The Bond Buyer. This additional supply was difficult for
the market to absorb.
Still, market appreciation reduced the average effective duration of
Tax-Free Missouri Insured Fund by several months to 6.4 years as of August 31.
The Fund's positioning was about a half-a-year shorter than the Lehman Brothers
Insured Municipal Bond Index, the Fund's benchmark.
As of August 1998, the unemployment rate in Missouri stood at 4.1%,
somewhat higher than surrounding states. Economic growth was moderate, and
factory managers in the state were anticipating a modest slowdown through the
end of the year in shipments of goods and the average production workweek,
according to a report by the Federal Reserve Bank of Kansas City.
For fiscal 1999, we believe Missouri bonds offer attractive income and
total return opportunities, especially for investors in the top combined federal
and state tax bracket of 43.2%. Yields on long-term insured Missouri bonds were
at their highest levels relative to 30-year U.S. Treasury bond yields in more
than nine years as of August 31.
TAX-FREE NORTH DAKOTA FUND
For the 12 months ended August 31, 1998, Tax-Free North Dakota Fund provided a
higher-than-average total return of +8.37% (for Class A shares with
distributions reinvested at net asset value).
The Fund did well relative to its peers because we positioned the
portfolio for a gradual decline in interest rates. Average duration was longer
than the Lehman Brothers Municipal Bond Index for the period. This allowed the
Fund to generate an attractive level of income and participate in the bond
market's spring rally.
tax-free
north dakota
ONE FACTOR HELPING LIFT NORTH DAKOTA BOND PRICES WAS THAT SUPPLY WAS SCARCE IN
FISCAL 1998.
<TABLE>
<CAPTION>
PORTFOLIO HIGHLIGHTS
AUGUST 31, 1998
Tax-Free Missouri Tax-Free Oregon Tax-Free Washington
Insured Fund Insured Fund Insured Fund
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Average Maturity 8.3 years 9.2 years 9.7 years
Average Duration 6.4 years 7.4 years 7.0 years
AMT Income* 18.79% 11.18% 16.87%
Current 30-Day SEC Yield
(A Class) 3.81% 3.73% 4.20%
(B and C Classes) 3.22%** 3.13%*** 3.61%
- ------------------------------------------------------------------------------------------
</TABLE>
*Percentage of income generated for the eight months ended 8/31/98 that was
subject to the federal alternative minimum tax. ** 3.21% for Class C
shares. *** 3.12% for Class C shares.
(photo of couple talking to financial adviser)
<PAGE>
for tax-exempt
income
9
One factor helping lift North Dakota bond prices was that supply was
scarce. Only $406 million in new bonds were issued between January and August,
one of the lowest rates of issuance in the nation. Only the states of Delaware,
Vermont and Wyoming have issued fewer bonds so far this year.
North Dakota's short-term economic prospects were clouded in early
September by the two-week strike at Northwest Airlines, the only airline that
serves the state. During the strike, the Clinton Administration ordered
Northwest's commuter airline affiliate to resume flights to North Dakota after
an appeal for help from the state's Congressional delegation.
Fortunately, many of the state's top employers such as health care
providers generally do not depend on air travel. We believe the effects of the
strike will prove temporary and not adversely affect the credit quality of the
state's municipal bonds.
Of more lasting concern is North Dakota's weak agricultural sector.
While some states expect bumper crops this year, North Dakota's farmers have
been plagued by the wheat scab fungus, which grows when planting conditions are
too wet. Wheat prices are the lowest since 1991, and farm liquidations have
increased this year, according to the U.S. Department of Agriculture.
Tax-Free North Dakota Fund's single largest sector weighting as of
August 1998 was hospital bonds. This sector generally offers higher yields and
we believe that selected hospital bonds may also benefit from ratings upgrades
as stronger hospital chains absorb smaller and less well-capitalized
institutions.
North Dakota's unemployment rate was just 2.2% as of August, one of the
lowest rates of joblessness in the country. Home building activity in the state
was brisk in major towns such as Fargo this past spring, according to a report
by the Ninth Federal Reserve District.
High quality North Dakota bonds remain the dominant element of Tax-Free
North Dakota Fund's portfolio. During the second half of fiscal 1998 we added
medium quality bonds to increase the Fund's income potential. We were
underweighted in lower rated industrial development bonds, and this helped the
Fund's performance.
TAX-FREE OREGON INSURED FUND
Tax-Free Oregon Insured Fund provided an above-average total return of +8.78%
for the 12 months ended August 31, 1998 (for Class A shares at net asset value
with distributions reinvested).
The Fund's performance for the period outpaced the +7.78% average of its
25 peers as shown on page 1. Tax-Free Oregon Insured Fund's relatively long
duration and focus on insured bonds, which tend to benefit more from interest
rate declines than non-insured bonds, enhanced our results.
Bond supplies in Oregon increased during the first eight months of
calendar 1998. More than $1.3 billion worth of bonds have been issued since
January, a 21% increase from year ago levels, according to The Bond Buyer.
Since Oregon has relatively high tax rates and has
THE FUND'S PERFORMANCE RELATIVE TO ITS PEERS BENEFITED FROM OUR AVOIDANCE OF
STATE-ISSUED GENERAL OBLIGATION BONDS DURING FISCAL 1998.
tax-free oregon
insured
<PAGE>
for tax-exempt
income
10
historically issued a relatively limited number of bonds for a state of its
size, investors easily absorbed the increase.
One event affecting Oregon's bond market in 1998 was a downgrading of
the state's general obligation bonds from AA+ to AA by Standard & Poor's on July
7. The Fund's performance relative to its peers benefited from our avoidance of
state-issued general obligation bonds. To provide an element of safety, the Fund
invests exclusively in bonds that are insured by one of the major municipal bond
insurance companies and are rated AAA by Moody's and/or Standard & Poor's rating
agencies.
In fiscal 1998, we emphasized bonds with discount coupons, good call
protection, and long maturities. We reduced our positioning in municipal general
obligation bonds and increased our weighting in power authority and other
revenue bonds. Pursuing this strategy allowed the Fund to perform well even as
investor fears concerning the possible impact of Asia's recession on Oregon's
economy have grown.
While Oregon's natural resource exports such as paper have slowed, the
state's economy appears to be holding up. Strength in housing and consumer
spending are offsetting weakness in factory activity, according to a June report
by the Twelfth Federal Reserve District.
We will keep a close eye on developments overseas and how they might
affect Oregon's municipal bond market in the coming year. Exports to Asia
account for about 7% of Oregon's gross state product, state officials estimate.
About half of the state's exports are agricultural products such as timber.
TAX-FREE WASHINGTON
INSURED FUND
Tax-Free Washington Insured Fund provided exceptionally strong results for
fiscal 1998. For the 12 months ended August 31, 1998, the Fund's total return
was +9.44% (for Class A shares at net asset value with distributions
reinvested). This was higher than the Fund's benchmark and the +8.71% average
return of the Fund's eight peers.
After a surge in new issuance in 1997, new bond supplies in the State
of Washington have increased only marginally in calendar 1998. Through August,
$3.7 billion in bonds were issued, a 4.7% increase from a year ago, according to
The Bond Buyer.
Washington's steady bond supply, coupled with strong investor demand,
helped Washington bonds outperform bonds of other states.
WASHINGTON'S STEADY BOND SUPPLY, COUPLED WITH STRONG INVESTOR DEMAND, HELPED
WASHINGTON BONDS OUTPERFORM BONDS OF OTHER STATES.
<PAGE>
for tax-exempt
income
11
In early September, Standard & Poor's affirmed its AA rating for
Washington's general obligation bonds, saying that the state enjoys a
diversified economy that is "exhibiting resilience to cyclicality in aerospace
and other trade-related sectors."
Washington's economic expansion is likely to continue, according to S&P,
despite reduced trade with Asia and job cuts at jet maker Boeing. Washington
leads the nation in exports relative to gross state product, and one-sixth of
the state's jobs are tied to international trade. Through the summer of 1998,
however, the Pacific Rim's economic turmoil had not affected the state's budget
or budget forecast.
Tax-Free Washington Insured Fund did well relative to the Lehman Insured
Municipal Bond Index and its peers because we positioned the Fund for a decline
in interest rates. The Fund's duration, or sensitivity to interest rate
movements, was modestly longer than that of the index. This allowed us to
achieve a high rate of total return as bond prices rose.
In fiscal 1998, the Fund focused on bonds with discount coupons, good
call protection, and long maturities. The Fund invests exclusively in bonds that
are insured by a leading municipal bond insurance company and are rated AAA.
During the second half, the Fund reduced its weighting in housing bonds
and increased its weighting in higher education bonds. Housing bonds, because of
the risk of prepayment from underlying mortgages, tend to yield more than bonds
from other sectors that have similar ratings and maturities. Given our view that
interest rates will decline in the months ahead, we believed it was prudent to
reduce exposure to prepayments, especially in the single family home segment.
Even though Washington does not have a state income tax, the market for
tax-exempt securities is robust, and likely to grow. Incomes in Washington are
about 10% higher than the national average. Many residents have also enjoyed
huge capital gains during the 1990s as stocks of high-tech companies such as
Microsoft Corp. have appreciated. In our view, some of the gains realized on
equity investments could be reallocated to the state's municipal bonds in the
year ahead, especially if the stock market remains volatile.
IN EARLY SEPTEMBER, STANDARD & POOR'S AFFIRMED ITS HIGH AA RATING FOR
WASHINGTON'S GENERAL OBLIGATION BONDS.
tax-free
washington
insured
<TABLE>
<CAPTION>
STATES AT A GLANCE
AUGUST 31, 1998
Per Capita Unemployment Existing Single Family
Income Rate Home Sales+
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Missouri $22,864 4.1% -3.7%
Oregon 22,668 5.7% +7.0%
Washington 24,838 4.7% unchanged
- ---------------------------------------------------------------------------------------------
</TABLE>
+ 2nd quarter change from 1st quarter 1998.
Source: Bloomberg Business News.
(photo of glasses, pen and keyboard)
<PAGE>
for tax-exempt
income
12
TAX-FREE WISCONSIN FUND
For the 12 months ended August 31, 1998, Tax-Free Wisconsin Fund provided a
total return of +8.13% (for Class A shares at net asset value with distributions
reinvested). This was higher than the average of the Fund's peers as shown on
page 1.
We attribute the Fund's performance to the Fund's substantial investment
in health care and housing bonds, two sectors that provided above-average income
but did not appreciate as much as other sectors during fiscal 1998.
Since the summer of 1997, the credit quality of most Wisconsin
municipalities has been excellent. In early September, Standard & Poor's
affirmed its high AA rating for the state's general obligation bonds. The rating
agency said its rating reflected a diversified Wisconsin economy that exhibits
steady growth, sound financial performance and a moderate overall debt burden.
More than $3.14 billion worth of new bonds were issued in Wisconsin
during the first eight months of calendar 1998, a 23% increase from the prior
year, according to The Bond Buyer. We used this increase in supply to add more
Wisconsin bonds to your Fund's portfolio and sell some Puerto Rico territorial
bonds that had appreciated in value.
Territorial bonds, which are exempt from both state and federal income
taxes, provide an additional element of diversification for the Fund and help us
meet our income, duration and total return objectives.
As of August 31, slightly more than half of your Fund's net assets were
invested in investment grade bonds (A and lower) and unrated bonds. These bonds
generally have a higher-than-average coupon, increasing the Fund's income
potential. All bonds in Tax-Free Wisconsin Fund generate income that is exempt
from both federal and state income taxes.
Many Wisconsin issues finance small municipal projects that are too
small to make it economically feasible to seek a rating from Moody's Investors
Services or Standard & Poor's. We carefully evaluate each issue to determine
creditworthiness. We balance unrated bonds that produce an above-average
interest rate with bonds that are rated and can contribute to the Fund's total
return.
Wisconsin's 3.2% unemployment rate as of August was relatively low. In
its report, S&P said the services and trade sectors are expected to account for
about 70% of the state's new jobs this year. Employment growth has averaged 2%
annually since 1992, a pace that S&P expects to slow to about 1% through the
year 2000.
Wisconsin is expected to post a budget surplus of $352 million in 1998,
up from $327 million a year earlier. S&P said its positive outlook for the state
reflects an expectation that Wisconsin will increase its budget reserve, meet
greater educational funding requirements and provide property tax relief.
tax-free
wisconsin
ALL BONDS IN TAX-FREE WISCONSIN FUND GENERATE INCOME THAT IS EXEMPT FROM BOTH
FEDERAL AND STATE INCOME TAXES.
<PAGE>
for tax-exempt
income
13
Performance Summary
TAX-FREE IDAHO FUND
GROWTH OF A $10,000 INVESTMENT
JANUARY 4, 1995 TO AUGUST 31, 1998
Lehman Brothers Municipal Bond Index Tax-Free Idaho Fund A Class
Jan. '95 $10,000 $ 9,625
May '95 $10,754 $10,653
Aug. '95 $10,897 $10,676
Nov. '95 $11,310 $11,151
Feb. '96 $11,428 $11,305
May '96 $11,245 $11,079
Aug. '96 $11,468 $11,314
Nov. '96 $11,975 $11,793
Feb. '97 $12,058 $11,910
May '97 $12,177 $12,063
Aug. '97 $12,528 $12,436
Nov. '97 $12,834 $12,815
Feb. '98 $13,159 $13,118
May '98 $13,319 $13,284
Aug. '98 $13,612 $13,560
Chart assumes $10,000 invested January 4, 1995, and performance includes the
effect of a 3.75% sales charge and the reinvestment of distributions.
Performance of other Fund classes will vary due to differing charges and
expenses. Past performance does not guarantee future results.
TAX-FREE IDAHO FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH AUGUST 31, 1998
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 1/4/95)
Excluding Sales Charge +9.86% +9.02%
Including Sales Charge +8.72% +4.97%
- --------------------------------------------------------------------------------
Class B (Est. 3/16/95)
Excluding Sales Charge +7.83% +8.23%
Including Sales Charge +7.11% +4.23%
- --------------------------------------------------------------------------------
Class C (Est. 1/11/95)
Excluding Sales Charge +8.86% +8.32%
Including Sales Charge +8.86% +7.32%
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 either contingent sales charges did not apply or
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 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.
<PAGE>
for tax-exempt
income
14
<TABLE>
<CAPTION>
TAX-FREE IOWA FUND
TAX-FREE WISCONSIN FUND
GROWTH OF A $10,000 INVESTMENT
SEPTEMBER 1, 1993 TO AUGUST 31, 1998
Lehman Brothers Municipal Bond Index Tax-Free Iowa Fund A Class Tax-Free Wisconsin Fund A Class
<S> <C> <C> <C> <C>
Sep. '93 $10,000 $ 9,625 $ 9,625
Aug. '94 $ 9,901 $ 9,367 $ 9,394
Aug. '95 $10,779 $ 9,956 $10,055
Aug. '96 $11,343 $10,433 $10,564
Aug. '97 $12,392 $11,485 $11,477
Aug. '98 $13,463 $12,424 $12,411
</TABLE>
Chart assumes $10,000 invested September 1, 1993, and performance includes the
effect of a 3.75% sales charge and the reinvestment of distributions.
Performance of other Fund classes will vary due to differing charges and
expenses. Past performance does not guarantee future results.
TAX-FREE IOWA FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH AUGUST 31, 1998
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 9/1/93)
Excluding Sales Charge +5.26% +8.18%
Including Sales Charge +4.46% +4.14%
- --------------------------------------------------------------------------------
Class B (Est. 3/24/95)
Excluding Sales Charge +7.10% +7.37%
Including Sales Charge +6.35% +3.37%
- --------------------------------------------------------------------------------
Class C (Est. 1/4/95)
Excluding Sales Charge +8.91% +7.37%
Including Sales Charge +8.91% +6.37%
TAX-FREE WISCONSIN FUND
AVERAGE ANNUAL RETURNS THROUGH AUGUST 31, 1998
- --------------------------------------------------------------------------------
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 9/1/93)
Excluding Sales Charge +5.23% +8.13%
Including Sales Charge +4.43% +4.08%
- --------------------------------------------------------------------------------
Class B (Est. 4/22/95)
Excluding Sales Charge +6.39% +7.23%
Including Sales Charge +5.61% +3.23%
- --------------------------------------------------------------------------------
Class C (Est. 3/28/95)
Excluding Sales Charge +6.51% +7.30%
Including Sales Charge +6.51% +6.30%
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.
<PAGE>
for tax-exempt
income
15
TAX-FREE KANSAS FUND
GROWTH OF A $10,000 INVESTMENT
NOVEMBER 30, 1992 TO AUGUST 31, 1998
Lehman Brothers Municipal Bond Index Tax-Free Kansas Fund A Class
Dec. '92 $10,000 $ 9,625
Aug. '93 $10,948 $10,766
Aug. '94 $10,963 $10,813
Aug. '95 $11,935 $11,571
Aug. '96 $12,560 $12,242
Aug. '97 $13,721 $13,316
Aug. '98 $14,908 $14,537
Chart assumes $10,000 invested November 30, 1992, and performance includes the
effect of a 3.75% sales charge and the reinvestment of distributions.
Performance of other Fund classes will vary due to differing charges and
expenses. Past performance does not guarantee future results.
TAX-FREE KANSAS FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH AUGUST 31, 1998
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 11/30/92)
Excluding Sales Charge +7.45% +6.20% +9.17%
Including Sales Charge +6.74% +5.39% +5.05%
- --------------------------------------------------------------------------------
Class B (Est. 4/8/95)
Excluding Sales Charge +7.15% +8.34%
Including Sales Charge +6.40% +4.34%
- --------------------------------------------------------------------------------
Class C (Est. 4/12/95)
Excluding Sales Charge +6.98% +8.36%
Including Sales Charge +6.98% +7.36%
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.
<PAGE>
for tax-exempt
income
16
<TABLE>
<CAPTION>
TAX-FREE MISSOURI INSURED FUND
GROWTH OF A $10,000 INVESTMENT
NOVEMBER 2, 1992 TO AUGUST 31, 1998
Lehman Brothers Insured Municipal Bond Index Tax-Free Missouri Insured Fund A Class
<S> <C> <C> <C>
Dec. '92 $10,000 $ 9,625
Aug. '93 $10,948 $10,629
Aug. '94 $10,963 $10,455
Aug. '95 $11,935 $11,304
Aug. '96 $12,560 $11,941
Aug. '97 $13,721 $13,024
Aug. '98 $14,909 $14,082
</TABLE>
Chart assumes $10,000 invested November 2, 1992, and performance includes the
effect of a 3.75% sales charge and the reinvestment of distributions.
Performance of other Fund classes will vary due to differing charges and
expenses. Past performance does not guarantee future results.
TAX-FREE MISSOURI INSURED FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH AUGUST 31, 1998
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 11/2/92)
Excluding Sales Charge +6.96% +5.80% +8.12%
Including Sales Charge +6.26% +5.00% +4.07%
- --------------------------------------------------------------------------------
Class B (Est. 3/12/94)
Excluding Sales Charge +5.84% +7.32%
Including Sales Charge +5.47% +3.32%
- --------------------------------------------------------------------------------
Class C (Est. 11/11/95)
Excluding Sales Charge +5.86% +7.41%
Including Sales Charge +5.86% +6.41%
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.
<PAGE>
for tax-exempt
income
17
<TABLE>
<CAPTION>
TAX-FREE NORTH DAKOTA FUND
GROWTH OF A $10,000 INVESTMENT
APRIL 1, 1991 TO AUGUST 31, 1998
Lehman Brothers Municipal Bond Index Tax-Free North Dakota Fund A Class
<S> <C> <C> <C>
Apr. '91 $10,000 $ 9,625
Aug. '91 $10,336 $10,090
Aug. '92 $11,490 $11,092
Aug. '93 $12,892 $12,636
Aug. '94 $12,910 $12,498
Aug. '95 $14,055 $13,517
Aug. '96 $14,791 $14,294
Aug. '97 $16,158 $15,599
Aug. '98 $17,555 $16,905
</TABLE>
Chart assumes $10,000 invested April 1, 1991 and performance includes the effect
of a 3.75% sales charge and the reinvestment of distributions. Performance of
other Fund classes will vary due to differing charges and expenses. Past
performance does not guarantee future results.
TAX-FREE NORTH DAKOTA FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH AUGUST 31, 1998
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 4/1/91)
Excluding Sales Charge +7.91% +6.02% +8.37%
Including Sales Charge +7.36% +5.22% +4.32%
- --------------------------------------------------------------------------------
Class B (Est. 5/10/94)
Excluding Sales Charge +7.58% +7.57%
Including Sales Charge +7.21% +3.57%
- --------------------------------------------------------------------------------
Class C (Est. 7/29/95)
Excluding Sales Charge +7.00% +7.47%
Including Sales Charge +7.00% +6.47%
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.
<PAGE>
for tax-exempt
income
18
<TABLE>
<CAPTION>
TAX-FREE OREGON INSURED FUND
TAX-FREE WASHINGTON INSURED FUND
GROWTH OF A $10,000 INVESTMENT
AUGUST 1, 1993 TO AUGUST 31, 1998
Lehman Brothers Tax-Free Oregon Tax-Free Washington
Insured Municipal Bond Index Insured Fund A Class Insured Fund A Class
<S> <C> <C> <C> <C>
Aug. '93 $10,000 $ 9,625 $ 9,625
Aug. '94 $10,014 $ 9,595 $10,084
Aug. '95 $10,902 $10,352 $10,830
Aug. '96 $11,473 $10,892 $11,518
Aug. '97 $12,533 $11,896 $12,624
Aug. '98 $13,617 $12,940 $13,817
</TABLE>
Chart assumes $10,000 invested August 1, 1993, and performance includes the
effect of a 3.75% sales charge and the reinvestment of distributions.
Performance of other Fund classes will vary due to differing charges and
expenses. Past performance does not guarantee future results.
TAX-FREE OREGON INSURED FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH AUGUST 31, 1998
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 8/1/93)
Excluding Sales Charge +6.02% +5.72% +8.78%
Including Sales Charge +5.22% +4.91% +4.71%
- --------------------------------------------------------------------------------
Class B (Est. 3/12/94)
Excluding Sales Charge +5.82% +7.97%
Including Sales Charge +5.45% +3.97%
- --------------------------------------------------------------------------------
Class C (Est. 7/7/95)
Excluding Sales Charge +6.76% +7.96%
Including Sales Charge +6.76% +6.96%
TAX-FREE WASHINGTON INSURED FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH AUGUST 31, 1998
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 8/1/93)
Excluding Sales Charge +7.39% +6.47% +9.44%
Including Sales Charge +6.59% +5.66% +5.32%
- --------------------------------------------------------------------------------
Class B (Est. 10/24/95)
Excluding Sales Charge +7.08% +8.72%
Including Sales Charge +6.15% +4.72%
- --------------------------------------------------------------------------------
Class C (Est. 4/21/95)
Excluding Sales Charge +7.35% +8.72%
Including Sales Charge +7.35% +7.72%
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.
<PAGE>
for tax-exempt income 19
Financial Statements
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE IDAHO FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1998
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS - 98.85%
General Obligation Bonds - 10.35%
Ada & Canyon County School District #2 (Meridian)
5.60% 7/30/12 ................................ $1,325,000 $1,435,174
Bonner County Local Improvement District #93-1
6.20% 4/30/05 ................................ 150,000 158,322
Bonner County Local Improvement District #93-2
6.35% 4/30/06 ................................ 185,000 195,221
Bonner County Local Improvement District #93-3
6.40% 4/30/07 ................................ 195,000 205,840
Bonner County Local Improvement District #93-4
6.50% 4/30/08 ................................ 110,000 116,098
Bonner County Local Improvement District #93-5
6.50% 4/30/10 ................................ 100,000 105,544
Canyon County Independent School District #131
(MBIA) 5.50% 7/30/12 ......................... 100,000 105,120
Coeur D' Alene Local Improvement District #6
Series 1995 6.00% 7/1/09 ..................... 85,000 91,540
Coeur D' Alene Local Improvement District #6
Series 1995 6.05% 7/1/10 ..................... 90,000 96,631
Coeur D' Alene Local Improvement District #6
Series 1995 6.10% 7/1/12 ..................... 40,000 43,142
Coeur D' Alene Local Improvement District #6
Series 1995 6.10% 7/1/14 ..................... 45,000 48,230
Madison County (FSA) 5.40% 8/1/14 ............... 300,000 311,718
Puerto Rico Commonwealth 5.38% 7/1/25 ........... 1,250,000 1,278,550
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ................................. 750,000 692,948
Sun Valley 5.20% 8/1/09 ......................... 180,000 188,849
----------
5,072,927
----------
HIGHER EDUCATION REVENUE BONDS - 6.15%
Boise State University Idaho Revenue Refunding
& Improvement Student Fee (FSA)
5.00% 4/1/23 ................................. 1,000,000 1,003,220
Idaho State University Student Fee Bonds
(MBIA) 5.80% 4/1/20 .......................... 550,000 585,354
University Of Idaho (FSA) 5.85% 4/1/11 .......... 1,300,000 1,427,010
----------
3,015,584
----------
HOSPITAL REVENUE BONDS - 16.53%
Idaho Health Facilities Authority Hospital Revenue -
Elks Rehabilitation Hospital
5.45% 7/15/23 ................................ 1,000,000 1,004,270
Idaho Health Facilities Authority Revenue -
Bannock Regional Medical Project 5.25%
5/1/14 ....................................... 1,500,000 1,512,330
Idaho Health Facilities Authority Revenue -
Bonner General Hospital 6.50% 10/1/28 ........ 1,500,000 1,571,100
<PAGE>
Principal Market
Amount Value
--------- ---------
MUNICIPAL BONDS (Continued)
HOSPITAL REVENUE BONDS (Continued)
Idaho Health Facilities Authority Revenue -
Bannock Regional Medical Center
6.13% 5/1/25 ................................. $1,500,000 $1,610,100
Idaho Health Facilities Authority Revenue -
Bannock Regional Medical Center
6.38% 5/1/17 ................................. 1,695,000 1,876,348
Idaho Magic Valley Health Facilities (AMBAC)
5.63% 12/1/13 ................................ 500,000 530,285
----------
8,104,433
----------
HOUSING REVENUE BONDS - 9.43%
Idaho State Housing Agency Multi-Family Place
Plaza (FHA) 6.50% 12/1/36 .................... 990,000 1,068,101
Idaho State Housing Finance Authority Single
Family Series A (AMBAC) 6.05% 7/1/13 ......... 440,000 469,005
Idaho State Housing Finance Authority Single
Family Series A (FHA) 6.10% 7/1/16 ........... 370,000 392,929
Idaho State Housing Finance Authority Single
Family Series A1 6.85% 7/1/12 ................ 85,000 91,689
Idaho State Housing Finance Authority Single
Family Series B (FHA) 6.45% 7/1/15 ........... 200,000 214,970
Idaho State Housing Finance Authority Single
Family Series C-2 6.35% 7/1/15 ............... 255,000 272,638
Idaho State Housing Finance Authority Single
Family Series E 6.60% 7/1/11 ................. 140,000 152,800
Idaho State Housing Finance Authority Single
Family Series E (FHA) 6.35% 7/1/15 ........... 345,000 369,995
Idaho State Housing Finance Authority Single
Family Series G-2 6.15% 7/1/15 ............... 1,500,000 1,589,925
----------
4,622,052
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 6.85%
Idaho State Water Resource Boise Water
7.25% 12/1/21 ................................ 100,000 109,587
Meridan EDA for Hi-Micro 5.85% 8/15/11 .......... 1,250,000 1,324,850
Pocatello Development Authority and Tax
Increment Revenue 7.25% 12/1/08 .............. 1,700,000 1,761,234
Puerto Rico Industrial Medical Environmental
Revenue - PepsiCo Project 6.25% 11/15/13 ..... 150,000 165,311
----------
3,360,982
----------
LEASE/CERTIFICATES OF PARTICIPATION - 2.14%
North Idaho College Dorm Housing-Certificates of
Participation 6.45% 10/1/16 .................. 1,000,000 1,051,080
----------
1,051,080
----------
POLLUTION CONTROL REVENUE BONDS - 20.67%
Nez Perce County, Idaho Pollution Control Revenue
Refunding - Potlatch Project 6.00% 10/1/24 ... 5,500,000 5,926,470
<PAGE>
20 for tax-exempt income
TAX-FREE IDAHO FUND
STATEMENT OF NET ASSETS (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------- ---------
MUNICIPAL BONDS (Continued)
Pollution Control Revenue Bonds (Continued)
Power County Idaho Pollution Control Revenue -
FMC Project 5.63% 10/1/14 ................. $ 4,050,000 $ 4,207,221
-----------
10,133,691
-----------
POWER AUTHORITY REVENUE BONDS - 3.18%
Puerto Rico Electric Power Authority (FSA)
6.00% 7/1/16 .............................. 100,000 109,366
Puerto Rico Electric Power Authority Series X
5.50% 7/1/25 .............................. 1,415,000 1,450,460
----------
1,559,826
----------
*PRE-REFUNDED BONDS - 1.56%
Gooding Lincoln Independent School District #231
6.30% 2/1/14-04 ............................. 100,000 111,087
Idaho St. Holy Cross - Alphonsus Health Facility
6.25% 12/1/22-02 ............................ 590,000 654,463
----------
765,550
----------
SPECIAL UTILITY REVENUE BONDS - 0.31%
Puerto Rico Telephone Revenue Authority
5.50% 1/1/22 ................................ 150,000 154,178
----------
154,178
----------
TRANSPORTATION REVENUE BONDS - 0.72%
Guam Highway (FSA) 6.30% 5/1/12 ................ 150,000 162,833
Puerto Rico Highway Revenue Series W
5.50% 7/1/15 ................................ 175,000 188,389
-----------
351,222
-----------
WATER & SEWER REVENUE BONDS - 2.79%
Chubbuck Water Revenue 6.35% 4/1/08 ............ 125,000 134,645
Chubbuck Water Revenue 6.40% 4/1/10 ............ 135,000 146,185
McCall Water Revenue (FSA) 5.85% 3/1/16 ........ 1,000,000 1,087,810
-----------
1,368,640
-----------
OTHER REVENUE BONDS - 18.17%
Ammon, Idaho Urban Renewal Agency Revenue
6.25% 8/1/18 ................................ 445,000 480,048
Ammon, Idaho Urban Renewal Tax Increment
Revenue 5.88% 8/1/17 ........................ 350,000 371,434
Boise Urban Renewal Agency Tax Increment
Revenue 6.13% 9/1/15 ........................ 4,540,000 4,900,837
Hayden, Idaho Improvement District 95 -
Special Assessment 6.30% 5/1/12 ............. 115,000 115,357
Hayden, Idaho Improvement District 95 -
Special Assessment 6.35% 5/1/13 ............. 120,000 120,372
Hayden, Idaho Improvement District 95 -
Special Assessment 6.40% 5/1/14 ............. 125,000 125,388
Hayden, Idaho Improvement District 95 -
Special Assessment 6.50% 5/1/15 ............. 125,000 125,388
Idaho State Building Authority Building Revenue
Series A 4.75% 9/1/25 ....................... 1,500,000 1,466,505
Puerto Rico Public Building Authority Revenue
Series M 5.50% 7/1/21 ....................... 1,175,000 1,206,490
-----------
8,911,819
-----------
Total Municipal Bonds (cost $45,441,880)......... 48,471,984
-----------
<PAGE>
Number Market
of Shares Value
--------- ---------
SHORT-TERM INVESTMENTS - 2.55%
Norwest Advantage Municipal Money Market Fund 1,252,446 $ 1,252,446
------------
Total Short-Term Investments (cost $1,252,446) 1,252,446
------------
TOTAL MARKET VALUE OF SECURITIES OWNED
(COST $46,694,326) - 101.40% .............. $ 49,724,430
LIABILITIES NET OF RECEIVABLES AND OTHER
ASSETS - (1.40%) .......................... (688,555)
------------
NET ASSETS APPLICABLE TO 4,242,396 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ... $ 49,035,875
============
NET ASSET VALUE - TAX-FREE IDAHO FUND A CLASS
($39,843,408 / 3,446,326 SHARES) .......... $11.56
======
NET ASSET VALUE - TAX-FREE IDAHO FUND B CLASS
($7,473,875 / 647,213 SHARES) ............. $11.55
======
NET ASSET VALUE - TAX-FREE IDAHO FUND C CLASS
($1,718,592 / 148,857 SHARES) ............. $11.55
======
COMPONENTS OF NET ASSETS AT AUGUST 31, 1998:
Common stock, $0.01 par value, 100,000,000,000
shares authorized to the Fund with 10,000,000,000
shares allocated to Tax-Free Idaho Fund A
Class, 10,000,000,000 shares allocated to Tax-Free
Idaho Fund B Class and 10,000,000,000 shares allocated
to Tax-Free Idaho Fund C Class............... $46,066,179
Distribution in excess of net investment income. (3,387)
Accumulated net realized loss on investments.... (57,021)
Net unrealized appreciation of investments ..... 3,030,104
------------
Total net assets ............................... $49,035,875
============
- ----------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
- ----------------------
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FHA - Insured by the Federal Housing Authority
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE IDAHO FUND A CLASS
Net asset value A Class (A)........................... $11.56
Sales charge (3.75% of offering price or 3.89%
of amount invested per share) (B).................. 0.45
------
Offering price ....................................... $12.01
======
- ----------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $100,000
or more.
See accompanying notes
<PAGE>
for tax-exempt income 21
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE IOWA FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1998
- --------------------------------------------------------------------------------
Principal Market
Amount Value
---------- ----------
MUNICIPAL BONDS - 98.13%
GENERAL OBLIGATION BONDS - 1.04%
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ..................................... $ 500,000 $ 461,965
----------
461,965
----------
HIGHER EDUCATION REVENUE BONDS - 6.76%
Iowa Center Community College Dormitory -
Merged Area V 5.45% 6/1/18 .................... 545,000 549,229
Puerto Rico Educational Facility Revenue -
Polytechnic University 6.50% 8/1/24 ........... 650,000 712,543
State University of Iowa - Board Of Regents
5.30% 7/1/13 .................................. 500,000 525,660
University of North Iowa - Board Of Regents
5.30% 7/1/13 .................................. 150,000 157,698
University of Puerto Rico Revenue (MBIA)
5.50% 6/1/15 .................................. 1,000,000 1,060,850
-----------
3,005,980
-----------
HOSPITAL REVENUE BONDS - 2.99%
Puerto Rico Hospital Revenue - Hospital Auxilio
Mutuo Obligated Group (MBIA) 6.25% 7/1/24 ..... 1,200,000 1,328,340
-----------
1,328,340
-----------
HOUSING REVENUE BONDS - 2.38%
Puerto Rico Housing Bank & Finance Agency
(GNMA) 6.25% 4/1/29 ........................... 990,000 1,060,439
-----------
1,060,439
-----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 18.81%
Iowa Finance Authority - Underground Storage
Tank Revenue 5.125% 7/1/14 .................... 5,200,000 5,405,140
Lee County Urban Renewal Revenue - Keokuk
Waste Treatment 6.40% 6/1/07 .................. 500,000 534,735
Puerto Rico Commonwealth Industrial Development
General Purpose Revenue Series B
5.375% 7/1/16 ................................. 1,000,000 1,034,370
Puerto Rico Port Authority Revenue - Special
Facility - American Airlines 6.25% 6/1/26 ..... 1,275,000 1,394,442
-----------
8,368,687
-----------
POWER AUTHORITY REVENUE BONDS - 8.18%
Puerto Rico Electric Power Authority Revenue
Series EE 4.75% 7/1/24 ........................ 1,500,000 1,435,365
Puerto Rico Electric Power Authority Revenue
Series U 6.00% 7/1/14 ......................... 1,100,000 1,190,618
Virgin Islands Water & Power Authority Electric
System Revenue 5.30% 7/1/18 ................... 1,000,000 1,011,320
-----------
3,637,303
-----------
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS - 6.79%
Puerto Rico Electric Power Authority Revenue
6.25% 7/1/17-02 ............................... 1,000,000 1,098,690
Virgin Islands Public Finance Authority (Escrowed
to maturity) 7.30% 10/1/18 .................... 1,500,000 1,920,240
-----------
3,018,930
-----------
<PAGE>
Principal Market
Amount Value
---------- ----------
MUNICIPAL BONDS (CONTINUED)
TRANSPORTATION REVENUE BONDS - 8.16%
Guam Highway (FSA) 6.30% 5/1/12 .................. $1,950,000 $2,116,823
Puerto Rico Commonwealth Highway &
Transportation Revenue 5.25% 7/1/21 ........... 1,500,000 1,514,445
----------
3,631,268
----------
UTILITY REVENUE BONDS - 4.90%
Puerto Rico Telephone Revenue Authority
5.50% 1/1/22 .................................. 2,120,000 2,179,042
----------
2,179,042
----------
WATER & SEWER REVENUE BONDS - 9.92%
Iowa Finance Authority - State Revolving Fund
Revenue 5.20% 5/1/23 .......................... 2,445,000 2,484,438
Iowa Finance Authority - State Revolving Fund
Revenue 6.25% 5/1/24 .......................... 1,750,000 1,926,085
----------
4,410,523
----------
OTHER REVENUE BONDS - 28.20%
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue-Series A 4.90% 6/1/99 ................. 50,000 50,156
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue-Series A 5.00% 6/1/00 ................. 300,000 302,169
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue-Series A 5.10% 6/1/01 ................. 315,000 318,509
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue-Series A 5.20% 6/1/02 ................. 330,000 334,901
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue-Series A 5.30% 6/1/03 ................. 345,000 351,338
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue-Series A 5.40% 6/1/04 ................. 365,000 372,913
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue-Series A 5.50% 6/1/05 ................. 385,000 394,544
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue-Series A 5.60% 6/1/06 ................. 405,000 416,223
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue-Series A 5.70% 6/1/07 ................. 425,000 437,933
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue-Series A 5.80% 6/1/08 ................. 450,000 463,635
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue-Series A 5.90% 6/1/09 ................. 800,000 824,136
Iowa Finance Authority Revenue - Correctional
Facility Program 5.70% 6/15/14 ................ 2,000,000 2,155,380
Puerto Rico Municipal Finance Authority (FSA)
6.00% 7/1/14 .................................. 1,700,000 1,860,903
Puerto Rico Public Building Authority Revenue -
Series L 5.75% 7/1/16 ......................... 1,000,000 1,047,510
Puerto Rico Public Building Authority Revenue -
Series M 5.50% 7/1/21 ......................... 1,100,000 1,129,480
Puerto Rico Public Building Authority Revenue -
Series M 5.75% 7/1/15 ......................... 1,000,000 1,047,070
Virgin Islands Public Finance Authority Revenue -
Sub Lien Funded Loan Notes Series E
5.875% 10/1/18 ................................ 1,000,000 1,036,300
-----------
12,543,100
-----------
Total Municipal Bonds (cost $40,513,913 ) ........ 43,645,577
------------
<PAGE>
22 for tax-exempt income
TAX-FREE IOWA FUND
STATEMENT OF NET ASSETS (CONTINUED)
- -------------------------------------------------- NUMBER MARKET
OF SHARES VALUE
---------- ----------
SHORT-TERM INVESTMENTS - 0.81%
Norwest Advantage Municipal Money Market Fund .... 362,309 $ 362,309
-----------
Total Short-Term Investments (cost $362,309) ..... 362,309
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.94%
(COST $40,876,222) ........................................... $44,007,886
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 1.06% ......... 471,836
-----------
NET ASSETS APPLICABLE TO 4,377,691 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ...................... $44,479,722
===========
NET ASSET VALUE - TAX-FREE IOWA FUND A CLASS
($39,345,382 / 3,872,389 SHARES) ............................. $10.16
======
NET ASSET VALUE - TAX-FREE IOWA FUND B CLASS
($3,910,074 / 384,783 SHARES) ................................ $10.16
======
NET ASSET VALUE - TAX-FREE IOWA FUND C CLASS
($1,224,266 / 120,519 SHARES) ................................ $10.16
======
COMPONENTS OF NET ASSETS AT AUGUST 31, 1998:
Common stock, $0.01 par value, 10,000,000,000 shares
authorized to the Fund with 1,000,000,000 shares allocated
to Tax-Free Iowa Fund A Class, 1,000,000,000 shares
allocated to Tax-Free Iowa Fund B Class and 1,000,000,000
shares allocated to Tax-Free Iowa Fund C Class ................ $43,108,619
Accumulated net realized loss on investments ................... (1,760,561)
Net unrealized appreciation of investments ..................... 3,131,664
-----------
Total net assets ............................................... $44,479,722
===========
- ----------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
- ----------------------
Summary of Abbreviations:
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE IOWA FUND A CLASS
Net asset value A Class (A) .................................... $10.16
Sales charge (3.75% of offering price or 3.94% of amount
invested per share) (B) ..................................... 0.40
------
Offering price ................................................. $10.56
======
- ----------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $100,000
or more.
See accompanying notes
<PAGE>
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR TAX-FREE KANSAS FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1998
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS - 105.19%
CERTIFICATES OF PARTICIPATION - 8.08%
Linn County, Kansas for American One, LLC 7.25%
3/1/13 .............................................. $ 350,000 $ 351,610
Spring Hill Certificate of Participation A Spring Hill
Golf Corp. 6.50% 1/15/28 ............................ 1,000,000 971,230
----------
1,322,840
----------
GENERAL OBLIGATION BONDS - 20.03%
Allen County Unified School District #258
(AMBAC) 6.875% 9/1/10 .................................. 240,000 295,661
Ellsworth County, Kansas Series 1 5.75% 9/1/17 ......... 250,000 268,315
Johnson County 6.125% 9/1/12 ........................... 600,000 647,376
Linn County Unified School District
5.70% 11/1/16 ....................................... 500,000 531,445
Maize Unified School District #266 Series 1994
(FSA) 5.875% 9/1/12 ................................. 250,000 266,028
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ........................................ 500,000 461,965
Sedgwick County Unified School District #265
(FSA) 5.50% 10/1/13 ................................. 250,000 261,398
Sedgwick County Unified School District #267
(AMBAC) 6.15% 11/1/09 ............................... 250,000 276,930
Summer County Unified School District #356
(MBIA) 5.75% 9/1/11 ................................. 250,000 268,575
----------
3,277,693
----------
HIGHER EDUCATION REVENUE BONDS - 13.93%
Kansas Development Finance Authority - Kansas
Board of Regents - Wichita State University
(AMBAC) 5.875% 6/1/17 ............................... 300,000 318,435
Puerto Rico Educational Facility Revenue -
Polytechnic University 6.50% 8/1/24 ................. 1,170,000 1,282,577
Winfield Kansas Educational Facilities Revenue
Refunding and Improvement 5.75% 4/1/22 .............. 680,000 679,096
----------
2,280,108
----------
HOSPITAL REVENUE BONDS - 8.54%
Lawrence, Kansas For Lawrence Memorial Hospital
6.20% 7/1/19 ........................................ 250,000 266,935
Olathe, Kansas Health Facility Revenue for
Evangelical Lutheran Good Samaritan Project
(AMBAC) 6.00% 5/1/19 ................................ 250,000 268,910
Olathe, Kansas Health Facility Revenue For Olathe
Medical Center Series 94A (AMBAC)
5.875% 9/1/16 ....................................... 100,000 103,755
Shawnee County Sister of Charity Leavenworth
Hospital (FSA) 5.00% 12/1/23 ........................ 250,000 248,915
Wichita, Kansas Health Care Improvement
Industrial Revenue (The Kansas Masonic
Home - Series VI) 6.25% 12/1/17 ..................... 500,000 509,990
----------
1,398,505
----------
<PAGE>
for tax-exempt income 23
TAX-FREE KANSAS FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS - 19.07%
Garnett Kansas Senior Housing Annual Appropriation
Leasehold Revenue Garnett Housing Authority
Project 5.90% 10/1/18 .............................. $ 810,000 $ 817,428
Kansas Development Finance Authority Revenue for
Martin Creek Multifamily Housing Project (FHA)
6.50% 8/1/24 ....................................... 50,000 53,348
Kansas State Development Finance Authority
Multifamily Revenue - Oak Ridge Park Apartments
Project - Series F 6.625% 8/1/29 ................... 1,000,000 1,067,200
Olathe, Kansas Multifamily Housing - Deerfield
Apartments Series 1994A (FNMA) 6.45%
6/1/19 ............................................. 250,000 268,400
Olathe, Kansas Multifamily Housing - Jefferson
Place Apartments Project - Series B
6.10% 7/1/22 ....................................... 300,000 312,804
Wichita Kansas Multifamily Housing Innes Station
Apartments Project I 6.25% 3/1/28 .................. 600,000 602,124
----------
3,121,304
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 5.22%
Columbus Kansas Industrial Revenue ACE Electrical
Acquisition 7.00% 8/1/17 ........................... 800,000 802,608
Wamego Pollution Control Revenue Western
Resources Inc. Project (MBIA) 6.00% 2/1/33 ......... 50,000 52,581
----------
855,189
----------
*PRE-REFUNDED BONDS - 10.01%
Douglas County Lawrence Unified School District
#497 6.00% 9/1/15-03 ............................... 250,000 270,085
Jefferson County Unified School District #340
(FSA) 6.35% 9/1/15-04 .............................. 250,000 280,333
Kansas City Community College Student Center
(MBIA) 6.25% 5/15/20-02 ............................ 300,000 324,912
Kansas Development Finance Authority Water
Pollution Control Sewer Revenue
6.00% 11/1/14-03 ................................... 250,000 277,168
Shawnee County Unified School District #345
(MBIA) 5.75% 9/1/11-04 ............................. 250,000 272,420
Shawnee County Unified School District #501
(FGIC) 5.75% 2/1/11-03 ............................. 200,000 214,015
----------
1,638,933
----------
POWER AUTHORITY REVENUE BONDS - 6.02%
Puerto Rico Electric Power Authority Series EE
4.75% 7/1/24 ....................................... 500,000 478,455
Puerto Rico Electric Power Authority Series Z
5.25% 7/1/21 ....................................... 500,000 506,255
----------
984,710
----------
TRANSPORTATION REVENUE BONDS - 0.63%
Kansas Department of Transportation
5.375% 3/1/13 ...................................... 100,000 103,119
----------
103,119
----------
WATER & SEWER REVENUE BONDS - 8.91%
Haysville Water & Sewer (FSA)
5.80% 10/1/16 ...................................... 250,000 269,340
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ----------
MUNICIPAL BONDS (CONTINUED)
WATER & SEWER REVENUE BONDS (Continued)
Johnson County Water Revenue 5.25% 12/1/15 ............ $175,000 $ 179,660
Kansas City Utility System Revenue (FGIC)
6.375% 9/1/23 ...................................... 900,000 1,010,187
----------
1,459,187
----------
OTHER REVENUE BONDS - 4.75%
Virgin Islands Public Finance Authority Revenue Sub
Lien Funded Loan Notes Series E 5.875% 10/1/18 ........ 750,000 777,225
----------
777,225
----------
Total Municipal Bonds (cost $16,110,665) 17,218,813
----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 105.19%
(COST $16,110,665) ........................................... $17,218,813
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (5.19%)** ..... (850,155)
-----------
NET ASSETS APPLICABLE TO 1,465,695 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ...................... $16,368,658
===========
NET ASSET VALUE - TAX-FREE KANSAS FUND A CLASS
($12,547,719 / 1,123,890 SHARES) ................................... $11.16
======
NET ASSET VALUE - TAX-FREE KANSAS FUND B CLASS
($3,694,331 / 330,458 SHARES) ...................................... $11.18
======
NET ASSET VALUE - TAX-FREE KANSAS FUND C CLASS
($126,608 / 11,347 SHARES) ......................................... $11.16
======
COMPONENTS OF NET ASSETS AT AUGUST 31, 1998:
Common stock, $0.01 par value, unlimited shares authorized
to the Tax-Free Kansas Fund .................................. $15,219,942
Undistributed net investment income ............................. 118
Accumulated net realized gain on investments .................... 40,450
Net unrealized appreciation of investments ...................... 1,108,148
-----------
Total net assets ................................................ $16,368,658
===========
- ----------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
** Of this amount, $968,120 represents payables for securities purchased at
August 31, 1998.
- ----------------------
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
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
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE KANSAS FUND A CLASS
Net asset value A Class (A) $11.16
Sales charge (3.75% of offering price or 3.85% of
amount invested per share) (B) 0.43
------
Offering price $11.59
======
- ----------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $100,000
or more.
See accompanying notes
<PAGE>
24 for tax-exempt income
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR TAX-FREE MISSOURI INSURED FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1998
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS - 99.63%
GENERAL OBLIGATION BONDS - 6.12%
Franklin County School District (FGIC)
5.75% 3/1/13 .................................... $1,100,000 $ 1,164,097
Springfield School District #R12 Series A (MBIA)
5.25% 3/1/11 .................................... 500,000 513,470
St. Charles (FSA) 5.75% 3/1/15 ..................... 1,000,000 1,066,320
St. Charles County Montana Francis Howell School
District Capital Appreciation (FGIC)
0.00% 3/1/16 .................................... 2,000,000 828,720
-----------
3,572,607
-----------
HIGHER EDUCATION REVENUE BONDS - 3.46%
Missouri State Health & Education Facility -
Central Missouri State University (AMBAC)
5.75% 10/1/25 ................................... 1,000,000 1,051,500
Missouri State Health & Education Facility -
University Revenue for St. Louis University
(AMBAC) 4.75% 10/1/16 ........................... 1,000,000 970,440
-----------
2,021,940
-----------
HOSPITAL REVENUE BONDS - 24.18%
Cape Girardeau SE Missouri Hospital (MBIA)
5.25% 6/1/16 .................................... 1,000,000 1,047,160
Hannibal Health Facilities Series A (Hannibal
Regional Hospital) (FSA) 5.625% 3/1/12 .......... 2,500,000 2,669,550
Hannibal Health Facilities Series A (Hannibal
Regional Hospital) (FSA) 5.75% 3/1/22 ........... 1,000,000 1,065,480
Jackson County St. Joseph's Hospital (MBIA)
6.50% 7/1/12 .................................... 1,980,000 2,159,111
Jackson County St. Mary's Hospital (MBIA)
5.75% 7/1/24 .................................... 2,000,000 2,107,940
Missouri State Health & Education Facility
(Children's Mercy Hospital) (MBIA)
5.65% 5/15/23 ................................... 1,000,000 1,036,900
Missouri State Health & Education Facility
(Health Midwest) (MBIA) 6.25% 2/15/22 ........... 1,000,000 1,071,470
Missouri State Health & Education Facility
(Heartland Health Systems) (AMBAC)
6.35% 11/15/17 .................................. 1,250,000 1,358,738
Missouri State Health & Education Facility (SSM
Health Care) (MBIA) 6.40% 6/1/10 ................ 500,000 587,890
Missouri State Health & Education Facility
(St. Luke's Health Systems) (MBIA)
5.125% 11/15/19 ................................. 1,000,000 1,007,400
-----------
14,111,639
-----------
HOUSING REVENUE BONDS - 16.97%
Missouri Single Family Housing (FNMA/GNMA)
7.20% 9/1/26 1,980,000 2,274,426
Missouri Single Family Housing (FNMA/GNMA)
7.25% 9/1/26 2,295,000 2,592,409
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS CONTINUED)
Missouri Single Family Housing (FNMA/GNMA)
7.45% 9/1/27 ..................................... $1,865,000 $ 2,152,788
Missouri Single Family Housing (FNMA/GNMA)
7.55% 9/1/27 ..................................... 1,830,000 2,112,259
Missouri Single Family Housing (GNMA)
7.20% 12/1/17 .................................... 230,000 255,358
Missouri Single Family Housing (GNMA)
7.25% 12/1/20 .................................... 465,000 515,652
-----------
9,902,892
-----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 1.87%
St. Louis Municipal Finance Corporation City Lease
Revenue - City Justice Center, Series A
(AMBAC) 5.95% 2/15/16 ............................ 1,000,000 1,089,280
-----------
1,089,280
-----------
LEASE - 1.85%
Kansas City Muehlebach Hotel (FSA)
5.90% 12/1/18 .................................... 1,000,000 1,076,910
-----------
1,076,910
-----------
POWER AUTHORITY REVENUE BONDS - 6.86%
Puerto Rico Electric Power Authority Power Revenue -
Series DD (FSA) 4.50% 7/1/19 ..................... 1,700,000 1,613,878
Sikeston Electric Revenue (MBIA)
5.00% 6/1/22 ..................................... 1,250,000 1,249,900
Sikeston Electric Revenue (MBIA)
6.00% 6/1/13 ..................................... 1,000,000 1,141,670
-----------
4,005,448
-----------
*PRE-REFUNDED/ESCROWED TO MATURITY
BONDS - 23.76%
Clark County School District (FSA)
5.75% 3/1/15-05 .................................. 1,775,000 1,885,405
Greene County Single Family Mortgage Revenue -
(Private Mortgage Insurance) (Escrowed to
maturity) 0.00% 3/1/16 ........................... 1,225,000 513,679
Kansas City Airport Revenue (FSA)
6.875% 9/1/14-04 ................................. 1,675,000 1,942,632
Sikeston Electric Revenue (MBIA)
6.25% 6/1/12-02 .................................. 2,000,000 2,206,340
St. Charles School District (FGIC)
6.50% 2/1/14-06 .................................. 1,250,000 1,435,700
St. Louis County School District #8 (MBIA)
5.60% 2/15/15-05 ................................. 1,490,000 1,619,913
St. Louis Municipal Finance Corporation Leasehold
Revenue - (FGIC) 6.25% 2/15/12-05 ................ 1,850,000 2,078,956
Troy School District #3 Lincoln County (MBIA)
6.10% 3/1/14-05 .................................. 1,235,000 1,378,309
West Platte School District (MBIA)
5.85% 3/1/15-05 .................................. 750,000 809,760
-----------
13,870,694
-----------
<PAGE>
for tax-exempt income 25
TAX-FREE MISSOURI INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
- -----------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- -----------
MUNICIPAL BONDS (CONTINUED)
UTILITY REVENUE BONDS - 4.05%
Missouri Environmental Pollution Control Revenue -
St. Joseph's Light and Power Co. (AMBAC)
5.85% 2/1/13 ..................................... $2,200,000 $ 2,366,386
-----------
2,366,386
-----------
WATER & SEWER REVENUE BONDS - 4.05%
Liberty Sewer (MBIA) 6.00% 2/1/08 ................... 600,000 680,226
Liberty Sewer (MBIA) 6.15% 2/1/15 ................... 1,500,000 1,682,640
-----------
2,362,866
-----------
OTHER REVENUE BONDS - 6.46%
Kansas City Municipal Assistance - Bartle Hall
Convention Center (MBIA) 5.60% 4/15/16 ........... 1,240,000 1,301,777
Missouri State Environmental - State Revolving
Fund - Branson (FSA) 6.05% 7/1/16 ................ 2,265,000 2,467,015
-----------
3,768,792
-----------
Total Municipal Bonds (cost $53,504,006 ) 58,149,454
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.63%
(COST $53,504,006) ........................................... $58,149,454
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.37% ......... 218,144
-----------
NET ASSETS APPLICABLE TO 5,367,994 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ...................... $58,367,598
===========
NET ASSET VALUE - TAX-FREE MISSOURI INSURED FUND A CLASS
($46,939,347 / 4,316,688 SHARES) ................................... $10.87
======
NET ASSET VALUE - TAX-FREE MISSOURI INSURED FUND B CLASS
($11,316,550 / 1,041,037 SHARES) ................................... $10.87
======
NET ASSET VALUE - TAX-FREE MISSOURI INSURED FUND C CLASS
($111,701 / 10,269 SHARES) ......................................... $10.88
======
COMPONENTS OF NET ASSETS AT AUGUST 31, 1998:
Common stock, $0.01 par value, 10,000,000,000 shares
authorized to the Fund with 1,000,000,000 shares allocated
to Tax-Free Missouri Insured Fund A Class, 1,000,000,000
shares allocated to Tax-Free Missouri Insured Fund B Class
and 1,000,000,000 shares allocated to Tax-Free Missouri
Insured Fund C Class $54,663,569
Accumulated net realized loss on investments (941,419)
Net unrealized appreciation of investments 4,645,448
-----------
Total net assets $58,367,598
===========
- ----------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
- ----------------------
Summary of Abbreviations:
<PAGE>
AMBAC - Insured by the AMBAC Indemnity Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE MISSOURI INSURED FUND A CLASS
Net asset value A Class (A) $10.87
Sales charge (3.75% of offering price or 3.86% of
amount invested per share) (B) 0.42
------
Offering price $11.29
======
- ----------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $100,000
or more.
See accompanying notes
VOYAGEUR TAX-FREE FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE NORTH DAKOTA FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1998
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS - 98.68%
General Obligation Bonds - 1.59%
Grand Forks Sewer Revenue 6.70% 6/1/07 .............. $ 270,000 $ 287,735
North Dakota State Real Estate 6.00% 9/1/13 ......... 215,000 215,000
----------
502,735
----------
HIGHER EDUCATION REVENUE BONDS - 3.41%
Burleigh County University Facilities University of
Mary Project 7.125% 12/1/11 ...................... 250,000 265,443
North Dakota State University Housing & Auxiliary
Facility 6.30% 4/1/07 ............................ 250,000 268,848
North Dakota State University Housing & Auxiliary
Facility 6.50% 4/1/12 ............................ 500,000 540,720
----------
1,075,011
----------
HOSPITAL REVENUE BONDS - 29.94%
Bismarck Hospital Alexius Medical Center (AMBAC)
6.90% 5/1/06 ..................................... 500,000 543,365
Bismarck Hospital Medical Center One Inc. (MBIA)
7.50% 5/1/13 ..................................... 250,000 260,758
Cando, North Dakota Nursing Facility Revenue -
Towner County Medical Center Project
7.125% 8/1/22 .................................... 1,000,000 1,092,990
Carrington, North Dakota Health Facility Revenue
for Carrington Health Center 6.25% 11/15/15 ...... 500,000 540,800
Cass County, North Dakota Health Facility Revenue
for Catholic Health - Villa Nazareth Project
6.25% 11/15/14 ................................... 1,000,000 1,081,600
<PAGE>
26 for tax-exempt income
TAX-FREE NORTH DAKOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Fargo Hospital Facility St. Luke's Hospital,
Series 1992 6.50% 6/1/15 ......................... $1,000,000 $1,089,030
Grand Forks, North Dakota Senior Housing Revenue
4000 Valley Square Project 6.25% 12/1/34 ......... 2,000,000 2,041,960
Grand Forks, United Hospital Obligated Group
(MBIA) 6.125% 12/1/14 ............................ 225,000 249,532
Grand Forks, United Hospital Obligated Group
(MBIA) 6.25% 12/1/19 ............................. 250,000 275,338
Killdeer, North Dakota Nursing Care Revenue -
Hill Top Home of Comfort 6.00% 11/1/12 ........... 850,000 869,754
Valley City, North Dakota Congregate Housing
Revenue - Bridgeview Estates Project 7.25%
8/1/22 ........................................... 300,000 328,062
Ward County, North Dakota Health Care Facility
Revenue - Trinity Obligated Group Ser96A
6.00% 7/1/11 ..................................... 1,000,000 1,061,260
----------
9,434,449
----------
HOUSING REVENUE BONDS - 26.41%
Grand Forks Multifamily Housing Authority Revenue -
Ryan House Section 8 6.30% 3/1/22 ................ 305,000 330,022
Minot Single Family Mortgage 7.70% 8/1/10 ........... 210,000 224,285
North Dakota Housing Finance Authority Single
Family Mortgage 6.25% 1/1/17 ..................... 2,225,000 2,391,252
North Dakota Housing Finance Authority Single
Family Mortgage Series A 6.30% 7/1/16 ............ 1,955,000 2,103,091
North Dakota Housing Finance Agency
Single Family Mortgage Series A (FHA)
6.75% 7/1/12 ..................................... 160,000 170,627
North Dakota State Housing Finance Agency
Revenue Multifamily (FNMA) 6.125%
12/1/15 .......................................... 500,000 536,975
North Dakota State Housing Finance Agency
Revenue Multifamily (FNMA) 6.15%
12/1/17 .......................................... 1,300,000 1,394,536
North Dakota State Housing Finance Agency
Single Family Mortgage Series E (FNMA)
6.30% 1/1/15 ..................................... 790,000 848,160
North Dakota State Housing Finance Authority
Single Family Mortgage Series A
6.95% 7/1/12 ..................................... 300,000 321,549
----------
8,320,497
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 1.71%
Mercer County Pollution Control - Otter Tail Power
Company Project 6.90% 2/1/19 ..................... 500,000 537,515
----------
537,515
----------
POWER AUTHORITY REVENUE BONDS - 18.50%
Mercer County Pollution Control Revenue
Montana-Dakota Utilities Company Project
(FGIC) 6.65% 6/1/22 .............................. 500,000 549,640
Mercer County Pollution Control Revenue for
Basin Electric Power 6.05% 1/1/19 ................ 1,250,000 1,367,188
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS (CONTINUED)
POWER AUTHORITY REVENUE BONDS (CONTINUED)
Puerto Rico Electric Power Authority Power
Revenue Series DD (FSA) 4.50% 7/1/19 ............. $1,250,000 $ 1,186,675
Puerto Rico Electric Power Authority Power
Revenue Series EE 4.75% 7/1/24 ................... 2,000,000 1,913,820
Puerto Rico Electric Power Authority Series Z
5.25% 7/1/21 ..................................... 800,000 810,008
-----------
5,827,331
-----------
*PRE-REFUNDED BONDS - 2.46%
Devils Lake Public School District #1
6.80% 5/1/11-99 .................................. 100,000 102,118
Fargo Park District Revenue 7.25% 11/1/11-00 ........ 200,000 214,300
North Dakota State Municipal Bond Bank
6.25% 12/1/11-99 ................................. 450,000 458,798
-----------
775,216
-----------
TRANSPORTATION REVENUE BONDS - 4.95%
Puerto Rico Commonwealth Highway &
Transportation Authority Series Y
5.50% 7/1/26 ..................................... 1,500,000 1,559,925
-----------
1,559,925
-----------
OTHER REVENUE BONDS - 9.71%
North Dakota Building Authority Revenue (FSA)
6.00% 12/1/14 .................................... 1,310,000 1,413,621
North Dakota Building Authority Revenue (FSA)
6.10% 12/1/16 .................................... 1,480,000 1,603,358
North Dakota State Student Loan (AMBAC)
7.00% 7/1/05 ..................................... 40,000 41,591
-----------
3,058,570
-----------
Total Municipal Bonds (cost $28,926,652) 31,091,249
-----------
Number
of Shares
----------
SHORT-TERM INVESTMENTS - 0.59%
NORWEST ADVANTAGE MUNICIPAL MONEY MARKET FUND ....... 184,412 184,412
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $184,412) ........ 184,412
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED
(COST $29,111,064) - 99.27% .................................. $31,275,661
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.73% ......... 229,906
-----------
NET ASSETS APPLICABLE TO 2,754,930 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ...................... $31,505,567
===========
NET ASSET VALUE - TAX-FREE NORTH DAKOTA FUND A CLASS
($30,495,716 / 2,666,624 SHARES) ................................... $11.44
======
NET ASSET VALUE - TAX-FREE NORTH DAKOTA FUND B CLASS
($980,205 / 85,712 SHARES) ......................................... $11.44
======
NET ASSET VALUE - TAX-FREE NORTH DAKOTA FUND C CLASS
($29,646 / 2,594 SHARES) ........................................... $11.43
======
<PAGE>
for tax-exempt income 27
TAX-FREE NORTH DAKOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS AT AUGUST 31, 1998:
Common stock, $0.01 par value, 10,000,000,000 shares authorized
to the Fund with 1,000,000,000 shares allocated to
Tax-Free North Dakota Fund A Class, 1,000,000,000 shares
allocated to Tax-Free North Dakota Fund B Class and
1,000,000,000 shares allocated to Tax-Free
North Dakota Fund C Class .................................... $29,313,974
Accumulated net realized gain on investments .................... 26,996
Net unrealized appreciation of investments ...................... 2,164,597
------------
Total net assets ................................................ $31,505,567
============
- ----------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
- ----------------------
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
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
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE NORTH DAKOTA FUND A CLASS
Net asset value A Class (A) ............................................ $11.44
Sales charge (3.75% of offering price or 3.93%
of amount invested per share) (B) ................................... 0.45
------
Offering price $11.89
======
- ----------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See How to Buy Shares the current Prospectus for purchases of $100,000
or more.
See accompanying notes
<PAGE>
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR
TAX-FREE OREGON INSURED FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1998
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS - 97.95%
CERTIFICATES OF PARTICIPATION - 3.43%
Oregon State Department Administrative Services
Certificate of Participation - Series A (AMBAC)
5.80% 5/1/24 ..................................... $1,000,000 $1,075,710
----------
1,075,710
----------
GENERAL OBLIGATION BONDS - 19.10%
Hermiston Water Bonds (AMBAC) 6.20% 8/1/24 .......... 500,000 546,920
Lane County School District #19 (Springfield)
(FGIC) 6.00% 10/15/14 ............................ 500,000 570,410
Lincoln County School District (FGIC)
5.25% 6/15/12 .................................... 1,450,000 1,521,761
Malheur County Jail (MBIA) 6.30% 12/1/12 ............ 500,000 559,005
Multnomah County School District #3 Park Rose
(FGIC) 5.50% 12/1/11 ............................. 500,000 528,410
North Unit Irrigation District (MBIA)
5.75% 6/1/16 ..................................... 1,000,000 1,067,420
Portland (MBIA) 5.75% 6/1/15 ........................ 500,000 527,345
Tillamook County (FGIC) 6.25% 1/1/14 ................ 250,000 277,623
Umatilla County Oregon School District #6R
Umatilla (AMBAC) 0.00% 12/15/22 .................. 200,000 60,428
Washington County School District (Sherwood)
(FSA) #88J 6.10% 6/1/12 .......................... 300,000 329,643
----------
5,988,965
----------
HIGHER EDUCATION REVENUE BONDS - 16.19%
Central Oregon Community College (FGIC)
5.90% 6/1/09 ..................................... 750,000 807,683
Oregon Health and Education Authority for Lewis
& Clark College (MBIA) 6.125% 10/1/24 ............ 1,055,000 1,157,187
Oregon Health and Education Authority for Reed
College (MBIA) 5.375% 7/1/25 ..................... 1,000,000 1,034,260
Oregon Health Sciences University (MBIA)
0.00% 7/1/21 ..................................... 6,500,000 2,077,334
----------
5,076,464
----------
HOSPITAL REVENUE BONDS - 6.91%
Western Lane Hospital District for Sisters of
St. Joseph Peace Hospital (MBIA)
5.75% 8/1/19 ..................................... 1,000,000 1,070,400
Western Lane Hospital District for Sisters of
St. Joseph Peace Hospital (MBIA)
5.875% 8/1/12 .................................... 1,000,000 1,095,300
----------
2,165,700
----------
HOUSING REVENUE BONDS - 3.66%
Oregon Health, Housing, Educational, and Cultural
Facilities Authority for Pier Park Project (GNMA)
6.05% 4/1/18 ..................................... 1,095,000 1,147,735
----------
1,147,735
----------
<PAGE>
28 for tax-exempt income
TAX-FREE OREGON INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS (CONTINUED)
POWER AUTHORITY REVENUE BONDS - 10.49%
Central Lincoln Peoples Utility District (AMBAC)
5.75% 1/1/15 ..................................... $ 500,000 $ 524,995
Northern Wasco County (FGIC) 5.625% 12/1/22 ......... 1,000,000 1,053,460
Puerto Rico Electric Power Authority Power Revenue
Series DD (FSA) 4.50% 7/1/19 ..................... 1,800,000 1,708,812
----------
3,287,267
----------
*PRE-REFUNDED BONDS - 21.25%
Chemeketa Community College (FGIC)
5.80% 6/1/12-06 .................................. 1,500,000 1,662,390
Eugene Electric Revenue Series C (MBIA)
5.80% 8/1/22-04 .................................. 1,250,000 1,377,250
Lane County School District #19 (MBIA)
6.30% 10/15/14-04 ................................ 500,000 565,750
Multnomah County School District #39 Corbett
(MBIA) 6.00% 12/1/13-04 .......................... 500,000 553,285
Portland Sewer System Revenue (FSA)
6.25% 6/1/15-04 .................................. 1,000,000 1,122,350
Umatilla Pendleton School District (AMBAC)
#016R 6.00% 7/1/14-04 ............................ 500,000 555,465
Washington County Education Service (MBIA)
7.10% 6/1/25-05 .................................. 700,000 824,845
----------
6,661,335
----------
TRANSPORTATION REVENUE BONDS - 6.69%
Portland Airport Revenue for Portland
International Airport (FGIC) 5.625% 7/1/26 ....... 2,000,000 2,095,980
----------
2,095,980
----------
WATER & SEWER REVENUE BONDS - 10.23%
Beaverton Water Revenue (FSA)
6.125% 6/1/14 .................................... 500,000 545,090
Klamath Falls Water Revenue (FSA)
6.10% 6/1/14 ..................................... 500,000 548,185
Salem Water & Sewer Revenue (MBIA)
5.50% 6/1/14 ..................................... 1,000,000 1,054,670
Salem Water & Sewer Revenue (MBIA)
5.625% 6/1/16 .................................... 1,000,000 1,057,390
----------
3,205,335
----------
Total Municipal Bonds (cost $28,127,474) 30,704,491
----------
NUMBER
OF SHARES
----------
SHORT-TERM INVESTMENTS - 0.42%
Norwest Advantage Municipal Money Market Fund ....... 131,417 131,417
----------
Total Short-Term Investments (cost $131,417) ........ 131,417
----------
<PAGE>
TOTAL MARKET VALUE OF SECURITIES OWNED
(COST $28,258,891) - 98.37% .................................. $30,835,908
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 1.63% ......... 510,427
-----------
NET ASSETS APPLICABLE TO 3,005,388 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ...................... $31,346,335
===========
NET ASSET VALUE - TAX-FREE OREGON INSURED FUND A CLASS
($24,336,373 / 2,333,496 SHARES) ................................... $10.43
======
NET ASSET VALUE - TAX-FREE OREGON INSURED FUND B CLASS
($6,011,134 / 576,212 SHARES) ...................................... $10.43
======
NET ASSET VALUE - TAX-FREE OREGON INSURED FUND C CLASS
($998,828 / 95,680 SHARES) ......................................... $10.44
======
COMPONENTS OF NET ASSETS AT AUGUST 31, 1998:
Common stock, $0.01 par value, unlimited shares authorized to the
Tax-Free Oregon Insured Fund ................................. $29,381,429
Accumulated net realized loss on investments .................... (612,111)
Net unrealized appreciation of investments ...................... 2,577,017
-----------
Total net assets ................................................ $31,346,335
===========
- ----------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
- ----------------------
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE OREGON INSURED FUND A CLASS
Net asset value A Class (A) ........................................... $10.43
Sales charge (3.75% of offering price or 3.93%
of amount invested per share) (B) .................................. 0.41
------
Offering price ........................................................ $10.84
======
- ----------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $100,000
or more.
See accompanying notes
<PAGE>
for tax-exempt income 29
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR TAX-FREE WASHINGTON INSURED FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1998
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS - 97.42%
GENERAL OBLIGATION BONDS - 16.67%
Benton County Independent School District #116
(FGIC) 5.80% 12/1/10 ............................. $100,000 $109,505
Bothell (AMBAC) 5.70% 12/1/10 ....................... 75,000 81,132
Clark County School District #114 (FGIC)
6.00% 12/1/11 .................................... 75,000 82,126
Kent Washington Series A (MBIA)
6.00% 12/1/16 .................................... 100,000 110,855
King County Kent School District #415 (MBIA)
5.55% 12/1/11 .................................... 75,000 83,184
Snohomish County (MBIA) 5.90% 12/1/15 ............... 75,000 79,982
Washington State Series 93A Utility General
Obligation (FGIC) 5.75% 10/1/17 .................. 100,000 105,697
---------
652,481
---------
HIGHER EDUCATION REVENUE BONDS - 14.99%
Washington Higher Education Pacific Lutheran
College (Connie Lee) 5.70% 11/1/26 ............... 200,000 212,836
Washington State Higher Educational Facilities
Seattle University Project (AMBAC)
5.20% 5/1/28 ..................................... 150,000 152,267
Washington State University Housing & Dining
System (MBIA) 6.375% 10/1/18 ..................... 200,000 221,264
---------
586,367
---------
HOSPITAL REVENUE BONDS - 17.31%
University Of Washington Medical Center (FSA)
6.30% 8/15/14 .................................... 200,000 221,794
Washington State Health Care Facilities Authority
Revenue Multicare Health Systems
5.00% 8/15/22 .................................... 150,000 147,935
Washington State Health Care Facilities Authority
Revenue Swedish Health Systems (AMBAC)
5.25% 11/15/26 ................................... 100,000 100,709
Washington State Health Care Facility Authority
Revenue Yakima Valley Memorial Hospital
(Connie Lee) 5.25% 12/1/20 ....................... 100,000 101,257
Washington State Health Care Facility Authority
Revenue Peace Health (MBIA)
5.625% 11/15/15 .................................. 100,000 105,841
---------
677,536
---------
HOUSING REVENUE BONDS - 23.60%
King County, Washington Housing Authority -
Fred Lind Manor Project-A (GNMA)
6.672% 6/20/32 ................................... 200,000 222,450
Kitsap County Housing (GNMA) 7.10% 2/20/36 .......... 200,000 230,114
Washington State Housing Finance
Commonwealth Multifamily Mortgage
Revenue A (GNMA) 6.00% 7/1/30 .................... 60,000 64,097
Washington State Housing Finance - Single Family
Series 2 A (GNMA) (AMT) 6.30% 12/1/27 ............ 180,000 193,514
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Washington State Housing Single Family Mortgage
Revenue (GNMA) 6.20% 12/1/22 ..................... $200,000 $ 213,415
----------
923,590
----------
INDUSTRIAL DEVELOPMENT REVENUE
Bonds - 2.11%
University Of Washington Parking Revenue
(AMBAC) 6.125% 11/1/14 ........................... 75,000 82,544
----------
82,544
----------
POWER AUTHORITY REVENUE BONDS - 8.17%
Grant County Public Utility District #2 Wanapum
(MBIA) 5.875% 1/1/26 ............................. 100,000 106,068
Kittitas County Public Utility District #1 (MBIA)
5.80% 12/1/20 .................................... 100,000 106,175
Washington State Public Power #1 (MBIA)
5.75% 7/1/12 ..................................... 100,000 107,610
----------
319,853
----------
TRANSPORTATION REVENUE BONDS - 5.12%
Port Seattle, Washington Passenger Facilities
Charge Revenue Series A 5.00% 12/1/23 ............ 150,000 148,925
Port Tacoma, Washington (AMBAC)
5.30% 12/1/17 .................................... 50,000 51,282
----------
200,207
----------
WATER & SEWER REVENUE BONDS - 9.45%
Covington Water & Sewer Revenue (AMBAC)
6.00% 3/1/15 ..................................... 75,000 80,707
Olympia Washington Water & Sewer (FGIC)
5.125% 11/1/17 ................................... 100,000 101,860
Seattle Metropolitan Sewer Revenue (FGIC)
5.70% 1/1/14 ..................................... 75,000 79,340
Vancouver Water & Sewer Revenue (FGIC)
6.00% 6/1/16 ..................................... 100,000 108,031
----------
369,938
----------
Total Municipal Bonds (cost $3,534,349) 3,812,516
----------
NUMBER
OF SHARES
----------
SHORT-TERM INVESTMENTS - 1.33%
Norwest Advantage Municipal Money Market Fund ....... 51,877 51,877
----------
Total Short-Term Investments (cost $51,877) ....................... 51,877
----------
TOTAL MARKET VALUE OF SECURITIES OWNED
(COST $3,586,226 ) - 98.75 % ................................... $3,864,393
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 1.25% ........... 48,891
----------
NET ASSETS APPLICABLE TO 358,811 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ........................ $3,913,284
==========
<PAGE>
30 for tax-exempt income
TAX-FREE WASHINGTON INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
NET ASSET VALUE - TAX-FREE WASHINGTON INSURED FUND A CLASS
($2,325,530 / 213,340 SHARES) .................................. $10.90
======
NET ASSET VALUE - TAX-FREE WASHINGTON INSURED FUND B CLASS
($1,303,620 / 119,423 SHARES) .................................. $10.92
======
NET ASSET VALUE - TAX-FREE WASHINGTON INSURED FUND C CLASS
($284,134 / 26,048 SHARES) ..................................... $10.91
======
COMPONENTS OF NET ASSETS AT AUGUST 31,1998:
Common stock, $0.01 par value, unlimited shares authorized
to the Tax-Free Washington Insured Fund ........................ $3,715,857
Accumulated net realized loss on investments ...................... (80,740)
Net unrealized appreciation of investments ........................ 278,167
----------
Total net assets .................................................. $3,913,284
==========
- ----------------------
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
AMT - Alternative Minimum Tax
Connie Lee - Insured by the College Construction Insurance Association
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE WASHINGTON INSURED FUND A CLASS
Net asset value A Class (A) .......................................... $10.90
Sales charge (3.75% of offering price or 3.85%
of amount invested per share) (B) ................................. 0.42
------
Offering price ....................................................... $11.32
======
- ----------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See How to Buy Shares the current Prospectus for purchases of $100,000 or
more.
See accompanying notes
<PAGE>
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE WISCONSIN FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1998
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS - 98.91%
GENERAL OBLIGATION BONDS - 3.61%
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ..................................... $1,500,000 $1,385,895
----------
1,385,895
----------
HIGHER EDUCATION REVENUE BONDS - 2.22%
Madison Community Development Authority
Revenue - Edgewood College 6.25% 4/1/14 .......... 500,000 532,725
Puerto Rico Educational Facility Revenue -
Polytechnic University 6.50% 8/1/24 .............. 290,000 317,904
----------
850,629
----------
HOSPITAL REVENUE BONDS - 2.61%
Kaukauna Housing Authority Revenue -
St. Paul Home Inc. 6.10% 9/1/07 .................. 200,000 206,540
Puerto Rico Industrial Tourist Educational
Medical & Environmental Control Facilities
(Hospital Auxilio Mutuo Project -Series A)
5.50% 7/1/17 ..................................... 500,000 530,990
Superior Redevelopment Authority Revenue -
Superior Memorial Hospital (FHA)
5.80% 5/1/10 ..................................... 250,000 263,438
----------
1,000,968
----------
HOUSING REVENUE BONDS - 30.42%
Dane County Multifamily Housing Revenue -
Forest Harbor Apartment Project
5.85% 7/1/11 ..................................... 125,000 131,076
Dane County Multifamily Housing Revenue -
Forest Harbor Apartment Project
5.90% 7/1/12 ..................................... 125,000 130,296
Grant County Wisconsin Housing Authority
Revenue Refunding - Housing -
Orchard Manor 5.35% 7/1/26 ....................... 1,000,000 1,007,520
Green Bay Wisconsin Housing Authority Multifamily
Housing Revenue - Moraine Limited -
Series A (FHA) 6.15% 12/1/30 ..................... 2,500,000 2,683,975
La Crosse Housing Authority Washburn Project
6.375% 10/1/16 ................................... 100,000 104,787
La Crosse Housing Authority Washburn Project
6.50% 10/1/26 .................................... 250,000 260,873
Milwaukee Redevelopment Authority Multifamily
6.30% 8/1/38 ..................................... 1,455,000 1,545,530
New Berlin Multifamily Housing Authority Revenue
7.125% 5/1/24 .................................... 500,000 535,380
Puerto Rico Housing Authority Single Family
Mortgage Revenue 6.85% 10/15/23 .................. 625,000 665,856
Puerto Rico Housing Bank and Finance Agency
(GNMA) 6.25% 4/1/29 .............................. 995,000 1,065,794
Superior Housing Authority - St. Francis Project
(GNMA) 6.00% 1/20/22 ............................. 565,000 591,278
Superior Housing Authority - St. Francis Project
(GNMA) 6.15% 7/20/31 ............................. 835,000 871,982
<PAGE>
for tax-exempt income 31
TAX-FREE WISCONSIN FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Waukesha Wisconsin Housing Westgrove Wood
Project (GNMA) 6.00% 12/1/31 $1,500,000 $1,593,015
Wauwatosa Multifamily Housing Revenue -
Harwood Place, Inc. 5.75% 12/1/08 480,000 491,962
----------
11,679,324
----------
INDUSTRIAL DEVELOPMENT REVENUE
BONDS - 16.50%
Hartford Community Development Authority Lease
Revenue 6.15% 12/1/09 ............................ 240,000 260,107
Milwaukee Redevelopment Authority Revenue -
Goodwill Industries, Inc. 6.35% 10/1/09 .......... 2,000,000 2,110,580
Omro Community Development Authority
5.875% 12/1/11 ................................... 300,000 322,350
Puerto Rico Commonwealth Industrial
Development General Purpose Revenue
Series B 5.375% 7/1/16 ........................... 1,000,000 1,034,370
Puerto Rico Industrial Medical Environmental
Revenue - PepsiCo Project 6.25% 11/15/13 ......... 1,100,000 1,212,277
Two Rivers Community Development Authority
Revenue Architectural Forest Products
6.35% 12/15/12 ................................... 250,000 257,895
West Allis Community Development Authority
Revenue - Poblocki Investments, Ltd.
5.90% 5/1/03 ..................................... 1,080,000 1,136,884
----------
6,334,463
----------
LEASE/CERTIFICATES OF PARTICIPATION - 14.66%
Cudahy Community Development Authority Revenue
6.00% 6/1/11 ..................................... 1,000,000 1,073,360
De Forest Redevelopment Lease Revenue
6.25% 2/1/18 ..................................... 1,000,000 1,064,470
Little Chute Community Development Lease
Revenue 5.625% 3/1/19 ............................ 680,000 716,271
Madison Community Development Authority,
Monona Terrace Community Project
5.80% 3/1/05 ..................................... 125,000 135,895
Madison Community Development Authority,
Monona Terrace Community Project
5.90% 3/1/06 ..................................... 365,000 397,788
Madison Community Development Authority,
Monona Terrace Community Project
6.10% 3/1/10 ..................................... 1,500,000 1,638,270
Redgranite Wisconsin Community Development
Authority Revenue 5.85% 3/1/18 ................... 605,000 604,298
----------
5,630,352
----------
*PRE-REFUNDED/ESCROWED TO MATURITY
Bonds - 8.01%
Southeast Wisconsin Professional Baseball Park
District Sales Tax Revenue (MBIA)
5.80% 12/15/26-07 ................................ 1,000,000 1,063,180
Virgin Islands Public Finance Authority (Escrowed
to maturity) 7.30% 10/1/18 ....................... 700,000 896,112
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
MUNICIPAL BONDS (CONTINUED)
PRE-REFUNDED/ESCROWED TO MATURITY
BONDS (CONTINUED)
Wisconsin Housing Finance Authority (FHA)
6.10% 6/1/21-17 .................................. $1,000,000 $ 1,114,910
-----------
3,074,202
-----------
POWER AUTHORITY REVENUE BONDS - 5.33%
Puerto Rico Electric Power Authority Series EE
4.75% 7/1/24 ..................................... 500,000 478,455
Puerto Rico Electric Power Authority Revenue
Series U 6.00% 7/1/14 ............................ 1,450,000 1,569,451
-----------
2,047,906
-----------
Special Utility Revenue Bonds - 0.78%
Puerto Rico Telephone Authority Revenue
5.75% 1/1/11 ..................................... 285,000 300,957
-----------
300,957
-----------
OTHER REVENUE BONDS - 14.77%
Puerto Rico Municipal Finance Authority (FSA)
6.00% 7/1/14 ..................................... 1,800,000 1,970,370
Southeast Wisconsin Professional Baseball Park
District Lease Certificates Zero Coupon (MBIA)
0.00% 12/15/15 ................................... 1,000,000 428,060
Southeast Wisconsin Professional Baseball Park
District Sales Revenue Zero Coupon (MBIA)
0.00% 12/15/16 ................................... 1,115,000 452,813
Southeast Wisconsin Professional Baseball Park
District Sales Tax Revenue Zero Coupon (MBIA)
0.00% 12/15/24 ................................... 1,500,000 393,150
Southeast Wisconsin Professional Baseball Park
District Sales Tax Revenue Zero Coupon (MBIA)
0.00% 12/15/25 ................................... 1,250,000 311,350
Southeast Wisconsin Professional Baseball Park
District Sales Tax Revenue Zero Coupon (MBIA)
0.00% 12/15/28 ................................... 6,250,000 1,336,125
Virgin Islands Public Finance Authority Revenue
Sub Lien Funded Loan Notes Series E
5.875% 10/1/18 ................................... 750,000 777,225
-----------
5,669,093
-----------
Total Municipal Bonds (cost $35,628,715) ............ 37,973,789
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.91%
(COST $35,628,715) ........................................... $37,973,789
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 1.09% ......... 419,098
------------
NET ASSETS APPLICABLE TO 3,808,605 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ...................... $38,392,887
============
NET ASSET VALUE - TAX-FREE WISCONSIN FUND A CLASS
($34,488,853 / 3,421,443 SHARES) ................................... $10.08
======
NET ASSET VALUE - TAX-FREE WISCONSIN FUND B CLASS
($2,621,506 / 260,288 SHARES) ...................................... $10.07
======
NET ASSET VALUE - TAX-FREE WISCONSIN FUND C CLASS
($1,282,528 / 126,874 SHARES) ...................................... $10.11
======
<PAGE>
32 for tax-exempt income
TAX-FREE WISCONSIN FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS AT AUGUST 31, 1998:
Common stock, $0.01 par value, 100,000,000,000 shares
authorized to the Fund with 10,000,000,000 shares
allocated to Tax-Free Wisconsin Fund A Class,
10,000,000,000 shares allocated to Tax-Free
Wisconsin Fund B Class, and 10,000,000,000 shares
allocated to Tax-Free Wisconsin Fund C Class .................. $36,541,874
Accumulated net realized loss on investments ..................... (494,061)
Net unrealized appreciation of investments ....................... 2,345,074
-----------
Total net assets ................................................. $38,392,887
===========
- ----------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
- ----------------------
Summary of Abbreviations:
FHA - Insured by the Federal Housing Authority
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE WISCONSIN FUND A CLASS
Net asset value A Class (A) ........................................... $10.08
Sales charge (3.75% of offering price or
3.87% of amount invested
per share) (B) ..................................................... 0.39
------
Offering price $10.47
======
- ----------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $100,000
or more.
See accompanying notes
<PAGE>
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IDAHO FUND TAX-FREE IOWA FUND
-------------------------- ------------------------
EIGHT MONTHS YEAR ENDED EIGHT MONTHS YEAR ENDED
ENDED 8/31/98 12/31/97 ENDED 8/31/98 12/31/97
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest .................................................. $1,706,559 $2,212,600 $1,533,487 $2,301,953
---------- ---------- ---------- ----------
EXPENSES:
Management fees ........................................... 152,524 188,904 143,522 207,954
Distribution expense ...................................... 118,490 137,525 93,393 93,563
Dividend disbursing and transfer agent
fees and expenses ...................................... 27,978 38,638 26,872 58,042
Registration fees ......................................... 5,950 7,714 2,848 8,536
Reports and statements to shareholders .................... 6,289 13,771 13,504 23,714
Accounting and administration ............................. 11,960 14,686 10,624 15,658
Professional fees ......................................... 9,574 13,461 11,640 12,191
Custodian fees ............................................ 2,931 8,180 1,221 8,655
Taxes (other than taxes on income) ........................ 2,500 2,914 4,800 --
Directors' fees ........................................... 787 1,423 880 1,333
Other ..................................................... 9,352 1,902 16,266 --
---------- ---------- ---------- ----------
348,335 429,118 325,570 429,646
Less expenses absorbed or waived .......................... (20,369) (56,965) (27,979) (23,043)
---------- ---------- ---------- ----------
Total operating expenses .................................. 327,966 372,153 297,591 406,603
Interest expense .......................................... 4,488 -- -- --
---------- ---------- ---------- ----------
Total expenses 332,454 372,153 297,591 406,603
---------- ---------- ---------- ----------
NET INVESTMENT INCOME ..................................... 1,374,105 1,840,447 1,235,896 1,895,350
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investment
transactions ......................................... (48,367) 52,973 88,606 (58,844)
Net change in unrealized appreciation
of investments ....................................... 530,971 1,890,831 339,009 1,936,561
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS: ........................................ 482,604 1,943,804 427,615 1,877,717
---------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................................ $1,856,709 $3,784,251 $1,663,511 $3,773,067
========== ========== ========== ==========
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 33
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE MISSOURI
TAX-FREE KANSAS FUND INSURED FUND
------------------------ ------------------------
EIGHT MONTHS YEAR ENDED EIGHT MONTHS YEAR ENDED
ENDED 8/31/98 12/31/97 ENDED 8/31/98 12/31/97
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest .................................................. $576,661 $761,738 $2,184,600 $3,411,170
-------- -------- ---------- ----------
EXPENSES:
Management fees ........................................... 51,288 66,097 196,563 298,156
Distribution expense ...................................... 44,667 49,017 155,872 171,681
Dividend disbursing and transfer agent
fees and expenses ...................................... 11,022 16,068 35,285 66,505
Registration fees ......................................... 171 1,943 420 4,061
Reports and statements to shareholders .................... 2,085 5,249 17,010 19,723
Accounting and administration ............................. 4,011 5,065 15,850 20,879
Professional fees ......................................... 931 13,671 11,050 16,912
Custodian fees ............................................ 1,000 1,839 5,037 37,647
Taxes (other than taxes on income) ........................ -- -- 14,600 --
Directors' fees ........................................... 430 723 1,000 1,702
Other ..................................................... 4,517 -- 2,393 --
-------- -------- ---------- ----------
120,122 159,672 455,080 637,266
Less expenses absorbed or waived .......................... (10,135) (25,092) (39,747) (14,788)
-------- -------- ---------- ----------
Total operating expenses .................................. 109,987 134,580 415,333 622,478
Interest expense .......................................... -- -- 3,657 --
-------- -------- ---------- ----------
Total expenses 109,987 134,580 418,990 622,478
-------- -------- ---------- ----------
NET INVESTMENT INCOME ..................................... 466,674 627,158 1,765,610 2,788,692
-------- -------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investment
transactions ......................................... 119,598 127,741 155,408 176,623
Net change in unrealized appreciation
of investments ....................................... 42,397 513,267 179,094 2,344,920
-------- -------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS: ........................................ 161,995 641,008 334,502 2,521,543
-------- -------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................................ $628,669 $1,268,166 $2,100,112 $5,310,235
======== ========== ========== ==========
</TABLE>
<PAGE>
34 for tax-exempt income
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC. VOYAGEUR INVESTMENT TRUST
TAX-FREE NORTH DAKOTA FUND TAX-FREE OREGON INSURED FUND
---------------------------- ----------------------------
EIGHT MONTHS YEAR ENDED EIGHT MONTHS YEAR ENDED
ENDED 8/31/98 12/31/97 ENDED 8/31/98 12/31/97
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ........................................ $1,231,724 $1,929,936 $1,072,784 $1,503,451
---------- ---------- ---------- ----------
EXPENSES:
Management fees ................................. 105,393 161,371 100,177 135,068
Distribution expense ............................ 64,372 46,069 86,285 91,688
Dividend disbursing and transfer agent fees
and expenses ................................. 25,879 46,799 19,634 31,843
Registration fees ............................... 3,176 4,211 4,150 1,146
Reports and statements to shareholders .......... 12,987 18,649 5,801 11,186
Accounting and administration ................... 7,938 13,648 7,875 10,428
Professional fees ............................... 7,658 17,173 1,570 9,662
Custodian fees .................................. 3,818 11,145 3,446 2,087
Taxes (other than taxes on income) 3,200 3,190 1,074 --
Directors' fees ................................. 1,955 2,573 591 916
Other ........................................... 11,661 16,370 10,588 --
---------- ---------- ---------- ----------
248,037 341,198 241,191 294,024
Less expenses absorbed or waived ................ (31,720) (13,055) (64,153) (61,673)
---------- ---------- ---------- ----------
Total operating expenses ........................ 216,317 328,143 177,038 232,351
---------- ---------- ---------- ----------
Total expenses .................................. 216,317 328,143 177,038 232,351
---------- ---------- ---------- ----------
NNET INVESTMENT INCOME .......................... 1,015,407 1,601,793 895,746 1,271,100
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investment
transactions ............................... 151,151 416,818 (11,500) 17,126
Net change in unrealized appreciation of
investments ................................ 154,096 880,044 368,882 1,188,556
---------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:............................... 305,247 1,296,862 357,382 1,205,682
---------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .............................. $1,320,654 $2,898,655 $1,253,128 $2,476,782
========== ========== ========== ==========
</TABLE>
See accompanying notes
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE WASHINGTON VOYAGEUR MUTUAL FUNDS, INC.
INSURED FUND TAX-FREE WISCONSIN FUND
-------------------------- ----------------------------
EIGHT MONTHS YEAR ENDED EIGHT MONTHS YEAR ENDED
ENDED 8/31/98 12/31/97 ENDED 8/31/98 12/31/97
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ........................................ $131,262 $177,083 $1,360,851 $1,715,466
-------- -------- ---------- ----------
EXPENSES:
Management fees ................................. 12,090 15,461 123,329 148,926
Distribution expense ............................ 11,199 11,022 78,270 77,376
Dividend disbursing and transfer agent fees
and expenses ................................. 5,232 7,581 20,108 34,328
Registration fees ............................... 1,100 1,478 3,008 9,639
Reports and statements to shareholders .......... 4,824 7,236 8,861 22,197
Accounting and administration ................... 840 1,311 9,771 11,345
Professional fees ............................... 832 1,437 9,299 14,090
Custodian fees .................................. 990 2,178 2,669 17,034
Taxes (other than taxes on income) 330 -- 1,975 --
Directors' fees ................................. 313 522 678 1,086
Other ........................................... 992 -- 13,428 --
-------- -------- ---------- ----------
38,742 48,226 271,396 336,021
Less expenses absorbed or waived ................ (20,276) (27,554) (9,633) (23,481)
-------- -------- ---------- ----------
Total operating expenses ........................ 18,466 20,672 261,763 312,540
-------- -------- ---------- ----------
Total expenses .................................. 18,466 20,672 261,763 312,540
-------- -------- ---------- ----------
NNET INVESTMENT INCOME .......................... 112,796 156,411 1,099,088 1,402,926
-------- -------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investment
transactions ............................... -- 38 (55,924) 190,944
Net change in unrealized appreciation of
investments ................................ 45,476 141,117 352,874 1,023,956
-------- -------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:............................... 45,476 141,155 296,950 1,214,900
-------- -------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .............................. $158,272 $297,566 $1,396,038 $2,617,826
======== ======== ========== ==========
</TABLE>
<PAGE>
for tax-exempt income 35
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC. VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IDAHO FUND TAX-FREE IOWA FUND
------------------------------------- --------------------------------------
EIGHT MONTHS YEAR ENDED YEAR ENDED EIGHT MONTHS YEAR ENDED YEAR ENDED
ENDED 8/31/98 12/31/97 12/31/96 ENDED 8/31/98 12/31/97 12/31/96
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income ............................... $1,374,105 $1,840,447 $1,366,067 $1,235,896 $1,895,350 $2,019,520
Net realized gain (loss) on investment transactions (48,367) 52,973 (40,482) 88,606 (58,844) (201,680)
Net change in unrealized appreciation/depreciation
of investments ................................... 530,971 1,890,831 66,395 339,009 1,936,561 (803,926)
---------- ---------- ---------- ---------- ---------- ----------
Net increase in net assets resulting from operations 1,856,709 3,784,251 1,391,980 1,663,511 3,773,067 1,013,914
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income:
A Class .......................................... (1,150,721) (1,561,674) (1,118,768) (1,131,168) (1,786,140) (1,953,806)
B Class .......................................... (189,350) (273,521) (176,734) (80,006) (84,786) (48,161)
C Class .......................................... (37,421) (40,080) (37,976) (24,722) (27,910) (22,832)
Net realized gain on investment transactions:
A Class .......................................... (17,132) -- -- -- -- --
B Class .......................................... (3,270) -- -- -- -- --
C Class .......................................... (743) -- -- -- -- --
---------- ---------- ---------- ---------- ---------- ----------
(1,398,637) (1,875,275) (1,333,478) (1,235,896) (1,898,836) (2,024,799)
---------- ---------- ---------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class .......................................... 8,852,050 8,087,405 14,993,646 2,443,972 3,470,467 5,783,953
B Class .......................................... 1,019,252 2,019,434 3,034,644 1,090,688 1,320,305 791,024
C Class .......................................... 707,681 702,551 369,077 492,175 247,082 262,735
Net asset value of shares issued upon reinvestment
of dividends from net investment income and net
realized gain on investment transactions:
A Class .......................................... 770,231 967,219 593,826 710,428 1,211,605 1,284,358
B Class .......................................... 120,095 155,808 63,171 57,358 64,063 37,397
C Class .......................................... 30,628 34,029 42,079 14,242 10,869 4,155
---------- ---------- ---------- ---------- ---------- ----------
11,499,937 11,966,446 19,096,443 4,808,863 6,324,391 8,163,622
---------- ---------- ---------- ---------- ---------- ----------
Cost of shares repurchased:
A Class .......................................... (3,937,453) (4,493,235) (1,473,902) (2,530,245) (8,103,037) (8,405,045)
B Class .......................................... (564,955) (611,419) (162,225) (184,748) (232,768) --
C Class .......................................... (160,744) (480,962) (374,650) (166,201) (90,968) (49,832)
---------- ---------- ---------- ---------- ---------- ----------
(4,663,152) (5,585,616) (2,010,777) (2,881,194) (8,426,773) (8,454,877)
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in net assets derived from
capital share transactions ....................... 6,836,785 6,380,830 17,085,666 1,927,669 (2,102,382) (291,255)
---------- ---------- ---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS ............... 7,294,857 8,289,806 17,144,168 2,355,284 (228,151) (1,302,140)
NET ASSETS:
Beginning of period ................................. 41,741,018 33,451,212 16,307,044 42,124,438 42,352,589 43,654,729
----------- ----------- ----------- ----------- ----------- -----------
End of period ....................................... $49,035,875 $41,741,018 $33,451,212 $44,479,722 $42,124,438 $42,352,589
========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
36 for tax-exempt income
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST VOYAGEUR INVESTMENT TRUST
TAX-FREE KANSAS FUND TAX-FREE MISSOURI INSURED FUND
-------------------------------------- -------------------------------------
EIGHT MONTHS YEAR ENDED YEAR ENDED EIGHT MONTHS YEAR ENDED YEAR ENDED
ENDED 8/31/98 12/31/97 12/31/96 ENDED 8/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ............................... $ 466,674 $627,158 $ 584,317 $1,765,610 $2,788,692 $2,877,421
Net realized gain (loss) on investment transactions . 119,598 127,741 (75,990) 155,408 176,623 (523,769)
Net change in unrealized appreciation/depreciation
of investments ................................... 42,397 513,267 (87,456) 179,094 2,344,920 (403,336)
----------- --------- ----------- ---------- ---------- ----------
Net increase in net assets resulting from operations 628,669 1,268,166 420,871 2,100,112 5,310,235 1,950,316
----------- --------- ----------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class .......................................... (364,485) (506,768) (513,198) (1,467,138) (2,362,959) (2,454,463)
B Class .......................................... (99,218) (123,076) (68,183) (294,147) (458,482) (376,995)
C Class .......................................... (2,853) (4,201) (2,305) (4,325) (7,784) (5,509)
----------- --------- ----------- ---------- ---------- ----------
(466,556) (634,045) (583,686) (1,765,610) (2,829,225) (2,836,967)
----------- --------- ----------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class .......................................... 2,693,842 1,225,439 1,557,809 1,374,617 2,768,917 5,650,060
B Class .......................................... 420,715 948,070 1,735,044 399,452 2,097,849 4,705,880
C Class .......................................... 40,545 74,506 78,467 30,000 100,000 156,103
Net asset value of shares issued upon reinvestment
of dividends from net investment income and net
realized gain on investment transactions:
A Class .......................................... 187,468 297,771 276,442 758,855 1,353,277 1,297,141
B Class .......................................... 66,415 83,728 33,834 183,416 349,671 250,807
C Class .......................................... 2,795 4,294 2,036 2,854 5,484 3,283
----------- --------- ----------- ---------- ---------- ----------
3,411,780 2,633,808 3,683,632 2,749,194 6,675,198 12,063,274
----------- --------- ----------- ---------- ---------- ----------
Cost of shares repurchased:
A Class .......................................... (1,121,317) (1,511,541) (2,165,871) (4,032,289) (6,861,721) (7,034,424)
B Class .......................................... (280,393) (135,792) (50,509) (834,476) (1,840,881) (655,723)
C Class .......................................... (26,367) (66,004) (30,130) (146,282) (42,129) (27,281)
----------- --------- ----------- ---------- ---------- ----------
(1,428,077) (1,713,337) (2,246,510) (5,013,047) (8,744,731) (7,717,428)
----------- --------- ----------- ---------- ---------- ----------
Increase (decrease) in net assets derived from
capital share transactions ....................... 1,983,703 920,471 1,437,122 (2,263,853) (2,069,533) 4,345,846
----------- --------- ----------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS ............... 2,145,816 1,554,592 1,274,307 (1,929,351) 411,477 3,459,195
NET ASSETS:
Beginning of period ................................. 14,222,842 12,668,250 11,393,943 60,296,949 59,885,472 56,426,277
----------- --------- ----------- ---------- ---------- ----------
End of period .......................................$16,368,658 $14,222,842 $12,668,250 $58,367,598 $60,296,949 $59,885,472
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 37
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC. VOYAGEUR INVESTMENT TRUST
TAX-FREE NORTH DAKOTA FUND TAX-FREE OREGON INSURED FUND
------------------------------------- ------------------------------------
EIGHT MONTHS YEAR ENDED YEAR ENDED EIGHT MONTHS YEAR ENDED YEAR ENDED
ENDED 8/31/98 12/31/97 12/31/96 ENDED 8/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income .................................. $1,015,407 $1,601,793 $1,753,300 $ 895,746 $1,271,100 $1,206,292
Net realized gain (loss) on investment transactions 151,151 416,818 (385,738) (11,500) 17,126 (196,640)
Net change in unrealized appreciation/depreciation
of investments ....................................... 154,096 880,044 (90,482) 368,882 1,188,556 (232,512)
---------- ---------- ---------- --------- ---------- ----------
Net increase in net assets resulting from operations ... 1,320,654 2,898,655 1,277,080 1,253,128 2,476,782 777,140
---------- ---------- ---------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ............................................. (989,212) (1,597,868) (1,698,579) (714,960) (1,033,966) (1,030,533)
B Class ............................................. (25,072) (37,856) (24,585) (162,152) (224,133) (161,757)
C Class ............................................. (1,123) (1,691) (722) (18,634) (17,078) (9,989)
---------- ---------- ---------- ---------- ---------- ----------
(1,015,407) (1,637,415) (1,723,886) (895,746) (1,275,177) (1,202,279)
---------- ---------- ---------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ............................................. 965,629 751,084 1,894,680 4,019,856 3,728,179 4,388,724
B Class ............................................. 80,892 192,597 360,271 561,598 1,626,102 2,486,473
C Class ............................................. -- -- 28,000 507,769 164,876 278,889
Net asset value of shares issued upon reinvestment of
dividends from net investment income and net realized
gain on investment transactions:
A Class ............................................. 599,011 1,047,157 1,092,516 433,739 616,492 591,621
B Class ............................................. 13,030 22,504 18,141 101,024 152,794 87,855
C Class ............................................. 1,125 1,714 731 13,324 11,587 6,822
---------- ---------- ---------- ---------- ---------- ----------
1,659,687 2,015,056 3,394,339 5,637,310 6,300,030 7,840,384
---------- ---------- ---------- ---------- ---------- ----------
Cost of shares repurchased:
A Class ............................................. (2,329,708) (5,770,655) (4,927,263) (2,465,216) (4,116,579) (5,261,339)
B Class ............................................. (11,781) (61,932) (49,185) (1,179,572) (326,601) (575,002)
C Class ............................................. (12,711) (3,000) (8,304) (68,006) (25,157) (173,467)
---------- ---------- ---------- ---------- ---------- ----------
(2,354,200) (5,835,587) (4,984,752) (3,712,794) (4,468,337) (6,009,808)
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in net assets derived from capital
share transactions .................................... (694,513) (3,820,531) (1,590,413) 1,924,516 1,831,693 1,830,576
---------- ---------- ---------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS .................. (389,266) (2,559,291) (2,037,219) 2,281,898 3,033,298 1,405,437
NET ASSETS:
Beginning of period .................................... 31,894,833 34,454,124 36,491,343 29,064,437 26,031,139 24,625,702
----------- ----------- ----------- ----------- ----------- -----------
End of period .......................................... $31,505,567 $31,894,833 $34,454,124 $31,346,335 $29,064,437 $26,031,139
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
38 for tax-exempt income
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGUER INVESTMENT TRUST VOYAGUER MUTUAL FUNDS, INC.
TAX-FREE WASHINGTON INSURED FUND TAX-FREE WISCONSIN FUND
------------------------------------- --------------------------------------
EIGHT MONTHS YEAR ENDED YEAR ENDED EIGHT MONTHS YEAR ENDED YEAR ENDED
ENDED 8/31/98 12/31/97 12/31/96 ENDED 8/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ................................ $112,796 $156,411 $131,570 $1,099,088 $1,402,926 $1,376,191
Net realized gain (loss) on investment transactions -- 38 (2,791) (55,924) 190,944 88,723
Net change in unrealized appreciation/depreciation
of investments .................................... 45,476 141,117 (13,997) 352,874 1,023,956 (417,975)
---------- ---------- ---------- ----------- ----------- -----------
Net increase in net assets resulting from operations . 158,272 297,566 114,782 1,396,038 2,617,826 1,046,939
---------- ---------- ---------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ........................................... (76,929) (125,449) (117,335) (1,011,692) (1,354,012) (1,309,246)
B Class ........................................... (31,959) (30,887) (11,708) (58,302) (65,438) (40,094)
C Class ........................................... (3,908) (1,855) (812) (29,094) (26,356) (13,973)
---------- ---------- ---------- ----------- ----------- -----------
(112,796) (158,191) (129,855) (1,099,088) (1,445,806) (1,363,313)
---------- ---------- ---------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................... 109,476 404,281 512,363 5,662,446 7,121,843 4,977,290
B Class ........................................... 336,594 522,233 512,470 955,955 505,833 596,712
C Class ........................................... 230,500 46,196 947 657,033 347,276 557,261
Net asset value of shares issued upon reinvestment of
dividends from net investment income and net realized
gain on investment transactions:
A Class ........................................... 35,377 63,054 54,645 515,403 758,408 758,119
B Class ........................................... 18,593 19,999 5,371 33,882 42,097 25,436
C Class ........................................... 2,988 913 -- 25,500 24,405 11,846
---------- ---------- ---------- ----------- ----------- -----------
733,528 1,056,676 1,085,796 7,850,219 8,799,862 6,926,664
---------- ---------- ---------- ----------- ----------- -----------
Cost of shares repurchased:
A Class ........................................... (219,070) (577,974) (260,676) (2,836,280) (6,376,585) (3,573,034)
B Class ........................................... (29,422) (131,521) (26,026) (318,684) (20,571) (4,141)
C Class ........................................... (21,200) -- -- (98,592) (262,082) (92,971)
---------- ---------- ---------- ----------- ----------- -----------
(269,692) (709,495) (286,702) (3,253,556) (6,659,238) (3,670,146)
---------- ---------- ---------- ----------- ----------- -----------
Increase in net assets derived from capital share
transactions ....................................... 463,836 347,181 799,094 4,596,663 2,140,624 3,256,518
---------- ---------- ---------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS ........................... 509,312 486,556 784,021 4,893,613 3,312,644 2,940,144
NET ASSETS:
Beginning of period .................................. 3,403,972 2,917,416 2,133,395 33,499,274 30,186,630 27,246,486
---------- ---------- ---------- ----------- ----------- -----------
End of period ........................................ $3,913,284 $3,403,972 $2,917,416 $38,392,887 $33,499,274 $30,186,630
========== ========== ========== =========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 39
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IDAHO FUND -- CLASS A
---------------------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 1/4/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................................... $11.450 $10.910 $11.020 $10.000
Income from investment operations:
Net investment income ................................................ 0.356 0.551 0.580 0.600
Net realized and unrealized gain (loss) on investments ............... 0.115 0.552 (0.120) 1.100
------- ------- ------- -------
Total from investment operations ........................................ 0.471 1.103 0.460 1.700
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................................. (0.356) (0.563) (0.570) (0.600)
Distributions from net realized gain on investment transactions ...... (0.005) -- -- (0.080)
------- ------- ------- -------
Total dividends and distributions .................................... (0.361) (0.563) (0.570) (0.680)
------- ------- ------- -------
Net asset value, end of period .......................................... $11.560 $11.450 $10.910 $11.020
======= ======= ======= =======
Total return(4) ......................................................... 4.19% 10.41% 4.36% 17.48%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .............................. $39,843 $33,788 $27,684 $13,540
Ratio of expenses to average net assets .............................. 0.95% 0.87% 0.60% 0.26%(5)
Ratio of expenses to average net assets prior to expense limitation .. 1.02% 1.02% 1.10% 1.25%(5)
Ratio of net investment income to average net assets ................. 4.65% 4.98% 5.29% 5.24%(5)
Ratio of net investment income to average net assets prior to expense
limitation ........................................................ 4.58% 4.83% 4.79% 4.25%(5)
Portfolio turnover ................................................... 8% 19% 35% 42%
</TABLE>
______________________
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
40 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IDAHO FUND -- CLASS B
------------------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 3/16/95(3)
8/31/98(1) 12/31/97(2) 12/31/96 TO 12/31/9(5)
<S> <C> <C> <C> <C>
Net asset value, beginning of period ...................................... $11.440 $10.890 $11.010 $10.500
Income from investment operations:
Net investment income .................................................. 0.298 0.487 0.520 0.420
Net realized and unrealized gain (loss) on investments ................. 0.117 0.560 (0.130) 0.590
------- ------- ------ -------
Total from investment operations .......................................... 0.415 1.047 0.390 1.010
------- ------- ------ -------
Less dividends and distributions:
Dividends from net investment income ................................... (0.300) (0.497) (0.510) (0.420)
Distributions from net realized gain on investment transactions ........ (0.005) -- -- (0.080)
------- ------- ------- -------
Total dividends and distributions ......................................... (0.305) (0.497) (0.510) (0.500)
------- ------- ------- -------
Net asset value, end of period ............................................ $11.550 $11.440 $10.890 $11.010
======= ======= ======= =======
Total return(4)............................................................ 3.68% 9.87% 3.75% 9.86%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................................ $7,474 $6,827 $4,945 $1,977
Ratio of expenses to average net assets ................................ 1.70% 1.46% 1.11% 0.79%(5)
Ratio of expenses to average net assets prior to
expense limitation ................................................. 1.77% 1.61% 1.85% 1.90%(5)
Ratio of net investment income to average net assets ................... 3.90% 4.39% 4.78% 4.68%(5)
Ratio of net investment income to average net assets prior to
expense limitation ................................................. 3.83% 4.24% 4.04% 3.57%(5)
Portfolio turnover ..................................................... 8% 19% 35% 42%
</TABLE>
- ---------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
[TABLE RESTUBBED FOR ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IDAHO FUND -- CLASS C
-----------------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 1/11/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period ...................................... $11.430 $10.900 $11.020 $10.040
Income from investment operations:
Net investment income .................................................. 0.302 0.459 0.500 0.500
Net realized and unrealized gain (loss) on investments ................. 0.123 0.549 (0.130) 1.060
------- ------- ------- -------
Total from investment operations .......................................... 0.425 1.008 0.370 1.560
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................................... (0.300) (0.478) (0.490) (0.500)
Distributions from net realized gain on investment transactions ........ (0.005) -- -- (0.080)
------- ------- ------- -------
Total dividends and distributions ......................................... (0.305) (0.478) (0.490) (0.580)
------- ------- ------- -------
Net asset value, end of period ............................................ $11.550 $11.430 $10.900 $11.020
======= ======= ======= =======
Total return(4)............................................................ 3.77% 9.49% 3.48% 15.81%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................................ $ 1,719 $ 1,125 $ 822 $ 789
Ratio of expenses to average net assets ................................ 1.70% 1.62% 1.33% 1.05%(5)
Ratio of expenses to average net assets prior to
expense limitation ................................................. 1.77% 1.77% 1.82% 2.00%(5)
Ratio of net investment income to average net assets ................... 3.90% 4.23% 4.57% 4.48%(5)
Ratio of net investment income to average net assets prior to
expense limitation ................................................. 3.83% 4.08% 4.08% 3.53%(5)
Portfolio turnover ..................................................... 8% 19% 35% 42%
</TABLE>
<PAGE>
for tax-exempt income 41
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IOWA FUND -- CLASS A
------------------------------------------------------
EIGHT MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period $10.060 $9.620 $9.830 $8.560
Income from investment operations:
Net investment income ...................................... 0.294 0.449 0.440 0.450
Net realized and unrealized gain (loss) on investments ..... 0.100 0.440 (0.210) 1.290
------- ------- ------- -------
Total from investment operations ........................... 0.394 0.889 0.230 1.740
------- ------- ------- -------
Less dividends:
Dividends from net investment income ....................... (0.294) (0.449) (0.440) (0.470)
------- ------- ------- -------
Total dividends ............................................ (0.294) (0.449) (0.440) (0.470)
------- ------- ------- -------
Net asset value, end of period ................................ $10.160 $10.060 $9.620 $9.830
======= ======= ======= =======
Total return(3) ............................................... 3.98% 9.49% 2.56% 20.80%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................... $39,345 $38,343 $40,037 $42,374
Ratio of expenses to average net assets .................... 0.96% 0.91% 0.92% 0.72%
Ratio of expenses to average net assets prior to
expense limitation ...................................... 1.06% 0.97% 1.06% 1.06%
Ratio of net investment income to average net assets ....... 4.38% 4.62% 4.68% 4.88%
Ratio of net investment income to average net assets
prior to expense limitation ............................. 4.28% 4.56% 4.54% 4.54%
Portfolio turnover ......................................... 13% 14% 14% 21%
</TABLE>
[RESTUBBED TABLE FROM ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IOWA FUND -- CLASS A
--------------------------------
FOUR MONTHS YEAR
ENDED ENDED
12/31/94 8/31/94
<S> <C> <C>
Net asset value, beginning of period $9.260 $10.000
Income from investment operations:
Net investment income ...................................... 0.170 0.490
Net realized and unrealized gain (loss) on investments ..... (0.720) (0.740)
------- -------
Total from investment operations ........................... (0.550) (0.250)
------- -------
Less dividends:
Dividends from net investment income ....................... (0.150) (0.490)
------- -------
Total dividends ............................................ (0.150) (0.490)
------- -------
Net asset value, end of period ................................ $8.560 $9.260
======= =======
Total return(3) ............................................... (5.86%) (2.67%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................... $32,373 $38,669
Ratio of expenses to average net assets .................... 0.11%(4) 0.12%
Ratio of expenses to average net assets prior to
expense limitation ...................................... 1.25%(4) 1.25%
Ratio of net investment income to average net assets ....... 5.71%(4) 4.89%
Ratio of net investment income to average net assets
prior to expense limitation ............................. 4.57%(4) 3.76%
Portfolio turnover ......................................... 7% 119%
</TABLE>
______________________
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(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) Annualized.
See accompanying notes
<PAGE>
42 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IOWA FUND - CLASS B
-------------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 3/24/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................................ $10.060 $9.610 $9.830 $9.180
Income from investment operations:
Net investment income ............................................ 0.243 0.366 0.380 0.310
Net realized and unrealized gain (loss) on investments ........... 0.100 0.457 (0.220) 0.640
------- ------- ------- -------
Total from investment operations ................................. 0.343 0.823 0.160 0.950
------- ------- ------- -------
Less dividends:
Dividends from net investment income ............................. (0.243) (0.373) (0.380) (0.300)
------- ------- ------- -------
Total dividends .................................................. (0.243) (0.373) (0.380) (0.300)
------- ------- ------- -------
Net asset value, end of period ...................................... $10.160 $10.060 $9.610 $9.830
======= ======= ======= =======
Total return(4) ..................................................... 3.46% 8.75% 1.76% 10.62%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......................... $3,910 $2,910 $1,645 $819
Ratio of expenses to average net assets .......................... 1.71% 1.67% 1.61% 1.28%(5)
Ratio of expenses to average net assets prior to
expense limitation ............................................ 1.81% 1.73% 1.81% 1.65%(5)
Ratio of net investment income to average net assets ............. 3.63% 3.86% 3.97% 4.06%(5)
Ratio of net investment income to average net assets
prior to expense limitation ................................... 3.53% 3.80% 3.77% 3.69%(5)
Portfolio turnover ............................................... 13% 14% 14% 21%
</TABLE>
______________________
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
[TABLE RESTUBBED FOR ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IOWA FUND - CLASS C
---------------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 1/4/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................................ $10.060 $9.610 $9.830 $8.550
Income from investment operations:
Net investment income ............................................ 0.243 0.360 0.360 0.370
Net realized and unrealized gain (loss) on investments ........... 0.100 0.456 (0.220) 1.280
------- ------- ------- -------
Total from investment operations ................................. 0.343 0.816 0.140 1.650
------- ------- ------- -------
Less dividends:
Dividends from net investment income ............................. (0.243) (0.366) (0.360) (0.370)
------- ------- ------- -------
Total dividends .................................................. (0.243) (0.366) (0.360) (0.370)
------- ------- ------- -------
Net asset value, end of period ...................................... $10.160 $10.060 $9.610 $9.830
======= ======= ======= =======
Total return(4) ..................................................... 3.46% 8.68% 1.56% 19.66%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......................... $1,225 $871 $670 $462
Ratio of expenses to average net assets .......................... 1.71% 1.74% 1.75% 1.61%(5)
Ratio of expenses to average net assets prior to
expense limitation ............................................ 1.81% 1.80% 1.81% 1.72%(5)
Ratio of net investment income to average net assets ............. 3.63% 3.79% 3.82% 3.74%(5)
Ratio of net investment income to average net assets
prior to expense limitation ................................... 3.53% 3.73% 3.76% 3.63%(5)
Portfolio turnover ............................................... 13% 14% 14% 21%
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE KANSAS FUND - CLASS A
-------------------------------------------------
EIGHT MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................................ $11.060 $10.560 $10.730 $9.500
Income from investment operations:
Net investment income ............................................ 0.351 0.526 0.520 0.560
Net realized and unrealized gain (loss) on investments ........... 0.100 0.506 (0.170) 1.220
------- ------- ------- -------
Total from investment operations ................................. 0.451 1.032 0.350 1.780
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............................. (0.351) (0.532) (0.520) (0.550)
Distributions from net realized gain on investment
transactions .................................................. -- -- -- --
------- ------- ------- -------
Total dividends and distributions ................................ (0.351) (0.532) (0.520) (0.550)
------- ------- ------- -------
Net asset value, end of period ...................................... $11.160 $11.060 $10.560 $10.730
======= ======= ======= =======
Total return(4) ..................................................... 4.14% 10.06% 3.43% 19.13%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......................... $12,548 $10,663 $10,176 $10,677
Ratio of expenses to average net assets .......................... 0.89% 0.84% 0.83% 0.37%
Ratio of expenses to average net assets prior to
expense limitation ............................................ 0.99% 1.03% 1.21% 1.11%
Ratio of net investment income to average net assets ............. 4.75% 4.92% 4.97% 5.32%
Ratio of net investment income to average net assets prior
to expense limitation ......................................... 4.65% 4.73% 4.59% 4.58%
Portfolio turnover ............................................... 40% 30% 56% 19%
</TABLE>
______________________
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 43
[TABLE RESTUBBED FOR ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE KANSAS FUND - CLASS A
------------------------------------
TWO MONTHS YEAR PERIOD
ENDED ENDED 11/30/92(3) TO
12/31/94 10/31/94 10/31/93
<S> <C> <C> <C>
Net asset value, beginning of period ................................ $9.630 $10.850 $10.000
Income from investment operations:
Net investment income ............................................ 0.090 0.570 0.560
Net realized and unrealized gain (loss) on investments ........... (0.130) (1.210) 0.850
------- ------- -------
Total from investment operations ................................. (0.040) (0.640) 1.410
------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............................. (0.090) (0.570) (0.560)
Distributions from net realized gain on investment
transactions .................................................. -- (0.010) --
------- ------- -------
Total dividends and distributions ................................ (0.090) (0.580) (0.560)
------- ------- -------
Net asset value, end of period ...................................... $9.500 $9.630 $10.850
======= ======= =======
Total return(4) ..................................................... (0.38%) (6.10%) 14.49%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......................... $7,355 $6,469 $2,057
Ratio of expenses to average net assets .......................... 0.01%(5) 0.06% --
Ratio of expenses to average net assets prior to
expense limitation ............................................ 1.25%(5) 1.25% 1.25%(5)
Ratio of net investment income to average net assets ............. 5.88%(5) 5.30% 5.26%(5)
Ratio of net investment income to average net assets prior
to expense limitation ......................................... 4.64%(5) 4.11% 4.01%(5)
Portfolio turnover ............................................... 0% 38% 28%
</TABLE>
<PAGE>
44 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE KANSAS FUND - CLASS B
---------------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 4/8/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................................ $11.080 $10.570 $10.740 $10.190
Income from investment operations:
Net investment income ............................................ 0.296 0.440 0.450 0.340
Net realized and unrealized gain (loss) on investments ........... 0.099 0.516 (0.170) 0.540
------- ------- ------- -------
Total from investment operations .................................... 0.395 0.956 0.280 0.880
------- ------- ------- -------
Less dividends:
Dividends from net investment income ............................. (0.295) (0.446) (0.450) (0.330)
------- ------- ------- -------
Total dividends .................................................. (0.295) (0.446) (0.450) (0.330)
------- ------- ------- -------
Net asset value, end of period ...................................... $11.180 $11.080 $10.570 $10.740
======= ======= ======= =======
Total return(4) ..................................................... 3.62% 9.28% 2.69% 8.76%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......................... $3,694 $3,452 $2,402 $677
Ratio of expenses to average net assets .......................... 1.64% 1.61% 1.61% 0.94%(5)
Ratio of expenses to average net assets prior to
expense limitation ............................................ 1.74% 1.80% 2.00% 1.68%(5)
Ratio of net investment income to average net assets ............. 4.00% 4.15% 4.16% 4.63%(5)
Ratio of net investment income to average net assets
prior to expense limitation ................................... 3.90% 3.96% 3.77% 3.89%(5)
Portfolio turnover ............................................... 40% 30% 56% 19%
</TABLE>
______________________
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
[TABLE RESTUBBED FROM ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE KANSAS FUND -- CLASS C
-------------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 4/12/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................................ $11.050 $10.550 $10.720 $10.200
Income from investment operations:
Net investment income ............................................ 0.296 0.439 0.430 0.320
Net realized and unrealized gain (loss) on investments ........... 0.110 0.504 (0.170) 0.510
------- ------- ------- -------
Total from investment operations .................................... 0.406 0.943 0.260 0.830
------- ------- ------- -------
Less dividends:
Dividends from net investment income ............................. (0.296) (0.443) (0.430) (0.310)
------- ------- ------- -------
Total dividends .................................................. (0.296) (0.443) (0.430) (0.310)
------- ------- ------- -------
Net asset value, end of period ...................................... $11.160 $11.050 $10.550 $10.720
======= ======= ======= =======
Total return(4) ..................................................... 3.72% 9.17% 2.52% 8.29%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......................... $127 $108 $90 $40
Ratio of expenses to average net assets .......................... 1.64% 1.64% 1.77% 1.27%(5)
Ratio of expenses to average net assets prior to
expense limitation ............................................ 1.74% 1.83% 2.00% 1.79%(5)
Ratio of net investment income to average net assets ............. 4.00% 4.12% 4.02% 4.21%(5)
Ratio of net investment income to average net assets
prior to expense limitation ................................... 3.90% 3.93% 3.79% 3.69%(5)
Portfolio turnover ............................................... 40% 30% 56% 19%
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGUER INVESTMENT TRUST
TAX-FREE MISSOURI INSURED FUND -- CLASS A
-----------------------------------------------
EIGHT MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............................... $10.810 $10.370 $10.540 $9.270
Income from investment operations:
Net investment income ........................................... 0.333 0.504 0.520 0.520
Net realized and unrealized gain (loss) on investments .......... 0.060 0.446 (0.180) 1.290
------- ------- ------- -------
Total from investment operations ................................ 0.393 0.950 0.340 1.810
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............................ (0.333) (0.510) (0.510) (0.540)
Distributions from net realized gain on investment
transactions ................................................. -- -- -- --
------- ------- ------- -------
Total dividends and distributions ............................... (0.333) (0.510) (0.510) (0.540)
------- ------- ------- -------
Net asset value, end of period ..................................... $10.870 $10.810 $10.370 $10.540
======= ======= ======= =======
Total return(4) ...................................................... 3.70% 9.43% 3.41% 19.96%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................ $46,939 $48,565 $49,301 $50,211
Ratio of expenses to average net assets ......................... 0.92% 0.91% 0.71% 0.50%
Ratio of expenses to average net assets prior to
expense limitation ........................................... 1.02% 0.93% 1.03% 1.07%
Ratio of net investment income to average net assets ............ 4.64% 4.81% 5.05% 5.25%
Ratio of net investment income to average net assets prior to
expense limitation ........................................... 4.54% 4.79% 4.73% 4.68%
Portfolio turnover .............................................. 18% 12% 28% 31%
</TABLE>
______________________
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 45
[TABLE RESTUBBED FROM ABOVE]
<TABLE>
<CAPTION>
VOYAGUER INVESTMENT TRUST
TAX-FREE MISSOURI INSURED FUND -- CLASS A
----------------------------------------
TWO MONTHS YEAR PERIOD
ENDED ENDED 11/2/92(3) TO
12/31/94 10/31/94 10/31/93
<S> <C> <C> <C>
Net asset value, beginning of period ............................... $9.370 $10.820 $10.000
Income from investment operations:
Net investment income ........................................... 0.100 0.550 0.550
Net realized and unrealized gain (loss) on investments .......... (0.110) (1.430) 0.890
------- ------- -------
Total from investment operations ................................ (0.010) (0.880) 1.440
------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............................ (0.090) (0.540) (0.550)
Distributions from net realized gain on investment
transactions ................................................. -- (0.030) (0.070)
------- ------- -------
Total dividends and distributions ............................... (0.090) (0.570) (0.620)
------- ------- -------
Net asset value, end of period ..................................... $9.270 $9.370 $10.820
======= ======= =======
Total return(4)..................................................... (0.07%) (8.28%) 14.74%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................ $37,790 $37,384 $30,270
Ratio of expenses to average net assets ......................... 0.11%(5) 0.15% --
Ratio of expenses to average net assets prior to
expense limitation ........................................... 1.12%(5) 1.13% 1.25%(5)
Ratio of net investment income to average net assets ............ 6.00%(5) 5.39% 4.82%(5)
Ratio of net investment income to average net assets prior to
expense limitation ........................................... 4.99%(5) 4.41% 3.57%(5)
Portfolio turnover .............................................. 8% 32% 76%
</TABLE>
<PAGE>
46 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE MISSOURI INSURED FUND - CLASS B
------------------------------------------------------------------------------
EIGHT MONTHS YEAR YEAR YEAR TWO MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED 3/12/94(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 12/31/94 10/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............. $10.810 $10.370 $10.540 $9.270 $9.370 $10.300
Income from investment operations:
Net investment income .......................... 0.279 0.425 0.460 0.480 0.080 0.330
Net realized and unrealized
gain (loss) on investments .................. 0.060 0.451 (0.180) 1.280 (0.100) (0.940)
------- ------- ------- ------- ------ -------
Total from investment operations ............... 0.339 0.876 0.280 1.760 (0.020) (0.610)
------- ------- ------- ------- ------ -------
Less dividends:
Dividends from net investment income ........... (0.279) (0.436) (0.450) (0.490) (0.080) (0.320)
------- ------- ------- ------- ------ -------
Total dividends ................................ (0.279) (0.436) (0.450) (0.490) (0.080) (0.320)
------- ------- ------- ------- ------ -------
Net asset value, end of period .................... $10.870 $10.810 $10.370 $10.540 $9.270 $9.370
======= ======= ======= ======= ====== =======
Total return(4) ................................... 3.19% 8.66% 2.93% 19.18% (0.14%) (6.16%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........ $11,317 $11,507 $10,432 $6,195 $2,742 $1,701
Ratio of expenses to average net assets ........ 1.67% 1.61% 1.29% 0.97% 0.60%(5) 0.49%(5)
Ratio of expenses to average
net assets prior to expense limitation ...... 1.77% 1.63% 1.78% 1.81% 1.84%(5) 1.83%(5)
Ratio of net investment income
to average net assets ....................... 3.89% 4.11% 4.46% 4.70% 5.32%(5) 4.89%(5)
Ratio of net investment income to average
net assets prior to expense limitation ...... 3.79% 4.09% 3.97% 3.86% 4.08%(5) 3.55%(5)
Portfolio turnover ............................. 18% 12% 28% 31% 8% 32%
</TABLE>
______________________
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
[TABLE IS STUBBED FROM ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE MISSOURI INSURED FUND - CLASS C
------------------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 11/11/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period .............. $10.810 $10.370 $10.540 $10.360
Income from investment operations:
Net investment income .......................... 0.279 0.405 0.430 0.060
Net realized and unrealized
gain (loss) on investments .................. 0.070 0.455 (0.180) 0.170
------- ------- ------- -------
Total from investment operations ............... 0.349 0.860 0.250 0.230
------- ------- ------- -------
Less dividends:
Dividends from net investment income ........... (0.279) (0.420) (0.420) (0.050)
------- ------- ------- -------
Total dividends ................................ (0.279) (0.420) (0.420) (0.050)
------- ------- ------- -------
Net asset value, end of period .................... $10.880 $10.810 $10.370 $10.540
======= ======= ======= =======
Total return(4) ................................... 3.28% 8.49% 2.48% 2.24%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........ $112 $225 $152 $20
Ratio of expenses to average net assets ........ 1.67% 1.74% 1.62% 1.22%(5)
Ratio of expenses to average
net assets prior to expense limitation ...... 1.77% 1.76% 1.78% 1.55%(5)
Ratio of net investment income
to average net assets ....................... 3.89% 3.98% 4.10% 4.09%(5)
Ratio of net investment income to average
net assets prior to expense limitation ...... 3.79% 3.96% 3.94% 3.76%(5)
Portfolio turnover ............................. 18% 12% 28% 31%
</TABLE>
<PAGE>
for tax-exempt income 47
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC.
TAX-FREE NORTH DAKOTA FUND -- CLASS A
-------------------------------------------------------------------------
EIGHT MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 12/31/94 12/31/93
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.320 $10.880 $11.000 $9.850 $11.070 $10.590
Income from investment operations:
Net investment income .......................... 0.364 0.546 0.540 0.540 0.560 0.580
Net realized and unrealized gain (loss)
on investments ............................... 0.120 0.451 (0.130) 1.180 (1.150) 0.580
------- ------- ------- ------- ------ -------
Total from investment operations ............... 0.484 0.997 0.410 1.720 (0.590) 1.160
------- ------- ------- ------- ------ -------
Less dividends and distributions:
Dividends from net investment income ........... (0.364) (0.557) (0.530) (0.570) (0.530) (0.580)
Distributions from net realized gain on
investment transactions ...................... -- -- -- -- (0.080) (0.100)
Distributions in excess of net realized gains .. -- -- -- -- (0.020) --
------- ------- ------- ------- ------ -------
Total dividends and distributions .............. (0.364) (0.557) (0.530) (0.570) (0.630) (0.680)
------- ------- ------- ------- ------ -------
Net asset value, end of period .................... $11.440 $11.320 $10.880 $11.000 $9.850 $11.070
======= ======= ======= ======= ====== =======
Total return(3) ................................... 4.35% 9.43% 3.89% 17.81% (5.47%) 11.20%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........ $30,496 $30,965 $33,713 $36,096 $33,829 $34,880
Ratio of expenses to average net assets ........ 1.00% 1.00% 0.88% 0.81% 0.46% 0.59%
Ratio of expenses to average net assets prior to
expense limitation ........................... 1.15% 1.04% 1.08% 1.05% 1.14% 1.25%
Ratio of net investment income to average net
assets ....................................... 4.82% 4.97% 5.01% 5.07% 5.36% 5.11%
Ratio of net investment income to average net
assets prior to expense limitation .......... 4.67% 4.93% 4.81% 4.83% 4.68% 4.45%
Portfolio turnover ............................. 23% 41% 58% 45% 33% 27%
</TABLE>
______________________
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(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.
See accompanying notes
<PAGE>
48 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC.
TAX-FREE NORTH DAKOTA FUND -- CLASS B
-----------------------------------------------------------
EIGHT MONTHS YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED 5/10/94(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $11.320 $10.880 $11.000 $9.850 $10.310
Income from investment operations:
Net investment income ....................... 0.308 0.484 0.490 0.480 0.300
Net realized and unrealized gain (loss) on
investments .............................. 0.119 0.451 (0.130) 1.180 (0.390)
------- ------- ------- ------ -------
Total from investment operations ............ 0.427 0.935 0.360 1.660 (0.090)
------- ------- ------- ------ -------
Less dividends and distributions:
Dividends from net investment income ........ (0.307) (0.495) (0.480) (0.510) (0.270)
Distributions from net realized gain on
investment transactions ................... -- -- -- -- (0.080)
Distributions in excess of net realized gains -- -- -- -- (0.020)
------- ------- ------- ------ -------
Total dividends and distributions ........... (0.307) (0.495) (0.480) (0.510) (0.370)
------- ------- ------- ------ -------
Net asset value, end of period .............. $11.440 $11.320 $10.880 $11.000 $9.850
======= ======= ======= ====== =======
Total return(4) 3.83% 8.82% 3.39% 17.24% (0.77%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)...... $980 $889 $700 $375 $144
Ratio of expenses to average net assets ..... 1.75% 1.55% 1.36% 1.29% 0.99%(5)
Ratio of expenses to average net assets prior
to expense limitation ..................... 1.90% 1.59% 1.83% 1.79% 1.89%(5)
Ratio of net investment income to average
net assets ............................... 4.07% 4.42% 4.52% 4.56% 4.97%(5)
Ratio of net investment income to average
net assets prior to expense limitation ... 3.92% 4.38% 4.05% 4.06% 4.07%(5)
Portfolio turnover .......................... 23% 41% 58% 45% 33%
</TABLE>
<PAGE>
[RESTUBBED TABLE FROM ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC.
TAX-FREE NORTH DAKOTA FUND -- CLASS C
------------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 7/29/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period ........... $11.320 $10.870 $11.000 $10.510
Income from investment operations:
Net investment income ....................... 0.307 0.441 0.440 0.170
Net realized and unrealized gain (loss) on
investments .............................. 0.110 0.468 (0.140) 0.500
------- ------- ------- -------
Total from investment operations ............ 0.417 0.909 0.300 0.670
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ........ (0.307) (0.459) (0.430) (0.180)
Distributions from net realized gain on
investment transactions ................... -- -- -- --
Distributions in excess of net realized gains -- -- -- --
------- ------- ------- -------
Total dividends and distributions ........... (0.307) (0.459) (0.430) (0.180)
------- ------- ------- -------
Net asset value, end of period .............. $11.430 $11.320 $10.870 $11.000
======= ======= ======= =======
Total return(4) 3.74% 8.57% 2.81% 6.47%
Ratios and supplemental data:
Net assets, end of period (000 omitted)...... $30 $41 $40 $20
Ratio of expenses to average net assets ..... 1.75% 1.87% 1.75% 1.73%(5)
Ratio of expenses to average net assets prior
to expense limitation ..................... 1.90% 1.91% 1.75% 1.73%(5)
Ratio of net investment income to average
net assets ............................... 4.07% 4.10% 4.06% 4.00%(5)
Ratio of net investment income to average
net assets prior to expense limitation ... 3.92% 4.06% 4.06% 4.00%(5)
Portfolio turnover .......................... 23% 41% 58% 45%
</TABLE>
_____________________
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 49
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE OREGON INSURED FUND -- CLASS A
--------------------------------------------------------------------------------------
EIGHT MONTHS YEAR YEAR YEAR TWO MONTHS YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED 8/1/93(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 12/31/94 10/31/94 10/31/93
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $10.310 $9.870 $10.050 $8.920 $9.000 $10.240 $10.000
Income from investment operations:
Net investment income ................... 0.320 0.481 0.480 0.490 0.090 0.500 0.130
Net realized and unrealized gain (loss)
on investments ....................... 0.120 0.444 (0.180) 1.140 (0.090) (1.240) 0.240
------- ------- ------- ------- ------- ------- -------
Total from investment operations ........ 0.440 0.925 0.300 1.630 0.000 (0.740) 0.370
------- ------- ------- ------- ------- ------- -------
Less dividends:
Dividends from net investment income .... (0.320) (0.485) (0.480) (0.500) (0.080) (0.500) (0.130)
------- ------- ------- ------- ------- ------- -------
Total dividends ......................... (0.320) (0.485) (0.480) (0.500) (0.080) (0.500) (0.130)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period ............. $10.430 $10.310 $9.870 $10.050 $8.920 $9.000 $10.240
======= ======= ======= ======= ======= ======= =======
Total return(4) 4.33% 9.66% 3.15% 18.71% 0.06% (7.35%) 3.64%
Ratios and supplemental data:
Net assets, end of period (000 omitted).. $24,336 $22,071 $20,913 $21,590 $14,650 $14,086 $4,609
Ratio of expenses to average net assets.. 0.71% 0.71% 0.71% 0.54% 0.05%5 0.03% --
Ratio of expenses to average net assets
prior to expense limitation ........... 1.03% 0.94% 1.07% 1.11% 1.25%5 1.25% 1.25%(5)
Ratio of net investment income to average
net assets ............................ 4.64% 4.83% 4.92% 5.12% 5.79%5 5.17% 4.61%(5)
Ratio of net investment income to average
net assets prior to expense limitation 4.32% 4.60% 4.56% 4.55% 4.59%5 3.95% 3.36%(5)
Portfolio turnover ...................... 5% 5% 40% 41% 5% 49% 11%
</TABLE>
______________________
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
50 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE OREGON INSURED FUND -- CLASS B
------------------------------------------------------------------------
EIGHT MONTHS YEAR YEAR YEAR TWO MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED 3/12/94(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 12/31/94 10/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $10.310 $9.870 $10.050 $8.920 $9.000 $9.850
Income from investment operations:
Net investment income ................. 0.268 0.422 0.430 0.440 0.080 0.270
Net realized and unrealized gain (loss)
on investments ...................... 0.120 0.434 (0.180) 1.140 (0.090) (0.850)
------- ------- ------- ------- ------- -------
Total from investment operations ...... 0.388 0.856 0.250 1.580 (0.010) (0.580)
------- ------- ------- ------- ------- -------
Less dividends:
Dividends from net investment income... (0.268) (0.416) (0.430) (0.450) (0.070) (0.270)
------- ------- ------- ------- ------- -------
Total dividends ....................... (0.268) (0.416) (0.430) (0.450) (0.070) (0.270)
------- ------- ------- ------- ------- -------
Net asset value, end of period ........... $10.430 $10.310 $9.870 $10.050 $8.920 $9.000
======= ======= ======= ======= ======= =======
Total return(4) .......................... 3.82% 8.90% 2.61% 18.10% 0.03% (5.95%)
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ....................... $6,011 $6,461 $4,758 $2,786 $1,303 $1,146
Ratio of expenses to average net assets 1.46% 1.39% 1.25% 1.04% 0.60%(5) 0.75%(5)
Ratio of expenses to average net assets
prior to expense limitation ........ 1.78% 1.62% 1.83% 1.86% 2.00%(5) 2.00%(5)
Ratio of net investment income to
average net assets ................. 3.89% 4.15% 4.37% 4.57% 5.19%(5) 4.43%(5)
Ratio of net investment income to .....
average net assets prior to expense
limitation ......................... 3.57% 3.92% 3.79% 3.75% 3.79%(5) 3.18%(5)
Portfolio turnover .................... 5% 5% 40% 41% 5% 49%
</TABLE>
<PAGE>
[RESTUBBED TABLE FROM ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE OREGON INSURED FUND -- CLASS C
---------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 7/7/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period ..... $10.320 $9.880 $10.050 $9.630
Income from investment operations:
Net investment income ................. 0.268 0.411 0.400 0.190
Net realized and unrealized gain (loss)
on investments ...................... 0.120 0.431 (0.170) 0.410
------- ------- ------- -------
Total from investment operations ...... 0.388 0.842 0.230 0.600
------- ------- ------- -------
Less dividends:
Dividends from net investment income... (0.268) (0.402) (0.400) (0.180)
------- ------- ------- -------
Total dividends ....................... (0.268) (0.402) (0.400) (0.180)
------- ------- ------- -------
Net asset value, end of period ........... $10.440 $10.320 $9.880 $10.050
======= ======= ======= =======
Total return(4) .......................... 3.81% 8.75% 2.38% 6.35%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ....................... $999 $532 $360 $250
Ratio of expenses to average net assets 1.46% 1.51% 1.55% 1.39%(5)
Ratio of expenses to average net assets
prior to expense limitation ........ 1.78% 1.74% 1.82% 1.74%(5)
Ratio of net investment income to
average net assets ................. 3.89% 4.03% 4.03% 4.00%(5)
Ratio of net investment income to .....
average net assets prior to expense
limitation ......................... 3.57% 3.80% 3.76% 3.65%(5)
Portfolio turnover .................... 5% 5% 40% 41%
</TABLE>
______________________
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 51
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE WASHINGTON INSURED FUND - CLASS A
------------------------------------------------------------------------------------
EIGHT MONTHS YEAR YEAR YEAR TWO MONTHS YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED 8/1/93(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 12/31/94 10/31/94 10/31/93
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $10.770 $10.300 $10.440 $9.210 $9.370 $10.670 $10.000
Income from investment operations:
Net investment income ..................... 0.355 0.541 0.540 0.590 0.090 0.550 0.150
Net realized and unrealized gain (loss)
on investments .......................... 0.131 0.481 (0.140) 1.210 (0.160) (1.260) 0.670
-------- -------- -------- -------- -------- -------- --------
Total from investment operations .......... 0.486 1.022 0.400 1.800 (0.070) (0.710) 0.820
-------- -------- -------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ...... (0.356) (0.552) (0.540) (0.570) (0.090) (0.570) (0.150)
Distributions from net realized gain on
investment transactions .................. -- -- -- -- -- (0.020) --
-------- -------- -------- -------- -------- -------- --------
Total dividends and distributions ......... (0.356) (0.552) (0.540) (0.570) (0.090) (0.590) (0.150)
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of period ............... $10.900 $10.770 $10.300 $10.440 $9.210 $9.370 $10.670
======== ======== ======== ======== ======== ======== ========
Total return(4) .............................. 4.59% 10.23% 3.98% 19.94% (0.69%) (6.85%) 8.05%
Ratios and supplemental data:
Net assets, end of period (000 omitted).... $2,325 $2,372 $2,382 $2,099 $2,049 $2,118 $2,108
Ratio of expenses to average net assets.... 0.50% 0.49% 0.44% 0.28% 0.10%(5) 0.14% --
Ratio of expenses to average net assets
prior to expense limitation .............. 1.34% 1.38% 1.25% 1.25% 1.25%(5) 1.25% 1.25%(5)
Ratio of net investment income to average
net assets .............................. 4.94% 5.20% 5.29% 5.57% 6.18%(5) 5.44% 5.50%(5)
Ratio of net investment income to average
net assets prior to expense limitation... 4.10% 4.31% 4.48% 4.60% 5.03%(5) 4.33% 4.25%(5)
Portfolio turnover ........................ 1% 20% 33% 51% -- -- 45%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
52 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE WASHINGTON INSURED FUND - CLASS B
------------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 10/24/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period ....... $10.780 $10.310 $10.440 $10.180
Income from investment operations:
Net investment income ................... 0.301 0.471 0.470 0.090
Net realized and unrealized gain (loss)
on investments ........................ 0.141 0.470 (0.140) 0.250
------- ------- ------ -------
Total from investment operations ........ 0.442 0.941 0.330 0.340
------- ------- ------ -------
Less dividends:
Dividends from net investment income..... (0.302) (0.471) (0.460) (0.080)
------- ------- ------ -------
Total dividends ......................... (0.302) (0.471) (0.460) (0.080)
------- ------- ------ -------
Net asset value, end of period ............. $10.920 $10.780 $10.310 $10.440
======= ======= ======= =======
Total return(4) ............................ 4.16% 9.38% 3.32% 3.30%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $1,304 $963 $516 $15
Ratio of expenses to average net assets 1.25% 1.24% 1.21% 1.04%(5)
Ratio of expenses to average net assets
prior to expense limitation ............ 2.09% 2.13% 2.00% 2.00%(5)
Ratio of net investment income to
average net assets .................... 4.19% 4.45% 4.47% 4.44%(5)
Ratio of net investment income to average
net assets prior to expense limitation... 3.35% 3.56% 3.68% 3.48%(5)
Portfolio turnover ....................... 1% 20% 33% 51%
</TABLE>
<PAGE>
[RESTUBBED TABLE FROM ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE WASHINGTON INSURED FUND - CLASS C
-------------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 4/21/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period........ $10.770 $10.300 $10.430 $9.940
Income from investment operations:
Net investment income ................... 0.302 0.465 0.450 0.310
Net realized and unrealized gain (loss)
on investments ........................ 0.140 0.469 (0.140) 0.480
------- ------- ------ -------
Total from investment operations ........ 0.442 0.934 0.310 0.790
------- ------- ------ -------
Less dividends:
Dividends from net investment income .... (0.302) (0.464) (0.440) (0.300)
------- ------- ------ -------
Total dividends.......................... (0.302) (0.464) (0.440) (0.300)
------- ------- ------ -------
Net asset value, end of period ............. $10.910 $10.770 $10.300 $10.430
======= ======= ======= =======
Total return(4) ............................ 4.17% 9.31% 3.12% 8.13%
Ratios and supplemental data:
Net assets, end of period (000 omitted).. $284 $69 $19 $19
Ratio of expenses to average net assets 1.25% 1.29% 1.37% 1.30%(5)
Ratio of expenses to average net assets
prior to expense limitation ........... 2.09% 2.18% 2.00% 2.00%(5)
Ratio of net investment income to
average net assets .................... 4.19% 4.40% 4.36% 4.45%(5)
Ratio of net investment income to average
net assets prior to expense limitation.. 3.35% 3.51% 3.73% 3.75%(5)
Portfolio turnover ..................... 1% 20% 33% 51%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 53
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE WISCONSIN FUND - CLASS A
-----------------------------------------------------------------------
EIGHT MONTHS YEAR YEAR YEAR FOUR MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 12/31/94 8/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $10.010 $9.640 $9.780 $8.740 $9.280 $10.000
Income from investment operations:
Net investment income .................... 0.304 0.466 0.460 0.480 0.160 0.490
Net realized and unrealized gain (loss)
on investments ........................ 0.070 0.383 (0.140) 1.040 (0.550) (0.720)
------- ------- ------ ------ ------- -------
Total from investment operations ......... 0.374 0.849 0.320 1.520 (0.390) (0.230)
------- ------- ------ ------ ------- -------
Less dividends:
Dividends from net investment income...... (0.304) (0.479) (0.460) (0.480) (0.150) (0.490)
------- ------- ------ ------ ------- -------
Total dividends .......................... (0.304) (0.479) (0.460) (0.480) (0.150) (0.490)
------- ------- ------ ------ ------- -------
Net asset value, end of period ............. $10.080 $10.010 $9.640 $9.780 $8.740 $9.280
======= ======= ====== ====== ======= =======
Total return(3) ............................. 3.80% 9.07% 3.49% 17.74% (4.12%) (2.40%)
Ratios and supplemental data:
Net assets, end of period
(000 omitted) .......................... $34,489 $30,879 $28,292 $26,449 $20,167 $16,093
Ratio of expenses to average
net assets ............................. 1.00% 0.99% 0.98% 0.88% 0.08%(4) 0.04%
Ratio of expenses to average net
assets prior to expense limitation ...... 1.04% 1.07% 1.09% 1.09% 1.25%(4) 1.25%
Ratio of net investment income to
average net assets ..................... 4.56% 4.76% 4.90% 5.05% 5.54%(4) 4.89%
Ratio of net investment income to average
net assets prior to expense limitation.. 4.52% 4.68% 4.79% 4.84% 4.37%(4) 3.68%
Portfolio turnover........................ 16% 30% 38% 12% 20% 86%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(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) Annualized.
See accompanying notes
<PAGE>
54 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE WISCONSIN FUND - CLASS B
------------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 4/22/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period........ $10.000 $9.630 $9.770 $9.390
Income from investment operations:
Net investment income ................... 0.255 0.395 0.410 0.280
Net realized and unrealized gain
(loss) on investments .................. 0.070 0.382 (0.140) 0.370
-------- -------- -------- --------
Total from investment operations ........ 0.325 0.777 0.270 0.650
-------- -------- -------- --------
Less dividends:
Dividends from net investment income .... (0.255) (0.407) (0.410) (0.270)
-------- -------- -------- --------
Total dividends ......................... (0.255) (0.407) (0.410) (0.270)
-------- -------- -------- --------
Net asset value, end of period ............. $10.070 $10.000 $9.630 $9.770
======== ======== ======== ========
Total return(4) 3.29% 8.27% 2.84% 7.08%
Ratios and supplemental data:
Net assets, end of period (000 omitted).. $2,621 $1,931 $1,339 $725
Ratio of expenses to average net assets.. 1.75% 1.72% 1.66% 1.45%(5)
Ratio of expenses to average net assets
prior to expense limitation ........... 1.79% 1.80% 1.85% 1.70%(5)
Ratio of net investment income to average
net assets............................. 3.81% 4.03% 4.37% 4.31%(5)
Ratio of net investment income to average
net assets prior to expense limitation 3.77% 3.95% 4.18% 4.06%(5)
Portfolio turnover ...................... 16% 30% 38% 12%
</TABLE>
<PAGE>
[RESTUBBED TABLE FROM ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE WISCONSIN FUND - CLASS C
-----------------------------------------------
EIGHT MONTHS YEAR YEAR PERIOD
ENDED ENDED ENDED 3/28/95(3) TO
8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period........ $10.030 $9.660 $9.790 $9.340
Income from investment operations:
Net investment income ................... 0.259 0.380 0.390 0.300
Net realized and unrealized gain
(loss) on investments .................. 0.075 0.390 (0.130) 0.440
-------- -------- -------- --------
Total from investment operations ........ 0.334 0.770 0.260 0.740
-------- -------- -------- --------
Less dividends:
Dividends from net investment income .... (0.254) (0.400) (0.390) (0.290)
-------- -------- -------- --------
Total dividends ......................... (0.254) (0.400) (0.390) (0.290)
-------- -------- -------- --------
Net asset value, end of period ............. $10.110 $10.030 $9.660 $9.790
======== ======== ======== ========
Total return(4) 3.38% 8.16% 2.74% 8.06%
Ratios and supplemental data:
Net assets, end of period (000 omitted).. $1,283 $689 $555 $73
Ratio of expenses to average net assets.. 1.75% 1.81% 1.75% 1.77%(5)
Ratio of expenses to average net assets
prior to expense limitation ........... 1.79% 1.89% 1.83% 1.77%(5)
Ratio of net investment income to average
net assets............................. 3.81% 3.94% 4.12% 4.04%(5)
Ratio of net investment income to average
net assets prior to expense limitation 3.77% 3.86% 4.04% 4.04%(5)
Portfolio turnover ...................... 16% 30% 38% 12%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) 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.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 55
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1998
- --------------------------------------------------------------------------------
Delaware-Voyageur Tax-Free Kansas Fund ("Tax-Free Kansas Fund"),
Delaware-Voyageur Tax-Free Missouri Insured Fund ("Tax-Free Missouri Insured
Fund"), Delaware-Voyageur Tax-Free Oregon Insured Fund ("Tax-Free Oregon Insured
Fund"), and Delaware-Voyageur Tax-Free Washington Insured Fund ("Tax-Free
Washington Insured Fund"), series within the Voyageur Investment Trust,
Delaware-Voyageur Tax-Free Idaho Fund ("Tax-Free Idaho Fund"), Delaware-Voyageur
Tax-Free Iowa Fund ("Tax-Free Iowa Fund"), and Delaware-Voyageur Tax-Free
Wisconsin Fund ("Tax-Free Wisconsin Fund"), series within the Voyageur Mutual
Funds, Inc., and Delaware-Voyageur Tax-Free North Dakota Fund ("Tax-Free North
Dakota Fund"), a series within the Voyageur Tax-Free Funds, Inc. (each referred
to as a "Fund" or collectively as the "Funds") are registered as
non-diversified, open-end management investment companies under the Investment
Company Act of 1940 (as amended). The Funds offer three classes of shares. The A
Class carries a front-end sales charge of 3.75%. The B Class carries a back-end
deferred sales charge and the C Class carries a level load deferred sales
charge.
The Tax-Free Idaho Fund, Tax-Free Iowa Fund, Tax-Free North Dakota Fund, and
Tax-Free Wisconsin Fund seek high current income free from both federal and
state income taxes by investing in investment grade municipal bonds. The
Tax-Free Missouri Insured Fund, Tax-Free Oregon Insured Fund and Tax-Free
Washington Insured Fund seek high current income free from both federal and
state income taxes with the added safety of an insured portfolio by investing in
insured municipal bonds. The Tax-Free Kansas Fund seeks high current income free
from both federal and state income taxes and local intangibles tax by investing
in investment grade municipal bonds.
The Funds have changed their fiscal year ends from December 31 to August 31 to
match the fiscal year end of Delaware Investments' national municipal bond
funds.
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
acquired 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 advisor to the Funds, Delaware
Distributors, L.P. ("DDLP") became the distributor for the Funds, and Delaware
Service Company, Inc. ("DSC") became the transfer, dividend-disbursing,
shareholder servicing and accounting and administrative agent for the Funds.
DMC, DDLP and DSC assumed these services under substantially similar fee
structures that were in effect prior to the acquisition.
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 Funds' 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.
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.
<PAGE>
Other - Expenses common to all funds within the Delaware Investments Family of
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 and
market premium are amortized to interest income over the lives of the respective
securities. The Funds declare dividends from net investment income daily and pay
such dividends monthly. Capital gains, if any, are distributed annually.
Certain expenses of the Funds are paid through "soft dollar" arrangements with
brokers. The amount of these expenses is less than 0.01% of the Fund's average
daily net assets.
3. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, each Fund
pays DMC, the Investment Manager of each Fund, an annual fee which is calculated
daily based on the net assets of each Fund.
DMC has elected to waive its fees and reimburse each Fund to the extent that
annual operating expenses exclusive of taxes, interest, brokerage commissions,
distribution fees, and extraordinary expenses do not exceed the following
percentages of average daily net assets through December 31, 1998.
<PAGE>
56 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. Investment Management and Other Transactions with Affiliates (Continued)
The management fee and waiver rates are as follows:
OPERATING EXPENSE
MANAGEMENT LIMITATION AS A
FEE AS A PERCENTAGE PERCENTAGE OF
OF AVERAGE AVERAGE DAILY
DAILY NET ASSETS NET ASSETS
(PER ANNUM) (PER ANNUM)
------------------- -----------------
Tax-Free Idaho Fund ................ 0.50% 0.75%*
Tax-Free Iowa Fund ................. 0.50% 0.75%*
Tax-Free Kansas Fund ............... 0.50% 0.75%*
Tax-Free Missouri Insured Fund ..... 0.50% 0.66%
Tax-Free North Dakota Fund ......... 0.50% 0.75%
Tax-Free Oregon Insured Fund........ 0.50% 0.46%
Tax-Free Washington Insured Fund ... 0.50% 0.25%
Tax-Free Wisconsin Fund ........... 0.50% 0.75%
- ----------------------
* Prior to May 1, 1998, the waiver rates for Tax-Free Idaho, Tax-Free Iowa and
Tax-Free Kansas were 0.62%, 0.67% and 0.58%, respectively.
The Funds have engaged DSC, an affiliate of DMC, to provide dividend disbursing,
transfer agent and accounting and administrative services. Each Fund pays DSC a
monthly fee based on number of shareholder accounts, shareholder transactions
and average net assets, subject to certain minimums.
On August 31, 1998, the Funds had payables to affiliates as follows:
<TABLE>
<CAPTION>
DIVIDEND DISBURSING,
TRANSFER AGENT
FEES, ACCOUNTING OTHER
INVESTMENT SERVICES EXPENSES
MANAGEMENT AND OTHER PAYABLE
FEES PAYABLE EXPENSES PAYABLE TO DMC
TO DMC TO DSC AND AFFILIATES
------------ -------------------- --------------
<S> <C> <C> <C>
Tax-Free Idaho Fund ................ $ 2,375 $4,436 $16,830
Tax-Free Iowa Fund ................. 22,901 4,914 13,892
Tax-Free Kansas Fund ............... 1,978 1,491 6,995
Tax-Free Missouri Insured Fund ..... 23,561 5,896 22,767
Tax-Free North Dakota Fund ......... 20,961 3,126 8,163
Tax-Free Oregon Insured Fund ....... 7,604 3,121 12,544
Tax-Free Washington Insured Fund ... -- 418 --
Tax-Free Wisconsin Fund ............ 3,974 3,318 11,819
</TABLE>
<PAGE>
for tax-exempt income 57
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. Investment Management and Other Transactions with Affiliates (Continued)
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.
DDLP earned commissions on sales of the Fund A Class shares for each Fund as
follows:
EIGHT MONTHS ENDED EIGHT MONTHS ENDED
8/31/98 12/31/97
------------------ -------------------
Tax-Free Idaho Fund .............. $28,012 $23,159
Tax-Free Iowa Fund ............... 10,974 9,571
Tax-Free Kansas Fund............... 3,464 2,875
Tax-Free Missouri Insured Fund..... 5,223 4,413
Tax-Free North Dakota Fund ........ 1,553 1,251
Tax-Free Oregon Insured Fund ...... 15,563 9,496
Tax-Free Washington Insured Fund... 556 1,272
Tax-Free Wisconsin Fund ........... 8,312 7,096
Certain officers of DMC, DSC and DDLP are officers, directors and/or employees
of the Funds. These officers, directors and employees are paid no compensation
by the Funds.
4. Investments
During the eight months ended August 31, 1998, the Funds made purchases and
sales of investment securities other than U.S. government securities and
temporary cash investments as follows:
PURCHASES SALES
----------- ----------
Tax-Free Idaho Fund ................ $10,549,684 $2,272,577
Tax-Free Iowa Fund ................. 5,334,505 3,735,120
Tax-Free Kansas Fund ............... 7,403,923 4,115,854
Tax-Free Missouri Insured Fund ..... 6,943,125 8,710,592
Tax-Free North Dakota Fund ......... 4,844,033 5,694,380
Tax-Free Oregon Insured Fund ....... 2,702,700 977,530
Tax-Free Washington Insured Fund.... 536,406 20,000
Tax-Free Wisconsin Fund............. 9,853,403 3,898,223
At August 31, 1998, the aggregate cost of securities and unrealized appreciation
(depreciation) for federal income tax purposes for each Fund were as follows:
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE NET
COST OF UNREALIZED UNREALIZED UNREALIZED
INVESTMENTS APPRECIATION DEPRECIATION APPRECIATION
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
Tax-Free Idaho Fund ......................... $46,694,326 $3,030,104 -- $3,030,104
Tax-Free Iowa Fund .......................... 40,876,222 3,131,664 -- 3,131,664
Tax-Free Kansas Fund ........................ 16,110,665 1,108,148 -- 1,108,148
Tax-Free Missouri Insured Fund .............. 53,504,006 4,645,448 -- 4,645,448
Tax-Free North Dakota Fund .................. 29,111,064 2,164,597 -- 2,164,597
Tax-Free Oregon Insured Fund ................ 28,258,891 2,577,017 -- 2,577,017
Tax-Free Washington Insured Fund ............ 3,586,226 278,167 -- 278,167
Tax-Free Wisconsin Fund ..................... 35,649,100 2,325,391 ($702) 2,324,689
</TABLE>
For federal income tax purposes, the Funds' had accumulated capital losses at
August 31, 1998 as follows:
<TABLE>
<CAPTION>
YEAR OF YEAR OF YEAR OF YEAR OF
EXPIRATION EXPIRATION EXPIRATION EXPIRATION
2002 2003 2004 2005 TOTAL
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Tax-Free Iowa Fund ................ $974,083 $368,235 $168,308 $117,934 $1,628,560
Tax-Free Missouri Insured Fund .... 40,785 351,009 525,264 -- 917,058
Tax-Free Oregon Insured Fund ...... 223,778 158,365 218,468 -- 600,611
Tax-Free Washington Insured Fund .. -- 77,949 2,791 -- 80,740
Tax-Free Wisconsin Fund ........... 193,864 229,647 -- -- 423,511
</TABLE>
<PAGE>
58 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. Capital Stock
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IDAHO FUND TAX-FREE IOWA FUND
--------------------------------- ------------------------------------
EIGHT MONTHS EIGHT MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
8/31/98 12/31/97 12/31/96 8/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class .................................. 771,907 731,650 1,392,372 243,079 355,433 609,767
B Class .................................. 89,150 183,407 283,576 108,244 135,405 83,915
C Class .................................. 61,814 64,124 34,723 48,973 25,201 27,546
Shares issued upon reinvestment of dividends
from net investment income and net
realized gain on investment transactions:
A Class .................................. 67,203 87,352 55,095 70,558 124,468 135,685
B Class .................................. 10,490 14,064 5,873 5,695 6,562 3,959
C Class .................................. 2,676 3,083 3,898 1,415 1,110 441
--------- --------- --------- -------- -------- --------
1,003,240 1,083,680 1,775,537 477,964 648,179 861,313
--------- --------- --------- -------- -------- --------
Shares repurchased:
A Class .................................. (343,954) (406,050) (137,976) (251,562) (833,421) (890,441)
B Class .................................. (49,387) (54,443) (15,168) (18,336) (23,960) --
C Class .................................. (14,047) (44,185) (34,878) (16,486) (9,438) (5,230)
-------- -------- -------- -------- -------- --------
(407,388) (504,678) (188,022) (286,384) (866,819) (895,671)
-------- -------- -------- -------- -------- --------
Net increase (decrease)...................... 595,852 579,002 1,587,515 191,580 (218,640) (34,358)
======== ======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE KANSAS FUND TAX-FREE MISSOURI INSURED FUND
---------------------------------- ----------------------------------
EIGHT MONTHS EIGHT MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
8/31/98 12/31/97 12/31/96 8/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class .................................. 244,419 114,412 148,964 127,338 265,509 551,980
B Class .................................. 37,997 89,151 165,725 36,960 200,996 458,267
C Class .................................. 3,682 6,942 7,541 2,752 9,719 15,011
Shares issued upon reinvestment of dividends
from net investment income and net
realized gain on investment transactions:
A Class .................................. 16,919 27,906 26,440 70,272 129,146 126,576
B Class .................................. 5,986 7,813 3,238 16,990 33,377 24,527
C Class .................................. 252 404 195 264 521 322
------- -------- ------- -------- -------- ----------
309,255 246,628 352,103 254,576 639,268 1,176,683
------- -------- ------- -------- -------- ----------
Shares repurchased:
A Class .................................. (101,432) (142,361) (206,595) (373,253) (656,405) (689,056)
B Class .................................. (25,196) (12,598) (4,714) (77,609) (175,978) (64,463)
C Class .................................. (2,379) (6,119) (2,863) (13,547) (4,070) (2,635)
------- ------- ------- -------- -------- ----------
(129,007) (161,078) (214,172) (464,409) (836,453) (756,154)
------- ------- ------- -------- -------- ----------
Net increase (decrease) ..................... 180,248 85,550 137,931 (209,833) (197,185) 420,529
======= ======= ======= ======== ======== ==========
</TABLE>
<PAGE>
for tax-exempt income 59
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. Capital Stock (Continued)
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC. VOYAGEUR INVESTMENT TRUST
TAX-FREE NORTH DAKOTA FUND TAX-FREE OREGON INSURED FUND
---------------------------------- -----------------------------------
EIGHT MONTHS EIGHT MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
8/31/98 12/31/97 12/31/96 8/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class .................................. 85,182 68,674 175,611 389,222 372,928 448,613
B Class .................................. 7,136 17,635 33,146 54,361 162,406 254,637
C Class .................................. -- -- 2,582 49,358 16,538 28,508
Shares issued upon reinvestment of dividends
from net investment income and net
realized gain on investment transactions:
A Class .................................. 52,793 95,230 101,442 41,911 61,920 60,566
B Class .................................. 1,149 2,047 1,687 9,754 15,305 9,000
C Class .................................. 99 156 68 1,286 1,157 696
------- ------- ------- -------- -------- --------
146,359 183,742 314,536 545,892 630,254 802,020
------- ------- ------- -------- -------- --------
Shares repurchased:
A Class .................................. (205,612) (529,157) (458,594) (238,227) (412,353) (539,553)
B Class .................................. (1,044) (5,593) (4,529) (114,262) (33,265) (58,924)
C Class .................................. (1,113) (274) (770) (6,562) (2,526) (17,624)
------- ------- ------- -------- -------- --------
(207,769) (535,024) (463,893) (359,051) (448,144) (616,101)
------- ------- ------- -------- -------- --------
Net increase (decrease)...................... (61,410) (351,282) (149,357) 186,841 182,110 185,919
======= ======= ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE WASHINGTON INSURED FUND TAX-FREE WISCONSIN FUND
--------------------------------- --------------------------------
EIGHT MONTHS EIGHT MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
8/31/98 12/31/97 12/31/96 8/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class .................................. 10,134 38,633 50,130 567,546 729,711 526,332
B Class .................................. 31,122 50,130 50,610 95,654 51,892 62,678
C Class .................................. 21,312 4,447 93 65,500 35,931 58,385
Shares issued upon reinvestment of dividends
from net investment income and net
realized gain on investment transactions:
A Class .................................. 3,273 6,061 5,366 51,547 78,038 79,482
B Class .................................. 1,719 1,911 530 3,392 4,328 2,671
C Class .................................. 276 86 -- 2,544 2,504 1,244
------ ------- ------- -------- -------- --------
67,836 101,268 106,729 786,183 902,404 730,792
------ ------- ------- -------- -------- --------
Shares repurchased:
A Class .................................. (20,291) (55,657) (25,440) (283,460) (657,954) (374,467)
B Class .................................. (2,728) (12,744) (2,606) (31,926) (2,138) (431)
C Class .................................. (1,963) -- -- (9,845) (27,203) (9,635)
------ ------- ------- -------- -------- --------
(24,982) (68,401) (28,046) (325,231) (687,295) (384,533)
------ ------- ------- -------- -------- --------
Net increase (decrease)...................... 42,854 32,867 78,683 460,952 (215,109) 346,259
====== ======= ======= ======== ======== ========
</TABLE>
<PAGE>
60 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
6. Lines of Credit
The Funds have committed lines of credit for the following amounts:
Tax-Free Idaho Fund ............................................. $2,100,000
Tax-Free Iowa Fund .............................................. 2,100,000
Tax-Free Kansas Fund ............................................ 700,000
Tax-Free Missouri Insured Fund .................................. 3,000,000
Tax-Free North Dakota Fund....................................... 1,600,000
Tax-Free Oregon Insured Fund..................................... 1,500,000
Tax-Free Washington Insured Fund ................................ 200,000
Tax-Free Wisconsin Fund ......................................... 1,700,000
No amounts were outstanding at August 31, 1998, or at any time during the fiscal
year.
7. Credit And Market 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 DELAWARE-VOYAGEUR FUNDS
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors
Voyageur Mutual Funds, Inc. - Delaware-Voyageur Tax-Free Idaho Fund
Voyageur Mutual Funds, Inc. - Delaware-Voyageur Tax-Free Iowa Fund
Voyageur Investment Trust - Delaware-Voyageur Tax-Free Kansas Fund
Voyageur Investment Trust - Delaware-Voyageur Tax-Free Missouri Insured Fund
Voyageur Tax-Free Funds, Inc. - Delaware-Voyageur Tax-Free North Dakota Fund
Voyageur Investment Trust - Delaware-Voyageur Tax-Free Oregon Insured Fund
Voyageur Investment Trust - Delaware-Voyageur Tax-Free Washington Insured Fund
Voyageur Mutual Funds, Inc. - Delaware-Voyageur Tax-Free Wisconsin Fund
We have audited the accompanying statements of net assets of Tax-Free Idaho
Fund, Tax-Free Iowa Fund, Tax-Free Kansas Fund, Tax-Free Missouri Insured Fund,
Tax-Free North Dakota Fund, Tax-Free Oregon Insured Fund, Tax-Free Washington
Insured Fund and Tax-Free Wisconsin Fund (the "Funds") as of August 31, 1998,
and the related statements of operations, statements of changes in net assets
and financial highlights for the period January 1, 1998 through August 31, 1998
and for the year ended December 31, 1997. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The statements of changes in net
assets for the year ended December 31, 1996 and the financial highlights for the
periods presented through December 31, 1996 were audited by other auditors whose
reports thereon dated February 14, 1997 expressed unqualified opinions on those
statements and financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of August 31, 1998, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds at August 31, 1998, and the results of their operations,
the changes in their net assets and their financial highlights for the period
January 1, 1998 through August 31, 1998 and for the year ended December 31,
1997, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
-------------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
October 5, 1998
<PAGE>
THIS ANNUAL REPORT IS FOR THE INFORMATION OF TAX-FREE IDAHO FUND, TAX-FREE IOWA
FUND, Tax-Free Kansas Fund, Tax-Free Missouri Insured Fund, Tax-Free North
Dakota Fund, Tax-Free Oregon Insured Fund, Tax-Free Washington Insured Fund, and
Tax-Free Wisconsin 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 each Fund's 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 each Fund will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Board of Directors
WAYNE A. STORK
Chairman
Delaware Investments Family of Funds
Philadelphia, PA
JEFFREY J. NICK
President and Chief Executive Officer
Delaware Investments Family of Funds
Philadelphia, PA
WALTER P. BABICH
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA
JOHN H. DURHAM
Partner, Complete Care Services
Horsham, PA
ANTHONY D. KNERR
Consultant, Anthony Knerr & Associates
New York, NY
ANN R. LEVEN
Treasurer, National Gallery of Art
Washington, DC
W. THACHER LONGSTRETH
City Councilman
Philadelphia, PA
THOMAS F. MADISON
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
CHARLES E. PECK
Secretary/Treasurer, Enterprise Homes, Inc.
Fredericksburg, VA
Affiliated Officers
DAVID K. DOWNES
Executive Vice President, Chief Financial Officer
and Chief Operating Officer
Delaware Investments Family of Funds
Philadelphia, PA
GEORGE M. CHAMBERLAIN, JR.
Senior Vice President, Secretary
and General Counsel
Delaware Investments Family of Funds
Philadelphia, PA
BRUCE D. BARTON
President and Chief Executive Officer
Delaware Distributors, L.P.
Philadelphia, PA
<PAGE>
(photo of globes)
directors
& officers
INVESTMENT MANAGER
Delaware Management Company
Philadelphia, Pennsylvania
INTERNATIONAL AFFILIATE
Delaware International Advisers Ltd.
London, England
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia, Pennsylvania
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia, Pennsylvania
1818 Market Street
Philadelphia, PA 19103-3682
<PAGE>
(photo of globes)
When used with prospective investors, this report must be preceded or
accompanied by a current Tax-Free Idaho Fund, Tax-Free Iowa Fund, Tax-Free
Kansas Fund, Tax-Free Missouri Insured Fund, Tax-Free North Dakota Fund,
Tax-Free Oregon Insured Fund, Tax-Free Washington Insured Fund and Tax-Free
Wisconsin Fund Prospectus and the Delaware Investments Performance Update for
the most recently completed calendar quarter. For a prospectus of any other
mutual fund from Delaware Investments, contact your financial adviser or
Delaware Investments.
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawarefunds.com
DELAWARE
INVESTMENTS
===================
Philadelphia*London
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Funds are
not FDIC or NCUSIF insured, are not guaranteed by any bank or any credit union,
and involve investment risk, including the possible loss of the principal amount
invested. Shares of the Funds are not bank or credit union deposits.
Copy Right Delaware Distributors, L.P.
Printed in the USA
on recycled paper
(1117)
AR-VOY8[8/98]TKO10/98
