<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
goals
1998
Semi-Annual
Report
DELAWARE(SM)
INVESTMENTS
- -----------------------
Philadelph o London
(photo of illustration from Tax-Exempt Income Brochure)
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A TRADITION OF SOUND INVESTING
commitment
A Commitment
To Our Investors
Delaware Investments has a tradition of money management that dates back to
1929. We have a long and distinguished history of helping individuals and
institutions - including some of America's largest pension funds - reach their
financial goals.
Headquartered in Philadelphia, a block from the nation's oldest stock
exchange, the Delaware organization established its first mutual fund in 1938.
Delaware International Advisers Ltd., our international affiliate, was
established in 1990 and is headquartered in London.
Delaware Investments offers a full range of mutual funds. We also manage
investments for variable annuity products, unit investment trusts and
closed-end funds, and offer retirement plan services for individuals and
businesses.
Delaware manages more than $42 billion in mutual fund assets and
institutional advisory accounts for more than half-a-million investors. We're
part of a global financial service and investment management business owned by
Lincoln Financial Group, whose subsidiaries manage more than $120 billion in
assets.
Table of Contents
LETTER TO SHAREHOLDERS Page 1
PORTFOLIO MANAGER'S REVIEW Page 3
Strategic Positioning and Outlook Page 4
Tax-Free Idaho Fund Page 4
Tax-Free Iowa Fund Page 5
Tax-Free Kansas Fund Page 6
Tax-Free Missouri Insured Fund Page 6
Tax-Free North Dakota Fund Page 7
Tax-Free Oregon Insured Fund Page 8
Tax-Free Washington Insured Fund Page 9
Tax-Free Wisconsin Fund Page 10
PERFORMANCE SUMMARY Page 11
STATEMENTS OF NET ASSETS Page 14
FINANCIAL HIGHLIGHTS Page 30
tax-exempt
income
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for tax-exempt
July 6, 1998 income
1
Dear Shareholder:
IT GIVES US GREAT PLEASURE TO REPORT that Delaware Investments' single-state
municipal bond funds from the Great Plains to the Pacific Coast provided
competitive results for the first half of fiscal 1998.
Most states had high credit ratings and benefited from a healthy U.S.
economy, low inflation and rising tax revenues between January and June. Except
in North Dakota and Washington, state bond supplies increased dramatically.
The amount of municipal bonds coming to market during the first half of
fiscal 1998 reached a torrid pace as state and local governments across America
took advantage of record low interest rates to refinance old debt and start new
projects. More than $146 billion in municipal bonds were issued nationwide
between January and June, a 50.7% increase from a year earlier, according to The
Bond Buyer, a trade publication.
This huge increase gave your Funds' portfolio manager Elizabeth H. Howell
ample opportunity to select new bonds for many of the Funds. However, the
bonanza of new issuance was difficult for some state markets to absorb, and
municipal bond prices were generally flat. In most states, income has been the
dominant component of return.
Still, we view the municipal debt market's current prospects as compelling,
especially when viewed against taxable fixed-income alternatives. Yields on
longer term municipal bonds averaged more than 90% of U.S. Treasury bond yields
as of June 30, a level not seen since the ill-fated flat tax debate in
Washington, D.C. two years ago. We see this as a temporary condition resulting
from a large increase in bond supplies.
Cash flows into municipal bond mutual funds have accelerated in recent months
as some equity investors have
CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------------------------
Six Months Ended
June 30, 1998
- --------------------------------------------------------------------------------
Tax-Free Idaho Fund A Class +2.55%
Tax-Free Iowa Fund A Class +2.41%
Tax-Free Kansas Fund A Class +2.76%
Tax-Free North Dakota Fund A Class +2.70%
Tax-Free Wisconsin Fund A Class +2.19%
Lehman Brothers Municipal Bond Index +2.69%
- --------------------------------------------------------------------------------
Tax-Free Missouri Insured Fund A Class +2.24%
Tax-Free Oregon Insured Fund A Class +2.73%
Tax-Free Washington Insured Fund A Class +2.78%
Lehman Brothers Insured Municipal Bond Index +2.69%
- --------------------------------------------------------------------------------
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. The unmanaged
Lehman Brothers Indexes are composed of bonds with a variety of quality
ratings from many states. Complete performance and sales charge information
for all Funds can be found on pages 11 to 13.
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2
sought to diversify their portfolios, reduce risk and minimize their income
tax burden. For the second calendar quarter of 1998, amid increased stock
market volatility, the total return of the average single-state municipal bond
fund - +1.34% - outpaced that of the average equity fund (-0.29%), according
to Lipper Analytical Services.
Such an event is unusual and illustrates the tempering effect that a
municipal bond fund can have on a prudently balanced portfolio. We encourage
you to review your asset allocation plan with your financial and tax advisers
to see if you might benefit from increasing your position in a single-state
tax-exempt fund.
This past April, Americans paid more income taxes than ever, helping the
federal government balance its books for the first time since 1969. In fact,
since 1993 the amount of income tax paid to the Internal Revenue Service by
individuals has grown at an average annual pace of 18% while personal income
has grown only 6% a year, federal statistics show.
Investing in state municipal bonds gives you an opportunity to take charge
of your tax situation and participate in the development of the state where
you reside. It is our belief that as the nation's population enters the 21st
Century, more people will turn to tax-savvy investment strategies to protect
and keep more of what they earn.
Sincerely,
WAYNE A. STORK
Chairman
JEFFREY J. NICK
President and Chief Executive Officer
discipline
TAX-EQUIVALENT YIELDS
EIGHT STATES VS. U.S. TREASURIES Tax-Equivalent
Yields
Idaho 9.29%
Iowa, Kansas & Washington 8.53%
Missouri 9.07%
North Dakota 9.69%
Oregon 9.37%
Wisconsin 9.16%
U.S. Treasuries 5.65%
The adjacent chart shows how much an investor in the highest federal tax
bracket (39.6%) would have to earn from a taxable investment to match the
income potential of long-term municipal bonds in each respective state.
Yields as of 6/30/98 for 30-year, medium quality general obligation and/or
revenue bonds. Municipal bonds vary in quality and unlike U.S. Treasuries are
not guaranteed by the U.S. government. This illustration is not intended to
reflect the current 30-day SEC yield of any Delaware Investments mutual fund.
Source: Bloomberg Business News.
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3
Portfolio Manager's Review
BY ELIZABETH H. HOWELL
Vice President/Senior Portfolio Manager
July 10, 1998
Municipal bonds did not rally as much as Treasuries during the first half of
fiscal 1998 primarily because of a huge increase in state bond supplies. The
yield on 30-year U.S. Treasury bonds fell to 5.65% as of June 30, the lowest
level since the early 1970s.
Still, real interest rates after inflation remain high. If one subtracts
the U.S. Consumer Price Index (1.7%) from 10-year Treasury bond yields, the
pre-tax yield is nearly 4%, the highest level since late 1994.
Given the probable tempering effects of the Asian slump on the U.S.
economy, the Federal Reserve Board is likely to maintain its current interest
rate policy, in our view. This makes a solid case for bonds' income and total
return potential, especially for tax-sensitive investors seeking to diversify
their portfolios.
Medium-quality, 30-year general obligation municipal bonds in most states
provided a taxable equivalent yield of more than 9% as of June 30 for
investors in the 39.6% federal tax bracket. After factoring out inflation,
long-term municipal bonds provided an attractive annualized real yield of
7.5%. For highly taxed investors, that compares to an after-inflation,
after-tax yield of 1.59% for Treasuries.
The major issue facing the tax-exempt market has been a temporary excess of
new supply as municipalities seek to refinance their obligations.
Municipal bonds also underperformed Treasuries during the first half of
fiscal 1998 as foreign investors sought U.S. Treasuries as a safe haven when
volatility rocked Asian stock and bond markets. Foreigners generally don't buy
our state and local debt because they don't qualify for the tax breaks
municipal bonds provide.
Since January, we positioned each of the Funds to benefit from declining
long-term interest rates. Lower quality bonds tended to outperform bonds with
AAA ratings during the first half of 1998 as a strong economy helped
municipalities meet their obligations and led to selected credit upgrades.
In managing each Fund, we seek good structure - an effective combination of
average coupon, call date, and effective maturity that represents each
portfolio's mathematical underpinnings. As interest rates fall, we believe it
is important to maintain a portfolio with good call protection features. We
anticipate favorable economic conditions may drive down long-term interest
rates through 1999.
overview
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4
STRATEGIC POSITIONING
AND OUTLOOK
Tax-Free Idaho Fund
Tax-Free Idaho Fund provided a total return of +2.55% for the six months ended
June 30, 1998 (for Class A shares at net asset value with distributions
reinvested). The Fund's results for the period were higher than the +2.32%
average of the Fund's 74 peers, as measured by Lipper Analytical Services.
In fiscal 1998, we have kept the Fund's duration slightly longer than other
comparable mutual funds. This has allowed the Fund to provide modestly
higher-than-average income and capture most of the municipal market's total
return potential.
We have also done well since January because Tax-Free Idaho Fund held
unrated bonds and bonds rated BBB. Prices of these securities rose more than
those of higher quality bonds during the first half as the state's economy
remained strong. Investors were attracted by relatively higher yields.
Many of the bond issues available to Idaho investors are for projects in
small towns. These issues are often too small to make it worthwhile to obtain
credit ratings from agencies such as Moody's or Standard & Poor's. 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 with
unrated bonds that produce an above-average interest rate and rated bonds that
can contribute to total return.
As of mid-year, Idaho's unemployment rate was 4.7%, the lowest level in
more than three decades. State economists expect Idaho's economy to grow
faster than the national economy over the next several years. A major
short-term uncertainty, however, is the high technology sector because of
slumping demand and competition with Asia.
We are pleased to report that your Fund's positive cash flow since January
idaho
<TABLE>
<CAPTION>
PORTFOLIO HIGHLIGHTS AND QUALITY
June 30, 1998
Tax-Free Tax-Free
Tax-Free Tax-Free Tax-Free North Wisconsin
Idaho Fund Iowa Fund Kansas Fund Dakota Fund Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
AAA 26.0% 26.0% 35.3% 31.9% 39.0%
AA 7.2% 0% 14.1% 27.7% 6.3%
A 24.0% 46.1% 9.6% 13.6% 15.9%
BBB 29.6% 15.6% 15.6% 11.8% 8.8%
B & Unrated 13.2% 12.3% 25.4% 15.0% 30.0%
- --------------------------------------------------------------------------------------------------------------
Average Effective Maturity 8.9 years 8.3 years 9.0 years 8.7 years 10.8 years
Average Effective Duration 7.1 years 6.1 years 6.5 years 6.3 years 8.1 years
AMT Income* 13.39% 6.21% 18.62% 14.31% 20.53%
Current 30-Day SEC Yield
(A Class) 4.18% 3.82% 4.07% 4.08% 4.02%
(B and C Classes) 3.60% 3.22% 3.47%** 3.49% 3.43%***
- --------------------------------------------------------------------------------------------------------------
* Percentage of income generated for the six months ended June 30, 1998
that was subject to the federal alternative minimum tax.
** 3.48% for Class C shares. ***3.41% for Class C shares. Past performance
does not guarantee future results.
</TABLE>
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5
enabled us to add bonds with strong income potential as the supply of Idaho
securities increased 35% from a year ago. Overall, the state's municipalities
issued $354 million in bonds for the first six months of 1998, a relatively
modest amount compared to most states, according to The Bond Buyer. This makes
managing an Idaho-focused portfolio more challenging than many other states.
However, our strategy has produced excellent results since inception.
Since January, we have modestly increased our weighting in the pollution
control and higher education sectors and reduced our weighting in hospital and
housing bonds. We exchanged some hospital bonds with higher coupons for
discount hospital bonds that we believe offer superior total return potential.
Tax-Free Iowa Fund
Tax-Free Iowa Fund provided a total return of +2.41% for the six months ended
June 30, 1998 (for Class A shares at net asset value with distributions
reinvested). This outpaced the +2.32% average return of the Fund's 74-fund
peer group for the period, as measured by Lipper Analytical Services.
Between January and June, bond supplies increased 50.1% to $978 million
from a year ago, according to The Bond Buyer. Since Iowa municipalities issue
relatively few bonds compared to other states, this new issuance was easily
absorbed by the market. We used this buying opportunity to increase the amount
of your Fund's net assets invested in Iowa bonds from 51.4% at the start of
fiscal 1998 to 60% as of June 30.
We reduced the Fund's reliance on territorial bonds (bonds issued by Puerto
Rico, Guam and the Virgin Islands). 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 yield
objectives. Few bonds are issued in Iowa, and not all are exempt from both
federal and state income taxes - the type of bonds we seek for your Fund's
portfolio.
Economic growth in Iowa was robust during the first half of fiscal 1998.
The state's unemployment rate was 2.3% as of mid-year, among the lowest in the
country. In recent years, Iowa has seen a shift in growth toward
domestic-oriented high technology industries, a trend we believe can continue.
This summer, grain farmers were relieved to learn that Washington will
permit food shipments to India and Pakistan despite the fact that the U.S.
imposed economic sanctions in the wake of each country's nuclear testing. Iowa
is first in corn and soybean production in the U.S.
For the balance of 1998, investor demand appears likely to remain high in
Iowa. As of June 30, long-term Iowa bonds yielded 92% of Treasuries, a level
we believe is exceptionally attractive.
iowa
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6
Tax-Free Kansas Fund
Tax-Free Kansas Fund provided a relatively strong total return of +2.76% for
the six months ended June 30, 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 74 peers (+2.32%).
Bond supplies in Kansas rose a sharp 82.8% during the first half of fiscal
1998 to $1.15 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.
The state's economy, while strong, has generally not been quite as robust
as some neighboring states. The jobless rate was a low 3.5% as of mid-year,
the lowest since 1979.
Kansas grows more wheat than any other state, and wheat prices have fallen
sharply amid the anticipated surge in supply. This year's rise in the U.S.
dollar has made it more difficult for grain farmers to profitably export what
they reap.
Since January, we have increased the Fund's average duration modestly to
6.5 years in anticipation that interest rates will continue to fall through
the remainder of 1998.
Lower quality and unrated bonds generally provided the highest returns
during the first half. Your Fund had more than one-quarter of its assets in
unrated bonds during the first half of 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 with unrated bonds
that produce an above-average interest rate and rated bonds that can
contribute to total return.
As of June 30, long-term Kansas bonds yielded 92% of Treasuries, a level
that in our view is compelling. We believe the relatively high income
potential and limited bond supply in the state, set against a backdrop of low
inflation, can help the Fund generate attractive total returns over the next
six months.
Tax-Free Missouri
Insured Fund
Missouri Insured Fund provided a total return of +2.24% for the six months
ended June 30, 1998 (for Class A shares at net asset value with distributions
reinvested). This was slightly less than the +2.26% total return provided by
the average of 23 funds specializing in Missouri bonds. Many of these
competing funds invest in lower rated uninsured bonds, which tend to offer
higher yields but lack elements of safety.
The Fund offered a favorable risk profile relative to the return we were
able to generate. Missouri Insured Fund invests exclusively in bonds that are
rated AAA by Moody's Investors Services or Standard & Poor's.
One factor that affected our results was our relatively strong
weighting in housing bonds. Housing bonds, because of
kansas
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7
the risk of prepayment from underlying mortgages, tend to yield more than
bonds from other sectors that have similar ratings and maturities.
Most of Tax-Free Missouri Insured Fund's housing sector holdings at the
start of fiscal 1998 were bonds that finance multifamily dwellings, which tend
to have lower levels of refinancing activity than single-family home
mortgages. Historically, municipal housing bonds have benefited from less
prepayment activity than taxable housing bonds.
Market appreciation reduced the average effective duration of Tax-Free
Missouri Insured Fund by several months to 6.5 years as of June 30.
The Fund's positioning is about a half a year
shorter than our peers as well as the Lehman Brothers Insured Municipal Bond
Index, the Fund's unmanaged benchmark.
New bond supplies in Missouri rose substantially during the first six
months of 1998. The state's municipalities issued more than $2.4 billion in
bonds between January and June, an 83.2% percent increase from year ago
levels, according to The Bond Buyer. This additional supply was difficult for
the market to absorb. Much of this supply was uninsured.
For the balance of the year, 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 Missouri
bonds were 92% of 30-year U.S. Treasury bonds yields as of June 30.
Tax-Free North Dakota Fund
For the six months ended June 30, 1998, Tax-Free North Dakota Fund provided a
total return of +2.70% (for Class A shares at net asset value with
distributions reinvested).
The Fund did well relative to its benchmark and peers because we positioned
the portfolio for a gradual decline in interest rates. Our average duration
was longer than the Lehman Brothers Municipal Bond Index for the period. This
allowed us to generate an attractive level of income and participate in the
bond market's spring rally.
The supply of new bonds issued in North Dakota remained very limited,
reflecting the state's small population - about 642,000 people. Only $371.6
million in new bonds were issued between January and June, a 15% increase from
a year earlier, according to The Bond Buyer.
Six of North Dakota's 10 largest employers are health care providers, state
figures show. At the start of fiscal 1998 Tax-Free North Dakota Fund's single
largest sector weighting was hospital bonds, including bonds issued by the St.
Alexius Health System.
We are attracted to health care bonds because this sector generally offers
higher yields. We believe selected hospital bonds may also benefit from
ratings upgrades as the industry consolidates.
North Dakota's unemployment rate was just 2.0% as of mid-year, one of the
lowest rates of joblessness in the country. The state's increased economic
diversification of recent years is helping it weather current
missouri
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slumps in the natural resources and agricultural sectors.
High quality North Dakota bonds remain the dominant element of
Tax-Free North Dakota's Fund's portfolio. However, since January we have added
some medium quality bonds to increase the Fund's income potential in the
months ahead. Still, as of June 30, nearly 60% of Tax-Free North Dakota Fund's
portfolio was invested in bonds rated AAA and AA, the two highest credit
ratings available.
Tax-Free Oregon Insured Fund
Tax-Free Oregon Insured Fund provided an above-average total return of +2.73%
for the six months ended June 30, 1998 (for Class A shares at net asset value
with reinvested distributions).
The Fund's performance for the period outpaced that of its unmanaged
benchmark and the average of 25 funds specializing in Oregon bonds (+2.21%).
Tax-Free Oregon Fund's relatively long duration and focus on insured bonds,
which tend to respond more rapidly to interest rate moves than non-insured
bonds, enhanced our results.
Bond supplies in Oregon increased dramatically during the first half of
fiscal 1998. More than $1 billion worth of Oregon bonds have been issued since
January, a 75% increase from year ago levels, according to The Bond Buyer.
Since Oregon has relatively high tax rates and has historically issued a
relatively limited number of bonds for a state of its size, investors easily
absorbed the increase.
To provide an extra 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.
north
dakota
<TABLE>
<CAPTION>
PORTFOLIO HIGHLIGHTS AND ASSET MIX
June 30, 1998
Tax-Free Missouri Tax-Free Oregon Tax-Free Washington
Insured Fund Insured Fund Insured Fund
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Housing 16.9% 3.8% 23.9%
Hospital 23.9% 7.1% 13.7%
General Obligation 7.8% 19.5% 16.8%
Power Authority 8.4% 8.2% 8.2%
Pre-Refunded 20.3% 21.8% 0
Education 3.4% 16.5% 15.1%
Industrial 1.8% 0 2.1%
Other Revenue Bonds 6.4% 0 0%
- --------------------------------------------------------------------------------------------
Average Effective Maturity 8.7 years 9.1 years 8.6 years
Average Effective Duration 6.5 years 7.4 years 6.4 years
AMT Income* 18.75% 11.27% 17.38%
Current 30-Day SEC Yield
(A Class) 3.87% 3.90% 4.37%
(B and C Classes) 3.28%** 3.30% 3.78%***
- --------------------------------------------------------------------------------------------
* Percentage of income generated for the six months ended June 30, 1998 that
was subject to the federal alternative minimum tax.
** 3.27% for Class C shares. ***3.79% for Class C shares. Past performance
does not guarantee future results.
</TABLE>
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9
General obligation bonds issued by the State of Oregon were downgraded by
S&P on July 7 from AA+ to AA. Since your Fund did not own any state-issued
general obligation bonds at the time, we were unaffected by this change. All
of our locally-issued bonds are insured, and therefore rated AAA.
Our emphasis has been on bonds with discount coupons, good call projection,
and long maturities. Since January, we have reduced our positioning in 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.
Although Oregon's natural resource exports such as paper have slowed, the
state's economy appears to be holding up well. Strength in housing and
consumer spending are offsetting weakness in factory activity, according to a
June report by the Twelfth Federal Reserve District. Two-thirds of business
respondents to a spring Fed survey expect overall economic activity to remain
stronger in the Pacific Northwest than the rest of the nation for the balance
of 1998.
Tax-Free Washington
Insured Fund
Tax-Free Washington Insured Fund provided strong results for the first half of
fiscal 1998. For the six months ended June 30, 1998, the Fund's total return
was +2.78% (for Class A shares at net asset value with reinvested
distributions). This was higher than the Fund's benchmark and the +2.66%
average return of eight funds specializing in Washington bonds.
After a surge of new issuance in 1997, new bond supplies in the State of
Washington increased only marginally in the first six months of 1998. Some
$2.7 billion in bonds were issued, a 2.6% 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 many other states.
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 was longer than that of its
Lipper peer group during the first half. This allowed us to achieve a
relatively high total rate of return as bond prices rose.
Our emphasis was on bonds with discount coupons, good call projection, and
long maturities. 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.
Since January, we have reduced our positioning in local general obligation
bonds and housing bonds and increased our 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 our exposure
to prepayments, especially in the single-family home segment.
In our opinion, Washington's economy is likely to remain strong for the
rest of 1998 even though export-oriented
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10
industries such as aviation, paper and high technology have been feeling the
effects of slumping demand from emerging Pacific Rim markets. Asian exports
make up only 9 percent of Washington's gross state product, according to a
federal government report this past spring. The state's unemployment rate as
of mid-year was a low 4.4%, essentially the same as the national average.
Domestic industries such as housing appear to be booming.
Tax-Free Wisconsin Fund
For the six months ended June 30, 1998, Tax-Free Wisconsin Fund provided a
total return of +2.19% (for Class A shares at net asset value with
distributions reinvested). This was slightly less than the average of the
Fund's 74 peers. We attribute the Fund's performance to our investments in
unrated bonds that provided above-average income but did appreciate as much as
high quality bonds during the first half of 1998.
More than $2.4 billion worth of new bonds were issued in Wisconsin between
January and June, a 33.5% increase from the prior year, according to The Bond
Buyer. During the period, the credit quality of most Wisconsin municipalities
was excellent. The state's general obligation bonds have a high credit rating
of AA. However, only a few select issuers in the state offer bonds that are
exempt from both federal and state income taxes - the type of bonds we seek
for your Fund's portfolio.
We used this year's increase in supply to add more Wisconsin bonds to your
Fund's portfolio. Since January, we have sold some Puerto Rico territorial
bonds in the higher education and industrial development sectors that had
appreciated in value. These bonds amounted to about 4% of your Fund's net
assets. 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 yield objectives.
As of June 30, about one-third of your Fund's net assets were invested in
unrated bonds. This reflects the fact that many Wisconsin bonds finance
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. Those bonds that are deemed
satisfactory often carry a higher-than-average coupon.
Unrated bonds also tend to fluctuate less in price when the bond market is
weak, which can help preserve principal. Our approach to managing the
portfolio is to 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 2.7% unemployment rate as of mid-year was among the lowest in
the country, and we believe the state's economic prospects remain bright. The
Wisconsin Department of Revenue expects state job growth to average 2.2% this
year and taper off to 1.3% in 1999. Personal income in Wisconsin is expected to
rise 5.3% this year to $133.7 billion.
washington
wisconsin
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Performance Summary
TAX-FREE IDAHO FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1998
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 1/4/95)
Excluding Sales Charge +9.86% +9.28%
Including Sales Charge +8.66% +5.17%
- --------------------------------------------------------------------------------
Class B (Est. 3/16/95)
Excluding Sales Charge +7.77% +8.53%
Including Sales Charge +7.00% +4.53%
- --------------------------------------------------------------------------------
Class C (Est. 1/11/95)
Excluding Sales Charge +8.85% +8.48%
Including Sales Charge +8.85% +7.48%
TAX-FREE IOWA FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1998
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 9/1/93)
Excluding Sales Charge +5.12% +8.24%
Including Sales Charge +4.29% +4.17%
- --------------------------------------------------------------------------------
Class B (Est. 3/24/95)
Excluding Sales Charge +7.02% +7.43%
Including Sales Charge +6.23% +3.43%
- --------------------------------------------------------------------------------
Class C (Est. 1/4/95)
Excluding Sales Charge +8.93% +7.41%
Including Sales Charge +8.93% +6.41%
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 voluntary
expense limitations in effect at the time. Returns would have been lower
without the limitations.
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
12
TAX-FREE KANSAS FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1998
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 11/30/92)
Excluding Sales Charge +7.43% +6.37% +9.62%
Including Sales Charge +6.70% +5.57% +5.54%
- --------------------------------------------------------------------------------
Class B (Est. 4/8/95)
Excluding Sales Charge +7.11% +8.78%
Including Sales Charge +6.31% +4.78%
- --------------------------------------------------------------------------------
Class C (Est. 4/12/95)
Excluding Sales Charge +6.93% +8.79%
Including Sales Charge +6.93% +7.79%
TAX-FREE MISSOURI INSURED FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1998
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 11/2/92)
Excluding Sales Charge +6.91% +5.96% +8.37%
Including Sales Charge +6.19% +5.15% +4.27%
- --------------------------------------------------------------------------------
Class B (Est. 3/12/94)
Excluding Sales Charge +5.73% +7.58%
Including Sales Charge +5.34% +3.58%
- --------------------------------------------------------------------------------
Class C (Est. 11/11/95)
Excluding Sales Charge +5.70% +7.53%
Including Sales Charge +5.70% +6.53%
TAX-FREE NORTH DAKOTA FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1998
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 4/1/91)
Excluding Sales Charge +7.87% +8.65%
Including Sales Charge +7.30% +4.55%
- --------------------------------------------------------------------------------
Class B (Est. 5/10/94)
Excluding Sales Charge +7.52% +7.90%
Including Sales Charge +7.13% +3.90%
- --------------------------------------------------------------------------------
Class C (Est. 7/29/95)
Excluding Sales Charge +6.88% +7.82%
Including Sales Charge +6.88% +6.82%
Please see page 11 for important additional information. All performance
includes reinvestment of distributions and applicable sales charges as
described on page 11. Past performance is not a guarantee
of future results.
<PAGE>
for tax-exempt
income
13
TAX-FREE OREGON INSURED FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1998
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 8/1/93)
Excluding Sales Charge +5.90% +9.38%
Including Sales Charge +5.08% +5.24%
- --------------------------------------------------------------------------------
Class B (Est. 3/12/94)
Excluding Sales Charge +5.71% +8.58%
Including Sales Charge +5.32% +4.58%
- --------------------------------------------------------------------------------
Class C (Est. 7/7/95)
Excluding Sales Charge +6.64% +8.54%
Including Sales Charge +6.64% +7.54%
TAX-FREE WASHINGTON INSURED FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1998
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 8/1/93)
Excluding Sales Charge +7.28% +9.53%
Including Sales Charge +6.45% +5.46%
- --------------------------------------------------------------------------------
Class B (Est. 10/24/94)
Excluding Sales Charge +6.90% +8.80%
Including Sales Charge +5.90% +4.80%
- --------------------------------------------------------------------------------
Class C (Est. 4/21/95)
Excluding Sales Charge +7.21% +8.79%
Including Sales Charge +7.21% +7.79%
TAX-FREE WISCONSIN FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1998
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 9/1/93)
Excluding Sales Charge +5.08% +8.11%
Including Sales Charge +4.25% +4.03%
- --------------------------------------------------------------------------------
Class B (Est. 4/22/95)
Excluding Sales Charge +6.29% +7.43%
Including Sales Charge +5.46% +3.43%
- --------------------------------------------------------------------------------
Class C (Est. 3/28/95)
Excluding Sales Charge +6.39% +7.38%
Including Sales Charge +6.39% +6.38%
Please see page 11 for important additional information. All performance
includes reinvestment of distributions and applicable sales charges as
described on page 11. Past performance is not a guarantee of future results.
<PAGE>
14 for tax-exempt income
Financial Statements
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE IDAHO FUND
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS - 98.25%
GENERAL OBLIGATION BONDS - 9.32%
Ada & Canyon County School District #2
5.60% 7/30/12 .................................... $1,325,000 $1,422,017
Bonner County Local Improvement District #93-1
6.20% 4/30/05 .................................... 150,000 158,262
Bonner County Local Improvement District #93-2
6.35% 4/30/06 .................................... 185,000 195,147
Bonner County Local Improvement District #93-3
6.40% 4/30/07 .................................... 195,000 205,764
Bonner County Local Improvement District #93-4
6.50% 4/30/08 .................................... 110,000 116,056
Bonner County Local Improvement District #93-5
6.50% 4/30/10 .................................... 100,000 105,505
Canyon County Independent School District #131
(MBIA) 5.50% 7/30/12 ............................. 100,000 104,298
Coeur D'Alene Local Improvement District #6
Series 1995 6.00% 7/1/09 ......................... 85,000 90,925
Coeur D'Alene Local Improvement District #6
Series 1996 6.05% 7/1/10 ......................... 90,000 95,975
Coeur D'Alene Local Improvement District #6
Series 1997 6.10% 7/1/12 ......................... 40,000 42,799
Coeur D'Alene Local Improvement District #6
Series 1998 6.10% 7/1/14 ......................... 45,000 47,880
Madison County (FSA) 5.40% 8/1/14 ................... 300,000 309,039
Puerto Rico Commonwealth 5.38% 7/1/25 ............... 1,250,000 1,262,850
Sun Valley 5.20% 8/1/09 ............................. 180,000 187,591
----------
4,344,108
----------
HIGHER EDUCATION REVENUE BONDS - 6.39%
Boise State University Idaho Revenue Refunding
& Improvement Student Fee (FSA)
5.00% 4/1/23 ..................................... 1,000,000 987,330
Idaho State University Student Fee Bonds
(MBIA) 5.80% 4/1/20 .............................. 550,000 581,702
University Of Idaho (FSA) 5.85% 4/1/11 .............. 1,300,000 1,409,395
----------
2,978,427
----------
HOSPITAL REVENUE BONDS - 13.77%
Idaho Health Facilities Authority Hospital Holy Cross
Health System Revenue 5.00% 12/1/28 .............. 900,000 869,940
Idaho Health Facilities Authority Revenue -
Bonner General Hospital 6.50% 10/1/28 ............ 1,500,000 1,566,720
Idaho Health Facilities Revenue Bannock Medical
Center 6.13% 5/1/25 .............................. 1,500,000 1,593,645
Idaho Health Facilities Revenue Bannock Medical
Center 6.38% 5/1/17 .............................. 1,695,000 1,861,398
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Idaho Magic Valley Health Facilities (AMBAC)
5.63% 12/1/13 ................................. $ 500,000 $ 524,465
-----------
6,416,168
-----------
HOUSING REVENUE BONDS - 9.90%
Idaho State Housing Agency Multi-Family Place
Plaza (FHA) 6.50% 12/1/36 ..................... 990,000 1,063,211
Idaho State Housing Finance Authority Single
Family Series E (FHA) 6.35% 7/1/15 ............ 350,000 373,678
Idaho State Housing Finance Authority Single
Family Series A1 6.85% 7/1/12 ................. 90,000 96,962
Idaho State Housing Finance Authority Single
Family Housing Series G-2 6.15% 7/1/15 ........ 1,500,000 1,580,340
Idaho State Housing Finance Authority Single
Family Series A (FHA) 6.10% 7/1/16 ............ 370,000 390,428
Idaho State Housing Finance Authority Single
Family Series A (AMBAC) 6.05% 7/1/13 .......... 445,000 471,326
Idaho State Housing Finance Authority Single
Family Series E 6.60% 7/1/11 .................. 140,000 152,438
Idaho State Housing Finance Authority Single
Family Series B (FHA) 6.45% 7/1/15 ............ 200,000 214,284
Idaho State Housing Finance Authority Single
Family Series C-2 6.35% 7/1/15 ................ 255,000 271,136
-----------
4,613,803
-----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 7.20%
Idaho State Water Resource Boise Water
7.25% 12/1/21 ................................. 100,000 109,435
Meridan EDA for Hi-Micro 5.85% 8/15/11 ........... 1,250,000 1,314,088
Pocatello Development Authority Tax Increment
Revenue 7.25% 12/1/08 ......................... 1,700,000 1,767,932
Puerto Rico Industrial Medical Environmental
Revenue - PepsiCo Project
6.25% 11/15/13 ................................ 150,000 164,735
-----------
3,356,190
-----------
LEASE/CERTIFICATES OF PARTICIPATION - 2.25%
North Idaho College Dorm Housing - Certificates of
Participation 6.45% 10/1/16 ................... 1,000,000 1,048,770
-----------
1,048,770
-----------
POLLUTION CONTROL REVENUE BONDS - 21.54%
Nez Perce County, Idaho Pollution Control Revenue
Refunding - Potlatch Project 6.00% 10/1/24 .... 5,500,000 5,863,275
Power County Idaho Pollution Control Revenue
FMC Project 5.63% 10/1/14 ..................... 4,050,000 4,173,809
-----------
10,037,084
-----------
<PAGE>
for tax-exempt income 15
TAX-FREE IDAHO FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
POWER AUTHORITY REVENUE BONDS - 3.33%
PUERTO RICO ELECTRIC POWER AUTHORITY (FSA)
6.00% 7/1/16 ................................ $ 100,000 $ 108,721
Puerto Rico Electric Power Authority
Series X 5.50% 7/1/25 ....................... 1,415,000 1,441,234
-----------
1,549,955
-----------
* PRE-REFUNDED BONDS - 1.63%
Gooding Lincoln Independent School District #231
6.30% 2/1/14-04 ............................. 100,000 110,589
Idaho St. Holy Cross - Alphonsus Health Facility
6.25% 12/1/22-02 ............................ 590,000 651,218
-----------
761,807
-----------
SPECIAL UTILITY REVENUE BONDS - 0.33%
Puerto Rico Telephone Revenue Authority
5.50% 1/1/22 ................................ 150,000 152,862
-----------
152,862
-----------
TRANSPORTATION REVENUE BONDS - 0.75%
Guam Highway (FSA) 6.30% 5/1/12 ................ 150,000 162,338
Puerto Rico Highway Revenue
Series W 5.50% 7/1/15 ....................... 175,000 185,969
-----------
348,307
-----------
WATER & SEWER REVENUE BONDS - 2.91%
Chubbuck Water Revenue 6.35% 4/1/08 ............ 125,000 133,654
Chubbuck Water Revenue 6.40% 4/1/10 ............ 135,000 145,203
McCall Water Revenue (FSA) 5.85% 3/1/16 ........ 1,000,000 1,079,440
-----------
1,358,297
-----------
OTHER REVENUE BONDS - 18.93%
Ammon, Idaho Urban Renewal Agency Revenue
6.25% 8/1/18 ................................ 445,000 476,359
Ammon, Idaho Urban Renewal Tax Increment Revenue
5.88% 8/1/17 ................................ 350,000 368,452
Boise Urban Renewal Agency Tax Increment Revenue
6.13% 9/1/15 ................................ 2,500,000 2,674,300
Boise Urban Renewal Tax Increment Revenue
6.13% 9/1/15 ................................ 2,040,000 2,182,224
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 -
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 1,438,065
Puerto Rico Public Building Authority Revenue
Series M 5.50% 7/1/21 ....................... 1,175,000 1,197,478
-----------
8,823,383
-----------
TOTAL MUNICIPAL BONDS (COST $43,166,302) ....... 45,789,161
-----------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
----------------------
SHORT-TERM INVESTMENTS - 0.95%
Norwest Advantage Municipal Money Market Fund ...........443,524 $ 443,524
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $443,524) ............ 443,524
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED
(COST $43,609,826) - 99.20% .......................... $46,232,685
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.80% . 370,596
-----------
NET ASSETS APPLICABLE TO 4,063,495 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% .............. $46,603,281
===========
NET ASSET VALUE - TAX-FREE IDAHO FUND A CLASS
($37,642,138 / 3,281,410) ............................ $ 11.47
===========
NET ASSET VALUE - TAX-FREE IDAHO FUND B CLASS
($7,428,833 / 648,323) ............................... $ 11.46
===========
NET ASSET VALUE - TAX-FREE IDAHO FUND C CLASS
($1,532,310 / 133,762) ............................... $ 11.46
===========
COMPONENTS OF NET ASSETS AT JUNE 30, 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 the Tax-Free
Idaho Fund B Class and 10,000,000,000 shares
allocated to the Tax-Free Idaho Fund C Class ........... $44,012,502
Accumulated net realized loss on investments ............ (32,080)
Net unrealized appreciation of investments .............. 2,622,859
-----------
Total net assets ........................................ $46,603,281
===========
- ------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
the bond is pre-refunded
- ----------------------
Summary of Abbreviations:
AMBAC - Insured by the Ambac Indemnity Corporation
FHA - Insured by the Federal Housing Authority
FSA - Insured by the 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) ............................. $ 11.47
Sales charge (3.75% of offering price, or 3.92% of amount
invested per share) (B) .............................. 0.45
-----------
Offering price .......................................... $ 11.92
===========
- ----------------------
(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>
16 for tax-exempt income
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE IOWA FUND
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------
MUNICIPAL BONDS - 98.30%
HIGHER EDUCATION REVENUE BONDS - 5.19%
Iowa Center Community College Dorm
Merged Area V 5.45% 6/1/18 ........................... $ 545,000 $ 546,520
State University of Iowa - Board Of Regents
5.30% 7/1/13 ...................................... 500,000 523,745
University of North Iowa - Board Of Regents
5.30% 7/1/13 ...................................... 150,000 157,124
University Of Puerto Rico Revenue (MBIA)
5.50% 6/1/15 ...................................... 1,000,000 1,051,660
----------
2,279,049
----------
HOSPITAL REVENUE BONDS - 3.00%
Puerto Rico Hospital Revenue - Hospital Auxilio
Mutuo Obligated Group (MBIA)
6.25% 7/1/24 ...................................... 1,200,000 1,319,988
----------
1,319,988
----------
HOUSING REVENUE BONDS - 2.40%
Puerto Rico Housing Bank & Finance Agency (GNMA)
6.25% 4/1/29 ...................................... 990,000 1,054,271
----------
1,054,271
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 19.50%
Iowa Finance Authority - Underground Storage Tank
Revenue 5.125% 7/1/14 ............................. 5,500,000 5,621,000
Lee County Urban Renewal Revenue - Keokuk Waste
Treatment 6.40% 6/1/07 ............................ 500,000 533,125
Puerto Rico Commonwealth Industrial Development
General Purpose Revenue
Series B 5.375% 7/1/16 ............................ 1,000,000 1,024,590
Puerto Rico Port Authority Revenue, Special Facility -
American Airlines 6.25% 6/1/26 .................... 1,275,000 1,387,315
----------
8,566,030
----------
POWER AUTHORITY REVENUE BONDS - 10.68%
Puerto Rico Electric Power Authority Revenue
6.00% 7/1/14 ...................................... 1,100,000 1,191,707
Puerto Rico Electric Power Authority
Revenue 6.25% 7/1/17 .............................. 1,000,000 1,094,170
Puerto Rico Electric Power Authority
Series EE 4.75% 7/1/24 ............................ 1,500,000 1,412,505
Virgin Islands Water & Power Authority Electric
System Revenue 5.30% 7/1/18 ....................... 1,000,000 990,260
----------
4,688,642
----------
* PRE-REFUNDED/ESCROWED TO
MATURITY BONDS - 6.65%
Virgin Islands Public Finance Authority (Escrowed
to maturity) 7.30% 10/1/18-18 ..................... 1,500,000 1,891,005
Virgin Islands Public Finance Authority Revenue
Sub Lien Funded Loan Notes
Series E 5.875% 10/1/18-18 ........................ 1,000,000 1,031,180
----------
2,922,185
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-------------------
MUNICIPAL BONDS (CONTINUED)
TRANSPORTATION REVENUE BONDS - 8.23%
Guam Highway (FSA) 6.30% 5/1/12 ............. $ 1,950,000 $ 2,110,388
Puerto Rico Commonwealth Highway &
Transportation Revenue 5.25% 7/1/21 ...... 1,500,000 1,504,320
-----------
3,614,708
-----------
UTILITY REVENUE BONDS - 4.92%
Puerto Rico Telephone Revenue Authority
5.50% 1/1/22 ............................. 2,120,000 2,160,450
-----------
2,160,450
-----------
WATER & SEWER REVENUE BONDS - 14.20%
Iowa Finance Authority - State Revolving Fund
Revenue 5.20% 5/1/23 ..................... 2,445,000 2,466,858
Iowa Finance Authority - State Revolving Fund
Revenue 6.25% 5/1/24 ..................... 1,750,000 1,917,685
Puerto Rico Municipal Finance Authority (FSA)
6.00% 7/1/14 ............................. 1,700,000 1,850,161
-----------
6,234,704
-----------
OTHER REVENUE BONDS - 23.53%
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 4.90% 6/1/99 .......... 50,000 50,173
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.00% 6/1/00 .......... 300,000 302,148
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.10% 6/1/01 .......... 315,000 318,367
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.20% 6/1/02 .......... 330,000 334,630
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.30% 6/1/03 .......... 345,000 350,931
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.40% 6/1/04 .......... 365,000 372,362
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.50% 6/1/05 .......... 385,000 393,843
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.60% 6/1/06 .......... 405,000 415,364
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.70% 6/1/07 .......... 425,000 436,917
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.80% 6/1/08 .......... 450,000 462,560
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.90% 6/1/09 .......... 800,000 822,232
Iowa Finance Authority Revenue - Correctional
Facility Program 5.70% 6/15/14 ........... 2,000,000 2,144,600
Puerto Rico Educational Facility Revenue -
Polytechnic University 6.50% 8/1/24 ...... 665,000 725,753
Puerto Rico Public Building Authority Revenue
Series M 5.50% 7/1/21 .................... 1,100,000 1,121,043
Puerto Rico Public Building Authority Revenue
Series M 5.75% 7/1/15 .................... 1,000,000 1,041,360
Puerto Rico Public Building Authority Revenue
Series L 5.75% 7/1/16 .................... 1,000,000 1,041,960
-----------
10,334,243
-----------
TOTAL MUNICIPAL BONDS (COST $40,377,430 ) ... 43,174,270
-----------
<PAGE>
for tax-exempt income 17
TAX-FREE IOWA FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
------------------------
SHORT-TERM INVESTMENTS - 1.33%
Norwest Advantage Municipal Money Market Fund ........ 583,192 $ 583,192
------------
Total Short-Term Investments (cost $583,192) ......... 583,192
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.63%
(COST $40,960,622) ................................ $ 43,757,462
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - .37% 162,225
------------
NET ASSETS APPLICABLE TO 4,356,532 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ........... $ 43,919,687
============
NET ASSET VALUE - TAX-FREE IOWA FUND A CLASS
($39,132,944 / 3,881,731 SHARES) .................. $ 10.08
============
NET ASSET VALUE - TAX-FREE IOWA FUND B CLASS
($3,685,833 / 365,574 SHARES) ..................... $ 10.08
============
NET ASSET VALUE - TAX-FREE IOWA FUND C CLASS
($1,100,910 / 109,227 SHARES) ..................... $ 10.08
============
COMPONENTS OF NET ASSETS AT JUNE 30, 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, 1,000,000,000 shares allocated to
Tax-Free Iowa Fund C Class .......................... $ 42,894,125
Accumulated net realized loss on investments ......... (1,771,278)
Net unrealized appreciation of investments ........... 2,796,840
------------
Total Net Assets ..................................... $ 43,919,687
============
- ----------------------
* 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) $10.08
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>
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR TAX-FREE KANSAS FUND
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------
MUNICIPAL BONDS - 97.95%
GENERAL OBLIGATION BONDS - 20.89%
Allen County Unified School District #258
(AMBAC) 6.875% 9/1/10 ............................... $ 240,000 $ 291,130
Ellsworth County, Kansas Series 1 5.75% 9/1/17 ......... 250,000 265,503
Johnson County 6.125% 9/1/12 ........................... 600,000 643,386
Linn County Unified School District 5.70% 11/1/16 ...... 500,000 526,670
Maize Unified School District #266 Series 1994
(FSA) 5.875% 9/1/12 ................................. 250,000 263,988
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ........................................ 500,000 457,225
Sedgwick County Renwick Unified School District
(AMBAC) 6.15% 11/1/09 ............................... 250,000 274,808
Sedgwick County Unified School District #265
(FSA) 5.50% 10/1/13 ................................. 250,000 259,450
Shawnee County Unified School District #437
(AMBAC) 5.25% 9/1/10 ................................ 130,000 134,194
Summer County Unified School District #356
(MBIA) 5.75% 9/1/11 ................................. 250,000 266,398
----------
3,382,752
----------
HIGHER EDUCATION REVENUE BONDS - 9.94%
Kansas Development Finance Authority -
Kansas Board of Regents - Wichita State University
(AMBAC) 5.875% 6/1/17 ............................... 300,000 316,578
Puerto Rico Educational Facility Revenue -
Polytechnic University 6.50% 8/1/24 ................. 1,185,000 1,293,246
----------
1,609,824
----------
HOSPITAL REVENUE BONDS - 11.79%
Kansas Development Finance Authority Healthcare
Facility Revenue For Stormont - Vail Healthcare, Inc.
(MBIA) 5.80% 11/15/16 ............................... 250,000 267,028
Lawrence, Kansas For Lawrence Memorial Hospital
6.20% 7/1/19 ........................................ 250,000 265,353
Newton, Kansas Hospital Revenue -
Newton Healthcare Corp. .............................
Class A 5.75% 11/15/24 .............................. 250,000 252,310
Olathe, Kansas Health Facility For Evangelical
Lutheran Good Samaritan Project (AMBAC)
6.00% 5/1/19 ........................................ 250,000 267,530
Olathe, Kansas Health Facility Revenue For Olathe
Medical Center Series 94A (AMBAC)
5.875% 9/1/16 ....................................... 100,000 103,388
Shawnee County Sisters of Charity Leavenworth
Hospital (FSA) 5.00% 12/1/23 ........................ 250,000 243,668
Wichita, Kansas Health Care Improvement
Industrial Revenue (The Kansas Masonic
Home - Series VI) 6.25% 12/1/17 ..................... 500,000 509,585
----------
1,908,862
----------
HOUSING REVENUE BONDS - 22.42%
Garnett, Kansas Senior Housing Annual Appropriation
Leasehold Revenue Garnett Housing Authority
Project 5.90% 10/1/18 ............................... 810,000 815,597
<PAGE>
18 for tax-exempt income
TAX-FREE KANSAS FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Kansas D.F.A. Revenue for Martin Creek Multifamily
Housing Project (FHA) 6.50% 8/1/24 .............. $ 50,000 $ 53,213
Kansas State Development Finance Authority
Multifamily Revenue - Oak Ridge Park Apartments
Project - Series F 6.625% 8/1/29 ................ 1,000,000 1,065,380
Olathe Multifamily Deerfield Apartments Series
1994A (FNMA) 6.45% 6/1/19 ....................... 250,000 267,408
Olathe, Kansas Multifamily Housing - Jefferson Place
Apartments Project - Series B 6.10% 7/1/22 ...... 800,000 828,408
Wichita Kansas Multifamily Housing Innes Station
Apartments Project II 6.25% 3/1/28 .............. 600,000 600,798
----------
3,630,804
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 0.32%
Wamego Pollution Control Revenue Western Resources
Inc. Project (MBIA) 6.00% 2/1/33 ................ 50,000 52,392
----------
52,392
----------
LEASE/CERTIFICATES OF PARTICIPATION - 2.17%
Linn County Kansas
Certificates of Participation 7.25% 3/1/13 ...... 350,000 350,865
----------
350,865
----------
* PRE-REFUNDED/ESCROWED TO
MATURITY BONDS - 10.05%
Douglas County Lawrence Unified School District
#497 6.00% 9/1/15-03 ............................ 250,000 267,175
Jefferson County Unified School District #340
(FSA) 6.35% 9/1/15-04 ........................... 250,000 278,860
Kansas City Community College Student Center
(MBIA) 6.25% 5/15/20-02 ......................... 300,000 323,115
Kansas Development Finance Authority Water
Pollution Control Sewer Revenue
6.00% 11/1/14-03 ................................ 250,000 275,243
Shawnee County Unified School District #501
(FGIC) 5.75% 2/1/11-03 .......................... 200,000 212,760
Shawnee County Unified School District #345
(MBIA) 5.75% 9/1/11-04 .......................... 250,000 270,803
----------
1,627,956
----------
PUBLIC POWER REVENUE AUTHORITY BONDS - 6.01%
Puerto Rico Electric Power Authority
5.25% 7/1/21 .................................... 500,000 502,895
Puerto Rico Electric Power Authority
Series EE 4.75% 7/1/24 .......................... 500,000 470,835
----------
973,730
----------
TRANSPORTATION REVENUE BONDS - 0.63%
Kansas Department of Transportation
5.375% 3/1/13 ................................... 100,000 102,491
----------
102,491
----------
WATER & SEWER REVENUE BONDS - 8.96%
Haysville Water & Sewer (FSA) 5.80% 10/1/16 ........ 250,000 267,348
Johnson County Water Revenue 5.25% 12/1/15 ......... 175,000 178,533
Kansas City Utility System Revenue
(FGIC) 6.375% 9/1/23 ............................ 900,000 1,005,498
----------
1,451,379
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
OTHER REVENUE BONDS - 4.77%
Virgin Islands Public Finance Authority Revenue
Sub Lien Funded Loan Notes
Series E 5.875% 10/1/18 ............................ $750,000 $ 773,393
------------
773,393
------------
TOTAL MUNICIPAL BONDS (COST $14,806,234) .............. 15,864,448
------------
NUMBER
OF SHARES
---------
SHORT-TERM INVESTMENTS - 0.69%
Norwest Advantage Municipal Money Market Fund ......... 111,577 111,577
------------
TOTAL SHORT-TERM INVESTMENTS (COST $111,577) .......... 111,577
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.64%
(COST $14,917,811) ................................. $ 15,976,025
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 1.36% 220,574
------------
NET ASSETS APPLICABLE TO 1,459,128 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ............ $ 16,196,599
============
NET ASSET VALUE - TAX FREE KANSAS FUND A CLASS
($12,194,132 / 1,098,893 SHARES) ................... $ 11.10
============
NET ASSET VALUE - TAX FREE KANSAS FUND B CLASS
($3,884,747 / 349,621 SHARES) ...................... $ 11.11
============
NET ASSET VALUE - TAX FREE KANSAS FUND C CLASS
($117,720 / 10,614 SHARES) ......................... $ 11.09
============
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $0.01 par value, unlimited
shares authorized to the Tax-Free Kansas Fund ........ $ 15,148,266
Accumulated net realized loss on investments .......... (9,881)
Net unrealized appreciation of investments ............ 1,058,214
------------
Total net assets ...................................... $ 16,196,599
============
- ----------------------
* 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 the 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) ..................................... $ 11.10
Sales charge (3.75% of offering price or 3.87% of amount invested
per share) (B) ............................................... 0.43
------------
Offering price .................................................. $ 11.53
============
- ----------------------
(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 19
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR TAX-FREE MISSOURI INSURED FUND
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------
MUNICIPAL BONDS - 98.61%
GENERAL OBLIGATION BONDS - 7.82%
Clark County School District
(FSA) 5.75% 3/1/15 ........................ $ 1,775,000 $ 1,870,956
Franklin County School District
(FGIC) 5.75% 3/1/13 ....................... 1,100,000 1,156,122
Springfield School District #R12
Series A (MBIA) 5.25% 3/1/11 .............. 500,000 510,500
St. Charles (FSA) 5.75% 3/1/15 ............... 1,000,000 1,056,890
-----------
4,594,468
-----------
HIGHER EDUCATION REVENUE BONDS - 3.40%
Missouri State Health & Education Facility
(Central Missouri State University)
(AMBAC) 5.75% 10/1/25 ..................... 1,000,000 1,044,360
Missouri State Health & Education Facility
University Revenue for St. Louis University
(AMBAC) 4.75% 10/1/16 ..................... 1,000,000 955,260
-----------
1,999,620
-----------
HOSPITAL REVENUE BONDS - 23.86%
Cape Girardeau SE Missouri Hospital
(MBIA) 5.25% 6/1/16 ....................... 1,000,000 1,031,690
Hannibal Health Facilities Series A
(Hannibal Regional Hospital)
(FSA) 5.625% 3/1/12 ....................... 2,500,000 2,645,775
Hannibal Health Facilities Series A
(Hannibal Regional Hospital)
(FSA) 5.75% 3/1/22 ........................ 1,000,000 1,056,010
Jackson County St. Joseph's Hospital
(MBIA) 6.50% 7/1/12 ....................... 1,980,000 2,154,655
Jackson County St. Mary's Hospital
(MBIA) 5.75% 7/1/24 ....................... 2,000,000 2,092,380
Missouri State Health & Education Facility
(Children's Mercy Hospital)
(MBIA) 5.65% 5/15/23 ...................... 1,000,000 1,032,030
Missouri State Health & Education Facility
(Health Midwest) (MBIA) 6.25% 2/15/22 ..... 1,000,000 1,069,120
Missouri State Health & Education Facility
(Heartland Health Systems)
(AMBAC) 6.35% 11/15/17 .................... 1,250,000 1,354,875
Missouri State Health & Education Facility
(SSM Health Care) (MBIA) 6.40% 6/1/10 ..... 500,000 576,785
Missouri State Health & Education Facility
(St. Luke's Health Systems)
(MBIA) 5.125% 11/15/19 .................... 1,000,000 999,290
-----------
14,012,610
-----------
HOUSING REVENUE BONDS - 16.86%
Missouri Single Family Housing
(GNMA) 7.20% 12/1/17 ...................... 230,000 254,753
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Missouri Single Family Housing
(GNMA) 7.25% 12/1/20 .......................... $ 465,000 $ 514,690
Missouri Single Family Housing
(FNMA/GNMA) 7.20% 9/1/26 ...................... 2,015,000 2,305,926
Missouri Single Family Housing
(FNMA/GNMA) 7.25% 9/1/26 ...................... 2,295,000 2,582,907
Missouri Single Family Housing
(FNMA/GNMA) 7.45% 9/1/27 ...................... 1,865,000 2,144,172
Missouri Single Family Housing
(FNMA/GNMA) 7.55% 9/1/27 ...................... 1,830,000 2,104,537
-----------
9,906,985
-----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 1.84%
St. Louis Municipal Finance Corporation City Lease
Revenue - City Justice Center,
Series A (AMBAC) 5.95% 2/15/16 ................ 1,000,000 1,081,790
-----------
1,081,790
-----------
LEASE/CERTIFICATE OF PARTICIPATION - 1.82%
Kansas City Muehlebach Hotel
(FSA) 5.90% 12/1/18 ........................... 1,000,000 1,069,570
-----------
1,069,570
-----------
POWER AUTHORITY REVENUE BONDS - 8.39%
Puerto Rico Electric Power Authority Power Revenue
Series DD (FSA) 4.50% 7/1/19 .................. 2,750,000 2,575,925
Sikeston Electric Revenue (MBIA) 5.00% 6/1/22 .... 1,250,000 1,227,700
Sikeston Electric Revenue (MBIA) 6.00% 6/1/13 .... 1,000,000 1,127,790
-----------
4,931,415
-----------
* PRE-REFUNDED/ESCROWED TO
MATURITY BONDS - 20.26%
**Greene County Single Family Mortgage Revenue
(Private Mortgage Insurance)
(Escrowed to maturity) 5.175% 3/1/16 ......... 1,225,000 496,664
Kansas City Airport Revenue
(FSA) 6.875% 9/1/14-04 ....................... 1,675,000 1,933,485
Sikeston Electric Revenue
(MBIA) 6.25% 6/1/12-02 ....................... 2,000,000 2,193,760
St. Charles School District
(FGIC) 6.50% 2/1/14-06 ....................... 1,250,000 1,430,363
St. Louis County School District #8
(MBIA) 5.60% 2/15/15-05 ...................... 1,490,000 1,609,215
St. Louis Municipal Finance Corporation Leasehold
Revenue (FGIC) 6.25% 2/15/12-05 .............. 1,850,000 2,066,765
Troy School District #3 Lincoln County
(MBIA) 6.10% 3/1/14-05 ....................... 1,235,000 1,369,887
West Platte School District
(MBIA) 5.85% 3/1/15-05 ....................... 750,000 805,035
-----------
11,905,174
-----------
<PAGE>
20 for tax-exempt income
TAX-FREE MISSOURI INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
UTILITY REVENUE BONDS - 4.00%
Missouri Environmental Pollution Control Revenue
for St. Joseph's Light & Power Co.
(AMBAC) 5.85% 2/1/13 ............................... $2,200,000 $ 2,351,360
-----------
2,351,360
-----------
WATER & SEWER REVENUE BONDS - 3.98%
Liberty Sewer (MBIA) 6.00% 2/1/08 ..................... 600,000 671,808
Liberty Sewer (MBIA) 6.15% 2/1/15 ..................... 1,500,000 1,667,580
-----------
2,339,388
-----------
OTHER REVENUE BONDS - 6.38%
Kansas City Municipal Assistance Bartle Hall
Convention Center (MBIA) 5.60% 4/15/16 ............. 1,240,000 1,293,258
Missouri State Environmental - State Revolving
Fund - Branson (FSA) 6.05% 7/1/16 .................. 2,265,000 2,454,739
-----------
3,747,997
-----------
TOTAL MUNICIPAL BONDS (COST $53,703,186) .............. 57,940,377
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.61%
(COST $53,703,186) ................................. $57,940,377
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES -
1.39% .............................................. 816,988
-----------
NET ASSETS APPLICABLE TO 5,442,338 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ............ $58,757,365
===========
NET ASSET VALUE - TAX FREE MISSOURI INSURED
FUND A CLASS ($47,378,189 / 4,388,093 SHARES) ...... $ 10.80
===========
NET ASSET VALUE - TAX FREE MISSOURI INSURED FUND
B CLASS ($11,268,629 / 1,044,010 SHARES) ........... $ 10.79
===========
NET ASSET VALUE - TAX FREE MISSOURI INSURED FUND
C CLASS ($110,547 / 10,235 SHARES) ................. $ 10.80
============
COMPONENTS OF NET ASSETS AT JUNE 30, 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 ....................................... $ 55,466,860
Accumulated net realized loss on investments........... (946,686)
Net unrealized appreciation of investments ............ 4,237,191
------------
Total Net Assets ...................................... $ 58,757,365
============
- ----------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
** The interest rate shown for this security is the effective yield.
<PAGE>
- ----------------------
Summary of Abbreviations:
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) ............................. $ 10.80
Sales charge (3.75% of offering price or 3.89% of
amount invested per share) (B) ....................... 0.42
---------
Offering price .......................................... $ 11.22
=========
- ----------------------
(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
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS - 98.29%
GENERAL OBLIGATION BONDS - 1.60%
Grand Forks Sewer Revenue 6.70% 6/1/07 ..... $ 270,000 $ 287,037
North Dakota State Real Estate 6.00% 9/1/13 215,000 215,759
----------
502,796
----------
HIGHER EDUCATION REVENUE BONDS - 3.40%
Burleigh County University Facilities
University of Mary Project 7.125% 12/1/11 250,000 265,308
North Dakota State University Housing &
Auxiliary Facility 6.30% 4/1/07 ......... 250,000 268,430
North Dakota State University Housing &
Auxiliary Facility 6.50% 4/1/12 ......... 500,000 539,970
----------
1,073,708
----------
HOSPITAL REVENUE BONDS - 29.52%
Bismarck Hospital Alexius Medical Center
(AMBAC) 6.90% 5/1/06 .................... 500,000 542,165
Bismarck Hospital Medical Center One Inc. ..
(MBIA) 7.50% 5/1/13 ..................... 250,000 261,845
Cando, ND Nursing Facility Revenue - Towner
County Medical Center Project
7.125% 8/1/22 ........................... 1,000,000 1,031,740
<PAGE>
for tax-exempt income 21
TAX-FREE NORTH DAKOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Carrington, ND Health Facility Revenue for
Carrington Health Center 6.25% 11/15/15 ......... $ 500,000 $ 538,760
Cass County, ND Health Facility Revenue for
Catholic Health Villa - Nazareth Project
6.25% 11/15/14 .................................. 1,000,000 1,077,520
Fargo Hospital Facility St. Luke's Hospital,
Series 1992 6.50% 6/1/15 ........................ 1,000,000 1,084,240
Grand Forks North Dakota Senior Housing Revenue
4000 Valley Square Project
6.25% 12/1/34 ................................... 2,000,000 2,039,700
Grand Forks United Hospital Obligated Group
(MBIA) 6.125% 12/1/14 ........................... 225,000 248,252
Grand Forks United Hospital Obligated Group
(MBIA) 6.25% 12/1/19 ............................ 250,000 273,890
Killdeer North Dakota Nursing Care Revenue -
Hill Top Home of Comfort 6.00% 11/1/12 .......... 850,000 868,768
Valley City, North Dakota Congregate Housing Revenue
(Bridgeview Estates Project) 7.25% 8/1/22 ....... 300,000 306,390
Ward County, ND Health Care Facility Revenue -
Trinity Obligated Group
Ser96A 6.00% 7/1/11 ............................. 1,000,000 1,049,220
----------
9,322,490
----------
HOUSING REVENUE BONDS - 26.30%
Grand Forks Multifamily Housing Authority Revenue -
Ryan House Section 8 6.30% 3/1/22 ............... 305,000 328,024
Minot Single Family Mortgage 7.70% 8/1/10 .......... 235,000 250,249
North Dakota Housing Finance Authority
Single Family Mortgage
Series A 6.30% 7/1/16 ........................... 1,955,000 2,092,534
North Dakota Housing Finance Authority
Single Family Mortgage 6.25% 1/1/17 ............. 2,225,000 2,378,570
North Dakota Single Housing Finance Agency
Single Family Mortgage
Series A (FHA) 6.75% 7/1/12 ..................... 160,000 170,435
North Dakota State Housing Finance Agency Revenue
(FNMA) 6.125% 12/1/15 ........................... 500,000 533,640
North Dakota State Housing Finance Agency Revenue
Multifamily (FNMA) 6.15% 12/1/17 ................ 1,300,000 1,385,865
North Dakota State Housing Finance Authority
Single Family Mortgage
Series A 6.95% 7/1/12 ........................... 300,000 321,456
North Dakota State Housing Finance Agency
Single Family Mortgage
Series E (FNMA) 6.30% 1/1/15 .................... 790,000 845,820
----------
8,306,593
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 1.70%
Mercer County Pollution Control
Otter Tail Power Company Project
6.90% 2/1/19 .................................... 500,000 537,325
----------
537,325
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS (CONTINUED)
POWER AUTHORITY REVENUE BONDS - 18.26%
Mercer County Pollution Control Revenue
Montana - Dakota Utilities Company Project
(FGIC) 6.65% 6/1/22 ................................ $ 500,000 $ 548,730
Mercer County Pollution Control
Revenue for Basin Electric Power
6.05% 1/1/19 ....................................... 1,250,000 1,359,688
Puerto Rico Electric Power Authority
5.25% 7/1/21 ....................................... 800,000 804,632
Puerto Rico Electric Power Authority Power
Revenue Series DD (FSA) 4.50% 7/1/19 ............... 1,250,000 1,170,875
Puerto Rico Electric Power Authority Power
Revenue Series EE 4.75% 7/1/24 ..................... 2,000,000 1,883,340
-----------
5,767,265
-----------
* PRE-REFUNDED/ESCROWED TO MATURITY BONDS - 1.00%
Devils Lake Public School District #1
6.80% 5/1/11-99 .................................... 100,000 102,472
Fargo Park District Revenue
7.25% 11/1/11-00 ................................... 200,000 214,016
-----------
316,488
-----------
TRANSPORTATION REVENUE BONDS - 4.89%
Puerto Rico Commonwealth Highway &
Transportation Authority
Series Y 5.50% 7/1/26 .............................. 1,500,000 1,544,115
-----------
1,544,115
-----------
OTHER REVENUE BONDS - 11.62%
North Dakota Building Authority Revenue
(FSA) 6.00% 12/1/14 ................................ 1,310,000 1,406,140
North Dakota Building Authority Revenue
(FSA) 6.10% 12/1/16 ................................ 1,480,000 1,595,026
North Dakota State Municipal Bond Bank
6.25% 12/1/11 ...................................... 450,000 459,104
North Dakota State Student Loan
(AMBAC) 7.00% 7/1/05 ............................... 200,000 208,972
-----------
3,669,242
-----------
Total Municipal Bonds (cost $29,114,490) .............. 31,040,022
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED
(COST $29,114,490) - 98.29% ........................ $31,040,022
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 1.71% ................................ 541,509
-----------
NET ASSETS APPLICABLE TO 2,782,766 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ............ $31,581,531
===========
NET ASSET VALUE - TAX-FREE NORTH DAKOTA FUND A CLASS
($30,611,590 / 2,697,295) .......................... $ 11.35
===========
NET ASSET VALUE - TAX-FREE NORTH DAKOTA FUND B CLASS
($928,188 / 81,789) ................................ $ 11.35
===========
NET ASSET VALUE - TAX-FREE NORTH DAKOTA FUND C CLASS
($41,753 / 3,682) .................................. $ 11.34
===========
<PAGE>
22 for tax-exempt income
Tax-Free North Dakota Fund
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS AT JUNE 30, 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 the Tax-Free North Dakota Fund B Class and 1,000,000,000
shares allocated to the Tax-Free North Dakota Fund C Class.... $29,629,687
Accumulated net realized gain on investments................... 26,312
Net unrealized appreciation of investments..................... 1,925,532
------------
Total Net Assets............................................... $31,581,531
============
- ----------------------
* 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 the 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).................................... $11.35
Sales charge (3.75% of offering price or 3.88% of amount
invested per share)(B) ..................................... 0.44
------------
Offering price................................................. $11.79
============
- ----------------------
(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
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR
TAX-FREE OREGON INSURED FUND
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS - 97.62%
GENERAL OBLIGATION BONDS - 19.49%
Hermiston Water Bonds
(AMBAC) 6.20% 8/1/24 ..................... $ 500,000 $ 543,855
Lane County School District #19 (Springfield)
(FGIC) 6.00% 10/15/14 .................... 500,000 558,755
Lincoln County School District
(FGIC) 5.25% 6/15/12 ..................... 1,450,000 1,502,490
Malheur County Jail (MBIA) 6.30% 12/1/12 .... 500,000 554,775
Multnomah County School District #3 Park Rose
(FGIC) 5.50% 12/1/11 ..................... 500,000 524,380
<PAGE>
TAX-FREE OREGON INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
GENERAL OBLIGATION BONDS (CONTINUED)
North Unit Irrigation District
(MBIA) 5.75% 6/1/16 ........................... $1,000,000 $1,059,790
Portland (MBIA) 5.75% 6/1/15 ..................... 500,000 523,120
Tillamook County (FGIC) 6.25% 1/1/14 ............. 250,000 275,800
** Umatilla County Oregon School
District #6R Umatilla
(AMBAC) 5.196% 12/15/22 ....................... 200,000 57,030
Washington County School District (Sherwood)
(FSA) #88J 6.10% 6/1/12 ....................... 300,000 327,264
----------
5,927,259
----------
HIGHER EDUCATION REVENUE BONDS - 16.46%
Central Oregon Community College
(FGIC) 5.90% 6/1/09 ........................... 750,000 802,658
Oregon Health & Education Authority for
Lewis & Clark College
(MBIA) 6.125% 10/1/24 ......................... 1,055,000 1,151,142
Oregon Health & Education Authority for Reed
College (MBIA) 5.375% 7/1/25 .................. 1,000,000 1,024,440
** Oregon Health Sciences University
(MBIA) 5.126% 7/1/21 .......................... 6,500,000 2,028,845
---------
5,007,085
---------
HOSPITAL REVENUE BONDS - 7.08%
Western Lane Hospital District for Sisters of
St. Joseph Peace Hospital
(MBIA) 5.75% 8/1/19 ........................... 1,000,000 1,062,900
Western Lane Hospital District for Sisters of
St. Joseph Peace Hospital
(MBIA) 5.875% 8/1/12 .......................... 1,000,000 1,089,780
---------
2,152,680
---------
HOUSING REVENUE BONDS - 3.75%
Oregon Health, Housing, Educational, and Cultural
Facilities Authority for Pier Park Project
(GNMA) 6.05% 4/1/18 ........................... 1,095,000 1,141,516
---------
1,141,516
---------
LEASE/CERTIFICATES OF PARTICIPATION - 3.51%
Oregon State Department Administrative Services
Certificate of Participation -
Series A (AMBAC) 5.80% 5/1/24 ................. 1,000,000 1,066,190
---------
1,066,190
---------
POWER AUTHORITY REVENUE BONDS - 8.24%
Central Lincoln Peoples Utility District
(AMBAC) 5.75% 1/1/15 .......................... 500,000 523,000
Northern Wasco County
(FGIC) 5.625% 12/1/22 ......................... 1,000,000 1,045,190
Puerto Rico Electric Power Authority Power Revenue
Series DD (FSA) 4.50% 7/1/19 .................. 1,000,000 936,700
---------
2,504,890
---------
* PRE-REFUNDED/ESCROWED TO
MATURITY BONDS - 21.79%
Chemeketa Community College
(FGIC) 5.80% 6/1/12-06 ........................ 1,500,000 1,654,605
Eugene Electric Revenue
Series C (MBIA) 5.80% 8/1/22-04 ............... 1,250,000 1,369,350
<PAGE>
for tax-exempt income 23
TAX-FREE OREGON INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
PRE-REFUNDED/ESCROWED TO
MATURITY BONDS (CONTINUED)
Lane County School District #19
(MBIA) 6.30% 10/15/14-04 .......................... $ 500,000 $ 562,675
Multnomah County School District #39
Corbett (MBIA) 6.00% 12/1/13-04 ................... 500,000 550,045
Portland Sewer System Revenue
(FSA) 6.25% 6/1/15-04 ............................. 1,000,000 1,116,740
Umatilla Pendleton School District #016R
(AMBAC) 6.00% 7/1/14-04 ........................... 500,000 552,490
Washington County Education Service
(MBIA) 7.10% 6/1/25-05 ............................ 700,000 820,512
-----------
6,626,417
-----------
TRANSPORTATION REVENUE BONDS - 6.83%
Portland, Oregon Airport Revenue for Portland
International Airport (FGIC) 5.625% 7/1/26 ........ 2,000,000 2,076,580
-----------
2,076,580
-----------
Water & Sewer Revenue Bonds - 10.47%
Beaverton Water Revenue
(FSA) 6.125% 6/1/14 ............................... 500,000 542,550
Klamath Falls Water Revenue
(FSA) 6.10% 6/1/14 ................................ 500,000 545,700
Salem Water & Sewer Revenue
(MBIA) 5.50% 6/1/14 ............................... 1,000,000 1,046,870
Salem Water & Sewer Revenue
(MBIA) 5.625% 6/1/16 .............................. 1,000,000 1,049,650
-----------
3,184,770
-----------
Total Municipal Bonds (cost $27,361,509) ............. 29,687,387
-----------
Number
of Shares
---------
Short-Term Investments - 1.44%
Norwest Advantage Municipal Money Market Fund ........ 437,082 437,082
-----------
Total Short-Term Investments (cost $437,082) ......... 437,082
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED
(COST $27,798,591) - 99.06% ....................... $30,124,469
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 0.94% ............................... 286,510
-----------
NET ASSETS APPLICABLE TO 2,939,194 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ........... $30,410,979
===========
NET ASSET VALUE - TAX-FREE OREGON INSURED
FUND A CLASS ($23,594,553 / 2,280,587 SHARES) ..... $ 10.35
===========
NET ASSET VALUE - TAX-FREE OREGON INSURED
FUND B CLASS ($5,824,402 / 562,814 SHARES) ........ $ 10.35
===========
NET ASSET VALUE - TAX-FREE OREGON INSURED
FUND C CLASS ($992,024 / 95,793 SHARES) ........... $ 10.36
===========
<PAGE>
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common Stock, $0.01 par value, unlimited shares authorized to the
Tax-Free Oregon Insured Fund.................................. $28,697,212
Accumulated net realized loss on investments..................... (612,111)
Net unrealized appreciation of investments....................... 2,325,878
------------
Total net assets $ 30,410,979
============
- ----------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
** The interest rate shown for this security is the effective yield.
- ----------------------
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by the 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)....................................... $10.35
Sales charge (3.75% of offering price, or 3.87% of amount
invested per share)(B)......................................... 0.40
------------
Offering price.................................................... $10.75
============
- ----------------------
(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
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR
TAX-FREE WASHINGTON INSURED FUND
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------
MUNICIPAL BONDS - 90.66%
GENERAL OBLIGATIONS - 16.80%
Benton County Independent School District #116
(FGIC) 5.80% 12/1/10 ............................... $100,000 $108,627
Bothell (AMBAC) 5.70% 12/1/10 ......................... 75,000 80,463
Clark County School District #114
(FGIC) 6.00% 12/1/11 ............................... 75,000 81,472
Kent Washington Series A
(MBIA) 6.00% 12/1/16 ............................... 100,000 109,789
King County Kent School District #415
(MBIA) 5.55% 12/1/11 ............................... 75,000 81,673
Snohomish County (MBIA) 5.90% 12/1/15.................. 75,000 79,412
<PAGE>
24 for tax-exempt income
TAX-FREE WASHINGTON INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Washington State Series 93A UTGO Utility
General Obligation (FGIC) 5.75% 10/1/17 ......... $100,000 $105,114
--------
646,550
--------
HOUSING REVENUE BONDS - 23.85%
King County, Washington Housing Authority -
Fred Lind Manor Project-A
(GNMA) 6.672% 6/20/32 ........................... 200,000 221,602
Kitsap County Housing (GNMA) 7.10% 2/20/36 ......... 200,000 227,796
Washington State Housing Finance Commonwealth
Multifamily Mortgage Revenue A
(GNMA) 6.00% 7/1/30 ............................. 60,000 63,630
Washington State Housing Finance -
Single Family - Series 2A
(GNMA) (AMT) 6.30% 12/1/27 ...................... 180,000 192,593
Washington State Housing Single Family
Mortgage Revenue (GNMA) 6.20% 12/1/22 ........... 200,000 212,104
--------
917,725
--------
HIGHER EDUCATION REVENUE BONDS - 15.12%
Washington Higher Education Pacific Lutheran College
(Connie Lee) 5.70% 11/1/26 ...................... 200,000 210,832
Washington State Higher Educational Facilities
Seattle University Project
(AMBAC) 5.20% 5/1/28 ............................ 150,000 150,790
Washington State University: Housing &
Dining System (MBIA) 6.375% 10/1/18 ............. 200,000 220,202
--------
581,824
--------
HOSPITAL REVENUE BONDS - 13.65%
University Of Washington Medical Center
(FSA) 6.30% 8/15/14 ............................. 200,000 220,777
Washington State Health Care Facilities
Authority Revenue Swedish Health Systems
(AMBAC) 5.25% 11/15/26 .......................... 100,000 99,263
Washington State Health Care Facility
Yakima Valley Memorial Hospital
(Connie Lee) 5.25% 12/1/20 ...................... 100,000 100,233
Washington State Health Care Peace Health
(MBIA) 5.625% 11/15/15 .......................... 100,000 104,923
--------
525,196
--------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 2.13%
University Of Washington Parking Revenue
(AMBAC) 6.125% 11/1/14 .......................... 75,000 82,034
--------
82,034
--------
POWER AUTHORITY REVENUE BONDS - 8.24%
Grant County Public #2 Wanapum
(MBIA) 5.875% 1/1/26 ............................ 100,000 105,156
Kittitas County Public #1
(MBIA) 5.80% 12/1/20 ............................ 100,000 105,358
Washington State Public Power #1
(MBIA) 5.75% 7/1/12 ............................. 100,000 106,648
--------
317,162
--------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
TRANSPORTATION REVENUE BONDS - 1.32%
Port Tacoma Washington
(AMBAC) 5.30% 12/1/17 ............................... $ 50,000 $ 50,812
----------
50,812
----------
WATER & SEWER REVENUE BONDS - 9.55%
Covington Water & Sewer Revenue
(AMBAC) 6.00% 3/1/15 ................................ 75,000 80,244
Olympia Washington Water & Sewer
(FGIC) 5.125% 11/1/17 ............................... 100,000 100,914
Seattle Metrolpolitan Sewer Revenue
(FGIC) 5.70% 1/1/14 ................................. 75,000 78,766
Vancouver Water & Sewer Revenue
(FGIC) 6.00% 6/1/16 ................................. 100,000 107,399
----------
367,323
----------
TOTAL MUNICIPAL BONDS (COST $3,244,955 ) ............... 3,488,626
----------
NUMBER
OF SHARES
---------
SHORT-TERM INVESTMENTS - 7.21%
Norwest Advantage Municipal Money Market Fund .......... 277,461 277,461
----------
TOTAL SHORT-TERM INVESTMENTS (COST $277,461) ........... 277,461
----------
TOTAL MARKET VALUE OF SECURITIES OWNED
(COST $3,522,416) - 97.87% .......................... $3,766,087
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 2.13% 82,111
----------
NET ASSETS APPLICABLE TO 355,998 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ............. $3,848,198
==========
NET ASSET VALUE - TAX-FREE WASHINGTON INSURED FUND A
CLASS ($2,308,064 / 213,624 SHARES) ................. $ 10.80
==========
NET ASSET VALUE - TAX-FREE WASHINGTON INSURED FUND B
CLASS ($1,239,027 / 114,525 SHARES) ................. $ 10.82
==========
NET ASSET VALUE - TAX-FREE WASHINGTON INSURED FUND C
CLASS ($301,107 / 27,849 SHARES) .................... $ 10.81
==========
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common Stock, $0.01 par value, unlimited shares
authorized to the Tax-Free Washington Insured Fund .. $3,685,267
Accumulated net realized loss on investments ........... (80,740)
Net unrealized appreciation of investments ............. 243,671
----------
Total net assets ....................................... $3,848,198
==========
- ----------------------
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 the Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
<PAGE>
for tax-exempt income 25
Tax-Free Washington Insured Fund
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE WASHINGTON INSURED FUND A CLASS
Net asset value A Class (A) ....................... $10.80
Sales charge (3.75% of offering price, or 3.89% of amount
invested per share)(B) ......................... 0.42
------------
Offering price .................................... $11.22
============
- ----------------------
(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 Mutual Funds, Inc.
Delaware-Voyageur Tax-Free Wisconsin Fund
Statement of Net Assets
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
-----------------------
MUNICIPAL BONDS - 97.97%
GENERAL OBLIGATION BONDS - 3.57%
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ................................... $1,500,000 $1,371,675
----------
1,371,675
----------
HIGHER EDUCATION REVENUE BONDS - 2.22%
Madison Community Development Authority Revenue -
Edgewood College 6.25% 4/1/14 .................. 500,000 530,170
Puerto Rico Educational Facility Revenue -
Polytechnic University 6.50% 8/1/24 ............ 295,000 321,951
----------
852,121
----------
HOSPITAL REVENUE BONDS - 2.59%
Kaukauna Housing Authority Revenue -
St. Paul Home Inc. 6.10% 9/1/07 ................ 200,000 206,530
Puerto Rico Industrial Tourist Educational
Medical & Environmental Control Facilities
(Hospital Auxilio Mutuo Project - Series A)
5.50% 7/1/17 ................................... 500,000 524,815
Superior Redevelopment Authority Revenue - Superior
Memorial Hospital (GNMA) 5.80% 5/1/10 .......... 250,000 262,025
----------
993,370
----------
HOUSING REVENUE BONDS - 27.64%
Dane County Multifamily Housing Revenue -
Forest Harbor Apartment Project
5.85% 7/1/11 ................................... 125,000 130,305
Dane County Multifamily Housing Revenue -
Forest Harbor Apartment Project
5.90% 7/1/12 ................................... 125,000 129,515
Green Bay Wisconsin Housing Authority
Multifamily Housing Revenue -
Moraine Limited - Series A
(FHA) 6.15% 12/1/30 ............................ 2,500,000 2,667,700
La Crosse Housing Authority Washburn Project
6.375% 10/1/16 ................................. 100,000 104,600
<PAGE>
TAX-FREE WISCONSIN FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
La Crosse Housing Authority Washburn Project
6.50% 10/1/26 ................................ $ 250,000 $ 260,398
Milwaukee Redevelopment Authority
Multifamily Housing 6.30% 8/1/38 ............. 1,455,000 1,534,167
New Berlin Multifamily Housing Authority Revenue
7.125% 5/1/24 ................................ 500,000 535,210
Puerto Rico Housing Authority Single Family
Mortgage Revenue 6.85% 10/15/23 .............. 625,000 665,406
Puerto Rico Housing Bank And Finance Agency
(GNMA) 6.25% 4/1/29 .......................... 995,000 1,059,595
Superior Housing Authority - St. Francis Project
(GNMA) 6.00% 1/20/22 ......................... 565,000 590,600
Superior Housing Authority - St. Francis Project
(GNMA) 6.15% 7/20/31 ......................... 835,000 870,955
Waukesha Wisconsin Housing Westgrove Wood Project
(GNMA) 6.00% 12/1/31 ......................... 1,500,000 1,581,810
Wauwatosa Multifamily Housing Revenue -
Harwood Place, Inc. 5.75% 12/1/08 ............ 480,000 491,611
-----------
10,621,872
-----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 16.41%
Hartford Community Development Authority Lease
Revenue 6.15% 12/1/09 ........................ 240,000 258,761
Milwaukee Redevelopment Authority Revenue -
Goodwill Industries, Inc. 6.35% 10/1/09 ...... 2,000,000 2,105,220
Omro Community Development Authority
5.875% 12/1/11 ............................... 300,000 320,613
Puerto Rico Commonwealth Industrial Development
General Purpose Revenue
Series B 5.375% 7/1/16 ....................... 1,000,000 1,024,590
Puerto Rico Industrial Medical Environmental
Revenue - PepsiCo Project 6.25% 11/15/13 ..... 1,100,000 1,208,053
Two Rivers Community Development Authority
Revenue Architectural Forest Products
6.35% 12/15/12 ............................... 250,000 257,640
West Allis Community Development Authority
Revenue - Poblocki Investments, Ltd. .........
5.90% 5/1/03 ................................. 1,080,000 1,131,948
-----------
6,306,825
-----------
LEASE/CERTIFICATES OF PARTICIPATION - 14.56%
Cudahy Community Development Authority Revenue
6.00% 6/1/11 ................................. 1,000,000 1,065,840
De Forest Redevelopment Lease Revenue
6.25% 2/1/18 ................................. 1,000,000 1,058,380
Little Chute Community Development Lease Revenue
5.625% 3/1/19 ................................ 680,000 711,096
Madison Community Development Authority, Monona
Terrace Community Project 5.80% 3/1/05 ....... 125,000 134,990
Madison Community Development Authority, Monona
Terrace Community Project 5.90% 3/1/06 ....... 365,000 395,160
Madison Community Development Authority, Monona
Terrace Community Project 6.10% 3/1/10 ....... 1,500,000 1,629,375
Redgranite Wisconsin Community Development
Authority Revenue 5.85% 3/1/18 ............... 605,000 601,449
-----------
5,596,290
-----------
<PAGE>
26 for tax-exempt income
Tax-Free Wisconsin Fund
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED/ESCROWED TO
MATURITY BONDS - 5.15%
Virgin Islands Public Finance Authority
(Escrowed to maturity) 7.30% 10/1/18 ......... $ 700,000 $ 882,469
Wisconsin Housing Finance Authority
(FHA) 6.10% 6/1/21-17 ........................ 1,000,000 1,097,330
-----------
1,979,799
-----------
POWER AUTHORITY REVENUE BONDS - 5.31%
Puerto Rico Electric Power Authority Revenue
4.75% 7/1/24 ................................. 500,000 470,835
Puerto Rico Electric Power Authority Revenue
6.00% 7/1/14 ................................. 1,450,000 1,570,887
-----------
2,041,722
-----------
SPECIAL UTILITY REVENUE BONDS - 0.78%
Puerto Rico Telephone Authority Revenue
5.75% 1/1/11 ................................. 285,000 300,416
-----------
300,416
-----------
WATER & SEWER REVENUE BONDS - 2.59%
Puerto Rico Commonwealth Infrastructure Financing
Authority Special Series A 5.00% 7/1/21 ...... 1,000,000 994,580
-----------
994,580
-----------
OTHER REVENUE BONDS - 17.15%
Puerto Rico Municipal Finance Authority
(FSA) 6.00% 7/1/14 ........................... 1,800,000 1,958,994
**Southeast Wisconsin Professional Baseball Park
District Lease Certificates
(MBIA) 5.095% 12/15/15 ....................... 1,000,000 415,450
**Southeast Wisconsin Professional Baseball Park
District Sales Revenue
(MBIA) 5.115% 12/15/16 ....................... 1,115,000 438,897
**Southeast Wisconsin Professional Baseball Park
District Sales Tax Revenue
(MBIA) 5.287% 12/15/24 ....................... 1,500,000 377,145
**Southeast Wisconsin Professional Baseball Park
District Sales Tax Revenue
(MBIA) 5.287% 12/15/25 ....................... 1,250,000 298,300
**Southeast Wisconsin Professional Baseball Park
District Sales Tax Revenue
(MBIA) 5.287% 12/15/28 ....................... 6,250,000 1,275,250
Southeast Wisconsin Professional Baseball Park
District Sales Tax Revenue
(MBIA) 5.80% 12/15/26 ........................ 1,000,000 1,053,700
Virgin Islands Public Finance Authority Revenue
Sub Lien Funded Loan Notes
Series E 5.875% 10/1/18 ...................... 750,000 773,385
-----------
6,591,121
-----------
TOTAL MUNICIPAL BONDS (COST $35,574,582) ........ 37,649,791
-----------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
SHORT-TERM INVESTMENTS - 0.67%
Norwest Advantage Municipal Money Market Fund ....... 257,083 $ 257,083
------------
TOTAL SHORT-TERM INVESTMENTS (COST $257,083) ........ 257,083
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.64%
(COST $35,831,665) ............................... $ 37,906,874
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 1.36% .............................. 522,320
------------
NET ASSETS APPLICABLE TO 3,841,008 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% .......... $ 38,429,194
============
NET ASSET VALUE - TAX-FREE WISCONSIN FUND A CLASS
($34,601,565 / 3,458,573) ........................ $ 10.00
============
NET ASSET VALUE - TAX-FREE WISCONSIN FUND B CLASS
($2,522,798 / 252,376) ........................... $ 10.00
============
NET ASSET VALUE - TAX-FREE WISCONSIN FUND C CLASS
($1,304,831 / 130,059) ........................... $ 10.03
============
COMPONENTS OF NET ASSETS AT JUNE 30, 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 ..... $ 36,866,565
Accumulated net realized loss on investments ........ (512,580)
Net unrealized appreciation of investments .......... 2,075,209
------------
Total net assets .................................... $ 38,429,194
============
- ----------------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
**The interest rate shown for this security is the effective yield.
- ----------------------
Summary of Abbreviations:
FHA - Insured by the Federal Housing Authority
FSA - Insured by the 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) ......................... $10.00
Sales charge (3.75% of offering price, or 3.90% of amount
invested per share)(B)............................ 0.39
------------
Offering price....................................... $10.39
============
- ----------------------
(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 27
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
IDAHO IOWA KANSAS MISSOURI
FUND FUND FUND INSURED FUND
----------- ----------- ----------- -----------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Interest ............................. $ 1,260,464 $ 1,135,650 $ 420,214 $ 1,636,959
----------- ----------- ----------- -----------
EXPENSES:
Management fees ...................... 112,890 106,089 37,777 146,883
Distribution expense ................. 87,216 68,360 33,042 116,562
Dividend disbursing and transfer
agent fees and expenses ........... 20,928 20,154 8,651 26,005
Registration fees .................... 4,250 4,448 172 420
Reports and statements to shareholders 4,229 13,878 2,921 8,010
Accounting and administration ........ 10,954 11,766 3,657 18,515
Professional fees .................... 6,824 6,480 995 6,030
Custodian fees ....................... 1,680 2,520 900 3,037
Taxes (other than taxes on income) ... 950 1,350 100 12,600
Directors' fees ...................... 564 660 305 750
Other ................................ 3,243 5,056 758 --
----------- ----------- ----------- -----------
253,728 240,761 89,278 338,812
Less expenses absorbed or waived ..... (17,945) (24,352) (10,135) (28,365)
----------- ----------- ----------- -----------
Total net expenses ................... 235,783 216,409 79,143 310,447
----------- ----------- ----------- -----------
Net Investment Income ................ 1,024,681 919,241 341,071 1,326,512
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
investment transactions ........... (44,571) 77,889 69,352 150,143
Net change in unrealized appreciation/
depreciation of investments ....... 123,726 4,185 (7,537) (229,163)
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS ............. 79,155 82,074 61,815 (79,020)
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................... $ 1,103,836 $ 1,001,315 $ 402,886 $ 1,247,492
=========== =========== =========== ===========
</TABLE>
<PAGE>
[RESTUBBED]
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE
NORTH DAKOTA OREGON WASHINGTON WISCONSIN
FUND INSURED FUND INSURED FUND FUND
----------- ----------- ----------- -----------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Interest ............................. $ 923,807 $ 794,761 $ 95,940 $ 1,000,732
----------- ----------- ----------- -----------
EXPENSES:
Management fees ...................... 79,186 74,763 8,869 90,922
Distribution expense ................. 48,495 65,049 7,860 57,841
Dividend disbursing and transfer
agent fees and expenses ........... 18,173 13,985 3,677 15,294
Registration fees .................... 2,086 4,250 850 1,875
Reports and statements to shareholders 10,577 3,601 2,100 7,265
Accounting and administration ........ 12,806 7,251 2,586 8,988
Professional fees .................... 6,370 869 132 5,760
Custodian fees ....................... 2,268 2,070 -- 1,169
Taxes (other than taxes on income) ... 2,400 624 104 975
Directors' fees ...................... 1,487 420 220 482
Other ................................ 1,502 5,814 -- 8,698
----------- ----------- ----------- -----------
185,350 178,696 26,398 199,269
Less expenses absorbed or waived ..... (23,708) (47,448) (13,181) (7,194)
----------- ----------- ----------- -----------
Total net expenses ................... 161,642 131,248 13,217 192,075
----------- ----------- ----------- -----------
Net Investment Income ................ 762,165 663,513 82,723 808,657
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
investment transactions ........... 150,467 (11,500) -- (74,443)
Net change in unrealized appreciation/
depreciation of investments ....... (84,969) 117,743 10,980 83,009
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS ............. 65,498 106,243 10,980 8,566
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................... $ 827,663 $ 769,756 $ 93,703 $ 817,223
=========== =========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
28 for tax-exempt income
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX-FREE IDAHO FUND TAX-FREE IOWA FUND
----------------------------- -----------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
6/30/98 YEAR ENDED 6/30/98 YEAR ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
INCREASE IN NET ASSETS
FROM OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income ................... $ 1,024,681 $ 1,840,447 $ 919,241 $ 1,895,350
Net realized gain (loss)
from investments ..................... (44,571) 52,973 77,889 (58,844)
Net change in unrealized appreciation
(depreciation) of investments ........ 123,726 1,890,831 4,185 1,936,561
------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations ............ 1,103,836 3,784,251 1,001,315 3,773,067
------------ ------------ ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income:
A Class .............................. (856,127) (1,561,674) (844,585) (1,786,140)
B Class .............................. (141,466) (273,521) (56,844) (84,786)
C Class .............................. (27,088) (40,080) (17,811) (27,910)
------------ ------------ ------------ ------------
(1,024,681) (1,875,275) (919,240) (1,898,836)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class .............................. 6,782,593 8,087,405 1,901,017 3,470,467
B Class .............................. 953,204 2,019,434 783,484 1,320,305
C Class .............................. 511,022 702,551 348,077 247,082
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class .............................. 561,261 967,219 533,231 1,211,605
B Class .............................. 87,948 155,808 41,625 64,063
C Class .............................. 21,977 34,029 9,983 10,869
------------ ------------ ------------ ------------
8,918,005 11,966,446 3,617,417 6,324,391
------------ ------------ ------------ ------------
Cost of shares repurchased:
A Class .............................. (3,553,039) (4,493,235) (1,716,432) (8,103,037)
B Class .............................. (453,638) (611,419) (55,986) (232,768)
C Class .............................. (128,220) (480,962) (131,825) (90,968)
------------ ------------ ------------ ------------
(4,134,897) (5,585,616) (1,904,243) (8,426,773)
------------ ------------ ------------ ------------
Increase (decrease) in net assets derived
from capital share transactions ...... 4,783,108 6,380,830 1,713,174 (2,102,382)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE)
IN NET ASSETS ........................ 4,862,263 8,289,806 1,795,249 (228,151)
NET ASSETS:
Beginning of period ..................... 41,741,018 33,451,212 42,124,438 42,352,589
------------ ------------ ------------ ------------
End of period ........................... $ 46,603,281 $ 41,741,018 $ 43,919,687 $ 42,124,438
============ ============ ============ ============
</TABLE>
<PAGE>
[RESTUBBED]
<TABLE>
<CAPTION>
TAX-FREE KANSAS FUND TAX-FREE MISSOURI INSURED FUND
------------------------------ -----------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
6/30/98 YEAR ENDED 6/30/98 YEAR ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
INCREASE IN NET ASSETS
FROM OPERATIONS:
<S> <C> <C> <C> <C>
Net investment income ................... $ 341,071 $ 627,158 $ 1,326,512 $ 2,788,692
Net realized gain (loss)
from investments ..................... 69,352 127,741 150,143 176,623
Net change in unrealized appreciation
(depreciation) of investments ........ (7,537) 513,267 (229,163) 2,344,920
------------ ----------- ------------ ------------
Net increase in net assets
resulting from operations ............ 402,886 1,268,166 1,247,492 5,310,235
------------ ----------- ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income:
A Class .............................. (265,858) (506,768) (1,101,598) (2,362,959)
B Class .............................. (73,278) (123,076) (221,307) (458,482)
C Class .............................. (2,020) (4,201) (3,609) (7,784)
------------ ----------- ------------ ------------
(341,156) (634,045) (1,326,514) (2,829,225)
------------ ----------- ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class .............................. 2,162,297 1,225,439 1,258,418 2,768,917
B Class .............................. 394,384 948,070 324,960 2,097,849
C Class .............................. 32,205 74,506 30,000 100,000
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class .............................. 140,880 297,771 570,714 1,353,277
B Class .............................. 49,065 83,728 140,596 349,671
C Class .............................. 1,985 4,294 2,492 5,484
------------ ----------- ------------ ------------
2,780,816 2,633,808 2,327,180 6,675,198
------------ ----------- ------------ ------------
Cost of shares repurchased:
A Class .............................. (820,134) (1,511,541) (2,956,318) (6,861,721)
B Class .............................. (23,338) (135,792) (685,142) (1,840,881)
C Class .............................. (25,317) (66,004) (146,282) (42,129)
------------ ----------- ------------ ------------
(868,789) (1,713,337) (3,787,742) (8,744,731)
------------ ----------- ------------ ------------
Increase (decrease) in net assets derived
from capital share transactions ...... 1,912,027 920,471 (1,460,562) (2,069,533)
------------ ----------- ------------ ------------
NET INCREASE (DECREASE)
IN NET ASSETS ........................ 1,973,757 1,554,592 (1,539,584) 411,477
NET ASSETS:
Beginning of period ..................... 14,222,842 12,668,250 60,296,949 59,885,472
------------ ----------- ------------ ------------
End of period ........................... $ 16,196,599 $14,222,842 $ 58,757,365 $ 60,296,949
============ =========== ============ ============
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 29
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX-FREE NORTH DAKOTA FUND TAX-FREE OREGON INSURED FUND
--------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED ENDED
6/30/98 YEAR ENDED 6/30/98 YEAR ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ................... $ 762,165 $ 1,601,793 $ 663,513 $ 1,271,100
Net realized gain (loss)
from investments ..................... 150,467 416,818 (11,500) 17,126
Net change in unrealized appreciation
(depreciation) of investments ........ (84,969) 880,044 117,743 1,188,556
------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations ............ 857,663 2,898,655 769,756 2,476,782
------------ ------------ ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income:
A Class .............................. (742,787) (1,597,868) (527,792) (1,033,966)
B Class .............................. (18,541) (37,856) (123,586) (224,133)
C Class .............................. (837) (1,691) (12,135) (17,078)
------------ ------------ ------------ ------------
(762,165) (1,637,415) (663,513) (1,275,177)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class .............................. 816,439 751,084 3,115,017 3,728,179
B Class .............................. 37,862 192,597 399,417 1,626,102
C Class .............................. -- -- 503,152 164,876
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class .............................. 454,588 1,047,157 316,685 616,492
B Class .............................. 9,661 22,504 79,505 152,794
C Class .............................. 837 1,714 8,986 11,587
------------ ------------ ------------ ------------
1,319,387 2,015,056 4,422,762 6,300,030
------------ ------------ ------------ ------------
COST OF SHARES REPURCHASED:
A Class .............................. (1,688,346) (5,770,655) (1,989,852) (4,116,579)
B Class .............................. (9,841) (61,932) (1,134,702) (326,601)
C Class .............................. -- (3,000) (57,909) (25,157)
------------ ------------ ------------ ------------
(1,698,187) (5,835,587) (3,182,463) (4,468,337)
------------ ------------ ------------ ------------
Increase (decrease) in net assets derived
from capital share transactions ...... (378,800) (3,820,531) 1,240,299 1,831,693
------------ ------------ ------------ ------------
NET INCREASE (DECREASE)
IN NET ASSETS ........................ (313,302) (2,559,291) 1,346,542 3,033,298
NET ASSETS:
Beginning of period ..................... 31,894,833 34,454,124 29,064,437 26,031,139
------------ ------------ ------------ ------------
End of period ........................... $ 31,581,531 $ 31,894,833 $ 30,410,979 $ 29,064,437
============ ============ ============ ============
</TABLE>
<PAGE>
[RESTUBBED]
<TABLE>
<CAPTION>
TAX-FREE WASHINGTON INSURED FUND TAX-FREE WISCONSIN FUND
-------------------------------- ------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
6/30/98 YEAR ENDED 6/30/98 YEAR ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ................... $ 82,723 $ 156,411 $ 808,657 $ 1,402,926
Net realized gain (loss)
from investments ..................... -- 38 (74,443) 190,944
Net change in unrealized appreciation
(depreciation) of investments ........ 10,980 141,117 83,009 1,023,956
------------ ------------ ----------- -----------
Net increase in net assets
resulting from operations ............ 93,703 297,566 817,223 2,617,826
------------ ------------ ----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income:
A Class .............................. (57,710) (125,449) (745,978) (1,354,012)
B Class .............................. (23,170) (30,887) (41,986) (65,438)
C Class .............................. (1,843) (1,855) (20,693) (26,356)
------------ ------------ ----------- -----------
(82,723) (158,191) (808,657) (1,445,806)
------------ ------------ ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class .............................. 87,145 404,281 5,282,404 7,121,843
B Class .............................. 288,523 522,233 742,388 505,833
C Class .............................. 230,500 46,196 611,282 347,276
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class .............................. 26,395 63,054 374,057 758,408
B Class .............................. 13,483 19,999 24,326 42,097
C Class .............................. 1,233 913 18,102 24,405
------------ ------------ ----------- -----------
647,279 1,056,676 7,052,559 8,799,862
------------ ------------ ----------- -----------
COST OF SHARES REPURCHASED:
A Class .............................. (184,727) (577,974) (1,942,918) (6,376,585)
B Class .............................. (29,306) (131,521) (174,851) (20,571)
C Class .............................. -- -- (13,436) (262,082)
------------ ------------ ----------- -----------
(214,033) (709,495) (2,131,205) (6,659,238)
------------ ------------ ----------- -----------
Increase (decrease) in net assets derived
from capital share transactions ...... 433,246 347,181 4,921,354 2,140,624
------------ ------------ ----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS ........................ 444,226 486,556 4,929,920 3,312,644
NET ASSETS:
Beginning of period ..................... 3,403,972 2,917,416 33,499,274 30,186,630
------------ ------------ ----------- -----------
End of period ........................... $ 3,848,198 $ 3,403,972 $38,429,194 $33,499,274
============ ============ ============ ===========
</TABLE>
See accompanying notes
<PAGE>
30 for tax-exempt income
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE IDAHO FUND - CLASS A
--------------------------------------------------
SIX MONTHS ENDED YEAR YEAR PERIOD
6/30/98(1) ENDED ENDED 1/4/95(2) TO
(UNAUDITED) 12/31/97(5) 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 ....................................... 0.268 0.551 0.580 0.600
Net realized and unrealized gain (loss)
on investments ............................................. 0.020 0.552 (0.120) 1.100
---------- -------- -------- -----------
Total from investment operations ............................ 0.288 1.103 0.460 1.700
---------- -------- -------- -----------
Less dividends and distributions:
Dividends from net investment income ........................ (0.268) (0.563) (0.570) (0.600)
Distributions from net realized gain on security
transactions ............................................... -- -- -- (0.080)
---------- -------- -------- -----------
Total dividends and distributions ........................... (0.268) (0.563) (0.570) (0.680)
---------- -------- -------- -----------
Net asset value, end of period ................................. $ 11.470 $ 11.450 $ 10.910 $ 11.020
========== ======== ======== ===========
Total return(3)................................................. 2.55% 10.41% 4.36% 17.48%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ..................... $ 37,642 $ 33,788 $ 27,684 $ 13,540
Ratio of expenses to average net assets ..................... 0.91% 0.87% 0.60% 0.26%(4)
Ratio of expenses to average net assets prior to
expense limitation ......................................... 0.99% 1.02% 1.10% 1.25%(4)
Ratio of net investment income to average net assets ........ 4.72% 4.98% 5.29% 5.24%(4)
Ratio of net investment income to average net assets prior to
expense limitation ......................................... 4.64% 4.83% 4.79% 4.25%(4)
Portfolio turnover .......................................... 6% 19% 35% 42%
</TABLE>
- -----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencement of operations.
(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.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 31
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE IDAHO FUND - CLASS B
-------------------------------------------------------
SIX MONTHS YEAR YEAR PERIOD
ENDED 6/30/98(1) ENDED ENDED 3/16/95(2) TO
(UNAUDITED) 12/31/97(5) 12/31/96 12/31/95
<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 .................................... 0.225 0.487 0.520 0.420
Net realized and unrealized gain (loss)
on investments ....................................... 0.020 0.560 (0.130) 0.590
------- -------- ------- -------
Total from investment operations ......................... 0.245 1.047 0.390 1.010
------- -------- ------- -------
Less dividends and distributions:
Dividends from net investment income ..................... (0.225) (0.497) (0.510) (0.420)
Distributions from net realized gain on
security transactions ................................ -- -- -- (0.080)
------- -------- ------- -------
Total dividends and distributions ........................ (0.225) (0.497) (0.510) (0.500)
------- -------- ------- -------
Net asset value, end of period .............................. $11.460 $11.440 $10.890 $11.010
======= ======== ======= =======
Total return(3) ............................................. 2.17% 9.87% 3.75% 9.86%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $7,429 $6,827 $4,945 $1,977
Ratio of expenses to average net assets .................. 1.66% 1.46% 1.11% 0.79%(4)
Ratio of expenses to average net assets prior to
expense limitation ................................... 1.74% 1.61% 1.85% 1.90%(4)
Ratio of net investment income to average net assets ..... 3.97% 4.39% 4.78% 4.68%(4)
Ratio of net investment income to average net assets
prior to expense limitation .......................... 3.89% 4.24% 4.04% 3.57%(4)
Portfolio turnover ....................................... 6% 19% 35% 42%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE IDAHO FUND - CLASS C
----------------------------------------------------------
SIX MONTHS YEAR YEAR PERIOD
ENDED 6/30/98(1) ENDED ENDED 1/11/95(2) TO
(UNAUDITED) 12/31/97(5) 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 .................................... 0.231 0.459 0.500 0.500
Net realized and unrealized gain (loss)
on investments ....................................... 0.025 0.549 (0.130) 1.060
------- ------- ------- -------
Total from investment operations ......................... 0.256 1.008 0.370 1.560
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ..................... (0.226) (0.478) (0.490) (0.500)
Distributions from net realized gain on
security transactions ................................ -- -- -- (0.080)
------- ------- ------- -------
Total dividends and distributions ........................ (0.226) (0.478) (0.490) (0.580)
------- ------- ------- -------
Net asset value, end of period .............................. $11.460 $11.430 $10.900 $11.020
======= ======= ======= =======
Total return(3) ............................................. 2.26% 9.49% 3.48% 15.81%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $1,532 $1,125 $822 $789
Ratio of expenses to average net assets .................. 1.66% 1.62% 1.33% 1.05%(4)
Ratio of expenses to average net assets prior to
expense limitation ................................... 1.74% 1.77% 1.82% 2.00%(4)
Ratio of net investment income to average net assets ..... 3.97% 4.23% 4.57% 4.48%(4)
Ratio of net investment income to average net assets
prior to expense limitation .......................... 3.89% 4.08% 4.08% 3.53%(4)
Portfolio turnover ....................................... 6% 19% 35% 42%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencement of operations.
(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.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
32 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE IOWA FUND - CLASS A
--------------------------------------------------------------------------
SIX MONTHS ENDED YEAR YEAR YEAR FOUR MONTHS YEAR
6/30/98(1) ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/97(4) 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 ................ $10.060 $9.620 $9.830 $8.560 $9.260 $10.000
Income from investment operations:
Net investment income ............................ 0.220 0.449 0.440 0.450 0.170 0.490
Net realized and unrealized gain (loss)
on investments ............................... 0.020 0.440 (0.210) 1.290 (0.720) (0.740)
------- ------ ------ ------ ------ -------
Total from investment operations ................. 0.240 0.889 0.230 1.740 (0.550) (0.250)
------- ------ ------ ------ ------ -------
Less dividends and distributions:
Dividends from net investment income ............. (0.220) (0.449) (0.440) (0.470) (0.150) (0.490)
------- ------ ------ ------ ------ -------
Total dividends and distributions ................ (0.220) (0.449) (0.440) (0.470) (0.150) (0.490)
------- ------ ------ ------ ------ -------
Net asset value, end of period ...................... $10.080 $10.060 $9.620 $9.830 $8.560 $9.260
======= ======= ====== ====== ====== =======
Total return(2) ..................................... 2.41% 9.49% 2.56% 20.80% (5.86)% (2.67)%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......... $39,133 $38,343 $40,037 $42,374 $32,373 $38,669
Ratio of expenses to average net assets .......... 0.95% 0.91% 0.92% 0.72% 0.11%(3) 0.12%
Ratio of expenses to average net assets
prior to expense limitation .................. 1.07% 0.97% 1.06% 1.06% 1.25%(3) 1.25%
Ratio of net investment income to average
net assets ................................... 4.41% 4.62% 4.68% 4.88% 5.71%(3) 4.89%
Ratio of net investment income to average
net assets prior to expense limitation ....... 4.29% 4.56% 4.54% 4.54% 4.57%(3) 3.76%
Portfolio turnover ............................... 16% 14% 14% 21% 7% 119%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 33
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE IOWA FUND - CLASS B
------------------------------------------------------
SIX MONTHS YEAR YEAR PERIOD
ENDED 6/30/98(1) ENDED ENDED 3/24/95(2) TO
(UNAUDITED) 12/31/97(5) 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 .................................... 0.182 0.366 0.380 0.310
Net realized and unrealized gain (loss)
on investments ....................................... 0.020 0.457 (0.220) 0.640
------- ------- ------ ------
Total from investment operations ......................... 0.202 0.823 0.160 0.950
------- ------- ------ ------
Less dividends and distributions:
Dividends from net investment income ..................... (0.182) (0.373) (0.380) (0.300)
------- ------- ------ ------
Total dividends and distributions ........................ (0.182) (0.373) (0.380) (0.300)
------- ------- ------ ------
Net asset value, end of period .............................. $10.080 $10.060 $9.610 $9.830
======= ======= ====== ======
Total return(3) ............................................. 2.03% 8.75% 1.76% 10.62%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $3,686 $2,910 $1,645 $819
Ratio of expenses to average net assets .................. 1.70% 1.67% 1.61% 1.28%(4)
Ratio of expenses to average net assets prior to
expense limitation ................................... 1.82% 1.73% 1.81% 1.65%(4)
Ratio of net investment income to average net assets ..... 3.64% 3.86% 3.97% 4.06%(4)
Ratio of net investment income to average net assets
prior to expense limitation .......................... 3.52% 3.80% 3.77% 3.69%(4)
Portfolio turnover ....................................... 16% 14% 14% 21%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE IOWA FUND - CLASS C
----------------------------------------------------
SIX MONTHS YEAR YEAR PERIOD
ENDED 6/30/98(1) ENDED ENDED 1/4/95(2) TO
(UNAUDITED) 12/31/97(5) 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 .................................... 0.182 0.360 0.360 0.370
Net realized and unrealized gain (loss)
on investments ....................................... 0.020 0.456 (0.220) 1.280
------- ------- ------ ------
Total from investment operations ......................... 0.202 0.816 0.140 1.650
------- ------- ------ ------
Less dividends and distributions:
Dividends from net investment income ..................... (0.182) (0.366) (0.360) (0.370)
------- ------- ------ ------
Total dividends and distributions ........................ (0.182) (0.366) (0.360) (0.370)
------- ------- ------ ------
Net asset value, end of period .............................. $10.080 $10.060 $9.610 $9.830
======= ======= ====== ======
Total return(3) ............................................. 2.03% 8.68% 1.56% 19.66%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $1,101 $871 $670 $462
Ratio of expenses to average net assets .................. 1.70% 1.74% 1.75% 1.61%(4)
Ratio of expenses to average net assets prior to
expense limitation ................................... 1.82% 1.80% 1.81% 1.72%(4)
Ratio of net investment income to average net assets ..... 3.64% 3.79% 3.82% 3.74%(4)
Ratio of net investment income to average net assets
prior to expense limitation .......................... 3.52% 3.73% 3.76% 3.63%(4)
Portfolio turnover ....................................... 16% 14% 14% 21%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencement of operations.
(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.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
34 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE KANSAS FUND - CLASS A
----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR YEAR YEAR TWO MONTHS YEAR
6/30/98(1) ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/97(4) 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 .............. $11.060 $10.560 $10.730 $ 9.500 $9.630 $10.850
Income from investment operations:
Net investment income .......................... 0.263 0.526 0.520 0.560 0.090 0.570
Net realized and unrealized gain (loss)
on investments ............................. 0.040 0.506 (0.170) 1.220 (0.130) (1.210)
------- ------- ------- ------- ------ -------
Total from investment operations ............... 0.303 1.032 0.350 1.780 (0.040) (0.640)
------- ------- ------- ------- ------ -------
Less dividends and distributions:
Dividends from net investment income ........... (0.263) (0.532) (0.520) (0.550) (0.090) (0.570)
Distributions from net realized gain on
security transactions ...................... -- -- -- -- -- (0.010)
------- ------- ------- ------- ------ -------
Total dividends and distributions .............. (0.263) (0.532) (0.520) (0.550) (0.090) (0.580)
------- ------- ------- ------- ------ -------
Net asset value, end of period .................... $11.100 $11.060 $10.560 $10.730 $9.500 $ 9.630
======= ======= ======= ======= ====== =======
Total return(2) ................................... 2.76% 10.06% 3.43% 19.13% (0.38)% (6.10)%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........ $12,194 $10,663 $10,176 $10,677 $7,355 $6,469
Ratio of expenses to average net assets ........ 0.87% 0.84% 0.83% 0.37% 0.01%(3) 0.06%
Ratio of expenses to average net assets
prior to expense limitation ................ 1.01% 1.03% 1.21% 1.11% 1.25%(3) 1.25%
Ratio of net investment income
to average net assets ...................... 4.75% 4.92% 4.97% 5.32% 5.88%(3) 5.30%
Ratio of net investment income
to average net assets prior to
expense limitation ......................... 4.61% 4.73% 4.59% 4.58% 4.64%(3) 4.11%
Portfolio turnover ............................. 34% 30% 56% 19% 0% 38%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 35
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE KANSAS FUND - CLASS B
---------------------------------------------------
SIX MONTHS YEAR YEAR PERIOD
ENDED 6/30/98(1) ENDED ENDED 4/8/95(2) TO
(UNAUDITED) 12/31/97(5) 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 .................................... 0.222 0.440 0.450 0.340
Net realized and unrealized gain (loss)
on investments ....................................... 0.029 0.516 (0.170) 0.540
------- ------- ------- -------
Total from investment operations ......................... 0.251 0.956 0.280 0.880
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ..................... (0.221) (0.446) (0.450) (0.330)
------- ------- ------- -------
Total dividends and distributions ........................ (0.221) (0.446) (0.450) (0.330)
------- ------- ------- -------
Net asset value, end of period .............................. $11.110 $11.080 $10.570 $10.740
======= ======= ======= =======
Total return(3) ............................................. 2.28% 9.28% 2.69% 8.76%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $3,885 $3,452 $2,402 $677
Ratio of expenses to average net assets .................. 1.62% 1.61% 1.61% 0.94%(4)
Ratio of expenses to average net assets prior to
expense limitation ................................... 1.76% 1.80% 2.00% 1.68%(4)
Ratio of net investment income to average net assets ..... 4.01% 4.15% 4.16% 4.63%(4)
Ratio of net investment income to average net assets
prior to expense limitation .......................... 3.87% 3.96% 3.77% 3.89%(4)
Portfolio turnover ....................................... 34% 30% 56% 19%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE KANSAS FUND - CLASS C
---------------------------------------------------------
SIX MONTHS YEAR YEAR PERIOD
ENDED 6/30/98(1) ENDED ENDED 4/12/95(2) TO
(UNAUDITED) 12/31/97(5) 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 .................................... 0.222 0.439 0.430 0.320
Net realized and unrealized gain (loss)
on investments ....................................... 0.039 0.504 (0.170) 0.510
------- ------- ------- -------
Total from investment operations ......................... 0.261 0.943 0.260 0.830
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ..................... (0.221) (0.443) (0.430) (0.310)
------- ------- ------- -------
Total dividends and distributions ........................ (0.221) (0.443) (0.430) (0.310)
------- ------- ------- -------
Net asset value, end of period .............................. $11.090 $11.050 $10.550 $10.720
======= ======= ======= =======
Total return(3) ............................................. 2.38% 9.17% 2.52% 8.29%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $118 $108 $90 $40
Ratio of expenses to average net assets .................. 1.62% 1.64% 1.77% 1.27%(4)
Ratio of expenses to average net assets prior to
expense limitation ................................... 1.76% 1.83% 2.00% 1.79%(4)
Ratio of net investment income to average net assets ..... 4.01% 4.12% 4.02% 4.21%(4)
Ratio of net investment income to average net assets
prior to expense limitation .......................... 3.87% 3.93% 3.79% 3.69%(4)
Portfolio turnover ....................................... 34% 30% 56% 19%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencement of operations.
(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.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
36 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE MISSOURI INSURED FUND - CLASS A
--------------------------------------------------------------------------
SIX MONTHS ENDED YEAR YEAR YEAR TWO MONTHS YEAR
6/30/98(1) ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/97(4) 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 $10.820
Income from investment operations:
Net investment income ............................ 0.250 0.504 0.520 0.520 0.100 0.550
Net realized and unrealized gain (loss)
on investments ............................... (0.010) 0.446 (0.180) 1.290 (0.110) (1.430)
------- ------- ------- ------- ------ -------
Total from investment operations ................. 0.240 0.950 0.340 1.810 (0.010) (0.880)
------- ------- ------- ------- ------ -------
Less dividends and distributions:
Dividends from net investment income ............. (0.250) (0.510) (0.510) (0.540) (0.090) (0.540)
Distributions from net realized gain
on security transactions ..................... -- -- -- -- -- (0.030)
------- ------- ------- ------- ------ -------
Total dividends and distributions ................ (0.250) (0.510) (0.510) (0.540) (0.090) (0.570)
------- ------- ------- ------- ------ -------
Net asset value, end of period ...................... $10.800 $10.810 $10.370 $10.540 $9.270 $ 9.370
======= ======= ======= ======= ====== =======
Total return(2) ..................................... 2.24% 9.43% 3.41% 19.96% (0.07)% (8.28)%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......... $47,378 $48,565 $49,301 $50,211 $37,790 $37,384
Ratio of expenses to average net assets .......... 0.91% 0.91% 0.71% 0.50% 0.11%(3) 0.15%
Ratio of expenses to average net assets prior
to expense limitation ........................ 1.01% 0.93% 1.03% 1.07% 1.12%(3) 1.13%
Ratio of net investment income to average
net assets ................................... 4.67% 4.81% 5.05% 5.25% 6.00%(3) 5.39%
Ratio of net investment income to average net
assets prior to expense limitation ........... 4.57% 4.79% 4.73% 4.68% 4.99%(3) 4.41%
Portfolio turnover ............................... 17% 12% 28% 31% 8% 32%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 37
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE MISSOURI INSURED FUND - CLASS B
-------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR YEAR TWO MONTHS PERIOD
ENDED 6/30/98(1) ENDED ENDED ENDED ENDED 3/12/94(2) TO
(UNAUDITED) 12/31/97(5) 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 ........................... 0.210 0.425 0.460 0.480 0.080 0.330
Net realized and unrealized gain (loss)
on investments .............................. (0.020) 0.451 (0.180) 1.280 (0.100) (0.940)
------- ------- ------- ------- ------ -------
Total from investment operations ................ 0.190 0.876 0.280 1.760 (0.020) (0.610)
------- ------- ------- ------- ------ -------
Less dividends and distributions:
Dividends from net investment income ............ (0.210) (0.436) (0.450) (0.490) (0.080) (0.320)
------- ------- ------- ------- ------ -------
Total dividends and distributions ............... (0.210) (0.436) (0.450) (0.490) (0.080) (0.320)
------- ------- ------- ------- ------ -------
Net asset value, end of period ..................... $10.790 $10.810 $10.370 $10.540 $9.270 $ 9.370
======= ======= ======= ======= ====== =======
Total return(3) .................................... 1.77% 8.66% 2.93% 19.18% (0.14)% (6.16)%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ......... $11,269 $11,507 $10,432 $6,195 $2,742 $1,701
Ratio of expenses to average net assets ......... 1.66% 1.61% 1.29% 0.97% 0.60%(4) 0.49%(4)
Ratio of expenses to average net assets
prior to expense limitation ................. 1.76% 1.63% 1.78% 1.81% 1.84%(4) 1.83%(4)
Ratio of net investment income to
average net assets .......................... 3.92% 4.11% 4.46% 4.70% 5.32%(4) 4.89%(4)
Ratio of net investment income to average
net assets prior to expense limitation ...... 3.82% 4.09% 3.97% 3.86% 4.08%(4) 3.55%(4)
Portfolio turnover .............................. 17% 12% 28% 31% 8% 32%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE MISSOURI INSURED FUND - CLASS C
----------------------------------------------------------
SIX MONTHS YEAR YEAR PERIOD
ENDED 6/30/98(1) ENDED ENDED 11/11/95(2) TO
(UNAUDITED) 12/31/97(5) 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 ........................... 0.210 0.405 0.430 0.060
Net realized and unrealized gain (loss)
on investments .............................. (0.010) 0.455 (0.180) 0.170
------- ------ ------ ------
Total from investment operations ................ 0.200 0.860 0.250 0.230
------- ------ ------ ------
Less dividends and distributions:
Dividends from net investment income ............ (0.210) (0.420) (0.420) (0.050)
------- ------ ------ ------
Total dividends and distributions ............... (0.210) (0.420) (0.420) (0.050)
------- ------ ------ ------
Net asset value, end of period ..................... $10.800 $10.810 $10.370 $10.540
======= ======= ======= =======
Total return(3) .................................... 1.86% 8.49% 2.48% 2.24%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ......... $111 $225 $152 $20
Ratio of expenses to average net assets ......... 1.66% 1.74% 1.62% 1.22%(4)
Ratio of expenses to average net assets
prior to expense limitation ................. 1.76% 1.76% 1.78% 1.55%(4)
Ratio of net investment income to
average net assets .......................... 3.92% 3.98% 4.10% 4.09%(4)
Ratio of net investment income to average
net assets prior to expense limitation ...... 3.82% 3.96% 3.94% 3.76%(4)
Portfolio turnover .............................. 17% 12% 28% 31%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencement of operations.
(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.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
38 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE NORTH DAKOTA FUND - CLASS A
-----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR YEAR YEAR YEAR YEAR
6/30/98(1) ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/97(3) 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 ........................ 0.274 0.546 0.540 0.540 0.560 0.580
Net realized and unrealized gain
(loss) on investments .................... 0.030 0.451 (0.130) 1.180 (1.150) 0.580
------- ------- ------- ------- ------- -------
Total from investment operations ............. 0.304 0.997 0.410 1.720 (0.590) 1.160
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ......... (0.274) (0.557) (0.530) (0.570) (0.530) (0.580)
Distributions from net realized gain
on security transactions ................. -- -- -- -- (0.080) (0.100)
In excess of net realized gains .............. -- -- -- -- (0.020) --
------- ------- ------- ------- ------- -------
Total dividends and distributions ............ (0.274) (0.557) (0.530) (0.570) (0.630) (0.680)
------- ------- ------- ------- ------- -------
Net asset value, end of period .................. $11.350 $11.320 $10.880 $11.000 $ 9.850 $11.070
======= ======= ======= ======= ======= =======
Total return(2) ................................. 2.70% 9.43% 3.89% 17.81% (5.47)% 11.20%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ...... $30,612 $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 .............. 1.14% 1.04% 1.08% 1.05% 1.14% 1.25%
Ratio of net investment income to average
net assets ............................... 4.84% 4.97% 5.01% 5.07% 5.36% 5.11%
Ratio of net investment income to average
net assets prior to expense limitation ... 4.70% 4.93% 4.81% 4.83% 4.68% 4.45%
Portfolio turnover ........................... 31% 41% 58% 45% 33% 27%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 39
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE NORTH DAKOTA FUND - CLASS B
-----------------------------------------------------------------
SIX MONTHS YEAR YEAR YEAR PERIOD FROM
ENDED 6/30/98(1) ENDED ENDED ENDED 5/10/94(2) TO
(UNAUDITED) 12/31/97(5) 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 ................................... 0.232 0.484 0.490 0.480 0.300
Net realized and unrealized gain (loss)
on investments ...................................... 0.030 0.451 (0.130) 1.180 (0.390)
------- ------- ------- ------- -------
Total from investment operations ........................ 0.262 0.935 0.360 1.660 (0.090)
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .................... (0.232) (0.495) (0.480) (0.510) (0.270)
Distributions from net realized gain on
security transactions ............................... -- -- -- -- (0.080)
In excess of net realized gains ......................... -- -- -- -- (0.020)
------- ------- ------- ------- -------
Total dividends and distributions ....................... (0.232) (0.495) (0.480) (0.510) (0.370)
------- ------- ------- ------- -------
Net asset value, end of period ............................. $11.350 $11.320 $10.880 $11.000 $ 9.850
======= ======= ======= ======= =======
Total return(3) ............................................ 2.31% 8.82% 3.39% 17.24% (0.77)%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $928 $889 $700 $375 $144
Ratio of expenses to average net assets ................. 1.75% 1.55% 1.36% 1.29% 0.99%(4)
Ratio of expenses to average net assets
prior to expense limitation ......................... 1.89% 1.59% 1.83% 1.79% 1.89%(4)
Ratio of net investment income to average
net assets .......................................... 4.09% 4.42% 4.52% 4.56% 4.97%(4)
Ratio of net investment income to average
net assets prior to expense limitation .............. 3.95% 4.38% 4.05% 4.06% 4.07%(4)
Portfolio turnover ...................................... 31% 41% 58% 45% 33%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE NORTH DAKOTA - CLASS C
-------------------------------------------------------
SIX MONTHS YEAR YEAR PERIOD FROM
ENDED 6/30/98(1) ENDED ENDED 7/29/95(2) TO
(UNAUDITED) 12/31/97(5) 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 ................................... 0.232 0.441 0.440 0.170
Net realized and unrealized gain (loss)
on investments ...................................... 0.020 0.468 (0.140) 0.500
------- ------- ------- -------
Total from investment operations ........................ 0.252 0.909 0.300 0.670
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .................... (0.232) (0.459) (0.430) (0.180)
Distributions from net realized gain on
security transactions ............................... -- -- -- --
In excess of net realized gains ......................... -- -- -- --
------- ------- ------- -------
Total dividends and distributions ....................... (0.232) (0.459) (0.430) (0.180)
------- ------- ------- -------
Net asset value, end of period ............................. $11.340 $11.320 $10.870 $11.000
======= ======= ======= =======
Total return(3) ............................................ 2.23% 8.57% 2.81% 6.47%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $42 $41 $40 $20
Ratio of expenses to average net assets ................. 1.75% 1.87% 1.75% 1.73%(4)
Ratio of expenses to average net assets
prior to expense limitation ......................... 1.89% 1.91% 1.75% 1.73%(4)
Ratio of net investment income to average
net assets .......................................... 4.09% 4.10% 4.06% 4.00%(4)
Ratio of net investment income to average
net assets prior to expense limitation .............. 3.95% 4.06% 4.06% 4.00%(4)
Portfolio turnover ...................................... 31% 41% 58% 45%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencement of operations.
(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.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
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>
TAX-FREE OREGON INSURED FUND - CLASS A
-----------------------------------------------------------------------------
SIX MONTHS ENDED YEAR YEAR YEAR TWO MONTHS YEAR
6/30/98(1) ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/97(4) 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 $10.240
Income from investment operations:
Net investment income ........................... 0.240 0.481 0.480 0.490 0.090 0.500
Net realized and unrealized gain
(loss) on investments ......................... 0.040 0.444 (0.180) 1.140 (0.090) (1.240)
-------- -------- -------- -------- -------- --------
Total from investment operations ................ 0.280 0.925 0.300 1.630 0.000 (0.740)
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ............ (0.240) (0.485) (0.480) (0.500) (0.080) (0.500)
-------- -------- -------- -------- -------- --------
Total dividends and distributions ............... (0.240) (0.485) (0.480) (0.500) (0.080) (0.500)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ..................... $10.350 $10.310 $ 9.870 $10.050 $8.920 $ 9.000
======== ======== ======== ======== ======== ========
Total return(2) .................................... 2.73% 9.66% 3.15% 18.71% 0.06% (7.35)%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ......... $23,595 $22,071 $20,913 $21,590 $14,650 $14,086
Ratio of expenses to average net assets ......... 0.71% 0.71% 0.71% 0.54% 0.05%(3) 0.03%
Ratio of expenses to average net assets prior
to expense limitation ......................... 1.03% 0.94% 1.07% 1.11% 1.25%(3) 1.25%
Ratio of net investment income to average
net assets .................................... 4.65% 4.83% 4.92% 5.12% 5.79%(3) 5.17%
Ratio of net investment income to average
net assets prior to expense limitation ........ 4.33% 4.60% 4.56% 4.55% 4.59%(3) 3.95%
Portfolio turnover .............................. 7% 5% 40% 41% 5% 49%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(3) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<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>
TAX-FREE OREGON INSURED FUND - CLASS B
------------------------------------------------------------------------------
SIX MONTHS YEAR YEAR YEAR TWO MONTHS PERIOD
ENDED 6/30/98(1) ENDED ENDED ENDED ENDED 3/12/94(2) TO
(UNAUDITED) 12/31/97(5) 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 ........................ 0.201 0.422 0.430 0.440 0.080 0.270
Net realized and unrealized gain
(loss) on investments ...................... 0.040 0.434 (0.180) 1.140 (0.090) (0.850)
-------- -------- -------- -------- -------- --------
Total from investment operations ............. 0.241 0.856 0.250 1.580 (0.010) (0.580)
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ......... (0.201) (0.416) (0.430) (0.450) (0.070) (0.270)
-------- -------- -------- -------- -------- --------
Total dividends and distributions ............ (0.201) (0.416) (0.430) (0.450) (0.070) (0.270)
-------- -------- -------- -------- -------- --------
Net asset value, end of period .................. $10.350 $10.310 $ 9.870 $10.050 $8.920 $9.000
======== ======== ======== ======== ========= ========
Total return(3) ................................. 2.35% 8.90% 2.61% 18.10% 0.03% (5.95)%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ...... $5,824 $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%(4) 0.75%(4)
Ratio of expenses to average net assets
prior to expense limitation ................ 1.78% 1.62% 1.83% 1.86% 2.00%(4) 2.00%(4)
Ratio of net investment income to
average net assets ......................... 3.90% 4.15% 4.37% 4.57% 5.19%(4) 4.43%(4)
Ratio of net investment income to average
net assets prior to expense limitation ..... 3.58% 3.92% 3.79% 3.75% 3.79%(4) 3.18%(4)
Portfolio turnover ........................... 7% 5% 40% 41% 5% 49%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE OREGON INSURED FUND - CLASS C
-----------------------------------------------
SIX MONTHS YEAR YEAR PERIOD
ENDED 6/30/98(1) ENDED ENDED 7/7/95(2) TO
(UNAUDITED) 12/31/97(5) 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 ........................ 0.199 0.411 0.400 0.190
Net realized and unrealized gain
(loss) on investments ...................... 0.042 0.431 (0.170) 0.410
-------- -------- -------- --------
Total from investment operations ............. 0.241 0.842 0.230 0.600
-------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ......... (0.201) (0.402) (0.400) (0.180)
-------- -------- -------- --------
Total dividends and distributions ............ (0.201) (0.402) (0.400) (0.180)
-------- -------- -------- --------
Net asset value, end of period .................. $10.360 $10.320 $ 9.880 $10.050
======== ======== ======== ========
Total return(3) ................................. 2.35% 8.75% 2.38% 6.35%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ...... $992 $532 $360 $250
Ratio of expenses to average net assets ...... 1.46% 1.51% 1.55% 1.39%(4)
Ratio of expenses to average net assets
prior to expense limitation ................ 1.78% 1.74% 1.82% 1.74%(4)
Ratio of net investment income to
average net assets ......................... 3.90% 4.03% 4.03% 4.00%(4)
Ratio of net investment income to average
net assets prior to expense limitation ..... 3.58% 3.80% 3.76% 3.65%(4)
Portfolio turnover ........................... 7% 5% 40% 41%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencement of operations.
(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.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur
Fund Managers, Inc. as the Fund's investment manager.
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>
TAX-FREE WASHINGTON INSURED FUND - CLASS A
-----------------------------------------------------------------------
SIX MONTHS ENDED YEAR YEAR YEAR TWO MONTHS YEAR
6/30/98(1) ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/97(4) 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 ................ $10.770 $10.300 $10.440 $ 9.210 $9.370 $10.670
Income from investment operations:
Net investment income ............................ 0.268 0.541 0.540 0.590 0.090 0.550
Net realized and unrealized gain
(loss) on investments ........................... 0.030 0.481 (0.140) 1.210 (0.160) (1.260)
-------- -------- -------- -------- -------- --------
Total from investment operations ................. 0.298 1.022 0.400 1.800 (0.070) (0.710)
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ............. (0.268) (0.552) (0.540) (0.570) (0.090) (0.570)
Distributions from net realized gain on
security transactions ........................... -- -- -- -- -- (0.020)
-------- -------- -------- -------- -------- --------
Total dividends and distributions ................ (0.268) (0.552) (0.540) (0.570) (0.090) (0.590)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ...................... $10.800 $10.770 $10.300 $10.440 $9.210 $ 9.370
======== ======== ======== ======== ======== ========
Total return(2) ..................................... 2.78% 10.23% 3.98% 19.94% (0.69)% (6.85)%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......... $2,308 $2,372 $2,382 $2,099 $2,049 $2,118
Ratio of expenses to average net assets .......... 0.50% 0.49% 0.44% 0.28% 0.10%(3) 0.14%
Ratio of expenses to average net assets prior
to expense limitation ........................... 1.25% 1.38% 1.25% 1.25% 1.25%(3) 1.25%
Ratio of net investment income to average
net assets ...................................... 4.95% 5.20% 5.29% 5.57% 6.18%(3) 5.44%
Ratio of net investment income to average
net assets prior to expense limitation .......... 4.20% 4.31% 4.48% 4.60% 5.03%(3) 4.33%
Portfolio turnover ............................... 1% 20% 33% 51% -- --
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(3) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 43
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
TAX-FREE WASHINGTON INSURED FUND - CLASS B
-----------------------------------------------
SIX MONTHS YEAR YEAR PERIOD
ENDED 6/30/98(1) ENDED ENDED 10/24/95(2) TO
(UNAUDITED) 12/31/97(5) 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 .................................... 0.228 0.471 0.470 0.090
Net realized and unrealized gain (loss) on investments ... 0.040 0.470 (0.140) 0.250
-------- -------- -------- --------
Total from investment operations ......................... 0.268 0.941 0.330 0.340
-------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ..................... (0.228) (0.471) (0.460) (0.080)
-------- -------- -------- --------
Total dividends and distributions ........................ (0.228) (0.471) (0.460) (0.080)
-------- -------- -------- --------
Net asset value, end of period .............................. $10.820 $10.780 $10.310 $10.440
======== ======== ======== ========
Total return(3) ............................................. 2.49% 9.38% 3.32% 3.30%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $1,239 $963 $516 $15
Ratio of expenses to average net assets .................. 1.25% 1.24% 1.21% 1.04%(4)
Ratio of expenses to average net assets prior to
expense limitation ...................................... 2.00% 2.13% 2.00% 2.00%(4)
Ratio of net investment income to average net assets ..... 4.20% 4.45% 4.47% 4.44%(4)
Ratio of net investment income to average net assets
prior to expense limitation ............................. 3.45% 3.56% 3.68% 3.48%(4)
Portfolio turnover ....................................... 1% 20% 33% 51%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE WASHINGTON INSURED FUND - CLASS C
----------------------------------------------------
SIX MONTHS YEAR YEAR PERIOD
ENDED 6/30/98(1) ENDED ENDED 4/21/95(2) TO
(UNAUDITED) 12/31/97(5) 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 .................................... 0.228 0.465 0.450 0.310
Net realized and unrealized gain (loss) on investments ... 0.040 0.469 (0.140) 0.480
-------- -------- -------- --------
Total from investment operations ......................... 0.268 0.934 0.310 0.790
-------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ..................... (0.228) (0.464) (0.440) (0.300)
-------- -------- -------- --------
Total dividends and distributions ........................ (0.228) (0.464) (0.440) (0.300)
-------- -------- -------- --------
Net asset value, end of period .............................. $10.810 $10.770 $10.300 $10.430
======== ======== ======== ========
Total return(3) ............................................. 2.49% 9.31% 3.12% 8.13%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $301 $69 $19 $19
Ratio of expenses to average net assets .................. 1.25% 1.29% 1.37% 1.30%(4)
Ratio of expenses to average net assets prior to
expense limitation ...................................... 2.00% 2.18% 2.00% 2.00%(4)
Ratio of net investment income to average net assets ..... 4.20% 4.40% 4.36% 4.45%(4)
Ratio of net investment income to average net assets
prior to expense limitation ............................. 3.45% 3.51% 3.73% 3.75%(4)
Portfolio turnover ....................................... 1% 20% 33% 51%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencement of operations.
(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.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<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>
TAX-FREE WISCONSIN FUND - CLASS A
---------------------------------------------------------------------------
SIX MONTHS ENDED YEAR YEAR YEAR FOUR MONTHS YEAR
6/30/98(1) ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/97(4) 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 ........................... 0.222 0.466 0.460 0.480 0.160 0.490
Net realized and unrealized gain
(loss) on investments .......................... (0.010) 0.383 (0.140) 1.040 (0.550) (0.720)
-------- -------- -------- -------- -------- --------
Total from investment operations ................ 0.212 0.849 0.320 1.520 (0.390) (0.230)
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ............ (0.222) (0.479) (0.460) (0.480) (0.150) (0.490)
-------- -------- -------- -------- -------- --------
Total dividends and distributions ............... (0.222) (0.479) (0.460) (0.480) (0.150) (0.490)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ..................... $10.000 $10.010 $9.640 $9.780 $8.740 $ 9.280
======== ======== ======== ======== ======== ========
Total return(2) .................................... 2.19% 9.07% 3.49% 17.74% (4.12)% (2.40)%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ......... $34,602 $30,879 $28,292 $26,449 $20,167 $16,093
Ratio of expenses to average net assets ......... 0.99% 0.99% 0.98% 0.88% 0.08%(3) 0.04%
Ratio of expenses to average net
assets prior to expense limitation ............. 1.03% 1.07% 1.09% 1.09% 1.25%(3) 1.25%
Ratio of net investment income to
average net assets ............................. 4.57% 4.76% 4.90% 5.05% 5.54%(3) 4.89%
Ratio of net investment income to average
net assets prior to expense limitation ......... 4.53% 4.68% 4.79% 4.84% 4.37%(3) 3.68%
Portfolio turnover .............................. 16% 30% 38% 12% 20% 86%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(3) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 45
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
TAX-FREE WISCONSIN FUND - CLASS B
------------------------------------------------
SIX MONTHS YEAR YEAR PERIOD
ENDED 6/30/98(1) ENDED ENDED 4/22/95(2) TO
(UNAUDITED) 12/31/97(5) 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 ..................................... 0.189 0.395 0.410 0.280
Net realized and unrealized gain
(loss) on investments .................................... 0.002 0.382 (0.140) 0.370
-------- -------- -------- --------
Total from investment operations .......................... 0.191 0.777 0.270 0.650
-------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ...................... (0.191) (0.407) (0.410) (0.270)
-------- -------- -------- --------
Total dividends and distributions ......................... (0.191) (0.407) (0.410) (0.270)
-------- -------- -------- --------
Net asset value, end of period ............................... $10.000 $10.000 $9.630 $9.770
======== ======== ======== ========
Total return(3) .............................................. 1.91% 8.27% 2.84% 7.08%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $2,523 $1,931 $1,339 $725
Ratio of expenses to average net assets ................... 1.74% 1.72% 1.66% 1.45%(4)
Ratio of expenses to average net assets prior to
expense limitation ....................................... 1.78% 1.80% 1.85% 1.70%(4)
Ratio of net investment income to average net assets ...... 3.82% 4.03% 4.37% 4.31%(4)
Ratio of net investment income to average net assets
prior to expense limitation .............................. 3.78% 3.95% 4.18% 4.06%(4)
Portfolio turnover ........................................ 16% 30% 38% 12%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE WISCONSIN FUND - CLASS C
-----------------------------------------------------
SIX MONTHS YEAR YEAR PERIOD
ENDED 6/30/98(1) ENDED ENDED 3/28/95(2) TO
(UNAUDITED) 12/31/97(5) 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 ..................................... 0.192 0.380 0.390 0.300
Net realized and unrealized gain
(loss) on investments .................................... (0.001) 0.390 (0.130) 0.440
-------- -------- -------- --------
Total from investment operations .......................... 0.191 0.770 0.260 0.740
-------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ...................... (0.191) (0.400) (0.390) (0.290)
-------- -------- -------- --------
Total dividends and distributions ......................... (0.191) (0.400) (0.390) (0.290)
-------- -------- -------- --------
Net asset value, end of period ............................... $10.030 $10.030 $9.660 $9.790
======== ======== ======== ========
Total return(3) .............................................. 1.90% 8.16% 2.74% 8.06%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $1,305 $689 $555 $73
Ratio of expenses to average net assets ................... 1.74% 1.81% 1.75% 1.77%(4)
Ratio of expenses to average net assets prior to
expense limitation ....................................... 1.78% 1.89% 1.83% 1.77%(4)
Ratio of net investment income to average net assets ...... 3.82% 3.94% 4.12% 4.04%(4)
Ratio of net investment income to average net assets
prior to expense limitation .............................. 3.78% 3.86% 4.04% 4.04%(4)
Portfolio turnover ........................................ 16% 30% 38% 12%
</TABLE>
- ---------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencement of operations.
(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.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
46 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
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 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.
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 agent and accounting service agent for the Funds.
2. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Money market instruments having less than 60 days to maturity are
valued at amortized cost which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at
fair value as determined in good faith by or under the direction of the Fund's
Board of Directors.
Federal Income Taxes - Each Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Funds on the basis of daily net assets of each class. Distribution
expenses relating to a specific class are charged directly to that class.
<PAGE>
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.
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 Fund expenses 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 Delaware Management Company, Inc. (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.
The management fee rates, waiver rates and total expenses absorbed by DMC for
the six months ended June 30, 1998 are as follows:
<TABLE>
<CAPTION>
MANAGEMENT OPERATING EXPENSE
FEE AS A LIMITATION AS
PERCENTAGE OF A PERCENTAGE OF EXPENSES
AVERAGE DAILY AVERAGE DAILY ABSORBED
NET ASSETS NET ASSETS BY
(PER ANNUM) (PER ANNUM) DMC
--------------- ------------------ -----------
<S> <C> <C> <C>
Tax-Free Idaho Fund ................................ 0.50% 0.75% $17,945
Tax-Free Iowa Fund ................................. 0.50% 0.75% 24,352
Tax-Free Kansas Fund ............................... 0.50% 0.75% 10,135
Tax-Free Missouri Insured Fund ..................... 0.50% 0.66% 28,365
Tax-Free North Dakota Fund ......................... 0.50% 0.75% 23,708
Tax-Free Oregon Insured Fund ....................... 0.50% 0.46% 47,448
Tax-Free Washington Insured Fund ................... 0.50% 0.25% 13,181
Tax-Free Wisconsin Fund ............................ 0.50% 0.75% 7,194
</TABLE>
The Funds have engaged Delaware Service Company, Inc. (DSC), an affiliate of
DMC, to provide dividend disbursing, transfer agent and accounting and
administration services for each Fund.
<PAGE>
for tax-exempt income 47
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. Investment Management and Other Transactions with Affiliates (Continued)
For the six months ended June 30, 1998, the amounts expensed for each Fund
were as follows:
<TABLE>
<CAPTION>
DIVIDEND
DISBURSING, ACCOUNTING
TRANSFER AGENT AND
FEES AND ADMINISTRATION
OTHER EXPENSES SERVICES
----------------- ---------------
<S> <C> <C>
Tax-Free Idaho Fund ................................ $20,928 $8,903
Tax-Free Iowa Fund ................................. 20,154 11,766
Tax-Free Kansas Fund ............................... 8,651 3,657
Tax-Free Missouri Insured Fund ..................... 26,005 18,515
Tax-Free North Dakota Fund ......................... 18,173 5,917
Tax-Free Oregon Insured Fund ....................... 13,985 5,898
Tax-Free Washington Insured Fund ................... 3,677 592
Tax-Free Wisconsin Fund ............................ 15,294 8,988
</TABLE>
On June 30, 1998, the Funds had payables to affiliates as follows:
<TABLE>
<CAPTION>
DIVIDEND DISBURSING, OTHER
INVESTMENT TRANSFER AGENT FEES, EXPENSES
MANAGEMENT ACCOUNTING SERVICES PAYABLE TO
FEES PAYABLE AND OTHER EXPENSES DMC AND
TO DMC PAYABLE TO DSC AFFILIATES
------------- ------------------- -----------
<S> <C> <C> <C>
Tax-Free Idaho Fund .......................... $21,949 $7,702 $17,310
Tax-Free Iowa Fund ........................... 37,561 8,412 14,134
Tax-Free Kansas Fund ......................... 8,517 1,969 6,538
Tax-Free Missouri Insured Fund ............... 42,089 7,065 20,918
Tax-Free North Dakota Fund ................... 30,343 4,293 9,310
Tax-Free Oregon Insured Fund ................. 12,398 3,790 11,913
Tax-Free Wisconsin Fund ...................... 29,570 6,602 12,158
</TABLE>
Pursuant to the Distribution Agreement, the Funds pay Delaware Distributors,
L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.25% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Class.
For the six months ended June 30, 1998, DDLP earned commissions on sales of
the Fund A Class shares for each Fund as follows:
DDLP EARNED
COMMISSIONS ON
SALES OF
THE FUND
A CLASS SHARES
--------------
Tax-Free Idaho Fund ................................. $20,629
Tax-Free Iowa Fund .................................. 8,462
Tax-Free Kansas Fund ................................ 3,192
Tax-Free Missouri Insured Fund ...................... 4,817
Tax-Free North Dakota Fund .......................... 1,316
Tax-Free Oregon Insured Fund ........................ 11,820
Tax-Free Washington Insured Fund .................... 441
Tax-Free Wisconsin Fund ............................. 6,864
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.
<PAGE>
48 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
4. Investments
During the six months ended June 30, 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 ....................... $7,379,429 $1,380,814
Tax-Free Iowa Fund ........................ 4,883,080 3,424,620
Tax-Free Kansas Fund ...................... 4,472,943 2,643,977
Tax-Free Missouri Insured Fund ............ 5,164,525 6,725,795
Tax-Free North Dakota Fund ................ 4,844,033 5,472,915
Tax-Free Oregon Insured Fund .............. 1,964,180 977,530
Tax-Free Washington Insured Fund .......... 147,371 20,000
Tax-Free Wisconsin Fund ................... 8,853,403 4,484,737
At June 30, 1998, the aggregate cost of securities and unrealized appreciation
(depreciation) for federal income tax purposes for each Fund were as follows:
<TABLE>
<CAPTION>
COST OF AGGREGATE UNREALIZED AGGREGATE UNREALIZED NET UNREALIZED
INVESTMENTS APPRECIATION DEPRECIATION APPRECIATION
----------- -------------------- --------------------- --------------
<S> <C> <C> <C> <C>
Tax-Free Idaho Fund $43,609,826 $2,633,457 ($10,598) $2,622,859
Tax-Free Iowa Fund 40,960,622 2,797,639 (799) 2,796,840
Tax-Free Kansas Fund 14,917,811 1,060,148 (1,934) 1,058,214
Tax-Free Missouri Insured Fund 53,703,186 4,237,191 -- 4,237,191
Tax-Free North Dakota Fund 29,114,490 1,925,532 -- 1,925,532
Tax-Free Oregon Insured Fund 27,798,591 2,325,878 -- 2,235,878
Tax-Free Washington Insured Fund 3,522,416 244,159 (488) 243,671
Tax-Free Wisconsin Fund 35,852,050 2,058,375 (3,551) 2,054,824
</TABLE>
For federal income tax purposes, as of December 31, 1997, Tax-Free Iowa Fund
had a capital loss carryforward of $1,658,076 that will expire in 2001 through
2005, Tax-Free Kansas Fund had a capital loss carryforward of $79,148 that
will expire in 2003 and 2004, Tax-Free Missouri Insured Fund had a capital
loss carryforward of $1,072,466 that will expire in 2002 through 2004,
Tax-Free North Dakota Fund had a capital loss carryforward of $44,191 that
will expire in 2004, Tax-Free Oregon Insured Fund had a capital loss
carryforward of $600,611 that will expire in 2002 through 2004, Tax-Free
Washington Insured Fund had a capital loss carryforward of $80,740 that will
expire in 2003, and Tax-Free Wisconsin had a capital loss carryforward of
$423,512 that will expire in 2001 through 2003.
<PAGE>
5. Capital Stock
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
TAX-FREE IDAHO FUND TAX-FREE IOWA FUND
------------------------ -----------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
6/30/98 12/31/97 6/30/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Shares sold:
A Class ............................................... 591,609 731,650 189,265 355,433
B Class ............................................... 83,382 183,407 77,816 135,405
C Class ............................................... 44,636 64,124 34,699 25,201
Shares issued upon reinvestment of
dividends from net investment income:
A Class ............................................... 49,012 87,352 53,023 124,468
B Class ............................................... 7,689 14,064 4,138 6,562
C Class ............................................... 1,922 3,083 993 1,110
------- -------- ------- --------
778,250 1,083,680 359,934 648,179
------- -------- ------- --------
Shares repurchased:
A Class ............................................... (310,381) (406,050) (170,871) (833,421)
B Class ............................................... (39,708) (54,443) (5,560) (23,960)
C Class ............................................... (11,210) (44,185) (13,082) (9,438)
------- -------- ------- --------
(361,299) (504,678) (189,513) (866,819)
------- -------- ------- --------
Net Increase/Decrease 416,951 579,002 170,421 (218,640)
======= ======== ======= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE KANSAS FUND TAX-FREE MISSOURI INSURED FUND
------------------------ ------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
6/30/98 12/31/97 6/30/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Shares sold:
A Class ............................................... 196,444 114,412 116,581 265,509
B Class ............................................... 35,627 89,151 30,054 200,996
C Class ............................................... 2,928 6,942 2,752 9,719
Shares issued upon reinvestment of
dividends from net investment income:
A Class ............................................... 12,720 27,906 52,859 129,146
B Class ............................................... 4,425 7,813 13,025 33,377
C Class ............................................... 179 404 230 521
------- -------- -------- --------
252,323 246,628 215,500 639,268
------- -------- -------- --------
Shares repurchased:
A Class ............................................... (74,255) (142,361) (273,678) (656,405)
B Class ............................................... (2,102) (12,598) (63,765) (175,978)
C Class ............................................... (2,285) (6,119) (13,547) (4,070)
------- -------- -------- --------
(78,642) (161,078) (350,990) (836,453)
------- -------- -------- --------
Net Increase/Decrease 173,681 85,550 (135,490) (197,185)
======= ======== ======== ========
</TABLE>
<PAGE>
for tax-exempt income 49
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. Capital Stock (continued)
<TABLE>
<CAPTION>
TAX-FREE NORTH DAKOTA FUND TAX-FREE OREGON INSURED FUND
-------------------------- ----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
6/30/98 12/31/97 6/30/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Shares sold:
A Class ............................................... 72,041 68,674 301,693 372,928
B Class ............................................... 3,338 17,635 38,713 162,406
C Class ............................................... -- -- 48,911 16,538
Shares issued upon reinvestment of
dividends from net investment income:
A Class ............................................... 40,085 95,230 30,602 61,920
B Class ............................................... 853 2,047 7,675 15,305
C Class ............................................... 74 156 867 1,157
------- -------- ------- --------
116,391 183,742 428,461 630,254
------- -------- ------- --------
Shares repurchased:
A Class ............................................... (149,092) (529,157) (192,298) (412,353)
B Class ............................................... (873) (5,593) (109,933) (33,265)
C Class ............................................... -- (274) (5,583) (2,526)
------- -------- ------- --------
(149,965) (535,024) (307,814) (448,144)
------- -------- ------- --------
Net Increase/Decrease (33,574) (351,282) 120,647 182,110
======= ======== ======= ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE WASHINGTON INSURED FUND TAX-FREE WISCONSIN FUND
---------------------------------- -----------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
6/30/98 12/31/97 6/30/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Shares sold:
A Class ............................................... 8,065 38,633 529,514 729,711
B Class ............................................... 26,685 50,130 74,315 51,892
C Class ............................................... 21,312 4,447 60,924 35,931
Shares issued upon reinvestment of dividends from
net investment income
A Class ............................................... 2,444 6,061 37,427 78,038
B Class ............................................... 1,247 1,911 2,436 4,328
C Class ............................................... 114 86 1,807 2,504
------- -------- -------- --------
59,867 101,268 706,423 902,404
------- -------- -------- --------
Shares repurchased:
A Class ............................................... (17,109) (55,657) (194,177) (657,954)
B Class ............................................... (2,717) (12,744) (17,543) (2,138)
C Class ............................................... -- -- (1,348) (27,203)
------- -------- -------- --------
(19,826) (68,401) (213,068) (687,295)
------- -------- -------- --------
Net Increase/Decrease 40,041 32,867 493,355 (215,109)
======= ======== ======== ========
</TABLE>
<PAGE>
6. Lines of Credit
The Funds have a committed line 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 amount was outstanding at June 30, 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.
<PAGE>
THIS SEMI-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 sets forth details about charges, expenses, investment
objectives and operating policies of each Fund. You should read the prospectus
carefully before you invest. Summary investment results are documented in 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.
- -------------------------------------------------------------------------------
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
DELAWARE INVESTMENTS
- ------------------------------
Philadelphia o London
Printed in the USA
on recycled paper
(936)
SA-VOY8[6/98]TKO 8/98
[photo of globes]
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
Be sure to consult your financial adviser when making investments. Mutual
funds can be a valuable part of your financial plan; however, shares of the
Funds are not FDIC or NCUSIF insured, are not guaranteed by any bank or any
credit union, and involve investment risk, including the possible loss of the
principal amount invested. Shares of the Fund are not bank or credit union
deposits.
Copy Rights Delaware Distributors, L.P.
