<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
(photo of illustration
from Tax-Exempt
Income Brochure)
service and guidance
professional management
goals
1999
Semi-Annual Report
DELAWARE
INVESTMENTS
- -------------------
Philadelphia-London
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Dear Shareholder:
OVER THE LAST SIX MONTHS, DELAWARE Investments' eight midwest and northwest
tax-exempt municipal bond funds held their ground as investors' shifted their
focus from the safety of U.S. Treasury bonds to the higher return potential of
stocks.
In August, debt problems in Russia and Brazil, along with ongoing concerns
about recessions in Asia, created strong worldwide demand for U.S. Treasury
bonds. Throughout the fall, slower corporate earnings growth also fueled demand
for the security of U.S. government debt. Prices for long-term Treasury bonds
rose sharply, pushing yields to historic lows.
As prices for U.S. Treasury bonds moved higher, municipal bonds seemed to
offer remarkable value compared to Treasuries. Historically, long-term municipal
bonds have provided approximately 83% of the income provided by Treasuries of
similar maturities. Although municipal bonds typically provided less income than
Treasuries, this was balanced by the fact that municipal income is tax exempt.
Last fall, as Treasury yields were dropping, an abundant supply of municipal
bonds was met with stable demand and held municipal yields relatively steady.
The yield difference between Treasuries and municipal bonds narrowed
substantially. In October, 30-year municipal bonds yielded as much as 98% of
what comparable Treasuries yielded. Unlike Treasury securities, municipal bonds
are not guaranteed by the U.S. Government.
AS PRICES FOR U.S. TREASURY BONDS MOVED HIGHER, MUNICIPAL BONDS SEEMED TO OFFER
REMARKABLE VALUE COMPARED TO TREASURIES
CUMULATIVE TOTAL RETURNS
- --------------------------------------------------------------------------------
Six Months Ended February 28, 1999
- --------------------------------------------------------------------------------
Tax-Free Idaho Fund A Class +2.06%
Tax-Free Iowa Fund A Class +1.74%
Tax-Free North Dakota Fund A Class +2.02%
Tax-Free Wisconson Fund A Class +1.82%
Lipper Other States Municipal Debt Fund Average (79 Funds) +1.81%
- --------------------------------------------------------------------------------
Tax-Free Kansas Fund A Class +2.78%
Lipper Kansas Municipal Debt Fund Average (13 funds) +2.11%
- --------------------------------------------------------------------------------
Tax-Free Missouri Insured Fund A Class +2.29%
Lipper Missouri Municipal Debt Fund Average (25 funds) +1.94%
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Tax-Free Oregon Insured Fund A Class +2.19%
Lipper Oregon Municipal Debt Fund Average (25 funds) +1.95%
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Tax-Free Washington Insured Fund A Class +2.07%
Lipper Washington Municipal Debt Fund Average (8 funds) +1.81%
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Lehman Brothers Municipal Bond Index +2.62%
Lehman Brothers Insured Municipal Bond Index +2.54%
All performance shown above is at net asset value and assumes reinvestment of
distributions. Past performance does not guarantee future results. Performance
of other Fund classes varies due to different charges and expenses. The
unmanaged Lehman Brothers Indices are composed of bonds with a variety of
quality ratings from many states. Complete performance information for all funds
can be found on pages 12 through 15.
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As winter approached, three Federal Reserve interest rate cuts helped to
restore investors' confidence in the U.S. economy and reduce concerns about the
impact of global recession. This set the stage for a stock market recovery that
began during the fourth quarter of 1998 and continued into the new year.
Fixed-income investments took second billing to equities.
The performance of U.S. Treasury bonds suffered over the first two months of
1999, as strength in the domestic economy reduced demand for safe haven
investments. Municipal bond prices held up better than Treasuries due to a
declining supply of municipal bonds.
We are pleased to report that for the six months ended February 28, 1999,
total returns for seven of the eight state funds in this report outpaced the
average returns of their respective peer groups. Please see the Portfolio
Manager's Review for a discussion of individual fund performance.
Though fixed-income funds aren't likely to take center stage as long as the
stock market continues to rise, we believe they play an important role in
balanced financial plans. In our view, municipal bond funds provide
diversification that can help reduce the volatility of a portfolio heavily
weighted in equities. We believe that municipal bond funds can also help provide
compelling opportunities for high income, especially when compared with taxable
fixed-income alternatives.
In the pages that follow, your Fund's portfolio manager, Elizabeth H. Howell,
reviews the positioning of your municipal bond funds and provides an outlook for
the remainder of the year. We encourage you to meet with your financial adviser
to discuss the performance of your investments and review your portfolio's
overall asset mix.
Sincerely,
/s/ Jeffrey J. Nick
JEFFREY J. NICK
Chairman, President and
Chief Executive Officer
Delaware Investments Family of Funds
Jeffrey J. Nick Named Chairman
On December 17, 1998, Jeffrey J. Nick was named Chairman of the Delaware
Investments Family of Funds. He replaces Wayne A. Stork who has retired as
Chairman of the Board of Directors, but continues to serve as a Board Member.
Mr. Nick was named President and Chief Executive Officer of Delaware Investments
Family of Funds in October 1997. He has been CEO of Lincoln National Investment
Companies, an indirect parent company of Delaware Investments, since October
1996 and previously managed Lincoln's operations in the United Kingdom. Mr. Nick
holds an MBA from the University of Chicago and a Bachelor of Arts degree from
Princeton University.
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Portfolio Managers' Review
BY ELIZABETH H. HOWELL
Vice President/Senior Portfolio Manager
March 8, 1999
In 1998, state and local governments sold municipal bonds at a near-record
volume, led by education, transportation and health care issues. New municipal
bond issuance reached $285 billion in 1998, second only to the record $292
billion sold in 1993 (Source: The Bond Buyer).
This provided us with ample opportunities to select bonds with solid credit
ratings, the potential to deliver high current income and the possibility to
appreciate in value. The large municipal bond supply also, however, slightly
exceeded investor demand, which temporarily stifled price gains.
In 1998, expanding economies and lower interest rates helped create an
attractive environment for state and local governments to issue debt. With
interest rates at or near 25-year lows, many municipalities refinanced bonds to
pay off older, higher interest debt.
New bond issuance cooled off substantially over the first two months of 1999.
At just $13.8 billion, January new issue sales were down 24% from the same
period in 1998 (Source: The Bond Buyer). The supply drought continued in
February, driven by reduced refunding activity and growing budget surpluses for
many municipal governments.
Reduced municipal bond supply early in 1999 helped keep prices from falling
as quickly as Treasuries in the wake of stronger-than-expected U.S. economic
growth. In our opinion, municipal bonds offer fixed-income investors an
attractive tax-exempt option during periods of increased volatility in the
Treasury market.
Since many municipalities have already taken advantage of the opportunity to
refinance their debt, and because the IRS limits how frequently municipalities
are allowed to issue refunding bonds, we think, municipal bond prices may
continue to benefit from steady investor demand amid limited supply.
TAX-FREE IDAHO FUND
Tax-Free Idaho Fund provided a total return of +2.06% (for Class A shares at net
asset value with distributions reinvested) for the six months ended February 28,
1999. This performance exceeded the +1.81% average return of the Fund's peer
group in the Lipper Other States Municipal Debt Fund category.
We were able to outpace the returns of our peers by positioning the Fund to
take advantage of a declining interest rate environment. As of February 28,
1999, Tax-Free Idaho Fund's duration, which measures a fund's sensitivity to
interest rate changes, was 7.1 years and allowed the fund to benefit as lower
interest rates increased the attractiveness of higher yielding long-term bonds.
IN OUR OPINION, MUNICIPAL BONDS OFFER FIXED-INCOME INVESTORS AN ATTRACTIVE
TAX-EXEMPT OPTION DURING PERIODS OF INCREASED VOLATILITY IN THE TREASURY MARKET.
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Tax-Free Idaho Fund maintained a well-diversified portfolio, with 88.7% of
the Fund's assets allocated to high-quality, investment grade issues. We
complemented the portfolio's investment grade holdings with well-researched
unrated bonds to help boost the income provided by the Fund.
As of February 28, 1999, 11% of Tax-Free Idaho Fund's assets were invested in
unrated bonds. In general, these unrated bonds offered more income than rated
bonds. Being unrated does not necessarily mean that a bond is of lower quality.
Our in-house credit research capabilities enable us to carefully evaluate
unrated bonds, typically issued by small, rural communities looking to forego
the expense of obtaining a Standard and Poor's or Moody's Investors Services
credit rating.
While Idaho's state economy is still somewhat reliant on resource-based
industries (timber, agriculture and minerals), a growing demand for
manufacturing jobs has helped increase diversity. Serving as the base for Micron
Technology, Idaho has been able to attract several technology and software
companies over the past decade, which has helped to create new jobs and boost
personal incomes.
Overall, we believe, a strong regional economy has strengthened the financial
position of many Idaho municipalities.
TAX-FREE IOWA FUND
Tax-Free Iowa Fund provided a total return of +1.74% (for Class A shares at net
asset value with distributions reinvested) as of February 28, 1999. This return
fell slightly short of the average return of the 79 funds in the Lipper Other
States Municipal Debt Fund category as shown on page 2.
We attribute the Fund's performance to efforts to balance Tax-Free Iowa
Fund's total return potential with a high level of current income. Over the last
six months, we added several unrated bonds to Tax-Free Iowa Fund's portfolio to
enhance the income stream, which at the same time slightly reduced our overall
price performance.
The duration of the Fund as of February 28, 1999 was 6.3 years. We will work
to slightly extend the duration of Tax-Free Iowa Fund as securities in the
Fund's portfolio mature. We believe this will position the Fund to benefit from
the prevailing trend of benign inflation and lower interest rates.
CREDIT QUALITY
TAX-FREE IDAHO, KANSAS, NORTH DAKOTA AND WISCONSIN FUNDS
- --------------------------------------------------------------------------------
FEBRUARY 28, 1999
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Idaho Iowa Kansas North Dakota Wisconsin
Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------
AAA 25.9% 26.1% 38.8% 31.5% 39.5%
AA 8.2% 2.1% 13.2% 25.0% 6.0%
A 21.9% 43.9% 3.3% 15.9% 17.6%
BBB 32.7% 14.9% 10.2% 12.2% 8.5%
Unrated 11.3% 13.0% 34.5% 15.4% 28.5%
- --------------------------------------------------------------------------------
Average Quality A- A- AA AA- AA-
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Historically, Iowa municipalities have issued relatively few bonds that are
exempt from both federal and state taxes. All of the bonds, however, in the
Tax-Free Iowa Fund's portfolio provide Iowa residents with a dual state and
federal income tax exemption. Some investors, for example, those who pay
Alternative Minimum Tax, may not benefit fully from these holdings.
Over the past six months, increased revenue from legalized gambling has
improved the financial condition of Iowa's growing state economy. Iowa residents
continue to enjoy one of the nation's lowest unemployment rates (Source: Iowa
Department of Economic Development). In the coming months, we expect strong
state and national economic trends to benefit the credit profile of most Iowa
municipalities.
TAX-FREE KANSAS FUND
Tax-Free Kansas Fund provided an impressive total return of +2.78% (for Class A
shares at net asset value with distributions reinvested) as of February 28,
1999. This exceeded the average return of similar municipal bond funds in the
state of Kansas as shown on page 2.
Tax-Free Kansas Fund also outperformed its unmanaged benchmark, the Lehman
Brothers Municipal Bond Index, which is composed of municipal bond funds from
many states with a variety of credit ratings.
Tax-Free Kansas Fund's above average performance can be largely attributed to
a modest restructuring of the portfolio. Last year we added to the Fund's
holdings of discount bonds (bonds selling for less than their face value) and
higher risk, high-yield bonds. This combination helped to boost the current
income provided by Tax-Free Kansas Fund while at the same time delivering
opportunities for price appreciation.
Tax-Free Kansas Fund invested the majority of its assets in higher quality,
investment grade bonds. These bonds provided the fund with some degree of safety
due to high credit quality.
As of February 28, 1999, 34.5% of the Fund's assets were invested in unrated
<TABLE>
<CAPTION>
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
FEBRUARY 28, 1999
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Idaho Iowa Kansas North Dakota Wisconsin
Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Average Maturity 18.8 years 18.1 years 21.4 years 19.6 years 21.1 years
Average Effective Maturity* 10.1 years 8.4 years 11.1 years 9.1 years 11.1 years
Average Duration 7.1 years 6.3 years 7.6 years 6.9 years 8.2 years
AMT Income** 11.99% 5.28% 20.21% 14.26% 21.76%
Current 30-Day
SEC Yield
(A Class) 3.9% 3.6% 3.9% 4.2% 3.8%
(B and C Classes) 3.4% 3.0% 3.3% 3.6% 3.1%
</TABLE>
*Average effective maturity takes into consideration all prepayments, puts and
adjustable coupons.
**Percentage of income generated for the six months ended February 28, 1999 that
was subject to the federal alternative minimum tax.
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issues, which helped boost the Fund's income stream and total return potential.
In most cases, these unrated bonds were issued by small, rural municipalities
looking to avoid the expense of obtaining a Standard & Poor's or Moody's
Investors Services rating. We rigorously research unrated bond issues and
continue to monitor their credit quality on a regular basis.
The economy in Kansas, like most other mid-western state economies is healthy
and growing. The state of Kansas also boasts an unemployment rate that is below
the national average (Source: Bureau of Labor Statistics). Falling overseas
demand for wheat and declining commodity prices may, however, begin to put
pressure on the state's farming industry in the coming year. In our opinion,
with budgets in excellent shape and tax revenues rising at both the state and
local level, this scenario should not adversely affect the financial situations
of Kansas municipalities in the near future.
TAX-FREE MISSOURI
INSURED FUND
Tax-Free Missouri Insured Fund performed well for the six months ended February
28, 1999, returning +2.29% (for Class A shares at net asset value with
distributions reinvested). This was higher than the average total return of
other Missouri municipal bond funds, most of which invest in uninsured bonds,
but fell slightly short of the Fund's benchmark, the Lehman Brothers Insured
Municipal Bond Index.
Tax-Free Missouri Insured Fund invested exclusively in bonds and insured
bonds rated AAA by Standard and Poor's or Moody's Investors Services. Over the
past six months, many of the Fund's general obligation bonds were refinanced due
to lower interest rates. When a bond is refinanced, or pre-refunded, it is then
secured by U.S. Treasury bonds, which are held in a separate escrow account.
This
TAX-FREE MISSOURI INSURED, OREGON INSURED AND
WASHINGTON INSURED FUNDS ASSET MIX
- --------------------------------------------------------------------------------
FEBRUARY 28, 1999
Tax-Free Tax-Free Tax-Free
Missouri Washington Oregon
Insured Fund Insured Fund Insured Fund
- --------------------------------------------------------------------------------
Housing 15.9% 21.0% 3.1%
Hospital 25.1% 17.9% 5.8%
General Obligation 4.3% 17.9% 22.3%
Power Authority 4.1% 19.0% 6.0%
Pre-Refunded 26.8% -- 22.2%
Education 1.9% 15.3% 13.6%
Industrial 1.9% 1.9% --
Water & Sewer 4.2% 8.6% 13.2%
Transportation -- 7.8% 5.6%
Utility 4.2% -- --
Cash and Other Assets 3.0% (9.4%) 1.6%
Other Revenue Bonds 6.7% -- --
Lease/Certificates of Participation 1.9% -- 6.6%
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improves the bond's credit quality, which can substantially enhance the bond's
value.
Tax-Free Missouri Insured Fund's performance was also supported by the
strong call protection features of its holdings. In most cases, we attempted to
purchase bonds with a minimum of 10 years of call protection. Call protection
prevents a bond issuer from paying off the loan early to take advantage of
declining interest rates. This allows the Fund to continue earning an
attractive coupon for a longer period of time.
Increased housing and commercial development activity is promoting relatively
rapid growth in Missouri's metropolitan areas, particularly in St. Louis and
Kansas City. We expect this growth to increase tax revenues in Missouri and
strengthen the credit quality of the state's municipalities.
TAX-FREE NORTH DAKOTA FUND
For the six months ended February 28, 1999, Tax-Free North Dakota Fund provided
an above average return of +2.02% (for Class A shares at net asset value with
distributions reinvested). This compared favorably with the +1.81% average
return of the Fund's peers but lagged the unmanaged Lehman Brothers Municipal
Bond Index.
The Fund's strong performance can be attributed in part to an effective
portfolio strategy. Over the last six months, we continued to position Tax-Free
North Dakota Fund to perform well in a declining interest rate environment. We
did this by modestly extending the Fund's average effective duration to 6.9
years. This helped us to achieve a higher rate of total return as bond prices
rose last fall.
We complemented this strategy by seeking bonds with superior call protection
features. Call protection helped to limit the ability of bond issuers to pay off
their debts prior to maturity in order to reduce their interest payments.
Nearly 30% of Tax-Free North Dakota Fund's holdings were invested in
medium-quality investment grade bonds. These bonds provided above-average,
tax-exempt income for the Fund without significantly increasing the portfolio's
level of price volatility.
Rebuilding projects in metropolitan areas such as Fargo and Grand Forks
following the 1997 Red River Valley floods created employment opportunities and
PORTFOLIO HIGHLIGHTS
February 28, 1999
Tax-Free Tax-Free Tax-Free
Missouri Oregon Washington
Insured Fund Insured Fund Insured Fund
- --------------------------------------------------------------------------------
Average Maturity 18.0 years 19.2 years 24.4 years
Average Effective Maturity* 7.0 years 10.8 years 13.8 years
Average Duration 5.8 years 8.3 years 8.9 years
AMT Income** 18.97% 9.95% 14.43%
Current 30-Day
SEC Yield
(A Class) 3.4% 3.7% 4.4%
(B and C Classes) 2.8% 3.1% 3.8%
*Average effective maturity takes into consideration all prepayments, puts and
adjustable coupons.
**Percentage of income generated for the six months ended February 28, 1999 that
was subject to the federal alternative minimum tax.
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helped to boost local economies. As of February 28, 1999, North Dakota's
unemployment rate was just 2%, one of the lowest rates of joblessness in the
country (Source: Bureau of Labor Statistics).
Yet unlike most other mid-western states, North Dakota's municipalities have
not been able to accumulate significant budget surpluses over the last several
years. In the coming months, we will continue to monitor the fiscal health of
North Dakota's municipalities to ensure acceptable credit quality for all of
Tax-Free North Dakota Fund's holdings.
TAX-FREE OREGON
INSURED FUND
Tax-Free Oregon Insured Fund provided a total return of +2.19% (for Class A
shares at net asset value with distributions reinvested) for the six months
ended February 28, 1999. This return exceeded the +1.95% average total return
for all other Oregon municipal bond funds tracked by Lipper Analytical Services,
but fell short of the Fund's benchmark, the Lehman Brothers Insured Municipal
Bond Index.
As of February 28, 1999, Tax-Free Oregon Insured Fund's average duration was
8.3 years. This allowed the Fund to benefit from rising bond prices when the
Federal Reserve cut interest rates last fall. In our opinion, benign inflation
and global recession should continue to reduce the likelihood of interest rate
increases in the near future.
Tax-Free Oregon Insured Fund invested exclusively in bonds with AAA ratings
from Moody's Investors Services or Standard & Poor's. In 1998, more than 50% of
all municipal new issues carried insurance according to Securities Data
Corporation, demonstrating strong investor demand for the added security of
insured municipal debt. All of the bonds in the Fund's portfolio are protected
by municipal bond insurance, which guarantees the timely payment of principal
and interest. This does not, however, guarantee against price volatility.
The Oregon economy continues to demonstrate economic development and
diversification despite the collapse of Asian economies. The Asian recession
began to slow economic growth in Oregon in late 1997 and continued to have an
impact throughout much of 1998 (Source: Standard & Poors Credit Week Municipal).
Though the long-term outlook is positive, further slowing of the state's economy
is possible in 1999. In our opinion, however, the finances of most Oregon
municipalities remain very strong and should support the credit quality of the
Fund's holdings.
TAX-FREE WASHINGTON
INSURED FUND
Tax-Free Washington Insured Fund provided a strong total return of +2.07% (for
Class A shares at net asset value with distributions reinvested) for the six
months ended February 28, 1999. This performance exceeded the +1.81% average
return for all other Washington municipal bond funds, as measured by Lipper
Analytical Services.
Tax-Free Washington Insured Fund outperformed its peers because we positioned
the Fund for a modest decline in interest rates. As of February 28, 1999, the
Fund's duration, a measure of its sensitivity to interest rate changes, was 8.9
years. This allowed the Fund to benefit from
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rising bond prices when interest rates were lowered last fall. In our opinion,
prudent Federal Reserve Board monetary policy, falling commodity prices and a
surge in less expensive imports should help to keep inflation in check and
reduce the possibility of higher interest rates in the near future.
Consistent with our outlook for a continued low interest rate environment, we
reduced the Fund's holdings in housing-related bonds. Housing bonds tend to
yield more than other types of municipal bonds with similar credit ratings and
maturities. However, since these securities are often prepaid by their issuers
when interest rates are low, we believed it made sense to lower our exposure.
Washington, along with other states in the Pacific Northwest, had previously
benefited from strong trade relationships with Asia, exporting goods from both
the traditional industry and high-technology sectors. Consequently, economic
growth in Washington has slowed due to the ongoing Asian economic turmoil
(Source: Standard & Poors Credit Week Municipal).
Washington's economy will also be challenged by planned cutbacks at Boeing,
one of the state's larger employers. Despite the softening of exports, in our
view, Washington's economy is in good shape and the finances of most of its
municipalities are very strong. This bodes well for the underlying credit
quality of the bonds held in Tax-Free Washington Insured Fund's portfolio.
TAX-FREE WISCONSIN FUND
Tax-Free Wisconsin Fund provided a total return of +1.82% (for Class A shares at
net asset value with distributions reinvested) as of February 28, 1999. This
performance slightly exceeded the average return of the Fund's peers in the
Lipper Other States Municipal Debt Fund category as shown on page 2.
As with our other midwest and northwest tax-exempt municipal bond funds, the
key to the Fund's performance was duration. The duration of Tax-Free Wisconsin
Fund was 8.2 years as of February 28, 1999. Our degree of sensitivity to
interest rate changes helped the Fund's performance when rates were reduced
three times last fall.
We worked diligently in 1998 to add bonds with good call protection features,
which limit bond issuers' ability to prepay their loans in order to reduce their
interest rate. Strong call protection enabled Tax-Free Wisconsin Fund to
maintain an attractive level of income when interest rates dropped.
Most of the bonds issued by Wisconsin municipalities are not exempt from
state income tax. Over the last six months, we sought to purchase those
relatively rare Wisconsin issues that offered dual exemption from both state and
federal income tax. We supplemented these holdings with territorial bonds issued
by U.S. territories such as Puerto Rico and the Virgin Islands. These
territorial bonds not only offered dual exemption potential from state and
federal taxes, but also provided an additional element of diversification for
the Fund.
The Wisconsin economy continues to benefit from eight years of economic
expansion at the national level. Wisconsin residents are benefiting from the
lowest
WE WORKED DILIGENTLY IN 1998 TO ADD BONDS WITH GOOD CALL PROTECTION FEATURES,
WHICH LIMIT BOND ISSUERS' ABILITY TO PREPAY THEIR LOANS IN ORDER TO REDUCE THEIR
INTEREST RATE
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11
state unemployment rate in 30 years. Last year, increasing tax revenue helped
the state post a $352 million budget surplus, which we feel points to a positive
credit outlook for the state's municipalities in 1999.
OUTLOOK
Ten million more Americans are employed and paying taxes today than at the start
of the decade. Over the same period, U.S. corporate profits also increased. As a
result, 32 U.S. states produced budget surpluses in 1998, many of them
substantial (Source: National Conference of State Legislatures).
In fact, according to the National Conference of State Legislatures, which
monitors the fiscal performance of state governments, the states are in their
best fiscal health since 1980. In 1998, high employment rates and growing tax
revenues resulted in an average state government budget surplus of 10%.
At the national level, after a brief slowdown last summer, the U.S. economy
regained its momentum in the fourth quarter. Economic growth, as measured by
U.S. Gross Domestic Product, increased at a 5.6% annual rate over the last three
months of 1998, largely driven by consumer spending.
In fact, consumer spending in 1998 grew at its fastest pace in more than 14
years and remains strong in 1999. In February, U.S. retail sales rose for the
seventh consecutive month. In our view, a strong national employment picture,
rising personal incomes and low interest rates should sustain vigorous consumer
spending this year.
A potential concern for fixed-income investors is that robust consumer
spending, combined with expanding state and national economies, may force the
Federal Reserve to raise interest rates to keep inflation in check. Thus far,
however, with inflation running at only 1.7%, this action has not been
necessary. In our opinion, global weakness, particularly in Asia, Russia and
Brazil, could dampen U.S. economic growth sufficiently to reduce the need for
higher interest rates.
Last August, uncertain global economic conditions made a profound impact on
U.S. financial markets. If world economies weaken in 1999, stock market
volatility may increase, creating stronger demand for fixed-income investments.
In our view, investors seeking to diversify their portfolios with less volatile
investments that offer tax-free dividends may find attractive opportunities in
municipal bond funds. Regardless of market conditions, municipal bond funds may
offer valuable asset allocation benefits without adding to taxable investment
income.
REGARDLESS OF MARKET CONDITIONS, MUNICIPAL BOND FUNDS OFFER VALUABLE ASSET
ALLOCATION BENEFITS WITHOUT ADDING TO TAXABLE INVESTMENT INCOME.
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Performance Summary
TAX-FREE IDAHO FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH FEBRUARY 28, 1999
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 1/4/95)
Excluding Sales Charge +9.17% +5.52%
Including Sales Charge +8.17% +1.54%
- --------------------------------------------------------------------------------
Class B (Est. 3/16/95)
Excluding Sales Charge +7.24% +4.75%
Including Sales Charge +6.62% +0.75%
- --------------------------------------------------------------------------------
Class C (Est. 1/11/95)
Excluding Sales Charge +8.17% +4.75%
Including Sales Charge +8.17% +3.75%
TAX-FREE IOWA FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH FEBRUARY 28, 1999
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 9/1/93)
Excluding Sales Charge +5.10% +5.61% +5.24%
Including Sales Charge +4.38% +4.81% +1.31%
- --------------------------------------------------------------------------------
Class B (Est. 3/24/95)
Excluding Sales Charge +6.54% +4.46%
Including Sales Charge +5.90% +0.46%
- --------------------------------------------------------------------------------
Class C (Est. 1/4/95)
Excluding Sales Charge +8.16% +4.46%
Including Sales Charge +8.16% +3.46%
Performance for all Funds includes reinvestment of distributions and applicable
sales charge as described below. Return and share value will fluctuate so that
shares when redeemed may be worth more or less than the original cost. Past
performance is not a guarantee of future results. Performance for Class B and C
shares excluding sales charge assumes either contingent sales charges did not
apply or the investment was not redeemed. Returns reflect a voluntary expense
limitation in effect at the time. Returns would have been lower without the
limitation.
Class A shares of each Fund have a 3.75% maximum front-end sales charge. Class A
Shares have a 0.25% 12b-1 fee.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred sales
charge of up to 4% if redeemed before the end of the sixth year for each Fund.
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.
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TAX-FREE KANSAS FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH FEBRUARY 28, 1999
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 11/30/92)
Excluding Sales Charge +7.31% +6.22% +6.02%
Including Sales Charge +6.66% +5.40% +2.06%
- --------------------------------------------------------------------------------
Class B (Est. 4/8/95)
Excluding Sales Charge +6.83% +5.23%
Including Sales Charge +6.19% +1.23%
- --------------------------------------------------------------------------------
Class C (Est. 4/12/95)
Excluding Sales Charge +6.77% +5.24%
Including Sales Charge +6.77% +4.24%
TAX-FREE MISSOURI INSURED FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH FEBRUARY 28, 1999
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 11/2/92)
Excluding Sales Charge +6.78% +5.86% +5.28%
Including Sales Charge +6.13% +5.06% +1.35%
- --------------------------------------------------------------------------------
Class B (Est. 3/12/94)
Excluding Sales Charge +5.64% +4.60%
Including Sales Charge +5.31% +0.60%
- --------------------------------------------------------------------------------
Class C (Est. 11/11/95)
Excluding Sales Charge +5.53% +4.50%
Including Sales Charge +5.53% +3.50%
Performance for all Funds includes reinvestment of distributions and applicable
sales charge as described below. Return and share value will fluctuate so that
shares when redeemed may be worth more or less than the original cost. Past
performance is not a guarantee of future results. Performance for Class B and C
shares excluding sales charge assumes either contingent sales charges did not
apply or the investment was not redeemed. Returns reflect a voluntary expense
limitation in effect at the time. Returns would have been lower without the
limitation.
Class A shares of each Fund have a 3.75% maximum front-end sales charge. Class A
Shares have a 0.25% 12b-1 fee.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred sales
charge of up to 4% if redeemed before the end of the sixth year for each Fund.
Class C shares have a 1% annual distribution and service fee. If shares are
redeemed within 12 months, a 1% contingent deferred sales charge applies.
<PAGE>
for tax-
exempt income
14
TAX-FREE NORTH DAKOTA FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH FEBRUARY 28, 1999
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 4/1/91)
Excluding Sales Charge +7.67% +6.14% +5.35%
Including Sales Charge +7.15% +5.33% +1.41%
- --------------------------------------------------------------------------------
Class B (Est. 5/10/94)
Excluding Sales Charge +7.13% +4.65%
Including Sales Charge +6.81% +0.65%
- --------------------------------------------------------------------------------
Class C (Est. 7/29/95)
Excluding Sales Charge +6.48% +4.56%
Including Sales Charge +6.48% +3.56%
TAX-FREE OREGON INSURED FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH FEBRUARY 28, 1999
Lifetime Five Years One Year
Class A (Est. 8/1/93)
Excluding Sales Charge +5.88% +5.85% +5.31%
Including Sales Charge +5.16% +5.05% +1.40%
- --------------------------------------------------------------------------------
Class B (Est. 3/12/94)
Excluding Sales Charge +5.61% +4.43%
Including Sales Charge +5.28% +0.43%
- --------------------------------------------------------------------------------
Class C (Est. 7/7/95)
Excluding Sales Charge +6.33% +4.52%
Including Sales Charge +6.33% +3.52%
Performance for all Funds includes reinvestment of distributions and applicable
sales charge as described below. Return and share value will fluctuate so that
shares when redeemed may be worth more or less than the original cost. Past
performance is not a guarantee of future results. Performance for Class B and C
shares excluding sales charge assumes either contingent sales charges did not
apply or the investment was not redeemed. Returns reflect a voluntary expense
limitation in effect at the time. Returns would have been lower without the
limitation.
Class A shares of each Fund have a 3.75% maximum front-end sales charge. Class A
Shares have a 0.25% 12b-1 fee.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred sales
charge of up to 4% if redeemed before the end of the sixth year for each Fund.
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
15
TAX-FREE WASHINGTON INSURED FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH FEBRUARY 28, 1999
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 8/1/93)
Excluding Sales Charge +7.11% +6.47% +5.62%
Including Sales Charge +6.38% +5.67% +1.66%
- --------------------------------------------------------------------------------
Class B (Est. 10/24/95)
Excluding Sales Charge +6.53% +4.92%
Including Sales Charge +5.76% +0.92%
- --------------------------------------------------------------------------------
Class C (Est. 4/21/95)
Excluding Sales Charge +6.84% +4.92%
Including Sales Charge +6.84% +3.92%
TAX-FREE WISCONSIN FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH FEBRUARY 28, 1999
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 9/1/93)
Excluding Sales Charge +5.10% +5.40% +5.13%
Including Sales Charge +4.37% +4.61% +1.18%
- --------------------------------------------------------------------------------
Class B (Est. 4/22/95)
Excluding Sales Charge +5.94% +4.35%
Including Sales Charge +5.27% +0.35%
- --------------------------------------------------------------------------------
Class C (Est. 3/28/95)
Excluding Sales Charge +6.04% +4.33%
Including Sales Charge +6.04% +3.33%
Performance for all Funds includes reinvestment of distributions and applicable
sales charge as described below. Return and share value will fluctuate so that
shares when redeemed may be worth more or less than the original cost. Past
performance is not a guarantee of future results. Performance for Class B and C
shares excluding sales charge assumes either contingent sales charges did not
apply or the investment was not redeemed. Returns reflect a voluntary expense
limitation in effect at the time. Returns would have been lower without the
limitation.
Class A shares of each Fund have a 3.75% maximum front-end sales charge. Class A
Shares have a 0.25% 12b-1 fee.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred sales
charge of up to 4% if redeemed before the end of the sixth year for each Fund.
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>
16 for tax-exempt income
FINANCIAL STATEMENTS
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE - VOYAGEUR TAX-FREE IDAHO FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS - 95.58%
GENERAL OBLIGATION BONDS - 8.48%
Ada & Canyon County Jt School District #2
5.50% 7/30/16 ..................................... $1,055,000 $1,136,235
Bonner County Local Improvement District # 93-1
6.20% 4/30/05 ..................................... 150,000 159,634
Bonner County Local Improvement District # 93-2
6.35% 4/30/06 ..................................... 185,000 197,197
Bonner County Local Improvement District # 93-3
6.40% 4/30/07 ..................................... 195,000 207,841
Bonner County Local Improvement District # 93-4
6.50% 4/30/08 ..................................... 110,000 117,226
Bonner County Local Improvement District # 93-5
6.50 4/30/10 ...................................... 100,000 106,182
Coeur D' Alene Local Improvement District # 6
Series 1995 6.00% 7/1/09 .......................... 85,000 91,597
Coeur D' Alene Local Improvement District # 6
Series 1996 6.05% 7/1/10 .......................... 90,000 97,198
Coeur D' Alene Local Improvement District # 6
Series 1997 6.10% 7/1/12 .......................... 40,000 43,277
Coeur D' Alene Local Improvement District # 6
Series 1998 6.10% 7/1/14 .......................... 45,000 48,743
Madison County (FSA) 5.40% 8/1/14 .................... 300,000 313,014
Puerto Rico Commonwealth 5.375% 7/1/25 ............... 1,250,000 1,288,388
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ...................................... 750,000 692,550
Sun Valley 5.20% 8/1/09 .............................. 180,000 187,916
---------
4,686,998
---------
HIGHER EDUCATION REVENUE BONDS - 7.25%
Boise State University Idaho Revenue Reference
& Improvement Student Fee (FSA)
5.00% 4/1/23 ...................................... 1,000,000 1,002,850
Idaho State University Student Fee Bonds
(MBIA) 5.80% 4/1/20 ............................... 550,000 589,704
University of Idaho Student Fees Recreation Center
(FSA) 5.00% 4/1/25 ................................ 1,000,000 995,630
University of Idaho (FSA) 5.85% 4/1/11 ............... 1,300,000 1,418,105
---------
4,006,289
---------
HOSPITAL REVENUE BONDS - 14.55%
Idaho Health Facilities Authority Bannock Medical
Center 6.375% 5/1/17 .............................. 1,695,000 1,856,432
Idaho Health Facilities Authority Hospital Revenue -
Elks Rehabilitation Hospital 5.45% 7/15/23 ........ 1,000,000 999,930
Idaho Health Facilities Authority Revenue
Bannock Regional Medical Project
5.25% 5/1/14 ...................................... 1,500,000 1,502,055
Idaho Health Facilities Authority Revenue -
Bonner General Hospital 6.50% 10/1/28 ............. 1,500,000 1,560,405
<PAGE>
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
Idaho Health Facilities Revenue Bannock Medical
Center 6.125% 5/1/25 ............................ $ 1,500,000 $ 1,591,005
Idaho Magic Valley Health Facilities (AMBAC)
5.625% 12/1/13 .................................. 500,000 532,735
---------
8,042,562
---------
HOUSING REVENUE BONDS - 8.13%
Idaho State Housing Agency Multi-Family Place
Plaza ( FHA) 6.50% 12/1/36 ...................... 990,000 1,062,260
Idaho State Housing Finance Authority Single
Family Series A (AMBAC) 6.05% 7/1/13 ............ 415,000 435,190
Idaho State Housing Finance Authority Single
Family Series A (FHA) 6.10% 7/1/16 .............. 370,000 387,172
Idaho State Housing Finance Authority Single
Family Series A1 6.85% 7/1/12 ................... 80,000 85,114
Idaho State Housing Finance Authority Single
Family Series B (FHA) 6.45% 7/1/15 .............. 190,000 200,843
Idaho State Housing Finance Authority Single
Family Series C-2 6.35% 7/1/15 .................. 255,000 270,660
Idaho State Housing Finance Authority Single
Family Series E 6.60% 7/1/11 .................... 125,000 133,855
Idaho State Housing Finance Authority Single
Family Series E (FHA) 6.35% 7/1/15 .............. 340,000 358,605
Idaho State Housing Finance Authority Single
Family Housing Series G-2 6.15% 7/1/15 .......... 1,495,000 1,562,140
---------
4,495,839
---------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 6.12%
Idaho State Water Resource Boise Water
7.25% 12/1/21 ................................... 100,000 107,868
Meridan EDA for Hi-Micro 5.85% 8/15/11 ............. 1,250,000 1,314,575
Pocatello Development Authority and Tax Increment
Revenue 7.25% 12/1/08 ........................... 1,700,000 1,795,761
Puerto Rico Industrial Medical Environmental
Revenue - PepsiCo Project
6.25% 11/15/13 .................................. 150,000 164,447
---------
3,382,651
---------
LEASE/CERTIFICATES OF PARTICIPATION - 1.89%
North Idaho College Dorm Housing-Certificates of
Participation 6.45% 10/1/16 ..................... 1,000,000 1,044,750
---------
1,044,750
---------
POLLUTION CONTROL REVENUE BONDS - 21.00%
Nez Perce County, Idaho Pollution Control Revenue
Refunding-Potlatch Project 6.00% 10/1/24 ........ 5,500,000 5,871,140
Power County Idaho Pollution Control Revenue-
FMC Project 5.625% 10/1/14 ...................... 5,570,000 5,737,601
---------
11,608,741
----------
<PAGE>
for tax-exempt income 17
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS (CONTINUED)
POWER AUTHORITY REVENUE BONDS - 4.49%
**Puerto Rico Electric Power Authority Inverse Floater
Rols (FSA) 6.09% 7/1/19 ........................ $ 1,000,000 $ 909,080
Puerto Rico Electric Power Authority (FSA)
6.00% 7/1/16 ................................... 100,000 109,756
Puerto Rico Electric Power Authority Series X
5.50% 7/1/25 ................................... 1,415,000 1,466,846
---------
2,485,682
---------
*PRE-REFUNDED BONDS - 4.23%
Ada & Canyon County School District #2
5.60% 7/30/12-03 ............................... 1,325,000 1,465,900
Canyon County Independent School District #131
(MBIA) 5.50% 7/30/12-03 ........................ 100,000 107,678
Gooding Lincoln Independent School District #231
6.30% 2/1/14-04 ................................ 100,000 111,574
Idaho St. Holy Cross - Alphonsus Health Facility
6.25% 12/1/22-02 ............................... 590,000 655,696
---------
2,340,848
---------
SPECIAL UTILITY REVENUE BONDS - 0.28%
Puerto Rico Telephone Revenue Authority
5.50% 1/1/22 ................................... 150,000 154,274
---------
154,274
---------
TRANSPORTATION REVENUE BONDS - 0.64%
Guam Highway (FSA) 6.30% 5/1/12 .................. 150,000 162,600
Puerto Rico Highway Revenue Series W
5.50% 7/1/15 ................................... 175,000 189,158
---------
351,758
---------
WATER & SEWER REVENUE BONDS - 2.49%
Chubbuck Water Revenue 6.35% 4/1/08 .............. 125,000 134,763
Chubbuck Water Revenue
6.40% 4/1/10 ................................... 135,000 145,160
McCall Water Revenue (FSA) 5.85% 3/1/16 .......... 1,000,000 1,096,840
---------
1,376,763
---------
OTHER REVENUE BONDS - 16.03%
Ammon, Idaho Urban Renewal Agency
Revenue 6.25% 8/1/18 ........................... 445,000 477,934
Ammon, Idaho Urban Renewal Tax Increment
Revenue 5.875% 8/1/17 .......................... 350,000 371,199
Boise Urban Renewal Agency Tax Increment
Revenue 6.125% 9/1/15 .......................... 4,540,000 4,858,572
Hayden, Idaho Improvement District 95 - Special
Assessment 6.30% 5/1/12 ........................ 115,000 115,273
Hayden, Idaho Improvement District 95 - Special
Assessment 6.35% 5/1/13 ........................ 120,000 120,296
Hayden, Idaho Improvement District 95 - Special
Assessment 6.40% 5/1/14 ........................ 125,000 125,321
Hayden, Idaho Improvement District 95 - Special
Assessment 6.50% 5/1/15 ........................ 125,000 125,334
Idaho State Building Authority Building Revenue
Series A 4.75% 9/1/25 .......................... 1,500,000 1,451,685
Puerto Rico Public Building Authority Revenue
Series M 5.50% 7/1/21 .......................... 1,175,000 1,218,698
---------
8,864,312
---------
TOTAL MUNICIPAL BONDS (cost $49,940,014) ......... 52,841,467
----------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
--------- -----
SHORT-TERM INVESTMENTS - 0.33%
Norwest Advantage Municipal
Money Market Fund .............................. 182,280 $ 182,280
-----------
Total Short-Term Investments
(cost $182,280) ................................ 182,280
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED
(COST $50,122,294) - 95.91% .................... $53,023,747
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 4.09% 2,258,669
-----------
NET ASSETS APPLICABLE TO 4,792,793 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ........ $55,282,416
-----------
NET ASSET VALUE - TAX-FREE IDAHO FUND A CLASS
($44,182,679 / 3,829,537 SHARES) ............... $ 11.54
===========
NET ASSET VALUE - TAX-FREE IDAHO FUND B CLASS
($8,912,535 / 773,413 SHARES) .................. $ 11.52
===========
NET ASSET VALUE - TAX-FREE IDAHO FUND C CLASS
($2,187,202 / 189,843 SHARES) .................. $ 11.52
===========
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
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 ........................................ $52,433,945
Accumulated net realized loss on investments ...... (52,982)
Net unrealized appreciation of investments ........ 2,901,453
-----------
Total net assets $55,282,416
===========
- ----------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
the bond is pre-refunded.
**Inverse floaters represent a security that pays
interest at rates that increase (decrease) with a decrease (increase) in a
specified index. Interest rates disclosed are in effect on
February 28, 1999.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FHA - Insured by the Federal Housing Authority
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE IDAHO FUND A CLASS
Net asset value A Class (A) ............................. $ 11.54
Sales charge (3.75% of offering price, or 3.90% of amount
invested per share) (B) .............................. 0.45
---------
Offering price .......................................... $ 11.99
=========
(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>
18 for tax-exempt income
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE IOWA FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS - 98.68%
GENERAL OBLIGATION BONDS - 1.01%
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 .................................. $ 500,000 $ 461,700
----------
461,700
----------
HIGHER EDUCATION REVENUE BONDS - 7.50%
Iowa Center Community College Dormitory
Merged Area V 5.45% 6/1/18 .................... 545,000 545,807
Iowa State University Science & Technology Revenue
Dormitory-Series I S U-A 4.85% 7/1/25 ......... 440,000 421,058
Puerto Rico Educational Facility Revenue -
Polytechnic University 6.50% 8/1/24 ........... 650,000 710,502
State University of Iowa - Board Of Regents
5.30% 7/1/13 .................................. 500,000 521,500
University Of Puerto Rico Revenue (MBIA)
5.50% 6/1/15 .................................. 1,000,000 1,058,470
University of North Iowa - Board Of Regents
5.30% 7/1/13 .................................. 150,000 156,450
----------
3,413,787
----------
HOSPITAL REVENUE BONDS - 2.93%
Puerto Rico Hospital Revenue - Hospital Auxilio
Mutuo Obligated Group (MBIA)
6.25% 7/1/24 .................................. 1,200,000 1,330,908
----------
1,330,908
----------
HOUSING REVENUE BONDS - 1.58%
Puerto Rico Housing Bank & Finance Agency (GNMA)
6.25% 4/1/29 .................................. 675,000 718,943
----------
718,943
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 18.30%
Iowa Finance Authority - Underground Storage Tank
Revenue 5.125% 7/1/14 ......................... 5,200,000 5,377,684
Lee County Urban Renewal Revenue - Keokuk Waste
Treatment 6.40% 6/1/07 ........................ 500,000 531,210
Puerto Rico Commonwealth Industrial Development
General Purpose Revenue Series B
5.375% 7/1/16 ................................. 1,000,000 1,042,190
Puerto Rico Port Authority Revenue - Special
Facility - American Airlines
6.25% 6/1/26 .................................. 1,275,000 1,373,124
----------
8,324,208
----------
POWER AUTHORITY REVENUE BONDS - 9.78%
**Puerto Rico Electric Power Authority Inverse
Floater Rols 6.09% 7/1/19 ..................... 1,000,000 909,080
Puerto Rico Electric Power Authority Revenue
Series U 6.00% 7/1/14 ......................... 1,100,000 1,210,088
Puerto Rico Electric Power Authority Series EE
4.75% 7/1/24 .................................. 1,400,000 1,330,658
Virgin Islands Water & Power Authority Electric
System Revenue 5.30% 7/1/18 ................... 1,000,000 998,720
----------
4,448,546
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS (CONTINUED)
*Pre-Refunded/Escrowed to Maturity Bonds - 6.59%
Puerto Rico Electric Power Authority Revenue
6.25% 7/1/17-02 ............................. $1,000,000 $1,097,330
Virgin Islands Public Finance Authority (Escrowed
to maturity) 7.30% 10/1/18 .................. 1,500,000 1,898,820
----------
2,996,150
----------
TRANSPORTATION REVENUE BONDS - 7.97%
Guam Highway (FSA) 6.30% 5/1/12 ................ 1,950,000 2,113,800
Puerto Rico Commonwealth Highway &
Transportation Revenue 5.25% 7/1/21 ......... 1,500,000 1,512,735
----------
3,626,535
----------
UTILITY REVENUE BONDS - 4.79%
Puerto Rico Telephone Revenue Authority
5.50% 1/1/22 ................................ 2,120,000 2,180,399
----------
2,180,399
----------
WATER & SEWER REVENUE BONDS - 10.65%
Iowa Finance Authority - State Revolving Fund
Revenue 5.20% 5/1/23 ........................ 2,445,000 2,450,941
Iowa Finance Authority - State Revolving Fund
Revenue 6.25% 5/1/24 ........................ 1,750,000 1,893,360
Virgin Islands Water & Power Authority
5.50% 7/1/17 ................................ 510,000 502,437
----------
4,846,738
----------
OTHER REVENUE BONDS - 27.58%
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 4.90% 6/1/99 ............. 50,000 50,103
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.00% 6/1/00 ............. 300,000 301,305
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.10% 6/1/01 ............. 315,000 317,432
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.20% 6/1/02 ............. 330,000 333,600
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.30% 6/1/03 ............. 345,000 349,806
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.40% 6/1/04 ............. 365,000 371,128
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.50% 6/1/05 ............. 385,000 392,496
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.60% 6/1/06 ............. 405,000 413,902
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.70% 6/1/07 ............. 425,000 435,340
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.80% 6/1/08 ............. 450,000 460,904
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue - Series A 5.90% 6/1/09 ............. 800,000 819,304
Iowa Finance Authority Revenue - Correctional
Facility Program 5.70% 6/15/14 .............. 2,000,000 2,140,060
<PAGE>
for tax-exempt income 19
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
OTHER REVENUE BONDS (CONTINUED)
Puerto Rico Municipal Finance Authority (FSA)
6.00% 7/1/14 ....................................... $ 1,700,000 $ 1,869,320
Puerto Rico Public Building Authority Revenue -
Series L 5.75% 7/1/16 .............................. 1,000,000 1,053,280
Puerto Rico Public Building Authority Revenue -
Series M 5.50% 7/1/21 .............................. 1,100,000 1,140,908
Puerto Rico Public Building Authority Revenue -
Series M 5.75% 7/1/15 .............................. 1,000,000 1,053,280
Virgin Islands Public Finance Authority Revenue -
Sub Lien Funded Loan Notes Series E
5.875% 10/1/18 ..................................... 1,000,000 1,036,090
----------
12,538,258
----------
Total Municipal Bonds (cost $41,939,500) .............. 44,886,172
----------
Number
of Shares
---------
SHORT-TERM INVESTMENTS - 0.34%
Norwest Advantage Municipal Money Market Fund ......... 155,256 155,256
----------
Total Short-Term Investments
(cost $155,256) .................................... 155,256
----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.02%
(cost $42,094,756) ................................. $45,041,428
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.98% 446,925
----------
NET ASSETS APPLICABLE TO 4,494,418 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ............ $45,488,353
-----------
NET ASSET VALUE - TAX-FREE IOWA FUND A CLASS
($39,613,317 / 3,913,994 SHARES) ................... $10.12
======
NET ASSET VALUE - TAX-FREE IOWA FUND B CLASS
($4,564,106 / 450,871 SHARES) ...................... $10.12
======
NET ASSET VALUE - TAX-FREE IOWA FUND C CLASS
($1,310,930 / 129,553 SHARES) ...................... $10.12
======
<PAGE>
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
Common stock, $0.01 par value, 10,000,000,000
shares authorized to the Fund with 1,000,000,000
shares allocated to Tax- Free Iowa Fund A Class,
1,000,000,000 shares allocated to Tax- Free
Iowa Fund B Class and 1,000,000,000 shares
allocated to Tax- Free Iowa Fund C Class .................... $44,297,916
Accumulated net realized loss on investments ................... (1,756,235)
Net unrealized appreciation of investments .................... 2,946,672
-----------
Total net assets ............................................... $45,488,353
===========
- ----------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
**Inverse floaters represent a security that pays
interest at rates that increase (decrease) with a decrease (increase) in a
specified index. Interest rates disclosed are in effect on February 28, 1999.
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) ............................ $10.12
Sales charge (3.75% of offering price or 3.85% of amount
invested per share) (B) ............................. 0.39
------
Offering price ......................................... $10.51
======
(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>
20 for tax-exempt income
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR TAX-FREE KANSAS FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS - 99.77%
CERTIFICATES OF PARTICIPATION - 8.98%
Linn County, Kansas for America One, LLC
7.25% 3/1/13 ....................................... $ 350,000 $ 355,558
Shawnee County, Kansas Certificate Of Participation
Community Mental Health Center
5.35% 7/1/19 ....................................... 250,000 240,398
Spring Hill Certificate of Participation
A Spring Hill Golf Corp. 6.50% 1/15/28 ............. 1,000,000 970,780
---------
1,566,736
---------
GENERAL OBLIGATION BONDS - 7.80%
Allen County Unified School District #258 (AMBAC)
6.875% 9/1/10 ...................................... 240,000 295,094
Ellsworth County, Kansas Series 1
5.75% 9/1/17 ....................................... 250,000 266,408
Linn County Unified School District
5.70% 11/1/16 ...................................... 500,000 530,170
Summer County Unified School District #356 (MBIA)
5.75% 9/1/11 ....................................... 250,000 269,470
---------
1,361,142
---------
HIGHER EDUCATION REVENUE BONDS - 13.03%
Kansas Development Finance Authority - Kansas
Board of Regents - Wichita State University
(AMBAC) 5.875% 6/1/17 .............................. 300,000 319,518
Puerto Rico Educational Facility Revenue -
Polytechnic University 6.50% 8/1/24 ................ 1,170,000 1,278,897
Winfield Kansas Educational Facilities Revenue for
Southwestern College Refunding & Improvement
5.75% 4/1/22 ....................................... 680,000 674,812
---------
2,273,227
---------
HOSPITAL REVENUE BONDS - 7.99%
Lawrence, Kansas for Lawrence Memorial Hospital
6.20% 7/1/19 ....................................... 250,000 264,098
Olathe, Kansas Health Facility Revenue for
Evangelical Lutheran Good Samaritan Project
(AMBAC) 6.00% 5/1/19 ............................... 250,000 270,213
Olathe, Kansas Health Facility Revenue For Olathe
Medical Center Series 94A (AMBAC)
5.875% 9/1/16 ...................................... 100,000 103,942
Shawnee County Sister of Charity Leavenworth
Hospital (FSA) 5.00% 12/1/23 ....................... 250,000 243,403
Wichita, Kansas Health Care Improvement
Industrial Revenue (The Kansas Masonic Home -
Series VI) 6.25% 12/1/17 ........................... 500,000 511,240
---------
1,392,896
---------
HOUSING REVENUE BONDS - 13.20%
Kansas Development Finance Authority for Martin
Creek Multifamily Housing Project (FHA)
6.50% 8/1/24 ....................................... 50,000 53,162
Kansas State Development Finance Authority
Multifamily Revenue-Oak Ridge Park Apartments
Project-Series F 6.625% 8/1/29 ..................... 1,000,000 1,057,730
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Olathe, Kansas Multifamily Housing - Deerfield
Apartments Series 1994A (FNMA)
6.45% 6/1/19 ......................................... $ 250,000 $ 267,145
Olathe, Kansas Multifamily Housing-Jefferson Place
Apartments Project - Series B
6 .10% 7/1/22 ........................................ 300,000 312,081
Wichita Kansas Multifamily Housing Innes Station
Apartments Project I 6.25% 3/1/28 .................... 600,000 612,396
---------
2,302,514
---------
INDUSTRIAL DEVELOPMENT REVEUNE BONDS - 4.96%
Columbus, Kansas Industrial Revenue ACE Electrical
Acquisition 7.00% 8/1/17 ............................. 800,000 812,608
Wamego Pollution Control Revenue Western
Resources Inc. Project (MBIA)
6.00% 2/1/33 ......................................... 50,000 52,642
-------
865,250
-------
*PRE-REFUNDED BONDS - 19.80%
Douglas County Lawrence Unified School District
#497 6.00% 9/1/15-03 ................................ 250,000 270,383
Jefferson County Unified School District #340
(FSA) 6.35% 9/1/15-04 ............................... 250,000 281,345
Johnson County 6.125% 9/1/12-02 ...................... 600,000 648,054
Kansas City Community College Student Center
(MBIA) 6.25% 5/15/20-02 ............................. 300,000 324,279
Kansas City Utility System Revenue (FGIC)
6.375% 9/1/23-04 .................................... 295,000 337,038
Kansas Development Finance Authority Water
pollution Control Sewer Revenue
6.00% 11/1/14-03 .................................... 250,000 278,040
Maize Unified School District #266 Series 1994
(FSA) 5.875% 9/1/12-03 .............................. 250,000 272,325
Sedgwick County Unified School District #265
(FSA) 5.50% 10/1/13-04 .............................. 250,000 271,173
Sedgwick County Unified School District #267
(AMBAC) 6.15% 11/1/09-05 ............................ 250,000 282,703
Shawnee County Unified School District #345 (MBIA)
5.75% 9/1/11-04 ..................................... 250,000 273,970
Shawnee County Unified School District #501 (FGIC)
5.75% 2/1/11-03 ..................................... 200,000 214,418
---------
3,453,728
---------
POWER AUTHORITY REVENUE BONDS - 12.48%
**Puerto Rico Electric Power Authority Inverse
Floater 5.83% 7/1/19 ................................ 600,000 545,448
Puerto Rico Electric Power Authority Series Z
5.25% 7/1/21 ........................................ 500,000 504,245
Wyandotte County, Kansas Unified Government
Utility System Revenue (MBIA)
4.50% 9/1/28 ........................................ 1,230,000 1,126,803
---------
2,176,496
---------
<PAGE>
for tax-exempt income 21
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS (CONTINUED)
TRANSPORTATION REVENUE BONDS - 0.59%
Kansas Department of Transportation
5.375% 3/1/13 ...................................... $100,000 $ 103,227
----------
103,227
----------
WATER & SEWER REVENUE BONDS - 6.49%
Haysville Water & Sewer (FSA)
5.80% 10/1/16 ...................................... 250,000 270,663
Johnson County Water Revenue
5.25% 12/1/15 ...................................... 175,000 178,441
Kansas City Utility Unrefunded Balance
6.375% 9/1/23 ...................................... 605,000 682,894
-----------
1,131,998
-----------
OTHER REVENUE BONDS - 4.45%
Virgin Islands Public Finance Authority Revenue
Sub Lien Funded Loan Notes Series E
5.875% 10/1/18 ..................................... 750,000 777,068
------------
777,068
------------
Total Municipal Bonds (cost $16,297,149) .............. 17,404,282
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.77%
(cost $16,297,149) ................................. $17,404,282
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.23% 39,609
-----------
NET ASSETS APPLICABLE to 1,561,619 Shares
($0.01 PAR VALUE) OUTSTANDING - 100.00% ............ $17,443,891
===========
NET ASSET VALUE - TAX-FREE KANSAS FUND A CLASS
($12,793,408 / 1,145,723 SHARES) ................... $11.17
======
NET ASSET VALUE - TAX-FREE KANSAS FUND B CLASS
($4,533,254 / 405,391 SHARES) ...................... $11.18
======
NET ASSET VALUE - TAX-FREE KANSAS FUND C CLASS
($117,229 / 10,505 SHARES) ......................... $11.16
======
<PAGE>
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
Common stock, $0.01 par value, unlimited shares authorized
to the Tax-Free Kansas Fund .................................... $16,297,017
Undistributed net investment income ............................... 20,757
Accumulated net realized gain on investments ...................... 18,984
Net unrealized appreciation of investments ........................ 1,107,133
-----------
Total net assets .................................................. $17,443,891
===========
- ------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
**Inverse floaters represent a security that pays interest at rates that
increase (decrease) with a decrease (increase) in a specified index.
Interest rates disclosed are in effect on February 28, 1999.
- ------------
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE KANSAS FUND A CLASS
Net asset value A Class (A) ........................... $11.17
Sales charge (3.75% of offering price or 3.94% of
amount invested per share) (B) ....................... 0.44
------
Offering price ........................................ $11.61
======
- ------------
(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>
22 for tax-exempt income
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR TAX-FREE MISSOURI INSURED FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS - 97.19%
GENERAL OBLIGATION BONDS - 4.32%
St. Charles County Missouri Francis Howell
School District Capital Appreciation (FGIC)
Zero Coupon 3/1/16 ................................. $2,000,000 $ 852,660
St. Charles (FSA) 5.75% 3/1/15 ........................ 1,000,000 1,065,340
Springfield School District #R12 Series A (MBIA)
5.25% 3/1/11 ....................................... 500,000 513,755
----------
2,431,755
----------
HIGHER EDUCATION REVENUE BONDS - 1.88%
Missouri State Health & Education Facility -
Central Missouri State University (AMBAC)
5.75% 10/1/25 ...................................... 1,000,000 1,058,200
----------
1,058,200
----------
HOSPITAL REVENUE BONDS - 25.11%
Cape Girardeau SE Missouri Hospital (MBIA)
5.25% 6/1/16 ....................................... 1,000,000 1,046,300
Hannibal Health Facilities Series A (Hannibal
Regional Hospital) (FSA) 5.625% 3/1/12 ............. 2,500,000 2,690,825
Hannibal Health Facilities Series A (Hannibal
Regional Hospital) (FSA) 5.75% 3/1/22 .............. 1,000,000 1,069,490
Jackson County St. Joseph's Hospital (MBIA)
6.50% 7/1/12 ....................................... 1,980,000 2,153,745
Jackson County St. Mary's Hospital (MBIA)
5.75% 7/1/24 ....................................... 2,000,000 2,122,400
Missouri State Health & Education Facility
(Children's Mercy Hospital) (MBIA)
5.65% 5/15/23 ...................................... 1,000,000 1,040,100
Missouri State Health & Education Facility (Health
Midwest) (MBIA) 6.25% 2/15/22 ...................... 1,000,000 1,069,080
Missouri State Health & Education Facility
(Heartland Health Systems) (AMBAC)
6.35% 11/15/17 ..................................... 1,250,000 1,355,813
Missouri State Health & Education Facility (SSM
Health Care) (MBIA) 6.40% 6/1/10 ................... 500,000 585,970
Missouri State Health & Education Facility (St.
Luke's Health Systems) (MBIA)
5.125% 11/15/19 .................................... 1,000,000 1,004,140
----------
14,137,863
----------
HOUSING REVENUE BONDS - 15.92%
Missouri Single Family Housing (FNMA/GNMA)
7.20% 9/1/26 ....................................... 1,795,000 2,031,743
Missouri Single Family Housing (FNMA/GNMA)
7.25% 9/1/26 ....................................... 2,160,000 2,406,370
Missouri Single Family Housing (FNMA/GNMA)
7.45% 9/1/27 ....................................... 1,780,000 2,023,362
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Missouri Single Family Housing (FNMA/GNMA)
7.55% 9/1/27 ....................................... $1,605,000 $1,824,981
Missouri Single Family Housing (GNMA)
7.20% 12/1/17 ...................................... 205,000 222,829
Missouri Single Family Housing (GNMA)
7.25% 12/1/20 ...................................... 420,000 455,818
----------
8,965,103
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 1.94%
St. Louis Municipal Finance Corporation City Lease
Revenue-City Justice Center, Series A (AMBAC)
5.95% 2/15/16 ...................................... 1,000,000 1,094,080
----------
1,094,080
----------
LEASE/CERTIFICATES OF PARTICIPATION - 1.93%
Kansas City Muehlebach Hotel (FSA)
5.90% 12/1/18 ...................................... 1,000,000 1,084,420
----------
1,084,420
----------
POWER AUTHORITY REVENUE BONDS - 4.10%
**Puerto Rico Electric Power Authority Inverse
Floater 5.83% 7/1/19 ............................... 1,275,000 1,159,077
Sikeston Electric Revenue (MBIA)
6.00% 6/1/13 ....................................... 1,000,000 1,149,570
----------
2,308,647
----------
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS - 26.84%
Clark County School District (FSA)
5.75% 3/1/15-05 .................................... 1,775,000 1,924,348
Franklin County School District (FGIC)
5.75% 3/1/13-03 .................................... 1,100,000 1,170,411
Greene County Single Family Mortgage Revenue -
(Private Mortgage Insurance) (Escrowed to maturity)
Zero Coupon 3/1/16 ................................. 1,225,000 515,382
Kansas City Airport Revenue (FSA)
6.875% 9/1/14-04 ................................... 1,675,000 1,941,861
Sikeston Electric Revenue (MBIA)
6.25% 6/1/12-02 .................................... 2,000,000 2,202,920
St. Charles School District (FGIC)
6.50% 2/1/14-06 .................................... 1,250,000 1,437,012
St. Louis County School District #8 (MBIA)
5.60% 2/15/15-05 ................................... 1,490,000 1,627,452
St. Louis Municipal Finance Corporation Leasehold
Revenue - (FGIC) 6.25% 2/15/12-05 .................. 1,850,000 2,084,062
Troy School District #3 Lincoln County (MBIA)
6.10% 3/1/14-05 .................................... 1,235,000 1,382,484
West Platte School District (MBIA)
5.85% 3/1/15-05 .................................... 750,000 829,612
----------
15,115,544
----------
<PAGE>
for tax-exempt income 23
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
UTILITY REVENUE BONDS - 4.24%
Missouri Environmental Pollution Control Revenue -
St. Jospeh's Light & Power Co. (AMBAC)
5.85% 2/1/13 .......................................$2,200,000 $ 2,389,222
-----------
2,389,222
-----------
WATER & SEWER REVENUE BONDS - 4.21%
Liberty Sewer (MBIA) 6.00% 2/1/08 ..................... 600,000 674,346
Liberty Sewer (MBIA) 6.15% 2/1/15 ..................... 1,500,000 1,697,355
-----------
2,371,701
-----------
OTHER REVENUE BONDS - 6.70%
Kansas City Municipal Assistance Bartle Hall
Convention Center (MBIA) 5.60% 4/15/16 ............. 1,240,000 1,301,244
Missouri State Environmental - State Revolving Fund -
Branson (FSA) 6.05% 7/1/16 ......................... 2,265,000 2,473,153
-----------
3,774,397
-----------
Total Municipal Bonds (cost $50,285,592) .............. 54,730,932
-----------
NUMBER
OF SHARES
---------
SHORT-TERM INVESTMENTS - 1.33%
Norwest Advantage Municipal Money
Market Fund ........................................ 750,660 750,660
-------
Total Short-Term Investments
(cost $750,660) .................................... 750,660
-------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.52%
(COST $51,036,252) ................................. $55,481,592
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 1.48% 835,616
-----------
NET ASSETS APPLICABLE TO 5,181,196 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ............ $56,317,208
===========
NET ASSET VALUE - TAX-FREE MISSOURI INSURED FUND A CLASS
($44,927,153 / 4,133,095 SHARES) ................... $10.87
======
NET ASSET VALUE - TAX-FREE MISSOURI INSURED FUND B CLASS
($11,160,198 / 1,026,964 SHARES) ................... $10.87
======
NET ASSET VALUE - TAX-FREE MISSOURI INSURED FUND C CLASS
($229,857 / 21,137 SHARES) ......................... $10.87
======
<PAGE>
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
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 .......................................... $52,622,744
Undistributed net investment income ................... 2,973
Accumulated net realized loss on investments .......... (753,849)
Net unrealized appreciation of investments ............ 4,445,340
------------
Total net assets ...................................... $56,317,208
============
- ------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
**Inverse floaters represent a security that pays interest at rates that
increase (decrease) with a decrease (increase) in a specified index. Interest
rates disclosed are in effect on February 28, 1999.
- ------------
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 Asscociation
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE MISSOURI INSURED FUND A CLASS
Net asset value A Class (A) ........................... $10.87
Sales charge (3.75% of offering price or 3.86% of
amount invested per share) (B) ..................... 0.42
------
Offering price ........................................ $11.29
======
- ------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $100,000 or
more.
See accompanying notes
<PAGE>
24 for tax-exempt income
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE - VOYAGEUR TAX-FREE NORTH DAKOTA FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS - 99.38%
GENERAL OBLIGATION BONDS - 4.21%
Grand Forks Sewer Revenue 6.70% 6/1/07 .............. $ 270,000 $ 286,554
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ..................................... 1,100,000 1,015,740
----------
1,302,294
----------
HIGHER EDUCATION REVENUE BONDS - 3.45%
Burleigh County University Facilities University
of Mary Project 7.125 12/1/11 .................... 250,000 264,042
North Dakota State University Housing &
Auxiliary Facility 6.30% 4/1/07 .................. 250,000 268,123
North Dakota State University Housing &
Auxiliary Facility 6.50% 4/1/12 .................. 500,000 536,660
----------
1,068,825
----------
HOSPITAL REVENUE BONDS - 31.51%
Bismarck Hospital Alexius Medical Center
(AMBAC) 6.90% 5/1/06 ............................. 500,000 545,435
Bismarck Hospital Medical Center One Inc.
(MBIA) 7.50% 5/1/13 .............................. 250,000 256,497
Bismark North Dakota Health Care Facilities
5.00 % 7/1/28 .................................... 400,000 386,252
Cando, North Dakota Nursing Facility Revenue -
Towner County Medical Center Project
7.125% 8/1/22 .................................... 1,000,000 1,088,870
Carrington, North Dakota Health Facility Revenue
for Carrington Health Center 6.25% 11/15/15 ..... 500,000 536,360
Cass County, North Dakota Health Facility Revenue
for Catholic Health - Villa Nazareth Project
6.25% 11/15/14 .................................. 1,000,000 1,073,430
Fargo Hospital Facility St. Luke's Hospital,
Series 1992 6.50% 6/1/15 ......................... 1,000,000 1,080,040
Grand Forks, North Dakota Senior Housing Revenue
4000 Valley Square Project 6.25% 12/1/34 ......... 2,000,000 2,032,040
Grand Forks, United Hospital Obligated Group
(MBIA) 6.125% 12/1/14 ............................ 225,000 249,577
Grand Forks, United Hospital Obligated Group
(MBIA) 6.25% 12/1/19 ............................. 250,000 277,395
Killdeer, North Dakota Nursing Care Revenue
Hill Top Home of Comfort 6.00% 11/1/12 ........... 820,000 834,317
Valley City, North Dakota Congregate Housing
Revenue - Bridgeview Estates Project
7.25% 8/1/22 ..................................... 300,000 324,945
Ward County, North Dakota Health Care Facility
Revenue - Trinity Obligated Group, Ser 96A
6.00% 7/1/11 ..................................... 1,000,000 1,065,690
----------
9,750,848
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS - 24.38%
Minot Single Family Mortgage
7.70% 8/1/10 ..................................... $ 160,000 $ 169,194
North Dakota Housing Finance Agency Single
Family Mortgage Series A (FHA)
6.75% 7/1/12 ..................................... 155,000 163,615
North Dakota Housing Finance Authority Single
Family Mortgage 6.25% 1/1/17 ..................... 2,155,000 2,286,326
North Dakota Housing Finance Authority Single
Family Mortgage Series A 6.30% 7/1/16 ............ 1,830,000 1,939,654
North Dakota State Housing Finance Agency Revenue
Multifamily (FNMA) 6.125% 12/1/15 ................ 500,000 534,655
North Dakota State Housing Finance Agency Revenue
Multifamily (FNMA) 6.15% 12/1/17 ................. 1,300,000 1,390,480
North Dakota State Housing Finance Agency Single
Family Mortgage Series E (FNMA)
6.30% 1/1/15 ..................................... 720,000 761,846
North Dakota State Housing Finance Authority
Single Family Mortgage Series A
6.95% 7/1/12 ..................................... 280,000 296,710
----------
7,542,480
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 1.73%
Mercer County Pollution Control - Otter Tail Power
Company Project 6.90% 2/1/19 ..................... 500,000 533,945
----------
533,945
----------
POWER AUTHORITY REVENUE BONDS - 17.91%
Mercer County Pollution Control Revenue
Montana-Dakota Utilities Company Project
(FGIC) 6.65% 6/1/22 .............................. 500,000 548,055
Mercer County Pollution Control Revenue For Basin
Electric Power 6.05% 1/1/19 ...................... 1,250,000 1,375,675
**Puerto Rico Electric Power Authority Inverse Floater
Rols (FSA) 6.09% 7/1/19 .......................... 1,000,000 909,080
Puerto Rico Electric Power Authority Power Revenue
Series EE 4.75% 7/1/24 ........................... 2,000,000 1,900,940
Puerto Rico Electric Power Authority Series Z
5.25% 7/1/21 ..................................... 800,000 806,792
----------
5,540,542
----------
*PRE-REFUNDED BONDS - 1.18%
Fargo Park District Revenue
7.25% 11/1/11-00 ................................. 200,000 212,488
North Dakota State Municipal Bond Bank
6.25% 12/1/11-99 ................................. 150,000 153,554
----------
366,042
----------
TRANSPORTATION REVENUE BONDS - 5.09%
Puerto Rico Commonwealth Highway & Transportation
Authority Series Y 5.50% 7/1/26 .................. 1,500,000 1,575,795
----------
1,575,795
----------
<PAGE>
for tax-exempt income 25
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS (CONTINUED)
OTHER REVENUE BONDS - 9.92%
North Dakota Building Authority Revenue (FSA)
6.00% 12/1/14 .................................... $1,310,000 $ 1,420,105
North Dakota Building Authority Revenue (FSA)
6.10% 12/1/16 .................................... 1,480,000 1,609,500
North Dakota State Student Loan (AMBAC)
7.00% 7/1/05 ..................................... 40,000 41,199
-----------
3,070,804
-----------
Total Municipal Bonds (cost $28,823,799) ............ 30,751,575
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED
(COST $28,823,799) - 99.38% ...................... $30,751,575
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 0.62% ................................. 191,919
-----------
NET ASSETS APPLICABLE TO 2,724,625 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% .......... $30,943,494
===========
NET ASSET VALUE - TAX-FREE NORTH DAKOTA FUND A CLASS
($29,871,015 / 2,630,187 SHARES) .............................. $11.36
NET ASSET VALUE - TAX-FREE NORTH DAKOTA FUND B CLASS ======
($1,038,336 / 91,430 SHARES) .................................. $11.36
NET ASSET VALUE - TAX-FREE NORTH DAKOTA FUND C CLASS ======
($34,143 / 3,008 SHARES) ...................................... $11.35
======
<PAGE>
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
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 ........... $28,966,878
Distribution in excess of net investment income .................. (374)
Accumulated net realized gain on investments ..................... 49,214
Net unrealized appreciation of investments ....................... 1,927,776
-----------
Total net assets ................................................. $30,943,494
===========
- ------------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
the bond is pre-refunded.
**Inverse floaters represent a security that pays interest at rates that
increase (decrease) with a decrease (increase) in a specified index. Interest
rates disclosed are in effect on February 28, 1999.
- ------------------
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE NORTH DAKOTA FUND A CLASS
Net asset value A Class (A) ...................................... $11.36
Sales charge (3.75% of offering price, or 3.87% of amount
invested per share) (B) ....................................... 0.44
------
Offering price ................................................... $11.80
======
- ------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would bepaid 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>
26 for tax-exempt income
VOYAGEUR INVESTMENT TRUST
DELAWARE - VOYAGEUR TAX-FREE OREGON INSURED FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS - 98.41%
CERTIFICATE OF PARTICIPATION - 6.63%
Oregon State Department Administrative Services
Certificate of Participation-Series A (AMBAC)
5.00% 5/1/24 ..................................... $2,500,000 $2,482,125
----------
2,482,125
----------
GENERAL OBLIGATION BONDS - 22.29%
Clackamas County Oregon School District (FGIC)
4.800% 6/1/18 .................................... 1,500,000 1,472,175
Columbia County Oregon School District (FGIC)
Zero Coupon 6/1/17 ............................... 1,000,000 401,130
Hermiston Water Bonds (AMBAC)
6.20% 8/1/24 ..................................... 500,000 548,185
Josephine County Oregon (AMBAC)
4.875% 6/1/18 .................................... 1,000,000 990,690
Lane County School District #19 (Springfield) (FGIC)
6.00% 10/15/14 ................................... 500,000 576,135
Lincoln County School District (FGIC)
5.25% 6/15/12 .................................... 1,450,000 1,536,188
Malheur County Jail (MBIA) 6.30% 12/1/12 ............ 500,000 559,520
Multnomah County School District #3 Park Rose (FGIC)
5.50% 12/1/11 .................................... 500,000 528,865
North Unit Irrigation District (MBIA)
5.75% 6/1/16 ..................................... 1,000,000 1,073,910
Portland (MBIA) 5.75% 6/1/15 ........................ 500,000 529,750
Umatilla County Oregon School District #6R Umatilla
(AMBAC) Zero Coupon 12/15/22 ..................... 200,000 60,656
Washington County School District (Sherwood) (FSA)
#88J 6.10% 6/1/12 ................................ 65,000 71,830
----------
8,349,034
----------
HIGHER EDUCATION REVENUE BONDS - 13.56%
Central Oregon Community College (FGIC)
5.90% 6/1/09 ..................................... 750,000 805,020
Oregon Health and Education Authority for Lewis &
Clark College (MBIA) 6.125% 10/1/24 .............. 1,055,000 1,159,551
Oregon Health and Education Authority for Reed
College (MBIA) 5.375% 7/1/25 ..................... 1,000,000 1,032,130
Oregon Health Sciences University (MBIA)
Zero Coupon 7/1/21 ............................... 6,500,000 2,084,029
----------
5,080,730
----------
HOSPITAL REVENUE BONDS - 5.80%
Western Lane Hospital District for Sisters of
St. Joseph Peace Hospital (MBIA)
5.75% 8/1/19 ..................................... 1,000,000 1,073,620
Western Lane Hospital District for Sisters of
St. Joseph Peace Hospital (MBIA)
5.875% 8/1/12 .................................... 1,000,000 1,098,810
----------
2,172,430
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS - 3.05%
Oregon Health, Housing, Educational and Cultural
Facilities Authority for Pier Park Project (GNMA)
6.05% 4/1/18 ..................................... $1,095,000 $1,142,238
----------
1,142,238
----------
POWER AUTHORITY REVENUE BONDS - 6.04%
Central Lincoln Peoples Utility District (AMBAC)
5.75% 1/1/15 ..................................... 500,000 525,935
Northern Wasco County (FGIC)
5.625% 12/1/22 ................................... 1,000,000 1,056,070
**Puerto Rico Electric Power Authority Inverse Floater
Rols (FSA) 6.09% 7/1/19 .......................... 750,000 681,810
----------
2,263,815
----------
*PRE-REFUNDED BONDS - 22.21%
Chemeketa Community College (FGIC)
5.80% 6/1/12-06 .................................. 1,500,000 1,673,250
Eugene Electric Revenue Series C (MBIA)
5.80% 8/1/22-04 .................................. 1,250,000 1,384,625
Lane County School District #19 (MBIA)
6.30% 10/15/14-04 ................................ 500,000 568,070
Multnomah County School District #39 Corbett (MBIA)
6.00% 12/1/13-04 ................................. 500,000 556,255
Oregon State Department Administrative Services
Certificate of Participation - Series A (AMBAC)
5.80% 5/1/24-07 .................................. 1,000,000 1,083,450
Portland Sewer System Revenue (FSA)
6/1/15-04 ........................................ 1,000,000 1,126,180
Tillamook County (FGIC) 6.25% 1/1/14-05 ........... 250,000 283,040
Umatilla Pendleton School District (AMBAC)
#016R 6.00% 7/1/14-04 ............................ 500,000 557,945
Washington County Education Service (MBIA)
7.10% 6/1/25-05 .................................. 700,000 823,032
Washington County School District (Sherwood) (FSA)
#88J 6.10% 6/1/12-05 ............................. 235,000 264,085
----------
8,319,932
----------
TRANSPORTATION REVENUE BONDS - 5.61%
Portland Airport Revenue for Portland
International Airport (FGIC) (AMT)
5.625% 7/1/26 .................................... 2,000,000 2,102,780
----------
2,102,780
----------
WATER & SEWER REVENUE BONDS - 13.22%
Beaverton Water Revenue (FSA)
6.125% 6/1/14 .................................... 500,000 546,150
Klamath Falls Water Revenue (FSA)
6.10% 6/1/14 ..................................... 500,000 549,025
Portland Oregon Sewer System Revenue (MBIA)
4.500% 6/1/18 .................................... 1,855,000 1,745,461
<PAGE>
for tax-exempt income 27
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS (CONTINUED)
WATER & SEWER REVENUE BONDS (CONTINUED)
Salem Water & Sewer Revenue (MBIA)
5.50% 6/1/14 ........................................ $1,000,000 $ 1,052,320
Salem Water & Sewer Revenue (MBIA)
5.625% 6/1/16 ....................................... 1,000,000 1,059,310
-----------
4,952,266
-----------
Total Municipal Bonds (cost $34,338,456) 36,865,350
-----------
NUMBER
OF SHARES
---------
SHORT-TERM INVESTMENTS - 6.88%
Norwest Advantage Municipal Money Market Fund .......... 2,577,651 2,577,651
-----------
Total Short-Term Investments
(cost $2,577,651) ................................... 2,577,651
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED
(COST $36,916,107) - 105.29% ........................ $39,443,001
LIABILITIES NET OF RECEIVABLES AND OTHER
ASSETS - (5.29%)*** ................................. (1,982,169)
-----------
NET ASSETS APPLICABLE TO 3,592,413 SHARES ($0.01 PAR VALUE)
OUTSTANDING - 100.00% ............................... $37,460,832
===========
NET ASSET VALUE - TAX-FREE OREGON INSURED FUND A CLASS
($28,639,859 / 2,746,812 SHARES) .............................. $10.43
======
NET ASSET VALUE - TAX-FREE OREGON INSURED FUND B CLASS
($7,333,936 / 703,153 SHARES) ................................. $10.43
======
NET ASSET VALUE - TAX-FREE OREGON INSURED FUND C CLASS
($1,487,037 / 142,448 SHARES) ................................. $10.44
======
<PAGE>
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
Common stock, $0.01 par value, unlimited shares authorized to the
Tax-Free Oregon Insured Fund .................................. $35,527,866
Distributions in excess of net investment income ................. (1,295)
Accumulated net realized loss on investments ..................... (592,633)
Net unrealized appreciation of investments ....................... 2,526,894
-----------
Total net assets ................................................. $37,460,832
===========
- --------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
** Inverse floaters represent a security that pays interest at rates that
increase (decrease) with a decrease (increase) in a specified index. Interest
rates disclosed are in effect on February 28, 1999.
***Of this amount, $2,492,914 represents payable for securities purchased at
February 28, 1999.
- --------------------
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
AMT - Alternate Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE OREGON INSURED FUND A CLASS
Net asset value A Class (A) .......................................... $10.43
Sales charge (3.75% of offering price, or 3.93% of amount
invested per share) (B) ........................................... 0.41
-------
Offering price ....................................................... $10.84
- --------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $100,000 or
more.
See accompanying notes
<PAGE>
28 for tax-exempt income
VOYAGEUR INVESTMENT TRUST
DELAWARE - VOYAGEUR TAX-FREE WASHINGTON INSURED FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------
MUNICIPAL BONDS - 109.41%
GENERAL OBLIGATION BONDS - 17.87%
Benton County Independent School District #116
(FGIC) 5.80% 12/1/10 ............................... $100,000 $109,060
Bothell (AMBAC) 5.70% 12/1/10 ......................... 75,000 80,903
Clark County School District #114 (FGIC)
6.00% 12/1/11 ...................................... 75,000 84,256
Kent Washington Series A (MBIA)
6.00% 12/1/16 ...................................... 100,000 109,891
King County Kent School District #415 (MBIA)
5.55% 12/1/11 ...................................... 75,000 82,569
King County Washington Series B
4.75% 1/1/20 ....................................... 125,000 118,956
Snohomish County (MBIA) 5.90% 12/1/15 ................. 75,000 80,689
Washington State Series 93A Utility General Obligation
(FGIC) 5.75% 10/1/17 ............................... 100,000 104,497
--------
770,821
--------
HIGHER EDUCATION REVENUE BONDS - 15.25%
Washington Higher Education Pacific Lutheran
College (Connie Lee) 5.70% 11/1/26 ................. 200,000 212,024
Washington State Higher Education Facilities
5.00% 10/1/28 ...................................... 75,000 73,521
Washington State Higher Educational Facilities
Seattle University Project (AMBAC)
5.20% 5/1/28 ....................................... 150,000 150,314
Washington State University Housing & Dining
System (MBIA) 6.375% 10/1/18 ....................... 200,000 221,852
--------
657,711
--------
HOSPITAL REVENUE BONDS - 17.94%
University of Washington Medical Center (FSA)
6.30% 8/15/14 ...................................... 200,000 222,376
Washington State Health Care Facilities Authority
Revenue Multicare Health Systems
5.00% 8/15/22 ...................................... 250,000 243,263
Washington State Health Care Facilities Authority
Revenue Swedish Health Systems (AMBAC)
5.25% 11/15/26 ..................................... 100,000 100,775
Washington State Health Care Facility Authority Revenue
Yakima Valley Memorial Hospital (Connie Lee)
5.25% 12/1/20 ...................................... 100,000 100,979
Washington State Health Care Facility Authority Revenue
Peace Health (MBIA) 5.625% 11/15/15 ................ 100,000 106,389
--------
773,782
--------
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS - 20.96%
King County, Washington Housing Authority -
Fred Lind Manor Project-A
(GNMA) 6.672% 6/20/32 .............................. $200,000 $219,206
Kitsap County Housing (GNMA)
7.10% 2/20/36 ...................................... 200,000 227,250
Washington State Housing Finance Commonwealth
Multifamily Mortgage Revenue A
(GNMA) 6.00% 7/1/30 ................................ 60,000 63,326
Washington State Housing Finance - Single Family
Series 2A (GNMA) (AMT) 6.30% 12/1/27 ............... 180,000 189,990
Washington State Housing Single Family
Mortgage Revenue (GNMA) 6.20% 12/1/22 .............. 195,000 204,272
--------
904,044
-------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 1.92%
University Of Washington Parking Revenue (AMBAC)
6.125% 11/1/14 ..................................... 75,000 83,048
--------
83,048
--------
POWER AUTHORITY REVENUE BONDS - 19.00%
Grant County Public Utility District #2 Wanapum (MBIA)
5.875% 1/1/26 ...................................... 100,000 107,208
Grant County Washington Public Utilities District #2
Preist Rapids Hydro Electric Series 2A
5.25% 1/1/18 ....................................... 500,000 497,005
Kittitas County Public Utility District #1 (MBIA)
5.80% 12/1/20 ...................................... 100,000 107,131
Washington State Public Power #1 (MBIA)
5.75% 7/1/12 ....................................... 100,000 108,511
--------
819,855
--------
TRANSPORTATION REVENUE BONDS - 7.84%
Central Pugent Sound Washington Regional Transportation
Authority (FGIC) 4.75% 2/1/28 ...................... 150,000 140,808
Port Seattle, Washington Passenger Facilities
Charge Revenue Series A 5.00% 12/1/23 .............. 150,000 146,655
Port Tacoma, Washington (AMBAC)
5.30% 12/1/17 ...................................... 50,000 50,695
--------
338,158
--------
<PAGE>
for tax-exempt income 29
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------- --------
MUNICIPAL BONDS (CONTINUED)
WATER & SEWER REVENUE BONDS - 8.63%
Covington Water & Sewer Revenue (AMBAC)
6.00% 3/1/15 .................................. $ 75,000 $ 81,098
Olympia Washington Water & Sewer (FGIC)
5.125% 11/1/17 ................................ 100,000 100,514
Seattle Metrolpolitan Sewer Revenue (FGIC)
5.70% 1/1/14 .................................. 75,000 79,474
Vancouver Water & Sewer Revenue (FGIC)
6.00% 6/1/16 .................................. 100,000 111,240
----------
372,326
----------
Total Municipal Bonds (cost $4,457,465) .......... 4,719,745
----------
NUMBER
OF SHARES
---------
SHORT-TERM INVESTMENTS - 0.82%
Norwest Advantage Municipal Money Market Fund
2.59% 3/1/99 ..................................... 35,602 35,602
----------
Total Short-Term Investments (cost $35,602) ......... 35,602
----------
TOTAL MARKET VALUE OF SECURITIES OWNED
(cost $4,493,067) - 110.23% .................................. $4,755,347
LIABILITIES NET OF RECEIVABLES AND OTHER
Assets - (10.23%)* ........................................... (441,514)
----------
NET ASSETS APPLICABLE TO 396,842 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ...................... $4,313,833
==========
NET ASSET VALUE - TAX-FREE WASHINGTON INSURED FUND A CLASS
($2,518,469 / 231,816 SHARES ) ............................... $10.86
======
NET ASSET VALUE - TAX-FREE WASHINGTON INSURED FUND B CLASS
($1,531,468 / 140,749 SHARES) ................................ $10.88
======
NET ASSET VALUE - TAX-FREE WASHINGTON INSURED FUND C CLASS
($263,896 / 24,277 SHARES) ................................... $10.87
======
<PAGE>
- --------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
Common stock, $0.01 par value, unlimited shares authorized
to the Tax-Free Washington Insured Fund ....................... $4,132,291
Accumulated net realized loss on investments ..................... (80,738)
Net unrealized appreciation of investments ....................... 262,280
----------
Total net assets ................................................. $4,313,833
==========
- ----------
*Of this amount, $491,890 represents payable for securities purchased at
February 28, 1999.
- ----------
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
AMT - Alternative Minimum Tax
Connie Lee - Insured by the College Construction Insurance Association
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE WASHINGTON INSURED FUND A CLASS
Net asset value A Class (A) .............................. $10.86
Sales charge (3.75% of offering price or 3.87% of amount
invested per share) (B) ............................... 0.42
------
Offering price ........................................... $11.28
======
- ----------
(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>
30 for tax-exempt income
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE WISCONSIN FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------- ----------
MUNICIPAL BONDS - 99.50%
GENERAL OBLIGATION BONDS - 3.41%
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ..................................... $1,500,000 $1,385,100
----------
1,385,100
----------
HIGHER EDUCATION REVENUE BONDS - 2.08%
Madison Community Development Authority Revenue -
Edgewood College 6.25% 4/1/14 .................... 500,000 528,985
Puerto Rico Educational Facility Revenue -
Polytechnic University 6.50% 8/1/24 .............. 290,000 316,993
----------
845,978
----------
HOSPITAL REVENUE BONDS - 2.46%
Kaukauna Housing Authority Revenue - St. Paul Home
6.10% 9/1/07 ..................................... 200,000 205,216
Puerto Rico Industrial Tourist Educational
Medical & Environmental Control Facilities
(Hospital Auxilio Mutuo Project - Series A)
5.50% 7/1/17 ..................................... 500,000 529,040
Superior Redevelopment Authority Revenue - Superior
Memorial Hospital (FHA) 5.80% 5/1/10 ............. 250,000 264,718
----------
998,974
----------
HOUSING REVENUE BONDS - 27.04%
Dane County Multifamily Housing Revenue - Forest
Harbor Apartment Project 5.85% 7/1/11 ............ 125,000 130,261
Dane County Multifamily Housing Revenue - Forest
Harbor Apartment Project 5.90% 7/1/12 ............ 125,000 129,486
Grant County Wisconsin Housing Authority
Housing Revenue Refunding - Housing - Orchard
Manor 5.35% 7/1/26 ............................... 1,000,000 1,004,290
Green Bay Wisconsin Housing Authority Multifamily
Housing Revenue - Moraine Limited - Series A (FHA)
6.15% 12/1/30 .................................... 2,225,000 2,379,326
La Crosse Housing Authority Washburn Project
6.375% 10/1/16 ................................... 100,000 103,936
La Crosse Housing Authority Washburn Project
6.50% 10/1/26 .................................... 250,000 258,807
Milwaukee Redevelopment Authority Multifamily
Housing 6.30% 8/1/38 ............................. 1,455,000 1,537,964
New Berlin Multifamily Housing Authority Revenue
7.125% 5/1/24 .................................... 500,000 531,390
Puerto Rico Housing Authority Single Family
Mortgage Revenue 6.85% 10/15/23 .................. 625,000 658,919
Puerto Rico Housing Bank & Finance Agency (GNMA)
6.25% 4/1/29 ..................................... 680,000 724,268
Superior Housing Authority - St. Francis Project
(GNMA) 6.00% 1/20/22 ............................. 565,000 586,764
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------- ----------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Superior Housing Authority - St. Francis Project
(GNMA) 6.15% 7/20/31 .......................... $ 835,000 $ 865,452
Waukesha Wisconsin Housing Westgrove Wood Project
(GNMA) 6.00% 12/1/31 .......................... 1,500,000 1,584,810
Wauwatosa Multifamily Housing Revenue - Harwood
Place, Inc. 5.75% 12/1/08 ..................... 480,000 489,134
-----------
10,984,807
-----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 15.55%
Hartford Community Development Authority Lease
Revenue 6.15% 12/1/09 ......................... 240,000 258,948
Milwaukee Redevelopment Authority Revenue -
Goodwill Industries, Inc. 6.35% 10/1/09 ....... 2,000,000 2,101,800
Omro Community Development Authority
5.875% 12/1/11 ................................ 300,000 320,934
Puerto Rico Commonwealth Industrial Development
General Purpose Revenue Series B
5.375% 7/1/16 ................................. 1,000,000 1,042,190
Puerto Rico Industrial Medical Environmental
Revenue - PepsiCo Project
6.25% 11/15/13 ................................ 1,100,000 1,205,941
Two Rivers Community Development Authority Revenue
Architectural Forest Products
6.35% 12/15/12 ................................ 250,000 257,853
West Allis Community Development Authority
Revenue - Poblocki Investments, Ltd. ..........
5.90% 5/1/03 .................................. 1,080,000 1,130,879
-----------
6,318,545
-----------
LEASE/CERTIFICATES OF PARTICIPATION - 13.84%
Cudahey Community Development Authority Revenue
6.00% 6/1/11 .................................. 1,000,000 1,070,020
De Forest Redevelopment Lease Revenue
6.25% 2/1/18 .................................. 1,000,000 1,085,580
Little Chute Community Development Lease Revenue
5.625% 3/1/19 ................................. 680,000 703,609
Madison Community Development Authority,
Monona Terrace Community Project
5.80% 3/1/05 .................................. 125,000 136,054
Madison Community Development Authority,
Monona Terrace Community Project
5.90% 3/1/06 .................................. 365,000 399,197
Madison Community Development Authority,
Monona Terrace Community Project
6.10% 3/1/10 .................................. 1,500,000 1,627,335
Redgranite Wisconsin Community Development
Authority Revenue 5.85% 3/1/18 ................ 605,000 599,525
-----------
5,621,320
-----------
<PAGE>
for tax-exempt income 31
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------- ----------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS - 7.66%
Southeast Wisconsin Professional Baseball Park
District Sales Tax Revenue (MBIA)
5.80% 12/15/26-07 ............................. $ 1,000,000 $ 1,118,920
Virgin Islands Public Finance Authority (Escrowed
to maturity) 7.30% 10/1/18 .................... 700,000 886,116
Wisconsin Housing Finance Authority (FHA)
6.10% 6/1/21-17 ............................... 1,000,000 1,107,880
-----------
3,112,916
-----------
POWER AUTHORITY REVENUE BONDS - 5.10%
Puerto Rico Electric Power Authority Series EE
4.75% 7/1/24 .................................. 500,000 475,235
Puerto Rico Electric Power Authority Revenue
Series U 6.00% 7/1/14 ......................... 1,450,000 1,595,116
-----------
2,070,351
-----------
SPECIAL UTILITY REVENUE BONDS - 0.74%
Puerto Rico Telephone Authority Revenue
5.75% 1/1/11 .................................. 285,000 300,193
-----------
300,193
-----------
OTHER REVENUE BONDS - 21.62%
Puerto Rico Municipal Finance Authority (FSA)
6.00% 7/1/14 .................................. 1,800,000 1,979,280
Southeast Wisconsin Professional Baseball Park
District Lease Certificates Zero Coupon
(MBIA) 12/15/15 ............................... 1,000,000 432,990
Southeast Wisconsin Professional Baseball Park
District Sales Revenue Zero Coupon (MBIA)
12/15/16 ...................................... 1,115,000 455,332
Southeast Wisconsin Professional Baseball Park
District Sales Tax Revenue Zero Coupon
(MBIA) 12/15/24 ............................... 1,500,000 394,275
Southeast Wisconsin Professional Baseball Park
District Sales Tax Revenue Zero Coupon
(MBIA) 12/15/25 ............................... 1,250,000 311,163
Southeast Wisconsin Professional Baseball Park
District Sales Tax Revenue Zero Coupon
(MBIA) 12/15/28 ............................... 6,250,000 1,327,563
Virgin Islands Public Finance Authority Revenue
Sub Lien Funded Loan Notes Series E
5.875% 10/1/18 ................................ 750,000 777,068
Wisconsin Central District Tax Revenue
5.25% 12/15/23 ................................ 3,000,000 3,105,660
-----------
8,783,331
-----------
Total Municipal Bonds (cost $38,231,846) ........ 40,421,515
-----------
<PAGE>
- --------------------------------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.50%
(cost $38,231,846) ............................................ $40,421,515
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 0.50% ........................................... 201,558
-----------
NET ASSETS APPLICABLE TO 4,046,819 SHARES ($0.01 PAR VALUE)
OUTSTANDING - 100.00% ......................................... $40,623,073
===========
NET ASSET VALUE - TAX-FREE WISCONSIN FUND A CLASS
($36,084,237 / 3,594,834 SHARES) .............................. $10.04
======
NET ASSET VALUE - TAX-FREE WISCONSIN FUND B CLASS
($3,007,357 / 299,850 SHARES) ................................. $10.03
======
NET ASSET VALUE - TAX-FREE WISCONSIN FUND C CLASS
($1,531,479 / 152,135 SHARES) ................................. $10.07
======
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
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........................................................ $38,947,232
Undistributed net investment income .............................. 2,148
Accumulated net realized loss on investments ..................... (515,976)
Net unrealized appreciation of investments ....................... 2,189,669
-----------
Total net assets ................................................. $40,623,073
===========
- ----------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
- ----------
Summary of Abbreviations:
FHA - Insured by the Federal Housing Authority
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
TAX-FREE WISCONSIN FUND A CLASS
Net asset value A Class (A) ...................................... $10.04
Sales charge (3.75% of offering price or 3.88% of amount invested
per share) (B) ................................................ 0.39
------
Offering price ................................................... $10.43
======
- ----------
(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>
32 for tax-exempt income
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR VOYAGEUR VOYAGEUR
MUTUAL INVESTMENT TAX-FREE
FUNDS, INC. TRUST FUNDS, INC.
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
IDAHO IOWA KANSAS MISSOURI NORTH DAKOTA
FUND FUND FUND FUND FUND
---------------------- -------------------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ......................................... $1,387,074 $1,180,497 $507,981 $1,567,369 $883,449
---------- ---------- -------- ---------- --------
EXPENSES:
Management fees .................................. 127,945 111,723 44,787 141,363 78,061
Distribution expense ............................. 101,281 76,290 37,083 113,120 44,603
Dividend disbursing and transfer
agent fees and expenses ....................... 21,197 27,566 8,302 24,836 16,631
Accounting and administration .................... 14,321 10,125 2,063 10,440 8,888
Reports and statements
to shareholders ............................... 11,200 6,600 1,281 12,820 3,367
Professional fees ................................ 12,671 1,800 1,041 13,470 4,550
Registration fees ................................ 2,500 6,150 500 2,500 2,900
Custodian fees ................................... 2,593 3,100 750 900 1,902
Taxes (other than taxes on income) ............... 3,610 1,755 -- 1,500 3,200
Directors' fees .................................. 669 590 306 675 1,572
Other ............................................ 2,705 6,124 488 12,060 --
---------- ---------- -------- ---------- --------
300,692 251,823 96,601 333,684 165,674
Less expenses absorbed by
Delaware Management Company ................... (9,812) (7,959) -- (25,762) (6,820)
---------- ---------- -------- ---------- --------
Total operating expenses ......................... 290,880 243,864 96,601 307,922 158,854
Interest expense ................................. -- -- -- 3,228 --
---------- ---------- -------- ---------- --------
Total expense .................................... 290,880 243,864 96,601 311,150 158,854
---------- ---------- -------- ---------- --------
NET INVESTMENT INCOME ............................ 1,096,194 936,633 411,380 1,256,219 724,595
---------- ---------- -------- ---------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investment
transactions .................................. 4,039 4,328 29,645 187,570 136,539
Net change in unrealized depreciation
of investments ................................ (128,651) (184,992) (1,015) (200,108) (236,821)
---------- ---------- -------- ---------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS ......................... (124,612) (180,664) 28,630 (12,538) (100,282)
---------- ---------- -------- ---------- --------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............................... $971,582 $755,969 $440,010 $1,243,681 $624,313
========== ========== ======== ========== ========
</TABLE>
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<TABLE>
<CAPTION>
VOYAGEUR VOYAGEUR
INVESTMENT MUTUAL
TRUST FUNDS, INC.
TAX-FREE TAX-FREE TAX-FREE
OREGON WASHINGTON WISCONSIN
INSURED FUND INSURED FUND FUND
-------------------------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest ......................................... $890,971 $110,443 $1,074,714
-------- -------- ----------
EXPENSES:
Management fees .................................. 87,818 10,367 98,385
Distribution expense ............................. 71,608 11,637 64,603
Dividend disbursing and transfer
agent fees and expenses ....................... 16,633 3,838 17,186
Accounting and administration .................... 9,682 1,155 8,346
Reports and statements
to shareholders ............................... 6,567 852 4,000
Professional fees ................................ 7,312 3,500 7,895
Registration fees ................................ 2,258 750 4,500
Custodian fees ................................... 1,388 740 500
Taxes (other than taxes on income) ............... 1,350 294 2,600
Directors' fees .................................. 575 337 590
Other ............................................ 3,078 492 8,693
-------- -------- ----------
208,269 33,962 217,298
Less expenses absorbed by
Delaware Management Company ................... (46,992) (17,172) (5,108)
-------- -------- ----------
Total operating expenses ......................... 161,277 16,790 212,190
Interest expense ................................. -- -- --
-------- -------- ----------
Total expense .................................... 161,277 16,790 212,190
-------- -------- ----------
NET INVESTMENT INCOME ............................ 729,694 93,653 862,524
-------- -------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on investment
transactions .................................. 19,478 -- (21,915)
Net change in unrealized depreciation
of investments ................................ (50,123) (15,887) (155,405)
-------- -------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS ......................... (30,645) (15,887) (177,320)
-------- -------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............................... $699,049 $77,766 $685,204
======== ======== ==========
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 33
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IDAHO FUND
---------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ............................. $1,096,194 $1,374,105 $1,840,447
Net realized gain (loss) on investment
transactions ................................... 4,039 (48,367) 52,973
Net change in unrealized appreciation/
depreciation of investments .................... (128,651) 530,971 1,890,831
----------- ----------- -----------
Net increase in net assets resulting
from operations ................................ 971,582 1,856,709 3,784,251
----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ........................................ (907,015) (1,150,721) (1,561,674)
B Class ........................................ (150,961) (189,350) (273,521)
C Class ........................................ (34,831) (37,421) (40,080)
Net realized gain on investment
transactions:
A Class ........................................ -- (17,132) --
B Class ........................................ -- (3,270) --
C Class ........................................ -- (743) --
----------- ----------- -----------
(1,092,807) (1,398,637) (1,875,275)
----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................ 5,840,144 8,852,050 8,087,405
B Class ........................................ 1,841,105 1,019,252 2,019,434
C Class ........................................ 560,293 707,681 702,551
Net asset value of shares issued
upon reinvestment of dividends from
net investment income and net realized
gain on investment transactions:
A Class ........................................ 624,034 770,231 967,219
B Class ........................................ 97,883 120,095 155,808
C Class ........................................ 28,657 30,628 34,029
----------- ----------- -----------
8,992,116 11,499,937 11,966,446
----------- ----------- -----------
Cost of shares repurchased:
A Class ........................................ (2,028,506) (3,937,453) (4,493,235)
B Class ........................................ (479,526) (564,955) (611,419)
C Class ........................................ (116,318) (160,744) (480,962)
----------- ----------- -----------
(2,624,350) (4,663,152) (5,585,616)
----------- ----------- -----------
INCREASE (DECREASE) IN
NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS ..................... 6,367,766 6,836,785 6,380,830
----------- ----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS .................................. 6,246,541 7,294,857 8,289,806
----------- ----------- -----------
NET ASSETS:
Beginning of period ............................... 49,035,875 41,741,018 33,451,212
----------- ----------- -----------
End of period ..................................... $55,282,416 $49,035,875 $41,741,018
=========== =========== ===========
</TABLE>
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IOWA FUND
----------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ............................. $936,633 $1,235,896 $1,895,350
Net realized gain (loss) on investment
transactions ................................... 4,328 88,606 (58,844)
Net change in unrealized appreciation/
depreciation of investments .................... (184,992) 339,009 1,936,561
----------- ----------- -----------
Net increase in net assets resulting
from operations ................................ 755,969 1,663,511 3,773,067
----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ........................................ (840,168) (1,131,168) (1,786,140)
B Class ........................................ (75,856) (80,006) (84,786)
C Class ........................................ (20,611) (24,722) (27,910)
Net realized gain on investment
transactions:
A Class ........................................ -- -- --
B Class ........................................ -- -- --
C Class ........................................ -- -- --
----------- ----------- -----------
(936,635) (1,235,896) (1,898,836)
----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................ 1,877,977 2,443,972 3,470,467
B Class ........................................ 774,762 1,090,688 1,320,305
C Class ........................................ 316,050 492,175 247,082
Net asset value of shares issued
upon reinvestment of dividends from
net investment income and net realized
gain on investment transactions:
A Class ........................................ 533,701 710,428 1,211,605
B Class ........................................ 51,558 57,358 64,063
C Class ........................................ 13,755 14,242 10,869
----------- ----------- -----------
3,567,803 4,808,863 6,324,391
----------- ----------- -----------
Cost of shares repurchased:
A Class ........................................ (1,986,748) (2,530,245) (8,103,037)
B Class ........................................ (153,475) (184,748) (232,768)
C Class ........................................ (238,283) (166,201) (90,968)
----------- ----------- -----------
(2,378,506) (2,881,194) (8,426,773)
----------- ----------- -----------
INCREASE (DECREASE) IN
NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS ..................... 1,189,297 1,927,669 (2,102,382)
----------- ----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS .................................. 1,008,631 2,355,284 (228,151)
----------- ----------- -----------
NET ASSETS:
Beginning of period ............................... 44,479,722 42,124,438 42,352,589
----------- ----------- -----------
End of period ..................................... $45,488,353 $44,479,722 $42,124,438
=========== =========== ===========
</TABLE>
[RESTUBBED FROM PREVIOUS TABLE]
<PAGE>
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE KANSAS FUND
----------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ............................. $411,380 $466,674 $627,158
Net realized gain (loss) on investment
transactions ................................... 29,645 119,598 127,741
Net change in unrealized appreciation/
depreciation of investments .................... (1,015) 42,397 513,267
----------- ----------- -----------
Net increase in net assets resulting
from operations ................................ 440,010 628,669 1,268,166
----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ........................................ (306,717) (364,485) (506,768)
B Class ........................................ (81,591) (99,218) (123,076)
C Class ........................................ (2,433) (2,853) (4,201)
Net realized gain on investment
transactions:
A Class ........................................ (38,684) -- --
B Class ........................................ (12,054) -- --
C Class ........................................ (373) -- --
----------- ----------- -----------
(441,852) (466,556) (634,045)
----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................ 1,469,184 2,693,842 1,225,439
B Class ........................................ 897,066 420,715 948,070
C Class ........................................ 2,075 40,545 74,506
Net asset value of shares issued
upon reinvestment of dividends from
net investment income and net realized
gain on investment transactions:
A Class ........................................ 170,431 187,468 297,771
B Class ........................................ 65,392 66,415 83,728
C Class ........................................ 2,806 2,795 4,294
----------- ----------- -----------
2,606,954 3,411,780 2,633,808
----------- ----------- -----------
Cost of shares repurchased:
A Class ........................................ (1,393,415) (1,121,317) (1,511,541)
B Class ........................................ (122,137) (280,393) (135,792)
C Class ........................................ (14,327) (26,367) (66,004)
----------- ----------- -----------
(1,529,879) (1,428,077) (1,713,337)
----------- ----------- -----------
INCREASE (DECREASE) IN
NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS ..................... 1,077,075 1,983,703 920,471
----------- ----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS .................................. 1,075,233 2,145,816 1,554,592
----------- ----------- -----------
NET ASSETS:
Beginning of period ............................... 16,368,658 14,222,842 12,668,250
----------- ----------- -----------
End of period ..................................... $17,443,891 $16,368,658 $14,222,842
=========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
34 for tax-exempt income
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE MISSOURI INSURED FUND
------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ............................. $1,256,219 $1,765,610 $2,788,692
Net realized gain (loss) on investment
transactions ................................... 187,570 155,408 176,623
Net change in unrealized appreciation/
depreciation of investments .................... (200,108) 179,094 2,344,920
----------- ----------- -----------
Net increase in net assets resulting
from operations ................................ 1,243,681 2,100,112 5,310,235
----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ........................................ (1,036,788) (1,467,138) (2,362,959)
B Class ........................................ (213,734) (294,147) (458,482)
C Class ........................................ (2,724) (4,325) (7,784)
Net realized gain on investment transactions:
A Class ........................................ -- -- --
B Class ........................................ -- -- --
C Class ........................................ -- -- --
----------- ----------- -----------
(1,253,246) (1,765,610) (2,829,225)
----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................ 592,767 1,374,617 2,768,917
B Class ........................................ 213,002 399,452 2,097,849
C Class ........................................ 132,422 30,000 100,000
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and net realized
gain on investment transactions:
A Class ........................................ 546,021 758,855 1,353,277
B Class ........................................ 129,078 183,416 349,671
C Class ........................................ 1,351 2,854 5,484
----------- ----------- -----------
1,614,641 2,749,194 6,675,198
----------- ----------- -----------
Cost of shares repurchased:
A Class ........................................ (3,144,990) (4,032,289) (6,861,721)
B Class ........................................ (495,476) (834,476) (1,840,881)
C Class ........................................ (15,000) (146,282) (42,129)
----------- ----------- -----------
(3,655,466) (5,013,047) (8,744,731)
----------- ----------- -----------
INCREASE (DECREASE) IN
NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS ..................... (2,040,825) 2,263,853 (2,069,533)
----------- ----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS .................................. (2,050,390) (1,929,351) 411,477
----------- ----------- -----------
NET ASSETS:
Beginning of period ............................... 58,367,598 60,296,949 59,885,472
----------- ----------- -----------
End of period ..................................... $56,317,208 $58,367,598 $60,296,949
=========== =========== ===========
</TABLE>
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC.
TAX-FREE NORTH DAKOTA FUND
-----------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ............................. $724,595 $1,015,407 $1,601,793
Net realized gain (loss) on investment
transactions ................................... 136,539 151,151 416,818
Net change in unrealized appreciation/
depreciation of investments .................... (236,821) 154,096 880,044
----------- ----------- -----------
Net increase in net assets resulting
from operations ................................ 624,313 1,320,654 2,898,655
----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ........................................ (703,860) (989,212) (1,597,868)
B Class ........................................ (20,509) (25,072) (37,856)
C Class ........................................ (600) (1,123) (1,691)
Net realized gain on investment transactions:
A Class ........................................ (110,320) -- --
B Class ........................................ (3,891) -- --
C Class ........................................ (110) -- --
----------- ----------- -----------
(839,290) (1,015,407) (1,637,415)
----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................ 781,536 965,629 751,084
B Class ........................................ 106,246 80,892 192,597
C Class ........................................ 4,000 -- --
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and net realized
gain on investment transactions:
A Class ........................................ 508,438 599,011 1,047,157
B Class ........................................ 13,756 13,030 22,504
C Class ........................................ 710 1,125 1,714
----------- ----------- -----------
1,414,686 1,659,687 2,015,056
----------- ----------- -----------
Cost of shares repurchased:
A Class ........................................ (1,706,924) (2,329,708) (5,770,655)
B Class ........................................ (54,858) (11,781) (61,932)
C Class ........................................ -- (12,711) (3,000)
----------- ----------- -----------
(1,761,782) (2,354,200) (5,835,587)
----------- ----------- -----------
INCREASE (DECREASE) IN
NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS ..................... (347,096) (694,513) (3,820,531)
----------- ----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS .................................. (562,073) (389,266) (2,559,291)
----------- ----------- -----------
NET ASSETS:
Beginning of period ............................... 31,505,567 31,894,833 34,454,124
----------- ----------- -----------
End of period ..................................... $30,943,494 $31,505,567 $31,894,833
=========== =========== ===========
</TABLE>
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE OREGON INSURED FUND
-----------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ............................. $729,694 $895,746 $1,271,100
Net realized gain (loss) on investment
transactions ................................... 19,478 (11,500) 17,126
Net change in unrealized appreciation/
depreciation of investments .................... (50,123) 368,882 1,188,556
----------- ----------- -----------
Net increase in net assets resulting
from operations ................................ 699,049 1,253,128 2,476,782
----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ........................................ (588,350) (714,960) (1,033,966)
B Class ........................................ (119,659) (162,152) (224,133)
C Class ........................................ (22,980) (18,634) (17,078)
Net realized gain on investment transactions:
A Class ........................................ -- -- --
B Class ........................................ -- -- --
C Class ........................................ -- -- --
----------- ----------- -----------
(730,989) (895,746) (1,275,177)
----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................ 4,543,229 4,019,856 3,728,179
B Class ........................................ 1,460,914 561,598 1,626,102
C Class ........................................ 475,488 507,769 164,876
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and net realized
gain on investment transactions:
A Class ........................................ 368,695 433,739 616,492
B Class ........................................ 66,797 101,024 152,794
C Class ........................................ 16,484 13,324 11,587
----------- ----------- -----------
6,931,607 5,637,310 6,300,030
----------- ----------- -----------
Cost of shares repurchased:
A Class ........................................ (585,356) (2,465,216) (4,116,579)
B Class ........................................ (198,956) (1,179,572) (326,601)
C Class ........................................ (858) (68,006) (25,157)
----------- ----------- -----------
(785,170) (3,712,794) (4,468,337)
----------- ----------- -----------
INCREASE (DECREASE) IN
NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS ..................... 6,146,437 1,924,516 1,831,693
----------- ----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS .................................. 6,114,497 2,281,898 3,033,298
----------- ----------- -----------
NET ASSETS:
Beginning of period ............................... 31,346,335 29,064,437 26,031,139
----------- ----------- -----------
End of period ..................................... $37,460,832 $31,346,335 $29,064,437
=========== =========== ========---
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 35
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE WASHINGTON INSURED FUND TAX-FREE WISCONSIN FUND
------------------------------------ --------------------------------------
SIX MONTHS EIGHT MONTHS YEAR SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97 2/28/99 8/31/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ............................. $93,653 $112,796 $156,411 $862,524 $1,099,088 $1,402,926
Net realized gain (loss) on
investment transactions ........................ -- -- 38 (21,915) (55,924) 190,944
Net change in unrealized appreciation/
depreciation of investments .................... (15,887) 45,476 141,117 (155,405) 352,874 1,023,956
---------- ---------- ---------- ----------- ----------- -----------
Net increase in net assets resulting
from operations ................................ 77,766 158,272 297,566 685,204 1,396,038 2,617,826
---------- ---------- ---------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ........................................ (57,712) (76,929) (125,449) (784,317) (1,011,692) (1,354,012)
B Class ........................................ (30,460) (31,959) (30,887) (50,614) (58,302) (65,438)
C Class ........................................ (5,479) (3,908) (1,855) (25,445) (29,094) (26,356)
---------- ---------- ---------- ----------- ----------- -----------
(93,651) (112,796) (158,191) (860,376) (1,099,088) (1,445,806)
---------- ---------- ---------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................ 245,960 109,476 404,281 2,822,299 5,662,446 7,121,843
B Class ........................................ 265,071 336,594 522,233 697,985 955,955 505,833
C Class ........................................ 5,944 230,500 46,196 281,784 657,033 347,276
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and net realized
gain on investment transactions:
A Class ........................................ 27,745 35,377 63,054 435,688 515,403 758,408
B Class ........................................ 17,779 18,593 19,999 32,175 33,882 42,097
C Class ........................................ 4,639 2,988 913 23,312 25,500 24,405
---------- ---------- ---------- ----------- ----------- -----------
567,138 733,528 1,056,676 4,293,243 7,850,219 8,799,862
---------- ---------- ---------- ----------- ----------- -----------
Cost of shares repurchased:
A Class ........................................ (71,497) (219,070) (577,974) (1,506,133) (2,836,280) (6,376,585)
B Class ........................................ (48,942) (29,422) (131,521) (332,308) (318,684) (20,571)
C Class ........................................ (30,265) (21,200) -- (49,444) (98,592) (262,082)
---------- ---------- ---------- ----------- ----------- -----------
(150,704) (269,692) (709,495) (1,887,885) (3,253,556) (6,659,238)
---------- ---------- ---------- ----------- ----------- -----------
INCREASE IN NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS ..................... 416,434 463,836 347,181 2,405,358 4,596,663 2,140,624
---------- ---------- ---------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS ........................ 400,549 509,312 486,556 2,230,186 4,893,613 3,312,644
---------- ---------- ---------- ----------- ----------- -----------
NET ASSETS:
Beginning of period ............................... 3,913,284 3,403,972 2,917,416 38,392,887 33,499,274 30,186,630
---------- ---------- ---------- ----------- ----------- -----------
End of period ..................................... $4,313,833 $3,913,284 $3,403,972 $40,623,073 $38,392,887 $33,499,274
========== ========== ========== =========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
36 for tax-exempt income
FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IDAHO FUND - CLASS A
--------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 1/4/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.560 $11.450 $10.910 $11.020 $10.000
Income from investment operations:
Net investment income .............................. 0.257 0.356 0.551 0.580 0.600
Net realized and unrealized gain (loss)
on investments ................................... (0.021) 0.115 0.552 (0.120) 1.100
------- ------- ------- ------- -------
Total from investment operations ................... 0.236 0.471 1.103 0.460 1.700
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.256) (0.356) (0.563) (0.570) (0.600)
Distributions from net realized gain on
investment transactions .......................... -- (0.005) -- -- (0.080)
------- ------- ------- ------- -------
Total dividends and distributions .................. (0.256) (0.361) (0.563) (0.570) (0.680)
------- ------- ------- ------- -------
Net asset value, end of period ........................ $11.540 $11.560 $11.450 $10.910 $11.020
======= ======= ======= ======= =======
Total return(4)........................................ 2.06% 4.19% 10.41% 4.36% 17.48%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $44,183 $39,843 $33,788 $27,684 $13,540
Ratio of expenses to average net assets ............ 1.00% 0.95% 0.87% 0.60% 0.26%(5)
Ratio of expenses to average net assets
prior to expense limitation ...................... 1.04% 1.02% 1.02% 1.10% 1.25%(5)
Ratio of net investment income to average net assets 4.47% 4.65% 4.98% 5.29% 5.24%(5)
Ratio of net investment income to average net assets
prior to expense limitation ...................... 4.43% 4.58% 4.83% 4.79% 4.25%(5)
Portfolio turnover ................................. 8% 8% 19% 35% 42%
</TABLE>
<PAGE>
37 for tax-exempt income
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IDAHO FUND - CLASS B
--------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 3/16/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.550 $11.440 $10.890 $11.010 $10.500
Income from investment operations:
Net investment income .............................. 0.214 0.298 0.487 0.520 0.420
Net realized and unrealized gain (loss)
on investments ................................... (0.031) 0.117 0.560 (0.130) 0.590
------- ------- ------- ------- -------
Total from investment operations ................... 0.183 0.415 1.047 0.390 1.010
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.213) (0.300) (0.497) (0.510) (0.420)
Distributions from net realized gain on
investment transactions .......................... -- (0.005) -- -- (0.080)
------- ------- ------- ------- -------
Total dividends and distributions .................. (0.213) (0.305) (0.497) (0.510) (0.500)
------- ------- ------- ------- -------
Net asset value, end of period ........................ $11.520 $11.550 $11.440 $10.890 $11.010
======= ======= ======= ======= =======
Total return(4)........................................ 1.60% 3.68% 9.87% 3.75% 9.86%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $8,912 $7,474 $6,827 $4,945 $1,977
Ratio of expenses to average net assets ............ 1.75% 1.70% 1.46% 1.11% 0.79%(5)
Ratio of expenses to average net assets
prior to expense limitation ...................... 1.79% 1.77% 1.61% 1.85% 1.90%(5)
Ratio of net investment income to average net assets 3.72% 3.90% 4.39% 4.78% 4.68%(5)
Ratio of net investment income to average net assets
prior to expense limitation ...................... 3.68% 3.83% 4.24% 4.04% 3.57%(5)
Portfolio turnover ................................. 8% 8% 19% 35% 42%
</TABLE>
- --------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
37 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IDAHO FUND - CLASS C
------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 1/11/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.550 $11.430 $10.900 $11.020 $10.040
Income from investment operations:
Net investment income .............................. 0.215 0.302 0.459 0.500 0.500
Net realized and unrealized gain (loss)
on investments .................................... (0.032) 0.123 0.549 (0.130) 1.060
------- ------- ------- ------- -------
Total from investment operations ................... 0.183 0.425 1.008 0.370 1.560
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.213) (0.300) (0.478) (0.490) (0.500)
Distributions from net realized gain on
investment transactions ........................... -- (0.005) -- -- (0.080)
------- ------- ------- ------- -------
Total dividends and distributions .................. (0.213) (0.305) (0.478) (0.490) (0.580)
------- ------- ------- ------- -------
Net asset value, end of period ........................ $11.520 $11.550 $11.430 $10.900 $11.020
======= ======= ======= ======= =======
Total return4 ......................................... 1.60% 3.77% 9.49% 3.48% 15.81%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $2,187 $1,719 $1,125 $822 $789
Ratio of expenses to average net assets ............ 1.75% 1.70% 1.62% 1.33% 1.05%(5)
Ratio of expenses to average net assets
prior to expense limitation ....................... 1.79% 1.77% 1.77% 1.82% 2.00%(5)
Ratio of net investment income to average
net assets ........................................ 3.72% 3.90% 4.23% 4.57% 4.48%(5)
Ratio of net investment income to average
net assets prior to expense limitation ............ 3.68% 3.83% 4.08% 4.08% 3.53%(5)
Portfolio turnover ................................. 8% 8% 19% 35% 42%
</TABLE>
- --------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
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>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IOWA FUND - CLASS A
------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS
ENDED ENDED YEAR ENDED
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $10.160 $10.060 $9.620 $9.830 $8.560
Income from investment operations:
Net investment income ................................. 0.219 0.294 0.449 0.440 0.450
Net realized and unrealized gain (loss)
on investments ....................................... (0.040) 0.100 0.440 (0.210) 1.290
------- ------- ------- ------- -------
Total from investment operations ...................... 0.179 0.394 0.889 0.230 1.740
------- ------- ------- ------- -------
Less dividends:
Dividends from net investment income .................. (0.219) (0.294) (0.449) (0.440) (0.470)
------- ------- ------- ------- -------
Total dividends ....................................... (0.219) (0.294) (0.449) (0.440) (0.470)
------- ------- ------- ------- -------
Net asset value, end of period ........................... $10.120 $10.160 $10.060 $9.620 $9.830
======= ======= ======= ======= =======
Total return(3)........................................... 1.74% 3.98% 9.49% 2.56% 20.80%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $39,613 $39,345 $38,343 $40,037 $42,374
Ratio of expenses to average net assets ............... 1.00% 0.96% 0.91% 0.92% 0.72%
Ratio of expenses to average net assets prior to
expense limitation ................................... 1.04% 1.06% 0.97% 1.06% 1.06%
Ratio of net investment income to average
net assets ........................................... 4.28% 4.38% 4.62% 4.68% 4.88%
Ratio of net investment income to average
net assets prior to expense limitation ............... 4.24% 4.28% 4.56% 4.54% 4.54%
Portfolio turnover .................................... 4% 13% 14% 14% 21%
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IOWA FUND - CLASS A
------------------------------
FOUR MONTHS YEAR
ENDED ENDED
12/31/94 8/31/94
<S> <C> <C>
Net asset value, beginning of period ..................... $9.260 $10.000
Income from investment operations:
Net investment income ................................. 0.170 0.490
Net realized and unrealized gain (loss)
on investments ....................................... (0.720) (0.740)
------- -------
Total from investment operations ...................... (0.550) (0.250)
------- -------
Less dividends:
Dividends from net investment income .................. (0.150) (0.490)
------- -------
Total dividends ....................................... (0.150) (0.490)
------- -------
Net asset value, end of period ........................... $8.560 $9.260
======= =======
Total return(3) .......................................... (5.86%) (2.67%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $32,373 $38,669
Ratio of expenses to average net assets ............... 0.11%(4) 0.12%
Ratio of expenses to average net assets prior to
expense limitation ................................... 1.25%(4) 1.25%
Ratio of net investment income to average
net assets ........................................... 5.71%(4) 4.89%
Ratio of net investment income to average
net assets prior to expense limitation ............... 4.57%(4) 3.76%
Portfolio turnover .................................... 7% 119%
</TABLE>
- --------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(4) Annualized.
See accompanying notes
<PAGE>
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>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IOWA FUND - CLASS B
-------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 3/24/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $10.160 $10.060 $9.610 $9.830 $9.180
Income from investment operations:
Net investment income ................................... 0.181 0.243 0.366 0.380 0.310
Net realized and unrealized gain (loss)
on investments ......................................... (0.040) 0.100 0.457 (0.220) 0.640
------- ------- ------ ------ ------
Total from investment operations ........................ 0.141 0.343 0.823 0.160 0.950
------- ------- ------ ------ ------
Less dividends:
Dividends from net investment income .................... (0.181) (0.243) (0.373) (0.380) (0.300)
------- ------- ------ ------ ------
Total dividends ......................................... (0.181) (0.243) (0.373) (0.380) (0.300)
------- ------- ------ ------ ------
Net asset value, end of period ............................. $10.120 $10.160 $10.060 $9.610 $9.830
======= ======= ======= ====== ======
Total return(4) ............................................ 1.37% 3.46% 8.75% 1.76% 10.62%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $4,564 $3,910 $2,910 $1,645 $819
Ratio of expenses to average net assets ................. 1.75% 1.71% 1.67% 1.61% 1.28%(5)
Ratio of expenses to average net assets prior
to expense limitation .................................. 1.79% 1.81% 1.73% 1.81% 1.65%(5)
Ratio of net investment income to average net assets .... 3.53% 3.63% 3.86% 3.97% 4.06%(5)
Ratio of net investment income to average net assets
prior to expense limitation ............................ 3.49% 3.53% 3.80% 3.77% 3.69%(5)
Portfolio turnover ...................................... 4% 13% 14% 14% 21%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IOWA FUND - CLASS C
-------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 1/4/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $10.160 $10.060 $9.610 $9.830 $8.550
Income from investment operations:
Net investment income ................................... 0.181 0.243 0.360 0.360 0.370
Net realized and unrealized gain (loss)
on investments ......................................... (0.040) 0.100 0.456 (0.220) 1.280
------- ------- ------ ------ ------
Total from investment operations ........................ 0.141 0.343 0.816 0.140 1.650
------- ------- ------ ------ ------
Less dividends:
Dividends from net investment income .................... (0.181) (0.243) (0.366) (0.360) (0.370)
------- ------- ------ ------ ------
Total dividends ......................................... (0.181) (0.243) (0.366) (0.360) (0.370)
------- ------- ------ ------ ------
Net asset value, end of period ............................. $10.120 $10.160 $10.060 $9.610 $9.830
======= ======= ======= ====== ======
Total return(4) ............................................ 1.37% 3.46% 8.68% 1.56% 19.66%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $1,311 $1,225 $871 $670 $462
Ratio of expenses to average net assets ................. 1.75% 1.71% 1.74% 1.75% 1.61%(5)
Ratio of expenses to average net assets prior
to expense limitation .................................. 1.79% 1.81% 1.80% 1.81% 1.72%(5)
Ratio of net investment income to average net assets .... 3.53% 3.63% 3.79% 3.82% 3.74%(5)
Ratio of net investment income to average net assets
prior to expense limitation ............................ 3.49% 3.53% 3.73% 3.76% 3.63%(5)
Portfolio turnover ...................................... 4% 13% 14% 14% 21%
</TABLE>
- --------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
40 for tax-exempt income
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were as follows:
VOYAGEUR INVESTMENT TRUST
TAX-FREE KANSAS FUND - CLASS A
------------------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS TWO MONTHS YEAR PERIOD
ENDED ENDED YEAR ENDED ENDED ENDED 11/30/92(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 12/31/94 10/31/94 to 10/31/93
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $11.160 $11.060 $10.560 $10.730 $9.500 $9.630 $10.850 $10.000
Income from investment operations:
Net investment income .................. 0.277 0.351 0.526 0.520 0.560 0.090 0.570 0.560
Net realized and unrealized gain (loss)
on investments ........................ 0.030 0.100 0.506 (0.170) 1.220 (0.130) (1.210) 0.850
------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations ....... 0.307 0.451 1.032 0.350 1.780 (0.040) (0.640) 1.410
------- ------- ------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment
income ................................ (0.264) (0.351) (0.532) (0.520) (0.550) (0.090) (0.570) (0.560)
Distributions from net realized gain
on investment transactions ............ (0.033) - - - - - (0.010) -
------- ------- ------- ------- ------- ------- ------- -------
Total dividends and distributions ...... (0.297) (0.351) (0.532) (0.520) (0.550) (0.090) (0.580) (0.560)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period ............ $11.170 $11.160 $11.060 $10.560 $10.730 $9.500 $9.630 $10.850
======= ======= ======= ======= ======= ======= ======= =======
Total return(4) ........................... 2.78% 4.14% 10.06% 3.43% 19.13% (0.38%) (6.10%) 14.49%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................... $12,794 $12,548 $10,663 $10,176 $10,677 $7,355 $6,469 $2,057
Ratio of expenses to average
net assets ............................ 0.95% 0.89% 0.84% 0.83% 0.37% 0.01%(5) 0.06% -
Ratio of expenses to average
net assets prior to
expense limitation .................... 0.95% 0.99% 1.03% 1.21% 1.11% 1.25%(5) 1.25% 1.25%(5)
Ratio of net investment income to
average net assets .................... 4.99% 4.75% 4.92% 4.97% 5.32% 5.88%(5) 5.30% 5.26%(5)
Ratio of net investment income to
average net assets prior to
expense limitation .................... 4.99% 4.65% 4.73% 4.59% 4.58% 4.64%(5) 4.11% 4.01%(5)
Portfolio turnover ..................... 30% 40% 30% 56% 19% 0% 38% 28%
</TABLE>
- ------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 41
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE KANSAS FUND - CLASS B
-------------------------------------------------------------
Six Months Eight Months Period
Ended Ended Year Ended 4/8/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.180 $11.080 $10.570 $10.740 $10.190
Income from investment operations:
Net investment income .............................. 0.235 0.296 0.440 0.450 0.340
Net realized and unrealized gain (loss)
on investments .................................... 0.020 0.099 0.516 (0.170) 0.540
------- ------- ------ ------ ------
Total from investment operations ...................... 0.255 0.395 0.956 0.280 0.880
------- ------- ------ ------ ------
Less dividends and distributions:
Dividends from net investment income ............... (0.222) (0.295) (0.446) (0.450) (0.330)
Distributions from net realized gain on investment
transactions ...................................... (0.033) - - - -
------- ------- ------ ------ ------
Total dividends and distributions .................. (0.255) (0.295) (0.446) (0.450) (0.330)
------- ------- ------ ------ ------
Net asset value, end of period ........................ $11.180 $11.180 $11.080 $10.570 $10.740
======= ======= ======= ======= =======
Total return(4) ....................................... 2.31% 3.62% 9.28% 2.69% 8.76%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $4,533 $3,694 $3,452 $2,402 $677
Ratio of expenses to average net assets ............ 1.70% 1.64% 1.61% 1.61% 0.94%(5)
Ratio of expenses to average net assets prior to
expense limitation ................................ 1.70% 1.74% 1.80% 2.00% 1.68%(5)
Ratio of net investment income to average
net assets ........................................ 4.24% 4.00% 4.15% 4.16% 4.63%(5)
Ratio of net investment income to average net
assets prior to expense limitation ................ 4.24% 3.90% 3.96% 3.77% 3.89%(5)
Portfolio turnover ................................. 30% 40% 30% 56% 19%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE KANSAS FUND - CLASS C
------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 4/12/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.160 $11.050 $10.550 $10.720 $10.200
Income from investment operations:
Net investment income .............................. 0.236 0.296 0.439 0.430 0.320
Net realized and unrealized gain (loss) on
investments ....................................... 0.020 0.110 0.504 (0.170) 0.510
------- ------- ------ ------ ------
Total from investment operations ...................... 0.256 0.406 0.943 0.260 0.830
------- ------- ------ ------ ------
Less dividends and distributions:
Dividends from net investment income ............... (0.223) (0.296) (0.443) (0.430) (0.310)
Distributions from net realized gain on investment
transactions ...................................... (0.033) - - - -
------- ------- ------ ------ ------
Total dividends and distributions .................. (0.256) (0.296) (0.443) (0.430) (0.310)
------- ------- ------ ------ ------
Net asset value, end of period ........................ $11.160 $11.160 $11.050 $10.550 $10.720
======= ======= ======= ======= =======
Total return(4) ....................................... 2.31% 3.72% 9.17% 2.52% 8.29%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $117 $127 $108 $90 $40
Ratio of expenses to average net assets ............ 1.70% 1.64% 1.64% 1.77% 1.27%(5)
Ratio of expenses to average net assets prior to
expense limitation ................................ 1.70% 1.74% 1.83% 2.00% 1.79%(5)
Ratio of net investment income to average
net assets ........................................ 4.24% 4.00% 4.12% 4.02% 4.21%(5)
Ratio of net investment income to average net
assets prior to expense limitation ................ 4.24% 3.90% 3.93% 3.79% 3.69%(5)
Portfolio turnover ................................. 30% 40% 30% 56% 19%
- ---------------
</TABLE>
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
42 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE MISSOURI INSURED FUND - CLASS A
----------------------------------------------------------------------------------------
Six months Eight Months Two Months Year Period
ended Ended Year Ended Ended ended 11/2/92(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 12/31/94 10/31/94 to 10/31/93
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $10.870 $10.810 $10.370 $10.540 $9.270 $9.370 $10.820 $10.000
Income from investment operations:
Net investment income .................. 0.252 0.333 0.504 0.520 0.520 0.100 0.550 0.550
Net realized and unrealized gain (loss)
on investments ........................ - 0.060 0.446 (0.180) 1.290 (0.110) (1.430) 0.890
------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations ....... 0.252 0.393 0.950 0.340 1.810 (0.010) (0.880) 1.440
------- ------- ------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment
income ................................ (0.252) (0.333) (0.510) (0.510) (0.540) (0.090) (0.540) (0.550)
Distributions from net realized gain on
investment transactions ............... - - - - - - (0.030) (0.070)
------- ------- ------- ------- ------- ------- ------- -------
Total dividends and distributions ...... (0.252) (0.333) (0.510) (0.510) (0.540) (0.090) (0.570) (0.620)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period ............ $10.870 $10.870 $10.810 $10.370 $10.540 $9.270 $9.370 $10.820
======= ======= ======= ======= ======= ======= ======= =======
Total return(4) ........................... 2.29% 3.70% 9.43% 3.41% 19.96% (0.07%) (8.28%) 14.74%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................... $44,927 $46,939 $48,565 $49,301 $50,211 $37,790 $37,384 $30,270
Ratio of expenses to average
net assets ............................ 0.95% 0.92% 0.91% 0.71% 0.50% 0.11%(5) 0.15% -
Ratio of expenses to average net assets
prior to expense limitation ........... 1.04% 1.02% 0.93% 1.03% 1.07% 1.12%(5) 1.13% 1.25%(5)
Ratio of net investment income to
average net assets .................... 4.60% 4.64% 4.81% 5.05% 5.25% 6.00%(5) 5.39% 4.82%(5)
Ratio of net investment income to
average net assets prior to
expense limitation .................... 4.51% 4.54% 4.79% 4.73% 4.68% 4.99%(5) 4.41% 3.57%(5)
Portfolio turnover ..................... 4% 18% 12% 28% 31% 8% 32% 76%
</TABLE>
- ------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 43
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE MISSOURI INSURED FUND - CLASS B
------------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS TWO MONTHS PERIOD
ENDED ENDED YEAR ENDED ENDED 3/12/94(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95 12/31/94 TO 10/31/94
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> C>
Net asset value, beginning of period ...... $10.870 $10.810 $10.370 $10.540 $9.270 $9.370 $10.300
Income from investment operations:
Net investment income .................. 0.212 0.279 0.425 0.460 0.480 0.080 0.330
Net realized and unrealized gain (loss)
on investments ........................ (0.001) 0.060 0.451 (0.180) 1.280 (0.100) (0.940)
------- ------- ------- ------- ------- ------- -------
Total from investment operations ....... 0.211 0.339 0.876 0.280 1.760 (0.020) (0.610)
------- ------- ------- ------- ------- ------- -------
Less dividends:
Dividends from net investment income ... (0.211) (0.279) (0.436) (0.450) (0.490) (0.080) (0.320)
------- ------- ------- ------- ------- ------- -------
Total dividends ........................ (0.211) (0.279) (0.436) (0.450) (0.490) (0.080) (0.320)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period ............ $10.870 $10.870 $10.810 $10.370 $10.540 $9.270 $9.370
======= ======= ======= ======= ======= ======= =======
Total return(4) ........................... 1.91% 3.19% 8.66% 2.93% 19.18% (0.14%) (6.16%)
Ratios and supplemental data:
Net assets, end of period
(000 omitted).......................... $11,160 $11,317 $11,507 $10,432 $6,195 $2,742 $1,701
Ratio of expenses to average
net assets ............................ 1.70% 1.67% 1.61% 1.29% 0.97% 0.60%(5) 0.49%(5)
Ratio of expenses to average net
assets prior to expense limitation .... 1.79% 1.77% 1.63% 1.78% 1.81% 1.84%(5) 1.83%(5)
Ratio of net investment income to
average net assets .................... 3.85% 3.89% 4.11% 4.46% 4.70% 5.32%(5) 4.89%(5)
Ratio of net investment income to
average net assets prior to expense
limitation ............................ 3.76% 3.79% 4.09% 3.97% 3.86% 4.08%(5) 3.55%(5)
Portfolio turnover ..................... 4% 18% 12% 28% 31% 8% 32%
- --------------
</TABLE>
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
44 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE MISSOURI INSURED FUND - CLASS C
-------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 11/11/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................ $10.880 $10.810 $10.370 $10.540 $10.360
Income from investment operations:
Net investment income ............................ 0.213 0.279 0.405 0.430 0.060
Net realized and unrealized gain (loss)
on investments .................................. (0.012) 0.070 0.455 (0.180) 0.170
------- ------- ------- ------- -------
Total from investment operations .................... 0.201 0.349 0.860 0.250 0.230
------- ------- ------- ------- -------
Less dividends:
Dividends from net investment income ............. (0.211) (0.279) (0.420) (0.420) (0.050)
------- ------- ------- ------- -------
Total dividends .................................. (0.211) (0.279) (0.420) (0.420) (0.050)
------- ------- ------- ------- -------
Net asset value, end of period ...................... $10.870 $10.880 $10.810 $10.370 $10.540
======= ======= ======= ======= =======
Total return(4) ..................................... 1.82% 3.28% 8.49% 2.48% 2.24%
Ratios and supplemental data:
Net assets, end of period (000 omitted)........... $230 $112 $225 $152 $20
Ratio of expenses to average net assets .......... 1.70% 1.67% 1.74% 1.62% 1.22%(5)
Ratio of expenses to average net assets
prior to expense limitation ..................... 1.79% 1.77% 1.76% 1.78% 1.55%(5)
Ratio of net investment income to average
net assets ...................................... 3.85% 3.89% 3.98% 4.10% 4.09%(5)
Ratio of net investment income to average net
assets prior to expense limitation .............. 3.76% 3.79% 3.96% 3.94% 3.76%(5)
Portfolio turnover ............................... 4% 18% 12% 28% 31%
</TABLE>
- --------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 45
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL
FUNDS, INC.
TAX-FREE
NORTH DAKOTA FUND -
CLASS A
--------------------------
SIX MONTHS EIGHT MONTHS
ENDED ENDED
(UNAUDITED)
2/28/99(1) 8/31/98(1)
<S> <C> <C>
Net asset value, beginning of period .................... $11.440 $11.320
Income from investment operations:
Net investment income ................................ 0.266 0.364
Net realized and unrealized gain (loss)
on investments ..................................... (0.038) 0.120
------- ------
Total from investment operations ..................... 0.228 0.484
------- ------
Less dividends and distributions:
Dividends from net investment income ................. (0.266) (0.364)
Distributions from net realized gain
on investment transactions ......................... (0.042) -
Distributions in excess of net realized gains ........ - -
------- ------
Total dividends and distributions .................... (0.308) (0.364)
------- ------
Net asset value, end of period .......................... $11.360 $11.440
======= =======
Total return(3) ......................................... 2.02% 4.35%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .............. $29,871 $30,496
Ratio of expenses to average net assets .............. 1.00% 1.00%
Ratio of expenses to average net
assets prior to expense limitation ................. 1.04% 1.15%
Ratio of net investment income
to average net assets .............................. 4.70% 4.82%
Ratio of net investment income to average
net assets prior to expense limitation ............. 4.66% 4.67%
Portfolio turnover ................................... 35% 23%
</TABLE>
<PAGE>
(RESTUBBED TABLE)
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE NORTH DAKOTA FUND - CLASS A
---------------------------------------------------------------
YEAR ENDED
12/31/97(2) 12/31/96 12/31/95 12/31/94 12/31/93
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $10.880 $11.000 $9.850 $11.070 $10.590
Income from investment operations:
Net investment income ................................ 0.546 0.540 0.540 0.560 0.580
Net realized and unrealized gain (loss)
on investments ..................................... 0.451 (0.130) 1.180 (1.150) 0.580
------- ------- ------ ------- -------
Total from investment operations ..................... 0.997 0.410 1.720 (0.590) 1.160
------- ------- ------ ------- -------
Less dividends and distributions:
Dividends from net investment income ................. (0.557) (0.530) (0.570) (0.530) (0.580)
Distributions from net realized gain
on investment transactions ......................... - - - (0.080) (0.100)
Distributions in excess of net realized gains - - - (0.020) -
------- ------- ------ ------- -------
Total dividends and distributions .................... (0.557) (0.530) (0.570) (0.630) (0.680)
------- ------- ------ ------- -------
Net asset value, end of period .......................... $11.320 $10.880 $11.000 $9.850 $11.070
======= ======= ======= ======= =======
Total return(3) ......................................... 9.43% 3.89% 17.81% (5.47%) 11.20%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .............. $30,965 $33,713 $36,096 $33,829 $34,880
Ratio of expenses to average net assets .............. 1.00% 0.88% 0.81% 0.46% 0.59%
Ratio of expenses to average net
assets prior to expense limitation ................. 1.04% 1.08% 1.05% 1.14% 1.25%
Ratio of net investment income
to average net assets .............................. 4.97% 5.01% 5.07% 5.36% 5.11%
Ratio of net investment income to average
net assets prior to expense limitation ............. 4.93% 4.81% 4.83% 4.68% 4.45%
Portfolio turnover ................................... 41% 58% 45% 33% 27%
</TABLE>
- ------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
<PAGE>
46 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period were
as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Voyageur Tax-Free
FUNDS, INC.
TAX-FREE NORTH
DAKOTA FUND - CLASS B
----------------------------
SIX MONTHS EIGHT MONTHS
ENDED ENDED
2/28/99(1) 8/31/98(1)
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period ................................ $11.440 $11.320
Income from investment operations:
Net investment income ............................................ 0.223 0.308
Net realized and unrealized gain (loss) on investments ........... (0.037) 0.119
------- -------
Total from investment operations ................................. 0.186 0.427
------- -------
Less dividends and distributions:
Dividends from net investment income ............................. (0.224) (0.307)
Distributions from net realized gain on investment transactions .. (0.042) -
Distributions in excess of net realized gains .................... - -
------- -------
Total dividends and distributions ................................ (0.266) (0.307)
------- -------
Net asset value, end of period ...................................... $11.360 $11.440
======= =======
Total return(4) ..................................................... 1.64% 3.83%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......................... $1,038 $980
Ratio of expenses to average net assets .......................... 1.75% 1.75%
Ratio of expenses to average net assets prior
to expense limitation .......................................... 1.79% 1.90%
Ratio of net investment income to average net assets ............. 3.95% 4.07%
Ratio of net investment income to average net assets prior
to expense limitation .......................................... 3.91% 3.92%
Portfolio turnover ............................................... 35% 23%
</TABLE>
<PAGE>
(RESTUBBED TABLE)
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC.
TAX-FREE NORTH DAKOTA FUND - CLASS B
----------------------------------------------
PERIOD FROM
YEAR ENDED 5/10/94(3)
12/31/97(2) 12/31/96 12/31/95 to 12/31/94
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................................ $10.880 $11.000 $9.850 $10.310
Income from investment operations:
Net investment income ............................................ 0.484 0.490 0.480 0.300
Net realized and unrealized gain (loss) on investments ........... 0.451 (0.130) 1.180 (0.390)
------- ------- ------- -------
Total from investment operations ................................. 0.935 0.360 1.660 (0.090)
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............................. (0.495) (0.480) (0.510) (0.270)
Distributions from net realized gain on investment transactions .. - - - (0.080)
Distributions in excess of net realized gains .................... - - - (0.020)
------- ------- ------- -------
Total dividends and distributions ................................ (0.495) (0.480) (0.510) (0.370)
------- ------- ------- -------
Net asset value, end of period ...................................... $11.320 $10.880 $11.000 $9.850
======= ======= ======= =======
Total return(4) ..................................................... 8.82% 3.39% 17.24% (0.77%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......................... $889 $700 $375 $144
Ratio of expenses to average net assets .......................... 1.55% 1.36% 1.29% 0.99%(5)
Ratio of expenses to average net assets prior
to expense limitation .......................................... 1.59% 1.83% 1.79% 1.89%(5)
Ratio of net investment income to average net assets ............. 4.42% 4.52% 4.56% 4.97%(5)
Ratio of net investment income to average net assets prior
to expense limitation .......................................... 4.38% 4.05% 4.06% 4.07%(5)
Portfolio turnover ............................................... 41% 58% 45% 33%
</TABLE>
- ------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value And does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 47
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC.
TAX-FREE NORTH DAKOTA FUND - CLASS C
------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 7/29/95(3)
2/28/99(1) 8/31/98(1) 12/31/973 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $11.430 $11.320 $10.870 $11.000 $10.510
Income from investment operations:
Net investment income .................................. 0.221 0.307 0.441 0.440 0.170
Net realized and unrealized gain (loss) on investments . (0.035) 0.110 0.468 (0.140) 0.500
------- ------- ------- ------- -------
Total from investment operations ....................... 0.186 0.417 0.909 0.300 0.670
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................... (0.224) (0.307) (0.459) (0.430) (0.180)
Distributions from net realized gain
on investment transactions ........................... (0.042) - - - -
------- ------- ------- ------- -------
Total dividends and distributions (0.266) (0.307) (0.459) (0.430) (0.180)
------- ------- ------- ------- -------
Net asset value, end of period ............................ $11.350 $11.430 $11.320 $10.870 $11.000
======= ======= ======= ======= =======
Total return(4) ........................................... 1.64% 3.74% 8.57% 2.81% 6.47%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $34 $30 $41 $40 $20
Ratio of expenses to average net assets ................ 1.75% 1.75% 1.87% 1.75% 1.73%(5)
Ratio of expenses to average net assets
prior to expense limitation .......................... 1.79% 1.90% 1.91% 1.75% 1.73%(5)
Ratio of net investment income to average net assets ... 3.95% 4.07% 4.10% 4.06% 4.00%(5)
Ratio of net investment income to average net assets ...
prior to expense limitation 3.91% 3.92% 4.06% 4.06% 4.00%(5)
Portfolio turnover ..................................... 35% 23% 41% 58% 45%
</TABLE>
------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
48 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE OREGON INSURED FUND
- CLASS A
----------------------------
SIX MONTHS EIGHT MONTHS
ENDED ENDED
2/28/99(1) 8/31/98(1)
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period .................... $10.430 $10.310
Income from investment operations:
Net investment income ................................ 0.228 0.320
Net realized and unrealized gain
(loss) on investments .............................. - 0.120
------- -------
Total from investment operations ..................... 0.228 0.440
------- -------
Less dividends:
Dividends from net
investment income .................................. (0.228) (0.320)
------- -------
Total dividends ...................................... (0.228) (0.320)
------- -------
Net asset value, end of period .......................... $10.430 $10.430
======= =======
Total return(4) ......................................... 2.19% 4.33%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ...................................... $28,640 $24,336
Ratio of expenses to average
net assets ......................................... 0.76% 0.71%
Ratio of expenses to average
net assets prior to
expense limitation ................................. 1.03% 1.03%
Ratio of net investment income
to average net assets .............................. 4.37% 4.64%
Ratio of net investment income
to average net assets prior
to expense limitation .............................. 4.10% 4.32%
Portfolio turnover ................................... 21% 5%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE OREGON INSURED FUND - CLASS A
-------------------------------------------------------------------------
TWO MONTHS YEAR PERIOD FROM
YEAR ENDED ENDED ENDED 8/1/93(3)
12/31/97(2) 12/31/96 12/31/95 12/31/94 10/31/94 TO 10/31/9(3)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $9.870 $10.050 $8.920 $9.000 $10.240 $10.000
Income from investment operations:
Net investment income ................................ 0.481 0.480 0.490 0.090 0.500 0.130
Net realized and unrealized gain
(loss) on investments .............................. 0.444 (0.180) 1.140 (0.090) (1.240) 0.240
------- ------- ------- ------- ------- -------
Total from investment operations ..................... 0.925 0.300 1.630 0.000 (0.740) 0.370
------- ------- ------- ------- ------- -------
Less dividends:
Dividends from net
investment income .................................. (0.485) (0.480) (0.500) (0.080) (0.500) (0.130)
------- ------- ------- ------- ------- -------
Total dividends ...................................... (0.485) (0.480) (0.500) (0.080) (0.500) (0.130)
------- ------- ------- ------- ------- -------
Net asset value, end of period .......................... $10.310 $9.870 $10.050 $8.920 $9.000 $10.240
======= ======= ======= ======= ======= =======
Total return(4) ......................................... 9.66% 3.15% 18.71% 0.06% (7.35%) 3.64%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ...................................... $22,071 $20,913 $21,590 $14,650 $14,086 $4,609
Ratio of expenses to average
net assets ......................................... 0.71% 0.71% 0.54% 0.05%(5) 0.03% -
Ratio of expenses to average
net assets prior to
expense limitation ................................. 0.94% 1.07% 1.11% 1.25%(5) 1.25% 1.25%(5)
Ratio of net investment income
to average net assets .............................. 4.83% 4.92% 5.12% 5.79%(5) 5.17% 4.61%(5)
Ratio of net investment income
to average net assets prior
to expense limitation .............................. 4.60% 4.56% 4.55% 4.59%(5) 3.95% 3.36%(5)
Portfolio turnover ................................... 5% 40% 41% 5% 49% 11%
</TABLE>
- ------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 49
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period were
as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE OREGON INSURED FUND
- CLASS B
----------------------------
SIX MONTHS EIGHT MONTHS
ENDED ENDED
2/28/99(1) 8/31/98(1)
(UNAUDITED)
<S> <C> <C>
Net asset value, beginning of period ....................... $10.430 $10.310
Income from investment operations:
Net investment income ................................... 0.189 0.268
Net realized and unrealized gain
(loss) on investments ................................. - 0.120
------- -------
Total from investment operations ........................ 0.189 0.388
------- -------
Less dividends:
Dividends from net investment income .................... (0.189) (0.268)
------- -------
Total dividends ......................................... (0.189) (0.268)
------- -------
Net asset value, end of period ............................. $10.430 $10.430
======= =======
Total return(4) ............................................ 1.82% 3.82%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $7,334 $6,011
Ratio of expenses to average net assets ................. 1.51% 1.46%
Ratio of expenses to average net assets
prior to expense limitation ........................... 1.78% 1.78%
Ratio of net investment income
to average net assets ................................. 3.62% 3.89%
Ratio of net investment income to average net assets
prior to expense limitation ........................... 3.35% 3.57%
Portfolio turnover ...................................... 21% 5%
</TABLE>
<PAGE>
(RESTUBBED TABLE)
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE OREGON INSURED FUND - CLASS B
--------------------------------------------------------------
TWO MONTHS PERIOD FROM
YEAR ENDED ENDED 3/12/94(3)
12/31/97(2) 12/31/96 12/31/95 12/31/94 TO 10/31/94
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $9.870 $10.050 $8.920 $9.000 $9.850
Income from investment operations:
Net investment income ................................... 0.422 0.430 0.440 0.080 0.270
Net realized and unrealized gain
(loss) on investments ................................. 0.434 (0.180) 1.140 (0.090) (0.850)
------- ------- ------- ------- -------
Total from investment operations ........................ 0.856 0.250 1.580 (0.010) (0.580)
------- ------- ------- ------- -------
Less dividends:
Dividends from net investment income .................... (0.416) (0.430) (0.450) (0.070) (0.270)
------- ------- ------- ------- -------
Total dividends ......................................... (0.416) (0.430) (0.450) (0.070) (0.270)
------- ------- ------- ------- -------
Net asset value, end of period ............................. $10.310 $9.870 $10.050 $8.920 $9.000
======= ======= ======= ======= =======
Total return(4) ............................................ 8.90% 2.61% 18.10% 0.03% (5.95%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $6,461 $4,758 $2,786 $1,303 $1,146
Ratio of expenses to average net assets ................. 1.39% 1.25% 1.04% 0.60%(5) 0.75%(5)
Ratio of expenses to average net assets
prior to expense limitation ........................... 1.62% 1.83% 1.86% 2.00%(5) 2.00%(5)
Ratio of net investment income
to average net assets ................................. 4.15% 4.37% 4.57% 5.19%(5) 4.43%(5)
Ratio of net investment income to average net assets
prior to expense limitation ........................... 3.92% 3.79% 3.75% 3.79%(5) 3.18%(5)
Portfolio turnover ...................................... 5% 40% 41% 5% 49%
</TABLE>
- -----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
50 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE OREGON INSURED FUND - CLASS C
---------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 7/7/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $10.440 $10.320 $9.880 $10.050 $9.630
Income from investment operations:
Net investment income .................................... 0.189 0.268 0.411 0.400 0.190
Net realized and unrealized gain (loss) on investments ... - 0.120 0.431 (0.170) 0.410
------- ------- ------- ------- -------
Total from investment operations ......................... 0.189 0.388 0.842 0.230 0.600
------- ------- ------- ------- -------
Less dividends:
Dividends from net investment income ..................... (0.189) (0.268) (0.402) (0.400) (0.180)
------- ------- ------- ------- -------
Total dividends .......................................... (0.189) (0.268) (0.402) (0.400) (0.180)
------- ------- ------- ------- -------
Net asset value, end of period .............................. $10.440 $10.440 $10.320 $9.880 $10.050
======= ======= ======= ======= =======
Total return(4) ............................................. 1.81% 3.81% 8.75% 2.38% 6.35%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $1,487 $999 $532 $360 $250
Ratio of expenses to average net assets .................. 1.51% 1.46% 1.51% 1.55% 1.39%(5)
Ratio of expenses to average net assets
prior to expense limitation ............................ 1.78% 1.78% 1.74% 1.82% 1.74%(5)
Ratio of net investment income to average net assets ..... 3.62% 3.89% 4.03% 4.03% 4.00%(5)
Ratio of net investment income to average net assets
prior to expense limitation ............................ 3.35% 3.57% 3.80% 3.76% 3.65%(5)
Portfolio turnover ....................................... 21% 5% 5% 40% 41%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 51
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE WASHINGTON INSURED FUND - CLASS A
------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS
ENDED ENDED YEAR ENDED
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $10.900 $10.770 $10.300 $10.440 $9.210
Income from investment operations:
Net investment income ................................ 0.264 0.355 0.541 0.540 0.590
Net realized and unrealized gain (loss)
on investments ..................................... (0.039) 0.131 0.481 (0.140) 1.210
------- ------- ------- ------- -------
Total from investment operations ..................... 0.225 0.486 1.022 0.400 1.800
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................. (0.265) (0.356) (0.552) (0.540) (0.570)
Distributions from net realized gain on
investment transactions ............................ - - - - -
------- ------- ------- ------- -------
Total dividends and distributions .................... (0.265) (0.356) (0.552) (0.540) (0.570)
------- ------- ------- ------- -------
Net asset value, end of period .......................... $10.860 $10.900 $10.770 $10.300 $10.440
======= ======= ======= ======= =======
Total return(4) ......................................... 2.07% 4.59% 10.23% 3.98% 19.94%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ...................................... $2,519 $2,325 $2,372 $2,382 $2,099
Ratio of expenses to average
net assets ......................................... 0.50% 0.50% 0.49% 0.44% 0.28%
Ratio of expenses to average net assets
prior to expense limitation ........................ 1.33% 1.34% 1.38% 1.25% 1.25%
Ratio of net investment income to average
net assets ......................................... 4.87% 4.94% 5.20% 5.29% 5.57%
Ratio of net investment income to average
net assets prior to
expense limitation ................................. 4.04% 4.10% 4.31% 4.48% 4.60%
Portfolio turnover ................................... - 1% 20% 33% 51%
</TABLE>
<PAGE>
[RESTUBED FOR ABOVE]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
TWO MONTHS YEAR PERIOD FROM
ENDED ENDED 8/1/93(3)
12/31/94 10/31/94 TO 10/31/93
<S> <C> <C> <C>
Net asset value, beginning of period .................... $9.370 $10.670 $10.000
Income from investment operations:
Net investment income ................................ 0.090 0.550 0.150
Net realized and unrealized gain (loss)
on investments ..................................... (0.160) (1.260) 0.670
------- ------- -------
Total from investment operations ..................... (0.070) (0.710) 0.820
------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................. (0.090) (0.570) (0.150)
Distributions from net realized gain on
investment transactions ............................ - (0.020) -
------- ------- -------
Total dividends and distributions .................... (0.090) (0.590) (0.150)
------- ------- -------
Net asset value, end of period .......................... $9.210 $9.370 $10.670
======= ======= =======
Total return(4) ......................................... (0.69%) (6.85%) 8.05%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ...................................... $2,049 $2,118 $2,108
Ratio of expenses to average
net assets ......................................... 0.10%(5) 0.14% -
Ratio of expenses to average net assets
prior to expense limitation ........................ 1.25%(5) 1.25% 1.25%(5)
Ratio of net investment income to average
net assets ......................................... 6.18%(5) 5.44% 5.50%(5)
Ratio of net investment income to average
net assets prior to expense limitation ............. 5.03%(5) 4.33% 4.25%(5)
Portfolio turnover ................................... - - 45%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
52 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE WASHINGTON INSURED FUND - CLASS B
---------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 4/21/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $10.920 $10.780 $10.310 $10.440 $10.180
Income from investment operations:
Net investment income ................................... 0.224 0.301 0.471 0.470 0.090
Net realized and unrealized gain (loss) on investments .. (0.040) 0.141 0.470 (0.140) 0.250
------- ------- ------- ------- -------
Total from investment operations ........................ 0.184 0.442 0.941 0.330 0.340
------- ------- ------- ------- -------
Less dividends:
Dividends from net investment income .................... (0.224) (0.302) (0.471) (0.460) (0.080)
------- ------- ------- ------- -------
Total dividends ......................................... (0.224) (0.302) (0.471) (0.460) (0.080)
------- ------- ------- ------- -------
Net asset value, end of period ............................. $10.880 $10.920 $10.780 $10.310 $10.440
======= ======= ======= ======= =======
Total return(4)............................................. 1.69% 4.16% 9.38% 3.32% 3.30%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $1,531 $1,304 $963 $516 $15
Ratio of expenses to average net assets ................. 1.25% 1.25% 1.24% 1.21% 1.04%(5)
Ratio of expenses to average net assets prior to
expense limitation .................................... 2.08% 2.09% 2.13% 2.00% 2.00%(5)
Ratio of net investment income to average net assets .... 4.12% 4.19% 4.45% 4.47% 4.44%(5)
Ratio of net investment income to average net assets
prior to expense limitation ........................... 3.29% 3.35% 3.56% 3.68% 3.48%(5)
Portfolio turnover ...................................... - 1% 20% 33% 51%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE WASHINGTON INSURED FUND - CLASS C
---------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 10/24/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $10.910 $10.770 $10.300 $10.430 $9.940
Income from investment operations:
Net investment income ................................... 0.224 0.302 0.465 0.450 0.310
Net realized and unrealized gain (loss) on investments .. (0.040) 0.140 0.469 (0.140) 0.480
------- ------- ------- ------- -------
Total from investment operations ........................ 0.184 0.442 0.934 0.310 0.790
------- ------- ------- ------- -------
Less dividends:
Dividends from net investment income .................... (0.224) (0.302) (0.464) (0.460) (0.300)
------- ------- ------- ------- -------
Total dividends ......................................... (0.224) (0.302) (0.464) (0.440) (0.300)
------- ------- ------- ------- -------
Net asset value, end of period ............................. $10.870 $10.910 $10.770 $10.300 $10.430
======= ======= ======= ======= =======
Total return(4) ............................................ 1.69% 4.17% 9.31% 3.12% 8.13%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $264 $284 $69 $19 $19
Ratio of expenses to average net assets ................. 1.25% 1.25% 1.29% 1.37% 1.30%(5)
Ratio of expenses to average net assets prior to
expense limitation .................................... 2.08% 2.09% 2.18% 2.00% 2.00%(5)
Ratio of net investment income to average net assets .... 4.12% 4.19% 4.40% 4.36% 4.45%(5)
Ratio of net investment income to average net assets
prior to expense limitation ........................... 3.29% 3.35% 3.51% 3.73% 3.75%(5)
Portfolio turnover ...................................... - 1% 20% 33% 51%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 53
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE WISCONSIN FUND - CLASS A
-------------------------------------------------------------
SIX MONTHS EIGHT MONTHS
ENDED ENDED YEAR ENDED
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $10.080 $10.010 $9.640 $9.780 $8.740
Income from investment operations:
Net investment income ................................... 0.229 0.304 0.466 0.460 0.480
Net realized and unrealized gain (loss)
on investments ........................................ (0.040) 0.070 0.383 (0.140) 1.040
------- ------- ------- ------- -------
Total from investment operations ........................ 0.189 0.374 0.849 0.320 1.520
------- ------- ------- ------- -------
Less dividends:
Dividends from net investment income .................... (0.229) (0.304) (0.479) (0.460) (0.480)
------- ------- ------- ------- -------
Total dividends ......................................... (0.229) (0.304) (0.479) (0.460) (0.480)
------- ------- ------- ------- -------
Net asset value, end of period ............................. $10.040 $10.080 $10.010 $9.640 $9.780
======= ======= ======= ======= =======
Total return(3) ............................................ 1.82% 3.80% 9.07% 3.49% 17.74%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $36,084 $34,489 $30,879 $28,292 $26,449
Ratio of expenses to average net assets ................. 1.00% 1.00% 0.99% 0.98% 0.88%
Ratio of expenses to average net assets prior to
expense limitation .................................... 1.03% 1.04% 1.07% 1.09% 1.09%
Ratio of net investment income to average
net assets ............................................ 4.46% 4.56% 4.76% 4.90% 5.05%
Ratio of net investment income to average net assets
prior to expense limitation ........................... 4.43% 4.52% 4.68% 4.79% 4.84%
Portfolio turnover ...................................... 8% 16% 30% 38% 12%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
-----------------------
FOUR MONTHS YEAR
ENDED ENDED
12/31/94 8/31/94
<S> <C> <C>
Net asset value, beginning of period ....................... $9.280 $10.000
Income from investment operations:
Net investment income ................................... 0.160 0.490
Net realized and unrealized gain (loss)
on investments ........................................ (0.550) (0.720)
------- -------
Total from investment operations ........................ (0.390) (0.230)
------- -------
Less dividends:
Dividends from net investment income .................... (0.150) (0.490)
------- -------
Total dividends ......................................... (0.150) (0.490)
------- -------
Net asset value, end of period ............................. $8.740 $9.280
======= =======
Total return(3) ............................................ (4.12%) (2.40%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $20,167 $16,093
Ratio of expenses to average net assets ................. 0.08%(4) 0.04%
Ratio of expenses to average net assets prior to
expense limitation .................................... 1.25%(4) 1.25%
Ratio of net investment income to average
net assets ............................................ 5.54%(4) 4.89%
Ratio of net investment income to average net assets
prior to expense limitation ........................... 4.37%(4) 3.68%
Portfolio turnover ...................................... 20% 86%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(4) Annualized.
See accompanying notes
<PAGE>
54 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE WISCONSIN FUND - CLASS B
-------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 4/22/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $10.070 $10.000 $9.630 $9.770 $9.390
Income from investment operations:
Net investment income .................................. 0.189 0.255 0.395 0.410 0.280
Net realized and unrealized gain (loss) on investments . (0.041) 0.070 0.382 (0.140) 0.370
------- ------- ------- ------ ------
Total from investment operations ....................... 0.148 0.325 0.777 0.270 0.650
------- ------- ------- ------ ------
Less dividends:
Dividends from net investment income ................... (0.188) (0.255) (0.407) (0.410) (0.270)
------- ------- ------- ------ ------
Total dividends ........................................ (0.188) (0.255) (0.407) (0.410) (0.270)
------- ------- ------- ------ ------
Net asset value, end of period ............................ $10.030 $10.070 $10.000 $9.630 $9.770
======= ======= ======= ====== ======
Total return(4) ........................................... 1.45% 3.29% 8.27% 2.84% 7.08%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $3,007 $2,621 $1,931 $1,339 $725
Ratio of expenses to average net assets ................ 1.75% 1.75% 1.72% 1.66% 1.45%(5)
Ratio of expenses to average net assets prior to
expense limitation ................................... 1.78% 1.79% 1.80% 1.85% 1.70%(5)
Ratio of net investment income to average net assets ... 3.71% 3.81% 4.03% 4.37% 4.31%(5)
Ratio of net investment income to average net
assets prior to expense limitation ................... 3.68% 3.77% 3.95% 4.18% 4.06%(5)
Portfolio turnover ..................................... 8% 16% 30% 38% 12%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE WISCONSIN FUND - CLASS C
-------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD
ENDED ENDED YEAR ENDED 3/28/95(3)
2/28/99(1) 8/31/98(1) 12/31/97(2) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $10.110 $10.030 $9.660 $9.790 $9.340
Income from investment operations:
Net investment income .................................. 0.189 0.259 0.380 0.390 0.300
Net realized and unrealized gain (loss) on investments . (0.041) 0.075 0.390 (0.130) 0.440
------- ------- ------- ------ ------
Total from investment operations ....................... 0.148 0.334 0.770 0.260 0.740
------- ------- ------- ------ ------
Less dividends:
Dividends from net investment income ................... (0.188) (0.254) (0.400) (0.390) (0.290)
------- ------- ------- ------ ------
Total dividends ........................................ (0.188) (0.254) (0.400) (0.390) (0.290)
------- ------- ------- ------ ------
Net asset value, end of period ............................ $10.070 $10.110 $10.030 $9.660 $9.790
======= ======= ======= ====== ======
Total return(4) ........................................... 1.44% 3.38% 8.16% 2.74% 8.06%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $1,532 $1,283 $689 $555 $73
Ratio of expenses to average net assets ................ 1.75% 1.75% 1.81% 1.75% 1.77%(5)
Ratio of expenses to average net assets prior to
expense limitation .................................. 1.78% 1.79% 1.89% 1.83% 1.77%(5)
Ratio of net investment income to average net assets ... 3.71% 3.81% 3.94% 4.12% 4.04%(5)
Ratio of net investment income to average net assets
prior to expense limitation ......................... 3.68% 3.77% 3.86% 4.04% 4.04%(5)
Portfolio turnover ..................................... 8% 16% 30% 38% 12%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 55
Notes to Financial Statements
February 28, 1999 (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 Missouri Insured Fund, Tax-Free Oregon Insured Fund and Tax-Free
Washington Insured Fund seek high current income free from both federal and
state income taxes with the added safety of an insured portfolio by investing in
insured municipal bonds. The Tax-Free Kansas Fund seeks high current income free
from both federal and state income taxes and local intangibles tax by investing
in investment grade municipal bonds.
1. Fund Reorganization
On April 30, 1997, Lincoln National Corporation ("LNC") acquired Voyageur Fund
Manager Inc.'s ("Voyageur") parent, Dougherty Financial Group, Inc. ("DFG")
pursuant to an agreement and plan of merger dated January 15, 1997, in which LNC
acquired DFG including the mutual fund investment advisory business of DFG
conducted by Voyageur. Upon completion of the acquisition, Delaware Management
Company, Inc. ("DMC") became the investment advisor to the Funds, Delaware
Distributors, L.P. ("DDLP") became the distributor for the Funds, and Delaware
Service Company, Inc. ("DSC") became the transfer, dividend-disbursing,
shareholder servicing and accounting and administrative agent for the Funds.
DMC, DDLP and DSC assumed these services under substantially similar fee
structures that were in effect prior to the acquisition.
2. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Money market instruments having less than 60 days to maturity are
valued at amortized cost which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Funds' Board
of Directors.
Federal Income Taxes - Each Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
<PAGE>
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Funds on the basis of daily net assets of each class. Distribution expenses
relating to a specific class are charged directly to that class.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
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.
3. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, each Fund
pays DMC, the Investment Manager of each Fund, an annual fee which is calculated
daily based on the net assets of each Fund.
DMC has elected to waive its fees and reimburse each Fund to the extent that
annual operating expenses exclusive of taxes, interest, brokerage commissions,
distribution fees, and extraordinary expenses do not exceed the following
percentages of average daily net assets through June 30, 1999.
<PAGE>
56 for tax-exempt income
Notes to Financial Statments (Continued)
- --------------------------------------------------------------------------------
3. Investment Management and Other Transactions with Affiliates (Continued)
The nanagement fee and waiver rates are as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
IDAHO IOWA KANSAS MISSOURI INSURED NORTH OREGON INSURED WASHINGTON WISCONSIN
FUND FUND FUND FUND DAKOTA FUND FUND INSURED FUND FUND
-------- -------- -------- ---------------- ----------- -------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Management fee as a
percentage of average
daily net assets
(per annum)................. 0.50% 0.50% 0.55% 0.50% 0.50% 0.50% 0.50% 0.50%
Operating expense limitation
as a percentage of average
daily net assets
(per annum)................. 0.75% 0.75% 0.75% 0.75% 0.75% 0.60% 0.25% 0.75%
</TABLE>
The Funds have engaged DSC, an affiliate of DMC, to provide dividend disbursing,
transfer agent and accounting and administration services. Each Fund pays DSC a
monthly fee based on number of shareholder accounts, shareholder transactions
and average net assets, subject to certain minimums.
On February 28, 1999, the Funds had payables to affiliates as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
IDAHO IOWA KANSAS MISSOURI INSURED NORTH OREGON INSURED WASHINGTON WISCONSIN
FUND FUND FUND FUND DAKOTA FUND FUND INSURED FUND FUND
-------- -------- -------- ---------------- ----------- -------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment Management fees
payable to DMC.............. - $32,934 - $20,670 $16,063 $1,892 - $24,209
Dividend disbursing, transfer
agent fees, accounting
services and other expenses
payable to DSC.............. $4,613 $4,815 $1,916 $6,927 $3,024 - $619 $3,475
Other expenses payable to
DMC and affiliates.......... $2,316 $2,335 $248 $635 $1,272 - - $1,985
</TABLE>
Pursuant to the Distribution Agreement, the Funds pay DDLP, the Distributor and
an affiliate of DMC, an annual fee not to exceed 0.25% of the average daily net
assets of the A Class and 1.00% of the average daily net assets of the B and C
Class.
DDLP earned commissions on sales of the Fund A Class shares for each Fund as
follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
IDAHO IOWA KANSAS MISSOURI INSURED NORTH OREGON INSURED WASHINGTON WISCONSIN
FUND FUND FUND FUND DAKOTA FUND FUND INSURED FUND FUND
-------- -------- -------- ---------------- ----------- -------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Six months ended 2/28/99.... $116,200 $5,846 $4,729 $2,454 $8,460 $13,730 $4,981 $7,070
</TABLE>
Certain officers of DMC, DSC and DDLP are officers, directors and/or employees
of the Funds. These officers, directors and employees are paid no compensation
by the Funds.
4. Investments
During the six months ended February 28, 1999, the Funds made purchases and
sales of investment securities other than U.S. government securities and
temporary cash investments as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
IDAHO IOWA KANSAS MISSOURI INSURED NORTH OREGON INSURED WASHINGTON WISCONSIN
FUND FUND FUND FUND DAKOTA FUND FUND INSURED FUND FUND
-------- -------- -------- ---------------- ----------- -------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases................. $6,543,682 $2,310,714 $2,659,614 $1,141,967 $5,567,637 $9,717,283 $927,685 $4,136,320
Sales..................... $2,052,055 $889,386 $2,505,353 $4,581,769 $5,810,731 $3,585,888 $5,000 $1,583,881
</TABLE>
<PAGE>
for tax-exempt income 57
Notes to Financial Statments (Continued)
- --------------------------------------------------------------------------------
4. Investments (Continued)
At February 28, 1999, the aggregate cost of securities and unrealized
appreciation (depreciation) for federal income tax purposes for each Fund were
as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
IDAHO IOWA KANSAS MISSOURI INSURED NORTH OREGON INSURED WASHINGTON WISCONSIN
FUND FUND FUND FUND DAKOTA FUND FUND INSURED FUND FUND
-------- -------- -------- ---------------- ----------- -------------- ------------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cost of Investments........$50,122,294 $42,094,756 $16,297,149 $51,036,252 $28,823,799 $36,916,107 $4,493,067 $38,252,231
Aggregate unrealized
appreciation ............. $2,906,592 $2,962,332 $1,123,334 $4,445,340 $1,940,589 $2,588,285 $266,718 $2,205,360
Aggregate unrealized
depreciation ............. $5,139 $15,660 $16,201 - $12,813 $61,391 $4,438 $36,076
Net unrealized
appreciation ............. $2,901,453 $2,946,672 $1,107,133 $4,445,340 $1,927,776 $2,526,894 $262,280 $2,169,284
</TABLE>
For federal income tax purposes, the Funds' had accumulated capital losses at
August 31, 1998 as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
IOWA MISSOURI OREGON INSURED WASHINGTON WISCONSIN
FUND INSURED FUND FUND INSURED FUND FUND
--------- ------------ --------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Year of expiration 2002 .......................... $974,083 $40,785 $223,778 - $193,864
Year of expiration 2003 .......................... $368,235 $351,009 $158,365 $77,949 $229,647
Year of expiration 2004 .......................... $168,308 $525,264 $218,468 $2,791 -
Year of expiration 2005 .......................... $117,934 - - - -
---------- -------- -------- ------- --------
Total ............................................ $1,628,560 $917,058 $600,611 $80,740 $423,511
</TABLE>
5. Capital Stock
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC. VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE IDAHO FUND TAX-FREE IOWA FUND
--------------------------------------- ----------------------------------------
SIX MONTHS EIGHT MONTHS YEAR SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97 2/28/99 8/31/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class.............................. 504,901 771,907 731,650 184,632 243,079 355,433
B Class ............................. 159,227 89,150 183,407 76,146 108,244 135,405
C Class ............................. 48,552 61,814 64,124 31,138 48,973 25,201
Shares issued upon reinvestment of
dividends from net investment income
and net realized gain on investment
transactions:
A Class............................... 53,944 67,203 87,352 52,555 70,558 124,468
B Class............................... 8,470 10,490 14,064 5,075 5,695 6,562
C Class............................... 2,480 2,676 3,083 1,354 1,415 1,110
------- --------- --------- ------- ------- -------
777,574 1,003,240 1,083,680 350,900 477,964 648,179
Shares repurchased:
A Class.............................. (175,634) (343,954) (406,050) (195,582) (251,562) (833,421)
B Class ............................. (41,497) (49,387) (54,443) (15,133) (18,336) (23,960)
C Class ............................. (10,046) (14,047) (44,185) (23,458) (16,486) (9,438)
------- --------- --------- ------- ------- -------
(227,177) (407,388) (504,678) (234,173) (286,384) (866,819)
------- --------- --------- ------- ------- -------
Net increase (decrease)................. 550,397 595,852 579,002 116,727 191,580 (218,640)
======= ========= ========= ======= ======= =======
</TABLE>
<PAGE>
58 for tax-exempt income
Notes to Financial Statments (Continued)
- --------------------------------------------------------------------------------
5. Capital Stock (Continued)
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST VOYAGEUR INVESTMENT TRUST
TAX-FREE KANSAS FUND TAX-FREE MISSOURI INSURED FUND
--------------------------------------- ----------------------------------------
SIX MONTHS EIGHT MONTHS YEAR SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97 2/28/99 8/31/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class............................. 131,275 244,419 114,412 54,225 127,338 265,509
B Class............................. 80,027 37,997 89,151 19,507 36,960 200,996
C Class ............................ 186 3,682 6,942 12,116 2,752 9,719
Shares issued upon reinvestment of
dividends from net investment income
and net realized gain on investment
transactions:
A Class ............................. 15,253 16,919 27,906 50,024 70,272 129,146
B Class ............................. 5,845 5,986 7,813 11,826 16,990 33,377
C Class ............................. 255 252 404 123 264 521
------- ------- ------- ------- ------- -------
232,841 309,255 246,628 147,821 254,576 639,268
Shares repurchased:
A Class.............................. (124,695) (101,432) (142,361) (287,842) (373,253) (656,405)
B Class ............................. (10,939) (25,196) (12,598) (45,406) (77,609) (175,978)
C Class ............................. (1,283) (2,379) (6,119) (1,371) (13,547) (4,070)
------- ------- ------- ------- ------- -------
(136,917) (129,007) (161,078) (334,619) (464,409) (836,453)
------- ------- ------- ------- ------- -------
Net increase (decrease) ............... 95,924 180,248 85,550 (186,798) (209,833) (197,185)
======= ======= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC. VOYAGEUR TAX-FREE FUNDS, INC.
TAX-FREE NORTH DAKOTA FUND TAX-FREE OREGON INSURED FUND
--------------------------------------- ----------------------------------------
SIX MONTHS EIGHT MONTHS YEAR SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97 2/28/99 8/31/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class ............................ 68,563 85,182 68,674 433,858 389,222 372,928
B Class ............................ 9,324 7,136 17,635 139,547 54,361 162,406
C Class ............................ 351 - - 45,278 49,358 16,538
Shares issued upon reinvestment of
dividends from net investment income
and net realized gain on investment
transactions:
A Class ............................. 44,631 52,793 95,230 35,198 41,911 61,920
B Class ............................. 1,208 1,149 2,047 6,376 9,754 15,305
C Class ............................. 63 99 156 1,572 1,286 1,157
------- ------- ------- -------- ------- -------
124,140 146,359 183,742 661,829 545,892 630,254
Shares repurchased:
A Class ............................. (149,631) (205,612) (529,157) (55,740) (238,227) (412,353)
B Class ............................. (4,814) (1,044) (5,593) (18,982) (114,262) (33,265)
C Class ............................. - (1,113) (274) (82) (6,562) (2,526)
------- ------- ------- -------- ------- -------
(154,445) (207,769) (535,024) (74,804) (359,051) (448,144)
------- ------- ------- -------- ------- -------
Net increase (decrease) (30,305) (61,410) (351,282) 587,025 186,841 182,110
======= ======= ======= ======== ======= =======
</TABLE>
<PAGE>
for tax-exempt income #59
Notes to Financial Statments (Continued)
- --------------------------------------------------------------------------------
5. Capital Stock (Continued)
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE WASHINGTON INSURED FUND TAX-FREE WISCONSIN FUND
--------------------------------------- ----------------------------------------
SIX MONTHS EIGHT MONTHS YEAR SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97 2/28/99 8/31/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class.............................. 22,503 10,134 38,633 279,576 567,546 729,711
B Class.............................. 24,188 31,122 50,130 69,363 95,654 51,892
C Class ............................. 543 21,312 4,447 27,846 65,500 35,931
Shares issued upon reinvestment of
dividends from net investment income
and net realized gain on investment
transactions:
A Class............................... 2,541 3,273 6,061 43,166 51,547 78,038
B Class............................... 1,626 1,719 1,911 3,190 3,392 4,328
C Class .............................. 425 276 86 2,304 2,544 2,504
------- ------- ------- ------- ------- -------
51,826 67,836 101,268 425,445 786,183 902,404
------- ------- ------- ------- ------- -------
Shares repurchased:
A Class............................... (6,568) (20,291) (55,657) (149,351) (283,460) (657,954)
B Class .............................. (4,488) (2,728) (12,744) (32,991) (31,926) (2,138)
C Class............................... (2,739) (1,963) - (4,889) (9,845) (27,203)
------- ------- ------- ------- ------- -------
(13,795) (24,982) (68,401) (187,231) (325,231) (687,295)
------- ------- ------- ------- ------- -------
Net increase (decrease) ................ 38,031 42,854 32,867 238,214 460,952 (215,109)
======= ======= ======= ======= ======= =======
</TABLE>
6. Lines of Credit
The Funds have committed lines of credit for the following amounts:
Tax-Free Idaho Fund .............................. $2,100,000
Tax-Free Iowa Fund ............................... 2,100,000
Tax-Free Kansas Fund ............................. 700,000
Tax-Free Missouri Insured Fund ................... 3,000,000
Tax-Free North Dakota Fund ....................... 1,600,000
Tax-Free Oregon Insured Fund ..................... 1,500,000
Tax-Free Washington Insured Fund ................. 200,000
Tax-Free Wisconsin Fund .......................... 1,700,000
No amounts were outstanding at February 28, 1999, 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 FUNDS, TAX FREE
IOWA FUNDS, 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 and the Delaware
Investments Performance Update for the most recently completed calendar quarter.
The prospectus sets forth details about charges, expenses, investment objectives
and operating policies of each Fund. You should read the prospectus carefully
before you invest or send money. 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
[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
www.delawarefunds.com
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Funds are
not FDIC or NCUSIF insured, are not guaranteed by any bank or any credit union,
and involve investment risk, including the possible loss of the principal amount
invested. Shares of the Funds are not bank or credit union deposits.
(C) Delaware Distributors, L.P.
DELAWARE
INVESTMENTS
- -------------------
Philadelphia-London
Printed in the USA
on recycled paper
(1625) (J4586)
SA-CORN [2/98] PP4/99
