<PAGE>
F o r T a x-E x e m p t I n c o m e
Delaware Minnesota
Municipal Bond Funds
(various photos demonstrating service and
guidance, professional management and goals)
service and guidance
professional management
goals
1999
Annual
Report
Delaware Tax-Free Minnesota Fund
Delaware Minnesota Insured Fund
Delaware Tax-Free Minnesota Intermediate Fund
Delaware Minnesota High-Yield Municipal Bond Fund
DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London
<PAGE>
A TRADITION OF SOUND INVESTING
commitment
tradition
(photo of computer keyboard)
(photo of illustration
from Tax-Exempt income brochure)
A Commitment
To Our Investors
Delaware Investments has a tradition of money management that dates back to
1929. We have a long and distinguished history of helping individuals reach
their financial goals through a full range of investment opportunities that
includes municipal bond mutual funds.
Headquartered in Philadelphia with an international affiliate in London, the
Delaware organization is one of the nation's leading municipal bond fund
managers.
Delaware Investments manages approximately $47 billion in mutual fund assets
and institutional advisory accounts. We offer a wide variety of tax-advantaged
equity and fixed-income investments, retirement plan accounts, IRAs, investment
accounts for single and multi-manager variable annuities and closed-end funds.
Delaware's Tax-Advantaged Investment Lineup
o Tax-Efficient Equity Fund
o Municipal bond funds in 15 states
o Four national tax-exempt bond funds
o Tax-Free Money Fund
Complete information on any fund offered by Delaware Investments can be found in
each fund's current prospectus. Prospectuses for all funds offered by Delaware
Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.
Fund Objectives
DELAWARE TAX-FREE MINNESOTA FUND AND
DELAWARE MINNESOTA INSURED FUND
To seek as high a level of current income exempt from federal income tax and
Minnesota state personal income tax as is consistent with preservation of
capital.
DELAWARE TAX-FREE MINNESOTA INTERMEDIATE FUND
To provide investors with preservation of capital and, as a secondary objective,
current income exempt from federal income tax and Minnesota state personal
income tax.
DELAWARE MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND
To seek a high level of current income exempt from federal income tax and
Minnesota state personal income tax by investing primarily in a portfolio of
medium and lower grade municipal bonds.
Table of Contents
Letter to Shareholders Page 1
Portfolio Manager's Review Page 4
Delaware Tax-Free Minnesota Fund Page 5
Delaware Minnesota Insured Fund Page 6
Delaware Tax-Free Minnesota Intermediate Fund Page 6
Delaware Minnesota High-Yield Municipal Bond Fund Page 7
Outlook Page 8
Statements of Net Assets Page 14
Financial Highlights Page 30
<PAGE>
September 7, 1999
for tax-exempt
income
1
Dear Shareholder:
Fiscal 1999 was a challenging year
for both taxable and tax-exempt fixed-income investors. Just before our fiscal
year began in August 1998, debt problems in Russia and Brazil, along with
ongoing concerns about recessions in Asia, created strong worldwide demand for
U.S. Treasury bonds. Demand for Treasuries during times of extreme market
turbulence is often referred to as "a flight to quality."
Early in the fall, slower corporate earnings growth also fueled demand for
the relative safety of U.S. government debt. Prices for long-term Treasury bonds
rose, pushing yields lower. As prices for U.S. Treasury bonds moved higher,
municipal bonds seemed to offer exceptional value compared to Treasuries. Later
in the fall, as demand for Treasuries reversed, an abundant supply of municipal
bonds was met with relatively stable demand.
As winter approached, three Federal Reserve interest rate cuts helped to
restore investors' confidence in the U.S. economy and reduce concerns over
global recession. This set the stage for the significant stock market recovery
that started in the fourth quarter of 1998 and through our fiscal year. In the
spring of 1999, the Dow Jones Industrial Average closed above both the 10,000
and 11,000 marks for the first time.
During the spring and summer, fixed-income investments took second billing to
equities. The performance of Treasury bonds suffered through June, as strength
in the domestic economy reduced demand for "safe haven"
WE ARE PLEASED THAT TOTAL RETURNS FOR ALL FOUR OF OUR MINNESOTA MUNICIPAL BOND
FUNDS OUTPERFORMED THEIR RESPECTIVE LIPPER PEER GROUPS.
<TABLE>
<CAPTION>
ANNUAL TOTAL RETURNS
- -----------------------------------------------------------------------------------------
<S> <C>
One Year Ended
August 31, 1999
- -----------------------------------------------------------------------------------------
Delaware Tax-Free Minnesota Fund A Class -1.06%
Delaware Minnesota Insured Fund A Class -0.17%
Lipper Minnesota Municipal Debt Fund Average (47 funds) -2.70%
- -----------------------------------------------------------------------------------------
Delaware Tax-Free Minnesota Intermediate Fund A Class -0.14%
Lipper Other States Intermediate Municipal Debt Fund Average (80 funds) -1.26%
- -----------------------------------------------------------------------------------------
Delaware Minnesota High-Yield Municipal Bond Fund A Class -0.27%
Lipper High-Yield Municipal Debt Fund Average (54 funds) -1.80%
- -----------------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +0.50%
Lehman Brothers Insured Municipal Bond Index -0.29%
Lehman Brothers Five-Year Municipal Bond Index +2.22%
- -----------------------------------------------------------------------------------------
</TABLE>
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 Lipper
categories represent the average returns of municipal bond funds with similar
investment objectives. The unmanaged Lehman Brothers Indexes are composed of
bonds with a variety of quality ratings from many states. You cannot invest
directly in an index. Complete performance information for all funds can be
found on pages 10 through 13.
<PAGE>
for tax-exempt
income
2
investments. Municipal bonds weren't such a clear value as they appeared in
spring 1998 when yields on Treasury bonds and municipal bonds were nearly
identical; however, in our view tax-free bonds remained attractive compared to
Treasury securities in early summer. The interest income you receive from
investing in municipal bonds is free from federal income taxes. Some income may
be subject to the alternative minimum tax (AMT) for investors who are subject to
that tax. The AMT is a federal tax designed to ensure that wealthy individuals
and corporations pay at least some income tax. In most states, interest received
from securities issued by government units within the state is also exempt from
state and local taxes.
On June 30, 1999, the Federal Reserve Board raised the Fed Funds rate, its
target rate for overnight loans between banks, by a quarter of a percentage
point, citing the potential for inflationary concerns. The Treasury market
improved as a result, posting solid gains into the first week of July. Although
they have some important differences, municipal bonds typically move in sympathy
with Treasuries, and the muni market improved during this time period as well.
Even U.S. equity indexes hit new records following the rate increase.
(Source: Bloomberg.)
On August 24, 1999, the Federal Reserve again raised interest rates by a
quarter of a percentage point, the second increase in less than two months,
saying the action should help avert inflation while allowing the nation's long
economic expansion to continue. The Dow Jones Industrial Average reacted
favorably to the interest rate increase, reaching an all-time high of 11,326 on
August 25, 1999. (Source: Bloomberg.)
Municipal bonds weathered the volatility in the fixed-income arena better
than Treasuries this past year. The 30-year U.S. Treasury bond yield stood at
6.21%, while 30-year AAA-rated general obligation municipal bonds closed at
5.52% on August 31, 1999. In essence, municipal general obligation bonds were
yielding 89% of what Treasuries were yielding before tax. (Source: Bloomberg.)
Municipal bonds provide even better yield after taxes are taken into account;
the interest income from municipal bonds is free from federal taxes.
discipline
<PAGE>
for tax-exempt
income
3
Despite increasing yields, municipal bonds, like most fixed instruments, did
not deliver exceptional total return for the fiscal year ending August 31.
Delaware's Minnesota Municipal Bond Funds were no exception--all four Funds were
slightly down for the fiscal year. We are, however, very pleased that total
returns for our four Minnesota Municipal Bond Funds outpaced the returns of
their respective Lipper peer groups.
Please see the Portfolio Manager's Review for a discussion of individual fund
performance.
Looking forward, we believe taxable and tax-exempt bonds may remain in the
shadow of stocks as long as economic growth and the roaring bull market continue
in 1999. However, we still believe fixed-income investments play a vital role in
well-balanced portfolios. Tax-exempt municipal bonds, which your Funds hold,
remain especially popular with investors for good reason. They offer a wide
range of benefits, including:
o Attractive current income free from federal, state and local taxes*
o Relatively dependable income potential
o Wide range of choices, investment quality, maturity and type of bond to fit in
with your investment objectives.
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 thank you for your continued commitment during a difficult year for
fixed-income investors. We also appreciate your confidence in Delaware
Investments.
Sincerely,
/s/ Wayne A. Stork
- ------------------------------------
Wayne A. Stork
Chairman
Delaware Investments Family of Funds
/s/ David K. Downes
- ------------------------------------
David K. Downes
President and Chief Executive Officer
Delaware Investments Family of Funds
* A portion of the income from tax-exempt funds may be subject to the
alternative minimum tax.
<PAGE>
for tax-exempt
income
4
Portfolio Manager's Review
Elizabeth H. Howell
Vice President and Senior Portfolio Manager
September 7, 1999
OVERVIEW
In late summer and fall of 1998, state and local governments issued municipal
bonds at near-record levels, led by education, transportation and health care
issues. New U.S. 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, high current income potential and the possibility of price
appreciation. The large municipal bond supply, however, slightly exceeded
investor demand, which temporarily stifled price gains. This led to
disappointing returns in early 1999.
New bond issuance cooled off considerably over the first three months of
1999, then picked up again. This higher supply was sustained throughout the
summer. Still, total supply to date in the state of Minnesota from January
through August 31, 1999 was down considerably from the same period in fiscal
1998. Mild demand for municipal bonds in the summer kept prices in check, which
meant these securities continued to offer good values relative to Treasury
bonds.
Prices of most fixed-income securities declined this past year as the stock
market grabbed the headlines. Municipal bonds were no exception. Despite a
difficult year, the municipal bond market began gaining luster late in the
summer as the yield gap between municipal bonds and Treasury securities
narrowed.
Less than two weeks after the Federal Reserve raised its Federal Funds
target rate a second time on August 24 (by 0.25%), high-quality municipal bonds
were still looking extraordinarily attractive in our
DESPITE A DIFFICULT YEAR, THE MUNICIPAL BOND MARKET BEGAN GAINING LUSTER LATE IN
THE SUMMER AS THE YIELD GAP BETWEEN MUNICIPAL BONDS AND TREASURY SECURITIES
NARROWED.
market
overview
[photo of computer keyboard]
<PAGE>
for tax-exempt
income
5
[photo of globes]
view relative to Treasury bonds. As of August 31, 1999, municipal bond investors
were giving up very little yield in return for freedom from certain taxes.
A couple of factors are at play in the improving municipal market:
o Treasury bond supply has been steadily tapering off this past spring and
summer, pushing prices higher. This made Treasuries relatively more expensive
compared to municipal bonds. For nearly two decades, the government securities
market has grown exponentially. The government relied upon Treasuries to help
it finance the nation's $5.5 trillion in debt. Now, with a back-to-back budget
surplus occurring for the first time since 1956 and 1957, Treasury bonds are
becoming relatively scarce. (Source: Bloomberg.)
o Moreover, a robust U.S. economy has improved the credit quality of many
municipal bond jurisdictions, so default risk for high-quality municipal bonds
is relatively low.
In our view, the single biggest factor weighing down municipal bonds now is
the bull market in stocks. Against annual double-digit gains in the stock
market, the yield on municipals tends to look undersized.
DELAWARE TAX-FREE
MINNESOTA FUND
Delaware Tax-Free Minnesota Fund had a total return of -1.06% (Class A shares at
net asset value with distributions reinvested) for the one-year period ended
August 31, 1999.
Although this return was slightly negative for the year, we succeeded in
preserving capital to a greater degree than the average fund in the Lipper
Minnesota Municipal Debt Fund category.
We selected bonds for Delaware Tax-Free Minnesota Fund which we believed had
the potential to improve total return for the portfolio and provide a
competitive income stream. The majority of the Fund's assets were invested in
high-quality health care, housing and power authority issues.
Within these categories, we focused on new bonds with strong credit ratings
that were selling for less than their face value. In fact, none of our bonds
experienced any credit difficulties during this period. We also sought bonds
with at least 10 years of call protection. This helped protect the Fund from the
possibility that bond issuers would pay off their loans early due to falling
interest rates. If bonds are paid off when interest rates fall, we would have to
reinvest the money at lower interest rates.
As of August 31, 1999, Delaware Tax-Free Minnesota Fund's average effective
tax-free
minnesota
<PAGE>
for tax-exempt
income
6
duration was 8.4 years, almost six months longer than the average duration of
its Lipper peer group. Duration is a common measure of a bond or bond fund's
sensitivity to interest rates. The longer the duration, the more the bond's
price will change for a given increase or decrease in interest rates. Our longer
than average duration allowed us to take advantage of the higher yields offered
by longer term securities.
DELAWARE MINNESOTA
INSURED FUND
Delaware Minnesota Insured Fund had a total return of -0.17% (Class A Shares at
net asset value with distributions reinvested) for the one-year period ended
August 31, 1999. We succeeded in preserving capital to a greater degree than the
Fund's peer group which delivered a -2.70% average return for the same one-year
period.
In fiscal 1999, more than 50% of all new municipal issues carried insurance
according to Securities Data Corporation, up from 23% of all new municipal
issues in fiscal 1998. This demonstrates growing demand for the added security
of insured municipal bonds. The bonds in Delaware Minnesota Insured Fund's
portfolio are protected by private insurance, which guarantees the timely
payment of principal and interest.
Over the last year, 35% of the Fund's holdings were invested in pre-refunded
bonds. Issuers often pre-refund their bonds when interest rates are low in order
to reduce their interest costs. Pre-refunded bonds help the Fund because:
o The credit quality increases. Pre-refunded bonds are backed by investments in
U.S. government bonds, which are held in a separate escrow account.
o The price increases because the bond will be paid off at the first call
option.
o In general, prices for these bonds are less sensitive to interest rate
fluctuations.
In most cases, once a bond is pre-refunded we continue to hold it. This
normally allows the Fund to collect an attractive level of current income and
benefit from better protection of principal. Pre-refunded bonds performed
especially well during the rising interest rate environment we've experienced
the last six months.
DELAWARE TAX-FREE MINNESOTA
INTERMEDIATE FUND
Delaware Tax-Free Minnesota Intermediate Fund provided a total return of -0.14%
(Class A shares at net asset value with distributions reinvested) for the
one-year period ended
minnesota
insured
<PAGE>
for tax-exempt
income
7
August 31, 1999. The Fund modestly outperformed a peer group of municipal bond
funds from a variety of states that invest in intermediate length securities.
This outperformance can be partially explained by the Fund's average
effective duration. As of August 31, 1999, Delaware Tax-Free Minnesota
Intermediate Fund's duration was positioned at 6.1 years, slightly longer than
the average of the Lipper universe of single state intermediate funds. The
Fund's performance was also enhanced by positions in non-rated bonds and
pre-refunded bonds (approximately 34% of the Fund's total assets).
Our secondary goal for Delaware Tax-Free Minnesota Intermediate Fund is a
high tax-free dividend. We believe that intermediate-term bonds in Minnesota
help us achieve this goal by offering an attractive balance between the reduced
price volatility of short-term bonds and higher income potential of longer
bonds.
As with our three other Minnesota funds, we attempted to minimize capital
gains for Delaware Tax-Free Minnesota Intermediate Fund by holding onto bonds
that appreciated in value. Our low-turnover approach to investing helped limit
taxable distributions to our shareholders.
As of the end of your Fund's fiscal year, Delaware Tax-Free Minnesota
Intermediate Fund was the only intermediate state fund to offer dual exempt
income (free from both federal and state taxes) to Minnesota residents.
DELAWARE MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND
Delaware Minnesota High-Yield Municipal Bond Fund provided a total return of
- -0.27% (Class A shares at net asset value with distributions reinvested) for the
year ended August 31, 1999. Although this Fund's one-year performance was
negative, it did surpass the average return of other Minnesota municipal bond
funds, as represented by the Lipper High-Yield Municipal Debt Fund Average. This
average provided an annual return of -1.80% for the year ended August 31, 1999
and is comprised of 54 peer funds.
Over the last year, we increased Delaware Minnesota High-Yield Municipal Bond
Fund's holdings of non-rated bonds. They now represent more than 65% of the
portfolio. In most cases, these bonds were issued by small, rural municipalities
looking to avoid the expense of obtaining a Standard & Poor's rating.
We rigorously research non-rated bond issues before we purchase them and
continue to monitor their credit quality on a regular basis. By investing in
non-rated bonds, which generally offer higher yields, we were able to generate
higher income for Delaware
<PAGE>
for tax-exempt
income
8
Minnesota High-Yield Municipal Bond Fund's shareholders. The interest
environment we experienced this past year favored these securities, which have
the potential to deliver greater price stability than highly rated bonds.
The duration of your Fund was 9.8 years as of August 31, 1999, slightly
longer than its peer group. Shareholders also benefited from Delaware Minnesota
High-Yield Municipal Bond Fund's tax-efficient portfolio management. In fiscal
1999, we held onto our appreciated bonds and paid no capital gains.
OUTLOOK
The U.S. seems to be the engine of growth for the entire world at this time. We
believe strong forward momentum for the U.S. economy is likely to result in
solid growth (about 3% annually) for the remainder of this year.
We also believe the Federal Reserve's two rate increases represented
fine-tuning rather than fundamental changes in policy. Both actions were made by
the central bank in an apparent attempt to avert inflation while allowing the
nation's long economic expansion to continue.
REGARDLESS OF MARKET CONDITIONS, MUNICIPAL BOND FUNDS HAVE THE POTENTIAL TO
OFFER VALUABLE ASSET ALLOCATION BENEFITS WITHOUT ADDING TO TAXABLE INVESTMENT
INCOME.
PORTFOLIO HIGHLIGHTS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
August 31, 1999
Delaware Delaware
Delaware Delaware Tax-Free Minnesota
Tax-Free Minnesota Minnesota High-Yield
Minnesota Insured Intermediate Municipal
Fund Fund Fund Bond Fund
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Average Duration 8.4 years 6.8 years 6.1 years 9.8 years
Average Effective Maturity* 11.7 years 9.7 years 8.5 years 18.2 years
Average Maturity** 20.1 years 18.1 years 12.6 years 23.9 years
Alternative Minimum Tax*** None 21.6% None 10.5%
- ------------------------------------------------------------------------------------------------
Current 30-Day SEC Yield+
Class A 4.53% (4.53%) 4.15% (4.15%) 4.23% (4.23%) 5.32% (4.94%)
Class B 3.95% (3.95%) 3.57% (3.57%) 3.49% (3.49%) 4.77% (4.38%)
Class C 3.94% (3.94%) 3.56% (3.56%) 3.49% (3.49%) 4.77% (4.38%)
- ------------------------------------------------------------------------------------------------
</TABLE>
*Average effective maturity takes into consideration all prepayments, puts
and adjustable coupons.
**Average maturity is the stated maturity on the bond and does not take into
account any prepayments.
***Percentage of income generated for the year ended August 31, 1999 that was
subject to the federal alternative minimum tax.
+Calculated according to Securities and Exchange Commission guidelines. An
expense limitation for each Fund was in effect for the period shown. Some
yields would have been lower without the limitation. Yields prior to expense
limitation are shown in parentheses.
<PAGE>
for tax-exempt
income
9
Having now taken back two of last fall's three rate cuts, the Fed did leave
open the possibility that it could raise rates a third time this year. We
believe they would do so if economic data showed inflationary pressure in the
form of a sharp decline in unemployment, further big wage increases or a
substantial rise in the Consumer Price Index, an index that tracks U.S.
inflationary levels in percentage points.
In the coming year, we think that municipal bond prices have the potential to
rise. Because municipal bonds are generally not subject to the ebb and flow of
foreign demand, like Treasuries, they have been far more stable the last two
years. According to Bloomberg, over the last two years as of August 31, the
price of 10-year Treasuries were three times as volatile as municipal bond
prices based on standard deviation. We believe more investors will flock to
municipal bonds in the months ahead and drive up demand.
If prices rise, state municipal bond mutual funds, such as any of our four
Delaware Minnesota Municipal Bond Funds, have the potential to rise in value. We
see the possibility of attractive capital appreciation considering that
municipal prices would have to rise significantly in order to push their yields
down to historical 85% yield levels as compared to Treasuries.
If U.S. economic growth slows modestly for the remainder of 1999, the Federal
Reserve is less likely to raise short-term rates. Bonds will likely breathe a
sigh of relief and long-term interest rates could fall. From an economic
perspective, we believe inflation remains tame. Municipal bonds, at their
reasonable current prices, should offer investors excellent value in the
remainder of 1999.
Regardless of market conditions, municipal bond funds have the potential to
offer valuable asset allocation benefits without adding to taxable investment
income. In our view, investors seeking to diversify their portfolios with less
volatile investments will find attractive opportunities in municipal bonds and
municipal bond funds.
REGARDLESS OF MARKET CONDITIONS, MUNICIPAL BOND FUNDS HAVE THE POTENTIAL TO
OFFER VALUABLE ASSET ALLOCATION BENEFITS WITHOUT ADDING TO TAXABLE INVESTMENT
INCOME.
outlook
<PAGE>
for tax-exempt
income
10
Performance Summary
DELAWARE TAX-FREE MINNESOTA FUND'S
LONG-TERM PERFORMANCE
Growth of a $10,000 Investment
August 31, 1989 to August 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aug-89 Aug-90 Aug-91 Aug-92 Aug-93 Aug-94 Aug-95 Aug-96 Aug-97 Aug-98 Aug-99
Lehman Brothers Municipal Bond Index $10,000 $10,643 $11,898 $13,197 $14,840 $14,861 $16,179 $17,026 $18,600 $20,208 $20,319
Lipper Minnesota Municipal Debt Fund
Average (12 funds) $10,000 $10,518 $11,633 $12,791 $14,248 $14,268 $15,282 $16,021 $17,348 $18,773 $18,671
Delaware Tax-Free Minnesota Fund A Class $ 9,622 $10,126 $11,181 $12,360 $13,804 $13,755 $14,714 $15,523 $16,956 $18,442 $18,244
</TABLE>
Chart assumes $10,000 investment on August 31, 1989, and includes the effect of
a 3.75% front-end sales charge and the reinvestment of all distributions. The
Lipper Average represents a peer group of municipal bond mutual funds from
Minnesota. The unmanaged Lehman Brothers Municipal Bond Index is comprised of
bonds with a variety of quality ratings from many states. You cannot invest
directly in an index. Performance for other classes will differ due to different
charges and expenses. Past performance does not guarantee future results.
DELAWARE TAX-FREE MINNESOTA FUND PERFORMANCE
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH AUGUST 31, 1999
Lifetime Ten Years Five Years One Year
Class A (Est. 2/27/84)
Excluding Sales Charge +8.29% +6.61% +5.80% -1.06%
Including Sales Charge +8.02% +6.20% +4.99% -4.79%
- --------------------------------------------------------------------------------
Class B (Est. 8/11/95)
Excluding Sales Charge +5.26% -1.74%
Including Sales Charge +4.88% -5.50%
- --------------------------------------------------------------------------------
Class C (Est. 5/4/94)
Excluding Sales Charge +5.04% +5.04% -1.80%
Including Sales Charge +5.04% +5.04% -2.74%
Performance for all Classes 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 deferred sales charges did not apply or the investment was not
redeemed. Returns reflect a voluntary expense limitation in effect at the time.
Returns would have been lower without the limitation.
Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred sales
charge of up to 4% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If shares are
redeemed within 12 months, a 1% contingent deferred sales charge applies.
<PAGE>
for tax-exempt
income
11
DELAWARE MINNESOTA INSURED FUND'S
LONG-TERM PERFORMANCE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Growth of a $10,000 Investment
August 31, 1989 to August 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aug-89 Aug-90 Aug-91 Aug-92 Aug-93 Aug-94 Aug-95 Aug-96 Aug-97 Aug-98 Aug-99
Lehman Brothers Municipal Bond Index $10,000 $10,643 $11,898 $13,197 $14,840 $14,861 $16,179 $17,026 $18,600 $20,208 $20,319
Lipper Minnesota Municipal Debt Fund
Average (12 funds) $10,000 $10,518 $11,633 $12,791 $14,246 $14,268 $15,282 $16,021 $17,348 $18,773 $18,671
Delaware Minnesota Insured Fund A Class $ 9,623 $10,116 $10,092 $12,363 $14,145 $14,029 $15,070 $15,874 $17,187 $18,585 $18,553
</TABLE>
Chart assumes $10,000 investment on August 31, 1989, and includes the effect of
a 3.75% front-end sales charge and the reinvestment of all distributions. The
Lipper Average represents a peer group of municipal bond mutual funds from
Minnesota. The unmanaged Lehman Brothers Municipal Bond Index is comprised of
bonds with a variety of quality ratings from many states. You cannot invest
directly in an index. Performance for other classes will differ due to different
charges and expenses. Past performance does not guarantee future results.
DELAWARE MINNESOTA INSURED FUND PERFORMANCE
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH AUGUST 31, 1999
Lifetime Ten Years Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 5/1/87)
Excluding Sales Charge +6.92% +6.63% +5.74% -0.17%
Including Sales Charge +6.59% +6.22% +4.93% -3.91%
- --------------------------------------------------------------------------------
Class B (Est. 3/7/95)
Excluding Sales Charge +5.12% -0.91%
Including Sales Charge +4.74% -4.72%
- --------------------------------------------------------------------------------
Class C (Est. 5/4/94)
Excluding Sales Charge +4.86% +4.95% -0.91%
Including Sales Charge +4.86% +4.95% -1.86%
Performance for all Classes 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 deferred sales charges did not apply or the investment was not
redeemed. Returns reflect a voluntary expense limitation in effect at the time.
Returns would have been lower without the limitation.
Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred sales
charge of up to 4% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If shares are
redeemed within 12 months, a 1% contingent deferred sales charge applies.
<PAGE>
for tax-exempt
income
12
DELAWARE TAX-FREE MINNESOTA INTERMEDIATE FUND'S
LONG-TERM PERFORMANCE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Growth of a $10,000 Investment
August 31, 1989 to August 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aug-89 Aug-90 Aug-91 Aug-92 Aug-93 Aug-94 Aug-95 Aug-96 Aug-97 Aug-98 Aug-99
Lehman Brothers Five-Year Municipal
Bond Index $10,000 $10,731 $11,840 $13,038 $14,213 $14,472 $15,618 $16,196 $17,267 $18,410 $18,723
Lipper Other States Intermediate
Municipal Debt Fund Average (29 funds) $10,000 $10,552 $11,474 $12,513 $13,535 $13,675 $14,651 $15,129 $16,153 $17,164 $17,034
Delaware Tax-Free Minnesota Intermediate
Fund A Class $ 9,725 $10,310 $11,141 $12,088 $12,992 $13,201 $14,128 $14,613 $15,543 $16,521 $16,498
</TABLE>
Chart assumes $10,000 investment on August 31, 1989, and includes the effect of
a 2.75% front-end sales charge and the reinvestment of all distributions. The
Lipper Average represents peer groups of municipal bond mutual funds from many
states. The unmanaged Lehman Brothers Municipal Bond Index is comprised of bonds
with a variety of quality ratings from many states. You cannot invest directly
in an index. Brothers Performance for other classes will differ due to different
charges and expenses. Past performance does not guarantee future results.
DELAWARE TAX-FREE MINNESOTA INTERMEDIATE FUND PERFORMANCE
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH AUGUST 31, 1999
Lifetime Ten Years Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 10/27/85)
Excluding Sales Charge +5.69% +5.41% +4.52% -0.14%
Including Sales Charge +5.48% +5.12% +3.94% -2.93%
- --------------------------------------------------------------------------------
Class B (Est. 8/15/95)
Excluding Sales Charge +3.36% -0.98%
Including Sales Charge +3.36% -2.89%
- --------------------------------------------------------------------------------
Class C (Est. 4/30/94)
Excluding Sales Charge +3.75% +3.71% -1.08%
Including Sales Charge +3.75% +3.71% -2.03%
Performance for all Classes 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 deferred sales charges did not apply or the investment was not
redeemed. Returns reflect a voluntary expense limitation in effect at the time.
Returns would have been lower without the limitation.
Class A shares have a 2.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred sales
charge of up to 2% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If shares are
redeemed within 12 months, a 1% contingent deferred sales charge applies.
<PAGE>
for tax-exempt
income
13
DELAWARE MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND'S
LIFETIME PERFORMANCE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Growth of a $10,000 Investment
JUNE 4, 1996 to August 31, 1999
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jun-96 Aug-96 Feb-97 Aug-97 Feb-98 Aug-98 Feb-99 Aug-99
Lipper High-Yield Municipal Debt Fund Average (36 funds) $10,000 $10,193 $10,707 $11,193 $11,623 $12,165 $12,333 $12,203
Lehman Brothers Municipal Bond Index $10,000 $10,088 $10,606 $11,021 $11,575 $11,974 $12,287 $12,039
Delaware Minnesota High-Yield Municipal Bond Fund A Class $ 9,625 $ 9,730 $10,260 $10,754 $11,421 $11,676 $12,105 $11,844
</TABLE>
Chart assumes $10,000 investment on June 4, 1996, and includes the effect of a
3.75% front-end sales charge and the reinvestment of all distributions. The
Lipper Average represents peer groups of municipal bond mutual funds from many
states. The unmanaged Lehman Brothers Municipal Bond Index is comprised of bonds
with a variety of quality ratings from many states. You cannot invest directly
in an index. Performance for other classes will differ due to different charges
and expenses. Past performance does not guarantee future results.
DELAWARE MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND PERFORMANCE
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH AUGUST 31, 1999
Lifetime Three Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 6/4/96)
Excluding Sales Charge +6.65% +6.77% -0.27%
Including Sales Charge +5.40% +5.41% -4.00%
- --------------------------------------------------------------------------------
Class B (Est. 6/12/96)
Excluding Sales Charge +6.60% +5.95% -0.99%
Including Sales Charge +5.79% +5.05% -4.77%
- --------------------------------------------------------------------------------
Class C (Est. 6/7/96)
Excluding Sales Charge +5.91% +5.99% -0.99%
Including Sales Charge +5.91% +5.99% -1.93%
Performance for all Classes 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 deferred sales charges did not apply or the investment was not
redeemed. Returns reflect a voluntary expense limitation in effect at the time.
Returns would have been lower without the limitation.
Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred sales
charge of up to 4% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If shares are
redeemed within 12 months, a 1% contingent deferred sales charge applies.
<PAGE>
14 for tax-exempt income
Financial Statements
VOYAGEUR TAX-FREE FUNDS, INC. - DELAWARE TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1999
------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS - 99.66%
CONTINUING CARE/RETIREMENT REVENUE BONDS - 0.90%
Minnesota Agriculture & Economic Development
Board Revenue Healthcare - Benedictine
Health Systems 5.75% 2/1/29 .................... $1,195,000 $1,085,275
New Hope Minnesota Housing & Health -
Minnesota Masonic Home North Ridge Care
Facility 5.875% 3/1/29 ......................... 1,500,000 1,396,140
Spring Park Minnesota Twin Birch Health Care
Center (Guarantor: Presbyterian Homes of
Minnesota) 8.25% 8/1/11 ........................ 600,000 635,934
Springfield St. John's Lutheran Home Revenue
8.50% 11/1/19 .................................. 600,000 620,298
----------
3,737,647
----------
GENERAL OBLIGATION BONDS - 14.00%
Dakota County, Capital Improvement
Series C 4.85% 2/1/10 .......................... 1,000,000 984,710
Farmington Independent School District
Number 192 Capital Appreciation Series B
(FSA) Zero Coupon 2/1/20 ....................... 2,650,000 816,809
Farmington Independent School District
Number 192 Capital Appreciation Series B
(FSA) Zero Coupon 2/1/21 ....................... 2,500,000 727,400
Hennepin County 5.75% 10/1/10 ..................... 7,990,000 8,370,644
Hutchinson Independent School District
Series A (MN School District Enhanced)
5.85% 2/1/18 ................................... 1,700,000 1,744,149
Lakeville Independent School District #194 Capital
Appreciation Series B (FSA) Zero Coupon
2/1/19 ......................................... 8,000,000 2,622,080
**Lakeville Independent School District #194,
Inverse Floater (MBIA) 6.47% 2/1/15 ............ 4,250,000 3,982,250
Mahtomedi Independent School District #832
Series B (MBIA) Zero Coupon 2/1/14 ............. 1,540,000 703,611
**Minneapolis Convention Center Facilities,
Inverse Floater 6.97% 4/1/14 ................... 850,000 862,580
**Minneapolis Sports Arena Project,
Inverse Floater 6.33% 10/1/20 .................. 4,220,000 3,772,933
**Minneapolis Sports Arena Project,
Inverse Floater 6.37% 4/1/14 ................... 580,000 551,476
Minneapolis Unlimited Tax Series 1992
6.30% 10/1/08 .................................. 1,750,000 1,852,585
**Minnesota State Inverse Floater ROLS
6.44% 11/1/16 .................................. 4,420,000 4,013,669
**Minnesota State Inverse Floater ROLS
6.44% 11/1/17 .................................. 1,135,000 994,578
**Minnesota State Inverse Floater ROLS
6.44% 11/1/18 .................................. 1,145,000 996,448
Minnetonka Independent School District #276
(FSA) 5.75% 2/1/22 ............................. 4,550,000 4,628,579
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
GENERAL OBLIGATION BONDS (CONTINUED)
**North St. Paul Maplewood Independent School
District #622, Inverse Floater 6.42% 2/1/20 ... $2,250,000 $ 2,005,222
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 .................................. 1,000,000 829,810
Puerto Rico Commonwealth Public Improvement
5.25% 7/1/18 .................................. 1,250,000 1,219,262
Rochester Tax Increment 6.50% 12/1/04 ........... 1,000,000 1,006,040
**Rosemount - Apple Valley Independent School
District #196 Inverse Floater (FSA)
7.92% 4/1/15 .................................. 4,000,000 4,205,440
Rosemount Independent School District #196 (FSA)
Zero Coupon 4/1/12 ............................ 1,850,000 939,541
Rosemount Independent School District #196 (FSA)
Zero Coupon 4/1/13 ............................ 1,915,000 921,555
**Rosemount Independent School District #196,
Inverse Floater 5.875% 4/1/15 ................. 1,375,000 1,432,296
Rosemount Independent School District #196
Series B (FSA) Zero Coupon 4/1/11 ............. 2,600,000 1,404,572
Sartell Independent School District #748 (MBIA)
Zero Coupon 2/1/13 ............................ 540,000 262,208
Sartell Independent School District #748 (MBIA)
Zero Coupon 2/1/15 ............................ 1,075,000 461,702
Sartell Independent School District #748 (MBIA)
Zero Coupon 2/1/16 ............................ 1,750,000 705,845
Sartell Independent School District #748 (MBIA)
Zero Coupon 2/1/17 ............................ 1,600,000 605,456
**Spring Lake Park Independent School District #16,
Inverse Floater (MBIA) 6.57% 2/1/17 ........... 1,000,000 956,530
St. Paul Minnesota Tax Increment - Block 39
Project A 4.75% 2/1/25 ........................ 2,000,000 1,710,720
Washington County Ref, Series 92A
5.90% 2/1/10 .................................. 1,680,000 1,724,990
-----------
58,015,690
-----------
HIGHER EDUCATION REVENUE BONDS - 4.74%
Minnesota Higher Education Augsburg College Series
4F1 6.25% 5/1/23 ............................... 1,000,000 1,009,870
Minnesota Higher Education Facilities Revenue
Hamline University 6.00% 10/1/12 ............... 1,250,000 1,270,075
Minnesota Higher Education Facilities Revenue
Hamline University 6.00% 10/1/16 ............... 1,790,000 1,795,012
Minnesota Higher Education for Carleton College
5.75% 11/1/12 .................................. 4,000,000 4,101,840
Minnesota Higher Education St. Benedict's College
6.20% 3/1/16 ................................... 1,000,000 1,021,390
Minnesota Higher Education St. Thomas University
Series R2 5.60% 9/1/14 ......................... 1,000,000 1,008,600
University of Minnesota Series A 5.50% 7/1/21 ... 9,500,000 9,439,485
-----------
19,646,272
-----------
<PAGE>
DELAWARE TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS - 19.54%
Bemidji Hospital Facilities Revenue for North County
Health 6.05% 9/1/16 ............................. $ 600,000 $ 613,278
Bemidji Hospital Facilities Revenue for North County
Health 6.05% 9/1/24 ............................. 1,825,000 1,836,826
Brainerd Benedictine Health Care Systems for
St. Joseph's Hospital (Connie Lee)
6.00% 2/15/12 ................................... 2,250,000 2,364,952
Duluth Economic Development Authority Benedictine
for St. Luke's Hospital (Connie Lee)
6.40% 5/1/18 .................................... 3,295,000 3,461,068
Duluth Economic Development Authority St. Luke's
Hospital (Connie Lee) 6.00% 2/15/20 ............. 9,450,000 9,651,757
Little Canada Health Care 1992 (Presbyterian
Homes Guaranteed) 7.25% 7/1/12 .................. 1,000,000 1,036,210
Minneapolis Fairview Hospital Series 91B (MBIA)
6.50% 1/1/11 .................................... 3,000,000 3,164,550
**Minneapolis/St. Paul Housing & Redevelopment
Authority Children's Hospital Healthcare, Inverse
Floater 7.07% 8/15/25 ........................... 6,500,000 6,125,730
Minneapolis/St. Paul Housing & Redevelopment
Authority Health Care System for Healthspan
Series A (AMBAC) 4.75% 11/15/18 ................. 3,300,000 2,908,587
Minneapolis/St. Paul Housing & Redevelopment
Authority HealthOne (MBIA) 7.40% 8/15/11 ........ 1,360,000 1,432,515
Robbinsdale North Memorial Medical (AMBAC)
5.50% 5/15/23 ................................... 10,725,000 10,447,008
**Rochester Health Care Facilities Revenue
5.50% 11/15/27 .................................. 3,000,000 2,907,870
Rochester Health Care Facilities Revenue Mayo
Foundation Series B 5.50% 11/15/27 .............. 5,000,000 4,846,450
Rochester Health Care Facilities Revenue Reg IRS
for Mayo Clinic, Series H Inverse Floater
8.07% 11/15/15 .................................. 3,500,000 3,726,065
St. Cloud Hospital Facilities Revenue (AMBAC)
5.30% 10/1/20 ................................... 7,250,000 6,973,848
St. Louis Park Commercial Development Revenue
for - G & N, L P Project (Methodist Hospital
Guaranteed) 7.25% 6/1/13 ........................ 1,120,000 1,165,696
St. Louis Park Methodist Hospital (AMBAC)
5.20% 7/1/23 .................................... 10,220,000 9,557,642
St. Paul Housing & Redevelopment Hospital
Revenue for Health East Series A
6.63% 11/1/17 ................................... 8,680,000 8,724,615
-----------
80,944,667
-----------
HOUSING REVENUE BONDS - 18.65%
Austin Housing & Redevelopment Authority
Courtyard Residence Series 95A
7.25% 1/1/26 .................................... 500,000 533,690
Bloomington Housing & Redevelopment Authority
Senior Summerhouse Bloomington Project
6.13% 5/1/35 .................................... 3,420,000 3,269,793
Brooklyn Center Multifamily Housing Revenue Bonds
Family Housing Project Section 8
5.90% 1/1/20 .................................... 2,250,000 2,266,290
<PAGE>
for tax-exempt income 15
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Burnsville Multifamily Bridgeway Apartments
(FHA) 7.63% 2/1/24 ............................. $3,370,000 $3,495,768
Burnsville Multifamily Coventry Court Apartments
Project (FHA) 7.50% 9/1/17 ..................... 1,000,000 1,020,210
Carver County Housing & Redevelopment
Authority Multifamily Revenue Lake Grace
Apartments 6.00% 7/1/28 ........................ 1,435,000 1,446,509
Dakota County Housing & Redevelopment Authority
Multifamily Revenue, Affordable Housing View
Pointe Project 6.125% 11/1/17 .................. 2,475,000 2,366,496
Dakota County Housing & Redevelopment Authority
Single Family (GNMA) 8.10% 3/1/16 .............. 45,000 46,294
Eagan Multifamily Revenue for Forest Ridge
Apartments Project (FHA) 7.50% 9/1/17 .......... 1,000,000 1,022,700
Eden Prairie Multifamily Homes Tanager Creek
(GNMA) 8.05% 6/20/31 ........................... 7,605,000 8,499,120
Eden Prairie Multifamily Revenue, Eden Investments
(FHA) 7.40% 8/1/25 ............................. 400,000 413,092
Eden Prairie Multifamily Windslope Apartments
Section 8 Housing 7.10% 11/1/17 ................ 1,585,000 1,652,648
Edina Park Plaza Multifamily Housing (FHA)
7.50% 12/1/09 .................................. 1,395,000 1,428,661
Edina Park Plaza Multifamily Housing (FHA)
7.70% 12/1/28 .................................. 1,250,000 1,278,487
Hopkins Renaissance Multifamily Housing Section 8
6.375% 4/1/20 .................................. 1,000,000 1,022,650
Little Canada Multifamily Housing Revenue Housing
Alternative Development Company Project
Series A 6.10% 12/1/17 ......................... 1,650,000 1,631,933
Little Canada Multifamily Housing Revenue Housing
Alternative Development Company Project
Series A 6.25% 12/1/27 ......................... 2,900,000 2,880,628
Minneapolis Housing Facility Revenue for Augustana
Chapel View Project Series 1993
7.00% 4/1/18 ................................... 1,000,000 1,011,030
Minneapolis Multifamily Mortgage for Seward Towers
Project (GNMA) 7.375% 12/20/30 ................. 4,000,000 4,126,040
Minneapolis-Nicollet Towers Multifamily Housing
6.00% 12/1/19 .................................. 2,000,000 2,039,560
Minnesota Housing Finance Agency Multifamily
Housing 6.95% 2/1/14 ........................... 1,500,000 1,563,705
Minnesota Housing Finance Agency Multifamily
Housing Series 92A 6.95% 8/1/17 ................ 745,000 780,469
Minnesota Housing Finance Agency Rental Housing
Series B 6.25% 8/1/22 .......................... 935,000 938,011
Minnesota Housing Finance Agency Single Family
Mortgage Series 91C 7.10% 7/1/11 ............... 520,000 539,047
Minnetonka Multifamily Beacon Hill Project
(Presbyterian Homes Guaranteed)
7.70% 6/1/25 ................................... 2,000,000 2,112,340
Oakdale Housing Oak Meadows Project
7.00% 4/1/27 ................................... 6,800,000 7,129,392
Park Rapids Multifamily Revenue The Court
Apartments Project Section 8 6.30% 2/1/20 ...... 3,210,000 3,130,681
<PAGE>
16 for tax-exempt income
DELAWARE TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Rochester Minnesota Multifamily Revenue, Wedum
Shorewood Campus 6.60% 6/1/36 .................. $ 2,000,000 $ 2,040,700
St. Louis Park Minnesota Residential Mortgage
Revenue for Single Family (GNMA)
7.25% 4/20/23 .................................. 977,000 1,011,498
St. Louis Park Multifamily Housing Revenue
Community Housing (FHA) 6.25% 12/1/28 .......... 3,855,000 3,969,802
St. Louis Park Multifamily Westwind Apartments
Housing (GNMA) 5.75% 1/1/29 .................... 3,865,000 3,884,982
St. Paul Housing & Redevelopment Agency
(Executive Life Guaranteed Investment Contract)
Como Lake Project (FHA) 7.50% 3/1/26 ........... 1,000,000 980,000
St. Paul Housing & Redevelopment Single Family
Mortgage (FNMA) 6.90% 12/1/11 .................. 38,000 38,425
St. Paul Housing & Redevelopment Single Family
Mortgage (FNMA) 6.90% 12/1/21 .................. 1,365,000 1,419,054
Stillwater Multifamily Housing Stillwater Cottages
7.00% 11/1/27 .................................. 1,000,000 999,870
Wadena Housing & Redevelopment Agency Humphrey
Manor - (Section 8) 6.00% 2/1/19 ............... 2,130,000 2,155,177
Washington County Housing & Redevelopment Authority
Revenue Briar Pond - Series C (GNMA)
7.25% 8/20/34 .................................. 1,020,000 992,225
Wells Housing & Redevelopment Agency Broadway
Apartment Project Section 8 7.00% 1/1/19 ....... 1,040,000 1,074,008
Willmar Housing & Redevelopment Agency Highland
Apartments Section 8 5.85% 6/1/19 .............. 1,050,000 1,056,426
-----------
77,267,411
-----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 8.28%
Andover Development Revenue Downtown Center
Project Series A 7.00% 12/1/12 ................. 1,000,000 1,038,150
Anoka Resource Recovery Revenue for Northern States
Power Co Series 85 7.15% 12/1/08 ............... 1,000,000 1,025,560
Becker Pollution Control Revenue for Northern
States Power Co Series 89A 6.80% 4/1/07 ........ 2,000,000 2,043,740
Cloquet Pollution Control Revenue for Potlatch
Corporation 5.90% 10/1/26 ...................... 15,000,000 14,779,800
East Grand Forks for American Crystal Sugar
Pollution Control Revenue 7.75% 4/1/18 ......... 1,230,000 1,297,035
International Falls Pollution Control Revenue
Boise Cascade Project 5.65% 12/1/22 ............ 1,500,000 1,378,260
Richfield Commercial Development Revenue for
Richfield Shoppes 8.375% 10/1/13 ............... 2,200,000 2,444,530
Seaway Port Authority Duluth Minnesota Industrial
Development Dock & Wharf Revenue Cargill Project
Series E 6.125% 11/1/14 ........................ 4,500,000 4,694,490
St. Cloud Commercial Development Revenue for
Northwest Center Association 7.50% 8/1/12 ...... 4,118,971 4,267,130
St. Paul Port Authority Commercial Development
Revenue Fort Rd Medical (Asset Gty)
7.50% 9/1/02 ................................... 1,300,000 1,316,770
-----------
34,285,465
-----------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------
MUNICIPAL BONDS (CONTINUED)
LEASE/CERTIFICATES OF PARTICIPATION - 0.64%
Beltrami County Housing & Redevelopment
Authority Revenue 6.20% 2/1/14 ................ $ 1,010,000 $ 1,042,219
West St. Paul Commercial Mortgage K-Mart Lease
7.00% 11/1/07 ................................. 1,527,044 1,623,263
-----------
2,665,482
-----------
Power Authority Revenue Bonds - 18.15%
Bass Brook Pollution Control Revenue for
Minnesota Power & Light 6.00% 7/1/22 .......... 17,490,000 17,655,805
Bass Brook Pollution Control Revenue for
Minnesota Power & Light Company (MBIA)
6.00% 7/1/22 .................................. 1,750,000 1,809,710
Northern Minnesota Municipal Power Agency
Electric Systems (AMBAC) 4.75% 1/1/20 ......... 5,100,000 4,481,727
Northern Minnesota Municipal Power Agency
(AMBAC) Zero Coupon 1/1/09 .................... 3,815,000 2,369,840
Northern Minnesota Municipal Power Agency Electric
System Revenue (AMBAC) 5.50% 1/1/18 ........... 9,200,000 9,136,244
Northern Minnesota Municipal Power Agency (FSA)
5.25% 1/1/13 .................................. 4,000,000 3,969,440
Northern Minnesota Municipal Power Agency Electric
Systems Revenue (FSA) 5.40% 1/1/15 ............ 2,000,000 1,993,640
**Puerto Rico Electric Power Authority Revenue
Series DD Inverse Floater ROLS (FSA)
5.56% 7/1/19 .................................. 3,050,000 2,276,428
Puerto Rico Electric Power Authority Series EE
4.75% 7/1/24 .................................. 5,000,000 4,301,600
Puerto Rico Electric Power Authority Series X
5.50% 7/1/25 .................................. 2,930,000 2,870,404
Puerto Rico Electric Power Authority Series Z
5.25% 7/1/21 .................................. 1,500,000 1,414,395
Southern Minnesota Municipal Power Agency
(FGIC) 5.75% 1/1/18 ........................... 2,000,000 2,017,140
Southern Minnesota Municipal Power Agency
(MBIA) 4.75% 1/1/16 ........................... 7,200,000 6,500,088
Southern Minnesota Municipal Power Agency
(MBIA) 5.75% 1/1/18 ........................... 7,770,000 7,836,589
Southern Minnesota Municipal Power Agency
(MBIA) Zero Coupon 1/1/19 ..................... 8,210,000 2,734,422
Southern Minnesota Municipal Power Agency
(MBIA) Zero Coupon 1/1/21 ..................... 5,000,000 1,473,950
Southern Minnesota Municipal Power Agency Power
Supply System Revenue Capital Appreciation -
Series A Zero Coupon 1/1/27 ................... 1,180,000 243,446
Southern Minnesota Municipal Power Agency
Supply System (AMBAC) 5.50% 1/1/15 ............ 1,560,000 1,564,867
Western Municipal Power Agency Revenue
6.125% 1/1/16 ................................. 525,000 525,478
-----------
75,175,213
-----------
for tax-exempt income 17
<PAGE>
DELAWARE TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
-----------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------------------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS - 11.82%
Albert Lea St. John's Luthern Home Project
8.50% 11/1/19-99 ..................................$ 1,000,000 $ 1,037,510
Blaine Industrial Development Revenue (Ball Corp.)
(Escrowed to Maturity) 8.25% 12/1/99 .............. 250,000 252,802
Blaine Industrial Development Revenue (Ball Corp.)
(Escrowed to Maturity) 8.25% 12/1/00 .............. 300,000 315,597
Bloomington Tax Increment
(Escrowed to Maturity) 9.75% 2/1/08 ............... 500,000 618,830
Brainerd Independent School District #181
7.00% 6/1/11-01 ................................... 390,000 407,078
Faribault Independent School District #656
(MN School District Credit Enhanced)
6.10% 6/1/10-04 ................................... 1,000,000 1,058,830
Glencoe/Mcleod County Health Care
8.50% 12/1/15-00 .................................. 500,000 527,500
Kenyon Wanamingo Independent School District
(MBIA) 6.00% 2/1/18-05 ............................ 2,350,000 2,481,717
Maplewood Independent School District #622
(FSA) 7.10% 2/1/25-05 ............................. 10,000,000 11,174,900
Minneapolis Health Care American Baptist Homes
8.70% 11/1/09-01 .................................. 2,485,000 2,760,562
Minnesota Public Facilities Authority Water
Pollution Control 6.25% 3/1/16-05 ................. 4,400,000 4,744,520
Minnesota Public Facilities Authority Water
Pollution Control 6.95% 3/1/13-01 ................. 5,220,000 5,534,140
Minnesota Public Facilities Authority Water
Pollution Control Series 90A
7.10% 3/1/12-00 ................................... 1,990,000 2,062,735
Owatanna Public Utilities 6.75% 1/1/16-01 ............ 1,000,000 1,033,570
Pine Island Independent School District #255
(FSA) 6.625% 6/1/12-01 ............................ 240,000 249,014
Pine Island Independent School District #255
(FSA) 6.625% 6/1/13-01 ............................ 310,000 321,644
Pine Island Independent School District #255
(FSA) 6.625% 6/1/14-01 ............................ 330,000 342,395
Pine Island Independent School District #255
(FSA) 6.625% 6/1/15-01 ............................ 355,000 368,334
Pine Island Independent School District #255
(FSA) 6.625% 6/1/16-01 ............................ 380,000 394,273
Plainview Independent School District #810
6.70% 2/1/06-03 ................................... 385,000 408,739
Plainview Independent School District #810
6.75% 2/1/08-03 ................................... 445,000 473,133
Plainview Independent School District #811
6.75% 2/1/07-03 ................................... 420,000 446,552
Red Wing Housing & Redevelopment Agency
Jordan Tower Section 8 Series 92
7.00% 1/1/19-02 ................................... 1,500,000 1,613,415
**Richfield Independent School District #280
Series C, Inverse Floater 5.34% 2/1/15-03 ......... 1,365,000 1,435,229
Southern Minnesota Municipal Power Agency Revenue
(Escrowed to Maturity) (MBIA) 5.75% 1/1/18 ........ 1,000,000 1,019,580
Southern Minnesota Municipal Power Agency Supply
System (Escrowed to Maturity) (AMBAC)
5.50% 1/1/15 ...................................... 990,000 1,024,195
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------------------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS (CONTINUED)
St. Cloud Housing & Redevelopment Agency
Housing Revenue Northway A&B Project -
Section 8 7.50% 12/1/18-00 ........................ $2,045,000 $2,171,872
St. Louis Park Methodist Hospital (AMBAC)
7.25% 7/1/18-00 ................................... 775,000 812,727
Stillwater Independent School District #834
(MBIA) 5.75% 2/1/15-05 ............................ 2,000,000 2,088,540
University of Minnesota Series A (Escrowed to
Maturity) 6.00% 2/1/11 ............................ 1,500,000 1,509,495
Western Minnesota Municipal Power Agency Revenue
(Escrowed to Maturity) (MBIA) 9.75% 1/1/16 ........ 185,000 268,211
------------
48,957,639
------------
WATER & SEWER REVENUE BONDS - 1.55%
Minnesota Public Facilities Authority Water Revenue
4.75% 3/1/19 ...................................... 2,000,000 1,769,500
Puerto Rico Aqueduct & Sewer Authority
5.00% 7/1/15 ...................................... 2,000,000 1,891,020
Puerto Rico Aqueduct & Sewer Authority
5.00% 7/1/19 ...................................... 3,000,000 2,755,560
------------
6,416,080
------------
OTHER REVENUE BONDS - 1.39%
Minneapolis Community Development Agency Common
Bond Fund 7.40% 12/1/21 ........................... 795,000 850,404
Minneapolis Community Development Agency Common
Bond Fund 7.95% 12/1/11 ........................... 855,000 923,374
Minneapolis Community Development Agency Common
Bond Fund Opportunity Workshop Project
Series 2A 7.125% 12/1/05 .......................... 510,000 541,544
Minneapolis Community Development Agency Tax
Increment Revenue Zero Coupon 9/1/09 .............. 5,750,000 3,452,358
------------
5,767,680
------------
Total Municipal Bonds (cost $400,487,340) ............ 412,879,246
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.66%
(COST $400,487,340) ............................... $412,879,246
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.34% 1,390,660
------------
NET ASSETS APPLICABLE TO 33,862,734 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ............ $414,269,906
============
NET ASSET VALUE - TAX-FREE MINNESOTA FUND A CLASS
($394,144,332 / 32,218,774 SHARES) ................ $12.23
======
NET ASSET VALUE - TAX-FREE MINNESOTA FUND B CLASS
($13,311,925 / 1,087,758 SHARES) .................. $12.24
======
NET ASSET VALUE - TAX-FREE MINNESOTA FUND C CLASS
($6,813,649 / 556,202 shares) ..................... $12.25
======
- ----------------------
* 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 as of August 31, 1999.
<PAGE>
18 for tax-exempt income
DELAWARE TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
Asset Gty - Insured by the Asset Guaranty Insurance Company
Connie Lee - Insured by College Construction Insurance Association
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
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT AUGUST 31, 1999:
Common stock, $.01 par value, 10,000,000,000 shares authorized
to the Fund with 1,000,000,000 shares allocated to Tax-Free
Minnesota Fund A Class, 1,000,000,000 shares allocated to
Tax-Free Minnesota Fund B Class, and 1,000,000,000 shares
allocated to Tax-Free Minnesota Fund C Class ................. $402,373,901
Accumulated net realized loss on investments .................... (495,901)
Net unrealized appreciation of investments ...................... 12,391,906
------------
Total net assets ................................................ $414,269,906
============
NET ASSET VALUE AND OFFERING PRICE FOR
TAX-FREE MINNESOTA FUND A CLASS
Net asset value per share (A) ................................... $12.23
Sales charge (3.75% of offering price or 3.92% of
amount invested per share) (B) ............................... 0.48
------------
Offering price .................................................. $12.71
============
- ----------------------
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See Purchasing Shares in the current prospectus for purchases of $100,000 or
more for Tax-Free Minnesota Fund A Class.
See accompanying notes
<PAGE>
VOYAGEUR INSURED FUNDS, INC.
DELAWARE MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1999
-----------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------------------------------------
MUNICIPAL BONDS - 98.93%
GENERAL OBLIGATION BONDS - 16.00%
Anoka County Capital Improvement Series C (FGIC)
5.90% 2/1/11 .................................... $8,045,000 $8,199,786
Becker Refunding Tax Increment Series D (MBIA)
(AMT) 6.25% 8/1/15 .............................. 6,300,000 6,427,323
Dakota County Refunding Series B (AMBAC)
6.40% 2/1/08 .................................... 1,135,000 1,147,689
Dakota County Refunding Series B (AMBAC)
6.45% 2/1/09 .................................... 1,000,000 1,011,380
Dakota County Refunding Series B (AMBAC)
6.45% 2/1/10 .................................... 2,500,000 2,528,450
**Eden Prairie Independent School District #272
Inverse Floater (FGIC) 6.42% 2/1/14 ............. 1,125,000 1,077,908
**Eden Prairie Independent School District #272,
Inverse Floater (MBIA) 6.42% 2/1/15 ............. 1,000,000 946,090
Hennepin County Ref Solid Waste IBC (MBIA)
5.75% 10/1/10 ................................... 1,800,000 1,869,606
Hopkins Independent School District #270 (MBIA)
4.875% 2/1/14 ................................... 1,875,000 1,784,419
Lakeville Independent School District #194 Capital
Appreciation Series B (FSA)
Zero Coupon 2/1/15 .............................. 2,455,000 1,035,593
Lakeville Independent School District #194 Capital
Appreciation Series B (FSA) Zero Coupon 2/1/17 .. 2,490,000 921,723
**North Branch Independent School District #138,
Inverse Floater (FGIC) 7.07% 2/1/11 ............. 965,000 1,032,772
**Prior Lake Independent School District #719,
Inverse Floater (FGIC) 6.32% 2/1/14 ............. 1,000,000 964,090
Rosemount Independent School District #196 (FSA)
Zero Coupon 4/1/09 .............................. 1,860,000 1,139,696
Rosemount Independent School District #196
Series B (FSA) Zero Coupon 4/1/10 ............... 2,240,000 1,290,733
South Washington County Independent School
District #883 (FGIC) 6.125% 6/1/09 .............. 1,430,000 1,464,106
South Washington County Independent School
District #883 (FGIC) 6.125% 6/1/11 .............. 2,720,000 2,786,694
**Spring Lake Park Independent School District #16,
Inverse Floater (MBIA) 6.57% 2/1/14 ............. 2,175,000 2,120,995
St. Cloud Independent School District #742 (FGIC)
6.05% 2/1/09 .................................... 1,000,000 1,033,140
St. Francis Independent School District #15 (FGIC)
5.90% 4/1/10 .................................... 1,845,000 1,896,881
Stillwater Independent School District #834 (FGIC)
5.50% 2/1/10 .................................... 2,995,000 3,026,448
Western Lake Superior Series A (MBIA) (AMT)
6.00% 10/1/08 ................................... 400,000 420,936
Western Lake Superior Series A (MBIA) (AMT)
6.10% 10/1/09 ................................... 425,000 447,406
Western Lake Superior Series A (MBIA) (AMT)
6.20% 10/1/10 ................................... 450,000 473,648
Western Lake Superior Series A (MBIA) (AMT)
6.20% 10/1/11 ................................... 475,000 499,710
----------
45,547,222
----------
<PAGE>
for tax-exempt income 19
DELAWARE MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
-----------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------------------------------
HOSPITAL REVENUE BONDS - 18.54%
Bloomington Masonic Home Care Center
(AMBAC) 5.90% 7/1/09 .............................. $1,250,000 $1,308,063
Brainerd Benedictine Health Care Systems for
St. Joseph's Hospital (Connie Lee)
6.00% 2/15/12 ..................................... 1,500,000 1,576,635
Brainerd Benedictine Health Care Systems for
St. Joseph's Hospital (Connie Lee)
6.00% 2/15/20 ..................................... 2,000,000 2,042,700
Duluth Economic Development Authority Benedictine
for St. Luke's Hospital (Connie Lee)
6.40% 5/1/18 ...................................... 500,000 525,200
**Duluth Economic Development Authority Health Care
Revenue for St. Mary's Hospital, Inverse Floater
(Connie Lee) 8.17% 2/15/17 ........................ 5,000,000 5,677,600
Duluth Economic Development Authority St. Luke's
Hospital (Connie Lee) 6.00% 2/15/20 ............... 1,300,000 1,327,755
Duluth Economic Development Authority St. Luke's
Hospital (Connie Lee) 6.40% 5/1/10 ................ 3,335,000 3,528,764
Minneapolis Fairview Hospital Series 91B (MBIA)
6.50% 1/1/11 ...................................... 3,000,000 3,164,550
Minneapolis Health Care Facility Revenue Fairview
Hospital & Healthcare Series A (MBIA)
5.25% 11/15/19 .................................... 2,750,000 2,621,438
**Minneapolis/St. Paul Housing & Redevelopment
Authority Children's Hospital, Inverse Floater
(FSA) 7.47% 8/15/16 ............................... 1,310,000 1,339,108
Minneapolis/St. Paul Housing & Redevelopment
Authority HealthOne (MBIA) 7.40% 8/15/05 .......... 600,000 631,992
Minneapolis/St. Paul Housing & Redevelopment
Authority HealthOne (MBIA) 7.40% 8/15/11 .......... 2,370,000 2,496,368
Minneapolis/St. Paul Housing & Redevelopment
Authority Health Care Systems for Healthspan
Series 93A (FSA) 5.00% 11/15/13 ................... 6,490,000 6,278,029
Minneapolis/St. Paul Housing & Redevelopment
Authority Health Care System for Healthspan
Series A (AMBAC) 4.75% 11/15/18 ................... 4,000,000 3,525,560
Minnesota Agricultural & Economic Development
Fairview Hospital Series 97A (MBIA)
5.75% 11/15/26 .................................... 8,250,000 8,261,798
Robbinsdale North Memorial Medical (AMBAC)
5.50% 5/15/23 ..................................... 5,400,000 5,260,032
**St. Louis Park Health Care for Methodist Hospital,
Inverse Floater (AMBAC) 6.57% 7/1/23 .............. 2,500,000 2,179,650
St. Paul Ramsey Medical (AMBAC)
5.50% 5/15/13 ..................................... 1,000,000 1,005,740
----------
52,750,982
----------
HOUSING REVENUE BONDS - 17.98%
Chaska Waters Edge Multifamily Revenue
(GNMA) 7.30% 1/20/30 .............................. 3,257,000 3,504,923
Dakota County Housing & Redevelopment Authority
Single Family Mortgage Revenue (FNMA/GNMA)
5.85% 10/1/30 ..................................... 6,984,000 6,973,664
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Dakota County Housing & Redevelopment Authority
Single Family Mortgage Revenue (FNMA)
6.70% 10/1/17 .................................... $3,425,000 $3,569,604
Dakota, Washington & Stearns Counties Housing &
Redevelopment Authority Single Family Mortgage
Revenue (MBIA) 7.85% 12/1/30 ..................... 115,000 118,336
Eagan Multifamily Revenue Woodridge Apartments
(GNMA) 5.90% 8/1/20 .............................. 1,000,000 1,019,460
Hopkins Multifamily Housing Auburn Apartments
(GNMA) 8.05% 6/20/31 ............................. 3,790,000 4,155,508
Minneapolis/St. Paul Housing Finance Board Housing
Project Phase V (GNMA) 8.875% 11/1/18 ............ 45,000 45,564
Minneapolis/St. Paul Housing Finance Board Housing
Project Phase IX (GNMA) 7.25% 8/1/21 ............. 945,000 984,350
Minneapolis/St. Paul Housing Finance Board Housing
Project Phase IX (GNMA) 7.30% 8/1/31 ............. 645,000 670,336
Minneapolis/St. Paul Housing Finance Board Single
Family Mortgage Revenue (GNMA)
8.125% 12/1/14 ................................... 100,000 101,403
Minneapolis/St. Paul Housing Finance Board Single
Family Mortgage Revenue (GNMA)
8.30% 8/1/21 ..................................... 65,000 65,335
Minneapolis/St. Paul Minnesota Housing Finance
Board Single Family Mortgage-Project Phase XI
(GNMA) 5.80% 11/1/30 ............................. 2,705,000 2,674,001
Minnesota Housing Finance Agency Single Family
Housing Rental (AMBAC) 5.95% 2/1/15 .............. 2,325,000 2,378,057
Minnesota Housing Finance Agency Single Family
Housing Rental (MBIA) 5.95% 2/1/18 ............... 6,490,000 6,602,666
Minnesota Housing Finance Agency Single Family
Housing Rental Series A (AMBAC) (AMT)
5.875% 8/1/28 .................................... 2,610,000 2,626,391
Minnesota State Housing Finance Agency Single
Family Housing Rental Series D (AMBAC) (AMT)
5.80% 7/1/21 ..................................... 4,085,000 4,102,116
Minnesota Housing Finance Agency Single Family
Mortgage Revenue Series A (AMBAC)
7.05% 7/1/22 ..................................... 375,000 387,379
Minnesota Housing Finance Agency Single Family
Mortgage Revenue Series A (AMBAC)
7.45% 7/1/22 ..................................... 830,000 857,481
Minnetonka Multifamily Housing Cedar Hills Project
Cedar Hills East (FHA) 7.50% 12/1/17 ............. 400,000 412,640
Minnetonka Multifamily Housing Cedar Hills Project
Cedar Hills East (FHA) 7.50% 12/1/27 ............. 500,000 512,115
Scott County Housing & Redevelopment Authority
Facility Lease Revenue Justice Center Project
(AMBAC) 5.50% 12/1/15 ............................ 1,755,000 1,762,915
South St. Paul Housing & Redevelopment Authority
Single Family Housing Mortgage Series 93 (FNMA)
5.75% 9/1/20 ..................................... 2,335,000 2,346,838
<PAGE>
20 for tax-exempt income
DELAWARE MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
St. Paul Housing & Redevelopment Authority
Multifamily Housing Pointe of St. Paul Project
(FNMA) 6.60% 10/1/12 .............................. $4,000,000 $ 4,202,480
White Bear Lake Multifamily Housing Lake Square
(FHA) 5.875% 2/1/15 ............................... 1,055,000 1,075,604
----------
51,149,166
----------
POWER AUTHORITY REVENUE BONDS - 10.45%
Bass Brook Pollution Control Revenue for Minnesota
Power & Light Company (MBIA)
6.00% 7/1/22 ...................................... 2,000,000 2,068,240
Marshall Utility Revenue (FSA) 6.45% 7/1/10........... 500,000 532,265
Marshall Utility Revenue (FSA) 6.45% 7/1/11........... 100,000 106,381
Marshall Utility Revenue (FSA) 6.50% 7/1/12........... 500,000 532,775
Marshall Utility Revenue (FSA) 6.50% 7/1/13........... 500,000 532,775
Northern Minnesota Municipal Power Agency
Electric Systems (AMBAC) 4.75% 1/1/20.............. 1,500,000 1,318,155
Northern Minnesota Municipal Power Agency Electric
System Revenue (AMBAC) 5.50% 1/1/18................ 4,200,000 4,170,894
Northern Minnesota Municipal Power Agency (FSA)
5.25% 1/1/13 ...................................... 4,750,000 4,713,710
**Puerto Rico Electric Power Authority Inverse Floater
ROLS (FSA) 5.56% 7/1/19............................ 2,825,000 2,108,495
Puerto Rico Electric Power Authority Revenue
Ref - Series GG (FSA) 4.75% 9/1/21 ................ 1,000,000 878,730
Puerto Rico Electric Power Authority Series EE (MBIA)
4.50% 7/1/18....................................... 4,500,000 3,899,880
Southern Minnesota Municipal Power Agency
(AMBAC) 5.75% 1/1/18............................... 1,330,000 1,341,398
Southern Minnesota Municipal Power Agency (FGIC)
5.75% 1/1/18 ...................................... 4,570,000 4,609,165
**Southern Minnesota Municipal Power Agency, Inverse
Floater (FGIC) 7.57% 1/1/18 ....................... 750,000 763,215
Southern Minnesota Municipal Power Agency (MBIA)
4.75% 1/1/16 ...................................... 2,400,000 2,166,696
-----------
29,742,774
-----------
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS - 35.34%
Alexandria Independent School District #206
(MBIA) 6.30% 2/1/13 Crossover Refunded
to 2/1/03 ......................................... 1,775,000 1,865,738
Becker Wastewater Treatment Facility Series A
(MBIA) 5.95% 2/1/14 Crossover Refunded
to 2/1/02 ......................................... 500,000 524,410
Brainerd Independent School District #181
(FGIC) 7.00% 6/1/09 Crossover Refunded
to 6/1/01.......................................... 515,000 537,727
Brainerd Independent School District #181
(FGIC) 7.00% 6/1/10 Crossover Refunded
to 6/1/01 ......................................... 550,000 574,272
Buffalo Independent School District #887
(FSA) 6.10% 2/1/15 Crossover Refunded
to 2/1/03 ......................................... 1,030,000 1,077,885
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS (CONTINUED)
Carver County Housing & Redevelopment Authority
Jail Facility (MBIA) 6.40% 2/1/10 Crossover
Refunded to 2/1/02 ................................ $515,000 $537,217
Carver County Housing & Redevelopment Authority
Jail Facility (MBIA) 6.40% 2/1/11 Crossover
Refunded to 2/1/02 ................................ 550,000 573,469
Carver County Housing & Redevelopment Authority
Jail Facility (MBIA) 6.40% 2/1/12 Crossover
Refunded to 2/1/02 ................................ 585,000 609,693
Carver County Housing & Redevelopment Authority
Jail Facility (MBIA) 6.40% 2/1/13 Crossover
Refunded to 2/1/02 ................................ 625,000 651,381
Carver County Housing & Redevelopment Authority
Jail Facility (MBIA) 6.40% 2/1/14 Crossover
Refunded to 2/1/02................................. 670,000 698,281
Centennial Independent School District #12
(FSA) 7.10% 2/1/09-00 ............................. 200,000 202,800
Centennial Independent School District #12
(FSA) 7.15% 2/1/11-00 ............................. 450,000 456,395
Centennial Independent School District #12
(FSA) 7.15% 2/1/12-00 ............................. 250,000 253,553
Dakota & Washington Counties Housing &
Redevelopment Authority Single Family Mortgage
Revenue (Escrowed to Maturity) (GNMA)
8.375% 9/1/21 ..................................... 14,115,000 18,945,576
Dakota & Washington Counties Housing &
Redevelopment Authority Single Family Mortgage
Revenue (Escrowed to Maturity) (GNMA)
8.45% 9/1/19 ...................................... 9,000,000 11,891,519
Dakota & Washington Counties Housing &
Redevelopment Authority Single Family Mortgage
Revenue (Escrowed to Maturity) (MBIA)
8.15% 9/1/16 ...................................... 405,000 510,045
Delano Independent School District #879
(AMBAC) 7.25% 2/1/10 Crossover Refunded
to 2/1/01.......................................... 500,000 519,680
Detroit Lakes Benedictine Health for St. Mary's
Hospital (Connie Lee) 6.00% 2/15/12-03 ............ 1,630,000 1,741,737
Detroit Lakes Benedictine Health for St. Mary's
Hospital (Connie Lee) 6.00% 2/15/19-03 ............ 1,000,000 1,068,550
Duluth Economic Development Authority Health Care
Duluth Clinic (AMBAC) 6.30% 11/1/22-02 ............ 2,690,000 2,896,753
Duluth Economic Development Authority Health Care
Duluth Clinic (AMBAC) 6.30% 11/1/22-04 ............ 1,060,000 1,147,938
Eden Prairie Independent School District #272
(FGIC) 5.85% 2/1/13 Crossover Refunded
2/1/02 ............................................ 2,500,000 2,575,600
Eden Prairie Independent School District #272
(MBIA) 5.65% 2/1/13 Crossover Refunded
to 2/1/02 ......................................... 3,200,000 3,282,304
Elk River Independent School District #728
(FSA) 6.30% 2/1/14 Crossover Refunded
to 2/1/02 ......................................... 500,000 520,205
<PAGE>
for tax-exempt income 21
DELAWARE MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS (CONTINUED)
Elk River Independent School District #728
(FSA) 6.30% 2/1/15 Crossover Refunded
to 2/1/02.......................................... $665,000 $691,873
Elk River Independent School District #728
(FSA) 7.00% 2/1/10 Crossover Refunded
to 2/1/00 ......................................... 200,000 202,366
Elk River Independent School District #728
Series 92 B (AMBAC) 6.00% 2/1/09
Crossover Refunded to 2/1/03 ...................... 3,950,000 4,123,840
Ellendale Geneva Independent School District #762
(AMBAC) 6.00% 2/1/10 Crossover Refunded
to 2/1/03 ......................................... 230,000 240,196
Ellendale Geneva Independent School District #762
(AMBAC) 6.00% 2/1/11 Crossover Refunded
to 2/1/03.......................................... 245,000 255,702
Ellendale Geneva Independent School District #762
(AMBAC) 6.00% 2/1/12 Crossover Refunded
to 2/1/03 ......................................... 265,000 276,490
Ellendale Geneva Independent School District #762
(AMBAC) 6.00% 2/1/13 Crossover Refunded
to 2/1/03 ......................................... 280,000 292,141
Ellendale Geneva Independent School District #762
(AMBAC) 6.00% 2/1/14 Crossover Refunded
to 2/1/03.......................................... 300,000 313,008
Ellendale Geneva Independent School District #762
(AMBAC) 6.00% 2/1/15 Crossover Refunded
to 2/1/03 ......................................... 320,000 333,875
Farmington Independent School District #192
(MBIA) 6.80% 2/1/11 Crossover Refunded
to 2/1/01 ......................................... 850,000 878,042
Maplewood Independent School District #622
(FSA) 7.10% 2/1/25-05 ............................. 11,525,000 12,879,072
Maplewood Independent School District #622
(MBIA) 7.10% 2/1/19-05 ............................ 5,935,000 6,632,303
Minnesota Public Facilities Authority Water
Pollution Control Revenue (MBIA)
6.50% 3/1/14-02 ................................... 1,500,000 1,605,360
Moorhead Independent School District #152
(AMBAC) 5.90% 2/1/10 Crossover Refunded
to 2/1/01 ......................................... 475,000 485,018
Moorhead Independent School District #152
(AMBAC) 5.90% 2/1/11 Crossover Refunded
to 2/1/01 ......................................... 505,000 515,509
Moorhead Independent School District #152
(AMBAC) 5.90% 2/1/12 Crossover Refunded
to 2/1/01.......................................... 540,000 551,237
Moorhead Independent School District #152
(AMBAC) 6.00% 2/1/13 Crossover Refunded
to 2/1/01 ......................................... 575,000 587,742
Moorhead Minnesota Public Utilities (MBIA)
6.25% 11/1/12 Crossover Refunded
to 11/1/02......................................... 735,000 772,235
Mora Series A (AMBAC) 6.85% 2/1/10-00 ................ 245,000 248,183
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
--------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS (CONTINUED)
Mora Series A (AMBAC) 6.85% 2/1/11-00 ................ $265,000 $268,442
Northern Minnesota Municipal Power Agency Series B
(AMBAC) 5.90% 1/1/08-03 ........................... 700,000 744,688
Roseau Independent School District #682 (AMBAC)
7.00% 2/1/16 Crossover Refunded
to 2/1/00 ......................................... 500,000 505,895
South St. Paul Independent School District #6
(FGIC) 6.25% 2/1/10 Crossover Refunded
to 2/1/00 ......................................... 625,000 630,506
South St. Paul Independent School District #6
(FGIC) 6.45% 2/1/11 Crossover Refunded
to 2/1/00 ......................................... 500,000 504,805
South St. Paul Independent School District #6
(FGIC) 6.45% 2/1/12 Crossover Refunded
to 2/1/00 ......................................... 300,000 302,883
South Washington County Independent School
District #883 (FGIC) 6.875% 6/1/11 Crossover
Refunded to 6/1/00 ................................ 520,000 530,582
Southern Minnesota Municipal Power Agency Revenue
(Escrowed to Maturity) (AMBAC)
5.75% 1/1/18 ...................................... 670,000 683,119
Southern Minnesota Municipal Power Agency Revenue
(Escrowed to Maturity) (MBIA)
5.75% 1/1/18 ...................................... 3,790,000 3,865,269
St. Cloud Hospital Facility Revenue (AMBAC)
6.75% 7/1/11-01 ................................... 400,000 425,736
St. Cloud Hospital Facility Revenue (AMBAC)
6.75% 7/1/15-01 ................................... 500,000 532,170
St. Cloud Hospital Facility Revenue (AMBAC)
7.00% 7/1/07-01 ................................... 500,000 534,345
St. Louis Park Methodist Hospital (AMBAC)
7.25% 7/1/18-00 ................................... 500,000 524,340
Warroad Independent School District #690 (AMBAC)
6.85% 2/1/13 Crossover Refunded to 2/1/00 ......... 500,000 505,590
Washington County Housing & Redevelopment
Authority Jail Facilities (MBIA)
7.00% 2/1/12-02.................................... 500,000 530,935
Western Minnesota Municipal Power Agency Revenue
(Escrowed to Maturity) (MBIA)
6.60% 1/1/10 ...................................... 2,000,000 2,169,760
Western Minnesota Municipal Power Agency Revenue
(Escrowed to Maturity) (MBIA)
9.75% 1/1/16....................................... 530,000 768,389
Wright County (FSA) (AMT) 7.20% 12/1/12-99 ........... 1,000,000 1,008,440
-----------
100,582,814
-----------
TRANSPORTATION REVENUE BONDS - 0.62%
Puerto Rico Commonwealth Highway & Transportation
Authority Revenue Series A (AMBAC)
Zero Coupon 7/1/18................................. 5,000,000 1,770,750
-----------
1,770,750
-----------
Total Municipal Bonds (cost $270,924,726) ............ 281,543,708
-----------
<PAGE>
22 for tax-exempt income
DELAWARE MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET
VALUE
- --------------------------------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.93%
(COST $270,924,726) ....................................... $281,543,708
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 1.07%....... 3,044,208
------------
NET ASSETS APPLICABLE TO 27,055,933 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00%..................... $284,587,916
============
NET ASSET VALUE - MINNESOTA INSURED FUND A CLASS
($268,507,288 / 25,526,447 SHARES) ........................ $10.52
======
NET ASSET VALUE - MINNESOTA INSURED FUND B CLASS
($11,827,317 / 1,125,269 SHARES) .......................... $10.51
======
NET ASSET VALUE - MINNESOTA INSURED FUND C CLASS
($4,253,311 / 404,217 SHARES) ............................. $10.52
======
- ----------------------
* 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 rates that increase
(decrease) with a decrease (increase) in a specified index. Interest rates
disclosed are in effect as of August 31, 1999.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
AMT - Alternative Minimum Tax
Connie Lee - Insured by the College Construction Insurance Company
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT AUGUST 31, 1999:
Common stock, $.01 par value, 10,000,000,000 shares authorized
to the Fund with 1,000,000,000 shares allocated to Minnesota
Insured Fund A Class, 1,000,000,000 shares allocated to
Minnesota Insured Fund B Class and 1,000,000,000 shares
allocated to Minnesota Insured Fund C Class ................ $279,881,916
Accumulated net realized loss on investments .................. (5,912,982)
Net unrealized appreciation of investments..................... 10,618,982
------------
Total net assets .............................................. $284,587,916
============
NET ASSET VALUE AND OFFERING PRICE FOR
MINNESOTA INSURED FUND A CLASS
Net asset value per share (A).................................. $10.52
Sales charge (3.75% of offering price or 3.90% of amount
invested per share) (B)..................................... 0.41
------
Offering price ................................................ $10.93
======
- ----------------------
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current prospectus for purchases of $100,000 or
more for Minnesota Insured Fund A Class.
See accompanying notes
<PAGE>
VOYAGEUR INTERMEDIATE TAX-FREE FUNDS, INC.
DELAWARE TAX-FREE MINNESOTA INTERMEDIATE FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1999
------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS - 101.38%
GENERAL OBLIGATION BONDS - 5.04%
Olmstead County Resource Recovery Series A
5.90% 2/1/05 ...................................... $1,175,000 $1,212,142
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 1,000,000 829,810
**Richfield Independent School District #280 Series C,
Inverse Floater 5.34% 2/1/15....................... 1,000,000 1,051,450
----------
3,093,402
----------
HEALTHCARE/HOSPITAL REVENUE BONDS - 22.09%
Fergus Falls HealthCare Facility Broen Memorial
Home Project 6.20% 11/1/05 ........................ 100,000 101,883
Fergus Falls HealthCare Facility Broen Memorial
Home Project 6.30% 11/1/06......................... 200,000 204,248
Fergus Falls HealthCare Facility Broen Memorial
Home Project 6.40% 11/1/07 ........................ 200,000 204,232
Fergus Falls HealthCare Facility Broen Memorial
Home Project 6.60% 11/1/09 ........................ 240,000 244,903
Fergus Falls HealthCare Facility Broen Memorial
Home Project 6.70% 11/1/10 ........................ 260,000 265,291
Maplewood Healthcare Facility For Healtheast
5.70% 11/15/02 .................................... 1,000,000 997,880
Maplewood Healthcare Facility For Healtheast
5.95% 11/15/06 .................................... 2,200,000 2,165,702
Minneapolis HealthCare Facilities
Jones - Harrison Residence Project
5.90% 10/1/16...................................... 125,000 121,718
New Hope Minnesota Housing & Health
Minnesota Masonic Home North Ridge
5.875% 3/1/29 ..................................... 1,000,000 930,760
Rochester HealthCare Facilities Revenue Mayo
Foundation Series A 5.50% 11/15/27 ................ 2,000,000 1,938,580
Rochester HealthCare Facilities Revenue Mayo
Foundation Series B 5.50% 11/15/27................. 2,000,000 1,938,580
Rochester Nursing Home & Multifamily Housing
Revenue Samaritan Bethany, Inc.
6.00% 5/1/04....................................... 300,000 301,380
Rochester Nursing Home & Multifamily Housing
Revenue Samaritan Bethany, Inc.
6.10% 5/1/05 ...................................... 250,000 251,148
St. Paul Housing & Redevelopment Authority for
HealthEast Authority Hospital Revenue
5.70% 11/1/15...................................... 2,100,000 1,943,130
St. Paul Housing & Redevelopment Authority for
HealthEast Authority Hospital Revenue
5.85% 11/1/17 ..................................... 1,160,000 1,080,180
St. Paul Housing & Redevelopment Authority Health
Care Facility Revenue Regions Hospital Project
5.30% 5/15/28 ..................................... 1,000,000 873,890
-----------
13,563,505
-----------
<PAGE>
for tax-exempt income 23
DELAWARE TAX-FREE MINNESOTA INTERMEDIATE FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
HIGHER EDUCATION REVENUE BONDS - 2.26%
Minnesota Higher Education Facility Authority
Augsburg College Series 4F2 5.75% 5/1/16 .......... $1,425,000 $1,386,212
----------
1,386,212
----------
HOUSING REVENUE BONDS - 5.20%
Oakdale Elderly Housing Revenue PHM/Oakdale
Project 5.75% 3/1/18............................... 1,400,000 1,316,574
Oakdale Housing Oak Meadows Project
6.20% 4/1/07....................................... 150,000 154,928
Oakdale Housing Oak Meadows Project
6.30% 4/1/08 ...................................... 260,000 268,507
Oakdale Housing Oak Meadows Project
6.50% 4/1/10 ...................................... 295,000 305,865
Park Rapids Multifamily Revenue The Court
Apartments Project Section 8 6.05% 8/1/12 ......... 1,100,000 1,071,136
St. Paul Housing & Redevelopment Single Family
Mortgage (FNMA) 6.90% 12/1/21 ..................... 75,000 77,970
----------
3,194,980
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 18.21%
Andover Development Revenue Downtown Center
Project Series A 6.50% 12/1/06 .................... 1,795,000 1,827,884
Anoka County Minnesota Resource Recovery
Revenue - Northern States Power Company PJ
4.50% 12/1/07 ..................................... 1,000,000 959,300
Anoka County Minnesota Resource Recovery
Revenue - Northern States Power Company PJ
4.60% 12/1/08 ..................................... 1,000,000 955,620
Brooklyn Center Commercial Development Revenue
Brookdale Association (Reliastar Life Ins. Co.)
5.70% Mandatory Put 6/1/01......................... 1,000,000 1,022,870
Duluth Gross Revenue Bond Duluth Entertainment
7.00% 12/1/03 ..................................... 1,250,000 1,340,475
Duluth Gross Revenue Bond Duluth Entertainment
7.30% 12/1/06 ..................................... 250,000 275,088
Minnesota Public Facilities Authority Pollution
Control Revenue Series A 6.55% 3/1/03 ............. 1,720,000 1,806,688
Richfield Commercial Development Revenue
Richfield Shoppes Project 7.50% 10/1/04 ........... 950,000 964,678
St. Paul Port Authority Commercial Development
Revenue Fort Rd Medical (Asset Gty)
7.50% 9/1/02....................................... 2,000,000 2,025,800
-----------
11,178,403
-----------
LEASE/CERTIFICATES OF PARTICIPATION - 3.70%
Beltrami County Housing & Redevelopment Authority
Revenue 5.90% 2/1/08 .............................. 355,000 365,242
Beltrami County Housing & Redevelopment Authority
Revenue 6.00% 2/1/09 .............................. 380,000 390,929
Beltrami County Housing & Redevelopment Authority
Revenue 6.00% 2/1/10 .............................. 405,000 414,744
Beltrami County Housing & Redevelopment Authority
Revenue 6.10% 2/1/11 .............................. 430,000 441,322
Hibbing Economic Development Authority Revenue
6.10% 2/1/08 ...................................... 650,000 661,570
----------
2,273,807
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
POWER AUTHORITY REVENUE BONDS - 8.05%
Eveleth Industrial Development Revenue for
Minnesota Power & Light Company
6.125% 1/1/04 ..................................... $2,500,000 $2,579,575
**Puerto Rico Electric Power Authority Revenue Series
DD Inverse Floater (FSA) 5.56% 7/1/19 ............. 1,000,000 746,370
Puerto Rico Electric Power Authority Revenue Series
EE 4.50% 7/1/18.................................... 1,000,000 866,640
Southern Minnesota Municipal Power Agency Zero
Coupon 1/1/20 ..................................... 2,395,000 750,593
----------
4,943,178
----------
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS - 34.20%
Austin Independent School District #492
(MBIA) 6.875% 2/1/12-01............................ 1,205,000 1,245,982
Braham Independent School District #314
(AMBAC) 6.30% 2/1/19-01 ........................... 3,015,000 3,093,239
Eden Valley Watkins Independent School District
#463 (FSA) 6.55% 2/1/11-02......................... 250,000 261,515
Eden Valley Watkins Independent School District
#463 (FSA) 6.60% 2/1/16-02 ........................ 615,000 644,022
Mankato Independent School District #77 (FSA)
6.35% 2/1/13-02 ................................... 1,750,000 1,822,695
Metropolitan Council Hubert H Humphrey Metrodome
Sports Facility Revenue Series 92 (Escrowed to
Maturity) 6.00% 10/1/09............................ 3,520,000 3,697,197
Minneapolis/St. Paul HealthOne Series B
(Escrowed to Maturity) 7.55% 8/15/00............... 325,000 336,814
Minnesota State 6.25% 8/1/10-02 ...................... 4,000,000 4,214,477
Olmstead County 6.85% 2/1/02-01 ...................... 800,000 830,160
Olmstead County 6.90% 2/1/03-01 ...................... 900,000 934,542
Olmstead County 6.95% 2/1/04-01 ...................... 950,000 987,107
St. Cloud Hospital Facility Revenue (AMBAC)
7.00% 7/1/20-01 ................................... 2,740,000 2,928,211
----------
20,995,961
----------
WATER & SEWER REVENUE BONDS - 2.63%
**Minnesota Public Facilities Authority Water
Pollution Control Revenue-Inverse floater ROLS
5.63% 3/1/16 ...................................... 2,000,000 1,612,440
-----------
1,612,440
-----------
Total Municipal Bonds (cost $62,675,477) ............. 62,241,888
-----------
<PAGE>
for tax-exempt income 24
DELAWARE TAX-FREE MINNESOTA INTERMEDIATE FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET
VALUE
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 101.38%
(COST $62,675,477) ............................................. $62,241,888
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (1.38%) ......... (849,575)
-----------
NET ASSETS APPLICABLE TO 5,786,318 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ......................... $61,392,313
===========
NET ASSET VALUE - TAX-FREE MINNESOTA INTERMEDIATE FUND A CLASS
($56,221,562 / 5,299,486 SHARES) ............................... $10.61
======
NET ASSET VALUE - TAX-FREE MINNESOTA INTERMEDIATE FUND B CLASS
($2,877,717 / 270,813 SHARES) .................................. $10.63
======
NET ASSET VALUE - TAX-FREE MINNESOTA INTERMEDIATE FUND C CLASS
($2,293,034 / 216,019 SHARES) .................................. $10.61
======
- ----------------------
* 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 rates that increase
(decrease) with a decrease (increase) in a specified index. Interest rates
disclosed are in effect as of August 31, 1999.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
Asset Gty - Insured by the Asset Guaranty Insurance Company
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by Financial Security Assistance
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT AUGUST 31, 1999:
Common stock, $.01 par value, 10,000,000,000 shares
authorized to the Fund with 1,000,000,000 shares allocated to
Tax-Free Minnesota Intermediate Fund A Class, 1,000,000,000
shares allocated to Tax-Free Minnesota intermediate Fund B Class
and 1,000,000,000 shares allocated to Tax-Free Minnesota
Intermediate Fund C Class ..................................... $62,013,748
Accumulated net realized loss on investments ..................... (187,846)
Net unrealized depreciation of investments ....................... (433,589)
-----------
Total net assets ................................................. $61,392,313
===========
NET ASSET VALUE AND OFFERING PRICE FOR
TAX-FREE MINNESOTA INTERMEDIATE FUND A CLASS
Net asset value per share (A) .................................... $10.61
Sales charge (2.75% of offering price or 2.83% of amount invested
per share) (B) ................................................ 0.30
------
Offering price ................................................... $10.91
======
- ----------------------
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current prospectus for purchases of $100,000
or more for Tax-Free Minnesota Intermediate Fund A Class.
See accompanying notes
<PAGE>
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE MINNESOTA HIGH-YIELD
MUNICIPAL BOND FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1999
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS - 97.57%
CITY AGENCY REVENUE BONDS - 2.83%
Minneapolis Community Development Agency Common
Bond Fund Series 2 (AMT) 6.20% 6/1/17 ..............$ 750,000 $ 768,938
Minneapolis Community Development Agency Common
Bond Fund Series 4 (AMT) 6.20% 6/1/17 .............. 1,055,000 1,072,365
----------
1,841,303
----------
GENERAL OBLIGATION BONDS - 7.27%
Dakota County 4.75% 2/1/09 .......................... 1,000,000 984,320
Inner Grove Heights (MN School District Enhanced)
Series A 5.75% 2/1/13 .............................. 100,000 102,742
**Minnesota State Inverse Floater ROLS
6.44% 11/1/17 ...................................... 2,300,000 2,015,444
Puerto Rico Commonwealth 5.375% 7/1/25 .............. 500,000 478,125
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ....................................... 1,270,000 1,053,859
Waconia Independent School District Series 93A
(FSA) 5.45% 2/1/15 ................................. 100,000 100,500
----------
4,734,990
----------
HIGHER EDUCATION REVENUE BONDS - 3.21%
Minnesota State Higher Education Facility
Macalester College 4C 5.50% 3/1/12 ................. 100,000 101,418
Minnesota State Higher Education Facility
St. Mary's College Series 3Q 6.15% 10/1/23 ......... 900,000 894,357
Minnesota State University System Revenue
Bond Series 93A 6.10% 6/30/23 ...................... 100,000 101,541
University of Minnesota Series A 5.50% 7/1/21 ....... 1,000,000 993,630
----------
2,090,946
----------
HOSPITAL REVENUE BONDS - 26.31%
Cambridge Healthcare Facility Revenue Grandview
Christian Home 7.25% 9/1/26 ........................ 125,000 130,694
Cannon Falls Nursing Home Franciscan Health
Community Project 7.25% 7/1/21 ..................... 100,000 102,810
Duluth Economic Development Authority HealthCare
Facilities St. Francis HealthCare Facility
6.75% 12/1/17 ...................................... 325,000 336,924
Eden Prairie HealthCare Facilities Revenue
Refunding Castle Ridge Care Center
5.70% 7/1/28 ....................................... 1,740,000 1,569,950
Fergus Falls HealthCare Facility Revenue Lake
Region Hospital 6.50% 9/1/18 ....................... 750,000 791,685
Glencoe HealthCare Revenue 6.40% 12/1/15 ............ 275,000 282,560
Little Canada Senior Facility Residence Series 92
(Presbyterian Homes Guaranteed)
7.25% 7/1/12 ....................................... 250,000 259,053
Mankato Health Facilities Revenue Mankato Lutheran
Homes Series A 6.875% 10/1/26 ...................... 300,000 304,752
Marshall Medical Center
Weiner Memorial Medical Center Project
6.00% 11/1/28 ...................................... 1,000,000 942,330
<PAGE>
for tax-exempt income 25
DELAWARE MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND
STATEMENT OF NET ASSETS (CONTINUED)
------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Minneapolis HealthCare Facility Revenue
Jones-Harrison Residence Project
6.00% 10/1/27 ..................................... $1,565,000 $ 1,513,418
Minneapolis Housing & HealthCare Facility Revenue
Augustana Chapel View Homes
6.50% 6/1/17 ...................................... 1,370,000 1,371,302
Minnesota Agriculture & Economic Development Board-
Benedictine Health Systems 5.75% 2/1/29 ........... 1,000,000 908,180
Minnetonka Multifamily Housing Beacon Hill
Senior Housing Project 7.55% 6/1/19 ............... 200,000 210,734
Moorhead Economic Development Authority
Multifamily Revenue Refunding & Improvement
Housing Development for Eventide Series B
6.00% 6/1/18 ...................................... 870,000 833,129
New Hope Housing & Health
Minnesota Masonic Home North Ridge
Care Facility 5.875% 3/1/29 ....................... 1,500,000 1,396,140
Northfield HealthCare Facilities Revenue
Refunding & Improvement Northfield Care Center
Series A 6.00% 5/1/28 ............................. 1,405,000 1,340,328
Perham Hospital District Congregate Housing
Facilities Briarwood Project 6.25% 2/1/22 ......... 620,000 605,126
Robbinsdale North Memorial Medical (AMBAC)
5.50% 5/15/23 ..................................... 100,000 97,408
**Rochester HealthCare Facilities Revenue Reg IRS
for Mayo Clinic, Series H Inverse Floater
8.07% 11/15/15 .................................... 1,500,000 1,596,885
Springfield St. John's Lutheran Home Revenue
8.50% 11/1/19 ..................................... 150,000 155,075
St. Anthony Multifamily Housing Chandler (GNMA)
6.05% 11/20/16 .................................... 135,000 139,516
St. Paul Housing & Redevelopment Hospital
Revenue for HealthEast Series A
6.625% 11/1/17 .................................... 240,000 241,234
St. Paul Housing & Redevelopment Hospital
Revenue for HealthEast Series B
6.625% 11/1/17 .................................... 490,000 492,519
Waconia Good Samaritan Housing & Redevelopment
Revenue for The Evangelical Lutheran Series A
6.00% 6/1/14 ...................................... 660,000 666,943
Washington County Housing & Redevelopment
Authority for HealthEast 5.50% 11/15/27 ........... 1,000,000 848,710
----------
17,137,405
----------
HOUSING REVENUE BONDS - 45.92%
Bloomington Multifamily Housing Revenue Refunding
Hampshire Apartments Series A
6.20% 12/1/31 ..................................... 2,500,000 2,351,024
Brooklyn Center Four Court Multifamily Housing
7.50% 6/1/25 ...................................... 370,000 377,541
Carver Multifamily Housing Lake Grace
6.25% 7/1/28 ...................................... 325,000 327,100
Carver Multifamily Housing Lake Grace
8.00% 7/1/28 ...................................... 320,000 341,949
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Chanhassen Multifamily Housing Heritage Park
6.20% 7/1/30 .......................................$ 300,000 $ 306,354
Chaska Multifamily West Suburban Housing Partners
7.875% 3/1/31 ...................................... 1,000,000 936,920
Coon Rapids Multifamily Revenue Margaret Place
Series A 6.50% 5/1/25 .............................. 500,000 485,980
Coon Rapids Senior Housing Revenue Refunding
Epiphany Senior Citizens Housing Corporation
Project 6.00% 11/1/28 .............................. 3,455,000 3,260,068
Eden Prairie Multifamily Housing
Tanager Creek (Subordinated)
8.00% 6/20/31 ...................................... 765,000 773,017
Hutchinson Multifamily Housing Revenue Evergreen
Apartments Project 5.75% 11/1/28 ................... 3,590,000 3,373,019
Minneapolis Multifamily Housing Olson Townhomes
6.00% 12/1/19 ...................................... 800,000 803,624
Minneapolis Nicollet Towers Multifamily Housing
6.00% 12/1/19 ...................................... 300,000 305,934
Minnesota Housing Finance Authority Single Family
Housing 5.875% 1/1/17 .............................. 95,000 96,443
Minnesota Housing Finance Authority Single Family
Mortgage Series E 6.25% 1/1/23 ..................... 90,000 91,685
Minnesota State Housing Finance Agency Single
Family Mortgage Series K 5.75% 1/1/26 .............. 980,000 962,948
Minnetonka Senior Housing Revenue Westridge Senior
Housing Project 6.30% 9/1/08 ....................... 110,000 112,594
Minnetonka Senior Housing Revenue Westridge Senior
Housing Project 6.50% 9/1/12 ....................... 285,000 289,232
Minnetonka Senior Housing Revenue Westridge Senior
Housing Project 7.00% 9/1/27 ....................... 1,275,000 1,312,727
New Brighton Multifamily Polynesian Village
7.60% 4/1/25 ....................................... 300,000 313,104
Oakdale Elderly Housing Revenue PHM/Oakdale
Project 6.00% 3/1/28 ............................... 1,800,000 1,694,988
Oakdale Housing Oak Meadows Project
6.75% 4/1/15 ....................................... 1,500,000 1,563,975
Rochester Multifamily Revenue, Wedum/
Shorewood Campus 6.60% 6/1/36 ...................... 3,000,000 3,061,049
Shoreview Elderly Housing PHM/Shoreview Project
6.15% 12/1/33 ...................................... 2,955,000 2,825,010
St. Louis Park Multifamily Mortgage Revenue
Tamarind Project (FNMA) 5.50% 11/1/13 .............. 125,000 124,746
Stillwater Multifamily Housing Stillwater Cottages
6.75% 11/1/11 ...................................... 205,000 203,801
Stillwater Multifamily Housing Stillwater Cottages
7.00% 11/1/16 ...................................... 680,000 679,912
Stillwater Multifamily Housing Stillwater Cottages
7.00% 11/1/27 ...................................... 340,000 339,956
Twin Valley Congregate Housing Revenue Living
Options Incorporated Project 5.95% 11/1/28 ......... 1,825,000 1,716,924
Washington County Housing - Briarwood Pond -
(GNMA) Subordinated, B 7.125% 8/20/34 .............. 905,000 880,031
----------
29,911,655
----------
<PAGE>
26 for tax-exempt income
DELAWARE MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND
STATEMENT OF NET ASSETS (CONTINUED)
------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 3.06%
Andover Development Revenue Downtown Center
Project Series A 7.00% 12/1/12 .................... $1,640,000 $1,702,566
Red Wing Industrial Development Revenue for Kmart
(First Mortgage) 5.50% 7/1/08 ..................... 300,000 294,228
----------
1,996,794
----------
LEASE/CERTIFICATES OF PARTICIPATION - 2.35%
Beltrami County Housing & Redevelopment
Authority Revenue Lease 6.10% 2/1/12 .............. 460,000 471,035
Hibbing Economic Development Authority
6.40% 2/1/12 ...................................... 530,000 539,015
Rice County Certificate of Participation
6.00% 12/1/21 ..................................... 125,000 126,301
St. Cloud Certificate of Participation
5.90% 12/1/17 ..................................... 400,000 393,816
----------
1,530,167
----------
POWER AUTHORITY REVENUE BONDS - 2.30%
Bass Brook Pollution Control Revenue for Minnesota
Power & Light 6.00% 7/1/22 ........................ 805,000 812,631
**Puerto Rico Electric Power Authority Revenue
Series DD Inverse Floater (FSA)
5.56% 7/1/19 ...................................... 400,000 298,548
Southern Minnesota Municipal Power Agency (FGIC)
5.75% 1/1/18 ...................................... 100,000 100,857
Western Municipal Power Agency Revenue
6.125% 1/1/16 ..................................... 285,000 285,259
----------
1,497,295
----------
*PRE-REFUNDED BONDS - 0.57%
Esko Independent School District #99 (FSA)
5.75% 4/1/17-05 ................................... 100,000 104,547
Minneapolis HealthCare American Baptist Homes
8.70% 11/1/09-01 .................................. 150,000 166,634
Stewartville Independent School District
(MN School District Enhanced) Series A
5.75% 2/1/12-05 ................................... 100,000 104,185
----------
375,366
----------
OTHER REVENUE BONDS - 3.75%
Minneapolis Community Development Agency
Revenue Holiday Inn Metrodome Project
6.00% 12/1/01 ..................................... 1,100,000 1,103,399
St. Paul, MN HRA - Acorn Dual Language
Charter School 6.60% 11/1/24 ...................... 1,000,000 964,400
Woodbury Golf Course Revenue 6.75% 2/1/22 .......... 365,000 374,300
----------
2,442,099
----------
Total Municipal Bonds (cost $65,051,985) ........... 63,558,020
----------
NUMBER OF
SHARES
---------
SHORT-TERM INVESTMENTS - 1.86%
Norwest Federated Municipal Money Market Fund ...... 1,211,233 1,211,233
----------
Total Short-Term Investments (cost $1,211,233) ..... 1,211,233
----------
<PAGE>
DELAWARE MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
MARKET
VALUE
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.43%
(COST $66,263,218) ..................................... $64,769,253
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.57% ... 373,099
-----------
NET ASSETS APPLICABLE TO 6,379,541 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ................. $65,142,352
===========
NET ASSET VALUE - MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND
A CLASS ($41,813,340 / 4,095,165 SHARES) ............... $10.21
======
NET ASSET VALUE - MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND
B CLASS ($15,814,428 / 1,548,460 SHARES) ............... $10.21
======
NET ASSET VALUE - MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND
C CLASS($7,514,584 / 735,916 SHARES) ................... $10.21
======
- ----------------------
* 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 rates that increase
(decrease) with a decrease (increase) in a specified index. Interest rates
disclosed are in effect as of August 31, 1999.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
AMT - Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
COMPONENTS OF NET ASSETS AT AUGUST 31, 1999:
Common stock, $.01 par value, 100,000,000,000 shares authorized
to the Fund with 10,000,000,000 shares allocated to Minnesota
High-Yield Municipal Bond Fund A Class, 10,000,000,000 shares
allocated to Minnesota High-Yield Municipal Bond Fund B Class
and 10,000,000,000 shares allocated to Minnesota High-Yield
Municipal Bond Fund C Class .................................... $66,832,444
Undistributed net investment income ............................... 17,459
Accumulated net realized loss on investments ...................... (213,586)
Net unrealized depreciation of investments ........................ (1,493,965)
-----------
Total net assets .................................................. $65,142,352
===========
NET ASSET VALUE AND OFFERING PRICE FOR MINNESOTA HIGH-YIELD
MUNICIPAL BOND FUND A CLASS
Net asset value per share (A) ..................................... $10.21
Sales charge (3.75% of offering price or 3.92% of
amount invested per share) (B) ................................. 0.40
------
Offering price .................................................... $10.61
======
- ----------------------
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current prospectus for purchases of $100,000
or more for Minnesota High-Yield Municipal Bond Fund A Class.
See accompanying notes
<PAGE>
for tax-exempt income 27
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR VOYAGEUR
VOYAGEUR VOYAGEUR INTERMEDIATE MUTUAL
TAX-FREE INSURED TAX-FREE FUNDS, INC.
FUNDS, INC. FUNDS, INC. FUNDS, INC. MINNESOTA
TAX-FREE MINNESOTA MINNESOTA HIGH-YIELD
MINNESOTA INSURED TAX-FREE MUNICIPAL
FUND FUND INTERMEDIATE FUND BOND FUND
---------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest .......................................................... $25,216,821 $16,877,501 $3,534,402 $3,608,601
----------- ----------- ---------- ----------
EXPENSES:
Management fees ................................................... 2,233,518 1,488,420 270,971 349,134
Distribution expense .............................................. 1,216,791 858,682 127,794 308,602
Dividend disbursing and transfer agent fees and expenses .......... 292,530 227,417 60,263 51,394
Registration fees ................................................. 21,300 17,822 4,500 11,591
Reports and statements to shareholders ............................ 61,586 73,153 7,254 19,811
Accounting and administration ..................................... 179,592 119,977 23,460 22,346
Professional fees ................................................. 32,253 30,681 6,183 10,000
Custodian fees .................................................... 27,500 23,500 5,650 5,550
Taxes (other than taxes on income) ................................ 40,850 32,623 8,830 5,913
Directors' fees ................................................... 8,154 8,683 4,735 1,443
Other ............................................................. 66,846 26,622 1,924 1,691
----------- ----------- ---------- ----------
4,180,920 2,907,580 521,564 787,475
Less expenses absorbed or waived .................................. -- -- -- (297,922)
Less expenses paid indirectly ..................................... (9,940) (6,829) (1,427) (1,375)
----------- ----------- ---------- ----------
Total operating expenses .......................................... 4,170,980 2,900,751 520,137 488,178
Interest expense .................................................. 52,495 11,653 2,214 13,915
----------- ----------- ---------- ----------
Total expenses .................................................... 4,223,475 2,912,404 522,351 502,093
----------- ----------- ---------- ----------
NET INVESTMENT INCOME ............................................. 20,993,346 13,965,097 3,012,051 3,106,508
----------- ----------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments ........................... (147,117) 137,142 (140,464) (201,795)
Net change in unrealized appreciation/depreciation of investments . (25,287,979) (14,549,781) (3,073,048) (3,408,558)
----------- ----------- ---------- ----------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS ................... (25,435,096) (14,412,639) (3,213,512) (3,610,353)
----------- ----------- ---------- ----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS .............. $(4,441,750) $ (447,542) $ (201,461) $ (503,845)
=========== =========== ========== ==========
</TABLE>
See accompanying notes
<PAGE>
28 for tax-exempt income
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC. VOYAGEUR INSURED FUNDS, INC.
TAX-FREE MINNESOTA FUN MINNESOTA INSURED FUND
-------------------------------------------------------------------------------
YEAR ENDED EIGHT MONTHS YEAR ENDED YEAR ENDED EIGHT MONTHS YEAR ENDED
8/31/99 ENDED 8/31/98 12/31/97 8/31/99 ENDED 8/31/98 12/31/97
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .......................... $ 20,993,346 $ 14,121,711 $ 22,233,984 $ 13,965,097 $ 9,421,773 $ 14,992,728
Net realized gain (loss) on investments (147,117) 998,916 3,216,993 137,142 32,436 1,476,574
Net change in unrealized appreciation/depreciation
of investments .............................. (25,287,979) 3,595,749 13,746,414 (14,549,781) 2,911,667 7,964,819
------------ ------------ ------------ ------------ ------------ -----------
Net increase (decrease) in net assets resulting
from operations ............................. (4,441,750) 18,716,376 39,197,391 (447,542) 12,365,876 24,434,121
------------ ------------ ------------ ------------ ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ..................................... (20,174,383) (13,881,351) (21,801,997) (13,346,041) (9,116,602) (14,559,667)
B Class ..................................... (487,034) (254,452) (342,308) (465,991) (253,079) (326,611)
C Class ..................................... (262,572) (110,969) (121,569) (153,065) (84,466) (135,307)
Net realized gain on investments:
A Class ..................................... (1,282,605) (701,597) -- -- -- --
B Class ..................................... (33,499) (16,734) -- -- -- --
C Class ..................................... (17,432) (7,940) -- -- -- --
------------ ------------ ------------ ------------ ------------ -----------
(22,257,525) (14,973,043) (22,265,874) (13,965,097) (9,454,147) (15,021,585)
------------ ------------ ------------ ------------ ------------ -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ..................................... 31,725,320 16,789,907 30,690,547 16,615,252 8,614,988 16,105,669
B Class ..................................... 4,642,678 2,144,150 2,901,401 3,412,545 1,720,072 2,803,647
C Class ..................................... 3,462,305 2,221,006 1,258,502 1,749,748 302,962 726,891
Net asset value of shares issued upon reinvestment
of distributions from net investment income and
net realized gain on investments:
A Class ..................................... 14,191,034 9,615,052 14,861,153 8,915,770 6,103,879 10,480,178
B Class ..................................... 358,655 203,099 265,963 301,236 175,169 249,513
C Class ..................................... 212,238 101,927 108,591 123,826 65,047 114,902
------------ ------------ ------------ ------------ ------------ -----------
54,592,230 31,075,141 50,086,157 31,118,377 16,982,117 30,480,800
------------ ------------ ------------ ------------ ------------ -----------
Cost of shares repurchased:
A Class ..................................... (42,409,234) (31,266,997) (73,076,182) (26,476,059) (22,936,162) (52,017,149)
B Class ..................................... (1,147,113) (403,632) (1,502,411) (1,657,474) (547,658) (1,207,521)
C Class ..................................... (1,339,166) (537,644) (1,472,994) (622,365) (287,466) (973,441)
------------ ------------ ------------ ------------ ------------ -----------
(44,895,513) (32,208,273) (76,051,587) (28,755,898) (23,771,286) (54,198,111)
------------ ------------ ------------ ------------ ------------ -----------
Increase (decrease) in net assets derived from
capital share transactions .................. 9,696,717 (1,133,132) (25,965,430) 2,362,479 (6,789,169) (23,717,311)
------------ ------------ ------------ ------------ ------------ -----------
NET INCREASE (DECREASE) IN NET ASSETS .......... (17,002,558) 2,610,201 (9,033,913) (12,050,160) (3,877,440) (14,304,775)
NET ASSETS:
Beginning of period ............................ 431,272,464 428,662,263 437,696,176 296,638,076 300,515,516 314,820,291
------------ ------------ ------------ ------------ ------------ -----------
End of period .................................. $414,269,906 $431,272,464 $428,662,263 $284,587,916 $296,638,076 $300,515,516
============ ============ ============ ============ ============ ============
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 29
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR INTERMEDIATE TAX-FREE FUNDS, INC. VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE MINNESOTA INTERMEDIATE FUND MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND
--------------------------------------------------------------------------------
YEAR ENDED EIGHT MONTHS YEAR ENDED YEAR ENDED EIGHT MONTHS YEAR ENDED
8/31/99 ENDED 8/31/98 12/31/97 8/31/99 ENDED 8/31/98 12/31/97
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ............................ $ 3,012,051 $ 1,908,966 $ 2,988,988 $ 3,106,508 $ 1,341,908 $ 1,229,469
Net realized gain (loss) on investments .......... (140,464) 103,601 638,280 (201,795) (648) (4,334)
Net change in unrealized appreciation/depreciation
of investments ................................ (3,073,048) (121,364) 321,114 (3,408,558) 659,652 1,166,080
----------- ----------- ----------- ----------- ----------- ------------
Net increase (decrease) in net assets resulting
from operations ............................... (201,461) 1,891,203 3,948,382 (503,845) 2,000,912 2,391,215
----------- ----------- ----------- ----------- ----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ....................................... (2,843,696) (1,838,819) (2,915,016) (2,089,853) (873,324) (783,576)
B Class ....................................... (86,563) (29,833) (26,474) (704,387) (359,748) (312,756)
C Class ....................................... (79,885) (42,221) (52,600) (295,807) (134,232) (109,945)
----------- ----------- ----------- ----------- ----------- ------------
(3,010,144) (1,910,873) (2,994,090) (3,090,047) (1,367,304) (1,206,277)
----------- ----------- ----------- ----------- ----------- ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ....................................... 11,359,599 3,869,637 7,081,491 13,786,474 15,804,815 12,612,422
B Class ....................................... 1,677,583 702,708 669,318 4,295,037 5,379,096 5,453,844
C Class ....................................... 1,224,701 644,898 810,790 3,126,801 2,319,609 2,470,327
Net asset value of shares issued upon reinvestment of
distributions from net investment income and net
realized gain on investments:
A Class ....................................... 2,116,790 1,378,025 2,185,735 1,146,164 580,383 503,798
B Class ....................................... 56,875 24,782 23,336 404,641 202,199 160,239
C Class ....................................... 70,383 38,393 52,025 207,133 99,018 89,364
----------- ----------- ----------- ----------- ----------- ------------
16,505,931 6,658,443 10,822,695 22,966,250 24,385,120 21,289,994
----------- ----------- ----------- ----------- ----------- ------------
Cost of shares repurchased:
A Class ....................................... (8,562,397) (8,471,167) (18,684,272) (4,114,523) (2,500,965) (903,309)
B Class ....................................... (101,621) (263,216) (205,353) (1,347,167) (603,878) (475,668)
C Class ....................................... (494,429) (594,312) (510,897) (580,086) (498,154) (405,467)
----------- ----------- ----------- ----------- ----------- ------------
(9,158,447) (9,328,695) (19,400,522) (6,041,776) (3,602,997) (1,784,444)
----------- ----------- ----------- ----------- ----------- ------------
Increase (decrease) in net assets derived from
capital share transactions .................... 7,347,484 (2,670,252) (8,577,827) 16,924,474 20,782,123 19,505,550
----------- ----------- ----------- ----------- ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS ............ 4,135,879 (2,689,922) (7,623,535) 13,330,582 21,415,731 20,690,488
NET ASSETS:
Beginning of period .............................. 57,256,434 59,946,356 67,569,891 51,811,770 30,396,039 9,705,551
----------- ----------- ----------- ----------- ----------- ------------
End of period .................................... $61,392,313 $57,256,434 $59,946,356 $65,142,352 $51,811,770 $30,396,039
=========== =========== =========== =========== =========== ============
</TABLE>
See accompanying notes
<PAGE>
30 for tax-exempt income
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period was
as follows:
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC.
TAX-FREE MINNESOTA FUND -- A CLASS
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
YEAR EIGHT MONTHS YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95 12/31/94
Net asset value, beginning of period ..................... $13.020 $12.910 $12.400 $12.630 $11.330 $12.850
------- ------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income .................................. 0.628 0.431 0.654 0.630 0.620 0.630
Net realized and unrealized gain (loss) on investments . (0.752) 0.136 0.511 (0.230) 1.320 (1.480)
------- ------- ------- ------- ------- -------
Total from investment operations ....................... (0.124) 0.567 1.165 0.400 1.940 (0.850)
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................... (0.626) (0.435) (0.655) (0.630) (0.640) (0.610)
Distributions from net realized gain on investments .... (0.040) (0.022) -- -- -- (0.050)
Distributions in excess of net realized gains .......... -- -- -- -- -- (0.010)
------- ------- ------- ------- ------- -------
Total dividends and distributions ...................... (0.666) (0.457) (0.655) (0.630) (0.640) (0.670)
------- ------- ------- ------- ------- -------
Net asset value, end of period ........................... $12.230 $13.020 $12.910 $12.400 $12.630 $11.330
======= ======= ======= ======= ======= =======
Total Return(2) .......................................... (1.06%) 4.46% 9.68% 3.33% 17.49% (6.73%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................$394,144 $416,113 $417,365 $428,380 $455,220 $406,497
Ratio of expenses to average net assets ................ 0.94% 0.89% 0.91% 0.92% 0.93% 0.90%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ...... 0.94% 0.92% 0.95% 0.92% 0.93% 0.90%
Ratio of net investment income to average net assets ... 4.89% 5.00% 5.22% 5.13% 5.11% 5.29%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ........................................... 4.89% 4.97% 5.18% 5.13% 5.11% 5.29%
Portfolio turnover ..................................... 17% 13% 19% 28% 51% 24%
</TABLE>
- ---------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 31
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period was
as follows:
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC.
TAX-FREE MINNESOTA FUND -- B CLASS
--------------------------------------------------------------------------
YEAR EIGHT MONTHS YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED 8/11/95(4) TO
8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $13.020 $12.910 $12.400 $12.620 $11.900
Income (loss) from investment operations:
Net investment income ................................... 0.527 0.366 0.574 0.560 0.450
Net realized and unrealized
gain (loss) on investments ............................ (0.740) 0.136 0.508 (0.220) 0.710
------- ------- ------- ------- -------
Total from investment operations ........................ (0.213) 0.502 1.082 0.340 1.160
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .................... (0.527) (0.370) (0.572) (0.560) (0.440)
Distributions from net realized gain on
investments ........................................... (0.040) (0.022) -- -- --
------- ------- ------- ------- -------
Total dividends and distributions ....................... (0.567) (0.392) (0.572) (0.560) (0.440)
------- ------- ------- ------- -------
Net asset value, end of period ............................ $12.240 $13.020 $12.910 $12.400 $12.620
======= ======= ======= ======= =======
Total Return(2) ........................................... (1.74%) 3.94% 8.95% 2.83% 9.95%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $13,312 $10,246 $8,215 $6,233 $2,701
Ratio of expenses to average net assets ................. 1.69% 1.64% 1.56% 1.50% 1.38%(5)
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ....... 1.69% 1.67% 1.60% 1.67% 1.63%(5)
Ratio of net investment income to average
net assets ............................................ 4.14% 4.25% 4.57% 4.53% 4.43%(5)
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly ....................................... 4.14% 4.22% 4.53% 4.36% 4.18%(5)
Portfolio turnover ...................................... 17% 13% 19% 28% 51%
</TABLE>
<PAGE>
- ---------------
RESTUBBED TABLE
- ---------------
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC.
TAX-FREE MINNESOTA FUND -- C CLASS
-------------------------------------------------------------------------------
YEAR PERIOD
YEAR EIGHT MONTHS YEAR YEAR ENDED FROM
ENDED ENDED ENDED ENDED PERIOD FROM 5/4/94(4) TO
8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............... $13.040 $12.920 $12.410 $12.630 $11.330 $11.960
Income (loss) from investment operations:
Net investment income ............................ 0.536 0.374 0.564 0.540 0.530 0.340
Net realized and unrealized
gain (loss) on investments ..................... (0.756) 0.138 0.508 (0.220) 1.320 (0.610)
------- ------- ------- ------- ------- -------
Total from investment operations .................. (0.220) 0.512 1.072 0.320 1.850 (0.270)
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............. (0.530) (0.370) (0.562) (0.540) (0.550) (0.320)
Distributions from net realized gain on
investments .................................... (0.040) (0.022) -- -- -- (0.040)
------- ------- ------- ------- ------- -------
Total dividends and distributions ................ (0.570) (0.392) (0.562) (0.540) (0.550) (0.360)
------- ------- ------- ------- ------- -------
Net asset value, end of period ..................... $12.250 $13.040 $12.920 $12.410 $12.630 $11.330
======= ======= ======= ======= ======= =======
Total Return(2) .................................... (1.80%) 4.02% 8.82% 2.64% 16.62% (2.30%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......... $6,814 $4,914 $3,083 $3,083 $2,319 $1,061
Ratio of expenses to average net assets .......... 1.69% 1.64% 1.65% 1.67% 1.67% 1.72%(5)
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly. 1.69% 1.67% 1.69% 1.67% 1.67% 1.72%(5)
Ratio of net investment income to average
net assets ..................................... 4.14% 4.25% 4.48% 4.38% 4.33% 4.56%(5)
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly ................................ 4.14% 4.22% 4.44% 4.38% 4.33% 4.56%(5)
Portfolio turnover ............................... 17% 13% 19% 28% 51% 24%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(4) Commencement of operations.
(5) Annualized.
See accompanying notes
<PAGE>
32 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period was
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INSURED FUNDS, INC.
MINNESOTA INSURED FUND -- A CLASS
---------------------------------------------------------------------
YEAR EIGHT MONTHS YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $11.050 $10.940 $10.600 $10.730 $9.610 $11.020
Income (loss) from investment operations:
Net investment income ................................... 0.518 0.349 0.533 0.520 0.510 0.540
Net realized and unrealized gain (loss) on investments... (0.530) 0.111 0.341 (0.130) 1.140 (1.390)
------- ------- ------- ------- ------- ------
Total from investment operations......................... (0.012) 0.460 0.874 0.390 1.650 (0.850)
------- ------- ------- ------- ------- ------
Less dividends and distributions:
Dividends from net investment income..................... (0.518) (0.350) (0.534) (0.520) (0.530) (0.520)
Distributions from net realized gain on investments...... -- -- -- -- -- (0.040)
------- ------- ------- ------- ------- ------
Total dividends and distributions ....................... (0.518) (0.350) (0.534) (0.520) (0.530) (0.560)
------- ------- ------- ------- ------- ------
Net asset value, end of period ............................. $10.520 $11.050 $10.940 $10.600 $10.730 $9.610
======= ======= ======= ======= ======= ======
Total Return(2)............................................. (0.17%) 4.28% 8.49% 3.75% 17.52% (7.88%)
Ratios and supplemental data:
Net assets, end of period (000 omitted).................. $268,507 $283,057 $288,494 $304,877 $307,734 $284,132
Ratio of expenses to average net assets.................. 0.94% 0.92% 0.92% 0.92% 0.87% 0.61%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ....... 0.94% 0.94% 0.94% 0.92% 0.92% 0.94%
Ratio of net investment income to average net assets..... 4.74% 4.79% 5.01% 4.93% 4.92% 5.29%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ............................................ 4.74% 4.77% 4.99% 4.93% 4.87% 4.96%
Portfolio turnover....................................... 4% 6% 21% 14% 54% 25%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 33
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period was
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INSURED FUNDS, INC.
MINNESOTA INSURED FUND -- B CLASS
----------------------------------------------------------
YEAR EIGHT MONTHS YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED 3/7/95(4) TO
8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ......................... $11.040 $10.930 $10.580 $10.720 $10.140
Income (loss) from investment
operations:
Net investment income ............. 0.436 0.294 0.454 0.450 0.380
Net realized and unrealized
gain (loss) on investments ....... (0.529) 0.111 0.348 (0.140) 0.580
------- ------- ------- ------- -------
Total from investment
operations ....................... (0.093) 0.405 0.802 0.310 0.960
------- ------- ------- ------- -------
Less dividends and
distributions:
Dividends from net
investment income ................ (0.437) (0.295) (0.452) (0.450) (0.380)
Distributions from net realized
gain on investments .............. -- -- -- -- --
------- ------- ------- ------- -------
Total dividends and distributions (0.437) (0.295) (0.452) (0.450) (0.380)
------- ------- ------- ------- -------
Net asset value, end of period ....... $10.510 $11.040 $10.930 $10.580 $10.720
======= ======= ======= ======= =======
Total Return(2) ...................... (0.91%) 3.76% 7.77% 3.03% 9.59%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) .................... $11,827 $10,374 $8,926 $6,817 $4,655
Ratio of expenses to average
net assets ....................... 1.69% 1.67% 1.67% 1.56% 1.34%(5)
Ratio of expenses to average
net assets prior to
expense limitation and
expenses paid indirectly.......... 1.69% 1.69% 1.69% 1.68% 1.64%(5)
Ratio of net investment
income to average
net assets ...................... 3.99% 4.04% 4.26% 4.29% 4.15%(5)
Ratio of net investment
income to average net
assets prior to expense
limitation and expenses
paid indirectly ................. 3.99% 4.02% 4.24% 4.17% 3.85%(5)
Portfolio turnover ................ 4% 6% 21% 14% 54%
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
VOYAGEUR INSURED FUNDS, INC.
MINNESOTA INSURED FUND -- C CLASS
----------------------------------------------------------------------
YEAR EIGHT MONTHS YEAR YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED ENDED 5/4/94(4) TO
8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period .......................... $11.050 $10.940 $10.600 $10.730 $9.610 $10.230
Income (loss) from investment
operations:
Net investment income............... 0.438 0.295 0.454 0.440 0.430 0.300
Net realized and unrealized
gain (loss) on investments ........ (0.531) 0.110 0.338 (0.130) 1.140 (0.620)
------- ------- ------- ------- ------- ------
Total from investment
operations ........................ (0.093) 0.405 0.792 0.310 1.570 (0.320)
------- ------- ------- ------- ------- ------
Less dividends and
distributions:
Dividends from net
investment income ................. (0.437) (0.295) (0.452) (0.440) (0.450) (0.280)
Distributions from net realized
gain on investments ............... -- -- -- -- -- (0.020)
------- ------- ------- ------- ------- ------
Total dividends and distributions... (0.437) (0.295) (0.452) (0.440) (0.450) (0.300)
------- ------- ------- ------- ------- ------
Net asset value, end of period ........ $10.520 $11.050 $10.940 $10.600 $10.730 $9.610
======= ======= ======= ======-= ======= ======
Total Return(2) ....................... (0.91%) 3.76% 7.66% 2.98% 16.63% (3.14%)
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ..................... $4,253 $3,207 $3,096 $3,126 $3,166 $1,525
Ratio of expenses to average
net assets......................... 1.69% 1.67% 1.67% 1.68% 1.66% 1.36%(5)
Ratio of expenses to average
net assets prior to................
expense limitation and
expenses paid indirectly .......... 1.69% 1.69% 1.69% 1.68% 1.67% 1.68%(5)
Ratio of net investment
income to average
net assets ........................ 3.99% 4.04% 4.26% 4.18% 4.11% 4.68%(5)
Ratio of net investment
income to average net
assets prior to expense
limitation and expenses
paid indirectly .................. 3.99% 4.02% 4.24% 4.18% 4.10% 4.36%(5)
Portfolio turnover ................. 4% 6% 21% 14% 54% 25%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(4) Commencement of operations.
(5) Annualized.
See accompanying notes
<PAGE>
34 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period was
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INTERMEDIATE TAX-FREE FUNDS, INC.
TAX-FREE MINNESOTA INTERMEDIATE FUND - A CLASS
---------------------------------------------------------------------------
YEAR EIGHT MONTHS YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $11.160 $11.170 $10.990 $11.140 $10.500 $11.160
Income (loss) from investment operations:
Net investment income................................ 0.541 0.363 0.535 0.510 0.510 0.450
Net realized and unrealized gain (loss) on
investments ........................................ (0.550) (0.009) 0.180 (0.150) 0.640 (0.660)
-------- -------- ------- -------- -------- --------
Total from investment operations .................... (0.009) 0.354 0.715 0.360 1.150 (0.210)
-------- -------- ------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ................ (0.541) (0.364) (0.535) (0.510) (0.510) (0.450)
-------- -------- ------- -------- -------- --------
Total dividends and distributions ................... (0.541) (0.364) (0.535) (0.510) (0.510) (0.450)
-------- -------- ------- -------- -------- --------
Net asset value, end of period ......................... $10.610 $11.160 $11.170 $10.990 $11.140 $10.500
======== ======== ======== ======== ======== ========
Total Return(2) ........................................ (0.14%) 3.22% 6.69% 3.46% 11.00% (1.91%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............. $56,222 $54,281 $57,524 $66,024 $72,405 $84,168
Ratio of expenses to average net assets ............. 0.79% 0.80% 0.91% 0.89% 0.91% 0.92%
Ratio of expenses to average net assets prior
to expense limitation and expenses paid
indirectly ......................................... 0.79% 0.80% 0.95% 0.89% 0.91% 0.92%
Ratio of net investment income to average net assets. 4.91% 4.90% 4.86% 4.69% 4.61% 4.18%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ......................................... 4.91% 4.90% 4.82% 4.69% 4.61% 4.18%
Portfolio turnover .................................. 13% 14% 21% 28% 40% 42%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 35
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period was
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INTERMEDIATE TAX-FREE FUNDS, INC.
TAX-FREE MINNESOTA INTERMEDIATE FUND - B CLASS
-----------------------------------------------------------------
YEAR EIGHT MONTHS YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED 8/15/95(4) TO
8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ...................................... $11.180 $11.170 $10.990 $11.140 $10.950
Income (loss) from investment operations:
Net investment income .......................... 0.450 0.301 0.437 0.440 0.170
Net realized and unrealized gain (loss)
on investments ................................. (0.552) 0.009 0.190 (0.150) 0.190
-------- -------- -------- -------- --------
Total from investment
operations .................................... (0.102) 0.310 0.627 0.290 0.360
-------- -------- -------- -------- --------
Less dividends:
Dividends from net investment income ........... (0.448) (0.300) (0.447) (0.440) (0.170)
-------- -------- -------- -------- --------
Total dividends ................................ (0.448) (0.300) (0.447) (0.440) (0.170)
-------- -------- -------- -------- --------
Net asset value, end of period .................... $10.630 $11.180 $11.170 $10.990 $11.140
======== ======== ======== ======== ========
Total Return(2) ................................... (0.98%) 2.82% 5.84% 2.74% 3.26%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ................................. $2,878 $1,375 $910 $408 $27
Ratio of expenses to average net assets ........ 1.64% 1.65% 1.81% 1.56% 1.30%(5)
Ratio of expenses to average net assets prior to
expense limitation and expenses
paid indirectly ............................... 1.64% 1.65% 1.85% 1.62% 1.55%(5)
Ratio of net investment income to average
net assets .................................... 4.06% 4.05% 3.96% 3.99% 3.93%(5)
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly ............................... 4.06% 4.05% 3.92% 3.93% 3.68%(5)
Portfolio turnover ............................. 13% 14% 21% 28% 40%
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
VOYAGEUR INTERMEDIATE TAX-FREE FUNDS
TAX-FREE MINNESOTA INTERMEDIATE FUND - C CLASS
-----------------------------------------------------------------------
YEAR EIGHT MONTHS YEAR YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED ENDED 4/30/94(4) TO
8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ...................................... $11.170 $11.170 $10.990 $11.130 $10.500 $10.740
Income (loss) from investment operations:
Net investment income .......................... 0.449 0.301 0.440 0.430 0.420 0.240
Net realized and unrealized gain (loss)
on investments ................................ (0.561) (0.001) 0.187 (0.140) 0.630 (0.240)
-------- -------- -------- -------- -------- --------
Total from investment
operations ..................................... (0.112) 0.300 0.627 0.290 1.050 --
-------- -------- -------- -------- -------- --------
Less dividends:
Dividends from net investment income ........... (0.448) (0.300) (0.447) (0.430) (0.420) (0.240)
-------- -------- -------- -------- -------- --------
Total dividends ................................ (0.448) (0.300) (0.447) (0.430) (0.420) (0.240)
-------- -------- -------- -------- -------- --------
Net asset value, end of period .................... $10.610 $11.170 $11.170 $10.990 $11.130 $10.500
======== ======== ======== ======== ======== ========
Total Return(2) ................................... (1.08%) 2.73% 5.84% 2.69% 10.18% (0.03%)
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ................................. $2,293 $1,601 $1,512 $1,137 $694 $341
Ratio of expenses to average
net assets .................................... 1.64% 1.65% 1.77% 1.64% 1.63% 1.71%(5)
Ratio of expenses to average net assets prior to
expense limitation and expenses
paid indirectly ............................... 1.64% 1.65% 1.81% 1.64% 1.63% 1.71%(5)
Ratio of net investment income to average
net assets .................................... 4.06% 4.05% 4.00% 3.94% 3.82% 3.35%(5)
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly ............................... 4.06% 4.05% 3.96% 3.94% 3.82% 3.35%(5)
Portfolio turnover ............................. 13% 14% 21% 28% 40% 42%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(4) Commencement of operations.
(5) Annualized.
See accompanying notes
<PAGE>
36 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period was
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
MINNESOTA HIGH-YIELD
MUNICIPAL BOND FUND -- A CLASS
-------------------------------------------------------
YEAR EIGHT MONTHS YEAR PERIOD FROM
ENDED ENDED ENDED 6/4/96(4)
8/31/99 8/31/98(1) 12/31/97(3) 12/31/96
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $10.810 $10.650 $10.180 $10.000
Income (loss) from investment operations:
Net investment income .............................. 0.583 0.392 0.643 0.350
Net realized and unrealized gain (loss)
on investments ................................... (0.603) 0.170 0.463 0.180
------- ------- ------- -------
Total from investment operations ................... (0.020) 0.562 1.106 0.530
------- ------- ------- -------
Less dividends:
Dividends from net investment income ............... (0.580) (0.402) (0.636) (0.350)
------- ------- ------- -------
Total dividends .................................... (0.580) (0.402) (0.636) (0.350)
------- ------- ------- -------
Net asset value, end of period ........................ $10.210 $10.810 $10.650 $10.180
======= ======= ======= =======
Total Return(2)........................................ (0.27%) 5.37% 11.26% 5.40%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $41,813 $33,296 $19,017 $ 6,068
Ratio of expenses to average net assets ............ 0.57% 0.40% 0.09% 0.24%(5)
Ratio of expenses to average net assets prior
to expense limitation and expenses paid indirectly 1.07% 1.20% 1.24% 1.25%(5)
Ratio of net investment income to average net assets 5.46% 5.50% 6.16% 5.78%(5)
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ....................................... 4.96% 4.70% 5.01% 4.77%(5)
Portfolio turnover ................................. 35% 7% 23% 15%
</TABLE>
- ---------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(4) Commencement of operations.
(5) Annualized.
See accompanying notes
<PAGE>
for tax-exempt income 37
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period was
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
MINNESOTA HIGH-YIELD
MUNICIPAL BOND FUND -- B CLASS
--------------------------------------------------------
YEAR EIGHT MONTHS YEAR PERIOD FROM
ENDED ENDED ENDED 6/12/96(4) TO
8/31/99 8/31/98(1) 12/31/97(3) 12/31/96
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $10.810 $10.660 $10.190 $ 9.780
Income (loss) from investment operations:
Net investment income .............................. 0.507 0.343 0.557 0.290
Net realized and unrealized gain (loss)
on investments ................................... (0.604) 0.159 0.470 0.410
------- ------- ------- -------
Total from investment operations ................... (0.097) 0.502 1.027 0.700
------- ------- ------- -------
Less dividends:
Dividends from net investment income ............... (0.503) (0.352) (0.557) (0.290)
------- ------- ------- -------
Total dividends .................................... (0.503) (0.352) (0.557) (0.290)
------- ------- ------- -------
Net asset value, end of period ........................ $10.210 $10.810 $10.660 $10.190
======= ======= ======= =======
Total Return(2)........................................ (0.99%) 4.77% 10.41% 7.29%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $15,814 $13,351 $ 8,201 $ 2,738
Ratio of expenses to average net assets ............ 1.32% 1.15% 0.85% 0.95%(5)
Ratio of expenses to average net assets prior
to expense limitation and expenses paid indirectly 1.82% 1.95% 2.00% 2.00%(5)
Ratio of net investment income to average net assets 4.71% 4.75% 5.40% 5.14%(5)
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ....................................... 4.21% 3.95% 4.25% 4.09%(5)
Portfolio turnover ................................. 35% 7% 23% 15%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RESTUBBED TABLE
VOYAGEUR MUTUAL FUNDS, INC.
MINNESOTA HIGH-YIELD
MUNICIPAL BOND FUND -- C CLASS
--------------------------------------------------------
YEAR EIGHT MONTHS YEAR PERIOD FROM
ENDED ENDED ENDED 6/12/96(4) TO
8/31/99 8/31/98(1) 12/31/97(3) 12/31/96
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $10.810 $10.650 $10.180 $ 9.990
Income (loss) from investment operations:
Net investment income .............................. 0.505 0.340 0.572 0.300
Net realized and unrealized gain (loss)
on investments ................................... (0.602) 0.170 0.455 0.190
------- ------- ------- -------
Total from investment operations ................... (0.097) 0.510 1.027 0.490
------- ------- ------- -------
Less dividends:
Dividends from net investment income ............... (0.503) (0.350) (0.557) (0.300)
------- ------- ------- -------
Total dividends .................................... (0.503) (0.350) (0.557) (0.300)
------- ------- ------- -------
Net asset value, end of period ........................ $10.210 $10.810 $10.650 $10.180
======= ======= ======= =======
Total Return(2)........................................ (0.99%) 4.87% 10.41% 5.02%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $ 7,515 $ 5,165 $ 3,178 $ 900
Ratio of expenses to average net assets ............ 1.32% 1.15% 0.83% 0.99%(5)
Ratio of expenses to average net assets prior
to expense limitation and expenses paid indirectly 1.82% 1.95% 1.98% 2.00%(5)
Ratio of net investment income to average net assets 4.71% 4.75% 5.42% 4.90%(5)
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ....................................... 4.21% 3.95% 4.27% 3.89%(5)
Portfolio turnover ................................. 35% 7% 23% 15%
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(4) Commencement of operations.
(5) Annualized.
See accompanying notes
<PAGE>
38 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1999
- --------------------------------------------------------------------------------
Delaware Tax-Free Minnesota Fund ("Tax-Free Minnesota Fund"), a series of the
Voyageur Tax-Free Funds, Inc.; Delaware Minnesota Insured Fund ("Minnesota
Insured Fund"), a series of the Voyageur Insured Funds, Inc.; Delaware Tax-Free
Minnesota Intermediate Fund ("Tax-Free Minnesota Intermediate Fund"), a series
of the Voyageur Intermediate Tax-Free Funds, Inc.; and Delaware Minnesota
High-Yield Municipal Bond Fund ("Minnesota High-Yield Municipal Bond Fund") a
series of the Voyageur Mutual Funds, Inc., (each referred to as a "Fund" or
collectively as the "Funds") are each registered as a Delaware Business Trust
under the Investment Company Act of 1940 (as amended) as open-end management
investment companies. The Tax-Free Minnesota Fund, Minnesota Insured Fund,
Tax-Free Minnesota Intermediate Fund and Minnesota High-Yield Municipal Bond
Fund are registered as a non-diversified Funds.
The Tax-Free Minnesota Fund seeks high current income free from both federal and
state income taxes by investing in investment grade municipal bonds. The
Minnesota Insured Fund seeks high current income free from both federal and
state income taxes with the added safety of an insured portfolio by investing in
insured municipal bonds. The Tax-Free Minnesota Intermediate Fund seeks to
preserve original investment principal while providing income free from both
federal and state income taxes by investing in intermediate term investment
grade municipal bonds. The Minnesota High-Yield Municipal Bond Fund seeks high
current income free from both federal and state income taxes by investing in
medium and lower-grade municipal bonds.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation--Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Money market instruments having less than 60 days to maturity are
valued at amortized cost, which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Funds' Board
of Directors.
Federal Income Taxes--Each Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
Class Accounting--Investment income, common expenses and realized and unrealized
gain (loss) on investments are allocated to the various classes of the Funds on
the basis of daily net assets of each class. Distribution expenses relating to a
specific class are charged directly to that class.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Certain expenses of the Funds are paid through "soft dollar" arrangements with
brokers. These transactions are done subject to best price and execution. The
amount of these expenses for the year ended August 31, 1999 were:
Tax-Free Minnesota Fund ........................ $9,940
Minnesota Insured Fund ......................... 6,829
Tax-Free Minnesota Intermediate Fund ........... 1,427
Minnesota High-Yield Municipal Bond Fund ....... 1,375
<PAGE>
The expenses paid under the above arrangement are included in their respective
expense captions in the Statement of Operations with the corresponding expenses
offset shown as "expenses paid indirectly".
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
them monthly. Capital gains, if any, are distributed annually.
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Funds
pay Delaware Management Company ("DMC"), the Investment Manager of each Fund, an
annual fee, which is calculated daily on the average daily net assets of each
Fund.
Commencing April 1, 1999, and in accordance with the terms of the Investment
Management Agreement, the Minnesota Insured Fund pays DMC, the Investment
Manager of the Fund, an annual fee which is calculated at the rate of 0.50% on
the first $500 million of average daily net assets of the Fund, 0.475% on the
next $500 million, 0.45% on the next $1,500 million and 0.425% on the average
daily net assets in excess of $2,500 million. The Minnesota High-Yield Municipal
Bond Fund pays DMC, the Investment Manager of the Fund, an annual fee which is
calculated at the rate of 0.55% on the first $500 million of average daily net
assets of the Fund, 0.50% on the next $500 million, 0.45% on the next $1,500
million and 0.425% on the average daily net assets in excess of $2,500 million.
Commencing April 15, 1999, and in accordance with the terms of the Investment
Management Agreement, the Tax-Free Minnesota Fund pays DMC, the Investment
Manager of the Fund, an annual fee which is calculated at the rate of 0.55% on
the first $500 million of average daily net assets of the Fund, 0.50% on the
next $500 million, 0.45% on the next $1,500 million and 0.425% on the average
daily net assets in excess of $2,500 million. The Tax-Free Minnesota
Intermediate Fund pays DMC, the Investment Manager of the Fund, an annual fee
which is calculated at the rate of 0.50% on the first $500 million of average
daily net assets of the Fund, 0.475% on the next $500 million, 0.45% on the next
$1,500 million and 0.425% on the average daily net assets in excess of $2,500
million.
Prior to April 1, 1999, and April 15, 1999, respectively, the Tax-Free Minnesota
Fund and the Minnesota Insured Fund paid DMC an annual fee which was calculated
at the rate of 0.50% of the average daily net assets of the Fund, the Tax-Free
Minnesota Intermediate Fund paid DMC an annual fee which was calculated at the
rate of 0.40% of the average daily net assets of the Fund, and the Minnesota
High-Yield Municipal Bond Fund paid DMC an annual fee which was calculated at
the rate of 0.65% of the average daily net assets of the Fund.
<PAGE>
for tax-exempt income 39
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
2. Investment Management and Other Transactions with Affiliates (Continued)
DMC has elected to waive their fees and reimburse each Fund to the extent that
annual operating expenses, exclusive of taxes, interest, brokerage commissions,
distribution expenses and extraordinary expenses, exceed the following
percentages of average daily net assets through December 31, 1999:
OPERATING EXPENSE LIMITATION
AS A PERCENTAGE OF AVERAGE
DAILY NET ASSETS (PER ANNUM)
---------------------------
Tax-Free Minnesota Fund ............................. 0.75%*
Minnesota Insured Fund ............................. 0.75%**
Tax-Free Minnesota Intermediate Fund ................ 0.75%
Minnesota High-Yield Municipal Bond Fund ............ 0.50%***
*Prior to January 1, 1999, the expense limitation was 0.69% for Tax-Free
Minnesota Fund.
**Prior to January 1, 1999, the expense limitation was 0.71% for the
Minnesota Insured Fund.
***Prior to July 1, 1999, the expense limitation was 0.25% for the Minnesota
High-Yield Municipal Bond Fund.
The Funds have engaged Delaware Service Company, Inc. ("DSC"), an affiliate of
DMC, to provide dividend disbursing, transfer agent and accounting services.
Each Fund pays DSC a monthly fee based on the number of shareholder accounts,
shareholder transactions and average net assets, subject to certain minimums.
At August 31, 1999, the Funds had payables to affiliates as follows:
<TABLE>
<CAPTION>
DIVIDEND DISBURSING,
TRANSFER AGENT FEES,
ACCOUNTING FEES AND
INVESTMENT MANAGEMENT OTHER EXPENSES PAYABLE OTHER EXPENSES PAYABLE
FEE PAYABLE TO DMC TO DSC TO DMC AND AFFILIATES
---------------------- ---------------------- ----------------------
<S> <C> <C> <C>
Tax-Free Minnesota Fund ..................... $54,486 $44,186 $36,759
Minnesota Insured Fund ..................... 48,173 29,838 25,865
Tax-Free Minnesota Intermediate Fund ........ 10,315 7,141 5,221
Minnesota High-Yield Municipal Bond Fund .... -- 7,567 5,658
</TABLE>
Pursuant to the Distribution Agreement, the Funds pay Delaware Distributors,
L.P. ("DDLP"), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.25% of the average daily net assets of the A Class for the Tax-Free
Minnesota Fund, the Minnesota Insured Fund and the Minnesota High-Yield
Municipal Bond Fund and 0.15% of the average daily net assets of the Tax-Free
Minnesota Intermediate Fund A Class and 1.00% of the average daily net assets of
the B and C Class for each Fund.
For the year ended August 31, 1999, DDLP earned commissions on sales of the Fund
A Class shares for each Fund as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Tax-Free Minnesota Fund ...................... $77,659 Tax-Free Minnesota Intermediate Fund................... $ 9,945
Minnesota Insured Fund ....................... 47,700 Minnesota High-Yield Municipal Bond Fund .............. 38,482
</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.
3. Investments
During the year ended August 31, 1999, the Funds made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments for each Fund as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -------------
<S> <C> <C>
Tax-Free Minnesota Fund ........................ $74,828,738 $80,778,163
Minnesota Insured Fund ......................... 10,429,807 13,170,817
Tax-Free Minnesota Intermediate Fund ........... 17,093,976 8,117,760
Minnesota High-Yield Municipal Bond Fund ....... 36,135,693 20,949,546
</TABLE>
At August 31, 1999, the aggregate cost of securities and unrealized appreciation
(depreciation) for federal income tax purposes for each Fund were as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
COST OF AGGREGATE UNREALIZED AGGREGATE UNREALIZED APPRECIATION
INVESTMENTS APPRECIATION DEPRECIATION (DEPRECIATION)
------------ -------------------- -------------------- --------------
<S> <C> <C> <C> <C>
Tax-Free Minnesota Fund ....................... $400,487,340 $16,609,601 ($4,217,695) $12,391,906
Minnesota Insured Fund ........................ 270,924,726 12,158,758 (1,539,776) 10,618,982
Tax-Free Minnesota Intermediate Fund .......... 62,675,477 1,132,510 (1,566,099) (433,589)
Minnesota High-Yield Municipal Bond Fund ...... 66,263,218 592,536 (2,086,501) (1,493,965)
</TABLE>
<PAGE>
40 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. Investments (continued)
For federal income tax purposes, the Funds had accumulated capital losses at
August 31, 1999 as follows:
<TABLE>
<CAPTION>
YEAR OF EXPIRATION
2003 2004 2005 2006 2007 TOTAL
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Minnesota Insured Fund ...................... $5,327,280 $572,208 -- -- -- $5,899,488
Tax-Free Minnesota Intermediate Fund......... -- 43,983 -- -- -- 43,983
Minnesota High-Yield Municipal Bond Fund .... -- 6,809 $4,334 $648 $369 12,160
</TABLE>
4. Capital Stock
Transactions in Capital Stock shares were as follows:
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC. VOYAGEUR INSURED FUNDS, INC.
TAX-FREE MINNESOTA FUND MINNESOTA INSURED FUND
--------------------------------------------- ----------------------------------------------
YEAR ENDED EIGHT MONTHS YEAR ENDED YEAR ENDED EIGHT MONTHS YEAR ENDED
8/31/99 ENDED 8/31/98 12/31/97 8/31/99 ENDED 8/31/98 12/31/97
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class ......................... 2,462,224 1,291,014 2,445,000 1,515,691 787,164 1,511,145
B Class ......................... 361,886 165,933 230,517 311,761 157,408 262,553
C Class ......................... 268,078 171,958 99,577 159,649 27,674 68,641
Shares issued upon reinvestment of
distributions from net investment
income and net realized gain on
investments:
A Class ......................... 1,106,511 742,960 1,191,155 816,740 557,163 983,624
B Class ......................... 27,985 15,705 21,253 27,641 16,002 23,426
C Class ......................... 16,547 7,877 8,668 11,362 5,937 10,782
---------- ---------- ---------- ---------- ---------- ----------
4,243,231 2,395,447 3,996,170 2,842,844 1,551,348 2,860,171
---------- ---------- ---------- ---------- ---------- ----------
Shares repurchased:
A Class ......................... (3,304,277) (2,413,567) (5,840,279) (2,426,865) (2,096,352) (4,894,549)
B Class ......................... (88,793) (31,308) (118,151) (153,897) (50,332) (113,408)
C Class ......................... (105,337) (41,574) (118,065) (57,033) (26,316) (91,495)
---------- ---------- ---------- ---------- ---------- ----------
(3,498,407) (2,486,449) (6,076,495) (2,637,795) (2,173,000) (5,099,452)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) ............ 744,824 (91,002) (2,080,325) 205,049 (621,652) (2,239,281)
========== ========== ========== ========== ========== ==========
VOYAGEUR INTERMEDIATE TAX-FREE FUNDS, INC VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE MINNESOTA INTERMEDIATE FUND MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND
-------------------------------------------- --------------------------------------------
YEAR ENDED EIGHT MONTHS YEAR ENDED YEAR ENDED EIGHT MONTHS YEAR ENDED
8/31/99 ENDED 8/31/98 12/31/97 8/31/99 ENDED 8/31/98 12/31/97
Shares sold:
A Class ......................... 1,024,816 347,131 642,232 1,292,595 1,474,592 1,228,700
B Class ......................... 151,759 63,007 60,795 402,309 502,630 531,417
C Class ......................... 111,369 57,860 73,831 293,311 216,871 240,090
Shares issued upon reinvestment of
distributions from net investment
income and net realized gain on
investments:
A Class ......................... 192,307 123,589 198,390 107,761 54,225 48,680
B Class ......................... 5,176 2,221 2,115 38,021 18,875 15,493
C Class ......................... 6,397 3,443 4,721 19,496 9,250 8,637
---------- ---------- ---------- ---------- ---------- ----------
1,491,824 597,251 982,084 2,153,493 2,276,443 2,073,017
---------- ---------- ---------- ---------- ---------- ----------
Shares repurchased:
A Class ......................... (780,045) (760,113) (1,698,909) (386,064) (233,795) (87,722)
B Class ......................... (9,190) (23,623) (18,600) (126,553) (56,459) (46,061)
C Class ......................... (45,076) (53,354) (46,700) (54,733) (46,620) (38,834)
---------- ---------- ---------- ---------- ---------- ----------
(834,311) (837,090) (1,764,209) (567,350) (336,874) (172,617)
---------- ---------- ---------- ---------- ---------- ----------
Net increase (decrease) ............ 657,513 (239,839) (782,125) 1,586,143 1,939,569 1,900,400
========== ========== ========== ========== ========== ==========
</TABLE>
<PAGE>
for tax-exempt income 41
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. Lines of Credit
Committed lines of credit were $21,600,000 for Tax-Free Minnesota Fund,
$14,900,000 for Minnesota Insured Fund, $3,100,000 for Tax-Free Minnesota
Intermediate Fund and $1,600,000 for Minnesota High-Yield Municipal Bond Fund.
No amounts were outstanding at August 31, 1999, or at any time during the fiscal
year.
6. Credit and Market Risk
The Funds concentrate their investments in securities issued by municipalities,
mainly in Minnesota. 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.
7. Tax Information (Unaudited)
The information set forth is for each Fund's fiscal year as required by federal
laws. Shareholders, however, must report distributions on a calendar year basis
for income tax purposes, which may include distributions for portions of two
fiscal years of a Fund. Accordingly, the information needed by shareholders for
income tax purposes will be sent to them in early 2000. Please consult your tax
advisor for proper treatment of this information.
For the fiscal year ended August 31, 1999, each Fund designates as long term
capital gains, ordinary income and tax-exempt income distributions paid during
the year as follows:
<TABLE>
<CAPTION>
LONG-TERM ORDINARY TAX-EXEMPT
CAPITAL GAIN INCOME INCOME TOTAL
FUND DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS DISTRIBUTIONS
- ------------------------ -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Tax-Free Minnesota Fund ......................... 6% -- 94% 100%
Minnesota Insured Fund ......................... -- -- 100% 100%
Tax-Free Minnesota Intermediate Fund ............ -- -- 100% 100%
Minnesota High-Yield Municipal Bond Fund ........ -- -- 100% 100%
</TABLE>
<PAGE>
42 for tax-exempt income
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors
Voyageur Tax-Free Funds, Inc. - Delaware Tax-Free Minnesota Fund
Voyageur Insured Funds, Inc. - Delaware Minnesota Insured Fund
Voyageur Intermediate Tax-Free Funds, Inc. - Delaware Tax-Free Minnesota
Intermediate Fund
Voyageur Mutual Funds, Inc. - Delaware Minnesota High-Yield Municipal Bond Fund
We have audited the accompanying statements of net assets of Delaware Tax-Free
Minnesota Fund, Delaware Minnesota Insured Fund, Delaware Tax-Free Minnesota
Intermediate Fund and Delaware Minnesota High-Yield Municipal Bond Fund (the
"Funds") as of August 31, 1999, and the related statements of operations for the
year then ended, the statements of changes in net assets for each of the periods
indicated therein, and the financial highlights for each of the periods
presented from January 1, 1997 through August 31, 1999. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights for the periods presented through December 31, 1996 were audited by
other auditors whose reports thereon dated February 14, 1997 expressed
unqualified opinions on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of August 31, 1999, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds at August 31, 1999, the results of their operations for
the year then ended, the changes in their net assets for each of the periods
indicated therein, and their financial highlights for each of the periods
presented from January 1, 1997 through August 31, 1999, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
---------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
October 1, 1999
<PAGE>
for tax-exempt income 43
PROXY RESULTS (UNAUDITED)
- --------------------------------------------------------------------------------
Voyageur Insured Funds, Inc., Voyageur Intermediate Tax-Free Funds, Inc.,
Voyageur Mutual Funds, Inc., and Voyageur Tax-Free Funds, Inc. shareholders
voted on the following proposals at the annual meeting of shareholders on March
17, 1999, or as adjourned. The description of each proposal and number of shares
voted are as follows:
1. To elect the Voyaguer Insured Funds, Inc. Board of Directors
SHARES SHARES VOTED
VOTED WITHHELD
FOR AUTHORITY
---------------------------
Jeffrey J. Nick* ................................ 29,291,395 2,217,863
Walter P. Babich ................................ 29,291,706 2,217,552
Anthony D. Knerr ................................ 29,305,876 2,203,382
Ann R. Leven .................................... 29,306,599 2,202,659
Thomas F. Madison ............................... 29,315,936 2,193,322
Charles E. Peck ................................. 29,315,936 2,193,322
Wayne A. Stork .................................. 29,316,807 2,192,451
Jan R. Yeomans .................................. 29,316,807 2,192,451
To elect the Voyaguer Intermediate Tax-Free Funds, Inc. Board of Directors
SHARES SHARES VOTED
VOTED WITHHELD
FOR AUTHORITY
---------------------------
Jeffrey J. Nick* ................................ 3,590,723 226,123
Walter P. Babich ................................ 3,591,726 225,120
Anthony D. Knerr ................................ 3,598,903 217,943
Ann R. Leven .................................... 3,600,129 216,717
Thomas F. Madison ............................... 3,600,129 216,717
Charles E. Peck ................................. 3,600,129 216,717
Wayne A. Stork .................................. 3,600,129 216,717
Jan R. Yeomans .................................. 3,600,129 216,717
To elect the Voyaguer Mutual Funds, Inc. Board of Directors
SHARES SHARES VOTED
VOTED WITHHELD
FOR AUTHORITY
---------------------------
Jeffrey J. Nick* ................................ 23,375,980 933,942
Walter P. Babich ................................ 23,375,739 934,183
Anthony D. Knerr ................................ 23,481,657 828,265
Ann R. Leven .................................... 23,479,947 829,975
Thomas F. Madison ............................... 23,485,349 824,573
Charles E. Peck ................................. 23,485,349 824,573
Wayne A. Stork .................................. 23,485,349 824,573
Jan R. Yeomans .................................. 23,485,349 824,573
To elect the Voyaguer Tax Free Funds, Inc. Board of Directors
SHARES SHARES VOTED
VOTED WITHHELD
FOR AUTHORITY
---------------------------
Jeffrey J. Nick* ................................ 24,689,040 1,566,542
Walter P. Babich ................................ 24,673,024 1,582,558
Anthony D. Knerr ................................ 24,682,070 1,573,512
Ann R. Leven .................................... 24,708,871 1,546,711
Thomas F. Madison ............................... 24,678,176 1,577,406
Charles E. Peck ................................. 24,709,389 1,546,193
Wayne A. Stork .................................. 24,709,389 1,546,193
Jan R. Yeomans .................................. 24,709,389 1,546,193
- ----------------------
* Mr. Nick resigned from the Board of Directors (or Trustees for the Company) on
June 4, 1999.
<PAGE>
2. To approve the reclassification of the Voyageur Tax-Free Funds, Inc.
investment objective from fundamental to non-fundamental.
FOR AGAINST ABSTAIN
------------------------------------
Delaware Tax-Free Minnesota Fund ....... 18,481,304 1,830,025 2,075,539
Delaware Minnesota Insured Fund ........ 13,707,163 1,479,912 2,067,409
Delaware Tax-Free Minnesota
Intermediate Fund ...................... 3,004,663 141,822 304,651
Delaware Minnesota High-Yield
Municipal Bond Fund .................... 2,606,287 157,781 180,425
3. To approve a change in the Fund's fundamental policy concerning
diversification of investments.
FOR AGAINST ABSTAIN
------------------------------------
Delaware Tax-Free Minnesota Fund ....... 18,739,656 1,731,757 1,915,455
Delaware Minnesota Insured Fund ........ 13,970,298 1,315,044 1,969,143
Delaware Tax-Free Minnesota
intermediate Fund ...................... 3,027,870 149,662 273,604
4. To approve standardized fundamental investment restrictions for the Fund
(proposal involves separate votes on seven sub-proposals 3A-3G).
4A.To adopt a new fundamental investment restriction concerning concentration of
the investments in the same industry.
FOR AGAINST ABSTAIN
------------------------------------
Delaware Tax-Free Minnesota Fund ....... 18,970,371 1,378,326 2,038,168
Delaware Minnesota Insured Fund ........ 14,270,509 914,040 2,069,936
Delaware Tax-Free Minnesota
Intermediate Fund ...................... 3,060,928 120,223 269,984
Delaware Minnesota High-Yield
Municipal Bond Fund .................... 2,680,949 63,604 199,941
4B.To adopt a new fundamental investment restriction concerning borrowing money
and issuing senior securities.
FOR AGAINST ABSTAIN
------------------------------------
Delaware Tax-Free Minnesota Fund ....... 18,882,264 1,567,960 1,936,642
Delaware Minnesota Insured Fund ........ 13,837,542 1,158,459 2,258,484
Delaware Tax-Free Minnesota
Intermediate Fund ...................... 3,015,207 142,562 293,366
Delaware Minnesota High-Yield
Municipal Bond Fund .................... 2,607,817 106,962 229,714
4C.To adopt a new fundamental investment restriction concerning underwriting.
FOR AGAINST ABSTAIN
------------------------------------
Delaware Tax-Free Minnesota Fund ....... 18,864,132 1,373,548 2,149,186
Delaware Minnesota Insured Fund ........ 14,144,994 1,052,056 2,057,435
Delaware Tax-Free Minnesota
Intermediate Fund ...................... 3,039,705 113,784 297,647
Delaware Minnesota High-Yield
Municipal Bond Fund .................... 2,610,234 53,349 280,911
<PAGE>
44 for tax-exempt income
PROXY RESULTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
4D.To adopt a new fundamental investment restriction concerning investments in
real estate.
FOR AGAINST ABSTAIN
------------------------------------
Delaware Tax-Free Minnesota Fund ....... 18,795,495 1,506,655 2,084,717
Delaware Minnesota Insured Fund ........ 13,996,688 1,295,087 1,962,709
Delaware Tax-Free Minnesota
Intermediate Fund ...................... 3,042,385 131,297 277,354
Delaware Minnesota High-Yield
Municipal Bond Fund .................... 2,603,985 86,892 253,617
4E.To adopt a new fundamental investment restriction concerning investments in
commodities.
FOR AGAINST ABSTAIN
------------------------------------
Delaware Tax-Free Minnesota Fund ....... 18,757,833 1,666,530 1,962,503
Delaware Minnesota Insured Fund ........ 13,890,557 1,122,994 2,240,934
Delaware Tax-Free Minnesota
Intermediate Fund ...................... 2,976,617 152,662 324,858
Delaware Minnesota High-Yield
Municipal Bond Fund .................... 2,607,247 86,205 251,041
4F.To adopt a new fundamental investment restriction concerning lending by the
Fund.
FOR AGAINST ABSTAIN
------------------------------------
Delaware Tax-Free Minnesota Fund ....... 18,528,255 1,583,273 2,275,338
Delaware Minnesota Insured Fund ........ 13,859,713 1,034,093 2,360,678
Delaware Tax-Free Minnesota
Intermediate Fund ...................... 2,997,986 157,353 295,797
Delaware Minnesota High-Yield
Municipal Bond Fund .................... 2,668,410 64,248 211,836
4G.To reclassify all current fundamental investment restrictions as
non-fundamental.
FOR AGAINST ABSTAIN
------------------------------------
Delaware Tax-Free Minnesota Fund ....... 18,186,503 1,798,679 2,401,685
Delaware Minnesota Insured Fund ........ 13,647,616 1,321,788 2,285,081
Delaware Tax-Free Minnesota
Intermediate Fund ...................... 2,985,804 176,908 288,423
Delaware Minnesota High-Yield
Municipal Bond Fund .................... 2,582,738 161,514 200,241
5. To approve a new investment management agreement with Delaware Management
Company for the Fund.
FOR AGAINST ABSTAIN
------------------------------------
Delaware Tax-Free Minnesota Fund ....... 18,304,903 1,834,160 2,247,805
Delaware Minnesota Insured Fund ........ 15,731,091 1,226,814 2,154,440
Delaware Tax-Free Minnesota I
intermediate Fund ..................... 2,965,512 194,588 291,035
Delaware Minnesota High-Yield
Municipal Bond Fund ................... 3,091,117 149,252 164,298
<PAGE>
6. To ratify the selection of Ernst & Young LLP, as the independent auditors for
Voyageur Insured Funds, Inc.
FOR AGAINST ABSTAIN
------------------------------------
28,810,216 369,512 2,329,526
To ratify the selection of Ernst & Young LLP, as the independent auditors for
Voyageur Intermediate Tax-Free Funds, Inc.
FOR AGAINST ABSTAIN
------------------------------------
3,521,204 63,601 232,039
To ratify the selection of Ernst & Young LLP, as the independent auditors for
Voyageur Mutual Funds, Inc.
FOR AGAINST ABSTAIN
------------------------------------
23,192,942 243,342 873,624
To ratify the selection of Ernst & Young LLP, as the independent auditors for
Voyageur Tax Free Funds, Inc.
FOR AGAINST ABSTAIN
------------------------------------
24,357,056 333,988 1,564,528
7. To approve the restructuring of the Voyaguer Insured Funds, Inc. from a
Minnesota Corporation into a Delaware Business Trust and the dissolution of
the Minnesota Corporation.
FOR AGAINST ABSTAIN
------------------------------------
22,707,761 2,602,149 2,903,902
To approve the restructuring of the Voyaguer Intermediate Tax-Free Funds,
Inc. from a Minnesota Corporation into a Delaware Business Trust and the
dissolution of the Minnesota Corporation.
FOR AGAINST ABSTAIN
------------------------------------
2,925,263 250,760 275,112
To approve the restructuring of the Voyaguer Mutual Funds, Inc. from a
Minnesota Corporation into a Delaware Business Trust and the dissolution of
the Minnesota Corporation.
FOR AGAINST ABSTAIN
------------------------------------
18,642,505 933,974 1,312,086
To approve the restructuring of the Voyaguer Tax Free Funds, Inc. from a
Minnesota Corporation into a Delaware Business Trust and the dissolution of
the Minnesota Corporation.
FOR AGAINST ABSTAIN
------------------------------------
18,966,804 3,045,110 2,212,199
<PAGE>
THIS ANNUAL REPORT IS FOR THE INFORMATION OF SHAREHOLDERS OF THE MINNESOTA
MUNICIPAL Bond Funds, but it may be used with prospective investors when
preceded or accompanied by a current Prospectus for Delaware Minnesota Municipal
Bond Funds 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 the Funds. You should
read the prospectus carefully before you invest or send money. The figures in
this report represent past results which are not a guarantee of future results.
The return and principal value of an investment in each Fund will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
Board of Trustees
WAYNE A. STORK
Chairman
Delaware Investments Family of Funds
Philadelphia, PA
WALTER P. BABICH
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA
DAVID K. DOWNES
President and Chief Executive Officer
Delaware Investments Family of Funds
Philadelphia, PA
JOHN H. DURHAM
Partner, Complete Care Services
Horsham, PA
ANTHONY D. KNERR
Consultant, Anthony Knerr & Associates
New York, NY
ANN R. LEVEN
Treasurer, National Gallery of Art
Washington, DC
THOMAS F. MADISON
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
CHARLES E. PECK
Secretary/Treasurer, Enterprise Homes, Inc.
Fredericksburg, VA
JAN L. YEOMANS
Vice President and Treasurer
3M Corporation
St. Paul, Minnesota
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Affiliated Officers
RICHARD J. FLANNERY
Executive Vice President and General Counsel
Delaware Investments Family of Funds
Philadelphia, PA
BRUCE D. BARTON
President and Chief Executive Officer
Delaware Distributors, L.P.
Philadelphia, PA
ERIC E. MILLER
Senior Vice President, Secretary
and Deputy General Counsel
Delaware Investments Family of Funds
Philadelphia, PA
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directors
& officers
INVESTMENT MANAGER
Delaware Management Company
Philadelphia, Pennsylvania
INTERNATIONAL AFFILIATE
Delaware International Advisers Ltd.
London, England
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia, Pennsylvania
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia, Pennsylvania
1818 Market Street
Philadelphia, PA 19103-3682
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When used with prospective investors, this report must be preceded or
accompanied by a current Delaware Minnesota Municipal Bond Funds Prospectus and
the Delaware Investments Performance Update for the most recently completed
calendar quarter. For a prospectus of any other mutual fund from Delaware
Investments, contact your financial adviser or Delaware Investments.
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
DELAWARE(SM)
INVESTMENTS
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Philadelphia o London
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Funds are
not FDIC or NCUSIF insured, are not guaranteed by any bank or any credit union,
and involve investment risk, including the possible loss of the principal amount
invested. Shares of the Funds are not bank or credit union deposits.
(C) Delaware Distributors, L.P.
Printed in the USA
on recycled paper
(2174)
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