<PAGE>
FOR TAX-EXEMPT INCOME
Minnesota Municipal
Bond Funds
(photo of illustration from
Tax-Exempt Income Brochure)
service and guidance
professional management
goals
1999
Semi-Annual
Report
TAX-FREE MINNESOTA FUND
MINNESOTA INSURED FUND
TAX-FREE MINNESOTA INTERMEDIATE FUND
MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London
<PAGE>
professional
management
professional management
MORE THAN 70 YEARS
of investment experience has taught us that disciplined strategies and prudent
risk management are a sound approach to any market environment.
goals
(various photos demonstrating service,
guidance, professional management and
goals)
goals
WHATEVER YOUR GOALS, the years ahead will be shaped by choices you make today.
Delaware offers many options that can be an appropriate part of a sound
investment plan.
service and
guidance
service and guidance
DELAWARE BELIEVES THAT THE GUIDANCE of a professional financial adviser is vital
to your long-term success. We are committed to providing you and your adviser
with the highest quality information and service.
<PAGE>
March 12, 1999
for tax-
exempt
income
1
Dear Shareholder:
OVER THE LAST SIX MONTHS, INVESTOR preference shifted back and forth between the
security of U.S. Treasury bonds and the high return potential of stocks. Late in
the summer, Treasuries rallied as the Asian recession created a ripple effect in
the U.S. Reduced overseas demand for U.S. exports and less expensive foreign
imports curtailed U.S. corporate earnings growth. Recessions in Russia and
Brazil precipitated a late summer storm in the equity markets, pushing investors
to the safe haven of U.S. Treasuries.
Municipal bonds have historically provided approximately 83% of the income
provided by Treasuries. Although municipal bonds typically provided less income
than Treasuries, this has been balanced by the fact that municipal income is
tax-exempt.
In the fall of 1998, municipal bonds provided remarkable relative value to
U.S Treasuries. As global economies became more volatile, strong worldwide
demand for U.S. Treasuries pushed prices higher, which lowered their yields. At
the same time, a large supply of municipal bonds, coupled with stable demand,
limited municipal bond price gains. This caused the yield difference between
Treasuries and municipal bonds to narrow substantially. In October, 30-year
municipal bonds yielded as much as 98% of what comparable Treasuries yielded.
The Federal Reserve responded to the global financial crisis with three
interest rate reductions during the fall of 1998. Investors saw the additional
liquidity as a Federal Reserve commitment to sustain U.S. economic growth amid
worldwide recession. This set the stage for a stock market recovery that began
during the fall of 1998 and continued into the new year.
IN THE FALL OF 1998, MUNICIPAL BONDS PROVIDED REMARKABLE RELATIVE VALUE TO U.S
TREASURIES.
During the first two months of 1999, strength in the domestic economy and
fading concerns about global volatility reduced the appeal of U.S. Treasury
bonds. Municipal bond prices held up much better than Treasuries due to a
declining supply.
The returns of our Minnesota funds, in most cases, reflect conditions in the
market and alternating investor considerations of safety versus performance.
Since municipal bond prices typically lag Treasury prices during a strong bond
market rally, Treasuries
<PAGE>
for tax-
exempt
income
2
outperformed municipals during flights to quality in the fall of 1998. Then as
the domestic impact of global recession became less of a concern in the winter,
the appeal of higher quality investments waned and investors returned to equity
markets.
We believe municipal bond funds provide diversification that can help reduce
the volatility of a portfolio heavily weighted in equities. Municipal bond funds
can also help provide for potential high income, free from both federal and
Minnesota state taxes.
In the pages that follow, your Fund's portfolio manager, Elizabeth H. Howell,
reviews the performance of each Minnesota municipal bond fund and provides her
outlook for the remainder of the year. Thank you for your continued confidence
in Delaware Investments.
Sincerely,
/s/ Jeffrey J. Nick
- -----------------------------------
JEFFREY J. NICK
Chairman, President and
Chief Executive Officer
Delaware Investments Family of Funds
CUMULATIVE TOTAL RETURNS
- --------------------------------------------------------------------------------
Six Months Ended
February 28, 1999
- --------------------------------------------------------------------------------
Tax-Free Minnesota Fund A Class +1.94%
Minnesota Insured Fund A Class +1.81%
Lipper Minnesota Municipal Debt Fund Average (47 funds) +1.92%
- --------------------------------------------------------------------------------
Tax-Free Minnesota Intermediate Fund A Class +1.54%
Lipper Other States Intermediate Municipal Debt Fund
Average (80 funds) +1.96%
- --------------------------------------------------------------------------------
Minnesota High Yield Municipal Bond Fund A Class +1.88%
Lipper High Yield Municipal Debt Fund Average (53 funds) +1.46%
- --------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +2.62%
Lehman Brothers Insured Municipal Bond Index +2.54%
Lehman Brothers Five-Year Municipal Bond Index +2.82%
All performance shown above is at net asset value and assumes reinvestment of
distributions. Past performance does not guarantee future results. Performance
of other Fund classes varies due to different charges and expenses. The
unmanaged Lehman Brothers Indexes are composed of bonds with a variety of
quality ratings from many states. Complete performance information for all funds
can be found on pages 8 and 9.
Jeffrey J. Nick Named Chairman
On December 17, 1998, Jeffrey J. Nick was named Chairman of the Delaware
Investments Family of Funds. He replaces Wayne A. Stork who has retired as
Chairman of the Board of Directors, but continues to serve as a Board Member.
Mr. Nick was named President and Chief Executive Officer of Delaware Investments
Family of Funds in October 1997. He has been CEO of Lincoln National Investment
Companies, an indirect parent company of Delaware Investments, since October
1996 and previously managed Lincoln's operations in the United Kingdom. Mr. Nick
holds an MBA from the University of Chicago and a Bachelor of Arts degree from
Princeton University.
<PAGE>
for tax-
exempt
income
3
Portfolio Manager's Review
BY ELIZABETH H. HOWELL
Vice President/Senior Portfolio Manager
March 12, 1999
In 1998, state and local governments issued municipal bonds at a near-record
volume. New municipal bond issues reached $285 billion in 1998, second only to
the record $292 billion issued in 1993. Education issues led the way, followed
by bonds sold to fund health care and transportation projects.
TAX-FREE MINNESOTA FUND'S DURATION WAS SLIGHTLY LONGER THAN OUR PEER GROUP,
ALLOWING US TO TAKE ADVANTAGE OF THE HIGHER YIELDS OFFERED BY LONGER-TERM
SECURITIES.
New bond issuance cooled off substantially over the first two months of 1999.
At just $13.8 billion, January's new issue volume was down 24% from the same
period in 1998 (Source: The Bond Buyer). The supply drought continued in
February, driven by reduced refunding activity and growing municipal government
surpluses. Reduced municipal bond supply early in 1999 helped keep prices from
falling as quickly as Treasuries in the wake of stronger-than-expected U.S.
economic growth.
Throughout the final four months of 1998, Minnesota municipalities continued
to issue bonds at the brisk pace set earlier in the year. An expanding state
economy and lower interest rates helped create an attractive environment to
issue debt.
With interest rates at or near 25-year lows, many municipalities refinanced
bonds to pay off older, higher interest debt. Just as happened nationally,
however, new municipal bond issues in Minnesota fell sharply in 1999.
TAX-FREE MINNESOTA FUND
Tax-Free Minnesota Fund provided a total return of +1.94% (Class A shares at net
asset value with distributions reinvested) for the six months ended February 28,
1999.
This performance slightly exceeded the average return of the Fund's peers in
the Lipper Minnesota Municipal Debt Fund category, but fell short of the Lehman
Brothers Municipal Bond Index, the Fund's unmanaged benchmark. The Lehman
Brothers index, however, is composed of bonds from many states and does not
reflect municipal bond performance specifically in the state of Minnesota.
We selected bonds for Tax-Free Minnesota Fund which we believed had the
potential to improve total return for the portfolio and provide a competitive
dividend yield. 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 selling for less than their
face value with strong credit ratings. 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.
<PAGE>
for tax-
exempt
income
4
As of February 28, 1999, Tax-Free Minnesota Fund's average effective duration
was 6.6 years. This allowed us to take advantage of the higher yields offered by
longer term securities. Despite the robust performance of the U.S. economy in
recent months, in our opinion, global recession should dampen U.S. economic
growth, keeping inflation very low and favoring lower interest rates in the
foreseeable future.
MINNESOTA INSURED FUND
Minnesota Insured Fund provided a total return of +1.81% (Class A shares at net
asset value with distributions reinvested) for the six months ended February 28,
1999.
This return was slightly less than the average return of other Minnesota
insured municipal bond funds. The Fund also underperformed the unmanaged Lehman
Brothers Insured Municipal Bond Index. The Lehman Brothers index, however, is
composed of insured municipal bond funds from many states, not just in the state
of Minnesota.
In 1998, more than 50% of all new municipal issues carried insurance
according to Securities Data Corporation, up from 23% of all new municipal
issues in 1988. This demonstrates growing demand for the added security of
insured municipal debt. The bonds in Tax-Free Minnesota Insured Fund's portfolio
are protected by private insurance, which guarantees the timely payment of
principal and interest. All of the insured bonds in the Fund carry AAA ratings.
IN MOST CASES, ONCE A BOND IS PRE-REFUNDED WE CONTINUE TO HOLD IT. THIS ALLOWS
THE FUND TO COLLECT AN ATTRACTIVE LEVEL OF CURRENT INCOME AND BENEFIT FROM
BETTER PROTECTION OF PRINCIPAL.
Over the last six months, more than 13% of the Fund's holdings were
pre-refunded. 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. In general, prices for shorter bonds benefit from reduced sensitivity
to interest rate fluctuations.
PORTFOLIO HIGHLIGHTS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
FEBRUARY 28, 1999
Tax-Free Minnesota Tax-Free Minnesota Minnesota High Yield
Minnesota Fund Insured Fund Intermediate Fund Municipal Bond Fund
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Average Maturity 20.0 years 18.3 years 13.1 years 23.0 years
Average Effective Maturity* 7.99 years 7.79 years 7.30 years 13.46 years
Effective Duration 6.6 years 6.0 years 5.9 years 8.1 years
AMT Income** None 21.80% None None
Current 30-Day SEC Yield
(A Class) 3.87% 3.61% 3.84% 5.04%
(B Class) 3.27% 3.00% 3.09% 4.48%
(C Class) 3.27% 2.99% 3.10% 4.47%
</TABLE>
*Average effective maturity takes into consideration all prepayments, puts, and
adjustable coupons.
**Percentage of income generated for the six months ended February 28, 1999 that
was subject to the federal alternative minimum tax.
<PAGE>
for tax-
exempt
income
5
In most cases, once a bond is pre-refunded we continue to hold it. This
allows the Fund to collect an attractive level of current income and benefit
from better protection of principal.
TAX-FREE MINNESOTA
INTERMEDIATE FUND
Tax-Free Minnesota Intermediate Fund provided a total return of +1.54% (Class A
shares at net asset value with distributions reinvested) for the six months
ended February 28, 1999.
OUR LOW-TURNOVER APPROACH TO INVESTING HELPED LIMIT TAXABLE DISTRIBUTIONS TO OUR
SHAREHOLDERS.
The Fund modestly underperformed a peer group of municipal bond funds from a
variety of states which invest in intermediate length securities. We were also
unable to keep pace with the Fund's multi-state benchmark, the Lehman Brothers
Five-Year Municipal Bond Index.
This underperformance can be partially explained by the Fund's average
effective duration. As of February 28, 1999, Tax-Free Minnesota Intermediate
Fund's duration was positioned at 5.9 years. This prevented us from taking
advantage of the higher yields of longer-term investments. As securities in the
Fund's portfolio mature, we will strive to keep Tax-Free Minnesota Intermediate
Fund's duration close to the average for all intermediate funds.
Our primary goal for 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 the higher income potential of longer bonds.
Consistent with our other Minnesota funds, we attempted to minimize capital
gains for 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.
ASSET MIX
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
FEBRUARY 28, 1999
Tax-Free Minnesota Tax-Free Minnesota Minnesota High Yield
Minnesota Fund Insured Fund Intermediate Fund Municipal Bond Fund
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Housing 17.8% 18.2% 6.2% 50.6%
Health Care 20.4% 20.4% 20.4% 19.9%
General Obligation 12.6% 16.6% 3.4% 3.1%
Power Authority 18.7% 9.2% 6.3% 2.6%
Pre-Refunded 9.6% 18.4% 26.4% 0.4%
Education 4.8% -- 3.3% 3.6%
Industrial 8.3% -- 15.0% 3.4%
Water and Sewer 2.5% -- 3.0% 4.7%
Transportation -- 0.6% -- --
City Agencies -- -- -- 3.1%
Miscellaneous 1.9% -- 3.7% 4.2%
Escrowed to Maturity 1.3% 13.7% 11.8% --
Cash and Other 2.1% 2.9% 0.5% 4.4%
</TABLE>
<PAGE>
for tax-
exempt
income
6
MINNESOTA HIGH YIELD
MUNICIPAL BOND FUND
Minnesota High Yield Municipal Bond Fund provided a total return of +1.88%
(Class A shares at net asset value with distributions reinvested) for the six
months ended February 28, 1999.
The Fund's six-month performance modestly surpassed the average return of
other Minnesota municipal bond funds, but lagged the benchmark Lehman Brothers
Municipal Bond Index, which is composed of bonds with a variety of credit
ratings.
Over the last six months, we increased Minnesota High Yield Municipal Bond
Fund's holdings of non-rated bonds which now represent more than 66% of the
portfolio. In most cases, these bonds were issued by small, rural municipalities
looking to avoid the expense of obtaining a Standard and Poor's or Moody's
rating.
WE RIGOROUSLY RESEARCH NON-RATED BOND ISSUES BEFORE WE PURCHASE THEM AND
CONTINUE TO MONITOR THEIR CREDIT QUALITY ON A REGULAR BASIS.
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 Minnesota High Yield Municipal Bond Fund's shareholders.
Shareholders also benefited from Minnesota High-Yield Municipal Bond Fund's
tax-efficient portfolio management. In 1998, we held onto our appreciated bonds
and paid no capital gains.
CREDIT QUALITY
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
FEBRUARY 28, 1999
Tax-Free Minnesota Tax-Free Minnesota Minnesota High-Yield
Minnesota Fund Insured Fund Intermediate Fund Municipal Bond Fund
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AAA 54.2% 100.0% 35.1% 9.0%
AA 10.3% 0.0% 10.9% 4.8%
A 16.7% 0.0% 10.5% 11.2%
BBB 7.0% 0.0% 22.9% 7.6%
BB 0.0% 0.0% 0.0% 0.5%
B 0.0% 0.0% 0.0% 0.0%
Unrated 11.8% 0.0% 20.6% 66.9%
- -------------------------------------------------------------------------------------------------------
Average Quality AA- AAA AA- BBB+
</TABLE>
<PAGE>
for tax-
exempt
income
7
OUTLOOK
After a brief slowdown last summer, the U.S. economy regained its momentum in
the fourth quarter. U.S. Gross Domestic Product grew at a 5.6% annual rate over
the last three months of 1998, largely driven by robust consumer spending. In
fact, consumer spending in 1998 grew at its fastest pace in more than 14 years
(Source: Bloomberg Business News).
Early indications suggest this momentum has carried over into the new year.
In February, U.S. retail sales rose for the seventh consecutive month. We
believe that rising personal incomes, low interest rates and low unemployment
should promote continued vigorous spending in 1999.
IN MINNESOTA, THE BUDGET SURPLUS WAS 20% -- TWICE THE NATIONAL AVERAGE.
State economies have also benefited from high employment rates and growing
tax revenues. According to the National Conference of State Legislatures, which
monitors the fiscal performance of state governments, the states are in their
best fiscal health since 1980. In 1998, the average state government had a 10%
budget surplus. In Minnesota, the budget surplus was 20% - twice the national
average.
Over the first few months of 1999, strong national and state economies have
increased investors' concerns that the Federal Reserve may need to raise
interest rates to fend off inflation. Thus far, however, with inflation running
at approximately 1.7%, this has not been necessary. In our opinion, global
weakness, particularly in Asia, South America and Russia, could dampen economic
growth in the U.S., reducing the need for higher interest rates.
Last summer, we saw that domestic financial markets can be vulnerable to
shocks from overseas. Should conditions in world economies worsen in 1999, U.S.
stock market volatility could increase. This may create stronger demand for
fixed-income investments. Regardless of market conditions, in our view,
municipal bond funds offer attractive opportunities for investors seeking the
more moderate risk associated with fixed-income investments and tax-free
dividends.
<PAGE>
for tax-
exempt
income
8
Performance Summary
TAX-FREE MINNESOTA FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH FEBRUARY 28, 1999
Lifetime Ten Years Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 2/27/84)
Excluding Sales Charge +8.80% +7.50% +6.05% +5.53%
Including Sales Charge +8.52% +7.08% +5.24% +1.60%
- --------------------------------------------------------------------------------
Class B (Est. 3/11/95)
Excluding Sales Charge +6.83% +4.75%
Including Sales Charge +6.20% +0.75%
- --------------------------------------------------------------------------------
Class C (Est. 5/4/94)
Excluding Sales Charge +6.30% +4.74%
Including Sales Charge +6.30% +3.74%
MINNESOTA INSURED FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH FEBRUARY 28, 1999
Lifetime Ten Years Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 5/1/87)
Excluding Sales Charge +7.40% +7.43% +5.57% +5.16%
Including Sales Charge +7.06% +7.02% +4.77% +1.18%
- --------------------------------------------------------------------------------
Class B (Est. 3/7/95)
Excluding Sales Charge +6.40% +4.37%
Including Sales Charge +5.77% +0.37%
- --------------------------------------------------------------------------------
Class C (Est. 5/4/94)
Excluding Sales Charge +5.91% +4.47%
Including Sales Charge +5.91% +3.47%
Performance for all Funds includes reinvestment of distributions and applicable
sales charge as described below. Return and share value will fluctuate so that
shares when redeemed may be worth more or less than their 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 of each Fund have a 3.75% maximum front-end sales charge, except
Tax-Free Minnesota Intermediate Fund, which has a 2.75% maximum front-end sales
charge. All Funds have a 12b-1 fee.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a contingent
deferred sales charge of up to 4% if redeemed before the end of the sixth year
for each Fund except Tax-Free Minnesota Intermediate Fund, which is subject to a
contingent deferred sales charge of up to 2% if redeemed before the end of the
third 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
9
TAX-FREE MINNESOTA INTERMEDIATE FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH FEBRUARY 28, 1999
Lifetime Ten Years Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 10/27/85)
Excluding Sales Charge +6.04% +5.98% +4.92% +3.90%
Including Sales Charge +5.83% +5.68% +4.34% +1.01%
- --------------------------------------------------------------------------------
Class B (Est. 8/15/95)
Excluding Sales Charge +4.46% +3.11%
Including Sales Charge +4.46% +1.13%
- --------------------------------------------------------------------------------
Class C (Est. 4/30/94)
Excluding Sales Charge +4.62% +3.12%
Including Sales Charge +4.62% +2.13%
MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH FEBRUARY 28, 1999
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 6/4/96)
Excluding Sales Charge +8.77% +5.98%
Including Sales Charge +7.26% +1.98%
- --------------------------------------------------------------------------------
Class B (Est. 6/12/96)
Excluding Sales Charge +8.88% +5.22%
Including Sales Charge +7.91% +1.22%
- --------------------------------------------------------------------------------
Class C (Est. 6/7/96)
Excluding Sales Charge +8.02% +5.22%
Including Sales Charge +8.02% +4.22%
Please turn to page 8 for important additional information. All performance
includes reinvestment of distributions and sales charges as described on page 8.
Past performance is not a guarantee of future results.
<PAGE>
10 for tax-exempt income
Financial Statements
VOYAGEUR TAX-FREE FUNDS, INC.
DELAWARE - VOYAGEUR TAX-FREE MINNESOTA FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS - 97.88%
GENERAL OBLIGATION BONDS - 12.55%
Farmington Independent School District Number 192
Capital Appreciation Series B Zero
Coupon 2/1/20 ........................................ $2,650,000 $ 897,423
Farmington Independent School District Number 192
Capital Appreciation Series B Zero
Coupon 2/1/21 ........................................ 2,500,000 801,700
Hennepin County 5.75% 10/1/10 ........................... 7,990,000 8,640,386
Hutchinson Independent School District Series A
(MN School District Enhanced)
5.85% 2/1/18 ......................................... 1,700,000 1,866,872
Lakeville Independent School District #194 Capital
Appreciation Series B Zero
Coupon 2/1/19 ........................................ 8,000,000 2,824,800
Lakeville Independent School District #194,
Inverse Floater (MBIA) 6.92% 2/1/15 .................. 4,250,000 4,411,288
Mahtomedi Independent School District #832
Series B Zero Coupon (MBIA) 2/1/14 ................... 1,540,000 753,691
Minneapolis Convention Center Facilities, Inverse
Floater 7.42% 4/1/14 ................................. 850,000 945,353
Minneapolis Sports Arena Project, Inverse Floater
6.78% 10/1/20 ........................................ 4,220,000 4,407,241
Minneapolis Sports Arena Project, Inverse Floater
6.82% 4/1/14 ......................................... 580,000 626,835
Minneapolis Unlimited Tax Series 1992
6.30% 10/1/08 ........................................ 1,750,000 1,903,318
Minnetonka Independent School District #276
(FSA) 5.75% 2/1/22 ................................... 4,550,000 4,904,081
North St. Paul Maplewood Independent School
District #622, Inverse Floater
6.87% 2/1/20 ......................................... 2,250,000 2,273,288
Puerto Rico Commonwealth 5.25% 7/1/18 ................... 1,250,000 1,307,363
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ......................................... 1,000,000 923,400
Rochester Tax Increment 6.50% 12/1/04 ................... 1,000,000 1,006,960
Rosemount - Apple Valley Independent School
District #196 Inverse Floater (FSA)
8.37% 4/1/15 ......................................... 4,000,000 4,544,800
Rosemount Independent School District #196
Series B Zero Coupon (FSA) 4/1/11 .................... 2,600,000 1,510,028
Rosemount Independent School District #196 Zero
Coupon (FSA) 4/1/12 .................................. 1,850,000 1,014,133
Rosemount Independent School District #196 Zero
Coupon (FSA) 4/1/13 .................................. 1,915,000 988,906
Rosemount Independent School District #196,
Inverse Floater 4/1/15 ............................... 1,375,000 1,477,259
Sartell Independent School District #748 Zero
Coupon (MBIA) 2/1/13 ................................. 540,000 281,043
Sartell Independent School District #748 Zero
Coupon (MBIA) 2/1/15 ................................. 1,075,000 491,469
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
GENERAL OBLIGATION BONDS (CONTINUED)
Sartell Independent School District #748 Zero
Coupon (MBIA) 2/1/16 ................................. $1,750,000 $ 766,710
Sartell Independent School District #748 Zero
Coupon (MBIA) 2/1/17 ................................. 1,600,000 649,200
Spring Lake Park Independent School District #16,
Inverse Floater (MBIA) 7.02% 2/1/17 .................. 1,000,000 1,048,280
St Paul Tax Increment - Block 39
Project A 4.75% 2/1/25 ............................... 2,000,000 1,916,520
Washington County 5.90% 2/1/10 .......................... 1,680,000 1,770,602
----------
54,952,949
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HIGHER EDUCATION REVENUE BONDS - 4.77%
Minnesota Higher Education Augsburg College Series
4F1 6.25% 5/1/23 ..................................... 1,000,000 1,063,680
Minnesota Higher Education Carleton College
5.75% 11/1/12 ........................................ 4,000,000 4,300,400
Minnesota Higher Education Facilities Revenue
Hamline University 6.00% 10/1/12 ..................... 1,250,000 1,331,225
Minnesota Higher Education Facilities Revenue
Hamline University 6.00% 10/1/16 ..................... 1,790,000 1,876,368
Minnesota Higher Education St. Benedicts College
6.20% 3/1/16 ......................................... 1,000,000 1,065,850
Minnesota Higher Education St. Thomas University
Series R2 5.60% 9/1/14 ............................... 1,000,000 1,038,840
University Of Minnesota Series A
5.50% 7/1/21 ......................................... 9,500,000 10,214,020
----------
20,890,383
----------
HOSPITAL REVENUE BONDS - 20.36%
Bemidji Hospital Facilities Revenue North County
Health 6.05% 9/1/16 .................................. 600,000 635,250
Bemidji Hospital Facilities Revenue North County
Health 6.05% 9/1/24 .................................. 1,825,000 1,927,054
Brainerd Benedictine Health Care Systems for
St.Joseph's Hospital (Connie Lee)
6.00% 2/15/12 ........................................ 2,250,000 2,432,408
Duluth Economic Development Authority Benedictine
for St. Luke's Hospital (Connie Lee)
6.40% 5/1/18 ......................................... 3,295,000 3,566,080
Duluth Economic Development Authority St. Luke's
Hospital (Connie Lee) 6.00% 2/15/20 .................. 9,450,000 10,148,072
Little Canada Health Care 1992 (Presbyterian
Homes Guaranteed) 7.25% 7/1/12 ....................... 1,000,000 1,043,370
Minneapolis Fairview Hospital Series 91B (MBIA)
6.50% 1/1/11 ......................................... 3,000,000 3,244,530
Minneapolis Health Care American Baptist Homes
8.70% 11/1/09 ........................................ 2,485,000 2,750,796
Minneapolis/St. Paul Housing & Redevelopment
Authority HealthOne (MBIA)
7.40% 8/15/11 ........................................ 1,360,000 1,450,358
<PAGE>
for tax-exempt income 11
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Minneapolis/St. Paul Housing & Redevelopment
Authority Children's Hospital Health Care,
Inverse Floater 7.52% 8/15/25 ........................ $6,500,000 $ 6,995,495
Minneapolis/St. Paul Housing & Redevelopment
Authority Health Care System for Healthspan
Series A (AMBAC) 4.75% 11/15/18 ...................... 3,300,000 3,201,165
Robbinsdale North Memorial Medical (AMBAC)
5.50% 5/15/23 ........................................ 10,725,000 11,030,019
Rochester Health Care Facilities Revenue Mayo
Foundation Series B 5.50% 11/15/27 ................... 5,000,000 5,216,400
Rochester Health Care Facilities Revenue Reg IRS
for Mayo Clinic, Series H Inverse Floater
7.86% 11/15/15 ....................................... 3,500,000 4,069,555
Springfield St. John's Lutheran Home Revenue
8.50% 11/1/19 ........................................ 600,000 629,670
St. Cloud Hospital Facilities Revenue for St. Cloud
Hospital (AMBAC) 5.30% 10/1/20 ....................... 7,250,000 7,386,590
St. Louis Park Commercial Development Revenue for
G & N L P Project (Methodist Hospital Guaranteed)
7.25% 6/1/13 ......................................... 1,120,000 1,188,645
St. Louis Park Methodist Hospital (AMBAC)
5.20% 7/1/23 ......................................... 10,220,000 10,268,443
St. Paul Housing & Redevelopment Hospital
Revenue for Health East Series A
6.625% 11/1/17 ....................................... 8,680,000 8,992,654
St. Paul Minnesota Housing & Redevelopment Authority
Health Care Facilities Revenue Regions Hospital
Project 5.30% 5/15/28 ................................ 3,000,000 2,896,140
----------
89,072,694
----------
HOUSING REVENUE BONDS - 17.83%
Austin Housing & Redevelopment Authority
Courtyard Residence Series 95A
7.25% 1/1/26 ......................................... 500,000 548,300
Bloomington Housing & Redevelopment Authority
Senior Summerhouse Bloomington Project
6.125% 5/1/35 ........................................ 3,420,000 3,456,662
Brooklyn Center Multifamily Housing Revenue Bonds
Family Housing Project Section 8
5.90% 1/1/20 ......................................... 2,250,000 2,339,370
Burnsville Multifamily Bridgeway Apartments (FHA)
7.625% 2/1/24 ........................................ 3,370,000 3,594,914
Burnsville Multifamily Coventry Court Apartments
Project (FHA) 7.50% 9/1/17 ........................... 1,000,000 1,029,830
Carver County Housing & Redevelopment Authority
Multifamily Revenue Lake Grace Apartments
6.00% 7/1/28 ......................................... 1,435,000 1,509,319
Dakota County Housing & Redevelopment Authority
Single Family (GNMA ) 8.10% 3/1/16 ................... 70,000 72,100
Eagan Forest Ridge Apartments Project
(FHA) 7.50% 9/1/17 ................................... 1,000,000 1,032,270
Eden Prairie Multifamily Revenue Eden Investments
(FHA) 7.40% 8/1/25 ................................... 400,000 418,012
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Eden Prairie Multifamily Windslope Apartments
Section 8 Housing 7.10% 11/1/17 ...................... $1,585,000 $1,681,558
Eden Prarie Multifamily Homes Tanager Creek
(GNMA) 8.05% 6/20/31 ................................. 7,605,000 8,800,278
Edina Park Plaza Multifamily Housing
(FHA) 7.50% 12/1/09 .................................. 1,440,000 1,492,502
Edina Park Plaza Multifamily Housing (FHA)
7.70% 12/1/28 ........................................ 1,250,000 1,290,013
Hopkins Renaissance Multifamily Housing Section 8
6.375% 4/1/20 ........................................ 1,000,000 1,066,150
Little Canada Multifamily Housing Revenue Housing
Alternative Development Company Project
Series A 6.10% 12/1/17 ............................... 1,675,000 1,719,304
Little Canada Multifamily Housing Revenue Housing
Alternative Development Company Project
Series A 6.25% 12/1/27 ............................... 2,900,000 2,986,188
Minneapolis Housing Facility Revenue for Augustana
Chapel View Project Series 1993
7.00% 4/1/18 ......................................... 1,000,000 1,020,830
Minneapolis Multifamily Mortgage for Seward Towers
Project (GNMA) 7.375% 12/20/30 ....................... 4,000,000 4,178,160
Minneapolis-Nicollet Towers Multifamily Housing
Section 8 Housing 6.00% 12/1/19 ...................... 2,000,000 2,124,060
Minnesota Housing Finance Agency Multifamily
Housing 6.95% 2/1/14 ................................. 1,500,000 1,590,360
Minnesota Housing Finance Agency Multifamily
Housing Series 92A 6.95% 8/1/17 ...................... 745,000 794,885
Minnesota Housing Finance Agency Rental Housing
Series B 6.25% 8/1/22 ................................ 985,000 996,220
Minnesota Housing Finance Agency Single Family
Mortgage Series B 7.30% 7/1/10 ....................... 120,000 123,038
Minnesota Housing Finance Agency Single Family
Mortgage Series D 7.30% 7/1/09 ....................... 270,000 276,926
Minnesota Housing Finance Agency Single Family
Mortgage Series 91C 7.10% 7/1/11 ..................... 970,000 1,019,305
Minnetonka Multifamily Beacon Hill Project
(Presbyterian Homes Guaranteed)
7.70% 6/1/25 ......................................... 2,000,000 2,152,020
Oakdale Housing - Oak Meadows Project
7.00% 4/1/27 ......................................... 6,800,000 7,258,184
Park Rapids Multifamily Revenue The Court
Apartments Project Section 8
6.30% 2/1/20 ......................................... 3,235,000 3,289,089
Spring Park Minnesota Twin Birch Health Care Center
(Guarantor: Presbyterian Homes of Minnesota)
8.25% 8/1/11 ......................................... 600,000 635,382
St. Cloud Germain Towers Housing Series 1993
Section 8 5.90% 9/1/20 ............................... 2,000,000 2,075,200
St. Louis Park Residential Mortgage Revenue for Single
Family (GNMA) 7.25% 4/20/23 .......................... 1,218,000 1,277,365
St. Louis Park Multifamily Housing Revenue Community
Housing (FHA) 6.25% 12/1/28 .......................... 3,855,000 4,122,190
<PAGE>
12 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
St. Louis Park Multifamily Westwind Apartments
Housing (GNMA) 5.75% 1/1/29 ..........................$ 3,865,000 $ 4,005,763
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% 12/1/21 ........................ 1,525,000 1,607,609
St. Paul Housing & Redevelopment Single Family
Mortgage (FNMA) 6.90% 12/1/11 ........................ 51,000 52,547
Stillwater Multifamily Housing Stillwater Cottages
7.00% 11/1/27 ........................................ 1,000,000 1,031,000
Wadena Housing & Redevelopment Agency Humphrey
Manor - Section 8 6.00% 2/1/19 ....................... 2,130,000 2,220,610
Wells Housing & Redevelopment Agency Broadway
Apartment Project - Section 8
7.00% 1/1/19 ......................................... 1,050,000 1,118,922
Willmar Housing & Redevelopment Agency
Highland Apartments - Section 8
5.85% 6/1/19 ......................................... 1,050,000 1,089,522
----------
78,075,957
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 8.25%
Andover Development Revenue Downtown Center
Project Series A 7.00% 12/1/12 ....................... 1,000,000 1,064,280
Anoka Resource Recovery Revenue for Northern State
Power Co Series 85 7.15% 12/1/08 ..................... 1,000,000 1,042,060
Becker Pollution Control Revenue for Northern
States Power Co Series 89A 6.80% 4/1/07 .............. 2,000,000 2,044,780
Cloquet Pollution Control Revenue for Potlatch
Corporation 5.90% 10/1/26 ............................ 15,000,000 15,853,050
East Grand Forks for American Crystal Sugar
Pollution Control Revenue 7.75% 4/1/18 ............... 1,230,000 1,328,511
International Falls Pollution Control Revenue
5.60% 12/1/22 ........................................ 1,500,000 1,465,365
Richfield Commercial Development Revenue for
Richfield Shoppes 8.375% 10/1/13 ..................... 2,200,000 2,510,178
Seaway Port Authority Duluth Industrial Development
Dock & Wharf Revenue Cargill Project
Series E 6.125% 11/1/14 .............................. 4,500,000 4,927,230
St. Cloud Commercial Development Revenue for
Northwest Center Association
7.50% 8/1/12 ......................................... 4,283,971 4,551,334
St. Paul Minnesota Port Authority Commercial
Development Revenue Fort Rd Medical (Asset Gty)
7.50% 9/1/02 ......................................... 1,300,000 1,327,495
---------
36,114,283
----------
LEASE/CERTIFICATES OF PARTICIPATION - 0.64%
Beltrami County Housing & Redevelopment Authority
Revenue 6.20% 2/1/14 ................................. 1,010,000 1,072,378
West St. Paul Commercial Mortgage K-Mart Lease
7.00% 11/1/07 ........................................ 1,563,219 1,713,883
---------
2,786,261
---------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS (CONTINUED)
POWER AUTHORITY REVENUE BONDS - 18.74%
Bass Brook Pollution Control Revenue for Minnesota
Power & Light 6.00% 7/1/22 ...........................$17,490,000 $18,370,466
Bass Brook Pollution Control Revenue for Minnesota
Power & Light Company (MBIA)
6.00% 7/1/22 ......................................... 1,750,000 1,871,030
Northern Minnesota Municipal Power Agency Minnesota
Electric Systems 4.75% 1/1/20 ........................ 7,100,000 6,907,306
Northern Minnesota Municipal Power Agency (FSA)
5.25% 1/1/13 ......................................... 4,000,000 4,208,760
Northern Minnesota Municipal Power Agency Electric
System Revenue (AMBAC) 5.50% 1/1/18 .................. 9,200,000 9,528,072
Northern Minnesota Municipal Power Agency Zero
Coupon (AMBAC) 1/1/09 ................................ 3,815,000 2,484,938
Northern Municipal Power Agency Minnesota Electric
Systems Revenue 5.40% 1/1/15 ......................... 2,000,000 2,109,040
Puerto Rico Electric Power Authority Power Revenue
Series DD Inverse Floater (FSA)
5.83% 7/1/19 ......................................... 3,050,000 2,772,694
Puerto Rico Electric Power Authority Series EE
4.75% 7/1/24 ......................................... 5,000,000 4,752,350
Puerto Rico Electric Power Authority Series X
5.50% 7/1/25 ......................................... 2,930,000 3,037,355
Puerto Rico Electric Power Authority Series Z
5.25% 7/1/21 ......................................... 1,500,000 1,512,735
Southern Minnesota Municipal Power Agency (FGIC)
5.75% 1/1/18 ......................................... 2,000,000 2,117,700
Southern Minnesota Municipal Power Agency (MBIA)
4.75% 1/1/16 ......................................... 7,200,000 7,092,093
Southern Minnesota Municipal Power Agency (MBIA)
5.75% 1/1/18 ......................................... 7,770,000 8,226,422
Southern Minnesota Municipal Power Agency Supply
System (AMBAC) 5.50% 1/1/15 .......................... 1,560,000 1,623,679
Southern Minnesota Municipal Power Agency Zero
Coupon (MBIA) 1/1/19 ................................. 6,785,000 2,524,020
Southern Minnesota Municipal Power Agency Zero
Coupon (MBIA) 1/1/21 ................................. 5,000,000 1,655,000
Southern Minnesota Municipal Power Agency Power
Supply System Revenue Capital Appreciation -
Series A Zero Coupon 1/1/27 .......................... 3,000,000 720,930
Western Municipal Power Agency Revenue
6.125% 1/1/16 ........................................ 525,000 526,612
----------
82,041,202
----------
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS - 10.92%
Albert Lea St. John's Lutheran Home Project
8.50% 11/1/19-99 ..................................... 1,000,000 1,065,430
Blaine Industrial Development Revenue (Ball Corp.)
(Escrowed to Maturity) 8.25% 12/1/99 ................. 250,000 259,668
Blaine Industrial Development Revenue (Ball Corp.)
(Escrowed to Maturity) 8.25% 12/1/00 ................. 300,000 324,948
Bloomington Tax Increment (Escrowed to Maturity)
9.75% 2/1/08 ......................................... 500,000 649,985
Brainerd Independent School District #181
7.00% 6/1/11-01 ...................................... 390,000 417,444
<PAGE>
for tax-exempt income 13
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS (CONTINUED)
Faribault Independent School District #656 (MN
School District Credit Enhanced)
6.10% 6/1/10-04 ......................................$ 1,000,000 $ 1,093,450
Glencoe/Mcleod County Health Care
8.50% 12/1/15-00 ..................................... 500,000 543,680
Kenyon Wanamingo Independent School District
(MBIA) 6.00% 2/1/18-05 ............................... 2,350,000 2,575,718
Maplewood Independent School District #622
(FSA) 7.10% 2/1/25-05 ................................ 10,000,000 11,672,714
Minnesota Public Facilities Authority Water Pollution
Control Series 90A 7.10% 3/1/12-00 ................... 1,990,000 2,104,942
Minnesota Public Facilities Authority Water
Pollution Control 6.95% 3/1/13-01 .................... 5,220,000 5,677,324
Minnesota Public Facilities Authority Water
Pollution Control 6.25% 3/1/16-05 .................... 4,400,000 4,960,472
Owatanna Public Utilities 6.75% 1/1/16-01 .............. 1,000,000 1,058,820
Pine Island Independent School District #255
(FSA) 6.625% 6/1/12-01 ............................... 240,000 254,969
Pine Island Independent School District #255
(FSA) 6.625% 6/1/13-01 ............................... 310,000 329,335
Pine Island Independent School District #255
(FSA) 6.625% 6/1/14-01 ............................... 330,000 350,582
Pine Island Independent School District #255
(FSA) 6.625% 6/1/15-01 ............................... 355,000 377,141
Pine Island Independent School District #255
(FSA) 6.625% 6/1/16-01 ............................... 380,000 403,700
Plainview Independent School District #810
6.70% 2/1/06-03 ...................................... 385,000 420,817
Plainview Independent School District #810
6.75% 2/1/08-03 ...................................... 445,000 487,195
Plainview Independent School District #811
6.75% 2/1/07-03 ...................................... 420,000 459,824
Red Wing Housing & Redevelopment Agency
Jordan Tower Section 8 Series 92
7.00% 1/1/19-02 ...................................... 1,500,000 1,662,975
Richfield Independent School District #280 Series C,
Inverse Floater 5.34% 2/1/15-03 ...................... 1,365,000 1,511,519
Southern Minnesota Municipal Power Agency
Revenue (MBIA) (Escrowed to Maturity)
5.75% 1/1/18 ......................................... 1,000,000 1,073,000
Southern Minnesota Municipal Power Agency Supply
System (AMBAC) (Escrowed to Maturity)
5.50% 1/1/15 ......................................... 990,000 1,049,727
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS (CONTINUED)
St. Cloud Housing & Redevelopment Agency
Northway A&B Project - Section 8
7.50% 12/1/18-00 ..................................... $2,045,000 $2,227,925
St. Louis Park Methodist Hospital (AMBAC)
7.25% 7/1/18-00 ...................................... 775,000 830,296
Stillwater Independent School District #834
(MBIA) 5.75% 2/1/15-05 ............................... 2,000,000 2,166,140
University Of Minnesota Series A (Escrowed to
Maturity) 6.00% 2/1/11 ............................... 1,500,000 1,513,230
Western Minnesota Municipal Power Agency Revenue
(Escrowed to Maturity) 9.75% 1/1/16 .................. 185,000 283,326
----------
47,806,296
----------
WATER & SEWER REVENUE BONDS - 2.45%
Minnesota Public Facilities Authority Water
Revenue 5.98% 3/1/16 ................................. 1,000,000 960,020
Minnesota Public Facilities Authority Inverse
Floater 6.23% 3/1/19 ................................. 2,000,000 1,921,400
Minnesota Public Facilities Authority Inverse
Floater 6.13% 3/1/17 ................................. 3,000,000 2,893,410
Puerto Rico Aqueduct & Sewer Authority
5.00% 7/1/19 ......................................... 3,000,000 2,962,110
Puerto Rico Aqueduct & Sewer Authority
5.00% 7/1/15 ......................................... 2,000,000 2,007,260
----------
10,744,200
----------
OTHER REVENUE BONDS - 1.37%
Minneapolis Community Development Agency
Common Bond Fund 7.95% 12/1/11 ....................... 855,000 948,759
Minneapolis Community Development Agency
Common Bond Fund 7.40% 12/1/21 ....................... 795,000 870,923
Minneapolis Community Development Agency
Common Bond Fund Opportunity Workshop
Project Series 2A 7.125% 12/1/05 ..................... 510,000 560,398
Minneapolis Community Development Agency Tax
Increment Revenue Zero Coupon 9/1/09 ................. 5,750,000 3,637,968
---------
6,018,048
---------
Total Municipal Bonds
(cost $393,850,885) 428,502,273
-----------
NUMBER OF
SHARES
---------
SHORT-TERM INVESTMENTS - 0.94%
Federated Minnesota Municipal Money Market ............. 4,110,389 4,110,389
---------
Total Short-Term Investments
(cost $4,110,389) .................................... 4,110,389
---------
<PAGE>
14 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.82%
(COST $397,961,274) ......................................... $432,612,662
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 1.18% ......................................... 5,174,519
------------
NET ASSETS APPLICABLE TO 33,892,468 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ...................... $437,787,181
============
NET ASSET VALUE - TAX-FREE MINNESOTA FUND A CLASS
($419,392,784 / 32,469,305 SHARES) .......................... $12.92
======
NET ASSET VALUE - TAX-FREE MINNESOTA FUND B CLASS
($11,846,018 / 916,843 SHARES) .............................. $12.92
======
NET ASSET VALUE - TAX-FREE MINNESOTA FUND C CLASS
($6,548,379 / 506,320 SHARES) ............................... $12.93
======
- ------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
Summary of Abbreviations:
AMBAC -Insured by the AMBAC Indemnity Corporation
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 FEBRUARY 28, 1998:
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 ................ $402,737,630
Distributions in excess of net investment income ............... (3,377)
Accumulated net realized gain on investments ................... 401,540
Net unrealized appreciation of investments ..................... 34,651,388
-------------
Total net assets ............................................... $437,787,181
=============
NET ASSET VALUE AND OFFERING PRICE FOR TAX-FREE
MINNESOTA FUND A CLASS:
Net asset value per share (A) .................................. $12.92
Sales charge (3.75% of offering price or 3.87% of amount
invested per share) (B) ..................................... 0.50
-------
Offering Price ................................................. $13.42
=======
- ------------
(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.
See accompanying notes
<PAGE>
VOYAGEUR INSURED FUNDS, INC.
DELAWARE-VOYAGEUR MINNESOTA INSURED FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS - 97.17%
GENERAL OBLIGATION BONDS - 16.93%
Anoka County Capital Improvement Series C
(FGIC) 5.90% 2/1/11 ................................. $8,045,000 $8,411,289
Becker Refunding Tax Increment Series D (MBIA)
(AMT) 6.25% 8/1/15 .................................. 6,300,000 6,833,421
Dakota County Refunding Series B (AMBAC)
6.40% 2/1/08 ........................................ 1,135,000 1,159,289
Dakota County Refunding Series B (AMBAC)
6.45% 2/1/09 ........................................ 1,000,000 1,024,370
Dakota County Refunding Series B (AMBAC)
6.45% 2/1/10 ........................................ 2,500,000 2,561,625
Eden Prairie Independent School District #272
(MBIA) 5.65% 2/1/13 ................................. 3,200,000 3,315,104
Eden Prairie Independent School District #272
Inverse Floater (FGIC) 6.77% 2/1/14 ................. 1,125,000 1,185,907
Eden Prairie Independent School District #272,
Inverse Floater (MBIA) 6.77% 2/1/15 ................. 1,000,000 1,043,740
Hennepin County Ref Solid Waste IBC (MBIA)
5.75% 10/1/10 ....................................... 1,800,000 1,930,842
Hopkins Independent School District #270 (MBIA)
4.875% 2/1/14 ....................................... 1,875,000 1,881,206
Lakeville Independent School District #194
Capital Appreciation Series B
Zero Coupon (FSA) 2/1/17 ............................ 2,490,000 986,488
Lakeville Independent School District #194
Capital Appreciation Series B
Zero Coupon (FSA) 2/1/15 ............................ 2,455,000 1,093,801
North Branch Independent School District #138,
Inverse Floater (FGIC) 7.42% 2/1/11 ................. 965,000 1,098,431
Prior Lake Independent School District #719,
Inverse Floater (FGIC) 6.67% 2/1/14 ................. 1,000,000 1,056,070
Rosemount Independent School District #196
Series B Zero Coupon (FSA) 4/1/10 ................... 2,240,000 1,372,672
Rosemount Independent School District #196
Zero Coupon (FSA) 4/1/09 ............................ 1,860,000 1,199,570
South Washington County Independent School
District #883 (FGIC) 6.125% 6/1/09 .................. 1,430,000 1,497,639
South Washington County Independent School
District #883 (FGIC) 6.125% 6/1/11 .................. 2,720,000 2,850,451
Spring Lake Park Independent School District #16,
Inverse Floater (MBIA) 6.92% 2/1/14 ................. 2,175,000 2,309,981
St. Cloud Independent School District #742 (FGIC)
6.05% 2/1/09 ........................................ 1,000,000 1,066,040
St. Francis Independent School District #15
(FGIC) 5.90% 4/1/10 ................................. 1,845,000 1,956,383
Stillwater Independent School District #834
(FGIC) 5.50% 2/1/10 ................................. 2,995,000 3,094,734
Western Lake Superior Series A (MBIA)
(AMT) 6.00% 10/1/08 ................................. 400,000 439,064
<PAGE>
for tax-exempt income 15
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
------------------------
MUNICIPAL BONDS (CONTINUED)
GENERAL OBLIGATION BONDS (CONTINUED)
Western Lake Superior Series A (MBIA)
(AMT) 6.10% 10/1/09 ................................. $ 425,000 $ 464,593
Western Lake Superior Series A (MBIA) (AMT)
6.20% 10/1/10 ....................................... 450,000 493,925
Western Lake Superior Series A (MBIA)
(AMT) 6.20% 10/1/11 ................................. 475,000 521,365
----------
50,848,000
----------
HOSPITAL REVENUE BONDS - 20.41%
Bloomington Masonic Home Care Center
(AMBAC) 5.90% 7/1/09 ................................ 1,250,000 1,341,087
Brainerd Benedictine Health Care Systems for
St. Joseph's Hospital (Connie Lee)
6.00% 2/15/12 ....................................... 1,500,000 1,621,605
Brainerd Benedictine Health Care Systems for
St. Joseph's Hospital (Connie Lee)
6.00% 2/15/20 ....................................... 2,000,000 2,147,740
Detroit Lakes Benedictine Health for St. Mary's
Hospital (Connie Lee) 6.00% 2/15/12 ................. 1,630,000 1,762,144
Detroit Lakes Benedictine Health for St. Mary's
Hospital (Connie Lee) 6.00% 2/15/19 ................. 1,000,000 1,075,000
Duluth Economic Development Authority Benedictine
for St. Luke's Hospital (Connie Lee)
6.40% 5/1/18 ........................................ 500,000 541,135
Duluth Economic Development Authority Health Care
Duluth Clinic (AMBAC) 6.30% 11/1/22 ................. 2,690,000 2,924,918
Duluth Economic Development Authority Health Care
Revenue for St. Mary's Hospital, Inverse Floater
(Connie Lee) 8.52% 2/15/17 .......................... 5,000,000 5,738,800
Duluth Economic Development Authority St. Luke's
Hospital (Connie Lee) 6.00% 2/15/20 ................. 1,300,000 1,396,031
Duluth Economic Development Authority St. Luke's
Hospital (Connie Lee) 6.40% 5/1/10 .................. 3,335,000 3,624,912
Minneapolis Fairview Hospital Series 91B
(MBIA) 6.50% 1/1/11 ................................. 3,000,000 3,244,530
Minneapolis Health Care Facility Revenue Fairview
Hospital & Healthcare Series A (MBIA)
5.25% 11/15/19 ...................................... 2,750,000 2,791,635
Minneapolis/St. Paul Housing & Redevelopment
Authority Health Care System for Healthspan
Series A (AMBAC) 4.75% 11/15/18 ..................... 4,000,000 3,880,200
Minneapolis/St. Paul Housing & Redevelopment
Authority HealthOne (MBIA)
7.40% 8/15/05 ....................................... 600,000 641,364
Minneapolis/St. Paul Housing & Redevelopment
Authority HealthOne (MBIA)
7.40% 8/15/11 ....................................... 2,370,000 2,527,463
Minneapolis/St. Paul Housing & Redevelopment
Authority Health Care Systems for
Healthspan Series 93A (FSA)
5.00% 11/15/13 ...................................... 6,490,000 6,592,866
Minneapolis/St. Paul Housing & Redevelopment
Authority - Childrens Hospital, Inverse Floater
(FSA) 7.82% 8/15/16 ................................. 1,310,000 1,466,244
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Minnesota Agricultural & Economic Development
Fairview Hospital Series 97A (MBIA)
5.75% 11/15/26 ......................................$8,250,000 $ 8,820,818
Robbinsdale North Memorial Medical (AMBAC)
5.50% 5/15/23 ....................................... 5,400,000 5,553,576
St. Louis Park Health Care for Methodist Hospital,
Inverse Floater (AMBAC) 6.92% 7/1/23 ................ 2,500,000 2,551,075
St. Paul Ramsey Medical (AMBAC)
5.50% 5/15/13 ....................................... 1,000,000 1,049,650
----------
61,292,793
----------
HOUSING REVENUE BONDS - 18.17%
Chaska Waters Edge Multifamily Revenue
(GNMA) 7.30% 1/20/30 ................................ 3,257,000 3,622,273
Dakota County Housing & Redevelopment Authority
Single Family Mortgage Revenue (FNMA)
6.70% 10/1/17 ....................................... 3,990,000 4,243,006
Dakota County Housing & Redevelopment
Authority Single Family Mortgage Revenue
(GNMA/FNMA) 5.85% 10/1/30 ........................... 6,984,000 7,240,103
Dakota, Washington & Stearns Counties Housing
& Redevelopment Authority Single Family
Mortgage Revenue (MBIA) 7.85% 12/1/30 ............... 140,000 145,572
Eagan Multifamily Revenue Woodridge Apartments
(GNMA) 5.90% 8/1/20 ................................. 1,000,000 1,063,180
Hopkins Multifamily Housing Auburn Apartments
(GNMA) 8.05% 6/20/31 ................................ 3,790,000 4,297,708
Minneapolis/St. Paul Housing Finance Board
Housing Project Phase V (GNMA)
8.875% 11/1/18 ...................................... 50,000 51,140
Minneapolis/St. Paul Housing Finance Board
Housing Project Phase IX (GNMA)
7.25% 8/1/21 ........................................ 1,030,000 1,087,876
Minneapolis/St. Paul Housing Finance Board
Housing Project Phase IX (GNMA)
7.30% 8/1/31 ........................................ 695,000 731,974
Minneapolis/St. Paul Housing Finance Board Single
Family Mortgage Revenue (GNMA)
8.125% 12/1/14 ...................................... 115,000 117,839
Minneapolis /St. Paul Housing Finance Board
Single Family Mortgage Revenue (GNMA)
8.30% 8/1/21 ........................................ 75,000 76,105
Minneapolis/St. Paul Housing Finance
Board Single Family Mortgage-Project Phase XI
(GNMA) 5.80% 11/1/30 ................................ 2,705,000 2,791,614
Minnesota Housing Finance Agency Single Family
Housing Rental Series A (AMBAC) (AMT)
5.875% 8/1/28 ....................................... 2,610,000 2,741,544
Minnesota Housing Finance Agency Single Family
Housing Rental (AMBAC) 5.95% 2/1/15 ................. 2,325,000 2,461,524
Minnesota Housing Finance Agency Single Family
Housing Rental (MBIA) 5.95% 2/1/18 .................. 6,620,000 6,969,006
<PAGE>
16 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Minnesota State Housing Finance Agency Single
Family Housing Rental Series D (AMBAC)
(AMT) 5.80% 7/1/21 .................................. $4,185,000 $ 4,359,598
Minnesota Housing Finance Agency Single Family
Mortgage Revenue Series A (AMBAC)
7.05% 7/1/22 ........................................ 495,000 517,522
Minnesota Housing Finance Agency Single Family
Mortgage Revenue Series A (AMBAC)
7.45% 7/1/22 ........................................ 1,330,000 1,389,690
Minnetonka Multifamily Housing Cedar Hills Project
Cedar Hills East (FHA) 7.50% 12/1/17 ................ 400,000 415,644
Minnetonka Multifamily Housing Cedar Hills
Project Cedar Hills East (FHA)
7.50% 12/1/27 ....................................... 500,000 517,770
Scott County Housing & Redevelopment Authority
Facility Lease Revenue Justice Center Project
(AMBAC) 5.50% 12/1/15 ............................... 1,755,000 1,855,877
South St. Paul Housing & Redevelopment Authority
Single Family Housing Mortgage Series 93
(FNMA) 5.75% 9/1/20 ................................. 2,385,000 2,457,957
St. Paul Housing & Redevelopment Authority
Multifamily Housing
(FHA) 6.60% 10/1/12 ................................. 4,000,000 4,289,120
White Bear Lake Multifamily Housing Lake Square
(FHA) 5.875% 2/1/15 ................................. 1,055,000 1,116,011
----------
54,559,653
----------
POWER AUTHORITY REVENUE BONDS - 9.22%
Bass Brook Pollution Control Revenue for Minnesota
Power & Light Company (MBIA)
6.00% 7/1/22 ........................................ 2,000,000 2,138,320
Marshall Utility Revenue (FSA) 6.45% 7/1/10 ............ 500,000 549,245
Marshall Utility Revenue (FSA) 6.45% 7/1/11 ............ 100,000 109,849
Marshall Utility Revenue (FSA) 6.50% 7/1/12 ............ 500,000 550,230
Marshall Utility Revenue (FSA) 6.50% 7/1/13 ............ 500,000 550,230
Northern Minnesota Municipal Power Agency
(FSA) 5.25% 1/1/13 .................................. 4,750,000 4,997,903
Northern Minnesota Municipal Power Agency
Electric Systems 4.75% 1/1/20 ....................... 1,500,000 1,459,290
Northern Minnesota Municipal Power Agency Electric
System Revenue (AMBAC) 5.50% 1/1/18 ................. 4,200,000 4,349,772
Puerto Rico Electric Power Authority Revenue
Ref-Series GG 4.75% 9/1/21 .......................... 1,000,000 974,410
Puerto Rico Electric Power Authority Inverse
Floater 5.83% 7/1/19 ................................ 2,825,000 2,568,151
Southern Minnesota Municipal Power Agency
(AMBAC) 5.75% 1/1/18 ................................ 1,330,000 1,408,271
Southern Minnesota Municipal Power Agency
(FGIC) 5.75% 1/1/18 ................................. 4,570,000 4,838,945
Southern Minnesota Municipal Power Agency
(MBIA) 4.75% 1/1/16 ................................. 2,400,000 2,364,312
Southern Minnesota Municipal Power Agency,
Inverse Floater (FGIC) 7.92% 1/1/18 ................. 750,000 836,640
----------
27,695,568
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
------------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS - 31.79%
Alexandria Independent School District #206 (MBIA)
6.30% 2/1/13 Crossover
Refunded to 2/1/03 ................................. $ 1,775,000 $1,921,384
Becker Wastewater Treatment Facility Series A
(MBIA) 5.95% 2/1/14 Crossover
Refunded to 2/1/04 ................................. 500,000 541,905
Brainerd Independent School District #181 (FGIC)
7.00% 6/1/09 Crossover
Refunded to 6/1/01 ................................. 515,000 551,241
Brainerd Independent School District #181
(FGIC) 7.00% 6/1/10 Crossover
Refunded to 6/1/01 ................................. 550,000 588,703
Buffalo Independent School District #887
(FSA) 6.10% 2/1/15 Crossover
Refunded to 2/1/03 ................................. 1,030,000 1,109,485
Carver County Housing & Redevelopment Authority
Jail Facility (MBIA) 6.40% 2/1/10
Crossover Refunded to 2/1/02 ....................... 515,000 550,818
Carver County Housing & Redevelopment Authority
Jail Facility (MBIA) 6.40% 2/1/11
Crossover Refunded to 2/1/02 ....................... 550,000 588,252
Carver County Housing & Redevelopment Authority
Jail Facility (MBIA) 6.40% 2/1/12
Crossover Refunded to 2/1/02 ....................... 585,000 625,687
Carver County Housing & Redevelopment Authority
Jail Facility (MBIA) 6.40% 2/1/13
Crossover Refunded to 2/1/02 ....................... 625,000 668,469
Carver County Housing & Redevelopment Authority
Jail Facility (MBIA) 6.40% 2/1/14
Crossover Refunded to 2/1/02 ....................... 670,000 716,598
Centennial Independent School District #12
(FSA) 7.10% 2/1/09-00 .............................. 200,000 207,308
Centennial Independent School District #12
(FSA) 7.15% 2/1/11-00 .............................. 450,000 466,645
Centennial Independent School District #12
(FSA) 7.15% 2/1/12-00 .............................. 250,000 259,247
Dakota & Washington Counties Housing &
Redevelopment Authority Single Family Mortgage
Revenue (Escrowed to Maturity) (MBIA)
8.15% 9/1/16 ....................................... 405,000 541,728
Dakota & Washington Counties Housing &
Redevelopment Authority Single Family Mortgage
Revenue (Escrowed to Maturity) (GNMA)
8.375% 9/1/21 ...................................... 14,115,000 19,921,629
Dakota & Washington Counties Housing &
Redevelopment Authority Single Family Mortgage
Revenue (Escrowed to Maturity) (GNMA)
8.45% 9/1/19 ....................................... 9,000,000 12,614,759
Delano Independent School District #879
(AMBAC) 7.25% 2/1/10 Crossover
Refunded to 2/1/01 ................................. 500,000 532,440
<PAGE>
for tax-exempt income 17
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
------------------------
MUNICIPAL BONDS (CONTINUED)
PRE-REFUNDED/ESCROWED TO MATURITY BONDS (CONTINUED)
Duluth Economic Development Authority Health Care
Duluth Clinic (AMBAC) 6.30% 11/1/22
Crossover Refunded to 11/1/04 ....................... $ 1,060,000 $1,196,655
Eden Prairie Independent School District #272
(FGIC) 5.85% 2/1/13
Crossover Refunded 2/1/01 ........................... 2,500,000 2,636,350
Elk River Independent School District #728
(FSA) 7.00% 2/1/10 Crossover
Refunded to 2/1/00 .................................. 200,000 206,398
Elk River Independent School District #728
(FSA) 6.30% 2/1/14 Crossover
Refunded to 2/1/02 .................................. 500,000 533,410
Elk River Independent School District #728
(FSA) 6.30% 2/1/15 Crossover
Refunded to 2/1/02 .................................. 665,000 709,435
Elk River Independent School District #728
Series 92 B (AMBAC) 6.00% 2/1/09
Crossover Refunded to 2/1/03 ........................ 3,950,000 4,240,641
Ellendale Geneva Independent School District #762
(AMBAC) 6.00% 2/1/10
Crossover Refunded to 2/1/03 ........................ 230,000 246,923
Ellendale Geneva Independent School District #762
(AMBAC) 6.00% 2/1/11 Crossover
Refunded to 2/1/03 .................................. 245,000 263,027
Ellendale Geneva Independent School District #762
(AMBAC) 6.00% 2/1/12
Crossover Refunded to 2/1/03 ........................ 265,000 284,499
Ellendale Geneva Independent School District #762
(AMBAC) 6.00% 2/1/13
Crossover Refunded to 2/1/03 ........................ 280,000 300,602
Ellendale Geneva Independent School District #762
(AMBAC) 6.00% 2/1/14
Crossover Refunded to 2/1/03 ........................ 300,000 322,074
Ellendale Geneva Independent School District #762
(AMBAC) 6.00% 2/1/15
Crossover Refunded to 2/1/03 ........................ 320,000 343,546
Farmington Independent School District #192
(MBIA) 6.80% 2/1/11
Crossover Refunded to 2/1/01 ........................ 850,000 898,152
Maplewood Independent School District #622
(MBIA) 7.10% 2/1/19-05 .............................. 5,935,000 6,928,756
Maplewood Independent School District #622
(FSA) 7.10% 2/1/25-05 ............................... 11,525,000 13,454,746
Minnesota Public Facilities Authority Water
Pollution Control Revenue (MBIA)
6.50% 3/1/14-02 ..................................... 1,500,000 1,651,650
Moorhead Independent School District #152
(AMBAC) 5.90% 2/1/10
Crossover Refunded to 2/1/01 ........................ 475,000 494,090
Moorhead Independent School District #152
(AMBAC) 5.90% 2/1/11
Crossover Refunded to 2/1/01 ........................ 505,000 525,296
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
------------------------
MUNICIPAL BONDS (CONTINUED)
PRE-REFUNDED/ESCROWED TO MATURITY BONDS (CONTINUED)
Moorhead Independent School District #152
(AMBAC) 5.90% 2/1/12
Crossover Refunded to 2/1/01 ........................ $ 540,000 $ 561,703
Moorhead Independent School District #152
(AMBAC) 6.00% 2/1/13
Crossover Refunded to 2/1/01 ........................ 575,000 599,162
Moorhead Minnesota Public Utilities (MBIA)
6.25% 11/1/12
Crossover Refunded to 11/1/02 ....................... 735,000 794,653
Mora Series A (AMBAC)
6.85% 2/1/10-00 ..................................... 245,000 253,406
Mora Series A (AMBAC)
6.85% 2/1/11-00 ..................................... 265,000 274,092
Northern Minnesota Municipal
Power Agency Series B
(AMBAC) 5.90% 1/1/08-03 ............................. 700,000 767,942
Roseau Independent School District #682 (AMBAC)
7.00% 2/1/16
Crossover Refunded to 2/1/00 ........................ 500,000 515,995
St. Cloud Hospital Facility Revenue (AMBAC)
6.75% 7/1/15-01 ..................................... 500,000 546,400
St. Cloud Hospital Facility Revenue (AMBAC)
6.75% 7/1/11-01 ..................................... 400,000 437,120
St. Cloud Hospital Facility Revenue (AMBAC)
7.00% 7/1/07-01 ..................................... 500,000 549,170
St. Louis Park Methodist Hospital (AMBAC)
7.25% 7/1/18-00 ..................................... 500,000 535,675
South St. Paul Independent School District #6 (FGIC)
6.45% 2/1/11
Crossover Refunded to 2/1/00 ........................ 500,000 513,550
South St. Paul Independent School District #6 (FGIC)
6.45% 2/1/12
Crossover Refunded to 2/1/00 ........................ 300,000 308,130
South St. Paul Independent School District #6
(FGIC) 6.25% 2/1/10
Crossover Refunded to 2/1/00 ........................ 625,000 640,825
South Washington County Independent School
District #883 (FGIC) 6.875% 6/1/11-00 ............... 520,000 541,798
Southern Minnesota Municipal Power Agency Revenue
(Escrowed to Maturity)
(MBIA) 5.75% 1/1/18 ................................. 3,790,000 4,066,670
Southern Minnesota Municipal
Power Agency Revenue (Escrowed to Maturity)
(AMBAC) 5.75% 1/1/18 ................................ 670,000 718,910
Warroad Independent School District #690
(AMBAC) 6.85% 2/1/13-00 ............................. 500,000 515,325
Washington County Housing & Redevelopment
Authority Jail Facilities (MBIA)
7.00% 2/1/12-02 ..................................... 500,000 547,290
Western Minnesota Municipal Power Agency Revenue
(Escrowed to Maturity) (MBIA)
6.60% 1/1/10 ........................................ 2,000,000 2,286,500
<PAGE>
18 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
------------------------
MUNICIPAL BONDS (CONTINUED)
PRE-REFUNDED/ESCROWED TO MATURITY BONDS (CONTINUED)
Western Minnesota Municipal Power Agency Revenue
(Escrowed to Maturity) (MBIA)
9.75% 1/1/16 ........................................ $ 530,000 $ 811,690
Wright County (FSA) (AMT)
7.20% 12/1/12-99 .................................... 1,000,000 1,030,250
------------
95,458,804
------------
TRANSPORTATION BONDS - 0.65%
Puerto Rico Commonwealth Highway & Transportation
Authority Revenue Series A Zero Coupon
(AMBAC) 7/1/18 ...................................... 5,000,000 1,943,250
------------
1,943,250
------------
Total Municipal Bonds (cost $268,272,485) .............. 291,798,068
------------
NUMBER OF
SHARES
---------
SHORT-TERM INVESTMENTS - 1.90%
Federated Minnesota Municipal Money Market ............. 5,716,700 5,716,700
------------
Total Short-Term Investments
(cost $5,716,700) ................................... 5,716,700
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.07%
(COST $273,989,185) ................................. $297,514,768
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES - 0.93% ................................. 2,791,491
------------
NET ASSETS APPLICABLE TO 27,317,967 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% .............. $300,306,259
============
NET ASSET VALUE - MINNESOTA INSURED FUND A CLASS
($284,722,436 / 25,899,657 SHARES) .................. $10.99
======
NET ASSET VALUE - MINNESOTA INSURED FUND B CLASS
($11,648,391 / 1,060,434 SHARES) .................... $10.98
======
NET ASSET VALUE - MINNESOTA INSURED FUND C CLASS
($3,935,432 / 357,876 SHARES) ....................... $11.00
======
- ------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
<PAGE>
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 FEBRUARY 28, 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 ...................... $283,129,527
Distributions in excess of net investment income ....... (3,213)
Accumulated net realized loss on investments ........... (6,345,638)
Net unrealized appreciation of investments ............. 23,525,583
------------
Total net assets ....................................... $300,306,259
============
NET ASSET VALUE AND OFFERING PRICE FOR
MINNESOTA INSURED FUND A CLASS
Net Asset Value per share (A) .......................... $10.99
Sales Charge (3.75% of offering price or 3.91% of
amount invested per share)(B) ....................... 0.43
------
Offering Price ......................................... $11.42
======
- ------------
(A) Net asset value per share illustrated is the estimated amount
which would be paid upon the redemtion or repurchase of shares.
(B) See How to Buy Shares in the current prospectus for purchase
of $100,000.
See accompanying notes
<PAGE>
for tax-exempt income 19
VOYAGEUR INTERMEDIATE TAX-FREE FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE MINNESOTA INTERMEDIATE FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS - 99.46%
GENERAL OBLIGATION BONDS - 3.38%
Olmstead County Resource Recovery Series A
5.90% 2/1/05 .................................... $1,175,000 $ 1,238,368
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 .................................... 1,000,000 923,400
----------
2,161,768
----------
HEALTH CARE/HOSPITAL REVENUE BONDS - 20.41%
Fergus Falls Health Care Facility Broen Memorial
Home Project 6.20% 11/1/05 ...................... 100,000 103,908
Fergus Falls Health Care Facility Broen Memorial
Home Project 6.30% 11/1/06 ...................... 200,000 208,732
Fergus Falls Health Care Facility Broen Memorial
Home Project 6.40% 11/1/07 ...................... 200,000 208,700
Fergus Falls Health Care Facility Broen Memorial
Home Project 6.60% 11/1/09 ...................... 240,000 250,361
Fergus Falls Health Care Facility Broen Memorial
Home Project 6.70% 11/1/10 ...................... 260,000 271,183
Maplewood Healthcare Facility For Health East
5.70% 11/15/02 .................................. 1,000,000 1,001,690
Maplewood Healthcare Facility For Health East
5.95% 11/15/06 .................................. 2,200,000 2,193,070
Minneapolis Health Care Facilities Jones-Harrison
Residence Project 5.90% 10/1/16 ................. 125,000 126,623
Rochester Health Care Facilities Revenue Mayo
Foundation Series B 5.50% 11/15/27 .............. 2,000,000 2,086,560
Rochester Nursing Home & Multifamily Housing
Revenue Samaritan Bethany, Inc.
6.00% 5/1/04 .................................... 300,000 304,575
Rochester Nursing Home & Multifamily Housing
Revenue Samaritan Bethany, Inc.
6.10% 5/1/05 .................................... 250,000 253,808
St. Paul Housing & Redevelopment Authority Health
Care Facility Revenue Regions Hospital Project
5.30% 5/15/28 ................................... 3,000,000 2,896,140
St. Paul Housing & Redevelopment Authority for
Health East Authority Hospital Revenue
5.70% 11/1/15 ................................... 2,100,000 2,031,876
St. Paul Housing & Redevelopment Authority for
Health East Authority Hospital Revenue
5.85% 11/1/17 ................................... 1,160,000 1,132,879
----------
13,070,105
----------
HIGHER EDUCATION REVENUE BONDS - 3.25%
Minnesota Higher Education Facility Authority
Augsburg College Series 4F2 5.75% 5/1/16 ........ 2,005,000 2,080,508
2,080,508
HOUSING REVENUE BONDS - 6.19%
Burnsville Multifamily Housing Revenue Burnsville
Apts. Project (LOC Twin City Federal) Mandatory
Put 7.00% 9/1/99 ................................ 580,000 582,175
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Oakdale Elderly Housing Revenue PHM/Oakdale
Project 5.75% 3/1/18 ............................ $ 1,400,000 $ 1,408,904
Oakdale Housing Oak Meadows Project
6.20% 4/1/07 .................................... 150,000 157,934
Oakdale Housing Oak Meadows Project
6.30% 4/1/08 .................................... 260,000 273,707
Oakdale Housing Oak Meadows Project
6.50% 4/1/10 .................................... 295,000 311,797
Park Rapids Multifamily Revenue The Court
Apartments Project Section 8 6.05% 8/1/12 ....... 1,125,000 1,137,049
St. Paul Housing & Redevelopment Single Family
Mortgage (FNMA) 6.90% 12/1/21 ................... 85,000 89,604
----------
3,961,170
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 15.00%
Andover Development Revenue Downtown Center
Project Series A 6.50% 12/1/06 .................. 1,795,000 1,874,285
Anoka County Minnesota Resource Recovery
Revenue-Northern States Power Company
PJ 4.50% 12/1/07 ................................ 1,000,000 993,510
Anoka County Minnesota Resource Recovery
Revenue-Northern States Power Company
PJ 4.60% 12/1/08 ................................ 1,000,000 995,280
Brooklyn Center Commercial Development Revenue
Brookdale Association Reliastar Life Insurance Co
Mandatory Put 5.70% 6/1/01 ...................... 1,000,000 1,043,510
Duluth Gross Revenue Bond Duluth Entertainment
Project 7.00% 12/1/03 ........................... 1,250,000 1,381,488
Duluth Gross Revenue Bond Duluth Entertainment
Project 7.30% 12/1/06 ........................... 250,000 285,528
Richfield Shoppes Commercial Development
Revenue Richfield Shoppes Project
7.50% 10/1/04 ................................... 950,000 985,264
St. Paul Port Authority Commercial Development
Revenue Fort Rd Medical (Asset Gty)
7.50% 9/1/02 .................................... 2,000,000 2,042,300
----------
9,601,165
----------
LEASE/CERTIFICATES OF PARTICIPATION - 3.65%
Beltrami County Housing & Redevelopment
Authority Revenue 5.90% 2/1/08 .................. 355,000 375,810
Beltrami County Housing & Redevelopment
Authority Revenue 6.00% 2/1/09 .................. 380,000 402,207
Beltrami County Housing & Redevelopment
Authority Revenue 6.00% 2/1/10 .................. 405,000 426,542
Beltrami County Housing & Redevelopment
Authority Revenue 6.10% 2/1/11 .................. 430,000 453,925
Hibbing Economic Development Authority Revenue
6.10% 2/1/08 .................................... 650,000 681,499
----------
2,339,983
----------
<PAGE>
20 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
POWER AUTHORITY REVENUE BONDS - 6.32%
Eveleth Industrial Development Revenue for
Minnesota Power & Light Company
6.125% 1/1/04 ..................................... $2,500,000 $ 2,658,750
Puerto Rico Electric Power Authority ROLS
Inverse Floater 5.69% 7/1/19 ...................... 1,000,000 909,080
Southern Minnesota Municipal Power Agency Power
Supply System Revenue Capital Appreciation-
Series A Zero Coupon 1/1/27 ....................... 2,000,000 480,620
-----------
4,048,450
-----------
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS - 38.26%
Austin Independent School District #492
(MBIA) 6.875% 2/1/12
Crossover Refunded to 2/1/01 ...................... 1,205,000 1,274,914
Braham Independent School District #314
(AMBAC) 6.30% 2/1/19
Crossover Refunded to 2/1/01 ...................... 3,015,000 3,158,243
Eden Valley Watkins Independent School District
#463 (FSA) 6.55% 2/1/11
Crossover Refunded to 2/1/02 ...................... 250,000 268,410
Eden Valley Watkins Independent School District
#463 (FSA) 6.60% 2/1/16
Crossover Refunded to 2/1/02 ...................... 615,000 661,131
Mankato Independent School District #77
(FSA) 6.35% 2/1/13
Crossover Refunded to 2/1/02 ...................... 1,750,000 1,869,315
Metropolitan Council Hubert H Humphrey Metrodome
Sports Facility Revenue Series 92 (Escrowed to
Maturity) 6.00% 10/1/09 ........................... 3,520,000 3,796,424
Minneapolis/St. Paul HealthOne Series B
(Escrowed to Maturity) 7.55% 8/15/00 .............. 325,000 344,867
Minnesota Public Facilities Authority Pollution
Control Revenue Series A 6.55% 3/1/03 ............. 1,720,000 1,844,700
Minnesota State 6.25% 8/1/10-02 ...................... 4,000,000 4,343,960
Olmstead County 6.85% 2/1/02-01 ...................... 800,000 851,384
Olmstead County 6.90% 2/1/03-01 ...................... 900,000 958,635
Olmstead County 6.95% 2/1/04-01 ...................... 950,000 1,012,767
Richfield Independent School District #280
Series C Inverse Floater 5.34% 2/1/15
Crossover Refunded to 2/1/03 ...................... 1,000,000 1,107,340
St. Cloud Hospital Facility Revenue (AMBAC)
7.00% 7/1/20-01 ................................... 2,740,000 3,006,218
-----------
24,498,308
-----------
WATER & SEWER REVENUE BONDS - 3.00%
Minnesota Public Facilities Authority Water
Pollution Control Revenue 5.74% 3/1/16 ............ 2,000,000 1,920,040
-----------
1,920,040
-----------
Total Municipal Bonds (cost $61,617,549) ............. 63,681,497
===========
NUMBER OF
SHARES
---------
SHORT-TERM INVESTMENTS - 2.43%
Norwest Federated Municipal
Money Market Fund ................................. 1,555,682 1,555,682
-----------
Total Short-Term Investments
(cost $1,555,682) ................................. 1,555,682
-----------
<PAGE>
TOTAL MARKET VALUE OF SECURITIES OWNED - 101.89%
(COST $63,173,231) ...................................... $65,237,179
LIABILITIES NET OF RECEIVABLES AND
OTHER ASSETS - (1.89%) .................................. (1,212,304)
-----------
NET ASSETS APPLICABLE TO 5,785,915 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% .................. $64,024,875
===========
NET ASSET VALUE - TAX-FREE MINNESOTA INTERMEDIATE FUND
A CLASS ($59,771,214 / 5,401,849 SHARES) ................ $11.06
======
NET ASSET VALUE - TAX-FREE MINNESOTA INTERMEDIATE FUND
B CLASS ($2,166,186 / 195,494 SHARES) ................... $11.08
======
NET ASSET VALUE - TAX-FREE MINNESOTA INTERMEDIATE FUND
C CLASS ($2,087,475 / 188,572 SHARES) ................... $11.07
======
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
Summary of Abbreviations:
AMBAC -Insured by the AMBAC Indemnity Corporation
Asset Gty -Insured by the Asset Guaranty Insurance Company
FNMA -Insured by the Federal National Mortgage Association
FSA -Insured by Financial Security Assurance
LOC -Line of Credit
MBIA -Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 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 Fund B Class, and 1,000,000,000 shares
allocated to Tax-Free Minnesota Intermediate
Fund C Class ............................................. $61,991,528
Undistributed net investment income ......................... $1,703
Accumulated net realized loss on investments ................ (32,304)
Net unrealized appreciation of invesments ................... 2,063,948
-----------
Total Net Assets ............................................ $64,024,875
===========
NET ASSET VALUE AND OFFERING PRICE FOR TAX-FREE MINNESOTA
INTERMEDIATE FUND A CLASS
Net asset value per share (A) ................................ $11.06
Sales charge(2.75% of offering price or 2.80% of amount
invested per share) (B) ................................... 0.31
------
Offering price ............................................... $11.37
======
(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.
See accompanying notes
<PAGE>
for tax-exempt income 21
VOYAGEUR MUTUAL FUNDS, INC.
DELEWARE-VOYAGEUR MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS - 95.59%
CITY AGENCIES REVENUE BONDS - 3.12%
Minneapolis Community Development Agency Common
Bond Fund Series 2 6.20% 6/1/17 ................... $ 750,000 $ 799,748
Minneapolis Community Development Agency Revenue
Limited Tax Series 4 6.20% 6/1/17 ................. 1,055,000 1,102,602
---------
1,902,350
---------
GENERAL OBLIGATION BONDS - 3.12%
Inner Grove Heights (MN School District Enhanced)
Series A 5.75% 2/1/13 ............................. 100,000 107,842
Puerto Rico Commonwealth 5.375% 7/1/25 ............... 500,000 515,355
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ...................................... 1,270,000 1,172,718
Waconia Independent School District Series 93A
(FSA) 5.45% 2/1/15 ................................ 100,000 102,897
---------
1,898,812
---------
HIGHER EDUCATION REVENUE BONDS - 3.64%
Minnesota State Higher Education Facility
Macalester College 4C 5.50% 3/1/12 ................ 100,000 104,668
Minnesota State Higher Education Facility
St. Mary's College Series 3Q
6.15% 10/1/23 ..................................... 900,000 931,842
Minnesota State University System Revenue
Bonds Series 93A 6.10% 6/30/23 .................... 100,000 104,068
University Of Minnesota Series A
5.50% 7/1/21 ...................................... 1,000,000 1,075,160
---------
2,215,738
---------
HOSPITAL REVENUE BONDS - 19.86%
Cambridge Healthcare Facility Revenue Grandview
Christian Home 7.25% 9/1/26 ....................... 125,000 132,850
Cannon Falls Nursing Home Franciscan Health
Community Project 7.25% 7/1/21 .................... 100,000 104,312
Duluth Economic Development Authority Health Care
Facilities St. Francis Health Care Facility
6.75% 12/1/17 ..................................... 325,000 342,573
Fergus Falls Health Care Facility Revenue Lake
Region Hospital 6.50% 9/1/18 ...................... 750,000 816,938
Glencoe Health Care Revenue
6.40% 12/1/15 ..................................... 275,000 291,574
Little Canada Senior Facility Residence Series 92
(Presbyterian Homes Guaranteed)
7.25% 7/1/12 ...................................... 250,000 260,843
Mankato Health Facilities Revenue Mankato Lutheran
Homes Series A 6.875% 10/1/26 ..................... 300,000 311,343
Minneapolis Health Care American Baptist Homes
8.70% 11/1/09 ..................................... 150,000 166,044
Minneapolis Health Care Facility Revenue
Jones-Harrison Residence Project
6.00% 10/1/27 ..................................... 1,565,000 1,585,235
Minneapolis Housing & Health Care Facility Revenue
Augustana Chapel View Homes
6.50% 6/1/17 ...................................... 1,370,000 1,408,798
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Northfield Health Care Facilities Revenue
Refunding & Improvement (Northfield Care Center)
Series A 6.00% 5/1/28 ........................... $ 1,405,000 $ 1,419,247
Perham Hospital District Congregate Housing
Facilities Briarwood Project 6.25% 2/1/22 ....... 620,000 628,618
Robbinsdale North Memorial Medical (AMBAC)
5.50% 5/15/23 ................................... 100,000 102,844
Rochester Health Care Facilities Revenue Reg IRS
for Mayo Clinic, Series H Inverse Floater
7.864% 11/15/15 ................................. 1,500,000 1,744,095
Springfield St. John's Lutheran Home Revenue
8.50% 11/1/19 ................................... 150,000 157,418
St. Paul Housing & Redevelopment Hospital
Revenue for Health East Series B
6.625% 11/1/17 .................................. 490,000 507,650
St. Paul Housing & Redevelopment Hospital
Revenue for Health East Series A
6.625% 11/1/17 .................................. 240,000 248,645
Waconia Good Samaritan Housing & Redevelopment
Revenue for The Evangelical Lutheran
Series A 6.00% 6/1/14 ........................... 660,000 683,872
Wadena County Health Care Facility Gross Revenue
Series B 7.75% 9/1/24 ........................... 250,000 278,310
Washington County Housing & Redevelopment
Authority for Health East
5.50% 11/15/27 .................................. 1,000,000 899,190
----------
12,090,399
----------
HOUSING REVENUE BONDS - 50.61%
Bloomington Multifamily Housing Revenue Refunding
Hampshire Apartments Series
A 6.20% 12/1/31 ................................. 2,500,000 2,496,225
Brooklyn Center Four Court Multifamily Housing
7.50% 6/1/25 .................................... 370,000 388,223
Carver Multifamily Housing Lake Grace
6.25% 7/1/28 .................................... 330,000 346,883
Carver Multifamily Housing Lake Grace
8.00% 7/1/28 .................................... 320,000 352,467
Chanhassen Multifamily Housing Heritage Park
6.20% 7/1/30 .................................... 300,000 319,266
Cheska Multifamily West Suburban Housing Partners
7.875% 3/1/31 ................................... 1,000,000 997,130
Coon Rapids Multifamily Revenue Margaret Place
Series A 6.50% 5/1/25 ........................... 500,000 507,740
Coon Rapids Senior Housing Revenue Refunding
Epiphany Senior Citizens Housing Corporation
Project 6.00% 11/1/28 ........................... 3,455,000 3,456,555
Eden Prairie Health Care Facilities Revenue
Refunding Castle Ridge Care Center
5.70% 7/1/28 .................................... 1,740,000 1,690,149
<PAGE>
22 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Eden Prairie Multifamily Housing Subordinated
Tanager Creek 8.00% 6/20/31 ....................... $ 770,000 $ 801,054
Hibbing Economic Development Authority
6.40% 2/1/12 ...................................... 530,000 555,387
Hutchinson Multifamily Housing Revenue Evergreen
Apartments Project, Section 8
5.75% 11/1/28 ..................................... 3,630,000 3,624,552
Minneapolis Multifamily Housing Olson Townhomes,
Section 8 6.00% 12/1/19 ........................... 800,000 827,664
Minneapolis-Nicollet Towers Multifamily Housing,
Section 8 6.00% 12/1/19 ........................... 300,000 318,609
Minnesota Housing Finance Authority Single Family
Mortgage Series E 6.25% 1/1/23 .................... 90,000 94,342
Minnesota Housing Finance Authority Single Family
Housing 5.875% 1/1/17 ............................. 100,000 104,925
Minnesota State Housing Finance Agency Single
Family Mortgage Series K 5.75% 1/1/26 ............. 1,000,000 1,028,140
Minnetonka Multifamily Housing Beacon Hill
Senior Housing Project (Presbyterian Homes
Guaranteed) 7.55% 6/1/19 .......................... 200,000 214,808
Minnetonka Senior Housing Revenue
Westridge Senior Housing Project
6.30% 9/1/08 ...................................... 110,000 114,599
Minnetonka Senior Housing Revenue
Westridge Senior Housing Project
6.50% 9/1/12 ...................................... 285,000 296,850
Minnetonka Senior Housing Revenue
Westridge Senior Housing Project
7.00% 9/1/27 ...................................... 1,275,000 1,343,238
Moorhead Economic Development Authority
Multifamily Revenue Refunding & Improvement
Housing Development for Eventide Series B
6.00% 6/1/18 ...................................... 870,000 872,279
New Brighton Multifamily Polynesian
Village Apartments 7.60% 4/1/25 ................... 300,000 321,804
Oakdale Elderly Housing Revenue PHM/Oakdale
Project 6.00% 3/1/28 .............................. 1,800,000 1,822,770
Oakdale Housing Oak Meadows Project
6.75% 4/1/15 ...................................... 1,500,000 1,594,965
Shoreview Elderly Housing (Presbyterian Homes of
Homes)/Shoreview Project 6.15% 12/1/33 ............ 2,955,000 2,961,087
St. Anthony Multifamily Housing Chandler (GNMA)
6.05% 11/20/16 .................................... 135,000 144,939
St. Louis Park Multifamily Mortgage Revenue
Tamarind Project (FNMA)
5.50% 11/1/13 ..................................... 125,000 128,566
Stillwater Multifamily Housing Stillwater Cottages
6.75% 11/1/11 ..................................... 205,000 210,340
<PAGE>
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Stillwater Multifamily Housing Stillwater Cottages
7.00% 11/1/27 ................................... $ 340,000 $ 350,540
Stillwater Multifamily Housing Stillwater Cottages
7.00% 11/1/16 ................................... 680,000 701,080
Twin Valley Congregate Housing Revenue Living
Options Incorporated Project 5.95% 11/1/28 ...... 1,825,000 1,822,281
----------
30,809,457
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 3.36%
Andover Development Revenue Downtown Center
Project Series A 7.00% 12/1/12 .................. 1,640,000 1,745,419
Red Wing Industrial Development Revenue for Kmart
(First Mortgage) 5.50% 7/1/08 ................... 300,000 302,673
----------
2,048,092
----------
LEASE/CERTIFICATES OF PARTICIPATION - 1.68%
Beltrami County Housing & Redevelopment
Authority Revenue Lease 6.10% 2/1/12 ............ 460,000 484,394
Rice County Certificate of Participation
6.00% 12/1/21 ................................... 125,000 131,053
Saint Cloud Certificate of Participation
5.90% 12/1/17 ................................... 400,000 410,008
----------
1,025,455
----------
POWER AUTHORITY REVENUE BONDS - 2.63%
Bass Brook Pollution Control Revenue for Minnesota
Power & Light 6.00% 7/1/22 ...................... 805,000 845,524
Puerto Rico Electric Power Authority
Inverse Floater 5.83% 7/1/19 .................... 400,000 363,632
Southern Minnesota Municipal Power Agency
(FGIC) 5.75% 1/1/18 ............................. 100,000 105,885
Western Municipal Power Agency Revenue
6.125% 1/1/16 ................................... 285,000 285,875
----------
1,600,916
----------
*PRE-REFUNDED BONDS - 0.36%
Esko Independent School District #99 (FSA)
5.75% 4/1/17-05 ................................. 100,000 108,514
Stewartville Independent School District (MN
School District Enhanced) Series A
5.75% 2/1/12-05 ................................. 100,000 108,035
----------
216,549
----------
WATER & SEWER REVENUE BONDS - 4.75%
Minnesota Public Facilities Authority Water
Pollution Control Revenue Inverse Floater
6.13% 3/1/18 .................................... 3,000,000 2,889,870
----------
2,889,870
----------
OTHER REVENUE BONDS - 2.46%
Minneapolis Community Development Agency Revenue
Holiday Inn Metrodome Project
6.00% 12/1/01 ................................... 1,100,000 1,112,749
Woodbury Golf Course Revenue 6.75% 2/1/22 .......... 365,000 384,276
----------
1,497,025
----------
Total Municipal Bonds (cost $56,767,169) ........... 58,194,663
----------
<PAGE>
for tax-exempt income 23
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
---------------------------------------------
SHORT-TERM INVESTMENTS - 2.28%
Norwest Federated Municipal
Money Market Fund ......................................1,387,605 $ 1,387,605
-----------
Total Short-Term Investments
(cost $1,387,605) ...................................... 1,387,605
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 97.87%
(COST $58,154,774) ..................................... $59,582,268
RECIEVABLES AND OTHER ASSETS
NET OF LIABILITIES - 2.13% ............................. 1,297,780
-----------
NET ASSETS APPLICABLE TO 5,678,526 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ................. $60,880,048
===========
NET ASSET VALUE - MINNESOTA HIGH YIELD MUNICIPAL BOND
FUND A CLASS ($39,566,437 / 3,690,871 SHARES) .......... $10.72
======
NET ASSET VALUE - MINNESOTA HIGH YIELD MUNICIPAL BOND
FUND B CLASS ($15,012,837 / 1,399,952 SHARES) .......... $10.72
======
NET ASSET VALUE - MINNESOTA HIGH YIELD MUNICIPAL BOND
FUND C CLASS ($6,300,774 / 587,703 SHARES) ............. $10.72
======
- ----------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
Summary of Abbreviations:
AMBAC-Insured by the AMBAC Indemnity Corporation
FGIC -Insured by the Financial Guaranty Insurance Company
FSA -Insured by Financial Security Assurance
GNMA -Insured by the Government National Mortgage Association
FNMA -Insured by the Federal National Mortgage Association
<PAGE>
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 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 Fund C Class ................. $59,440,634
Distributions in excess of net investment income ........ (5,662)
Accumulated net realized gain on investments ............ 17,582
Net unrealized appreciation of investments .............. 1,427,494
-----------
Total Net Assets ........................................ $60,880,048
===========
NET ASSET VALUE AND OFFERING PRICE FOR MINNESOTA
HIGH YIELD MUNICIPAL BOND FUND A CLASS
Net asset value per share (A) ........................... $10.72
Sales charge (3.75% of offering price or 3.92% of amount
invested per share) (B) .............................. 0.42
------
Offering price .......................................... $11.14
======
(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.
See accompanying notes
<PAGE>
24 for tax-exempt income
DELAWARE GROUP MINNESOTA MUNICIPAL BOND FUNDS, INC. -
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR
VOYAGEUR VOYAGEUR INTERMEDIATE VOYAGEUR MUTUAL
TAX-FREE INSURED TAX-FREE FUNDS, INC.
FUNDS, INC. FUNDS, INC. FUNDS, INC. MINNESOTA HIGH
TAX-FREE MINNESOTA TAX-FREE MINNESOTA YIELD MUNICIPAL
MINNESOTA FUND INSURED FUND INTERMEDIATE FUND BOND FUND
-------------- ------------ ------------------ ---------------
INVESTMENT INCOME:
<S> <C> <C> <C> <C>
Interest .......................................... $12,417,469 $8,350,270 $1,699,927 $1,657,522
----------- ---------- ---------- ----------
EXPENSES:
Management fees ................................... 1,073,714 743,682 118,161 179,412
Distribution expense .............................. 601,934 426,447 59,380 143,227
Dividend disbursing and transfer agent
fees and expenses .............................. 148,442 108,118 27,428 4,844
Registration fees ................................. 9,800 8,250 1,400 591
Reports and statements to shareholders ............ 18,586 13,000 1,207 1,000
Accounting and administration ..................... 89,992 65,015 12,460 3,846
Professional fees ................................. 12,853 9,548 3,383 1,100
Custodian fees .................................... 5,500 7,900 2,500 600
Taxes (other than taxes on income) ................ 8,500 12,948 6,630 600
Amortization of organization expenses ............. -- (1,210) -- --
Directors' fees ................................... 4,754 3,383 1,785 568
Other ............................................. 2,919 465 2,061 2,177
----------- ---------- ---------- ----------
1,976,994 1,397,546 236,395 337,965
Less expenses absorbed by Delaware
Management Company ............................. -- -- -- (123,333)
----------- ---------- ---------- ----------
Total operating expenses .......................... 1,976,994 1,397,546 236,395 214,632
Interest expense .................................. 45,948 11,219 2,214 13,463
----------- ---------- ---------- ----------
Total expenses .................................... 2,022,942 1,408,765 238,609 228,095
----------- ---------- ---------- ----------
NET INVESTMENT INCOME ............................. 10,394,527 6,941,505 1,461,318 1,429,427
----------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments .................. 750,325 148,628 15,077 29,373
Net change in unrealized appreciation/
depreciation of investments .................... (3,028,497) (1,643,180) (575,511) (487,099)
----------- ---------- ---------- ----------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS ... (2,278,172) (1,494,552) (560,434) (457,726)
----------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................................ $8,116,355 $5,446,953 $900,884 $971,701
=========== ========== ========== ==========
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 25
DELAWARE GROUP MINNESOTA MUNICIPAL BOND FUNDS, INC. -
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC.
TAX-FREE MINNESOTA FUND
------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ............................. $10,394,527 $14,121,711 $22,233,984
Net realized gain on investments .................. 750,325 998,916 3,216,993
Net change in unrealized appreciation/
depreciation of investments .................... (3,028,497) 3,595,749 13,746,414
------------- ------------ ------------
Net increase in net assets resulting
from operations ................................ 8,116,355 18,716,376 39,197,391
------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ........................................ (9,991,857) (13,881,351) (21,801,997)
B Class ........................................ (221,491) (254,452) (342,308)
C Class ........................................ (115,199) (110,969) (121,569)
------------ ------------ ------------
(10,328,547) (14,246,772) (22,265,874)
------------ ------------ ------------
Net realized gain from investment
transactions:
A Class ........................................ (1,282,606) (701,597) --
B Class ........................................ (33,499) (16,734) --
C Class ........................................ (17,432) (7,940) --
------------ ------------ ------------
(1,333,537) (726,271) --
------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................ 16,632,548 16,789,907 30,690,547
B Class ........................................ 2,154,534 2,144,150 2,901,401
C Class ........................................ 1,924,733 2,221,006 1,258,502
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and net realized
gains on investment transactions:
A Class ........................................ 7,622,955 9,615,052 14,861,153
B Class ........................................ 185,596 203,099 265,963
C Class ........................................ 106,679 101,927 108,591
------------ ------------ ------------
28,627,045 31,075,141 50,086,157
------------ ------------ ------------
Cost of shares repurchased:
A Class ........................................ (17,572,997) (31,266,997) (73,076,182)
B Class ........................................ (646,827) (403,632) (1,502,411)
C Class ........................................ (346,775) (537,644) (1,472,994)
------------ ------------ ------------
(18,566,599) (32,208,273) (76,051,587)
------------ ------------ ------------
Increase (decrease) in net assets
derived from capital
share transactions ............................. 10,060,446 (1,133,132) (25,965,430)
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ............. 6,514,717 2,610,201 (9,033,913)
NET ASSETS:
Beginning of period ............................... 431,272,464 428,662,263 437,696,176
------------ ------------ ------------
End of period ..................................... $437,787,181 $431,272,464 $428,662,263
============ ============ ============
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<CAPTION>
VOYAGEUR INSURED FUNDS, INC.
MINNESOTA INSURED FUND
-------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ............................. $6,941,505 $9,421,773 $14,992,728
Net realized gain on investments .................. 148,628 32,436 1,476,574
Net change in unrealized appreciation/
depreciation of investments .................... (1,643,180) 2,911,667 7,964,819
------------ ------------ ------------
Net increase in net assets resulting
from operations ................................ 5,446,953 12,365,876 24,434,121
------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ........................................ (6,656,495) (9,116,602) (14,559,667)
B Class ........................................ (219,621) (253,079) (326,611)
C Class ........................................ (68,602) (84,466) (135,307)
------------ ------------ ------------
(6,944,718) (9,454,147) (15,021,585)
------------ ------------ ------------
Net realized gain from investment
transactions:
A Class ........................................ -- -- --
B Class ........................................ -- -- --
C Class ........................................ -- -- --
------------ ------------ ------------
-- -- --
------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................ 11,311,341 8,614,988 16,105,669
B Class ........................................ 1,682,913 1,720,072 2,803,647
C Class ........................................ 910,920 302,962 726,891
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and net realized
gains on investment transactions:
A Class ........................................ 4,509,399 6,103,879 10,480,178
B Class ........................................ 144,898 175,169 249,513
C Class ........................................ 55,094 65,047 114,902
------------ ------------ ------------
18,614,565 16,982,117 30,480,800
------------ ------------ ------------
Cost of shares repurchased:
A Class ........................................ (12,738,242) (22,936,162) (52,017,149)
B Class ........................................ (491,921) (547,658) (1,207,521)
C Class ........................................ (218,454) (287,466) (973,441)
------------ ------------ ------------
(13,448,617) (23,771,286) (54,198,111)
------------ ------------ ------------
Increase (decrease) in net assets
derived from capital
share transactions ............................. 5,165,948 (6,789,169) (23,717,311)
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ............. 3,668,183 (3,877,440) (14,304,775)
NET ASSETS:
Beginning of period ............................... 296,638,076 300,515,516 314,820,291
------------ ------------ ------------
End of period ..................................... $300,306,259 $296,638,076 $300,515,516
============ ============ ============
</TABLE>
See accompanying notes
<PAGE>
26 for tax-exempt income
DELAWARE GROUP MINNESOTA MUNICIPAL BOND FUNDS, INC. -
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VOYAGEUR INTERMEDIATE TAX-FREE FUNDS, INC.
TAX-FREE MINNESOTA INTERMEDIATE FUND
------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ............................ $1,461,318 $1,908,966 $2,988,988
Net realized gain (loss) on investments .......... 15,077 103,601 638,280
Net change in unrealized appreciation/
depreciation of investments ................... (575,511) (121,364) 321,114
----------- ----------- -----------
Net increase in net assets resulting
from operations ............................... 900,884 1,891,203 3,948,382
----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ....................................... (1,388,980) (1,838,819) (2,915,016)
B Class ....................................... (33,146) (29,833) (26,474)
C Class ....................................... (35,582) (42,221) (52,600)
----------- ----------- -----------
(1,457,708) (1,910,873) (2,994,090)
----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ....................................... 8,245,617 3,869,637 7,081,491
B Class ....................................... 837,942 702,708 669,318
C Class ....................................... 563,956 644,898 810,790
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class ....................................... 1,050,856 1,378,025 2,185,735
B Class ....................................... 23,302 24,782 23,336
C Class ....................................... 32,102 38,393 52,025
----------- ----------- -----------
10,753,775 6,658,443 10,822,695
----------- ----------- -----------
Cost of shares repurchased:
A Class ....................................... (3,223,445) (8,471,167) (18,684,272)
B Class ....................................... (54,605) (263,216) (205,353)
C Class ....................................... (150,460) (594,312) (510,897)
----------- ----------- -----------
(3,428,510) (9,328,695) (19,400,522)
----------- ----------- -----------
Increase (decrease) in net assets
derived from capital share
transactions .................................. 7,325,265 (2,670,252) (8,577,827)
----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ............ 6,768,441 (2,689,922) (7,623,535)
NET ASSETS:
Beginning of period .............................. 57,256,434 59,946,356 67,569,891
----------- ----------- -----------
End of period .................................... $64,024,875 $57,256,434 $59,946,356
=========== =========== ===========
See accompanying notes
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
MINNESOTA HIGH YIELD MUNICIPAL BOND FUND
-------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ............................ $1,429,427 $1,341,908 $1,229,469
Net realized gain (loss) on investments .......... 29,373 (648) (4,334)
Net change in unrealized appreciation/
depreciation of investments ................... (487,099) 659,652 1,166,080
----------- ----------- -----------
Net increase in net assets resulting
from operations ............................... 971,701 2,000,912 2,391,215
----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ....................................... (971,176) (873,324) (783,576)
B Class ....................................... (335,405) (359,748) (312,756)
C Class ....................................... (129,506) (134,232) (109,945)
----------- ----------- -----------
(1,436,087) (1,367,304) (1,206,277)
----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ....................................... 7,949,868 15,804,815 12,612,422
B Class ....................................... 2,230,281 5,379,096 5,453,844
C Class ....................................... 1,262,965 2,319,609 2,470,327
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class ....................................... 550,697 580,383 503,798
B Class ....................................... 197,402 202,199 160,239
C Class ....................................... 92,914 99,018 89,364
----------- ----------- -----------
12,284,127 24,385,120 21,289,994
----------- ----------- -----------
Cost of shares repurchased:
A Class ....................................... (1,933,231) (2,500,965) (903,309)
B Class ....................................... (644,984) (603,878) (475,668)
C Class ....................................... (173,248) (498,154) (405,467)
----------- ----------- -----------
(2,751,463) (3,602,997) (1,784,444)
----------- ----------- -----------
Increase (decrease) in net assets
derived from capital share
transactions .................................. 9,532,664 20,782,123 19,505,550
----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS ............ 9,068,278 21,415,731 20,690,488
NET ASSETS:
Beginning of period .............................. 51,811,770 30,396,039 9,705,551
----------- ----------- -----------
End of period .................................... $60,880,048 $51,811,770 $30,396,039
=========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 27
DELAWARE GROUP MINNESOTA MUNICIPAL BOND FUNDS, INC. -
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
-----------------------------------------------
SIX MONTHS EIGHT MONTHS
ENDED ENDED
2/28/99(1) 8/31/98(1) 12/31/97(3) 12/31/96
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $13.020 $12.910 $12.400 $12.630
Income from investment operations:
Net investment income .............................. 0.318 0.431 0.654 0.630
Net realized and unrealized gain (loss)
on investments ................................... (0.062) 0.136 0.511 (0.230)
------- ------- ------- -------
Total from investment operations ................... 0.256 0.567 1.165 0.400
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.316) (0.435) (0.655) (0.630)
Distributions from net realized gain
on investments ................................... (0.040) (0.022) -- --
In excess of net realized gains .................... -- -- -- --
------- ------- ------- -------
Total dividends and distributions .................. (0.356) (0.457) (0.655) (0.630)
------- ------- ------- -------
Net asset value, end of period ........................ $12.920 $13.020 $12.910 $12.400
======= ======= ======= =======
Total Return(2) ....................................... 1.94% 4.46% 9.68% 3.33%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $419,393 $416,113 $417,365 $428,380
Ratio of expenses to average net assets ............ 0.91% 0.89% 0.91% 0.92%
Ratio of expenses to average net assets prior
to expense limitation ............................ 0.91% 0.92% 0.95% 0.92%
Ratio of net investment income to average
net assets ....................................... 4.84% 5.00% 5.22% 5.13%
Ratio of net investment income to average net
assets prior to expense limitation ............... 4.84% 4.97% 5.18% 5.13%
Portfolio turnover ................................. 27% 13% 19% 28%
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC.
TAX-FREE MINNESOTA FUND A CLASS
----------------------------------
YEAR ENDED
12/31/95 12/31/94 12/31/93
<S> <C> <C> <C>
Net asset value, beginning of period .................. $11.330 $12.850 $12.210
Income from investment operations:
Net investment income .............................. 0.620 0.630 0.640
Net realized and unrealized gain (loss)
on investments ................................... 1.320 (1.480) 0.870
------- ------- -------
Total from investment operations ................... 1.940 (0.850) 1.510
------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.640) (0.610) (0.640)
Distributions from net realized gain
on investments ................................... -- (0.050) (0.230)
In excess of net realized gains .................... -- (0.010) --
------- ------- -------
Total dividends and distributions .................. (0.640) (0.670) (0.870)
------- ------- -------
Net asset value, end of period ........................ $12.630 $11.330 $12.850
======= ======= =======
Total Return(2) ....................................... 17.49% (6.73%) 12.70%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $455,220 $406,497 $458,145
Ratio of expenses to average net assets ............ 0.93% 0.90% 1.02%
Ratio of expenses to average net assets prior
to expense limitation ............................ 0.93% 0.90% 1.02%
Ratio of net investment income to average
net assets ....................................... 5.11% 5.29% 5.02%
Ratio of net investment income to average net
assets prior to expense limitation ............... 5.11% 5.29% 5.02%
Portfolio turnover ................................. 51% 24% 32%
</TABLE>
- -------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
See accompanying notes
<PAGE>
28 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 TAX-FREE FUNDS, INC.
TAX-FREE MINNESOTA FUND B CLASS
-----------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD FROM
ENDED ENDED YEAR ENDED 3/11/95(4)
2/28/99(1) 8/31/98(1) 12/31/97(3) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................... $13.020 $12.910 $12.400 $12.620 $11.900
Income from investment operations:
Net investment income ....................................... 0.268 0.366 0.574 0.560 0.450
Net realized and unrealized gain (loss)
from investments .......................................... (0.061) 0.136 0.508 (0.220) 0.710
------- ------- ------- ------- -------
Total from investment operations ............................ 0.207 0.502 1.082 0.340 1.160
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ........................ (0.267) (0.370) (0.572) (0.560) (0.440)
Distributions from net realized gain on investments ......... (0.040) (0.022) -- -- --
------- ------- ------- ------- -------
Total dividends and distributions ........................... (0.307) (0.392) (0.572) (0.560) (0.440)
------- ------- ------- ------- -------
Net asset value, end of period ................................. $12.920 $13.020 $12.910 $12.400 $12.620
======= ======= ======= ======= =======
Total Return(2) ................................................ 1.56% 3.94% 8.95% 2.83% 9.95%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ..................... $11,846 $10,246 $8,215 $6,233 $2,701
Ratio of expenses to average net assets ..................... 1.66% 1.64% 1.56% 1.50% 1.38%(5)
Ratio of expenses to average net assets prior to
expense limitation ........................................ 1.66% 1.67% 1.60% 1.67% 1.63%(5)
Ratio of net investment income to average net assets ........ 4.09% 4.25% 4.57% 4.53% 4.43%(5)
Ratio of net investment income to average net assets
prior to expense limitation ............................... 4.09% 4.22% 4.53% 4.36% 4.18%(5)
Portfolio turnover .......................................... 27% 13% 19% 28% 51%
</TABLE>
- ------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(3) 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 29
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 C CLASS
--------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD FROM
ENDED ENDED YEAR ENDED 5/4/94(4)
2/28/99(1) 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95 TO 12/31/94
(UNAUDITED)
<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 from investment operations:
Net investment income ............................ 0.273 0.374 0.564 0.540 0.530 0.340
Net realized and unrealized gain
(loss) from investments ........................ (0.076) 0.138 0.508 (0.220) 1.320 (0.610)
------- ------- ------- ------- ------- -------
Total from investment operations ................. 0.197 0.512 1.072 0.320 1.850 (0.270)
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............. (0.267) (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 ................ (0.307) (0.392) (0.562) (0.540) (0.550) (0.360)
------- ------- ------- ------- ------- -------
Net asset value, end of period ...................... $12.930 $13.040 $12.920 $12.410 $12.630 $11.330
======= ======= ======= ======= ======= =======
Total Return(2) ..................................... 1.48% 4.02% 8.82% 2.64% 16.62% (2.30%)
Ratios and supplemental data:
Net assets, end of period
(000 omitted) .................................. $6,548 $4,914 $3,083 $3,083 $2,319 $1,061
Ratio of expenses to average net assets .......... 1.66% 1.64% 1.65% 1.67% 1.67% 1.72%(5)
Ratio of expenses to average net assets
prior to expense limitation .................... 1.66% 1.67% 1.69% 1.67% 1.67% 1.72%(5)
Ratio of net investment income to
average net assets ............................. 4.09% 4.25% 4.48% 4.38% 4.33% 4.56%(5)
Ratio of net investment income to
average net assets prior to
expense limitation ............................. 4.09% 4.22% 4.44% 4.38% 4.33% 4.56%(5)
Portfolio turnover ............................... 27% 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>
30 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
--------------------------------------------------
SIX MONTHS EIGHT MONTHS
ENDED ENDED
2/28/99(1) 8/31/98(1) 12/31/97(3) 12/31/96
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.050 $10.940 $10.600 $10.730
Income from investment operations:
Net investment income ............................... 0.263 0.349 0.533 0.520
Net realized and unrealized gain (loss)
on investments .................................... (0.060) 0.111 0.341 (0.130)
-------- -------- -------- --------
Total from investment operations .................... 0.203 0.460 0.874 0.390
-------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ................ (0.263) (0.350) (0.534) (0.520)
Distributions from net realized gain
on investments .................................... -- -- -- --
-------- -------- -------- --------
Total dividends and distributions ................... (0.263) (0.350) (0.534) (0.520)
-------- -------- -------- --------
Net asset value, end of period ......................... $10.990 $11.050 $10.940 $10.600
======== ======== ======== ========
Total Return(2) ........................................ 1.81% 4.28% 8.49% 3.75%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............. $284,722 $283,057 $288,494 $304,877
Ratio of expenses to average net assets ............. 0.91% 0.92% 0.92% 0.92%
Ratio of expenses to average net assets
prior to expense limitation ....................... 0.91% 0.94% 0.94% 0.92%
Ratio of net investment income to average
net assets ........................................ 4.70% 4.79% 5.01% 4.93%
Ratio of net investment income to average
net assets prior to expense limitation ............ 4.70% 4.77% 4.99% 4.93%
Portfolio turnover .................................. 4% 6% 21% 14%
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<CAPTION>
VOYAGEUR INSURED FUNDS, INC.
MINNESOTA INSURED FUND A CLASS
----------------------------------
YEAR ENDED
12/31/95 12/31/94 12/31/93
<S> <C> <C> <C>
Net asset value, beginning of period $9.610 $11.020 $10.270
Income from investment operations:
Net investment income ............................... 0.510 0.540 0.540
Net realized and unrealized gain (loss)
on investments .................................... 1.140 (1.390) 0.840
-------- -------- --------
Total from investment operations .................... 1.650 (0.850) 1.380
-------- -------- --------
Less dividends and distributions:
Dividends from net investment income ................ (0.530) (0.520) (0.540)
Distributions from net realized gain
on investments .................................... -- (0.040) (0.090)
-------- -------- --------
Total dividends and distributions ................... (0.530) (0.560) (0.630)
-------- -------- --------
Net asset value, end of period ......................... $10.730 $9.610 $11.020
======== ======== ========
Total Return(2) ........................................ 17.52% (7.88%) 13.80%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............. $307,734 $284,132 $311,187
Ratio of expenses to average net assets ............. 0.87% 0.61% 0.70%
Ratio of expenses to average net assets
prior to expense limitation ....................... 0.92% 0.94% 1.02%
Ratio of net investment income to average
net assets ........................................ 4.92% 5.29% 4.93%
Ratio of net investment income to average
net assets prior to expense limitation ............ 4.87% 4.96% 4.61%
Portfolio turnover .................................. 54% 25% 18%
</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 INSURED FUNDS, INC.
MINNESOTA INSURED FUND B CLASS
---------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD FROM
ENDED ENDED YEAR ENDED 3/7/95(4)
2/28/99(1) 8/31/98(1) 12/31/97(3) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............................ $11.040 $10.930 $10.580 $10.720 $10.140
Income from investment operations:
Net investment income ........................................ 0.221 0.294 0.454 0.450 0.380
Net realized and unrealized gain (loss) on investments ....... (0.060) 0.111 0.348 (0.140) 0.580
------- ------- ------- ------- -------
Total from investment operations ............................. 0.161 0.405 0.802 0.310 0.960
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ......................... (0.221) (0.295) (0.452) (0.450) (0.380)
------- ------- ------- ------- -------
Total dividends and distributions ............................ (0.221) (0.295) (0.452) (0.450) (0.380)
------- ------- ------- ------- -------
Net asset value, end of period .................................. $10.980 $11.040 $10.930 $10.580 $10.720
======= ======= ======= ======= =======
Total Return(2) ................................................. 1.43% 3.76% 7.77% 3.03% 9.59%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ...................... $11,648 $10,374 $8,926 $6,817 $4,655
Ratio of expenses to average net assets ...................... 1.66% 1.67% 1.67% 1.56% 1.34%(5)
Ratio of expenses to average net assets prior to
expense limitation ......................................... 1.66% 1.69% 1.69% 1.68% 1.64%(5)
Ratio of net investment income to average net assets ......... 3.95% 4.04% 4.26% 4.29% 4.15%(5)
Ratio of net investment income to average net assets
prior to expense limitation ................................ 3.95% 4.02% 4.24% 4.17% 3.85%(5)
Portfolio turnover ........................................... 4% 6% 21% 14% 54%
</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 C CLASS
---------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD FROM
ENDED ENDED YEAR ENDED 5/4/94(4)
2/28/99(1) 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95 TO 12/31/94
(UNAUDITED)
<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 from investment operations:
Net investment income ............................. 0.221 0.295 0.454 0.440 0.430 0.300
Net realized and unrealized gain (loss)
on investments .................................. (0.050) 0.110 0.338 (0.130) 1.140 (0.620)
------- ------- ------- ------- ------- -------
Total from investment operations .................. 0.171 0.405 0.792 0.310 1.570 (0.320)
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .............. (0.221) (0.295) (0.452) (0.440) (0.450) (0.280)
Distributions from net realized gain
on investments .................................. -- -- -- -- -- (0.020)
------- ------- ------- ------- ------- -------
Total dividends and distributions ................. (0.221) (0.295) (0.452) (0.440) (0.450) (0.300)
------- ------- ------- ------- ------- -------
Net asset value, end of period ....................... $11.000 $11.050 $10.940 $10.600 $10.730 $9.610
======= ======= ======= ======= ======= =======
Total Return(2) ...................................... 1.52% 3.76% 7.66% 2.98% 16.63% (3.14%)
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ................................... $3,935 $3,207 $3,096 $3,126 $3,166 $1,525
Ratio of expenses to average net assets ........... 1.66% 1.67% 1.67% 1.68% 1.66% 1.36%(5)
Ratio of expenses to average net assets
prior to expense limitation ..................... 1.66% 1.69% 1.69% 1.68% 1.67% 1.68%(5)
Ratio of net investment income to
average net assets .............................. 3.95% 4.04% 4.26% 4.18% 4.11% 4.68%(5)
Ratio of net investment income to
average net assets prior to
expense limitation .............................. 3.95% 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>
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 INTERMEDIATE TAX-FREE FUNDS, INC.
TAX-FREE MINNESOTA INTERMEDIATE FUND A CLASS
-----------------------------------------------
SIX MONTHS EIGHT MONTHS
ENDED ENDED
2/28/99(1) 8/31/98(1) 12/31/97(3) 12/31/96
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $11.160 $11.170 $10.990 $11.140
Income from investment operations:
Net investment income .................................. 0.272 0.363 0.535 0.510
Net realized and unrealized gain (loss)
on investments ....................................... (0.101) (0.009) 0.180 (0.150)
------- ------- ------- -------
Total from investment operations ....................... 0.171 0.354 0.715 0.360
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................... (0.271) (0.364) (0.535) (0.510)
Distributions from net realized gain
on investments ....................................... -- -- -- --
------- ------- ------- -------
Total dividends and distributions ...................... (0.271) (0.364) (0.535) (0.510)
------- ------- ------- -------
Net asset value, end of period ............................ $11.060 $11.160 $11.170 $10.990
======= ======= ======= =======
Total Return(2) ........................................... 1.54% 3.22% 6.69% 3.46%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $59,771 $54,281 $57,524 $66,024
Ratio of expenses to average net assets ................ 0.75% 0.80% 0.91% 0.89%
Ratio of expenses to average net assets
prior to expense limitation .......................... 0.75% 0.80% 0.95% 0.89%
Ratio of net investment income to
average net assets ................................... 4.91% 4.90% 4.86% 4.69%
Ratio of net investment income to average
net assets prior to expense limitation ............... 4.91% 4.90% 4.82% 4.69%
Portfolio turnover ..................................... 15% 14% 21% 28%
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<CAPTION>
VOYAGEUR INTERMEDIATE TAX-FREE FUNDS, INC.
TAX-FREE MINNESOTA INTERMEDIATE FUND A CLASS
--------------------------------------------
YEAR ENDED
12/31/95 12/31/94 12/31/93
<S> <C> <C> <C>
Net asset value, beginning of period ...................... $10.500 $11.160 $10.830
Income from investment operations:
Net investment income .................................. 0.510 0.450 0.470
Net realized and unrealized gain (loss)
on investments ....................................... 0.640 (0.660) 0.370
------- ------- -------
Total from investment operations ....................... 1.150 (0.210) 0.840
------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................... (0.510) (0.450) (0.470)
Distributions from net realized gain
on investments ....................................... -- -- (0.040)
------- ------- -------
Total dividends and distributions ...................... (0.510) (0.450) (0.510)
------- ------- -------
Net asset value, end of period ............................ $11.140 $10.500 $11.160
======= ======= =======
Total Return(2) ........................................... 11.00% (1.91%) 7.88%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $72,405 $84,168 $75,374
Ratio of expenses to average net assets ................ 0.91% 0.92% 0.99%
Ratio of expenses to average net assets
prior to expense limitation .......................... 0.91% 0.92% 0.99%
Ratio of net investment income to
average net assets ................................... 4.61% 4.18% 4.18%
Ratio of net investment income to average
net assets prior to expense limitation ............... 4.61% 4.18% 4.18%
Portfolio turnover ..................................... 40% 42% 19%
</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>
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 B CLASS
--------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD FROM
ENDED ENDED YEAR ENDED 8/15/95(4)
2/28/99(1) 8/31/98(1) 12/31/97(3) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......................... $11.180 $11.170 $10.990 $11.140 $10.950
Income from investment operations:
Net investment income ...................................... 0.227 0.301 0.437 0.440 0.170
Net realized and unrealized gain (loss)
on investments ........................................... (0.103) 0.009 0.190 (0.150) 0.190
------- ------- ------- ------- -------
Total from investment operations ........................... 0.124 0.310 0.627 0.290 0.360
------- ------- ------- ------- -------
Less dividends:
Dividends from net investment income ....................... (0.224) (0.300) (0.447) (0.440) (0.170)
------- ------- ------- ------- -------
Total dividends ............................................ (0.224) (0.300) (0.447) (0.440) (0.170)
------- ------- ------- ------- -------
Net asset value, end of period ................................ $11.080 $11.180 $11.170 $10.990 $11.140
======= ======= ======= ======= =======
Total Return(2) ............................................... 1.12% 2.82% 5.84% 2.74% 3.26%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................... $2,166 $1,375 $910 $408 $27
Ratio of expenses to average net assets .................... 1.60% 1.65% 1.81% 1.56% 1.30%(5)
Ratio of expenses to average net assets prior to
expense limitation ....................................... 1.60% 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 .............................. 4.06% 4.05% 3.92% 3.93% 3.68%(5)
Portfolio turnover ......................................... 15% 14% 21% 28% 40%
</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 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 C CLASS
---------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS PERIOD FROM
ENDED ENDED YEAR ENDED 5/4/94(4)
2/28/99(1) 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95 TO 12/31/94
(UNAUDITED)
<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 from investment operations:
Net investment income ............................ 0.226 0.301 0.440 0.430 0.420 0.240
Net realized and unrealized gain
(loss) on investments .......................... (0.102) (0.001) 0.187 (0.140) 0.630 (0.240)
------- ------- ------- ------- ------- -------
Total from investment operations ................. 0.124 0.300 0.627 0.290 1.050 --
------- ------- ------- ------- ------- -------
Less dividends:
Dividends from net investment income ............. (0.224) (0.300) (0.447) (0.430) (0.420) (0.240)
------- ------- ------- ------- ------- -------
Total dividends .................................. (0.224) (0.300) (0.447) (0.430) (0.420) (0.240)
------- ------- ------- ------- ------- -------
Net asset value, end of period ...................... $11.070 $11.170 $11.170 $10.990 $11.130 $10.500
======= ======= ======= ======= ======= =======
Total Return(2) ..................................... 1.11% 2.73% 5.84% 2.69% 10.18% (0.03%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......... $2,087 $1,601 $1,512 $1,137 $694 $341
Ratio of expenses to average net assets .......... 1.60% 1.65% 1.77% 1.64% 1.63% 1.71%(5)
Ratio of expenses to average net
assets prior to expense limitation ............. 1.60% 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 .................... 4.06% 4.05% 3.96% 3.94% 3.82% 3.35%(5)
Portfolio turnover ............................... 15% 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
------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR PERIOD FROM
ENDED ENDED ENDED 6/4/96(4)
2/28/99(1) 8/31/98(1) 12/31/97(3) TO 12/31/96
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period ................... $10.810 $10.650 $10.180 $10.000
Income from investment operations:
Net investment income ............................... 0.290 0.392 0.643 0.350
Net realized and unrealized gain (loss)
on investments ..................................... (0.089) 0.170 0.463 0.180
------- ------- ------- -------
Total from investment operations .................... 0.201 0.562 1.106 0.530
------- ------- ------- -------
Less dividends:
Dividends from net investment income ................ (0.291) (0.402) (0.636) (0.350)
------- ------- ------- -------
Total dividends: .................................... (0.291) (0.402) (0.636) (0.350)
------- ------- ------- -------
Net asset value, end of period ......................... $10.720 $10.810 $10.650 $10.180
======= ======= ======= =======
Total Return(2) ........................................ 1.88% 5.37% 11.26% 5.40%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............. $39,566 $33,296 $19,017 $6,068
Ratio of expenses to average net assets ............. 0.55% 0.40% 0.09% 0.24%(5)
Ratio of expenses to average net assets
prior to expense limitation ....................... 0.99% 1.20% 1.24% 1.25%(5)
Ratio of net investment income to average
net assets ........................................ 5.41% 5.50% 6.16% 5.78%(5)
Ratio of net investment income to average
net assets prior to expense limitation ............ 4.97% 4.70% 5.01% 4.77%(5)
Portfolio turnover .................................. 63% 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
-------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR PERIOD FROM
ENDED ENDED ENDED 6/12/96(4)
2/28/99(1) 8/31/98(1) 12/31/97(3) TO 12/31/96
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................... $10.810 $10.660 $10.190 $9.780
Income from investment operations:
Net investment income ................................ 0.253 0.343 0.557 0.290
Net realized and unrealized gain
(loss) on investments .............................. (0.091) 0.159 0.470 0.410
------- ------- ------- -------
Total from investment operations ..................... 0.162 0.502 1.027 0.700
------- ------- ------- -------
Less dividends:
Dividends from net
investment income .................................. (0.252) (0.352) (0.557) (0.290)
------- ------- ------- -------
Total dividends: ..................................... (0.252) (0.352) (0.557) (0.290)
------- ------- ------- -------
Net asset value, end of period .......................... $10.720 $10.810 $10.660 $10.190
======= ======= ======= =======
Total Return(2) ......................................... 1.52% 4.77% 10.41% 7.29%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ...................................... $15,013 $13,351 $8,201 $2,738
Ratio of expenses to average
net assets ......................................... 1.30% 1.15% 0.85% 0.95%(5)
Ratio of expenses to average net
assets prior to expense
limitation ......................................... 1.74% 1.95% 2.00% 2.00%(5)
Ratio of net investment income to
average net assets ................................. 4.66% 4.75% 5.40% 5.14%(5)
Ratio of net investment income to
average net assets prior
to expense limitation .............................. 4.22% 3.95% 4.25% 4.09%(5)
Portfolio turnover ................................... 63% 7% 23% 15%
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
MINNESOTA HIGH YIELD MUNICIPAL BOND FUND C CLASS
------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR PERIOD FROM
ENDED ENDED ENDED 6/7/96(4)
2/28/99(1) 8/31/98(1) 12/31/97(3) TO 12/31/96
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................... $10.810 $10.650 $10.180 $9.990
Income from investment operations:
Net investment income ................................ 0.251 0.340 0.572 0.300
Net realized and unrealized gain
(loss) on investments .............................. (0.089) 0.170 0.455 0.190
------- ------- ------- -------
Total from investment operations ..................... 0.162 0.510 1.027 0.490
------- ------- ------- -------
Less dividends:
Dividends from net
investment income .................................. (0.252) (0.350) (0.557) (0.300)
------- ------- ------- -------
Total dividends: ..................................... (0.252) (0.350) (0.557) (0.300)
------- ------- ------- -------
Net asset value, end of period .......................... $10.720 $10.810 $10.650 $10.180
======= ======= ======= =======
Total Return(2) ......................................... 1.52% 4.87% 10.41% 5.02%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ...................................... $6,301 $5,165 $3,178 $900
Ratio of expenses to average
net assets ......................................... 1.30% 1.15% 0.83% 0.99%(5)
Ratio of expenses to average net
assets prior to expense
limitation ......................................... 1.74% 1.95% 1.98% 2.00%(5)
Ratio of net investment income to
average net assets ................................. 4.66% 4.75% 5.42% 4.90%(5)
Ratio of net investment income to
average net assets prior
to expense limitation .............................. 4.22% 3.95% 4.27% 3.89%(5)
Portfolio turnover ................................... 63% 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
DELAWARE GROUP MINNESOTA MUNICIPAL BOND FUNDS, INC. -
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
Delaware-Voyageur Tax-Free Minnesota Fund ("Tax-Free Minnesota Fund"), a series
of the Voyageur Tax Free Funds, Inc., Delaware-Voyageur Minnesota Insured Fund
("Minnesota Insured Fund"), a series of the Voyageur Insured Funds, Inc.,
Delaware-Voyageur Tax-Free Minnesota Intermediate Fund ("Tax-Free Minnesota
Intermediate Fund"), a series of the Voyageur Intermediate Tax Free Funds, Inc.,
and Delaware-Voyageur Minnesota High Yield Municipal Bond Fund ("Minnesota High
Yield Municipal Bond Fund"), a series of the Delaware-Voyageur Mutual Funds,
Inc., (each referred to as a "Fund" or collectively as the "Funds") are
registered under the Investment Company Act of 1940 (as amended) as open-end
management investment companies. The Tax-Free Minnesota Fund, Minnesota Insured
Fund, and Tax-Free Minnesota Intermediate Fund are registered as diversified
funds. The Minnesota High Yield Municipal Bond Fund is registered as a
non-diversified fund.
The Tax-Free Minnesota Fund seeks high current income free from both federal and
state income taxes by investing in investment grade municipal bonds. 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. The Funds each offer 3 classes of shares.
1. Fund Reorganization
On April 30, 1997, Lincoln National Corporation ("LNC") acquired Voyageur Fund
Managers Inc.'s ("Voyageur") parent, Dougherty Financial Group, Inc. ("DFG")
pursuant to an agreement and plan of merger dated January 15, 1997, in which LNC
acquired DFG including the mutual fund investment advisory business of DFG
conducted by Voyageur. Upon completion of the acquisition, Delaware Management
Company ("DMC") became the investment adviser to the Funds, Delaware
Distributors, L.P. ("DDLP") became the distributor for the Funds, Delaware
Service Company, Inc. ("DSC") became the transfer, dividend-disbursing,
shareholder servicing and accounting and administration agent for the Funds.
DMC, DDLP and DSC assumed these services under substantially similar fee
structures that were in effect prior to the acquisition.
2. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
<PAGE>
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.
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.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
3. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Fund
pays DMC the Investment Manager of each Fund, an annual fee, which is calculated
daily on the net assets of each Fund.
DMC has elected to waive its fees and reimburse each Fund to the extent that
annual operating expenses exclusive of taxes, interest, brokerage commissions,
distribution expenses and extraordinary expenses do not exceed the following
percentages of average daily net assets through June 30, 1999.
<PAGE>
for tax-exempt income 39
NOTES TO FINANCIAL STATMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. Investment Management and Other Transactions with Affiliates (Continued)
<TABLE>
<CAPTION>
TAX-FREE MINNESOTA TAX-FREE MINNESOTA MINNESOTA HIGH YIELD
MINNESOTA FUND INSURED FUND INTERMEDIATE FUND MUNICIPAL BOND FUND
-------------- ------------ ------------------ --------------------
<S> <C> <C> <C> <C>
Management fee as a percentage of average daily
net assets (per annum) ................................ 0.50% 0.50% 0.40% 0.65%
Operating expense limitation as a percentage of average
daily net assets (per annum) ............................. 0.75% 0.75% 0.75% 0.25%
</TABLE>
The Funds have engaged DSC, an affiliate of DMC, to provide dividend disbursing,
transfer agent and accounting services. Each Fund pays DSC a monthly fee based
on number of shareholder accounts, shareholder transactions and average net
assets, subject to certain minimums.
On February 28, 1999, the Funds had payables to affiliates as follows:
<TABLE>
<CAPTION>
TAX-FREE MINNESOTA TAX-FREE MINNESOTA MINNESOTA HIGH YIELD
MINNESOTA FUND INSURED FUND INTERMEDIATE FUND MUNICIPAL BOND FUND
-------------- ------------ ------------------ --------------------
<S> <C> <C> <C> <C>
Investment Management fees payable to DMC ................ $14,236 $119,554 $18,488 $0
Dividend disbursing, transfer agent fees, accounting
fees and other expenses payable to DSC ................. $40,375 $27,080 $5,929 $5,753
Other expenses payable to DMC and affiliates ............. $13,059 $9,633 $1,292 $1,872
</TABLE>
Pursuant to the Distribution Agreement, the Funds pay DDLP, the Distributor and
an affiliate of DMC, an annual fee not to exceed 0.25% of the average daily net
assets of the A Class 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 six months ended February 28, 1999, DDLP earned commissions on sales of
the Fund A Class shares for each Fund as follows:
<TABLE>
<CAPTION>
TAX-FREE MINNESOTA TAX-FREE MINNESOTA MINNESOTA HIGH YIELD
MINNESOTA FUND INSURED FUND INTERMEDIATE FUND MUNICIPAL BOND FUND
-------------- ------------ ------------------ --------------------
<S> <C> <C> <C> <C>
$40,980 $31,523 $3,647 $24,989
</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.
<PAGE>
4. Investments
During the six months ended February 28, 1999 the Funds made purchases and sales
of investment securities other than U.S. government securities and temporary
cash investments for each Fund as follows:
<TABLE>
<CAPTION>
TAX-FREE MINNESOTA TAX-FREE MINNESOTA MINNESOTA HIGH YIELD
MINNESOTA FUND INSURED FUND INTERMEDIATE FUND MUNICIPAL BOND FUND
-------------- ------------ ------------------ --------------------
<S> <C> <C> <C> <C>
Purchases: ............................................... $58,239,055 $6,163,897 $12,340,865 $24,586,117
Sales: ................................................... $58,917,766 $11,580,817 $4,623,360 $17,917,316
</TABLE>
At February 28, 1999 the aggregate cost of securities and unrealized
appreciation (depreciation) for federal income tax purposes for each Fund were
as follows:
<TABLE>
<CAPTION>
TAX-FREE MINNESOTA TAX-FREE MINNESOTA MINNESOTA HIGH YIELD
MINNESOTA FUND INSURED FUND INTERMEDIATE FUND MUNICIPAL BOND FUND
-------------- ------------ ------------------ --------------------
<S> <C> <C> <C> <C>
Cost of Investments ...................................... $397,961,274 $273,989,185 $63,173,231 $58,154,774
Aggregate unrealized appreciation ........................ $34,823,507 $23,531,253 $2,217,817 $1,563,960
Aggregate unrealized depreciation ........................ $172,119 $5,670 $153,869 $136,466
Net unrealized appreciation .............................. $34,651,388 $23,525,583 $2,063,948 $1,427,494
</TABLE>
For federal income tax purposes, as of August 31, 1998, Minnesota Insured Fund
had a capital loss carryover of $6,050,123 that will expire in 2003 through
2004, Tax Free Minnesota Intermediate Fund had a capital loss carryover of
$47,382 that will expire in 2004, and Minnesota High Yield Municipal Bond Fund
had a capital loss carryover of $11,143 that will expire from 2004 through 2005.
<PAGE>
40 for tax-exempt income
NOTES TO FINANCIAL STATMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. Capital Stock
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC. VOYAGEUR INSURED FUNDS, INC.
TAX-FREE MINNESOTA FUND MINNESOTA INSURED FUND
--------------------------------- ------------------------------------
SIX MONTHS EIGHT MONTHS YEAR SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97 2/28/99 8/31/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Shares Sold:
A Class ......................................... 1,279,802 1,291,014 2,445,000 1,023,503 787,164 1,511,145
B Class ......................................... 165,557 165,933 230,517 152,099 157,408 262,553
C Class ......................................... 147,787 171,958 99,577 82,413 27,674 68,641
Shares issued upon reinvestment of dividends from
net investment income and net realized gains
on investment transactions:
A Class ......................................... 586,513 742,960 1,191,155 407,783 557,163 983,624
B Class ......................................... 14,278 15,705 21,253 13,111 16,002 23,426
C Class ......................................... 8,200 7,877 8,668 4,982 5,937 10,782
--------- --------- --------- --------- --------- ---------
2,202,137 2,395,447 3,996,170 1,683,891 1,551,348 2,860,171
--------- --------- --------- --------- --------- ---------
Shares repurchased:
A Class ......................................... (1,350,876) (2,413,567) (5,840,279) (1,152,510) (2,096,352) (4,894,549)
B Class ......................................... (49,672) (31,308) (118,151) (44,540) (50,332) (113,408)
C Class ......................................... (26,581) (41,574) (118,065) (19,758) (26,316) (91,495)
--------- --------- --------- --------- --------- ---------
(1,427,129) (2,486,449) (6,076,495) (1,216,808) (2,173,000) (5,099,452)
--------- --------- --------- --------- --------- ---------
Net Increase (Decrease) ............................ 775,008 (91,002) (2,080,325) 467,083 (621,652) (2,239,281)
========= ========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR TAX-FREE FUNDS, INC. VOYAGEUR INSURED FUNDS, INC.
TAX-FREE MINNESOTA FUND MINNESOTA INSURED FUND
--------------------------------- ------------------------------------
SIX MONTHS EIGHT MONTHS YEAR SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97 2/28/99 8/31/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Shares Sold:
A Class ......................................... 739,514 347,131 642,232 738,063 1,474,592 1,228,700
B Class ......................................... 75,240 63,007 60,795 206,739 502,630 531,417
C Class ......................................... 50,544 57,860 73,831 117,296 216,871 240,090
Shares issued upon reinvestment of dividends from
net investment income and net realized gains on
investment transactions:
A Class ......................................... 94,228 123,589 198,390 51,136 54,225 48,680
B Class ......................................... 2,087 2,221 2,115 18,321 18,875 15,493
C Class ......................................... 2,877 3,443 4,721 8,625 9,250 8,637
--------- --------- --------- --------- --------- ---------
964,490 597,251 982,084 1,140,180 2,276,443 2,073,017
--------- --------- --------- --------- --------- ---------
Shares repurchased:
A Class ......................................... (294,301) (760,113) (1,698,909) (179,201) (233,795) (87,722)
B Class ......................................... (4,901) (23,623) (18,600) (59,791) (56,459) (46,061)
C Class ......................................... (8,178) (53,354) (46,700) (16,060) (46,620) (38,834)
--------- --------- --------- --------- --------- ---------
(307,380) (837,090) (1,764,209) (255,052) (336,874) (172,617)
--------- --------- --------- --------- --------- ---------
Net Increase (Decrease) ............................ 657,110 (239,839) (782,125) 885,128 1,939,569 1,900,400
========= ========= ========= ========= ========= =========
</TABLE>
<PAGE>
6. 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 amount was outstanding at February 28, 1999, or at any time during the fiscal
year.
7. Credit and Market Risk
The Funds concentrate their investments in securities issued by municipalities,
mainly in Minnesota. The value of these investments may be adversely affected by
new legislation within the states, regional or local economic conditions, and
differing levels of supply and demand for municipal bonds. Many municipalities
insure repayment for their obligations. Although bond insurance reduces the risk
of loss due to default by an issuer, such bonds remain subject to the risk that
market value may fluctuate for other reasons and there is no assurance that the
insurance company will meet its obligations. These securities have been
identified in the Statement of Net Assets.
<PAGE>
DELAWARE INVESTMENTS FAMILY OF FUNDS
FOR GROWTH OF CAPITAL
Aggressive Growth Fund
Trend Fund
DelCap Fund
Small Cap Value Fund
U.S. Growth Fund
Growth Stock Fund
Tax-Efficient Equity Fund
Social Awareness Fund
FOR TOTAL RETURN
Blue Chip Fund
Devon Fund
Growth and Income Fund
Decatur Equity Income Fund
REIT Fund
Delaware Balanced Fund
FOR INTERNATIONAL DIVERSIFICATION
Emerging Markets Fund
New Pacific Fund
Overseas Equity Fund
International Equity Fund
Global Equity Fund
Global Bond Fund
FOR CURRENT INCOME
Delchester Fund
High-Yield Opportunities Fund
Strategic Income Fund
Corporate Bond Fund
Extended Duration Bond Fund
U.S. Government Fund
US Government Securities Fund
Limited-Term Government Fund
FOR TAX-EXEMPT INCOME
National High Yield Municipal Bond Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
State Tax-Free Funds*
MONEY MARKET FUNDS
Delaware Cash Reserve
Tax-Free Money Fund
ASSET ALLOCATION FUNDS
Growth Portfolio
Balanced Portfolio
Income Portfolio
* Available for the following states: Arizona, California, Colorado, Florida,
Idaho, Iowa, Kansas, Minnesota, Missouri, North Dakota, New Jersey, New
Mexico, New York, Ohio, Oregon, Pennsylvania, Utah, Washington, Wisconsin.
Insured and intermediate bond funds are available in selected states.
funds
[photo of computer keyboard]
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.
<PAGE>
THIS SEMI-ANNUAL REPORT IS FOR THE INFORMATION OF MINNESOTA MUNICIPAL BOND FUNDS
SHAREHOLDERS, BUT IT MAY BE USED with prospective investors when preceded or
accompanied by a current Minnesota Municipal Bond Funds Prospectus and the
Delaware Investments Performance Update for the most recently completed calendar
quarter. The prospectus sets forth details about charges, expenses, investment
objectives and operating policies of each Fund. You should read the prospectus
carefully before you invest or send money. Summary investment results are
documented in each Fund's current Statement of Additional Information. The
figures in this report represent past results which are not a guarantee of
future results. The return and principal value of an investment in each Fund
will fluctuate so that shares, when redeemed, may be worth more or less than
their original cost.
INVESTMENT MANAGER
Delaware Management Company
Philadelphia, Pennsylvania
INTERNATIONAL AFFILIATE
Delaware International Advisers Ltd.
London, England
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia, Pennsylvania
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia, Pennsylvania
1818 Market Street
Philadelphia, PA 19103-3682
[photo of globes]
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawarefunds.com
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Funds are
not FDIC or NCUSIF insured, are not guaranteed by any bank or any credit union,
and involve investment risk, including the possible loss of the principal amount
invested. Shares of the Funds are not bank or credit union deposits.
(C) Delaware Distributors, L.P.
DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London
Printed in the USA
on recycled paper
SA-MNALL[2/99] PP4/99
(1622)
