<PAGE>
DELAWARE(SM)
INVESTMENTS
-----------
Delaware Tax-Free Idaho Fund
Delaware Tax-Free Iowa Fund
Delaware Tax-Free Kansas Fund
Delaware Tax-Free Missouri Insured Fund
Delaware Montana Municipal Bond Fund
Delaware Tax-Free North Dakota Fund
Delaware Tax-Free Oregon Insured Fund
Delaware Tax-Free Wisconsin Fund
Tax-Exempt Income
2000 ANNUAL REPORT
(Tax-Exempt Income Artwork)
<PAGE>
TABLE OF CONTENTS
-----------------
Letter to Shareholders 1
Portfolio
Management Review 4
Performance Summary
Delaware Tax-Free
Idaho Fund 9
Delaware Tax-Free
Iowa Fund 10
Delaware Tax-Free
Kansas Fund 11
Delaware Tax-Free
Missouri Insured Fund 12
Delaware Montana
Municipal Bond Fund 13
Delaware Tax-Free
North Dakota Fund 14
Delaware Tax-Free
Oregon Insured Fund 15
Delaware Tax-Free
Wisconsin Fund 16
Financial Statements
Statements
of Net Assets 17
Statements of Operations 34
Statements of Changes
in Net Assets 35
Financial Highlights 37
Notes to Financial
Statements 59
<PAGE>
A TRADITION OF SOUND INVESTING SINCE 1929
-----------------------------------------
A Commitment To Our Investors
Experienced
[ ] Our seasoned investment professionals average more than 15 years'
experience.
[ ] We began managing investments in 1929 and opened our first mutual fund in
1938. Over the past 70 years, we have weathered a full range of economic
and market environments.
Disciplined
[ ] We follow strict investment policies and clear buy/sell guidelines.
[ ] We strive to balance risk and reward in order to provide sound investment
alternatives within any given asset class.
Consistent
[ ] We clearly articulate our investment policies and follow them consistently.
[ ] Our commitment to consistency has earned us the confidence of
discriminating institutional and individual investors to manage more than
$44 billion in assets as of September 30, 2000.
Comprehensive
[ ] We offer more than 70 mutual funds in these asset classes.
o Large-cap equity o High-yield bonds
o Mid-cap equity o Investment grade bonds
o Small-cap equity o Municipal bonds (23 single-state funds)
o International equity o International fixed-income
o Balanced
[ ] Our funds are available through financial advisers who can offer you
individualized attention and valuable investment advice.
Funds are not FDIC insured and are not guaranteed. It is possible to lose the
principal amount invested.
(C)Delaware Distributors, L.P.
<PAGE>
"WE BELIEVE RISING
TREASURY PRICES LEFT
MUNICIPAL BONDS IN
A POSITION OF
RELATIVE VALUE."
Dear Shareholder
October 9, 2000
Recap of Events - Throughout most of the Funds' fiscal year ended August 31,
2000, the Federal Reserve Board focused on tightening the U.S. money supply,
conducting a prolonged series of interest rate hikes. A strong U.S. economy and
threatening inflation prompted the Fed to bump up short-term interest rates four
times during the period, with the last increase coming on May 16, 2000.
During the fall of 1999, many bond buyers seemed to be ignoring municipal bonds
in favor of the higher-yielding corporate bonds that were flooding the market.
That scenario changed later in our fiscal year when interest rate hikes in
February and March, coupled with the U.S. Treasury buyback and turmoil in the
U.S. stock market in April, led to a marked increase in demand for the safety of
U.S. Treasury securities. We believe rising Treasury prices left municipal bonds
in a position of relative value. Investors began to recognize this value as
Treasury yields dropped and AAA-rated municipal bond yields exceeded 6% in March
(Source: Bloomberg). Since then, we have generally seen demand for municipal
bonds on the upswing.*
Increased tax revenue resulting from the strong economy and higher borrowing
costs resulting from rising interest rates caused many state and local
governments to reduce the number of municipal bonds they issued during our
fiscal year. This caused demand to exceed supply as we ended our year (Source:
Moody's Investors Service Inc.).
Total Return
For Period Ended August 31, 2000 One Year
--------------------------------------------------------------------------------
Delaware Tax-Free Idaho Fund Class A +3.25%
--------------------------------------------------------------------------------
Delaware Tax-Free Iowa Fund Class A +5.35%
--------------------------------------------------------------------------------
Delaware Montana Municipal Bond Fund Class A +6.10%**
--------------------------------------------------------------------------------
Delaware Tax-Free North Dakota Fund Class A +3.58%
--------------------------------------------------------------------------------
Delaware Tax-Free Wisconsin Fund Class A +4.62%
--------------------------------------------------------------------------------
Lipper Other States Municipal Debt Funds Average (77 funds) +4.54%
--------------------------------------------------------------------------------
Delaware Tax-Free Kansas Fund Class A +4.14%
--------------------------------------------------------------------------------
Lipper Kansas Municipal Debt Funds Average (13 funds) +4.44%
--------------------------------------------------------------------------------
Delaware Tax-Free Missouri Insured Fund Class A +4.99%
--------------------------------------------------------------------------------
Lipper Missouri Municipal Debt Funds Average (20 funds) +4.91%
--------------------------------------------------------------------------------
Delaware Tax-Free Oregon Insured Fund Class A +6.04%
--------------------------------------------------------------------------------
Lipper Oregon Municipal Debt Funds Average (25 funds) +5.20%
--------------------------------------------------------------------------------
Lehman Brothers Municipal Bond Index +6.77%
Lehman Brothers Insured Municipal Bond Index +7.40%
--------------------------------------------------------------------------------
All performance shown above is at net asset value without the effect of sales
charges and assumes reinvestment of dividends and capital gains. Performance for
all Fund classes can be found on pages 9 through 16. The Lipper categories
represent the average returns of municipal bond funds with similar investment
objectives tracked by Lipper (Source: Lipper, Inc.). The unmanaged Lehman
Brothers Indexes are composed of bonds with a variety of quality ratings from
many states. You cannot invest directly in an index. Past performance does not
guarantee future results.
*The U.S. Government does not guarantee principal and interest of municipal
bonds, unlike Treasuries.
**Since Fund's inception on November 2, 1999.
1
<PAGE>
"WE ARE ENCOURAGED BY
THE CURRENT MARKET
ENVIRONMENT."
The flip-flop between supply and demand in the municipal markets happened
gradually throughout 2000. The Fed's latest interest rate hike in May supported
that trend. By the end of our fiscal year, demand for municipal bonds remained
high while municipal bond issuance for 2000 declined by about 19%, a reduction
of about $33 billion from the same period one year prior (Source: Thomson
Financial).
Long-term interest rates began to decline during the summer months, with the
30-year mortgage rate at 7.64% on August 31, 2000, about three quarters of a
percentage point off its spring 2000 high for the year. The average yield on
30-year AAA-rated municipal bonds, which rarely is more than the yield for the
30-year Treasury bond, stood at 5.68% on August 31, 2000. By comparison, the
30-year Treasury bond was yielding 5.66% and two-year Treasury notes 6.16% on
August 31, 2000 (Source: Bloomberg).* For municipal bond tax-equivalent yields,
see the chart on page 8.
Delaware's Municipal Bond Funds for Idaho, Iowa, Kansas, Missouri, Montana,
North Dakota, Oregon, and Wisconsin struggled during the first half of the
fiscal year, but then rode the municipal market rally to solid overall returns
as of August 31, 2000.
The Funds' portfolios are managed with a long-term perspective. Therefore,
relatively few significant changes were made to the Funds during the fiscal
year. This long-term investment approach can minimize trading costs and limit
capital gains. As a result, investors may get to keep more of what they earn.
While there was a relatively small supply of bonds in some states, the scant
supply of new bonds often helped improve the value of the bonds we held.
*The U.S. Government does not guarantee principal and interest of municipal
bonds, unlike Treasuries.
(Tax-Exempt Income Artwork)
2
<PAGE>
Market Outlook - We are encouraged by the current market environment. As of this
writing, the predominant opinion on Wall Street is that the Fed is firmly in a
holding pattern with regard to its actions on interest rates. Evident slowing in
the U.S. economy, which has prompted the Fed to leave rates untouched at its
last three meetings, could eventually lead to lesser revenues for states and
municipalities. In our opinion, this would likely lead to a general increase in
the issuance of municipal bonds.
We believe that municipal bonds will continue to play a role in well-diversified
portfolios. In addition, we believe that in an environment where interest rates
trend downward, investing in municipal bond funds could prove to be more
attractive to investors than buying individual bonds. In such an environment,
municipal bond funds, like Delaware's, are holding slightly older bonds -- many
of which were issued at more attractive rates than most new issues coming to
market.
Thank you for your continued confidence and your commitment to Delaware
Investments.
Sincerely,
/s/Wayne A. Stork /s/David K. Downes
Wayne A. Stork David K. Downes
Chairman, President and Chief Executive Officer,
Delaware Investments Family of Funds Delaware Investments Family of Funds
3
<PAGE>
Elizabeth H. Howell
Senior Portfolio Manager
October 9, 2000
Delaware Tax-Free Idaho Fund
Sector Allocation
As of August 31, 2000
Pre-Refunded 6.67%
General Obligation 4.34%
Industrial Development 3.14%
Higher Education 2.82%
Certificates
of Participation 2.07%
Miscellaneous 22.17%
[graphic omitted]
Housing 14.71%
Hospitals 21.97%
Pollution Control 22.11%
PORTFOLIO MANAGEMENT REVIEW
---------------------------
The Funds' Results
During the year ended August 31, 2000, we began to see strong performance in
municipal markets despite changing interest rates. While municipal bond fund
cash flows are negative year-to-date, July 2000 brought positive numbers that we
hope to see continue, with investors pouring a net $850 million dollars into
municipal bond funds (Source: Investment Company Institute).
The year was characterized by a continued diminishing of municipal bond supply,
as states, counties, and municipalities issued fewer bonds, likely due to strong
local economies and tax bases, as well as the dramatic decline in bond
refunding. Although healthcare bonds were weak during the period, bond issues
for public projects such as transportation and higher education often exhibited
strength. Credit upgrades for bonds were also substantial -- especially among
tax-backed bonds (Source: Moody's Investors Service).
State and local municipalities in the Midwest and Pacific Northwest continued to
enjoy fiscal prosperity during the year. We believe the credit quality of most
states in these two regions is relatively high, and we anticipate that the
credit ratings of the bonds we hold will generally remain solid. During July and
August, widespread forest fires affected many Northwestern states. Although the
clean-up and rebuilding that takes place afterwards will be costly, we think
that fire-related expenses will ultimately not affect local economies in a
profound way. These states had strong bases prior to the fires, and are likely
to receive a significant amount of federal aid afterward.
The fluctuating interest rate environment, meanwhile, dictated the need
throughout our fiscal year for managing portfolio duration -- a key statistic
that indicates a bond fund's sensitivity to interest rate movement.
Delaware Tax-Free Idaho Fund
Delaware Tax-Free Idaho Fund had a total return of +3.25% (for Class A shares at
net asset value with distributions reinvested) for the year ended August 31,
2000. The Fund did not perform as well as other funds in its peer group, the
Lipper Other States Municipal Debt Funds, which returned +4.54% for the same
period. We held a modest percentage of the Fund's assets in Industrial
Development Revenue bonds (IDRs). The Fund's performance was mildly hampered at
times by these holdings as prices for IDRs declined during the period, which
occurred in response to weakness in the corporate bond market in relation to
U.S. Treasuries. We continue to hold IDRs as we believe this is a temporary
situation.
While issuance of double tax-exempt bonds was generally sparse during the
period, we found supply to be adequate. The Fund was fully invested during the
period, and more than 20% of the bonds in the portfolio were non-rated.
Non-rated bonds are typically issued by small municipalities looking to avoid
the expense of obtaining a credit rating from a major agency like Moody's or
Standard & Poor's. We rigorously research non-rated bond issues before adding
them to the portfolio, and once the bonds are part of our portfolio we monitor
their credit quality on a regular basis.
We maintained duration in the mid-range, which is in line with our peers. We
generally held bonds with higher credit ratings than our peers, which helped the
Fund's performance.
Idaho was one of the states affected by forest fires during the summer. The
fires generated an increase in unemployment benefit payouts, and also affected
the state's tourism and recreation industry. Idaho ended fiscal 1999 with an
operating surplus, and its general fund revenues grew by 9.6%, which was larger
than expected (Source: Standard & Poor's). We believe that the cost of the fires
will have a relatively small effect on Idaho's overall economy. Because the
economic and financial condition of the state has improved in recent years, our
general outlook for Idaho is favorable.
4
<PAGE>
Delaware Tax-Free Iowa Fund
Sector Allocation
As of August 31, 2000
Transportation 8.55%
Power Authority 8.49%
Hospitals 3.08%
Higher Education 7.43%
Miscellaneous 27.85%
(graphic omitted)
Water & Sewer 11.42%
Industrial Development 16.21%
Pre-Refunded/Escrowed to Maturity 16.97%
Delaware Tax-Free Kansas Fund
Sector Allocation
As of August 31, 2000
Hospitals 9.84%
Housing 9.36%
Industrial Development 7.93%
Power Authority 6.29%
Miscellaneous 4.76%
Pre-Refunded 20.15%
(graphic omitted)
Water & Sewer 12.41%
Higher Education 14.51%
General Obligation 14.75%
Delaware Tax-Free Iowa Fund
Delaware Tax-Free Iowa Fund had a total return of +5.35% (for Class A shares at
net asset value with distributions reinvested) for the year ended August 31,
2000. We succeeded in preserving capital to a greater degree than the Fund's
peer group, which delivered a 4.54% return for the same period. The Fund seeks
to invest exclusively in bonds that are exempt from both federal and state
income tax. During the fiscal year, there were relatively few new issues of
double tax-exempt bonds in Iowa. Nevertheless, the Fund was fully invested.
During the year, we kept the Fund's duration at a point that we considered to be
modestly long. This approach benefited the Fund when long interest rates began
to decline in May 2000.
In addition, the Fund benefited from strong credit selection in a state that is
currently enjoying a sound economy. While Iowa continues to be largely dependent
on agriculture, its broad economy has become more diversified in recent years,
and the state has reaped the rewards of that diversity. Revenues generated by
the services and finances sectors, as well as the insurance and real estate
sectors, have contributed to Iowa's general fund balance. In the past fiscal
year, the state has also benefited from increased revenues derived from
legalized gambling.
Delaware Tax-Free Kansas Fund
Delaware Tax-Free Kansas Fund had a total return of +4.14% (for Class A shares
at net asset value with distributions reinvested) for the year ended August 31,
2000. The Fund's performance fell slightly below that of its peers, as measured
by the Lipper Kansas Municipal Debt Funds Average, which returned +4.44% for the
same period.
More than 30% of the portfolio was invested in BBB and non-rated bonds, and
these lower-rated investment grade issues helped increase the Fund's dividend,
but didn't rally as strong as AA and AAA high-grade bonds over the time period.
Kansas continues to benefit from a broad and diverse economy that continues to
provide growth in income and employment. Growth in services, trade, construction
and manufacturing has increased economic diversity in the state and has lessened
the state's dependence on the more cyclical agricultural sector.
5
<PAGE>
Delaware Tax-Free Missouri Insured Fund
Sector Allocation
As of August 31, 2000
Miscellaneous 12.57%
Industrial Development 2.15%
Water & Sewer 5.58%
General Obligation 5.16%
Utilities 4.72%
Power Authority 4.38%
Pre-Refunded/
Escrowed to Maturity 27.31%
(graphic omitted)
Housing 13.90%
Hospitals 24.23%
Delaware Montana Municipal Bond Fund
Sector Allocation
As of August 31, 2000
Pollution Control 9.75%
Transportation 6.49%
Miscellaneous 5.13%
Power Authority 3.99%
Housing 2.85%
Hospitals 2.82%
Higher Education 36.79%
(graphic omitted)
General Obligation 16.00%
Continuing Care/
Retirement 16.18%
<PAGE>
Delaware Tax-Free Missouri Insured Fund
Delaware Tax-Free Missouri Insured Fund had a total return of +4.99% (for Class
A shares at net asset value with distributions reinvested) for the year ended
August 31, 2000, outperforming other funds in its peer group, as measured by the
Lipper Missouri Municipal Debt Funds Average, which posted a +4.91% return for
the same period.
The Fund was invested exclusively in insured bonds rated AAA by Standard &
Poor's -- the highest credit rating available. About 27% of the Fund's holdings
were in pre-refunded bonds. Issuers often pre-refund their outstanding bonds
when interest rates decline in order to reduce their interest costs. As the year
progressed and long-term interest rates declined, some bonds in the portfolio
were pre-refunded. In most cases, we continue to hold bonds once they have been
pre-refunded. Pre-refunded bonds often help a Fund because:
[ ] Pre-refunded bonds are backed by investments in U.S. government bonds,
which are held in a separate escrow account.
[ ] The price and credit quality increases because the bond will be paid off at
the first call date.
[ ] In general, prices for these bonds are less sensitive to interest rate
fluctuations.
Rapid growth in many Missouri cities has led to increased housing and commercial
real estate development. Such growth has boosted property values and tax
revenues. We believe Missouri's municipalities should continue to benefit from
this positive development. In addition, with the recovery of the Asian markets,
the state's exports have rebounded from a slump over the past two years.
Delaware Montana Municipal Bond Fund
Delaware Montana Municipal Bond Fund had a total return of +6.10% (for Class A
shares at net asset value with distributions reinvested) since the Fund's
inception on November 2, 1999 through August 31, 2000. The Fund slightly
underperformed the average of its peers in the Lipper Other States Municipal
Debt Funds Average, which returned +6.38% for the same period. During the fiscal
year, the supply of bonds exempt from both federal and state income tax was very
sparse, but adequate for our needs, and the Fund was fully invested in
investment-grade issues.
It is estimated that the Montana wildfires will cost the state approximately $60
million in fire-related expenses, unemployment compensation and small business
loans (Source: Standard & Poor's). While the state expects to receive
considerable federal assistance with fire-related costs, a significant
contribution from the state's general fund will likely be necessary. Current
estimates indicate that the state will have to spend approximately $12 million,
or about 9.2% of its fiscal year-end 1999 general fund balance for fire-related
expenses. However, recent reports estimate that Montana's general fund balance
for fiscal year-end 2000 is encouraging, even surpassing earlier projections
(Source: Standard & Poor's). So far, the state has been able to absorb the fire
fighting expenses, and the fires have had no immediate effect on Montana's
credit rating, according to Standard & Poor's. Because the economic and
financial condition of the state has improved in recent years, our general
outlook for Montana is favorable.
6
<PAGE>
Delaware Tax-Free North Dakota Fund
Sector Allocation
As of August 31, 2000
Miscellaneous 8.89%
Higher Education 7.30%
Transportation 6.24%
Pre-Refunded 4.08%
Industrial
Development 2.15%
Hospitals 31.96%
(graphic omitted)
Power Authority 11.21%
Housing 28.17%
Delaware Tax-Free Oregon Insured Fund
Sector Allocation
As of August 31, 2000
Higher Education 13.83%
Certificates of Participation 5.32%
Transportation 4.70%
Power Authority 3.51%
Housing 3.50%
Hospitals 3.31%
Miscellaneous 1.69%
Pre-Refunded 25.02%
(graphic omitted)
Water & Sewer 14.91%
General Obligation 24.21%
Delaware Tax-Free North Dakota Fund
Delaware Tax-Free North Dakota Fund had a total return of +3.58% (for Class A
shares at net asset value with distributions reinvested) for the year ended
August 31, 2000. The Fund's return lagged that of the average fund in its peer
group, as measured by the Lipper Other States Municipal Debt Funds Average,
which returned +4.54% for the same period.
Despite its reliance on agriculture and oil production, North Dakota's economic
base has remained stable. With access to Canadian markets, North Dakota is a
regional distribution hub for surrounding states. Financial services growth has
benefited from the state's proximity to Minnesota, as Minnesota-based financial
services companies have frequently been relocating back-office operations to the
low tax environment of North Dakota.
Delaware Tax-Free Oregon Insured Fund
Delaware Tax-Free Oregon Insured Fund had a total return of +6.04% (for Class A
shares at net asset value with distributions reinvested) for the year ended
August 31, 2000. The Fund outperformed its peers in the Lipper Oregon Municipal
Debt Fund Average, which returned +5.20% for the same period.
The Fund was invested exclusively in insured bonds rated AAA by Standard &
Poor's. Much of the Fund's relatively strong performance can be attributed to
discount bonds that were purchased several years ago. As long-term interest
rates declined, prices on these bonds often rose significantly.
In recent years, Oregon has benefited from a growing economy, an expanding
population and a growing labor force. The state has moved away from its heavy
reliance on timber and agriculture, and now enjoys a broader mix of high
technology, service and international trade businesses. The state's current
economic forecast suggests that its economy may grow at a slightly greater rate
than that of the national economy in fiscal 2000 and 2001(Source: Standard &
Poor's).
7
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Delaware Tax-Free Wisconsin Fund
Sector Allocation
As of August 31, 2000
Lease/Certificates of Participation 16.24%
Industrial Development 15.31%
Power Authority 7.32%
Higher Education 2.44%
Housing 25.52%
(graphic omitted)
Pre-Refunded/
Escrowed to Maturity 16.32%
Miscellaneous 16.85%
Delaware Tax-Free Wisconsin Fund
Delaware Tax-Free Wisconsin Fund had a total return of +4.62% (for Class A
shares at net asset value with distributions reinvested) for the year ended
August 31, 2000. The Fund outperformed the average fund in its peer group, the
Lipper Other States Municipal Debt Funds Average, which posted +4.54% for the
same period. The Fund was fully invested in high-quality issues, which
contributed to the Fund's strong return.
While there are many municipal issuers in the state, relatively few issue double
tax-exempt bonds. Because supply was low during the period, we continued to
supplement the Fund's investments with double tax-exempt bonds issued by Puerto
Rico and the Virgin Islands. A trend of strong economic and employment growth
continued to benefit Wisconsin during the period. Wisconsin ranks second in the
nation, behind Michigan, in manufacturing jobs. However, most of Wisconsin's
employment growth has been in the service and trade sectors of the economy. Over
the next few years, economic growth is expected to be positive but is not
expected to outpace that of the nation (Source: Standard & Poor's).
Outlook
In the months ahead, we anticipate a positive environment for municipal bonds.
We think it is possible that the strong performance seen in the first half of
2000 could continue through the fall.
As always with municipal bonds, this depends largely on interest rate trends, as
well as supply and demand in the municipal markets. As of this writing,
long-term interest rates have been trending downward. And while the Federal
Reserve Board has promised to remain vigilant about keeping inflation under
control, many analysts and investors seem to agree that short-term rate
increases may be finished for this year.
We feel that a non-inflationary U.S. economy that has less-robust growth is
likely to boost the demand for capital funding. This would be a positive for
municipal bonds and for the Funds. In our opinion, municipal bond funds will
continue to be an important investment vehicle -- which can provide
diversification to an investor's overall portfolio, as well as providing
individual investors with a vehicle that strives to preserve capital and
generate non-taxable income.*
<PAGE>
30-Year AAA-Rated Municipal Bonds
Tax-Equivalent Yields
As of Ausgust 31, 2000
Tax-Equivalent Yield Income Tax Bracket
-------------------- ------------------
6.68% 15 %
7.88% 28 %
8.23% 31 %
8.88% 36 %
9.40% 39.6%
------------------------------------
As of August 31, 2000, the yield
on 30-year AAA-rated municipal
bonds nationally was 5.68%
(Source: Bloomberg). The chart
shows what the equivalent yield
would be on a taxable investment
for investors in each tax bracket.**
------------------------------------
*A portion of the income from tax-exempt funds may be subject to the
alternative minimum tax.
**Principal and interest of municipal bonds, unlike U.S. Treasury securities,
are not guaranteed by the U.S. government. The above illustration is not
intended to represent the yield of any mutual fund from Delaware Investments.
8
<PAGE>
FUND BASICS
Fund Objective
The Fund seeks as high a level of current income exempt from federal and Idaho
state personal income taxes as is consistent with preservation of capital.
Total Fund Assets
As of August 31, 2000
$48.62 million
Number of Holdings
56
Fund Start Date
January 4, 1995
Your Fund Manager
Elizabeth H. Howell joined Delaware Investments via its acquisition of Voyageur
Fund Managers in 1997. She previously held management positions at Windsor
Financial Group, Loomis Sayles and Eaton Vance Management. She holds a
bachelor's degree from Skidmore College, an MBA degree from Babson College and
is a member of the Twin Cities Securities Analysts Society.
Nasdaq Symbols
Class A VIDAX
Class B DVTIX
Class C DVICX
<PAGE>
DELAWARE TAX-FREE IDAHO FUND PERFORMANCE
Growth of a $10,000 Investment
January 4, 1995 through August 31, 2000
Lehman Brothers
Delaware Tax-Free Idaho Municipal Bond
Fund Class A Index
Jan-95 $9,625 $10,000
Feb-95 $10,168 $10,291
Aug-95 $10,676 $10,897
Feb-96 $11,305 $11,428
Aug-96 $11,314 $11,468
Feb-97 $11,910 $12,057
Aug-97 $12,436 $12,528
Feb-98 $13,118 $13,159
Aug-98 $13,560 $13,612
Feb-99 $13,844 $13,968
Aug-99 $13,425 $13,686
Feb-00 $13,010 $13,677
Aug-00 $13,860 $14,607
Chart assumes $10,000 invested on January 4, 1995 and includes the effect of a
3.75% front-end sales charge and the reinvestment of all dividends and capital
gains. Performance of other Fund classes will vary due to differing charges and
expenses. Returns plotted on the chart were as of the last day of each
successive month. Past performance does not guarantee future results.
Average Annual Total Returns
Through August 31, 2000 Lifetime Five Years One Year
--------------------------------------------------------------------------------
Class A (Est. 1/4/95)
Excluding Sales Charge +6.68% +5.37% +3.25%
Including Sales Charge +5.96% +4.56% -0.65%
--------------------------------------------------------------------------------
Class B (Est. 3/16/95)
Excluding Sales Charge +5.03% +4.69% +2.58%
Including Sales Charge +4.88% +4.35% -1.35%
--------------------------------------------------------------------------------
Class C (Est. 1/11/95)
Excluding Sales Charge +5.76% +4.56% +2.58%
Including Sales Charge +5.76% +4.56% +1.60%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
share results, excluding sales charges, assume either that contingent deferred
sales charges did not apply or the investment was not redeemed. Past performance
is not a guarantee of future results.
Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have 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.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
An expense limitation was in effect for all classes of Delaware Tax-Free Idaho
Fund during the periods shown. Performance would have been lower if the expense
limitation was not in effect.
Portfolio Characteristics
August 31, 2000
--------------------------------------------------------------------------------
Current 30-Day SEC Yield* +4.93%
--------------------------------------------------------------------------------
Average Effective Duration** 8.6 years
--------------------------------------------------------------------------------
Average Effective Maturity*** 13.9 years
--------------------------------------------------------------------------------
Average Credit Quality BBB
--------------------------------------------------------------------------------
* For Class A shares measured according to Securities and Exchange
Commission (SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for
both Class B and C shares was +4.38%.
** Duration is a common measure of a bond or bond fund's sensitivity to
interest rate changes.
*** Average effective maturity is the average time remaining until
scheduled repayment by issuers of portfolio securities.
9
<PAGE>
FUND BASICS
Fund Objective
The Fund seeks as high a level of current income exempt from federal and Iowa
state personal income taxes as is consistent with preservation of capital.
Total Fund Assets
As of August 31, 2000
$40.86 million
Number of Holdings
38
Fund Start Date
September 1, 1993
Your Fund Manager
Elizabeth H. Howell
Nasdaq Symbols
Class A VITFX
Class B DVFIX
Class C DVIFX
<PAGE>
DELAWARE TAX-FREE IOWA FUND PERFORMANCE
Growth of a $10,000 Investment
September 1, 1993 through August 31, 2000
Lehman Brothers
Delaware Tax-Free Iowa Municipal Bond
Fund Class A Index
Sep-93 $9,625 $10,000
Aug-94 $9,367 $9,901
Aug-95 $9,956 $10,779
Aug-96 $10,433 $11,343
Aug-97 $11,485 $12,392
Aug-98 $12,424 $13,464
Aug-99 $12,390 $13,537
Aug-00 $13,054 $14,448
Chart assumes $10,000 invested on September 1, 1993 and includes the effect of a
3.75% front-end sales charge and the reinvestment of all dividends and capital
gains. Performance of other Fund classes will vary due to differing charges and
expenses. Returns plotted on the chart were as of the last day of each
successive month. Past performance does not guarantee future results.
Average Annual Total Returns
Through August 31, 2000 Lifetime Five Years One Year
--------------------------------------------------------------------------------
Class A (Est. 9/1/93)
Excluding Sales Charge +4.47% +5.57% +5.35%
Including Sales Charge +3.90% +4.78% +1.38%
--------------------------------------------------------------------------------
Class B (Est. 3/24/95)
Excluding Sales Charge +5.09% +4.79% +4.56%
Including Sales Charge +4.94% +4.46% +0.56%
--------------------------------------------------------------------------------
Class C (Est. 1/4/95)
Excluding Sales Charge +6.32% +4.75% +4.57%
Including Sales Charge +6.32% +4.75% +3.57%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
share results, excluding sales charges, assume either that contingent deferred
sales charges did not apply or the investment was not redeemed. Past performance
is not a guarantee of future results.
Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have 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.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
An expense limitation was in effect for all classes of Delaware Tax-Free Iowa
Fund during the periods shown. Performance would have been lower if the expense
limitation was not in effect.
Portfolio Characteristics
August 31, 2000
--------------------------------------------------------------------------------
Current 30-Day SEC Yield* +4.20%
--------------------------------------------------------------------------------
Average Effective Duration** 6.6 years
--------------------------------------------------------------------------------
Average Effective Maturity*** 9.1 years
--------------------------------------------------------------------------------
Average Credit Quality BBB
--------------------------------------------------------------------------------
*For Class A shares measured according to Securities and Exchange
Commission (SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for
both Class B and C shares was +3.62%.
**Duration is a common measure of a bond or bond fund's sensitivity to
interest rate changes.
***Average effective maturity is the average time remaining until scheduled
repayment by issuers of portfolio securities.
10
<PAGE>
FUND BASICS
Fund Objectives
The Fund seeks as high a level of current income exempt from federal and Kansas
state personal income taxes as is consistent with preservation of capital.
Total Fund Assets
As of August 31, 2000
$14.63 million
Number of Holdings
40
Fund Start Date
November 30, 1992
Your Fund Manager
Elizabeth H. Howell
Nasdaq Symbols
Class A VKSTX
Class B DVKBX
Class C DVKCX
<PAGE>
DELAWARE TAX-FREE KANSAS FUND PERFORMANCE
Growth of a $10,000 Investment
November 30, 1992 through August 31, 2000
Lehman Brothers
Delaware Tax-Free Kansas Municipal Bond
Fund Class A Index
Dec-92 $9,625 $10,000
Aug-93 $10,766 $10,948
Aug-94 $10,813 $10,963
Aug-95 $11,571 $11,935
Aug-96 $12,242 $12,560
Aug-97 $13,316 $13,721
Aug-98 $14,537 $14,908
Aug-99 $14,587 $14,990
Aug-00 $15,191 $15,998
Chart assumes $10,000 invested on November 30, 1992 and includes the effect of a
3.75% front-end sales charge and the reinvestment of all dividends and capital
gains. Performance of other Fund classes will vary due to differing charges and
expenses. Returns plotted on the chart were as of the last day of each
successive month. Past performance does not guarantee future results.
Average Annual Total Returns
Through August 31, 2000 Lifetime Five Years One Year
--------------------------------------------------------------------------------
Class A (Est. 11/30/92)
Excluding Sales Charge +6.08% +5.60% +4.14%
Including Sales Charge +5.56% +4.80% +0.27%
--------------------------------------------------------------------------------
Class B (Est. 4/8/95)
Excluding Sales Charge +5.01% +4.83% +3.45%
Including Sales Charge +4.86% +4.50% -0.51%
--------------------------------------------------------------------------------
Class C (Est. 4/12/95)
Excluding Sales Charge +4.98% +4.84% +3.46%
Including Sales Charge +4.98% +4.84% +2.47%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
share results, excluding sales charges, assume either that contingent deferred
sales charges did not apply or the investment was not redeemed. Past performance
is not a guarantee of future results.
Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have 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.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
An expense limitation was in effect for all classes of Delaware Tax-Free Kansas
Fund during the periods shown. Performance would have been lower if the expense
limitation was not in effect.
Portfolio Characteristics
August 31, 2000
--------------------------------------------------------------------------------
Current 30-Day SEC Yield* +4.60%
--------------------------------------------------------------------------------
Average Effective Duration** 6.7 years
--------------------------------------------------------------------------------
Average Effective Maturity** * 9.7 years
--------------------------------------------------------------------------------
Average Credit Quality A
--------------------------------------------------------------------------------
*For Class A shares measured according to Securities and Exchange
Commission (SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for
both Class B and C shares was +4.03%.
**Duration is a common measure of a bond or bond fund's sensitivity to
interest rate changes.
***Average effective maturity is the average time remaining until scheduled
repayment by issuers of portfolio securities.
11
<PAGE>
DELAWARE TAX-FREE
MISSOURI INSURED FUND PERFORMANCE
---------------------------------
Fund Basics
-----------
Fund Objective
The Fund seeks as high a level of
current income exempt from federal
and Missouri state personal income
taxes as is consistent with
preservation of capital.
Total Fund Assets
As of August 31, 2000
$48.71 million
Number of Holdings
39
Fund Start Date
November 2, 1992
Your Fund Manager
Elizabeth H. Howell
Nasdaq Symbols
Class A VMOIX
Class B DVTBX
Class C DVTCX
Growth of a $10,000 Investment
November 2, 1992 through August 31, 2000
Lehman Brothers Delaware Tax-Free
Insured Municipal Missouri Insured
Bond Index Fund Class A
Nov-92 10,000 9,625
Feb-93 10,635 10,083
Aug-93 11,137 10,629
Feb-94 11,235 10,840
Aug-94 11,082 10,455
Feb-95 11,440 10,776
Aug-95 12,092 11,304
Feb-96 12,725 11,965
Aug-96 12,748 11,941
Feb-97 13,417 12,548
Aug-97 13,947 13,024
Feb-98 14,697 13,686
Aug-98 15,231 14,082
Feb-99 15,618 14,410
Aug-99 15,186 14,028
Feb-00 15,154 13,932
Aug-00 16,313 14,727
Chart assumes $10,000 invested on November 2, 1992 and includes the effect of a
3.75% front-end sales charge and the reinvestment of all dividends and capital
gains. Performance of other Fund classes will vary due to differing charges and
expenses. Returns plotted on the chart were as of the last day of each
successive month. Past performance does not guarantee future results.
Total Return
Through August 31, 2000 Lifetime Five Years One Year
--------------------------------------------------------------------------------
Class A (Est. 11/2/92)
Excluding Sales Charge +5.74% +5.44% +4.99%
Including Sales Charge +5.23% +4.64% +1.08%
--------------------------------------------------------------------------------
Class B (Est. 3/12/94)
Excluding Sales Charge +4.48% +4.72% +4.21%
Including Sales Charge +4.48% +4.39% +0.21%
--------------------------------------------------------------------------------
Class C (Est. 11/11/95)
Excluding Sales Charge +4.03% +4.20%
Including Sales Charge +4.03% +3.20%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
share results, excluding sales charges, assume either that contingent deferred
sales charges did not apply or the investment was not redeemed. Past performance
is not a guarantee of future results.
<PAGE>
Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have 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.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
An expense limitation was in effect for all classes of Delaware Tax-Free
Missouri Insured Fund during the periods shown. Performance would have been
lower if the expense limitation was not in effect.
Portfolio Characteristics
August 31, 2000
--------------------------------------------------------------------------------
Current 30-Day SEC Yield* +4.20%
--------------------------------------------------------------------------------
Average Effective Duration** 5.8 years
--------------------------------------------------------------------------------
Average Effective Maturity*** 7.1 years
--------------------------------------------------------------------------------
Average Credit Quality AAA
--------------------------------------------------------------------------------
*For Class A shares measured according to Securities and Exchange Commission
(SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for both Class B and
C shares was +3.61%.
**Duration is a common measure of a bond or bond fund's sensitivity to interest
rate changes.
***Average effective maturity is the average time remaining until scheduled
repayment by issuers of portfolio securities.
12
<PAGE>
DELAWARE MONTANA
MUNICIPAL BOND FUND PERFORMANCE
-------------------------------
Fund Basics
-----------
Fund Objective
The Fund seeks as high a level of
current income exempt from federal
and Montana state personal income
taxes as is consistent with
preservation of capital.
Total Fund Assets
As of August 31, 2000
$3.64 million
Number of Holdings
21
Fund Start Date
November 2, 1999
Your Fund Manager
Elizabeth H. Howell
Nasdaq Symbols
Class A DMTAX
Class B DMTBX
Class C DMTCX
Growth of a $10,000 Investment
November 2, 1999 through August 31, 2000
Delaware Montana
Municipal Bond Fund Lehman Brothers
Class A Municipal Bond Index
Apr-91 $9,632 $10,000
Aug-91 $9,650 $10,000
Aug-92 $9,597 $9,925
Aug-93 $9,580 $9,882
Aug-94 $9,671 $9,997
Aug-95 $9,867 $10,216
Aug-96 $9,799 $10,158
Aug-97 $9,718 $10,103
Aug-98 $9,922 $10,371
Aug-99 $10,055 $10,515
Aug-00 $10,207 $10,677
Chart assumes $10,000 invested on November 2, 1999 and includes the effect of a
3.75% front-end sales charge and the reinvestment of all dividends and capital
gains. Performance of other Fund classes will vary due to differing charges and
expenses. Returns plotted on the chart were as of the last day of each
successive month. Past performance does not guarantee future results.
Total Return
Through August 31, 2000 Lifetime
--------------------------------------------------------------------------------
Class A (Est. 11/2/99)
Excluding Sales Charge +6.10%
Including Sales Charge +2.19%
--------------------------------------------------------------------------------
Class B (Est. 11/2/99)
Excluding Sales Charge +5.65%
Including Sales Charge +1.65%
--------------------------------------------------------------------------------
Class C (Est. 11/2/99)
Excluding Sales Charge +5.65%
Including Sales Charge +4.65%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
share results, excluding sales charges, assume either that contingent deferred
sales charges did not apply or the investment was not redeemed. Past performance
is not a guarantee of future results.
<PAGE>
Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have 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.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
An expense limitation was in effect for all classes of Delaware Montana
Municipal Bond Fund during the periods shown. Performance would have been lower
if the expense limitation was not in effect.
Portfolio Characteristics
August 31, 2000
--------------------------------------------------------------------------------
Current 30-Day SEC Yield* +4.93%
--------------------------------------------------------------------------------
Average Effective Duration** 8.6 years
--------------------------------------------------------------------------------
Average Effective Maturity*** 13.5 years
--------------------------------------------------------------------------------
Average Credit Quality A
--------------------------------------------------------------------------------
*For Class A shares measured according to Securities and Exchange Commission
(SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for both Class B and
C shares was +4.42%.
**Duration is a common measure of a bond or bond fund's sensitivity to interest
rate changes.
***Average effective maturity is the average time remaining until scheduled
repayment by issuers of portfolio securities.
13
<PAGE>
DELAWARE TAX-FREE
NORTH DAKOTA FUND PERFORMANCE
-----------------------------
Fund Basics
-----------
Fund Objective
This Fund seeks as high a level of
current income exempt from federal
and North Dakota state personal
income taxes as is consistent with
preservation of capital.
Total Fund Assets
As of August 31, 2000
$23.97 million
Number of Holdings
34
Fund Start Date
April 1, 1991
Your Fund Manager
Elizabeth H. Howell
Nasdaq Symbols
Class A VNDTX
Class B DVTDX
Class C DVFDX
Growth of a $10,000 Investment
April 1, 1991 through August 31, 2000
Delaware Tax-Free Lehman Brothers
North Dakota Fund Municipal Bond
Class A Index
Apr-91 $9,625 $10,000
Aug-91 $10,090 $10,336
Aug-92 $11,092 $11,464
Aug-93 $12,636 $12,892
Aug-94 $12,498 $12,910
Aug-95 $13,517 $14,055
Aug-96 $14,294 $14,791
Aug-97 $15,599 $16,158
Aug-98 $16,905 $17,555
Aug-99 $16,835 $17,651
Aug-00 $17,436 $18,839
Chart assumes $10,000 invested on April 1, 1991 and includes the effect of a
3.75% front-end sales charge and the reinvestment of all dividends and capital
gains. Performance of other Fund classes will vary due to differing charges and
expenses. Returns plotted on the chart were as of the last day of each
successive month. Past performance does not guarantee future results.
Average Annual Total Returns
Through August 31, 2000 Lifetime Five Years One Year
--------------------------------------------------------------------------------
Class A (Est. 4/1/91)
Excluding Sales Charge +6.53% +5.24% +3.58%
Including Sales Charge +6.10% +4.44% -0.29%
--------------------------------------------------------------------------------
Class B (Est. 5/10/94)
Excluding Sales Charge +5.39% +4.57% +2.81%
Including Sales Charge +5.39% +4.24% -1.12%
--------------------------------------------------------------------------------
Class C (Est. 7/29/95)
Excluding Sales Charge +4.52% +4.35% +2.79%
Including Sales Charge +4.52% +4.35% +1.81%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
share results, excluding sales charges, assume either that contingent deferred
sales charges did not apply or the investment was not redeemed. Past performance
is not a guarantee of future results.
<PAGE>
Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have 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.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
An expense limitation was in effect for all classes of Delaware Tax-Free North
Dakota Fund during the periods shown. Performance would have been lower if the
expense limitation was not in effect.
Portfolio Characteristics
August 31, 2000
--------------------------------------------------------------------------------
Current 30-Day SEC Yield* +4.84%
--------------------------------------------------------------------------------
Average Effective Duration** 6.8 years
--------------------------------------------------------------------------------
Average Effective Maturity*** 10.6 years
--------------------------------------------------------------------------------
Average Credit Quality A
--------------------------------------------------------------------------------
*For Class A shares measured according to Securities and Exchange Commission
(SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for Class B shares
was +4.28%. For Class C shares, the 30-day SEC yield was +4.29%.
**Duration is a common measure of a bond or bond fund's sensitivity to
interest rate changes.
***Average effective maturity is the average time remaining until scheduled
repayment by issuers of portfolio securities.
14
<PAGE>
FUND BASICS
-----------
Fund Objective
This Fund seeks as high a level of
current income exempt from federal and
Oregon state personal income taxes, as
is consistent with preservation of
capital.
Total Fund Assets
As of August 31, 2000
$31.81 million
Number of Holdings
38
Fund Start Date
August 1, 1993
Your Fund Manager
Elizabeth H. Howell
Nasdaq Symbols
Class A VORIX
Class B DVYBX
Class C DVYCX
<PAGE>
DELAWARE TAX-FREE
OREGON INSURED FUND PERFORMANCE
-------------------------------
Growth of a $10,000 Investment
August 1, 1993 through August 31, 2000
Lehman Brothers Delaware Tax-Free
Insured Municipal Oregon Insured Fund
Bond Index Class A
----------------- -------------------
Aug-93 10,000 9,625
Feb-94 10,088 9,958
Aug-94 9,951 9,595
Feb-95 10,273 9,876
Aug-95 10,858 10,352
Feb-96 11,427 10,935
Aug-96 11,447 10,892
Feb-97 12,048 11,427
Aug-97 12,524 11,896
Feb-98 13,197 12,561
Aug-98 13,677 12,940
Feb-99 14,024 13,230
Aug-99 13,637 12,723
Feb-00 13,607 12,573
Aug-00 14,648 13,942
Chart assumes $10,000 invested on August 1, 1993 and includes the effect of a
3.75% front-end sales charge and the reinvestment of all dividends and capital
gains. Performance of other Fund classes will vary due to differing charges and
expenses. Returns plotted on the chart were as of the last day of each
successive month.
Past performance does not guarantee future results.
Average Annual Total Returns
Through August 31, 2000 Lifetime Five Years One Year
--------------------------------------------------------------------------------
Class A (Est. 8/1/93)
Excluding Sales Charge +4.90% +5.44% +6.04%
Including Sales Charge +4.33% +4.63% +2.09%
--------------------------------------------------------------------------------
Class B (Est. 3/12/94)
Excluding Sales Charge +4.42% +4.74% +5.24%
Including Sales Charge +4.42% +4.40% +1.24%
--------------------------------------------------------------------------------
Class C (Est. 7/7/95)
Excluding Sales Charge +4.62% +4.63% +5.24%
Including Sales Charge +4.62% +4.63% +4.24%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
share results, excluding sales charges, assume either that contingent deferred
sales charges did not apply or the investment was not redeemed. Past performance
is not a guarantee of future results.
Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have 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.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
An expense limitation was in effect for all classes of Delaware Tax-Free Oregon
Insured Fund during the periods shown. Performance would have been lower if the
expense limitation was not in effect.
Portfolio Characteristics
August 31, 2000
--------------------------------------------------------------------------------
Current 30-Day SEC Yield* +4.22%
--------------------------------------------------------------------------------
Average Effective Duration** 7.9 years
--------------------------------------------------------------------------------
Average Effective Maturity*** 10.4 years
--------------------------------------------------------------------------------
Average Credit Quality AAA
--------------------------------------------------------------------------------
* For Class A shares measured according to Securities and Exchange Commission
(SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for both Class B
and C shares was +3.64%.
** Duration is a common measure of a bond or bond fund's sensitivity to
interest rate changes.
*** Average effective maturity is the average time remaining until scheduled
repayment by issuers of portfolio securities.
15
<PAGE>
FUND BASICS
-----------
Fund Objective
This Fund seeks as high a level of
current income exempt from federal and
Wisconsin state personal income taxes,
as is consistent with preservation of
capital.
Total Fund Assets
As of August 31, 2000
$33.36 million
Number of Holdings
44
Fund Start Date
September 1, 1993
Your Fund Manager
Elizabeth H. Howell
Nasdaq Symbols
Class A VWIFX
Class B DVTWX
Class C DVFWX
<PAGE>
DELAWARE TAX-FREE
WISCONSIN FUND PERFORMANCE
--------------------------
Growth of a $10,000 Investment
September 1, 1993 through August 31, 2000
Delaware Tax-Free Lehman Brothers
Wisconsin Fund Municipal
Class A Bond Index
------------------- -----------------
Sep-93 $ 9,625 $10,000
Aug-94 $ 9,394 $ 9,901
Aug-95 $10,055 $10,779
Aug-96 $10,564 $11,343
Aug-97 $11,477 $12,392
Aug-98 $12,411 $13,464
Aug-99 $12,302 $13,537
Aug-00 $12,870 $14,448
Chart assumes $10,000 invested on September 1, 1993 and includes the effect of a
3.75% front-end sales charge and the reinvestment of all dividends and capital
gains. Performance of other Fund classes will vary due to differing charges and
expenses. Returns plotted on the chart were as of the last day of each
successive month. Past performance does not guarantee future results.
Average Annual Total Returns
Through August 31, 2000 Lifetime Five Years One Year
--------------------------------------------------------------------------------
Class A (Est. 9/1/93)
Excluding Sales Charge +4.25% +5.07% +4.62%
Including Sales Charge +3.69% +4.26% +0.72%
--------------------------------------------------------------------------------
Class B (Est. 4/22/95)
Excluding Sales Charge +4.38% +4.33% +3.84%
Including Sales Charge +4.22% +3.99% -0.15%
--------------------------------------------------------------------------------
Class C (Est. 3/28/95)
Excluding Sales Charge +4.47% +4.30% +3.93%
Including Sales Charge +4.47% +4.30% +2.93%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
share results, excluding sales charges, assume either that contingent deferred
sales charges did not apply or the investment was not redeemed. Past performance
is not a guarantee of future results.
Class A shares have a 3.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have 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.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
An expense limitation was in effect for all classes of Delaware Tax-Free
Wisconsin Fund during the periods shown. Performance would have been lower if
the expense limitation was not in effect.
Portfolio Characteristics
August 31, 2000
--------------------------------------------------------------------------------
Current 30-Day SEC Yield* +4.44%
--------------------------------------------------------------------------------
Average Effective Duration** 6.8 years
--------------------------------------------------------------------------------
Average Effective Maturity*** 9.8 years
--------------------------------------------------------------------------------
Average Credit Quality BBB
--------------------------------------------------------------------------------
* For Class A shares measured according to Securities and Exchange Commission
(SEC) guidelines. Current 30-day SEC yield as of 8/31/00 for Class B shares
was +3.87%. For Class C shares, the 30-day SEC yield was +3.85%.
** Duration is a common measure of a bond or bond fund's sensitivity to
interest rate changes.
*** Average effective maturity is the average time remaining until scheduled
repayment by issuers of portfolio securities.
16
<PAGE>
Statements of Net Assets
DELAWARE TAX-FREE IDAHO FUND
Principal Market
August 31, 2000 Amount Value
--------------------------------------------------------------------------------
Municipal Bonds - 97.99%
General Obligation Bonds - 4.34%
Ada & Canyon County School
District #2 5.50% 7/30/16 ..................... $ 1,055,000 $ 1,079,708
Bonner County Local Improvement
District #93-1 6.20% 4/30/05 .................. 150,000 155,082
Bonner County Local Improvement
District #93-1 6.35% 4/30/06 .................. 185,000 191,482
Bonner County Local Improvement
District #93-1 6.40% 4/30/07 .................. 195,000 201,827
Bonner County Local Improvement
District #93-1 6.50% 4/30/08 .................. 110,000 113,843
Bonner County Local Improvement
District #93-1 6.50% 4/30/10 .................. 100,000 103,244
Coeur D' Alene Local Improvement
District #6 Series 1995 6.00% 7/1/09 .......... 85,000 87,677
Coeur D' Alene Local Improvement
District #6 Series 1996 6.05% 7/1/10 .......... 90,000 92,705
Coeur D' Alene Local Improvement
District #6 Series 1997 6.10% 7/1/12 .......... 40,000 40,979
Coeur D' Alene Local Improvement
District #6 Series 1998 6.10% 7/1/14 .......... 45,000 45,822
-----------
2,112,369
-----------
Higher Education Revenue Bonds - 2.82%
University of Idaho Student Fee
Telecommunications (FSA) 5.85% 4/1/11 ......... 1,300,000 1,369,355
-----------
1,369,355
-----------
Hospital Revenue Bonds - 21.97%
Idaho Health Facilities Authority Hospital
Revenue Refunding and Improvement - Elks
Rehabilitation Hospital 5.45% 7/15/23 ......... 2,000,000 1,614,000
Idaho Health Facilities Authority
Revenue - Bannock Regional Medical Project
5.25% 5/1/14 .................................. 1,500,000 1,332,315
Idaho Health Facilities Authority
Revenue - Bannock Regional Medical Center
6.125% 5/1/25 ................................. 1,500,000 1,386,300
Idaho Health Facilities Authority
Revenue - Bannock Regional Medical Center
6.375% 5/1/17 ................................. 1,695,000 1,673,457
Idaho Health Facilities Authority
Revenue - Bingham Memorial Hospital
6.00% 3/1/29 .................................. 2,000,000 1,643,080
Idaho Health Facilities Authority
Revenue - Bonner General Hospital
6.50% 10/1/28 ................................. 1,500,000 1,329,975
Idaho Health Facilities Authority
Revenue - Saint Luke's Regional
Medical Center 4.30% 5/1/22 ................... 1,700,000 1,700,000
-----------
10,679,127
-----------
<PAGE>
Principal Market
Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Housing Revenue Bonds - 14.71%
Idaho Health Facilities Authority
Revenue - Valley Vista Care
Series A 7.875% 11/15/22 ...................... $ 3,000,000 $ 2,970,000
Idaho State Housing Agency Multi-Family
Park Place Project (FHA)
6.50% 12/1/36 ................................. 990,000 1,034,303
Idaho State Housing Finance Authority Single
Family Series A (AMBAC) 6.05% 7/1/13 .......... 345,000 357,748
Idaho State Housing Finance Authority Single
Family Series A (FHA) 6.10% 7/1/16 ............ 360,000 369,785
Idaho State Housing Finance Authority Single
Family Series A-1 6.85% 7/1/12 ................ 65,000 68,156
Idaho State Housing Finance Authority Single
Family Series B (FHA) 6.45% 7/1/15 ............ 170,000 177,035
Idaho State Housing Finance Authority Single
Family Series C-2 6.35% 7/1/15 ................ 225,000 233,456
Idaho State Housing Finance Authority Single
Family Series E 6.60% 7/1/11 .................. 95,000 100,293
Idaho State Housing Finance Authority Single
Family Series E (FHA) 6.35% 7/1/15 ............ 325,000 339,190
Idaho State Housing Finance Authority Single
Family Series G-2 (FHA) 6.15% 7/1/15 .......... 1,455,000 1,501,371
-----------
7,151,337
-----------
Industrial Development Revenue Bonds - 3.14%
Idaho State Water Resource Boise
Water Corporation 7.25% 12/1/21 ............... 100,000 104,081
Meridan Economic Development Corporate
Revenue EDA for Hi-Micro 5.85% 8/15/11 ........ 1,250,000 1,266,813
Puerto Rico Industrial Medical Environmental
Revenue - PepsiCo Project
6.25% 11/15/13 ................................ 150,000 156,879
-----------
1,527,773
-----------
Lease/Certificates of Participation - 2.07%
North Idaho College Dormitory
Housing - Certificates of Participation
6.45% 10/1/16 ................................. 1,000,000 1,006,250
-----------
1,006,250
-----------
Pollution Control Revenue Bonds - 22.11%
Nez Perce County, Idaho Pollution Control
Revenue Refunding - Potlatch Project
6.00% 10/1/24 ................................. 5,500,000 5,296,665
Power County Idaho Pollution Control
Revenue - FMC Corporation Project
5.625% 10/1/14 ................................ 5,570,000 5,450,691
-----------
10,747,356
-----------
17
<PAGE>
Statements of Net Assets (continued)
Principal Market
Delaware Tax-Free Idaho Fund Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Power Authority Revenue Bonds - 2.05%
+Puerto Rico Electric Power Authority
Inverse Floater ROLS (FSA) 4.79% 7/1/19 ......... $1,100,000 $ 888,998
Puerto Rico Electric Power Authority (FSA)
6.00% 7/1/16 .................................... 100,000 105,245
----------
994,243
----------
*Pre-Refunded Bonds - 6.67%
Ada & Canyon County School District #2
5.60% 7/30/12-05 ................................ 1,325,000 1,397,849
Ammon, Idaho Urban Renewal Agency Sub Lien
Tax Increment Revenue Series B
6.25% 8/1/18-06 ................................. 445,000 483,034
Ammon, Idaho Urban Renewal Tax Increment
Revenue 5.875% 8/1/17-04 ........................ 350,000 373,048
Canyon County Independent School District #131
(MBIA) 5.50% 7/30/12-03 ......................... 100,000 102,167
Gooding and Lincoln Counties Independent
School District #231(FSA) 6.30% 2/1/14-04 ....... 100,000 105,809
Idaho Holy Cross - St. Alphonsus Regional
Medical Center 6.25% 12/1/22-02 ................. 590,000 623,530
Puerto Rico Telephone Authority Revenue
Series N 5.50% 1/1/22-03 ........................ 150,000 156,810
----------
3,242,247
----------
Transportation Revenue Bonds - 0.70%
Guam Highway (FSA) 6.30% 5/1/12 ................... 150,000 156,981
Puerto Rico Highway Revenue Series W
5.50% 7/1/15 .................................... 175,000 182,019
----------
339,000
----------
Water & Sewer Revenue Bonds - 0.56%
Chubbuck Water Revenue 6.35% 4/1/08 ............... 125,000 131,188
Chubbuck Water Revenue 6.40% 4/1/10 ............... 135,000 141,340
----------
272,528
----------
Other Revenue Bonds - 16.85%
Boise Urban Renewal Agency Tax Increment
Revenue - Series A 6.125% 9/1/15 ................ 2,500,000 2,543,350
Boise Urban Renewal Agency Tax Increment
Revenue - Series B 6.125% 9/1/15 ................ 2,040,000 2,075,374
Hayden Local Improvement
District 95-1 - Special Assessment
6.30% 5/1/12 .................................... 115,000 115,182
Hayden Local Improvement
District 95-1 - Special Assessment
6.35% 5/1/13 .................................... 120,000 120,190
Hayden Local Improvement
District 95-1 - Special Assessment
6.40% 5/1/14 .................................... 125,000 125,176
Idaho State Building Authority Building Revenue
Series A 4.75% 9/1/25 ........................... 500,000 448,140
<PAGE>
Principal Market
Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Other Revenue Bonds (continued)
Pocatello Development Authority Tax Increment
Revenue 7.25% 12/1/08 ....................... $1,585,000 $ 1,594,906
Puerto Rico Public Building Authority
Revenue Series M 5.50% 7/1/21 ............... 1,175,000 1,170,570
-----------
8,192,888
-----------
Total Municipal Bonds
(cost $48,527,181) .......................... 47,634,473
-----------
Number
of Shares
Short-Term Investments - 0.00%
Wells Fargo National Tax-Free
Money Market Fund ........................... 2,068 2,068
-----------
Total Short-Term Investments
(cost $2,068) ............................... 2,068
-----------
Total Market Value of Securities - 97.99%
(cost $48,529,249) .......................... 47,636,541
Receivables and Other Assets
Net of Liabilities - 2.01% .................. 978,944
-----------
Net Assets Applicable to 4,532,995
Shares Oustanding - 100.00% ................. $48,615,485
===========
Net Asset Value - Delaware Tax-Free
Idaho Fund A Class
($34,674,645 / 3,232,212 Shares) ............ $ 10.73
-----------
Net Asset Value - Delaware Tax-Free
Idaho Fund B Class
($10,320,025 / 962,934 Shares) .............. $ 10.72
-----------
Net Asset Value - Delaware Tax-Free
Idaho Fund C Class
($3,620,815 / 337,849 Shares) ............... $ 10.72
-----------
18
<PAGE>
Statements of Net Assets (continued)
Delaware Tax-Free Idaho Fund
--------------------------------------------------------------------------------
Components of Net Assets at August 31, 2000:
Shares of beneficial interest
(unlimited authorization - no par) ........... $50,245,043
Accumulated net realized
loss on investments .......................... (736,850)
Net unrealized depreciation of investments ..... (892,708)
-----------
Total net assets ............................... $48,615,485
===========
----------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
the bond is pre-refunded.
+ Inverse Floater represents a security that pays interest at a rate that
increases (decreases) with a decrease (increase) in a specific index. Interest
rate disclosed is in effect as of August 31, 2000.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FHA - Insured by the Federal Housing Authority
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
Net Asset Value and Offering Price per Share -
Delaware Tax-Free Idaho Fund
Net asset value A Class (A) ....................... $10.73
Sales charge (3.75% of offering price, or
3.91% of amount invested per share) (B) ........ 0.42
------
Offering price .................................... $11.15
======
-------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
See accompanying notes
19
<PAGE>
Statements of Net Assets (continued)
DELAWARE TAX-FREE IOWA FUND
Principal Market
August 31, 2000 Amount Value
--------------------------------------------------------------------------------
Municipal Bonds - 98.20%
Higher Education Revenue Bonds - 7.43%
Iowa Center Community College
Dormitory - Merged Area V
5.45% 6/1/18 ...................................... $ 545,000 $ 515,112
Iowa Finance Authority - Student Housing
Dormitory Revenues for Iowa Valley
Community College 5.85% 5/1/19 .................... 855,000 834,087
Puerto Rico Educational Facility
Revenue - Polytechnic University
6.50% 8/1/24 ...................................... 630,000 658,766
University Of Puerto Rico Revenue (MBIA)
5.50% 6/1/15 ...................................... 1,000,000 1,028,790
----------
3,036,755
----------
Hospital Revenue Bonds - 3.08%
Puerto Rico Hospital Revenue - Hospital
Auxilio Mutuo Obligated Group (MBIA)
6.25% 7/1/24 ...................................... 1,200,000 1,259,772
----------
1,259,772
----------
Housing Revenue Bonds - 1.66%
Puerto Rico Housing Bank & Finance Agency
Single Family Mortgage Revenue (GNMA)
6.25% 4/1/29 ...................................... 655,000 677,735
----------
677,735
----------
Industrial Development Revenue Bonds - 16.21%
Iowa Finance Authority - Underground Storage
Tank Revenue 5.125% 7/1/14 ........................ 3,800,000 3,808,246
Lee County Urban Renewal Revenue - Keokuk
Waste Treatment 6.40% 6/1/07 ...................... 500,000 514,960
Puerto Rico Commonwealth Industrial
Development General Purpose Revenue
Series B 5.375% 7/1/16 ............................ 1,000,000 1,005,150
Puerto Rico Port Authority Revenue - Special
Facility - American Airlines (AMT)
6.25% 6/1/26 ...................................... 1,275,000 1,294,355
----------
6,622,711
----------
Power Authority Revenue Bonds - 8.49%
+Puerto Rico Electric Power Authority Revenue
Series DD Inverse Floater ROLS (FSA)
4.79% 7/1/19 ...................................... 1,000,000 808,180
Puerto Rico Electric Power Authority Revenue
Series EE 4.75% 7/1/24 ............................ 600,000 535,494
Puerto Rico Electric Power Authority Revenue
Series U 6.00% 7/1/14 ............................. 1,100,000 1,155,990
Virgin Islands Water & Power Authority Electric
System Revenue 5.30% 7/1/18 ....................... 1,000,000 968,560
----------
3,468,224
----------
<PAGE>
Principal Market
Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
*Pre-Refunded/Escrowed to Maturity Bonds - 16.97%
Puerto Rico Electric Power Authority
Revenue 6.25% 7/1/17-02 ........................... $1,000,000 $1,051,550
Puerto Rico Municipal Finance Authority
(FSA) 6.00% 7/1/14-04 ............................. 1,700,000 1,836,102
Puerto Rico Telephone Revenue Authority
5.50% 1/1/22-03 ................................... 2,120,000 2,216,248
Virgin Islands Public Finance Authority
7.30% 10/1/18 (Escrowed to Maturity) .............. 1,500,000 1,829,100
----------
6,933,000
----------
Transportation Revenue Bonds - 8.55%
Guam Highway (FSA) 6.30% 5/1/12 ..................... 1,950,000 2,040,753
Puerto Rico Commonwealth Highway &
Transportation Revenue 5.25% 7/1/21 ............... 1,500,000 1,451,925
----------
3,492,678
----------
Water & Sewer Revenue Bonds - 11.42%
Iowa Finance Authority - State Revolving
Fund Revenue 5.20% 5/1/23 ......................... 2,445,000 2,362,750
Iowa Finance Authority - State Revolving
Fund Revenue 6.25% 5/1/24 ......................... 1,750,000 1,827,753
Virgin Islands Water & Power Authority
Water System Revenue 5.50% 7/1/17 ................. 510,000 476,911
----------
4,667,414
----------
Other Revenue Bonds - 24.39%
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue Series A 5.10% 6/1/01 ..................... 315,000 315,000
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue Series A 5.20% 6/1/02 ..................... 330,000 330,000
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue Series A 5.30% 6/1/03 ..................... 345,000 344,569
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue Series A 5.40% 6/1/04 ..................... 365,000 364,544
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue Series A 5.50% 6/1/05 ..................... 385,000 384,519
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue Series A 5.60% 6/1/06 ..................... 405,000 404,494
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue Series A 5.70% 6/1/07 ..................... 425,000 424,469
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue Series A 5.80% 6/1/08 ..................... 450,000 448,875
Bettendorf, Iowa Urban Renewal Tax Increment
Revenue Series A 5.90% 6/1/09 ..................... 800,000 798,000
Iowa Finance Authority Revenue - Correctional
Facility Program 5.70% 6/15/14 .................... 2,000,000 2,064,640
Puerto Rico Public Building Authority Revenue
Series L 5.75% 7/1/16 ............................. 1,000,000 1,019,260
Puerto Rico Public Building Authority Revenue
Series M 5.50% 7/1/21 ............................. 1,100,000 1,095,853
20
<PAGE>
Statements of Net Assets (continued)
Principal Market
Delaware Tax-Free Iowa Fund Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Other Revenue Bonds (continued)
Puerto Rico Public Building Authority Revenue
Series M 5.75% 7/1/15 ....................... $ 1,000,000 $ 1,022,240
Virgin Islands Public Finance Authority
Revenue - Sub Lien Funded Loan Notes
Series E 5.875% 10/1/18 ..................... 1,000,000 949,320
-----------
9,965,783
-----------
Total Municipal Bonds
(cost $38,705,502) .......................... 40,124,072
-----------
Number
of Shares
Short-Term Investments - 0.06%
Wells Fargo National Tax-Free Money
Market Fund ................................. 23,866 23,866
-----------
Total Short-Term Investments
(cost $23,866) .............................. 23,866
-----------
Total Market Value of Securities - 98.26%
(cost $38,729,368) .......................... 40,147,938
Receivables and Other Assets
Net of Liabilities - 1.74% .................. 711,425
-----------
Net Assets Applicable to 4,189,802
Shares Outstanding - 100.00% ................ $40,859,363
===========
Net Asset Value - Delaware Tax-Free
Iowa Fund A Class
($36,136,041 / 3,705,512 Shares) ............ $ 9.75
-----------
Net Asset Value - Delaware Tax-Free
Iowa Fund B Class
($3,616,463 / 370,767 Shares) ............... $ 9.75
-----------
Net Asset Value - Delaware Tax-Free
Iowa Fund C Class
($1,106,859 / 113,523 Shares) ............... $ 9.75
-----------
<PAGE>
--------------------------------------------------------------------------------
Components of Net Assets at August 31, 2000:
Shares of beneficial interest
(unlimited authorization - no par) ..................... $ 41,281,259
Accumulated net realized
loss on investments .................................... (1,840,466)
Net unrealized appreciation of investments ................ 1,418,570
------------
Total net assets .......................................... $ 40,859,363
============
----------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
the bond is pre-refunded.
+Inverse Floater represents a security that pays interest at a rate that
increases (decreases) with a decrease (increase) in a specific index. Interest
rate disclosed is in effect as of August 31, 2000.
Summary of Abbreviations:
AMT - Subject to Alternative Minimum Tax
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
Net Asset Value and Offering Price per Share -
Delaware Tax-Free Iowa Fund
Net asset value A Class (A) ..................................... $ 9.75
Sales charge (3.75% of offering price or 3.90%
of amount invested per share) (B) ............................ 0.38
------
Offering price .................................................. $10.13
======
----------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
See accompanying notes
21
<PAGE>
Statements of Net Assets (continued)
DELAWARE TAX-FREE KANSAS FUND
-----------------------------
Principal Market
August 31, 2000 Amount Value
--------------------------------------------------------------------------------
Municipal Bonds - 98.23%
Certificate of Participation - 2.30%
Linn County, Kansas for America One,
LLC 7.25% 3/1/13 ................................. $ 350,000 $ 336,151
----------
336,151
----------
General Obligation Bonds - 14.75%
Allen County Unified School District #258
(AMBAC) 6.875% 9/1/10 ............................ 240,000 279,763
Ellsworth County Series 1 5.75% 9/1/17 ............. 250,000 256,348
Johnson County General Obligation
6.125% 9/1/12 .................................... 340,000 351,203
Linn County Unified School District
5.70% 11/1/16 .................................... 500,000 506,420
Sumner County Unified School District
#356 (MBIA) 5.75% 9/1/11 ......................... 250,000 259,857
Wyandotte County School District 204
5.60% 9/1/20 ..................................... 500,000 504,180
----------
2,157,771
----------
Higher Education Revenue Bonds - 14.51%
Kansas Development Finance
Authority - Kansas Board of
Regents - Wichita State University
(AMBAC) 5.875% 6/1/17 ............................ 300,000 306,987
Puerto Rico Educational Facility
Revenue - Polytechnic University
6.50% 8/1/24 ..................................... 1,125,000 1,176,367
Winfield Kansas Educational Facilities Revenue
Refunding and Improvement 5.75% 4/1/22 ........... 680,000 639,220
----------
2,122,574
----------
Hospital Revenue Bonds - 9.84%
Kansas State Development Finance Authority
Health Facilities Revenue Stormont-Vail
Healthcare - M 4.35% 11/15/23 .................... 100,000 100,000
Olathe, Kansas Health Facility Revenue
for Evangelical Lutheran
Good Samaritan Project
(AMBAC) 6.00% 5/1/19 ............................. 250,000 257,570
Olathe, Kansas Health Facility Revenue
for Olathe Medical Center
Series 94A (AMBAC) 5.875% 9/1/16 ................. 100,000 101,126
Shawnee County Sisters Of Charity Leavenworth
Hospital (FSA) 5.00% 12/1/23 ..................... 250,000 221,095
Wichita Kansas Hospital Revenue
6.25% 11/15/24 ................................... 750,000 759,555
----------
1,439,346
----------
Housing Revenue Bonds - 9.36%
Kansas Development Finance Authority for
Martin Creek Multifamily Housing Project
(FHA) 6.50% 8/1/24 ............................... 50,000 51,731
<PAGE>
Principal Market
Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Housing Revenue Bonds (continued)
Olathe, Kansas Multifamily Housing -
Deerfield Apartments Series 1994A
(FNMA) 6.45% 6/1/19 ............................. $ 250,000 $ 260,898
Olathe, Kansas Multifamily Housing -
Jefferson Place Apartments Project -
Series B 6.10% 7/1/22 ........................... 300,000 303,312
Olathe Senior Living Facilities Revenue -
Averdeen Village-Series A
8.00% 5/15/30 ................................... 750,000 753,472
----------
1,369,413
----------
Industrial Development Revenue Bonds - 7.93%
Columbus, Kansas Industrial Revenue Ace
Electrical Acquisition 7.00% 8/1/17 ............. 800,000 765,632
Manhattan, Kansas Industrial Revenue
Farrar Project 7.00% 8/1/14 ..................... 400,000 394,384
----------
1,160,016
----------
Power Authority Revenue Bonds - 6.29%
+Puerto Rico Electric Power Authority Revenue
Series DD Inverse Floater ROLS (FSA)
4.79% 7/1/19 .................................... 600,000 484,908
Puerto Rico Electric Power Authority
Series Z 5.25% 7/1/21 ........................... 450,000 435,577
----------
920,485
----------
*Pre-Refunded Bonds - 20.15%
Douglas County Lawrence Unified School District
#497 6.00% 9/1/15-03 ............................ 250,000 258,743
Jefferson County Unified School District #340
(FSA) 6.35% 9/1/15-04 ........................... 250,000 267,268
Johnson County General Obligation
6.125% 9/1/12-02 ................................ 260,000 271,024
Kansas City Community College Student Center
(MBIA) 6.25% 5/15/20-02 ......................... 300,000 309,126
Kansas City Utility System Revenue (FGIC)
6.375% 9/1/23-04 ................................ 295,000 320,594
Kansas Development Finance Authority Water
Pollution Control Sewer Revenue
6.00% 11/1/14-03 ................................ 250,000 265,693
Sedgwick County Unified School District #265
(FSA) 5.50% 10/1/13-04 .......................... 250,000 259,757
Maize Unified School District #266 Series 1994
(FSA) 5.875% 9/1/12-03 .......................... 250,000 260,282
Sedgwick County Unified School District #267
6.15% 11/1/09-05 ................................ 250,000 269,122
Shawnee County Unified School District #345
(MBIA) 5.75% 9/1/11-04 .......................... 250,000 261,842
Shawnee County Unified School District #501
(FGIC) 5.75% 2/1/11-03 .......................... 200,000 205,900
----------
2,949,351
----------
22
<PAGE>
Statements of Net Assets (continued)
Principal Market
Delaware Tax-Free Kansas Fund Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Transportation Revenue Bonds - 0.69%
Kansas Department of Transportation
5.375% 3/1/13 ............................... $ 100,000 $ 101,369
-----------
101,369
-----------
Water & Sewer Revenue Bonds - 12.41%
Haysville Water & Sewer (FSA)
5.80% 10/1/16 ............................... 250,000 257,710
Johnson County Water Revenue
5.25% 12/1/15 ............................... 175,000 175,037
Kansas City Utility System Revenue
(FGIC) 6.375% 9/1/23 ........................ 605,000 635,456
Kansas State Development Finance Authority
Revenue 5.50% 4/1/21 ........................ 750,000 748,133
-----------
1,816,336
-----------
Total Municipal Bonds
(cost $13,918,736) ............................. 14,372,812
-----------
Number
of Shares
Short-Term Investments - 0.32%
Wells Fargo National Tax-Free
Money Market Fund ............................ 47,067 47,067
-----------
Total Short-Term Investments
(cost $47,067) ............................... 47,067
-----------
Total Market Value of Securities - 98.55%
(cost $13,965,803) ........................... 14,419,879
Receivables and Other Assets
Net of Liabilities - 1.45% ................... 212,885
-----------
Net Assets Applicable to 1,389,935
Shares Outstanding - 100.00% ................. $14,632,764
===========
Net Asset Value - Delaware Tax-Free
Kansas Fund A Class
($10,391,363 / 987,513 Shares) ............... $10.52
------
Net Asset Value - Delaware Tax-Free
Kansas Fund B Class
($3,879,183 / 368,008 Shares) ................ $10.54
------
Net Asset Value - Delaware Tax-Free
Kansas Fund C Class
($362,218 / 34,414 Shares) ................... $10.53
------
<PAGE>
--------------------------------------------------------------------------------
Components of Net Assets at August 31, 2000:
Shares of beneficial interest
(unlimited authorization - no par) .................... $ 14,525,674
Accumulated net realized
loss on investments ................................... (346,986)
Net unrealized appreciation of investments .............. 454,076
------------
Total net assets ........................................ $ 14,632,764
============
------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
the bond is pre-refunded.
+Inverse Floater represents a security that pays interest at a rate that
increases (decreases) with a decrease (increase) in a specific index. Interest
rate disclosed is in effect as of August 31, 2000.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by the Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
Net Asset Value and Offering Price per Share -
Delaware Tax-Free Kansas Fund
Net asset value A Class (A) ..................................... $10.52
Sales charge (3.75% of offering price or
3.90% of amount invested per share) (B) ........................ 0.41
------
Offering price .................................................. $10.93
======
------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
See accompanying notes
23
<PAGE>
Statements of Net Assets (continued)
DELAWARE TAX-FREE MISSOURI INSURED FUND
---------------------------------------
Principal Market
August 31, 2000 Amount Value
--------------------------------------------------------------------------------
Municipal Bonds - 98.42%
General Obligation Bonds - 5.16%
St. Charles (FSA) 5.75% 3/1/15 ................... $1,000,000 $1,030,280
**St. Charles County Missouri Francis Howell
School District Capital Appreciation
(FGIC) 5.445% 3/1/16 ........................... 2,000,000 869,740
**St. Charles County Missouri Francis Howell
School District Capital Appreciation
(FGIC) 5.495% 3/1/17 ........................... 1,500,000 613,230
----------
2,513,250
----------
Higher Education Revenue Bonds - 2.07%
Missouri State Health & Education
Facility - Central Missouri State University
(AMBAC) 5.75% 10/1/25 .......................... 1,000,000 1,006,490
----------
1,006,490
----------
Hospital Revenue Bonds - 24.23%
Cape Girardeau South East Missouri Hospital
(MBIA) 5.25% 6/1/16 ............................ 1,000,000 994,620
Hannibal Health Facilities Series A
(Hannibal Regional Hospital)
(FSA) 5.625% 3/1/12 ............................ 2,000,000 2,079,780
Hannibal Health Facilities Series A
(Hannibal Regional Hospital)
(FSA) 5.75% 3/1/22 ............................. 1,000,000 1,008,450
Jackson County St. Joseph's Hospital
(MBIA) 6.50% 7/1/12 ............................ 1,795,000 1,883,870
Jackson County St. Mary's Hospital
(MBIA) 5.75% 7/1/24 ............................ 2,000,000 2,010,600
Missouri State Health & Education Facility
(Heartland Health Systems)
(AMBAC) 6.35% 11/15/17 ......................... 1,250,000 1,299,113
Missouri State Health & Education Facility
(Health Midwest) (MBIA)
6.25% 2/15/22 .................................. 1,000,000 1,024,130
Missouri State Health & Education Facility
(SSM Health Care) (MBIA)
6.40% 6/1/10 ................................... 500,000 557,065
Missouri State Health & Education Facility
(St. Luke's Health Systems)
(MBIA) 5.125% 11/15/19 ......................... 1,000,000 947,860
----------
11,805,488
----------
Housing Revenue Bonds - 13.90%
Missouri Single Family Housing
(FNMA/GNMA) 7.20% 9/1/26 ....................... 1,445,000 1,537,726
Missouri Single Family Housing
(FNMA/GNMA) 7.25% 9/1/26 ....................... 1,715,000 1,869,982
Missouri Single Family Housing
(FNMA/GNMA) 7.45% 9/1/27 ....................... 1,380,000 1,516,606
Missouri Single Family Housing
(FNMA/GNMA) 7.55% 9/1/27 ....................... 1,270,000 1,372,324
<PAGE>
Principal Market
August 31, 2000 Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Housing Revenue Bonds (continued)
Missouri Single Family Housing
(GNMA) 7.20% 12/1/17 ........................... $ 145,000 $ 154,505
Missouri Single Family Housing
(GNMA) 7.25% 12/1/20 ........................... 300,000 319,173
-----------
6,770,316
-----------
Industrial Development Revenue Bonds - 2.15%
St. Louis Municipal Finance Corporation City
Lease Revenue-City Justice Center
Series A (AMBAC) 5.95% 2/15/16 ................. 1,000,000 1,046,380
-----------
1,046,380
-----------
Municipal Lease Bonds - 2.13%
Kansas City Muehlebach Hotel
(FSA) 5.90% 12/1/18 ............................ 1,000,000 1,036,630
-----------
1,036,630
-----------
Power Authority Revenue Bonds - 4.38%
+Puerto Rico Electric Power Authority
Inverse Floater ROLS (FSA) 5.38% 7/1/19 ........ 1,275,000 1,030,430
Sikeston Electric Revenue
(MBIA) 6.00% 6/1/13 ............................ 1,000,000 1,101,220
-----------
2,131,650
-----------
*Pre-Refunded/Escrowed to Maturity Bonds - 27.31%
Clark County School District
(FSA) 5.75% 3/1/15-05 .......................... 1,775,000 1,840,870
**Greene County Single Family Mortgage
Revenue - (Private Mortgage Insurance)
(Escrowed to Maturity) 5.715 % 3/1/16 .......... 1,225,000 511,487
Kansas City Airport Revenue
(FSA) 6.875% 9/1/14-04 ......................... 1,675,000 1,836,554
Sikeston Electric Revenue
(MBIA) 6.25% 6/1/12-02 ......................... 2,000,000 2,099,500
St. Charles School District
(FGIC) 6.50% 2/1/14-06 ......................... 1,250,000 1,366,775
St. Louis County School District #8
(MBIA) 5.60% 2/15/15-05 ........................ 1,490,000 1,557,110
St. Louis Municipal Finance Corporation
Leasehold Revenue
(FGIC) 6.25% 2/15/12-05 ........................ 1,850,000 1,981,276
Troy School District #3 Lincoln County
(MBIA) 6.10% 3/1/14-05 ......................... 1,235,000 1,316,004
West Platte School District
(MBIA) 5.85% 3/1/15-05 ......................... 750,000 791,648
-----------
13,301,224
-----------
Utility Revenue Bonds - 4.72%
Missouri Environmental Pollution Control
Revenue - St. Joseph's Light and
Power Co. (AMBAC) 5.85% 2/1/13 ................. 2,200,000 2,299,528
-----------
2,299,528
-----------
24
<PAGE>
Statements of Net Assets (continued)
Principal
Delaware Tax-Free Missouri Insured Fund Amount
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Water & Sewer Revenue Bonds - 5.58%
Liberty Sewer (MBIA) 6.00% 2/1/08 ................ $ 600,000 $ 647,874
Liberty Sewer (MBIA) 6.15% 2/1/15 ................ 1,500,000 1,598,025
St. Charles County Public Water Supply
Dist No 2 (MBIA) 5.10% 12/1/25 ................. 500,000 471,540
-----------
2,717,439
-----------
Other Revenue Bonds - 6.79%
Kansas City Municipal Assistance Bartle Hall
Convention Center
(MBIA) 5.60% 4/15/16 ........................... 940,000 952,878
Missouri State Environmental - State
Revolving Fund - Branson
(FSA) 6.05% 7/1/16 ............................. 2,265,000 2,356,959
-----------
3,309,837
-----------
Total Municipal Bonds
(cost $46,098,197) ............................. 47,938,232
-----------
Number
of Shares
Short-Term Investments - 0.30%
Wells Fargo National Tax-Free
Money Market Fund ............................ 146,586 146,586
-----------
Total Short-Term Investments
(cost $146,586) .............................. 146,586
-----------
Total Market Value of Securities - 98.72%
(cost $46,244,783) ........................... 48,084,818
Receivables and Other Assets
Net of Liabilities - 1.28% ................... 625,381
-----------
Net Assets Applicable to 4,710,651
Shares Outstanding - 100.00% ................. $48,710,199
===========
Net Asset Value - Delaware Tax-Free
Missouri Insured Fund A Class
($38,313,837 / 3,705,101 Shares) ............. $10.34
------
Net Asset Value - Delaware Tax-Free
Missouri Insured Fund B Class
($10,052,976 / 972,361 Shares) ............... $10.34
------
Net Asset Value -Delaware Tax-Free
Missouri Insured Fund C Class
($343,386 / 33,189 Shares) ................... $10.35
------
<PAGE>
--------------------------------------------------------------------------------
Components of Net Assets at August 31, 2000:
Shares of beneficial interest
(unlimited authorization - no par) .................... $ 47,803,108
Accumulated net realized
loss on investments ................................... (932,944)
Net unrealized appreciation
on investments ........................................ 1,840,035
------------
Total net assets ........................................ $ 48,710,199
============
--------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
the bond is pre-refunded.
**Zero coupon bond - The interest rate shown is the effective yield as of
August 31, 2000.
+Inverse Floater represents a security that pays interest at a rate that
increases (decreases) with a decrease (increase) in a specific index. Interest
rate disclosed is in effect as of August 31, 2000.
Summary of Abbreviations:
AMBAC - Insured by the Ambac Indemnity Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA- Insured by the Municipal Bond Insurance Association
Net Asset Value and Offering Price per Share -
Delaware Tax-Free Missouri Insured Fund
Net asset value A Class (A) ...................................... $10.34
Sales charge (3.75% of offering price or 3.87% of
amount invested per share) (B) ................................. 0.40
------
Offering price ................................................... $10.74
======
-------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
See accompanying notes
25
<PAGE>
Statements of Net Assets (continued)
DELAWARE MONTANA MUNICIPAL BOND FUND
------------------------------------
Principal Market
August 31, 2000 Amount Value
--------------------------------------------------------------------------------
Municipal Bonds - 97.47%
Continuing Care / Retirement
Revenue Bonds - 16.18%
Montana State Health Facilities
Authority Revenue Hillcrest Senior
Living Project 7.35% 6/1/20 ........................ $100,000 $ 100,530
Montana State Health Facilities Authority
Revenue Hillcrest Senior
Living Project 7.375% 6/1/30 ....................... 500,000 489,025
---------
589,555
---------
General Obligation Bonds - 16.00%
Cascade County High School B School Building
(FGIC) 5.60% 7/1/20 ................................ 165,000 169,175
Flathead County School District #6 Columbia Falls
(FSA) 5.65% 7/1/19 ................................. 115,000 116,896
Missoula County High School District
#1 Building 5.50% 7/1/20 ........................... 150,000 151,347
Montana State Long Range Building Program
Series C 5.00% 8/1/17 .............................. 100,000 96,240
Puerto Rico Commonwealth 5.375% 7/1/25 ............... 50,000 49,155
---------
582,813
---------
Higher Education Revenue Bonds - 36.79%
Montana State Board of Regents - University of
Montana Series F (MBIA) 5.75% 5/15/24 .............. 400,000 409,196
Montana State Higher Education Student
Assistance Corporation - Student Loan -
Series B 6.40% 12/1/32 ............................. 600,000 612,072
Puerto Rico Industrial Tourist Educational Medical
& Environmental Control Facilities -
Ana G. Mendez University System Project
5.375% 2/1/19 ...................................... 150,000 143,820
University of Puerto Rico Revenue Series O
5.375% 6/1/20 ...................................... 175,000 175,182
---------
1,340,270
---------
Hospital Revenue Bonds - 2.82%
Montana State Health Facilities Authority Health
Care Master Loan Program (Marcus Daly)
Series A 6.00% 8/1/20 .............................. 100,000 102,620
---------
102,620
---------
Housing Revenue Bonds - 2.85%
Montana State Board of Housing - Single Family
Mortgage - Series A1 6.00% 6/1/16 .................. 100,000 103,793
---------
103,793
---------
Pollution Control Revenue Bonds - 9.75%
Forsyth Pollution Control Revenue
Pacificorp Project 4.30% 1/1/18 .................... 150,000 150,000
Forsyth Pollution Control (Montana Power
Company) Series A (AMBAC)
6.125% 5/1/23 ...................................... 100,000 103,688
<PAGE>
Principal Market
Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Pollution Control Revenue Bonds (continued)
Montana State Water Pollution Control
Series B 5.60% 7/15/20 ............................. $ 100,000 $ 101,653
----------
355,341
----------
Power Authority Revenue Bonds - 3.99%
Puerto Rico Electric Power Authority Series Z
5.25% 7/1/21 ....................................... 150,000 145,193
----------
145,193
----------
Transportation Revenue Bonds - 6.49%
Billings Airport Revenue
(MBIA) 5.55% 7/1/09 ................................ 125,000 130,026
Puerto Rico Commonwealth Highway & Transportation
Authority Highway Revenue
(MBIA) 5.50% 7/1/15 ................................ 100,000 106,479
----------
236,505
----------
Other Revenue Bonds - 2.60%
Virgin Islands Public Finance Authority Revenue
Sub Lien Funded Loan Notes
Series E 5.875% 10/1/18 ............................ 100,000 94,932
----------
94,932
----------
Total Municipal Bonds
(cost $3,456,680) .................................. 3,551,022
----------
Total Market Value of Securities - 97.47%
(cost $3,456,680) .................................. 3,551,022
Receivables and Other Assets
Net of Liabilities - 2.53% ......................... 92,335
----------
Net Assets Applicable to 644,331
Shares Outstanding - 100.00% ....................... $3,643,357
==========
Net Asset Value - Delaware
Montana Municipal Bond Fund A Class
($1,961,498 / 346,849 Shares) ...................... $5.66
-----
Net Asset Value - Delaware
Montana Municipal Bond Fund B Class
($1,338,236 / 236,703 Shares) ...................... $5.65
-----
Net Asset Value - Delaware
Montana Municipal Bond Fund C Class
($343,623 / 60,779 Shares) ......................... $5.65
=====
26
<PAGE>
Statements of Net Assets (continued)
Delaware Montana Municipal Bond Fund
--------------------------------------------------------------------------------
Components of Net Assets at August 31, 2000:
Shares of beneficial interest
(unlimited authorization - no par) ....................... $ 3,543,395
Distributions in excess of
net investment income .................................... (1,924)
Accumulated net realized
gain on investments ...................................... 7,544
Net unrealized appreciation of investments ................. 94,342
-----------
Total net assets ........................................... $ 3,643,357
===========
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
Net Asset Value and Offering Price per Share - Delaware
Montana Municipal Bond Fund
Net asset value A Class (A) ........................................ $5.66
Sales charge (3.75% of offering price or 3.89% of
amount invested per share) (B) ................................... 0.22
-----
Offering price ..................................................... $5.88
=====
------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
See accompanying notes
27
<PAGE>
Statements of Net Assets (continued)
DELAWARE TAX-FREE NORTH DAKOTA FUND
-----------------------------------
Principal Market
August 31, 2000 Amount Value
--------------------------------------------------------------------------------
Municipal Bonds - 98.79%
General Obligation Bonds - 1.14%
Grand Forks Sewer Reserve 6.70% 6/1/07 ........... $270,000 $ 274,347
---------
274,347
---------
Higher Education Revenue Bonds - 7.30%
Burleigh County North Dakota University Facility
Revenue University of Mary Project
5.625% 12/1/15 .................................. 1,000,000 972,510
North Dakota State University Housing and
Auxiliary Facility 6.30% 4/1/07 ................. 250,000 259,138
North Dakota State University Housing and
Auxiliary Facility 6.50% 4/1/12 ................. 500,000 517,485
---------
1,749,133
---------
Hospital Revenue Bonds - 31.96%
Cando, North Dakota Nursing Facility Revenue -
Towner County Medical Center Project
7.125% 8/1/22 ................................... 1,000,000 996,060
Carrington, North Dakota Health Facility Revenue
for Carrington Health Center
6.25% 11/15/15 .................................. 500,000 509,515
Cass County, North Dakota Health Facility
Revenue for Catholic Health - Villa Nazareth
Project 6.25% 11/15/14 .......................... 1,000,000 1,020,520
Fargo Hospital Facility St. Luke's Hospital
Series 1992 6.50% 6/1/15 ........................ 1,000,000 1,041,510
Grand Forks Health Care System Revenue -
Altru Health System Obligated Group
7.125% 8/15/24 .................................. 1,005,000 1,024,427
Grand Forks, North Dakota Senior Housing
Revenue 4000 Valley Square Project
6.25% 12/1/34 ................................... 2,000,000 1,500,000
Grand Forks, United Hospital Obligated Group
(MBIA) 6.125% 12/1/14 ........................... 225,000 235,820
Grand Forks, United Hospital Obligated Group
(MBIA) 6.25% 12/1/19 ............................ 250,000 260,295
Killdeer, North Dakota Nursing Care Revenue -
Hill Top Home of Comfort 6.00% 11/1/12 .......... 780,000 770,671
Valley City, North Dakota Congregate Housing
Revenue - Bridgeview Estates Project
7.25% 8/1/22 .................................... 300,000 301,251
---------
7,660,069
---------
<PAGE>
Principal Market
Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Housing Revenue Bonds - 28.17%
Minot Single Family Mortgage
7.70% 8/1/10 ...................................... $105,000 $ 108,698
North Dakota Housing Finance Authority Single
Family Mortgage Series A 6.30% 7/1/16 ............. 1,665,000 1,734,614
North Dakota Housing Finance Authority Single
Family Mortgage 6.25% 1/1/17 ...................... 1,975,000 2,042,012
North Dakota Single Housing Finance Agency
Single Family Mortgage Series A (FHA)
6.75% 7/1/12 ...................................... 130,000 134,904
North Dakota State Housing Finance Agency
Revenue Multifamily (FNMA)
6.125% 12/1/15 .................................... 500,000 522,035
North Dakota State Housing Finance Agency
Revenue Multifamily (FNMA)
6.15% 12/1/17 ..................................... 1,300,000 1,351,324
North Dakota State Housing Finance Authority
Single Family Mortgage Series A
6.95% 7/1/12 ...................................... 220,000 228,708
North Dakota State Housing Finance Agency
Single Family Mortgage Series E (FNMA)
6.30% 1/1/15 ...................................... 605,000 629,684
---------
6,751,979
---------
Industrial Development Revenue Bonds - 2.15%
Mercer County Pollution Control Otter Tail
Power Company Project 6.90% 2/1/19 ................. 500,000 514,510
---------
514,510
---------
Power Authority Revenue Bonds - 11.21%
Mercer County Pollution Control Revenue
Montana - Dakota Utilities Company Project
(FGIC) 6.65% 6/1/22 ............................... 500,000 524,820
Mercer County Pollution Control Revenue For
Basin Electric Revenue 6.05% 1/1/19 ............... 1,000,000 1,033,780
+Puerto Rico Electric Power Authority Revenue
Inverse Floater ROLS Series DD (FSA)
4.79% 7/1/19 ...................................... 900,000 727,362
Puerto Rico Electric Power Authority Series EE
4.75% 7/1/24 ...................................... 450,000 401,621
---------
2,687,583
---------
*Pre-Refunded Bonds - 4.08%
Bismarck Hospital Alexius Medical Center
(AMBAC) 6.90% 5/1/06-01 ............................ 500,000 518,065
Burleigh County University Facilities University
of Mary Project 7.125% 12/1/11-01 .................. 250,000 260,455
Fargo Park District Revenue
7.25% 11/1/11-00 ................................... 200,000 200,840
---------
979,360
---------
28
<PAGE>
Statements of Net Assets (continued)
Principal Market
Delaware Tax-Free North Dakota Fund Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Transportation Revenue Bond - 6.24%
Puerto Rico Commonwealth Highway &
Transportation Authority Series Y
5.50% 7/1/26 .................................... $1,500,000 $ 1,495,768
-----------
1,495,768
-----------
Other Revenue Bonds - 6.54%
North Dakota Building Authority Revenue (FSA)
6.10% 12/1/16 ................................... 1,480,000 1,525,954
North Dakota State Student Loan
(AMBAC) 7.00% 7/1/05 ............................ 40,000 40,714
---------
1,566,668
---------
Total Municipal Bonds
(cost $23,554,559) .............................. 23,679,417
----------
Number
of Shares
Short-Term Investments - 0.48%
Wells Fargo National Tax-Free
Money Market Fund ............................... 116,182 116,182
----------
Total Short-Term Investments
(cost $116,182) ................................. 116,182
----------
Total Market Value of Securities - 99.27%
(cost $23,670,741) ............................... 23,795,599
Receivables and Other Assets
Net of Liabilities - 0.73% ...................... 174,198
-----------
Net Assets Applicable to 2,253,653
Shares Outstanding 100.00% ...................... $23,969,797
===========
Net Asset Value - Delaware Tax-Free
North Dakota Fund A Class
($22,733,245 / 2,137,380 Shares) ................ $10.64
------
Net Asset Value - Delaware Tax-Free
North Dakota Fund B Class
($909,963 / 85,556 Shares) ...................... $10.64
------
Net Asset Value - Delaware Tax-Free
North Dakota Fund C Class
($326,589 / 30,717 Shares) ...................... $10.63
------
<PAGE>
--------------------------------------------------------------------------------
Components of Net Assets at August 31, 2000:
Shares of beneficial interest
(unlimited authorization - no par) ........................ $23,924,695
Accumulated net realized
loss on investments ....................................... (79,756)
Net unrealized appreciation of investments ................. 124,858
------------
Total net assets ........................................... $23,969,797
============
------------
* For Pre-Refunded Bonds, the stated maturity is followed by
the year in which the bond is pre-refunded.
+ Inverse Floater represents a security that pays interest at a
rate that increases (decreases) with a decrease (increase) in
a specific index. Interest rate disclosed is in effect as of
August 31, 2000.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by the Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
Net Asset Value and Offering Price per Share -
Delaware Tax-Free North Dakota Fund
Net asset value A Class (A) ......................................... $10.64
Sales charge (3.75% of offering price, or
3.85% of amount invested per share) (B) .......................... 0.41
--------
Offering price ...................................................... $11.05
========
------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
See accompanying notes
29
<PAGE>
Statements of Net Assets (continued)
DELAWARE TAX-FREE OREGON INSURED FUND
-------------------------------------
Principal Market
August 31, 2000 Amount Value
--------------------------------------------------------------------------------
Municipal Bonds - 98.31%
Certificates of Participation - 5.32%
Oregon State Department
Administrative Services Certificates of
Participation - Series A (AMBAC)
5.00% 5/1/24 ..................................... $1,800,000 $ 1,690,632
-----------
1,690,632
-----------
General Obligation Bonds - 24.21%
Clackamas County Oregon School District
(FGIC) 4.80% 6/1/18 .............................. 1,200,000 1,106,376
** Columbia County Oregon School District
(FGIC) 5.495% 6/1/17 .............................. 1,000,000 403,310
Hermiston General Obligation Water Bonds
(AMBAC) 6.20% 8/1/24 ............................. 500,000 513,170
Josephine County Oregon
(AMBAC) 4.875% 6/1/18 ............................ 1,000,000 931,250
Lane County School District #19 (Springfield)
(FGIC) 6.00% 10/15/14 ............................ 500,000 549,615
Lincoln County School District
(FGIC) 5.25% 6/15/12 ............................. 1,450,000 1,484,699
Malheur County Jail (MBIA)
6.30% 12/1/12 .................................... 500,000 532,175
Multnomah County School District #3
Park Rose (FGIC) 5.50% 12/1/11 ................... 500,000 513,715
North Unit Irrigation District
(MBIA) 5.75% 6/1/16 .............................. 1,000,000 1,026,890
Portland (MBIA) 5.75% 6/1/15 ...................... 500,000 512,845
** Umatilla County Oregon School District #6R
Umatilla (AMBAC) 5.666% 12/15/22 ................. 200,000 57,564
Washington County School District (Sherwood)
(FSA) #88J 6.10% 6/1/12 .......................... 65,000 68,284
---------
7,699,893
---------
Higher Education Revenue Bonds - 13.83%
Central Oregon Community College District
(FGIC) 5.90% 6/1/09 ............................... 750,000 780,705
Oregon Health and Education Authority for
Lewis & Clark College (MBIA)
6.125% 10/1/24 .................................... 1,055,000 1,091,883
Oregon Health and Education Authority for
Reed College (MBIA) 5.375% 7/1/25 ................. 500,000 492,880
** Oregon Health Sciences University Revenue
(MBIA) 5.656% 7/1/21 .............................. 6,500,000 2,033,590
---------
4,399,058
---------
Hospital Revenue Bonds - 3.31%
Western Lane Hospital District for Sisters of
St. Joseph Peace Hospital (MBIA)
5.875% 8/1/12 ..................................... 1,000,000 1,053,590
---------
1,053,590
---------
<PAGE>
Principal Market
Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Housing Revenue Bonds - 3.50%
Oregon Health, Housing, Educational and
Cultural Facilities Authority for Pier Park
Project (GNMA) 6.05% 4/1/18 ...................... $1,095,000 $ 1,114,064
-----------
1,114,064
-----------
Power Authority Revenue Bonds - 3.51 %
Central Lincoln Peoples Utility District
(AMBAC) 5.75% 1/1/15 ............................. 500,000 511,100
+Puerto Rico Electric Power Authority Revenue
Series DD Inverse Floater ROLS (FSA)
4.79% 7/1/19 ..................................... 750,000 606,135
---------
1,117,235
---------
*Pre-Refunded Bonds - 25.02%
Chemeketa Community College (FGIC)
5.80% 6/1/12-06 .................................. 1,500,000 1,595,160
Eugene Electric Revenue Series C (MBIA)
5.80% 8/1/22-04 .................................. 1,250,000 1,320,775
Lane County School District #19 (Springfield)
(MBIA) 6.30% 10/15/14-04 ......................... 500,000 538,720
Multnomah County School District #39 Corbett
(MBIA) 6.00% 12/1/13-04 .......................... 500,000 528,790
Oregon State Department Administrative Services
Certificates of Participation - Series A
(AMBAC) 5.80% 5/1/24-07 .......................... 1,000,000 1,076,020
Portland Sewer System Revenue (FSA)
6.25% 6/1/15-04 .................................. 1,000,000 1,070,090
Tillamook County (FGIC) 6.25% 1/1/14-05 ........... 250,000 269,350
Umatilla Pendleton School District (AMBAC)
#016R 6.00% 7/1/14-04 ............................ 500,000 531,315
Washington County Education Service (MBIA)
7.10% 6/1/25-05 .................................. 700,000 777,735
Washington County School District (Sherwood)
(FSA) #88J 6.10% 6/1/12-05 ....................... 235,000 251,168
---------
7,959,123
---------
Transportation Revenue Bonds - 4.70%
Port of Portland Airport Revenue for Portland
International Airport (FGIC)
5.625% 7/1/26 .................................... 1,500,000 1,494,795
---------
1,494,795
---------
30
<PAGE>
Statements of Net Assets (continued)
Principal Market
Delaware Tax-Free Oregon Insured Fund Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Water & Sewer Revenue Bonds - 14.91%
Beaverton Water Revenue (FSA)
6.125% 6/1/14 ..................................... $500,000 $ 522,720
Klamath Falls Water Revenue (FSA)
6.10% 6/1/14 ...................................... 500,000 522,295
Portland Oregon Sewer System Revenue
(MBIA) 4.50% 6/1/18 ............................... 1,855,000 1,656,812
Salem Water & Sewer Revenue (MBIA)
5.50% 6/1/14 ...................................... 1,000,000 1,021,590
Salem Water & Sewer Revenue (MBIA)
5.625% 6/1/16 ..................................... 1,000,000 1,018,279
----------
4,741,696
----------
Total Municipal Bonds
(cost $30,597,013) 31,270,086
----------
Number
of Shares
Short-Term Investments - 0.36%
Wells Fargo National Tax-Free
Money Market Fund ................................. 113,135 113,135
-------
Total Short-Term Investments
(cost $113,135) ................................... 113,135
-------
Total Market Value of Securities - 98.67%
(cost $30,710,148) ................................ 31,383,221
Receivables and Other Assets
Net of Liabilities - 1.33% ........................ 421,999
-----------
Net Assets Applicable to 3,210,275
Shares Outstanding - 100.00% ...................... $31,805,220
===========
Net Asset Value - Delaware Tax-Free
Oregon Insured Fund A Class
($22,711,786 / 2,292,806 Shares) $9.91
...................................................... -----
Net Asset Value - Delaware Tax-Free
Oregon Insured Fund B Class
($7,484,716 / 755,283 Shares) ..................... $9.91
-----
Net Asset Value - Delaware Tax-Free
Oregon Insured Fund C Class
($1,608,718 / 162,186 Shares) ..................... $9.92
-----
<PAGE>
--------------------------------------------------------------------------------
Components of Net Assets at August 31, 2000 :
Shares of beneficial interest
(unlimited authorization - no par) ................. $31,964,274
Accumulated net realized
loss on investments ................................ (832,127)
Net unrealized appreciation
of investments ..................................... 673,073
-----------
Total net assets ................................... $31,805,220
===========
------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
the bond is pre-refunded.
** Zero Coupon Bond - The interest rate shown is the effective yield as of
August 31, 2000.
+Inverse Floater represents a security that pays interest at a rate that
increases (decreases) with a decrease (increase) in a specific index.
Interest rate disclosed is in effect as of August 31, 2000.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by the Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
Net Asset Value and Offering Price per Share -
Delaware Tax-Free Oregon Insured Fund
Net asset value A Class (A) ........................... $9.91
Sales charge (3.75% of offering price, or
3.94% of amount invested per share) (B) ............ 0.39
------
Offering price ........................................ $10.30
======
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
See accompanying notes
31
<PAGE>
Statements of Net Assets (continued)
DELAWARE TAX-FREE WISCONSIN FUND
--------------------------------
Principal Market
August 31, 2000 Amount Value
--------------------------------------------------------------------------------
Municipal Bonds - 98.28%
Higher Education Revenue Bonds - 2.44%
Madison Community Development Authority
Revenue - Edgewood College
6.25% 4/1/14 ....................................... $500,000 $520,345
Puerto Rico Educational Facility Revenue -
Polytechnic University 6.50% 8/1/24 ................ 280,000 292,785
--------
813,130
--------
Hospital Revenue Bonds - 0.59%
Kaukauna Housing Authority Revenue -
St. Paul Home Inc. 6.10% 9/1/07 .................... 200,000 195,562
--------
195,562
--------
Housing Revenue Bonds - 25.52%
Dane County Multifamily Housing Revenue -
Forest Harbor Apartment Project
5.85% 7/1/11 ....................................... 125,000 126,435
Dane County Multifamily Housing Revenue -
Forest Harbor Apartment Project
5.90% 7/1/12 ....................................... 125,000 125,878
Grant County Housing Authority Revenue
Refunding - Orchard Manor
5.35% 7/1/26 ....................................... 350,000 331,254
Green Bay Housing Authority Multifamily Housing
Revenue - Moraine Limited - Series A
(FHA) 6.15% 12/1/30 ................................ 1,000,000 1,033,500
La Crosse Housing Authority Washburn Project
6.375% 10/1/16 ..................................... 100,000 95,878
La Crosse Housing Authority Washburn Project
6.50% 10/1/26 ...................................... 250,000 235,950
Milwaukee Redevelopment Authority Multifamily
Housing 6.30% 8/1/38 ............................... 1,455,000 1,481,656
New Berlin Multifamily Housing Authority
Revenue - Pinewood Creek Project
7.125% 5/1/24 ...................................... 500,000 512,865
Puerto Rico Housing Authority Single Family
Mortgage Revenue 6.85% 10/15/23 .................... 625,000 645,038
Puerto Rico Housing Bank & Finance Agency
Single Family Mortgage Revenue (GNMA)
6.25% 4/1/29 ....................................... 650,000 672,562
Waukesha Housing Westgrove Wood Project
(GNMA) 6.00% 12/1/31 ............................... 1,500,000 1,514,385
Waukesha Wisconsin Redevelopment Authority
Housing Revenue- Senior Housing
Presbyterian Homes 7.50% 6/1/25 .................... 1,250,000 1,258,350
Wauwatosa Multifamily Housing Revenue -
Harwood Place, Inc. 5.75% 12/1/08 .................. 480,000 480,653
---------
8,514,404
---------
<PAGE>
Principal Market
Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
Industrial Development Revenue Bonds - 15.31%
Hartford Community Development Authority
Lease Revenue 6.15% 12/1/09 ........................ $240,000 $ 253,205
Milwaukee Redevelopment Authority Revenue -
Goodwill Industries, Inc.
6.35% 10/1/09 ...................................... 2,000,000 2,053,440
Omro Community Development Authority
5.875% 12/1/11 ..................................... 300,000 311,970
Puerto Rico Industrial Medical Environmental
Revenue - PepsiCo Project
6.25% 11/15/13 ..................................... 1,100,000 1,150,446
Two Rivers Community Development Authority
Revenue Architectural Forest Products
6.35% 12/15/12 ..................................... 250,000 244,355
West Allis Community Development Authority
Revenue - Poblocki Investments, Ltd.
5.90% 5/1/03 (LOC: Firstar Bank
Milwaukee, AMT) .................................... 1,080,000 1,095,217
---------
5,108,633
---------
Lease/Certificates of Participation - 16.24
Cudahy Community Development Authority
Revenue 6.00% 6/1/11 ............................... 1,000,000 1,044,180
De Forest Redevelopment Lease Revenue
6.25% 2/1/18 ....................................... 1,000,000 1,031,670
Little Chute Community Development Lease
Revenue 5.625% 3/1/19 .............................. 680,000 678,830
Madison Community Development Authority,
Monona Terrace Community Project
5.80% 3/1/05 ....................................... 125,000 131,638
Madison Community Development Authority,
Monona Terrace Community Project
5.90% 3/1/06 ....................................... 365,000 385,852
Madison Community Development Authority,
Monona Terrace Community Project
6.10% 3/1/10 ....................................... 1,500,000 1,579,710
Redgranite Wisconsin Community Development
Authority Revenue 5.85% 3/1/18 ..................... 605,000 564,858
---------
5,416,738
---------
Power Authority Revenue Bonds - 7.32%
Guam Power Authority Revenue Bonds,
99A 5.125% 10/1/29 ................................. 1,000,000 916,130
Puerto Rico Electric Power Authority Revenue
Series U 6.00% 7/1/14 .............................. 1,450,000 1,523,805
---------
2,439,935
---------
*Pre-Refunded/Escrowed to Maturity Bonds - 16.32%
Puerto Rico Municipal Finance Authority
(FSA) 6.00% 7/1/14-04 .............................. 1,800,000 1,944,108
Puerto Rico Telephone Authority Revenue
5.75% 1/1/11-02 .................................... 285,000 293,738
32
<PAGE>
Statements of Net Assets (continued)
Principal Market
Delaware Tax-Free Wisconsin Fund Amount Value
--------------------------------------------------------------------------------
Municipal Bonds (continued)
*Pre-Refunded/Escrowed to Maturity Bonds (continued)
Southeast Wisconsin Professional Baseball
Park District Sales Tax Revenue (MBIA)
5.80% 12/15/26-07 .................................. $1,000,000 $ 1,076,740
Superior Redevelopment Authority Revenue -
Superior Memorial Hospital (FHA)
5.80% 5/1/10-02 .................................... 250,000 260,240
Virgin Islands Public Finance Authority
(Escrowed to Maturity) 7.30% 10/1/18 ............... 700,000 853,580
Wisconsin Housing Finance Authority
(FHA) 6.10% 6/1/21-17 .............................. 960,000 1,015,496
---------
5,443,902
---------
Other Revenue Bonds - 14.54%
** Southeast Wisconsin Professional Baseball
Park District Lease Certificates (MBIA)
5.544% 12/15/15 .................................... 1,000,000 434,640
** Southeast Wisconsin Professional Baseball
Park District Lease Certificates (MBIA)
5.628% 12/15/16 .................................... 1,115,000 453,838
** Southeast Wisconsin Professional Baseball
Park District Sales Tax Revenue (MBIA)
5.873% 12/15/24 .................................... 1,500,000 372,630
** Southeast Wisconsin Professional Baseball
Park District Sales Tax Revenue (MBIA)
5.886% 12/15/25 .................................... 1,250,000 292,488
Virgin Islands Public Finance Authority
Revenue Sub Lien Funded Loan Notes
Series E 5.875% 10/1/18 ............................ 1,400,000 1,329,048
Wisconsin Central District Tax Revenue -
Insured Jr. Dedicated Tax Revenue Bonds,
98 A (FSA) 5.25% 12/15/23 .......................... 2,000,000 1,965,540
----------
4,848,184
----------
Total Municipal Bonds
(cost $32,096,686) 32,780,488
----------
Number
of Shares
Short-Term Investments - 0.48%
Wells Fargo National Tax-Free
Money Market Fund .................................. 161,041 161,041
-----------
Total Short-Term Investments
(cost $161,041) .................................... 161,041
-----------
Total Market Value of Securities - 98.76%
(cost $32,257,727) ................................. 32,941,529
Receivables and Other Assets
Net of Liabilities - 1.24% ......................... 413,543
-----------
Net Assets Applicable to 3,508,469 Shares
Outstanding - 100.00% .............................. $33,355,072
===========
<PAGE>
--------------------------------------------------------------------------------
Net Asset Value - Delaware Tax-Free
Wisconsin Fund A Class
($28,736,973 / 3,022,883 Shares ) .................. $9.51
-----
Net Asset Value - Delaware Tax-Free
Wisconsin Fund B Class
($3,243,281 / 341,411 Shares ) ..................... $9.50
-----
Net Asset Value - Delaware Tax-Free
Wisconsin Fund C Class
($1,374,818 / 144,175 Shares ) ..................... $9.54
-----
Components of Net Assets at August 31, 2000:
Shares of beneficial interest
(unlimited authorization - no par ) ................ $33,924,495
Accumulated net realized
loss on investments ................................ (1,253,225)
Net unrealized appreciation
of investments ..................................... 683,802
-----------
Total net assets .................................... $33,355,072
===========
------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
the bond is pre-refunded.
**Zero Coupon Bond - The interest rate shown is the effective yield as of
August 31, 2000.
Summary of Abbreviations:
AMT - Subject to Alternative Minimum Tax
FHA - Insured by the Federal Housing Authority
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
LOC - Letter of Credit
MBIA - Insured by the Municipal Bond Insurance Association
Net Asset Value and Offering Price per Share -
Delaware Tax-Free Wisconsin Fund
Net asset value A class (A) ......................... $9.51
Sales charge (3.75% of offering price
or 3.89% of amount invested
per share) (B) ..................................... 0.37
-----
Offering price ...................................... $9.88
=====
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
See accompanying notes
33
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
Delaware
Delaware Delaware Delaware Tax-Free
Tax-Free Tax-Free Tax-Free Missouri
Idaho Iowa Kansas Insured
Fund Fund Fund Fund
----------------------------------------------------------------------------------------------
Year Ended
8/31/00 8/31/00 8/31/00 8/31/00
<S> <C> <C> <C> <C>
Investment Income:
Interest ....................... $ 3,136,544 $ 2,375,574 $ 924,587 $ 2,948,783
----------- ----------- ----------- -----------
Expenses:
Management fees ................ 281,064 228,703 82,143 249,477
Distribution expense ........... 230,429 145,634 71,448 202,723
Dividend disbursing and transfer
agent fees and expenses ..... 40,638 52,204 22,983 51,201
Accounting and administration .. 24,829 18,189 5,767 20,534
Reports and statements
to shareholders ............. 31,247 26,694 15,139 10,950
Professional fees .............. 30,222 30,394 6,138 30,162
Registration fees .............. 2,000 5,200 2,600 1,682
Custodian fees ................. 11,230 3,824 3,001 6,847
Taxes (other than taxes
on income) .................. 4,050 6,064 1,325 675
Trustees' fees ................. 964 1,456 1,128 1,561
Other .......................... 1,968 1,346 8,823 4,369
----------- ----------- ----------- -----------
658,641 519,708 220,495 580,181
Less expenses absorbed
or waived ................... (45,123) (62,226) (35,858) --
Less expenses paid indirectly .. (1,177) (956) (346) (1,148)
----------- ----------- ----------- -----------
Total operating expenses ....... 612,341 456,526 184,291 579,033
Interest expense ............... -- 3,801 850 14,744
----------- ----------- ----------- -----------
Total expenses ................. 612,341 460,327 185,141 593,777
----------- ----------- ----------- -----------
Net Investment Income .......... 2,524,203 1,915,247 739,446 2,355,006
----------- ----------- ----------- -----------
Net Realized and Unrealized
Gain (Loss) on Investments:
Net realized gain (loss)
on investments .............. (692,218) (216,374) (296,860) (87,531)
Net change in unrealized
appreciation/depreciation of
investments ................. (716,378) 399,990 89,369 10,088
----------- ----------- ----------- -----------
Net Realized and Unrealized
Gain (Loss) on
Investments ................. (1,408,596) 183,616 (207,491) (77,443)
----------- ----------- ----------- -----------
Net Increase in
Net Assets Resulting
from Operations ............. $ 1,115,607 $ 2,098,863 $ 531,955 $ 2,277,563
=========== =========== =========== ===========
</TABLE>
<PAGE>
[RESTUBBED]
<TABLE>
<CAPTION>
Delaware Delaware Delaware
Montana Tax-Free Tax-Free Delaware
Municipal North Oregon Tax-Free
Bond Dakota Insured Wisconsin
Fund Fund Fund Fund
----------------------------------------------------------------------------------------------
11/2/99*
to Year Ended
8/31/00 8/31/00 8/31/00 8/31/00
<S> <C> <C> <C> <C>
Investment Income:
Interest ....................... $ 103,532 $ 1,604,025 $ 1,907,886 $ 2,034,237
----------- ----------- ----------- -----------
Expenses:
Management fees ................ 11,293 141,575 167,234 187,729
Distribution expense ........... 11,467 75,243 155,162 118,713
Dividend disbursing and transfer
agent fees and expenses ..... 3,784 21,832 29,514 40,050
Accounting and administration .. 829 10,429 13,565 13,771
Reports and statements
to shareholders ............. 1,050 5,216 14,668 22,665
Professional fees .............. 1,554 10,465 15,802 16,205
Registration fees .............. 1,775 1,750 200 7,750
Custodian fees ................. 383 3,724 5,883 4,917
Taxes (other than taxes
on income) .................. 467 698 139 4,225
Trustees' fees ................. 319 2,133 1,283 1,839
Other .......................... 718 4,238 4,404 3,620
----------- ----------- ----------- -----------
33,639 277,303 407,854 421,484
Less expenses absorbed
or waived ................... (11,814) -- (52,159) (45,838)
Less expenses paid indirectly .. (216) (592) (769) (785)
----------- ----------- ----------- -----------
Total operating expenses ....... 21,609 276,711 354,926 374,861
Interest expense ............... -- -- -- 7,047
----------- ----------- ----------- -----------
Total expenses ................. 21,609 276,711 354,926 381,908
----------- ----------- ----------- -----------
Net Investment Income .......... 81,923 1,327,314 1,552,960 1,652,329
----------- ----------- ----------- -----------
Net Realized and Unrealized
Gain (Loss) on Investments:
Net realized gain (loss)
on investments .............. 7,544 (33,235) (239,493) (745,668)
Net change in unrealized
appreciation/depreciation of
investments ................. 94,342 (490,273) 429,851 514,555
----------- ----------- ----------- -----------
Net Realized and Unrealized
Gain (Loss) on
Investments ................. 101,886 (523,508) 190,358 (231,113)
----------- ----------- ----------- -----------
Net Increase in
Net Assets Resulting
from Operations ............. $ 183,809 $ 803,806 $ 1,743,318 $ 1,421,216
=========== =========== =========== ===========
</TABLE>
----------
*Date of commencement of operations.
See accompanying notes
34
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Delaware Tax-Free Delaware Tax-Free
Idaho Fund Iowa Fund
---------------------------------------------------------------------------------------------------
Year Year
Ended Ended
8/31/00 8/31/99 8/31/00 8/31/99
Increase (Decrease) in Net Assets
from Operations:
<S> <C> <C> <C> <C>
Net investment income ............... $ 2,524,203 $ 2,362,432 $ 1,915,247 $ 1,928,680
Net realized gain (loss)
on investments ................... (692,218) 3,735 (216,374) 4,469
Net change in unrealized
appreciation/depreciation
of investments ................... (716,378) (3,206,434) 399,990 (2,113,084)
------------ ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations . 1,115,607 (840,267) 2,098,863 (179,935)
------------ ----------- ----------- -----------
Distributions to Shareholders from:
Net investment income:
A Class .......................... (1,939,836) (1,935,872) (1,696,047) (1,719,461)
B Class .......................... (431,046) (335,490) (173,059) (162,016)
C Class .......................... (153,321) (87,683) (46,141) (47,203)
Net realized gain on investments:
A Class .......................... -- -- -- --
B Class .......................... -- -- -- --
C Class .......................... -- -- -- --
------------ ----------- ----------- -----------
(2,524,203) (2,359,045) (1,915,247) (1,928,680)
------------ ----------- ----------- -----------
Capital Share Transactions:
Proceeds from shares sold:
A Class .......................... 5,863,998 9,856,564 2,070,371 3,458,664
B Class .......................... 1,446,362 4,177,758 353,088 1,357,796
C Class .......................... 1,379,931 2,255,562 184,552 552,911
Net asset value of shares issued upon
reinvestment of distributions from
net investment income and net
realized gain on investments:
A Class .......................... 1,278,316 1,311,933 1,031,221 1,076,296
B Class .......................... 299,810 223,743 116,259 107,503
C Class .......................... 128,899 71,289 30,753 31,942
------------ ----------- ----------- -----------
10,397,316 17,896,849 3,786,244 6,585,112
------------ ----------- ----------- -----------
Cost of shares repurchased:
A Class .......................... (15,599,767) (4,222,098) (4,942,722) (4,250,442)
B Class .......................... (1,438,763) (1,125,972) (1,468,301) (557,678)
C Class .......................... (1,244,581) (475,466) (402,596) (444,977)
------------ ----------- ----------- -----------
(18,283,111) (5,823,536) (6,813,619) (5,253,097)
------------ ----------- ----------- -----------
Increase (decrease) in net assets
derived from capital share
transactions ..................... (7,885,795) 12,073,313 (3,027,375) 1,332,015
------------ ----------- ----------- -----------
Net Increase (Decrease) in
Net Assets ....................... (9,294,391) 8,874,001 (2,843,759) (776,600)
Net Assets:
Beginning of period ................. 57,909,876 49,035,875 43,703,122 44,479,722
------------ ----------- ----------- -----------
End of period ....................... $ 48,615,485 $57,909,876 $40,859,363 $43,703,122
============ =========== =========== ===========
</TABLE>
<PAGE>
[RESTUBBED]
<TABLE>
<CAPTION>
Delaware Tax-Free Delaware Tax-Free
Kansas Fund Missouri Insured Fund
--------------------------------------------------------------------------------------------------------
Year Year
Ended Ended
8/31/00 8/31/99 8/31/00 8/31/99
Increase (Decrease) in Net Assets
from Operations:
<S> <C> <C> <C> <C>
Net investment income ............... $ 739,446 $ 798,618 $ 2,355,006 $ 2,502,675
Net realized gain (loss)
on investments ................... (296,860) (39,464) (87,531) 71,644
Net change in unrealized
appreciation/depreciation
of investments ................... 89,369 (743,441) 10,088 (2,815,501)
------------ ----------- ----------- ------------
Net increase (decrease) in net
assets resulting from operations . 531,955 15,713 2,277,563 (241,182)
------------ ----------- ----------- ------------
Distributions to Shareholders from:
Net investment income:
A Class .......................... (547,042) (605,332) (1,927,970) (2,067,634)
B Class .......................... (185,735) (178,626) (417,005) (427,632)
C Class .......................... (13,849) (7,598) (10,031) (7,409)
Net realized gain on investments:
A Class .......................... -- (38,685) -- --
B Class .......................... -- (12,054) -- --
C Class .......................... -- (373) -- --
------------ ----------- ----------- ------------
(746,626) (842,668) (2,355,006) (2,502,675)
------------ ----------- ----------- ------------
Capital Share Transactions:
Proceeds from shares sold:
A Class .......................... 853,139 2,372,007 3,547,699 1,609,116
B Class .......................... 335,246 1,912,350 610,801 511,000
C Class .......................... 209,997 354,261 245,055 172,422
Net asset value of shares issued upon
reinvestment of distributions from
net investment income and net
realized gain on investments:
A Class .......................... 281,972 317,555 952,977 1,064,643
B Class .......................... 131,047 131,928 249,057 257,250
C Class .......................... 12,137 6,220 6,302 4,334
------------ ----------- ----------- ------------
1,823,538 5,094,321 5,611,891 3,618,765
------------ ----------- ----------- ------------
Cost of shares repurchased:
A Class .......................... (2,094,780) (3,158,135) (8,448,629) (5,087,919)
B Class .......................... (1,433,535) (596,102) (1,371,685) (970,200)
C Class .......................... (314,198) (15,377) (143,816) (44,506)
------------ ----------- ----------- ------------
(3,842,513) (3,769,614) (9,964,130) (6,102,625)
------------ ----------- ----------- ------------
Increase (decrease) in net assets
derived from capital share
transactions ..................... (2,018,975) 1,324,707 (4,352,239) (2,483,860)
------------ ----------- ----------- ------------
Net Increase (Decrease) in
Net Assets ....................... (2,233,646) 497,752 (4,429,682) (5,227,717)
Net Assets:
Beginning of period ................. 16,866,410 16,368,658 53,139,881 58,367,598
------------ ----------- ----------- ------------
End of period ....................... $ 14,632,764 $16,866,410 $48,710,199 $ 53,139,881
============ =========== =========== ============
</TABLE>
See accompanying notes
35
<PAGE>
Statements of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Delaware
Montana Municipal Delaware Tax-Free
Bond Fund North Dakota Fund
------------------------------------------------------------------------------------
11/2/99* Year
to Ended
8/31/00 8/31/00 8/31/99
<S> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations:
Net investment income ............... $ 81,923 $ 1,327,314 $ 1,455,799
Net realized gain (loss)
on investments ................... 7,544 (33,235) 8,108
Net change in unrealized
appreciation/depreciation
of investments ................... 94,342 (490,273) (1,549,466)
----------- ------------ ------------
Net increase (decrease) in
net assets resulting
from operations .................. 183,809 803,806 (85,559)
----------- ------------ ------------
Distributions to Shareholders from:
Net investment income:
A Class .......................... (49,840) (1,270,341) (1,406,694)
B Class .......................... (25,838) (42,773) (43,161)
C Class .......................... (8,169) (14,200) (5,944)
Net realized gain on investments:
A Class .......................... -- -- (110,320)
B Class .......................... -- -- (3,890)
C Class .......................... -- -- (110)
----------- ------------ ------------
(83,847) (1,327,314) (1,570,119)
----------- ------------ ------------
Capital Share Transactions:
Proceeds from shares sold:
A Class .......................... 1,875,162 306,580 1,440,696
B Class .......................... 1,280,668 82,402 208,846
C Class .......................... 331,425 62 304,077
Net asset value of shares issued upon
reinvestment of distributions from
net investment income and net
realized gain on investments:
A Class .......................... 40,880 777,635 910,805
B Class .......................... 16,536 23,626 26,551
C Class .......................... 3,752 14,095 5,787
----------- ------------ ------------
3,548,423 1,204,400 2,896,762
----------- ------------ ------------
Cost of shares repurchased:
A Class .......................... (5,028) (4,884,665) (4,235,735)
B Class .......................... -- (224,582) (107,320)
C Class .......................... -- (3,990) (1,454)
----------- ------------ ------------
(5,028) (5,113,237) (4,344,509)
----------- ------------ ------------
Increase (decrease) in net assets
derived from capital share
transactions ..................... 3,543,395 (3,908,837) (1,447,747)
----------- ------------ ------------
Net Increase (Decrease) in
Net Assets ....................... 3,643,357 (4,432,345) (3,103,425)
Net Assets:
Beginning of period ................. -- 28,402,142 31,505,567
----------- ------------ ------------
End of period ....................... $ 3,643,357 $ 23,969,797 $ 28,402,142
=========== ============ ============
</TABLE>
<PAGE>
[RESTUBBED]
<TABLE>
<CAPTION>
Delaware Tax-Free Delaware Tax-Free
Oregon Insured Fund Wisconsin Fund
------------------------------------------------------------------------------------------------------
Year Year
Ended Ended
8/31/00 8/31/99 8/31/00 8/31/99
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations:
Net investment income ............... $ 1,552,960 $ 1,540,396 $ 1,652,329 $ 1,773,222
Net realized gain (loss)
on investments ................... (239,493) 19,477 (745,668) (13,496)
Net change in unrealized
appreciation/depreciation
of investments ................... 429,851 (2,333,795) 514,555 (2,175,827)
------------ ------------ ------------ ------------
Net increase (decrease) in
net assets resulting
from operations .................. 1,743,318 (773,922) 1,421,216 (416,101)
------------ ------------ ------------ ------------
Distributions to Shareholders from:
Net investment income:
A Class .......................... (1,169,328) (1,225,917) (1,467,100) (1,605,902)
B Class .......................... (313,843) (261,267) (127,770) (112,132)
C Class .......................... (69,789) (53,212) (57,459) (55,188)
Net realized gain on investments:
A Class .......................... -- -- -- --
B Class .......................... -- -- -- --
C Class .......................... -- -- -- --
------------ ------------ ------------ ------------
(1,552,960) (1,540,396) (1,652,329) (1,773,222)
------------ ------------ ------------ ------------
Capital Share Transactions:
Proceeds from shares sold:
A Class .......................... 1,386,611 7,214,292 1,712,261 4,882,591
B Class .......................... 556,822 2,756,229 654,207 1,147,384
C Class .......................... 706,434 722,342 76,538 554,885
Net asset value of shares issued upon
reinvestment of distributions from
net investment income and net
realized gain on investments:
A Class .......................... 687,158 734,060 894,596 905,575
B Class .......................... 154,432 141,931 73,331 67,376
C Class .......................... 45,010 39,399 50,306 48,880
------------ ------------ ------------ ------------
3,536,467 11,608,253 3,461,239 7,606,691
------------ ------------ ------------ ------------
Cost of shares repurchased:
A Class .......................... (6,993,486) (3,023,459) (7,069,217) (4,934,768)
B Class .......................... (1,290,084) (441,663) (679,078) (457,430)
C Class .......................... (758,470) (54,713) (251,822) (292,994)
------------ ------------ ------------ ------------
(9,042,040) (3,519,835) (8,000,117) (5,685,192)
------------ ------------ ------------ ------------
Increase (decrease) in net assets
derived from capital share
transactions ..................... (5,505,573) 8,088,418 (4,538,878) 1,921,499
------------ ------------ ------------ ------------
Net Increase (Decrease) in
Net Assets ....................... (5,315,215) 5,774,100 (4,769,991) (267,824)
Net Assets:
Beginning of period ................. 37,120,435 31,346,335 38,125,063 38,392,887
------------ ------------ ------------ ------------
End of period ....................... $ 31,805,220 $ 37,120,435 $ 33,355,072 $ 38,125,063
============ ============ ============ ============
</TABLE>
----------
*Date of commencement of operations.
See accompanying notes
36
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Idaho Fund - A Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Period
Ended Ended Ended Ended Ended 1/4/95(3)
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $10.940 $11.560 $11.450 $10.910 $11.020 $10.000
Income (loss) from investment operations:
Net investment income .................................. 0.541 0.517 0.356 0.551 0.580 0.600
Net realized and unrealized gain
(loss) on investments ................................. (0.210) (0.620) 0.115 0.552 (0.120) 1.100
----------------------------------------------------------------------
Total from investment operations ....................... 0.331 (0.103) 0.471 1.103 0.460 1.700
----------------------------------------------------------------------
Less dividends and distributions:
Dividends from net
investment income .................................... (0.541) (0.517) (0.356) (0.563) (0.570) (0.600)
Distributions from net realized
gain on investments .................................. - - (0.005) - - (0.080)
----------------------------------------------------------------------
Total dividends and distributions ........................ (0.541) (0.517) (0.361) (0.563) (0.570) (0.680)
----------------------------------------------------------------------
Net asset value, end of period ........................... $10.730 $10.940 $11.560 $11.450 $10.910 $11.020
======================================================================
Total return(4) .......................................... 3.25% (0.99%) 4.19% 10.41% 4.36% 17.48%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ........................................ $34,674 $44,299 $39,843 $33,788 $27,684 $13,540
Ratio of expenses to
average net assets ................................... 1.00% 1.00% 0.95% 0.87% 0.60% 0.26%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly ............................. 1.09% 1.04% 1.02% 1.02% 1.10% 1.25%
Ratio of net investment income to
average net assets ................................... 5.13% 4.52% 4.65% 4.98% 5.29% 5.24%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly ......................... 5.04% 4.48% 4.58% 4.83% 4.79% 4.25%
Portfolio turnover ..................................... 10% 2% 8% 19% 35% 42%
</TABLE>
------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations; ratios have been annualized and total return has
not been annualized.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
37
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Idaho Fund - B Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Period
Ended Ended Ended Ended Ended 3/16/95(3)
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $10.920 $11.550 $11.440 $10.890 $11.010 $10.500
Income (loss) from investment operations:
Net investment income ................................. 0.462 0.432 0.298 0.487 0.520 0.420
Net realized and unrealized gain
(loss) on investments ................................ (0.200) (0.630) 0.117 0.560 (0.130) 0.590
----------------------------------------------------------------------
Total from investment operations ...................... 0.262 (0.198) 0.415 1.047 0.390 1.010
----------------------------------------------------------------------
Less dividends and distributions:
Dividends from net
investment income ................................... (0.462) (0.432) (0.300) (0.497) (0.510) (0.420)
Distributions from net realized
gain on investments ................................. - - (0.005) - - (0.080)
----------------------------------------------------------------------
Total dividends and distributions ....................... (0.462) (0.432) (0.305) (0.497) (0.510) (0.500)
----------------------------------------------------------------------
Net asset value, end of period .......................... $10.720 $10.920 $11.550 $11.440 $10.890 $11.010
======================================================================
Total return(4) ......................................... 2.58% (1.82%) 3.68% 9.87% 3.75% 9.86%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ....................................... $10,320 $10,199 $7,474 $6,827 $4,945 $1,977
Ratio of expenses to
average net assets .................................. 1.75% 1.75% 1.70% 1.46% 1.11% 0.79%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly ............................ 1.84% 1.79% 1.77% 1.61% 1.85% 1.90%
Ratio of net investment income to
average net assets .................................. 4.38% 3.77% 3.90% 4.39% 4.78% 4.68%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly ........................ 4.29% 3.73% 3.83% 4.24% 4.04% 3.57%
Portfolio turnover .................................... 10% 2% 8% 19% 35% 42%
</TABLE>
------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations; ratios have been annualized and total return has
not been annualized.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
38
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Idaho Fund - C Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Period
Ended Ended Ended Ended Ended 1/11/95(3)
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $10.920 $11.550 $11.430 $10.900 $11.020 $10.040
Income (loss) from investment operations:
Net investment income .................................. 0.462 0.432 0.302 0.459 0.500 0.500
Net realized and unrealized gain
(loss) on investments ................................. (0.200) (0.630) 0.123 0.549 (0.130) 1.060
----------------------------------------------------------------------
Total from investment operations ....................... 0.262 (0.198) 0.425 1.008 0.370 1.560
----------------------------------------------------------------------
Less dividends and distributions:
Dividends from net
investment income ..................................... (0.462) (0.432) (0.300) (0.478) (0.490) (0.500)
Distributions from net realized
gain on investments ................................... - - (0.005) - - (0.080)
----------------------------------------------------------------------
Total dividends and distributions ........................ (0.462) (0.432) (0.305) (0.478) (0.490) (0.580)
----------------------------------------------------------------------
Net asset value, end of period ........................... $10.720 $10.920 $11.550 $11.430 $10.900 $11.020
======================================================================
Total return(4) .......................................... 2.58% (1.82%) 3.77% 9.49% 3.48% 15.81%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $3,621 $3,411 $1,719 $1,125 $822 $789
Ratio of expenses to
average net assets .................................... 1.75% 1.75% 1.70% 1.62% 1.33% 1.05%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly .............................. 1.84% 1.79% 1.77% 1.77% 1.82% 2.00%
Ratio of net investment income to
average net assets .................................... 4.38% 3.77% 3.90% 4.23% 4.57% 4.48%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 4.29% 3.73% 3.83% 4.08% 4.08% 3.53%
Portfolio turnover ..................................... 10% 2% 8% 19% 35% 42%
</TABLE>
---------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations; ratios have been annualized and total return has
not been annualized.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
39
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Iowa Fund - A Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Year
Ended Ended Ended Ended Ended Ended
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $9.700 $10.160 $10.060 $9.620 $9.830 $8.560
Income (loss) from investment operations:
Net investment income ................................. 0.447 0.440 0.294 0.449 0.440 0.450
Net realized and unrealized gain
(loss) on investments ................................ 0.050 (0.460) 0.100 0.440 (0.210) 1.290
----------------------------------------------------------------------
Total from investment operations ...................... 0.497 (0.020) 0.394 0.889 0.230 1.740
----------------------------------------------------------------------
Less dividends:
Dividends from net
investment income .................................... (0.447) (0.440) (0.294) (0.449) (0.440) (0.470)
----------------------------------------------------------------------
Total dividends ....................................... (0.447) (0.440) (0.294) (0.449) (0.440) (0.470)
----------------------------------------------------------------------
Net asset value, end of period .......................... $9.750 $9.700 $10.160 $10.060 $9.620 $9.830
======================================================================
Total return(3) ......................................... 5.35% (0.26%) 3.98% 9.49% 2.56% 20.80%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ........................................ $36,136 $37,807 $39,345 $38,343 $40,037 $42,374
Ratio of expenses to
average net assets ................................... 1.01% 1.00% 0.96% 0.91% 0.92% 0.72%
Ratio of expenses to average net assets
prior to expense limitation
and expenses paid indirectly ......................... 1.16% 1.08% 1.06% 0.97% 1.06% 1.06%
Ratio of net investment income to
average net assets ................................... 4.71% 4.36% 4.38% 4.62% 4.68% 4.88%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly ......................... 4.56% 4.28% 4.28% 4.56% 4.54% 4.54%
Portfolio turnover .................................... 0% 2% 13% 14% 14% 21%
</TABLE>
-------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
40
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Iowa Fund - B Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Period
Ended Ended Ended Ended Ended 3/24/95(3)
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $9.700 $10.160 $10.060 $9.610 $9.830 $9.180
Income (loss) from investment operations:
Net investment income .................................. 0.376 0.363 0.243 0.366 0.380 0.310
Net realized and unrealized gain
(loss) on investments ................................. 0.050 (0.460) 0.100 0.457 (0.220) 0.640
----------------------------------------------------------------------
Total from investment operations ....................... 0.426 (0.097) 0.343 0.823 0.160 0.950
----------------------------------------------------------------------
Less dividends:
Dividends from net
investment income ..................................... (0.376) (0.363) (0.243) (0.373) (0.380) (0.300)
----------------------------------------------------------------------
Total dividends .......................................... (0.376) (0.363) (0.243) (0.373) (0.380) (0.300)
----------------------------------------------------------------------
Net asset value, end of period ........................... $9.750 $9.700 $10.160 $10.060 $9.610 $9.830
======================================================================
Total return(4) .......................................... 4.56% (1.03%) 3.46% 8.75% 1.76% 10.62%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ........................................ $3,616 $4,600 $3,910 $2,910 $1,645 $819
Ratio of expenses to average
net assets ............................................ 1.76% 1.75% 1.71% 1.67% 1.61% 1.28%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly .............................. 1.91% 1.83% 1.81% 1.73% 1.81% 1.65%
Ratio of net investment income to
average net assets .................................... 3.96% 3.61% 3.63% 3.86% 3.97% 4.06%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 3.81% 3.53% 3.53% 3.80% 3.77% 3.69%
Portfolio turnover ..................................... 0% 2% 13% 14% 14% 21%
</TABLE>
-------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations; ratios have been annualized and total return has
not been annualized.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
41
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Iowa Fund - C Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Period
Ended Ended Ended Ended Ended 1/4/95(3)
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $9.700 $10.160 $10.060 $9.610 $9.830 $8.550
Income (loss) from investment operations:
Net investment income .................................. 0.376 0.363 0.243 0.360 0.360 0.370
Net realized and unrealized gain
(loss) on investments ................................. 0.050 (0.460) 0.100 0.456 (0.220) 1.280
----------------------------------------------------------------------
Total from investment operations ....................... 0.426 (0.097) 0.343 0.816 0.140 1.650
----------------------------------------------------------------------
Less dividends:
Dividends from net investment
income ................................................ (0.376) (0.363) (0.243) (0.366) (0.360) (0.370)
----------------------------------------------------------------------
Total dividends .......................................... (0.376) (0.363) (0.243) (0.366) (0.360) (0.370)
----------------------------------------------------------------------
Net asset value, end of period ........................... $9.750 $9.700 $10.160 $10.060 $9.610 $9.830
======================================================================
Total return(4) .......................................... 4.57% (1.03%) 3.46% 8.68% 1.56% 19.66%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $1,107 $1,296 $1,225 $871 $670 $462
Ratio of expenses to average
net assets ............................................ 1.76% 1.75% 1.71% 1.74% 1.75% 1.61%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly .............................. 1.91% 1.83% 1.81% 1.80% 1.81% 1.72%
Ratio of net investment income to
average net assets .................................... 3.96% 3.61% 3.63% 3.79% 3.82% 3.74%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 3.81% 3.53% 3.53% 3.73% 3.76% 3.63%
Portfolio turnover ..................................... 0% 2% 13% 14% 14% 21%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations; ratios have been annualized and total return has
not been annualized.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
42
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Kansas Fund - A Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Year
Ended Ended Ended Ended Ended Ended
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $10.640 $11.160 $11.060 $10.560 $10.730 $ 9.500
Income (loss) from investment
operations:
Net investment income .................................. 0.532 0.538 0.351 0.526 0.520 0.560
Net realized and unrealized gain
(loss) on investments ................................ (0.115) (0.491) 0.100 0.506 (0.170) 1.220
----------------------------------------------------------------------
Total from investment operations ....................... 0.417 0.047 0.451 1.032 0.350 1.780
----------------------------------------------------------------------
Less dividends and distributions:
Dividends from net
investment income .................................... (0.537) (0.534) (0.351) (0.532) (0.520) (0.550)
Distributions from net realized
gain on investments .................................. - (0.033) - - - -
----------------------------------------------------------------------
Total dividends and distributions ...................... (0.537) (0.567) (0.351) (0.532) (0.520) (0.550)
----------------------------------------------------------------------
Net asset value, end of period ........................... $10.520 $10.640 $11.160 $11.060 $10.560 $10.730
======================================================================
Total return(3) .......................................... 4.14% 0.35% 4.14% 10.06% 3.43% 19.13%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ........................................ $10,392 $11,498 $12,548 $10,663 $10,176 $10,677
Ratio of expenses to average
net assets ........................................... 1.01% 0.98% 0.89% 0.84% 0.83% 0.37%
Ratio of expenses to average net
assets prior to expense limitation
and expenses paid indirectly ......................... 1.26% 1.06% 0.99% 1.03% 1.21% 1.11%
Ratio of net investment income to
average net assets ................................... 5.15% 4.86% 4.75% 4.92% 4.97% 5.32%
Ratio of net investment income to
average net assets prior to
expense limitation and
expenses paid indirectly ............................. 4.90% 4.78% 4.65% 4.73% 4.59% 4.58%
Portfolio turnover ..................................... 24% 28% 40% 30% 56% 19%
</TABLE>
-----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
43
<PAGE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Kansas Fund - B Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Period
Ended Ended Ended Ended Ended 4/8/95(3)
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $10.650 $11.180 $11.080 $10.570 $10.740 $10.190
Income (loss) from investment operations:
Net investment income .................................. 0.456 0.455 0.296 0.440 0.450 0.340
Net realized and unrealized gain
(loss) on investments ................................. (0.107) (0.501) 0.099 0.516 (0.170) 0.540
----------------------------------------------------------------------
Total from investment operations ....................... 0.349 (0.046) 0.395 0.956 0.280 0.880
----------------------------------------------------------------------
Less dividends and distributions:
Dividends from net
investment income ..................................... (0.459) (0.451) (0.295) (0.446) (0.450) (0.330)
Distributions from net realized gain
on investments ........................................ - (0.033) - - - -
----------------------------------------------------------------------
Total dividends and distributions ...................... (0.459) (0.484) (0.295) (0.446) (0.450) (0.330)
----------------------------------------------------------------------
Net asset value, end of period ........................... $10.540 $10.650 $11.180 $11.080 $10.570 $10.740
======================================================================
Total return(4) .......................................... 3.45% (0.49%) 3.62% 9.28% 2.69% 8.76%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $3,879 $4,910 $3,694 $3,452 $2,402 $677
Ratio of expenses to average
net assets ............................................ 1.76% 1.73% 1.64% 1.61% 1.61% 0.94%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly .............................. 2.01% 1.81% 1.74% 1.80% 2.00% 1.68%
Ratio of net investment income to
average net assets .................................... 4.40% 4.11% 4.00% 4.15% 4.16% 4.63%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 4.15% 4.03% 3.90% 3.96% 3.77% 3.89%
Portfolio turnover ..................................... 24% 28% 40% 30% 56% 19%
</TABLE>
-------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations; ratios have been annualized and total return has
not been annualized.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
44
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Kansas Fund - C Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Period
Ended Ended Ended Ended Ended 4/12/95(3)
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $10.640 $11.160 $11.050 $10.550 $10.720 $10.200
Income (loss) from investment operations:
Net investment income .................................. 0.456 0.453 0.296 0.439 0.430 0.320
Net realized and unrealized gain
(loss) on investments ................................. (0.106) (0.490) 0.110 0.504 (0.170) 0.510
----------------------------------------------------------------------
Total from investment operations ....................... 0.350 (0.037) 0.406 0.943 0.260 0.830
----------------------------------------------------------------------
Less dividends and distributions:
Dividends from net
investment income ..................................... (0.460) (0.450) (0.296) (0.443) (0.430) (0.310)
Distributions from net realized gain
on investments ........................................ - (0.033) - - - -
----------------------------------------------------------------------
Total dividends and distributions ...................... (0.460) (0.483) (0.296) (0.443) (0.430) (0.310)
----------------------------------------------------------------------
Net asset value, end of period ........................... $10.530 $10.640 $11.160 $11.050 $10.550 $10.720
======================================================================
Total return(4) .......................................... 3.46% (0.40%) 3.72% 9.17% 2.52% 8.29%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $362 $458 $127 $108 $90 $40
Ratio of expenses to average
net assets ............................................ 1.76% 1.73% 1.64% 1.64% 1.77% 1.27%
Ratio of expenses to average net
assets prior to expense limitation
and expenses paid indirectly .......................... 2.01% 1.81% 1.74% 1.83% 2.00% 1.79%
Ratio of net investment income to
average net assets .................................... 4.40% 4.11% 4.00% 4.12% 4.02% 4.21%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 4.15% 4.03% 3.90% 3.93% 3.79% 3.69%
Portfolio turnover ..................................... 24% 28% 40% 30% 56% 19%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations; ratios have been annualized and total return has
not been annualized.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
45
<PAGE>
Notes to Financial Statements
August 31, 2000
--------------------------------------------------------------------------------
Delaware Tax-Free Kansas Fund, Delaware Tax-Free Missouri Insured Fund, and
Delaware Tax-Free Oregon Insured Fund are series of Voyageur Investment Trust
which is organized as a Massachusetts business trust. Delaware Tax-Free Idaho
Fund, Delaware Tax-Free Iowa Fund, Delaware Montana Municipal Bond Fund, and
Delaware Tax-Free Wisconsin Fund are series of Voyageur Mutual Funds which is
organized as a Delaware business trust, and Delaware Tax-Free North Dakota Fund
is a series within the Voyageur Tax-Free Funds which is organized as a Delaware
business trust. Each series is referred to as a "Fund" or collectively as the
"Funds" and is a non-diversified, open-end management investment company under
the Investment Company Act of 1940, as amended. The Funds offer three classes of
shares. The A Class carries a maximum front-end sales charge of 3.75%. The B
Class carries a back-end deferred sales charge and the C Class carries a level
load deferred sales charge.
The Delaware Tax-Free Idaho Fund, Delaware Tax-Free Iowa Fund, Delaware Montana
Municipal Bond Fund, Delaware Tax-Free North Dakota Fund, and Delaware Tax-Free
Wisconsin Fund seek high current income free from both federal and state income
taxes by investing in investment grade municipal bonds. The Delaware Tax-Free
Missouri Insured Fund and Delaware Tax-Free Oregon Insured Fund seek high
current income free from both federal and state income taxes by investing in
insured municipal bonds. The Delaware Tax-Free Kansas Fund seeks high current
income free from both federal and state income taxes and local intangibles tax
by investing in investment grade municipal bonds.
1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Funds.
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Money market instruments having less than 60 days to maturity are
valued at amortized cost, which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Funds' Board
of Trustees.
Federal Income Taxes - Each Fund intends to qualify or 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 accounting principles generally accepted in the United States.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Funds on the basis of daily net assets of each class. Distribution expenses
relating to a specific class are charged directly to that class.
<PAGE>
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Other - Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Interest income is recorded on the accrual basis. Original issue discounts and
market premium are amortized to interest income over the lives of the respective
securities. The Funds declare dividends from net investment income daily and pay
such dividends monthly. Capital gains, if any, are distributed annually.
Certain expenses of the Funds are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The expenses
paid under the above arrangement are included in their respective expense
captions on the Statement of Operations with the corresponding expense offset
shown as "expenses paid indirectly". The amount of these expenses for the period
ended August 31, 2000 are as follows:
Delaware Tax-Free Idaho Fund ............................ $1,177
Delaware Tax-Free Iowa Fund ............................. $ 956
Delaware Tax-Free Kansas Fund ........................... $ 346
Delaware Tax-Free Missouri Insured Fund ................. $1,148
Delaware Montana Municipal Bond Fund .................... $ 216
Delaware Tax-Free North Dakota Fund ..................... $ 592
Delaware Tax-Free Oregon Insured Fund ................... $ 769
Delaware Tax-Free Wisconsin Fund ........................ $ 785
59
<PAGE>
Notes to Financial Statements (continued)
August 31, 2000
--------------------------------------------------------------------------------
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, each Fund
pays Delaware Management Company (DMC), the Investment Manager, an annual fee
which is calculated daily based on the net assets of each Fund. The following
are the management fees as a percentage of average daily net assets for each
respective Fund:
<TABLE>
<CAPTION>
On the first On the next On the next In excess of
$500 million $500 million $1.5 billion $2.5 billion
---------------------------------------------------------
<S> <C> <C> <C> <C>
Delaware Tax-Free Idaho Fund 0.55% 0.50% 0.45% 0.425%
Delaware Tax-Free Iowa Fund 0.55% 0.50% 0.45% 0.425%
Delaware Tax-Free Kansas Fund 0.55% 0.50% 0.45% 0.425%
Delaware Tax-Free Missouri Insured Fund 0.50% 0.475% 0.45% 0.425%
Delaware Montana Municipal Bond Fund 0.55% 0.50% 0.45% 0.425%
Delaware Tax-Free North Dakota Fund 0.55% 0.50% 0.45% 0.425%
Delaware Tax-Free Oregon Insured Fund 0.50% 0.475% 0.45% 0.425%
Delaware Tax-Free Wisconsin Fund 0.55% 0.50% 0.45% 0.425%
</TABLE>
DMC has elected to waive its fee and reimburse each Fund to the extent that
annual operating expenses, exclusive of taxes, interest, brokerage commissions,
extraordinary expenses and distribution expenses, exceed the following
percentages of average daily net assets through October 31, 2001.
The waiver rates for the period ended August 31, 2000 are as follows:
Operating expense
limitation as a percentage
of average daily
net assets (per annum)
--------------------------
Delaware Tax-Free Idaho Fund 0.75%
Delaware Tax-Free Iowa Fund 0.75%
Delaware Tax-Free Kansas Fund 0.75%
Delaware Tax-Free Missouri Insured Fund N/A
Delaware Montana Municipal Bond Fund 0.50%
Delaware Tax-Free North Dakota Fund N/A
Delaware Tax-Free Oregon Insured Fund 0.60%
Delaware Tax-Free Wisconsin Fund 0.75%
The Funds have engaged Delaware Service Company, Inc. (DSC), an affiliate of
DMC, to provide dividend disbursing, transfer agent, accounting and
administrative services. The Funds pay DSC a monthly fee based on number of
shareholder accounts, shareholder transactions and average net assets, subject
to certain minimums.
At August 31, 2000, the Funds had liabilities payable to affiliates as follows:
<TABLE>
<CAPTION>
Dividend disbursing,
Investment Transfer agent, accounting Other expenses
management fees fees and other expenses payable to DMC
payable to DMC payable to DSC and affiliates
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Delaware Tax-Free Idaho Fund - $6,279 $19,498
Delaware Tax-Free Iowa Fund $9,346 6,705 16,624
Delaware Tax-Free Kansas Fund 4,552 2,550 11,505
Delaware Tax-Free Missouri Insured Fund 10,605 7,173 19,498
Delaware Montana Municipal Bond Fund - 7,439 12,063
Delaware Tax-Free North Dakota Fund 15,089 3,947 11,692
Delaware Tax-Free Oregon Insured Fund 5,487 4,772 12,906
Delaware Tax-Free Wisconsin Fund 4,741 4,889 13,686
</TABLE>
60
<PAGE>
Notes to Financial Statements (continued)
August 31, 2000
--------------------------------------------------------------------------------
2. Investment Management and Other Transactions with Affiliates (continued)
Pursuant to the Distribution Agreement, each Fund pays Delaware Distributors,
L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.25% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Classes.
For the period ended August 31, 2000, commissions earned by DDLP on sales of
each Fund's A Class shares were as follows:
Delaware Tax-Free Idaho Fund ......................... $9,682
Delaware Tax-Free Iowa Fund .......................... 8,541
Delaware Tax-Free Kansas Fund ........................ 3,731
Delaware Tax-Free Missouri Insured Fund .............. 4,399
Delaware Montana Municipal Bond Fund ................. 498
Delaware Tax-Free North Dakota Fund .................. 646
Delaware Tax-Free Oregon Insured Fund ................ 4,107
Delaware Tax-Free Wisconsin Fund ..................... 7,062
Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Funds. These officers, trustees and employees are paid no compensation by
the Funds.
3. Investments
During the period ended August 31, 2000, the Funds made purchases and sales of
investment securities other than temporary cash investments as follows:
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Montana Tax-Free Tax-Free Tax-Free
Idaho Iowa Kansas Missouri Municipal North Dakota Oregon Insured Wisconsin
Fund Fund Fund Insured Fund Bond Fund Fund Fund Fund
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases ............ $5,145,070 $174,000 $3,482,180 $454,980 $5,872,589 $1,761,109 $ - $1,935,163
Sales ................ 10,338,182 3,984,576 4,742,867 4,845,502 2,423,887 5,130,425 4,193,538 7,696,474
</TABLE>
At August 31, 2000, the aggregate cost of securities and unrealized appreciation
(depreciation) for federal income tax purposes for each Fund were as follows:
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Montana Tax-Free Tax-Free Tax-Free
Idaho Iowa Kansas Missouri Municipal North Dakota Oregon Insured Wisconsin
Fund Fund Fund Insured Fund Bond Fund Fund Fund Fund
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cost of
Investments .......... $48,529,249 $38,729,368 $13,965,803 $46,244,783 $3,456,680 $23,670,741 $30,710,148 $32,272,352
---------------------------------------------------------------------------------------------------------
Aggregate
Unrealized
Appreciation ......... $780,834 $1,664,028 $590,805 $2,023,089 $94,597 $736,486 $1,235,989 $968,343
Aggregate
Unrealized
Depreciation ......... (1,673,542) (245,458) (136,729) (183,054) (255) (611,628) (562,916) (299,166)
---------------------------------------------------------------------------------------------------------
Net Unrealized
Appreciation
(Depreciation) ....... $(892,708) $1,418,570 $454,076 $1,840,035 $94,342 $124,858 $673,073 $669,177
=========================================================================================================
</TABLE>
61
<PAGE>
Notes to Financial Statements (continued)
August 31, 2000
--------------------------------------------------------------------------------
3. Investments (continued)
For federal income tax purposes, each Fund had accumulated capital losses at
August 31, 2000 as follows:
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free Tax-Free
Idaho Iowa Kansas Missouri North Dakota Oregon Insured Wisconsin
Fund Fund Fund Insured Fund Fund Fund Fund
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Year of expiration 2002 $-- $969,615 $-- $ -- $-- $215,801 $128,938
Year of expiration 2003 -- 368,235 -- 209,612 -- 158,365 64,926
Year of expiration 2004 -- 168,308 -- 525,264 -- 218,468 229,647
Year of expiration 2005 -- 117,934 -- -- -- -- --
Year of expiration 2006 44,632 -- -- -- -- -- --
Year of expiration 2007 -- -- -- -- -- -- 53,540
Year of expiration 2008 -- 133,882 49,427 187,782 16,837 -- 422,454
------------------------------------------------------------------------------------------
Total $44,632 $1,757,974 $49,427 $922,658 $16,837 $592,634 - $899,505
=========================================================================================
</TABLE>
4. Capital Shares
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Missouri
Idaho Fund Iowa Fund Kansas Fund Insured Fund
------------------------ ---------------------- -------------------- ----------------------
Year Year Year Year
Ended Ended Ended Ended
8/31/00 8/31/99 8/31/00 8/31/99 8/31/00 8/31/99 8/31/00 8/31/99
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class ..................... 552,603 859,702 217,604 341,908 82,455 213,539 349,266 149,789
B Class ..................... 136,768 366,423 37,082 134,546 32,372 172,332 60,617 47,604
C Class ..................... 131,600 198,983 19,292 54,506 20,247 32,553 24,320 15,875
Shares issued upon reinvestment
of distributions from net
investment income and net
realized gain on investments:
A Class ..................... 121,535 114,940 108,586 106,955 27,280 28,696 94,053 98,821
B Class ..................... 28,556 19,655 12,214 10,686 12,657 11,924 24,584 23,890
C Class ..................... 12,286 6,278 3,241 3,179 1,170 564 620 404
---------- ---------- ---------- ---------- -------- ---------- -------- ----------
983,348 1,565,981 398,019 651,780 176,181 459,608 553,460 336,383
Shares repurchased:
A Class ..................... (1,492,781) (370,113) (518,863) (423,067) (203,299) (285,048) (832,478) (471,038)
B Class ..................... (136,088) (99,593) (152,719) (55,825) (137,989) (53,746) (135,474) (89,897)
C Class ..................... (118,333) (41,822) (42,678) (44,536) (30,090) (1,377) (14,124) (4,175)
---------- ---------- ---------- ---------- -------- ---------- -------- ----------
(1,747,202) (511,528) (714,260) (523,428) (371,378) (340,171) (982,076) (565,110)
---------- ---------- ---------- ---------- -------- ---------- -------- ----------
Net increase (decrease) ........ (763,854) 1,054,453 (316,241) 128,352 (195,197) 119,437 (428,616) (228,727)
========== ========== ========== ========== ======== ========== ======== ==========
</TABLE>
62
<PAGE>
Notes to Financial Statements (continued)
August 31, 2000
--------------------------------------------------------------------------------
4. Capital Shares (continued)
<TABLE>
<CAPTION>
Delaware Delaware Tax-Free Delaware Tax-Free Delaware Tax-Free
Montana Municipal North Dakota Oregon Insured Wisconsin
Bond Fund Fund Fund Fund
----------------- -------------------- --------------------- ----------------------
11/2/99* Year Year Year
to Ended Ended Ended
8/31/00 8/31/00 8/31/99 8/31/00 8/31/99 8/31/00 8/31/99
Shares sold:
<S> <C> <C> <C> <C> <C> <C> <C>
A Class ..................... 340,366 29,223 127,381 143,160 697,470 183,938 488,062
B Class ..................... 233,714 7,826 18,412 57,843 268,258 70,486 114,881
C Class ..................... 60,101 6 26,760 73,692 69,203 8,266 55,257
Shares issued upon reinvestment
of distributions from net
investment income and net
realized gain on investments:
A Class ..................... 7,378 74,060 80,736 71,654 71,190 96,125 90,957
B Class ..................... 2,989 2,250 2,356 16,104 13,777 7,887 6,775
C Class ..................... 678 1,343 521 4,696 3,828 5,389 4,896
---------- -------- -------- ---------- ---------- ---------- ----------
645,226 114,708 256,166 367,149 1,123,726 372,091 760,828
---------- -------- -------- ---------- ---------- ---------- ----------
Shares repurchased:
A Class ..................... (895) (464,951) (375,693) (728,502) (295,662) (757,125) (500,517)
B Class ..................... -- (21,452) (9,548) (134,093) (42,818) (73,052) (45,854)
C Class ..................... -- (376) (131) (79,480) (5,433) (27,109) (29,398)
---------- -------- -------- ---------- ---------- ---------- ----------
(895) (486,779) (385,372) (942,075) (343,913) (857,286) (575,769)
---------- -------- -------- ---------- ---------- ---------- ----------
Net increase (decrease) ........ 644,331 (372,071) (129,206) (574,926) 779,813 (485,195) 185,059
========== ======== ======== ========== ========== ========== ==========
</TABLE>
* Commencement of operations.
5. Lines of Credit
The Funds, along with certain other funds in the Delaware Investments Family of
Funds (the "Participants"), participate in a $375,400,000 revolving line of
credit facility to be used for temporary or emergency purposes as an additional
source of liquidity to fund redemptions of investor shares. The Participants are
charged an annual commitment fee, which is allocated across the Participants on
the basis of each fund's allocation of the entire facility. The Participants may
borrow up to a maximum of one-third of their net assets under the agreement. The
Funds had no amounts outstanding as of August 31, 2000, or at any time during
the period.
6. Credit And Market Risk
The Funds concentrate their investments in securities mainly issued by each
specific states' municipalities. The value of these investments may be adversely
affected by new legislation within the state, regional or local economic
conditions, and differing levels of supply and demand for municipal bonds. Many
municipalities insure repayment for their obligations. Although bond insurance
reduces the risk of loss due to default by an issuer, such bonds remain subject
to the risk that market value may fluctuate for other reasons and there is no
assurance that the insurance company will meet its obligations.
These securities have been identified in the Statements of Net Assets.
63
<PAGE>
Notes to Financial Statements (continued)
August 31, 2000
--------------------------------------------------------------------------------
7. Tax Information (Unaudited)
The information set forth below is for each Fund's fiscal year as required by
federal laws. Shareholders, however, must report distributions on a calendar
year basis for income tax purposes, which may include distributions for portions
of two fiscal years of a fund. Accordingly, the information needed by
shareholders for income tax purposes will be sent to them in early 2001. Please
consult your tax advisor for proper treatment of this information.
For the fiscal year ended August 31, 2000, each Fund designates as long-term
capital gains, ordinary income and tax-exempt distributions paid during the year
as follows:
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware Delaware Delaware Delaware Delaware
Tax-Free Tax-Free Tax-Free Tax-Free Montana Tax-Free Tax-Free Tax-Free
Idaho Iowa Kansas Missouri Municipal North Dakota Oregon Insured Wisconsin
Fund Fund Fund Insured Fund Bond Fund Fund Fund Fund
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(A)
Long-Term
Capital Gains
Distributions
(Tax Basis) ............ - - - - - - - -
(B)
Ordinary Income
Distributions
(Tax Basis) ............ - - - - - - - -
(C)
Tax-Exempt
Distributions
(Tax Basis) ............ 100% 100% 100% 100% 100% 100% 100% 100%
--------------------------------------------------------------------------------------------------------
(D)
Total Distributions
(Tax Basis) ............ 100% 100% 100% 100% 100% 100% 100% 100%
--------------------------------------------------------------------------------------------------------
</TABLE>
(A), (B) and (C) are based on a percentage of each Fund's total distributions.
64
<PAGE>
Report of Independent Auditors
--------------------------------------------------------------------------------
To the Shareholders and Board of Trustees
Voyageur Mutual Funds - Delaware Tax-Free Idaho Fund
Voyageur Mutual Funds - Delaware Tax-Free Iowa Fund
Voyageur Investment Trust - Delaware Tax-Free Kansas Fund
Voyageur Investment Trust - Delaware Tax-Free Missouri Insured Fund
Voyageur Mutual Funds - Delaware Montana Municipal Bond Fund
Voyageur Tax Free Funds - Delaware Tax-Free North Dakota Fund
Voyageur Investment Trust - Delaware Tax-Free Oregon Insured Fund
Voyageur Mutual Funds - Delaware Tax-Free Wisconsin Fund
We have audited the accompanying statements of net assets of Delaware Tax-Free
Idaho Fund, Delaware Tax-Free Iowa Fund, Delaware Tax-Free Kansas Fund, Delaware
Tax-Free Missouri Insured Fund, Delaware Montana Municipal Bond Fund, Delaware
Tax-Free North Dakota Fund, Delaware Tax-Free Oregon Insured Fund and Delaware
Tax-Free Wisconsin Fund (the "Funds") as of August 31, 2000, and the related
statements of operations and statements of changes in net assets for each of the
periods indicated therein, and the financial highlights for each of the periods
presented from January 1, 1997 through August 31, 2000.These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.The financial highlights
for the periods presented through December 31, 1996 were audited by other
auditors whose reports thereon dated February 14, 1997 expressed unqualified
opinions on such financial highlights.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of August 31, 2000, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the above listed funds at August 31, 2000, the results of their operations
and changes in their net assets for each of the periods indicated therein, and
their financial highlights for each of the periods presented from January 1,
1997 through August 31, 2000, in conformity with accounting principles generally
accepted in the United States.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
October 6, 2000
<PAGE>
DELAWARE(SM)
INVESTMENTS
---------------------
Philadelphia o London
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
This annual report is for the information of Delaware Tax-Free Idaho Fund,
Delaware Tax-Free Iowa Fund, Delaware Tax-Free Kansas Fund, Delaware Tax-Free
Missouri Insured Fund, Delaware Montana Municipal Bond Fund, Delaware Tax-Free
North Dakota Fund, Delaware Tax-Free Oregon Insured Fund and Delaware Tax-Free
Wisconsin Fund shareholders, but it may be used with prospective investors when
preceded or accompanied by a current Prospectus for these Funds and the Delaware
Investments Performance Update for the most recently completed calendar quarter.
The prospectus sets forth details about charges, expenses, investment objectives
and operating policies of each Funds. You should read the prospectus carefully
before you invest. 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 Funds will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BOARD OF TRUSTEES Charles E. Peck Investment Manager
Retired Delaware Management Company
Wayne A. Stork Fredericksburg, VA Philadelphia, PA
Chairman
Delaware Investments Family of Funds Janet L. Yeomans International Affiliate
Philadelphia, PA Vice President and Treasurer Delaware International Advisers Ltd.
3M Corporation London, England
Walter P. Babich St. Paul, MN
Board Chairman National Distributor
Citadel Constructors, Inc. AFFILIATED OFFICERS Delaware Distributors, L.P.
King of Prussia, PA Philadelphia, PA
Charles E. Haldeman, Jr.
David K. Downes President and Chief Executive Officer Shareholder Servicing, Dividend
President and Chief Executive Officer Delaware Management Holdings, Inc. Disbursing and Transfer Agent
Delaware Investments Family of Funds Philadelphia, PA Delaware Service Company, Inc.
Philadelphia, PA Philadelphia, PA
Richard J. Flannery
John H. Durham Executive Vice President 1818 Market Street
Private Investor and General Counsel Philadelphia, PA 19103-3682
Horsham, PA Delaware Investments Family of Funds
Philadelphia, PA
Anthony D. Knerr
Consultant, Anthony Knerr & Associates Bruce D. Barton
New York, NY President and Chief Executive Officer
Delaware Distributors, L.P.
Ann R. Leven Philadelphia, PA
Former Treasurer, National Gallery of Art
Washington, DC
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
</TABLE>
(3871) Printed in the USA
AR-CORN [8/00] PPL 10/00 (J6383)
<PAGE>
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Missouri Insured Fund - A Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Year
Ended Ended Ended Ended Ended Ended
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $10.340 $10.870 $10.810 $10.370 $10.540 $9.270
Income (loss) from investment
operations:
Net investment income ................................... 0.494 0.498 0.333 0.504 0.520 0.520
Net realized and unrealized gain
(loss) on investments ................................. - (0.530) 0.060 0.446 (0.180) 1.290
---------------------------------------------------------------------
Total from investment operations ........................ 0.494 (0.032) 0.393 0.950 0.340 1.810
---------------------------------------------------------------------
Less dividends:
Dividends from net
investment income ..................................... (0.494) (0.498) (0.333) (0.510) (0.510) (0.540)
---------------------------------------------------------------------
Total dividends ......................................... (0.494) (0.498) (0.333) (0.510) (0.510) (0.540)
---------------------------------------------------------------------
Net asset value, end of period ............................ $10.340 $10.340 $10.870 $10.810 $10.370 $10.540
=====================================================================
Total return(3) ........................................... 4.99% (0.38%) 3.70% 9.43% 3.41% 19.96%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $38,314 $42,337 $46,939 $48,565 $49,301 $50,211
Ratio of expenses to average
net assets ............................................ 1.03% 0.97% 0.92% 0.91% 0.71% 0.50%
Ratio of expenses to average net
assets prior to expense limitation
and expenses paid indirectly .......................... 1.03% 1.02% 1.02% 0.93% 1.03% 1.07%
Ratio of net investment income to
average net assets .................................... 4.88% 4.62% 4.64% 4.81% 5.05% 5.25%
Ratio of net investment income to
average net assets prior to
expense limitation and
expenses paid indirectly .............................. 4.88% 4.57% 4.54% 4.79% 4.73% 4.68%
Portfolio turnover ...................................... 1% 7% 18% 12% 28% 31%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
46
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Missouri Insured Fund - B Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Year
Ended Ended Ended Ended Ended Ended
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $10.340 $10.870 $10.810 $10.370 $10.540 $9.270
Income (loss) from investment
operations:
Net investment income ................................... 0.418 0.416 0.279 0.425 0.460 0.480
Net realized and unrealized gain
(loss) on investments ................................. - (0.530) 0.060 0.451 (0.180) 1.280
---------------------------------------------------------------------
Total from investment operations ........................ 0.418 (0.114) 0.339 0.876 0.280 1.760
---------------------------------------------------------------------
Less dividends:
Dividends from net
investment income ..................................... (0.418) (0.416) (0.279) (0.436) (0.450) (0.490)
---------------------------------------------------------------------
Total dividends ......................................... (0.418) (0.416) (0.279) (0.436) (0.450) (0.490)
---------------------------------------------------------------------
Net asset value, end of period ............................ $10.340 $10.340 $10.870 $10.810 $10.370 $10.540
=====================================================================
Total return(3) ........................................... 4.21% (1.13%) 3.19% 8.66% 2.93% 19.18%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $10,053 $10,572 $11,317 $11,507 $10,432 $6,195
Ratio of expenses to average
net assets ............................................ 1.78% 1.72% 1.67% 1.61% 1.29% 0.97%
Ratio of expenses to average net
assets prior to expense limitation
and expenses paid indirectly .......................... 1.78% 1.77% 1.77% 1.63% 1.78% 1.81%
Ratio of net investment income
to average net assets ................................. 4.13% 3.87% 3.89% 4.11% 4.46% 4.70%
Ratio of net investment income to
average net assets prior to
expense limitation and
expenses paid indirectly .............................. 4.13% 3.82% 3.79% 4.09% 3.97% 3.86%
Portfolio turnover .................................... 1% 7% 18% 12% 28% 31%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
47
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Missouri Insured Fund - C Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Period
Ended Ended Ended Ended Ended 11/11/95(3)
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $10.350 $10.880 $10.810 $10.370 $10.540 $10.360
Income (loss) from investment operations:
Net investment income ................................... 0.418 0.419 0.279 0.405 0.430 0.060
Net realized and unrealized gain
(loss) on investments ................................. - (0.530) 0.070 0.455 (0.180) 0.170
---------------------------------------------------------------------
Total from investment operations ........................ 0.418 (0.111) 0.349 0.860 0.250 0.230
---------------------------------------------------------------------
Less dividends:
Dividends from net
investment income ..................................... (0.418) (0.419) (0.279) (0.420) (0.420) (0.050)
---------------------------------------------------------------------
Total dividends ......................................... (0.418) (0.419) (0.279) (0.420) (0.420) (0.050)
---------------------------------------------------------------------
Net asset value, end of period ............................ $10.350 $10.350 $10.880 $10.810 $10.370 $10.540
=====================================================================
Total return(4) ........................................... 4.20% (1.12%) 3.28% 8.49% 2.48% 2.24%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $343 $231 $112 $225 $152 $20
Ratio of expenses to average
net assets ............................................ 1.78% 1.72% 1.67% 1.74% 1.62% 1.22%
Ratio of expenses to average net
assets prior to expense limitation
and expenses paid indirectly .......................... 1.78% 1.77% 1.77% 1.76% 1.78% 1.55%
Ratio of net investment income to
average net assets .................................... 4.13% 3.87% 3.89% 3.98% 4.10% 4.09%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 4.13% 3.82% 3.79% 3.96% 3.94% 3.76%
Portfolio turnover ...................................... 1% 7% 18% 12% 28% 31%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations; ratios have been annualized and total return has
not been annualized.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
48
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Delaware Montana Delaware Montana Delaware Montana
Selected data for each share of the Fund outstanding Municipal Bond Municipal Bond Municipal Bond
throughout each period were as follows: Fund - A Class Fund - B Class Fund - C Class
------------------------------------------------------------------------------------------------------------------------------------
Period Period Period
11/2/99(1) to 8/31/00 11/2/99(1) to 8/31/00 11/2/99(1) to 8/31/00
<S> <C> <C> <C>
Net asset value, beginning of period ................. $5.500 $5.500 $5.500
Income from investment operations:
Net investment income .............................. 0.176 0.152 0.146
Net realized and unrealized gain
on investments ................................... 0.163 0.153 0.159
-------------------------------------------------------
Total from investment operations ................... 0.339 0.305 0.305
-------------------------------------------------------
Less dividends:
Dividends from net investment income ............... (0.179) (0.155) (0.155)
-------------------------------------------------------
Total dividends .................................... (0.179) (0.155) (0.155)
-------------------------------------------------------
Net asset value, end of period ....................... $5.660 $5.650 $5.650
=======================================================
Total return(2) ...................................... 6.10% 5.65% 5.65%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $1,961 $1,338 $344
Ratio of expenses to average net assets ............ 0.75% 1.50% 1.50%
Ratio of expenses to average net
assets prior to expense limitation
and expenses paid indirectly ..................... 1.33% 2.08% 2.08%
Ratio of net investment income to
average net assets ............................... 4.31% 3.56% 3.56%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly ..................... 3.73% 2.98% 2.98%
Portfolio turnover ................................. 24% 24% 24%
</TABLE>
--------------
(1) Date of commencement of operations; 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.
See accompanying notes
49
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free North Dakota Fund - A Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Year
Ended Ended Ended Ended Ended Ended
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $10.820 $11.440 $11.320 $10.880 $11.000 $9.850
Income (loss) from investment operations:
Net investment income ................................... 0.547 0.541 0.364 0.546 0.540 0.540
Net realized and unrealized gain
(loss) on investments ................................. (0.180) (0.578) 0.120 0.451 (0.130) 1.180
---------------------------------------------------------------------
Total from investment operations ........................ 0.367 (0.037) 0.484 0.997 0.410 1.720
---------------------------------------------------------------------
Less dividends and distributions:
Dividends from net
investment income ..................................... (0.547) (0.541) (0.364) (0.557) (0.530) (0.570)
Distributions from net realized gain
on investments ........................................ - (0.042) - - - -
---------------------------------------------------------------------
Total dividends and distributions ....................... (0.547) (0.583) (0.364) (0.557) (0.530) (0.570)
---------------------------------------------------------------------
Net asset value, end of period ............................ $10.640 $10.820 $11.440 $11.320 $10.880 $11.000
=====================================================================
Total return(3) ........................................... 3.58% (0.41%) 4.35% 9.43% 3.89% 17.81%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $22,733 $27,032 $30,496 $30,965 $33,713 $36,096
Ratio of expenses to
average net assets .................................... 1.04% 1.00% 1.00% 1.00% 0.88% 0.81%
Ratio of expenses to average net
assets prior to expense limitation
and expenses paid indirectly .......................... 1.04% 1.04% 1.15% 1.04% 1.08% 1.05%
Ratio of net investment income to
average net assets .................................... 5.19% 4.79% 4.82% 4.97% 5.01% 5.07%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 5.19% 4.75% 4.67% 4.93% 4.81% 4.83%
Portfolio turnover ...................................... 7% 28% 23% 41% 58% 45%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
50
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free North Dakota Fund - B Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Year
Ended Ended Ended Ended Ended Ended
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $10.820 $11.440 $11.320 $10.880 $11.000 $9.850
Income (loss) from investment operations:
Net investment income ................................... 0.468 0.457 0.308 0.484 0.490 0.480
Net realized and unrealized gain
(loss) on investments ................................. (0.180) (0.578) 0.119 0.451 (0.130) 1.180
---------------------------------------------------------------------
Total from investment operations ........................ 0.288 (0.121) 0.427 0.935 0.360 1.660
---------------------------------------------------------------------
Less dividends and distributions:
Dividends from net
investment income ..................................... (0.468) (0.457) (0.307) (0.495) (0.480) (0.510)
Distributions from net realized gain
on investments ........................................ - (0.042) - - - -
---------------------------------------------------------------------
Total dividends and distributions ....................... (0.468) (0.499) (0.307) (0.495) (0.480) (0.510)
---------------------------------------------------------------------
Net asset value, end of period ............................ $10.640 $10.820 $11.440 $11.320 $10.880 $11.000
=====================================================================
Total return(3) ........................................... 2.81% (1.14%) 3.83% 8.82% 3.39% 17.24%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $910 $1,048 $980 $889 $700 $375
Ratio of expenses to average
net assets ............................................ 1.79% 1.75% 1.75% 1.55% 1.36% 1.29%
Ratio of expenses to average net
assets prior to expense limitation
and expenses paid indirectly .......................... 1.79% 1.79% 1.90% 1.59% 1.83% 1.79%
Ratio of net investment income to
average net assets .................................... 4.44% 4.04% 4.07% 4.42% 4.52% 4.56%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 4.44% 4.00% 3.92% 4.38% 4.05% 4.06%
Portfolio turnover ...................................... 7% 28% 23% 41% 58% 45%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
51
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free North Dakota Fund - C Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Period
Ended Ended Ended Ended Ended 7/29/95(3)
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $10.810 $11.430 $11.320 $10.870 $11.000 $10.510
Income (loss) from investment operations:
Net investment income ................................... 0.466 0.456 0.307 0.441 0.440 0.170
Net realized and unrealized gain
(loss) on investments ................................. (0.180) (0.578) 0.110 0.468 (0.140) 0.500
---------------------------------------------------------------------
Total from investment operations ........................ 0.286 (0.122) 0.417 0.909 0.300 0.670
---------------------------------------------------------------------
Less dividends and distributions:
Dividends from net
investment income ..................................... (0.466) (0.456) (0.307) (0.459) (0.430) (0.180)
Distributions from net realized
gain on investments ................................... - (0.042) - -- - -
---------------------------------------------------------------------
Total dividends and distributions ....................... (0.466) (0.498) (0.307) (0.459) (0.430) (0.180)
---------------------------------------------------------------------
Net asset value, end of period ............................ $10.630 $10.810 $11.430 $11.320 $10.870 $11.000
=====================================================================
Total return(4) ........................................... 2.79% (1.15%) 3.74% 8.57% 2.81% 6.47%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $327 $322 $30 $41 $40 $20
Ratio of expenses to
average net assets .................................... 1.79% 1.75% 1.75% 1.87% 1.75% 1.73%
Ratio of expenses to average net assets
prior to expense limitation
and expenses paid indirectly .......................... 1.79% 1.79% 1.90% 1.91% 1.75% 1.73%
Ratio of net investment income to average
net assets ............................................ 4.44% 4.04% 4.07% 4.10% 4.06% 4.00%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 4.44% 4.00% 3.92% 4.06% 4.06% 4.00%
Portfolio turnover ...................................... 7% 28% 23% 41% 58% 45%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations; ratios have been annualized and total return has
not been annualized.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
52
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Oregon Insured Fund - A Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Year
Ended Ended Ended Ended Ended Ended
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $9.810 $10.430 $10.310 $9.870 $10.050 $8.920
Income (loss) from investment operations:
Net investment income ................................... 0.467 0.458 0.320 0.481 0.480 0.490
Net realized and unrealized gain
(loss) on investments ................................. 0.100 (0.620) 0.120 0.444 (0.180) 1.140
---------------------------------------------------------------------
Total from investment operations ........................ 0.567 (0.162) 0.440 0.925 0.300 1.630
---------------------------------------------------------------------
Less dividends:
Dividends from net
investment income ..................................... (0.467) (0.458) (0.320) (0.485) (0.480) (0.500)
---------------------------------------------------------------------
Total dividends ......................................... (0.467) (0.458) (0.320) (0.485) (0.480) (0.500)
---------------------------------------------------------------------
Net asset value, end of period ............................ $9.910 $9.810 $10.430 $10.310 $9.870 $10.050
=====================================================================
Total return(3) ........................................... 6.04% (1.67%) 4.33% 9.66% 3.15% 18.71%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $22,712 $27,518 $24,336 $22,071 $20,913 $21,590
Ratio of expenses to average net assets ................. 0.85% 0.80% 0.71% 0.71% 0.71% 0.54%
Ratio of expenses to average net assets
prior to expense limitation and expenses
paid indirectly ....................................... 1.01% 1.02% 1.03% 0.94% 1.07% 1.11%
Ratio of net investment income to
average net assets .................................... 4.85% 4.44% 4.64% 4.83% 4.92% 5.12%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 4.69% 4.22% 4.32% 4.60% 4.56% 4.55%
Portfolio turnover ...................................... 0% 10% 5% 5% 40% 41%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
53
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Oregon Insured Fund - B Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Year
Ended Ended Ended Ended Ended Ended
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $9.810 $10.430 $10.310 $9.870 $10.050 $8.920
Income (loss) from investment operations:
Net investment income ................................... 0.394 0.381 0.268 0.422 0.430 0.440
Net realized and unrealized gain
(loss) on investments ................................. 0.100 (0.620) 0.120 0.434 (0.180) 1.140
--------------------------------------------------------------------
Total from investment operations ........................ 0.494 (0.239) 0.388 0.856 0.250 1.580
--------------------------------------------------------------------
Less dividends:
Dividends from
net investment income ................................. (0.394) (0.381) (0.268) (0.416) (0.430) (0.450)
--------------------------------------------------------------------
Total dividends ......................................... (0.394) (0.381) (0.268) (0.416) (0.430) (0.450)
--------------------------------------------------------------------
Net asset value, end of period ............................ $9.910 $9.810 $10.430 $10.310 $9.870 $10.050
====================================================================
Total return(3) ........................................... 5.24% (2.41%) 3.82% 8.90% 2.61% 18.10%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $7,484 $7,999 $6,011 $6,461 $4,758 $2,786
Ratio of expenses to average
net assets ............................................ 1.60% 1.55% 1.46% 1.39% 1.25% 1.04%
Ratio of expenses to average net
assets prior to expense limitation
and expenses paid indirectly .......................... 1.76% 1.77% 1.78% 1.62% 1.83% 1.86%
Ratio of net investment income to average
net assets ............................................ 4.10% 3.69% 3.89% 4.15% 4.37% 4.57%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 3.94% 3.47% 3.57% 3.92% 3.79% 3.75%
Portfolio turnover ...................................... 0% 10% 5% 5% 40% 41%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
54
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Oregon Insured Fund - C Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Period
Ended Ended Ended Ended Ended 7/7/95(3)
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $9.820 $10.440 $10.320 $9.880 $10.050 $9.630
Income (loss) from investment operations:
Net investment income ................................... 0.394 0.380 0.268 0.411 0.400 0.190
Net realized and unrealized gain
(loss) on investments ................................. 0.100 (0.620) 0.120 0.431 (0.170) 0.410
--------------------------------------------------------------------
Total from investment operations ........................ 0.494 (0.240) 0.388 0.842 0.230 0.600
--------------------------------------------------------------------
Less dividends:
Dividends from net
investment income ..................................... (0.394) (0.380) (0.268) (0.402) (0.400) (0.180)
--------------------------------------------------------------------
Total dividends ......................................... (0.394) (0.380) (0.268) (0.402) (0.400) (0.180)
--------------------------------------------------------------------
Net asset value, end of period ............................ $9.920 $9.820 $10.440 $10.320 $9.880 $10.050
====================================================================
Total return(4) ........................................... 5.24% (2.41%) 3.81% 8.75% 2.38% 6.35%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $1,609 $1,603 $999 $532 $360 $250
Ratio of expenses to
average net assets .................................... 1.60% 1.55% 1.46% 1.51% 1.55% 1.39%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly .............................. 1.76% 1.77% 1.78% 1.74% 1.82% 1.74%
Ratio of net investment income to
average net assets .................................... 4.10% 3.69% 3.89% 4.03% 4.03% 4.00%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 3.94% 3.47% 3.57% 3.80% 3.76% 3.65%
Portfolio turnover ...................................... 0% 10% 5% 5% 40% 41%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations; ratios have been annualized and total return has
not been annualized.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
55
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Wisconsin Fund - A Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Year
Ended Ended Ended Ended Ended Ended
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $9.550 $10.080 $10.010 $9.640 $9.780 $8.740
Income (loss) from investment operations:
Net investment income ................................... 0.460 0.452 0.304 0.466 0.460 0.480
Net realized and unrealized gain
(loss) on investments ................................. (0.040) (0.530) 0.070 0.383 (0.140) 1.040
---------------------------------------------------------------------
Total from investment operations ........................ 0.420 (0.078) 0.374 0.849 0.320 1.520
---------------------------------------------------------------------
Less dividends:
Dividends from net
investment income ..................................... (0.460) (0.452) (0.304) (0.479) (0.460) (0.480)
---------------------------------------------------------------------
Total dividends ......................................... (0.460) (0.452) (0.304) (0.479) (0.460) (0.480)
---------------------------------------------------------------------
Net asset value, end of period ............................ $9.510 $9.550 $10.080 $10.010 $9.640 $9.780
=====================================================================
Total return(3) ........................................... 4.62% (0.87%) 3.80% 9.07% 3.49% 17.74%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $28,737 $33,410 $34,489 $30,879 $28,292 $26,449
Ratio of expenses to average
net assets ............................................ 1.02% 1.00% 1.00% 0.99% 0.98% 0.88%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly .............................. 1.15% 1.03% 1.04% 1.07% 1.09% 1.09%
Ratio of net investment income to
average net assets .................................... 4.94% 4.54% 4.56% 4.76% 4.90% 5.05%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 4.81% 4.51% 4.52% 4.68% 4.79% 4.84%
Portfolio turnover ...................................... 6% 6% 16% 30% 38% 12%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
56
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Wisconsin Fund - B Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Period
Ended Ended Ended Ended Ended 4/22/95(3)
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $9.540 $10.070 $10.000 $9.630 $9.770 $9.390
Income (loss) from investment operations:
Net investment income ................................... 0.391 0.378 0.255 0.395 0.410 0.280
Net realized and unrealized gain
(loss) on investments ................................. (0.041) (0.530) 0.070 0.382 (0.140) 0.370
--------------------------------------------------------------------
Total from investment operations ........................ 0.350 (0.152) 0.325 0.777 0.270 0.650
--------------------------------------------------------------------
Less dividends:
Dividends from net
investment income ..................................... (0.390) (0.378) (0.255) (0.407) (0.410) (0.270)
--------------------------------------------------------------------
Total dividends ......................................... (0.390) (0.378) (0.255) (0.407) (0.410) (0.270)
--------------------------------------------------------------------
Net asset value, end of period ............................ $9.500 $9.540 $10.070 $10.000 $9.630 $9.770
====================================================================
Total return(4) ........................................... 3.84% (1.60%) 3.29% 8.27% 2.84% 7.08%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $3,243 $3,206 $2,621 $1,931 $1,339 $725
Ratio of expenses to average
net assets ............................................ 1.77% 1.75% 1.75% 1.72% 1.66% 1.45%
Ratio of expenses to average net
assets prior to expense limitation
and expenses paid indirectly .......................... 1.90% 1.78% 1.79% 1.80% 1.85% 1.70%
Ratio of net investment income to
average net assets .................................... 4.19% 3.79% 3.81% 4.03% 4.37% 4.31%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 4.06% 3.76% 3.77% 3.95% 4.18% 4.06%
Portfolio turnover ...................................... 6% 6% 16% 30% 38% 12%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations; ratios have been annualized and total return has
not been annualized.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
57
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Tax-Free Wisconsin Fund - C Class
------------------------------------------------------------------------------------------------------------------------------------
Year Year Eight Months Year Year Period
Ended Ended Ended Ended Ended 3/28/95(3)
8/31/00 8/31/99 8/31/98(1) 12/31/97(2) 12/31/96 to 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $9.570 $10.110 $10.030 $9.660 $9.790 $9.340
Income (loss) from investment operations:
Net investment income ................................... 0.392 0.377 0.259 0.380 0.390 0.300
Net realized and unrealized gain
(loss) on investments ................................. (0.032) (0.540) 0.075 0.390 (0.130) 0.440
--------------------------------------------------------------------
Total from investment operations ........................ 0.360 (0.163) 0.334 0.770 0.260 0.740
--------------------------------------------------------------------
Less dividends:
Dividends from net
investment income ..................................... (0.390) (0.377) (0.254) (0.400) (0.390) (0.290)
--------------------------------------------------------------------
Total dividends ......................................... (0.390) (0.377) (0.254) (0.400) (0.390) (0.290)
--------------------------------------------------------------------
Net asset value, end of period ............................ $9.540 $9.570 $10.110 $10.030 $9.660 $9.790
====================================================================
Total return(4) ........................................... 3.93% (1.70%) 3.38% 8.16% 2.74% 8.06%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ......................................... $1,375 $1,509 $1,283 $689 $555 $73
Ratio of expenses to average
net assets ............................................ 1.77% 1.75% 1.75% 1.81% 1.75% 1.77%
Ratio of expenses to average net
assets prior to expense limitation
and expenses paid indirectly .......................... 1.90% 1.78% 1.79% 1.89% 1.83% 1.77%
Ratio of net investment income to
average net assets .................................... 4.19% 3.79% 3.81% 3.94% 4.12% 4.04%
Ratio of net investment income to average
net assets prior to expense limitation
and expenses paid indirectly .......................... 4.06% 3.76% 3.77% 3.86% 4.04% 4.04%
Portfolio turnover ...................................... 6% 6% 16% 30% 38% 12%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
(3) Commencement of operations; ratios have been annualized and total return has
not been annualized.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
58
