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DELAWARE(SM)
INVESTMENTS
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Delaware Minnesota Municipal Bond Funds
Tax-Exempt Income
2000 SEMI-ANNUAL REPORT
[Tax-Exempt Income Artwork]
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A TRADITION OF SOUND INVESTING SINCE 1929
TABLE OF CONTENTS
Letter to Shareholders 1
Portfolio
Management Review 3
Performance Summary
Delaware Tax-Free
Minnesota Fund 7
Delaware Minnesota
Insured Fund 8
Delaware Tax-Free
Minnesota Intermediate
Fund 9
Delaware Minnesota
High-Yield Municipal
Bond Fund 10
Financial Statements
Statements
of Net Assets 11
Statements of
Operations 27
Statements of Changes
in Net Assets 28
Financial Highlights 30
Notes to Financial
Statements 42
A Commitment To Our Investors
Experienced
[] Our seasoned investment professionals average more than 15 years' experience.
[] For over 70 years, we have managed money in a variety of investment styles
that have weathered a full range of economic and market environments. We
opened our first mutual fund in 1938.
Disciplined
[] We follow strict investment policies and clear buy/sell guidelines.
[] We strive to balance risk and reward in order to provide relatively
conservative investment alternatives within any given asset class.
Consistent
[] We believe consistent processes are the best way to seek consistent
investment performance.
[] Our commitment to style consistency has earned us the confidence of
discriminating institutional and individual investors to manage approximately
$47 billion in assets as of December 31, 1999.
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 (24 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.
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Dear Shareholder
March 22, 2000
"MUNICIPAL BONDS WEATHERED THE TURBULENCE IN THE FIXED-INCOME ARENA SOMEWHAT
BETTER THAN U.S. TREASURY SECURITIES DURING THE PAST SIX MONTHS."
Recap of Events -- Economic activity in the United States continues to move
along ahead of expectations. An improving global economic outlook further
enhances the prospect of continued strong economic growth. During the last six
months, U.S. interest rates, as measured by the Treasury bond market, rose and
Treasury bond prices fell significantly. Interest rates rose for two reasons.
First, there was a perception that inflation would increase. Second, the Federal
Reserve was actively raising short-term interest rates. Each time Federal
Reserve Chairman Alan Greenspan addressed the media and spoke of restrictive
monetary policy, it tended to rattle the bond markets further.
The booming stock market, however, did heighten inflationary concerns
during our fiscal period. The Federal Reserve responded by raising interest
rates five times from June 30, 1999 through March 21, 2000. As of this writing,
the Federal funds target rate on overnight loans between banks, stands at 6.00%,
its highest level in five years. The Federal Reserve's actions have been
directed at slowing the economy and pre-empting inflation before it takes root.
Municipal bonds weathered the turbulence in the fixed-income arena somewhat
better than U.S. Treasury securities during the past six months. Municipal bond
yields steadily increased throughout this time period, but municipal bond prices
fluctuated less than U.S. Treasury securities (Source: Bloomberg). As of
February 29, 2000, the 30-year U.S. Treasury bond yield stood at 6.15%, while
30-year U.S. AAA-rated general obligation municipal bonds closed at 5.90%. For
investors in the 28% tax bracket, a 5.90% tax-free yield would be equivalent to
an 8.19% yield on a taxable investment, a yield that surpasses that of the
30-year Treasury.
Despite higher yields, municipal bonds in general, like most fixed-income
securities, lost value for the six months ended February 29, 2000. Delaware's
Minnesota Municipal Bond Funds were no exception--all four Funds were down for
the last six months. Please see the Portfolio Management Review for a discussion
of each Fund's performance.
Market Outlook -- We believe fixed-income investments play an important role in
well-balanced portfolios, even as stocks continue to capture more attention and
a larger share of investors' assets. Looking forward, we believe bonds may
remain in the shadow of stocks as long as economic growth continues in 2000.
However, tax-exempt municipal bonds, which your Fund
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holds, remain popular with investors for good reason. They offer a wide range of
benefits, including:
[] Attractive current income that is free from federal, and in some cases, state
and local taxes.*
[] A wide range of choices to meet your investment objectives with regard to
investment quality, maturity, type of bond and geographical location.
We realize that the past six months have been difficult for fixed-income
investors. We applaud you for remaining committed to your investment plan and
thank you for your continued confidence in 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 Delaware Investments
Family of Funds Family of Funds
* A portion of the income from tax-exempt funds may be subject to the
alternative minimum tax.
Average Total Returns
For Period Ended February 29, 2000 Six Months
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Delaware Tax-Free Minnesota Fund Class A -2.07%
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Delaware Minnesota Insured Fund Class A -0.62%
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Lipper Minnesota Municipal Debt Fund Average (52 funds) -1.47%
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Delaware Tax-Free Minnesota Intermediate Fund Class A -1.40%
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Lipper Other States Intermediate Municipal Debt Fund Average (78 funds) -0.22%
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Delaware Minnesota High-Yield Municipal Bond Fund Class A -5.71%
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Lipper High-Yield Municipal Debt Fund Average (57 funds) -2.90%
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Lehman Brothers Municipal Bond Index -0.24%
Lehman Brothers Insured Municipal Bond Index -0.21%
Merrill Lynch Insured Municipal Bond Index -1.33%
Lehman Brothers Five-Year Municipal Bond Index +0.56%
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All performance shown above is at net asset value without the effect of sales
charges and assumes reinvestment of distributions. Performance information for
all Fund classes can be found on pages 7 through 10. The Lipper categories
represent the average returns of municipal bond funds with similar investment
objectives tracked by Lipper Analytical. (Source: Lipper Analytical Services,
Inc.) The unmanaged Lehman Brothers and Merrill Lynch 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.
[Tax Exempt Income Artwork]
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PORTFOLIO MANAGEMENT REVIEW
Elizabeth H. Howell
Senior Portfolio Manager
March 22, 2000
The Funds' Results
Over the last six months, we have witnessed a combination of market events that
have pushed municipal bond yields higher and prices lower. Concerns related to
year 2000 computer issues helped reduce the amount of municipal bonds being
issued. Most municipalities issued bonds earlier in the year and sat out the end
of the year. In addition, investors' interest in municipal bonds was minimal
compared to their intense attention to the equity markets.
In spite of the reduced supply of new bonds at year-end, the total supply of
municipal bonds was ample and that gave us the opportunity to select bonds for
our funds that have solid credit ratings and the potential for future price
appreciation. Based on value measures, the relationship of municipal bonds to
Treasury bonds vacillated throughout the year. In our view, municipal bonds
offered better relative value for much of the time.
Portfolio Highlights
Minnesota's economy continues to steam ahead and is one of the strongest and
most diverse in the nation. Minnesota has maintained growth in many traditional
sectors and is experiencing strong growth in several emerging industries. For
example, Minnesota's Medical Alley is the home to many thriving
medical-technology companies, including 3M, Medtronic, St. Jude, Guidant/CPI,
and SciMed Life. The municipal bonds in our various Funds continue to look
financially sound and we believe will continue to be able to pay their interest
as a result of the state's economic strength.
Delaware Tax-Free Minnesota Fund
Delaware Tax-Free Minnesota Fund had a total return of -2.07% (Class A shares at
net asset value with distributions reinvested) for the six-month period ended
February 29, 2000. During this difficult period, we unfortunately did not
preserve capital as well as the average fund in the Lipper Minnesota Municipal
Debt Fund category.
We selected bonds which we believed had the potential to improve total return
and provide a competitive income stream. The majority of the Fund's assets were
invested in high-quality healthcare, housing and power authority issues. Within
these categories, we focused on bonds with strong credit ratings that were
selling for less than their face value.
As of February 29, 2000, Delaware Tax-Free Minnesota Fund's average effective
duration was 9.0 years. Duration is a common measure of a bond or bond fund's
sensitivity to interest rates. The longer the duration, the more
Delaware Tax-Free
Minnesota Fund
Portfolio Characteristics
February 29, 2000
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Current 30-Day SEC Yield*
Before expense limitation 4.82%
After expense limitation 4.86%
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Average Effective Duration 9.0 years
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Average Effective Maturity** 15.0 years
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*For Class A shares measured according to Securities and Exchange Commission
(SEC) guidelines. Current 30-day SEC yield as of 2/29/00 for Class B shares
was 4.26% before the expense limitation and 4.30% after the limitation. For
Class C shares the 30-day SEC yield was 4.25% before the expense limitation
and 4.29% after the limitation. Duration is a common measure of a bond or
bond fund's sensitivity to interest rates.
**Average effective maturity is the average time remaining until scheduled
principal repayment by issuers of portfolio securities.
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the bond's price will change for a given increase or decrease in interest rates.
Our duration is slightly longer than the average of similar funds because we are
striving to take advantage of the higher yield offered by longer term
securities.
Delaware Minnesota Insured Fund
Delaware Minnesota Insured Fund had a total return of -0.62% (Class A shares at
net asset value with distributions reinvested) for the six-month period ended
February 29, 2000. We succeeded in preserving capital to a greater degree than
the Fund's peer group which delivered a -1.47% average return for the same
six-month period.
Over the last six months, more than 50% of all new municipal issues were insured
according to Securities Data Corporation. This demonstrates the demand for the
added security of insured municipal bonds. The bonds in Delaware Minnesota
Insured Fund's portfolio are protected by insurance, which guarantees the timely
payment of principal and interest.
Over the last six months, 40.7% of your Fund's holdings were invested in what
are called pre-refunded bonds. Issuers often pre-refund their bonds when
interest rates are low in order to reduce their interest costs. Pre-refunded
bonds help the Fund because:
[] The credit quality of the bonds typically increases. Pre-refunded bonds are
backed by investments in U.S. government bonds, which are held in a separate
escrow account.
[] The price 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.
In most cases, once a bond is pre-refunded we continue to hold it. This normally
allows the Fund to collect an attractive level of current income and benefit
from better protection of principal. Pre-refunded bonds performed especially
well during the rising interest rate environment we've experienced over the last
six months.
Delaware Tax-Free Minnesota Intermediate Fund
Delaware Tax-Free Minnesota Intermediate Fund provided a total return of -1.40%
(Class A shares at net asset value with distributions reinvested) for the
six-month period ended February 29, 2000.
Delaware Minnesota
Insured Fund
Portfolio Characteristics
February 29, 2000
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Current 30-Day SEC Yield* 4.41%
Before expense limitation 4.41%
After expense limitation 4.43%
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Average Effective Duration 6.9 years
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Average Effective Maturity** 10.8 years
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*For Class A shares measured according to Securities and Exchange Commission
(SEC) guidelines. Current 30-day SEC yield as of 2/29/00 for Class B shares
was 3.84% before the expense limitation and 3.86% after the limitation. For
Class C shares the 30-day SEC yield was 3.84% before the expense limitation
and 3.85% after the limitation. Duration is a common measure of a bond or bond
fund's sensitivity to interest rates.
**Average effective maturity is the average time remaining until scheduled
principal repayment by issuers of portfolio securities.
"WE INTEND TO KEEP A WATCHFUL EYE ON CHANGES IN CONSUMER AND PRODUCER PRICES TO
GAUGE THEIR POTENTIAL EFFECTS ON MARKETS, MONETARY POLICY AND YOUR FUND'S
PERFORMANCE."
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As of February 29, 2000, Delaware Tax-Free Minnesota Intermediate Fund's
duration was positioned at 4.7 years, slightly shorter than the average of the
Lipper universe of single-state intermediate funds. When interest rates rose
over the past six months, your Fund was better protected than its peer group.
One of our primary goals for Delaware Tax-Free Minnesota Intermediate Fund is a
high tax-free dividend. We believe that intermediate-term bonds in Minnesota
help us achieve this goal by offering an attractive balance between the reduced
price volatility of short-term bonds and the higher income potential of longer
term bonds.
Delaware Minnesota High-Yield Municipal Bond Fund
Delaware Minnesota High-Yield Municipal Bond Fund provided a negative total
return of -5.71% (Class A shares at net asset value with distributions
reinvested) for the six months ended February 29, 2000. Unfortunately, your Fund
did not surpass the average return of other high-yield municipal bond funds, as
represented by the Lipper High-Yield Municipal Debt Fund Average.
Over the last six months, we increased Delaware Minnesota High-Yield Municipal
Bond Fund's holdings of non-rated bonds. They now represent more than 72.3% of
the portfolio. In most cases, these bonds were issued by small, rural
municipalities looking to avoid the expense of obtaining a Standard & Poor's
rating. We rigorously research non-rated bond issues before we purchase them for
your Fund and continue to monitor their credit quality on a regular basis.
Shareholders also benefited somewhat from Delaware Minnesota High-Yield
Municipal Bond Fund's tax-efficient portfolio management. In the first half of
fiscal 2000, we held onto our appreciated bonds and distributed no capital
gains.
Outlook
The U.S. seems to be the engine of growth for the entire world at this time. We
believe strong forward momentum for the U.S. economy is likely to result in
solid growth for the remainder of this year. We don't think this will create an
inflationary environment if labor productivity continues to increase.
The Federal Reserve has been on a path of increasing short-term interest rates.
There have been five one-quarter point increases in short-term interest rates
since June 1999. Clearly, the Federal Reserve's goal is to slow the pace of the
U.S. economic climate to a non-inflationary rate of growth.
Delaware Tax-Free Minnesota
Intermediate Fund
Portfolio Characteristics
February 29, 2000
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Current 30-Day SEC Yield* 4.51%
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Average Effective Duration 4.7 years
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Average Effective Maturity** 6.2 years
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*For Class A shares measured according to Securities and Exchange Commission
(SEC) guidelines. Current 30-day SEC yield as of 2/29/00 was 3.78% for Class
B shares and 3.79% for Class C Shares. Duration is a common measure of a bond
or bond fund's sensitivity to interest rates.
Delaware Minnesota High-Yield
Municipal Bond Fund
Portfolio Characteristics
February 29, 2000
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Current 30-Day SEC Yield*
Before expense limitation 5.74%
After expense limitation 6.18%
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Average Effective Duration 10.6 years
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Average Effective Maturity** 21.9 years
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*For Class A shares measured according to Securities and Exchange Commission
(SEC) guidelines. Current 30-day SEC yields as of 2/29/00 for Class B and C
shares were 5.21% before the expense limitation and 5.67% after the
limitation.
**Average effective maturity is the average time remaining until scheduled
principal repayment by issuers of portfolio securities.
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We have seen some slowdown in the economy and the equity markets, as evidenced
by the recent drop in the Dow Jones Industrial Average, which is down -12.56%
for the six-month period ended February 29, 2000. We think longer term
bonds--including municipal bonds--could potentially increase in price if the
equity market remains subdued.
Regardless of market conditions, municipal bond funds have the potential to
offer valuable asset allocation benefits without adding to your taxable
investment income.* In our view, investors seeking to diversify their portfolios
with less volatile investments will continue to find attractive opportunities in
municipal bonds and municipal bond funds in the years to come.
* A portion of the income from tax-exempt funds may be subject to the
alternative minimum tax.
"REGARDLESS OF MARKET CONDITIONS, MUNICIPAL BOND FUNDS HAVE THE POTENTIAL TO
OFFER VALUABLE ASSET ALLOCATION BENEFITS WITHOUT ADDING TO YOUR TAXABLE
INVESTMENT INCOME."*
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FUND BASICS
Fund Objective
Seeks as high a level of current income exempt from federal income tax and from
the Minnesota state personal income tax, as is consistent with preservation of
capital.
Total Fund Assets
$373.22 million
Number of Holdings
152
Fund Start Date
February 29, 1984
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 DEFFX
Class B DMOBX
Class C DMOCX
DELAWARE TAX-FREE MINNESOTA
FUND PERFORMANCE
Average Total Returns
Through February 29, 2000 Lifetime 10 Years Five Years One Year
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Class A (Est. 2/29/84)
Excluding Sales Charge +7.88% +6.09% +4.78% -4.95%
Including Sales Charge +7.63% +5.69% +3.98% -8.49%
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Class B (Est. 3/11/95)
Excluding Sales Charge +4.20% -5.63%
Including Sales Charge +3.86% -9.25%
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Class C (Est. 5/4/94)
Excluding Sales Charge +4.16% +4.03% -5.59%
Including Sales Charge +4.16% +4.03% -6.49%
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Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Returns and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
results excluding sales charge assume either that contingent 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
Minnesota Fund during the period. Performance would have been lower if the
expense limitation was not in effect.
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FUND BASICS
Fund Objective
Seeks as high a level of current income exempt from federal income tax and from
the Minnesota state personal income tax, as is consistent with preservation of
capital.
Total Fund Assets
$259.64 million
Number of Holdings
118
Fund Start Date
May 1, 1987
Your Fund Manager
Elizabeth H. Howell
NASDAQ Symbols
Class A MNINX
Class B DVMBX
Class C DVMCX
DELAWARE MINNESOTA INSURED
FUND PERFORMANCE
Average Total Returns
Through February 29, 2000 Lifetime Ten Years Five Years One Year
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Class A (Est. 5/1/87)
Excluding Sales Charge +6.59% +6.27% +4.96% -2.54%
Including Sales Charge +6.28% +5.86% +4.15% -6.21%
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Class B (Est. 3/7/95)
Excluding Sales Charge +4.39% -3.27%
Including Sales Charge +4.05% -6.98%
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Class C (Est. 5/4/94)
Excluding Sales Charge +4.26% +4.17% -3.36%
Including Sales Charge +4.26% +4.17% -4.28%
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Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Returns and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
results excluding sales charge assume either that contingent sales charges did
not apply or the investment was not redeemed. Past performance is not a
guarantee of future results.
Class A shares of each Fund 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 Minnesota
Insured Fund during the period. Performance would have been lower if the expense
limitation was not in effect.
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FUND BASICS
Fund Objective
Seeks to provide investors with preservation of capital and, secondarily,
current income exempt from federal income tax and the Minnesota state personal
income tax.
Total Fund Assets
$53.18 million
Number of Holdings
50
Fund Start Date
October 27, 1985
Your Fund Manager
Elizabeth H. Howell
NASDAQ Symbols
Class A DXCCX
Class B DVSBX
Class C DVSCX
DELAWARE TAX-FREE MINNESOTA INTERMEDIATE
FUND PERFORMANCE
Average Total Returns
Through February 29, 2000 Lifetime 10 Years Five Years One Year
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Class A (Est. 10/27/85)
Excluding Sales Charge +5.38% +4.95% +3.87% -3.04%
Including Sales Charge +5.18% +4.66% +3.30% -5.68%
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Class B (Est. 8/15/95)
Excluding Sales Charge +2.57% -3.86%
Including Sales Charge +2.57% -5.70%
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Class C (Est. 4/30/94)
Excluding Sales Charge +3.11% +3.07% -3.86%
Including Sales Charge +3.11% +3.07% -4.78%
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Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Returns and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
results excluding sales charge assume either that contingent sales charges did
not apply or the investment was not redeemed. Past performance is not a
guarantee of future results.
Class A shares of each Fund have a 2.75% 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 2% if redeemed before the end of the sixth year
for each Fund.
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
Minnesota Intermediate Fund during the period. Performance would have been lower
if the limitation was not in effect.
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FUND BASICS
Fund Objective
Seeks as high a level of current income exempt from federal income tax and from
the Minnesota state personal income tax, primarily through investment in medium-
and lower grade municipal obligations.
Total Fund Assets
$54.51 million
Number of Holdings
71
Fund Start Date
June 4, 1996
Your Fund Manager
Elizabeth H. Howell
NASDAQ Symbols
Class A DVMHX
Class B DVMYX
Class C DVMMX
DELAWARE MINNESOTA HIGH-YIELD
MUNICIPAL BOND FUND PERFORMANCE
Average Total Returns
Through February 29, 2000 Lifetime One Year
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Class A (Est. 6/4/96)
Excluding Sales Charge +4.10% -7.69%
Including Sales Charge +3.04% -11.17%
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Class B (Est. 6/12/96)
Excluding Sales Charge +3.93% -8.40%
Including Sales Charge +3.23% -11.89%
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Class C (Est. 6/7/96)
Excluding Sales Charge +3.35% -8.40%
Including Sales Charge +3.35% -9.27%
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Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Returns and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
results excluding sales charge assume either that contingent sales charges did
not apply or the investment was not redeemed. Past performance is not a
guarantee of future results.
Class A shares of each Fund 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
for each Fund.
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 Minnesota
High-Yield Municipal Bond Fund during the period. Performance would have been
lower if the expense limitation was not in effect.
High-yielding, non-investment grade bonds involve higher risk. Adverse
conditions may affect the issuer's ability to pay interest and principal on
these securities.
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Statement of Net Assets
DELAWARE TAX-FREE MINNESOTA FUND
Principal Market
February 29, 2000 (Unaudited) Amount Value
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Municipal Bonds - 98.28%
Continuing Care/Retirement Revenue Bonds - 1.09%
Eden Prairie Health Care Facilities
Revenue Refunding Castle Ridge
Care Center 5.70% 7/1/28 ...................... $1,740,000 $1,336,146
Minnesota Agriculture & Economic
Development Board Revenue
Healthcare - Benedictine Health
System 5.75% 2/1/29 ........................... 1,195,000 930,845
New Hope Housing & Health
Minnesota Masonic Home North
Ridge 5.875% 3/1/29 ........................... 1,500,000 1,194,315
Springfield St. John's Lutheran Home
Revenue 8.50% 11/1/19 ......................... 600,000 620,028
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4,081,334
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General Obligation Bonds - 10.05%
***Farmington Independent School
District Number 192 Capital
Appreciation Series B (FSA)
6.236% 2/1/20 ................................. 2,650,000 779,657
***Farmington Independent School
District Number 192 Capital
Appreciation Series B (FSA)
6.267% 2/1/21 ................................. 2,500,000 687,500
Hennepin County
5.75% 10/1/10 ................................. 7,990,000 8,195,982
Hutchinson Independent School
District #423 Series A (MN
School District Enhanced)
5.85% 2/1/18 .................................. 1,700,000 1,705,236
***Lakeville Independent School
District #194 Capital Appreciation
Series B (FSA) 6.206% 2/1/19 .................. 8,000,000 2,516,640
***Mahtomedi Independent School
District #832 Series B (MBIA)
5.815% 2/1/14 ................................. 1,540,000 693,308
Minneapolis Sports Arena Project
5.125% 10/1/20 ................................ 7,690,000 6,892,009
Minneapolis Unlimited Sales Tax Series
1992 6.30% 10/1/08 ............................ 1,750,000 1,825,161
**Minnesota State Inverse Floater
ROLS 5.79% 11/1/16 ............................ 2,420,000 1,982,028
**Minnesota State Inverse Floater
ROLS 5.79% 11/1/17 ............................ 1,135,000 900,214
**Minnesota State Inverse Floater
ROLS 5.79% 11/1/18 ............................ 1,145,000 894,588
Puerto Rico Commonwealth Public
Improvement 5.25% 7/1/18 ...................... 1,250,000 1,167,575
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Principal Market
Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds (continued)
General Obligation Bonds (continued)
Rochester Tax Increment
6.50% 12/1/04 ................................. $ 1,000,000 $ 1,004,330
***Rosemount Independent School
District #196 Series B (FSA)
5.594% 4/1/11 ................................. 2,600,000 1,410,136
***Rosemount Independent School
District #196 (FSA)
5.655% 4/1/12 ................................. 1,850,000 942,779
***Rosemount Independent School
District #196 (FSA)
5.745% 4/1/13 ................................. 1,915,000 912,421
Rosemount Independent School
District #196 (FSA)
5.875% 4/1/15 ................................. 1,375,000 1,389,946
***Sartell Independent School
District #748 (MBIA)
5.745% 2/1/13 ................................. 540,000 259,735
***Sartell Independent School
District #748 (MBIA)
5.886% 2/1/15 ................................. 1,075,000 452,371
***Sartell Independent School
District #748 (MBIA)
5.936% 2/1/16 ................................. 1,750,000 689,535
***Sartell Independent School
District #748 (MBIA)
5.986% 2/1/17 ................................. 1,600,000 589,728
St. Paul Minnesota Tax Increment -
Block 39 Project A
4.75% 2/1/25 .................................. 2,000,000 1,636,520
-----------
37,527,399
-----------
Higher Education Revenue Bonds - 5.41%
Minnesota Higher Education Augsburg
College Series 4F1 6.25% 5/1/23 ............... 1,000,000 966,690
Minnesota Higher Education Carleton
College 5.75% 11/1/12 ......................... 4,000,000 4,047,160
Minnesota Higher Education Facilities
Revenue Hamline University
6.00% 10/1/12 ................................. 1,250,000 1,253,288
Minnesota Higher Education Facilities
Revenue Hamline University
6.00% 10/1/16 ................................. 1,790,000 1,749,510
Minnesota Higher Education St.
Benedicts College 6.20% 3/1/16 ................ 1,000,000 1,005,950
Minnesota Higher Education St. Thomas
University Series R2 5.60% 9/1/14 ............. 1,000,000 987,310
University Of Minnesota Series A
5.50% 7/1/21 .................................. 10,500,000 10,153,815
-----------
20,163,723
-----------
11
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Tax-Free Minnesota Fund Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds (continued)
Hospital Revenue Bonds - 21.14%
Bemidji Hospital Facilities Revenue
North County Health
6.05% 9/1/16 ................................... $ 600,000 $ 588,360
Bemidji Hospital Facilities Revenue
North County Health
6.05% 9/1/24 ................................... 1,825,000 1,679,073
Brainerd Benedictine Health Care
Systems for St. Joseph's Hospital
(Connie Lee) 6.00% 2/15/12 ..................... 2,250,000 2,323,642
Duluth Economic Development for
St. Luke's Hospital (Connie Lee)
6.40% 5/1/18 ................................... 3,295,000 3,355,892
Duluth Economic Development
Authority Benedictine for St. Marys'
Hospital (Connie Lee)
6.00% 2/15/20 .................................. 9,450,000 9,277,348
Marshall Medical Center Weiner
Memorial Medical Center
Project 6.00% 11/1/28 .......................... 1,000,000 796,750
Minneapolis Fairview Hospital Series
91B (MBIA) 6.50% 1/1/11 ........................ 3,000,000 3,130,080
Minneapolis/St. Paul Housing &
Redevelopment Authority - Childrens
Health Care Series 5.50% 8/15/25 ............... 9,000,000 8,262,810
Minneapolis/St. Paul Housing
& Redevelopment Authority
Health Care System for Healthspan
Series A (AMBAC) 4.75% 11/15/18 ................ 4,000,000 3,372,160
Robbinsdale North Memorial Medical
(AMBAC) 5.50% 5/15/23 .......................... 10,725,000 9,980,900
Rochester Health Care Facilities
Revenue Mayo Foundation
Series A 5.50% 11/15/27 ........................ 7,000,000 6,371,750
Rochester Health Care Facilities
Revenue Mayo Foundation
Series B 5.50% 11/15/27 ........................ 4,200,000 3,823,050
**Rochester Health Care Facilities
Revenue Reg IRS for Mayo Clinic
Series H Inverse Floater
7.86% 11/15/15 ................................. 3,500,000 3,597,965
St. Cloud Hospital Facilities Revenue
for St. Cloud Hospital (AMBAC)
5.30% 10/1/20 .................................. 3,250,000 2,931,988
St. Louis Park Commercial Development
Revenue for -G & N, L P Project
(Methodist Hospital Guaranteed)
7.25% 6/1/13 ................................... 1,120,000 1,144,136
St. Louis Park Methodist Hospital
(AMBAC) 5.20% 7/1/23 ........................... 10,220,000 8,980,110
<PAGE>
Principal Market
Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds (continued)
Hospital Revenue Bonds (continued)
St. Paul Housing & Redevelopment
Authority for Health East Authority
Hospital Revenue 5.70% 11/1/15 .................. $1,300,000 $ 1,057,459
St. Paul Housing & Redevelopment
Hospital Revenue for Health East
Series A 6.625% 11/1/17 ......................... 8,440,000 7,489,234
Washington County Housing &
Redevelopment Authority for Health
Care 5.50% 11/15/27 ............................. 1,000,000 720,390
----------
78,883,097
----------
Housing Revenue Bonds - 19.00%
Austin Housing & Redevelopment
Authority Courtyard Residence
Series 95A 7.25% 1/1/26 ......................... 500,000 511,290
Bloomington Housing & Redevelopment
Authority Senior Summerhouse
Bloomington Project 6.125% 5/1/35 ............... 3,420,000 2,846,910
Brooklyn Center Multifamily Housing
Revenue Ponds Family Housing
Project Section 8 5.90% 1/1/20 .................. 2,250,000 2,185,830
Burnsville Multifamily Bridgeway
Apartments (FHA) 7.625% 2/1/24 .................. 3,370,000 3,364,136
Carver County Housing & Redevelopment
Authority Multifamily Revenue
Lake Grace Apartments 6.00% 7/1/28 .............. 1,435,000 1,391,189
Dakota County Housing & Redevelopment
Authority Multifamily Revenue,
Affordable Housing View Point
Project 6.125% 11/1/17 .......................... 2,475,000 2,208,863
Dakota County Housing & Redevelopment
Authority Single Family (GNMA)
8.10% 3/1/16 .................................... 30,000 30,862
Eden Prairie Multifamily Revenue,
Eden Investments (FHA)
7.40% 8/1/25 .................................... 400,000 410,240
Eden Prairie Multifamily Windslope
Apartments Section 8 Housing
7.10% 11/1/17 ................................... 1,585,000 1,632,471
Eden Prairie Multifamily Homes
Tanager Creek (GNMA)
8.05% 6/20/31 ................................... 7,605,000 8,350,138
Hopkins Renaissance Multifamily
Housing Section 8 6.375% 4/1/20 ................. 1,000,000 1,005,750
Little Canada Multifamily Housing
Revenue Housing Alternative
Development Company Project
Series A 6.10% 12/1/17 .......................... 1,625,000 1,497,600
12
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Tax-Free Minnesota Fund Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds (continued)
Housing Revenue Bonds (continued)
Little Canada Multifamily Housing
Revenue Housing Alternative
Development Company Project
Series A 6.25% 12/1/27 .......................... $2,900,000 $2,644,800
Minneapolis Housing Facility Revenue
for Augustana Chapel View Project
Series 1993 7.00% 4/1/18 ........................ 1,000,000 952,760
Minneapolis Multifamily Housing -
Trinity Apartments Series A
Series A 6.75% 5/1/21 ........................... 2,100,000 2,039,961
Minneapolis Multifamily Housing for
Nicollet Towers 6.00% 12/1/19 ................... 2,000,000 1,970,240
Minneapolis Multifamily Mortgage
for Seward Towers Project
(GNMA) 7.375% 12/20/30 .......................... 4,000,000 4,085,600
Minnesota Housing Finance Agency
Multifamily Housing 6.95% 2/1/14 ................ 1,500,000 1,546,980
Minnesota Housing Finance Agency
Multifamily Housing Series 92A
6.95% 8/1/17 .................................... 745,000 771,917
Minnesota Housing Finance Agency
Rental Housing Series B
6.25% 8/1/22 .................................... 935,000 935,019
Minnesota Housing Finance Agency
Single Family Mortgage Series
91C 7.10% 7/1/11 ................................ 290,000 298,433
Minnetonka Multifamily Beacon
Hill Project (Presbyterian Homes
Guaranteed) 7.70% 6/1/25 ........................ 2,000,000 1,997,420
Oakdale Housing Oak Meadows
Project 7.00% 4/1/27 ............................ 6,800,000 6,552,344
Park Rapids Multifamily Revenue
The Court Apartments Project Section 8
6.30% 2/1/20 .................................... 3,190,000 2,891,607
Rochester Multifamily Revenue,
Wedum Shorewood Campus
6.60% 6/1/36 .................................... 2,000,000 1,855,740
St. Louis Park Residential Mortgage
Revenue for Single Family
(GNMA) 7.25% 4/20/23 ............................ 977,000 1,001,503
St. Louis Park Multifamily Housing
Revenue Community Housing
(FHA) 6.25% 12/1/28 ............................. 3,855,000 3,887,459
St. Louis Park Multifamily Westwind
Apartments Housing (GNMA)
5.75% 1/1/29 .................................... 3,865,000 3,637,274
<PAGE>
Principal Market
Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds (continued)
Housing Revenue Bonds (continued)
St. Paul Housing & Redevelopment
Agency (Executive Life Guaranteed
Investment Contract) Como Lake Project
(FHA) 7.50% 3/1/26 .............................. $1,000,000 $ 980,000
St. Paul Housing & Redevelopment
Single Family Mortgage (FNMA)
6.90% 12/1/11 ................................... 28,000 28,234
St. Paul Housing & Redevelopment
Single Family Mortgage
(FNMA) 6.90% 12/1/21 ............................ 1,305,000 1,340,196
Stillwater Multifamily Housing
Stillwater Cottages 7.00% 11/1/27 ............... 1,000,000 923,390
Wadena Housing & Redevelopment
Agency Humphrey Manor - (Section 8)
6.00% 2/1/19 .................................... 2,130,000 2,117,966
Washington County Housing &
Redevelopment Authority Revenue
Briar Pond - Series C (GNMA)
7.25% 8/20/34 ................................... 1,020,000 955,475
Wells Housing & Redevelopment
Agency Broadway Apartments Project
Section 8 7.00% 1/1/19 .......................... 1,025,000 1,043,204
Willmar Housing & Redevelopment
Agency Highland Apartments Section 8
5.85% 6/1/19 .................................... 1,050,000 1,015,781
-----------
70,908,582
-----------
Industrial Development Revenue Bonds - 8.46%
Andover Development Revenue
Downtown Center Project Series A
7.00% 12/1/12 ................................... 1,000,000 1,007,820
Becker Pollution Control Revenue
for Northern States Power Co Series
89A 6.80% 4/1/07 ................................ 2,000,000 2,062,560
Cloquet Pollution Control Revenue
for Potlatch Corporation
5.90% 10/1/26 ................................... 15,000,000 13,535,850
East Grand Forks for American Crystal
Sugar Pollution Control Revenue
7.75% 4/1/18 .................................... 1,230,000 1,270,442
International Falls Pollution Control
Revenue Boise Cascade Project
5.65% 12/1/22 ................................... 1,500,000 1,274,040
Richfield Commercial Development
Revenue for Richfield Shoppes
8.375% 10/1/13 .................................. 2,200,000 2,376,946
Seaway Port Authority Duluth Industrial
Development Dock & Wharf Revenue
Cargill Project Series E
6.125% 11/1/14 .................................. 4,500,000 4,570,200
13
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Tax-Free Minnesota Fund Amount Value
- --------------------------------------------------------------------
Municipal Bonds (continued)
Industrial Development Revenue Bonds (continued)
St. Cloud Commercial Development
Revenue for Northwest Center
Association 7.50% 8/1/12 ........... $ 4,118,971 $ 4,149,369
St. Paul Port Authority Commercial
Development Revenue Fort Road
Medical/Irvine Park (Asset Gty)
7.50% 9/1/02 ....................... 1,300,000 1,315,652
-----------
31,562,879
-----------
Lease/Certificates of Participation - 0.67%
Beltrami County Housing &
Redevelopment Authority Revenue
6.20% 2/1/14 ....................... 1,010,000 1,023,978
West St. Paul Commercial Mortgage
K-Mart Lease 7.00% 11/1/07 ............ 1,441,720 1,483,631
-----------
2,507,609
-----------
Power Authority Revenue Bonds - 16.66%
Bass Brook Pollution Control Revenue
for Minnesota Power & Light
6.00% 7/1/22 ....................... 17,000,000 15,852,670
Bass Brook Pollution Control Revenue
for Minnesota Power & Light
Company (MBIA) 6.00% 7/1/22 ........ 1,750,000 1,753,115
***Northern Minnesota Municipal Power
Agency (AMBAC) 5.483% 1/1/09 ....... 3,815,000 2,365,109
Northern Minnesota Municipal Power
Agency (FSA) 5.25% 1/1/13 .......... 4,000,000 3,897,760
Northern Minnesota Municipal Power
Agency Electric System Revenue
(AMBAC) 5.50% 1/1/18 .............. 9,200,000 8,786,920
**Puerto Rico Electric Power Authority
Revenue Series DD Inverse Floater
ROLS (FSA) 5.11% 7/1/19 ............ 3,050,000 2,041,670
Puerto Rico Electric Power Authority
Series EE 4.75% 7/1/24 ............. 3,900,000 3,187,119
Puerto Rico Electric Power Authority
Series X 5.50% 7/1/25 .............. 2,930,000 2,725,808
Puerto Rico Electric Power Authority
Series Z 5.25% 7/1/21 .............. 1,500,000 1,340,670
Southern Minnesota Municipal Power
Agency (MBIA) 4.75% 1/1/16 ......... 7,200,000 6,464,664
Southern Minnesota Municipal Power
Agency (MBIA) 5.75% 1/1/18 ......... 7,770,000 7,633,403
***Southern Minnesota Municipal Power
Agency (MBIA) 6.076% 1/1/19 ........ 8,210,000 2,658,316
***Southern Minnesota Municipal Power
Agency (MBIA) 6.127% 1/1/21 ........ 5,000,000 1,421,700
Southern Minnesota Municipal Power
Agency Supply System (AMBAC)
5.50% 1/1/15 ....................... 1,560,000 1,522,825
<PAGE>
Principal Market
Amount Value
- --------------------------------------------------------------------
Municipal Bonds (continued)
Power Authority Revenue Bonds (continued)
Western Municipal Power Agency
Revenue 6.125% 1/1/16 ............... $ 525,000 $ 524,932
-----------
62,176,681
-----------
*Pre-Refunded/Escrowed to Maturity - 12.23%
Blaine Industrial Development Revenue
(Ball Corp.) (Escrowed to Maturity)
8.25% 12/1/00 ........................ 300,000 309,006
Bloomington Tax Increment (Escrowed
to Maturity) 9.75% 2/1/08 ............ 500,000 598,885
Brainerd Independent School
District #181 7.00% 6/1/11-01 ........ 390,000 399,824
Faribault Independent School
District #656 (MN School District
Credit Enhanced) 6.10% 6/1/10-04 ........ 1,000,000 1,033,020
Glencoe/Mcleod County Health Care
8.50% 12/1/15-00 ..................... 500,000 515,915
Kenyon Wanamingo Independent School
District (MBIA) 6.00% 2/1/18-05 ...... 2,350,000 2,419,160
Little Canada Health Care 1992
(Presbyterian Homes Guaranteed)
7.25% 7/1/12-00 ...................... 1,000,000 1,029,590
Maplewood Independent School District
#622 (FSA) 7.10% 2/1/25-05 ........... 10,000,000 10,885,800
Minneapolis Health Care American
Baptist Homes 8.70% 11/1/09-01 ....... 2,485,000 2,687,801
Minneapolis/St. Paul Housing &
Redevelopment Authority HealthOne
(MBIA) 7.40% 8/15/11-00 .............. 1,360,000 1,406,131
Minnesota Public Facilities Authority
Water Pollution Control
6.95% 3/1/13-01 ...................... 5,220,000 5,455,944
Minnesota Public Facilities Authority
Water Pollution Control
6.25% 3/1/16-05 ...................... 4,400,000 4,632,496
Owatonna Public Utilities
6.75% 1/1/16-01 ...................... 1,000,000 1,019,640
Pine Island Independent School District
#255 (FSA) 6.625% 6/1/12-01 .......... 240,000 244,973
Pine Island Independent School District
#255 (FSA) 6.625% 6/1/13-01 .......... 310,000 316,423
Pine Island Independent School District
#255 (FSA) 6.625% 6/1/14-01 .......... 330,000 336,838
Pine Island Independent School District
#255 (FSA) 6.625% 6/1/15-01 .......... 355,000 362,356
Pine Island Independent School District
#255 (FSA) 6.625% 6/1/16-01 .......... 380,000 387,874
Plainview Independent School District
#810 6.70% 2/1/06-03 ................. 385,000 399,973
14
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Tax-Free Minnesota Fund Amount Value
- ----------------------------------------------------------------------
Municipal Bonds (continued)
Pre-Refunded/Escrowed to Maturity (continued)
Plainview Independent School
District #810 6.75% 2/1/08-03 ........ $ 445,000 $ 462,898
Plainview Independent School
District #811 6.75% 2/1/07-03 ........ 420,000 436,892
Red Wing Housing & Redevelopment
Agency Jordan Tower Section 8 Series
92 7.00% 1/1/19-02 ................... 1,500,000 1,583,655
**Richfield Independent School
District #280 Series C, Inverse Floater
5.34% 2/1/15-03 ...................... 1,365,000 1,392,314
Southern Minnesota Municipal Power
Agency Revenue (Escrowed to Maturity)
(MBIA) 5.75% 1/1/18 .................. 1,000,000 982,160
Southern Minnesota Municipal Power
Agency Supply System (Escrowed to
Maturity) (AMBAC) 5.50% 1/1/15 ....... 990,000 995,326
Spring Park Minnesota Twin Birch
Health Care Center (Guarantor: Presbyterian
Homes of Minnesota)
8.25% 8/1/11-01 ...................... 600,000 640,380
St. Cloud Housing & Redevelopment
Agency Northway A&B Project -
Section 8 7.50% 12/1/18-00 ........... 2,045,000 2,134,960
St. Louis Park Methodist Hospital
(AMBAC) 7.25% 7/1/18-00 .............. 775,000 798,196
University Of Minnesota Series A
(Escrowed to Maturity)
6.00% 2/1/11 ......................... 1,500,000 1,508,085
Western Minnesota Municipal Power
Agency Revenue (Escrowed to Maturity)
(MBIA) 9.75% 1/1/16 .................. 185,000 260,715
-----------
45,637,230
-----------
<PAGE>
Principal Market
Amount Value
- ----------------------------------------------------------------------
Municipal Bonds (continued)
Water & Sewer Revenue Bonds - 2.04%
**Minnesota Public Facilities Authority
Water Pollution Control Revenue
Inverse Floater 5.01% 3/1/16 ........ $ 2,000,000 $ 1,454,240
Minnesota Public Facilities Authority
Water Pollution Control Revenue
4.75% 3/1/19 ........................ 2,000,000 1,708,760
Puerto Rico Aqueduct & Sewer
Authority 5.00% 7/1/15 .............. 2,000,000 1,823,640
Puerto Rico Aqueduct & Sewer
Authority 5.00% 7/1/19 .............. 3,000,000 2,631,210
-----------
7,617,850
-----------
Other Revenue Bonds - 1.53%
Minneapolis Community Development
Agency Common Bond Fund
7.40% 12/1/21 ....................... 795,000 837,302
Minneapolis Community Development
Agency Common Bond Fund
7.95% 12/1/11 ....................... 855,000 909,156
Minneapolis Community Development
Agency Common Bond Fund
Opportunity Workshop Project
Series 2A 7.125% 12/1/05 ............ 510,000 532,914
***Minneapolis Community Development
Agency Tax Increment Revenue
5.483% 9/1/09 ....................... 5,750,000 3,438,327
-----------
5,717,699
-----------
Total Municipal Bonds
(cost of $370,631,356) .............. 366,784,083
-----------
15
<PAGE>
Statement of Net Assets (continued)
Market
Delaware Tax-Free Minnesota Fund Value
- -------------------------------------------------------------------
Total Market Value of Securities - 98.28%
(cost $370,631,356) .................... $366,784,083
Receivables and Other Assets
Net of Liabilities - 1.72% ............. 6,437,992
------------
Net Assets Applicable to 31,969,550
Shares Outstanding - 100.00% ........... $373,222,075
============
Net Asset Value - Delaware Tax-Free
Minnesota Fund A Class
($353,482,527 / 30,279,968 shares) .... $11.67
------
Net Asset Value - Delaware Tax-Free
Minnesota Fund B Class
($12,893,001 / 1,103,973 shares) ....... $11.68
------
Net Asset Value - Delaware Tax-Free
Minnesota Fund C Class
($6,846,547 / 585,609 shares) .......... $11.69
------
- ----------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in
which each bond is pre-refunded.
** Inverse Floater represents a security that pays interest at rates that
increase (decrease) with a decrease (increase) in a specific index.
Interest rates disclosed are in effect as of February 29, 2000.
*** Zero Coupon Bond - The interest rate shown is the effective yield as of
February 29, 2000.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
Asset Gty - Insured by the Asset Guaranty Insurance Company
Connie Lee - Insured by College Construction Insurance Association
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by the Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
<PAGE>
Market
Value
- -----------------------------------------------------------------
Components of Net Assets at February 29, 2000:
Shares of beneficial interest (unlimited
authorization - no par) ................ $380,012,789
Undistributed net investment loss ......... (4,935)
Accumulated net realized loss
on investments ......................... (2,938,506)
Net unrealized depreciation
on investments ......................... (3,847,273)
------------
Total net assets .......................... $373,222,075
============
Net Asset Value and Offering Price Per Share -
Delaware Tax-Free Minnesota Fund
Net asset value A Class (A) ............... $11.67
Sales charge (3.75% of offering price
or 3.86% of amount invested
per share) (B) ......................... 0.45
------
Offering price ............................ $12.12
======
- ----------------------
(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
16
<PAGE>
Statement of Net Assets (continued)
DELAWARE MINNESOTA INSURED FUND
Principal Market
February 29, 2000 (Unaudited) Amount Value
- ----------------------------------------------------------------------
Municipal Bonds - 97.67%
General Obligation Bonds - 14.77%
Anoka County Capital Improvement
Series C (FGIC) 5.90% 2/1/11 ....... $8,045,000 $ 8,125,370
Becker Refunding Tax Increment
Series D (MBIA) (AMT)
6.25% 8/1/15 ....................... 6,300,000 6,431,733
Eden Prairie Independent School
District #272 Series A
5.125% 2/1/14 ...................... 2,000,000 1,884,960
Eden Prairie Independent School
District #272 Series A
5.125% 2/1/15 ...................... 2,250,000 2,101,792
Hennepin County Ref Solid Waste
IBC (MBIA) 5.75% 10/1/10 ........... 1,800,000 1,834,650
Hopkins Independent School
District #270 (MBIA)
4.875% 2/1/14 ...................... 1,875,000 1,714,219
***Lakeville Independent School District
#194 Capital Appreciation
Series B (FSA) 6.015% 2/1/15 ....... 2,455,000 1,013,817
***Lakeville Independent School District
#194 Capital Appreciation Series B
(FSA) 6.106% 2/1/17 ................ 2,490,000 899,861
***Rosemount Independent School
District #196 (FSA) 5.483% 4/1/09 1,860,000 1,137,595
***Rosemount Independent School District
#196 Series B (FSA)
5.534% 4/1/10 ...................... 2,240,000 1,291,450
South Washington County Independent
School District #883 (FGIC)
6.125% 6/1/09 ...................... 1,430,000 1,445,430
South Washington County Independent
School District #883 (FGIC)
6.125% 6/1/11 ...................... 2,720,000 2,762,133
St. Cloud Independent School District
#742 (FGIC) 6.05% 2/1/09 ........... 1,000,000 1,022,360
St. Francis Independent School
District #15 (FGIC) 5.90% 4/1/10 1,845,000 1,877,527
Stillwater Independent School District
#834 (FGIC) 5.50% 2/1/10 ........... 2,995,000 3,007,220
Western Lake Superior Series A (MBIA)
(AMT) 6.00% 10/1/08 ................ 400,000 412,180
Western Lake Superior Series A (MBIA)
(AMT) 6.10% 10/1/09 ................ 425,000 438,936
Western Lake Superior Series A (MBIA)
(AMT) 6.20% 10/1/10 ................ 450,000 465,584
Western Lake Superior Series A (MBIA)
(AMT) 6.20% 10/1/11 ................ 475,000 489,839
-----------
38,356,656
-----------
<PAGE>
Principal Market
Amount Value
- ----------------------------------------------------------------------
Municipal Bonds (continued)
Hospital Revenue Bonds - 14.80%
Bloomington Masonic Home Care Center
(AMBAC) 5.90% 7/1/09 ............... $1,250,000 $ 1,286,337
Brainerd Benedictine Health Care
Systems for St. Joseph's Hospital
(Connie Lee) 6.00% 2/15/12 ......... 1,500,000 1,549,095
Brainerd Benedictine Health Care
Systems for St. Joseph's Hospital
(Connie Lee) 6.00% 2/15/20 ......... 2,000,000 1,997,620
Duluth Economic Development Authority
Benedictine for St. Luke's Hospital
(Connie Lee) 6.40% 5/1/18 .......... 500,000 509,240
Duluth Economic Development Authority
St. Luke's Hospital (Connie Lee)
6.00% 2/15/20 ...................... 1,300,000 1,276,249
Duluth Economic Development Authority
St. Luke's Hospital (Connie Lee)
6.40% 5/1/10 ....................... 3,335,000 3,486,376
Minneapolis Fairview Hospital Series
91B (MBIA) 6.50% 1/1/11 ............ 3,000,000 3,130,080
Minneapolis/St. Paul Housing &
Redevelopment Authority HealthOne
(MBIA) 7.40% 8/15/05 ............... 600,000 620,352
Minneapolis/St. Paul Housing &
Redevelopment Authority Children's
Hospital 5.50% 8/15/25 ............. 2,250,000 2,065,703
Minneapolis/St. Paul Housing &
Redevelopment Authority Health Care
Systems for Healthspan Series
93A (FSA) 5.00% 11/15/13 ........... 6,490,000 6,102,612
Minneapolis Health Care Facility
Revenue Fairview Hospital & Healthcare
Series A (MBIA) 5.25% 11/15/19 ..... 2,750,000 2,482,700
Minnesota Agricultural & Economic
Development Fairview Hospital
Series 97A 5.75% 11/15/26 .......... 8,250,000 7,891,867
Robbinsdale North Memorial Medical
(AMBAC) 5.50% 5/15/23 .............. 5,400,000 5,025,348
St. Paul Ramsey Medical (AMBAC)
5.50% 5/15/13 ...................... 1,000,000 987,910
-----------
38,411,489
-----------
17
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Minnesota Insured Fund Amount Value
- ----------------------------------------------------------------------
Municipal Bonds (continued)
Housing Revenue Bonds - 15.78%
Chaska Waters Edge Multifamily
Revenue (GNMA) 7.30% 1/20/30 ....... $3,257,000 $3,446,883
Dakota County Housing & Redevelopment
Authority Single Family Mortgage
Revenue (GNMA/FNMA)
5.85% 10/1/30 ...................... 6,984,000 6,577,601
Dakota County Housing & Redevelopment
Authority Single Family Mortgage
Revenue (FNMA) 6.70% 10/1/17 ....... 3,025,000 3,112,059
Dakota, Washington & Stearns Counties
Housing & Redevelopment Authority
Single Family Mortgage Revenue
(MBIA) 7.85% 12/1/30 ............... 95,000 97,156
Eagan Multifamily Revenue Woodridge
Apartments (GNMA) 5.90% 8/1/20 ..... 1,000,000 977,910
Hopkins Multifamily Housing Auburn
Apartments (GNMA) 8.05% 6/20/31..... 3,790,000 4,091,457
Minneapolis/St. Paul Housing Finance
Board Housing Project Phase V
(GNMA) 8.875% 11/1/18 ............... 35,000 35,286
Minneapolis/St. Paul Housing Finance
Board Housing Project Phase IX
(GNMA) 7.25% 8/1/21 ................ 855,000 881,103
Minneapolis/St. Paul Housing Finance
Board Housing Project Phase IX
(GNMA) 7.30% 8/1/31 ................ 585,000 604,498
Minneapolis/St. Paul Housing Finance
Board Single Family Mortgage Revenue
(GNMA) 8.125% 12/1/14 .............. 90,000 90,880
Minneapolis /St. Paul Housing Finance
Board Single Family Mortgage Revenue
(GNMA) 8.30% 8/1/21 ................ 55,000 55,114
Minnesota Housing Finance Agency
Single Family Housing Rental (AMBAC)
5.95% 2/1/15 ....................... 2,325,000 2,331,370
Minnesota Housing Finance Agency
Single Family Housing Rental (MBIA)
5.95% 2/1/18 ....................... 6,315,000 6,266,564
Minnesota State Housing Finance
Agency Single Family Housing Rental
Series D (AMBAC) (AMT)
5.80% 7/1/21 ....................... 2,585,000 2,469,192
<PAGE>
Principal Market
Amount Value
- ----------------------------------------------------------------------
Municipal Bonds (continued)
Housing Revenue Bonds (continued)
Minnesota Housing Finance Agency
Single Family Mortgage Revenue
Series A (AMBAC) 7.05% 7/1/22 ...... $ 365,000 $ 372,417
Minnesota Housing Finance Agency
Single Family Mortgage Revenue
Series A (AMBAC) 7.45% 7/1/22 ...... 480,000 493,248
Scott County Housing & Redevelopment
Authority Facility Lease Revenue
Justice Center Project (AMBAC)
5.50% 12/1/15 ...................... 1,755,000 1,711,546
South St. Paul Housing & Redevelopment
Authority Single Family Housing
Mortgage Series 93 (FNMA)
5.75% 9/1/20 ....................... 2,225,000 2,170,109
St. Paul Housing & Redevelopment
Authority Multifamily Housing (FNMA)
6.60% 10/1/12 ...................... 4,000,000 4,138,160
White Bear Lake Multifamily Housing
Lake Square (FHA) 5.875% 2/1/15..... 1,055,000 1,057,247
----------
40,979,800
----------
Power Authority Revenue Bonds - 10.97%
Bass Brook Pollution Control Revenue
for Minnesota Power & Light
Company (MBIA) 6.00% 7/1/22 ........ 2,000,000 2,003,560
Marshall Utility Revenue (FSA)
6.45% 7/1/10 ....................... 500,000 520,220
Marshall Utility Revenue (FSA)
6.45% 7/1/11 ....................... 100,000 103,982
Marshall Utility Revenue (FSA)
6.50% 7/1/12 ....................... 500,000 520,665
Marshall Utility Revenue (FSA)
6.50% 7/1/13 ....................... 500,000 520,665
Northern Minnesota Municipal
Power Agency Electric Systems
4.75% 1/1/20 ....................... 6,600,000 5,557,662
Northern Minnesota Municipal
Power Agency Electric System
Revenue (AMBAC) 5.50% 1/1/18 ....... 4,200,000 4,011,420
Northern Minnesota Municipal
Power Agency (FSA) 5.25% 1/1/13..... 4,750,000 4,628,590
Northern Municipal Power Agency
Minnesota Electric Systems
Revenue 5.40% 1/1/15 ............... 2,000,000 1,934,480
18
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Minnesota Insured Fund Amount Value
- ----------------------------------------------------------------------
Municipal Bonds (continued)
Power Authority Revenue Bonds (continued)
**Puerto Rico Electric Power Authority
Revenue Series DD Inverse Floater
(FSA) 5.20% 7/1/19 ................ $ 2,825,000 $ 1,891,055
Puerto Rico Electric Power Authority
Revenue Ref - Series GG (FSA)
4.75% 9/1/21 ...................... 1,000,000 853,840
Puerto Rico Electric Power Authority
Revenue Ref - Series EE (MBIA)
4.50% 7/1/18 ...................... 4,500,000 3,781,890
Southern Minnesota Municipal Power
Agency (MBIA) 4.75% 1/1/16 ........ 2,400,000 2,154,888
------------
28,482,917
------------
*Pre-Refunded/Escrowed to Maturity Bonds - 40.70%
Alexandria Independent School District
#206 (MBIA) 6.30% 2/1/13-03 ....... 1,775,000 1,827,984
Becker Wastewater Treatment
Facility Series A (MBIA)
5.95% 2/1/14-04 ................... 500,000 512,560
Brainerd Independent School District
#181 (FGIC) 7.00% 6/1/09-01 ....... 515,000 528,102
Brainerd Independent School District
#181 (FGIC) 7.00% 6/1/10-01 ....... 550,000 563,992
Buffalo Independent School District
#887 (FSA) 6.10% 2/1/15-03 ........ 1,030,000 1,056,646
Carver County Housing & Redevelopment
Authority Jail Facility (MBIA)
6.40% 2/1/10-02 ................... 515,000 527,865
Carver County Housing & Redevelopment
Authority Jail Facility (MBIA)
6.40% 2/1/11-02 ................... 550,000 563,535
Carver County Housing & Redevelopment
Authority Jail Facility (MBIA)
6.40% 2/1/12-02 ................... 585,000 599,180
Carver County Housing & Redevelopment
Authority Jail Facility (MBIA)
6.40% 2/1/13-02 ................... 625,000 640,150
Carver County Housing & Redevelopment
Authority Jail Facility (MBIA)
6.40% 2/1/14-02 ................... 670,000 686,241
Dakota & Washington Counties
Housing & Redevelopment Authority
Single Family Mortgage Revenue
(Escrowed to Maturity) (GNMA)
8.375% 9/1/21 ..................... 14,115,000 18,018,644
<PAGE>
Principal Market
Amount Value
- ----------------------------------------------------------------------
Municipal Bonds (continued)
*Pre-Refunded/Escrowed to Maturity Bonds (continued)
Dakota & Washington Counties
Housing & Redevelopment Authority
Single Family Mortgage Revenue
(Escrowed to Maturity) (GNMA)
8.45% 9/1/19 ....................... $9,000,000 $11,465,280
Dakota & Washington Counties
Housing & Redevelopment Authority
Single Family Mortgage Revenue
(Escrowed to Maturity) (MBIA)
8.15% 9/1/16 ....................... 405,000 496,356
Delano Independent School District
#879 (AMBAC) 7.25% 2/1/10-01 ....... 500,000 510,495
Detroit Lakes Benedictine Health for
St. Mary's Hospital (Connie Lee)
6.00% 2/15/12-03 ................... 1,630,000 1,710,115
Detroit Lakes Benedictine Health for
St. Mary's Hospital (Connie Lee)
6.00% 2/15/19-03 ................... 1,000,000 1,049,150
Duluth Economic Development Authoriy
6.00% 2/15/17-03 ................... 10,000,000 10,491,500
Duluth Economic Development Authority
Health Care Duluth Clinic (AMBAC)
6.30% 11/1/22-02 ................... 2,690,000 2,839,645
Duluth Economic Development Authority
Health Care Duluth Clinic
(AMBAC) 6.30% 11/1/22-04 ........... 1,060,000 1,119,286
Eden Prairie Independent School
District #272 (FGIC) 5.85% 2/1/13-02 2,500,000 2,536,775
Eden Prairie Independent School
District #272 (MBIA)
5.65% 2/1/13-02 .................... 3,200,000 3,235,552
Elk River Independent School District
#728 (FSA) 6.30% 2/1/14-02 ......... 500,000 511,405
Elk River Independent School
District #728 (FSA) 6.30% 2/1/15-02 665,000 680,169
Elk River Independent School
District #728 Series 92 B (AMBAC)
6.00% 2/1/09-03 .................... 3,950,000 4,043,773
Ellendale Geneva Independent School
District #762 (AMBAC)
6.00% 2/1/10-03 .................... 230,000 235,522
Ellendale Geneva Independent School
District #762 (AMBAC)
6.00% 2/1/11-03 .................... 245,000 250,750
19
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Minnesota Insured Fund Amount Value
- ----------------------------------------------------------------------
Municipal Bonds (continued)
*Pre-Refunded/Escrowed to Maturity Bonds (continued)
Ellendale Geneva Independent School
District #762 (AMBAC)
6.00% 2/1/12-03 ................. $ 265,000 $ 271,148
Ellendale Geneva Independent School
District #762 (AMBAC)
6.00% 2/1/13-03 ................. 280,000 286,496
Ellendale Geneva Independent School
District #762 (AMBAC)
6.00% 2/1/14-03 ................. 300,000 306,960
Ellendale Geneva Independent School
District #762 (AMBAC)
6.00% 2/1/15-03 ................. 320,000 327,424
Farmington Independent School
District #192 (MBIA)
6.80% 2/1/11-01 ................. 850,000 864,322
Maplewood Independent School
District #622 (FSA)
7.10% 2/1/25-05 ................. 11,525,000 12,545,884
Maplewood Independent School
District #622 (MBIA)
7.10% 2/1/19-05 ................. 5,935,000 6,460,722
Minneapolis/St. Paul Housing &
Redevelopment Authority HealthOne
(MBIA) 7.40% 8/15/11-00 ......... 2,370,000 2,450,390
Minnesota Public Facilities Authority
Water Pollution Control Revenue
(MBIA) 6.50% 3/1/14-02 .......... 1,500,000 1,577,295
Moorhead Independent School
District #152 (AMBAC)
5.90% 2/1/10-01 ................. 475,000 479,327
Moorhead Independent School
District #152 (AMBAC)
5.90% 2/1/11-01 ................. 505,000 509,510
Moorhead Independent School
District #152 (AMBAC)
5.90% 2/1/12-01 ................. 540,000 544,822
Moorhead Independent School
District #152 (AMBAC)
6.00% 2/1/13-01 ................. 575,000 580,641
Moorhead Minnesota Public Utilities
(MBIA) 6.25% 11/1/12-02 ......... 735,000 757,013
Northern Minnesota Municipal Power
Agency Series B (AMBAC)
5.90% 1/1/08-03 ................. 700,000 731,752
<PAGE>
Principal Market
Amount Value
- ----------------------------------------------------------------------
Municipal Bonds (continued)
*Pre-Refunded/Escrowed to Maturity Bonds (continued)
South Washington County Independent
School District #883 (FGIC)
6.875% 6/1/11-00 ................ $ 520,000 $ 522,808
Southern Minnesota Municipal Power
Agency Revenue (Escrowed to Maturity)
(AMBAC) 5.75% 1/1/18 ............ 670,000 658,047
Southern Minnesota Municipal Power
Agency Revenue (Escrowed to Maturity)
(MBIA) 5.75% 1/1/18 ............. 3,790,000 3,721,477
St. Cloud Hospital Facility Revenue
(AMBAC) 6.75% 7/1/11-01 ......... 400,000 418,716
St. Cloud Hospital Facility Revenue
(AMBAC) 6.75% 7/1/15-01 ......... 500,000 523,395
St. Cloud Hospital Facility Revenue
(AMBAC) 7.00% 7/1/07-01 ......... 500,000 524,990
St. Louis Park Methodist Hospital
(AMBAC) 7.25% 7/1/18-00 ......... 500,000 514,965
Washington County Housing &
Redevelopment Authority Jail Facilities
(MBIA) 7.00% 2/1/12-02 .......... 500,000 520,480
Western Minnesota Municipal Power
Agency Revenue (Escrowed to Maturity)
(MBIA) 6.60% 1/1/10 ............. 2,000,000 2,116,840
Western Minnesota Municipal Power
Agency Revenue (Escrowed to
Maturity) (MBIA) 9.75% 1/1/16 ... 530,000 746,913
------------
105,663,009
------------
Transportation Revenue Bonds - 0.65%
***Puerto Rico Commonwealth Highway
& Transportation Authority
Revenue Series A (AMBAC)
6.006% 7/1/18 ................... 5,000,000 1,689,050
------------
1,689,050
------------
Total Municipal Bonds
(cost $250,362,783) ............. 253,582,921
------------
Number of
Shares
---------
Short-Term Investments 1.37%
Wells Fargo National Tax-Free
Money Market Fund ............... 3,550,438 3,550,438
------------
Total Short-Term Investments
(cost $3,550,438) ............... 3,550,438
------------
20
<PAGE>
Statement of Net Assets (continued)
Market
Delaware Minnesota Insured Fund Value
- -----------------------------------------------------------------
Total Market Value of Securities - 99.04%
(cost $253,913,221) ................. $257,133,359
Receivables and Other Assets
Net of Liabilities - 0.96% .......... 2,503,799
------------
Net Assets Applicable to 25,457,287
Shares Outstanding - 100.00% ........ $259,637,158
============
Net Asset Value - Delaware Minnesota
Insured Fund A class
($245,059,293 / 24,027,267 shares) .. $10.20
------
Net Asset Value - Delaware Minnesota
Insured Fund B class
($10,661,455 / 1,046,171 shares) .... $10.19
------
Net Asset Value - Delaware Minnesota
Insured Fund C class
($3,916,410 / 383,849 shares) ....... $10.20
------
- ----------------------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in
which each bond is pre-refunded
** Inverse Floater represents a security that pays interest at rates that
increase (decrease) with a decrease (increase) in a specific index.
Interest rates disclosed are in effect as of February 29, 2000.
*** Zero Coupon Bond - The interest rate shown is the effective notes yield as
of February 29, 2000.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
AMT - Subject to Federal Alternative Minimum Tax
Connie Lee - Insured by the College Construction Insurance Association
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by the Financial Security Assurance
GNMA - Insuredm by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
<PAGE>
Market
Value
- -------------------------------------------------------------------
Components of Net Assets at February 29, 2000:
Shares of beneficial interest (unlimited
authorization - no par) ............. $263,466,468
Accumulated net realized loss
on investments ...................... (7,049,448)
Net unrealized appreciation
of investments ...................... 3,220,138
------------
Total net assets ....................... $259,637,158
============
Net Asset Value and Offering Price per Share -
Delaware Minnesota Insured Fund
Net asset value A Class (A) ............ $10.20
Sales charge (3.75% of offering
price or 3.92% of amount invested
per share) (B) ...................... 0.40
------
Offering Price ......................... $10.60
======
----------------------
(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>
Statement of Net Assets (continued)
DELAWARE TAX-FREE MINNESOTA INTERMEDIATE FUND
Principal Market
February 29, 2000 (Unaudited) Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds - 98.96%
General Obligation Bonds - 5.33%
**Minnesota State Inverse Floater
ROLS 5.79% 11/1/16 .............................. $2,000,000 $1,638,040
Olmstead County Resource Recovery
Series A 5.90% 2/1/05 ........................... 1,175,000 1,195,915
----------
2,833,955
----------
Health Care/Hospital Revenue Bonds - 13.18%
Fergus Falls Health Care Facility
Broen Memorial Home Project
6.20% 11/1/05 ................................... 100,000 97,528
Fergus Falls Health Care Facility
Broen Memorial Home Project
6.30% 11/1/06 ................................... 200,000 194,380
Fergus Falls Health Care Facility
Broen Memorial Home Project
6.40% 11/1/07 ................................... 200,000 193,756
Fergus Falls Health Care Facility
Broen Memorial Home Project
6.60% 11/1/09 ................................... 240,000 231,197
Fergus Falls Health Care Facility
Broen Memorial Home Project
6.70% 11/1/10 ................................... 260,000 249,844
Maplewood Health Care Facility
For Healtheast 5.70% 11/15/02 ................... 1,000,000 969,590
Maplewood Health Care Facility
For Healtheast 5.95% 11/15/06 ................... 2,200,000 2,033,548
Minneapolis Health Care Facilities
Jones - Harrison Residence Project
5.90% 10/1/16 ................................... 125,000 105,774
New Hope Housing & Health
Masonic Home North Ridge
5.875% 3/1/29 ................................... 1,000,000 796,210
Rochester Nursing Home & Multifamily
Housing Revenue Samaritan
Bethany, Inc. 6.00% 5/1/04 ...................... 300,000 298,557
Rochester Nursing Home & Multifamily
Housing Revenue Samaritan
Bethany, Inc. 6.10% 5/1/05 ...................... 250,000 248,558
St. Paul Housing & Redevelopment
Authority for HealthEast Authority
Hospital Revenue 5.70% 11/1/15 .................. 800,000 650,744
St. Paul Housing & Redevelopment
Authority for HealthEast Authority
Hospital Revenue 5.85% 11/1/17 .................. 1,160,000 937,338
---------
7,007,024
---------
Higher Education Revenue Bonds - 1.65%
Minnesota Higher Education Facility
Authority Augsburg College
Series 4F2 5.75% 5/1/16 ......................... 925,000 875,587
---------
875,587
---------
<PAGE>
Principal Market
Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds (continued)
Housing Revenue Bonds - 10.96%
Minneapolis Multifamily Revenue
Trinity Apartments, Series A
6.75% 5/1/21 .................................... $3,000,000 $2,914,230
Oakdale Elderly Housing Revenue
PHM/Oakdale Project
5.75% 3/1/18 .................................... 1,400,000 1,156,568
Oakdale Housing Oak Meadows
Project 6.20% 4/1/07 ............................ 150,000 145,653
Oakdale Housing Oak Meadows
Project 6.30% 4/1/08 ............................ 260,000 251,690
Oakdale Housing Oak Meadows
Project 6.50% 4/1/10 ............................ 295,000 286,094
Park Rapids Multifamily Revenue
The Court Apartments Project
Section 8 6.05% 8/1/12 .......................... 1,070,000 1,001,670
St. Paul Housing & Redevelopment
Single Family Mortgage (FNMA)
6.90% 12/1/21 ................................... 70,000 71,888
---------
5,827,793
---------
Industrial Development Revenue Bonds - 16.90%
Andover Development Revenue
Downtown Center Project
Series A 6.50% 12/1/06 .......................... 1,795,000 1,773,622
Brooklyn Center Commercial
Development Revenue Brookdale
Association (Reliastar Life Ins. Co.)
5.70% Mandatory Put 6/1/01 ...................... 1,000,000 1,009,700
Duluth Gross Revenue Bond Duluth
Entertainment 7.00% 12/1/03 ..................... 1,250,000 1,315,113
Duluth Gross Revenue Bond Duluth
Entertainment 7.30% 12/1/06 ..................... 250,000 269,153
Minnesota Public Facilities Authority
Pollution Control Revenue
Series A 6.55% 3/1/03 ........................... 1,720,000 1,783,399
Richfield Commercial Development
Revenue Richfield Shoppes Project
7.50% 10/1/04 ................................... 820,000 813,383
St. Paul Port Authority Commercial
Development Revenue Fort Road
Medical/Irvine Park (Asset Gty)
7.50% 9/1/02 .................................... 2,000,000 2,024,080
---------
8,988,450
---------
Lease/Certificates of Participation - 4.18%
Beltrami County Housing & Redevelopment
Authority Revenue 5.90% 2/1/08 .................. 355,000 359,043
Beltrami County Housing & Redevelopment
Authority Revenue 6.00% 2/1/09 .................. 380,000 384,476
Beltrami County Housing &
Redevelopment Authority Revenue
6.00% 2/1/10 .................................... 405,000 408,050
22
<PAGE>
Statement of Net Assets (continued)
Delaware Tax-Free Minnesota Principal Market
Intermediate Fund Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds (continued)
Lease/Certificates of Participation - 4.18%
Beltrami County Housing &
Redevelopment Authority Revenue
6.10% 2/1/11 .................................... $ 430,000 $ 434,687
Hibbing Economic Development
Authority Revenue
6.10% 2/1/08 .................................... 650,000 638,788
---------
2,225,044
---------
Power Authority Revenue Bonds - 6.03%
Eveleth Industrial Development
Revenue for Minnesota Power &
Light Company 6.125% 1/1/04 ..................... 2,500,000 2,535,850
**Puerto Rico Electric Power
Authority Revenue Series DD
Inverse Floater (FSA) 5.20% 7/1/19 .............. 1,000,000 669,400
---------
3,205,250
---------
*Pre-Refunded/Escrowed To Maturity Bonds - 40.73%
Austin Independent School District
#492 (MBIA) 6.875% 2/1/12-01 .................... 1,205,000 1,226,100
Braham Independent School District
#314 (AMBAC) 6.30% 2/1/19-01 .................... 3,015,000 3,051,994
Eden Valley Watkins Independent
School District #463 (FSA)
6.55% 2/1/11-02 ................................. 250,000 256,828
Eden Valley Watkins Independent
School District #463 (FSA)
6.60% 2/1/16-02 ................................. 615,000 632,349
Mankato Independent School
District #77 (FSA) 6.35% 2/1/13-02 .............. 1,750,000 1,791,493
Metropolitan Council Hubert H
Humphrey Metrodome Sports Facility
Revenue Series 92 (Escrowed to
Maturity) 6.00% 10/1/09 ......................... 3,520,000 3,630,493
Minneapolis/St. Paul HealthOne
Series B (Escrowed to Maturity)
7.55% 8/15/00 ................................... 325,000 330,005
Minnesota State 6.25% 8/1/10-02 .................. 4,000,000 4,134,040
Olmstead County 6.85% 2/1/02-01 .................. 800,000 818,352
Olmstead County 6.90% 2/1/03-01 .................. 900,000 921,051
Olmstead County 6.95% 2/1/04-01 .................. 950,000 972,639
**Richfield Independent School District
#280 Series C Inverse Floater
5.34% 2/1/15 .................................... 1,000,000 1,020,010
St. Cloud Hospital Facility Revenue
(AMBAC) 7.00% 7/1/20-01 ......................... 2,740,000 2,876,945
----------
21,662,299
----------
Total Municipal Bonds
(cost $53,713,870) .............................. 52,625,402
----------
<PAGE>
Market
Value
- --------------------------------------------------------------------------------
Total Market Value of Securities - 98.96%
(cost $53,713,870) .............................. $52,625,402
Receivables and Other Assets
Net of Liabilities- 1.04% ....................... 552,144
-----------
Net Assets Applicable to 5,217,441
Shares Outstanding - 100.00% .................... $53,177,546
===========
Net Asset Value - Delaware Tax-Free
Minnesota Intermediate Fund A Class
($47,990,546 / 4,709,074 Shares) ................ $ 10.19
-----------
Net Asset Value - Delaware Tax-Free
Minnesota Intermediate Fund B Class
($2,724,433 / 266,897 Shares) ................... $ 10.21
-----------
Net Asset Value - Delaware Tax-Free
Minnesota Intermediate Fund C Class
($2,462,567 / 241,470 Shares) ................... $ 10.20
-----------
- ----------------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
**Inverse Floater represents a security that pays interest rates that increase
(decrease) with a decrease (increase) in a specific index.
Interest rates disclosed are in effect as of February 29, 2000.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
Asset Gty - Insured by the Asset Guaranty Insurance Company
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
Components of Net Assets at February 29, 2000:
Shares of beneficial interest (unlimited
authorization - no par) ......................... $56,151,915
Undistributed net investment loss .................. (555)
Accumulated net realized loss
on investments .................................. (1,885,346)
Net unrealized depreciation
of investments .................................. (1,088,468)
-----------
Total net assets ................................... $53,177,546
===========
Net Asset Value and Offering Price Per Share -
Delaware Tax-Free Minnesota Intermediate Fund
Net asset value A Class (A) ........................ $ 10.19
Sales charge (2.75% of offering price or
2.85% of amount invested per share) (B) ......... 0.29
-----------
Offering price $ 10.48
===========
- ----------------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid the redemption or repurchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
See accompanying notes
23
<PAGE>
Statement of Net Assets (continued)
DELAWARE MINNESOTA HIGH-YIELD MUNICIPAL BOND FUND
Principal Market
February 29, 2000 (Unaudited) Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds - 98.23%
City Agent Revenue Bonds - 3.33%
Minneapolis Community Development
Agency Common Bond Fund Series 2
(AMT) 6.20% 6/1/17 .............................. $ 750,000 $ 756,435
Minneapolis Community Development
Agency Revenue Limited Tax Series 4
(AMT) 6.20% 6/1/17 .............................. 1,055,000 1,056,699
----------
1,813,134
----------
General Obligation Bonds - 3.53%
Inver Grove Heights (MN School
District Enhanced) Series A
5.75% 2/1/13 .................................... 100,000 101,141
**Minnesota State Inverse Floater
ROLS 5.79% 11/1/17 .............................. 2,300,000 1,824,222
----------
1,925,363
----------
Higher Education Revenue Bonds - 1.78%
Minnesota State Higher Education
Facility St. Mary's College Series 3Q
6.15% 10/1/23 ................................... 900,000 871,686
Minnesota State University System
Revenue Bonds Series 93A
6.10% 6/30/23 ................................... 100,000 100,032
---------
971,718
---------
Hospital Revenue Bonds - 22.03%
Cambridge Health Care Facility
Revenue Grandview
Christian Home 7.25% 9/1/26 ..................... 125,000 125,075
Cannon Falls Nursing Home
Franciscan Health Community Project
7.25% 7/1/21 .................................... 100,000 98,074
Duluth Economic Development
Authority Health Care Facilities
St. Francis Health Care Facility
6.75% 12/1/17 ................................... 325,000 317,415
Fergus Falls Health Care Facility
Revenue Lake Region Hospital
6.50% 9/1/18 .................................... 750,000 716,663
Glencoe Health Care Revenue
6.40% 12/1/15 ................................... 275,000 254,683
Mankato Health Facilities Revenue
Mankato Lutheran Homes Series A
6.875% 10/1/26 .................................. 300,000 273,714
Minneapolis Health Care Facility
Revenue Jones-Harrison Residence
Project 6.00% 10/1/27 ........................... 1,565,000 1,271,437
Minneapolis Housing & Health Care
Facility Revenue Augustana Chapel
View Homes 6.50% 6/1/17 ......................... 1,370,000 1,242,124
<PAGE>
Principal Market
Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds (continued)
Hospital Revenue Bonds (continued)
Minnesota Agriculture & Economic
Development Board Benedictine
Health Systems 5.75% 2/1/29 ..................... $1,000,000 $ 778,950
Minnetonka Multifamily Housing
Beacon Hill Senior Housing Project
7.55% 6/1/19 .................................... 200,000 198,762
Moorhead Economic Development
Authority Multifamily Revenue
Refunding & Improvement Housing
Development for Eventide Series B
6.00% 6/1/18 .................................... 870,000 750,558
New Hope Housing & Health
Minnesota Masonic Home North
Ridge 5.875% 3/1/29 ............................. 1,500,000 1,194,315
Northfield Health Care Facilities
Revenue Refunding & Improvement
Retirement Center Series A
6.00% 5/1/28 .................................... 1,405,000 1,137,010
Perham Hospital District Congregate
Housing Facilities Briarwood Project
6.25% 2/1/22 .................................... 620,000 535,469
**Rochester Health Care Facilities
Revenue Reg IRS for Mayo Clinic,
Series H Inverse Floater
7.86% 11/15/15 .................................. 1,500,000 1,541,985
Springfield St. John's Lutheran Home
Revenue 8.50% 11/1/19 ........................... 150,000 155,007
St. Anthony Multifamily Housing
Chandler (GNMA) 6.05% 11/20/16 .................. 135,000 136,727
St. Paul Housing & Redevelopment
Hospital Revenue for Health East
Series A 6.625% 11/1/17 ......................... 235,000 208,527
St. Paul Housing & Redevelopment
Hospital Revenue for Health East
Series B 6.625% 11/1/17 ......................... 475,000 421,491
Waconia Good Samaritan Housing &
Redevelopment Revenue for The
Evangelical Lutheran Series A
6.00% 6/1/14 .................................... 660,000 650,008
----------
12,007,994
----------
Housing Revenue Bonds - 53.00%
Bloomington Multifamily Housing
Revenue Refunding Hampshire
Apartments Series A
6.20% 12/1/31 ................................... 2,500,000 2,156,175
Brooklyn Center Four Court Multifamily
Housing 7.50% 6/1/25 ............................ 370,000 356,976
24
<PAGE>
Statement of Net Assets (continued)
Delaware Minnesota High-Yield Principal Market
Municipal Bond Fund Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds (continued)
Housing Revenue Bonds (continued)
Carver Multifamily Housing Lake
Grace 6.25% 7/1/28 .............................. $325,000 $ 314,506
Carver Multifamily Housing Lake
Grace 8.00% 7/1/28 .............................. 320,000 326,464
Chanhassen Multifamily Housing
Heritage Park 6.20% 7/1/30 ...................... 300,000 300,777
Chaska Multifamily West Suburban
Housing Partners 5.875% 3/1/31 .................. 1,000,000 845,130
Coon Rapids Multifamily Revenue
Margaret Place Series A
6.50% 5/1/25 .................................... 500,000 462,245
Coon Rapids Senior Housing Revenue
Refunding Epiphany Senior Citizens
Housing Corporation Project
6.00% 11/1/28 ................................... 3,455,000 2,792,677
Eden Prairie Multifamily Housing
Tanager Creek (Subordinated)
8.00% 6/20/31 ................................... 760,000 718,443
Hutchinson Multifamily Housing
Revenue Evergreen Apartments
Project 5.75% 11/1/28 ........................... 3,545,000 3,159,091
Minneapolis Multifamily Housing
Olson Townhomes 6.00% 12/1/19 ................... 800,000 770,384
Minneapolis Multifamily Housing for
Nicollet Towers 6.00% 12/1/19 ................... 300,000 295,536
Minneapolis Multifamily Housing
Revenue Grant Street Project
7.25% 11/1/29 ................................... 2,835,000 2,718,311
Minnesota Housing Finance Authority
Single Family Housing
5.875% 1/1/17 ................................... 90,000 89,186
Minnesota Housing Finance Authority
Single Family Mortgage Series
E 6.25% 1/1/23 .................................. 85,000 84,889
Minnetonka Senior Housing Revenue
Westridge Senior Housing Project
6.30% 9/1/08 .................................... 110,000 106,426
Minnetonka Senior Housing Revenue
Westridge Senior Housing Project
6.50% 9/1/12 .................................... 285,000 270,086
Minnetonka Senior Housing Revenue
Westridge Senior Housing Project
7.00% 9/1/27 .................................... 1,275,000 1,183,149
New Brighton Multifamily Polynesian
Village 7.60% 4/1/25 ............................ 300,000 301,272
Oakdale Elderly Housing Revenue
PHM/Oakdale Project 6.00% 3/1/28 ................ 1,800,000 1,460,970
<PAGE>
Principal Market
Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds (continued)
Housing Revenue Bonds (continued)
Oakdale Housing Oak Meadows Project
6.75% 4/1/15 .................................... $1,500,000 $ 1,437,075
Rochester Multifamily Revenue,
Wedum Shorewood Campus
6.60% 6/1/36 .................................... 3,000,000 2,783,610
Shoreview Elderly Housing PHM/
Shoreview Project 6.15% 12/1/33 ................. 2,955,000 2,394,348
St. Louis Park Multifamily Mortgage
Revenue Tamarind Project (FNMA)
5.50% 11/1/13 ................................... 125,000 121,714
Stillwater Multifamily Housing
Stillwater Cottages 6.75% 11/1/11 ............... 205,000 193,311
Stillwater Multifamily Housing
Stillwater Cottages 7.00% 11/1/16 ............... 680,000 637,452
Stillwater Multifamily Housing
Stillwater Cottages 7.00% 11/1/27 ............... 340,000 313,953
Twin Valley Congregate Housing
Revenue Living Options Incorporated
Project 5.95% 11/1/28 ........................... 1,825,000 1,459,325
Washington County Housing -
Briarwood Pond - (GNMA)
Subordinated, B 7.125% 8/20/34 .................. 905,000 839,315
----------
28,892,796
----------
Industrial Development Revenue Bonds - 5.36%
Andover Development Revenue
Downtown Center Project Series A
7.00% 12/1/12 ................................... 1,640,000 1,652,825
International Falls Minnesota Solid
Waste Disposal Revenue
6.85% 12/1/29 ................................... 1,000,000 982,420
Red Wing Industrial Development
Revenue for Kmart (First Mortgage)
5.50% 7/1/08 .................................... 300,000 284,886
---------
2,920,131
---------
Lease/Certificates of Participation - 2.73%
Beltrami County Housing &
Redevelopment Authority Revenue
Lease 6.10% 2/1/12 .............................. 460,000 464,623
Hibbing Economic Development
Authority 6.40% 2/1/12 .......................... 530,000 515,361
Rice County Certificate of Participation
6.00% 12/1/21 ................................... 125,000 123,789
Saint Cloud Certificate of Participation
5.90% 12/1/17 ................................... 400,000 383,004
---------
1,486,777
---------
25
<PAGE>
Statement of Net Assets (continued)
Delaware Minnesota High-Yield Principal Market
Municipal Bond Fund Amount Value
- --------------------------------------------------------------------------------
Municipal Bonds (continued)
Power Authority Revenue Bonds - 1.01%
**Puerto Rico Electric Power Authority
Revenue Series DD Inverse Floater
(FSA) 5.11% 7/1/19 ............................ $400,000 $ 267,760
Western Municipal Power Agency
Revenue 6.125% 1/1/16 ......................... 285,000 284,963
-----------
552,723
-----------
*Pre-ReFunded Bonds - 1.14%
Esko Independent School District #99
(FSA) 5.75% 4/1/17-05 ......................... 100,000 101,931
Little Canada Senior Facility Residence
Series 92 (Presbyterian Homes
Guaranteed) 7.25% 7/1/12-00 ................... 250,000 257,398
Minneapolis Health Care American
Baptist Homes 8.70% 11/1/09-01 ................ 150,000 162,242
Stewartville Independent School
District (MN School District Enhanced)
Series A 5.75% 2/1/12-05 ...................... 100,000 101,659
-----------
623,230
-----------
Other Revenue Bonds - 4.32%
Minneapolis Community Development
Agency Revenue Holiday Inn
Metrodome Project 6.00% 12/1/01 ............... 1,100,000 1,094,324
St. Paul Housing & Redevelopment
Authority Acorn Dual Language
Charter School 6.60% 11/1/24 .................. 1,000,000 899,500
Woodbury Golf Course Revenue
6.75% 2/1/22 .................................. 365,000 361,266
-----------
2,355,090
-----------
Total Municipal Bonds
(cost $59,319,044) ............................ $53,548,956
-----------
<PAGE>
Market
Value
- --------------------------------------------------------------------------------
Total Market Value of Securities - 98.23%
(cost $59,319,044) .............................. $53,548,956
Receivables and Other Assets
Net of Liabilities - 1.77% ...................... 965,330
-----------
Net Assets Applicable to 5,832,010
Shares Outstanding - 100.00% .................... $54,514,286
===========
Net Asset Value - Delaware Minnesota
High-Yield Municipal Bond Fund A Class
($34,475,675 / 3,688,846 shares) ................ $ 9.35
-----------
Net Asset Value - Delaware Minnesota
High-Yield Municipal Bond Fund B Class
($13,268,597 / 1,419,018 shares) ................ $ 9.35
-----------
Net Asset Value - Delaware Minnesota
High-Yield Municipal Bond Fund C Class
($6,770,014 / 724,146 shares) ................... $ 9.35
-----------
- ----------------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
**Inverse Floater represents a security that pays interest rates that increase
(decrease) with a decrease (increase) in a specified index.
Interest rates disclosed are in effect as of February 29, 2000.
Summary of Abbreviations:
AMT - Subject to Federal Alternative Minimum Tax
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
FNMA - Insured by the Federal National Mortgage Association
Components of Net Assets at February 29, 2000:
Shares of beneficial interest (unlimited
authorization - no par) ......................... $61,659,965
Undistributed net investment income ................ 33,768
Accumulated net realized loss
on investments .................................. (1,409,359)
Net unrealized depreciation
on investments .................................. (5,770,088)
-----------
Total net assets ................................... $54,514,286
===========
Net Asset Value and Offering Price Per Share -
Delaware Minnesota High-Yield Municipal Bond Fund
Net asset value A Class (A) ........................ $9.35
Sales charge (3.75% of offering price
or 3.85% of amount invested
per share) (B) .................................. 0.36
-----------
Offering price ..................................... $ 9.71
===========
- ----------------------
(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
26
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
Delaware
Delaware Delaware Delaware Tax-Free Minnesota
Tax-Free Minnesota Minnesota High-Yield
Minnesota Insured Intermediate Municipal
Six Months Ended February 29, 2000 (Unaudited) Fund Fund Fund Bond Fund
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Interest ....................................................... $12,120,209 $ 8,027,712 $ 1,777,923 $ 2,023,196
Expenses:
Management fees ................................................ 1,071,498 673,913 143,986 167,332
Distribution expense ........................................... 562,653 393,548 64,613 159,538
Dividend disbursing and transfer agent fees and expenses ....... 178,000 104,400 18,900 30,410
Accounting and administration .................................. 75,800 55,050 9,200 14,305
Reports and statements to shareholders ......................... 72,000 62,000 8,600 19,000
Registration fees .............................................. 8,000 26,500 11,100 15,924
Professional fees .............................................. 36,400 13,200 4,400 5,200
Custodian fees ................................................. 17,100 22,800 3,000 4,527
Taxes (other than taxes on income) ............................. 23,300 14,900 2,150 2,600
Trustees' fees ................................................. 5,760 2,500 1,200 1,486
Other .......................................................... 27,285 40,513 8,866 18,324
----------- ----------- ----------- -----------
2,077,796 1,409,324 276,015 438,646
Less expenses absorbed or waived ............................... (54,171) (4,205) 214 (125,972)
Less expenses paid indirectly .................................. (4,500) (3,114) (663) (703)
----------- ----------- ----------- -----------
Total operating expenses ....................................... 2,019,125 1,402,005 275,566 311,971
Interest expense ............................................... 58,601 4,498 12,623 74
----------- ----------- ----------- -----------
Total expenses ................................................. 2,077,726 1,406,503 288,189 312,045
----------- ----------- ----------- -----------
Net Investment Income .......................................... 10,042,483 6,621,209 1,489,734 1,711,151
----------- ----------- ----------- -----------
Net Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) on investments ........................ (2,442,605) (1,136,466) (1,697,500) (1,195,773)
Net change in unrealized appreciation/
depreciation of investments ................................. (16,239,179) (7,398,844) (654,879) (4,276,123)
----------- ----------- ----------- -----------
Net Realized and Unrealized Gain (Loss)
on Investments .............................................. (18,681,784) (8,535,310) (2,352,379) (5,471,896)
----------- ----------- ----------- -----------
Net Increase (Decrease) in Net Assets Resulting
from Operations ............................................. $(8,639,301) $(1,914,101) $ (862,645) $(3,760,745)
=========== =========== =========== ===========
</TABLE>
See accompanying notes
27
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Delaware Tax-Free Delaware Minnesota
Minnesota Fund Insured Fund
- ----------------------------------------------------------------------------------------------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
2/29/00 8/31/99 2/29/00 8/31/99
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations:
Net investment income .............................. $ 10,042,483 $ 20,993,346 $ 6,621,209 $ 13,965,097
Net realized gain (loss) on investments ............ (2,442,605) (147,117) (1,136,466) 137,142
Net change in unrealized appreciation/depreciation
of investments ................................... (16,239,179) (25,287,979) (7,398,844) (14,549,781)
----------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations .................................. (8,639,301) (4,441,750) (1,914,101) (447,542)
----------------------------------------------------------
Distributions to Shareholders from:
Net investment income:
A Class ......................................... (9,603,683) (20,174,383) (6,306,964) (13,346,041)
B Class ......................................... (288,712) (487,034) (229,205) (465,991)
C Class ......................................... (155,023) (262,572) (85,040) (153,065)
Net realized gain on investments:
A Class ......................................... - (1,282,605) - -
B Class ......................................... - (33,499) - -
C Class ......................................... - (17,432) - -
----------------------------------------------------------
(10,047,418) (22,257,525) (6,621,209) (13,965,097)
----------------------------------------------------------
Capital Share Transactions:
Proceeds from shares sold:
A Class ......................................... 13,348,546 31,725,320 4,572,672 16,615,252
B Class ......................................... 1,282,608 4,642,678 857,821 3,412,545
C Class ......................................... 1,186,056 3,462,305 296,795 1,749,748
Netasset value of shares issued upon reinvestment
of distributions from net investment income and
net realized gain on investments:
A Class ......................................... 6,322,990 14,191,034 4,280,751 8,915,770
B Class ......................................... 189,244 358,655 162,107 301,236
C Class ......................................... 114,304 212,238 71,676 123,826
----------------------------------------------------------
22,443,748 54,592,230 10,241,822 31,118,377
----------------------------------------------------------
Cost of shares repurchased:
A Class ......................................... (42,592,025) (42,409,234) (24,239,355) (26,476,059)
B Class ......................................... (1,276,208) (1,147,113) (1,840,354) (1,657,474)
C Class ......................................... (936,627) (1,339,166) (577,561) (622,365)
----------------------------------------------------------
(44,804,860) (44,895,513) (26,657,270) (28,755,898)
----------------------------------------------------------
Increase (decrease) in net assets derived from
capital share transactions ...................... (22,361,112) 9,696,717 (16,415,448) 2,362,479
----------------------------------------------------------
Net Increase (Decrease) in Net Assets .............. (41,047,831) (17,002,558) (24,950,758) (12,050,160)
Net Assets:
Beginning of period ................................ 414,269,906 431,272,464 284,587,916 296,638,076
----------------------------------------------------------
End of period ...................................... $373,222,075 $414,269,906 $259,637,158 $284,587,916
==========================================================
</TABLE>
See accompanying notes
28
<PAGE>
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Delaware Minnesota
Delaware Tax-Free High-Yield
Minnesota Intermediate Fund Municipal Bond Fund
- ----------------------------------------------------------------------------------------------------------------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
2/29/00 8/31/99 2/29/00 8/31/99
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations:
Net investment income .............................................. $ 1,489,734 $ 3,012,051 $ 1,711,151 $ 3,106,508
Net realized gain (loss) on investments ............................ (1,697,500) (140,464) (1,195,773) (201,795)
Net change in unrealized appreciation/depreciation of
investments ...................................................... (654,879) (3,073,048) (4,276,123) (3,408,558)
-----------------------------------------------------------
Net increase (decrease) in net assets resulting from operations .... (862,645) (201,461) (3,760,745) (503,845)
-----------------------------------------------------------
Distributions to Shareholders from:
Net investment income:
A Class ......................................................... (1,379,093) (2,843,696) (1,132,481) (2,089,853)
B Class ......................................................... (61,558) (86,563) (375,729) (704,387)
C Class ......................................................... (49,638) (79,885) (186,632) (295,807)
-----------------------------------------------------------
(1,490,289) (3,010,144) (1,694,842) (3,090,047)
-----------------------------------------------------------
Capital Share Transactions:
Proceeds from shares sold:
A Class ......................................................... 1,969,909 11,359,599 4,701,311 13,786,474
B Class ......................................................... 336,048 1,677,583 860,515 4,295,037
C Class ......................................................... 535,948 1,224,701 901,619 3,126,801
Netasset value of shares issued upon reinvestment of
distributions from net investment income and net
realized gain on investments:
A Class ......................................................... 1,042,443 2,116,790 646,149 1,146,164
B Class ......................................................... 39,150 56,875 213,102 404,641
C Class ......................................................... 43,334 70,383 130,034 207,133
-----------------------------------------------------------
3,966,832 16,505,931 7,452,730 22,966,250
-----------------------------------------------------------
Cost of shares repurchased:
A Class ......................................................... (9,091,084) (8,562,397) (9,227,123) (4,114,523)
B Class ......................................................... (416,006) (101,621) (2,284,620) (1,347,167)
C Class ......................................................... (321,575) (494,429) (1,113,466) (580,086)
-----------------------------------------------------------
(9,828,665) (9,158,447) (12,625,209) (6,041,776)
-----------------------------------------------------------
Increase (decrease) in net assets derived from capital
share transactions .............................................. (5,861,833) 7,347,484 (5,172,479) 16,924,474
-----------------------------------------------------------
Net Increase (Decrease) in Net Assets .............................. (8,214,767) 4,135,879 (10,628,066) 13,330,582
Net Assets:
Beginning of period ................................................ 61,392,313 57,256,434 65,142,352 51,811,770
-----------------------------------------------------------
End of period ...................................................... $53,177,546 $61,392,313 $54,514,286 $65,142,352
===========================================================
</TABLE>
See accompanying notes
29
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period was as follows: Delaware Tax-Free Minnesota Fund A Class
- ------------------------------------------------------------------------------------------------------------------------------------
Six Eight
Months Year Months
Ended Ended Ended Year Ended
2/29/00(1) 8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $ 12.230 $ 13.020 $ 12.910 $ 12.400 $ 12.630 $ 11.330
Income (loss) from investment operations:
Net investment income ................................... 0.307 0.628 0.431 0.654 0.630 0.620
Net realized and unrealized gain (loss) on investments .. (0.560) (0.752) 0.136 0.511 (0.230) 1.320
----------------------------------------------------------------------
Total from investment operations ........................ (0.253) (0.124) 0.567 1.165 0.400 1.940
----------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income .................... (0.307) (0.626) (0.435) (0.655) (0.630) (0.640)
Distributions from net realized gain on investments ..... - (0.040) (0.022) - - -
----------------------------------------------------------------------
Total dividends and distributions ....................... (0.307) (0.666) (0.457) (0.655) (0.630) (0.640)
----------------------------------------------------------------------
Net asset value, end of period ............................. $ 11.670 $ 12.230 $ 13.020 $ 12.910 $ 12.400 $ 12.630
======================================================================
Total return(2)............................................. (2.07%) (1.06%) 4.46% 9.68% 3.33% 17.49%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $353,482 $394,144 $416,113 $417,365 $428,380 $455,220
Ratio of expenses to average net assets ................. 1.03% 0.94% 0.89% 0.91% 0.92% 0.93%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ....... 1.06% 0.94% 0.92% 0.95% 0.92% 0.93%
Ratio of net investment income to average net assets .... 5.18% 4.89% 5.00% 5.22% 5.13% 5.11%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ............................................ 5.15% 4.89% 4.97% 5.18% 5.13% 5.11%
Portfolio turnover ...................................... 21% 17% 13% 19% 28% 51%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
See accompanying notes
30
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period was as follows: Delaware Tax-Free Minnesota Fund B Class
- ------------------------------------------------------------------------------------------------------------------------------------
Six Eight Period From
Months Year Months 8/11/95(4)
Ended Ended Ended Year Ended to
2/29/00(1) 8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $12.240 $13.020 $12.910 $12.400 $12.620 $11.900
Income (loss) from investment operations:
Net investment income ................................. 0.260 0.527 0.366 0.574 0.560 0.450
Net realized and unrealized gain (loss) on
investments ......................................... (0.560) (0.740) 0.136 0.508 (0.220) 0.710
---------------------------------------------------------------------
Total from investment operations ...................... (0.300) (0.213) 0.502 1.082 0.340 1.160
---------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income .................. (0.260) (0.527) (0.370) (0.572) (0.560) (0.440)
Distributions from net realized gain on
investments ......................................... - (0.040) (0.022) - - -
---------------------------------------------------------------------
Total dividends and distributions ..................... (0.260) (0.567) (0.392) (0.572) (0.560) (0.440)
---------------------------------------------------------------------
Net asset value, end of period ........................... $11.680 $12.240 $13.020 $12.910 $12.400 $12.620
=====================================================================
Total return(2) .......................................... (2.45%) (1.74%) 3.94% 8.95% 2.83% 9.95%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $12,893 $13,312 $10,246 $ 8,215 $ 6,233 $ 2,701
Ratio of expenses to average net assets ............... 1.78% 1.69% 1.64% 1.56% 1.50% 1.38%(5)
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ..... 1.81% 1.69% 1.67% 1.60% 1.67% 1.63%(5)
Ratio of net investment income to average net assets .. 4.43% 4.14% 4.25% 4.57% 4.53% 4.43%(5)
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly .......................................... 4.40% 4.14% 4.22% 4.53% 4.36% 4.18%(5)
Portfolio turnover .................................... 21% 17% 13% 19% 28% 51%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
(4) Commencement of operations.
(5) Annualized
See accompanying notes
31
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period was as follows: Delaware Tax-Free Minnesota Fund C Class
- ------------------------------------------------------------------------------------------------------------------------------------
Six Eight
Months Year Months
Ended Ended Ended Year Ended
2/29/00(1) 8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $12.250 $13.040 $12.920 $12.410 $12.630 $11.330
Income (loss) from investment operations:
Net investment income .................................... 0.262 0.536 0.374 0.564 0.540 0.530
Net realized and unrealized gain (loss) on investments ... (0.560) (0.756) 0.138 0.508 (0.220) 1.320)
---------------------------------------------------------------------
Total from investment operations ......................... (0.298) (0.220) 0.512 1.072 0.320 1.850)
---------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income ..................... (0.262) (0.530) (0.370) (0.562) (0.540) (0.550)
Distributions from net realized gain on investments ...... - (0.040) (0.022) - - -
---------------------------------------------------------------------
Total dividends and distributions ........................ (0.262) (0.570) (0.392) (0.562) (0.540) (0.550)
---------------------------------------------------------------------
Net asset value, end of period .............................. $11.690 $12.250 $13.040 $12.920 $12.410 $12.630
=====================================================================
Total return(2) ............................................. (2.43%) (1.80%) 4.02% 8.82% 2.64% 16.62%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $ 6,847 $ 6,814 $ 4,914 $ 3,083 $ 3,083 $ 2,319
Ratio of expenses to average net assets .................. 1.78% 1.69% 1.64% 1.65% 1.67% 1.67%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ........ 1.81% 1.69% 1.67% 1.69% 1.67% 1.67%
Ratio of net investment income to average net assets ..... 4.43% 4.14% 4.25% 4.48% 4.38% 4.33%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ............................................. 4.40% 4.14% 4.22% 4.44% 4.38% 4.33%
Portfolio turnover ....................................... 21% 17% 13% 19% 28% 51%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
See accompanying notes
32
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period was as follows: Delaware Minnesota Insured Fund A Class
- ------------------------------------------------------------------------------------------------------------------------------------
Six Eight
Months Year Months
Ended Ended Ended Year Ended
2/29/00(1) 8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $10.520 $11.050 $10.940 $10.600 $10.730 $9.610
Income (loss) from investment operations:
Net investment income ................................... 0.254 0.518 0.349 0.533 0.520 0.510
Net realized and unrealized gain (loss)
on investments ....................................... (0.320) (0.530) 0.111 0.341 (0.130) 1.140
-----------------------------------------------------------------------
Total from investment operations ........................ (0.066) (0.012) 0.460 0.874 0.390 1.650
-----------------------------------------------------------------------
Less dividends:
Dividends from net investment income .................... (0.254) (0.518) (0.350) (0.534) (0.520) (0.530)
-----------------------------------------------------------------------
Total dividends ......................................... (0.254) (0.518) (0.350) (0.534) (0.520) (0.530)
-----------------------------------------------------------------------
Net asset value, end of period ............................. $10.200 $10.520 $11.050 $10.940 $10.600 $10.730
=======================================================================
Total return(2) ............................................ (0.62%) (0.17%) 4.28% 8.49% 3.75% 17.52%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $245,059 $268,507 $283,057 $288,494 $304,877 $307,734
Ratio of expenses to average net assets ................. 1.00% 0.94% 0.92% 0.92% 0.92% 0.87%
Ratio of expenses to average net assets prior
to expense limitation and expenses paid
indirectly ........................................... 1.00% 0.94% 0.94% 0.94% 0.92% 0.92%
Ratio of net investment income to average net assets .... 4.94% 4.74% 4.79% 5.01% 4.93% 4.92%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ........................................... 4.94% 4.74% 4.77% 4.99% 4.93% 4.87%
Portfolio turnover ...................................... 18% 4% 6% 21% 14% 54%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
See accompanying notes
33
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period was as follows: Delaware Minnesota Insured Fund B Class
- ------------------------------------------------------------------------------------------------------------------------------------
Six Eight
Months Year Months
Ended Ended Ended Year Ended
2/29/00(1) 8/31/99 8/31/98(1) 12/31/97(3) 12/31/96
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............................. $10.510 $11.040 $10.930 $10.580 $10.720
Income (loss) from investment operations:
Net investment income .......................................... 0.216 0.436 0.294 0.454 0.450
Net realized and unrealized gain (loss) on investments ......... (0.320) (0.529) 0.111 0.348 (0.140)
--------------------------------------------------------------
Total from investment operations ............................... (0.104) (0.093) 0.405 0.802 0.310
--------------------------------------------------------------
Less dividends:
Dividends from net investment income ........................... (0.216) (0.437) (0.295) (0.452) (0.450)
--------------------------------------------------------------
Total dividends ................................................ (0.216) (0.437) (0.295) (0.452) (0.450)
--------------------------------------------------------------
Net asset value, end of period .................................... $10.190 $10.510 $11.040 $10.930 $10.580
==============================================================
Total return(2) ................................................... (0.99%) (0.91%) 3.76% 7.77% 3.03%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........................ $10,662 $11,827 $10,374 $8,926 $6,817
Ratio of expenses to average net assets ........................ 1.75% 1.69% 1.67% 1.67% 1.56%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ..................... 1.75% 1.69% 1.69% 1.69% 1.68%
Ratio of net investment income to average net assets ........... 4.19% 3.99% 4.04% 4.26% 4.29%
Ratio of net investment income to average net assets prior
to expense limitation and expenses paid indirectly .......... 4.19% 3.99% 4.02% 4.24% 4.17%
Portfolio turnover ............................................. 18% 4% 6% 21% 14%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
See accompanying notes
34
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period was as follows: Delaware Minnesota Insured Fund C Class
- ------------------------------------------------------------------------------------------------------------------------------------
Six Eight
Months Year Months
Ended Ended Ended Year Ended
2/29/00(1) 8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ................... $10.520 $11.050 $10.940 $10.600 $10.730 $9.610
Income (loss) from investment operations:
Net investment income ............................... 0.216 0.438 0.295 0.454 0.440 0.430
Net realized and unrealized gain (loss)
on investments ..................................... (0.320) (0.531) 0.110 0.338 (0.130) 1.140
------------------------------------------------------------------------
Total from investment operations .................... (0.104) (0.093) 0.405 0.792 0.310 1.570
------------------------------------------------------------------------
Less dividends:
Dividends from net investment income ................ (0.216) (0.437) (0.295) (0.452) (0.440) (0.450)
------------------------------------------------------------------------
Total dividends ..................................... (0.216) (0.437) (0.295) (0.452) (0.440) (0.450)
------------------------------------------------------------------------
Net asset value, end of period ......................... $10.200 $10.520 $11.050 $10.940 $10.600 $10.730
========================================================================
Total return(2) ........................................ (0.99%) (0.91%) 3.76% 7.66% 2.98% 16.63%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............. $3,916 $4,253 $3,207 $3,096 $3,126 $3,166
Ratio of expenses to average net assets ............. 1.75% 1.69% 1.67% 1.67% 1.68% 1.66%
Ratio of expenses to average net assets prior
to expense limitation and expenses paid
indirectly ....................................... 1.75% 1.69% 1.69% 1.69% 1.68% 1.67%
Ratio of net investment income to average net
assets ........................................... 4.19% 3.99% 4.04% 4.26% 4.18% 4.11%
Ratio of net investment income to average net
assets prior to expense limitation and expenses
paid indirectly .................................. 4.19% 3.99% 4.02% 4.24% 4.18% 4.10%
Portfolio turnover .................................. 18% 4% 6% 21% 14% 54%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
See accompanying notes
35
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period was as follows: Delaware Tax-Free Minnesota Intermediate Fund A Class
- ------------------------------------------------------------------------------------------------------------------------------------
Six Eight
Months Year Months
Ended Ended Ended Year Ended
2/29/00(1) 8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $10.610 $11.160 $11.170 $10.990 $11.140 $10.500
Income (loss) from investment operations:
Net investment income ................................... 0.272 0.541 0.363 0.535 0.510 0.510
Net realized and unrealized gain (loss)
on investments ....................................... (0.420) (0.550) (0.009) 0.180 (0.150) 0.640
----------------------------------------------------------------------
Total from investment operations ........................ (0.148) (0.009) 0.354 0.715 0.360 1.150
----------------------------------------------------------------------
Less dividends:
Dividends from net investment income .................... (0.272) (0.541) (0.364) (0.535) (0.510) (0.510)
----------------------------------------------------------------------
Total dividends ......................................... (0.272) (0.541) (0.364) (0.535) (0.510) (0.510)
----------------------------------------------------------------------
Net asset value, end of period ............................. $10.190 $10.610 $11.160 $11.170 $10.990 $11.140
======================================================================
Total return(2) ............................................ (1.40%) (0.14%) 3.22% 6.69% 3.46% 11.00%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $47,991 $56,222 $54,281 $57,524 $66,024 $72,405
Ratio of expenses to average net assets ................. 0.93% 0.79% 0.80% 0.91% 0.89% 0.91%
Ratio of expenses to average net assets prior
to expense limitation and expenses paid indirectly ... 0.93% 0.79% 0.80% 0.95% 0.89% 0.91%
Ratio of net investment income to average net assets .... 5.25% 4.91% 4.90% 4.86% 4.69% 4.61%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ........................................... 5.25% 4.91% 4.90% 4.82% 4.69% 4.61%
Portfolio turnover ...................................... 16% 13% 14% 21% 28% 40%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
See accompanying notes
36
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period was as follows: Delaware Tax-Free Minnesota Intermediate Fund B Class
- ------------------------------------------------------------------------------------------------------------------------------------
Six Eight Period
Months Year Months from
Ended Ended Ended Year Ended 8/15/95(4) to
2/29/00(1) 8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $10.630 $11.180 $11.170 $10.990 $11.140 $10.950
Income (loss) from investment operations:
Net investment income ................................... 0.227 0.450 0.301 0.437 0.440 0.170
Net realized and unrealized gain (loss)
on investments ....................................... (0.420) (0.552) 0.009 0.190 (0.150) 0.190
--------------------------------------------------------------------
Total from investment operations ........................ (0.193) (0.102) 0.310 0.627 0.290 0.360
--------------------------------------------------------------------
Less dividends:
Dividends from net investment income .................... (0.227) (0.448) (0.300) (0.447) (0.440) (0.170)
--------------------------------------------------------------------
Total dividends ......................................... (0.227) (0.448) (0.300) (0.447) (0.440) (0.170)
--------------------------------------------------------------------
Net asset value, end of period ............................. $10.210 $10.630 $11.180 $11.170 $10.990 $11.140
====================================================================
Total return(2) ............................................ (1.82%) (0.98%) 2.82% 5.84% 2.74% 3.26%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $2,724 $2,878 $1,375 $910 $408 $27
Ratio of expenses to average net assets ................. 1.78% 1.64% 1.65% 1.81% 1.56% 1.30%(5)
Ratio of expenses to average net assets prior
to expense limitation and expenses paid indirectly 1.78% 1.64% 1.65% 1.85% 1.62% 1.55%(5)
Ratio of net investment income to average net assets .... 4.40% 4.06% 4.05% 3.96% 3.99% 3.93%(5)
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ........................................... 4.40% 4.06% 4.05% 3.92% 3.93% 3.68%(5)
Portfolio turnover ...................................... 16% 13% 14% 21% 28% 40%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
(4) Commencement of operations.
(5) Annualized
See accompanying notes
37
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period was as follows: Delaware Tax-Free Minnesota Intermediate Fund C Class
- ------------------------------------------------------------------------------------------------------------------------------------
Six Eight
Months Year Months
Ended Ended Ended Year Ended
2/29/00(1) 8/31/99 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $10.610 $11.170 $11.170 $10.990 $11.130 $10.500
Income (loss) from investment operations:
Net investment income .................................. 0.227 0.449 0.301 0.440 0.430 0.420
Net realized and unrealized gain (loss)
on investments ...................................... (0.410) (0.561) (0.001) 0.187 (0.140) 0.630
---------------------------------------------------------------------
Total from investment operations .......................... (0.183) (0.112) 0.300 0.627 0.290 1.050
---------------------------------------------------------------------
Less dividends:
Dividends from net investment income ................... (0.227) (0.448) (0.300) (0.447) (0.430) (0.420)
---------------------------------------------------------------------
Total dividends ........................................ (0.227) (0.448) (0.300) (0.447) (0.430) (0.420)
---------------------------------------------------------------------
Net asset value, end of period ............................ $10.200 $10.610 $11.170 $11.170 $10.990 $11.130
=====================================================================
Total return(2) ........................................... (1.73%) (1.08%) 2.73% 5.84% 2.69% 10.18%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $2,463 $2,293 $1,601 $1,512 $1,137 $694
Ratio of expenses to average net assets ................ 1.78% 1.64% 1.65% 1.77% 1.64% 1.63%
Ratio of expenses to average net assets prior
to expense limitation and expenses paid indirectly .. 1.78% 1.64% 1.65% 1.81% 1.64% 1.63%
Ratio of net investment income to average net assets ... 4.40% 4.06% 4.05% 4.00% 3.94% 3.82%
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly .......................................... 4.40% 4.06% 4.05% 3.96% 3.94% 3.82%
Portfolio turnover ..................................... 16% 13% 14% 21% 28% 40%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
See accompanying notes
38
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period was as follows: Delaware Minnesota High-Yield Municipal Bond Fund A Class
- -----------------------------------------------------------------------------------------------------------------------------
Eight Period
Six Months Year Months Year From
Ended Ended Ended Ended 6/4/96(4) to
2/29/00(1) 8/31/99 8/31/98(1) 12/31/97(3) 12/31/96
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......................... $10.210 $10.810 $10.650 $10.180 $10.000
Income (loss) from investment operations:
Net investment income ..................................... 0.284 0.583 0.392 0.643 0.350
Net realized and unrealized gain (loss)
on investments ......................................... (0.862) (0.603) 0.170 0.463 0.180
-----------------------------------------------------------
Total from investment operations .......................... (0.578) (0.020) 0.562 1.106 0.530
-----------------------------------------------------------
Less dividends:
Dividends from net investment income ...................... (0.282) (0.580) (0.402) (0.636) (0.350)
-----------------------------------------------------------
Total dividends: .......................................... (0.282) (0.580) (0.402) (0.636) (0.350)
-----------------------------------------------------------
Net asset value, end of period ............................... $9.350 $10.210 $10.810 $10.650 $10.180
===========================================================
Total return(2) .............................................. (5.71%) (0.27%) 5.37% 11.26% 5.40%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $34,476 $41,813 $33,296 $19,017 $6,068
Ratio of expenses to average net assets ................... 0.75% 0.57% 0.40% 0.09% 0.24%(5)
Ratio of expenses to average net assets prior
to expense limitation and expenses paid indirectly ..... 1.16% 1.07% 1.20% 1.24% 1.25%(5)
Ratio of net investment income to average net assets ...... 5.89% 5.46% 5.50% 6.16% 5.78%(5)
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ............................................. 5.48% 4.96% 4.70% 5.01% 4.77%(5)
Portfolio turnover ........................................ 13% 35% 7% 23% 15%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
(4) Commencement of operations.
(5) Annualized
See accompanying notes
39
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period was as follows: Delaware Minnesota High-Yield Municipal Bond Fund B Class
- -----------------------------------------------------------------------------------------------------------------------------
Eight Period
Six Months Year Months Year From
Ended Ended Ended Ended 6/12/96(4) to
2/29/00(1) 8/31/99 8/31/98(1) 12/31/97(3) 12/31/96
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......................... $10.210 $10.810 $10.660 $10.190 $9.780
Income (loss) from investment operations:
Net investment income ...................................... 0.246 0.507 0.343 0.557 0.290
Net realized and unrealized gain (loss)
on investments .......................................... (0.862) (0.604) 0.159 0.470 0.410
---------------------------------------------------------
Total from investment operations ........................... (0.616) (0.097) 0.502 1.027 0.700
---------------------------------------------------------
Less dividends:
Dividends from net investment income ....................... (0.244) (0.503) (0.352) (0.557) (0.290)
---------------------------------------------------------
Total dividends: ........................................... (0.244) (0.503) (0.352) (0.557) (0.290)
---------------------------------------------------------
Net asset value, end of period ................................ $9.350 $10.210 $10.810 $10.660 $10.190
=========================================================
Total return(2) ............................................... (6.08%) (0.99%) 4.77% 10.41% 7.29%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................... $13,268 $15,814 $13,351 $8,201 $2,738
Ratio of expenses to average net assets .................... 1.50% 1.32% 1.15% 0.85% 0.95%(5)
Ratio of expenses to average net assets prior
to expense limitation and expenses paid indirectly ...... 1.91% 1.82% 1.95% 2.00% 2.00%(5)
Ratio of net investment income to average net assets ....... 5.14% 4.71% 4.75% 5.40% 5.14%(5)
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly .............................................. 4.73% 4.21% 3.95% 4.25% 4.09%(5)
Portfolio turnover ......................................... 13% 35% 7% 23% 15%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
(4) Commencement of operations.
(5) Annualized
See accompanying notes
40
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period was as follows: Delaware Minnesota High-Yield Municipal Bond Fund C Class
- -----------------------------------------------------------------------------------------------------------------------------
Eight Period
Six Months Year Months Year From
Ended Ended Ended Ended 6/7/96(4) to
2/29/00(1) 8/31/99 8/31/98(1) 12/31/97(3) 12/31/96
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......................... $10.210 $10.810 $10.650 $10.180 $9.990
Income (loss) from investment operations:
Net investment income ..................................... 0.246 0.505 0.340 0.572 0.300
Net realized and unrealized gain (loss)
on investments ......................................... (0.862) (0.602) 0.170 0.455 0.190
---------------------------------------------------------
Total from investment operations .......................... (0.616) (0.097) 0.510 1.027 0.490
---------------------------------------------------------
Less dividends:
Dividends from net investment income ...................... (0.244) (0.503) (0.350) (0.557) (0.300)
---------------------------------------------------------
Total dividends: .......................................... (0.244) (0.503) (0.350) (0.557) (0.300)
---------------------------------------------------------
Net asset value, end of period ............................... $9.350 $10.210 $10.810 $10.650 $10.180
=========================================================
Total return(2) .............................................. (6.08%) (0.99%) 4.87% 10.41% 5.02%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $6,770 $7,515 $5,165 $3,178 $900
Ratio of expenses to average net assets ................... 1.50% 1.32% 1.15% 0.83% 0.99%(5)
Ratio of expenses to average net assets prior
to expense limitation and expenses paid indirectly ..... 1.91% 1.82% 1.95% 1.98% 2.00%(5)
Ratio of net investment income to average net assets ...... 5.14% 4.71% 4.75% 5.42% 4.90%(5)
Ratio of net investment income to average net assets
prior to expense limitation and expenses paid
indirectly ............................................. 4.73% 4.21% 3.95% 4.27% 3.89%(5)
Portfolio turnover ........................................ 13% 35% 7% 23% 15%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc., as the Fund's investment manager.
(4) Commencement of operations.
(5) Annualized
See accompanying notes
41
<PAGE>
Notes to Financial Statements
February 29, 2000 (Unaudited)
- --------------------------------------------------------------------------------
Delaware Tax-Free Minnesota Fund ("Tax-Free Minnesota Fund"), a series of the
Voyageur Tax-Free Funds; Delaware Minnesota Insured Fund ("Minnesota Insured
Fund"), a series of the Voyageur Insured Funds; Delaware Tax-Free Minnesota
Intermediate Fund ("Tax-Free Minnesota Intermediate Fund"), a series of the
Voyageur Intermediate Tax-Free Funds; and Delaware Minnesota High-Yield
Municipal Bond Fund ("Minnesota High-Yield Municipal Bond Fund") a series of the
Voyageur Mutual Funds, (each referred to as a "Fund" or collectively as the
"Funds") are each Delaware Business Trusts registered under the Investment
Company Act of 1940 (as amended) as open-end management investment companies.
The Tax-Free Minnesota Fund, Minnesota Insured Fund, Tax-Free Minnesota
Intermediate Fund and Minnesota High-Yield Municipal Bond Fund are registered as
non-diversified Funds.
The Tax-Free Minnesota Fund seeks high current income free from both federal and
state income taxes by investing in investment grade municipal bonds. The
Minnesota Insured Fund seeks high current income free from both federal and
state income taxes with the added safety of an insured portfolio by investing in
insured municipal bonds. The Tax-Free Minnesota Intermediate Fund seeks to
preserve original investment principal while providing income free from both
federal and state income taxes by investing in intermediate term investment
grade municipal bonds. The Minnesota High-Yield Municipal Bond Fund seeks high
current income free from both federal and state income taxes by investing in
medium and lower-grade municipal bonds.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation -- Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Money market instruments having less than 60 days to maturity are
valued at amortized cost, which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Funds' Board
of Trustees. Federal Income Taxes - Each Fund intends to continue to qualify as
a regulated investment company and make the requisite distributions to
shareholders. Accordingly, no provision for federal income taxes has been made
in the financial statements. Income and capital gain distributions are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles.
Class Accounting -- Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Funds on the basis of daily net assets of each class. Distribution expenses
relating to a specific class are charged directly to that class.
<PAGE>
- --------------------------------------------------------------------------------
Use of Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Certain expenses of the Funds are paid through "soft dollar" arrangements with
brokers. These transactions are done subject to best price and execution. The
amount of these expenses for the period ended February 29, 2000 were:
Tax-Free Minnesota Fund $4,500
Minnesota Insured Fund 3,114
Tax-Free Minnesota Intermediate Fund 663
Minnesota High-Yield Municipal Bond Fund 703
The expenses paid under the above arrangement are included in their respective
expense captions in the Statement of Operations with the corresponding expenses
offset shown as "Expenses paid indirectly".
Other -- Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Interest income is recorded on the accrual basis. Original issue discounts and
market premium are amortized to interest income over the lives of the respective
securities. The Funds declare dividends from net investment income daily and pay
them monthly. Capital gains, if any, are distributed annually.
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Funds
pay Delaware Management Company ("DMC") the Investment Manager of each Fund, an
annual fee, which is calculated daily on the average daily net assets of each
Fund.
In accordance with the terms of the Investment Management Agreement, the
Minnesota Insured Fund and the Tax-Free Minnesota Intermediate Fund pays DMC,
the Investment Manager of the Fund, an annual fee which is calculated at the
rate of 0.50% on the first $500 million of average daily net assets of the Fund,
0.475% on the next $500 million, 0.45% on the next $1,500 million and 0.425% on
the average daily net assets in excess of $2,500 million. The Tax-Free Minnesota
Fund and the Minnesota High-Yield Municipal Bond Fund pays DMC, the Investment
Manager of the Fund, an annual fee which is calculated at the rate of 0.55% on
the first $500 million of average daily net assets of the Fund, 0.50% on the
next $500 million, 0.45% on the next $1,500 million and 0.425% on the average
daily net assets in excess of $2,500 million.
42
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
2. Investment Management and Other Transactions with Affiliates (continued)
DMC has elected to waive their fees and reimburse each Fund to the extent that
annual operating expenses exclusive of taxes, interest, brokerage commissions,
distribution expenses and extraordinary expenses do not exceed the following
percentages of average daily net assets through October 31, 2000.
Operating expense
limitation as a
percentage of
average daily net
assets (per annum)
------------------
Tax-Free Minnesota Fund ..................................... 0.75%
Minnesota Insured Fund ...................................... 0.75%
Tax-Free Minnesota Intermediate Fund ........................ 0.75%
Minnesota High-Yield Municipal Bond Fund .................... 0.50%
The Funds have engaged Delaware Service Company, Inc. ("DSC"), an affiliate of
DMC, to provide dividend disbursing, transfer agent and accounting services.
Each Fund pays DSC a monthly fee based on the number of shareholder accounts,
shareholder transactions and average net assets, subject to certain minimums.
At February 29, 2000, the Funds had payables to affiliates as follows:
Dividend
disbursing,
transfer agent Other
Investment fees, accounting expenses
management fees and other payable to
fee payable expenses DMC and
to DMC payable to DSC affiliates
---------- -------------- ----------
Tax-Free Minnesota Fund .......... - $45,284 $12,027
Minnesota Insured Fund ........... $28,560 31,602 8,456
Tax-Free Minnesota
Intermediate Fund ............. 6,030 7,041 2,353
Minnesota High-Yield
Municipal Bond Fund ........... - 6,886 1,905
Pursuant to the Distribution Agreement, the Funds pay Delaware Distributors,
L.P. ("DDLP"), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.25% of the average daily net assets of the A Class for the Tax-Free
Minnesota Fund, the Minnesota Insured Fund and the Minnesota High-Yield
Municipal Bond Fund and 0.15% of the average daily net assets of the Tax-Free
Minnesota Intermediate Fund A Class and 1.00% of the average daily net assets of
the B and C Class for each Fund.
<PAGE>
- --------------------------------------------------------------------------------
For the period ended February 29, 2000, DDLP earned commissions on sales of the
Fund A Class shares for each Fund as follows:
Tax-Free Minnesota Fund ............................. $20,370
Minnesota Insured Fund .............................. 12,216
Tax-Free Minnesota Intermediate Fund ................ 1,178
Minnesota High-Yield Municipal Bond Fund ............ 8,909
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 February 29, 2000, the Funds made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments for each Fund as follows:
Purchases Sales
----------- -----------
Tax-Free Minnesota Fund .......................... $40,530,226 $68,457,370
Minnesota Insured Fund ........................... 24,163,481 44,255,050
Tax-Free Minnesota Intermediate Fund ............. 4,720,220 11,926,578
Minnesota High-Yield Municipal
Bond Fund ....................................... 3,835,000 8,370,423
At February 29, 2000, the aggregate cost of securities and unrealized
appreciation (depreciation) for federal income tax purposes for each Fund were
as follows:
Aggregate Aggregate Net unrealized
Cost of unrealized unrealized appreciation/
investments appreciation depreciation (depreciation)
----------- ------------ ------------ --------------
Tax-Free
Minnesota
Fund ............. $370,631,356 $7,714,417 ($11,561,690) ($3,847,273)
Minnesota
Insured Fund ..... 253,913,221 6,817,745 (3,597,607) 3,220,138
Tax-Free
Minnesota
Intermediate
Fund ............. 53,713,870 559,357 (1,647,825) (1,088,468)
Minnesota
High-Yield
Municipal
Bond Fund ........ 59,319,044 70,486 (5,840,574) (5,770,088)
43
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
3. Investments (continued)
For federal income tax purposes, the Funds had accumulated capital losses at
February 29, 2000 as follows:
<TABLE>
<CAPTION>
Year Of Expiration
2003 2004 2005 2006 2007 Total
------------------------------------------------------------------------
<S> <C> <C> <C>
Minnesota Insured Fund ............................. $5,327,280 $572,208 - - - $5,899,488
Tax-Free Minnesota Intermediate Fund ............... - 43,983 - - - 43,983
Minnesota High-Yield Municipal Bond Fund ........... - 6,809 $4,334 $648 $369 12,160
</TABLE>
4. Capital Shares
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Minnesota
Tax-Free High-Yield
Tax-Free Minnesota Minnesota Municipal Bond
Minnesota Fund Insured Fund Intermediate Fund Fund
---------------------- ---------------------- -------------------- ----------------------
Six Months Year Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended Ended Ended
2/29/00 8/31/99 2/29/00 8/31/99 2/29/00 8/31/99 2/29/00 8/31/99
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class ....................... 1,131,073 2,462,224 444,894 1,515,691 188,005 1,024,816 480,849 1,292,595
B Class ....................... 108,109 361,886 83,984 311,761 32,824 151,759 86,348 402,309
C Class ....................... 99,353 268,078 28,731 159,649 52,388 111,369 91,380 293,311
Shares issued upon reinvestment
of distributions from net
investment income and
net realized gain on
investments:
A Class ...................... 534,853 1,106,511 417,078 816,740 100,836 192,307 66,744 107,761
B Class ...................... 16,009 27,985 15,806 27,641 3,780 5,176 21,993 38,021
C Class ...................... 9,660 16,547 6,978 11,362 4,191 6,397 13,426 19,496
---------- ---------- ---------- ---------- -------- -------- ---------- --------
1,899,057 4,243,231 997,471 2,842,844 382,024 1,491,824 760,740 2,153,493
---------- ---------- ---------- ---------- -------- -------- ---------- --------
Shares repurchased:
A Class ...................... (3,604,732) (3,304,277) (2,361,152) (2,426,865) (879,252) (780,045) (953,912) (386,064)
B Class ...................... (107,904) (88,793) (178,888) (153,897) (40,521) (9,190) (237,783) (126,553)
C Class ...................... (79,605) (105,337) (56,077) (57,033) (31,128) (45,076) (116,576) (54,733)
---------- ---------- ---------- ---------- -------- -------- ---------- --------
(3,792,241) (3,498,407) (2,596,117) (2,637,795) (950,901) (834,311) (1,308,271) (567,350)
---------- ---------- ---------- ---------- -------- -------- ---------- --------
Net Increase (Decrease) .......... (1,893,184) 744,824 (1,598,646) 205,049 (568,877) 657,513 (547,531) 1,586,143
========== ========== ========== ========== ======== ======== ========== ========
</TABLE>
5. Lines of Credit
Effective October 8, 1999, the Funds, along with certain other funds in the
Delaware Investments Family of Funds (the "Participants"), participate in a
$683,500,000 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 their
net assets under the agreement. Prior to October 8, 1999, the Tax-Free Minnesota
Fund, Minnesota Insured Fund, Tax-Free Minnesota Intermediate Fund and Minnesota
High-Yield Municipal Bond Fund had a committed lines of credit of $21,600,000,
$14,900,000, $3,100,000 and $1,600,000, respectively. The Funds had no amounts
outstanding at February 29, 2000 or at any time during the fiscal year.
6. Credit and Market Risk
The Funds concentrate their investments in securities issued by municipalities,
mainly in Minnesota. The value of these investments may be adversely affected by
new legislation within the state, regional or local economic conditions, and
differing levels of supply and demand for municipal bonds. Many municipalities
insure repayment for their obligations. Although bond insurance reduces the risk
of loss due to default by an issuer, such bonds remain subject to the risk that
market value may fluctuate for other reasons and there is no assurance that the
insurance company will meet its obligations. These securities have been
identified in the Statement of Net Assets.
44
DELAWARE INVESTMENTS FAMILY OF FUNDS
- ------------------------------------
Complete information on any fund offered by Delaware Investments can be found in
each fund's current prospectus. Prospectuses for all funds offered by Delaware
Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.
<TABLE>
<CAPTION>
<S> <C> <C>
Growth of Capital International Tax-Exempt Income
o Technology and Innovation Fund Diversification
o Select Growth Fund o Emerging Markets Fund o National High-Yield
o Trend Fund o New Pacific Fund Municipal Bond Fund
o Growth Opportunities o Overseas Equity Fund o Tax-Free USA Fund
Fund* o International Equity Fund o Tax-Free Insured Fund
o Small Cap Value Fund o Global Equity Fund o Tax-Free USA
o U.S. Growth Fund o Global Bond Fund Intermediate Fund
o Tax-Efficient Equity Fund o State Tax-Free Funds**
o Social Awareness Fund Current Income
Stability of Principal
o Delchester Fund
Total Return o High-Yield o Cash Reserve
o Blue Chip Fund Opportunities Fund o Tax-Free Money Fund
o Devon Fund o Strategic Income Fund
o Growth and Income Fund o Corporate Bond Fund Asset Allocation
o Decatur Equity o Extended Duration
Income Fund Bond Fund o Foundation Funds
o REIT Fund o American Government Growth Portfolio
o Balanced Fund Bond Fund Balanced Portfolio
o U.S. Government Income Portfolio
Securities Fund
o Limited-Term
Government Fund
</TABLE>
* Formerly known as DelCap Fund
** Available for the following states: Arizona, California, Colorado, Florida,
Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, New Jersey, New
Mexico, New York, Ohio, Oregon, Pennsylvania and Wisconsin. Insured and
intermediate bond funds are available in selected states.
(C)Delaware Distributors, L.P.
<PAGE>
DELAWARE(SM)
INVESTMENTS
- ----------------------
Philadelphia [] 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 semi-annual report is for the information of Delaware Minnesota Municipal
Bond Funds shareholders, but it may be used with prospective investors when
preceded or accompanied by a current Prospectus for the Delaware Minnesota
Municipal Bond Funds and the Delaware Investments Performance Update for the
most recently completed calendar quarter. The prospectus sets forth details
about charges, expenses, investment objectives and operating policies of the
Funds. You should read the prospectus carefully before you invest. The figures
in this report represent past results which are not a guarantee of future
results. The return and principal value of an investment in each Fund will
fluctuate so that shares, when redeemed, may be worth more or less than their
original cost.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BOARD OF TRUSTEES Charles E. Peck Investment Manager
Wayne A. Stork Retired Delaware Management Company
Chairman Fredericksburg, VA Philadelphia, PA
Delaware Investments Family of Funds
Philadelphia, PA Janet L. Yeomans International Affiliate
Vice President and Treasurer Delaware International Advisers Ltd.
Walter P. Babich 3M Corporation London, England
Board Chairman, St. Paul, MN
Citadel Constructors, Inc. National Distributor
King of Prussia, PA AFFILIATED OFFICERS Delaware Distributors, L.P.
Philadelphia, Pennsylvania
David K. Downes Charles E. Haldeman, Jr.
President and Chief Executive Officer President and Chief Executive Officer Shareholder Servicing, Dividend
Delaware Investments Family of Funds Delaware Management Holdings, Inc. Disbursing and Transfer Agent
Philadelphia, PA Philadelphia, PA Delaware Service Company, Inc.
Philadelphia, PA
John H. Durham Richard J. Flannery
Private Investor Executive Vice President and 1818 Market Street
Horsham, PA General Counsel Philadelphia, PA 19103-3682
Delaware Investments Family of Funds
Anthony D. Knerr Philadelphia, PA
Consultant, Anthony Knerr & Associates
New York, NY Bruce D. Barton
President and Chief Executive Officer
Ann R. Leven Delaware Distributors, L.P.
Former Treasurer, National Gallery of Art Philadelphia, PA
Washington, DC
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
</TABLE>
(2895) Printed in the USA
SA-MNALL [02/00]PP 04/00 (J5742)
