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AGGRESSIVE GROWTH FUND
GROWTH STOCK FUND
INTERNATIONAL EQUITY FUND
ANNUAL REPORT
Dated April 30, 1995
Voyageur offers a family of mutual funds, each with an individual objective
stated in its prospectus. Investment objectives of the funds range from high
current income to long-term capital appreciation. Exchange privileges allow you
to change your investment between Voyageur Funds as your objectives or market
conditions change.
VOYAGEUR TAX FREE FUNDS seek high current income free from both Federal income
taxes and state income taxes (where applicable). The Funds invest in investment
grade municipal bonds.
Voyageur ARIZONA Tax Free Fund Voyageur KANSAS Tax Free Fund
Voyageur CALIFORNIA Tax Free Fund Voyageur MINNESOTA Tax Free Fund
Voyageur COLORADO Tax Free Fund Voyageur NEW MEXICO Tax Free Fund
Voyageur FLORIDA Tax Free Fund Voyageur NORTH DAKOTA Tax Free Fund
Voyageur IDAHO Tax Free Fund Voyageur UTAH Tax Free Fund
Voyageur IOWA Tax Free Fund Voyageur WISCONSIN Tax Free Fund
VOYAGEUR INSURED TAX FREE FUNDS seek high current income free from both Federal
income taxes and state income taxes (where applicable) with the added safety of
an insured portfolio. The Funds invest in insured municipal bonds.
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Voyageur ARIZONA Insured Tax Free Fund Voyageur MISSOURI Insured Tax Free Fund
Voyageur CALIFORNIA Insured Tax Free Fund Voyageur NATIONAL Insured Tax Free Fund
Voyageur FLORIDA Insured Tax Free Fund Voyageur OREGON Insured Tax Free Fund
Voyageur MINNESOTA Insured Fund Voyageur WASHINGTON Insured Tax Free Fund
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VOYAGEUR LIMITED TERM FUNDS seek to preserve original investment principal while
providing income free from both Federal income taxes and state income taxes
(where applicable). The Funds invest in intermediate term investment grade
municipal bonds.
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Voyageur FLORIDA Limited Term Tax Free Fund Voyageur MINNESOTA Limited Term Tax Free Fund
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VOYAGEUR EQUITY FUNDS seek long term capital appreciation by investing in common
stocks.
Voyageur AGGRESSIVE GROWTH Fund Voyageur INTERNATIONAL Equity Fund
Voyageur GROWTH Stock Fund
VOYAGEUR INCOME FUNDS seek high current income from investments issued,
guaranteed or otherwise backed by the full faith and credit of the U.S.
Government.
Voyageur U.S. GOVERNMENT SECURITIES Fund
VOYAGEUR CASH TRUST SERIES MONEY MARKET FUNDS seek high current income,
principal protection and liquidity by investing in money market instruments.
Voyageur CALIFORNIA MUNICIPAL CASH Series Voyageur MUNICIPAL CASH Series
Voyageur FLORIDA MUNICIPAL CASH Series Voyageur OHIO MUNICIPAL CASH Series
Voyageur GOVERNMENT CASH Series Voyageur PRIME CASH Series
Voyageur MINNESOTA MUNICIPAL CASH Series Voyageur TREASURY CASH Series
For more complete information regarding the investment objectives, fees and
expenses of the Funds, please obtain a prospectus from your Investment
Representative or from Voyageur, 90 South Seventh Street, Suite 4400,
Minneapolis, MN 55402-4115; (612) 376-7044 (local); 800-525-6584 (MKTG).
Dear Shareholder:
One of the reasons we expanded our equity offerings last year was to provide
investors with some "global" opportunities. The Voyageur International Equity
Fund is an obvious global opportunity with investment positions in approximately
19 countries. However, Voyageur's two other equity funds, although not
considered international, have some indirect global connections. Many of the
quality stocks contained in these portfolios are issued by American companies
that are operating in or expanding into foreign markets. As the global economy
continues to connect countries, businesses, and people, we believe your Voyageur
equity funds are positioned to perform well.
Our veteran equity fund, the Growth Stock Fund, had an exceptional year and
demonstrated successful performance during this reporting period. The other
funds, the Aggressive Growth Fund and the International Equity Fund
significantly underperformed their respective indices, the Standard and Poor's
500 Index and the Morgan Stanley EAFE Index. We have taken into account that
these two funds have been in existence less than one year, and believe that we
shall see stronger performance in the future. See the attached charts for
specific performance information about each Fund.
At the close of this reporting period, we took advantage of an opportunity to
leverage the talents and track record of Tony Elavia, a portfolio manager who
joined Voyageur in February, to manage the Aggressive Growth Fund. Tony brings
12 years of investment and research expertise to his new role at Voyageur.
Sincerely,
/s/ John G. Taft
John G. Taft
President
Voyageur Aggressive Growth Fund
Voyageur Growth Stock Fund
Voyageur International Equity Fund
Voyageur Aggressive Growth Fund
It would be an understatement to say that last year was a difficult and
frustrating year. The Voyageur Aggressive Growth Fund underperformed its
comparable index, the S&P 500, by 12.43%.
Our quantitative models and industry analysis pointed us to sectors experiencing
rapid growth at reasonable prices. However, within a non-indexed small cap
portfolio, the possibility existed that one or two issues could dramatically
affect a sector or the whole portfolio when viewing short term performance
despite broad diversification efforts.
We were disadvantaged by our lack of exposure to Financial Services and
Utilities; however, our style and logic constraints did not allow us to
contribute "growth" funds to sectors that did not exhibit real growth and that
rose and fell with short term fluctuations in commodity (including interest
rates or money as a commodity) prices.
In closing, we remain committed to the belief that earnings, growth, good
relative value, industry attractiveness, and good company fundamentals are the
cornerstones of a long term investment process in any equity market.
GEORGE D. BJURMAN & ASSOCIATES, SUB-ADVISER
George D. Bjurman & Associates, a leading equity manager with over 20 years of
experience, was the Sub-Adviser to the Fund for this reporting period.
*****
Note to Shareholders: On May 1, 1995, the Fund changed portfolio managers.
Moving forward, the strategy outlined by the new manager for the Fund includes
the following:
* Buying undervalued stocks which show strong promise of future profitability.
* Underweight or overweight certain sectors, as the market climate warrants.
* Incorporate long- and medium-term "themes" into the portfolio.
Long term: overweighting in electronics, communication
equipment, and computer hardware and software.
Medium term: health care, HMOs, and medical devices.
By instituting these and other strategies, the Voyageur Aggressive Growth Fund's
management hopes to bring the Fund's performance in greater alignment with the
S&P 500.
VOYAGEUR AGGRESSIVE GROWTH FUND
INVESTMENT PERFORMANCE
THROUGH APRIL 30, 1995
Class A Shares
Voyageur Aggressive Voyageur Aggressive
Growth Fund Without Growth Fund With Standard and Poor's
Sales Charge Sales Charge 500 Index - Ending
Ending Value $10,400 Ending Value $9,906 Value $11,643
May-94 $10,000 $ 9,525 $10,000
May-94 $ 9,920 $ 9,449 $10,079
Jun-94 $ 9,920 $ 8,782 $ 9,830
Jul-94 $ 9,270 $ 8,830 $10,155
Aug-94 $10,240 $ 9,754 $10,568
Sep-94 $10,130 $ 9,649 $10,313
Oct-94 $10,520 $10,020 $10,549
Nov-94 $10,020 $ 9,544 $10,162
Dec-94 $ 9,900 $ 9,430 $10,310
Jan-95 $ 9,510 $ 9,058 $10,578
Feb-95 $ 9,880 $ 9,411 $10,989
Mar-95 $10,340 $ 9,849 $11,314
Apr-95 $10,400 $ 9,906 $11,643
Class C Shares
Voyageur Aggressive Standard and Poor's
Growth Fund - Ending 500 Index - Ending
Value $10,330 Value $11,643
May-94 $10,000 $10,000
May-94 $ 9,920 $10,079
Jun-94 $ 9,210 $ 9,830
Jul-94 $ 9,250 $10,155
Aug-94 $10,220 $10,568
Sep-94 $10,100 $10,313
Oct-94 $10,480 $10,549
Nov-94 $ 9,980 $10,162
Dec-94 $ 9,850 $10,310
Jan-95 $ 9,460 $10,578
Feb-95 $ 9,820 $10,989
Mar-95 $10,280 $11,314
Apr-95 $10,330 $11,643
Voyageur Aggressive Growth Fund
Total Returns
(Class A Shares)
Since
5/16/94**
Without Sales 4.00%
Charge
With Sales (0.94)%
Charge
Voyageur Aggressive Growth Fund
Total Returns
(Class C Shares)
Since
5/20/94**
Without 3.30%
Contingent
Deferred Sales
Charge
With Contingent 2.30%
Deferred Sales
Charge***
The performance of seperate classes will vary based on the differences in sales
loads and distribution fees paid by shareholders investing in the different
classes. Performance quoted represents past performance and is not indicative of
future results.
* Total return includes the maximum 4.75% sales charge.
** Commencement of operations.
*** Assumes redemption on April 30, 1995.
The Standard and Poor's 500 Index is an unmanaged, market value weighted index
of 500 widely held common stocks. The index includes industrial, utility,
financial and transportation stocks primarily, but not exclusively, traded on
the New York Stock Exchange. The S & P 500 represents approximately 77% of the
NYSE market capitalization. The index assumes that no operating expenses,
transaction fees or sales charges are incurred by a hypothetical investor who
directly owns the securities maintained in the index. In order to outperform the
index over any specific time frame, a fund must return to investors an amount
greater than that provided by the index plus total operating expenses.
Voyageur Growth Stock Fund
Throughout the year, the fund did well. There has been a fundamental shift in
equity markets which favors quality securities. Since this Fund invests in high
quality securities, we were in good position for the flight to quality trend.
We buy companies for the long term in order to participate in their earnings and
dividend growth, and we generally hold companies for an average of five years.
Despite this commitment to holding companies for the long term, we will sell a
company if we see signs of overvalue or fundamental problems. In this reporting
period, for example, we sold our WMX Technologies (Waste Management) holdings
because the company's rating was being downgraded. Instead we purchased
Motorola, Inc., a higher quality stock in a different sector that was less
sensitive to the domestic economy and in alignment with our current strategy of
global diversification.
Our approach with this Fund is to select stocks from a relatively narrow segment
of quality stocks within the market (a universe of approximately 240 companies
rated A+ or A), concentrate our portfolio in 30 of these high quality companies,
and buy companies for the long term.
For the remainder of the year, we see the market looking pricey and ensuing
volatility will, most likely, lead people to seek quality investments. We have
assumed a defensive, quality posture by positioning the portfolio in large cap,
multinational companies. The market will likely adjust downward making the
second half of the year a more difficult environment for capital appreciation
than was the first half. All in all, we anticipate continued good relative
performance for the Fund.
JAMES C. KING
Mr. King is an Executive Vice President of Voyageur Fund Managers, Inc. and
portfolio manager for the Growth Stock Fund. He has managed the Fund since
January 1992 and has over 28 years of investment experience.
VOYAGEUR GROWTH STOCK FUND
INVESTMENT PERFORMANCE
THROUGH APRIL 30, 1995
VOYAGEUR GROWTH VOYAGEUR GROWTH
STOCK FUND STOCK FUND
WILSHIRE LARGE
WITHOUT SALES WITH SALES COMPANY GROWTH
CHARGE - ENDING CHARGE - ENDING INDEX - ENDING
VALUE $37,961 VALUE $36,158 VALUE $38,149
Jul-85 $10,000 $ 9,525 $10,000
$10,054 $ 9,576 $ 9,898
$10,094 $ 9,614 $ 9,536
$10,234 $ 9,748 $ 9,951
$10,653 $10,147 $10,763
$11,025 $10,502 $11,313
$11,483 $10,937 $11,326
$12,262 $11,680 $12,147
$13,123 $12,500 $12,876
Apr-86 $13,528 $12,886 $12,882
$14,490 $13,802 $13,604
$15,105 $14,388 $13,884
$13,812 $13,156 $13,023
$14,596 $13,903 $13,671
$13,456 $12,817 $12,268
$14,525 $13,835 $13,110
$14,393 $13,709 $13,368
$14,759 $14,058 $13,062
$16,703 $15,910 $14,922
$16,723 $15,929 $15,862
$17,904 $17,054 $16,077
Apr-87 $17,772 $16,928 $15,663
$18,087 $17,228 $15,816
$18,617 $17,732 $16,737
$18,871 $17,975 $17,579
$19,858 $18,915 $18,419
$19,533 $18,605 $17,944
$15,064 $14,349 $13,822
$14,006 $13,340 $12,603
$15,916 $15,160 $13,680
$15,686 $14,941 $14,148
$16,386 $15,608 $15,001
$16,501 $15,717 $14,529
Apr-88 $16,825 $16,026 $14,468
$16,365 $15,588 $14,401
$17,442 $16,613 $15,144
$16,971 $16,165 $15,023
$16,313 $15,538 $14,609
$17,128 $16,314 $15,475
$17,065 $16,255 $15,722
$16,574 $15,787 $15,432
$17,607 $16,770 $15,760
$18,593 $17,710 $16,800
$18,352 $17,480 $16,399
$18,855 $17,960 $16,940
Apr-89 $20,345 $19,379 $17,909
$21,080 $20,079 $18,903
$20,125 $19,169 $18,733
$21,227 $20,218 $20,814
$21,993 $20,948 $21,016
$22,832 $21,748 $20,972
$22,339 $21,278 $20,645
$22,906 $21,818 $21,089
$22,741 $21,661 $21,310
$20,777 $19,790 $19,731
$21,588 $20,562 $19,774
$22,421 $21,356 $20,577
Apr-90 $21,519 $20,497 $20,297
$24,243 $23,091 $22,528
$24,714 $23,540 $22,762
$23,028 $21,934 $22,496
$20,463 $19,491 $20,312
$19,223 $18,310 $18,957
$18,975 $18,074 $18,843
$20,363 $19,396 $20,415
$21,231 $20,223 $21,382
$22,651 $21,575 $22,836
$24,848 $23,667 $24,759
$25,973 $24,739 $25,853
Apr-91 $25,933 $24,701 $25,797
$27,607 $26,296 $27,068
$26,535 $25,275 $25,772
$28,290 $26,946 $27,102
$29,536 $28,133 $28,113
$29,322 $27,929 $27,446
$30,608 $29,154 $27,740
$29,656 $28,248 $27,260
$33,536 $31,943 $31,352
$32,403 $30,864 $30,834
$32,443 $30,902 $31,121
$31,850 $30,337 $30,296
Apr-92 $32,120 $30,594 $30,369
$32,119 $30,593 $30,548
$31,844 $30,332 $29,681
$32,667 $31,115 $30,883
$32,210 $30,680 $30,481
$32,886 $31,324 $30,997
$33,618 $32,021 $31,616
$35,245 $33,570 $33,014
$35,478 $33,793 $33,212
$35,057 $33,148 $32,860
$34,490 $32,851 $32,370
$34,563 $32,921 $32,785
Apr-93 $32,604 $31,055 $30,952
$33,355 $31,770 $32,085
$32,512 $30,968 $31,671
$32,165 $30,637 $30,803
$33,098 $31,526 $31,924
$32,897 $31,334 $31,717
$33,446 $31,857 $32,589
$33,794 $32,189 $32,697
$33,805 $32,199 $33,033
$34,286 $32,658 $33,694
$33,434 $31,846 $33,344
$32,156 $30,629 $31,770
Apr-94 $32,434 $30,893 $32,014
$32,786 $31,228 $32,421
$31,711 $30,205 $31,377
$32,397 $30,858 $32,284
$33,619 $32,022 $34,089
$33,175 $31,599 $33,478
$33,767 $32,164 $34,422
$33,082 $31,511 $33,576
$33,729 $32,127 $34,016
$35,102 $33,434 $34,982
$36,284 $34,560 $36,251
$37,085 $35,323 $37,310
Apr-95 $37,962 $36,158 $38,149
Voyageur
Growth Stock Fund
Average Annual Total Returns
Since
1 Year 5 Year 8/1/85**
Without Sales Charge 17.04% 12.02% 14.66%
With Sales Charge 11.48% 10.94% 14.09%
Performance quoted represents past performance and is not indicative of future
results.
* Average annual total returns include the maximum 4.75% sales charge.
** Commencement of operations.
Wilshire Large Company Growth Index
The Wilshire Large Company Growth Index includes equity securities that fit the
"growth stock" characteristics established from the largest 750 stocks in the
Wilshire 5000 index. These companies have market capitalization of at least $725
million and account for 99 percent of the total market capitalization of the
Wilshire 5000. The index assumes that no operating expenses, transaction fees or
sales charges are incurred by a hypothetical investor who directly owns the
securities maintained in the index. In order to outperform the index over any
specific time frame, a fund must return to investors an amount greater than that
provided by the index plus total operating expenses.
Voyageur International Equity Fund
Throughout much of 1994, global markets continued to focus on the United States,
where strong growth lead to worries over the emergence of inflation and
precautionary interest rate hikes. An overreaction to economic events in the
United States translated into an unimpressive 1994 for international markets. As
the year ended, bond markets showed traces of stability and strength. This
translated into short-term improvement in most markets, with some impressive
movements recorded in Southeast Asia and Europe.
In the first quarter of 1995, international markets were unsettled by three
factors: the confusion over the state of the U.S. economy and the direction of
interest rates, the continuing slide in Mexico and its impact on other emerging
markets, and world-wide currency volatility, stemming from both of these
situations.
For the balance of 1995, we believe the progress in the U.S. market will be
modest. When it becomes clear that earnings have peaked for this cycle, stock
prices will begin to retreat. Other markets, however, are behind the United
States in the industrial and stock market cycle. In Europe, economic recovery is
strengthening earnings and improving valuations which stock markets are
beginning to respond to. In Southeast Asia, we see great potential, especially
in Hong Kong.
The outlook for Japan, however, remains mixed. The domestic recovery has been
growing after the long recession, but progress is likely to be stalled by an
inexorable rise of the Yen which will likely lead to another round of cuts to
profit forecasts for 1995, taking the gloss off what would otherwise be an
economy seeing a sound recovery.
Therefore, we will continue with a well underweighted exposure to Japan while
the focus of the portfolio will remain on Europe and the smaller markets in the
Far East.
MURRAY JOHNSTONE INTERNATIONAL LTD.
Murray Johnstone International serves as the Sub-Adviser to the Fund. Based in
Glasgow, Scotland, Murray Johnstone is a leading international money manager
whose origins date back to 1907.
VOYAGEUR INTERNATIONAL EQUITY FUND
INVESTMENT PERFORMANCE
THROUGH APRIL 30, 1995
Class A Shares
Voyageur International Voyageur International
Equity Fund Without Equity Fund With Morgan Stanley
Sales Charge Sales Charge EAFE Index - Ending
Ending Value $9,420 Ending Value $8,973 Value $10,590
May-94 $10,000 $ 9,525 $10,000
May-94 $ 9,840 $ 9,373 $ 9,972
Jun-94 $ 9,660 $ 9,201 $10,113
Jul-94 $ 9,840 $ 9,373 $10,210
Aug-94 $10,130 $ 9,649 $10,452
Sep-94 $ 9,900 $ 9,430 $10,123
Oct-94 $ 9,980 $ 9,506 $10,460
Nov-94 $ 9,430 $ 8,982 $ 9,957
Dec-94 $ 9,100 $ 8,668 $10,020
Jan-95 $ 8,740 $ 8,325 $ 9,635
Feb-95 $ 8,730 $ 8,315 $ 9,607
Mar-95 $ 9,150 $ 8,715 $10,206
Apr-95 $ 9,420 $ 8,973 $10,590
Class C Shares
Voyageur International Morgan Stanley
Equity Fund EAFE Index - Ending
Ending Value $9,369 Value $10,590
May-94 $10,000 $10,000
May-94 $ 9,830 $ 9,972
Jun-94 $ 9,640 $10,113
Jul-94 $ 9,810 $10,210
Aug-94 $10,100 $10,452
Sep-94 $ 9,880 $10,123
Oct-94 $ 9,950 $10,460
Nov-94 $ 9,379 $ 9,957
Dec-94 $ 9,049 $10,020
Jan-95 $ 8,679 $ 9,635
Feb-95 $ 8,659 $ 9,607
Mar-95 $ 9,089 $10,206
Apr-95 $ 9,369 $10,590
Voyageur International Equity Fund
Total Returns
(Class A Shares)
Since
5/16/94**
Without Sales (5.80)%
Charge
With Sales (10.27)%
Charge
Voyageur International Equity Fund
Total Returns
(Class C Shares)
Since
5/20/94**
Without (6.31)%
Contingent
Deferred Sales
Charge
With Contingent (7.24)%
Deferred Sales
Charge***
The performance of seperate classes will vary based on the differences in sales
loads and distribution fees paid by shareholders investing in the different
classes. Performance quoted represents past performance and is not indicative of
future results.
* Total return includes the maximum 4.75% sales charge.
** Commencement of operations.
*** Assumes redemption on April 30, 1995.
The Morgan Stanley EAFE Index is an unmanaged index of approximately 1,000
stocks representing the markets of 18 countries in Europe, Australia, New
Zealand and the Far East. The index is in U.S. dollars with net dividends. The
index assumes no operating expenses, transaction fees or sales charges are
incurred by a hypothetical investor who directly owns the securities maintained
in the index. In order to outperform the index over any specific time frame, a
fund must return to investors an amount greater than that provided by the index
plus total operating expenses.
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Voyageur Mutual Funds III, Inc.
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments in securities, of Voyageur Aggressive
Growth Fund, Voyageur Growth Stock Fund and Voyageur International Equity Fund
(funds within Voyageur Mutual Funds III, Inc.) as of April 30, 1995, and the
related statements of operations for the year then ended (period from May 16,
1994, commencement of operations, to April 30, 1995 for Voyageur Aggressive
Growth Fund and Voyageur International Equity Fund), the statements of changes
in net assets for each of the years in the two-year period ended April 30, 1995
for Voyageur Growth Stock Fund (period from May 16, 1994 to April 30, 1995 for
Voyageur Aggressive Growth Fund and Voyageur International Equity Fund) and the
financial highlights for each of the years in the five-year period ended April
30, 1995 for Voyageur Growth Stock Fund (period from May 16, 1994 to April 30,
1995 for Voyageur Aggressive Growth Fund and Voyageur International Equity
Fund). These financial statements and the financial highlights are the
responsibility of Fund management. Our responsibility is to express an opinion
on these financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements and the financial
highlights. Investment securities held in custody are confirmed to us by the
custodian. As to securities purchased and sold but not received or delivered, we
request confirmations from brokers, and where replies are not received, we carry
out other appropriate auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Voyageur Aggressive Growth
Fund, Voyageur Growth Stock Fund and Voyageur International Equity Fund, at
April 30, 1995 and the results of their operations, changes in their net assets
and the financial highlights for the periods stated in the first paragraph
above, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
June 2, 1995
THE VOYAGEUR FUNDS
STATEMENTS OF ASSETS AND LIABILITIES APRIL 30, 1995
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<CAPTION>
VOYAGEUR VOYAGEUR VOYAGEUR
AGGRESSIVE GROWTH INTERNATIONAL
ASSETS GROWTH FUND STOCK FUND EQUITY FUND
<S> <C> <C> <C>
Investments in securities, at market value (note 1) (identified
costs: $1,783,487, $20,044,410 and $1,685,485, respectively)... $2,047,641 $23,043,352 $1,686,075
Cash in bank on demand deposit (including foreign currency of
$13,836 for the International Equity Fund)..................... 277,308 640,512 288,763
Dividends and interest receivable................................. 713 32,818 4,667
Receivable for investment securities sold......................... -- -- 89,346
Receivable for Fund shares sold................................... -- 29,059 --
Organizational costs (note 1)..................................... 17,127 -- 25,193
Total assets................................................... 2,342,789 23,745,741 2,094,044
LIABILITIES
Payable for investment securities purchased....................... -- -- 43,680
Payable for Fund shares redeemed.................................. -- 53,373 --
Accrued expenses.................................................. 25,769 40,964 21,414
Total liabilities.............................................. 25,769 94,337 65,094
NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL STOCK................ $2,317,020 $23,651,404 $2,028,950
Represented by:
Capital Stock - $.01 par value (note 1)....................... $ 2,228 $ 11,881 $ 2,154
Additional paid-in capital..................................... 2,170,996 20,661,055 2,082,558
Undistributed net investment income............................ 2,815 37,219 4,141
Accumulated net realized loss on investments and foreign
currency transactions....................................... (123,173) (57,693) (60,774)
Unrealized appreciation on investments and translation of assets
and liabilities in foreign currencies....................... 264,154 2,998,942 871
TOTAL NET ASSETS............................................ $2,317,020 $23,651,404 $2,028,950
Net assets applicable to outstanding Class A shares............... $2,189,491 $23,651,404 $2,008,747
Net assets applicable to outstanding Class C shares............... $ 127,529 N/A $ 20,203
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE
Class A - Shares of capital stock outstanding: 210,454, 1,188,057
and 213,245, respectively (note 4).......................... $10.40 $19.91 $9.42
Class C - Shares of capital stock outstanding: 12,341, N/A and
2,159, respectively (note 4)............................... $10.33 N/A $9.36
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF OPERATIONS PERIOD ENDED APRIL 30, 1995
VOYAGEUR VOYAGEUR VOYAGEUR
AGGRESSIVE GROWTH INTERNATIONAL
GROWTH FUND* STOCK FUND EQUITY FUND*
<S> <C> <C> <C>
Investment income:
Dividends (net of foreign taxes withheld of $3,351 for the
International Equity Fund)................................ $ 8,614 $ 600,690 $ 23,109
Interest . . . .............................................. -- 51,997 --
Total investment income................................... 8,614 652,687 23,109
Expenses (note 2):
Investment advisory and management fee..................... 16,102 123,185 15,991
Dividend disbursing, administrative and accounting services fees 21,447 74,127 41,580
Distribution fee - Class A................................. 3,885 246,598 3,979
Distribution fee - Class C................................. 562 N/A 83
Printing, postage and supplies............................. 2,101 1,707 3,233
Legal fees ................................................ 2,051 4,378 1,938
Custodian fees............................................. 7,126 11,952 11,397
Compensation of directors.................................. 642 2,129 1,067
Audit and accounting fees.................................. 6,188 11,779 11,312
Registration fees.......................................... 6,550 13,452 4,700
Amortization of organizational costs....................... 763 -- 1,122
Other expenses............................................. 1,182 665 644
Total expenses.......................................... 68,599 489,972 97,046
Less (note 2):
Expenses waived or absorbed................................ (40,000) (2,621) (65,000)
Expense reductions......................................... -- (19,775) --
Total net expenses...................................... 28,599 467,576 32,046
Investment income (loss) - net.......................... (19,985) 185,111 (8,937)
Realized and unrealized gain (loss) on investments and foreign
currency - net:
Net realized gain (loss) from:
Investments ............................................ (123,173) 451,561 (60,774)
Foreign currency transactions........................... -- -- (341)
Net increase in unrealized appreciation on:
Investments............................................. 264,154 3,009,595 590
Translation of other assets and liabilities in foreign currencies -- -- 281
Net gain (loss) on investments and foreign currency........ 140,981 3,461,156 (60,244)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS. $120,996 $3,646,267 $(69,181)
</TABLE>
*Period from May 16, 1994 (commencement of operations) to April 30, 1995.
See accompanying notes to financial statements.
THE VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
VOYAGEUR AGGRESSIVE VOYAGEUR GROWTH STOCK FUND
GROWTH FUND
PERIOD FROM MAY 16, YEAR ENDED YEAR ENDED
1994* TO APRIL 30, APRIL 30,
APRIL 30, 1995 1995 1994
<S> <C> <C> <C>
Operations:
Investment income (loss) - net..................... $ (19,985) $ 185,111 $ 123,620
Realized gain (loss) on investments - net.......... (123,173) 451,561 (19,075)
Net change in unrealized appreciation or depreciation
of investments................................... 264,154 3,009,595 (142,837)
Net increase (decrease) in net assets resulting
from operations.................................. 120,996 3,646,267 (38,292)
Distributions to shareholders from:
Investment income - net............................ -- (160,212) (111,300)
Net realized gain on investments................... -- (475,478) (273,621)
Total distributions.............................. -- (635,690) (384,921)
Capital share transactions (note 4): Proceeds from sale
of shares (note 2):
Class A.......................................... 3,249,711 3,412,884 11,111,093
Class C.......................................... 124,305 N/A N/A
Net asset value of shares issued in reinvestment of
net investment income and net realized gain
distributions:
Class A.......................................... -- 607,335 373,726
Class C.......................................... -- N/A N/A
Payments for redemption of shares:
Class A.......................................... (1,176,908) (11,897,870) (9,327,002)
Class C.......................................... (1,084) N/A N/A
Increase (decrease) in net assets
from capital share transactions.................. 2,196,024 (7,877,651) 2,157,817
Total increase (decrease) in net assets.......... 2,317,020 (4,867,074) 1,734,604
Net assets at beginning of period..................... -- 28,518,478 26,783,874
Net assets at end of period (including undistributed net
investment income of $2,815, $37,219 and
$12,320, respectively)........................... $2,317,020 $23,651,404 $28,518,478
</TABLE>
* Commencement of operations
See accompanying notes to financial statements.
THE VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
VOYAGEUR
INTERNATIONAL EQUITY FUND
PERIOD FROM
MAY 16, 1994* TO
APRIL 30, 1995
<S> <C>
Operations:
Investment loss - net.......................................... $ (8,937)
Net realized loss on investments and foreign currency..........
transactions................................................. (61,115)
Net change in unrealized appreciation on investments and
translation of other assets and liabilities in foreign currencies 871
Net decrease in net assets
resulting from operations.................................... (69,181)
Capital share transactions (note 4): Proceeds from sale of shares (note 2):
Class A...................................................... 3,189,630
Class C...................................................... 20,034
Payments for redemption of shares:
Class A...................................................... (1,111,533)
Class C...................................................... --
Increase in net assets from capital share transactions......... 2,098,131
Total increase in net assets................................... 2,028,950
Net assets at beginning of period................................. --
Net assets at end of period (including undistributed net
investment income of $4,141)................................... $2,028,950
</TABLE>
*Commencement of operations
See accompanying notes to financial statements.
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Voyageur Aggressive Growth Fund (Aggressive Growth Fund), Voyageur Growth
Stock Fund (Growth Stock Fund) and Voyageur International Equity Fund
(International Equity Fund), funds within Voyageur Mutual Funds III, Inc., are
registered under the Investment Company Act of 1940 (as amended) as diversified
open-end management investment companies. The Aggressive Growth Fund and
International Equity Fund offer Class A and Class C Shares. Class A Shares are
sold with a front-end sales charge. Class C Shares may be subject to a
contingent deferred sales charge and have no conversion feature. Each class of
shares has identical voting, dividend, liquidation and other rights and the same
terms and conditions, except that the level of distribution fees charged differs
between classes. Income, expenses (other than expenses incurred under each
class' Distribution Agreement) and realized and unrealized gains or losses on
investments and foreign currency transactions are allocated to each class of
shares based upon its relative net assets. Pursuant to its articles of
incorporation, Voyageur Mutual Funds III, Inc. has 10 trillion shares of
authorized capital stock that may be issued.
The significant accounting policies followed by the Funds are summarized as
follows:
Investments in Securities
Investments in securities traded on national or international securities
exchanges are valued at the last sales price on that exchange; securities traded
in the over-the-counter market and listed securities for which no sale was
reported on the valuation date are valued on the basis of the last current bid
price. Bonds and all other securities are valued at fair value using methods
determined in good faith by the Board of Directors. Such fair values are
determined using pricing services or prices quoted by independent brokers.
Investments in short-term securities with maturities of more than 60 days from
the valuation date are valued at the last bid price or at fair value as
determined by a pricing service approved by the Board of Directors. Short-term
securities with maturities of less than 60 days are valued at amortized cost.
Security transactions are accounted for on trade date. Realized gains and
losses are calculated on the identified cost basis. Dividend income is
recognized on the ex-dividend date or upon receipt of ex-dividend notification
in the case of foreign securities and interest income, including level-yield
amortization of premium and discount, is accrued daily.
Foreign Currency Translations and Forward Foreign Currency Contracts
The market value of securities and other assets and liabilities denominated
in foreign currencies is translated daily into U.S. dollars at the closing rate
of exchange. Purchases and sales of securities, and the related income and
expenses are translated at the exchange rate on the transaction date. Exchange
gains (losses) may also be realized between the trade and settlement dates on
security and forward contract transactions.
The International Equity Fund does not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on investments from
the fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
The International Equity Fund may enter into forward foreign currency
exchange contracts for operational purposes and to protect against adverse
exchange rate fluctuation. The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the International Equity Fund and
the resulting unrealized appreciation or depreciation would be determined using
foreign currency exchange rates from an independent pricing service. The
International Equity Fund would be subject to the credit risk that the other
party would not complete the obligations of the contract.
Federal Taxes
The Funds' policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders in amounts that will avoid or minimize federal
income or excise taxes for the Funds.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily because of the recognition of
certain foreign currency gains (losses) as ordinary income (loss) for tax
purposes and losses deferred for tax purposes due to "wash sale" transactions.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for
federal income tax purposes. Also, due to the timing of dividend distributions,
the fiscal year in which amounts are distributed may differ from the year that
the income or realized gains (losses) were recorded by the Fund.
On the statement of assets and liabilities, as a result of permanent
book-to-tax differences, reclassification adjustments have been made to increase
undistributed net investment income and decrease additional paid-in capital by
$22,800 for the Aggressive Growth Fund and to increase undistributed net
investment income by $13,078, decrease accumulated net realized loss on
investments by $341 and decrease additional paid-in capital by $13,419 for the
International Equity Fund.
For federal income tax purposes, the Aggressive Growth Fund, Growth Stock
Fund and International Equity Fund had capital loss carryovers of $123,173,
$57,693 and $60,774, respectively, at April 30, 1995, that will expire in 2003
through 2004 if not offset by subsequent capital gains. It is unlikely the Board
of Directors will authorize a distribution of any net realized capital gains
until the available capital loss carryovers have been offset or expire.
Distributions to Shareholders
Distributions to shareholders from net investment income, if any, are
declared and paid annually. Net realized capital gains, if any, are also
distributed annually. All distributions are payable in cash or reinvested in
additional shares of each Fund.
Organizational Costs
Organizational costs of the Aggressive Growth Fund and International Equity
Fund are being amortized over 60 months on an inverse acceleration (sum of the
years' digits) basis.
(2) EXPENSES AND SALES CHARGES
Each Fund has an investment advisory agreement with Voyageur Fund Managers,
Inc. (Voyageur). Under the investment advisory agreements, Voyageur executes
investment decisions for the Growth Stock Fund and provides all the Funds with
office facilities, equipment and personnel, and monitors the performance of
various organizations performing services for the Funds. The investment advisory
agreements provide for the payment on a monthly basis of a fee equal to an
annual rate of .50% of Growth Stock Fund's average daily net assets, and 1.0% of
Aggressive Growth Fund's and International Equity Fund's average daily net
assets. Investment decisions for the Aggressive Growth Fund were executed by
George D. Bjurman & Associates. Voyageur paid George D. Bjurman & Associates for
their services a fee equal to an annualized percentage of average daily net
assets at reducing rates from .75% to .40%. Investment decisions for the
International Equity Fund are executed by Murray Johnstone International, Ltd.
Voyageur pays Murray Johnstone International, Ltd. for their service a fee equal
to .50% of average daily net assets. The Funds paid no direct fees to the
sub-advisors. Effective May 1, 1995, the service of George D. Bjurman &
Associates was terminated for the Aggressive Growth Fund and Voyageur began
executing the investment decisions.
Each Fund will also pay a fee to Voyageur for acting as the Funds' transfer
agent, dividend-disbursing and accounting services agent. The fee for Aggressive
Growth Fund and Growth Stock Fund is equal to the sum of $1.25 per shareholder
account per month, a fixed monthly fee ranging from $1,000 to $1,500 based on
the level of the Fund's average daily net assets and an annualized percentage of
average daily net assets at reducing rates from .11% to .035%. The fee for
International Equity is equal to the sum of $1.33 per shareholder account per
month, a fixed monthly fee ranging from $3,000 to $5,000 based on the level of
the Fund's average daily net assets and an annualized percentage of average
daily net assets at reducing rates from .11% to .02%. Each Fund is also
responsible for reimbursing Voyageur's out-of-pocket expenses in connection with
the performance of transfer agency, dividend disbursing and accounting services.
In addition to the advisory fee and the transfer agency, dividend disbursing
and accounting services fees, each Fund is responsible for paying most other
operating expenses including outside directors' fees and expenses, custodian
fees, registration fees, printing and shareholder reports, legal and auditing
fees and other miscellaneous expenses.
Each Fund has a distribution agreement under Rule 12b-1 of the Investment
Company Act of 1940 with Voyageur Fund Distributors, Inc. (Fund Distributors).
Under these plans, each Fund pays Fund Distributors a monthly fee equal to an
annual rate of 1% of average daily net assets for Growth Stock Fund. The
distribution fee for Aggressive Growth Fund and International Equity Fund is
equal to .25% for Class A Shares and 1.00% for Class C Shares.
The laws of certain states in which each Fund's shares
may be offered for sale also require that each Fund be reimbursed to the extent
such Fund's total expenses exceed certain percentages of average daily net
assets. The most restrictive state limitation to which the funds are currently
subject provides that total expenses (excluding certain distribution plan
expenses) cannot exceed 2.5% of the first $30 million of average daily net
assets, 2.0% of the next $70 million, and 1.50% of the average daily net assets
in excess of $100 million. Also Voyageur has voluntarily agreed to pay all
expenses (excluding stock transfer fees, taxes, interest and brokerage
commissions) which exceed 1.75% of average daily Class A net assets and 2.50% of
average daily Class C net assets for Aggressive Growth Fund, 1.90% for Growth
Stock Fund and 2.00% of average daily Class A net assets and 2.75% of average
daily Class C net assets for International Equity Fund, on an annual basis.
During the periods ended April 30, 1995, Voyageur absorbed $20,030 for
Aggressive Growth Fund and $49,311 for International Equity Fund pursuant to the
most restrictive state limitation and voluntarily absorbed $19,970 for
Aggressive Growth Fund, $2,621 for Growth Stock Fund and $15,689 for
International Equity Fund. Growth Stock Fund earned $19,775 in credits on
uninvested cash balances held at the custodian which were used to reduce certain
fees for various custodial, pricing and accounting services provided by the
custodian bank.
Sales charges paid by shareholders during the periods ended April 30, 1995
were $8,965, $34,138, and $6,234 for Aggressive Growth Fund, Growth Stock Fund
and International Equity Fund, respectively. Of these amounts, Fund Distributors
received $1,297, $5,137, and $979, respectively.
(3) INVESTMENT SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (other
than short-term securities) aggregated $3,155,196 and $1,248,536 for Aggressive
Growth Fund, $5,013,103 and $12,737,509 for Growth Stock Fund and $2,990,563 and
$1,244,304 for International Equity Fund during the periods ended April 30,
1995.
(4) CAPITAL STOCK
Transactions in shares of capital stock during the periods ended April 30,
1995 and the year ended April 30, 1994 were as follows:
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH FUND GROWTH STOCK FUND
CLASS A CLASS C
PERIOD FROM PERIOD FROM YEAR YEAR
MAY 16, 1994* MAY 20, 1994* ENDED ENDED
TO APRIL 30, TO APRIL 30, APRIL 30, APRIL 30,
1995 1995 1995 1994
<S> <C> <C> <C> <C>
Shares sold.................................... 335,020 12,449 187,945 621,079
Shares issued for reinvested distributions..... -- -- 34,332 20,478
Shares redeemed................................ (124,566) (108) (662,562) (516,982)
Increase (decrease) in shares outstanding...... 210,454 12,341 (440,285) 124,575
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
CLASS A CLASS C
PERIOD FROM PERIOD FROM
MAY 16, 1994* MAY 20, 1994*
TO APRIL 30, TO APRIL 30,
1995 1995
<S> <C> <C>
Shares sold.................................... 327,714 2,159
Shares redeemed................................ (114,469) --
Increase in shares outstanding................. 213,245 2,159
</TABLE>
*Commencement of operations
(5) FINANCIAL HIGHLIGHTS
Per share data (rounded to the nearest cent) for a share of capital stock
outstanding and selected information for each period are as follows:
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH FUND
CLASS A CLASS C
PERIOD FROM PERIOD FROM
MAY 16, 1994* TO MAY 20, 1994* TO
APRIL 30, APRIL 30,
1995 1995
<S> <C> <C>
Net asset value:
Beginning of period............................... $10.00 $10.00
Operations:
Net investment loss............................... (.09) (.16)
Net realized and unrealized
gain on investments............................. .49 .49
Total from operations........................... .40 .33
Net asset value:
End of period..................................... $10.40 $10.33
Total investment return (c).......................... 4.00% 3.30%
Net assets at end of
period (000's omitted)............................ $2,189 $128
Ratios:
Expenses to average net assets ................... 1.74%(a) 2.40%(a)
Net investment loss to average net assets......... (1.21)%(a) (1.80)%(a)
Assuming no voluntary waivers and
reimbursements, up to the most restrictive
state limitation in effect:..................
Expenses.................................. 2.97%(a) 3.50%(a)
Net investment loss....................... (2.44)%(a) (2.90)%(a)
Portfolio turnover rate (excluding
short-term securities).......................... 88.3% 88.3%
</TABLE>
Per share amounts are presented based upon average fund shares outstanding.
* Commencement of operations
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
GROWTH STOCK FUND
YEAR ENDED APRIL 30,
1995 1994 1993 1992 1991(B)
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of year.............................. $17.51 $17.81 $23.81 $19.36 $18.85
Operations:
Net investment income (loss)................... .15 .07 .05 (.18) (.11)
Net realized and unrealized
gain (loss) on investments.................. 2.77 (.16) .22 4.81 3.40
Total from operations............................ 2.92 (.09) .27 4.63 3.29
Distributions to shareholders:
From net investment income..................... (.13) (.06) -- -- --
From net realized gains........................ (.39) (.15) (6.27) (.18) (2.78)
Total distributions......................... (.52) (.21) (6.27) (.18) (2.78)
Net asset value:
End of year.................................... $19.91 $17.51 $17.81 $23.81 $19.36
Total investment return (c)...................... 17.04% (.52)% 1.51% 23.86% 20.51%
Net assets at end of
year (000's omitted)........................... $23,651 $28,518 $26,784 $19,351 $11,400
Ratios:
Expenses to average net assets................. 1.90% 1.90% 1.90% 2.25% 2.36%
Net investment income (loss) to average net assets .75% .40% .26% (.76)% (.67)%
Assuming no voluntary waivers, reimbursements
and expense reductions:
Expenses.............................. 1.99% 2.13% 2.70% 2.86% 2.86%
Net investment income (loss).......... .66% .17% (.54)% (1.37)% (1.17)%
Portfolio turnover rate
(excluding short-term securities)........... 21.8% 34.2% 16.5% 142.6% 128.2%
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
CLASS A CLASS C
PERIOD FROM PERIOD FROM
MAY 16, 1994* MAY 20, 1994*
TO APRIL 30, TO APRIL 30,
1995 1995
<S> <C> <C>
Net asset value:
Beginning of period............................... $10.00 $9.99
Operations:
Net investment loss............................... (.05) (.11)
Net realized and unrealized loss on
investments and translation of assets
and liabilities in foreign currencies.......... (.53) (.52)
Total from operations......................... (.58) (.63)
Net asset value:
End of period..................................... $9.42 $9.36
Total investment return (c).......................... (5.80)% (6.31)%
Net assets at end of
period (000's omitted)............................ $2,009 $20
Ratios:
Expenses to average net assets.................... 1.99%(a) 2.74%(a)
Net investment loss to average net assets......... (.55)%(a) (1.36)%(a)
Assuming no voluntary waivers and
reimbursements, up to the most restrictive
state limitation in effect:
Expenses ................................. 2.97%(a) 3.50%(a)
Net investment loss....................... (1.53)%(a) (2.12)%(a)
Portfolio turnover rate (excluding
short-term securities).......................... 92.1% 92.1%
</TABLE>
Per share amounts are presented based upon average fund shares outstanding.
* Commencement of operations
See accompanying notes to Financial Highlights.
Notes to Financial Highlights
(a) Adjusted to an annual basis.
(b) Effective September 1, 1990, Voyageur replaced Investment Advisers, Inc. as
the investment adviser and Wilke/Thompson Capital Management began acting as
the Growth Stock Fund's sub-investment adviser until January 1, 1992 when
Voyageur became the sole investment adviser to the Fund.
(c) 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.
VOYAGEUR AGGRESSIVE GROWTH FUND
INVESTMENTS IN SECURITIES APRIL 30, 1995
MARKET
ISSUER NUMBER OF SHARES VALUE(A)
(Percentages of each investment category relate to total net assets)
COMMON STOCKS (88.4%):
AUTOMOTIVE (.8%):
Breed Technologies 900 $ 18,113
BANKING (3.4%):
Baybanks 800 50,000
Wells Fargo & Company 175 29,028
79,028
BASIC INDUSTRIES (2.4%):
Dow Chemical 800 55,600
CAPITAL GOODS - TECHNOLOGY (2.0%):
International Business Machines 500 47,375
CONSUMER GROWTH (1.7%):
Humana 2,000 39,000
CONSUMER DEFENSIVE (2.1%):
Safeway 1,300(c) 48,750
COMPUTERS/OFFICE EQUIPMENT (14.5%):
Cabletron Systems 1,050(c) 49,875
Cisco Systems 1,400(c) 55,825
EMC 4,000(c) 79,000
Oracle Systems 1,500(c) 45,750
Silicon Graphics 1,600(c) 60,000
3COM 800(c) 44,800
335,250
DRUG/HOSPITAL SUPPLIES (5.5%):
Health Management Associates 1,500(c) $ 43,500
Mylan Laboratories 2,000 61,500
United Healthcare 600 21,750
126,750
ELECTRONICS (18.6%):
General Instrument 1,000(c) 34,125
Lam Research 1,400(c) 70,700
Micron Technology 1,000 82,250
Oak Industries 1,600(c) 46,800
Philips Electronics 1,800 69,300
Tellabs 600(c) 41,400
Tencor Instruments 1,000(c) 67,750
Wall Data 1,000(c) 19,250
431,575
ENTERTAINMENT/LEISURE (2.6%):
Callaway Golf 2,600 32,175
Cobra Golf 1,300(c) 28,275
60,450
MACHINERY (6.0%):
Agco 2,200 78,375
Novellus Systems 1,000(c) 60,750
139,125
MISCELLANEOUS INDUSTRIALS (1.2%):
Airgas 1,200(c) 26,850
RETAILING (2.4%):
Eckerd 1,900(c) 55,338
SERVICES (10.8%):
First USA 1,300 $ 55,250
Foothill Group 1,500 32,625
Mid Atlantic Medical Services 2,400(c) 41,400
Paychex 500 23,812
Reynolds & Reynolds 1,100 29,150
Robert Half International 2,000(c) 52,750
U.S. Healthcare 600 16,050
251,037
SHIPPING/FREIGHT (4.3%):
Landstar System 1,500(c) 43,500
Wisconsin Central Transport 1,000(c) 57,062
100,562
TELECOMMUNICATIONS (7.4%):
ALC Communications 1,100(c) 41,938
Cidco 1,000(c) 36,000
Lin Broadcasting 300(c) 37,425
U.S. Robotics 700(c) 55,475
170,938
TEXTILES AND SHOES (2.7%):
Chesapeake 2,000 62,000
TOTAL INVESTMENTS IN SECURITIES (cost: $1,783,487) (b) $2,047,641
See accompanying notes to investments in securities on page 32.
<PAGE>
VOYAGEUR GROWTH STOCK FUND
INVESTMENTS IN SECURITIES APRIL 30, 1995
MARKET
ISSUER NUMBER OF SHARES VALUE(A)
(Percentages of each investment category relate to total net assets)
COMMON STOCKS (94.1%):
BASIC INDUSTRIES (6.8%):
Bemis 29,000 $ 804,750
Sigma-Aldrich 18,000 796,500
1,601,250
BUILDING - CREDIT CYCLICALS (3.3%):
Gannett 15,000 789,375
CAPITAL GOODS - INDUSTRIAL (9.9%):
General Electric 15,000 840,000
Grainger (W.W.) 12,000 726,000
Pitney - Bowes 21,000 779,625
2,345,625
CAPITAL GOODS - TECHNOLOGY (12.3%):
Automatic Data Processing 12,000 771,000
Circuit City 30,000 776,250
Hewlett-Packard 12,000 793,500
Motorola 10,000 568,750
2,909,500
CONSUMER DEFENSIVE STAPLES (15.6%):
Anheuser Busch 13,000 755,625
H. J. Heinz 20,000 840,000
Kellog 7,000 444,500
Philip Morris 12,000 813,000
Sara Lee 30,000 836,250
3,689,375
CONSUMER DURABLES (7.9%):
Bandag 12,000 $ 712,500
Genuine Parts 20,000 775,000
Rubbermaid 13,000 383,500
1,871,000
CONSUMER NON-DURABLES (1.3%):
Dillard Department Stores 12,000 310,500
CONSUMER GROWTH STAPLES (23.7%):
Abbott Laboratories 22,000 866,250
American Home Products 11,000 848,375
McDonalds 22,000 770,000
Merck 18,000 771,750
Pepsico 20,000 832,500
Schering-Plough 10,000 753,750
Walgreen 16,000 752,000
5,594,625
ENERGY (7.0%):
Royal Dutch Petroleum 7,000 868,000
Shell Transport & Trading 11,000 783,750
1,651,750
FINANCIAL SERVICES (6.3%):
Suntrust Banks 14,000 759,500
Torchmark 19,000 741,000
1,500,500
TOTAL INVESTMENTS IN COMMON STOCK (cost: $19,264,558) 22,263,500
MARKET
ISSUER PRINCIPAL AMOUNT VALUE(A)
SHORT-TERM SECURITIES (3.3%)
U.S. Treasury Bill, 5.775% due
10/05/95 (cost: $779,852) $800,000 $ 779,852
TOTAL INVESTMENTS IN SECURITIES (cost: $20,044,410) (b) $23,043,352
See accompanying notes to investments in securities on page 32.
VOYAGEUR INTERNATIONAL EQUITY FUND
INVESTMENTS IN SECURITIES APRIL 30, 1995
MARKET
ISSUER NUMBER OF SHARES VALUE(A)
(Percentages of each investment category relate to total net assets)
COMMON STOCKS (83.1%):
ARGENTINA (1.3%):
YPF Sociedad Anonima ADR (energy) 1,300 $ 26,325
AUSTRALIA (1.6%):
CSR (building materials) 10,000 32,022
BELGIUM (2.3%):
Electrabel Com NPV (utilities) 215 46,321
DENMARK (2.0%):
Tele Danmark A/S Ser B (telecommunications) 760 39,765
FRANCE (5.7%):
Alcatel Alsthom CIE (telecommunications) 420 39,023
Cap Gemini Sogeti (computer services) 935(c) 34,292
Legris Industries S.A. (machinery) 570(c) 43,204
116,519
GERMANY (2.9%):
Munich Re Registered (insurance) 21 42,161
RWE Aktien Gesellschaft (utilities) 50 16,893
59,054
GREAT BRITAIN (15.8%):
Boots Company (retail) 5,000 41,037
BOC Group PLC (chemicals) 3,000 36,475
BTR PLC (diversified industrial) 8,000 42,357
Cable and Wireless PLC (telecommunications) 5,000 32,307
General Electric Company (electronics) 6,500 31,904
Grand Metropolitan PLC (wines and spirits) 4,000 25,717
Guinness PLC (wine and spirits) 4,000 30,223
Rank Organization PLC (leisure) 4,800 32,752
Smiths Industries (aerospace/defense) 4,000 31,220
Williams Holdings PLC (diversified industrials) 3,000 16,077
320,069
HONG KONG (6.6%):
Hutchison Whampoa (conglomerate) 10,000 43,418
Sun Hung Kai Properties (property) 7,000 44,684
Swire Pacific "A" (conglomerate) 7,000 46,810
134,912
IRELAND (1.8%):
Ireland Allied Irish Bank (banking) 7,900 36,742
ITALY (1.2%):
Telecom Italia (telecommunications) 8,900 23,690
JAPAN (17.2%):
Canon Incorporated (precision) 2,000 33,088
Hoya Corporation (precision) 1,000 28,804
Itochu Corporation
(wholesale and international trade) 5,000 33,922
Mitsubishi Trust and Banking (banking) 3,000 51,775
Nippon Telephone and Telegraph
(telecommunications) 4 35,374
NKK Corporation (steel) 15,000(c) 41,956
Nomura Securities Company Limited
(securities houses) 2,000 40,468
Omron Corporation (electronics) 2,000 39,278
Sanwa Bank (banking) 2,000 43,324
347,989
MEXICO (1.7%):
Grupo Mexicano De Desarrollo Spons ADR "L"
(construction) 1,500(c) 7,687
ICA Empresas ADR (construction) 1,800 15,300
Telefonos De Mexico ADR (utilities) 350 10,587
33,574
NETHERLANDS (7.7%):
Elsevier (media) 5,000 $ 54,865
Gamma Holding N.V. (textiles) 370 20,061
Hunter Douglas N.V. (building materials) 925 39,704
Unilever N.V. (food manufacturers) 315 42,231
156,861
NEW ZEALAND (1.2%):
Telecom Corporation of New Zealand
(telecommunications) 6,000 25,243
NORWAY (1.9%):
Hafslund Nycomed As "B" (healthcare) 1,790 38,983
SINGAPORE (2.8%):
Keppel Corporation (conglomerate) 3,000 24,328
Singapore Land (property) 5,000 32,294
56,622
SPAIN (4.2%):
Banco Credito (banking) 222(c) 1,567
Banco Santander (banking) 666 24,320
Fomento De Construc Y Contra - FCC (construction) 258 23,684
Portland Valderrivas (building materials) 350 25,590
Vallehermoso SA (real estate) 640 11,022
86,183
SWEDEN (2.1%):
AGA AB Series B (chemicals) 3,580 41,631
SWITZERLAND (3.1%)
Landis and GYR (engineering) 46 26,787
Roche Holding AG (pharmaceutical) 3 18,087
Winterthur Reg (insurance) 33 18,696
63,570
TOTAL INVESTMENTS IN SECURITIES (cost: $1,685,485)(b) $1,686,075
See accompanying notes to investments in securities on page 32.
VOYAGEUR AGGRESSIVE GROWTH FUND
VOYAGEUR GROWTH STOCK FUND
VOYAGEUR INTERNATIONAL EQUITY FUND
NOTES TO INVESTMENTS IN SECURITIES
(a) Securities are valued by procedures described in note 1 to the financial
statements.
(b) Also represents the cost of securities for federal income tax purposes. The
aggregate gross unrealized appreciation and depreciation on investments
based on these costs were:
Gross Gross Net
Unrealized Unrealized Unrealized
Appreciation Depreciation Appreciation
Aggressive Growth Fund $ 375,082 $ (110,928) $ 264,154
Growth Stock Fund 3,388,942 (390,000) 2,998,942
International Equity Fund 91,763 (91,173) 590
(c) Presently non-income producing security.
THE VOYAGEUR FUNDS
FEDERAL INCOME TAX INFORMATION
Information for federal income tax purposes is presented as an aid to
shareholders in reporting the dividend distributions for the period ended April
30, 1995. Each shareholder should consult a tax adviser about reporting this
income for state and local purposes. In January 1995, the Growth Stock Fund
separately provided each shareholder with tax information for calendar year
1994.
<TABLE>
<CAPTION>
YEAR
ENDED PAYABLE
VOYAGEUR GROWTH STOCK FUND APRIL 30, 1995 DATE
<S> <C> <C> <C>
Net investment income distributions.............. $.1301 December 30, 1994
Short-term capital gain distributions............ .0453 December 30, 1994
Long-term capital gain distributions............. .3409 December 30, 1994
Total distribution............................ $.5163
</TABLE>
The short-term capital gain distributions above are taxable as ordinary income
to shareholders for federal and state income tax purposes.
For federal income tax purposes, 100% of the above ordinary income distribution
to corporate shareholders is eligible for the corporate dividend received
deduction.
For the current reporting period, no distributions were made for Voyageur
Aggressive Growth Fund and Voyageur International Equity Fund.
INVESTMENT ADVISER, TRANSFER AGENT,
DIVIDEND DISBURSING AGENT AND
ACCOUNTING SERVICES AGENT
Voyageur Fund Managers, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
UNDERWRITER
Voyageur Fund Distributors, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
CUSTODIAN
Norwest Bank Minnesota, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
GENERAL COUNSEL
Dorsey & Whitney P.L.L.P.
Minneapolis, Minnesota 55402
AUDITORS
KPMG Peat Marwick LLP
Minneapolis, Minnesota 55402
VOYAGEUR [LOGO]
AGGRESSIVE GROWTH FUND
GROWTH STOCK FUND
INTERNATIONAL EQUITY FUND
ANNUAL REPORT
Dated April 30, 1995
INVESTMENT ADVISER, TRANSFER AGENT,
DIVIDEND DISBURSING AGENT AND
ACCOUNTING SERVICES AGENT
Voyageur Fund Managers, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
UNDERWRITER
Voyageur Fund Distributors, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
CUSTODIAN
Norwest Bank Minnesota, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
GENERAL COUNSEL
Dorsey & Whitney P.L.L.P.
Minneapolis, Minnesota 55402
AUDITORS
KPMG Peat Marwick LLP
Minneapolis, Minnesota 55402
BULK RATE
U.S. Postage
PAID
Minneapolis, MN.
Permit #3322
VOYAGEUR [LOGO]
90 SOUTH SEVENTH STREET, SUITE 4400
MINNEAPOLIS, MINNESOTA 55402.4115
