AGGRESSIVE GROWTH FUND
GROWTH AND INCOME FUND
GROWTH STOCK FUND
INTERNATIONAL EQUITY FUND
S E M I - A N N U A L R E P O R T
Dated October 31, 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 MINNESOTA Tax Free Fund
Voyageur CALIFORNIA Tax Free Fund Voyageur NATIONAL 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 KANSAS 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.
<TABLE>
<CAPTION>
<S> <C>
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
</TABLE>
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.
<TABLE>
<CAPTION>
<S> <C>
Voyageur FLORIDA Limited Term Tax Free Fund Voyageur NATIONAL Limited Term Tax Free Fund
Voyageur MINNESOTA Limited Term Tax Free Fund
</TABLE>
VOYAGEUR EQUITY FUNDS seek long term capital appreciation by investing in common
stocks.
Voyageur AGGRESSIVE GROWTH Fund Voyageur GROWTH STOCK Fund
Voyageur GROWTH AND INCOME Fund Voyageur INTERNATIONAL EQUITY 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.
<TABLE>
<CAPTION>
<S> <C>
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
</TABLE>
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 Shareholders:
Throughout this reporting period, the stock market generated considerable
excitement. Investors and other Wall Street watchers witnessed the Dow rise
fairly steadily and gain over 450 points in six months' time. Record highs were
set time and time again. (The 5000 mark was reached in early November, shortly
after the close of this reporting period.) The S&P 500 and the NASDAQ Composite
indices also set new records in early September. In short, many corporations did
well, and investors reacted enthusiastically.
Your Voyageur Equity Funds shared in the market's excitement and continue to do
so in a disciplined and prudent way. Voyageur adheres to an investment strategy
that calls for growth at a reasonable price. What this means is that our
portfolio managers emphasize holdings in quality securities, broad
diversification within market sectors, and a long-term investment outlook.
Performance information for all share classes of all the Voyageur Equity Funds
is shown later in this report. In the pages that follow, the Funds' portfolio
managers discuss the factors that have affected the Funds' performance during
this reporting period.
We encourage you to maintain a long-range view of investing. We believe that you
will derive the greatest benefit by doing so.
Sincerely,
John G. Taft
President
Voyageur Aggressive Growth Fund
Voyageur Growth and Income Fund
Voyageur Growth Stock Fund
Voyageur International Equity Fund
VOYAGEUR AGGRESSIVE GROWTH FUND
During this reporting period (May 1 - October 31), the stock market has enjoyed
ideal conditions. There were no price pressures and no inflation pressures. The
Federal Reserve (the Fed) maintained a fairly tight grip on monitoring money
supply. As a result, the risk of inflation has subsided and and we believe the
economy achieved what has been coined as a soft landing due to the Fed's
vigilance.
Since the last report to shareholders (April 30, 1995), I have assumed the
management of this Fund. In keeping with the Fund's objective (i.e., long-term
capital appreciation, which the Fund attempts to achieve by investing primarily
in equity securities of the companies which Voyageur believes to have the
potential for high earnings growth), I have increased exposure to two
fast-growing areas: technology and health care. The increased exposure to stocks
in these sectors allows us to make the Fund more aggressive than before.
Although heavily weighted in the technology and health care sectors, the
necessity for diversification in the portfolio was not overlooked. We have
maintained a healthy diversification among sectors, and will continue to do so.
In this reporting period, I increased the technology exposure from 20% of the
portfolio to approximately 35%. However, I also created a hedge against the
volatility that was created by the large exposure to technology by increasing
the health care exposure. The overweightings of technology (35%) and health care
(25%) worked in our favor, and the portfolio performed very well. In addition to
delivering on its objective, the Voyageur Aggressive Growth Fund outperformed
its benchmark index, the S&P 500*, by 3.03 percentage points for the six month
period covered in this report. The Voyageur Aggressive Growth Fund's total
return (based on net asset value) for the six months included in this reporting
period was 17.50%; the year-to-date total return (as of October 31, 1995) was
23.43%.**
The concentrated holding in technology is reflective of a sizeable number of
large, well-known companies with large capitalization. One such company included
in the portfolio is Intel, a $50 billion capitalization company. Our technology
focus was not obtained through stuffing the portfolio with initial public
offerings (IPOs). In fact, I have not bought a single IPO for this portfolio.
I anticipate that the Fund will grow over time. As new assets come into the
Fund, I may look to reposition the Fund as required by the market. There may be
a time in the future when the technology exposure is reduced and perhaps focus
turns to another sector, such as health care or consumer non-durables. A
reduction in technology does not necessarily mean selling our technology stocks,
but instead expanding another sector by using new money as it comes into the
Fund. I also anticipate that the stock market is due for very healthy growth for
the next few years, which bodes well for the Fund and investors.
Tony H. Elavia is the Senior Equity Portfolio Manager for the Voyageur
Aggressive Growth Fund. Mr. Elavia has managed the Fund since May 1995, and has
over 13 years of investment industry experience.
*The Standard and Poor's 500 (S&P 500) is a broadly based unmanaged index of 500
widely held common stocks.
**Past performance is no guarantee of future results.
VOYAGEUR GROWTH AND INCOME FUND
The Voyageur Growth and Income Fund, which commenced in September of this year,
is the newest of Voyageur's equity funds. The Fund's dual objectives of growth
and income seek to provide shareholders with growth of capital as well as
current income. Let me briefly describe how we structured the portfolio and
discuss the strategy exercised in managing the portfolio.
The portfolio is primarily composed of securities issued by well-established
companies. Under normal market conditions, we use an investment strategy that
concentrates fund holdings in companies having market capitalization in excess
of $1 billion. Companies with larger capitalizations tend to have stronger
management and often are more diversified. They also have broader resources and
product lines so they tend to be less volatile. At the end of the reporting
period (October 31, 1995), the portfolio included such companies as Harley
Davidson, Littelfuse, Viacom, and Mattel--all are examples of successful,
established companies. At the end of the reporting period, the Fund had
approximately 30 equity holdings diversified across eight market sectors (e.g.,
capital goods, energy, health care, technology, etc.).
Approximately 25% of the Fund's assets are invested in U.S. Treasury securities.
This diversification helped to provide a hedge against the volatility inherent
in equity holdings and increased the portfolio's current income.
We continue to monitor opportunities in the market and remain focused on larger
cap companies with reputations for quality management and broad resources.
Ralph M. Segall is the Portfolio Manager for Voyageur Growth and Income Fund.
Segall, Bryant & Hamill Investment Counsel is sub-adviser to the Voyageur Growth
and Income Fund.
VOYAGEUR GROWTH STOCK FUND
Propelled by rapidly rising corporate profits and a declining interest rate
environment, stocks have continued the rally which began in November of 1994.
During this reporting period, over 50% of public companies surpassed their
forecasted profit levels while only about 25% failed to meet expectations.
This bull market has been dominated by so-called momentum investing which
encompassed purchasing stocks with the belief that their rate of profit growth
would accelerate and earnings estimates would continue to move higher. In this
environment, companies which failed to meet their optimistic forecasts
experienced significant stock price declines. With the economy showing signs of
tempering to a more typical rate of growth, and with signs of weakness in
several major overseas economies, investors now appear to be seeking the safety
of companies with more steady and predictable rates of profit growth.
The strategy of the Voyageur Growth Stock Fund is to invest in the highest
quality companies. The term quality reflects on the superior earnings growth and
consistency historically exhibited by these companies. The portfolio consists of
approximately 30 stocks from a universe of 250 stocks ranked A+ or A for quality
by Standard and Poor's Rating Service.* We keep the number of securities in the
portfolio to approximately 30 for two reasons. First, this number allows each
holding to make a significant impact on portfolio performance; second, limiting
the number permits us to closely monitor circumstances at each company we own.
Another facet of our strategy is that we invest to participate in long-term
earnings and dividend growth of the companies we purchase. We evaluate
investment alternatives over a three to five-year investment horizon rather than
"trading" in and out of positions.
We firmly believe that adherence to quality investing will be rewarded over the
long term, and the Fund's performance has evidenced this point. The Voyageur
Growth Stock Fund's total return (based on net asset value) for the six months
reflected in this report was 12.20%; the year-to-date total return (as of
October 31) was 26.29%.**
High quality companies tend to generate steady, predictable earnings growth,
regardless of how fast the economy grows or slows. In general, investors tend to
seek consistent earnings streams during periods of economic uncertainty. We
believe high-quality companies provide the best returns for investors with a
long-term horizon.
James C. King is the Senior Equity Portfolio Manager for the Voyageur Growth
Stock Fund. Mr. King has managed the Fund since January 1992, and has nearly 30
years of investment industry experience.
*Standard and Poor's (S&P's) quality ratings are based on each stock's 10-year
track record of earnings, dividend growth, and stability. (Note: Standard and
Poor's rates approximately 7000 common stocks. Ratings range from A+ to D.)
**Past performance is no guarantee of future results.
VOYAGEUR INTERNATIONAL EQUITY FUND
The key feature of the first half of 1995 was the slowdown of the U.S. and its
influence on global economies and markets. In early 1995, the U.S. economy went
through a period of inventory adjustment, but the slowdown was compounded by the
collapse in Mexico, a major trading partner. The economy regained momentum in
the third quarter of 1995, but the virtual absence of inflation meant that the
Federal Reserve could ease their restrictions to the money supply and lower the
rates moderately in July. These events earlier in the year set the stage for a
rally in U.S. and global bonds and a solid advance in the U.S. domestic equity
market.
The slowdown in the United States economy coincided with a period of moderate to
flat growth in Europe where manufacturing industries eased but the consumer
failed to take up the slack. The result was a period of falling demand
with--once again--very low inflation. This background of low inflation clearly
favored equity markets. The best performing of the European markets were in
Scandinavia. However, Switzerland also performed well reaping the benefits of a
stable political and currency background.
The markets of the Far East fared poorly, with the exception of Hong Kong
which was up 16.68%. Japan suffered from the rising value of the yen until
mid-year when the trade dispute with the United States was resolved. Thereafter,
an agreement to weaken the yen was enacted. Although the Japanese market
bounced, during the reporting period it was still down 11.81% in dollars. Over
the period, the EAFE Index* was up 6.99% in local terms, but down 1.44% in
dollars. The Voyageur International Equity Fund's total return (based on net
asset value) for the six months reflected in this report was (1.27)%; the
year-to-date total return (as of October 31) was 2.20%.**
In Latin America, the measures instituted by the Mexican government following
the currency crisis in late 1994 introduced a deep recession in 1995. The equity
market responded well to the measures in local currency terms, but as weak
corporate profits were announced, volatility in stock prices and the peso
remained high.
Into 1996, we anticipate that markets will follow an improved path. Good local
market returns this year have been reduced by the appreciation of the dollar.
Going forward, we expect currency movements to be much smaller. With the yen
rate back to the range of 100 yen to the dollar, strains will be eased in the
Japanese domestic and exporting economy. Coupled with an improvement in the
stability of the financial sector, the future for the Japanese market looks
brighter. The strategy for the coming period, therefore, will be to steadily
increase exposure to Japan, maintain an overweight exposure to continental
Europe and look to the recovery of the investments in the Far East, which have
underperformed in the period just completed.
Murray Johnstone International, Ltd. is Sub-adviser to the Voyageur
International Equity Fund. Murray Johnstone International, an international
money manager since 1907, is based in Glasgow, Scotland.
* The EAFE Index is an unmanaged index of approximately 1,000 companies
representing the stock markets of 18 countries outside of the United States. The
Index assumes that no operating expenses, transaction fees or sales charges are
incurred by a hypothetical investor who directly owns the securities held in the
Index.
**Past performance is no guarantee of future results.
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) OCTOBER 31, 1995
___________________________________________________________________________________________________________________
VOYAGEUR VOYAGEUR
AGGRESSIVE GROWTH AND
ASSETS GROWTH FUND INCOME FUND
----------- -----------
<S> <C> <C>
Investments in securities, at market value (note 1) (identified
costs: $2,977,854, $2,130,964, $20,163,889 and $2,137,024
respectively)....................................................... $3,402,859 $2,104,340
Cash in bank on demand deposit (including foreign currency of $114,910
for the International Equity Fund).................................. 218,784 456,720
Dividends and interest receivable...................................... 2,817 6,522
Receivable for investment securities sold.............................. -- --
Receivable for Fund shares sold........................................ -- 98
Organizational costs (note 1).......................................... 16,218 30,841
---------- -----------
Total assets........................................................ 3,640,678 2,598,521
---------- -----------
LIABILITIES
Payable for investment securities purchased............................ 138,825 --
Accrued expenses....................................................... 29,387 31,484
---------- -----------
Total liabilities................................................... 168,212 31,484
---------- -----------
NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL STOCK..................... $3,472,466 $2,567,037
========== ==========
Represented by:
Capital Stock - $.01 par value (note 1)............................ $ 2,844 $ 2,595
Additional paid-in capital.......................................... 2,910,676 2,591,424
Undistributed net investment income (loss).......................... (11,666) (358)
Accumulated net realized gain (loss) on investments and foreign
currency transactions............................................. 145,607 --
Unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign currencies....... 425,005 (26,624)
---------- -----------
TOTAL NET ASSETS.................................................. $3,472,466 $2,567,037
========== ==========
Net assets applicable to outstanding Class A shares.................... $3,333,934 $2,567,037
========== ==========
Net assets applicable to outstanding Class B Shares.................... N/A N/A
Net assets applicable to outstanding Class C shares.................... $ 138,532 N/A
==========
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE
Class A - Shares of capital stock outstanding: 272,907, 259,525, 1,126,627
and 232,412, respectively (note 4)................................ $12.22 $9.89
====== =====
Class B - Shares of capital stock outstanding: N/A, N/A, 6,917
and N/A, respectively (note 4).................................... N/A N/A
Class C - Shares of capital stock outstanding: 11,467, N/A, 46
and 2,528, respectively (note 4).................................. $12.08 N/A
======
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)(CONTINUED) OCTOBER 31, 1995
___________________________________________________________________________________________________________________
VOYAGEUR VOYAGEUR
GROWTH INTERNATIONAL
STOCK FUND EQUITY FUND
---------- -----------
<S> <C> <C>
$24,650,750 $2,057,225
644,261 136,906
22,228 3,773
-- 10,183
20,223 --
-- 23,856
----------- ----------
25,337,462 2,231,943
----------- ----------
-- 25,176
9,085 21,273
----------- ----------
9,085 46,449
----------- ----------
$25,328,377 $2,185,494
=========== ==========
$ 11,336 $ 2,349
19,538,472 2,267,900
94,699 8,775
1,197,009 (13,965)
4,486,861 (79,565)
----------- ----------
$25,328,377 $2,185,494
=========== ==========
$25,173,072 $2,162,215
=========== ==========
$ 154,270 N/A
===========
$ 1,035 $ 23,279
=========== ==========
$22.34 $9.30
====== =====
$22.30 N/A
$22.34 $9.21
====== =====
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF OPERATIONS (UNAUDITED) PERIOD ENDED OCTOBER 31, 1995
___________________________________________________________________________________________________________________
VOYAGEUR VOYAGEUR
AGGRESSIVE GROWTH AND
Investment income: GROWTH FUND INCOME FUND*
----------- ------------
<S> <C> <C>
Dividends (net of foreign taxes withheld of $3,446
for the International Equity Fund)................................ $ 11,984 $ 862
Interest............................................................ -- 3,426
-------- --------
Total investment income........................................... 11,984 4,288
-------- --------
Expenses (note 2):
Investment advisory and management fee.............................. 14,814 1,948
Dividend disbursing, administrative and accounting services fees.... 9,906 708
Distribution fee - Class A.......................................... 3,521 649
Distribution fee - Class B.......................................... N/A N/A
Distribution fee - Class C.......................................... 725 --
Printing, postage and supplies...................................... 857 20
Legal fees.......................................................... 1,167 50
Custodian fees...................................................... 8,996 536
Compensation of directors........................................... 330 27
Audit and accounting fees........................................... 5,564 107
Registration fees................................................... 10,068 73
Amortization of organizational costs................................ 909 1,064
Other expenses...................................................... 833 --
-------- --------
Total expenses.................................................... 57,690 5,182
Less (note 2):
Expenses waived or absorbed......................................... (25,000) --
Expense reductions.................................................. (6,225) (536)
-------- --------
Total net expenses................................................ 26,465 4,646
-------- --------
Investment income (loss) - net.................................... (14,481) (358)
-------- --------
Realized and unrealized gain (loss) on investments
and foreign currency - net:
Net realized gain (loss) from:
Investments .................................................... 268,780 --
Foreign currency transactions................................... -- --
Net increase (decrease) in unrealized appreciation on:
Investments..................................................... 160,851 (26,624)
Translation of other assets and liabilities in foreign currencies -- --
-------- --------
Net gain (loss) on investments and foreign currency............... 429,631 (26,624)
-------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........ $415,150 $(26,982)
======== ========
________________________________
* Period from September 7, 1995 (commencement of operations) to October 31,
1995.
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS (UNAUDITED)(CONTINUED) PERIOD ENDED OCTOBER 31, 1995
___________________________________________________________________________________________________________________
VOYAGEUR VOYAGEUR
GROWTH INTERNATIONAL
STOCK FUND EQUITY FUND
---------- -----------
<S> <C> <C>
$ 272,323 $ 26,367
6,501 --
---------- --------
278,824 26,367
---------- --------
85,893 10,825
39,725 24,919
78,416 2,680
124 N/A
-- 110
998 582
2,027 689
7,020 14,296
406 407
4,624 4,191
8,150 8,424
-- 1,337
725 104
---------- --------
222,108 68,564
-- (40,000)
(6,764) (6,831)
---------- --------
221,344 21,733
---------- --------
57,480 4,634
---------- --------
1,254,702 48,480
-- (1,671)
1,487,919 (80,389)
-- (47)
---------- ---------
2,742,621 (33,627)
---------- ---------
$2,800,101 $(28,993)
========== =========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
___________________________________________________________________________________________________________________
VOYAGEUR AGGRESSIVE VOYAGEUR GROWTH AND
GROWTH FUND INCOME FUND
-------------------------------- --------------------
PERIOD FROM
SIX MONTHS PERIOD FROM SEPTEMBER 7, 1995*
ENDED MAY 16, 1994* TO
OCTOBER 31, 1995 TO OCTOBER 31, 1995
(UNAUDITED) APRIL 30, 1995 (UNAUDITED)
------------ -------------- ----------------
Operations:
<S> <C> <C> <C>
Investment income (loss) - net.......................... $ (14,481) $ (19,985) (358)
Realized gain (loss) on investments - net............... 268,780 (123,173) --
Net change in unrealized appreciation or depreciation
of investments........................................ 160,851 264,154 (26,624)
---------- ---------- ----------
Net increase (decrease) in net assets resulting
from operations....................................... 415,150 120,996 (26,982)
---------- ---------- ----------
Capital share transactions (note 4):
Proceeds from sale of shares (note 2):
Class A............................................... 1,002,764 3,249,711 2,628,845
Class C............................................... 5,667 124,305 --
Payments for redemption of shares:
Class A............................................... (251,732) (1,176,908) (34,826)
Class C (note 2)...................................... (16,403) (1,084) --
---------- ---------- ----------
Increase in net assets from capital share transactions.. 740,296 2,196,024 2,594,019
---------- ---------- ----------
Total increase in net assets.......................... 1,155,446 2,317,020 2,567,037
Net assets at beginning of period.......................... 2,317,020 -- --
---------- ---------- ----------
Net assets at end of period of (including undistributed
net investment income (loss) of $(11,666), $2,815,
and $(358), respectively)............................. $3,472,466 $2,317,020 $2,567,037
========== ========== ==========
_________________________________________
* Commencement of operations
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
___________________________________________________________________________________________________________________
VOYAGEUR GROWTH VOYAGEUR INTERNATIONAL
STOCK FUND EQUITY FUND
----------------------------- ----------------------------------
SIX MONTHS SIX MONTHS PERIOD FROM
ENDED YEAR ENDED ENDED MAY 16, 1994*
OCTOBER 31, 1995 APRIL 30, OCTOBER 31, 1995 TO
(UNAUDITED) 1995 (UNAUDITED) APRIL 30, 1995
-------------- ---------- ---------------- --------------
Operations:
<S> <C> <C> <C> <C>
Investment income gain (loss) - net........... $ 57,480 $ 185,111 $ 4,634 $ (8,937)
Net realized gain (loss) on investments
and foreign currency transactions........... 1,254,702 451,561 46,809 (61,115)
Net change in unrealized appreciation on
investments and translation of other assets
and liabilities in foreign currencies..... 1,487,919 3,009,595 (80,436) 871
----------- ----------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations................... 2,800,101 3,646,267 (28,993) (69,181)
----------- ----------- ---------- ----------
Distributions to shareholders from:
Investment income - net....................... -- (160,212) -- --
Net realized gain on investments.............. -- (475,478) -- --
----------- ----------- ---------- ----------
Total distributions......................... -- (635,690) -- --
----------- ----------- ---------- ----------
Capital share transactions (note 4):
Proceeds from sale of shares (note 2):
Class A..................................... 2,285,202 3,412,884 317,783 3,189,630
Class B..................................... 154,120 N/A --
Class C..................................... 1,045 N/A 3,464 20,034
Net asset value of shares issued in reinvestment
of net investment income and net realized
gain distributions:
Class A................................... -- 607,335 -- --
Class B................................... -- N/A -- --
Class C................................... -- N/A -- --
Payments for redemption of shares:
Class A..................................... (3,563,472) (11,897,870) (135,710) (1,111,533)
Class B..................................... (10) N/A -- --
Class C..................................... (13) N/A -- --
----------- ----------- ---------- ----------
Increase (decrease) in net assets from capital
share transactions.......................... (1,123,128) (7,877,651) 185,537 2,098,131
----------- ----------- ---------- ----------
Total increase (decrease) in net assets... 1,676,973 (4,867,074) 156,544 2,028,950
Net assets at beginning of period................ 23,651,404 28,518,478 2,028,950 --
----------- ----------- ---------- ----------
Net assets at end of period (including undistributed net
investment income (loss) of $94,699, $37,219,
$8,775 and $4,141, respectively)............ $25,328,377 $23,651,404 $2,185,494 $2,028,950
=========== =========== ========== ==========
_________________________________________
*Commencement of operations
See accompanying notes to financial statements.
</TABLE>
THE VOYAGEUR FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
________________________________________________________________________________
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Voyageur Aggressive Growth Fund (Aggressive Growth Fund), Voyageur
Growth and Income Fund (Growth and Income 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. Aggressive Growth Fund, Growth and Income Fund, Growth
Stock Fund and International Equity Fund (the Funds) each offer Class A, Class B
and Class C Shares. Class A Shares are sold with a front-end sales charge. Class
B Shares, first offered by the Funds on September 1, 1995, may be subject to a
contingent deferred sales charge and such shares automatically convert to Class
A after eight years. Class C Shares, first offered by Growth and Income Fund and
Growth Stock Fund on September 1, 1995, 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.
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, Growth and Income 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 Aggressive Growth Fund and 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 .75% of Growth and Income Fund's
average daily net assets, and 1.00% of Aggressive Growth Fund's, Growth Stock
Fund's and International Equity Fund's average daily net assets. Investment
decisions for the Growth and Income Fund are executed by Segall Bryant and
Hamill. Voyageur pays Segall Bryant and Hamill for their services a fee equal to
.75% of average daily net assets. Investment decisions for the International
Equity Fund are executed by Murray Johnstone International, Ltd. Voyageur pays
Murray Johnstone International, Ltd. for their services a fee equal to .50% of
average daily net assets. The Funds paid no direct fees to the sub-advisors.
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, Growth and Income 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, effective September 1, 1995, each Fund pays Fund Distributors
a monthly distribution fee at an annual rate of .25% of each Fund's average
daily net assets of the Class A Shares and 1.00% of each Fund's average daily
net assets of the Class B and Class C Shares. Prior to September 1, 1995, Growth
Stock Fund paid Fund Distributors a monthly fee equal to an annual rate of 1.00%
of average daily net assets for Class A 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 B and Class C
net assets for Aggressive Growth Fund and Growth and Income Fund, 1.65% of
average daily Class A net assets and 2.40% of average daily Class B and Class C
net assets for Growth Stock Fund, and 2.00% of average daily Class A net assets
and 2.75% of average daily Class B and Class C net assets for International
Equity Fund, on an annual basis. During the periods ended October 31, 1995,
Voyageur absorbed $13,740 for Aggressive Growth Fund and $36,315 for
International Equity Fund pursuant to the most restrictive state limitation and
voluntarily absorbed $11,260 for Aggressive Growth Fund and $3,685 for
International Equity Fund. The Funds earned 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. The
credits earned for the period ended October 31, 1995 were $6,225 for Aggressive
Growth Fund, $536 for Growth and Income Fund, $6,764 for Growth Stock Fund and
$6,831 for International Equity Fund.
Sales charges paid by Class A shareholders during the period ended October
31, 1995 were $3,479, $13,419, and $4,373 for Aggressive Growth Fund, Growth
Stock Fund and International Equity Fund, respectively. Of these amounts, Fund
Distributors received $483, $1,960, and $623, respectively. Contingent deferred
sales charges paid by Class C shareholders during the period ended October 31,
1995 were $130 for Aggressive Growth Fund.
(3) INVESTMENT SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (other
than short-term securities) aggregated $3,806,724 and $2,881,136 for Aggressive
Growth Fund, $2,130,964 and $0 for Growth and Income Fund, $5,059,154 and
$5,414,525 for Growth Stock Fund and $1,306,261 and $903,202 for International
Equity Fund during the period ended October 31, 1995.
(4) CAPITAL STOCK
Transactions in shares of capital stock during the periods ended October
31, 1995 and April 30, 1995 were as follows:
<TABLE>
<CAPTION>
Aggressive Growth Fund
---------------------------------------------------------------------
CLASS A CLASS C
---------------------------------- ---------------------------------
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED MAY 16, 1994* ENDED MAY 20, 1994*
OCTOBER 31, 1995 TO APRIL 30, OCTOBER 31, 1995 TO APRIL 30,
(UNAUDITED) 1995 (UNAUDITED) 1995
----------------- ------------- ---------------- -------------
<S> <C> <C> <C> <C>
Shares sold................................. 83,576 335,020 493 12,449
Shares redeemed............................. (21,123) (124,566) (1,367) (108)
--------- ----------- ---------- -------
Increase (decrease) in shares outstanding... 62,453 210,454 (874) 12,341
========= =========== ========== =======
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
----------------------
CLASS A
------------------
PERIOD FROM
SEPTEMBER 7, 1995*
TO OCTOBER 31, 1995
(UNAUDITED)
------------------
<S> <C>
Shares sold.................................... 263,011
Shares redeemed............................... (3,486)
----------
Increase in shares outstanding................ 259,525
==========
_________________________________________
* Commencement of operations
</TABLE>
<TABLE>
<CAPTION>
GROWTH STOCK FUND
----------------------------------------------------------------------------
CLASS A CLASS B CLASS C
------------------------------- ------------------- ----------------------
SIX MONTHS YEAR PERIOD FROM PERIOD FROM
ENDED ENDED SEPTEMBER 8, 1995* OCTOBER 24, 1995*
OCTOBER 31, 1995 APRIL 30, TO OCTOBER 31, 1995 TO OCTOBER 31, 1995
(UNAUDITED) 1995 (UNAUDITED) (UNAUDITED)
------------------------------- ------------------- ----------------------
<S> <C> <C> <C> <C>
Shares sold............................. 106,948 187,945 6,918 47
Shares issued for reinvested distributions -- 34,332 -- --
Shares redeemed......................... (168,378) (662,562) (1) (1)
------------ ----------- --------- ----------
Increase (decrease) in shares outstanding (61,430) (440,285) 6,917 46
============ =========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
----------------------------------------------------------------------
CLASS A CLASS C
----------------------------------- ----------------------------------
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED MAY 16, 1994* ENDED MAY 20, 1994*
OCTOBER 31, 1995 TO APRIL 30, OCTOBER 31, 1995 TO APRIL 30,
(UNAUDITED) 1995 (UNAUDITED) 1995
----------------- -------------- ----------------------------------
<S> <C> <C> <C> <C>
Shares sold............................ 33,392 327,714 369 2,159
Shares redeemed........................ (14,225) (114,469) -- --
----------- ----------- ------- ---------
Increase in shares outstanding......... 19,167 213,245 369 2,159
=========== =========== ======= ========
_____________________________________
*Commencement of operations
</TABLE>
(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
------------------------------------- ----------------------------------
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED OCTOBER 31, MAY 16, 1994* TO ENDED OCTOBER 31, MAY 20, 1994* TO
1995(D) APRIL 30, 1995(D) APRIL 30,
(UNAUDITED) 1995 (UNAUDITED) 1995
------------------- ---------------- ---------------- ----------------
Net asset value:
<S> <C> <C> <C> <C>
Beginning of period....................... $10.40 $10.00 $10.33 $10.00
------ ------ ------ ------
Operations:
Net investment income (loss).............. (.05) (.09) (.11) (.16)
Net realized and unrealized gain (loss)
on investments.......................... 1.87 .49 1.86 .49
------ ------ ------ -----
Total from operations................. 1.82 .40 1.75 .33
------ ------ ------ -----
Net asset value:
End of period............................. $12.22 $10.40 $12.08 $10.33
====== ====== ====== ======
Total investment return (c).................. 17.50% 4.00% 16.94% 3.30%
Net assets at end of
period (000's omitted).................... $3,334 $2,189 $139 $128
Ratios:
Expenses to average net assets ........... 1.75%(a) 1.74%(a) 2.50%(a) 2.40%(a)
Net investment loss to average net assets. (.94)%(a) (1.21)%(a) (1.69)%(a) (1.80)%(a)
Assuming no voluntary waivers and
reimbursements and expense reductions
up to the most restrictive state limitation
in effect:
Expenses....................... 2.97%(a) 2.97%(a) 2.93%(a) 3.50%(a)
Net investment income (loss)...(2.16)%(a) (2.44)%(a) (2.12)%(a) (2.90)%(a)
Portfolio turnover rate (excluding
short-term securities).................. 103.1% 88.3% 103.1% 88.3%
___________________________________________
Per share amounts are presented based upon average fund shares outstanding.
* Commencement of operations
See accompanying notes to Financial Highlights.
</TABLE>
(5) FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
----------------------
CLASS A
----------------------
PERIOD FROM
SEPTEMBER 7, 1995* TO
OCTOBER 31, 1995
(UNAUDITED)
------------------
Net asset value:
<S> <C>
Beginning of period................................................. $10.00
Operations:
Net investment income (loss)........................................ --
Net realized and unrealized gain (loss) on investments.............. (.11)
-----
Total from operations............................................. (.11)
-----
Net asset value:
End of period....................................................... $9.89
=====
Total investment return (c)............................................ (1.10)%
Net assets at end of
period (000's omitted).............................................. $2,567
Ratios:
Expenses to average net assets...................................... 1.75%(a)
Net investment loss to average net assets........................... (.13)%(a)
Assuming no voluntary waivers and
reimbursements and expense reductions, up to the
most restrictive state limitation in effect:
Expenses.................................................... 1.95%(a)
Net investment income (loss)................................ (.33)%(a)
Portfolio turnover rate (excluding
short-term securities).............................................. --%
_________________________________________
Per share amounts are presented based upon average fund shares outstanding.
* Commencement of operations
See accompanying notes to Financial Highlights.
</TABLE>
(5) FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
GROWTH STOCK FUND
-------------------------------------------------------------------
CLASS A
-------------------------------------------------------------------
SIX MONTHS
ENDED
OCTOBER 31, 1995 YEAR ENDED APRIL 30,
--------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991(b)
----------- ------ ------ ------ ------ ------
Net asset value:
<S> <C> <C> <C> <C> <C> <C>
Beginning of year........................... $19.91 $17.51 $17.81 $23.81 $19.36 $18.85
------ ------ ------ ------ ------ ------
Operations:
Net investment income (loss)................ .05 .15 .07 .05 (.18) (.11)
Net realized and unrealized
gain (loss) on investments................ 2.38 2.77 (.16) .22 4.81 3.40
------ ------ ------ ------ ------ ------
Total from operations................... 2.43 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................................. $22.34 $19.91 $17.51 $17.81 $23.81 $19.36
====== ====== ====== ====== ====== ======
Total investment return (c).................... 12.20% 17.04% (.52)% 1.51% 23.86% 20.51%
Net assets at end of
year (000's omitted)........................ $25,173 $23,651 $28,518 $26,784 $19,351 $11,400
Ratios:
Expenses to average net assets.............. 1.81%(a) 1.90% 1.90% 1.90% 2.25% 2.36%
Net investment income (loss) to average
net assets............................... .47%(a) .75% .40% .26% (.76)% (.67)%
Assuming no voluntary waivers,
reimbursements and expense reductions:
Expenses............................ 1.86%(a) 1.99% 2.13% 2.70% 2.86% 2.86%
Net investment income (loss)........ .42%(a) .66% .17% (.54)% (1.37)% (1.17)%
Portfolio turnover rate
(excluding short-term securities)......... 21.24% 21.8% 34.2% 16.5% 142.6% 128.2%
See accompanying notes to Financial Highlights.
</TABLE>
(5) FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
GROWTH STOCK FUND
---------------------------------------------
CLASS B CLASS C
------------------- --------------------
PERIOD FROM PERIOD FROM
SEPTEMBER 8, 1995* OCTOBER 24, 1995*
TO OCTOBER 31, 1995 TO OCTOBER 31, 1995
(UNAUDITED) (UNAUDITED)
------------------- --------------------
Net asset value:
<S> <C> <C>
Beginning of period............................... $21.64 $22.61
------ ------
Operations:
Net investment income (loss)...................... (.02) --
Net realized and unrealized
gain (loss) on investments...................... .68 (.27)
------ ------
Total from operations......................... .66 (.27)
------ ------
Net asset value:
End of year....................................... $22.30 $22.34
====== ======
Total investment return (c).......................... 3.05% (1.19)%
Net assets at end of
year (000's omitted).............................. $154 $1
Ratios:
Expenses to average net assets.................... 2.24%(a) 2.21%(e)
Net investment income (loss) to average net assets (.93)%(a) (2.21)%(e)
Assuming no voluntary waivers and reimbursements
and expense reductions:....................... 2.30%(a) 2.27%(e)
Expenses.................................... (.99)%(a) (2.27)%(e)
Net investment income (loss)................
Portfolio turnover rate
(excluding short-term securities)................. 21.24% 21.24%
_________________________________________
* Commencement of operations
See accompanying notes to Financial Highlights.
</TABLE>
(5) FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
International Equity Fund
-------------------------------------------------------------------
Class A Class C
-------------------------------- ---------------------------------
Six months Period from Six months Period from
ended May 16, 1994* ended May 20, 1994*
October 31, 1995 to April 30, October 31, 1995 to April 30,
(unaudited) 1995 (unaudited) 1995
------------------ ------------ ----------------- -------------
Net asset value:
<S> <C> <C> <C> <C>
Beginning of period......................... $9.42 $10.00 $9.36 $9.99
----- ----- ----- -----
Operations:
Net investment income (loss)................ .02 (.05) (.01) (.11)
Net realized and unrealized loss on
investments and translation of assets
and liabilities in foreign currencies.... (.14) (.53) (.14) (.52)
----- ----- ----- -----
Total from operations................... (.12) (.58) (.15) (.63)
----- ----- ----- -----
Net asset value:
End of period............................... $9.30 $9.42 $9.21 $9.36
===== ===== ===== =====
Total investment return (c).................... (1.27)% (5.80)% (1.60)% (6.31)%
Net assets at end of
period (000's omitted)...................... $2,162 $2,009 $23 $20
Ratios:
Expenses to average net assets.............. 2.00%(a) 1.99%(a) 2.74%(a) 2.74%(a)
Net investment income (loss) to average net assets .44%(a) (.55)%(a) (.35)%(a) (1.36)%(a)
Assuming no voluntary waivers and
reimbursements, up to the most restrictive
state limitation in effect:
Expenses ............................. 2.97%(a) 2.97%(a) 3.50%(a) 3.50%(a)
Net investment income (loss).......... (.53)%(a) (1.53)%(a) (1.11)%(a) (2.12)%(a)
Portfolio turnover rate (excluding
short-term securities)...................... 46.4% 92.1% 46.4% 92.1%
________________________________________
Per share amounts are presented based upon average fund shares outstanding.
* Commencement of operations
See accompanying notes to Financial Highlights.
</TABLE>
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.
(d) Effective May 1, 1995, Voyageur replaced George D. Bjurman & Associates as
the investment adviser for Aggressive Growth Fund to become the sole
investment adviser to the Fund.
(e) Ratios presented for the period from October 24, 1995 to October 31, 1995
are not annualized as they are not indicative of anticipated annual
results.
<TABLE>
<CAPTION>
VOYAGEUR AGGRESSIVE GROWTH FUND
INVESTMENTS IN SECURITIES (UNAUDITED) OCTOBER 31, 1995
___________________________________________________________________________________________________________________
MARKET
ISSUER NUMBER OF SHARES VALUE(a)
___________________________________________________________________________________________________________________
(Percentages of each investment category relate to total net assets)
COMMON STOCKS (98.0%):
BASIC MATERIALS (5.2%):
___________________________________________________________________________________________________________________
<S> <C> <C>
Air Products & Chemicals Incorporated 1,300 $ 67,112
Hercules Incorporated 600 32,025
Union Carbide Corporation 2,200 83,325
----------
182,462
----------
CAPITAL GOODS - TECHNOLOGY (3.0%):
___________________________________________________________________________________________________________________
Oak Industries, Incorporated 1,600 33,400
Philips Electronics NV - NY 1,800 69,525
----------
102,925
----------
COMMERCIAL SERVICES (2.8%):
___________________________________________________________________________________________________________________
Frontier Corporation 2,200 59,400
Reynolds & Reynolds Company 1,100 39,188
----------
98,588
----------
CONSUMER CYCLICAL (1.6%):
___________________________________________________________________________________________________________________
Electronic Arts, Incorporated 1,500 54,938
----------
CONSUMER NON-DURABLE (12.3%):
___________________________________________________________________________________________________________________
Coca Cola 1,200 86,250
Colgate Palmolive Company 800 55,400
Gillette Company 800 38,700
Pepsico Incorporated 1,400 73,850
Philip Morris 800 67,600
Proctor & Gamble 1,300 105,300
----------
427,100
----------
ENERGY (4.9%):
___________________________________________________________________________________________________________________
Exxon Corporation 1,400 106,925
Schlumberger, Ltd. 1,000 62,250
----------
169,175
----------
FINANCIAL (6.1%):
___________________________________________________________________________________________________________________
BayBanks, Incorporated 800 64,800
Federal National Management Association Company 500 52,437
First USA, Incorporated 1,300 59,800
Wells Fargo & Company 175 36,772
----------
213,809
----------
HEALTHCARE (24.5%):
___________________________________________________________________________________________________________________
Abbot Labs 1,500 59,625
Bristol Meyers Squibb Company 500 38,125
Cerner Corporation 1,200 31,800
Foundation Health Corporation 2,000 84,750
HBO & Company 1,100 77,825
Idexx Labs Incorporated 1,100 44,825
Inphynet Medical Management Incorporated 3,500 63,000
Johnson & Johnson Company 800 65,200
Merck & Company 1,500 86,250
Pacificare Health Systems - Class B 1,000 72,750
Phycor Incorporated 2,000 73,500
Quantm Health 2,300 24,437
Schering Plough Corporation 1,300 69,712
US Healthcare, Incorporated 1,500 57,750
----------
849,549
----------
TECHNOLOGY (34.6%):
___________________________________________________________________________________________________________________
Alliance Semiconductor Corporation 2,100 64,575
Andrew Corporation 400 16,900
Applied Materials Incorporated 600 30,075
Baan Company 2,000 85,000
Bay Networks, Incorporated 900 59,625
BMC Software Incorporated 1,000 35,625
Cabletron Systems, Incorporated 550 43,244
Dendrite International Incorporated 4,000 69,500
DSC Communications Corporation 1,500 55,500
Ericcson L M Tel Company 2,000 42,719
Intel Corporation 1,000 69,875
Micron Technology Incorporated 1,000 70,625
Oracle Systems Corporation 1,500 65,437
Progress Software Corporation 1,300 85,150
Project Software & Development, Incorporated 2,400 63,600
Shiva Corporation 1,200 72,000
Silicon Graphics, Incorporated 1,600 53,200
Symantec Corporation 4,200 102,113
Tencor Instruments 1,000 42,625
US Robotics Corporation 800 74,000
----------
1,201,388
----------
UTILITY (3.0%):
___________________________________________________________________________________________________________________
Duke Power Company 2,300 102,925
----------
TOTAL INVESTMENTS IN SECURITIES (COST: $2,977,854)(b) $3,402,859
==========
See accompanying notes to investments in securities on page 41.
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR GROWTH AND INCOME FUND
INVESTMENTS IN SECURITIES (UNAUDITED) OCTOBER 31, 1995
___________________________________________________________________________________________________________________
MARKET
ISSUER NUMBER OF SHARES VALUE(a)
___________________________________________________________________________________________________________________
(Percentages of each investment category relate to total net assets)
COMMON STOCKS (52.2%):
CAPITAL GOODS (8.0%):
___________________________________________________________________________________________________________________
<S> <C> <C>
Corning Incorporated 1,700 $ 44,412
General Electric 800 50,600
Littelfuse Incorporated 2,000(c) 65,000
Raychem Corporation 950 44,056
----------
204,068
----------
COMMERCIAL SERVICES (13.6%):
___________________________________________________________________________________________________________________
Airtouch Communications 1,600 45,600
British Sky Broadcasting ADR 1,000 35,750
Comcast UK Cable 3,800 48,925
Interpublic Group Company 1,000 38,750
Republic Waste Industries 2,500(c) 53,750
Tele-Communications International 3,000(c) 67,875
Viacom Incorporated Class B 1,200 60,000
----------
350,650
----------
CONSUMER CYCLICAL (7.1%):
___________________________________________________________________________________________________________________
Duracell International Incorporated 1,350 70,706
Harley-Davidson Incorporated 2,000 53,500
Mattel Incorporated 2,000 57,500
----------
181,706
----------
ENERGY (4.0%):
___________________________________________________________________________________________________________________
Camco International Incorporated 2,000 45,750
Enron Corporation 1,650 56,719
----------
102,469
----------
FINANCIAL (9.3%):
___________________________________________________________________________________________________________________
Baldwin & Lyons Class B 800 11,700
Banco Latinoamericano de Export 1,300 54,275
Mercury Finance Company 2,500 48,125
Republic New York 750 43,969
Security Cap Industries Trust 5,000 81,875
----------
239,944
----------
HEALTHCARE (8.3%):
___________________________________________________________________________________________________________________
Abbott Labs 1,300 51,675
Amsco International Incorporated 3,500(c) 56,000
Charter Medical 2,500 45,000
Elan Corporation 1,500 60,188
----------
212,863
----------
TECHNOLOGY (1.9%):
___________________________________________________________________________________________________________________
Black Box Corporation 3,000(c) 48,750
----------
TOTAL INVESTMENTS IN COMMON STOCK (COST: $1,374,727) $1,340,450
----------
CONVERTIBLE PREFERRED STOCKS (0.4%):
CONSUMER NON-DURABLE (0.4%):
___________________________________________________________________________________________________________________
Corning Dell LP $3.00 250 11,250
----------
TOTAL INVESTMENTS IN CONVERTIBLE PREFERRED STOCKS (COST: $12,956) $11,250
----------
CONVERTIBLE CORPORATE BONDS (5.8%):
CONSUMER NON-DURABLE (2.0%):
___________________________________________________________________________________________________________________
Starbucks Corporation, 4.25% due 11/01/02 50,000 50,375
----------
FINANCIAL (2.0%):
___________________________________________________________________________________________________________________
Mitsubishi Bank International Finance, 3.00% due 11/30/02 50,000 51,750
---------
HEALTHCARE (1.8%):
___________________________________________________________________________________________________________________
Amsco International, 6.50% due 10/15/02 50,000 47,500
---------
TOTAL INVESTMENTS IN CONVERTIBLE CORPORATE BONDS (COST: $147,500) $149,625
----------
U.S. TREASURY OBLIGATIONS (23.5%):
___________________________________________________________________________________________________________________
5.125% due 02/28/98 500,000 494,140
7.125% due 02/15/23 100,000 108,875
----------
TOTAL INVESTMENTS IN U.S. TREASURY OBLIGATIONS (COST: $595,781) $603,015
----------
TOTAL INVESTMENTS IN SECURITIES (COST: $2,130,964)(b) $2,104,340
==========
See accompanying notes to investments in securities on page 41.
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR GROWTH STOCK FUND
INVESTMENTS IN SECURITIES (UNAUDITED) OCTOBER 31, 1995
___________________________________________________________________________________________________________________
MARKET
ISSUER NUMBER OF SHARES VALUE(a)
___________________________________________________________________________________________________________________
(Percentages of each investment category relate to total net assets)
COMMON STOCKS (97.3%):
BASIC INDUSTRIES (6.0%):
___________________________________________________________________________________________________________________
<S> <C> <C>
Bemis 27,000 $ 702,000
Sigma-Aldrich 17,000 807,500
----------
1,509,500
----------
CAPITAL GOODS - INDUSTRIAL (9.5%):
___________________________________________________________________________________________________________________
General Electric 13,000 822,250
Grainger (W.W.) 12,000 750,000
Pitney - Bowes 19,000 828,875
----------
2,401,125
----------
CAPITAL GOODS - TECHNOLOGY (10.4%):
___________________________________________________________________________________________________________________
Automatic Data Processing 12,000 858,000
Hewlett-Packard 10,000 926,250
Motorola 13,000 853,125
----------
2,637,375
----------
CONSUMER DEFENSIVE STAPLES (23.3%):
___________________________________________________________________________________________________________________
Albertson's Incorporated 27,000 897,750
Anheuser Busch 13,000 858,000
Conagra Incorporated 21,000 811,125
Philip Morris 10,000 845,000
Sara Lee 29,000 851,875
Sysco Corporation 30,000 911,250
Wal-Mart Stores 34,000 735,250
----------
5,910,250
----------
CONSUMER DURABLES (8.2%):
___________________________________________________________________________________________________________________
Bandag 12,000 615,000
Genuine Parts 20,000 792,500
Rubbermaid 26,000 679,250
----------
2,086,750
----------
CONSUMER NON-DURABLES (2.6%):
___________________________________________________________________________________________________________________
Dillard Department Stores 24,000 651,000
----------
CONSUMER GROWTH STAPLES (24.0%):
___________________________________________________________________________________________________________________
Abbott Laboratories 19,000 755,250
American Home Products 11,000 974,875
Circuit City 23,000 767,625
Gannett 15,000 815,625
Merck 16,000 920,000
Pepsico 17,000 896,750
Schering-Plough 18,000 965,250
----------
6,095,375
----------
ENERGY (6.5%):
___________________________________________________________________________________________________________________
Royal Dutch Petroleum 7,000 860,125
Shell Transport & Trading 11,000 783,750
----------
1,643,875
----------
FINANCIAL SERVICES (6.8%):
___________________________________________________________________________________________________________________
Fifth Third Bancorp 14,000 941,500
Suntrust Banks 12,000 774,000
----------
1,715,500
----------
TOTAL INVESTMENTS IN COMMON STOCK (COST: $20,163,889)(b) $24,650,750
===========
See accompanying notes to investments in securities on page 41.
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR INTERNATIONAL EQUITY FUND
INVESTMENTS IN SECURITIES (UNAUDITED) OCTOBER 31, 1995
___________________________________________________________________________________________________________________
MARKET
ISSUER NUMBER OF SHARES VALUE(a)
___________________________________________________________________________________________________________________
(Percentages of each investment category relate to total net assets)
COMMON STOCKS (94.1%):
ARGENTINA (2.1%):
___________________________________________________________________________________________________________________
<S> <C> <C>
Transportadora Gas ADR (energy) 2,300 $ 23,575
YPF Sociedad Anonima ADR (energy) 1,300 22,263
----------
45,838
AUSTRALIA (1.8%):
___________________________________________________________________________________________________________________
CSR Limited (building materials) 10,000 31,871
National Australian Bank (banking) 1,000 8,550
----------
40,421
----------
DENMARK (1.8%):
___________________________________________________________________________________________________________________
Tele Danmark A/S Ser B (telecommunications) 760 39,623
----------
FRANCE (6.5%):
___________________________________________________________________________________________________________________
Alcatel Alsthom CIE (telecommunications) 420 35,846
AGF (insurance) 920 26,512
Cap Gemini Sogeti (computer services) 124 3,421
CPR Parisienne De Rees (financial services) 400(c) 30,738
Legris Industries S.A. (machinery) 570 16,542
Lyonnaise Des Eaux (environmental control) 290 28,272
----------
141,331
----------
GERMANY (1.9%):
___________________________________________________________________________________________________________________
Mannesmann AG (diversified machine) 125 41,008
----------
GREAT BRITAIN (16.4%):
___________________________________________________________________________________________________________________
Argyll Group PLC (retail) 4,500 22,863
Blue Circle Industries (building materials) 3,500 16,071
BOC Group PLC (chemicals) 2,000 27,424
British Gas (energy) 4,000 15,211
British Petrol PLC (energy) 2,000 14,690
BTR PLC (diversified industrial) 6,000 31,810
Cable and Wireless PLC (telecommunications) 5,000 32,663
Commercial Union (insurance) 2,000 19,345
General Electric Company (electronics) 6,500 32,205
Glaxo Wellcome (pharmaceuticals) 2,500 33,668
Grand Metropolitan PLC (wines and spirits) 4,000 27,645
Kingfisher PLC (retail) 2,000 14,990
Lloyds Bank (banking) 2,000 24,584
Rank Organization PLC (leisure) 3,800 25,243
Unilever (food-processing) 1,000 19,392
----------
357,804
----------
HONG KONG (3.7%):
___________________________________________________________________________________________________________________
Cheung Kong (real estate) 5,000 28,195
Swire Pacific "A" (conglomerate) 7,000 52,510
----------
80,705
----------
IRELAND (1.8%):
___________________________________________________________________________________________________________________
Allied Irish Banks 7,900 39,889
----------
ITALY (3.8%):
___________________________________________________________________________________________________________________
Istituto Mobiliare Italiano (financial services) 4,600 25,133
Marzotto & Figli (textiles) 10,500 25,958
Telecom Italia (telecommunications) 8,900(c) 14,934
Telecom Mobile Risp 15,000(c) 16,655
----------
82,680
----------
JAPAN (29.3%):
___________________________________________________________________________________________________________________
Canon Incorporated (precision) 3,000 51,347
Hoya Corporation (precision) 1,000 29,341
Itochu Corporation (wholesale and international trade) 7,000 41,489
Mitsubishi Materials Corporation (diversified metals) 8,000 36,149
Mori Seiki (hand/machine tools) 2,000 39,513
NEC Corporation (electronics) 3,000 39,611
Nippon Steel (steel) 11,000 36,471
Nippon Telephone and Telegraph (telecommunications) 4 32,823
NKK Corporation (steel) 15,000(c) 36,236
Nomura Securities Company Limited (securities houses) 3,000 54,868
Omron Corporation (electronics) 2,000 46,750
Sanwa Bank (banking) 2,000 34,036
Secom (electronics) 1,000 65,138
Sumitomo Bank (banking) 3,000 53,108
Yamanouchi Pharmaceutical (pharmaceuticals) 2,000 44,599
----------
641,479
----------
MEXICO (2.7%):
___________________________________________________________________________________________________________________
Grupo Industrial Durango ADR (paper) 2,400(c) 19,200
ICA Empresas ADR (construction) 1,800 17,100
Telefonos De Mexico ADR (utilities) 800 22,000
----------
58,300
----------
NETHERLANDS (3.1%):
___________________________________________________________________________________________________________________
Elsevier (media) 2,220 28,661
VNU Verigd Bezit (publishing) 280 39,197
----------
67,858
----------
NEW ZEALAND (2.1%):
___________________________________________________________________________________________________________________
Telecom Corporation of New Zealand (telecommunications) 11,000 45,668
----------
NORWAY (1.7%):
___________________________________________________________________________________________________________________
Norsk Hydro (energy) 925 36,828
----------
SINGAPORE (7.4%):
___________________________________________________________________________________________________________________
Hong Kong Land Hldg (property) 14,000 25,238
Keppel Corporation (transportaion) 7,000 57,401
Oversea Chinese Banking (banking) 4,000 46,939
Singapore Land Limited (real estate) 6,000 33,508
----------
163,086
----------
SPAIN (5.7%):
___________________________________________________________________________________________________________________
Banco Credito (banking) 222(c) 1,498
Banco Santander (banking) 666 28,983
Portland Valderrivas (building materials) 840 55,313
Vallehermoso SA (real estate) 2,420 39,096
----------
124,890
----------
SWITZERLAND (2.3%):
___________________________________________________________________________________________________________________
Ciba-Geigy (pharmaceuticals) 29 25,083
Sandoz AG (pharmaceuticals) 30 24,734
----------
49,817
TOTAL INVESTMENTS IN SECURITIES (COST: $2,137,024)(b) $2,057,225
==========
See accompanying notes to investments in securities on page 41.
</TABLE>
VOYAGEUR AGGRESSIVE GROWTH FUND
VOYAGEUR GROWTH AND INCOME FUND
VOYAGEUR GROWTH STOCK FUND
VOYAGEUR INTERNATIONAL EQUITY FUND
NOTES TO INVESTMENTS IN SECURITIES (UNAUDITED)
________________________________________________________________________________
(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:
<TABLE>
<CAPTION>
Net
Gross Gross Unrealized
Unrealized Unrealized Appreciation/
Appreciation (Depreciation) (Depreciation)
------------ ------------- -------------
<S> <C> <C> <C>
Aggressive Growth Fund $ 503,697 $ (78,692) $ 425,005
Growth and Income Fund 43,081 (69,704) (26,624)
Growth Stock Fund 4,926,217 (439,356) 4,486,861
International Equity Fund 84,538 (164,337) (79,799)
(c) Presently non-income producing security.
</TABLE>
THE VOYAGEUR FUNDS
ANNUAL MEETING RESULTS (UNAUDITED)
________________________________________________________________________________
An annual meeting of the Growth Stock Fund shareholders was held on August 18,
1995. The following matter was voted upon at the meeting, as well as the number
of votes cast for, against or withheld, the number of absentions, and the number
of broker non-votes with respect to such matter, are set forth below.
1. The Fund's shareholders approved the amended Investment Advisory
Agreement between the Fund and Voyageur Fund Managers, Inc.
<TABLE>
<CAPTION>
Shares Shares
Voted "For" Voted "Against" Absentions
----------- --------------- ----------
<S> <C> <C> <C>
480,228 61,764 34,990
</TABLE>
There were no broker non-votes with this proxy.
