AGGRESSIVE GROWTH FUND
GROWTH AND INCOME FUND
GROWTH STOCK FUND
INTERNATIONAL EQUITY FUND
ANNUAL REPORT
Dated April 30, 1996
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 HIGH YIELD FUNDS seek high current income free from both Federal income
taxes and state income taxes (where applicable). The Funds invest in medium and
lower grade municipal bonds.
<TABLE>
<CAPTION>
<S> <C>
Voyageur MINNESOTA High Yield Municipal Bond Fund
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.
Voyageur ARIZONA Insured Tax Free Fund Voyageur FLORIDA Insured Tax Free Fund
Voyageur CALIFORNIA Insured Tax Free Fund Voyageur OREGON Insured Tax Free Fund
Voyageur MISSOURI Insured Tax Free Fund Voyageur MINNESOTA Insured Fund
Voyageur NATIONAL Insured Tax Free Fund Voyageur WASHINGTON Insured Tax Free Fund
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.
Voyageur FLORIDA Limited Term Tax Free Fund
Voyageur NATIONAL Limited Term Tax Free Fund
Voyageur MINNESOTA Limited Term Tax Free Fund
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.
Voyageur CALIFORNIA MUNICIPAL CASH Series Voyageur OHIO MUNICIPAL CASH Series
Voyageur MUNICIPAL CASH Series Voyageur PRIME CASH Series
Voyageur FLORIDA MUNICIPAL CASH Series Voyageur TREASURY CASH Series
Voyageur GOVERNMENT CASH Series Voyageur MINNESOTA MUNICIPAL 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).
LETTER FROM THE PRESIDENT
[PHOTO]
John G. Taft
President
Dear Shareholder:
Last year's stock market was a compelling story -- one that kept most investors
wondering just what would happen next. But for all the economic plot twists and
market turns, 1995 brought a happy ending -- with large company stocks
generating their seventh best stock returns for the 70-year period between 1926
and 1995.(1)
The key theme of 1995 was competition, causing companies to turn to technology
and mergers and acquisitions as a way of providing better, faster and cheaper
services and products to a more cost-conscious consumer. But while competition
heated up between companies, most world economies showed signs of slowing in
1995.
At Voyageur, we remain committed to providing our clients with the best
investment products and services available in today's financial market. Our
equity funds allow you access to wide variety of areas within the stock market,
all of which are actively managed to meet individual fund objectives.
Also, as part of our commitment to you, we have redesigned our shareholder
reports to provide you with more in-depth information about your Voyageur fund
investments in an easier-to-read format. We welcome any comments you may have
about these changes and encourage you to call our Voyageur Shareholder Services
at 800.545.3863.
If at any time you have questions about your Voyageur fund investments, please
contact you personal financial advisor or Voyageur Shareholders Services. Our
Voyageur Shareholder Services 800 number -- known as Voyageur On CallTM--allows
you 24-hour access, seven days a week to an automated voice response service
with shareholder services representatives available from 8 a.m. to 5 p.m.
Central Standard Time.
We appreciate your continued patronage of Voyageur Funds and look forward to
working with you and your financial advisors in creating products and services
designed to bring you closer to your investment goals.
Sincerely,
/s/ John G. Taft
John G. Taft
President
Voyageur Aggressive Growth Fund
Voyageur Growth and Income Fund
Voyageur Growth Stock Fund
Voyageur International Equity Fund
(1) Stocks, Bonds, Bills
and Inflation 1996
Yearbook, Ibbotson
Associates, Inc.
VOYAGEUR AGGRESSIVE GROWTH FUND
[PHOTO]
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.
* Past performance is no guarantee of future results. Investment return and
principal value will fluctuate.
For the fiscal year ended April 30, 1996, the Voyageur Aggressive Growth Stock
Fund's total return at NAV was 31.02% for Class A Shares compared to the S&P 500
performance of 30.23% for the same period.* During the Fund's fiscal year, we
continued to use our research capabilities to assist us in identifying areas in
the market that we believe will perform favorably in the current and projected
economic environment. The Fund's investment strategy has been to invest in a
combination of large- and mid-cap growth companies. The holdings are diversified
across different sectors with a strong focus on companies from the electronic
technology sector.
During the Fund's fiscal year, we increased the Fund's holdings in the
technology sector to approximately 55% of the Fund's total assets. Within the
technology sector, the Fund's holdings in semiconductor companies were a driving
force behind the Fund's excellent performance from May through September 1995.
However, during the Fall, a deteriorating environment for the semiconductor area
pulled the Fund's overall performance down. This caused us to reduce, and
finally eliminate, our exposure to semiconductor companies. We then invested the
proceeds from these sales in companies in other areas of technology -- areas
that rebounded strongly after the correction.
TECHNOLOGY: A MARKET SECTOR OF OPPORTUNITY
We see a bright opportunity with a focus for applying technology in three areas:
1) telecommunications and networking equipment, 2) software and information
services, and 3) health care. The opportunities in these areas are as described
below.
OPENING THE LINES OF COMMUNICATIONS
In today's competitive world, companies don't have to be huge, established
businesses in order to survive. What they have to be is technologically
advanced. This is especially true in the telecommunications industry where
federal deregulation is forcing companies to be more competitive. In an
environment where better, faster and cheaper service is the rule,
state-of-theart equipment can make or break a telecommunications company. Also,
as more people are choosing to surf the Internet, networking equipment is
becoming increasingly important in order to provide the additional lines needed
to relieve congestion and open access.
That's why our research shows companies in telecommunications and networking
systems equipment are among the fastest growing areas in the technology market.
These companies -- which include Cascade Communications, Cisco Systems, U.S.
Robotics and Shiva -- are responsible for strengthening the backbone of the
Internet and honing the technological edge of telecommunications.
TODAY'S TOOLS OF THE TRADE
Access to information means little if you don't have the tools needed to
retrieve and manipulate data into a usable form. That's why companies in the
software information and technology services area -- such as Cambridge
Technology, Dendrite and the Gartner Group -- provide such a valuable service.
They allow companies that lack the systems expertise and resources they need to
enhance their daily operations and increase sales. These companies in the
software information and technology services do more than just design systems,
they provide ongoing consulting services to support these systems, thereby
generating ongoing revenue.
A PRESCRIPTION FOR BETTER HEALTH CARE
One area in the health care sector where we increased the Fund's exposure during
its fiscal year was in physician practice management. Traditionally physician
practices have been a fragmented business, with four or five doctors pulling
together to pool their services. In addition to providing physicians services,
these doctors are ultimately responsible for the management of their practice.
Physician practice management companies allow physicians to focus on what they
were trained to do -- provide medical services. These companies will recruit,
pay and manage personnel as well as generate patient billing. They also allow
physicians to have access to systems and technology that they may not have
normally been able to afford. Since physician practice management companies
represent a number of individual practices, they also offer the additional
benefit of a massive negotiating power with HMOs and insurance companies.
ECONOMIC OUTLOOK
Our forecast for stable to declining interest rates, steady economic growth and
low inflation should provide a favorable environment for the stock market.
During the next year, we will continue to use our research to identify new areas
of investment opportunity.
[LINE GRAPH]
<TABLE>
<CAPTION>
Date Growth of S&P/A Growth of S&P/C Aggr. Grow/A Load Aggr. Grow/A No Load Aggr. Grow/C
- ---- --------------- --------------- ----------------- -------------------- ------------
<S> <C> <C> <C> <C> <C>
$10,000 $10,000 $9,525 $10,000 $10,000
5/31/94 $10,079 $10,058 $9,449 $9,920 $9,920
6/30/94 $9,830 $9,809 $8,782 $9,220 $9,210
7/31/94 $10,155 $10,134 $8,830 $9,270 $9,250
8/31/94 $10,568 $10,546 $9,754 $10,240 $10,220
9/30/94 $10,313 $10,291 $9,649 $10,130 $10,100
10/31/94 $10,549 $10,527 $10,020 $10,520 $10,480
11/30/94 $10,162 $10,140 $9,544 $10,020 $9,980
12/31/94 $10,310 $10,288 $9,430 $9,900 $9,850
1/31/95 $10,578 $10,556 $9,058 $9,510 $9,460
2/28/95 $10,989 $10,966 $9,411 $9,880 $9,820
3/31/95 $11,314 $11,290 $9,849 $10,340 $10,280
4/30/95 $11,646 $11,621 $9,906 $10,400 $10,330
5/31/95 $12,106 $12,081 $10,182 $10,690 $10,610
6/30/95 $12,391 $12,365 $10,849 $11,390 $11,290
7/31/95 $12,804 $12,777 $11,659 $12,240 $12,130
8/31/95 $12,838 $12,812 $11,678 $12,260 $12,140
9/30/95 $13,378 $13,350 $12,335 $12,950 $12,820
10/31/95 $13,330 $13,302 $11,640 $12,220 $12,080
11/30/95 $13,917 $13,888 $12,125 $12,730 $12,580
12/31/95 $14,174 $14,145 $11,699 $12,282 $12,132
1/31/96 $14,663 $14,632 $11,639 $12,220 $12,059
2/29/96 $14,804 $14,773 $12,185 $12,793 $12,622
3/31/96 $14,945 $14,914 $12,979 $12,511 $12,330
4/30/96 $15,166 $15,134 $12,979 $13,626 $13,425
</TABLE>
TOTAL RETURNS
Class A Shares Class B Class C Shares
--------------------- Shares ---------------------
----------
Since Since Since
1 Year 5/16/94 ** 4/16/96 ** 1 Year 5/20/94 **
------ ---------- ---------- ------ ----------
Without 31.02% 17.13% 9.66% 29.96% 16.27%
Sales Charge
With Sales 24.80%* 14.26%* 5.66%*** 25.96%*** 14.49%***
Charge
The performance of separate 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, 1996.
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 AND INCOME FUND
SEGALL, BRYANT & HAMILL INVESTMENT COUNSEL is sub-advisor to and has day-to-day
portfolio management responsibility for the Voyageur Growth and Income Fund.
Ralph M. Segall is the Portfolio Manager for the Voyageur Growth and Income
Fund.
* Past performance is no guarantee of future results. Investment return and
principal value will fluctuate.
Since the Fund's inception on September 7, 1995 until April 30, 1996 the
Voyageur Growth and Income Fund's total return at NAV was 12.64% for Class A
Shares compared to the S&P 500 performance of 17% for the same period.* The
reason for the Fund's lag in performance during this reporting period can be
pinpointed to the following: 1) the Fund's position in U.S. Treasury securities
and 2) its holdings in cash.
In the Voyageur Growth and Income Fund, a small portion of the Fund's total
assets -- up to 35% -- may be invested in debt securities, such as corporate and
government bonds. Currently, 12.4% of the Fund's total holdings are invested in
U.S. Treasury securities. These securities are an excellent source of income and
help increase income distributions in an environment of low dividend yields
(dividend divided by stock price = dividend yield). Although bond market returns
during 1996 have been disappointing, we believe U.S. Treasury securities offer
good potential in the declining interest rate environment we are forecasting.
On April 30, 1996, 16.8% of the Fund's total assets were in cash -- a position
that was a portfolio management decision. In the current soaring market, stocks
have been, for the most part, anything but cheap. This has caused us difficulty
in finding stocks that fit our Fund's investment guidelines at prices we were
willing to pay. We do anticipate reducing our cash holding during the course of
next year by adding to the Fund's equity investments.
A GROWTH IN INCOME APPROACH
Our philosophy for selecting stocks in the Voyageur Growth and Income Fund is to
invest in companies that we believe will achieve profitable growth. In order to
identify these companies, we search for companies that have demonstrated strong
or improving return on investment (ROI) over an extended period of time. ROI is
calculated by dividing total capital -- its common and preferred stock equity
plus its long-term funded debt -- into earnings before interest, taxes and
dividends. As a measure of a company's management, operational efficiency and
profitability, we believe companies with superior ROI will, over time,
demonstrate above average earnings and dividend growth, thereby leading to an
appreciation in their stock prices.
From these companies, we use our in-depth research and analysis to identify
companies that are committed to building long-tern shareholder value through the
effective use of corporate assets. Companies within your portfolio include such
common household names as Duracell, General Electric, General Motors and
Mitsubishi.
In addition to common stocks, we may also purchase convertible securities for
the Fund. Convertible securities in certain circumstances can offer the best of
stocks and bonds. Convertible securities are corporate debt issues where the
holders of the securities can -- at their option -- exchange for a set number of
common shares at a predetermined price. Since they are debt securities, they
offer investors regular income higher than generated by the common stock.
Because of their ability to be exchanged into common stock shares, they offer
investors a greater appreciation potential than regular bonds.
ECONOMIC OUTLOOK
We will continue to look for securities to add to the Fund's portfolios during
the upcoming year. Although our pace will be cautious given our concern over the
stock market's price valuation levels, our primary focus will be to search for
midcapitalization companies. During the next few years, we believe these
midcapitalization companies will see a boost in prices, as investors conclude
that largecapitalization stocks are fully valued relative to their growth
prospects.
[LINE GRAPH]
<TABLE>
<CAPTION>
Date S&P/A S&P/B G&I/Load G&I/No Load G&I/B
- ---- ----- ----- -------- ----------- -----
<S> <C> <C> <C> <C> <C>
10000 9,525.00 10,000.00
9/30/95 10320.37288 9,505.95 9,980.00
10/31/95 10283.94196 9,420.23 9,890.00
11/30/95 10736.64109 10000 9,829.80 10,320.00 10,000.00
12/31/95 10935.16158 10017.75 10,232.87 10,743.17 10,075.19
1/31/96 11311.76855 10362.76 10,261.50 10,773.23 10,093.98
2/29/96 11420.47464 10462.34 10,309.23 10,823.34 10,140.98
3/31/96 11529.88279 10562.57 10,461.96 10,983.69 10,291.35
4/30/96 11699.71797 10718.16 10,729.24 11,264.29 10,535.71
</TABLE>
TOTAL RETURNS
Class A Shares Class B Shares
Since 9/7/95** Since 12/28/95**
-------------- ----------------
Without Sales Charge 12.64% 5.36%
With Sales Charge*** 7.29% 1.36%
The performance of separate 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, 1996.
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
[PHOTO]
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.
*Past performance is no guarantee of future results. Investment return and
principal value will fluctuate.
For the fiscal year ended April 30, 1996, the Voyageur Growth Stock Fund's total
return at NAV was 25.00% for Class A Shares compared to the Wilshire Large Cap
Growth Index performance of 33.28% for the same period.* The Fund's performance
during its fiscal year is representative of its strategy -- dampening extreme
market moves in either direction in order to provide shareholders with more
consistent earnings and growth potential.
In order to provide consistent long-term results over business cycles, the Fund
invests in only the highest quality companies -- companies rated A+ or A by
Standard & Poor's. From the more than 250 A+ or A rated companies, we then
select no more than 30 companies. These high quality companies have
traditionally exhibited consistently superior earnings and long-term growth
potential.
Since we want to participate in long-term earnings and dividend growth, the Fund
purchases companies that our research indicates are at the low end of their
historical price valuation and hold them until they reach their highs. We
typically hold positions in the Fund for approximately three to five years
resulting in a low turnover rate in the Fund.
MIXED MARKET MESSAGES
The Fund performed favorably for most of its fiscal year amid heightened
investor perception that a recession was on its way. The reason for this was
that largecapitalization stocks, such as the ones held in your Fund,
outperformed the small-capitalization stocks as investors looked for ways to
reduce their risk. In the large-capitalization stocks, health care and food
companies -- two areas emphasized in the Fund -- also performed extremely well.
After the release of a stronger-thenexpected March employment report dispelled
recession fears, small capitalization stocks took the lead in the markets with
consumer cyclical and technology stocks now the front runners. Consumer cyclical
and technology stocks are two areas that the Fund has traditionally
underweighted. Companies within these areas have not, for the most part, proven
to be consistently strong earnings generators. Instead, they tend to be more
cyclical -- following economic ups and downs.
BUYING LOW, SELLING HIGH: MAINTAINING A DEFENSIVE STRATEGY
Currently, we are escalating our defensive position in the Fund in an attempt to
avoid being caught in a market downturn. In order to do this, we lower the
Fund's overall price per earnings (P/E) ratio -- a ratio that is calculated by
dividing a stock's current price by its trailing 12 months' earnings per share.
In order to lower the Fund's overall P/E, we sell companies that our research
shows have reached the high end of their historical price valuations. We then
replace them with companies that are temporarily out of favor and selling at
historical lows, but which have demonstrated an ability to survive down markets
without any major earnings swings.
One good example of this strategy is our past and current positions in Wal-Mart.
In 1993, we sold Wal-Mart when it reached the high end of its price valuation at
$34 per share and was trading at 38 times earnings. In December 1995, we
purchased WalMart stock once again, when it was selling at $23 per share and
trading at 19 times earnings.
The reason for this drop in stock prices was due to investor concerns about the
weak retail market and Wal-Mart's growth potential. We believe these concerns
are temporary and expect to see strong retailers to survive. By investing in
Wal-Mart at its price low, we limit the Fund's downside risk and believe our
shareholders will be rewarded. In our opinion, Wal-Mart is a company with a
strong balance sheet and strong long-term earnings prospects. Its management and
established inventory and distribution systems are among the best in the world.
AVOIDING A CRYSTAL BALL APPROACH TO INVESTING
We firmly believe adherence to quality investing will be rewarded over the long
term, a point well illustrated by the Fund's historical performance. By
maintaining a highly disciplined investment approach, we avoid having to make
bets on what will happen next in an almost unpredictable economic and market
environment. Instead, we choose to invest in high-quality companies that tend to
provide consistent earnings streams through the many different market cycles.
[LINE GRAPH]
<TABLE>
<CAPTION>
Date Wilshire/A Wilshire/B Wilshire/C Growth/A Load Growth A/No Load Growth B Growth C
- ---- ---------- ---------- ---------- ------------- ---------------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$10,000 9,525.00 10,000.00
8/31/85 $9,898 9,576.12 10,053.67
9/30/85 $9,536 9,614.23 10,093.68
10/31/85 $9,951 9,747.63 10,233.73
11/30/85 $10,763 10,147.25 10,653.29
12/31/85 $11,313 10,501.45 11,025.15
1/31/86 $11,326 10,937.30 11,482.73
2/28/86 $12,147 11,679.96 12,262.43
3/31/86 $12,876 12,499.78 13,123.13
4/30/86 $12,882 12,885.57 13,528.16
5/31/86 $13,604 13,801.84 14,490.12
6/30/86 $13,884 14,387.50 15,104.99
7/31/86 $13,023 13,156.22 13,812.31
8/31/86 $13,671 13,902.75 14,596.06
9/30/86 $12,268 12,816.90 13,456.06
10/31/86 $13,110 13,834.88 14,524.81
11/30/86 $13,368 13,708.84 14,392.49
12/31/86 $13,062 14,057.87 14,758.92
1/31/87 $14,922 15,909.63 16,703.02
2/28/87 $15,862 15,929.02 16,723.38
3/31/87 $16,077 17,053.65 17,904.09
4/30/87 $15,663 16,927.61 17,771.77
5/31/87 $15,816 17,228.16 18,087.31
6/30/87 $16,737 17,732.30 18,616.59
7/31/87 $17,579 17,974.68 18,871.06
8/31/87 $18,419 18,915.10 19,858.38
9/30/87 $17,944 18,604.86 19,532.66
10/31/87 $13,822 14,348.72 15,064.27
11/30/87 $12,603 13,340.43 14,005.70
12/31/87 $13,680 15,159.75 15,915.75
1/31/88 $14,148 14,940.77 15,685.85
2/29/88 $15,001 15,607.68 16,386.01
3/31/88 $14,529 15,717.17 16,500.97
4/30/88 $14,468 16,025.74 16,824.92
5/31/88 $14,401 15,587.77 16,365.11
6/30/88 $15,144 16,613.02 17,441.49
7/31/88 $15,023 16,165.09 16,971.23
8/31/88 $14,609 15,538.00 16,312.86
9/30/88 $15,475 16,314.40 17,127.98
10/31/88 $15,722 16,254.68 17,065.28
11/30/88 $15,432 15,786.85 16,574.12
12/31/88 $15,760 16,770.39 17,606.71
1/31/89 $16,800 17,709.85 18,593.02
2/28/89 $16,399 17,479.98 18,351.69
3/31/89 $16,940 17,959.71 18,855.34
4/30/89 $17,909 19,378.89 20,345.30
5/31/89 $18,903 20,078.49 21,079.78
6/30/89 $18,733 19,169.02 20,124.95
7/31/89 $20,814 20,218.41 21,226.68
8/31/89 $21,016 20,948.00 21,992.65
9/30/89 $20,972 21,747.54 22,832.06
10/31/89 $20,645 21,277.81 22,338.90
11/30/89 $21,089 21,817.50 22,905.51
12/31/89 $21,310 21,660.59 22,740.77
1/31/90 $19,731 19,790.30 20,777.21
2/28/90 $19,774 20,562.33 21,587.75
3/31/90 $20,577 21,356.12 22,421.12
4/30/90 $20,297 20,497.09 21,519.26
5/31/90 $22,528 23,091.23 24,242.76
6/30/90 $22,762 23,539.84 24,713.74
7/31/90 $22,496 21,934.31 23,028.15
8/31/90 $20,312 19,490.61 20,462.58
9/30/90 $18,957 18,310.07 19,223.17
10/31/90 $18,843 18,073.97 18,975.29
11/30/90 $20,415 19,396.16 20,363.43
12/31/90 $21,382 20,222.54 21,231.01
1/31/91 $22,836 21,574.96 22,650.88
2/28/91 $24,759 23,667.39 24,847.65
3/31/91 $25,853 24,739.12 25,972.83
4/30/91 $25,797 24,700.84 25,932.64
5/31/91 $27,068 26,295.68 27,607.01
6/30/91 $25,772 25,274.98 26,535.41
7/31/91 $27,102 26,946.37 28,290.15
8/31/91 $28,113 28,132.93 29,535.88
9/30/91 $27,446 27,928.79 29,321.56
10/31/91 $27,740 29,153.63 30,607.48
11/30/91 $27,260 28,247.76 29,656.44
12/31/91 $31,352 31,943.09 33,536.06
1/31/92 $30,834 30,863.76 32,402.90
2/29/92 $31,121 30,902.31 32,443.37
3/31/92 $30,296 30,336.94 31,849.81
4/30/92 $30,369 30,593.93 32,119.61
5/31/92 $30,548 30,592.92 32,118.55
6/30/92 $29,681 30,331.74 31,844.35
7/31/92 $30,883 31,115.28 32,666.96
8/31/92 $30,481 30,679.98 32,209.95
9/30/92 $30,997 31,324.23 32,886.33
10/31/92 $31,616 32,020.71 33,617.54
11/30/92 $33,014 33,570.38 35,244.49
12/31/92 $33,212 33,792.81 35,478.02
1/31/93 $32,860 33,147.65 35,056.97
2/28/93 $32,370 32,851.22 34,489.47
3/31/93 $32,785 32,920.97 34,562.69
4/30/93 $30,952 31,055.21 32,603.90
5/31/93 $32,085 31,770.13 33,354.46
6/30/93 $31,671 30,968.03 32,512.36
7/31/93 $30,803 30,636.73 32,164.54
8/31/93 $31,924 31,526.01 33,098.17
9/30/93 $31,717 31,334.20 32,896.80
10/31/93 $32,589 31,857.31 33,446.00
11/30/93 $32,697 32,188.61 33,793.82
12/31/93 $33,033 32,198.74 33,804.46
1/31/94 $33,694 32,657.47 34,286.05
2/28/94 $33,344 31,845.88 33,434.00
3/31/94 $31,770 30,628.50 32,155.91
4/30/94 $32,014 30,893.15 32,433.75
5/31/94 $32,421 31,228.37 32,785.69
6/30/94 $31,377 30,205.07 31,711.36
7/31/94 $32,284 30,857.86 32,396.71
8/31/94 $34,089 32,022.31 33,619.23
9/30/94 $33,478 31,598.88 33,174.67
10/31/94 $34,422 32,163.46 33,767.41
11/30/94 $33,576 31,510.66 33,082.06
12/31/94 $34,016 32,126.67 33,728.79
1/31/95 $34,982 33,434.26 35,101.58
2/28/95 $36,251 34,560.23 36,283.71
3/31/95 $37,310 35,322.99 37,084.51
4/30/95 $38,149 36,158.39 37,961.57
5/31/95 $39,626 37,502.30 39,372.50
6/30/95 $41,183 38,028.97 39,925.43
7/31/95 $42,447 39,118.62 41,069.42
8/31/95 $42,549 $10,000 38,700.92 40,630.89 10,000.00
9/30/95 $44,907 $10,403 $10,000 40,462.53 42,480.35 10,286.51 10,000.00
10/31/95 $45,198 $10,471 $10,015 40,571.50 42,594.75 10,304.99 9,928.89
11/30/95 $46,943 $10,875 $10,401 41,860.92 43,948.48 10,628.47 10,240.00
12/31/95 $46,901 $10,865 $10,392 42,447.92 44,564.74 10,772.40 10,380.91
1/31/96 $48,692 $11,280 $10,789 43,135.64 45,286.76 10,938.65 10,540.90
2/29/96 $49,496 $11,467 $10,967 44,358.27 46,570.36 11,241.83 10,837.37
3/31/96 $49,659 $11,504 $11,003 44,683.02 46,911.31 11,315.17 10,907.95
4/30/96 $50,841 $11,778 $11,265 45,198.82 47,452.83 11,437.42 11,025.60
</TABLE>
Total Returns
Class A Shares Class B Shares Class C Shares
------------------------------- --------- ----------
Since Since Since
1 Year 5 Year 8/1/85** 9/8/95** 10/24/95**
------ ------ -------- -------- ----------
Without Sales 25.00% 12.85% 15.59% 14.37% 9.72%
Charge
With Sales 19.06%* 11.75%* 15.06%* 10.37*** 5.72%***
Charge
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.
*** Assumes redemption on April 30, 1996.
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
MURRAY JOHNSTONE INTERNATIONAL, LTD., is sub-advisor to and has day-to-day
portfolio management responsibility for the Voyageur International Equity Fund.
Murray Johnstone International, an international money manager since 1907, is
based in Glasgow, Scotland.
* Past performance is no guarantee of future results. Investment return and
principal value will fluctuate.
For the fiscal year ended April 30, 1996, the Voyageur International Equity
Fund's total return at NAV was 10.74% compared to the EAFE performance of
11.7% for the same period.*
The thrust of our investment strategy during the Fund's fiscal year was to trim
back the Fund's exposure in the European markets. We increased our assets in
investments in Japan and the Far East, regions that our research identified as
demonstrating higher growth potential. We continued this theme in our individual
investments in Europe. We turned away from the core markets of the Netherlands
and Germany toward the peripheral markets of Italy and Spain, countries where we
were seeing signs of stronger economic growth.
SLOWING DOWN THE ECONOMIC PACE
Throughout the year, equity markets on both sides of the Atlantic continued to
respond to moderating economic growth. The increase in U.S. interest rates
during 1994 slowed economic activity in 1995, causing a decrease in housing
starts and weaker auto sales. As the year progressed, inventories began to
accumulate, resulting in the disappointing 0.5% December growth rate for the
U.S. Gross Domestic Product.
This weaker demand in the United States coincided with the slowdown in
continental Europe, where manufacturing stalled under the pressure of high real
interest rates and overvalued exchange rates. In other regions, with the
exception of Japan, the story was the same: growth was slowing, inflation was
flat to down and interest rates were falling.
The Search for Higher Returns Against this backdrop, cash flowed into the
financial markets as investors began to search for higher returns. Through most
of 1995, the U.S. mutual fund industry saw a substantial increase in cash
inflows as it became the primary haven for most investors. However late in 1995,
U.S. funds began to diversify their assets into international markets, leading
to impressive rises particularly in the Far East, where the Fund is
overweighted.
The Fund also benefitted from its overweighting in Italy. The markets applauded
the results of the early 1996 Italian election, which placed the power in a
government expected to further improve economic stability. Telecom Italia
Mobilia (TIM) and the textile company, Mazotto & Figli, contributed to the
Fund's excellent performance. Positioned to benefit from the rapid growth of the
Italian cellular phone network, TIM is a large, liquid stock, attractive to
foreign investors seeking exposure to the market. Mazotta & Figli is a supplier
to clothing manufacturer Hugo Boss. After an extensive restructuring that
included replacing management, Hugo Boss's sales finally turned around,
increasing the company's demand on its supplier.
ON THE ROAD TO RECOVERY
Following several years of recession, the Japanese economy began to respond to
the easier monetary and fiscal environment in 1995. This improvement in the
economy signaled a rise in corporate profits across a broad spectrum of domestic
and export-oriented industries. In September, the recovery gained speed when the
yen retreated to a 100-yen position against the dollar after the settlement of a
trade dispute with the United States. The combination of these factors led to
heavy international buying of Japanese stocks, causing a 4.2% advanced in
dollars during the year.
Latin American markets were slow to regain their composure after the devaluation
of the Mexican peso in late 1994. However, we believed expectations for the
region were low and thought it was clear that positive inflation and GDP
surprises were on their way. As we expected, the markets began to reflect the
more optimistic outlook in the beginning of 1996.
With stability returning to the Latin American markets we increased the Fund's
exposure to Mexico and Argentina. In the case of Mexico, the move proved to be
premature since the peso's weakness throughout 1995 unfortunately offset any
stock market recovery in the local currency. The strongest surge in Mexico came
in January 1996, in response to cash flows back into the region. In Argentina,
however, authorities were able to maintain stability in both the inflation and
the exchange rates, allowing a strong performance in its stock market.
ECONOMIC OUTLOOK
We believe the continuation of low growth and low inflation forecasted for the
remainder of 1996 should create a positive environment for the equity markets.
As investors begin to seek ways to diversify their portfolios, we expect to see
liquidity -- the principal force behind the 1995 U.S. market rise -- to favor
the international markets, although at a much more modest rate than in 1995.
Effective May 14, 1996, the Fund's Board of Directors approved Voyageur
International Asset Management as sub-advisor replacing Murray Johnstone
International. Murray Johnstone will continue to act as the Fund's sub-advisor
until such time as sub-advisory arrangements with Voyageur International are
approved by Fund shareholders at a meeting to be called by the Board of
Directors.
[LINE GRAPH]
<TABLE>
<CAPTION>
EAFE/A EAFE/B EAFE/C Int'l A/Load Int'l A/No Load Int'l B Int'l C
------ ------ ------ ------------ --------------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
$10,000 $10,000 9,525.00 10,000.00 10,000.00
5/31/94 $9,972 $9,980 9,372.60 9,840.00 9,829.83
6/30/94 $10,113 $10,121 9,201.15 9,660.00 9,639.64
7/31/94 $10,210 $10,218 9,372.60 9,840.00 9,809.81
8/31/94 $10,452 $10,460 9,648.83 10,130.00 10,100.10
9/30/94 $10,123 $10,130 9,429.75 9,900.00 9,879.88
10/31/94 $10,460 $10,468 9,505.95 9,980.00 9,949.95
11/30/94 $9,957 $9,965 8,982.08 9,430.00 9,379.38
12/31/94 $10,020 $10,027 8,667.75 9,100.00 9,049.05
1/31/95 $9,635 $9,642 8,324.85 8,740.00 8,678.68
2/28/95 $9,607 $9,614 8,315.33 8,730.00 8,658.66
3/31/95 $10,206 $10,214 8,715.38 9,150.00 9,089.09
4/30/95 $10,590 $10,598 8,972.55 9,420.00 9,369.37
5/31/95 $10,464 $10,472 9,067.80 9,520.00 9,459.46
6/30/95 $10,280 $10,288 8,934.45 9,380.00 9,319.32
7/31/95 $10,920 $10,929 9,286.88 9,750.00 9,679.68
8/31/95 $10,504 $10,512 8,991.60 9,440.00 9,369.37
9/30/95 $10,709 $10,717 9,067.80 9,520.00 9,439.44
10/31/95 $10,421 $10,429 8,858.25 9,300.00 9,219.22
11/30/95 $10,711 $10,719 9,105.90 9,560.00 9,469.47
12/31/95 $11,143 $10,000 $11,151 9,458.65 9,930.35 10,000.00 9,829.83
1/31/96 $11,189 $10,020 $11,197 9,601.82 10,080.65 10,090.27 9,969.97
2/29/96 $11,226 $10,054 $11,235 9,573.19 10,050.59 10,060.18 9,929.93
3/31/96 $11,465 $10,267 $11,473 9,697.27 10,180.86 10,180.54 10,060.06
4/30/96 $11,798 $10,566 $11,807 9,935.88 10,431.37 10,431.29 10,300.30
</TABLE>
TOTAL RETURNS
Class A Shares Class B Shares Class C Shares
------------------- -------------- --------------------
Since Since Since
1 Year 5/16/94** 1/16/96** 1 Year 5/20/94**
------ --------- --------- ------ ---------
Without Sales 10.74% 2.17% 4.31% 9.94% 1.53%
Charge
With Sales 5.48% (0.33)% 0.31% 5.94% (0.51)%
Charge***
The performance of separate 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, 1996.
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, transactions 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 and Income Fund, Voyageur Growth Stock Fund and
Voyageur International Equity Fund (funds within Voyageur Mutual Funds III,
Inc.) as of April 30, 1996, and the related statements of operations for the
year then ended (period from September 7, 1995, commencement of operations, to
April 30, 1996 for Voyageur Growth and Income Fund), the statements of changes
in net assets for each of the years in the two-year period ended April 30, 1996
for Voyageur Growth Stock Fund, year ended April 30, 1996 and the period from
May 16, 1994, commencement of operations, to April 30, 1995 for Voyageur
Aggressive Growth Fund and Voyageur International Equity Fund, and period from
September 7, 1995 to April 30, 1996 for Voyageur Growth and Income Fund and the
financial highlights for the periods presented in note 5. 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 and Income Fund, Voyageur Growth Stock Fund and Voyageur
International Equity Fund, at April 30, 1996 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 14, 1996
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF ASSETS AND LIABILITIES APRIL 30, 1996
- --------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR
AGGRESSIVE GROWTH AND
GROWTH FUND INCOME FUND
----------- -----------
ASSETS
<S> <C> <C>
Investments in securities, at market value (note 1)
(identified costs: $3,335,886, $2,906,106, $22,256,741 and
$2,365,800, respectively)............................................. $4,316,778 $3,208,478
Cash in bank on demand deposit (including foreign currency of
$6,288 for the International Equity Fund)............................... 43,390 672,213
Dividends and interest receivable.......................................... 1,897 13,006
Receivable for investment securities sold.................................. 116,350 49,019
Receivable for Fund shares sold............................................ -- 28,581
Organizational costs (note 1).............................................. 14,957 27,651
---------- ----------
Total assets............................................................ 4,493,372 3,998,948
---------- ----------
LIABILITIES
Payable for investment securities purchased................................ -- 10,000
Payable for fund shares redeemed........................................... -- --
Accrued expenses........................................................... 9,020 15,392
---------- ----------
Total liabilities....................................................... 9,020 25,392
---------- ----------
NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL STOCK......................... $4,484,352 $3,973,556
========== ==========
Represented by:
Capital Stock - $.01 par value (note 1)................................ $ 3,430 $ 3,535
Additional paid-in capital.............................................. 3,555,933 3,584,725
Undistributed net investment income..................................... 4,223 4,494
Accumulated net realized gain (loss) on investments and
foreign currency transactions......................................... (60,126) 78,430
Unrealized appreciation on investments and translation of
assets and liabilities in foreign currencies.......................... 980,892 302,372
---------- ----------
TOTAL NET ASSETS...................................................... $4,484,352 $3,973,556
========== ==========
Net assets applicable to outstanding Class A shares........................ $4,334,167 $3,962,412
========== ==========
Net assets applicable to outstanding Class B shares........................ $328 $11,144
==== =======
Net assets applicable to outstanding Class C shares........................ $149,857 N/A
========
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE
Class A - Shares of capital stock outstanding: 331,381; 352,525;
1,223,980 and 268,131, respectively (note 4).......................... $13.08 $11.24
====== ======
Class B - Shares of capital stock outstanding: 25; 994;
19,405 and 2,287, respectively (note 4)............................... $13.06 $11.21
====== ======
Class C - Shares of capital stock outstanding: 11,633; N/A;
4,443 and 2,850, respectively (note 4)................................ $12.88 N/A
======
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF ASSETS AND LIABILITIES APRIL 30, 1996
- -------------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR
GROWTH INTERNATIONAL
STOCK FUND EQUITY FUND
---------- -----------
ASSETS
<S> <C> <C>
Investments in securities, at market value (note 1)
(identified costs: $3,335,886, $2,906,106, $22,256,741 and
$2,365,800, respectively)............................................. $28,714,250 $2,563,690
Cash in bank on demand deposit (including foreign currency of 1,462,760 279,008
$6,288 for the International Equity Fund)............................... 28,480 12,003
Dividends and interest receivable.......................................... -- --
Receivable for investment securities sold.................................. -- --
Receivable for Fund shares sold............................................ -- 22,001
Organizational costs (note 1).............................................. ----------- ----------
30,205,490 2,876,702
Total assets............................................................ ----------- ----------
LIABILITIES
Payable for investment securities purchased................................ 662,770 17,274
Payable for fund shares redeemed........................................... 892 --
Accrued expenses........................................................... 27,313 13,948
----------- ----------
Total liabilities....................................................... 690,975 31,222
----------- ----------
NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL STOCK......................... $29,514,515 $2,845,480
=========== ==========
Represented by:
Capital Stock - $.01 par value (note 1)................................
Additional paid-in capital.............................................. $ 12,478 $ 2,733
Undistributed net investment income..................................... 22,126,690 2,643,439
Accumulated net realized gain (loss) on investments and 7,841 6,212
foreign currency transactions.........................................
Unrealized appreciation on investments and translation of 909,997 (4,609)
assets and liabilities in foreign currencies..........................
6,457,509 197,705
TOTAL NET ASSETS...................................................... ----------- ----------
Net assets applicable to outstanding Class A shares........................ $29,514,515 $2,845,480
=========== ==========
Net assets applicable to outstanding Class B shares........................
$28,956,425 $2,792,376
Net assets applicable to outstanding Class C shares........................ =========== ==========
$453,968 $23,777
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE ======== =======
Class A - Shares of capital stock outstanding: 331,381; 352,525; $104,122 $29,327
1,223,980 and 268,131, respectively (note 4).......................... ======== =======
Class B - Shares of capital stock outstanding: 25; 994; $23.66 $10.41
19,405 and 2,287, respectively (note 4)............................... ====== ======
Class C - Shares of capital stock outstanding: 11,633; N/A; $23.39 $10.40
4,443 and 2,850, respectively (note 4)................................ ====== ======
$23.43 $10.29
See accompanying notes to financial statements. ====== ======
</TABLE>
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF OPERATIONS APRIL 30, 1996
- --------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR
AGGRESSIVE GROWTH AND
GROWTH FUND INCOME FUND*
----------- ------------
<S> <C> <C>
Investment income:
Dividends (net of foreign taxes withheld of $6,541
for the International Equity Fund).................................... $ 25,662 $ 22,356
Interest................................................................ -- 17,974
-------- --------
Total investment income............................................... 25,662 40,330
-------- --------
Expenses (note 2):
Investment advisory and management fee.................................. 34,256 14,256
Dividend disbursing, administrative and accounting services fees........ 20,406 16,750
Distribution fee - Class A.............................................. 8,033 4,743
Distribution fee - Class B.............................................. -- 36
Distribution fee - Class C.............................................. 1,417 N/A
Printing, postage and supplies.......................................... 410 1,012
Legal fees.............................................................. 1,010 1,859
Custodian fees.......................................................... 9,243 4,932
Compensation of directors............................................... 211 205
Audit and accounting fees............................................... 6,465 6,253
Registration fees....................................................... 11,301 7,920
Amortization of organizational costs.................................... 2,170 4,254
Other expenses.......................................................... 153 562
-------- --------
Total expenses........................................................ 95,075 62,782
Less (note 2):
Expenses waived or absorbed............................................. (25,000) (25,000)
Earnings credits on uninvested cash..................................... (9,243) (4,391)
-------- --------
Total net expenses.................................................... 60,832 33,391
-------- --------
Investment income (loss) - net........................................ (35,170) 6,939
-------- --------
Realized and unrealized gain (loss) on investments and foreign currency - net:
Net realized gain (loss) from:
Investments ........................................................ 217,654 78,430
Foreign currency transactions....................................... -- --
Net increase (decrease) in unrealized appreciation on:
Investments......................................................... 716,738 302,372
Translation of other assets and liabilities in foreign currencies... -- --
-------- --------
Net gain on investments and foreign currency.......................... 934,392 380,802
-------- --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....................... $899,222 $387,741
======== ========
* Period from September 7, 1995 (commencement of operations) to April 30, 1996.
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENT OF OPERATIONS PERIOD ENDED APRIL 30, 1996
- ---------------------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR
GROWTH INTERNATIONAL
STOCK FUND EQUITY FUND
---------- -----------
<S> <C> <C>
Investment income:
Dividends (net of foreign taxes withheld of $6,541
for the International Equity Fund).................................... $ 532,590 $ 48,276
Interest................................................................ 8,787 --
---------- --------
Total investment income............................................... 541,377 48,276
---------- --------
Expenses (note 2):
Investment advisory and management fee..................................
Dividend disbursing, administrative and accounting services fees........ 222,957 23,307
Distribution fee - Class A.............................................. 79,034 50,336
Distribution fee - Class B.............................................. 112,282 5,720
Distribution fee - Class C.............................................. 1,442 66
Printing, postage and supplies.......................................... 281 239
Legal fees.............................................................. 9,593 553
Custodian fees.......................................................... 9,065 519
Compensation of directors............................................... 15,998 16,986
Audit and accounting fees............................................... 1,657 127
Registration fees....................................................... 14,686 8,042
Amortization of organizational costs.................................... 20,135 17,004
Other expenses.......................................................... -- 3,192
303 146
Total expenses........................................................ ---------- --------
Less (note 2): 487,433 126,237
Expenses waived or absorbed.............................................
Earnings credits on uninvested cash..................................... (25,000) (70,000)
(13,734) (9,424)
Total net expenses.................................................... ---------- --------
448,699 46,813
Investment income (loss) - net........................................ ---------- --------
92,678 1,463
Realized and unrealized gain (loss) on investments and foreign currency - net: ---------- --------
Net realized gain (loss) from:
Investments ........................................................
Foreign currency transactions.......................................
Net increase (decrease) in unrealized appreciation on:
Investments......................................................... 2,164,698 56,165
Translation of other assets and liabilities in foreign currencies... -- (870)
Net gain on investments and foreign currency.......................... 3,458,567 197,300
-- (466)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....................... ---------- --------
5,623,265 252,129
* Period from September 7, 1995 (commencement of operations) to April 30, 1996. ---------- --------
See accompanying notes to financial statements. $5,715,943 $253,592
========== ========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
VOYAGEUR AGGRESSIVE VOYAGEUR GROWTH AND
GROWTH FUND INCOME FUND
----------- -----------
YEAR PERIOD FROM PERIOD FROM
ENDED MAY 16, 1994* SEPTEMBER 7, 1995*
APRIL 30, TO APRIL 30, TO APRIL 30,
1996 1995 1996
---- ---- ----
Operations:
<S> <C> <C> <C>
Investment income gain (loss) - net..................... $ (35,170) $ (19,985) $ 6,939
Realized gain (loss) on investments - net............... 217,654 (123,173) 78,430
Net change in unrealized appreciation or depreciation
on investments........................................ 716,738 264,154 302,372
---------- ---------- ----------
Net increase in net assets resulting from operations.... 899,222 120,996 387,741
---------- ---------- ----------
Distributions to shareholders from:
Investment income - net:
Class A............................................... -- -- (6,699)
Net realized gain on investments:
Class A............................................... (116,580) -- --
Class C............................................... (4,669) -- N/A
Return of capital:
Class A............................................... (24,621) -- --
Class C............................................... (987) -- N/A
---------- ---------- ----------
Total distributions................................. (146,857) -- (6,699)
---------- ---------- ----------
Capital share transactions (note 4):
Proceeds from sale of shares (note 2):
Class A............................................... 1,916,283 3,249,711 3,798,090
Class B............................................... 310 N/A 10,581
Class C............................................... 14,350 124,305 N/A
Net asset value of shares issued in reinvestment of
net investment income, net realized gain and return of
capital distributions:
Class A........................................... 138,626 -- 6,288
Class B........................................... -- N/A --
Class C........................................... 5,488 -- N/A
Payments for redemption of shares:
Class A............................................... (631,277) (1,176,908) (222,445)
Class B............................................... (26) N/A --
Class C (note 2)...................................... (28,787) (1,084) N/A
---------- ---------- ----------
Increase in net assets from capital share transactions.. 1,414,967 2,196,024 3,592,514
---------- ---------- ----------
Total increase in net assets.......................... 2,167,332 2,317,020 3,973,556
Net assets at beginning of period.......................... 2,317,020 -- --
---------- ---------- ----------
Net assets at end of period (including undistributed net
investment income of $4,223, $2,815,
and $4,494, respectively)............................. $4,484,352 $2,317,020 $3,973,556
========== ========== ==========
- -----------------------------------------
* Commencement of operations
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
- -------------------------------------------------------------------------------------------------------------------
VOYAGEUR GROWTH VOYAGEUR INTERNATIONAL
STOCK FUND EQUITY FUND
---------- -----------
YEAR YEAR YEAR PERIOD FROM
ENDED ENDED ENDED MAY 16, 1994*
APRIL 30, APRIL 30, APRIL 30, TO
1996 1995 1996 APRIL 30, 1995
---- ---- ---- --------------
Operations:
<S> <C> <C> <C> <C>
Investment income gain (loss) - net............... $ 92,678 $ 185,111 $ 1,463 $ (8,937)
Net realized gain (loss) on investments and
foreign currency transactions................... 2,164,698 451,561 55,295 (61,115)
Net change in unrealized appreciation or depreciation
on investments and translation of other assets and
liabilities and in foreign currencies......... 3,458,567 3,009,595 196,834 871
----------- ----------- ---------- ----------
Net increase (decrease) in net assets resulting
from operations................................. 5,715,943 3,646,267 253,952 (69,181)
----------- ----------- ---------- ----------
Distributions to shareholders from:
Investment income - net:
Class A......................................... (119,377) (160,212) (3,259) --
Class B......................................... (2,294) N/A -- N/A
Class C......................................... (385) N/A -- --
Net realized gain on investments:
Class A......................................... (1,184,833) (475,478) -- --
Class B......................................... (10,519) N/A -- N/A
Class C......................................... (1,656) N/A -- --
Return of capital:
Class A......................................... -- -- (1,587) --
----------- ----------- ---------- ----------
Total distributions........................... (1,319,064) (635,690) (4,846) --
----------- ----------- ---------- ----------
Capital share transactions (note 4):
Proceeds from sale of shares (note 2):
Class A......................................... 5,051,319 3,412,884 770,109 3,189,630
Class B......................................... 456,058 N/A 22,812 N/A
Class C......................................... 100,512 N/A 6,646 20,034
Net asset value of shares issued in reinvestment of
net investment income, return of capital and net
realized gain distributions:
Class A..................................... 1,227,276 607,335 4,437 --
Class B..................................... 9,400 N/A -- N/A
Class C..................................... 65 N/A -- --
Payments for redemption of shares:
Class A......................................... (5,356,509) (11,897,870) (236,210) (1,111,533)
Class B......................................... (21,866) N/A (10) N/A
Class C......................................... (23) N/A -- --
----------- ----------- ---------- ----s------
Increase (decrease) in net assets from capital
share transactions.............................. 1,466,232 (7,877,651) 567,784 2,098,131
----------- ----------- ---------- ----------
Total increase (decrease) in net assets....... 5,863,111 (4,867,074) 816,530 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 $7,841, $37,219,
$6,212 and $4,141, respectively)................ $29,514,515 $23,651,404 $2,845,480 $2,028,950
=========== =========== ========== ==========
- -----------------------------------------
*Commencement of operations
See accompanying notes to financial statements.
</TABLE>
THE VOYAGEUR FUNDS
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(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), series 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 seeks to provide shareholders with
long-term capital appreciation by investing in equity securities of companies
having the potential for high earnings growth. Growth and Income Fund's
investment objective is growth of capital. Growth and Income Fund's secondary
objective is current income. Growth and Income Fund seeks to achieve these
objectives by investing in a diversified portfolio of securities including
common stock, preferred stock, bonds, convertible securities, and warrants and
rights to purchase common stock. Growth Stock Fund seeks to provide shareholders
with long-term capital appreciation by investing in equity securities
diversified among individual companies and industries. International Equity Fund
seeks to provide shareholders with a high total return consistent with
reasonable risk by investing primarily in a diversified portfolio of equity
securities of companies located in countries outside the United States and
Canada.
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
may be subject to a contingent deferred sales charge and such shares
automatically convert to Class A after eight years. 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:
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of net increases (decreases) in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
CONCENTRATION OF RISK
Investments in countries with limited or developing capital markets may
involve greater risks than investments in more developed markets and the prices
of such investments are volatile. The consequences of political, social or
economic changes in these markets may have disruptive effects on the market
prices of the Funds' investments and the income it generates, as well as the
Funds' ability to repatriate such amounts.
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. 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 by $36,578, increase accumulated net
realized loss on investments by $7,750 and decrease additional paid-in capital
by $28,828 for Aggressive Growth Fund; increase undistributed net investment
income and decrease additional paid-in capital by $4,254 for Growth and Income
Fund; and to increase undistributed net investment income by $5,454 decrease
accumulated net realized loss on investments by $870 and decrease additional
paid-in capital by $6,324 for International Equity Fund.
For federal income tax purposes, the Aggressive Growth Fund and
International Equity Fund had capital loss carryovers of $51,126, and $4,609,
respectively, at April 30, 1996, that will expire in 2005, 2004 and 2003,
respectively, 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, investment decisions
for the Aggressive Growth Fund Growth Stock Fund are made and executed by
Voyageur which 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% (.50% prior to September
1, 1995 for Growth Stock Fund) 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 made and executed by Segall Bryant and
Hamill. Voyageur pays Segall Bryant and Hamill for their services a sub-advisory
fee equal to .75% of average daily net assets. Investment decisions for the
International Equity Fund are made and executed by Murray Johnstone
International, Ltd. Voyageur pays Murray Johnstone International, Ltd. for their
services a sub-advisory 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 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 had a distribution
fee of .90% of the Fund's average daily net assets of 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 (1.90% prior to September 1, 1995) 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 April 30, 1996, Voyageur absorbed $19 for Aggressive Growth Fund, $6,057
for Growth and Income Fund and $56,842 for International Equity Fund pursuant to
the most restrictive state limitation and voluntarily absorbed $24,981 for
Aggressive Growth Fund, $18,943 for Growth and Income Fund, $25,000 for Growth
Stock Fund and $13,158 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 April 30, 1996 were
$9,243 for Aggressive Growth Fund, $4,391 for Growth and Income Fund, $13,734
for Growth Stock Fund and $9,424 for International Equity Fund.
Sales charges paid by Class A shareholders during the period ended April
30, 1996 were $4,299, $1,481, $44,067 and $9,027 for Aggressive Growth Fund,
Growth and Income Fund, Growth Stock Fund and International Equity Fund,
respectively. Of these amounts, Fund Distributors received $608, $0, $6,662, and
$1,358, espectively. Contingent deferred sales charges paid by Class C
shareholders during the period ended April 30, 1996 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 $6,865,048 and $5,530,303 for Aggressive
Growth Fund, $4,276,728 and $1,449,052 for Growth and Income Fund, $10,086,153
and $9,258,668 for Growth Stock Fund and $2,053,233 and $1,429,083 for
International Equity Fund during the period ended April 30, 1996.
(4) CAPITAL STOCK
Transactions in shares during the periods shown were as follows:
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH FUND
----------------------
CLASS A CLASS B CLASS C
------- ------- -------
YEAR PERIOD FROM PERIOD FROM YEAR PERIOD FROM
ENDED MAY 16, 1994* APRIL 16, 1996* ENDED MAY 20, 1994*
APRIL 30, TO APRIL 30, TO APRIL 30, APRIL 30, TO APRIL 30,
1996 1995 1996 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Shares sold.................... 162,201 335,020 26 1,213 12,449
Shares issued for
reinvested distributions.... 11,759 -- -- 471 --
Shares redeemed................ (53,033) (124,566) (1) (2,392) (108)
--------- ---------- ----- ---------- ---------
Increase (decrease)
in shares outstanding....... 120,927 210,454 25 (708) 12,341
========= ========== ===== ========== ========
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
----------------------
CLASS A CLASS B
------- -------
PERIOD FROM PERIOD FROM
SEPTEMBER 7, 1995* DECEMBER 28, 1995*
TO APRIL 30, TO APRIL 30,
1996 1996
---- ----
<S> <C> <C>
Shares sold.................................... 372,622 994
Shares reinvested.............................. 587 --
Shares redeemed............................... (20,684) --
---------- ------
Increase in shares outstanding................ 352,525 994
========== ======
</TABLE>
<TABLE>
<CAPTION>
GROWTH STOCK FUND
-----------------
CLASS A CLASS B CLASS C
------- ------- -------
YEAR YEAR PERIOD FROM PERIOD FROM
ENDED ENDED SEPTEMBER 8, 1995* OCTOBER 21, 1995*
APRIL 30, APRIL 30, TO APRIL 30, TO APRIL 30,
1996 1995 1996 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Shares sold............................... 227,245 187,945 19,924 4,441
Shares issued for reinvested distributions 55,233 34,332 426 3
Shares redeemed........................... (246,555) (662,562) (945) (1)
---------- ---------- -------- --------
Increase (decrease) in shares outstanding. 35,923 (440,285) 19,405 4,443
========== =========== ======== ========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
-------------------------
CLASS A CLASS B CLASS C
------- ------- -------
YEAR PERIOD FROM PERIOD FROM YEAR PERIOD FROM
ENDED MAY 16, 1994* JANUARY 16, 1996* ENDED MAY 20, 1994*
APRIL 30, TO APRIL 30, TO APRIL 30, APRIL 30, TO APRIL 30,
1996 1995 1996 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Shares sold...................... 78,718 327,714 2,288 691 2,159
Shares issued for
reinvested distribution....... 448 -- -- -- --
Shares redeemed.................. (24,280) (114,469) (1) -- --
-------- --------- ------- ------ --------
Increase in shares outstanding... 54,886 213,245 2,287 691 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 B CLASS C
------- ------- -------
YEAR PERIOD FROM PERIOD FROM YEAR PERIOD FROM
ENDED MAY 16, 1994* APRIL 16, 1996* ENDED MAY 20, 1994*
APRIL 30, TO APRIL 30, TO APRIL 30, APRIL 30, TO APRIL 30,
1996 (d) 1995 1996 1996 (d) 1995
-------- ---- ---- -------- ----
Net asset value:
<S> <C> <C> <C> <C> <C>
Beginning of period....................... $10.40 $10.00 $11.91 $10.33 $10.00
------ ------ ------ ------ ------
Operations:
Net investment income (loss).............. (.10) (.09) (.01) (.21) (.16)
Net realized and unrealized
gain on investments..................... 3.27 .49 1.16 3.25 .49
------ ------ ------ ------ ------
Total from operations................. 3.17 .40 1.15 3.04 .33
------ ------ ------ ------ ------
Distributions to shareholders:
From net realized gains................... (.40) -- -- (.40) --
From return of capital.................... (.09) -- -- (.09) --
------ ------ ------ ------ ------
Total distributions..................... (.49) -- -- (.49) --
------ ------ ------ ------ ------
Net asset value:
End of period............................. $13.08 $10.40 $13.06 $12.88 $10.33
====== ====== ====== ====== ======
Total investment return (c).................. 31.02% 4.00% 9.66% 29.96% 3.30%
Net assets at end of
period (000's omitted).................... $4,334 $2,189 $0 $150 $128
Ratios:
Expenses to average net assets (e)........ 2.01% 1.74%(a) 1.86%(a) 2.77% 2.40%(a)
Expenses to average net assets
(net of expenses paid indirectly)....... 1.74% N/A 1.86%(a) 2.49% N/A
Net investment loss to average net assets. (1.00)% (1.21)%(a) (1.39)%(a) (1.73)% (1.80)%(a)
Assuming no voluntary waivers and
reimbursements and expense reductions,
up to the most restrictive state
limitation in effect:
Expenses....................... 2.74% 2.97%(a) 1.86%(a) 3.50% 3.50%(a)
Net investment income (loss)... (1.73)% (2.44)%(a) (1.39)%(a) (2.46)% (2.90)%(a)
Portfolio turnover rate (excluding
short-term securities).................. 165.5% 88.3% 165.5% 165.5% 88.3%
Per share amounts are presented based upon average fund shares outstanding.
* Commencement of operations
See accompanying notes to Financial Highlights on page 34.
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME FUND
----------------------
CLASS A CLASS B
------- -------
PERIOD FROM PERIOD FROM
SEPTEMBER 7, 1995* DECEMBER 28, 1995*
TO APRIL 30, TO APRIL 30
1996 1996
---- ----
Net asset value:
<S> <C> <C>
Beginning of period.................................... $10.00 $10.64
------ ------
Operations:
Net investment income (loss)........................... .02 (.01)
Net realized and unrealized gain on investments........ 1.24 .58
------ ------
Total from operations................................ 1.26 .57
------ ------
Distributions to shareholders:
From net investment income............................. (.02) --
------ ------
Net asset value:
End of period.......................................... $11.24 $11.21
====== ======
Total investment return (c)............................... 12.64% 5.36%
Net assets at end of
period (000's omitted)................................. $3,962 $11
Ratios:
Expenses to average net assets (e)..................... 1.98%(a) 2.68%(a)
Expenses to average net assets
(net of expenses paid indirectly).................... 1.75%(a) 2.45%(a)
Net investment income (loss) to average net assets..... .36%(a) (.37)%(a)
Assuming no voluntary waivers and
reimbursements and expense reductions,
up to the most restrictive state limitation
in effect:
Expenses.................................... 2.97%(a) 3.50%(a)
Net investment income (loss)................ (.63)%(a) (1.19)%(a)
Portfolio turnover rate (excluding
short-term securities)................................. 56.1% 56.1%
Per share amounts are presented based upon average fund shares outstanding.
* Commencement of operations
See accompanying notes to Financial Highlights on page 34.
</TABLE>
<TABLE>
<CAPTION>
GROWTH STOCK FUND
-----------------
CLASS A
-------
YEAR ENDED APRIL 30,
--------------------
1996 1995 1994 1993 1992 (b)
---- ---- ---- ---- --------
Net asset value:
<S> <C> <C> <C> <C> <C>
Beginning of year............................. $19.91 $17.51 $17.81 $23.81 $19.36
------ ------ ------ ------ ------
Operations:
Net investment income (loss).................. .08 .15 .07 .05 (.18)
Net realized and unrealized
gain (loss) on investments.................. 4.82 2.77 (.16) .22 4.81
------ ------ ------ ------ ------
Total from operations..................... 4.90 2.92 (.09) .27 4.63
------ ------ ------ ------ ------
Distributions to shareholders:
From net investment income.................... (.11) (.13) (.06) -- --
From net realized gains....................... (1.04) (.39) (.15) (6.27) (.18)
------ ------ ------ ------ ------
Total distributions......................... (1.15) (.52) (.21) (6.27) (.18)
------ ------ ------ ------ ------
Net asset value:
End of year................................... $23.66 $19.91 $17.51 $17.81 $23.81
====== ====== ====== ====== ======
Total investment return (c)...................... 25.00% 17.04% (.52)% 1.51% 23.86%
Net assets at end of
year (000's omitted).......................... $28,956 $23,651 $28,518 $26,784 $19,351
Ratios:
Expenses to average net assets (e)............ 1.78% 1.90% 1.90% 1.90% 2.25%
Expenses to average net assets
(net of expenses paid indirectly)........... 1.72% N/A N/A N/A N/A
Net investment income (loss) to average
net assets................................. .36% .75% .40% .26% (.76)%
Assuming no voluntary waivers,
reimbursements and
expense reductions:
Expenses........................... 1.87% 1.99% 2.13% 2.70% 2.86%
Net investment income (loss)....... .27% .66% .17% (.54)% (1.37)%
Portfolio turnover rate
(excluding short-term securities)........... 36.6% 21.8% 34.2% 16.5% 142.6%
See accompanying notes to Financial Highlights on page 34.
</TABLE>
<TABLE>
<CAPTION>
GROWTH STOCK FUND
-----------------
CLASS B CLASS C
------- -------
PERIOD FROM PERIOD FROM
SEPTEMBER 8, 1995* OCTOBER 21, 1995*
TO APRIL 30, TO APRIL 30,
1996 1996
---- ----
Net asset value:
<S> <C> <C>
Beginning of period.................................... $21.64 $22.61
------ ------
Operations:
Net investment income (loss)........................... .06 .11
Net realized and unrealized
gain on investments.................................. 2.96 2.00
------ ------
Total from operations.............................. 3.02 2.11
------ ------
Distributions to shareholders:
From net investment income............................. (.23) (.25)
From net realized gains................................ (1.04) (1.04)
------ ------
Total distributions.................................. (1.27) (1.29)
------ ------
Net asset value:
End of period.......................................... $23.39 $23.43
====== ======
Total investment return (c)............................... 14.37% 9.72%
Net assets at end of
period (000's omitted)................................. $454 $104
Ratios:
Expenses to average net assets (e)..................... 2.41%(a) 2.35%(a)
Expenses to average net assets
(net of expenses paid indirectly).................... 2.37%(a) 2.31%(a)
Net investment income (loss) to average net assets..... (.62)%(a) (.65)%(a)
Assuming no voluntary waivers and
reimbursements and expense reductions:............. 2.50%(a) 2.43%(a)
Expenses......................................... (.71)%(a) (.73)%(a)
Net investment income (loss).....................
Portfolio turnover rate
(excluding short-term securities)...................... 36.6% 36.6%
* Commencement of operations
See accompanying notes to Financial Highlights on page 34.
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY FUND
-------------------------
CLASS A CLASS B CLASS C
------- ------- -------
YEAR PERIOD FROM PERIOD FROM YEAR PERIOD FROM
ENDED MAY 16, 1994* JANUARY 16, 1996* ENDED MAY 20, 1994*
APRIL 30, TO APRIL 30, TO APRIL 30, APRIL 30, TO APRIL 30,
1996 1995 1996 1996 1995
---- ---- ---- ---- ----
Net asset value:
<S> <C> <C> <C> <C> <C>
Beginning of period.................. $9.42 $10.00 $9.97 $9.36 $9.99
----- ------ ----- ----- -----
Operations:
Net investment income (loss)......... -- (.05) -- (.05) (.11)
Net realized and unrealized loss
on investments and translation of
assets and liabilities in
foreign currencies............. 1.01 (.53) .43 .98 (.52)
----- ------ ----- ----- -----
Total from operations........ 1.01 (.58) .43 .93 (.63)
----- ------ ----- ----- -----
Distributions to shareholders:
From net investment income........... (.01) -- -- -- --
From return of capital............... (.01) -- -- -- --
----- ------ ----- ----- -----
Total distributions................ (.02) -- -- -- --
----- ------ ----- ----- -----
Net asset value:
End of period ...................... $10.41 $9.42 $10.40 $10.29 $9.36
====== ===== ====== ====== =====
Total investment return (c)............. 10.74% (5.80)% 4.31% 9.94% (6.31)%
Net assets at end of
period (000's omitted)............... $2,792 $2,009 $24 $29 $20
Ratios:
Expenses to average net assets (e)... 2.40% 1.99%(a) 3.10%(a) 3.15% 2.74%(a)
Expenses to average net assets
(net of expenses paid indirectly).. 2.00% N/A 2.73%(a) 2.75% N/A
Net investment income (loss) to
average net assets................. .07% (.55)%(a) (.84)%(a) (.69)% (1.36)%(a)
Assuming no voluntary waivers and
reimbursements, up to the most
restrictive state limitation
in effect:
Expenses ............... 2.97% 2.97%(a) 3.50%(a) 3.50% 3.50%(a)
Net investment income
(loss)................ (.50)% (1.53)%(a) (1.24)%(a) (1.04)% (2.12)%(a)
Portfolio turnover rate (excluding
short-term securities)............... 66.8% 92.1% 66.8% 66.8% 92.1%
Per share amounts are presented based upon average fund shares outstanding.
* Commencement of operations
See accompanying notes to Financial Highlights on page 34.
</TABLE>
NOTES TO FINANCIAL HIGHLIGHTS
- -----------------------------
(a) Adjusted to an annual basis.
(b) Wilke/Thompson Capital Management was 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) Beginning in the period ended April 30, 1996 the expense ratio reflects the
effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Funds. Prior period expense ratios have not
been adjusted.
<TABLE>
<CAPTION>
VOYAGEUR AGGRESSIVE GROWTH FUND
INVESTMENTS IN SECURITIES APRIL 30, 1996
- -----------------------------------------------------------------------------------------------------------------
MARKET
ISSUER NUMBER OF SHARES VALUE(a)
- -----------------------------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
COMMON STOCKS (96.3%):
COMMERCIAL SERVICES (16.4%):
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cambridge Technology Partners, Incorporated 1,700(c) $ 114,325
Control Data Systems, Incorporated 3,000(c) 70,500
Dendrite International, Incorporated 4000(c) 95,000
Frontier Corporation 2,200 69,575
Gartner Group, Incorporated 3,000(c) 102,750
Paging Network 3,600(c) 84,600
Reynolds & Reynolds Company 1,100 50,875
Viasoft Incorporated 4,000(c) 145,000
----------
732,625
----------
CONSUMER NON-DURABLE (5.4%):
- -----------------------------------------------------------------------------------------------------------------
Gillette Company 800 43,200
Pepsico, Incorporated 1,400 88,900
Proctor & Gamble 1,300 109,850
----------
241,950
----------
ENERGY (7.4%):
- -----------------------------------------------------------------------------------------------------------------
Belco Oil & Gas 4,000(c) 115,500
Exxon Corporation 1,400 119,000
Smith International Incorporated 3,300(c) 98,175
----------
332,675
FINANCIAL (3.9%):
- -----------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association 2,000 61,250
First USA, Incorporated 1,300 73,125
Wells Fargo & Company 175 42,459
----------
176,834
----------
HEALTHCARE (8.7%):
- -----------------------------------------------------------------------------------------------------------------
Cerner Corporation 3,600(c) 74,250
Inphynet Medical Management, Incorporated 3,500(c) 65,625
Merck & Company 1,500 90,750
Schering Plough Corporation 1,300 74,587
Teva Pharmaceutical Industries, Limited 1,900 85,263
----------
390,475
----------
TECHNOLOGY (54.5%):
- -----------------------------------------------------------------------------------------------------------------
3COM Corporation 1,700(c) 78,412
Andrew Corporation 600(c) 28,800
Ascend Communications, Incorporated 2,000(c) 123,000
Baan Company 2,000(c) 120,000
Bay Networks, Incorporated 2,350(c) 74,025
BMC Software, Incorporated 1,000(c) 60,875
Business Objects 1,800(c) 155,700
C-Cube Microsystems, Incorporated 1,300(c) 64,350
Cabletron Systems, Incorporated 550(c) 41,456
Cascade Communications Corporation 1,350(c) 135,338
Cheyenne Software, Incorporated 6,000(c) 136,500
CISCO Systems, Incorporated 1,000(c) 51,875
DSC Communications Corporation 3,000(c) 94,500
Ericcson L M Tel Company (ADR) 1,000(c) 20,375
Fore Systems 1,000(c) 79,000
Glenayre 2,500(c) 116,250
Informix Corporation 2,500(c) 65,938
Linear Technology Corporation 2,000 68,750
LSI Logic Corporation 1,500(c) 54,000
Madge Networks NV 1,700(c) 50,150
Netstar Incorporated 6,000(c) 113,250
Premisys Communications, Incorporated 1,500(c) 65,625
Progress Software Corporation 2,600(c) 40,950
Project Software & Development, Incorporated 3,400(c) 119,000
Shiva Corporation 2,400(c) 143,400
Sybase, Incorporated 2,000(c) 54,750
Transwitch Corporation 6,000(c) 82,500
US Robotics Corporation 1,300(c) 203,450
----------
2,442,219
----------
TOTAL INVESTMENTS IN SECURITIES (cost: $3,335,886)(b) $4,316,778
==========
See accompanying notes to investments in securities on page 45.
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR GROWTH AND INCOME FUND
INVESTMENTS IN SECURITIES APRIL 30, 1996
- -----------------------------------------------------------------------------------------------------------------
MARKET
ISSUER NUMBER OF SHARES VALUE(a)
- -----------------------------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
COMMON STOCKS (57.5%):
BASIC MATERIALS (1.3%):
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Freeport McMoRan Copper & Gold 1,500 $ 53,813
----------
CAPITAL GOODS (11.0%):
- -----------------------------------------------------------------------------------------------------------------
Corning Incorporated 1,700 59,075
General Electric 800 62,000
Littelfuse Incorporated 2,000(c) 75,000
Oea Incorporated 3,000 117,750
Raychem Corporation 950 73,981
United Dominion Industries 2,000 48,000
----------
435,806
----------
COMMERCIAL SERVICES (9.8%):
- ----------------------------------------------------------------------------------------------------------------
Airtouch Communications 1,300(c) 40,625
British Sky Broadcasting ADR 1,000 43,250
Chancellor Corporation 3,000(c) 76,500
Interpublic Group Company 2,000 93,500
Republic Waste Industries 2,500(c) 81,875
Tele-Communications International 1,000(c) 20,375
Viacom Incorporated Class B 800(c) 32,800
----------
388,925
----------
CONSUMER CYCLICAL (4.9%):
- -----------------------------------------------------------------------------------------------------------------
Duracell International Incorporated 200 9,050
Kohls Corporation 2,400(c) 82,500
Mattel Incorporated 3,000 78,000
Planet Hollywood 1,000(c) 25,375
----------
194,925
----------
ENERGY (6.0%):
- -----------------------------------------------------------------------------------------------------------------
Cairn Energy USA Incorporated 4,000(c) 49,500
Camco International Incorporated 3,000 106,875
Enron Corporation 2,000 80,500
----------
236,875
----------
FINANCIAL (9.0%):
- -----------------------------------------------------------------------------------------------------------------
AON Corporation 1,400 $ 75,075
Banco Latinoamericano de Export 1,300 71,987
Capsure Holdings 3,000(c) 52,875
Republic New York 1,200 71,250
Security Cap Industries Trust 5,000 86,250
----------
357,437
----------
HEALTHCARE (9.2%):
- -----------------------------------------------------------------------------------------------------------------
Abbott Labs 1,300 52,813
Amsco International Incorporated 3,500(c) 50,750
Columbia/HCA Healthcare 600 31,875
Elan Corporation (ADR) 1,500(c) 99,187
Magellan Health Services Incorporated 2,500(c) 53,750
Pharmacia & Upjohn Incorporated 2,000 76,500
----------
364,875
----------
TECHNOLOGY (6.3%):
- -----------------------------------------------------------------------------------------------------------------
Black Box Corporation 4,300(c) 86,000
Danka Business Systems - ADR 1,500 72,000
Electronic Data Systems (GME) 1,300 73,288
I2 Technologies 500(c) 20,250
----------
251,538
----------
TOTAL INVESTMENTS IN COMMON STOCK (cost: $1,986,658) 2,284,194
----------
CONVERTIBLE PREFERRED STOCKS (0.3%):
CONSUMER NON-DURABLE (0.3%):
- -----------------------------------------------------------------------------------------------------------------
Corning Dell LP $3.00 250 $ 13,250
----------
TOTAL INVESTMENTS IN CONVERTIBLE PREFERRED STOCKS (cost: $12,956) 13,250
----------
CONVERTIBLE CORPORATE BONDS (2.9%):
FINANCIAL (1.5%):
- -----------------------------------------------------------------------------------------------------------------
Mitsubishi Bank International Finance, 3.00% due 11/30/02 50,000 58,188
----------
INDUSTRIAL (1.4%):
- -----------------------------------------------------------------------------------------------------------------
Tele-Communications International, 4.5% due 02/15/06 60,000 56,550
----------
TOTAL INVESTMENTS IN CONVERTIBLE CORPORATE BONDS (cost: $110,000) 114,738
----------
U.S. AGENCY OBLIGATIONS (7.7%):
- -----------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank Inverse Floater Structured Note,
9.09% due 11/18/97 (d) 300,000 304,031
----------
TOTAL INVESTMENTS IN U.S. AGENCY OBLIGATIONS (cost: $304,060) 304,031
----------
U.S. TREASURY OBLIGATIONS (12.4%):
- -----------------------------------------------------------------------------------------------------------------
U.S. Treasury Note 5.125% due 02/28/98 500,000 492,265
----------
TOTAL INVESTMENTS IN U.S. TREASURY OBLIGATIONS (cost: $492,432) 492,265
----------
TOTAL INVESTMENTS IN SECURITIES (cost: $2,906,106)(b) $3,208,478
==========
See accompanying notes to investments in securities on page 45.
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR GROWTH STOCK FUND
INVESTMENTS IN SECURITIES APRIL 30, 1996
- -----------------------------------------------------------------------------------------------------------------
MARKET
ISSUER NUMBER OF SHARES VALUE(a)
- -----------------------------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
COMMON STOCKS (97.3%):
BASIC INDUSTRIES (10.0%):
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Archer Daniels Midland Company 49,000 $ 924,875
Bemis 32,000 1,036,000
Sigma-Aldrich 18,000 972,000
----------
2,932,875
----------
CAPITAL GOODS - INDUSTRIAL (9.6%):
- -----------------------------------------------------------------------------------------------------------------
General Electric 13,000 1,007,500
Grainger (W.W.) 13,000 897,000
Pitney - Bowes 19,000 926,250
----------
2,830,750
----------
CAPITAL GOODS - TECHNOLOGY (9.6%):
- -----------------------------------------------------------------------------------------------------------------
Automatic Data Processing 22,000 855,250
Hewlett-Packard 10,000 1,058,750
Motorola 15,000 918,750
----------
2,832,750
----------
CONSUMER DEFENSIVE STAPLES (26.2%):
- -----------------------------------------------------------------------------------------------------------------
Albertson's Incorporated 27,000 1,039,500
Anheuser Busch 13,000 872,625
Conagra Incorporated 25,000 965,625
Philip Morris 10,000 901,250
Sara Lee 31,000 961,000
Sysco Corporation 28,000 899,500
UST, Incorporated 30,000 960,000
Wal-Mart Stores 47,000 1,122,125
----------
7,721,625
----------
CONSUMER DURABLES (6.4%):
- -----------------------------------------------------------------------------------------------------------------
Bandag 19,000 952,375
Genuine Parts 21,000 929,250
----------
1,881,625
----------
CONSUMER NON-DURABLES (3.5%):
- -----------------------------------------------------------------------------------------------------------------
Dillard Department Stores 26,000 1,043,250
----------
CONSUMER GROWTH STAPLES (19.6%):
- -----------------------------------------------------------------------------------------------------------------
Abbott Laboratories 23,000 934,375
American Home Products 10,000 1,055,000
Circuit City 32,000 1,016,000
Gannett Company 15,000 1,025,625
Merck 14,000 847,000
Schering-Plough 16,000 918,000
----------
5,796,000
----------
ENERGY (6.9%):
- -----------------------------------------------------------------------------------------------------------------
Royal Dutch Petroleum 7,000 1,002,750
Shell Transport & Trading 13,000 1,040,000
----------
2,042,750
----------
FINANCIAL SERVICES (5.5%):
- -----------------------------------------------------------------------------------------------------------------
Southtrust Corporation 29,000 786,625
Suntrust Banks 12,000 846,000
----------
1,632,625
----------
TOTAL INVESTMENTS IN SECURITIES (cost: $22,256,741)(b) $28,714,250
===========
See accompanying notes to investments in securities on page 45.
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR INTERNATIONAL EQUITY FUND
INVESTMENTS IN SECURITIES APRIL 30, 1996
- -----------------------------------------------------------------------------------------------------------------
MARKET
ISSUER NUMBER OF SHARES VALUE(a)
- -----------------------------------------------------------------------------------------------------------------
(Percentages of each investment category relate to total net assets)
COMMON STOCKS (90.1%):
ARGENTINA (2.6%):
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Banco Frances ADR (banking) 600 $ 17,250
Transportadora Gas ADR (energy) 2,300 29,612
YPF Sociedad Anonima ADR (energy) 1,300 28,436
----------
75,298
----------
AUSTRALIA (3.3%):
- -------------------------------------------------------------------------------------------------------------------
ANZ (banking) 10,000 47,805
News Corporation (publishing) 8,000 46,925
----------
94,730
----------
FRANCE (5.4%):
- -----------------------------------------------------------------------------------------------------------------
AGF (insurance) 920(c) 25,074
CPR Parisienne De Rees (financial services) 400 34,614
Legris Industries S.A. (machinery) 570(c) 28,186
Lyonnaise Des Eaux (environmental control) (water distribution) 290 29,072
Michelin Tires (wholesale & international trade) 770 38,090
----------
155,036
----------
GERMANY (1.5%):
- -----------------------------------------------------------------------------------------------------------------
Mannesmann AG (diversified machine) 125 42,696
----------
HONG KONG (3.9%):
- -----------------------------------------------------------------------------------------------------------------
Cheung Kong (real estate) 7,000 49,998
Swire Pacific "A" (conglomerate) 7,000 59,727
----------
109,725
----------
IRELAND (1.5%):
- -----------------------------------------------------------------------------------------------------------------
Allied Irish Banks (banking) 7,900 41,373
----------
ITALY (5.8%):
- -----------------------------------------------------------------------------------------------------------------
Assicurazioni Generali (insurance) 1,800 44,811
Istituto Mobiliare Italiano (financial services) 4,600 36,458
Marzotto & Figli (textiles) 10,500 43,414
Telecom Italia (telecommunications) 8,900(c) 19,626
Telecom Mobile Risp (telecommunications) 15,000(c) 20,996
----------
165,305
----------
JAPAN (32.0%):
- -----------------------------------------------------------------------------------------------------------------
Canon Incorporated (electrical machinery) 3,000 59,570
Hoya Corporation (precision) 1,000 35,322
Itochu Corporation (wholesale and international trade) 7,000 53,259
Matsushita Communications (electronics) 2,000 53,460
Mitsubishi Materials Corporation (diversified metals) 8,000 48,114
Mori Seiki (hand/machine tools) 2,000 45,632
Nippon Sanso Corporation (chemicals) 6,000 33,164
Nippon Steel (steel) 14,000 50,519
Nissan Motor Company Limited (automobiles) 5,000 42,195
NKK Corporation (steel) 15,000(c) 46,968
Nomura Securities Company Limited (securities houses) 3,000 65,297
Omron Corporation (electronics) 2,000 45,059
Sanwa Bank (banking) 2,000 40,477
Sekisui House Limited (manufactured housing) 5,000 62,052
Sumitomo Bank (banking) 3,000 64,152
Sumitomo Trust & Banking Company (banking) 3,000 43,818
TDK Corporation (electronics) 1,000 57,183
Terumo Corporation (pharmaceuticals) 5,000 63,483
----------
909,724
----------
MALAYSIA (2.0%):
- -----------------------------------------------------------------------------------------------------------------
Genting Berhad (hotel & leisure) 3,000 26,948
Malayan Banking Berhad (banking) 3,000 29,233
----------
56,181
----------
MEXICO (2.5%):
- -----------------------------------------------------------------------------------------------------------------
Grupo Industrial Durango ADR (oil-international integrated) 2,400(c) 18,600
ICA Empresas ADR (construction) 1,800(c) 24,975
Telefonos De Mexico ADR (utilities) 800 27,200
----------
70,775
----------
NETHERLANDS (2.8%):
- -----------------------------------------------------------------------------------------------------------------
Elsevier (publishing) 2,220 33,382
VNU Verigd Bezit (publishing) 2,800 46,999
----------
80,381
----------
NEW ZEALAND (1.6%):
- -----------------------------------------------------------------------------------------------------------------
Telecom Corporation of New Zealand (telecommunications) 11,000 46,687
----------
NORWAY (1.5%):
- -----------------------------------------------------------------------------------------------------------------
Norsk Hydro (energy) 925 42,088
----------
SINGAPORE (7.5%):
- -----------------------------------------------------------------------------------------------------------------
Hong Kong Land Holding (property) 25,000 53,344
Keppel Corporation (construction) 7,000 63,230
Oversea Chinese Banking (banking) 4,000 54,909
Singapore Land Limited (real estate) 6,000 42,675
----------
214,158
----------
SPAIN (4.5%):
- -------------------------------------------------------------------------------------------------------------------
Banco Santander (banking) 666 30,904
Portland Valderrivas (building materials) 840 52,102
Vallehermoso SA (real estate) 2,420 43,701
----------
126,707
----------
SWITZERLAND (1.7%):
- -----------------------------------------------------------------------------------------------------------------
Ciba-Geigy (pharmaceuticals) 21 24,313
Sandoz AG (pharmaceuticals) 22 23,968
----------
48,281
----------
UNITED KINGDOM (10.0%):
- -----------------------------------------------------------------------------------------------------------------
Abbey National PLC (banking) 1,500 12,808
Argyll Group PLC (retail) 3,500 17,437
Blue Circle Industries (building materials) 2,500 14,049
BOC Group PLC (chemicals) 2,000 27,731
British Petroleum Company PLC (energy) 1,000 8,996
BTR PLC (diversified industrial) 6,000 28,812
Cable & Wireless PLC (telecommunications) 4,000 31,303
Carlton Communications (broadcasting) 1,500 10,489
Commercial Union ORD (insurance) 1,500 12,988
Glaxo Wellcome PLC (pharmaceticals) 2,000 24,190
Grand Metropolitan (wines & spirits) 3,000 19,673
Kingfisher ORD (retail) 1,000 8,929
Lloyds TSB Group PLC (banking) 4,056 19,385
Rank Organisation PLC (leisure) 2,800 22,395
Rolls-Royce (aerospace) 2,000 7,113
Unilever PLC (food processing) 1,000 18,247
----------
284,545
----------
TOTAL INVESTMENTS IN SECURITIES (cost: $2,365,800)(b) $2,563,690
==========
See accompanying notes to investments in securities on page 45.
</TABLE>
VOYAGEUR AGGRESSIVE GROWTH FUND
VOYAGEUR GROWTH AND INCOME 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 for
Growth Stock Fund and International Equity Fund. The cost of securities for
federal income tax purposes for Aggressive Growth Fund and Growth and
Income Fund are $3,344,886 and $2,913,508, respectively. The aggregate
gross unrealized appreciation and depreciation on investments based on
these costs are:
<TABLE>
<CAPTION>
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
APPRECIATION (DEPRECIATION) APPRECIATION
------------ -------------- ------------
<S> <C> <C> <C>
Aggressive Growth Fund $1,123,037 $(151,145) $971,892
Growth and Income Fund 331,909 (36,939) 294,970
Growth Stock Fund 6,628,417 (170,908) 6,457,509
International Equity Fund 272,290 (74,400) 197,890
</TABLE>
(c) Presently non-income producing security.
(d) Inverse floater, represents securities that pay interest at rates that
increase (decrease) with a decline (increase) is a specified index. The
interest paid by the inverse floater will generally change at a multiple of
any change in the index. Interest rate disclosed is the rate in effect on
April 30, 1996. LIBOR-London InterBank Offered Rate.
FEDERAL INCOME TAX INFORMATION
- --------------------------------------------------------------------------------
Information for federal income tax purposes is presented as an aid to
shareholders in reporting the dividend distributions for the periods ended April
30, 1996 shown below. Each shareholder should consult a tax adviser about
reporting this income for state and local purposes. In January 1996, the Funds
separately provided each shareholder with tax information for calendar year
1995.
<TABLE>
<CAPTION>
VOYAGEUR AGGRESSIVE GROWTH FUND
-------------------------------
PER CLASS PER CLASS PER CLASS
A SHARE B SHARE C SHARE
------- ------- -------
YEAR PERIOD FROM YEAR
ENDED APRIL 16, 1996 ENDED
APRIL 30, TO APRIL 30, APRIL 30,
1996 1996 1996
---- ---- ----
<S> <C> <C>
Long-term capital gain distribution.................. $.3984 N/A $.3984
Short-term capital gain distribution................. .0078 N/A .0078
Return of capital distribution....................... .0859 N/A .0859
------ ------
Total distributions............................... $.4921 N/A $.4921
====== ======
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR GROWTH AND INCOME FUND
-------------------------------
PER CLASS PER CLASS
A SHARE B SHARE
------- -------
PERIOD FROM PERIOD FROM
SEPTEMBER 7, 1995 DECEMBER 28, 1995
TO APRIL 30, TO APRIL 30,
1996 1996
---- ----
<S> <C>
Net investment income distribution................... $.0232 N/A
======
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR GROWTH STOCK FUND
--------------------------
PER CLASS PER CLASS PER CLASS
A SHARE B SHARE C SHARE
------- ------- -------
YEAR PERIOD FROM PERIOD FROM
ENDED SEPTEMBER 8, 1995 OCTOBER 21, 1995
APRIL 30, TO APRIL 30, TO APRIL 30,
1996 1996 1996
---- ---- ----
<S> <C> <C> <C>
Net investment income distributions................ $ .1051 $ .2275 $ .2424
Long-term capital gain distributions............... .8506 .8506 .8506
Short-term capital gain distributions.............. .1926 .1926 .1926
------- ------- -------
Total distributions............................. $1.1483 $1.2707 $1.2856
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR INTERNATIONAL EQUITY FUND
----------------------------------
PER CLASS PER CLASS PER CLASS
A SHARE B SHARE C SHARE
------- ------- -------
YEAR PERIOD FROM YEAR
ENDED JANUARY 16, 1996 ENDED
APRIL 30, TO APRIL 30, APRIL 30,
1996 1996 1996
---- ---- ----
<S> <C>
Net investment income distributions.................. $.0136 N/A --
Return of capital distributions...................... .0067 N/A --
------ ------
Total distributions............................... $.0203 N/A --
====== ======
</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, 89% of the above ordinary income distributions
to corporate shareholders is eligible for the corporate dividend received
deduction for Voyageur Growth Stock Fund.
