NATIONAL INSURED TAX FREE FUND
SEMI-ANNUAL REPORT
Dated June 30, 1995
Voyageur offers a family of mutual funds, each with an individual objective
stated in its prospectus. Investment objectives of the funds range from high
current income to long-term capital appreciation. Exchange privileges allow you
to change your investment between Voyageur Funds as your objectives or market
conditions change.
VOYAGEUR TAX FREE FUNDS seek high current income free from both Federal income
taxes and state income taxes (where applicable). The Funds invest in investment
grade municipal bonds.
Voyageur ARIZONA Tax Free Fund Voyageur KANSAS Tax Free Fund
Voyageur CALIFORNIA Tax Free Fund Voyageur MINNESOTA Tax Free Fund
Voyageur COLORADO Tax Free Fund Voyageur NEW MEXICO Tax Free Fund
Voyageur FLORIDA Tax Free Fund Voyageur NORTH DAKOTA Tax Free Fund
Voyageur IDAHO Tax Free Fund Voyageur UTAH Tax Free Fund
Voyageur IOWA Tax Free Fund Voyageur WISCONSIN Tax Free Fund
VOYAGEUR INSURED TAX FREE FUNDS seek high current income free from both Federal
income taxes and state income taxes (where applicable) with the added safety of
an insured portfolio. The Funds invest in insured municipal bonds.
<TABLE>
<S> <C>
Voyageur ARIZONA Insured Tax Free Fund Voyageur MISSOURI Insured Tax Free Fund
Voyageur CALIFORNIA Insured Tax Free Fund Voyageur NATIONAL Insured Tax Free Fund
Voyageur FLORIDA Insured Tax Free Fund Voyageur OREGON Insured Tax Free Fund
Voyageur MINNESOTA Insured Fund Voyageur WASHINGTON Insured Tax Free Fund
</TABLE>
VOYAGEUR LIMITED TERM FUNDS seek to preserve original investment principal while
providing income free from both Federal income taxes and state income taxes
(where applicable). The Funds invest in intermediate term investment grade
municipal bonds.
<TABLE>
<S> <C>
Voyageur FLORIDA Limited Term Tax Free Fund Voyageur MINNESOTA Limited Term Tax Free Fund
</TABLE>
VOYAGEUR EQUITY FUNDS seek long term capital appreciation by investing in common
stocks.
Voyageur AGGRESSIVE GROWTH Fund Voyageur INTERNATIONAL Equity Fund
Voyageur GROWTH Stock Fund
VOYAGEUR INCOME FUNDS seek high current income from investments issued,
guaranteed or otherwise backed by the full faith and credit of the U.S.
Government.
Voyageur U.S. GOVERNMENT SECURITIES Fund
VOYAGEUR CASH TRUST SERIES MONEY MARKET FUNDS seek high current income,
principal protection and liquidity by investing in money market instruments.
Voyageur CALIFORNIA MUNICIPAL CASH Series Voyageur MUNICIPAL CASH Series
Voyageur FLORIDA MUNICIPAL CASH Series Voyageur OHIO MUNICIPAL CASH Series
Voyageur GOVERNMENT CASH Series Voyageur PRIME CASH Series
Voyageur MINNESOTA MUNICIPAL CASH Series Voyageur TREASURY CASH Series
For more complete information regarding the investment objectives, fees and
expenses of the Funds, please obtain a prospectus from your Investment
Representative or from Voyageur, 90 South Seventh Street, Suite 4400,
Minneapolis, MN 55402-4115; (612) 376-7044 (local); 800-525-6584 (MKTG).
Dear Shareholder:
The municipal bond market's dramatic rebound in the first half of 1995 caused
many mutual funds to recover much of the ground they lost in last year's bear
market. This strong rally was evidenced by the Fund's performance. I am pleased
to present a considerably brighter picture of the municipal bond market and the
Fund's performance than was presented in my last letter to you.
The results below summarize the Fund's net asset value, dividends paid and total
net assets for the reporting period.
<TABLE>
<CAPTION>
NET ASSET NET ASSET TOTAL NET
VALUE VALUE DIVIDENDS ASSETS
BEGINNING END PAID PER END OF
PERIOD OF PERIOD OF PERIOD SHARE PERIOD (000'S)
<S> <C> <C> <C> <C>
Period ended June 30, 1995:
Class A Shares $9.32 $10.08 $0.29 $33,867
Class B Shares 9.32 10.08 0.27 813
</TABLE>
In the pages that follow, the Fund's Manager will update you on how the economy
and the municipal bond market affected the Fund during this reporting period.
The manager will discuss the Fund's performance and some strategies used to
maximize performance.
We assert that a long-range view of investing provides the greatest benefit to
our shareholders. We encourage you to maintain a long-range view of investing;
we believe that you will derive the greatest benefit by doing so.
Thank-you for investing with Voyageur.
Sincerely,
John G. Taft
President
Voyageur National Insured Tax Free Fund
FACTORS AFFECTING FUND PERFORMANCE
During the reporting period, municipal bond funds rebounded strongly and largely
reversed the negative total return performance from 1994. Yields fell a striking
90 basis points (.90%) and long term treasury bond yields fell 125 basis points
(1.25%). Responding to strong economic growth and continued inflation fears, the
Federal Reserve Board raised short term interest rates in February an additional
50 basis points to 6.00%. The market viewed this rate increase as, most likely,
the final increase in the Fed's one-year campaign of tighter monetary policy.
Since February 1995, the market witnessed a dramatic shift in sentiment as the
economy revealed signs of a slow down with no evidence of inflation. As yields
fell, bond prices increased and investment returns on all fixed income classes
were sharply positive.
Several notable events in the reporting period affected the bond market's
performance:
* The Federal Reserve Board continued its restrictive policy and raised short
term interest rates 50 basis points in February. This seemed to prove
successful in slowing domestic growth and curbing the threat of inflation.
As indications of a slowing economy became more evident, market
participants became more comfortable with the fact that the Fed's strategy
had succeeded and that the economy could sustain slow growth and low
inflation. The reversal of sentiment in 1995 resulted in a substantial bond
market rally.
* The reduction of municipal bond issuance in 1995 coupled with strong demand
bolstered municipal bond prices. Bond issuance in the first half of this
year was down 50% from 1994 levels and, in addition, a record $80 billion
in bonds was to be called away from investors in June and July. This
shortage of supply should continue to have a positive technical impact on
municipal bond performance throughout the rest of 1995.
* The issue of radical tax reform, specifically proposals such as a flat tax
or national sales tax, dominated the municipal bond marketplace in the
second quarter of 1995. While municipal bond prices increased, this price
appreciation compared to treasuries did not occur as rapidly in the second
quarter. This price differential (called a risk premium) between treasury
yields and municipal yields resulted from the discussions surrounding tax
reform. We view the current price discrepancies between municipal bonds and
treasuries as an opportunity to purchase quality bonds at a discount to
taxable bond equivalents.
* Radical tax reform proposals caused many investors to fear that the tax
advantage of municipal bonds may erode. While there are numerous proposals
and relative degrees of reform, it is the radical reform proposals that
suggest a drastic restructuring of the current federal tax code and that
have been the subject of much media attention. All of the discussions and
proposals are in preliminary stages. At Voyageur, we believe the likelihood
of radical reform is remote. Clearly some reform is possible, although we
believe that we are at least two to three years away from potential
enactment. We continue to monitor the issue of tax reform and believe that
this discussion will continue to prevail in the months ahead.
* In general, the municipal market recovered from the temporary setback of
prices surrounding the Orange County, California derivative debacle last
year. However, California state-specific bonds continue to lag the overall
market, and volatility remains high due to the county's credit problems.
OUTLOOK
Our outlook for the municipal bond market is optimistic both in the near term
and for the balance of the decade. We anticipate a steeper yield curve (lower
short term rates) for the rest of the year and well into 1996. We believe the
economic fundamentals will affirm our view that inflation is under control and
that the Fed has been successful in slowing the domestic economy. Economic
growth should slow to 3.0% to 3.5% for the year, inflation should remain in
check in the 3.0 to 3.5% range, and unemployment will be in the 5.0% to 5.4%
range.
The "technical" condition of the municipal bond market, or the supply and demand
equation, continues to be very favorable. Currently we are experiencing the
lowest municipal bond supply in five years, while the demand continues to
strengthen prices. In addition, during the summer, volumes of bonds will be
called out of the marketplace. On a net basis, the fewer number of bonds in the
marketplace bodes favorably for the bond prices throughout the balance of the
year.
We expect the bond market to witness lower volatility during the second half of
the year. Throughout 1994 and during the first half of 1995, bond investors
experienced unusually high volatility in both bull and bear market cycles. We
look for bond yields to remain in a narrow trading range and believe lower
interest rates will prevail for the coming year.
Given our expectations for the rest of the year, we will continue to make minor
adjustments to the duration of our portfolios as needed. By maintaining our
longer-than-average duration last year, we were able to capture superior returns
in the bond market rally for the first and second quarters. We continue to
monitor the tax reform discussion and look for opportunities to purchase quality
bonds trading at a discount in the market. We seek bonds with good call
protection, specifically ten-year call protection, to avoid the risk of having
bonds called away in a declining yield environment. We believe that high quality
bonds with call protection will perform the best in the economic environment of
lower rates.
The dramatic change in sentiment from bearish to bullish demonstrated how the
market climate has changed. At Voyageur, we remain committed to the long term
approach to investing. We believe those investors who take a conservative
approach with asset allocation will, over the course of time, be rewarded for
their patience with above average returns.
DISCUSSION OF FUND MANAGEMENT BY ANDREW M. MCCULLAGH, JR. AND ELIZABETH H.
HOWELL, PORTFOLIO CO-MANAGERS
Mr. McCullagh and Ms. Howell are Senior Vice Presidents and Tax Exempt Portfolio
Managers for the Voyageur National Insured Tax Free Fund. Mr. McCullagh has over
22 years experience in municipal bond trading, underwriting and portfolio
management. Ms. Howell has over ten years experience as a securities analyst and
portfolio manager.
The holdings in the National Insured Tax Free Fund are an aggregate mix of
municipalities representing 16 states. The national scope of this fund afforded
us the opportunity to purchase a variety of high quality specialty state issues
as the supply came available. The greatest percentage of holdings within the
portfolio was in the health care sector--approximately 35%. With the current
consolidations and concentrations in that industry, we were able to purchase
bonds which offered investors high quality bonds and geographic diversity.
A strategy of the Fund has been to take advantage of supply surpluses and
shortages that may exist among the geographic markets. Opportunities arose in a
number of states when we were able to take advantage of a shortage in the market
by selling one or more of our bonds at a premium. Conversely, we purchased bonds
at a discount due to a glut of supply.
The National Insured Tax Free Fund's Class A total return was 11.20% for the
reporting period, compared with 10.19% for the Lehman Brothers Long Insured
Municipal Bond Index, the Fund's benchmark. Moreover, the Fund ranked eighth
among its 44 fund competitors in its Lipper objective of insured municipal debt
funds for one year, 6/30/94 through 6/30/95. (Note: This Lipper Analytical
Services ranking and the total return information that follow represent past
performance which is no guarantee of future results. Shares may be worth more or
less than their original cost. The total return based on net asset value for the
Fund's A-shares was 9.14% at one year and 6.33% since inception.)
We attribute this strong performance to a combination of factors. First, we
maintained a long duration and long average maturity which captured the
investment returns in a declining interest rate market. We decreased the
duration modestly in the second quarter (from 11.6 years to 9.50 years) after
realizing and participating in the exceptionally strong bond market rally in the
first part of the year. Second, the shortage of supply in the marketplace
further bolstered the Fund's investment performance. Third, the Fund held high
quality insured bonds with excellent call protection. We buy strong call
protection because it allows investors to lock in favorable yields for a longer
period of time. We are constantly swapping bonds within the market to maintain
adequate call protection within the portfolio. Maintaining adequate call
protection is a key component of our investment strategy.
We anticipate that the Fund will continue to perform very well for the balance
of the year, although we believe that the phenomenal rally in the bond market
has leveled off. We have a constructive view of the economy and inflation. We
also believe that high quality insured bonds and the Voyageur National Insured
Tax Free Fund are positioned to take full advantage of the favorable conditions
in the bond market.
<TABLE>
<CAPTION>
VOYAGEUR NATIONAL INSURED TAX FREE FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 1995
<S> <C>
ASSETS
Investments in securities, (note 1) (identified cost: $35,404,854).............. $35,555,135
Cash in bank on demand deposit.................................................. 793,035
Accrued interest receivable..................................................... 513,710
Receivable for investment securities sold....................................... 2,026,718
Receivable for Fund shares sold................................................. 48,108
Organizational costs (note 1)................................................... 21,421
Total assets................................................................. 38,958,127
LIABILITIES
Dividends payable to shareholders............................................... 40,499
Payable for investment securities purchased..................................... 4,069,330
Payable for Fund shares redeemed................................................ 116,619
Other accrued expenses.......................................................... 51,228
Total liabilities............................................................ 4,277,676
NET ASSETS APPLICABLE TO OUTSTANDING CAPITAL STOCK.............................. $34,680,451
Represented by:
Capital Stock - $.01 par value (note 1)...................................... $ 34,422
Additional paid-in capital................................................... 35,625,459
Distributions in excess of net investment income............................. (19,174)
Accumulated net realized loss on investments................................. (1,110,537)
Unrealized appreciation of investments....................................... 150,281
TOTAL NET ASSETS........................................................... $34,680,451
Net assets applicable to outstanding Class A Shares............................. $33,867,067
Net assets applicable to outstanding Class B Shares............................. $ 813,384
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE
Class A - Shares of capital stock outstanding: 3,361,486 (note 4)............ $10.08
Class B - Shares of capital stock outstanding: 80,731 (note 4)............... $10.08
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
VOYAGEUR NATIONAL INSURED TAX FREE FUND
STATEMENT OF OPERATIONS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 1995
<S> <C>
Investment income:
Interest..................................................................... $1,086,506
Expenses (note 3):
Investment advisory and management fee....................................... 89,463
Dividend-disbursing, administrative and accounting services fees............. 32,883
Printing, postage and supplies............................................... 4,264
Audit and accounting fees.................................................... 7,026
Legal fees................................................................... 2,663
Distribution fees - Class A.................................................. 43,977
Distribution fees - Class B.................................................. 2,988
Directors' fees.............................................................. 1,064
Registration fees............................................................ 17,378
Custodian fees............................................................... 4,864
Amortization of organizational costs......................................... 6,000
Other ....................................................................... 567
Total expenses............................................................. 213,137
Less: Expenses waived, absorbed or reduced.................................. (64,291)
Total net expenses......................................................... 148,846
Investment income - net.................................................... 937,660
Realized and unrealized gain (loss) on investments:
Realized loss on security transactions (note 2).............................. (1,110,537)
Net change in unrealized appreciation of investments......................... 4,075,952
Net gain on investments.................................................... 2,965,415
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $3,903,075
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
VOYAGEUR NATIONAL INSURED TAX FREE FUND
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994
<S> <C> <C>
Operations:
Investment income - net.................................... $ 937,660 $ 1,769,009
Realized gain (loss) on investments - net.................. (1,110,537) 40,510
Net change in unrealized appreciation or depreciation of investments 4,075,952 (4,233,416)
Net increase (decrease) in net assets resulting from operations 3,903,075 (2,423,897)
Distributions to shareholders from:
Investment income - net:
Class A.................................................. (1,021,460) (1,683,451)
Class B.................................................. (15,143) (10,845)
Distributions in excess of net investment income:
Class A.................................................. (18,578) N/A
Class B.................................................. (596) N/A
Net realized gain on investments:
Class A.................................................. -- (87,023)
Class B.................................................. -- (405)
Total distributions........................................ (1,055,777) (1,781,724)
Capital share transactions (note 4): Proceeds from sale of shares:
Class A (note 3)......................................... 6,143,469 24,952,369
Class B.................................................. 303,626 497,749
Net asset value of shares issued in reinvestment of net
investment income distributions, distributions in excess of
net investment income and realized gain distributions:
Class A.............................................. 756,577 1,081,870
Class B.............................................. 15,274 7,591
Payments for redemption of shares:
Class A.................................................. (11,149,444) (11,865,565)
Class B.................................................. (19,762) --
Increase (decrease) in net assets from capital share transactions (3,950,260) 14,674,014
Total increase (decrease) in net assets.................. (1,102,962) 10,468,393
Net assets at beginning of period............................. 35,783,413 25,315,020
Net assets at end of period (including distributions in excess of
net investment income of $19,174 and undistributed net investment
income of $98,943, respectively)......................... $34,680,451 $35,783,413
</TABLE>
See accompanying notes to financial statements.
VOYAGEUR NATIONAL INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Voyageur National Insured Tax Free Fund (the Fund), a fund within Voyageur
Insured Funds, Inc., is registered under the Investment Company Act of 1940 (as
amended) as a diversified, open-end management investment company. The Fund
offers 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, (first offered on March 1, 1995) are not subject to a front-end
sales charge or contingent deferred sales charge and have no conversion feature.
As of June 30, 1995 the Fund had no Class C Shares outstanding. All classes of
shares have 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 are allocated to each class of shares based upon its relative net
assets. Pursuant to their amended articles of incorporation, Voyageur Insured
Funds, Inc. has 10 trillion shares of authorized capital stock that may be
issued in one or more series.
The significant accounting policies followed by the Funds are summarized as
follows:
Investments in Securities
Securities are valued at fair value as determined by the Board of Directors.
Determination of fair value involves, among other things, using pricing services
or prices quoted by independent brokers. Short-term securities are valued at
amortized cost which approximates market value.
Security transactions are accounted for on the trade date. Securities gains
and losses are calculated on the identified-cost basis. Interest income,
including level-yield amortization of premium and original issue discount, is
accrued daily.
Securities Purchased on a When-Issued Basis
Delivery and payment for securities which have been purchased by the Fund on
a forward commitment or when-issued basis can take place up to a month or more
after the transaction date. During this period, such securities are subject to
market fluctuations and the portfolio maintains, in a segregated account with
its custodian, assets with a market value equal to or greater than the amount of
its purchase commitments.
Organizational Costs
Organizational costs are being amortized over 60 months on an inverse
acceleration (sum of the years' digits) basis.
Federal Taxes
The Fund's 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 Fund. Net investment income and net realized
gains (losses) for the Fund may differ for financial statement and tax purposes
primarily because of 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.
Distributions to Shareholders
Dividends declared daily from net investment income are payable monthly in
cash or reinvested in additional shares of the Fund. Net short-term realized
capital gains, if any, may be paid throughout the year and net long-term
realized capital gains, when available, are distributed annually.
(2) SECURITIES TRANSACTIONS
Purchase cost and proceeds from sales of securities other than short-term
securities aggregated $37,493,534 and $39,100,281, respectively, for the period
ended June 30, 1995.
(3) EXPENSES
The Fund has an investment advisory and management agreement with Voyageur
Fund Managers, Inc. (Voyageur) under which Voyageur manages the Fund's assets
and provides other specified services. The fee for investment management and
advisory services is paid monthly and is based on the average daily net assets
of the Fund at the annual rate of .50%. In addition, the Fund will pay most
other operating expenses including directors' fees, registration fees, printing
of shareholder reports, legal and auditing services and other miscellaneous
expenses. There was no portfolio insurance expense for the Fund during the
period ended June 30, 1995. Portfolio insurance expense, if any, is recognized
over the premium period. Voyageur is obligated to pay all expenses of the Fund
(excluding distribution fees, insurance premiums on portfolio securities, taxes,
interest and brokerage commissions) which exceed 1% of average daily net assets,
on an annual basis. During the period ended June 30, 1995, Fund Distributors
voluntarily absorbed $45,000 excluding waiver of distribution fees and expense
reductions.
The Fund will also pay a fee to Voyageur for acting as the Fund's dividend
disbursing, administrative and accounting services agent. The fee is paid
monthly and is equal to the sum of $1.33 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 .02%. The Fund is also responsible for
reimbursing Voyageur's out-of-pocket expense in connection with the performance
of dividend-disbursing, administrative and accounting services.
Each class of shares 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, the Fund is obligated to pay Fund Distributors
a monthly distribution fee at an annual rate of .25% average daily net assets of
the Class A Shares and 1.00% of average daily net assets of the Class B and
Class C Shares. Fund Distributors may waive all or part of its distribution fees
at its sole discretion. During the period ended June 30, 1995, Fund Distributors
voluntarily waived Class A distribution fees of $13,227, and Class B
distribution fees of $1,200. The Fund earned $33,160 in credits on uninvested
cash balances held at the custodian. Of these credits, $4,864 were used to
reduce certain fees for various custodial, pricing and accounting services
provided by the custodian bank. The remaining $28,296 is included in interest
income.
Sales charges paid by Class A shareholders were $42,897. Of this amount, Fund
Distributors received $5,327.
(4) CAPITAL STOCK
Transactions in shares of capital stock during each period were as follows:
<TABLE>
<CAPTION>
(CLASS A) (CLASS B)
PERIOD FROM
SIX MONTHS YEAR SIX MONTHS MAY 26,
ENDED ENDED ENDED 1994* TO
JUNE 30, 1995 DECEMBER 31, JUNE 30, 1995 DECEMBER 31,
(UNAUDITED) 1994 (UNAUDITED) 1994
<S> <C> <C> <C> <C>
Shares sold............................. 620,376 2,537,566 29,865 50,523
Shares issued for reinvested
distributions........................ 76,590 108,943 1,537 796
Shares redeemed......................... (1,124,982) (1,228,465) (1,990) --
Increase (decrease) in
shares outstanding................... (428,016) 1,418,044 29,412 51,319
</TABLE>
* Commencement of operations.
(5) FINANCIAL HIGHLIGHTS
Per share data (rounded to nearest cent) for a share of capital stock
outstanding and selected information for each period were as follows:
<TABLE>
<CAPTION>
(CLASS A) (CLASS B)
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED JANUARY 10, ENDED MAY 26,
JUNE 30, 1992(d) TO JUNE 30, 1994 (d) TO
1995 YEAR ENDED DECEMBER 31, DECEMBER 31, 1995 DECEMBER 31,
(UNAUDITED) 1994 1993 1992 (UNAUDITED) 1994
<S> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period ................. $ 9.32 $ 10.67 $ 10.14 $ 10.00 $ 9.32 $ 9.81
Operations:
Net investment income ............... .31 .56 .60 .57 .28 .31
Net realized and unrealized
gain (loss) on investments ........ .74 (1.34) .60 .14 .75 (.50)
Total from operations ........... 1.05 (.78) 1.20 .71 1.03 (.19)
Distributions to shareholders:
From net investment income .......... (.28) (.55)(a) (.60)(a) (.57)(a) (.26) (.29)(a)
From distributions in excess of net
investment income ................. (.01) -- -- -- (.01) --
From net realized gains ............. -- (.02) (.07) -- -- (.01)
Total distributions ............... (.29) (.57) (.67) (.57) (.27) (.30)
Net asset value:
End of period ....................... $ 10.08 $ 9.32 $ 10.67 $ 10.14 $ 10.08 $ 9.32
Total investment return (b) ............ 11.20% (7.45)% 12.10% 7.43% 10.93% (1.94)%
Net assets at end of
period (000's omitted) .............. $33,867 $35,305 $25,315 $ 2,919 $ 813 $ 478
Ratios:
Ratio of expenses to
average daily net assets .......... .83%(e) .10% --% --% 1.24%(e) .48%(e)
Ratio of net investment income
to average daily net assets ....... 5.25%(e) 5.71% 5.29% 5.85%(e) 4.70%(e) 5.37%(e)
Assuming no voluntary waivers and
reimbursements and reductions:
Expenses (c) ................ 1.18%(e) 1.25% 1.25% 1.25%(e) 1.91%(e) 1.99%(e)
Net investment income ....... 4.90%(e) 4.56% 4.04% 4.60%(e) 4.03%(e) 3.86%(e)
Portfolio turnover rate (excluding
short-term securities) .............. 106.66% 31.25% 77.79% 114.92% 106.66% 31.25%
</TABLE>
See accompanying notes to Financial Highlights.
NOTES TO FINANCIAL HIGHLIGHTS
(a) For the periods ended June 30, 1995, December 31, 1994, and 1993 all of the
distributions from net investment income were derived from interest on
securities exempt from federal income tax. For the period ended December
31, 1992 $.05 per share of the distributions from net investment income
were subject to federal income tax.
(b) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(c) For the periods presented the advisor and distributor voluntarily absorbed
various fees and expenses for the Fund. The advisor also paid $6,364 beyond
total fees and expenses for the period ended December 31, 1992. The annual
contractual expense limit for the Fund (excluding distribution fees,
insurance premiums on portfolio securities, taxes, interest and brokerage
commissions) is 1% of average daily net assets. The maximum distribution
fee is .25% of the Fund's average daily net assets for Class A Shares and
1.00% of the Fund's average daily net assets for Class B Shares.
(d) Commencement of operations.
(e) Annualized.
<TABLE>
<CAPTION>
VOYAGEUR NATIONAL INSURED TAX FREE FUND
INVESTMENTS IN SECURITIES (UNAUDITED) JUNE 30, 1995
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
<S> <C> <C> <C>
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
MUNICIPAL BONDS (102.5%):
ALASKA (2.9%):
$1,000 Anchorage General Purpose G.O. (FGIC Insured).......................... 6.00% 02-01-15 $ 1,002,830
CALIFORNIA (15.5%):
2,000 California Health Facilities Revenue - San Diego Hosp (MBIA Insured)... 6.20 08-01-12 2,024,500
1,500 California University Revenue (AMBAC Insured).......................... 5.20 09-01-10 1,405,650
1,000 Los Angeles Airport Revenue (FGIC Insured)............................. 5.50 05-15-10 962,610
1,000 Los Angeles Department of Water & Power Revenue (FGIC Insured)......... 5.90 05-15-12 995,160
5,387,920
IDAHO (2.9%):
1,050 Idaho St. Joseph Regional Medical (MBIA Insured)....................... 5.25 07-01-13 997,143
INDIANA (8.6%):
1,000 Brownsburg School Building #2 (Capital Guarantee Insured).............. 5.95 08-01-10 1,005,930
2,000 Indiana Health Finance Revenue - Marion Hospital (MBIA Insured) 6.00 07-01-16 1,983,960
2,989,890
NEBRASKA (5.4%):
2,000 Nebraska Public Power District Power Supply (MBIA Insured)............. 5.38 01-01-15 1,874,920
NEVADA (8.4%):
2,000 Clark County School District G.O. (MBIA Insured)....................... 5.50 06-15-16 1,896,400
1,000 Washoe County Airport Authority Revenue (MBIA Insured)................. 5.88 07-01-10 1,004,030
2,900,430
NEW MEXICO (5.9%):
1,000 City of Santa Fe Revenue Series 1994 A (AMBAC Insured)................. 6.30 06-01-24 1,020,390
1,000 City of Santa Fe Revenue Series 1994 A (AMBAC Insured)................. 6.25 06-01-15 1,024,460
2,044,850
NEW YORK (3.1%):
1,000 New York State Medical Care 1994 Series A (FHA Insured)................ 6.75 08-15-14 1,071,150
NORTH DAKOTA (2.9%):
1,000 Grand Forks United Hospital Revenue (MBIA Insured)..................... 6.25 12-01-24 1,010,490
OHIO (7.1%):
1,000 Ohio Higher Education Capital Facilities Series II-A (AMBAC Insured)... 5.25% 05-01-10 955,290
1,500 Ohio State Water Development Authority Revenue (AMBAC Insured)......... 5.90 12-01-15 1,506,270
2,461,560
TEXAS (11.8%):
1,000 Abilene Health Facility Rev Hendrick Medical Center (MBIA Insured)..... 6.00 09-01-13 1,000,930
1,480 Corpus Christi G.O. (AMBAC Insured).................................... 5.40 03-01-11 1,416,582
1,630 Harris County Toll Road (MBIA Insured)................................. 6.25 08-15-15 1,667,620
4,085,132
UTAH (2.8%):
1,000 Provo City Energy Systems Revenue (MBIA Insured)....................... 5.75 05-15-14 977,090
VIRGINIA (7.5%):
2,360 Hanover County IDA Memorial Medical Center (MBIA Insured).............. 6.50 08-15-08 2,596,802
WASHINGTON (14.8%):
1,825 Grant County School District #161 (AMBAC Insured)...................... 5.40 12-01-12 1,722,654
2,000 Spokane Solid Waste Revenue (AMBAC Insured)............................ 5.50 12-01-10 1,925,520
1,515 Washington Health Care Facilities Authority Revenue (MBIA Insured)..... 5.50 01-01-09 1,483,943
5,132,117
WYOMING (2.9%):
1,030 Lincoln United School District #2 (AMBAC Insured)...................... 5.75 06-01-10 1,022,811
TOTAL INVESTMENT IN SECURITIES (cost: $35,404,854) (c) $35,555,135
</TABLE>
VOYAGEUR NATIONAL INSURED TAX FREE FUND
NOTES TO INVESTMENTS IN SECURITIES (UNAUDITED)
(a) Securities are valued by procedures described in note 1 to the financial
statements.
(b) All investments in bonds are rated 100% Aaa/AAA (unaudited).
(c) Also represents the cost of securities for federal income tax purposes and
the aggregate gross unrealized appreciation and depreciation of securities
based on this cost were as follows:
Gross Gross Net
Unrealized Unrealized Unrealized
Appreciation Depreciation Appreciation
395,224 (244,943) 150,281
INVESTMENT ADVISER, TRANSFER AGENT,
DIVIDEND DISBURSING AGENT AND
ACCOUNTING SERVICES AGENT
Voyageur Fund Managers, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
UNDERWRITER
Voyageur Fund Distributors, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
CUSTODIAN
Norwest Bank Minnesota, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
GENERAL COUNSEL
Dorsey & Whitney P.L.L.P.
Minneapolis, Minnesota 55402
AUDITORS
KPMG Peat Marwick LLP
Minneapolis, Minnesota 55402
VOYAGEUR
NATIONAL INSURED TAX FREE FUND
SEMI-ANNUAL REPORT
Dated June 30, 1995
INVESTMENT ADVISER, TRANSFER AGENT,
DIVIDEND DISBURSING AGENT AND
ACCOUNTING SERVICES AGENT
Voyageur Fund Managers, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
UNDERWRITER
Voyageur Fund Distributors, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
CUSTODIAN
Norwest Bank Minnesota, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
GENERAL COUNSEL
Dorsey & Whitney P.L.L.P.
Minneapolis, Minnesota 55402
AUDITORS
KPMG Peat Marwick LLP
Minneapolis, Minnesota 55402
BULK RATE
U.S. Postage
PAID
Minneapolis, MN.
Permit #3322
VOYAGEUR
90 SOUTH SEVENTH STREET, SUITE 4400
MINNEAPOLIS, MINNESOTA 55402.4115
