ARIZONA TAX FREE FUND
ARIZONA 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 Funds' performance. I am pleased
to present a considerably brighter picture of the municipal bond market and the
Funds' performance than was presented in my last letter to you.
The results below summarize each Fund's net asset value, dividends paid and
total net assets for the reporting period.
VOYAGEUR ARIZONA TAX FREE FUND
<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 $10.00* $10.20 $0.18 $2,011
Class B Shares 10.30** 10.20 -- 10
Class C Shares 10.20*** 10.20 0.05 15
</TABLE>
* Net asset value at March 1, 1995 (commencement of operations)
** Net asset value at June 29, 1995 (commencement of operations)
*** Net asset value at May 13, 1995 (commencement of operations)
VOYAGEUR ARIZONA INSURED TAX FREE FUND
<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 $9.86 $10.68 $0.29 $242,037
Class B Shares 10.44* 10.67 0.14 462
Class C Shares 9.86 10.68 0.25 387
</TABLE>
* Net asset value at March 10, 1995 (commencement of operations)
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 each 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 Arizona Tax Free Fund
Voyageur Arizona Insured Tax Free Fund
DISCUSSION OF FUND MANAGEMENT BY ANDREW M. MCCULLAGH, JR., PORTFOLIO MANAGER
Mr. McCullagh is Senior Vice President and Tax Exempt Portfolio Manager for the
Voyageur Arizona Insured Tax Free Fund and the Voyageur Arizona Tax Free Fund.
He has over 22 years experience in municipal bond trading, underwriting, and
portfolio management.
At the state level, the Arizona economy and job growth continued to grow. Tax
assessments have increased and further expansion of the economy is well
underway. This growth and economic boom favorably supports the price of state
municipal bonds. Arizona bonds trade at a premium (i.e., lower yields) in
comparison to many other bonds offered in the single state municipal bond
market. Arizona bonds can command a higher price due to the underlying strong
credit condition of the state and its infrastructure.
The supply of new issuance remains low, and we do not expect any change in the
supply scenario until 1996 or later. We continue to believe that the demand for
bonds will remain high, outpacing issuance due to the local municipalities'
needs for bond issuances in the future to keep pace with the rapid growth of the
infrastructure.
THE VOYAGEUR ARIZONA INSURED TAX FREE FUND
The Fund's Class A total investment return was 11.23% for the reporting period,
compared with 10.19% for the Lehman Brothers Long Insured Municipal Bond Index.
Moreover, the Fund ranked ninth among its 29 fund competitors in its Lipper
objective of Arizona 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 9.08% at one year and 8.27%
since inception.)
THE VOYAGER ARIZONA TAX FREE FUND
The Fund's Class A total investment return was 3.74% for the reporting period.
The reporting period reflects approximately three months of performance
activity, as the Fund opened in late March. The Voyageur Arizona Tax Free Fund
is a quality fund which seeks to purchase bonds of high quality in those sectors
that provide incremental income over insured bonds. Its holdings at the end of
the reporting period were comprised of more than 75% of bonds in the three
highest rated categories by Standard & Poor's Corporation and/or Moody's
Investors Service (AAA/Aaa 68%, AA/Aa 5%, A/A 5%).
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 1995
VOYAGEUR VOYAGEUR
ARIZONA ARIZONA
TAX FREE INSURED
FUND TAX FREE FUND
<S> <C> <C>
ASSETS
Investments in securities, at market value (note 1)
(identified cost: $1,983,603 and 243,958,893, respectively) $2,023,294 $245,388,842
Accrued interest receivable................................... 49,125 5,415,065
Receivable for investment securities sold..................... -- 3,105,570
Receivable for Fund shares sold............................... 10,000 258,284
Organizational costs (note 1)................................. -- 2,715
Total assets............................................... 2,082,419 254,170,476
LIABILITIES
Disbursements in excess of cash in bank on demand deposit..... 28,903 1,917,057
Dividends payable to shareholders............................. 2,183 265,819
Payable for investment securities purchased................... -- 8,430,823
Payable for Fund shares redeemed.............................. -- 552,755
Other accrued expenses........................................ 15,097 118,533
Total liabilities.......................................... 46,183 11,284,987
NET ASSETS APPLICABLE TO OUTSTANDING SHARES................... $2,036,236 $242,885,489
Represented by:
Capital Stock - $.01 par value (note 1).................... $ 1,996 $ 227,443
Additional paid-in capital................................. 1,993,960 247,442,243
Distributions in excess of net investment income........... (527) (190,898)
Accumulated net realized gain (loss) on investments........ 1,116 (6,023,248)
Unrealized appreciation of investments..................... 39,691 1,429,949
TOTAL NET ASSETS......................................... $2,036,236 $242,885,489
Net assets applicable to outstanding Class A Shares........... $2,011,266 $242,036,564
Net assets applicable to outstanding Class B Shares........... $ 9,902 $ 461,655
Net assets applicable to outstanding Class C Shares........... $ 15,068 $ 387,270
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE
Class A - Shares of Capital Stock outstanding:
197,186 and 22,664,782, respectively (note 4)............ $10.20 $10.68
Class B - Shares of Capital Stock outstanding:
971 and 43,247, respectively (note 4).................... $10.20 $10.67
Class C - Shares of Capital Stock outstanding:
1,477 and 36,263, respectively (note 4).................. $10.20 $10.68
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF OPERATIONS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 1995
VOYAGEUR VOYAGEUR
ARIZONA ARIZONA
TAX FREE INSURED
FUND* TAX FREE FUND
<S> <C> <C>
Investment income:
Interest..................................................... $35,364 $ 7,224,376
Expenses (note 3):
Investment advisory and management fee....................... 3,042 610,077
Dividend-disbursing, administrative and accounting services fees 5,028 181,318
Printing, postage and supplies............................... 1,150 36,118
Audit and accounting fees.................................... 4,850 25,635
Legal fees................................................... 2,000 10,677
Distribution fees - Class A.................................. 1,513 299,473
Distribution fees - Class B.................................. -- 703
Distribution fees - Class C.................................. 20 1,840
Directors' fees.............................................. 560 9,287
Registration fees............................................ 3,390 11,883
Custodian fees............................................... 424 11,258
Amortization of organizational costs......................... -- 1,725
Other ....................................................... 1,011 21,829
Total expenses............................................. 22,988 1,221,823
Less: Expenses waived, absorbed or reduced.................. (20,000) (300,962)
Total net expenses......................................... 2,988 920,861
Investment income - net.................................... 32,376 6,303,515
Realized and unrealized gain (loss) on investments:
Realized gain (loss) on security transactions (note 2)....... 1,116 (4,547,873)
Net change in unrealized appreciation or
depreciation of investments................................ 39,691 24,565,961
Net gain on investments.................................. 40,807 20,018,088
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ $73,183 $26,321,603
</TABLE>
* Period from March 1, 1995 (commencement of operations) to June 30, 1995
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
VOYAGEUR ARIZONA VOYAGEUR ARIZONA
TAX FREE FUND INSURED TAX FREE FUND
PERIOD FROM SIX MONTHS YEAR
MARCH 1, 1995* TO ENDED ENDED
JUNE 30, 1995, JUNE 30, 1995 DECEMBER 31,
<S> <C> <C> <C>
Operations: (UNAUDITED) (UNAUDITED) 1994
Investment income - net....................................... $ 32,376 $ 6,303,515 $ 13,506,683
Realized gain (loss) on investments - net..................... 1,116 (4,547,873) 253,754
Net change in unrealized appreciation or depreciation
of investments............................................... 39,691 24,565,961 (34,753,086)
Net increase (decrease) in net assets resulting
from operations........................................... 73,183 26,321,603 (20,992,649)
Distributions to shareholders from:
Investment income - net:
Class A..................................................... (32,289) (6,652,602) (13,140,123)
Class B..................................................... -- (2,844) N/A
Class C..................................................... (87) (8,668) (5,961)
Excess distributions of net investment income:
Class A..................................................... (519) (190,614) --
Class B..................................................... -- (122) N/A
Class C..................................................... (8) (162) --
Net realized gain on investments:
Class A..................................................... -- -- (854,428)
Class C..................................................... -- -- (839)
Excess distributions of net realized gains:
Class A..................................................... -- -- (1,473,927)
Class C..................................................... -- -- (1,448)
Total distributions....................................... (32,903) (6,855,012) (15,476,726)
Capital share transactions (note 4):
Proceeds from sale of shares:
Class A (note 3)............................................ 3,955,687 15,599,557 55,499,026
Class B..................................................... 10,020 459,639 N/A
Class C..................................................... 15,000 52,335 1,059,908
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................................................. 22,286 3,515,133 6,633,159
Class B................................................. -- 2,489 N/A
Class C................................................. 63 8,920 4,997
Payments for redemption of shares:
Class A..................................................... (2,007,080) (28,252,233) (57,253,847)
Class B..................................................... (20) (10) N/A
Class C (note 3)............................................ -- (28,463) (724,444)
Increase (decrease) in net assets from capital share transactions 1,995,956 (8,642,633)
5,218,799
Total increase (decrease) in net assets..................... 2,036,236 10,823,958 (31,250,576)
Net assets at beginning of year.................................. -- 232,061,531 263,312,107
Net assets at end of year (including undistributed or
(distributions in excess of) net investment income of
$(527), $(190,898) and $360,599 respectively).................. $2,036,236 $242,885,489 $232,061,531
</TABLE>
* Commencement of operations.
See accompanying notes to financial statements.
THE VOYAGEUR FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Voyageur Arizona Tax Free Fund (Arizona Tax Free Fund), a fund within
Voyageur Mutual Funds, Inc. is registered under the Investment Company Act of
1940 (as amended) as a non-diversified open-end management investment company.
Voyageur Arizona Insured Tax Free Fund (Arizona Insured Tax Free 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. Arizona Tax Free Fund and Arizona Insured Tax Free Fund (the Funds)
offer Class A, Class B and Class C Shares. Class A Shares are sold with a
front-end sales charge. Class B Shares (first offered by the Funds on March 1,
1995) may be subject to a contingent deferred sales charge and automatically
convert to Class A Shares after eight years. Class C Shares (first offered on
March 1, 1995 in Arizona Tax Free Fund) 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 are allocated to each class of shares based upon its relative net
assets. Pursuant to its 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. Pursuant to its articles of incorporation,
Voyageur Mutual Funds, Inc. has 100 billion shares of authorized capital stock
that may be issued.
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.
Each of the Funds concentrate its investments in a single state, and
therefore may have more credit risk related to the economic conditions of the
state of Arizona than a portfolio with broader geographical diversification.
Securities Purchased on a When-Issued Basis
Delivery and payment for securities which have been purchased by the Funds 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 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 and net realized
gains (losses) for each 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. The effect on dividend
distributions on certain book-to-tax differences is reflected as excess
distributions of net realized gains in the statement of changes in net assets.
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 each Fund.
For federal income tax purposes, at December 31, 1994, the Arizona Insured
Tax Free Fund had a capital loss carryover of $1,475,375 that will expire in
2003 if not offset by subsequent capital gains. It is unlikely that the Board of
Directors will authorize a distribution of any net realized capital gains until
the available capital loss carryover has been offset or expires.
Distributions to Shareholders
Dividends declared daily from net investment income are payable monthly in
cash or reinvested in additional shares of each 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 $2,452,357 and $469,870 for Arizona Tax Free Fund; and
$79,196,971 and $86,148,878 for Arizona Insured Tax Free Fund during the period
ended June 30, 1995, respectively.
(3) EXPENSES
Each Fund has an investment advisory and management agreement with Voyageur
Fund Managers, Inc.
(Voyageur) under which Voyageur manages the Funds' 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 each Fund at the
annual rate of .50%. In addition, each 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 Arizona Insured Tax Free Fund during the six
months ended June 30, 1995. Portfolio insurance expense, if any, is recognized
over the premium period. Voyageur is obligated to pay all expenses of each 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 Voyageur absorbed
$15,335 pursuant to the contractual 1% expense limitation and, excluding waiver
of distribution fees, voluntarily absorbed $4,665 for Arizona Tax Free Fund.
Each 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 each
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 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 each Fund is obligated to pay Fund Distributors
a monthly distribution fee at an annual rate of .25% of 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 fee
at its sole discretion. During the period ended June 30, 1995, Fund Distributors
voluntarily waived Class A distribution fees of $289,245, Class B distribution
fees of $158, and Class C distribution fees of $301 for Arizona Insured Tax Free
Fund. During the six months ended June 30, 1995 Arizona Insured Tax Free Fund
earned $34,037 in credits on uninvested cash balances held at the custodian. Of
these credits $11,258 were used to reduce expenses for various custodial,
pricing and accounting services provided by the custodial bank and the remaining
$22,779 in credits are included in interest income.
During the period ended June 30, 1995 sales charges paid by Class A
shareholders were $3,507 for Arizona Tax Free Fund and $455,634 for Arizona
Insured Tax Free Fund. Of theses amounts, Fund Distributors received $507 for
Arizona Tax Free Fund and $55,695 from Arizona Insured Tax Free Fund. Contingent
deferred sales charges paid by Class C shareholders were $160 for Arizona
Insured Tax Free Fund.
(4) SHARE TRANSACTIONS
Transactions in shares of capital stock during each period were as follows:
<TABLE>
<CAPTION>
ARIZONA TAX FREE FUND
CLASS A CLASS B CLASS C
PERIOD FROM PERIOD FROM PERIOD FROM
MARCH 1, 1995* TO JUNE 29, 1995* TO MAY 13, 1995* TO
JUNE 30, 1995 JUNE 30, 1995 JUNE 30, 1995
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Shares sold.................... 392,048 973 1,471
Shares issued for reinvested
distributions............... 2,178 -- 6
Shares redeemed................ (197,040) (2) --
Increase in shares outstanding. 197,186 971 1,477
</TABLE>
<TABLE>
<CAPTION>
ARIZONA INSURED TAX FREE FUND
CLASS A CLASS B CLASS C
SIX MONTHS YEAR PERIOD FROM SIX MONTHS PERIOD FROM
ENDED ENDED MARCH 10, 1995* ENDED APRIL 30, 1994*
JUNE 30, 1995 DECEMBER 31, TO JUNE 30, 1995 JUNE 30, 1995 TO DECEMBER 31,
(UNAUDITED) 1994 (UNAUDITED) (UNAUDITED) 1994
<S> <C> <C> <C> <C> <C>
Shares sold.................... 1,494,944 5,184,153 43,017 5,011 102,174
Shares issued for reinvested
distributions............... 339,890 621,420 231 861 494
Shares redeemed................ (2,676,981) (5,571,684) (1) (2,661) (69,616)
Increase (decrease) in
shares outstanding.......... (842,147) 233,889 43,247 3,211 33,052
</TABLE>
* Commencement of operations.
(5) FINANCIAL HIGHLIGHTS
Per share data (rounded to the nearest cent) for a share of capital stock
outstanding and selected information for each period are as follows:
<TABLE>
<CAPTION>
ARIZONA TAX FREE FUND
CLASS A CLASS B CLASS C
PERIOD FROM PERIOD FROM PERIOD FROM
MARCH 1, 1995 (d) JUNE 29, 1995(d) MAY 13, 1995(d)
TO JUNE 30, 1995 TO JUNE 30, 1995 TO JUNE 30, 1995
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Net asset value:
Beginning of period......................... $10.00 $10.30 $10.20
Operations:
Net investment income....................... .18 -- .05
Net realized and unrealized
gain (loss) on investments................ .20 (.10) --
Total from operations................... .38 (.10) .05
Distributions to shareholders:
From net investment income.................. (.18) -- (.05)
Net asset value:
End of period............................... $10.20 $10.20 $10.20
Total investment return (b).................... 3.74% (.97)% .48%
Net assets at end of period (000's omitted).... $2,011 $10 $15
Ratios:
Ratio of expenses to
average daily net assets.................. .48%(e) --% 1.34%(e)
Ratio of net investment income
to average daily net assets............... 5.30%(e) --% 4.77%(e)
Assuming no voluntary reimbursements:
Expenses (c).......................... 1.25%(e) --% 2.00%(e)
Net investment income................. 4.53%(e) --% 4.11%(e)
Portfolio turnover rate (excluding
short-term securities)...................... 23.25% 23.25% 23.25%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
ARIZONA INSURED TAX FREE FUND
CLASS A
SIX MONTHS PERIOD FROM
ENDED APRIL 1, 1991(d)
JUNE 30, 1995 YEAR ENDED DECEMBER 31, TO DECEMBER 31,
(UNAUDITED) 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period.......................... $ 9.86 $11.31 $10.71 $10.39 $10.00
Operations:
Net investment income........................ .27 .55 .58 .61 .50
Net realized and unrealized
gain (loss) on investments................. .84 (1.37) .74 .38 .47
Total from operations.................... 1.11 (.82) 1.32 .99 .97
Distributions to shareholders:
From net investment income................... (.28) (.53)(a) (.58)(a) (.61)(a) (.50)(a)
From distributions in excess of net
investment income.......................... (.01) -- -- -- --
From net realized gains...................... -- (.04) (.14) (.06) (.08)
In excess of net realized gains.............. -- (.06) -- -- --
Total distributions........................ (.29) (.63) (.72) (.67) (.58)
Net asset value:
End of period................................ $10.68 $9.86 $11.31 $10.71 $10.39
Total investment return (b)..................... 11.23% (7.41)% 12.64% 9.86% 9.98%
Net assets at end of period (000's omitted)..... $242,037 $231,736 $263,312 $124,120 $38,322
Ratios:
Ratio of expenses to
average daily net assets................... .77%(e) .72% .59% .35% --%
Ratio of net investment income
to average daily net assets................ 5.25%(e) 5.20% 5.00% 5.60% 6.58%(e)
Assuming no voluntary waivers and
reimbursements and reductions:
Expenses (c)......................... 1.02%(e) .92% 1.03% 1.16% 1.24%(e)
Net investment income................ 5.00%(e) 5.00% 4.56% 4.79% 5.34%(e)
Portfolio turnover rate (excluding
short-term securities)..................... 32.20% 25.18% 33.80% 40.29% 177.66%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
ARIZONA INSURED TAX FREE FUND
CLASS B CLASS C
PERIOD FROM SIX MONTHS PERIOD FROM
MARCH 10, 1995(d) ENDED APRIL 30, 1994(d)
TO JUNE 30, 1995 JUNE 30, 1995 TO DECEMBER 31,
(UNAUDITED) (UNAUDITED) 1994
<S> <C> <C> <C>
Net asset value:
Beginning of period...................... $10.44 $9.86 $10.43
Operations:
Net investment income.................... .14 .23 .27
Net realized and unrealized
gain (loss) on investments............. .23 .84 (.51)
Total from operations................ .37 1.07 (.24)
Distributions to shareholders:
From net investment income............... (.14) (.25) (.25)(a)
From net realized gains.................. -- -- (.04)
In excess of net realized gains.......... -- -- (.04)
Total distributions.................... (.14) (.25) (.33)
Net asset value:
End of period............................ $10.67 $10.68 $9.86
Total investment return (b)................. 3.48% 10.79% (2.38)%
Net assets at end of period (000's omitted). $ 462 $ 387 $ 326
Ratios:
Ratio of expenses to
average daily net assets............... 1.51%(e) 1.59% 1.50%(e)
Ratio of net investment income
to average daily net assets............ 4.05%(e) 4.39%(e) 4.10%(e)
Assuming no voluntary waivers and
reimbursements and reductions:
Expenses (c)..................... 1.75%(e) 1.77%(e) 1.71%(e)
Net investment income............ 3.81%(e) 4.21%(e) 3.89%(e)
Portfolio turnover rate (excluding
short-term securities)................... 32.20% 32.20% 25.18%
</TABLE>
See accompanying notes to Financial Highlights.
NOTES TO FINANCIAL HIGHLIGHTS
(a) For the periods ended December 31, 1994, 1993 and 1992 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, 1991, $.02 per share of the distributions from net investment income
were subject to federal income tax. For the year ended December 31, 1992,
$.01 per share of the distributions from net investment income were subject
to state 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 shown, the advisor and distributor voluntarily absorbed
various fees and expenses for the Funds. In addition, operating expenses
for Arizona Insured Tax Free Fund were further reduced by earnings from
uninvested cash balances held by the custodian. The advisor also paid
$25,631 beyond total fees and expenses for Arizona Insured Tax Free Fund
for the period ended December 31, 1991. The annual contractual expense
limit for each 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 each
Fund's average daily net assets for Class A Shares and 1.00% of each Fund's
average daily net assets for Class B and Class C Shares.
(d) Commencement of operations.
(e) Annualized.
<TABLE>
<CAPTION>
VOYAGEUR ARIZONA TAX FREE FUND
INVESTMENTS IN SECURITIES (UNAUDITED) JUNE 30, 1995
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
ARIZONA MUNICIPAL BONDS (99.4%):
GENERAL OBLIGATION (14.6%):
<S> <C> <C> <C> <C>
$100 Maricopa County Agua Fria Unified School District #216 (FGIC Insured).. 5.30% 07-01-11 $ 95,335
100 Maricopa County Unified School District #80 Chandler G.O.
(FGIC Insured)....................................................... 6.00 07-01-13 101,124
100 Maricopa County Tempe School District #40 (FGIC Insured)............... 6.00 07-01-11 101,542
298,001
EDUCATION (4.9%)
100 Santa Cruz County Nogales Unified School District #1................... 5.80 07-01-13 99,261
HEALTH CARE (13.5%):
100 Maricopa Evangelical Lutheran Health (AMBAC Insured)................... 5.36 12-01-18 92,574
100 Pima County Carondelet Healthcare (MBIA Insured)....................... 5.25 07-01-12 94,086
100 University Medical Center of Arizona (MBIA Insured).................... 5.00 07-01-21 87,631
274,291
HOUSING (5.0%):
100 Scottsdale Municipal Corporate Lease................................... 6.25 11-01-14 101,957
INDUSTRIAL (32.4%):
100 Greenlee County Industrial Development Revenue......................... 5.45 06-01-09 96,205
500 Navajo County.......................................................... 5.88 08-15-28 457,980
100 Pima County Industrial Development Authority Revenue Series A
(MBIA Insured)....................................................... 7.25 07-01-25 105,541
659,726
OTHER REVENUE (9.5%):
100 Salt River Project Series C............................................ 5.50 01-01-28 92,485
100 University of Arizona COP (MBIA Insured)............................... 6.00 07-15-23 100,158
192,643
UTILITIES (19.5%):
100 Arizona Power Authority Hoover Uprating (MBIA Insured)................. 5.25 10-01-17 92,113
100 Gilbert Water & Waste Water Revenue (FGIC Insured)..................... 6.50 07-01-22 104,966
100 Phoenix Civic Water Improvement (AMBAC Insured)........................ 5.50 07-01-21 94,589
100 Pima County Sewer Revenue (FGIC Insured)............................... 6.75 07-01-15 105,747
397,415
TOTAL INVESTMENTS IN SECURITIES (cost: $1,983,603) (c) $2,023,294
</TABLE>
See accompanying notes to investments in securities.
<TABLE>
<CAPTION>
VOYAGEUR ARIZONA INSURED TAX FREE FUND
INVESTMENTS IN SECURITIES (UNAUDITED) JUNE 30,1995
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
ARIZONA MUNICIPAL BONDS (101.0%):
ESCROWED WITH U.S. GOVERNMENT BONDS (1.6%):
<S> <C> <C> <C> <C>
$2,000 Phoenix Street & Highway Pre-Refunded.................................. 6.50% 07-01-02 $ 2,234,820
1,380 Pima County Sewer Revenue Pre-Refunded................................. 6.75 07-01-01 1,536,561
3,771,381
GENERAL OBLIGATION (42.0%):
1,000 Avondale 1993 Project (FGIC Insured)................................... 5.38 07-01-15 944,440
1,000 Chandler Refunding G.O. (FGIC Insured)................................. 7.00 07-01-12 1,073,340
1,000 Cochise County Unified School District #68 (FGIC Insured).............. 7.50 07-01-10 1,191,250
1,000 Coconino Unified School District #15 Tuba City (AMBAC Insured)......... 6.25 07-01-06 1,052,430
1,185 Gila County Unified School District #10 Payson (AMBAC Insured)......... 5.50 07-01-07 1,193,828
1,000 Gila County Unified School District #10 Payson (AMBAC Insured)......... 5.60 07-01-08 1,007,420
1,000 Gila County Unified School District #10 Payson (AMBAC Insured)......... 5.75 07-01-09 1,010,210
1,095 Glendale G.O. (FGIC Insured)........................................... 5.45 07-01-06 1,110,910
5,200 Glendale Unified School District #25 G.O. (FGIC Insured)............... 5.50 07-01-11 5,065,216
6,250 Glendale Unified School District #25 G.O. (FGIC Insured)............... 5.70 07-01-14 6,155,250
2,000 Maricopa Aqua Fria Independent School District #216 (FGIC Insured)..... 6.70 07-01-11 2,106,700
1,060 Maricopa Aqua Fria Independent School District #216 (FGIC Insured)..... 5.30 07-01-11 1,010,551
3,200 Maricopa County Chandler Unified School District #80 (FGIC Insured).... 6.40 07-01-10 3,349,312
1,200 Maricopa County Chandler Unified School District #80 G.O.
(FGIC Insured)....................................................... 5.80 07-01-08 1,228,104
1,000 Maricopa County Chandler Unified School District #80 G.O.
(FGIC Insured)....................................................... 5.80 07-01-09 1,014,140
1,700 Maricopa County Chandler Unified School District #80 G.O.
(FGIC Insured)....................................................... 5.90 07-01-10 1,721,403
2,400 Maricopa County Chandler Unified School District #80 G.O.
(FGIC Insured)....................................................... 6.00 07-01-13 2,426,976
5,250 Maricopa County Gilbert Unified School District #41 G.O.
(FGIC Insured)....................................................... 5.50 07-01-12 5,081,213
6,000 Maricopa County Hospital District #1 (FGIC Insured).................... 6.13 06-01-15 6,102,180
2,775 Maricopa County Madison Unified School District #38 G.O.
(FGIC Insured)....................................................... 5.40 07-01-11 2,674,295
2,750 Maricopa County Madison Unified School District #38 G.O.
(FGIC Insured)....................................................... 5.00 01-01-12 2,507,643
2,250 Maricopa County Madison Unified School District #38 G.O.
(FGIC Insured)....................................................... 5.00 07-01-13 2,040,345
2,575 Maricopa County Madison Unified School District #38 G.O.
(FGIC Insured)....................................................... 5.00 07-01-14 2,322,470
1,790 Maricopa County Tempe #40 (FGIC Insured)............................... 6.00 07-01-11 1,817,602
1,000 Maricopa Creighton Elementary #14 (FGIC Insured)....................... 6.50 07-01-08 1,106,830
1,000 Maricopa Fountain Hills Unified School District #98 (FGIC Insured)..... 6.63 07-01-10 1,059,280
3,000 Maricopa Paradise Valley #69 (MBIA Insured)............................ 6.40 07-01-10 3,150,060
1,000 Maricopa Peoria Unified School District #11 (MBIA Insured)............. 6.40 07-01-10 1,046,660
1,280 Navajo County Unified School District #32 - Blue Ridge (CGIC Insured).. 5.38(d) 07-01-10 1,238,438
1,350 Navajo County Unified School District #32 - Blue Ridge (CGIC Insured).. 5.40(d) 07-01-11 1,301,009
1,115 Navajo County Unified School District #32 - Blue Ridge (CGIC Insured).. 5.50(d) 07-01-12 1,079,153
1,000 Peoria (MBIA Insured).................................................. 5.70 07-01-11 994,810
2,000 Phoenix Secondary Market (MBIA Insured) ............................... 6.38 07-01-13 2,083,480
6,350 Pima County Marana Unified School District (FGIC Insured).............. 5.75 07-01-12 6,315,901
1,000 Pima County Sunnyside Independent School District #12 G.O.
(AMBAC Insured)...................................................... 5.60 07-01-09 999,990
500 Pima County Sunnyside Independent School District #12 G.O.
(AMBAC Insured)...................................................... 5.70 07-01-10 499,995
500 Pima County Sunnyside Independent School District #12 G.O.
(AMBAC Insured)...................................................... 5.70 07-01-11 497,405
7,000 Pima County Tucson Unified School District #1 (FGIC Insured) .......... 6.10 07-01-11 7,140,490
6,500 Pima County Tucson Unified School District #1 (FGIC Insured) .......... 5.40 07-01-13 6,200,090
5,030 Tucson (FGIC Insured).................................................. 6.10 07-01-12 5,158,718
1,000 Yavapai County Community College (FGIC Insured)........................ 5.40 07-01-10 970,030
1,830 Yavapai County Humboldt Unified School District #22 G.O.
(FGIC Insured)....................................................... 5.95 07-01-14 1,844,640
3,000 Yuma (AMBAC Insured)................................................... 6.13 07-01-12 3,059,430
1,100 Yuma County UHSD #70 (FGIC Insured).................................... 5.60 07-01-05 1,128,875
102,082,512
UTILITIES (9.9%):
1,870 Arizona Power Authority Hoover Uprating (MBIA Insured)................. 5.40 10-01-08 1,852,403
1,000 Arizona Power Authority Hoover Uprating (MBIA Insured)................. 5.38 10-01-13 950,630
1,000 Central Arizona Water and Irrigation 1990 (MBIA Insured)............... 6.50 11-01-11 1,038,300
1,000 Chandler Water and Sewer Revenue (FGIC Insured)........................ 7.00 07-01-12 1,073,340
1,000 Gilbert Water and Waste Water Revenue (FGIC Insured)................... 6.50 07-01-12 1,060,660
2,650 Gilbert Water and Waste Water Revenue (FGIC Insured)................... 6.50 07-01-22 2,781,599
1,000 Metro Domestic Water Improvement Pima County (FGIC Insured)............ 6.20 01-01-11 1,031,660
3,000 Pima County Sewer Revenue Series 1994A (FGIC Insured).................. 5.00 07-01-15 2,691,990
2,060 Pima County Sewer Revenue (FGIC Insured)............................... 6.75 07-01-15 2,178,388
1,000 Salt River Project (MBIA Insured)...................................... 5.25 01-01-11 947,430
3,240 Salt River Project (FSA Insured)....................................... 5.75 01-01-19 3,158,546
2,000 Salt River Project (AMBAC Insured)..................................... 6.25 01-01-19 2,038,180
2,000 Salt River Project (AMBAC Insured)..................................... 6.50 01-01-22 2,075,800
1,250 Tucson Water Revenue (FGIC Insured).................................... 5.75 07-01-18 1,228,100
24,107,026
TRANSPORTATION (4.6%):
610 Phoenix Airport Revenue (MBIA Insured)................................. 6.20 07-01-10 632,875
3,000 Phoenix Civic Improvement & Airport (MBIA Insured)..................... 5.75(f) 07-01-02 3,168,750
5,000 Tucson Airport Authority Revenue (MBIA Insured)........................ 5.70 06-01-13 4,907,900
2,500 Tucson Street & Highway User Revenue (MBIA Insured).................... 5.50 07-01-12 2,419,625
11,129,150
INDUSTRIAL (4.6%):
1,000 Maricopa County Stadium District (MBIA Insured)........................ 5.50 07-01-13 964,920
7,000 Peoria Municipal Development Facility Revenue (MBIA Insured)........... 5.20 07-01-10 6,650,350
2,000 Pima County Industrial Development Authority Tucson Medical Center
(MBIA Insured) ..................................................... 5.00 04-01-15 1,785,140
1,625 Pima County Industrial Development Authority Revenue Series A
(MBIA Insured)...................................................... 7.25(f) 07-01-25 1,715,041
11,115,451
HEALTH CARE (7.1%):
2,000 Arizona Health Facility Authority Phoenix Baptist Hospital and
Medical Center (MBIA Insured) ...................................... 6.25 09-01-11 2,059,580
2,000 Maricopa County Catholic Health West (MBIA Insured).................... 5.00 07-01-15 1,783,880
2,200 Maricopa County Catholic Health West (MBIA Insured).................... 6.00 07-01-21 2,194,236
1,300 Navapache Hospital District Refunding Series 1993 (FGIC Insured)....... 5.40 06-01-12 1,244,373
1,505 Pima County Carondelet Healthcare (MBIA Insured)....................... 5.25 07-01-12 1,415,994
1,500 Pima County Carondelet Healthcare (MBIA Insured)....................... 5.25 07-01-13 1,405,275
1,000 Pima County Tucson Medical Center (MBIA Insured)....................... 6.38 04-01-12 1,038,930
1,000 Pima Individual Health Care (MBIA Insured)............................. 6.75 07-01-10 1,070,590
2,500 Scottsdale Memorial Hospital IDA (AMBAC Insured)....................... 5.50 09-01-12 2,418,975
1,445 University of Arizona Medical Center (MBIA Insured).................... 6.25 07-01-10 1,499,245
1,360 University of Arizona Medical Center (MBIA Insured).................... 5.00 07-01-13 1,226,271
17,357,349
HOUSING (2.2%):
1,060 Chandler IDA Multifamily Housing (GNMA Backed)......................... 5.90 07-20-15 1,026,716
4,300 Scottsdale Municipal Property (FGIC Insured)........................... 6.25 11-01-14 4,384,151
5,410,867
EDUCATION (27.6%):
1,500 Arizona State University System (MBIA Insured)......................... 6.13 07-01-15 1,520,280
1,535 Coconino Yavapai County Unified School District #9 (FGIC Insured)...... 5.50 07-01-05 1,564,395
1,000 Coconino Yavapai County Unified School District #9 (FGIC Insured)...... 5.60 07-01-06 1,019,070
750 Glendale IDA G.O. (Connie Lee Insured)................................. 6.75 07-01-09 820,807
1,000 Glendale IDA G.O. (Connie Lee Insured)................................. 7.00 07-01-14 1,094,600
1,000 Maricopa County Alhambra Unified School District #68 (AMBAC Insured)... 6.30 07-01-07 1,090,660
2,655 Maricopa County Alhambra Unified School District #68 (AMBAC Insured)... 5.10 07-01-11 2,473,478
855 Maricopa County Alhambra Unified School District #68 (AMBAC Insured)... 5.13 07-01-12 792,294
2,300 Maricopa County Alhambra Unified School District #68 (AMBAC Insured)... 5.63 07-01-13 2,256,852
750 Maricopa County Alhambra Unified School District #68 (AMBAC Insured)... 5.13 07-01-13 691,793
3,000 Maricopa County Cave Creek School District #93 (FGIC Insured).......... 5.40 07-01-11 2,891,130
910 Maricopa County Chandler Unified School District #80 (FGIC Insured).... 6.25 07-01-11 983,646
1,000 Maricopa County Chandler Unified School District #80 (FGIC Insured).... 5.80 07-01-12 999,990
2,200 Maricopa County Chandler Unified School District #80 (FGIC Insured).... 5.85 07-01-13 2,205,808
5,000 Maricopa County Deer Valley Unified School District #97 (FGIC Insured). 5.20 07-01-07 4,912,550
2,000 Maricopa County Kyrene Elementary School District #28, Zero Coupon
(FGIC Insured)....................................................... 5.90(e) 07-01-10 2,020,380
500 Maricopa County Kyrene Elementary School District #28, Zero Coupon
(FGIC Insured)....................................................... 6.00(e) 07-01-14 504,100
1,850 Maricopa County Littleton Unified School District #65A (FGIC Insured).. 5.30 07-01-13 1,744,180
1,000 Maricopa County Peoria Unified School District #11 (MBIA Insured)...... 7.00 07-01-10 1,078,610
2,000 Maricopa County Peoria Unified School District #11 (AMBAC Insured)..... 6.10 07-01-10 2,057,720
4,400 Maricopa County Queens Creek Unified School District #95
(AMBAC Insured)....................................................... 5.70 07-01-24 4,372,689
1,000 Maricopa County Tempe Unified School District #3 (FGIC Insured)........ 5.40 07-01-12 957,140
675 Maricopa County Tolleson Unified School District #17 G.O.
(AMBAC Insured)....................................................... 5.60 07-01-07 683,748
775 Maricopa County Tolleson Unified School District #17 G.O.
(AMBAC Insured)....................................................... 5.70 07-01-08 784,998
4,000 Maricopa County Tolleson UHSD #214 Series 1993 (FGIC Insured).......... 5.00 07-01-13 3,627,280
1,360 Maricopa County Tolleson Unified School District #214 (FGIC Insured)... 5.75 07-01-14 1,353,200
525 Pima County Catalina Unified School District #16 (AMBAC Insured)....... 7.25 07-01-07 616,502
1,150 Pima County Catalina Unified School District #16 (AMBAC Insured)....... 5.60 07-01-09 1,144,480
725 Pima County Catalina Unified School District #16 (AMBAC Insured)....... 5.70 07-01-10 721,382
1,000 Pima County Community College District (AMBAC Insured)................. 6.40 07-01-07 1,062,040
1,260 Pima County Marana Unified School District #6 (MBIA Insured)........... 5.40 07-01-08 1,248,408
1,000 Pima County Marana Unified School District #6 (MBIA Insured)........... 5.50 07-01-10 980,020
1,500 Pima County Tucson Unified School District #1 (FGIC Insured)........... 7.50 07-01-10 1,777,500
2,650 Pima County Tucson Unified School District #1 (MBIA Insured)........... 5.00 07-01-09 2,494,737
2,875 Pima County Tucson Unified School District #1 (MBIA Insured)........... 5.00 07-01-10 2,671,249
1,000 Resh-Elliot Park State University (MBIA Insured)....................... 6.75 07-01-11 1,070,590
1,205 Santa Cruz County Unified School District Nogales School (FSA Insured). 5.80 07-01-13 1,196,095
1,250 Santa Cruz County Unified School District Nogales School (FSA Insured). 6.10 07-01-14 1,267,838
2,200 Tempe Union High School District G.O. (FGIC Insured)................... 7.00 07-01-08 2,513,500
3,000 University of Arizona (AMBAC Insured).................................. 6.25 06-01-11 3,106,350
715 Yavapai County Humboldt Unified School District #22 (FGIC Insured)..... 5.75 07-01-10 718,067
67,090,156
OTHER REVENUE (1.4%):
1,750 Phoenix Arizona Street & Highway Revenue (FGIC Insured)................ 6.10 07-01-11 1,785,123
1,690 Phoenix Civic Improvement (MBIA Insured)............................... 5.00 07-01-11 1,539,827
3,324,950
TOTAL INVESTMENT IN SECURITIES (cost: $243,958,893) (c) $245,388,842
</TABLE>
See accompanying notes to investments in securities.
VOYAGEUR ARIZONA TAX FREE FUND
VOYAGEUR ARIZONA 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) Investments in bonds, by rating category as a percentage of total bonds,
are as follows:
<TABLE>
<CAPTION>
Aaa/AAA Aa/AA A/A Baa/BBB Total
<S> <C> <C> <C> <C> <C>
Arizona Tax Free Fund.................. 68% 4% 5% 23% 100%
Arizona Insured Tax Free Fund.......... 100% -- -- -- 100%
</TABLE>
(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:
<TABLE>
<CAPTION>
Gross Gross Net
Unrealized Unrealized Unrealized
Appreciation Depreciation Appreciation
<S> <C> <C> <C>
Arizona Tax Free Fund.................. 39,813 (122) 39,691
Arizona Insured Tax Free Fund.......... 4,619,035 (3,189,086) 1,429,949
</TABLE>
(d) At June 30, 1995 the cost of securities purchased on a when-issued basis
was $3,740,530.
(e) The interest rate disclosed for zero coupon issues represents the effective
yield on the date of acquisition.
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
ARIZONA TAX FREE FUND
ARIZONA 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
