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FOR TAX-EXEMPT INCOME
(photo of illustration Tax-Free Arizona Funds
from Tax Exempt Tax-Free California Funds
income Brochure) Tax-Free Colorado Fund
Tax-Free New Mexico Fund
Tax-Free Utah Fund
service and guidance
professional management
goals
1999
Semi-Annual
Report
TAX-FREE ARIZONA FUND
TAX-FREE ARIZONA INSURED FUND
TAX-FREE CALIFORNIA FUND
TAX-FREE CALIFORNIA INSURED FUND
DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London
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professional
professional management
management
MORE THAN 70 YEARS
of investment experience has taught us that disciplined strategies and prudent
risk management are a sound approach to any market environment.
(various photos demonstrating
service and guidance, professional
management and goals)
goals
goals
WHATEVER YOUR GOALS,
the years ahead will be shaped by choices you make today. Delaware offers many
options that can be an appropriate part of a sound investment plan.
service and
guidance
service and guidance
DELAWARE BELIEVES THAT THE GUIDANCE
of a professional financial adviser is vital to your long-term success. We are
committed to providing you and your adviser with the highest quality information
and service.
<PAGE>
A TRADITION OF SOUND INVESTING
commitment
A Commitment
To Our Investors
Delaware Investments has a tradition of money management that dates back to
1929. We have a long and distinguished history of helping individuals and
institutions - including some of America's largest pension funds - reach their
financial goals.
Headquartered in Philadelphia, a block from the nation's oldest stock
exchange, the Delaware organization established its first mutual fund in 1938.
Delaware International Advisers Ltd., our international affiliate, was
established in 1990 and is headquartered in London.
Delaware Investments offers a full range of mutual funds. We also manage
investments for variable annuities and closed-end funds as well as offer a wide
range of retirement plan services for individuals and businesses.
Delaware manages approximately $45 billion in mutual fund assets and
institutional advisory accounts for more than half-a-million investors.
Complete information on any fund offered by Delaware Investments can be found
in each fund's current prospectus. Prospectuses for all funds offered by
Delaware Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.
(photo of computer keyboard)
(photo of glasses, pen and keyboard)
Table of Contents
LETTER TO SHAREHOLDERS Page 2
PORTFOLIO MANAGER'S REVIEW Page 4
Tax-Free Arizona Funds Page 6
Tax-Free California Funds Page 7
Tax-Free Colorado Fund Page 8
Tax-Free New Mexico Fund Page 8
Tax-Free Utah Fund Page 9
PERFORMANCE SUMMARY Page 10
STATEMENTS OF NET ASSETS Page 13
FINANCIAL HIGHLIGHTS Page 32
tax-exempt
income
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for
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2
March 12, 1999
Dear Shareholder:
OVER THE PAST SIX MONTHS, GLOBAL economic uncertainty and foreign credit
problems caused investors to flock to the safety and liquidity of U.S.
Treasuries. As a result, Treasury prices rose, pushing bond yields to record
lows. Municipal bond yields fell, too, but not to the extent Treasuries did.
We were able to take advantage of unique buying opportunities during the past
six months as the gap between yields on municipal bonds and yields on taxable
fixed-income securities narrowed significantly. Traditionally, municipal bonds
have yielded about 83% of what Treasuries with comparable maturities yielded. In
October municipal bond yields were approximately 98% of Treasury yields.
Although the gap has widened since then, municipal bonds are still yielding more
than 83% of what Treasuries are yielding. (Source:
Municipal Market Data).
Increased growth in many areas of our nation led to an unusually strong
supply of high-grade municipal bonds in 1998. The $284 billion supply last year
was the second highest amount on record. Recent state budget surpluses have
given municipalities less incentive to issue new debt and issuance of new
municipal bonds significantly decreased in the early part of 1999. Reduced
supply means that continued demand for state and locally issued bonds could push
prices higher.
We are pleased to report that throughout these conditions, in the first half
of fiscal 1999, each of Delaware Investments' western state tax-exempt mutual
funds has provided what we consider to be attractive returns.
CUMULATIVE TOTAL RETURNS
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Six Months Ended February 28, 1999
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Tax-Free Arizona Fund A Class +2.23%
Tax-Free Arizona Insured Fund A Class +2.28%
Lipper Arizona Muni Debt Fund Average (39 Funds) +1.92%
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Tax-Free California Fund A Class +2.78%
Lipper California Fund Average (110 Funds) +2.09%
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Tax-Free California Insured Fund A Class +2.15%
Lipper California Insured Fund Average (26 Funds) +2.19%
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Tax-Free Colorado Fund A Class +2.16%
Lipper Colorado Municipal Debt Fund Average (28 Funds) +1.94%
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Tax-Free New Mexico Fund A Class +1.44%
Tax-Free Utah Fund A Class +2.41%
Lipper Other States Municipal Debt Fund Average (79 Funds) +1.81%
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Lehman Brothers Municipal Bond Index +2.62%
Lehman Brothers Insured Municipal Bond Index +2.54%
The results shown above are based on net asset value and assume reinvestment of
distributions. For complete performance for all classes, see pages 10 to 12. The
Lehman Brothers Municipal Bond Index and Lehman Brothers Insured Municipal Bond
Index are unmanaged and include no management fees or expenses. It is not
possible to invest directly in any index. Performance of other Fund Classes
varies due to different fees and expenses. Past performance does not guarantee
future results.
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In fact, most of the Funds in this report outperformed their respective peers,
according to Lipper Analytical, as you can see in the table on page 2.
Tax-Free California Fund also outpaced its benchmark, the Lehman Brothers
Municipal Bond Index. Although the other Funds fell short of the broad based
municipal bond indexes, we attribute this to the fact that these indexes include
municipal bonds from all across the country. The environment in individual
states plays a crucial role in a state-specific municipal bond fund's
performance. This is not always reflected in the performance of the indexes.
Toward the end of the period we saw growing investor interest in municipal
bonds -- a trend we anticipate will continue for a number of reasons:
o Investors are increasingly aware of municipal bonds which continue to sell at
attractive levels, and
o Investors seem to recognize that municipal bonds offer the potential to offset
continued volatility in equity markets.
On the following pages, Andrew M. McCullagh, Jr., senior portfolio manager
for Delaware Investments' western state tax-exempt mutual funds, discusses in
further detail the performance of each Fund over the past six months. I strongly
urge you to review his commentary.
We see the remainder of the fiscal year as a time to be cautiously
optimistic. As you and your financial adviser work together to review and
possibly revise your investment portfolio, remember that municipal bonds can
provide solid opportunities for tax-advantaged investing. State and locally
issued bonds can provide an attractive level of current income that is generally
exempt from federal taxes and from state income taxes for residents of states
where the bonds are issued.
Thank you for your continued confidence in Delaware Investments. I look
forward to reporting to you again in the fall.
Sincerely,
/s/ Jeffrey J. Nick
- -------------------------------------
JEFFREY J. NICK
Chairman, President and
Chief Executive Officer
Delaware Investments Family of Funds
Jeffrey J. Nick Named Chairman
On December 17, 1998, Jeffrey J. Nick was named Chairman of the Delaware
Investments Family of Funds. He replaces Wayne A. Stork who has retired as
Chairman of the Board of Directors, but continues to serve as a Board Member.
Mr. Nick was named President and Chief Executive Officer of Delaware Investments
Family of Funds in October 1997. He has been CEO of Lincoln National Investment
Companies, an indirect parent company of Delaware Investments, since October
1996 and previously managed Lincoln's operations in the United Kingdom. Mr. Nick
holds an MBA from the University of Chicago and a Bachelor of Arts degree from
Princeton University.
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4
Portfolio Manager's Review
BY ANDREW M. MCCULLAGH, JR.
Vice President/Senior Portfolio Manager
March 12, 1999
Municipal bond yields rivaled Treasury yields during the first half of fiscal
1999. As overseas economies fell victim to currency destabilization, investors
sought a safe haven for their investments. International investors, who cannot
reap the tax benefits of municipal bonds, flocked to U.S. Treasuries. Increased
demand for these investments caused 30-year U.S. Treasury yields to drop to a
low of 4.72% on October 5th (Source: Bloomberg Business News).
For municipal bond investors like us, lack of investor interest in municipal
bonds provided a unique opportunity. For most of the period, state and locally
issued debt has offered, in our view, extremely attractive income compared to
Treasuries. In October, 30-year AAA general obligation municipal bonds had a
yield of approximately 98% of the yield available from 30-year Treasury bonds
(as shown below). This means that municipal bond investors were able to earn
almost the same income as Treasury investors - with the added benefit of federal
income tax exemption.
Early in 1999 we began to see a shift toward a more traditional relationship.
Although the gap between Treasuries and municipals expanded as 30-year U.S.
Treasury yields increased to 5.65% in February, we still believe municipal bonds
remain attractively priced compared to Treasuries. As of February 28, 1999
municipal bonds offered income at 89% of the level of U.S. Treasuries (as shown
below).
MUNICIPAL BONDS OFFER GOOD VALUE COMPARED TO TREASURIES
Income Potential After Taxes, February 28, 1999
Date Yield Ratio Date Yield Ratio Date Yield Ratio
2/28/89 0.81 6/30/92 0.80 11/30/95 0.87
3/31/89 0.83 7/31/92 0.79 12/31/95 0.88
4/30/89 0.81 8/31/92 0.82 1/31/96 0.87
5/31/89 0.81 9/30/92 0.84 2/29/96 0.84
6/30/89 0.85 10/31/92 0.85 3/31/96 0.86
7/31/89 0.86 11/30/92 0.82 4/30/96 0.84
8/31/89 0.85 12/31/92 0.83 5/31/96 0.84
9/30/89 0.87 1/31/93 0.83 6/30/96 0.83
10/31/89 0.90 2/28/93 0.80 7/31/96 0.82
11/30/89 0.87 3/31/93 0.84 8/31/96 0.81
12/31/89 0.86 4/30/93 0.82 9/30/96 0.80
1/31/90 0.83 5/31/93 0.82 10/31/96 0.83
2/28/90 0.82 6/30/93 0.82 11/30/96 0.84
3/31/90 0.83 7/31/93 0.84 12/31/96 0.82
4/30/90 0.82 8/31/93 0.87 1/31/97 0.82
5/31/90 0.82 9/30/93 0.86 2/28/97 0.81
6/30/90 0.85 10/31/93 0.87 3/31/97 0.81
7/31/90 0.83 11/30/93 0.86 4/28/97 0.81
8/31/90 0.81 12/31/93 0.82 5/30/97 0.80
9/30/90 0.81 1/31/94 0.83 6/30/97 0.80
10/31/90 0.81 2/28/94 0.84 7/31/97 0.82
11/30/90 0.82 3/31/94 0.87 8/29/97 0.81
12/31/90 0.85 4/30/94 0.84 9/30/97 0.82
1/31/91 0.84 5/31/94 0.81 10/31/97 0.85
2/28/91 0.84 6/30/94 0.83 11/30/97 0.86
3/31/91 0.84 7/31/94 0.82 12/31/97 0.85
4/30/91 0.83 8/31/94 0.82 1/30/98 0.86
5/31/91 0.82 9/30/94 0.81 2/28/98 0.86
6/30/91 0.83 10/31/94 0.82 3/31/98 0.87
7/31/91 0.82 11/30/94 0.84 4/30/98 0.87
8/31/91 0.83 12/31/94 0.84 5/31/98 0.87
9/30/91 0.85 1/31/95 0.81 6/30/98 0.90
10/31/91 0.83 2/28/95 0.80 7/31/98 0.89
11/30/91 0.83 3/31/95 0.80 8/31/98 0.94
12/31/91 0.87 4/30/95 0.82 9/30/98 0.97
1/31/92 0.84 5/31/95 0.85 10/31/98 0.96
2/29/92 0.83 6/30/95 0.89 11/30/98 0.96
3/31/92 0.83 7/31/95 0.86 12/31/98 0.97
4/30/92 0.81 8/31/95 0.88 1/31/99 0.95
5/31/92 0.82 9/30/95 0.90 2/28/99 0.89
10/31/95 0.88
The above chart shows the percentage of income that the average 30-year
AAA-rated general obligation bond provided compared to a 30-year U.S. Treasury
bond. The U.S. government does not guarantee principal and interest of municipal
bonds, unlike Treasuries. Municipal bonds have historically had annual default
rates of less than 2%. Source: Municipal Market Data
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Early in the year, strong economic data from the fourth quarter of 1998 was
released. Investor confidence in the equity markets grew and Treasuries lost
some of their bloom. Municipal bond prices remained steady in the beginning of
the year, due, in part, to a lack of supply.
On the pages that follow I will take a closer look at the Funds in the
context of their individual state.
As always, we strive to seek a high level of current income free of federal
and state income taxes for residents of the state where the bond is issued. We
utilize the following strategies for each Fund:
o A bottom-up research-intensive strategy - We start by evaluating specific
bonds rather than focusing on bond sectors, and
o A value-oriented focus - We strive to select "rising stars" - specific bonds
that are selling below fair market value and that we anticipate will increase
in credit quality.
Looking forward to the remainder of fiscal 1999, we expect to see consumer
confidence fade due to a slowing economy. For each of the Funds in this report
we plan to either keep the average duration long or lengthen it, as applicable.
Duration is a measurement of a bond's sensitivity to interest rate changes. We
believe this will put us in an attractive position to increase your Fund's total
return if long-term interest rates decline.
At the same time, securities of longer duration offer potential for
attractive levels of current income.
YIELD SUMMARY
CURRENT A CLASS 30-DAY SEC YIELD*
February 28, 1999
Tax-Free Arizona Fund 4.30%
Tax-Free Arizona Insured Fund 3.49%
Tax-Free California Fund 4.83%
Tax-Free California Insured Fund 3.60%
Tax-Free Colorado Fund 4.01%
Tax-Free New Mexico 4.01%
Tax-Free Utah Fund 3.79%
*For A Class shares based on Securities and Exchange Commission guidelines.
Current 30-day SEC yields for B Class shares are as follows: Tax-Free Arizona
Fund 3.72%, Tax-Free Arizona Insured Fund 2.87%, Tax-Free California Fund 4.25%,
Tax-Free California Insured Fund 2.98%, Tax-Free Colorado Fund 3.41%, Tax-Free
New Mexico Fund 3.40%, Tax-Free Utah Fund 3.19%. Current 30-day SEC yields for C
Class shares are as follows: Tax-Free Arizona Fund 3.70%, Tax-Free Arizona
Insured Fund 2.87%, Tax-Free California Fund 4.26%, Tax-Free California Insured
Fund 3.00%, Tax-Free Colorado Fund 3.41%, Tax-Free New Mexico Fund 3.41%. As of
February 28, 1999 there are no assets in Tax-Free Utah Fund Class C.
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TAX-FREE ARIZONA FUNDS
Booming economic growth in Arizona was a major contributor to Tax-Free Arizona
Fund and Tax-Free Arizona Insured Fund's relatively strong performance during
the first half of fiscal 1999. Tax-Free Arizona Fund provided a total return of
2.23% (for Class A shares with dividends reinvested at net asset value) for the
six months ended February 28, 1999, outperforming its peers in the Lipper
Arizona Muni Debt Fund Average (as shown in the table on page 2).
With an anticipated population boom of 127,500 new residents per year,
Arizona is one of the fastest growing U.S. states. Unemployment is at a scant
3.3% - one full percentage point below the national average. Job growth is
projected to increase by 3.9% and personal annual income is expected to increase
by 8.1% each year until 2002 (Source: Arizona's Economy - Eller Graduate School
of Management). We believe that this economic expansion, along with an increased
need for schools, roads and housing, sets an attractive stage for Arizona
municipal bond investors.
Hospital revenue bonds and housing bonds account for large sector weightings
in each of the Tax-Free Arizona Funds' portfolios at the end of the period. We
were able to take advantage of Arizona's soaring construction industry and a
consolidation trend within the health care sector.
In our last annual review of Tax-Free Arizona Insured Fund, we expressed
concern that municipal bond markets could be a bit more volatile due to
increased issuance of state and local debt - without corresponding increases in
investor demand. Given that view, we took a conservative approach and lowered
your Fund's duration at that time (duration is a measurement of a bond's
sensitivity to interest rate changes). Over the past few months, however, as
investor demand for municipal bonds increased, we purchased bonds with slightly
longer maturities. This enabled us to increase your Fund's yield while incurring
what we believe to be an appropriate level of additional risk.
TAX-FREE ARIZONA FUNDS' PORTFOLIO HIGHLIGHTS
February 28, 1999
Tax-Free Tax-Free
CREDIT QUALITY Arizona Fund Arizona Insured Fund
- --------------------------------------------------------------------------------
AAA 34.9% 100%
AA 16.1% 0%
A 15.2% 0%
BBB 12.3% 0%
BB & Unrated 21.5% 0%
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
Weighted Average Effective Maturity 15.1 years 8.9 years
Weighted Average Duration 9.1 years 6.5 years
Approximately 7.70% of the income generated by Tax-Free Arizona Fund and 0.79%
of the income generated by Tax-Free Arizona Insured Fund for the six months
ended February 28, 1999, was subject to the federal alternative minimum tax.
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Tax-Free Arizona Insured Fund provided a total return of +2.28% for the six
month period ended February 28, 1999 (for Class A shares at net asset value with
distributions reinvested). The Fund's results outpaced its peers in the Lipper
Arizona Muni Debt Fund average as shown on page 2.
TAX-FREE CALIFORNIA FUNDS
Tax-Free California Fund performed well as the state enjoyed a booming economy.
The Fund provided a +2.78% total return for the six month period ended February
28, 1999 (for Class A shares at net asset value with distributions reinvested).
We believe this performance was quite strong, outperforming both the Fund's
peers in the Lipper California Fund average and its benchmark - the unmanaged
Lehman Brothers Municipal Bond Index (as shown on page 2).
Tax-Free California Fund's solid performance resulted primarily from our
focus on bonds with slightly longer maturities. This strategy allowed us to
increase your Fund's total return potential while providing an attractive level
of income. We also anticipate this strategy will put us in an attractive
position if the economy slows and long-term interest rates decline later in the
year.
Conservative budgeting over the past few years has left California in a
strong economic position that we believe bodes well for its ability to meet
principal and interest payments. In light of these attributes, there is strong
investor demand for California municipal bonds.
Tax-Free California Insured Fund provided a total return of +2.15% for the
six months ended February 28, 1999 (for Class A shares with distributions
reinvested). The Fund slightly underperformed its peers in the Lipper California
Insured Fund average (as shown on page 2), due mostly to our focus on bonds with
shorter durations. We maintain a duration that is relatively shorter than
Tax-Free California Fund because a shorter duration is consistent with our
conservative investment strategy.
TAX-FREE CALIFORNIA FUNDS' PORTFOLIO HIGHLIGHTS
February 28, 1999
Tax-Free Tax-Free
CREDIT QUALITY California Fund California Insured Fund
- --------------------------------------------------------------------------------
AAA 35.3% 100%
AA 2.1% 0%
A 27.8% 0%
BBB 12.7% 0%
Unrated 22.1% 0%
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
Weighted Average Effective Maturity 18.7 years 13.5 years
Weighted Average Duration 10.4 years 9.0 years
Approximately 10.95% of the income generated by Tax-Free California Fund and
18.77% of the income generated by Tax-Free California Insured Fund for the six
months ended February 28, 1999, was subject to the federal alternative minimum
tax.
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Although the Fund didn't perform as well as its benchmark, we believe its lower
duration could help preserve principal during periods of bond market volatility.
We believe that during the past six months, high quality California general
obligation municipal bonds underperformed other California general obligation
municipal bonds for some of the following reasons:
o There are more high quality insured bonds available, somewhat saturating the
market and making lower rated bonds more attractive to investors;
o Non-rated California municipal bonds are improving in quality; and,
o A strong economy leads investors to seek higher yields provided by lower
rated municipals.
Remaining consistent with our conservative investment approach, the Fund focused
solely on insured bonds which are rated AAA, the highest quality rating
available, according to Standard and Poor's.
TAX-FREE COLORADO FUND
Colorado's robust economy helped fuel a growth rate that was twice the national
rate. The third fastest growing state in the nation, Colorado exhibits strong
personal income growth, large job gains and healthy residential construction
(source: Colorado Economic chronicle).
Tax-Free Colorado Fund provided a total return of +2.16% for the six-month
period ended February 28, 1999 (for Class A shares at net asset value with
distributions reinvested). The Fund performed well, outpacing the total return
of its peers in the Lipper Colorado Municipal Debt Fund average (shown on page
2). We attribute your Fund's strong performance during the past six months to
the following factors:
o We have increased your Fund's average duration by slightly more than one
year (duration is the measure of a bond's sensitivity to interest rate
changes) and
o We purchased securities of slightly lower credit quality. This allows us to
increase the Fund's income potential with very little added risk to the
portfolio. As of February 28, 1999, 82.6% of the bonds held in the portfolio
were rated investment grade, that is, bonds that are rated BBB or better by
Standard & Poor's.
TAX-FREE NEW MEXICO FUND
A modest growth rate across the state as a whole has enabled New Mexico to
maintain a comfortable level of economic stability. For the six-month period
ended February 28, 1999 Tax-Free New Mexico Fund provided a total return of
1.44% (for Class A shares with distributions reinvested at net asset value). We
believe the Fund did not perform as well as its peer group in the Lipper Other
States Municipal Debt Fund average (as shown on page 2), due mostly to the fact
that New Mexico's economy is vastly different than economies in other U.S.
states.
Over the past decade, we have seen retail, manufacturing and technology
companies move into New Mexico, leading to broader economic diversification.
Historically, however, this area of our nation has relied heavily on revenues
from commodity mining. Declining revenues in the natural resource sector have
created pockets of economic weakness across the state. Copper prices are at
record lows,
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TAX-FREE COLORADO, TAX-FREE NEW MEXICO AND TAX-FREE UTAH FUNDS' PORTFOLIO
HIGHLIGHTS
- --------------------------------------------------------------------------------
February 28, 1999
Tax-Free Tax-Free Tax-Free
CREDIT QUALITY Colorado Fund New Mexico Fund Utah Fund
AAA 21.1% 41.7% 57.5%
AA 14.1% 12.5% 15.3%
A 18.5% 21.2% 9.7%
BBB 28.9% 12.4% 4.9%
Unrated 17.4% 12.2% 12.6%
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
Weighted Average Effective Maturity 10.6 years 14.1 years 9.7 years
Weighted Average Duration 7.2 years 8.3 years 6.6 years
Approximately 8.19% of the income generated by Tax-Free New Mexico Fund and
13.90% of the income generated by Tax-Free Utah Fund for the six months ended
February 28, 1999, was subject to the federal alternative minimum tax. Tax-Free
Colorado Fund did not have any income subject to the alternative minimum tax
during this period.
causing lay-offs and reduced prosperity in the southwestern portion of the
state. In the southeast, where oil and gas production account for a large
percentage of employment, the area suffered as gas and oil prices plummeted over
the past year.
We continue to focus on high yielding mortgage securities with good call
protection which may enable us to withstand some of the risks of mortgage
refinancing. As of February 28, 1999, housing bonds accounted for 26.33% of your
Fund's portfolio.
TAX-FREE UTAH FUND
Economic expansion continues in Utah as corporations and residents prepare for
the 2002 Winter Olympics. This colossal event has inspired increased interest in
Utah, leading to a population growth spurt and a construction boom. Utah boasts
extremely low unemployment and a good business environment -- factors that have
attracted people to the area. All of this has contributed to rising property
values.
Tax-Free Utah Fund provided an attractive total return of 2.41% for the
six-month period ended February 28, 1999 (for Class A shares with dividends
reinvested at net asset value), substantially outperforming its peers in the
Lipper Other States Municipal Debt Fund average (as shown on page 2).
When selecting bonds for your Fund, we strive to select bonds that provide a
high level of income and that also may have the potential to increase in value.
As an individual bond's credit quality improves, there is greater potential for
total return. Due to increased interest in Utah, the state's credit quality
continues to improve, allowing us to increase both your Fund's total return and
income potential.
Over the next few months we may extend your Fund's duration. We believe this
will provide us with the opportunity to increase your Fund's yield with only
minimal additional risk.
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Performance Summary
TAX-FREE ARIZONA FUND
- --------------------------------------------------------------------------------
Average Annual Total Returns Through February 28, 1999
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 3/2/95)
Excluding Sales Charge +9.00% +5.60%
Including Sales Charge +7.96% +1.62%
- --------------------------------------------------------------------------------
Class B (Est. 6/29/95)
Excluding Sales Charge +7.69% +4.82%
Including Sales Charge +7.02% +0.87%
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Class C (Est. 5/13/95)
Excluding Sales Charge +7.84% +4.90%
Including Sales Charge +7.84% +3.91%
TAX-FREE ARIZONA INSURED FUND
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Average Annual Total Returns Through February 28, 1999
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 4/1/91)
Excluding Sales Charge +7.76% +5.99% +5.17%
Including Sales Charge +7.24% +5.19% +1.21%
- --------------------------------------------------------------------------------
Class B (Est. 3/10/95)
Excluding Sales Charge +6.80% +4.48%
Including Sales Charge +6.17% +0.48%
- --------------------------------------------------------------------------------
Class C (Est. 5/26/94)
Excluding Sales Charge +6.48% +4.48%
Including Sales Charge +6.48% +3.48%
All performance includes reinvestment of distributions and applicable sales
charge as described below. Return and share value will fluctuate so that shares,
when redeemed, may be worth more or less than the original cost. Past
performance is not a guarantee of future results. Performance for Class B and C
shares excluding sales charge assumes either the investment was not redeemed or
that contingent deferred sales charges did not apply. Returns reflect a
voluntary expense limitation in effect at the time. Returns would have been
lower without the limitation.
Class A shares have a 3.75% maximum front-end sales charge and a 0.25% 12b-1
fee.
Class B shares do not have a front-end sales charge but are subject to a 1%
annual distribution fee and service fee. They are also subject to a contingent
deferred sales charge of up to 4% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If shares are
redeemed within 12 months, a 1% contingent deferred sales charge applies.
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TAX-FREE CALIFORNIA FUND
- --------------------------------------------------------------------------------
Average Annual Total Returns Through February 28, 1999
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 3/2/95)
Excluding Sales Charge +9.10% +6.80%
Including Sales Charge +8.06% +2.81%
- --------------------------------------------------------------------------------
Class B (Est. 8/23/95)
Excluding Sales Charge +9.15% +5.89%
Including Sales Charge +8.46% +1.89%
- --------------------------------------------------------------------------------
Class C (Est. 4/9/96)
Excluding Sales Charge +9.13% +6.10%
Including Sales Charge +9.13% +5.10%
TAX-FREE CALIFORNIA INSURED FUND
- --------------------------------------------------------------------------------
Average Annual Total Returns Through February 28, 1999
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 10/15/92)
Excluding Sales Charge +7.16% +5.98% +5.45%
Including Sales Charge +6.52% +5.17% +1.50%
- --------------------------------------------------------------------------------
Class B (Est. 3/1/94)
Excluding Sales Charge +5.52% +4.76%
Including Sales Charge +5.19% +0.76%
- --------------------------------------------------------------------------------
Class C (Est. 4/12/95)
Excluding Sales Charge +6.45% +4.69%
Including Sales Charge +6.45% +3.69%
Please turn to page 10 for important additional information. All performance
includes reinvestment of distributions, and sales charges as described on page
10. Past performance is not a guarantee of future results.
<PAGE>
for
tax-exempt income
12
TAX-FREE COLORADO FUND
- --------------------------------------------------------------------------------
Average Annual Total Returns Through February 28, 1999
Lifetime Ten Years Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 4/23/87)
Excluding Sales Charge +8.20% +8.17% +6.52% +5.18%
Including Sales Charge +7.85% +7.76% +5.72% +1.20%
- --------------------------------------------------------------------------------
Class B (Est. 3/22/95)
Excluding Sales Charge +7.45% +4.48%
Including Sales Charge +6.83% +0.48%
- --------------------------------------------------------------------------------
Class C (Est. 5/6/94)
Excluding Sales Charge +7.04% +4.40%
Including Sales Charge +7.04% +3.40%
TAX-FREE NEW MEXICO FUND
- --------------------------------------------------------------------------------
Average Annual Total Returns Through February 28, 1999
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 10/5/92)
Excluding Sales Charge +7.39% +6.23% +4.84%
Including Sales Charge +6.75% +5.42% +0.93%
- --------------------------------------------------------------------------------
Class B (Est. 3/3/94)
Excluding Sales Charge +5.69% +4.05%
Including Sales Charge +5.37% +0.05%
- --------------------------------------------------------------------------------
Class C (Est. 5/7/96)
Excluding Sales Charge +7.41% +4.15%
Including Sales Charge +7.41% +3.15%
TAX-FREE UTAH FUND
- --------------------------------------------------------------------------------
Average Annual Total Returns Through February 28, 1999
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 10/5/92)
Excluding Sales Charge +7.79% +6.28% +5.58%
Including Sales Charge +7.15% +5.46% +1.64%
- --------------------------------------------------------------------------------
Class B (Est. 5/27/95)
Excluding Sales Charge +6.42% +4.79%
Including Sales Charge +5.74% +0.80%
Please turn to page 10 for important additional information. All performance
includes reinvestment of distributions, and sales charges as described on page
10. Past performance is not a guarantee of future results.
<PAGE>
for tax-exempt income 13
Financial Statements
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE - VOYAGEUR TAX-FREE ARIZONA FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------
MUNICIPAL BONDS - 99.66%
GENERAL OBLIGATION BONDS - 20.61%
Eagle Mountain Community Facility District
6.50% 7/1/21 ...................................... $1,010,000 $1,104,395
Goodyear, Arizona Community Facilities
5.00% 7/15/23 ..................................... 275,000 262,323
Maricopa County Unified School District #8
(Osborn) 5.875% 7/1/14 (FGIC) ..................... 300,000 328,437
Maricopa County Unified School District
#40 (Glendale) 6.30% 7/1/11 ....................... 500,000 555,150
Phoenix, Arizona 4.75% 7/1/23 ........................ 1,000,000 967,710
Scottsdale, Arizona Facilities District
(VIA Linda Road Community)
5.75% 7/15/23 ..................................... 1,155,000 1,152,055
Tucson, Arizona 5.375% 7/1/20 ........................ 250,000 258,023
----------
4,628,093
----------
HOSPITALS REVENUE BONDS - 22.77%
Maricopa County, Arizona Hospital Revenue
(Sun Health Corp.) 6.125% 4/1/18 .................. 600,000 645,030
Maricopa County, Arizona Industrial Development
(Catholic Healthcare West PJ-A)
5.00% 7/1/16 ...................................... 1,000,000 978,390
Maricopa County, Arizona Industrial Development
Authority Hospital Facilities Revenue (Mayo
Clinic Hospital) 5.25% 11/15/37 ................... 750,000 743,798
Mesa, Arizona Individual Development Authority
Revenue (Lutheran Health Systems)
Series A-1 5.00% 10/1/19 .......................... 1,000,000 991,240
Show Low, Arizona Industrial Development
Authority Hospital Revenue (Navapache
Regional Medical Center) Series A
5.50% 12/1/18 ..................................... 750,000 773,265
Winslow, Arizona Industrial Development Authority
Hospital Revenue (Winslow Memorial
Hospital Project) 5.50% 6/1/22 .................... 1,000,000 981,260
----------
5,112,983
----------
HOUSING REVENUE BONDS - 18.58%
Maricopa County, Arizona Industrial Development
Authority Multifamily Family Housing
Revenue (Pines at Camelback Apartments
Project A) 5.450% 5/1/28 .......................... 750,000 761,228
Peoria Casa Del Rio Multi Family Housing
7.30% 2/20/28 ..................................... 500,000 548,120
Phoenix Industrial Development Authority
(Chris Ridge) 6.80% 11/1/25 ....................... 125,000 131,973
Pima County, Arizona IDA Revenue Series A
7.25% 7/1/25 ...................................... 725,000 790,178
Pima County Arizona Multifamily Revenue
(Willowick Apartments Project)
5.50% 3/1/28 ...................................... 500,000 508,845
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Tempe Multifamily Mortgage Revenue IDA
6.125% 6/1/10 ..................................... $200,000 $213,160
Tucson Industrial Development Authority
(Los Portales Apartment)
5.90% 12/20/31 (GNMA) ............................. 600,000 630,930
Yavapai County, Arizona Industrial Development
Authority (Residential Care Facilities -
Margaret T Morris Center) Series A
5.40% 2/20/38 (GNMA) .............................. 585,000 587,837
----------
4,172,271
----------
LEASE/CERTIFICATES OF PARTICIPATION - 0.96%
Scottsdale Municipal Property (Corporation Lease)
6.25% 11/1/14 (FGIC) .............................. 100,000 107,939
University of Arizona Certificate of Participation
6.00% 7/15/23 ..................................... 100,000 108,201
----------
216,140
----------
POLLUTION CONTROL REVENUE BONDS - 9.38%
Coconimo County, Arizona (PCR Nevada Power)
6.375% 10/1/36 .................................... 1,250,000 1,353,800
Maricopa County, Arizona (Pollution Control)
5.75% 11/1/22 ..................................... 750,000 753,165
----------
2,106,965
----------
POWER AUTHORITY REVENUE BONDS - 0.46%
Salt River Project Series C 5.50% 1/1/28 ............. 100,000 102,301
----------
102,301
----------
TRANSPORTATION REVENUE BONDS - 7.70%
Phoenix, Arizona (Civic Improvement Airport Revenue
Senior Lien) Series A 5.00% 7/1/25 ................ 1,750,000 1,729,683
----------
1,729,683
----------
WATER & SEWER REVENUE BONDS - 11.82%
Gilbert Water & Waste Water Revenue
6.50% 7/1/22 (FGIC) ............................... 100,000 111,166
Gilbert Water & Waste Water System Revenue
(Connection Development Fee)
6.875% 4/1/16 ..................................... 1,000,000 1,035,940
Pima, Arizona Metropolitan (Domestic Water
Revenue) 4.875% 1/1/19 ............................ 1,000,000 978,170
Tucson, Water Revenue Series A
5.75% 7/1/18 ...................................... 500,000 528,180
----------
2,653,456
----------
OTHER REVENUE BONDS - 7.38%
Guadalupe, Arizona Municipal Property Revenue
5.30% 7/1/18 ...................................... 905,000 903,842
Virgin Islands, Public Finance Authority Revenue
(Senior Lien) Series A 5.50% 10/1/22 .............. 750,000 752,513
----------
1,656,355
----------
Total Municipal Bonds (cost $21,744,657) ............. 22,378,247
----------
<PAGE>
14 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
------------------------------
SHORT-TERM INVESTMENTS - 4.70%
Norwest Advantage Municipal
Money Market Fund ............................. 1,055,890 $ 1,055,890
-----------
Total Short-Term Investments
(cost $1,055,890) ............................. 1,055,890
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 104.36%
(cost $22,800,547) ........................................ 23,434,137
LIABILITIES NET OF RECEIVABLES
AND OTHER ASSETS - (4.36%) ................................ (979,711)
-----------
NET ASSETS APPLICABLE TO 2,029,141 SHARES
($.01 par value) outstanding - 100.00% .................... $22,454,426
===========
NET ASSET VALUE - TAX-FREE ARIZONA FUND A CLASS
($16,519,773 / 1,492,714 shares) .......................... $11.07
======
NET ASSET VALUE - TAX-FREE ARIZONA FUND B CLASS
($5,182,489 / 468,577 shares) ............................. $11.06
======
NET ASSET VALUE - TAX-FREE ARIZONA FUND C CLASS
($752,164 / 67,850 shares) ................................ $11.09
======
- -----------------------------
Summary of Abbreviations:
FGIC -Insured by the Financial Guaranty Insurance Company
GNMA -Insured by the Government National Mortgage Association
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
Common stock, $.01 par value, 100,000,000,000
shares authorized to the Fund with 10,000,000,000
shares allocated to Tax-Free Arizona Fund A Class,
10,000,000,000 shares allocated to Tax-Free Arizona
Fund B Class and 10,000,000,000 shares allocated
to Tax-Free Arizona Fund C Class .......................... $21,719,714
Distributions in excess of net investment income ............. (1,090)
Accumulated net realized gain on investments ................. 102,212
Net unrealized appreciation of investments ................... 633,590
-----------
Total net assets ............................................. $22,454,426
===========
NET ASSET VALUE AND OFFERING PRICE - TAX-FREE
ARIZONA FUND A CLASS
Net asset value per share (A) ................................ $11.07
Sales charge (3.75% of offering price or 3.88% of amount
invested per share) (B) ................................... 0.43
------
Offering price ............................................... $11.50
======
- -----------------------------
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current prospectus for purchases of $100,000 or
more.
See accompanying notes
<PAGE>
VOYAGEUR INSURED FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE
ARIZONA INSURED FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------
MUNICIPAL BONDS - 98.88%
GENERAL OBLIGATION BONDS - 32.30%
**Cave Creek Unified School District
#93, Inverse Floater
7.57% 7/1/11(FGIC) ............................... $1,500,000 $ 1,642,800
Chandler 7.00% 7/1/12 (FGIC) ...................... 1,000,000 1,075,090
Cochise County Unified School District (FGIC)
7.50% 7/1/10 ..................................... 1,000,000 1,282,410
**Glendale Unified School District #205,
Inverse Floater 7.77% 7/1/11 ..................... 2,600,000 2,933,710
Maricopa County Chandler Unified School
District #80 5.80% 7/1/12 (FGIC) ................. 635,000 685,260
5.85% 7/1/13 ..................................... 1,380,000 1,487,005
6.00% 7/1/13 ..................................... 2,400,000 2,698,848
Maricopa County Gilbert Unified School District
#41 6.25% 7/1/15 (FSA) ........................... 1,250,000 1,421,175
Maricopa County Kyrene Unified School District
#28 5.90% 7/1/10 (FGIC) .......................... 2,000,000 2,151,780
Maricopa County Madison Unified School District
#38 5.80% 7/1/15 (MBIA) .......................... 3,150,000 3,427,767
Maricopa County Osborn Unified School District
#28 5.875% 7/1/14 (FGIC) ......................... 3,500,000 3,831,765
Maricopa County Peoria Unified School District
#11 7.00% 7/1/10 (AMBAC) ......................... 1,000,000 1,076,480
6.10% 7/1/10 ..................................... 2,000,000 2,196,620
Maricopa County Queens Creek Unified School
District #95 5.70% 7/1/14 (AMBAC) ................ 4,440,000 4,761,234
Maricopa Creighton Elementary Unified School
District #114 Series 91
6.50% 7/1/08 (FGIC) .............................. 1,000,000 1,169,190
Mohave County Unified School District #1
(Lake Havasu) 5.90% 7/1/15 (FGIC) ................ 5,000,000 5,448,950
Peoria 5.70% 7/1/11 (MBIA) ........................ 1,000,000 1,061,370
Phoenix, Arizona 6.38% 7/1/13 (MBIA) .............. 2,000,000 2,180,240
Pima County Marana Unified School District #6
5.75% 7/1/12 (FGIC) .............................. 6,350,000 6,882,829
**Pima County Tucson Unified School District #1
Inverse Floater 7.57% 7/1/13 (FGIC) .............. 3,000,000 3,259,800
Pinal County Apache Junction Unified School
District #43 5.85% 7/1/15 (FGIC) ................. 2,000,000 2,173,420
Santa Cruz County Nogales Unified School
District #1 6.10% 7/1/14 (AMBAC) ................. 1,250,000 1,387,413
Tucson, Arizona 6.10% 7/1/12 (FGIC) ............... 4,890,000 5,285,992
-----------
59,521,148
-----------
HIGHER EDUCATION REVENUE BONDS - 6.88%
Arizona State University System (MBIA)
6.125% 7/1/15 .................................. 1,500,000 1,590,180
<PAGE>
for tax-exempt income 15
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------
MUNICIPAL BONDS (CONTINUED)
HIGHER EDUCATION REVENUE BONDS (CONTINUED)
Glendale, Arizona Development Authority
Educational Facilities (American Graduate
School International) 5.875%
7/1/15 (Connie Lee) .............................. $3,000,000 $ 3,274,530
5.625% 7/1/20 .................................... 1,500,000 1,585,080
Glendale Industrial Development Authority
(Midwestern University) Series A
6.00% 5/15/26 (Connie Lee) ....................... 2,700,000 2,998,080
University Of Arizona 6.25% 6/1/11
(AMBAC) .......................................... 3,000,000 3,237,870
-----------
12,685,740
-----------
HOSPITAL REVENUE BONDS - 18.39%
Arizona Health Facilities Hospital Revenue
4.75% 10/1/30 .................................... 7,500,000 7,078,725
Maricopa County Hospital District #1
6.125% 6/1/15 (FGIC) ............................. 5,500,000 6,007,650
Maricopa County Industrial Development
Authority (Grove Apartments) 6.15%
7/20/28 (GNMA) ................................... 1,250,000 1,246,100
Maricopa County Industrial Development
Authority (Baptist Hospital) 5.50%
9/1/13 (MBIA) .................................... 3,080,000 3,249,924
5.50% 9/1/16 ..................................... 1,000,000 1,044,300
Mesa, Arizona Individual Development Authority
Revenue (Lutheran Health Systems)
Series A-1 5.00% 10/1/19 ......................... 3,000,000 2,973,720
Mohave County Industrial Development
Authority (Baptist Hospital)
5.75% 9/1/26 (MBIA) .............................. 1,100,000 1,187,637
Mohave County Industrial Development
Authority (Chris/Silver Ridge)
6.375% 11/1/31 (GNMA) ............................ 1,300,000 1,419,639
Phoenix, Arizona Industrial Development
Authority Hospital Revenue (John C.
Lincoln Health Series B)
5.75% 12/1/16 .................................... 4,110,000 4,470,447
Pima County Tucson Medical Center
6.375% 4/1/12 (MBIA) ............................. 1,000,000 1,081,550
Pima Individual Health Care
6.75% 7/1/10 (MBIA) .............................. 1,000,000 1,075,460
**Scottsdale Industrial Development Authority
Hospital Revenue, Inverse Floater
7.77% 9/1/12 (AMBAC) ............................. 1,250,000 1,490,588
University of Arizona Medical Center
6.25% 7/1/10 (MBIA) .............................. 1,445,000 1,559,300
-----------
33,885,040
-----------
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS - 5.30%
Chandler Industrial Development Authority
Multifamily Housing 5.90%
7/20/15 (GNMA) ................................... $1,060,000 $ 1,104,456
Maricopa County, Arizona Industrial Development
Authority Multifamily Housing Revenue (Villas
De Merced Apartment Project)
5.45% 12/20/27 (GNMA) ............................ 535,000 538,831
5.50% 12/20/37 ................................... 1,145,000 1,154,011
Pima County, Arizona Industrial Development
Authority Revenue Series A
7.25% 7/1/25 (MBIA) .............................. 1,000,000 1,089,900
Tucson Industrial Development Authority
Los Portales Apartment 5.90%
12/20/31 (GNMA) .................................. 3,670,000 3,859,188
Yuma Arizona Industrial Development Authority
Multifamily Revenue (Mortgage-Government
National Mortgage Association Regency
Apartments A ) 5.50% 12/20/32 .................... 2,000,000 2,027,540
-----------
9,773,926
-----------
LEASE/CERTIFICATES OF PARTICIPATION - 3.47%
Oro Valley Common Trust Funds Partnership
5.75% 7/1/11 (MBIA) .............................. 1,000,000 1,088,360
5.75% 7/1/17 ..................................... 1,000,000 1,087,710
Scottsdale Municipal Property Corporation Lease
6.25% 11/1/14 (FGIC) ............................. 3,900,000 4,209,621
-----------
6,385,691
-----------
POWER AUTHORITY REVENUE BONDS - 1.16%
Salt River Agricultural Improvement & Power
Project 6.25% 1/1/19 (FGIC) ...................... 2,000,000 2,140,900
-----------
2,140,900
-----------
*PRE-REFUNDED/ESCROWED TO MATURITY - 7.75%
Arizona Health Facility Authority Phoenix Baptist
Hospital & Medical Center (Escrowed to
Maturity) 6.25% 9/1/11 (MBIA) .................... 2,000,000 2,172,300
Glendale Educational Facilities (American
Graduate School) 7.00%
7/1/14-05 (Connie Lee) ........................... 1,000,000 1,177,030
Maricopa County Paradise Valley Elementary
School District #69 6.40%
7/1/10-01 (MBIA) ................................. 3,000,000 3,255,090
Phoenix, Arizona Street & Highway Revenue
6.50% 7/1/09-02 (FGIC) ........................... 2,000,000 2,212,440
Salt River Agricultural Improvement & Power
Project 6.50% 1/1/22-01 (AMBAC) .................. 2,000,000 2,146,460
Yuma, Arizona 6.125%
7/1/12-03 (AMBAC) ................................ 3,000,000 3,313,890
-----------
14,277,210
-----------
<PAGE>
16 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------
MUNICIPAL BONDS (CONTINUED)
TRANSPORTATION REVENUE BONDS - 7.65%
**Chandler Street & Highway Revenue, Inverse
Floater 7.02% 7/1/15 (MBIA) ..................... $ 1,000,000 $ 1,041,610
Phoenix, Arizona Civic Improvement Airport
Revenue Senior Lien (Series A)
5.00% 7/1/25 (FSA) .............................. 2,250,000 2,223,878
Puerto Rico Commonwealth Highway &
Transportation Authority Revenue, Series A
5.00% 7/1/38 (MBIA) ............................. 5,800,000 5,740,434
Tucson Airport Authority Revenue
5.70% 6/1/13 (MBIA) ............................. 4,750,000 5,088,295
-----------
14,094,217
-----------
UTILITY REVENUE BONDS - 6.70%
Mesa, Arizona Utility Systems Revenue
5.25% 7/1/16 (FGIC) ............................. 12,000,000 12,336,360
-----------
12,336,360
-----------
WATER & SEWER REVENUE BONDS - 4.44%
Chandler Water & Sewer Revenue
7.00% 7/1/12 (FGIC) ............................. 1,000,000 1,075,090
Gilbert Water & Waste Water Revenue
6.50% 7/1/12 (FGIC) ............................. 1,000,000 1,119,260
6.50% 7/1/22 (FGIC) ............................. 2,650,000 2,945,898
Pima County Special Water Improvement District
6.20% 1/1/11 (FGIC) ............................. 1,000,000 1,077,030
Pima, Arizona Metropolitan Water & Sewer
4.875% 1/1/19 ................................... 1,000,000 978,170
Prescott Valley, Arizona Water District Revenue
4.875% 1/1/19 ................................... 1,000,000 976,940
-----------
8,172,388
-----------
OTHER REVENUE BONDS - 4.84%
Lake Havasu, Arizona Excise Tax Revenue
4.10% 6/1/08 .................................... 1,000,000 991,250
Maricopa County Stadium District
5.50% 7/1/13 (MBIA) ............................. 2,000,000 2,104,440
Page, Arizona Municipal Property Excise
Tax Revenue 4.625% 7/1/19 ....................... 2,965,000 2,831,248
**Peoria Municipal Development Facility Revenue,
Inverse Floater 7.17% 7/1/10 (MBIA) ............. 2,750,000 2,989,003
-----------
8,915,941
-----------
Total Municipal Bonds
(cost $168,583,174) ............................. 182,188,561
-----------
<PAGE>
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.88%
(cost $168,583,174) ......................................... $182,188,561
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.12% .................................. 2,070,122
------------
NET ASSETS APPLICABLE TO 15,949,143 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ...................... $184,258,683
============
NET ASSET VALUE - TAX-FREE ARIZONA INSURED
FUND A CLASS ($177,103,440 / 15,329,784 SHARES) ............. $11.55
======
NET ASSET VALUE - TAX-FREE ARIZONA INSURED
FUND B CLASS ($5,757,749 / 498,464 SHARES) .................. $11.55
======
NET ASSET VALUE - TAX-FREE ARIZONA INSURED
FUND C CLASS ($1,397,494 / 120,895 SHARES) .................. $11.56
======
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
Common stock, $.01 par value, 10,000,000,000 shares
authorized to the Fund with 1,000,000,000 shares
allocated to Tax-Free Arizona Insured Fund A Class,
1,000,000,000 shares allocated to Tax-Free
Arizona Insured Fund B Class and 1,000,000,000
shares allocated to Tax-Free Arizona Insured
Fund C Class ................................................ $172,556,357
Distributions in excess of net investment income ............... (253)
Accumulated net realized loss on investments ................... (1,902,808)
Net unrealized appreciation of investments ..................... 13,605,387
------------
Total Net Assets ............................................... $184,258,683
============
- ------------------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
**Inverse Floaters represent a security that pays interest at rates that
increase (decrease) with a decrease (increase) in a specific index. Interest
rates disclosed are in effect February 28, 1999.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
Connie Lee - Insured by the College Construction Insurance Association
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE -
TAX-FREE ARIZONA INSURED FUND A CLASS
Net asset value per share (A) .................................. $11.55
Sales charge (3.75% of offering price or 3.90% of
amount invested per share) (B) .............................. 0.45
------
Offering price ................................................. $12.00
======
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current prospectus for purchases of $100,000 or
more.
See accompanying notes.
<PAGE>
for tax-exempt income 17
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE CALIFORNIA FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------
MUNICIPAL BONDS - 98.90%
GENERAL OBLIGATION BONDS - 1.98%
California State Veterans Bonds (Series BH)
5.40% 12/1/15 (FSA) ............................... $150,000 $ 154,301
Fowler, California School District
5.20% 7/1/20 ...................................... 500,000 521,705
----------
676,006
----------
HIGHER EDUCATION REVENUE BONDS - 1.50%
Community Colleges (Hayward Foundation Auxillary
Organization) 5.25% 8/1/25 (MBIA) ................. 500,000 509,620
----------
509,620
----------
HOSPITAL REVENUE BONDS - 29.53%
California Health Facilities (Valleycare Hospital)
5.50% 5/1/20 ...................................... 250,000 258,435
California Health Facilities Finance Authority
Revenue (Catholic Healthcare West Series A)
5.00% 7/1/28 ...................................... 1,500,000 1,450,620
California Health Facilities Finance Authority
Revenue (Northern California Presbyterian)
5.40% 7/1/28 ...................................... 500,000 501,050
Intercommunity Hospital Financing Authority
California 5.25% 11/1/19 .......................... 2,000,000 1,992,360
Mendocino Coast Health Care District
5.88% 2/1/20 ...................................... 100,000 106,447
North Kern South Tulare,California Hospital
District Health Facility Revenue
6.00% 4/1/20 ...................................... 250,000 259,755
Northern Inyo County, California Local Hospital
District Revenue 5.30% 12/1/28 .................... 1,370,000 1,367,849
Rancho Mirage Joint Power Financing Authority
(Eisenhower Medical Center)
5.38% 7/1/22 (MBIA) ............................... 100,000 102,664
San Benito,California Health Care Revenue
5.45% 10/1/28 ..................................... 2,500,000 2,422,125
Sierra View Local Health Care District
California Revenue 5.25% 7/1/18 ................... 1,500,000 1,485,510
Stockton,California Health Facilities
(Dameron Hospital Association Series A)
5.70% 12/1/14 ..................................... 100,000 103,817
Valleycare Hospital California Health Facilities
Finance Authority Revenue 6.75% 6/1/15 ............ 40,000 43,079
----------
10,093,711
----------
HOUSING REVENUE BONDS - 17.33%
Abag, California Finance Authority Multifamily
Housing Revenue (Sundale Arms
Apartments PJ-A) 5.20% 3/1/29 ..................... 1,875,000 1,852,538
California Housing Financing Agency Home
Mortgage Revenue (Series 96H)
6.25% 8/1/27 (FHA) ................................ 95,000 100,675
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
California Housing Financing Agency Home
Mortgage Revenue (Series 96K) 6.15%
8/1/16 (MBIA) .................................... $ 450,000 $ 476,321
California Housing Finance Agency Single Family
6.00% 8/1/20 (MBIA) .............................. 95,000 100,672
California Statewide Communities Development
Authority 5.25% 5/15/25 .......................... 750,000 768,023
Chula Vista, California Multifamily Housing
Revenue (Gateway Town Center Series A)
5.30% 7/1/32 ..................................... 1,000,000 1,009,560
Fairfield, California Housing Revenue Authority
(Creekside Estate Mobile) 5.63% 9/1/23 ........... 1,000,000 1,000,080
Fresno, California Multifamily Housing Revenue
(Woodlands Apartments Project A)
6.65% 5/20/17 (GNMA) ............................. 100,000 112,140
Los Angeles, California Housing Authority
Multifamily Housing Revenue (The Palms
Apartments) Series E 5.30% 7/1/18 ................ 500,000 505,480
----------
5,925,489
----------
LEASE/CERTIFICATES OF PARTICIPATION - 8.74%
Alameda City Hall Redevelopment
6.20% 5/1/25 ..................................... 50,000 53,292
Bakersfield, California Certificates of Participation
Convention Center Expansion Project
5.80% 4/1/17 (MBIA) .............................. 350,000 382,214
California State Public Works (California State
University Series C) 5.40% 10/1/22 ............... 300,000 308,757
Hayward Civic Center Project
5.25% 8/1/26 (MBIA) .............................. 100,000 101,779
Moreno Valley, California School District
5.60% 3/1/17 ..................................... 100,000 105,735
San Diego California, Certificate of Participation
5.70% 2/1/28 ..................................... 1,500,000 1,501,200
San Jose Convention Center Finance Authority
Revenue 6.38% 9/1/13 ............................. 100,000 107,695
Santa Monica Parking Authority Lease Revenue
6.38% 7/1/16 ..................................... 100,000 108,816
Shafter Powers Finance Lease Revenue
6.05% 1/1/17 ..................................... 100,000 107,539
West Basin, California Municipal Water District
Revenue Certificate of Participation Refunding
1992 Series A 5.50% 8/1/22 ....................... 200,000 210,360
----------
2,987,387
----------
<PAGE>
18 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------------
MUNICIPAL BONDS (CONTINUED)
POLLUTION CONTROL REVENUE BONDS - 1.49%
California Pollution Control Authority Facilities
Revenue (Mobil Oil Project)
5.50% 12/1/29 .................................... $500,000 $ 510,925
----------
510,925
----------
*Pre-Refunded Bonds - 0.50%
Berkeley Alta Bates Healthcare
6.55% 12/1/22-02 ................................. 100,000 112,178
California State Public Works
6.38% 10/1/19-04 ................................. 50,000 57,499
----------
169,677
----------
TRANSPORTATION REVENUE BONDS - 1.21%
Foothill/Eastern Transportation Corridor Agency
California Toll Road Revenue (Series 95A)
6.00% 1/1/34 ..................................... 100,000 109,043
San Joaquin Hills, California Transportation
Corridor Agency Toll Road Revenue
5.25% 1/15/30 .................................... 300,000 305,532
----------
414,575
----------
OTHER REVENUE BONDS - 36.62%
California Public Works Board Lease Revenue
5.63% 3/1/19 ..................................... 190,000 203,490
Carson Redevelopment Agency Revenue
6.38% 10/1/16 .................................... 100,000 107,627
Davis Unified School District Community
Facilities District (Special Tax) 5.50%
8/15/26 (MBIA) ................................... 100,000 104,389
Dixon Redevelopment Agency
6.00% 9/1/24 ..................................... 50,000 52,401
El Monte California Public Authority Tax Allocation
Special Term (Multiple Redevelopment Project)
5.75% 6/1/28 ..................................... 880,000 872,520
Escondido, California Improvement Bond
Act 1915 5.63% 9/2/18 ............................ 500,000 512,245
La Mirada, California Redevelopment Agency
Special Tax (Community Facilities District
Number 89-1) 5.70% 10/1/20 ....................... 500,000 506,400
La Quinta, California Redevelopment Agency Tax
Allocation (Redevelopment Area Project
Number 1) 5.20% 9/1/28 (AMBAC) ................... 500,000 503,620
Lake Elisnore, California Public Financing Authority
Local Agency Revenue (Series G)
5.80% 9/2/15 ..................................... 1,125,000 1,117,924
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------------
MUNICIPAL BONDS (CONTINUED)
OTHER REVENUE BONDS (CONTINUED)
Lake Elisnore, California Public Financing Authority
Tax Allocation (Series A) 5.50% 9/1/30 ......... $1,000,000 $1,006,770
Long Beach, California Harbor Revenue
5.38% 5/15/20 .................................. 250,000 254,205
Los Alamitos Unified School District Series
(Certified Facilities District No 90-1)
6.25% 8/15/23 .................................. 50,000 53,599
Ontario, California Community Facilities District
(No. 5 Special Tax Freeway Interchange
Project) 6.38% 9/1/17 .......................... 250,000 268,113
Rancho Cucamonga Redevelopment Housing
Set Aside 5.25% 9/1/26 ......................... 100,000 101,795
Rancho Mirage, California Improvement Board
6.10% 9/2/11 ................................... 495,000 512,404
Sacramento County, California Special Tax
(Community Facilities District Number 1)
5.70% 12/1/20 .................................. 500,000 510,015
San Diego California Special Tax Refund
(Community Facilities District Number 1)
4.75% 9/1/20 ................................... 3,000,000 2,905,707
San Marcos, California Redevelopment Agency
Tax Allocation Affordable Housing Project
(Series A) 5.65% 10/1/28 ....................... 500,000 514,415
San Marcos,California Redevelopment Agency Tax
Allocation Affordable Housing Project (Series A)
6.00% 10/1/27 .................................. 530,000 554,475
Santa Ana, California Financing Authority
Revenue (Inner City Commuter Series 7C)
5.60% 9/1/19 ................................... 600,000 613,272
South San Francisco, California Financing Authority
Revenue 5.00% 9/1/18 ........................... 750,000 738,075
Whittier, California Redevelopment Agency
5.75% 11/1/28 .................................. 500,000 505,390
----------
12,518,851
-----------
Total Municipal Bonds (cost of $33,292,201) 33,806,241
-----------
NUMBER OF
SHARES
---------
SHORT-TERM INVESTMENTS - 1.69%
Norwest Advantage Municipal Money
Market Fund .................................... 576,848 576,848
-----------
Total Short-Term Investments
(cost $576,848)................................. 576,848
-----------
<PAGE>
for tax-exempt income 19
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 100.59%
(COST $33,869,049) ............................................ $34,383,089
LIABILITIES NET OF RECEIVABLES
AND OTHER ASSETS - (0.59%) .................................... (200,781)
-----------
NET ASSETS APPLICABLE TO 3,040,393 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ........................ $34,182,308
===========
NET ASSET VALUE - TAX-FREE CALIFORNIA FUND A CLASS
($19,962,657/1,777,359 SHARES) ................................ $11.23
======
NET ASSET VALUE - TAX-FREE CALIFORNIA FUND B CLASS
($11,304,599/1,003,650 SHARES) ................................ $11.26
======
NET ASSET VALUE - TAX-FREE CALIFORNIA FUND C CLASS
($2,915,052/259,384 SHARES) ................................... $11.24
======
- ------------------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is prefunded.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FHA - Insured by the Federal Housing Authority
FSA - Insured by the Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT FEBRUARY 28,1999:
Common stock, $.01 par value, 100,000,000,000 shares
authorized to the Fund with 10,000,000,000 shares
allocated to Tax-Free California Fund A Class 10,000,000,000
shares allocated to Tax-Free California Fund B Class and
10,000,000,000 shares allocated to Tax-Free California
Fund C Class ................................................. $33,523,428
Undistributed net investment income ............................. 129
Accumulated net realized gain of investments .................... 144,711
Net unrealized appreciation of investments ...................... 514,040
-----------
Total Net Assets ................................................ $34,182,308
===========
NET ASSET VALUE AND OFFERING PRICE -
TAX-FREE CALIFORNIA FUND A CLASS
Net asset value per share (A) ................................... $11.23
Sales charge (3.75% of offering price or 3.92% of
amount invested per share) (B) ................................. 0.44
------
Offering price .................................................. $11.67
======
- ----------
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current prospectus for purchases of $100,000 or
more.
See accompanying notes
<PAGE>
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR TAX-FREE
CALIFORNIA INSURED FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------------
MUNICIPAL BONDS - 97.88%
GENERAL OBLIGATION BONDS - 2.73%
Escondido California High School District
(Capital Appreciation-Refunded) Zero
Coupon 11/1/20 (MBIA) ............................ $3,000,000 $997,200
---------
997,200
---------
HOSPITAL REVENUE BONDS - 8.53%
California Health Facilities (Catholic Healthcare
West)6.00% 7/1/17 (MBIA) ......................... 1,000,000 1,111,760
California Health Facilities Financial Authority
Revenue (Insured Little Company Mary
Health Service) 4.50% 10/1/28 (AMBAC) ............ 1,000,000 911,680
California Health Facilities (San Diego Hospital)
6.20% 8/1/12 (MBIA) .............................. 1,000,000 1,090,960
---------
3,114,400
---------
HOUSING REVENUE BONDS - 21.30%
California Housing Finance Agency 1994 Series E
6.75% 8/1/26 (MBIA) .............................. 1,000,000 1,073,130
California Housing Finance Agency Home Mortgage
Revenue Series 96E 6.05% 8/1/16 (MBIA) ........... 1,000,000 1,051,940
California Housing Financing Agency Home Mortgage
Revenue Series 96K 6.15% 8/1/16 (MBIA) ........... 1,100,000 1,164,339
California Housing Finance Agency Revenue Series F
6.00% 8/1/17 (MBIA) .............................. 1,000,000 1,053,890
California Housing Finance Agency (Single Family)
6.00% 8/1/20 (MBIA) .............................. 995,000 1,033,208
California Rural Home Mortgage Finance Authority
(Single Family Mortgage Revenue)
7.95% 12/1/24 (AMBAC) ............................ 1,295,000 1,281,143
Fresno, California Multifamily Housing Revenue
(Woodlands Apartments Project-A)
6.65% 5/20/17 (GNMA) ............................. 1,000,000 1,121,400
---------
7,779,050
---------
LEASE/CERTIFICATES OF PARTICIPATION - 31.23%
Anaheim California Public Financing Authority
Lease Revenue Capital Appreciation
(Sublease-Public Imports Project-C) Zero Coupon
9/1/22 (FSA) ..................................... 4,000,000 1,192,000
Bakersfield, California Certificates of Participation
(Convention Center Expansion Project)
5.80% 4/1/17 (MBIA) .............................. 1,000,000 1,092,040
El Monte, California Certificates Partnership
(Department of Public Social Services Facilities)
4.75% 6/1/30 (AMBAC) ............................. 2,000,000 1,912,100
Inland Empire Solid Waste Authority
6.00% 8/1/16 (FSA) ............................... 1,500,000 1,639,065
Ontario Redevelopment Cimarron Project
6.25% 8/1/15 (MBIA) .............................. 1,000,000 1,081,620
San Francisco California School District Certificates
Partnership 4.75% 8/1/19 (AMBAC) ................. 1,000,000 962,020
<PAGE>
20 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
------ -----
MUNICIPAL BONDS (CONTINUED)
LEASE/CERTIFICATES OF PARTICPATION (CONTINUED)
San Luis Obispo, California Capital Revenue
6.375% 6/1/14 (AMBAC) ........................... $1,000,000 $ 1,110,380
Santa Barbara, California Water Revenue
6.70% 4/1/27 (AMBAC) ............................ 1,000,000 1,094,820
Santa Clara, California Finance Authority
7.75% 11/15/11(AMBAC) ........................... 1,000,000 1,320,890
----------
11,404,935
----------
*PRE-REFUNDED/ESCROWED TO MATURITY BONDS - 2.74%
San Francisco California City & County
Redevelopment Agency Hotel
6.75% 7/1/25 - 04 (FSA) ......................... 860,000 999,870
----------
999,870
----------
TRANSPORTATION REVENUE BONDS - 11.19%
Alameda Corridor Transportation Authority
California Revenue (Senior Lien-Server A)
5.00% 10/1/29 (MBIA) ............................ 1,000,000 992,210
Los Angeles County California Metropolitan
Transportation Authority
Sales Tax Revenue 4.75% 7/1/22 (FSA) ............ 1,000,000 964,400
San Francisco, California City & County
International Airport Revenue (AMT Special
Facilities Lease-SFO Fuel-A)
5.25% 1/1/21 (AMBAC) ............................ 1,000,000 1,013,950
San Francisco City & County International Airport
Revenue 6.00% 5/1/14 (FGIC) ..................... 1,000,000 1,117,880
----------
4,088,440
----------
WATER & SEWER REVENUE BONDS - 5.59%
Calaveras County, California Water
District Revenue(Certificates Partnership
Jenny Lind Water Treatment)
6.125% 9/1/17 (AMBAC) ........................... 1,000,000 1,115,820
San Diego County California Water Authority
Revenue (Certificates Partnership Service A)
4.50% 5/1/24 (FGIC) ............................. 1,000,000 926,110
----------
2,041,930
----------
Other Revenue Bonds - 14.57%
Jurupa, California Community Services District
Special Tax (Community Facilities District
Number 1) 4.75% 9/1/18 (FSA) .................... 1,000,000 971,510
Rancho, California Water District Financing
Authority Revenue Referendum
5.9% 11/1/15 (FGIC) ............................. 1,000,000 1,106,200
San Francisco, California City & County
Redevelopment Agency
6.75% 7/1/25 (AMBAC) ............................ 140,000 158,685
Santa Clara, California Bayshore North Project
5.75% 7/1/14 (AMBAC) ............................ 1,000,000 1,073,760
Upland, California Community Redevelopment
Agency (Tax Allocation A Mergeed Project)
4.85% 9/1/23 (AMBAC) ............................ 1,000,000 976,190
Windsor, California Redevelopment Agency Tax
Allocation (Windsor Redevelopment Project)
4.875% 9/1/24 (MBIA) ............................ 1,055,000 1,033,130
----------
5,319,475
----------
TOTAL MUNICIPAL BONDS (cost $33,598,408) .......... 35,745,300
----------
<PAGE>
Number of Market
Shares Value
------ -----
SHORT-TERM INVESTMENTS - 0.55%
Norwest Advantage Municipal Money
Market Fund ........................................ 201,298 $ 201,298
-----------
Total Short-Term Investments (cost $201,298) .......... 201,298
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.43%
(cost $33,799,706) ................................. 35,946,598
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 1.57% 574,124
----------
NET ASSETS APPLICABLE TO 3,283,227 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ............. $36,520,722
NET ASSET VALUE - TAX-FREE CALIFORNIA INSURED FUND
A CLASS ($28,823,859 / 2,591,239 SHARES) ........... $ 11.12
=======
NET ASSET VALUE - TAX-FREE CALIFORNIA INSURED FUND
B CLASS ($7,215,398 / 648,538 SHARES) .............. $ 11.13
=======
NET ASSET VALUE - TAX-FREE CALIFORNIA INSURED FUND
C CLASS ($481,465 / 43,450 SHARES) ................. $ 11.08
=======
- ----------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
AMT - Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by the Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
Common stock, $.01 par value, 10,000,000,000
shares authorized to the Fund with
1,000,000,000 shares allocated to Tax-Free
California Insured Fund A Class, 1,000,000,000
shares allocated to Tax-Free California Insured
Fund B Class and 1,000,000,000 shares allocated to
Tax-Free California Insured Fund C Class ..................... $34,186,620
Distributions in excess of net investment income ................ (2,003)
Accumulated net realized gain on investments .................... 189,213
Net unrealized appreciation of investments ...................... 2,146,892
-----------
Total Net Assets ................................................ $36,520,722
===========
NET ASSET VALUE AND OFFERING PRICE - TAX-FREE
CALIFORNIA INSURED FUND A CLASS
Net asset value per share (A) .......................... $11.12
Sales charge (3.75% of offering price or 3.87% of amount
invested per share) (B) ............................. 0.43
------
Offering price ......................................... $11.55
------
- ----------
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How To Buy Shares in the current prospectus for purchases of $100,000
or more.
See accompanying notes
<PAGE>
for tax-exempt income 21
VOYAGEUR MUTUAL FUNDS II, INC.
DELAWARE-VOYAGEUR TAX-FREE COLORADO FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
--------- ------
MUNICIPAL BONDS - 98.95%
GENERAL OBLIGATION BONDS - 15.87%
Arapahoe, Colorado Water & Sanitation
Series 1995A 6.00% 12/1/15 ................. $ 8,010,000 $ 8,577,428
Series 1995A 6.15% 12/1/19 ................. 10,075,000 10,865,988
**Arapahoe County, Colorado School District
Number 5 Cherry Creek 6.92% 12/15/15 ....... 3,000,000 3,142,500
Eagles Nest Metropolitan District Limited Tax
6.50% 11/15/17 ............................. 6,495,000 6,857,811
**El Paso County, Colorado School District
Number 20 7.72% 12/15/14 ................... 1,250,000 1,389,513
G V R Metropolitan District
Series A 6.00% 12/1/15 ..................... 7,075,000 7,653,098
Series A 6.125% 12/1/19 .................... 4,725,000 5,131,397
**Highlands Ranch Metropolitan School District
Number 2 6.62% 6/15/16 ..................... 1,850,000 1,882,801
Interstate South Metropolitan District
6.00% 12/1/20 .............................. 8,755,000 9,395,166
Jefferson County Metropolitan District -
Section 14, Series A 6.20% 12/1/13 ......... 2,250,000 2,468,970
Morgan County, Colorado School District
#RE- 3 4.80% 12/1/18 ....................... 3,200,000 3,120,032
----------
60,484,704
----------
HIGHER EDUCATION REVENUE BONDS - 1.60%
Colorado Educational & Cultural Facilities
Authority Revenue Series A
4.75% 9/1/28 (AMBAC) ....................... 6,490,000 6,117,150
----------
6,117,150
----------
HOSPITAL REVENUE BONDS - 28.51%
Boulder County, Colorado Hospital Revenue
Development (Longmont United Hospital)
5.60% 12/1/27 .............................. 6,765,000 6,851,592
Boulder County Hospital Revenue
(Longmont United Project)
5.875% 12/1/20 ............................. 3,250,000 3,354,195
Colorado Health Facilities Authority (Covenant
Retirement) 6.75% 12/1/25 .................. 4,150,000 4,623,059
6.75% 12/1/15 .............................. 1,750,000 1,952,685
Colorado Health Facilities Authority
(National Jewish Medical & Research Center)
5.375% 1/1/16 .............................. 1,000,000 1,010,970
5.375% 1/1/23 .............................. 5,445,000 5,460,083
5.375% 1/1/28 .............................. 3,230,000 3,199,347
Colorado Health Facilities Authority (Parkview
Hospital) 6.00% 9/1/16 ..................... 4,000,000 4,257,000
6.125% 9/1/25 .............................. 7,750,000 8,270,103
Colorado Health Facilities Authority (Rocky
Mountain Adventist Healthcare)
6.625% 2/1/13 .............................. 13,000,000 13,798,200
6.625% 2/1/22 .............................. 5,885,000 6,246,339
<PAGE>
Principal Market
Amount Value
--------- ------
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Colorado Health Facilities Authority (Vail
Valley Medical Center Revenue)
6.50% 1/15/13 ............................ $ 2,400,000 $ 2,606,520
6.60% 1/15/20 ............................ 6,500,000 7,074,795
**Colorado Health Facilities Authority Revenue
7.12% 10/1/26 ............................ 3,375,000 3,503,216
Colorado Health Facilities Authority Revenue
(Baptist Home Association)
Series A 6.375% 8/15/24 .................. 3,250,000 3,470,968
Colorado Health Facilities Authority Revenue
(National Benevolent) Series A
6.90% 6/1/15 ............................. 1,085,000 1,212,715
Colorado Health Facilities Authority Revenue
(National Benevolent Association) Series A
5.20% 1/1/18 ............................. 530,000 519,368
5.25% 1/1/27 ............................. 1,330,000 1,295,739
Colorado Health Facilities Authority Revenue
(National Benevolent Association)
Series B 5.25% 2/1/28 .................... 3,700,000 3,603,208
Colorado Health Facilities Revenue
Authority (National Jewish Medical &
Research Center) Series B
5.375% 1/1/29 ............................ 1,820,000 1,784,073
Colorado Health Facilities Authority Revenue
(Steamboat Springs Health)
5.75% 9/15/22 ............................ 5,000,000 5,082,800
Colorado Health Facilities Revenue
(Parkview Medical Center Income Project)
5.25% 9/1/15 ............................. 1,500,000 1,473,075
5.30% 9/1/25 ............................. 1,500,000 1,468,650
Colorado Springs (Memorial Hospital)
6.00% 12/15/24 (MBIA) .................... 8,000,000 8,812,480
Denver, Colorado Health & Hospital
5.375% 12/1/18 ........................... 1,000,000 990,910
5.375% 12/1/28 ........................... 5,000,000 4,930,150
Gunnison Valley Hospital
5.625% 7/1/23 ............................ 850,000 850,918
Weld County, Colorado Health Facilities
Revenue 4.75% 10/1/24 .................... 1,035,000 965,334
-----------
108,668,492
-----------
HOUSING REVENUE BONDS - 14.81%
Adams County, Colorado Housing Authority
Mortgage Revenue (Aztec Villa Apartments
Project) 5.85% 12/1/27 ................... 1,825,000 1,903,220
Adams County Housing Authority (Greenbriar
Project) 6.75% 7/1/21 .................... 1,730,000 1,872,241
Boulder County, Colorado Housing Authority
Revenue 4.75% 12/1/28 .................... 2,500,000 2,385,000
<PAGE>
22 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
--------- ------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Colorado Housing Finance Authority - Multifamily
Series A-2 7.15% 11/1/14 .................. $ 1,445,000 $ 1,629,685
Series A-3 5.85% 10/1/28 (FHA) ............ 4,000,000 4,233,920
Series A-3 6.25% 10/1/26 .................. 8,530,000 9,177,512
Series B-3 5.65% 10/1/28 .................. 3,880,000 4,030,854
Series C-2 7.10% 5/1/15 ................... 1,260,000 1,401,788
Series C-2 7.45% 6/1/17 ................... 675,000 742,588
Series C-3 6.10% 10/1/28 .................. 4,120,000 4,409,595
Colorado Housing Finance Authority -
Single Family Mortgage
7.50% 11/1/24 (FHA) ....................... 1,965,000 2,127,564
Colorado State - Single Family Housing
Authority Senior Revenue 7.10% 6/1/14 ..... 860,000 963,768
Eaglebend, Colorado Affordable Housing
Corporate Multifamily Revenue Housing
Project Series A 6.20% 7/1/12 ............. 1,000,000 1,060,980
Series A 6.45% 7/1/21 ..................... 1,000,000 1,061,850
Series A 6.40% 7/1/17 ..................... 1,000,000 1,060,390
Englewood Multifamily (Marks Apartments)
Series B 6.00% 12/15/18 ................... 8,525,000 8,809,735
Series 96 6.65% 12/1/26 ................... 5,700,000 6,183,132
Pueblo County Single Family Mortgage Revenue
Series 1994A 7.05% 11/1/27 (GNMA) ......... 3,190,000 3,392,948
----------
56,446,770
----------
LEASE/CERTIFICATES OF PARTICIPATION - 5.19%
Colorado Post Secondary Education Auraria
Foundation Project 6.00% 9/1/15 (FSA) ..... 1,000,000 1,090,120
Conejos & Alamosa Counties, Colorado School
District Certificates of Participation
6.50% 4/1/11 .............................. 1,780,000 1,873,414
Greeley Building Authority 6.10% 8/15/16 .... 2,600,000 2,771,080
**Jefferson County, Colorado Certificates of
Participation 7.12% 12/1/09 (MBIA) ........ 5,000,000 5,619,800
Lakewood, Colorado Certificates of
Participation 5.00% 12/1/20 ............... 6,000,000 5,944,560
**Pueblo County, Colorado School District Number
60, Pueblo Certificate of Participation
7.37% 12/1/10 (MBIA) ...................... 2,220,000 2,460,026
----------
19,759,000
----------
<PAGE>
Principal Market
Amount Value
--------- ------
Municipal Bonds (Continued)
Power Authority Revenue Bonds - 2.65%
Platte River Power Authority Series BB
6.125% 6/1/14 ................................. $ 5,000,000 $ 5,332,000
Puerto Rico Electric Power Authority Series EE
4.75% 7/1/24 .................................. 5,000,000 4,752,350
----------
10,084,350
----------
*PRE-REFUNDED BONDS - 5.97%
Arapahoe County (Capital Improvement E-470)
7.00% 8/31/26-05 .............................. 10,000,000 11,964,800
Boulder Valley School District #RE-2
Series A 6.30% 12/1/13-04 ..................... 3,000,000 3,399,450
Series A 6.30% 12/1/14-04 ..................... 5,000,000 5,665,750
Montezuma County School District #RE 4A (Delores)
7.00% 12/1/19-04 .............................. 1,500,000 1,737,120
----------
22,767,120
----------
TRANSPORTATION REVENUE BONDS - 6.80%
Arapahoe County Vehicle Reg E-470
6.15% 8/31/26 (MBIA) .......................... 8,530,000 9,470,774
E-470 Public Highway Authority Colorado Revenue
Series A 4.75% 9/1/23 ......................... 6,000,000 5,684,040
Series A 5.00% 9/1/21 ......................... 5,000,000 4,900,750
Series A 5.00% 9/1/26 ......................... 6,000,000 5,868,420
----------
25,923,984
----------
UTILITIES REVENUE BONDS - 2.11%
Colorado Springs, Colorado Utilities Revenue
Series A 4.75% 11/15/26 ....................... 8,500,000 8,036,580
----------
8,036,580
----------
WATER & SEWER REVENUE BONDS - 2.74%
Centennial County Water & Sanitary District
Revenue 6.00% 12/1/15
(LOC - Swiss Bank) ............................ 4,000,000 4,416,760
Erie, Colorado Water Enterprise Revenue
5.00% 12/1/23 ................................. 5,190,000 4,935,169
Westminster Water & Sewer Utility Revenue
6.25% 12/1/14 (AMBAC) ......................... 1,000,000 1,100,910
----------
10,452,839
----------
<PAGE>
for tax-exempt income 23
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
--------- ------
MUNICIPAL BONDS (CONTINUED)
OTHER REVENUE BONDS - 12.70%
Aurora (Saddle Rock Golf Course)
6.20% 12/1/15 ............................ $ 2,000,000 $ 2,115,860
Avon, Colorado Sales Tax Revenue
4.55% 9/15/14 ............................ 1,000,000 977,110
Colorado Educational & Cultural Facilities
Authority Revenue (Alexander Dawson School
Project)
5.30% 2/15/29 ............................ 5,000,000 4,977,500
Colorado Educational & Cultural Facilities
Authority Revenue (Aspen Foundation)
Series A 6.125% 7/1/12 ................... 605,000 621,886
6.50% 7/1/24 ............................. 1,710,000 1,757,453
**Colorado Post Secondary Education Facilities
Authority Revenue 8.62% 3/1/16 ........... 3,350,000 3,798,398
Colorado Post Secondary Education (Ocean
Journey Project) 8.375% 12/1/26 .......... 8,000,000 9,477,760
Glenwood Springs, Colorado Sales & Use Tax
Revenue 4.80% 10/1/18 .................... 2,520,000 2,448,230
Lowry, Colorado Economic Redevelopment
Authority 7.50% 12/1/10 .................. 13,700,000 15,946,800
Lowry, Colorado Economic Redevelopment
Authority Revenue Series A
7.00% 12/1/10 ............................ 1,400,000 1,585,318
Pueblo Urban Renewal Authority Junior Lien
6.625% 12/1/19 ........................... 2,110,000 2,256,455
South Suburban District (Golf & Ice Arena
Facility) 6.00% 11/1/15 .................. 2,330,000 2,450,018
-----------
48,412,788
-----------
TOTAL MUNICIPAL BONDS
(cost $350,827,638) ...................... 377,153,777
-----------
<PAGE>
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.95%
(COST $350,827,638) .............................. $377,153,777
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 1.05% 4,007,380
------------
NET ASSETS APPLICABLE TO 33,194,565 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ........... $381,161,157
============
NET ASSET VALUE - TAX FREE COLORADO FUND A CLASS
($364,908,351 / 31,779,574 SHARES) ............... $11.48
======
NET ASSET VALUE - TAX FREE COLORADO FUND B CLASS
($12,925,301 / 1,125,376 SHARES) ................. $11.49
======
NET ASSET VALUE - TAX FREE COLORADO FUND C CLASS
($3,327,505 / 289,615 SHARES) .................... $11.49
======
- ----------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
**Inverse Floaters represent a security that pays
interest at rates that increase (decrease) with a decrease (increase) in a
specific index. Interest rates disclosed are in effect February 28, 1999.
SUMMARY OF ABBREVIATIONS:
AMBAC - Insured by the AMBAC Indemnity Corporation
FHA - Insured by the Federal Housing Authority
FSA - Insured by Financial Security Assurance
GNMA - Insured by the Government National Mortgage Association
LOC - Letter of Credit
MBIA - Insured by the Municipal Bond Insuracne Association
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
Common stock, $.01 par value, 10,000,000,000
shares authorized to the Fund with
1,000,000,000 shares allocated to Tax-Free
Colorado Fund A Class, 1,000,000,000 shares
allocated to Tax-Free Colorado Fund B Class,
and 1,000,000,000 shares allocated to Tax-Free
Colorado Fund C Class ................................. $356,854,362
Distributions in excess of net investment income ......... (2,812)
Accumulated net realized loss on investments ............. (2,016,532)
Net unrealized appreciation of investments ............... 26,326,139
------------
Total Net Assets ......................................... $381,161,157
============
NET ASSET VALUE AND OFFERING PRICE -
TAX-FREE COLORADO FUND A CLASS
Net asset value per share (A) ............................ $11.48
Sales charge (3.75% of offering price or 3.92% of amount
invested per share)(B) ................................ 0.45
------
Offering price ........................................... $11.93
======
- ----------
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current prospectus for purchases of $100,000
or more.
See accompanying notes
<PAGE>
24 for tax-exempt income
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR TAX-FREE NEW MEXICO FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
--------- ------
MUNICIPAL BONDS - 98.39%
GENERAL OBLIGATION BONDS - 3.65%
Puerto Rico Commonwealth Public Improvement
4.50% 7/1/23 ............................... $1,000,000 $ 923,400
----------
923,400
----------
HIGHER EDUCATION REVENUE BONDS - 4.63%
New Mexico Education Assistance Foundation
6.650% 11/1/25 ............................. 1,000,000 1,072,800
New Mexico State University Refunding &
Improvement 5.00% 4/1/17 ................... 100,000 99,996
----------
1,172,796
----------
HOSPITAL REVENUE BONDS - 8.17%
New Mexico State Hospital Equipment LN Council
Hospital Revenue 5.50% 6/2/28 .............. 1,000,000 978,560
State Hospital Equipment Memorial Medical
Center Project 6.40% 6/1/16 ................ 1,000,000 1,091,070
----------
2,069,630
----------
HOUSING REVENUE BONDS - 26.33%
Carlsbad, New Mexico Housing Multifamily
Revenue (Colonial Hillcrest)
7.375% 8/1/27 .............................. 1,000,000 1,059,970
New Mexico Mortgage Finance Authority
Series 1994B 6.75% 7/1/25 .................. 1,000,000 1,111,780
Series 1994F 6.95% 1/1/26 .................. 1,000,000 1,124,210
Series 1996G 6.85% 1/1/21 .................. 1,500,000 1,686,210
Santa Fe Single Family Mortgage Revenue
6.20% 11/1/16 .............................. 595,000 626,749
Southeastern New Mexico Affordable Housing
(Casa Hermosa Apartments)
7.25% 12/1/27 .............................. 1,000,000 1,057,060
----------
6,665,979
----------
POLLUTION CONTROL REVENUE BONDS - 8.71%
Farmington, New Mexico Polution Control
Public Service Company Project
6.375% 4/1/22 .............................. 1,000,000 1,118,020
Lordsburg Pollution Control 6.50% 4/1/13 ..... 1,000,000 1,087,260
----------
2,205,280
----------
*PRE-REFUNDED BONDS - 4.53%
University of New Mexico Technical Development
Lease Revenue 6.550% 8/15/25-04 ............ 1,000,000 1,147,820
----------
1,147,820
----------
<PAGE>
Principal Market
Amount Value
--------- ------
MUNICIPAL BONDS (CONTINUED)
UTILITY REVENUE BONDS - 4.33%
Los Alamos Utility System Revenue 1994A
(FSA) 6.00% 7/1/15 .......................... $ 1,000,000 $ 1,095,550
----------
1,095,550
----------
WATER & SEWER REVENUE BONDS - 12.81%
Carlsbad New Mexico Water & Sewer Revenue
Improvement 4.75% 6/1/19 .................... 750,000 720,705
Rio Rancho Water & Wastewater Revenue
4.75% 5/15/22 ............................... 1,500,000 1,432,875
Rio Rancho Water & Wastewater Revenue
(FSA) 6.00% 5/15/22 ......................... 1,000,000 1,088,740
----------
3,242,320
----------
OTHER REVENUE BONDS - 25.23%
Albuquerque Special Assessment #223
6.45% 1/1/15 ................................ 635,000 636,200
Bernalillo County, New Mexico Gross Receipts
Tax Revenue Series B 5.00% 4/1/13 ........... 1,000,000 1,027,490
Bernalillo County, New Mexico Gross Receipts Tax
Revenue 5.25% 4/1/27 ........................ 1,000,000 1,034,390
Dona Ana County Tax Reference & Improvement
6.00% 6/1/19 ................................ 1,000,000 1,104,550
Las Cruses Solid Waste Authority
6.00% 6/1/16 ................................ 500,000 523,490
Santa Fe, New Mexico Municipal Record Complex
Net Revenue 5.625% 12/1/23 .................. 1,000,000 986,100
Truth Or Consequences Gross Tax Receipts
6.25% 7/1/16 ................................ 1,000,000 1,074,420
----------
6,386,640
----------
TOTAL MUNICIPAL BONDS (cost $23,350,522) ....... 24,909,415
----------
Number of
Shares
---------
SHORT-TERM INVESTMENTS - 1.46%
Norwest Advantage Municipal Money
Market Fund ................................. 369,403 369,403
----------
Total Short-Term Investments
(cost $369,403) ............................. 369,403
----------
<PAGE>
for tax-exempt income 25
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
Market
Value
------
TOTAL MARKET VALUE OF SECURITIES OWNED
(COST $23,719,925) - 99.85% ............................... $25,278,818
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.15% ...... 37,722
-----------
NET ASSETS APPLICABLE TO 2,229,875 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% .................... $25,316,540
===========
NET ASSET VALUE - TAX-FREE NEW MEXICO FUND A CLASS
($22,698,122 / 1,999,431 SHARES) .......................... $11.35
======
NET ASSET VALUE - TAX-FREE NEW MEXICO FUND B CLASS
($2,208,438 / 194,342 SHARES) ............................. $11.36
======
NET ASSET VALUE - TAX-FREE NEW MEXICO FUND C CLASS
($409,980 / 36,102 shares) ................................ $11.36
======
- ----------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
Summary of Abbreviations:
FSA - Insured by the Financial Security Assurance
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
Common stock, $.01 par value, unlimited shares
authorized to the Tax-Free New Mexico Fund ................ $24,274,202
Accumulated net realized loss on investments ................. (516,555)
Net unrealized appreciation of investments ................... 1,558,893
-----------
Total Net Assets ............................................. $25,316,540
-----------
NET ASSET VALUE AND OFFERING PRICE -
TAX-FREE NEW MEXICO FUND A CLASS
Net asset value per share (A) ................................ $11.35
Sales charge (3.75% of offering price or 3.88% of
amount invested per share) (B)............................. 0.44
Offering price ............................................... $11.79
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current prospectus for purchases of $100,000
or more.
See accompanying notes.
<PAGE>
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR TAX-FREE UTAH FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
--------- ------
MUNICIPAL BONDS - 96.51%
GENERAL OBLIGATION BONDS - 3.25%
Salt Lake County Service Area # 1
6.00% 12/15/12 ............................ $100,000 $107,630
-------
107,630
-------
HIGHER EDUCATION REVENUE BONDS - 28.70%
Salt Lake County, Utah College (Westminster
College Project) 5.75% 10/1/27 ............ 160,000 162,938
Southern Utah University Board of Regents
6.35% 5/1/10 (AMBAC) ...................... 150,000 164,861
Southern Utah University Pavillion Student Fee
6.30% 6/1/16 .............................. 390,000 416,543
Utah State Board of Regents
5.88% 7/1/21 (MBIA) ....................... 100,000 108,106
Utah University Student Fee
4.75% 12/1/14 ............................. 100,000 98,684
-------
951,132
-------
HOSPITAL REVENUE BONDS - 9.31%
Murray City, Utah Hospital Revenue
(IHC Health Services) 4.75% 5/15/20 ....... 175,000 165,373
Weber County, Utah Hospital Revenue
5.00% 8/15/30 ............................. 150,000 143,144
-------
308,517
-------
HOUSING REVENUE BONDS - 25.46%
Clearfield City, Utah Multifamily Revenue
Federal Housing Authority (Oakstone
Apartments) Series A 5.75% 11/1/27 ........ 150,000 154,079
Salt Lake City Multifamily Housing Authority
6.00% 4/1/25 .............................. 100,000 103,582
Salt Lake County Housing Authority Multifamily
(Bridgeside) 6.30% 11/1/28 (FHA) .......... 270,000 287,871
Utah Housing Finance Authority Single Family
Mortgage Revenue Series 1992D-1
6.70% 7/1/12 .............................. 65,000 68,723
Utah Housing Finance Authority Single Family
Mortgage Revenue Series 1994C
6.30% 7/1/16 .............................. 15,000 15,881
Utah Housing Finance Multifamily (Cottonwood
Project) 6.30% 7/1/15 (FNMA) .............. 200,000 213,782
-------
843,918
-------
<PAGE>
26 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
--------- ------
MUNICIPAL BONDS (CONTINUED)
LEASE/CERTIFICATES OF PARTICIPATION - 8.77%
Weber County, Utah Municipal Building Authority
Lease Revenue 5.75% 12/15/19 .................. $ 175,000 $ 185,096
West Valley City, Utah Municipal Building
Authority Lease Revenue
6.00% 1/15/10 ................................. 100,000 105,662
----------
290,758
----------
*PRE-REFUNDED BONDS - 16.60%
Iron County School District
6.50% 1/15/13-05 (MBIA) ....................... 100,000 113,231
Provo, Utah City School District
6.25% 6/15/13-02 .............................. 100,000 109,910
Salt Lake City Municipal Building Authority Lease
Revenue Series A 6.38% 10/1/12-02 ............. 100,000 109,937
Utah State Board of Regents
6.30% 6/1/12-02 (AMBAC) ....................... 100,000 109,243
Weber State University Board of Regents
6.25% 4/1/10-02 (MBIA) ........................ 100,000 107,803
----------
550,124
----------
WATER & SEWER REVENUE BONDS - 4.42%
Central Utah Water Conservancy Dist
5.00% 4/1/27 .................................. 150,000 146,456
----------
146,456
----------
Total Municipal Bonds
(cost of $3,014,899) .......................... 3,198,535
----------
Number of
Shares
---------
SHORT-TERM INVESTMENTS - 0.13%
Norwest Advantage Municipal
Money Market Fund ............................. 4,311 4,311
----------
Total Short-Term Investments
(cost $4,311) ................................. 4,311
----------
<PAGE>
Market
Value
----------
TOTAL MARKET VALUE OF SECURITIES - 96.64%
(cost $3,019,210) ............................................. $3,202,846
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 3.36% .................................... 111,345
----------
NET ASSETS APPLICABLE TO 291,802 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ........................ $3,314,191
==========
NET ASSET VALUE - TAX-FREE UTAH FUND A CLASS
($2,696,788 / 237,452 SHARES) ................................. $ 11.36
==========
NET ASSET VALUE - TAX-FREE UTAH FUND B CLASS
($617,403 / 54,350 SHARES) .................................... $ 11.36
==========
COMPONENTS OF NET ASSETS AT FEBRUARY 28, 1999:
Common stock, $.01 par value, 10,000,000,000
shares authorized to the Fund with
1,000,000,000 shares allocated to Tax-Free
Utah Fund A Class and 1,000,000,000 shares
allocated to Tax-Free Utah Fund B Class ....................... $3,103,603
Accumulated net realized gain on investments...................... 26,952
Net unrealized appreciation of investments ....................... 183,636
----------
Total Net Assets ................................................. $3,314,191
==========
- ----------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
FHA - Insured by the Federal Housing Administration
FNMA - Insured by the Federal National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
NET ASSET VALUE AND OFFERING PRICE -
TAX-FREE UTAH FUND A CLASS
Net asset value per share (A) ...................................... $11.36
Sales charge (3.75% of offering price or 3.87% of
amount invested per share) (B) .................................. 0.44
------
Offering price ..................................................... $11.80
======
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current prospectus for purchases of $100,000
or more.
See accompanying notes.
<PAGE>
for tax-exempt income 27
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR
VOYAGEUR INSURED MUTUAL VOYAGEUR
MUTUAL FUNDS, INC. FUNDS, INC. INVESTMENT TRUST
FUNDS, INC. TAX-FREE TAX-FREE TAX-FREE
TAX-FREE ARIZONA CALIFORNIA CALIFORNIA
ARIZONA FUND INSURED FUND FUND INSURED FUND
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ............................................... $ 512,978 $ 4,999,755 $ 721,265 $ 965,693
----------- ----------- ----------- -----------
EXPENSES:
Management fees ........................................ 47,134 460,352 69,776 88,920
Dividend disbursing and transfer agent fees and expenses 50,272 39,636 5,580 71,494
Distribution expense ................................... 10,387 252,467 78,501 15,600
Registration fees ...................................... 2,000 4,015 750 3,300
Reports and statements to shareholders ................. 800 3,700 1,380 90
Accounting and administration .......................... 6,039 46,845 6,930 8,583
Professional fees ...................................... 3,500 8,900 3,300 11,800
Custodian fees and expenses ............................ 1,100 4,783 1,700 1,550
Directors' fees ........................................ 371 1,450 359 450
Taxes (other than taxes on income) ..................... 750 7,864 100 3,200
Other .................................................. 5,765 -- -- 7,347
----------- ----------- ----------- -----------
128,118 830,012 168,376 212,334
Less expenses absorbed by Delaware Management
Company, Inc. ....................................... (56,461) -- (89,875) (15,627)
----------- ----------- ----------- -----------
Total operating expenses ............................... 71,657 830,012 78,501 196,707
----------- ----------- ----------- -----------
Interest expense ....................................... 415 3,525 20 1,604
----------- ----------- ----------- -----------
Total expenses ......................................... 72,072 833,537 78,521 198,311
----------- ----------- ----------- -----------
NET INVESTMENT INCOME .................................. 440,906 4,166,218 642,744 767,382
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investment transactions ........... 136,988 843,849 175,063 610,906
Net change in unrealized appreciation/
depreciation of investments ......................... (200,588) (854,742) (159,075) (636,776)
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS ...................................... (63,600) (10,893) 15,988 (25,870)
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ..................................... $ 377,306 $ 4,155,325 $ 658,732 $ 741,512
=========== =========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
28 for tax-exempt income
Statements of Operations (Continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
VOYAGEUR
VOYAGEUR MUTUAL VOYAGEUR INVESTMENT
FUNDS II, INC. INVESTMENT TRUST TRUST
TAX-FREE TAX-FREE TAX-FREE
COLORADO FUND NEW MEXICO FUND UTAH FUND
------------ --------------- ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest ......................................................... $ 10,608,474 $ 678,888 $ 91,727
------------ ------------ ------------
EXPENSES:
Management fees .................................................. 933,726 60,833 8,214
Dividend disbursing and transfer agent fees and expenses ......... 110,020 11,942 3,211
Distribution expense ............................................. 490,219 38,807 6,391
Registration fees ................................................ -- 1,000 420
Reports and statements to shareholders ........................... 1,123 500 1,100
Accounting and administration .................................... 74,428 7,869 840
Professional fees ................................................ -- 2,000 1,300
Custodian fees and expenses ...................................... 2,000 1,600 640
Directors' fees .................................................. 3,652 378 335
Taxes (other than taxes on income) ............................... 3,500 500 --
Other ............................................................ -- 6,600 --
------------ ------------ ------------
1,618,668 132,029 22,451
Less expenses absorbed by Delaware Management Company, Inc. ...... -- (3,768) (6,203)
------------ ------------ ------------
Total operating expenses ......................................... 1,618,668 128,261 16,248
------------ ------------ ------------
Interest expense ................................................. 12,911 366 11
------------ ------------ ------------
Total expenses ................................................... 1,631,579 128,627 16,259
------------ ------------ ------------
NET INVESTMENT INCOME ............................................ 8,976,895 550,261 75,468
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investment transactions ..................... 1,117,355 24,123 54,119
Net change in unrealized appreciation/depreciation of investments (2,143,646) (244,792) (55,050)
------------ ------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS ........... (1,026,291) (220,669) (931)
------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............. $ 7,950,604 $ 329,592 $ 74,537
============ ============ ============
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 29
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
VOYAGEUR MUTUAL FUNDS, INC. VOYAGEUR INSURED FUNDS, INC.
TAX-FREE ARIZONA FUND TAX-FREE ARIZONA INSURED FUND
--------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97 2/28/99 8/31/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ............................... $440,906 $509,703 $736,908 $4,166,218 $5,780,759 $9,751,316
Net realized gain on investment transactions ........ 136,988 155,402 174,893 843,849 881,946 2,190,476
Net change in unrealized appreciation/
depreciation of investments ...................... (200,588) 90,918 437,873 (854,742) 506,964 4,860,331
----------- ----------- ----------- ------------ ------------ ------------
Net increase in net assets resulting from operations 377,306 756,023 1,349,674 4,155,325 7,169,669 16,802,123
----------- ----------- ----------- ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class .......................................... (324,076) (379,267) (558,716) (4,053,221) (5,658,934) (9,694,062)
B Class .......................................... (104,140) (115,992) (170,145) (100,409) (109,233) (146,915)
C Class .......................................... (13,780) (14,444) (8,986) (13,065) (17,906) (22,575)
Net realized gain on investment transactions:
A Class .......................................... (131,099) (107,048) (14,835) - - -
B Class .......................................... (51,618) (42,698) (5,249) - - -
C Class .......................................... (6,493) (5,585) (446) - - -
----------- ----------- ----------- ------------ ------------ ------------
(631,206) (665,034) (758,377) (4,166,695) (5,786,073) (9,863,552)
----------- ----------- ----------- ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class .......................................... 4,793,690 2,294,187 1,713,483 6,072,000 5,611,502 8,703,489
B Class .......................................... 370,739 1,591,094 1,398,191 1,020,879 1,473,923 1,626,775
C Class .......................................... 163,878 289,341 294,389 764,225 109,022 260,791
Netasset value of shares issued upon reinvestment
of dividends from net investment income and net
realized gain on investment transactions:
A Class .......................................... 272,577 263,816 318,925 1,783,074 2,372,653 4,127,147
B Class .......................................... 83,012 82,739 93,785 57,087 59,207 80,590
C Class .......................................... 9,734 7,823 1,725 8,016 10,470 14,987
----------- ----------- ----------- ------------ ------------ ------------
5,693,630 4,529,000 3,820,498 9,705,281 9,636,777 14,813,779
----------- ----------- ----------- ------------ ------------ ------------
Cost of shares repurchased:
A Class .......................................... (541,284) (1,364,588) (1,297,760) (10,050,736) (16,505,481) (42,377,224)
B Class .......................................... (159,673) (453,826) (1,423,141) (99,607) (444,337) (1,306,416)
C Class .......................................... (44,876) (371) - - (173,611) (172,902)
----------- ----------- ----------- ------------ ------------ ------------
(745,833) (1,818,785) (2,720,901) (10,150,343) (17,123,429) (43,856,542)
----------- ----------- ----------- ------------ ------------ ------------
Increase (decrease) in net assets derived from capital
share transactions ............................... 4,947,797 2,710,215 1,099,597 (445,062) (7,486,652) (29,042,763)
----------- ----------- ----------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ............... 4,693,897 2,801,204 1,690,894 (456,432) (6,103,056) (22,104,192)
NET ASSETS:
Beginning of period ................................. 17,760,529 14,959,325 13,268,431 184,715,115 190,818,171 212,922,363
----------- ----------- ----------- ------------ ------------ ------------
End of period ....................................... $22,454,426 $17,760,529 $14,959,325 $184,258,683 $184,715,115 $190,818,171
=========== =========== =========== ============ ============ ============
</TABLE>
See accompanying notes
<PAGE>
30 for tax-exempt income
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE CALIFORNIA FUND
------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ....................... $ 642,744 $ 410,389 $ 251,678
Net realized gain on investment
transactions ............................. 175,063 29,399 28,148
Net change in unrealized appreciation/
depreciation of investments .............. (159,075) 252,698 362,074
------------- ------------- -------------
Net increase in net assets resulting
from operations .......................... 658,732 692,486 641,900
------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class .................................. (397,428) (185,500) (114,672)
B Class .................................. (210,849) (216,553) (132,136)
C Class .................................. (33,204) (9,470) (5,490)
Net realized gain on investment transactions:
A Class .................................. (33,213) -- (11,448)
B Class .................................. (21,093) -- (17,988)
C Class .................................. (3,610) -- (547)
------------- ------------- -------------
(699,397) (411,523) (282,281)
------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class .................................. 8,586,152 7,665,910 3,495,750
B Class .................................. 3,231,490 3,442,847 4,742,287
C Class .................................. 2,224,559 647,866 88,101
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and net realized
gain on investment transactions:
A Class .................................. 305,833 123,356 83,762
B Class .................................. 81,706 59,437 41,269
C Class .................................. 20,253 6,823 6,496
------------- ------------- -------------
14,449,993 11,946,239 8,457,665
------------- ------------- -------------
Cost of shares repurchased:
A Class .................................. (497,625) (716,972) (553,808)
B Class .................................. (967,009) (244,052) (79,383)
C Class .................................. (98,439) -- (86,695)
------------- ------------- -------------
(1,563,073) (961,024) (719,886)
------------- ------------- -------------
Increase (decrease) in net assets derived
from capital share transactions .......... 12,886,920 10,985,215 7,737,779
------------- ------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS ............................ 12,846,255 11,266,178 8,097,398
NET ASSETS:
Beginning of period ......................... 21,336,053 10,069,875 1,972,477
------------- ------------- -------------
End of period ............................... $ 34,182,308 $ 21,336,053 $ 10,069,875
============= ============= =============
</TABLE>
<PAGE>
[RESTUBBED FORM TABLE ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE CALIFORNIA INSURED FUND
---------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ....................... $ 767,382 $ 990,891 $ 1,660,243
Net realized gain on investment
transactions ............................. 610,906 161,093 654,098
Net change in unrealized appreciation/
depreciation of investments .............. (636,776) 306,484 902,169
------------- ------------- -------------
Net increase in net assets resulting
from operations .......................... 741,512 1,458,468 3,216,510
------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class .................................. (634,688) (806,070) (1,392,469)
B Class .................................. (125,919) (172,316) (281,777)
C Class .................................. (8,778) (12,505) (4,187)
Net realized gain on investment transactions:
A Class .................................. -- -- --
B Class .................................. -- -- --
C Class .................................. -- -- --
------------- ------------- -------------
(769,385) (990,891) (1,678,433)
------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class .................................. 2,016,155 4,379,503 1,433,773
B Class .................................. 1,078,465 436,113 663,450
C Class .................................. 19,659 112,596 411,903
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and net realized
gain on investment transactions:
A Class .................................. 241,012 333,066 600,374
B Class .................................. 46,582 59,832 115,298
C Class .................................. 1,664 2,457 3,770
------------- ------------- -------------
3,403,537 5,323,567 3,228,568
------------- ------------- -------------
Cost of shares repurchased:
A Class .................................. (1,987,092) (3,431,124) (6,896,123)
B Class .................................. (492,652) (626,734) (1,165,654)
C Class .................................. -- (136,546) --
------------- ------------- -------------
(2,479,744) (4,194,404) (8,061,777)
------------- ------------- -------------
Increase (decrease) in net assets derived
from capital share transactions .......... 923,793 1,129,163 (4,833,209)
------------- ------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS ............................ 895,920 1,596,740 (3,295,132)
NET ASSETS:
Beginning of period ......................... 35,624,802 34,028,062 37,323,194
------------- ------------- -------------
End of period ............................... $ 36,520,722 $ 35,624,802 $ 34,028,062
============= ============= =============
</TABLE>
<PAGE>
[RESTUBBED FORM TABLE ABOVE]
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS II, INC.
TAX-FREE COLORADO FUND
-----------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ....................... $ 8,976,895 $ 11,994,585 $ 18,751,211
Net realized gain on investment
transactions ............................. 1,117,355 1,633,238 4,504,945
Net change in unrealized appreciation/
depreciation of investments .............. (2,143,646) 2,760,702 15,302,638
------------- ------------- -------------
Net increase in net assets resulting
from operations .......................... 7,950,604 16,388,525 38,558,794
------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class .................................. (8,690,555) (11,694,571) (18,996,568)
B Class .................................. (237,171) (248,074) (263,048)
C Class .................................. (51,981) (51,940) (73,064)
Net realized gain on investment transactions:
A Class .................................. -- -- --
B Class .................................. -- -- --
C Class .................................. -- -- --
------------- ------------- -------------
(8,979,707) (11,994,585) (19,332,680)
------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class .................................. 28,657,554 20,124,058 24,861,682
B Class .................................. 2,497,404 2,827,447 3,577,245
C Class .................................. 1,364,567 653,282 556,067
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and net realized
gain on investment transactions:
A Class .................................. 5,599,662 7,480,101 12,735,946
B Class .................................. 174,633 187,098 223,373
C Class .................................. 42,435 45,159 68,964
------------- ------------- -------------
38,336,255 31,317,145 42,023,277
------------- ------------- -------------
Cost of shares repurchased:
A Class .................................. (25,492,191) (32,727,131) (56,711,281)
B Class .................................. (437,155) (200,239) (535,127)
C Class .................................. (138,040) (350,446) (537,497)
------------- ------------- -------------
(26,067,386) (33,277,816) (57,783,905)
------------- ------------- -------------
Increase (decrease) in net assets derived
from capital share transactions .......... 12,268,869 (1,960,671) (15,760,628)
------------- ------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS ............................ 11,239,766 2,433,269 3,465,486
NET ASSETS:
Beginning of period ......................... 369,921,391 367,488,122 364,022,636
------------- ------------- -------------
End of period ............................... $ 381,161,157 $ 369,921,391 $ 367,488,122
============= ============= =============
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 31
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
VOYAGEUR INVESTMENT TRUST VOYAGEUR INVESTMENT TRUST
TAX-FREE NEW MEXICO FUND TAX-FREE UTAH FUND
----------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97 2/28/99 8/31/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ................................ $550,261 $697,922 $1,021,240 $75,468 $115,621 $197,470
Net realized gain on investment transactions ......... 24,123 77,783 272,561 54,119 33,973 57,047
Net change in unrealized appreciation/
depreciation of investments ....................... (244,792) 261,566 651,320 (55,050) 270 111,041
----------- ----------- ----------- ---------- ---------- ----------
Net increase in net assets resulting from operations . 329,592 1,037,271 1,945,121 74,537 149,864 365,558
----------- ----------- ----------- ---------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ........................................... (504,143) (651,989) (994,922) (63,372) (99,545) (178,847)
B Class ........................................... (37,962) (36,725) (38,815) (12,125) (16,076) (20,903)
C Class ........................................... (8,161) (9,208) (12,451) - - -
Net realized gain on investment transactions:
A Class ........................................... - - - (19,377) - -
B Class ........................................... - - - (4,497) - -
C Class ........................................... - - - - - -
----------- ----------- ----------- ---------- ---------- ----------
(550,266) (697,922) (1,046,188) (99,371) (115,621) (199,750)
----------- ----------- ----------- ---------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ........................................... 2,060,614 2,755,802 1,142,996 89,202 114,506 199,784
B Class ........................................... 540,224 672,097 316,181 1,995 32,104 133,701
C Class ........................................... 63,000 65,066 96,958 - - -
Netasset value of shares issued upon reinvestment
of dividends from net investment income and net
realized gain on investment transactions:
A Class ........................................... 269,223 348,247 546,725 25,683 30,175 61,141
B Class ........................................... 22,390 21,510 22,585 12,431 11,858 18,642
C Class ........................................... 8,059 8,588 12,667 - - -
----------- ----------- ----------- ---------- ---------- ----------
2,963,510 3,871,310 2,138,112 129,311 188,643 413,268
----------- ----------- ----------- ---------- ---------- ----------
Cost of shares repurchased:
A Class ........................................... (590,878) (1,217,766) (3,709,704) (201,123) (592,413) (1,040,871)
B Class ........................................... (116,064) (6) (109,361) (285) - (15,563)
C Class ........................................... (50,677) - (148,298) - - -
----------- ----------- ----------- ---------- ---------- ----------
(757,619) (1,217,772) (3,967,363) (201,408) (592,413) (1,056,434)
----------- ----------- ----------- ---------- ---------- ----------
Increase (decrease) in net assets derived from capital
share transactions ................................ 2,205,891 2,653,538 (1,829,251) (72,097) (403,770) (643,166)
NET INCREASE (DECREASE) IN NET ASSETS ................ 1,985,217 2,992,887 (930,318) (96,931) (369,527) (477,358)
NET ASSETS:
Beginning of period .................................. 23,331,323 20,338,436 21,268,754 3,411,122 3,780,649 4,258,007
----------- ----------- ----------- ---------- ---------- ----------
End of period ........................................ $25,316,540 $23,331,323 $20,338,436 $3,314,191 $3,411,122 $3,780,649
=========== =========== =========== ========== ========== ==========
</TABLE>
See accompanying notes
<PAGE>
32 for tax-exempt income
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE ARIZONA FUND A CLASS
--------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED 3/2/95(2)
2/28/99(1) 8/31/98(1) 12/31/97(5) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $11.210 $11.140 $10.700 $10.750 $10.000
Income from investment operations:
Net investment income .................................. 0.270 0.376 0.589 0.580 0.460
Net realized and unrealized gain (loss)
from investments ...................................... (0.025) 0.170 0.455 (0.010) 0.840
------- ------- ------- ------- -------
Total from investment operations ....................... 0.245 0.546 1.044 0.570 1.300
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................... (0.270) (0.376) (0.589) (0.580) (0.460)
Distributions from net realized gain on
investment transactions ............................... (0.115) (0.100) (0.015) (0.040) (0.090)
------- ------- ------- ------- -------
Total dividends and distributions ...................... (0.385) (0.476) (0.604) (0.620) (0.550)
------- ------- ------- ------- -------
Net asset value, end of period ............................ $11.070 $11.210 $11.140 $10.700 $10.750
======= ======= ======= ======= =======
Total Return(3) ........................................... 2.23% 4.99% 10.07% 5.48% 13.27%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $16,520 $12,177 $10,916 $9,755 $6,225
Ratio of expenses to average net assets ................ 0.54% 0.49% 0.48% 0.46% 0.52%(4)
Ratio of expenses to average net assets prior
to expense limitation ................................. 1.12% 1.07% 1.08% 1.25% 1.25%(4)
Ratio of net investment income to average net assets ... 4.92% 5.03% 5.42% 5.43% 5.19%(4)
Ratio of net investment income to average net assets
prior to expense limitation ........................... 4.34% 4.45% 4.82% 4.64% 4.46%(4)
Portfolio turnover ..................................... 56% 96% 39% 70% 38%
</TABLE>
- -----------------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 33
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE ARIZONA FUND B CLASS
---------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED 6/29/95(2)
2/28/99(1) 8/31/98(1) 12/31/97(5) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $11.200 $11.140 $10.690 $10.740 $10.300
Income from investment operations:
Net investment income ................................ 0.223 0.319 0.502 0.510 0.260
Net realized and unrealized gain (loss)
from investments .................................... (0.025) 0.160 0.469 (0.010) 0.530
------- ------- ------- ------- -------
Total from investment operations ..................... 0.198 0.479 0.971 0.500 0.790
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................. (0.223) (0.319) (0.506) (0.510) (0.260)
Distributions from net realized gain on
investment transactions ............................. (0.115) (0.100) (0.015) (0.040) (0.090)
------- ------- ------- ------- -------
Total dividends and distributions .................... (0.338) (0.419) (0.521) (0.550) (0.350)
------- ------- ------- ------- -------
Net asset value, end of period .......................... $11.060 $11.200 $11.140 $10.690 $10.740
======= ======= ======= ======= =======
Total Return(3) ......................................... 1.86% 4.38% 9.34% 4.84% 7.74%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .............. $5,182 $4,952 $3,711 $3,491 $1,629
Ratio of expenses to average net assets .............. 1.29% 1.23% 1.22% 1.11% 0.99%(4)
Ratio of expenses to average net assets prior
to expense limitation ............................... 1.87% 1.81% 1.82% 2.00% 2.00%(4)
Ratio of net investment income to average net assets . 4.17% 4.29% 4.68% 4.77% 4.60%(4)
Ratio of net investment income to average net assets
prior to expense limitation ......................... 3.59% 3.71% 4.08% 3.88% 3.59%(4)
Portfolio turnover ................................... 56% 96% 39% 70% 38%
</TABLE>
- ------------------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
34 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE ARIZONA FUND C CLASS
---------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED 5/13/95(2)
2/28/99(1) 8/31/98(1) 12/31/97(5) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $11.230 $11.160 $10.710 $10.760 $10.200
Income from investment operations:
Net investment income ................................. 0.226 0.313 0.534 0.500 0.300
Net realized and unrealized gain (loss)
from investments ..................................... (0.022) 0.176 0.437 (0.010) 0.650
------- ------- ------- ------- -------
Total from investment operations ...................... 0.204 0.489 0.971 0.490 0.950
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .................. (0.229) (0.319) (0.506) (0.500) (0.300)
Distributions from net realized gain on
investment transactions .............................. (0.115) (0.100) (0.015) (0.040) (0.090)
------- ------- ------- ------- -------
Total dividends and distributions ..................... (0.344) (0.419) (0.521) (0.540) (0.390)
------- ------- ------- ------- -------
Net asset value, end of period ........................... $11.090 $11.230 $11.160 $10.710 $10.760
======= ======= ======= ======= =======
Total Return(3) .......................................... 1.85% 4.46% 9.32% 4.70% 9.43%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $752 $632 $332 $23 $27
Ratio of expenses to average net assets ............... 1.29% 1.23% 1.23% 1.21% 1.20%(4)
Ratio of expenses to average net assets prior
to expense limitation ................................ 1.87% 1.81% 1.83% 2.00% 2.00%(4)
Ratio of net investment income to average net assets .. 4.17% 4.29% 4.67% 4.68% 4.65%(4)
Ratio of net investment income to average net assets
prior to expense limitation .......................... 3.59% 3.71% 4.07% 3.89% 3.85%(4)
Portfolio turnover .................................... 56% 96% 39% 70% 38%
</TABLE>
- ------------------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 35
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INSURED FUNDS, INC.
TAX-FREE ARIZONA INSURED FUND A CLASS
-------------------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99(1) 8/31/98(1) 12/31/97(3) 12/31/96 12/31/95 12/31/94 12/31/93
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $11.550 $11.470 $11.060 $11.150 $ 9.860 $11.310 $10.710
Income from investment operations:
Net investment income ..................... 0.262 0.358 0.548 0.530 0.540 0.550 0.580
Net realized and unrealized gain (loss)
from investments ......................... - 0.080 0.416 (0.090) 1.310 (1.370) 0.740
------- ------- ------- ------- ------- ------- -------
Total from investment operations .......... 0.262 0.438 0.964 0.440 1.850 (0.820) 1.320
------- ------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ...... (0.262) (0.358) (0.554) (0.530) (0.560) (0.530) (0.580)
Distributions from net realized gain on
investment transactions .................. - - - - - (0.040) (0.140)
In excess of net realized gains ........... - - - - - (0.060) -
------- ------- ------- ------- ------- ------- -------
Total dividends and distributions ......... (0.262) (0.358) (0.554) (0.530) (0.560) (0.630) (0.720)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period ............... $11.550 $11.550 $11.470 $11.060 $11.150 $9.860 $11.310
======= ======= ======= ======= ======= ======= =======
Total Return(2) .............................. 2.28% 3.88% 8.96% 4.09% 19.10% (7.41%) 12.64%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ... $177,103 $179,306 $186,485 $209,258 $238,114 $231,736 $263,312
Ratio of expenses to average net assets ... 0.85% 0.84% 0.84% 0.82% 0.69% 0.72% 0.59%
Ratio of expenses to average net assets
prior to expense limitation .............. 0.85% 0.91% 0.89% 0.95% 0.95% 0.92% 1.03%
Ratio of net investment income to average
net assets ............................... 4.40% 4.68% 4.92% 4.89% 5.07% 5.20% 5.00%
Ratio of net investment income to average
net assets prior to expense limitation ... 4.40% 4.61% 4.87% 4.76% 4.81% 5.00% 4.56%
Portfolio turnover ........................ 36% 21% 42% 42% 42% 25% 34%
</TABLE>
- ------------------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) 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.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
36 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INSURED FUNDS, INC.
TAX-FREE ARIZONA INSURED FUND B CLASS
--------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED 3/10/95(2)
2/28/99(1) 8/31/98(1) 12/31/97(5) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $11.550 $11.460 $11.050 $11.140 $10.440
Income from investment operations:
Net investment income ................................. 0.218 0.300 0.455 0.450 0.380
Net realized and unrealized gain (loss)
from investments ..................................... - 0.091 0.414 (0.090) 0.690
------- ------- ------- ------- -------
Total from investment operations ...................... 0.218 0.391 0.869 0.360 1.070
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .................. (0.218) (0.301) (0.459) (0.450) (0.370)
Distributions from net realized gain on
investment transactions .............................. - - - - -
In excess of net realized gains ....................... - - - - -
------- ------- ------- ------- -------
Total dividends and distributions ..................... (0.218) (0.301) (0.459) (0.450) (0.370)
------- ------- ------- ------- -------
Net asset value, end of period ........................... $11.550 $11.550 $11.460 $11.050 $11.140
======= ======= ======= ======= =======
Total Return(3) .......................................... 1.90% 3.46% 8.06% 3.32% 10.36%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $5,758 $4,782 $3,657 $3,110 $2,048
Ratio of expenses to average net assets ............... 1.60% 1.59% 1.65% 1.59% 1.33%(4)
Ratio of expenses to average net assets
prior to expense limitation .......................... 1.60% 1.66% 1.70% 1.70% 1.60%(4)
Ratio of net investment income to average net assets .. 3.65% 3.93% 4.11% 4.11% 4.08%(4)
Ratio of net investment income to average net assets
prior to expense limitation .......................... 3.65% 3.86% 4.06% 4.00% 3.81%(4)
Portfolio turnover .................................... 36% 21% 42% 42% 42%
</TABLE>
- ------------------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 37
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Voyageur Insured Funds, Inc.
Tax-Free Arizona Insured Fund C Class
-------------------------------------------------------------------------
Six Months Eight Months Year Year Year Period from
Ended Ended Ended Ended Ended 5/26/94(2)
2/28/99(1) 8/31/98(1) 12/31/97(5) 12/31/96 12/31/95 to 12/31/94
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............... $11.560 $11.470 $11.060 $11.150 $9.860 $10.480
Income from investment operations:
Net investment income ........................... 0.218 0.301 0.456 0.430 0.450 0.270
Net realized and unrealized gain (loss)
from investments .............................. - 0.090 0.414 (0.090) 1.310 (0.560)
------- ------- ------- ------- ------- ------
Total from investment operations ................ 0.218 0.391 0.870 0.340 1.760 (0.290)
------- ------- ------- ------- ------- ------
Less dividends and distributions:
Dividends from net investment income ............ (0.218) (0.301) (0.460) (0.430) (0.470) (0.250)
Distributions from net realized gain on
investment transactions ....................... - - - - - (0.040)
In excess of net realized gains ................. - - - - - (0.040)
------- ------- ------- ------- ------- ------
Total dividends and distributions ............... (0.218) (0.301) (0.460) (0.430) (0.470) (0.330)
------- ------- ------- ------- ------- ------
Net asset value, end of period ..................... $11.560 $11.560 $11.470 $11.060 $11.150 $9.860
======= ======= ======= ======= ======= ======
Total Return(3) .................................... 1.90% 3.46% 8.05% 3.18% 18.10% (2.84%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ......... $1,397 $627 $675 $554 $541 $326
Ratio of expenses to average net assets ......... 1.60% 1.59% 1.65% 1.70% 1.54% 1.50%(4)
Ratio of expenses to average net assets
prior to expense limitation ................... 1.60% 1.66% 1.70% 1.70% 1.69% 1.71%(4)
Ratio of net investment income
to average net assets ......................... 3.65% 3.93% 4.11% 4.01% 4.18% 4.10%(4)
Ratio of net investment income to average
net assets prior to expense limitation ........ 3.65% 3.86% 4.06% 4.01% 4.03% 3.89%(4)
Portfolio turnover .............................. 36% 21% 42% 42% 42% 25%
</TABLE>
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
38 for tax-exempt income
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Voyageur Mutual Funds, Inc.
Tax-Free California Fund A Class
Six Months Eight Months Year Year Period from
Ended Ended Ended Ended 3/2/95(2)
2/28/99(1) 8/31/98(1) 12/31/97(5) 12/31/96 to 12/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $11.220 $11.050 $10.430 $10.640 $10.000
Income from investment operations:
Net investment income ................................... 0.278 0.387 0.590 0.600 0.470
Net realized and unrealized gain (loss) from investments 0.032 0.163 0.665 (0.180) 0.700
------- ------- ------- ------- -------
Total from investment operations ........................ 0.310 0.550 1.255 0.420 1.170
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .................... (0.277) (0.380) (0.595) (0.600) (0.470)
Distributions from net realized gain on
investment transactions ............................... (0.023) - (0.040) (0.030) (0.060)
------- ------- ------- ------- -------
Total dividends and distributions ....................... (0.300) (0.380) (0.635) (0.630) (0.530)
------- ------- ------- ------- -------
Net asset value, end of period ............................. $11.230 $11.220 $11.050 $10.430 $10.640
======= ======= ======= ======= =======
Total Return(3) ............................................ 2.78% 5.07% 12.43% 4.21% 11.97%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $19,963 $11,600 $4,385 $1,218 $1,012
Ratio of expenses to average net assets ................. 0.25% 0.22% 0.13% 0.27% 0.46%(4)
Ratio of expenses to average net assets prior
to expense limitation ................................. 0.89% 1.07% 1.19% 1.25% 1.22%(4)
Ratio of net investment income to average net assets .... 4.91% 5.00% 5.32% 5.71% 5.57%(4)
Ratio of net investment income to average net assets
prior to expense limitation ........................... 4.27% 4.15% 4.26% 4.73% 4.81%(4)
Portfolio turnover ...................................... 86% 62% 17% 8% 40%
</TABLE>
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 39
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Voyageur Mutual Funds, Inc.
Tax-Free California Fund B Class
------------------------------------------------------------------
Six Months Eight Months Year Year Period from
Ended Ended Ended Ended 8/23/95(2)
2/28/99(1) 8/31/98(1) 12/31/97(5) 12/31/96 to 12/31/95
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $11.260 $11.080 $10.440 $10.650 $9.960
Income from investment operations:
Net investment income ................................... 0.241 0.319 0.520 0.560 0.200
Net realized and unrealized gain (loss) from investments 0.023 0.186 0.688 (0.180) 0.740
------- ------- ------- ------- -------
Total from investment operations ........................ 0.264 0.505 1.208 0.380 0.940
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .................... (0.241) (0.325) (0.528) (0.560) (0.190)
Distributions from net realized gain on
investment transactions ............................... (0.023) - (0.040) (0.030) (0.060)
------- ------- ------- ------- -------
Total dividends and distributions ....................... (0.264) (0.325) (0.568) (0.590) (0.250)
------- ------- ------- ------- -------
Net asset value, end of period ............................. $11.260 $11.260 $11.080 $10.440 $10.650
======= ======= ======= ======= =======
Total Return(3) ............................................ 2.30% 4.62% 11.91% 3.77% 9.52%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $11,305 $8,962 $5,576 $660 $128
Ratio of expenses to average net assets ................. 1.00% 0.97% 0.80% 0.50% 0.60%(4)
Ratio of expenses to average net assets prior
to expense limitation ................................. 1.64% 1.82% 1.86% 2.00% 1.93%(4)
Ratio of net investment income to average net assets .... 4.16% 4.27% 4.65% 5.34% 5.33%(4)
Ratio of net investment income to average net assets
prior to expense limitation ........................... 3.52% 3.42% 3.59% 3.84% 4.00%(4)
Portfolio turnover ...................................... 86% 62% 17% 8% 40%
</TABLE>
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
40 for tax-exempt income
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Voyageur Mutual Funds, Inc.
Tax-Free California Fund C Class
--------------------------------------------------
Six Months Eight Months Year Period from
Ended Ended Ended 4/9/96(2)
2/28/99(1) 8/31/98(1) 12/31/97(5) to 12/31/96
(Unaudited)
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............................................. $11.230 $11.050 $10.420 $10.070
Income from investment operations:
Net investment income ......................................................... 0.235 0.335 0.487 0.370
Net realized and unrealized gain (loss) from investments ...................... 0.033 0.170 0.696 0.380
------- ------- ------- -------
Total from investment operations .............................................. 0.268 0.505 1.183 0.750
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income .......................................... (0.235) (0.325) (0.513) (0.370)
Distributions from net realized gain on investment transactions ............... (0.023) - (0.040) (0.030)
------- ------- ------- -------
Total dividends and distributions ............................................. (0.258) (0.325) (0.553) (0.400)
------- ------- ------- -------
Net asset value, end of period ................................................... $11.240 $11.230 $11.050 $10.420
======= ======= ======= =======
Total Return(3) .................................................................. 2.40% 4.64% 11.69% 7.58%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ....................................... $2,915 $774 $109 $94
Ratio of expenses to average net assets ....................................... 1.00% 0.97% 0.87% 0.78%(4)
Ratio of expenses to average net assets prior to expense limitation ........... 1.64% 1.82% 1.93% 2.00%(4)
Ratio of net investment income to average net assets .......................... 4.16% 4.27% 4.58% 5.13%(4)
Ratio of net investment income to average net assets prior to
expense limitation .......................................................... 3.52% 3.42% 3.52% 3.91%(4)
Portfolio turnover ............................................................ 86% 62% 17% 8%
</TABLE>
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 41
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Voyageur Investment Trust
Tax-Free California Insured Fund A Class
--------------------------------------------------------------------------------------
Six Months Eight Months Year Year Year Two Months Year
Ended Ended Ended Ended Ended Ended Ended
2/28/99(1) 8/31/98(1) 12/31/97(4) 12/31/96 12/31/95 12/31/94 10/31/94 10/31/93
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........ $11.130 $10.980 $10.500 $10.650 $9.330 $9.510 $11.080 $10.020
Income from investment operations:
Net investment income .................... 0.248 0.345 0.513 0.520 0.530 0.100 0.550 0.600
Net realized and unrealized gain
(loss) from investments ................ (0.010) 0.150 0.486 (0.150) 1.340 (0.180) (1.520) 1.110
------- ------- ------- ------- ------ ------ ------- -------
Total from investment operations ......... 0.238 0.495 0.999 0.370 1.870 (0.080) (0.970) 1.710
------- ------- ------- ------- ------ ------ ------- -------
Less dividends and distributions:
Dividends from net investment income ..... (0.248) (0.345) (0.519) (0.520) (0.550) (0.090) (0.540) (0.600)
Distributions from net realized gain on
investment transactions ................ - - - - - (0.010) (0.060) (0.050)
------- ------- ------- ------- ------ ------ ------- -------
Total dividends and distributions ........ (0.248) (0.345) (0.519) (0.520) (0.550) (0.100) (0.600) (0.650)
------- ------- ------- ------- ------ ------ ------- -------
Net asset value, end of period .............. $11.120 $11.130 $10.980 $10.500 $10.650 $9.330 $9.510 $11.080
======= ======= ======= ======= ======= ====== ====== =======
Total Return(2) ............................. 2.15% 4.58% 9.78% 3.63% 20.51% (0.84%) (8.97%) 17.29%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) .......................... $28,823 $28,577 $26,923 $30,551 $33,860 $27,994 $27,282 $12,509
Ratio of expenses
to average net assets .................. 0.97% 0.94% 0.99% 0.82% 0.70% 0.10%(3) 0.20% 0.00%
Ratio of expenses to average net
assets prior to expense limitation ..... 1.06% 0.94% 1.02% 1.01% 1.02% 1.24%(3) 1.25% 1.25%
Ratio of net investment income
to average net assets .................. 4.49% 4.69% 4.85% 5.05% 5.23% 6.30%(3) 5.37% 5.26%
Ratio of net investment income
to average net assets prior
to expense limitation .................. 4.40% 4.69% 4.82% 4.86% 4.91% 5.16%(3) 4.32% 4.01%
Portfolio turnover ....................... 84% 44% 63% 55% 107% 7% 18% 24%
</TABLE>
- ----------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) 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.
(3) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
42 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE CALIFORNIA INSURED FUND B CLASS
-------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED
2/28/99(1) 8/31/98(1) 12/31/97(5) 12/31/96
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.130 $10.990 $10.500 $10.650
Income from investment operations:
Net investment income .............................. 0.206 0.290 0.457 0.480
Net realized and unrealized gain
(loss) from investments .......................... -- 0.140 0.495 (0.150)
------- ------- ------- -------
Total from investment operations ................... 0.206 0.430 0.952 0.330
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.206) (0.290) (0.462) (0.480)
Distributions from net realized gain
on investment transactions ....................... -- -- -- --
------- ------- ------- -------
Total dividends and distributions .................. (0.206) (0.290) (0.462) (0.480)
------- ------- ------- -------
Net asset value, end of period ........................ $11.130 $11.130 $10.990 $10.500
======= ======= ======= =======
Total Return(3) ....................................... 1.87% 3.96% 9.29% 3.22%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $7,215 $6,588 $6,629 $6,717
Ratio of expenses to average net assets ............ 1.72% 1.69% 1.53% 1.21%
Ratio of expenses to average net assets prior
to expense limitation ............................ 1.81% 1.69% 1.56% 1.76%
Ratio of net investment income to average
net assets ....................................... 3.74% 3.94% 4.31% 4.64%
Ratio of net investment income to average
net assets prior to expense limitation ........... 3.65% 3.94% 4.28% 4.09%
Portfolio turnover ................................. 84% 44% 63% 55%
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE CALIFORNIA INSURED FUND B CLASS
----------------------------------------
YEAR TWO MONTHS PERIOD FROM
ENDED ENDED 3/1/94(2) TO
12/31/95 12/31/94 10/31/94
<S> <C> <C> <C>
Net asset value, beginning of period .................. $9.330 $9.510 $10.680
Income from investment operations:
Net investment income .............................. 0.500 0.080 0.310
Net realized and unrealized gain
(loss) from investments .......................... 1.330 (0.170) (1.160)
------- ------ -------
Total from investment operations ................... 1.830 (0.090) (0.850)
------- ------ -------
Less dividends and distributions:
Dividends from net investment income ............... (0.510) (0.080) (0.300)
Distributions from net realized gain
on investment transactions ....................... -- (0.010) (0.020)
------- ------ -------
Total dividends and distributions .................. (0.510) (0.090) (0.320)
------- ------ -------
Net asset value, end of period ........................ $10.650 $9.330 $ 9.510
======= ====== =======
Total Return(3) ....................................... 20.01% (0.92%) (7.93%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $6,029 $2,219 $ 1,427
Ratio of expenses to average net assets ............ 1.10% 0.57%(4) 0.73%(4)
Ratio of expenses to average net assets prior
to expense limitation ............................ 1.75% 1.94%(4) 1.95%(4)
Ratio of net investment income to average
net assets ....................................... 4.75% 5.54%(4) 4.82%(4)
Ratio of net investment income to average
net assets prior to expense limitation ........... 4.10% 4.17%(4) 3.60%(4)
Portfolio turnover ................................. 107% 7% 18%
</TABLE>
- --------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 43
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE CALIFORNIA INSURED FUND C CLASS
--------------------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED 4/12/95(2)
2/28/99(1) 8/31/98(1) 12/31/97(5) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.090 $10.940 $10.460 $10.650 $10.190
Income from investment operations:
Net investment income .............................. 0.207 0.289 0.485 0.440 0.250
Net realized and unrealized gain
(loss) from investments .......................... (0.010) 0.151 0.432 (0.190) 0.530
------- ------- ------- ------- -------
Total from investment operations ................... 0.197 0.440 0.917 0.250 0.780
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.207) (0.290) (0.437) (0.440) (0.320)
Distributions from net realized gain on
investment transactions .......................... -- -- -- -- --
------- ------- ------- ------- -------
Total dividends and distributions .................. (0.207) (0.290) (0.437) (0.440) (0.320)
------- ------- ------- ------- -------
Net asset value, end of period ........................ $11.080 $11.090 $10.940 $10.460 $10.650
======= ======= ======= ======= =======
Total Return(3) ....................................... 1.78% 4.08% 8.98% 2.47% 7.77%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $481 $461 $476 $55 $53
Ratio of expenses to average net assets ............ 1.72% 1.69% 1.71% 1.58% 1.53%(4)
Ratio of expenses to average net assets prior
to expense limitation ............................ 1.81% 1.69% 1.74% 1.77% 1.77%(4)
Ratio of net investment income to average
net assets ....................................... 3.74% 3.94% 4.13% 4.02% 4.25%(4)
Ratio of net investment income to average
net assets prior to expense limitation ........... 3.65% 3.94% 4.10% 3.83% 4.01%(4)
Portfolio turnover ................................. 84% 44% 63% 55% 107%
</TABLE>
- --------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
44 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS II, INC.
TAX-FREE COLORADO FUND A CLASS
------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED
2/28/99(1) 8/31/98(1) 12/31/97(3) 12/31/96
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.510 $11.380 $10.780 $10.900
Income from investment operations:
Net investment income .............................. 0.277 0.376 0.574 0.560
Net realized and unrealized gain (loss)
from investments ................................. (0.030) 0.130 0.618 (0.130)
-------- -------- -------- --------
Total from investment operations ................... 0.247 0.506 1.192 0.430
-------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ............... (0.277) (0.376) (0.592) (0.550)
Distributions from net realized gain
on investment transactions ....................... -- -- -- --
-------- -------- -------- --------
Total dividends and distributions .................. (0.277) (0.376) (0.592) (0.550)
-------- -------- -------- --------
Net asset value, end of period ........................ $11.480 $11.510 $11.380 $10.780
======== ======== ======== ========
Total Return(2) ....................................... 2.16% 4.51% 11.40% 4.08%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $364,908 $357,127 $357,993 $358,328
Ratio of expenses to average net assets ............ 0.85% 0.83% 0.81% 0.78%
Ratio of expenses to average net assets prior
to expense limitation ............................ 0.85% 0.92% 0.86% 0.91%
Ratio of net investment income
to average net assets ............................ 4.87% 4.93% 5.25% 5.27%
Ratio of net investment income to average
net assets prior to expense limitation ........... 4.87% 4.84% 5.20% 5.14%
Portfolio turnover ................................. 55% 36% 54% 40%
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<CAPTION>
VOYAGEUR MUTUAL FUNDS II, INC.
TAX-FREE COLORADO FUND A CLASS
---------------------------------
YEAR YEAR YEAR
ENDED ENDED ENDED
12/31/95 12/31/94 12/31/93
<S> <C> <C> <C>
Net asset value, beginning of period .................. $9.530 $11.100 $10.570
Income from investment operations:
Net investment income .............................. 0.540 0.550 0.560
Net realized and unrealized gain (loss)
from investments ................................. 1.380 (1.540) 0.850
-------- -------- --------
Total from investment operations ................... 1.920 (0.990) 1.410
-------- -------- --------
Less dividends and distributions:
Dividends from net investment income ............... (0.550) (0.540) (0.560)
Distributions from net realized gain
on investment transactions ....................... -- (0.040) (0.320)
-------- -------- --------
Total dividends and distributions .................. (0.550) (0.580) (0.880)
-------- -------- --------
Net asset value, end of period ........................ $10.900 $9.530 $11.100
======== ======== ========
Total Return(2) ....................................... 20.54% (9.12%) 13.72%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $392,815 $354,138 $399,218
Ratio of expenses to average net assets ............ 0.76% 0.66% 0.75%
Ratio of expenses to average net assets prior
to expense limitation ............................ 0.93% 0.72% 0.75%
Ratio of net investment income
to average net assets ............................ 5.18% 5.35% 4.97%
Ratio of net investment income to average
net assets prior to expense limitation ........... 5.01% 5.29% 4.97%
Portfolio turnover ................................. 82% 69% 59%
</TABLE>
- -------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) 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.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 45
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS II, INC.
TAX-FREE COLORADO FUND B CLASS
------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED 3/22/95(2)
2/28/99(1) 8/31/98(1) 12/31/97(5) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.510 $11.380 $10.780 $10.900 $10.250
Income from investment operations:
Net investment income .............................. 0.234 0.319 0.483 0.470 0.350
Net realized and unrealized gain (loss)
from investments ................................. (0.020) 0.130 0.616 (0.130) 0.650
------- ------- ------- ------- -------
Total from investment operations ................... 0.214 0.449 1.099 0.340 1.000
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.234) (0.319) (0.499) (0.460) (0.350)
Distributions from net realized gain
on investment transactions ....................... -- -- -- -- --
------- ------- ------- ------- -------
Total dividends and distributions .................. (0.234) (0.319) (0.499) (0.460) (0.350)
------- ------- ------- ------- -------
Net asset value, end of period ........................ $11.490 $11.510 $11.380 $10.780 $10.900
======= ======= ======= ======= =======
Total Return(3) ....................................... 1.87% 3.99% 10.47% 3.25% 9.96%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $12,925 $10,726 $7,798 $4,172 $1,643
Ratio of expenses to average net assets ............ 1.60% 1.58% 1.62% 1.58% 1.39%(4)
Ratio of expenses to average net assets prior
to expense limitation ............................ 1.60% 1.67% 1.67% 1.65% 1.60%(4)
Ratio of net investment income to average
net assets ....................................... 4.12% 4.18% 4.44% 4.45% 3.96%(4)
Ratio of net investment income to average
net assets prior to expense limitation ........... 4.12% 4.09% 4.39% 4.38% 3.75%(4)
Portfolio turnover ................................. 55% 36% 54% 40% 82%
</TABLE>
- -------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
46 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS II, INC.
TAX-FREE COLORADO FUND C CLASS
-------------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED ENDED 5/6/94(2)
2/28/99(1) 8/31/98(1) 12/31/97(5) 12/31/96 12/31/95 TO 12/31/94
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.520 $11.380 $10.780 $10.900 $9.530 $10.210
Income from investment operations:
Net investment income .............................. 0.231 0.319 0.484 0.460 0.450 0.290
Net realized and unrealized gain
(loss) from investments .......................... (0.027) 0.140 0.615 (0.130) 1.370 (0.670)
------- ------- ------- ------- ------- -------
Total from investment operations ................... 0.204 0.459 1.099 0.330 1.820 (0.380)
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.234) (0.319) (0.499) (0.450) (0.450) (0.270)
Distributions from net realized gain
on investment transactions ....................... -- -- -- -- -- (0.030)
------- ------- ------- ------- ------- -------
Total dividends and distributions .................. (0.234) (0.319) (0.499) (0.450) (0.450) (0.300)
------- ------- ------- ------- ------- -------
Net asset value, end of period ........................ $11.490 $11.520 $11.380 $10.780 $10.900 $ 9.530
======= ======= ======= ======= ======= =======
Total Return(3) ....................................... 1.79% 4.08% 10.47% 3.17% 19.44% (3.75%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $3,328 $2,068 $1,697 $1,522 $1,042 $465
Ratio of expenses to average net assets ............ 1.60% 1.58% 1.64% 1.66% 1.66% 1.80%(4)
Ratio of expenses to average net assets
prior to expense limitation ...................... 1.60% 1.67% 1.69% 1.66% 1.66% 1.81%(4)
Ratio of net investment income
to average net assets ............................ 4.12% 4.18% 4.42% 4.40% 4.20% 4.23%(4)
Ratio of net investment income to average
net assets prior to expense limitation ........... 4.12% 4.09% 4.37% 4.40% 4.20% 4.22%(4)
Portfolio turnover ................................. 55% 36% 54% 40% 82% 69%
</TABLE>
- -------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 47
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE NEW MEXICO FUND A CLASS
------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED
2/28/99(1) 8/31/98(1) 12/31/97(4) 12/31/96
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.450 $11.280 $10.790 $10.890
Income from investment operations:
Net investment income .............................. 0.264 0.364 0.547 0.540
Net realized and unrealized gain (loss)
from investments ................................. (0.100) 0.171 0.503 (0.110)
------- ------- ------- -------
Total from investment operations ................... (0.164) 0.535 1.050 0.430
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.264) (0.365) (0.560) (0.530)
Distributions from net realized gain on
investment transactions .......................... -- -- -- --
------- ------- ------- -------
Total dividends and distributions .................. (0.264) (0.365) (0.560) (0.530)
------- ------- ------- -------
Net asset value, end of period ........................ $11.350 $11.450 $11.280 $10.790
======= ======= ======= =======
Total Return(2) ....................................... 1.44% 4.81% 10.01% 4.13%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $22,698 $21,155 $18,959 $20,133
Ratio of expenses to average net assets ............ 1.00% 1.00% 0.99% 0.88%
Ratio of expenses to average net assets
prior to expense limitation ...................... 1.03% 1.15% 1.04% 1.07%
Ratio of net investment income
to average net assets ............................ 4.66% 4.81% 5.00% 5.06%
Ratio of net investment income to average
net assets prior to expense limitation ........... 4.63% 4.66% 4.95% 4.87%
Portfolio turnover ................................. 21% 20% 28% 42%
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE NEW MEXICO FUND A CLASS
---------------------------------------------
YEAR TWO MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED
12/31/95 12/31/94 10/31/94 10/31/93
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $ 9.590 $9.770 $10.920 $10.000
Income from investment operations:
Net investment income .............................. 0.520 0.110 0.560 0.570
Net realized and unrealized gain (loss)
from investments ................................. 1.330 (0.200) (1.160) 0.980
------- ------- ------- -------
Total from investment operations ................... 1.850 (0.090) (0.600) 1.550
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.550) (0.090) (0.550) (0.570)
Distributions from net realized gain on
investment transactions .......................... -- -- -- (0.060)
------- ------- ------- -------
Total dividends and distributions .................. (0.550) (0.090) (0.550) (0.630)
------- ------- ------- -------
Net asset value, end of period ........................ $10.890 $9.590 $ 9.770 $10.920
======= ======= ======= =======
Total Return(2) ....................................... 19.64% (0.90%) (5.56%) 15.77%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $21,402 $19,706 $23,096 $17,302
Ratio of expenses to average net assets ............ 0.87% 0.06%(3) 0.29% 0.00%
Ratio of expenses to average net assets
prior to expense limitation ...................... 1.09% 1.25%(3) 1.16% 1.25%
Ratio of net investment income
to average net assets ............................ 5.07% 6.38%(3) 5.26% 5.10%
Ratio of net investment income to average
net assets prior to expense limitation ........... 4.85% 5.19%(3) 4.39% 3.85%
Portfolio turnover ................................. 55% 2% 23% 31%
</TABLE>
- -------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) 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.
(3) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
48 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE NEW MEXICO FUND B CLASS
------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED
2/28/99(1) 8/31/98(1) 12/31/97(5) 12/31/96
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.460 $11.290 $10.790 $10.890
Income from investment operations:
Net investment income .............................. 0.222 0.309 0.465 0.460
Net realized and unrealized gain (loss)
from investments ................................. (0.101) 0.169 0.508 (0.110)
------- ------- ------- -------
Total from investment operations ................... 0.121 0.478 0.973 0.350
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.221) (0.308) (0.473) (0.450)
Distributions from net realized gain on
investment transactions .......................... -- -- -- --
------- ------- ------- -------
Total dividends and distributions (0.221) (0.308) (0.473) (0.450)
------- ------- ------- -------
Net asset value, end of period ........................ $11.360 $11.460 $11.290 $10.790
======= ======= ======= =======
Total Return(3) ....................................... 1.07% 4.29% 9.24% 3.39%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $2,208 $1,782 $1,065 $794
Ratio of expenses to average net assets ............ 1.75% 1.75% 1.76% 1.61%
Ratio of expenses to average net assets
prior to expense limitation ...................... 1.78% 1.90% 1.81% 1.82%
Ratio of net investment income to
average net assets ............................... 3.91% 4.06% 4.23% 4.31%
Ratio of net investment income to average
net assets prior to expense limitation ........... 3.88% 3.91% 4.18% 4.10%
Portfolio turnover ................................. 21% 20% 28% 42%
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE NEW MEXICO FUND B CLASS
------------------------------------
YEAR TWO MONTHS PERIOD FROM
ENDED ENDED 3/3/94(2)
12/31/95 12/31/94 10/31/94
<S> <C> <C> <C>
Net asset value, beginning of period .................. $ 9.590 $9.770 $10.690
Income from investment operations:
Net investment income .............................. 0.460 0.090 0.310
Net realized and unrealized gain (loss)
from investments ................................. 1.320 (0.190) (0.930)
------- ------- -------
Total from investment operations ................... 1.780 (0.100) (0.620)
------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.480) (0.080) (0.300)
Distributions from net realized gain on
investment transactions .......................... -- -- --
------- ------- -------
Total dividends and distributions (0.480) (0.080) (0.300)
------- ------- -------
Net asset value, end of period ........................ $10.890 $9.590 $ 9.770
======= ======= =======
Total Return(3) ....................................... 18.84% (0.98%) (5.84%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............ $605 $272 $264
Ratio of expenses to average net assets ............ 1.53% 0.75%(4) 0.98%(4)
Ratio of expenses to average net assets
prior to expense limitation ...................... 1.83% 2.00%(4) 1.86%(4)
Ratio of net investment income to
average net assets ............................... 4.33% 5.60%(4) 4.57%(4)
Ratio of net investment income to average
net assets prior to expense limitation ........... 4.03% 4.35%(4) 3.69%(4)
Portfolio turnover ................................. 55% 2% 23%
</TABLE>
- -------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 49
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE NEW MEXICO FUND C CLASS
----------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR PERIOD FROM
ENDED ENDED ENDED 5/7/96(2)
2/28/99(1) 8/31/98(1) 12/31/97(5) TO 12/31/96
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............................... $11.460 $11.280 $10.790 $10.410
Income from investment operations:
Net investment income ........................................... 0.222 0.305 0.459 0.280
Net realized and unrealized gain (loss)
from investments .............................................. (0.101) 0.183 0.495 0.370
------- ------- ------- -------
Total from investment operations ................................ 0.121 0.488 0.954 0.650
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............................ (0.221) (0.308) (0.464) (0.270)
Distributions from net realized gain on
investment transactions ....................................... -- -- -- --
------- ------- ------- -------
Total dividends and distributions ............................... (0.221) (0.308) (0.464) (0.270)
------- ------- ------- -------
Net asset value, end of period ..................................... $11.360 $11.460 $11.280 $10.790
======= ======= ======= =======
Total Return(3) .................................................... 1.07% 4.38% 9.06% 6.30%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ......................... $410 $394 $315 $341
Ratio of expenses to average net assets ......................... 1.75% 1.75% 1.84% 1.74%(4)
Ratio of expenses to average net assets prior
to expense limitation ......................................... 1.78% 1.90% 1.89% 1.83%(4)
Ratio of net investment income to average net assets ............ 3.91% 4.06% 4.15% 4.21%(4)
Ratio of net investment income to average net assets
prior to expense limitation ................................... 3.88% 3.91% 4.10% 4.12%(4)
Portfolio turnover .............................................. 21% 20% 28% 42%
</TABLE>
- -------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
50 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE UTAH FUND A CLASS
---------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED
2/28/99 8/31/98(1) 12/31/97(4) 12/31/96
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $11.440 $11.330 $10.840 $11.040
Income from investment operations:
Net investment income .............................. 0.268 0.372 0.565 0.550
Net realized and unrealized gain (loss)
from investments ................................. 0.004 0.110 0.495 (0.200)
------- ------- ------- -------
Total from investment operations ................... 0.272 0.482 1.060 0.350
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.268) (0.372) (0.570) (0.550)
Distributions from net realized gain on
investment transactions .......................... (0.084) -- -- --
------- ------- ------- -------
Total dividends and distributions .................. (0.352) (0.372) (0.570) (0.550)
------- ------- ------- -------
Net asset value, end of period ........................ $11.360 $11.440 $11.330 $10.840
======= ======= ======= =======
Total Return(2) ....................................... 2.41% 4.30% 10.08% 3.35%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) .................................... $2,697 $2,803 $3,223 $3,861
Ratio of expenses to average
net assets ....................................... 0.85% 0.76% 0.69% 0.68%
Ratio of expenses to average net assets
prior to expense limitation ...................... 1.23% 1.17% 3.12% 1.25%
Ratio of net investment income to
average net assets ............................... 4.76% 4.89% 5.10% 5.14%
Ratio of net investment income to
average net assets prior to
expense limitation ............................... 4.38% 4.48% 2.67% 4.57%
Portfolio turnover ................................. 25% 84% 39% 39%
<PAGE>
[RESTUBBED FROM PREVIOUS TABLE]
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE UTAH FUND A CLASS
-----------------------------------------------
YEAR TWO MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED
12/31/95 12/31/94 10/31/94 10/31/93
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................. $9.800 $9.940 $11.070 $10.000
Income from investment operations:
Net investment income .............................. 0.590 0.100 0.600 0.650
Net realized and unrealized gain (loss)
from investments ................................. 1.240 (0.150) (1.070) 1.070
------- ------- ------- -------
Total from investment operations ................... 1.830 (0.050) (0.470) 1.720
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............... (0.590) (0.090) (0.600) (0.650)
Distributions from net realized gain on
investment transactions .......................... -- -- (0.060) --
------- ------- ------- -------
Total dividends and distributions .................. (0.590) (0.090) (0.660) (0.650)
------- ------- ------- -------
Net asset value, end of period ........................ $11.040 $9.800 $9.940 $11.070
======= ======= ======= =======
Total Return(2) ....................................... 19.06% (0.41%) (4.50%) 17.54%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) .................................... $4,142 $3,728 $4,054 $3,913
Ratio of expenses to average
net assets ....................................... 0.38% 0.11%(3) 0.10% 0.00%
Ratio of expenses to average net assets
prior to expense limitation ...................... 1.25% 1.14%(3) 1.25% 1.25%
Ratio of net investment income to
average net assets ............................... 5.51% 6.38%(3) 5.64% 5.65%
Ratio of net investment income to
average net assets prior to
expense limitation ............................... 4.64% 5.35%(3) 4.49% 4.40%
Portfolio turnover ................................. 35% 0% 2% 44%
</TABLE>
- -------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) 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.
(3) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 51
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE UTAH FUND B CLASS
------------------------------------------------------------------
SIX MONTHS EIGHT MONTHS YEAR YEAR PERIOD FROM
ENDED ENDED ENDED ENDED 5/27/95(2)
2/28/99 8/31/98(1) 12/31/97(5) 12/31/96 TO 12/31/95
(UNAUDITED)(1)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $11.450 $11.330 $10.830 $11.040 $10.630
Income from investment operations:
Net investment income ................................ 0.226 0.313 0.464 0.470 0.300
Net realized and unrealized gain (loss)
from investments ................................... (0.006) 0.120 0.515 (0.210) 0.390
------- ------- ------- ------- -------
Total from investment operations ..................... 0.220 0.433 0.979 0.260 0.690
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ................. (0.226) (0.313) (0.479) (0.470) (0.280)
Distributions from net realized gain on
investment transactions ............................ (0.084) -- -- -- --
------- ------- ------- ------- -------
Total dividends and distributions .................... (0.310) (0.313) (0.479) (0.470) (0.280)
------- ------- ------- ------- -------
Net asset value, end of period .......................... $11.360 $11.450 $11.330 $10.830 $11.040
======= ======= ======= ======= =======
Total Return(3) ......................................... 1.94% 3.87% 9.28% 2.47% 6.60%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .............. $617 $608 $558 $397 $363
Ratio of expenses to average net assets .............. 1.60% 1.51% 1.50% 1.46% 0.92%(4)
Ratio of expenses to average net assets prior to
expense limitation ................................. 1.98% 1.92% 3.93% 2.00% 2.00%(4)
Ratio of net investment income to average net assets . 4.01% 4.14% 4.29% 4.34% 4.74%(4)
Ratio of net investment income to average net assets
prior to expense limitation ........................ 3.63% 3.73% 1.86% 1.86% 3.66%(4)
Portfolio turnover ................................... 25% 84% 39% 39% 35%
</TABLE>
- -------------------
(1) Ratios have been annualized and the total returns have not been annualized.
(2) Commencement of operations.
(3) 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.
(4) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
52 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
Delaware-Voyageur Tax-Free Arizona ("Tax-Free Arizona Fund") and
Delaware-Voyageur Tax-Free California Fund ("Tax-Free California Fund"), series
of Voyageur Mutual Funds, Inc., Delaware-Voyageur Tax-Free Arizona Insured Fund
("Tax-Free Arizona Insured Fund"), a series of Voyageur Insured Funds, Inc., and
Delaware-Voyageur Tax-Free Colorado Fund ("Tax-Free Colorado Fund"), a series of
Voyageur Mutual Funds II, Inc., are registered under the Investment Company Act
of 1940 (as amended) as open-end management investment companies. Tax-Free
Arizona Insured Fund and Tax-Free Colorado Fund are registered as diversified.
Tax-Free Arizona Fund and Tax-Free California Fund are registered as
non-diversified. Delaware-Voyageur Tax-Free California Insured Fund ("Tax-Free
California Insured Fund"), Delaware-Voyageur Tax-Free New Mexico Fund ("Tax-Free
New Mexico Fund"), and Delaware-Voyageur Tax-Free Utah Fund ("Tax-Free Utah
Fund"), series of Voyageur Investment Trust, are Massachusetts business trusts
registered under the Investment Company Act of 1940 (as amended) as open-end
management investment companies. Tax-Free New Mexico Fund and Tax-Free Utah Fund
are registered as diversified. Tax-Free California Insured Fund is registered as
non-diversified.
Tax-Free Arizona Fund, Tax-Free Arizona Insured Fund, Tax-Free California Fund,
Tax-Free California Insured Fund, Tax-Free Colorado Fund, Tax-Free New Mexico
Fund and Tax-Free Utah Fund, (referred to separately as "Fund" or collectively
as "Funds") seek a high level of current income free from both federal and state
income taxes by investing in investment grade municipal bonds. The Funds each
offer 3 classes of shares. The A class carries a front-end sales charge of
3.75%. The B class carries a back-end deferred sales charge. The C class carries
a level load deferred sales charge.
1. Fund Reorganization
On April 30, 1997, Lincoln National Corporation ("LNC") acquired Voyageur Fund
Managers, Inc.'s ("Voyageur") parent, Dougherty Financial Group, Inc. ("DFG")
pursuant to an agreement and plan of merger dated January 15, 1997, in which LNC
acquired DFG including the mutual fund investment advisory business of DFG
conducted by Voyageur. Upon completion of the acquisition, Delaware Management
Company ("DMC") became the investment adviser to the Funds, Delaware
Distributors, L.P. ("DDLP") became the distributor for the Funds, and Delaware
Service Company, Inc. ("DSC") became the transfer, dividend-disbursing,
shareholder servicing and accounting and administration service agent for the
Funds. DMC, DDLP and DSC assumed these services under substantially similar fee
structures that were in effect prior to the acquisition.
2. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Money market instruments having less than 60 days to maturity are
valued at amortized cost which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Funds' Board
of Directors.
<PAGE>
Federal Income Taxes - Each Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Funds on the basis of daily net assets of each class. Distribution expenses
relating to a specific class are charged directly to that class.
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 at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
Other - Expenses common to all funds within the Delaware Investments Family of
funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Interest income is recorded on the accrual basis. Original issue discounts and
market premiums are amortized to interest income over the lives of the
respective securities. The Funds declare dividends from net investment income
daily and pay them monthly. Capital gains, if any, are distributed annually.
3. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Funds
pay DMC, the Investment Manager of each Fund, an annual fee, which is calculated
daily on the net assets of each Fund.
DMC has elected to waive its fees and reimburse each Fund to the extent that
annual operating expenses exclusive of distribution expenses, taxes, interest,
brokerage commissions and extraordinary expenses, do not exceed the following
percentages of average daily net assets through June 30, 1999. The management
fee rates and waiver rates are as follows:
<PAGE>
for tax-exempt income 53
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
3. Investment Management and Other Transactions with Affiliates (Continued)
On February 28, 1999, the Fund had payables to affiliates as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
ARIZONA ARIZONA CALIFORNIA CALIFORNIA COLORADO NEW MEXICO UTAH
FUND INSURED FUND FUND INSURED FUND FUND FUND FUND
-------- ------------ ---------- ------------ -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Management fee as a percentage
of average daily net assets
(per annum) .............................. 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50%
Operating Expense Limitation as
a percentage of average daily
net assets (per annum) .................. 0.35% 0.70% 0.10% 0.75% 0.75% 0.75% 0.60%
</TABLE>
The Funds have engaged DSC, an affiliate of DMC, to provide dividend disbursing,
transfer agent and accounting and administration services. Each fund pays DSC a
monthly fee based on number of shareholder accounts, shareholder transactions
and average net assets, subject to certain minimums.
On February 28, 1999, the Funds had payables to affiliates as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
ARIZONA ARIZONA CALIFORNIA CALIFORNIA COLORADO NEW MEXICO UTAH
FUND INSURED FUND FUND INSURED FUND FUND FUND FUND
-------- ------------ ---------- ------------ -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment Management fees
payable to DMC ........................... $ -- $99,942 $ -- $11,214 $251,383 $13,020 $ --
Dividend disbursing, transfer
agent fees, accounting fees and
other expenses payable to DSC ............ 1,716 15,054 2,788 3,508 32,785 2,647 365
Other expenses payable to DMC and
affiliates ............................... 895 6,078 707 436 11,473 326 107
</TABLE>
Pursuant to the Distribution Agreement, the Funds pay DDLP, the Distributor and
an affiliate of DMC, an annual fee not to exceed 0.25% of the average daily net
assets of the A Class and 1.00% of the average daily net assets of the B and C
Classes for each Fund.
For the six months ended February 28, 1999, DDLP earned commissions on sales of
the Fund A Class shares for each Fund as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
ARIZONA ARIZONA CALIFORNIA CALIFORNIA COLORADO NEW MEXICO UTAH
FUND INSURED FUND FUND INSURED FUND FUND FUND FUND
-------- ------------ ---------- ------------ -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$7,799 $94,472 $9,818 $4,232 $41,993 $33,073 $368
</TABLE>
Certain officers of DMC, DSC and DDLP are officers, directors and/or employees
of the Funds. These officers, directors and employees are paid no compensation
by the Funds.
4. Investments
During the six months ended February 28, 1999, the Funds made purchases and
sales of investment securities other than U.S. government securities and
temporary cash investments for each Fund as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
ARIZONA ARIZONA CALIFORNIA CALIFORNIA COLORADO NEW MEXICO UTAH
FUND INSURED FUND FUND INSURED FUND FUND FUND FUND
----------- ------------ ----------- ------------ ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Purchases: ....................... $10,493,426 $33,351,478 $22,322,120 $12,946,512 $114,771,408 $4,621,215 $826,094
Sales: ........................... 5,327,249 37,312,531 12,154,857 12,742,137 102,362,198 2,157,850 978,926
</TABLE>
<PAGE>
54 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
At February 28, 1999, the aggregate cost of securities and unrealized
appreciation (depreciation) for federal income tax purposes for each Fund were
as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
ARIZONA ARIZONA CALIFORNIA CALIFORNIA COLORADO NEW MEXICO UTAH
FUND INSURED FUND FUND INSURED FUND FUND FUND FUND
----------- ------------ ----------- ------------ ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Cost of Investments .................. $22,800,547 $168,583,174 $33,869,049 $33,799,706 $350,827,638 $23,719,925 $3,019,210
=========== ============ =========== =========== ============ =========== ==========
Aggregate unrealized appreciation .... 666,220 13,721,516 605,598 2,146,492 26,754,128 1,591,819 184,961
Aggregate unrealized depreciation .... (32,630) (116,129) (91,558) (50,600) (427,989) (32,926) (1,325)
----------- ------------ ----------- ----------- ------------ ----------- ----------
Net unrealized appreciation .......... 633,590 13,605,387 514,040 2,146,892 26,326,139 1,558,893 183,636
=========== ============ =========== =========== ============ =========== ==========
</TABLE>
For federal income tax purposes the Funds had capital loss carryforwards of the
following amounts:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
ARIZONA ARIZONA CALIFORNIA CALIFORNIA COLORADO NEW MEXICO UTAH
FUND INSURED FUND FUND INSURED FUND FUND FUND FUND
----------- ------------ ----------- ------------ ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Expires in 2002 ...................... $0 $ 0 $0 $ 0 $ 0 $241,080 $ 0
Expires in 2003 ...................... 0 2,746,656 0 421,693 2,260,620 277,128 0
Expires in 2004 ...................... 0 0 0 0 832,567 22,469 3,293
-- ---------- -- -------- ---------- -------- ------
$0 $2,746,656 $0 $421,693 $3,093,187 $540,677 $3,293
== ========== == ======== ========== ======== ======
</TABLE>
5. Capital Stock
Transactions in capital of stock shares were as follows:
<TABLE>
<CAPTION>
TAX-FREE ARIZONA FUND TAX-FREE ARIZONA INSURED FUND
----------------------------------- ----------------------------------
SIX MONTHS EIGHT MONTHS YEAR SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97 2/28/99 8/31/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class ........................................ 430,289 204,834 158,751 523,869 489,440 778,637
B Class ........................................ 33,295 142,024 130,063 88,110 128,628 146,974
C Class ........................................ 14,663 25,868 27,479 65,938 9,588 23,129
Shares issued upon reinvestment of
dividends from net investment income
and net realized gains from investment
transactions:
A Class ........................................ 24,507 23,556 29,507 153,729 206,605 369,681
B Class ........................................ 7,466 7,389 8,686 4,922 5,160 7,217
C Class ........................................ 874 698 159 691 912 1,342
------- ------- ------- ------- --------- ---------
511,094 404,369 354,645 837,259 840,333 1,326,980
------- ------- ------- ------- --------- ---------
Shares repurchased:
A Class ........................................ (48,445) (121,649) (120,327) (866,256) (1,438,707) (3,811,075)
B Class ........................................ (14,224) (40,602) (132,059) (8,567) (38,808) (116,629)
C Class ........................................ (3,978) (33) -- -- (15,119) (15,711)
------- ------- ------- ------- --------- ---------
(66,647) (162,284) (252,386) (874,823) (1,492,634) (3,943,415)
------- ------- ------- ------- --------- ---------
Net Increase (Decrease) ........................... 444,447 242,085 102,259 (37,564) (652,301) (2,616,435)
======= ======= ======= ======= ========= =========
</TABLE>
<PAGE>
for tax-exempt income 55
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. Capital Stock (Continued)
<TABLE>
<CAPTION>
TAX-FREE CALIFORNIA FUND TAX-FREE CALIFORNIA INSURED FUND
----------------------------------- ----------------------------------
SIX MONTHS EIGHT MONTHS YEAR SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97 2/28/99 8/31/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class ......................................... 761,049 689,801 325,158 180,293 396,502 135,140
B Class ......................................... 285,770 309,443 443,601 96,745 39,549 62,442
C Class ......................................... 197,364 58,498 8,190 1,771 10,226 37,910
Shares issued upon reinvestment of
dividends from net investment income
and net realized gains from investment
transactions:
A Class ......................................... 27,105 11,126 7,845 21,551 30,176 56,507
B Class ......................................... 7,231 5,345 3,798 4,165 5,418 10,856
C Class ......................................... 1,797 615 611 149 223 355
--------- --------- ------- ------- ------- -------
1,280,316 1,074,828 789,203 304,674 482,094 303,210
--------- --------- ------- ------- ------- -------
Shares repurchased:
A Class ......................................... (44,201) (64,555) (52,777) (177,649) (310,834) (650,095)
B Class ......................................... (85,524) (21,844) (7,430) (44,040) (56,776) (109,515)
C Class ......................................... (8,729) -- (7,965) -- (12,424) --
--------- --------- ------- ------- ------- -------
(138,454) (86,399) (68,172) (221,689) (380,034) (759,610)
--------- --------- ------- ------- ------- -------
Net Increase (Decrease) ............................ 1,141,862 988,429 721,031 82,985 102,060 (456,400)
========= ========= ======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
TAX-FREE COLORADO FUND TAX-FREE NEW MEXICO FUND
----------------------------------- ----------------------------------
SIX MONTHS EIGHT MONTHS YEAR SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97 2/28/99 8/31/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class ......................................... 2,484,425 1,760,189 2,280,831 180,748 242,673 104,678
B Class ......................................... 216,540 247,293 326,460 47,061 59,162 28,562
C Class ......................................... 118,310 57,114 50,877 5,471 5,720 8,900
Shares issued upon reinvestment of
dividends from net investment income
and net realized gains from investment
transactions:
A Class ......................................... 485,580 653,195 1,164,027 23,566 30,674 49,974
B Class ......................................... 15,142 16,342 20,340 1,958 1,892 2,060
C Class ......................................... 3,678 3,944 6,297 705 756 1,159
--------- --------- --------- ------- ------- -------
3,323,675 2,738,077 3,848,832 259,509 340,877 195,333
--------- --------- --------- ------- ------- -------
Shares repurchased:
A Class ......................................... (2,212,117) (2,861,037) (5,214,040) (51,787) (107,432) (339,101)
B Class ......................................... (37,870) (17,487) (48,522) (10,124) (1) (9,814)
C Class ......................................... (11,974) (30,633) (49,216) (4,448) -- (13,780)
--------- --------- --------- ------- ------- -------
(2,261,961) (2,909,157) (5,311,778) (66,359) (107,433) (362,695)
--------- --------- --------- ------- ------- -------
Net Increase (Decrease) ............................ 1,061,714 (171,080) (1,462,946) 193,150 233,444 (167,362)
========= ========= ========= ======= ======= =======
</TABLE>
<PAGE>
56 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. Capital Stock (Continued)
TAX-FREE UTAH FUND
-----------------------------------
SIX MONTHS EIGHT MONTHS YEAR
ENDED ENDED ENDED
2/28/99 8/31/98 12/31/97
(UNAUDITED)
Shares sold:
A Class ............................... 7,805 10,066 18,541
B Class ............................... 175 2,835 12,225
C Class ............................... -- -- --
Shares issued upon reinvestment of
dividends from net investment income
and net realized gains from investment
transactions:
A Class ............................... 2,252 2,657 5,592
B Class ............................... 1,090 1,044 1,701
C Class ............................... -- -- --
------ ------ ------
11,322 16,602 38,059
------ ------ ------
Shares repurchased:
A Class ............................... (17,531) (52,281) (95,952)
B Class ............................... (25) -- (1,374)
C Class ............................... -- -- --
------ ------ ------
(17,556) (52,281) (97,326)
------ ------ ------
Net Increase (Decrease) .................. (6,234) (35,679) (59,267)
====== ====== ======
6. Lines of Credit
The Funds have committed lines of credit for the following amounts:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE TAX-FREE
ARIZONA ARIZONA CALIFORNIA CALIFORNIA COLORADO NEW MEXICO UTAH
FUND INSURED FUND FUND INSURED FUND FUND FUND FUND
-------- ------------ ---------- ------------ ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$800,000 $9,900,000 $500,000 $1,800,000 $18,500,000 $1,000,000 $200,000
</TABLE>
No amounts were outstanding at February 28, 1999, or at anytime during the
period.
7. Credit and Market Risk
The Funds concentrate their investments in securities mainly issued by each
specific state's municipalities. The value of these investments may be adversely
affected by new legislation within the state, regional or local economic
conditions, and differing levels of supply and demand for municipal bonds. Many
municipalities insure repayment for their obligations. Although bond insurance
reduces the risk of loss due to default by an issuer, such bonds remain subject
to the risk that market value may fluctuate for other reasons and there is no
assurance that the insurance company will meet its obligations. These securities
have been identified in the Statements of Net Assets.
<PAGE>
DELAWARE INVESTMENTS FAMILY OF FUNDS
FOR GROWTH OF CAPITAL
Aggressive Growth Fund
Trend Fund
DelCap Fund
Small Cap Value Fund
U.S. Growth Fund
Growth Stock Fund
Tax-Efficient Equity Fund
Social Awareness Fund
FOR TOTAL RETURN
Blue Chip Fund
Devon Fund
Growth and Income Fund
Decatur Equity Income Fund
REIT Fund
Delaware Balanced Fund
FOR INTERNATIONAL DIVERSIFICATION
Emerging Markets Fund
New Pacific Fund
Overseas Equity Fund
International Equity Fund
Global Equity Fund
Global Bond Fund
FOR CURRENT INCOME
Delchester Fund
High-Yield Opportunities Fund
Strategic Income Fund
Corporate Bond Fund
Extended Duration Bond Fund
U.S. Government Fund
US Government Securities Fund
Limited-Term Government Fund
FOR TAX-EXEMPT INCOME
National High Yield Municipal Bond Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
State Tax-Free Funds*
MONEY MARKET FUNDS
Delaware Cash Reserve
Tax-Free Money Fund
ASSET ALLOCATION FUNDS
Growth Portfolio
Balanced Portfolio
Income Portfolio
* Available for the following states: Arizona, California, Colorado, Florida,
Idaho, Iowa, Kansas, Minnesota, Missouri, North Dakota, New Jersey, New
Mexico, New York, Ohio, Oregon, Pennsylvania, Utah, Washington, Wisconsin.
Insured and intermediate bond funds are available in selected states.
funds
[photo of computer keyboard]
Complete information on any fund offered by Delaware Investments can be found in
each fund's current prospectus. Prospectuses for all funds offered by Delaware
Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.
<PAGE>
THIS SEMI-ANNUAL REPORT IS FOR THE INFORMATION OF TAX-FREE ARIZONA FUNDS,
TAX-FREE California Funds, Tax-Free Colorado Fund, Tax-Free New Mexico Fund, and
Tax-Free Utah Fund shareholders, but it may be used with prospective investors
when preceded or accompanied by a current Prospectus for any of these Funds and
the Delaware Investments Performance Update for the most recently completed
calendar quarter. The prospectus sets forth details about charges, expenses,
investment objectives, and operating policies of each Fund. You should read the
prospectus carefully before you invest or send money. The figures in this report
represent past results which are not a guarantee of future results. The return
and principal value of an investment in each Fund will fluctuate so that shares,
when redeemed, may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
INVESTMENT MANAGER
Delaware Management Company
Philadelphia, Pennsylvania
INTERNATIONAL AFFILIATE
Delaware International Advisers Ltd.
London, England
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia, Pennsylvania
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia, Pennsylvania
1818 Market Street
Philadelphia, PA 19103-3682
[photo of globes]
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawarefunds.com
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Funds are
not FDIC or NCUSIF insured, are not guaranteed by any bank or any credit union,
and involve investment risk, including the possible loss of the principal amount
invested. Shares of the Funds are not bank or credit union deposits.
(C) Delaware Distributors, L.P.
DELAWARE(SM)
INVESTMENTS
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Philadelphia o London
Printed in the USA
on recycled paper
SA-WEST [2/99] PP4/99
(1593)
