CALIFORNIA TAX FREE FUND
CALIFORNIA INSURED TAX FREE FUND
SEMI-ANNUAL REPORT
Dated June 30, 1995
Voyageur offers a family of mutual funds, each with an individual objective
stated in its prospectus. Investment objectives of the funds range from high
current income to long-term capital appreciation. Exchange privileges allow you
to change your investment between Voyageur Funds as your objectives or market
conditions change.
VOYAGEUR TAX FREE FUNDS seek high current income free from both Federal income
taxes and state income taxes (where applicable). The Funds invest in investment
grade municipal bonds.
Voyageur ARIZONA Tax Free Fund Voyageur KANSAS Tax Free Fund
Voyageur CALIFORNIA Tax Free Fund Voyageur MINNESOTA Tax Free Fund
Voyageur COLORADO Tax Free Fund Voyageur NEW MEXICO Tax Free Fund
Voyageur FLORIDA Tax Free Fund Voyageur NORTH DAKOTA Tax Free Fund
Voyageur IDAHO Tax Free Fund Voyageur UTAH Tax Free Fund
Voyageur IOWA Tax Free Fund Voyageur WISCONSIN Tax Free Fund
VOYAGEUR INSURED TAX FREE FUNDS seek high current income free from both Federal
income taxes and state income taxes (where applicable) with the added safety of
an insured portfolio. The Funds invest in insured municipal bonds.
<TABLE>
<S> <C>
Voyageur ARIZONA Insured Tax Free Fund Voyageur MISSOURI Insured Tax Free Fund
Voyageur CALIFORNIA Insured Tax Free Fund Voyageur NATIONAL Insured Tax Free Fund
Voyageur FLORIDA Insured Tax Free Fund Voyageur OREGON Insured Tax Free Fund
Voyageur MINNESOTA Insured Fund Voyageur WASHINGTON Insured Tax Free Fund
</TABLE>
VOYAGEUR LIMITED TERM FUNDS seek to preserve original investment principal while
providing income free from both Federal income taxes and state income taxes
(where applicable). The Funds invest in intermediate term investment grade
municipal bonds.
<TABLE>
<S> <C>
Voyageur FLORIDA Limited Term Tax Free Fund Voyageur MINNESOTA Limited Term Tax Free Fund
</TABLE>
VOYAGEUR EQUITY FUNDS seek long term capital appreciation by investing in common
stocks.
Voyageur AGGRESSIVE GROWTH Fund Voyageur INTERNATIONAL Equity Fund
Voyageur GROWTH Stock Fund
VOYAGEUR INCOME FUNDS seek high current income from investments issued,
guaranteed or otherwise backed by the full faith and credit of the U.S.
Government.
Voyageur U.S. GOVERNMENT SECURITIES Fund
VOYAGEUR CASH TRUST SERIES MONEY MARKET FUNDS seek high current income,
principal protection and liquidity by investing in money market instruments.
Voyageur CALIFORNIA MUNICIPAL CASH Series Voyageur MUNICIPAL CASH Series
Voyageur FLORIDA MUNICIPAL CASH Series Voyageur OHIO MUNICIPAL CASH Series
Voyageur GOVERNMENT CASH Series Voyageur PRIME CASH Series
Voyageur MINNESOTA MUNICIPAL CASH Series Voyageur TREASURY CASH Series
For more complete information regarding the investment objectives, fees and
expenses of the Funds, please obtain a prospectus from your Investment
Representative or from Voyageur, 90 South Seventh Street, Suite 4400,
Minneapolis, MN 55402-4115; (612) 376-7044 (local); 800-525-6584 (MKTG).
Dear Shareholder:
The municipal bond market's dramatic rebound in the first half of 1995 caused
many mutual funds to recover much of the ground they lost in last year's bear
market. This strong rally was evidenced by the Fund's performance. I am pleased
to present a considerably brighter picture of the municipal bond market and the
Fund's performance than was presented in my last letter to you.
The results below summarize the Fund's net asset value, dividends paid and total
net assets for the reporting period.
VOYAGEUR CALIFORNIA TAX FREE FUND
<TABLE>
<CAPTION>
NET ASSET NET ASSET TOTAL NET
VALUE VALUE DIVIDENDS ASSETS
BEGINNING END PAID PER END OF
PERIOD OF PERIOD OF PERIOD SHARE PERIOD (000'S)
<S> <C> <C> <C> <C>
Period ended June 30, 1995:
Class A Shares $10.00* $10.10 $0.18 $1,111
</TABLE>
* Net asset value at March 3, 1995 (commencement of operations)
<TABLE>
<CAPTION>
VOYAGEUR CALIFORNIA INSURED TAX FREE FUND
NET ASSET NET ASSET TOTAL NET
VALUE VALUE DIVIDENDS ASSETS
BEGINNING END PAID PER END OF
PERIOD OF PERIOD OF PERIOD SHARE PERIOD (000'S)
<S> <C> <C> <C> <C>
Period ended June 30, 1995:
Class A Shares $9.33 $10.11 $0.29 $32,678
Class B Shares 9.33 10.11 0.27 4,399
Class C Shares 10.19* 10.11 0.09 367
* Net asset value at April 12, 1995 (commencement of operations)
In the pages that follow, the Fund's Manager will update you on how the economy
and the municipal bond market affected the Fund during this reporting period.
The manager will discuss the Fund's performance and some strategies used to
maximize performance.
We assert that a long-range view of investing provides the greatest benefit to
our shareholders. We encourage you to maintain a long-range view of investing;
we believe that you will derive the greatest benefit by doing so.
Thank-you for investing with Voyageur.
Sincerely,
John G. Taft
President
Voyageur California Tax Free Fund
Voyageur California Insured Tax Free Fund
DISCUSSION OF FUND MANAGEMENT BY ANDREW M. MCCULLAGH, JR., PORTFOLIO MANAGER
Mr. McCullagh is Senior Vice President and Tax Exempt Portfolio Manager for the
Voyageur California Insured Tax Free Fund and the Voyageur California Tax Free
Fund. He has over 22 years experience in municipal bond trading, underwriting,
and portfolio management.
At the state level, the California market has continued to experience higher
volatility in relation to the rest of the market due to the Orange County
derivative situation that came to light last year. While prices have rebounded
since the debacle, they have not fully recovered to their original levels.
Meanwhile, the county continues to work on the problems that persist. The Orange
County situation and general uncertainty of the state economy has heightened
investors' awareness of defaults and shifted some investors' preferences toward
insured municipal bond funds.
THE VOYAGEUR CALIFORNIA INSURED TAX FREE FUND
The Fund's total investment return on Class A shares at the end of the reporting
period was 11.39%. The Fund outperformed its benchmark, Lehman Brothers Long
Insured Municipal Bond Index, which had a total return of 10.19%. Moreover, the
Fund ranked seventh among its 22 fund competitors in its Lipper objective of
California insured municipal debt funds for one year, 6/30/94 through 6/30/95.
(Note: This Lipper Analytical Services ranking and the total return information
that follow represent past performance which is no guarantee of future results.
Shares may be worth more or less than their original cost. The total return
based on net asset value for the Fund's A-shares was 8.28% at one year and 6.36%
since inception.)
The stellar performance of the Fund was attributed to three factors. First, we
maintained a long duration of 9.8 years and a long average maturity of 22.4
during the first quarter. As interest rates fell, the bonds with longer
maturities appreciated more quickly than shorter duration bonds. Therefore, the
Fund was able to capture the strong broader market performance. Second, the
strategy of investing only in high quality insured paper, thus avoiding
difficult state credit situations, proved successful. Finally, we shortened the
duration of the Fund during the second quarter when we perceived that tax reform
discussion could limit further relative price improvements. The Fund's
relatively shorter duration and average maturities positioned the Fund somewhat
more defensively, thus limiting the price volatility.
THE VOYAGEUR CALIFORNIA TAX FREE FUND
The Voyageur California Tax Free Fund commenced in March 1995. The Fund's
investment return on Class A Shares was 2.78% for the reporting period. The
reporting period reflects approximately three months of investment performance
activity.
The Fund's holdings at the end of the reporting period contained more than 70%
of the highest rated categories of municipal bonds by Standard & Poor's
Corporation and/or Moody's Investors Service (AAA/Aaa, AA/Aa, and A/A). The
Voyageur California Tax Free Fund is a quality fund which seeks to purchase
bonds of high quality in those sectors that provide incremental income over
insured bonds. We continue to emphasize high quality bonds and will not
sacrifice credit quality to seek higher income.
</TABLE>
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 1995
VOYAGEUR VOYAGEUR
CALIFORNIA CALIFORNIA
TAX FREE INSURED
FUND TAX FREE FUND
<S> <C> <C>
ASSETS
Investments in securities, (note 1) (identified cost: $1,121,285
and $37,514,050, respectively) .............................. $ 1,125,289 $ 37,799,067
Cash in bank on demand deposit ................................. -- 293,761
Accrued interest receivable .................................... 18,329 590,208
Receivable for Fund shares sold ................................ -- 39,997
Total assets ................................................ 1,143,618 38,723,033
LIABILITIES
Disbursements in excess of cash in bank on demand deposit ...... 16,026 --
Dividends payable to shareholders .............................. 1,125 42,471
Payable for investment securities purchased .................... -- 970,328
Payable for Fund shares redeemed ............................... -- 210,010
Other accrued expenses ......................................... 15,618 56,185
Total liabilities ........................................... 32,769 1,278,994
NET ASSETS APPLICABLE TO OUTSTANDING SHARES .................... $ 1,110,849 $ 37,444,039
Represented by:
Capital stock - $.01 par value (note 1) ..................... $ 1,100 --
Additional paid-in capital (note 1) ......................... 1,103,723 $ 38,508,157
Distributions in excess of net investment income ............ (173) (8,623)
Accumulated net realized gain (loss) on investments (note 1). 2,195 (1,340,512)
Unrealized appreciation of investments ...................... 4,004 285,017
TOTAL NET ASSETS .......................................... $ 1,110,849 $ 37,444,039
Net assets applicable to outstanding Class A Shares ............ $ 1,110,849 $ 32,677,601
Net assets applicable to outstanding Class B Shares ............ N/A $ 4,398,947
Net assets applicable to outstanding Class C Shares ............ N/A $ 367,491
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE
Class A - Shares outstanding:
110,028 and 3,232,882, respectively (note 4) .............. $ 10.10 $ 10.11
Class B - Shares outstanding:
N/A and 435,173, respectively (note 4) .................... N/A $ 10.11
Class C - Shares outstanding:
N/A and 36,364, respectively (note 4) ..................... N/A $ 10.11
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF OPERATIONS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 1995
VOYAGEUR VOYAGEUR
CALIFORNIA CALIFORNIA
TAX FREE INSURED
FUND* TAX FREE FUND
<S> <C> <C>
Investment income:
Interest ........................................................... $ 19,128 $ 1,055,525
Expenses (note 3):
Investment advisory and management fee ............................. 1,606 87,478
Dividend-disbursing, administrative and accounting services fees ... 10,273 29,513
Printing, postage and supplies ..................................... 600 4,232
Audit and accounting fees .......................................... 2,100 3,763
Legal fees ......................................................... 2,025 1,990
Distribution fees - Class A ........................................ 803 39,131
Distribution fees - Class B ........................................ N/A 18,285
Distribution fees - Class C ........................................ N/A 344
Directors' fees .................................................... 125 331
Registration fees .................................................. 3,000 1,418
Custodian fees ..................................................... 192 5,391
Other .............................................................. 957 606
Total expenses ................................................... 21,681 192,482
Less: Expenses waived, absorbed or reduced ............................ (20,000) (62,069)
Total net expenses ................................................. 1,681 130,413
Investment income - net .......................................... 17,447 925,112
Realized and unrealized gain (loss) on investments (note 2):
Realized gain (loss) on security transactions ...................... 2,195 (1,018,000)
Net change in unrealized appreciation or depreciation of investments 4,004 3,690,050
Net gain on investments .......................................... 6,199 2,672,050
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................. $ 23,646 $ 3,597,162
</TABLE>
* Period from March 3, 1995 (commencement of operations) to June 30, 1995.
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
VOYAGEUR CALIFORNIA VOYAGEUR CALIFORNIA
TAX FREE FUND INSURED TAX FREE FUND
PERIOD FROM SIX MONTHS TWO MONTHS
MARCH 3, 1995* ENDED ENDED
TO JUNE 30, 1995 JUNE 30, 1995 DECEMBER 31,
Operations: (UNAUDITED) (UNAUDITED) 1994 (NOTE 1)
<S> <C> <C> <C>
Investment income - net ...................................... $ 17,447 $ 925,112 $ 296,783
Realized gain (loss) on investments - net .................... 2,195 (1,018,000) (322,512)
Net change in unrealized appreciation or
depreciation of investments ................................. 4,004 3,690,050 (234,318)
Net increase (decrease) in net assets
resulting from operations ................................. 23,646 3,597,162 (260,047)
Distributions to shareholders from:
Investment income - net:
Class A .................................................... (17,447) (900,222) (256,547)
Class B .................................................... N/A (90,528) (13,896)
Class C .................................................... N/A (1,259) N/A
Distributions in excess of net investment income:
Class A .................................................... (173) (5,930) --
Class B .................................................... N/A (2,635) --
Class C .................................................... N/A (58) N/A
Net realized gain on investments:
Class A .................................................... -- -- (15,454)
Class B .................................................... N/A -- (1,005)
Total distributions .......................................... (17,620) (1,000,632) (286,902)
Share transactions (note 4):
Proceeds from sale of shares:
Class A (note 3) ........................................... 1,978,244 4,894,451 3,083,933
Class B .................................................... N/A 1,954,130 815,667
Class C .................................................... N/A 390,007 N/A
Net asset value of shares issued in reinvestment of net
investment income distributions, distributions in excess of
net investment income and realized gain distributions:
Class A ................................................ 16,303 387,134 50,616
Class B ................................................ N/A 41,829 2,614
Class C ................................................ N/A 516 N/A
Payments for redemption of shares:
Class A (note 3) ........................................... (889,724) (2,980,370) (1,900,798)
Class B (note 3) ........................................... N/A (34,862) (379)
Class C .................................................... N/A (18,878) N/A
Increase in net assets from share transactions ............... 1,104,823 4,633,957 2,051,653
Total increase in net assets ............................... 1,110,849 7,230,487 1,504,704
Net assets at beginning of period ............................... -- 30,213,552 28,708,848
Net assets at end of period (including distributions in excess of
net investment income of $173 and $8,623; and undistributed
net investment income of $66,897, respectively) ............ $ 1,110,849 $ 37,444,039 $ 30,213,552
</TABLE>
* Commencement of operations.
See accompanying notes to financial statements.
THE VOYAGEUR FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Voyageur California Tax Free Fund (California Tax Free Fund) is one of a
series of funds within Voyageur Mutual Funds, Inc. which is registered under the
Investment Company Act of 1940 (as amended) as an open-end management investment
company with 100 billion shares of authorized capital stock that may be issued.
Voyageur California Insured Tax Free Fund (California Insured Tax Free Fund) is
one of a series of funds within the Voyageur Investment Trust, a Massachusetts
business trust registered under the Investment Company Act of 1940 (as amended)
as an open-end management investment company with an unlimited number of
authorized shares of beneficial interest. California Tax Free Fund is registered
as a non-diversified fund and California Insured Tax Free Fund is registered as
a diversified fund. California Tax Free Fund and California Insured Tax Free
Fund (the Funds) offer Class A, Class B and Class C Shares. Class A Shares are
sold with a front-end sales charge. Class B shares may be subject to a
contingent deferred sales charge and such shares automatically convert to Class
A after eight years. Class C Shares, first offered by the Funds on March 1,
1995, are not subject to a contingent deferred sales charge or a front-end sales
charge and have no conversion feature. As of June 30, 1995, California Tax Free
Fund had no Class B or Class C Shares outstanding. All classes of shares have
identical voting, dividend, liquidation and other rights and the same terms and
conditions, except that the level of distribution fees charged differs between
classes. Income, expenses (other than expenses incurred under each class'
Distribution Agreement) and realized and unrealized gains or losses on
investments are allocated to each class of shares based upon its relative net
assets. Effective December 31, 1994, California Insured Tax Free Fund changed
its fiscal year end from October 31 to December 31.
The significant accounting policies followed by the Fund are summarized as
follows:
Investments in Securities
Securities are valued at fair value as determined by the Board of Directors.
Determination of fair value involves, among other things, using pricing services
or prices quoted by independent brokers. Short-term securities are valued at
amortized cost which approximates market value.
Security transactions are accounted for on the trade date. Securities gains
and losses are calculated on the identified-cost basis. Interest income,
including level-yield amortization of premium and original issue discount, is
accrued daily.
Each Fund concentrates its investments in a single state and therefore, may
have more credit risk related to the economic conditions of the state of
California than a portfolio with broader geographical diversification.
Securities Purchased on a When-Issued Basis
Delivery and payment for securities which have been purchased by each Fund on
a forward commitment or when-issued basis can take place up to a month or more
after the transaction date. During this period, such securities are subject to
market fluctuations and the portfolio maintains, in a segregated account with
its custodian, assets with a market value equal to or greater than the amount of
its purchase commitments.
Federal Taxes
Each Fund's policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute its income
to shareholders in amounts that will avoid or minimize federal income or excise
taxes for each Fund. For federal income tax purposes, at December 31, 1994
California Insured Tax Free Fund had a capital loss carryover of $322,512 that
will expire in 2003 if not offset by subsequent capital gains. It is unlikely
that the Board of Trustees will authorize a distribution of any net realized
capital gains until the available capital loss carryover has been offset or
expires.
Distributions to Shareholders
Dividends declared daily from net investment income are payable monthly in
cash or reinvested in additional shares of each Fund. Net short-term realized
capital gains, if any, may be distributed throughout the year and net long-term
realized capital gains, when available, are distributed annually.
(2) INVESTMENT SECURITIES TRANSACTIONS
Purchase cost and proceeds of sales of investment securities other than
short-term securities aggregated $1,315,297 and $196,207 for California Tax Free
Fund and $30,367,613 and $23,796,256 for the California Insured Tax Free Fund
during the period ended June 30, 1995.
(3) EXPENSES
Each Fund has an investment advisory and management fee agreement with
Voyageur Fund Managers, Inc. (Voyageur) under which Voyageur manages each Fund's
assets and provides other specified services. The fee for investment management
and advisory services is payable monthly and is based on the average daily net
assets of each Fund at the annual rate of .50%. In addition, each Fund will pay
most other operating expenses including directors' fees, registration fees,
printing of shareholder reports, legal and auditing services and other
miscellaneous expenses. There was no portfolio insurance expense for the
California Insured Tax Free Fund. Portfolio insurance expense, if any, is
recognized over the premium period. Voyageur is obligated to pay all expenses of
each Fund (excluding distribution fees, insurance premiums on portfolio
securities, taxes, interest and brokerage commissions) which exceed 1% of
average daily net assets, on an annual basis. During the period ended June 30,
1995 Voyageur absorbed $17,636 pursuant to the contractual 1% expense limitation
for California Tax Free Fund and, excluding waiver of distribution fees and
expense reductions, voluntarily absorbed fees and expenses of $2,364 for
California Tax Free Fund and $30,000 for the California Insured Tax Free Fund.
Each Fund will also pay a fee to Voyageur for acting as the Funds
dividend-disbursing, administrative and accounting services agent. The fee is
paid monthly and is equal to the sum of $1.33 per shareholder account per month,
a fixed monthly fee ranging from $1,000 to $1,500 based on the level of each
Fund's average daily net assets and an annualized percentage of average daily
net assets at reducing rates from .11% to .02%. Each Fund is also responsible
for reimbursing Voyageur's out-of-pocket expense in connection with the
performance of dividend-disbursing, administrative and accounting services.
All classes of shares have a Distribution Agreement under Rule 12b-1 of the
Investment Company Act of 1940 with Voyageur Fund Distributors, Inc. (Fund
Distributors). Under this plan each Fund is obligated to pay Fund Distributors a
monthly distribution fee at an annual rate of .25% of each Fund's average daily
net assets of the Class A Shares and 1.00% of each Fund's average daily net
assets of the Class B and Class C Shares. Fund Distributors may waive all or
part of its distribution fee at its sole discretion. During the period ended
June 30, 1995 Fund Distributors voluntarily waived Class A distribution fees of
$19,188 and Class B distribution fees of $7,490 for California Insured Tax Free
Fund. During the six months ended June 30, 1995, California Insured Tax Free
Fund earned $16,172 in credits on uninvested cash balances held at the
custodian. Of these credits $5,391 were used to reduce certain fees for various
custodial, pricing and accounting services provided by the custodian bank. The
remaining $10,781 in credits are included in interest income.
Sales charges paid by Class A shareholders for the period ended June 30, 1995
were $1,906 for California Tax Free Fund and $138,131 for California Insured Tax
Free Fund. Of these amounts, Fund Distributors received $306 from California Tax
Free Fund and $17,539 from California Insured Tax Free Fund. Contingent deferred
sales charges paid by Class A and Class B shareholders for California Insured
Tax Free Fund were $200 and $947, respectively.
(4) SHARE TRANSACTIONS
Transactions in shares during each period were as follows:
<TABLE>
<CAPTION>
CALIFORNIA TAX FREE FUND
CLASS A
PERIOD FROM
MARCH 3, 1995*
TO JUNE 30, 1995
(UNAUDITED)
<S> <C>
Shares sold............................. 196,451
Shares issued for reinvested
distributions...................... 1,594
Shares redeemed......................... (88,017)
Increase in shares outstanding.......... 110,028
</TABLE>
<TABLE>
<CAPTION>
CALIFORNIA INSURED TAX FREE FUND
CLASS A CLASS B CLASS C
SIX MONTHS TWO MONTHS SIX MONTHS TWO MONTHS PERIOD FROM
ENDED ENDED ENDED ENDED APRIL 12, 1995*
JUNE 30, 1995 DECEMBER 31 JUNE 30, 1995 DECEMBER 31, TO JUNE 30, 1995
(UNAUDITED) 1994 (UNAUDITED) 1994 (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Shares sold.................... 491,059 333,061 196,521 87,607 38,163
Shares issued for reinvested
distributions............... 38,970 5,545 4,180 287 50
Shares redeemed................ (297,568) (206,469) (3,413) (42) (1,849)
Increase in shares outstanding. 232,461 132,137 197,288 87,852 36,364
</TABLE>
* Commencement of operations.
(5) FINANCIAL HIGHLIGHTS
Per share data (rounded to the nearest cent) for a share of capital stock
outstanding and selected information for each period are as follows:
<TABLE>
<CAPTION>
CALIFORNIA TAX FREE FUND
CLASS A
PERIOD FROM
MARCH 3, 1995(d)
TO JUNE 30, 1995
(UNAUDITED)
<S> <C>
Net asset value:
Beginning of period ................................ $10.00
Operations:
Net investment income .............................. .18
Net realized and unrealized
gain on investments .............................. .10
Total from operations .......................... .28
Distributions to shareholders:
From net investment income ......................... (.18)
Net asset value:
End of period ...................................... $10.10
Total investment return (b) ........................... 2.78%
Net assets at end of period (000's omitted) ........... $1,111
Ratios:
Ratio of expenses to
average daily net assets ......................... .52%(e)
Ratio of net investment income
to average daily net assets ...................... 5.38%(e)
Assuming no voluntary waivers and reimbursements
and reductions:
Expenses (c) ............................... 1.25%(e)
Net investment income ...................... 4.65%(e)
Portfolio turnover rate (excluding
short-term securities) ............................. 18.44%
</TABLE>
See accompanying notes to Financial Highlights.
Per share data (rounded to the nearest cent) for a share of beneficial
interest outstanding and selected information for each period are as follows:
<TABLE>
<CAPTION>
CALIFORNIA INSURED TAX FREE FUND
CLASS A
SIX MONTHS TWO MONTHS PERIOD FROM
ENDED ENDED OCTOBER 15, 1992(d)
JUNE 30, 1995 DECEMBER 31, YEAR ENDED OCTOBER 31, TO OCTOBER 31,
(UNAUDITED) 1994 1994 1993 1992
Net asset value:
<S> <C> <C> <C> <C> <C>
Beginning of period .................. $ 9.33 $ 9.51 $ 11.08 $ 10.02 $ 10.00
Operations:
Net investment income ................ .27 .10 .55 .60 --
Net realized and unrealized
gain (loss) on investments ........ .80 (.18) (1.52) 1.11 .02
Total from operations ........... 1.07 (.08) (.97) 1.71 .02
Distributions to shareholders:
From net investment income ........... (.29) (.09)(a) (.54)(a) (.60)(a) --
From net realized gains .............. -- (.01) (.06) (.05) --
Total distributions ............... (.29) (.10) (.60) (.65) --
Net asset value:
End of period ........................ $ 10.11 $ 9.33 $ 9.51 $ 11.08 $ 10.02
Total investment return (b) ............ 11.39% (.84)% (8.97)% 17.29% .20%
Net assets at end of period
(000's omitted) ...................... $32,678 $27,994 $27,282 $12,509 $2,056
Ratios:
Ratio of expenses to
average daily net assets .......... .70%(e) .10%(e) .20%(c) --% --%
Ratio of net investment income
to average daily net assets ....... 5.34%(e) 6.30%(e) 5.37% 5.26% --%
Assuming no voluntary waivers and
reimbursements and reductions:
Expenses (c) ................ 1.02%(e) 1.24%(e) 1.25% 1.25% --%
Net investment income ....... 5.02%(e) 5.16%(e) 4.32% 4.01% --%
Portfolio turnover rate (excluding
short-term securities) ................ 69.29% 7.28% 18.34% 24.19% 7.31%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
CALIFORNIA INSURED TAX FREE FUND
CLASS B CLASS C
SIX MONTHS TWO MONTHS PERIOD FROM PERIOD FROM
ENDED ENDED MARCH 1, 1994(d) APRIL 12, 1995(d)
JUNE 30, 1995 DECEMBER 31, TO OCTOBER 31, TO JUNE 30, 1995
(UNAUDITED) 1994 1994 (UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value:
Beginning of period .................. $ 9.33 $ 9.51 $10.68 $10.19
Operations:
Net investment income ................ .25 .08 .31 .09
Net realized and unrealized
gain (loss) on investments ........ .80 (.17) (1.16) (.08)
Total from operations ........... 1.05 (.09) (.85) .01
Distributions to shareholders:
From net investment income ........... (.26) (.08)(a) (.30)(a) (.09)
From distributions in excess of
net investment income ............. (.01) -- -- --
From net realized gains .............. -- (.01) (.02) --
Total distributions ............... (.27) (.09) (.32) (.09)
Net asset value:
End of period ........................ $10.11 $ 9.33 $ 9.51 $10.11
Total investment return (b) ............ 11.13% (.92)% (7.93)% .04%
Net assets at end of period
(000's omitted) ...................... $4,399 $2,219 $1,427 $ 367
Ratios:
Ratio of expenses to
average daily net assets .......... 1.15%(e) .57%(e) .73%(e)(c) 1.44%(e)
Ratio of net investment income
to average daily net assets ....... 4.78%(e) 5.54%(e) 4.82%(e) 3.66%(e)
Assuming no voluntary waivers and
reimbursements and reductions:
Expenses (c) ................ 1.76%(e) 1.94%(e) 1.95%(e) 1.67%(e)
Net investment income ....... 4.17%(e) 4.17%(e) 3.60%(e) 3.43%(e)
Portfolio turnover rate (excluding
short-term securities) ................ 69.29% 7.28% 18.34% 69.29%
</TABLE>
See accompanying notes to Financial Highlights.
NOTES TO FINANCIAL HIGHLIGHTS
(a) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax. For the year ended October 31, 1993, $.01 per share of the
distributions from net investment income were subject to state income tax.
(b) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(c) Voyageur and Fund Distributors voluntarily waived or reimbursed expenses
during several periods presented. The annual contractual expense limit for
the Funds (excluding distribution fees, insurance premiums on portfolio
securities, taxes, interest and brokerage commissions) is 1% of average
daily net assets. The maximum distribution fee is .25% of each Fund's
average daily net assets for Class A Shares and 1.00% of each Fund's
average daily net assets for Class B and Class C Shares. In addition to fee
waivers and expense reimbursements, fund operating expenses were further
reduced by earnings from uninvested cash balances held by the custodian for
California Insured Tax Free Fund.
(d) Commencement of operations.
(e) Adjusted to an annual basis.
<TABLE>
<CAPTION>
VOYAGEUR CALIFORNIA TAX FREE FUND
INVESTMENTS IN SECURITIES (UNAUDITED) JUNE 30, 1995
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
CALIFORNIA MUNICIPAL BONDS (101.3%):
GENERAL OBLIGATION (4.3%):
<S> <C> <C> <C> <C>
$50 California State....................................................... 6.00 05-01-18 48,368
UTILITIES (17.3%):
50 Los Angeles Water Department........................................... 5.80 04-15-24 46,257
50 Riverside Water Revenue................................................ 6.00 10-01-15 49,247
50 San Diego IDR Gas & Electricity........................................ 5.90 06-01-18 48,057
50 Southern California Public Power Authority............................. 6.00 07-01-18 48,074
191,635
TRANSPORTATION (12.6%):
100 Foothills Eastern Transportation Toll Road Revenue (AMBAC Insured)..... 6.00 01-01-34 89,875
50 Santa Clara Transportation............................................. 6.25 06-01-21 50,015
139,890
HEALTH CARE (17.8%):
100 Berkeley Alta Bates Healthcare......................................... 6.55 12-01-22 96,303
50 California Health Facilities Revenue Centinela Hospital (MBIA Insured). 6.25 09-01-15 50,612
50 California Health Facilities Revenue Presbyterian (MBIA Insured)....... 6.75 06-01-15 50,660
197,575
EDUCATION (9.3%):
50 Los Alamitos Series 90-1............................................... 6.25 08-15-23 47,710
50 Tular Earlimart Elementary (AMBAC Insured)............................. 6.70 08-01-21 55,359
103,069
CERTIFICATE OF PARTICIPATION (31.3%):
50 Alameda City Hall Redevelopment........................................ 6.20 05-01-25 48,157
50 California State Public Works.......................................... 6.38 10-01-19 49,350
50 Los Angeles County Redevelopment....................................... 6.50 03-01-23 49,867
100 San Jose Convention Center Finance Authority Revenue................... 6.38 09-01-13 100,417
100 Santa Monica Parking Lease Revenue..................................... 6.38 07-01-16 100,134
347,925
OTHER REVENUE (8.7%):
100 Carson Redevelopment Revenue........................................... 6.38 10-01-16 96,827
TOTAL INVESTMENTS IN SECURITIES (cost: $1,121,285) (c) $1,125,289
</TABLE>
See accompanying notes to investments in securities.
<TABLE>
<CAPTION>
VOYAGEUR CALIFORNIA INSURED TAX FREE FUND
INVESTMENTS IN SECURITIES (UNAUDITED) JUNE 30, 1995
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
CALIFORNIA MUNICIPAL BONDS (101.0%):
GENERAL OBLIGATION (7.5%):
<S> <C> <C> <C> <C>
$1,000 Fairfield Public Finance Authority Revenue G.O. (FGIC Insured)......... 6.25% 07-01-14 $ 1,017,510
1,755 San Francisco City & County (FGIC Insured)............................. 6.20 06-15-11 1,792,083
2,809,593
UTILITIES (9.6%):
1,150 Contra Costa Water District Revenue (MBIA Insured)..................... 5.75 10-01-14 1,122,067
1,000 Los Angeles Department Water and Power (FGIC Insured).................. 5.75 09-01-22 980,700
1,465 Sacramento Electric Revenue Series B (MBIA Insured).................... 6.38 08-15-22 1,496,922
3,599,689
TRANSPORTATION (7.5%):
1,500 Los Angeles Airport Revenue (FGIC Insured)............................. 5.50 05-15-10 1,443,915
1,430 San Francisco Bay Area Rapid Transit Sales Tax Revenue (FGIC Insured).. 5.50 07-01-15 1,350,549
2,794,464
HEALTH CARE (8.5%):
1,200 California Health Facilities Centinela Hospital (MBIA Insured)......... 6.25 09-01-15 1,214,712
1,000 California Health Facilities Revenue - San Diego Hospital
(MBIA Insured)....................................................... 6.20 08-01-12 1,012,250
1,000 California State Health Catholic (AMBAC Insured)....................... 5.75 07-01-15 967,720
3,194,682
HOUSING (7.9%):
1,000 California Housing Finance Agency 1994 Series E (MBIA Insured)......... 6.75 08-01-26 1,018,260
2,000 California Housing Finance Agency Home Mortgage Revenue Series F
(MBIA Insured)....................................................... 6.00 05-15-95 1,933,500
2,951,760
EDUCATION (9.5%):
1,000 California State University Auxiliary Revenue (MBIA Insured)........... 6.25 08-01-20 1,012,690
1,500 California State University Revenue (FGIC Insured)..................... 6.00 11-01-10 1,512,480
1,000 University of California Board of Regents (MBIA Insured)............... 6.38 09-01-24 1,019,600
3,544,770
CERTIFICATES OF PARTICIPATION (34.5%):
1,500 Alameda County Revenue (MBIA Insured).................................. 5.38 06-01-09 1,449,345
1,000 Castaic Lake Water Agency Certificate of Participation Revenue
(MBIA Insured)....................................................... 6.00 08-01-18 988,870
1,000 Ontario Redevelopment Cimarron Project (MBIA Insured).................. 6.25 08-01-15 1,011,700
1,625 Paradise Butte County USD Certificate of Participation (AMBAC Insured). 5.40 09-01-09 1,565,736
2,000 San Francisco Courthouse Certificate of Participation Revenue
(CGIC Insured)....................................................... 5.60 04-01-16 1,895,380
1,000 San Jose Convention Center (CGIC Insured).............................. 6.38 09-01-13 1,026,850
1,250 San Luis Obispo Capital Revenue (AMBAC Insured)........................ 6.38 06-01-14 1,290,613
1,000 Santa Barbara Water Revenue Certificate of Participation
(AMBAC Insured)...................................................... 6.70 04-01-27 1,048,340
1,000 Santa Clara Finance Authority (AMBAC Insured).......................... 7.75 11-15-11 1,208,920
1,500 Solano County Certificate of Participation Park Hospital (FSA Insured). 5.75 08-01-14 1,447,275
12,933,029
OTHER REVENUE (16.0%):
1,000 Indian Wells Redevelopment Revenue (MBIA Insured)...................... 6.00 12-01-14 993,030
1,000 Los Angeles County Transportation Sales Tax (MBIA Insured)............. 6.25 07-01-13 1,013,070
1,000 Rancho Water District Finance Revenue (FGIC Insured)................... 5.90(d) 11-01-15 990,560
1,000 San Francisco City and County Redevelopment Agency Hotel Tax Revenue
(CGIC Insured)...................................................... 6.75 07-01-25 1,061,350
1,000 Santa Clara North Bayshore (AMBAC Insured)............................. 5.75 07-01-14 975,970
1,000 University of California Multi Purpose (AMBAC Insured)................. 5.20 09-01-10 937,100
5,971,080
TOTAL INVESTMENTS IN SECURITIES (cost: $37,514,050) (c) $37,799,067
</TABLE>
See accompanying notes to investments in securities.
NOTES TO INVESTMENTS IN SECURITIES
(a) Securities are valued by procedures described in note 1 to the financial
statements.
(b) Investments in bonds, by rating category as a percentage of total bonds,
are as follows:
<TABLE>
<CAPTION>
Aaa/AAA Aa/AA A/A Baa/BBB Total
<S> <C> <C> <C> <C> <C>
California Tax Free Fund............... 10% 13% 48% 29% 100%
California Insured Tax Free Fund....... 100% -- -- -- 100%
</TABLE>
(c) Also represents the cost of securities for federal income tax purposes and
the aggregate gross unrealized appreciation and depreciation of securities
based on this cost were as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Unrealized Unrealized Unrealized
Appreciation Depreciation Appreciation
<S> <C> <C> <C>
California Tax Free Fund............... $ 7,675 $ (3,671) $ 4,004
California Insured Tax Free Fund....... 586,333 (301,316) 285,017
</TABLE>
(d) Represents security purchased on a when-issued basis. The cost of this
security was $970,000 as of the purchase date.
INVESTMENT ADVISER, TRANSFER AGENT,
DIVIDEND DISBURSING AGENT AND
ACCOUNTING SERVICES AGENT
Voyageur Fund Managers, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
UNDERWRITER
Voyageur Fund Distributors, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
CUSTODIAN
Norwest Bank Minnesota, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
GENERAL COUNSEL
Dorsey & Whitney P.L.L.P.
Minneapolis, Minnesota 55402
AUDITORS
KPMG Peat Marwick LLP
Minneapolis, Minnesota 55402
VOYAGEUR
CALIFORNIA TAX FREE FUND
CALIFORNIA INSURED TAX FREE FUND
SEMI-ANNUAL REPORT
Dated June 30, 1995
INVESTMENT ADVISER, TRANSFER AGENT,
DIVIDEND DISBURSING AGENT AND
ACCOUNTING SERVICES AGENT
Voyageur Fund Managers, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
UNDERWRITER
Voyageur Fund Distributors, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402
CUSTODIAN
Norwest Bank Minnesota, N.A.
Sixth Street & Marquette Avenue
Minneapolis, Minnesota 55479
GENERAL COUNSEL
Dorsey & Whitney P.L.L.P.
Minneapolis, Minnesota 55402
AUDITORS
KPMG Peat Marwick LLP
Minneapolis, Minnesota 55402
BULK RATE
U.S. Postage
PAID
Minneapolis, MN.
Permit #3322
VOYAGEUR
90 SOUTH SEVENTH STREET, SUITE 4400
MINNEAPOLIS, MINNESOTA 55402.4115
