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VOYAGEUR
YOUR TAX SENSITIVE INVESTMENT MANAGER
FLORIDA TAX FREE FUND
FLORIDA INSURED TAX FREE FUND
FLORIDA LIMITED TERM TAX FREE FUND
SEMI-ANNUAL REPORT
DATED JUNE 30, 1996
Voyageur offers a family of mutual funds, each with an individual objective
stated in its prospectus. Investment objectives of the funds range from high
current income to long-term capital appreciation. Exchange privileges allow you
to change your investment between Voyageur Funds as your objectives or market
conditions change.
VOYAGEUR HIGH YIELD FUNDS seek high current income free from both Federal income
taxes and state income taxes (where applicable). The Funds invest in medium and
lower grade municipal bonds.
Voyageur MINNESOTA High Yield Municipal Bond Fund
VOYAGEUR TAX FREE FUNDS seek high current income free from both Federal income
taxes and state income taxes (where applicable). The Funds invest in investment
grade municipal bonds.
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Voyageur ARIZONA Tax Free Fund Voyageur MINNESOTA Tax Free Fund
Voyageur CALIFORNIA Tax Free Fund Voyageur NATIONAL Tax Free Fund
Voyageur COLORADO Tax Free Fund Voyageur NEW MEXICO Tax Free Fund
Voyageur FLORIDA Tax Free Fund Voyageur NORTH DAKOTA Tax Free Fund
Voyageur IDAHO Tax Free Fund Voyageur UTAH Tax Free Fund
Voyageur IOWA Tax Free Fund Voyageur WISCONSIN Tax Free Fund
Voyageur KANSAS Tax Free Fund
</TABLE>
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.
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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>
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Voyageur FLORIDA Limited Term Tax Free Fund Voyageur NATIONAL 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.
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Voyageur AGGRESSIVE GROWTH Fund Voyageur GROWTH Stock Fund
Voyageur GROWTH AND INCOME Fund Voyageur INTERNATIONAL Equity Fund
</TABLE>
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.
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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
</TABLE>
For more complete information regarding the investment objectives, fees and
expenses of the Funds, please obtain a prospectus from your Investment
Representative or from Voyageur, 90 South Seventh Street, Suite 4400,
Minneapolis, MN 55402-4115; (612) 376-7044 (local); 800-525-6584 (MKTG).
LETTER FROM THE PRESIDENT
[PHOTO] JOHN G. TAFT
PRESIDENT
Dear Shareholder
Since our last report, the headline story in the municipal bond market has been
the demise of a radical tax reform. One of the best ways to illustrate this
demise is to look at how municipal bonds have traded in relation to Treasury
securities. At the height of the tax reform scare -- when Steve Forbes was
campaigning on his Flat Tax platform in January 1996 -- long municipal
securities were trading at a very cheap 90% of Treasuries. At the time of this
report, market fears have abated and municipal bonds are trading at a more
traditional 81%.
We believe the issue of reforming the tax code is far from thoroughly closed.
And it is likely -- in this a U.S. presidential election year -- that we may see
renewed discussions about less radical tax reforms. However, as is often the
case in the financial markets, we believe these times of short-term volatility
and uncertainty represent good opportunities for long-term investors.
At Voyageur, we continue to stress the importance of maintaining a long-term
view -- in both the investment horizons of our shareholders and in our approach
to purchasing securities for the Voyageur Tax Free Funds. In order to select the
best long-term securities for the funds, we favor purchasing negotiated new
municipal issues over those in the secondary or competitive market.
Unlike the taxable bond market where the structure of new bond issues are
frequently predetermined and fixed, we have more flexibility and negotiating
power in determining how a municipal bond issue will be structured. In many
cases, our credit research analysts -- who are experienced experts in the area
of municipal bond transactions -- work closely with municipal bond issuers to
determine the appropriate structure for new bond issues. Our analysts' intimate
knowledge of what's in the market and their ability to actually dissect
individual municipal securities helps us to determine appropriate prices that
accurately reflect an issuer's strength and value while assisting us in
protecting our shareholders' interests. They also help us pinpoint rising and
falling stars -- bonds whose credits may be upgraded or downgraded -- in the
municipal market.
We remain committed to providing our clients with the best investment products
and services available in today's financial markets. The Voyageur Tax Free Funds
allow you access to a wide variety of national and state-specific municipal
bonds funds, all of which are actively managed to meet their individual fund
objectives.
As part of our commitment to you, we have also redesigned our shareholder
reports to provide you with more in-depth information about your Voyageur fund
investments in an easier-to-read format. We welcome any comments you may have
about these changes and encourage you to call our Voyageur Shareholder Services
at 800.543.3863.
If at any time you have questions about your Voyageur fund investments, please
contact your personal financial advisor or Voyageur Shareholder Services. Our
Voyageur Shareholder Services 800 number -- known as Voyageur On Call(TM) --
allows you 24-hour access, seven days a week to an automated voice response
service with shareholder services representatives available from 8 a.m. to 5
p.m. Central Standard Time.
We appreciate your continued patronage of Voyageur Funds and look forward to
working with you and your financial advisors in creating products and services
designed to bring you closer to your investment goals.
Sincerely,
/s/ John G. Taft
John G. Taft
President
Voyageur Florida Tax Free Fund
Voyageur Florida Insured Tax Free Fund
Voyageur Florida Limited Term Tax Free Fund
VOYAGEUR FLORIDA TAX FREE FUNDS
[PHOTO] STEVEN P. ELDREDGE IS THE
SENIOR MUNICIPAL BOND MANAGER
FOR THE VOYAGEUR FLORIDA
LIMITED TERM TAX FREE FUND,
THE VOYAGEUR FLORIDA INSURED
TAX FREE FUND AND THE VOYAGEUR
FLORIDA TAX FREE FUND. MR.
ELDREDGE HAS MORE THAN 18
YEARS OF INVESTMENT INDUSTRY
EXPERIENCE.
For the six months ended June 30, 1996, the total returns at net asset value
(NAV) for the Class A shares of Voyageur Florida Tax Free Funds were as follows:
Voyageur Florida Limited Term Tax Free Fund -0.13%; Voyageur Florida Insured Tax
Free Fund -2.34%; and Voyageur Florida Tax Free Fund-1.81%.*
Within the Funds, we maintained our long-term outlook for lower interest rates
by keeping our Funds' durations long in comparison to the industry average.
Although this caused the Funds' performance to lag when interest rates rose, we
believe the worst is over and are expecting to see a turnaround in interest
rates later this year or early 1997.
AREAS OF OPPORTUNITY
In the Voyageur Florida Tax Free Funds, we remain committed to purchasing
municipal bonds that our credit research staff has identified as having high
credit ratings -- with the Voyageur Florida Insured Tax Free Fund only invested
in insured municipal securities.** We also emphasize investing in essential
service revenue bonds with dedicated and specific sources of taxes pledged for
their repayment.
Since our last reporting period, Voyageur Florida Limited Term Tax Free Fund
acquired the MacKenzie Florida Limited Term Municipal Fund. After receiving
shareholder approval, Mackenzie Fund's portfolio assets of $3.6 million were
consolidated into the Voyageur Florida Limited Term Tax Free Fund.
During the past six months, we continued to search for areas or sectors where we
could add value to the portfolios of the Voyageur Florida Tax Free Funds. One
such area has been to include investments that have added income to the
portfolios. Although we still maintain our commitment to total return, we
believe addition of income to the portfolios will help dampen the effects of
market volatility while allowing our shareholders to benefit from higher income
streams.
In order to attempt to protect our shareholders' current income level for a
longer period of time, we have continued to take advantage of opportunities to
extend the Funds' call protection. This focus on establishing extended call
protection has led to more than half of the bonds in the Voyageur Florida
Limited Term Tax Free Fund to be noncallable. It has also led to the Voyageur
Florida Insured Tax Free Fund and Voyageur Florida Tax Free Fund to have an
average call protection of more than nine years.
OUTLOOK FOR THE MUNICIPAL MARKET
We have found one of the main areas of opportunities in Florida has been in the
health care sector of the municipal bond market. This is due to current
pressures in the health care industry to cut costs through consolidation. In
Florida, there is an increasing trend for larger health care systems to purchase
small, independent health care providers, such as single-facility hospitals or
nursing homes. As these stronger, higher-rated systems buy out smaller
lower-rated health care facilities, the credit strength of the securities once
issued by the smaller facilities often improves, allowing investors to benefit
from an increase in the price of the securities.
The U.S. economy is still showing signs of moderate growth with moderate
inflation -- a trend we expect to see continue for the remainder of the year.
Our outlook for the municipal market continues to be favorable, and we expect
interest rates to decline over the long term. This has caused us to position the
Funds to take advantage of this trend -- staggering the length of duration in
each of the individual Funds in order to maintain our cover the yield curve
strategy.
*Past performance is no guarantee of future results.
**Insurance pertains only to the timely payment of principal and interest by the
securities in the Fund's portfolio. The value of the insured securities and the
Fund itself will fluctuate due to changing market conditions. No representation
is made as to any insurer's ability to meet its commitment.
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<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 1996
- -------------------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR VOYAGEUR
FLORIDA FLORIDA FLORIDA
TAX FREE INSURED LIMITED TERM
FUND TAX FREE FUND TAX FREE FUND
-------- ------------- -------------
<S> <C> <C> <C>
ASSETS
Investments in securities, at market value (note 1) (identified cost:
$5,596,760, $203,994,596 and $4,221,439, respectively) ...... $ 5,616,669 $ 206,395,131 $ 4,241,842
Cash in bank on demand deposit ................................. 443 -- --
Accrued interest receivable .................................... 96,760 3,104,881 75,193
Receivable for Fund shares sold ................................ -- 94,796 --
Receivable for investment securities sold ...................... -- 7,912,275 --
Organizational costs (note 4) .................................. -- 10,025 26,107
----------- ------------- -----------
Total assets ................................................ 5,713,872 217,517,108 4,343,142
----------- ------------- -----------
LIABILITIES
Bank overdraft ................................................. -- 103,098 101,859
Dividends payable to shareholders .............................. 6,805 225,877 3,877
Payable for Fund shares redeemed ............................... -- 150,734 --
Payable for investment securities purchased .................... -- 7,646,697 --
Other accrued expenses ......................................... 10,429 51,642 10,983
----------- ------------- -----------
Total liabilities ........................................... 17,234 8,178,048 116,719
----------- ------------- -----------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES .................... $ 5,696,638 $ 209,339,060 $ 4,226,423
=========== ============= ===========
Represented by:
Paid-in capital (note 1) .................................... $ 5,740,495 $ 221,244,739 $ 4,191,155
Undistributed (distributions in excess of) net investment income (6,215) (188,396) 8,470
Accumulated net realized gain (loss) on investments (note 1) (57,551) (14,117,818) 6,395
Unrealized appreciation of investments ...................... 19,909 2,400,535 20,403
----------- ------------- -----------
Total net assets .......................................... $ 5,696,638 $ 209,339,060 $ 4,226,423
=========== ============= ===========
Net assets applicable to outstanding Class A Shares ............ $ 4,769,494 $ 206,392,432 $ 3,043,235
=========== ============= ===========
Net assets applicable to outstanding Class B Shares ............ $ 911,999 $ 2,946,628 $ 1,129,485
=========== ============= ===========
Net assets applicable to outstanding Class C Shares ............ $ 15,145 N/A $ 53,703
============= ===========
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE
Class A - Shares of beneficial interest outstanding: 465,842,
19,815,856 and 295,122, respectively (note 5) ............. $ 10.24 $ 10.42 $ 10.31
=========== ============= ===========
Class B - Shares of beneficial interest outstanding: 89,022,
282,996 and 109,527, respectively (note 5) ................ $ 10.24 $ 10.41 $ 10.31
=========== ============= ===========
Class C - Shares of beneficial interest outstanding: 1,479,
N/A and 5,209, respectively (note 5) ...................... $ 10.24 N/A $ 10.31
=========== ============= ===========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF OPERATIONS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 1996
- ------------------------------------------------------------------------------------------------------------
VOYAGEUR VOYAGEUR VOYAGEUR
FLORIDA FLORIDA FLORIDA
TAX FREE INSURED LIMITED TERM
FUND TAX FREE FUND TAX FREE FUND
-------- ------------- -------------
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Investment income:
Interest ............................................. $ 156,070 $ 6,378,588 $ 40,901
---------- ------------ ----------
Expenses (note 3):
Investment advisory and management fee ............... 13,288 561,581 3,053
Dividend-disbursing, administrative and
accounting services fees ........................... 9,962 149,088 6,981
Printing, postage and supplies ....................... 579 18,141 430
Audit and accounting fees ............................ 3,005 10,166 2,701
Legal fees ........................................... 37 862 107
Distribution fees - Class A .......................... 6,008 276,908 1,558
Distribution fees - Class B .......................... 2,547 14,642 1,221
Distribution fees - Class C .......................... 21 N/A 268
Directors' fees ...................................... 141 6,415 76
Registration fees .................................... 5,253 2,391 6,350
Custodian fees ....................................... 5,698 23,880 4,036
Amortization of organizational costs ................. -- 10,027 4,607
Other ................................................ 203 2,167 73
---------- ------------ ----------
Total expenses ..................................... 46,742 1,076,268 31,461
Less: Expenses waived or absorbed ................... (41,222) (340,333) (26,575)
---------- ------------ ----------
Net expenses before earnings credits on uninvested cash 5,520 735,935 4,886
Less: Earnings credits on uninvested cash ........... (393) -- (173)
---------- ------------ ----------
Total net expenses ................................. 5,127 735,935 4,713
---------- ------------ ----------
Investment income - net ............................ 150,943 5,642,653 36,188
---------- ------------ ----------
Realized and unrealized gain (loss) on investments:
Realized gain (loss) on security transactions (note 2) (57,551) (1,274,522) 6,395
Net change in unrealized appreciation or
depreciation of investments ........................ (195,377) (9,806,567) (38,188)
---------- ------------ ----------
Net loss on investments .......................... (252,928) (11,081,089) (31,793)
---------- ------------ ----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS ........................................... $ (101,985) $ (5,438,436) $ 4,395
========== ============ ==========
See accompanying notes for financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
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VOYAGEUR FLORIDA
TAX FREE FUND
--------------------------------
SIX MONTHS PERIOD FROM
ENDED MARCH 2, 1995*
JUNE 30, 1996 TO DECEMBER 31,
(UNAUDITED) 1995
-------------- --------------
<S> <C> <C>
Operations:
Investment income - net ............................................ $ 150,943 $ 116,021
Realized gain (loss) on investments - net .......................... (57,551) 8,195
Net change in unrealized appreciation or depreciation of investments (195,377) 215,286
----------- -----------
Net increase (decrease) in net assets resulting from operations (101,985) 339,502
----------- -----------
Distributions to shareholders from:
Investment income - net:
Class A ........................................................ (137,154) (114,869)
Class B ........................................................ (13,737) (890)
Class C ........................................................ (90) (224)
Excess distributions of net investment income:
Class A ........................................................ (6,063) --
Class B ........................................................ (136) --
Class C ........................................................ (16) --
Net realized gain on investments:
Class A ........................................................ -- (8,023)
Class B ........................................................ -- (156)
Class C ........................................................ -- (16)
----------- -----------
Total distributions ................................................ (157,196) (124,178)
----------- -----------
Share transactions (note 5)
Proceeds from sale of shares:
Class A (note 3) ............................................... 1,191,767 7,295,342
Class B ........................................................ 826,828 98,749
Class C ........................................................ 15,000 8,000
Net asset value of shares issued in connection with acquisition of
Mackenzie Florida Limited Term Fund:
Class A ........................................................ -- --
Class B ........................................................ -- --
Netasset value of shares issued in reinvestment of net investment income,
distributions in excess of net investment income and
realized gain distributions:
Class A ...................................................... 53,914 58,440
Class B ...................................................... 1,794 127
Class C ...................................................... 121 188
Payments for redemption of shares:
Class A ........................................................ (656,175) (3,145,208)
Class B (note 3) ............................................... -- --
Class C ........................................................ (8,392) --
----------- -----------
Increase (decrease) in net assets from share transactions .......... 1,424,857 4,315,638
----------- -----------
Total increase (decrease) in net assets ............................ 1,165,676 4,530,962
Net assets at beginning of period ....................................... 4,530,962 --
----------- -----------
Net assets at end of period (including undistributed or (distributions in
excess of) net investment income of $(6,215), $38, $(188,396),
$69,987, $8,470 and $7,677, respectively) ...................... $ 5,696,638 $ 4,530,962
=========== ===========
* Commencement of operations.
See accompanying notes to financial statements.
</TABLE>
VOYAGEUR FLORIDA VOYAGEUR FLORIDA
INSURED TAX FREE FUND LIMITED TERM TAX FREE FUND
-------------------------------- -----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1996 DECEMBER 31, JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
- -------------- ------------- ------------- -----------
$ 5,642,653 $ 12,923,650 $ 36,188 $ 27,973
(1,274,522) (10,106,237) 6,395 2,938
(9,806,567) 44,984,832 (38,188) 56,693
- ------------- ------------- ----------- ----------
(5,438,436) 47,802,245 4,395 87,604
- ------------- ------------- ----------- ----------
(5,644,926) (13,200,309) (29,507) (28,766)
(67,714) (111,406) (4,883) (436)
N/A N/A (864) (1,435)
(185,839) -- -- --
(2,557) -- -- --
N/A N/A (141) --
-- -- -- (2,605)
-- -- -- (144)
N/A N/A -- (189)
- ------------- ------------- ----------- ----------
(5,901,036) (13,311,715) (35,395) (33,575)
- ------------- ------------- ----------- ----------
3,541,095 15,868,684 137,716 902,017
350,296 1,240,744 -- 40,710
N/A N/A -- 50,007
-- -- 2,301,714 --
-- -- 1,307,968 --
1,727,457 3,537,588 17,631 14,355
22,882 35,055 2,068 302
N/A N/A 1,316 1,271
(30,108,461) (51,412,855) (247,467) (701,186)
(94,067) (225,432) (217,237) (10)
N/A N/A -- --
- ------------- ------------- ----------- ----------
(24,560,798) (30,956,216) 3,303,709 307,466
- ------------- ------------- ----------- ----------
(35,900,270) 3,534,314 3,272,709 361,495
245,239,330 241,705,016 953,714 592,219
- ------------- ------------- ----------- ----------
$ 209,339,060 $ 245,239,330 $ 4,226,423 $ 953,714
============= ============= =========== ==========
THE VOYAGEUR FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- -------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Voyageur Florida Tax Free Fund (Florida Tax Free Fund) and the Voyageur
Florida Insured Tax Free Fund (Florida Insured Tax Free Fund), funds within the
Voyageur Investment Trust, a Massachusetts business trust registered under the
Investment Company Act of 1940 (as amended) ("1940 Act") as open-end management
investment companies with an unlimited number of authorized shares of beneficial
interest. Voyageur Florida Limited Term Tax Free Fund (Florida Limited Term
Fund) is a fund within Voyageur Investment Trust II, a Massachusetts business
trust registered under the 1940 Act as an open-end management investment company
with an unlimited number of authorized shares of beneficial interest. Florida
Tax Free Fund seeks high current income free from federal income tax and state
intangibles tax by investing in investment grade municipal bonds. Florida
Insured Tax Free Fund seeks high current income free from federal income tax and
state intangibles tax with the added safety of an insured portfolio by investing
in insured municipal bonds. Florida Limited Term Fund seeks to preserve original
investment principal while providing income free both federal income tax and
state intangibles tax by investing in intermediate term investment grade
municipal bonds.
Florida Tax Free Fund, Florida Insured Tax Free Fund and Florida Limited
Term Fund (the Funds) each offer Class A, Class B and Class C Shares. As of June
30, 1996 Florida Insured Tax Free Fund had no Class C Shares outstanding. 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 are not subject to a contingent
deferred sales charge or a front-end sales charge and have no conversion
feature. 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 differ 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. Florida Insured Tax Free Fund is a
diversified fund as such term is defined in the 1940 Act. Florida Limited Term
Fund and Florida Tax Free Fund are non-diversified funds as such terms are
defined in the 1940 Act. Effective December 31, 1994, Florida Insured Tax Free
Fund changed its fiscal year from October 31 to December 31.
The significant accounting policies followed by the Funds are summarized
as follows:
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of net increase (decrease) in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
INVESTMENTS IN SECURITIES
Securities are valued at fair value as determined by the Board of Trustees.
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.
The Funds concentrate their investments in limited geographical areas and
therefore, may have more credit risk related to the economic conditions of these
areas than a portfolio with broader geographical diversification.
FEDERAL TAXES
The Funds' policy is to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
their income to shareholders in amounts that will avoid or minimize federal
income or excise taxes for the Funds. Net investment income and net realized
gains (losses) for the Funds may differ for financial statement and tax purposes
primarily because of losses deferred for tax purposes due to "wash sale"
transactions. The character of distributions made during the year from net
investment income or net realized gains may differ from their ultimate
characterization for federal income tax purposes. Also, due to the timing of
dividend distributions, the fiscal year in which amounts are distributed may
differ from the year that the income or realized gains (losses) were recorded by
the Funds. For federal income tax purposes, Florida Insured Tax Free Fund had a
capital loss carryover at December 31, 1995, of $12,820,379 that will expire in
2003 if not offset by subsequent capital gains. It is unlikely 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 the Funds. 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.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS
Delivery and payment for securities which have been purchased by the Funds
on a forward commitment or when-issued basis can take place up to a month or
more after the transaction date. During this period, such securities are subject
to market fluctuations and the portfolio maintains, in a segregated account with
its custodian, assets with a market value equal to or greater than the amount of
its purchase commitments.
(2) INVESTMENT SECURITIES TRANSACTIONS
Purchase cost and proceeds of sales of investment securities other than
short-term securities aggregated $3,800,777 and $2,585,540, for Florida Tax Free
Fund, $77,674,780 and $107,691,370 for Florida Insured Tax Free Fund and
$3,814,013 and $420,007 for Florida Limited Term Fund during the six months
ended June 30, 1996, respectively. Included in the cost of purchases for Florida
Limited Term Fund is the cost of purchases that were acquired in the acquisition
of Mackenzie Florida Limited Term Municipal Fund of $3,475,055.
(3) EXPENSES
Each Fund has an investment advisory and management fee agreement with
Voyageur Fund Managers, Inc. (Voyageur) under which Voyageur manages the Funds'
assets and provides other specified services. The fee for investment management
and advisory services is payable monthly and is based on the average daily net
assets of each Fund at the annual rate of .50% for Florida Tax Free Fund and for
Florida Insured Tax Free Fund and .40% for Florida Limited Term Fund. In
addition, the Funds 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 Florida Insured Tax Free Fund. Portfolio insurance expense, if any,
is recognized over the premium period. Voyageur is obligated to pay all expenses
of the Funds (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 six months ended June
30, 1996, Voyageur absorbed $11,557 for Florida Tax Free Fund and $20,693 for
Florida Limited Term Fund pursuant to the contractual 1% expense limitation and,
excluding waiver of distribution fees, voluntarily absorbed $28,443 for Florida
Tax Free Fund, $85,000 for Florida Insured Tax Free Fund and $4,307 for Florida
Limited Term Fund. During the six months ended June 30, 1996, credits earned on
uninvested cash balances held by each Fund at the custodian were $393 for
Florida Tax Free Fund and $173 for Florida Limited Term Fund. These credits were
used to reduce certain fees for various custodial, pricing and accounting
services provided by the custodian bank.
The Funds 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.
Each Fund has a Distribution Agreement under Rule12b-1 of the Investment
Company Act of 1940 with Voyageur Fund Distributors, Inc. (Fund Distributors).
Under these plans, each Fund is obligated to pay Fund Distributors a monthly
distribution fee at an annual rate of .25% of 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 Shares and Class C Shares. Fund Distributors may waive all or
part of its distribution fee at its sole discretion. During the six months ended
June 30, 1996, Fund Distributors voluntarily waived Class A distribution fees of
$247,060 for Florida Insured Tax Free Fund and $1,248 for Florida Limited Term
Fund; and Class B distribution fees of $1,222 for Florida Tax Free Fund, $8,273
for Florida Insured Tax Free Fund and $327 for Florida Limited Term Fund.
Sales charges paid by Class A shareholders were $28,037 Florida Tax Free
Fund, $115,524 for Florida Insured Tax Free Fund and $3,285 for Florida Limited
Term Fund. Of these amounts, Fund Distributors received $3,472 for Florida Tax
Free Fund, $14,757 for Florida Insured Tax Free Fund and $665 for Florida
Limited Term Fund. Contingent deferred sales charges for the six months ended
June 30, 1996 were $1,166 for Florida Insured Tax Free Fund's Class B
shareholders.
(4) ORGANIZATIONAL COSTS
Organizational costs for the Funds are being amortized over 60 months on a
straight line basis. If Voyageur redeems any or all of its shares in the Funds
representing initial capital prior to the end of the 60-month amortization
period, Voyageur will reimburse the Fund for the unamortized balance in the same
proportion as the number of shares redeemed bear to the number of initial shares
outstanding at the time of redemption.
(5) FUND MERGER
On May 31, 1996 Voyageur Florida Limited Term Fund acquired all of the net
assets of Mackenzie Florida Limited Term Fund (Mackenzie Fund) pursuant to an
Agreement and Plan of Reorganization approved by the Mackenzie shareholders on
May 29, 1996. The acquisition was accompanied by a tax-free exchange of 229,210
shares of Mackenzie Fund Class A shares for 222,818 shares of Florida Limited
Term Fund Class A shares and 130,635 shares of Mackenzie Fund Class B shares for
126,618 shares of Florida Limited Term Class B shares. The aggregate net assets
of Florida Limited Term Fund and Mackenzie Fund before the acquisition were
$991,683 and $3,609,682 (including $24,698 of net unrealized depreciation of
investments, $2,317,471 of paid-in capital for Class A and $1,316,909 of paid-in
capital for Class B), respectively, resulting in combined net assets of
$4,601,365 on May 31, 1996.
(6) SHARE TRANSACTIONS
Transactions in shares of beneficial interest during each period were as
follows:
<TABLE>
<CAPTION>
FLORIDA TAX FREE FUND
----------------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
--------------------------- ---------------------------- ---------------------------
PERIOD FROM PERIOD FROM PERIOD FROM
SIX MONTHS MARCH 2, SIX MONTHS SEPTEMBER 15, SIX MONTHS APRIL 22,
ENDED 1995* TO ENDED 1995* TO ENDED 1995* TO
JUNE 30, 1996 DECEMBER 31, JUNE 30, 1996 DECEMBER 31, JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995 (UNAUDITED) 1995
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold.................. 113,183 714,330 79,425 9,412 1,479 788
Shares issued for
reinvested distributions.. 5,160 5,684 173 12 11 18
Shares redeemed.............. (64,641) (307,874) -- -- (817) --
--------- ---------- ------- ------- ------- -----
Increase in
shares outstanding........ 53,702 412,140 79,598 9,424 673 806
======== ======== ======= ======= ======= =====
* Commencement of Operations
</TABLE>
<TABLE>
<CAPTION>
FLORIDA INSURED TAX FREE FUND
-------------------------------------------------------------------
CLASS A CLASS B
---------------------------------- -----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30, 1996 DECEMBER 31, JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
--------------- ------------------ -----------------------------
<S> <C> <C> <C> <C>
Shares sold......................... 332,112 1,522,503 32,569 120,147
Shares issued for
reinvested distributions......... 162,361 344,908 2,154 3,406
Shares redeemed..................... (2,838,329) (4,946,296) (9,026) (21,459)
----------- ------------- --------- -----------
Increase (decrease) in
shares outstanding............... (2,343,856) (3,078,885) 25,697 102,094
=========== ============= ========= =========
</TABLE>
<TABLE>
<CAPTION>
FLORIDA LIMITED TERM FUND
--------------------------------------------------------------------
CLASS A CLASS B
----------------------------------- -------------------------------
SIX MONTHS YEAR SIX MONTHS PERIOD FROM
ENDED ENDED ENDED SEPTEMBER 15, 1995*
JUNE 30, 1996 DECEMBER 31, JUNE 30, 1996 TO DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
----------------------------------- -------------------------------
<S> <C> <C> <C> <C>
Shares sold.......................... 13,318 88,686 -- 3,848
Shares issued in connection with
acquisition of Mackenzie Florida
Limited Term Fund............... 222,818 -- 126,618 --
Shares issued for
reinvested distributions.......... 1,694 1,412 200 28
Shares redeemed...................... (24,100) (70,114) (21,166) (1)
----------- ----------- ---------- ------------
Increase in shares outstanding....... 213,730 19,984 105,652 3,875
============ ============ =========== =========
</TABLE>
<TABLE>
<CAPTION>
FLORIDA LIMITED TERM FUND
--------------------------------------
CLASS C
--------------------------------------
SIX MONTHS PERIOD FROM
ENDED MARCH 23, 1995*
JUNE 30, 1996 TO DECEMBER 31,
(UNAUDITED) 1995
--------------------------------------
<S> <C> <C>
Shares sold......................................... -- 4,960
Shares issued for
reinvested distributions......................... 126 123
Shares redeemed..................................... -- --
-------- ----------
Increase in shares outstanding...................... 126 5,083
======== ==========
</TABLE>
* Commencement of operations
(7) 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>
FLORIDA TAX FREE FUND
---------------------------------------------------------------------
CLASS A CLASS B
-------------------------------- ----------------------------------
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED MARCH 2, 1995(a) ENDED SEPTEMBER 15, 1995(a)
JUNE 30, 1996 TO DECEMBER 31, JUNE 30, 1996 TO DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value:
Beginning of period......................... $10.73 $10.00 $10.73 $10.37
------ ------ ------ ------
Operations:
Net investment income....................... .30 .47 .29 .15
Net realized and unrealized gain (loss) on
investments............................... (.48) .75 (.49) .38
------ ------ ------ ------
Total from operations....................... (.18) 1.22 (.20) .53
------ ------ ------ ------
Distributions to shareholders:
From net investment income (b).............. (.30) (.47) (.29) (.15)
In excess of net investment income.......... (.01) -- -- --
From net realized gains..................... -- (.02) -- (.02)
------ ------ ------ ------
Total distributions....................... (.31) (.49) (.29) (.17)
------ ------ ------ ------
Net asset value:
End of period............................... $10.24 $10.73 $10.24 $10.73
====== ====== ====== ======
Total investment return (c).................... (1.81)% 12.49% (1.95)% 5.10%
Net assets at end of period (000's omitted).... $4,769 $4,421 $912 $101
Ratios:
Ratio of expenses to
average daily net assets (f).............. .18%(e) .32%(e) .45%(e) .44%(e)
Ratio of net investment income
to average daily net assets............... 5.71%(e) 5.26%(e) 5.37%(e) 4.88%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (d)........................ 1.25%(e) 1.25%(e) 2.00%(e) 2.00%(e)
Net investment income............... 4.64%(e) 4.33%(e) 3.82%(e) 3.32%(e)
Portfolio turnover rate (excluding
short-term securities)...................... 49.41% 63.52% 49.41% 63.52%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
FLORIDA TAX FREE FUND
------------------------------------
CLASS C
------------------------------------
SIX MONTHS PERIOD FROM
ENDED APRIL 22, 1995(a)
JUNE 30, 1996 TO DECEMBER, 31
(UNAUDITED) 1995
------------------------------------
<S> <C> <C>
Net asset value:
Beginning of period.................................. $10.73 $10.20
------ ------
Operations:
Net investment income................................ .12 .33
Net realized and unrealized gain (loss) on investments (.49) .56
------ ------
Total from operations................................ (.37) .89
------ ------
Distributions to shareholders:
From net investment income (b)....................... (.12) (.34)
From net realized gains.............................. -- (.02)
------ ------
Total distributions............................... (.12) (.36)
------ ------
Net asset value:
End of period........................................ $10.24 $10.73
====== ======
Total investment return (c)................................ (2.18)% 8.88%
Net assets at end of period (000's omitted)................ $15 $9
Ratios:
Ratio of expenses to
average daily net assets (f).................. .94%(e) 1.11%(e)
Ratio of net investment income
to average daily net assets................... 4.56%(e) 4.57%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (d)........................ 2.00%(e) 2.00%(e)
Net investment income............... 3.50%(e) 3.68%(e)
Portfolio turnover rate (excluding
short-term securities)........................... 49.41% 63.52%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
FLORIDA INSURED TAX FREE FUND
----------------------------------------------------------------------------
CLASS A
----------------------------------------------------------------------------
PERIOD FROM
SIX MONTHS YEAR TWO MONTHS JANUARY 1,
ENDED ENDED ENDED YEAR 1992(a) TO
JUNE 30, 1996 DECEMBER 31, DECEMBER 31, ENDED OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1995 1994 1994 1993 1992
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value:
Beginning of period................ $10.94 $ 9.52 $9.64 $11.15 $10.11 $10.00
------ ------ ----- ------ ------ ------
Operations:
Net investment income.............. .27 .54 .10 .55 .58 .51
Net realized and unrealized
gain (loss) on investments ... (.51) 1.44 (.12) (1.46) 1.12 .15
------ ------ ----- ----- ------ ------
Total from operations.............. (.24) 1.98 (.02) (.91) 1.70 .66
------ ------ ----- ----- ------ ------
Distributions to shareholders:
From net investment income (b)..... (.27) (.56) (.09) (.54) (.58) (.51)
In excess of net investment income. (.01) -- -- -- -- --
From net realized gains............ -- -- (.01) (.06) (.08) (.04)
------ ------ ----- ----- ------ ------
Total distributions............ (.28) (.56) (.10) (.60) (.66) (.55)
------ ------ ----- ----- ------ ------
Net asset value:
End of period...................... $10.42 $10.94 $9.52 $9.64 $11.15 $10.11
====== ====== ===== ===== ====== ======
Total investment return (c)............. (2.34)% 21.22% (0.11)% (8.38)% 17.27% 6.74%
Net assets at end of period
(000's omitted).................... $206,392 $242,425 $240,228 $259,702 $289,682 $50,666
Ratios:
Ratio of expenses to
average daily net assets (f)... .65%(e) .51% .20%(e) .44% .18% --%
Ratio of net investment income
to average daily net assets.... 5.02%(e) 5.24% 6.24%(e) 5.24% 5.18% 5.38%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (d)......... .95%(e) .95% 1.06%(e) .96% 1.12% 1.25%(e)
Net investment income 4.72%(e) 4.80% 5.38%(e) 4.72% 4.24% 4.13%(e)
Portfolio turnover rate (excluding
short-term securities)............. 33.97% 101.48% 2.51% 49.12% 53.51% 208.24%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
FLORIDA INSURED TAX FREE FUND
--------------------------------------------------------------
CLASS B
--------------------------------------------------------------
SIX MONTHS YEAR TWO MONTHS PERIOD FROM
ENDED ENDED ENDED MARCH 1, 1994(a)
JUNE 30, 1996 DECEMBER 31, DECEMBER 31, TO OCTOBER 31,
(UNAUDITED) 1995 1994 1994
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value:
Beginning of period......................... $10.94 $ 9.52 $9.63 $10.82
------ ------ ----- -----
Operations:
Net investment income....................... .24 .50 .09 .31
Net realized and unrealized
gain (loss) on investments ............ (.52) 1.44 (.11) (1.19)
------ ------ ----- -----
Total from operations....................... (.28) 1.94 (.02) (.88)
------ ------ ----- -----
Distributions to shareholders:
From net investment income (b).............. (.24) (.52) (.08) (.30)
In excess of net investment income.......... (.01) -- -- --
From net realized gains..................... -- -- (.01) (.01)
------ ------ ----- -----
Total distributions..................... (.25) (.52) (.09) (.31)
------ ------ ----- -----
Net asset value:
End of period.............................. $10.41 $10.94 $9.52 $9.63
====== ====== ===== =====
Total investment return (c)..................... (2.63)% 20.76% (0.03)% (8.10)%
Net assets at end of period
(000's omitted)............................. $2,947 $2,814 $1,477 $1,135
Ratios:
Ratio of expenses to
average daily net assets (f)........... 1.06%(e) .89% .59%(e) 1.00%(e)
Ratio of net investment income
to average daily net assets............ 4.59%(e) 4.80% 5.68%(e) 4.63%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (d).............. 1.70%(e) 1.68% 1.81%(e) 1.28%(e)
Net investment income...... 3.95%(e) 4.01% 4.46%(e) 4.35%(e)
Portfolio turnover rate (excluding
short-term securities)...................... 33.97% 101.48% 2.51% 49.12%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
FLORIDA LIMITED TERM FUND
-----------------------------------------------
CLASS A
-----------------------------------------------
SIX MONTHS YEAR PERIOD FROM
ENDED ENDED MAY 1, 1994(a)
JUNE 30, 1996 DECEMBER 31, TO DECEMBER 31,
(UNAUDITED) 1995 1994
-----------------------------------------------
<S> <C> <C> <C>
Net asset value:
Beginning of period.................... $10.56 $9.64 $10.00
------ ------ -----
Operations:
Net investment income.................. .18 .44 .18
Net realized and unrealized gain (loss)
on investments....................... (.18) 1.01 (.36)
------ ------ -----
Total from operations.................. .00 1.45 (.18)
------ ------ -----
Distributions to shareholders:
From net investment income (b)......... (.25) (.49) (.18)
From net realized gains................ -- (.04) --
------ ------ -----
Total distributions.................. (.25) (.53) (.18)
------ ------ -----
Net asset value:
End of period.......................... $10.31 $10.56 $9.64
====== ====== =====
Total investment return (c)............... (.13)% 15.14% (1.55)%
Net assets at end of period (000's omitted) $3,043 $859 $592
Ratios:
Ratio of expenses to
average daily net assets (f)......... .49%(e) .63% --%(e)
Ratio of net investment income
to average daily net assets.......... 4.83%(e) 4.28% 4.19%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (d)................... 1.25%(e) 1.25% 1.25%(e)
Net investment income.......... 4.07%(e) 3.66% 2.94%(e)
Portfolio turnover rate (excluding
short-term securities)................. 22.35% 27.76% --%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
FLORIDA LIMITED TERM FUND
-----------------------------------------------------------------
CLASS B CLASS C
----------------------------------- ---------------------------
SIX MONTHS PERIOD FROM SIX MONTHS PERIOD FROM
ENDED SEPTEMBER 15, 1995(a) ENDED MARCH 23, 1995(a)
JUNE 30, 1996 TO DECEMBER 31, JUNE 30, 1996 TO DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value:
Beginning of period.................... $10.56 $10.58 $10.55 $10.08
------ ------ ------ ------
Operations:
Net investment income.................. .22 .10 .20 .25
Net realized and unrealized gain (loss)
on investments....................... (.26) .03 (.25) .55
------ ------ ------ ------
Total from operations.................. (.04) .13 (.05) .80
------ ------ ------ ------
Distributions to shareholders:
From net investment income (b)......... (.21) (.11) (.19) (.29)
From net realized gains................ -- (.04) -- (.04)
------ ------ ------ ------
Total distributions.................. (.21) (.15) (.19) (.33)
------ ------ ------ ------
Net asset value:
End of period.......................... $10.31 $10.56 $10.31 $10.55
====== ====== ====== ======
Total investment return (c)............... (.38)% 1.13% (.51)% 7.95%
Net assets at end of period (000's omitted) $1,129 $41 $54 $54
Ratios:
Ratio of expenses to
average daily net assets (f)......... 1.19%(e) 1.52%(e) 1.43%(e) 1.62%(e)
Ratio of net investment income
to average daily net assets.......... 4.14%(e) 3.32%(e) 3.89%(e) 3.10%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (d)................... 2.00%(e) 2.00%(e) 2.00%(e) 2.00%(e)
Net investment income.......... 3.33%(e) 2.84%(e) 3.32%(e) 2.72%(e)
Portfolio turnover rate (excluding
short-term securities)................. 22.35% 27.76% 22.35% 27.76%
</TABLE>
See accompanying notes to Financial Highlights.
NOTES TO FINANCIAL HIGHLIGHTS
(a) Commencement of operations.
(b) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(c) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(d) Voyageur and Fund Distributors voluntarily waived or reimbursed a portion
of expenses during the periods presented. The annual contractual expense
limit for the Fund (excluding distribution fees, insurance premiums on
portfolio securities, taxes, interest and brokerage commissions) is 1% of
average daily net assets. The maximum distribution fee is .25% of 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.
(e) Annualized.
(f) Beginning in the year ended December 31, 1995, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Funds. Prior period expense ratios have not
been adjusted.
<TABLE>
<CAPTION>
VOYAGEUR FLORIDA TAX FREE FUND
INVESTMENTS IN SECURITIES (UNAUDITED) JUNE 30, 1996
- -------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- -------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
MUNICIPAL BONDS (97.7%):
UTILITIES (18.4%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$100 Charlotte County Utility Revenue (FGIC Insured)...................... 5.50% 10-01-17 $96,768
100 Fort Pierce Utility Authority Revenue (AMBAC Insured)................ 5.25 10-01-16 94,203
100 Key West Sewer Revenue (FGIC Insured)................................ 5.70 10-01-26 98,152
350 Miramar Wastewater Improvement Revenue (FGIC Insured)................ 6.75 10-01-25 376,548
150 Puerto Rico Electric Power Authority Revenue......................... 5.50 07-01-25 140,452
100 St. Lucie County Utility System Revenue (FGIC Insured)............... 5.50 10-01-17 95,589
150 St. Lucie County Special Assessment Revenue,(Asset Guaranty Insured). 6.10 11-01-20 148,125
----------
1,049,837
----------
TRANSPORTATION (4.4%):
-------------------------------------------------------------------------------------------------------
160 Florida State Mid Bay Bridge Authority Revenue...................... 6.13 10-01-22 154,619
100 Hillsborough County Aviation Authority Revenue, Tampa Airport
(FGIC Insured).................................................. 5.60 10-01-19 96,429
----------
251,048
----------
HEALTH CARE (26.6%):
-------------------------------------------------------------------------------------------------------
155 Dade County Public Facility Revenue, Jackson Memorial Hospital
(MBIA Insured).................................................. 5.25 06-01-23 140,021
100 Hillsborough County Hospital Authority, Tampa General Hospital
(FSA Insured).................................................... 6.38 10-01-13 104,207
500 Lee County Hospital Board - Directors Hospital...................... 6.35 03-26-20 501,250
225 Orange County Health Facility Revenue Adventist Health System
(AMBAC Insured).................................................. 5.25 11-15-20 204,588
130 Palm Beach Health Facility Revenue, Good Samaritan Health........... 6.30 10-01-22 131,435
200 Sarasota Health Facility Revenue, Sunnyside Properties.............. 6.00 05-15-10 189,014
250 Volusia City Health Care, John Knox Hospital . . . . . . . ........ 6.00 06-01-17 244,590
----------
1,515,105
----------
HOUSING (29.4%):
-------------------------------------------------------------------------------------------------------
250 Blackwater Housing Corporation..................................... 6.50 06-01-25 244,878
500 Dade County Housing Finance Authority, Multifamily Mortgage
(MBIA Insured)................................................. 6.25 07-01-24 503,120
250 Duval Housing Financial Authority, St. Augustine Apt............... 6.00 09-01-21 242,440
200 Florida Housing Finance Agency, Homeowner Mortgage................. 6.00 01-01-17 196,874
500 Florida Housing Finance Agency, Vineyards Project.................. 6.40 11-01-15 489,910
----------
1,677,222
----------
OTHER REVENUE (18.9%):
-------------------------------------------------------------------------------------------------------
100 Boca Raton Special Assessment Revenue............................... 5.20 07-01-22 87,308
145 Florida State Division of Bond Finance, General Services Revenue.... 5.38 07-01-12 140,540
250 Lake Bernadette Community Development District. . . . . ............ 8.00 05-01-17 250,000
155 Miami Parking Facility Revenue...................................... 5.70 10-01-09 153,706
100 North Palm Beach County Improvement District Revenue - Dev. 31-1.... 6.75 11-01-15 100,056
110 Orange County Sales Tax Revenue..................................... 5.38 01-01-24 97,750
250 Orlando & Orange County Expressway Authority Revenue................ 5.95 07-01-23 244,097
----------
TOTAL MUNICIPAL BONDS (cost: $5,546,760) 5,566,669
---------
SHORT TERM SECURITIES ( 0.9%):
------------------------------------------------------------------------------------------------------
50 Dreyfus Investment Tax-Exempt Money Market Fund (cost: $50,000) 3.13(e) 50,000
----------
TOTAL INVESTMENTS IN SECURITIES (cost: $5,596,760)(c) $5,616,669
==========
</TABLE>
See accompanying notes to investments in securities.
<TABLE>
<CAPTION>
VOYAGEUR FLORIDA INSURED TAX FREE FUND
INVESTMENTS IN SECURITIES (UNAUDITED) (CONTINUED) JUNE 30, 1996
- -------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- -------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
MUNICIPAL BONDS (98.6%):
GENERAL OBLIGATION (9.5 %):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 1,000 Coral Springs Water & Sewer Improvement District (MBIA Insured).... 6.00% 06-01-10 $ 1,038,730
6,000 Florida State Board of Education (MBIA Insured).................... 5.75 06-01-11 6,046,500
5,500 Florida State Board of Education (MBIA Insured).................... 6.10 06-01-24 5,585,415
4,900 Florida State Department of Transportation Right of Way
(MBIA Insured)................................................. 5.70 07-01-11 4,921,854
2,350 Florida State Department of Transportation Right of Way
(MBIA Insured).................................................. 5.75 07-01-12 2,360,458
--------------
19,952,957
------------
UTILITY (19.8%):
-------------------------------------------------------------------------------------------------------
3,530 Auburndale Water and Sewer (AMBAC Insured)....................... 5.25 12-01-15 3,318,306
2,385 Braedenton Utility System Revenue (FGIC Insured)................. 5.75 10-01-11 2,405,201
1,000 Coral Springs Water & Sewer Revenue (FGIC Insured)............... 6.00 09-01-10 1,027,800
1,750 Dade County Water & Sewer Revenue (FGIC Insured)................. 5.75 10-01-22 1,719,585
2,070 Florida State Municipal Power St. Lucie Pj. (FGIC Insured)....... 5.50 10-01-12 2,039,240
2,000 Indian River Water & Sewer Revenue (FGIC Insured)................ 5.50 09-01-15 1,944,480
3,000 Jacksonville Electric Authority Revenue (FSA Insured)............ 5.50 10-01-14 2,918,940
2,000 Jupiter Water Revenue (AMBAC Insured)............................ 6.25 10-01-12 2,082,860
1,000 Lakeland Electric and Water Revenue (FGIC Insured)............... 5.88(d) 10-01-08 1,040,240
1,015 Lakeland Electric and Water Revenue (FGIC Insured)............... 6.00(d) 10-01-13 1,042,415
1,000 Lakeland Electric and Water Revenue (FGIC Insured) .............. 6.00(d) 10-01-14 1,022,230
1,480 Lee County IDA Bonita Springs Utilities (MBIA Insured)........... 5.75(f) 11-01-10 1,464,785
1,325 Lee County IDA Bonita Springs Utilities (MBIA Insured)........... 5.80(f) 11-01-11 1,310,836
2,175 Miramar Water Improvement Assessment Revenue (FGIC Insured)...... 6.75 10-01-25 2,339,974
1,000 New Smyrna Beach Utilities Revenue (FGIC Insured)................ 6.00 10-01-13 1,018,100
1,500 North Port Utilities System Revenue (FGIC Insured)............... 6.15 10-01-09 1,571,670
5,000 North Port Utilities System Revenue (FGIC Insured)............... 6.25 10-01-22 5,118,950
1,475 Ocoee Water & Sewer System (MBIA Insured)........................ 5.75 10-01-10 1,493,836
5,000 Port St. Lucie Utility System Revenue (FGIC Insured)............. 6.00 09-01-24 5,035,700
1,500 Titusville Water & Sewer (MBIA Insured).......................... 6.20 10-01-14 1,549,200
------------
41,464,348
------------
INDUSTRIAL (4.6%):
-------------------------------------------------------------------------------------------------------
1,000 Canaveral Port Authority Revenue (FGIC Insured).................. 6.00 06-01-12 1,020,740
2,500 Citrus County Capital Improvement (MBIA Insured)................. 5.38 07-01-11 2,433,550
1,000 Collier County Capital Improvement (FGIC Insured)................ 5.75 10-01-13 1,001,850
1,000 Hernando County Capital Improvement (MBIA Insured).............. 5.75 02-01-10 1,006,670
1,000 Palm Beach Solid Waste Authority Revenue (MBIA Insured).......... 6.00 12-01-07 1,049,030
2,000 Palm Beach Solid Waste Authority Revenue (MBIA Insured).......... 6.25 12-01-08 2,120,240
1,000 Sarasota Solid Waste Revenue (AMBAC Insured)..................... 5.50 10-01-21 942,730
------------
9,574,810
------------
HEALTH CARE (18.4%):
-------------------------------------------------------------------------------------------------------
2,500 Alachua County Shands Hospital Facilities (MBIA Insured)......... 5.75 12-01-15 2,472,500
5,000 Alachua County Health Facilities, Shands Tching (MBIA Insured)... 5.80 12-01-26 4,874,250
1,000 Brevard Health Facilities, Holmes Reg Medical Center
(MBIA Insured)................................................ 5.63 10-01-14 964,080
4,000 Dade County Baptist Hospital Health Facility (MBIA Insured)...... 5.25 05-15-21 3,626,120
3,600 Hillsborough County Hospital (FSA Insured)....................... 6.38 10-01-13 3,751,452
10,000 Lee County Hospital Board Revenue (MBIA Insured)................. 6.35 03-26-20 10,025,000
6,000 Orange County Adventist Health (AMBAC Insured)................... 5.50 11-15-15 5,764,800
5,000 Orange County Adventist Health (AMBAC Insured)................... 5.25 11-15-20 4,546,400
2,500 Tallahassee Health Facility (MBIA Insured)....................... 6.00 12-01-15 2,516,225
------------
38,540,827
------------
HOUSING (4.4% ):
-------------------------------------------------------------------------------------------------------
1,000 Florida State Housing-Sterling Palms Apartments
(AMBAC Insured)............................................... 6.30 12-01-16 1,010,950
1,500 Florida State Housing-Sterling Palms Apartments
(AMBAC Insured)............................................... 6.40 12-01-26 1,521,360
6,540 Florida State Housing-Sterling Palms Apartments
(AMBAC Insured)............................................... 6.50 06-01-36 6,632,671
------------
9,164,981
------------
EDUCATION (2.0%):
-------------------------------------------------------------------------------------------------------
4,500 University of Puerto Rico Revenue Series 95M (MBIA Insured)...... 5.25 06-01-25 4,151,250
------------
CERTIFICATE OF PARTICIPATION (13.5%):
-------------------------------------------------------------------------------------------------------
5,125 Brevard County School Board COP (AMBAC Insured).................. 5.50 07-01-16 4,903,549
4,000 Brevard County School Board COP (AMBAC Insured)................. 5.50 07-01-21 3,787,200
5,000 Escambia County School District COP (MBIA Insured)............... 5.50 02-01-22 4,731,050
2,000 Manatee County (MBIA Insured).................................... 6.13(d) 07-01-16 2,024,560
11,750 Palm Beach County School Board (AMBAC Insured)................... 5.38 08-01-15 11,128,895
1,680 St. Lucie School Board COP (FSA Insured)......................... 5.38 07-01-19 1,571,556
------------
28,146,810
------------
TRANSPORTATION (4.9%):
-------------------------------------------------------------------------------------------------------
2,000 Florida State Turnpike Authority (FGIC Insured).................. 6.30 07-01-12 2,089,380
5,000 Florida State Turnpike Authority (FGIC Insured) ................. 5.23 07-01-12 4,753,550
2,500 Florida State Turnpike Authority Inverse Floater (FGIC Insured).. 6.57(g) 07-01-12 2,239,775
1,500 Orlando Orange County Expressway Inverse Floater
(AMBAC Insured)............................................... 6.57(g) 07-01-12 1,343,865
------------
10,426,570
------------
OTHER REVENUE (21.5%):
-------------------------------------------------------------------------------------------------------
2,000 Collier County Capital Improvement Revenue (MBIA Insured)........ 5.75 10-01-10 2,010,560
1,340 Coral Springs Franchise Revenue (AMBAC Insured).................. 6.10 09-01-13 1,370,525
2,000 Dade County Special Obligation (AMBAC Insured)................... 5.00 10-01-35 1,715,140
3,000 Florida Div Board Preservation 2000 (AMBAC Insured).............. 5.75 07-01-11 3,030,420
5,800 Florida Div Board Preservation 2000 (MBIA Insured)............... 6.25 07-01-13 5,996,040
10,000 Florida Div Board Preservation 2000 (AMBAC Insured).............. 5.75 07-01-13 10,022,600
1,080 Gulf Breeze Revenue Local Government Loan (FGIC Insured)......... 5.90 12-01-10 1,091,297
1,020 Gulf Breeze Revenue Local Government Loan (FGIC Insured)......... 5.90 12-01-10 1,030,669
2,225 Jacksonville Capital Improvement Gator Bowl (AMBAC Insured)...... 5.50 10-01-19 2,117,555
2,500 Jupiter Sales Tax Revenue (AMBAC Insured)........................ 6.38 09-01-20 2,585,100
1,000 Marion County Public Improvement Revenue (MBIA Insured).......... 6.13 12-01-08 1,047,470
1,055 Miami Beach Resort Tax Revenue (AMBAC Insured)................... 5.50 10-01-16 1,015,047
1,000 Miami Special Obligation (FGIC Insured).......................... 6.00 02-01-16 1,012,050
1,000 Nassau County Optional Gas Tax (FGIC Insured).................... 6.00 03-01-09 1,032,910
1,000 Ocala Optional Gas Tax Revenue (AMBAC Insured)................... 6.00 12-01-09 1,035,500
1,000 Osceola County Celebration '94 (MBIA Insured).................... 6.10 05-01-16 1,020,400
1,000 Osceola County Enterprise '94 (MBIA Insured)..................... 6.10 05-01-16 1,020,400
1,225 Pembroke Pines Capital Improvement Revenue (AMBAC Insured)....... 5.95 10-01-20 1,232,338
1,000 Reedy Creek Improvement District Revenue (MBIA Insured).......... 5.60 06-01-11 1,000,290
1,000 Reedy Creek Improvement District Revenue (MBIA Insured).......... 5.70 06-01-12 1,002,020
2,300 Reedy Creek Improvement District Revenue (MBIA Insured).......... 5.75 06-01-13 2,304,623
1,200 Sanford Community Redevelopment (AMBAC Insured).................. 6.00 06-01-11 1,224,624
------------
44,917,578
------------
TOTAL MUNICIPAL BONDS (cost: $203,939,596) 206,340,131
------------
SHORT TERM SECURITIES (.01%):
-------------------------------------------------------------------------------------------------------
55 Dreyfus Investment Tax-Exempt Money Market Fund
(cost: $55,000)............................................... 3.13(e) 55,000
------------
TOTAL INVESTMENTS IN SECURITIES (cost: $203,994,596) (c) $206,395,131
============
</TABLE>
See accompanying notes to investments in securities.
<TABLE>
<CAPTION>
VOYAGEUR FLORIDA LIMITED TERM TAX FREE FUND
INVESTMENTS IN SECURITIES (UNAUDITED) JUNE 30, 1996
- -------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT COUPON MARKET
($000) NAME OF ISSUER (b) RATE MATURITY VALUE (a)
- -------------------------------------------------------------------------------------------------------------------
(PERCENTAGE OF EACH INVESTMENT CATEGORY RELATES TO TOTAL NET ASSETS.)
MUNICIPAL BONDS (100.3%):
ESCROWED WITH U.S. GOVERNMENT BONDS (22.7%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 50 Boyton Beach Water & Sewer (AMBAC Insured)....................... 7.40% 11-01-00 $ 56,087
25 Dade County U of N Miami Education Facility (MBIA Insured)....... 7.10 10-01-16 28,075
150 Florida State Board of Education Capital Outlay Series A,
Zero Coupon................................................... 7.25(h) 06-01-00 54,099
250 Florida State Board of Education Capital Outlay Series A......... 7.25 06-01-00 276,880
50 Leon County Capital Improvement Revenue (MBIA Insured)........... 5.75 10-01-03 52,067
25 Manatee County Water & Sewer..................................... 6.80 10-01-00 26,966
200 Port St. Lucie Storm Water Utilities............................. 7.40 11-01-06 223,676
200 Sunrise Utility System Revenue (AMBAC Insured)................... 10.25 10-01-00 243,162
----------
961,012
----------
UTILITIES (25.7%):
-------------------------------------------------------------------------------------------------------
50 Belle Glade Water and Sewer Revenue (FSA Insured)................ 5.20 09-01-10 48,200
25 East County Water (Lee County Drain Revenue)..................... 5.45 11-01-02 25,807
100 Hillsborough County Utility Reform (MBIA Insured)................ 9.75 12-01-03 122,875
250 Jacksonville Electric Authority Revenue Series 2 87A1............ 7.40 10-01-01 262,500
250 Kissimmee Suburban Water and Sewer Revenue (AMBAC Insured)....... 5.80 10-01-02 262,780
250 Puerto Rico Electric Power Authority Revenue Series O ........... 6.80 07-01-00 267,045
100 St. Lucie County Special Asset Revenue........................... 5.60 11-01-09 97,250
----------
1,086,457
----------
CERTIFICATE OF PARTICIPATION (0.6%):
-------------------------------------------------------------------------------------------------------
25 Volusia County School Board COP (FSA Insured).................... 5.10 08-01-08 24,297
----------
TRANSPORTATION (0.6%):
-------------------------------------------------------------------------------------------------------
25 Orlando Aviation Airport Revenue (AMBAC Insured)................. 5.90 10-01-04 26,659
----------
HEALTH CARE (4.8 %):
-------------------------------------------------------------------------------------------------------
25 Dade County Health Facility Authority (AMBAC Insured)............ 6.10 08-15-03 26,628
50 Leesburg Regional Medical Center................................. 5.30 07-01-03 48,972
50 Palm Beach County (Good Samaritan Health Systems)................ 5.70 10-01-02 51,989
25 Palm Beach County (Good Samaritan Health Systems)................ 6.00 10-01-04 26,428
50 Sarasota Health Facility Authority Revenue....................... 5.50 05-15-01 49,687
----------
203,704
----------
HOUSING (3.9%):
-------------------------------------------------------------------------------------------------------
50 Duval Housing Financial Authority, St. Augustine Apartments...... 6.00 09-01-21 48,488
25 Escambia County Housing Finance Authority........................ 5.75 04-01-04 25,662
45 Manatee County Single Family Housing (GNMA/FHLMC Insured)........ 5.63 05-01-04 45,713
45 Orange County Housing Financial Authority........................ 5.05 10-01-02 44,925
----------
164,788
----------
EDUCATION (16.7%):
-------------------------------------------------------------------------------------------------------
200 Dade County EDL Facility Authority St. Thomas.................... 5.25 01-01-03 203,064
250 Pasco County School Board Ctfs Series A (FSA Insured)........... 6.10 08-01-01 263,905
200 Volusia County School Board (FSA Insured)........................ 10.00 08-01-00 237,518
----------
704,487
----------
GENERAL OBLIGATION (7.5%):
-------------------------------------------------------------------------------------------------------
250 Dade County School District GO................................... 7.00 07-01-99 266,678
50 Puerto Rico Commonwealth GO...................................... 5.10 07-01-02 49,975
----------
316,653
----------
OTHER REVENUE (17.8%):
-------------------------------------------------------------------------------------------------------
25 Brevard County Sales Tax Revenue (MBIA Insured).................. 5.20 12-01-04 25,304
250 Hillsborough County Port Reform Series A (FSA Insured) ......... 5.10 06-01-03 251,580
200 Jacksonville Port Authority Revenue Facility (MBIA Insured)...... 7.63 11-01-02 229,444
200 Orange County Tourist Development (AMBAC Insured)................ 7.25 10-01-06 222,192
25 Orlando Capital Improvement Special Revenue...................... 5.50 10-01-04 25,265
-------------------------------------------------------------------------------------------------------
753,785
----------
TOTAL INVESTMENT IN SECURITIES (cost: $4,221,439) (c) $4,241,842
==========
</TABLE>
See accompanying notes to investments in securities.
VOYAGEUR FLORIDA TAX FREE FUND
VOYAGEUR FLORIDA INSURED TAX FREE FUND
VOYAGEUR FLORIDA LIMITED TERM TAX FREE FUND
NOTES TO INVESTMENTS IN SECURITIES (UNAUDITED) JUNE 30, 1995
- --------------------------------------------------------------------------------
(a) Securities are valued by procedures described in note 1 to the financial
statements.
(b) Investments in bonds, by rating category (unaudited) as a percentage of
total bonds, are as follows:
<TABLE>
<CAPTION>
Aaa/AAA Aa/AA A/A Baa/BBB NR/NR Total
------- ----- --- ------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Florida Tax Free Fund................... 44% 11% 20% 16% 9% 100%
Florida Insured Tax Free Fund........... 100% -- -- -- -- 100%
Florida Limited Term Tax Free Fund...... 67% 14% 10% 9% -- 100%
</TABLE>
(c) Also represents the cost of securities for federal income tax purposes
for Florida Tax Free Fund and Florida Limited Term Tax Free Fund. At June
30, 1996 the cost of investments for federal income tax purposes was
$204,017,513 for Florida Insured Tax Free Fund. 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>
Florida Tax Free Fund..................... $ 61,131 $ (41,222) $ 19,909
Florida Insured Tax Free Fund............. 2,971,340 (593,722) 2,377,618
Florida Limited Term Tax Free Fund........ 45,143 (24,740) 20,403
</TABLE>
(d) At June 30, 1996, the cost of securities purchased on a when issued basis
was $4,968,471 for Florida Insured Tax Free Fund.
(e) Dividend yields change daily to reflect current market conditions. Rate
shown is the quoted yield as of June 30, 1996.
(f) Security subject to the Alternative Minimum Tax.
(g) Inverse floater, represents a security that pays interest at rates that
increase (decrease) with a decline (increase) in a general money market
index. Interest rate disclosed is the rate in effect on June 30, 1996.
(h) The interest rate disclosed for zero coupon issues represents the
effective yield on the date of acquisition.
INVESTMENT ADVISER, TRANSFER AGENT,
DIVIDEND DISBURSING AGENT AND
ACCOUNTING SERVICES AGENT
Voyageur Fund Managers, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, MN 55402
UNDERWRITER
Voyageur Fund Distributors, Inc.
90 South Seventh Street, Suite 4400
Minneapolis, MN 55402
CUSTODIAN
Norwest Bank Minnesota, N.A.
Sixth Street & Marquette Avenue
Minneapolis, MN 55479
GENERAL COUNSEL
Dorsey & Whitney P.L.L.P.
Minneapolis, MN 55402
AUDITORS
KPMG Peat Marwick LLP
Minneapolis, MN 55402
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90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402-4115
