[LOGO]
VOYAGEUR
YOUR TAX SENSITIVE INVESTMENT MANAGER
MISSOURI INSURED 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.
<TABLE>
<S> <C>
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.
<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 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.
<TABLE>
<S> <C>
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.
<TABLE>
<S> <C>
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 Missouri Insured Tax Free Fund
VOYAGEUR MISSOURI INSURED TAX FREE FUND
[PHOTO] ELIZABETH H. HOWELL IS THE
SENIOR MUNICIPAL BOND
MANAGER FOR THE VOYAGEUR
MISSOURI INSURED TAX FREE
FUND. MS. HOWELL HAS MORE
THAN 10 YEARS OF INVESTMENT INDUSTRY
EXPERIENCE.
For the six months ended June 30, 1996, the total return at net asset value
(NAV) for the Class A shares of Voyageur Missouri Insured Tax Free Fund was
- -1.93%.*
Within the Fund, we maintained our long-term outlook for lower interest rates by
keeping the Fund's duration long as compared to the industry average. Although
this caused the Fund's performance to lag somewhat when interest rates rose, we
believe the worst is over and are expecting to see a turnaround in the bond
market later this year or early 1997.
AREAS OF OPPORTUNITY
In the Fund's holdings, we remained committed to purchasing insured municipal
bonds with the highest credit ratings, emphasizing securities in the general
obligation and housing sectors.** During the past six months, we continued to
search for areas or sectors where we could add value to the Fund.
One such area has been to include investments that have added income to the
Fund. Although we still maintain our commitment to total return, we believe
addition of income will allow us to dampen the effects of market volatility
while allowing our shareholders to benefit from higher income streams.
We also continued to take advantage of opportunities to extend call protection
in order to attempt to protect our shareholders' current level of income for a
longer period of time. This emphasis has led to the Fund having an average call
protection of more than nine years.
OUTLOOK FOR THE MUNICIPAL MARKET
In the U.S. economy, we are 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
Fund to take advantage of this trend.
*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.
<TABLE>
<CAPTION>
VOYAGEUR MISSOURI INSURED TAX FREE FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 1996
- --------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments in securities, at market value (note 1)
(identified cost: $57,764,900)................................................... $58,161,990
Cash in bank on demand deposit...................................................... 149,530
Accrued interest receivable......................................................... 973,604
Receivable for investment securities sold........................................... 1,000,721
Receivable for Fund shares sold..................................................... 53,681
-----------
Total assets..................................................................... 60,339,526
-----------
LIABILITIES
Dividends payable to shareholders................................................... 62,163
Payable for Fund shares redeemed.................................................... 1,101,002
Payable for investment securities purchased......................................... 2,181,000
Other accrued expenses.............................................................. 42,703
-----------
Total liabilities ............................................................... 3,386,868
-----------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES......................................... $56,952,658
===========
Represented by:
Paid-in capital (note 1)......................................................... $57,725,943
Distributions in excess of net investment income................................. (63,828)
Accumulated net realized loss on investments (note 1)............................ (1,106,547)
Unrealized appreciation of investments........................................... 397,090
----------
TOTAL NET ASSETS............................................................... $56,952,658
===========
Net assets applicable to outstanding Class A Shares................................. $47,995,840
===========
Net assets applicable to outstanding Class B Shares................................. $ 8,797,149
===========
Net assets applicable to outstanding Class C Shares................................. $ 159,669
===========
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE
Class A - Shares of beneficial interest outstanding: 4,761,453 (note 4).......... $ 10.08
===========
Class B - Shares of beneficial interest outstanding: 872,860 (note 4)............ $ 10.08
===========
Class C - Shares of beneficial interest outstanding: 15,832 (note 4)............. $ 10.09
===========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR MISSOURI INSURED TAX FREE FUND
STATEMENT OF OPERATIONS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 1996
- ----------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Interest..................................................................... $ 1,621,550
-----------
Expenses (note 3):
Investment advisory and management fee....................................... 142,407
Dividend-disbursing, administrative and accounting services fees............. 59,446
Printing, postage and supplies............................................... 5,874
Audit and accounting fees.................................................... 7,556
Legal fees................................................................... 594
Distribution fees - Class A.................................................. 61,474
Distribution fees - Class B.................................................. 38,264
Distribution fees - Class C.................................................. 582
Directors' fees.............................................................. 1,541
Registration fees............................................................ 936
Custodian fees............................................................... 11,959
Other ....................................................................... 2,329
-----------
Total expenses............................................................. 332,962
Less: Expenses waived or absorbed........................................... (124,551)
-----------
Total net expenses......................................................... 208,411
-----------
Investment income - net.................................................... 1,413,139
-----------
Realized and unrealized gain (loss) on investments:
Realized loss on security transactions (note 2).............................. (356,866)
Net change in unrealized appreciation or depreciation of investments......... (2,127,680)
-----------
Net loss on investments.................................................... (2,484,546)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $(1,071,407)
===========
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR MISSOURI INSURED TAX FREE FUND
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 1996 DECEMBER 31,
OPERATIONS: (UNAUDITED) 1995
------------ ------------
<S> <C> <C>
Investment income - net .......................................... $ 1,413,139 $ 2,604,120
Realized loss on investments - net ............................... (356,866) (376,865)
Net change in unrealized appreciation or
depreciation of investments .................................... (2,127,680) 6,566,685
------------ ------------
Net increase (decrease) in net assets resulting from
operations ................................................ (1,071,407) 8,793,940
------------ ------------
Distributions to shareholders from:
Investment income - net:
Class A ........................................................ (1,237,005) (2,438,655)
Class B ........................................................ (173,831) (212,725)
Class C ........................................................ (2,382) (92)
Distributions in excess of net investment income:
Class A ........................................................ (57,914) --
Class B ........................................................ (5,894) --
Class C ........................................................ (20) --
------------
Total distributions .............................................. (1,477,046) (2,651,472)
------------ ------------
Share transactions (note 4):
Proceeds from sale of shares:
Class A (note 3) ............................................... 3,753,686 10,539,741
Class B ........................................................ 3,263,388 3,109,945
Class C ........................................................ 148,103 20,010
Net asset value of shares issued in reinvestment of net investment
income distributions:
Class A ...................................................... 756,267 1,255,238
Class B ...................................................... 130,945 113,687
Class C ...................................................... 1,433 20
Payments for redemption of shares:
Class A ........................................................ (4,510,974) (5,002,357)
Class B (note 3) ............................................... (463,011) (284,260)
Class C ........................................................ (5,003) (10)
------------ ------------
Increase in net assets from share transactions ................... 3,074,834 9,752,014
------------ ------------
Total increase in net assets ................................... 526,381 15,894,482
Net assets at beginning of period ................................... 56,426,277 40,531,795
------------ ------------
Net assets at end of period (including undistributed or
(distributions in excess of) net investment income of $(63,828)
and $79, respectively) ......................................... $ 56,952,658 $ 56,426,277
============ ============
See accompanying notes to financial statements.
</TABLE>
VOYAGEUR MISSOURI INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- -------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Voyageur Missouri Insured Tax Free Fund (the 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) ("1940 Act") as
an open-end management investment company with an unlimited number of authorized
shares of beneficial interest. The Fund seeks high current income free from both
federal and state income taxes with the added safety of an insured portfolio by
investing in insured municipal bonds.
The Fund offers Class A, Class B and Class C Shares. Class A Shares are
sold with a front-end sales charge. Class B Shares may be subject to a
contingent deferred sales charge and such shares automatically convert to Class
A after eight years. Class C Shares 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 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.
The Fund is a non-diversified Fund as that term is defined in the 1940 Act.
Effective December 31, 1994, the Fund changed its fiscal year end from October
31 to December 31.
The significant accounting policies followed by the Fund 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 Fund concentrates its investments in a single state and therefore, may
have more credit risk related to the economic conditions of the state of
Missouri than a portfolio with broader geographical diversification.
FEDERAL TAXES
The Fund's policy is to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute its
income to shareholders in amounts that will avoid or minimize federal income or
excise taxes for the Fund. Net investment income and net realized gains (losses)
for the Fund may differ for financial statement and tax purposes primarily
because of losses deferred for tax purposes due to "wash sale" transactions. The
character of distributions made during the year from net investment income or
net realized gains may differ from their ultimate characterization for federal
income tax purposes. The effect on dividend distributions on certain book-to-tax
differences is reflected as excess distributions of net realized gains in the
statement of changes in net assets. Also, due to the timing of dividend
distributions, the fiscal year in which amounts are distributed may differ from
the year that the income or realized gains (losses) were recorded by the Fund.
For federal income tax purposes, at December 31, 1995 the Fund had a capital
loss carryover of $725,320 that will expire in 2002, 2003 and 2004 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 the 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 $13,557,872 and $9,062,262, respectively,
during the six months ended June 30, 1996.
(3) EXPENSES
The Fund has an investment advisory and management fee agreement with
Voyageur Fund Managers, Inc. (Voyageur) under which Voyageur manages the Fund's
assets and provides other specified services. The fee for investment management
and advisory services is payable monthly and is based on average daily net
assets of the Fund at the annual rate of .50%. In addition, the Fund will pay
most other operating expenses including directors' fees, registration fees,
printing of shareholder reports, legal and auditing services and other
miscellaneous expenses. There was no portfolio insurance expense for the Fund.
Portfolio insurance expense, if any, is recognized over the premium period.
Voyageur is obligated to pay all expenses of the Fund (excluding distribution
fees, insurance premiums on portfolio securities, taxes, interest and brokerage
commissions) which exceed 1% of average daily net assets, on an annual basis.
During the six months ended June 30, 1996, Voyageur voluntarily absorbed fees
and expenses of $70,000, excluding waivers of distribution fees.
The Fund will also pay a fee to Voyageur for acting as the Fund's
dividend-disbursing, administrative and accounting services agent. The fee is
paid monthly and is equal to the sum of $1.33 per shareholder account per month,
a fixed monthly fee ranging from $1,000 to $1,500 based on the level of the
Fund's average daily net assets and an annualized percentage of average daily
net assets at reducing rates from .11% to .02%. The Fund is also responsible for
reimbursing Voyageur's out-of-pocket expense in connection with the performance
of dividend-disbursing, administrative and accounting services.
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, the Fund is obligated to pay Fund Distributors a
monthly distribution fee at an annual rate of .25% of the Fund's average daily
net assets of the Class A Shares and 1.00% of the 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 six months ended
June 30, 1996, Fund Distributors voluntarily waived Class A distribution fees of
$38,662 and Class B distribution fees of $15,889.
Sales charges paid by Class A shareholders for the six months ended June
30, 1996 were $146,366. Of this amount, Fund Distributors received $20,794.
Contingent deferred sales charges paid by Class B shareholders for the six
months ended June 30, 1996 were $7,601.
(4) SHARE TRANSACTIONS
Transactions in shares of beneficial interest during each period were as
follows:
CLASS A
-------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
-------------------------------
Shares sold................................. 366,215 1,059,164
Shares issued for reinvested
distributions............................ 73,692 125,756
Shares redeemed............................. (443,035) (498,176)
--------- ---------
Increase (decrease) in shares outstanding... (3,128) 686,744
========= =========
CLASS B
-------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
-------------------------------
Shares sold................................. 317,591 309,066
Shares issued for reinvested
distributions............................ 12,807 11,312
Shares redeemed............................. (45,508) (28,293)
-------- -------
Increase in shares outstanding.............. 284,890 292,085
======== =======
CLASS C
---------------------------------
SIX MONTHS PERIOD FROM
ENDED NOVEMBER 11, 1995*
JUNE 30, 1996 TO DECEMBER 31,
(UNAUDITED) 1995
---------------------------------
Shares sold................................. 14,233 1,931
Shares issued for reinvested
distributions............................ 141 2
Shares redeemed............................. (474) (1)
------- ------
Increase in shares outstanding.............. 13,900 1,932
======= ======
* Commencement of operations.
(5) 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>
CLASS A
------------------------------------------------------------------
PERIOD FROM
SIX MONTHS YEAR TWO MONTHS YEAR NOVEMBER 2,
ENDED ENDED ENDED ENDED 1992(d) TO
JUNE 30, 1996 DECEMBER 31, DECEMBER 31, OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1995 1994 1994 1993
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period...................... $10.54 $ 9.27 $9.37 $10.82 $10.00
------ ------ ----- ------ ------
Operations:
Net investment income.................... .26 .52 .10 .55 .55
Net realized and unrealized
gain (loss) on investments ........... (.45) 1.29 (.11) (1.43) .89
------ ------ ----- ------ ------
Total from operations................ (.19) 1.81 (.01) (.88) 1.44
------ ------ ----- ------ ------
Distributions to shareholders:
From net investment income (a)........... (.26) (.54) (.09) (.54) (.55)
In excess of net investment income....... (.01) -- -- -- --
From net realized gains.................. -- -- -- (.03) (.07)
------ ------ ----- ------ ------
Total distributions.................... (.27) (.54) (.09) (.57) (.62)
------ ------ ----- ------ ------
Net asset value:
End of period............................ $10.08 $10.54 $9.27 $ 9.37 $10.82
====== ====== ===== ====== ======
Total investment return (b)................. (1.93)% 19.96% (0.07)% (8.28)% 14.74%
Net assets at end of period
(000's omitted)......................... $47,996 $50,211 $37,790 $37,384 $30,270
Ratios:
Ratio of expenses to
average daily net assets (f)........... .66%(e) .50% .11%(e) .15% --%
Ratio of net investment income
to average daily net assets............ 5.03%(e) 5.25 % 6.00%(e) 5.39% 4.82%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (c).................... 1.07%(e) 1.07% 1.12%(e) 1.13% 1.25%(e)
Net investment income........... 4.62%(e) 4.68% 4.99%(e) 4.41% 3.57%(e)
Portfolio turnover rate (excluding
short-term securities)................... 15.99% 31.69% 8.85% 32.02% 76.51%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
CLASS B CLASS C
--------------------------------------------------- -----------------------
PERIOD FROM SIX MONTHS PERIOD FROM
SIX MONTHS YEAR TWO MONTHS MARCH 12, ENDED NOVEMBER 11,
ENDED ENDED ENDED 1994(d) TO JUNE 30, 1995(d) TO
JUNE 30, 1996 DECEMBER 31, DECEMBER 31, OCTOBER 31, 1996 DECEMBER 31,
(UNAUDITED) 1995 1994 1994 (UNAUDITED) 1995
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period................. $10.54 $ 9.27 $9.37 $10.30 $10.54 $10.36
------ ------ ----- ------ ------ ------
Operations:
Net investment income............... .23 .48 .08 .33 .21 .06
Net realized and unrealized
gain (loss) on investments ...... (.45) 1.28 (.10) (.94) (.44) .17
------ ------ ----- ------ ------ ------
Total from operations........... (.22) 1.76 (.02) (.61) (.23) .23
------ ------ ----- ------ ------ ------
Distributions to shareholders:
From net investment income (a)...... (.23) (.49) (.08) (.32) (.22) (.05)
In excess of net investment income.. (.01) -- -- -- -- --
------ ------ ----- ------ ------ ------
Total distributions............. (.24) (.49) (.08) (.32) (.22) (.05)
------ ------ ----- ------ ------ ------
Net asset value:
End of period....................... $10.08 $10.54 $9.27 $ 9.37 $10.09 $10.54
====== ====== ===== ====== ====== ======
Total investment return (b)............ (2.08)% 19.18% (0.14)% (6.16)% (2.28)% 2.24%
Net assets at end of period
(000's omitted)..................... $8,797 $6,195 $2,742 $1,701 $160 $20
Ratios:
Ratio of expenses to
average daily net assets (f)...... 1.16%(e) .97% .60%(e) .49%(e) 1.57%(e) 1.22%(e)
Ratio of net investment income
to average daily net assets....... 4.53%(e) 4.70% 5.32%(e) 4.89%(e) 4.04%(e) 4.09%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (c)............... 1.82%(e) 1.81% 1.84%(e) 1.83%(e) 1.82%(e) 1.55%(e)
Net investment income...... 3.87%(e) 3.86% 4.08%(e) 3.55%(e) 3.79%(e) 3.76%(e)
Portfolio turnover rate (excluding
short-term securities).............. 15.99% 31.69% 8.85% 32.02% 15.99% 31.69%
</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 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 the
Fund's average daily net assets for Class A Shares and 1.00% of the Fund's
average daily net assets for Class B and Class C Shares.
(d) Commencement of operations.
(e) Adjusted to an annual basis.
(f) Beginning in the year ended December 31, 1995, the expense ratio reflects
the effect of gross expense attributable to earnings credits on uninvested
cash balances received by the Fund. Prior period expense ratios have not
been adjusted.
<TABLE>
<CAPTION>
VOYAGEUR MISSOURI INSURED 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.)
MISSOURI MUNICIPAL BONDS (101.4%):
ESCROWED WITH U.S. GOVERNMENT BONDS (0.7%):
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
$1,225 Greene County Single Family Mortgage Revenue, Zero Coupon
(Private Mortgage Insurance).................................... 6.10%(d) 03-01-16 $ 378,770
-----------
GENERAL OBLIGATION (21.3%):
-------------------------------------------------------------------------------------------------------
1,775 Clark County School District (FSA Insured)......................... 5.75 03-01-15 1,775,444
500 Greene County School District (MBIA Insured)....................... 5.70 03-01-15 497,685
1,000 Mehlville School District #9 (MBIA Insured)........................ 6.00 02-15-13 1,016,730
1,000 St. Charles (FSA Insured).......................................... 5.75 03-01-15 1,000,280
1,250 St. Charles School District (FGIC Insured)......................... 6.50 02-01-14 1,324,088
1,490 St. Louis County School District #8 (MBIA Insured)................. 5.60 02-15-15 1,466,219
2,000 Springfield School District (MBIA Insured)......................... 5.25 03-01-11 1,922,740
1,235 Troy School District #3 Lincoln County (MBIA Insured).............. 6.10 03-01-14 1,255,625
1,100 Union Reorganized School District (FGIC Insured)................... 5.75 03-01-13 1,101,705
750 West Platte School District (MBIA Insured)......................... 5.85 03-01-15 752,910
-----------
12,113,426
-----------
UTILITIES (19.0%):
-------------------------------------------------------------------------------------------------------
1,500 Cape Girardeau Waterworks System (FGIC Insured).................. 5.00 03-01-12 1,384,905
600 Liberty Sewer (MBIA Insured)..................................... 6.00 02-01-08 637,734
1,500 Liberty Sewer (MBIA Insured)..................................... 6.15 02-01-15 1,547,010
920 Moberly Water & Sewer Systems (FGIC Insured)..................... 5.20 08-15-15 858,884
2,200 St. Joseph Environmental Pollution Control Revenue
(AMBAC Insured)............................................... 5.85 02-01-13 2,207,458
2,000 Sikeston Electric Revenue (MBIA Insured)......................... 6.25 06-01-02 2,169,200
1,000 Sikeston Electric Revenue (MBIA Insured)......................... 6.00 06-01-13 1,032,220
1,000 Springfield Waterworks (MBIA Insured)............................ 5.50 05-01-19 955,760
-----------
10,793,171
-----------
INDUSTRIAL (5.1%):
-------------------------------------------------------------------------------------------------------
1,000 Kansas City Lease Revenue Muehlebach Hotel (FSA Insured)......... 5.90 12-01-18 997,350
1,850 St. Louis Municipal Finance Corp Leasehold Revenue
(FGIC Insured)................................................ 6.25 02-15-12 1,924,000
-----------
2,921,350
-----------
HEALTH CARE (21.0%):
-------------------------------------------------------------------------------------------------------
1,000 Barnes Jewish/Christian Health Services (AMBAC Insured).......... 5.25 05-15-21 906,530
1,000 Cape Girardeau SE Missouri Hospital (MBIA Insured)............... 5.25 06-01-16 933,590
1,980 Jackson County St. Joseph Hospital (MBIA Insured)................ 6.50 07-01-12 2,086,801
2,000 Jackson County St. Mary's Hospital (MBIA Insured)................ 5.75 07-01-24 1,951,100
2,500 Missouri Children's Hospital (MBIA Insured)...................... 5.65 05-15-23 2,406,325
1,000 Missouri State Health & Education Facility (Health Midwest)
(MBIA Insured)............................................... 6.25 02-15-22 1,016,240
1,250 Missouri State Health & Education Facility (Heartland)
(AMBAC Insured).............................................. 6.35 11-15-17 1,286,525
1,000 Missouri State Health & Education Facility (St. Luke's)
(MBIA Insured)............................................... 5.13 11-15-19 895,000
500 Missouri State Health & Education Facility SSM (MBIA Insured).... 6.40 06-01-10 541,395
-----------
12,023,506
-----------
HOUSING (13.5%):
-------------------------------------------------------------------------------------------------------
265 Missouri Single Family Housing AMT (GNMA Insured)................ 7.20(e) 12-01-17 280,397
535 Missouri Single Family Housing AMT (GNMA Insured)................ 7.25(e) 12-01-20 567,046
2,295 Missouri Single Family Housing AMT (FNMA/GNMA Insured)........... 7.25(e) 09-01-26 2,481,469
2,000 Missouri Single Family Housing AMT (GNMA Insured)............... 7.20(e) 09-01-26 2,152,500
2,000 Missouri Housing Development AMT (GNMA Insured).................. 7.55(e) 09-01-27 2,208,500
-----------
7,689,912
-----------
EDUCATION (8.2%):
-------------------------------------------------------------------------------------------------------
1,000 Francis Howell School District (FSA Insured)..................... 5.35 03-01-10 969,770
1,000 Missouri Health & Education Central Missouri State University
(AMBAC Insured)............................................... 5.75 10-01-25 975,040
1,000 St. Louis Health & Education University Revenue
(AMBAC Insured)............................................... 4.75 10-01-16 858,750
2,000 University of Puerto Rico Revenue (MBIA Insured)................. 5.25 06-01-25 1,845,000
-----------
4,648,560
-----------
OTHER REVENUE (9.4%):
-------------------------------------------------------------------------------------------------------
2,240 Kansas City Municipal Assistance Bartle Convention Center
(MBIA Insured)................................................ 5.60 04-15-16 2,182,320
1,000 Kansas City Municipal Assistance Corp. (MBIA Insured)............ 5.00 04-15-20 887,150
2,265 Missouri State Environmental-Branson (FSA Insured)............... 6.05 07-01-16 2,288,669
-----------
5,358,139
-----------
TRANSPORTATION (3.2%):
-------------------------------------------------------------------------------------------------------
1,675 Kansas City Airport Revenue (FSA Insured)........................ 6.88 09-01-14 1,810,156
-----------
TOTAL MUNICIPAL BONDS (cost: $57,339,900) 57,736,990
-----------
SHORT-TERM SECURITIES (0.7%):
-------------------------------------------------------------------------------------------------------
190 Dreyfus Investment Tax-Exempt Money Market Fund.................. 3.13 (f) 190,000
235 Nuveen Investment Tax Free Fund.................................. 3.10 (f) 235,000
-----------
TOTAL SHORT-TERM SECURITIES (cost: $425,000) 425,000
-----------
TOTAL INVESTMENTS IN SECURITIES (cost: $57,764,900) (c) $58,161,990
===========
</TABLE>
See accompanying notes to investments in securities.
VOYAGEUR MISSOURI INSURED TAX FREE FUND
NOTES TO INVESTMENTS IN SECURITIES (UNAUDITED)
- --------------------------------------------------------------------------------
(a) Securities are valued by procedures described in note 1 to the financial
statements.
(b) All investments are rated 100% Aaa/AAA (unaudited).
(c) The cost of securities for federal income tax purposes at June 30, 1996 is
$57,789,261. The aggregate gross unrealized appreciation and depreciation
of securities based on this cost are as follows:
Gross Gross Net
Unrealized Unrealized Unrealized
Appreciation Depreciation Appreciation
------------ ------------ ------------
$1,002,114 $(629,385) $372,729
(d) The interest rate disclosed for zero coupon issues represents the effective
yield on the date of acquisition.
(e) Security subject to the Alternative Minimum Tax.
(f) Dividend yields change daily to reflect current market conditions. Rate
shown is quoted yield as of June 30, 1996.
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
[LOGO] VOYAGEUR ON CALL (TM)
[LINE DRAWING: TELEPHONE RINGING]
800.545.3863
We invite you to use the Voyageur interactive voice response system, Voyageur On
Call (TM) (800.545.3863). The system is designed to give you information about
the Fund(s) in your account. It can also provide price and yield information for
the Fund(s). 24-hour access available to Touch Tone telephones only.
[LOGO] Voyageur
Your tax sensitive investment manager
90 South Seventh Street, Suite 4400
Minneapolis, Minnesota 55402-4115
