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VOYAGEUR
YOUR TAX SENSITIVE INVESTMENT MANAGER
UTAH 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 CallTM --
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 Utah Tax Free Fund
VOYAGEUR UTAH TAX FREE FUND
[PHOTO] ANDREW M. McCULLAGH, JR. IS THE SENIOR MUNICIPAL BOND MANAGER FOR THE
VOYAGEUR UTAH TAX FREE FUND. MR. McCULLAGH HAS MORE THAN 23 YEARS OF
INVESTMENT INDUSTRY EXPERIENCE.
For the six months ended June 30, 1996, the total return at net asset value
(NAV) for the Voyageur Utah Tax Free Fund's Class A shares was -1.29%.* Within
the Fund, we remained committed to purchasing municipal bonds with high credit
ratings, emphasizing securities in the general obligation (GO) and education
sectors.
AREAS OF OPPORTUNITY
During the past six months, we continued to search for areas or sectors where we
could add value to the Fund's portfolio. 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 this 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 continue to search for opportunites 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 eight years.
OUTLOOK FOR THE MUNICIPAL MARKET
Municipal bond issuance in Utah continues to be limited, causing us to exercise
more patience in our selective approach to municipal bond investing. In the
Voyageur Utah Tax Free Fund, we added income and dampened volatility by
purchasing bonds in the housing sectors. Housing bonds have historically
exhibited less price volatility and offer our shareholders the benefits of
additional yield.
In the United States, we expect to see the moderate growth with moderate
inflation economic environment that we are currently enjoying to continue
through the remainder of the year. Our outlook for the municipal market
continues to be favorable, and we are maintaining our forecast for 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.
<PAGE>
<TABLE>
<CAPTION>
VOYAGEUR UTAH TAX FREE FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30, 1996
- -------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C>
Investments in securities, at market value (note 1)
(identified cost, $4,342,918)................................................ $ 4,392,253
Accrued interest receivable..................................................... 57,673
------------
Total assets................................................................. 4,449,926
------------
LIABILITIES
Bank overdraft.................................................................. 8,796
Dividends payable to shareholders............................................... 5,090
Other accrued expenses.......................................................... 15,940
------------
Total liabilities............................................................ 29,826
------------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES..................................... $ 4,420,100
============
Represented by:
Paid-in capital (note 1)..................................................... $ 4,473,300
Distributions in excess of net investment income............................. (2,912)
Accumulated net realized loss on investments (note 1)........................ (99,623)
Unrealized appreciation of investments....................................... 49,335
------------
TOTAL NET ASSETS........................................................... $ 4,420,100
============
Net assets applicable to outstanding Class A Shares............................. $ 4,037,329
============
Net assets applicable to outstanding Class B Shares............................. $ 382,771
============
SHARES OUTSTANDING AND NET ASSET VALUE PER SHARE
Class A - Shares of beneficial interest outstanding: 380,302 (note 4)........ $10.62
======
Class B - Shares of beneficial interest outstanding: 36,052 (note 4)......... $10.62
======
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
VOYAGEUR UTAH TAX FREE FUND
STATEMENT OF OPERATIONS (UNAUDITED) SIX MONTHS ENDED JUNE 30, 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Investment income:
Interest..................................................................... $ 128,144
---------
Expenses (note 3):
Investment advisory and management fee....................................... 11,073
Dividend-disbursing, administrative and accounting services fee.............. 10,986
Printing, postage and supplies............................................... 601
Audit and accounting fees.................................................... 4,099
Legal fees................................................................... 131
Distribution fees - Class A.................................................. 5,071
Distribution fees - Class B.................................................. 1,855
Directors' fees.............................................................. 138
Registration fees............................................................ 377
Custodian fees............................................................... 5,924
Other........................................................................ 342
---------
Total expenses............................................................. 40,597
Less: Expenses waived or absorbed........................................... (24,930)
---------
Total net expenses......................................................... 15,667
---------
Investment income - net.................................................... 112,477
---------
Realized and unrealized gain (loss) on investments:
Realized loss on security transactions....................................... (28,012)
Net change in unrealized appreciation or depreciation of investments......... (139,372)
---------
Net loss on investments.................................................... (167,384)
---------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS....................... $ (54,907)
==========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
VOYAGEUR UTAH TAX FREE FUND
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
<S> <C> <C>
Operations:
Investment income - net.................................... $ 112,477 $ 228,032
Realized loss on investments - net......................... (28,012) (59,790)
Net change in unrealized appreciation or
depreciation of investments.............................. (139,372) 547,395
---------- ----------
Net increase (decrease) in net assets
resulting from operations............................ (54,907) 715,367
---------- ----------
Distributions to shareholders from:
Investment income - net:
Class A.................................................. (106,649) (224,129)
Class B.................................................. (8,583) (5,193)
Excess distributions of net investment income:
Class A . . ............................................. (3,041) --
---------- ----------
Total distributions ................................... (118,273) (229,322)
---------- ----------
Share transactions (note 4):
Proceeds from sale of shares:
Class A (note 3)......................................... 166,439 443,991
Class B.................................................. 25,000 346,034
Net asset value of shares issued in reinvestment of net investment income
distributions:
Class A................................................ 52,254 90,611
Class B................................................ 9,490 3,787
Payments for redemption of shares:
Class A.................................................. (164,008) (595,116)
Class B.................................................. -- (10)
---------- ----------
Increase in net assets from share transactions............. 89,175 289,297
---------- ----------
Total increase (decrease) in net assets.................. (84,005) 775,612
Net assets at beginning of period............................... 4,504,105 3,728,493
---------- ----------
Net assets at end of period (including undistributed or
(distributions in excess of) net investment income of
$(2,912) and $2,884, respectively)....................... $4,420,100 $4,504,105
========== ==========
</TABLE>
See accompanying notes to financial statements.
VOYAGEUR UTAH TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Voyageur Utah 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) 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 by investing in investment grade 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. There were no
Class C Shares outstanding as of June 30, 1996. 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 registered as a non-diversified Fund. 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 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.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS
Delivery and payment for securities which have been purchased by the Fund
on a forward commitment or when-issued basis can take place up to a month or
more after the transaction date. During this period, such securities are subject
to market fluctuations and the portfolio maintains, in a segregated account with
its custodian, assets with a market value equal to or greater than the amount of
its purchase commitments.
FEDERAL TAXES
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) fothe
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 capital loss
carryovers of $71,611 that will expire in 2001, 2002, 2003 and 2004 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 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 $625,642 and $548,027, 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 the 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. 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 absorbed
$11,532 pursuant to the 1% expense limitation and, excluding waiver of
distribution fees, voluntarily absorbed fees and expenses of $8,468.
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 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
$4,463 and Class B distribution fees of $467.
Sales charges paid by Class A shareholders for the six months ended June
30, 1996 were $4,080. Of this amount, Fund Distributors received $739.
(4) SHARE TRANSACTIONS
Transactions in shares of beneficial interest during each period were as
follows:
<TABLE>
<CAPTION>
A SHARES B SHARES
------------------------------------ ------------------------------------
SIX MONTHS YEAR SIX MONTHS PERIOD FROM
ENDED ENDED ENDED MAY 27, 1995* TO
JUNE 30, 1996 DECEMBER 31, JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995 (UNAUDITED) 1995
--------------- -------------------- ------------------------------------
<S> <C> <C> <C> <C>
Shares sold......................... 15,696 43,191 2,314 32,505
Shares issued for
reinvested distributions......... 4,848 8,680 880 354
Shares redeemed..................... (15,502) (57,218) -- (1)
--------- ----------- ------------ ------------
Increase (decrease) in shares
outstanding...................... 5,042 (5,347) 3,194 32,858
========= =========== ============ ============
</TABLE>
* 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>
A SHARES
----------------------------------------------------------------------------------------
PERIOD FROM
SIX MONTHS YEAR TWO MONTHS YEAR YEAR OCTOBER 5,
ENDED ENDED ENDED ENDED ENDED 1992(D) TO
JUNE 30, 1996 DECEMBER 31, DECEMBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1995 1994 1994 1993 1992
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value:
Beginning of period.............. $11.04 $9.80 $9.94 $11.07 $10.00 $10.00
------ ----- ----- ------ ------ ------
Operations:
Net investment income............ .28 .59 .10 .60 .65 --
Net realized and unrealized
gain (loss) on investments ... (.41) 1.24 (.15) (1.07) 1.07 --
------ ----- ----- ------ ------ ------
Total from operations........ (.13) 1.83 (.05) (.47) 1.72 --
------ ----- ----- ------ ------ ------
Distributions to shareholders:
From net investment income (a)... (.28) (.59) (.09) (.60) (.65) --
In excess of net invesment income (.01) -- -- -- -- --
From net realized gains.......... -- -- -- (.06) -- --
------ ----- ----- ------ ------ ------
Total distributions............ (.29) (.59) (.09) (.66) (.65) --
------ ----- ----- ------ ------ ------
Net asset value:
End of period.................... $10.62 $11.04 $9.80 $9.94 $11.07 $10.00
====== ====== ===== ===== ====== ======
Total investment return (b)......... (1.29)% 19.06% (0.41)% (4.50)% 17.54% --%
Net assets at end of period
(000's omitted).................. $4,037 $4,142 $3,728 $4,054 $3,913 $19
Ratios:
Ratio of expenses to
average daily net assets (f)... .65%(e) .38% .11%(e) .10% --% --%
Ratio of net investment income
to average daily net assets....5.14%(e) 5.51% 6.38%(e) 5.64% 5.65% --%
Assuming no voluntary waivers
and reimbursements:
Expenses (c).............1.25%(e) 1.25% 1.14%(e) 1.25% 1.25% --%
Net investment income....4.54%(e) 4.64% 5.35%(e) 4.49% 4.40% --%
Portfolio turnover rate (excluding
short-term securities)........... 12.40% 35.28% --% 2.77% 44.54% --%
</TABLE>
See accompanying notes to Financial Highlights.
<TABLE>
<CAPTION>
B SHARES
------------------------------
PERIOD FROM
SIX MONTHS MAY 27,
ENDED 1995(D) TO
JUNE 30, 1996 DECEMBER 31,
(UNAUDITED) 1995
<S> <C> <C>
Net asset value:
Beginning of period.......................................... $11.04 $10.63
------ ------
Operations:
Net investment income........................................ .23 .30
Net realized and unrealized
gain (loss) on investments ............................... (.40) .39
------ ------
Total from operations.................................... (.17) .69
------ ------
Distributions to shareholders:
From net investment income (a)............................... (.25) (.28)
------ ------
Net asset value:
End of period................................................ $10.62 $11.04
====== ======
Total investment return (b)..................................... (1.65)% 6.60%
Net assets at end of period
(000's omitted).............................................. $383 $363
Ratios:
Ratio of expenses to
average daily net assets (f)............................... 1.37%(e) .92%(e)
Ratio of net investment income
to average daily net assets................................ 4.41%(e) 4.74%(e)
Assuming no voluntary waivers
and reimbursements:
Expenses (c)......................................... 2.00%(e) 2.00%(e)
Net investment income................................ 3.78%(e) 3.66%(e)
Portfolio turnover rate (excluding
short-term securities)....................................... 12.40% 35.28%
</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 December 31, 1995, $.01 per share of the
distributions from net investment income was subject to state income tax
for the Fund's Class A Shares.
(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 each Fund (excluding distribution fees, insurance premiums on
portfolio securities, taxes, interest and brokerage commissions) is 1% of
average daily net assets. The maximum distribution fee is .25% of each
Fund's average daily net assets for Class A Shares and 1.00% of each Fund's
average daily net assets for Class B and Class C Shares.
(d) Commencement of operations.
(e) Adjusted to an annual basis.
(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 Fund. Prior period expense ratios have not
been adjusted.
<TABLE>
<CAPTION>
VOYAGEUR UTAH 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 (99.4%):
GENERAL OBLIGATION (22.9%):
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 100 Cache County School District (AMBAC Insured)........................ 5.90% 06-15-13 $ 100,895
100 Davis County School District (MBIA Insured)......................... 5.80 06-01-08 102,239
100 Iron County School District (MBIA Insured).......................... 6.50 01-15-13 106,127
200 Nebo Utah School District .......................................... 6.00 06-15-18 200,496
100 Provo City Independent School District.............................. 6.25 06-15-13 102,612
100 Salt Lake County Service Area #1.................................... 6.00 12-15-12 100,228
200 Sandy City UTGO..................................................... 5.50 12-15-11 197,740
100 Weber County (FGIC Insured)......................................... 5.63 01-15-11 99,968
------------
1,010,305
UTILITIES (12.0%):
------------------------------------------------------------------------------------------------------
250 Provo City Energy System Revenue (MBIA Insured).................... 5.75 05-15-14 247,915
100 St. George Washington County Water & Sewer (AMBAC Insured)......... 5.38 06-01-16 95,468
100 Salt Lake City Water Conservation (AMBAC Insured).................. 5.30 10-01-13 95,530
100 Puerto Rico Electric Power Authority Revenue....................... 5.50 07-01-25 93,635
-----------
532,548
TRANSPORTATION (5.6%):
------------------------------------------------------------------------------------------------------
250 Salt Lake City Airport Revenue (FGIC Insured).................... 5.88 12-01-18 248,200
---------
INDUSTRIAL (4.4%):
------------------------------------------------------------------------------------------------------
200 Emery County Pollution Control (AMBAC Insured)................... 5.65 11-01-23 192,974
----------
HOUSING (14.6%):
------------------------------------------------------------------------------------------------------
100 Salt Lake City Multifamily Housing Authority..................... 6.00 04-01-25 97,872
200 Utah Housing Finance Authority Multifamily Cottonwood Project
(FNMA Insured)............................................... 6.30 07-01-15 203,562
160 Utah Housing Finance Authority Single Family Mortgage Revenue
Series 1992D-1................................................ 6.70 07-01-12 165,669
175 Utah Housing Finance Authority Single Family Mortgage Revenue
1994C......................................................... 6.30 07-01-16 177,786
----------
644,889
HEALTH CARE (3.9%)
------------------------------------------------------------------------------------------------------
200 Murray Utah Hospital Revenue (MBIA Insured)...................... 5.00 05-15-22 173,406
----------
EDUCATION (21.2%):
------------------------------------------------------------------------------------------------------
150 Southern Utah University Board of Regents (AMBAC Insured)........ 6.35 05-01-10 159,261
100 Utah State University Board of Regents........................... 5.50 04-01-11 98,897
100 Utah State University Board of Regents (AMBAC Insured)........... 6.30 06-01-12 103,911
320 Utah State University Board of Regents (MBIA Insured)............ 5.70 11-01-11 318,646
150 Utah State University Revenue (MBIA Insured)..................... 6.15 12-01-14 153,296
100 Weber State University Board of Regents (MBIA Insured)........... 6.25 04-01-10 103,353
----------
937,364
CERTIFICATES OF PARTICIPATION (14.8%):
------------------------------------------------------------------------------------------------------
100 Salt Lake City Municipal Building Authority Lease
Revenue Series A.............................................. 6.38 10-01-12 103,542
100 Utah State Building Authority Lease Revenue...................... 5.75 08-15-08 100,910
200 Weber County Utah Municipal Building Authority Lease Revenue..... 5.75 12-15-19 193,670
250 West Valley City Municipal Building Authority Lease Revenue
(MBIA Insured)................................................ 6.00 01-15-10 254,445
-----------
652,567
TOTAL INVESTMENTS IN SECURITIES (cost: $4,342,918) (c) $4,392,253
==========
</TABLE>
See accompanying notes to investments in securities.
NOTES TO INVESTMENTS IN SECURITIES (UNAUDITED)
- --------------------------------------------------------------------------------
(a) Securities are valued by procedures described in note 1 to the financial
statements.
(b) Investments in bonds, by rating category (unaudited) as a percentage of
total bonds, are as follows:
Aaa/AAA Aa/AA A/A Total
74% 15% 11% 100%
(c) Also represents the cost of securities for federal income tax purposes and
the aggregate gross unrealized appreciation and depreciation in securities
based on these costs were as follows:
Gross Gross Net
Unrealized Unrealized Unrealized
Appreciation (Depreciation) Appreciation
$79,051 $(29,716) $49,335
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
