<PAGE>
For Tax-Exempt Income
DELAWARE-VOYAGEUR
Missouri Insured Fund
Tax-Free Iowa Fund
Tax-Free Wisconsin Fund
Tax-Free Kansas Fund
1997
Semi-Annual Report
professional management
service and guidance
goals
(ILLUSTRATION SHOWING AIRPORT)
DELAWARE
GROUP
=======
<PAGE>
professional management
professional management
More Than 68 Years Of Investment Experience has taught us that disciplined
strategies and prudent risk management are a sound approach to any market
environment.
goals
goals
Whatever Your Goals, the years ahead will be shaped by choices you make today.
Delaware offers many options that can be an appropriate part of a sound
investment plan.
service and guidance
service and guidance
Delaware Believes That The Guidance of a professional financial adviser is
vital to your long-term success. We are committed to providing you and your
adviser with the highest quality information and service.
<PAGE>
- --------------------------------------------------------------------------------
JULY 15, 1997
Dear Shareholder:
I am pleased to present the first shareholder report for four of our single-st
ate, tax-exempt funds since the Voyageur funds joined the Delaware family on
April 30, 1997.
On behalf of all of us here at Delaware, I welcome you to an
organization of experienced financial professionals dedicated to helping
you reach your investment goals. We have managed municipal bond investments
for more than 20 years and pioneered the concept of single-state, tax-exempt
funds.
I am delighted to report that during this transition period, each
Fund's performance was competitive with its unmanaged benchmark, as shown on
page 9. The Tax-Free Iowa Fund provided particularly strong results.
Elizabeth H. Howell, the Funds' portfolio manager, oversees all four
portfolios from her office in Minneapolis.
We view the municipal bond market's long-term prospects as very
attractive, particularly in a region as diverse as America's heartland.
Municipal bond prices have generally been stronger than U.S. Treasuries
during 1997.
As our nation's leaders grapple with tax issues and states take on a
greater fiscal responsibility for managing social and public works programs,
we believe it will become more important than ever to consider the impact of
taxes on the performance of an investment portfolio.
In our opinion, the dividend income from municipal bond funds and for
shareholders who elect to reinvest, the tax-free compounding of dividends
over time has the potential to help investors reach their financial goals. In
addition to providing income generally free from federal taxes, municipal
securities have the added benefit of being exempt from state high income
taxes, which can be as much as 9.9% in some Plains states.
On the pages that follow, Ms. Howell reviews each Fund's
performance and outlines her approach for the coming months. We look forward
to reporting to you again in 1998 and serving your needs for many years to
come.
Sincerely,
/s/ Wayne A. Stork
- ------------------
Wayne A. Stork
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
1
1997 semi-annual report
<PAGE>
Your Funds' Portfolio Manager
Prior to joining the Delaware-Voyageur family, Elizabeth H. Howell had managed
municipal bond funds at Voyageur Asset Management for six years. She has had
more than 13 years experience as a securities analyst and portfolio manager. Ms.
Howell has an MBA from Babson College. On May 1, 1997, Ms. Howell succeeded
Steven P. Eldredge as portfolio manager of Tax-Free Iowa and Tax-Free Wisconsin
Funds.
ELIZABETH H. HOWELL
Performance Review
Delaware-Voyageur municipal bond funds in four Plains states provided
attractive total returns during the first half of fiscal 1997 despite
substantial interest rate volatility and renewed efforts in Washington to cut
income taxes.
Nationwide, our country's output of goods and services grew at a
robust pace in the first quarter. This prompted the Federal Reserve to raise
its target for short-term interest rates by a modest 25 basis points (0.25%) to
5.5% in an effort to forestall inflation.
BY MANAGING DURATION AS MARKET CONDITIONS WARRANTED, WE SOUGHT TO MAXIMIZE
EACH FUND'S INCOME AND TOTAL RETURN POTENTIAL.
As the second calendar quarter of 1997 progressed, the bond market
welcomed news of possible slower U.S. economic growth. By the end of June, long-
term U.S. Treasury bonds yielded 6.78%, compared to more than 7% just a few
months earlier.
In managing each Fund's portfolio, we seek to achieve good structure
- - a prudent combination of average coupon, call date, and effective maturity
that represent the mathematical underpinnings of each portfolio. By managing
duration as market conditions warranted, we sought to maximize each Fund's
income and total return potential.
2
1997 semi-annual report
<PAGE>
MISSOURI INSURED FUND
STRATEGIC POSITIONING
AND OUTLOOK
Missouri Insured Fund provided a total return of +3.24% for the six months
ended June 30, 1997, (for A class shares plus reinvested dividends at net asset
value). This outpaced the return of the unmanaged Lehman Brothers Insured Bond
Index even though the Fund's duration (sensitivity to interest rates) was about
the same as the index.
In our opinion, the Fund offered a very favorable risk profile
relative to the return we generated. The Insured Fund invests exclusively in
bonds that are rated AAA by Moody's Investors Services or Standard & Poor's
and insured by a municipal bond insurance company. Consequently, the
portfolio is comprised of bonds of the highest credit quality available.
As of June 30, about 17.5% of the Fund's net assets and 19.1% of the
Fund income were subject to the alternative minimum tax (AMT). Of course, only
some taxpayers are subject to this federal levy. Generally, we believe that the
superior income potential, and favorable risk profile offered by certain AMT
bonds warrant their inclusion in your Fund's portfolio.
Betweeen December and June 30, we increased our allocation to housing
bonds from 2% to nearly 17% to increase the Fund's income potential. Housing
bonds, because of the risk of prepayment from underlying mortgages, tend to
yield more than bonds with similar ratings and maturities from other sectors.
In addition to searching for housing bonds, we were looking for, and
holding, bonds selling at less than their face value (discount bonds), bonds
with good call
MISSOURI INSURED FUND
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
- --------------------------------------------------------------------------------
June 30, 1997
Hospitals 22.7%
Certificates of Participation 1.7%
Power Authority 3.4%
Higher Education 6.5%
General Obligation 14.3%
Housing 16.9%
Water/Sewer 6.2%
Transportation 3.2%
Pre-Refunded Bonds 10.2%
Industrial Development 1.7%
Utility 3.8%
Other Revenue Bonds 6.1%
Cash 3.3%
APPROXIMATELY 19.1% OF THE INCOME GENERATED BY MISSOURI INSURED FUND FOR THE
SIX MONTHS ENDED JUNE 30, 1997, WAS SUBJECT TO THE ALTERNATIVE MINIMUM TAX.
- ----------------------------------------------------
Average Effective Maturity 10.3 years
Average Effective Duration 7.1 years
Average Quality AAA
Thirty-Day Current SEC Yield* 4.41%
* FOR CLASS A SHARES BASED ON SECURITIES AND EXCHANGE COMMISSION GUIDELINES.
SEC YIELDS FOR B AND C CLASSES WERE 3.91% AND 3.69% RESPECTIVELY.
3
1997 semi-annual report
<PAGE>
protection features and long maturities. We believe this
enabled us to do well relative to both our benchmark and our peers despite a
volatile interest rate environment during the first half of 1997. Another
positive factor contributing to our performance was that the supply of new
Missouri municipal securities fell more than 25% during the period (from $1.7
billion to $1.3 billion) while investor demand remained steady, leading to
higher bond prices.
With an annualized economic growth rate of 4.4%, we believe Missouri
exhibits credit characteristics attractive to income-oriented investors.
Missouri's general obligation bonds currently carry a quality rating of AAA,
the highest available. The state had a budget surplus of $335 million for its
1996 fiscal year on revenues of approximately $5.4 billion.
Missouri's primary economic sectors are services, manufacturing and
agriculture. One development that could provide job growth for the St. Louis
area (and thus a stable tax base) in the years ahead is Boeing Co.'s
acquisition of Missouri-based McDonnell Douglas, as the Seattle commercial jet
maker has a substantial multiyear backlog of orders to fulfill.
TAX-FREE IOWA FUND
STRATEGIC POSITIONING
AND OUTLOOK
Tax-Free Iowa Fund provided a robust total return of +3.59% for the six
months ended June 30, 1997, (for A class shares at net asset value with
dividends reinvested). This outpaced the return of the unmanaged Lehman
Brothers Municipal Bond Index.
In our opinion, the Iowa economy is healthy, and the financial
condition of many Iowa municipalities is good. The state has a 5.1%
annualized growth rate in per capita income that is the 6th highest in the
nation. The largest source of personal income for Iowans is manufacturing,
followed by services, retail/wholesale trade and government. Of course, the
leading industry is agriculture. Some 24% of America's pork and 4% of the
nation's beef are raised in Iowa. Iowa is also first in corn, soybean and grain
production.
From a municipal bond perspective, we believe Iowa is unique. The
credit quality of most municipalities is excellent. However, only a few
select issuers in the state offer bonds that are exempt from both federal and
state income taxes - the type of securities we seek for your Fund's
portfolio.
4
1997 semi-annual report
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TAX-FREE IOWA FUND
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
- -----------------------------------------
June 30, 1997
Hospitals* 3.1%
Power Authority* 5.3%
Other Puerto Rico Bonds 13.4%
Utility* 5%
Pre-Refunded Bonds* 4.5%
Transportation* 11.6%
Housing* 2.5%
Water/Sewer 21.6%
Higher Education 7.1%
Cash 1.4%
Industrial Development 24.3%
* U.S. TERRITORIAL BONDS OF PUERTO RICO, GUAM OR U.S. VIRGIN ISLANDS COMPRISE
ENTIRE CATEGORY. APPROXIMATELY 6.3% OF THE INCOME GENERATED BY TAX-FREE IOWA
FUND FOR THE SIX MONTHS ENDED JUNE 30, 1997, WAS SUBJECT TO THE ALTERNATIVE
MINIMUM TAX.
- --------------------------------------------------
Average Effective Maturity 13.7 years
Average Effective Duration 8.6 years
Average Quality AA
Thirty-Day Current SEC Yield* 4.39%
* FOR CLASS A SHARES BASED ON SECURITIES AND EXCHANGE COMMISSION GUIDELINES.
SEC YIELDS FOR B AND C CLASSES WERE 3.79% AND 3.69% RESPECTIVELY.
In addition, so far in 1997, the amount of new municipal bonds issued in the
state has fallen to just $620 million, down 17% from a year ago, according to
THE BOND BUYER, a trade publication.
As a result, the Fund has large holdings in two key issues, the Iowa
Finance Authority Underground Storage Tank (21.6% of net assets) and the Iowa
Finance Authority State Revolving Fund Program (18% of net assets). Both of
these issues are investment grade and contributed positively to performance
during the first half of fiscal 1997.
Limited supply of double tax-exempt bonds in Iowa has prompted us to
invest a substantial portion of the Fund's net assets (47.8% as of June 30)
in tax-exempt territorial bond issues of Puerto Rico, Guam and the U.S.
Virgin Islands. Income from these bonds is not taxable to Iowa residents or
residents of any U.S. state. Territorial bonds provide an element of
diversification for the Fund and help us meet our income, duration and yield
objectives.
As opportunities arise, we will prudently raise our positioning in
Iowa securities when we can find attractively priced securities that are
exempt from both state and federal income taxes. Investor demand is likely to
remain high, however, as individual income taxes rates in the state range as
high as 9.98%.
5
1997 semi-annual report
<PAGE>
TAX-FREE WISCONSIN FUND
STRATEGIC POSITIONING
AND OUTLOOK
For the six months ended June 30, 1997, Tax-Free Wisconsin Fund provided a total
return of +3.10% (for A class shares at net asset value with dividends
reinvested). This nearly matched the returns of the unmanaged Lehman Brothers
Municipal Bond Index and was more than the average of our peers, as reported by
Lipper Analytical Services.
Wisconsin's economy is strong, diverse and, as a rule, much less
cyclical than the economies on the east and west coasts. Dominant sectors
include dairy farming, services and manufacturing, forestry and tourism.
From a municipal bond perspective, Wisconsin is unusual yet
attractive. The credit quality of most municipalities is excellent; however,
only a few select issuers in the state offer bonds that are exempt from both
federal and state income taxes - the type of bonds we seek for your Fund's
portfolio.
As of June 30, some 65% of the Fund's net assets were in rated,
investment grade bonds while the balance were in unrated bonds.
This reflects the fact that many Wisconsin issues are for municipal projects
that are too small to make a rating from Moody's Investors Services or
Standard & Poor's economically feasible.
However, our experienced team of municipal bond analysts carefully
evaluate each issue to determine creditworthiness. Those that are deemed
satisfactory often carry a higher-than-average coupon, increasing your Fund's
income potential.
Wisconsin's unrated bonds also tend to be less sensitive to
short-term interest rate movements,
TAX-FREE WISCONSIN FUND
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
- --------------------------------------------------------------------------------
June 30, 1997
Hospitals 5.8%
Power Authority 5.2%
State Agencies 5.1%
Certificates of Participation 16.9%
Utility 1.0%
Housing 21.7%
Pre-Refunded Bonds 6.8%
Higher Education 1.8%
Industrial Development 18.7%
Cash 2.4%
Other Revenue Bonds 14.7%
APPROXIMATELY 23.8% OF THE INCOME GENERATED BY TAX-FREE WISCONSIN FUND FOR THE
SIX MONTHS ENDED JUNE 30, 1997 WAS SUBJECT TO THE ALTERNATIVE MINIMUM TAX.
- -------------------------------------------------
Average Effective Maturity 8.9 years
Average Effective Duration 8.1 years
Average Quality AA
Thirty-Day Current SEC Yield* 4.53%
* FOR CLASS A SHARES BASED ON SECURITIES AND EXCHANGE COMMISSION GUIDELINES.
SEC YIELDS FOR B AND C CLASSES WERE 3.99% AND 3.88% RESPECTIVELY.
6
1997 semi-annual report
<PAGE>
appreciating less during bond market rallies such as occurred in May and June.
Conversely, these bonds also tend to fluctuate less in price when the bond
market is weak, which can help preserve principal.
Our general approach to managing the portfolio is to balance bonds
that produce an above-average interest rate with bonds that are rated and can
contribute to the Fund's total return.
The supply of new municipal bonds in Wisconsin has dropped 12% so far
in 1997 to $1.7 billion, helping support bond prices, according to THE BOND
BUYER, a trade publication. We anticipate that investor demand will continue
to remain steady.
In our opinion, Wisconsin's long-term economic prospects are bright, as
per capita income and the state's growth rate are above-average. During the past
eight years, Gov. Tommy Thompson has reduced the state's income, capital gains,
property and inheritance taxes without negatively affecting state revenues.
Wisconsin had a $442 million budget surplus in fiscal 1996 on revenues of $20.7
billion and its general obligation bonds are rated AA.
TAX-FREE KANSAS FUND
STRATEGIC POSITIONING
AND OUTLOOK
Tax-Free Kansas Fund provided a total return of +3.17% for the six months
ended June 30, 1997, (for A class shares at net asset value with dividends
reinvested). This nearly matched the returns of the unmanaged Lehman Brothers
Municipal Bond Index and surpassed the average of its peers, as reported by
Lipper Analytical Services.
The Fund invests primarily in rated, investment grade securities.
Generally, the supply of Kansas bonds is very light (less than $600 million
so far in 1997) and the vast majority of the issues that come to market are
rated A or higher by Moody's Investors Services or Standard & Poor's. In our
opinion, the Fund reflects the high credit quality that characterizes the
state. As of June 30, nearly one-third of the Fund's net assets were invested
in general obligation bonds (G.Os). In Kansas, these bonds are backed by
property taxes rather than a single project that depends on a single revenue
stream, increasing the attractiveness of G.O.s for income-oriented investors.
Two factors enable the Fund to do well in the interest rate
environment we experienced during the first half of fiscal 1997 - high credit
quality and good portfolio structure. We had a prudent mix of
7
1997 semi-annual report
<PAGE>
TAX-FREE KANSAS FUND
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
- --------------------------------------------------------------------------------
June 30, 1997
Hospitals 16%
Power Authority 3.6%
General Obligations 34.0%
Water/Sewer 13.8%
Cash 3.6%
Housing 11.6%
Higher Education 4.8%
Other Revenue Bonds 10.2%
Industrial Development 2.4%
APPROXIMATELY 9.7% OF THE INCOME GENERATED BY TAX-FREE KANSAS FUND FOR THE SIX
MONTHS ENDED JUNE 30, 1997 WAS SUBJECT TO THE ALTERNATIVE MINIMUM TAX.
- --------------------------------------------------
Average Effective Maturity 9.6 years
Average Effective Duration 6.8 years
Average Quality AA
Thirty-Day Current SEC Yield* 4.55%
* FOR CLASS A SHARES BASED ON SECURITIES AND EXCHANGE COMMISSION GUIDELINES.
SEC YIELDS FOR B AND C CLASSES WERE 3.92% AND 3.89% RESPECTIVELY.
average coupon, call date and maturity. We believe that by having a good
blending of bonds from different sectors, we developed a portfolio that
enabled us to provide competitive results.
Relative to 1996, as of June 30 your Fund had a lower asset
allocation to utility bonds and a higher weighting in hospital bonds. This
partly reflects our concern with the effect of deregulation on the electric
power industry and our belief that health care bonds offer somewhat greater
relative value than other sectors.
Overall, we remain optimistic about the state's small but active bond
market. Kansas' population of 2.5 million had an above-average per-capita
income. Given the state's relatively high top individual income tax rate of
7.75%, we believe that many Kansans will continue to seek sources of tax-exempt
income.
SUMMARY OUTLOOK
Across the U.S., inflation appears to be benign. Despite a strong U.S.
economy, the Federal Reserve Board has been able to use monetary policy to
effectively control consumer price increases. Should interest rates remain
stable or decline for the balance of 1997, municipal bond investments could
potentially provide an attractive real rate of return.
In our opinion, the long-term outlook for the economy and bond
markets across the Plains is bright. Rural and urban municipalities should
continue to need capital to meet the growing needs of a diverse region,
presenting private investors with many income opportunities.
Elizabeth H. Howell
VICE PRESIDENT
SENIOR PORTFOLIO MANAGER
July 18, 1997
Outlook
8
1997 semi-annual report
<PAGE>
Performance Summary
COMPARATIVE TOTAL RETURNS FOR THE SIX MONTHS ENDED JUNE 30, 1997*
- --------------------------------------------------------------------------------
Missouri Insured Fund A +3.24%
Lehman Brothers Insured Municipal Bond Index +3.12%
Tax Free Iowa Fund A +3.59%
Tax Free Wisconsin Fund A +3.10%
Tax Free Kansas Fund A +3.17%
Lehman Brothers Municipal Bond Index +3.20%
* TOTAL RETURN IS BASED ON CHANGES IN NET ASSET VALUE WITH DISTRIBUTIONS
REINVESTED. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. PERFORMANCE
OF OTHER FUND CLASSES VARIES DUE TO DIFFERENT CHARGES AND EXPENSES. SEE PAGES
22, 24, 26, AND 28 FOR SIX-MONTH RETURNS FOR B AND C CLASSES. THE UNMANAGED
INDEXES SHOWN ABOVE INCLUDE TAX-EXEMPT BONDS FROM MANY STATES AND ASSUME NO
MANAGEMENT FEES OR OTHER EXPENSES.
MISSOURI INSURED FUND
- --------------------------------------------------------------------------------
Average Annual Return Through June 30, 1997
LIFETIME ONE YEAR
- --------------------------------------------------------------------------------
Class A (Est. 11/2/92)
Excluding Sales Charge +6.60% +8.75%
Including Sales Charge +5.73% +4.69%
- --------------------------------------------------------------------------------
Class B (Est. 3/12/94)
Excluding Sales Charge +5.18% +7.94%
Including Sales Charge +4.36% +3.94%
- --------------------------------------------------------------------------------
Class C (Est. 11/11/95)
Excluding Sales Charge +4.59% +7.68%
Including Sales Charge +4.59% +6.68%
TAX-FREE IOWA FUND
- --------------------------------------------------------------------------------
Average Annual Return Through June 30, 1997
LIFETIME ONE YEAR
- --------------------------------------------------------------------------------
Class A (Est. 9/1/93)
Excluding Sales Charge +4.32% +9.80%
Including Sales Charge +3.28% +5.70%
- --------------------------------------------------------------------------------
Class B (Est. 3/24/95)
Excluding Sales Charge +6.84% +8.99%
Including Sales Charge +5.62% +4.99%
- --------------------------------------------------------------------------------
Class C (Est. 1/4/95)
Excluding Sales Charge +9.54% +8.85%
Including Sales Charge +9.54% +7.85%
PLEASE SEE PAGE 10 FOR IMPORTANT ADDITIONAL INFORMATION. ALL PERFORMANCE
INCLUDES REINVESTMENT OF DISTRIBUTIONS AND APPLICABLE SALES CHARGES AS
DESCRIBED ON PAGE 10. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS.
9
1997 semi-annual report
<PAGE>
performance
TAX-FREE WISCONSIN FUND
- --------------------------------------------------------------------------------
Average Annual Return Through June 30, 1997
LIFETIME ONE YEAR
- --------------------------------------------------------------------------------
Class A (Est. 9/1/93)
Excluding Sales Charge +4.31% +8.09%
Including Sales Charge +3.27% +4.01%
- --------------------------------------------------------------------------------
Class B (Est. 4/22/95)
Excluding Sales Charge +5.78% +7.24%
Including Sales Charge +4.49% +3.24%
- --------------------------------------------------------------------------------
Class C (Est. 3/28/95)
Excluding Sales Charge +5.95% +7.20%
Including Sales Charge +5.95% +6.20%
TAX-FREE KANSAS FUND
- --------------------------------------------------------------------------------
Average Annual Return Through June 30, 1997
LIFETIME ONE YEAR
- --------------------------------------------------------------------------------
Class A (Est. 11/30/92)
Excluding Sales Charge +6.96% +8.21%
Including Sales Charge +6.07% +4.17%
- --------------------------------------------------------------------------------
Class B (Est. 4/8/95)
Excluding Sales Charge +6.37% +7.36%
Including Sales Charge +5.11% +3.36%
- --------------------------------------------------------------------------------
Class C (Est. 4/12/95)
Excluding Sales Charge +6.10% +7.19%
Including Sales Charge +6.10% +6.19%
ALL PERFORMANCE INCLUDES REINVESTMENT OF DISTRIBUTIONS AND APPLICABLE SALES
CHARGES AS DESCRIBED BELOW. RETURN AND SHARE VALUE WILL FLUCTUATE SO THAT SHARES
WHEN REDEEMED MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. PAST PERFORMANCE
IS NOT A GUARANTEE OF FUTURE RESULTS. PERFORMANCE FOR CLASS B AND C SHARES
"EXCLUDING SALES CHARGE" ASSUMES THE INVESTMENT WAS NOT REDEEMED. RETURNS
REFLECT A VOLUNTARY EXPENSE LIMITATION IN EFFECT AT THE TIME. RETURNS WOULD HAVE
BEEN LOWER WITHOUT THE LIMITATION.
CLASS A SHARES HAVE A 3.75% MAXIMUM FRONT-END SALES CHARGE. ALL FOUR FUNDS
HAVE A 12B-1 FEE.
CLASS B SHARES DO NOT CARRY A FRONT-END SALES CHARGE, BUT ARE SUBJECT TO A 1%
ANNUAL DISTRIBUTION AND SERVICE FEE. THEY ARE ALSO SUBJECT TO A DEFERRED
SALES CHARGE OF UP TO 4% IF REDEEMED BEFORE THE END OF THE SIXTH YEAR.
CLASS C SHARES HAVE A 1% ANNUAL DISTRIBUTION AND SERVICE FEE. IF SHARES ARE
REDEEMED WITHIN 12 MONTHS, A 1% CONTINGENT DEFERRED SALES CHARGE APPLIES.
10
1997 semi-annual report
<PAGE>
<TABLE>
<CAPTION>
AT A GLANCE
- -------------------------------------------------------------------------------------------------------------
Data as of June 30, 1997
MISSOURI IOWA WISCONSIN KANSAS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
General Obligaton Bond Rating AAA none AA none
Budget Surplus $335 million $202 million $442 million nominal
Per Capita Income $22,864 $22,560 $23,269 $23,281
Population 5.1 million 2.8 million 4.9 million 2.5 million
Range of Individual Income Tax Rates 1% to 5.6% 0.4% to 10% 4.9% to 6.9% 4.4% to 7.8%
Top Tax Bracket $9,000 $48,195 $20,000 $30,000
Unemployment Rate 4.0% 3.0% 3.4% 4.0%
</TABLE>
SOURCE: BLOOMBERG BUSINESS NEWS, CATO INSTITUTE
WISCONSIN
IOWA
(MAP SHOWING FOUR STATES)
KANSAS
MISSOURI
11
1997 semi-annual report
<PAGE>
Financial Statements
DELAWARE-VOYAGEUR MISSOURI INSURED FUND --
STATEMENT OF NET ASSETS -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS - 96.70%
GENERAL OBLIGATION BONDS - 14.30%
Clark County School District
5.75% 03/01/15 (FSA) ........................... $1,775,000 $1,804,501
Springfield School District
5.25% 03/01/11 (MBIA) .......................... 1,000,000 997,030
St. Charles 5.75% 03/01/15 (FSA) ................. 1,000,000 1,021,100
St. Louis County School District #8
5.60% 02/15/15 (MBIA) .......................... 1,490,000 1,504,602
Troy School District #3 Lincoln County
6.10% 03/01/14 (MBIA) .......................... 1,235,000 1,302,802
Union Reorganized School District
5.75% 03/01/13 (FGIC) .......................... 1,100,000 1,120,614
West Platte School District
5.85% 03/01/15 (MBIA) .......................... 750,000 767,310
---------
8,517,959
---------
HIGHER EDUCATION
REVENUE BONDS - 6.46%
Missouri State Health & Education Facility
(Central Missouri State University)
5.75% 10/01/25 (AMBAC) ......................... 1,000,000 1,006,410
St. Louis Health & Education University Revenue
for St. Louis University
4.75% 10/01/16 (AMBAC) ......................... 1,000,000 900,560
University Of Puerto Rico Revenue
5.25% 06/01/25 (MBIA) .......................... 2,000,000 1,937,280
---------
3,844,250
---------
HOSPITAL REVENUE BONDS - 22.75%
Cape Girardeau SE Missouri Hospital
5.25% 06/01/16 (MBIA) .......................... 1,000,000 976,520
Hannibal Health Facilities Series A Hannibal
Regional Hospital 5.75% 03/01/22 (FSA ........... 1,000,000 1,011,830
Hannibal Health Facilities Series A Hannibal
Regional Hospital 5.63% 03/01/12 (FSA) .......... 2,500,000 2,551,025
Jackson County Missouri St. Joseph's Hospital
6.50% 07/01/12 (MBIA) .......................... 1,980,000 2,123,471
Jackson County St. Mary's Hospital
5.75% 07/01/24 (MBIA) .......................... 2,000,000 2,013,940
Missouri State Health & Education Facility
(Heartland Health Systems)
6.35% 11/15/17 (AMBAC) ......................... 1,250,000 1,325,175
Missouri State Health & Education Facility
(Children's Mercy Hospital)
5.65% 05/15/23 (MBIA) .......................... 1,000,000 999,920
Missouri State Health & Education Facility (Health
Midwest) 6.25% 02/15/22 (MBIA) .................. 1,000,000 1,046,690
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Missouri State Health & Education Facility (SSM
Health Care) 6.40% 06/01/10 (MBIA) .............. $ 500,000 $ 556,380
Missouri State Health & Education Facility
(St. Luke's Health Systems)
5.13% 11/15/19 (MBIA) .......................... 1,000,000 940,980
----------
13,545,931
----------
HOUSING REVENUE BONDS - 16.90%
Missouri Single Family Housing
7.25% 09/01/26 (FNMA/GNMA) ...................... 2,295,000 2,543,916
Missouri Single Family Housing
7.20% 09/01/26 (FNMA/GNMA) ...................... 2,040,000 2,262,034
Missouri Single Family Housing
7.55% 09/01/27 (FNMA/GNMA) ...................... 1,935,000 2,182,158
Missouri Single Family Housing
7.45% 09/01/27 (FNMA/GNMA) ...................... 2,000,000 2,250,800
Missouri Single Family Housing
7.20% 12/01/17 (GNMA) .......................... 255,000 276,203
Missouri Single Family Housing
7.25% 12/01/20 (GNMA) .......................... 510,000 552,315
----------
10,067,426
----------
INDUSTRIAL DEVELOPMENT
REVENUE BONDS - 1.74%
St. Louis Municipal Finance Corporation City Lease
Revenue-City Justice Center, Series A
5.95% 02/15/16 (AMBAC) ......................... 1,000,000 1,035,750
----------
1,035,750
----------
LEASE/CERTIFICATE OF
PARTICIPATION - 1.72%
Kansas City Muchlebach Hotel
5.90% 12/01/18 (FSA) ........................... 1,000,000 1,025,610
----------
1,025,610
----------
*PRE-REFUNDED BONDS - 10.17%
Greene County Single Family Mortgage Revenue
Zero Coupon (Private Mortgage Insurance)
0.00% 03/01/16 ................................. 1,225,000 434,667
Sikeston Electric Revenue
6.25% 06/1/12-02 (MBIA) ........................ 2,000,000 2,188,440
St. Charles School District
6.50% 02/1/14-06 (FGIC) ........................ 1,250,000 1,401,650
St. Louis Municipal Finance Corporation Leasehold
Revenue 6.25% 02/15/12-05 (FGIC) ................ 1,850,000 2,030,449
----------
6,055,206
----------
</TABLE>
12
1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR MISSOURI INSURED FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
POWER AUTHORITY
REVENUE BONDS - 3.36%
Sikeston Electric Revenue
6.00% 06/01/13 (MBIA) .......................... $ 1,000,000 $ 1,079,040
Sikeston Missouri Electric Revenue
5.00% 06/01/22 ................................. 1,000,000 924,920
----------
2,003,960
----------
TRANSPORTATION REVENUE BONDS - 3.21%
Kansas City Airport Revenue
6.88% 09/01/14 (FSA) ........................... 1,675,000 1,910,606
----------
1,910,606
----------
UTILITY REVENUE BONDS - 3.81%
St. Joseph Environmental Pollution Control Revenue
for St. Joseph's Light and Power Co.
5.85% 02/01/13 (AMBAC) ......................... 2,200,000 2,270,862
----------
2,270,862
----------
WATER AND SEWER
REVENUE BONDS - 6.21%
Cape Girardeau Waterworks System
5.00% 03/01/12 (FGIC) .......................... 1,500,000 1,449,960
Liberty Sewer 6.00% 02/01/08 (MBIA) .............. 600,000 651,882
Liberty Sewer 6.15% 02/01/15 (MBIA) .............. 1,500,000 1,595,820
----------
3,697,662
----------
OTHER REVENUE BONDS - 6.07%
Kansas City Municipal Assistance Bartle
Hall Convention Center 5.60%
04/15/16 (MBIA) ................................ 1,240,000 1,248,234
Missouri State Environmental-State Revolving Fund-
Branson 6.05% 07/01/16 (FSA) .................... 2,265,000 2,368,782
----------
3,617,016
----------
Total Municipal Bonds (cost $55,059,379) ......... 57,592,238
----------
SHORT TERM INVESTMENTS - 1.62%
Norwest Advantage Municipal Money
Market Fund ..................................... 966,156 966,156
----------
Total Short Term Investments
(cost $966,156) ................................ 966,156
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
MARKET
VALUE
--------------------------------
<S> <C>
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.32%
(cost $56,025,535)** ........................................... $58,558,394
===========
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.68% ..................................... 1,001,665
-----------
NET ASSETS APPLICABLE TO 5,707,646 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00%........................... $59,560,059
===========
NET ASSET VALUE - TAX FREE MISSOURI
INSURED FUND A CLASS
($48,185,287 / 4,617,336 shares) ............................... $ 10.44
=======
NET ASSET VALUE - TAX FREE MISSOURI
INSURED FUND B CLASS
($11,158,865 / 1,069,627 shares) ............................... $ 10.43
=======
NET ASSET VALUE - TAX FREE MISSOURI
INSURED C CLASS
($215,907 / 20,683 shares) ..................................... $ 10.44
=======
- ----------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in
which each bond is pre-refunded.
** Also cost for federal tax purposes.
AMBAC - Insured by AMBAC Idemnity Corporation
FGIC - Insured by Financial Guaranty Insurance Company
FNMA - Insured by Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
GNMA - Insured by Government National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common Stock, $.01 par value, unlimited shares
authorized to the Fund. ......................................... $58,306,441
Accumulated Overdistributed Net Investment Income ................ (10,662)
Accumulated Net Realized loss on investments ..................... (1,268,579)
Net unrealized appreciation of investments ....................... 2,532,859
-----------
Total Net Assets.................................................. $59,560,059
===========
</TABLE>
13
1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE IOWA FUND --
STATEMENT OF NET ASSETS -- JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS - 98.48%
HIGHER EDUCATION REVENUE BONDS - 7.15%
State University of Iowa-Board Of Regents
5.30% 07/01/13 ............................ $ 500,000 $ 504,860
University of Northern Iowa-Board Of Regents
4.63% 07/01/10 ............................ 475,000 458,166
University of Northern Iowa-Board Of Regents
5.30% 07/01/13 ............................ 150,000 151,469
University of Northern Iowa-Board Of Regents
5.00% 07/01/11 ............................ 150,000 149,268
University of Northern Iowa-Board Of Regents
5.00% 07/01/12 ............................ 160,000 158,320
University of Northern Iowa-Board Of Regents
5.00% 07/01/13 ............................ 170,000 167,243
University of Northern Iowa-Board Of Regents
5.00% 07/01/14 ............................ 180,000 176,965
University of Northern Iowa-Board Of Regents
5.00% 07/01/15 ............................ 180,000 175,927
University Of Puerto Rico Revenue
5.50% 06/01/15 (MBIA) .................... 1,000,000 1,009,830
---------
2,952,048
---------
HOSPITAL REVENUE BONDS - 3.09%
Puerto Rico Hospital Revenue-Hospital Auzilio
Mutuo 6.25% 07/01/24 (MBIA) ................ 1,200,000 1,277,736
---------
1,277,736
---------
HOUSING REVENUE BONDS - 2.49%
Puerto Rico Housing Bank And Finance Agency
6.25% 04/01/29 (GNMA) ..................... 1,000,000 1,028,530
---------
1,028,530
---------
INDUSTRIAL DEVELOPMENT
REVENUE BONDS - 24.34%
Iowa Finance Authority-Correctional Facility
Revenue 5.70% 06/15/14 .................... 2,000,000 2,056,500
Iowa Finance Authority-Underground Storage
Tank Revenue 5.13% 07/01/14 ................ 7,500,000 7,477,200
Lee County Urban Renewal Revenue - Keokuk
Waste Treatment 6.40% 06/01/07 ............. 500,000 524,085
----------
10,057,785
----------
POWER AUTHORITY
REVENUE BONDS - 5.27%
Puerto Rico Electric Power Authority Revenue
6.25% 07/01/17 ............................ 1,000,000 1,043,050
Puerto Rico Electric Power Authority Revenue
6.00% 07/01/14 ............................ 1,100,000 1,136,245
----------
2,179,295
----------
*PRE-REFUNDED BONDS - 4.48%
Virgin Islands Public Finance Authority
7.30% 10/01/18
Escrowed to maturity ........................ 1,500,000 1,853,055
----------
1,853,055
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
TRANSPORTATION REVENUE BONDS - 11.59%
Guam Highway 6.30% 05/01/12 (FSA) ........... $ 1,950,000 $ 2,078,564
Puerto Rico Commonwealth Highway and
Transportation Revenue 5.25% 07/01/21 ...... 1,500,000 1,403,025
Puerto Rico Port Authority Revenue, Special
Facility-American Airlines 6.25% 06/01/26 .. 1,275,000 1,306,314
----------
4,787,903
----------
UTILITY REVENUE BONDS - 5.01%
Puerto Rico Telephone Revenue Authority
5.50% 01/01/22 ............................ 2,120,000 2,069,841
----------
2,069,841
----------
WATER AND SEWER REVENUE BONDS - 21.61%
Iowa Finance Authority-State Revolving Fund
Revenue 5.20% 05/01/23 .................... 7,200,000 7,055,064
Iowa Finance Authority-State Revolving Fund
Revenue 6.25% 05/01/24 .................... 1,750,000 1,873,935
----------
8,928,999
----------
OTHER REVENUE BONDS - 13.45%
Puerto Rico Educational Facility Revenue-
Polytechinc University 6.50% 08/01/24 ...... 675,000 698,315
Puerto Rico Municipal Finance Authority
6.00% 07/01/14 (FSA) ...................... 1,700,000 1,781,770
Puerto Rico Public Building Authority Revenue
Series M 5.75% 07/01/15 ................... 1,000,000 1,005,080
Puerto Rico Public Building Authority Revenue
Series M 5.50% 07/01/21 ................... 1,100,000 1,064,437
Puerto Rico Public Building Authority Revenue
Series L 5.75% 07/01/16 ................... 1,000,000 1,008,270
----------
5,557,872
----------
Total Municipal Bonds (cost $39,284,831) .... 40,693,064
----------
SHORT TERM INVESTMENTS - .25%
Norwest Advantage Municipal Money
Market Fund ................................ 104,031 104,031
----------
Total Short Term Investments
(cost $104,031) ........................... 104,031
----------
</TABLE>
14
1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE IOWA FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
MARKET
VALUE
-----------------
<S> <C> <C>
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.73%
(cost $39,388,862)**........................................................ $40,797,095
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.27%.................................................. 523,622
-----------
NET ASSETS APPLICABLE TO 4,247,532 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ..................................... $41,320,717
===========
NET ASSET VALUE - TAX FREE IOWA FUND A CLASS
($38,409,392 / 3,948,236 shares)............................................ $9.73
NET ASSET VALUE - TAX FREE IOWA FUND B CLASS =====
($2,231,094 / 229,352 shares)............................................... $9.73
NET ASSET VALUE - TAX FREE IOWA FUND C CLASS =====
($680,231 / 69,944 shares).................................................. $9.73
=====
- ----------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in
which each bond is pre-refunded.
** Also cost for federal tax purposes.
FSA - Insured by Financial Security Assurance
GNMA - Insured by Govenment National Mortgage Association
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common Stock, $.01 par value, 100 billion shares authorized to
the Fund with 10 billion shares allocated to Tax Free Iowa
Fund A Class 10 billion shares allocated to Tax Free Iowa
Fund B Class 10 billion shares allocated to Tax Free Iowa
Fund C Class................................................................ $41,781,151
Accumulated Overdistributed Net Investment Income ........................... (18,799)
Accumulated Net Realized loss on investments ................................ (1,849,868)
Net unrealized appreciation of investments .................................. 1,408,233
-----------
Total Net Assets............................................................. $41,320,717
===========
</TABLE>
<PAGE>
DELAWARE-VOYAGEUR
TAX-FREE WISCONSIN FUND --
STATEMENT OF NET ASSETS --
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS - 97.59%
HIGHER EDUCATION
REVENUE BONDS - 1.79%
Madison Community Development Authority Revenue
-Edgewood College 6.25% 04/01/14 .............. $ 500,000 $ 515,050
----------
515,050
----------
HOSPITAL REVENUE BONDS - 5.84%
Puerto Rico Industrial Tourist Educational
Medical & Environmental Control Facilities
(Hospital Auxilio Mutuo Project-Series A)
5.50% 07/01/17 ............................... 500,000 501,300
Kaukauna Housing Authority Revenue-St. Paul
Home Inc. 6.10% 09/01/07 ..................... 200,000 204,204
Superior Redevelopment Authority Revenue-
Superior Memorial Hospital
5.80% 05/01/10 (GNMA) ........................ 250,000 257,060
Winnebago Housing Authority Neenah/Menasha
5.50% 10/01/15 ............................... 715,000 716,380
----------
1,678,944
----------
HOUSING REVENUE BONDS - 21.69%
La Crosse Housing Authority Washburn Project
6.50% 10/01/26 ............................... 250,000 252,748
Dane County Multifamily Housing Revenue-Forest
Harbor Apartment Project 5.85% 07/01/11 ....... 125,000 126,715
Dane County Multifamily Housing Revenue-Forest
Harbor Apartment Project 5.90% 07/01/12 ....... 125,000 125,851
La Crosse Housing Authority Washburn Project
6.38% 10/01/16 ............................... 100,000 101,535
New Berlin Multifamily Housing Authority Revenue
7.13% 05/01/24 ............................... 500,000 524,955
Puerto Rico Housing Authority Single Family
Mortgage Revenue 6.85% 10/15/23 ............... 625,000 659,406
Puerto Rico Housing Bank And Finance Agency
6.25% 04/01/29 (GNMA) ........................ 1,000,000 1,028,530
Superior Housing Authority-St. Francis Project
6.00% 01/20/22 (GNMA) ........................ 565,000 576,430
Superior Housing Authority-St. Francis Project
6.15% 07/20/31 ............................... 835,000 850,022
Waukesha Wisconsin Housing Westgrove Wood
Project 6.00% 12/01/31 (GNMA) ................. 1,500,000 1,514,715
Wauwatosa Multifamily Housing Revenue-
Harwood Place, Inc. 5.75% 12/01/08 ............ 480,000 482,803
----------
6,243,710
----------
INDUSTRIAL DEVELOPMENT
REVENUE BONDS - 18.73%
Hartford Community Development Authority Lease
Revenue 5.90% 12/01/06 ....................... 200,000 208,382
Hartford Community Development Authority Lease
Revenue 6.15% 12/01/09 ....................... 240,000 252,204
Milwaukee Redevelopment Authority Revenue-
Goodwill Industries, Inc. 6.35% 10/01/09 ...... 2,000,000 2,077,600
</TABLE>
15
1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE WISCONSIN FUND
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
INDUSTRIAL DEVELOPMENT REVENUE BONDS (CONTINUED)
Omro Commmunity Development Authority
5.88% 12/01/11 ................................ $ 300,000 $ 311,520
Puerto Rico Industrial Medical Environmental
Revenue - Pepsico Project
6.25% 11/15/13 ................................ 1,100,000 1,178,991
Two Rivers Community Development Authority
Revenue Architectural Forest Products
6.35% 12/15/12 ................................ 250,000 251,588
West Allis Community Development Authority
Revenue-Poblocki Investments, Ltd.
5.90% 05/01/03 ................................. 1,080,000 1,109,905
---------
5,390,190
---------
LEASE/CERTIFICATES
OF PARTICIPATION - 16.84%
Cudahey Community Development Authority
Revenue 6.00% 06/01/11 ........................ 1,000,000 1,027,630
De Forest Redevelopment Lease Revenue
6.25% 02/01/18 ................................ 1,000,000 1,033,400
Little Chute Community Development Lease
Revenue 5.63% 03/01/19 ........................ 680,000 684,801
Madison Community Development Authority,
Monona Terrace Community Project
5.80% 03/01/05 ................................ 125,000 131,209
Madison Community Development Authority,
Monona Terrace Community Project
5.90% 03/01/06 ................................ 365,000 384,243
Madison Community Development Authority,
Monona Terrace Community Project
6.10% 03/01/10 ................................ 1,500,000 1,587,195
---------
4,848,478
---------
*PRE-REFUNDED BONDS - 6.74%
Wisconsin Housing Finance Authority
6.10% 06/1/21-17 (FHA) ........................ 1,000,000 1,074,260
Virgin Islands Public Finance Authority
7.30% 10/01/18 ................................ 700,000 864,759
---------
1,939,019
---------
POWER AUTHORITY
REVENUE BONDS - 5.20%
Puerto Rico Electric Power Authority Revenue
6.00% 07/01/14 ................................ 1,450,000 1,497,778
---------
1,497,778
---------
STATE AGENCY BONDS - 5.09%
Milwaukee Redevelopment Authority Multifamily
Housing 6.30% 08/01/38 ........................ 1,455,000 1,465,913
---------
1,465,913
---------
UTILITY REVENUE BONDS - 1.01%
Puerto Rico Telephone Authority Revenue
5.75% 01/01/11 ................................ 285,000 289,933
---------
289,933
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
OTHER REVENUE BONDS - 14.66%
Puerto Rico Educational Facility Revenue-
Polytechinc University 6.50% 08/01/24 ........... $ 300,000 $ 310,362
Puerto Rico Municipal Finance Authority
6.00% 07/01/14 (FSA) ........................... 1,800,000 1,886,580
Southeast Professional Baseball Park Sales Tax
Revenue 5.80% 12/15/26 (MBIA) ................... 2,000,000 2,022,040
-----------
4,218,982
-----------
Total Municipal Bonds (cost $27,086,316) ......... 28,087,997
-----------
SHORT TERM INVESTMENTS - 1.15%
Norwest Advantage Municipal Money
Market Fund ..................................... 332,354 332,354
-----------
Total Short Term Investments
(cost $332,354) ................................ 332,354
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.74%
(cost $27,418,670)** ........................... 28,420,351
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.26% ..................... 362,941
-----------
NET ASSETS APPLICABLE TO 2,971,406 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% $28,783,292
===========
NET ASSET VALUE - WISCONSIN TAX FREE FUND A CLASS
($26,558,308 / 2,741,742 shares) ............... $9.69
=====
NET ASSET VALUE - WISCONSIN TAX FREE FUND B CLASS
($1,558,056 / 160,980 shares) .................. $9.68
=====
NET ASSET VALUE - WISCONSIN TAX FREE FUND C CLASS
($666,928 / 68,684 shares) ..................... $9.71
=====
- ----------
* For Pre-Refunded Bonds, the stated maturity is followed by the year in
which each bond is pre-refunded.
** Also cost for federal tax purposes.
FSA - Insured by Financial Security Assurance
FHA - Insured by Federal Housing Authority
GNMA - Insured by Government National Mortgage Association
MBIA - Insured by Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common Stock, $.01 par value, 100 billion shares authorized to
the Fund with 10 billion shares allocated to Wisconsin Tax Free
Fund A Class 10 billion shares allocated to Wisconsin Tax Free
Fund B Class10 billion shares allocated to Wisconsin Tax Free
Fund C Class......................................................... $28,253,641
Accumulated Undistributed Net Investment Income ...................... 12,637
Accumulated Net Realized loss on investments ......................... (484,667)
Net unrealized appreciation of investments ........................... 1,001,681
-----------
Total Net Assets...................................................... $28,783,292
===========
</TABLE>
16
1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE KANSAS FUND --
STATEMENT OF NET ASSETS -- JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS - 96.39%
GENERAL OBLIGATION BONDS - 34.00%
Allen County Unified School District #258
6.88% 9/1/10 (AMBAC) ......................... $ 240,000 $ 278,695
Douglas County Lawrence Unified School
District #497 6.00% 09/01/15 ................. 250,000 265,545
Ellsworth County, Kansas-Series 1
5.75% 09/01/17 ............................... 250,000 255,770
Jefferson County Unified School District #340
6.35% 9/1/15 (FSA) .......................... 250,000 273,863
Johnson County 6.13% 09/01/12 ................. 750,000 785,303
Linn County Unified School District
5.70% 11/01/16 .............................. 500,000 503,550
Maize Unified School District #266 Series 1994
5.88% 9/1/12 (FSA) .......................... 250,000 257,848
Puerto Rico 5.38% 07/01/25 .................... 500,000 481,455
Sedgwick County Renwick Unified School District
6.15% 11/1/09 (AMBAC) ....................... 250,000 272,565
Sedgwick County Unified School District #265
5.50% 10/1/13 (FSA) ......................... 250,000 252,653
Shawnee County Unified School District #345
5.75% 9/1/11 (MBIA) ......................... 250,000 257,360
Shawnee County Unified School District #437
5.25% 9/1/10 (AMBAC) ........................ 130,000 129,990
Shawnee County Unified School District #501
5.75% 2/1/11 (FGIC) ......................... 200,000 204,770
Summer County Unified School District #356
5.75% 9/1/11 (MBIA) ......................... 250,000 261,225
----------
4,480,592
----------
HIGHER EDUCATION
REVENUE BONDS - 4.75%
Kansas City Community College
6.25% 5/15/20 (MBIA) ........................ 300,000 321,885
Kansas Development Finance Authority-Kansas
Board of Regents-Wichita State University
5.88% 6/1/17 (AMBAC) ........................ 300,000 304,620
----------
626,505
----------
HOSPITAL REVENUE BONDS - 16.06%
Kansas Development Finance Authority
Healthcare Facility Revenue
5.80% 11/15/16 (MBIA) ....................... 250,000 253,950
Kansas Development Finance Authority
Healthcare Facility Revenue
5.80% 11/15/16 (MBIA) ....................... 1,000,000 1,015,800
Lawrence Memorial Hospital Revenue
6.20% 07/01/19 .............................. 250,000 257,853
Olathe Good Samaritan Lutheran Health
6.00% 5/1/19 (AMBAC) ........................ 250,000 258,273
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Olathe Health Facility
5.88% 9/1/16 (AMBAC) ........................ $ 100,000 $ 101,075
Shawnee County Sister of Charity Hospital
5.00% 12/1/23 (FSA) ......................... 250,000 229,108
----------
2,116,059
----------
HOUSING REVENUE BONDS - 11.62%
Kansas State Multifamily Housing Park Apartments
5.90% 12/1/14 (FNMA) ........................ 600,000 611,682
Kansas State Multifamily Housing Park Apartments
6.00% 12/1/21 (FNMA) ........................ 600,000 607,104
Martin Creek Multifamily Housing Revenue
6.50% 8/1/24 (FHA) .......................... 50,000 51,995
Olathe Multifamily Deerfield Apartments Series
1994A 6.45% 6/1/19 (FNMA) ................... 250,000 260,813
----------
1,531,594
----------
INDUSTRIAL DEVELOPMENT
REVENUE BONDS - 2.38%
Kansas Development Finance Authority Water
Pollution Control 6.00% 11/01/14 ............. 250,000 262,323
Wamego Pollution Control Revenue Western Resources
Inc. Project 6.00% 2/1/33 (MBIA) ............. 50,000 51,329
----------
313,652
----------
POWER AUTHORITY REVENUE BONDS - 3.56%
Puerto Rico Electric Power Authority
5.25% 07/01/21 .............................. 500,000 468,910
----------
468,910
----------
TRANSPORTATION REVENUE BONDS - 0.75%
Kansas Department of Transportation
5.38% 03/01/13 .............................. 100,000 99,939
----------
99,939
----------
WATER AND SEWER
REVENUE BONDS - 13.85%
Atchison Water & Sewer Series 96A
5.70% 9/1/11 (AMBAC) ........................ 150,000 154,515
Atchison Water & Sewer Series 96A
5.80% 9/1/12 (AMBAC) ........................ 270,000 277,773
Haysville Water & Sewer
5.80% 10/1/16 (FSA) ......................... 250,000 254,808
Johnson County Water Revenue
5.25% 12/01/15 .............................. 175,000 168,203
Kansas City Utility System Revenue
6.38% 9/1/23 (FGIC) ......................... 900,000 969,885
----------
1,825,184
----------
</TABLE>
17
1997 semi-annual report
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE KANSAS FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
MUNICIPAL BONDS (CONTINUED)
OTHER REVENUE BONDS - 9.42%
Puerto Rico Educational Facility Revenue-
Polytechinc University 6.50% 08/01/24 ........ $ 1,200,000 $ 1,241,448
-----------
1,241,448
-----------
Total Municipal Bonds (cost $12,063,513) ...... 12,703,883
-----------
SHORT TERM INVESTMENTS - 2.01%
Norwest Advantage Municipal Money
Market Fund .................................. 264,994 264,994
-----------
Total Short Term Investments
(cost $264,994) ............................. 264,994
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.40%
(cost $12,328,507)** ........................ $12,968,877
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.60% .................. 210,784
-----------
NET ASSETS APPLICABLE TO 1,240,859 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ....... $13,179,661
===========
NET ASSET VALUE - TAX FREE KANSAS FUND A CLASS
($9,955,775 / 937,607 shares) ............... $10.62
======
NET ASSET VALUE - TAX FREE KANSAS FUND B CLASS
($3,127,122 / 294,134 shares) ............... $10.63
======
NET ASSET VALUE - TAX FREE KANSAS FUND C CLASS
($96,764 / 9,118 shares) .................... $10.61
======
- -----------------------
** Also cost for federal tax purposes.
AMBAC - Insured by the AMBAC Idemnity Corporation
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FNMA - Insured by the Federal National Mortgage Association
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common Stock, $.01 par value, unlimited shares authorized
to the Fund ................................... $12,750,986
Accumulated Overdistributed
Net Investment Income ........................ (5,843)
Accumulated Net Realized loss on investments .. (205,852)
Net unrealized appreciation of investments .... 640,370
-----------
Total Net Assets .............................. $13,179,661
===========
</TABLE>
18
1997 semi-annual report
<PAGE>
THE DELAWARE-VOYAGEUR FUNDS --
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Tax-Free Tax-Free Tax-Free Tax-Free
Missouri Iowa Wisconsin Kansas
Insured Fund Fund Fund Fund
---------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest .......................................................... $1,714,394 $1,169,011 $846,109 $370,720
------------ ----------- --------- ---------
1,714,394 1,169,011 846,109 370,720
------------ ----------- --------- ---------
EXPENSES:
Management fees ................................................... 147,148 103,248 72,060 31,958
Dividend disbursing, transfer agent
and custodian fees and expenses .................................. 64,905 45,273 32,637 8,175
Distribution expense .............................................. 114,590 61,279 43,609 26,337
Registration fees ................................................. 2,681 2,373 3,274 439
Reports and statements to shareholders ............................ 8,168 6,361 3,305 2,309
Accounting fees and salaries ...................................... 5,594 3,674 2,738 1,177
Professional fees ................................................. 4,494 3,905 1,987 2,474
Directors' fees ................................................... 977 668 431 277
Amortization of organization expenses ............................. 0 3,324 1,512 0
Other ............................................................. 1,647 355 862 561
----------- ---------- --------- ---------
350,204 230,460 162,415 73,707
Less expenses waived or absorbed .................................. (45,432) (30,152) (11,825) (9,411)
----------- ---------- --------- ---------
Total net expenses ................................................ 304,772 200,308 150,590 64,296
----------- ---------- --------- ---------
NET INVESTMENT INCOME ............................................. 1,409,622 968,703 695,519 306,424
----------- ---------- --------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on
Investments: .................................................... 4,872 (59,545) 144,414 1,037
Net change in unrealized appreciation on
Investments: .................................................... 411,423 552,139 33,437 87,886
----------- ----------- ---------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS ................................................... 416,295 492,594 177,851 88,923
----------- ----------- ---------- ---------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .................................................. $1,825,917 $1,461,297 $873,370 $395,347
=========== =========== ========== =========
</TABLE>
See accompanying notes
19
1997 semi-annual report
<PAGE>
THE DELAWARE-VOYAGEUR FUNDS --
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Missouri Tax-Free
Insured Fund Iowa Fund
----------------------------------------------------------------------------------
Six Months Year Six Months Period From
Ended Ended Ended 6/4/96* to
6/30/97 12/31/96 6/30/97 12/31/96
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ......................... $1,409,622 $2,877,421 $968,703 $2,019,520
Net realized gain (loss) on
investments .................................. 4,872 (523,769) (59,545) (201,680)
Net change in unrealized
appreciation of
investments .................................. 411,423 (403,336) 552,139 (803,926)
----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations .................... 1,825,917 1,950,316 1,461,297 1,013,914
----------- ----------- ----------- -----------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income:
A Class ...................................... (1,223,191) (2,454,463) (940,082) (1,953,806)
B Class ...................................... (234,131) (376,995) (37,762) (48,161)
C Class ...................................... (3,494) (5,509) (13,144) (22,832)
----------- ----------- ----------- -----------
(1,460,816) (2,836,967) (990,988) (2,024,799)
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ...................................... 2,030,315 5,650,060 1,404,066 5,783,953
B Class ...................................... 1,443,918 4,705,880 638,134 791,024
C Class ...................................... 100,000 156,103 55,000 262,735
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class ...................................... 743,600 1,297,141 682,154 1,284,358
B Class ...................................... 188,711 250,807 30,744 37,397
C Class ...................................... 2,247 3,283 4,158 4,155
----------- ----------- ----------- -----------
4,508,791 12,063,274 2,814,256 8,163,622
----------- ----------- ----------- -----------
Cost of shares repurchased:
A Class ...................................... (4,185,462) (7,034,424) (4,148,429) (8,405,045)
B Class ...................................... (973,714) (655,723) (110,710) 0
C Class ...................................... (40,129) (27,281) (57,298) (49,832)
----------- ----------- ----------- -----------
(5,199,305) (7,717,428) (4,316,437) (8,454,877)
----------- ----------- ----------- -----------
Increase (decrease) in net assets
derived from capital share
transactions ...................................... (690,514) 4,345,846 (1,502,181) (291,255)
----------- ----------- ----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS ...................................... (325,413) 3,459,195 (1,031,872) (1,302,140)
NET ASSETS:
Beginning of period................................. 59,885,472 56,426,277 42,352,589 43,654,729
----------- ----------- ----------- -----------
End of period ...................................... $59,560,059 $59,885,472 $41,320,717 $42,352,589
=========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Tax-Free Tax-Free
Wisconsin Fund Kansas Fund
----------------------------------------------------------------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
6/30/97 12/31/96 6/30/97 12/31/96
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ......................... $695,519 $1,376,191 $306,424 $584,317
Net realized gain (loss) on
investments .................................. 144,414 88,723 1,037 (75,990)
Net change in unrealized
appreciation of
investments .................................. 33,437 (417,975) 87,886 (87,456)
----------- ----------- ----------- -----------
Net increase in net assets
resulting from operations .................... 873,370 1,046,939 395,347 420,871
----------- ----------- ----------- -----------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income:
A Class ...................................... (682,139) (1,309,246) (259,953) (513,198)
B Class ...................................... (30,373) (40,094) (57,186) (68,183)
C Class ...................................... (13,250) (13,973) (2,015) (2,305)
----------- ----------- ----------- -----------
(725,762) (1,363,313) (319,154) (583,686)
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ...................................... 2,023,003 4,977,290 478,907 1,557,809
B Class ...................................... 210,642 596,712 695,653 1,735,044
C Class ...................................... 270,436 557,261 26,000 78,467
Net asset value of shares issued upon
reinvestment of dividends from net
investment income:
A Class ...................................... 421,172 758,119 160,312 276,442
B Class ...................................... 20,817 25,436 37,416 33,834
C Class ...................................... 13,267 11,846 2,234 2,036
----------- ----------- ----------- -----------
2,959,337 6,926,664 1,400,522 3,683,632
----------- ----------- ----------- -----------
Cost of shares repurchased:
A Class ...................................... (4,315,345) (3,573,034) (915,237) (2,165,871)
B Class ...................................... (20,472) (4,141) (27,867) (50,509)
C Class ...................................... (174,466) (92,971) (22,200) (30,130)
----------- ----------- ----------- -----------
(4,510,283) (3,670,146) (965,304) (2,246,510)
----------- ----------- ----------- -----------
Increase (decrease) in net assets
derived from capital share
transactions ................................. (1,550,946) 3,256,518 435,218 1,437,122
----------- ----------- ----------- -----------
NET INCREASE (DECREASE)
IN NET ASSETS ................................ (1,403,338) 2,940,144 511,411 1,274,307
NET ASSETS:
Beginning of period............................ 30,186,630 27,246,486 12,668,250 11,393,943
----------- ----------- ----------- -----------
End of period ................................. $28,783,292 $30,186,630 $13,179,661 $12,668,250
=========== =========== =========== ===========
</TABLE>
- -------------------
* Commencement of operations
See accompanying notes
20
1997 semi-annual report
<PAGE>
THE DELAWARE-VOYAGEUR FUNDS --
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Missouri Insured Fund - A Class
--------------------------------------------------------------------------------
Six Months Year Year 2 Months Year Period From
Ended Ended Ended Ended Ended 11/2/92(1)
6/30/97 12/31/96 12/31/95 12/31/94 10/31/94 to
(Unaudited) 10/31/93
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $10.37 $10.54 $9.27 $9.37 $10.82 $10.00
Income from investment operations:
Net investment income ......................... 0.24 0.52 0.52 0.10 0.55 0.55
Net realized and unrealized gain
from investments ............................. 0.08 (0.18) 1.29 (0.11) (1.43) 0.89
Net increase (decrease) in net assets -------- -------- ------- ------- ------- --------
from investment operations ................... 0.32 0.34 1.81 (0.01) (0.88) 1.44
-------- -------- ------- ------- ------- --------
Less dividends and distributions:
Dividends from net investment income(2) ....... (0.25) (0.51) (0.54) (0.09) (0.54) (0.55)
Distributions from net realized gain
on security transactions ..................... - - - - (0.03) (0.07)
-------- -------- ------- ------- ------- --------
Total dividends and distributions ............. (0.25) (0.51) (0.54) (0.09) (0.57) (0.62)
-------- -------- ------- ------- ------- --------
Net asset value, end of period ................ $10.44 $10.37 $10.54 $9.27 $9.37 $10.82
======== ======== ======= ======= ======= ========
Total Return(3) ............................... 3.24% 3.41% 19.96% (0.07%) (8.28%) 14.74%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ...... $48,185 $49,301 $50,211 $37,790 $37,384 $30,270
Ratio of expenses to average net assets(4) ... 0.91%(5) 0.71% 0.50% 0.11%(5) 0.15% 0.00%
Ratio of expenses to average net assets prior
to expense limitation ....................... 1.05%(5) 1.03% 1.07% 1.12%(5) 1.13% 1.25%(5)
Ratio of net investment income to
average net assets .......................... 4.91%(5) 5.05% 5.25% 6.00%(5) 5.39% 4.82%(5)
Ratio of net investment income to
average net assets prior to
expense limitation .......................... 4.77%(5) 4.73% 4.68% 4.99%(5) 4.41% 3.57%(5)
Portfolio turnover ........................... 3.37%(5) 28.26% 31.69% 8.85% 32.02% 76.51%
</TABLE>
- -------------------------
(1) Commencement of operations.
(2) 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
distribution from net investment income was subject to state income tax.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996 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.
(5) Annualized.
21
1997 semi-annual report
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Missouri Insured Fund - B Class
--------------------------------------------------------------------
Six Months Year Year 2 Months Period From
Ended Ended Ended Ended 3/12/94(1)
6/30/97 12/31/96 12/31/95 12/31/94 to
(Unaudited) 10/31/94
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $10.37 $10.54 $9.27 $9.37 $10.30
Income from investment operations:
Net investment income ......................... 0.21 0.46 0.48 0.08 0.33
Net realized and unrealized gain (loss)
from investments ............................. 0.07 (0.18) 1.28 (0.10) (0.94)
------ ------ ------ ------ -----
Net increase (decrease) in net assets
from investment operations ................... 0.28 0.28 1.76 (0.02) (0.61)
------ ------ ------ ------ -----
Less dividends and distributions:
Dividends from net
investment income(2) ......................... (0.22) (0.45) (0.49) (0.08) (0.32)
------ ------ ------ ------ -----
Total dividends and distributions (0.22) (0.45) (0.49) (0.08) (0.32)
------ ------ ------ ------ -----
Net asset value, end of period $10.43 $10.37 $10.54 $9.27 $9.37
====== ====== ====== ====== =====
Total Return(3) ............................... 2.79% 2.93% 19.18% (0.14%) (6.16%)
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ............................... $11,159 $10,432 $6,195 $2,742 $1,701
Ratio of expenses to average
net assets(4) ............................... 1.58%(5) 1.29% 0.97% 0.60%(5) 0.49%(5)
Ratio of expenses to average
net assets prior to expense
limitation .................................. 1.80%(5) 1.78% 1.81% 1.84%(5) 1.83%(5)
Ratio of net investment income
to average net assets ....................... 4.24%(5) 4.46% 4.70% 5.32%(5) 4.89%(5)
Ratio of net investment income to
average net assets prior
to expense limitation ....................... 4.02%(5) 3.97% 3.86% 4.08%(5) 3.55%(5)
Portfolio turnover ........................... 3.37%(5) 28.26% 31.69% 8.85% 32.02%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Missouri Insured Fund - C Class
----------------------------------------------
Six Months Year Period From
Ended Ended 11/11/95(1)
6/30/97 12/31/96 to
(Unaudited) 12/31/95
<S> <C> <C> <C>
Net asset value, beginning of period .......... $10.37 $10.54 $10.36
Income from investment operations:
Net investment income ......................... 0.19 0.43 0.06
Net realized and unrealized gain (loss)
from investments ............................. 0.08 (0.18) 0.17
------ ------ ------
Net increase (decrease) in net assets
from investment operations ................... 0.27 0.25 0.23
------ ------ ------
Less dividends and distributions:
Dividends from net
investment income(2) ......................... (0.20) (0.42) (0.05)
------ ------ ------
Total dividends and distributions ............. (0.20) (0.42) (0.05)
------ ------ ------
Net asset value, end of period ................ $10.44 $10.37 $10.54
====== ====== ======
Total Return(3) ............................... 2.77% 2.48% 2.24%
Ratios and supplemental data:
Net assets, end of period
(000 omitted) ............................... $216 $152 $20
Ratio of expenses to average
net assets(4) ............................... 1.66%(5) 1.62% 1.22%(5)
Ratio of expenses to average
net assets prior to expense
limitation .................................. 1.80%(5) 1.78% 1.55%(5)
Ratio of net investment income
to average net assets ....................... 4.16%(5) 4.10% 4.09%(5)
Ratio of net investment income to
average net assets prior
to expense limitation ....................... 4.02%(5) 3.94% 3.76%(5)
Portfolio turnover .......................... 3.37%(5) 28.26% 31.69%
</TABLE>
- ---------------------
(1) Commencement of operations.
(2) 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 distribution from
net investment income was subject to state income tax.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996 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.
(5) Annualized.
22
1997 semi-annual report
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- -------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Tax-Free Iowa Fund - A Class
------------------------------------------------------------------
Six Months Year Year Four Months Year
Ended Ended Ended Ended Ended
6/30/97 12/31/97 12/31/95 12/31/94 8/31/94
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $ 9.62 $ 9.83 $ 8.56 $ 9.26 $ 10.00
Income from investment operations:
Net investment income ........................ 0.22 0.44 0.45 0.17 0.49
Net realized and unrealized gain (loss)
from investments ............................ 0.11 (0.21) 1.29 (0.72) (0.74)
Net increase (decrease) in net assets ------ ------ ------ ------ ------
from investment operations .................. 0.33 0.23 1.74 (0.55) (0.25)
Less dividends and distributions: ------ ------ ------ ------ ------
Dividends from net investment income(2) ...... (0.22) (0.44) (0.47) (0.15) (0.49)
------ ------ ------ ------ ------
Total dividends and distributions .......... (0.22) (0.44) (0.47) (0.15) (0.49)
------ ------ ------ ------ ------
Net asset value, end of period ................ $ 9.73 $ 9.62 $ 9.83 $ 8.56 $ 9.26
====== ====== ====== ======
Total Return(3) ............................... 3.59% 3.49% 17.74% (4.12%) (2.40%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ...... $38,409 $28,292 $26,449 $20,167 $16,093
Ratio of expenses to average net assets(4) ... 0.92%(5) 0.98% 0.88% 0.08%(5) 0.04%
Ratio of expenses to average net assets
prior to expense limitation ................. 1.07%(5) 1.09% 1.09% 1.25%(5) 1.25%
Ratio of net investment income to average
net assets .................................. 4.74%(5) 4.90% 5.05% 5.54%(5) 4.89%
Ratio of net investment income to average
net assets prior to expense limitation ...... 4.59%(5) 4.79% 4.84% 4.37%(5) 3.68%
Portfolio turnover ........................... 3.08%(5) 38.54% 12.10% 20.52% 86.26%
</TABLE>
- ---------------------
(1) Commencement of operations.
(2) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996 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.
(5) Annualized.
23
1997 semi-annual report
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Tax-Free Iowa Fund - B Class Tax-Free Iowa Fund - C Class
-------------------------------------------------------------------------
Six Months Year Period From Six Months Six Period From
Ended Ended 3/24/95(1) Ended Months 1/4/95(1)
6/30/97 12/31/96 to 6/30/97 12/31/96 to
(Unaudited) 12/31/95 (Unaudited) 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $ 9.61 $ 9.83 $ 9.18 $9.61 $9.83 $ 8.55
Income from investment operations:
Net investment income (loss).................. 0.17 0.38 0.31 0.17 0.36 0.37
Net realized and unrealized gain (loss)
from investments & foreign currencies ....... 0.13 (0.22) 0.64 0.13 (0.22) 1.28
Net increase in net assets ------ ----- ------ ----- ----- ------
from investment operations .................. 0.30 0.16 0.95 0.30 0.14 1.65
------ ----- ------ ----- ----- ------
Less dividends and distributions:
Dividends from net investment income(2)....... (0.18) (0.38) (0.30) (0.18) (0.36) (0.37)
Distributions from net realized gain on
security transactions ....................... - - - - - -
------ ------ ------ ----- ----- ------
Total dividends and distributions ............. (0.18) (0.38) (0.30) (0.18) (0.36) (0.37)
------ ------ ------ ----- ----- ------
Net asset value, end of period ................ $ 9.73 $ 9.61 $ 9.83 $9.73 $9.61 $ 9.83
====== ====== ====== ===== ===== ======
Total Return(3)................................ 3.28% 1.76% 10.62% 3.23% 1.56% 19.66%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ...... $2,231 $1,645 $819 $680 $670 $462
Ratio of expenses to average net assets(4).... 1.67%(5) 1.61% 1.28%(5) 1.67%(5) 1.75% 1.61%(5)
Ratio of expenses to average net assets
prior to expense limitation ................. 1.82%(5) 1.81% 1.65%(5) 1.82%(5) 1.81% 1.72%(5)
Ratio of net investment income
to average net assets ...................... 3.99%(5) 3.97% 4.06%(5) 3.99%(5) 3.82% 3.74%(5)
Ratio of net investment income to
average net assets prior
to expense limitation ....................... 3.84%(5) 3.77% 3.69%(5) 3.84%(5) 3.76% 3.63%(5)
Portfolio turnover ........................... 3.08%(5) 14.56% 21.67% 3.08%(5) 14.56% 21.67%
</TABLE>
- ---------------------
(1) Commencement of operations.
(2) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(3) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996 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.
(5) Annualized.
24 1997 semi-annual report
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Tax-Free Wisconsin Fund - A Class
---------------------------------------------------------------------
Six Months Year Year Year Year
Ended Ended Ended Ended Ended
6/30/97 12/31/96 12/31/95 12/31/94 8/31/94
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $ 9.64 $ 9.78 $ 8.74 $ 9.28 $ 10.00
Income from investment operations:
Net investment income ........................ 0.22 0.46 0.48 0.16 0.49
Net realized and unrealized gain (loss)
from investments ............................ 0.06 (0.14) 1.04 (0.55) (0.72)
Net increase (decrease) in net assets ------ ------ ------ ------ ------
from investment operations .................. 0.28 0.32 1.52 (0.39) (0.23)
------ ------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income(2)....... (0.23) (0.46) (0.48) (0.15) (0.49)
------ ------ ------ ------ ------
Total dividends and distributions ............ (0.23) (0.46) (0.48) (0.15) (0.49)
------ ------ ------ ------ ------
Net asset value, end of period ................ $ 9.69 $ 9.64 $ 9.78 $ 8.74 $ 9.28
====== ====== ====== ====== ======
Total Return(3)................................ 3.10% 3.49% 17.74% (4.12%) (2.40%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ...... $26,558 $28,292 $26,449 $20,167 $16,093
Ratio of expenses to average net assets(4).... 0.99%(5) 0.98% 0.88% 0.08%(5) 0.04%
Ratio of expenses to average net assets
prior to expense limitation ................. 1.07%(5) 1.09% 1.09% 1.25%(5) 1.25%
Ratio of net investment income to
average net assets .......................... 4.88%(5) 4.90% 5.05% 5.54%(5) 4.89%
Ratio of net investment income to
average net assets prior
to expense limitation ....................... 4.80%(5) 4.79% 4.84% 4.37%(5) 3.68%
Portfolio turnover ........................... 44.18%(5) 38.54% 12.10% 20.52% 86.26%
</TABLE>
- ----------------
(1) Commencement of operations.
(2) 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 August 31, 1994, $.02 per share of
distribution from net investment income was subject to state income tax.
(3) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996 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.
(5) Annualized.
1997 semi-annual report 25
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Tax-Free Wisconsin Fund - B Class Tax-Free Wisconsin Fund - C Class
--------------------------------------------------------------------------------
Six Months Year Period From Six Months Year Period From
Ended Ended 4/22/95(1) Ended Ended 3/28/95(1)
6/30/97 12/31/96 to 6/30/97 12/31/96 to
(Unaudited) 12/31/95 (Unaudited) 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $9.63 $9.77 $9.39 $9.66 $9.79 $9.34
Income from investment operations:
Net investment income ......................... 0.19 0.41 0.28 0.17 0.39 0.30
Net realized and unrealized gain (loss)
from investments ............................. 0.06 (0.14) 0.37 0.07 (0.13) 0.44
Net increase in net assets ------ ------ ------ ------ ------ ------
from investment operations ................... 0.25 0.27 0.65 0.24 0.26 0.74
------ ------ ------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income(2)........ (0.20) (0.41) (0.27) (0.19) (0.39) (0.29)
------ ------ ------ ------ ------ ------
Total dividends and distributions ............. (0.20) (0.41) (0.27) (0.19) (0.39) (0.29)
------ ------ ------ ------ ------ ------
Net asset value, end of period ................. $ 9.68 $ 9.63 $9.77 $ 9.71 $ 9.66 $ 9.79
====== ====== ====== ====== ====== ======
Total Return(3)................................. 2.71% 2.84% 7.08% 2.65% 2.74% 8.06%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ....... $1,558 $1,339 $725 $667 $555 $73
Ratio of expenses to average net assets(4)..... 1.71%(5) 1.66% 1.45%(5) 1.75%(5) 1.75% 1.77%(5)
Ratio of expenses to average net assets
prior to expense limitation .................. 1.82%(5) 1.85% 1.70%(5) 1.82%(5) 1.83% 1.77%(5)
Ratio of net investment income to
average net assets ........................... 4.16%(5) 4.37% 4.31%(5) 4.09%(5) 4.12% 4.04%(5)
Ratio of net investment income to average
net assets prior to expense limitation ....... 4.05%(5) 4.18% 4.06%(5) 4.02%(5) 4.04% 4.04%(5)
Portfolio turnover ............................ 44.18%(5) 38.54% 12.10% 44.18%(5) 38.54% 12.10%
</TABLE>
- -----------------
(1) Commencement of operations.
(2) 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 August 31, 1994, $.02 per share of
distribution from net investment income was subject to state tax.
(3) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996 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.
(5) Annualized.
26 1997 semi-annual report
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Tax-Free Kansas Fund - A Class
---------------------------------------------------------------------------------
Six Months Year Year 2 Months Year Period From
Ended Ended Ended Ended Ended 11/30/92(1)
6/30/97 12/31/96 12/31/95 12/31/94 10/31/94 to
(Unaudited) 10/31/93
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $10.56 $ 10.73 $ 9.50 $ 9.63 $10.85 $10.00
Income from investment operations:
Net investment income ........................ 0.25 0.52 0.56 0.09 0.57 0.56
Net realized and unrealized gain (loss)
from investments ............................ 0.07 (0.17) 1.22 (0.13) (1.21) 0.85
Net increase (decrease) in net assets ------ ------- ------ ------ ------ ------
from investment operations .................. 0.32 0.35 1.78 (0.04) (0.64) 1.41
------ ------- ------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income(2)....... (0.26) (0.52) (0.55) (0.09) (0.57) (0.56)
Distributions from net realized gain on
security transactions ....................... - - - - (0.01) -
------ ------- ------ ------ ------ ------
Total dividends and distributions ............. (0.26) (0.52) (0.55) (0.09) (0.58) (0.56)
------ ------- ------ ------ ------ ------
Net asset value, end of period ................ $10.62 $ 10.56 $ 10.73 $ 9.50 $ 9.63 $10.85
====== ======= ====== ====== ====== ======
Total Return(3)................................ 3.17% 3.43% 19.13% (0.38%) (6.10%) 14.49%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ...... $9,956 $10,176 $10,677 $7,355 $6,469 $2,059
Ratio of expenses to average net assets(4).... 0.83%(5) 0.83% 0.37% 0.01%(5) 0.06% 0.00%
Ratio of expenses to average net assets
prior to expense limitation ................. 0.99%(5) 1.21% 1.11% 1.25%(5) 1.25% 1.25%(5)
Ratio of net investment income
to average net assets ....................... 4.96%(5) 4.97% 5.32% 5.88%(5) 5.30% 5.26%(5)
Ratio of net investment income to average
net assets prior to expense limitation ...... 4.80%(5) 4.59% 4.58% 4.64%(5) 4.11% 4.01%(5)
Portfolio turnover ........................... 10.64%(5) 56.77% 19.71% 0.00% 38.96% 28.87%
</TABLE>
- ------------------
(1) Commencement of operations.
(2) 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, 1994, $.01 per share of
distribution from net investment income was subject to state income tax.
(3) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996 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.
(5) Annualized.
1997 semi-annual report 27
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Tax-Free Kansas Fund - B Class Tax-Free Kansas Fund - B Class
-----------------------------------------------------------------------------------
Six Months Year Period From Six Months Year Period From
Ended Ended 4/8/95(1) Ended Ended 4/12/95(1)
6/30/97 12/31/96 to 6/30/97 12/31/96 to
(Unaudited) 12/31/95 (Unaudited) 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .......... $10.57 $10.74 $10.19 $10.55 $10.72 $10.20
Income from investment operations:
Net investment income ........................ 0.21 0.45 0.34 0.20 0.43 0.32
Net realized and unrealized gain (loss)
from investments ............................ 0.07 (0.17) 0.54 0.07 (0.17) 0.51
Net increase in net assets ------ ------ ------ ------ ------ ------
from investment operations .................. 0.28 0.28 0.88 0.27 0.26 0.83
------ ------ ------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment income(2)....... (0.22) (0.45) (0.33) (0.21) (0.43) (0.31)
------ ------ ------ ------ ------ ------
Total dividends and distributions ............ (0.22) (0.45) (0.33) (0.21) (0.43) (0.31)
------ ------ ------ ------ ------ ------
Net asset value, end of period ................ $10.63 $10.57 $10.74 $10.61 $10.55 $10.72
====== ====== ====== ====== ====== ======
Total Return(3)................................ 2.75% 2.69% 8.76% 2.73% 2.52% 8.29%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ...... $3,127 $2,402 $677 $97 $90 $40
Ratio of expenses to average net assets(4).... 1.58%(5) 1.61% 0.94%(5) 1.58%(5) 1.77% 1.27%(5)
Ratio of expenses to average net assets
prior to expense limitation ................. 1.74%(5) 2.00% 1.68%(5) 1.74%(5) 2.00% 1.79%(5)
Ratio of net investment income
to average net assets ....................... 4.21%(5) 4.16% 4.63%(5) 4.21%(5) 4.02% 4.21%(5)
Ratio of net investment income to average
net assets prior to expense limitation ...... 4.05%(5) 3.77% 3.89%(5) 4.05%(5) 3.79% 3.69%(5)
Portfolio turnover ........................... 10.64%(5) 56.77% 19.71% 10.64%(5) 56.77% 19.71%
</TABLE>
- ------------------
(1) Commencement of operations.
(2) 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, 1994, $.01 per share of
distribution from net investment income was subject to state income tax.
(3) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(4) For the years ended December 31, 1995 and 1996 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.
(5) Annualized.
28 1997 semi-annual report
<PAGE>
THE DELAWARE-VOYAGEUR FUNDS -
NOTES TO FINANCIAL STATEMENTS - JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
Delaware-Voyageur Missouri Insured Fund (formerly Voyageur Missouri Insured
Tax Free Fund)("Tax-Free Missouri Insured Fund") series of the Voyageur
Investment Trust; Delaware-Voyageur Tax-Free Iowa Fund (formerly Voyageur
Iowa Tax Free Fund)("Tax-Free Iowa Fund") and Delaware-Voyageur Tax-Free
Wisconsin Fund (formerly Voyageur Wisconsin Tax Free)("Tax-Free Wisconsin
Fund"), series of the Voyageur Mutual Funds, Inc., and Delaware-Voyageur
Tax-Free Kansas Fund (formerly Voyageur Kansas Tax Free Fund)("Tax-Free
Kansas Fund"), series of the Voyageur Investment Trust, (each referred to as
a "Fund" or collectively as the "Funds") are registered under the Investment
Company Act of 1940 (as amended) as non-diversified, open-end management
investment companies. Missouri Insured 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 Tax-Free Iowa Fund and
the Tax-Free Wisconsin Fund seek high current income free from both federal
and state income taxes by investing in investment grade municipal bonds. The
Tax-Free Kansas Fund seeks high current income free from both federal and
state income taxes and local intangibles tax by investing in investment grade
municipal bonds. The Funds each offer 3 classes of shares.
1. Fund Reorganization
On April 30, 1997, Lincoln National Corporation ("LNC") acquired Voyageur
Fund Manager Inc.'s ("Voyageur") parent, Dougherty Financial Group, Inc.
("DFG") pursuant to an agreement and plan of merger dated January 15, 1997,
in which LNC would acquire DFG including the mutual fund investment advisory
business of DFG conducted by Voyageur. Upon completion of the acquisition,
Delaware Management Company, Inc. ("DMC") became the investment adviser to
the Funds, Delaware Distributors, L.P. ("DDLP") became the distributor for
the Funds, Delaware Service Company, Inc. ("DSC") became the transfer,
dividend-disbursing, shareholder servicing agent and accounting service agent
for the Funds.
2. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of
such securities. Money market instruments having less than 60 days to
maturity are valued at amortized cost which approximates market value. Other
securities and assets for which market quotations are not readily available
are valued at fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
Federal Income Taxes - Each Fund intends to continue to qualify as a
regulated investment company and make the requisite distributions to
shareholders. Accordingly, no provision for federal income taxes has been
made in the financial statements. Income and capital gain distributions are
determined in accordance with federal income tax regulations which may differ
from generally accepted accounting principles.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Funds on the basis of daily net assets of each class. Distribution
expenses relating to a specific class are charged directly to that class.
Other - Expenses common to all Funds within the Delaware-Voyageur Funds are
allocated amongst the Funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the sale
of investment securities are those of the
<PAGE>
specific securities sold. Interest income is recorded on the accrual basis.
Original issue discounts are accreted to interest income over the lives of
the respective securities. The Funds declare dividends from net investment
income daily and pay them monthly. Capital gains are distributed annually.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
3. Investment Management and Other Transactions with Affiliates
Commencing May 1, 1997, and in accordance with the terms of the Investment
Management Agreement, the Fund pays DMC the Investment Manager of each Fund,
an annual fee, which is calculated daily on the average daily net assets of
each Fund. The management fee rates are as follows:
Missouri Tax-Free Tax-Free Tax-Free
Insured Iowa Wisconsin Kansas
Fund Fund Fund Fund
---- ---- ---- ----
Management fee as a
percentage of average
daily net assets
(per annum) ................ 0.50% 0.50% 0.50% 0.50%
DMC has elected to waive their fees and reimburse each Fund to the extent
that annual operating expenses exclusive of 12b-1 fees, taxes, interest,
brokerage commissions and extraordinary expenses, exceed 0.66%, 0.67%, 0.75%,
0.58% of average daily net assets for the Missouri Insured Fund, Tax-Free
Iowa Fund, Tax-Free Wisconsin Fund and Tax-Free Kansas Fund, respectively,
through December 31, 1997. Total expenses absorbed by DMC for the two month
period ended June 30, 1997, are as follows:
Missouri Tax-Free Tax-Free Tax-Free
Insured Iowa Wisconsin Kansas
Fund Fund Fund Fund
---- ---- ---- ----
Total expenses absorbed
by DMC ..................... 0 0 0 1,454
Prior to May 1, 1997, the Funds had an investment advisory and management
agreement with Voyageur. Voyageur received a fee for its investment advisory
and management services based on the average daily net assets of each Fund at
an annual rate of .50%. During the period January 1, 1997, to April 30, 1997,
Voyageur waived $5,936, $1,906 and $2,737 of the Tax-Free Iowa Fund, Tax-Free
Wisconsin Fund and Tax-Free Kansas Fund, respectively.
1997 semi-annual report 29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Commencing May 1, 1997, the Funds have engaged DSC, an affiliate of DMC, to
serve as dividend disbursing, transfer agent and accounting services agent
for the Fund. For the two month period ended June 30, 1997, the amounts
expensed for each Fund were
as follows:
Missouri Tax-Free Tax-Free Tax-Free
Insured Iowa Wisconsin Kansas
Fund Fund Fund Fund
---- ---- ---- ----
Dividend disbursing,transfer
agent fees and other
expenses ................... $20,779 $12,656 $9,514 $2,419
Accounting fees ............ 3,794 2,674 1,838 827
Prior to May 1, 1997, the Funds paid a fee to Voyageur for acting as the
Fund's dividend disbursing, administrative and accounting services agent.
Voyageur received 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 ranging from 0.02% to 0.11%. 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.
On June 30, 1997, the Funds had payable to affiliates as follows:
Missouri Tax-Free Tax-Free Tax-Free
Insured Iowa Wisconsin Kansas
Fund Fund Fund Fund
---- ---- ---- ----
Investment Management fee
payable to DMC .............. $24,800 $17,329 $12,202 $5,454
Dividend disbursing, transfer
agent fees, accounting fees
and other expenses
payable to DSC .............. 5,686 5,078 2,994 1,313
Other expenses payable
to DMC and affiliates ....... 10,316 2,118 4,498 1,897
Commencing May 1, 1997, and pursuant to the Distribution Agreement, the Funds
pay DDLP, the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.25% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Class for each Series. Commencing May
1, 1997 and pursuant to the Distribution Agreement, the Funds pay DDLP, the
Distributor and an affiliate of DMC, an annual fee not to exceed 0.25% of the
average daily net assets of the A Class and 1.00% of the average daily net
assets of the B and C Class for each Series. For the period May 1, 1997 to
June 30, 1997, DDLP voluntarily waived $11,219, $4,018, $0 for the Tax-Free
Missouri Insured Fund Class A, Class B and Class C Shares, respectively, $7,74
7, $357, $0 for the Tax-Free Iowa Fund Class A, Class B and Class C Shares,
respectively, $3,120, $243, $0 for the Tax-Free Wisconsin Fund Class A, Class
B and Class C Shares, respectively, and $1,503, $237, $0 for the Tax-Free
Kansas Fund Class A, Class B and Class C Shares, respectively. For the two
month period ended June 30, 1997, DDLP earned commissions on sales of the
Fund A Class shares for each Fund
as follows:
Missouri Tax-Free Tax-Free Tax-Free
Insured Iowa Wisconsin Kansas
Fund Fund Fund Fund
---- ---- ---- ----
$4,594 $4,784 $2,834 $1,930
<PAGE>
Prior to May 1, 1997, each class of shares had a Distribution Agreement with
Voyageur Fund Distributors, Inc. ("VFD"). Under the plan the Funds paid VFD a
fee at an annual rate of 0.25% of the average daily net assets of the Class A
Shares and 1.00% of the average daily net assets of the Class B and C Shares.
For the period January 1, 1997, to April 30, 1997, VFD voluntarily waived
$18,345, $7,832, $0 for the Tax-Free Missouri Insured Fund Class A, Class B
and Class C Shares, respectively, $15,498, $615, $0 for the Tax Free Iowa
Fund Class A, Class B and Class C Shares, respectively, $6,092, $464, $0 for
the Tax-Free Wisconsin Fund Class A, Class B and Class C Shares, respectively,
and $3,016, $464, $0 for the Tax-Free Kansas Fund Class A, Class B and Class C
Shares, respectively.
Certain officers of DMC, DSC and DDLP are officers, directors and/or
employees of the Fund. These officers, directors and employees are paid no
compensation by the Fund.
4. Investments
During the period ended June 30, 1997, the Fund made purchases and sales of
investment securities other than U.S. government securities and temporary
cash investments for each Fund as follows:
Missouri Tax-Free Tax-Free Tax-Free
Insured Iowa Wisconsin Kansas
Fund Fund Fund Fund
---- ---- ---- ----
Purchases ................ $ 975,722 $ 627,506 $6,237,255 $718,625
Sales .................... $2,571,828 $2,347,209 $7,288,051 $665,374
At June 30, 1997, the aggregate unrealized appreciation (depreciation) of
securities for federal income tax purposes for each Fund were as follows:
Missouri Tax-Free Tax-Free Tax-Free
Insured Iowa Wisconsin Kansas
Fund Fund Fund Fund
---- ---- ---- ----
Aggregate unrealized
appreciation ............. $2,544,117 $1,433,885 $1,001,681 $640,370
Aggregate unrealized
depreciation ............. $ 11,258 $ 25,652 - -
Net unrealized
appreciation ............. $2,532,859 $1,408,233 $1,001,681 $640,370
For federal income tax purposes, as of December 31, 1996, Missouri Insured
Fund had a capital loss carryover of $1,249,089 that will expire in 2002
through 2004, Tax-Free Iowa Fund had a capital loss carryover of $1,658,322
that will expire in 2001 through 2005, Tax-Free Wisconsin Fund had a capital
loss carryover of $629,081 that will expire in 2001 through 2003, and
Tax-Free Kansas Fund had a capital loss carryover of $206,889 that will
expire in 2003 and 2004.
30 1997 semi-annual report
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. Capital Stock
<TABLE>
<CAPTION>
Missouri Insured Fund Tax-Free Iowa Fund Tax-Free Wisconsin Fund Tax-Free Kansas Fund
------------------------ ---------------------- ------------------------- ---------------------
Six Months Year Six Months Year Six Months Year Six Months Year
Ended June 30, Ended Ended June 30, Ended Ended June 30, Ended Ended June 30, Ended
1997 December 31 1997 December 31 1997 December 31 1997 December 31
(Unaudited) 1996 (Unaudited) 1996 (Unaudited) 1996 (Unaudited) 1996
Shares sold:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A Class.............................. 196,177 551,980 146,608 609,767 210,203 526,332 45,552 148,964
B Class.............................. 139,341 458,267 66,569 83,915 21,857 62,678 65,927 165,725
C Class.............................. 9,718 15,011 5,797 27,546 28,176 58,385 2,480 7,541
Shares issued upon reinvestment of
dividends from net investment income
and net realized gains from
security transactions:
A Class.............................. 71,825 126,576 71,049 135,685 43,792 79,482 15,238 26,440
B Class.............................. 18,237 24,527 3,201 3,959 2,166 2,671 3,552 3,238
C Class.............................. 217 322 433 441 1,376 1,244 212 195
------- --------- ------- ------- ------- ------- ------- -------
435,515 1,176,683 293,657 861,313 307,570 730,792 132,961 352,103
------- --------- ------- ------- ------- ------- ------- -------
Shares repurchased:
A Class.............................. (404,747) (689,056) (433,256) (890,441) (448,267) (374,467) (87,210) (206,595)
B Class.............................. (94,252) (64,463) (11,591) 0 (2,128) (431) (2,650) (4,714)
C Class.............................. (3,882) (2,635) (6,029) (5,230) (18,313) (9,635) (2,139) (2,863)
------- --------- ------- ------- ------- ------- ------- -------
(502,881) (756,154) (450,876) (895,671) (468,708) (384,533) (91,999) (214,172)
------- --------- ------- ------- ------- ------- ------- -------
Net Increase (Decrease) .............. (67,366) 420,529 (157,219) (34,358) (161,138) 346,259 40,962 137,931
======= ========= ======= ======= ======= ======= ======= =======
</TABLE>
6. Concentration of Credit Risk
The Funds concentrate their investments in securities mainly issued by each
specific states' municipalities. The value of these investments may be
adversely affected by new legislation within the state, regional or local
economic conditions, and differing levels of supply and demand for municipal
bonds. Many municipalities insure repayment for their obligations. Although
bond insurance reduces the risk of loss due to default by an issuer, such
bonds remain subject to the risk that market value may fluctuate for other
reasons and there is no assurance that the insurance company will meet its
obligations. These securities have been identified in the Statement of Net
Assets.
The Funds may invest up to 15% of its total assets in illiquid securities
which may include securities with contractual restrictions on resale,
securities exempt from registration under Rule 144A of the Securities Act of
1933, as amended, and other securities which may not be readily marketable.
The relative illiquidity of some of these securities may adversely affect the
Fund's ability to dispose of such securities in a timely manner and at a fair
price when it is necessary to liquidate such securities. These securities, if
any, have been denoted in the Statement of Net Assets.
1997 semi-annual report 31
<PAGE>
VOYAGEUR FUNDS
SHAREHOLDER MEETING RESULTS
- --------------------------------------------------------------------------------
A meeting of the funds' shareholders was held on April 11, 1997. The matters
submitted to a vote of shareholders were the election of new directors and
the approval of a new investment management agreement. Whenever there is a
change in control of an investment manager, the Investment Company Act of
1940 requires shareholders to vote on a new investment management agreement.
MISSOURI INSURED FUND
<TABLE>
<CAPTION>
NUMBER OF VOTES
-------------------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
-------------------------------------------------------------
<S> <C> <C> <C>
Walter P. Babich .................................... 4,113,959 25,298 --
Anthony D. Knerr .................................... 4,114,988 24,269 --
Ann R. Leven ........................................ 4,114,988 24,269 --
W. Thacher Longstreth................................ 4,114,265 24,992 --
Thomas F. Madison ................................... 4,114,988 24,269 --
Jeffrey J. Nick ..................................... 4,114,988 24,269 --
Charles E. Peck ..................................... 4,113,550 25,707 --
Wayne A. Stork ...................................... 4,114,988 24,269 --
Approval of New Investment Management Agreement ..... 3,856,731 73,030 209,496
TAX-FREE IOWA FUND
NUMBER OF VOTES
-------------------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
-------------------------------------------------------------
Walter P. Babich .................................... 3,054,944 16,557 --
Anthony D. Knerr .................................... 3,057,653 13,848 --
Ann R. Leven ........................................ 3,057,653 13,848 --
W. Thacher Longstreth ............................... 3,054,944 16,557 --
Thomas F. Madison ................................... 3,057,653 13,848 --
Jeffrey J. Nick ..................................... 3,057,653 13,848 --
Charles E. Peck ..................................... 3,054,944 16,557 --
Wayne A. Stork ...................................... 3,057,653 13,848 --
Approval of New Investment Management Agreement ..... 2,885,740 54,502 131,259
TAX-FREE WISCONSIN FUND
NUMBER OF VOTES
-------------------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
-------------------------------------------------------------
Walter P. Babich .................................... 2,432,348 19,789 --
Anthony D. Knerr .................................... 2,432,897 19,240 --
Ann R. Leven ........................................ 2,432,897 19,240 --
W. Thacher Longstreth ............................... 2,431,713 20,424 --
Thomas F. Madison ................................... 2,432,897 19,240 --
Jeffrey J. Nick ..................................... 2,432,897 19,240 --
Charles E. Peck ..................................... 2,431,164 20,973 --
Wayne A. Stork ...................................... 2,432,348 19,789 --
Approval of New Investment Management Agreement ..... 2,322,810 56,645 72,682
TAX-FREE KANSAS FUND
NUMBER OF VOTES
-------------------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
-------------------------------------------------------------
Walter P. Babich .................................... 907,317 2,443 --
Anthony D. Knerr .................................... 907,317 2,443 --
Ann R. Leven ........................................ 907,317 2,443 --
W. Thacher Longstreth ............................... 907,317 2,443 --
Thomas F. Madison ................................... 907,317 2,443 --
Jeffrey J. Nick ..................................... 907,317 2,443 --
Charles E. Peck ..................................... 907,317 2,443 --
Wayne A. Stork ...................................... 907,317 2,443 --
Approval of New Investment Management Agreement ..... 755,938 12,238 141,584
</TABLE>
32 1997 semi-annual report
<PAGE>
DELAWARE GROUP OF FUNDS
FOR GROWTH OF CAPITAL
Aggressive Growth Fund
Trend Fund
DelCap Fund
Small Cap Value Fund
U.S. Growth Fund
Growth Stock Fund
Tax Efficient Equity Fund
FOR TOTAL RETURN
Quantum Fund
Blue Chip Fund
Devon Fund
Decatur Total Return Fund
Decatur Income Fund
Delaware Fund
FOR INTERNATIONAL DIVERSIFICATION
Emerging Markets Fund
New Pacific Fund
World Growth Fund
International Equity Fund
Global Assets Fund
Global Bond Fund
FOR CURRENT INCOME
Delchester Fund
Strategic Income Fund
U.S. Government Fund
Delaware-Voyageur
U.S. Government Securities Fund
Limited-Term Government Fund
FOR TAX-EXEMPT CURRENT INCOME
National High Yield Municipal Bond Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
State Tax-Exempt Funds*
MONEY MARKET FUNDS
Delaware Cash Reserve
U.S. Government Money Fund
Tax-Free Money Fund
* Available for the following states: AZ, CA, CO, FL, ID, IA, KS, MN, MO, ND,
NJ, NM, NY, OH, OR, PA, UT, WA, WI. Insured and intermediate bond funds are
available in selected states.
funds
Complete information on any Delaware Group fund can be found in each Fund's
current prospectus. Prospectuses for all Delaware Group funds are available
from your financial adviser. Please read the prospectus carefully before you
invest or send money.
<PAGE>
THIS SEMI-ANNUAL REPORT IS FOR THE INFORMATION OF MISSOURI INSURED FUND,
TAX-FREE IOWA FUND, TAX-FREE WISCONSIN FUND AND TAX-FREE KANSAS FUND
SHAREHOLDERS, BUT IT MAY BE USED WITH PROSPECTIVE INVESTORS WHEN PRECEDED OR
ACCOMPANIED BY A CURRENT PROSPECTUS FOR MISSOURI INSURED FUND, TAX-FREE IOWA
FUND, TAX-FREE WISCONSIN FUND OR TAX-FREE KANSAS FUND. THE PROSPECTUSES SET
FORTH DETAILS ABOUT CHARGES, EXPENSES, INVESTMENT OBJECTIVES AND OPERATING
POLICIES OF EACH FUND. YOU SHOULD READ THE PROSPECTUS CAREFULLY BEFORE YOU
INVEST. SUMMARY INVESTMENT RESULTS ARE DOCUMENTED IN THE FUNDS' CURRENT
STATEMENTS OF ADDITIONAL INFORMATION. THE FIGURES IN THIS REPORT REPRESENT
PAST RESULTS WHICH ARE NOT A GUARANTEE OF FUTURE RESULTS. THE RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
INVESTMENT MANAGER
Delaware Management Company, Inc.
Philadelphia
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia
SHAREHOLDER SERVICING, DIVIDEND DISBURSING AND TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia
1818 Market Street
Philadelphia, PA 19103-3682
FOR SHAREHOLDERS
1.800.523.1918
FOR SECURITIES DEALERS
1.800.362.7500
FOR FINANCIAL INSTITUTIONS
REPRESENTATIVES
1.800.659.2265
Be sure to consult your financial adviser when making investments. Mutual
funds can be a valuable part of your financial plan: however, shares of the
Funds are not FDIC or NCUSIF insured, are not guaranteed by any bank or any
credit union, and involve investment risk, including the possible loss of the
principal amount invested. Shares of the Funds are not bank or credit union
deposits.
Copy Rights Delaware Distributors, L.P.
DELAWARE GROUP
==============
PHILADELPHIA o LONDON
Printed in the USA on
recycled paper
(157)
SA-VOY1 [6/97] PP8/97
