Tax-Free Florida Fund
Tax-Free Florida Insured Fund
Tax-Free New York Fund
service and guidance
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professional management
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goals
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1998
Annual
Report
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----------------------------
Philadelphia * London]
A TRADITION OF SOUND INVESTING
commitment
A Commitment To Our Investors
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LANDSCAPE]
Delaware Investments has a money management tradition that dates back to
1929. We have a long and distinguished history of helping individuals
reach their financial goals through a full range of investment
opportunities that include municipal bond mutual funds.
Headquartered in Philadelphia with an international affiliate in
London, the Delaware organization is one of the nation's leading
municipal bond fund managers.
Delaware Investments manages more than $40 billion in mutual fund
assets and institutional advisory accounts. We offer a wide variety of
tax-advantaged equity and fixed-income investments, retirement plan
accounts, IRAs, investment accounts for variable annuities and closed-
end funds.
Delaware's Tax-Advantaged Investment Lineup
[bullet] Tax-Efficient Equity Fund
[bullet] Municipal Bond Funds in 19 States
[bullet] Four National Tax-Exempt Bond Funds
[bullet] Tax-Free Money Fund
Complete information on any fund offered by Delaware Investments can be
found in each fund's current prospectus. Prospectuses for all funds
offered by Delaware Investments are available from your financial
adviser. Please read the prospectus carefully before you invest or
send money.
Fund Objectives
Tax-Free Florida Fund
Tax-Free Florida Insured Fund
Tax-Free New York Fund
To seek as high a level of current income exempt from federal income tax
and applicable state taxes as is consistent with preservation of
capital.
Table of Contents
Letter to Shareholders Page 1
Portfolio Managers' Review Page 3
Tax-Free Florida Funds Page 4
Tax-Free New York Fund Page 5
Performance Summary Page 7
Statement of Net Assets Page 10
Financial Highlights Page 19
tax-exempt income
September 15, 1998
Dear Shareholder
WE ARE PLEASED TO PRESENT THE ANNUAL report for Delaware Investments'
Tax-Free Florida and New York municipal bond funds. During fiscal 1998,
municipal bonds provided investors with attractive income, yields that
nearly matched comparable taxable investments and high single-digit
returns.
An unprecedented number of new bond issues came to market during
the second half of fiscal 1998. New York led the nation in volume while
Florida was the 5th largest issuer. A majority of new issues were
targeted for education, health care, and transportation projects.
Ample supply allowed the Fund's portfolio managers to seek bonds
with attractive yields, high total return potential and solid credit
ratings. Increased supply also, however, temporarily stifled price
gains, as the market struggled to absorb the inventory.
Delaware Investments' two Florida funds performed well against
their peers during fiscal 1998. Tax-Free Florida Fund ranked 1st out of
62 similar funds, while Tax-Free Florida Insured ranked 4th out of 15
Florida insured funds for the 12 months ended August 31, 1998.* Tax-Free
Florida also outperformed its benchmark, the Lehman Brothers Municipal
Bond Index, during the period.
TAX-FREE FLORIDA FUND RANKED 1ST OUT OF 65 SIMILAR FUNDS IN THE STATE,
WHILE TAX-FREE FLORIDA INSURED RANKED 4TH OUT OF 15 FLORIDA INSURED
FUNDS FOR THE 12 MONTHS ENDED AUGUST 31, 1998.*
ANNUAL TOTAL RETURN
January 1, 1998 12 Months Ended
to August 31, 1998 August 31, 1998
Tax-Free Florida Fund A Class +5.44% +10.31%
Lehman Brothers Municipal Bond Index +4.54% +8.65%
Lipper Florida Municipal Debt
Fund Average (62 funds) +4.17% +8.28%
Tax-Free Florida Insured Fund A Class +4.38% +8.97%
Lehman Brothers Insured Municipal
Bond Index +4.70% +9.19%
Lipper Florida Insured Fund Average
(15 funds) +4.24% +8.60%
Tax-Free New York Fund A Class +3.85% +7.22%
Lehman Brothers Municipal Bond Index +4.54% +8.65%
Lipper New York Municipal Debt Fund
Average (98 funds) +4.20% +8.27%
All performance shown above is at net asset value and assumes
reinvestment of distributions. For complete performance for all Classes,
see pages 7 to 9. Each index shown above is unmanaged. Performance of
other Fund classes for the periods shown was lower due to different
charges and expenses. Past performance does not guarantee future
results.
*Tax-Free Florida Fund Class A ranked 1st out of 62 funds and 3rd out
of 46 funds, respectively, for the one-year and lifetime periods ended
8/31/98. Tax-Free Florida Insured Fund Class A ranked 4th out of 15
funds, 4th out of 5 funds, and 2nd out of 2 funds respectively, for the
one-year, five-year and lifetime periods ended 8/31/98. Rankings are
based on total return at net asset value. Expense limitations were in
effect for the time periods shown. Rankings would have been lower
without the limitations.
An uncertain market for equities and continued economic turmoil in
Asia and Russia have led to strong consumer demand for the safety of
U.S. government debt. Demand for Treasury bonds soared during most of
the fiscal year and resulted in near record-low yields.
Falling Treasury bond yields have made municipal bonds an
increasingly attractive fixed-income investment. As of August 31, 1998,
municipal bond investors were able to earn more than 93.8% of the yield
available in U.S. Treasuries, without increasing their taxable
investment income.
We believe the outlook for tax-exempt municipal bonds is promising.
For the increasing numbers of investors seeking to diversify their
portfolios with less volatile investments, municipals offer uncommon
value.
We changed the fiscal year for Tax-Free Florida Fund, Tax-Free
Florida Insured Fund and Tax-Free New York Fund from December 31 to
August 31 to match the fiscal year of Delaware Investments' other
municipal bond funds. We believe this change may yield long-run
operational efficiencies. From now on, you will receive your annual
report by early November and your semi-annual report by early May.
In the following pages, portfolio managers Patrick P. Coyne and
Mitchell L. Conery provide a review of Tax-Free Florida and New York
Funds, and offer an outlook for the coming year.
We encourage you to meet with your financial adviser to discuss the
performance of your Fund and review your portfolio's asset mix. Thank
you for your confidence in Delaware Investments.
Sincerely,
/S/Wayne A. Stork
WAYNE A. STORK
Chairman
/S/Jeffrey J. Nick
JEFFREY J. NICK
President and Chief Executive Officer
[GRAPHIC OMITTED: WORM CHART MUNICIPAL BONDS OFFER GOOD VALUE COMPARED
TO TREASURIES]
MUNICIPAL BONDS OFFER GOOD VALUE COMPARED TO TREASURIES
MARCH 1989 TO AUGUST 1998
Municipal Bond Yields/Treasury Bond Yields
Mar.'89 83.09%
June '89 85.26%
Sep. '89 87.41%
Dec. '89 85.93%
Mar.'90 82.96%
June '90 84.54%
Sep. '90 81.03%
Dec. '90 85.00%
Mar.'91 84.27%
June '91 82.72%
Sep 30, 91 84.55%
Dec 31, 91 86.56%
Mar.'92 82.91%
Jun 30, 92 80.41%
Sep 30, 92 84.02%
Dec 31, 92 82.52%
Mar.'93 83.79%
Jun 30, 93 81.69%
Sep 30, 93 86.31%
Dec 31, 93 82.04%
Mar.'94 86.76%
Jun 30, 94 82.76%
Sep 30, 94 81.30%
Dec 31, 94 83.80%
Mar.'95 80.05%
Jun 30, 95 89.13%
Sep 30, 95 89.51%
Dec 31, 95 87.50%
Mar.'96 85.57%
Jun 30, 96 83.43%
Sep 30, 96 80.13%
Dec 31, 96 82.15%
Mar.'97 81.04%
Jun 30, 97 80.36%
Sep 30, 97 81.97%
Dec 31, 97 84.84%
Mar.'98 86.50%
Jun 30, 98 89.73%
Aug. '98 93.80%
High quality municipal bonds offered the highest income potential
relative to Treasuries in more than nine years at the end of fiscal
1998.
The above chart represents the percentage of income that the average 30-
year AAA-rated general obligation municipal bond provided compared to a
30-year U.S. Treasury bond. Unlike Treasuries, the U.S. government does
not guarantee principal and interest of municipal bonds. Source:
Bloomberg Business News.
Portfolio Managers' Review
BY PATRICK P. COYNE AND MITCHELL L. CONERY
Vice Presidents/Senior Portfolio Managers
September 15, 1998
The appeal of safety fueled strong investor interest in U.S. Treasury
bonds during the second half of fiscal 1998. Prices on 30-year
Treasuries rose sharply and sent yields tumbling to historic lows.
During the 12 months ended August 31, 1998, yields on the long bond fell
from 6.61% down to just 5.24%.
Strength in the Treasury market was driven by increased foreign and
domestic demand for safe fixed-income investments. During 1998,
investors took note of changing economic conditions and began to favor
the security of U.S. government debt. These conditions included:
[bullet] Slowing U.S. economic growth especially during the second
quarter of 1998;
[bullet] Increasing volatility in global equity markets; and,
[bullet] Economic decline and currency devaluations in Asia, Russia and
other emerging markets.
market overview
The recession in Asia during the past year spread to other emerging
nations. Foreign investors seeking a higher quality alternative to
volatile Pacific Rim investments turned to U.S. Treasuries and sent
prices soaring. Nearly a third of all outstanding federal debt is now
owned by foreign investors and governments, compared to 20% in 1994.
Municipal bond prices rose, but did not keep pace with Treasuries.
Returns in the tax-exempt bond market were temporarily reduced by a
short-term oversupply of new bonds. Between January and August of 1998,
the municipal bond market was asked to absorb exceptionally large bond
issues, exceeding $1 billion in some areas. Overall bond sales by state
and local governments during the first eight months of 1998 increased
more than 43% compared to the same period in 1997, according to The Bond
Buyer, a trade publication.
New York led the nation in bond sales with an increase of nearly
65% over the first eight months of 1998. Many of these bonds were issued
by state agencies such as the New York Power Authority who took
advantage of lower interest rates and refunded older debt. Florida also
issued new bonds at a brisk pace during the period, ranking fourth in
volume nationally. New bonds were issued in Florida to finance
transportation and education projects.
For investors seeking reduced volatility and tax-exempt income,
municipal bonds were a sound investment during fiscal 1998, providing
returns that outperformed the Standard & Poor's 500 Index, a measure of
large company stocks. For the 12 months ended August 31, 1998, municipal
bonds, as measured by the unmanaged Lehman Brothers Municipal Bond
Index, returned +8.65%, compared to a +8.10% total return for the S&P
500 Index.
MUNICIPAL BONDS WERE A SOUND INVESTMENT IN FISCAL 1998, PROVIDING
RETURNS THAT OUTPERFORMED THE STANDARD & POOR'S 500 INDEX, A MEASURE OF
LARGE COMPANY STOCKS.
STRATEGIC POSITIONING
TAX-FREE FLORIDA FUNDS
Demand for insured municipal bonds, which guarantee the payment of
principal and interest, remained strong in Florida over the past 12
months. Some 70% of all new bond issues in Florida were insured bonds, a
substantially higher percentage than most states. Tax-Free Florida
Insured Fund performed well during fiscal 1998, exceeding the average
returns of other Florida insured funds. The Fund modestly underperformed
its benchmark, the unmanaged Lehman Brothers Insured Municipal Bond
Index.
strategic positioning
A bond market rally throughout fiscal 1998 led to higher prices for
insured municipal bonds in Florida. At the start of fiscal 1998, Tax-
Free Florida Insured Fund owned inverse floaters, securities whose
income potential increases when interest rates decline, to help increase
the Fund's income potential. As interest rates fell to historic lows
during this past summer, the benefits of owning these securities grew
more limited and we reduced the Fund's position.
Historically, investments made over a longer period of time have
provided higher yields. During the past 12 months, however, the spread
between interest rates for short- and long-term investments narrowed
substantially. With interest rates at record lows, we modestly extended
the average effective duration of Tax-Free Florida Fund to increase the
Fund's income potential. We believe that the economic conditions
overseas should dampen U.S. economic growth sufficiently to keep
inflation in check and eliminate any need to raise interest rates in
fiscal 1999.
Bonds issued to finance state and local residential housing
projects suffered from increased mortgage prepayments during the year.
Falling interest rates offered homeowners an opportunity to reduce their
monthly mortgage payments by refinancing their existing loans at a
reduced rate. When loans are prepaid, a mutual fund must reinvest the
money, often at a lower interest rate. To minimize exposure to
prepayment activity, we have reduced each Florida Fund's position in
housing bonds.
CREDIT QUALITY
August 31, 1998
Tax-Free Tax-Free Florida Tax-Free
Florida Fund Insured Fund New York Fund
AAA 53.78% 100% 34.5%
AA 14.89% 0 10.9%
A 7.92% 0 28.9%
BBB 10.35% 0 21.2%
BB 0 0 4.5%
Unrated 13.06% 0 0
The additional income potential available from investments in lower-
quality bonds declined during the past 12 months. For this reason, more
than 68% of the bonds in our Tax-Free Florida Fund were invested in
securities rated AA or better by Standard and Poor's. Tax-Free Florida
Insured Fund was invested exclusively in top-rated AAA securities.
Positive economic conditions in the state resulted in steady or improved
credit quality for all of our Florida municipal bond holdings.
MORE THAN 68% OF THE BONDS IN TAX-FREE FLORIDA FUND WERE INVESTED IN
SECURITIES RATED AA OR BETTER BY STANDARD AND POOR'S AS OF AUGUST 31,
1998.
TAX-FREE NEW YORK FUND
Economic conditions in New York State improved throughout fiscal 1998.
New Yorkers benefited from rising incomes and moderating levels of
personal debt. Increased consumer spending power helped businesses post
higher earnings, and create new jobs.
The performance of New York State's municipal bond market, however,
did not keep pace with the state's economic growth. One setback for
municipal bonds in New York was an overwhelming supply of new bond
issues. New York led the nation in volume of new municipal bond issues
during the first eight months of 1998, with an increase of nearly 65%
over the same period in 1997.
Because Tax-Free New York's investment objective calls for the Fund
to focus on income, total return was limited. During fiscal 1998, the
Fund's portfolio was dominated by older bonds, which performed well for
investors seeking relatively high levels of tax-exempt income. However,
the income-focus of these bonds prevented the Fund from benefiting from
price gains in the market. Consequently, the Fund's total returns
fell short of the Lehman Brothers Municipal Bond Index, the Fund's
unmanaged benchmark as well as the average of the Fund's peers.
PORTFOLIO HIGHLIGHTS
August 31, 1998
Tax-Free Tax-Free Florida Tax-Free
Florida Fund Insured Fund New York Fund
Average Maturity 13.6 years 8.2 years 10.4 years
Average Duration 7.7 years 6.2 years 6.9 years
AMT Income* 4.60% 21.69% 8.54%
Current 30-Day SEC Yield**
(A Class) 4.46% 3.82% 3.76%
(B Class) 3.89% 3.22% 3.17%
(C Class) 3.88% N/A 3.17%
* Amount of income subject to the federal alternative minimum tax for
the eight months ended August 31, 1998.
** Calculated according to Securities and Exchange Commission
guidelines.
For most of the year, pre-refunded bonds represented the largest slice
of Tax-Free New York Fund's asset mix. Municipalities pre-refund bonds
to raise capital that is used to pay off older bonds issued when
interest rates were higher. In New York, many municipalities jumped at
the opportunity to lock in record-low interest rates and reduce debt
payments. Brisk refinancing activity slowed toward the end of the fiscal
year as municipalities found fewer opportunities to reduce their long-
term obligations.
As some of the older bonds in Tax-Free New York Fund mature, we
will attempt to improve our results by extending the average duration.
In the current environment of slowing U.S. economic growth and benign
inflation, we believe the potential for higher interest rates in the
near future is minimal. In our view, a somewhat longer duration may
allow the Fund to benefit from higher bond prices in the future without
adding significantly to risk.
AS SOME OF THE OLDER BONDS IN TAX-FREE NEW YORK FUND MATURE, WE WILL
ATTEMPT TO IMPROVE OUR RESULTS BY EXTENDING THE AVERAGE DURATION.
SUMMARY OUTLOOK
Positive economic conditions in Florida and New York point to a strong
municipal bond market for both states during the coming year. For
individuals, low unemployment, income, and tame inflation have led to
rising confidence in the economy and strong consumer spending.
outlook
At the state and local level, governments are benefiting from
rising tax revenues, expense reduction policies and lower interest
payments resulting from bond pre-refunding. The result has been budget
surpluses that could lead to future state tax cuts. Since many
municipalities have already taken advantage of the opportunity to
refinance their debt, and because the IRS limits how frequently
municipalities can issue pre-refunded bonds, we expect the supply of new
municipal bonds to decrease in the coming year.
Since municipal bonds offer the added advantage of tax-exempt
income, yields on state and local bond issues are generally lower than
those provided by U.S. Treasuries. Average yield for municipal bonds is
considered to be at an attractive level, relative to Treasuries, when it
exceeds 85%. With yields averaging 93.8% of Treasuries, municipal bonds
currently offer investors compelling value.
In our view, ongoing economic turmoil in Asia, Russia and other
emerging markets could have a positive impact on the municipal bond
market in the coming year. Investors seeking to diversify their
portfolio with less volatile investments are likely to find attractive
opportunities in municipal bonds, in our opinion. We also expect
volatility in equity markets, both in the U.S. and overseas, to prompt
more investors to consider the moderate risk and tax-exempt income
potential of municipal bonds.
WITH YIELDS AVERAGING 93.8% OF TREASURIES, WE BELIEVE MUNICIPAL BONDS
CURRENTLY OFFER INVESTORS COMPELLING VALUE.
PERFORMANCE SUMMARY
[GRAPHIC OMITTED: WORM CHART TAX-FREE FLORIDA FUND'S PERFORMANCE]
TAX-FREE FLORIDA FUND'S PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
MARCH 2, 1995 TO AUGUST 31, 1998
Tax-Free Florida Lehman Brothers
Date Fund A Class Municipal Bond Index
Mar.'95 9,625 10,000
Aug.'95 10,088 10,469
Feb.'96 10,806 10,978
Aug.'96 10,795 11,017
Feb.'97 11,347 11,584
Aug.'97 11,895 12,036
Feb.'98 12,611 12,642
Aug.'98 $13,122 $13,077
Chart assumes $10,000 invested March 2, 1995, and includes the effect of
a 3.75% sales charge and the reinvestment of distributions. Performance
of other Fund classes will vary due to differing charges and expenses.
Past performance does not guarantee future results.
TAX-FREE FLORIDA FUND
AVERAGE ANNUAL RETURNS THROUGH AUGUST 31, 1998
Lifetime One Year
Class A (Est. 3/2/95)
Excluding Sales Charge +9.29% +10.31%
Including Sales Charge +8.10% +6.15%
Class B (Est. 9/15/95)
Excluding Sales Charge +8.10% +9.48%
Including Sales Charge +7.22% +5.48%
Class C (Est. 4/22/95)
Excluding Sales Charge +8.02% +9.58%
Including Sales Charge +8.02% +8.58%
Performance for all Funds includes reinvestment of distributions and
applicable sales charge 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 B Class and C Class shares excluding sales
charge assumes either contingent sales charges did not apply or the
investment was not redeemed. Returns reflect a voluntary expense
limitation in effect at the time. Returns would have been lower without
the limitation.
A Class shares of Tax-Free Florida, Tax-Free Florida Insured and Tax-
Free New York Fund have a 3.75% maximum front-end sales charge and a
12b-1 fee.
B Class shares do not have 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.
C Class shares have a 1% annual distribution and service fee. If shares
are redeemed within 12 months, a 1% contingent deferred sales charge
applies.
[GRAPHIC OMITTED: WORM CHART TAX-FREE FLORIDA INSURED FUND'S
PERFORMANCE]
TAX-FREE FLORIDA INSURED FUND'S PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
JANUARY 1, 1992 TO AUGUST 31, 1998
Tax-Free Florida Insured Lehman Brothers Insured
Date Fund A Class Municipal Bond Index
Jan.'92 9,625 10,000
Aug.'92 10,284 10,645
Aug.'93 11,882 12,045
Aug.'94 11,558 11,986
Aug.'95 12,500 13,078
Aug.'96 13,238 13,788
Aug.'97 14,528 15,085
Aug.'98 $15,833 $16,473
Chart assumes $10,000 invested January 1, 1992, and includes the effect
of a 3.75% sales charge and the reinvestment of distributions.
Performance of other Fund classes will vary due to differing charges and
expenses. Past performance does not guarantee future results.
TAX-FREE FLORIDA INSURED FUND
AVERAGE ANNUAL RETURNS THROUGH AUGUST 31, 1998
Lifetime Five Years One Year
Class A (Est. 1/1/92)
Excluding Sales Charge +7.77% +5.92% +8.97%
Including Sales Charge +7.16% +5.12% +4.85%
Class B (Est. 3/11/94)
Excluding Sales Charge +6.28% +8.17%
Including Sales Charge +5.91% +4.17%
See page 7 for important performance information regarding all share
classes and expenses. Return and share value for each Fund fluctuates so
that shares, when redeemed, may be worth more or less than their
original cost. Past performance does not guarantee future results. For
the period September 29, 1997 through December 18, 1997 Florida Insured
Fund C Class sold shares which were subsequently repurchased. At August
31, 1998, there were no shares outstanding. This shareholder activity is
not being disclosed in the Financial Highlights due to its
immateriality.
[GRAPHIC OMITTED: WORM CHART TAX-FREE NEW YORK FUND'S PERFORMANCE]
TAX-FREE NEW YORK FUND'S PERFORMANCE
GROWTH OF A $10,000 INVESTMENT
TOTAL RETURN SEPTEMBER 1, 1988 TO AUGUST 31, 1998
Tax-Free New York Lehman Brothers
Date Fund A Class Municipal Bond Index
Nov-87 9,625 10,000
Aug-88 10,360 10,776
Aug-89 11,589 11,959
Aug-90 12,049 12,728
Aug-91 13,308 14,229
Aug-92 14,932 15,817
Aug-93 16,637 17,747
Aug-94 16,758 17,772
Aug-95 17,737 19,348
Aug-96 18,359 20,361
Aug-97 19,438 22,243
Aug-98 $19,360 $22,428
Chart assumes $10,000 invested September 1, 1988, and includes the
effect of a 3.75% sales charge and the reinvestment of distributions.
Performance of other Fund classes will vary due to differing charges and
expenses. Past performance does not guarantee future results.
TAX-FREE NEW YORK FUND
AVERAGE ANNUAL RETURNS THROUGH AUGUST 31, 1998
Lifetime Ten Years Five Years One Year
Class A (Est. 11/6/87)
Excluding Sales Charge +7.41% +7.25% +4.64% +7.22%
Including Sales Charge +7.03% +6.84% +3.85% +3.16%
Class B (Est. 11/14/94)
Excluding Sales Charge +6.14% +6.45%
Including Sales Charge +5.46% +2.45%
Class C (Est. 4/26/95)
Excluding Sales Charge +4.88% +6.35%
Including Sales Charge +4.88% +5.35%
See page 7 for important performance information regarding all share
classes and expenses. Return and share value for each Fund fluctuates so
that shares, when redeemed, may be worth more or less than their
original cost. Past performance does not guarantee future results.
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
VOYAGEUR INVESTMENT TRUST
DELAWARE - VOYAGEUR TAX-FREE FLORIDA FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1998
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
- -----------------------------------------------------------------------------------
MUNICIPAL BONDS - 95.93%
CONTINUING CARE/RETIREMENT REVENUE BONDS - 7.96%
Jacksonville Health Facilities Authority - Cypress
Village Project National Benevolent Association
Series A 6.125% 12/1/16 $200,000 $ 216,182
Palm Beach Health Facilities Authority - Adult
Community Services 5.625% 11/15/20 250,000 261,735
Volusia County Health Facilities Authority, John
Knox Village Series A 6.00% 6/1/17 250,000 274,363
Volusia Industrial Development Authority -
Bishops Glen Project Retirement Health Facilities
7.50% 11/1/16 330,000 354,476
------------
1,106,756
------------
HIGHER EDUCATION REVENUE BONDS - 3.14%
Pinellas County Educational Facilities Authority -
Clearwater Christian College Private Placement
8.00% 2/1/11 400,000 436,332
------------
436,332
------------
HIGHWAY REVENUE BONDS - 3.18%
Dunes Community Development District - Intracoastal
Waterway Bridge (Guarantor: ITT Industries
Corporation) 5.50% 10/1/07 175,000 183,878
Orlando & Orange County Expressway Authority
Refunding, Junior Lien 5.95% 7/1/23 250,000 258,000
------------
441,878
------------
HOSPITAL REVENUE BONDS - 10.34%
Hillsborough County-Tampa General Hospital (FSA)
6.375% 10/1/13 100,000 110,672
Lee County Hospital Board - Lee Memorial Hospital
(MBIA) 6.35% 3/26/20 500,000 545,230
Leesburg Regional Medical Center Project Series A
6.125% 7/1/12 100,000 107,232
North Miami Health Facilities Authority - Catholic
Health Services LOC Suntrust Bank - Miami
6.00% 8/15/16 500,000 537,180
Puerto Rico Industrial Tourist Educational
Medical & Environmental Control Facilities -
Mennonite General Hospital Series A
5.625% 7/1/27 135,000 138,688
------------
1,439,002
------------
HOUSING REVENUE BONDS - 13.21%
Blackwater Housing Corporation Series A
6.50% 6/1/25 250,000 261,608
Dade County Housing Finance Authority Lincoln
Fields Apartments Section 8 - (FHA/MBIA)
6.25% 7/1/24 500,000 525,550
Duval Housing Finance Authority St. Augustine
Apartments 6.00% 3/1/21 300,000 315,966
Florida Housing Finance Agency - Homeowner Mortgage
Series 1B (FHA/VA) 6.00% 7/1/17 190,000 202,842
Florida Housing Finance Agency - The Vineyards
Project Series H 6.40% 11/1/15 500,000 531,410
------------
1,837,376
------------
OTHER REVENUE BONDS - 9.37%
Dade County Special Obligation Series B (AMBAC)
5.00% 10/1/35 200,000 197,662
Lake Bernadette Community Development District
Special Assessment Series A 8.00% 5/1/17 250,000 264,595
Miami-Dade County Special Obligation Sub-Series B
(MBIA) 5.00% 10/1/37 250,000 246,608
Northern Palm Beach County Improvement District
Special Assessment - Abacoa Water Control (FGIC)
7.20% 8/1/16 300,000 329,139
Tampa Palms Community Development District
Richmond Place Project 7.50% 5/1/18 250,000 264,938
------------
1,302,942
------------
PRE-REFUNDED/ESCROWED TO MATURITY - 2.28%
Palm Beach County Health Facilities Authority - Good
Samaritan Health System 6.30% 10/1/22 - 05 130,000 147,411
St. Lucie County Special Assessment South
Hutchinson Island (AG) 6.10% 11/1/20 - 05 150,000 170,186
------------
317,597
------------
RECREATIONAL FACILITY REVENUE BONDS - 20.64%
Saint Johns County Industrial Development
Authority Professional Golf Hall of Fame Series A
(MBIA) 5.50% 3/1/17 750,000 790,358
Tampa Sports Authority Revenue - County Interlocal
Payments Ice Palace Project (AMBAC)
5.00% 10/1/28 500,000 497,661
Village Center Community Development District
Florida Recreational Revenue Series A (MBIA)
5.50% 11/1/10 750,000 832,238
Village Center Community Development District
Florida Recreational Revenue Series A (MBIA)
5.00% 11/1/21 750,000 750,585
------------
2,870,842
------------
SCHOOL DISTRICT REVENUE BONDS - 5.70%
Hillsborough County School Board
Certificates of Participation Master Lease Program
Series A (MBIA) 5.00% 7/1/23 800,000 793,200
------------
793,200
------------
TRANSPORTATION REVENUE BONDS - 5.13%
Florida State Mid-Bay Bridge Authority Series D
6.125% 10/1/22 160,000 166,549
Greater Orlando Aviation Authority Orlando Airport
Facility (FGIC) (AMT) 5.50% 10/1/17 500,000 547,350
------------
713,899
------------
UTILITY REVENUE BONDS - 0.77%
Puerto Rico Electric Power Authority Series X
5.50% 7/1/25 105,000 107,631
------------
107,631
------------
WASTE DISPOSAL REVENUE BONDS - 5.32%
Dade County Solid Waste Special Obligation (AMBAC)
5.125% 10/1/10 200,000 210,624
Jacksonville Sewer & Solid Waste Disposal
Facilities Authority - Anheuser Busch Project (AMT)
5.875% 2/1/36 150,000 158,711
Polk County Industrial Development Authority Solid
Waste Disposal - Tampa Electric Company Project
(AMT) 5.85% 12/1/30 350,000 371,000
------------
740,335
------------
WATER & SEWER REVENUE BONDS - 8.89%
Jacksonville Electric Authority Revenue Water &
Sewer Systems Series A 5.625% 10/1/37 500,000 516,325
Key West Sewer (FGIC) 5.70% 10/1/26 100,000 105,896
Miramar Wastewater Improvement (FGIC) 6.75%
10/1/25 100,000 114,095
Peace River/Manasota Regional Water Supply
Authority Series A (MBIA) 5.00% 10/1/28 500,000 500,400
------------
1,236,716
------------
Total Municipal Bonds (cost $12,603,926) 13,344,506
------------
NUMBER OF
SHARES
------------
SHORT-TERM INVESTMENTS - 5.00%
Norwest Advantage Municipal Money Market Fund 695,092 695,092
------------
Total Short-Term Investments (cost $695,092) 695,092
------------
- -------------------
Summary of Abbreviations:
AG - Asset Guaranty
AMBAC - Insured by the AMBAC Indemnity Corporation
AMT - Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FSA - Insured by Financial Security Assurance
LOC - Letter of Credit
MBIA - Insured by the Municipal Bond Insurance Association
VA - Insured by the Veterans Administration
TOTAL MARKET VALUE OF SECURITIES OWNED - 100.93%
(COST $13,299,018) $14,039,598
LIABILITIES NET OF RECEIVABLES
AND OTHER ASSETS - (0.93%) (129,173)
------------
NET ASSETS APPLICABLE TO 1,238,151 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% $13,910,425
============
NET ASSET VALUE - TAX-FREE FLORIDA FUND A CLASS
($9,988,281 / 889,238 SHARES) $11.23
======
NET ASSET VALUE - TAX-FREE FLORIDA FUND B CLASS
($3,368,589 / 299,652 SHARES) $11.24
======
NET ASSET VALUE - TAX-FREE FLORIDA FUND C CLASS
($553,555 / 49,261 Shares) $11.24
======
COMPONENTS OF NET ASSETS AT AUGUST 31, 1998:
Common stock, $.01 par value, 10,000,000,000 shares
authorized to the Fund with 1,000,000,000
shares allocated to Tax-Free Florida Fund A Class,
1,000,000,000 shares allocated to Tax-Free
Florida Fund B Class, and 1,000,000,000 shares
allocated to Tax-Free Florida Fund C Class $13,155,392
Accumulated net realized gain on investments 14,453
Net unrealized appreciation of investments 740,580
------------
Total Net Assets $13,910,425
============
- -------------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which each
bond is pre-refunded.
NET ASSET VALUE AND OFFERING PRICE FOR TAX-FREE
FLORIDA FUND A CLASS
Net asset value per share (A) $11.23
Sales charge (3.75% of offering price or 3.92%
of amount invested per share) (B) 0.44
------
Offering Price $11.67
======
- -------------------
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $100,000 or
more for Tax-Free Florida Fund A Class.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR INVESTMENT TRUST
DELAWARE - VOYAGEUR TAX-FREE FLORIDA INSURED FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1998
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
- -----------------------------------------------------------------------------------
MUNICIPAL BONDS - 99.18%
GENERAL OBLIGATION BONDS - 4.01%
Florida Board of Education (FSA) 6.10% 6/1/24 $5,500,000 $ 6,050,660
------------
6,050,660
------------
HOSPITAL REVENUE BONDS - 17.44%
Alachua County Health Facilities Shands Teaching
Hospital Series A (MBIA) 5.80% 12/1/26 5,000,000 5,383,700
Hillsborough County - Tampa General Hospital
(FSA) 6.375% 10/1/13 3,600,000 3,984,192
Indian River County Hospital District
(FSA) 6.10% 10/1/18 3,000,000 3,322,830
Lee County Hospital Board - Lee Memorial Hospital
(MBIA) 6.35% 3/26/20 10,000,000 10,904,600
Tallahassee Health Facilities - Tallahassee
Memorial Regional Medical Center Series B (MBIA)
6.00% 12/1/15 2,500,000 2,713,975
------------
26,309,297
------------
HOUSING REVENUE BONDS - 21.10%
Florida State Housing Finance Agency Crossings
Indian Run Apartments HUD Series V (AMT) LOC
First National Bank of North Carolina (AMBAC)
6.10% 12/1/26 750,000 797,498
Florida State Housing Finance Agency Crossings
Indian Run Apartments HUD Series V (AMT) LOC
First Union National Bank of North Carolina
(AMBAC) 6.20% 12/1/36 1,790,000 1,910,073
Florida State Housing Finance Agency Landings at
Sea Forest Apartments FHA Series T (AMT) LOC
First National Bank of North Carolina (AMBAC)
5.85% 12/1/18 500,000 528,365
Florida State Housing Finance Agency Landings At
Sea Forest Apartments FHA Series T (AMT) LOC
First Union National Bank of North Carolina
6.05% 12/1/36 700,000 747,299
Florida State Housing Finance Agency Leigh Meadows
Apartments Section 8 Series N (AMT) LOC
First Union National Bank of North Carolina
(AMBAC) 6.20% 9/1/26 2,765,000 2,958,356
Florida State Housing Finance Agency Leigh Meadows
Apartments Section 8 Series N (AMT) LOC
First Union National Bank of North Carolina
(AMBAC) 6.30% 9/1/36 2,000,000 2,147,200
Florida State Housing Finance Agency Mariner Club
Apartments Series K-1 (AMT) (AMBAC) 6.25%
9/1/26 2,000,000 2,170,700
Florida State Housing Finance Agency Mariner Club
Apartments Series K-1 (AMT) (AMBAC) 6.375%
9/1/36 3,500,000 3,805,445
Florida State Housing Finance Agency Riverfront
Apartments Section 8 Series A (AMT) (AMBAC)
6.25% 4/1/37 1,000,000 1,072,770
Florida State Housing Finance Agency Spinnaker
Cove Apartments Series G (AMT) LOC
First Union National Bank of North Carolina
(AMBAC) 6.50% 7/1/36 500,000 543,285
Florida State Housing Finance Agency Sterling
Palms Apartments Series D-1 (AMT) LOC
First Union National Bank of North Carolina
(AMBAC) 6.30% 12/1/16 1,000,000 1,087,420
Florida State Housing Finance Agency Sterling
Palms Apartments Series D-1 (AMT) LOC
First Union National Bank of North Carolina
(AMBAC) 6.40% 12/1/26 1,500,000 1,624,545
Florida State Housing Finance Agency Sterling
Palms Apartments Series D-1 (AMT) LOC
First Union National Bank of North Carolina
(AMBAC) 6.50% 6/1/36 6,540,000 7,102,375
Florida State Housing Finance Agency Woodbridge
Apartments Series L (AMT) LOC First
Union National Bank of North Carolina (AMBAC)
6.15% 12/1/26 1,750,000 1,867,687
Florida State Housing Finance Agency Woodbridge
Apartments Series L (AMT) LOC First
Union National Bank of North Carolina (AMBAC)
6.25% 6/1/36 2,000,000 2,141,980
Pembroke Pines Capital Improvement (AMBAC) 5.95%
10/1/20 1,225,000 1,336,500
------------
31,841,498
------------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 3.61%
Canaveral Port Authority (FGIC) 6.00% 6/1/12 1,000,000 1,075,200
Collier County Capital Improvement Sales Tax
(FGIC) 5.75% 10/1/13 1,000,000 1,075,550
Palm Beach Solid Waste Authority (MBIA) 6.00%
12/1/07 1,000,000 1,095,430
Palm Beach Solid Waste Authority (MBIA) 6.25%
12/1/08 2,000,000 2,206,080
------------
5,452,260
------------
LEASE/CERTIFICATES OF PARTICIPATION - 8.52%
Brevard County School Board (AMBAC) 5.50%
7/1/21 4,000,000 4,166,120
Manatee County School Board (MBIA) 6.125%
7/1/16 2,000,000 2,283,340
Palm Beach County School Board, Inverse Floating
Certificate (AMBAC) 6.92% 8/1/15 5,875,000 6,403,104
------------
12,852,564
------------
POWER AUTHORITY REVENUE BONDS - 3.66%
Port St Lucie Utility System (FGIC) 6.00% 9/1/24 5,000,000 5,514,300
------------
5,514,300
------------
SPECIAL UTILITY REVENUE BONDS - 4.40%
New Smyrna Beach Utilities Commission (FGIC)
6.00% 10/1/13 1,000,000 1,086,800
Sunrise Utility System Series A (AMBAC) 5.75%
10/1/26 5,000,000 5,543,650
------------
6,630,450
------------
TRANSPORTATION REVENUE BONDS - 10.40%
Florida State Turnpike Authority (FGIC) 6.30%
7/1/12 2,000,000 2,188,500
Florida State Turnpike Authority Turnpike Revenue
Municipal Securities Trust (FGIC) 5.23% 7/1/12 10,000,000 10,386,500
Orlando & Orange County Expressway Authority
Florida Expressway Revenue Municipal Securities
Trust (AMBAC) 5.23% 7/1/12 3,000,000 3,117,120
------------
15,692,120
------------
WATER & SEWER & REVENUE BONDS - 9.84%
Coral Springs Water & Sewer Series A (FGIC)
6.00% 9/1/10 1,000,000 1,077,510
Jupiter Water Series A (AMBAC) 6.25% 10/1/12 2,000,000 2,155,360
Miramar Wastewater Improvement (FGIC) 6.75%
10/1/25 2,425,000 2,766,804
North Port Utilities System (FGIC) 6.15% 10/1/09 1,500,000 1,653,480
North Port Utilities System (FGIC) 6.25% 10/1/22 5,000,000 5,530,250
Titusville Water & Sewer (MBIA) 6.20% 10/01/14 1,500,000 1,668,990
------------
14,852,394
------------
OTHER REVENUE BONDS - 16.20%
Coral Springs Franchise (AMBAC) 6.10% 9/1/13 1,340,000 1,480,445
Dade County Special Obligation Series B (AMBAC)
5.00% 10/1/35 4,000,000 3,953,240
Florida State Division Board of Finance Department
of General Services Department of Environmental
Resources Preservation 2000 Series A (AMBAC)
5.75% 7/1/13 10,000,000 10,874,700
Jupiter Sales Tax (AMBAC) 6.375% 9/1/20 2,500,000 2,701,550
Marion County Public Improvement Sales Tax (MBIA)
6.125% 12/1/08 1,000,000 1,081,570
Nassau County Optional Gas Tax-Fuel Sales Tax
(FGIC) 6.00% 3/1/09 1,000,000 1,073,880
- -------------------
Summary of Abbreviations:
AMBAC - Insured by the Ambac Indemnity Corporation
AMT - Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by Financial Security Assurance
LOC - Letter of Credit
MBIA - Insured by the Municipal Bond Insurance Association
Ocala Optional Gas Tax - Fuel Sales Tax (AMBAC)
6.00% 12/1/09 1,000,000 1,080,310
Osceola County Celebration Community Development
District Assessment (MBIA) 6.10% 5/1/16 1,000,000 1,094,220
Osceola County Enterprise Community Development
District - Special Assessment (MBIA) 6.10%
5/1/16 1,000,000 1,094,220
------------
24,434,135
------------
Total Municipal Bonds (cost $136,022,408) 149,629,678
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.18%
(COST $136,022,408) $149,629,678
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 0.82% 1,231,946
------------
NET ASSETS APPLICABLE TO 13,265,951 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% $150,861,624
============
NET ASSET VALUE - TAX-FREE FLORIDA INSURED FUND A CLASS
($146,659,488 / 12,896,362 SHARES) $11.37
======
NET ASSET VALUE - TAX-FREE FLORIDA INSURED FUND B CLASS
($4,202,136 / 369,589 SHARES) $11.37
======
COMPONENTS OF NET ASSETS AT AUGUST 31, 1998:
Common stock, $.01 par value, unlimited shares authorized
to the Tax-Free Florida Insured Fund $147,108,132
Accumulated net realized loss on investments (9,853,778)
Net unrealized appreciation of investments 13,607,270
------------
Total net assets $150,861,624
============
NET ASSET VALUE AND OFFERING PRICE FOR TAX-FREE FLORIDA
INSURED FUND A CLASS
Net asset value per share (A) $11.37
Sales charge (3.75% of offering price or 3.87% of
amount invested per share) (B) 0.44
-----
Offering price $11.81
======
- -------------------
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $100,000 or
more for Tax-Free Florida Insured Fund A Class.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE NEW YORK FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1998
PRINCIPAL MARKET
AMOUNT VALUE
<S> <C> <C>
- -----------------------------------------------------------------------------------
MUNICIPAL BONDS - 99.98%
GENERAL OBLIGATION BONDS - 4.34%
New York Series C 5.375% 11/15/27 $450,000 $ 456,584
------------
456,584
------------
HIGHER EDUCATION REVENUE BONDS - 9.18%
New York State Dorm Authority Revenue State
University Educational Facilities - Series B
7.50% 5/15/11 400,000 492,284
New York State Dorm Authority Revenue State
University Educational Facilities - Series B
4.75% 5/15/28 500,000 472,610
------------
964,894
------------
HOSPITAL REVENUE BONDS - 8.39%
New York State Dorm Authority Revenue
Mental Health - Series D 5.90% 2/15/12 250,000 273,175
New York State Dorm Authority Revenue
Millard Fillmore Hospital (AMBAC) 5.375%
2/1/32 450,000 459,860
New York State Medical Care Facility Finance
Agency Revenue - Mental Health 7.70%
2/15/18 145,000 148,746
------------
881,781
------------
HOUSING REVENUE BONDS - 8.34%
New York State Dorm Authority Revenues
Chapel Oaks Inc. LOC Allied Irish Bank
5.45% 7/1/26 450,000 460,611
New York State Mortgage Agency Revenue
Homeowner Mortgage Series BB2 (FHA)
7.85% 10/1/08 410,000 415,129
------------
875,740
------------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 8.95%
New York City Industrial Development Agency
Brooklyn Navy Yard Cogen Partners 5.75%
10/1/36 (AMT) 450,000 465,030
New York City Industrial Development Agency
Northwest Airlines 6.00% 6/1/27 (AMT) 450,000 474,755
------------
939,785
------------
LEASE REVENUE BONDS - 5.23%
New York State Thruway Authority Service Contract
Revenue - Local Highway & Bridge 6.25%
4/1/14 500,000 548,970
------------
548,970
------------
PRE-REFUNDED/ESCROWED TO MATURITY BONDS - 30.41%
Municipal Assistance Corporation For the City of
New York 7.625% 7/1/08-99 250,000 263,245
New York City General Obligation Series F 8.25%
11/15/17-01 690,000 791,485
New York State Dorm Authority Revenue Pooled
Capital Program (FGIC) 7.80% 12/1/05-98 561,000 576,310
New York State Local Government Assistance
Corporation Series B 7.50% 4/1/20-01 600,000 666,144
New York State Urban Development Corporation
Revenue Correctional Facilities 7.375%
1/1/18-02 600,000 676,595
United Nations Development Corporation Senior Lien
Series A 6.00% 7/1/12-03 200,000 221,160
------------
3,194,939
------------
TERRITORIAL REVENUE BONDS - 14.07%
Puerto Rico Commonwealth Highway & Transportation
Authority Highway Revenue Series Y 5.50%
7/1/36 475,000 509,765
Puerto Rico Electric Power Authority Series EE 4.75%
7/1/24 800,000 765,528
Puerto Rico Public Building Authority Revenue
Guaranteed Government Facilities Series B
5.25% 7/1/21 200,000 202,790
------------
1,478,083
------------
TRANSPORTATION REVENUE BONDS - 6.49%
Metropolitan Transportation Authority New York
Service Contract - Commuter Facilities Series 0
5.75% 7/1/13 400,000 441,300
Metropolitan Transportation Authority New York
Transit Facilities Series B 4.75% 7/1/26 250,000 240,283
------------
681,583
------------
WATER & SEWER REVENUE BONDS - 4.58%
New York City Municipal Water Finance Authority -
Water & Sewer System Revenue Series B
5.75% 6/15/29 450,000 481,217
------------
481,217
------------
Total Municipal Bonds (cost $9,767,815) 10,503,576
------------
NUMBER OF
SHARES
------------
SHORT-TERM INVESTMENTS - 3.04%
Norwest Advantage Municipal Money Market Fund 319,130 319,130
------------
Total Short-Term Investments (cost $319,130) 319,130
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 103.02%
(COST $10,086,945) $ 10,822,706
LIABILITIES NET OF RECEIVABLES
AND OTHER ASSETS - (3.02%) (317,673)
------------
NET ASSETS APPLICABLE TO 984,808 SHARES
($.01 PAR VALUE) OUTSTANDING - 100% $ 10,505,033
============
NET ASSET VALUE - TAX-FREE NEW YORK FUND A CLASS
($9,977,768 / 935,283 SHARES) $10.67
======
NET ASSET VALUE - TAX-FREE NEW YORK FUND B CLASS
($469,326 / 44,081 SHARES) $10.65
======
NET ASSET VALUE - TAX-FREE NEW YORK FUND C CLASS
($57,939 / 5,444 SHARES) $10.64
======
- -------------------
Summary of Abbreviations:
AMBAC - Insured by the AMBAC Indemnity Corporation
AMT - Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
LOC - Letter of Credit
COMPONENTS OF NET ASSETS AT AUGUST 31, 1998:
Common stock, $.01 par value, 100,000,000,000 shares
authorized to the Fund with 10,000,000,000 shares
allocated to Tax-Free New York Fund A Class,
10,000,000,000 shares allocated to Tax-Free
New York Fund B Class, and 10,000,000,000
shares allocated to Tax-Free New York Fund C Class $ 9,752,364
Accumulated net realized gain on investments 16,908
Net unrealized appreciation of investments 735,761
------------
Total Net Assets $10,505,033
============
- -------------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which each
bond is pre-refunded.
NET ASSETS VALUE AND OFFERING PRICE
FOR TAX-FREE NEW YORK FUND A CLASS
Net asset value per share (A) $10.67
Sales charge (3.75% of offering price or 3.94% of
amount invested per share)(B) 0.42
------
Offering price $11.09
======
- -------------------
(A) Net asset value per share illustrated is the estimated amount which would be
paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $100,000 or
more for Tax-Free New York Fund A Class.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
VOYAGEUR INVESTMENT VOYAGEUR INVESTMENT VOYAGEUR MUTUAL
TRUST TRUST FUNDS, INC.
TAX-FREE TAX-FREE TAX-FREE
FLORIDA FUND FLORIDA INSURED FUND NEW YORK FUND
-------------------- ---------------------- --------------------
EIGHT MONTHS YEAR EIGHT MONTHS YEAR EIGHT MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
8/31/98 12/31/97 8/31/98 12/31/97 8/31/98 12/31/97
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT
INCOME:
Interest $441,543 $486,852 $5,880,971 $10,294,492 $409,036 $656,851
----------- ----------- ----------- ----------- ----------- -----------
EXPENSES:
Management
fees 39,404 39,943 529,873 876,745 33,403 47,095
Distribution
expense 34,707 31,463 282,514 209,208 18,510 26,611
Dividend
disbursing
and transfer
agent fees
and expenses 6,096 10,902 84,767 167,231 8,725 17,278
Registration
fees 672 1,480 19,930 13,539 4,505 10,422
Reports and
statements
to
shareholders 12,900 8,289 20,272 56,077 3,840 10,793
Accounting and
administration 2,112 2,692 44,374 64,529 2,765 3,668
Custodian fees 1,141 5,132 17,500 42,243 1,550 2,422
Professional
fees 309 13 44,927 20,890 214 19,633
Taxes (other
than taxes
on income) -- -- 11,507 15,533 1,600 660
Directors'
fees 480 585 7,081 4,580 452 587
Other 4,337 -- 58,592 55,468 2,847 --
----------- ----------- ----------- ----------- ----------- -----------
102,158 100,499 1,121,337 1,526,043 78,411 139,169
Less
expenses
waived or
absorbed (43,020) (43,990) (188,897) (109,770) (9,796) (38,649)
----------- ----------- ----------- ----------- ----------- -----------
Total
operating
expenses 59,138 56,509 932,440 1,416,273 68,615 100,520
Interest
expense -- -- -- -- 85 --
----------- ----------- ----------- ----------- ----------- -----------
NET
INVESTMENT
INCOME 382,405 430,343 4,948,531 8,878,219 340,336 556,331
----------- ----------- ----------- ----------- ----------- -----------
NET
REALIZED
AND
UNREALIZED
GAIN (LOSS)
ON INVESTMENTS:
Net realized
gain on
investments 17,721 28,365 1,552,120 2,172,843 20,031 187,711
Net change in
unrealized
appreciation/
depreciation
of
investments 222,208 380,127 280,912 5,978,357 22,820 (71,772)
----------- ----------- ----------- ----------- ----------- -----------
NET REALIZED
AND
UNREALIZED
GAIN
ON
INVESTMENTS 239,929 408,492 1,833,032 8,151,200 42,851 115,939
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE
IN NET
ASSETS
RESULTING
FROM
OPERATIONS $622,334 $838,835 $6,781,563 $17,029,419 $383,187 $672,270
=========== =========== =========== =========== =========== ===========
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
VOYAGEUR INVESTMENT VOYAGEUR INVESTMENT
TRUST TAX-FREE TRUST TAX-FREE
FLORIDA FUND FLORIDA INSURED FUND
-------------------------------- ----------------------------------
EIGHT MONTHS YEAR YEAR EIGHT MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
8/31/98 12/31/97 12/31/96 8/31/98 12/31/97 12/31/96
<S> <C> <C> <C> <C> <C> <C>
INCREASE
IN NET
ASSETS
FROM
OPERATIONS:
Net investment
income $ 382,405 $ 430,343 $ 334,925 $ 4,948,531 $ 8,878,219 $ 10,796,875
Net realized
gain (loss)
on investments 17,721 28,365 (8,936) 1,552,120 2,172,843 (735,445)
Net change in
unrealized
appreciation/
depreciation
of investments 222,208 380,127 (77,041) 280,912 5,978,357 (4,859,101)
----------- ----------- ----------- ----------- ----------- -----------
Net increase
in net assets
resulting
from
operations 622,334 838,835 248,948 6,781,563 17,029,419 5,202,329
----------- ----------- ----------- ----------- ----------- -----------
DISTRIBUTIONS
TO
SHAREHOLDERS
FROM:
Net investment
income:
A Class (296,074) (330,131) (284,033) (4,846,965) (8,815,981) (10,629,841)
B Class (77,237) (100,213) (47,151) (101,566) (165,230) (135,565)
C Class (9,128) (3,278) (466) -- (200) --
----------- ----------- ----------- ----------- ----------- -----------
(382,439) (433,622) (331,650) (4,948,531) (8,981,411) (10,765,406)
----------- ----------- ----------- ----------- ----------- -----------
Net realized
gain on
investment
transactions:
A Class (4,266) (11,878) -- -- -- --
B Class (1,470) (4,598) -- -- -- --
C Class (246) (239) -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
(5,982) (16,715) -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from
shares sold:
A Class 2,841,918 2,855,133 2,129,354 2,118,858 4,527,089 6,904,605
B Class 1,428,837 1,142,910 1,541,795 758,358 820,580 741,141
C Class 419,228 110,984 15,000 -- 21,663 --
Net asset value
of shares
issued upon
reinvestment
of dividends
from net
investment
income and net
realized gain
on investment
transactions:
A Class 120,860 109,685 91,414 1,398,970 2,516,492 2,820,722
B Class 14,952 18,887 6,313 34,650 49,154 40,001
C Class 4,259 2,636 121 -- 126 --
----------- ----------- ----------- ----------- ----------- -----------
4,830,054 4,240,235 3,783,997 4,310,836 7,935,104 10,506,469
----------- ----------- ----------- ----------- ----------- -----------
Cost of
shares
repurchased:
A Class (651,778) (1,502,655) (781,790) 20,739,783) (44,980,021) (54,474,488)
B Class (814,622) (213,644) (30,651) (582,617) (333,793) (315,311)
C Class (11,000) -- (8,392) -- (22,065) --
----------- ----------- ----------- ----------- ----------- -----------
(1,477,400) (1,716,299) (820,833) (21,322,400) (45,335,879) (54,789,799)
----------- ----------- ----------- ----------- ----------- -----------
Increase
(decrease)
in net
assets
derived
from capital
share
transactions 3,352,654 2,523,936 2,963,164 (17,011,564) (37,400,775) (44,283,330)
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE
(DECREASE)
IN NET
ASSETS 3,586,567 2,912,434 2,880,462 (15,178,532) (29,352,767) (49,846,407)
NET ASSETS:
Beginning of
period 10,323,858 7,411,424 4,530,962 166,040,156 195,392,923 245,239,330
----------- ----------- ---------- ------------ ----------- ------------
End of
period $13,910,425 $10,323,858 $7,411,424 $150,861,624 $166,040,156 $195,392,923
=========== =========== ========== ============ ============ ============
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE NEW YORK FUND
------------------------------------------------------------
EIGHT MONTHS YEAR THREE MONTHS YEAR
ENDED ENDED ENDED ENDED
8/31/98 12/31/97 12/31/96 9/30/96
<S> <C> <C> <C> <C>
INCREASE IN NET
ASSETS FROM
OPERATIONS:
Net investment income $ 340,336 $ 556,331 $ 142,633 $ 623,153
Net realized gain
on investments 20,031 187,711 11,285 13,314
Net change in
unrealized
appreciation/
depreciation of
investments 22,820 (71,772) (6,168) (164,569)
----------- ----------- ----------- ------------
Net increase
in net assets
resulting from
operations 383,187 672,270 147,750 471,898
----------- ----------- ----------- ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income:
A Class (331,533) (548,002) (139,837) (601,484)
B Class (7,311) (8,649) (3,811) (13,195)
C Class (1,658) (2,665) (606) (2,249)
----------- ----------- ----------- ------------
(340,502) (559,316) (144,254) (616,928)
----------- ----------- ----------- ------------
Net realized gain on
investment
transactions:
A Class (9,366) (154,974) (37,358) (16,591)
B Class (428) (2,715) (921) (396)
C Class (54) (902) (191) (73)
----------- ----------- ---------- ------------
(9,848) (158,591) (38,470) (17,060)
----------- ----------- ----------- ------------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold:
A Class 750,401 657,442 12,100 252,630
B Class 308,323 72,748 69,592 175,631
C Class -- -- -- --
Net asset value of
shares issued upon
reinvestment
of dividends from
net investment income
and net
realized gain on
investment
transactions:
A Class 255,096 574,581 103,103 482,791
B Class 6,080 10,758 3,436 10,597
C Class 1,717 3,708 591 2,322
----------- ----------- ----------- -----------
1,321,617 1,319,237 188,822 923,971
----------- ----------- ----------- -----------
Cost of shares
repurchased:
A Class (619,981) (1,671,287) (584,980) (1,960,805)
B Class (15,315) (167,603) (266,224) --
C Class -- (236) (76) --
----------- ----------- ----------- -----------
(635,296) (1,839,126) (851,280) (1,960,805)
----------- ----------- ----------- -----------
Increase (decrease)
in net assets
derived from capital
share transactions 686,321 (519,889) (662,458) (1,036,834)
----------- ----------- ----------- -----------
NET INCREASE
(DECREASE) IN NET
ASSETS 719,158 (565,526) (697,432) (1,198,924)
NET ASSETS:
Beginning of period 9,785,875 10,351,401 11,048,833 12,247,757
----------- ----------- ----------- -----------
End of period $10,505,033 $ 9,785,875 $10,351,401 $11,048,833
=========== =========== =========== ===========
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
August 31, 1998
Selected data for each share of the Fund outstanding throughout each period were as
follows:
VOYAGEUR INVESTMENT TRUST
TAX-FREE FLORIDA FUND - A CLASS
-----------------------------------------------
PERIOD FROM
EIGHT MONTHS YEAR YEAR 3/2/952
ENDED ENDED ENDED TO
8/31/981 12/31/974 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $11.020 $10.520 $10.730 $10.000
Income from investment
operations:
Net investment income 0.374 0.591 0.590 0.470
Net realized and unrealized
gain (loss) on investments 0.215 0.523 (0.210) 0.750
---------- ---------- ---------- ----------
Total from investment
operations 0.589 1.114 0.380 1.220
---------- ---------- ---------- ----------
Less dividends and
distributions:
Dividends from net
investment income (0.374) (0.594) (0.590) (0.470)
Distributions from net
realized gain on
investment transactions (0.005) (0.020) -- (0.020)
---------- ---------- ---------- ----------
Total dividends and
distributions (0.379) (0.614) (0.590) (0.490)
---------- ---------- ---------- ----------
Net asset value, end of
period $11.230 $11.020 $10.520 $10.730
---------- ---------- ---------- ----------
Total Return3 5.44% 10.93% 3.74% 12.49%
Ratios and supplemental
data:
Net assets, end of period
(000 omitted) $9,988 $7,506 $5,761 $4,421
Ratio of expenses to
average net assets 0.55% 0.56% 0.33% 0.32%5
Ratio of expenses to
average net assets prior
to expense limitation 1.10% 1.11% 1.25% 1.25%5
Ratio of net investment
income to average net
assets 4.92% 5.53% 5.66% 5.26%5
Ratio of net investment
income to average net
assets prior to expense
limitation 4.37% 4.98% 4.74% 4.33%5
Portfolio turnover 20% 19% 70% 64%
<CAPTION>
VOYAGEUR INVESTMENT TRUST
TAX-FREE FLORIDA FUND - B CLASS
-----------------------------------------------
PERIOD FROM
EIGHT MONTHS YEAR YEAR 9/15/952
ENDED ENDED ENDED TO
8/31/981 12/31/974 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $11.030 $10.530 $10.730 $10.370
Income from investment
operations:
Net investment income 0.318 0.527 0.560 0.150
Net realized and unrealized
gain (loss) on investments 0.215 0.531 (0.200) 0.380
---------- ---------- ---------- ----------
Total from investment
operations 0.533 1.058 0.360 0.530
---------- ---------- ---------- ----------
Less dividends and
distributions:
Dividends from net
investment income (0.318) (0.538) (0.560) (0.150)
Distributions from net
realized gain on
investment transactions (0.005) (0.020) -- (0.020)
---------- ---------- ---------- ----------
Total dividends and
distributions (0.323) (0.558) (0.560) (0.170)
---------- ---------- ---------- ----------
Net asset value, end of
period $11.240 $11.030 $10.530 $10.730
---------- ---------- ---------- ----------
Total Return3 4.91% 10.35% 3.51% 5.10%
Ratios and supplemental
data:
Net assets, end of period
(000 omitted) $3,368 $2,685 $1,635 $101
Ratio of expenses to
average net assets 1.30% 1.10% 0.76% 0.44%5
Ratio of expenses to
average net assets prior
to expense limitation 1.85% 1.65% 2.00% 2.00%5
Ratio of net investment
income to average net
assets 4.17% 4.99% 5.23% 4.88%5
Ratio of net investment
income to average net
assets prior to expense
limitation 3.62% 4.44% 3.99% 3.32%5
Portfolio turnover 20% 19% 70% 64%
- ------------------------
1 Ratios have been annualized and total return has not been annualized.
2 Commencement of operations.
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 Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers,
Inc. as the Fund's investment manager.
5 Annualized
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period were as
follows:
VOYAGEUR INVESTMENT TRUST
TAX-FREE FLORIDA FUND - C CLASS
----------------------------------------
PERIOD FROM
EIGHT MONTHS YEAR YEAR 4/22/952
ENDED ENDED ENDED TO
8/31/981 12/31/974 12/31/96 12/31/95
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $11.020 $10.520 $10.730 $10.200
Income from investment
operations:
Net investment income 0.318 0.511 0.370 0.330
Net realized and
unrealized gain (loss)
on investments 0.225 0.521 (0.210) 0.560
------------ ------------ ------------ ------------
Total from
investment
operations 0.543 1.032 0.160 0.890
------------ ------------ ------------ ------------
Less dividends and
distributions:
Dividends from
net investment
income (0.318) (0.512) (0.370) (0.340)
Distributions
from net realized
gain on investment
transactions (0.005) (0.020) -- (0.020)
------------ ------------ ------------ ------------
Total dividends
and distributions (0.323) (0.532) (0.370) (0.360)
------------ ------------ ------------ ------------
Net asset value,
end of period $11.240 $11.020 $10.520 $10.730
============ ============ ============ ============
Total Return3 5.01% 10.09% 2.97% 8.88%
Ratios and supplemental
data:
Net assets, end
of period (000
omitted) $554 $133 $16 $9
Ratio of expenses
to average net assets 1.30% 1.31% 1.15% 1.11%5
Ratio of expenses to
average net assets
prior to expense
limitation 1.85% 1.86% 2.00% 2.00%5
Ratio of net
investment income
to average net assets 4.17% 4.78% 4.83% 4.57%5
Ratio of net investment
income to average net
assets prior to expense
limitation 3.62% 4.23% 3.98% 3.68%5
Portfolio turnover 20% 19% 70% 64%
- ------------------------
1 Ratios have been annualized and total return has not been annualized.
2 Commencement of operations.
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 Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers,
Inc. as the Fund's investment manager.
5 Annualized
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period were as
follows:
VOYAGEUR INVESTMENT TRUST
TAX-FREE FLORIDA INSURED FUND - A CLASS
-------------------------------------------------------------------
EIGHT MONTHS YEAR YEAR YEAR TWO MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
8/31/981 12/31/973 12/31/96 12/31/95 12/31/94 10/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $11.240 $10.710 $10.940 $9.520 $9.640 $11.150
Income from
investment
operations:
Net
investment
income 0.355 0.548 0.530 0.540 0.100 0.550
Net realized
and
unrealized
gain (loss)
on investments 0.130 0.536 (0.230) 1.440 (0.120) (1.460)
--------- --------- --------- --------- ----------- -----------
Total from
investment
operations 0.485 1.084 0.300 1.980 (0.020) (0.910)
--------- --------- --------- --------- ----------- -----------
Less dividends
and distributions:
Dividends
from net
investment
income (0.355) (0.554) (0.530) (0.560) (0.090) (0.540)
Distributions
from net
realized gain
on investment
transactions -- -- -- -- (0.010) (0.060)
--------- --------- --------- --------- ----------- -----------
Total
dividends
and
distributions (0.355) (0.554) (0.530) (0.560) (0.100) (0.600)
--------- --------- --------- --------- ----------- -----------
Net asset value,
end of period $11.370 $11.240 $10.710 $10.940 $9.520 $9.640
========= ========= ========= ========= ========= =========
Total Return2 4.38% 10.42% 2.90% 21.22% (0.11%) (8.38%)
Ratios and
supplemental
data:
Net assets,
end of
period
(000
omitted) $146,659 $162,097 $192,171 $242,425 $240,228 $259,702
Ratio of
expenses to
average net
assets 0.87% 0.79% 0.73% 0.51% 0.20%4 0.44%
Ratio of
expenses to
average net
assets prior
to expense
limitation 1.05% 0.85% 0.96% 0.95% 1.06%4 0.96%
Ratio of net
investment
income to
average net
assets 4.72% 5.07% 5.02% 5.24% 6.24%4 5.24%
Ratio of net
investment
income to
average net
assets prior to
expense
limitation 4.54% 5.01% 4.79% 4.80% 5.38%4 4.72%
Portfolio turnover 13% 15% 57% 101% 3% 49%
- ---------------------------
1 Ratios have been annualized and total return has not been annualized.
2 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.
3 Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers,
Inc. as the Fund's investment manager.
4 Annualized
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period were as
follows:
VOYAGEUR INVESTMENT TRUST
TAX-FREE FLORIDA INSURED FUND - B CLASS
--------------------------------------------------------------------
PERIOD
FROM
EIGHT MONTHS YEAR YEAR YEAR TWO MONTHS 3/11/942
ENDED ENDED ENDED ENDED ENDED TO
8/31/981 12/31/973 12/31/96 12/31/95 12/31/94 10/31/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period $11.230 $10.710 $10.940 $9.520 $9.630 $10.640
--------- --------- --------- --------- ----------- -----------
Income from
investment
operations:
Net investment
income 0.299 0.477 0.480 0.500 0.090 0.310
Net realized
and unrealized
gain (loss) on
investments 0.139 0.523 (0.230) 1.440 (0.110) (1.010)
--------- --------- --------- --------- ----------- -----------
Total from
investment
operations 0.438 1.000 0.250 1.940 (0.020) (0.700)
--------- --------- --------- --------- ----------- -----------
Less dividends and
distributions:
Dividends
from net
investment
income (0.298) (0.480) (0.480) (0.520) (0.080) (0.300)
Distributions
from net
realized gain
on investment
transactions -- -- -- -- (0.010) (0.010)
--------- --------- --------- --------- ----------- -----------
Total
dividends and
distributions (0.298) (0.480) (0.480) (0.520) (0.090) (0.310)
--------- --------- --------- --------- ----------- -----------
Net asset value,
end of period $11.370 $11.230 $10.710 $10.940 $9.520 $9.630
========= ========= ========= ========= ========= =========
Total Return3 3.95% 9.58% 2.40% 20.76% (0.03%) (6.69%)
Ratios and
supplemental data:
Net assets,
end of period
(000 omitted) $4,202 $3,943 $3,222 $2,814 $1,477 $1,135
Ratio of
expenses to
average net
assets 1.62% 1.46% 1.24% 0.89% 0.59%5 1.00%5
Ratio of
expenses to
average net
assets prior
to expense
limitation 1.80% 1.52% 1.72% 1.68% 1.81%5 1.28%5
Ratio of net
investment
income to
average net
assets 3.97% 4.40% 4.51% 4.80% 5.68%5 4.63%5
Ratio of net
investment
income to
average net
assets prior
to expense
limitation 3.79% 4.34% 4.03% 4.01% 4.46%5 4.35%5
Portfolio
turnover 13% 15% 57% 101% 3% 49%
- ---------------------------
1 Ratios have been annualized and total return has not been annualized.
2 Commencement of operations.
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 Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers,
Inc. as the Fund's investment manager.
5 Annualized
For the period September 29, 1997 through December 18, 1997 Florida Insured Fund C
Class sold shares which were subsequently repurchased. At August 31, 1998, there
were no shares outstanding. This shareholder activity is not being disclosed in the
Highlights due to its immateriality.
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period were as
follows:
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE NEW YORK FUND - A CLASS
------------------------------------------------
EIGHT MONTHS YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
8/31/981 12/31/974 12/31/962 9/30/96
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $10.640 $10.690 $10.720 $10.870
--------- --------- --------- ---------
Income from investment
operations:
Net investment income 0.362 0.603 0.120 0.550
Net realized and unrealized
gain (loss) on investments 0.040 0.128 0.010 (0.130)
--------- --------- --------- ---------
Total from investment
operations 0.402 0.731 0.130 0.420
--------- --------- --------- ---------
Less dividends and
distributions:
Dividends from net
investment income (0.362) (0.606) (0.120) (0.550)
Distributions from net
realized gain on
investment transactions (0.010) (0.175) (0.040) (0.020)
--------- --------- --------- ---------
Total dividends and
distributions (0.372) (0.781) (0.160) (0.570)
--------- --------- --------- ---------
Net asset value, end of
period $10.670 $10.640 $10.690 $10.720
========= ========= ========= =========
Total Return3 3.85% 7.09% 1.21% 3.94%
Ratios and supplemental data:
Net assets, end of
period (000 omitted) $9,978 $9,563 $10,044 $10,548
Ratio of expenses to
average net assets 1.00% 1.00% 0.97%5 1.34%
Ratio of expenses to
average net assets
prior to expense
limitation 1.15% 1.39% 1.12%5 1.55%
Ratio of net investment
income to average net
assets 5.12% 5.66% 5.31%5 5.14%
Ratio of net investment
income to average net
assets prior to expense
limitation 4.97% 5.27% 5.16%5 4.93%
Portfolio turnover 21% 30% 5% 12%
<CAPTION>
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE NEW YORK FUND - A CLASS
------------------------------------------------
YEAR THREE MONTHS YEAR
ENDED ENDED ENDED
9/30/95 9/30/94 6/30/94
<S> <C> <C> <C>
Net asset value,
beginning of period $10.740 $10.810 $11.510
Income from investment
operations:
Net investment income 0.570 0.150 0.620
Net realized and unrealized
gain (loss) on investments 0.170 (0.060) (0.540)
----------- ----------- -----------
Total from investment
operations 0.740 0.090 0.080
----------- ----------- -----------
Less dividends and
distributions:
Dividends from net
investment income (0.590) (0.160) (0.620)
Distributions from net
realized gain on
investment transactions (0.020) -- (0.160)
----------- ----------- -----------
Total dividends and
distributions (0.610) (0.160) (0.780)
----------- ----------- -----------
Net asset value, end of
period $10.870 $10.740 $10.810
=========== =========== ===========
Total Return3 7.31% 0.79% 0.63%
Ratios and supplemental data:
Net assets, end of
period (000 omitted) $11,931 $12,797 $12,851
Ratio of expenses to
average net assets 1.31% 1.09%5 0.99%
Ratio of expenses to
average net assets
prior to expense
limitation 1.82% 1.09%5 1.09%
Ratio of net investment
income to average net
assets 5.66% 5.74%5 5.55%
Ratio of net investment
income to average net
assets prior to expense
limitation 5.15% 5.74%5 5.45%
Portfolio turnover 10% 0% 4%
- ---------------------------
1 Ratios have been annualized and total return has not been annualized.
2 Effective November 16, 1996, the Fund's shareholders approved a change
of investment advisor from Fortis Advisers, Inc. to Voyageur Fund
Managers, Inc..
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 Commencing May 1, 1997, Delaware Management Company replaced
Voyageur Fund Managers, Inc. as the Fund's investment manager.
5 Annualized
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period were as
follows:
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE NEW YORK FUND - B CLASS
--------------------------------------------------------------
PERIOD FROM
EIGHT MONTHS YEAR THREE MONTHS YEAR 11/14/942
ENDED ENDED ENDED ENDED TO
8/31/981 12/31/975 12/31/963 9/30/96 9/30/95
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $10.610 $10.650 $10.690 $10.840 $10.340
Income from
investment
operations:
Net investment
income 0.311 0.524 0.100 0.470 0.430
Net realized
and unrealized
gain (loss) on
investments 0.049 0.136 -- (0.130) 0.540
--------- --------- --------- --------- ---------
Total from
investment
operations 0.360 0.660 0.100 0.340 0.970
--------- --------- --------- --------- ---------
Less dividends and
distributions:
Dividends from
net investment
income (0.310) (0.525) (0.100) (0.470) (0.450)
Distributions
from net
realized gain
on investment
transactions (0.010) (0.175) (0.040) (0.020) (0.020)
--------- --------- --------- --------- ---------
Total dividends
and distributions (0.320) (0.700) (0.140) (0.490) (0.470)
--------- --------- --------- --------- ---------
Net asset value,
end of period $10.650 $10.610 $10.650 $10.690 $10.840
========= ========= ========= ========= =========
Total Return4 3.44% 6.39% 0.95% 3.14% 9.46%
Ratios and
supplemental data:
Net assets,
end of period
(000 omitted) $469 $167 $254 $448 $266
Ratio of expenses
to average net
assets 1.75% 1.75% 1.87%6 2.09% 2.09%6
Ratio of expenses
to average net
assets prior to
expense limitation 1.90% 2.14% 2.00%6 2.30% 2.60%6
Ratio of net
investment income
to average net
assets 4.37% 4.91% 4.43%6 4.39% 4.68%6
Ratio of net
investment income
to average net
assets prior to
expense
limitation 4.22% 4.52% 4.30%6 4.18% 4.17%6
Portfolio turnover 21% 30% 5% 12% 10%
- ---------------------------
1 Ratios have been annualized and total return has not been annualized.
2 Commencement of operations.
3 Effective November 16, 1996, the Fund's shareholders approved a change of investment
advisor from Fortis Advisers, Inc. to Voyageur Fund Managers, Inc.
4 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.
5 Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers,
Inc. as the Fund's investment manager.
6 Annualized
See accompanying notes
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for each share of the Fund outstanding throughout each period were as
follows:
VOYAGEUR MUTUAL FUNDS, INC.
TAX-FREE NEW YORK FUND - C CLASS
--------------------------------------------------------------
PERIOD FROM
EIGHT MONTHS YEAR THREE MONTHS YEAR 11/14/942
ENDED ENDED ENDED ENDED TO
8/31/981 12/31/975 12/31/963 9/30/96 9/30/95
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $10.610 $10.660 $10.700 $10.850 $10.790
Income from
investment
operations:
Net investment
income 0.308 0.522 0.100 0.470 0.210
Net realized and
unrealized gain
(loss) on
investments 0.042 0.128 -- (0.130) 0.060
--------- --------- --------- --------- ---------
Total from
investment
operations 0.350 0.650 0.100 0.340 0.270
--------- --------- --------- --------- ---------
Less dividends and
distributions:
Dividends from
net investment
income (0.310) (0.525) (0.100) (0.470) (0.210)
Distributions
from net realized
gain on
investment
transactions (0.010) (0.175) (0.040) (0.020) --
--------- --------- --------- --------- ---------
Total dividends
and
distributions (0.320) (0.700) (0.140) (0.490) (0.210)
--------- --------- --------- --------- ---------
Net asset value,
end of period $10.640 $10.610 $10.660 $10.700 $10.850
========= ========= ========= ========= =========
Total Return4 3.35% 6.29% 0.95% 3.14% 2.54%
Ratios and
supplemental data:
Net assets,
end of period
(000 omitted) $58 $56 $53 $52 $51
Ratio of expenses
to average net
assets 1.75% 1.75% 1.84%6 2.09% 2.09%6
Ratio of expenses
to average net
assets prior to
expense limitation 1.90% 2.14% 2.00%6 2.30% 2.60%6
Ratio of net
investment income
to average net
assets 4.37% 4.91% 4.45%6 4.39% 4.44%6
Ratio of net
investment income
to average net
assets prior to
expense
limitation 4.22% 4.52% 4.29%6 4.18% 3.93%6
Portfolio turnover 21% 30% 5% 12% 10%
- ---------------------------
1 Ratios have been annualized and total return has not been annualized.
2 Commencement of operations.
3 Effective November 16, 1996, the Fund's shareholders approved a change of investment
advisor from Fortis Advisers, Inc. to Voyageur Fund Managers, Inc.
4 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.
5 Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund Managers,
Inc. as the Fund's investment manager.
6 Annualized
See accompanying notes
</TABLE>
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 1998
Delaware-Voyageur Tax-Free Florida Fund ("Tax-Free Florida Fund") and
Delaware-Voyageur Tax-Free Florida Insured Fund ("Tax-Free Florida
Insured Fund"), series of the Voyageur Investment Trust (each referred
to as a "Fund" or collectively as the "Funds") are Massachusetts
business trusts registered under the Investment Company Act of 1940 (as
amended) as open-end management investment companies. The Tax-Free
Florida Fund is registered as a non-diversified fund. The Tax-Free
Florida Insured Fund is registered as a diversified fund. Delaware-
Voyageur Tax-Free New York Fund ("Tax-Free New York Fund"), a series of
Voyageur Mutual Funds, Inc., is registered under the Investment Company
Act of 1940 (as amended) as a non-diversified, open-end management
investment company. The Tax-Free Florida Fund seeks high current income
free from both federal income taxes and state intangibles tax by
investing in investment grade municipal bonds. The Tax-Free Florida
Insured Fund seeks high current income free from both federal income
taxes and state intangibles tax with the added safety of an insured
portfolio by investing in insured municipal bonds. The Tax-Free New York
Fund seeks high current income free from both federal and state income
taxes by investing in investment grade municipal bonds. The Funds each
offer three classes of shares. The A Class carries a front-end sales
charge of 3.75%. The B Class carries a deferred sales charge and the C
Class carries a level load deferred sales charge.
The Funds have changed their fiscal year ends from December 31 to August
31 to match the fiscal year of Delaware Investment's National Municipal
Bond Funds.
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 acquired 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, and Delaware Service
Company, Inc. ("DSC") became the transfer, dividend-disbursing,
shareholder servicing and accounting and administration service agent
for the Funds. DMC, DDLP, and DSC assumed these services under
substantially similar fee structures that were in effect prior to
the acquisition.
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 Funds' 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 Investments
Family of 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 specific securities sold. Interest income is recorded on the
accrual basis. Original issue discounts and market premiums 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, if any, 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
In accordance with the terms of the Investment Management Agreement, the
Funds pay DMC, the Investment Manager of each Fund, an annual fee, which
is calculated daily on the net assets of each Fund.
DMC has elected to waive its fees and reimburse each Fund to the extent
that annual operating expenses exclusive of taxes, interest, brokerage
commissions, distribution expenses and extraordinary expenses do not
exceed the following percentages of average daily net assets through
August 31, 1998.
TAX-FREE TAX-FREE FLORIDA TAX-FREE
FLORIDA FUND INSURED FUND NEW YORK FUND
------------ ------------ ------------
Management fee as a
percentage of average
daily net assets
(per annum) 0.50% 0.50% 0.50%
Operating expense
limitation as a
percentage of average
daily net assets
(per annum) 0.31% 0.62%* 0.75%
* Prior to May 1, 1998, such expenses were limited to 0.64% for Tax-Free
Florida Insured Fund.
The Funds have engaged DSC, an affiliate of DMC, to provide dividend
disbursing, transfer agent and accounting services for each Fund. Each
Fund pays DSC a monthly fee based on number of shareholder accounts,
shareholder transactions and average net assets, subject to certain
minimums.
On August 31, 1998, the Funds had payables to affiliates as follows:
TAX-FREE TAX-FREE FLORIDA TAX-FREE
FLORIDA FUND INSURED FUND NEW YORK FUND
------------ ------------ ------------
Investment Management fees
payable to DMC. $ -- $48,100 $1,001
Dividend disbursing,
transfer agent
fees, accounting
services and other
expenses payable
to DSC 1,130 14,675 1,283
Other expenses payable
to DMC and affiliates 5,580 46,111 2,873
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 Fund.
DDLP earned commissions on sales of the Fund A Class shares for each
Fund as follows:
TAX-FREE TAX-FREE FLORIDA TAX-FREE
FLORIDA FUND INSURED FUND NEW YORK FUND
------------ ------------ ------------
Eight months ended
August 31, 1998 $7,799 $7,037 $2,123
Eight months ended
December 31, 1997 3,121 9,044 1,182
Certain officers of DMC, DSC and DDLP are officers, directors and/or
employees of the Funds. These officers, directors and employees are paid
no compensation by the Funds.
4. Investments
During the eight months ended August 31, 1998, the Funds made purchases
and sales of investment securities other than U.S. government securities
and temporary cash investments for each Fund as follows:
TAX-FREE TAX-FREE FLORIDA TAX-FREE
FLORIDA FUND INSURED FUND NEW YORK FUND
------------ ------------ ------------
Purchases $4,798,044 $13,392,770 $1,905,794
Sales 1,583,118 26,699,495 1,382,134
At August 31, 1998, the aggregate cost of securities and unrealized
appreciation (depreciation) for federal income tax purposes for each
Fund were as follows:
TAX-FREE TAX-FREE FLORIDA TAX-FREE
FLORIDA FUND INSURED FUND NEW YORK FUND
------------ ------------ ------------
Cost of Investments $13,484,792 $136,022,408 $10,086,945
============ ============ ============
Aggregate unrealized
appreciation 740,580 13,607,270 735,761
Aggregate unrealized
depreciation -- -- --
------------ ------------ ------------
Net unrealized
appreciation $ 740,580 $ 13,607,270 $ 735,761
============ ============ ============
For federal income tax purposes as of August 31, 1998, Tax-Free Florida
Insured Fund had a capital loss carryover of $9,830,861 that will expire
in 2003 through 2004.
<TABLE>
<CAPTION>
5. Capital Stock
Transactions in capital stock shares were as follows:
TAX-FREE TAX-FREE FLORIDA
FLORIDA FUND INSURED FUND
-------------------------- -----------------------------
EIGHT EIGHT
MONTHS YEAR YEAR MONTHS YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
8/31/98 12/31/97 12/31/96 8/31/98 12/31/97 12/31/96
------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class 256,196 264,535 203,132 187,745 417,805 647,757
B Class 128,599 105,990 148,113 67,195 76,153 69,745
C Class 37,815 10,329 1,479 -- 1,960 --
Shares issued
upon
reinvestment of
dividends from net
investment income
and net realized
gains on
investment
transactions:
A Class 10,894 10,263 8,770 123,895 231,868 265,652
B Class 1,346 1,765 607 3,070 4,520 3,772
C Class 384 243 11 -- 11 --
---------- ---------- ---------- ---------- ---------- ----------
435,234 393,125 362,112 381,905 732,317 986,926
---------- ---------- ---------- ---------- ---------- ----------
Shares repurchased:
A Class (58,717) (141,380) (76,595) (1,839,015) (4,163,715)(5,135,342)
B Class (73,617) (19,696) (2,879) (51,692) (30,565) (29,908)
C Class (989) -- (817) -- (1,971) --
---------- ---------- ---------- ---------- ---------- ----------
(133,323) (161,076) (80,291) (1,890,707) (4,196,251)(5,165,250)
---------- ---------- ---------- ---------- ---------- ----------
Net Increase
(Decrease) 301,911 232,049 281,821 (1,508,802) (3,463,934)(4,178,324)
========== ========== ========== ========== ========== ==========
<CAPTION>
TAX-FREE
NEW YORK FUND
-------------------------------------------------
EIGHT THREE
MONTHS YEAR MONTHS YEAR
ENDED ENDED ENDED ENDED
8/31/98 12/31/97 12/31/96 9/30/96
-------- -------- -------- -------
<S> <C> <C> <C> <C>
Shares sold:
A Class 70,625 61,662 1,014 23,378
B Class 29,186 6,824 6,492 16,347
C Class -- -- -- --
Shares issued
upon
reinvestment of
dividends from net
investment income
and net realized
gains on
investment
transactions:
A Class 24,015 54,059 9,603 44,599
B Class 574 1,014 321 983
C Class 162 349 55 216
---------- ---------- ---------- ----------
124,562 123,908 17,485 85,523
---------- ---------- ---------- ----------
Shares repurchased:
A Class (58,367) (156,730) (54,492) (181,528)
B Class (1,444) (15,960) (24,803) --
C Class -- (22) (7) --
---------- ---------- ---------- ----------
(59,811) (172,712) (79,302) (181,528)
---------- ---------- ---------- ----------
Net Increase
(Decrease) 64,751 (48,804) (61,817) (96,005)
========== ========== ========== ==========
</TABLE>
6. Lines of Credit
Committed lines of credit were $500,000 for Tax-Free Florida Fund,
$8,800,000 for Tax-Free Florida Insured Fund and $500,000 for Tax-Free
New York Fund. No amounts were outstanding at August 31, 1998, or at any
time during the fiscal year.
7. Credit and Market Risk
The Funds concentrate their investments in securities issued by
municipalities, mainly in Florida for the Tax-Free Florida Fund and the
Tax-Free Florida Insured Fund and in New York for the Tax-Free New York
Fund. The value of these investments may be adversely affected by new
legislation within the states, 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
Statements of Net Assets.
Inverse floaters represent a security that pays interest at rates that
increase (decrease) with a decrease (increase) in a specified index.
Interest rates disclosed are in effect on August 31, 1998.
REPORT OF INDEPENDENT AUDITORS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
VOYAGEUR INVESTMENT TRUST - DELAWARE-VOYAGEUR TAX-FREE FLORIDA FUND
VOYAGEUR INVESTMENT TRUST - DELAWARE-VOYAGEUR TAX-FREE FLORIDA INSURED
FUND
VOYAGEUR MUTUAL FUNDS, INC. - DELAWARE-VOYAGEUR TAX-FREE NEW YORK FUND
We have audited the accompanying statements of net assets of Tax-Free
Florida Fund, Tax-Free Florida Insured Fund, and Tax-Free New York Fund
(the "Funds") as of August 31, 1998, and the related statements of
operations, statements of changes in net assets and financial highlights
for the period January 1, 1998 through August 31, 1998 and for the year
ended December 31, 1997. These financial statements and financial
highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements
and financial highlights based on our audits. The statements of changes
in net assets and the financial highlights for the periods presented
through December 31, 1996 were audited by other auditors whose reports
thereon dated February 14, 1997 expressed unqualified opinions on those
statements and financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and financial highlights. Our
procedures included confirmation of securities owned as of August 31,
1998, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of each of the respective Funds at August 31, 1998,
and the results of their operations, the changes in their net assets and
their financial highlights for the period January 1, 1998 through August
31, 1998 and for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
/S/Ernst & Young LLP
Philadelphia, Pennsylvania
October 5, 1998
THIS ANNUAL REPORT IS FOR THE INFORMATION OF TAX-FREE FLORIDA FUND, TAX-
FREE FLORIDA INSURED FUND AND TAX-FREE New York Fund shareholders, but
it may be used with prospective investors when preceded or accompanied
by current Prospectuses for Tax-Free Florida Fund, Tax-Free Florida
Insured Fund and Tax-Free New York Fund, which set forth details about
charges, expenses, investment objectives and operating policies of each
Fund. You should read each prospectus carefully before you invest or
send money. Summary investment results are documented in each Fund's
current Statement 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 each Fund will fluctuate
so that shares, when redeemed, may be worth more or less than their
original cost.
BOARD OF DIRECTORS
WAYNE A. STORK
Chairman
Delaware Investments Family of Funds
Philadelphia, PA
JEFFREY J. NICK
President and Chief Executive Officer
Delaware Investments Family of Funds
Philadelphia, PA
WALTER P. BABICH
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA
JOHN H. DURHAM
Partner, Complete Care Services
Horsham, Pa
ANTHONY D. KNERR
Consultant, Anthony Knerr & Associates
New York, NY
ANN R. LEVEN
Treasurer, National Gallery of Art
Washington, DC
W. THACHER LONGSTRETH
City Councilman
Philadelphia, PA
THOMAS F. MADISON
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
CHARLES E. PECK
Secretary/Treasurer, Enterprise Homes, Inc.
Fredericksburg, VA
AFFILIATED OFFICERS
DAVID K. DOWNES
Executive Vice President, Chief Financial Officer
and Chief Operating Officer
Delaware Investments Family of Funds
Philadelphia, PA
GEORGE M. CHAMBERLAIN, JR.
Senior Vice President, Secretary
and General Counsel
Delaware Investments Family of Funds
Philadelphia, PA
BRUCE D. BARTON
President and Chief Executive Officer
Delaware Distributors, L.P.
Philadelphia, PA
[GRAPHIC OMITTED: PHOTO OF TWO GLOBES]
directors
& officers
INVESTMENT MANAGER
Delaware Management Company
Philadelphia, Pennsylvania
INTERNATIONAL AFFILIATE
Delaware International Advisers Ltd.
London, England
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia, Pennsylvania
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia, Pennsylvania
1818 Market Street
Philadelphia, PA 19103-3682
When used with prospective investors, this report must be preceded or
accompanied by a current Tax-Free Florida Fund, Tax-Free Florida Insured
Fund and Tax-Free New York Fund prospectus and the Delaware Investments
Fund Performance Update for the most recently completed calendar
quarter. For a prospectus of any other Delaware Investments fund,
contact your financial adviser or Delaware Investments.
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawarefunds.com
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.
[GRAPHIC OMITTED: LOGO OF DELAWARE INVESTMENTS
----------------------------
Philadelphia * London]
Printed in the USA
on recycled paper
(1142)
AR-FLNY[8/98]TKO10/98
(copyright) Delaware Distributors, L.P.
