<PAGE>
For Tax-Exempt Income
Tax-Free Florida Fund
Tax-Free Florida Insured Fund
Tax-Free Florida Intermediate Fund
Tax-Free New York Fund
service and guidance
professional management
goals
1998
Semi-Annual
Report
(photo of illustration from Tax-Exempt Income Brochure)
DELAWARE
INVESTMENTS
- -----------
Philadelphia o London
<PAGE>
for tax-exempt income 2
July 20, 1998
Dear Shareholder:
THE LAW OF SUPPLY AND DEMAND moderated returns from municipal bond investments
during the first six months of 1998. Many municipalities took advantage of
lower interest rates to refinance their obligations. Bond issuance by state
and local governments soared 50.7% to more than $146 billion for the period.
This dramatic increase in bond issuance was led by the education,
health care and transportation sectors. New York and Florida were two of the
largest issuers, ranking 1st and 4th in volume respectively, according to THE
BOND BUYER, a trade publication. Supply increases of 34% in Florida and 54% in
New York were difficult for bond markets in both states to absorb.
Each of our Florida funds outperformed their respective benchmark
indexes for the first six months of 1998. Our two largest Florida Funds also
performed exceptionally well relative to their peers:
o Tax-Free Florida Insured A Class ranked 1st out of 15 funds investing
primarily in insured Florida securities.*
o Tax-Free Florida A Class ranked in the top 15% of all Florida municipal
bond funds for the six-month, one-year and lifetime periods ended
June 30, 1998.*
Demand for insured municipal bond funds in Florida remained strong
during the first six months of 1998. Florida has a growing population of
income-oriented investors. We believe this can bolster the state's bond market
should the
CUMULATIVE TOTAL RETURN
Six Months Ended
June 30, 1998
- ------------------------------------------------------------------------------
Tax-Free Florida Fund A Class +3.22%
Lehman Brothers Municipal Bond Index +2.69%
Lipper Florida Municipal Debt Fund Average (62 funds) +2.35%
- ------------------------------------------------------------------------------
Tax-Free Florida Insured Fund A Class +2.82%
Lehman Brothers Insured Municipal Bond Index +2.43%
Lipper Florida Insured Fund Average (15 funds) +2.30%
- ------------------------------------------------------------------------------
Tax-Free Florida Intermediate Fund A Class +2.55%
Merrill Lynch 3-to-7 Year Municipal Bond Index +2.21%
Lipper Florida Intermediate Fund Average (20 funds) +2.08%
- ------------------------------------------------------------------------------
Tax-Free New York Fund A Class +2.22%
Lipper New York Municipal Debt Fund Average (96 funds) +2.37%
All performance shown above is at net asset value and assumes reinvestment of
distributions. For complete performance and sales charges for all Classes, see
pages 8 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 INSURED FUND CLASS A RANKED 1ST OUT OF 15 FLORIDA FUNDS FOR
THE SIX-MONTH AND ONE-YEAR PERIODS ENDED 6/30/98. THE FUND RANKED 3RD OUT OF 5
FUNDS FOR THE FIVE-YEAR AND LIFETIME PERIODS ENDED 6/30/98. TAX-FREE FLORIDA
FUND CLASS A RANKED 4TH OUT OF 62 FUNDS, 3RD OUT OF 61 FUNDS, AND 5TH OUT OF
46 FUNDS, RESPECTIVELY FOR THE SIX-MONTH, ONE-YEAR, AND LIFETIME PERIODS ENDED
6/30/98. RANKINGS ARE BASED ON TOTAL RETURN AT NET ASSET VALUE. EXPENSE
LIMITATIONS WERE IN EFFECT FOR THE TIMES SHOWN. RANKINGS AND RETURNS WOULD
HAVE BEEN LOWER WITHOUT THE LIMITATIONS.
<PAGE>
for tax-exempt income 3
outlook for inflation and interest rates become uncertain.
In the Empire State, the income potential of Tax-Free New York Fund
remained strong, but also limited total return. Two of the New York Fund's
pre-refunded bonds matured early in the year, giving the Fund's management an
opportunity to reposition the portfolio to take advantage of income and total
return opportunities.
A robust economy, mild inflation and low interest rates bode well for
the municipal bond market in the coming months. Tax revenues are also likely
to remain strong in Florida and New York, bolstering credit quality and bond
prices. Yields on longer term municipal bonds averaged 90% of U.S. Treasury
bond yields as of June 30, 1998. This is the highest level since the federal
flat tax rate proposal two years ago, and in our view increases the
attractiveness of tax-exempt securities.
On the pages that follow, Patrick P. Coyne and Mitchell L. Conery review
each Fund's performance for the first half of 1998 and provide an overview of
their outlook for the remainder of the year. We encourage you to meet regularly
with your financial adviser to discuss your goals. We 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
TAX-FREE FLORIDA FUND
PORTFOLIO HIGHLIGHTS AND ASSET MIX
- --------------------------------------------------------------------------------
June 30, 1998
PIE CHART
Other Revenue Bonds 20.1% General Obligation Bonds 6.1%
Recreational 12.2% Pre-Refunded Bonds 1.2%
Utility & Water/Sewer 10.2% Cash 2.9%
Housing 14.5% Higher Education 3.4%
Transportation 3.3% Industrial Development 6.1%
Health Care 20.0%
Average Effective Maturity 13.2 years
Average Effective Duration 7.9 years
Average Quality AA
Current 30-Day SEC Yield* 4.59%
- -------------------------------------------------
*For A Class shares based on Securities and Exchange Commission guidelines.
Current 30-day SEC yield for both B and C Class shares was 4.01%.
Approximately 4.1% of the income generated by Tax-Free Florida Fund for the
six months ended 6/30/98 was subject to the federal alternative minimum tax.
<PAGE>
for tax-exempt income 4
Portfolio Managers' Review
U.S. TREASURY PRICES HAVE SOARED since December. The yield on 30-year
U.S. Treasury bonds fell to 5.65% as of June 30, the lowest level in a
generation.
Even so, real interest rates after inflation remain high. If one
subtracts the U.S. Consumer Price Index from 10-year Treasury bond yields, the
real rate of return is nearly 4%, the highest level since late 1994.
Given the probable tempering effects of the Asian slump on the U.S.
economy, the Federal Reserve Board is likely to maintain its current interest
rate policy, in our view. This makes a solid case for bonds' income and total
return potential, especially for tax-sensitive investors. We encourage you to
review your asset allocation plan with your financial and tax advisers to see
if you may benefit from increasing your position in a single-state, tax-exempt
fund.
For investors in the highest federal tax bracket (39.6%),
medium-quality, 30-year general obligation municipal bonds in both Florida and
New York provided taxable equivalent yields of more than 9% as of June 30.
After factoring out inflation, long-term tax-exempt debt provided an
attractive annualized real rate of return of 7.5%.
A major problem facing the tax-exempt market has been a temporary glut
of new supply as municipalities seek to refund their obligations. Over the
past six months, the bond market has been asked to digest unusually large bond
issues of more than $1 billion each from several areas, including New York.
FOR INVESTORS IN THE HIGHEST FEDERAL TAX BRACKET (39.6%), MEDIUM-QUALITY,
30-YEAR GENERAL OBLIGATION MUNICIPAL BONDS IN BOTH FLORIDA AND NEW YORK
PROVIDED TAXABLE EQUIVALENT YIELDS OF MORE THAN 9% AS OF JUNE 30.
TAX-FREE FLORIDA INSURED FUND
PORTFOLIO HIGHLIGHTS AND ASSET MIX
- --------------------------------------------------------------------------------
June 30, 1998
PIE CHART
Certificates of Participation 6.8% Other Revenue Bonds 19.2%
Water and Sewer 7.0% General Obligation Bonds 3.9%
Housing 19.8% Cash 1.0%
Transportation 9.5% Pre-Refunded Bonds 15.7%
Hospitals 17.1%
Average Effective Maturity 8.5 years
Average Effective Duration 6.4 years
Average Quality AAA
Current 30-Day SEC Yield* 3.84%
- -----------------------------------------------------
*For A Class shares based on Securities and Exchange Commission guidelines.
Current 30-day SEC yield for B Class shares was 3.24%.
Approximately 21.80% of the income generated by Tax-Free Florida Insured Fund
for the six months ended 6/30/98 was subject to the federal alternative
minimum tax.
<PAGE>
for tax-exempt income 5
Another reason municipal bonds underperformed Treasuries during the
first half of fiscal 1998 was that foreign investors sought U.S. government
debt as a safe haven when volatility rocked Asian stock and bond markets.
Foreigners generally don't buy our state and local debt because they don't
qualify for the tax breaks municipal bonds provide. Foreign investors now own
nearly $1.5 trillion worth of U.S. Treasuries, or one-third of all federal
debt outstanding, up from 20% in 1994.
In New York, many new bonds were issued by agencies such as the New
York Power Authority to either take advantage of lower interest rates or
pre-refund older debt obligations. Continued population and economic expansion
in Florida fueled growth-related bond issues in the state. Brisk demand for
municipal bonds in both states helped absorb supply.
TAX-FREE FLORIDA FUNDS' STRATEGIC POSITIONING
All three of Delaware Investments' Tax-Free Florida Funds performed well against
both their respective benchmark indexes and other municipal bond funds in the
state during the first six months of 1998.
By a wide margin, municipal bond investors in Florida continued to
favor the security of insured municipal bonds. More than 70% of municipal
bonds issued in the state were insured, compared to 50% nationwide.
All three Florida Municipal Bond Funds maintained portfolios of
relatively higher quality bonds. We believe that lower-rated bonds currently
offer no significant compensation for the additional risk associated with
investing in them.
At the start of fiscal 1998, Tax-Free Florida Insured Fund owned
inverse floaters(1). These securities react inversely
TAX-FREE FLORIDA INTERMEDIATE FUND
PORTFOLIO HIGHLIGHTS AND ASSET MIX
- --------------------------------------------------------------------------------
June 30, 1998
Hospitals 4.0% Transportation 4.6%
Higher Education 5.5% Housing 9.3%
Territorial 2.6% Water and Sewer 4.7%
Cash 11.6% Ports and Harbors 9.2%
Pre-Refunded Bonds 7.6% Waste Disposal 5.2%
Certificates of Participation 5.6% Other Revenue Bonds 13.2%
Nursing Homes 16.9%
Average Effective Maturity 6.4 years
Average Effective Duration 5.0 years
Average Quality AA
Current 30-Day SEC Yield* 3.55%
- -------------------------------------------------------
*For A Class shares based on Securities and Exchange Commission guidelines.
Current 30-day SEC yields for both B and C Class shares were 2.80% and 2.81%,
respectively.
Approximately 16.98% of the income generated by Tax-Free Florida Intermediate
Fund for the six months ended 6/30/98 was subject to the federal alternative
minimum tax.
- ---------
(1) Inverse floaters are custodial trust receipts which pay interest rates that
vary inversely to changes in the interest rates of specified short-term,
tax-exempt obligations or an index of such obligations. As interest rates
decline, the income potential of inverse floating obligations increases, and
vice versa. The market value of these obligations may be more volatile than
the market value of other tax-exempt obligations.
<PAGE>
for tax-exempt income 6
to changes in interest rates, and generally increased the income potential of
the Fund. This past winter, with interest rates at historic lows, we reduced our
position in these securities.
To improve Tax-Free Florida Fund's income potential, we increased the
Fund's average effective duration by half-a-year. While current economic
conditions suggest that interest rates should remain stable in the coming
months, we also believe the Fund is well positioned to benefit from a rise in
bond prices.
Typically, when interest rates are low, homeowners attempt to reduce
their monthly payments by refinancing their debt at lower rates and prepaying
their mortgages. For this reason, we reduced the percentage of housing bonds
in Tax-Free Florida Fund in 1997.
TAX-FREE NEW YORK FUND STRATEGIC POSITIONING
During the first six months of 1998, economic conditions in New York State
continued to improve. New York City is booming while some cities upstate show
signs of recovery. Major upstate employers such as Eastman Kodak have begun to
post higher earnings. New Yorkers generally enjoy rising real incomes and
moderate personal debt levels. Increased spending restraint in Albany and an
improved economic climate have led to increasing budget surpluses. This may
lead to state income tax cuts.
Despite this positive economic backdrop, the performance of New York
State's municipal bond market since January has been less than impressive.
Bond issuance in New York rose 54% from 1997 levels, creating a glut that was
difficult for the market to absorb. Still, by the end of the first half of
1998, investor demand was high enough to soak up the excess supply.
Nearly a third of the Fund's net assets were allocated to pre-refunded
bonds as of June 30. Municipalities issue pre-refunded bonds to pay off older
bonds with higher interest rates. With interest rates at record lows, many
TAX-FREE NEW YORK FUND
PORTFOLIO HIGHLIGHTS AND ASSET MIX
- --------------------------------------------------------------------------------
June 30, 1998
Hospitals 8.7% Transportation 11.6%
Higher Education 15.1% Housing 4.1%
Territorial 2.0% Water and Sewer 4.7%
Cash 1.6% Other Revenue Bonds 7.6%
City 4.5% Pre-Refunded Bonds 30.8%
Industrial Development 9.3%
Average Effective Maturity 7.4 years
Average Effective Duration 5.4 years
Average Quality A
Current 30-Day SEC Yield* 3.93%
- ----------------------------------------------------
*For A Class shares based on Securities and Exchange Commission guidelines.
Current 30-day SEC yields for both B and C Class shares was 3.35%.
Approximately 8.47% of the income generated by Tax-Free New York Fund for the
six months ended 6/30/98 was subject to the federal alternative minimum tax.
<PAGE>
for tax-exempt income 7
municipalities took advantage of this opportunity to reduce their long-term
obligations.
The Fund's portfolio continues to be dominated by older bonds with
generally shorter durations. These bonds allowed the Fund to deliver
relatively high levels of tax-exempt income. However, the income focus of
these bonds did not allow the Fund to capture as much of the rise in bond
prices as the Lehman Brothers Municipal Bond Index, the Fund's unmanaged
benchmark.
We expect to continue to extend the average duration of the securities
in the Fund's portfolio as they mature. We believe this makes sense in the
current interest rate environment. By extending the duration of the securities
in the portfolio we can better pursue attractive total returns without adding
significant risk.
SUMMARY OUTLOOK
Both Florida and New York appear to be moving toward continued economic growth
consistent with the national economy. Unemployment is nearing a 25-year low,
and both economies seem poised to continue creating new jobs. At the same
time, state legislatures in Florida and New York have continued to exercise
strict expense controls which have led to rising budget surpluses.
These positive economic trends should lead to both an increase in bond
quality and a decrease in the available supply. A majority of the issues that
led to the oversupply problem in the municipal bond market came from
pre-refundings. Internal Revenue Service restrictions on how frequently
municipalities can refinance their debt should also help to limit future
supply problems.
While the bond market has not performed up to the expectations set
during the rally of 1997, attractive opportunities exist for investors seeking
income potential and the more moderate risk associated with fixed income
investments. One clear benefit of municipal bonds is that they can become a
valuable asset allocation component, without adding to taxable investment
income.
PATRICK P. COYNE
Vice President
Senior Portfolio Manager
MITCHELL L. CONERY
Vice President
Senior Portfolio Manager
July 20, 1998
ONE CLEAR BENEFIT OF MUNICIPAL BONDS IS THAT THEY CAN BECOME A VALUABLE ASSET
ALLOCATION COMPONENT, WITHOUT ADDING TO TAXABLE INVESTMENT INCOME.
<PAGE>
for tax-exempt income 8
Performance Summary
TAX-FREE FLORIDA FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH JUNE 30, 1998
<TABLE>
<CAPTION>
Lifetime One Year
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A (Est. 3/2/95)
Excluding Sales Charge +9.09% +10.10%
Including Sales Charge +7.84% +6.01%
- ------------------------------------------------------------------------------------------------------
Class B (Est. 9/15/95)
Excluding Sales Charge +7.83% +9.45%
Including Sales Charge +6.89% +5.45%
- ------------------------------------------------------------------------------------------------------
Class C (Est. 4/22/95)
Excluding Sales Charge +7.76% +9.28%
Including Sales Charge +7.76% +8.28%
</TABLE>
TAX-FREE FLORIDA INSURED FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH JUNE 30, 1998
<TABLE>
<CAPTION>
Lifetime Five Years One Year
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A (Est. 1/1/92)
Excluding Sales Charge +7.73% +6.13% +9.79%
Including Sales Charge +7.10% +5.31% +5.67%
- ------------------------------------------------------------------------------------------------------
Class B (Est. 3/11/94)
Excluding Sales Charge +6.19% +9.10%
Including Sales Charge +5.81% +5.10%
- ------------------------------------------------------------------------------------------------------
Class C (Est. 9/30/97)
Excluding Sales Charge +3.11%
Including Sales Charge +2.11%
</TABLE>
Returns for C Class shares for the short time shown may not be representative
of longer term results.
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 Class B and C shares excluding sales charge assumes either
contingent sales charges did not apply or the investment was not redeemed.
Returns reflect voluntary expense limitations in effect at the time. Returns
would have been lower without the limitations.
Class A shares of Tax-Free Florida, Tax-Free Florida Insured and Tax-Free New
York Fund have a 3.75% maximum front-end sales charge, while Class A shares of
Tax-Free Florida Intermediate Fund have a 2.75% maximum front-end sales
charge. All four funds have a 12b-1 fee.
Class B 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 for Tax-Free
Florida, Tax-Free Florida Insured and Tax-Free New York Fund and up to 2% if
redeemed before the end of the third year for Tax-Free Florida Intermediate
Fund.
Class C shares have a 1% annual distribution and service fee. If shares are
redeemed within 12 months, a 1% contingent deferred sales charge applies.
<PAGE>
for tax-exempt income 9
TAX-FREE FLORIDA INTERMEDIATE FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH JUNE 30, 1998
<TABLE>
<CAPTION>
Lifetime One Year
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A (Est. 5/1/94)
Excluding Sales Charge +6.27% +7.05%
Including Sales Charge +5.57% +4.07%
- ------------------------------------------------------------------------------------------------------
Class B (Est. 9/15/95)
Excluding Sales Charge +4.41% +6.17%
Including Sales Charge +4.08% +4.17%
- ------------------------------------------------------------------------------------------------------
Class C (Est. 3/23/95)
Excluding Sales Charge +5.72% +6.15%
Including Sales Charge +5.72% +5.15%
</TABLE>
TAX-FREE NEW YORK FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH JUNE 30, 1998
<TABLE>
<CAPTION>
Lifetime Ten Years Five Years One Year
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A (Est. 11/6/87)
Excluding Sales Charge +7.38% +7.20% +4.66% +7.07%
Including Sales Charge +6.99% +6.79% +3.86% +3.09%
- ------------------------------------------------------------------------------------------------------
Class B (Est. 11/14/94)
Excluding Sales Charge +5.98% +6.30%
Including Sales Charge +5.27% +2.31%
- ------------------------------------------------------------------------------------------------------
Class C (Est. 4/26/95)
Excluding Sales Charge +4.67% +6.20%
Including Sales Charge +4.67% +5.20%
</TABLE>
See page 8 for important additional information regarding all share classes
including sales charges. Return and share value for each Fund fluctuate so
that shares, when redeemed, may be worth more or less than their original
cost. Past performance does not guarantee future results.
<PAGE>
10 for tax-exempt income
FINANCIAL STATEMENTS
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGER TAX-FREE FLORIDA FUND
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------
TOTAL MUNICIPAL BONDS - 94.60%
CONTINUING CARE/RETIREMENT REVENUE BONDS - 8.61%
Jacksonville Health Facilities Authority-Cypress
Village Project National Benevolent Association-
Series A 6.125% 12/1/16 ......................... $ 200,000 $ 213,878
Palm Beach Health Facilities Authority-Adult
Community Services 5.625% 11/15/20 .............. 250,000 258,813
Volusia County Health Facilities Authority, John
Knox Village-Series A 6.00% 6/1/17 .............. 250,000 271,595
Volusia Florida Industrial Development Authority-
Bishops Glen Project Retirement Health Facilities
7.50% 11/1/16 ................................... 330,000 353,971
----------
1,098,257
----------
HIGHER EDUCATION REVENUE BONDS - 3.42%
Pinellas County Educational Facilities Authority-
Clearwater Christian College Private Placement
8.00% 2/1/11 .................................... 400,000 435,808
----------
435,808
----------
HOSPITAL REVENUE BONDS - 11.33%
Hillsborough County-Tampa General Hospital
6.375% 10/1/13 (FSA) ............................ 100,000 110,043
Lee County Hospital Board-Lee Memorial Hospital
6.35% 3/26/20 (MBIA) ............................ 500,000 544,250
Leesburg Regional Medical Center Project
Series A 6.125% 7/1/12 .......................... 100,000 106,702
North Miami Health Facilities Authority-Catholic
Health Services LOC Suntrust
Bank-Miami 6.00% 8/15/16 ........................ 500,000 531,915
Puerto Rico Industrial Tourist Educational
Medical & Environmental Control Facilities
Mennonite General Hospital
Series A 5.625% 7/1/27 .......................... 150,000 152,154
----------
1,445,064
----------
HOUSING REVENUE BONDS - 14.34%
Blackwater Housing Corporation-Series A
6.50% 6/1/25 .................................... 250,000 259,310
Dade County Housing Finance Authority, Lincoln
Fields Apartments Section 8-FHA
6.25% 7/1/24 (MBIA) ............................. 500,000 523,565
Duval Housing Finance Authority, St. Augustine
Apartments 6.00% 3/1/21 ......................... 300,000 313,836
Florida Housing Finance Agency-Homeowner
Mortgage-Series 1B
6.00% 7/1/17 (FHA/VA) ........................... 195,000 206,862
Florida Housing Finance Agency-The Vineyards
Project-Series H 6.40% 11/1/15 .................. 500,000 524,980
----------
1,828,553
----------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
---------------------
TOTAL MUNICIPAL BONDS (CONTINUED)
PRE-REFUNDED BONDS/ESCROWED TO MATURITY - 1.15%
Palm Beach County Health Facilites Authority-Good
Samaritan Health System 6.30% 10/1/22............ $ 130,000 $ 146,441
----------
146,441
----------
SCHOOL DISTRICT REVENUE BONDS - 6.08%
Hillsborough County Florida School Board
Certificates of Participation Master Lease
Program Series A 5.00% 7/1/23 (MBIA) ................ 800,000 775,576
----------
775,576
----------
TRANSPORTATION REVENUE BONDS - 3.31%
Florida State Mid-Bay Bridge Authority-
Series D 6.125% 10/1/22 ............................ 160,000 165,501
Orlando & Orange County Expressway Authority
Refunding, Junior Lien 5.95% 7/1/23 ................. 250,000 256,925
----------
422,426
----------
UTILITY REVENUE BONDS - 1.20%
Puerto Rico Electric Power Authority
Series X 5.50% 7/1/25 .............................. 150,000 152,781
----------
152,781
----------
WASTE DISPOSAL REVENUE BONDS - 4.11%
Jacksonville Sewer & Solid Waste Disposal Facilities
Authority-Anheuser Busch Project
5.875% 2/1/36 (AMT) ................................ 150,000 157,089
Polk County Industrial Development Authority Solid
Waste Disposal-Tampa Electric Company Project
5.85% 12/1/30 (AMT) ................................ 350,000 366,933
----------
524,022
----------
WATER & SEWER REVENUE BONDS - 8.94%
Jacksonville Electric Authority Revenue Water & Sewer
Systems Series A 5.625% 10/1/37 ..................... 500,000 512,825
Key West Sewer 5.70% 10/1/26 (FGIC) ................... 100,000 105,569
Miramar Wastewater Improvement
6.75% 10/1/25 (FGIC) ............................... 100,000 113,404
Peace River Manasota Regional Water Supply Authority
Florida Series A 5.00% 10/1/28 ...................... 250,000 243,888
St Lucie County Special Assessment South Hutchinson
Island 6.10% 11/1/20 (Asset Guaranty)................ 150,000 164,132
----------
1,139,818
----------
<PAGE>
for tax-exempt income 11
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------
TOTAL MUNICIPAL BONDS (CONTINUED)
OTHER REVENUE BONDS - 32.11%
Dade County Special Obligation Series B 5.00%
10/1/35 (AMBAC)....................................... $200,000 $ 192,156
Lake Bernadette Community Development District
Special Assessment-Series A 8.00% 5/1/17 ............. 250,000 264,203
Miami-Dade County Special Obligation Sub-Series B
5.00% 10/1/37 (MBIA) ................................ 250,000 239,232
Northern Palm Beach County Improvement District
Special Assessment-Abacoa Water Control
7.20% 8/1/16 (FGIC) ................................. 300,000 328,690
Saint Johns County Industrial Development Authority
Professional Golf Hall of Fame
Series A 5.50% 3/1/17 ............................... 750,000 771,270
Tampa Palms Community Development District
Richmond Place Project 7.50% 5/1/18 .................. 250,000 264,370
Tampa Florida Sports Authority Revenue-County
Interlocal Payments 5.00% 10/1/28 .................... 500,000 487,775
Village Center Community Development District Florida
Recreational Revenue Series A
5.50% 11/1/10 (MBIA) ................................ 750,000 815,130
Village Center Community Development District
Recreational, Refunding Series A
5.00% 11/1/21 ....................................... 750,000 732,780
-----------
4,095,606
-----------
Total Municipal Bonds
(cost $11,497,675) .................................. 12,064,352
-----------
NUMBER OF
SHARES
---------
SHORT-TERM INVESTMENTS - 2.50%
Norwest Advantage Municipal Money
Market Fund .......................................... 319,225 319,225
-----------
Total Short-Term Investments (cost $319,225) ........... 319,225
-----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 97.10%
(COST $11,816,900) .................................. $12,383,577
RECEIVABLES AND OTHER ASSETS NET OF LIABILITES - 2.90%.. 370,062
-----------
NET ASSETS APPLICABLE TO 1,149,734 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ............... $12,753,639
===========
<PAGE>
NET ASSET VALUE - TAX-FREE FLORIDA FUND A CLASS
($9,380,048/845,762 SHARES)..................................... $11.09
======
NET ASSET VALUE - TAX-FREE FLORIDA FUND B CLASS
($2,996,565/269,980 SHARES)..................................... $11.10
======
NET ASSET VALUE - TAX-FREE FLORIDA FUND C CLASS
($377,026/33,992 SHARES)........................................ $11.09
======
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 the Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
VA - Insured by the Veterans Administration
COMPONENTS OF NET ASSETS AT JUNE 30, 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 allocated to Tax-Free
Florida Fund C Class............................................ $12,170,487
Accumulated net realized gain on investments...................... 16,475
Net unrealized appreciation of investments........................ 566,677
-----------
Total Net Assets.................................................. $12,753,639
===========
NET ASSET VALUE AND OFFERING PRICE FOR
VOYAGEUR TAX-FREE FLORIDA FUND A CLASS
Net asset value per share (A)..................................... $11.09
Sales charge (3.75% of offering price or 3.88% of
amount invested per share) (B).................................. .43
------
Offering Price.................................................... $11.52
======
- ---------
(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 Voyageur Tax-Free Florida Fund A Class
See accompanying notes
<PAGE>
12 for tax-exempt income
VOYAGEUR INVESTMENT TRUST
DELAWARE-VOYAGEUR TAX - FREE FLORIDA INSURED FUND
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS - 99.07%
CERTIFICATES OF PARTICIPATION - 6.84%
Brevard County School Board
5.50% 7/1/21 (AMBAC) ............................ $ 4,000,000 $ 4,114,560
Palm Beach County School Board, Inverse Floating
Certificate 6.92% 8/1/15 (AMBAC) ................. 5,875,000 6,349,465
-----------
10,464,025
-----------
GENERAL OBLIGATION BONDS - 3.93%
Florida Board of Education
6.10% 6/1/24 (FSA) .............................. 5,500,000 6,006,495
-----------
6,006,495
-----------
HOSPITAL REVENUE BONDS - 17.09%
Alachua County Health Facilities Shands Teaching
Hospital-Series A 5.80% 12/1/26 (MBIA) ........... 5,000,000 5,317,150
Hillsborough County-Tampa General Hospital
6.375% 10/1/13 (FSA) ............................ 3,600,000 3,961,548
Indian River County Hospital District
6.10% 10/1/18 (FSA) ............................. 3,000,000 3,288,180
Lee County Hospital Board-Lee Memorial Hospital
6.35% 3/26/20 (MBIA) ............................ 10,000,000 10,885,000
Tallahassee Health Facilities-Tallahassee Memorial
Regional Medical Center Series B
6.00% 12/1/15 (MBIA) ............................ 2,500,000 2,699,925
-----------
26,151,803
-----------
HOUSING REVENUE BONDS - 19.81%
Florida Housing Finance Agency Riverfront
Apartments Section 8-Series A AMT
6.25% 4/1/37 (AMBAC) ............................ 1,000,000 1,065,110
Florida Housing Finance Agency Mariner Club
Apartments-Series K-1 AMT
6.25% 9/1/26 (AMBAC) ............................ 2,000,000 2,157,300
Florida Housing Finance Agency Mariner Club
Apartments-Series K-1 AMT
6.375% 9/1/36 (AMBAC) ........................... 3,500,000 3,783,605
Florida State Housing Finance Agency Crossings
Indian Run Apartments HUD-Series V AMT Letter of
Credit First National Bank of North Carolina
6.10% 12/1/26 (AMBAC) ........................... 750,000 791,933
Florida State Housing Finance Agency Crossings
Indian Run Apartments HUD-Series V AMT Letter of
Credit First Union National Bank of North Carolina
6.20% 12/1/36 (AMBAC) ........................... 1,790,000 1,896,863
Florida State Housing Finance Agency Landings At
Sea Forest Apartments FHA-Series T AMT Letter of
Credit First Union National Bank of North Carolina
6.05% 12/1/36 (AMBAC) ........................... 700,000 742,098
Florida State Housing Finance Agency Landings at
Sea Forest Apartments FHA Series T AMT Letter of
Credit First National Bank of North Carolina
5.85% 12/1/18 (AMBAC) ........................... 500,000 524,600
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Florida State Housing Finance Agency Leigh
Meadows Apartments Section 8 Series N AMT
Letter of Credit First Union National Bank of
North Carolina 6.20% 9/1/26 (AMBAC) .............. $ 2,765,000 $ 2,938,117
Florida State Housing Finance Agency Leigh
Meadows Apartments Section 8 Series N AMT
Letter of Credit First Union National Bank of
North Carolina 6.30% 9/1/36 (AMBAC) .............. 2,000,000 2,132,640
Florida State Housing Finance Agency Woodbridge
Apartments Series L AMT Letter of Credit First
Union National Bank of North Carolina
6.15% 12/1/26 (AMBAC) ............................ 1,750,000 1,854,738
Florida State Housing Finance Agency Woodbridge
Apartments Series L AMT Letter of Credit First
Union National Bank of North Carolina
6.25% 6/1/36 (AMBAC) ............................. 2,000,000 2,127,260
Florida State Housing Finance Agency Spinnaker
Cove Apartments FHA Series G AMT Letter of
Credit First Union National Bank of North Carolina
6.50% 7/1/36 (AMBAC) ............................. 500,000 540,415
Florida State Housing Finance Agency Sterling
Palms Apartments Series D-1 AMT Letter of Credit
First Union National Bank of North Carolina
6.30% 12/1/16 (AMBAC) ............................ 1,000,000 1,081,770
Florida State Housing Finance Agency Sterling
Palms Apartments Series D-1 AMT Letter of Credit
First Union National Bank of North Carolina
6.40% 12/1/26 (AMBAC) ............................ 1,500,000 1,614,975
Florida State Housing Finance Agency Sterling
Palms Apartments Series D-1 AMT Letter of Credit
First Union National Bank of North Carolina
6.50% 6/1/36 (AMBAC) ............................. 6,540,000 7,064,900
-----------
30,316,324
-----------
*PRE-REFUNDED BONDS - 15.73%
Coral Springs Franchise
6.10% 9/1/13-03 (AMBAC) ......................... 1,340,000 1,470,851
Florida State Turnpike Authority
6.30% 7/1/12-02 (FGIC) .......................... 2,000,000 2,179,600
Manatee County School Board
6.125% 7/1/16-06 (MBIA) ......................... 2,000,000 2,272,960
North Port Utilities System
6.15% 10/1/09-02 (FGIC) ......................... 1,500,000 1,645,455
North Port Utilities System
6.25% 10/1/22-02 (FGIC) ......................... 5,000,000 5,504,100
Port St Lucie Utility System
6.00% 9/1/24-04 (FGIC) .......................... 5,000,000 5,483,200
Sunrise Utility System Series A
5.75% 10/1/26-06 (AMBAC) ........................ 5,000,000 5,514,900
-----------
24,071,066
-----------
<PAGE>
for tax-exempt income 13
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
TRANSPORTATION REVENUE BONDS - 9.47%
Canaveral Port Authority 6.00%
6/1/12 (FGIC) ................................... $ 1,000,000 $ 1,068,880
Florida State Turnpike Authority Turnpike Revenue
Municipal Securities Trust
5.23% 7/1/12 (FGIC) ............................. 10,000,000 10,327,600
Orlando & Orange County Expressway Authority
Florida Expressway Revenue Municipal Securities
Trust 5.23% 7/1/12 (AMBAC) ....................... 3,000,000 3,092,460
-----------
14,488,940
-----------
WATER & SEWER REVENUE BONDS - 6.96%
Coral Springs Water & Sewer-Series A
6.00% 9/1/10 (FGIC) ............................. 1,000,000 1,071,700
Jupiter Water-Series A
6.25% 10/1/12 (AMBAC) ........................... 2,000,000 2,146,560
Lee County Industrial Development Authority Bonita
Springs Utilities Project AMT
5.75% 11/1/10 (MBIA) ............................ 1,480,000 1,592,672
Lee County Industrial Development Authority Bonita
Springs Utilities Project AMT
5.80% 11/1/11(MBIA) ............................. 1,325,000 1,429,582
Miramar Wastewater Improvement
6.75% 10/1/25 (FGIC) ............................ 2,425,000 2,750,047
Titusville Water & Sewer
6.20% 10/1/14 (MBIA) ............................ 1,500,000 1,655,745
-----------
10,646,306
-----------
UTILITY REVENUE BONDS - 0.71%
New Smyrna Beach Utilities Commission
6.00% 10/1/13 (FGIC) ............................ 1,000,000 1,079,900
-----------
1,079,900
-----------
OTHER REVENUE BONDS - 18.53%
Collier County Capital Improvement Sales Tax
5.75% 10/1/13 (FGIC) ............................ 1,000,000 1,068,300
Dade County Special Obligation Series B
5.00% 10/1/35 (AMBAC) ........................... 4,000,000 3,843,120
Florida State Division Board of Finance Department
of General Services Department of Environmental
Resources-Preservation 2000-Series A
5.75% 7/1/13 (AMBAC) ............................ 10,000,000 10,741,400
Jupiter Sales Tax 6.375% 9/1/20 (AMBAC) ............ 2,500,000 2,694,550
Marion County Public Improvement Sales Tax
6.125% 12/1/08 (MBIA) ........................... 1,000,000 1,079,220
Nassau County Optional Gas Tax-Fuel Sales Tax
6.00% 3/1/09 (FGIC) ............................. 1,000,000 1,069,490
Ocala Optional Gas Tax-Fuel Sales Tax
6.00% 12/1/09 (AMBAC) ........................... 1,000,000 1,074,540
Osceola County Celebration Community Development
District Assessment 6.10% 5/1/16 (MBIA) .......... 1,000,000 1,086,180
Osceola County Enterprise Community Development
District-Special Assessment
6.10% 5/1/16 (MBIA) ............................. 1,000,000 1,086,180
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
OTHER REVENUE BONDS (CONTINUED)
Palm Beach Solid Waste Authority
6.00% 12/1/07 (MBIA).............................. $1,000,000 $ 1,091,360
Palm Beach Solid Waste Authority
6.25% 12/1/08 (MBIA).............................. 2,000,000 2,198,420
Pembroke Pines Capital Improvement
5.95% 10/1/20 (AMBAC)............................. 1,225,000 1,325,254
------------
28,358,014
------------
Total Municipal Bonds
(cost $138,798,216)............................... 151,582,873
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.07%
(COST $138,798,216)...................................... $151,582,873
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 0.93%............................... 1,419,494
------------
NET ASSETS APPLICABLE TO 13,548,365 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00%................... $153,002,367
============
NET ASSET VALUE - TAX FREE FLORIDA INSURED FUND A CLASS
($149,211,734 / 13,212,614 SHARES)....................... $11.29
======
NET ASSET VALUE - TAX FREE FLORIDA INSURED FUND B CLASS
($3,790,633 / 335,751 SHARES)............................ $11.29
======
- ---------
*For prerefunded bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
AMBAC - Insured by the Ambac Indemnity Corporation
AMT - Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FSA - Insured by the Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
COMPONENTS OF NET ASSETS AT JUNE 30, 1998:
Common stock, $.01 par value, unlimited shares authorized to
the Tax-Free Florida Insured Fund........................ $150,300,799
Accumulated net realized loss on investments............... (10,083,089)
Net unrealized appreciation of investments................. 12,784,657
------------
Total net assets........................................... $153,002,367
============
NET ASSET VALUE AND OFFERING PRICE FOR TAX FREE FLORIDA
INSURED FUND A CLASS
Net asset value per share (A).............................. $11.29
Sales charge (3.75% of offering price or 3.90% of
amount invested per share) (B)....................... 0.44
------
Offering price............................................. $11.73
======
- ---------
(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 Class A.
See accompanying notes
<PAGE>
14 for tax-exempt income
VOYAGEUR INVESTMENT TRUST II
DELAWARE-VOYAGEUR TAX-FREE FLORIDA INTERMEDIATE FUND
STATEMENT OF NET ASSETS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------
MUNICIPAL BONDS - 88.29%
CERTIFICATES OF PARTICIPATION - 5.64%
Volusia County School Board Certificates of
Participation Florida Master Lease Program
10.00% 8/1/00 (FSA).................................. $200,000 $224,110
--------
224,110
--------
CONTINUING CARE/RETIREMENT REVENUE BONDS - 16.91%
Jacksonville Health Facilities Authority, National
Benevolent Association Cypress Village Project-
Series A 6.00% 12/1/09............................... 100,000 107,608
Palm Beach County Florida Health Facilities Authority
Waterford Project 5.30% 10/1/07...................... 300,000 303,513
Sarasota Health Facility Authority Sunnyside
Properties 5.50% 5/15/01............................. 50,000 51,230
Sarasota Health Facilities Authority-Sunnyside
Properties 6.00% 5/15/10............................. 200,000 209,530
--------
671,881
--------
HIGHER EDUCATION REVENUE BONDS - 5.48%
Pinellas County Educational Facilities Authority-
Clearwater Christian College Private Placement
8.00% 2/1/11......................................... 200,000 217,904
--------
217,904
--------
HOSPITAL REVENUE BONDS - 3.99%
Martin County Health Facilities Authority-Memorial
Medical Center-Series B
5.25% 11/15/07 (MBIA)................................ 150,000 158,513
--------
158,513
--------
HOUSING REVENUE BONDS - 9.27%
Clearwater, Florida Housing Authority Revenue-
Affordable Housing Acquired Progress
4.95% 6/1/07......................................... 150,000 155,012
Florida Housing Finance Authority Homeowners
Mortgage-Series 3 AMT
5.80% 1/1/10 (FHA/VA)................................ 200,000 213,606
--------
368,618
--------
*PRE-REFUNDED BONDS/ESCROWED TO MATURITY - 7.56%
Florida State Board of Education Capital Outlay
Series A 4.44% 6/1/12-01............................. 50,000 20,252
Leon County Capital Improvement 5.75%
10/1/03 (MBIA)....................................... 50,000 53,727
Sunrise Utilities System 10.25%
10/1/13-00 (AMBAC)................................... 200,000 226,460
--------
300,439
--------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
---------------------
MUNICIPAL BONDS (CONTINUED)
SPECIAL ASSESSMENT BONDS - 2.67%
St. Lucie County Special Assessment-South
Hutchinson Island (Asset Guaranty)
5.60% 11/1/09........................................ $100,000 $ 106,183
----------
106,183
----------
TRANSPORTATION REVENUE BONDS - 13.77%
Dunes Community Development District-Intracoastal
Waterway Bridge (Guarantor: ITT Industries
Corporation) 5.50% 10/1/07........................... 175,000 182,298
Hillsborough County Port District-Tampa Port Authority-
Series A 5.10% 6/1/03 (FSA).......................... 175,000 182,312
Jacksonville Port Authority
7.625% 11/1/02 (MBIA)................................ 160,000 182,485
----------
547,095
----------
UTILITY REVENUE BONDS - 2.62%
Puerto Rico Electric Power Authority Revenue
Series O 6.80% 7/1/00................................ 100,000 104,241
----------
104,241
----------
WASTE DISPOSAL REVENUE BONDS - 5.21%
Dade County Solid Waste Special Obligation
5.125% 10/1/10 (AMBAC)............................... 200,000 207,166
----------
207,166
----------
WATER & SEWER REVENUE BONDS - 4.66%
Kissimmee Suburban Water and Sewer System
5.80% 10/1/02 (AMBAC)................................ 175,000 185,082
----------
185,082
----------
OTHER REVENUE BONDS - 10.51%
Jacksonville Excise Tax-Series B AMT
5.50% 10/1/07 (FGIC)................................. 200,000 208,798
Port Palm Beach District-Series B
AMT 5.40% 9/1/10 (MBIA).............................. 200,000 209,095
----------
417,893
----------
Total Municipal Bonds (cost $3,351,193)................ 3,509,125
----------
NUMBER OF
SHARES
---------
SHORT-TERM INVESTMENTS - 9.78%
Dreyfus Municipal Money Market Fund.................... 189,768 189,768
Norwest Advantage Municipal
Money Market Fund.................................... 198,783 198,783
----------
Total Short Term Investments
(cost $388,551)...................................... 388,551
----------
<PAGE>
for tax-exempt income 15
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.07%
(COST $3,739,744)................................... $3,897,676
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.93%.......................... 76,787
----------
NET ASSETS APPLICABLE TO 372,955 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00%.............. $3,974,463
==========
NET ASSET VALUE - TAX-FREE FLORIDA INTERMEDIATE FUND
A CLASS ($3,090,079 / 289,967 SHARES)............... $10.66
======
NET ASSET VALUE - TAX-FREE FLORIDA INTERMEDIATE FUND
B CLASS ($828,893 / 77,779 SHARES).................. $10.66
======
NET ASSET VALUE - TAX-FREE FLORIDA INTERMEDIATE FUND
C CLASS ($55,491 / 5,209 SHARES).................... $10.65
======
- ---------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in
which each bond is pre-refunded.
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 the Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
VA - Insured by the Veterans Administration
COMPONENTS OF NET ASSETS AT JUNE 30,1998:
Common stock, $.01 par value, unlimited shares authorized
to the Tax-Free Florida Intermediate Fund................ $3,802,140
Accumulated net realized gain on investments............... 14,391
Net unrealized appreciation of investments................. 157,932
----------
Total net assets........................................... $3,974,463
==========
NET ASSET VALUE AND OFFERING PRICE FOR VOYAGEUR TAX-FREE
FLORIDA INTERMEDIATE FUND A CLASS
Net asset value per share (A).............................. $10.66
Sales charge (2.75% of offering price or 2.81%
of amount invested per share (B)......................... 0.30
------
Offering Price............................................. $10.96
======
- ---------
(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 Intermediate Fund Class A.
See accompanying notes
<PAGE>
VOYAGEUR MUTUAL FUNDS, INC.
DELAWARE-VOYAGEUR TAX-FREE NEW YORK
STATEMENT OF NET ASSETS
JUNE 30, 1998
(UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------
MUNICIPAL BONDS - 98.45%
CITY REVENUE BONDS - 4.48%
New York, New York Series C
5.375% 11/15/27................................. $450,000 $ 452,057
----------
452,057
----------
HIGHER EDUCATION REVENUE BONDS - 15.10%
New York State Dorm Authority
Revenues Chapel Oaks 5.45% 7/1/26............... 450,000 455,130
New York State University Dorm Authority Revenue
Pooled Capital Program
7.80% 12/1/05 (FGIC)............................ 561,000 578,851
New York State University Dorm Authority Revenue
State University 7.50% 5/15/11 ................. 400,000 487,560
----------
1,521,541
----------
HOSPITAL REVENUE BONDS - 8.67%
New York State Dormitory Authority Revenue-
Millard Fillmore Hospital FHA
5.38% 2/1/32 (AMBAC)............................ 450,000 455,787
New York State Medical Care Facility Finance
Agency Revenue-Mental Health
7.70% 2/15/18................................... 145,000 148,448
New York State University Dormitory Authority
Revenue-Mental Health 5.90% 2/15/12............. 250,000 269,830
----------
874,065
----------
HOUSING REVENUE BONDS - 4.14%
New York State Mortgage Agency Revenue Homeowner
Series BB2 7.85% 10/1/08 (FHA) ................. 410,000 417,150
----------
417,150
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 9.30%
New York City Industrial Development Agency
Brooklyn Navy Yard Cogen Partners
5.75% 10/1/36................................... 450,000 459,072
New York City Industrial Development Agency-
Northwest Airlines-6.00% 6/1/27 (AMT)........... 450,000 478,490
----------
937,562
----------
LEASE REVENUE BONDS - 5.39%
New York State Thruway Authority Service
Contract Revenue-Local Highway & Bridge
6.25% 4/1/14.................................... 500,000 542,795
----------
542,795
----------
*PRE-REFUNDED BONDS - 30.85%
Babylon Industrial Development Agency Resource
Recovery (Ogden Martin) Series B
8.10% 1/1/00-98................................. 290,000 298,700
Babylon Industrial Development Agency
Resource Recovery (Odgen Martin) Series C
8.50% 1/1/19-98................................. 405,000 417,150
Municipal Assistance Corporation For
the City of New York 7.625% 7/1/08-99........... 250,000 264,360
<PAGE>
16 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------- -----------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED BONDS (CONTINUED)
New York City General Obligation Series F
8.25% 11/15/17-01.................................. $690,000 $ 790,305
New York State Local Government Assistance
Corporation-Series B 7.50% 4/1/30-01............... 600,000 664,626
New York State Urban Development Corporation
Revenue-Correctional Facilities
7.38% 1/1/18-02.................................... 600,000 674,268
----------
3,109,409
----------
TERRITORIAL REVENUE BONDS - 2.00%
Puerto Rico Public Buildings Authority Revenue
Guaranteed Government Facilities-Series B
5.25% 7/1/21....................................... 200,000 201,660
----------
201,660
----------
TRANSPORTATION REVENUE BONDS - 11.62%
Metropolitan Transportation Authority New York
Service Contract-Commuter Facilities-Series 0
5.75% 7/1/13....................................... 400,000 438,472
Metropolitan Transportation Authority New York
Transportation Facilities Revenue Series B
4.75% 7/1/26....................................... 250,000 234,555
Puerto Rico Commonwealth Highway & Transportation
Authority Highway Revenue-Series Y
5.50% 7/1/36....................................... 475,000 498,337
----------
1,171,364
----------
WATER & SEWER REVENUE BONDS - 4.72%
New York City Water Finance Series 97B
5.75% 6/15/29...................................... 450,000 475,808
----------
475,808
----------
OTHER REVENUE BONDS - 2.18%
United Nations Development Corporation Senior Lien
Series A 6.00% 7/1/12.............................. 200,000 219,768
----------
219,768
----------
TOTAL MUNICIPAL BONDS (COST $9,258,095 )............. 9,923,179
----------
NUMBER OF
SHARES
---------
SHORT-TERM INVESTMENTS - 2.15%
Norwest Advantage Municipal
Money Market Fund.................................. 216,812 216,812
----------
Total Short-Term Investments
(cost $ 216,812)................................... 216,812
----------
<PAGE>
TOTAL MARKET VALUE OF SECURITIES OWNED - 100.60%
(COST $9,474,907)....................................... $10,139,991
LIABILITIES NET OF RECEIVABLES
AND OTHER ASSETS - (0.60)%.............................. (60,394)
-----------
NET ASSETS APPLICABLE TO 951,116 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00%.................. $10,079,597
===========
NET ASSET VALUE - TAX-FREE NEW YORK FUND A CLASS
($9,729,323 / 917,991 SHARES)........................... $10.60
======
NET ASSET VALUE - TAX-FREE NEW YORK FUND B CLASS
($293,167 / 27,724 SHARES).............................. $10.57
======
NET ASSET VALUE - TAX-FREE NEW YORK FUND C CLASS
($57,107 / 5,401 SHARES)................................ $10.57
======
- ---------
* For pre-Refunded Bonds, the stated maturity is followed by the year in
which each bond is pre-refunded
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
COMPONENTS OF NET ASSETS AT JUNE 30, 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..... $ 9,396,634
Accumulated net realized gain on investments............. 17,879
Net unrealized appreciation of investments............... 665,084
-----------
Total Net Assets......................................... $10,079,597
===========
NET ASSETS VALUE AND OFFERING PRICE FOR TAX-FREE
NEW YORK FUND A CLASS
Net asset value per share (A)............................ $10.60
Sales charge (3.75% of offering price or 3.87% of
amount invested per share)(B).......................... .41
------
Offering price.................................................. $11.01
======
- ---------
(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 Voyageur Tax-Free New York Fund Class A.
See accompanying notes
<PAGE>
for tax-exempt income 17
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE FLORIDA TAX-FREE FLORIDA TAX-FREE
FLORIDA FUND INSURED FUND INTERMEDIATE FUND NEW YORK FUND
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest................................................... $320,008 $4,445,291 $98,328 $306,309
-------- ---------- ------- --------
EXPENSES:
Management fees............................................ 28,233 400,981 7,643 24,694
Distribution expense....................................... 24,532 214,428 7,049 13,668
Dividend disbursing and transfer agent fees and expenses... 2,322 65,259 3,474 4,625
Registration fees.......................................... 1,254 15,230 543 4,505
Reports and statements to shareholders..................... 3,900 15,210 619 1,840
Accounting and administration.............................. 2,022 39,207 944 2,690
Custodian fees............................................. 1,740 12,500 150 1,850
Professional fees.......................................... 5,700 32,313 1,228 397
Taxes (other than taxes on income)......................... 200 11,507 100 960
Directors' fees............................................ 360 1,489 1,189 352
Amortization of organization expenses...................... -- -- 4,607 --
Other...................................................... 2,288 73,837 1,083 1,200
-------- ---------- ------- --------
72,551 881,961 28,629 56,781
Less expenses waived or absorbed........................... (30,514) (176,127) (8,928) (6,072)
-------- ---------- ------- --------
Total net expenses......................................... 42,037 705,834 19,701 50,709
-------- ---------- ------- --------
NET INVESTMENT INCOME...................................... 277,971 3,739,457 78,627 255,600
-------- ---------- ------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments........................... 13,761 1,322,808 14,523 11,155
Net change in unrealized appreciation/depreciation of
investments.............................................. 48,405 (541,701) (1,755) (47,858)
-------- ---------- ------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS..... 62,066 781,107 12,768 (36,703)
-------- ---------- ------- --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $340,037 $4,520,564 $91,395 $218,897
======== ========== ======= ========
</TABLE>
See accompanying notes
<PAGE>
18 for tax-exempt income
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TAX-FREE FLORIDA TAX-FREE FLORIDA INSURED
--------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
6/30/98 12/31/97 6/30/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income.................... $ 277,971 $ 430,343 $ 3,739,457 $ 8,878,219
Net realized gain on investments......... 13,761 28,365 1,322,808 2,172,843
Net change in unrealized appreciation/
depreciation of investments............ 48,305 380,127 (541,701) 5,978,357
----------- ----------- ------------ ------------
Net increase in net assets
resulting from operations.............. 340,037 838,835 4,520,564 17,029,419
----------- ----------- ------------ ------------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income:
A Class................................ (217,209) (330,131) (3,664,301) (8,815,981)
B Class................................ (55,227) (100,213) (75,155) (165,230)
C Class................................ (5,569) (3,278) - (200)
----------- ----------- ------------ ------------
(278,005) (433,622) (3,739,456) (8,981,411)
----------- ----------- ------------ ------------
Net realized gain on investment
transactions:
A Class................................ - (11,878) - -
B Class................................ - (4,598) - -
C Class................................ - (239) - -
----------- ----------- ------------ ------------
- (16,715) - -
----------- ----------- ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class................................ 2,249,248 2,855,133 1,649,138 4,527,089
B Class................................ 885,314 1,142,910 338,363 820,580
C Class................................ 251,331 110,984 11 21,663
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and net realized gain
on security transactions:
A Class................................ 86,087 109,685 1,056,758 2,516,492
B Class................................ 9,592 18,887 25,833 49,154
C Class................................ 2,693 2,636 - 126
----------- ----------- ------------ ------------
3,484,265 4,240,235 3,070,103 7,935,104
Cost of shares repurchased: ----------- ----------- ------------ ------------
A Class................................ (509,751) 1,502,655) (16,352,797) (44,980,021)
B Class................................ (595,765) (213,644) (536,203) (333,793)
C Class................................ (11,000) - - (22,065)
----------- ----------- ------------ ------------
(1,116,516) (1,716,299) (16,889,000) (45,335,879)
----------- ----------- ------------ ------------
Increase (decrease) in net assets derived
from capital share transactions........ 2,367,749 2,523,936 (13,818,897) (37,400,775)
----------- ----------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS: .. 2,429,781 2,912,434 (13,037,789) (29,352,767)
NET ASSETS:
Beginning of period...................... 10,323,858 7,411,424 166,040,156 195,392,923
----------- ----------- ------------ ------------
End of period............................ $12,753,639 $10,323,858 $153,002,367 $166,040,156
=========== =========== ============ ============
</TABLE>
<PAGE>
[RESTUBBED FROM ABOVE]
<TABLE>
<CAPTION>
TAX-FREE FLORIDA INTERMEDIATE TAX-FREE NEW YORK FUND
-------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
6/30/98 12/31/97 6/30/98 12/31/97
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income.................... $ 78,627 $ 172,179 $ 255,600 $ 556,331
Net realized gain on investments......... 14,523 6,838 11,155 187,711
Net change in unrealized appreciation/
depreciation of investments............ (1,755) 94,815 (47,858) (71,772)
---------- ---------- ----------- ----------
Net increase in net assets
resulting from operations.............. 91,395 273,832 218,897 672,270
---------- ---------- ----------- ----------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income:
A Class................................ (61,977) (150,385) (249,628) (548,002)
B Class................................ (15,729) (39,036) (4,884) (8,649)
C Class................................ (956) (2,258) (1,254) (2,665)
---------- ---------- ----------- ----------
(78,662) (191,679) (255,766) (559,316)
---------- ---------- ----------- ----------
Net realized gain on investment
transactions:
A Class................................ - (6,599) - (154,974)
B Class................................ - (1,912) - (2,715)
C Class................................ - (115) - (902)
---------- ---------- ----------- ----------
- (8,626) - (158,591)
---------- ---------- ----------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class................................ 538,200 642,850 464,862 657,442
B Class................................ 20,041 8,000 137,662 72,748
C Class................................ - - - -
Net asset value of shares issued upon
reinvestment of dividends from net
investment income and net realized gain
on security transactions:
A Class................................ 34,636 93,842 187,559 574,581
B Class................................ 8,371 21,850 3,955 10,758
C Class................................ - - 1,262 3,708
---------- ---------- ----------- ----------
601,248 766,542 795,300 1,319,237
Cost of shares repurchased: ---------- ---------- ----------- ----------
A Class................................ (656,238) (787,624) (449,482) (1,671,287)
B Class................................ (129,969) (160,999) (15,227) (167,603)
C Class................................ - - - (236)
---------- ---------- ----------- ----------
(786,207) (948,623) (464,709) (1,839,126)
---------- ---------- ----------- ----------
Increase (decrease) in net assets derived
from capital share transactions........ (184,959) (182,081) 330,591 (519,889)
---------- ---------- ----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS: .. (172,226) (108,554) 293,722 (565,526)
NET ASSETS:
Beginning of period...................... 4,146,689 4,255,243 9,785,875 10,351,401
---------- ---------- ----------- ----------
End of period............................ $3,974,463 $4,146,689 $10,079,597 $9,785,875
========== ========== =========== ==========
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 19
FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout each
period were as follows:
<TABLE>
<CAPTION>
TAX-FREE FLORIDA FUND - CLASS A
------------------------------------------------------------------
SIX MONTHS PERIOD FROM
ENDED YEAR ENDED YEAR ENDED 3/2/95(2) TO
6/30/98(1) 12/31/97(4) 12/31/96 12/31/95
(UNAUDITED)
<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 . . . . . . . . . . . . . . . . 0.270 0.591 0.590 0.470
Net realized and unrealized gain (loss) on
investments . . . . . . . . . . . . . . . . . . . . 0.080 0.523 - 0.750
------- -------- ------- -------
Total from investment operations. . . . . . . . . . . 0.350 1.114 0.380 1.220
------- -------- ------- -------
Less dividends and distributions:
Dividends from net investment income. . . . . . . . . (0.280) (0.594) (0.590) (0.470)
Distributions from net realized gain on investment
transactions. . . . . . . . . . . . . . . . . . . . - (0.020) - (0.020)
------- -------- ------- -------
Total dividends and distributions . . . . . . . . . . (0.280) (0.614) (0.590) (0.490)
------- -------- ------- -------
Net asset value, end of period. . . . . . . . . . . . . $11.090 $11.020 $10.520 $10.730
======= ======= ======= =======
Total Return(3) . . . . . . . . . . . . . . . . . . . . 3.22% 10.93% 3.74% 12.49%
Ratios and supplemental data:
Net assets, end of period (000 omitted) . . . . . . . $9,380 $7,506 $5,761 $4,421
Ratio of expenses to average net assets . . . . . . . 0.56% 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. 4.93% 5.53% 5.66% 5.26%(5)
Ratio of net investment income to average net assets
prior to expense limitation . . . . . . . . . . . . 4.39% 4.98% 4.74% 4.33%(5)
Portfolio turnover. . . . . . . . . . . . . . . . . . 28% 19% 70% 64%
</TABLE>
- ---------
(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
<PAGE>
20 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE FLORIDA FUND - CLASS B
----------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD FROM
6/30/98(1) YEAR ENDED YEAR ENDED 3/2/95(2) TO
(UNAUDITED) 12/31/97(4) 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 .................... 0.268 0.527 0.560 0.150
Net realized and unrealized gain
(loss) on investments .................... 0.042 0.531 (0.200) 0.380
------- ------- ------- -------
Total from investment operations ......... 0.310 1.058 0.360 0.530
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ..... (0.240) (0.538) (0.560) (0.150)
Distributions from net realized gain
on security transactions ................ -- (0.020) -- (0.020)
------- ------- ------- -------
Total dividends and distributions ........ (0.240) (0.558) (0.560) (0.170)
------- ------- ------- -------
Net asset value, end of period ............. $11.100 $11.030 $10.530 $10.730
======= ======= ======= =======
Total Return(3) ............................ 2.83% 10.35% 3.51% 5.10%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .. $2,997 $2,685 $1,635 $101
Ratio of expenses to average net assets .. 1.31% 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 ...................... 4.88% 4.99% 5.23% 4.88%(5)
Ratio of net investment income to average
net assets prior to expense limitation .. 4.34% 4.44% 3.99% 3.32%(5)
Portfolio turnover ....................... 28% 19% 70% 64%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE FLORIDA FUND - CLASS C
------------------------------------------------------------------------------
SIX MONTHS
ENDED PERIOD FROM
6/30/98(1) YEAR ENDED YEAR ENDED 4/22/95(2) TO
(UNAUDITED) 12/31/97(4) 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 .................... 0.271 0.511 0.370 0.330
Net realized and unrealized gain
(loss) on investments .................... 0.039 0.521 (0.210) 0.560
-------- ------- ------- -------
Total from investment operations ......... 0.310 1.032 0.160 0.890
-------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ..... (0.240) (0.512) (0.370) (0.340)
Distributions from net realized gain
on security transactions ................ -- (0.020) -- (0.020)
-------- ------- ------- -------
Total dividends and distributions ........ (0.240) (0.532) (0.370) (0.360)
-------- ------- ------- -------
Net asset value, end of period ............. $11.090 $11.020 $10.520 $10.730
======= ======= ======= =======
Total Return(3) ............................ 2.83% 10.09% 2.97% 8.88%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .. $377 $133 $16 $9
Ratio of expenses to average net assets .. 1.31% 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 ...................... 4.88% 4.78% 4.83% 4.57%(5)
Ratio of net investment income to average
net assets prior to expense limitation .. 4.34% 4.23% 3.98% 3.68%(5)
Portfolio turnover ....................... 28% 19% 70% 64%
</TABLE>
- -------------------
(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
<PAGE>
for tax-exempt income 21
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE FLORIDA INSURED FUND - CLASS A
--------------------------------------------------------------------------
SIX MONTHS TWO MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED ENDED YEAR ENDED
6/30/98(1) 12/31/97(3) 12/31/96 12/31/95 12/31/94 10/31/94
(UNAUDITED)
<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 ............................... 0.265 0.548 0.530 0.540 0.100 0.550
-------- -------- -------- -------- -------- --------
Net realized and unrealized gain (loss)
on investments ..................................... 0.050 0.536 (0.230) 1.440 (0.120) (1.460)
-------- -------- -------- -------- -------- --------
Total from investment operations .................... 0.315 1.084 0.300 1.980 (0.020) (0.910)
-------- -------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ................ (0.265) (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 ................... (0.265) (0.554) (0.530) (0.560) (0.100) (0.600)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ......................... $11.290 $11.240 $10.710 $10.940 $9.520 $9.640
======== ======== ======== ======== ======== ========
Total Return(2) ........................................ 2.82% 10.42% 2.90% 21.22% (0.11%) (8.38%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............. $149,211 $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 ........................ 1.09% 0.85% 0.96% 0.95% 1.06%(4) 0.96%
Ratio of net investment income to average
net assets ......................................... 4.73% 5.07% 5.02% 5.24% 6.24%(4) 5.24%
Ratio of net investment income to average
net assets prior to expense limitation ............. 4.51% 5.01% 4.79% 4.80% 5.38%(4) 4.72%
Portfolio turnover .................................. 15% 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.
</TABLE>
See accompanying notes
<PAGE>
22 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE FLORIDA INSURED FUND - CLASS B
----------------------------------------------------------------------------
SIX MONTHS TWO MONTHS PERIOD FROM
ENDED YEAR ENDED YEAR ENDED YEAR ENDED ENDED 3/11/94(2) TO
6/30/98(1) 12/31/97(4) 12/31/96 12/31/95 12/31/94 10/31/94
(UNAUDITED)
<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 ........................... 0.223 0.477 0.480 0.500 0.090 0.310
Net realized and unrealized gain
(loss) on investments .......................... 0.060 0.523 (0.230) 1.440 (0.110) (1.010)
------- ------- ------- ------- ------ -------
Total from investment operations ................ 0.283 1.000 0.250 1.940 (0.020) (0.700)
------- ------- ------- ------- ------ -------
Less dividends and distributions:
Dividends from net investment income ............ (0.223) (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 ............... (0.223) (0.480) (0.480) (0.520) (0.090) (0.310)
------- ------- ------- ------- ------ -------
Net asset value, end of period ..................... $11.290 $11.230 $10.710 $10.940 $9.520 $9.630
======= ======= ======= ======= ====== ======
Total Return(3) .................................... 2.53% 9.58% 2.40% 20.76% (0.03%) (6.69%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ......... $3,791 $3,943 $3,222 $2,814 $1,477 $1,13(5)
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 .................... 1.84% 1.52% 1.72% 1.68% 1.81%(5) 1.28%(5)
Ratio of net investment income to average
net assets ..................................... 3.95% 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 ......... 3.73% 4.34% 4.03% 4.01% 4.46%(5) 4.35%(5)
Portfolio turnover .............................. 15% 15% 57% 101% 3% 49%
</TABLE>
- -----------------
(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
<PAGE>
for tax-exempt income 23
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
TAX-FREE FLORIDA INTERMEDIATE FUND - CLASS A
----------------------------------------------------------------
SIX MONTHS PERIOD FROM
ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/1/94(2) TO
6/30/98(1) 12/31/97(4) 12/31/96 12/31/95 12/31/94
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............. $10.620 $10.430 $10.560 $9.640 $10.000
Income from investment operations:
Net investment income .......................... 0.232 0.475 0.420 0.440 0.180
Net realized and unrealized gain (loss)
on investments ................................ 0.040 0.261 (0.080) 1.010 (0.360)
------- ------- ------- ------- -------
Total from investment operations ............... 0.272 0.736 0.340 1.450 (0.180)
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ........... (0.232) (0.524) (0.470) (0.490) (0.180)
Distributions from net realized gain on
investment transactions ....................... - (0.022) - (0.040) -
------- ------- ------- ------- -------
Total dividends and distributions .............. (0.232) (0.546) (0.470) (0.530) (0.180)
------- ------- ------- ------- -------
Net asset value, end of period .................... $10.660 $10.620 $10.430 $10.560 $9.640
======= ======= ======= ======= =======
Total Return(3) ................................... 2.55% 7.25% 3.34% 15.14% (1.55%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........ $3,090 $3,163 $3,159 $859 $592
Ratio of expenses to average net assets ........ 0.84% 0.61% 0.66% 0.63% 0.00%
Ratio of expenses to average net assets
prior to expense limitation ................... 1.31% 1.33% 1.25% 1.25% 1.25%(5)
Ratio of net investment income to average
net assets .................................... 4.30% 4.64% 4.63% 4.28% 4.19%(5)
Ratio of net investment income to average
net assets prior to expense limitation ........ 3.83% 3.92% 4.04% 3.66% 2.94%(5)
Portfolio turnover ............................. 0% 20% 63% 28% 0%
- ----------------
(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.
</TABLE>
See accompanying notes
<PAGE>
24 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
TAX-FREE FLORIDA INTERMEDIATE FUND - CLASS B
--------------------------------------------------
SIX MONTHS PERIOD FROM
ENDED YEAR ENDED YEAR ENDED 9/1/95(2)
6/30/98(1) 12/31/97(4) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period .............. $10.620 $10.420 $10.560 $10.580
Income from investment operations:
Net investment income .......................... 0.187 0.391 0.340 0.100
Net realized and unrealized gain (loss)
on investments ................................ 0.040 0.272 (0.090) 0.030
------- ------- ------- -------
Total from investment operations ............... 0.227 0.663 0.250 0.130
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ........... (0.187) (0.441) (0.390) (0.110)
Distributions from net realized gain
on security transactions ...................... - (0.022) - (0.040)
------- ------- ------- -------
Total dividends and distributions .............. (0.187) (0.463) (0.390) (0.150)
------- ------- ------- -------
Net asset value, end of period .................... $10.660 $10.620 $10.420 $10.560
======= ======= ======= =======
Total Return(3) ................................... 2.12% 6.50% 2.47% 1.13%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........ $829 $928 $1,042 $41
Ratio of expenses to average net assets ........ 1.59% 1.39% 1.48% 1.52%(5)
Ratio of expenses to average net assets
prior to expense limitation ................... 2.06% 2.11% 2.00% 2.00%(5)
Ratio of net investment income to
average net assets ............................ 3.56% 3.86% 3.81% 3.32%(5)
Ratio of net investment income to average
net assets prior to expense limitation ........ 3.09% 3.14% 3.29% 2.84%(5)
Portfolio turnover ............................. 0% 20% 63% 28%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE FLORIDA INTERMEDIATE FUND - CLASS C
--------------------------------------------------
SIX MONTHS PERIOD FROM
ENDED YEAR ENDED YEAR ENDED 3/23/95(2)
6/30/98(1) 12/31/97(4) 12/31/96 TO 12/31/95
(UNAUDITED)
<S> <C> <C> <C> <C>
Net asset value, beginning of period .............. $10.620 $10.420 $10.550 $10.080
Income from investment operations:
Net investment income .......................... 0.189 0.383 0.330 0.250
Net realized and unrealized gain (loss)
on investments ................................ 0.028 0.272 (0.090) 0.550
------- ------- ------- -------
Total from investment operations ............... 0.217 0.655 0.240 0.800
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ........... (0.187) (0.433) (0.370) (0.290)
Distributions from net realized gain
on security transactions ...................... - (0.022) - (0.040)
------- ------- ------- -------
Total dividends and distributions .............. (0.187) (0.455) (0.370) (0.330)
------- ------- ------- -------
Net asset value, end of period .................... $10.650 $10.620 $10.420 $10.550
======= ======= ======= =======
Total Return(3) ................................... 2.03% 6.43% 2.37% 7.95%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........ $55 $55 $54 $54
Ratio of expenses to average net assets ........ 1.59%(5) 1.46% 1.55% 1.62%(5)
Ratio of expenses to average net assets
prior to expense limitation ................... 2.06%(5) 2.18% 2.00% 2.00%(5)
Ratio of net investment income to
average net assets ............................ 3.56%(5) 3.79% 3.74% 3.10%(5)
Ratio of net investment income to average
net assets prior to expense limitation ........ 3.09%(5) 3.07% 3.29% 2.72%(5)
Portfolio turnover ............................. 0% 20% 63% 28%
</TABLE>
- ----------------
(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
<PAGE>
for tax-exempt income 25
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
TAX-FREE NEW YORK FUND - CLASS A
----------------------------------------------------------------------------
SIX MONTHS THREE MONTHS THREE MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED YEAR ENDED ENDED
6/30/98(1) 12/31/97(4) 12/31/96(2) 9/30/96 9/30/95 9/30/94
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............ $10.640 $10.690 $10.720 $10.870 $10.740 $10.810
Income from investment operations:
Net investment income ........................ 0.274 0.603 0.120 0.550 0.570 0.150
Net realized and unrealized gain
(loss) on investments ....................... (0.040) 0.128 0.010 (0.130) 0.170 (0.060)
------- ------- ------- ------- ------- -------
Total from investment operations ............. 0.234 0.731 0.130 0.420 0.740 0.090
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ......... (0.274) (0.606) (0.120) (0.550) (0.590) (0.160)
Distributions from net realized gain on
investment transactions ..................... - (0.175) (0.040) (0.020) (0.020) -
------- ------- ------- ------- ------- -------
Total dividends and distributions ............ (0.274) (0.781) (0.160) (0.570) (0.610) (0.160)
------- ------- ------- ------- ------- -------
Net asset value, end of period .................. $10.600 $10.640 $10.690 $10.720 $10.870 $10.740
======= ======= ======= ======= ======= =======
Total Return(3) ................................. 2.22% 7.09% 1.21% 3.94% 7.31% 0.79%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ...... $9,730 $9,563 $10,044 $10,548 $11,931 $12,797
Ratio of expenses to average net assets ...... 1.00% 1.00% 0.97%(5) 1.34% 1.31% 1.09%(5)
Ratio of expenses to average net assets prior
to expense limitation ....................... 1.12% 1.39% 1.12%(5) 1.55% 1.82% 1.09%(5)
Ratio of net investment income to
average net assets .......................... 5.20% 5.66% 5.31%(5) 5.14% 5.66% 5.74%(5)
Ratio of net investment income to
average net assets prior to
expense limitation .......................... 5.08% 5.27% 5.16%(5) 4.93% 5.15% 5.74%(5)
Portfolio turnover ........................... 14% 30% 5% 12% 10% 0%
</TABLE>
- ------------------
(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
<PAGE>
26 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
TAX-FREE NEW YORK FUND - CLASS B
-----------------------------------------------------------------------
SIX MONTHS THREE MONTHS PERIOD FROM
ENDED YEAR ENDED ENDED YEAR ENDED 11/4/94(2)
6/30/98(1) 12/31/97(5) 12/31/96(3) 9/30/96 TO 9/30/95
(UNAUDITED)
<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 .......................... 0.237 0.524 0.100 0.470 0.430
Net realized and unrealized gain (loss)
on investments ................................ (0.042) 0.136 - (0.130) 0.540
------- -------- -------- -------- --------
Total from investment operations ............... 0.195 0.660 0.100 0.340 0.970
------- -------- -------- -------- --------
Less dividends and distributions:
Dividends from net investment income ........... (0.235) (0.525) (0.100) (0.470) (0.450)
Distributions from net realized gain on
investment transactions ....................... - (0.175) (0.040) (0.020) (0.020)
------- -------- -------- -------- --------
Total dividends and distributions .............. (0.235) (0.700) (0.140) (0.490) (0.470)
------- -------- -------- -------- --------
Net asset value, end of period .................... $10.570 $10.610 $10.650 $10.690 $10.840
Total Return(4) ................................... 1.85% 6.39% 0.95% 3.14% 9.46%
======= ======== ======== ======== ========
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........ $293 $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 ......................... 1.87% 2.14% 2.00%(6) 2.30% 2.60%(6)
Ratio of net investment income to average
net assets .................................... 4.45% 4.91% 4.43%(6) 4.39% 4.68%(6)
Ratio of net investment income to average
net assets prior to expense limitation ........ 4.33% 4.52% 4.30%(6) 4.18% 4.17%(6)
Portfolio turnover ............................. 14% 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.
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 27
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
TAX-FREE NEW YORK FUND - CLASS C
--------------------------------------------------------------
SIX MONTHS THREE MONTHS PERIOD FROM
ENDED YEAR ENDED ENDED YEAR ENDED 4/26/95(2)
6/30/98(1) 12/31/97(5) 12/31/96(3) 9/30/96 TO 9/30/95
(UNAUDITED)
<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 ............................ 0.234 0.522 0.100 0.470 0.210
Net realized and unrealized gain (loss)
on investments .................................. (0.039) 0.128 - (0.130) 0.060
------- ------- ------- ------- -------
Total from investment operations ................. 0.195 0.650 0.100 0.340 0.270
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............. (0.235) (0.525) (0.100) (0.470) (0.210)
Distributions from net realized gain
on investment transactions ...................... - (0.175) (0.040) (0.020) -
------- ------- ------- ------- -------
Total dividends and distributions ................ (0.235) (0.700) (0.140) (0.490) (0.210)
------- ------- ------- ------- -------
Net asset value, end of period ...................... $10.570 $10.610 $10.660 $10.700 $10.850
======= ======= ======= ======= =======
Total Return(4) ..................................... 1.85% 6.29% 0.95% 3.14% 2.54%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .......... $57 $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 ........................... 1.87% 2.14% 2.00%(6) 2.30% 2.6%(6)
Ratio of net investment income to average
net assets ...................................... 4.45% 4.91% 4.45%(6) 4.39% 4.44%(6)
Ratio of net investment income to average net
assets prior to expense limitation .............. 4.33% 4.52% 4.29%(6) 4.18% 3.93%(6)
Portfolio turnover ............................... 14% 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.
</TABLE>
See accompanying notes
<PAGE>
28 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
Delaware-Voyageur Tax-Free Florida Fund (formerly Voyageur Florida Tax Free
Fund) ("Tax-Free Florida Fund") and Delaware-Voyageur Tax-Free Florida Insured
Fund (formerly Voyageur Tax-Free Florida Insured Fund)("Tax-Free Florida Insured
Fund"), series of the Voyageur Investment Trust and Delaware-Voyageur Tax-Free
Florida Intermediate Fund (formerly Voyageur Florida Limited Term Tax-Free
Fund)("Tax-Free Florida Intermediate Fund"), a series of the Voyageur Investment
Trust II, (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 and Tax-Free Florida Intermediate Fund are registered as
non-diversified funds. The Tax-Free Florida Insured Fund is registered as a
diversified fund. Delaware-Voyageur Tax-Free New York Fund (formerly Voyageur
New York Tax-Free 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 Florida
Intermediate Fund seeks to preserve original investment principal while
providing income free from both federal income taxes and state intangibles tax
by investing in intermediate term investment grade 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 Florida Tax-Free Florida Fund A Class, the Tax-Free
Florida Insured Fund A Class, and the Tax-Free New York Fund A Class carry a
front-end sales charge of 3.75%. The Tax-Free Florida Intermediate Fund A Class
carries a front end sales charge of 2.75%. The Florida Tax-Free Florida Fund B
Class, the Tax-Free Florida Insured Fund B Class, the Tax-Free Florida
Intermediate Fund B Class, and the Tax-Free New York Fund B Class carries a
deferred sales charge. The Tax-Free Florida Fund C Class, the Tax-Free Florida
Insured Fund C Class, the Tax-Free Florida Intermediate Fund C Class, and the
Tax-Free New York Fund C Class carries a level load deferred sales charge.
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 agent and accounting service agent for the Funds.
<PAGE>
2. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Money market instruments having less than 60 days to maturity are
valued at amortized cost which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Fund's Board
of Directors.
Federal Income Taxes - Each Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Funds on the basis of daily net assets of each class. Distribution expenses
relating to a specific class are charged directly to that class.
Other - Expenses common to all Funds within the Delaware 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 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 Fund
pays DMC, the Investment Manager of each Fund, an annual fee, which is
calculated daily on the average daily net assets of each Fund.
<PAGE>
for tax-exempt income 29
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
DMC has elected to waive their 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 December 31, 1998.
<TABLE>
<CAPTION>
MANAGEMENT FEE AS A WAIVER AS A
PERCENTAGE OF AVERAGE PERCENTAGE OF AVERAGE
DAILY NET ASSETS DAILY NET ASSETS EXPENSES ABSORBED
(PER ANNUM) (PER ANNUM) BY DMC
--------------------- ---------------------- -----------------
<S> <C> <C> <C>
Tax-Free Florida Fund ............................. 0.50% 0.31% $30,514
Tax-Free Florida Insured Fund ..................... 0.50% 0.62% $176,127
Tax-free Florida Intermediate Fund ................ 0.40% 0.75% $8,928
Tax-Free New York ................................. 0.50% 0.75% $6,072
</TABLE>
The Funds have engaged Delaware Service Company, Inc. (DSC), an affiliate of
DMC, to provide dividend disbursing, transfer agent and accounting and
administration services for each fund.
For the six months ended June 30, 1998, the amounts expensed for each Fund were
as follows:
<TABLE>
<CAPTION>
DIVIDEND DISBURSING,
TRANSFER AGENT FEES ACCOUNTING AND
AND OTHER EXPENSES ADMINISTRATION SERVICES
-------------------- -----------------------
<S> <C> <C>
Tax-Free Florida Fund ........................................ $2,322 $2,022
Tax-Free Florida Insured Fund ................................ $65,259 $39,207
Tax-Free Florida Intermediate Fund ........................... $3,474 $944
Tax-Free New York Fund ....................................... $4,625 $2,690
</TABLE>
On June 30, 1998, the Funds had payables to affiliates as follows:
<TABLE>
<CAPTION>
DIVIDEND DISBURSING,
TRANSFER AGENT FEES,
INVESTMENT MANAGEMENT ACCOUNTING SERVICES AND OTHER OTHER EXPENSES PAYABLE
FEES PAYABLE TO DMC EXPENSES PAYABLE TO DSC TO DMC AND AFFILIATES
--------------------- ----------------------------- ----------------------
<S> <C> <C> <C>
Tax-Free Florida Fund ....................... $0 $1,514 $4,279
Tax-Free Florida Insured Fund ............... $104,417 $17,652 $37,976
Tax-Free Florida Intermediate Fund .......... $0 $785 $952
Tax-Free New York Fund ...................... $3,262 $2,253 $3,185
</TABLE>
Pursuant to the Distribution Agreement, the Funds pay DDLP, the Distributor and
an affiliate of DMC, an annual fee not to exceed 0.25% of the average daily net
assets of the A Class and 1.00% of the average daily net assets of the B and C
Class for each Series.
<PAGE>
For the six month period ended June 30, 1998, DDLP earned commissions on sales
of the Fund A Class shares for each Fund as follows:
DDLP EARNED COMMISSIONS ON
SALES OF THE FUND A CLASS SHARES
--------------------------------
Tax-Free Florida Fund ...................... $6,223
Tax-Free Florida Insured Fund .............. $4,785
Tax-Free Florida Intermediate Fund ......... $323
Tax-Free New York Fund ..................... $838
Certain officers of DMC, DSC and DDLP are officers, directors and/or employees
of the Fund. These officers, directors and employees are paid no compensation by
the Fund.
4. Investments
During the six months ended June 30, 1998 the Fund made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments for each Fund as follows:
PURCHASES SALES
---------- ------
Tax-Free Florida Fund ................... $3,629,523 $1,522,196
Tax-Free Florida Insured ................ $11,938,505 $26,806,060
Tax-Free Florida Intermediate Fund ...... $0 $586,493
Tax-Free New York Fund .................. $689,193 $658,148
At June 30, 1998 the aggregate cost of securities and unrealized appreciation
(depreciation) for federal income tax purposes for each Fund were as follows:
<TABLE>
<CAPTION>
COST OF AGGREGATE UNREALIZED AGGREGATE UNREALIZED NET UNREALIZED
INVESTMENTS APPRECIATION DEPRECIATION APPRECIATION
----------- -------------------- -------------------- --------------
<S> <C> <C> <C> <C>
Tax-Free Florida Fund .................... $11,816,900 $566,677 $0 $566,677
Tax-Free Florida Insured Fund ............ $138,798,216 $12,784,657 $0 $12,784,657
Tax-Free Florida Intermediate Fund ....... $3,739,744 $157,932 $0 $157,932
Tax-Free New York Fund ................... $9,474,907 $667,664 ($2,581) $665,083
</TABLE>
For federal income tax purposes, as of December 31, 1997, Tax-Free Florida
Insured Fund had a capital loss carry over of $11,382,981 that will expire in
2002 through 2004.
<PAGE>
30 for tax-exempt income
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. Capital Stock
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
TAX-FREE TAX-FREE
FLORIDA FUND FLORIDA INSURED FUND
------------------------- -------------------------
SIX MONTHS SIX MONTHS
ENDED 6/30/98 YEAR ENDED ENDED 6/30/98 YEAR ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
<S> <C> <C> <C> <C>
Shares sold:
A Class ........................................ 203,083 264,535 146,169 417,805
B Class ........................................ 79,717 105,990 30,018 76,153
C Class ........................................ 22,687 10,329 - 1,960
Shares issued upon reinvestment of
dividends from net investment income
and net realized gains from
security transactions:
A Class ........................................ 7,773 10,263 93,639 231,868
B Class ........................................ 865 1,765 2,290 4,520
C Class ........................................ 243 243 - 11
------- ------- --------- ---------
314,368 393,125 272,116 732,317
------- ------- --------- ---------
Shares repurchased:
A Class ........................................ (45,959) (141,380) (1,450,931) (4,163,715)
B Class ........................................ (53,926) (19,696) (47,573) (30,565)
C Class ........................................ (989) - - (1,971)
------- ------- --------- ---------
(100,874) (161,076) (1,498,504) (4,196,251)
------- ------- --------- ---------
Net Increase (Decrease) ........................... 213,494 232,049 (1,226,388) (3,463,934)
======= ======= ========= =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX-FREE FLORIDA TAX-FREE
INTERMEDIATE FUND NEW YORK FUND
------------------------- -------------------------
SIX MONTHS SIX MONTHS
ENDED 6/30/98 YEAR ENDED ENDED 6/30/98 YEAR ENDED
(UNAUDITED) 12/31/97 (UNAUDITED) 12/31/97
Shares sold:
<S> <C> <C> <C> <C>
A Class ........................................ 50,456 61,257 43,615 61,662
B Class ........................................ 1,876 765 13,022 6,824
C Class ........................................ - - - -
Shares issued upon reinvestment of
dividends from net investment income
and net realized gains from
security transactions:
A Class ........................................ 3,251 8,945 17,640 54,059
B Class ........................................ 786 2,082 373 1,014
C Class ........................................ - - 119 349
------ ------ ------ -------
56,369 73,049 74,769 123,908
------ ------ ------ -------
Shares repurchased:
A Class ........................................ (61,470) (75,457) (42,274) (156,730)
B Class ........................................ (12,230) (15,466) (1,436) (15,960)
C Class ........................................ - - - (22)
------ ------ ------ -------
(73,700) (90,923) (43,710) (172,712)
------ ------ ------ -------
Net Increase (Decrease) ........................... (17,331) (17,874) 31,059 (48,804)
====== ====== ====== =======
</TABLE>
See accompanying notes
6. Credit and Market Risk
The Funds concentrate their investments in securities issued by municipalities,
mainly in Florida for Tax-Free Florida, Tax-Free Florida Insured, and Tax-Free
Florida Intermediate Funds 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
Statement of Net Assets.
<PAGE>
DELAWARE INVESTMENTS FAMILY OF FUNDS
FOR GROWTH OF CAPITAL
Aggressive Growth Fund
Trend Fund
DelCap Fund
Small Cap Value Fund
U.S. Growth Fund
Growth Stock Fund
Tax-Efficient Equity Fund
FOR TOTAL RETURN
Social Awareness Fund
Blue Chip Fund
Devon Fund
Decatur Total Return Fund
Decatur Income Fund
REIT Fund
Delaware Fund
FOR INTERNATIONAL DIVERSIFICATION
Emerging Markets Fund
New Pacific Fund
Overseas Equity Fund
International Equity Fund
Global Equity Fund
Global Bond Fund
FOR CURRENT INCOME
Delchester Fund
High-Yield Opportunities Fund
Strategic Income Fund
U.S. Government Fund
Delaware-Voyageur
US Government Securities Fund
Limited-Term Government Fund
FOR TAX-EXEMPT INCOME
National High Yield Municipal Bond Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
State Tax-Free Funds*
MONEY MARKET FUNDS
Delaware Cash Reserve
Tax-Free Money Fund
ASSET ALLOCATION FUNDS
Growth Portfolio
Balanced Portfolio
Income Portfolio
* Available for the following states: Arizona, California, Colorado, Florida,
Idaho, Iowa, Kansas, Minnesota, Missouri, North Dakota, New Jersey, New
Mexico, New York, Ohio, Oregon, Pennsylvania, Utah, Washington, Wisconsin.
Insured and intermediate bond funds are available in selected states.
funds
(photo of keyboard)
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.
<PAGE>
THIS SEMI-ANNUAL REPORT IS FOR THE INFORMATION OF TAX-FREE FLORIDA, TAX-FREE
FLORIDA INSURED, TAX-FREE FLORIDA Intermediate and Tax-Free New York Fund
shareholders, but it may be used with prospective investors when preceded or
accompanied by a current Prospectus for any of these Funds, which sets forth
details about charges, expenses, investment objectives and operating policies of
each Fund. You should read the prospectus carefully before you invest. Summary
investment results are documented in 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
the Funds will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost.
- --------------------------------------------------------------------------------
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
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.
Copyright Delaware Distributors, L.P.
DELAWARE
INVESTMENTS
- ----------------------
Philadelphia * London
Printed in the USA
on recycled paper
SA-FLNY [6/98] PP8/98
(943)
