<PAGE>
FOR TAX-EXEMPT INCOME
DELAWARE-VOYAGEUR
Tax-Free Florida Funds
Tax-Free New York Fund
(various photos demonstrating service and guidance, professional management
and goals
service and guidance
professional management
goals
1997
Annual
Report
TAX-FREE FLORIDA FUND
TAX-FREE FLORIDA INSURED FUND
TAX-FREE FLORIDA INTERMEDIATE FUND
<PAGE>
A TRADITION OF SOUND INVESTING
commitment
A Commitment
To Our Investors
[PHOTO OF KEYBOARD]
Delaware Investments has a tradition of money management that dates back to
1929. We have a long and distinguished history of helping individuals and
institutions - including some of America's largest pension funds - reach their
financial goals.
Headquartered in Philadelphia, a block from the nation's oldest stock
exchange, the Delaware organization established its first mutual fund in
1938. Delaware International Advisers Ltd., our international affiliate, was
established in 1990 and is headquartered in London.
Delaware Investments offers a full range of mutual funds. We also
manage investments for variable annuity products, unit investment trusts and
closed-end funds, and offer retirement plan services for individuals and
businesses.
Delaware manages more than $40 billion in mutual fund assets and
institutional advisory accounts for more than half-a-million investors. We're
part of a global financial service and investment management business owned
by Lincoln National Corporation, whose subsidiaries manage more than $120
billion in assets.
Objectives
TAX-FREE FLORIDA FUND
To seek as high a level of current income exempt from federal income tax as
is consistent with preservation of capital.
TAX-FREE FLORIDA INSURED FUND
To seek as high a level of current income exempt from federal income tax as
is consistent with preservation of capital.
TAX-FREE FLORIDA INTERMEDIATE FUND
To provide investors with preservation of capital and, secondarily, current
income exempt from federal income tax by maintaining a weighted average
portfolio maturity of 10 years or less.
TAX-FREE NEW YORK FUND
To seek as high a level of income exempt from federal income tax and New York
State personal income tax as is consistent with preservation of capital.
tax-exempt
income
[PHOTO OF ILLUSTRATION FROM TAX-EXEMPT INCOME BROCHURES]
<PAGE>
for tax-exempt
income
1
January 12, 1998
Dear Shareholder:
WE ARE PLEASED TO PRESENT THE 1997 annual report of Delaware-Voyageur's Florida
and New York municipal bond funds. Both states' governments benefited from
strong economic growth that increased tax revenues last year.
This past year the municipal bond market soared to new heights amid
renewed confidence in 1) the Federal Reserve Board's ability to fight
inflation and 2) Washington's commitment to allow income generated by
municipal bonds to remain exempt from Federal taxes.
As of year's end, the difference in short-term and long-term interest
rates was the narrowest since 1993. Also, the potential income advantage
offered by moderate quality investment grade municipal bonds, compared to
bonds rated AAA, declined.
Each of our three Florida Funds outperformed its respective benchmark
and nearly all of its peers for the 12 months ended December 31, 1997. In
fact, for the period Tax-Free Florida Insured Fund ranked #1 out of 15 funds
investing primarily in insured Florida securities, while Tax-Free Florida
Fund ranked 3rd out of 64 comparable funds, according to Lipper Analytical
Services.
Many mutual funds investing in Florida securities enjoyed renewed
investor interest this past year. During the autumn of 1997, amid increased
AS OF YEAR'S END, THE DIFFERENCE IN SHORT-TRM AND LONG-TERM INTEREST RATES,
KNOWN AS THE YIELD CURVE, WAS THE SMALLEST SINCE 1993.
ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
12 months ended December 31, 1997
Tax-Free Florida Fund A Class +10.93%
Lehman Brothers Municipal Bond Index +9.19%
Lipper Florida Municipal Debt Fund Average (64 funds) +8.53%
- --------------------------------------------------------------------------------
Tax-Free Florida Insured Fund A Class +10.42%
Lehman Brothers Insured Municipal Bond Index +9.58%
Lipper Florida Insured Fund Average (15 funds) +9.16%
- --------------------------------------------------------------------------------
Tax-Free Florida Intermediate Fund A Class +7.25%
Merrill Lynch 3-to-7 Year Municipal Bond Index +6.50%
Lipper Florida Intermediate Fund Average (20 funds) +6.82%
- --------------------------------------------------------------------------------
Tax-Free New York Fund A Class +7.09%
Lipper New York Municipal Debt Fund Average (95 funds) +8.99%
- --------------------------------------------------------------------------------
All performance shown above is net asset value and assumes reinvestment of
distributions. For complete performance for all Classes, see pages 8 to 10.
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 #1 out of 15 Florida funds and
13 funds, respectively, for the one and three-year periods ended 12/31/97.
It ranked 3rd of three funds over its lifetime. Tax-Free Florida Fund Class
A ranked 3rd of 64 and 5th of 51 funds, respectively, for one-year and
lifetime periods ended 12/31/97. Rankings are based on total return at net
asset value. Expense limitations were in effect for the times shown.
Rankings would have been lower without the limitations.
<PAGE>
for tax-exempt
income
2
equity market volatility, more than one-third of all new money invested in
single-state municipal bond funds went to funds investing in Florida
securities, according to Strategic Insight, a financial services research
firm.
Investor demand for tax-free income was also strong in New York, and
as of year's end Tax-Free New York Fund offered attractive income potential.
However, a drawback to the Fund's income focus was that it limited Tax-Free
New York Fund's total return during 1997's bond rally.
In the coming year, about one-quarter of the New York Fund's bond
portfolio matures. We plan to use this as an opportunity to reposition the Fund
to potentially deliver more competitive results. Delaware views the municipal
bond market's long-term prospects as attractive for Floridians and New Yorkers.
While the Taxpayer Relief Act offered many potential benefits to more aggressive
equity investors, it provided fewer breaks to income-oriented investors. We
believe municipal bonds remain one of the few ways to provide investors with
monthly income without increasing their Federal income tax bill.
On the pages that follow, the Funds' portfolio managers, Patrick P.
Coyne and Mitchell L. Conery, review your Fund's performance in 1997 and outline
their approach for the coming year. We hope you find our new annual report
format informative.
Sincerely,
/s/ Wayne A. Stork
- ------------------------
Wayne A. Stork
Chairman
/s/ Jeffrey J. Nick
- ------------------------
Jeffrey J. Nick
President and Chief Executive Officer
discipline
Your Fund's Portfolio Managers
Patrick P. Coyne has managed fixed-income securities at Delaware Management
Company since 1990. He holds an MBA in finance from the University of
Pennsylvania's Wharton School of Business.
Mitchell L. Conery joined Delaware Management Company in January 1997 and
holds an MBA in finance from the State University of New York at Albany. He
had been managing a $5 billion municipal portfolio for Travelers Corp. in New
York prior to joining Delaware.
<PAGE>
for tax-exempt
income
3
Portfolio Managers' Review
In our opinion, the 1997 fiscal year was perhaps the most significant time
for the municipal bond market since federal tax laws were overhauled in 1986.
The Taxpayer Relief Act of 1997, passed in July, offered provisions that we
believe are beneficial to municipal bond mutual fund investors. Consider that
the law:
o Increased the after-tax total return potential of municipal bonds by
cutting the long-term capital gains tax from 28% to as low as 20%; and,
o Maintained municipal bonds' after-tax income advantage over bonds that
generate taxable income because Congress did not reduce the tax rate on
dividends.
Florida and New York were, respectively, the fourth and second
largest issuers of municipal bonds in the country last year. Together the two
states generated nearly one-fifth of all new bonds coming to market in 1997
according to The Bond Buyer, a trade publication. Both states have relatively
diverse economies. New Yorkers, however, face a much steeper overall tax
burden.
Since 1995, New York City's financial sector has enjoyed an
unprecedented period of prosperity even as many cities in upstate New York
have endured hard times amid job cutbacks at major employers such as Eastman
Kodak and Owens Corning. In Albany, the state legislature reduced income
taxes modestly for the third year in a row in 1997.
Partly because of migration from high tax states such as New York,
Florida's economy was strong during the past year, and most major cities,
with the exception of Miami, were in sound fiscal shape. In 1997, Standard &
Poor's and Moody's Investors Services both upgraded the credit rating of
Florida's general obligation bonds to AA+ and Aa2, respectively.
Florida's growth and demographic makeup generate a substantial need for
public financing for roads, schools, water treatment facilities and hospitals.
However, job growth in sectors such as housing development, tourism and health
care have provided a sufficient stream of revenue to meet municipal financing
needs. In fiscal 1997, Florida issued $12 billion
review
FLA/NY Chart Data
Florida Bond Prices Have Risen, Slightly Reducing Yields
Yields as of December 31, 1997 vs. December 31, 1996
Florida General Obligation Bonds Florida General Obligation Bonds
December 31, 1996 December 31, 1997
3 Month 3.31% 3.23%
6 Month 3.51% 3.38%
1 Year 3.68% 3.59%
2 Year 3.93% 3.79%
3 Year 4.13% 3.91%
4 Year 4.28% 4.01%
5 Year 4.38% 4.11%
7 Year 4.58% 4.25%
10 Year 4.88% 4.46%
15 Year 5.30% 4.82%
20 Year 5.46% 4.97%
30 Year 5.52% 5.02%
Yields on long-term Florida bonds fell as much as 50 basis points (0.50%) in
1997 as bond prices rose.
Source: Bloomberg Business News.
<PAGE>
for tax-exempt
income
4
worth of municipal bonds, a 17.6% increase from 1996, according to The Bond
Buyer.
TAX-FREE FLORIDA FUNDS'
STRATEGIC POSITIONING
Of Delaware's three Florida Funds, Tax-Free Florida Insured was by far the
largest in size as of December 31. More than 70% of municipal bonds issued in
Florida are protected by private insurance guaranteeing the payment of
principal and interest when due.
To increase Tax-Free Florida Insured Fund's income potential amid a
rally in bond prices and declining interest rates, we held inverse floaters
in fiscal 1997. This positioning served us well and helped the Fund's total
return for the year outpace all of its peers.
As of December 31, hospital bonds represented the largest sector
allocation of the Tax-Free Florida Insured Fund's portfolio, about 20.5% of net
assets. We believe this sector generally offers higher income potential than
other types of municipal bonds. Because of intense competition within the health
care sector, we carefully examine credit risk and invest only in hospitals that
have proven their ability to increase revenues over time.
In the spring of 1997, we used short-term bond market weakness as
another opportunity to increase the income potential of both Tax-Free Florida
Insured Fund and Tax-Free Florida Fund by modestly extending each Fund's
average effective duration. As fear of inflation subsided and the bond market
staged a summer and autumn rally, both Funds performed well. Each Fund's
duration shortened during the second half, mainly as a result of bond price
appreciation.
During the year, all three Florida Funds benefited by our
underweighted position in Miami bonds. Prior to the city's merger with
surrounding Dade County in 1997, Miami's credit quality appeared to grow weak
because of lax municipal financial controls. We will keep a close eye on
developments in the region, and seek investment opportunities only when bonds
appear to offer a favorable risk/reward profile.
strategic
positioning
Tax-Free Florida Fund
Portfolio Highlights and Asset Allocation
December 31, 1997
Water and Sewer 11.8%
Nursing Homes 10.5%
Transportation 11.0%
Higher Education 4.1%
Other Revenue Bonds 29.6%
Housing 17.7%
Hospitals 15.3%
Average Effective Maturity 11.6 years
Average Effective Duration 7.2 years
Average Quality AA
Thirty-Day Current SEC Yield* 4.88%
*For A Class shares based on Securities and Exchange Commission guidelines.
Thirty day current SEC yields for B and C classes was 4.31% and 4.32%
respectively. Approximately 4.3% of the income generated by Tax-Free Florida
Fund for the six months ended December 31, 1997, was subject to the federal
alternative minimum tax.
+ 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.
for tax-exempt income
<PAGE>
for tax-exempt
income
5
In 1997, we also had a relatively low weighting in the utility sector
in each Florida Fund. Increased industry competition, pending deregulation and
legal issues have increased the sector's credit risks. More utility companies
are vying to increase market share in the nation's fourth most populous state.
This past summer, we reduced Tax-Free Florida Fund's position in
housing bonds because we were concerned about an increase in mortgage
prepayments. When interest rates fall by a large amount, more homeowners are
likely to refinance what they owe to reduce their monthly payments. As of
December 31, some 17.7% of the Fund's net assets were allocated to housing
bonds compared to 23.1% at mid-year.
The narrowing of the spread between short and long-term interest
rates during the year presented a challenge for Tax-Free Florida Intermediate
Fund. Still, we were able to generate an attractive level of income relative
to price volatility.
Tax-Free Florida Intermediate Fund benefited from having a strong
position in bonds issued by continuing care/retirement facilities. The bonds
offered higher-than-average income potential, and our positioning in this sector
helped us provide results that were higher than both our benchmark and the
average of our peers as shown on page 1.
TAX-FREE NEW YORK FUND
STRATEGIC POSITIONING
Despite tax cuts by the Pataki administration since 1995, New Yorkers face
some of the nation's highest overall income tax rates. Fortunately, we
believe there is ample opportunity for income-oriented investors to tap the
potential of the state's growing municipal bond market. In fiscal 1997, New
York communities issued $27.9 billion in municipal securities, a 31.5%
increase from a year earlier, according to The Bond Buyer.
Strong investor demand easily absorbed this increased supply and led
to higher bond prices during the year. In addition, both New York City's and
New York State's credit quality was enhanced as tax revenues rose. The city's
economy appeared
[PHOTO OF KEYBOARD]
new
york
Tax-Free Florida Insured Fund
Portfolio Highlights and Asset Mix
December 31, 1997
Water and Sewer 11.4%
Inverse Floaters 7.8%
Utility 7.8%
Housing 18.2%
Transportation 3.2%
Other Revenue Bonds 27.5%
Hospitals 20.5%
General Obligation 3.6%
Average Effective Maturity 9.6 years
Average Effective Duration 7.9 years
Average Quality AAA
Thirty-Day SEC Yield* 4.25%
*For Class A shares based on Securities Exchange Commission guidelines. The SEC
yield for B class was 3.67% for Tax-Free Florida Insured Fund.
Approximately 20.6% of the income generated by Tax-Free Florida Insured Fund for
the 12 months ended December 31, 1997, was subject to federal alternative
minimum tax.
<PAGE>
for tax-exempt
income
6
to have recovered from its early 1990s slump as tens of thousands of new jobs
were created on Wall Street. Another positive development is that government
figures show crime rates have fallen, which may spur more tourism.
In fiscal 1997, your Fund's portfolio was composed primarily of older
bonds, with generally short durations (the approximate change in a bond's
price given a 1% change in interest rates) paying relatively high levels of
tax-exempt income. The net effect of the Fund's positioning was that while
Tax-Free New York paid an attractive monthly dividend, the Fund's total
return was less than our benchmark, the Lehman Brothers Municipal Bond Index,
an unmanaged composite of many states' bonds.
While maintaining the Fund's yield, we have lengthened the Fund's
duration from 4.6 years as of June 30, 1997 to 5.4 years as of December 31,
1997. As bonds in the Fund's portfolio mature in 1998, we anticipate replacing
them with securities of a somewhat longer duration if inflation remains tame and
the interest rate environment remains positive. We believe the Fund's longer
duration may contribute to the Fund's total return as it is unlikely the Federal
Reserve Board will significantly raise interest rates in the year ahead.
Pre-refunded bonds are issued to pay off an existing bond and thus
lower a municipality's interest costs. As of December 31, the largest share
of the Fund's net assets were allocated to pre-refunded bonds.
We believe that a need for transportation improvements may increase
issuance of fixed-income securities by both the city and state in the years
ahead. For example, New York City has a vast network of older roads, bridges
and tunnels that require constant maintenance and may need upgrading to meet
the needs of 21st Century commuters.
AS BONDS IN THE FUND'S PORTFOLIO MATURE IN 1998, WE ANTICIPATE REPLACING THEM
WITH SECURITIES OF A SOMEWHAT LONGER DURATION
Tax-Free Florida Intermediate Fund
Portfolio Highlights and Asset Mix
December 31, 1997
Nursing Homes 16.2%
Housing 8.9%
Water and Sewer 7.0%
Waste Disposal 5.0%
Hospitals 3.8%
Territorial 2.5%
Pre-refunded Bonds 14.5%
Cash 1.3%
Other Revenue Bonds 22.5%
Transportation 18.3%
Average Effective Maturity 6.4 years
Average Effective Duration 5.0 years
Average Quality AA
Thirty Day Current SEC Yield* 3.97%
*For A Class shares based on Securities and Exchange Commission guidelines.
Thirty-day SEC yields for both B and C classes was 3.23%.
Approximately 17.4% of the income generated by Tax-Free Florida Intermediate
Fund for the 12 months ended December 31, 1997, was subject to the federal
alternative minimum tax.
<PAGE>
for tax-exempt
income
7
SUMMARY OUTLOOK
State legislatures in Albany and Tallahassee appear to have implemented
effective fiscal policies and exercised fiscal restraint. New York State and
Florida each had a budget surplus at year's end, and both are expected to
post one in the year ahead.
Even though the municipal bond market rallied substantially in 1997,
we still believe selected bonds in both states offer solid income
opportunities with relatively moderate credit risk. For investors in high tax
brackets, municipal bonds may provide a way to both diversify an equity
portfolio and reduce income tax tolls on one's annual investment income.
Still, we'd like to offer a note of caution for the year ahead because
we believe reports suggesting that inflation is dead are premature. U.S. job
growth has continued at a brisk pace while the labor force participation rate -
the proportion of people who have or are looking for a job - reached a record
level of more than 67% of working age Americans in December, U.S. government
reports show.
While we believe this trend has served to boost state tax revenues
and reduce social expenses, it suggests that the Federal Reserve Board needs
to remain vigilant to prevent consumer prices from rising too much. Although
the inflation environment remains positive, we do not think yields on
long-term U.S. Treasury bonds will fall below 5% in 1998.
PATRICK P. COYNE
Vice President
Senior Portfolio Manager
MITCHELL L. CONERY
Vice President
Senior Portfolio Manager
January 12, 1998
outlook
Tax-Free New York Fund
Portfolio Highlights and Asset Mix
December 31, 1997
Transportation 9.5%
Hospitals 10.5%
Housing 15.4%
Territorial 2.0%
Other Revenue Bonds 20.7%
Pre-Refunded Bonds 32.2%
Higher Education 9.7%
Average Effective Maturity 7.4 years
Average Effective Duration 5.4 years
Average Quality AA
Thirty-Day Current SEC Yield* 3.72%
Approximately 3.1% of the income generated by Tax-Free New York Fund for the 12
months ended December 31, 1997, was subject to the federal alternative minimum
tax.
*For A Class shares based on Securities and Exchange Commission guidelines.
Thirty-day current SEC yields for both B and C classes was 3.13%.
<PAGE>
for tax-exempt
income
8
Fund Performance
Tax-Free Florida Fund's Performance
Growth of a $10,000 Investment
Total Return March 2, 1995 To December 31, 1997
<TABLE>
<CAPTION>
Tax-Free Lehman Brothers Lipper Florida Fund
Florida Fund A Class Municipal Bond Index Average (95 Funds)
<S> <C> <C> <C>
Mar. 2 '95 $ 9,625 $10,000 $10,000
Mar. 31 '95 9,731 10,000 10,000
Apr. '95 9,728 10,012 9,999
May '95 10,075 10,331 10,343
June '95 9,957 10,241 10,209
July '95 9,996 10,338 10,268
Aug.. '95 10,065 10,469 10,370
Sept. '95 10,214 10,535 10,452
Oct. '95 10,432 10,688 10,630
Nov. '95 10,652 10,855 10,838
Dec. '95 10,802 10,970 10,964
Jan. '96 10,863 11,053 11,008
Feb. '96 10,781 10,978 10,911
Mar. '96 10,538 10,838 10,739
Apr. '96 10,494 10,807 10,697
May '96 10,513 10,803 10,698
June '96 10,606 10,921 10,801
July '96 10,720 11,020 10,901
Aug. '96 10,771 11,017 10,888
Sept. '96 10,916 11,172 11,046
Oct. '96 11,051 11,298 11,163
Nov. '96 11,219 11,505 11,350
Dec. '96 11,208 11,466 11,300
Jan. '97 11,226 11,478 11,291
Feb. '97 11,321 11,584 11,383
Mar. '97 11,222 11,430 11,238
Apr. '97 11,329 11,526 11,332
May '97 11,501 11,699 11,481
June '97 11,841 11,824 11,603
July '97 11,946 12,151 11,931
Aug. '97 11,867 12,036 11,802
Sept. '97 12,044 12,179 11,935
Oct. '97 12,130 12,257 12,017
Nov. '97 12,230 12,329 12,087
Dec. '97 12,416 12,509 12,266
</TABLE>
Chart assumes $10,000 invested March 2, 1995, and includes the effect of a
3.75% sales charge and the reinvestment of distributions. Performance of
other Fund classes will vary due to differing charges and expenses. Past
performance does not guarantee future results.
TAX-FREE FLORIDA FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH DECEMBER 31, 1997
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 3/2/95)
Excluding Sales Charge +9.53% +10.93%
Including Sales Charge +8.07% +6.77%
- --------------------------------------------------------------------------------
Class B (Est. 9/15/95)
Excluding Sales Charge +8.29% +10.35%
Including Sales Charge +7.10% +6.35%
- --------------------------------------------------------------------------------
Class C (Est. 4/22/95)
Excluding Sales Charge +8.12% +10.09%
Including Sales Charge +8.12% +9.09%
<PAGE>
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 a voluntary expense
limitation in effect at the time. Returns would have been lower without the
limitation.
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 carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred
sales charge of up to 4% if redeemed before the end of the sixth year 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 Insured Fund's Performance
Growth of a $10,000 Investment
Total Return January 1, 1992, To December 31, 1997
<TABLE>
<CAPTION>
Tax-Free Florida Lehman Brothers Insured Lipper Florida Insured
<S> <C> <C> <C>
Jan. 1 '92 $ 9,625 $10,000 $10,000
Mar. 31 '92 9,767 10,027 10,020
June 30 '92 10,135 10,419 10,441
Sept. 30 '92 10,379 10,697 10,701
Dec. 31 '92 10,707 10,933 11,014
Mar. 31 '93 11,208 11,364 11,504
June 30 '93 11,587 11,767 11,895
Sept. 30 '93 12,002 12,186 12,339
Dec. 31 '93 12,071 12,357 12,508
Mar. 31 '94 11,483 11,581 11,672
June 30 '94 11,318 11,726 11,847
Sept. 30 '94 11,316 11,788 11,927
Dec. 31 '94 11,026 11,618 11,726
Mar. 31 '95 12,084 12,511 12,631
June 30 '95 12,365 12,802 12,783
Sept. 30 '95 12,700 13,168 13,113
Dec. 31 '95 13,366 13,774 13,832
Mar. 31 '96 13,013 13,562 13,468
June 30 '96 13,053 13,668 13,568
Sept. 30 '96 13,420 13,990 13,934
Dec. 31 '96 13,754 14,359 14,258
Mar. 31 '97 13,690 14,296 14,189
June 30 '97 14,206 14,806 14,659
Sept. 30 '97 14,709 15,278 15,117
Dec. 31 '97 15,169 15,733 15,564
</TABLE>
Chart assumes $10,000 invested January 1, 1992, and includes the effect of a
3.75% sales charge and the reinvestment of all dividends and capital gains.
Performance of other Fund classes will vary due to differing charges and
expenses. Past performance does not guarantee future results.
TAX-FREE FLORIDA INSURED FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH DECEMBER 31, 1997
Lifetime Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 1/1/92)
Excluding Sales Charge +7.90% +7.24% +10.42%
Including Sales Charge +7.21% +6.41% +6.25%
- --------------------------------------------------------------------------------
Class B (Est. 3/11/94)
Excluding Sales Charge +6.33% +9.58%
Including Sales Charge +5.66% +5.58%
- --------------------------------------------------------------------------------
Class C (Est. 9/30/97)
Excluding Sales Charge +4.11%
Including Sales Charge +4.11%
Returns for C Class shares may not be representative of longer term results. See
page 8 for important information regarding all share classes. Return and share
value for each Fund fluctuates so that shares, when redeemed, may be worth more
or less than their original cost. for tax-exempt income
<PAGE>
for tax-exempt
income
10
Tax-Free Florida Intermediate Fund's Performance
Growth of a $10,000 Investment
Total Return May 1, 1994, To December 31, 1997.
<TABLE>
<CAPTION>
Tax-Free Florida Merrill Lynch Three to Seven Lipper Florida Intermediate
<S> <C> <C> <C>
May 1 '94 $ 9,728 $10,000 $10,000
May 31 '94 9,728 10,068 10,000
June 30 '94 9,738 10,073 9,961
July 31 '94 9,744 10,258 10,083
Aug. 31 '94 9,834 10,267 10,125
Sept. 30 '94 9,732 10,184 10,032
Oct. 31 '94 9,625 10,120 9,912
Nov. 30 '94 9,478 10,023 9,748
Dec. 31 '94 9,577 10,115 9,902
Jan. 31 '95 9,776 10,182 10,102
Feb. 28 '95 10,037 10,396 10,347
Mar. 31 '95 10,137 10,459 10,416
Apr. 30 '95 10,188 10,529 10,444
May 31 '95 10,441 10,767 10,691
June 30 '95 10,492 10,778 10,666
July 31 '95 10,574 10,866 10,773
Aug. 31 '95 10,687 10,964 10,868
Sept. 30 '95 10,790 10,962 10,912
Oct. 31 '95 10,873 11,014 11,013
Nov. 30 95 10,977 11,167 11,120
Dec. 31 '95 11,027 11,193 11,191
Jan. 31 '96 11,142 11,324 11,301
Feb. 29 '96 11,099 11,303 11,252
Mar. 31 '96 10,951 11,209 11,101
Apr. 30 '96 10,929 11,207 11,079
May 31 '96 10,960 11,199 11,076
June 30 '96 11,012 11,245 11,133
July 31 '96 11,086 11,352 11,230
Aug. 31 '96 11,128 11,369 11,233
Sept. 30 '96 11,181 11,445 11,315
Oct. 31 '96 11,278 11,550 11,413
Nov. 30 96 11,374 11,684 11,575
Dec. 31 '96 11,395 11,670 11,541
Jan. 31 '97 11,405 11,696 11,552
Feb. 28 '97 11,492 11,778 11,636
Mar. 31 '97 11,425 11,660 11,513
Apr. 30 '97 11,490 11,683 11,566
May 31 '97 11,600 11,822 11,714
June 30 '97 11,694 11,959 11,817
July 31 '97 11,911 12,163 12,070
Aug. 31 '97 11,851 12,086 11,965
Sept. 30 '97 11,970 12,211 12,089
Oct. 31 '97 12,021 12,257 12,146
Nov. 30 '97 12,086 12,304 12,193
Dec. 31 '97 12,205 12,427 12,340
</TABLE>
Chart assumes $10,000 invested May 1, 1994, and includes the effect of a
2.75% sales charge and the reinvestment of all distributions. Performance of
other Fund classes will vary due to differing charges and expenses. Past
performance does not guarantee future results.
TAX-FREE FLORIDA INTERMEDIATE FUND
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH DECEMBER 31, 1997
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 5/1/94)
Excluding Sales Charge +6.41% +7.25%
Including Sales Charge +5.62% +4.34%
- --------------------------------------------------------------------------------
Class B (Est. 9/15/95)
Excluding Sales Charge +4.44% +6.50%
Including Sales Charge +4.02% +4.50%
- --------------------------------------------------------------------------------
Class C (Est. 3/23/95)
Excluding Sales Charge +6.01% +6.43%
Including Sales Charge +6.01% +5.43%
See page 8 for important additional information regarding all share classes.
Return and share value for each Fund fluctuate so that shares, when redeemed,
may be worth more or less than their original cost.
<PAGE>
for tax-exempt
income
11
Tax-Free New York Fund's Performance
Growth of a $10,000 Investment
Total Return December 31, 1987 Through December 31, 1997
<TABLE>
<CAPTION>
Tax-Free New York Lehman Brothers Lipper
<S> <C> <C> <C>
Nov. 6, '87 $ 9,625 $10,000 $10,000
Dec. 31, '97 9,797 10,145 10,210
Dec. 31, '98 10,851 11,175 11,305
Dec. 31, '89 11,867 12,380 12,351
Dec. 31, '90 12,426 13,284 12,979
Dec. 31, '91 13,921 14,897 14,710
Dec. 31, '92 15,306 16,211 16,124
Dec. 31, '93 16,967 18,202 18,186
Dec. 31, '94 16,454 17,261 16,805
Dec. 31, '95 18,319 20,274 19,606
Dec. 31, '96 18,767 21,172 20,220
Dec. 31, '97 20,071 23,118 22,035
</TABLE>
Chart assumes $10,000 invested December 31, 1987, and includes the effect of
a 3.75% sales charge and the reinvestment of all distributions. Performance
of other Fund classes will vary due to differing charges and expenses. Past
performance does not guarantee future results.
TAX-FREE NEW YORK FUND PERFORMANCE
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS THROUGH DECEMBER 31, 1997
Lifetime Ten Years Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 11/6/87)
Excluding Sales Charge +7.52% +7.54% +5.59% +7.09%
Including Sales Charge +7.11% +7.13% +4.79% +3.04%
- --------------------------------------------------------------------------------
Class B (Est. 11/14/94)
Excluding Sales Charge +6.34% +6.39%
Including Sales Charge +5.49% +2.41%
- --------------------------------------------------------------------------------
Class C (Est. 4/26/95)
Excluding Sales Charge +4.83% +6.29%
Including Sales Charge +4.83% +5.29%
See page 8 for important additional information regarding all share classes.
Return and share value for each Fund fluctuate so that shares, when redeemed,
may be worth more or less than their original cost.
<PAGE>
12 for tax-exempt income
Financial Statements
DELAWARE-VOYAGEUR
TAX-FREE FLORIDA FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
Principal Market
Amount Value
----------------------------
MUNICIPAL BONDS - 95.84%
CONTINUING CARE/RETIREMENT REVENUE
BONDS - 10.48%
Jacksonville Health Facilities Authority -
Cypress Village Project National Benevolent
Association - Series A 6.125% 12/1/16 ............. $ 200,000 $ 211,312
Palm Beach Health Facilities Authority - Adult
Community Services Inc. 5.625% 11/15/20 ........... 250,000 258,503
Volusia County Health Facilities Authority, John
Knox Village - Series A 6.00% 6/1/17 .............. 250,000 266,933
Volusia County Industrial Development Authority -
Bishops Glen Project Retirement Health
Facilities 7.50% 11/1/16 .......................... 330,000 345,642
----------
1,082,390
----------
HIGHER EDUCATION REVENUE BONDS - 4.05%
Pinellas County Educational Facilities Authority -
Clearwater Christian College (Private Placement)
8.00% 2/1/11 ...................................... 400,000 418,524
----------
418,524
----------
HOSPITAL REVENUE BONDS - 15.29%
Hillsborough County-Tampa General Hospital
6.375% 10/1/13 (FSA) .............................. 100,000 109,934
Lee County Hospital Board - Lee Memorial Hospital
6.35% 3/26/20 (MBIA) .............................. 500,000 539,804
Leesburg Regional Medical Center Project -
Series A 6.125% 7/1/12 ............................ 100,000 106,914
North Miami Health Facilities Authority-Catholic
Health Services LOC Suntrust Bank-Miami
6.00% 8/15/16 ..................................... 500,000 530,169
Palm Beach County Health Facilities Authority-Good
Samaritan Health System 6.30% 10/1/22 ............. 130,000 139,744
Puerto Rico Industrial Tourist Educational
Medical and Environmental Control
Facilities Mennonite General Hospital
Series A 5.625% 7/1/27 ............................ 150,000 151,811
----------
1,578,376
----------
HOUSING REVENUE BONDS - 17.67%
Blackwater Housing Corporation-Series A
6.50% 6/1/25 ...................................... 250,000 258,068
Dade County Housing Finance Authority, Lincoln
Fields Apartments Section 8-FHA
6.25% 7/1/24 (MBIA) ............................... 500,000 523,544
Duval Housing Finance Authority, St. Augustine
Apartments 6.00% 3/1/21 ........................... 300,000 312,948
<PAGE>
- --------------------------------------------------------------------------------
Principal Market
Amount Value
----------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
Florida Housing Finance Agency-Homeowner
Mortgage-Series 1B 6.00%
7/1/17 (FHA/VA) .................................. $ 195,000 $ 206,252
Florida Housing Finance Agency-The Vineyards
Project-Series H 6.40% 11/1/15 .................... 500,000 523,309
----------
1,824,121
----------
TRANSPORTATION REVENUE BONDS - 11.00%
Florida State Mid-Bay Bridge Authority-Series D
6.125% 10/1/22 ................................... 160,000 165,502
Orlando & Orange County Expressway Authority
5.95% 7/1/23
Refunding, Junior Lien ............................ 250,000 257,168
Puerto Rico Commonwealth Highway &
Transportation Authority (Highway
Improvements) Series Y 5.50% 7/1/26 ............... 700,000 713,398
----------
1,136,068
----------
UTILITY REVENUE BONDS - 1.47%
Puerto Rico Electric Power Authority Series X
5.50% 7/1/25 ..................................... 150,000 152,202
----------
152,202
----------
WASTE DISPOSAL REVENUE BONDS - 5.07%
Jacksonville Sewer & Solid Waste Disposal
Facilities Authority-Anheuser Busch Project
AMT 5.875% 2/1/36 ................................ 150,000 157,014
Polk County Industrial Development Authority
Solid Waste Disposal-Tampa Electric Company
Project AMT 5.85% 12/1/30 ......................... 350,000 366,650
----------
523,664
----------
WATER AND SEWER REVENUE BONDS - 11.79%
Jacksonville Electric Authority Revenue Water &
Sewer Systems-Series A 5.625% 10/1/3 .............. 500,000 510,875
Key West Sewer 5.70% 10/1/26 (FGIC) ............... 100,000 103,399
Miramar Wastewater Improvement
6.75% 10/1/25 (FGIC) ............................. 100,000 113,619
Northern Palm Beach County Improvement
District Special Assessment-Abacoa Water
Control 7.20% 8/1/16 (FGIC) ....................... 300,000 328,290
St Lucie County Special Assessment South
Hutchinson Island (Asset Guaranty)
6.10% 11/1/20 .................................... 150,000 160,623
----------
1,216,806
----------
<PAGE>
for tax-exempt income 13
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS (CONTINUED)
OTHER REVENUE BONDS - 19.01%
Dade County Special Obligation-Series B
5.00% 10/1/35 (AMBAC) ........................... $ 200,000 $ 194,042
Lake Bernadette Community Development District
Special Assessment-Series A 8.00% 5/1/17 .......... 250,000 263,753
Miami-Dade County Special Obligation
Sub-Series B 5.00% 10/1/37 (MBIA) ................. 250,000 242,063
Saint Johns County Industrial Development
Authority Professional Golf Hall of
Fame-A 5.50% 3/1/17 (MBIA) ........................ 500,000 509,604
Tampa Palms Community Development District
Richmond Place Project 7.50% 5/1/18 ............... 250,000 263,550
Village Center Community Development District
Recreational, Refunding - Series A
5.00% 11/1/21 (MBIA) ............................. 500,000 489,735
----------
1,962,747
----------
Total Municipal Bonds (cost of $9,376,526 ) ........ 9,894,898
----------
NUMBER OF
SHARES
---------
SHORT-TERM INVESTMENTS - 7.48%
Dreyfus Municipal Money Market Fund ................ 257,000 257,000
Norwest Advantage Municipal Money Market ........... 515,000 515,000
----------
Total Short-Term Investments (cost of $772,000) .... 772,000
----------
TOTAL MARKET VALUE OF SECURITIES OWNED - 103.32%
(COST OF $10,148,526) ................................... 10,666,898
LIABILITIES NET OF RECEIVABLESANDOTHER ASSETS (3.32%) ..... (343,040)
--------------
NET ASSETS APPLICABLE TO 936,240 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% .................... $ 10,323,858
==============
NET ASSET VALUE - TAX-FREE FLORIDA A CLASS
($7,506,432 / 680,865 SHARES) ............................ $11.02
==============
NET ASSET VALUE - TAX-FREE FLORIDA B CLASS
($2,684,586 / 243,324 SHARES) ............................ $11.03
==============
NET ASSET VALUE - TAX-FREE FLORIDA C CLASS
($132,840 / 12,051 SHARES) ............................... $11.02
==============
- -----------
AMBAC - Insured by the AMBAC Indemnity Corporation
AMT - Alternative Minimum Tax
FGIC - Insured by the Financial Guaranty Insurance Company
FHA - Insured by the Federal Housing Authority
FSA - Insured by Financial Security Assurance
MBIA - Insured by the Municipal Bond Insurance Association
VA - Insured by the Veterans Administration
<PAGE>
- --------------------------------------------------------------------------------
COMPONENTS OF NET ASSETS AT DECEMBER 31, 1997:
Common Stock, $.01 par value, 10,000,000,000 shares authorized
to the Fund with 1,000,000,000 shares allocated to Tax Free
Florida Fund A Class, 1,000,000,000 shares allocated to Tax Free
Florida Fund B Class and 1,000,000,000 shares allocated to Tax
Free Florida Fund C Class ..................................... $ 9,802,738
Undistributed net investment income ............................ 34
Accumulated net realized gain on investments ................... 2,714
Net unrealized appreciation on investments ..................... 518,372
-----------
Total Net Assets ............................................... $10,323,858
===========
NET ASSET VALUE AND OFFERING PRICE FOR VOYAGEUR TAX-FREE
FLORIDA FUND A CLASS
Net asset value per share (A) ................................. $11.02
Sales charge (3.75% of offering price or 3.90% of
amount invested per share) (B) ................................ 0.43
-----------
Offering price ................................................. $11.45
===========
- -----------
(A) Net asset value per share illustrated is the estimated amount which would
be paid upon the redemption or repurchase of shares.
(B) See Purchasing Shares in the current Prospectus for purchases of $100,000
or more for Voyageur Tax Free Florida Fund Class A.
See accompanying notes
DELAWARE-VOYAGEUR
TAX-FREE FLORIDA INSURED FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS - 99.77%
Certificates of Participation - 7.18%
Brevard County School Board 5.50% 7/1/21
(AMBAC) ........................................ $ 4,000,000 $ 4,131,920
Orange County School Board - Series A 5.375%
8/1/22 (MBIA) .................................. 5,500,000 5,590,693
Manatee County School Board 6.125% 7/1/16
(MBIA) ......................................... 2,000,000 2,203,760
-----------
11,926,373
-----------
GENERAL OBLIGATION BONDS - 3.56%
Florida Board of Education 6.10% 6/1/24 (FSA) .... 5,500,000 5,911,840
-----------
5,911,840
-----------
HOSPITAL REVENUE BONDS - 20.36%
Alachua County Health Facilities Shands Teaching
Hospital- Series A 5.80% 12/1/26 (MBIA) ......... 5,000,000 5,324,100
Hillsborough County-Tampa General Hospital
6.375% 10/1/13 (FSA) ........................... 3,600,000 3,957,624
<PAGE>
14 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS (CONTINUED)
HOSPITAL REVENUE BONDS (CONTINUED)
Indian River County Hospital District
6.10% 10/1/18 (FSA) ............................ $ 3,000,000 $ 3,315,750
Jacksonville Florida Health Facility Authority
Hospital Revenue Charity Obligation Group -
Series A 5.125% 8/15/27 ........................ 6,250,000 6,188,500
Lee County Hospital Board - Lee Memorial Hospital
6.35% 3/26/20 (MBIA) ........................... 10,000,000 10,796,100
North Broward Hospital District 5.375%
1/15/24 (MBIA) ................................. 1,500,000 1,524,300
Tallahassee Health Facilities - Tallahassee
Memorial Regional Medical Center
Series B 6.00% 12/1/15 (MBIA) ................... 2,500,000 2,691,925
-----------
33,798,299
-----------
HOUSING REVENUE BONDS - 18.21%
Florida Housing Finance Agency Riverfront
Apartments Section 8-Series A AMT
6.25% 4/1/37 (AMBAC) ........................... 1,000,000 1,062,130
Florida Housing Finance Agency Mariner Club
Apartments-Series K-1 AMT 6.25% 9/1/26
(AMBAC) ........................................ 2,000,000 2,152,960
Florida Housing Finance Agency Mariner Club
Apartments-Series K-1 AMT 6.375% 9/1/36
(AMBAC) ........................................ 3,500,000 3,776,325
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) .......................... 750,000 789,630
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% 12/1/361,790,0001,891,600
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 .................... 700,000 740,040
Florida State Housing Finance Agency Landings at
Sea Forst Apartments FHA-Series T AMT Letter
of Credit First National Bank of North Carolina
5.85% 12/1/18 (AMBAC) .......................... 500,000 522,520
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 1,079,110
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 1,611,915
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 7,052,409
<PAGE>
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS (CONTINUED)
HOUSING REVENUE BONDS (CONTINUED)
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 $ 1,849,593
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 2,121,640
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 2,930,651
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 2,127,520
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) ................... 500,000 539,435
-----------
30,247,478
-----------
INVERSE FLOATERS - 7.84%
Florida State Turnpike Authority, Inverse Floating
Certificate 6.67% 7/1/12 (FGIC) ................. 5,000,000 5,187,300
Orlando & Orange County Expressway, Inverse
Floating Certificate 5.87% 7/1/12 (AMBAC) ....... 1,500,000 1,576,050
Palm Beach County School Board, Inverse Floating
Certificate 6.92% 8/1/15 (AMBAC) ................ 5,875,000 6,252,058
-----------
13,015,408
-----------
TRANSPORTATION REVENUE BONDS - 3.18%
Canaveral Port Authority 6.00% 6/1/12 (FGIC) ..... 1,000,000 1,072,780
Florida State Turnpike Authority 6.30%
7/1/12 (FGIC) .................................. 2,000,000 2,186,680
Florida Ports Financing Commission State
Transportation Trust Fund-AMT 5.375%
6/1/27 (MBIA) .................................. 2,000,000 2,012,600
-----------
5,272,060
-----------
WATER AND SEWER REVENUE BONDS - 11.35%
Callaway/ Bay County Wastewater System-
Series A 6.00% 9/1/26 (FGIC)1,000,0001,101,090
Coral Springs Water and Sewer-Series A 6.00%
9/1/10 (FGIC) .................................. 1,000,000 1,072,410
Jupiter Water-Series A 6.25% 10/1/12 (AMBAC) ..... 2,000,000 2,167,240
Lee County IDA Bonita Springs Utilities Project
AMT 5.75% 11/1/10 (MBIA) ........................ 1,480,000 1,584,148
Lee County IDA Bonita Springs Utilities Project
AMT 5.80% 11/1/11 (MBIA) ........................ 1,325,000 1,425,528
Miramar Wastewater Improvement 6.75%
10/1/25 (FGIC) ................................. 2,425,000 2,755,261
<PAGE>
for tax-exempt income 15
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS (CONTINUED)
WATER AND SEWER REVENUE BONDS (CONTINUED)
North Port Utilities System 6.15% 10/1/09
(FGIC) ......................................... $ 1,500,000 $ 1,633,380
North Port Utilities System 6.25% 10/1/22
(FGIC) ......................................... 5,000,000 5,443,350
Titusville Water & Sewer 6.20% 10/1/14
(MBIA) ......................................... 1,500,000 1,661,460
-----------
18,843,867
-----------
UTILITY REVENUE BONDS - 7.81%
Lakeland Electric and Water Junior Subordinate
Lien 6.00% 10/1/14 (FGIC) ....................... 1,000,000 1,138,120
New Smyrna Beach Utilities Commission
6.00% 10/1/13 (FGIC) ........................... 1,000,000 1,079,460
Port St Lucie Utility System 6.00% 9/1/24
(FGIC) ......................................... 5,000,000 5,486,900
Sunrise Utility System Series A 5.75% 10/1/26
(AMBAC) ........................................ 5,000,000 5,266,100
-----------
12,970,580
-----------
OTHER REVENUE BONDS - 20.28%
Collier County Capital Improvement Sales Tax
5.75% 10/1/13 (FGIC) ........................... 1,000,000 1,050,520
Collier County Capital Improvement Sales Tax
5.75% 10/1/10 (MBIA) ........................... 2,000,000 2,142,960
Coral Springs Franchise 6.10% 9/1/13
(AMBAC) ........................................ 1,340,000 1,447,227
Dade County Special ObligaTion-Series B 5.00%
10/1/35 (AMBAC) ................................ 4,000,000 3,880,840
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 10,720,200
Jupiter Sales Tax 6.375% 9/1/20 (AMBAC) .......... 2,500,000 2,723,350
Marion County Public Improvement Sales Tax
6.125% 12/1/08 (MBIA) .......................... 1,000,000 1,083,320
Miami-Dade County Florida Special Obligation
Sub-Series B 5.00% 10/1/37 ...................... 1,750,000 1,694,438
Nassau County Optional Gas Tax-Fuel Sales Tax
6.00% 3/1/09 (FGIC) ............................ 1,000,000 1,073,190
Ocala Optional Gas Tax-Fuel Sales Tax 6.00%
12/1/09 (AMBAC) ................................ 1,000,000 1,077,230
Osceola County Celebration Community
Development District Assessment 6.10%
5/1/16 (MBIA) .................................. 1,000,000 1,077,470
Osceola County Enterprise Community Development
District-Special Assessment 6.10% 5/1/16
(MBIA) ......................................... 1,000,000 1,083,720
<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 $ 1,093,400
Palm Beach Solid Waste Authority 6.25%
12/1/08 (MBIA) ............................. 2,000,000 2,204,980
Pembroke Pines Capital Improvement 5.95%
10/1/20 (AMBAC) ............................ 1,225,000 1,311,816
------------
33,664,661
------------
Total Municipal Bonds (cost $152,324,208) .... 165,650,566
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 99.77%
(COST $152,324,208) ........................................ 165,650,566
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - .23% ....... 389,590
------------
NET ASSETS APPLICABLE TO 14,774,753 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ...................... $166,040,156
============
NET ASSET VALUE - TAX-FREE FLORIDA INSURED FUND A CLASS
($162,096,670/14,423,737 SHARES) ........................... $ 11.24
============
NET ASSET VALUE - TAX-FREE FLORIDA INSURED FUND B CLASS
($3,943,486 / 351,016 SHARES) .............................. $ 11.23
============
- -----------
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 DECEMBER 31, 1997:
Common stock, $.01 par value, unlimited shares authorized
to the Tax-Free Florida Insured Fund ....................... $ 164,119,696
Accumulated net realized loss on investments ................ (11,405,898)
Net unrealized appreciation on investments .................. 13,326,358
-------------
Total net assets ............................................ $ 166,040,156
=============
NET ASSET VALUE AND OFFERING PRICE FOR TAX-FREE FLORIDA
INSURED FUND A CLASS
Net asset value per share (A) .............................. $11.24
Sales charge (3.75% of offering price or 3.91% of
amount invested per share) (B) ............................. 0.44
-------------
Offering price .............................................. $11.68
=============
- -----------
(A) Net asset value per share illustrated is the estimated amount which would
be paid upon the redemption or repurchase of shares.
(B) See Purchasing Shares in the current Prospectus for purchases of $100,000
or more for Tax Free Florida Insured Fund Class A.
See accompanying notes
<PAGE>
16 for tax-exempt income
DELAWARE-VOYAGEUR TAX-FREE
FLORIDA INTERMEDIATE FUND
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS - 98.73%
CERTIFICATES OF PARTICIPATION - 5.51%
Volusia County School Board 10.00% 8/1/00 (FSA) ...... $200,000 $228,382
--------
228,382
--------
CONTINUING CARE/RETIREMENT REVENUE
BONDS - 16.15%
Jacksonville Health Facilities Authority, National
Benevolent Association Cypress Village Project -
Series A 6.00% 12/1/09 ............................. 100,000 107,018
Palm Beach County Florida
Health Facilities Authority Waterford Project
5.30% 10/1/07 ...................................... 300,000 302,559
Sarasota Health Facilities Authority-Sunnyside
Properties 6.00% 5/15/10 ............................ 200,000 208,764
Sarasota Health Facility Authority Sunnyside
Properties 5.50% 5/15/01 ............................. 50,000 51,320
--------
669,661
--------
ESCROWED TO MATURITY - 5.80%
Pasco County School Board Series A 6.10%
8/1/01 (FSA) ....................................... 175,000 186,505
Leon County Capital Improvement 5.75%
10/1/03 (MBIA) ..................................... 50,000 53,779
--------
240,284
--------
GENERAL OBLIGATION BONDS - 1.26%
Puerto Rico Commonwealth 5.10% 7/1/02 ................ 50,000 52,071
--------
52,071
--------
HIGHER EDUCATION REVENUE BONDS - 5.05%
Pinellas County Educational Facilities Authority-
Clearwater Christian College Private Placement
8.00% 2/1/11 ....................................... 200,000 209,262
--------
209,262
--------
HOSPITAL REVENUE BONDS - 3.81%
Martin County Health Facilities Authority-Memorial
Medical Center-Series B 5.25% 11/15/07
(MBIA) ............................................. 150,000 158,135
--------
158,135
--------
HOUSING REVENUE BONDS - 8.85%
Clearwater, Florida Housing Authority Revenue-
Affordable Housing Acquired Progress 4.95%
6/1/07 ............................................. 150,000 154,310
Florida Housing Finance Authority Homeowners
Mortgage-Series 3 AMT 5.80% 1/1/10
(FHA/VA) ........................................... 200,000 212,874
--------
367,184
--------
<PAGE>
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED BONDS - 14.52%
Florida State Board of Education Capital Outlay
Series A 4.44% 6/1/12-00 .......................... $ 50,000 $ 19,804
Orange County Tourist Development 7.25%
10/1/06-00 (AMBAC) ................................ 160,000 176,206
Port St. Lucie Storm Water 7.40% 11/1/06-00
(MBIA) ............................................ 160,000 174,355
Sunrise Utilities System 10.25% 10/1/13-00
(AMBAC) ........................................... 200,000 231,786
----------
602,151
----------
TRANSPORTATION REVENUE BONDS - 18.26%
Dunes Community Development District-Intracoastal
Waterway Bridge (Guarantor:ITT Industries
Corporation) 5.50% 10/1/07 ........................ 175,000 182,021
Hillsborough County Port District-Tampa Port
Authority-Series A 5.10% 6/1/03 (FSA)175,000183,052
Jacksonville Port Authority 7.625% 11/1/02
(MBIA) ............................................ 160,000 184,349
Port Palm Beach District-Series B AMT 5.40%
9/1/10 (MBIA) ..................................... 200,000 207,760
----------
757,182
----------
UTILITY REVENUE BONDS - 2.54%
Puerto Rico Electric Power Authority-Series O 6.80%
7/1/00 ............................................ 100,000 105,384
----------
105,384
----------
WASTE DISPOSAL REVENUE BONDS - 4.95%
Dade County Solid Waste Special Obligation
5.125% 10/1/10 (AMBAC) ............................ 200,000 205,402
----------
205,402
----------
WATER AND SEWER REVENUE BONDS - 7.03%
Kissimmee Suburban Water and Sewer System
5.80% 10/1/02 (AMBAC) ............................. 175,000 185,745
St. Lucie County Special Assessment-South
Hutchinson Island (Asset Guaranty) 5.60%
11/1/09 ........................................... 100,000 105,956
----------
291,701
----------
OTHER REVENUE BONDS - 5.00%
Jacksonville Excise Tax - Series B AMT 5.50%
10/1/07 (FGIC) .................................... 200,000 207,295
----------
207,295
----------
Total Municipal Bonds (cost $3,934,407) ............ 4,094,094
----------
<PAGE>
for tax-exempt income 17
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 98.73%
(COST $3,934,407) ........................................... $4,094,094
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 1.27% ....... 52,595
------------
NET ASSETS APPLICABLE TO 390,286 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ....................... $4,146,689
============
NET ASSET VALUE - TAX-FREE FLORIDA INTERMEDIATE FUND A CLASS
($3,163,351 / 297,730 SHARES) ............................... $10.62
============
NET ASSET VALUE - TAX-FREE FLORIDA INTERMEDIATE FUND B CLASS
($928,013 / 87,347 SHARES) .................................. $10.62
============
NET ASSET VALUE - TAX-FREE FLORIDA INTERMEDIATE FUND C CLASS
($55,325 / 5,209 SHARES) .................................... $10.62
============
- -----------
* 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
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 DECEMBER 31, 1997:
Common stock, $.01 par value, unlimited shares authorized
to the Tax-Free Florida Intermediate Fund $3,987,099
Accumulated net realized loss on investments ................. (97)
Net unrealized appreciation on investments ................... 159,687
-------------
Total net assets ............................................. $4,146,689
=============
NET ASSET VALUE AND OFFERING PRICE FOR TAX-FREE FLORIDA
INTERMEDIATE FUND A CLASS
Net asset value per share (A) ............................... $10.62
Sales charge (2.75% of offering price or 2.82% of
amount invested per share) (B) ............................. 0.30
-------------
Offering price ............................................... $10.92
=============
- -----------
(A) Net asset value per share illustrated is the estimated amount which would
be paid upon the redemption or repurchase of shares.
(B) See Purchasing Shares in the current Prospectus for purchases of $100,000
or more for Tax Free Florida Intermediate Fund Class A.
See accompanying notes
<PAGE>
DELAWARE-VOYAGEUR
TAX-FREE NEW YORK
STATEMENT OF NET ASSETS
DECEMBER 31, 1997
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS - 101.47%
HIGHER EDUCATION - 9.72%
New York State Dorm Authority Revenues
Chapel Oaks 5.45% 7/1/26 ........................... $ 450,000 $ 449,995
New York State University Dorm Authority Revenue
State University 7.50% 5/15/11 ..................... 400,000 501,484
----------
951,479
----------
HOSPITAL REVENUE BOND - 10.54%
New York State Dormitory Authority Revenue -
Millard Fillmore Hospital-5.375% 2/1/32
FHA (AMBAC) ....................................... 450,000 453,645
New York State Medical Care Facility Finance
Agency Revenue-Mental Health 7.70%
2/15/18 ........................................... 305,000 312,268
New York State University Dormitory Authority
Revenue-Mental Health 5.90% 2/15/12 ................ 250,000 265,695
----------
1,031,608
----------
HOUSING REVENUE BONDS - 15.42%
New York State University Dorm Authority
Revenue Pooled Capital Program 7.80%
12/1/05 (FGIC) .................................... 641,000 671,018
New York State University Dorm Authority Revenue
City University 8.125% 7/1/07 ...................... 400,000 416,400
New York State Mortgage Agency Revenue
Homeowner Series BB2 7.85% 10/1/08
(FHA) ............................................. 410,000 421,218
----------
1,508,636
----------
INDUSTRIAL DEVELOPMENT REVENUE BONDS - 14.96%
New York City Industrial Development Agency
Brooklyn Navy Yard Cogen Partners 5.75%
10/1/36 ........................................... 450,000 453,186
New York State Thruway Authority Service
Contract Revenue-Local Highway & Bridge
6.25% 4/1/14 ...................................... 500,000 541,645
New York City Industrial Development
Agency-Northwest Airlines Inc.-AMT 6.00%
6/1/27 ............................................ 450,000 469,620
----------
1,464,451
----------
*PRE-REFUNDED BONDS - 32.20%
Babylon Industrial Development Agency Resource
Recovery (Ogden Martin) Series B 8.10%
1/1/00-98 ......................................... 290,000 304,706
Babylon Industrial Development Agency Resource
Recovery (Odgen Martin) Series C 8.50%
1/1/19-98 ......................................... 405,000 426,311
Municipal Assistance Corporation For the City of
New York 7.625% 7/1/08-99 .......................... 250,000 267,660
New York City GO-Series F 8.25% 11/15/17-01 ......... 690,000 800,021
<PAGE>
18 for tax-exempt income
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
----------------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED BONDS (CONTINUED)
New York State Local Government Assistance
Corporation-Series B 7.50% 4/1/20-01 ............... $ 600,000 $ 672,678
New York State Urban Development Corporation
Revenue-Correctional Facilities 7.375%
1/1/18-02 ......................................... 600,000 679,410
----------
3,150,786
----------
TERRITORIAL REVENUE BONDS - 2.04%
Puerto Rico Public Buildings Authority Revenue
Guaranteed Government Facilities-Series B
5.25% 7/1/21 ...................................... 200,000 199,194
----------
199,194
----------
TRANSPORTATION REVENUE BONDS - 9.51%
Metropolitan Transportation Authority New York
Service Contract-Commuter Facilities-Series 0
5.75% 7/1/13 ...................................... 400,000 432,968
Puerto Rico Commonwealth Highway &
Transportation Authority Highway Revenue-
Series Y 5.50% 7/1/36 ............................. 475,000 498,147
----------
931,115
----------
WATER AND SEWER REVENUE BONDS - 4.83%
New York City Water Finance-97B 5.75% 6/15/29 ....... 450,000 472,320
----------
472,320
----------
OTHER REVENUE BONDS - 2.25%
United Nations Development Corporation Senior Lien
Series A 6.00% 7/1/12 ............................. 200,000 220,140
----------
220,140
----------
Total Municipal Bonds (cost $9,216,788) ............. 9,929,729
----------
NUMBER OF
SHARES
---------
SHORT-TERM INVESTMENTS - 1.55%
Norwest Advantage Municipal Money Market ............ 152,000 152,000
----------
Total Short-Term Investments (cost $152,000) ........ 152,000
----------
<PAGE>
TOTAL MARKET VALUE OF SECURITIES OWNED - 103.02%
(COST $9,368,788) ......................................... $10,081,729
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (3.02%) ... (295,854)
--------------
NET ASSETS APPLICABLE TO 920,057 SHARES
($.01 PAR VALUE) OUTSTANDING - 100.00% ..................... $ 9,785,875
==============
NET ASSET VALUE - TAX-FREE NEW YORK FUND A CLASS
($9,562,517 / 899,010 SHARES) ............................. $10.64
==============
NET ASSET VALUE - TAX-FREE NEW YORK FUND B CLASS
($167,303 / 15,765 SHARES) ................................ $10.61
==============
NET ASSET VALUE - TAX-FREE NEW YORK FUND C CLASS
($56,055 / 5,282 SHARES) .................................. $10.61
==============
- -----------
* 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 DECEMBER 31, 1997:
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 B Class, and 10,000,000,000
shares allocated to Tax-Free New York Fund C Class .............. $9,066,043
Accumulated net realized gain on investments ..................... 6,891
Net unrealized appreciation on investments ....................... 712,941
----------
Total net assets ................................................. $9,785,875
==========
NET ASSET VALUE AND OFFERING PRICE FOR TAX-FREE
NEW YORK FUND A CLASS
Net asset value per share (A) ................................... $10.64
Sales charge (3.75% of offering price or 3.85% of
amount invested per share) (B) .................................. 0.41
----------
Offering price ................................................... $11.05
==========
(A) Net asset value per share illustrated is the estimated amount which would
be paid upon the redemption or repurchase of shares.
(B) See Purchasing 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 19
DELAWARE-VOYAGEUR FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Tax-Free Tax-Free Tax-Free Tax-Free
Florida Florida Florida New York
Fund Insured Fund Intermediate Fund Fund
--------- ------------ ----------------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ....................................................... $486,852 $10,294,492 $208,944 $656,851
-------- ----------- -------- --------
EXPENSES:
Management fees ................................................ 39,943 876,745 15,931 47,095
Distribution expense ........................................... 31,463 209,208 13,898 26,611
Dividend disbursing and transfer agent fees and expenses ....... 10,902 167,231 8,976 17,278
Registration fees .............................................. 1,480 13,539 4,082 10,422
Reports and statements to shareholders ......................... 8,289 56,077 519 10,793
Accounting and administration .................................. 2,692 64,529 1,492 3,668
Custodian fees ................................................. 5,132 42,243 1,651 2,422
Professional fees .............................................. 13 20,890 7,672 19,633
Taxes (other than taxes on income) ............................ -- 15,533 200 660
Directors' fees ................................................ 585 4,580 3,729 587
Amortization of organization expenses .......................... -- -- 4,607 --
Other .......................................................... -- 55,468 2,675 --
-------- ----------- -------- --------
100,499 1,526,043 65,432 139,169
Less expenses waived or absorbed ............................... (43,990) (109,770) (28,667) (38,649)
-------- ----------- -------- --------
Total net expenses ............................................. 56,509 1,416,273 36,765 100,520
-------- ----------- -------- --------
NET INVESTMENT INCOME ......................................... 430,343 8,878,219 172,179 556,331
-------- ----------- -------- --------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments ............................ 28,365 2,172,843 6,838 187,711
Net change in unrealized appreciation/depreciation .......... 380,127 5,978,357 94,815 (71,772)
-------- ----------- -------- --------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS ............... 408,492 8,151,200 101,653 115,939
-------- ----------- -------- --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .......... $838,835 $17,029,419 $273,832 $672,270
======== =========== ======== ========
</TABLE>
See accompanying notes
<PAGE>
20 for tax-exempt income
DELAWARE-VOYAGEUR FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Tax-Free Tax-Free Florida
Florida Fund Insured Fund
---------------------- ------------------------
Year Year Year Year
Ended Ended Ended Ended
12/31/97 12/31/96 12/31/97 12/31/96
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ................................................ $ 430,343 $ 334,925 $ 8,878,219 $ 10,796,875
Net realized gain (loss) on investments .............................. 28,365 (8,936) 2,172,843 (735,445)
Net change in unrealized appreciation/depreciation ................... 380,127 (77,041) 5,978,357 (4,859,101)
----------- ---------- ------------ ------------
Net increase in net assets resulting from operations ................. 838,835 248,948 17,029,419 5,202,329
----------- ---------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class ............................................................ (330,131) (284,033) (8,815,981) (10,629,841)
B Class ............................................................ (100,213) (47,151) (165,230) (135,565)
C Class ............................................................ (3,278) (466) (200) --
----------- ---------- ------------ ------------
(433,622) (331,650) (8,981,411) (10,765,406)
----------- ---------- ------------ ------------
Net realized gain from security transactions:
A Class ............................................................ (11,878) -- -- --
B Class ............................................................ (4,598) -- -- --
C Class ............................................................ (239) -- -- --
----------- ---------- ------------ ------------
(16,715) -- -- --
----------- ---------- ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ............................................................ 2,855,133 2,129,354 4,527,089 6,904,605
B Class ............................................................ 1,142,910 1,541,795 820,580 741,141
C Class ............................................................ 110,984 15,000 21,663 --
Net asset value of shares issued in
connection with the acquisition of
Mackenzie Florida Limited Term Fund
(note 5):
A Class ............................................................ N/A N/A N/A N/A
B Class ............................................................ N/A N/A N/A N/A
Net asset value of shares issued upon
reinvestment of dividends from
net investment income and net
realized gain on security transactions:
A Class ............................................................ 109,685 91,414 2,516,492 2,820,822
B Class ............................................................ 18,887 6,313 49,154 40,001
C Class ............................................................ 2,636 121 126 --
----------- ---------- ------------ ------------
4,240,235 3,783,997 7,935,104 10,506,469
----------- ---------- ------------ ------------
Cost of shares repurchased:
A Class ............................................................ (1,502,655) (781,790) (44,980,021) (54,474,488)
B Class ............................................................ (213,644) (30,651) (333,793) (315,311)
C Class ............................................................ -- (8,392) (22,065) --
----------- ---------- ------------ ------------
(1,716,299) (820,833) (45,335,879) (54,789,799)
----------- ---------- ------------ ------------
Increase (decrease) in net assets derived
from capital share transactions ..................................... 2,523,936 2,963,164 (37,400,775) (44,283,330)
----------- ---------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS: ............................... 2,912,434 2,880,462 (29,352,767) (49,846,407)
NET ASSETS:
Beginning of period .................................................. 7,411,424 4,530,962 195,392,923 245,239,330
----------- ---------- ------------ ------------
End of period ........................................................ $10,323,858 $7,411,424 $166,040,156 $195,392,923
=========== ========== ============ ============
</TABLE>
See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
Tax-Free Florida Tax-Free
Intermediate Fund New York Fund
---------------------- ---------------------------------
Year Year Year Three Months Year
Ended Ended Ended Ended Ended
12/31/97 12/31/96 12/31/97 12/31/96 9/30/96
<S> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income ........................................ $ 172,179 $ 126,866 $ 556,331 $ 142,633 $ 623,153
Net realized gain (loss) on investments ...................... 6,838 1,691 187,711 11,285 13,314
Net change in unrealized appreciation/depreciation ........... 94,815 6,281 (71,772) (6,168) (164,569)
---------- ---------- ---------- ----------- -----------
Net increase in net assets resulting from operations ......... 273,832 134,838 672,270 147,750 471,898
---------- ---------- ---------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class .................................................... (150,385) (95,504) (548,002) (139,837) (601,484)
B Class .................................................... (39,036) (23,847) (8,649) (3,811) (13,195)
C Class .................................................... (2,258) (1,931) (2,665) (606) (2,249)
---------- ---------- ---------- ----------- -----------
(191,679) (121,282) (559,316) (144,254) (616,928)
---------- ---------- ---------- ----------- -----------
Net realized gain from security transactions:
A Class .................................................... (6,599) -- (154,974) (37,358) (16,591)
B Class .................................................... (1,912) -- (2,715) (921) (396)
C Class .................................................... (115) -- (902) (191) (73)
---------- ---------- ---------- ----------- -----------
(8,626) -- (158,591) (38,470) (17,060)
---------- ---------- ---------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class .................................................... 642,850 356,093 657,442 12,100 252,630
B Class .................................................... 8,000 7,000 72,748 69,592 175,631
C Class .................................................... -- -- -- -- --
Net asset value of shares issued in
connection with the acquisition of
Mackenzie Florida Limited Term Fund
(note 5):
A Class .................................................... N/A 2,301,714 N/A N/A N/A
B Class .................................................... N/A 1,307,968 N/A N/A N/A
Net asset value of shares issued upon
reinvestment of dividends from
net investment income and net
realized gain on security transactions:
A Class .................................................... 93,842 47,740 574,581 103,103 482,791
B Class .................................................... 21,850 8,990 10,758 3,436 10,597
C Class .................................................... -- 1,316 3,708 591 2,322
---------- ---------- ---------- ----------- -----------
766,542 4,030,821 1,319,237 188,822 923,971
---------- ---------- ---------- ----------- -----------
Cost of shares repurchased:
A Class .................................................... (787,624) (412,762) (1,671,287) (584,980) (1,960,805)
B Class .................................................... (160,999) (330,086) (167,603) (266,224) --
C Class .................................................... -- -- (236) (76) --
---------- ---------- ---------- ----------- -----------
(948,623) (742,848) (1,839,126) (851,280) (1,960,805)
---------- ---------- ---------- ----------- -----------
Increase (decrease) in net assets derived
from capital share transactions ............................. (182,081) 3,287,973 (519,889) (662,458) (1,036,834)
---------- ---------- ---------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS: ....................... (108,554) 3,301,529 (565,526) (697,432) (1,198,924)
NET ASSETS:
Beginning of period .......................................... 4,255,243 953,714 10,351,401 11,048,833 12,247,757
---------- ---------- ---------- ----------- -----------
End of period ................................................ $4,146,689 $4,255,243 $9,785,875 $10,351,401 $11,048,833
========== ========== ========== =========== ===========
</TABLE>
See accompanying notes
<PAGE>
for tax-exempt income 21
DELAWARE-VOYAGEUR FUNDS
FINANCIAL HIGHLIGHTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were as follows:
Tax-Free Florida Fund - Class A
---------------------------------------------------
Year Year Period from
ended ended 3/2/95(1)
12/31/97(4) 12/31/96 to 12/31/95
<S> <C> <C> <C>
Net asset value, beginning of period ........................................... $10.520 $10.730 $10.000
Income from investment operations:
Net investment income ........................................................ 0.591 0.590 0.470
Net realized and unrealized gain (loss) from investments ..................... 0.523 (0.210) 0.750
------- ------- -------
Total from investment operations ............................................. 1.114 0.380 1.220
------- ------- -------
Less dividends and distributions:
Dividends from net investment income ........................................ (0.594) (0.590) (0.470)
Distributions from net realized gain on investments ......................... (0.020) -- (0.020)
------- ------- -------
Total dividends and distributions ........................................... (0.614) (0.590) (0.490)
------- ------- -------
Net asset value, end of period ................................................. $11.020 $10.520 $10.730
======= ======= =======
Total return(2) ............................................................... 10.93% 3.74% 12.49%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................................... $ 7,506 $ 5,761 $ 4,421
Ratio of expenses to average net assets ..................................... 0.56% 0.33% 0.32%(3)
Ratio of expenses to average net assets prior to expense limitation ......... 1.11% 1.25% 1.25%(3)
Ratio of net investment income to average net assets ........................ 5.53% 5.66% 5.26%(3)
Ratio of net investment income to average net assets
prior to expense limitation ................................................ 4.98% 4.74% 4.33%(3)
Portfolio turnover .......................................................... 19% 70% 64%
</TABLE>
___________________
(1) Commencement of operations.
(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) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
22 for tax-exempt income
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
Tax-Free Florida Fund - Class B
---------------------------------------
Year Year Period from
ended ended 9/15/95(1) to
12/31/97(4) 12/31/96 12/31/95
<S> <C> <C> <C>
Net asset value, beginning of period ............................................. $10.530 $10.730 $10.370
Income from investment operations:
Net investment income .......................................................... 0.527 0.560 0.150
Net realized and unrealized gain (loss) from investments ....................... 0.531 (0.200) 0.380
------- ------- -------
Total from investment operations ............................................... 1.058 0.360 0.530
------- ------- -------
Less dividends and distributions:
Dividends from net investment income ........................................... (0.538) (0.560) (0.150)
Distributions from net realized gain on investments............................. (0.020) -- (0.020)
------- ------- -------
Total dividends and distributions .............................................. (0.558) (0.560) (0.170
------- ------- -------
Net asset value, end of period ................................................. $11.030 $10.530 $10.730
======= ======= =======
Total return(2) .................................................................. 10.35% 3.51% 5.10%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........................................ $2,685 $1,635 $101
Ratio of expenses to average net assets ........................................ 1.10% 0.76% 0.44%(3)
Ratio of expenses to average net assets prior to expense limitation ............ 1.65% 2.00% 2.00%(3)
Ratio of net investment income to average net assets ........................... 4.99% 5.23% 4.88%(3)
Ratio of net investment income to average net assets prior to expense limitation 4.44% 3.99% 3.32%(3)
Portfolio turnover ......................................................... 19% 70% 64%
</TABLE>
___________________
(1) Commencement of operations.
(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) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
<CAPTION>
Tax-Free Florida Fund - Class C
------------------------------------
Year Year Period from
ended ended 4/22/95(1) to
12/31/97(4) 12/31/96 12/31/95
<S> <C> <C> <C>
Net asset value, beginning of period ............................................. $10.520 $10.730 $10.200
Income from investment operations:
Net investment income .......................................................... 0.511 0.370 0.330
Net realized and unrealized gain (loss) from investments ....................... 0.521 (0.210) 0.560
------- ------- -------
Total from investment operations ............................................... 1.032 0.160 0.890
------- ------- -------
Less dividends and distributions:
Dividends from net investment income ........................................... (0.512) (0.370) (0.340)
Distributions from net realized gain on investments............................. (0.020) -- (0.020)
------- ------- -------
Total dividends and distributions .............................................. (0.532) (0.370) (0.360)
Net asset value, end of period ................................................. $11.020 $10.520 $10.730
======= ======= =======
Total return(2) .................................................................. 10.09% 2.97% 8.88%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ........................................ $133 $16 $9
Ratio of expenses to average net assets ........................................ 1.31% 1.15% 1.11%(3)
Ratio of expenses to average net assets prior to expense limitation ............ 1.86% 2.00% 2.00%(3)
Ratio of net investment income to average net assets ........................... 4.78% 4.83% 4.57%(3)
Ratio of net investment income to average net assets prior to expense limitation 4.23% 3.98% 3.68%(3)
Portfolio turnover ......................................................... 19% 70% 64%
</TABLE>
- ----------
(1) Commencement of operations.
(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) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 23
<TABLE>
Financial Highlights (Continued)
Selected data for each share of the Fund outstanding throughout each
period were as follows:
<CAPTION>
Tax-Free Florida Insured Fund - Class A
-----------------------------------------
Year Year Year
ended ended ended
12/31/97(3) 12/31/96 12/31/95
<S> <C> <C> <C>
Net asset value, beginning of period................................. $10.710 $10.940 $9.520
Income from investment operations:
Net investment income............................................ 0.548 0.530 0.540
Net realized and unrealized gain (loss) from investments......... 0.536 (0.230) 1.440
------- ------ -------
Total from investment operations ................................ 1.084 0.300 1.980
------- ------ -------
Less dividends and distributions:
Dividends from net investment income............................. (0.554) (0.530) (0.560)
Distributions from net realized gain on investments ............. -- -- --
Total dividends and distributions................................ (0.554) (0.530) (0.560)
------- ------- -------
Net asset value, end of period....................................... $11.240 $10.710 $10.940
======= ======= =======
Total return(1)........................................................ 10.42% 2.90% 21.22%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ......................... $162,097 $192,171 $242,425
Ratio of expenses to average net assets.......................... 0.79% 0.73% 0.51%
Ratio of expenses to average net assets prior to expense
limitation................................................... 0.85% 0.96% 0.95%
Ratio of net investment income to average net assets ............ 5.07% 5.02% 5.24%
Ratio of net investment income to average net assets prior to
expense limitation........................................... 5.01% 4.79% 4.80%
Portfolio turnover............................................... 15% 57% 101%
</TABLE>
- ----------
(1) Commencement of operations.
(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) Annualized.
See accompanying notes
<PAGE>
[RESTUBBED FROM TABLE ABOVE]
<TABLE>
Tax-Free Florida Insured Fund - Class A
-----------------------------------------
Two months Year Year
ended ended ended
12/31/94 10/31/94 10/31/93
<S> <C> <C> <C>
Net asset value, beginning of period................................. $9.640 $11.150 $10.110
Income from investment operations:
Net investment income............................................ 0.100 0.550 0.580
Net realized and unrealized gain (loss) from investments......... (0.120) (1.460) 1.120
------ ------- ------
Total from investment operations ................................ (0.020) (0.910) 1.700
------ ------- ------
Less dividends and distributions:
Dividends from net investment income............................. (0.090) (0.540) (0.580)
Distributions from net realized gain on investments ............. (0.10) (0.060) (0.080)
Total dividends and distributions................................ ------ ------- ------
(0.100) (0.600) (0.660)
Net asset value, end of period....................................... ------ ------- ------
$9.520 $9.640 $11.150
====== ====== =======
Total return(1)........................................................ (0.11%) (8.38%) 17.27%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ......................... $240,228 $259,702 $289,682
Ratio of expenses to average net assets.......................... 0.20%(2) 0.44% 0.18%
Ratio of expenses to average net assets prior to expense
limitation................................................... 1.06%(2) 0.96% 1.12%
Ratio of net investment income to average net assets ............ 6.24%(2) 5.24% 5.18%
Ratio of net investment income to average net assets prior to
expense limitation........................................... 5.38%(2) 4.72% 4.24%
Portfolio turnover............................................... 3% 49% 54%
</TABLE>
___________________
(1) 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.
(2) Annualized.
(3) Commencing May 1, 1997, Delaware Management Company replaced Voyageur
Fund Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
24 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 Florida Insured Fund - Class B
----------------------------------------------------------------
Year Year Year Two months Period from
ended ended ended ended 3/11/94(1) to
12/31/97(4) 12/31/96 12/31/95 12/31/94 10/31/94
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............................. $10.710 $10.940 $9.520 $9.630 $10.640
Income from investment operations:
Net investment income ........................................ 0.477 0.480 0.500 0.090 0.310
Net realized and unrealized gain (loss) from investments ..... 0.523 (0.230) 1.440 (0.110) (1.010)
------- ------- ------- ------ -------
Total from investment operations ............................. 1.000 0.250 1.940 (0.020) (0.700)
------- ------- ------- ------ -------
Less dividends and distributions:
Dividends from net investment income ......................... (0.480) (0.480) (0.520) (0.080) (0.300)
Distributions from net realized gain on investments .......... -- -- -- (0.010) (0.010)
------- ------- ------- ------ -------
Total dividends and distributions ............................ (0.480) (0.480) (0.520) (0.090) (0.310)
------- ------- ------- ------ -------
Net asset value, end of period ................................... $11.230 $10.710 $10.940 $9.520 $ 9.630
======= ======= ======= ====== =======
Total return(2) .................................................. 9.58% 2.40% 20.76% (0.03%) (6.69%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ..................... $3,943 $3,222 $2,814 $1,477 $1,135
Ratio of expenses to average net assets ...................... 1.46% 1.24% 0.89% 0.59%(3) 1.00%(3)
Ratio of expenses to average net assets prior
to expense limitation ...................................... 1.52% 1.72% 1.68% 1.81%(3) 1.28%(3)
Ratio of net investment income to average net assets.......... 4.40% 4.51% 4.80% 5.68%(3) 4.63%(3)
Ratio of net investment income to average net assets
prior to expense limitation................................. 4.34% 4.03% 4.01% 4.46%(3) 4.35%(3)
Portfolio turnover............................................ 15% 57% 101% 3% 49%
</TABLE>
- -----------
(1) Commencement of operations.
(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) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur
Fund Managers, Inc. as the Fund's investment manager.
For the period September 29, 1997, through December 18, 1997, Florida Insured
Fund Class C sold shares which were subsequently repurchased. At December 31,
1997, there were no shares outstanding. This shareholder activity is not being
disclosed in the Financial Highlights due to its immateriality.
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 Florida Intermediate Fund - Class A
----------------------------------------------------------------
Year Year Year Period from
ended ended ended 5/1/94(1) to
12/31/97(4) 12/31/96 12/31/95 12/31/94
<S> <C> <C> <C> <C>
Net asset value, beginning of period ............................ $10.430 $10.560 $9.640 $10.000
Income from investment operations:
Net investment income ....................................... 0.475 0.420 0.440 0.180
Net realized and unrealized gain (loss) from investments..... 0.261 (0.080) 1.010 (0.360)
------- ------- ------ -------
Total from investment operations ............................ 0.736 0.340 1.450 (0.180)
------- ------- ------ -------
Less dividends and distributions:
Dividends from net investment income ........................ (0.524) (0.470) (0.490) (0.180)
Distributions from net realized gain on investments ......... (0.022) -- (0.040) --
------- ------- ------ -------
Total dividends and distributions ........................... (0.546) (0.470) (0.530) (0.180)
------- ------- ------ -------
Net asset value, end of period................................... $10.620 $10.430 $10.560 $ 9.640
======= ======= ======= =======
Total return(2).................................................. 7.25% 3.34% 15.14% (1.55%)
Ratios and supplemental data:
Net assets, end of period (000 omitted)...................... $3,163 $3,159 $859 $592
Ratio of expenses to average net assets...................... 0.61% 0.66% 0.63% 0.00%
Ratio of expenses to average net assets prior to expense
limitation ................................................. 1.33% 1.25% 1.25% 1.25%(3)
Ratio of net investment income to average net assets......... 4.64% 4.63% 4.28% 4.19%(3)
Ratio of net investment income to average net assets prior
to expense limitation....................................... 3.92% 4.04% 3.66% 2.94%(3)
Portfolio turnover........................................... 20% 63% 28% 0%
</TABLE>
- ------------
(1) Commencement of operations.
(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) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
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 Florida Intermediate Fund - Tax-Free Florida Intermediate Fund -
Class B Class C
------------------------------------ -------------------------------------
Year Year Period from Year Year Period from
ended ended 9/15/95(1) to ended ended 3/23/95(1) to
12/31/97(4) 12/31/96 12/31/95 12/31/97(4) 12/31/96 12/31/95
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............. $10.420 $10.560 $10.580 $10.420 $10.550 $10.080
Income from investment operations:
Net investment income ........................... 0.391 0.340 0.100 0.383 0.330 0.250
Net realized and unrealized gain (loss)
from investments ............................... 0.272 (0.090) 0.030 0.272 (0.090) 0.550
------- ------- ------- ------- ------- -------
Total from investment operations ................ 0.663 0.250 0.130 0.655 0.240 0.800
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income............. (0.441) (0.390) (0.110) (0.433) (0.370) (0.290)
Distributions from net realized gain on investments (0.022) -- (0.040) (0.022) -- (0.040)
------- ------- ------- ------- ------- -------
Total dividends and distributions................ (0.463) (0.390) (0.150) (0.455) (0.370) (0.330)
------- ------- ------- ------- ------- -------
Net asset value, end of period..................... $10.620 $10.420 $10.560 $10.620 $10.420 $10.550
======= ======= ======= ======= ======= =======
Total return(2).................................... 6.50% 2.47% 1.13% 6.43% 2.37% 7.95%
Ratios and supplemental data:
Net assets, end of period (000 omitted).......... $928 $1,042 $41 $55 $54 $54
Ratio of expenses to average net assets.......... 1.39% 1.48% 1.52% 31.46% 1.55% 1.62%(3)
Ratio of expenses to average net assets prior to
expense limitation.............................. 2.11% 2.00% 2.00%(3) 2.18% 2.00% 2.00%(3)
Ratio of net investment income to average net assets 3.86% 3.81% 3.32%(3) 3.79% 3.74% 3.10%(3)
Ratio of net investment income to average net
assets prior to expense limitation.............. 3.14% 3.29% 2.84%(3) 3.07% 3.29% 2.72%(3)
Portfolio turnover............................... 20% 63% 28% 20% 63% 28%
</TABLE>
- ----------
(1) Commencement of operations.
(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) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
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 A
-------------------------------------------------------------------------------------
Year Three months Year Year Three months Year Year
ended ended ended ended ended ended ended
12/31/97(4) 12/31/96(1) 9/30/96 9/30/95 9/30/94 6/30/94 6/30/93
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $10.690 $10.720 $10.870 $10.740 $10.810 $11.510 $11.030
Income from investment operations:
Net investment income.................... 0.603 0.120 0.550 0.570 0.150 0.620 0.650
Net realized and unrealized gain (loss)
from investments........................ 0.128 0.010 (0.130) 0.170 (0.060) (0.540) 0.650
------- ------- ------- ------- ------- ------- -------
Total from investment operations......... 0.731 0.130 0.420 0.740 0.090 0.080 1.300
------- ------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income..... (0.606) (0.120) (0.550) (0.590) (0.160) (0.620) (0.650)
In excess of net investment income....... -- -- -- -- -- -- (0.010)
Distributions from net realized gain on
investments............................. (0.175) (0.040) (0.020) (0.020) -- (0.160) (0.160)
------- ------- ------- ------- ------- ------- -------
Total dividends and distributions........ (0.781) (0.160) (0.570) (0.610) (0.160) (0.780) (0.820)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period............. $10.640 $10.690 $10.720 $10.870 $10.740 $10.810 $11.510
======= ======= ======= ======= ======= ======= =======
Total return(2)............................ 7.09% 1.21% 3.94% 7.31% 0.79% 0.63% 12.19%
Ratios and supplemental data:
Net assets, end of period (000 omitted).. $ 9,563 $10,044 $10,548 $11,931 $12,797 $12,851 $13,915
Ratio of expenses to average net assets.. 1.00% 0.97%(3) 1.34% 1.31% 1.09%(3) 0.99% 0.99%
Ratio of expenses to average net assets
prior to expense limitation............. 1.39% 1.12%(3) 1.55% 1.82% 1.09%(3) 1.09% 1.05%
Ratio of net investment income to average
net assets.............................. 5.66% 5.31%(3) 5.14% 5.66% 5.74%(3) 5.55% 5.74%
Ratio of net investment income to average
net assets prior to expense limitation.. 5.27% 5.16%(3) 4.93% 5.15% 5.74%(3) 5.45% 5.68%
Portfolio turnover....................... 30% 5% 12% 10% 0% 4% 17%
</TABLE>
- ---------
(1) Effective November 16, 1996, the Fund's shareholders approved a change of
investment advisor from Fortis Advisers, Inc. to Voyageur Fund Managers,
Inc.
(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) Annualized.
(4) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
28 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
-------------------------------------------------------------------
Year Three months Year Period from
ended ended ended 11/4/94(2) to
12/31/97(5) 12/31/96(1) 9/30/96 9/30/95
<S> <C> <C> <C> <C>
Net asset value, beginning of period......................... $10.650 $10.690 $10.840 $10.340
Income from investment operations:
Net investment income ..................................... 0.524 0.100 0.470 0.430
Net realized and unrealized gain (loss) from investments .. 0.136 (0.130) 0.540 0.128
------- ------- ------- -------
Total from investment operations .......................... 0.660 0.100 0.340 0.970
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ...................... (0.525) (0.100) (0.470) (0.450)
Distributions from net realized gain on investments ....... (0.175) (0.040) (0.020) (0.020)
------- ------- ------- -------
Total dividends and distributions ......................... (0.700) (0.140) (0.490) (0.470)
------- ------- ------- -------
Net asset value, end of period .............................. $10.610 $10.650 $10.690 $10.840
======= ======= ======= =======
Total return(3).............................................. 6.39% 0.95% 3.14% 9.46%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $167 $254 $448 $266
Ratio of expenses to average net assets ................... 1.75% 1.87%(4) 2.09% 2.09%(4)
Ratio of expenses to average net assets prior to
expense limitation........................................ 2.14% 2.00%(4) 2.30% 2.60%(4)
Ratio of net investment income to average net assets ...... 4.91% 4.43%(4) 4.39% 4.68%(4)
Ratio of net investment income to average net assets prior
to expense limitation..................................... 4.52% 4.30%(4) 4.18% 4.17%(4)
Portfolio turnover ........................................ 30% 5% 12% 10%
Tax-Free New York Fund - Class C
-------------------------------------------------------------------
Year Three months Year Period from
ended ended ended 11/4/94(2) to
12/31/97(5) 12/31/96(1) 9/30/96 9/30/95
Net asset value, beginning of period ........................ $10.660 $10.700 $10.850 $10.790
Income from investment operations:
Net investment income...................................... 0.522 0.100 0.470 0.210
Net realized and unrealized gain (loss) from investments... 0.128 -- (0.130) 0.060
------- ------- ------- -------
Total from investment operations .......................... 0.650 0.100 0.340 0.270
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income....................... (0.525) (0.100) (0.470) (0.210)
Distributions from net realized gain on investments ....... (0.175) (0.040) (0.020) --
------- ------- ------- -------
Total dividends and distributions ......................... (0.700) (0.140) (0.490) (0.210)
Net asset value, end of period............................... $10.610 $10.660 $10.700 $10.850
======= ======= ======= =======
Total return(3).............................................. 6.29% 0.95% 3.14% 2.54%
Ratios and supplemental data:
Net assets, end of period (000 omitted).................... $56 $53 $52 $51
Ratio of expenses to average net assets.................... 1.75% 1.84%(4) 2.09% 2.09%(4)
Ratio of expenses to average net assets prior to
expense limitation........................................ 2.14% 2.00%(4) 2.30% 2.60%(4)
Ratio of net investment income to average net assets ...... 4.91% 4.45%(4) 4.39% 4.44%(4)
Ratio of net investment income to average net assets prior
to expense limitation..................................... 4.52% 4.29%(4) 4.18% 3.93%(4)
Portfolio turnover......................................... 30% 5% 12% 10%
</TABLE>
- ----------
(1) Effective November 16, 1996, the Fund's shareholders approved a change of
investment advisor from Fortis Advisers, Inc. to Voyageur Fund Managers,
Inc.
(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) Annualized.
(5) Commencing May 1, 1997, Delaware Management Company replaced Voyageur Fund
Managers, Inc. as the Fund's investment manager.
See accompanying notes
<PAGE>
for tax-exempt income 29
Delaware-Voyageur Funds
Notes to Financial Statements
December 31, 1997
- -------------------------------------------------------------------------------
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 a
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.
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.
2. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
Security Valuation - Long-term debt securities are valued by an independent
pricing service and such prices are believed to reflect the fair value of such
securities. Money market instruments having less than 60 days to maturity are
valued at amortized cost which approximates market value. Other securities and
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by or under the direction of the Fund's Board
of Directors.
Federal Income Taxes - Each Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Funds on the basis of daily net assets of each class. Distribution expenses
relating to a specific class are charged directly to that class.
Other - Expenses common to all funds within the Delaware-Voyageur Funds are
allocated amongst the funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the sale of
investment securities are those of the specific securities sold. Interest income
is recorded on the accrual basis. Original issue discounts and market premium
are amortized 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.
<PAGE>
3. Investment Management and Other Transactions with Affiliates
Commencing May 1, 1997, and in accordance with the terms of the Investment
Management Agreement, the Funds pay DMC the Investment Manager of each Fund, an
annual fee, which is calculated daily based on the net assets of each Fund. The
management fee rates are as follows:
<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>
Management fee as a percentage of average
daily net assets (per annum)........... 0.50% 0.50% 0.40% 0.50%
</TABLE>
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, exceed 0.31%, 0.64%, 0.48%,
and 0.75% of average daily net assets for the Tax-Free Florida Fund, Tax-Free
Florida Insured Fund, Tax-Free Florida Intermediate Fund, and Tax-Free New York
Fund, respectively, through December 31, 1997. Total expenses absorbed by DMC
for the eight month period ended December 31, 1997 are as follows:
<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>
Total expenses absorbed by DMC ......... $28,543 $109,770 $13,590 $8,908
</TABLE>
<PAGE>
30 for tax-exempt income
Notes to Financial Statements (Continued)
- ------------------------------------------------------------------------------
3. Investment Management and Other Transactions with Affiliates (Continued)
Prior to May 1, 1997, the Funds had an investment advisory and management
agreement with Voyageur. Voyageur received a fee for its investment advisory and
management services based on the average daily net assets of the Tax-Free
Florida Fund, Tax-Free Florida Insured Fund, and Tax-Free New York Fund at an
annual rate of .50% and at an annual rate of .40% for the Tax-Free Florida
Intermediate Fund. During the period January 1, 1997 to April 30, 1997, Voyageur
waived $15,447, $0, $15,077, and $29,741 of the Tax-Free Florida Fund, Tax-Free
Florida Insured Fund, Tax-Free Florida Intermediate Fund, and Tax-Free New York
Fund, respectively.
Commencing May 1, 1997, the Funds have engaged DSC, an affiliate of DMC, to
serve as dividend disbursing, transfer agent and accounting services agent for
the Fund. For the eight month period ended December 31, 1997, the amounts
expensed for each Fund were as follows:
<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>
Dividend disbursing, transfer agent
fees and expenses ................. $2,385 $59,929 $2,078 $6,593
Accounting fees ..................... $2,114 $43,450 $1,007 $2,472
</TABLE>
Prior to May 1, 1997, the Funds paid a fee to Voyageur for acting as the Fund's
dividend disbursing, administrative and accounting services agent. Each Fund was
also responsible for reimbursing Voyageur's out-of-pocket expense in connection
with the performance of dividend-disbursing, administrative and accounting
services.
On December 31, 1997, the Funds had payables to affiliates as follows:
<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 Management fee payable to DMC.. $ -- $39,741 $ -- $8,704
Dividend disbursing, transfer agent fees,
accounting fees and other expenses
payable to DSC.......................... $750 $11,752 $266 $987
</TABLE>
Commencing May 1, 1997, and pursuant to the Distribution Agreement, the Funds
pay DDLP, the Distributor and an affiliate of DMC, an annual fee not to exceed
0.25% of the average daily net assets of the A Class and 1.00% of the average
daily net assets of the B and C Class for each Series. For the eight month
period ended December 31, 1997, DDLP earned commissions on sales of the Fund A
Class shares for each Fund as follows:
<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>
$3,121 $9,044 $302 $1,182
</TABLE>
Prior to May 1, 1997 each class of shares had a Distribution Agreement with
Voyageur Fund Distributors, Inc. ("VFD"). Under the plan the Funds paid VFD a
fee at an annual rate of 0.25% of the average daily net assets of the Class A
Shares and 1.00% of the average daily net assets of the Class B and C Shares.
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.
<PAGE>
4. Investments
During the period ended December 31, 1997, the Fund made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments for each Fund as follows:
<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>
Purchases ......................... $3,683,655 $26,025,343 $775,259 $2,908,869
Sales ............................. $1,458,811 $66,398,596 $946,091 $3,489,260
</TABLE>
At December 31, 1997, the aggregate cost of securities and unrealized
appreciation (depreciation) for federal income tax purposes for each Fund were
as follows:
<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>
Cost of Investments ................... $10,148,526 $152,324,208 $3,934,407 $9,368,788
Aggregate unrealized appreciation ..... $ 518,372 $ 13,326,358 $ 159,687 $ 712,946
Aggregate unrealized depreciation ..... $ -- $ -- $ -- $ 5
Net unrealized appreciation ........... $ 518,372 $ 13,326,358 $ 159,687 $ 712,941
</TABLE>
For federal income tax purposes, as of December 31, 1997, Tax-Free Florida
Insured Fund had a capital loss carryover of $11,382,981 that will expire in
2002 through 2004.
<PAGE>
for tax-exempt income 31
Notes to Financial Statements (Continued)
- -------------------------------------------------------------------------------
5. Fund Merger
On May 31, 1996, Voyageur Florida Limited Term Fund acquired all of the net
assets of Mackenzie Florida Limited Term Fund (Mackenzie Fund) pursuant to an
Agreement and Plan of Reorganization approved by the Mackenzie shareholders on
May 29, 1996. The acquisition was accompanied by a tax-free exchange of 230,171
shares of Mackenzie Fund Class A shares for 222,818 shares of Florida Limited
Term Fund Class A shares and 131,059 shares of Mackenzie Fund Class B shares for
126,618 shares of Florida Limited Term Class B shares. The aggregate net assets
of Florida Limited Term Fund and Mackenzie Fund before the acquisition were
$991,683 and $3,609,682 (including $24,698 of net unrealized appreciation of
investments, $2,285,965 of paid-in capital for Class A and $1,299,019 of paid-in
capital for Class B), respectively, resulting in combined net assets of
$4,601,365 on May 31, 1996.
6. Capital Stock
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
Tax-Free Tax-Free Florida Tax-Free Florida Tax-Free
Florida Fund Insured Fund Intermediate Fund New York Fund
-------------------- --------------------- --------------------- ------------------------------
Year Year Year Year Year Year Year Three Months Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended
12/31/97 12/31/96 12/31/97 12/31/96 12/31/97 12/31/96 12/31/97 12/31/96 09/30/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold:
A Class .................. 264,535 203,132 417,805 647,757 61,257 34,201 61,662 1,014 23,378
B Class .................. 105,990 148,113 76,153 69,745 765 683 6,824 6,492 16,347
C Class .................. 10,329 1,479 1,960 -- -- -- -- -- --
Shares issued in connection
with the acquisition of
Mackenzie Florida
Limited Term Fund
A Class .................. N/A N/A N/A N/A N/A 222,818 N/A N/A N/A
B Class .................. N/A N/A N/A N/A N/A 126,618 N/A N/A N/A
C Class .................. N/A N/A N/A N/A N/A N/A N/A N/A N/A
Shares issued upon reinvestment
of dividends from net
investment income and net
realized gains from
security transactions:
A Class .................. 10,263 8,770 231,868 265,652 8,945 4,599 54,059 9,603 44,599
B Class .................. 1,765 607 4,520 3,772 2,082 868 1,014 321 983
C Class .................. 243 11 11 -- -- 126 349 55 216
-------- ------- ---------- ---------- ------- ------- -------- ------- --------
393,125 362,112 732,317 986,926 73,049 389,913 123,908 17,485 85,523
-------- ------- ---------- ---------- ------- ------- -------- ------- --------
Shares repurchased:
A Class ................. (141,380) (76,595) (4,163,715) (5,135,342) (75,457) (40,025) (156,730) (54,492) (181,528)
B Class ................. (19,696) (2,879) (30,565) (29,908) (15,466) (32,078) (15,960) (24,803) --
C Class ................. -- (817) (1,971) -- -- -- (22) (7) --
-------- ------- ---------- ---------- ------- ------- -------- ------- --------
(161,076) (80,291) (4,196,251) (5,165,250) (90,923) (72,103) (172,712) (79,302) (181,528)
-------- ------- ---------- ---------- ------- ------- -------- ------- --------
Net Increase (Decrease)..... 232,049 281,821 (3,463,934) (4,178,324) (17,874) 317,810 (48,804) (61,817) (96,005)
======== ======= ========== ========== ======= ======= ======== ======= ========
</TABLE>
7. 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 Florida
Tax-Free 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.
Inverse floaters represent a security that pays interest at rates that increase
(decrease) with a decrease (increase) in a specified index. Interest rates
disclosed are in effect on December 31, 1997.
<PAGE>
32 for tax-exempt income
Delaware Group Delaware-Voyageur Funds
Report of Independent Auditors
- ------------------------------------------------------------------------------
To the Shareholders and Board of Directors
Voyageur Investment Trust - Delaware-Voyageur Tax-Free Florida Fund
Voyageur Investment Trust - Delaware-Voyageur Tax-Free Florida Insured Fund
Voyageur Investment Trust II - Delaware-Voyageur Tax-Free Florida Intermediate
Fund
Voyageur Mutual Funds, Inc. - Delaware-Voyageur Tax-Free New York Fund
We have audited the accompanying statements of net assets of Tax-Free Florida
Fund, Tax-Free Florida Insured Fund, Tax-Free Florida Intermediate Fund, and
Tax-Free New York Fund (the "Funds") as of December 31, 1997, and the related
statements of operations, the statements of changes in net assets and the
financial highlights for the year then ended. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The statements of changes in net
assets for the year ended December 31, 1996, and the financial highlights for
the periods presented through December 31, 1996 were audited by other auditors
whose reports thereon dated February 14, 1997 expressed unqualified opinions on
those statements and financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of December 31, 1997, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the 1997 financial statements and financial highlights present
fairly, in all material respects, the financial position of each of the
respective Funds at December 31, 1997, and the results of their operations, the
changes in their net assets and their financial highlights for the year then
ended, in conformity with generally accepted accounting principles.
Ernst & Young
Philadelphia, Pennsylvania
February 16, 1998
<PAGE>
This annual report is for the information of Tax-Free Florida Funds and Tax-Free
New York Fund shareholders, but it may be used with prospective investors when
preceded or accompanied by a current Prospectus for Tax-Free Florida Funds and
Tax-Free New York Fund, 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 the 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 Fund will
fluctuate so that shares, when redeemed, may be worth more or less than their
original cost.
Board of Directors
Wayne A. Stork
Chairman
Delaware Investments Family of Funds
Philadelphia, PA
Jeffrey J. Nick
President and Chief Executive Officer
Delaware Investments Family of Funds
Philadelphia, PA
Walter P. Babich
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA
Anthony D. Knerr
Consultant, Anthony Knerr & Associates
New York, NY
Ann R. Leven
Treasurer, National Gallery of Art
Washington, DC
W. Thacher Longstreth
City Councilman
Philadelphia, PA
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
Charles E. Peck
Secretary/Treasurer, Enterprise Homes, Inc.
Fredericksburg, VA
Affiliated Officers
David K. Downes
Executive Vice President, Chief Financial Officer
and Chief Operating Officer
Delaware Investments Family of Funds
Philadelphia, PA
George M. Chamberlain, Jr.
Senior Vice President, Secretary
and General Counsel
Delaware Investments Family of Funds
Philadelphia, PA
Bruce D. Barton
President and Chief Executive Officer
Delaware Distributors, L.P.
Philadelphia, PA
directors
& officers
- --------------------------------------------------------------------------------
Investment Manager
Delaware Management Company, Inc.
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
<PAGE>
This report must be preceded or accompanied by a current Tax-Free Florida Funds
and Tax-Free New York Fund Prospectus and the Delaware Investments Fund
Performance Update for the most recently completed calendar quarter. For a
prospectus of any other mutual fund from Delaware Investments, contact your
financial adviser or Delaware.
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Fund 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 Fund are not bank or credit union deposits.
Copy Rights Delaware Distributors, L.P.
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AR-FLNY[12/97]TKO2/98
