<PAGE>
For Tax-Exempt Income
DELAWARE-VOYAGEUR
Tax-Free New York Fund
1997
Semi-Annual Report
professional management
service and guidance
[Picture]
goals
DELAWARE
GROUP
========
<PAGE>
- --------------------------------------------------------------------------------
JULY 18, 1997
Dear Shareholder:
I AM PLEASED TO PRESENT THE FIRST SHAREHOLDER REPORT OF THE Tax-Free New York
Fund since the Voyageur funds joined the Delaware family on April 30, 1997. For
the six months ended June 30, 1997, your Fund provided a total return of +2.23%
(capital change for Class A shares plus reinvested dividends at net asset
value).
On behalf of all of us here in Philadelphia, I welcome you to an
organization of experienced financial professionals dedicated to helping you
reach your investment goals. Delaware has managed municipal bond investments for
more than 20 years and pioneered the concept of single-state, tax-exempt funds.
Since May, your Funds has been co-managed by Mitchell L. Conery and
Patrick P. Coyne, two veteran portfolio managers with a thorough understanding
of the dynamics of the state's bond market. In fact, Mr. Conery is a native New
Yorker. Born and raised in the state's capital, he obtained his masters degree
at SUNY at Albany and worked in Manhattan managing a $5 billion municipal bond
portfolio for Travelers Group prior to joining Delaware. Mr. Coyne has been
managing bonds at Delaware since 1990, has an MBA from the University of
Pennsylvania and a bachelor's degree from Harvard University.
DELAWARE HAS MANAGED MUNICIPAL BOND INVESTMENTS FOR MORE THAN 20 YEARS AND
PIONEERED THE CONCEPT OF SINGLE-STATE, TAX-EXEMPT FUNDS.
I write to you at a fortuitous time. An unprecedented period of prosperity
on Wall Street appears to have rejuvenated New York City's economy and helped
maintain the overall credit quality of the state's fixed-income securities.
Meanwhile, Gov. George Pataki has reduced state taxes for two consecutive years.
In 1996, he cut taxes more than all the other 49 states combined, according to
the National Governor's Association Fiscal Survey.
2 1 9 9 7 s e m i - a n n u a l r e p o r t
<PAGE>
Still, New Yorkers face some of the nation's highest overall tax rates.
Fortunately, there is ample opportunity for income-oriented investors to tap the
potential of the state's growing municipal bond market. Thus far in 1997, New
York communities have led the nation in issuing new municipal bonds, issuing
more than $12.8 billion in securities through June, a 36.8% increase from a year
ago, according to THE BOND BUYER, a trade publication.
Mr. Conery and Mr. Coyne are committed to employing a disciplined
investment strategy designed to help you take advantage of the income and total
return potential of New York's municipal bond market. On the pages that follow,
they present their view of the market and discuss the Fund's positioning.
From all of us on this side of the Hudson and Delaware Rivers, I thank
you for your confidence in Delaware Group. I look forward to reporting to you
again.
Sincerely,
/s/ Wayne A. Stork
- -----------------------------------------------
Wayne A. Stork
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
NEW YORK AT A GLANCE
---------------------------------------------------------
Data as of June 30, 1997
---------------------------------------------------------
General Obligation Bond Ratings
State and NYC A-
Budget Surplus $1.3 billion
Per Capita Income $28,782
Population 18 Million
Range of Individual Income Tax Rates 6% to 7.75%
Top Tax Bracket $60,000
Unemployment Rate 6.3%
SOURCES: BLOOMBERG BUSINESS NEWS, CATO INSTITUTE
1 9 9 7 s e m i - a n n u a l r e p o r t 3
<PAGE>
Introducing Your Fund's Portfolio Managers
[Picture of Patrick P. Coyne]
Patrick P. Coyne has managed fixed-income securities at Delaware since 1990. He
holds an MBA in finance from the University of Pennsylvania's Wharton School of
Business and an undergraduate degree in European history and classics from
Harvard University
[Picture of Mitchell L. Conery]
Mitchell L. Conery joined Delaware on January 2, 1997. He had been managing a $5
billion municipal bond portfolio for Travelers Group in New York City. Mr.
Conery holds an MBA from the State University of New York at Albany. He holds a
bachelor's degree in economics and mathematics from Boston University.
Performance Review
Nationwide, our country's output of goods and services grew at a robust 5.9%
pace in the first quarter. This prompted the Federal Reserve to raise its target
for short-term interest rates by a modest 25 basis points (0.25%) to 5.5% in an
effort to forestall inflation.
As the second calendar quarter of 1997 progressed, the bond market
welcomed news of possible slower U.S. economic growth. By the end of June,
long-term U.S. Treasury bonds yielded 6.78%, compared to over 7% just a few
months earlier. Between December 31, 1996, and mid-year, average yields on short
and intermediate-term New York bonds rated A2/A increased modestly, as shown in
the yield chart on page 6. Yields of comparable long-term bonds, those maturing
in 15 years or more, fell during the period.
4 1 9 9 7 s e m i - a n n u a l r e p o r t
<PAGE>
STRATEGIC POSITIONING AND OUTLOOK
During the first half of fiscal 1997, your Fund's portfolio benefited from a
general decline in interest rates, but not nearly as much as portfolios of
municipal bonds in other states where taxes were lower. We believe that's partly
because New York had a high level of investor demand that reduced municipal
bonds' sensitivity to short-term interest rate movements.
WHEN WE SELECT BONDS FOR THE PORTFOLIO, WE FOCUS ON MAXIMIZING TAX-EXEMPT INCOME
WHILE PRUDENTLY MANAGING THE EFFECT OF INTEREST RATE CHANGES ON PRINCIPAL.
In addition, your Fund's portfolio was composed primarily of older bonds
paying relatively high levels of tax-exempt income. More than 90% of your Fund's
net assets were bonds trading at a premium to their face value, and prices of
such premium bonds generally fluctuate less than those selling near par (face
value) or at a discount to their face value.
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.
When we select bonds for the portfolio, we focus on maximizing tax-exempt
income while prudently
PORTFOLIO HIGHLIGHTS
- ----------------------------------------------------------
June 30, 1997
- ----------------------------------------------------------
Pre-Refunded Bonds 36.3%
Housing 4.3%
Higher Education 15%
Cash 1.9%
Other Revenue Bonds 6.1%
Industrial Development 4.6%
Hospitals 17%
Transportation 14.8%
Average Effective Maturity 7.3 years
Average Effective Duration 4.6 years
Average Quality AA
Thirty-Day Current SEC Yield* 3.63%
APPROXIMATELY 0.15% OF THE INCOME GENERATED BY TAX-FREE NEW YORK FUND FOR THE
SIX MONTHS ENDED JUNE 30, 1997, WAS SUBJECT TO THE 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 3.03%.
1 9 9 7 s e m i - a n n u a l r e p o r t 5
<PAGE>
managing the effect of interest rate changes on principal. We have positioned
the Fund's average effective duration at 4.8 years, up from 4.0 years at the
beginning of the fiscal period. In our opinion, it is unlikely that the Fed will
significantly raise interest rates for the balance of the year. Duration
measures a bond's sensitivity to interest rates and indicates the likely change
in a bond's price given a 1% movement in interest rates.
In the coming months, we believe we can find superior opportunities in
hospital bonds, among other sectors, in part because concerns about industry
competition have depressed bond prices. We also have a significant positioning
in securities that finance projects in New York City and its suburbs such as
Hempstead and Babylon on Long Island because we believe this region can continue
to prosper. Among the bonds we've added since we began managing the Fund is an
industrial development bond issue that will enable Northwest Airlines to
renovate and expand their operations at Kennedy International Airport.
Outlook
If New York were a nation it would be the 10th largest economy in the
world. Per capita income among the state's 18 million residents ranks 2nd
nationwide. In our opinion, the long-term outlook for New York State's economy
and bond market is bright.
Mitchell L. Conery
VICE PRESIDENT
SENIOR PORTFOLIO MANAGER
Patrick P. Coyne
VICE PRESIDENT
SENIOR PORTFOLIO MANAGER
July 18, 1997
Yield Yield
Maturity December 31, 1996 NY State A2/A June 30, 1997 NY State A2/A
3 months 3.53% 3.54%
6 months 3.63% 3.64%
1 year 3.79% 3.84%
2 years 4.09% 4.2%
3 years 4.29% 4.4%
4 years 4.44% 4.5%
5 years 4.59% 4.6%
7 years 4.79% 4.8%
10 years 5.09% 4.95%
15 yrs 5.5% 5.32%
20 yrs 5.63% 5.46%
30 yrs 5.7% 5.51%
6 1 9 9 7 s e m i - a n n u a l r e p o r t
<PAGE>
COMPARATIVE TOTAL RETURNS FOR THE
SIX MONTHS ENDED JUNE 30, 1997*
____________________________________________________________
Lehman Brothers Municipal Bond Index +3.2%
Tax Free New York Fund A +2.23%
*TOTAL RETURN IS BASED ON CHANGE IN NET ASSET VALUE WITH DISTRIBUTIONS
REINVESTED. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. PERFORMANCE
OF OTHER FUND CLASSES VARIES DUE TO DIFFERENT CHARGES AND EXPENSES. SEE PAGE
12 FOR SIX-MONTH RETURNS FOR B AND C CLASSES. THE UNMANAGED LEHMAN BROTHERS
MUNICIPAL BOND INDEX INCLUDES TAX-EXEMPT BONDS FROM MANY STATES AND DOES NOT
INCLUDE ANY MANAGEMENT FEES
OR EXPENSES.
<TABLE>
<CAPTION>
TAX-FREE NEW YORK FUND PERFORMANCE
- -------------------------------------------------------------------------------------------------------
Average Annual Returns Through June 30, 1997
<S> <C> <C> <C>
Lifetime Five Years One Year
- -------------------------------------------------------------------------------------------------------
Class A (Est. 11/6/87)
Excluding Sales Charge +7.41% +5.64% +5.23%
Including Sales Charge +6.98% +4.84% +1.25%
- -------------------------------------------------------------------------------------------------------
Class B (Est. 11/14/94)
Excluding Sales Charge +5.86% +4.39%
Including Sales Charge +4.81% +0.42%
- -------------------------------------------------------------------------------------------------------
Class C (Est. 4/26/95)
Excluding Sales Charge +3.97% +4.40%
Including Sales Charge +3.97% +3.41%
</TABLE>
*ALL PERFORMANCE 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 THE INVESTMENT WAS NOT REDEEMED.
RESULTS REFLECT A VOLUNTARY EXPENSE LIMITATION IN EFFECT AT THE TIME. RETURNS
WOULD HAVE BEEN LOWER WITHOUT THE LIMITATION.
CLASS A SHARES HAVE A 3.75% MAXIMUM FRONT-END SALES CHARGE AND A 12B-1 FEE.
CLASS B SHARES DO NOT CARRY A FRONT-END SALES CHARGE, BUT ARE SUBJECT TO A 1%
ANNUAL DISTRIBUTION AND SERVICE FEE. THEY ARE ALSO SUBJECT TO A DEFERRED
SALES CHARGE OF UP TO 4% IF REDEEMED BEFORE THE END OF THE SIXTH YEAR.
CLASS C SHARES HAVE A 1% ANNUAL DISTRIBUTION AND SERVICE FEE. IF SHARES ARE
REDEEMED WITHIN 12 MONTHS, A 1% CONTINGENT DEFERRED SALES CHARGE APPLIES.
1 9 9 7 s e m i - a n n u a l r e p o r t 7
<PAGE>
Financial Statements
DELAWARE-VOYAGEUR TAX-FREE NEW YORK FUND
STATEMENT OF NET ASSETS -- JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------
MUNICIPAL BONDS - 98.12%
HIGHER EDUCATION - 15.00%
New York State Dormitory Authority Revenue-State
University 7.50% 05/15/11.......................... $400,000 $ 474,284
New York State Dormitory Authority Revenue-Pooled
Capital Program (FGIC) 7.80% 12/01/05.............. 641,000 677,704
New York State Dormitory Authority Revenue-City
University 8.125% 07/01/07......................... 295,000 312,688
----------
1,464,676
----------
HOSPITAL REVENUE BOND - 16.97%
New York State Dormitory Authority Revenue-Millard
Fillmore Hospital-FHA (AMBAC)
5.375% 02/01/32.................................... 450,000 427,990
New York State Medical Care Facility Finance
Agency Revenue St.Luke's Hospital FHA (MBIA)
7.45% 02/15/29..................................... 600,000 656,838
New York State Medical Care Facility
Finance Agency Revenue-Mental
Health 7.70% 02/15/18.............................. 305,000 317,011
New York State Dormitory Authority
Revenue-Mental Health 5.90% 02/15/12............... 250,000 254,825
----------
1,656,664
----------
HOUSING REVENUE BONDS - 4.31%
New York State Mortgage Agency Revenue
Homeowner Series BB2-
FHA 7.85% 10/01/08.................................. 410,000 420,890
----------
420,890
----------
INDUSTRIAL DEVELOPMENT
REVENUE BOND - 4.55%
New York City Industrial Development
Agency-Northwest Airlines Inc.-AMT
6.00% 06/01/27...................................... 450,000 444,425
----------
444,425
----------
*PRE-REFUNDED BONDS - 36.34%
Babylon Industrial Development Agency Resource
Recovery (Ogden Martin) Series B
8.10% 01/01/00-98................................... 290,000 310,256
Babylon Industrial Development Agency Resource
Recovery (Ogden Martin) Series C
8.50% 01/01/19-98 .................................. 405,000 434,646
New York City GO-Series F
8.25% 11/15/17-01 .................................. 690,000 801,200
North Hempstead, GO Series A (FGIC)
7.25% 04/01/12-99 .................................. 250,000 267,718
New York State Dorm Authority
Revenue-City University
8.125% 07/01/07-98 ................................. 105,000 111,296
New York State Local Government Assistance
Corporation-Series B 7.50% 04/01/20-01 .............. 600,000 673,482
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
-------------------------
MUNICIPAL BONDS (CONTINUED)
*PRE-REFUNDED BONDS (CONTINUED)
New York-State Urban Development Corporation
Revenue-Correctional Facilities
7.375% 01/01/18-02.................................. $600,000 $ 679,044
Municipal Assistance Corporation for the
City of New York 7.625% 07/01/08-99................. 250,000 270,767
-----------
3,548,409
TRANSPORTATION REVENUE BONDS - 14.82% -----------
Metropolitan Transportation Authority
New York Service Contract-Commuter
Facilities-Series O 5.75% 07/01/13.................. 400,000 407,980
New York State Thruway Authority
Service Contract Revenue-Local
Highway & Bridge 6.25% 04/01/14..................... 500,000 519,150
Triborough Bridge and Tunnel
Authority Revenue 8.125% 01/01/12................... 500,000 519,295
-----------
1,446,425
OTHER REVENUE BONDS - 6.13% -----------
Puerto Rico Public Buildings Authority Revenue
Guaranteed Government Facilities-Series B
5.25% 07/01/21...................................... 200,000 188,606
United Nations Development Corporation
Senior Lien Series A 6.00% 07/01/12................. 400,000 409,420
-----------
598,026
-----------
Total Municipal Bonds (cost $8,938,296).............. 9,579,515
-----------
SHORT TERM INVESTMENTS - 4.44%
Norwest Advantage Municipal Money
Market Fund......................................... 433,988 433,988
-----------
Total Short Term Investments
(cost $433,988)..................................... 433,988
-----------
Total Market Value Of securities owned - 102.56%
(cost $9,372,284)**............................................ $10,013,503
LIABILITIES NET OF RECEIVABLES AND
OTHER ASSETS - (2.56%)......................................... (250,251)
-----------
NET ASSETS APPLICABLE TO 919,254 SHARES
($.01 PAR VALUE) OUTSTANDING................................... $ 9,763,252
===========
NET ASSET VALUE - TAX FREE NEW YORK A CLASS
($9,594,155 / 903,294 shares).................................. $10.62
NET ASSET VALUE - TAX FREE NEW YORK B CLASS ======
($115,356 / 10,889 shares)..................................... $10.59
NET ASSET VALUE - TAX FREE NEW YORK C CLASS ======
($53,741 / 5,071 shares)....................................... $10.60
======
- -------------------
*For Pre-Refunded Bonds, the stated maturity is followed by the year in which
each bond is pre-refunded.
**Also cost for federal tax purposes.
FGIC - Insured by the Federal Guaranty Insurance Company
8 1 9 9 7 s e m i - a n n u a l r e p o r t
<PAGE>
DELAWARE-VOYAGEUR TAX-FREE NEW YORK FUND
STATEMENT OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
Market
Value
---------
COMPONENTS OF NET ASSETS AT JUNE 30, 1997
Common Stock, $.01 par value, 10,000,000,000 shares
authorized to the Fund with 10,000,000,000 shares
allocated to Tax Free New York Fund A Class
10,000,000,000 shares allocated to
Tax Free New York Fund B Class
10,000,000,000 shares allocated
to Tax Free New York Fund C Class.................... $9,061,188
Accumulated undistributed net investment income....... 5,717
Accumulated net realized gain on investments.......... 55,128
Net unrealized appreciation of investments............ 641,219
----------
Total net assets...................................... $9,763,252
==========
THE DELAWARE-VOYAGEUR TAX-FREE
NEW YORK FUND
STATEMENT OF ASSETS AND
LIABILITIES -- JUNE 30, 1997
(UNAUDITED)
- -------------------------------
ASSETS:
Investments at market (cost $9,372,284)............... $10,013,503
Cash.................................................. 141,925
Interest receivable................................... 205,515
Receivable for securities sold........................ 315,124
-----------
Total assets.......................................... 10,676,067
-----------
LIABILITIES:
Payable for securities purchased...................... 874,945
Other accounts payable and accrued expenses........... 37,870
-----------
Total liabilities.................................... 912,815
-----------
TOTAL NET ASSETS...................................... $ 9,763,252
===========
See accompanying notes
<PAGE>
THE DELAWARE-VOYAGEUR TAX-FREE
NEW YORK FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
- -------------------------------
INVESTMENT INCOME:
Interest.............................................. $340,257
--------
EXPENSES:
Management fees....................................... $24,781
Dividend disbursing, transfer agent and
custodian fees and expenses.......................... 13,985
Professional fees..................................... 15,550
Registration fees .................................... 14,081
Distribution expense ................................. 13,345
Reports and statements to shareholders................ 3,160
Accounting fees and salaries ......................... 635
Directors' fees ...................................... 207
Other ................................................ 3,087
-------
88,831
-------
Less expenses waived or absorbed: .................... (38,281)
Total net expenses .................................. ------- 50,550
--------
NET INVESTMENT INCOME ................................ 289,707
--------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments: .................... 77,357
Net change in unrealized appreciation
of investments: .................................... (143,494)
--------
NET REALIZED AND UNREALIZED LOSS
ON INVESTMENTS ...................................... (66,137)
--------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ..................................... $223,570
========
See accompanying notes
1 9 9 7 s e m i - a n n u a l r e p o r t 9
<PAGE>
<TABLE>
<CAPTION>
THE DELAWARE-VOYAGEUR TAX-FREE
NEW YORK FUND
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------------
SIX MONTHS THREE MONTHS YEAR
ENDED ENDED ENDED
6/30/97 12/31/96(1) 9/30/96
(UNAUDITED)
----------------------------------------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS
FROM OPERATIONS:
Net investment income ...................................... $ 289,707 $ 142,633 $ 623,153
Net realized gain on investments ........................... 77,357 11,285 13,314
Net change in unrealized appreciation of investments ....... (143,494) (6,168) (164,569)
---------- ----------- -----------
Net increase in net assets resulting from operations ....... 223,570 147,750 471,898
---------- ----------- -----------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income:
A Class ................................................... (280,661) (139,837) (601,484)
B Class ................................................... (4,991) (3,811) (13,195)
C Class ................................................... (1,323) (606) (2,249)
Net realized gain from security transactions:
A Class ................................................... -- (37,358) (16,591)
B Class ................................................... -- (921) (306)
C Class ................................................... -- (191) (73)
---------- ----------- -----------
(286,975) (182,724) (633,988)
---------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ................................................... 122,956 12,100 252,630
B Class ................................................... 24,890 69,592 175,631
C Class ................................................... -- -- --
Net asset value of shares issued upon reinvestment
of dividends from net investment income and net
realized gain on security transactions:
A Class ................................................... 245,859 103,103 482,791
B Class ................................................... 5,111 3,436 10,597
C Class ................................................... 1,469 591 2,322
---------- ----------- -----------
400,285 188,822 923,971
---------- ----------- -----------
Cost of shares repurchased:
A Class ................................................... (758,690) (584,980) (1,960,805)
B Class ................................................... (166,103) (266,224) --
C Class ................................................... (236) (76) --
---------- ----------- -----------
(925,029) (851,280) (1,960,805)
---------- ----------- -----------
Decrease in assets derived from capitalshare transactions .. (524,744) (662,458) (1,036,834)
---------- ----------- -----------
NET DECREASE IN NET ASSETS ................................. (588,149) (697,432) (1,198,924)
NET ASSETS:
Beginning of period ........................................ 10,351,401 11,048,833 12,247,757
---------- ----------- -----------
End of period .............................................. $ 9,763,252 $10,351,401 $11,048,833
---------- ----------- -----------
</TABLE>
(1) The Fund changed its fiscal year end to December 31
See accompanying notes
10 1 9 9 7 s e m i - a n n u a l r e p o r t
<PAGE>
THE DELAWARE-VOYAGEUR TAX-FREE NEW YORK FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
was as follows:
<TABLE>
<CAPTION>
Tax-Free New York Fund - Class A
-------------------------------------------------------------------------------------------
Six Months Three Months Year Three Months Year
Ended Ended Ended Ended Ended
6/30/97 12/31/96(1) 9/30/96 9/30/95 9/30/94 6/30/94 6/30/93 6/30/92
(Unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $10.69 $10.72 $10.87 $10.74 $10.81 $11.51 $11.03 $10.57
Income from investment operations:
Net investment income (loss)......... 0.30 0.12 0.55 0.57 0.15 0.62 0.65 0.66
Net realized and unrealized gain
from investments.................... (0.08) 0.01 (0.13) 0.17 (0.06) (0.54) 0.65 0.62
Net increase in net assets ------ ------ ------ ------ ------ ------ ------ ------
from investment operations.......... 0.22 0.13 0.42 0.74 0.09 0.08 1.30 1.28
------ ------ ------ ------ ------ ------ ------ ------
Less dividends and distributions:
Dividends from net investment
income(3)........................... (0.29) (0.12) (0.55) (0.59) (0.16) (0.62) (0.65) (0.66)
In excess of net investment income... - - - - - - (0.01) -
Distributions from net realized gain
on security transactions............ - (0.04) (0.02) (0.02) - (0.16) (0.16) (0.16)
------ ------ ------ ------ ------ ------ ------ ------
Total dividends and distributions.... (0.29) (0.16) (0.57) (0.61) (0.16) (0.78) (0.82) (0.82)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period........ $10.62 $10.69 $10.72 $10.87 $10.74 $10.81 $11.51 $11.03
====== ====== ====== ====== ====== ====== ====== ======
Total Return(4)....................... 2.23% 1.21% 3.94% 7.31% 0.79% 0.63% 12.19% 12.53%
Ratios and supplemental data:
Net assets, end of period
(000 omitted)....................... $9,594 $10,044 $10,548 $11,931 $12,797 $12,851 $13,915 $14,943
Ratio of expenses to average
net assets.......................... 1.00%(5) 0.97%(5) 1.34% 1.31% 1.09%(5) 0.99% 0.99% 1.00%
Ratio of expenses to average
net assets prior to expense
limitation.......................... 1.77%(5) 1.12%(5) 1.55% 1.82% 1.09%(5) 1.09% 1.05% 1.26%
Ratio of net investment income to
average net assets.................. 5.86%(5) 5.31%(5) 5.14% 5.66% 5.74%(5) 5.55% 5.74% 6.15%
Ratio of net investment income to
average net assets prior to
expense limitation.................. 5.09%(5) 5.16%(5) 4.93% 5.15% 5.74%(5) 5.45% 5.68% 5.89%
Portfolio turnover................... 21.79%(5) 5.00% 12.00% 10.00% 0.00% 4.00% 17.00% 19.00%
</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) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) Annualized.
1 9 9 7 s e m i - a n n u a l r e p o r t 11
<PAGE>
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 Tax-Free New York Fund - Class C
------------------------------------------------------------------------------------------------------
Six Months Three Months Year Period From | Six Months Three Months Year Period From
Ended Ended Ended 11/4/94(2) | Ended Ended Ended 4/26/95(2)
6/30/97 12/31/96(1) 9/30/96 to | 6/30/97 12/31/96(1) 9/30/96 to
(Unaudited) 9/30/95 | (Unaudited) 9/30/95
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period................ $10.65 $10.69 $10.84 $10.34 $10.66 $10.70 $10.85 $10.79
Income from investment
operations:
Net investment income.... 0.25 0.10 0.47 0.43 0.25 0.10 0.47 0.21
Net realized and
unrealized gain (loss)
from investments........ (0.06) - (0.13) 0.54 (0.06) - (0.13) 0.06
------ ------ ------ ------ ------ ------ ------ ------
Net increase in net assets
from investment
operations.............. 0.19 0.10 0.34 0.97 0.19 0.10 0.34 0.27
------ ------ ------ ------ ------ ------ ------ ------
Less dividends and
distributions:
Dividends from net
investment income(3).... (0.25) (0.10) (0.47) (0.45) (0.25) (0.10) (0.47) (0.21)
Distributions from net
realized gain on security
transactions............ - (0.04) (0.02) (0.02) - (0.04) (0.02) -
------ ------ ------ ------ ------ ------ ------ ------
Total dividends and
distributions............ (0.25) (0.14) (0.49) (0.47) (0.25) (0.14) (0.49) (0.21)
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of
period................... $10.59 $10.65 $10.69 $10.84 $10.60 $10.66 $10.70 $10.85
====== ====== ====== ====== ====== ====== ====== ======
Total Return(4)........... 1.94% 0.95% 3.14% 9.46% 1.94% 0.95% 3.14% 2.54%
Ratios and supplemental data:
Net assets, end of period
(000 omitted)........... $115 $254 $448 $266 $54 $53 $52 $51
Ratio of expenses to average
net assets.............. 1.75%(5) 1.87%(5) 2.09% 2.09%(5) 1.75%(5) 1.84%(5) 2.09% 2.09%(5)
Ratio of expenses to average
net assets prior to
expense limitation...... 2.52%(5) 2.00%(5) 2.30% 2.60%(5) 2.52%(5) 2.00%(5) 2.30% 2.60%(5)
Ratio of net investment
income to average net
assets.................. 5.11%(5) 4.43%(5) 4.39% 4.68%(5) 5.11%(5) 4.45%(5) 4.39% 4.44%(5)
Ratio of net investment
income to average net
assets prior to expense
limitation.............. 4.34%(5) 4.30%(5) 4.18% 4.17%(5) 4.34%(5) 4.29%(5) 4.18% 3.93%(5)
Portfolio turnover....... 21.79%(5) 5.00% 12.00% 10.00% 21.79%(5) 5.00% 12.00% 10.00%
</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) For federal income tax purposes, all of the net investment income
distributions were derived from interest on securities exempt from federal
income tax.
(4) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(5) Annualized.
12 1997 semi-annual report
<PAGE>
THE DELAWARE-VOYAGEUR FUNDS
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
Delaware-Voyageur Tax-Free New York Fund (formerly Voyageur New York Tax Free
Fund)("Tax-Free New York Fund"), a series of the Voyageur Mutual Funds, Inc.
is registered under the Investment Company Act of 1940 (as amended) as a
non-diversified, open-end management investment company. Tax-Free New York
Fund seeks high current income free from both federal and state income taxes
by investing in investment grade municipal bonds. Tax-Free New York Fund
(referred to as a "Fund" ) offers 3 classes of shares.
1. Fund Reorganization
On April 30, 1997, Lincoln National Corporation ("LNC") acquired Voyageur
Fund Manager Inc.'s ("Voyageur") parent, Dougherty Financial Group, Inc.
("DFG") pursuant to an agreement and plan of merger dated January 15, 1997,
in which LNC would acquire DFG including the mutual fund investment advisory
business of DFG conducted by Voyageur. Upon completion of the acquisition,
Delaware Management Company, Inc. ("DMC") became the investment adviser to
the Fund, Delaware Distributors, L.P. ("DDLP") became the distributor for the
Fund, Delaware Service Company, Inc. ("DSC") became the transfer,
dividend-disbursing, shareholder servicing agent and accounting service agent
for the Fund.
2. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund.
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 - The 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 Fund 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 are
accreted to interest income over the lives of the respective securities. The
Fund declares dividends from net investment income daily and pays 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 Fund pays DMC the Investment Manager of the Fund,
an annual fee which is calculated daily at an annual rate of .50% of the
average daily net assets of the Fund.
DMC has elected to waive their fee and reimburse the Fund to the extent that
annual operating expenses exclusive of 12b-1 distribution fees, taxes,
interest, brokerage commissions and extraordinary expenses, exceed 0.75% of
average daily net assets for the Tax-Free New York Fund through December 31,
1997. Total expenses absorbed by DMC for the two month period ended June 30,
1997 were $8,540.
Prior to May 1, 1997, the Fund had an investment advisory and management
agreement with Voyageur. Voyageur received a fee for its investment advisory
and management services based on the average daily net assets of each Fund at
an annual rate of .50%. During the period January 1, 1997 to April 30, 1997,
Voyageur waived $29,741 of the Tax-Free New York Fund.
Commencing May 1, 1997, the Fund has engaged DSC, an affiliate of DMC, to serve
as dividend disbursing and transfer agent for the Fund. For the two month period
ended June 30, 1997 the Fund expensed $3,343 for these services. The Fund also
engaged DSC to provide accounting services for the Fund. For the two month
period ended June 30, 1997, the Fund expensed $635 for these services.
Prior to May 1, 1997, the Fund paid a fee to Voyageur for acting as the
Fund's dividend disbursing, administrative and accounting services agent. The
Fund is also responsible for reimbursing Voyageur's out-of-pocket expense in
connection with the performance of dividend-disbursing, administrative and
accounting services.
On June 30, 1997, the Fund had payables to affiliates as follows:
Investment Management fee
payable to DM............................... $4,066
Dividend disbursing, transfer agent fees,
accounting fees and other expenses payable
to DSC...................................... $1,022
Other expenses payable to DMC and affiliates.. $1,647
Commencing May 1, 1997, and pursuant to the Distribution Agreement, the Fund
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 the two month period ended
June 30, 1997, DDLP earned $136 for commissions on sales of the Tax-Free New
York Fund A Class.
Prior May 1, 1997 each class of shares had a Distribution Agreement with
Voyageur Fund Distributors, Inc. ("VFD"). Under the plan the Fund 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.
1997 semi-annual report 13
<PAGE>
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
4. Investments
During the six month period ended June 30, 1997, the Fund made purchases of
$1,061,187 and sales of $1,809,449 of investment securities other than U.S.
government securities and temporary cash investments.
At June 30, 1997, the aggregate unrealized appreciation (depreciation) of
securities for federal income tax purposes for the Fund were as follows:
Aggregate unrealized appreciation........ $644,619
Aggregate unrealized depreciation........ (3,400)
--------
Net unrealized appreciation.............. $641,219
For federal income tax purposes, the Tax-Free New York Fund had a capital
loss carryover at December 31, 1996 of $22,229 that will expire in 2004 and
2005.
5. Capital Stock
<TABLE>
<CAPTION>
TAX-FREE NEW YORK FUND
--------------------------------------------
Six Months Three Months Year
Ended Ended Ended
6/30/97 12/31/96 9/30/96
(Unaudited)
<S> <C> <C> <C>
Shares sold:
A Class....................................... 11,594 1,014 23,378
B Class....................................... 2,339 6,492 16,347
C Class....................................... 0 0 0
Shares issued upon reinvestment of
dividends from net investment income
and net realized gains from security
transactions:
A Class....................................... 23,119 9,603 44,599
B Class....................................... 482 321 983
C Class....................................... 138 55 216
------- ------- -------
37,672 17,485 85,523
------- ------- -------
Shares repurchased:
A Class....................................... (71,438) (54,492) (181,528)
B Class....................................... (15,819) (24,803) 0
C Class....................................... (22) (7) 0
------- ------- -------
(87,279) (79,302) (181,528)
------- ------- -------
Net Decrease.................................. (49,607) (61,817) (96,005)
======= ======= =======
</TABLE>
6. Concentration of Credit Risk
The Fund concentrates its investments in securities mainly issued by New York
municipalities. The value of these investments may be adversely affected by
new legislation within the state, regional or local economic conditions, and
differing levels of supply and demand for municipal bonds. Many
municipalities insure repayment for their obligations. Although bond
insurance reduces the risk of loss due to default by an issuer, such bonds
remain subject to the risk that market value may fluctuate for other reasons
and there is no assurance that the insurance company will meet its
obligations. These securities have been identified in the Statement of Net
Assets.
The Fund may invest up to 15% of its total assets in illiquid securities
which may include securities with contractual restrictions on resale,
securities exempt from registration under Rule 144A of the Securities Act of
1933, as amended, and other securities which may not be readily marketable.
The relative illiquidity of some of these securities may adversely affect the
Fund's ability to dispose of such securities in a timely manner and at a fair
price when it is necessary to liquidate such securities. These securities, if
any, have been denoted in the Statement of Net Assets.
14 1997 semi-annual report
<PAGE>
VOYAGEUR FUNDS
SHAREHOLDER MEETING RESULTS
- --------------------------------------------------------------------------------
A meeting of the funds' shareholders was held on April 11, 1997. The matters
submitted to a vote of shareholders were the election of new directors and
the approval of a new investment management agreement. Whenever there is a
change in control of an investment manager, the Investment Company Act of
1940 requires shareholders to vote on a new investment management agreement.
TAX-FREE NEW YORK FUND
<TABLE>
<CAPTION>
NUMBER OF VOTES
--------------------------------------------------
FOR AGAINST / WITHHELD ABSTENTIONS
--------------------------------------------------
<S> <C> <C> <C>
Walter P. Babich................................. 562,735 3,886 -
Anthony D. Knerr................................. 562,735 3,886 -
Ann R. Leven..................................... 562,735 3,886 -
W. Thacher Longstreth............................ 562,735 3,886 -
Thomas F. Madison................................ 562,735 3,886 -
Jeffrey J. Nick.................................. 562,735 3,886 -
Charles E. Peck.................................. 562,735 3,886 -
Wayne A. Stork................................... 562,735 3,886 -
Approval of New Investment Management Agreement.. 506,638 19,628 40,353
</TABLE>
1997 semi-annual report 15
<PAGE>
1997 SEMI-ANNUAL REPORT
THIS SEMI-ANNUAL REPORT IS FOR THE INFORMATION OF DELAWARE-VOYAGEUR TAX-FREE NEW
YORK FUND SHAREHOLDERS, BUT IT MAY BE USED WITH PROSPECTIVE INVESTORS WHEN
PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE TAX-FREE NEW YORK FUND,
WHICH SETS FORTH DETAILS ABOUT CHARGES, EXPENSES, INVESTMENT OBJECTIVES AND
OPERATING POLICIES OF THE 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.
INVESTMENT MANAGER
Delaware Management Company, Inc.
Philadelphia
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING AND
TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia
1818 Market Street
Philadelphia, PA 19103-3682
FOR SHAREHOLDERS
1.800.523.1918
FOR SECURITIES DEALERS
1.800.362.7500
FOR FINANCIAL INSTITUTIONS
REPRESENTATIVES
1.800.659.2265
Be sure to consult your financial adviser when making investments. Mutual
funds can be a valuable part of your financial plan: however, shares of the
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.
DELAWARE
GROUP
- --------
Philadelphia o London
Printed in the USA on
recycled paper
(133)
SA-VOYNY [6/97] PP8/97
