UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-3850
Exact name of registrant as specified in charter: Delaware Group Tax-Free Fund
Address of principal executive offices:
2005 Market Street
Philadelphia, PA 19103
Name and address of agent for service:
David F. Connor, Esq.
2005 Market Street
Philadelphia, PA 19103
Registrant’s telephone number, including area code: (800) 523-1918
Date of fiscal year end: August 31
Date of reporting period: February 28, 2007
Item 1. Reports to Stockholders
The Registrant's shareholder reports are combined with the shareholder reports of other investment company registrants. This Form N-CSR pertains to the DELAWARE TAX-FREE USA INTERMEDIATE FUND and DELWARE TAX-FREE USA FUND of the Registrant, information on which is included in the following shareholder reports.
| ||
Semiannual Report | Delaware | |
Tax-Free USA Fund | ||
Delaware | ||
Tax-Free USA Intermediate | ||
Fund | ||
Delaware | ||
National High-Yield Municipal | ||
Bond Fund | ||
February 28, 2007 | ||
|
Fixed income mutual funds
Table of contents
> Disclosure of Fund expenses | 1 | ||
> Sector allocations and credit quality breakdowns | 3 | ||
> Statements of net assets | 5 | ||
> Statements of operations | 25 | ||
> Statements of changes in net assets | 26 | ||
> Financial highlights | 27 | ||
> Notes to financial statements | 36 | ||
> About the organization | 44 |
Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.
Mutual fund advisory services provided by Delaware Management Company, a series of Delaware Management
Business Trust, which is a registered investment advisor.
© 2007 Delaware Distributors, L.P.
Disclosure of Fund expenses
For the period September 1, 2006 to February 28, 2007
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. These following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period September 1, 2006 to February 28, 2007.
Actual Expenses
The first section of the tables shown, “Actual Fund Return,” provides information about actual account values and actual expenses. You may use the information in this section of the table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second section of the tables shown, “Hypothetical 5% Return,” provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The Funds’ actual expenses shown in the tables reflect fee waivers in effect. The expenses shown in each table assume reinvestment of all dividends and distributions.
In each case, “Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Delaware Tax-Free USA Fund
Expense Analysis of an Investment of $1,000
Expenses | ||||||||
Beginning | Ending | Paid During | ||||||
Account | Account | Annualized | Period | |||||
Value | Value | Expense | 9/1/06 to | |||||
9/1/06 | 2/28/07 | Ratio | 2/28/07 | |||||
Actual Fund Return | ||||||||
Class A | $1,000.00 | $1,030.10 | 0.88% | $4.43 | ||||
Class B | 1,000.00 | 1,025.30 | 1.64% | 8.24 | ||||
Class C | 1,000.00 | 1,026.20 | 1.64% | 8.24 | ||||
Hypothetical 5% Return (5% return before expenses) | ||||||||
Class A | $1,000.00 | $1,020.43 | 0.88% | $4.41 | ||||
Class B | 1,000.00 | 1,016.66 | 1.64% | 8.20 | ||||
Class C | 1,000.00 | 1,016.66 | 1.64% | 8.20 |
Delaware Tax-Free USA Intermediate Fund
Expense Analysis of an Investment of $1,000
Expenses | ||||||||
Beginning | Ending | Paid During | ||||||
Account | Account | Annualized | Period | |||||
Value | Value | Expense | 9/1/06 to | |||||
9/1/06 | 2/28/07 | Ratio | 2/28/07 | |||||
Actual Fund Return | ||||||||
Class A | $1,000.00 | $1,025.50 | 0.76% | $3.82 | ||||
Class B | 1,000.00 | 1,021.20 | 1.61% | 8.07 | ||||
Class C | 1,000.00 | 1,020.40 | 1.61% | 8.07 | ||||
Hypothetical 5% Return (5% return before expenses) | ||||||||
Class A | $1,000.00 | $1,021.03 | 0.76% | $3.81 | ||||
Class B | 1,000.00 | 1,016.81 | 1.61% | 8.05 | ||||
Class C | 1,000.00 | 1,016.81 | 1.61% | 8.05 |
(continues) 1
Disclosure of Fund expenses
Delaware National High-Yield Municipal Bond Fund
Expense Analysis of an Investment of $1,000
Expenses | ||||||||
Beginning | Ending | Paid During | ||||||
Account | Account | Annualized | Period | |||||
Value | Value | Expense | 9/1/06 to | |||||
9/1/06 | 2/28/07 | Ratio | 2/28/07 | |||||
Actual Fund Return | ||||||||
Class A | $1,000.00 | $1,035.00 | 0.92% | $4.64 | ||||
Class B | 1,000.00 | 1,031.10 | 1.67% | 8.41 | ||||
Class C | 1,000.00 | 1,031.00 | 1.67% | 8.41 | ||||
Hypothetical 5% Return (5% return before expenses) | ||||||||
Class A | $1,000.00 | $1,020.23 | 0.92% | $4.61 | ||||
Class B | 1,000.00 | 1,016.51 | 1.67% | 8.35 | ||||
Class C | 1,000.00 | 1,016.51 | 1.67% | 8.35 |
2
Sector allocations and credit quality breakdowns
As of February 28, 2007
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware Tax-Free USA Fund | |
Percentage | |
Sector | of Net Assets |
Municipal Bonds | 97.06% |
Corporate Revenue Bonds | 7.87% |
Education Revenue Bonds | 6.58% |
Electric Revenue Bonds | 5.61% |
Escrowed to Maturity Bonds | 6.45% |
Health Care Revenue Bonds | 18.58% |
Housing Revenue Bonds | 2.24% |
Lease Revenue Bonds | 5.07% |
Local General Obligation Bonds | 7.40% |
Pre-Refunded Bonds | 10.61% |
Special Tax Bonds | 6.24% |
State General Obligation Bonds | 10.20% |
Transportation Revenue Bonds | 4.59% |
Water & Sewer Revenue Bonds | 5.62% |
Variable Rate Demand Notes | 1.19% |
Total Value of Securities | 98.25% |
Receivables and Other Assets Net of Liabilities | 1.75% |
Total Net Assets | 100.00% |
Credit Quality Breakdown | |
(as a % of fixed income investments) | |
AAA | 44.24% |
AA | 19.12% |
A | 9.49% |
BBB | 20.12% |
BB | 1.10% |
NR | 5.93% |
Total | 100.00% |
Delaware Tax-Free USA Intermediate Fund | |
Percentage | |
Sector | of Net Assets |
Municipal Bonds | 97.48% |
Corporate Revenue Bonds | 5.33% |
Education Revenue Bonds | 8.76% |
Electric Revenue Bonds | 5.47% |
Escrowed to Maturity Bonds | 0.07% |
Health Care Revenue Bonds | 15.22% |
Housing Revenue Bonds | 0.47% |
Lease Revenue Bonds | 4.56% |
Local General Obligation Bonds | 12.37% |
Pre-Refunded Bonds | 7.79% |
Resource Recovery Bonds | 0.57% |
Special Tax Bonds | 8.77% |
State General Obligation Bonds | 19.29% |
Transportation Revenue Bonds | 5.06% |
Water & Sewer Revenue Bonds | 3.75% |
Variable Rate Demand Notes | 1.93% |
Total Value of Securities | 99.41% |
Receivables and Other Assets Net of Liabilities | 0.59% |
Total Net Assets | 100.00% |
Credit Quality Breakdown | |
(as a % of fixed income investments) | |
AAA | 44.77% |
AA | 20.03% |
A | 15.97% |
BBB | 12.33% |
BB | 0.46% |
NR | 6.44% |
Total | 100.00% |
(continues) 3
Sector allocations and credit quality breakdowns
As of February 28, 2007
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware National High-Yield Municipal Bond Fund
Percentage | |
Sector | of Net Assets |
Municipal Bonds | 97.27% |
Corporate Revenue Bonds | 15.67% |
Education Revenue Bonds | 13.32% |
Health Care Revenue Bonds | 31.16% |
Lease Revenue Bonds | 3.23% |
Local General Obligation Bonds | 11.80% |
Pre-Refunded Bonds | 14.12% |
Special Tax Bonds | 4.63% |
Transportation Revenue Bonds | 3.34% |
Total Value of Securities | 97.27% |
Receivables and Other Assets Net of Liabilities | 2.73% |
Total Net Assets | 100.00% |
Credit Quality Breakdown | |
(as a % of fixed income investments) | |
AAA | 7.81% |
A | 7.19% |
BBB | 30.92% |
BB | 3.82% |
B | 1.23% |
NR | 49.03% |
Total | 100.00% |
4
Statements of net assets
Delaware Tax-Free USA Fund
February 28, 2007 (Unaudited)
Principal | |||
Amount | Value | ||
Municipal Bonds – 97.06% | |||
Corporate Revenue Bonds – 7.87% | |||
Brazos, Texas River Authority | |||
Pollution Control Revenue | |||
(Texas Utilities) | |||
5.40% 5/1/29 (AMT) | $3,000,000 | $ 3,091,920 | |
•(TXU Energy Co. Project) | |||
Series B 6.30% 7/1/32 (AMT) | 3,500,000 | 3,777,900 | |
Cloquet, Minnesota Pollution | |||
Control Revenue (Potlatch Corp. | |||
Project) 5.90% 10/1/26 | 1,695,000 | 1,739,901 | |
‡@Columbus, Kansas Industrial Revenue | |||
(ACE Electrical Acquisition) | |||
7.00% 8/1/17 (AMT) | 800,000 | 240,000 | |
Connecticut State Development | |||
Authority Pollution Control | |||
Revenue (Connecticut Light & | |||
Power) Series A 5.85% 9/1/28 | 4,000,000 | 4,201,960 | |
Indianapolis, Indiana Airport Authority | |||
Revenue Special Facilities (Federal | |||
Express Corp. Project) | |||
5.10% 1/15/17 (AMT) | 2,750,000 | 2,925,230 | |
Series 1998 5.50% 5/1/29 (AMT) | 2,000,000 | 2,045,300 | |
Mason County, West Virginia | |||
Pollution Control Revenue | |||
(Appalachian Power Co. Project) | |||
Series K 6.05% 12/1/24 | |||
(AMBAC) | 3,000,000 | 3,206,100 | |
Mississippi Business Finance | |||
Corporation Pollution Control | |||
Revenue (System Energy | |||
Resources, Inc. Project) | |||
5.90% 5/1/22 | 3,000,000 | 3,032,100 | |
Petersburg, Indiana Pollution | |||
Control Revenue (Indianapolis | |||
Power & Light Co. Project) | |||
6.375% 11/1/29 (AMT) | 5,000,000 | 5,433,250 | |
Phenix City, Alabama Industrial | |||
Development Board Environmental | |||
Improvement Revenue (Mead | |||
Westvaco Corp. Project) Series A | |||
6.35% 5/15/35 (AMT) | 3,000,000 | 3,233,040 | |
•Port Morrow, Oregon Pollution | |||
Control Revenue (Portland | |||
General Electric Co.) Series A | |||
5.20% 5/1/33 | 2,600,000 | 2,665,364 | |
Puerto Rico Industrial, Medical & | |||
Environmental Pollution Control | |||
Facilities Financing Authority | |||
Revenue (PepsiCo Inc. Project) | |||
6.25% 11/15/13 | 1,250,000 | 1,293,325 | |
Richmond County, Georgia | |||
Development Authority | |||
Environmental Improvement | |||
Revenue (International Paper Co.) | |||
Series B 5.95% 11/15/25 (AMT) | 5,000,000 | 5,325,950 | |
South Carolina Jobs Economic | |||
Development Authority | |||
Industrial Revenue (South | |||
Carolina Electric & Gas Co. | |||
Project) Series B 5.45% 11/1/32 | |||
(AMBAC) (AMT) | 500,000 | 534,385 | |
Suffolk County, New York Industrial | |||
Development Agency Revenue | |||
(Keyspan-Port Jefferson Energy | |||
Center) 5.25% 6/1/27 (AMT) | 3,500,000 | 3,704,120 | |
Sugar Creek, Missouri Industrial | |||
Development Revenue (Lafarge | |||
North America Project) Series A | |||
5.65% 6/1/37 (AMT) | 500,000 | 532,355 | |
Sweetwater County, Wyoming | |||
Solid Waste Disposal | |||
Revenue (FMC Corp. Project) | |||
5.60% 12/1/35 (AMT) | 5,000,000 | 5,349,300 | |
52,331,500 | |||
Education Revenue Bonds – 6.58% | |||
Amherst, New York Industrial | |||
Development Agency Civic | |||
Facilities Revenue (UBF Faculty | |||
Student Housing) Series A | |||
5.75% 8/1/30 (AMBAC) | 1,300,000 | 1,407,445 | |
Illinois Financial Authority Revenue | |||
(Illinois Institute of Technology) | |||
Series A 5.00% 4/1/36 | 2,600,000 | 2,725,684 | |
Massachusetts State Development | |||
Finance Agency Revenue | |||
(Massachusetts College of | |||
Pharmacy Project) Series C | |||
5.75% 7/1/33 | 500,000 | 541,625 | |
Massachusetts State Health & | |||
Educational Facilities Authority | |||
Revenue (Nichols College | |||
Project) Series C | |||
6.00% 10/1/17 | 908,000 | 962,271 | |
6.125% 10/1/29 | 1,000,000 | 1,055,970 | |
Milledgeville-Baldwin County, | |||
Georgia Development Authority | |||
Revenue (Georgia College & | |||
State University Foundation | |||
Project) 6.00% 9/1/33 | 1,000,000 | 1,112,640 | |
Missouri State Health & Educational | |||
Facilities Authority Educational | |||
Facilities Revenue (University of | |||
Health Sciences) | |||
5.00% 6/1/31 (MBIA) | 1,000,000 | 1,037,750 |
(continues) 5
Statements of net assets
Delaware Tax-Free USA Fund
Principal | |||
Amount | Value | ||
Municipal Bonds (continued) | |||
Education Revenue Bonds (continued) | |||
New Hampshire Higher Educational | |||
& Health Facilities Authority | |||
Revenue (New Hampton School | |||
Issue) 5.375% 10/1/28 | $ 3,070,000 | $ 3,156,512 | |
New Jersey State Educational | |||
Facilities Authority Revenue | |||
(Stevens Institute of Technology) | |||
Series B 5.25% 7/1/24 | 2,085,000 | 2,223,319 | |
New York City, New York Industrial | |||
Development Agency Civic | |||
Facilities Revenue (Vaughn | |||
College Aeronautics) Series B | |||
5.00% 12/1/31 | 1,510,000 | 1,513,926 | |
5.25% 12/1/36 | 1,420,000 | 1,451,993 | |
North Carolina Capital Facilities | |||
Financial Agency Revenue | |||
(Duke University Project) | |||
Series A 5.00% 10/1/44 | 3,625,000 | 3,874,037 | |
Series B 4.25% 7/1/42 | 2,375,000 | 2,313,393 | |
Oregon Health & Science University | |||
Revenue (Capital Appreciation | |||
Insured) Series A | |||
5.00% 7/1/32 (MBIA) | 2,000,000 | 2,104,240 | |
^5.50% 7/1/21 (MBIA) | 2,000,000 | 1,112,780 | |
Oregon State Facilities Authority | |||
Revenue Series A | |||
(College Housing Northwest | |||
Project) 5.45% 10/1/32 | 1,000,000 | 1,034,880 | |
(College Independent | |||
Student Housing Project) | |||
5.25% 7/1/30 (XLCA) | 1,630,000 | 1,765,404 | |
(Linfield College Project) | |||
5.00% 10/1/30 | 600,000 | 630,318 | |
Pennsylvania State Higher | |||
Educational Facilities Authority | |||
Revenue (Widener University) | |||
5.375% 7/15/29 | 1,000,000 | 1,069,160 | |
Saint Louis, Missouri Industrial | |||
Development Authority Revenue | |||
(Confluence Academy Project) | |||
Series A | |||
5.25% 6/15/25 | 1,150,000 | 1,170,022 | |
5.35% 6/15/32 | 2,300,000 | 2,333,925 | |
University of Texas Revenue (FING | |||
System) Series B 5.00% 8/15/37 | 7,070,000 | 7,556,274 | |
University of the Virgin Islands | |||
Series A 5.375% 6/1/34 | 500,000 | 536,470 | |
Vermont University & State | |||
Agriculture College | |||
5.125% 10/1/37 (AMBAC) | 1,000,000 | 1,054,300 | |
43,744,338 | |||
Electric Revenue Bonds – 5.61% | |||
Chelan County, Washington | |||
Public Utilities District #001 | |||
Consolidated Revenue (Chelan | |||
Hydro System) Series A | |||
5.45% 7/1/37 (AMBAC) (AMT) | 5,000,000 | 5,322,800 | |
Emerald Peoples, Oregon | |||
Utilities District Series A | |||
5.25% 11/1/22 (FSA) | 750,000 | 809,873 | |
Missouri Joint Municipal Electric | |||
Utilities Commission Revenue | |||
Power Project (Plum Point | |||
Project) 5.00% 1/1/34 (MBIA) | 7,000,000 | 7,487,060 | |
Missouri State Environmental | |||
Improvement & Energy Resource | |||
Authority Pollution Control | |||
Revenue Refunding (St. Joseph | |||
Light & Power Company Project) | |||
5.85% 2/1/13 (AMBAC) | 2,200,000 | 2,214,938 | |
Orlando, Florida Utilities | |||
Commission Water & Electric | |||
Revenue 5.25% 10/1/20 | 925,000 | 990,185 | |
Puerto Rico Electric Power | |||
Authority Power Revenue | |||
Series II 5.25% 7/1/31 | 6,000,000 | 6,383,400 | |
Series NN 5.125% 7/1/29 | 1,400,000 | 1,478,946 | |
Series PP 5.00% 7/1/25 (FGIC) | 1,000,000 | 1,071,900 | |
Richmond, Virginia Public Utilities | |||
Revenue 5.00% 1/15/27 (FSA) | 10,000,000 | 10,447,999 | |
Sikeston, Missouri Electric Revenue | |||
Refunding 6.00% 6/1/13 (MBIA) | 1,000,000 | 1,129,460 | |
37,336,561 | |||
Escrowed to Maturity Bonds – 6.45% | |||
Cape Girardeau County, Missouri | |||
Industrial Development | |||
Authority Health Care Facilities | |||
Revenue (Southeast Missouri | |||
Hospital) 5.25% 6/1/16 (MBIA) | 440,000 | 478,170 | |
^Greene County, Missouri Single | |||
Family Mortgage Revenue | |||
Municipal Multiplier (Private | |||
Mortgage Insurance) | |||
6.10% 3/1/16 | 1,225,000 | 864,262 | |
Liberty, Missouri Sewer System | |||
Revenue 6.00% 2/1/08 (MBIA) | 130,000 | 132,185 | |
Louisiana Public Facilities Authority | |||
Hospital Revenue (Southern | |||
Baptist Hospital, Inc. Project) | |||
8.00% 5/15/12 | 4,930,000 | 5,458,693 | |
Missouri State Health & Educational | |||
Facilities Authority Health | |||
Facilities Revenue Refunding | |||
(SSM Health Care) Series AA | |||
6.40% 6/1/10 (MBIA) | 500,000 | 541,125 |
6
Principal | |||
Amount | Value | ||
Municipal Bonds (continued) | |||
Escrowed to Maturity Bonds (continued) | |||
New Jersey State Highway | |||
Authority Garden State | |||
Parkway General Revenue | |||
(Senior Parkway) | |||
5.50% 1/1/14 (FGIC) | $ 5,000,000 | $ 5,553,700 | |
5.50% 1/1/15 (FGIC) | 7,310,000 | 8,206,060 | |
5.50% 1/1/16 (FGIC) | 1,000,000 | 1,133,420 | |
Oklahoma State Turnpike | |||
Authority Revenue (First Senior) | |||
6.00% 1/1/22 | 13,535,000 | 16,757,413 | |
Umatilla County, Oregon Hospital | |||
Facility Authority Revenue | |||
(Catholic Health Initiatives) | |||
Series A 5.50% 3/1/32 | 1,000,000 | 1,069,340 | |
Virgin Islands Public Finance | |||
Authority Revenue Series A | |||
7.30% 10/1/18 | 2,200,000 | 2,729,848 | |
42,924,216 | |||
Health Care Revenue Bonds – 18.58% | |||
Akron Bath Copley, Ohio | |||
Joint Township Hospital | |||
District Revenue (Summa | |||
Health System) Series A | |||
5.25% 11/15/31 (RADIAN) | 3,000,000 | 3,194,340 | |
California Statewide Communities | |||
Development Authority | |||
Revenue (Kaiser Permenante) | |||
5.25% 3/1/45 | 8,500,000 | 9,068,395 | |
Cape Girardeau County, Missouri | |||
Industrial Development Authority | |||
Health Care Facilities Revenue | |||
Unrefunded Balance | |||
(Southeast Missouri Hospital) | |||
5.25% 6/1/16 (MBIA) | 560,000 | 603,299 | |
(St. Francis Medical Center) | |||
Series A 5.50% 6/1/32 | 1,000,000 | 1,069,630 | |
Chatham County, Georgia Hospital | |||
Authority Revenue (Memorial | |||
Health Medical Center) Series A | |||
6.125% 1/1/24 | 1,000,000 | 1,093,540 | |
Cleveland-Cuyahoga County, Ohio | |||
Port Authority Revenue Senior | |||
Housing (St. Clarence-Geac) | |||
Series A 6.25% 5/1/38 | 1,500,000 | 1,556,370 | |
Colorado Health Facilities Authority | |||
Revenue (Evangelical Lutheran) | |||
Series A 5.25% 6/1/34 | 4,275,000 | 4,488,921 | |
Cumberland County, Pennsylvania | |||
Municipal Authority Revenue | |||
(Diakon Lutheran Ministries | |||
Project) 5.00% 1/1/36 | 2,570,000 | 2,668,020 | |
Cuyahoga County, Ohio Revenue | |||
(Cleveland Clinic Health | |||
Systems) Series A 5.50% 1/1/29 | 7,500,000 | 8,087,175 | |
Duluth, Minnesota Economic | |||
Development Authority | |||
Health Care Facilities Revenue | |||
(Benedictine Health System St. | |||
Mary’s Hospital) 5.25% 2/15/33 | 5,000,000 | 5,254,000 | |
Florence County, South Carolina | |||
Hospital Revenue (McLeod | |||
Regional Medical Center Project) | |||
Series A 5.25% 11/1/27 (FSA) | 3,355,000 | 3,626,151 | |
Gainesville & Hall County, Georgia | |||
Development Authority Revenue | |||
Senior Living Facilities (Lanier | |||
Village Estates Project) Series C | |||
7.25% 11/15/29 | 1,000,000 | 1,086,750 | |
Henrico County, Virginia Economic | |||
Development Authority Revenue | |||
(Bon Secours Health System, | |||
Inc.) Series A 5.60% 11/15/30 | 3,140,000 | 3,344,791 | |
Highlands County, Florida Health | |||
Facilities Authority Revenue | |||
(Adventist Health System) | |||
Series C 5.25% 11/15/36 | 3,500,000 | 3,742,865 | |
Illinois Health Facilities | |||
Authority Revenue (Elmhurst | |||
Memorial Healthcare Project) | |||
5.625% 1/1/28 | 2,000,000 | 2,138,140 | |
Jacksonville, Florida Economic | |||
Development Community | |||
Health Care Facilities Revenue | |||
(Mayo Clinic) 5.00% 11/15/36 | 7,000,000 | 7,404,600 | |
Johnson City, Tennessee Health | |||
and Educational Facilities Board | |||
Hospital Revenue First Mortgage | |||
(Mountain States Health) | |||
Series A 5.50% 7/1/36 | 3,000,000 | 3,233,670 | |
Joplin, Missouri Industrial | |||
Development Authority Health | |||
Facilities Revenue (Freeman | |||
Health System Project) | |||
5.375% 2/15/35 | 255,000 | 271,488 | |
5.75% 2/15/35 | 405,000 | 445,249 | |
Knox County, Tennessee Health | |||
Educational & Housing Facilities | |||
Board Hospital Revenue (East | |||
Tennessee Hospital Project) | |||
Series B 5.75% 7/1/33 | 1,000,000 | 1,075,650 | |
Louisiana Public Facilities Authority | |||
Revenue (Ochsner Clinic | |||
Foundation Project) Series B | |||
5.50% 5/15/32 | 1,500,000 | 1,596,990 | |
Lucas County, Ohio Health Care | |||
Facility Revenue (Sunset | |||
Retirement Communities) | |||
Series A 6.625% 8/15/30 | 2,000,000 | 2,149,020 |
(continues) 7
Statements of net assets
Delaware Tax-Free USA Fund
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Health Care Revenue Bonds (continued) | ||||||
Massachusetts State Health & | ||||||
Educational Facilities Authority | ||||||
Revenue (Milford Regional | ||||||
Medical Center Issue) Series E | ||||||
5.00% 7/15/32 | $ | 2,000,000 | $ | 2,077,060 | ||
Michigan State Hospital Finance | ||||||
Authority Revenue | ||||||
(Ascension Health Credit Group) | ||||||
Series B 5.25% 11/15/26 | 3,500,000 | 3,734,395 | ||||
(Oakwood Obligation Group) | ||||||
Series A 5.75% 4/1/32 | 2,500,000 | 2,702,775 | ||||
(Trinity Health Credit) | ||||||
Series C 5.375% 12/1/30 | 6,000,000 | 6,409,080 | ||||
Missouri State Health & Educational | ||||||
Facilities Authority Health | ||||||
Facilities Revenue Refunding | ||||||
(Lake Regional Health System | ||||||
Project) 5.70% 2/15/34 | 500,000 | 537,095 | ||||
Montgomery County, Pennsylvania | ||||||
Industrial Development | ||||||
Authority Revenue (Acts | ||||||
Retirement Communities) | ||||||
Series A 4.50% 11/15/36 | 2,000,000 | 1,950,240 | ||||
Multnomah County, Oregon | ||||||
Hospital Facilities Authority | ||||||
Revenue (Providence Health | ||||||
System) 5.25% 10/1/22 | 3,500,000 | 3,785,075 | ||||
New Jersey Health Care Facilities | ||||||
Financing Authority Revenue | ||||||
(St. Barnabas Health Care | ||||||
System) Series A 5.00% 7/1/29 | 3,060,000 | 3,185,338 | ||||
New York State Dormitory | ||||||
Authority Revenue (Catholic | ||||||
Health Services of Long | ||||||
Island-St. Francis Hospital | ||||||
Project) 5.10% 7/1/34 | 2,500,000 | 2,599,875 | ||||
North Carolina Medical Care | ||||||
Commission Health Care | ||||||
Facilities Revenue | ||||||
(First Mortgage-Presbyterian | ||||||
Homes) 5.40% 10/1/27 | 4,000,000 | 4,170,080 | ||||
(Pennybryn at Mayfield Project) | ||||||
Series A 6.125% 10/1/35 | 6,000,000 | 6,406,020 | ||||
North Carolina Medical Care | ||||||
Commission Hospital Revenue | ||||||
(Northeast Medical Center | ||||||
Project) 5.125% 11/1/34 | 1,250,000 | 1,318,825 | ||||
North Kansas City, Missouri | ||||||
Hospital Revenue Series A | ||||||
5.00% 11/15/28 (FSA) | 500,000 | 529,460 | ||||
Prince William County, Virginia | ||||||
Industrial Development | ||||||
Authority Hospital Revenue | ||||||
(Potomac Hospital Corp.) | ||||||
5.35% 10/1/36 | 1,750,000 | 1,885,800 | ||||
Puerto Rico Industrial, Tourist, | ||||||
Educational, Medical & | ||||||
Environmental Control Facilities | ||||||
(Hospital Auxilio Mutuo | ||||||
Obligated Group) Series A | ||||||
6.25% 7/1/24 (MBIA) | 1,200,000 | 1,208,772 | ||||
Shelby County, Tennessee Health | ||||||
Educational & Housing Facilities | ||||||
Board Revenue (Trezevant | ||||||
Manor Project) Series A | ||||||
5.625% 9/1/26 | 2,500,000 | 2,585,150 | ||||
South Carolina Jobs-Economic | ||||||
Development Authority Hospital | ||||||
Revenue (Hampton Regional | ||||||
Medical Center Project) | ||||||
5.25% 11/1/36 | 5,000,000 | 4,992,150 | ||||
South Miami, Florida Health | ||||||
Facilities Authority Hospital | ||||||
Revenue (Baptist Health South | ||||||
Florida Group) 5.25% 11/15/33 | 4,000,000 | 4,220,280 | ||||
University Colorado Hospital | ||||||
Authority Revenue Series A | ||||||
5.25% 11/15/39 | 2,000,000 | 2,111,980 | ||||
123,608,504 | ||||||
Housing Revenue Bonds – 2.24% | ||||||
Franklin County, Ohio Multi Family | ||||||
Revenue (Alger Green) Series A | ||||||
5.80% 5/20/44 (GNMA) (AMT) | 1,150,000 | 1,218,644 | ||||
Illinois Development Finance | ||||||
Authority Revenue (Section 8) | ||||||
Series A 5.80% 7/1/28 (MBIA) | 2,790,000 | 2,857,296 | ||||
Illinois Housing Development Authority | ||||||
Multi Family Revenue (Crystal | ||||||
Lake Preservation) Series A-1 | ||||||
5.80% 12/20/41 (GNMA) | 2,000,000 | 2,147,260 | ||||
Milwaukee, Wisconsin | ||||||
Redevelopment Authority | ||||||
Multifamily Revenue (City Hall | ||||||
Square) 6.30% 8/1/38 | ||||||
(FHA) (AMT) | 1,455,000 | 1,496,147 | ||||
Missouri State Housing Development | ||||||
Commission Mortgage Revenue | ||||||
Single Family Homeowner | ||||||
Loan A 5.20% 9/1/33 (GNMA) | ||||||
(FNMA) (AMT) | 270,000 | 278,837 | ||||
Loan A 7.20% 9/1/26 (GNMA) | ||||||
(FNMA) (AMT) | 60,000 | 60,470 | ||||
Loan B 7.55% 9/1/27 (GNMA) | ||||||
(FNMA) (AMT) | 15,000 | 15,246 | ||||
Loan C 7.25% 9/1/26 (GNMA) | ||||||
(FNMA) (AMT) | 85,000 | 86,256 | ||||
Loan C 7.45% 9/1/27 (GNMA) | ||||||
(FNMA) (AMT) | 90,000 | 91,447 |
8
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Housing Revenue Bonds (continued) | ||||||
Missouri State Housing | ||||||
Development Commission | ||||||
Multifamily Housing Revenue | ||||||
(Hyder) Series 3 5.60% 7/1/34 | ||||||
(FHA) (AMT) | $ | 1,435,000 | $ | 1,510,395 | ||
(San Remo) Series 5 5.45% 1/1/36 | ||||||
(FHA) (AMT) | 500,000 | 524,130 | ||||
New Mexico Mortgage Finance | ||||||
Authority Revenue | ||||||
Series B Class III 6.75% 7/1/25 | ||||||
(GNMA) (FNMA) | 220,000 | 225,938 | ||||
Series E 6.95% 1/1/26 | ||||||
(GNMA) (FNMA) | 185,000 | 187,683 | ||||
North Dakota State Housing | ||||||
Finance Agency Multifamily | ||||||
Revenue Series A | ||||||
6.15% 12/1/17 (FNMA) | 850,000 | 858,670 | ||||
Oregon Health, Housing, Educational, | ||||||
& Cultural Facilities Authority | ||||||
(Pier Park Project) Series A | ||||||
6.05% 4/1/18 (GNMA) (AMT) | 1,095,000 | 1,097,102 | ||||
Oregon State Housing & | ||||||
Community Services | ||||||
Department Mortgage Revenue | ||||||
Single Family Mortgage Program | ||||||
Series R 5.375% 7/1/32 (AMT) | 985,000 | 1,014,087 | ||||
Santa Fe, New Mexico Single Family | ||||||
Mortgage Revenue Series B-1 | ||||||
6.20% 11/1/16 (GNMA) | ||||||
(FNMA) (AMT) | 165,000 | 165,587 | ||||
St. Louis County, Missouri Industrial | ||||||
Development Authority | ||||||
Housing Development Revenue | ||||||
Refunding (Southfield & | ||||||
Oak Forest Apartment-A) | ||||||
5.20% 1/20/36 (GNMA) | 1,000,000 | 1,036,910 | ||||
14,872,105 | ||||||
Lease Revenue Bonds – 5.07% | ||||||
California State Public Works Board | ||||||
Lease Revenue (Department | ||||||
of General Services-Butterfield | ||||||
Street) Series A 5.25% 6/1/30 | 2,750,000 | 2,962,493 | ||||
Loudoun County, Virginia Industrial | ||||||
Development Authority Public | ||||||
Safety Facility Lease Revenue | ||||||
Series A 5.25% 12/15/23 (FSA) | 700,000 | 760,396 | ||||
Missouri State Development | ||||||
Finance Board Infrastructure | ||||||
Facilities Revenue | ||||||
(Branson Landing Project) Series A | ||||||
5.25% 12/1/19 | 1,435,000 | 1,514,556 | ||||
5.50% 12/1/24 | 2,480,000 | 2,660,494 | ||||
5.625% 12/1/28 | 2,930,000 | 3,162,056 | ||||
(Triumph Foods Project) Series A | ||||||
5.25% 3/1/25 | 500,000 | 523,720 | ||||
(Sewer System Improvement | ||||||
Project) Series C 5.00% 3/1/25 | 605,000 | 629,484 | ||||
Oregon State Department of | ||||||
Administrative Services | ||||||
Certificates of Participation | ||||||
Refunding Revenue Series C | ||||||
5.25% 11/1/15 (MBIA) | 1,000,000 | 1,068,450 | ||||
Puerto Rico Commonwealth | ||||||
Industrial Development Company | ||||||
General Purpose Revenue Series B | ||||||
5.375% 7/1/16 | 1,000,000 | 1,024,390 | ||||
Puerto Rico Public Buildings | ||||||
Authority Revenue (Guaranteed | ||||||
Government Facilities) | ||||||
Series I 5.25% 7/1/33 | 12,000,000 | 12,886,320 | ||||
•Series J 5.00% 7/1/36 (AMBAC) | 2,000,000 | 2,119,400 | ||||
St. Charles County, Missouri | ||||||
Public Water Supply District #2 | ||||||
Revenue Certificate of | ||||||
Participation (Missouri Project) | ||||||
Series A 5.25% 12/1/28 (MBIA) | 1,000,000 | 1,055,380 | ||||
Series B 5.10% 12/1/25 (MBIA) | 500,000 | 514,885 | ||||
St. Louis, Missouri Junior College | ||||||
District Leasehold Revenue | ||||||
5.00% 3/1/23 (AMBAC) | 1,000,000 | 1,071,840 | ||||
^St. Louis, Missouri Industrial | ||||||
Development Authority | ||||||
Leasehold Revenue (Convention | ||||||
Center Hotel) | ||||||
5.80% 7/15/20 (AMBAC) | 3,035,000 | 1,754,018 | ||||
33,707,882 | ||||||
Local General Obligation Bonds – 7.40% | ||||||
Boerne, Texas Independent School | ||||||
District Building | ||||||
5.25% 2/1/27 (PSF) | 4,000,000 | 4,274,360 | ||||
5.25% 2/1/29 (PSF) | 2,960,000 | 3,159,800 | ||||
Des Peres, Missouri Refunding | ||||||
5.375% 2/1/20 (AMBAC) | 1,000,000 | 1,110,850 | ||||
Greene County, Missouri | ||||||
Reorganization School District | ||||||
R8 (Direct Deposit Project) | ||||||
5.10% 3/1/22 (FSA) | 1,500,000 | 1,579,920 | ||||
Henderson, Nevada Local | ||||||
Improvement Districts #T-18 | ||||||
5.30% 9/1/35 | 3,475,000 | 3,539,635 | ||||
Jefferson County, Oregon School | ||||||
District #509J 5.00% 6/15/22 (FGIC) | 500,000 | 525,330 | ||||
Lammersville, California School | ||||||
District Community Facilities | ||||||
District #2002 (Mountain | ||||||
House) 5.125% 9/1/35 | 4,125,000 | 4,262,981 |
(continues) 9
Statements of net assets
Delaware Tax-Free USA Fund
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Local General Obligation Bonds (continued) | ||||||
Lane County, Oregon School | ||||||
District #19 (Springfield) | ||||||
Refunding 6.00% 10/15/14 (FGIC) | $ | 500,000 | $ | 576,500 | ||
Lewisville, Texas Independent School | ||||||
District 6.15% 8/15/21 (PSF) | 75,000 | 79,181 | ||||
Lincoln County, Oregon School | ||||||
District 5.25% 6/15/12 (FGIC) | 700,000 | 723,646 | ||||
Melrose Park, Illinois Tax Increment | ||||||
Series B 6.00% 12/15/19 (FSA) | 1,250,000 | 1,348,825 | ||||
Missouri State Development | ||||||
Finance Board Infrastructure | ||||||
Facilities Revenue (Crackerneck | ||||||
Creek Project) Series C | ||||||
5.00% 3/1/26 | 500,000 | 522,215 | ||||
New York City, New York | ||||||
Series G 5.00% 12/1/33 | 4,900,000 | 5,175,233 | ||||
Series H 6.125% 8/1/25 | 315,000 | 321,045 | ||||
Series I 5.00% 8/1/21 | 2,500,000 | 2,661,625 | ||||
Series I 5.125% 3/1/23 | 5,875,000 | 6,239,367 | ||||
Series J 5.00% 3/1/35 | 4,000,000 | 4,231,040 | ||||
Series J 5.25% 6/1/28 | 4,950,000 | 5,296,352 | ||||
Portland River, Oregon | ||||||
District Urban Renewal | ||||||
& Redevelopment | ||||||
Interstate Corridor Series A | ||||||
5.00% 6/15/23 (AMBAC) | 250,000 | 265,568 | ||||
Powell, Ohio 5.50% 12/1/32 (FGIC) | 2,000,000 | 2,162,420 | ||||
Taney County, Missouri | ||||||
Reorganization School | ||||||
District R-V (Hollister School | ||||||
District Direct Deposit Project) | ||||||
5.00% 3/1/22 (FSA) | 1,000,000 | 1,061,440 | ||||
^Umatilla County, Oregon School | ||||||
District #6 R Umatilla Refunding | ||||||
5.50% 12/15/22 (AMBAC) | 200,000 | 104,850 | ||||
49,222,183 | ||||||
§Pre-Refunded Bonds – 10.61% | ||||||
Alexandria, Virginia Industrial | ||||||
Development Authority Revenue | ||||||
(Institute for Defense Analyses) | ||||||
Series A 5.90% 10/1/30-10 | ||||||
(AMBAC) | 6,000,000 | 6,512,580 | ||||
Deschutes County, Oregon | ||||||
Administrative School District #1 | ||||||
Series A 5.125% 6/15/21-11 (FSA) | 1,000,000 | 1,058,730 | ||||
Deschutes County, Oregon Hospital | ||||||
Facilities Authority Hospital | ||||||
Revenue (Cascade Health | ||||||
Services) 5.60% 1/1/32-12 | 1,250,000 | 1,352,888 | ||||
Golden State, California Tobacco | ||||||
Securitization Corporation | ||||||
Settlement Revenue Series B | ||||||
5.50% 6/1/43-13 | 8,500,000 | 9,349,744 | ||||
5.625% 6/1/38-13 | 7,500,000 | 8,301,749 | ||||
Illinois Educational Facilities Authority | ||||||
Student Housing Revenue | ||||||
(Educational Advancement | ||||||
Fund-University Center Project) | ||||||
6.25% 5/1/30-12 | 5,000,000 | 5,647,900 | ||||
6.25% 5/1/34-07 | 500,000 | 502,080 | ||||
Jackson, Ohio Local School | ||||||
District (Stark & Summit | ||||||
Counties) School Facilities | ||||||
Construction & Improvement | ||||||
5.625% 12/1/25-10 (FSA) | 1,000,000 | 1,070,710 | ||||
Jackson, Oregon School District #6 | ||||||
Central Point 5.25% 6/15/20-10 | ||||||
(FGIC) | 1,175,000 | 1,234,890 | ||||
Lewisville, Texas Independent | ||||||
School District | ||||||
6.15% 8/15/21-09 (PSF) | 2,085,000 | 2,207,994 | ||||
Liberty, Missouri Sewer System | ||||||
Revenue 6.15% 2/1/15-09 | ||||||
(MBIA) | 1,500,000 | 1,569,765 | ||||
Linn County, Oregon Community | ||||||
School District #9 Lebanon | ||||||
5.60% 6/15/30-13 (FGIC) | 2,000,000 | 2,218,120 | ||||
Maryland State Economic | ||||||
Development Corporation, | ||||||
Student Housing Revenue | ||||||
(University of Maryland College | ||||||
Park Project) 5.625% 6/1/35-13 | 1,125,000 | 1,248,581 | ||||
Mississippi Development Bank | ||||||
Special Obligation (Madison | ||||||
County Hospital Project) | ||||||
6.30% 7/1/22-09 | 2,070,000 | 2,228,252 | ||||
New York City, New York | ||||||
Series H 6.125% 8/1/25-07 | 4,685,000 | 4,780,433 | ||||
Series J 5.25% 6/1/28-13 | 450,000 | 491,117 | ||||
Oregon State Department of | ||||||
Administrative Services | ||||||
Certificates of Participation | ||||||
Series A 5.80% 5/1/24-07 | ||||||
(AMBAC) | 1,000,000 | 1,013,580 | ||||
Orlando, Florida Utilities | ||||||
Commission Water & Electric | ||||||
Revenue 5.25% 10/1/20-11 | 1,575,000 | 1,694,275 | ||||
Payne County, Oklahoma Economic | ||||||
Development Authority Student | ||||||
Housing Revenue (Collegiate | ||||||
Housing Foundation-Oklahoma | ||||||
State University) Series A | ||||||
6.375% 6/1/30-11 | 4,000,000 | 4,415,240 | ||||
Puerto Rico Commonwealth | ||||||
Highway & Transportation | ||||||
Authority Revenue Series K | ||||||
5.00% 7/1/35-15 | 2,500,000 | 2,726,625 |
10
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
§Pre-Refunded Bonds (continued) | ||||||
Puerto Rico Commonwealth | ||||||
Public Improvement | ||||||
5.125% 7/1/30-11 (FSA) | $ | 920,000 | $ | 976,451 | ||
5.375% 7/1/21-07 (MBIA) | 50,000 | 51,047 | ||||
Series A 5.125% 7/1/31-11 | 3,495,000 | 3,709,453 | ||||
Puerto Rico Housing, Bank | ||||||
& Finance Agency Single | ||||||
Family Mortgage Revenue | ||||||
6.25% 4/1/29-07 (GNMA) | ||||||
(FNMA) (FHLMC) (AMT) | 1,240,000 | 1,242,542 | ||||
Southeast Wisconsin Professional | ||||||
Baseball Park District Sales Tax | ||||||
Revenue 5.80% 12/15/26-07 | ||||||
(MBIA) | 1,000,000 | 1,010,850 | ||||
St. Louis, Missouri Airport Revenue | ||||||
(Capital Improvement Project) | ||||||
Series A 5.375% 7/1/21-12 | ||||||
(MBIA) | 1,635,000 | 1,770,264 | ||||
Vancouver, Washington Limited Tax | ||||||
5.50% 12/1/25-10 (AMBAC) | 1,250,000 | 1,329,325 | ||||
Wisconsin Housing & Economic | ||||||
Developing Authority Revenue | ||||||
6.10% 6/1/21-17 (FHA) | 800,000 | 880,168 | ||||
70,595,353 | ||||||
Special Tax Bonds – 6.24% | ||||||
Bi-State Development Agency | ||||||
Missouri-Illinois Metropolitan District | ||||||
(Metrolink Cross County Project) | ||||||
Series B 5.00% 10/1/32 (FSA) | 2,000,000 | 2,116,000 | ||||
Jackson County, Missouri Special | ||||||
Obligation 5.00% 12/1/27 (MBIA) | 1,000,000 | 1,051,970 | ||||
Louisiana State Gas & Fuels Tax | ||||||
Revenue Series A | ||||||
5.00% 5/1/41 (FGIC) | 5,000,000 | 5,331,100 | ||||
Middlesex County, New Jersey | ||||||
Improvement Authority Senior | ||||||
Revenue (Heldrich Center Hotel/ | ||||||
Conference Project) Series A | ||||||
5.00% 1/1/32 | 1,500,000 | 1,513,950 | ||||
5.125% 1/1/37 | 1,500,000 | 1,523,115 | ||||
New Jersey Economic Development | ||||||
Authority (Cigarette Tax) | ||||||
5.50% 6/15/31 | 1,000,000 | 1,063,970 | ||||
5.75% 6/15/34 | 2,000,000 | 2,158,800 | ||||
New York City, New York | ||||||
Transitional Finance Authority | ||||||
Series D 5.00% 2/1/31 | 5,000,000 | 5,257,250 | ||||
New York State Dormitory | ||||||
Authority State Personal | ||||||
Income Tax Revenue Education | ||||||
5.00% 3/15/31 | 5,200,000 | 5,593,432 | ||||
New York State Sales Tax | ||||||
Asset Receivables Series A | ||||||
5.25% 10/15/27 (AMBAC) | 1,000,000 | 1,096,260 | ||||
Puerto Rico Commonwealth | ||||||
Infrastructure Financing | ||||||
Authority Special Revenue | ||||||
Series B 5.00% 7/1/46 | 5,600,000 | 5,909,232 | ||||
Puerto Rico Convention Center | ||||||
District Authority Revenue | ||||||
(Hotel Occupancy Tax) | ||||||
5.00% 7/1/31 (AMBAC) | 6,250,000 | 6,750,563 | ||||
Tampa, Florida Sports Authority | ||||||
Revenue Sales Tax (Tampa Bay | ||||||
Arena Project) | ||||||
5.75% 10/1/20 (MBIA) | 1,000,000 | 1,178,610 | ||||
Truth or Consequences, New | ||||||
Mexico Gross Receipts Tax | ||||||
Revenue 6.30% 7/1/16 | 1,000,000 | 1,001,900 | ||||
41,546,152 | ||||||
State General Obligation Bonds – 10.20% | ||||||
California State | ||||||
5.00% 2/1/26 (AMBAC) | 5,570,000 | 5,831,790 | ||||
5.00% 2/1/33 | 6,350,000 | 6,656,959 | ||||
5.25% 2/1/30 (MBIA) | 3,500,000 | 3,711,365 | ||||
Illinois State Series A 5.00% 3/1/34 | 7,000,000 | 7,373,800 | ||||
Maryland State & Local Facilities | ||||||
Land Capital Improvement | ||||||
Series A | ||||||
5.00% 8/1/11 | 5,000,000 | 5,287,000 | ||||
5.00% 3/1/12 | 8,000,000 | 8,510,960 | ||||
Pennsylvania State First Series | ||||||
5.00% 7/1/11 | 5,955,000 | 6,276,034 | ||||
5.00% 7/1/13 | 3,000,000 | 3,224,670 | ||||
Puerto Rico Commonwealth | ||||||
Public Improvement | ||||||
5.125% 7/1/30 (FSA) | 965,000 | 1,010,567 | ||||
5.25% 7/1/27 (FSA) | 705,000 | 743,789 | ||||
Series A 5.125% 7/1/31 | 7,880,000 | 8,174,003 | ||||
Series A 5.25% 7/1/23 | 500,000 | 539,890 | ||||
Series A 5.50% 7/1/19 (MBIA) | 9,000,000 | 10,490,850 | ||||
67,831,677 | ||||||
Transportation Revenue Bonds – 4.59% | ||||||
Bay Area, California Toll Authority | ||||||
Revenue Series F 5.00% 4/1/31 | 7,100,000 | 7,644,854 | ||||
Capital Trust Agency | ||||||
Florida Revenue | ||||||
(Fort Lauderdale/Cargo | ||||||
Acquisition Project) | ||||||
5.75% 1/1/32 (AMT) | 3,750,000 | 3,948,713 | ||||
(Orlando/Cargo Acquisition | ||||||
Project) 6.75% 1/1/32 (AMT) | 2,395,000 | 2,600,036 | ||||
Dallas-Fort Worth, Texas International | ||||||
Airport Revenue Series A | ||||||
5.50% 11/1/31 (FGIC) (AMT) | 1,500,000 | 1,590,720 |
(continues) 11
Statements of net assets
Delaware Tax-Free USA Fund
Principal | |||||||||
Amount | Value | ||||||||
Municipal Bonds (continued) | |||||||||
Transportation Revenue Bonds (continued) | |||||||||
Grapevine, Texas Industrial | |||||||||
Development Corporate | |||||||||
Revenue (Air Cargo) | |||||||||
6.50% 1/1/24 (AMT) | $ | 920,000 | $ | 995,339 | |||||
Houston, Texas Industrial | |||||||||
Development Corporate | |||||||||
Revenue (Air Cargo) | |||||||||
6.375% 1/1/23 (AMT) | 2,000,000 | 2,151,460 | |||||||
Metropolitan, New York | |||||||||
Transportation Authority | |||||||||
Revenue Refunding Series A | |||||||||
5.00% 11/15/30 (FSA) | 3,000,000 | 3,154,050 | |||||||
Pennsylvania State Turnpike | |||||||||
Commission Revenue Series A | |||||||||
5.00% 12/1/34 (AMBAC) | 500,000 | 536,830 | |||||||
South Carolina Transportation | |||||||||
Infrastructure Revenue Series A | |||||||||
5.00% 10/1/33 (AMBAC) | 7,500,000 | 7,910,549 | |||||||
30,532,551 | |||||||||
Water & Sewer Revenue Bonds – 5.62% | |||||||||
Augusta, Georgia Water & Sewer | |||||||||
Revenue 5.25% 10/1/34 (FSA) | 4,375,000 | 4,755,231 | |||||||
Clovis, California Public Financing | |||||||||
Authority Wastewater Revenue | |||||||||
5.25% 8/1/30 (MBIA) | 1,000,000 | 1,094,240 | |||||||
Fulton County, Georgia Water & | |||||||||
Sewer Revenue | |||||||||
5.25% 1/1/35 (FGIC) | 1,000,000 | 1,079,400 | |||||||
Metropolitan St. Louis, Missouri Sewer | |||||||||
District Wastewater Revenue | |||||||||
Series A 5.00% 5/1/34 (MBIA) | 1,250,000 | 1,323,388 | |||||||
Missouri State Environmental | |||||||||
Improvement & Energy | |||||||||
Resource Authority Water | |||||||||
Pollution Control Revenue | |||||||||
Unrefunded Balance (State | |||||||||
Revolving Fund Project) Series A | |||||||||
6.05% 7/1/16 (FSA) | 1,060,000 | 1,062,099 | |||||||
New York City, New York Municipal | |||||||||
Water Finance Authority Water | |||||||||
& Sewer System Revenue | |||||||||
Series A 5.125% 6/15/34 | 12,125,000 | 12,769,686 | |||||||
Series A 5.25% 6/15/34 | 3,705,000 | 3,932,969 | |||||||
Portland, Oregon Sewer Systems | |||||||||
Revenue (Second Lien) | |||||||||
Series A 5.00% 6/1/23 (FSA) | 325,000 | 345,127 | |||||||
Series B 5.00% 6/15/27 (MBIA) | 1,000,000 | 1,079,370 | |||||||
Sacramento County, California | |||||||||
Sanitation District Financing | |||||||||
Authority Revenue | |||||||||
•4.121% 12/1/35 (FGIC) | 2,000,000 | 2,006,000 | |||||||
5.00% 12/1/36 (FGIC) | 4,000,000 | 4,308,320 | |||||||
Virgin Islands Water & Power | |||||||||
Authority Water System | |||||||||
Revenue 5.50% 7/1/17 | 510,000 | 525,866 | |||||||
West Virginia State Water | |||||||||
Development Authority Revenue | |||||||||
(Loan Program III) Series A | |||||||||
6.375% 7/1/39 (AMBAC) (AMT) | 2,890,000 | 3,133,020 | |||||||
37,414,716 | |||||||||
Total Municipal Bonds | |||||||||
(cost $607,074,836) | 645,667,738 | ||||||||
•Variable Rate Demand Notes – 1.19% | |||||||||
Allegheny County, Pennsylvania | |||||||||
Hospital Development | |||||||||
Authority Revenue (Childrens | |||||||||
Home-Pittsburgh) | |||||||||
Series B 3.67% 6/1/35 | 300,000 | 300,000 | |||||||
Greenville, Tennessee Industrial | |||||||||
Development Board Industrial | |||||||||
Development Revenue (Pet Inc. | |||||||||
Project) 3.67% 5/1/13 | 660,000 | 660,000 | |||||||
Massachusetts State Consolidated | |||||||||
Loan Series B 3.66% 3/1/26 | 1,000,000 | 1,000,000 | |||||||
Missouri State Health & Educational | |||||||||
Facilities Authority Revenue | |||||||||
(St. Louis University Project) | |||||||||
Series A 3.64% 10/1/35 (MBIA) | 4,000,000 | 4,000,000 | |||||||
University of Minnesota Weekly | |||||||||
Series A 3.50% 1/1/34 | 2,000,000 | 2,000,000 | |||||||
Total Variable Rate Demand Notes | |||||||||
(cost $7,960,000) | 7,960,000 | ||||||||
Total Value of Securities – 98.25% | |||||||||
(cost $615,034,836) | 653,627,738 | ||||||||
Receivables and Other Assets | |||||||||
Net of Liabilities – 1.75% | 11,608,777 | ||||||||
Net Assets Applicable to 56,964,511 | |||||||||
Shares Outstanding – 100.00% | $ | 665,236,515 | |||||||
Net Asset Value – Delaware Tax-Free USA Fund | |||||||||
Class A ($631,808,347 / 54,101,618 Shares) | $11.68 | ||||||||
Net Asset Value – Delaware Tax-Free USA Fund | |||||||||
Class B ($18,738,131 / 1,605,165 Shares) | $11.67 | ||||||||
Net Asset Value – Delaware Tax-Free USA Fund | |||||||||
Class C ($14,690,037 / 1,257,728 Shares) | $11.68 | ||||||||
Components of Net Assets at February 28, 2007: | |||||||||
Shares of beneficial interest | |||||||||
(unlimited authorization – no par) | $ | 631,166,906 | |||||||
Undistributed net investment income | 1,790 | ||||||||
Accumulated net realized loss on investments | (4,525,083 | ) | |||||||
Net unrealized appreciation of investments | 38,592,902 | ||||||||
Total net assets | $ | 665,236,515 |
12
Summary of Abbreviations: | ||
AMBAC — Insured by the AMBAC Assurance Corporation | ||
AMT — Subject to Alternative Minimum Tax | ||
FGIC — Insured by the Financial Guaranty Insurance Company | ||
FHA — Insured by the Federal Housing Administration | ||
FHLMC — Insured by the Federal Home Loan Mortgage Corporation | ||
FNMA — Insured by Federal National Mortgage Association | ||
FSA — Insured by Financial Security Assurance | ||
GNMA — Insured by Government National Mortgage Association | ||
MBIA — Insured by the Municipal Bond Insurance Association | ||
PSF — Insured by the Permanent School Fund | ||
RADIAN — Insured by Radian Asset Assurance XLCA — Insured by XL Capital Assurance | ||
§ | Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S. Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 9 in “Notes to Financial Statements.” | ||
• | Variable rate security. The rate shown is the rate as of February 28, 2007. | ||
@ | Illiquid security. At February 28, 2007, the aggregate amount of illiquid securities equaled $240,000, which represented 0.04% of the Fund’s net assets. See Note 9 in “Notes to Financial Statements.” | ||
^ | Zero coupon security. The rate shown is the yield at the time of purchase. | ||
‡ | Non-income producing security. Security is currently in default. | ||
Net Asset Value and Offering Price per Share – | |||
Delaware Tax-Free USA Fund | |||
Net asset value Class A (A) | $ | 11.68 | |
Sales charge (4.50% of offering price) (B) | 0.55 | ||
Offering price | $ | 12.23 | |
(A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. | ||
(B) | See the current prospectus for purchases of $100,000 or more. | ||
See accompanying notes |
(continues) 13
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
February 28, 2007 (Unaudited)
Principal | ||||||
Amount | Value | |||||
Municipal Bonds – 97.48% | ||||||
Corporate Revenue Bonds – 5.33% | ||||||
Alliance Airport Authority, Texas | ||||||
Special Facilities Revenue | ||||||
(Federal Express Corp. project) | ||||||
4.85% 4/1/21 (AMT) | $ | 2,000,000 | $ | 2,051,980 | ||
Brazos, Texas River Authority | ||||||
Pollution Control Revenue | ||||||
(Texas Utilities) | ||||||
5.40% 5/1/29 (AMT) | 1,000,000 | 1,030,640 | ||||
Connecticut State Development | ||||||
Authority Pollution Control | ||||||
Revenue (Connecticut Light & | ||||||
Power) Series A | ||||||
•3.35% 5/1/31(AMBAC) (AMT) | 1,300,000 | 1,289,886 | ||||
5.85% 9/1/28 | 1,145,000 | 1,202,811 | ||||
•Farmington, New Mexico Pollution | ||||||
Control Revenue (El Paso | ||||||
Electric Co. Project) Series A | ||||||
4.00% 6/1/32 (FGIC) | 1,000,000 | 1,000,780 | ||||
•Forsyth, Montana Pollution Control | ||||||
Revenue (Portland General | ||||||
Project) Series A 5.20% 5/1/33 | 1,005,000 | 1,030,266 | ||||
Indianapolis, Indiana Airport | ||||||
Authority Revenue Special | ||||||
Facilities (Federal Express Corp. | ||||||
Project) 5.10% 1/15/17 (AMT) | 750,000 | 797,790 | ||||
Michigan State Strategic Funding | ||||||
Limited Obligation Revenue | ||||||
(Detroit Edison Co. Project) | ||||||
Series A 5.50% 6/1/30 | ||||||
(XLCA) (AMT) | 1,000,000 | 1,084,910 | ||||
Ohio State Air Quality Development | ||||||
Authority Revenue | ||||||
Environmental Improvement | ||||||
(USX Project) 5.00% 11/1/15 | 1,000,000 | 1,059,250 | ||||
Prattville, Alabama Industrial | ||||||
Development Board | ||||||
Environmental Improvement | ||||||
Revenue (International | ||||||
Paper Co. Project) Series A | ||||||
6.70% 3/1/24 (AMT) | 1,000,000 | 1,072,190 | ||||
•Sabine, Texas River Authority | ||||||
Pollution Control Revenue (TXU | ||||||
Electric Co. Project) Series A | ||||||
5.50% 5/1/22 | 1,000,000 | 1,034,430 | ||||
South Carolina Jobs Economic | ||||||
Development Authority | ||||||
Industrial Revenue (South | ||||||
Carolina Electric & Gas Co. | ||||||
Project) Series B 5.45% 11/1/32 | ||||||
(AMBAC) (AMT) | 500,000 | 534,385 | ||||
Sugar Creek, Missouri Industrial | ||||||
Development Revenue (Lafarge | ||||||
North America Project) Series A | ||||||
5.65% 6/1/37 (AMT) | 500,000 | 532,355 | ||||
Toledo, Lucas County, Ohio | ||||||
Port Authority Development | ||||||
Revenue (Northwest Ohio Bond | ||||||
Fund-Alex Products Inc.) Series B | ||||||
6.125% 11/15/09 (AMT) | 650,000 | 671,528 | ||||
14,393,201 | ||||||
Education Revenue Bonds – 8.76% | ||||||
California Municipal Finance | ||||||
Authority Educational Revenue | ||||||
(American Heritage Education | ||||||
Foundation Project) Series A | ||||||
5.25% 6/1/26 | 1,000,000 | 1,058,930 | ||||
Chattanooga, Tennessee Health | ||||||
Educational & Housing | ||||||
Facilities Board Revenue (CDFI | ||||||
Phase I, LLC Project) Series B | ||||||
5.50% 10/1/20 | 1,220,000 | 1,271,630 | ||||
El Paso County, Texas Community | ||||||
College District Revenue | ||||||
(Combination Fee Building) | ||||||
5.00% 4/1/21 (MBIA) | 1,250,000 | 1,359,950 | ||||
Fulton County, Georgia | ||||||
Development Authority Revenue | ||||||
(Molecular Science Building | ||||||
Project) 5.25% 5/1/21 (MBIA) | 1,000,000 | 1,084,380 | ||||
Grand Traverse, Michigan Public | ||||||
School Academy Revenue | ||||||
5.00% 11/1/36 | 900,000 | 919,746 | ||||
Illinois Finance Authority Student | ||||||
Housing Revenue Series B | ||||||
5.00% 5/1/30 | 1,250,000 | 1,283,200 | ||||
Illinois Financial Authority Revenue | ||||||
(Illinois Institute of Technology) | ||||||
Series A 5.00% 4/1/36 | 825,000 | 864,881 | ||||
Massachusetts State Health | ||||||
& Educational Facilities | ||||||
Authority Revenue (Nichols | ||||||
College Project) Series C | ||||||
6.125% 10/1/29 | 1,000,000 | 1,055,970 | ||||
Michigan Higher Education | ||||||
Facilities Authority Revenue | ||||||
(Kalamazoo College Project) | ||||||
5.50% 12/1/19 | 500,000 | 536,235 | ||||
New Jersey State Educational | ||||||
Facilities Authority Revenue | ||||||
(Georgian Court College | ||||||
Project) Series C 6.50% 7/1/33 | 500,000 | 565,490 | ||||
New York State Dormitory | ||||||
Authority Revenue | ||||||
(Brooklyn Law School) Series A | ||||||
5.50% 7/1/18 (RADIAN) | 1,000,000 | 1,085,560 | ||||
(Long Island University) Series B | ||||||
5.50% 9/1/20 (RADIAN) | 1,000,000 | 1,086,100 |
14
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Education Revenue Bonds (continued) | ||||||
¶New York State Dormitory | ||||||
Authority Revenue Non State | ||||||
Supported Debt (University | ||||||
of Rochester) Series A-2 | ||||||
4.65% 7/1/39 | $ | 1,445,000 | $ | 1,200,838 | ||
North Carolina Capital Facilities | ||||||
Financial Agency Revenue (Duke | ||||||
University Project) Series B | ||||||
4.25% 7/1/42 | 460,000 | 448,068 | ||||
Ohio State Higher Educational | ||||||
Facility Revenue | ||||||
(John Carroll University) | ||||||
5.50% 11/15/18 | 335,000 | 366,289 | ||||
•(Kenyon College Project) | ||||||
4.70% 7/1/37 | 1,000,000 | 1,038,860 | ||||
Ohio State University General | ||||||
Receipts Series B 5.25% 6/1/21 | 1,000,000 | 1,076,570 | ||||
Pennsylvania State Higher | ||||||
Educational Facilities Authority | ||||||
College & University Revenue | ||||||
(Geneva College Project) | ||||||
6.125% 4/1/22 | 1,000,000 | 1,075,750 | ||||
Tulsa, Oklahoma Industrial | ||||||
Authority Student Housing | ||||||
Revenue (University of Tulsa) | ||||||
5.00% 10/1/37 | 1,000,000 | 1,050,490 | ||||
University of California Revenue | ||||||
Series A 5.125% 5/15/20 | ||||||
(AMBAC) | 250,000 | 269,530 | ||||
University of Oklahoma Research | ||||||
Facilities Revenue 5.00% 3/1/23 | ||||||
(AMBAC) | 1,065,000 | 1,125,748 | ||||
University of Texas Revenue (FING | ||||||
System) Series F 5.00% 8/15/24 | 3,510,000 | 3,806,595 | ||||
23,630,810 | ||||||
Electric Revenue Bonds – 5.47% | ||||||
Long Island, New York | ||||||
Power Authority Electric | ||||||
System Revenue Series E | ||||||
5.00% 12/1/22 (FGIC) | 2,500,000 | 2,715,975 | ||||
Metropolitan Government Nashville | ||||||
& Davidson County, Tennessee | ||||||
Electric Revenue Series B | ||||||
5.50% 5/15/14 | 1,000,000 | 1,112,660 | ||||
•Nebraska Gas Project Revenue | ||||||
(Central Plains Energy Project #1) | ||||||
Series B 4.248% 12/1/26 | 2,175,000 | 2,177,175 | ||||
Oliver County, North Dakota | ||||||
Pollution Control Revenue | ||||||
(Square Butte Electric Coop) | ||||||
Series A 5.30% 1/1/27 | ||||||
(AMBAC) | 1,500,000 | 1,564,065 | ||||
Orlando, Florida Utilities | ||||||
Commission Water & Electric | ||||||
Revenue 5.25% 10/1/20 | 555,000 | 594,111 | ||||
Philadelphia, Pennsylvania Gas | ||||||
Works Revenue First Series A | ||||||
5.375% 7/1/15 (FSA) | 2,000,000 | 2,040,200 | ||||
Roseville, California National | ||||||
Gas Financing Authority Gas | ||||||
Revenue 5.00% 2/15/18 | 2,500,000 | 2,730,550 | ||||
South Carolina State Public Service | ||||||
Authority Revenue Refunding | ||||||
Series A 5.125% 1/1/21 (FSA) | 1,000,000 | 1,069,140 | ||||
Texas Municipal Power Agency | ||||||
Revenue 4.00% 9/1/11 | ||||||
(AMBAC) | 750,000 | 750,930 | ||||
14,754,806 | ||||||
Escrowed to Maturity Bonds – 0.07% | ||||||
Southcentral, Pennsylvania General | ||||||
Authority Revenue (Wellspan | ||||||
Health Obligated Project) | ||||||
5.625% 5/15/26 | 180,000 | 194,351 | ||||
194,351 | ||||||
Health Care Revenue Bonds – 15.22% | ||||||
Apple Valley, Minnesota Economic | ||||||
Development Authority Health | ||||||
Care Revenue (Evercare Senior | ||||||
Living LLC Projects) Series A | ||||||
6.00% 12/1/25 | 1,000,000 | 1,016,710 | ||||
California Health Facilities | ||||||
Financing Authority Revenue | ||||||
Insured (California-Nevada- | ||||||
Methodist) 5.00% 7/1/26 | 1,745,000 | 1,851,166 | ||||
California Statewide Communities | ||||||
Development Authority | ||||||
Revenue (Kaiser Permenante) | ||||||
5.25% 3/1/45 | 2,000,000 | 2,133,740 | ||||
Chatham County, Georgia Hospital | ||||||
Authority Revenue (Memorial | ||||||
Health Medical Center) Series A | ||||||
6.125% 1/1/24 | 1,000,000 | 1,093,540 | ||||
Cleveland-Cuyahoga County, | ||||||
Ohio Port Authority Revenue | ||||||
(Saint Clarence-Geac) Series A | ||||||
6.125% 5/1/26 | 715,000 | 740,275 | ||||
Cumberland County, Pennsylvania | ||||||
Municipal Authority Revenue | ||||||
(Diakon Lutheran Ministries | ||||||
Project) 5.00% 1/1/36 | 1,070,000 | 1,110,810 | ||||
Cuyahoga County, Ohio Revenue | ||||||
(Cleveland Clinic Health System) | ||||||
Series A 6.00% 1/1/21 | 1,000,000 | 1,114,250 | ||||
Duluth, Minnesota Economic | ||||||
Development Authority Health | ||||||
Care Facilities Revenue (Benedictine | ||||||
Health System St. Mary’s Hospital) | ||||||
5.50% 2/15/23 | 1,000,000 | 1,076,840 |
(continues) 15
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Health Care Revenue Bonds (continued) | ||||||
Florence County, South Carolina | ||||||
Hospital Revenue (McLeod | ||||||
Regional Medical Center Project) | ||||||
Series A 5.25% 11/1/27 (FSA) | $ | 1,000,000 | $ | 1,080,820 | ||
•Highlands County, Florida Health | ||||||
Facilities Authority Revenue | ||||||
(Adventist Health System) | ||||||
Series I 5.00% 11/15/29 | 2,000,000 | 2,056,340 | ||||
Indiana Health Facility Financing | ||||||
Authority Hospital Revenue | ||||||
(Deaconess Hospital Obligation) | ||||||
Series A 5.375% 3/1/29 | ||||||
(AMBAC) | 700,000 | 758,093 | ||||
Lakeland, Florida Hospital System | ||||||
Revenue (Lakeland Regional | ||||||
Health System) 5.00% 11/15/32 | 3,000,000 | 3,120,389 | ||||
Lawrence, Kansas Hospital | ||||||
Authority Revenue | ||||||
5.125% 7/1/36 | 2,000,000 | 2,108,400 | ||||
Louisville & Jefferson County, | ||||||
Kentucky Metro Government | ||||||
Health System Revenue (Norton | ||||||
Healthcare Inc.) 5.25% 10/1/36 | 2,500,000 | 2,661,700 | ||||
Maple Grove, Minnesota Health | ||||||
Care Facilities Revenue (North | ||||||
Memorial Health Care) | ||||||
5.00% 9/1/29 | 2,000,000 | 2,101,780 | ||||
Maryland State Health & Higher | ||||||
Education Facilities Authority | ||||||
Revenue (Union Hospital of | ||||||
Cecil County) 5.625% 7/1/32 | 500,000 | 535,970 | ||||
Michigan State Hospital Finance | ||||||
Authority Revenue | ||||||
(Henry Ford Health System) | ||||||
Series A 5.25% 11/15/46 | 1,000,000 | 1,065,800 | ||||
(Trinity Health Credit) Series C | ||||||
5.375% 12/1/23 | 500,000 | 536,210 | ||||
Minneapolis, Minnesota Health | ||||||
Care System Revenue (Allina | ||||||
Health Systems) Series A | ||||||
5.75% 11/15/32 | 500,000 | 542,275 | ||||
Multnomah County, Oregon | ||||||
Hospital Facilities Authority | ||||||
Revenue (Providence Health | ||||||
System) 5.25% 10/1/22 | 1,000,000 | 1,081,450 | ||||
New Hampshire Health & | ||||||
Education Facilities Authority | ||||||
Revenue (Elliot Hospital) Series B | ||||||
5.60% 10/1/22 | 1,000,000 | 1,082,890 | ||||
New Jersey Health Care Facilities | ||||||
Financing Authority Revenue | ||||||
(Saint Barnabas Health Care | ||||||
System) Series A 5.00% 7/1/29 | 1,095,000 | 1,139,851 | ||||
North Carolina Medical Care | ||||||
Commission Health Care | ||||||
Facilities Revenue | ||||||
(First Mortgage-Presbyterian | ||||||
Homes) 5.40% 10/1/27 | 1,200,000 | 1,251,024 | ||||
(Pennybryn at Mayfield Project) | ||||||
Series A 6.125% 10/1/35 | 1,700,000 | 1,815,039 | ||||
North Texas Health Facilities | ||||||
Development Corporation | ||||||
Hospital Revenue (United | ||||||
Regional Health Care System, | ||||||
Inc. Project) 6.00% 9/1/23 | 1,000,000 | 1,098,290 | ||||
Shelby County, Tennessee Health | ||||||
Educational & Housing Facilities | ||||||
Board Revenue (Trezevant | ||||||
Manor Project) Series A | ||||||
5.75% 9/1/37 | 1,000,000 | 1,032,510 | ||||
St. Mary Hospital Authority | ||||||
Pennsylvania Health System | ||||||
Revenue (Catholic Health East) | ||||||
Series A 5.25% 11/15/16 | 1,200,000 | 1,286,952 | ||||
St. Paul, Minnesota Housing & | ||||||
Redevelopment Authority | ||||||
Healthcare Facilities Revenue | ||||||
(Healthpartners Obligation | ||||||
Group Project) 5.25% 5/15/36 | 1,000,000 | 1,060,850 | ||||
St. Paul, Minnesota Housing & | ||||||
Redevelopment Authority | ||||||
Hospital Revenue (Health East | ||||||
Project) 6.00% 11/15/25 | 1,000,000 | 1,121,230 | ||||
Suffolk, Virginia Industrial | ||||||
Development Authority | ||||||
Retirement Facilities Revenue | ||||||
(First Mortgage-Lake Prince) | ||||||
5.15% 9/1/24 | 725,000 | 742,241 | ||||
Terrebonne Parish, Louisiana | ||||||
Hospital Service District #1 | ||||||
Hospital Revenue (Terrebonne | ||||||
General Medical Center Project) | ||||||
5.50% 4/1/33 (AMBAC) | 1,500,000 | 1,631,460 | ||||
41,048,895 | ||||||
Housing Revenue Bonds – 0.47% | ||||||
California State Department | ||||||
Veteran Affairs Home | ||||||
Purchase Revenue Series A | ||||||
4.60% 12/1/28 | 1,250,000 | 1,264,538 | ||||
1,264,538 | ||||||
Lease Revenue Bonds – 4.56% | ||||||
California State Public Works Board | ||||||
Lease Revenue (Department | ||||||
of General Services-Butterfield | ||||||
Street) Series A 5.25% 6/1/25 | 1,000,000 | 1,087,480 |
16
Principal | |||
Amount | Value | ||
Municipal Bonds (continued) | |||
Lease Revenue Bonds (continued) | |||
Golden State, California Tobacco | |||
Securitization Corporation | |||
Settlement Revenue Series A | |||
5.00% 6/1/18 | $2,000,000 | $ 2,032,680 | |
5.00% 6/1/21 (AMBAC) | 1,000,000 | 1,050,120 | |
Hudson Yards, New York | |||
Infrastructure Revenue Series A | |||
5.00% 2/15/47 | 1,250,000 | 1,329,038 | |
Michigan State Building | |||
Authority Revenue Series I | |||
5.50% 10/15/18 | 2,175,000 | 2,334,840 | |
Missouri State Development | |||
Finance Board Infrastructure | |||
Facilities Revenue (Crackerneck | |||
Creek Project) Series C | |||
5.00% 3/1/28 | 1,600,000 | 1,689,040 | |
New York State Municipal Bond | |||
Bank Agency Special School | |||
Purpose Revenue Series C | |||
5.25% 6/1/22 | 1,000,000 | 1,069,110 | |
•Puerto Rico Public Buildings | |||
Authority Revenue (Guaranteed | |||
Government Facilities) Series J | |||
5.00% 7/1/28 | 1,000,000 | 1,044,920 | |
•Puerto Rico Public Finance | |||
Corporate Revenue Series A | |||
5.25% 8/1/29 (MBIA) | 620,000 | 661,304 | |
12,298,532 | |||
Local General Obligation Bonds – 12.37% | |||
^Anaheim, California City School | |||
District Election 2002 | |||
4.58% 8/1/25 (MBIA) | 2,500,000 | 1,124,425 | |
Baywinds Community | |||
Development District Florida | |||
Special Assessment Series B | |||
4.90% 5/1/12 | 1,000,000 | 995,200 | |
Belton, Missouri School District | |||
#124 Series B 5.25% 3/1/23 | 1,000,000 | 1,096,050 | |
Benton & Linn Counties, Oregon | |||
School District #509J Corvallis | |||
5.00% 6/1/21 (FSA) | 1,000,000 | 1,064,790 | |
Boerne, Texas Independent School | |||
District Building | |||
5.25% 2/1/26 (PSF) | 4,495,000 | 4,803,312 | |
5.25% 2/1/29 (PSF) | 1,500,000 | 1,601,250 | |
East Homestead Community | |||
Development District Florida | |||
Special Assessment Revenue | |||
Series B 5.00% 5/1/11 | 435,000 | 435,700 | |
Lansing, Michigan Community | |||
College (College Building and | |||
Site) 5.00% 5/1/21 (MBIA) | 1,325,000 | 1,406,090 | |
Licking County, Ohio Joint Vocational | |||
School District School Facilities | |||
Construction & Improvement | |||
5.00% 12/1/19 (MBIA) | 1,000,000 | 1,061,220 | |
Los Angeles, California Unified | |||
School District | |||
Election 2004 Series G | |||
5.00% 7/1/13 (AMBAC) | 2,000,000 | 2,159,160 | |
Series A-2 4.25% 1/1/28 (FGIC) | 355,000 | 354,251 | |
Marana, Arizona Tangerine Farms | |||
Road Improvement District | |||
Revenue 4.60% 1/1/26 | 810,000 | 819,040 | |
Mecklenburg County, North | |||
�� Carolina Public Improvement | |||
Series A 5.00% 2/1/11 | 4,775,000 | 5,021,438 | |
Middlesex County, New Jersey | |||
Improvement Authority Revenue | |||
(County Guaranteed Open | |||
Space Trust) 5.25% 9/15/20 | 1,000,000 | 1,084,230 | |
Modesto, California Special Tax | |||
Community Facilities District | |||
#04-1 Village 2 5.15% 9/1/36 | 1,500,000 | 1,541,430 | |
New York City, New York | |||
Series G 5.25% 8/1/15 | 1,000,000 | 1,081,210 | |
Series I 5.00% 8/1/21 | 1,000,000 | 1,064,650 | |
Series J 5.00% 3/1/35 | 2,000,000 | 2,115,520 | |
Series J 5.50% 6/1/23 | 145,000 | 158,227 | |
Powell, Ohio 5.50% 12/1/25 (FGIC) | 1,500,000 | 1,621,815 | |
Richmond Heights, Missouri Tax | |||
Increment & Transaction Sales | |||
Tax Revenue Refunding & | |||
Improvement (Francis Place | |||
Redevelopment Project) | |||
5.625% 11/1/25 | 1,200,000 | 1,223,052 | |
St. Joseph, Missouri Industrial | |||
Development Authority Tax | |||
Increment Revenue (Shoppes at | |||
North Village Project) | |||
Series A 5.10% 11/1/19 | 500,000 | 505,630 | |
Series B 5.375% 11/1/23 | 1,000,000 | 1,021,350 | |
33,359,040 | |||
§Pre-Refunded Bonds – 7.79% | |||
Arizona State Transportation | |||
Board Highway Revenue | |||
6.25% 7/1/16-09 | 1,850,000 | 1,957,985 | |
Cook County, Illinois Series A | |||
5.375% 11/15/21-11 (FGIC) | 2,160,000 | 2,304,611 | |
Forest Grove, Oregon Revenue | |||
Campus (Pacific University) | |||
6.30% 5/1/25-10 (RADIAN) | 1,000,000 | 1,080,420 | |
Golden State, California Tobacco | |||
Securitization Settlement Revenue | |||
Series B 5.75% 6/1/23-08 | 1,000,000 | 1,026,220 |
(continues) 17
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal | |||
Amount | Value | ||
Municipal Bonds (continued) | |||
§Pre-Refunded Bonds (continued) | |||
Illinois Educational Facilities Authority | |||
Student Housing Revenue | |||
(Educational Advancement | |||
Fund-University Center Project) | |||
6.00% 5/1/22-12 | $ 750,000 | $ 838,418 | |
Lancaster County, Pennsylvania | |||
Hospital Authority Revenue | |||
(Lancaster General Hospital | |||
Project) 5.75% 3/15/21-13 | 1,000,000 | 1,117,900 | |
Lunenburg County, Virginia Series B | |||
5.25% 2/1/29-13 (MBIA) | 715,000 | 780,608 | |
New York City, New York Series J | |||
5.50% 6/1/23-13 | 855,000 | 942,988 | |
Orlando, Florida Utilities | |||
Commission Water & Electric | |||
Revenue 5.25% 10/1/20-11 | 945,000 | 1,016,565 | |
Pennsylvania State First | |||
Series 5.125% 1/15/19-11 | 3,515,000 | 3,732,086 | |
Puerto Rico Commonwealth | |||
Highway & Transportation | |||
Authority Revenue Series J | |||
5.50% 7/1/21-14 | 1,000,000 | 1,119,180 | |
Southcentral, Pennsylvania General | |||
Authority Revenue (Welllspan | |||
Health Obligated Project) | |||
5.625% 5/15/26-11 | 820,000 | 888,544 | |
University of North Carolina | |||
Revenue Series A | |||
5.375% 12/1/14-11 | 2,000,000 | 2,136,020 | |
University of Puerto Rico Revenue | |||
Series M 5.50% 6/1/15-07 | |||
(MBIA) | 1,000,000 | 1,008,220 | |
Virginia State Resource Authority | |||
Clean Water Revenue | |||
(State Revolving Fund) | |||
6.00% 10/1/16-10 | 1,000,000 | 1,079,970 | |
21,029,735 | |||
Resource Recovery Bonds – 0.57% | |||
Pennsylvania Economic Development | |||
Financing Authority Resource | |||
Recovery Revenue (Subordinate | |||
Colver Project) Series G | |||
5.125% 12/1/15 (AMT) | 1,500,000 | 1,532,790 | |
1,532,790 | |||
Special Tax Bonds – 8.77% | |||
Baltimore, Maryland Convention | |||
Center Hotel Revenue | |||
Subordinated Series B | |||
5.00% 9/1/16 | 1,200,000 | 1,232,532 | |
Casa Grande, Arizona Excise | |||
Tax Revenue 5.00% 4/1/22 | |||
(AMBAC) | 1,600,000 | 1,712,672 | |
Dallas, Texas Civic Center | |||
Convention Complex Revenue | |||
Refunding & Improvement | |||
4.875% 8/15/23 (MBIA) | 1,500,000 | 1,531,965 | |
Everett, Washington Public Facilities | |||
District Limited Sale Tax & | |||
Intermediate Local Revenue | |||
Series A | |||
5.00% 12/1/24 | 1,285,000 | 1,377,199 | |
5.00% 12/1/25 | 2,445,000 | 2,616,052 | |
Hampton, Virginia Convention | |||
Center Revenue 5.25% 1/15/23 | |||
(AMBAC) | 1,000,000 | 1,073,820 | |
Metropolitan Pier and Exposition | |||
Authority Illinois (McCormick | |||
Place Expansion Project) Series D | |||
5.50% 12/15/24 (FGIC) | 2,000,000 | 2,106,200 | |
Middlesex County, New Jersey | |||
Improvement Authority Senior | |||
Revenue (Heldrich Center Hotel/ | |||
Conference Project) Series A | |||
5.00% 1/1/32 | 1,000,000 | 1,009,300 | |
New Jersey Economic Development | |||
Authority (Cigarette Tax) | |||
5.50% 6/15/31 | 1,000,000 | 1,063,970 | |
5.625% 6/15/18 | 1,000,000 | 1,036,580 | |
•New York City, New York | |||
Transitional Finance Authority | |||
Revenue Refunding-Future | |||
Tax Secured Series A | |||
5.50% 11/1/26 | 1,000,000 | 1,074,570 | |
New York State Dormitory | |||
Authority State Personal | |||
Income Tax Revenue Education | |||
5.00% 3/15/31 | 1,830,000 | 1,968,458 | |
New York State Sales Tax | |||
Asset Receivables Series A | |||
5.25% 10/15/27 (AMBAC) | 1,000,000 | 1,096,260 | |
Westminster, Colorado Sales & Use | |||
Tax Revenue (Sales Tax Revenue | |||
Project) Series A 5.60% 12/1/16 | 1,500,000 | 1,549,740 | |
Wyandotte County, Kansas City, | |||
Kansas Unified Government | |||
Special Obligation Revenue | |||
Refunding-Sales Tax-2nd Lien- | |||
Area B 5.00% 12/1/20 | 1,500,000 | 1,568,610 | |
Wyoming State Loan & Investment | |||
Board Facilities Revenue | |||
5.00% 10/1/24 | 1,550,000 | 1,654,222 | |
23,672,150 |
18
Principal | |||
Amount | Value | ||
Municipal Bonds (continued) | |||
State General Obligation Bonds – 19.29% | |||
California State | |||
5.00% 2/1/26 (AMBAC) | $1,500,000 | $ 1,570,500 | |
5.00% 2/1/33 | 1,850,000 | 1,939,429 | |
5.25% 11/1/17 | 1,000,000 | 1,082,280 | |
5.25% 2/1/30 (MBIA) | 1,500,000 | 1,590,585 | |
California State Economic Recovery | |||
Series A 5.25% 7/1/14 | 1,000,000 | 1,103,200 | |
California State Various Purposes | |||
5.00% 6/1/31 | 1,000,000 | 1,061,370 | |
Florida State Board Education Capital | |||
Outlay (Public Education) | |||
Series B 5.00% 1/1/09 | 2,500,000 | 2,561,025 | |
Series B 5.00% 6/1/10 | 750,000 | 780,915 | |
Series D 5.75% 6/1/22 | 2,000,000 | 2,139,200 | |
Georgia State Series D | |||
5.00% 7/1/11 | 6,865,000 | 7,249,233 | |
Maryland State & Local Facilities Land | |||
Capital Improvement Series A | |||
5.00% 3/1/12 | 2,000,000 | 2,127,740 | |
5.25% 3/1/13 | 2,500,000 | 2,721,800 | |
Massachusetts State Series B | |||
5.25% 9/1/22 (FSA) | 1,750,000 | 2,017,453 | |
Minnesota State Refunding Various | |||
Purposes 5.00% 6/1/13 | 1,000,000 | 1,016,770 | |
North Carolina Public Improvement | |||
Series A 5.00% 3/1/12 | 4,000,000 | 4,253,600 | |
Ohio State Series D 5.00% 9/15/14 | 3,500,000 | 3,802,225 | |
Pennsylvania State Third | |||
Series 2004 5.00% 7/1/09 | 2,885,000 | 2,973,800 | |
Puerto Rico Commonwealth | |||
Public Improvement Series A | |||
5.25% 7/1/23 | 1,125,000 | 1,214,753 | |
•Puerto Rico Commonwealth | |||
Series A 5.00% 7/1/30 | 1,000,000 | 1,044,920 | |
Puerto Rico Public Buildings | |||
Authority Revenue Government | |||
Facility Series I 5.50% 7/1/23 | 2,000,000 | 2,204,480 | |
•Puerto Rico Public Finance | |||
Corporation Commonwealth | |||
Appropriation (LOC Puerto Rico | |||
Government Bank) Series A | |||
5.75% 8/1/27 | 1,000,000 | 1,074,950 | |
Texas State Water Financial | |||
Assistance Series B | |||
5.50% 8/1/35 | 3,800,000 | 3,943,716 | |
Washington State Variable | |||
Purposes Series B 5.00% 1/1/20 | 2,500,000 | 2,553,875 | |
52,027,819 | |||
Transportation Revenue Bonds – 5.06% | |||
Bay Area, California Toll Authority | |||
Revenue Series F 5.00% 4/1/31 | 740,000 | 796,788 | |
Capital Trust Agency Florida | |||
Revenue (Fort Lauderdale/ | |||
Cargo Acquisition Project) | |||
5.75% 1/1/32 (AMT) | 1,750,000 | 1,842,733 | |
Chicago, Illinois O’Hare International | |||
Airport Revenue General- | |||
Airport-Third Lien Series A-2 | |||
5.75% 1/1/20 (FSA) (AMT) | 1,000,000 | 1,101,900 | |
Dallas-Fort Worth, Texas International | |||
Airport Revenue Series A | |||
5.00% 11/1/15 (XLCA) (AMT) | 2,000,000 | 2,052,200 | |
Georgia Federal Highway Road | |||
and Tollway Authority Revenue | |||
Bonds 5.00% 6/1/10 (MBIA) | 2,000,000 | 2,085,559 | |
Metropolitan, New York | |||
Transportation Authority | |||
Revenue Refunding Series A | |||
5.00% 11/15/30 (FSA) | 1,000,000 | 1,051,350 | |
Metropolitan, Washington D.C. | |||
Airport Authority Systems | |||
Revenue Series A | |||
5.50% 10/1/19 (FGIC) (AMT) | 1,000,000 | 1,085,520 | |
North Texas Tollway Authority Dallas | |||
North Tollway System Revenue | |||
Series A 5.00% 1/1/20 (FGIC) | 1,750,000 | 1,767,360 | |
Pennsylvania State Turnpike | |||
Commission Revenue Series A | |||
5.25% 12/1/20 (AMBAC) | 1,230,000 | 1,343,615 | |
Virginia Port Authority | |||
Commonwealth Port | |||
Fund Revenue Resolution | |||
5.00% 7/1/12 (AMT) | 500,000 | 526,760 | |
13,653,785 | |||
Water & Sewer Revenue Bonds – 3.75% | |||
Alabama Water Pollution | |||
Control Authority Revenue | |||
5.50% 8/15/23 (AMBAC) | 1,000,000 | 1,062,370 | |
Clovis, California Public Financing | |||
Authority Wastewater Revenue | |||
5.25% 8/1/30 (MBIA) | 1,000,000 | 1,094,240 | |
Fulton County, Georgia Water & | |||
Sewer Revenue 5.25% 1/1/35 | |||
(FGIC) | 1,500,000 | 1,619,100 | |
New York City, New York Municipal | |||
Water Finance Authority Water | |||
& Sewer System Revenue | |||
Series A 5.125% 6/15/34 | 2,775,000 | 2,922,547 |
(continues) 19
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal | |||
Amount | Value | ||
Municipal Bonds (continued) | |||
Water & Sewer Revenue Bonds (continued) | |||
New York State Environmental | |||
Facilities Corporation State | |||
Clean Water and Drinking | |||
Water Revenue (New York City | |||
Municipal Water Finance Project | |||
Second Resolution) | |||
Series F 5.00% 6/15/34 | $1,000,000 | $ 1,061,390 | |
Palm Coast, Florida Utilities System | |||
Revenue 5.00% 10/1/24 (MBIA) | 1,250,000 | 1,359,950 | |
•Sacramento County, California | |||
Sanitation District Financing | |||
Authority Revenue Series B | |||
4.121% 12/1/35 (FGIC) | 1,000,000 | 1,003,000 | |
10,122,597 | |||
Total Municipal Bonds | |||
(cost $256,882,388) | 262,983,049 | ||
•Variable Rate Demand Notes – 1.93% | |||
Alexandria, Virginia Industrial | |||
Development Authority Revenue | |||
(Institutional Defense Analyses | |||
Project) 3.68% 10/1/35 | |||
(AMBAC) | 1,200,000 | 1,200,000 | |
California Housing Finance Agency | |||
Revenue Multifamily Housing #3 | |||
Series D 3.67% 8/1/38 (AMT) | 2,000,000 | 2,000,000 | |
California State Economic Recovery | |||
Series C-10 3.36% 7/1/23 | 1,000,000 | 1,000,000 | |
University of Minnesota Weekly | |||
Series A 3.50% 1/1/34 | 1,000,000 | 1,000,000 | |
Total Variable Rate Demand Notes | |||
(cost $5,200,000) | 5,200,000 | ||
Total Value of Securities – 99.41% | |||
(cost $262,082,388) | 268,183,049 | ||
Receivables and Other Assets | |||
Net of Liabilities – 0.59% | 1,587,575 | ||
Net Assets Applicable to 23,361,001 | |||
Shares Outstanding – 100.00% | $269,770,624 |
Net Asset Value – Delaware Tax-Free USA Intermediate | |||
Fund Class A ($237,921,906 / 20,602,205 Shares) | $11.55 | ||
Net Asset Value – Delaware Tax-Free USA Intermediate | |||
Fund Class B ($2,447,418 / 212,041 Shares) | $11.54 | ||
Net Asset Value – Delaware Tax-Free USA Intermediate | |||
Fund Class C ($29,401,300 / 2,546,755 Shares) | $11.54 |
Components of Net Assets at February 28, 2007: | ||
Shares of beneficial interest | ||
(unlimited authorization – no par) | $263,969,932 | |
Accumulated net realized loss on investments | (299,969 | ) |
Net unrealized appreciation of investments | 6,100,661 | |
Total net assets | $269,770,624 |
Summary of Abbreviations:
AMBAC — Insured by the AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
CDFI — Community Development Financial Institutions
FGIC — Insured by the Financial Guaranty Insurance Company
FSA — Insured by Financial Security Assurance
LOC — Letter of Credit
MBIA — Insured by the Municipal Bond Insurance Association
PSF — Insured by the Permanent School Fund
RADIAN — Insured by Radian Asset Assurance
XLCA — Insured by XL Capital Assurance
§ | Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S. Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 9 in “Notes to Financial Statements.” |
^ | Zero coupon security. The rate shown is the yield at the time of purchase. |
• | Variable rate security. The rate shown is the rate as of February 28, 2007. |
¶ | Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective. |
Net Asset Value and Offering Price per Share – | ||
Delaware Tax-Free USA Intermediate Fund | ||
Net asset value Class A (A) | $11.55 | |
Sales charge (2.75% of offering price) (B) | 0.33 | |
Offering price | $11.88 | |
(A) Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. | ||
(B) See the current prospectus for purchases of $100,000 or more. |
See accompanying notes
20
Delaware National High-Yield Municipal Bond Fund
February 28, 2007 (Unaudited)
Principal | |||
Amount | Value | ||
Municipal Bonds – 97.27% | |||
Corporate Revenue Bonds – 15.67% | |||
•Brazos, Texas River Authority | |||
Pollution Control Revenue | |||
(TXU Energy Co. Project) Series B | |||
6.30% 7/1/32 (AMT) | $1,000,000 | $ 1,079,400 | |
Cloquet, Minnesota Pollution | |||
Control Revenue (Potlatch Corp. | |||
Project) 5.90% 10/1/26 | 750,000 | 769,868 | |
De Soto Parish, Louisiana | |||
Environmental Improvement | |||
Revenue (International Paper Co. | |||
Project) Series A | |||
6.35% 2/1/25 (AMT) | 1,650,000 | 1,773,783 | |
Gulf Coast, Texas Waste Disposal | |||
Authority Revenue (Valero | |||
Energy Corp. Project) | |||
6.65% 4/1/32 (AMT) | 1,000,000 | 1,082,940 | |
Mississippi Business Finance | |||
Corporation Pollution Control | |||
Revenue (System Energy | |||
Resources, Inc. Project) | |||
5.90% 5/1/22 | 900,000 | 909,630 | |
New York City, New York Industrial | |||
Development Agency Special | |||
Facilities Revenue | |||
(Jetblue Airways Corp. Project) | |||
5.125% 5/15/30 (AMT) | 1,000,000 | 1,000,870 | |
Petersburg, Indiana Pollution | |||
Control Revenue (Indianapolis | |||
Power & Light Co. Project) | |||
6.375% 11/1/29 (AMT) | 1,000,000 | 1,086,650 | |
Phenix City, Alabama Industrial | |||
Development Board | |||
Environmental Improvement | |||
Revenue (Mead Westvaco Corp. | |||
Project) Series A | |||
6.35% 5/15/35 (AMT) | 500,000 | 538,840 | |
Sugar Creek, Missouri Industrial | |||
Development Revenue (Lafarge | |||
North America Project) Series A | |||
5.65% 6/1/37 (AMT) | 500,000 | 532,355 | |
Sweetwater County, Wyoming Solid | |||
Waste Disposal Revenue | |||
(FMC Corp. Project) | |||
5.60% 12/1/35 (AMT) | 1,000,000 | 1,069,860 | |
Tobacco Settlement Financing | |||
Corporation, New Jersey | |||
Refunding Senior Series 1A | |||
4.75% 6/1/34 | 1,000,000 | 949,390 | |
5.00% 6/1/41 | 1,000,000 | 979,840 | |
Toledo, Lucas County, Ohio Port | |||
Authority Development Revenue | |||
(Toledo Express Airport Project) | |||
6.375% 11/15/32 (AMT) | 1,000,000 | 1,097,880 | |
12,871,306 | |||
Education Revenue Bonds – 13.32% | |||
Chattanooga, Tennessee Health | |||
Educational & Housing Facilities | |||
Broad Revenue (CDFI Phase I, | |||
LLC Project) Subordinate Series B | |||
6.00% 10/1/35 | 1,000,000 | 1,062,280 | |
Harrisburg, Pennsylvania Authority | |||
University Revenue (Harrisburg | |||
University of Science Project) | |||
Series B 6.00% 9/1/36 | 1,000,000 | 1,033,450 | |
Maine Finance Authority Education | |||
Revenue (Waynflete School | |||
Project) 6.40% 8/1/19 | 1,000,000 | 1,054,370 | |
Maryland State Health & Higher | |||
Educational Facilities Authority | |||
Revenue (Washington Christian | |||
Academy Project) Series A | |||
5.50% 7/1/38 | 1,170,000 | 1,208,973 | |
Massachusetts State Development | |||
Finance Agency Revenue | |||
(Massachusetts College of | |||
Pharmacy Project) Series C | |||
5.75% 7/1/33 | 1,000,000 | 1,083,250 | |
Massachusetts State Health & | |||
Educational Facilities Authority | |||
Revenue (Nichols College Project) | |||
Series C 6.125% 10/1/29 | 1,000,000 | 1,055,970 | |
Milledgeville-Baldwin County, | |||
Georgia Development Authority | |||
Revenue (Georgia College & State | |||
University Foundation Project) | |||
6.00% 9/1/33 | 1,000,000 | 1,112,640 | |
New Jersey State Educational | |||
Facilities Authority Revenue | |||
(Fairleigh Dickinson Project) | |||
Series C 5.50% 7/1/23 | 750,000 | 807,323 | |
New Mexico Educational Assistance | |||
Foundation Student Loan | |||
Revenue 1st Subordinate | |||
Series A-2 6.65% 11/1/25 (AMT) | 985,000 | 987,886 | |
Scranton-Lackawanna, Pennsylvania | |||
Health & Welfare Authority First | |||
Mortgage Revenue (Lackawanna | |||
Junior College Project) | |||
5.75% 11/1/20 | 1,510,000 | 1,536,228 | |
10,942,370 | |||
Health Care Revenue Bonds – 31.16% | |||
Apple Valley, Minnesota Economic | |||
Development Authority Health | |||
Care Revenue Series A | |||
(Augustana Home St. Paul | |||
Project) 6.00% 1/1/40 | 1,000,000 | 1,032,500 | |
(Evercare Senior Living LLC | |||
Project) 6.125% 6/1/35 | 1,000,000 | 1,018,310 |
(continues) 21
Statements of net assets
Delaware National High-Yield Municipal Bond Fund
Principal | |||
Amount | Value | ||
Municipal Bonds (continued) | |||
Health Care Revenue Bonds (continued) | |||
Cleveland-Cuyahoga County, Ohio | |||
Port Authority Revenue Senior | |||
Housing (St. Clarence-Geac) | |||
Series A 6.25% 5/1/38 | $1,000,000 | $ 1,037,580 | |
Colorado Health Facilities Authority | |||
Revenue (Christian Living | |||
Community Project) Series A | |||
5.75% 1/1/37 | 500,000 | 526,485 | |
Dutchess County, New York | |||
Industrial Development Agency | |||
Civic Facility Revenue | |||
(Elant Fishkill Inc.) | |||
Series A 5.25% 1/1/37 | 1,150,000 | 1,161,362 | |
East Rochester, New York Housing | |||
Authority Revenue Refunding | |||
(Senior Living-Woodland Village | |||
Project) 5.50% 8/1/33 | 500,000 | 518,670 | |
Gainesville & Hall County, Georgia | |||
Development Authority Revenue | |||
Senior Living Facilities (Lanier | |||
Village Estates Project) Series C | |||
7.25% 11/15/29 | 1,000,000 | 1,086,750 | |
Illinois Health Facilities | |||
Authority Revenue | |||
(Elmhurst Memorial Healthcare | |||
Project) 5.625% 1/1/28 | 1,000,000 | 1,069,070 | |
(Midwest Physician Group Limited | |||
Project) 5.50% 11/15/19 | 35,000 | 35,269 | |
Knox County, Tennessee Health | |||
Educational & Housing Facilities | |||
Board Hospital Revenue | |||
(East Tennessee Hospital Project) | |||
Series B 5.75% 7/1/33 | 1,300,000 | 1,398,344 | |
Lebanon County, Pennsylvania | |||
Health Facilities Authority | |||
Center Revenue (Pleasant View | |||
Retirement) Series A | |||
5.30% 12/15/26 | 1,000,000 | 1,031,280 | |
Louisiana Public Facilities Authority | |||
Revenue (Ochsner Clinic | |||
Foundation Project) Series B | |||
5.50% 5/15/32 | 1,000,000 | 1,064,660 | |
Maryland State Health & Higher | |||
Education Facilities Authority | |||
Revenue Series A 5.40% 1/1/37 | 1,100,000 | 1,155,308 | |
Massachusetts State Health & | |||
Educational Facilities Authority | |||
Revenue (Jordan Hospital Project) | |||
Series E 6.75% 10/1/33 | 1,000,000 | 1,109,910 | |
Montgomery County, Pennsylvania | |||
Higher Education & Health | |||
Authority Revenue | |||
(Catholic Health East) Series C | |||
5.375% 11/15/34 | 1,000,000 | 1,071,910 | |
New Jersey Economic Development | |||
Authority Revenue | |||
(First Mortgage-Seashore | |||
Gardens Project) | |||
5.30% 11/1/26 | 500,000 | 512,900 | |
5.375% 11/1/36 | 900,000 | 924,183 | |
North Carolina Medical Care | |||
Commission Health Care | |||
Facilities Revenue | |||
(First Mortgage-Presbyterian | |||
Homes) 5.60% 10/1/36 | 1,000,000 | 1,053,010 | |
(Pennybryn at Mayfield Project) | |||
Series A 6.125% 10/1/35 | 2,000,000 | 2,135,339 | |
Philadelphia, Pennsylvania Hospitals | |||
& Higher Education Facilities | |||
Authority Revenue | |||
(The Philadelphia Protestant | |||
Home Project) Series A | |||
6.50% 7/1/27 | 1,100,000 | 1,104,301 | |
Richland County, Ohio Hospital | |||
Facilities Revenue (Medcentral | |||
Health System Project) Series B | |||
6.375% 11/15/30 | 500,000 | 542,090 | |
Shelby County, Tennessee Health | |||
Educational & Housing Facilities | |||
Board Revenue (Trezevant Manor | |||
Project) Series A 5.75% 9/1/37 | 700,000 | 722,757 | |
South Carolina Jobs-Economic | |||
Development Authority Hospital | |||
Revenue (Hampton Regional | |||
Medical Center Project) | |||
5.25% 11/1/36 | 1,000,000 | 998,430 | |
St. Joseph County, Indiana Industrial | |||
Economic Development Revenue | |||
(Madison Center Project) | |||
5.50% 2/15/21 | 1,150,000 | 1,168,872 | |
Winchester, Virginia Industrial | |||
Development Authority | |||
Residential Care Facility Revenue | |||
(Westminster-Canterbury Project) | |||
Series A 5.30% 1/1/35 | 1,000,000 | 1,027,030 | |
Yavapai County, Arizona Industrial | |||
Development Authority Hospital | |||
Revenue (Yavapai Medical Center | |||
Project) Series A 6.00% 8/1/33 | 1,000,000 | 1,087,790 | |
25,594,110 | |||
Lease Revenue Bonds – 3.23% | |||
Dauphin County, Pennsylvania | |||
General Authority Revenue | |||
(Riverfront Office & Parking | |||
Project) Series A 5.75% 1/1/10 | 1,875,000 | 1,878,075 | |
Missouri State Development Finance | |||
Board Infrastructure Facilities | |||
Revenue (Branson Landing | |||
Project) Series A 5.50% 12/1/24 | 720,000 | 772,402 | |
2,650,477 |
22
Principal | |||
Amount | Value | ||
Municipal Bonds (continued) | |||
Local General Obligation Bonds – 11.80% | |||
Chicago, Illinois Tax Increment | |||
Allocation (Chatham Ridge | |||
Redevelopment Project) | |||
5.95% 12/15/12 | $ 750,000 | $ 794,108 | |
Chicago, Illinois Tax Increment | |||
Subordinate (Central Loop | |||
Redevelopment Project) Series A | |||
6.50% 12/1/08 | 1,000,000 | 1,031,910 | |
Farms New Kent, Virginia | |||
Community Development | |||
Authority Special Assessment | |||
Series C 5.80% 3/1/36 | 1,000,000 | 1,012,750 | |
Henderson, Nevada Local | |||
Improvement Districts #T-18 | |||
5.30% 9/1/35 | 1,000,000 | 1,018,600 | |
Las Vegas, Nevada Local Special | |||
Improvement District #808 | |||
(Summerlin Area Project) | |||
6.75% 6/1/21 | 980,000 | 1,013,810 | |
Modesto, California Special Tax | |||
Community Facilities District | |||
#04-1 Village 2 5.15% 9/1/36 | 1,000,000 | 1,027,620 | |
Richmond Heights, Missouri Tax | |||
Increment & Transaction Sales | |||
Tax Revenue Refunding & | |||
Improvement (Francis Place | |||
Redevelopment Project) | |||
5.625% 11/1/25 | 1,200,000 | 1,223,052 | |
St. Joseph, Missouri Industrial | |||
Development Authority Tax | |||
Increment Revenue (Shoppes at | |||
North Village Project) Series A | |||
5.375% 11/1/24 | 1,000,000 | 1,019,440 | |
5.50% 11/1/27 | 500,000 | 514,610 | |
Winter Garden Village at Fowler | |||
Groves Community Development | |||
District, Florida Special | |||
Assessment Revenue | |||
5.65% 5/1/37 | 1,000,000 | 1,038,710 | |
9,694,610 | |||
§Pre-Refunded Bonds – 14.12% | |||
Bexar County, Texas Health Facilities | |||
Development Corporation | |||
Revenue (Army Retirement | |||
Residence Project) | |||
6.30% 7/1/32-12 | 1,000,000 | 1,129,250 | |
Golden State, California Tobacco | |||
Securitization Corporation | |||
Settlement Revenue Series B | |||
5.50% 6/1/43-13 | 1,500,000 | 1,649,955 | |
Illinois Educational Facilities | |||
Authority Student Housing | |||
Revenue (Educational | |||
Advancement Fund-University | |||
Center Project) 6.25% 5/1/30-12 | 1,000,000 | 1,129,580 | |
Maryland State Economic | |||
Development Corporation, | |||
Student Housing Revenue | |||
(University of Maryland College | |||
Park Project) 5.625% 6/1/35-13 | 1,000,000 | 1,109,850 | |
Minnesota State Higher Education | |||
Facilities Authority Revenue | |||
(College of Art & Design Project) | |||
Series 5-D 6.75% 5/1/26-10 | 500,000 | 534,805 | |
Mississippi Development Bank | |||
Special Obligation (Madison | |||
County Hospital Project) | |||
6.40% 7/1/29-09 | 1,585,000 | 1,709,708 | |
Montgomery County, Pennsylvania | |||
Higher Education & Health | |||
Authority Revenue | |||
(Foulkeways at Gwynedd Project) | |||
6.75% 11/15/30-09 | 1,000,000 | 1,088,270 | |
Richland County, Ohio Hospital | |||
Facilities Revenue (Medcentral | |||
Health System Project) Series B | |||
6.375% 11/15/30-10 | 1,000,000 | 1,101,970 | |
Rochester, Minnesota Multifamily | |||
Housing Revenue (Wedum | |||
Shorewood Campus Project) | |||
6.60% 6/1/36-09 | 985,000 | 1,062,618 | |
Savannah, Georgia Economic | |||
Development Authority Revenue | |||
(College of Art & Design Project) | |||
6.50% 10/1/13-09 | 1,000,000 | 1,085,050 | |
11,601,056 | |||
Special Tax Bonds – 4.63% | |||
Baltimore, Maryland Convention | |||
Center Hotel Revenue | |||
Suborinated Series B | |||
5.875% 9/1/39 | 1,000,000 | 1,068,620 | |
Middlesex County, New Jersey | |||
Improvement Authority Senior | |||
Revenue (Heldrich Center Hotel/ | |||
Conference Project) Series A | |||
5.00% 1/1/32 | 500,000 | 504,650 | |
5.125% 1/1/37 | 870,000 | 883,407 | |
New Jersey Economic Development | |||
Authority (Cigarette Tax) | |||
5.75% 6/15/34 | 1,000,000 | 1,079,399 | |
Prescott Valley, Arizona | |||
Improvement District Special | |||
Assessment (Sewer Collection | |||
System Roadway Repair Project) | |||
7.90% 1/1/12 | 261,000 | 269,086 | |
3,805,162 |
(continues) 23
Statements of net assets
Delaware National High-Yield Municipal Bond Fund
Principal | ||||||||
Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Transportation Revenue Bonds – 3.34% | ||||||||
New York City, New York Industrial | ||||||||
Development Agency Special | ||||||||
Airport Facilities (Airis JFK I LLC | ||||||||
Project) Series A | ||||||||
5.50% 7/1/28 (AMT) | $ | 905,000 | $ | 940,892 | ||||
Oklahoma City, Oklahoma Industrial | ||||||||
& Cultural Facilities Subordinated | ||||||||
(Air Cargo Obligated Group | ||||||||
Project) 6.75% 1/1/23 (AMT) | 1,160,000 | 1,253,775 | ||||||
Onondaga County, New York | ||||||||
Industrial Development Authority | ||||||||
Revenue Subordinated (Air | ||||||||
Cargo Project) 7.25% 1/1/32 | ||||||||
(AMT) | 500,000 | 544,765 | ||||||
2,739,432 | ||||||||
Total Municipal Bonds | ||||||||
(cost $75,187,662) | 79,898,523 | |||||||
Total Value of Securities – 97.27% | ||||||||
(cost $75,187,662) | 79,898,523 | |||||||
Receivables and Other Assets Net of | ||||||||
Liabilities – 2.73% | 2,244,670 | |||||||
Net Assets Applicable to 7,863,543 | ||||||||
Shares Outstanding – 100.00% | $ | 82,143,193 | ||||||
Net Asset Value – Delaware National High-Yield | ||||||||
Municipal Bond Fund Class A | ||||||||
($69,346,954 / 6,641,580 Shares) | $10.44 | |||||||
Net Asset Value – Delaware National High-Yield | ||||||||
Municipal Bond Fund Class B | ||||||||
($7,802,507 / 745,567 Shares) | $10.47 | |||||||
Net Asset Value – Delaware National High-Yield | ||||||||
Municipal Bond Fund Class C | ||||||||
($4,993,732 / 476,396 Shares) | $10.48 | |||||||
Components of Net Assets at February 28, 2007: | ||||||||
Shares of beneficial interest | ||||||||
(unlimited authorization – no par) | $ | 83,609,657 | ||||||
Distributions in excess of net investment income | (4,104 | ) | ||||||
Accumulated net realized loss on investments | (6,173,221 | ) | ||||||
Net unrealized appreciation of investments | 4,710,861 | |||||||
Total net assets | $ | 82,143,193 | ||||||
Summary of Abbreviations: | ||||||||
AMT — Subject to Alternative Minimum Tax | ||||||||
CDFI — Community Development Financial Institutions |
§ | Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S. Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 9 in “Notes to Financial Statements.” |
• | Variable rate security. The rate shown is the rate as of February 28, 2007. |
Net Asset Value and Offering Price per Share – | |
Delaware National High-Yield Municipal Bond Fund | |
Net asset value Class A (A) | $10.44 |
Sales charge (4.50% of offering price) (B) | 0.49 |
Offering price | $10.93 |
(A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. | |
(B) | See the current prospectus for purchases of $100,000 or more. |
See accompanying notes
24
Statements of operations
Six Months Ended February 28, 2007 (Unaudited)
Delaware | Delaware | Delaware | ||||||||
Tax-Free | Tax-Free USA | National High-Yield | ||||||||
USA | Intermediate | Municipal Bond | ||||||||
Fund | Fund | Fund | ||||||||
Investment Income: | ||||||||||
Interest | $16,701,160 | $5,484,938 | $2,282,304 | |||||||
Expenses: | ||||||||||
Management fees | 1,810,119 | 617,566 | 226,969 | |||||||
Distribution expenses – Class A | 768,042 | 322,953 | 86,265 | |||||||
Distribution expenses – Class B | 101,329 | 12,047 | 42,150 | |||||||
Distribution expenses – Class C | 72,332 | 142,005 | 25,553 | |||||||
Dividend disbursing and transfer agent fees and expenses | 196,718 | 155,970 | 31,543 | |||||||
Accounting and administration expenses | 134,892 | 49,582 | 16,507 | |||||||
Trustees’ fees and benefits | 105,109 | 37,660 | 12,705 | |||||||
Registration fees | 50,375 | 29,137 | 20,924 | |||||||
Legal fees | 45,890 | 12,487 | 6,995 | |||||||
Reports and statements to shareholders | 23,134 | 10,051 | 3,516 | |||||||
Audit and tax | 21,131 | 9,790 | 7,154 | |||||||
Insurance fees | 8,527 | 3,846 | 1,051 | |||||||
Custodian fees | 6,767 | 1,981 | 1,695 | |||||||
Consulting fees | 5,937 | 3,043 | 1,065 | |||||||
Pricing fees | 3,820 | 2,582 | 1,545 | |||||||
Trustees’ fees | 1,164 | 588 | 121 | |||||||
Dues and services | 977 | 244 | 98 | |||||||
Taxes (other than taxes on income) | 785 | 349 | 167 | |||||||
3,357,048 | 1,411,881 | 486,023 | ||||||||
Less expenses absorbed or waived | (269,496 | ) | (174,597 | ) | (56,245 | ) | ||||
Less waived distribution expenses – Class A | — | (161,477 | ) | — | ||||||
Less expense paid indirectly | (3,007 | ) | (1,189 | ) | (1,167 | ) | ||||
Total operating expenses | 3,084,545 | 1,074,618 | 428,611 | |||||||
Net Investment Income | 13,616,615 | 4,410,320 | 1,853,693 | |||||||
Net Realized and Unrealized Gain on Investments: | ||||||||||
Net realized gain on investments | 1,053,419 | 326,341 | 564,757 | |||||||
Net change in unrealized appreciation/depreciation of investments | 5,105,740 | 1,370,484 | 370,282 | |||||||
Net Realized and Unrealized Gain on Investments | 6,159,159 | 1,696,825 | 935,039 | |||||||
Net Increase in Net Assets Resulting from Operations | $19,775,774 | $6,107,145 | $2,788,732 |
See accompanying notes
25
Statements of changes in net assets
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | ||||||||||||||||||||||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | ||||||||||||||||||||||
Six Months | Six Months | Six Months | ||||||||||||||||||||||
Ended | Year Ended | Ended | Year Ended | Ended | Year Ended | |||||||||||||||||||
2/28/07 | 8/31/06 | 2/28/07 | 8/31/06 | 2/28/07 | 8/31/06 | |||||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||||||||
Increase (Decrease) in Net Assets from | ||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||
Net investment income | $ | 13,616,615 | $ | 21,127,920 | $ | 4,410,320 | $ | 6,342,427 | $ | 1,853,693 | $ | 3,772,133 | ||||||||||||
Net realized gain (loss) on investments | 1,053,419 | 2,988,364 | 326,341 | (265,888 | ) | 564,757 | (833,966 | ) | ||||||||||||||||
Net change in unrealized appreciation/ | ||||||||||||||||||||||||
depreciation of investments | 5,105,740 | (7,385,302 | ) | 1,370,484 | (992,386 | ) | 370,282 | 363,826 | ||||||||||||||||
Net increase in net assets resulting from | ||||||||||||||||||||||||
operations | 19,775,774 | 16,730,982 | 6,107,145 | 5,084,153 | 2,788,732 | 3,301,993 | ||||||||||||||||||
Dividends and Distributions to Shareholders | ||||||||||||||||||||||||
from: | ||||||||||||||||||||||||
Net investment income: | ||||||||||||||||||||||||
Class A | (13,027,856 | ) | (20,605,670 | ) | (3,972,603 | ) | (5,539,037 | ) | (1,593,031 | ) | (3,117,5571 | ) | ||||||||||||
Class B | (335,447 | ) | (494,733 | ) | (34,232 | ) | (70,059 | ) | (162,370 | ) | (443,794 | ) | ||||||||||||
Class C | (239,451 | ) | (249,348 | ) | (403,485 | ) | (733,331 | ) | (98,292 | ) | (209,884 | ) | ||||||||||||
(13,602,754 | ) | (21,349,751 | ) | (4,410,320 | ) | (6,342,427 | ) | (1,853,693 | ) | (3,771,235 | ) | |||||||||||||
Capital Share Transactions: | ||||||||||||||||||||||||
Proceeds from shares sold: | ||||||||||||||||||||||||
Class A | 7,769,092 | 167,570,325 | 52,936,841 | 119,156,024 | 5,530,531 | 11,000,812 | ||||||||||||||||||
Class B | 221,891 | 1,380,980 | 228,851 | 597,273 | 269,420 | 780,564 | ||||||||||||||||||
Class C | 1,449,726 | 3,261,988 | 4,109,263 | 7,130,929 | 140,533 | 1,576,137 | ||||||||||||||||||
Net asset value of shares issued upon | ||||||||||||||||||||||||
reinvestment of dividends and distributions: | ||||||||||||||||||||||||
Class A | 6,354,066 | 10,377,867 | 2,847,205 | 3,941,206 | 962,432 | 1,923,145 | ||||||||||||||||||
Class B | 207,876 | 300,459 | 27,192 | 54,532 | 67,744 | 206,858 | ||||||||||||||||||
Class C | 164,475 | 186,252 | 239,752 | 416,628 | 71,623 | 131,125 | ||||||||||||||||||
Net assets from reorganization1: | ||||||||||||||||||||||||
Class A | — | 116,026,119 | — | — | — | — | ||||||||||||||||||
Class B | — | 11,168,095 | — | — | — | — | ||||||||||||||||||
Class C | — | 8,018,844 | — | — | — | — | ||||||||||||||||||
16,167,126 | 318,290,929 | 60,389,104 | 131,296,592 | 7,042,283 | 15,618,641 | |||||||||||||||||||
Cost of shares repurchased: | ||||||||||||||||||||||||
Class A | (44,978,028 | ) | (86,626,741 | ) | (23,876,100 | ) | (37,921,560 | ) | (6,584,819 | ) | (10,375,066 | ) | ||||||||||||
Class B | (4,068,021 | ) | (7,029,177 | ) | (237,303 | ) | (1,404,656 | ) | (2,153,929 | ) | (4,410,676 | ) | ||||||||||||
Class C | (2,169,446 | ) | (2,356,085 | ) | (3,143,972 | ) | (4,371,376 | ) | (609,653 | ) | (1,580,167 | ) | ||||||||||||
(51,215,495 | ) | (96,012,003 | ) | (27,257,375 | ) | (43,697,592 | ) | (9,348,401 | ) | (16,365,909 | ) | |||||||||||||
Increase (decrease) in net assets derived from | ||||||||||||||||||||||||
capital share transactions | (35,048,369 | ) | 222,278,926 | 33,131,729 | 87,599,000 | (2,306,118 | ) | (747,268 | ) | |||||||||||||||
Net Increase (Decrease) in Net Assets | (28,875,349 | ) | 217,660,157 | 34,828,554 | 86,340,726 | (1,371,079 | ) | (1,216,510 | ) | |||||||||||||||
Net Assets: | ||||||||||||||||||||||||
Beginning of period | 694,111,864 | 476,451,707 | 234,942,070 | 148,601,344 | 83,514,272 | 84,730,782 | ||||||||||||||||||
End of period | $ | 665,236,515 | $ | 694,111,864 | $ | 269,770,624 | $ | 234,942,070 | $ | 82,143,193 | $ | 83,514,272 | ||||||||||||
Undistributed (distributions in excess of) net | ||||||||||||||||||||||||
investment income | $ | 1,790 | $ | (12,071 | ) | $ | — | $ | — | $ | (4,104 | ) | $ | (4,104 | ) |
1 See Note 7 in “Notes to Financial Statements.”
See accompanying notes
26
Financial highlights
Delaware Tax-Free USA Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.570 | $ 11.760 | $ 11.460 | $ 11.170 | $ 11.280 | $ 11.320 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.235 | 0.458 | 0.512 | 0.538 | 0.537 | 0.566 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.110 | (0.186 | ) | 0.300 | 0.290 | (0.110 | ) | (0.040 | ) | ||||||||
Total from investment operations | 0.345 | 0.272 | 0.812 | 0.828 | 0.427 | 0.526 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.235 | ) | (0.462 | ) | (0.512 | ) | (0.538 | ) | (0.537 | ) | (0.566 | ) | |||||
Total dividends and distributions | (0.235 | ) | (0.462 | ) | (0.512 | ) | (0.538 | ) | (0.537 | ) | (0.566 | ) | |||||
Net asset value, end of period | $ 11.680 | $ 11.570 | $ 11.760 | $ 11.460 | $ 11.170 | $ 11.280 | |||||||||||
Total return2 | 3.01% | 2.42% | 7.23% | 7.54% | 3.84% | 4.85% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $631,809 | $656,813 | $453,982 | $456,192 | $460,917 | $495,731 | |||||||||||
Ratio of expenses to average net assets | 0.88% | 0.86% | 0.86% | 0.87% | 0.87% | 0.87% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 0.96% | 1.00% | 0.98% | 0.93% | 0.97% | 0.98% | |||||||||||
Ratio of net investment income to average net assets | 4.07% | 3.97% | 4.43% | 4.72% | 4.74% | 5.08% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.99% | 3.83% | 4.31% | 4.66% | 4.64% | 4.97% | |||||||||||
Portfolio turnover | 30% | 41% | 47% | 32% | 96% | 99% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager and distributor, as applicable. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
(continues) 27
Financial highlights
Delaware Tax-Free USA Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.570 | $ 11.760 | $ 11.460 | $ 11.170 | $ 11.280 | $ 11.320 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.191 | 0.370 | 0.423 | 0.449 | 0.449 | 0.479 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.100 | (0.186 | ) | 0.300 | 0.290 | (0.110 | ) | (0.040 | ) | ||||||||
Total from investment operations | 0.291 | 0.184 | 0.723 | 0.739 | 0.339 | 0.439 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.191 | ) | (0.374 | ) | (0.423 | ) | (0.449 | ) | (0.449 | ) | (0.479 | ) | |||||
Total dividends and distributions | (0.191 | ) | (0.374 | ) | (0.423 | ) | (0.449 | ) | (0.449 | ) | (0.479 | ) | |||||
Net asset value, end of period | $ 11.670 | $ 11.570 | $ 11.760 | $ 11.460 | $ 11.170 | $ 11.280 | |||||||||||
Total return2 | 2.53% | 1.63% | 6.42% | 6.71% | 3.03% | 4.04% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $18,738 | $22,189 | $16,507 | $22,396 | $31,052 | $37,448 | |||||||||||
Ratio of expenses to average net assets | 1.64% | 1.63% | 1.63% | 1.65% | 1.65% | 1.65% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.72% | 1.73% | 1.71% | 1.71% | 1.75% | 1.76% | |||||||||||
Ratio of net investment income to average net assets | 3.31% | 3.20% | 3.66% | 3.94% | 3.96% | 4.30% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.23% | 3.10% | 3.58% | 3.88% | 3.86% | 4.19% | |||||||||||
Portfolio turnover | 30% | 41% | 47% | 32% | 96% | 99% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
28
Delaware Tax-Free USA Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.570 | $ 11.760 | $ 11.460 | $ 11.170 | $ 11.280 | $ 11.320 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.191 | 0.370 | 0.423 | 0.449 | 0.449 | 0.479 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.110 | (0.186 | ) | 0.300 | 0.290 | (0.110 | ) | (0.040 | ) | ||||||||
Total from investment operations | 0.301 | 0.184 | 0.723 | 0.739 | 0.339 | 0.439 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.191 | ) | (0.374 | ) | (0.423 | ) | (0.449 | ) | (0.449 | ) | (0.479 | ) | |||||
Total dividends and distributions | (0.191 | ) | (0.374 | ) | (0.423 | ) | (0.449 | ) | (0.449 | ) | (0.479 | ) | |||||
Net asset value, end of period | $ 11.680 | $ 11.570 | $ 11.760 | $ 11.460 | $ 11.170 | $ 11.280 | |||||||||||
Total return2 | 2.62% | 1.63% | 6.42% | 6.71% | 3.03% | 4.04% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $14,690 | $15,110 | $5,963 | $5,784 | $5,508 | $5,979 | |||||||||||
Ratio of expenses to average net assets | 1.64% | 1.63% | 1.63% | 1.65% | 1.65% | 1.65% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.72% | 1.73% | 1.71% | 1.71% | 1.75% | 1.76% | |||||||||||
Ratio of net investment income to average net assets | 3.31% | 3.20% | 3.66% | 3.94% | 3.96% | 4.30% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.23% | 3.10% | 3.58% | 3.88% | 3.86% | 4.19% | |||||||||||
Portfolio turnover | 30% | 41% | 47% | 32% | 96% | 99% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
(continues) 29
Financial highlights
Delaware Tax-Free USA Intermediate Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.470 | $ 11.610 | $ 11.390 | $ 11.010 | $ 11.020 | $ 10.890 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.211 | 0.408 | 0.410 | 0.419 | 0.435 | 0.462 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.080 | (0.140 | ) | 0.220 | 0.380 | (0.010 | ) | 0.130 | |||||||||
Total from investment operations | 0.291 | 0.268 | 0.630 | 0.799 | 0.425 | 0.592 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.211 | ) | (0.408 | ) | (0.410 | ) | (0.419 | ) | (0.435 | ) | (0.462 | ) | |||||
Total dividends and distributions | (0.211 | ) | (0.408 | ) | (0.410 | ) | (0.419 | ) | (0.435 | ) | (0.462 | ) | |||||
Net asset value, end of period | $ 11.550 | $ 11.470 | $ 11.610 | $ 11.390 | $ 11.010 | $ 11.020 | |||||||||||
Total return2 | 2.55% | 2.38% | 5.63% | 7.36% | 3.89% | 5.63% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $237,922 | $204,525 | $120,273 | $77,448 | $51,479 | $26,075 | |||||||||||
Ratio of expenses to average net assets | 0.76% | 0.75% | 0.79% | 0.80% | 0.80% | 0.80% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.06% | 1.07% | 1.11% | 1.09% | 1.15% | 0.94% | |||||||||||
Ratio of net investment income to average net assets | 3.68% | 3.56% | 3.55% | 3.70% | 3.85% | 4.28% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.38% | 3.24% | 3.23% | 3.41% | 3.50% | 4.14% | |||||||||||
Portfolio turnover | 29% | 37% | 18% | 27% | 130% | 195% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager and distibutor. Performance would have been lower had the expense limitation not been in effect. | |
3 Ratio for the year ended August 31, 2004, including fees paid indirectly in accordance with Securities and Exchange Commission rules was 0.82%. |
See accompanying notes
30
Delaware Tax-Free USA Intermediate Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.460 | $ 11.610 | $ 11.380 | $ 11.010 | $ 11.020 | $ 10.890 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.162 | 0.311 | 0.313 | 0.323 | 0.340 | 0.371 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.080 | (0.150 | ) | 0.230 | 0.370 | (0.010 | ) | 0.130 | |||||||||
Total from investment operations | 0.242 | 0.161 | 0.543 | 0.693 | 0.330 | 0.501 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.162 | ) | (0.311 | ) | (0.313 | ) | (0.323 | ) | (0.340 | ) | (0.371 | ) | |||||
Total dividends and distributions | (0.162 | ) | (0.311 | ) | (0.313 | ) | (0.323 | ) | (0.340 | ) | (0.371 | ) | |||||
Net asset value, end of period | $ 11.540 | $ 11.460 | $ 11.610 | $ 11.380 | $ 11.010 | $ 11.020 | |||||||||||
Total return2 | 2.12% | 1.43% | 4.83% | 6.36% | 3.02% | 4.74% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $2,448 | $2,413 | $3,203 | $3,743 | $4,538 | $3,384 | |||||||||||
Ratio of expenses to average net assets | 1.61% | 1.60% | 1.64% | 1.65% | 1.65% | 1.65% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.76% | 1.77% | 1.81% | 1.79% | 1.87% | 1.79% | |||||||||||
Ratio of net investment income to average net assets | 2.83% | 2.71% | 2.70% | 2.85% | 3.00% | 3.43% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 2.68% | 2.54% | 2.53% | 2.71% | 2.78% | 3.29% | |||||||||||
Portfolio turnover | 29% | 37% | 18% | 27% | 130% | 195% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. | |
3 Ratio for the year ended August 31, 2004, including fees paid indirectly in accordance with Securities and Exchange Commission rules was 1.67%. |
See accompanying notes
(continues) 31
Financial highlights
Delaware Tax-Free USA Intermediate Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.470 | $ 11.610 | $ 11.390 | $ 11.010 | $ 11.020 | $ 10.890 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.162 | 0.311 | 0.313 | 0.323 | 0.340 | 0.371 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.070 | (0.140 | ) | 0.220 | 0.380 | (0.010 | ) | 0.130 | |||||||||
Total from investment operations | 0.232 | 0.171 | 0.533 | 0.703 | 0.330 | 0.501 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.162 | ) | (0.311 | ) | (0.313 | ) | (0.323 | ) | (0.340 | ) | (0.371 | ) | |||||
Total dividends and distributions | (0.162 | ) | (0.311 | ) | (0.313 | ) | (0.323 | ) | (0.340 | ) | (0.371 | ) | |||||
Net asset value, end of period | $ 11.540 | $ 11.470 | $ 11.610 | $ 11.390 | $ 11.010 | $ 11.020 | |||||||||||
Total return2 | 2.04% | 1.52% | 4.74% | 6.45% | 3.02% | 4.74% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $29,401 | $28,004 | $25,125 | $19,201 | $10,542 | $7,291 | |||||||||||
Ratio of expenses to average net assets | 1.61% | 1.60% | 1.64% | 1.65% | 3 | 1.65% | 1.65% | ||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.76% | 1.77% | 1.81% | 1.79% | 1.87% | 1.79% | |||||||||||
Ratio of net investment income to average net assets | 2.83% | 2.71% | 2.70% | 2.85% | 3.00% | 3.43% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 2.68% | 2.54% | 2.53% | 2.71% | 2.78% | 3.29% | |||||||||||
Portfolio turnover | 29% | 37% | 18% | 27% | 130% | 195% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. | |
3 Ratio for the year ended August 31, 2004, including fees paid indirectly in accordance with Securities and Exchange Commission rules was 1.67%. |
See accompanying notes
32
Delaware National High-Yield Municipal Bond Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 10.320 | $ 10.380 | $ 10.010 | $ 9.730 | $ 9.950 | $ 10.240 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.238 | 0.477 | 0.503 | 0.496 | 0.522 | 0.542 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.120 | (0.060 | ) | 0.371 | 0.280 | (0.219 | ) | (0.290 | ) | ||||||||
Total from investment operations | 0.358 | 0.417 | 0.874 | 0.776 | 0.303 | 0.252 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.238 | ) | (0.477 | ) | (0.504 | ) | (0.496 | ) | (0.523 | ) | (0.542 | ) | |||||
Total dividends and distributions | (0.238 | ) | (0.477 | ) | (0.504 | ) | (0.496 | ) | (0.523 | ) | (0.542 | ) | |||||
Net asset value, end of period | $ 10.440 | $ 10.320 | $ 10.380 | $ 10.010 | $ 9.730 | $ 9.950 | |||||||||||
Total return2 | 3.50% | 4.15% | 8.93% | 8.13% | 3.13% | 2.59% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $69,347 | $68,663 | $66,451 | $56,698 | $59,829 | $64,259 | |||||||||||
Ratio of expenses to average net assets | 0.92% | 0.90% | 0.93% | 1.00% | 0.99% | 0.96% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.05% | 1.02% | 1.01% | 1.02% | 1.05% | 1.04% | |||||||||||
Ratio of net investment income to average net assets | 4.61% | 4.66% | 4.92% | 5.00% | 5.30% | 5.42% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 4.48% | 4.54% | 4.84% | 4.98% | 5.24% | 5.34% | |||||||||||
Portfolio turnover | 53% | 73% | 36% | 46% | 64% | 53% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
(continues) 33
Financial highlights
Delaware National High-Yield Municipal Bond Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 10.350 | $ 10.400 | $ 10.030 | $ 9.760 | $ 9.980 | $ 10.260 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.199 | 0.400 | 0.426 | 0.421 | 0.448 | 0.467 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.120 | (0.050 | ) | 0.371 | 0.270 | (0.219 | ) | (0.281 | ) | ||||||||
Total from investment operations | 0.319 | 0.350 | 0.797 | 0.691 | 0.229 | 0.186 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.199 | ) | (0.400 | ) | (0.427 | ) | (0.421 | ) | (0.449 | ) | (0.466 | ) | |||||
Total dividends and distributions | (0.199 | ) | (0.400 | ) | (0.427 | ) | (0.421 | ) | (0.449 | ) | (0.466 | ) | |||||
Net asset value, end of period | $ 10.470 | $ 10.350 | $ 10.400 | $ 10.030 | $ 9.760 | $ 9.980 | |||||||||||
Total return2 | 3.11% | 3.47% | 8.10% | 7.20% | 2.36% | 1.91% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $7,802 | $9,519 | $13,046 | $14,534 | $16,499 | $20,021 | |||||||||||
Ratio of expenses to average net assets | 1.67% | 1.65% | 1.68% | 1.75% | 1.74% | 1.71% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.80% | 1.77% | 1.76% | 1.77% | 1.80% | 1.79% | |||||||||||
Ratio of net investment income to average net assets | 3.86% | 3.91% | 4.17% | 4.25% | 4.55% | 4.67% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.73% | 3.79% | 4.09% | 4.23% | 4.49% | 4.59% | |||||||||||
Portfolio turnover | 53% | 73% | 36% | 46% | 64% | 53% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
34
Delaware National High-Yield Municipal Bond Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 10.360 | $ 10.420 | $ 10.040 | $ 9.770 | $ 9.990 | $ 10.270 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.199 | 0.400 | 0.426 | 0.421 | 0.448 | 0.467 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.120 | (0.060 | ) | 0.381 | 0.270 | (0.219 | ) | (0.281 | ) | ||||||||
Total from investment operations | 0.319 | 0.340 | 0.807 | 0.691 | 0.229 | 0.186 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.199 | ) | (0.400 | ) | (0.427 | ) | (0.421 | ) | (0.449 | ) | (0.466 | ) | |||||
Total dividends and distributions | (0.199 | ) | (0.400 | ) | (0.427 | ) | (0.421 | ) | (0.449 | ) | (0.466 | ) | |||||
Net asset value, end of period | $ 10.480 | $ 10.360 | $ 10.420 | $ 10.040 | $ 9.770 | $ 9.990 | |||||||||||
Total return2 | 3.10% | 3.36% | 8.19% | 7.19% | 2.35% | 1.92% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $4,994 | $5,332 | $5,234 | $4,798 | $5,318 | $6,405 | |||||||||||
Ratio of expenses to average net assets | 1.67% | 1.65% | 1.68% | 1.75% | 1.74% | 1.71% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.80% | 1.77% | 1.76% | 1.77% | 1.80% | 1.79% | |||||||||||
Ratio of net investment income to average net assets | 3.86% | 3.91% | 4.17% | 4.25% | 4.55% | 4.67% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.73% | 3.79% | 4.09% | 4.23% | 4.49% | 4.59% | |||||||||||
Portfolio turnover | 53% | 73% | 36% | 46% | 64% | 53% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
35
Notes to financial statements
Delaware National Tax-Free Funds
February 28, 2007 (Unaudited)
Delaware Group Tax-Free Fund is organized as a Delaware statutory trust and offers two series: Delaware Tax-Free USA Fund and Delaware Tax-Free USA Intermediate Fund. Voyageur Mutual Funds is organized as a Delaware statutory trust and offers five series: Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund, Delaware Minnesota High-Yield Municipal Bond Fund, Delaware National High-Yield Municipal Bond Fund and Delaware Tax-Free New York Fund. Delaware Group Tax-Free Fund and Voyageur Mutual Funds are individually referred to as a “Trust” and collectively as the . These financial statements and the related notes pertain to Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund and Delaware National High-Yield Municipal Bond Fund (each referred to as a “Fund” or, collectively, as the “Funds”). The above Trusts are open-end investment companies. The Funds are considered non-diversified under the Investment Company Act of 1940, as amended. The Funds offer Class A, Class B, and Class C shares. Class A shares are sold with a front-end sales charge of up to 4.50% for Delaware Tax-Free USA Fund and Delaware National High-Yield Municipal Bond Fund, and up to 2.75% for Delaware Tax-Free USA Intermediate Fund. Class A share purchases of $1,000,000 or more will incur a contingent deferred sales charge of up to 1% if redeemed during the first year and 0.50% during the second year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Class B shares of the Delaware Tax-Free USA Fund and Delaware National High-Yield Municipal Bond Fund are sold with a contingent deferred sales charge that declines from 4% to zero depending upon the period of time the shares are held and will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase. Class B shares of Delaware Tax-Free USA Intermediate Fund are sold with a contingent deferred sales charge that declines from 2% to zero depending upon the period of time the shares are held and will automatically convert to Class A shares on a quarterly basis approximately five years after purchase. Class C shares are sold with a contingent deferred sales charge of 1%, if redeemed during the first twelve months.
The investment objective of Delaware Tax-Free USA Fund and Delaware Tax-Free USA Intermediate Fund is to seek as high a level of current interest income exempt from federal income tax as is available from municipal obligations and as is consistent with prudent investment management and preservation of capital.
The investment objective of Delaware National High-Yield Municipal Bond Fund is to seek a high level of current income exempt from federal income tax primarily through investment in medium- and lower-grade municipal obligations.
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. 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. Short-term debt securities 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 under the direction of each Fund’s Board of Trustees. In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures, or with respect to foreign securities, aftermarket trading or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).
In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 “Fair Value Measurements” (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.
Federal Income Taxes — Each Fund intends to continue to qualify for federal income tax purposes 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.
On July 13, 2006, FASB released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing each Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in each Fund’s net asset value calculations as late as each Fund’s last net asset value calculation in the first required financial statement reporting period. As a result, each Fund will incorporate FIN 48 in its semiannual report on February 28, 2008. Although each Fund’s tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on each Fund’s financial statements.
Class Accounting — Investment income and common expenses are allocated to the classes of the Funds on the basis of “settled shares” of each class in relation to the net assets of the Funds. Realized and unrealized gains (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.
Use of Estimates — The preparation of financial statements in conformity with U.S. 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.
36
1. Significant Accounting Policies (continued)
Other — Expenses directly attributable to the Funds are charged directly to the Funds. Other expenses common to various funds within the Delaware Investments® Family of Funds are generally allocated amongst such funds on the basis of average net assets. Management fees and some other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. 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. Discounts and premiums are amortized to interest income over the lives of the respective securities. Each Fund declares dividends daily from net investment income and pays such dividends monthly and declares and pays distributions from net realized gain on investments, if any, annually.
The Funds receive earnings credits from their custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees on the Statements of Operations with the corresponding expense offset shown as “expense paid indirectly.”
2. Investment Management, Administration Agreements and Other Transactions with Affiliates
In accordance with the terms of its respective investment management agreement, each Fund pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee based on each Fund’s average daily net assets as follows:
Delaware Tax-Free | Delaware Tax-Free USA | Delaware National High-Yield | ||||
USA Fund | Intermediate Fund | Municipal Bond Fund | ||||
On the first $500 million | 0.550% | 0.500% | 0.550% | |||
On the next $500 million | 0.500% | 0.475% | 0.500% | |||
On the next $1.5 billion | 0.450% | 0.450% | 0.450% | |||
In excess of $2.5 billion | 0.425% | 0.425% | 0.425% |
DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse each Fund to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, 12b-1 plan expense, certain insurance costs and non-routine expenses or costs, do not exceed specified percentages of average daily net assets as shown below:
Delaware Tax-Free | Delaware Tax-Free USA | Delaware National High-Yield | ||||
USA Fund | Intermediate Fund | Municipal Bond Fund | ||||
Operating expense limitation as | ||||||
a percentage of average daily | ||||||
net assets (per annum) | 0.62% | 0.60% | 0.65% | |||
Expiration date | 2/15/07 | 2/15/07 | 2/15/07 | |||
Effective February 16, 2007, | ||||||
Operating expense limitation | ||||||
as a percentage of average | ||||||
daily net assets (per annum) | 0.61% | 0.60% | 0.65% | |||
Expiration date | 8/31/08 | 12/31/07 | 12/31/07 |
Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. Each Fund pays DSC a monthly fee computed at the annual rate of 0.04% of each Fund’s average daily net assets for accounting and administration services. Each Fund pays DSC a monthly fee based on the number of shareholder accounts for dividend disbursing and transfer agent services.
Pursuant to a distribution agreement and distribution plan, each Fund pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.25% of the average daily net assets of the Class A shares for Delaware National High-Yield Municipal Bond Fund, 0.30% of the average daily net assets of the Class A shares for the Delaware Tax-Free USA Intermediate Fund and 1.00% of the average daily net assets of the Class B and C shares for all Funds. The Board of Trustees has adopted a formula for calculating 12b-1 plan fees for Delaware Tax-Free USA Fund’s Class A shares that went into effect on June 1, 1992. The total 12b-1 fees to be paid by Class A shareholders of each Fund will be the sum of 0.10% of the average daily net assets representing shares that were acquired prior to June 1, 1992 and 0.30% of the average daily net assets representing shares that were acquired on or after June 1, 1992. Effective April 21, 2006, the maximum amount of the Class A 12b-1 fees was reduced to 0.25% and the total 12b-1 fees to be paid to Class A shareholders of the Fund will be the sum of 0.10% of the average daily net assets representing shares that were acquired prior to June 1, 1992 and 0.25% of the average daily net assets representing shares that were acquired on or after June 1, 1992. All Class A shareholders will bear 12b-1 fees at the same rate, the blended rate based upon the allocation of the rates described above. DDLP has contracted to waive distribution and service fees through December 31, 2007 in order to prevent distribution and service fees of Class A from exceeding 0.15% of the average daily net assets for the Delaware Tax-Free USA Intermediate Fund.
(continues) 37
Notes to financial statements
Delaware National Tax-Free Funds
2. Investment Management, Administration Agreements and Other Transactions with Affiliates (continued)
At February 28, 2007, the Funds had liabilities payable to affiliates as follows:
Delaware Tax-Free | Delaware Tax-Free USA | Delaware National High-Yield | |||||||
USA Fund | Intermediate Fund | Municipal Bond Fund | |||||||
Investment management fees | |||||||||
payable to DMC | $ 236,431 | $ 75,180 | $ 26,191 | ||||||
Dividend disbursing, transfer agent, | |||||||||
accounting and administration fees | |||||||||
and other expenses payable to DSC | 110,819 | 71,293 | 17,092 | ||||||
Distribution fees payable to DDLP | 298,399 | 107,076 | 49,169 | ||||||
Other expenses payable to DMC | |||||||||
and affiliates* | 44,143 | 10,738 | 5,311 |
*DMC, as part of its administrative services, pays operating expenses on behalf of each Fund and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, registration fees and trustees’ fees.
As provided in the investment management agreement, each Fund bears the cost of certain legal and tax services, including internal legal and tax services provided to each Fund by DMC and/or its affiliates’ employees. For the six months ended February 28, 2007, each Fund was charged internal legal and tax services provided by DMC and/or its affiliates’ employees as follows:
Delaware Tax-Free | Delaware Tax-Free USA | Delaware National High-Yield | |||||||
USA Fund | Intermediate Fund | Municipal Bond Fund | |||||||
$ 18,080 | $ 6,755 | $ 2,186 |
For the six months ended February 28, 2007, DDLP earned commissions on sales of Class A shares for each Fund as follows:
Delaware Tax-Free | Delaware Tax-Free USA | Delaware National High-Yield | |||||||
USA Fund | Intermediate Fund | Municipal Bond Fund | |||||||
$ 8,830 | $ 5,760 | $ 3,335 |
For the six months ended February 28, 2007, DDLP received gross contingent deferred sales charge commissions on redemption of each Fund’s Class A, Class B and Class C shares, respectively. These commissions were entirely used to offset up-front commissions previously paid by DDLP to broker-dealers on sales of those shares. The amounts received were as follows:
Delaware Tax-Free | Delaware Tax-Free USA | Delaware National High-Yield | |||||||
USA Fund | Intermediate Fund | Municipal Bond Fund | |||||||
Class A | $ 602 | $ 40 | $ 3 | ||||||
Class B | 17,110 | — | 6,421 | ||||||
Class C | 92 | 639 | — |
Trustees’ fees and benefits include expenses accrued by the Funds for each Trustee’s retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service were eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit was determined based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees of the Funds unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits were made in 2007 to those independent trustees so entitled. The retirement benefit payouts were $86,561, $29,605, and $10,432 for the Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund and Delaware National High-Yield Municipal Bond Fund, respectively. Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Funds.
3. Investments
For the six months ended February 28, 2007, the Funds made purchases and sales of investment securities other than short-term investments as follows:
Delaware Tax-Free | Delaware Tax-Free USA | Delaware National High-Yield | |||||||
USA Fund | Intermediate Fund | Municipal Bond Fund | |||||||
Purchases | $ 98,649,049 | $ 69,742,318 | $ 21,707,209 | ||||||
Sales | 143,112,836 | 34,509,177 | 24,543,858 |
38
3. Investments (continued)
At February 28, 2007, the cost of investments for federal income tax purposes has been estimated since the final tax characteristics cannot be determined until fiscal year end. At February 28, 2007, the cost of investments and unrealized appreciation (depreciation) for each Fund were as follows:
Delaware Tax-Free | Delaware Tax-Free USA | Delaware National High-Yield | |||||||
USA Fund | Intermediate Fund | Municipal Bond Fund | |||||||
Cost of investments | $ 615,023,160 | $ 262,082,388 | $ 75,227,562 | ||||||
Aggregate unrealized appreciation | $ 39,062,389 | $ 6,242,736 | $ 4,714,756 | ||||||
Aggregate unrealized depreciation | (457,811 | ) | (142,075 | ) | (43,795 | ) | |||
Net unrealized appreciation | $ 38,604,578 | $ 6,100,661 | $ 4,670,961 |
4. Dividend and Distribution Information
Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles. Additionally, net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the six months ended February 28, 2007 and the year ended August 31, 2006 was as follows:
Delaware Tax-Free | Delaware Tax-Free USA | Delaware National High-Yield | ||||||||||
USA Fund | Intermediate Fund | Municipal Bond Fund | ||||||||||
Six Months Ended 2/28/07* | ||||||||||||
Tax-exempt income | $ | 13,612,514 | $ | 4,350,378 | $ | 1,853,693 | ||||||
Ordinary income | 4,101 | 59,942 | — | |||||||||
Total | $ | 13,616,615 | $ | 4,410,320 | $ | 1,853,693 | ||||||
Year Ended 8/31/06 | ||||||||||||
Tax-exempt income | $ | 21,338,078 | $ | 6,301,523 | $ | 3,771,235 | ||||||
Ordinary income | 11,673 | 40,904 | — | |||||||||
Total | $ | 21,349,751 | $ | 6,342,427 | $ | 3,771,235 |
*Tax information for the period ended February 28, 2007 is an estimate and the tax character of dividends and distributions may be redesignated at fiscal year end.
5. Components of Net Assets on a Tax Basis
The components of net assets are estimated since the final tax characteristics cannot be determined until fiscal year end. As of February 28, 2007, the estimated components of net assets on a tax basis were as follows:
Delaware Tax-Free | Delaware Tax-Free USA | Delaware National High-Yield | |||||||
USA Fund | Intermediate Fund | Municipal Bond Fund | |||||||
Shares of beneficial interest | $631,166,906 | $263,969,932 | $83,609,657 | ||||||
Undistributed tax-exempt income | 1,790 | — | (4,104 | ) | |||||
Realized gains (losses) 9/1/06-2/28/07 | 1,260,253 | 189,980 | (349,791 | ) | |||||
Post-October losses | (221,830 | ) | (10,100 | ) | — | ||||
Capital loss carryforwards as of 8/31/06 | (5,575,182 | ) | (479,849 | ) | (5,783,530 | ) | |||
Unrealized appreciation of investments | 38,604,578 | 6,100,661 | 4,670,961 | ||||||
Net assets | $665,236,515 | $269,770,624 | $82,143,193 |
The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales and tax treatment of market discount on debt instruments.
Post-October losses represent losses realized on investment transactions from November 1, 2006 through February 28, 2007 that, in accordance with federal income tax regulations, the Funds have elected to defer and treat as having arisen in the following fiscal year.
For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to tax treatment of market discount and premium on certain debt instruments. Results of operations and net assets were not affected by these reclassifications.
(continues) 39
Notes to financial statements
Delaware National Tax-Free Funds
5. Components of Net Assets on a Tax Basis (continued)
For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. Capital loss carryforwards remaining at August 31, 2006 will expire as follows:
Delaware Tax-Free | Delaware Tax-Free USA | Delaware National High-Yield | ||||||
Year of Expiration | USA Fund | Intermediate Fund | Municipal Bond Fund | |||||
2008 | $5,503,036 | $ | 63,767 | $ | 708,680 | |||
2009 | 72,146 | — | 3,025,716 | |||||
2010 | — | — | 70,671 | |||||
2011 | — | 290,864 | 997,721 | |||||
2012 | — | 5,791 | 980,742 | |||||
2014 | — | 119,427 | — | |||||
Total | $5,575,182 | $ | 479,849 | $ | 5,783,530 |
For the six months ended February 28, 2007, each Fund had capital gains (losses), which may reduce (increase) the capital loss carryforwards as follows:
Delaware Tax-Free | Delaware Tax-Free USA | Delaware National High-Yield | |||
USA Fund | Intermediate Fund | Municipal Bond Fund | |||
$1,260,253 | $189,980 | $(349,791) |
6. Capital Shares
Transactions in capital shares were as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | ||||||||||||||||||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | ||||||||||||||||||
Six Months | Six Months | Six Months | ||||||||||||||||||
Ended | Year Ended | Ended | Year Ended | Ended | Year Ended | |||||||||||||||
2/28/07 | 8/31/06 | 2/28/07 | 8/31/06 | 2/28/07 | 8/31/06 | |||||||||||||||
Shares sold: | ||||||||||||||||||||
Class A | 667,965 | 14,635,287 | 4,600,018 | 10,459,356 | 531,967 | 1,074,816 | ||||||||||||||
Class B | 19,034 | 120,294 | 19,872 | 52,384 | 25,791 | 76,007 | ||||||||||||||
Class C | 124,643 | 284,293 | 356,885 | 625,073 | 13,515 | 153,197 | ||||||||||||||
Shares issued upon reinvestment of | ||||||||||||||||||||
dividends and distributions: | ||||||||||||||||||||
Class A | 546,153 | 902,479 | 247,339 | 345,526 | 92,584 | 187,771 | ||||||||||||||
Class B | 17,879 | 26,125 | 2,363 | 4,778 | 6,504 | 20,147 | ||||||||||||||
Class C | 14,137 | 16,222 | 20,837 | 36,520 | 6,864 | 12,756 | ||||||||||||||
Shares issued from recognization*: | ||||||||||||||||||||
Class A | — | 10,177,730 | — | — | — | — | ||||||||||||||
Class B | — | 980,518 | — | — | — | — | ||||||||||||||
Class C | — | 703,407 | — | — | — | — | ||||||||||||||
1,389,811 | 27,846,355 | 5,247,314 | 11,523,637 | 677,225 | 1,524,694 | |||||||||||||||
Shares repurchased: | ||||||||||||||||||||
Class A | (3,868,057 | ) | (7,565,290 | ) | (2,075,521 | ) | (3,329,875 | ) | (634,101 | ) | (1,013,868 | ) | ||||||||
Class B | (349,790 | ) | (612,623 | ) | (20,648 | ) | (122,548 | ) | (206,724 | ) | (430,244 | ) | ||||||||
Class C | (186,540 | ) | (205,552 | ) | (273,013 | ) | (382,978 | ) | (58,472 | ) | (153,906 | ) | ||||||||
(4,404,387 | ) | (8,383,465 | ) | (2,369,182 | ) | (3,835,401 | ) | (899,297 | ) | (1,598,018 | ) | |||||||||
Net increase (decrease) | (3,014,576 | ) | 19,462,890 | 2,878,132 | 7,688,236 | (222,072 | ) | (73,324 | ) | |||||||||||
*See note 7. |
40
6. Capital Shares (continued)
For the six months ended February 28, 2007 and the year ended August 31, 2006, the following shares were converted from Class B to Class A shares. The respective amounts are included in Class B redemptions and Class A subscriptions in the tables above and the Statements of Changes in Net Assets.
Six Months Ended | Year Ended | ||||||||||
2/28/07 | 8/31/06 | ||||||||||
Class B | Class A | Class B | Class A | ||||||||
Shares | Shares | Value | Shares | Shares | Value | ||||||
Delaware Tax-Free USA Fund | 143,962 | 143,980 | $1,673,674 | 186,049 | 186,006 | $2,141,376 | |||||
Delaware Tax-Free USA Intermediate Fund | 8,702 | 8,699 | 100,118 | 29,508 | 29,497 | 338,751 | |||||
Delaware National High-Yield | |||||||||||
Municipal Bond Fund | 59,888 | 60,061 | 624,142 | 128,445 | 128,739 | 1,317,238 |
7. Fund Merger
Effective July 17, 2006, Delaware Tax-Free USA Fund (the “Acquiring Fund”) acquired all of the assets and assumed all of the liabilities of Delaware Tax-Free Oregon Insured Fund, Delaware Tax-Free Missouri Insured Fund and Delaware Tax-Free USA Insured Fund (each an “Acquired Fund”), each an open-end investment company, in exchange for shares of the Acquiring Fund pursuant to Plans and Agreements of Reorganization (the “Reorganizations”). The shareholders of each Acquired Fund received shares of the respective class of the Acquiring Fund equal to the aggregate net asset value of their share in the Acquired Fund prior to the Reorganizations.
The Reorganizations were treated as non-taxable events and, accordingly, Delaware Tax-Free USA Fund’s basis in the securities acquired reflected the historical cost basis as of the date of transfer. The net assets, net unrealized appreciation and accumulated net realized gain (loss) of Delaware Tax Tax-Free Oregon Insured Fund, Delaware Tax-Free Missouri Insured Fund and Delaware Tax-Free USA Insured Fund as of the close of business on July 14, 2006, were as follows:
Net Unrealized | Accumulated Net | ||||||
Net Assets | Appreciation | Realized Gain/Loss | |||||
Delaware Tax-Free Oregon Insured Fund | $36,682,602 | $1,088,561 | $(62,898 | )* | |||
Delaware Tax-Free Missouri Insured Fund | 44,904,356 | 1,111,591 | 4,815 | ||||
Delaware Tax-Free USA Insured Fund | 53,626,100 | 1,848,746 | — |
*Includes prior year capital loss carryforwards
The net assets of Delaware Tax-Free USA Fund prior to the Reorganizations were $568,508,906. The combined net assets of Delaware Tax-Free USA Fund after merger were $703,721,964.
8. Line of Credit
Each Fund, along with certain other funds in the Delaware Investments® Family of Funds (the “Participants”), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant’s allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Funds had no amounts outstanding as of February 28, 2007, or at any time during the period then ended.
9. Credit and Market Risk
The Funds concentrate their investments in securities issued by municipalities. 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 value may fluctuate for other reasons and there is no assurance that the insurance company will meet its obligations. These securities have been identified on the Statements of net assets.
Delaware National High-Yield Municipal Bond Fund invests a portion of its assets in high yield fixed income securities, which carry ratings of BB or lower by Standard & Poor’s Ratings Group and/or Ba or lower by Moody’s Investors Service, Inc. Investments in these higher yielding securities are generally accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.
(continues) 41
Notes to financial statements
Delaware National Tax-Free Funds
9. Credit and Market Risk (continued)
The Funds may participate in inverse floater programs where it transfers its own bonds to a trust that issues floating rate securities and inverse floating rate securities (“inverse floaters”) with an aggregate principal amount equal to the principal of the transferred bonds. The inverse floaters received by the Funds are derivative tax-exempt obligations with floating or variable interest rates that move in the opposite direction of short-term interest rates, usually at an accelerated speed. Consequently, the values of the inverse floaters will generally be more volatile than other tax-exempt investments. The Funds typically use inverse floaters to adjust the duration of its portfolio. Duration measures a portfolio’s sensitivity to changes in interest rates. By holding inverse floaters with a different duration than the underlying bonds that the Funds transferred to the trust, the Funds seek to adjust their portfolio’s sensitivity to changes in interest rates. The Funds may also invest in inverse floaters to add additional income to the Funds or to adjust the Funds’ exposure to a specific segment of the yield curve. At February 28, 2007, there were no inverse floaters.
The Fund may invest in advanced refunded bonds, escrow secured bonds or defeased bonds. Under current federal tax laws and regulations, state and local government borrowers are permitted to refinance outstanding bonds by issuing new bonds. The issuer refinances the outstanding debt to either reduce interest costs or to remove or alter restrictive covenants imposed by the bonds being refinanced. A refunding transaction where the municipal securities are being refunded within 90 days from the issuance of the refunding issue is known as a “current refunding”. “Advance refunded bonds” are bonds in which the refunded bond issue remains outstanding for more than 90 days following the issuance of the refunding issue. In an advance refunding, the issuer will use the proceeds of a new bond issue to purchase high grade interest bearing debt securities which are then deposited in an irrevocable escrow account held by an escrow agent to secure all future payments of principal and interest and bond premium of the advance refunded bond. Bonds are “escrowed to maturity” when the proceeds of the refunding issue are deposited in an escrow account for investment sufficient to pay all of the principal and interest on the original interest payment and maturity dates.
Bonds are considered “pre-refunded” when the refunding issue’s proceeds are escrowed only until a permitted call date or dates on the refunded issue with the refunded issue being redeemed at the time, including any required premium. Bonds become “defeased” when the rights and interests of the bondholders and of their lien on the pledged revenues or other security under the terms of the bond contract and are substituted with an alternative source of revenues (the escrow securities) sufficient to meet payments of principal and interest to maturity or to the first call dates. Escrowed secured bonds will often receive a rating of AAA from Moody’s Investors Service, Inc., Standard & Poor’s Rating Group, and/or Fitch Ratings due to the strong credit quality of the escrow securities and the irrevocable nature of the escrow deposit agreement.
Each Fund may invest a portion 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 these securities may impair each Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Fund’s Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Fund’s limitation on investments in illiquid assets. At February 28, 2007, there were no Rule 144A securities. Illiquid securities have been identified on the Statements of Net Assets.
10. Contractual Obligations
The Funds enter into contracts in the normal course of business that contain a variety of indemnifications. The Funds’ maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts. Management has reviewed each Fund’s existing contracts and expects the risk of loss to be remote.
11. Fund Reorganization
On February 15, 2007, the Board of Trustees responsible for Delaware Tax-Free Florida Insured Fund (the “Reorganizing Fund”) approved a proposal to reorganize the Reorganizing Fund with and into the Delaware Tax-Free USA Fund (the “Acquiring Fund”), a series of Delaware Tax Free Fund, subject to shareholder approval. The Board of Trustees responsible for the Delaware Tax-Free USA Fund also approved the reorganization.
Reorganizing Fund shareholders will receive a proxy statement/prospectus providing them with information about the Delaware Tax-Free USA Fund and requesting their votes on the proposed reorganization of their Fund at a special meeting of shareholders to be held in June 2007. If approved, the reorganization is expected to take place in the third quarter of 2007.
42
12. Subsequent Events
At a meeting on February 16, 2007, the Board of Trustees of Delaware Investments® Family of Funds approved the termination of new sales and most subsequent investments of Class B shares of each fund in the complex (each, a “Fund”). Effective at the close of business on May 31, 2007, no new or subsequent investments, including investments through automatic investment plans and by qualified retirement plans (such as 401(k) plans, 403(b) plans, or 457 plans), will be allowed in Class B shares of a Fund, except through a reinvestment of dividends or capital gains or permitted exchanges. Existing shareholders of Class B shares may continue to hold their Class B shares, reinvest dividends into Class B shares, and exchange their Class B shares of one Fund for Class B shares of another Fund, as permitted by existing exchange privileges. Existing Class B shareholders wishing to make subsequent purchases in a Fund’s shares will be permitted to invest in other classes of the Fund, subject to that class’ pricing structure and eligibility requirements, if any.
For Class B shares outstanding as of May 31, 2007 and Class B shares acquired upon reinvestment of dividends or capital gains, all Class B share attributes, including the contingent deferred sales charge (“CDSC”) schedules, conversion to Class A schedule, and distribution and service (12b-1) fees, will continue in their current form. However, effective at the close of business on May 31, 2007, reinvestment of redeemed shares with respect to Class B shares (which, as described in the prospectus, permits you to reinvest within 12 months of selling your shares and have any CDSC you paid on such shares credited back to your account) will be discontinued. In addition, because a Fund’s or its distributor’s ability to assess certain sales charges and fees is dependent on the sale of new shares, the termination of new purchases of Class B shares could ultimately lead to the elimination and/or reduction of such sales charges and fees. A Fund may not be able to provide shareholders with advance notice of the reduction in these sales charges and fees. You will be notified via a Prospectus Supplement if there are any changes to any attributes, sales charges, or fees.
43
About the organization
This semiannual report is for the information of Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund shareholders, but it may be used with prospective investors when preceded or accompanied by a current prospectus for Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund and the Delaware Investments® Performance Update for the most recently completed calendar quarter. The prospectus sets forth details about charges, expenses, investment objectives, and operating policies of the Fund. You should read the prospectus carefully before you invest. The figures in this report represent past results that 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 trustees Patrick P. Coyne Thomas L. Bennett John A. Fry Anthony D. Knerr Lucinda S. Landreth Ann R. Leven Thomas F. Madison Janet L. Yeomans J. Richard Zecher | Affiliated officers David F. Connor David P. O’Connor John J. O’Connor Richard Salus | Contact information Investment manager National distributor Shareholder servicing, dividend For shareholders For securities dealers and financial Web site |
Delaware Investments is the marketing name of Delaware Management Holdings, Inc. and its subsidiaries.
Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. Each Fund’s Forms N-Q, as well as a description of the policies and procedures that each Fund uses to determine how to vote proxies (if any) relating to portfolio securities are available without charge (i) upon request, by calling 800 523-1918; (ii) on each Fund’s Web site at http://www.delawareinvestments.com; and (iii) on the Commission’s Web site at http://www.sec.gov. Each Fund’s Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330.
Information (if any) regarding how each Fund voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through each Fund’s Web site at http://www.delawareinvestments.com; and (ii) on the Commission’s Web site at http://www.sec.gov.
44
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(1573) | Printed in the USA |
SA-011 [2/07] CGI 4/07 | MF-07-03-149 PO11733 |
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Included as part of report to shareholders filed under Item 1 of this Form N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures
The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
Management has made changes that have materially affected, or are reasonably likely to materially affect, registrant's internal controls over financial reporting. To seek to increase the controls' effectiveness, these changes provide for enhanced review of contracts relating to complex transactions and the applicability of generally accepted accounting principles to such transactions, including enhanced consultation with registrant's independent public accountants in connection with such reviews.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Item 12. Exhibits
(a) (1) Code of Ethics | ||
Not applicable. | ||
(2) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are attached hereto as Exhibit 99.CERT. | ||
(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934. | ||
Not applicable. | ||
(b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are furnished herewith as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf, by the undersigned, thereunto duly authorized.
Name of Registrant: Delaware Group Tax-Free Fund
PATRICK P. COYNE | |
By: | Patrick P. Coyne |
Title: | Chief Executive Officer |
Date: | May 4, 2007 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
PATRICK P. COYNE | |
By: | Patrick P. Coyne |
Title: | Chief Executive Officer |
Date: | May 4, 2007 |
RICHARD SALUS | |
By: | Richard Salus |
Title: | Chief Financial Officer |
Date: | May 4, 2007 |