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: | 811-03850 |
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 29, 2008 |
Item 1. Reports to Stockholders
Semiannual report | |
Delaware Tax-Free USA Fund | |
Delaware Tax-Free USA Intermediate Fund | |
Delaware National High-Yield Municipal | |
Bond Fund | |
February 29, 2008 |
Fixed income mutual funds |
Table of contents
Disclosure of Fund expenses | 1 |
Sector allocations and credit quality breakdowns | 4 |
Statements of net assets | 7 |
Statements of operations | 49 |
Statements of changes in net assets | 52 |
Financial highlights | 58 |
Notes to financial statements | 76 |
About the organization | 88 |
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.
© 2008 Delaware Distributors, L.P.
Disclosure of Fund expenses
For the period September 1, 2007 to February 29, 2008
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, 2007 to February 29, 2008.
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 Fund’s 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 182/366 (to reflect the one-half year period).
1
Disclosure of Fund expenses
Delaware Tax-Free USA Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | |||||||||
Account Value | Account Value | Annualized | Paid During Period | ||||||||
9/1/07 | 2/29/08 | Expense Ratio | 9/1/07 to 2/29/08 | ||||||||
Actual Fund return | |||||||||||
Class A | $1,000.00 | $ 981.40 | 0.85% | $4.19 | |||||||
Class B | 1,000.00 | 976.80 | 1.61% | 7.91 | |||||||
Class C | 1,000.00 | 976.80 | 1.61% | 7.91 | |||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||
Class A | $1,000.00 | $1,020.64 | 0.85% | $4.27 | |||||||
Class B | 1,000.00 | 1,016.86 | 1.61% | 8.07 | |||||||
Class C | 1,000.00 | 1,016.86 | 1.61% | 8.07 |
Delaware Tax-Free USA Intermediate Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | |||||||||
Account Value | Account Value | Annualized | Paid During Period | ||||||||
9/1/07 | 2/29/08 | Expense Ratio | 9/1/07 to 2/29/08 | ||||||||
Actual Fund return | |||||||||||
Class A | $1,000.00 | $ 998.40 | 0.75% | $3.73 | |||||||
Class B | 1,000.00 | 994.30 | 1.60% | 7.93 | |||||||
Class C | 1,000.00 | 994.20 | 1.60% | 7.93 | |||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||
Class A | $1,000.00 | $1,021.13 | 0.75% | $3.77 | |||||||
Class B | 1,000.00 | 1,016.91 | 1.60% | 8.02 | |||||||
Class C | 1,000.00 | 1,016.91 | 1.60% | 8.02 |
2
Delaware National High-Yield Municipal Bond Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | |||||||||
Account Value | Account Value | Annualized | Paid During Period | ||||||||
9/1/07 | 2/29/08 | Expense Ratio | 9/1/07 to 2/29/08 | ||||||||
Actual Fund return | |||||||||||
Class A | $1,000.00 | $ 965.40 | 0.90% | $4.40 | |||||||
Class B | 1,000.00 | 961.80 | 1.65% | 8.05 | |||||||
Class C | 1,000.00 | 961.90 | 1.65% | 8.05 | |||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||
Class A | $1,000.00 | $1,020.39 | 0.90% | $4.52 | |||||||
Class B | 1,000.00 | 1,016.66 | 1.65% | 8.27 | |||||||
Class C | 1,000.00 | 1,016.66 | 1.65% | 8.27 |
3
Sector allocations and credit quality breakdowns |
As of February 29, 2008 |
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware Tax-Free USA Fund
Sector | Percentage of net assets | ||
Municipal Bonds | 98.26 | % | |
Corporate Revenue Bonds | 10.95 | % | |
Education Revenue Bonds | 7.15 | % | |
Electric Revenue Bonds | 1.65 | % | |
Escrowed to Maturity Bonds | 6.00 | % | |
Health Care Revenue Bonds | 10.13 | % | |
Housing Revenue Bonds | 2.93 | % | |
Lease Revenue Bonds | 3.60 | % | |
Local General Obligation Bonds | 5.57 | % | |
Pre-Refunded Bonds | 19.93 | % | |
Special Tax Bonds | 5.92 | % | |
State General Obligation Bonds | 15.47 | % | |
Transportation Revenue Bonds | 4.91 | % | |
Water & Sewer Revenue Bonds | 4.05 | % | |
Total Value of Securities | 98.26 | % | |
Receivables and Other Assets Net of Liabilities | 1.74 | % | |
Total Net Assets | 100.00 | % | |
Credit quality breakdown (as a % of fixed income investments) | |||
AAA | 48.70 | % | |
AA | 17.74 | % | |
A | 7.19 | % | |
BBB | 17.79 | % | |
BB | 0.96 | % | |
B | 1.39 | % | |
Not Rated | 6.23 | % | |
Total | 100.00 | % |
4
Delaware Tax-Free USA Intermediate Fund
Sector | Percentage of net assets | ||
Municipal Bonds | 96.68 | % | |
Corporate Revenue Bonds | 6.95 | % | |
Education Revenue Bonds | 6.97 | % | |
Electric Revenue Bonds | 2.37 | % | |
Escrowed to Maturity Bonds | 0.05 | % | |
Health Care Revenue Bonds | 6.05 | % | |
Housing Revenue Bonds | 0.22 | % | |
Lease Revenue Bonds | 3.99 | % | |
Local General Obligation Bonds | 15.14 | % | |
Pre-Refunded Bonds | 10.61 | % | |
Resource Recovery Bonds | 0.37 | % | |
Special Tax Bonds | 5.32 | % | |
State General Obligation Bonds | 28.05 | % | |
Transportation Revenue Bonds | 5.66 | % | |
Water & Sewer Revenue Bonds | 4.93 | % | |
Variable Rate Demand Notes | 0.83 | % | |
Total Value of Securities | 97.51 | % | |
Receivables and Other Assets Net of Liabilities | 2.49 | % | |
Total Net Assets | 100.00 | % | |
Credit quality breakdown (as a % of fixed income investments) | |||
AAA | 41.04 | % | |
AA | 30.96 | % | |
A | 10.87 | % | |
BBB | 12.74 | % | |
BB | 0.58 | % | |
B | 0.46 | % | |
Not Rated | 3.35 | % | |
Total | 100.00 | % |
5
Sector allocations and credit quality breakdowns
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware National High-Yield Municipal Bond Fund
Sector | Percentage of net assets | ||
Municipal Bonds | 95.59 | % | |
Corporate Revenue Bonds | 17.09 | % | |
Education Revenue Bonds | 15.44 | % | |
Health Care Revenue Bonds | 23.96 | % | |
Lease Revenue Bonds | 3.51 | % | |
Local General Obligation Bonds | 9.02 | % | |
Pre-Refunded Bonds | 17.57 | % | |
Special Tax Bonds | 5.01 | % | |
Transportation Revenue Bonds | 3.99 | % | |
Variable Rate Demand Notes | 2.86 | % | |
Total Value of Securities | 98.45 | % | |
Receivables and Other Assets Net of Liabilities | 1.55 | % | |
Total Net Assets | 100.00 | % | |
Credit quality breakdown (as a % of fixed income investments) | |||
AAA | 12.96 | % | |
A | 5.18 | % | |
BBB | 33.70 | % | |
BB | 6.63 | % | |
B | 2.26 | % | |
Not Rated | 39.27 | % | |
Total | 100.00 | % |
6
Statements of net assets | |
Delaware Tax-Free USA Fund | February 29, 2008 (Unaudited) |
Principal amount | Value | |||||
Municipal Bonds – 98.26% | ||||||
Corporate Revenue Bonds – 10.95% | ||||||
Alliance Airport Authority, Texas Special Facilities Revenue | ||||||
(American Airlines Project) | ||||||
Series B 5.25% 12/1/29 (AMT) | $ | 7,500,000 | $ | 5,326,199 | ||
Brazos, Texas River Authority Pollution Control Revenue | ||||||
(Texas Utilities) 5.40% 5/1/29 (AMT) | 3,000,000 | 2,321,940 | ||||
Ÿ(TXU Energy Co. Project) Series B 6.30% 7/1/32 (AMT) | 3,500,000 | 2,980,915 | ||||
Buckeye, Ohio Tobacco Settlement Financing Authority | ||||||
Asset-Backed Senior Turbo | ||||||
ΩCapital Appreciation (Asset-Senior Convention) Series A-3 | ||||||
6.25% 6/1/37 | 5,000,000 | 3,178,400 | ||||
Series A-2 6.50% 6/1/47 | 4,800,000 | 4,745,616 | ||||
ŸChesapeake, Virginia Economic Development | ||||||
Authority Pollution Control Revenue | ||||||
(Electric & Power Co. Project) | ||||||
Series A 3.60% 2/1/32 | 2,100,000 | 2,034,816 | ||||
Chicago, Illinois O’Hare International Airport Special | ||||||
Facilities Revenue (American Airlines Inc. Project) | ||||||
5.50% 12/1/30 | 2,500,000 | 1,879,975 | ||||
Cloquet, Minnesota Pollution Control Revenue | ||||||
(Potlatch Corp. Project) 5.90% 10/1/26 | 1,695,000 | 1,616,081 | ||||
Connecticut State Development Authority Pollution | ||||||
Control Revenue (Connecticut Light & Power) | ||||||
Series A 5.85% 9/1/28 | 4,000,000 | 4,028,800 | ||||
Denver, Colorado City & County Airport Special Facilities | ||||||
Revenue Refunding (United Air Lines Project) | ||||||
Series A 5.25% 10/1/32 (AMT) | 5,000,000 | 3,878,600 | ||||
Golden State, California Tobacco Securitization | ||||||
Corporation Settlement Revenue Refunding | ||||||
Asset-Backed Senior | ||||||
ΩConvertible Series A-2 5.30% 6/1/37 | 5,000,000 | 2,986,250 | ||||
Series A-1 5.125% 6/1/47 | 1,500,000 | 1,208,295 | ||||
Indianapolis, Indiana Airport Authority Revenue | ||||||
Special Facilities (Federal Express Corp. Project) | ||||||
5.10% 1/15/17 (AMT) | 2,750,000 | 2,709,190 | ||||
Series 1998 5.50% 5/1/29 (AMT) | 2,000,000 | 1,821,740 | ||||
Mason County, West Virginia Pollution Control | ||||||
Revenue (Appalachian Power Co. Project) | ||||||
Series K 6.05% 12/1/24 (AMBAC) | 3,000,000 | 3,122,730 |
7
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Corporate Revenue Bonds (continued) | ||||||
Mississippi Business Finance Corporation Pollution | ||||||
Control Revenue (System Energy Resources, Inc. Project) | ||||||
5.90% 5/1/22 | $ | 3,000,000 | $ | 3,008,550 | ||
Petersburg, Indiana Pollution Control Revenue | ||||||
(Indianapolis Power & Light Co. Project) | ||||||
6.375% 11/1/29 (AMT) | 5,000,000 | 5,036,350 | ||||
Phenix City, Alabama Industrial Development | ||||||
Board Environmental Improvement Revenue | ||||||
(Mead Westvaco Corp. Project) | ||||||
Series A 6.35% 5/15/35 (AMT) | 3,000,000 | 2,963,280 | ||||
ŸPort Morrow, Oregon Pollution Control Revenue (Portland | ||||||
General Electric Co.) Series A 5.20% 5/1/33 | 2,600,000 | 2,633,592 | ||||
Puerto Rico Industrial, Medical & Environmental Pollution | ||||||
Control Facilities Financing Authority Revenue (PepsiCo | ||||||
Inc. Project) 6.25% 11/15/13 | 1,250,000 | 1,311,938 | ||||
Richmond County, Georgia Development Authority | ||||||
Environmental Improvement Revenue | ||||||
(International Paper Co.) | ||||||
Series B 5.95% 11/15/25 (AMT) | 5,000,000 | 4,605,650 | ||||
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 | 475,260 | ||||
Sugar Creek, Missouri Industrial Development Revenue | ||||||
(Lafarge North America Project) | ||||||
Series A 5.65% 6/1/37 (AMT) | 500,000 | 436,020 | ||||
Sweetwater County, Wyoming Solid Waste Disposal | ||||||
Revenue (FMC Corp. Project) 5.60% 12/1/35 (AMT) | 5,000,000 | 4,382,250 | ||||
Tobacco Settlement Financing Corporation, | ||||||
Virginia Senior | ||||||
ΩConvertible Series B-2 5.20% 6/1/46 | 2,500,000 | 1,445,450 | ||||
Series B-1 5.00% 6/1/47 | 4,000,000 | 3,165,440 | ||||
73,303,327 | ||||||
Education Revenue Bonds – 7.15% | ||||||
Amherst, New York Industrial Development Agency Civic | ||||||
Facilities Revenue (UBF Faculty Student Housing) | ||||||
Series A 5.75% 8/1/30 (AMBAC) | 1,300,000 | 1,318,135 | ||||
Broward County, Florida Educational Facilities | ||||||
Authority Revenue (Nova Southeastern Project) | ||||||
5.25% 4/1/27 (RADIAN) | 1,000,000 | 948,000 |
8
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Education Revenue Bonds (continued) | ||||||
California Statewide Communities Development Authority | ||||||
Revenue (California Baptist University Project) | ||||||
�� Series A 5.50% 11/1/38 | $ | 1,500,000 | $ | 1,279,635 | ||
California Statewide Communities Development Authority | ||||||
Student Housing Revenue | ||||||
(East Campus Apartments, LLC) | ||||||
Series A 5.625% 8/1/34 (ACA) | 3,400,000 | 2,861,779 | ||||
Gainesville, Georgia Redevelopment Authority | ||||||
Educational Facilities Revenue | ||||||
(Riverside Military Academy Project) | ||||||
5.125% 3/1/37 | 4,000,000 | 3,279,479 | ||||
Illinois Financial Authority Revenue | ||||||
(Illinois Institute of Technology) | ||||||
Series A 5.00% 4/1/36 | 2,600,000 | 2,248,870 | ||||
Massachusetts State Health & Educational Facilities | ||||||
Authority Revenue (Nichols College Project) Series C | ||||||
6.00% 10/1/17 | 810,000 | 827,334 | ||||
6.125% 10/1/29 | 1,000,000 | 988,140 | ||||
New Hampshire Higher Educational & Health Facilities | ||||||
Authority Revenue (New Hampton School Issue) | ||||||
5.375% 10/1/28 | 3,070,000 | 2,730,182 | ||||
New York City, New York Industrial Development | ||||||
Agency Civic Facilities Revenue | ||||||
(Vaughn College Aeronautics) Series B | ||||||
5.00% 12/1/31 | 1,510,000 | 1,212,092 | ||||
5.25% 12/1/36 | 1,420,000 | 1,156,420 | ||||
Oregon Health & Science University Revenue | ||||||
(Capital Appreciation Insured) Series A | ||||||
5.00% 7/1/32 (MBIA) | 2,000,000 | 1,848,920 | ||||
^5.50% 7/1/21 (MBIA) | 2,000,000 | 941,360 | ||||
Oregon State Facilities Authority Revenue | ||||||
(College Housing Northwest Project) | ||||||
Series A 5.45% 10/1/32 | 1,000,000 | 873,560 | ||||
(College Independent Student Housing Project) | ||||||
Series A 5.25% 7/1/30 (XLCA) | 1,630,000 | 1,516,471 | ||||
Pennsylvania State Higher Educational | ||||||
Facilities Authority Revenue | ||||||
(Widener University) 5.375% 7/15/29 | 650,000 | 614,835 |
9
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Education Revenue Bonds (continued) | ||||||
Provo, Utah Charter School Revenue | ||||||
(Freedom Academy Foundation Project) | ||||||
5.50% 6/15/37 | $ | 1,750,000 | $ | 1,412,863 | ||
Saint Louis, Missouri Industrial Development Authority | ||||||
Revenue (Confluence Academy Project) Series A | ||||||
5.25% 6/15/25 | 1,150,000 | 972,797 | ||||
5.35% 6/15/32 | 2,300,000 | 1,874,408 | ||||
San Leanna, Texas Higher Educational Facilities Revenue | ||||||
(Saint Edwards University Project) 4.75% 6/1/32 | 1,150,000 | 940,861 | ||||
Texas A & M University Revenue Financing System | ||||||
5.00% 5/15/17 | 9,060,000 | 9,652,524 | ||||
5.00% 5/15/20 | 7,700,000 | 7,945,630 | ||||
University of the Virgin Islands Series A 5.375% 6/1/34 | 500,000 | 446,510 | ||||
47,890,805 | ||||||
Electric Revenue Bonds – 1.65% | ||||||
Chelan County, Washington Public Utilities District #001 | ||||||
Consolidated Revenue (Chelan Hydro System) | ||||||
Series A 5.45% 7/1/37 (AMBAC) (AMT) | 5,000,000 | 4,801,850 | ||||
Florida State Municipal Power Agency Revenue | ||||||
(Stanton II Project) 5.00% 10/1/26 (AMBAC) | 2,000,000 | 1,931,800 | ||||
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 | 2,204,840 | ||||
Puerto Rico Electric Power Authority Power Revenue | ||||||
Series PP 5.00% 7/1/25 (FGIC) | 1,000,000 | 965,080 | ||||
Sikeston, Missouri Electric Revenue Refunding | ||||||
6.00% 6/1/13 (MBIA) | 1,000,000 | 1,121,700 | ||||
11,025,270 | ||||||
Escrowed to Maturity Bonds – 6.00% | ||||||
Cape Girardeau County, Missouri Industrial Development | ||||||
Authority Health Care Facilities Revenue | ||||||
(Southeast Missouri Hospital) 5.25% 6/1/16 (MBIA) | 440,000 | 472,239 | ||||
^Greene County, Missouri Single Family | ||||||
Mortgage Revenue Municipal Multiplier | ||||||
(Private Mortgage Insurance) 6.10% 3/1/16 | 1,225,000 | 876,745 | ||||
Louisiana Public Facilities Authority Hospital | ||||||
Revenue (Southern Baptist Hospital, Inc. Project) | ||||||
8.00% 5/15/12 | 4,240,000 | 4,667,858 |
10
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Escrowed to Maturity Bonds (continued) | ||||||
Missouri State Health & Educational Facilities | ||||||
Authority Health Facilities Revenue Refunding | ||||||
(SSM Health Care) Series AA 6.40% 6/1/10 (MBIA) | $ | 500,000 | $ | 537,405 | ||
New Jersey State Highway Authority Garden State | ||||||
Parkway General Revenue (Senior Parkway) | ||||||
5.50% 1/1/14 (FGIC) | 5,000,000 | 5,491,850 | ||||
5.50% 1/1/15 (FGIC) | 7,310,000 | 8,086,614 | ||||
5.50% 1/1/16 (FGIC) | 1,000,000 | 1,108,900 | ||||
Oklahoma State Turnpike Authority Revenue | ||||||
(First Senior) 6.00% 1/1/22 | 13,535,000 | 15,272,488 | ||||
Umatilla County, Oregon Hospital Facility | ||||||
Authority Revenue (Catholic Health Initiatives) | ||||||
Series A 5.50% 3/1/32 | 1,000,000 | 1,006,060 | ||||
Virgin Islands Public Finance Authority Revenue | ||||||
Series A 7.30% 10/1/18 | 2,200,000 | 2,647,810 | ||||
40,167,969 | ||||||
Health Care Revenue Bonds – 10.13% | ||||||
Cape Girardeau County, Missouri Industrial | ||||||
Development Authority Health Care Facilities | ||||||
Revenue Unrefunded Balance | ||||||
(Southeast Missouri Hospital) 5.25% 6/1/16 (MBIA) | 560,000 | 587,748 | ||||
(St. Francis Medical Center) Series A 5.50% 6/1/32 | 1,000,000 | 966,780 | ||||
Chatham County, Georgia Hospital Authority Revenue | ||||||
(Memorial Health Medical Center) Series A | ||||||
6.125% 1/1/24 | 1,000,000 | 957,910 | ||||
Cleveland-Cuyahoga County, Ohio Port Authority | ||||||
Revenue Senior Housing (St. Clarence - Geac) | ||||||
Series A 6.25% 5/1/38 | 1,500,000 | 1,374,120 | ||||
Colorado Health Facilities Authority Revenue | ||||||
(Evangelical Lutheran) Series A 5.25% 6/1/34 | 4,275,000 | 3,843,011 | ||||
Cumberland County, Pennsylvania Municipal Authority | ||||||
Revenue (Diakon Lutheran Ministries Project) | ||||||
5.00% 1/1/36 | 2,570,000 | 2,066,871 | ||||
Cuyahoga County, Ohio Revenue (Cleveland Clinic Health | ||||||
Systems) Series A 5.50% 1/1/29 | 7,500,000 | 7,362,600 | ||||
Escambia County, Florida Health Facilities Authority | ||||||
Health Care Facilities Loan (VHA Program) | ||||||
5.95% 7/1/20 (AMBAC) | 560,000 | 584,198 |
11
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Health Care Revenue Bonds (continued) | ||||||
Gainesville & Hall County, Georgia Development | ||||||
Authority Revenue Senior Living Facilities | ||||||
(Lanier Village Estates Project) Series C | ||||||
7.25% 11/15/29 | $ | 1,000,000 | $ | 1,057,960 | ||
Illinois Health Facilities Authority Revenue (Elmhurst | ||||||
Memorial Healthcare Project) 5.625% 1/1/28 | 2,000,000 | 1,975,120 | ||||
Indian River County, Florida Hospital District Revenue | ||||||
Refunding 6.10% 10/1/18 (FSA) | 3,000,000 | 3,036,360 | ||||
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 | 2,655,720 | ||||
Joplin, Missouri Industrial Development Authority Health | ||||||
Facilities Revenue (Freeman Health System Project) | ||||||
5.75% 2/15/35 | 405,000 | 386,864 | ||||
Knox County, Tennessee Health Educational & | ||||||
Housing Facilities Board Hospital Revenue | ||||||
(East Tennessee Hospital Project) | ||||||
Series B 5.75% 7/1/33 | 1,000,000 | 966,290 | ||||
Lucas County, Ohio Health Care Facility Revenue | ||||||
(Sunset Retirement Communities) | ||||||
Series A 6.625% 8/15/30 | 2,000,000 | 2,035,980 | ||||
Michigan State Hospital Finance Authority Revenue | ||||||
(Ascension Health Credit Group) | ||||||
Series B 5.25% 11/15/26 | 3,500,000 | 3,386,355 | ||||
(Oakwood Obligation Group) Series A 5.75% 4/1/32 | 2,500,000 | 2,439,400 | ||||
(Trinity Health Credit) Series C 5.375% 12/1/30 | 6,000,000 | 5,804,520 | ||||
Missouri State Health & Educational Facilities | ||||||
Authority Health Facilities Revenue Refunding | ||||||
(Lake Regional Health System Project) 5.70% 2/15/34 | 500,000 | 475,335 | ||||
Montgomery County, Pennsylvania Industrial | ||||||
Development Authority Retirement Community | ||||||
Revenue (Acts Retirement Communities) | ||||||
Series A 4.50% 11/15/36 | 2,000,000 | 1,546,440 | ||||
Multnomah County, Oregon Hospital Facilities Authority | ||||||
Revenue (Providence Health System) 5.25% 10/1/22 | 3,500,000 | 3,447,290 | ||||
New York State Dormitory Authority Revenue | ||||||
(Catholic Health Services of Long Island - | ||||||
St. Francis Hospital Project) 5.10% 7/1/34 | 2,500,000 | 2,218,900 |
12
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Health Care Revenue Bonds (continued) | ||||||
North Carolina Medical Care Commission Health | ||||||
Care Facilities Revenue | ||||||
(First Mortgage - Presbyterian Homes) | ||||||
5.40% 10/1/27 | $ | 4,000,000 | $ | 3,716,280 | ||
(Pennybryn at Mayfield Project) | ||||||
Series A 6.125% 10/1/35 | 5,580,000 | 5,005,260 | ||||
North Kansas City, Missouri Hospital Revenue Series A | ||||||
5.00% 11/15/28 (FSA) | 500,000 | 481,845 | ||||
Palm Beach County, Florida Health Facilities Authority | ||||||
Revenue (Boca Raton Community Hospital) | ||||||
5.625% 12/1/31 | 2,000,000 | 1,818,600 | ||||
Prince William County, Virginia Industrial Development | ||||||
Authority Hospital Revenue (Potomac Hospital Corp.) | ||||||
5.35% 10/1/36 | 1,750,000 | 1,617,263 | ||||
Puerto Rico Industrial, Tourist, Educational, Medical | ||||||
& Environmental Control Facilities Revenue | ||||||
(Hospital Auxilio Mutuo Obligated Group) | ||||||
Series A 6.25% 7/1/24 (MBIA) | 1,200,000 | 1,209,144 | ||||
Shelby County, Tennessee Health Educational & Housing | ||||||
Facilities Board Revenue (Trezevant Manor Project) | ||||||
Series A 5.625% 9/1/26 | 2,500,000 | 2,309,425 | ||||
Tallahassee, Florida Health Facilities Revenue (Tallahassee | ||||||
Memorial Regional Medical Center) Series B | ||||||
6.00% 12/1/15 (MBIA) | 2,500,000 | 2,505,725 | ||||
67,839,314 | ||||||
Housing Revenue Bonds – 2.93% | ||||||
Florida Housing Finance Agency | ||||||
(Landings at Sea Forest Apartments) Series T | ||||||
5.85% 12/1/18 (AMBAC) (FHA) (AMT) | 350,000 | 351,162 | ||||
6.05% 12/1/36 (AMBAC) (FHA) (AMT) | 700,000 | 700,077 | ||||
(Leigh Meadows Apartments Section 8 HUD) Series N | ||||||
6.20% 9/1/26 (AMBAC) (AMT) | 2,765,000 | 2,770,418 | ||||
6.30% 9/1/36 (AMBAC) (AMT) | 2,000,000 | 2,002,660 | ||||
(Spinnaker Cove Apartments) | ||||||
Series G 6.50% 7/1/36 (AMBAC) (FHA) (AMT) | 500,000 | 500,625 | ||||
Franklin County, Ohio Multi Family Revenue | ||||||
(Alger Green) Series A 5.80% 5/20/44 (GNMA) (AMT) | 1,150,000 | 1,098,124 | ||||
Illinois Development Finance Authority Revenue | ||||||
(Section 8) Series A 5.80% 7/1/28 (MBIA) (FHA) | 2,790,000 | 2,804,647 |
13
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Housing Revenue Bonds (continued) | ||||||
Illinois Housing Development Authority Multi Family | ||||||
Revenue (Crystal Lake Preservation) | ||||||
Series A-1 5.80% 12/20/41 (GNMA) | $ | 2,000,000 | $ | 1,978,740 | ||
Milwaukee, Wisconsin Redevelopment Authority | ||||||
Multifamily Revenue (City Hall Square) | ||||||
6.30% 8/1/38 (FHA) (AMT) | 1,455,000 | 1,469,681 | ||||
Missouri State Housing Development Commission | ||||||
Mortgage Revenue Single Family Homeowner | ||||||
Loan A 5.20% 9/1/33 (GNMA) (FNMA) (AMT) | 235,000 | 215,178 | ||||
Loan A 7.20% 9/1/26 (GNMA) (FNMA) (AMT) | 30,000 | 30,985 | ||||
Loan C 7.25% 9/1/26 (GNMA) (FNMA) (AMT) | 20,000 | 20,338 | ||||
Loan C 7.45% 9/1/27 (GNMA) (FNMA) (AMT) | 40,000 | 40,718 | ||||
Missouri State Housing Development Commission | ||||||
Multifamily Housing Revenue | ||||||
(Hyder) Series 3 5.60% 7/1/34 (FHA) (AMT) | 1,435,000 | 1,390,716 | ||||
(San Remo) Series 5 5.45% 1/1/36 (FHA) (AMT) | 500,000 | 471,655 | ||||
New Mexico Mortgage Finance Authority Revenue | ||||||
Series B Class III 6.75% 7/1/25 (GNMA) (FNMA) | 160,000 | 165,371 | ||||
Series E 6.95% 1/1/26 (GNMA) (FNMA) | 155,000 | 157,829 | ||||
Orange County, Florida Housing Finance Authority | ||||||
Homeowner Revenue Series B 5.25% 3/1/33 | ||||||
(GNMA) (FNMA) (AMT) | 175,000 | 161,081 | ||||
Oregon Health, Housing, Educational, & Cultural Facilities | ||||||
Authority Revenue (Pier Park Project) | ||||||
Series A 6.05% 4/1/18 (GNMA) (AMT) | 1,030,000 | 1,031,411 | ||||
Oregon State Housing & Community Services Department | ||||||
Mortgage Revenue Single Family Mortgage Program | ||||||
Series R 5.375% 7/1/32 (AMT) | 780,000 | 730,244 | ||||
Santa Fe, New Mexico Single Family Mortgage Revenue | ||||||
Series B-1 6.20% 11/1/16 (GNMA) (FNMA) (AMT) | 145,000 | 146,737 | ||||
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 | 943,820 | ||||
Volusia County, Florida Multifamily Housing | ||||||
Finance Authority (San Marco Apartments) | ||||||
Series A 5.60% 1/1/44 (FSA) (AMT) | 500,000 | 472,730 | ||||
19,654,947 |
14
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Lease Revenue Bonds – 3.60% | ||||||
Loudoun County, Virginia Industrial Development | ||||||
Authority Public Safety Facility Lease Revenue | ||||||
Series A 5.25% 12/15/23 (FSA) | $ | 700,000 | $ | 709,296 | ||
Missouri State Development Finance Board Infrastructure | ||||||
Facilities Revenue | ||||||
(Branson Landing Project) Series A | ||||||
5.25% 12/1/19 | 1,435,000 | 1,396,255 | ||||
5.50% 12/1/24 | 2,480,000 | 2,351,090 | ||||
5.625% 12/1/28 | 2,930,000 | 2,757,247 | ||||
(Sewer System Improvement Project) | ||||||
Series C 5.00% 3/1/25 | 605,000 | 584,164 | ||||
(Triumph Foods Project) Series A 5.25% 3/1/25 | 500,000 | 496,665 | ||||
Puerto Rico Commonwealth Industrial Development | ||||||
Company General Purpose Revenue Series B | ||||||
5.375% 7/1/16 | 1,000,000 | 1,021,400 | ||||
Puerto Rico Public Buildings Authority Revenue | ||||||
(Guaranteed Government Facilities) | ||||||
Series F 5.25% 7/1/25 | 930,000 | 868,676 | ||||
Series I 5.25% 7/1/33 | 11,825,000 | 10,966,032 | ||||
St. Augustine, Florida Capital Improvement Revenue | ||||||
5.00% 10/1/34 (AMBAC) | 1,000,000 | 956,060 | ||||
St. Charles County, Missouri Public Water Supply | ||||||
District #2 Revenue Certificates of Participation | ||||||
(Missouri Project) Series B 5.10% 12/1/25 (MBIA) | 500,000 | 491,930 | ||||
^St. Louis, Missouri Industrial Development Authority | ||||||
Leasehold Revenue (Convention Center Hotel) | ||||||
5.80% 7/15/20 (AMBAC) | 3,035,000 | 1,520,990 | ||||
24,119,805 | ||||||
Local General Obligation Bonds – 5.57% | ||||||
Belleville, Illinois Tax Increment Revenue (Frank Scott | ||||||
Parkway Redevelopment) Series A 5.70% 5/1/36 | 1,350,000 | 1,148,175 | ||||
Boerne, Texas Independent School District Building | ||||||
5.25% 2/1/27 (PSF) | 4,000,000 | 4,008,400 | ||||
5.25% 2/1/29 (PSF) | 2,960,000 | 2,961,125 | ||||
Florida Enterprise Community Development District | ||||||
Special Assessment 6.10% 5/1/16 (MBIA) | 695,000 | 696,710 | ||||
Gwinnett County, Georgia School District 5.00% 2/1/11 | 8,000,000 | 8,461,039 | ||||
Henderson, Nevada Local Improvement Districts #T-18 | ||||||
5.30% 9/1/35 | 3,475,000 | 2,519,757 |
15
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Local General Obligation Bonds (continued) | ||||||
Hollywood Community, Florida Redevelopment Agency | ||||||
5.625% 3/1/24 | $ | 1,200,000 | $ | 1,174,008 | ||
Jefferson County, Oregon School District #509J | ||||||
5.00% 6/15/22 (FGIC) | 500,000 | 502,265 | ||||
Lammersville, California School District Community | ||||||
Facilities District #2002 (Mountain House) | ||||||
5.125% 9/1/35 | 4,125,000 | 3,359,854 | ||||
Lewisville, Texas Independent School District | ||||||
6.15% 8/15/21 (PSF) | 75,000 | 77,872 | ||||
Lincoln County, Oregon School District | ||||||
5.25% 6/15/12 (FGIC) | 700,000 | 715,834 | ||||
Melrose Park, Illinois Tax Increment Series B | ||||||
6.00% 12/15/19 (FSA) | 1,250,000 | 1,329,850 | ||||
Missouri State Development Finance Board Infrastructure | ||||||
Facilities Revenue (Crackerneck Creek Project) | ||||||
Series C 5.00% 3/1/26 | 500,000 | 470,025 | ||||
New York City, New York | ||||||
Series I 5.125% 3/1/23 | 5,875,000 | 5,811,374 | ||||
Series J 5.25% 6/1/28 | 2,055,000 | 2,032,107 | ||||
Powell, Ohio 5.50% 12/1/32 (FGIC) | 2,000,000 | 2,018,960 | ||||
37,287,355 | ||||||
§Pre-Refunded Bonds – 19.93% | ||||||
Alexandria, Virginia Industrial Development Authority | ||||||
Revenue (Institute for Defense Analyses) Series A | ||||||
5.90% 10/1/30-10 (AMBAC) | 6,000,000 | 6,497,400 | ||||
California State 5.25% 2/1/30-12 (MBIA) | 5,000 | 5,378 | ||||
Deschutes County, Oregon Administrative School District #1 | ||||||
Series A 5.125% 6/15/21-11 (FSA) | 1,000,000 | 1,061,590 | ||||
Deschutes County, Oregon Hospital Facilities Authority | ||||||
Hospital Revenue (Cascade Health Services) | ||||||
5.60% 1/1/32-12 | 1,250,000 | 1,349,763 | ||||
Duluth, Minnesota Economic Development Authority | ||||||
Health Care Facilities Revenue (Benedictine Health | ||||||
System - St. Mary’s Hospital) 5.25% 2/15/33-14 | 5,000,000 | 4,590,250 | ||||
Florida State Board of Education (Lottery Revenue) | ||||||
Series A 6.00% 7/1/14-10 (FGIC) | 1,000,000 | 1,078,330 |
16
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
§Pre-Refunded Bonds (continued) | |||||
Golden State, California Tobacco Securitization | |||||
Corporation Settlement Revenue Series B | |||||
5.50% 6/1/43-13 | $ | 9,000,000 | $ | 9,708,750 | |
5.625% 6/1/38-13 | 7,500,000 | 8,134,875 | |||
Greene County, Missouri Reorganization School District | |||||
R8 (Direct Deposit Project) 5.10% 3/1/22-16 (FSA) | 1,500,000 | 1,578,090 | |||
Henrico County, Virginia Economic Development | |||||
Authority Revenue (Bon Secours Health System) | |||||
Series A 5.60% 11/15/30-12 | 130,000 | 142,453 | |||
Highlands County, Florida Health Facilities | |||||
Authority (Adventist Health System/Sunbelt) | |||||
Series A 6.00% 11/15/31-11 | 1,500,000 | 1,651,635 | |||
Illinois Educational Facilities Authority Student Housing | |||||
Revenue (Educational Advancement Fund - | |||||
University Center Project) 6.25% 5/1/30-12 | 5,000,000 | 5,601,800 | |||
Jackson, Ohio Local School District (Stark & Summit | |||||
Counties) School Facilities Construction & | |||||
Improvement 5.625% 12/1/25-10 (FSA) | 1,000,000 | 1,070,190 | |||
Jackson, Oregon School District #6 Central Point | |||||
5.25% 6/15/20-10 (FGIC) | 1,175,000 | 1,235,548 | |||
Lee County, Florida Airport Revenue | |||||
Series B 5.75% 10/1/33-10 (FSA) | 3,000,000 | 3,233,670 | |||
Lewisville, Texas Independent School District | |||||
6.15% 8/15/21-09 (PSF) | 2,085,000 | 2,185,351 | |||
Liberty, Missouri Sewer System Revenue | |||||
6.15% 2/1/15-09 (MBIA) | 1,500,000 | 1,547,040 | |||
Linn County, Oregon Community School District #9 | |||||
Lebanon 5.60% 6/15/30-13 (FGIC) | 2,000,000 | 2,213,280 | |||
Louisiana Public Facilities Authority Revenue | |||||
(Ochsner Clinic Foundation Project) | |||||
Series B 5.50% 5/15/32-26 | 1,500,000 | 1,595,340 | |||
Maryland State Economic Development Corporation, | |||||
Student Housing Revenue (University of Maryland | |||||
College Park Project) 5.625% 6/1/35-13 | 1,125,000 | 1,245,049 | |||
Massachusetts State Development Finance Agency | |||||
Revenue (Massachusetts College of Pharmacy Project) | |||||
Series C 5.75% 7/1/33-13 | 1,500,000 | 1,680,495 |
17
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
§Pre-Refunded Bonds (continued) | |||||
Miami-Dade County, Florida Educational Facilities | |||||
Authority (University of Miami) | |||||
5.00% 4/1/34-14 (AMBAC) | $ | 7,000,000 | $ | 7,505,610 | |
Series A 5.75% 4/1/29-10 (AMBAC) | 2,000,000 | 2,133,700 | |||
Milledgeville-Baldwin County, Georgia Development | |||||
Authority Revenue (Georgia College & State University | |||||
Foundation Student Housing Project) 6.00% 9/1/33-14 | 1,000,000 | 1,143,210 | |||
Mississippi Development Bank Special Obligation | |||||
(Madison County Hospital Project) 6.30% 7/1/22-09 | 2,070,000 | 2,203,349 | |||
New Jersey State Educational Facilities Authority Revenue | |||||
(Stevens Institute of Technology) | |||||
Series B 5.25% 7/1/24-14 | 2,085,000 | 2,267,855 | |||
New York City, New York Series J 5.25% 6/1/28-13 | 2,895,000 | 3,149,152 | |||
North Carolina Medical Care Commission Hospital | |||||
Revenue (Northeast Medical Center Project) | |||||
5.125% 11/1/34-14 | 1,250,000 | 1,359,413 | |||
Orange County, Florida Health Facilities | |||||
Authority Revenue (Adventist Health System) | |||||
5.625% 11/15/32-12 | 1,000,000 | 1,099,900 | |||
Orlando, Florida Utilities Commission | |||||
Water & Electric Revenue | |||||
5.25% 10/1/20-11 | 1,575,000 | 1,699,047 | |||
Osceola County, Florida School Board | |||||
Certificates of Participation Series A | |||||
5.25% 6/1/27-12 (AMBAC) | 4,000,000 | 4,331,640 | |||
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 | 4,388,400 | |||
Puerto Rico Commonwealth Highway & Transportation | |||||
Authority Revenue | |||||
Series D 5.25% 7/1/38-12 | 3,000,000 | 3,222,630 | |||
Series G 5.00% 7/1/42-13 | 525,000 | 565,273 | |||
Series K 5.00% 7/1/35-15 | 3,500,000 | 3,786,405 | |||
Puerto Rico Commonwealth Public Improvement | |||||
5.125% 7/1/30-11 (FSA) | 920,000 | 976,966 | |||
Series A 5.125% 7/1/31-11 | 3,495,000 | 3,711,410 | |||
Puerto Rico Electric Power Authority Revenue | |||||
Series II 5.25% 7/1/31-12 | 6,000,000 | 6,509,760 | |||
Series NN 5.125% 7/1/29-13 | 1,400,000 | 1,515,878 |
18
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
§Pre-Refunded Bonds (continued) | |||||
Puerto Rico Public Buildings Authority Revenue | |||||
(Guaranteed Government Facilities) | |||||
Series I 5.25% 7/1/33-14 | $ | 175,000 | $ | 189,525 | |
Richmond, Virginia Public Utilities Revenue | |||||
5.00% 1/15/27-12 (FSA) | 10,000,000 | 10,603,600 | |||
South Broward, Florida Hospital District Revenue | |||||
(Memorial Health Care System) 5.625% 5/1/32 | 3,000,000 | 3,285,000 | |||
South Miami, Florida Health Facilities Authority Hospital | |||||
Revenue (Baptist Health South Florida Group) | |||||
5.25% 11/15/33-13 | 4,000,000 | 4,323,280 | |||
St. Louis, Missouri Airport Revenue | |||||
(Capital Improvement Project) | |||||
Series A 5.375% 7/1/21-12 (MBIA) | 1,635,000 | 1,762,448 | |||
Tampa, Florida Utilities Tax Revenue Series A | |||||
6.00% 10/1/17-09 (AMBAC) | 1,000,000 | 1,059,490 | |||
6.125% 10/1/18-09 (AMBAC) | 1,000,000 | 1,061,420 | |||
Vancouver, Washington Limited Tax | |||||
5.50% 12/1/25-10 (AMBAC) | 1,250,000 | 1,332,613 | |||
Wisconsin Housing & Economic Developing | |||||
Authority Revenue 6.10% 6/1/21-17 (FHA) | 765,000 | 836,443 | |||
133,429,694 | |||||
Special Tax Bonds – 5.92% | |||||
Bi-State Development Agency Missouri - Illinois | |||||
Metropolitan District (Metrolink Cross County Project) | |||||
Series B 5.00% 10/1/32 (FSA) | 2,000,000 | 1,931,300 | |||
Jackson County, Missouri Special Obligation | |||||
5.00% 12/1/27 (MBIA) | 1,000,000 | 958,730 | |||
Jacksonville, Florida Excise Taxes Revenue Series B | |||||
5.00% 10/1/26 (AMBAC) | 1,000,000 | 957,010 | |||
5.125% 10/1/32 (FGIC) | 1,000,000 | 962,760 | |||
Michigan, Michigan Municipal Bond Authority Revenue | |||||
(State Clean Water Revolving Foundation) | |||||
5.00%10/1/14 | 7,000,000 | 7,567,980 | |||
5.00% 10/1/15 | 3,000,000 | 3,236,340 | |||
Middlesex County, New Jersey Improvement Authority | |||||
Senior Revenue (Heldrich Center | |||||
Hotel/Conference Project) Series A | |||||
5.00% 1/1/32 | 1,500,000 | 1,224,225 | |||
5.125% 1/1/37 | 1,500,000 | 1,218,630 |
19
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Special Tax Bonds (continued) | |||||
New Jersey Economic Development Authority (Cigarette Tax) | |||||
5.50% 6/15/31 | $ | 1,000,000 | $ | 899,480 | |
5.75% 6/15/34 | 2,000,000 | 1,842,540 | |||
New York City, New York Transitional Finance Authority | |||||
Series D 5.00% 2/1/31 | 5,000,000 | 4,866,750 | |||
New York Sales Tax Asset Receivables Series A | |||||
5.25% 10/15/27 (AMBAC) | 1,000,000 | 1,007,170 | |||
Palm Beach County, Florida Criminal Justice Facilities | |||||
Revenue 5.75% 6/1/12 (FGIC) | 10,000,000 | 10,925,300 | |||
Tampa, Florida Sports Authority Revenue Sales Tax | |||||
(Tampa Bay Arena Project) 5.75% 10/1/20 (MBIA) | 1,000,000 | 1,074,330 | |||
Truth or Consequences, New Mexico Gross Receipts Tax | |||||
Revenue 6.30% 7/1/16 | 1,000,000 | 1,001,330 | |||
39,673,875 | |||||
State General Obligation Bonds – 15.47% | |||||
California State | |||||
5.00% 11/1/21 | 4,515,000 | 4,454,002 | |||
5.00% 2/1/26 (AMBAC) | 5,570,000 | 5,485,559 | |||
5.25% 2/1/30 (MBIA) | 3,490,000 | 3,492,303 | |||
Georgia State Series E 5.00% 8/1/12 | 7,425,000 | 7,974,079 | |||
Maryland State & Local Facilities Land | |||||
Capital Improvement | |||||
First Series 5.00% 8/1/11 | 5,000,000 | 5,328,350 | |||
Second Series 5.00% 8/1/14 | 3,500,000 | 3,798,900 | |||
Second Series 5.00% 8/1/16 | 4,000,000 | 4,330,200 | |||
Series A 5.00% 3/1/12 | 8,000,000 | 8,550,960 | |||
Minnesota State | |||||
5.00% 6/1/14 | 7,500,000 | 8,111,400 | |||
5.00% 10/1/15 | 7,000,000 | 7,582,680 | |||
Pennsylvania State First Series | |||||
5.00% 7/1/11 | 5,955,000 | 6,322,662 | |||
5.00% 7/1/13 | 3,000,000 | 3,232,410 | |||
5.25% 2/1/14 (MBIA) | 6,455,000 | 7,034,465 | |||
Puerto Rico Commonwealth Public Improvement | |||||
5.25% 7/1/27 (FSA) | 705,000 | 702,406 | |||
Series A 5.125% 7/1/31 | 7,880,000 | 7,194,361 | |||
Series A 5.25% 7/1/23 | 500,000 | 475,195 | |||
Series A 5.50% 7/1/19 (MBIA) | 11,500,000 | 11,951,835 |
20
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
State General Obligation Bonds (continued) | |||||
Texas State Transportation Commission | |||||
(Mobility Foundation) 5.00% 4/1/19 | $ | 7,250,000 | $ | 7,567,985 | |
103,589,752 | |||||
Transportation Revenue Bonds – 4.91% | |||||
Branson, Missouri Regional Airport Transportation | |||||
Development District Revenue (Branson Airport | |||||
Project) Series B 6.00% 7/1/37 (AMT) | 1,500,000 | 1,269,240 | |||
Capital Trust Agency Florida Revenue (Fort Lauderdale/ | |||||
Cargo Acquisition Project) 5.75% 1/1/32 (AMT) | 3,750,000 | 3,361,950 | |||
(Orlando/Cargo Acquisition Project) | |||||
6.75% 1/1/32 (AMT) | 2,395,000 | 2,357,087 | |||
Dallas-Fort Worth, Texas International Airport Revenue | |||||
Series A 5.50% 11/1/31 (FGIC) (AMT) | 1,500,000 | 1,422,015 | |||
Grapevine, Texas Industrial Development Corporate | |||||
Revenue (Air Cargo) 6.50% 1/1/24 (AMT) | 915,000 | 911,322 | |||
Houston, Texas Industrial Development Corporate | |||||
Revenue (Air Cargo) 6.375% 1/1/23 (AMT) | 2,000,000 | 1,968,740 | |||
Miami-Dade County, Florida Aviation Revenue | |||||
Series A 5.00% 10/1/33 (FSA) (AMT) | 500,000 | 457,540 | |||
Metropolitan, New York Transportation Authority Revenue | |||||
Series A 5.00% 11/15/18 | 5,300,000 | 5,440,344 | |||
New York State Thruway Authority General Revenue | |||||
Series H 5.00% 1/1/19 (MBIA) | 6,240,000 | 6,510,691 | |||
Orlando & Orange County, Florida Expressway Authority | |||||
Revenue Series A 5.00% 7/1/32 (FSA) | 1,380,000 | 1,318,204 | |||
Pennsylvania State Turnpike Commission Revenue | |||||
Series A 5.00% 12/1/34 (AMBAC) | 500,000 | 472,500 | |||
Puerto Rico Commonwealth Highway & Transportation | |||||
Authority Revenue Series G 5.00% 7/1/42 | 275,000 | 241,269 | |||
South Carolina Transportation Infrastructure Revenue | |||||
Series A 5.00% 10/1/33 (AMBAC) | 7,500,000 | 7,116,074 | |||
32,846,976 | |||||
Water & Sewer Revenue Bonds – 4.05% | |||||
Augusta, Georgia Water & Sewer Revenue | |||||
5.25% 10/1/34 (FSA) | 4,375,000 | 4,349,931 | |||
Florida Village Center Community Development District | |||||
Utility Revenue 5.00% 10/1/36 (MBIA) | 500,000 | 469,630 | |||
Fulton County, Georgia Water & Sewer Revenue | |||||
5.25% 1/1/35 (FGIC) | 1,000,000 | 1,000,420 |
21
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Water & Sewer Revenue Bonds (continued) | ||||||
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 | $ | 1,062,873 | ||
New York City, New York Municipal Water Finance | ||||||
Authority Water & Sewer System Revenue Series A | ||||||
5.125% 6/15/34 | 12,125,000 | 11,960,343 | ||||
5.25% 6/15/34 | 3,705,000 | 3,673,396 | ||||
Tampa, Florida Water and Sewer Revenue | ||||||
6.00% 10/1/16 (FSA) | 1,000,000 | 1,139,840 | ||||
Virgin Islands Water & Power Authority Water System | ||||||
Revenue 5.50% 7/1/17 | 510,000 | 512,453 | ||||
West Virginia State Water Development Authority | ||||||
Revenue (Loan Program III) Series A | ||||||
6.375% 7/1/39 (AMBAC) (AMT) | 2,890,000 | 2,944,910 | ||||
27,113,796 | ||||||
Total Municipal Bonds (cost $667,410,931) | 657,942,885 | |||||
Total Value of Securities – 98.26% (cost $667,410,931) | 657,942,885 | |||||
Receivables and Other Assets | ||||||
Net of Liabilities – 1.74% | 11,628,160 | |||||
Net Assets Applicable to 62,004,522 | ||||||
Shares Outstanding – 100.00% | $ | 669,571,045 | ||||
Net Asset Value – Delaware Tax-Free USA Fund | ||||||
Class A ($639,779,624 / 59,245,582 Shares) | $10.80 | |||||
Net Asset Value – Delaware Tax-Free USA Fund | ||||||
Class B ($13,375,242 / 1,239,165 Shares) | $10.79 | |||||
Net Asset Value – Delaware Tax-Free USA Fund | ||||||
Class C ($16,416,179 / 1,519,775 Shares) | $10.80 |
22
Components of Net Assets at February 29, 2008: | |||
Shares of beneficial interest (unlimited authorization – no par) | $ | 687,097,905 | |
Undistributed net investment income | 1,790 | ||
Accumulated net realized loss on investments | (8,060,604 | ) | |
Net unrealized depreciation of investments | (9,468,046 | ) | |
Total net assets | $ | 669,571,045 |
§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 29, 2008.
^Zero coupon security. The rate shown is the yield at the time of purchase.
ΩStep 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.
23
Statements of net assets
Delaware Tax-Free USA Fund
ACA — Insured by American Capital Access
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
FNMA — Insured by Federal National Mortgage Association
FSA — Insured by Financial Security Assurance
GNMA — Insured by Government National Mortgage Association
HUD — Housing and Urban Development
MBIA — Insured by the Municipal Bond Insurance Association
PSF — Insured by the Permanent School Fund
RADIAN — Insured by Radian Asset Assurance
VHA — Veterans Health Administration
XLCA — Insured by XL Capital Assurance
Net Asset Value and Offering Price Per Share – | ||
Delaware Tax-Free USA Fund | ||
Net asset value Class A (A) | $ | 10.80 |
Sales charge (4.50% of offering price) (B) | 0.51 | |
Offering price | $ | 11.31 |
(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
Delaware Tax-Free USA Intermediate Fund | February 29, 2008 (Unaudited) |
Principal amount | Value | ||||
Municipal Bonds – 96.68% | |||||
Corporate Revenue Bonds – 6.95% | |||||
Alliance Airport Authority, Texas Special Facilities | |||||
Revenue (Federal Express Corp. Project) | |||||
4.85% 4/1/21 (AMT) | $ | 2,000,000 | $ | 1,795,220 | |
Brazos, Texas River Authority Pollution | |||||
Control Revenue (Texas Utilities) | |||||
5.40% 5/1/29 (AMT) | 1,000,000 | 773,980 | |||
Buckeye, Ohio Tobacco Settlement Financing | |||||
Authority Asset-Backed Senior Turbo | |||||
Series A-2 6.50% 6/1/47 | 3,755,000 | 3,712,456 | |||
·Chesapeake, Virginia Economic Development | |||||
Authority Pollution Control Revenue | |||||
(Electric & Power Co. Project) | |||||
Series A 3.60% 2/1/32 | 1,150,000 | 1,114,304 | |||
Connecticut State Development Authority Pollution | |||||
Control Revenue (Connecticut Light & Power) Series A | |||||
·3.35% 5/1/31 (AMBAC) (AMT) | 1,300,000 | 1,305,226 | |||
5.85% 9/1/28 | 1,145,000 | 1,153,244 | |||
·Farmington, New Mexico Pollution Control | |||||
Revenue (El Paso Electric Co. Project) | |||||
Series A 4.00% 6/1/32 (FGIC) | 1,000,000 | 1,000,910 | |||
·Forsyth, Montana Pollution Control Revenue (Portland | |||||
General Project) Series A 5.20% 5/1/33 | 1,005,000 | 1,019,372 | |||
ΩGolden State, California Tobacco Securitization | |||||
Corporation Settlement Revenue Refunding | |||||
Asset-Backed Senior Convertible | |||||
Series A-2 5.30% 6/1/37 | 1,500,000 | 895,875 | |||
Indianapolis, Indiana Airport Authority Revenue Special | |||||
Facilities (Federal Express Corp. Project) | |||||
5.10% 1/15/17 (AMT) | 750,000 | 738,870 | |||
Memphis-Shelby County, Tennessee Airport | |||||
Authority Special Facilities Revenue | |||||
(Federal Express Corp. Project) | |||||
5.05% 9/1/12 | 1,000,000 | 1,029,060 | |||
Michigan State Strategic Funding Limited Obligation | |||||
Revenue (Detroit Edison Co. Project) | |||||
Series A 5.50% 6/1/30 (XLCA) (AMT) | 1,000,000 | 951,880 | |||
Ohio State Air Quality Development Authority Revenue | |||||
Environmental Improvement (USX Project) | |||||
5.00% 11/1/15 | 1,000,000 | 1,015,310 |
25
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Corporate Revenue Bonds (continued) | |||||
·Pennsylvania Economic Development Financing Authority | |||||
Exempt Facilities Revenue (PSEG Power LLC Project) | |||||
4.00% 1/15/42 (AMT) | $ | 5,500,000 | $ | 5,533,550 | |
Prattville, Alabama Industrial Development Board | |||||
Environmental Improvement Revenue | |||||
(International Paper Co. Project) | |||||
Series A 6.70% 3/1/24 (AMT) | 1,000,000 | 1,013,790 | |||
·Sabine, Texas River Authority Pollution | |||||
Control Revenue (TXU Electric Co. Project) | |||||
Series A 5.50% 5/1/22 | 1,000,000 | 941,400 | |||
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 | 475,260 | |||
Sugar Creek, Missouri Industrial Development Revenue | |||||
(Lafarge North America Project) | |||||
Series A 5.65% 6/1/37 (AMT) | 500,000 | 436,020 | |||
Tobacco Settlement Financing Corporation, Virginia | |||||
Senior Series B-1 5.00% 6/1/47 | 1,375,000 | 1,088,120 | |||
Toledo, Lucas County, Ohio Port Authority Development | |||||
Revenue (Northwest Ohio Bond Fund - Alex | |||||
Products Inc.) | |||||
Series B 6.125% 11/15/09 (AMT) | 430,000 | 442,530 | |||
26,436,377 | |||||
Education Revenue Bonds – 6.97% | |||||
California Municipal Finance Authority Educational Revenue | |||||
(American Heritage Education Foundation Project) | |||||
Series A 5.25% 6/1/26 | 1,000,000 | 866,930 | |||
Chattanooga, Tennessee Health Educational & Housing | |||||
Facilities Board Revenue (CDFI Phase I, LLC Project) | |||||
Series B 5.50% 10/1/20 | 1,160,000 | 1,053,338 | |||
Fulton County, Georgia Development Authority Revenue | |||||
(Molecular Science Building Project) | |||||
5.25% 5/1/21 (MBIA) | 1,000,000 | 1,016,780 | |||
Grand Traverse, Michigan Public | |||||
School Academy Revenue | |||||
5.00% 11/1/36 | 900,000 | 697,167 | |||
Illinois Finance Authority Revenue | |||||
(Illinois Institute of Technology) | |||||
Series A 5.00% 4/1/36 | 825,000 | 713,584 |
26
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Education Revenue Bonds (continued) | |||||
Illinois Finance Authority Student Housing Revenue | |||||
Series B 5.00% 5/1/30 | $ | 3,250,000 | $ | 2,646,930 | |
Lubbock, Texas Educational Facilities Authority Revenue | |||||
(Lubbock Christian University) | |||||
5.25% 11/1/37 | 1,000,000 | 859,100 | |||
Massachusetts State Health & Educational Facilities | |||||
Authority Revenue (Nichols College Project) | |||||
Series C 6.125% 10/1/29 | 1,000,000 | 988,140 | |||
Michigan Higher Education Facilities Authority Revenue | |||||
(Kalamazoo College Project) 5.50% 12/1/19 | 500,000 | 510,465 | |||
New York State Dormitory Authority Revenue | |||||
(Brooklyn Law School) | |||||
Series A 5.50% 7/1/18 (RADIAN) | 1,000,000 | 1,019,820 | |||
(Long Island University) | |||||
Series B 5.50% 9/1/20 (RADIAN) | 1,000,000 | 1,010,860 | |||
Ohio State Higher Educational Facility Revenue | |||||
(John Carroll University) 5.50% 11/15/18 | 335,000 | 346,906 | |||
·(Kenyon College Project) 4.70% 7/1/37 | 1,000,000 | 1,041,850 | |||
Ohio State University General Receipts Revenue | |||||
Series B 5.25% 6/1/21 | 1,000,000 | 1,024,340 | |||
Texas A & M University Revenue Financing System | |||||
5.00% 5/15/12 | 3,655,000 | 3,903,905 | |||
5.00% 5/15/13 | 3,760,000 | 4,043,954 | |||
Tulsa, Oklahoma Industrial Authority Student Housing | |||||
Revenue (University of Tulsa) 5.00% 10/1/37 | 1,000,000 | 905,700 | |||
University of California Revenue | |||||
Series A 5.125% 5/15/20 (AMBAC) | 250,000 | 253,978 | |||
University of Oklahoma Research Facilities Revenue | |||||
5.00% 3/1/23 (AMBAC) | 1,065,000 | 1,056,129 | |||
University of Virginia General Revenue Series B | |||||
5.00% 6/1/20 | 1,250,000 | 1,273,313 | |||
5.00% 6/1/21 | 1,250,000 | 1,269,225 | |||
26,502,414 | |||||
Electric Revenue Bonds – 2.37% | |||||
Metropolitan Government Nashville & Davidson County, | |||||
Tennessee Electric Revenue | |||||
Series B 5.50% 5/15/14 | 1,000,000 | 1,099,480 |
27
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Electric Revenue Bonds (continued) | |||||
Oliver County North Dakota Pollution Control Revenue | |||||
(Square Butte Electric Coop) | |||||
Series A 5.30% 1/1/27 (AMBAC) | $ | 1,500,000 | $ | 1,482,285 | |
Orlando, Florida Utilities Commission | |||||
Water & Electric Revenue | |||||
5.25% 10/1/20 | 555,000 | 569,957 | |||
Philadelphia, Pennsylvania Gas Works Revenue First | |||||
Series A 5.375% 7/1/15 (FSA) | 2,000,000 | 2,014,880 | |||
Rochester, Minnesota Electric Utilities Revenue | |||||
Series C 5.00% 12/1/18 (MBIA) | 2,000,000 | 2,060,180 | |||
South Carolina State Public Service | |||||
Authority Revenue Refunding | |||||
Series A 5.125% 1/1/21 (FSA) | 1,000,000 | 1,018,380 | |||
Texas Municipal Power Agency Revenue | |||||
4.00% 9/1/11 (AMBAC) | 750,000 | 750,375 | |||
8,995,537 | |||||
Escrowed to Maturity Bonds – 0.05% | |||||
Southcentral, Pennsylvania General Authority Revenue | |||||
(Wellspan Health Obligated Project) 5.625% 5/15/26 | 180,000 | 186,545 | |||
186,545 | |||||
Health Care Revenue Bonds – 6.05% | |||||
Chatham County, Georgia Hospital Authority Revenue | |||||
(Memorial Health Medical Center) | |||||
Series A 6.125% 1/1/24 | 1,000,000 | 957,910 | |||
Cleveland-Cuyahoga County, Ohio Port Authority | |||||
Revenue (Saint Clarence - Geac) | |||||
Series A 6.125% 5/1/26 | 715,000 | 669,240 | |||
Cuyahoga County, Ohio Revenue | |||||
(Cleveland Clinic Health System) | |||||
Series A 6.00% 1/1/21 | 1,000,000 | 1,074,440 | |||
Georgia Medical Center Hospital Authority Revenue | |||||
(Spring Harbor Green Island Project) | |||||
5.25% 7/1/37 | 2,300,000 | 1,714,029 | |||
·Highlands County, Florida Health Facilities Authority | |||||
Revenue (Adventist Health System) | |||||
Series I 5.00% 11/15/29 | 2,000,000 | 2,071,580 | |||
Indiana Health Facility Financing Authority Hospital | |||||
Revenue (Deaconess Hospital Obligation) | |||||
Series A 5.375% 3/1/29 (AMBAC) | 700,000 | 687,470 |
28
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Health Care Revenue Bonds (continued) | |||||
Maryland State Health & Higher Education Facilities | |||||
Authority Revenue (Union Hospital of Cecil County) | |||||
5.625% 7/1/32 | $ | 500,000 | $ | 494,080 | |
Michigan State Hospital Finance Authority Revenue | |||||
(Henry Ford Health System) | |||||
Series A 5.25% 11/15/46 | 3,250,000 | 2,901,502 | |||
(Oakwood Obligation Group) | |||||
5.50% 11/1/14 | 2,230,000 | 2,343,819 | |||
(Trinity Health Credit) | |||||
Series C 5.375% 12/1/23 | 500,000 | 496,025 | |||
Multnomah County, Oregon Hospital Facilities | |||||
Authority Revenue (Providence Health System) | |||||
5.25% 10/1/22 | 1,000,000 | 984,940 | |||
New Hampshire Health & Education Facilities | |||||
Authority Revenue (Elliot Hospital) | |||||
Series B 5.60% 10/1/22 | 1,000,000 | 1,004,700 | |||
North Carolina Medical Care Commission | |||||
Health Care Facilities Revenue | |||||
(First Mortgage - Presbyterian Homes) | |||||
5.40% 10/1/27 | 950,000 | 882,617 | |||
(Pennybryn at Mayfield Project) | |||||
Series A 6.125% 10/1/35 | 1,650,000 | 1,480,050 | |||
Shelby County, Tennessee Health Educational & | |||||
Housing Facilities Board Revenue | |||||
(Trezevant Manor Project) | |||||
Series A 5.75% 9/1/37 | 1,000,000 | 909,360 | |||
St. Mary Hospital Authority Pennsylvania Health System | |||||
Revenue (Catholic Health East) | |||||
Series A 5.25% 11/15/16 | 1,200,000 | 1,232,316 | |||
St. Paul, Minnesota Housing & Redevelopment Authority | |||||
Hospital Revenue (Health East Project) | |||||
6.00% 11/15/25 | 1,000,000 | 969,700 | |||
Suffolk, Virginia Industrial Development Authority | |||||
Retirement Facilities Revenue | |||||
(First Management - Lake Prince) | |||||
5.15% 9/1/24 | 725,000 | 648,687 |
29
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Health Care Revenue Bonds (continued) | |||||
Terrebonne Parish, Louisiana Hospital Service | |||||
District #1 Hospital Revenue (Terrebonne | |||||
General Medical Center Project) | |||||
5.50% 4/1/33 (AMBAC) | $ | 1,500,000 | $ | 1,501,455 | |
23,023,920 | |||||
Housing Revenue Bonds – 0.22% | |||||
Maryland State Community Development | |||||
Administration Department Housing & | |||||
Community Development Residential | |||||
Series A 4.70% 9/1/37 (AMT) | 1,000,000 | 837,080 | |||
837,080 | |||||
Lease Revenue Bonds – 3.99% | |||||
California State Public Works Board Lease Revenue | |||||
(Department of General Services - Butterfield Street) | |||||
Series A 5.25% 6/1/25 | 1,000,000 | 954,060 | |||
Golden State, California Tobacco Securitization | |||||
Corporation Settlement Revenue Refunding | |||||
Asset-Backed Series A | |||||
5.00% 6/1/18 | 2,000,000 | 2,001,280 | |||
5.00% 6/1/21 (AMBAC) | 1,000,000 | 998,960 | |||
Michigan State Building Authority Revenue Series I | |||||
5.00% 10/15/09 (FSA) | 1,000,000 | 1,036,810 | |||
5.00% 10/15/24 | 3,000,000 | 2,959,829 | |||
5.50% 10/15/18 | 2,175,000 | 2,297,975 | |||
Minnesota State Retirement System Building Revenue | |||||
5.875% 6/1/27 | 765,000 | 793,076 | |||
Missouri State Development Finance Board Infrastructure | |||||
Facilities Revenue (Crackerneck Creek Project) | |||||
Series C 5.00% 3/1/28 | 1,600,000 | 1,487,168 | |||
New York State Municipal Bond Bank | |||||
Agency Special School Purpose Revenue | |||||
Series C 5.25% 6/1/22 | 1,000,000 | 1,004,470 | |||
·Puerto Rico Public Buildings Authority Revenue | |||||
(Guaranteed Government Facilities) | |||||
Series J 5.00% 7/1/28 | 1,000,000 | 1,016,100 | |||
·Puerto Rico Public Finance Corporate Revenue | |||||
Series A 5.25% 8/1/29 (MBIA) | 620,000 | 631,836 | |||
15,181,564 |
30
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Local General Obligation Bonds – 15.14% | |||||
^Anaheim, California City School District Election 2002 | |||||
4.58% 8/1/25 (MBIA) | $ | 2,500,000 | $ | 880,850 | |
Belton, Missouri School District #124 | |||||
Series B 5.25% 3/1/23 | 1,000,000 | 1,019,950 | |||
Boerne, Texas Independent School District Building | |||||
5.25% 2/1/26 (PSF) | 4,495,000 | 4,514,149 | |||
5.25% 2/1/29 (PSF) | 1,500,000 | 1,500,570 | |||
Chicago, Illinois Board of Education | |||||
Refunding Dedicated Revenue | |||||
Series B 5.00% 12/1/23 (AMBAC) | 3,500,000 | 3,428,740 | |||
Chicago, Illinois Modern Schools Across Chicago | |||||
Series J 5.00% 12/1/23 (AMBAC) | 2,865,000 | 2,809,706 | |||
Chicago, Illinois Project & Refunding | |||||
Series C 5.50% 1/1/40 (FGIC) | 2,940,000 | 2,953,994 | |||
Coralville, Iowa Urban Renewal Revenue Tax Increment | |||||
Series C | |||||
5.00% 6/1/47 | 850,000 | 691,025 | |||
5.125% 6/1/39 | 500,000 | 424,605 | |||
Dallas, Texas 5.125% 2/15/15 | 3,000,000 | 3,248,700 | |||
Denver, Colorado City & County Justice System | |||||
5.25% 8/1/18 | 1,000,000 | 1,080,570 | |||
East Homestead Community Development District Florida | |||||
Special Assessment Revenue | |||||
Series B 5.00% 5/1/11 | 365,000 | 343,972 | |||
Fairfax County, Virginia Refunding & Public Improvement | |||||
5.25% 4/1/14 | 3,500,000 | 3,838,170 | |||
Florida State Board Education Capital | |||||
Outlay Public Education | |||||
Series D 5.75% 6/1/22 | 2,000,000 | 2,094,240 | |||
Gwinnett County, Georgia School District | |||||
5.00% 2/1/11 | 3,500,000 | 3,701,705 | |||
Lansing, Michigan Community College | |||||
(College Building and Site) | |||||
5.00% 5/1/21 (MBIA) | 1,325,000 | 1,341,457 | |||
Licking County, Ohio Joint Vocational School District | |||||
School Facilities Construction and | |||||
Improvement 5.00% 12/1/19 (MBIA) | 1,000,000 | 1,021,340 | |||
Los Angeles, California Unified School District | |||||
Election 2004 Series G 5.00% 7/1/13 (AMBAC) | 2,000,000 | 2,150,900 | |||
Series A-2 4.25% 1/1/28 (FGIC) | 355,000 | 302,790 |
31
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Local General Obligation Bonds (continued) | |||||
Mecklenburg County, North Carolina Public Improvement | |||||
Series A 5.00% 2/1/11 | $ | 4,775,000 | $ | 5,050,182 | |
Middlesex County, New Jersey Improvement Authority | |||||
Revenue (County Guaranteed Open Space Trust) | |||||
5.25% 9/15/20 | 1,000,000 | 1,029,940 | |||
Modesto, California Special Tax Community | |||||
Facilities District #04-1 Village 2 5.15% 9/1/36 | 1,500,000 | 1,189,335 | |||
New York City, New York | |||||
Series A-1 5.00% 8/1/19 | 3,500,000 | 3,565,170 | |||
Series G 5.25% 8/1/15 | 1,000,000 | 1,060,590 | |||
Series I 5.00% 8/1/21 | 1,000,000 | 997,440 | |||
Series J 5.50% 6/1/23 | 100,000 | 101,447 | |||
North East Texas Independent School | |||||
District School Building | |||||
Series A 5.00% 8/1/20 (PSF) | 3,500,000 | 3,577,455 | |||
Powell, Ohio | |||||
5.50% 12/1/25 (FGIC) | 1,500,000 | 1,524,930 | |||
Richmond Heights, Missouri Tax Increment & Transaction | |||||
Sales Tax Revenue Refunding & Improvement | |||||
(Francis Place Redevelopment Project) | |||||
5.625% 11/1/25 | 1,200,000 | 1,047,768 | |||
St. Joseph, Missouri Industrial Development | |||||
Authority Tax Increment Revenue | |||||
(Shoppes at North Village Project) | |||||
Series A 5.10% 11/1/19 | 250,000 | 226,965 | |||
Series B 5.375% 11/1/23 | 1,000,000 | 885,400 | |||
57,604,055 | |||||
§Pre-Refunded Bonds – 10.61% | |||||
Arizona State Transportation Board Highway Revenue | |||||
6.25% 7/1/16-09 | 1,850,000 | 1,934,083 | |||
Benton & Linn Counties, Oregon School District #509J | |||||
5.00% 6/1/21-13 (FSA) | 1,000,000 | 1,076,360 | |||
California State | |||||
5.00% 2/1/33-14 (MBIA) | 1,800,000 | 1,933,470 | |||
5.25% 2/1/30-12 (MBIA) | 5,000 | 5,378 | |||
Cook County, Illinois | |||||
Series A 5.375% 11/15/21-11 (FGIC) | 2,160,000 | 2,305,930 |
32
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
§Pre-Refunded Bonds (continued) | |||||
Duluth, Minnesota Economic Development | |||||
Authority Health Care Facilities Revenue | |||||
(Benedictine Health System - St. Mary's Hospital) | |||||
5.25% 2/15/28-14 | $ | 1,000,000 | $ | 944,460 | |
5.50% 2/15/23-14 | 1,000,000 | 995,940 | |||
Forest Grove, Oregon Revenue Campus | |||||
(Pacific University) | |||||
6.30% 5/1/25-10 (RADIAN) | 1,000,000 | 1,071,140 | |||
Golden State, California Tobacco Securitization | |||||
Settlement Revenue Enchanced Asset-Backed | |||||
Series B 5.75% 6/1/23-08 | 1,000,000 | 1,006,340 | |||
Illinois Educational Facilities Authority Student | |||||
Housing Revenue (Educational Advancement - | |||||
University Center Project) | |||||
6.00% 5/1/22-12 | 750,000 | 833,033 | |||
Lancaster County, Pennsylvania Hospital Authority | |||||
Revenue (Lancaster General Hospital Project) | |||||
5.75% 3/15/21-13 | 1,000,000 | 1,106,700 | |||
Lunenburg County, Virginia | |||||
Series B 5.25% 2/1/29-13 (MBIA) | 715,000 | 781,545 | |||
Miami-Dade County, Florida Educational Facilities | |||||
Authority Revenue (University of Miami) | |||||
Series A 5.00% 4/1/34-14 (AMBAC) | 3,500,000 | 3,752,805 | |||
Minneapolis, Minnesota Health Care System Revenue | |||||
(Allina Health Systems) | |||||
Series A 5.75% 11/15/32-12 | 500,000 | 548,395 | |||
New Jersey State Educational Facilities Authority | |||||
Revenue (Georgian Court College Project) | |||||
Series C 6.50% 7/1/33-13 | 500,000 | 573,095 | |||
New York City, New York | |||||
Series J 5.50% 6/1/23-13 | 900,000 | 989,757 | |||
North Texas Health Facilities Development | |||||
Corporation Hospital Revenue | |||||
(United Regional Health Care System, Inc. Project) | |||||
6.00% 9/1/23-13 | 1,000,000 | 1,125,380 | |||
Ohio State Higher Education Capital Facilities | |||||
Series B 5.625% 5/1/14-10 | 5,780,000 | 6,108,361 |
33
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
§Pre-Refunded Bonds (continued) | |||||
Orlando, Florida Utilities Commission | |||||
Water & Electric Revenue | |||||
5.25% 10/1/20-11 | $ | 945,000 | $ | 1,019,428 | |
Pennsylvania State First Series | |||||
5.125% 1/15/19-11 | 3,515,000 | 3,743,967 | |||
Pennsylvania State Higher Educational Facilities Authority | |||||
College & University Revenue (Geneva College Project) | |||||
6.125% 4/1/22-12 | 1,000,000 | 1,100,560 | |||
Puerto Rico Commonwealth Highway & Transportation | |||||
Authority Revenue Series J 5.50% 7/1/21-14 | 1,000,000 | 1,105,290 | |||
Puerto Rico Public Buildings Authority Revenue | |||||
(Guaranteed Government Facilities) | |||||
Series I 5.50% 7/1/23-14 | 2,000,000 | 2,193,960 | |||
Southcentral, Pennsylvania General Authority Revenue | |||||
(Welllspan Health Obligated Project) | |||||
5.625% 5/15/26-11 | 820,000 | 888,503 | |||
University of North Carolina Revenue (Chapel Hill) | |||||
Series A 5.375% 12/1/14-11 | 2,000,000 | 2,137,980 | |||
Virginia State Resource Authority Clean | |||||
Water Revenue (State Revolving Fund) | |||||
6.00% 10/1/16-10 | 1,000,000 | 1,076,100 | |||
40,357,960 | |||||
Resource Recovery Bonds – 0.37% | |||||
Pennsylvania Economic Development Financing Authority | |||||
Resource Recovery Revenue (Subordinate Colver Project) | |||||
Series G 5.125% 12/1/15 (AMT) | 1,500,000 | 1,406,580 | |||
1,406,580 | |||||
Special Tax Bonds – 5.32% | |||||
Baltimore, Maryland Convention Center | |||||
Hotel Revenue Subordinated | |||||
Series B 5.00% 9/1/16 | 1,200,000 | 1,114,536 | |||
California State Economic Recovery | |||||
Series A 5.25% 7/1/14 | 1,000,000 | 1,093,320 | |||
·Series B 5.00% 7/1/23 | 3,365,000 | 3,550,310 | |||
Casa Grande, Arizona Excise Tax Revenue | |||||
5.00% 4/1/22 (AMBAC) | 1,600,000 | 1,595,120 | |||
Dallas, Texas Civic Center Convention | |||||
Complex Revenue Refunding & Improvement | |||||
4.875% 8/15/23 (MBIA) | 1,500,000 | 1,454,805 |
34
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Special Tax Bonds (continued) | |||||
Gravois Bluffs, Missouri Transportation Development | |||||
District Sales Tax Revenue 4.75% 5/1/32 | $ | 750,000 | $ | 691,695 | |
Hampton, Virginia Convention Center Revenue 5.25% | |||||
1/15/23 (AMBAC) | 1,000,000 | 1,005,490 | |||
Metropolitan Pier and Exposition Authority Illinois | |||||
(McCormick Place Expansion Project) | |||||
Series A 5.50% 12/15/24 (FGIC) | 2,000,000 | 2,024,360 | |||
Middlesex County, New Jersey Improvement Authority | |||||
Senior Revenue (Heldrich Center | |||||
Hotel/Conference Project) | |||||
Series A 5.00% 1/1/32 | 1,000,000 | 816,150 | |||
New Jersey Economic Development Authority | |||||
(Cigarette Tax) | |||||
5.50% 6/15/31 | 1,000,000 | 899,480 | |||
5.625% 6/15/18 | 1,000,000 | 1,000,830 | |||
·New York City, New York Transitional Finance Authority | |||||
Revenue Refunding - Future Tax Secured | |||||
Series A 5.50% 11/1/26 | 1,000,000 | 1,064,760 | |||
New York State Sales Tax Asset Receivables | |||||
Series A 5.25% 10/15/27 (AMBAC) | 1,000,000 | 1,007,170 | |||
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 | 1,394,670 | |||
Wyoming State Loan & Investment Board Facilities Revenue | |||||
5.00% 10/1/24 | 1,550,000 | 1,534,423 | |||
20,247,119 | |||||
State General Obligation Bonds – 28.05% | |||||
California State | |||||
5.00% 11/1/15 | 1,795,000 | 1,891,499 | |||
5.00% 2/1/26 (AMBAC) | 1,500,000 | 1,477,260 | |||
5.25% 11/1/17 | 1,000,000 | 1,034,080 | |||
California State Refunding | |||||
5.00% 8/1/14 | 1,025,000 | 1,085,311 | |||
5.25% 2/1/25 | 3,000,000 | 2,979,930 | |||
California State Various Purposes | |||||
5.00% 6/1/31 | 1,000,000 | 944,770 |
35
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
State General Obligation Bonds (continued) | |||||
Florida State Board Education Capital Outlay | |||||
(Public Education) | |||||
Series B 5.00% 1/1/09 | $ | 2,500,000 | $ | 2,553,575 | |
Georgia State | |||||
5.00% 8/1/12 | 3,125,000 | 3,356,094 | |||
Series D 5.00% 7/1/11 | 6,865,000 | 7,306,830 | |||
Illinois State Refunding | |||||
Series B 5.00% 1/1/13 | 3,475,000 | 3,709,806 | |||
Maryland State & Local Facilities Land Capital Improvement | |||||
5.00% 3/15/19 | 3,675,000 | 3,862,058 | |||
Series A 5.00% 3/1/12 | 2,000,000 | 2,137,740 | |||
Series A 5.25% 3/1/13 | 2,500,000 | 2,722,400 | |||
Maryland State | |||||
Series A 5.50% 3/1/14 | 1,850,000 | 2,050,947 | |||
Massachusetts State Consolidated Loan | |||||
Series A 5.25% 8/1/13 | 5,000,000 | 5,432,950 | |||
Series C 5.00% 9/1/10 | 7,750,000 | 8,145,792 | |||
Minnesota State | |||||
5.00% 11/1/11 | 2,775,000 | 2,963,534 | |||
5.00% 6/1/14 | 900,000 | 973,368 | |||
North Carolina State | |||||
5.00% 6/1/14 | 1,700,000 | 1,842,562 | |||
North Carolina State Public Improvement Series A | |||||
5.00% 3/1/12 | 4,000,000 | 4,275,480 | |||
5.00% 3/1/15 | 1,200,000 | 1,299,120 | |||
Ohio State | |||||
Series A 5.00% 6/15/13 | 3,750,000 | 4,040,550 | |||
Series D 5.00% 9/15/14 | 3,500,000 | 3,785,075 | |||
Pennsylvania State | |||||
5.50% 2/1/13 | 3,200,000 | 3,504,704 | |||
Second Series 5.00% 8/1/13 | 4,000,000 | 4,313,760 | |||
Third Series 2004 5.00% 7/1/09 | 2,885,000 | 2,976,974 | |||
Puerto Rico Commonwealth Public Improvement | |||||
Series A | |||||
5.25% 7/1/22 | 3,470,000 | 3,337,862 | |||
5.25% 7/1/23 | 1,125,000 | 1,069,189 | |||
5.50% 7/1/17 | 4,415,000 | 4,576,148 | |||
•Puerto Rico Commonwealth | |||||
Series A 5.00% 7/1/30 | 1,000,000 | 1,022,020 |
36
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
State General Obligation Bonds (continued) | |||||
•Puerto Rico Public Finance Corporation Commonwealth | |||||
Appropriation (LOC Puerto Rico Government Bank) | |||||
Series A 5.75% 8/1/27 | $ | 1,000,000 | $ | 1,040,440 | |
Texas State Transportation Commission | |||||
(Mobility Foundation) | |||||
5.00% 4/1/13 | 1,000,000 | 1,074,160 | |||
5.00% 4/1/19 | 3,750,000 | 3,914,475 | |||
Texas State Water Financial Assistance | |||||
Series B 5.50% 8/1/35 | 3,800,000 | 3,811,134 | |||
Washington State Variable Purpose | |||||
Series A 5.00% 7/1/16 | 3,455,000 | 3,692,704 | |||
Series B 5.00% 1/1/20 | 2,500,000 | 2,506,850 | |||
106,711,151 | |||||
Transportation Revenue Bonds – 5.66% | |||||
Bay Area, California Toll Authority Revenue | |||||
Series F 5.00% 4/1/31 | 740,000 | 713,456 | |||
Capital Trust Agency Florida Revenue | |||||
(Fort Lauderdale/Cargo Acquisition Project) | |||||
5.75% 1/1/32 (AMT) | 1,750,000 | 1,568,910 | |||
Chicago, Illinois O'Hare International Airport | |||||
Revenue General-Airport-Third Lien | |||||
Series A-2 5.75% 1/1/20 (FSA) (AMT) | 1,000,000 | 1,033,920 | |||
Dallas-Fort Worth, Texas International Airport Revenue | |||||
Series A 5.00% 11/1/15 (XLCA) (AMT) | 2,000,000 | 2,010,780 | |||
Georgia Federal Highway Road and | |||||
Tollway Authority Revenue Bonds | |||||
5.00% 6/1/10 (MBIA) | 2,000,000 | 2,094,100 | |||
Metropolitan, New York Transportation | |||||
Authority Revenue | |||||
Series A 5.00% 11/15/18 | 2,500,000 | 2,566,200 | |||
Metropolitan, Washington D.C. Airport | |||||
Authority Systems Revenue | |||||
Series A 5.50% 10/1/19 (FGIC) (AMT) | 1,000,000 | 1,020,410 | |||
New York State Thruway Authority Revenue | |||||
(General Highway and Bridge Trust Fund) | |||||
Series B 5.25% 4/1/13 (AMBAC) | 3,300,000 | 3,579,774 | |||
North Texas Tollway Authority Dallas | |||||
North Tollway System Revenue | |||||
Series A 5.00% 1/1/20 (FGIC) | 1,750,000 | 1,750,035 |
37
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Transportation Revenue Bonds (continued) | |||||
Pennsylvania State Turnpike Commission Revenue | |||||
Series A 5.25% 12/1/20 (AMBAC) | $ | 1,230,000 | $ | 1,263,665 | |
South Carolina Transportation Infrastructure Bank Revenue | |||||
Series A 5.00% 10/1/33 (AMBAC) | 1,700,000 | 1,612,977 | |||
Texas State Transportation Commission | |||||
Highway Fund Revenue First Tier | |||||
5.00% 4/1/18 | 1,700,000 | 1,786,071 | |||
Virginia Port Authority Commonwealth | |||||
Port Fund Revenue Resolution | |||||
5.00% 7/1/12 (AMT) | 500,000 | 525,195 | |||
21,525,493 | |||||
Water & Sewer Revenue Bonds – 4.93% | |||||
Alabama Water Pollution Control Authority Revenue | |||||
5.50% 8/15/23 (AMBAC) | 1,000,000 | 1,011,390 | |||
Clovis, California Public Financing Authority | |||||
Wastewater Revenue | |||||
5.25% 8/1/30 (MBIA) | 1,000,000 | 953,120 | |||
Dallas, Texas Waterworks & Sewer System Revenue | |||||
5.00% 10/1/24 (FSA) | 6,500,000 | 6,485,179 | |||
Fulton County, Georgia Water & Sewer Revenue | |||||
5.25% 1/1/35 (FGIC) | 1,500,000 | 1,500,630 | |||
King County, Washington Sewer Revenue Refunding | |||||
Series B 5.00% 1/1/14 (MBIA) | 3,500,000 | 3,750,075 | |||
Massachusetts State Water Pollution Abatement Trust | |||||
5.00% 8/1/16 | 2,170,000 | 2,331,036 | |||
New York City, New York Municipal Water Finance | |||||
Authority Water & Sewer System Revenue | |||||
Series A 5.125% 6/15/34 | 2,775,000 | 2,737,316 | |||
18,768,746 | |||||
Total Municipal Bonds (cost $376,359,158) | 367,784,541 | ||||
•Variable Rate Demand Notes – 0.83% | |||||
Allegheny County, Pennsylvania Industrial Development | |||||
Authority Revenue (United Jewish Federation Project) | |||||
Series A 3.07% 10/1/26 | 100,000 | 100,000 | |||
California State Kindergarten (University Public Project) | |||||
Series A-8 3.00% 5/1/34 | 600,000 | 600,000 |
38
Principal amount | Value | ||||||
·Variable Rate Demand Notes (continued) | |||||||
Pennsylvania State Turnpike Commission | |||||||
Registration Fee Revenue | |||||||
Series C 3.05% 7/15/41 (FSA) | $ | 1,700,000 | $ | 1,700,000 | |||
St. Paul, Minnesota Housing & Redevelopment Authority | |||||||
Revenue (Pur-Cretin-Derham Hall Project) | |||||||
3.18% 2/1/26 | 300,000 | 300,000 | |||||
University of Minnesota | |||||||
Series C 3.23% 12/1/36 | 450,000 | 450,000 | |||||
Total Variable Rate Demand Notes (cost $3,150,000) | 3,150,000 | ||||||
Total Value of Securities – 97.51% (cost $379,509,158) | 370,934,541 | ||||||
Receivables and Other Assets | |||||||
Net of Liabilities – 2.49% | 9,486,342 | ||||||
Net Assets Applicable to 34,589,749 | |||||||
Shares Outstanding – 100.00% | $ | 380,420,883 | |||||
Net Asset Value – Delaware Tax-Free USA Intermediate Fund | |||||||
Class A ($353,500,669 / 32,140,862 Shares) | $11.00 | ||||||
Net Asset Value – Delaware Tax-Free USA Intermediate Fund | |||||||
Class B ($1,590,992 / 144,762 Shares) | $10.99 | ||||||
Net Asset Value – Delaware Tax-Free USA Intermediate Fund | |||||||
Class C ($25,329,222 / 2,304,125 Shares) | $10.99 | ||||||
Components of Net Assets at February 29, 2008: | |||||||
Shares of beneficial interest (unlimited authorization - no par) | $ | 392,345,338 | |||||
Accumulated net realized loss on investments | (3,349,838 | ) | |||||
Net unrealized depreciation of investments | (8,574,617 | ) | |||||
Total net assets | $ | 380,420,883 |
§ | 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 29, 2008. |
Ω | 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. |
39
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Summary of abbreviations: |
Net Asset Value and Offering Price Per Share – | ||
Delaware Tax-Free USA Intermediate Fund | ||
Net asset value Class A (A) | $ | 11.00 |
Sales charge (2.75% of offering price) (B) | 0.31 | |
Offering price | $ | 11.31 |
(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
40
Delaware National High-Yield Municipal Bond Fund | February 29, 2008 (Unaudited) |
Principal amount | Value | ||||
Municipal Bonds – 95.59% | |||||
Corporate Revenue Bonds – 17.09% | |||||
·Brazos, Texas River Authority Pollution Control Revenue | |||||
(TXU Energy Co. Project) Series B 6.30% 7/1/32 (AMT) | $ | 1,000,000 | $ | 851,690 | |
Buckeye, Ohio Tobacco Settlement Financing Authority | |||||
Asset-Backed Senior Turbo Series A-2 6.50% 6/1/47 | 1,000,000 | 988,670 | |||
Cloquet, Minnesota Pollution Control Revenue | |||||
(Potlatch Corp. Project) 5.90% 10/1/26 | 750,000 | 715,080 | |||
De Soto Parish, Louisiana Environmental Improvement | |||||
Revenue (International Paper Co. Project) | |||||
Series A 6.35% 2/1/25 (AMT) | 1,650,000 | 1,648,367 | |||
Golden State, California Tobacco Securitization Corporation | |||||
Settlement Revenue Refunding Asset-Backed Senior | |||||
Series A-1 5.00% 6/1/33 | 1,000,000 | 827,880 | |||
Gulf Coast, Texas Waste Disposal Authority Revenue | |||||
(Valero Energy Corp. Project) 6.65% 4/1/32 (AMT) | 1,000,000 | 1,004,700 | |||
Mississippi Business Finance Corporation Pollution | |||||
Control Revenue (System Energy Resource, Inc. Project) | |||||
5.90% 5/1/22 | 900,000 | 902,565 | |||
New York City, New York Industrial Development Agency | |||||
Special Facilities Revenue (JetBlue Airways Corp. Project) | |||||
5.125% 5/15/30 (AMT) | 1,000,000 | 744,500 | |||
Petersburg, Indiana Pollution Control Revenue (Indianapolis | |||||
Power & Light Co. Project) 6.375% 11/1/29 (AMT) | 1,000,000 | 1,007,270 | |||
Phenix City, Alabama Industrial Development Board | |||||
Environmental Improvement Revenue (Mead Westvaco | |||||
Corp. Project) Series A 6.35% 5/15/35 (AMT) | 500,000 | 493,880 | |||
Sugar Creek, Missouri Industrial Development | |||||
Revenue (Lafarge North America Project) | |||||
Series A 5.65% 6/1/37 (AMT) | 500,000 | 436,020 | |||
Sweetwater County, Wyoming Solid Waste Disposal | |||||
Revenue (FMC Corp. Project) 5.60% 12/1/35 (AMT) | 1,000,000 | 876,450 | |||
Tobacco Settlement Financing Corporation, New Jersey | |||||
Refunding Senior Series 1A 5.00% 6/1/41 | 1,000,000 | 800,040 | |||
Toledo, Lucas County, Ohio Port Authority Development | |||||
Revenue (Toledo Express Airport Project) | |||||
Series C 6.375% 11/15/32 (AMT) | 1,000,000 | 973,820 | |||
12,270,932 |
41
Statements of net assets
Delaware National High-Yield Municipal Bond Fund
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Education Revenue Bonds – 15.44% | |||||
California Statewide Communities Development Authority | |||||
Revenue (California Baptist University Project) | |||||
Series A 5.50% 11/1/38 | $ | 1,000,000 | $ | 853,090 | |
California Statewide Communities Development | |||||
Authority Student Housing Revenue | |||||
(East Campus Apartments, LLC) | |||||
Series A 5.625% 8/1/34 (ACA) | 1,000,000 | 841,700 | |||
Chattanooga, Tennessee Health Educational & Housing | |||||
Facilities Board Revenue (CDFI Phase I, LLC Project) | |||||
Subordinate Series B 6.00% 10/1/35 | 1,000,000 | 861,710 | |||
Maine Finance Authority Education Revenue | |||||
(Waynflete School Project) 6.40% 8/1/19 | 1,000,000 | 1,021,970 | |||
Maryland State Health & Higher Educational Facilities | |||||
Authority Revenue (Washington Christian Academy | |||||
Project) 5.50% 7/1/38 | 1,170,000 | 922,966 | |||
Massachusetts State Health & Educational Facilities | |||||
Authority Revenue (Nichols College Project) | |||||
Series C 6.125% 10/1/29 | 1,000,000 | 988,140 | |||
New Jersey State Educational Facilities Authority Revenue | |||||
(Fairleigh Dickinson Project) Series C 5.50% 7/1/23 | 750,000 | 705,870 | |||
New Mexico Educational Assistance Foundation | |||||
Student Loan Revenue 1st Subordinate | |||||
Series A-2 6.65% 11/1/25 (AMT) | 985,000 | 1,009,527 | |||
Pennsylvania State Higher Educational Facilities | |||||
Authority Revenue (Edinboro University | |||||
Foundation Student Housing) 6.00% 7/1/42 | 1,000,000 | 908,140 | |||
Philadelphia, Pennsylvania Authority for Industrial | |||||
Development Revenue (First Philadelphia | |||||
Charter Project) Series A 5.75% 8/15/32 | 745,000 | 660,003 | |||
Provo, Utah Charter School Revenue (Freedom Academy | |||||
Foundation Project) 5.50% 6/15/37 | 1,000,000 | 807,350 | |||
Scranton-Lackawanna, Pennsylvania Health & | |||||
Welfare Authority First Mortgage Revenue | |||||
(Lackawanna Junior College Project) 5.75% 11/1/20 | 1,510,000 | 1,506,496 | |||
11,086,962 | |||||
Health Care Revenue Bonds – 23.96% | |||||
Apple Valley, Minnesota Economic Development Authority | |||||
Health Care Revenue (Augustana Home St. Paul Project) | |||||
Series A 6.00% 1/1/40 | 1,000,000 | 916,170 |
42
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 | $ | 916,080 | |
Colorado Health Facilities Authority Revenue | |||||
(Christian Living Community Project) | |||||
Series A 5.75% 1/1/37 | 500,000 | 429,775 | |||
East Rochester, New York Housing Authority Revenue | |||||
Refunding (Senior Living - Woodland Village Project) | |||||
5.50% 8/1/33 | 500,000 | 425,305 | |||
Gainesville & Hall County, Georgia Development | |||||
Authority Revenue Senior Living Facilities | |||||
(Lanier Village Estates Project) Series C 7.25% 11/15/29 | 1,000,000 | 1,057,960 | |||
Illinois Health Facilities Authority Revenue | |||||
(Elmhurst Memorial Healthcare Project) 5.625% 1/1/28 | 1,000,000 | 987,560 | |||
(Midwest Physician Group Limited Project) 5.50% 11/15/19 | 35,000 | 31,428 | |||
Knox County, Tennessee Health Educational | |||||
& Housing Facilities Board Hospital Revenue | |||||
(East Tennessee Hospital Project) Series B 5.75% 7/1/33 | 1,300,000 | 1,256,176 | |||
Lancaster County, Pennsylvania Hospital Authority Revenue | |||||
(Brethren Village Project) Series A 6.375% 7/1/30 | 725,000 | 679,920 | |||
Lebanon County, Pennsylvania Health Facilities Authority | |||||
Center Revenue (Pleasant View Retirement) | |||||
Series A 5.30% 12/15/26 | 1,000,000 | 873,020 | |||
Maryland State Health & Higher Educational Facilities | |||||
Authority Revenue (Washington County Hospital Project) | |||||
5.75% 7/1/38 | 1,000,000 | 900,420 | |||
Massachusetts State Health & Educational Facilities | |||||
Authority Revenue (Jordan Hospital Project) Series E | |||||
6.75% 10/1/33 | 1,000,000 | 1,014,980 | |||
North Carolina Medical Care Commission Health | |||||
Care Facilities Revenue | |||||
(First Mortgage - Presbyterian Homes) 5.60% 10/1/36 | 1,000,000 | 910,760 | |||
(Pennybryn at Mayfield Project) Series A 6.125% 10/1/35 | 730,000 | 654,810 | |||
North Oaks, Minnesota Senior Housing Revenue | |||||
(Presbyterian Homes) 6.25% 10/1/47 | 1,000,000 | 947,610 | |||
Philadelphia, Pennsylvania Hospitals & Higher Education | |||||
Facilities Authority Revenue (The Philadelphia Protestant | |||||
Home Project) Series A 6.50% 7/1/27 | 1,100,000 | 1,069,838 |
43
Statements of net assets
Delaware National High-Yield Municipal Bond Fund
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Health Care Revenue Bonds (continued) | |||||
Richland County, Ohio Hospital Facilities Revenue | |||||
(Medcentral Health System Project) | |||||
Series B 6.375% 11/15/30 | $ | 500,000 | $ | 510,620 | |
Shelby County, Tennessee Health Educational | |||||
& Housing Facilities Board Revenue | |||||
(Trezevant Manor Project) Series A 5.75% 9/1/37 | 700,000 | 636,552 | |||
St. Joseph County, Indiana Industrial Economic Development | |||||
Revenue (Madison Center Project) 5.50% 2/15/21 | 1,150,000 | 1,134,268 | |||
Winchester, Virginia Industrial Development | |||||
Authority Residential Care Facility Revenue | |||||
(Westminster - Canterbury Project) | |||||
Series A 5.30% 1/1/35 | 1,000,000 | 849,910 | |||
Yavapai County, Arizona Industrial Development Authority | |||||
Hospital Revenue (Yavapai Medical Center Project) | |||||
Series A 6.00% 8/1/33 | 1,000,000 | 996,070 | |||
17,199,232 | |||||
Lease Revenue Bonds – 3.51% | |||||
Dauphin County, Pennsylvania General Authority Revenue | |||||
(Riverfront Office & Parking Project) 5.75% 1/1/10 | 1,875,000 | 1,837,519 | |||
Missouri State Development Finance Board Infrastructure | |||||
Facilities Revenue (Branson Landing Project) | |||||
Series A 5.50% 12/1/24 | 720,000 | 682,574 | |||
2,520,093 | |||||
Local General Obligation Bonds – 9.02% | |||||
Chicago, Illinois Tax Increment Allocation | |||||
(Chatham Ridge Redevelopment Project) 5.95% 12/15/12 | 750,000 | 748,223 | |||
Chicago, Illinois Tax Increment Subordinate (Central Loop | |||||
Redevelopment Project) Series A 6.50% 12/1/08 | 1,000,000 | 1,023,200 | |||
Farms New Kent, Virginia Community Development | |||||
Authority Special Assessment Series C 5.80% 3/1/36 | 1,000,000 | 792,960 | |||
Henderson, Nevada Local Improvement | |||||
Districts #T-18 5.30% 9/1/35 | 1,000,000 | 725,110 | |||
Richmond Heights, Missouri Tax Increment & Transaction | |||||
Sales Tax Revenue Refunding & Improvement | |||||
(Francis Place Redevelopment Project) 5.625% 11/1/25 | 1,200,000 | 1,047,768 |
44
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Local General Obligation Bonds (continued) | |||||
St. Joseph, Missouri Industrial Development | |||||
Authority Tax Increment Revenue | |||||
(Shoppes at North Village Project) Series A | |||||
5.375% 11/1/24 | $ | 1,000,000 | $ | 873,050 | |
5.50% 11/1/27 | 500,000 | 433,660 | |||
Winter Garden Village at Fowler Groves Community | |||||
Development District, Florida Special Assessment | |||||
Revenue 5.65% 5/1/37 | 1,000,000 | 829,210 | |||
6,473,181 | |||||
§Pre-Refunded Bonds – 17.57% | |||||
Bexar County, Texas Health Facilities Development | |||||
Corporation Revenue (Army Retirement Residence | |||||
Project) 6.30% 7/1/32-12 | 1,000,000 | 1,124,870 | |||
Illinois Educational Facilities Authority Student Housing | |||||
Revenue (Educational Advancement Fund - University | |||||
Center Project) 6.25% 5/1/30-12 | 1,000,000 | 1,120,360 | |||
Louisiana Public Facilities Authority Revenue | |||||
(Ochsner Clinic Foundation Project) | |||||
Series B 5.50% 5/15/32-26 | 1,000,000 | 1,063,560 | |||
Massachusetts State Development Finance Agency Revenue | |||||
(Massachusetts College of Pharmacy Project) | |||||
Series C 5.75% 7/1/33-13 | 1,000,000 | 1,120,330 | |||
Milledgeville-Baldwin County, Georgia Development | |||||
Authority Revenue (Georgia College & State University | |||||
Foundation Student Housing Project) 6.00% 9/1/33-14 | 1,000,000 | 1,143,210 | |||
Minnesota State Higher Education Facilities | |||||
Authority Revenue (College of Art & Design Project) | |||||
Series 5-D 6.75% 5/1/26-10 | 500,000 | 539,065 | |||
Mississippi Development Bank Special Obligation | |||||
(Madison County Hospital Project) 6.40% 7/1/29-09 | 1,585,000 | 1,689,182 | |||
Montgomery County, Pennsylvania Higher Education | |||||
& Health Authority Revenue (Foulkeways at | |||||
Gwynedd Project) 6.75% 11/15/30-09 | 1,000,000 | 1,074,850 | |||
Puerto Rico Commonwealth Series B 5.00% 7/1/35-16 | 1,500,000 | 1,618,080 | |||
Rochester, Minnesota Multifamily Housing Revenue | |||||
(Wedum Shorewood Campus Project) 6.60% 6/1/36-09 | 985,000 | 1,047,508 | |||
Savannah, Georgia Economic Development Authority | |||||
Revenue (College of Art & Design Project) | |||||
6.50% 10/1/13-09 | 1,000,000 | 1,074,010 | |||
12,615,025 |
45
Statements of net assets
Delaware National High-Yield Municipal Bond Fund
Principal amount | Value | ||||
Municipal Bonds (continued) | |||||
Special Tax Bonds – 5.01% | |||||
Baltimore, Maryland Convention Center Hotel Revenue | |||||
Subordinated Series B 5.875% 9/1/39 | $ | 1,000,000 | $ | 895,290 | |
Middlesex County, New Jersey Improvement | |||||
Authority Senior Revenue (Heldrich Center | |||||
Hotel/Conference Project) Series A | 500,000 | 408,075 | |||
5.00% 1/1/32 | |||||
5.125% 1/1/37 | 870,000 | 706,805 | |||
New Jersey Economic Development Authority | |||||
(Cigarette Tax) 5.75% 6/15/34 | 1,000,000 | 921,270 | |||
Prescott Valley, Arizona Improvement District Special | |||||
Assessment (Sewer Collection System Roadway Repair | |||||
Project) 7.90% 1/1/12 | 216,000 | 223,338 | |||
Southwestern Illinois Development Authority Revenue | |||||
(Local Government Program - Collinsville Limited Project) | |||||
5.35% 3/1/31 | 500,000 | 438,035 | |||
3,592,813 | |||||
Transportation Revenue Bonds – 3.99% | |||||
Branson, Missouri Regional Airport Transportation | |||||
Development District (Airport Project) | |||||
Series A 6.00% 7/1/37 | 500,000 | 431,120 | |||
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 | 791,604 | |||
Oklahoma City, Oklahoma Industrial & Cultural Facilities | |||||
Subordinated (Air Cargo Obligated Group Project) | |||||
6.75% 1/1/23 (AMT) | 1,160,000 | 1,137,008 | |||
Onondaga County, New York Industrial Development | |||||
Authority Revenue Subordinated (Air Cargo Project) | |||||
7.25% 1/1/32 (AMT) | 500,000 | 506,010 | |||
2,865,742 | |||||
Total Municipal Bonds (cost $71,943,887) | 68,623,980 | ||||
·Variable Rate Demand Notes – 2.86% | |||||
Lucas County, Ohio Hospital Revenue | |||||
(Promedia Healthcare) | |||||
Series A-1 8.00% 11/15/40 (AMBAC) | 225,000 | 225,000 | |||
Series A-2 8.00% 11/15/34 (AMBAC) | 525,000 | 525,000 |
46
Principal amount | Value | ||||||
•Variable Rate Demand Notes (continued) | |||||||
New Jersey Health Care Facilities Financing | |||||||
Authority Revenue Compensation Program | |||||||
Series A-1 3.01% 7/1/31 (AMBAC) | $ | 1,300,000 | $ | 1,300,000 | |||
Total Variable Rate Demand Notes (cost $2,050,000) | 2,050,000 | ||||||
Total Value of Securities – 98.45% (cost $73,993,887) | 70,673,980 | ||||||
Receivables and Other Assets | |||||||
Net of Liabilities – 1.55% | 1,112,496 | ||||||
Net Assets Applicable to 7,596,056 | |||||||
Shares Outstanding – 100.00% | $ | 71,786,476 | |||||
Net Asset Value – Delaware National High-Yield Municipal Bond Fund | |||||||
Class A ($62,303,201 / 6,595,514 Shares) | $9.45 | ||||||
Net Asset Value – Delaware National High-Yield Municipal Bond Fund | |||||||
Class B ($3,981,749 / 420,596 Shares) | $9.47 | ||||||
Net Asset Value – Delaware National High-Yield Municipal Bond Fund | |||||||
Class C ($5,501,526 / 579,946 Shares) | $9.49 | ||||||
Components of Net Assets at February 29, 2008: | |||||||
Shares of beneficial interest (unlimited authorization – no par) | $ | 80,800,170 | |||||
Distributions in excess of net investment income | (4,104 | ) | |||||
Accumulated net realized loss on investments | (5,689,683 | ) | |||||
Net unrealized depreciation of investments | (3,319,907 | ) | |||||
Total net assets | $ | 71,786,476 |
§ | 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 29, 2008. |
Summary of abbreviations:
ACA — Insured by American Capital Access
AMBAC — Insured by the AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
CDFI — Community Development Financial Institutions
47
Statements of net assets
Delaware National High-Yield Municipal Bond Fund
Net Asset Value and Offering Price Per Share – | ||
Delaware National High-Yield Municipal Bond Fund | ||
Net asset value Class A (A) | $ | 9.45 |
Sales charge (4.50% of offering price) (B) | 0.45 | |
Offering price | $ | 9.90 |
(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
48
Statements of operations
Six Months Ended February 29, 2008 (Unaudited)
Delaware | Delaware | Delaware | |||||||||
Tax-Free | Tax-Free USA | National High-Yield | |||||||||
USA Fund | Intermediate Fund | Municipal Bond Fund | |||||||||
Investment Income: | |||||||||||
Interest | $ | 18,139,763 | $ | 7,773,685 | $ | 2,146,578 | |||||
Expenses: | |||||||||||
Management fees | 1,967,983 | 918,683 | 204,694 | ||||||||
Distribution expenses – Class A | 847,692 | 507,711 | 80,296 | ||||||||
Distribution expenses – Class B | 76,719 | 8,343 | 24,922 | ||||||||
Distribution expenses – Class C | 83,662 | 132,843 | 26,383 | ||||||||
Dividend disbursing and transfer | |||||||||||
agent fees and expenses | 221,450 | 186,372 | 26,513 | ||||||||
Accounting and administration | |||||||||||
expenses | 147,439 | 73,478 | 14,883 | ||||||||
Legal fees | 52,841 | 27,519 | 10,685 | ||||||||
Registration fees | 50,148 | 27,026 | 16,553 | ||||||||
Reports and statements to | |||||||||||
shareholders | 45,021 | 15,688 | 5,324 | ||||||||
Audit and tax | 26,248 | 12,179 | 6,283 | ||||||||
Trustees’ fees | 17,863 | 8,956 | 1,804 | ||||||||
Insurance fees | 8,301 | 5,342 | 945 | ||||||||
Consulting fees | 7,828 | 3,508 | 731 | ||||||||
Pricing fees | 7,672 | 5,007 | 2,256 | ||||||||
Custodian fees | 5,895 | 1,998 | 362 | ||||||||
Trustees’ expenses | 3,289 | 1,544 | 329 | ||||||||
Due and services | 1,570 | 528 | 153 | ||||||||
Taxes (other than taxes on income) | 526 | — | 62 | ||||||||
3,572,147 | 1,936,725 | 423,178 | |||||||||
Less expenses absorbed or waived | (315,318 | ) | (181,473 | ) | (48,491 | ) | |||||
Less waived distribution expenses – | |||||||||||
Class A | — | (253,856 | ) | — | |||||||
Less expense paid indirectly | (654 | ) | (309 | ) | (70 | ) | |||||
Total operating expenses | 3,256,175 | 1,501,087 | 374,617 | ||||||||
Net Investment Income | 14,883,588 | 6,272,598 | 1,771,961 |
49
Statements of operations
Six Months Ended February 29, 2008 (Unaudited)
Delaware | Delaware | Delaware | |||||||||
Tax-Free | Tax-Free USA | National High-Yield | |||||||||
USA Fund | Intermediate Fund | Municipal Bond Fund | |||||||||
Net Realized and Unrealized Gain | |||||||||||
(Loss) on Investments: | |||||||||||
Net realized gain (loss) | |||||||||||
on investments | $ | (2,300,915 | ) | $ | (893,086 | ) | $ | 489,448 | |||
Net change in unrealized | |||||||||||
appreciation/depreciation | |||||||||||
of investments | (24,222,782 | ) | (7,038,845 | ) | (4,887,685 | ) | |||||
Net Realized and Unrealized Loss | |||||||||||
on Investments | (26,523,697 | ) | (7,931,931 | ) | (4,398,237 | ) | |||||
Net Decrease in Net Assets | |||||||||||
Resulting from Operations | $ | (11,640,109 | ) | $ | (1,659,333 | ) | $ | (2,626,276 | ) |
See accompanying notes
50
Statements of changes in net assets
Delaware Tax-Free USA Fund
Six Months | Year | ||||||
Ended | Ended | ||||||
2/29/08 | 8/31/07 | ||||||
(Unaudited) | |||||||
Increase (Decrease) in Net Assets from Operations: | |||||||
Net investment income | $ | 14,883,588 | $ | 27,505,738 | |||
Net realized loss on investments | (2,300,915 | ) | (39,979 | ) | |||
Net change in unrealized | |||||||
appreciation/depreciation of investments | (24,222,782 | ) | (21,159,119 | ) | |||
Net increase (decrease) in net assets resulting | |||||||
from operations | (11,640,109 | ) | 6,306,640 | ||||
Dividends and Distributions to Shareholders from: | |||||||
Net investment income: | |||||||
Class A | (14,353,650 | ) | (26,524,390 | ) | |||
Class B | (253,665 | ) | (619,939 | ) | |||
Class C | (276,273 | ) | (488,756 | ) | |||
(14,883,588 | ) | (27,633,085 | ) | ||||
Capital Share Transactions: | |||||||
Proceeds from shares sold: | |||||||
Class A | 14,362,344 | 129,162,376 | |||||
Class B | 123,143 | 308,131 | |||||
Class C | 3,103,502 | 2,181,275 | |||||
Net asset value of shares issued upon reinvestment | |||||||
of dividends and distributions: | |||||||
Class A | 6,753,170 | 12,569,102 | |||||
Class B | 135,715 | 365,941 | |||||
Class C | 206,657 | 349,774 | |||||
Net assets from fund merger1: | |||||||
Class A | — | 81,923,316 | |||||
Class B | — | 2,926,236 | |||||
Class C | — | 3,460,376 | |||||
24,684,531 | 233,246,527 |
52
Six Months | Year | ||||||
Ended | Ended | ||||||
2/29/08 | 8/31/07 | ||||||
(Unaudited) | |||||||
Capital Share Transactions (continued): | |||||||
Cost of shares repurchased: | |||||||
Class A | $ | (91,565,653 | ) | $ | (124,502,775 | ) | |
Class B | (3,661,676 | ) | (8,015,676 | ) | |||
Class C | (3,103,764 | ) | (3,772,191 | ) | |||
(98,331,093 | ) | (136,290,642 | ) | ||||
Increase (decrease) in net assets derived | |||||||
from capital share transactions | (73,646,562 | ) | 96,955,885 | ||||
Net Increase (Decrease) in Net Assets | (100,170,259 | ) | 75,629,440 | ||||
Net Assets: | |||||||
Beginning of period | 769,741,304 | 694,111,864 | |||||
End of period | $ | 669,571,045 | $ | 769,741,304 | |||
Undistributed (distribution in excess of) | |||||||
net investment income | $ | 1,790 | $ | 1,790 |
1See Note 7 in "Notes to financial statements."
See accompanying notes
53
Statements of changes in net assets
Delaware Tax-Free USA Intermediate Fund
Six Months | Year | ||||||
Ended | Ended | ||||||
2/29/08 | 8/31/07 | ||||||
(Unaudited) | |||||||
Increase (Decrease) in Net Assets from Operations: | |||||||
Net investment income | $ | 6,272,598 | $ | 10,100,454 | |||
Net realized loss on investments | (893,086 | ) | (1,830,442 | ) | |||
Net change in unrealized | |||||||
appreciation/depreciation of investments | (7,038,845 | ) | (6,265,949 | ) | |||
Net increase (decrease) in net assets resulting | |||||||
from operations | (1,659,333 | ) | 2,004,063 | ||||
Dividends and Distributions to Shareholders from: | |||||||
Net investment income: | |||||||
Class A | (5,899,750 | ) | (9,238,273 | ) | |||
Class B | (22,038 | ) | (63,002 | ) | |||
Class C | (350,810 | ) | (799,179 | ) | |||
(6,272,598 | ) | (10,100,454 | ) | ||||
Capital Share Transactions: | |||||||
Proceeds from shares sold: | |||||||
Class A | 108,508,016 | 178,321,801 | |||||
Class B | 93,327 | 281,065 | |||||
Class C | 3,010,498 | 7,249,731 | |||||
Net asset value of shares issued upon reinvestment | |||||||
of dividends and distributions: | |||||||
Class A | 4,446,158 | 6,634,413 | |||||
Class B | 17,212 | 48,873 | |||||
Class C | 217,185 | 478,816 | |||||
116,292,396 | 193,014,699 |
54
Six Months | Year | ||||||
Ended | Ended | ||||||
2/29/08 | 8/31/07 | ||||||
(Unaudited) | |||||||
Capital Share Transactions (continued): | |||||||
Cost of shares repurchased: | |||||||
Class A | $ | (58,231,151 | ) | $ | (75,895,816 | ) | |
Class B | (276,230 | ) | (910,041 | ) | |||
Class C | (5,670,115 | ) | (6,816,607 | ) | |||
(64,177,496 | ) | (83,622,464 | ) | ||||
Increase in net assets derived | |||||||
from capital share transactions | 52,114,900 | 109,392,235 | |||||
Net Increase in Net Assets | 44,182,969 | 101,295,844 | |||||
Net Assets: | |||||||
Beginning of period | 336,237,914 | 234,942,070 | |||||
End of period (there was no undistributed | |||||||
net investment income at either period end) | $ | 380,420,883 | $ | 336,237,914 |
See accompanying notes
55
Statements of changes in net assets
Delaware National High-Yield Municipal Bond Fund
Six Months | Year | |||||||
Ended | Ended | |||||||
2/29/08 | 8/31/07 | |||||||
(Unaudited) | ||||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||
Net investment income | $ | 1,771,961 | $ | 3,672,422 | ||||
Net realized gain on investments | 489,448 | 558,847 | ||||||
Net change in unrealized | ||||||||
appreciation/depreciation of investments | (4,887,685 | ) | (2,772,801 | ) | ||||
Net increase (decrease) in net assets resulting | ||||||||
from operations | (2,626,276 | ) | 1,458,468 | |||||
Dividends and Distributions to Shareholders from: | ||||||||
Net investment income: | ||||||||
Class A | (1,561,863 | ) | (3,179,975 | ) | ||||
Class B | (102,036 | ) | (297,700 | ) | ||||
Class C | (108,064 | ) | (194,745 | ) | ||||
(1,771,963 | ) | (3,672,420 | ) | |||||
Capital Share Transactions: | ||||||||
Proceeds from shares sold: | ||||||||
Class A | 9,232,644 | 11,615,685 | ||||||
Class B | 33,696 | 543,649 | ||||||
Class C | 1,322,206 | 527,708 | ||||||
Net asset value of shares issued upon reinvestment | ||||||||
of dividends and distributions: | ||||||||
Class A | 910,525 | 1,884,760 | ||||||
Class B | 35,032 | 117,105 | ||||||
Class C | 77,307 | 139,342 | ||||||
11,611,410 | 14,828,249 |
56
Six Months | Year | |||||||
Ended | Ended | |||||||
2/29/08 | 8/31/07 | |||||||
(Unaudited) | ||||||||
Capital Share Transactions (continued): | ||||||||
Cost of shares repurchased: | ||||||||
Class A | $ | (9,174,474 | ) | $ | (15,104,909 | ) | ||
Class B | (1,806,091 | ) | (4,046,166 | ) | ||||
Class C | (409,201 | ) | (1,014,423 | ) | ||||
(11,389,766 | ) | (20,165,498 | ) | |||||
Increase (decrease) in net assets derived | ||||||||
from capital share transactions | 221,644 | (5,337,249 | ) | |||||
Net Decrease in Net Assets | (4,176,595 | ) | (7,551,201 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 75,963,071 | 83,514,272 | ||||||
End of period | $ | 71,786,476 | $ | 75,963,071 | ||||
Distribution in excess of | ||||||||
net investment income | $ | (4,104 | ) | $ | (4,102 | ) |
See accompanying notes
57
Financial highlights
Delaware Tax-Free USA Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income |
Net realized and unrealized gain (loss) on investments |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return2 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets |
prior to expense limitation and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to expense limitation and expense paid indirectly |
Portfolio turnover |
See accompanying notes
58
Six Months Ended | Year Ended | ||||||||||||||||
2/29/081 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | ||||||||||||
(Unaudited) | |||||||||||||||||
$11.230 | $11.570 | $11.760 | $11.460 | $11.170 | $11.280 | ||||||||||||
0.229 | 0.466 | 0.458 | 0.512 | 0.538 | 0.537 | ||||||||||||
(0.430 | ) | (0.337 | ) | (0.186 | ) | 0.300 | 0.290 | (0.110 | ) | ||||||||
(0.201 | ) | 0.129 | 0.272 | 0.812 | 0.828 | 0.427 | |||||||||||
(0.229 | ) | (0.469 | ) | (0.462 | ) | (0.512 | ) | (0.538 | ) | (0.537 | ) | ||||||
(0.229 | ) | (0.469 | ) | (0.462 | ) | (0.512 | ) | (0.538 | ) | (0.537 | ) | ||||||
$10.800 | $11.230 | $11.570 | $11.760 | $11.460 | $11.170 | ||||||||||||
(1.86% | ) | 1.08% | 2.42% | 7.23% | 7.54% | 3.84% | |||||||||||
$639,780 | $735,584 | $656,813 | $453,982 | $456,192 | $460,917 | ||||||||||||
0.85% | 0.87% | 0.86% | 0.86% | 0.87% | 0.87% | ||||||||||||
0.94% | 0.95% | 1.00% | 0.98% | 0.93% | 0.97% | ||||||||||||
4.08% | 4.03% | 3.97% | 4.43% | 4.72% | 4.74% | ||||||||||||
| |||||||||||||||||
3.99% | 3.95% | 3.83% | 4.31% | 4.66% | 4.64% | ||||||||||||
25% | 36% | 41% | 47% | 32% | 96% |
59
Financial highlights
Delaware Tax-Free USA Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income |
Net realized and unrealized gain (loss) on investments |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return2 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets |
prior to expense limitation and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to expense limitation and expense paid indirectly |
Portfolio turnover |
See accompanying notes
60
Six Months Ended | Year Ended | ||||||||||||||||
2/29/081 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | ||||||||||||
(Unaudited) | |||||||||||||||||
$11.230 | $11.570 | $11.760 | $11.460 | $11.170 | $11.280 | ||||||||||||
0.186 | 0.378 | 0.370 | 0.423 | 0.449 | 0.449 | ||||||||||||
(0.440 | ) | (0.337 | ) | (0.186 | ) | 0.300 | 0.290 | (0.110 | ) | ||||||||
(0.254 | ) | 0.041 | 0.184 | 0.723 | 0.739 | 0.339 | |||||||||||
(0.186 | ) | (0.381 | ) | (0.374 | ) | (0.423 | ) | (0.449 | ) | (0.449 | ) | ||||||
(0.186 | ) | (0.381 | ) | (0.374 | ) | (0.423 | ) | (0.449 | ) | (0.449 | ) | ||||||
$10.790 | $11.230 | $11.570 | $11.760 | $11.460 | $11.170 | ||||||||||||
(2.32% | ) | 0.32% | 1.63% | 6.42% | 6.71% | 3.03% | |||||||||||
$13,375 | $17,286 | $22,189 | $16,507 | $22,396 | $31,052 | ||||||||||||
1.61% | 1.63% | 1.63% | 1.63% | 1.65% | 1.65% | ||||||||||||
1.70% | 1.71% | 1.73% | 1.71% | 1.71% | 1.75% | ||||||||||||
3.32% | 3.27% | 3.20% | 3.66% | 3.94% | 3.96% | ||||||||||||
3.23% | 3.19% | 3.10% | 3.58% | 3.88% | 3.86% | ||||||||||||
25% | 36% | 41% | 47% | 32% | 96% |
61
Financial highlights
Delaware Tax-Free USA Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income |
Net realized and unrealized gain (loss) on investments |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return2 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets |
prior to expense limitation and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to expense limitation and expense paid indirectly |
Portfolio turnover |
See accompanying notes
62
Six Months Ended | Year Ended | ||||||||||||||||
2/29/081 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | ||||||||||||
(Unaudited) | |||||||||||||||||
$11.230 | $11.570 | $11.760 | $11.460 | $11.170 | $11.280 | ||||||||||||
0.186 | 0.378 | 0.370 | 0.423 | 0.449 | 0.449 | ||||||||||||
(0.430 | ) | (0.337 | ) | (0.186 | ) | 0.300 | 0.290 | (0.110 | ) | ||||||||
(0.244 | ) | 0.041 | 0.184 | 0.723 | 0.739 | 0.339 | |||||||||||
(0.186 | ) | (0.381 | ) | (0.374 | ) | (0.423 | ) | (0.449 | ) | (0.449 | ) | ||||||
(0.186 | ) | (0.381 | ) | (0.374 | ) | (0.423 | ) | (0.449 | ) | (0.449 | ) | ||||||
$10.800 | $11.230 | $11.570 | $11.760 | $11.460 | $11.170 | ||||||||||||
(2.32% | ) | 0.41% | 1.63% | 6.42% | 6.71% | 3.03% | |||||||||||
$16,416 | $16,871 | $15,110 | $5,963 | $5,784 | $5,508 | ||||||||||||
1.61% | 1.63% | 1.63% | 1.63% | 1.65% | 1.65% | ||||||||||||
1.70% | 1.71% | 1.73% | 1.71% | 1.71% | 1.75% | ||||||||||||
3.32% | 3.27% | 3.20% | 3.66% | 3.94% | 3.96% | ||||||||||||
3.23% | 3.19% | 3.10% | 3.58% | 3.88% | 3.86% | ||||||||||||
25% | 36% | 41% | 47% | 32% | 96% |
63
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:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income |
Net realized and unrealized gain (loss) on investments |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return2 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets |
prior to expense limitation and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to expense limitation and expense paid indirectly |
Portfolio turnover |
See accompanying notes
64
Six Months Ended | Year Ended | ||||||||||||||||
2/29/081 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | ||||||||||||
(Unaudited) | |||||||||||||||||
$11.210 | $11.470 | $11.610 | $11.390 | $11.010 | $11.020 | ||||||||||||
0.197 | 0.414 | 0.408 | 0.410 | 0.419 | 0.435 | ||||||||||||
(0.210 | ) | (0.260 | ) | (0.140 | ) | 0.220 | 0.380 | (0.010 | ) | ||||||||
(0.013 | ) | 0.154 | 0.268 | 0.630 | 0.799 | 0.425 | |||||||||||
(0.197 | ) | (0.414 | ) | (0.408 | ) | (0.410 | ) | (0.419 | ) | (0.435 | ) | ||||||
(0.197 | ) | (0.414 | ) | (0.408 | ) | (0.410 | ) | (0.419 | ) | (0.435 | ) | ||||||
$11.000 | $11.210 | $11.470 | $11.610 | $11.390 | $11.010 | ||||||||||||
(0.16% | ) | 1.34% | 2.38% | 5.63% | 7.36% | 3.89% | |||||||||||
$353,501 | $306,215 | $204,525 | $120,273 | $77,448 | $51,479 | ||||||||||||
0.75% | 0.76% | 0.75% | 0.79% | 0.80% | 3 | 0.80% | |||||||||||
1.00% | 1.03% | 1.07% | 1.11% | 1.09% | 1.15% | ||||||||||||
3.49% | 3.60% | 3.56% | 3.55% | 3.70% | 3.85% | ||||||||||||
3.24% | 3.33% | 3.24% | 3.23% | 3.41% | 3.50% | ||||||||||||
23% | 40% | 37% | 18% | 27% | 130% |
65
Financial highlights
Delaware Tax-Free USA Intermediate Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income |
Net realized and unrealized gain (loss) on investments |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return2 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets |
prior to expense limitation and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to expense limitation and expense paid indirectly |
Portfolio turnover |
See accompanying notes
66
Six Months Ended | Year Ended | ||||||||||||||||
2/29/081 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | ||||||||||||
(Unaudited) | |||||||||||||||||
$11.200 | $11.460 | $11.610 | $11.380 | $11.010 | $11.020 | ||||||||||||
0.149 | 0.317 | 0.311 | 0.313 | 0.323 | 0.340 | ||||||||||||
(0.210 | ) | (0.260 | ) | (0.150 | ) | 0.230 | 0.370 | (0.010 | ) | ||||||||
(0.061 | ) | 0.057 | 0.161 | 0.543 | 0.693 | 0.330 | |||||||||||
(0.149 | ) | (0.317 | ) | (0.311 | ) | (0.313 | ) | (0.323 | ) | (0.340 | ) | ||||||
(0.149 | ) | (0.317 | ) | (0.311 | ) | (0.313 | ) | (0.323 | ) | (0.340 | ) | ||||||
$10.990 | $11.200 | $11.460 | $11.610 | $11.380 | $11.010 | ||||||||||||
(0.57% | ) | 0.48% | 1.43% | 4.83% | 6.36% | 3.02% | |||||||||||
$1,591 | $1,786 | $2,413 | $3,203 | $3,743 | $4,538 | ||||||||||||
1.60% | 1.61% | 1.60% | 1.64% | 1.65% | 3 | 1.65% | |||||||||||
1.70% | 1.73% | 1.77% | 1.81% | 1.79% | 1.87% | ||||||||||||
2.64% | 2.75% | 2.71% | 2.70% | 2.85% | 3.00% | ||||||||||||
2.54% | 2.63% | 2.54% | 2.53% | 2.71% | 2.78% | ||||||||||||
23% | 40% | 37% | 18% | 27% | 130% |
67
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:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income |
Net realized and unrealized gain (loss) on investments |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return2 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets |
prior to expense limitation and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to expense limitation and expense paid indirectly |
Portfolio turnover |
See accompanying notes
68
Six Months Ended | Year Ended | ||||||||||||||||
2/29/081 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | ||||||||||||
(Unaudited) | |||||||||||||||||
$11.200 | $11.470 | $11.610 | $11.390 | $11.010 | $11.020 | ||||||||||||
0.149 | 0.317 | 0.311 | 0.313 | 0.323 | 0.340 | ||||||||||||
(0.210 | ) | (0.270 | ) | (0.140 | ) | 0.220 | 0.380 | (0.010 | ) | ||||||||
(0.061 | ) | 0.047 | 0.171 | 0.533 | 0.703 | 0.330 | |||||||||||
(0.149 | ) | (0.317 | ) | (0.311 | ) | (0.313 | ) | (0.323 | ) | (0.340 | ) | ||||||
(0.149 | ) | (0.317 | ) | (0.311 | ) | (0.313 | ) | (0.323 | ) | (0.340 | ) | ||||||
$10.990 | $11.200 | $11.470 | $11.610 | $11.390 | $11.010 | ||||||||||||
(0.58% | ) | 0.39% | 1.52% | 4.74% | 6.45% | 3.02% | |||||||||||
$25,329 | $28,237 | $28,004 | $25,125 | $19,201 | $10,542 | ||||||||||||
1.60% | 1.61% | 1.60% | 1.64% | 1.65% | 3 | 1.65% | |||||||||||
1.70% | 1.73% | 1.77% | 1.81% | 1.79% | 1.87% | ||||||||||||
2.64% | 2.75% | 2.71% | 2.70% | 2.85% | 3.00% | ||||||||||||
2.54% | 2.63% | 2.54% | 2.53% | 2.71% | 2.78% | ||||||||||||
23% | 40% | 37% | 18% | 27% | 130% |
69
Financial highlights
Delaware National High-Yield Municipal Bond Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income |
Net realized and unrealized gain (loss) on investments |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return2 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets |
prior to expense limitation and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to expense limitation and expense paid indirectly |
Portfolio turnover |
See accompanying notes
70
Six Months Ended | Year Ended | ||||||||||||||||
2/29/081 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | ||||||||||||
(Unaudited) | |||||||||||||||||
$10.030 | $10.320 | $10.380 | $10.010 | $9.730 | $9.950 | ||||||||||||
0.242 | 0.482 | 0.477 | 0.503 | 0.496 | 0.522 | ||||||||||||
(0.580 | ) | (0.290 | ) | (0.060 | ) | 0.371 | 0.280 | (0.219 | ) | ||||||||
(0.338 | ) | 0.192 | 0.417 | 0.874 | 0.776 | 0.303 | |||||||||||
(0.242 | ) | (0.482 | ) | (0.477 | ) | (0.504 | ) | (0.496 | ) | (0.523 | ) | ||||||
(0.242 | ) | (0.482 | ) | (0.477 | ) | (0.504 | ) | (0.496 | ) | (0.523 | ) | ||||||
$9.450 | $10.030 | $10.320 | $10.380 | $10.010 | $9.730 | ||||||||||||
(3.46% | ) | 1.82% | 4.15% | 8.93% | 8.13% | 3.13% | |||||||||||
$62,303 | $65,143 | $68,663 | $66,451 | $56,698 | $59,829 | ||||||||||||
0.90% | 0.91% | 0.90% | 0.93% | 1.00% | 0.99% | ||||||||||||
1.03% | 1.03% | 1.02% | 1.01% | 1.02% | 1.05% | ||||||||||||
4.87% | 4.66% | 4.66% | 4.92% | 5.00% | 5.30% | ||||||||||||
4.74% | 4.54% | 4.54% | 4.84% | 4.98% | 5.24% | ||||||||||||
18% | 37% | 73% | 36% | 46% | 64% |
71
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:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income |
Net realized and unrealized gain (loss) on investments |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return2 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets |
prior to expense limitation and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to expense limitation and expense paid indirectly |
Portfolio turnover |
See accompanying notes
72
Six Months Ended | Year Ended | ||||||||||||||||
2/29/081 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | ||||||||||||
(Unaudited) | |||||||||||||||||
$10.050 | $10.350 | $10.400 | $10.030 | $9.760 | $9.980 | ||||||||||||
0.205 | 0.404 | 0.400 | 0.426 | 0.421 | 0.448 | ||||||||||||
(0.580 | ) | (0.300 | ) | (0.050 | ) | 0.371 | 0.270 | (0.219 | ) | ||||||||
(0.375 | ) | 0.104 | 0.350 | 0.797 | 0.691 | 0.229 | |||||||||||
(0.205 | ) | (0.404 | ) | (0.400 | ) | (0.427 | ) | (0.421 | ) | (0.449 | ) | ||||||
(0.205 | ) | (0.404 | ) | (0.400 | ) | (0.427 | ) | (0.421 | ) | (0.449 | ) | ||||||
$9.470 | $10.050 | $10.350 | $10.400 | $10.030 | $9.760 | ||||||||||||
(3.82% | ) | 0.96% | 3.47% | 8.10% | 7.20% | 2.36% | |||||||||||
$3,982 | $5,972 | $9,519 | $13,046 | $14,534 | $16,499 | ||||||||||||
1.65% | 1.66% | 1.65% | 1.68% | 1.75% | 1.74% | ||||||||||||
1.78% | 1.78% | 1.77% | 1.76% | 1.77% | 1.80% | ||||||||||||
4.12% | 3.91% | 3.91% | 4.17% | 4.25% | 4.55% | ||||||||||||
3.99% | 3.79% | 3.79% | 4.09% | 4.23% | 4.49% | ||||||||||||
18% | 37% | 73% | 36% | 46% | 64% |
73
Financial highlights
Delaware National High-Yield Municipal Bond Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment income |
Net realized and unrealized gain (loss) on investments |
Total from investment operations |
Less dividends and distributions from: |
Net investment income |
Total dividends and distributions |
Net asset value, end of period |
Total return2 |
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets |
prior to expense limitation and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to expense limitation and expense paid indirectly |
Portfolio turnover |
See accompanying notes
74
Six Months Ended | Year Ended | ||||||||||||||||
2/29/081 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | ||||||||||||
(Unaudited) | |||||||||||||||||
$10.070 | $10.360 | $10.420 | $10.040 | $ 9.770 | $ 9.990 | ||||||||||||
0.205 | 0.404 | 0.400 | 0.426 | 0.421 | 0.448 | ||||||||||||
(0.580 | ) | (0.290 | ) | (0.060 | ) | 0.381 | 0.270 | (0.219 | ) | ||||||||
(0.375 | ) | 0.114 | 0.340 | 0.807 | 0.691 | 0.229 | |||||||||||
(0.205 | ) | (0.404 | ) | (0.400 | ) | (0.427 | ) | (0.421 | ) | (0.449 | ) | ||||||
(0.205 | ) | (0.404 | ) | (0.400 | ) | (0.427 | ) | (0.421 | ) | (0.449 | ) | ||||||
$ 9.490 | $10.070 | $10.360 | $10.420 | $10.040 | $ 9.770 | ||||||||||||
(3.81% | ) | 1.06% | 3.36% | 8.19% | 7.19% | 2.35% | |||||||||||
$5,501 | $4,848 | $5,332 | $5,234 | $4,798 | $5,318 | ||||||||||||
1.65% | 1.66% | 1.65% | 1.68% | 1.75% | 1.74% | ||||||||||||
1.78% | 1.78% | 1.77% | 1.76% | 1.77% | 1.80% | ||||||||||||
4.12% | 3.91% | 3.91% | 4.17% | 4.25% | 4.55% | ||||||||||||
3.99% | 3.79% | 3.79% | 4.09% | 4.23% | 4.49% | ||||||||||||
18% | 37% | 73% | 36% | 46% | 64% |
75
Notes to financial statements | ||
Delaware National Tax-Free Funds | February 29, 2008 (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 “Trusts”. 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 (CDSC) of 1% if redeemed during the first year and 0.50% during the second year for Delaware Tax-Free USA Fund and Delaware National High-Yield Municipal Bond Fund; and of 0.75% for Delaware Tax-Free USA Intermediate Fund if redeemed within the first year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Effective June 1, 2007, Class B shares may only be purchased through dividend reinvestment and certain permitted exchanges. Prior to June 1, 2007, Class B shares of the Delaware Tax-Free USA Fund and Delaware National High-Yield Municipal Bond Fund were sold with a CDSC that declined from 4% to zero depending upon the period of time the shares were held. Class B shares of the Delaware Tax-Free USA Fund and Delaware National High-Yield Municipal Bond Fund 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 were sold with a CDSC that declines from 2% to zero depending upon the period of time the shares were held. Class B shares of the Tax-Free USA Intermediate Fund will automatically convert to Class A shares on a quarterly basis approximately five years after purchase. Class C shares of each Fund are sold with a CDSC 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.
76
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 or broker 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. Generally, 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, 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 U.S. 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 a material 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 under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.
Effective February 29, 2008, the Funds adopted 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 the Funds’ 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 are recorded as a tax benefit or expense in the current year. The adoption of FIN 48 did not result in the recording of any tax benefit or expense in the current period.
Class Accounting — Investment income and common expenses are allocated to the various classes of each Fund on the basis of “settled shares” of each class in relation to the net assets of that Fund. Realized and unrealized gain (loss) on investments are allocated to the various classes of each Fund on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.
77
Notes to financial statements
Delaware National Tax-Free Funds
1. Significant Accounting Policies (continued)
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.
Other — Expenses directly attributable to a Fund are charged directly to that Fund. 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 the 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 | Delaware National High-Yield | ||||
USA Fund | USA 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 fees, 12b-1 plan expenses, inverse floater expenses, certain insurance costs and non-routine expenses or costs including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations, do not exceed specified percentages of average daily net assets as shown on the next page. For purposes of these waivers and reimbursements, non-routine expenses may also involve such additional costs and expenses, as may be agreed upon from time to time by the Fund’s Board of Trustees and DMC.
78
2. | Investment Management, Administration Agreements and Other Transactions with Affiliates (continued) |
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | ||||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | ||||
Operating expense limitation as a | ||||||
percentage of average | ||||||
daily net assets (per annum) | 0.61% | 0.60% | 0.65% | |||
Expiration date | 12/31/07 | 12/31/07 | 12/31/07 | |||
Effective January 1, 2008, | ||||||
operating expense limitation | ||||||
as a percentage of average | ||||||
daily net assets (per annum) | 0.60% | 0.60% | 0.65% | |||
Expiration date | 12/31/08 | 12/31/08 | 12/31/08 |
Effective October 1, 2007, Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to the Funds. For these services, each Fund pays DSC fees based on the aggregate daily net assets of the Delaware Investments® Family of Funds at the following annual rate: 0.0050% of the first $30 billion; 0.0045% of the next $10 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $50 billion. The fees payable to DSC under the service agreement described above are allocated among all funds in the Delaware Investments® Family of Funds on a relative net asset value basis. Prior to October 1, 2007, DSC provided fund accounting and administrative services to the Funds and received a fee at an annual rate of 0.04% of average daily net assets. For the six months ended February 29, 2008, each Fund was charged for these services as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | ||||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | ||||
$40,590 | $18,958 | $4,046 |
DSC also provides dividend disbursing and transfer agency 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 DDLP, the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Class A shares for Delaware Tax-Free USA Intermediate Fund, 0.25% of the average daily net assets of the Class A shares for the Delaware National High-Yield Municipal Bond 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 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 0.30% of the average daily net assets representing shares that were acquired on or after June 1, 1992. Effective April 21, 2006, the
79
Notes to financial statements
Delaware National Tax-Free Funds
2. | Investment Management, Administration Agreements and Other Transactions with Affiliates (continued) |
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, 2008 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.
At February 29, 2008, the Funds had liabilities payable to affiliates as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | ||||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | ||||
Investment management fees payable to DMC | $240,580 | $118,543 | $23,945 | |||
Dividend disbursing, transfer agent fees and expenses payable to DSC | 38,538 | 34,503 | 4,634 | |||
Distribution fees payable to DDLP | 153,602 | 64,955 | 20,236 | |||
Other expenses payable to DMC and affiliates* | 54,181 | 122,428 | 7,771 |
*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 29, 2008, each Fund was charged for internal legal and tax services provided by DMC and/or its affiliates' employees as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | |||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | |||
$26,014 | $13,191 | $2,645 |
80
2. | Investment Management, Administration Agreements and Other Transactions with Affiliates (continued) |
For the six months ended February 29, 2008, DDLP earned commissions on sales of Class A shares for each Fund as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | |||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | |||
$12,165 | $3,851 | $5,785 |
For the six months ended February 29, 2008, DDLP received gross CDSC 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 | Delaware National High-Yield | |||||||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | |||||||
Class A | $9,261 | $ | 21 | $5,696 | |||||
Class B | 4,607 | 150 | — | ||||||
Class C | 1,843 | 1,221 | 78 |
Trustees’ fees include expenses accrued by the Funds for each Trustee’s retainer, per meeting fees and retirement benefits. 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 29, 2008, the Funds made purchases and sales of investment securities other than short-term investments as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | ||||||||||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | ||||||||||
Purchases | $ | 89,345,937 | $103,515,576 | $6,364,938 | ||||||||
Sales | 161,458,370 | 40,581,532 | 6,934,040 |
At February 29, 2008, the cost of investments for federal income tax purposes has been estimated since final tax characteristics cannot be determined until fiscal year end. At February 29, 2008, the cost of investments and unrealized appreciation (depreciation) for each Fund were as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | ||||||||||||||||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | ||||||||||||||||
Cost of investments | $ | 667,410,931 | $ | 379,509,158 | $ | 74,033,787 | ||||||||||||
Aggregate unrealized appreciation | $ | 19,468,084 | $ | 3,302,177 | $ | 1,350,708 | ||||||||||||
Aggregate unrealized depreciation. | (28,936,130 | ) | (11,876,794 | ) | (4,710,515 | ) | ||||||||||||
Net unrealized depreciation | $ | (9,468,046 | ) | $ | (8,574,617 | ) | $ | (3,359,807 | ) |
81
Notes to financial statements
Delaware National Tax-Free Funds
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 29, 2008 and the year ended August 31, 2007 was as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | |||||||||||||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | |||||||||||||
Six months ended 2/29/08* | |||||||||||||||
Tax-exempt income | $ | 14,878,647 | $ | 6,213,586 | $1,771,963 | ||||||||||
Ordinary income | 4,941 | 59,012 | — | ||||||||||||
Total | $ | 14,883,588 | $ | 6,272,598 | $1,771,963 | ||||||||||
Year ended 8/31/07 | |||||||||||||||
Tax-exempt income | $ | 27,624,675 | $ | 9,979,962 | $3,672,422 | ||||||||||
Ordinary income | 8,410 | 120,492 | — | ||||||||||||
Total | $ | 27,633,085 | $ | 10,100,454 | $3,672,422 |
*Tax information for the period ended February 29, 2008 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
As of February 29, 2008, the components of net assets on a tax basis were as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | |||||||||||||||||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | |||||||||||||||||
Shares of beneficial interest | $ | 687,097,905 | $ | 392,345,338 | $ | 80,800,170 | |||||||||||||
Undistributed (distributions | |||||||||||||||||||
in excess of) tax-exempt | |||||||||||||||||||
income | 1,790 | — | (4,104 | ) | |||||||||||||||
Capital loss carryforwards | |||||||||||||||||||
as of 8/31/07 | (4,894,533 | ) | (374,647 | ) | (6,139,231 | ) | |||||||||||||
Post-October losses | (2,484,781 | ) | (847,808 | ) | — | ||||||||||||||
Realized gains (losses) | |||||||||||||||||||
9/1/07 – 2/29/08 | (681,290 | ) | (2,127,383 | ) | 489,448 | ||||||||||||||
Unrealized depreciation | |||||||||||||||||||
of investments | (9,468,046 | ) | (8,574,617 | ) | (3,359,807 | ) | |||||||||||||
Net assets | $ | 669,571,045 | $ | 380,420,883 | $ | 71,786,476 |
82
5. Components of Net Assets on a Tax Basis (continued)
The differences between book basis and tax basis components of net assets are primarily attributable to tax treatment of market discount on debt instruments.
Post-October losses represent losses realized on investment transactions from November 1, 2007 through February 29, 2008 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 federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. Capital loss carryforwards remaining at August 31, 2008 will expire as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | ||||||||||||||
Year of Expiration | USA Fund | USA Intermediate Fund | Municipal Bond Fund | |||||||||||||
2008 | $ | 4,822,387 | $ | — | $ | 708,680 | ||||||||||
2009 | 72,146 | — | 3,025,716 | |||||||||||||
2010 | — | — | 70,671 | |||||||||||||
2011 | — | 249,429 | 997,721 | |||||||||||||
2012 | — | 5,791 | 980,742 | |||||||||||||
2014 | — | 119,427 | — | |||||||||||||
2015 | — | — | 355,701 | |||||||||||||
Total | $ | 4,894,533 | $ | 374,647 | $ | 6,139,231 |
For the six months ended February 29, 2008, the Funds had capital gains (losses) which may reduce (increase) the capital loss carryforwards as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | |||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | |||
$(681,290) | $(2,127,383) | $489,448 |
83
Notes to financial statements
Delaware National Tax-Free Funds
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 | ||||||||||||||
2/29/08 | 8/31/07 | 2/29/08 | 8/31/07 | 2/29/08 | 8/31/07 | ||||||||||||||
Shares sold: | |||||||||||||||||||
Class A | 1,273,854 | 11,325,904 | 9,565,024 | 15,563,672 | 927,444 | 1,120,423 | |||||||||||||
Class B | 11,167 | 26,454 | 8,204 | 24,525 | 3,394 | 52,256 | |||||||||||||
Class C | 274,279 | 188,431 | 265,144 | 633,232 | 131,991 | 50,895 | |||||||||||||
Shares issued upon reinvestment of dividends and distributions: | |||||||||||||||||||
Class A | 597,299 | 1,089,918 | 392,007 | 581,213 | 91,251 | 182,301 | |||||||||||||
Class B | 12,006 | 31,697 | 1,519 | 4,273 | 3,500 | 11,291 | |||||||||||||
Class C | 18,269 | 30,353 | 19,158 | 41,910 | 7,722 | 13,424 | |||||||||||||
Shares issued from fund merger*: | |||||||||||||||||||
Class A | — | 7,205,217 | — | — | — | — | |||||||||||||
Class B | — | 257,365 | — | — | — | — | |||||||||||||
Class C | — | 304,075 | — | — | — | — | |||||||||||||
2,186,874 | 20,459,414 | 10,251,056 | 16,848,825 | 1,165,302 | 1,430,590 | ||||||||||||||
Shares repurchased: | |||||||||||||||||||
Class A | (8,114,329 | ) | (10,887,838 | ) | (5,135,003 | ) | (6,656,420 | ) | (918,001 | ) | (1,459,034 | ) | |||||||
Class B | (323,419 | ) | (694,147 | ) | (24,375 | ) | (79,838 | ) | (180,393 | ) | (389,448 | ) | |||||||
Class C | (274,548 | ) | (326,572 | ) | (500,434 | ) | (596,931 | ) | (41,146 | ) | (97,429 | ) | |||||||
(8,712,296 | ) | (11,908,557 | ) | (5,659,812 | ) | (7,333,189 | ) | (1,139,540 | ) | (1,945,911 | ) | ||||||||
Net increase (decrease) | (6,525,422 | ) | 8,550,857 | 4,591,244 | 9,515,636 | 25,762 | (515,321 | ) |
*See note 7.
For the six months ended February 29, 2008 and the year ended August 31, 2007, the following shares and values were converted from Class B shares 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 month Ended | Year Ended | |||||||||||||
2/29/08 | 8/31/07 | |||||||||||||
Class B | Class A | Class B | Class A | |||||||||||
Shares | Shares | Value | Shares | Shares | Value | |||||||||
Delaware Tax-Free USA Fund | 149,171 | 149,117 | $ | 1,687,319 | 313,870 | 313,802 | $ | 3,623,804 | ||||||
Delaware Tax-Free USA | ||||||||||||||
Intermediate Fund | 9,370 | 9,362 | 105,857 | 31,830 | 31,812 | 364,785 | ||||||||
Delaware National High-Yield | ||||||||||||||
Municipal Bond Fund | 73,174 | 73,358 | 734,802 | 161,352 | 161,820 | 1,677,884 |
84
7. Fund Merger
Effective July 13, 2007, Delaware Tax-Free USA Fund (Acquiring Fund) acquired all of the assets and assumed all of the liabilities of Delaware Tax-Free Florida Insured Fund (Acquired Fund), an open-end investment company, in exchange for shares of the Acquiring Fund pursuant to a Plan and Agreement of Reorganization (Reorganization). The shareholders of the 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 Reorganization.
The Reorganization was 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-Free Florida Insured Fund as of the close of business on July 13, 2007, were as follows:
Net Unrealized | Accumulated Net | |||||
Net Assets | Appreciation | Realized Gain/Loss | ||||
Delaware Tax-Free Florida Insured Fund | $88,309,928 | $2,426,693 | $— |
The net assets of Delaware Tax-Free USA Fund prior to the Reorganization were $707,230,768. The combined net assets of Delaware Tax-Free USA Fund after merger were $795,540,696.
8. Line of Credit
Each Fund, along with certain other funds in the Delaware Investments® Family of Funds (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 29, 2008, or at any time during the period then ended.
9. Credit and Market Risk
The Funds concentrates 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.
85
Notes to financial statements
Delaware National Tax-Free Funds
9. Credit and Market Risk (continued)
The Funds 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 Ratings 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 up to 15% of net 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, each Fund’s Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of each Fund’s limitation on investments in illiquid assets. As of February 29, 2008, there were no Rule 144A securities and no securities have been determined to be illiquid under each Fund’s Liquidity Procedures.
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.
86
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® Fund profiles for the most recently completed calendar quarter. These documents are available at www.delawareinvestments.com. The prospectus sets forth details about charges, expenses, investment objectives, and operating policies of the investment company. 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 investment company 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 |
88
Affiliated officers | Contact information | |
David F. Connor Daniel V. Geatens David P. O’Connor Richard Salus | Investment manager National distributor Shareholder servicing, dividend disbursing, and transfer agent For shareholders For securities dealers and financial institutions representatives only 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; and (ii) on the Commission’s Web site at www.sec.gov. In addition, a description of the policies and procedures that each Fund uses to determine how to vote proxies (if any) relating to portfolio securities and each Fund’s Schedule of Investments are available without charge on each Fund’s Web site at www.delawareinvestments.com. 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 www.delawareinvestments.com; and (ii) on the Commission’s Web site at www.sec.gov. |
89
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SA-011 [2/08] DG3 4/08 MF-08-03-025 PO 12797 (2926) |
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. Investments
(a) Included as part of report to shareholders filed under Item 1 of this Form N-CSR.
(b) Divestment of securities in accordance with Section 13(c) of the Investment Company Act of 1940.
Not applicable.
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.
There were no significant changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by the report to stockholders included herein (i.e., the registrant’s second fiscal quarter) that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
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 5, 2008 |
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 5, 2008 |
RICHARD SALUS | |
By: | Richard Salus |
Title: | Chief Financial Officer |
Date: | May 5, 2008 |