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 28, 2009 |
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 28, 2009 |
Fixed income mutual funds |
Table of contents
Disclosure of Fund expenses | 1 |
Sector allocations and credit quality breakdown | 4 |
Statements of net assets | 7 |
Statements of operations | 46 |
Statements of changes in net assets | 48 |
Financial highlights | 54 |
Notes to financial statements | 77 |
About the organization | 89 |
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.
© 2009 Delaware Distributors, L.P.
All third-party trademarks cited are the property of their respective owners.
Disclosure of Fund expenses
For the period September 1, 2008 to February 28, 2009
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, 2008 to February 28, 2009.
Actual expenses
The first section of the tables shown, “Actual Fund Return,” provides information about actual account values and actual expenses. You may use the information in this section of the table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The second section of the tables shown, “Hypothetical 5% Return,” provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The Funds’ expenses shown in the tables reflect fee waivers in effect. The expenses shown in each table assume reinvestment of all dividends and distributions.
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 | |||||||||||
9/1/08 | 2/28/09 | Expense Ratio | 9/1/08 to 2/28/09* | |||||||||||
Actual Fund return | ||||||||||||||
Class A | $ | 1,000.00 | $ | 966.00 | 0.84% | $ | 4.09 | |||||||
Class B | 1,000.00 | 963.20 | 1.60% | 7.79 | ||||||||||
Class C | 1,000.00 | 963.30 | 1.60% | 7.79 | ||||||||||
Institutional Class** | 1,000.00 | 1,039.60 | 0.60% | 1.01 | ||||||||||
Hypothetical 5% return (5% return before expenses) | ||||||||||||||
Class A | $ | 1,000.00 | $ | 1,020.63 | 0.84% | $ | 4.21 | |||||||
Class B | 1,000.00 | 1,016.86 | 1.60% | 8.00 | ||||||||||
Class C | 1,000.00 | 1,016.86 | 1.60% | 8.00 | ||||||||||
Institutional Class** | 1,000.00 | 1,021.82 | 0.60% | 3.01 | ||||||||||
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 | |||||||||||
9/1/08 | 2/28/09 | Expense Ratio | 9/1/08 to 2/28/09* | |||||||||||
Actual Fund return | ||||||||||||||
Class A | $ | 1,000.00 | $ | 1,001.90 | 0.75% | $ | 3.72 | |||||||
Class B | 1,000.00 | 997.70 | 1.60% | 7.93 | ||||||||||
Class C | 1,000.00 | 998.60 | 1.60% | 7.93 | ||||||||||
Institutional Class** | 1,000.00 | 1,030.80 | 0.60% | 1.00 | ||||||||||
Hypothetical 5% return (5% return before expenses) | ||||||||||||||
Class A | $ | 1,000.00 | $ | 1,021.08 | 0.75% | $ | 3.76 | |||||||
Class B | 1,000.00 | 1,016.86 | 1.60% | 8.00 | ||||||||||
Class C | 1,000.00 | 1,016.86 | 1.60% | 8.00 | ||||||||||
Institutional Class** | 1,000.00 | 1,021.82 | 0.60% | 3.01 |
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 | |||||||||||
9/1/08 | 2/28/09 | Expense Ratio | 9/1/08 to 2/28/09* | |||||||||||
Actual Fund return | ||||||||||||||
Class A | $ | 1,000.00 | $ | 870.00 | 0.90% | $ | 4.17 | |||||||
Class B | 1,000.00 | 865.90 | 1.65% | 7.63 | ||||||||||
Class C | 1,000.00 | 866.20 | 1.65% | 7.63 | ||||||||||
Institutional Class** | 1,000.00 | 1,069.10 | 0.65% | 1.11 | ||||||||||
Hypothetical 5% return (5% return before expenses) | ||||||||||||||
Class A | $ | 1,000.00 | $ | 1,020.33 | 0.90% | $ | 4.51 | |||||||
Class B | 1,000.00 | 1,016.61 | 1.65% | 8.25 | ||||||||||
Class C | 1,000.00 | 1,016.61 | 1.65% | 8.25 | ||||||||||
Institutional Class** | 1,000.00 | 1,021.57 | 0.65% | 3.26 |
* | “Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
** | The Institutional Class shares commenced operations on December 31, 2008. The actual ending account value and the expenses paid during period reflect the shorter period, 60 days. The hypothetical example assumes the entire half year period. |
3
Sector allocations and credit quality breakdown | |
Delaware Tax-Free USA Fund | As of February 28, 2009 |
Sector designations may be different than the sector designations presented in other Fund materials.
Sector | Percentage of net assets | |
Municipal Bonds | 97.72 | % |
Corporate Revenue Bonds | 7.95 | % |
Education Revenue Bonds | 7.16 | % |
Electric Revenue Bonds | 2.17 | % |
Escrowed to Maturity Bonds | 7.43 | % |
Health Care Revenue Bonds | 10.72 | % |
Housing Revenue Bonds | 2.15 | % |
Lease Revenue Bonds | 1.65 | % |
Local General Obligation Bonds | 7.62 | % |
Pre-Refunded Bonds | 23.99 | % |
Special Tax Bonds | 7.66 | % |
State General Obligation Bonds | 9.20 | % |
Transportation Revenue Bonds | 7.13 | % |
Water & Sewer Revenue Bonds | 2.89 | % |
Short-Term Investment | 0.74 | % |
Total Value of Securities | 98.46 | % |
Receivables and Other Assets Net of Liabilities | 1.54 | % |
Total Net Assets | 100.00 | % |
Credit quality breakdown (as a % of fixed income investments)* | ||
AAA | 40.19 | % |
AA | 22.05 | % |
A | 18.79 | % |
BBB | 12.01 | % |
BB | 1.28 | % |
B | 1.08 | % |
Not Rated | 4.60 | % |
Total | 100.00 | % |
4
Delaware Tax-Free USA Intermediate Fund | As of February 28, 2009 |
Sector designations may be different than the sector designations presented in other Fund materials.
Sector | Percentage of net assets | |
Municipal Bonds | 97.80 | % |
Corporate Revenue Bonds | 3.30 | % |
Education Revenue Bonds | 6.50 | % |
Electric Revenue Bonds | 2.56 | % |
Escrowed to Maturity Bonds | 0.05 | % |
Health Care Revenue Bonds | 8.13 | % |
Housing Revenue Bonds | 1.63 | % |
Lease Revenue Bonds | 3.27 | % |
Local General Obligation Bonds | 11.46 | % |
Pre-Refunded Bonds | 9.32 | % |
Resource Recovery Bonds | 0.25 | % |
Special Tax Bonds | 8.57 | % |
State General Obligation Bonds | 23.94 | % |
Transportation Revenue Bonds | 11.64 | % |
Water & Sewer Revenue Bonds | 7.18 | % |
Short-Term Investments | 2.76 | % |
Total Value of Securities | 100.56 | % |
Liabilities Net of Receivables and Other Assets | (0.56 | %) |
Total Net Assets | 100.00 | % |
Credit quality breakdown (as a % of fixed income investments)* | ||
AAA | 29.66 | % |
AA | 42.30 | % |
A | 17.23 | % |
BBB | 7.28 | % |
BB | 1.03 | % |
B | 0.38 | % |
Not Rated | 2.12 | % |
Total | 100.00 | % |
5
Sector allocations and credit quality breakdown | |
Delaware National High-Yield Municipal Bond Fund | As of February 28, 2009 |
Sector designations may be different than the sector designations presented in other Fund materials.
Sector | Percentage of net assets | |
Municipal Bonds | 98.19 | % |
Corporate Revenue Bonds | 13.56 | % |
Education Revenue Bonds | 19.85 | % |
Health Care Revenue Bonds | 21.99 | % |
Housing Revenue Bonds | 1.44 | % |
Lease Revenue Bonds | 2.36 | % |
Local General Obligation Bonds | 1.46 | % |
Pre-Refunded Bonds | 18.34 | % |
Special Tax Bonds | 14.05 | % |
State General Obligation Bonds | 1.76 | % |
Transportation Revenue Bonds | 3.38 | % |
Total Value of Securities | 98.19 | % |
Receivables and Other Assets Net of Liabilities | 1.81 | % |
Total Net Assets | 100.00 | % |
Credit quality breakdown (as a % of fixed income investments)* | ||
AAA | 14.56 | % |
AA | 6.10 | % |
A | 9.96 | % |
BBB | 31.01 | % |
BB | 6.97 | % |
B | 3.70 | % |
Not Rated | 27.70 | % |
Total | 100.00 | % |
6
Statements of net assets | |
Delaware Tax-Free USA Fund | February 28, 2009 (Unaudited) |
Principal amount | Value | |||||
Municipal Bonds – 97.72% | ||||||
Corporate Revenue Bonds – 7.95% | ||||||
Alliance Airport Authority, Texas Special | ||||||
Facilities Revenue (American Airlines Project) | ||||||
Series B 5.25% 12/1/29 (AMT) | $ | 2,250,000 | $ | 888,885 | ||
· | Brazos, Texas Harbor Industrial Development | |||||
Environmental Facilities Revenue | ||||||
(Dow Chemical Co. Project) 5.90% 5/1/38 (AMT) | 1,940,000 | 1,299,412 | ||||
Brazos, Texas River Authority Pollution Control Revenue | ||||||
(Texas Utilities) 5.40% 5/1/29 (AMT) | 3,000,000 | 1,297,740 | ||||
(TXU Energy Co. Project) Series B 6.30% 7/1/32 (AMT) | 3,500,000 | 1,619,030 | ||||
· | Chesapeake, Virginia Economic Development Authority | |||||
Pollution Control Revenue (Electric & Power Co. Project) | ||||||
Series A 3.60% 2/1/32 | 2,100,000 | 2,075,409 | ||||
Cloquet, Minnesota Pollution Control Revenue | ||||||
(Potlatch Corp. Project) 5.90% 10/1/26 | 1,695,000 | 1,121,107 | ||||
Indianapolis, Indiana Airport Authority Revenue | ||||||
Special Facilities (Federal Express Corp. Project) | ||||||
5.10% 1/15/17 (AMT) | 2,750,000 | 2,320,753 | ||||
Series 1998 5.50% 5/1/29 (AMT) | 2,000,000 | 1,325,680 | ||||
Iowa Finance Authority Pollution Control Facility Revenue | ||||||
(Interstate Power) 5.00% 7/1/14 (FGIC) | 3,640,000 | 3,701,188 | ||||
Mason County, West Virginia Pollution Control Revenue | ||||||
(Appalachian Power Co. Project) | ||||||
Series K 6.05% 12/1/24 (AMBAC) | 3,000,000 | 2,870,280 | ||||
Mississippi Business Finance Corporation Pollution | ||||||
Control Revenue (System Energy Resources, Inc. | ||||||
Project) 5.90% 5/1/22 | 3,000,000 | 2,474,130 | ||||
· | Mobile, Alabama Industrial Development Board | |||||
Pollution Control Revenue (Alabama Power Co.) | ||||||
Series B 4.875% 6/1/34 | 4,750,000 | 4,928,789 | ||||
New Jersey Economic Development Authority Special | ||||||
Facility Revenue (Continental Airlines, Inc. Project) | ||||||
6.25% 9/15/29 (AMT) | 2,000,000 | 1,298,120 | ||||
Petersburg, Indiana Pollution Control Revenue (Indianapolis | ||||||
Power & Light Co. Project) 6.375% 11/2/29 (AMT) | 5,000,000 | 3,962,650 | ||||
Phenix City, Alabama Industrial Development Board | ||||||
Environmental Improvement Revenue (Mead Westvaco | ||||||
Corp. Project) Series A 6.35% 5/15/35 (AMT) | 3,000,000 | 1,883,040 | ||||
· | Port Morrow, Oregon Pollution Control Revenue | |||||
(Portland General Electric Co.) Series A 5.20% 5/1/33 | 2,600,000 | 2,606,266 |
7
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Corporate Revenue Bonds (continued) | ||||||
Richmond County, Georgia Development Authority | ||||||
Environmental Improvement Revenue (International | ||||||
Paper Co.) Series B 5.95% 11/15/25 (AMT) | $ | 5,000,000 | $ | 3,427,000 | ||
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 | 427,310 | ||||
Sugar Creek, Missouri Industrial Development Revenue | ||||||
(Lafarge North America Project) | ||||||
Series A 5.65% 6/1/37 (AMT) | 500,000 | 317,865 | ||||
Sweetwater County, Wyoming Solid Waste Disposal | ||||||
Revenue (FMC Corp. Project) 5.60% 12/1/35 (AMT) | 3,250,000 | 2,318,908 | ||||
W | Tobacco Settlement Financing Corporation, Virginia | |||||
Senior Convertible Series B-2 5.20% 6/1/46 | 2,500,000 | 1,003,550 | ||||
43,167,112 | ||||||
Education Revenue Bonds – 7.16% | ||||||
Amherst, New York Industrial Development Agency Civic | ||||||
Facilities Revenue (UBF Faculty Student Housing) | ||||||
Series A 5.75% 8/1/30 (AMBAC) | 1,300,000 | 1,305,538 | ||||
Broward County, Florida Educational Facilities | ||||||
Authority Revenue (Nova Southeastern University Project) | ||||||
5.25% 4/1/27 (RADIAN) | 1,000,000 | 843,180 | ||||
California Educational Facilities Authority Revenue | ||||||
(University of Southern California) | ||||||
Series A 5.00% 10/1/39 | 6,750,000 | 6,749,663 | ||||
California Statewide Communities Development | ||||||
Authority Student Housing Revenue (East Campus | ||||||
Apartments, LLC) Series A 5.625% 8/1/34 (ACA) | 3,400,000 | 2,750,634 | ||||
Gainesville, Georgia Redevelopment Authority | ||||||
Educational Facilities Revenue (Riverside Military | ||||||
Academy Project) 5.125% 3/1/37 | 3,735,000 | 1,896,670 | ||||
Marietta, Georgia Development Authority Revenue | ||||||
(Life University Income Project) 7.00% 6/15/39 | 2,300,000 | 1,589,300 | ||||
Massachusetts State Health & Educational Facilities | ||||||
Authority Revenue | ||||||
(Harvard University) Series A 5.50% 11/15/36 | 4,515,000 | 4,790,189 | ||||
(Nichols College Project) Series C | ||||||
6.00% 10/1/17 | 810,000 | 751,129 | ||||
6.125% 10/1/29 | 1,000,000 | 782,460 |
8
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Education Revenue Bonds (continued) | ||||||
Missouri State Health & Educational Facilities Authority | ||||||
Educational Facilities Revenue (Washington University) | ||||||
Series A 5.375% 3/15/39 | $ | 5,000,000 | $ | 5,216,350 | ||
New Hampshire Higher Educational & Health Facilities | ||||||
Authority Revenue (New Hampton School Issue) | ||||||
5.375% 10/1/28 | 3,070,000 | 2,125,269 | ||||
^ | Oregon Health & Science University Revenue (Capital | |||||
Appreciation Insured) Series A 5.50% 7/1/21 (MBIA) | 2,000,000 | 1,022,420 | ||||
Provo, Utah Charter School Revenue (Freedom Academy | ||||||
Foundation Project) 5.50% 6/15/37 | 1,750,000 | 1,069,023 | ||||
Saint Louis, Missouri Industrial Development Authority | ||||||
Revenue (Confluence Academy Project) Series A | ||||||
5.25% 6/15/25 | 1,150,000 | 783,656 | ||||
5.35% 6/15/32 | 2,300,000 | 1,438,006 | ||||
San Leanna, Texas Higher Educational Facilities Revenue | ||||||
(Saint Edwards University Project) 4.75% 6/1/32 | 1,150,000 | 752,307 | ||||
Texas A & M University Revenue Financing System | ||||||
5.00% 5/15/17 | 4,060,000 | 4,625,680 | ||||
University of the Virgin Islands Series A 5.375% 6/1/34 | 500,000 | 391,785 | ||||
38,883,259 | ||||||
Electric Revenue Bonds – 2.17% | ||||||
Chelan County, Washington Public Utilities District #001 | ||||||
Consolidated Revenue (Chelan Hydro System) | ||||||
Series A 5.45% 7/1/37 (AMBAC) (AMT) | 5,000,000 | 4,216,300 | ||||
Florida State Municipal Power Agency Revenue | ||||||
(Stanton II Project) 5.00% 10/1/26 (AMBAC) | 2,000,000 | 2,008,380 | ||||
Long Island Power Authority, New York Electric System | ||||||
Revenue Series A 5.75% 4/1/39 | 1,355,000 | 1,399,227 | ||||
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 | 2,201,408 | ||||
Puerto Rico Electric Power Authority Power Revenue | ||||||
Series PP 5.00% 7/1/25 (FGIC) | 1,000,000 | 906,350 | ||||
Sikeston, Missouri Electric Revenue Refunding | ||||||
6.00% 6/1/13 (MBIA) | 1,000,000 | 1,039,260 | ||||
11,770,925 |
9
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Escrowed to Maturity Bonds – 7.43% | ||||||
Cape Girardeau County, Missouri Industrial Development | ||||||
Authority Health Care Facilities Revenue (Southeast | ||||||
Missouri Hospital) 5.25% 6/1/16 (MBIA) | $ | 440,000 | $ | 497,490 | ||
^ | Greene County, Missouri Single Family Mortgage | |||||
Revenue Municipal Multiplier (Private Mortgage | ||||||
Insurance) 6.10% 3/1/16 | 1,225,000 | 984,753 | ||||
Louisiana Public Facilities Authority Hospital Revenue | ||||||
(Southern Baptist Hospital, Inc. Project) | ||||||
8.00% 5/15/12 | 3,490,000 | 3,871,841 | ||||
Missouri State Health & Educational Facilities Authority | ||||||
Health Facilities Revenue Refunding (SSM Health Care) | ||||||
Series AA 6.40% 6/1/10 (MBIA) | 500,000 | 534,800 | ||||
New Jersey State Highway Authority Garden State | ||||||
Parkway General Revenue (Senior Parkway) | ||||||
5.50% 1/1/14 (FGIC) | 5,000,000 | 5,777,750 | ||||
5.50% 1/1/15 (FGIC) | 7,310,000 | 8,575,580 | ||||
5.50% 1/1/16 (FGIC) | 1,000,000 | 1,189,350 | ||||
Oklahoma State Turnpike Authority Revenue | ||||||
(First Senior) 6.00% 1/1/22 | 13,535,000 | 16,179,740 | ||||
Virgin Islands Public Finance Authority Revenue | ||||||
Series A 7.30% 10/1/18 | 2,200,000 | 2,778,270 | ||||
40,389,574 | ||||||
Health Care Revenue Bonds – 10.72% | ||||||
Allegheny County, Pennsylvania Hospital Development | ||||||
Authority Revenue (University of Pittsburgh Medical | ||||||
Center) Series A 5.00% 9/1/14 | 5,575,000 | 5,875,046 | ||||
Arizona Health Facilities Authority Revenue | ||||||
(Banner Health) Series D 5.375% 1/1/32 | 2,500,000 | 2,352,675 | ||||
Cape Girardeau County, Missouri Industrial | ||||||
Development Authority Health Care Facilities | ||||||
Revenue Unrefunded Balance | ||||||
(Southeast Missouri Hospital) 5.25% 6/1/16 (MBIA) | 560,000 | 615,580 | ||||
(St. Francis Medical Center) Series A 5.50% 6/1/32 | 1,000,000 | 868,430 | ||||
Chatham County, Georgia Hospital Authority Revenue | ||||||
(Memorial Health Medical Center) | ||||||
Series A 6.125% 1/1/24 | 1,805,000 | 1,465,931 | ||||
@ | Cleveland-Cuyahoga County, Ohio Port Authority | |||||
Revenue Senior Housing (St. Clarence - Geac) | ||||||
Series A 6.25% 5/1/38 | 1,500,000 | 857,640 |
10
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Health Care Revenue Bonds (continued) | ||||||
Colorado Health Facilities Authority Revenue | ||||||
(Evangelical Lutheran) Series A 5.25% 6/1/34 | $ | 4,275,000 | $ | 3,220,785 | ||
Cuyahoga County, Ohio Revenue (Cleveland Clinic | ||||||
Health Systems) Series A 5.50% 1/1/29 | 4,000,000 | 3,879,920 | ||||
Escambia County, Florida Health Facilities Authority | ||||||
Health Care Facilities Loan (VHA Program) | ||||||
5.95% 7/1/20 (AMBAC) | 515,000 | 537,686 | ||||
Gainesville & Hall County, Georgia Development Authority | ||||||
Revenue Senior Living Facilities (Lanier Village Estates | ||||||
Project) Series C 7.25% 11/15/29 | 1,000,000 | 960,090 | ||||
Illinois Health Facilities Authority Revenue | ||||||
(Elmhurst Memorial Healthcare Project) 5.625% 1/1/28 | 2,000,000 | 1,658,820 | ||||
Indian River County, Florida Hospital District Revenue | ||||||
Refunding 6.10% 10/1/18 (FSA) | 3,000,000 | 3,002,820 | ||||
Joplin, Missouri Industrial Development Authority Health | ||||||
Facilities Revenue (Freeman Health System Project) | ||||||
5.75% 2/15/35 | 245,000 | 194,528 | ||||
Lucas County, Ohio Health Care Facility Revenue (Sunset | ||||||
Retirement Communities) Series A 6.625% 8/15/30 | 2,000,000 | 1,811,680 | ||||
Michigan State Hospital Finance Authority Revenue | ||||||
(Ascension Health Credit Group) | ||||||
Series B 5.25% 11/15/26 | 3,500,000 | 3,501,890 | ||||
(Oakwood Obligation Group) Series A 5.75% 4/1/32 | 2,500,000 | 2,052,375 | ||||
(Trinity Health Credit) Series C 5.375% 12/1/30 | 6,000,000 | 5,725,680 | ||||
Minneapolis, Minnesota Health Care System Revenue | ||||||
(Fairview Health) Series A 6.625% 11/15/28 | 4,000,000 | 4,225,320 | ||||
Montgomery County, Pennsylvania Industrial Development | ||||||
Authority Retirement Community Revenue | ||||||
(Acts Retirement Communities) Series A 4.50% 11/15/36 | 2,000,000 | 1,175,260 | ||||
New York State Dormitory Authority Revenue (Non State | ||||||
Supported Debt - Orange Regional Medical Center) | ||||||
6.50% 12/1/21 | 2,745,000 | 2,351,449 | ||||
North Carolina Medical Care Commission Health Care | ||||||
Facilities Revenue (First Mortgage - Presbyterian Homes) | ||||||
5.40% 10/1/27 | 3,260,000 | 2,463,321 | ||||
North Kansas City, Missouri Hospital Revenue | ||||||
Series A 5.00% 11/15/28 (FSA) | 500,000 | 469,525 |
11
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Health Care Revenue Bonds (continued) | ||||||
Ohio State Higher Educational Facilities Community | ||||||
Revenue (Cleveland Clinic Health System Obligation | ||||||
Group) Series A 5.25% 1/1/33 | $ | 2,000,000 | $ | 1,933,860 | ||
Palm Beach County, Florida Health Facilities Authority | ||||||
Revenue (Boca Raton Community Hospital) | ||||||
5.625% 12/1/31 | 2,000,000 | 1,457,180 | ||||
Prince William County, Virginia Industrial Development | ||||||
Authority Hospital Revenue (Potomac Hospital Corp.) | ||||||
5.35% 10/1/36 | 250,000 | 183,950 | ||||
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 | 1,167,048 | ||||
Shelby County, Tennessee Health Educational & Housing | ||||||
Facilities Board Revenue (Trezevant Manor Project) | ||||||
Series A 5.625% 9/1/26 | 2,500,000 | 1,719,375 | ||||
Tallahassee, Florida Health Facilities Revenue | ||||||
(Tallahassee Memorial Regional Medical Center) | ||||||
Series B 6.00% 12/1/15 (MBIA) | 2,500,000 | 2,501,275 | ||||
58,229,139 | ||||||
Housing Revenue Bonds – 2.15% | ||||||
Florida Housing Finance Agency | ||||||
(Landings at Sea Forest Apartments) Series T | ||||||
5.85% 12/1/18 (AMBAC) (FHA) (AMT) | 325,000 | 325,159 | ||||
6.05% 12/1/36 (AMBAC) (FHA) (AMT) | 700,000 | 677,992 | ||||
(Leigh Meadows Apartments Section 8 HUD) Series N | ||||||
6.20% 9/1/26 (AMBAC) (AMT) | 2,765,000 | 2,765,001 | ||||
6.30% 9/1/36 (AMBAC) (AMT) | 2,000,000 | 1,984,480 | ||||
(Spinnaker Cove Apartments) Series G | ||||||
6.50% 7/1/36 (AMBAC) (FHA) (AMT) | 500,000 | 500,140 | ||||
Milwaukee, Wisconsin Redevelopment Authority | ||||||
Multifamily Revenue (City Hall Square) | ||||||
6.30% 8/1/38 (FHA) (AMT) | 1,455,000 | 1,456,906 | ||||
Missouri State Housing Development Commission | ||||||
Mortgage Revenue Single Family Homeowner Loan A | ||||||
5.20% 9/1/33 (GNMA) (FNMA) (AMT) | 215,000 | 196,400 |
12
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Housing Revenue Bonds (continued) | ||||||
Missouri State Housing Development Commission | ||||||
Multifamily Housing Revenue | ||||||
(Hyder) Series 3 5.60% 7/1/34 (FHA) (AMT) | $ | 1,435,000 | $ | 1,365,962 | ||
(San Remo) Series 5 5.45% 1/1/36 (FHA) (AMT) | 500,000 | 464,755 | ||||
New Mexico Mortgage Finance Authority Revenue | ||||||
Series B Class III 6.75% 7/1/25 (GNMA) (FNMA) | 120,000 | 123,602 | ||||
Series E 6.95% 1/1/26 (GNMA) (FNMA) | 120,000 | 122,927 | ||||
Orange County, Florida Housing Finance Authority | ||||||
Homeowner Revenue Series B | ||||||
5.25% 3/1/33 (GNMA) (FNMA) (AMT) | 140,000 | 128,730 | ||||
Oregon Health, Housing, Educational, & Cultural Facilities | ||||||
Authority Revenue (Pier Park Project) Series A | ||||||
6.05% 4/1/18 (GNMA) (AMT) | 960,000 | 961,114 | ||||
Santa Fe, New Mexico Single Family Mortgage Revenue | ||||||
Series B-1 6.20% 11/1/16 (GNMA) (FNMA) (AMT) | 140,000 | 140,147 | ||||
Volusia County, Florida Multifamily Housing Finance | ||||||
Authority (San Marco Apartments) Series A | ||||||
5.60% 1/1/44 (FSA) (AMT) | 500,000 | 468,110 | ||||
11,681,425 | ||||||
Lease Revenue Bonds – 1.65% | ||||||
Loudoun County, Virginia Industrial Development | ||||||
Authority Public Safety Facility Lease Revenue | ||||||
Series A 5.25% 12/15/23 (FSA) | 700,000 | 735,574 | ||||
Missouri State Development Finance Board | ||||||
Infrastructure Facilities Revenue | ||||||
(Branson Landing Project) Series A | ||||||
5.25% 12/1/19 | 1,435,000 | 1,300,110 | ||||
5.625% 12/1/28 | 2,430,000 | 2,046,375 | ||||
(Sewer System Improvement Project) Series C | ||||||
5.00% 3/1/25 | 605,000 | 566,643 | ||||
(Triumph Foods Project) Series A 5.25% 3/1/25 | 500,000 | 481,395 | ||||
Puerto Rico Commonwealth Industrial Development | ||||||
Company General Purpose Revenue Series B | ||||||
5.375% 7/1/16 | 1,000,000 | 968,120 | ||||
Puerto Rico Public Buildings Authority Revenue | ||||||
(Guaranteed Government Facilities) Series F | ||||||
5.25% 7/1/25 | 930,000 | 819,907 |
13
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Lease Revenue Bonds (continued) | ||||||
St. Charles County, Missouri Public Water Supply | ||||||
District #2 Certificates of Participation (Missouri Project) | ||||||
Series B 5.10% 12/1/25 (MBIA) | $ | 500,000 | $ | 438,855 | ||
^ | St. Louis, Missouri Industrial Development Authority | |||||
Leasehold Revenue (Convention Center Hotel) | ||||||
5.80% 7/15/20 (AMBAC) | 3,035,000 | 1,599,263 | ||||
8,956,242 | ||||||
Local General Obligation Bonds – 7.62% | ||||||
Boerne, Texas Independent School District Building | ||||||
5.25% 2/1/27 (PSF) | 4,000,000 | 4,096,640 | ||||
Chandler, Arizona 5.00% 7/1/21 | 4,250,000 | 4,663,568 | ||||
Desert, California Community College | ||||||
District Election 2004 Series C 5.00% 8/1/37 (FSA) | 4,785,000 | 4,615,994 | ||||
Greene County, Missouri Reorganization School | ||||||
District R8 (Direct Deposit Project) 5.10% 3/1/22 (FSA) | 1,500,000 | 1,593,915 | ||||
Gwinnett County, Georgia School District 5.00% 2/1/11 | 8,000,000 | 8,576,399 | ||||
Jefferson County, Oregon School District #509J | ||||||
5.00% 6/15/22 (FGIC) | 500,000 | 516,380 | ||||
Lewisville, Texas Independent School District | ||||||
6.15% 8/15/21 (PSF) | 75,000 | 75,833 | ||||
Los Angeles, California Unified School | ||||||
District Election of 2005 Series F 5.00% 1/1/34 | 6,180,000 | 5,958,200 | ||||
Melrose Park, Illinois Tax Increment Series B | ||||||
6.00% 12/15/19 (FSA) | 1,250,000 | 1,338,663 | ||||
New York City, New York | ||||||
Series I 5.125% 3/1/23 | 5,875,000 | 5,885,516 | ||||
Series J 5.25% 6/1/28 | 2,055,000 | 2,040,060 | ||||
Powell, Ohio 5.50% 12/1/32 (FGIC) | 2,000,000 | 2,031,680 | ||||
41,392,848 | ||||||
§Pre-Refunded Bonds – 23.99% | ||||||
Alexandria, Virginia Industrial Development Authority | ||||||
Revenue (Institute for Defense Analyses) | ||||||
Series A 5.90% 10/1/30-10 (AMBAC) | 6,000,000 | 6,520,380 | ||||
California State 5.25% 2/1/30-12 (MBIA) | 5,000 | 5,546 | ||||
Deschutes County, Oregon Administrative School | ||||||
District #1 Series A 5.125% 6/15/21-11 (FSA) | 1,000,000 | 1,086,470 | ||||
Deschutes County, Oregon Hospital Facilities Authority | ||||||
Hospital Revenue (Cascade Health Services) | ||||||
5.60% 1/1/32-12 | 1,250,000 | 1,387,913 |
14
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% 2/15/33-14 | $ | 5,000,000 | $ | 5,703,150 | ||
Florida State Board of Education (Lottery Revenue) | ||||||
Series A 6.00% 7/1/14-10 (FGIC) | 1,000,000 | 1,077,510 | ||||
Golden State, California Tobacco Securitization | ||||||
Corporation Settlement Revenue Series B | ||||||
5.50% 6/1/43-13 | 9,000,000 | 10,149,749 | ||||
5.625% 6/1/38-13 | 7,500,000 | 8,495,999 | ||||
Henrico County, Virginia Economic Development | ||||||
Authority Revenue (Bon Secours Health System) | ||||||
Series A 5.60% 11/15/30-11 | 130,000 | 148,308 | ||||
Highlands County, Florida Health Facilities Authority | ||||||
(Adventist Health System/Sunbelt) Series A | ||||||
6.00% 11/15/31-11 | 1,500,000 | 1,661,955 | ||||
Illinois Educational Facilities Authority Student Housing | ||||||
Revenue (Educational Advancement Fund - University | ||||||
Center Project) 6.25% 5/1/30-12 | 5,000,000 | 5,755,700 | ||||
Jackson, Ohio Local School District (Stark & Summit | ||||||
Counties) School Facilities Construction & | ||||||
Improvement 5.625% 12/1/25-10 (FSA) | 1,000,000 | 1,078,890 | ||||
Jackson, Oregon School District #6 Central Point | ||||||
5.25% 6/15/20-10 (FGIC) | 1,175,000 | 1,241,059 | ||||
Lee County, Florida Airport Revenue Series B | ||||||
5.75% 10/1/33-10 (FSA) | 3,000,000 | 3,249,090 | ||||
Linn County, Oregon Community School District #9 | ||||||
Lebanon 5.60% 6/15/30-13 (FGIC) | 2,000,000 | 2,314,580 | ||||
Louisiana Public Facilities Authority Revenue (Ochsner | ||||||
Clinic Foundation Project) Series B 5.50% 5/15/32-26 | 1,500,000 | 1,669,680 | ||||
Maryland State Economic Development Corporation, | ||||||
Student Housing Revenue (University of Maryland | ||||||
College Park Project) 5.625% 6/1/35-13 | 1,125,000 | 1,302,109 | ||||
Massachusetts State Development Finance Agency | ||||||
Revenue (Massachusetts College of Pharmacy Project) | ||||||
Series C 5.75% 7/1/33-13 | 1,500,000 | 1,762,095 | ||||
Miami-Dade County, Florida Educational Facilities | ||||||
Authority (University of Miami) Series A | ||||||
5.00% 4/1/34-14 (AMBAC) | 7,000,000 | 7,961,309 | ||||
5.75% 4/1/29-10 (AMBAC) | 2,000,000 | 2,129,180 |
15
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
§Pre-Refunded Bonds (continued) | ||||||
Milledgeville-Baldwin County, Georgia Development | ||||||
Authority Revenue (Georgia College & State University | ||||||
Foundation Student Housing Project) 6.00% 9/1/33-14 | $ | 1,000,000 | $ | 1,209,190 | ||
Mississippi Development Bank Special Obligation | ||||||
(Madison County Hospital Project) 6.30% 7/1/22-09 | 2,070,000 | 2,152,158 | ||||
New Jersey State Educational Facilities Authority Revenue | ||||||
(Stevens Institute of Technology) Series B | ||||||
5.25% 7/1/24-14 | 2,085,000 | 2,406,778 | ||||
New York City, New York Series J 5.25% 6/1/28-13 | 2,895,000 | 3,323,084 | ||||
North Carolina Medical Care Commission Hospital | ||||||
Revenue (Northeast Medical Center Project) | ||||||
5.125% 11/1/34-14 | 1,250,000 | 1,445,413 | ||||
Orange County, Florida Health Facilities Authority Revenue | ||||||
(Adventist Health System) 5.625% 11/15/32-12 | 1,000,000 | 1,121,800 | ||||
Orlando, Florida Utilities Commission Water & Electric | ||||||
Revenue 5.25% 10/1/20-11 | 1,575,000 | 1,738,800 | ||||
Osceola County, Florida School Board Certificates of | ||||||
Participation Series A 5.25% 6/1/27-12 (AMBAC) | 4,000,000 | 4,455,880 | ||||
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 | 4,442,320 | ||||
Puerto Rico Commonwealth Highway & | ||||||
Transportation Authority Revenue | ||||||
Series D 5.25% 7/1/38-12 | 3,000,000 | 3,324,600 | ||||
Series G 5.00% 7/1/42-13 | 525,000 | 595,481 | ||||
Series K 5.00% 7/1/35-15 | 3,500,000 | 4,064,900 | ||||
Puerto Rico Commonwealth Public Improvement | ||||||
Revenue Series A 5.125% 7/1/31-11 | 3,495,000 | 3,809,865 | ||||
Puerto Rico Electric Power Authority Revenue | ||||||
Series II 5.25% 7/1/31-12 | 6,000,000 | 6,787,140 | ||||
Series NN 5.125% 7/1/29-13 | 1,400,000 | 1,596,191 | ||||
Puerto Rico Public Buildings Authority Revenue | ||||||
(Guaranteed Government Facilities) Series I | ||||||
5.25% 7/1/33-14 | 175,000 | 197,204 | ||||
Richmond, Virginia Public Utilities Revenue | ||||||
5.00% 1/15/27-12 (FSA) | 10,000,000 | 10,969,899 | ||||
South Broward, Florida Hospital District Revenue | ||||||
(Memorial Health Care System) 5.625% 5/1/32-12 | 3,000,000 | 3,402,630 |
16
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
§Pre-Refunded Bonds (continued) | ||||||
South Miami, Florida Health Facilities Authority Hospital | ||||||
Revenue (Baptist Health South Florida Group) | ||||||
5.25% 11/15/33-13 | $ | 4,000,000 | $ | 4,484,640 | ||
St. Louis, Missouri Airport Revenue (Capital Improvement | ||||||
Project) Series A 5.375% 7/1/21-12 (MBIA) | 1,635,000 | 1,833,767 | ||||
Vancouver, Washington Limited Tax | ||||||
5.50% 12/1/25-10 (AMBAC) | 1,250,000 | 1,345,438 | ||||
Wisconsin Housing & Economic Developing Authority | ||||||
Revenue 6.10% 6/1/21-17 (FHA) | 730,000 | 875,453 | ||||
130,283,303 | ||||||
Special Tax Bonds – 7.66% | ||||||
Belleville, Illinois Tax Increment Revenue | ||||||
(Frank Scott Parkway) Series A 5.70% 5/1/36 | 1,350,000 | 871,857 | ||||
Dallas, Texas Area Rapid Transition Sales Tax Revenue | ||||||
Senior Lien 5.25% 12/1/38 | 4,000,000 | 4,066,880 | ||||
Florida Enterprise Community Development District | ||||||
Special Assessment 6.10% 5/1/16 (MBIA) | 695,000 | 697,252 | ||||
Henderson, Nevada Local Improvement Districts #T-18 | ||||||
5.30% 9/1/35 | 2,315,000 | 834,789 | ||||
Hollywood, Florida Community Redevelopment Agency | ||||||
Revenue (Beach CRA) 5.625% 3/1/24 | 1,200,000 | 975,576 | ||||
Jackson County, Missouri Special Obligation | ||||||
5.00% 12/1/27 (MBIA) | 1,000,000 | 1,007,080 | ||||
Jacksonville, Florida Excise Taxes Revenue | ||||||
Series B 5.00% 10/1/26 (AMBAC) | 1,000,000 | 947,270 | ||||
Lammersville, California School District Community | ||||||
Facilities District #2002 (Mountain House) | ||||||
5.125% 9/1/35 | 4,125,000 | 2,659,676 | ||||
�� Michigan Municipal Bond Authority Revenue (State Clean | ||||||
Water Revolving Foundation) 5.00% 10/1/14 | 3,000,000 | 3,393,420 | ||||
Middlesex County, New Jersey Improvement | ||||||
Authority Senior Revenue (Heldrich Center Hotel/ | ||||||
Conference Project) Series A | ||||||
5.00% 1/1/32 | 1,500,000 | 765,990 | ||||
5.125% 1/1/37 | 1,500,000 | 748,980 | ||||
Missouri State Development Finance Board Infrastructure | ||||||
Facilities Revenue (Crackerneck Creek Project) | ||||||
Series C 5.00% 3/1/26 | 500,000 | 461,430 |
17
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 | $ | 719,110 | ||
5.75% 6/15/34 | 1,935,000 | 1,411,428 | ||||
New York City, New York Transitional Finance Authority | ||||||
Series D 5.00% 2/1/31 | 5,000,000 | 4,960,350 | ||||
New York Sales Tax Asset Receivables Series A | ||||||
5.25% 10/15/27 (AMBAC) | 1,000,000 | 1,035,890 | ||||
New York State Dormitory Authority State Personal | ||||||
Income Tax Revenue | ||||||
Series A 5.00% 3/15/38 | 4,545,000 | 4,429,330 | ||||
Series B 5.25% 3/15/38 | 6,000,000 | 6,088,800 | ||||
New York State Urban Development Corporation Revenue | ||||||
State Personal Income Tax Series B-1 5.00% 3/15/36 | 4,500,000 | 4,408,380 | ||||
Tampa, Florida Sports Authority Revenue Sales Tax | ||||||
(Tampa Bay Arena Project) 5.75% 10/1/20 (MBIA) | 1,000,000 | 1,108,290 | ||||
41,591,778 | ||||||
State General Obligation Bonds – 9.20% | ||||||
California State | ||||||
5.00% 11/1/21 | 2,250,000 | 2,259,743 | ||||
5.00% 2/1/26 (AMBAC) | 5,570,000 | 5,420,947 | ||||
Connecticut State Series B 5.00% 4/15/20 | 7,000,000 | 7,840,070 | ||||
Maryland State & Local Facilities Land Capital Improvement | ||||||
Second Series 5.00% 8/1/16 | 4,000,000 | 4,657,200 | ||||
Series A 5.00% 3/1/12 | 3,000,000 | 3,309,600 | ||||
Massachusetts State Series A 5.00% 9/1/32 | 8,500,000 | 8,538,250 | ||||
Puerto Rico Commonwealth Public Improvement Series A | ||||||
5.125% 7/1/31 | 7,880,000 | 6,546,940 | ||||
5.25% 7/1/23 | 500,000 | 446,505 | ||||
5.50% 7/1/19 (MBIA) | 11,500,000 | 10,933,050 | ||||
49,952,305 | ||||||
Transportation Revenue Bonds – 7.13% | ||||||
Branson, Missouri Regional Airport Transportation | ||||||
Development District Revenue (Branson Airport | ||||||
Project) Series B 6.00% 7/1/37 (AMT) | 1,500,000 | 922,605 | ||||
Capital Trust Agency Florida Revenue | ||||||
(Fort Lauderdale/Cargo Acquisition Project) | ||||||
5.75% 1/1/32 (AMT) | 3,750,000 | 2,461,838 | ||||
(Orlando/Cargo Acquisition Project) | ||||||
�� 6.75% 1/1/32 (AMT) | 2,395,000 | 1,753,643 |
18
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Transportation Revenue Bonds (continued) | ||||||
Dallas-Fort Worth, Texas International Airport Revenue | ||||||
Series A 5.50% 11/1/31 (FGIC) (AMT) | $ | 1,500,000 | $ | 1,376,325 | ||
Grapevine, Texas Industrial Development Corporate | ||||||
Revenue (Air Cargo) 6.50% 1/1/24 (AMT) | 910,000 | 713,677 | ||||
Houston, Texas Industrial Development Corporate | ||||||
Revenue (Air Cargo) 6.375% 1/1/23 (AMT) | 1,995,000 | 1,559,751 | ||||
Metropolitan, New York Transportation Authority Revenue | ||||||
Series A 5.00% 11/15/18 | 5,300,000 | 5,593,514 | ||||
Missouri State Highways & Transportation Commission | ||||||
State Refunded Revenue (First Lien) | ||||||
Series B 5.00% 5/1/24 | 9,000,000 | 9,460,439 | ||||
New York State Thruway Authority General Revenue | ||||||
Series H 5.00% 1/1/19 (MBIA) | 6,240,000 | 6,763,536 | ||||
North Texas Tollway Authority Revenue (First Tier) | ||||||
Series A 6.00% 1/1/24 | 3,345,000 | 3,482,011 | ||||
·Series E-3 5.75% 1/1/38 | 4,320,000 | 4,452,538 | ||||
Puerto Rico Commonwealth Highway & Transportation | ||||||
Authority Revenue Series G 5.00% 7/1/42 | 275,000 | 212,209 | ||||
38,752,086 | ||||||
Water & Sewer Revenue Bonds – 2.89% | ||||||
Florida Village Center Community Development District | ||||||
Utility Revenue 5.00% 10/1/36 (MBIA) | 265,000 | 223,822 | ||||
Florida Water Pollution Control Financing Corporation | ||||||
Revenue (Water Pollution Control) | ||||||
Series A 5.00% 1/15/29 | 2,000,000 | 1,994,900 | ||||
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 | 1,063,816 | ||||
New York City, New York Municipal Water Finance | ||||||
Authority Water & Sewer System Revenue | ||||||
Fiscal 2009 Series A 5.75% 6/15/40 | 4,000,000 | 4,271,239 | ||||
Series A 5.25% 6/15/34 | 3,705,000 | 3,720,265 | ||||
Tampa, Florida Water and Sewer Revenue | ||||||
6.00% 10/1/16 (FSA) | 1,000,000 | 1,181,280 | ||||
Virgin Islands Water & Power Authority Water System | ||||||
Revenue 5.50% 7/1/17 | 510,000 | 469,628 |
19
Statements of net assets
Delaware Tax-Free USA Fund
Principal amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Water & Sewer Revenue Bonds (continued) | ||||||||
West Virginia State Water Development Authority Revenue | ||||||||
(Loan Program III) Series A 6.375% 7/1/39 (AMBAC) (AMT) | $ | 2,890,000 | $ | 2,786,596 | ||||
15,711,546 | ||||||||
Total Municipal Bonds (cost $544,248,120) | 530,761,542 | |||||||
Short-Term Investment – 0.74% | ||||||||
·Variable Rate Demand Note – 0.74% | ||||||||
Trimble County, Kentucky Association of Counties Leasing | ||||||||
Trust Lease Program Revenue Series A 0.60% 12/1/38 | 4,000,000 | 4,000,000 | ||||||
Total Short-Term Investment (cost $4,000,000) | 4,000,000 | |||||||
Total Value of Securities – 98.46% | ||||||||
(cost $548,248,120) | 534,761,542 | |||||||
Receivables and Other Assets | ||||||||
Net of Liabilities – 1.54% | 8,369,626 | |||||||
Net Assets Applicable to 52,411,481 | ||||||||
Shares Outstanding – 100.00% | $ | 543,131,168 | ||||||
Net Asset Value – Delaware Tax-Free USA Fund | ||||||||
Class A ($515,449,586 / 49,740,235 Shares) | $10.36 | |||||||
Net Asset Value – Delaware Tax-Free USA Fund | ||||||||
Class B ($9,523,108 / 919,425 Shares) | $10.36 | |||||||
Net Asset Value – Delaware Tax-Free USA Fund | ||||||||
Class C ($18,157,410 / 1,751,718 Shares) | $10.37 | |||||||
Net Asset Value – Delaware Tax-Free USA Fund | ||||||||
Institutional Class ($1,064 / 102.7 Shares) | $10.36 | |||||||
Components of Net Assets at February 28, 2009: | ||||||||
Shares of beneficial interest (unlimited authorization – no par) | $ | 573,655,709 | ||||||
Undistributed net investment income | 2,110 | |||||||
Accumulated net realized loss on investments | (17,040,073 | ) | ||||||
Net unrealized depreciation of investments | (13,486,578 | ) | ||||||
Total net assets | $ | 543,131,168 |
20
W | 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. | |
§ | 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 8 in “Notes to financial statements.” | |
· | Variable rate security. The rate shown is the rate as of February 28, 2009. | |
@ | Illiquid security. At February 28, 2009, the aggregate amount of illiquid securities was $857,640, which represented 0.16% of the Fund’s net assets. See Note 8 in “Notes to financial statements.” | |
^ | Zero coupon security. The rate shown is the yield at the time of purchase. |
Summary of abbreviations:
ACA — Insured by the 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 — Federal National Mortgage Association collateral
FSA — Insured by Financial Security Assurance
GNMA — Government National Mortgage Association collateral
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
Net Asset Value and Offering Price Per Share – | ||
Delaware Tax-Free USA Fund | ||
Net asset value Class A (A) | $ | 10.36 |
Sales charge (4.50% of offering price) (B) | 0.49 | |
Offering price | $ | 10.85 |
(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
21
Statements of net assets | |
Delaware Tax-Free USA Intermediate Fund | February 28, 2009 (Unaudited) |
Principal amount | Value | |||||
Municipal Bonds – 97.80% | ||||||
Corporate Revenue Bonds – 3.30% | ||||||
Alliance Airport Authority, Texas Special Facilities Revenue | ||||||
(Federal Express Corp. Project) 4.85% 4/1/21 (AMT) | $ | 2,000,000 | $ | 1,516,660 | ||
·Brazos, Texas Harbor Industrial Development Environmental | ||||||
Facilities Revenue (Dow Chemical Co. Project) | ||||||
5.90% 5/1/38 (AMT) | 1,010,000 | 676,498 | ||||
Brazos, Texas River Authority Pollution Control Revenue | ||||||
(Texas Utilities) 5.40% 5/1/29 (AMT) | 1,000,000 | 432,580 | ||||
·Chesapeake, Virginia Economic Development Authority | ||||||
Pollution Control Revenue (Electric & Power Co. Project) | ||||||
Series A 3.60% 2/1/32 | 1,150,000 | 1,136,534 | ||||
·Forsyth, Montana Pollution Control Revenue | ||||||
(Portland General Project) Series A 5.20% 5/1/33 | 1,005,000 | 1,005,201 | ||||
Indianapolis, Indiana Airport Authority Revenue Special | ||||||
Facilities (Federal Express Corp. Project) | ||||||
5.10% 1/15/17 (AMT) | 750,000 | 632,933 | ||||
Iowa Finance Authority Pollution Control Facilities | ||||||
Revenue (Interstate Power) 5.00% 7/1/14 (FGIC) | 2,000,000 | 2,033,619 | ||||
Memphis-Shelby County, Tennessee Airport Authority | ||||||
Special Facilities Revenue (Federal Express Corp. | ||||||
Project) 5.05% 9/1/12 | 1,000,000 | 999,580 | ||||
·Mobile, Alabama Industrial Development Board Pollution | ||||||
Control Revenue (Alabama Power Co.) | ||||||
Series B 4.875% 6/1/34 | 2,840,000 | 2,946,897 | ||||
Ohio State Air Quality Development Authority Revenue | ||||||
Environmental Improvement (USX Project) | ||||||
5.00% 11/1/15 | 1,000,000 | 970,650 | ||||
Prattville, Alabama Industrial Development Board | ||||||
Environmental Improvement Revenue (International | ||||||
Paper Co. Project) Series A 6.70% 3/1/24 (AMT) | 1,000,000 | 764,610 | ||||
·Sabine, Texas River Authority Pollution Control Revenue | ||||||
(TXU Electric Co. Project) Series A 5.50% 5/1/22 | 1,000,000 | 682,580 | ||||
Sugar Creek, Missouri Industrial Development | ||||||
Revenue (Lafarge North America Project) | ||||||
Series A 5.65% 6/1/37 (AMT) | 500,000 | 317,865 | ||||
Toledo, Lucas County, Ohio Port Authority | ||||||
Development Revenue (Northwest Ohio Bond Fund - | ||||||
Alex Products Inc.) Series B 6.125% 11/15/09 (AMT) | 290,000 | 291,694 | ||||
14,407,901 |
22
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Education Revenue Bonds – 6.50% | ||||||
California Municipal Finance Authority Educational Revenue | ||||||
(American Heritage Education Foundation Project) | ||||||
Series A 5.25% 6/1/26 | $ | 1,000,000 | $ | 712,270 | ||
California Statewide Communities Development | ||||||
Authority Student Housing Revenue | ||||||
(Irvine, LLC - UCI East Campus) 6.00% 5/15/23 | 3,150,000 | 2,837,363 | ||||
Chattanooga, Tennessee Health Educational & Housing | ||||||
Facilities Board Revenue (CDFI Phase I, LLC Project) | ||||||
Series B 5.50% 10/1/20 | 1,095,000 | 869,036 | ||||
Fulton County, Georgia Development Authority Revenue | ||||||
(Molecular Science Building Project) | ||||||
5.25% 5/1/21 (MBIA) | 1,000,000 | 1,054,770 | ||||
Grand Traverse, Michigan Public School Academy | ||||||
Revenue 5.00% 11/1/36 | 900,000 | 525,708 | ||||
Marietta, Georgia Development Authority Revenue | ||||||
(Life University Income Project) 6.25% 6/15/20 | 1,180,000 | 911,078 | ||||
Massachusetts State Health & Educational Facilities | ||||||
Authority Revenue (Nichols College Project) | ||||||
Series C 6.125% 10/1/29 | 1,000,000 | 782,460 | ||||
Michigan Higher Education Facilities Authority Revenue | ||||||
(Kalamazoo College Project) 5.50% 12/1/19 | 500,000 | 514,765 | ||||
New York State Dormitory Authority Revenue | ||||||
(Brooklyn Law School) Series A 5.50% 7/1/18 (RADIAN) | 1,000,000 | 960,750 | ||||
Ohio State Higher Educational Facility Revenue | ||||||
(John Carroll University) 5.50% 11/15/18 | 335,000 | 352,192 | ||||
·(Kenyon College Project) 4.70% 7/1/37 | 1,000,000 | 1,034,870 | ||||
Ohio State University General Receipts Revenue | ||||||
Series B 5.25% 6/1/21 | 1,000,000 | 1,056,090 | ||||
Pennsylvania State Higher Educational Facilities Authority | ||||||
Revenue (University of Pennsylvania) | ||||||
Series A 5.00% 9/1/19 | 4,120,000 | 4,580,903 | ||||
Texas A & M University Revenue Financing System | ||||||
5.00% 5/15/12 | 3,655,000 | 4,016,187 | ||||
5.00% 5/15/13 | 3,760,000 | 4,189,655 | ||||
University of California Revenue | ||||||
Series A 5.125% 5/15/20 (AMBAC) | 250,000 | 261,233 | ||||
University of Oklahoma Research Facilities Revenue | ||||||
5.00% 3/1/23 (AMBAC) | 1,065,000 | 1,073,648 |
23
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Education Revenue Bonds (continued) | ||||||
University of Virginia General Revenue Series B | ||||||
5.00% 6/1/20 | $ | 1,250,000 | $ | 1,329,313 | ||
5.00% 6/1/21 | 1,250,000 | 1,319,550 | ||||
28,381,841 | ||||||
Electric Revenue Bonds – 2.56% | ||||||
·Burke County, Georgia Development Authority Pollution | ||||||
Control Revenue (Oglethorpe Power) | ||||||
Series C-2 4.625% 1/1/37 (AMBAC) | 3,320,000 | 3,373,817 | ||||
Metropolitan Government Nashville & Davidson County, | ||||||
Tennessee Electric Revenue Series B 5.50% 5/15/14 | 1,000,000 | 1,144,670 | ||||
Orlando, Florida Utilities Commission Water & | ||||||
Electric Revenue 5.25% 10/1/20 | 555,000 | 587,534 | ||||
Platte River, Colorado Power Authority Revenue | ||||||
Series HH 5.00% 6/1/26 | 2,000,000 | 2,060,740 | ||||
Rochester, Minnesota Electric Utilities Revenue | ||||||
Series C 5.00% 12/1/18 (MBIA) | 2,000,000 | 2,217,880 | ||||
South Carolina State Public Service Authority Revenue | ||||||
Refunding Series A 5.125% 1/1/21 (FSA) | 1,000,000 | 1,039,150 | ||||
Texas Municipal Power Agency Revenue | ||||||
4.00% 9/1/11 (AMBAC) | 750,000 | 751,080 | ||||
11,174,871 | ||||||
Escrowed to Maturity Bonds – 0.05% | ||||||
Southcentral, Pennsylvania General Authority Revenue | ||||||
(Wellspan Health Obligated Project) 5.625% 5/15/26 | 180,000 | 196,909 | ||||
196,909 | ||||||
Health Care Revenue Bonds – 8.13% | ||||||
Allegheny County, Pennsylvania Hospital Development | ||||||
Authority Revenue (University of Pittsburgh Medical | ||||||
Center) Series A 5.00% 9/1/14 | 4,000,000 | 4,215,280 | ||||
Chatham County, Georgia Hospital Authority Revenue | ||||||
(Memorial Health Medical Center) | ||||||
Series A 6.125% 1/1/24 | 905,000 | 734,996 | ||||
@Cleveland-Cuyahoga County, Ohio Port Authority | ||||||
Revenue (Saint Clarence - Geac) Series A | ||||||
6.125% 5/1/26 | 715,000 | 462,798 | ||||
Cuyahoga County, Ohio Revenue (Cleveland Clinic Health | ||||||
System) Series A 6.00% 1/1/21 | 1,000,000 | 1,028,330 | ||||
Georgia Medical Center Hospital Authority Revenue | ||||||
(Spring Harbor Green Island Project) 5.25% 7/1/37 | 2,300,000 | 1,312,380 |
24
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Health Care Revenue Bonds (continued) | ||||||
· | Highlands County, Florida Health Facilities Authority | |||||
Revenue (Adventist Health) Series I 5.00% 11/15/29 | $ | 2,000,000 | $ | 2,051,980 | ||
Maryland State Health & Higher Education Facilities | ||||||
Authority Revenue | ||||||
·(John Hopkins Health Systems) 5.00% 5/15/46 | 790,000 | 847,607 | ||||
(Union Hospital of Cecil County) 5.625% 7/1/32 | 500,000 | 454,160 | ||||
Massachusetts State Health & Educational Facilities | ||||||
Authority Revenue (Caregroup) | ||||||
Series E-2 5.375% 7/1/21 | 1,970,000 | 1,836,690 | ||||
Michigan State Hospital Finance Authority Revenue | ||||||
(Oakwood Obligation Group) 5.50% 11/1/14 | 2,230,000 | 2,241,217 | ||||
Minneapolis, Minnesota Health Care System Revenue | ||||||
(Fairview Health Services) Series A 6.375% 11/15/23 | 3,710,000 | 3,981,795 | ||||
New Hampshire Health & Education Facilities Authority | ||||||
Revenue (Elliot Hospital) Series B 5.60% 10/1/22 | 1,000,000 | 994,770 | ||||
New York State Dormitory Authority Revenue | ||||||
(Non State Supported Debt - Orange Regional | ||||||
Medical Center) 6.50% 12/1/21 | 2,000,000 | 1,713,260 | ||||
North Carolina Medical Care Commission Health | ||||||
Care Facilities Revenue (First Mortgage - | ||||||
Presbyterian Homes) 5.40% 10/1/27 | 780,000 | 589,384 | ||||
Ohio State Higher Educational Facilities Commission | ||||||
Revenue (Cleveland Clinic Health System | ||||||
Obligation Group) Series A | ||||||
5.00% 1/1/17 | 2,000,000 | 2,144,560 | ||||
5.00% 1/1/18 | 1,000,000 | 1,065,390 | ||||
Scottsdale, Arizona Industrial Development Authority | ||||||
Hospital Revenue (Scottsdale Healthcare) | ||||||
Series A 5.00% 9/1/19 | 3,065,000 | 2,961,648 | ||||
Shelby County, Tennessee Health Educational & Housing | ||||||
Facilities Board Revenue (Trezevant Manor Project) | ||||||
Series A 5.75% 9/1/37 | 560,000 | 350,722 | ||||
St. Louis Park, Minnesota Health Care Facilities Revenue | ||||||
Refunding (Nicollet Health Services) | ||||||
Series C 5.50% 7/1/18 | 4,240,000 | 4,467,645 | ||||
St. Mary Hospital Authority Pennsylvania Health | ||||||
System Revenue (Catholic Health East) Series A | ||||||
5.25% 11/15/16 | 1,200,000 | 1,226,928 |
25
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Health Care Revenue Bonds (continued) | ||||||
St. Paul, Minnesota Housing & Redevelopment | ||||||
Authority Hospital Revenue (Health East Project) | ||||||
6.00% 11/15/25 | $ | 1,000,000 | $ | 801,960 | ||
35,483,500 | ||||||
Housing Revenue Bonds – 1.63% | ||||||
California Housing Finance Agency Revenue (Home | ||||||
Mortgage) Series M 5.95% 8/1/25 (AMT) | 2,700,000 | 2,572,182 | ||||
Puerto Rico Housing Finance Authority Subordinate | ||||||
(Capital Fund Modernization) 5.50% 12/1/16 | 4,120,000 | 4,554,042 | ||||
7,126,224 | ||||||
Lease Revenue Bonds – 3.27% | ||||||
Golden State, California Tobacco Securitization Corporation | ||||||
Settlement Revenue Refunding Asset-Backed Series A | ||||||
5.00% 6/1/18 | 1,170,000 | 1,121,340 | ||||
5.00% 6/1/21 (AMBAC) | 1,000,000 | 927,920 | ||||
Michigan State Building Authority Revenue Series I | ||||||
5.00% 10/15/09 (FSA) | 1,000,000 | 1,023,210 | ||||
5.00% 10/15/24 | 3,000,000 | 2,974,140 | ||||
5.50% 10/15/18 | 2,175,000 | 2,321,573 | ||||
New York State Municipal Bond Bank Agency Special | ||||||
School Purpose Revenue Series C 5.25% 6/1/22 | 1,000,000 | 1,011,130 | ||||
· | Puerto Rico Public Buildings Authority Revenue | |||||
(Guaranteed Government Facilities) | ||||||
Series J 5.00% 7/1/28 | 1,000,000 | 969,580 | ||||
· | Puerto Rico Public Finance Corporate Revenue | |||||
Series A 5.25% 8/1/29 (MBIA) | 620,000 | 603,179 | ||||
Tobacco Settlement Financing New York Revenue | ||||||
(Asset-Backed) Series B 5.00% 6/1/12 | 2,060,000 | 2,173,465 | ||||
Virginia College Building Authority, Virginia Educational | ||||||
Facilities Revenue (Public Financing Higher Education | ||||||
Program) Series A 5.00% 9/1/13 | 1,000,000 | 1,130,170 | ||||
14,255,707 | ||||||
Local General Obligation Bonds – 11.46% | ||||||
Chandler, Arizona 5.00% 7/1/21 | 4,000,000 | 4,389,240 | ||||
Chicago, Illinois Board of Education Refunding Dedicated | ||||||
Revenue Series B 5.00% 12/1/23 (AMBAC) | 3,500,000 | 3,536,855 | ||||
Chicago, Illinois Modern Schools Across Chicago | ||||||
Series J 5.00% 12/1/23 (AMBAC) | 2,865,000 | 2,924,248 |
26
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Local General Obligation Bonds (continued) | ||||||
Chicago, Illinois Project & Refunding | ||||||
Series C 5.50% 1/1/40 (FGIC) | $ | 2,940,000 | $ | 2,944,880 | ||
Dallas, Texas 5.125% 2/15/15 | 3,000,000 | 3,431,640 | ||||
Fairfax County, Virginia Refunding & | ||||||
Public Improvement 5.25% 4/1/14 | 3,500,000 | 4,021,745 | ||||
Gwinnett County, Georgia School District | ||||||
5.00% 2/1/11 | 3,000,000 | 3,216,150 | ||||
5.00% 2/1/21 | 2,175,000 | 2,413,380 | ||||
Idaho Bond Bank Authority Revenue | ||||||
Series A 5.25% 9/15/26 | 690,000 | 721,395 | ||||
Lansing, Michigan Community College | ||||||
(College Building and Site) 5.00% 5/1/21 (MBIA) | 1,325,000 | 1,374,409 | ||||
Licking County, Ohio Joint Vocational School District | ||||||
School Facilities Construction and Improvement | ||||||
5.00% 12/1/19 (MBIA) | 1,000,000 | 1,068,020 | ||||
Los Angeles, California Unified School District | ||||||
Election 2004 Series G | ||||||
5.00% 7/1/13 (AMBAC) | 2,000,000 | 2,219,360 | ||||
5.00% 7/1/31 (AMBAC) | 3,955,000 | 3,840,740 | ||||
Mecklenburg County, North Carolina Refunding | ||||||
Series A 5.00% 8/1/17 | 6,000,000 | 7,004,341 | ||||
Middlesex County, New Jersey Improvement Authority | ||||||
Revenue (County Guaranteed Open Space Trust) | ||||||
5.25% 9/15/20 | 1,000,000 | 1,094,700 | ||||
New York City, New York | ||||||
Series A-1 5.00% 8/1/19 | 3,500,000 | 3,629,465 | ||||
Series G 5.25% 8/1/15 | 1,000,000 | 1,065,640 | ||||
Series I 5.00% 8/1/21 | 1,000,000 | 1,007,660 | ||||
Series J 5.50% 6/1/23 | 100,000 | 101,690 | ||||
50,005,558 | ||||||
§Pre-Refunded Bonds – 9.32% | ||||||
Arizona State Transportation Board Highway Revenue | ||||||
6.25% 7/1/16-09 | 1,850,000 | 1,886,260 | ||||
Benton & Linn Counties, Oregon School District #509J | ||||||
5.00% 6/1/21-13 (FSA) | 1,000,000 | 1,131,020 | ||||
California State | ||||||
5.00% 2/1/33-14 (MBIA) | 1,800,000 | 2,061,558 | ||||
5.25% 2/1/30-12 (MBIA) | 5,000 | 5,546 |
27
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
§Pre-Refunded Bonds (continued) | ||||||
Cook County, Illinois Series A 5.375% 11/15/21-11 (FGIC) | $ | 2,160,000 | $ | 2,349,734 | ||
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 | 1,140,630 | ||||
5.50% 2/15/23-14 | 1,000,000 | 1,152,310 | ||||
Forest Grove, Oregon Revenue Campus | ||||||
(Pacific University) 6.30% 5/1/25-10 (RADIAN) | 1,000,000 | 1,064,440 | ||||
Illinois Educational Facilities Authority Student | ||||||
Housing Revenue (Educational Advancement - | ||||||
University Center Project) 6.00% 5/1/22-12 | 750,000 | 857,573 | ||||
Lancaster County, Pennsylvania Hospital Authority | ||||||
Revenue (Lancaster General Hospital Project) | ||||||
5.75% 3/15/21-13 | 1,000,000 | 1,155,610 | ||||
Lunenburg County, Virginia Series B 5.25% 2/1/29-13 (MBIA) | 715,000 | 816,408 | ||||
Miami-Dade County, Florida Educational Facilities | ||||||
Authority Revenue (University of Miami) | ||||||
Series A 5.00% 4/1/34-14 (AMBAC) | 3,500,000 | 3,980,655 | ||||
Minneapolis, Minnesota Health Care System Revenue | ||||||
(Allina Health Systems) Series A 5.75% 11/15/32-12 | 500,000 | 572,720 | ||||
New Jersey State Educational Facilities Authority | ||||||
Revenue (Georgian Court College Project) | ||||||
Series C 6.50% 7/1/33-13 | 500,000 | 597,880 | ||||
New York City, New York Series J 5.50% 6/1/23-13 | 900,000 | 1,042,308 | ||||
North Texas Health Facilities Development Corporation | ||||||
Hospital Revenue (United Regional Health Care | ||||||
System, Inc. Project) 6.00% 9/1/23-13 | 1,000,000 | 1,162,430 | ||||
Ohio State Higher Education Capital Facilities | ||||||
Series B 5.625% 5/1/14-10 | 5,780,000 | 6,108,246 | ||||
Orlando, Florida Utilities Commission Water & Electric | ||||||
Revenue 5.25% 10/1/20-11 | 945,000 | 1,043,280 | ||||
Pennsylvania State First Series 5.125% 1/15/19-11 | 3,515,000 | 3,802,527 | ||||
Pennsylvania State Higher Educational Facilities Authority | ||||||
College & University Revenue (Geneva College Project) | ||||||
6.125% 4/1/22-12 | 1,000,000 | 1,133,310 | ||||
Puerto Rico Commonwealth Highway & Transportation | ||||||
Authority Revenue Series J 5.50% 7/1/21-14 | 1,000,000 | 1,150,530 |
28
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
§Pre-Refunded Bonds (continued) | ||||||
Puerto Rico Public Buildings Authority Revenue | ||||||
(Guaranteed Government Facilities) | ||||||
Series I 5.50% 7/1/23-14 | $ | 2,000,000 | $ | 2,278,480 | ||
Southcentral, Pennsylvania General Authority | ||||||
Revenue (Welllspan Health Obligated Project) | ||||||
5.625% 5/15/26-11 | 820,000 | 902,927 | ||||
University of North Carolina Revenue (Chapel Hill) | ||||||
Series A 5.375% 12/1/14-11 | 2,000,000 | 2,180,080 | ||||
Virginia State Resource Authority Clean Water Revenue | ||||||
(State Revolving Fund) 6.00% 10/1/16-10 | 1,000,000 | 1,077,970 | ||||
40,654,432 | ||||||
Resource Recovery Bonds – 0.25% | ||||||
Pennsylvania Economic Development Financing | ||||||
Authority Resource Recovery Revenue | ||||||
(Subordinate Colver Project) | ||||||
Series G 5.125% 12/1/15 (AMT) | 1,400,000 | 1,112,734 | ||||
1,112,734 | ||||||
Special Tax Bonds – 8.57% | ||||||
Baltimore, Maryland Convention Center Hotel Revenue | ||||||
Subordinated Series B 5.00% 9/1/16 | 1,200,000 | 919,224 | ||||
California State Economic Recovery | ||||||
Series A 5.25% 7/1/14 | 1,000,000 | 1,087,630 | ||||
·Series B 5.00% 7/1/23 | 3,365,000 | 3,539,576 | ||||
Casa Grande, Arizona Excise Tax Revenue | ||||||
5.00% 4/1/22 (AMBAC) | 1,600,000 | 1,643,328 | ||||
Columbia County, Georgia Sales Tax | ||||||
4.00% 4/1/14 | 1,000,000 | 1,075,780 | ||||
5.00% 4/1/15 | 1,250,000 | 1,416,163 | ||||
5.00% 4/1/16 | 1,265,000 | 1,438,988 | ||||
5.00% 4/1/17 | 315,000 | 359,361 | ||||
Dallas, Texas Civic Center Convention Complex Revenue | ||||||
Refunding & Improvement 4.875% 8/15/23 (MBIA) | 1,500,000 | 1,520,010 | ||||
East Homestead Community Development District, Florida | ||||||
Special Assessment Revenue Series B 5.00% 5/1/11 | 365,000 | 264,672 | ||||
Hampton, Virginia Convention Center Revenue | ||||||
5.25% 1/15/23 (AMBAC) | 1,000,000 | 1,022,470 | ||||
Metropolitan Pier and Exposition Authority, Illinois | ||||||
Dedicate State Tax Revenue (McCormick Place | ||||||
Expansion Project) Series A 5.50% 12/15/24 (FGIC) | 2,000,000 | 2,057,540 |
29
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Special Tax Bonds (continued) | ||||||
Middlesex County, New Jersey Improvement Authority | ||||||
Senior Revenue (Heldrich Center Hotel/Conference | ||||||
Project) Series A 5.00% 1/1/32 | $ | 1,000,000 | $ | 510,660 | ||
Modesto, California Special Tax Community Facilities | ||||||
District #04-1 (Village 2) 5.15% 9/1/36 | 1,500,000 | 955,935 | ||||
New Jersey Economic Development Authority | ||||||
(Cigarette Tax) | ||||||
5.50% 6/15/31 | 1,000,000 | 719,110 | ||||
5.625% 6/15/18 | 1,000,000 | 878,370 | ||||
· | New York City, New York Transitional Finance Authority | |||||
Revenue Refunding - Future Tax Secured | ||||||
Series A 5.50% 11/1/26 | 1,000,000 | 1,058,260 | ||||
New York State Dormitory Authority State Personal | ||||||
Income Tax Revenue Series A 5.00% 3/15/23 | 2,220,000 | 2,333,464 | ||||
New York State Thruway Authority Income Tax Revenue | ||||||
(Transportation) Series A 5.00% 3/15/20 | 1,000,000 | 1,097,860 | ||||
New York State Urban Development Corporation | ||||||
Revenue State Personal Income Tax | ||||||
Series A-1 5.00% 12/15/28 | 4,000,000 | 4,046,080 | ||||
Richmond Heights, Missouri Tax Increment & Transaction | ||||||
Sales Tax Revenue Refunding & Improvement | ||||||
(Francis Place Redevelopment Project) 5.625% 11/1/25 | 1,000,000 | 734,280 | ||||
St. Joseph, Missouri Industrial Development Authority Tax | ||||||
Increment Revenue (Shoppes at North Village Project) | ||||||
Series A 5.10% 11/1/19 | 250,000 | 201,333 | ||||
Series B 5.375% 11/1/23 | 1,000,000 | 748,410 | ||||
Washington State Motor Vehicle Fuel Tax | ||||||
Series B 5.00% 7/1/16 | 4,250,000 | 4,860,597 | ||||
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 | 1,305,090 | ||||
Wyoming State Loan & Investment Board Facilities | ||||||
Revenue 5.00% 10/1/24 | 1,550,000 | 1,590,595 | ||||
37,384,786 | ||||||
State General Obligation Bonds – 23.94% | ||||||
California State 5.25% 11/1/17 | 1,000,000 | 1,054,970 | ||||
California State Refunding | ||||||
5.00% 8/1/14 | 1,025,000 | 1,098,810 | ||||
5.00% 11/1/15 | 1,795,000 | 1,923,414 |
30
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
State General Obligation Bonds (continued) | ||||||
Connecticut State Series C 5.00% 11/1/24 | $ | 2,000,000 | $ | 2,139,180 | ||
Florida State Board Education Capital Outlay Public | ||||||
Education Series D 5.75% 6/1/22 | 2,000,000 | 2,082,660 | ||||
Georgia State | ||||||
5.00% 7/1/11 | 6,865,000 | 7,457,861 | ||||
Series B 5.00% 7/1/17 | 4,810,000 | 5,607,979 | ||||
Series E 5.00% 8/1/12 | 3,125,000 | 3,485,969 | ||||
Illinois State Refunding Series B 5.00% 1/1/13 | 3,475,000 | 3,834,419 | ||||
Maryland State 5.00% 8/1/17 | 1,500,000 | 1,725,315 | ||||
Maryland State & Local Facilities Loan Capital | ||||||
Improvement 5.00% 3/15/19 | 3,675,000 | 4,163,996 | ||||
Massachusetts State Consolidated Loan | ||||||
Series A 5.25% 8/1/13 | 5,000,000 | 5,678,400 | ||||
Series C 5.00% 9/1/10 | 7,750,000 | 8,214,381 | ||||
Minnesota State 5.00% 6/1/14 | 900,000 | 1,025,235 | ||||
Mississippi State Series A 5.00% 10/1/17 | 4,860,000 | 5,585,501 | ||||
North Carolina State Public Improvement Series A | ||||||
5.00% 3/1/12 | 4,000,000 | 4,412,800 | ||||
5.00% 3/1/15 | 1,200,000 | 1,379,256 | ||||
North Carolina State Refunding Series B 5.00% 4/1/15 | 4,000,000 | 4,603,440 | ||||
Ohio State | ||||||
Series A 5.00% 6/15/13 | 3,750,000 | 4,203,638 | ||||
Series D 5.00% 9/15/14 | 3,500,000 | 3,969,980 | ||||
Pennsylvania State 5.50% 2/1/13 | 3,200,000 | 3,622,688 | ||||
Pennsylvania State Second Series A 5.00% 8/1/13 | 4,000,000 | 4,504,200 | ||||
Puerto Rico Commonwealth Public Improvement Series A | ||||||
5.00% 7/1/16 (ASSURED GTY) | 2,110,000 | 2,111,139 | ||||
5.25% 7/1/22 | 3,470,000 | 3,126,713 | ||||
5.25% 7/1/23 | 1,125,000 | 1,004,636 | ||||
5.50% 7/1/17 | 4,415,000 | 4,285,420 | ||||
· | Puerto Rico Commonwealth Series A 5.00% 7/1/30 | 1,000,000 | 960,240 | |||
· | Puerto Rico Public Finance Corporation Commonwealth | |||||
Appropriation (LOC Puerto Rico Government Bank) | ||||||
Series A 5.75% 8/1/27 | 1,000,000 | 986,050 | ||||
Texas State Transportation Commission | ||||||
(Mobility Foundation) 5.00% 4/1/13 | 1,000,000 | 1,115,690 | ||||
Texas State Water Financial Assistance | ||||||
Series B 5.50% 8/1/35 | 3,300,000 | 3,307,326 |
31
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
State General Obligation Bonds (continued) | ||||||
Virginia State Series B 5.00% 6/1/23 | $ | 2,000,000 | $ | 2,164,340 | ||
Washington State Variable Purpose | ||||||
Series A 5.00% 7/1/16 | 1,000,000 | 1,143,670 | ||||
Series B 5.00% 1/1/20 | 2,500,000 | 2,506,675 | ||||
104,485,991 | ||||||
Transportation Revenue Bonds – 11.64% | ||||||
Capital Trust Agency Florida Revenue (Fort Lauderdale/ | ||||||
Cargo Acquisition Project) 5.75% 1/1/32 (AMT) | 1,750,000 | 1,148,858 | ||||
Chicago, Illinois O’Hare International Airport | ||||||
Revenue General-Airport-Third Lien | ||||||
Series A-2 5.75% 1/1/20 (FSA) (AMT) | 1,000,000 | 1,012,540 | ||||
Dallas-Fort Worth, Texas International Airport Revenue | ||||||
Series A 5.00% 11/1/15 (XLCA) (AMT) | 2,000,000 | 2,009,160 | ||||
Georgia Federal Highway Road and Tollway Authority | ||||||
Revenue Bonds 5.00% 6/1/10 (MBIA) | 2,000,000 | 2,103,420 | ||||
Idaho Housing & Finance Association Grant Revenue | ||||||
(Antic Federal Highway Transportation) | ||||||
Series A 5.25% 7/15/21 (ASSURED GTY) | 2,760,000 | 3,055,596 | ||||
Maryland State Transportation Authority Grant & Revenue | ||||||
5.25% 3/1/16 | 1,850,000 | 2,153,863 | ||||
5.25% 3/1/18 | 4,105,000 | 4,812,208 | ||||
Metropolitan, New York Transportation Authority Revenue | ||||||
Series A 5.00% 11/15/18 | 2,500,000 | 2,638,450 | ||||
Series C 6.50% 11/15/28 | 2,860,000 | 3,160,043 | ||||
Metropolitan, Washington D.C. Airport Authority Systems | ||||||
Revenue Series A 5.50% 10/1/19 (FGIC) (AMT) | 1,000,000 | 1,019,510 | ||||
Missouri State Highways & Transportation Commission | ||||||
State Road Revenue Second Lien 5.25% 5/1/19 | 2,935,000 | 3,343,728 | ||||
New York State Thruway Authority Revenue | ||||||
(General Highway and Bridge Trust Fund) | ||||||
Series B 5.25% 4/1/13 (AMBAC) | 3,300,000 | 3,665,277 | ||||
North Texas Tollway Authority Dallas North Tollway | ||||||
System Revenue Series A 5.00% 1/1/20 (FGIC) | 1,750,000 | 1,749,913 | ||||
North Texas Tollway Authority Revenue System (First Tier) | ||||||
Series A 6.00% 1/1/20 | 4,000,000 | 4,297,600 | ||||
·Series E-3 5.75% 1/1/38 | 2,470,000 | 2,545,780 | ||||
Pennsylvania State Turnpike Commission Revenue | ||||||
Series A 5.25% 12/1/20 (AMBAC) | 1,230,000 | 1,331,819 |
32
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Transportation Revenue Bonds (continued) | ||||||
Texas State Transportation Commission Highway Fund | ||||||
Revenue (First Tier) 5.00% 4/1/18 | $ | 1,700,000 | $ | 1,919,232 | ||
Triborough, New York Bridge & Tunnel Authority Revenue | ||||||
Series A 5.00% 11/15/17 | 1,720,000 | 1,955,760 | ||||
·Series B-1 5.00% 11/15/25 | 4,000,000 | 4,384,280 | ||||
·Series B-3 5.00% 11/15/38 | 1,800,000 | 1,983,258 | ||||
Virginia Port Authority Commonwealth Port Fund | ||||||
Revenue Resolution 5.00% 7/1/12 (AMT) | 500,000 | 519,130 | ||||
50,809,425 | ||||||
Water & Sewer Revenue Bonds – 7.18% | ||||||
Alabama Water Pollution Control Authority Revenue | ||||||
5.50% 8/15/23 (AMBAC) | 1,000,000 | 1,006,260 | ||||
Arizona Water Infrastructure Finance Authority Revenue | ||||||
(Water Quality) Series A 5.00% 10/1/21 | 2,430,000 | 2,679,585 | ||||
Dallas, Texas Waterworks & Sewer System Revenue | ||||||
5.00% 10/1/24 (FSA) | 6,500,000 | 6,521,775 | ||||
Florida Water Pollution Control Financing Corporation | ||||||
Revenue Series A 5.00% 1/15/25 | 5,000,000 | 5,117,250 | ||||
King County, Washington Sewer Revenue Refunding | ||||||
Series B 5.00% 1/1/14 (MBIA) | 3,500,000 | 3,901,870 | ||||
Massachusetts State Water Pollution Abatement Trust | ||||||
5.00% 8/1/16 | 2,170,000 | 2,494,849 | ||||
New York State Environmental Facilities Corporation | ||||||
Revenue (State Clean Water & Drinking Water | ||||||
�� Revolving Foundation) | ||||||
Series A 5.00% 6/15/22 | 1,405,000 | 1,507,158 | ||||
Series D 5.00% 9/15/23 | 3,360,000 | 3,541,205 | ||||
Portland, Oregon Sewer System Revenue (First Lien) | ||||||
Series A 5.00% 6/15/18 | 4,000,000 | 4,584,040 | ||||
31,353,992 | ||||||
Total Municipal Bonds (cost $427,651,769) | 426,833,871 |
33
Statements of net assets
Delaware Tax-Free USA Intermediate Fund
Principal amount | Value | |||||||
Short-Term Investments – 2.76% | ||||||||
·Variable Rate Demand Notes – 2.76% | ||||||||
California Statewide Communities Development | ||||||||
Authority Multifamily Revenue (Housing IAC Project) | ||||||||
Series W-2 1.30% 9/15/29 (AMT) | $ | 400,000 | $ | 400,000 | ||||
Colorado Educational & Cultural Facilities Authority | ||||||||
Revenue (National Jewish Federation Program) | ||||||||
Series A-8 0.65% 9/1/35 | 1,200,000 | 1,200,000 | ||||||
Series D-5 0.65% 10/1/38 | 1,000,000 | 1,000,000 | ||||||
Illinois Finance Authority Revenue (Northwestern | ||||||||
Memorial Hospital) Series A-1 0.60% 8/15/38 | 1,650,000 | 1,650,000 | ||||||
Minneapolis, Minnesota Health Care System Revenue | ||||||||
(Fairview Health Services) Series E 0.37% 11/15/47 | 1,500,000 | 1,500,000 | ||||||
New York City, New York Series E5 | ||||||||
0.55% 8/1/10 | 700,000 | 700,000 | ||||||
0.55% 8/1/17 | 700,000 | 700,000 | ||||||
0.55% 8/1/18 | 400,000 | 400,000 | ||||||
Trimble County, Kentucky Association of Counties Leasing | ||||||||
Trust Lease Program Revenue Series A 0.60% 12/1/38 | 500,000 | 500,000 | ||||||
University of Minnesota Series C 0.35% 12/1/36 | 4,000,000 | 4,000,000 | ||||||
Total Short-Term Investments (cost $12,050,000) | 12,050,000 | |||||||
Total Value of Securities – 100.56% | ||||||||
(cost $439,701,769) | 438,883,871 | |||||||
Liabilities Net of Receivables and | ||||||||
Other Assets – (0.56%) | (2,443,903 | ) | ||||||
Net Assets Applicable to 39,377,366 | ||||||||
Shares Outstanding – 100.00% | $ | 436,439,968 | ||||||
Net Asset Value – Delaware Tax-Free USA Intermediate Fund | ||||||||
Class A ($404,897,160 / 36,529,934 Shares) | $11.08 | |||||||
Net Asset Value – Delaware Tax-Free USA Intermediate Fund | ||||||||
Class B ($933,613 / 84,317 Shares) | $11.07 | |||||||
Net Asset Value – Delaware Tax-Free USA Intermediate Fund | ||||||||
Class C ($30,608,141 / 2,763,020 Shares) | $11.08 | |||||||
Net Asset Value – Delaware Tax-Free USA Intermediate Fund | ||||||||
Institutional Class ($1,054 / 95.1 Shares) | $11.08 |
34
Components of Net Assets at February 28, 2009: | |||
Shares of beneficial interest (unlimited authorization – no par) | $ | 446,324,608 | |
Distributions in excess of net investment income | (3,435 | ) | |
Accumulated net realized loss on investments | (9,063,307 | ) | |
Net unrealized depreciation of investments | (817,898 | ) | |
Total net assets | $ | 436,439,968 |
§ | 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 8 in “Notes to financial statements.” |
· | Variable rate security. The rate shown is the rate as of February 28, 2009. |
@ | Illiquid security. At February 28, 2009, the aggregate amount of illiquid securities was $462,798, which represented 0.11% of the Fund’s net assets. See Note 8 in “Notes to financial statements.” |
Summary of abbreviations:
AMBAC — Insured by the AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
ASSURED GTY — Insured by the Assured Guaranty Corporation
CDFI — Community Development Financial Institutions
FGIC — Insured by the Financial Guaranty Insurance Company
FSA — Insured by Financial Security Assurance
LOC — Letter of Credit
MBIA — Insured by the Municipal Bond Insurance Association
RADIAN — Insured by Radian Asset Assurance
XLCA — Insured by XL Capital Assurance
Net Asset Value and Offering Price Per Share – | |||
Delaware Tax-Free USA Intermediate Fund | |||
Net asset value Class A (A) | $ | 11.08 | |
Sales charge (2.75% of offering price) (B) | 0.31 | ||
Offering price | $ | 11.39 |
(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
35
Statements of net assets | |
Delaware National High-Yield Municipal Bond Fund | February 28, 2009 (Unaudited) |
Principal amount | Value | |||||
Municipal Bonds – 98.19% | ||||||
Corporate Revenue Bonds – 13.56% | ||||||
· | Beaver County, Pennsylvania Industrial Development | |||||
Authority Pollution Control Revenue (Firstenergy | ||||||
General Corp. Project) Series C 7.125% 6/1/28 (AMT) | $ | 1,000,000 | $ | 995,740 | ||
· | Brazos, Texas Harbor Industrial Development | |||||
Environmental Facilities Revenue (Dow Chemical | ||||||
Co. Project) 5.90% 5/1/38 (AMT) | 190,000 | 127,262 | ||||
· | Brazos, Texas River Authority Pollution Control Revenue | |||||
(TXU Energy Co. Project) Series B 6.30% 7/1/32 (AMT) | 1,000,000 | 462,580 | ||||
Cloquet, Minnesota Pollution Control Revenue | ||||||
(Potlatch Corp. Project) 5.90% 10/1/26 | 750,000 | 496,065 | ||||
De Soto Parish, Louisiana Environmental Improvement | ||||||
Revenue (International Paper Co. Project) | ||||||
Series A 6.35% 2/1/25 (AMT) | 1,650,000 | 1,195,211 | ||||
Gulf Coast, Texas Waste Disposal Authority Revenue | ||||||
(Valero Energy Corp. Project) 6.65% 4/1/32 (AMT) | 1,000,000 | 841,770 | ||||
Mississippi Business Finance Corporation Pollution | ||||||
Control Revenue (System Energy Resources, Inc. | ||||||
Project) 5.90% 5/1/22 | 900,000 | 742,239 | ||||
New Jersey Economic Development Authority Special | ||||||
Facilities Revenue (Continental Airlines, Inc. Project) | ||||||
6.40% 9/15/23 (AMT) | 1,000,000 | 707,640 | ||||
New York City, New York Industrial Development Agency | ||||||
Special Facilities Revenue (JetBlue Airways Corp. | ||||||
Project) 5.125% 5/15/30 (AMT) | 1,000,000 | 524,510 | ||||
Petersburg, Indiana Pollution Control Revenue | ||||||
(Indianapolis Power & Light Co. Project) | ||||||
6.375% 11/1/29 (AMT) | 1,000,000 | 792,530 | ||||
Phenix City, Alabama Industrial Development Board | ||||||
Environmental Improvement Revenue (Mead Westvaco | ||||||
Corp. Project) Series A 6.35% 5/15/35 (AMT) | 500,000 | 313,840 | ||||
Sugar Creek, Missouri Industrial Development Revenue | ||||||
(Lafarge North America Project) | ||||||
Series A 5.65% 6/1/37 (AMT) | 500,000 | 317,865 | ||||
Sweetwater County, Wyoming Solid Waste Disposal | ||||||
Revenue (FMC Corp. Project) 5.60% 12/1/35 (AMT) | 1,000,000 | 713,510 | ||||
Toledo, Lucas County, Ohio Port Authority Development | ||||||
Revenue (Toledo Express Airport Project) | ||||||
Series C 6.375% 11/15/32 (AMT) | 1,000,000 | 738,180 | ||||
8,968,942 |
36
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Education Revenue Bonds – 19.85% | ||||||
California Educational Facilities Authority Revenue | ||||||
(University of Southern California) | ||||||
Series A 5.00% 10/1/39 | $ | 1,000,000 | $ | 999,950 | ||
California Statewide Communities Development | ||||||
Authority Revenue (California Baptist University Project) | ||||||
Series A 5.50% 11/1/38 | 1,000,000 | 587,640 | ||||
California Statewide Communities Development | ||||||
Authority Student Housing Revenue (East Campus | ||||||
Apartments, LLC) Series A 5.625% 8/1/34 (ACA) | 1,000,000 | 809,010 | ||||
Chattanooga, Tennessee Health Educational & Housing | ||||||
Facilities Board Revenue (CDFI Phase I, LLC Project) | ||||||
Subordinate Series B 6.00% 10/1/35 | 1,000,000 | 684,240 | ||||
Louisville & Jefferson County, Kentucky Metropolitan | ||||||
Government College Revenue (Bellarmine University) | ||||||
Series A 6.00% 5/1/33 | 1,000,000 | 850,760 | ||||
Marietta, Georgia Development Authority Revenue | ||||||
(Life University Income Project) 7.00% 6/15/39 | 1,000,000 | 691,000 | ||||
Maryland State Economic Development Corporation | ||||||
Student Housing Revenue (University of Maryland | ||||||
College Park Projects) 5.75% 6/1/33 | 930,000 | 707,711 | ||||
Maryland State Health & Higher Educational Facilities | ||||||
Authority Revenue (Washington Christian | ||||||
Academy Project) Series A 5.50% 7/1/38 | 1,170,000 | 602,913 | ||||
Massachusetts State Health & Educational Facilities | ||||||
Authority Revenue (Nichols College Project) | ||||||
Series C 6.125% 10/1/29 | 1,000,000 | 782,460 | ||||
Minnesota State Higher Education Facilities | ||||||
Authority Revenue (Bethel University) | ||||||
Series 6R 5.50% 5/1/37 | 1,000,000 | 750,430 | ||||
New Jersey State Educational Facilities Authority | ||||||
Revenue (Fairleigh Dickinson Project) | ||||||
Series C 5.50% 7/1/23 | 750,000 | 643,335 | ||||
New Mexico Educational Assistance Foundation Student | ||||||
Loan Revenue 1st Subordinate | ||||||
Series A-2 6.65% 11/1/25 (AMT) | 985,000 | 985,138 | ||||
Ohio State Higher Educational Facilities Revenue | ||||||
(Otterbein College Project) Series A 5.50% 12/1/28 | 950,000 | 909,112 |
37
Statements of net assets
Delaware National High-Yield Municipal Bond Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Education Revenue Bonds (continued) | ||||||
Oregon State Facilities Authority Revenue | ||||||
(College Housing Northwest Project) | ||||||
Series A 5.45% 10/1/32 | $ | 1,000,000 | $ | 697,960 | ||
Pennsylvania State Higher Educational Facilities | ||||||
Authority Revenue | ||||||
(Edinboro University Foundation Student Housing) | ||||||
6.00% 7/1/42 | 1,000,000 | 772,350 | ||||
(Widener University) 5.375% 7/15/29 | 650,000 | 525,044 | ||||
Philadelphia, Pennsylvania Authority for Industrial | ||||||
Development Revenue (First Philadelphia Charter | ||||||
Project) Series A 5.75% 8/15/32 | 745,000 | 520,152 | ||||
Provo, Utah Charter School Revenue (Freedom Academy | ||||||
Foundation Project) 5.50% 6/15/37 | 1,000,000 | 610,870 | ||||
13,130,075 | ||||||
Health Care Revenue Bonds – 21.99% | ||||||
Apple Valley, Minnesota Economic Development | ||||||
Authority Health Care Revenue (Augustana Home | ||||||
St. Paul Project) Series A 6.00% 1/1/40 | 1,000,000 | 667,590 | ||||
Chatham County, Georgia Hospital Authority | ||||||
Revenue (Memorial Health Medical Center) | ||||||
Series A 6.125% 1/1/24 | 750,000 | 609,113 | ||||
@ | Cleveland-Cuyahoga County, Ohio Port Authority | |||||
Revenue Senior Housing (St. Clarence - Geac) | ||||||
Series A 6.25% 5/1/38 | 1,000,000 | 571,760 | ||||
Colorado Health Facilities Authority Revenue | ||||||
(Christian Living Community Project) | ||||||
Series A 5.75% 1/1/37 | 500,000 | 321,675 | ||||
East Rochester, New York Housing Authority Revenue | ||||||
Refunding (Senior Living - Woodland Village Project) | ||||||
5.50% 8/1/33 | 500,000 | 308,830 | ||||
Gainesville & Hall County, Georgia Development | ||||||
Authority Revenue Senior Living Facilities | ||||||
(Lanier Village Estates Project) | ||||||
Series C 7.25% 11/15/29 | 1,000,000 | 960,090 | ||||
Illinois Health Facilities Authority Revenue | ||||||
(Elmhurst Memorial Healthcare Project) 5.625% 1/1/28 | 1,000,000 | 829,410 | ||||
(Midwest Physician Group Limited Project) 5.50% 11/15/19 | 35,000 | 27,631 | ||||
Lancaster County, Pennsylvania Hospital Authority Revenue | ||||||
(Brethren Village Project) Series A 6.375% 7/1/30 | 725,000 | 589,780 |
38
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Health Care Revenue Bonds (continued) | ||||||
Lebanon County, Pennsylvania Health Facilities Authority | ||||||
Center Revenue (Pleasant View Retirement) | ||||||
Series A 5.30% 12/15/26 | $ | 1,000,000 | $ | 652,680 | ||
Maryland State Health & Higher Educational Facilities | ||||||
Authority Revenue (Washington County Hospital | ||||||
Project) 5.75% 1/1/38 | 1,000,000 | 769,210 | ||||
Minneapolis, Minnesota Health Care System Revenue | ||||||
(Fairview Health) Series A 6.625% 11/15/28 | 800,000 | 845,064 | ||||
New Jersey Health Care Facilities Financing Authority | ||||||
Revenue (St. Josephs Healthcare System) | ||||||
6.625% 7/1/38 | 1,000,000 | 728,730 | ||||
New York State Dormitory Authority Revenue (Non State | ||||||
Supported Debt - Orange Regional Medical Center) | ||||||
6.25% 12/1/37 | 1,000,000 | 717,400 | ||||
North Carolina Medical Care Commission Health Care | ||||||
Facilities Revenue (First Mortgage - Presbyterian | ||||||
Homes) 5.60% 10/1/36 | 1,000,000 | 691,080 | ||||
Orange County, Florida Health Facilities Authority | ||||||
Revenue (Orlando Regional Healthcare) | ||||||
Series C 5.25% 10/1/35 | 1,000,000 | 762,240 | ||||
Richland County, Ohio Hospital Facilities Revenue | ||||||
(Medcentral Health System Project) | ||||||
Series B 6.375% 11/15/30 | 500,000 | 482,310 | ||||
Shelby County, Tennessee Health Educational & Housing | ||||||
Facilities Board Revenue (Trezevant Manor Project) | ||||||
Series A 5.75% 9/1/37 | 390,000 | 244,253 | ||||
St. Joseph County, Indiana Industrial Economic | ||||||
Development Revenue (Madison Center Project) | ||||||
5.50% 2/15/21 | 1,150,000 | 1,083,127 | ||||
Washington State Health Care Facilities Authority Revenue | ||||||
(Multicare Health System) | ||||||
Series B 6.00% 8/15/39 (ASSURED GTY) | 1,250,000 | 1,233,437 | ||||
Winchester, Virginia Industrial Development Authority | ||||||
Residential Care Facility Revenue (Westminster - | ||||||
Canterbury Project) Series A 5.30% 1/1/35 | 1,000,000 | 679,650 | ||||
Yavapai County, Arizona Industrial Development Authority | ||||||
Hospital Revenue (Yavapai Medical Center Project) | ||||||
Series A 6.00% 8/1/33 | 1,000,000 | 772,310 | ||||
14,547,370 |
39
Statements of net assets
Delaware National High-Yield Municipal Bond Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Housing Revenue Bonds – 1.44% | ||||||
North Carolina Housing Finance Agency Homeownership | ||||||
Revenue Series 27-A 5.55% 7/1/38 (AMT) | $ | 1,000,000 | $ | 951,360 | ||
951,360 | ||||||
Lease Revenue Bonds – 2.36% | ||||||
Dauphin County, Pennsylvania General Authority | ||||||
Revenue (Riverfront Office & Parking Project) | ||||||
5.75% 1/1/10 | 970,000 | 941,298 | ||||
Missouri State Development Finance Board Infrastructure | ||||||
Facilities Revenue (Branson Landing Project) Series A | ||||||
5.50% 12/1/24 | 720,000 | 621,187 | ||||
1,562,485 | ||||||
Local General Obligation Bonds – 1.46% | ||||||
Los Angeles, California Unified School District Election | ||||||
2002 Series D 5.00% 1/1/34 | 1,000,000 | 964,110 | ||||
964,110 | ||||||
§Pre-Refunded Bonds – 18.34% | ||||||
Bexar County, Texas Health Facilities Development | ||||||
Corporation Revenue (Army Retirement Residence | ||||||
Project) 6.30% 7/1/32-12 | 1,000,000 | 1,144,430 | ||||
Illinois Educational Facilities Authority Student Housing | ||||||
Revenue (Educational Advancement Fund - University | ||||||
Center Project) 6.25% 5/1/30-12 | 1,000,000 | 1,151,140 | ||||
Louisiana Public Facilities Authority Revenue | ||||||
(Ochsner Clinic Foundation Project) | ||||||
Series B 5.50% 5/15/32-26 | 1,000,000 | 1,113,120 | ||||
Maine Finance Authority Education Revenue | ||||||
(Waynflete School Issue) 6.40% 8/1/19-09 | 1,000,000 | 1,034,730 | ||||
Massachusetts State Development Finance Agency | ||||||
Revenue (Massachusetts College of Pharmacy Project) | ||||||
Series C 5.75% 7/1/33-13 | 1,000,000 | 1,174,730 | ||||
Milledgeville-Baldwin County, Georgia Development | ||||||
Authority Revenue (Georgia College & State University | ||||||
Foundation Student Housing Project) | ||||||
6.00% 9/1/33-14 | 1,000,000 | 1,209,190 | ||||
Minnesota State Higher Education Facilities Authority | ||||||
Revenue (College of Art & Design Project) | ||||||
Series 5-D 6.75% 5/1/26-10 | 500,000 | 533,255 | ||||
Mississippi Development Bank Special Obligation | ||||||
(Madison County Hospital Project) 6.40% 7/1/29-09 | 1,585,000 | 1,648,463 |
40
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
§Pre-Refunded Bonds (continued) | ||||||
Montgomery County, Pennsylvania Higher Education & | ||||||
Health Authority Revenue (Foulkeways at | ||||||
Gwynedd Project) 6.75% 11/15/30-09 | $ | 1,000,000 | $ | 1,051,950 | ||
Rochester, Minnesota Multifamily Housing Revenue | ||||||
(Wedum Shorewood Campus Project) | ||||||
6.60% 6/1/36-09 | 985,000 | 1,019,219 | ||||
Savannah, Georgia Economic Development Authority | ||||||
Revenue (College of Art & Design Project) | ||||||
6.50% 10/1/13-09 | 1,000,000 | 1,054,540 | ||||
12,134,767 | ||||||
Special Tax Bonds – 14.05% | ||||||
Baltimore, Maryland Convention Center Hotel Revenue | ||||||
Suborinated Series B 5.875% 9/1/39 | 1,000,000 | 556,270 | ||||
Chicago, Illinois Tax Increment Allocation | ||||||
(Chatham Ridge Redevelopment Project) | ||||||
5.95% 12/15/12 | 750,000 | 735,113 | ||||
Farms New Kent, Virginia Community Development | ||||||
Authority Special Assessment Series C 5.80% 3/1/36 | 1,000,000 | 576,360 | ||||
Henderson, Nevada Local Improvement Districts #T-18 | ||||||
5.30% 9/1/35 | 665,000 | 239,799 | ||||
Hennepin County, Minnesota Sales Tax Revenue Second | ||||||
Lien (Ballpark Project) Series B 5.00% 12/15/20 | 1,000,000 | 1,095,571 | ||||
Middlesex County, New Jersey Improvement Authority | ||||||
Senior Revenue (Heldrich Center Hotel/Conference | ||||||
Project) Series A | ||||||
5.00% 1/1/32 | 500,000 | 255,330 | ||||
5.125% 1/1/37 | 870,000 | 434,408 | ||||
New Jersey Economic Development Authority | ||||||
(Cigarette Tax) 5.75% 6/15/34 | 965,000 | 703,890 | ||||
New York State Dormitory Authority State Personal | ||||||
Income Tax Revenue Series B 5.25% 3/15/38 | 500,000 | 507,400 | ||||
New York State Urban Development Corporation Revenue | ||||||
State Personal Income Tax Series A-1 5.00% 12/15/28 | 1,000,000 | 1,011,520 | ||||
Prescott Valley, Arizona Improvement District Special | ||||||
Assessment (Sewer Collection System Roadway Repair | ||||||
Project) 7.90% 1/1/12 | 168,000 | 174,466 |
41
Statements of net assets
Delaware National High-Yield Municipal Bond Fund
Principal amount | Value | |||||
Municipal Bonds (continued) | ||||||
Special Tax Bonds (continued) | ||||||
Richmond Heights, Missouri Tax Increment & Transaction | ||||||
Sales Tax Revenue Refunding & Improvement (Francis | ||||||
Place Redevelopment Project) 5.625% 11/1/25 | $ | 1,200,000 | $ | 881,136 | ||
Southwestern Illinois Development Authority Revenue | ||||||
(Local Government Program - Collinsville Limited Project) | ||||||
5.35% 3/1/31 | 500,000 | 329,370 | ||||
St. Joseph, Missouri Industrial Development Authority Tax | ||||||
Increment Revenue (Shoppes at North Village Project) | ||||||
Series A | ||||||
5.375% 11/1/24 | 1,000,000 | 732,260 | ||||
5.50% 11/1/27 | 500,000 | 351,555 | ||||
Winter Garden Village at Fowler Groves Community | ||||||
Development District, Florida Special Assessment | ||||||
Revenue 5.65% 5/1/37 | 985,000 | 709,968 | ||||
9,294,416 | ||||||
State General Obligation Bonds – 1.76% | ||||||
Virginia State Series B 5.00% 6/1/18 | 1,000,000 | 1,167,140 | ||||
1,167,140 | ||||||
Transportation Revenue Bonds – 3.38% | ||||||
Branson, Missouri Regional Airport Transportation | ||||||
Development District (Airport Project) | ||||||
Series A 6.00% 7/1/37 | 500,000 | 315,365 | ||||
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 | 599,409 | ||||
Oklahoma City, Oklahoma Industrial & Cultural Facilities | ||||||
Subordinated (Air Cargo Obligated Group Project) | ||||||
6.75% 1/1/23 (AMT) | 1,160,000 | 921,434 | ||||
Onondaga County, New York Industrial Development | ||||||
Authority Revenue Subordinated (Air Cargo Project) | ||||||
7.25% 1/1/32 (AMT) | 500,000 | 397,050 | ||||
2,233,258 | ||||||
Total Municipal Bonds (cost $78,270,840) | 64,953,923 |
42
Value | ||||
Total Value of Securities – 98.19% | ||||
(cost $78,270,840) | $ | 64,953,923 | ||
Receivables and Other Assets | ||||
Net of Liabilities – 1.81% | 1,194,534 | |||
Net Assets Applicable to 8,233,118 | ||||
Shares Outstanding – 100.00% | $ | 66,148,457 | ||
Net Asset Value – Delaware National High-Yield Municipal Bond Fund | ||||
Class A ($58,240,401 / 7,252,154 Shares) | $8.03 | |||
Net Asset Value – Delaware National High-Yield Municipal Bond Fund | ||||
Class B ($2,029,271 / 252,149 Shares) | $8.05 | |||
Net Asset Value – Delaware National High-Yield Municipal Bond Fund | ||||
Class C ($5,877,700 / 728,680 Shares) | $8.07 | |||
Net Asset Value – Delaware National High-Yield Municipal Bond Fund | ||||
Institutional Class ($1,085 / 135.1 Shares) | $8.03 | |||
Components of Net Assets at February 28, 2009: | ||||
Shares of beneficial interest (unlimited authorization – no par) | $ | 86,538,634 | ||
Distributions in excess of net investment income | (3,409 | ) | ||
Accumulated net realized loss on investments | (7,069,851 | ) | ||
Net unrealized depreciation of investments | (13,316,917 | ) | ||
Total net assets | $ | 66,148,457 |
§ | 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 8 in “Notes to financial statements.” |
· | Variable rate security. The rate shown is the rate as of February 28, 2009. |
@ | Illiquid security. At February 28, 2009, the aggregate amount of illiquid securities was $571,760, which represented 0.86% of the Fund’s net assets. See Note 8 in “Notes to financial statements.” |
43
Statements of net assets
Delaware National High-Yield Municipal Bond Fund
Summary of abbreviations: ACA — Insured by American Capital Access AMT — Subject to Alternative Minimum Tax ASSURED GTY — Insured by the Assured Guaranty Corporation CDFI — Community Development Financial Institutions |
Net Asset Value and Offering Price Per Share – | |
Delaware National High-Yield Municipal Bond Fund | |
Net asset value Class A (A) | $8.03 |
Sales charge (4.50% of offering price) (B) | 0.38 |
Offering price | $8.41 |
(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
44
Statements of operations | |
Six Months Ended February 28, 2009 (Unaudited) |
Delaware | Delaware | Delaware | ||||||||||
Tax-Free | Tax-Free USA | National High-Yield | ||||||||||
USA Fund | Intermediate Fund | Municipal Bond Fund | ||||||||||
Investment Income: | ||||||||||||
Interest | $14,126,790 | $8,706,730 | $2,308,265 | |||||||||
Expenses: | ||||||||||||
Management fees | 1,430,567 | 1,030,029 | 185,116 | |||||||||
Distribution expenses – Class A | 601,869 | 577,336 | 73,707 | |||||||||
Distribution expenses – Class B | 50,122 | 5,048 | 12,650 | |||||||||
Distribution expenses – Class C | 81,982 | 129,149 | 29,996 | |||||||||
Dividend disbursing and transfer | ||||||||||||
agent fees and expenses | 197,017 | 236,387 | 24,966 | |||||||||
Accounting and administration expenses | 104,546 | 82,402 | 13,463 | |||||||||
Registration fees | 47,432 | 34,444 | 22,903 | |||||||||
Legal and professional fees | 32,807 | 22,142 | 6,243 | |||||||||
Reports and statements to shareholders | 29,454 | 25,447 | 3,992 | |||||||||
Audit and tax | 20,838 | 16,062 | 7,399 | |||||||||
Trustees’ fees | 16,910 | 13,329 | 2,216 | |||||||||
Insurance fees | 9,371 | 7,063 | 1,012 | |||||||||
Pricing fees | 8,853 | 8,885 | 4,611 | |||||||||
Custodian fees | 4,691 | 3,661 | 699 | |||||||||
Consulting fees | 3,408 | 1,973 | 472 | |||||||||
Trustees’ expenses | 1,528 | 1,197 | 205 | |||||||||
Due and services | 1,503 | 882 | 137 | |||||||||
Taxes (other than taxes on income) | 1,300 | 539 | 189 | |||||||||
2,644,198 | 2,195,975 | 389,976 | ||||||||||
Less expenses absorbed or waived | (332,283 | ) | (240,858 | ) | (53,338 | ) | ||||||
Less waived distribution expenses – Class A | — | (288,668 | ) | — | ||||||||
Less expense paid indirectly | (1,825 | ) | (1,433 | ) | (247 | ) | ||||||
Total operating expenses | 2,310,090 | 1,665,016 | 336,391 | |||||||||
Net Investment Income | 11,816,700 | 7,041,714 | 1,971,874 |
46
Delaware | Delaware | Delaware | ||||||||||
Tax-Free | Tax-Free USA | National High-Yield | ||||||||||
USA Fund | Intermediate Fund | Municipal Bond Fund | ||||||||||
Net Realized and Unrealized Loss | ||||||||||||
on Investments: | ||||||||||||
Net realized loss on investments | $ | (7,095,439 | ) | $(2,611,288 | ) | $ (1,599,400 | ) | |||||
Net change in unrealized appreciation/ | ||||||||||||
depreciation of investments | (21,852,346 | ) | (4,180,021 | ) | (10,635,312 | ) | ||||||
Net Realized and Unrealized Loss | ||||||||||||
on Investments | (28,947,785 | ) | (6,791,309 | ) | (12,234,712 | ) | ||||||
Net Increase (Decrease) in Net Assets | ||||||||||||
Resulting from Operations | $ | (17,131,085 | ) | $ 250,405 | $(10,262,838 | ) |
See accompanying notes
47
Statements of changes in net assets
Delaware Tax-Free USA Fund
Six Months | Year | |||||||
Ended | Ended | |||||||
2/28/09 | 8/31/08 | |||||||
(Unaudited) | ||||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||
Net investment income | $ | 11,816,700 | $ | 27,617,892 | ||||
Net realized loss on investments | (7,095,439 | ) | (9,007,332 | ) | ||||
Net change in unrealized appreciation/depreciation | ||||||||
of investments | (21,852,346 | ) | (6,388,968 | ) | ||||
Net increase (decrease) in net assets resulting | ||||||||
from operations | (17,131,085 | ) | 12,221,592 | |||||
Dividends and Distributions to Shareholders from: | ||||||||
Net investment income: | ||||||||
Class A | (11,315,258 | ) | (26,581,925 | ) | ||||
Class B | (190,174 | ) | (470,633 | ) | ||||
Class C | (310,941 | ) | (565,334 | ) | ||||
Institutional Class | (7 | ) | — | |||||
(11,816,380 | ) | (27,617,892 | ) | |||||
Capital Share Transactions: | ||||||||
Proceeds from shares sold: | ||||||||
Class A | 95,208,285 | 37,572,215 | ||||||
Class B | 62,137 | 293,560 | ||||||
Class C | 3,915,067 | 4,557,451 | ||||||
Institutional Class | 1,022 | — | ||||||
Net asset value of shares issued upon reinvestment | ||||||||
of dividends and distributions: | ||||||||
Class A | 6,250,502 | 13,138,217 | ||||||
Class B | 99,169 | 251,193 | ||||||
Class C | 220,384 | 410,918 | ||||||
Institutional Class | 7 | — | ||||||
105,756,573 | 56,223,554 |
48
Six Months | Year | |||||||
Ended | Ended | |||||||
2/28/09 | 8/31/08 | |||||||
(Unaudited) | ||||||||
Capital Share Transactions (continued): | ||||||||
Cost of shares repurchased: | ||||||||
Class A | $ | (69,412,600 | ) | $ | (260,772,109 | ) | ||
Class B | (1,795,363 | ) | (5,722,909 | ) | ||||
Class C | (1,744,921 | ) | (4,798,596 | ) | ||||
(72,952,884 | ) | (271,293,614 | ) | |||||
Increase (decrease) in net assets derived from | ||||||||
capital share transactions | 32,803,689 | (215,070,060 | ) | |||||
Net Increase (Decrease) in Net Assets | 3,856,224 | (230,466,360 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 539,274,944 | 769,741,304 | ||||||
End of period | $ | 543,131,168 | $ | 539,274,944 | ||||
Undistributed net investment income | $ | 2,110 | $ | 1,790 |
See accompanying notes
49
Statements of changes in net assets
Delaware Tax-Free USA Intermediate Fund
Six Months | Year | |||||||
Ended | Ended | |||||||
2/28/09 | 8/31/08 | |||||||
(Unaudited) | ||||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||
Net investment income | $ | 7,041,714 | $ | 12,913,451 | ||||
Net realized loss on investments | (2,611,288 | ) | (3,995,267 | ) | ||||
Net change in unrealized appreciation/depreciation | ||||||||
of investments | (4,180,021 | ) | 4,897,895 | |||||
Net increase in net assets resulting | ||||||||
from operations | 250,405 | 13,816,079 | ||||||
Dividends and Distributions to Shareholders from: | ||||||||
Net investment income: | ||||||||
Class A | (6,663,432 | ) | (12,238,496 | ) | ||||
Class B | (13,206 | ) | (39,714 | ) | ||||
Class C | (336,729 | ) | (667,017 | ) | ||||
Institutional Class | (6 | ) | — | |||||
(7,013,373 | ) | (12,945,227 | ) | |||||
Capital Share Transactions: | ||||||||
Proceeds from shares sold: | ||||||||
Class A | 123,336,857 | 206,786,111 | ||||||
Class B | 92,295 | 131,370 | ||||||
Class C | 8,913,065 | 7,290,130 | ||||||
Institutional Class | 1,022 | — | ||||||
Net asset value of shares issued upon reinvestment | ||||||||
of dividends and distributions: | ||||||||
Class A | 4,623,260 | 9,108,623 | ||||||
Class B | 9,701 | 31,547 | ||||||
Class C | 242,464 | 429,923 | ||||||
Institutional Class | 5 | — | ||||||
137,218,669 | 223,777,704 |
50
Six Months | Year | |||||||
Ended | Ended | |||||||
2/28/09 | 8/31/08 | |||||||
(Unaudited) | ||||||||
Capital Share Transactions (continued): | ||||||||
Cost of shares repurchased: | ||||||||
Class A | $ | (124,389,183 | ) | $ | (115,146,849 | ) | ||
Class B | (414,425 | ) | (680,553 | ) | ||||
Class C | (3,092,765 | ) | (11,178,428 | ) | ||||
(127,896,373 | ) | (127,005,830 | ) | |||||
Increase in net assets derived from | ||||||||
capital share transactions | 9,322,296 | 96,771,874 | ||||||
Net Increase in Net Assets | 2,559,328 | 97,642,726 | ||||||
Net Assets: | ||||||||
Beginning of period | 433,880,640 | 336,237,914 | ||||||
End of period | $ | 436,439,968 | $ | 433,880,640 | ||||
Distributions in excess of net investment income | $ | (3,435 | ) | $ | (31,776 | ) |
See accompanying notes
51
Statements of changes in net assets
Delaware National High-Yield Municipal Bond Fund
Six Months | Year | |||||||
Ended | Ended | |||||||
2/28/09 | 8/31/08 | |||||||
(Unaudited) | ||||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||
Net investment income | $ | 1,971,874 | $ | 3,633,791 | ||||
Net realized gain (loss) on investments | (1,599,400 | ) | 245,645 | |||||
Net change in unrealized appreciation/depreciation | ||||||||
of investments | (10,635,312 | ) | (4,249,383 | ) | ||||
Net decrease in net assets resulting | ||||||||
from operations | (10,262,838 | ) | (369,947 | ) | ||||
Dividends and Distributions to Shareholders from: | ||||||||
Net investment income: | ||||||||
Class A | (1,750,261 | ) | (3,214,246 | ) | ||||
Class B | (65,539 | ) | (176,575 | ) | ||||
Class C | (155,369 | ) | (242,971 | ) | ||||
Institutional Class | (11 | ) | — | |||||
(1,971,180 | ) | (3,633,792 | ) | |||||
Capital Share Transactions: | ||||||||
Proceeds from shares sold: | ||||||||
Class A | 5,943,251 | 17,354,089 | ||||||
Class B | 241,772 | 54,983 | ||||||
Class C | 1,025,596 | 3,638,033 | ||||||
Institutional Class | 1,016 | — | ||||||
Net asset value of shares issued upon reinvestment | ||||||||
of dividends and distributions: | ||||||||
Class A | 1,094,000 | 1,920,956 | ||||||
Class B | 28,874 | 62,814 | ||||||
Class C | 105,415 | 164,618 | ||||||
Institutional Class | 10 | — | ||||||
8,439,934 | 23,195,493 |
52
Six Months | Year | ||||||
Ended | Ended | ||||||
2/28/09 | 8/31/08 | ||||||
(Unaudited) | |||||||
Capital Share Transactions (continued): | |||||||
Cost of shares repurchased: | |||||||
Class A | $ | (5,884,915 | ) | $ | (13,185,106 | ) | |
Class B | (926,861 | ) | (2,736,136 | ) | |||
Class C | (1,141,153 | ) | (1,338,113 | ) | |||
(7,952,929 | ) | (17,259,355 | ) | ||||
Increase in net assets derived from | |||||||
capital share transactions | 487,005 | 5,936,138 | |||||
Net Increase (Decrease) in Net Assets | (11,747,013 | ) | 1,932,399 | ||||
Net Assets: | |||||||
Beginning of period | 77,895,470 | 75,963,071 | |||||
End of period | $ | 66,148,457 | $ | 77,895,470 | |||
Distributions in excess of net investment income | $ | (3,409 | ) | $ | (4,103 | ) |
See accompanying notes
53
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 fees waived and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to fees waived and expense paid indirectly |
Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers by the manager and distributor, as applicable. Performance would have been lower had the waivers not been in effect. |
See accompanying notes
54
Six Months Ended | Year Ended | ||||||||||||||||||
2/28/091 | 8/31/08 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | ||||||||||||||
(Unaudited) | |||||||||||||||||||
$10.970 | $11.230 | $11.570 | $11.760 | $11.460 | $11.170 | ||||||||||||||
0.233 | 0.462 | 0.466 | 0.458 | 0.512 | 0.538 | ||||||||||||||
(0.610 | ) | (0.260 | ) | (0.337 | ) | (0.186 | ) | 0.300 | 0.290 | ||||||||||
(0.377 | ) | 0.202 | 0.129 | 0.272 | 0.812 | 0.828 | |||||||||||||
(0.233 | ) | (0.462 | ) | (0.469 | ) | (0.462 | ) | (0.512 | ) | (0.538 | ) | ||||||||
(0.233 | ) | (0.462 | ) | (0.469 | ) | (0.462 | ) | (0.512 | ) | (0.538 | ) | ||||||||
$10.360 | $10.970 | $11.230 | $11.570 | $11.760 | $11.460 | ||||||||||||||
(3.40% | ) | 1.82% | 1.08% | 2.42% | 7.23% | 7.54% | |||||||||||||
$515,450 | $510,822 | $735,584 | $656,813 | $453,982 | $456,192 | ||||||||||||||
0.84% | 0.85% | 0.87% | 0.86% | 0.86% | 0.87% | ||||||||||||||
0.97% | 0.94% | 0.95% | 1.00% | 0.98% | 0.93% | ||||||||||||||
4.55% | 4.13% | 4.03% | 3.97% | 4.43% | 4.72% | ||||||||||||||
4.42% | 4.04% | 3.95% | 3.83% | 4.31% | 4.66% | ||||||||||||||
37% | 28% | 36% | 41% | 47% | 32% |
55
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 fees waived and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to fees waived and expense paid indirectly |
Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
56
Six Months Ended | Year Ended | ||||||||||||||||||
2/28/091 | 8/31/08 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | ||||||||||||||
(Unaudited) | |||||||||||||||||||
$10.960 | $11.230 | $11.570 | $11.760 | $11.460 | $11.170 | ||||||||||||||
0.194 | 0.378 | 0.378 | 0.370 | 0.423 | 0.449 | ||||||||||||||
(0.600 | ) | (0.270 | ) | (0.337 | ) | (0.186 | ) | 0.300 | 0.290 | ||||||||||
(0.406 | ) | 0.108 | 0.041 | 0.184 | 0.723 | 0.739 | |||||||||||||
(0.194 | ) | (0.378 | ) | (0.381 | ) | (0.374 | ) | (0.423 | ) | (0.449 | ) | ||||||||
(0.194 | ) | (0.378 | ) | (0.381 | ) | (0.374 | ) | (0.423 | ) | (0.449 | ) | ||||||||
$10.360 | $10.960 | $11.230 | $11.570 | $11.760 | $11.460 | ||||||||||||||
(3.68% | ) | 0.96% | 0.32% | 1.63% | 6.42% | 6.71% | |||||||||||||
$9,523 | $11,812 | $17,286 | $22,189 | $16,507 | $22,396 | ||||||||||||||
1.60% | 1.61% | 1.63% | 1.63% | 1.63% | 1.65% | ||||||||||||||
1.73% | 1.70% | 1.71% | 1.73% | 1.71% | 1.71% | ||||||||||||||
3.79% | 3.37% | 3.27% | 3.20% | 3.66% | 3.94% | ||||||||||||||
3.66% | 3.28% | 3.19% | 3.10% | 3.58% | 3.88% | ||||||||||||||
37% | 28% | 36% | 41% | 47% | 32% |
57
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 fees waived and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to fees waived and expense paid indirectly |
Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
58
Six Months Ended | Year Ended | ||||||||||||||||||
2/28/091 | 8/31/08 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | ||||||||||||||
(Unaudited) | |||||||||||||||||||
$10.970 | $11.230 | $11.570 | $11.760 | $11.460 | $11.170 | ||||||||||||||
0.194 | 0.377 | 0.378 | 0.370 | 0.423 | 0.449 | ||||||||||||||
(0.600 | ) | (0.260 | ) | (0.337 | ) | (0.186 | ) | 0.300 | 0.290 | ||||||||||
(0.406 | ) | 0.117 | 0.041 | 0.184 | 0.723 | 0.739 | |||||||||||||
(0.194 | ) | (0.377 | ) | (0.381 | ) | (0.374 | ) | (0.423 | ) | (0.449 | ) | ||||||||
(0.194 | ) | (0.377 | ) | (0.381 | ) | (0.374 | ) | (0.423 | ) | (0.449 | ) | ||||||||
$10.370 | $10.970 | $11.230 | $11.570 | $11.760 | $11.460 | ||||||||||||||
(3.67% | ) | 0.96% | 0.41% | 1.63% | 6.42% | 6.71% | |||||||||||||
$18,157 | $16,641 | $16,871 | $15,110 | $5,963 | $5,784 | ||||||||||||||
1.60% | 1.61% | 1.63% | 1.63% | 1.63% | 1.65% | ||||||||||||||
1.73% | 1.70% | 1.71% | 1.73% | 1.71% | 1.71% | ||||||||||||||
3.79% | 3.37% | 3.27% | 3.20% | 3.66% | 3.94% | ||||||||||||||
3.66% | 3.28% | 3.19% | 3.10% | 3.58% | 3.88% | ||||||||||||||
37% | 28% | 36% | 41% | 47% | 32% |
59
Financial highlights
Delaware Tax-Free USA Fund Institutional Class
Selected data for each share of the Fund outstanding throughout the period were as follows:
12/31/081 | ||||
to 2/28/09 | ||||
(Unaudited) | ||||
Net asset value, beginning of period | $10.020 | |||
Income from investment operations: | ||||
Net investment income | 0.079 | |||
Net realized and unrealized gain on investments | 0.340 | |||
Total from investment operations | 0.419 | |||
Less dividends and distributions from: | ||||
Net investment income | (0.079 | ) | ||
Total dividends and distributions | (0.079 | ) | ||
Net asset value, end of period | $10.360 | |||
Total return2 | 3.96% | |||
Ratios and supplemental data: | ||||
Net assets, end of period (000 omitted) | $1 | |||
Ratio of expenses to average net assets | 0.60% | |||
Ratio of expenses to average net assets | ||||
prior to fees waived and expense paid indirectly | 0.73% | |||
Ratio of net investment income to average net assets | 4.74% | |||
Ratio of net investment income to average net assets | ||||
prior to fees waived and expense paid indirectly | 4.61% | |||
Portfolio turnover | 37% | 3 |
1 Date of commencement of operations; ratios have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
3 Portfolio turnover is representative of the Fund for the six months ended February 28, 2009. |
See accompanying notes
60
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 fees waived and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to fees waived and expense paid indirectly |
Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers by the manager and distributor. Performance would have been lower had the waivers not been in effect. |
3 Ratio for the year ended August 31, 2004, including fees paid indirectly in accordance with Securities and Exchange Commission rules was 0.82%. |
See accompanying notes
62
Six Months Ended | Year Ended | ||||||||||||||||||
2/28/091 | 8/31/08 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | ||||||||||||||
(Unaudited) | |||||||||||||||||||
$11.250 | $11.210 | $11.470 | $11.610 | $11.390 | $11.010 | ||||||||||||||
0.188 | 0.383 | 0.414 | 0.408 | 0.410 | 0.419 | ||||||||||||||
(0.170 | ) | 0.041 | (0.260 | ) | (0.140 | ) | 0.220 | 0.380 | |||||||||||
0.018 | 0.424 | 0.154 | 0.268 | 0.630 | 0.799 | ||||||||||||||
(0.188 | ) | (0.384 | ) | (0.414 | ) | (0.408 | ) | (0.410 | ) | (0.419 | ) | ||||||||
(0.188 | ) | (0.384 | ) | (0.414 | ) | (0.408 | ) | (0.410 | ) | (0.419 | ) | ||||||||
$11.080 | $11.250 | $11.210 | $11.470 | $11.610 | $11.390 | ||||||||||||||
0.19% | 3.83% | 1.34% | 2.38% | 5.63% | 7.36% | ||||||||||||||
$404,897 | $407,729 | $306,215 | $204,525 | $120,273 | $77,448 | ||||||||||||||
0.75% | 0.75% | 0.76% | 0.75% | 0.79% | 0.80% | 3 | |||||||||||||
1.02% | 1.03% | 1.03% | 1.07% | 1.11% | 1.09% | ||||||||||||||
3.47% | 3.38% | 3.60% | 3.56% | 3.55% | 3.70% | ||||||||||||||
3.20% | 3.10% | 3.33% | 3.24% | 3.23% | 3.41% | ||||||||||||||
39% | 28% | 40% | 37% | 18% | 27% |
63
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 fees waived and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived and expense paid indirectly |
Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
3 Ratio for the year ended August 31, 2004, including fees paid indirectly in accordance with Securities and Exchange Commission rules was 1.67%. |
See accompanying notes
64
Six Months Ended | Year Ended | ||||||||||||||||||
2/28/081 | 8/31/08 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | ||||||||||||||
(Unaudited) | |||||||||||||||||||
$11.240 | $11.200 | $11.460 | $11.610 | $11.380 | $11.010 | ||||||||||||||
0.142 | 0.287 | 0.317 | 0.311 | 0.313 | 0.323 | ||||||||||||||
(0.170 | ) | 0.041 | (0.260 | ) | (0.150 | ) | 0.230 | 0.370 | |||||||||||
(0.028 | ) | 0.328 | 0.057 | 0.161 | 0.543 | 0.693 | |||||||||||||
(0.142 | ) | (0.288 | ) | (0.317 | ) | (0.311 | ) | (0.313 | ) | (0.323 | ) | ||||||||
(0.142 | ) | (0.288 | ) | (0.317 | ) | (0.311 | ) | (0.313 | ) | (0.323 | ) | ||||||||
$11.070 | $11.240 | $11.200 | $11.460 | $11.610 | $11.380 | ||||||||||||||
(0.23% | ) | 2.95% | 0.48% | 1.43% | 4.83% | 6.36% | |||||||||||||
$934 | $1,272 | $1,786 | $2,413 | $3,203 | $3,743 | ||||||||||||||
1.60% | 1.60% | 1.61% | 1.60% | 1.64% | 1.65% | 3 | |||||||||||||
1.72% | 1.73% | 1.73% | 1.77% | 1.81% | 1.79% | ||||||||||||||
2.62% | 2.53% | 2.75% | 2.71% | 2.70% | 2.85% | ||||||||||||||
2.50% | 2.40% | 2.63% | 2.54% | 2.53% | 2.71% | ||||||||||||||
39% | 28% | 40% | 37% | 18% | 27% |
65
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 fees waived and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived and expense paid indirectly |
Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
3 Ratio for the year ended August 31, 2004, including fees paid indirectly in accordance with Securities and Exchange Commission rules was 1.67%. |
See accompanying notes
66
Six Months Ended | Year Ended | ||||||||||||||||||
2/28/091 | 8/31/08 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | ||||||||||||||
(Unaudited) | |||||||||||||||||||
$11.240 | $11.200 | $11.470 | $11.610 | $11.390 | $11.010 | ||||||||||||||
0.142 | 0.287 | 0.317 | 0.311 | 0.313 | 0.323 | ||||||||||||||
(0.160 | ) | 0.041 | (0.270 | ) | (0.140 | ) | 0.220 | 0.380 | |||||||||||
(0.018 | ) | 0.328 | 0.047 | 0.171 | 0.533 | 0.703 | |||||||||||||
(0.142 | ) | (0.288 | ) | (0.317 | ) | (0.311 | ) | (0.313 | ) | (0.323 | ) | ||||||||
(0.142 | ) | (0.288 | ) | (0.317 | ) | (0.311 | ) | (0.313 | ) | (0.323 | ) | ||||||||
$11.080 | $11.240 | $11.200 | $11.470 | $11.610 | $11.390 | ||||||||||||||
(0.14% | ) | 2.95% | 0.39% | 1.52% | 4.74% | 6.45% | |||||||||||||
$30,608 | $24,880 | $28,237 | $28,004 | $25,125 | $19,201 | ||||||||||||||
1.60% | 1.60% | 1.61% | 1.60% | 1.64% | 1.65% | 3 | |||||||||||||
1.72% | 1.73% | 1.73% | 1.77% | 1.81% | 1.79% | ||||||||||||||
2.62% | 2.53% | 2.75% | 2.71% | 2.70% | 2.85% | ||||||||||||||
2.50% | 2.40% | 2.63% | 2.54% | 2.53% | 2.71% | ||||||||||||||
39% | 28% | 40% | 37% | 18% | 27% |
67
Financial highlights
Delaware Tax-Free USA Intermediate Fund Institutional Class
Selected data for each share of the Fund outstanding throughout the period were as follows:
12/31/081 | ||||
to 2/28/09 | ||||
(Unaudited) | ||||
Net asset value, beginning of period | $10.800 | |||
Income from investment operations: | ||||
Net investment income | 0.064 | |||
Net realized and unrealized gain on investments | 0.280 | |||
Total from investment operations | 0.344 | |||
Less dividends and distributions from: | ||||
Net investment income | (0.064 | ) | ||
Total dividends and distributions | (0.064 | ) | ||
Net asset value, end of period | $11.080 | |||
Total return2 | 3.08% | |||
Ratios and supplemental data: | ||||
Net assets, end of period (000 omitted) | $1 | |||
Ratio of expenses to average net assets | 0.60% | |||
Ratio of expenses to average net assets prior to fees waived and expense paid indirectly | 0.72% | |||
Ratio of net investment income to average net assets | 3.49% | |||
Ratio of net investment income to average net assets prior to fees waived and expense paid indirectly | 3.37% | |||
Portfolio turnover | 39% | 3 |
1 Date of commencement of operations; ratios have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
3 Portfolio turnover is representative of the Fund for the six months ended February 28, 2009. |
See accompanying notes
68
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 fees waived and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived and expense paid indirectly |
Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
70
Six Months Ended | Year Ended | ||||||||||||||||||
2/28/091 | 8/31/08 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | ||||||||||||||
(Unaudited) | |||||||||||||||||||
$9.510 | $10.030 | $10.320 | $10.380 | $10.010 | $9.730 | ||||||||||||||
0.244 | 0.484 | 0.482 | 0.477 | 0.503 | 0.496 | ||||||||||||||
(1.480 | ) | (0.520 | ) | (0.290 | ) | (0.060 | ) | 0.371 | 0.280 | ||||||||||
(1.236 | ) | (0.036 | ) | 0.192 | 0.417 | 0.874 | 0.776 | ||||||||||||
(0.244 | ) | (0.484 | ) | (0.482 | ) | (0.477 | ) | (0.504 | ) | (0.496 | ) | ||||||||
(0.244 | ) | (0.484 | ) | (0.482 | ) | (0.477 | ) | (0.504 | ) | (0.496 | ) | ||||||||
$8.030 | $9.510 | $10.030 | $10.320 | $10.380 | $10.010 | ||||||||||||||
(13.00% | ) | (0.37% | ) | 1.82% | 4.15% | 8.93% | 8.13% | ||||||||||||
$58,240 | $67,762 | $65,143 | $68,663 | $66,451 | $56,698 | ||||||||||||||
0.90% | 0.90% | 0.91% | 0.90% | 0.93% | 1.00% | ||||||||||||||
1.06% | 1.04% | 1.03% | 1.02% | 1.01% | 1.02% | ||||||||||||||
5.94% | 4.94% | 4.66% | 4.66% | 4.92% | 5.00% | ||||||||||||||
5.78% | 4.80% | 4.54% | 4.54% | 4.84% | 4.98% | ||||||||||||||
43% | 24% | 37% | 73% | 36% | 46% |
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 fees waived and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to fees waived and expense paid indirectly |
Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
72
Six Months Ended | Year Ended | ||||||||||||||||||
2/28/091 | 8/31/08 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | ||||||||||||||
(Unaudited) | |||||||||||||||||||
$9.530 | $10.050 | $10.350 | $10.400 | $10.030 | $9.760 | ||||||||||||||
0.213 | 0.410 | 0.404 | 0.400 | 0.426 | 0.421 | ||||||||||||||
(1.480 | ) | (0.520 | ) | (0.300 | ) | (0.050 | ) | 0.371 | 0.270 | ||||||||||
(1.267 | ) | (0.110 | ) | 0.104 | 0.350 | 0.797 | 0.691 | ||||||||||||
(0.213 | ) | (0.410 | ) | (0.404 | ) | (0.400 | ) | (0.427 | ) | (0.421 | ) | ||||||||
(0.213 | ) | (0.410 | ) | (0.404 | ) | (0.400 | ) | (0.427 | ) | (0.421 | ) | ||||||||
$8.050 | $9.530 | $10.050 | $10.350 | $10.400 | $10.030 | ||||||||||||||
(13.41% | ) | (1.12% | ) | 0.96% | 3.47% | 8.10% | 7.20% | ||||||||||||
$2,029 | $3,135 | $5,972 | $9,519 | $13,046 | $14,534 | ||||||||||||||
1.65% | 1.65% | 1.66% | 1.65% | 1.68% | 1.75% | ||||||||||||||
1.81% | 1.79% | 1.78% | 1.77% | 1.76% | 1.77% | ||||||||||||||
5.19% | 4.19% | 3.91% | 3.91% | 4.17% | 4.25% | ||||||||||||||
5.03% | 4.05% | 3.79% | 3.79% | 4.09% | 4.23% | ||||||||||||||
43% | 24% | 37% | 73% | 36% | 46% |
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 fees waived and expense paid indirectly |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets |
prior to fees waived and expense paid indirectly |
Portfolio turnover |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
74
Six Months Ended | Year Ended | ||||||||||||||||||
2/28/081 | 8/31/08 | 8/31/07 | 8/31/06 | 8/31/05 | 8/31/04 | ||||||||||||||
(Unaudited) | |||||||||||||||||||
$9.550 | $10.070 | $10.360 | $10.420 | $10.040 | $9.770 | ||||||||||||||
0.213 | 0.410 | 0.404 | 0.400 | 0.426 | 0.421 | ||||||||||||||
(1.480 | ) | (0.520 | ) | (0.290 | ) | (0.060 | ) | 0.381 | 0.270 | ||||||||||
(1.267 | ) | (0.110 | ) | 0.114 | 0.340 | 0.807 | 0.691 | ||||||||||||
(0.213 | ) | (0.410 | ) | (0.404 | ) | (0.400 | ) | (0.427 | ) | (0.421 | ) | ||||||||
(0.213 | ) | (0.410 | ) | (0.404 | ) | (0.400 | ) | (0.427 | ) | (0.421 | ) | ||||||||
$8.070 | $9.550 | $10.070 | $10.360 | $10.420 | $10.040 | ||||||||||||||
(13.38% | ) | (1.12% | ) | 1.06% | 3.36% | 8.19% | 7.19% | ||||||||||||
$5,878 | $6,998 | $4,848 | $5,332 | $5,234 | $4,798 | ||||||||||||||
1.65% | 1.65% | 1.66% | 1.65% | 1.68% | 1.75% | ||||||||||||||
1.81% | 1.79% | 1.78% | 1.77% | 1.76% | 1.77% | ||||||||||||||
5.19% | 4.19% | 3.91% | 3.91% | 4.17% | 4.25% | ||||||||||||||
5.03% | 4.05% | 3.79% | 3.79% | 4.09% | 4.23% | ||||||||||||||
43% | 24% | 37% | 73% | 36% | 46% |
75
Financial highlights
Delaware National High-Yield Municipal Bond Fund Institutional Class
Selected data for each share of the Fund outstanding throughout the period were as follows:
12/31/081 | |||
to 2/28/09 | |||
(Unaudited) | |||
Net asset value, beginning of period | $7.590 | ||
Income from investment operations: | |||
Net investment income | 0.085 | ||
Net realized and unrealized gain on investments | 0.440 | ||
Total from investment operations | 0.525 | ||
Less dividends and distributions from: | |||
Net investment income | (0.085 | ) | |
Total dividends and distributions | (0.085 | ) | |
Net asset value, end of period | $8.030 | ||
Total return2 | 6.91% | ||
Ratios and supplemental data: | |||
Net assets, end of period (000 omitted) | $1 | ||
Ratio of expenses to average net assets | 0.65% | ||
Ratio of expenses to average net assets | |||
prior to fees waived and expense paid indirectly | 0.81% | ||
Ratio of net investment income to average net assets | 6.42% | ||
Ratio of net investment income to average net assets | |||
prior to fees waived and expense paid indirectly | 6.26% | ||
Portfolio turnover | 43% | 3 |
1 Date of commencement of operations; ratios have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
3 Portfolio turnover is representative of the Fund for the six months ended February 28, 2009. |
See accompanying notes
76
Notes to financial statements | |
Delaware National Tax-Free Funds | February 28, 2009 (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 diversified under the Investment Company Act of 1940, as amended. The Funds offer Class A, Class B, Class C and Institutional Class shares. Class A shares are sold with a maximum 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. Class B shares may only be purchased through dividend reinvestment and certain permitted exchanges. Prior to June 1, 2007, Class B shares of 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 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 Delaware Tax-Free USA Intermediate Fund will automatically convert to Class A shares on a quarterly basis approximately five years after purchase. Class C shares are sold with a CDSC of 1%, if redeemed during the first twelve months. Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors.
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.
77
Notes to financial statements
Delaware National Tax-Free Funds
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. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. 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 Boards of Trustees (each a Board and collectively the Boards). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security. The Funds may use fair value pricing more frequently for securities traded primarily in non-U.S. markets because, among other things, most foreign markets close well before each Fund values its securities at 4:00 p.m. Eastern Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, government actions or pronouncements, aftermarket trading or news events, may have occurred in the interim. To account for this, the Funds may frequently value foreign securities using fair value prices based on third-party vendor modeling tools (international fair value pricing).
Federal Income Taxes — No provision for federal income taxes has been made as 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. The Funds evaluate 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 Funds did not record 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 each 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.
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.
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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 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 as contractually agreed to waive that portion, if any, of its management fee and reimburse each Fund to the extent necessary to ensure that total annual operating expenses (excluding 12b-1 plan expenses, taxes, interest, inverse floater program expenses, brokerage fees, certain insurance costs and non-routine expenses or costs including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations (collectively, “non-routine expenses”)) do not exceed 0.60%, 0.60%, and 0.65% of average daily net assets of Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund, respectively, through December 31, 2009. For purposes of these waivers and reimbursements, non-routine expenses may also include such additional costs and expenses, as may be agreed upon time to time by the Funds’ Boards and DMC. These expense waivers and reimbursements apply only to expenses paid directly by the Funds.
79
Notes to financial statements
Delaware National Tax-Free Funds
2. Investment Management, Administration Agreements and Other Transactions with Affiliates (continued)
Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to each Fund. 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. For the six months ended February 28, 2009, 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 | |||
$13,068 | $10,300 | $1,683 |
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-Fee USA Intermediate Fund, 0.25% of the average daily net assets of the Class A shares for 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 the Funds. The Board for Delaware Tax-Free USA Fund has adopted a formula for calculating 12b-1 plan fees for the 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 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. Institutional Class shares pay no distribution and service expenses. DDLP has contracted to waive distribution and service fees through December 31, 2009 in order to prevent distribution and service fees of Class A shares from exceeding 0.15% of average daily net assets for Delaware Tax-Free USA Intermediate Fund.
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At February 28, 2009, each Fund 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 | $177,342 | $131,615 | $20,011 | ||
Dividend disbursing, | |||||
transfer agent and fund | |||||
accounting oversight fees | |||||
and other expenses | |||||
payable to DSC | 35,145 | 42,467 | 4,419 | ||
Distribution fees payable | |||||
to DDLP | 117,756 | 70,707 | 17,418 | ||
Other expenses payable to DMC | |||||
and affiliates* | 45,095 | 35,331 | 6,484 |
*DMC, as part of its administrative services, pays operating expenses on behalf of each Fund and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, registration fees and trustees’ fees.
As provided in the investment management agreement, each Fund bears the cost of certain legal and tax services, including internal legal and tax services provided to each Fund by DMC and/or its affiliates’ employees. For the six months ended February 28, 2009, 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 | |||
$19,244 | $16,222 | $2,582 |
For the six months ended February 28, 2009, 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 | |||
$13,792 | $13,374 | $6,236 |
For the six months ended February 28, 2009, 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 | $ | — | $ | — | $ | — | |||||
Class B | 3,175 | — | 2,421 | ||||||||
Class C | 1,264 | 2,122 | 1,399 |
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Notes to financial statements
Delaware National Tax-Free Funds
2. | Investment Management, Administration Agreements and Other Transactions with Affiliates (continued) |
Trustees’ fees include expenses accrued by the Funds for each Trustee’s retainer and meeting fees. Certain officers of DMC, DSC and DDLP are officers and/or Trustees of the Trusts. These officers and Trustees are paid no compensation by the Funds.
3. Investments
For the six months ended February 28, 2009, 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 | $118,621,007 | $85,517,605 | $14,258,424 | ||
Sales | 93,730,289 | 78,684,404 | 14,118,627 |
At February 28, 2009, 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 28, 2009, 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 | $548,248,120 | $439,701,769 | $ 78,310,740 | ||||||||
Aggregate unrealized | |||||||||||
appreciation | $ 28,275,110 | $ 12,498,742 | $ 1,396,296 | ||||||||
Aggregate unrealized | |||||||||||
depreciation | (41,761,688 | ) | (13,316,640 | ) | (14,753,113 | ) | |||||
Net unrealized | |||||||||||
depreciation | $ (13,486,578 | ) | $ (817,898 | ) | $(13,356,817 | ) |
Effective September 1, 2008, the Funds adopted Financial Accounting Standards No. 157, Fair Value Measurements (FAS 157). FAS 157 defines fair value as the price that the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. FAS 157 also establishes a framework for measuring fair value and a three level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity.
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Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. Each Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.
Level 1 – inputs are quoted prices in active markets
Level 2 – inputs are observable, directly or indirectly
Level 3 – inputs are unobservable and reflect assumptions on the part of the reporting entity
The following table summarizes the valuation of each Fund’s investments by the FAS 157 fair value hierarchy levels as of February 28, 2009:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | ||||||||||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | ||||||||||
Level 1 | $ — | $ — | $ — | |||||||||
Level 2 | 534,761,542 | 438,883,871 | 64,953,923 | |||||||||
Level 3 | — | — | — | |||||||||
Total | $534,761,542 | $438,883,871 | $64,953,923 |
There were no Level 3 securities at the beginning or end of the period.
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, distributions from net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the six months ended February 28, 2009 and the year ended August 31, 2008 was as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | |||||||||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | |||||||||
Six months ended 2/28/09* | |||||||||||
Tax-exempt income | $11,806,144 | $ 7,013,373 | $1,970,925 | ||||||||
Ordinary income | 10,236 | — | 255 | ||||||||
Total | $11,816,380 | $ 7,013,373 | $1,971,180 | ||||||||
Year ended 8/31/08 | |||||||||||
Tax-exempt income | $27,608,512 | $12,780,404 | $3,633,792 | ||||||||
Ordinary income | 9,380 | 164,823 | — | ||||||||
Total | $27,617,892 | $12,945,227 | $3,633,792 |
*Tax information for the period ended February 28, 2009 is an estimate and the tax character of dividends and distributions may be redesignated at fiscal year end.
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Notes to financial statements
Delaware National Tax-Free Funds
5. Components of Net Assets on a Tax Basis
The components of net assets are estimated since final tax characteristics cannot be determined until fiscal year end. As of February 28, 2009, the estimated 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 | $573,655,709 | $446,324,608 | $ 86,538,634 | ||||||||
Distributions payable | (406,088 | ) | (235,252 | ) | (67,436 | ) | |||||
Undistributed tax-exempt | |||||||||||
income | 408,198 | 231,817 | 64,027 | ||||||||
Realized losses | |||||||||||
9/1/08 – 2/28/09 | (10,519,082 | ) | (5,773,119 | ) | (374,735 | ) | |||||
Post-October losses | (5,767,554 | ) | (788,157 | ) | (1,224,665 | ) | |||||
Capital loss carryforward | |||||||||||
as of 8/31/08 | (753,437 | ) | (2,502,031 | ) | (5,430,551 | ) | |||||
Unrealized depreciation | |||||||||||
of investments | (13,486,578 | ) | (817,898 | ) | (13,356,817 | ) | |||||
Net assets | $543,131,168 | $436,439,968 | $ 66,148,457 |
The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales.
Post-October losses represent losses realized on investment transactions from November 1, 2008 through February 28, 2009 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 | ||||||||||
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 | ||||||||||
2016 | 681,291 | 2,127,384 | — | ||||||||||
Total | $753,437 | $2,502,031 | $5,430,551 |
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For the six months ended February 28, 2009, the Funds had capital losses which may increase capital loss carryforwards.
Delaware Tax-Free | Delaware Tax-Free | Delaware National High-Yield | |||
USA Fund | USA Intermediate Fund | Municipal Bond Fund | |||
$(10,519,082) | $(5,773,119) | $(374,735) |
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 | Year | Six Months | Year | Six Months | Year | ||||||||||||
Ended | Ended | Ended | Ended | Ended | Ended | ||||||||||||
2/28/09 | 8/31/08 | 2/28/09 | 8/31/08 | 2/28/09 | 8/31/08 | ||||||||||||
Shares sold: | |||||||||||||||||
Class A | 9,389,645 | 3,388,412 | 11,293,290 | 18,324,376 | 711,256 | 1,773,356 | |||||||||||
Class B | 6,259 | 26,584 | 8,486 | 11,589 | 30,773 | 5,607 | |||||||||||
Class C | 382,911 | 406,318 | 814,657 | 646,630 | 120,045 | 372,132 | |||||||||||
Institutional Class | 102 | — | 95 | — | 134 | — | |||||||||||
Shares issued upon reinvestment of dividends and distributions: | |||||||||||||||||
Class A | 606,574 | 1,177,951 | 423,294 | 807,682 | 133,617 | 196,831 | |||||||||||
Class B | 9,628 | 22,514 | 891 | 2,797 | 3,525 | 6,395 | |||||||||||
Class C | 21,386 | 36,841 | 22,199 | 38,135 | 12,816 | 16,806 | |||||||||||
Institutional Class | 1 | — | — | — | 1 | — | |||||||||||
10,416,506 | 5,058,620 | 12,562,912 | 19,831,209 | 1,012,167 | 2,371,127 | ||||||||||||
Shares repurchased: | |||||||||||||||||
Class A | (6,824,544 | ) | (23,486,561 | ) | (11,427,816 | ) | (10,209,726 | ) | (720,989 | ) | (1,336,737 | ) | |||||
Class B | (173,857 | ) | (511,114 | ) | (38,220 | ) | (60,640 | ) | (111,205 | ) | (277,041 | ) | |||||
Class C | (169,194 | ) | (428,319 | ) | (286,563 | ) | (992,295 | ) | (137,185 | ) | (137,313 | ) | |||||
(7,167,595 | ) | (24,425,994 | ) | (11,752,599 | ) | (11,262,661 | ) | (969,379 | ) | (1,751,091 | ) | ||||||
Net increase (decrease) | 3,248,911 | (19,367,374 | ) | 810,313 | 8,568,548 | 42,788 | 620,036 |
For the six months ended February 28, 2009 and the year ended August 31, 2008, the following shares and values were converted from Class B to Class A shares. The respective amounts are included in Class B redemptions and Class A subscriptions in the tables above and the statements of changes in net assets.
85
Notes to financial statements
Delaware National Tax-Free Funds
6. Capital Shares (continued)
Six Months | |||||||||||
Ended | Year Ended | ||||||||||
2/28/09 | 8/31/08 | ||||||||||
Class B | Class A | Class B | Class A | ||||||||
Shares | Shares | Value | Shares | Shares | Value | ||||||
Delaware Tax-Free | |||||||||||
USA Fund | 32,499 | 32,478 | $340,398 | 227,491 | 227,437 | $2,547,827 | |||||
Delaware Tax-Free | |||||||||||
USA Intermediate Fund | 15,718 | 15,715 | 172,321 | 30,904 | 30,876 | 346,313 | |||||
Delaware National High-Yield | |||||||||||
Municipal Bond Fund | 11,367 | 11,382 | 87,771 | 101,537 | 101,780 | 1,007,808 |
7. Line of Credit
Each Fund, along with certain other funds in the Delaware Investments® Family of Funds (Participants), was a participant in a $225,000,000 revolving line of credit with The Bank of New York Mellon (BNY Mellon) to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. Under the agreement, the Participants were charged an annual commitment fee, which was allocated across the Participants on the basis of each Participant’s allocation of the entire facility. Participants were permitted to borrow up to a maximum of one third of their net assets under the agreement. The agreement expired on November 18, 2008.
Effective November 18, 2008, the Funds, along with the other Participants, entered into an amendment to the agreement with BNY Mellon for a $35,000,000 revolving line of credit. The agreement, as amended, is to be used as described above and operates in substantially the same manner as the original agreement. The agreement, as amended, expires on November 17, 2009. The Funds had no amounts outstanding as of February 28, 2009, or at any time during the period then ended.
8. Credit and Market Risk
The Funds concentrate their investments in securities issued by municipalities. The value of these investments may be adversely affected by new legislation within the states, regional or local economic conditions, and differing levels of supply and demand for municipal bonds. Many municipalities insure repayment for their obligations. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons and there is no assurance that the insurance company will meet its obligations. A real or perceived decline in creditworthiness of a bond insurer can have an adverse impact on
86
the value of insured bonds held in a Fund. At February 28, 2009, 27% of Delaware Tax-Free USA Fund’s net assets, 18% of the Delaware Tax-Free USA Intermediate Fund’s net assets, and 3% of Delaware National High-Yield Municipal Bond Fund’s net assets were insured by bond insurers. These securities have been identified on the statements of net assets.
Each Fund may invest a portion of its assets in high yield fixed income securities, which carry ratings of BB or lower by Standard & Poor’s Ratings Group (S&P) and/or Ba or lower by Moody’s Investors Service, Inc. (Moody’s), 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.
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, S&P, and/or Fitch Ratings due to the strong credit quality of the escrow securities and the irrevocable nature of the escrow deposit agreement.
87
Notes to financial statements
Delaware National Tax-Free Funds
8. Credit and Market Risk (continued)
Each Fund may invest up to 15% of its net 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 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. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to each Fund’s 15% limit on investments in illiquid securities. As of February 28, 2009, there were no Rule 144A securities. Illiquid securities have been identified on the statements of net assets.
9. 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.
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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 profile 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 | Ann R. Leven |
Chairman, President, and | Consultant |
Chief Executive Officer | ARL Associates |
Delaware Investments Family of Funds | New York, NY |
Philadelphia, PA | |
Thomas F. Madison | |
Thomas L. Bennett | President and Chief Executive Officer |
Private Investor | MLM Partners, Inc. |
Rosemont, PA | Minneapolis, MN |
John A. Fry | Janet L. Yeomans |
President | Vice President and Treasurer |
Franklin & Marshall College | 3M Corporation |
Lancaster, PA | St. Paul, MN |
Anthony D. Knerr | J. Richard Zecher |
Founder and Managing Director | Founder |
Anthony Knerr & Associates | Investor Analytics |
New York, NY | Scottsdale, AZ |
Lucinda S. Landreth | |
Former Chief Investment Officer | |
Assurant, Inc. | |
Philadelphia, PA |
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Affiliated officers | Contact information |
David F. Connor | Investment manager |
Vice President, Deputy General Counsel, and | Delaware Management Company, a series of |
Secretary | Delaware Management Business Trust |
Delaware Investments® Family of Funds | Philadelphia, PA |
Philadelphia, PA | |
National distributor | |
Daniel V. Geatens | Delaware Distributors, L.P. |
Vice President and Treasurer | Philadelphia, PA |
Delaware Investments Family of Funds | |
Philadelphia, PA | Shareholder servicing, dividend disbursing, |
and transfer agent | |
David P. O’Connor | Delaware Service Company, Inc. |
Senior Vice President, General Counsel, | 2005 Market Street |
and Chief Legal Officer | Philadelphia, PA 19103-7094 |
Delaware Investments Family of Funds | |
Philadelphia, PA | For shareholders |
800 523-1918 | |
Richard Salus | |
Senior Vice President and | For securities dealers and financial |
Chief Financial Officer | institutions representatives only |
Delaware Investments Family of Funds | 800 362-7500 |
Philadelphia, PA | |
Web site | |
www.delawareinvestments.com |
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.
90
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 4, 2009 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
PATRICK P. COYNE | |
By: | Patrick P. Coyne |
Title: | Chief Executive Officer |
Date: | May 4, 2009 |
RICHARD SALUS | |
By: | Richard Salus |
Title: | Chief Financial Officer |
Date: | May 4, 2009 |