Item 1. Reports to Stockholders
Fixed income mutual funds
Delaware Tax-Free USA Fund
Delaware Tax-Free USA Intermediate Fund
Delaware National High-Yield Municipal Bond Fund
August 31, 2018
Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Funds’ prospectus and their summary prospectuses, which may be obtained by visiting delawarefunds.com/literature or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.
You can obtain shareholder reports and prospectuses online instead of in the mail.
Visit delawarefunds.com/edelivery.
Experience Delaware Funds® by Macquarie
Macquarie Investment Management (MIM) is a global asset manager with offices throughout the United States, Europe, Asia, and Australia. We are active managers who prioritize autonomy and accountability at the investment team level in pursuit of opportunities that matter for our clients. Delaware Funds is one of the longest-standing mutual fund families, with more than 75 years in existence.
If you are interested in learning more about creating an investment plan, contact your financial advisor.
You can learn more about Delaware Funds or obtain a prospectus for Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund at delawarefunds.com/literature.
Manage your account online
| ● | | Check your account balance and transactions |
| ● | | View statements and tax forms |
| ● | | Make purchases and redemptions |
Visit delawarefunds.com/account-access.
Macquarie Asset Management (MAM) offers a diverse range of products including securities investment management, infrastructure and real asset management, and fund and equity-based structured products. Macquarie Investment Management (MIM) is the marketing name for certain companies comprising the asset management division of Macquarie Group. This includes the following registered investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, and Macquarie Capital Investment Management LLC.
The Funds are distributed by Delaware Distributors, L.P. (DDLP), an affiliate of MIMBT and Macquarie Group Limited.
Other than Macquarie Bank Limited (MBL), none of the entities noted are authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise. The Funds are governed by US laws and regulations.
Table of contents
Unless otherwise noted, views expressed herein are current as of Aug. 31, 2018, and subject to change for events occurring after such date.
The Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.
Advisory services provided by Delaware Management Company, a series of MIMBT, a US registered investment advisor.
All third-party marks cited are the property of their respective owners.
© 2018 Macquarie Management Holdings, Inc.
Portfolio management review
| | | | |
| Delaware Funds® by Macquarie national tax-free funds | | September 11, 2018 |
| | | | |
| Performance preview (for the year ended August 31, 2018) |
Delaware Tax-Free USA Fund (Institutional Class shares) | | 1-year return | | +1.61% |
Delaware Tax-Free USA Fund (Class A shares) | | 1-year return | | +1.44% |
Bloomberg Barclays Municipal Bond Index (benchmark) | | 1-year return | | +0.49% |
Lipper General & Insured Municipal Debt Funds Average | | 1-year return | | +0.84% |
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Tax-Free USA Fund, please see the table on page 5.
Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain investors. In addition, Institutional Class shares pay no distribution and service fee.
The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
The Lipper General & Insured Municipal Debt Funds Average compares funds that either invest primarily in municipal debt issues in the top four credit ratings or invest primarily in municipal debt issues insured as to timely payment.
Please see page 9 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
| | | | |
Delaware Tax-Free USA Intermediate Fund (Institutional Class shares) | | 1-year return | | +0.75% |
Delaware Tax-Free USA Intermediate Fund (Class A shares) | | 1-year return | | +0.57% |
Bloomberg Barclays 3–15 Year Blend Municipal Bond Index (benchmark) | | 1-year return | | +0.04% |
Lipper Intermediate Municipal Debt Funds Average | | 1-year return | | +0.04% |
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Tax-Free USA Intermediate Fund, please see the table on page 10.
Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain investors. In addition, Institutional Class shares pay no distribution and service fee.
The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
The Lipper Intermediate Municipal Debt Funds Average compares funds that invest in municipal debt issues with dollar-weighted average maturities of 5 to 10 years.
Please see page 14 for a description of the Index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
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| Delaware National High-Yield Municipal Bond Fund (Institutional Class shares) | | 1-year return | | +4.07% |
| Delaware National High-Yield Municipal Bond Fund (Class A shares) | | 1-year return | | +3.80% |
| Bloomberg Barclays Municipal Bond Index (benchmark) | | 1-year return | | +0.49% |
| Lipper High Yield Municipal Debt Funds Average | | 1-year return | | +3.24% |
Past performance does not guarantee future results.
For complete, annualized performance for Delaware National High-Yield Municipal Bond Fund, please see the table on page 15.
Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain investors. In addition, Institutional Class shares pay no distribution and service fee.
The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
The Lipper High Yield Municipal Debt Funds Average compares funds that invest at least 50% of assets in lower-rated municipal debt issues.
Please see page 19 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
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Portfolio management review
Delaware Funds® by Macquarie national tax-free funds
Economic backdrop
US economic data remained healthy throughout the Funds’ fiscal year ended Aug. 31, 2018, although concern about the longer-term impact of global trade conflict emerged toward period end.
US gross domestic product (GDP), a measure of the goods and services the nation produces, increased throughout the fiscal year. In the third quarter of 2017, for example, US GDP expanded by an annualized 2.8% rate, followed by a 2.3% increase in the fourth quarter of 2017. US GDP grew by 2.2% in the first quarter of 2018 and an estimated 4.2% in the second quarter. That 4.2% annual pace was the largest quarterly gain in nearly four years. Employment trends also remained healthy, with the US jobless rate finishing August 2018 at 3.9%, down half a percentage point from a year earlier. (Source: US Bureau of Economic Analysis and US Bureau of Labor Statistics.)
Against this backdrop of steady economic expansion, job growth, and manageable inflation, the US Federal Reserve continued to gradually raise interest rates. The Fed increased its target short-term interest rate by 0.25 percentage points on three separate occasions during the Funds’ fiscal year — in December 2017 and in March and June 2018. On Aug. 31, 2018, the federal funds rate ranged from 1.75% to 2.00%, up from 1.00% to 1.25% a year earlier.
(Source: Bloomberg.)
Municipal bond market conditions
In this strong economic environment, the US municipal bond market, as measured by the Bloomberg Barclays Municipal Bond Index, returned +0.49% for the fiscal year ended Aug. 31, 2018. Longer-term municipal bonds outpaced their shorter-term counterparts as the yield curve flattened, meaning yields on short-term bonds rose more than those on long-term issues. Short-term yields rose in line with the Fed’s
interest rate increases, while fairly benign inflation kept a lid on long-term municipal yields.
To indicate the outperformance of longer-dated municipal debt relative to shorter-maturity municipal debt, the following table shows municipal bond returns by maturity for the Funds’ fiscal year ended Aug. 31, 2018:
| | |
| Returns by maturity | | |
5 years | | -0.74% |
10 years | | -0.10% |
22+ years | | 1.28% |
Source: Bloomberg. | | |
Much of the yield curve’s flattening took place in the fourth quarter of 2017, as investors sought to understand the potential market impact of federal tax reform legislation, which ultimately passed in late December. During this time, the supply of municipal bonds increased sharply, as issuers, anticipating unfavorable tax-policy changes, rushed debt to market. One of these expected changes — the ability to issue so-called private-activity bonds, a broad category that includes healthcare, private education, and toll road bonds, among others — didn’t make it into the final legislation.
However, another proposed change did come to pass: the elimination of advance refundings. Under the new legislation, issuers wishing to refinance bonds through the issuance of newer debt must do so within 90 days of the bonds’ call dates. Many issuers ultimately opted to bring their debt to market ahead of the law’s passage. This situation led to tighter bond supply in the second half of the Funds’ fiscal year, which, coupled with solid investor demand, provided a tailwind for the municipal bond market.
Continuing a trend in place for several years, bonds of lower-rated municipal issuers again outperformed bonds of higher-quality issuers — a situation known as credit spread narrowing. As investors anticipated that interest rates would continue to rise slowly, lower-rated, higher yielding
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municipal bonds remained attractive to investors in a continued low-rate environment. Bonds rated below investment grade (below BBB) performed especially well amid strong demand coupled with limited supply of the securities.
The following table, which provides municipal bond performance by credit quality rating for the Funds’ fiscal year, further highlights this trend:
| | |
Returns by credit rating | | |
AAA | | -0.23% |
AA | | 0.22% |
A | | 0.78% |
BBB | | 2.76% |
BB and below | | 6.21% |
Source: Bloomberg.
Focused on credit research
For the three Funds discussed in this report, we maintained a consistent management strategy, which we do regardless of market conditions. We have a bottom-up investment approach, meaning we evaluate individual securities one at a time. We rely on individual credit research to find securities that we believe provide a desirable risk-reward balance.
This approach often leads to substantial allocations within the Funds to bonds in the lower-investment-grade or below-investment-grade credit tiers, where we seek to add value for shareholders through higher yielding bonds that, in our view, display solid underlying credit.
As of the fiscal year end on Aug. 31, 2018, approximately 41% of the net assets of Delaware Tax-Free USA Fund was invested in bonds with credit ratings of A and BBB, the two lowest credit tiers of the investment grade bond universe. Roughly 43% of the net assets of Delaware Tax-Free USA Intermediate Fund was held in these credit tiers.
In addition, both Funds had meaningful allocations to high yield municipal bonds, securities with credit ratings below BBB. By prospectus, these
two Funds have the latitude to invest up to 20% of the portfolio in these credit tiers, although the full allocation was not utilized throughout the period. When investing in this segment of the market, we pay close attention to credit risk, focusing on securities that we believe offer sufficiently attractive income relative to the added risk.
Consistent with its mandate, Delaware National High-Yield Municipal Bond Fund had the largest exposure to below-investment-grade bonds of the three Funds. As of Aug. 31, 2018, nearly 60% of the Fund’s net assets was invested in bonds rated below BBB, including nonrated bonds.
Portfolio positioning
We entered this fiscal year generally comfortable with the Funds’ positioning. As a result, we were highly selective about making new purchases, seeking securities that provided what we viewed as a compelling risk-reward trade-off.
In all three Funds, and particularly in the longer-maturity Delaware Tax-Free USA Fund and Delaware National High-Yield Municipal Bond Fund, many of our holdings were originally purchased a decade or more ago when significantly higher yields were available. Thus, we have tended not to replace many existing positions with newer bonds, unless we believe they offer sufficient value to justify such an exchange. Once again, that remained our strategy over the past 12 months, and we expect to continue this approach as long as most of the Funds’ existing holdings remain more attractive to us than the new bonds available for purchase.
Notable performance factors
As indicated earlier, bonds with longer maturities tended to outperform shorter-maturity bonds, while lower-rated issues generally performed better than bonds of higher credit quality. Accordingly, many of the Funds’ strongest- and weakest-performing securities during this fiscal year followed this trend.
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Portfolio management review
Delaware Funds® by Macquarie national tax-free funds
The leading individual performer in all three Funds, for example, was a position in zero-coupon Golden State tobacco-securitization bonds. These below-investment-grade issues returned 37%, benefiting from continued strong demand coupled with a shrinking national supply of tobacco bonds as several states opted to refund their tobacco-securitization issues during the period. Investors began to anticipate that the Golden State tobacco bonds would be refunded, boosting their price. A separate California tobacco bond issue for Fresno County also performed well, adding to the results of Delaware National High-Yield Municipal Bond Fund.
Another notably strong performer in Delaware Tax-Free USA Fund and Delaware Tax-Free USA Intermediate Fund was a position in nonrated tax-increment-finance bonds of Wyandotte County (Kansas). Although these bonds lacked especially long maturities, their below-investment-grade credit profile provided a tailwind for the securities’ performance. Meanwhile, in Delaware National High-Yield Municipal Bond Fund, zero-coupon bonds for the North Star Charter School in Eagle, Idaho, performed notably well, benefiting from their long maturities and lower credit rating, as well as the school’s improved financial performance relative to past years.
In contrast, the Funds’ biggest individual detractors tended to be bonds displaying some combination of short maturities, higher credit ratings, or both. In Delaware Tax-Free USA Fund, for example, the Fund was hampered by AA-rated San Antonio electric utility bonds maturing in 2024.
Pre-refunded bonds issued for Illinois healthcare provider Memorial Group also hampered this Fund, as well as Delaware Tax-Free USA Intermediate Fund. These securities’ near-term maturity and high credit quality (due to their backing by escrowed US government bonds) resulted in a modestly negative return. A position in New York City Transitional Finance Authority dedicated-tax bonds, which featured the highest possible credit rating of AAA and an eight-year maturity, also detracted from Delaware Tax-Free USA Intermediate Fund.
In Delaware National High-Yield Municipal Bond Fund, the largest detractor was a position in BB-rated Texas bonds for the Buckingham Senior Living Community. Although these securities struggled as the issuer experienced management turnover and a weakening financial position, we are hopeful that a return to an earlier management team could lead to better future financial performance for the securities.
Performance for Delaware National High-Yield Municipal Bond Fund was also hampered by a position in Encore Education charter school bonds. Despite their relatively lower credit rating and longer maturity, the issuer fell short of meeting certain academic standards, causing the bonds to lag during the period, declining more than 3%. We continued to see the issuer as creditworthy, however, and maintained the Fund’s position, anticipating better results in the future.
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| | |
| Performance summaries |
| Delaware Tax-Free USA Fund | | August 31, 2018 |
The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.
| | | | | | | | | | | | | | | | |
| Fund and benchmark performance1, 2 | | Average annual total returns through August 31, 2018 | |
| | | | |
| | | 1 year | | | 5 years | | | 10 years | | | Lifetime | |
Class A (Est. Jan. 11, 1984) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +1.44% | | | | +4.52% | | | | +4.69% | | | | +6.41% | |
Including sales charge | | | -3.12% | | | | +3.57% | | | | +4.21% | | | | +6.27% | |
Class C (Est. Nov. 29, 1995) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +0.68% | | | | +3.73% | | | | +3.90% | | | | +3.69% | |
Including sales charge | | | -0.30% | | | | +3.73% | | | | +3.90% | | | | +3.69% | |
Institutional Class (Est. Dec. 31, 2008) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +1.61% | | | | +4.76% | | | | n/a | | | | +5.98% | |
Including sales charge | | | +1.61% | | | | +4.76% | | | | n/a | | | | +5.98% | |
Bloomberg Barclays Municipal Bond Index | | | +0.49% | | | | +4.12% | | | | +4.32% | | | | +4.91%* | |
*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.
1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.
Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 7. Performance would have been lower had expense limitations not been in effect.
Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.
Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual distribution and service fee of 0.25% of average daily net assets. The Board has adopted a formula for calculating 12b-1 plan fees for the Fund’s
Class A shares. The Fund’s Class A shares are currently subject to a blended 12b-1 fee equal to the sum of: (i) 0.10% of average daily net assets representing shares acquired prior to June 1, 1992, and (ii) 0.25% of average daily net assets representing shares acquired on or after June 1, 1992. All Class A shares currently bear 12b-1 fees at the same rate, the blended rate, currently 0.25% of average daily net assets, based on the formula described above. This method of calculating Class A 12b-1 fees may be discontinued at the sole discretion of the Board. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that
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Performance summaries
Delaware Tax-Free USA Fund
contingent deferred sales charges did not apply or that the investment was not redeemed.
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.
The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a Portfolio will be prepaid prior to maturity, at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.
High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.
Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.
Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.
This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.
6
2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale and dividend interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations (collectively, nonroutine expenses)) from exceeding 0.56% of the Fund’s average daily net assets during the period from Sept. 1, 2017 through Aug. 31, 2018.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.
| | | | | | |
| Fund expense ratios | | Class A | | Class C | | Institutional Class |
Total annual operating expenses | | 0.96% | | 1.71% | | 0.71% |
(without fee waivers) | | | | | | |
Net expenses | | 0.81% | | 1.56% | | 0.56% |
(including fee waivers, if any) | | | | | | |
Type of waiver | | Contractual | | Contractual | | Contractual |
*The aggregate contractual waiver period covering this report is from Dec. 29, 2016 through Dec. 29, 2018.
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Performance summaries
Delaware Tax-Free USA Fund
Performance of a $10,000 investment1
Class A shares
Average annual total returns from Aug. 31, 2008 through Aug. 31, 2018
Institutional Class shares
Average annual total returns from Dec. 31, 2008 (inception date) through Aug. 31, 2018
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1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2008, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of Aug. 31, 2008.
The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on Dec. 31, 2008, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of Dec. 31, 2008.
The graphs do not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense
limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 7. Please note additional details on pages 5 through 9.
The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund share classes will vary due to different charges and expenses.
| | | | | | |
| | | Nasdaq symbols | | CUSIPs | | |
Class A | | DMTFX | | 245909106 | | |
Class C | | DUSCX | | 245909700 | | |
Institutional Class | | DTFIX | | 24610H104 | | |
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| | |
| Performance summaries |
| Delaware Tax-Free USA Intermediate Fund | | August 31, 2018 |
The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.
| | | | | | | | | | | | | | | | |
| Fund and benchmark performance1, 2 | | Average annual total returns through August 31, 2018 | |
| | | | |
| | | 1 year | | | 5 years | | | 10 years | | | Lifetime | |
Class A (Est. Jan. 7, 1993) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +0.57% | | | | +3.09% | | | | +3.58% | | | | +4.60% | |
Including sales charge | | | -2.18% | | | | +2.52% | | | | +3.29% | | | | +4.48% | |
Class C (Est. Nov. 29, 1995) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | -0.28% | | | | +2.20% | | | | +2.70% | | | | +3.41% | |
Including sales charge | | | -1.25% | | | | +2.20% | | | | +2.70% | | | | +3.41% | |
Institutional Class (Est. Dec. 31, 2008) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +0.75% | | | | +3.22% | | | | n/a | | | | +4.25% | |
Including sales charge | | | +0.75% | | | | +3.22% | | | | n/a | | | | +4.25% | |
Bloomberg Barclays 3–15 Year Blend | | | | | | | | | | | | | | | | |
Municipal Bond Index | | | +0.04% | | | | +3.43% | | | | +4.00% | | | | +4.21%* | |
*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.
1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.
Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 12. Performance would have been lower had expense limitations not been in effect.
Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.
Class A shares are sold with a maximum front-end sales charge of 2.75%, and have an annual distribution and service fee of 0.25% of average
daily net assets. This fee was contractually limited to 0.15% of average daily net assets from Sept. 1, 2017 through Aug. 31, 2018.** Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.
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The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.
High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.
Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local taxes and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.
Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.
This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.
11
Performance summaries
Delaware Tax-Free USA Intermediate Fund
2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale and dividend interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations (collectively, nonroutine expenses)) from exceeding 0.50% of the Fund’s average daily net assets during the period from April 1, 2018 to Aug. 31, 2018.*** Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section of this report for the most recent expense ratios.
| | | | | | |
| Fund expense ratios | | Class A | | Class C | | Institutional Class |
Total annual operating expenses (without fee waivers) | | 0.93% | | 1.68% | | 0.68% |
Net expenses (including fee waivers, if any) | | 0.65% | | 1.50% | | 0.50% |
Type of waiver | | Contractual | | Contractual | | Contractual |
**The aggregate contractual waiver period covering this report is from Dec. 29, 2016 through Dec. 29, 2018.
***For the period Sept. 1, 2017 to March 31, 2018, the waiver was set at 0.60% of the Fund’s average daily net assets. The aggregate contractual waiver period covering this report is from Dec. 29, 2016 through April 1, 2019.
12
Performance of a $10,000 investment1
Class A shares
Average annual total returns from Aug. 31, 2008 through Aug. 31, 2018
Institutional Class shares
Average annual total returns from Dec. 31, 2008 (inception date) through Aug. 31, 2018
13
Performance summaries
Delaware Tax-Free USA Intermediate Fund
1The “Performance of a $10,000 investment” graph for Class A share assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2008, and includes the effect of a 2.75% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays 3–15 Year Blend Municipal Bond Index as of Aug. 31, 2008.
The “Performance of a $10,000 investment” graph for Institutional shares assumes $10,000 invested in Institutional Class shares of the Fund on Dec. 31, 2008, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays 3–15 Year Blend Municipal Bond Index as of Dec. 31, 2008.
The graphs do not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been
lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 12. Please note additional details on pages 10 through 14.
The Bloomberg Barclays 3–15 Year Blend Municipal Bond Index measures the total return performance of investment grade, US tax-exempt bonds with maturities from 2 to 17 years.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund share classes will vary due to different charges and expenses.
| | | | | | | | |
| | | Nasdaq symbols | | CUSIPs | | | | |
Class A | | DMUSX | | 245909304 | | | | |
Class C | | DUICX | | 245909882 | | | | |
Institutional Class | | DUSIX | | 24610H203 | | | | |
14
| | |
| Performance summaries |
| Delaware National High-Yield Municipal Bond Fund | | August 31, 2018 |
The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.
| | | | | | | | | | | | | | | | |
| Fund and benchmark performance1, 2 | | Average annual total returns through August 31, 2018 | |
| | | | |
| | | 1 year | | | 5 years | | | 10 years | | | Lifetime | |
Class A (Est. Sept. 22, 1986) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +3.80% | | | | +6.88% | | | | +6.18% | | | | +6.22% | |
Including sales charge | | | -0.87% | | | | +5.91% | | | | +5.69% | | | | +6.07% | |
Class C (Est. May 26, 1997) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +3.03% | | | | +6.07% | | | | +5.38% | | | | +4.56% | |
Including sales charge | | | +2.03% | | | | +6.07% | | | | +5.38% | | | | +4.56% | |
Institutional Class (Est. Dec. 31, 2008) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +4.07% | | | | +7.14% | | | | n/a | | | | +9.04% | |
Including sales charge | | | +4.07% | | | | +7.14% | | | | n/a | | | | +9.04% | |
Bloomberg Barclays Municipal Bond Index | | | +0.49% | | | | +4.12% | | | | +4.32% | | | | +4.91%* | |
*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.
1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.
Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 17. Performance would have been lower had expense limitations not been in effect.
Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.
Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual distribution and service fee of 0.25% of average daily net assets. Performance for Class A shares,
excluding sales charges, assumes that no front-end sales charge applied.
Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.
The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.
15
Performance summaries
Delaware National High-Yield Municipal Bond Fund
High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.
Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local taxes and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.
Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.
This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.
16
2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale and dividend interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations (collectively, nonroutine expenses)) from exceeding 0.60% of the Fund’s average daily net assets during the period from Sept. 1, 2017 through Aug. 31, 2018.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section of this report for the most recent expense ratios.
| | | | | | |
| Fund expense ratios | | Class A | | Class C | | Institutional Class |
Total annual operating expenses (without fee waivers) | | 0.94% | | 1.69% | | 0.69% |
Net expenses (including fee waivers, if any) | | 0.85% | | 1.60% | | 0.60% |
Type of waiver | | Contractual | | Contractual | | Contractual |
*The aggregate contractual waiver period covering this report is from Dec. 29, 2016 through Dec. 29, 2018.
17
Performance summaries
Delaware National High-Yield Municipal Bond Fund
Performance of a $10,000 investment1
Class A shares
Average annual total returns from Aug. 31, 2008 through Aug. 31, 2018
Institutional Class shares
Average annual total returns from Dec. 31, 2008 (inception date) through Aug. 31, 2018
18
1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on Aug. 31, 2008, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of Aug. 31, 2008.
The “Performance of a $10,000 investment” graph for Institutional Class assumes $10,000 invested in Institutional Class shares of the Fund on Dec. 31, 2008, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of Dec. 31, 2008.
The graphs do not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense
limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 17. Please note additional details on pages 15 through 19.
The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund share classes will vary due to different charges and expenses.
| | | | | | | | |
| | | Nasdaq symbols | | CUSIPs | | | | |
Class A | | CXHYX | | 928928241 | | | | |
Class C | | DVHCX | | 928928225 | | | | |
Institutional Class | | DVHIX | | 24610H302 | | | | |
19
Disclosure of Fund expenses
For the six-month period from March 1, 2018 to August 31, 2018 (Unaudited)
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 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 six-month period from March 1, 2018 to Aug. 31, 2018.
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 Funds 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.
20
Delaware Tax-Free USA Fund
Expense analysis of an investment of $1,000
| | | | | | | | | | | | | | | | | | | | |
| | | Beginning
Account Value
3/1/18 | | Ending
Account Value
8/31/18 | | Annualized
Expense Ratio | | Expenses Paid During Period
3/1/18 to 8/31/18* |
Actual Fund return† | | | | | | | | | | | | | | | | | | | | |
Class A | | | | $1,000.00 | | | | | $1,020.10 | | | | | 0.81 | % | | | | $4.12 | |
Class C | | | | 1,000.00 | | | | | 1,016.20 | | | | | 1.56 | % | | | | 7.93 | |
Institutional Class | | | | 1,000.00 | | | | | 1,020.50 | | | | | 0.56 | % | | | | 2.85 | |
| Hypothetical 5% return (5% return before expenses) | | | | | | | | | | | |
Class A | | | | $1,000.00 | | | | | $1,021.12 | | | | | 0.81 | % | | | | $4.13 | |
Class C | | | | 1,000.00 | | | | | 1,017.34 | | | | | 1.56 | % | | | | 7.93 | |
Institutional Class | | | | 1,000.00 | | | | | 1,022.38 | | | | | 0.56 | % | | | | 2.85 | |
| | |
| Delaware Tax-Free USA Intermediate Fund | | | | | | | | | | | |
| Expense analysis of an investment of $1,000 | | | | | | | | | | | |
| | | | |
| | | Beginning
Account Value
3/1/18 | | Ending
Account Value
8/31/18 | | Annualized
Expense Ratio | | Expenses Paid During Period
3/1/18 to 8/31/18* |
Actual Fund return† | | | | | | | | | | | | | | | | | | | | |
Class A | | | | $1,000.00 | | | | | $1,017.30 | | | | | 0.67 | % | | | | $3.41 | |
Class C | | | | 1,000.00 | | | | | 1,012.10 | | | | | 1.52 | % | | | | 7.71 | |
Institutional Class | | | | 1,000.00 | | | | | 1,017.20 | | | | | 0.52 | % | | | | 2.64 | |
| Hypothetical 5% return (5% return before expenses) | | | | | | | | | | | |
Class A | | | | $1,000.00 | | | | | $1,021.83 | | | | | 0.67 | % | | | | $3.41 | |
Class C | | | | 1,000.00 | | | | | 1,017.54 | | | | | 1.52 | % | | | | 7.73 | |
Institutional Class | | | | 1,000.00 | | | | | 1,022.58 | | | | | 0.52 | % | | | | 2.65 | |
21
Disclosure of Fund expenses
For the six-month period from March 1, 2018 to August 31, 2018 (Unaudited)
Delaware National High-Yield Municipal Bond Fund
Expense analysis of an investment of $1,000
| | | | | | | | | | | | | | | | | | | | |
| | | Beginning
Account Value
3/1/18 | | Ending
Account Value
8/31/18 | | Annualized
Expense Ratio | | Expenses Paid During Period
3/1/18 to 8/31/18* |
Actual Fund return† | | | | | | | | | | | | | | | | | | | | |
Class A | | | $ | 1,000.00 | | | | $ | 1,029.90 | | | | | 0.85 | % | | | $ | 4.35 | |
Class C | | | | 1,000.00 | | | | | 1,026.00 | | | | | 1.60 | % | | | | 8.17 | |
Institutional Class | | | | 1,000.00 | | | | | 1,031.10 | | | | | 0.60 | % | | | | 3.07 | |
| Hypothetical 5% return (5% return before expenses) | | | | | | | | | | | |
Class A | | | $ | 1,000.00 | | | | $ | 1,020.92 | | | | | 0.85 | % | | | $ | 4.33 | |
Class C | | | | 1,000.00 | | | | | 1,017.14 | | | | | 1.60 | % | | | | 8.13 | |
Institutional Class | | | | 1,000.00 | | | | | 1,022.18 | | | | | 0.60 | % | | | | 3.06 | |
| *“ | Expenses Paid During Period” are equal to the relevant Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). |
| † | Because actual returns reflect only the most recent six-month period, the returns shown may differ significantly from fiscal year returns. |
22
| | |
| Security type / sector / state / territory allocations |
| Delaware Tax-Free USA Fund | | As of August 31, 2018 (Unaudited) |
Sector designations may be different than the sector designations presented in other fund materials.
| | | | | |
| Security type / sector | | Percentage of net assets |
Municipal Bonds* | | 98.68% |
Corporate Revenue Bonds | | 14.78% |
Education Revenue Bonds | | 6.25% |
Electric Revenue Bonds | | 2.97% |
Healthcare Revenue Bonds | | 13.09% |
Lease Revenue Bonds | | 3.95% |
Local General Obligation Bonds | | 10.63% |
Pre-Refunded/Escrowed to Maturity Bonds | | 16.76% |
Special Tax Revenue Bonds | | 6.47% |
State General Obligation Bonds | | 8.43% |
Transportation Revenue Bonds | | 14.09% |
Water & Sewer Revenue Bonds | | 1.26% |
Short-Term Investments | | 1.31% |
Total Value of Securities | | 99.99% |
Receivables and Other Assets Net of Liabilities | | 0.01% |
Total Net Assets | | 100.00% |
* As of the date of this report, Delaware Tax-Free USA Fund held bonds issued by or on behalf of territories and the states of the US as follows:
| | | | | |
| State / territory | | Percentage of net assets |
Alabama | | 1.24% |
Alaska | | 0.86% |
Arizona | | 4.61% |
California | | 17.46% |
Colorado | | 2.58% |
Connecticut | | 1.38% |
Delaware | | 0.13% |
Florida | | 0.73% |
Georgia | | 1.00% |
Illinois | | 7.04% |
Indiana | | 0.74% |
Kansas | | 0.24% |
Louisiana | | 0.42% |
Maryland | | 7.65% |
Massachusetts | | 1.43% |
Minnesota | | 1.34% |
Mississippi | | 0.76% |
Missouri | | 2.06% |
Nebraska | | 2.04% |
New Jersey | | 6.86% |
23
Security type / sector / state / territory allocations
Delaware Tax-Free USA Fund
| | |
| State / territory | | Percentage of net assets |
New York | | 13.68% |
North Carolina | | 1.92% |
Ohio | | 4.62% |
Oklahoma | | 3.04% |
Oregon | | 0.18% |
Pennsylvania | | 3.13% |
Tennessee | | 0.95% |
Texas | | 7.75% |
US Virgin Islands | | 0.06% |
Utah | | 0.66% |
Virginia | | 1.88% |
Wisconsin | | 1.55% |
Total Value of Securities | | 99.99% |
24
| | |
| Security type / sector / state / territory allocations |
| Delaware Tax-Free USA Intermediate Fund | | As of August 31, 2018 (Unaudited) |
Sector designations may be different than the sector designations presented in other fund materials.
| | |
| Security type / sector | | Percentage of net assets |
Municipal Bonds* | | 98.97% |
Corporate Revenue Bonds | | 16.26% |
Education Revenue Bonds | | 5.19% |
Electric Revenue Bonds | | 3.25% |
Healthcare Revenue Bonds | | 9.44% |
Lease Revenue Bonds | | 4.69% |
Local General Obligation Bonds | | 5.72% |
Pre-Refunded/Escrowed to Maturity Bonds | | 11.20% |
Special Tax Revenue Bonds | | 9.22% |
State General Obligation Bonds | | 14.74% |
Transportation Revenue Bonds | | 16.08% |
Water & Sewer Revenue Bonds | | 3.18% |
Short-Term Investments | | 1.31% |
Total Value of Securities | | 100.28% |
Liabilities Net of Receivables and Other Assets | | (0.28%) |
Total Net Assets | | 100.00% |
*As of the date of this report, Delaware Tax-Free USA Intermediate Fund held bonds issued by or on behalf of territories and the states of the US as follows: |
| State / territory | | Percentage of net assets |
Alabama | | 1.05% |
Alaska | | 0.54% |
Arizona | | 9.89% |
California | | 15.93% |
Colorado | | 3.35% |
Connecticut | | 1.59% |
Delaware | | 0.14% |
Florida | | 1.64% |
Georgia | | 0.79% |
Guam | | 0.55% |
Idaho | | 0.57% |
Illinois | | 5.69% |
Iowa | | 0.09% |
Kansas | | 0.30% |
Louisiana | | 2.72% |
Maryland | | 2.75% |
Massachusetts | | 1.27% |
Michigan | | 0.79% |
Minnesota | | 2.71% |
Mississippi | | 1.31% |
25
Security type / sector / state / territory allocations
Delaware Tax-Free USA Intermediate Fund
| | |
| State / territory | | Percentage of net assets |
Missouri | | 1.14% |
Montana | | 0.09% |
New Jersey | | 4.12% |
New York | | 15.88% |
Ohio | | 2.17% |
Oklahoma | | 0.56% |
Oregon | | 1.20% |
Pennsylvania | | 5.69% |
Tennessee | | 0.81% |
Texas | | 9.30% |
Utah | | 0.45% |
Virginia | | 2.40% |
Washington | | 1.26% |
Wisconsin | | 1.54% |
Total Value of Securities | | 100.28% |
26
| | |
| Security type / sector / state / territory allocations |
| Delaware National High-Yield Municipal Bond Fund | | As of August 31, 2018 (Unaudited) |
Sector designations may be different than the sector designations presented in other fund materials.
| | |
| Security type / sector | | Percentage of net assets |
Municipal Bonds* | | 99.11% |
Corporate Revenue Bonds | | 21.76% |
Education Revenue Bonds | | 13.48% |
Electric Revenue Bonds | | 0.17% |
Healthcare Revenue Bonds | | 27.58% |
Housing Revenue Bonds | | 0.53% |
Lease Revenue Bonds | | 4.53% |
Local General Obligation Bonds | | 3.60% |
Pre-Refunded/Escrowed to Maturity Bonds | | 6.78% |
Resource Recovery Revenue Bonds | | 1.35% |
Special Tax Revenue Bonds | | 6.90% |
State General Obligation Bonds | | 2.84% |
Transportation Revenue Bonds | | 6.78% |
Water & Sewer Revenue Bonds | | 2.81% |
Short-Term Investment | | 0.09% |
Total Value of Securities | | 99.20% |
Receivables and Other Assets Net of Liabilities | | 0.80% |
Total Net Assets | | 100.00% |
*As of the date of this report, Delaware National High-Yield Municipal Bond Fund held bonds issued by or on behalf of territories and the states of the US as follows: |
| State / territory | | Percentage of net assets |
Alabama | | 3.38% |
Alaska | | 0.65% |
Arizona | | 5.47% |
California | | 16.10% |
Colorado | | 3.02% |
Connecticut | | 0.20% |
Delaware | | 0.65% |
District of Columbia | | 0.52% |
Florida | | 3.09% |
Georgia | | 0.57% |
Hawaii | | 1.09% |
Idaho | | 0.64% |
Illinois | | 8.98% |
Indiana | | 0.95% |
Iowa | | 0.51% |
Kansas | | 0.56% |
Kentucky | | 1.30% |
Louisiana | | 1.32% |
27
Security type / sector / state / territory allocations
Delaware National High-Yield Municipal Bond Fund
| | |
| State / territory | | Percentage of net assets |
Maine | | 0.14% |
Maryland | | 1.47% |
Massachusetts | | 0.08% |
Michigan | | 0.64% |
Minnesota | | 1.94% |
Mississippi | | 0.08% |
Missouri | | 2.10% |
Montana | | 0.10% |
Nebraska | | 0.63% |
Nevada | | 0.70% |
New Hampshire | | 0.11% |
New Jersey | | 4.60% |
New York | | 8.60% |
North Carolina | | 0.46% |
Ohio | | 6.83% |
Oklahoma | | 0.83% |
Oregon | | 0.43% |
Pennsylvania | | 5.31% |
Puerto Rico | | 0.45% |
South Carolina | | 0.07% |
Tennessee | | 0.43% |
Texas | | 6.44% |
Utah | | 0.10% |
Vermont | | 0.09% |
Virginia | | 2.86% |
Washington | | 1.43% |
West Virginia | | 0.20% |
Wisconsin | | 3.00% |
Wyoming | | 0.08% |
Total Value of Securities | | 99.20% |
28
| | |
| Schedules of investments |
| Delaware Tax-Free USA Fund | | August 31, 2018 |
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds – 98.68% | | | | | | | | |
Corporate Revenue Bonds – 14.78% | | | | | | | | |
Buckeye, Ohio Tobacco Settlement Financing Authority | | | | | | | | |
(Asset-Backed Senior Turbo) | | | | | | | | |
Series A-2 5.875% 6/1/47 | | | 12,000,000 | | | $ | 12,076,080 | |
Series A-2 6.50% 6/1/47 | | | 3,160,000 | | | | 3,225,507 | |
Central Plains, Nebraska Energy Project | | | | | | | | |
(Project No. 3) | | | | | | | | |
Series A 5.00% 9/1/31 | | | 2,810,000 | | | | 3,275,701 | |
Series A 5.00% 9/1/35 | | | 2,160,000 | | | | 2,538,799 | |
Series A 5.00% 9/1/42 | | | 5,000,000 | | | | 5,965,350 | |
Florida Development Finance Corporation Revenue | | | | | | | | |
(Brightline Passenger Rail Project) 144A 5.625% 1/1/47 (AMT)#• | | | 1,570,000 | | | | 1,640,477 | |
Golden State, California Tobacco Securitization Corporate Settlement Revenue | | | | | | | | |
Series A-1 5.00% 6/1/47 | | | 3,660,000 | | | | 3,762,663 | |
Series A-1 5.25% 6/1/47 | | | 3,860,000 | | | | 4,027,138 | |
(Capital Appreciation-Asset-Backed) Series B | | | | | | | | |
1.548% 6/1/47 ^ | | | 9,410,000 | | | | 1,670,557 | |
Lower Alabama Gas District | | | | | | | | |
Series A 5.00% 9/1/34 | | | 4,400,000 | | | | 5,155,612 | |
M-S-R Energy Authority, California Gas Revenue | | | | | | | | |
Series A 6.125% 11/1/29 | | | 1,915,000 | | | | 2,383,888 | |
Series B 6.50% 11/1/39 | | | 8,485,000 | | | | 11,917,946 | |
Series C 6.50% 11/1/39 | | | 1,500,000 | | | | 2,106,885 | |
New Jersey Economic Development Authority Revenue | | | | | | | | |
(Continental Airlines Project) Series B | | | | | | | | |
5.625% 11/15/30 (AMT) | | | 1,365,000 | | | | 1,543,665 | |
New York City, New York Industrial Development Agency | | | | | | | | |
(Brooklyn Navy Yard Cogeneration Partners) | | | | | | | | |
5.75% 10/1/36 (AMT) | | | 2,475,000 | | | | 2,497,894 | |
New York Liberty Development Corporation Revenue | | | | | | | | |
(Goldman Sachs Headquarters) 5.25% 10/1/35 | | | 685,000 | | | | 848,092 | |
(Second Priority - Bank of America Tower) Class 3 | | | | | | | | |
6.375% 7/15/49 | | | 1,000,000 | | | | 1,049,430 | |
New York Transportation Development Corporation Special Facility Revenue | | | | | | | | |
(American Airlines Inc. John F. Kennedy International Airport Project) 5.00% 8/1/31 (AMT) | | | 2,000,000 | | | | 2,088,320 | |
(Delta Air Lines, Inc. - LaGuardia Airport Terminals C&D
Redevelopement Project) | | | | | | | | |
4.00% 1/1/36 (AMT) | | | 910,000 | | | | 921,994 | |
5.00% 1/1/36 (AMT) | | | 1,800,000 | | | | 1,996,470 | |
29
Schedules of investments
Delaware Tax-Free USA Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Corporate Revenue Bonds (continued) | | | | | | | | |
Northern Tobacco Securitization Corporation Revenue, Alaska | | | | | | | | |
(Tobacco Settlement Asset-Backed Bonds) Series A | | | | | | | | |
5.00% 6/1/46 | | | 1,785,000 | | | $ | 1,793,140 | |
Salt Verde, Arizona Financial Senior Gas Revenue | | | | | | | | |
5.00% 12/1/37 | | | 1,600,000 | | | | 1,901,520 | |
Shoals, Indiana | | | | | | | | |
(National Gypsum Co. Project) 7.25% 11/1/43 (AMT) | | | 1,940,000 | | | | 2,176,253 | |
Tobacco Settlement Financing, New Jersey | | | | | | | | |
Series A 5.00% 6/1/46 | | | 800,000 | | | | 874,080 | |
Series B 5.00% 6/1/46 | | | 2,080,000 | | | | 2,246,296 | |
Tobacco Settlement Financing, Virginia | | | | | | | | |
(Capital Appreciation) Series C 2.419% 6/1/47 ^ | | | 31,035,000 | | | | 3,554,438 | |
Valparaiso, Indiana | | | | | | | | |
(Pratt Paper, LLC Project) 7.00% 1/1/44 (AMT) | | | 1,780,000 | | | | 2,084,736 | |
| | | | | | | | |
| | | | | | | 85,322,931 | |
| | | | | | | | |
Education Revenue Bonds – 6.25% | | | | | | | | |
Arizona Industrial Development Authority Revenue | | | | | | | | |
(American Charter Schools Foundation Project) 144A | | | | | | | | |
6.00% 7/1/47 # | | | 1,385,000 | | | | 1,457,477 | |
Auburn University, Alabama General Fee Revenue | | | | | | | | |
Series A 5.00% 6/1/33 | | | 1,720,000 | | | | 2,026,074 | |
California Educational Facilities Authority Revenue | | | | | | | | |
(Loma Linda University) Series A 5.00% 4/1/47 | | | 1,000,000 | | | | 1,118,880 | |
California State University | | | | | | | | |
(Systemwide) Series A 5.00% 11/1/42 | | | 700,000 | | | | 808,311 | |
Illinois Finance Authority Revenue | | | | | | | | |
(University of Illinois at Chicago Project) | | | | | | | | |
Series A 5.00% 2/15/47 | | | 1,860,000 | | | | 2,011,739 | |
Series A 5.00% 2/15/50 | | | 540,000 | | | | 581,942 | |
Kent County, Delaware | | | | | | | | |
(Delaware State University Project) Series A | | | | | | | | |
5.00% 7/1/53 | | | 710,000 | | | | 758,486 | |
New Jersey Economic Development Authority | | | | | | | | |
(Provident Group - Montclair State University) | | | | | | | | |
5.00% 6/1/42 (AGM) | | | 1,250,000 | | | | 1,378,175 | |
Pennsylvania State Higher Educational Facilities Authority Student Housing Revenue | | | | | | | | |
(University Properties Inc. - East Stroudsburg University of Pennsylvania) 5.00% 7/1/31 | | | 3,000,000 | | | | 3,108,660 | |
30
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Education Revenue Bonds (continued) | | | | | | | | |
Phoenix, Arizona Industrial Development Authority Education Revenue | | | | | | | | |
(Downtown Phoenix Student Housing, LLC - Arizona State University Project) Series A 5.00% 7/1/37 | | | 650,000 | | | $ | 717,333 | |
Pima County, Arizona Industrial Development Authority Education Revenue | | | | | | | | |
(American Leadership Academy Project) | | | | | | | | |
144A 5.00% 6/15/47 # | | | 655,000 | | | | 661,458 | |
144A 5.00% 6/15/52 # | | | 560,000 | | | | 563,595 | |
University of California | | | | | | | | |
Series AZ 5.00% 5/15/48 | | | 5,000,000 | | | | 5,790,000 | |
Series AZ 5.25% 5/15/58 | | | 2,860,000 | | | | 3,363,474 | |
(Limited Project) Series M 5.00% 5/15/42 | | | 10,190,000 | | | | 11,739,084 | |
| | | | | | | | |
| | | | | | | 36,084,688 | |
| | | | | | | | |
Electric Revenue Bonds – 2.97% | | | | | | | | |
Electric and Gas Systems Revenue San Antonio, Texas | | | | | | | | |
5.25% 2/1/24 | | | 2,500,000 | | | | 2,893,450 | |
Long Island, New York Power Authority Electric System Revenue | | | | | | | | |
5.00% 9/1/47 | | | 1,605,000 | | | | 1,811,740 | |
Salt River, Arizona Project Agricultural Improvement & Power District Electric Systems Revenue | | | | | | | | |
Series A 5.00% 12/1/35 | | | 4,610,000 | | | | 5,262,177 | |
(Salt River Project Electric System) 5.00% 1/1/30 | | | 6,000,000 | | | | 7,185,060 | |
| | | | | | | | |
| | | | | | | 17,152,427 | |
| | | | | | | | |
Healthcare Revenue Bonds – 13.09% | | | | | | | | |
Alachua County, Florida Health Facilities Authority | | | | | | | | |
(Oak Hammock University) Series A 8.00% 10/1/42 | | | 1,000,000 | | | | 1,149,180 | |
Allegheny County, Pennsylvania Hospital Development Authority Revenue | | | | | | | | |
(Allegheny Health Network Obligated Group Issue) | | | | | | | | |
Series A 4.00% 4/1/44 | | | 1,800,000 | | | | 1,780,038 | |
Series A 5.00% 4/1/47 | | | 1,800,000 | | | | 1,970,406 | |
Apple Valley, Minnesota | | | | | | | | |
(Senior Living, LLC Project Fourth Tier) Series D | | | | | | | | |
7.25% 1/1/52 | | | 2,500,000 | | | | 2,529,150 | |
(Senior Living, LLC Project Second Tier) Series B | | | | | | | | |
5.00% 1/1/47 | | | 2,500,000 | | | | 2,566,725 | |
California Health Facilities Financing Authority Revenue | | | | | | | | |
(Kaiser Permanente) Series A-2 5.00% 11/1/47 | | | 2,105,000 | | | | 2,692,632 | |
(Sutter Health) | | | | | | | | |
Series A 4.00% 11/15/42 | | | 1,000,000 | | | | 1,033,410 | |
Series A 5.00% 11/15/38 | | | 1,000,000 | | | | 1,152,680 | |
31
Schedules of investments
Delaware Tax-Free USA Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
California Municipal Finance Authority Revenue | | | | | | | | |
(Community Medical Centers) Series A 5.00% 2/1/42 | | | 2,550,000 | | | $ | 2,824,405 | |
California Statewide Communities Development Authority Revenue | | | | | | | | |
(Loma Linda University Medical Center) | | | | | | | | |
Series A 144A 5.25% 12/1/43 # | | | 2,200,000 | | | | 2,438,612 | |
Series A 144A 5.25% 12/1/48 # | | | 285,000 | | | | 314,452 | |
Series A 144A 5.50% 12/1/58 # | | | 1,465,000 | | | | 1,617,082 | |
Colorado Health Facilities Authority Revenue | | | | | | | | |
(American Baptist) 8.00% 8/1/43 | | | 2,040,000 | | | | 2,328,701 | |
(Mental Health Center Denver Project) Series A | | | | | | | | |
5.75% 2/1/44 | | | 1,875,000 | | | | 2,075,231 | |
Cuyahoga County, Ohio | | | | | | | | |
(The Metro Health System) | | | | | | | | |
5.25% 2/15/47 | | | 2,235,000 | | | | 2,416,840 | |
5.50% 2/15/57 | | | 3,000,000 | | | | 3,283,710 | |
Maricopa County, Arizona Industrial Development Authority Health Facilities Revenue | | | | | | | | |
(Catholic Healthcare West) Series A 6.00% 7/1/39 | | | 3,690,000 | | | | 3,808,707 | |
Maricopa County, Arizona Industrial Development Authority Senior Living Facility Revenue Bonds | | | | | | | | |
(Christian Care Surprise, Inc. Project) 144A | | | | | | | | |
6.00% 1/1/48 # | | | 1,195,000 | | | | 1,220,764 | |
Maryland Health & Higher Educational Facilities Authority Revenue | | | | | | | | |
(Adventist Healthcare Obligated) Series A 5.50% 1/1/46 | | | 2,000,000 | | | | 2,225,440 | |
Metropolitan Government Nashville & Davidson County, Tennessee Health & Educational Facilities Building | | | | | | | | |
(Vanderbilt University Medical Center) 5.00% 7/1/46 | | | 5,000,000 | | | | 5,491,150 | |
Montgomery County, Pennsylvania Industrial Development Authority Revenue | | | | | | | | |
(Foulkeways At Gwynedd Project) 5.00% 12/1/46 | | | 1,500,000 | | | | 1,614,420 | |
Moon, Pennsylvania Industrial Development Authority | | | | | | | | |
(Baptist Homes Society Obligation) 6.125% 7/1/50 | | | 2,250,000 | | | | 2,410,717 | |
New Hope, Texas Cultural Education Facilities | | | | | | | | |
(Cardinal Bay - Village on the Park) | | | | | | | | |
Series A1 4.00% 7/1/36 | | | 310,000 | | | | 314,359 | |
Series A1 5.00% 7/1/46 | | | 770,000 | | | | 834,149 | |
Series B 4.25% 7/1/36 | | | 465,000 | | | | 474,286 | |
Series B 5.00% 7/1/46 | | | 770,000 | | | | 814,876 | |
New York State Dormitory Authority | | | | | | | | |
(Orange Regional Medical Center) | | | | | | | | |
144A 5.00% 12/1/34 # | | | 400,000 | | | | 441,964 | |
32
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
New York State Dormitory Authority | | | | | | | | |
(Orange Regional Medical Center) | | | | | | | | |
144A 5.00% 12/1/35 # | | | 1,200,000 | | | $ | 1,322,100 | |
144A 5.00% 12/1/37 # | | | 800,000 | | | | 877,008 | |
North Carolina Medical Care Commission Health Care Facilities Revenue | | | | | | | | |
(First Mortgage - Galloway Ridge Project) | | | | | | | | |
Series A 5.875% 1/1/31 | | | 1,555,000 | | | | 1,612,862 | |
Oklahoma Development Finance Authority Health System Revenue | | | | | | | | |
(OU Medicine Project) Series B 5.50% 8/15/57 | | | 1,970,000 | | | | 2,232,936 | |
Orange County, New York Funding Corporation Assisted Living Residence Revenue | | | | | | | | |
6.50% 1/1/46 | | | 3,000,000 | | | | 3,065,190 | |
Oregon Health & Science University Revenue | | | | | | | | |
(Capital Appreciation Insured) Series A | | | | | | | | |
5.757% 7/1/21 (NATL)^ | | | 1,160,000 | | | | 1,052,688 | |
Palm Beach County, Florida Health Facilities Authority | | | | | | | | |
(Sinai Residences Boca Raton Project) | | | | | | | | |
Series A 7.25% 6/1/34 | | | 120,000 | | | | 136,786 | |
Series A 7.50% 6/1/49 | | | 610,000 | | | | 699,676 | |
Pennsylvania Economic Development Financing Authority First Mortgage Revenue | | | | | | | | |
(Tapestry Moon Senior Housing Project) Series A 144A | | | | | | | | |
6.75% 12/1/53 # | | | 2,850,000 | | | | 2,949,665 | |
Public Finance Authority, Wisconsin | | | | | | | | |
(Bancroft Neurohealth Project) Series A 144A | | | | | | | | |
5.00% 6/1/36 # | | | 540,000 | | | | 551,777 | |
Rochester, Minnesota | | | | | | | | |
(The Homestead at Rochester) Series A 6.875% 12/1/48 | | | 2,350,000 | | | | 2,662,738 | |
Tarrant County, Texas Cultural Education Facilities Finance Corporation Retirement Facility Revenue | | | | | | | | |
(Buckner Senior Living - Ventana Project) | | | | | | | | |
6.625% 11/15/37 | | | 1,000,000 | | | | 1,107,410 | |
Tempe, Arizona Industrial Development Authority Revenue | | | | | | | | |
(Friendship Village) Series A 6.25% 12/1/46 | | | 1,000,000 | | | | 1,068,270 | |
(Mirabella At ASU Project) Series A 144A | | | | | | | | |
6.125% 10/1/52 # | | | 690,000 | | | | 760,842 | |
Wisconsin Health & Educational Facilities Authority Revenue | | | | | | | | |
(Covenant Communities, Inc. Project) Series A1 | | | | | | | | |
4.00% 7/1/48 | | | 3,715,000 | | | | 3,651,213 | |
| | | | | | | | |
| | | | | | | 75,575,247 | |
| | | | | | | | |
33
Schedules of investments
Delaware Tax-Free USA Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Lease Revenue Bonds – 3.95% | | | | | | | | |
Metropolitan Pier & Exposition Authority, Illinois | | | | | | | | |
(McCormick Place Expansion Project) Series A | | | | | | | | |
5.00% 6/15/57 | | | 1,620,000 | | | $ | 1,728,896 | |
New Jersey Economic Development Authority | | | | | | | | |
(School Facilities Construction) Series GG 5.75% 9/1/23 | | | 100,000 | | | | 107,294 | |
(State Government Buildings Project) Series A | | | | | | | | |
5.00% 6/15/47 | | | 2,250,000 | | | | 2,426,445 | |
New Jersey Transportation Trust Fund Authority | | | | | | | | |
Series B 5.50% 6/15/31 | | | 5,000,000 | | | | 5,292,150 | |
(Federal Highway Reimbursement) Series A | | | | | | | | |
5.00% 6/15/31 | | | 2,450,000 | | | | 2,714,037 | |
(Transportation Program) Series AA 5.00% 6/15/24 | | | 5,000,000 | | | | 5,361,800 | |
Public Finance Authority, Wisconsin Airport Facilities Revenue | | | | | | | | |
(AFCO Investors II Portfolio) 144A | | | | | | | | |
5.75% 10/1/31 (AMT)# | | | 2,245,000 | | | | 2,263,499 | |
St. Louis, Missouri Industrial Development Authority Leasehold Revenue | | | | | | | | |
(Convention Center Hotel) 5.80% 7/15/20 (AMBAC)^ | | | 3,035,000 | | | | 2,886,710 | |
| | | | | | | | |
| | | | | | | 22,780,831 | |
| | | | | | | | |
Local General Obligation Bonds – 10.63% | | | | | | | | |
Anne Arundel County, Maryland | | | | | | | | |
5.00% 10/1/25 | | | 5,370,000 | | | | 6,318,933 | |
Chicago, Illinois | | | | | | | | |
Series A 5.25% 1/1/29 | | | 2,020,000 | | | | 2,159,824 | |
Series A 6.00% 1/1/38 | | | 595,000 | | | | 674,438 | |
Chicago, Illinois Board of Education | | | | | | | | |
5.00% 4/1/42 | | | 1,060,000 | | | | 1,142,638 | |
5.00% 4/1/46 | | | 1,085,000 | | | | 1,166,310 | |
Series G 5.00% 12/1/44 | | | 1,000,000 | | | | 1,026,730 | |
Series H 5.00% 12/1/36 | | | 1,395,000 | | | | 1,443,950 | |
Series H 5.00% 12/1/46 | | | 1,775,000 | | | | 1,819,765 | |
Los Angeles, California Community College District | | | | | | | | |
Series C 5.00% 8/1/25 | | | 2,500,000 | | | | 2,995,725 | |
Mecklenburg, North Carolina | | | | | | | | |
Series A 5.00% 9/1/25 | | | 8,000,000 | | | | 9,438,080 | |
Montgomery, Maryland | | | | | | | | |
Series A 5.00% 11/1/28 | | | 5,755,000 | | | | 6,627,688 | |
New York City, New York | | | | | | | | |
Series E-1 5.00% 3/1/44 | | | 5,000,000 | | | | 5,709,550 | |
Series F-1 5.00% 4/1/45 | | | 1,755,000 | | | | 2,004,315 | |
Subseries D-1 5.00% 10/1/36 | | | 6,500,000 | | | | 7,025,655 | |
Subseries I-1 5.375% 4/1/36 | | | 225,000 | | | | 229,608 | |
34
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Local General Obligation Bonds (continued) | | | | | | | | |
Prince George’s County, Maryland | | | | | | | | |
(Consolidated Public Improvement) Series A | | | | | | | | |
5.00% 9/15/24 | | | 10,000,000 | | | $ | 11,597,000 | |
| | | | | | | | |
| | | | | | | 61,380,209 | |
| | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds – 16.76% | | | | | | | | |
Atlanta, Georgia Water & Wastewater Revenue | | | | | | | | |
Series A 6.25% 11/1/39-19§ | | | 5,500,000 | | | | 5,788,915 | |
Bowling Green, Ohio Student Housing Revenue CFP I | | | | | | | | |
(State University Project) 6.00% 6/1/45-20§ | | | 5,295,000 | | | | 5,680,476 | |
Brooklyn Arena Local Development, New York Pilot Revenue | | | | | | | | |
(Barclays Center Project) 6.50% 7/15/30-20§ | | | 8,230,000 | | | | 8,775,237 | |
Butler County, Pennsylvania Hospital Authority Revenue | | | | | | | | |
(Butler Health System Project) 7.125% 7/1/29-19§ | | | 2,500,000 | | | | 2,610,175 | |
California Municipal Finance Authority Mobile Home Park Revenue | | | | | | | | |
(Caritas Projects) Series A 6.40% 8/15/45-20§ | | | 4,440,000 | | | | 4,797,509 | |
California State | | | | | | | | |
Various Purposes | | | | | | | | |
6.00% 4/1/38-19§ | | | 1,435,000 | | | | 1,473,315 | |
6.50% 4/1/33-19§ | | | 1,395,000 | | | | 1,436,208 | |
Central Texas Regional Mobility Authority Revenue | | | | | | | | |
Senior Lien 6.00% 1/1/41-21§ | | | 5,160,000 | | | | 5,633,275 | |
Fairfax County, Virginia Industrial Development Authority | | | | | | | | |
(Inova Health) 5.50% 5/15/35-19§ | | | 1,635,000 | | | | 1,678,703 | |
Illinois Finance Authority Revenue | | | | | | | | |
(Silver Cross & Medical Centers) 7.00% 8/15/44-19§ | | | 3,000,000 | | | | 3,147,720 | |
Illinois Railsplitter Tobacco Settlement Authority | | | | | | | | |
6.00% 6/1/28-21§ | | | 6,000,000 | | | | 6,661,800 | |
Koyukuk, Alaska Revenue | | | | | | | | |
(Tanana Chiefs Conference Health Care Facility Project) | | | | | | | | |
7.75% 10/1/41-19§ | | | 3,000,000 | | | | 3,187,650 | |
Louisiana Public Facilities Authority Revenue | | | | | | | | |
(Ochsner Clinic Foundation Project) 6.50% 5/15/37-21§ | | | 2,190,000 | | | | 2,448,398 | |
Maryland Economic Development Corporation Revenue | | | | | | | | |
(Transportation Facilities Project) Series A | | | | | | | | |
5.75% 6/1/35-20§ | | | 5,075,000 | | | | 5,427,357 | |
Massachusetts Development Finance Agency | | | | | | | | |
(Harvard University) Series B-2 5.25% 2/1/34-21§ | | | 5,000,000 | | | | 5,411,600 | |
New Jersey Economic Development Authority Revenue | | | | | | | | |
(Provident Group - Montclair State University) | | | | | | | | |
5.875% 6/1/42-20§ | | | 4,225,000 | | | | 4,527,341 | |
35
Schedules of investments
Delaware Tax-Free USA Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds (continued) | | | | | | | | |
New Jersey Economic Development Authority Revenue | | | | | | | | |
(School Facilities Construction) Series G | | | | | | | | |
5.75% 9/1/23-21§ | | | 900,000 | | | $ | 985,914 | |
New Jersey Educational Facilities Authority Revenue | | | | | | | | |
(University of Medicine & Dentistry) Series B | | | | | | | | |
7.50% 12/1/32-19§ | | | 1,435,000 | | | | 1,497,222 | |
New York City, New York | | | | | | | | |
Subordinate Series I-1 5.375% 4/1/36-19§ | | | 1,610,000 | | | | 1,645,855 | |
New York State Dormitory Authority Revenue Non State Supported Debt | | | | | | | | |
(Orange Regional Medical Center) 6.50% 12/1/21-18§ | | | 2,260,000 | | | | 2,286,713 | |
Oklahoma State Turnpike Authority Revenue | | | | | | | | |
(First Senior) 6.00% 1/1/22 | | | 13,535,000 | | | | 15,299,016 | |
Phoenix, Arizona Civic Improvement Corporation Airport Revenue Junior Lien | | | | | | | | |
Series A 5.00% 7/1/26-20§ | | | 1,800,000 | | | | 1,906,092 | |
San Juan, Texas Higher Education Finance Authority Education Revenue | | | | | | | | |
(Idea Public Schools) Series A 6.70% 8/15/40-20§ | | | 1,500,000 | | | | 1,637,685 | |
Southwestern Illinois Development Authority Revenue | | | | | | | | |
(Memorial Group Inc.) 7.125% 11/1/43-23§ | | | 2,000,000 | | | | 2,481,940 | |
Virgin Islands Public Finance Authority Revenue | | | | | | | | |
Series A 7.30% 10/1/18 | | | 330,000 | | | | 331,376 | |
| | | | | | | | |
| | | | | | | 96,757,492 | |
| | | | | | | | |
Special Tax Revenue Bonds – 6.47% | | | | | | | | |
Conley Road Transportation Development District, Missouri | | | | | | | | |
5.375% 5/1/47 | | | 2,000,000 | | | | 2,038,480 | |
Kansas City, Missouri Land Clearance Redevelopment Authority Revenue | | | | | | | | |
(Convention Centre Hotel Project - TIF Financing) Series B 144A 5.00% 2/1/50 # | | | 725,000 | | | | 740,776 | |
Massachusetts School Building Authority | | | | | | | | |
Series C 5.00% 8/15/31 | | | 2,500,000 | | | | 2,863,550 | |
Mosaic, Virginia District Community Development Authority Revenue | | | | | | | | |
Series A 6.875% 3/1/36 | | | 3,980,000 | | | | 4,300,470 | |
New Jersey Economic Development Authority Revenue | | | | | | | | |
(Cigarette Tax) 5.00% 6/15/28 | | | 2,695,000 | | | | 2,863,249 | |
New York City, New York Industrial Development Agency | | | | | | | | |
(Yankee Stadium) 7.00% 3/1/49 (AGC) | | | 1,000,000 | | | | 1,025,290 | |
36
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Special Tax Revenue Bonds (continued) | | | | | | | | |
New York City, New York Transitional Finance Authority | | | | | | | | |
(Future Tax Secured Fiscal 2011) | | | | | | | | |
Series C 5.25% 11/1/25 | | | 4,430,000 | | | $ | 4,761,364 | |
Series D-1 5.00% 2/1/26 | | | 3,000,000 | | | | 3,217,620 | |
(Future Tax Secured Fiscal 2014) Series A-1 | | | | | | | | |
5.00% 11/1/42 | | | 10,000,000 | | | | 11,120,000 | |
Public Finance Authority, Wisconsin | | | | | | | | |
(American Dream @ Meadowlands Project) 144A | | | | | | | | |
7.00% 12/1/50 # | | | 2,155,000 | | | | 2,494,779 | |
Tampa, Florida Sports Authority Revenue Sales Tax | | | | | | | | |
(Tampa Bay Arena Project) 5.75% 10/1/20 (NATL) | | | 535,000 | | | | 557,363 | |
Wyandotte County, Kansas City, Kansas Unified Government Special Obligation Revenue | | | | | | | | |
(Sales Tax - Vacation Village Project Area 1 and 2A) | | | | | | | | |
Series 2015A 5.75% 9/1/32 | | | 1,280,000 | | | | 1,364,762 | |
| | | | | | | | |
| | | | | | | 37,347,703 | |
| | | | | | | | |
State General Obligation Bonds – 8.43% | | | | | | | | |
California State | | | | | | | | |
5.25% 11/1/40 | | | 3,795,000 | | | | 4,073,022 | |
Various Purposes | | | | | | | | |
5.00% 8/1/27 | | | 2,500,000 | | | | 2,981,350 | |
5.00% 10/1/29 | | | 5,000,000 | | | | 5,626,600 | |
5.00% 10/1/47 | | | 2,145,000 | | | | 2,438,286 | |
Unrefunded 6.00% 4/1/38 | | | 2,625,000 | | | | 2,690,021 | |
Unrefunded 6.50% 4/1/33 | | | 1,175,000 | | | | 1,207,853 | |
Connecticut State | | | | | | | | |
Series B 5.00% 6/15/35 | | | 2,475,000 | | | | 2,689,385 | |
Series E 5.00% 9/15/35 | | | 2,500,000 | | | | 2,778,550 | |
Series E 5.00% 9/15/37 | | | 2,250,000 | | | | 2,486,790 | |
Illinois State | | | | | | | | |
5.00% 1/1/29 | | | 5,405,000 | | | | 5,685,249 | |
5.00% 5/1/36 | | | 480,000 | | | | 495,950 | |
5.00% 11/1/36 | | | 1,780,000 | | | | 1,858,623 | |
5.00% 2/1/39 | | | 830,000 | | | | 853,290 | |
Series A 5.00% 4/1/38 | | | 785,000 | | | | 809,869 | |
Maryland State | | | | | | | | |
Series A 5.00% 3/15/26 | | | 5,000,000 | | | | 5,916,850 | |
Series A 5.00% 3/15/28 | | | 5,000,000 | | | | 6,063,350 | |
| | | | | | | | |
| | | | | | | 48,655,038 | |
| | | | | | | | |
Transportation Revenue Bonds – 14.09% | | | | | | | | |
California Municipal Finance Authority | | | | | | | | |
(LINXS APM Project) Series A 5.00% 12/31/47 (AMT) | | | 3,790,000 | | | | 4,225,433 | |
37
Schedules of investments
Delaware Tax-Free USA Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Transportation Revenue Bonds (continued) | | | | | | | | |
Chicago, Illinois O’Hare International Airport | | | | | | | | |
Series B 5.00% 1/1/33 | | | 2,345,000 | | | $ | 2,590,428 | |
Series D 5.25% 1/1/42 | | | 2,000,000 | | | | 2,270,800 | |
Dallas, Texas Love Field | | | | | | | | |
5.00% 11/1/35 (AMT) | | | 1,000,000 | | | | 1,117,610 | |
5.00% 11/1/36 (AMT) | | | 1,000,000 | | | | 1,115,340 | |
Denver, Colorado City & County Airport System Revenue | | | | | | | | |
Series A 5.00% 12/1/48 (AMT) | | | 7,000,000 | | | | 7,826,350 | |
Harris County, Texas Toll Road Authority | | | | | | | | |
Senior Lien Series A 5.00% 8/15/27 | | | 3,750,000 | | | | 4,483,913 | |
New Jersey Turnpike Authority | | | | | | | | |
Series A 5.00% 1/1/28 | | | 5,000,000 | | | | 5,679,000 | |
New York State Thruway Authority | | | | | | | | |
Series L 5.00% 1/1/23 | | | 3,000,000 | | | | 3,365,520 | |
North Texas Tollway Authority Revenue | | | | | | | | |
(Second Tier) Series A 5.00% 1/1/34 | | | 5,000,000 | | | | 5,565,700 | |
Port Authority of New York & New Jersey Special Project | | | | | | | | |
(JFK International Air Terminal) | | | | | | | | |
Series 8 6.00% 12/1/42 | | | 4,735,000 | | | | 5,157,315 | |
Series 8 6.50% 12/1/28 | | | 5,500,000 | | | | 5,749,480 | |
Salt Lake City, Utah Airport Revenue | | | | | | | | |
Series B 5.00% 7/1/42 | | | 3,350,000 | | | | 3,818,431 | |
South Jersey Port, New Jersey | | | | | | | | |
(Subordinated Marine Terminal) | | | | | | | | |
Series A 5.00% 1/1/49 | | | 450,000 | | | | 493,515 | |
Series B 5.00% 1/1/42 (AMT) | | | 450,000 | | | | 489,087 | |
Series B 5.00% 1/1/48 (AMT) | | | 1,035,000 | | | | 1,119,849 | |
St. Louis, Missouri Airport Revenue | | | | | | | | |
(Lambert-St. Louis International) | | | | | | | | |
Series A-1 6.625% 7/1/34 | | | 5,995,000 | | | | 6,221,251 | |
Texas Private Activity Bond Surface Transportation Corporate Senior Lien | | | | | | | | |
(LBJ Infrastructure) | | | | | | | | |
7.00% 6/30/40 | | | 5,715,000 | | | | 6,172,543 | |
7.50% 6/30/33 | | | 1,560,000 | | | | 1,703,083 | |
(NTE Mobility Partners) | | | | | | | | |
6.75% 6/30/43 (AMT) | | | 2,490,000 | | | | 2,895,845 | |
6.875% 12/31/39 | | | 5,500,000 | | | | 5,819,660 | |
7.00% 12/31/38 (AMT) | | | 1,830,000 | | | | 2,157,533 | |
Virginia Small Business Financing Authority Revenue | | | | | | | | |
(Transform 66 P3 Project) 5.00% 12/31/56 (AMT) | | | 1,220,000 | | | | 1,324,969 | |
| | | | | | | | |
| | | | | | | 81,362,655 | |
| | | | | | | | |
38
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Water & Sewer Revenue Bonds – 1.26% | | | | | | | | |
Dominion, Colorado Water & Sanitation District | | | | | | | | |
5.75% 12/1/36 | | | 2,500,000 | | | $ | 2,646,425 | |
Southern California Water Replenishment District | | | | | | | | |
5.00% 8/1/33 | | | 2,000,000 | | | | 2,308,420 | |
5.00% 8/1/34 | | | 2,000,000 | | | | 2,301,580 | |
| | | | | | | | |
| | | | | | | 7,256,425 | |
| | | | | | | | |
Total Municipal Bonds (cost $543,732,224) | | | | | | | 569,675,646 | |
| | | | | | | | |
|
| |
Short-Term Investments – 1.31% | | | | | | | | |
| |
Variable Rate Demand Notes – 1.31%¤ | | | | | | | | |
California Statewide Communities Development Authority Revenue (Rady Children’s Hospital - San Diego) Series B | | | | | | | | |
1.27% 8/15/47 (LOC - Wells Fargo Bank N.A.) | | | 1,505,000 | | | | 1,505,000 | |
Geisinger Authority, Pennsylvania Health System Revenue | | | | | | | | |
(Geisinger Health System) Series A | | | | | | | | |
1.47% 10/1/43 (SPA - Wells Fargo Bank N.A.) | | | 1,200,000 | | | | 1,200,000 | |
Mississippi Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue | | | | | | | | |
(Chevron USA) Series A | | | | | | | | |
1.54% 12/1/30 | | | 725,000 | | | | 725,000 | |
(Chevron USA) Series A | | | | | | | | |
1.54% 11/1/35 | | | 1,700,000 | | | | 1,700,000 | |
(Chevron USA) Series I | | | | | | | | |
1.54% 11/1/35 | | | 1,950,000 | | | | 1,950,000 | |
Philadelphia, Pennsylvania Hospitals & Higher Education Facilities Authority Revenue (The Children’s Hospital Of Philadelphia Project) Series B | | | | | | | | |
1.43% 7/1/41 (SPA - Wells Fargo Bank N.A.) | | | 400,000 | | | | 400,000 | |
Phoenix, Arizona Industrial Development Authority Health Care Revenue (Mayo Clinic) Series B | | | | | | | | |
1.52% 11/15/52 (SPA - Wells Fargo Bank N.A.) | | | 100,000 | | | | 100,000 | |
| | |
| | | | | | | | |
Total Short-Term Investments (cost $7,580,000) | | | | | | | 7,580,000 | |
| | | | | | | | |
| | |
Total Value of Securities – 99.99% (cost $551,312,224) | | | | | | $ | 577,255,646 | |
| | | | | | | | |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At Aug. 31, 2018, the aggregate value of Rule 144A securities was $22,316,327, which represents 3.87% of the Fund’s net assets. See Note 9 in “Notes to financial statements.” |
| ¤ | Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the |
39
Schedules of investments
Delaware Tax-Free USA Fund
issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of Aug. 31, 2018.
| § | Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 9 in “Notes to financial statements.” |
| ° | Principal amount shown is stated in US Dollars unless noted that the security is denominated in another currency. |
| ● | Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at Aug. 31, 2018. For securities based on a published reference rate and spread, the reference rate and spread are indicated in their description above. The reference rate descriptions (i.e. LIBOR03M, LIBOR06M, etc.) used in this report are identical for different securities, but the underlying reference rates may differ due to the timing of the reset period. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their description above. |
| ^ | Zero coupon security. The rate shown is the effective yield at the time of purchase. |
Summary of abbreviations:
AGC – Insured by Assured Guaranty Corporation
AGM – Insured by Assured Guaranty Municipal Corporation
AMBAC – Insured by AMBAC Assurance Corporation
AMT – Subject to Alternative Minimum Tax
ICE – Intercontinental Exchange
LIBOR – London Interbank Offered Rate
LIBOR03M – ICE LIBOR USD 3 Month
LIBOR06M – ICE LIBOR USD 6 Month
LOC – Letter of Credit
N.A. – National Association
NATL – Insured by National Public Finance Guarantee Corporation
SPA – Stand-by Purchase Agreement
USD – US Dollar
See accompanying notes, which are an integral part of the financial statements.
40
| | |
| Schedules of investments |
| Delaware Tax-Free USA Intermediate Fund | | August 31, 2018 |
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds – 98.97% | | | | | | | | |
Corporate Revenue Bonds – 16.26% | | | | | | | | |
Buckeye, Ohio Tobacco Settlement Financing Authority | | | | | | | | |
(Asset-Backed Senior Turbo) | | | | | | | | |
Series A-2 5.875% 6/1/47 | | | 7,025,000 | | | $ | 7,069,539 | |
Series A-2 6.50% 6/1/47 | | | 3,570,000 | | | | 3,644,006 | |
Chandler, Arizona Industrial Development Revenue Bonds | | | | | | | | |
(Intel Corporation Project) 2.70% 12/1/37 (AMT)• | | | 3,000,000 | | | | 3,009,630 | |
Chesterfield County, Virginia Economic Development Authority Pollution Control Revenue | | | | | | | | |
(Virginia Electric & Power) Series A 5.00% 5/1/23 | | | 1,460,000 | | | | 1,488,733 | |
Commonwealth of Pennsylvania Financing Authority | | | | | | | | |
(Tobacco Master Settlement Payment) 5.00% 6/1/27 | | | 2,000,000 | | | | 2,297,100 | |
Denver City & County, Colorado Special Facilities Airport Revenue | | | | | | | | |
(United Airlines Project) 5.00% 10/1/32 (AMT) | | | 1,190,000 | | | | 1,275,704 | |
Florida Development Finance Corporation Revenue | | | | | | | | |
(Brightline Passenger Rail Project) 144A 5.625% 1/1/47 (AMT)#• | | | 1,785,000 | | | | 1,865,129 | |
Golden State, California Tobacco Securitization Corporate Settlement Revenue | | | | | | | | |
(Asset-Backed Bonds) | | | | | | | | |
Series A-1 5.00% 6/1/26 | | | 850,000 | | | | 976,081 | |
Series A-1 5.00% 6/1/47 | | | 2,000,000 | | | | 2,056,100 | |
(Capital Appreciation Asset-Backed) | | | | | | | | |
Series A 1.548% 6/1/47 ^ | | | 5,885,000 | | | | 1,044,764 | |
Houston, Texas Airport System Revenue | | | | | | | | |
(United Airlines) 5.00% 7/1/29 (AMT) | | | 3,010,000 | | | | 3,257,362 | |
Illinois Railsplitter Tobacco Settlement Authority | | | | | | | | |
5.25% 6/1/20 | | | 7,160,000 | | | | 7,540,411 | |
Lower Alabama Gas District | | | | | | | | |
Series A 5.00% 9/1/34 | | | 4,850,000 | | | | 5,682,891 | |
Maricopa County, Arizona Corporation Pollution Control Revenue | | | | | | | | |
(Public Service - Palo Verde Project) Series B | | | | | | | | |
5.20% 6/1/43 • | | | 6,000,000 | | | | 6,291,540 | |
Maryland Economic Development Corporation Pollution Control Revenue | | | | | | | | |
(Potomac Electric Project) 6.20% 9/1/22 | | | 1,780,000 | | | | 1,818,039 | |
Michigan Tobacco Settlement Finance Authority | | | | | | | | |
Series A 6.00% 6/1/34 | | | 810,000 | | | | 813,815 | |
Nassau County, New York Tobacco Settlement | | | | | | | | |
(Asset-Backed) Series A-3 5.125% 6/1/46 | | | 855,000 | | | | 845,877 | |
41
Schedules of investments
Delaware Tax-Free USA Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Corporate Revenue Bonds (continued) | | | | | | | | |
New Jersey Economic Development Authority Special Facilities Revenue | | | | | | | | |
(Continental Airlines Project) Series B | | | | | | | | |
5.625% 11/15/30 (AMT) | | | 1,890,000 | | | $ | 2,137,382 | |
New Jersey Tobacco Settlement Financing Corporation | | | | | | | | |
Series A 5.00% 6/1/46 | | | 755,000 | | | | 824,913 | |
Series B 5.00% 6/1/46 | | | 1,965,000 | | | | 2,122,102 | |
New York City, New York Industrial Development Agency | | | | | | | | |
(Brooklyn Navy Yard Cogeneration Partners) | | | | | | | | |
5.75% 10/1/36 (AMT) | | | 1,835,000 | | | | 1,851,974 | |
New York Transportation Development Special Facilities Revenue | | | | | | | | |
(American Airlines John F. Kennedy International Airport Project) 5.00% 8/1/21 (AMT) | | | 610,000 | | | | 651,761 | |
(Delta Airlines, Inc.-LaGuardia Airport Terminals C&D Redevelopment Project) 5.00% 1/1/34 (AMT) | | | 3,000,000 | | | | 3,337,500 | |
Northern Alaska Tobacco Securitization Corporation Revenue | | | | | | | | |
(Tobacco Settlement Asset-Backed Bonds) Series A | | | | | | | | |
5.00% 6/1/46 | | | 2,900,000 | | | | 2,913,224 | |
Public Authority for Colorado Energy Natural Gas Revenue | | | | | | | | |
6.50% 11/15/38 | | | 5,000,000 | | | | 6,882,450 | |
Salt Verde, Arizona Financial Corporation Senior Gas Revenue | | | | | | | | |
5.00% 12/1/32 | | | 3,750,000 | | | | 4,408,650 | |
5.25% 12/1/24 | | | 3,050,000 | | | | 3,484,290 | |
Tobacco Settlement Financing Corporation, Virginia | | | | | | | | |
(Capital Appreciation Asset-Backed) Series C | | | | | | | | |
2.419% 6/1/47 ^ | | | 29,400,000 | | | | 3,367,182 | |
TSASC, New York | | | | | | | | |
Series A 5.00% 6/1/30 | | | 475,000 | | | | 531,634 | |
Series A 5.00% 6/1/31 | | | 475,000 | | | | 529,354 | |
Tulsa, Oklahoma Airports Improvement Trust | | | | | | | | |
(American Airlines) 5.00% 6/1/35 (AMT)• | | | 975,000 | | | | 1,046,926 | |
Wisconsin Public Finance Authority Exempt Facilities Revenue | | | | | | | | |
(National Gypsum) 5.25% 4/1/30 (AMT) | | | 2,905,000 | | | | 3,099,606 | |
| | | | | | | | |
| | | | | | | 88,165,669 | |
| | | | | | | | |
Education Revenue Bonds – 5.19% | | | | | | | | |
Arizona Industrial Development Authority Revenue | | | | | | | | |
(American Charter Schools Foundation Project) 144A | | | | | | | | |
6.00% 7/1/37 # | | | 1,420,000 | | | | 1,506,663 | |
42
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Education Revenue Bonds (continued) | | | | | | | | |
Bucks County, Pennsylvania Industrial Development Authority Revenue | | | | | | | | |
(School Lane Charter School) 5.125% 3/15/36 | | | 2,000,000 | | | $ | 2,149,240 | |
California State University | | | | | | | | |
(Systemwide) Series A 5.00% 11/1/31 | | | 2,000,000 | | | | 2,374,940 | |
California Statewide Communities Development Authority Revenue | | | | | | | | |
(California Baptist University) Series A 6.125% 11/1/33 | | | 2,215,000 | | | | 2,559,277 | |
Illinois Finance Authority Revenue | | | | | | | | |
(University of Illinois at Chicago) | | | | | | | | |
Series A 5.00% 2/15/29 | | | 400,000 | | | | 448,012 | |
Series A 5.00% 2/15/31 | | | 365,000 | | | | 404,953 | |
Series A 5.00% 2/15/37 | | | 430,000 | | | | 469,491 | |
Kent County, Delaware | | | | | | | | |
(Delaware State University Project) | | | | | | | | |
Series A 5.00% 7/1/40 | | | 310,000 | | | | 334,409 | |
Series A 5.00% 7/1/48 | | | 420,000 | | | | 450,362 | |
Massachusetts State Health & Educational Facilities Authority Revenue | | | | | | | | |
(Massachusetts Institute of Technology) Series M | | | | | | | | |
5.25% 7/1/20 | | | 3,000,000 | | | | 3,194,700 | |
Miami-Dade County, Florida Educational Facilities Authority | | | | | | | | |
(University of Miami) | | | | | | | | |
Series A 5.00% 4/1/30 | | | 520,000 | | | | 588,562 | |
Series A 5.00% 4/1/31 | | | 1,090,000 | | | | 1,230,229 | |
New York City, New York Trust for Cultural Resources | | | | | | | | |
(Whitney Museum of American Art) 5.00% 7/1/21 | | | 3,025,000 | | | | 3,248,427 | |
New York State Dormitory Authority Revenue | | | | | | | | |
(Non State Supported Debt - Rockefeller University) | | | | | | | | |
Series A 5.00% 7/1/27 | | | 1,055,000 | | | | 1,084,160 | |
(Touro College & University System) Series A | | | | | | | | |
5.25% 1/1/34 | | | 1,335,000 | | | | 1,459,235 | |
Pennsylvania Higher Educational Facilities Authority Revenue | | | | | | | | |
(Unrefunded Drexel University) Series A 5.25% 5/1/25 | | | 310,000 | | | | 333,253 | |
Phoenix, Arizona Industrial Development Authority Housing Revenue | | | | | | | | |
(Downtown Phoenix Student Housing, LLC-Arizona State University Project) | | | | | | | | |
Series A 5.00% 7/1/30 | | | 350,000 | | | | 396,102 | |
Series A 5.00% 7/1/32 | | | 235,000 | | | | 263,867 | |
43
Schedules of investments
Delaware Tax-Free USA Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Education Revenue Bonds (continued) | | | | | | | | |
Pima County, Arizona Industrial Development Authority Education Revenue | | | | | | | | |
(Facility American Leadership Academy Project) | | | | | | | | |
144A 5.00% 6/15/47 # | | | 745,000 | | | $ | 752,346 | |
144A 5.00% 6/15/52 # | | | 640,000 | | | | 644,109 | |
University of Texas Permanent University Fund | | | | | | | | |
Series B 5.00% 7/1/27 | | | 3,715,000 | | | | 4,262,925 | |
| | | | | | | | |
| | | | | | | 28,155,262 | |
| | | | | | | | |
Electric Revenue Bonds – 3.25% | | | | | | | | |
California State Department of Water Resources Power Supply Revenue | | | | | | | | |
Series N 5.00% 5/1/21 | | | 3,580,000 | | | | 3,910,828 | |
Long Island, New York Power Authority | | | | | | | | |
5.00% 9/1/33 | | | 250,000 | | | | 288,500 | |
5.00% 9/1/35 | | | 1,000,000 | | | | 1,146,370 | |
New York State Utility Debt Securitization Authority | | | | | | | | |
(Restructuring Bonds) 5.00% 12/15/33 | | | 1,500,000 | | | | 1,730,790 | |
Salt River, Arizona Project Agricultural Improvement & Power District Electric Systems Revenue | | | | | | | | |
Series A 5.00% 12/1/35 | | | 4,000,000 | | | | 4,565,880 | |
(Salt River Project Electric System) 5.00% 1/1/30 | | | 5,000,000 | | | | 5,987,550 | |
| | | | | | | | |
| | | | | | | 17,629,918 | |
| | | | | | | | |
Healthcare Revenue Bonds – 9.44% | | | | | | | | |
Arizona Health Facilities Authority | | | | | | | | |
(Scottsdale Lincoln Hospital Project) 5.00% 12/1/30 | | | 5,000,000 | | | | 5,579,950 | |
Berks County, Pennsylvania Municipal Authority Revenue | | | | | | | | |
(Reading Hospital & Medical Center Project) Series A-3 | | | | | | | | |
5.25% 11/1/24 | | | 2,205,000 | | | | 2,291,304 | |
California Health Facilities Financing Authority | | | | | | | | |
(Kaiser Permanente) Series A1 5.00% 11/1/27 | | | 4,100,000 | | | | 5,016,678 | |
California Statewide Communities Development Authority | | | | | | | | |
(Loma Linda University Medical Center) | | | | | | | | |
Series A 144A 5.00% 12/1/33 # | | | 400,000 | | | | 444,944 | |
Series A 144A 5.00% 12/1/41 # | | | 1,685,000 | | | | 1,821,721 | |
Series A 5.25% 12/1/34 | | | 2,790,000 | | | | 3,063,001 | |
Series A 144A 5.25% 12/1/38 # | | | 600,000 | | | | 669,714 | |
Series A 144A 5.25% 12/1/43 # | | | 800,000 | | | | 886,768 | |
Capital Trust Agency, Florida | | | | | | | | |
(Tuscan Gardens Senior Living Center) 7.00% 4/1/35 | | | 1,630,000 | | | | 1,640,937 | |
Cuyahoga County, Ohio | | | | | | | | |
(The Metrohealth System) 5.00% 2/15/37 | | | 1,000,000 | | | | 1,070,300 | |
44
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Dauphin County, Pennsylvania General Authority | | | | | | | | |
(Pinnacle Health System Project) Series A 6.00% 6/1/29 | | | 1,780,000 | | | $ | 1,831,371 | |
Iowa Finance Authority Senior Housing Revenue Bonds | | | | | | | | |
(PHS Council Bluffs, Inc. Project) 5.00% 8/1/33 | | | 500,000 | | | | 505,795 | |
Kalispell, Montana | | | | | | | | |
(Immanuel Lutheran Corporation Project) Series A | | | | | | | | |
5.25% 5/15/32 | | | 435,000 | | | | 460,800 | |
Lancaster County, Pennsylvania Hospital Authority | | | | | | | | |
(Brethren Village Project) | | | | | | | | |
5.00% 7/1/31 | | | 440,000 | | | | 481,659 | |
5.00% 7/1/32 | | | 440,000 | | | | 479,930 | |
(University of Pennsylvania Health System Obligation) | | | | | | | | |
Series A 5.00% 8/15/33 | | | 2,430,000 | | | | 2,795,326 | |
Maricopa County, Arizona Industrial Development Authority Revenue | | | | | | | | |
(Banner Health Obligation Group) Series A | | | | | | | | |
5.00% 1/1/32 | | | 3,000,000 | | | | 3,448,380 | |
(Christian Care Surprise, Inc. Project) 144A | | | | | | | | |
5.75% 1/1/36 # | | | 1,500,000 | | | | 1,520,640 | |
Maryland Health & Higher Educational Facilities Authority Revenue | | | | | | | | |
(Adventist Healthcare Obligated) Series A 5.50% 1/1/36 | | | 2,000,000 | | | | 2,274,160 | |
Moon, Pennsylvania Industrial Development Authority | | | | | | | | |
(Baptist Homes Society Obligation) 5.625% 7/1/30 | | | 2,440,000 | | | | 2,606,945 | |
New York State Dormitory Authority Revenue | | | | | | | | |
(Orange Regional Medical Center) | | | | | | | | |
144A 5.00% 12/1/31 # | | | 1,000,000 | | | | 1,114,430 | |
144A 5.00% 12/1/32 # | | | 1,100,000 | | | | 1,223,244 | |
144A 5.00% 12/1/33 # | | | 1,000,000 | | | | 1,108,070 | |
Oklahoma Development Finance Authority Health System Revenue | | | | | | | | |
(OU Medicine Project) Series B 5.25% 8/15/43 | | | 1,790,000 | | | | 2,007,968 | |
Prince George’s County, Maryland | | | | | | | | |
(Collington Episcopal Life Care Community) | | | | | | | | |
5.00% 4/1/31 | | | 2,000,000 | | | | 2,121,520 | |
Public Finance Authority, Wisconsin | | | | | | | | |
(Bancroft Neurohealth Project) Series A 144A | | | | | | | | |
4.625% 6/1/36 # | | | 1,460,000 | | | | 1,436,465 | |
Public Finance Authority, Wisconsin Senior Living Revenue | | | | | | | | |
(Mary’s Woods at Marylhurst Project) 144A | | | | | | | | |
5.00% 5/15/29 # | | | 500,000 | | | | 547,280 | |
45
Schedules of investments
Delaware Tax-Free USA Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Rochester, Minnesota Health Care Facilities Revenue | | | | | | | | |
(Mayo Clinic) Series C 4.50% 11/15/38 • | | | 2,540,000 | | | $ | 2,728,951 | |
| | | | | | | | |
| | | | | | | 51,178,251 | |
| | | | | | | | |
Lease Revenue Bonds – 4.69% | | | | | | | | |
California Statewide Communities Development Authority Revenue | | | | | | | | |
(Lancer Plaza Project) 5.125% 11/1/23 | | | 465,000 | | | | 500,968 | |
Golden State, California Tobacco Securitization Corporate Settlement Revenue | | | | | | | | |
(Asset-Backed Enhanced) Series A 5.00% 6/1/35 | | | 3,000,000 | | | | 3,379,080 | |
Idaho Building Authority Revenue | | | | | | | | |
(Health & Welfare Project) Series A 5.00% 9/1/24 | | | 2,800,000 | | | | 3,065,468 | |
Los Angeles County, California | | | | | | | | |
(Disney Concert Hall Parking) 5.00% 3/1/23 | | | 2,395,000 | | | | 2,722,971 | |
New Jersey State Transportation Trust Fund Authority | | | | | | | | |
Series B 5.50% 6/15/31 | | | 5,000,000 | | | | 5,292,150 | |
(Highway Reimbursement) Series A 5.00% 6/15/30 | | | 2,415,000 | | | | 2,685,746 | |
New York Liberty Development Revenue | | | | | | | | |
(World Trade Center Project) Class 2-3 144A | | | | | | | | |
5.15% 11/15/34 # | | | 1,000,000 | | | | 1,099,560 | |
New York State Dormitory Authority Revenue | | | | | | | | |
(Health Facilities Improvement Program) | | | | | | | | |
5.00% 1/15/28 | | | 750,000 | | | | 896,618 | |
5.00% 1/15/29 | | | 3,100,000 | | | | 3,680,568 | |
Public Finance Authority, Wisconsin Airport Facilities Revenue | | | | | | | | |
(AFCO Investors II Portfolio) 144A | | | | | | | | |
5.00% 10/1/23 (AMT)# | | | 2,085,000 | | | | 2,105,391 | |
| | | | | | | | |
| | | | | | | 25,428,520 | |
| | | | | | | | |
Local General Obligation Bonds – 5.72% | | | | | | | | |
Chesterfield County, Virginia | | | | | | | | |
Series B 5.00% 1/1/22 | | | 4,070,000 | | | | 4,481,151 | |
Chicago, Illinois | | | | | | | | |
Series A 5.25% 1/1/29 | | | 640,000 | | | | 684,301 | |
Series C 5.00% 1/1/26 | | | 1,280,000 | | | | 1,396,966 | |
Chicago, Illinois Board of Education | | | | | | | | |
5.00% 4/1/35 | | | 825,000 | | | | 896,833 | |
5.00% 4/1/36 | | | 320,000 | | | | 347,373 | |
(Dedicated Revenues) | | | | | | | | |
Series C 5.00% 12/1/30 | | | 2,160,000 | | | | 2,274,134 | |
Series C 5.00% 12/1/34 | | | 2,160,000 | | | | 2,245,730 | |
46
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Local General Obligation Bonds (continued) | | | | | | | | |
Conroe, Texas Independent School District | | | | | | | | |
5.00% 2/15/25 (PSF) | | | 3,070,000 | | | $ | 3,209,409 | |
Fort Worth, Texas Independent School District | | | | | | | | |
(School Building) 5.00% 2/15/27 (PSF) | | | 2,000,000 | | | | 2,278,120 | |
New York City, New York | | | | | | | | |
Series A-1 5.00% 8/1/19 | | | 5,000 | | | | 5,027 | |
Series E 5.00% 8/1/23 | | | 3,685,000 | | | | 4,176,911 | |
Subseries D-1 5.00% 10/1/30 | | | 4,000,000 | | | | 4,342,080 | |
San Francisco, California Bay Area Rapid Transit District | | | | | | | | |
(Election 2004) Series D 5.00% 8/1/31 | | | 4,000,000 | | | | 4,671,960 | |
| | | | | | | | |
| | | | | | | 31,009,995 | |
| | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds – 11.20% | | | | | | | | |
Atlanta, Georgia Water & Wastewater Revenue | | | | | | | | |
Series A 6.00% 11/1/25-19§ | | | 2,925,000 | | | | 3,070,314 | |
Brooklyn Arena Local Development, New York Pilot Revenue | | | | | | | | |
(Barclays Center Project) 6.50% 7/15/30-20§ | | | 5,500,000 | | | | 5,864,375 | |
Butler County, Pennsylvania Hospital Authority Revenue | | | | | | | | |
(Butler Health System Project) 7.125% 7/1/29-19§ | | | 2,250,000 | | | | 2,349,157 | |
California State Department of Water Resources | | | | | | | | |
(Water System) Series AS 5.00% 12/1/29-24§ | | | 15,000 | | | | 17,588 | |
Clifton, Texas Higher Education Finance Corporation Revenue | | | | | | | | |
(Uplift Education) Series A 6.00% 12/1/30-20§ | | | 1,100,000 | | | | 1,198,615 | |
Conroe, Texas Independent School District | | | | | | | | |
5.00% 2/15/25-20 (PSF)§ | | | 795,000 | | | | 832,270 | |
Dauphin County, Pennsylvania General Authority | | | | | | | | |
(Pinnacle Health System Project) Series A | | | | | | | | |
6.00% 6/1/29-19§ | | | 1,620,000 | | | | 1,671,856 | |
Guam Government Limited Obligation Revenue | | | | | | | | |
(Section 30) | | | | | | | | |
Series A 5.375% 12/1/24-19§ | | | 1,750,000 | | | | 1,828,015 | |
Series A 5.625% 12/1/29-19§ | | | 1,125,000 | | | | 1,178,584 | |
Maryland State Economic Development Corporation Revenue | | | | | | | | |
(Transportation Facilities Project) Series A | | | | | | | | |
5.375% 6/1/25-20§ | | | 2,535,000 | | | | 2,694,781 | |
Massachusetts Development Finance Agency Revenue | | | | | | | | |
(Harvard University) Series B-1 5.25% 10/15/29-20§ | | | 1,670,000 | | | | 1,791,676 | |
Minneapolis, Minnesota Health Care System Revenue | | | | | | | | |
(Fairview Health Services) Series A | | | | | | | | |
6.375% 11/15/23-18§ | | | 3,000,000 | | | | 3,028,410 | |
47
Schedules of investments
Delaware Tax-Free USA Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds (continued) | | | | | | | | |
New York State Dormitory Authority Revenue | | | | | | | | |
(North Shore Long Island Jewish Health System) | | | | | | | | |
Series A 5.00% 5/1/23-21§ | | | 4,000,000 | | | $ | 4,336,880 | |
New York State Dormitory Authority Revenue Non State Supported Debt | | | | | | | | |
(Orange Regional Medical Center) 6.50% 12/1/21-18§ | | | 1,650,000 | | | | 1,669,503 | |
Pennsylvania Economic Development Financing Authority Health System Revenue | | | | | | | | |
(Albert Einstein Healthcare) Series A | | | | | | | | |
6.25% 10/15/23-19§ | | | 560,000 | | | | 581,403 | |
Pennsylvania Higher Educational Facilities Authority Revenue | | | | | | | | |
(Drexel University) Series A 5.25% 5/1/25-21§ | | | 4,980,000 | | | | 5,419,385 | |
Phoenix, Arizona Civic Improvement Corporation Airport Revenue | | | | | | | | |
(Junior Lien) Series A 5.00% 7/1/26-20§ | | | 7,500,000 | | | | 7,942,050 | |
San Francisco, California City & County Airports Commission | | | | | | | | |
Series D 5.00% 5/1/25-21§ | | | 570,000 | | | | 620,439 | |
San Francisco, California City & County Public Utilities Commission Water Revenue | | | | | | | | |
Subseries A 5.00% 11/1/27-21§ | | | 7,430,000 | | | | 8,204,206 | |
Southwestern Illinois Development Authority | | | | | | | | |
(Memorial Group) 7.125% 11/1/30-23§ | | | 2,190,000 | | | | 2,717,724 | |
Virginia Commonwealth Transportation Board | | | | | | | | |
(Gans-Garvee) 5.00% 3/15/24-23§ | | | 3,250,000 | | | | 3,671,525 | |
| | | | | | | | |
| | | | | | | 60,688,756 | |
| | | | | | | | |
Special Tax Revenue Bonds – 9.22% | | | | | | | | |
Allentown, Pennsylvania Neighborhood Improvement Zone Development Authority Tax Revenue (City Center Project) | | | | | | | | |
144A 5.00% 5/1/28 # | | | 750,000 | | | | 838,860 | |
144A 5.00% 5/1/33 # | | | 650,000 | | | | 716,943 | |
Celebration Pointe, Florida Community Development District | | | | | | | | |
4.75% 5/1/24 | | | 570,000 | | | | 584,740 | |
5.00% 5/1/34 | | | 880,000 | | | | 895,110 | |
Dallas, Texas Convention Center Hotel Development Revenue | | | | | | | | |
Series A 5.00% 1/1/24 | | | 3,420,000 | | | | 3,451,874 | |
Series A 5.25% 1/1/23 | | | 5,375,000 | | | | 5,430,416 | |
48
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Special Tax Revenue Bonds (continued) | | | | | | | | |
Ernest N Morail-New Orleans, Louisiana Exhibition Hall Authority Special Tax Revenue | | | | | | | | |
5.00% 7/15/26 | | | 2,330,000 | | | $ | 2,547,552 | |
Harris County-Houston, Texas Sports Authority | | | | | | | | |
(Senior Lien) Series A 5.00% 11/15/30 | | | 1,805,000 | | | | 2,017,340 | |
Kansas City, Missouri Land Clearance Redevelopment Authority Revenue | | | | | | | | |
(Convention Center Hotel Project - TIF Financing) | | | | | | | | |
Series B 144A 4.375% 2/1/31 # | | | 400,000 | | | | 407,872 | |
Series B 144A 5.00% 2/1/40 # | | | 200,000 | | | | 207,832 | |
Louisiana State Highway Improvement Revenue | | | | | | | | |
Series A 5.00% 6/15/29 | | | 5,195,000 | | | | 5,850,765 | |
Massachusetts School Building Authority | | | | | | | | |
Series C 5.00% 8/15/29 | | | 1,630,000 | | | | 1,880,417 | |
New Jersey Economic Development Authority Revenue | | | | | | | | |
(Cigarette Tax) | | | | | | | | |
5.00% 6/15/22 | | | 1,750,000 | | | | 1,898,820 | |
5.00% 6/15/23 | | | 1,250,000 | | | | 1,353,487 | |
(School Facilities Construction) Series AA | | | | | | | | |
5.50% 12/15/29 | | | 1,480,000 | | | | 1,514,395 | |
New York City, New York Transitional Finance Authority Future Tax Secured | | | | | | | | |
Subseries A-1 5.00% 11/1/23 | | | 2,865,000 | | | | 3,270,398 | |
Subseries C 5.00% 11/1/27 | | | 4,150,000 | | | | 4,740,919 | |
Subseries E-1 5.00% 2/1/26 | | | 4,020,000 | | | | 4,399,769 | |
New York State Local Government Assistance Corporation Subordinate Lien | | | | | | | | |
Series A 5.00% 4/1/20 | | | 3,360,000 | | | | 3,536,635 | |
Public Finance Authority, Wisconsin | | | | | | | | |
(American Dream @ Meadowlands Project) 144A | | | | | | | | |
7.00% 12/1/50 # | | | 1,010,000 | | | | 1,169,247 | |
Richmond Heights, Missouri Tax Increment & Transaction Sales Tax Revenue Refunding & Improvement | | | | | | | | |
(Francis Place Redevelopment Project) 5.625% 11/1/25 | | | 1,000,000 | | | | 1,000,160 | |
St. Joseph, Missouri Industrial Development Authority Tax Increment Revenue | | | | | | | | |
(Shoppes at North Village Project) Series B | | | | | | | | |
5.375% 11/1/23 | | | 655,000 | | | | 655,085 | |
Wyandotte County, Kansas City, Kansas Unified Government Special Obligation Revenue | | | | | | | | |
(Sales Tax - Vacation Village Project Area 1 and 2A) | | | | | | | | |
Series 2015A 5.00% 9/1/27 | | | 1,505,000 | | | | 1,611,118 | |
| | | | | | | | |
| | | | | | | 49,979,754 | |
| | | | | | | | |
49
Schedules of investments
Delaware Tax-Free USA Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
State General Obligation Bonds – 14.74% | | | | | | | | |
California State | | | | | | | | |
5.00% 8/1/26 | | | 3,120,000 | | | $ | 3,750,677 | |
5.00% 9/1/29 | | | 1,500,000 | | | | 1,773,615 | |
5.00% 9/1/30 | | | 1,715,000 | | | | 2,019,670 | |
Series C 5.00% 9/1/30 | | | 5,985,000 | | | | 6,976,535 | |
(Various Purposes) | | | | | | | | |
5.00% 9/1/32 | | | 4,100,000 | | | | 4,799,255 | |
5.25% 9/1/28 | | | 7,750,000 | | | | 8,546,080 | |
Connecticut State | | | | | | | | |
Series E 5.00% 9/15/28 | | | 4,710,000 | | | | 5,422,293 | |
Series F 5.00% 9/15/27 | | | 2,790,000 | | | | 3,194,327 | |
Illinois State | | | | | | | | |
4.00% 2/1/24 | | | 1,220,000 | | | | 1,234,164 | |
5.00% 1/1/29 | | | 2,000,000 | | | | 2,103,700 | |
5.00% 3/1/36 | | | 960,000 | | | | 988,128 | |
5.00% 11/1/36 | | | 1,965,000 | | | | 2,051,794 | |
Maryland State | | | | | | | | |
(State and Local Facilities Loan) 5.00% 8/1/27 | | | 5,000,000 | | | | 6,018,900 | |
Minnesota State | | | | | | | | |
(Various Purpose) Series F 5.00% 10/1/22 | | | 8,000,000 | | | | 8,940,640 | |
New York State | | | | | | | | |
Series A 5.00% 2/15/28 | | | 5,000,000 | | | | 5,369,700 | |
Oregon State | | | | | | | | |
Series L 5.00% 5/1/26 | | | 6,000,000 | | | | 6,487,440 | |
Texas State | | | | | | | | |
(Transportation Commission Highway Improvement) | | | | | | | | |
5.00% 4/1/29 | | | 3,000,000 | | | | 3,396,150 | |
Washington State | | | | | | | | |
Series R-2015E 5.00% 7/1/31 | | | 3,000,000 | | | | 3,402,180 | |
(Various Purposes) Series 2015-A-1 5.00% 8/1/30 | | | 3,000,000 | | | | 3,412,860 | |
| | | | | | | | |
| | | | | | | 79,888,108 | |
| | | | | | | | |
Transportation Revenue Bonds – 16.08% | | | | | | | | |
Bay Area, California Toll Authority | | | | | | | | |
(San Francisco Bay Area) 4.00% 4/1/34 | | | 1,000,000 | | | | 1,067,280 | |
Broward County, Florida Airport System Revenue | | | | | | | | |
Series O 5.375% 10/1/29 | | | 2,000,000 | | | | 2,075,560 | |
California Municipal Finance Authority | | | | | | | | |
(LINXS APM Project) Series A 5.00% 12/31/43 (AMT) | | | 3,730,000 | | | | 4,171,632 | |
Chicago, Illinois O’Hare International Airport Revenue | | | | | | | | |
Series B 5.00% 1/1/32 | | | 1,000,000 | | | | 1,107,070 | |
Series B 5.00% 1/1/33 | | | 1,520,000 | | | | 1,679,083 | |
(General-Airport-Third Lien) Series C 5.25% 1/1/28 | | | 2,150,000 | | | | 2,236,365 | |
50
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Transportation Revenue Bonds (continued) | | | | | | | | |
Denver City & County, Colorado Airport System Revenue | | | | | | | | |
Series A 5.00% 12/1/34 (AMT) | | | 7,500,000 | | | $ | 8,557,800 | |
Houston, Texas Airports Commission Revenue Series B | | | | | | | | |
5.00% 7/1/25 | | | 1,000,000 | | | | 1,080,750 | |
5.00% 7/1/26 | | | 3,000,000 | | | | 3,239,670 | |
Memphis-Shelby County, Tennessee Airport Authority Revenue | | | | | | | | |
Series D 5.00% 7/1/24 | | | 4,110,000 | | | | 4,407,934 | |
Metropolitan New York Transportation Authority Revenue | | | | | | | | |
Series C 6.50% 11/15/28 | | | 545,000 | | | | 550,330 | |
New Jersey State Turnpike Authority Turnpike Revenue | | | | | | | | |
Series A 5.00% 1/1/33 | | | 1,770,000 | | | | 2,027,517 | |
New Orleans, Louisiana Aviation Board | | | | | | | | |
Series B 5.00% 1/1/32 (AGM) (AMT) | | | 2,900,000 | | | | 3,189,536 | |
Series B 5.00% 1/1/33 (AGM) (AMT) | | | 2,900,000 | | | | 3,182,576 | |
New York State Thruway Authority | | | | | | | | |
Series J 5.00% 1/1/27 | | | 5,705,000 | | | | 6,457,033 | |
Pennsylvania State Turnpike Commission Revenue | | | | | | | | |
Subordinate Series A-1 5.00% 12/1/29 | | | 3,590,000 | | | | 4,006,404 | |
Phoenix, Arizona Civic Improvement Corporation Airport Revenue | | | | | | | | |
(Junior Lien Airport) Series A 5.00% 7/1/33 | | | 3,355,000 | | | | 3,785,916 | |
Port Authority of New York & New Jersey | | | | | | | | |
(194th Series) 5.00% 10/15/32 | | | 2,500,000 | | | | 2,885,425 | |
(JFK International Air Terminal) Series 8 6.50% 12/1/28 | | | 8,300,000 | | | | 8,676,488 | |
Salt Lake City, Utah Airport Revenue | | | | | | | | |
Series B 5.00% 7/1/31 | | | 500,000 | | | | 582,890 | |
Series B 5.00% 7/1/32 | | | 600,000 | | | | 696,930 | |
Series B 5.00% 7/1/33 | | | 1,000,000 | | | | 1,157,330 | |
San Francisco, California City & County Airport Commission - San Francisco International Airport | | | | | | | | |
Series D 5.00% 5/1/25 | | | 1,430,000 | | | | 1,550,049 | |
South Jersey Port, New Jersey | | | | | | | | |
(Subordinated Marine Terminal) | | | | | | | | |
Series B 5.00% 1/1/32 (AMT) | | | 215,000 | | | | 237,392 | |
Series B 5.00% 1/1/33 (AMT) | | | 315,000 | | | | 347,023 | |
Series B 5.00% 1/1/34 (AMT) | | | 430,000 | | | | 473,000 | |
Series B 5.00% 1/1/35 (AMT) | | | 430,000 | | | | 472,291 | |
Series B 5.00% 1/1/36 (AMT) | | | 430,000 | | | | 471,228 | |
Series B 5.00% 1/1/37 (AMT) | | | 430,000 | | | | 470,166 | |
51
Schedules of investments
Delaware Tax-Free USA Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Transportation Revenue Bonds (continued) | | | | | | | | |
St. Louis, Missouri Airport Revenue | | | | | | | | |
(Lambert-St. Louis International) Series A-1 | | | | | | | | |
6.125% 7/1/24 | | | 3,780,000 | | | $ | 3,911,771 | |
Texas Private Activity Bond Surface Transportation Corporate Senior Lien Revenue | | | | | | | | |
(LBJ Infrastructure) 7.50% 6/30/33 | | | 3,625,000 | | | | 3,957,485 | |
(NTE Mobility Partners) | | | | | | | | |
7.00% 12/31/38 (AMT) | | | 3,750,000 | | | | 4,421,175 | |
7.50% 12/31/31 | | | 3,765,000 | | | | 4,024,484 | |
| | | | | | | | |
| | | | | | | 87,157,583 | |
| | | | | | | | |
Water & Sewer Revenue Bonds – 3.18% | | | | | | | | |
Atlanta, Georgia Water & Wastewater Revenue | | | | | | | | |
Series B 5.50% 11/1/23 (AGM) | | | 1,175,000 | | | | 1,225,713 | |
California State Department of Water Resources | | | | | | | | |
(Water System) Series AS 5.00% 12/1/29 | | | 2,680,000 | | | | 3,137,288 | |
Dominion, Colorado Water & Sanitation District | | | | | | | | |
5.25% 12/1/27 | | | 1,390,000 | | | | 1,469,272 | |
Great Lakes, Michigan Water Authority Water Supply System Revenue | | | | | | | | |
(Senior Lien Bond) Series C 5.00% 7/1/31 | | | 3,000,000 | | | | 3,456,090 | |
Sacramento, California Water Revenue | | | | | | | | |
5.00% 9/1/26 | | | 3,160,000 | | | | 3,595,100 | |
San Antonio, Texas Water System Revenue | | | | | | | | |
Series A 5.00% 5/15/32 | | | 1,500,000 | | | | 1,741,740 | |
Series A 5.00% 5/15/33 | | | 2,250,000 | | | | 2,601,360 | |
| | | | | | | | |
| | | | | | | 17,226,563 | |
| | | | | | | | |
Total Municipal Bonds (cost $517,294,939) | | | | | | | 536,508,379 | |
| | | | | | | | |
|
| |
Short-Term Investments – 1.31% | | | | | | | | |
Variable Rate Demand Notes – 1.31%¤ | | | | | | | | |
Mississippi Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue | | | | | | | | |
(Chevron USA) | | | | | | | | |
Series A 1.54% 12/1/30 | | | 125,000 | | | | 125,000 | |
Series A 1.54% 11/1/35 | | | 1,040,000 | | | | 1,040,000 | |
Series G 1.54% 12/1/30 | | | 3,225,000 | | | | 3,225,000 | |
Series I 1.54% 11/1/35 | | | 2,700,000 | | | | 2,700,000 | |
| | | | | | | | |
Total Short-Term Investments (cost $7,090,000) | | | | | | | 7,090,000 | |
| | | | | | | | |
| | |
Total Value of Securities – 100.28%
(cost $524,384,939) | | | | | | $ | 543,598,379 | |
| | | | | | | | |
52
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At Aug. 31, 2018, the aggregate value of Rule 144A securities was $22,087,228, which represents 4.07% of the Fund’s net assets. See Note 9 in “Notes to financial statements.” |
| ¤ | Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of Aug. 31, 2018. |
| § | Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 9 in “Notes to financial statements.” |
| ° | Principal amount shown is stated in US Dollars unless noted that the security is denominated in another currency. |
| • | Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at Aug. 31, 2018. For securities based on a published reference rate and spread, the reference rate and spread are indicated in their description above. The reference rate descriptions (i.e. LIBOR03M, LIBOR06M, etc.) used in this report are identical for different securities, but the underlying reference rates may differ due to the timing of the reset period. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their description above. |
| ^ | Zero coupon security. The rate shown is the effective yield at the time of purchase. |
Summary of abbreviations:
AGM – Insured by Assured Guaranty Municipal Corporation
AMT – Subject to Alternative Minimum Tax
ICE – Intercontinental Exchange
LIBOR – London Interbank Offered Rate
LIBOR03M – ICE LIBOR USD 3 Month
LIBOR06M – ICE LIBOR USD 6 Month
PSF – Guaranteed by Permanent School Fund
USD – US Dollar
See accompanying notes, which are an integral part of the financial statements.
53
| | |
| Schedules of investments |
| Delaware National High-Yield Municipal Bond Fund | | August 31, 2018 |
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds – 99.11% | | | | | | | | |
Corporate Revenue Bonds - 21.76% | | | | | | | | |
Allegheny County, Pennsylvania Industrial Development Authority Revenue | | | | | | | | |
(Environmental Improvement - US Steel Corp. Project) | | | | | | | | |
5.75% 8/1/42 (AMT) | | | 2,000,000 | | | $ | 2,019,340 | |
Buckeye, Ohio Tobacco Settlement Financing Authority | | | | | | | | |
(Asset-Backed Senior Turbo) | | | | | | | | |
Series A-2 5.875% 6/1/47 | | | 36,540,000 | | | | 36,771,664 | |
Series A-2 6.00% 6/1/42 | | | 3,100,000 | | | | 3,110,695 | |
Series A-2 6.50% 6/1/47 | | | 21,205,000 | | | | 21,644,580 | |
California County Tobacco Securitization Agency Settlement Revenue | | | | | | | | |
(Capital Appreciation Bond - Fresno County Tobacco Funding Corporation) 0.83% 6/1/55 ^ | | | 100,000,000 | | | | 5,258,000 | |
California Pollution Control Financing Authority Revenue | | | | | | | | |
(Poseidon Resources) 144A 5.00% 7/1/37 (AMT)# | | | 5,000,000 | | | | 5,286,100 | |
California State Enterprise Development Authority Revenue | | | | | | | | |
(Sunpower Corp. - Recovery Zone Facility) | | | | | | | | |
8.50% 4/1/31 | | | 1,000,000 | | | | 1,064,570 | |
Central Plains Energy Project, Nebraska | | | | | | | | |
(Project No. 3) | | | | | | | | |
Series A 5.00% 9/1/37 | | | 3,210,000 | | | | 3,775,602 | |
Series A 5.00% 9/1/42 | | | 3,745,000 | | | | 4,468,047 | |
Chandler, Arizona Industrial Development Authority Revenue | | | | | | | | |
(Intel Corporation Project) Series 2007 2.70% 12/1/37 (AMT)• | | | 4,500,000 | | | | 4,514,445 | |
Columbus County, North Carolina Industrial Facilities & Pollution Control Financing | | | | | | | | |
(International Paper Co. Project) Series A 5.70% 5/1/34 | | | 1,000,000 | | | | 1,060,260 | |
Florida Development Finance Corporation Revenue | | | | | | | | |
(Brightline Passenger Rail Project) 144A 5.625% 1/1/47 (AMT)#• | | | 3,890,000 | | | | 4,064,622 | |
Golden State, California Tobacco Securitization Corporate Settlement Revenue | | | | | | | | |
Series A-1 5.00% 6/1/47 | | | 16,430,000 | | | | 16,890,861 | |
Series A-1 5.25% 6/1/47 | | | 11,310,000 | | | | 11,799,723 | |
(Capital Appreciation - Asset-Backed-1st Subordinate) | | | | | | | | |
Series B 1.548% 6/1/47 ^ | | | 30,145,000 | | | | 5,351,642 | |
Houston, Texas Airport System Revenue | | | | | | | | |
Series B-1 5.00% 7/15/35 (AMT) | | | 5,000,000 | | | | 5,377,900 | |
(Special Facilities Continental Airlines, Inc. Terminal Improvements Projects) Series 2011 | | | | | | | | |
6.625% 7/15/38 (AMT) | | | 2,000,000 | | | | 2,180,600 | |
54
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Corporate Revenue Bonds (continued) | | | | | | | | |
Houston, Texas Airport System Revenue | | | | | | | | |
(United Airlines Inc.) 5.00% 7/1/29 (AMT) | | | 1,150,000 | | | $ | 1,244,507 | |
Louisiana Local Government Environmental Facilities & Community Development Authority Revenue | | | | | | | | |
(Westlake Chemical Corp.) Series A-1 6.50% 11/1/35 | | | 3,000,000 | | | | 3,264,720 | |
Lower Alabama Gas District | | | | | | | | |
Series A 5.00% 9/1/46 | | | 3,565,000 | | | | 4,284,346 | |
Main Street Natural Gas Project Revenue, Georgia | | | | | | | | |
Series A 5.50% 9/15/23 | | | 40,000 | | | | 45,454 | |
Michigan Tobacco Settlement Financing Authority Revenue Asset-Backed | | | | | | | | |
Series A 6.00% 6/1/48 | | | 1,255,000 | | | | 1,260,911 | |
Mission, Texas Economic Development Corporation Revenue | | | | | | | | |
(Senior Lien - Natgasoline Project) Series B 144A | | | | | | | | |
5.75% 10/1/31 (AMT)# | | | 4,500,000 | | | | 4,641,345 | |
M-S-R Energy Authority, California Gas Revenue | | | | | | | | |
Series A 6.50% 11/1/39 | | | 2,500,000 | | | | 3,511,475 | |
Series B 6.50% 11/1/39 | | | 2,500,000 | | | | 3,511,475 | |
Nassau County, New York Tobacco Settlement Corporation Revenue | | | | | | | | |
(Asset-Backed) Series A-3 5.125% 6/1/46 | | | 1,945,000 | | | | 1,924,247 | |
Nevada State Department of Business & Industry | | | | | | | | |
(Green Fulcrum Sierra Biofuels Project) 144A | | | | | | | | |
6.25% 12/15/37 (AMT)# | | | 2,500,000 | | | | 2,712,100 | |
New Jersey Economic Development Authority Special Facility Revenue | | | | | | | | |
(Continental Airlines Project) | | | | | | | | |
5.25% 9/15/29 (AMT) | | | 4,000,000 | | | | 4,347,160 | |
Series B 5.625% 11/15/30 (AMT) | | | 1,270,000 | | | | 1,436,230 | |
New York City, New York Industrial Development Agency | | | | | | | | |
(Brooklyn Navy Yard Cogeneration Partners Project) | | | | | | | | |
5.65% 10/1/28 (AMT) | | | 4,750,000 | | | | 4,793,937 | |
5.75% 10/1/36 (AMT) | | | 5,020,000 | | | | 5,066,435 | |
New York Liberty Development Corporation Revenue | | | | | | | | |
(Goldman Sachs Headquarters) 5.25% 10/1/35 | | | 7,000,000 | | | | 8,666,630 | |
(Second Priority - Bank of America Tower) Class 3 | | | | | | | | |
6.375% 7/15/49 | | | 2,000,000 | | | | 2,098,860 | |
New York Transportation Development Corporation Special Facility Revenue | | | | | | | | |
(Delta Air Lines, Inc. - LaGuardia Airport Terminals C&D Redevelopment Project) | | | | | | | | |
Series 2018 4.00% 1/1/36 (AMT) | | | 1,960,000 | | | | 1,985,833 | |
55
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Corporate Revenue Bonds (continued) | | | | | | | | |
New York Transportation Development Corporation Special Facility Revenue | | | | | | | | |
(Delta Air Lines, Inc. - LaGuardia Airport Terminals C&D Redevelopment Project) | | | | | | | | |
Series 2018 5.00% 1/1/36 (AMT) | | | 3,880,000 | | | $ | 4,303,502 | |
Northern Tobacco Securitization Corporation Revenue, Alaska | | | | | | | | |
(Tobacco Settlement Asset-Backed Bonds) Series A | | | | | | | | |
5.00% 6/1/46 | | | 6,570,000 | | | | 6,599,959 | |
Pennsylvania Economic Development Financing Authority | | | | | | | | |
(National Gypsum) 5.50% 11/1/44 (AMT) | | | 4,500,000 | | | | 4,746,735 | |
Pima County, Arizona Industrial Development Authority Pollution Control Revenue | | | | | | | | |
(Tucson Electric Power) Series A 5.25% 10/1/40 | | | 500,000 | | | | 530,405 | |
Port of Seattle, Washington Industrial Development Corporation Special Facilities Revenue | | | | | | | | |
(Delta Airlines) 5.00% 4/1/30 (AMT) | | | 2,000,000 | | | | 2,170,560 | |
Public Authority for Colorado Energy Natural Gas Revenue | | | | | | | | |
Series 28 6.50% 11/15/38 | | | 2,000,000 | | | | 2,752,980 | |
Salt Verde, Arizona Financial Senior Gas Revenue | | | | | | | | |
5.00% 12/1/37 | | | 11,765,000 | | | | 13,982,114 | |
5.25% 12/1/27 | | | 2,235,000 | | | | 2,608,580 | |
5.25% 12/1/28 | | | 1,050,000 | | | | 1,235,609 | |
5.50% 12/1/29 | | | 765,000 | | | | 924,327 | |
Shoals, Indiana | | | | | | | | |
(National Gypsum Co. Project) 7.25% 11/1/43 (AMT) | | | 1,625,000 | | | | 1,822,893 | |
Tennessee State Energy Acquisition Gas Revenue | | | | | | | | |
Series A 4.00% 5/1/48 • | | | 720,000 | | | | 762,941 | |
Series C 5.00% 2/1/27 | | | 2,940,000 | | | | 3,322,612 | |
Tobacco Settlement Financing Corporation, Louisiana | | | | | | | | |
Asset-Backed Note Series A 5.25% 5/15/35 | | | 2,540,000 | | | | 2,734,513 | |
Tobacco Settlement Financing Corporation, New Jersey | | | | | | | | |
Series A 5.00% 6/1/46 | | | 1,785,000 | | | | 1,950,291 | |
Series B 5.00% 6/1/46 | | | 4,460,000 | | | | 4,816,577 | |
Tobacco Settlement Financing Corporation, Virginia | | | | | | | | |
Series B-1 5.00% 6/1/47 | | | 2,000,000 | | | | 2,000,040 | |
Series C 2.419% 6/1/47 ^ | | | 66,475,000 | | | | 7,613,382 | |
Series D 2.594% 6/1/47 ^ | | | 137,270,000 | | | | 13,526,586 | |
TSASC, New York | | | | | | | | |
Series A 5.00% 6/1/41 | | | 705,000 | | | | 761,379 | |
Tulsa, Oklahoma Municipal Airports Improvement Trust Revenue | | | | | | | | |
Series A 5.50% 6/1/35 (AMT) | | | 2,000,000 | | | | 2,140,680 | |
56
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Corporate Revenue Bonds (continued) | | | | | | | | |
Tulsa, Oklahoma Municipal Airports Improvement Trust Revenue | | | | | | | | |
(American Airlines) 5.00% 6/1/35 (AMT)• | | | 3,000,000 | | | $ | 3,221,310 | |
Valparaiso, Indiana | | | | | | | | |
(Pratt Paper LLC Project) 7.00% 1/1/44 (AMT) | | | 2,865,000 | | | | 3,355,488 | |
Washington Economic Development Finance Authority Revenue | | | | | | | | |
(Columbia Pulp I, LLC Project) Series 2017A 144A | | | | | | | | |
7.50% 1/1/32 (AMT)# | | | 5,000,000 | | | | 5,733,000 | |
Wisconsin Public Finance Authority | | | | | | | | |
(National Gypsum) 4.00% 8/1/35 (AMT) | | | 2,000,000 | | | | 1,951,860 | |
| | | | | | | | |
| | | | | | | 285,002,639 | |
| | | | | | | | |
Education Revenue Bonds – 13.48% | | | | | | | | |
Arizona Industrial Development Authority Revenue | | | | | | | | |
(Accel Schools Project) Series A 144A 5.25% 8/1/48 # | | | 3,200,000 | | | | 3,204,736 | |
(American Charter Schools Foundation Project) | | | | | | | | |
144A 6.00% 7/1/37 # | | | 775,000 | | | | 822,298 | |
144A 6.00% 7/1/47 # | | | 4,735,000 | | | | 4,982,782 | |
(Basis Schools Projects) | | | | | | | | |
Series A 144A 5.125% 7/1/37 # | | | 750,000 | | | | 781,073 | |
Series A 144A 5.375% 7/1/50 # | | | 1,000,000 | | | | 1,044,350 | |
(Kaizen Education Foundation Project) 144A | | | | | | | | |
5.80% 7/1/52 # | | | 4,000,000 | | | | 4,160,120 | |
Arlington, Texas Higher Education Finance | | | | | | | | |
(Arlington Classic Academy) 7.65% 8/15/40 | | | 1,000,000 | | | | 1,076,150 | |
(Leadership Preparatory School) | | | | | | | | |
Series A 5.00% 6/15/36 | | | 700,000 | | | | 708,631 | |
Series A 5.00% 6/15/46 | | | 1,325,000 | | | | 1,336,514 | |
Build NYC Resource, New York | | | | | | | | |
5.00% 11/1/39 | | | 1,000,000 | | | | 1,016,880 | |
5.50% 11/1/44 | | | 2,500,000 | | | | 2,600,250 | |
(Inwood Academy for Leadership Charter School Project) | | | | | | | | |
Series A 144A 5.125% 5/1/38 # | | | 575,000 | | | | 589,266 | |
Series A 144A 5.50% 5/1/48 # | | | 1,500,000 | | | | 1,566,120 | |
Burbank, Illinois | | | | | | | | |
(Intercultural Montessori Language) 144A | | | | | | | | |
6.25% 9/1/45 # | | | 4,000,000 | | | | 4,224,280 | |
California Educational Facilities Authority Revenue | | | | | | | | |
(Loma Linda University) Series A 5.00% 4/1/47 | | | 1,500,000 | | | | 1,678,320 | |
California Municipal Finance Authority Revenue | | | | | | | | |
(California Baptist University) Series A 144A | | | | | | | | |
5.50% 11/1/45 # | | | 4,000,000 | | | | 4,486,200 | |
57
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Education Revenue Bonds (continued) | | | | | | | | |
California Municipal Finance Authority Revenue | | | | | | | | |
(Julian Charter School Project) Series A 144A | | | | | | | | |
5.625% 3/1/45 # | | | 5,650,000 | | | $ | 5,697,234 | |
(Partnership Uplift Community Project) Series A | | | | | | | | |
5.25% 8/1/42 | | | 1,700,000 | | | | 1,736,584 | |
(Santa Rosa Academy Project) Series A 6.00% 7/1/42 | | | 1,250,000 | | | | 1,329,063 | |
(Southwestern Law School) 6.50% 11/1/41 | | | 1,500,000 | | | | 1,677,510 | |
(The Creative Center of Los Altos Project) Series B 144A | | | | | | | | |
4.50% 11/1/46 # | | | 1,000,000 | | | | 1,001,980 | |
California School Finance Authority | | | | | | | | |
(Aspire Public Schools) | | | | | | | | |
Series A 144A 5.00% 8/1/35 # | | | 585,000 | | | | 631,320 | |
Series A 144A 5.00% 8/1/40 # | | | 605,000 | | | | 647,955 | |
(Encore Education Obligated Group) Series A 144A | | | | | | | | |
5.00% 6/1/52 # | | | 1,000,000 | | | | 878,030 | |
(Escuela Popular Project) 144A 6.50% 7/1/50 # | | | 2,750,000 | | | | 2,760,643 | |
(New Designs Charter School) Series A 5.50% 6/1/42 | | | 1,750,000 | | | | 1,815,573 | |
(View Park Elementary & Middle Schools) | | | | | | | | |
Series A 5.875% 10/1/44 | | | 1,000,000 | | | | 1,063,030 | |
Series A 6.00% 10/1/49 | | | 720,000 | | | | 768,139 | |
California State University | | | | | | | | |
(Systemwide) | | | | | | | | |
Series A 5.00% 11/1/26 | | | 2,000,000 | | | | 2,430,920 | |
Series A 5.00% 11/1/27 | | | 2,300,000 | | | | 2,796,892 | |
California Statewide Communities Development Authority Charter School Revenue | | | | | | | | |
(Green Dot Public Schools) Series A 7.25% 8/1/41 | | | 1,915,000 | | | | 2,137,504 | |
California Statewide Communities Development Authority Revenue | | | | | | | | |
(California Baptist University) Series A 144A | | | | | | | | |
5.00% 11/1/41 # | | | 1,875,000 | | | | 2,076,563 | |
(Lancer Educational Student Housing Project) Series A | | | | | | | | |
144A 5.00% 6/1/46 # | | | 1,500,000 | | | | 1,623,810 | |
Capital Trust Agency, Florida | | | | | | | | |
(River City Education Services Project) | | | | | | | | |
Series A 5.375% 2/1/35 | | | 870,000 | | | | 863,867 | |
Series A 5.625% 2/1/45 | | | 1,500,000 | | | | 1,498,890 | |
Colorado Educational & Cultural Facilities Authority Revenue | | | | | | | | |
(Charter School - Community Leadership Academy) | | | | | | | | |
7.45% 8/1/48 | | | 2,000,000 | | | | 2,287,260 | |
(Charter School - Loveland Classical School) 144A | | | | | | | | |
5.00% 7/1/46 # | | | 1,500,000 | | | | 1,523,190 | |
58
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Education Revenue Bonds (continued) | | | | | | | | |
Colorado Educational & Cultural Facilities Authority Revenue | | | | | | | | |
(Skyview Charter School) 144A 5.375% 7/1/44 # | | | 500,000 | | | $ | 513,395 | |
(Windsor Charter Academy Project) Series 2016 144A | | | | | | | | |
5.00% 9/1/36 # | | | 1,000,000 | | | | 1,006,330 | |
Delaware State Economic Development Authority Revenue | | | | | | | | |
(Charter School - Aspira Charter) | | | | | | | | |
5.00% 6/1/36 | | | 700,000 | | | | 709,359 | |
5.00% 6/1/46 | | | 820,000 | | | | 823,067 | |
5.00% 6/1/51 | | | 1,035,000 | | | | 1,028,314 | |
District of Columbia Revenue | | | | | | | | |
(Provident Group - Howard Properties) 5.00% 10/1/35 | | | 2,500,000 | | | | 2,537,600 | |
East Hempfield Township, Pennsylvania Industrial Development Authority | | | | | | | | |
(Student Services Income - Student Housing Project) | | | | | | | | |
5.00% 7/1/30 | | | 1,000,000 | | | | 1,071,940 | |
Hawaii State Department of Budget & Finance | | | | | | | | |
(Chaminade University) Series A 144A 5.00% 1/1/45 # | | | 1,500,000 | | | | 1,507,965 | |
(Hawaii Pacific University) Series A 6.875% 7/1/43 | | | 2,000,000 | | | | 2,101,880 | |
Henderson, Nevada Public Improvement Trust | | | | | | | | |
(Touro College & University System) 5.50% 1/1/44 | | | 2,000,000 | | | | 2,177,040 | |
Idaho Housing & Finance Association | | | | | | | | |
(Idaho Arts Charter School Inc.) 144A 5.00% 12/1/36 # | | | 715,000 | | | | 761,825 | |
(North Star Charter School) | | | | | | | | |
Series A 6.75% 7/1/48 | | | 529,150 | | | | 550,094 | |
Series B 144A 4.88% 7/1/49 #^ | | | 2,888,155 | | | | 383,403 | |
(Xavier Charter School Project) Series A 5.00% 6/1/50 | | | 1,000,000 | | | | 1,060,930 | |
Illinois Finance Authority Charter School Revenue | | | | | | | | |
(Chicago International Charter School Project) | | | | | | | | |
5.00% 12/1/47 | | | 2,805,000 | | | | 2,920,650 | |
(Uno Charter School) Series A 7.125% 10/1/41 | | | 1,000,000 | | | | 1,060,940 | |
Illinois Finance Authority Revenue | | | | | | | | |
(Lake Forest College) Series A 6.00% 10/1/48 | | | 1,000,000 | | | | 1,067,700 | |
(Rogers Park Montessori) | | | | | | | | |
6.00% 2/1/34 | | | 675,000 | | | | 708,547 | |
6.125% 2/1/45 | | | 1,800,000 | | | | 1,885,248 | |
Illinois Finance Authority Student Housing Revenue | | | | | | | | |
(Dekalb II - Northern Illinois University Project) | | | | | | | | |
6.875% 10/1/43 | | | 1,000,000 | | | | 1,079,300 | |
Indiana State Finance Authority Revenue Educational Facilities | | | | | | | | |
(Drexel Foundation - Thea Bowman Academy Charter School) Series A 7.00% 10/1/39 | | | 1,000,000 | | | | 1,009,860 | |
59
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Education Revenue Bonds (continued) | | | | | | | | |
Kanawha, West Virginia | | | | | | | | |
(West Virginia University Foundation Project) | | | | | | | | |
6.75% 7/1/45 | | | 2,500,000 | | | $ | 2,653,325 | |
Kent County, Delaware Student Housing and Dining Facilities Revenue | | | | | | | | |
(Delaware State University Project) | | | | | | | | |
Series A 5.00% 7/1/53 | | | 140,000 | | | | 149,561 | |
Series A 5.00% 7/1/58 | | | 1,250,000 | | | | 1,325,425 | |
Louisiana Public Facilities Authority Revenue | | | | | | | | |
(Lake Charles Charter Academy Foundation Project) | | | | | | | | |
8.00% 12/15/41 | | | 1,500,000 | | | | 1,615,545 | |
Macon-Bibb County, Georgia Urban Development Authority Revenue | | | | | | | | |
(Academy for Classical Education) | | | | | | | | |
Series A 144A 5.875% 6/15/47 # | | | 1,680,000 | | | | 1,733,642 | |
Series A 144A 6.00% 6/15/52 # | | | 1,530,000 | | | | 1,581,469 | |
Maricopa County, Arizona Industrial Development Authority | | | | | | | | |
(Paradise Schools Projects) Series 2016 144A | | | | | | | | |
5.00% 7/1/47 # | | | 1,500,000 | | | | 1,552,905 | |
Maryland State Health & Higher Educational Facilities Authority Revenue | | | | | | | | |
(Patterson Park Public Charter School) Series A | | | | | | | | |
6.125% 7/1/45 | | | 1,000,000 | | | | 1,008,550 | |
Miami-Dade County, Florida Industrial Development Authority | | | | | | | | |
(Youth Co-Op Charter School) | | | | | | | | |
Series A 144A 5.75% 9/15/35 # | | | 1,000,000 | | | | 1,011,490 | |
Series A 144A 6.00% 9/15/45 # | | | 1,000,000 | | | | 1,016,570 | |
Michigan Finance Authority Limited Obligation Revenue | | | | | | | | |
(Public School Academy Old Redford) Series A | | | | | | | | |
6.50% 12/1/40 | | | 900,000 | | | | 905,454 | |
(Public School Academy University Learning) | | | | | | | | |
7.50% 11/1/40 | | | 1,000,000 | | | | 1,023,930 | |
Michigan Public Educational Facilities Authority Revenue | | | | | | | | |
(Limited-Obligation-Landmark Academy) 7.00% 12/1/39 | | | 950,000 | | | | 950,627 | |
Nevada State Department of Business & Industry | | | | | | | | |
(Somerset Academy) | | | | | | | | |
Series A 144A 5.00% 12/15/35 # | | | 1,595,000 | | | | 1,650,921 | |
Series A 144A 5.125% 12/15/45 # | | | 2,515,000 | | | | 2,598,850 | |
New Jersey State Higher Education Student Assistance Authority Student Loan Revenue | | | | | | | | |
Series 1B 5.75% 12/1/39 (AMT) | | | 1,250,000 | | | | 1,355,725 | |
60
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Education Revenue Bonds (continued) | | | | | | | | |
New York State Dormitory Authority | | | | | | | | |
(Touro College & University System) Series A | | | | | | | | |
5.50% 1/1/44 | | | 2,875,000 | | | $ | 3,151,546 | |
North Texas Education Finance Revenue | | | | | | | | |
(Uplift Education) Series A 5.25% 12/1/47 | | | 2,100,000 | | | | 2,212,560 | |
Pennsylvania State Higher Educational Facilities Authority Revenue | | | | | | | | |
(Foundation Indiana University) Series A 2.216% | | | | | | | | |
(LIBOR03M + 0.67%) 7/1/39 (SGI)• | | | 2,400,000 | | | | 2,058,384 | |
Philadelphia, Pennsylvania Authority for Industrial Development Revenue | | | | | | | | |
(1st Philadelphia Preparatory) Series A 7.25% 6/15/43 | | | 1,230,000 | | | | 1,393,615 | |
(Global Leadership Academy Project) 6.375% 11/15/40 | | | 1,000,000 | | | | 1,028,360 | |
(Green Woods Charter School Project) Series A | | | | | | | | |
5.75% 6/15/42 | | | 1,600,000 | | | | 1,653,008 | |
(New Foundation Charter School Project) | | | | | | | | |
6.625% 12/15/41 | | | 1,000,000 | | | | 1,099,390 | |
(Tacony Academy Charter School Project) | | | | | | | | |
7.00% 6/15/43 | | | 1,540,000 | | | | 1,683,651 | |
Phoenix, Arizona Industrial Development Authority Education Revenue | | | | | | | | |
(Basic Schools Project) | | | | | | | | |
Series 2015A 144A 5.00% 7/1/46 # | | | 4,000,000 | | | | 4,094,880 | |
Series 2016A 144A 5.00% 7/1/45 # | | | 2,000,000 | | | | 2,048,620 | |
(Choice Academies Project) | | | | | | | | |
5.375% 9/1/32 | | | 1,000,000 | | | | 1,040,130 | |
5.625% 9/1/42 | | | 600,000 | | | | 623,952 | |
(Downtown Phoenix Student Housing, LLC - Arizona State University Project) | | | | | | | | |
Series 2018A 5.00% 7/1/37 | | | 250,000 | | | | 275,897 | |
Series 2018A 5.00% 7/1/42 | | | 1,400,000 | | | | 1,536,570 | |
(Eagle College Preparatory Project) Series A | | | | | | | | |
5.00% 7/1/43 | | | 450,000 | | | | 450,743 | |
(Rowan University Project) 5.00% 6/1/42 | | | 2,000,000 | | | | 2,144,040 | |
Pima County, Arizona Industrial Development Authority Education Revenue | | | | | | | | |
(American Leadership Academy Project) | | | | | | | | |
144A 5.00% 6/15/47 # | | | 1,630,000 | | | | 1,646,072 | |
144A 5.00% 6/15/52 # | | | 1,400,000 | | | | 1,408,988 | |
(Edkey Charter Schools Project) 6.00% 7/1/43 | | | 2,000,000 | | | | 1,907,820 | |
Pottsboro, Texas Higher Education Finance Authority Revenue | | | | | | | | |
Series A 5.00% 8/15/36 | | | 655,000 | | | | 667,674 | |
61
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Education Revenue Bonds (continued) | | | | | | | | |
Pottsboro, Texas Higher Education Finance Authority Revenue | | | | | | | | |
Series A 5.00% 8/15/46 | | | 1,000,000 | | | $ | 1,001,270 | |
Private Colleges & Universities Authority, Georgia Revenue | | | | | | | | |
(Mercer University) Series A 5.00% 10/1/32 | | | 1,005,000 | | | | 1,048,526 | |
St. Paul, Minnesota Housing & Redevelopment Authority Charter School Lease Revenue | | | | | | | | |
(Academia Cesar Chavez School Project) Series A | | | | | | | | |
5.25% 7/1/50 | | | 2,560,000 | | | | 2,431,027 | |
(Hmong College Preparatory Academy Project) | | | | | | | | |
Series A 5.75% 9/1/46 | | | 1,000,000 | | | | 1,059,700 | |
Series A 6.00% 9/1/51 | | | 3,000,000 | | | | 3,207,810 | |
University of California | | | | | | | | |
Series AZ 5.25% 5/15/58 | | | 6,185,000 | | | | 7,273,807 | |
Utah State Charter School Finance Authority Revenue | | | | | | | | |
(North Davis Preparatory) 6.375% 7/15/40 | | | 1,290,000 | | | | 1,357,145 | |
Wisconsin Public Finance Authority Revenue | | | | | | | | |
(Pine Lake Preparatory) 144A 5.50% 3/1/45 # | | | 3,460,000 | | | | 3,558,714 | |
(Roseman University Health Sciences Project) | | | | | | | | |
5.75% 4/1/42 | | | 2,000,000 | | | | 2,130,540 | |
Wyoming Community Development Authority Student Housing Revenue | | | | | | | | |
(CHF-Wyoming LLC) 6.50% 7/1/43 | | | 1,000,000 | | | | 1,057,530 | |
Yonkers, New York Economic Development Corporation Education Revenue | | | | | | | | |
(Charter School Educational Excellence) Series A | | | | | | | | |
6.25% 10/15/40 | | | 595,000 | | | | 616,563 | |
| | | | | | | | |
| | | | | | | 176,491,835 | |
| | | | | | | | |
Electric Revenue Bonds – 0.17% | | | | | | | | |
Long Island, New York Power Authority | | | | | | | | |
Series A 5.00% 9/1/44 | | | 1,960,000 | | | | 2,170,014 | |
| | | | | | | | |
| | | | | | | 2,170,014 | |
| | | | | | | | |
Healthcare Revenue Bonds – 27.58% | | | | | | | | |
Abag, California Finance Authority for Nonprofit Corporations | | | | | | | | |
(Episcopal Senior Communities) 6.125% 7/1/41 | | | 1,650,000 | | | | 1,798,269 | |
Alachua County, Florida Health Facilities Authority | | | | | | | | |
(Oak Hammock University) | | | | | | | | |
Series A 8.00% 10/1/42 | | | 1,000,000 | | | | 1,149,180 | |
Series A 8.00% 10/1/46 | | | 1,500,000 | | | | 1,717,710 | |
62
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Allegheny County, Pennsylvania Hospital Development Authority Revenue | | | | | | | | |
(Allegheny Health Network Obligated Group Issue) | | | | | | | | |
Series A 4.00% 4/1/44 | | | 4,000,000 | | | $ | 3,955,640 | |
Series A 5.00% 4/1/47 | | | 4,000,000 | | | | 4,378,680 | |
Allen County, Indiana Economic Development Revenue | | | | | | | | |
(StoryPoint Fort Wayne Project) Series A-1 144A | | | | | | | | |
6.875% 1/15/52 # | | | 1,650,000 | | | | 1,777,380 | |
Antelope Valley, California Healthcare District | | | | | | | | |
Series A 5.00% 3/1/41 | | | 1,000,000 | | | | 1,054,890 | |
Apple Valley, Minnesota | | | | | | | | |
(Minnesota Senior Living LLC, Project) | | | | | | | | |
Series B 5.00% 1/1/47 | | | 2,500,000 | | | | 2,566,725 | |
Series D 7.25% 1/1/52 | | | 7,290,000 | | | | 7,375,001 | |
Bexar County, Texas Health Facilities Development | | | | | | | | |
(Army Retirement Residence Foundation Project) Series | | | | | | | | |
2010 5.875% 7/1/30 | | | 155,000 | | | | 162,978 | |
Birmingham, Alabama Special Care Facilities Financing Authority | | | | | | | | |
(Methodist Home for the Aging) | | | | | | | | |
5.50% 6/1/30 | | | 1,850,000 | | | | 2,021,421 | |
5.75% 6/1/35 | | | 1,500,000 | | | | 1,653,195 | |
5.75% 6/1/45 | | | 2,500,000 | | | | 2,738,025 | |
6.00% 6/1/50 | | | 2,650,000 | | | | 2,936,333 | |
Board of Managers Joint Guadalupe County-City of Seguin, Texas Hospital | | | | | | | | |
5.00% 12/1/45 | | | 1,100,000 | | | | 1,115,257 | |
Butler County, Ohio Port Authority | | | | | | | | |
(StoryPoint Fairfield Project) Series A-1 144A | | | | | | | | |
6.50% 1/15/52 # | | | 650,000 | | | | 684,145 | |
California Health Facilities Financing Authority Revenue | | | | | | | | |
(Kaiser Permanente) Series A-2 5.00% 11/1/47 | | | 4,870,000 | | | | 6,229,509 | |
California Municipal Finance Authority Revenue | | | | | | | | |
(Northbay Healthcare Group) Series A 5.25% 11/1/47 | | | 500,000 | | | | 544,190 | |
California Statewide Communities Development Authority Revenue | | | | | | | | |
(BE Group) 144A 7.25% 11/15/41 # | | | 500,000 | | | | 528,970 | |
(Loma Linda University Medical Center) | | | | | | | | |
5.50% 12/1/54 | | | 13,000,000 | | | | 14,118,780 | |
Series A 5.25% 12/1/29 | | | 1,500,000 | | | | 1,667,205 | |
Series A 144A 5.25% 12/1/48 # | | | 1,615,000 | | | | 1,781,894 | |
Series A 144A 5.25% 12/1/56 # | | | 3,000,000 | | | | 3,239,010 | |
Series A 144A 5.50% 12/1/58 # | | | 8,135,000 | | | | 8,979,494 | |
63
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Camden County, New Jersey Improvement Authority Revenue | | | | | | | | |
(Cooper Health System Obligation Group) | | | | | | | | |
5.75% 2/15/42 | | | 2,500,000 | | | $ | 2,716,750 | |
Capital Trust Agency, Florida | | | | | | | | |
(Elim Senior Housing Inc. Project) 144A 5.875% 8/1/52 # | | | 2,500,000 | | | | 2,563,400 | |
(Tuscan Gardens Senior Living Center) Series A | | | | | | | | |
7.00% 4/1/49 | | | 5,000,000 | | | | 4,913,050 | |
Chesterfield County, Virginia Economic Development Authority Revenue | | | | | | | | |
(1st Mortgage - Brandermill Woods Project) | | | | | | | | |
5.125% 1/1/43 | | | 1,030,000 | | | | 1,060,807 | |
Chesterton, Indiana | | | | | | | | |
(StoryPoint Chesterton Project) Series A 144A | | | | | | | | |
6.375% 1/15/51 # | | | 1,000,000 | | | | 1,044,990 | |
Cobb County, Georgia Development Authority | | | | | | | | |
(Provident Village at Creekside Project) Series A 144A | | | | | | | | |
6.00% 7/1/51 # | | | 3,500,000 | | | | 3,117,030 | |
Colorado Health Facilities Authority Revenue | | | | | | | | |
(American Baptist) 8.00% 8/1/43 | | | 2,500,000 | | | | 2,853,800 | |
(Mental Health Center Denver Project) Series A | | | | | | | | |
5.75% 2/1/44 | | | 500,000 | | | | 553,395 | |
(School Health Systems) Series A 5.00% 1/1/44 | | | 1,000,000 | | | | 1,086,380 | |
(Sunny Vista Living Center) | | | | | | | | |
Series A 144A 5.50% 12/1/30 # | | | 750,000 | | | | 780,330 | |
Series A 144A 5.75% 12/1/35 # | | | 1,150,000 | | | | 1,196,793 | |
Series A 144A 6.125% 12/1/45 # | | | 1,200,000 | | | | 1,266,132 | |
Series A 144A 6.25% 12/1/50 # | | | 560,000 | | | | 593,309 | |
Connecticut State Health & Educational Facilities Authority Revenue | | | | | | | | |
(Church Home of Hartford Project) | | | | | | | | |
Series A 144A 5.00% 9/1/46 # | | | 1,000,000 | | | | 1,042,090 | |
Series A 144A 5.00% 9/1/53 # | | | 1,500,000 | | | | 1,555,965 | |
Cumberland County, Pennsylvania Municipal Authority Revenue | | | | | | | | |
(Asbury Pennsylvania Obligation Group) 5.25% 1/1/41 | | | 1,600,000 | | | | 1,644,000 | |
(Diakon Lutheran Ministries Series) 6.375% 1/1/39 | | | 100,000 | | | | 101,145 | |
Cuyahoga County, Ohio Hospital Revenue | | | | | | | | |
(The Metrohealth System) | | | | | | | | |
5.25% 2/15/47 | | | 5,200,000 | | | | 5,623,072 | |
5.50% 2/15/52 | | | 4,405,000 | | | | 4,838,011 | |
5.50% 2/15/57 | | | 7,250,000 | | | | 7,935,633 | |
64
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Decatur, Texas Hospital Authority | | | | | | | | |
(Wise Regional Health Systems) | | | | | | | | |
Series A 5.00% 9/1/34 | | | 1,000,000 | | | $ | 1,067,600 | |
Series A 5.25% 9/1/29 | | | 500,000 | | | | 547,185 | |
Series A 5.25% 9/1/44 | | | 2,000,000 | | | | 2,139,660 | |
Duluth, Minnesota Economic Development Authority Revenue | | | | | | | | |
(St. Luke’s Hospital Authority Obligation Group) | | | | | | | | |
5.75% 6/15/32 | | | 3,750,000 | | | | 4,069,425 | |
Florida Development Finance | | | | | | | | |
(Tuscan Isle Champions Gate Project) Series A 144A | | | | | | | | |
6.375% 6/1/46 # | | | 2,250,000 | | | | 2,035,553 | |
(UF Health - Jacksonville Project) Series A | | | | | | | | |
6.00% 2/1/33 | | | 2,375,000 | | | | 2,584,570 | |
Glendale, Arizona Industrial Development Authority Revenue | | | | | | | | |
(Glencroft Retirement Community Project) | | | | | | | | |
5.00% 11/15/36 | | | 830,000 | | | | 841,081 | |
5.25% 11/15/51 | | | 1,350,000 | | | | 1,371,451 | |
Guilderland, New York Industrial Development Agency | | | | | | | | |
Series A 144A 5.875% 1/1/52 # | | | 6,000,000 | | | | 5,943,060 | |
Hawaii State Department of Budget & Finance Special Purpose Senior Living Revenue | | | | | | | | |
(Hawaii Pacific Health Obligation) Series A | | | | | | | | |
5.50% 7/1/43 | | | 2,990,000 | | | | 3,323,146 | |
(Kahala Nui) 5.25% 11/15/37 | | | 1,000,000 | | | | 1,099,610 | |
Hospital Facilities Authority of Multnomah County, Oregon | | | | | | | | |
(Mirabella at South Waterfront) 5.50% 10/1/49 | | | 2,400,000 | | | | 2,565,624 | |
Idaho Health Facilities Authority Revenue | | | | | | | | |
(Valley Vista Care Corporation) Series A 5.00% 11/15/32 | | | 455,000 | | | | 474,733 | |
Illinois Finance Authority Revenue | | | | | | | | |
(Admiral at Lake Project) 5.25% 5/15/54 | | | 5,000,000 | | | | 4,991,600 | |
(Lutheran Home & Services) 5.75% 5/15/46 | | | 1,685,000 | | | | 1,766,942 | |
Illinois Housing Development Authority | | | | | | | | |
(Stonebridge of Gurnee Project) | | | | | | | | |
Series A 144A 5.45% 1/1/46 # | | | 2,500,000 | | | | 2,300,475 | |
Series A 144A 5.60% 1/1/56 # | | | 2,700,000 | | | | 2,494,503 | |
Indiana Finance Authority Revenue | | | | | | | | |
(King’s Daughters Hospital & Health) | | | | | | | | |
5.50% 8/15/40 | | | 1,000,000 | | | | 1,043,200 | |
5.50% 8/15/45 | | | 1,000,000 | | | | 1,039,550 | |
(Marquette Project) 5.00% 3/1/39 | | | 1,250,000 | | | | 1,298,987 | |
65
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Iowa Finance Authority | | | | | | | | |
(PHS Council Bluffs, Inc. Project) | | | | | | | | |
5.125% 8/1/48 | | | 1,650,000 | | | $ | 1,657,062 | |
5.25% 8/1/55 | | | 2,500,000 | | | | 2,509,925 | |
(Sunrise Retirement Community) 5.75% 9/1/43 | | | 2,500,000 | | | | 2,554,875 | |
Kalispell, Montana | | | | | | | | |
(Immanuel Lutheran Corporation Project) Series A | | | | | | | | |
5.25% 5/15/47 | | | 1,300,000 | | | | 1,358,955 | |
Kentucky Economic Development Finance Authority Healthcare Revenue | | | | | | | | |
(Owensboro Health) Series A 5.00% 6/1/45 | | | 1,250,000 | | | | 1,333,750 | |
(Rosedale Green Project) | | | | | | | | |
5.50% 11/15/35 | | | 1,310,000 | | | | 1,345,082 | |
5.75% 11/15/45 | | | 2,500,000 | | | | 2,592,050 | |
5.75% 11/15/50 | | | 1,600,000 | | | | 1,654,064 | |
Kentwood, Michigan Economic Development Corporation Revenue | | | | | | | | |
(Limited Obligation - Holland Home) 5.625% 11/15/41 | | | 1,250,000 | | | | 1,339,437 | |
Kirkwood, Missouri Industrial Development Authority | | | | | | | | |
(Aberdeen Heights) Series A 5.25% 5/15/50 | | | 6,000,000 | | | | 6,355,860 | |
Louisiana Public Facilities Authority Revenue | | | | | | | | |
(Ochsner Clinic Foundation Project) 5.00% 5/15/46 | | | 1,770,000 | | | | 1,943,796 | |
Lucas County, Ohio Health Care Facilities Revenue | | | | | | | | |
(Sunset Retirement Communities) 5.50% 8/15/30 | | | 1,000,000 | | | | 1,061,230 | |
Maine Health & Higher Educational Facilities Authority Revenue | | | | | | | | |
(Maine General Medical Center) 6.75% 7/1/41 | | | 1,700,000 | | | | 1,828,180 | |
Maricopa County, Arizona Industrial Development Authority | | | | | | | | |
(Christian Care Surprise, Inc. Project) Series 2016 144A | | | | | | | | |
6.00% 1/1/48 # | | | 5,400,000 | | | | 5,516,424 | |
Martin County, Florida Health Facilities Authority Revenue | | | | | | | | |
(Martin Memorial Medical Center) 5.50% 11/15/42 | | | 1,000,000 | | | | 1,076,830 | |
Maryland Health & Higher Educational Facilities Authority | | | | | | | | |
(Adventist Healthcare) Series A 5.50% 1/1/46 | | | 5,000,000 | | | | 5,563,600 | |
Miami-Dade County, Florida Health Facilities Authority Revenue | | | | | | | | |
(Nicklaus Children’s Hospital Project) 5.00% 8/1/47 | | | 2,350,000 | | | | 2,600,581 | |
Michigan State Strategic Fund Limited Revenue | | | | | | | | |
(Evangelical Homes) 5.50% 6/1/47 | | | 2,750,000 | | | | 2,851,117 | |
Missouri State Health & Educational Facilities Authority Revenue | | | | | | | | |
(Lutheran Senior Services) 6.00% 2/1/41 | | | 1,000,000 | | | | 1,065,970 | |
66
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Montgomery County, Pennsylvania Industrial Development Authority Revenue | | | | | | | | |
(Whitemarsh Continuing Care) | | | | | | | | |
5.25% 1/1/40 | | | 1,550,000 | | | $ | 1,561,485 | |
5.375% 1/1/50 | | | 6,250,000 | | | | 6,321,250 | |
Moon, Pennsylvania Industrial Development Authority | | | | | | | | |
(Baptist Homes Society Obligation) 6.125% 7/1/50 | | | 8,500,000 | | | | 9,107,155 | |
New Hampshire Health & Education Facilities Authority | | | | | | | | |
(Rivermeade) Series A 6.875% 7/1/41 | | | 1,380,000 | | | | 1,487,088 | |
New Hope, Texas Cultural Education Facilities Finance | | | | | | | | |
(Cardinal Bay - Village on the Park) | | | | | | | | |
Series A1 4.00% 7/1/36 | | | 635,000 | | | | 643,928 | |
Series A1 5.00% 7/1/46 | | | 1,395,000 | | | | 1,511,217 | |
Series A1 5.00% 7/1/51 | | | 1,595,000 | | | | 1,722,265 | |
Series B 4.00% 7/1/31 | | | 635,000 | | | | 643,496 | |
Series B 4.25% 7/1/36 | | | 955,000 | | | | 974,071 | |
Series B 4.75% 7/1/51 | | | 1,915,000 | | | | 1,988,383 | |
Series B 5.00% 7/1/46 | | | 1,595,000 | | | | 1,687,957 | |
Series C 5.00% 7/1/31 | | | 250,000 | | | | 268,373 | |
Series C 5.25% 7/1/36 | | | 350,000 | | | | 375,231 | |
Series C 5.50% 7/1/46 | | | 1,250,000 | | | | 1,352,113 | |
Series C 5.75% 7/1/51 | | | 1,000,000 | | | | 1,091,220 | |
Series D 6.00% 7/1/26 | | | 135,000 | | | | 136,370 | |
Series D 7.00% 7/1/51 | | | 1,350,000 | | | | 1,400,719 | |
(Legacy Midtown Park Project) Series A 5.50% 7/1/54 | | | 2,500,000 | | | | 2,484,275 | |
New Jersey Economic Development Authority | | | | | | | | |
(Lions Gate Project) 5.25% 1/1/44 | | | 2,000,000 | | | | 2,075,920 | |
New Jersey Health Care Facilities Financing Authority Revenue | | | | | | | | |
(Barnabas Health Services) Series A 4.00% 7/1/26 | | | 980,000 | | | | 1,034,341 | |
(Princeton Healthcare System) 5.00% 7/1/39 | | | 2,500,000 | | | | 2,844,325 | |
(St. Peters University Hospital) 6.25% 7/1/35 | | | 2,700,000 | | | | 2,879,739 | |
(University Hospital) Series A 5.00% 7/1/46 (AGM) | | | 5,000,000 | | | | 5,480,050 | |
New York State Dormitory Authority | | | | | | | | |
(Orange Regional Medical Center) | | | | | | | | |
144A 5.00% 12/1/40 # | | | 1,100,000 | | | | 1,191,366 | |
144A 5.00% 12/1/45 # | | | 800,000 | | | | 863,960 | |
North Carolina Medical Care Commission Health Care Facilities Revenue | | | | | | | | |
(First Mortgage - Galloway Ridge Project) 6.00% 1/1/39 | | | 1,520,000 | | | | 1,575,997 | |
67
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Northampton County, Pennsylvania Industrial Development Authority Revenue | | | | | | | | |
(Morningstar Senior Living) 5.00% 7/1/36 | | | 2,000,000 | | | $ | 2,040,260 | |
Oklahoma Development Finance Authority Health System Revenue | | | | | | | | |
(OU Medicine Project) Series 2018B 5.50% 8/15/57 | | | 4,255,000 | | | | 4,822,915 | |
Orange County, New York Funding Corporation Assisted Living Residence Revenue | | | | | | | | |
6.50% 1/1/46 | | | 3,900,000 | | | | 3,984,747 | |
Palm Beach County, Florida Health Facilities Authority | | | | | | | | |
(Sinai Residences Boca Raton Project) | | | | | | | | |
Series A 7.25% 6/1/34 | | | 285,000 | | | | 324,866 | |
Series A 7.50% 6/1/49 | | | 2,920,000 | | | | 3,349,269 | |
Palomar, California Health | | | | | | | | |
Series 2016 5.00% 11/1/39 | | | 1,670,000 | | | | 1,804,468 | |
Payne County, Oklahoma Economic Development Authority | | | | | | | | |
(Epworth Living at the Ranch) Series A 7.00% 11/1/51 ‡ | | | 1,445,000 | | | | 722,500 | |
Pennsylvania Economic Development Financing Authority | | | | | | | | |
(Tapestry Moon Senior Housing Project) Series 2018A | | | | | | | | |
144A 6.75% 12/1/53 # | | | 8,400,000 | | | | 8,693,748 | |
Prince George’s County, Maryland | | | | | | | | |
(Collington Episcopal Life Care Community) | | | | | | | | |
5.00% 4/1/31 | | | 1,030,000 | | | | 1,092,583 | |
5.25% 4/1/47 | | | 2,000,000 | | | | 2,127,580 | |
Public Finance Authority, Wisconsin | | | | | | | | |
(Bancroft Neurohealth Project) | | | | | | | | |
Series A 144A 4.625% 6/1/36 # | | | 235,000 | | | | 231,212 | |
Series A 144A 5.00% 6/1/36 # | | | 960,000 | | | | 980,938 | |
Series A 144A 5.125% 6/1/48 # | | | 1,375,000 | | | | 1,407,065 | |
(Maryland Proton Treatment Centre) Series A1 144A | | | | | | | | |
6.375% 1/1/48 # | | | 2,500,000 | | | | 2,537,425 | |
(Mary’s Woods at Marylhurst Project) 144A | | | | | | | | |
5.25% 5/15/52 # | | | 2,300,000 | | | | 2,491,222 | |
Puerto Rico Industrial Tourist Educational Medical & Environmental Control Facilities Financing Authority | | | | | | | | |
(Auxilio Mutuo) Series A 6.00% 7/1/33 | | | 5,630,000 | | | | 5,855,594 | |
Rochester, Minnesota | | | | | | | | |
(The Homestead at Rochester) Series A 6.875% 12/1/48 | | | 2,500,000 | | | | 2,832,700 | |
Salem, Oregon Hospital Facility Authority Revenue | | | | | | | | |
(Capital Manor) 6.00% 5/15/47 | | | 1,500,000 | | | | 1,616,940 | |
San Buenaventura, California Revenue | | | | | | | | |
(Community Memorial Health System) 7.50% 12/1/41 | | | 4,475,000 | | | | 4,968,995 | |
68
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Southeastern Ohio Port Authority | | | | | | | | |
(Memorial Health Systems) | | | | | | | | |
5.00% 12/1/43 | | | 805,000 | | | $ | 830,164 | |
5.50% 12/1/43 | | | 1,250,000 | | | | 1,334,750 | |
St. Louis County, Missouri Industrial Development Authority | | | | | | | | |
(Nazareth Living Center Project) | | | | | | | | |
Series A 5.00% 8/15/35 | | | 600,000 | | | | 622,782 | |
Series A 5.125% 8/15/45 | | | 1,800,000 | | | | 1,867,500 | |
Suffolk County, New York Economic Development Corporation Revenue | | | | | | | | |
(Peconic Landing Southland) 6.00% 12/1/40 | | | 575,000 | | | | 613,985 | |
Tarrant County, Texas Cultural Education Facilities Finance | | | | | | | | |
(Buckingham Senior Living Community) 5.50% 11/15/45 | | | 3,000,000 | | | | 2,600,400 | |
(Buckner Senior Living - Ventana Project) | | | | | | | | |
6.75% 11/15/47 | | | 1,850,000 | | | | 2,056,553 | |
6.75% 11/15/52 | | | 3,300,000 | | | | 3,656,235 | |
Tempe, Arizona Industrial Development Authority Revenue | | | | | | | | |
(Friendship Village) Series A 6.25% 12/1/46 | | | 500,000 | | | | 534,135 | |
(Mirabella At ASU Project) Series A 144A | | | | | | | | |
6.125% 10/1/52 # | | | 1,720,000 | | | | 1,896,592 | |
University of Colorado Hospital Authority Revenue | | | | | | | | |
(UCHA Obligation Group) 5.00% 11/15/38 • | | | 3,000,000 | | | | 3,243,510 | |
Vermont Economic Development Authority Revenue | | | | | | | | |
(Wake Robin Corp. Project) 5.40% 5/1/33 | | | 1,100,000 | | | | 1,162,942 | |
Washington State Housing Finance Commission | | | | | | | | |
(Bayview Manor Homes) | | | | | | | | |
Series A 144A 5.00% 7/1/36 # | | | 700,000 | | | | 730,324 | |
Series A 144A 5.00% 7/1/46 # | | | 1,450,000 | | | | 1,501,141 | |
Series A 144A 5.00% 7/1/51 # | | | 2,000,000 | | | | 2,063,860 | |
(Heron’s Key) Series A 144A 7.00% 7/1/50 # | | | 2,000,000 | | | | 2,163,800 | |
(Wesley Homes at Lea Hill Project) | | | | | | | | |
Series 2016 144A 5.00% 7/1/46 # | | | 1,000,000 | | | | 1,033,270 | |
Series 2016 144A 5.00% 7/1/51 # | | | 2,000,000 | | | | 2,059,880 | |
Wayzata, Minnesota Senior Housing Revenue | | | | | | | | |
(Folkestone Senior Living Community) | | | | | | | | |
Series A 5.50% 11/1/32 | | | 270,000 | | | | 279,021 | |
Series A 5.75% 11/1/39 | | | 600,000 | | | | 620,454 | |
Series A 6.00% 5/1/47 | | | 920,000 | | | | 952,283 | |
Westminster, Maryland | | | | | | | | |
(Lutheran Village Millers Grant) | | | | | | | | |
6.00% 7/1/34 | | | 800,000 | | | | 857,000 | |
69
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Westminster, Maryland | | | | | | | | |
(Lutheran Village Millers Grant) | | | | | | | | |
Series A 5.00% 7/1/24 | | | 1,700,000 | | | $ | 1,790,134 | |
Series A 6.125% 7/1/39 | | | 750,000 | | | | 806,595 | |
Series A 6.25% 7/1/44 | | | 2,500,000 | | | | 2,704,425 | |
Wichita, Kansas | | | | | | | | |
(Kansas Masonic Home) | | | | | | | | |
Series II-A 5.00% 12/1/31 | | | 500,000 | | | | 522,620 | |
Series II-A 5.25% 12/1/36 | | | 500,000 | | | | 525,895 | |
Series II-A 5.375% 12/1/46 | | | 1,200,000 | | | | 1,268,148 | |
Wisconsin Health & Educational Facilities Authority | | | | | | | | |
(Covenant Communities Project) | | | | | | | | |
Series A1 4.00% 7/1/48 | | | 1,510,000 | | | | 1,484,073 | |
Series B 5.00% 7/1/48 | | | 1,000,000 | | | | 1,028,610 | |
Series C 7.00% 7/1/43 | | | 900,000 | | | | 892,548 | |
Series C 7.50% 7/1/53 | | | 1,000,000 | | | | 1,000,830 | |
Wisconsin Public Finance Authority | | | | | | | | |
(Rose Villa Project) Series A 144A 5.75% 11/15/44 # | | | 2,000,000 | | | | 2,145,980 | |
| | | | | | | | |
| | | | | | | 361,304,466 | |
| | | | | | | | |
Housing Revenue Bonds – 0.53% | | | | | | | | |
California Municipal Finance Authority Mobile Home Park Revenue | | | | | | | | |
(Caritas Affordable Housing) Senior Series A | | | | | | | | |
5.25% 8/15/39 | | | 1,200,000 | | | | 1,313,148 | |
(Caritas Projects) Senior Series A 5.50% 8/15/47 | | | 1,500,000 | | | | 1,614,795 | |
Independent Cities Finance Authority, California | | | | | | | | |
Series A 5.25% 5/15/44 | | | 750,000 | | | | 814,365 | |
Series A 5.25% 5/15/49 | | | 3,000,000 | | | | 3,249,450 | |
| | | | | | | | |
| | | | | | | 6,991,758 | |
| | | | | | | | |
Lease Revenue Bonds – 4.53% | | | | | | | | |
California Municipal Finance Authority Revenue | | | | | | | | |
(Goodwill Industry Sacramento Valley) 5.25% 1/1/45 | | | 1,295,000 | | | | 1,285,767 | |
(Goodwill Industry Sacramento Valley and Northern Nevada Project) | | | | | | | | |
Series A 144A 6.625% 1/1/32 # | | | 500,000 | | | | 532,565 | |
Series A 144A 6.875% 1/1/42 # | | | 1,500,000 | | | | 1,604,850 | |
California Statewide Communities Development Authority Revenue | | | | | | | | |
(Lancer Plaza Project) 5.875% 11/1/43 | | | 1,875,000 | | | | 2,101,144 | |
Capital Trust Agency, Florida Revenue | | | | | | | | |
(Air Cargo - Aero Miami) Series A 5.35% 7/1/29 | | | 765,000 | | | | 790,008 | |
70
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Lease Revenue Bonds (continued) | | | | | | | | |
Industrial Development Authority of Phoenix, Arizona | | | | | | | | |
5.125% 2/1/34 | | | 1,000,000 | | | $ | 933,730 | |
5.375% 2/1/41 | | | 1,500,000 | | | | 1,416,945 | |
Metropolitan Pier & Exposition Authority, Illinois | | | | | | | | |
(Mccormick Place Expansion Project) Series A | | | | | | | | |
5.00% 6/15/57 | | | 3,975,000 | | | | 4,242,199 | |
New Jersey Economic Development Authority Special Facility Revenue | | | | | | | | |
Series WW 5.25% 6/15/30 | | | 5,000,000 | | | | 5,533,150 | |
New Jersey Transportation Trust Fund Authority | | | | | | | | |
(Federal Highway Reimbursement Revenue) Series A | | | | | | | | |
5.00% 6/15/31 | | | 5,450,000 | | | | 6,037,347 | |
(Transportation Program) Series AA 5.00% 6/15/25 | | | 1,000,000 | | | | 1,115,300 | |
New York Liberty Development Revenue | | | | | | | | |
(Class 1-3 World Trade Center Project) 144A | | | | | | | | |
5.00% 11/15/44 # | | | 5,000,000 | | | | 5,263,250 | |
(Class 2-3 World Trade Center Project) 144A | | | | | | | | |
5.375% 11/15/40 # | | | 2,410,000 | | | | 2,656,832 | |
(Class 3-3 World Trade Center Project) 144A | | | | | | | | |
7.25% 11/15/44 # | | | 9,600,000 | | | | 11,382,912 | |
Public Finance Authority, Wisconsin Airport Facilities Revenue | | | | | | | | |
(AFCO Investors II Portfolio) 144A | | | | | | | | |
5.75% 10/1/31 (AMT)# | | | 3,775,000 | | | | 3,806,106 | |
(Senior Obligation Group) Series B 5.00% 7/1/42 (AMT) | | | 4,000,000 | | | | 4,220,040 | |
Virginia Public Building Authority | | | | | | | | |
Series B 5.00% 8/1/20 | | | 5,000,000 | | | | 5,306,050 | |
Wise County, Texas | | | | | | | | |
(Parker County Junior College District) 8.00% 8/15/34 | | | 1,000,000 | | | | 1,106,520 | |
| | | | | | | | |
| | | | | | | 59,334,715 | |
| | | | | | | | |
Local General Obligation Bonds – 3.60% | | | | | | | | |
Chicago, Illinois | | | | | | | | |
Series 2005D 5.50% 1/1/37 | | | 2,280,000 | | | | 2,444,251 | |
Series 2005D 5.50% 1/1/40 | | | 3,000,000 | | | | 3,207,510 | |
Series 2007E 5.50% 1/1/42 | | | 2,150,000 | | | | 2,296,265 | |
Series 2007F 5.50% 1/1/42 | | | 1,250,000 | | | | 1,335,037 | |
Series A 5.25% 1/1/29 | | | 4,415,000 | | | | 4,720,606 | |
Series A 5.50% 1/1/33 | | | 2,000,000 | | | | 2,162,520 | |
Series A 6.00% 1/1/38 | | | 6,285,000 | | | | 7,124,110 | |
Series C 5.00% 1/1/26 | | | 2,105,000 | | | | 2,297,355 | |
Series C 5.00% 1/1/38 | | | 1,000,000 | | | | 1,046,070 | |
Chicago, Illinois Board of Education | | | | | | | | |
Series A 144A 7.00% 12/1/46 # | | | 2,500,000 | | | | 2,990,975 | |
71
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Local General Obligation Bonds (continued) | | | | | | | | |
Chicago, Illinois Board of Education | | | | | | | | |
Series G 5.00% 12/1/44 | | | 2,445,000 | | | $ | 2,510,355 | |
Series H 5.00% 12/1/36 | | | 3,405,000 | | | | 3,524,481 | |
Series H 5.00% 12/1/46 | | | 4,225,000 | | | | 4,331,555 | |
New York City, New York | | | | | | | | |
Series E 5.00% 8/1/20 | | | 3,615,000 | | | | 3,830,671 | |
Raleigh, North Carolina | | | | | | | | |
Series A 5.00% 9/1/22 | | | 3,000,000 | | | | 3,353,190 | |
| | | | | | | | |
| | | | | | | 47,174,951 | |
| | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds – 6.78% | | | | | | | | |
Bexar County, Texas Health Facilities Development | | | | | | | | |
(Army Retirement Residence Foundation Project) Series 2010 5.875% 7/1/30-20§ | | | 845,000 | | | | 904,851 | |
Bowling Green, Ohio Student Housing Revenue CFP I | | | | | | | | |
(State University Project) 6.00% 6/1/45-20§ | | | 1,215,000 | | | | 1,303,452 | |
Brevard County, Florida Health Facilities Authority Revenue | | | | | | | | |
(Health First Inc. Project) 7.00% 4/1/39-19§ | | | 1,000,000 | | | | 1,030,970 | |
Brooklyn Arena Local Development, New York Pilot Revenue | | | | | | | | |
(Barclays Center Project) | | | | | | | | |
6.25% 7/15/40-20§ | | | 5,500,000 | | | | 5,845,950 | |
6.50% 7/15/30-20§ | | | 1,175,000 | | | | 1,252,844 | |
Butler County, Pennsylvania Hospital Authority Revenue | | | | | | | | |
(Butler Health System Project) 7.125% 7/1/29-19§ | | | 900,000 | | | | 939,663 | |
California Municipal Finance Authority Mobile Home Park Revenue | | | | | | | | |
(Caritas Projects) Senior Series A 6.40% 8/15/45-20§ | | | 1,690,000 | | | | 1,826,079 | |
California Municipal Finance Authority Revenue | | | | | | | | |
(Azusa Pacific University Project) Series B | | | | | | | | |
7.75% 4/1/31-21§ | | | 750,000 | | | | 844,193 | |
(Eisenhower Medical Center) Series A 5.75% 7/1/40-20§ | | | 1,000,000 | | | | 1,074,020 | |
California Statewide Communities Development Authority Revenue | | | | | | | | |
(California Baptist University Project) 7.50% 11/1/41-21§ | | | 1,000,000 | | | | 1,177,430 | |
Central Texas Regional Mobility Authority Revenue | | | | | | | | |
Senior Lien 6.00% 1/1/41-21§ | | | 1,890,000 | | | | 2,063,351 | |
Subordinate Lien 6.75% 1/1/41-21§ | | | 1,000,000 | | | | 1,108,670 | |
Clifton, Texas Higher Education Finance Corporation Revenue | | | | | | | | |
(Idea Public Schools) 5.75% 8/15/41-21§ | | | 1,000,000 | | | | 1,104,280 | |
(Uplift Education) Series A 6.25% 12/1/45-20§ | | | 1,000,000 | | | | 1,095,100 | |
72
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds (continued) | | | | | | | | |
Cumberland County, Pennsylvania Municipal Authority Revenue | | | | | | | | |
(Diakon Lutheran Ministries Project) 6.375% 1/1/39-19§ | | | 900,000 | | | $ | 913,698 | |
District of Columbia Revenue | | | | | | | | |
(Center of Strategic & International Studies) | | | | | | | | |
6.625% 3/1/41-21§ | | | 2,235,000 | | | | 2,498,641 | |
(KIPP Charter School) 6.00% 7/1/48-23§ | | | 1,450,000 | | | | 1,708,738 | |
Hawaii Pacific Health Special Purpose Revenue | | | | | | | | |
Series A 5.50% 7/1/40-20§ | | | 1,250,000 | | | | 1,334,837 | |
Hawaii State Department of Budget & Finance Special Purpose Senior Living Revenue | | | | | | | | |
(15 Craigside Project) Series A 9.00% 11/15/44-19§ | | | 1,000,000 | | | | 1,085,410 | |
Illinois Finance Authority Revenue | | | | | | | | |
(Admiral at Lake Project) | | | | | | | | |
Series A 7.625% 5/15/25-20§ | | | 1,750,000 | | | | 1,918,683 | |
Series A 7.75% 5/15/30-20§ | | | 500,000 | | | | 549,230 | |
Series A 8.00% 5/15/40-20§ | | | 2,205,000 | | | | 2,428,146 | |
Series A 8.00% 5/15/46-20§ | | | 1,500,000 | | | | 1,651,800 | |
(Provena Health) | | | | | | | | |
Series A 7.75% 8/15/34-19§ | | | 20,000 | | | | 21,125 | |
Series A (Refunded) 7.75% 8/15/34-19§ | | | 980,000 | | | | 1,035,105 | |
(Silver Cross & Medical Centers) 7.00% 8/15/44-19§ | | | 3,570,000 | | | | 3,745,787 | |
Illinois Railsplitter Tobacco Settlement Authority | | | | | | | | |
5.50% 6/1/23-21§ | | | 2,010,000 | | | | 2,204,990 | |
6.00% 6/1/28-21§ | | | 1,455,000 | | | | 1,615,487 | |
Kentucky Economic Development Finance Authority Hospital Revenue | | | | | | | | |
(Owensboro Medical Health System) Series A | | | | | | | | |
6.50% 3/1/45-20§ | | | 4,965,000 | | | | 5,359,866 | |
Koyukuk, Alaska Revenue | | | | | | | | |
(Tanana Chiefs Conference Health Care Facility Project) | | | | | | | | |
7.75% 10/1/41-19§ | | | 1,750,000 | | | | 1,859,463 | |
Lancaster Redevelopment Agency, California | | | | | | | | |
(Redevelopment Project) 6.875% 8/1/39-19§ | | | 285,000 | | | | 298,774 | |
Unrefunded (Redevelopment Project) | | | | | | | | |
6.875% 8/1/39-19§ | | | 215,000 | | | | 225,391 | |
Louisiana Public Facilities Authority Revenue | | | | | | | | |
(Ochsner Clinic Foundation Project) 6.50% 5/15/37-21§ | | | 1,705,000 | | | | 1,906,173 | |
Lucas County, Ohio Improvement | | | | | | | | |
(Lutheran Homes) Series A 7.00% 11/1/45-20§ | | | 3,865,000 | | | | 4,273,183 | |
Maryland Health & Higher Educational Facilities Authority | | | | | | | | |
(Doctors Community Hospital) 5.75% 7/1/38-20§ | | | 1,730,000 | | | | 1,851,913 | |
73
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds (continued) | | | | | | | | |
Maryland State Economic Development Revenue | | | | | | | | |
(Transportation Facilities Project) Series A | | | | | | | | |
5.75% 6/1/35-20§ | | | 1,400,000 | | | $ | 1,497,202 | |
Massachusetts State Health & Educational Facilities Authority Revenue | | | | | | | | |
(Springfield College) 5.625% 10/15/40-19§ | | | 1,000,000 | | | | 1,043,230 | |
New Jersey Economic Development Authority Revenue | | | | | | | | |
(Provident Group - Montclair University Student Housing Project) 5.875% 6/1/42-20§ | | | 1,500,000 | | | | 1,607,340 | |
New Jersey State Educational Facilities Authority Revenue | | | | | | | | |
(University of Medicine & Dentistry) Series B | | | | | | | | |
7.50% 12/1/32-19§ | | | 1,000,000 | | | | 1,043,360 | |
New York State Dormitory Authority Revenue Non State Supported Debt | | | | | | | | |
(Orange Regional Medical Center) 6.25% 12/1/37-18§ | | | 3,500,000 | | | | 3,539,270 | |
Norco, California Redevelopment Agency Tax Allocation | | | | | | | | |
(Area #1 Project) 6.00% 3/1/36-20§ | | | 1,000,000 | | | | 1,066,620 | |
Onondaga, New York Civic Development Revenue | | | | | | | | |
(St. Joseph’s Hospital Health Center Project) | | | | | | | | |
4.50% 7/1/32-22§ | | | 1,000,000 | | | | 1,094,620 | |
Series A 5.125% 7/1/31-19§ | | | 1,000,000 | | | | 1,029,410 | |
Oregon State Facilities Authority Revenue | | | | | | | | |
(Concordia University Project) | | | | | | | | |
Series A 144A 6.125% 9/1/30-20#§ | | | 800,000 | | | | 854,960 | |
Series A 144A 6.375% 9/1/40-20#§ | | | 500,000 | | | | 543,775 | |
Pennsylvania Economic Development Financing Authority Health System Revenue | | | | | | | | |
(Albert Einstein Healthcare) Series A | | | | | | | | |
6.25% 10/15/23-19§ | | | 850,000 | | | | 882,487 | |
Pennsylvania State Higher Educational Facilities Authority Revenue | | | | | | | | |
(Edinboro University Foundation) 5.80% 7/1/30-20§ | | | 1,300,000 | | | | 1,391,559 | |
San Juan, Texas Higher Education Finance Authority Education Revenue | | | | | | | | |
(Idea Public Schools) Series A 6.70% 8/15/40-20§ | | | 2,000,000 | | | | 2,183,580 | |
South Carolina Jobs - Economic Development Authority Hospital Revenue | | | | | | | | |
(Palmetto Health) 5.75% 8/1/39-19§ | | | 915,000 | | | | 948,397 | |
Southwestern Illinois Development Authority Revenue | | | | | | | | |
(Memorial Group) | | | | | | | | |
7.125% 11/1/30-23§ | | | 1,420,000 | | | | 1,762,177 | |
7.125% 11/1/43-23§ | | | 2,500,000 | | | | 3,102,425 | |
74
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds (continued) | | | | | | | | |
St. Johns County, Florida Industrial Development Authority Revenue | | | | | | | | |
(Presbyterian Retirement) Series A 5.875% 8/1/40-20§ | | | 1,000,000 | | | $ | 1,075,590 | |
Travis County, Texas Health Facilities Development Corporation Revenue | | | | | | | | |
(Westminster Manor Project) 7.125% 11/1/40-20§ | | | 1,000,000 | | | | 1,110,480 | |
University of Arizona Medical Center Hospital Revenue | | | | | | | | |
6.00% 7/1/39-21§ | | | 1,500,000 | | | | 1,665,540 | |
Washington State Health Care Facilities Authority Revenue | | | | | | | | |
(Multicare Health System) Series B | | | | | | | | |
6.00% 8/15/39-19 (AGC)§ | | | 1,250,000 | | | | 1,299,887 | |
| | | | | | | | |
| | | | | | | 88,799,202 | |
| | | | | | | | |
Resource Recovery Revenue Bonds – 1.35% | | | | | | | | |
Blythe Township, Pennsylvania Solid Waste Authority Revenue | | | | | | | | |
7.75% 12/1/37 (AMT) | | | 3,000,000 | | | | 3,154,860 | |
California Pollution Control Financing Authority Revenue | | | | | | | | |
(Calplant I Project) 144A 8.00% 7/1/39 (AMT)# | | | 5,250,000 | | | | 5,665,695 | |
Essex County, New Jersey Improvement Authority | | | | | | | | |
144A 5.25% 7/1/45 (AMT)# | | | 2,500,000 | | | | 2,524,875 | |
Mission, Texas Economic Development Corporation Revenue | | | | | | | | |
(Dallas Clean Energy McCommas) | | | | | | | | |
6.875% 12/1/24 (AMT) | | | 945,000 | | | | 945,841 | |
Niagara, New York Area Development Corporation Revenue | | | | | | | | |
(Covanta Project) Series A 144A 4.75% 11/1/42 (AMT)# | | | 3,500,000 | | | | 3,517,535 | |
Orange County, Florida Industrial Development Authority | | | | | | | | |
(Vitag Florida LLC Project) 144A 8.00% 7/1/36 (AMT)#‡ | | | 3,250,000 | | | | 1,885,195 | |
| | | | | | | | |
| | | | | | | 17,694,001 | |
| | | | | | | | |
Special Tax Revenue Bonds – 6.90% | | | | | | | | |
Allentown, Pennsylvania Neighborhood Improvement Zone Development Authority Tax Revenue | | | | | | | | |
(City Center Project) | | | | | | | | |
144A 5.00% 5/1/32 # | | | 2,500,000 | | | | 2,742,600 | |
144A 5.00% 5/1/42 # | | | 2,000,000 | | | | 2,155,620 | |
Babcock Ranch, Florida Community Independent Special District | | | | | | | | |
5.00% 11/1/31 | | | 615,000 | | | | 626,064 | |
5.25% 11/1/46 | | | 500,000 | | | | 506,505 | |
Canyons, Colorado Metropolitan District No. 5 | | | | | | | | |
Series A 6.125% 12/1/47 | | | 1,000,000 | | | | 1,020,660 | |
75
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Special Tax Revenue Bonds (continued) | | | | | | | | |
Celebration Pointe, Florida Community Development District | | | | | | | | |
5.125% 5/1/45 | | | 2,000,000 | | | $ | 2,034,700 | |
Cherry Hill, Virginia Community Development Authority | | | | | | | | |
(Potomac Shores Project) | | | | | | | | |
144A 5.15% 3/1/35 # | | | 1,000,000 | | | | 1,025,470 | |
144A 5.40% 3/1/45 # | | | 2,000,000 | | | | 2,052,760 | |
Colliers Hill, Colorado Metropolitan District No. 2 | | | | | | | | |
Series A 6.50% 12/1/47 | | | 2,000,000 | | | | 2,026,200 | |
Conley Road Transportation Development District, Missouri | | | | | | | | |
5.375% 5/1/47 | | | 5,200,000 | | | | 5,300,048 | |
Dutchess County, New York Local Development Corporation Revenue | | | | | | | | |
(Anderson Center Services Inc. Project) 6.00% 10/1/30 | | | 1,700,000 | | | | 1,747,821 | |
Fountain Urban Renewal Authority, Colorado | | | | | | | | |
(Improvement - South Academy Highland) Series A | | | | | | | | |
5.50% 11/1/44 | | | 4,820,000 | | | | 4,948,549 | |
Glen Cove, New York Local Economic Assistance | | | | | | | | |
(Garvies Point Public Improvement Project) Series A | | | | | | | | |
5.00% 1/1/56 | | | 2,000,000 | | | | 2,077,100 | |
Juban Crossing Economic Development District, Louisiana | | | | | | | | |
(General Infrastructure Projects) 144A 7.00% 9/15/44 # | | | 3,490,000 | | | | 3,614,139 | |
(Road Projects) Series A 144A 7.00% 9/15/44 # | | | 2,195,000 | | | | 2,272,593 | |
Kansas City, Missouri Land Clearance Redevelopment Authority Revenue | | | | | | | | |
(Convention Centre Hotel Project - TIF Financing) | | | | | | | | |
Series B 144A 5.00% 2/1/40 # | | | 935,000 | | | | 971,615 | |
Series B 144A 5.00% 2/1/50 # | | | 1,825,000 | | | | 1,864,712 | |
Memphis-Shelby County Industrial Development Board, Tennessee | | | | | | | | |
(Graceland Project) | | | | | | | | |
Series A 5.50% 7/1/37 | | | 650,000 | | | | 699,309 | |
Series A 5.625% 1/1/46 | | | 750,000 | | | | 799,575 | |
Midtown Miami, Florida Community Development District | | | | | | | | |
(Parking Garage Project) Series A 5.00% 5/1/37 | | | 1,235,000 | | | | 1,298,714 | |
Mobile, Alabama Improvement District | | | | | | | | |
(McGowin Park Project) | | | | | | | | |
Series A 5.25% 8/1/30 | | | 1,000,000 | | | | 1,024,640 | |
Series A 5.50% 8/1/35 | | | 1,300,000 | | | | 1,330,537 | |
Mosaic District, Virginia Community Development Authority Revenue | | | | | | | | |
Series A 6.875% 3/1/36 | | | 1,500,000 | | | | 1,620,780 | |
76
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Special Tax Revenue Bonds (continued) | | | | | | | | |
Nampa Development Corporation, Idaho Revenue | | | | | | | | |
144A 5.00% 9/1/31 # | | | 2,940,000 | | | $ | 3,063,215 | |
5.90% 3/1/30 | | | 2,000,000 | | | | 2,044,500 | |
New Jersey Transportation Trust Fund Authority | | | | | | | | |
(Transportation Program) | | | | | | | | |
Series AA 5.00% 6/15/44 | | | 4,975,000 | | | | 5,244,844 | |
Series AA 5.25% 6/15/41 | | | 1,000,000 | | | | 1,080,900 | |
New York City, New York Industrial Development Agency | | | | | | | | |
(Pilot - Queens Baseball Stadium) | | | | | | | | |
5.00% 1/1/22 (AMBAC) | | | 1,000,000 | | | | 1,002,580 | |
(Yankee Stadium) 7.00% 3/1/49 (AGC) | | | 1,000,000 | | | | 1,025,290 | |
Northampton County, Pennsylvania Industrial Development Authority | | | | | | | | |
(Route 33 Project) 7.00% 7/1/32 | | | 2,435,000 | | | | 2,766,014 | |
Prairie Center Metropolitan District No 3, Colorado | | | | | | | | |
Series A 144A 5.00% 12/15/41 # | | | 2,000,000 | | | | 2,047,500 | |
Public Finance Authority Revenue, Wisconsin | | | | | | | | |
(American Dream @ Meadowlands Project) 144A | | | | | | | | |
7.00% 12/1/50 # | | | 5,065,000 | | | | 5,863,598 | |
(Goodwill Industries of Southern Nevada Project) | | | | | | | | |
Series A 5.50% 12/1/35 ‡ | | | 2,500,000 | | | | 1,750,000 | |
Series A 5.75% 12/1/45 ‡ | | | 2,500,000 | | | | 1,750,000 | |
Regional Transportation, Colorado District Revenue | | | | | | | | |
(Denver Transit Partners) 6.00% 1/15/41 | | | 1,000,000 | | | | 1,044,620 | |
Richmond Heights, Missouri Tax Increment & Transaction Sales Tax Revenue Improvement | | | | | | | | |
(Francis Place Redevelopment Project) 5.625% 11/1/25 | | | 1,200,000 | | | | 1,200,192 | |
Southglenn, Colorado Metropolitan District | | | | | | | | |
Series 2016 5.00% 12/1/30 | | | 1,535,000 | | | | 1,591,427 | |
Series 2016 5.00% 12/1/36 | | | 810,000 | | | | 828,662 | |
Series 2016 5.00% 12/1/46 | | | 2,100,000 | | | | 2,134,692 | |
St. Joseph, Missouri Industrial Development Authority Tax Increment Revenue | | | | | | | | |
(Shoppes at North Village Project) | | | | | | | | |
Series A 5.375% 11/1/24 | | | 1,000,000 | | | | 999,990 | |
Series A 5.50% 11/1/27 | | | 500,000 | | | | 499,995 | |
St. Louis County, Missouri Industrial Development Authority | | | | | | | | |
(Manchester Ballas Community) | | | | | | | | |
Series A 144A 5.00% 9/1/38 # | | | 1,050,000 | | | | 1,039,941 | |
Series A 144A 5.25% 9/1/45 # | | | 3,540,000 | | | | 3,489,732 | |
77
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Special Tax Revenue Bonds (continued) | | | | | | | | |
St. Louis, Missouri Industrial Development Authority Tax Increment Revenue Improvement | | | | | | | | |
(Grand Center Redevelopment Project) 6.375% 12/1/25 | | | 1,105,000 | | | $ | 1,115,652 | |
Wyandotte County, Kansas City, Kansas Unified Government Special Obligation Revenue | | | | | | | | |
(Sales Tax Vacation Village Project) | | | | | | | | |
Series A 6.00% 9/1/35 | | | 4,690,000 | | | | 5,026,554 | |
| | | | | | | | |
| | | | | | | 90,370,609 | |
| | | | | | | | |
State General Obligation Bonds – 2.84% | | | | | | | | |
California State | | | | | | | | |
5.00% 8/1/46 | | | 2,000,000 | | | | 2,285,660 | |
(Bid Group C) Series B 5.00% 8/1/27 | | | 5,000,000 | | | | 5,962,700 | |
(Various Purposes) 5.00% 10/1/47 | | | 2,500,000 | | | | 2,841,825 | |
Illinois State | | | | | | | | |
5.00% 5/1/36 | | | 1,710,000 | | | | 1,766,823 | |
5.00% 11/1/36 | | | 2,245,000 | | | | 2,344,162 | |
5.00% 2/1/39 | | | 2,980,000 | | | | 3,063,619 | |
Series A 5.00% 12/1/34 | | | 2,100,000 | | | | 2,209,326 | |
Series A 5.00% 4/1/38 | | | 2,805,000 | | | | 2,893,862 | |
Series D 5.00% 11/1/28 | | | 11,000,000 | | | | 11,705,540 | |
New York State | | | | | | | | |
Series A 5.25% 2/15/24 | | | 2,000,000 | | | | 2,166,760 | |
| | | | | | | | |
| | | | | | | 37,240,277 | |
| | | | | | | | |
Transportation Revenue Bonds – 6.78% | | | | | | | | |
California Municipal Finance Authority | | | | | | | | |
(LINXS APM Project) Series A 5.00% 12/31/47 (AMT) | | | 7,895,000 | | | | 8,802,056 | |
Chicago, Illinois O’Hare International Airport Revenue | | | | | | | | |
Series B 5.00% 1/1/33 | | | 4,135,000 | | | | 4,567,769 | |
Delaware Transportation Authority | | | | | | | | |
5.00% 6/1/55 | | | 4,105,000 | | | | 4,505,155 | |
Foothill-Eastern Transportation Corridor Agency, California | | | | | | | | |
Series A 5.75% 1/15/46 | | | 5,000,000 | | | | 5,694,650 | |
Series A 6.00% 1/15/49 | | | 7,690,000 | | | | 8,944,239 | |
Hawaii Airports System Revenue | | | | | | | | |
Series A 5.00% 7/1/45 (AMT) | | | 3,490,000 | | | | 3,845,142 | |
Houston, Texas Airport System Revenue Subordinate Lien | | | | | | | | |
Series A 5.00% 7/1/25 (AMT) | | | 1,000,000 | | | | 1,075,040 | |
Kentucky Public Transportation Infrastructure Authority | | | | | | | | |
(1st Tier - Downtown Crossing) | | | | | | | | |
Series A 5.75% 7/1/49 | | | 3,000,000 | | | | 3,271,920 | |
Series A 6.00% 7/1/53 | | | 1,290,000 | | | | 1,422,560 | |
78
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Transportation Revenue Bonds (continued) | | | | | | | | |
Long Beach, California Marina Revenue | | | | | | | | |
5.00% 5/15/40 | | | 1,000,000 | | | $ | 1,099,090 | |
Los Angeles, California Department of Airports | | | | | | | | |
Series D 5.00% 5/15/41 (AMT) | | | 5,000,000 | | | | 5,602,200 | |
Metropolitan New York Transportation Authority | | | | | | | | |
(Green Bond) Series A1 5.25% 11/15/56 | | | 5,000,000 | | | | 5,614,200 | |
Port Authority of New York & New Jersey Special Project | | | | | | | | |
(JFK International Air Terminal) Series 8 6.00% 12/1/42 | | | 1,970,000 | | | | 2,145,704 | |
Riverside County, California Transportation Senior Lien | | | | | | | | |
Series A 5.75% 6/1/48 | | | 1,000,000 | | | | 1,106,150 | |
South Jersey Port, New Jersey | | | | | | | | |
(Subordinated Marine Terminal Revenue) | | | | | | | | |
Series A 5.00% 1/1/49 | | | 1,110,000 | | | | 1,217,337 | |
Series B 5.00% 1/1/42 (AMT) | | | 1,110,000 | | | | 1,206,415 | |
Series B 5.00% 1/1/48 (AMT) | | | 2,535,000 | | | | 2,742,819 | |
St. Louis, Missouri Airport Revenue | | | | | | | | |
(Lambert-St. Louis International) Series A-1 | | | | | | | | |
6.625% 7/1/34 | | | 1,090,000 | | | | 1,131,137 | |
Texas Private Activity Bond Surface Transportation Corporate Senior Lien | | | | | | | | |
(Blueridge Transportation) | | | | | | | | |
5.00% 12/31/45 (AMT) | | | 1,270,000 | | | | 1,370,762 | |
5.00% 12/31/50 (AMT) | | | 1,910,000 | | | | 2,053,938 | |
5.00% 12/31/55 (AMT) | | | 1,840,000 | | | | 1,975,019 | |
(LBJ Infrastructure) | | | | | | | | |
7.00% 6/30/40 | | | 7,000,000 | | | | 7,560,420 | |
7.50% 6/30/33 | | | 500,000 | | | | 545,860 | |
(NTE Mobility) | | | | | | | | |
6.75% 6/30/43 (AMT) | | | 1,905,000 | | | | 2,215,496 | |
6.875% 12/31/39 | | | 4,055,000 | | | | 4,290,677 | |
7.00% 12/31/38 (AMT) | | | 1,335,000 | | | | 1,573,938 | |
Virginia Small Business Financing Authority | | | | | | | | |
(Transform 66 P3 Project) 5.00% 12/31/56 (AMT) | | | 2,975,000 | | | | 3,230,969 | |
| | | | | | | | |
| | | | | | | 88,810,662 | |
| | | | | | | | |
Water & Sewer Revenue Bonds – 2.81% | | | | | | | | |
Charlotte County, Florida Industrial Development Authority | | | | | | | | |
(Town & Country Utilities Project) 144A | | | | | | | | |
5.50% 10/1/36 (AMT)# | | | 500,000 | | | | 487,685 | |
Chicago, Illinois Waterworks Revenue | | | | | | | | |
(2nd Lien) | | | | | | | | |
5.00% 11/1/26 | | | 180,000 | | | | 205,168 | |
5.00% 11/1/28 | | | 30,000 | | | | 33,871 | |
79
Schedules of investments
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Water & Sewer Revenue Bonds (continued) | | | | | | | | |
Dominion, Colorado Water & Sanitation District Revenue | | | | | | | | |
6.00% 12/1/46 | | | 4,000,000 | | | $ | 4,245,400 | |
Jefferson County, Alabama Sewer Revenue | | | | | | | | |
(Senior Lien-Warrants) Series A 5.50% 10/1/53 (AGM) | | | 2,500,000 | | | | 2,776,100 | |
(Sub Lien-Warrants) | | | | | | | | |
Series D 6.50% 10/1/53 | | | 16,500,000 | | | | 19,499,370 | |
Series D 7.00% 10/1/51 | | | 5,000,000 | | | | 6,029,500 | |
New York City, New York Water & Sewer System | | | | | | | | |
(Second Generation Resolution) 5.00% 6/15/46 | | | 3,150,000 | | | | 3,525,449 | |
| | | | | | | | |
| | | | | | | 36,802,543 | |
| | | | | | | | |
Total Municipal Bonds (cost $1,235,361,435) | | | | | | | 1,298,187,672 | |
| | | | | | | | |
| | | | | | | | |
Short-Term Investment – 0.09% | | | | | | | | |
Variable Rate Demand Note – 0.09%¤ | | | | | | | | |
Mississippi Business Finance Corporation Revenue | | | | | | | | |
(Chevron USA) Series A | | | | | | | | |
1.54% 11/1/35 | | | 1,100,000 | | | | 1,100,000 | |
| | | | | | | | |
Total Short-Term Investment (cost $1,100,000) | | | | | | | 1,100,000 | |
| | | | | | | | |
| | |
Total Value of Securities – 99.20%
(cost $1,236,461,435) | | | | | | $ | 1,299,287,672 | |
| | | | | | | | |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At Aug. 31, 2018, the aggregate value of Rule 144A securities was $249,568,591, which represents 19.05% of the Fund’s net assets. See Note 9 in “Notes to financial statements.” |
| ¤ | Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of Aug. 31, 2018. |
| § | Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 9 in “Notes to financial statements.” |
| ° | Principal amount shown is stated in US Dollars unless noted that the security is denominated in another currency. |
| ‡ | Non-income producing security. Security is currently in default. |
| • | Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at Aug. 31, 2018. For securities based on a published reference rate and spread, the reference rate and spread are indicated in their description above. The reference rate descriptions (i.e. LIBOR03M, LIBOR06M, etc.) used in this report are identical for different securities, but the underlying reference |
80
| | rates may differ due to the timing of the reset period. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their description above. |
| ^ | Zero coupon security. The rate shown is the effective yield at the time of purchase. |
Summary of abbreviations:
AGC – Insured by Assured Guaranty Corporation
AGM – Insured by Assured Guaranty Municipal Corporation
AMBAC – Insured by the AMBAC Assurance Corporation
AMT – Subject to Alternative Minimum Tax
ICE – Intercontinental Exchange
LIBOR – London Interbank Offered Rate
LIBOR03M – ICE LIBOR USD 3 Month
LIBOR06M – ICE LIBOR USD 6 Month
SGI – Insured by Syncora Guarantee Inc.
USD – US Dollar
See accompanying notes, which are an integral part of the financial statements.
81
Statements of assets and liabilities
August 31, 2018
| | | | | | | | | | | | | | | |
| | | Delaware
Tax-Free
USA Fund | | Delaware
Tax-Free USA
Intermediate Fund | | Delaware
National High-Yield
Municipal Bond Fund |
| | | |
Assets: | | | | | | | | | | | | | | | |
Investments, at value1 | | | $ | 577,255,646 | | | | $ | 543,598,379 | | | | $ | 1,299,287,672 | |
Cash | | | | 657,883 | | | | | 1,717,018 | | | | | — | |
Interest receivable | | | | 6,977,642 | | | | | 6,325,896 | | | | | 16,252,697 | |
Receivable for fund shares sold | | | | 404,163 | | | | | 384,818 | | | | | 1,764,905 | |
Receivable for securities sold | | | | — | | | | | — | | | | | 1,506,468 | |
| | | | | | | | | | | | | | | |
Total assets | | | | 585,295,334 | | | | | 552,026,111 | | | | | 1,318,811,742 | |
| | | | | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | | | | |
Cash due to custodian | | | | — | | | | | — | | | | | 65,518 | |
Payable for securities purchased | | | | 6,769,583 | | | | | 8,547,508 | | | | | 5,905,325 | |
Distribution payable | | | | 506,739 | | | | | 440,230 | | | | | 1,383,963 | |
Payable for fund shares redeemed | | | | 262,706 | | | | | 582,644 | | | | | 616,382 | |
Investment management fees payable to affiliates | | | | 179,406 | | | | | 170,775 | | | | | 545,123 | |
Other accrued expenses | | | | 117,138 | | | | | 123,432 | | | | | 318,951 | |
Distribution fees payable to affiliates | | | | 117,006 | | | | | 41,497 | | | | | 120,663 | |
Dividend disbursing and transfer agent fees and expense payable to affiliates | | | | 9,355 | | | | | 8,797 | | | | | 21,130 | |
Audit and tax fees payable | | | | 4,727 | | | | | 4,727 | | | | | 4,727 | |
Trustees’ fees and expenses payable | | | | 3,763 | | | | | 3,670 | | | | | 7,459 | |
Accounting and administration expenses payable to affiliates | | | | 2,168 | | | | | 2,059 | | | | | 4,468 | |
Legal fees payable to affiliates | | | | 951 | | | | | 896 | | | | | 2,133 | |
Reports and statements to shareholders expenses payable to affiliates | | | | 371 | | | | | 349 | | | | | 842 | |
| | | | | | | | | | | | | | | |
Total liabilities | | | | 7,973,913 | | | | | 9,926,584 | | | | | 8,996,684 | |
| | | | | | | | | | | | | | | |
Total Net Assets | | | $ | 577,321,421 | | | | $ | 542,099,527 | | | | $ | 1,309,815,058 | |
| | | | | | | | | | | | | | | |
| | | |
Net Assets Consist of: | | | | | | | | | | | | | | | |
Paid-in capital | | | $ | 551,453,633 | | | | $ | 525,834,776 | | | | $ | 1,262,146,546 | |
Distributions in excess of net investment income | | | | (14,723 | ) | | | | (33,111 | ) | | | | (4,102 | ) |
Accumulated net realized loss on investments | | | | (60,911 | ) | | | | (2,915,578 | ) | | | | (15,153,623 | ) |
Net unrealized appreciation of investments | | | | 25,943,422 | | | | | 19,213,440 | | | | | 62,826,237 | |
| | | | | | | | | | | | | | | |
Total Net Assets | | | $ | 577,321,421 | | | | $ | 542,099,527 | | | | $ | 1,309,815,058 | |
| | | | | | | | | | | | | | | |
82
| | | | | | | | | | | | | | | |
| | | Delaware
Tax-Free
USA Fund | | Delaware
Tax-Free USA
Intermediate Fund | | Delaware
National High-Yield
Municipal Bond Fund |
| | | |
Net Asset Value | | | | | | | | | | | | | | | |
Class A: | | | | | | | | | | | | | | | |
Net assets | | | $ | 481,117,019 | | | | $ | 136,652,806 | | | | $ | 200,493,622 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | | | | 42,057,830 | | | | | 11,620,614 | | | | | 18,233,577 | |
Net asset value per share | | | $ | 11.44 | | | | $ | 11.76 | | | | $ | 11.00 | |
Sales charge | | | | 4.50 | % | | | | 2.75 | % | | | | 4.50 | % |
Offering price per share, equal to net asset value per share / (1 – sales charge) | | | $ | 11.98 | | | | $ | 12.09 | | | | $ | 11.52 | |
| | | |
Class C: | | | | | | | | | | | | | | | |
Net assets | | | $ | 18,808,569 | | | | $ | 28,001,543 | | | | $ | 92,154,787 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | | | | 1,643,826 | | | | | 2,382,398 | | | | | 8,346,807 | |
Net asset value per share | | | $ | 11.44 | | | | $ | 11.75 | | | | $ | 11.04 | |
| | | |
Institutional Class: | | | | | | | | | | | | | | | |
Net assets | | | $ | 77,395,833 | | | | $ | 377,445,178 | | | | $ | 1,017,166,649 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | | | | 6,715,716 | | | | | 31,789,426 | | | | | 91,654,372 | |
Net asset value per share | | | $ | 11.52 | | | | $ | 11.87 | | | | $ | 11.10 | |
1 Investments, at cost | | | $ | 551,312,224 | | | | $ | 524,384,939 | | | | $ | 1,236,461,435 | |
See accompanying notes, which are an integral part of the financial statements.
83
Statements of operations
Year ended August 31, 2018
| | | | | | | | | | | | | | | |
| | | Delaware
Tax-Free
USA Fund | | Delaware
Tax-Free USA
Intermediate Fund | | Delaware
National High-Yield
Municipal Bond Fund |
Investment Income: | | | | | | | | | | | | | | | |
Interest | | | $ | 24,521,697 | | | | $ | 21,200,242 | | | | $ | 63,370,443 | |
| | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | |
Management fees | | | | 2,994,098 | | | | | 2,769,696 | | | | | 6,408,910 | |
Distribution expenses — Class A | | | | 1,116,247 | | | | | 364,423 | | | | | 483,397 | |
Distribution expenses — Class C | | | | 246,993 | | | | | 358,088 | | | | | 957,027 | |
Dividend disbursing and transfer agent fees and expenses | | | | 466,618 | | | | | 530,878 | | | | | 1,145,171 | |
Accounting and administration expenses | | | | 127,055 | | | | | 128,590 | | | | | 253,745 | |
Registration fees | | | | 92,038 | | | | | 71,123 | | | | | 114,524 | |
Audit and tax fees | | | | 44,990 | | | | | 44,990 | | | | | 44,990 | |
Legal fees | | | | 41,364 | | | | | 45,882 | | | | | 96,156 | |
Reports and statements to shareholders expenses | | | | 35,662 | | | | | 35,135 | | | | | 68,186 | |
Trustees’ fees and expenses | | | | 25,646 | | | | | 25,898 | | | | | 58,633 | |
Custodian fees | | | | 17,120 | | | | | 16,259 | | | | | 34,593 | |
Other | | | | 37,181 | | | | | 42,535 | | | | | 85,828 | |
| | | | | | | | | | | | | | | |
| | | | 5,245,012 | | | | | 4,433,497 | | | | | 9,751,160 | |
Less expenses waived | | | | (803,437 | ) | | | | (593,765 | ) | | | | (757,620 | ) |
Less waived distribution expenses — Class A | | | | — | | | | | (145,769 | ) | | | | — | |
Less expenses paid indirectly | | | | (5,479 | ) | | | | (3,441 | ) | | | | (7,395 | ) |
| | | | | | | | | | | | | | | |
Total operating expenses | | | | 4,436,096 | | | | | 3,690,522 | | | | | 8,986,145 | |
| | | | | | | | | | | | | | | |
Net Investment Income | | | | 20,085,601 | | | | | 17,509,720 | | | | | 54,384,298 | |
| | | | | | | | | | | | | | | |
Net Realized and Unrealized Gain (Loss): | | | | | | | | | | | | | | | |
Net realized gain on investments | | | | 1,601,289 | | | | | 380,931 | | | | | 7,505,047 | |
Net change in unrealized appreciation (depreciation) of investments | | | | (13,534,385 | ) | | | | (14,485,267 | ) | | | | (13,724,500 | ) |
| | | | | | | | | | | | | | | |
Net Realized and Unrealized Loss | | | | (11,933,096 | ) | | | | (14,104,336 | ) | | | | (6,219,453 | ) |
| | | | | | | | | | | | | | | |
Net Increase in Net Assets Resulting from Operations | | | $ | 8,152,505 | | | | $ | 3,405,384 | | | | $ | 48,164,845 | |
| | | | | | | | | | | | | | | |
See accompanying notes, which are an integral part of the financial statements.
84
This page intentionally left blank.
Statements of changes in net assets
Delaware Tax-Free USA Fund
| | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | |
| | |
Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
Net investment income | | $ | 20,085,601 | | | $ | 19,077,033 | |
Net realized gain (loss) | | | 1,601,289 | | | | (780,531 | ) |
Net change in unrealized appreciation (depreciation) | | | (13,534,385 | ) | | | (18,435,138 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 8,152,505 | | | | (138,636 | ) |
| | | | | | | | |
| | |
Dividends and Distributions to Shareholders from: | | | | | | | | |
Net investment income: | | | | | | | | |
Class A | | | (16,632,280 | ) | | | (16,243,857 | ) |
Class C | | | (721,618 | ) | | | (864,022 | ) |
Institutional Class | | | (2,731,703 | ) | | | (1,969,154 | ) |
| | |
Net realized gain: | | | | | | | | |
Class A | | | — | | | | (4,669,336 | ) |
Class C | | | — | | | | (314,280 | ) |
Institutional Class | | | — | | | | (455,368 | ) |
| | | | | | | | |
| | | (20,085,601 | ) | | | (24,516,017 | ) |
| | | | | | | | |
| | |
Capital Share Transactions: | | | | | | | | |
Proceeds from shares sold: | | | | | | | | |
Class A | | | 144,964,138 | | | | 20,491,013 | |
Class C | | | 2,742,284 | | | | 3,820,845 | |
Institutional Class | | | 33,395,228 | | | | 36,733,206 | |
| | |
Net asset value of shares issued upon reinvestment of dividends and distributions: | | | | | | | | |
Class A | | | 14,612,119 | | | | 18,129,628 | |
Class C | | | 644,001 | | | | 1,017,859 | |
Institutional Class | | | 2,271,556 | | | | 1,881,457 | |
| | | | | | | | |
| | | 198,629,326 | | | | 82,074,008 | |
| | | | | | | | |
86
| | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | |
| | |
Capital Share Transactions (continued): | | | | | | | | |
Cost of shares redeemed: | | | | | | | | |
Class A | | $ | (83,964,343 | ) | | $ | (95,346,418 | ) |
Class C | | | (11,372,623 | ) | | | (7,582,637 | ) |
Institutional Class | | | (19,620,579 | ) | | | (19,556,143 | ) |
| | | | | | | | |
| | | (114,957,545 | ) | | | (122,485,198 | ) |
| | | | | | | | |
Increase (Decrease) in net assets derived from capital share transactions | | | 83,671,781 | | | | (40,411,190 | ) |
| | | | | | | | |
Net Increase (Decrease) in Net Assets | | | 71,738,685 | | | | (65,065,843 | ) |
| | |
Net Assets: | | | | | | | | |
Beginning of year | | | 505,582,736 | | | | 570,648,579 | |
| | | | | | | | |
End of year | | $ | 577,321,421 | | | $ | 505,582,736 | |
| | | | | | | | |
Distributions in excess of net investment income | | $ | (14,723 | ) | | $ | (14,723 | ) |
| | | | | | | | |
See accompanying notes, which are an integral part of the financial statements.
87
Statements of changes in net assets
Delaware Tax-Free USA Intermediate Fund
| | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | |
| | |
Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
Net investment income | | $ | 17,509,720 | | | $ | 18,059,227 | |
Net realized gain (loss) | | | 380,931 | | | | (2,085,453 | ) |
Net change in unrealized appreciation (depreciation) | | | (14,485,267 | ) | | | (19,485,190 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 3,405,384 | | | | (3,511,416 | ) |
| | | | | | | | |
| | |
Dividends and Distributions to Shareholders from: | | | | | | | | |
Net investment income: | | | | | | | | |
Class A | | | (4,506,606 | ) | | | (4,915,126 | ) |
Class C | | | (800,814 | ) | | | (921,125 | ) |
Institutional Class | | | (12,202,300 | ) | | | (12,182,549 | ) |
| | |
Net realized gain: | | | | | | | | |
Class A | | | — | | | | (58,508 | ) |
Class C | | | — | | | | (15,746 | ) |
Institutional Class | | | — | | | | (152,523 | ) |
| | | | | | | | |
| | | (17,509,720 | ) | | | (18,245,577 | ) |
| | | | | | | | |
| | |
Capital Share Transactions: | | | | | | | | |
Proceeds from shares sold: | | | | | | | | |
Class A | | | 16,752,051 | | | | 35,944,973 | |
Class C | | | 1,183,828 | | | | 3,230,487 | |
Institutional Class | | | 107,068,849 | | | | 135,948,379 | |
| | |
Net asset value of shares issued upon reinvestment of dividends and distributions: | | | | | | | | |
Class A | | | 4,147,980 | | | | 4,591,718 | |
Class C | | | 729,575 | | | | 846,092 | |
Institutional Class | | | 9,272,878 | | | | 8,398,061 | |
| | | | | | | | |
| | | 139,155,161 | | | | 188,959,710 | |
| | | | | | | | |
88
| | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | |
| | |
Capital Share Transactions (continued): | | | | | | | | |
Cost of shares redeemed: | | | | | | | | |
Class A | | $ | (44,644,168 | ) | | $ | (59,113,240 | ) |
Class C | | | (13,357,830 | ) | | | (11,801,182 | ) |
Institutional Class | | | (98,947,892 | ) | | | (239,010,931 | ) |
| | | | | | | | |
| | | (156,949,890 | ) | | | (309,925,353 | ) |
| | | | | | | | |
Decrease in net assets derived from capital share transactions | | | (17,794,729 | ) | | | (120,965,643 | ) |
| | | | | | | | |
Net Decrease in Net Assets | | | (31,899,065 | ) | | | (142,722,636 | ) |
| | |
Net Assets: | | | | | | | | |
Beginning of year | | | 573,998,592 | | | | 716,721,228 | |
| | | | | | | | |
End of year | | $ | 542,099,527 | | | $ | 573,998,592 | |
| | | | | | | | |
Distributions in excess of net investment income | | $ | (33,111 | ) | | $ | (33,111 | ) |
| | | | | | | | |
See accompanying notes, which are an integral part of the financial statements.
89
Statements of changes in net assets
Delaware National High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | |
| | |
Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
Net investment income | | $ | 54,384,298 | | | $ | 48,622,821 | |
Net realized gain (loss) | | | 7,505,047 | | | | (7,642,108 | ) |
Net change in unrealized appreciation (depreciation) | | | (13,724,500 | ) | | | (36,101,039 | ) |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 48,164,845 | | | | 4,879,674 | |
| | | | | | | | |
| | |
Dividends and Distributions to Shareholders from: | | | | | | | | |
Net investment income: | | | | | | | | |
Class A | | | (8,100,736 | ) | | | (8,244,874 | ) |
Class C | | | (3,292,016 | ) | | | (3,328,634 | ) |
Institutional Class | | | (43,005,882 | ) | | | (36,908,033 | ) |
| | | | | | | | |
| | | (54,398,634 | ) | | | (48,481,541 | ) |
| | | | | | | | |
| | |
Capital Share Transactions: | | | | | | | | |
Proceeds from shares sold: | | | | | | | | |
Class A | | | 50,102,652 | | | | 47,160,123 | |
Class C | | | 12,793,383 | | | | 14,018,914 | |
Institutional Class | | | 270,134,611 | | | | 369,553,187 | |
| | |
Net asset value of shares issued upon reinvestment of dividends and distributions: | | | | | | | | |
Class A | | | 7,418,908 | | | | 7,108,543 | |
Class C | | | 2,968,800 | | | | 2,904,991 | |
Institutional Class | | | 36,466,522 | | | | 30,936,256 | |
| | | | | | | | |
| | | 379,884,876 | | | | 471,682,014 | |
| | | | | | | | |
90
| | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | |
Capital Share Transactions (continued): | | | | | | | | |
Cost of shares redeemed: | | | | | | | | |
Class A | | $ | (46,315,595 | ) | | $ | (105,174,981 | ) |
Class C | | | (21,101,276 | ) | | | (28,853,971 | ) |
Institutional Class | | | (217,319,913 | ) | | | (343,301,589 | ) |
| | | | | | | | |
| | | (284,736,784 | ) | | | (477,330,541 | ) |
| | | | | | | | |
Increase (Decrease) in net assets derived from capital share transactions | | | 95,148,092 | | | | (5,648,527 | ) |
| | | | | | | | |
Net Increase (Decrease) in Net Assets | | | 88,914,303 | | | | (49,250,394 | ) |
| | |
Net Assets: | | | | | | | | |
Beginning of year | | | 1,220,900,755 | | | | 1,270,151,149 | |
| | | | | | | | |
End of year | | $ | 1,309,815,058 | | | $ | 1,220,900,755 | |
| | | | | | | | |
Distributions in excess of net investment income | | $ | (4,102 | ) | | $ | (4,102 | ) |
| | | | | | | | |
See accompanying notes, which are an integral part of the financial statements.
91
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 income1 |
Net realized and unrealized gain (loss) |
|
Total from investment operations |
|
|
Less dividends and distributions from: |
Net investment income |
Net realized gain |
|
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 waived3 |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived3 |
Portfolio turnover |
|
|
| 1 | The average shares outstanding have been applied for per share information. |
| 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 during all of the periods shown reflects waivers by the manager and/or distributor. Performance would have been lower had the waivers not been in effect. |
| 3 | Expenses paid indirectly were not material and had no impact on the ratios disclosed. Expenses paid indirectly for the year ended Aug. 31, 2018 are reflected on the “Statements of operations.” |
See accompanying notes, which are an integral part of the financial statements.
92
| | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | | | 8/31/16 | | | 8/31/15 | | | 8/31/14 | |
| | $ | 11.70 | | | $ | 12.22 | | | $ | 11.83 | | | $ | 11.90 | | | $ | 11.14 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.42 | | | | 0.43 | | | | 0.42 | | | | 0.43 | | | | 0.45 | |
| | | (0.26 | ) | | | (0.40 | ) | | | 0.39 | | | | (0.07 | ) | | | 0.76 | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.16 | | | | 0.03 | | | | 0.81 | | | | 0.36 | | | | 1.21 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.42 | ) | | | (0.43 | ) | | | (0.42 | ) | | | (0.43 | ) | | | (0.45 | ) |
| | | — | | | | (0.12 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.42 | ) | | | (0.55 | ) | | | (0.42 | ) | | | (0.43 | ) | | | (0.45 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | $ | 11.44 | | | $ | 11.70 | | | $ | 12.22 | | | $ | 11.83 | | | $ | 11.90 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | 1.44% | | | | 0.41% | | | | 7.00% | | | | 3.09% | | | | 11.02% | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | 481,117 | | | $ | 415,314 | | | $ | 493,408 | | | $ | 504,204 | | | $ | 500,590 | |
| | | 0.81% | | | | 0.81% | | | | 0.81% | | | | 0.81% | | | | 0.80% | |
| | | 0.96% | | | | 0.96% | | | | 0.95% | | | | 0.96% | | | | 0.97% | |
| | | 3.66% | | | | 3.71% | | | | 3.52% | | | | 3.63% | | | | 3.88% | |
| | | 3.51% | | | | 3.56% | | | | 3.38% | | | | 3.48% | | | | 3.71% | |
| | | 42% | | | | 33% | | | | 33% | | | | 16% | | | | 34% | |
| | | | | | | | | | | | | | | | | | | | |
| |
93
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 income1 |
Net realized and unrealized gain (loss) |
|
Total from investment operations |
|
|
Less dividends and distributions from: |
Net investment income |
Net realized gain |
|
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 waived3 |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived3 |
Portfolio turnover |
|
|
| 1 | The average shares outstanding have been applied for per share information. |
| 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 during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
| 3 | Expenses paid indirectly were not material and had no impact on the ratios disclosed. Expenses paid indirectly for the year ended Aug. 31, 2018 are reflected on the “Statements of operations.” |
See accompanying notes, which are an integral part of the financial statements.
94
| | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | | | 8/31/16 | | | 8/31/15 | | | 8/31/14 | |
| | $ | 11.70 | | | $ | 12.22 | | | $ | 11.83 | | | $ | 11.91 | | | $ | 11.14 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.34 | | | | 0.34 | | | | 0.33 | | | | 0.34 | | | | 0.36 | |
| | | (0.26 | ) | | | (0.40 | ) | | | 0.39 | | | | (0.08 | ) | | | 0.77 | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.08 | | | | (0.06 | ) | | | 0.72 | | | | 0.26 | | | | 1.13 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.34 | ) | | | (0.34 | ) | | | (0.33 | ) | | | (0.34 | ) | | | (0.36 | ) |
| | | — | | | | (0.12 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.34 | ) | | | (0.46 | ) | | | (0.33 | ) | | | (0.34 | ) | | | (0.36 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | $ | 11.44 | | | $ | 11.70 | | | $ | 12.22 | | | $ | 11.83 | | | $ | 11.91 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | 0.68% | | | | (0.35% | ) | | | 6.19% | | | | 2.23% | | | | 10.28% | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | 18,808 | | | $ | 27,397 | | | $ | 31,545 | | | $ | 30,851 | | | $ | 29,524 | |
| | | 1.56% | | | | 1.56% | | | | 1.56% | | | | 1.57% | | | | 1.56% | |
| | | 1.71% | | | | 1.71% | | | | 1.70% | | | | 1.72% | | | | 1.72% | |
| | | 2.91% | | | | 2.96% | | | | 2.77% | | | | 2.88% | | | | 3.12% | |
| | | 2.76% | | | | 2.81% | | | | 2.63% | | | | 2.73% | | | | 2.96% | |
| | | 42% | | | | 33% | | | | 33% | | | | 16% | | | | 34% | |
| | | | | | | | | | | | | | | | | | | | |
| |
95
Financial highlights
Delaware Tax-Free USA Fund Institutional Class
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 income1 |
Net realized and unrealized gain (loss) |
|
Total from investment operations |
|
|
Less dividends and distributions from: |
Net investment income |
Net realized gain |
|
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 waived3 |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived3 |
Portfolio turnover |
|
|
| 1 | The average shares outstanding have been applied for per share information. |
| 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 during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
| 3 | Expenses paid indirectly were not material and had no impact on the ratios disclosed. Expenses paid indirectly for the year ended Aug. 31, 2018 are reflected on the “Statements of operations.” |
See accompanying notes, which are an integral part of the financial statements.
96
| | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | | | 8/31/16 | | | 8/31/15 | | | 8/31/14 | |
| | $ | 11.79 | | | $ | 12.31 | | | $ | 11.91 | | | $ | 11.99 | | | $ | 11.22 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.45 | | | | 0.46 | | | | 0.46 | | | | 0.47 | | | | 0.48 | |
| | | (0.27 | ) | | | (0.40 | ) | | | 0.40 | | | | (0.08 | ) | | | 0.77 | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.18 | | | | 0.06 | | | | 0.86 | | | | 0.39 | | | | 1.25 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.45 | ) | | | (0.46 | ) | | | (0.46 | ) | | | (0.47 | ) | | | (0.48 | ) |
| | | — | | | | (0.12 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.45 | ) | | | (0.58 | ) | | | (0.46 | ) | | | (0.47 | ) | | | (0.48 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | $ | 11.52 | | | $ | 11.79 | | | $ | 12.31 | | | $ | 11.91 | | | $ | 11.99 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | 1.61% | | | | 0.68% | | | | 7.32% | | | | 3.26% | | | | 11.33% | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | 77,396 | | | $ | 62,872 | | | $ | 45,696 | | | $ | 33,323 | | | $ | 24,588 | |
| | | 0.56% | | | | 0.56% | | | | 0.56% | | | | 0.57% | | | | 0.56% | |
| | | 0.71% | | | | 0.71% | | | | 0.70% | | | | 0.72% | | | | 0.72% | |
| | | 3.91% | | | | 3.96% | | | | 3.77% | | | | 3.88% | | | | 4.12% | |
| | | 3.76% | | | | 3.81% | | | | 3.63% | | | | 3.73% | | | | 3.96% | |
| | | 42% | | | | 33% | | | | 33% | | | | 16% | | | | 34% | |
| | | | | | | | | | | | | | | | | | | | |
| |
97
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 income1 |
Net realized and unrealized gain (loss) |
|
Total from investment operations |
|
|
Less dividends and distributions from: |
Net investment income |
Net realized gain |
|
Total dividends and distributions |
|
|
Net asset value, end of period |
|
|
Total return3 |
|
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 waived4 |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived4 |
Portfolio turnover |
|
|
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | For the year ended Aug. 31, 2017, net realized gain distributions of $58,508 were made by the Fund’s Class A shares, which calculated to a de minimis amount of $(0.004) per share. |
| 3 | 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 during all of the periods shown reflects waivers by the manager and distributor. Performance would have been lower had the waivers not been in effect. |
| 4 | Expenses paid indirectly were not material and had no impact on the ratios disclosed. Expenses paid indirectly for the year ended Aug. 31, 2018 are reflected on the “Statements of operations.” |
See accompanying notes, which are an integral part of the financial statements.
98
| | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | | | 8/31/16 | | | 8/31/15 | | | 8/31/14 | |
| | $ | 12.06 | | | $ | 12.38 | | | $ | 12.04 | | | $ | 12.21 | | | $ | 11.69 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.37 | | | | 0.35 | | | | 0.35 | | | | 0.35 | | | | 0.34 | |
| | | (0.30 | ) | | | (0.32 | ) | | | 0.34 | | | | (0.17 | ) | | | 0.52 | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.07 | | | | 0.03 | | | | 0.69 | | | | 0.18 | | | | 0.86 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.37 | ) | | | (0.35 | ) | | | (0.35 | ) | | | (0.35 | ) | | | (0.34 | ) |
| | | — | | | | — | 2 | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.37 | ) | | | (0.35 | ) | | | (0.35 | ) | | | (0.35 | ) | | | (0.34 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | $ | 11.76 | | | $ | 12.06 | | | $ | 12.38 | | | $ | 12.04 | | | $ | 12.21 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | 0.57% | | | | 0.35% | | | | 5.79% | | | | 1.46% | | | | 7.47% | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | 136,653 | | | $ | 164,154 | | | $ | 188,034 | | | $ | 184,514 | | | $ | 249,848 | |
| | | 0.71% | | | | 0.75% | | | | 0.75% | | | | 0.76% | | | | 0.75% | |
| | | 0.92% | | | | 0.93% | | | | 0.92% | | | | 0.93% | | | | 0.93% | |
| | | 3.10% | | | | 2.92% | | | | 2.84% | | | | 2.85% | | | | 2.86% | |
| | | 2.89% | | | | 2.74% | | | | 2.67% | | | | 2.68% | | | | 2.68% | |
| | | 32% | | | | 26% | | | | 35% | | | | 19% | | | | 34% | |
| | | | | | | | | | | | | | | | | | | | |
| |
99
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 income1 |
Net realized and unrealized gain (loss) |
|
Total from investment operations |
|
|
Less dividends and distributions from: |
Net investment income |
Net realized gain |
|
Total dividends and distributions |
|
|
Net asset value, end of period |
|
|
Total return3 |
|
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 waived4 |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived4 |
Portfolio turnover |
|
|
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | For the year ended Aug. 31, 2017, net realized gain distributions of $15,746 were made by the Fund’s Class C shares, which calculated to a de minimis amount of $(0.004) per share. |
| 3 | 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 during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
| 4 | Expenses paid indirectly were not material and had no impact on the ratios disclosed. Expenses paid indirectly for the year ended Aug. 31, 2018 are reflected on the “Statements of operations.” |
See accompanying notes, which are an integral part of the financial statements.
100
| | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | | | 8/31/16 | | | 8/31/15 | | | 8/31/14 | |
| | $ | 12.05 | | | $ | 12.37 | | | $ | 12.03 | | | $ | 12.20 | | | $ | 11.69 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.27 | | | | 0.25 | | | | 0.24 | | | | 0.24 | | | | 0.24 | |
| | | (0.30 | ) | | | (0.32 | ) | | | 0.35 | | | | (0.17 | ) | | | 0.51 | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.03 | ) | | | (0.07 | ) | | | 0.59 | | | | 0.07 | | | | 0.75 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.27 | ) | | | (0.25 | ) | | | (0.25 | ) | | | (0.24 | ) | | | (0.24 | ) |
| | | — | | | | — | 2 | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.27 | ) | | | (0.25 | ) | | | (0.25 | ) | | | (0.24 | ) | | | (0.24 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | $ | 11.75 | | | $ | 12.05 | | | $ | 12.37 | | | $ | 12.03 | | | $ | 12.20 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | (0.28% | ) | | | (0.50% | ) | | | 4.90% | | | | 0.60% | | | | 6.48% | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | 28,002 | | | $ | 40,402 | | | $ | 49,515 | | | $ | 48,328 | | | $ | 54,231 | |
| | | 1.56% | | | | 1.60% | | | | 1.60% | | | | 1.61% | | | | 1.60% | |
| | | 1.67% | | | | 1.68% | | | | 1.67% | | | | 1.68% | | | | 1.68% | |
| | | 2.25% | | | | 2.07% | | | | 1.99% | | | | 2.00% | | | | 2.01% | |
| | | 2.14% | | | | 1.99% | | | | 1.92% | | | | 1.93% | | | | 1.93% | |
| | | 32% | | | | 26% | | | | 35% | | | | 19% | | | | 34% | |
| | | | | | | | | | | | | | | | | | | | |
| |
101
Financial highlights
Delaware Tax-Free USA Intermediate Fund Institutional Class
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 income1 |
Net realized and unrealized gain (loss) |
|
Total from investment operations |
|
|
Less dividends and distributions from: |
Net investment income |
Net realized gain |
|
Total dividends and distributions |
|
|
Net asset value, end of period |
|
|
Total return3 |
|
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 waived4 |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived4 |
Portfolio turnover |
|
|
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | For the year ended Aug. 31, 2017, net realized gain distributions of $152,523 were made by the Fund’s Institutional Class shares, which calculated to a de minimis amount of $(0.004) per share. |
| 3 | 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 during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
| 4 | Expenses paid indirectly were not material and had no impact on the ratios disclosed. Expenses paid indirectly for the year ended Aug. 31, 2018 are reflected on the “Statements of operations.” |
See accompanying notes, which are an integral part of the financial statements.
102
| | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | | | 8/31/16 | | | 8/31/15 | | | 8/31/14 | |
| | $ | 12.17 | | | $ | 12.50 | | | $ | 12.16 | | | $ | 12.33 | | | $ | 11.81 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.39 | | | | 0.37 | | | | 0.37 | | | | 0.37 | | | | 0.36 | |
| | | (0.30 | ) | | | (0.33 | ) | | | 0.34 | | | | (0.17 | ) | | | 0.52 | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.09 | | | | 0.04 | | | | 0.71 | | | | 0.20 | | | | 0.88 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.39 | ) | | | (0.37 | ) | | | (0.37 | ) | | | (0.37 | ) | | | (0.36 | ) |
| | | — | | | | — | 2 | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.39 | ) | | | (0.37 | ) | | | (0.37 | ) | | | (0.37 | ) | | | (0.36 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | $ | 11.87 | | | $ | 12.17 | | | $ | 12.50 | | | $ | 12.16 | | | $ | 12.33 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | 0.75% | | | | 0.44% | | | | 5.92% | | | | 1.62% | | | | 7.58% | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | 377,445 | | | $ | 369,443 | | | $ | 479,172 | | | $ | 474,262 | | | $ | 434,455 | |
| | | 0.56% | | | | 0.60% | | | | 0.60% | | | | 0.61% | | | | 0.60% | |
| | | 0.67% | | | | 0.68% | | | | 0.67% | | | | 0.68% | | | | 0.68% | |
| | | 3.25% | | | | 3.07% | | | | 2.99% | | | | 3.00% | | | | 3.01% | |
| | | 3.14% | | | | 2.99% | | | | 2.92% | | | | 2.93% | | | | 2.93% | |
| | | 32% | | | | 26% | | | | 35% | | | | 19% | | | | 34% | |
| | | | | | | | | | | | | | | | | | | | |
| |
103
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 income1 |
Net realized and unrealized gain (loss) |
|
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 waived3 |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived3 |
Portfolio turnover |
|
|
| 1 | The average shares outstanding have been applied for per share information. |
| 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 during all of the periods shown reflect a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
| 3 | Expenses paid indirectly were not material and had no impact on the ratios disclosed. Expenses paid indirectly for the year ended Aug. 31, 2018 are reflected on the “Statements of operations.” |
See accompanying notes, which are an integral part of the financial statements.
104
| | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | | | 8/31/16 | | | 8/31/15 | | | 8/31/14 | |
| | $ | 11.05 | | | $ | 11.42 | | | $ | 10.75 | | | $ | 10.65 | | | $ | 9.64 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.46 | | | | 0.44 | | | | 0.41 | | | | 0.41 | | | | 0.45 | |
| | | (0.05 | ) | | | (0.37 | ) | | | 0.67 | | | | 0.10 | | | | 1.01 | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.41 | | | | 0.07 | | | | 1.08 | | | | 0.51 | | | | 1.46 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.46 | ) | | | (0.44 | ) | | | (0.41 | ) | | | (0.41 | ) | | | (0.45 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.46 | ) | | | (0.44 | ) | | | (0.41 | ) | | | (0.41 | ) | | | (0.45 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | $ | 11.00 | | | $ | 11.05 | | | $ | 11.42 | | | $ | 10.75 | | | $ | 10.65 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | 3.80% | | | | 0.72% | | | | 10.25% | | | | 4.83% | | | | 15.42% | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | 200,493 | | | $ | 190,211 | | | $ | 250,810 | | | $ | 227,090 | | | $ | 204,936 | |
| | | 0.85% | | | | 0.85% | | | | 0.85% | | | | 0.85% | | | | 0.85% | |
| | | 0.91% | | | | 0.94% | | | | 0.94% | | | | 0.97% | | | | 0.99% | |
| | | 4.19% | | | | 4.02% | | | | 3.73% | | | | 3.80% | | | | 4.38% | |
| | | 4.13% | | | | 3.93% | | | | 3.64% | | | | 3.68% | | | | 4.24% | |
| | | 19% | | | | 27% | | | | 13% | | | | 10% | | | | 31% | |
| | | | | | | | | | | | | | | | | | | | |
| |
105
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 income1 |
Net realized and unrealized gain (loss) |
|
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 waived3 |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived3 |
Portfolio turnover |
|
|
| 1 | The average shares outstanding have been applied for per share information. |
| 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 during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
| 3 | Expenses paid indirectly were not material and had no impact on the ratios disclosed. Expenses paid indirectly for the year ended Aug. 31, 2018 are reflected on the “Statements of operations.” |
See accompanying notes, which are an integral part of the financial statements.
106
| | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | | | 8/31/16 | | | 8/31/15 | | | 8/31/14 | |
| | $ | 11.09 | | | $ | 11.47 | | | $ | 10.80 | | | $ | 10.70 | | | $ | 9.68 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.38 | | | | 0.36 | | | | 0.33 | | | | 0.33 | | | | 0.37 | |
| | | (0.05 | ) | | | (0.38 | ) | | | 0.67 | | | | 0.10 | | | | 1.02 | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.33 | | | | (0.02 | ) | | | 1.00 | | | | 0.43 | | | | 1.39 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.38 | ) | | | (0.36 | ) | | | (0.33 | ) | | | (0.33 | ) | | | (0.37 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.38 | ) | | | (0.36 | ) | | | (0.33 | ) | | | (0.33 | ) | | | (0.37 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | $ | 11.04 | | | $ | 11.09 | | | $ | 11.47 | | | $ | 10.80 | | | $ | 10.70 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | 3.03% | | | | (0.11% | ) | | | 9.41% | | | | 4.04% | | | | 14.63% | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | 92,155 | | | $ | 97,974 | | | $ | 113,905 | | | $ | 91,196 | | | $ | 71,424 | |
| | | 1.60% | | | | 1.60% | | | | 1.60% | | | | 1.60% | | | | 1.60% | |
| | | 1.66% | | | | 1.69% | | | | 1.69% | | | | 1.72% | | | | 1.74% | |
| | | 3.44% | | | | 3.27% | | | | 2.98% | | | | 3.05% | | | | 3.63% | |
| | | 3.38% | | | | 3.18% | | | | 2.89% | | | | 2.93% | | | | 3.49% | |
| | | 19% | | | | 27% | | | | 13% | | | | 10% | | | | 31% | |
| | | | | | | | | | | | | | | | | | | | |
| |
107
Financial highlights
Delaware National High-Yield Municipal Bond Fund Institutional Class
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 income1 |
Net realized and unrealized gain (loss) |
|
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 waived3 |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived3 |
Portfolio turnover |
|
|
| 1 | The average shares outstanding have been applied for per share information. |
| 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 during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
| 3 | Expenses paid indirectly were not material and had no impact on the ratios disclosed. Expenses paid indirectly for the year ended Aug. 31, 2018 are reflected on the “Statements of operations.” |
See accompanying notes, which are an integral part of the financial statements.
108
| | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | | | 8/31/16 | | | 8/31/15 | | | 8/31/14 | |
| | $ | 11.15 | | | $ | 11.53 | | | $ | 10.85 | | | $ | 10.75 | | | $ | 9.73 | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.49 | | | | 0.47 | | | | 0.45 | | | | 0.44 | | | | 0.48 | |
| | | (0.05 | ) | | | (0.38 | ) | | | 0.67 | | | | 0.10 | | | | 1.01 | |
| | | | | | | | | | | | | | | | | | | | |
| | | 0.44 | | | | 0.09 | | | | 1.12 | | | | 0.54 | | | | 1.49 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.49 | ) | | | (0.47 | ) | | | (0.44 | ) | | | (0.44 | ) | | | (0.47 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | (0.49 | ) | | | (0.47 | ) | | | (0.44 | ) | | | (0.44 | ) | | | (0.47 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | $ | 11.10 | | | $ | 11.15 | | | $ | 11.53 | | | $ | 10.85 | | | $ | 10.75 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
| | | 4.07% | | | | 0.92% | | | | 10.57% | | | | 5.08% | | | | 15.71% | |
| | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | $ | 1,017,167 | | | $ | 932,716 | | | $ | 905,436 | | | $ | 649,455 | | | $ | 384,525 | |
| | | 0.60% | | | | 0.60% | | | | 0.60% | | | | 0.60% | | | | 0.60% | |
| | | 0.66% | | | | 0.69% | | | | 0.69% | | | | 0.72% | | | | 0.74% | |
| | | 4.44% | | | | 4.27% | | | | 3.98% | | | | 4.05% | | | | 4.63% | |
| | | 4.38% | | | | 4.18% | | | | 3.89% | | | | 3.93% | | | | 4.49% | |
| | | 19% | | | | 27% | | | | 13% | | | | 10% | | | | 31% | |
| | | | | | | | | | | | | | | | | | | | |
| |
109
| | |
| Notes to financial statements | | |
| Delaware Funds® by Macquarie national tax-free funds | | August 31, 2018 |
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 each referred to as a Trust, or 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 a Fund, or collectively, the Funds). Each Fund is an open-end investment company. The Funds are considered diversified under the Investment Company Act of 1940, as amended (1940 Act), and offer Class A, Class C, and Institutional Class shares. Class A shares are sold with a maximum front-end sales charge of 4.50% for Delaware Tax-Free USA Fund and Delaware National High-Yield Municipal Bond Fund, and 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) instead of a front-end sales charge of 1.00% 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 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 C shares are sold with a CDSC of 1.00%, which will be incurred if redeemed during the first 12 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 taxes as is available from municipal obligations and as is consistent with prudent investment management and preservation of capital.
The investment objective of Delaware National High-Yield Municipal Bond Fund is to seek a high level of current income exempt from federal income tax primarily through investment in medium- and lower-grade municipal obligations.
1. Significant Accounting Policies
The following accounting policies are in accordance with US generally accepted accounting principles (US GAAP) and are consistently followed by the Funds. Each Fund is an investment company and follows accounting and reporting guidance under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946, Financial Services – Investment Companies.
Security Valuation — Debt securities are valued based upon valuations provided by an independent pricing service or broker and reviewed by management. 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. Valuations for fixed income securities utilize matrix systems, which reflect such factors as security prices, yields, maturities, and ratings, and are supplemented by dealer and exchange quotations. 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 Trust’s Board of Trustees (each, a Board or, collectively, the Boards). In determining whether market
110
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. Restricted securities are valued at fair value using methods approved by the Boards.
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. Each Fund evaluates tax positions taken or expected to be taken in the course of preparing each Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. Management has analyzed each Fund’s tax positions taken or expected to be taken on each Fund’s federal income tax returns through the year ended Aug. 31, 2018 and for all open tax years (years ended Aug. 31, 2015–Aug. 31, 2017), and has concluded that no provision for federal income tax is required in each Fund’s financial statements. If applicable, each Fund recognizes interest accrued on unrecognized tax benefits in interest expense and penalties in other expenses on the “Statements of operations.” During the year ended Aug. 31, 2018, the Funds did not incur any interest or tax penalties.
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 — Each Fund is an investment company, whose financial statements are prepared in conformity with US GAAP. Therefore, each Fund follows the accounting and reporting guidelines for investment companies. The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the fair value of investments, the reported amounts of assets and liabilities and disclosure of contingent 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 and the differences could be material.
Other — Expenses directly attributable to a Fund are charged directly to that Fund. Other expenses common to various funds within the Delaware Funds® by Macquarie (Delaware Funds) are generally allocated among such funds on the basis of average net assets. Management fees and certain 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 on debt securities are accreted or amortized to interest income, respectively, over the lives of the respective securities using the effective interest method. Each Fund declares dividends daily from net investment income and pays the dividends monthly and declares and pays distributions from net realized gain on investments, if any, annually. Each Fund may distribute more frequently, if necessary for tax purposes. Dividends and distributions, if any, are recorded on the ex-dividend date.
111
Notes to financial statements
Delaware Funds® by Macquarie national tax-free funds
1. Significant Accounting Policies (continued)
Each Fund receives earnings credits from its custodian when positive cash balances are maintained, which may be used to offset custody fees. The expense paid under this arrangement is included on the “Statements of operations” under “Custodian fees” with the corresponding expense offset included under “Less expenses paid indirectly.” For the year ended Aug. 31, 2018, each Fund earned the following amounts under this arrangement:
| | | | |
Delaware Tax-Free USA Fund | | Delaware Tax-Free USA Intermediate Fund | | Delaware National High-Yield Municipal Bond Fund |
$5,087 | | $3,296 | | $6,831 |
Each Fund receives earnings credits from its transfer agent when positive cash balances are maintained, which may be used to offset transfer agent fees. If the amount earned is greater than $1, the expense paid under this arrangement is included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses” with the corresponding expense offset included under “Less expenses paid indirectly.” For the year ended Aug. 31, 2018, each Fund earned the following amounts under this arrangement:
| | | | |
Delaware Tax-Free USA Fund | | Delaware Tax-Free USA Intermediate Fund | | Delaware National High-Yield Municipal Bond Fund |
$392 | | $145 | | $564 |
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 Macquarie Investment Management Business Trust and the investment manager, an annual fee which is calculated daily and paid monthly based on each Fund’s average daily net assets as follows:
| | | | | | |
| | | Delaware Tax-Free USA Fund | | Delaware Tax-Free USA Intermediate Fund | | Delaware National High-Yield Municipal Bond Fund |
On the first $500 million | | 0.550% | | 0.500% | | 0.550% |
On the next $500 million | | 0.500% | | 0.475% | | 0.500% |
On the next $1.5 billion | | 0.450% | | 0.450% | | 0.450% |
In excess of $2.5 billion | | 0.425% | | 0.425% | | 0.425% |
DMC has contractually agreed to waive that portion, if any, of its management fee and/or pay/reimburse each Fund to the extent necessary to ensure that total annual operating expenses (excluding any distribution and service (12b-1) fees, acquired fund fees and expenses, taxes, interest, inverse floater program expenses, short sale and dividend interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) do not exceed the following percentage of each Fund’s average daily net assets from Sept. 1, 2017 through Aug. 31, 2018.* For purposes of these waivers and reimbursements, nonroutine expenses may also include such additional costs and expenses, as may be agreed upon from time to time by the Boards and DMC. These expense waivers and reimbursements apply only to expenses paid directly by each Fund and may only be terminated by
112
agreement of DMC and each Fund. The waivers and reimbursements are accrued daily and received monthly.
| | | | | | |
| | | Delaware Tax-Free USA Fund | | Delaware Tax-Free USA Intermediate Fund | | Delaware National High-Yield Municipal Bond Fund |
Operating expense limitation as a percentage of average daily net assets (April 1, 2018 through Aug. 31, 2018) | | 0.56% | | 0.50% | | 0.60% |
Operating expense limitation as a percentage of average daily net assets (Sept. 1, 2017 through March 31, 2018) | | 0.56% | | 0.60% | | 0.60% |
Delaware Investments Fund Services Company (DIFSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to the Funds. For these services, DIFSC’s fees are calculated daily and paid monthly based on the aggregate daily net assets of all funds within the Delaware Funds at the following annual rate: 0.00475% of the first $35 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $45 billion (Total Fee). Each Fund in the Delaware Funds pays a minimum of $4,000, which, in aggregate, is subtracted from the Total Fee. Each Fund then pays its portion of the remainder of the Total Fee on a relative net asset value (NAV) basis. These amounts are included on the “Statements of operations” under “Accounting and administration expenses.” For the year ended Aug. 31, 2018, each Fund was charged for these services as follows:
| | | | |
Delaware Tax-Free
USA Fund | | Delaware Tax-Free
USA Intermediate Fund | | Delaware National High-Yield
Municipal Bond Fund |
$24,739 | | $25,047 | | $51,526 |
DIFSC is also the transfer agent and dividend disbursing agent of the Funds. For these services, DIFSC’s fees were calculated daily and paid monthly based on the aggregate daily net assets of the retail funds within the Delaware Funds from Sept. 1, 2017 through June 30, 2018 at the following annual rate: 0.025% of the first $20 billion; 0.020% of the next $5 billion; 0.015% of the next $5 billion; and 0.013% of average daily net assets in excess of $30 billion. Effective July 1, 2018, each Fund as well as the other Delaware Funds entered into an amendment to the DIFSC agreement. Under the amendment to the DIFSC agreement, DIFSC’s fees are calculated daily and paid monthly based on the aggregate daily net assets of the retail funds within the Delaware Funds at the following annual rate: 0.014% of the first $20 billion; 0.011% of the next $5 billion; 0.007% of the next $5 billion; 0.005% of the next $20 billion; and 0.0025% of average daily net assets in excess of $50 billion. The fees payable to DIFSC under the transfer agent agreement described above are allocated among all retail funds in the Delaware Funds on a relative NAV basis. These amounts are included on the “Statements of operations” under “Dividend
113
Notes to financial statements
Delaware Funds® by Macquarie national tax-free funds
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)
disbursing and transfer agent fees and expenses.” For the year ended Aug. 31, 2018, each Fund was charged for these services as follows:
| | | | |
Delaware Tax-Free
USA Fund | | Delaware Tax-Free
USA Intermediate Fund | | Delaware National High-Yield
Municipal Bond Fund |
$106,789 | | $108,404 | | $244,447 |
Pursuant to a sub-transfer agency agreement between DIFSC and BNY Mellon Investment Servicing (US) Inc. (BNYMIS), BNYMIS provides certain sub-transfer agency services to each Fund. Sub-transfer agency fees are paid by each Fund and are also included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses.”
Pursuant to a distribution agreement and distribution plan, Delaware National High-Yield Municipal Bond Fund pays DDLP, the distributor and an affiliate of DMC, an annual 12b-1 fee of 0.25% of the average daily net assets of the Class A shares. The Board for Delaware Tax-Free USA Fund has adopted a formula for calculating 12b-1 fees for the Fund’s Class A shares that went into effect on June 1, 1992. The Fund’s Class A shares are currently subject to a blended 12b-1 fee equal to the sum of: (1) 0.10% of average daily net assets representing shares acquired prior to June 1, 1992, and (2) 0.25% of average daily net assets representing shares that were acquired on or after June 1, 1992. All of the Fund’s Class A shareholders bear 12b-1 fees at the same blended rate, currently 0.25% of average daily net assets, based on the formula described above. This method of calculating Class A 12b-1 fees may be discontinued at the sole discretion of the Board. The Class A shares of Delaware Tax-Free USA Intermediate Fund were subject to a 12b-1 fee of 0.25% of average daily net assets, which was contractually waived to 0.15% of average daily net assets from Sept. 1, 2017 through Aug. 31, 2018.* Each Fund pays 1.00% of the average daily net assets of the Class C shares. The fees are calculated daily and paid monthly. Institutional Class shares pay no 12b-1 fees.
As provided in the investment management agreement, each Fund bears a portion of the cost of certain resources shared with DMC, including the cost of internal personnel of DMC and/or its affiliates that provide legal, tax, and regulatory reporting services to each Fund. These amounts are included on the “Statements of operations” under “Legal fees.” For the year ended Aug. 31, 2018, each Fund was charged for internal legal, tax, and regulatory reporting services provided by DMC and/or its affiliates’ employees as follows:
| | | | |
Delaware Tax-Free
USA Fund | | Delaware Tax-Free
USA Intermediate Fund | | Delaware National High-Yield
Municipal Bond Fund |
$10,838 | | $11,709 | | $24,815 |
For the year ended Aug. 31, 2018, DDLP earned commissions on sales of Class A shares for each Fund as follows:
| | | | |
Delaware Tax-Free
USA Fund | | Delaware Tax-Free
USA Intermediate Fund | | Delaware National High-Yield
Municipal Bond Fund |
$24,672 | | $2,678 | | $39,929 |
For the year ended Aug. 31, 2018, DDLP received gross CDSC commissions on redemptions of each Fund’s Class A and Class C shares. These commissions were entirely used to offset upfront
114
commissions previously paid by DDLP to broker/dealers on sales of those shares. The amounts received were as follows:
| | | | | | |
| | | Delaware Tax-Free
USA Fund | | Delaware Tax-Free
USA Intermediate Fund | | Delaware National High-Yield
Municipal Bond Fund |
Class A | | $2,881 | | $ 14 | | $25,059 |
Class C | | 967 | | 586 | | 6,003 |
Trustees’ fees include expenses accrued by the Funds for each Trustee’s retainer and meeting fees. Certain officers of DMC, DIFSC, and DDLP are officers and/or Trustees of the Trusts. These officers and Trustees are paid no compensation by the Funds.
Cross trades for the year ended Aug. 31, 2018, were executed by each Fund pursuant to procedures adopted by the Boards designed to ensure compliance with Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds of investment companies, or between a fund of an investment company and another entity, that are or could be considered affiliates by virtue of having a common investment advisor (or affiliated investment advisors), common directors/trustees and/or common officers. At their regularly scheduled meetings, the Boards review such transactions for compliance with the procedures adopted by the Boards. Pursuant to these procedures, for the year ended Aug. 31, 2018, the Funds engaged in Rule 17a-7 securities purchases and securities sales, which resulted in realized losses as follows:
| | | | | | |
| | | Delaware Tax-Free
USA Fund | | Delaware Tax-Free
USA Intermediate Fund | | Delaware National High-Yield
Municipal Bond Fund |
Purchases | | $47,938,381 | | $28,124,593 | | $46,518,642 |
Sales | | 44,742,597 | | 22,005,297 | | 37,343,543 |
Net realized loss | | (211,813) | | (282,761) | | — |
There was no realized gain (loss) as a result of Rule 17a-7 securities sales for Delaware National High-Yield Municipal Bond Fund.
*For Delaware Tax-Free USA Fund and Delaware National High-Yield Municipal Bond Fund, the aggregate contractual waiver period covering this report is from Dec. 29, 2016 through Dec. 29, 2018. For Delaware Tax-Free USA Intermediate Fund, the aggregate contractual waiver period covering this report is from Dec. 29, 2016 through April 1, 2019.
3. Investments
For the year ended Aug. 31, 2018, each Fund made purchases and sales of investment securities other than short-term investments as follows:
| | | | | | | | | | | | | | | |
| | | Delaware Tax-Free
USA Fund | | Delaware Tax-Free
USA Intermediate Fund | | Delaware National
High-Yield
Municipal Bond Fund |
Purchases | | | | $302,401,407 | | | | | $174,830,098 | | | | | $325,881,347 | |
Sales | | | | 226,493,709 | | | | | 189,355,858 | | | | | 233,762,547 | |
115
Notes to financial statements
Delaware Funds® by Macquarie national tax-free funds
3. Investments (continued)
The tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be final tax cost basis adjustments, but approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. At Aug. 31, 2018, the cost and unrealized appreciation (depreciation) of investments for federal income tax purposes for each Fund were as follows:
| | | | | | | | | | | | | | | |
| | | Delaware Tax-Free
USA Fund | | Delaware Tax-Free
USA Intermediate Fund | | Delaware National
High-Yield
Municipal Bond Fund |
Cost of investments | | | $ | 551,500,879 | | | | $ | 524,384,939 | | | | $ | 1,235,691,604 | |
| | | | | | | | | | | | | | | |
Aggregate unrealized appreciation of investments | | | $ | 26,018,916 | | | | $ | 19,235,495 | | | | $ | 70,585,049 | |
Aggregate unrealized depreciation of investments | | | | (264,149 | ) | | | | (22,055 | ) | | | | (6,988,981 | ) |
| | | | | | | | | | | | | | | |
Net unrealized appreciation of investments | | | $ | 25,754,767 | | | | $ | 19,213,440 | | | | $ | 63,596,068 | |
| | | | | | | | | | | | | | | |
US GAAP defines fair value as the price that each Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A three-level hierarchy for fair value measurements has been established 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. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability 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-level hierarchy of inputs is summarized below.
| | |
| Level 1 – | | Inputs are quoted prices in active markets for identical investments. (Examples: equity securities, open-end investment companies, futures contracts, exchange-traded options contracts) |
| |
| Level 2 – | | Other observable inputs, including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs. (Examples: debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, fair valued securities) |
| |
| Level 3 – | | Significant unobservable inputs, including each Fund’s own assumptions used to determine the fair value of investments. (Examples: broker-quoted securities, fair valued securities) |
116
Level 3 investments are valued using significant unobservable inputs. Each Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Valuations may also be based upon current market prices of securities that are comparable in coupon, rating, maturity, and industry. The derived value of a Level 3 investment may not represent the value which is received upon disposition and this could impact the results of operations.
The following tables summarize the valuation of each Fund’s investments by fair value hierarchy levels as of Aug. 31, 2018:
| | | | |
| | | Delaware Tax-Free USA Fund | |
| |
| | | Level 2 | |
Securities | | | | |
Assets: | | | | |
Municipal Bonds | | | $569,675,646 | |
Short-Term Investments | | | 7,580,000 | |
Total Value of Securities | | | $577,255,646 | |
| |
| | | Delaware Tax-Free USA
Intermediate Fund | |
| |
| | | Level 2 | |
Securities | | | | |
Assets: | | | | |
Municipal Bonds | | | $536,508,379 | |
Short-Term Investments | | | 7,090,000 | |
Total Value of Securities | | | $543,598,379 | |
| |
| | | Delaware National High-Yield
Municipal Bond Fund | |
| |
| | | Level 2 | |
Securities | | | | |
Assets: | | | | |
Municipal Bonds | | | $1,298,187,672 | |
Short-Term Investments | | | 1,100,000 | |
Total Value of Securities | | | $1,299,287,672 | |
During the year ended Aug. 31, 2018, there were no transfers between Level 1 investments, Level 2 investments, or Level 3 investments that had a significant impact to each Fund. Each Fund’s policy is to recognize transfers between levels based on fair value at the beginning of the reporting period.
117
Notes to financial statements
Delaware Funds® by Macquarie national tax-free funds
3. Investments (continued)
A reconciliation of Level 3 investments is presented when a Fund has a significant amount of Level 3 investments at the beginning, interim, or end of the period in relation to net assets. During the year ended Aug. 31, 2018, there were no Level 3 investments.
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 US GAAP. 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 years ended Aug. 31, 2018 and 2017 was as follows:
| | | | | | | | | | | | | | | |
| | | Delaware Tax-Free
USA Fund | | Delaware Tax-Free
USA Intermediate Fund | | Delaware National
High-Yield
Municipal Bond Fund |
Year ended 8/31/18 | | | | | | | | | | | | | | | |
Tax-exempt income | | | $ | 20,025,612 | | | | $ | 17,495,281 | | | | $ | 54,048,737 | |
Ordinary income | | | | 59,989 | | | | | 14,439 | | | | | 349,897 | |
| | | | | | | | | | | | | | | |
Total | | | $ | 20,085,601 | | | | $ | 17,509,720 | | | | $ | 54,398,634 | |
| | | | | | | | | | | | | | | |
| | | |
Year ended 8/31/17 | | | | | | | | | | | | | | | |
Tax-exempt income | | | $ | 19,094,030 | | | | $ | 17,933,308 | | | | $ | 48,338,718 | |
Ordinary income | | | | 524,061 | | | | | 134,852 | | | | | 142,823 | |
Long-term capital gains | | | | 4,897,926 | | | | | 177,417 | | | | | — | |
| | | | | | | | | | | | | | | |
Total | | | $ | 24,516,017 | | | | $ | 18,245,577 | | | | $ | 48,481,541 | |
| | | | | | | | | | | | | | | |
5. Components of Net Assets on a Tax Basis
As of Aug. 31, 2018, the components of net assets on a tax basis were as follows:
| | | | | | | | | | | | | | | |
| | | Delaware Tax-Free
USA Fund | | Delaware Tax-Free
USA Intermediate Fund | | Delaware National
High-Yield
Municipal Bond Fund |
Shares of beneficial interest | | | $ | 551,453,633 | | | | $ | 525,834,776 | | | | $ | 1,262,146,546 | |
Undistributed tax-exempt income | | | | 492,016 | | | | | 407,119 | | | | | 1,379,861 | |
Undistributed long-term capital gains | | | | 127,744 | | | | | — | | | | | — | |
Distributions payable | | | | (506,739 | ) | | | | (440,230 | ) | | | | (1,383,963 | ) |
Capital loss carryforwards | | | | — | | | | | (2,915,578 | ) | | | | (15,923,454 | ) |
Unrealized appreciation of investments | | | | 25,754,767 | | | | | 19,213,440 | | | | | 63,596,068 | |
| | | | | | | | | | | | | | | |
Net assets | | | $ | 577,321,421 | | | | $ | 542,099,527 | | | | $ | 1,309,815,058 | |
| | | | | | | | | | | | | | | |
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The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales and tax treatment of market discount and premium on debt instruments, if applicable.
For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to tax treatment of market discount and premium on certain debt instruments. Results of operations and net assets were not affected by these reclassifications. For the year ended Aug. 31, 2018, Delaware National High-Yield Municipal Bond Fund recorded the following reclassifications:
| | | | |
Distributions in excess of net investment income | | | $ 14,336 | |
Accumulated net realized loss | | | (14,336 | ) |
For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. At Aug. 31, 2018, Delaware National High-Yield Municipal Bond Fund utilized $7,442,137 of capital loss carryforwards.
Under the Regulated Investment Company Modernization Act of 2010, net capital losses recognized for tax years beginning after Dec. 22, 2010 may be carried forward indefinitely, and their character is retained as short-term and/or long-term losses. At Aug. 31, 2018, capital loss carryforwards available to offset future realized capital gains, were as follows:
| | | | | | | | | | | | |
| | | No expiration | | | | |
| | | Post-enactment capital loss character | | | | |
| | | | | | | | | Total capital loss | |
| | | Short-term | | | Long-term | | | carryforwards | |
| Delaware Tax-Free USA Intermediate Fund | | $ | 2,915,578 | | | $ | — | | | $ | 2,915,578 | |
| Delaware National High-Yield Municipal Bond Fund | | | 12,461,267 | | | | 3,462,187 | | | | 15,923,454 | |
At Aug. 31, 2018, there were no capital loss carryforwards for Delaware Tax-Free USA Fund.
119
Notes to financial statements
Delaware Funds® by Macquarie national tax-free funds
6. Capital Shares
Transactions in capital shares were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Delaware Tax-Free
USA Fund | | | Delaware Tax-Free
USA Intermediate Fund | | | Delaware National
High-Yield
Municipal Bond Fund | |
| | | Year ended | | | Year ended | | | Year ended | |
| | | 8/31/18 | | | 8/31/17 | | | 8/31/18 | | | 8/31/17 | | | 8/31/18 | | | 8/31/17 | |
| | | | | | |
Shares sold: | | | | | | | | | | | | | | | | | | | | | | | | |
Class A | | | 12,603,666 | | | | 1,771,333 | | | | 1,415,308 | | | | 3,022,406 | | | | 4,548,565 | | | | 4,328,365 | |
Class C | | | 236,676 | | | | 325,639 | | | | 99,772 | | | | 271,770 | | | | 1,156,364 | | | | 1,288,593 | |
Institutional Class | | | 2,876,073 | | | | 3,141,457 | | | | 8,940,604 | | | | 11,329,643 | | | | 24,307,805 | | | | 33,863,188 | |
|
Shares issued upon reinvestment of dividends and distributions: | |
Class A | | | 1,268,997 | | | | 1,565,318 | | | | 350,140 | | | | 384,829 | | | | 674,320 | | | | 652,446 | |
Class C | | | 55,857 | | | | 87,959 | | | | 61,629 | | | | 70,969 | | | | 268,726 | | | | 265,684 | |
Institutional Class | | | 195,804 | | | | 161,330 | | | | 775,842 | | | | 697,103 | | | | 3,284,191 | | | | 2,813,255 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 17,237,073 | | | | 7,053,036 | | | | 11,643,295 | | | | 15,776,720 | | | | 34,239,971 | | | | 43,211,531 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Shares redeemed: | | | | | | | | | | | | | | | | | | | | | | | | |
Class A | | | (7,310,314 | ) | | | (8,219,120 | ) | | | (3,760,589 | ) | | | (4,984,764 | ) | | | (4,205,385 | ) | | | (9,726,923 | ) |
Class C | | | (989,856 | ) | | | (653,426 | ) | | | (1,131,893 | ) | | | (992,677 | ) | | | (1,909,980 | ) | | | (2,656,102 | ) |
Institutional Class | | | (1,689,696 | ) | | | (1,681,232 | ) | | | (8,276,999 | ) | | | (20,021,304 | ) | | | (19,583,617 | ) | | | (31,588,716 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (9,989,866 | ) | | | (10,553,778 | ) | | | (13,169,481 | ) | | | (25,998,745 | ) | | | (25,698,982 | ) | | | (43,971,741 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net increase (decrease) | | | 7,247,207 | | | | (3,500,742 | ) | | | (1,526,186 | ) | | | (10,222,025 | ) | | | 8,540,989 | | | | (760,210 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
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Certain shareholders may exchange shares of one class for shares of another class in the same Fund. These exchange transactions are included as subscriptions and redemptions in the tables on the previous page and on the “Statements of changes in net assets.” For the years ended Aug. 31, 2018 and 2017, each Fund had the following exchange transactions:
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Year ended | | |
| | | | | 8/31/18 | | |
| | | |
| | | Exchange | | Exchange | | |
| | | Redemptions | | Subscriptions | | |
| | | | | | | | | Institutional | | |
| | | Class A | | Class C | | Class A | | Class | | |
| | | Shares | | Shares | | Shares | | Shares | | Value |
Delaware Tax-Free USA Fund | | | | 48,496 | | | | | 77,372 | | | | | 77,526 | | | | | 48,172 | | | | $ | 1,447,435 | |
Delaware Tax-Free USA Intermediate Fund | | | | 24,896 | | | | | 31,342 | | | | | 31,355 | | | | | 24,650 | | | | | 662,376 | |
Delaware National High-Yield Municipal Bond Fund | | | | 44,817 | | | | | 87,060 | | | | | 55,968 | | | | | 75,762 | | | | | 1,459,307 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | Year ended | | |
| | | | | 8/31/17 | | |
| | | |
| | | Exchange | | Exchange | | |
| | | Redemptions | | Subscriptions | | |
| | | | | | | Institutional | | |
| | | Class A | | Class C | | Class | | |
| | | Shares | | Shares | | Shares | | Value |
Delaware Tax-Free USA Fund | | | | 856,362 | | | | | 6,306 | | | | | 858,276 | | | | $ | 9,985,602 | |
Delaware Tax-Free USA Intermediate Fund | | | | 234,870 | | | | | — | | | | | 232,990 | | | | | 2,786,921 | |
Delaware National High-Yield Municipal Bond Fund | | | | 2,134,297 | | | | | 15,391 | | | | | 2,134,779 | | | | | 23,025,554 | |
7. Line of Credit
Each Fund, along with certain other funds in the Delaware Funds (Participants), was a participant in a $155,000,000 revolving line of credit intended 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 of 0.15%, which was generally allocated across the Participants based on a weighted average of the respective net assets of each Participant. The Participants were permitted to borrow up to a maximum of one-third of their net assets under the agreement. Each Participant was individually, and not jointly, liable for its particular advances, if any, under the line of credit. The line of credit available under the agreement expired on Nov. 6, 2017.
On Nov. 6, 2017, each Fund, along with the other Participants, entered into an amendment to the agreement for a $155,000,000 revolving line of credit. The line of credit is to be used as described above
121
Notes to financial statements
Delaware Funds® by Macquarie national tax-free funds
7. Line of Credit (continued)
and operates in substantially the same manner as the original agreement. The line of credit available under the agreement expires on Nov. 5, 2018.
The Funds had no amounts outstanding as of Aug. 31, 2018, or at any time during the year then ended.
8. Securities Lending
Delaware Tax-Free USA intermediate Fund, along with other funds in the Delaware Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with The Bank of New York Mellon (BNY Mellon). At the time a security is loaned, the borrower must post collateral equal to the required percentage of the market value of the loaned security, including any accrued interest. The required percentage is: (1) 102% with respect to US securities and foreign securities that are denominated and payable in US dollars; and (2) 105% with respect to foreign securities. With respect to each loan, if on any business day the aggregate market value of securities collateral plus cash collateral held is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral by the end of the following business day, which, together with the collateral already held, will be not less than the applicable initial collateral requirements for such security loan. If the aggregate market value of securities collateral and cash collateral held with respect to a security loan exceeds the applicable initial collateral requirement, upon the request of the borrower, BNY Mellon must return enough collateral to the borrower by the end of the following business day to reduce the value of the remaining collateral to the applicable initial collateral requirement for such security loan. As a result of the foregoing, the value of the collateral held with respect to a loaned security on any particular day may be more or less than the value of the security on loan. The collateral percentage with respect to the market value of the loaned security is determined by the security lending agent.
Cash collateral received by each fund of the Trust is generally invested in a series of individual separate accounts, each corresponding to a fund. The investment guidelines permit each separate account to hold certain securities that would be considered eligible securities for a money market fund. Cash collateral received is generally invested in government securities; certain obligations issued by government sponsored enterprises; repurchase agreements collateralized by US Treasury securities; obligations issued by the central government of any Organization for Economic Cooperation and Development (OECD) country or its agencies, instrumentalities, or establishments; obligations of supranational organizations; commercial paper, notes, bonds, and other debt obligations; certificates of deposit, time deposits, and other bank obligations; and asset-backed securities. A fund can also accept US government securities and letters of credit (non-cash collateral) in connection with securities loans.
In the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Fund or, at the discretion of the lending agent, replace the loaned securities. The Fund continues to record dividends or interest, as applicable, on the securities loaned and is subject to changes in value of the securities loaned that may occur during the term of the loan. The Fund has the right under the Lending Agreement to recover the securities from the borrower on demand. With respect
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to security loans collateralized by non-cash collateral, the Fund receives loan premiums paid by the borrower. With respect to security loans collateralized by cash collateral, the earnings from the collateral investments are shared among the Fund, the security lending agent, and the borrower. The Fund records security lending income net of allocations to the security lending agent and the borrower.
The Fund may incur investment losses as a result of investing securities lending collateral. This could occur if an investment in the collateral investment account defaulted or became impaired. Under those circumstances, the value of each Fund’s cash collateral account may be less than the amount the Fund would be required to return to the borrowers of the securities and the Fund would be required to make up for this shortfall.
During the year ended Aug. 31, 2018, Delaware Tax-Free USA Intermediate Fund had no securities out on loan. For the year ended Aug. 31, 2018, Delaware Tax-Fee USA Fund and Delaware National High-Yield Municipal Bond Fund were not included in the Lending Agreement.
9. Geographic, Credit, and Market Risks
When interest rates rise, fixed income securities (i.e., debt obligations) generally will decline in value. These declines in value are greater for fixed income securities with longer maturities or durations.
The Funds concentrate their investments in securities issued by municipalities, and may be subject to geographic concentration risk. In addition, the Funds have the flexibility to invest in issuers in US territories and possessions such as the Commonwealth of Puerto Rico, the US Virgin Islands, and Guam, whose bonds are also free of federal and individual state income taxes.
The value of the Funds’ investments may be adversely affected by new legislation within the US states or territories, 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 certainty 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 the value of insured bonds held in each Fund. At Aug. 31, 2018, the percentage of each Fund’s net assets insured by bond issuers are listed below and these securities have been identified on the “Schedules of investments.”
| | | | | | | | | | | | | | | |
| | | Delaware Tax-Free
USA Fund | | Delaware Tax-Free
USA Intermediate Fund | | Delaware
National High-Yield
Municipal Bond Fund |
| Assured Guaranty Corporation | | | | 0.18 | % | | | | — | | | | | 0.18 | % |
| Assured Guaranty Municipal Corporation | | | | 0.24 | % | | | | 1.40 | % | | | | 0.63 | % |
| AMBAC Assurance Corporation | | | | 0.50 | % | | | | — | | | | | 0.08 | % |
| National Public Finance Guarantee Corporation | | | | 0.28 | % | | | | — | | | | | — | |
| Syncora Guarantee | | | | — | | | | | — | | | | | 0.16 | % |
| | | | | | | | | | | | | | | |
Total | | | | 1.20 | % | | | | 1.40 | % | | | | 1.05 | % |
| | | | | | | | | | | | | | | |
123
Notes to financial statements
Delaware Funds® by Macquarie national tax-free funds
9. Geographic, Credit, and Market Risks (continued)
As of Aug. 31, 2018, Delaware Tax-Free USA Fund invested in municipal bonds issued by the states of California and New York which constituted approximately 17.46% and 13.68%, respectively, of the Fund’s net assets. As of Aug. 31, 2018, Delaware Tax-Free USA Intermediate Fund invested in municipal bonds issued by the states of California and New York, which constituted approximately 15.93% and 15.88%, respectively, of the Fund’s net assets. As of Aug. 31, 2018, Delaware National High-Yield Municipal Bond Fund invested in municipal bonds issued by the State of California which constituted approximately 16.10%, of the Fund’s net assets. These investments could make each Fund more sensitive to economic conditions in those states than other more geographically diversified national municipal income funds.
Each Fund invests a portion of its assets in high yield fixed income securities, which are securities rated lower than BBB- by Standard & Poor’s Financial Services LLC (S&P), lower than Baa3 by Moody’s Investors Service, Inc. (Moody’s), or similarly rated by another nationally recognized statistical rating organization. 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.
Each Fund invests in certain obligations that may have liquidity protection designed to ensure that the receipt of payments due on the underlying security is timely. Such protection may be provided through guarantees, insurance policies, or letters of credit obtained by the issuer or sponsor through third parties, through various means of structuring the transaction or through a combination of such approaches. Each Fund will not pay any additional fees for such credit support, although the existence of credit support may increase the price of a security.
Each Fund may invest in advance 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 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
124
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.
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, promulgated under the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair each Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Boards have 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 securities. 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. Rule 144A securities held by each Fund have been identified on the “Schedules of investments.” Restricted securities are valued pursuant to the security valuation procedures described in Note 1.
10. Contractual Obligations
Each Fund enters into contracts in the normal course of business that contain a variety of indemnifications. Each Fund’s maximum exposure under these arrangements is unknown. However, each Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed each Fund’s existing contracts and expects the risk of loss to be remote.
11. Recent Accounting Pronouncements
In March 2017, the FASB issued an Accounting Standards Update, ASU 2017-08, Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities which amends the amortization period for certain purchased callable debt securities held at a premium, shortening such period to the earliest call date. The ASU 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. The ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after Dec. 15, 2018. At this time, management is evaluating the implications of these changes on the financial statements.
In August 2018, the FASB issued an Accounting Standards Update, ASU 2018-13, which changes certain fair value measurement disclosure requirements. The ASU 2018-13, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for the timing of transfers between levels and the valuation process for Level 3 fair value measurements. The ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after Dec. 15, 2019. At this time, management is evaluating the implications of these changes on the financial statements.
12. Subsequent Events
On Sept. 6, 2018, the credit facility that each Fund participates in was reduced from a $155,000,000 to a $130,000,000 revolving line of credit. This line of credit will expire on Nov. 5, 2018.
125
Notes to financial statements
Delaware Funds® by Macquarie national tax-free funds
12. Subsequent Events (continued)
Management has determined that no other material events or transactions occurred subsequent to Aug. 31, 2018, that would require recognition or disclosure in the Funds’ financial statements.
126
Report of independent registered
public accounting firm
To the Board of Trustees of Delaware Group® Tax-Free Fund and Voyageur Mutual Funds and Shareholders of Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund and Delaware National High-Yield Municipal Bond Fund
Opinions on the Financial Statements
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund (constituting Delaware Group® Tax Free Fund) and Delaware National High-Yield Municipal Bond Fund (one of the funds constituting Voyageur Mutual Funds) (hereafter collectively referred to as the “Funds”) as of August 31, 2018, the related statements of operations for the year ended August 31, 2018, the statements of changes in net assets for each of the two years in the period ended August 31, 2018, including the related notes, and the financial highlights for each of the five years in the period ended August 31, 2018 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds as of August 31, 2018, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended August 31, 2018 and each of the financial highlights for each of the five years in the period ended August 31, 2018 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinions
These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of August 31, 2018 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
October 17, 2018
We have served as the auditor of one or more investment companies in Delaware Funds® by Macquarie since 2010.
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Other Fund information (Unaudited)
Delaware Funds® by Macquarie national tax-free funds
Tax Information
The information set forth below is for each Fund’s fiscal year as required by federal income tax laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of a fund. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in January of each year. Please consult your tax advisor for proper treatment of this information.
All disclosures are based on financial information available as of the date of this annual report and, accordingly are subject to change. For any and all items requiring reporting, it is the intention of each Fund to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.
For the fiscal year ended Aug. 31, 2018, each Fund reports distributions paid during the year as follows:
| | | | | | |
| | | (A)
Ordinary Income
Distributions
(Tax Basis) | | (B)
Tax-Exempt
Distributions
(Tax Basis) | | Total
Distributions
(Tax Basis) |
Delaware Tax-Free USA Fund | | 0.30% | | 99.70% | | 100.00% |
Delaware Tax-Free USA Intermediate Fund | | 0.08% | | 99.92% | | 100.00% |
Delaware National High-Yield Municipal Bond Fund | | 0.64% | | 99.36% | | 100.00% |
(A) and (B) are based on a percentage of each Fund’s total distributions.
Board consideration of advisory agreements for Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund
At a meeting held on Aug. 15–16, 2018 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory Agreements for Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund (each, a “Fund” and together, the “Funds”). In making its decision, the Board considered information furnished at regular quarterly Board meetings, including reports detailing Fund performance, investment strategies, and expenses, as well as information prepared specifically in connection with the renewal of the investment advisory contracts. Information furnished specifically in connection with the renewal of the Investment Management Agreement with Delaware Management Company (“DMC”), a series of Macquarie Investment Management Business Trust (“MIMBT”) included materials provided by DMC and its affiliates (collectively, “Macquarie Investment Management”) concerning, among other things, the nature, extent, and quality of services provided to the Funds; the costs of such services to the Funds; economies of scale; and the investment manager’s financial condition and profitability. In addition, in connection with the Annual Meeting, materials were provided to the Trustees in May 2018, including reports provided by Broadridge Financial Solutions (“Broadridge”). The Broadridge reports compared each Fund’s investment performance and expenses with those of other comparable mutual funds. The Independent Trustees reviewed and discussed the Broadridge reports with independent legal counsel to the
128
Independent Trustees. In addition to the information noted above, the Board also requested and received information regarding DMC’s policy with respect to advisory fee levels and its breakpoint philosophy; the structure of portfolio manager compensation; comparative client fee information; and any constraints or limitations on the availability of securities for certain investment styles, which had in the past year inhibited, or which were likely in the future to inhibit, the investment manager’s ability to invest fully in accordance with Fund policies.
In considering information relating to the approval of each Fund’s advisory agreement, the Independent Trustees received assistance and advice from and met separately with independent legal counsel to the Independent Trustees and also from an experienced and knowledgeable independent fund consultant, JDL Consultants, LLC (“JDL”). Although the Board gave attention to all information furnished, the following discussion identifies, under separate headings, the primary factors taken into account by the Board during its contract renewal considerations.
Nature, extent, and quality of service. The Board considered the services provided by DMC to the Funds and their shareholders. In reviewing the nature, extent, and quality of services, the Board considered reports furnished to it throughout the year, which covered matters such as the relative performance of the Funds; compliance of portfolio managers with the investment policies, strategies, and restrictions for the Funds; compliance by DMC and Delaware Distributors, L.P. (together, “Management”) personnel with the Code of Ethics adopted throughout the Delaware Funds® by Macquarie (“Delaware Funds”); and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of DMC and the emphasis placed on research in the investment process. The Board recognized DMC’s receipt of certain favorable industry distinctions during the past several years. The Board gave favorable consideration to DMC’s efforts to control expenses while maintaining service levels committed to Fund matters. The Board also noted the benefits provided to Fund shareholders (a) through each shareholder’s ability to: (i) exchange an investment in one Delaware Fund for the same class of shares in another Delaware Fund without a sales charge, or (ii) to reinvest Fund dividends into additional shares of the Fund or into additional shares of other Delaware Funds, and (b) the privilege to combine holdings in other Delaware Funds to obtain a reduced sales charge. The Board was satisfied with the nature, extent, and quality of the overall services provided by DMC.
Investment performance. The Board placed significant emphasis on the investment performance of the Funds in view of the importance of investment performance to shareholders. Although the Board considered performance reports and discussions with portfolio managers at Investment Committee meetings throughout the year, the Board gave particular weight to the Broadridge reports furnished for the Annual Meeting. The Broadridge reports prepared for each Fund showed the investment performance of its Class A shares in comparison to a group of similar funds as selected by Broadridge (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for each Fund was shown for the past 1-, 3-, 5-, and 10-year periods, to the extent applicable, ended Jan. 31, 2018. The Board’s objective is that each Fund’s
129
Other Fund information (Unaudited)
Delaware Funds® by Macquarie national tax-free funds
Board consideration of advisory agreements for Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund (continued)
performance for the 1-, 3-, and 5-year periods considered be at or above the median of its Performance Universe.
Delaware Tax-Free USA Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional general and insured municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1-, 3-, and 5-year periods was in the second quartile of its Performance Universe. The report further showed that the Fund’s total return for the 10-year period was in the first quartile of its Performance Universe. The Board was satisfied with performance.
Delaware Tax-Free USA Intermediate Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional intermediate municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1-year period was in the first quartile of its Performance Universe. The report further showed that the Fund’s total return for the 3-, 5-, and 10-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.
Delaware National High-Yield Municipal Bond Fund — The Performance Universe for the Fund consisted of the Fund and all retail and institutional high yield municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1- and 10-year periods was in the first quartile of its Performance Universe. The report further showed that the Fund’s total return for the 3- and 5-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.
Comparative expenses. The Board considered expense data for the Delaware Funds. Management provided the Board with information on pricing levels and fee structures for each Fund as of its most recently completed fiscal year. The Board also focused on the comparative analysis of effective management fees and total expense ratios of each Fund versus effective management fees and total expense ratios of a group of similar funds as selected by Broadridge (the “Expense Group”). In reviewing comparative costs, each Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. Each Fund’s total expenses were also compared with those of its Expense Group. The Broadridge total expenses, for comparative consistency, were shown by Broadridge for Class A shares and comparative total expenses including 12b-1 and non-12b-1 service fees. The Board’s objective is for each Fund’s total expense ratio to be competitive with those of the peer funds within its Expense Group.
Delaware Tax-Free USA Fund — The expense comparisons for the Fund showed that its actual management fee was in the quartile with the lowest expenses of its Expense Group and its total expenses were in the quartile with the second lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Fund in comparison to those of its Expense Group as shown in the Broadridge report.
130
Delaware Tax-Free USA Intermediate Fund — The expense comparisons for the Fund showed that its actual management fee was in the quartile with the second highest expenses of its Expense Group and its total expenses were in the quartile with the lowest expenses of its Expense Group. The Board noted that the Fund’s management fee was not in line with the Board’s objective, but that the Board was satisfied with the total expenses of the Fund in comparison to those of its Expense Group as shown in the Broadridge report.
Delaware National High-Yield Municipal Bond Fund — The expense comparisons for the Fund showed that its actual management fee was in the quartile with the lowest expenses of its Expense Group and its total expenses were in the quartile with the second highest expenses of its Expense Group. The Board gave favorable consideration to the Fund’s management fee, but noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered fee waivers in place through December 2018 and various initiatives implemented by Management, such as the negotiation of lower fees for fund accounting, fund accounting oversight, and custody services, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.
Management profitability. The Board considered the level of profits realized by DMC in connection with the operation of the Funds. In this respect, the Board reviewed the Investment Management Profitability Analysis that addressed the overall profitability of DMC’s business in providing management and other services to each of the individual funds and the Delaware Funds as a whole. Specific attention was given to the methodology used by DMC in allocating costs for the purpose of determining profitability. Management stated that the level of profits of DMC, to a certain extent, reflects recent operational cost savings and efficiencies initiated by DMC. The Board considered DMC’s efforts to improve services provided to Fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which DMC might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. As part of its work, the Board also reviewed a report prepared by JDL regarding MIMBT profitability as compared to certain peer fund complexes and the Independent Trustees met with JDL personnel to discuss DMC’s profitability in such context. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of DMC.
Economies of scale. The Trustees considered whether economies of scale are realized by DMC as each Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed the Funds’ advisory fee pricing and structure, approved by the Board and shareholders, which includes breakpoints, and which applies to most funds in the Delaware Funds complex. Breakpoints in the advisory fee occur when the advisory fee rate is reduced on assets in excess of specified levels. Breakpoints result in a lower advisory fee than would otherwise be the case in the absence of breakpoints, when the asset levels specified in the breakpoints are exceeded. The Board noted that, as of March 31, 2018, assets of Delaware Tax-Free USA Fund and Delaware Tax-Free USA Intermediate Fund exceeded the first breakpoint level and assets of Delaware National High-Yield Municipal Bond Fund exceeded the second breakpoint level. The Board believed
131
Other Fund information (Unaudited)
Delaware Funds® by Macquarie national tax-free funds
Board consideration of advisory agreements for Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund (continued)
that, given the extent to which economies of scale might be realized by DMC and its affiliates, the schedule of fees under the Investment Management Agreements provides a sharing of benefits with the Funds and their shareholders.
132
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Board of trustees / directors and officers addendum
Delaware Funds® by Macquarie
A mutual fund is governed by a Board of Trustees/Directors (“Trustees”), which has oversight responsibility for the management of a fund’s business affairs. Trustees establish procedures and oversee and review the performance of the investment manager, the distributor, and others who perform services for the fund. The independent fund trustees, in particular, are advocates
| | | | |
Name, Address, and Birth Date | | Position(s) Held with Fund(s) | | Length of Time Served |
Interested Trustee | | | | |
| | |
| Shawn K. Lytle1, 2 | | President, | | Trustee since |
| 2005 Market Street | | Chief Executive Officer, | | September 2015 |
| Philadelphia, PA 19103 | | and Trustee | | |
| February 1970 | | | | President and |
| | | | Chief Executive Officer |
| | | | since August 2015 |
| | | | |
Independent Trustees | | | | |
| | |
| Thomas L. Bennett | | Chair and Trustee | | Trustee since |
| 2005 Market Street | | | | March 2005 |
| Philadelphia, PA 19103 | | | | |
| October 1947 | | | | Chair since |
| | | | March 2015 |
| Ann D. Borowiec | | Trustee | | Since March 2015 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
| November 1958 | | | | |
| | | | |
| Joseph W. Chow | | Trustee | | Since January 2013 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
January 1953 | | | | |
| 1 | Shawn K. Lytle is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor. |
| 2 | Shawn K. Lytle, David F. Connor, Daniel V. Geatens, and Richard Salus serve in similar capacities for the six portfolios of the Optimum Fund Trust, which have the same investment advisor, principal underwriter, and transfer agent as the registrant. Mr. Geatens also serves as the Chief Financial Officer and Treasurer for Macquarie Global Infrastructure Total Return Fund Inc., which has an affiliated investment manager. |
134
for shareholder interests. Each trustee has served in that capacity since he or she was elected to or appointed to the Board of Trustees, and will continue to serve until his or her retirement or the election of a new trustee in his or her place. The following is a list of the Trustees and Officers with certain background and related information.
| | | | |
Principal Occupation(s) During the Past Five Years | | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | | Other Directorships Held by Trustee or Officer |
| | |
| | | | |
| President — Macquarie | | 59 | | Trustee — UBS |
| Investment Management3 | | | | Relationship Funds, |
| (June 2015–Present) | | | | SMA Relationship |
| | | | | Trust, and UBS Funds |
| Regional Head of | | | | (May 2010–April 2015) |
| Americas —UBS Global | | | | |
| Asset Management | | | | |
(April 2010–May 2015) | | | | |
| | |
| | | | |
| Private Investor | | 59 | | None |
(March 2004–Present) | | | | |
| Chief Executive Officer, | | 59 | | Director — |
| Private Wealth Management | | | | Banco Santander International |
| (2011–2013) and | | | | (October 2016–Present) |
| Market Manager, | | | | |
| New Jersey Private | | | | Director — |
| Bank (2005–2011) — | | | | Santander Bank, N.A. |
J.P. Morgan Chase & Co. | | | | (December 2016–Present) |
| Private Investor | | 59 | | Director and Audit Committee |
| (April 2011–Present) | | | | Member — Hercules |
| | | | Technology Growth |
| | | | Capital, Inc. |
| | | | | (July 2004–July 2014) |
| 3 | Macquarie Investment Management is the marketing name for Macquarie Management Holdings, Inc. and its subsidiaries, including the Fund’s(s’) investment advisor, principal underwriter, and its transfer agent. |
135
Board of trustees / directors and officers addendum
Delaware Funds® by Macquarie
| | | | |
| Name, Address, | | Position(s) | | Length of |
| and Birth Date | | Held with Fund(s) | | Time Served |
Independent Trustees (continued) | | | | |
| John A. Fry | | Trustee | | Since January 2001 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
May 1960 | | | | |
| Lucinda S. Landreth | | Trustee | | Since March 2005 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
| June 1947 | | | | |
| Frances A. Sevilla-Sacasa | | Trustee | | Since September 2011 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
January 1956 | | | | |
136
| | | | |
| | | Number of Portfolios in | | |
| Principal Occupation(s) | | Fund Complex Overseen | | Other Directorships |
| During the Past Five Years | | by Trustee or Officer | | Held by Trustee or Officer |
| | |
| | | | | |
| President — | | 59 | | Director; Compensation |
| Drexel University | | | | Committee and |
| (August 2010–Present) | | | | Governance Committee |
| | | | Member — Community |
| President — | | | | Health Systems |
| Franklin & Marshall College | | | | |
| (July 2002–July 2010) | | | | Director — Drexel |
| | | | Morgan & Co. |
| | |
| | | | Director; Audit Committee |
| | | | Member — vTv |
| | | | Therapeutics LLC |
| | |
| | | | Director; Audit Committee |
| | | | Member — FS Credit Real |
| | | | Estate Income Trust, Inc. |
| Private Investor | | 59 | | None |
(2004–Present) | | | | |
| Private Investor | | 59 | | Trust Manager and |
| (January 2017–Present) | | | | Audit Committee |
| | | | Chair — Camden |
| Chief Executive Officer — | | | | Property Trust |
| Banco Itaú | | | | (August 2011–Present) |
| International | | | | |
| (April 2012–December 2016) | | | | Director — |
| | | | Carrizo Oil & Gas, Inc. |
| Executive Advisor to Dean | | | | (March 2018–Present) |
| (August 2011–March 2012) | | | | |
| and Interim Dean | | | | |
| (January 2011–July 2011) — | | | | |
| University of Miami School of | | | | |
| Business Administration | | | | |
| | |
| President — U.S. Trust, | | | | |
| Bank of America Private | | | | |
| Wealth Management | | | | |
| (Private Banking) | | | | |
| (July 2007–December 2008) | | | | |
137
Board of trustees / directors and officers addendum
Delaware Funds® by Macquarie
| | | | |
Name, Address, and Birth Date | | Position(s) Held with Fund(s) | | Length of Time Served |
Independent Trustees (continued) | | |
| Thomas K. Whitford | | Trustee | | Since January 2013 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
March 1956 | | | | |
| Janet L. Yeomans | | Trustee | | Since April 1999 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
July 1948 | | | | |
Officers | | | | |
| David F. Connor | | Senior Vice President, | | Senior Vice President |
| 2005 Market Street | | General Counsel, | | since May 2013; |
| Philadelphia, PA 19103 | | and Secretary | | General Counsel |
| December 1963 | | | | since May 2015; |
| | | | Secretary since |
| | | | | October 2005 |
| Daniel V. Geatens | | Vice President | | Vice President and |
| 2005 Market Street | | and Treasurer | | Treasurer since October 2007 |
| Philadelphia, PA 19103 | | | | |
October 1972 | | | | |
| Richard Salus | | Senior Vice President | | Senior Vice President and |
| 2005 Market Street | | and Chief Financial Officer | | Chief Financial Officer |
| Philadelphia, PA 19103 | | | | since November 2006 |
October 1963 | | | | |
The Statement of Additional Information for the Fund(s) includes additional information about the Trustees and Officers and is available, without charge, upon request by calling 800 523-1918.
138
| | | | |
Principal Occupation(s) During the Past Five Years | | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | | Other Directorships Held by Trustee or Officer |
| | | | |
| Vice Chairman | | 59 | | Director — HSBC Finance |
| (2010–April 2013) — | | | | Corporation and HSBC |
| PNC Financial | | | | North America Holdings Inc. |
Services Group | | | | (December 2013–Present) |
| | | | Director — |
| | | | HSBC USA Inc. |
| | | | (July 2014–March 2017) |
| Vice President and Treasurer | | 59 | | Director (2009–2017); |
| (January 2006–July 2012), | | | | Personnel and Compensation |
| Vice President — | | | | Committee Chair; Member of |
| Mergers & Acquisitions | | | | Nominating, Investments, and |
| (January 2003–January 2006), | | | | Audit Committees for various |
| and Vice President | | | | periods throughout |
| and Treasurer | | | | directorship — |
| (July 1995–January 2003) — | | | | Okabena Company |
3M Company | | | | |
| | | | |
| David F. Connor has served | | 59 | | None2 |
| in various capacities at | | | | |
| different times at | | | | |
| Macquarie Investment | | | | |
Management. | | | | |
| Daniel V. Geatens has served | | 59 | | None2 |
| in various capacities at | | | | |
| different times at | | | | |
| Macquarie Investment | | | | |
Management. | | | | |
| Richard Salus has served | | 59 | | None2 |
| in various executive capacities | | | | |
| at different times at | | | | |
| Macquarie Investment | | | | |
Management. | | | | |
139
About the organization
Board of trustees
Shawn K. Lytle
President and
Chief Executive Officer
Delaware Funds®
by Macquarie
Philadelphia, PA
Thomas L. Bennett
Chairman of the Board
Delaware Funds
by Macquarie
Private Investor
Rosemont, PA
Ann D. Borowiec
Former Chief Executive
Officer
Private Wealth Management
J.P. Morgan Chase & Co.
New York, NY
Joseph W. Chow
Former Executive Vice
President
State Street Corporation
Boston, MA
John A. Fry
President
Drexel University
Philadelphia, PA
Lucinda S. Landreth
Former Chief Investment
Officer
Assurant, Inc.
New York, NY
Frances A.
Sevilla-Sacasa
Former Chief Executive
Officer
Banco Itaú International
Miami, FL
Thomas K. Whitford
Former Vice Chairman
PNC Financial Services Group
Pittsburgh, PA
Janet L. Yeomans
Former Vice President and
Treasurer
3M Company
St. Paul, MN
Affiliated officers
David F. Connor
Senior Vice President,
General Counsel,
and Secretary
Delaware Funds
by Macquarie
Philadelphia, PA
Daniel V. Geatens
Vice President and
Treasurer
Delaware Funds
by Macquarie
Philadelphia, PA
Richard Salus
Senior Vice President and
Chief Financial Officer
Delaware Funds
by Macquarie
Philadelphia, PA
This annual 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 the Delaware Fund fact sheet for the most recently completed calendar quarter. These documents are available at delawarefunds.com/literature.
Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) 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 the Funds use 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 SEC’s website at sec.gov. In addition, a description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities and the Schedules of Investments included in the Funds’ most recent Forms N-Q are available without charge on the Funds’ website at delawarefunds.com/literature. Each Fund’s Forms N-Q may be reviewed and copied at the SEC’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 the Funds voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Funds’ website at delawarefunds.com/proxy; and (ii) on the SEC’s website at sec.gov.
140
Item 2. Code of Ethics
Item 3. Audit Committee Financial Expert
The registrant’s Board of Trustees/Directors has determined that certain members of the registrant’s Audit Committee are audit committee financial experts, as defined below. For purposes of this item, an “audit committee financial expert” is a person who has the following attributes:
a. An understanding of generally accepted accounting principles and financial statements;
b. The ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves;
c. Experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements, or experience actively supervising one or more persons engaged in such activities;
d. An understanding of internal controls and procedures for financial reporting; and
e. An understanding of audit committee functions.
An “audit committee financial expert” shall have acquired such attributes through:
a. Education and experience as a principal financial officer, principal accounting officer, controller, public accountant, or auditor or experience in one or more positions that involve the performance of similar functions;
b. Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor, or person performing similar functions;
c. Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing, or evaluation of financial statements; or
d. Other relevant experience.
The registrant’s Board of Trustees/Directors has also determined that each member of the registrant’s Audit Committee is independent. In order to be “independent” for purposes of this item, the Audit Committee member may not: (i) other than in his or her capacity as a member of the Board of Trustees/Directors or any committee thereof, accept directly or indirectly any consulting, advisory or other compensatory fee from the issuer; or (ii) be an “interested person” of the registrant as defined in Section 2(a)(19) of the Investment Company Act of 1940.
The names of the audit committee financial experts on the registrant’s Audit Committee are set forth below:
Joseph W. Chow
John A. Fry
Lucinda S. Landreth
Thomas K. Whitford
Janet L. Yeomans
Item 4. Principal Accountant Fees and Services
The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $78,000 for the fiscal year ended August 31, 2018.
The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $78,000 for the fiscal year ended August 31, 2017.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended August 31, 2018.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended August 31, 2017.
The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended August 31, 2018.
The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended August 31, 2017.
The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended August 31, 2017. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.
Under the Pre-Approval Policy, the Audit Committee has also pre-approved the services set forth in the table below with respect to the registrant’s investment adviser and other entities controlling, controlled by or under common control with the investment adviser that provide ongoing services to the registrant (the “Control Affiliates”) up to the specified fee limit. This fee limit is based on aggregate fees to the investment adviser and its Control Affiliates.
The Pre-Approval Policy requires the registrant’s independent auditors to report to the Audit Committee at each of its regular meetings regarding all services initiated since the last such report was rendered, including those services authorized by the Pre-Approval Policy.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s independent auditors for services rendered to the registrant and to its investment adviser and other service providers under common control with the adviser were $11,748,000 and $11,180,000 for the registrant’s fiscal years ended August 31, 2018 and August 31, 2017, respectively.
(h) In connection with its selection of the independent auditors, the registrant’s Audit Committee has considered the independent auditors’ provision of non-audit services to the registrant’s investment adviser and other service providers under common control with the adviser that were not required to be pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X. The Audit Committee has determined that the independent auditors’ provision of these services is compatible with maintaining the auditors’ independence.
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 Company 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 fourth fiscal quarter) that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits
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.
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.
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.
