Item 1. Reports to Stockholders
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Delaware Funds® by MACQUARIE | |  |
Annual report
Fixed income mutual funds
DelawareTax-Free Minnesota Fund
DelawareTax-Free Minnesota Intermediate Fund
Delaware Minnesota High-Yield Municipal Bond Fund
August 31, 2019
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| | | Beginning on or about June 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of your Fund’s shareholder reports will no longer be sent to you by mail, unless you specifically request them from the Fund or from your financial intermediary, such as a broker/dealer, bank, or insurance company. Instead, you will be notified by mail each time a report is posted on the website and provided with a link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you do not need to take any action. You may elect to receive shareholder reports and other communications from the Fund electronically by signing up at delawarefunds.com/edelivery. If you own these shares through a financial intermediary, you may contact your financial intermediary. You may elect to receive paper copies of all future shareholder reports free of charge. You can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by contacting us at 800523-1918. If you own these shares through a financial intermediary, you may contact your financial intermediary to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with the Delaware Funds® by Macquarie or your financial intermediary. | | |
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 800523-1918. 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. As active managers we prioritize autonomy and accountability at the investment team level in pursuit of opportunities that matter for clients. Delaware Funds is one of the longest-standing mutual fund families, with more than 80 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 DelawareTax-Free Minnesota Fund, DelawareTax-Free Minnesota Intermediate Fund, and Delaware Minnesota 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. 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), Delaware Capital Management Advisers, Inc., Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, Macquarie Capital Investment Management LLC, and Macquarie Investment Management Europe S.A.
The Funds are distributed byDelaware 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, 2019, 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.
© 2019 Macquarie Management Holdings, Inc.
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| Portfolio management review | | | |
Delaware Funds® by Macquarie Minnesota municipal bond funds | | | September 10, 2019 | |
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| Performance preview (for the year ended August 31, 2019) | | | | |
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| DelawareTax-Free Minnesota Fund (Institutional Class shares) | | 1-year return | | +7.81% |
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| DelawareTax-Free Minnesota Fund (Class A shares) | | 1-year return | | +7.54% |
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| Bloomberg Barclays Municipal Bond Index (benchmark) | | 1-year return | | +8.72% |
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| Lipper Minnesota Municipal Debt Funds Average | | 1-year return | | +7.55% |
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Past performance does not guarantee future results.
For complete, annualized performance for DelawareTax-Free Minnesota Fund, please see the table on page 6. 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.
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 Minnesota Municipal Debt Funds Average compares funds that invest primarily in municipal debt issues that are exempt from taxation in Minnesota.
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.
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| DelawareTax-Free Minnesota Intermediate Fund (Institutional Class shares) | | 1-year return | | +7.06% |
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| DelawareTax-Free Minnesota Intermediate Fund (Class A shares) | | 1-year return | | +7.00% |
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| Bloomberg Barclays 3–15 Year Blend Municipal Bond Index (benchmark) | | 1-year return | | +8.16% |
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| Lipper Other States Intermediate Municipal Debt Funds Average | | 1-year return | | +7.10% |
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Past performance does not guarantee future results.
For complete, annualized performance for DelawareTax-Free Minnesota 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 eligible 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 Other States Intermediate Municipal Debt Funds Average compares funds that invest in municipal debt issues with dollar-weighted average maturities of 5 to 10 years and are exempt from taxation on a specified city or state basis.
Please see page 13 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 Minnesota High-Yield Municipal Bond Fund (Institutional Class shares) | | 1-year return | | +8.50% |
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| Delaware Minnesota High-Yield Municipal Bond Fund (Class A shares) | | 1-year return | | +8.33% |
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| Bloomberg Barclays Municipal Bond Index (benchmark) | | 1-year return | | +8.72% |
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| Lipper Minnesota Municipal Debt Funds Average | | 1-year return | | +7.55% |
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Past performance does not guarantee future results.
For complete, annualized performance for Delaware Minnesota High-Yield Municipal Bond Fund, please see the table on page 14. 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.
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 Minnesota Municipal Debt Funds Average compares funds that invest primarily in municipal debt issues that are exempt from taxation in Minnesota.
Please see page 17 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 Minnesota municipal bond funds
Economic backdrop
Throughout the fiscal year ended Aug. 31, 2019, the US economy grew, albeit at a moderating pace, reflecting mounting concerns about theUS-China trade dispute. In the third quarter of 2018, US gross domestic product (GDP) – a measure of national economic output – rose by an annualized 2.9%, down from the previous quarter. Growth slowed to 1.1% in the final three months of 2018 before bouncing back to 3.1% in the first quarter of 2019. In the second quarter of 2019, the country’s GDP rose an estimated 2.0%.
Against this backdrop of economic expansion, job growth also remained strong. In August 2019, the US unemployment rate stood at 3.7%, matching its level one year earlier and close to the nearly50-year low of 3.6% achieved in both April and May 2019.
When the fiscal year began in September 2018, the US Federal Reserve continued to raise its short-term target interest rate, maintaining a cycle that had been in place since 2015. In September and again in December 2018, the Fed lifted the federal funds rate by 0.25 percentage points. As data mounted suggesting a slowing US economy, however, the Fed adjusted its policy direction – initially, by no longer raising rates and then, in June 2019, reversing its rate increase from December. By the end of the Funds’ fiscal year on Aug. 31, 2019, the federal funds rate was within a range of 2.00% to 2.25%. Investors widely anticipated that the Fed would enact further rate cuts at its meetings later in 2019.
Sources: US Bureau of Economic Analysis, US Bureau of Labor Statistics, and Bloomberg.
Municipal bond market conditions
Uncertainty about trade policy led to uncertainty about future global growth, encouraging global central banks to implement increasingly stimulative economic policies. This led to a highly favorable backdrop for municipal debt, particularly
as the Funds’ fiscal year progressed. The US municipal bond market, as measured by the Bloomberg Barclays Municipal Bond Index, returned 8.72% for the 12 months ended Aug. 31, 2019.
As rates on longer-term bonds fell more than those on shorter-term issues, the municipal yield curve flattened. The largest yield declines came from the “belly” of the municipal yield curve, while the strongest overall performance came from the20-year(17-22 years) and the long bond (22+ years) segments of the curve. Meanwhile, credit spreads tightened, indicating that investors were willing to accept somewhat less yield in exchange for assuming credit risk in an environment of generally healthy credit fundamentals.
Lower-rated bonds generally outperformed their higher-rated counterparts, while bonds with longer maturities tended to outpace those with shorter maturities. The following tables highlight these performance trends for the Funds’ fiscal year ended Aug. 31, 2019:
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Returns by credit rating | | | |
AAA | | | 8.17% | |
AA | | | 8.37% | |
A | | | 9.20% | |
BBB | | | 10.48% | |
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Returns by maturity | | | |
1 year | | | 2.65% | |
5 years | | | 6.34% | |
10 years | | | 9.48% | |
22+ years | | | 11.14% | |
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Source: Bloomberg. | | | | |
Focused on credit research
For all three of the Funds highlighted in this report, we maintained the same management strategy we employ in all market conditions. We follow abottom-up (bond by bond) investment approach. This means we select bonds for the Funds on an
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issuer-by-issuer basis, rather than based on ourtop-down view of interest rates or economic and market conditions. And we rely on diligent credit research to identify securities we believe offer the Funds’ shareholders a favorabletrade-off between risk and reward.
Given this process, the Funds tend to have relatively low allocations to bonds with high credit ratings and greater exposure to securities with lower-investment-grade or below-investment-grade credit ratings. By focusing on higher yielding bonds with solid underlying credit quality, we believe we can potentially add value for the Funds’ shareholders. That said, it was sometimes difficult to find as many suitable lower-rated, higher yielding Minnesota bonds as we wished. This reflects changing issuance patterns in Minnesota’s municipal marketplace, highlighted by a greater proportion of relatively highly rated state and local general obligation and school district bonds with relatively low coupons. In this environment, our approach has been to seek a favorabletrade-off between risk and reward potential while maintaining our overall, credit-oriented management approach.
At fiscal year end on Aug. 31, 2019, roughly 31% of the net assets ofDelawareTax-Free Minnesota Fundwas invested in bonds with lower-investment-grade credit ratings (A and BBB), and approximately 22% of the net assets ofDelawareTax-Free Minnesota Intermediate Fundwas invested in these same credit tiers. Both Funds also maintained allocations to high yield municipal bonds, securities with credit ratings below BBB. By prospectus, both Funds may hold up to 20% of their net assets in high yield debt, although these allocations remained below that threshold in both Funds throughout the fiscal year. Whenever we invest in the high yield market segment, we thoroughly analyze the securities’ credit risk and emphasize those bonds that we believe offer the Funds’ shareholders a favorable risk-reward balance.
Consistent with its mandate,Delaware Minnesota High-Yield Municipal Bond Fundmaintained the largest exposure to high yield bonds of the three Funds. As of Aug. 31, 2019, more than 38% of this Fund’s net assets was held in bonds with credit ratings below BBB, including nonrated bonds.
Portfolio positioning
Throughout the fiscal year, our main objective was to maintain the Funds’ existing credit positioning as best we could. Our challenge was that when interest rates fell, the Funds experienced naturally shortening durations, as various longtime portfolio holdings approached their maturity or call dates.
Because our management approach entails keeping the Funds’ duration (that is, interest rate sensitivity) relatively neutral compared with peer funds – a reflection of our view that we can more effectively add value through credit selection than by trying to anticipate the direction of interest rate movements – we needed to take proactive steps to maintain that neutral stance in a falling interest rate environment.
When available, new bond purchases focused on longer-duration bonds, including bonds with longer call dates. Proceeds for new purchases came from investment inflows and from bond maturities and calls. Using the proceeds from the sale of certain shorter-duration holdings also helped us keep the Funds neutrally positioned in an environment of falling interest rates, while maintaining the credit-oriented investment approach we regularly follow.
Although we believe we were often successful in accomplishing our objectives, our ability to do so was more limited in the Minnesota municipal bond marketplace than we preferred. Unlike in other state markets, where we were frequent buyers of noncallable debt, bonds with this structure were harder to come by in Minnesota, which features a large amount of shorter-call supply. Against this backdrop, we tried to accomplish our duration
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Portfolio management review
Delaware Funds® by Macquarie Minnesota municipal bond funds
objectives methodically, even as we found it challenging to do so within desired time frames.
Notable performance factors
As noted, longer-maturity bonds tended to outperform shorter-maturity bonds for this fiscal year, while lower-quality issues generally outperformed their higher-rated counterparts. Such trends are evident as we highlight some of the Funds’ strongest- and weakest-performing securities over the 12 months.
In bothDelawareTax-Free Minnesota FundandDelaware Minnesota High-Yield Municipal Bond Fund,for example, the strongest-performing holding consisted of charter school bonds for Stride Academy, which gained more than 23%. Both Funds, along withDelawareTax-Free Minnesota Intermediate Fund,also benefited from an education bond issue of Academia Cesar Chavez Charter School, which returned more than 17%. Both issues benefited from relatively long maturities and lower credit ratings. The Chavez Charter School bonds also benefited from improvements in the school’s academic performance following a probationary period.
Another leading performer inDelawareTax-Free Minnesota Intermediate Fundconsisted of bonds for Maple Grove Hospital, which gained close to 14% for the Fund’s fiscal year, reflecting the bonds’ relatively longer maturity and lower credit quality.
Not surprisingly, many of the weakest individual performers across the Funds were bonds with short call or maturity dates, high credit quality, or both. InDelawareTax-Free Minnesota FundandDelawareTax-Free Minnesota Intermediate Fund,for example, the lowest-returning holdings were issues of Allina Health, whose return of less than 2% was emblematic of the securities’ short call dates.
Meanwhile,pre-refunded bonds of the Dakota and Washington Counties Housing and Redevelopment Authority of the City of Anoka returned less than 2% forDelawareTax-Free Minnesota Fund.As these short-duration, high-quality bonds prepared to hit their maturity date at fiscal year end, we were not disappointed to see them go in light of their high coupon. A similar issue underperformed inDelawareTax-Free Minnesota Intermediate Fund,also returning less than 2%.
The lowest-returning holdings forDelaware Minnesota High-Yield Municipal Bond Fundwere a couple ofpre-refunded bonds, including issues of the University of St. Thomas and Samaritan Bethany. Both bonds returned less than 2% for the Fund for the fiscal year.
Minnesota economic backdrop
Minnesota is supported by a diverse economy with employment anchored by the manufacturing, real estate, and healthcare and social services sectors. Other relevant notes:
| ● | | Nonfarm employment remained flat year over year and totaled 3.0 million in July 2019, while the July unemployment rate was 3.4%, stronger than the national average of 3.7%. |
| ● | | Per capita personal income has consistently remained above the national average and was 8% above the national average for the most recent estimate. |
| ● | | General Fund net receipts collected during fiscal year 2019 are projected to total $23.4 billion, which would be 2.8% above projections and 6.2% above the prior fiscal year. |
| ● | | Net income tax collections for fiscal year 2019 are expected to be 3.8% higher than projections, while sales tax receipts are expected to be 1.2% above the forecast. |
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| ● | | The state’srainy-day fund has grown to nearly $2.5 billion as of fiscal year end 2019. The biennial budget for fiscal years 2020 and 2021 totals $48.5 billion, a 6.5% increase from the previous biennial budget, with a projected deficit of $315 million. |
Sources: bls.gov, bea.gov, ncsl.org, Minnesota Management and Budget.
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| Performance summaries | | |
| DelawareTax-Free Minnesota Fund | | August 31, 2019 |
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 800523-1918 or visiting delawarefunds.com/performance.
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Fund and benchmark performance1,2 | | | Average annual total returns through August 31, 2019 | |
| | | 1 year | | | 5 years | | | 10 years | | | Lifetime | |
Class A (Est. Feb. 27, 1984) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +7.54% | | | | +3.33% | | | | +4.22% | | | | +6.19% | |
Including sales charge | | | +2.72% | | | | +2.37% | | | | +3.75% | | | | +6.05% | |
Class C (Est. May 4, 1994) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +6.73% | | | | +2.56% | | | | +3.44% | | | | +4.07% | |
Including sales charge | | | +5.73% | | | | +2.56% | | | | +3.44% | | | | +4.07% | |
Institutional Class (Est. Dec. 31, 2013) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +7.81% | | | | +3.60% | | | | n/a | | | | +4.54% | |
Including sales charge | | | +7.81% | | | | +3.60% | | | | n/a | | | | +4.54% | |
Bloomberg Barclays Municipal Bond Index | | | +8.72% | | | | +3.85% | | | | +4.62% | | | | +4.71%* | |
*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.
1 Returns 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(12b-1) fee.
Class A shares are sold with a maximumfront-end sales charge of 4.50%, and have an annual12b-1 fee of 0.25% of average daily net assets.
Performance for Class A shares, excluding sales charges, assumes that nofront-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 annual12b-1 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
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bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.
Funds that invest primarily in one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than geographically diversified funds.
Substantially all dividend income derived fromtax-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.
2 The 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 any12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale and dividend and 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) from exceeding 0.60% of the Fund’s average daily net assets during the period from Sept. 1, 2018 to Aug. 31, 2019.** 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.
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| Fund expense ratios | | Class A | | Class C | | Institutional Class |
Total annual operating expenses | | 0.94% | | 1.69% | | 0.69% |
(without fee waivers) | | | | | | |
Net expenses | | 0.85% | | 1.60% | | 0.60% |
(including fee waivers, if any) | | | | | | |
Type of waiver | | Contractual | | Contractual | | Contractual |
**The aggregate contractual waiver period covering this report is from Dec. 29, 2017 through Dec. 28, 2019.
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Performance summaries
DelawareTax-Free Minnesota Fund
Performance of a $10,000 investment1
Class A shares
Average annual total returns from Aug. 31, 2009 through Aug. 31, 2019
Institutional Class shares
Average annual total returns from Dec. 31, 2013 (inception date) through Aug. 31, 2019
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1 The “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, 2009, 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, 2009.
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, 2013, 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, 2013.
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 6 through 9.
The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment gradetax-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 classes will vary due to different charges and expenses.
| | | | | | | | | | | | | | |
| | | Nasdaq symbols | | CUSIPs | | | | | | | |
Class A | | DEFFX | | | 928918101 | | | | | | | | | |
Class C | | DMOCX | | | 928918408 | | | | | | | | | |
Institutional Class | | DMNIX | | | 928918705 | | | | | | | | | |
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| | |
| Performance summaries | | |
| DelawareTax-Free Minnesota Intermediate Fund | | August 31, 2019 |
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 800523-1918 or visiting delawarefunds.com/performance.
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| Fund and benchmark performance1,2 | | | Average annual total returns through August 31, 2019 | |
| | | 1 year | | | 5 years | | | 10 years | | | Lifetime | |
Class A (Est. Oct. 27, 1985) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +7.00% | | | | +2.89% | | | | +3.55% | | | | +4.73% | |
Including sales charge | | | +4.02% | | | | +2.32% | | | | +3.26% | | | | +4.64% | |
Class C (Est. May 4, 1994) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +6.09% | | | | +2.00% | | | | +2.68% | | | | +3.31% | |
Including sales charge | | | +5.09% | | | | +2.00% | | | | +2.68% | | | | +3.31% | |
Institutional Class (Est. Dec. 31, 2013) | �� | | | | | | | | | | | | | | | |
Excluding sales charge | | | +7.06% | | | | +3.02% | | | | n/a | | | | +3.70% | |
Including sales charge | | | +7.06% | | | | +3.02% | | | | n/a | | | | +3.70% | |
| Bloomberg Barclays 3–15 Year Blend Municipal Bond Index | | | +8.16% | | | | +3.42% | | | | +4.15% | | | | +4.06%* | |
*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
1 Returns 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 11. 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(12b-1) fee.
Class A shares are sold with a maximumfront-end sales charge of 2.75%, and have an annual12b-1 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, 2018 through Aug. 31, 2019.** Performance for Class A shares, excluding sales charges, assumes that nofront-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 annual12b-1 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
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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.
Funds that invest primarily in one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than geographically diversified funds.
Substantially all dividend income derived fromtax-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.
2 The 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 any12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale and dividend and 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) from exceeding 0.56% of the Fund’s average daily net assets during the period from Sept. 1, 2018 to Aug. 31, 2019.*** 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 | | 1.00% | | 1.75% | | 0.75% |
(without fee waivers) | | | | | | |
Net expenses | | 0.71% | | 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, 2017 through Dec. 28, 2019.
*** The aggregate contractual waiver period covering this report is from April 1, 2018 through Dec. 28, 2019.
11
Performance summaries
DelawareTax-Free Minnesota Intermediate Fund
Performance of a $10,000 investment1
Class A shares
Average annual total returns from Aug. 31, 2009 through Aug. 31, 2019
Institutional Class shares
Average annual total returns from Dec. 31, 2013 (inception date) through Aug. 31, 2019
12
1 The “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, 2009, 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, 2009.
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, 2013, 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, 2013.
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 11. Please note additional details on pages 10 through 13.
The Bloomberg Barclays 3–15 Year Blend Municipal Bond Index measures the total return performance of investment grade, UStax-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 classes will vary due to different charges and expenses.
| | | | | | | | | | | | | | |
| | | Nasdaq symbols | | CUSIPs | | | | | | | |
Class A | | DXCCX | | | 928930106 | | | | | | | | | |
Class C | | DVSCX | | | 928930205 | | | | | | | | | |
Institutional Class | | DMIIX | | | 92910U109 | | | | | | | | | |
13
| | |
| Performance summaries | | |
| Delaware Minnesota High-Yield Municipal Bond Fund | | August 31, 2019 |
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 800523-1918 or visiting delawarefunds.com/performance.
| | | | | | | | | | | | | | | | |
| Fund and benchmark performance1,2 | | | Average annual total returns through August 31, 2019 | |
| | | 1 year | | | 5 years | | | 10 years | | | Lifetime | |
Class A (Est. June 4, 1996) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +8.33% | | | | +3.84% | | | | +4.89% | | | | +5.10% | |
Including sales charge | | | +3.48% | | | | +2.90% | | | | +4.40% | | | | +4.89% | |
Class C (Est. June 7, 1996) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +7.51% | | | | +3.07% | | | | +4.10% | | | | +4.32% | |
Including sales charge | | | +6.51% | | | | +3.07% | | | | +4.10% | | | | +4.32% | |
Institutional Class (Est. Dec. 31, 2013) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +8.50% | | | | +4.09% | | | | n/a | | | | +5.05% | |
Including sales charge | | | +8.50% | | | | +4.09% | | | | n/a | | | | +5.05% | |
| Bloomberg Barclays Municipal Bond Index | | | +8.72% | | | | +3.85% | | | | +4.62% | | | | +4.71%* | |
*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
1 Returns 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 15. 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(12b-1) fee.
Class A shares are sold with a maximumfront-end sales charge of 4.50%, and have an annual12b-1 fee of 0.25% of average daily net assets.
Performance for Class A shares, excluding sales charges, assumes that nofront-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 annual12b-1 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
14
bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.
Funds that invest primarily in one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than geographically diversified funds.
Substantially all dividend income derived fromtax-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.
2 The 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 any12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale and dividend and 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) from exceeding 0.64% of the Fund’s average daily net assets during the period from Sept. 1, 2018 to Aug. 31, 2019.** 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 | | 0.99% | | 1.74% | | 0.74% |
(without fee waivers) | | | | | | |
Net expenses | | 0.89% | | 1.64% | | 0.64% |
(including fee waivers, if any) | | | | | | |
Type of waiver | | Contractual | | Contractual | | Contractual |
**The aggregate contractual waiver period covering this report is from Dec. 29, 2017 through Dec. 28, 2019.
15
Performance summaries
Delaware Minnesota High-Yield Municipal Bond Fund
Performance of a $10,000 investment1
Class A shares
Average annual total returns from Aug. 31, 2009 through Aug. 31, 2019
Institutional Class shares
Average annual total returns from Dec. 31, 2013 (inception date) through Aug. 31, 2019
16
1 The “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, 2009, 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, 2009.
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, 2013, 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, 2013.
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 15. Please note additional details on pages 14 through 17.
The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment gradetax-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 classes will vary due to different charges and expenses.
| | | | | | | | | | | | | | |
| | | Nasdaq symbols | | CUSIPs | | | | | | | |
Class A | | DVMHX | | | 928928316 | | | | | | | | | |
Class C | | DVMMX | | | 928928282 | | | | | | | | | |
Institutional Class | | DMHIX | | | 928928175 | | | | | | | | | |
17
Disclosure of Fund expenses
For thesix-month period from March 1, 2019 to August 31, 2019 (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 entiresix-month period from March 1, 2019 to Aug. 31, 2019.
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 and assume reinvestment of all dividends and distributions.
18
DelawareTax-Free Minnesota Fund
Expense analysis of an investment of $1,000
| | | | | | | | | | | | | | | | |
| | | Beginning Account Value 3/1/19 | | | Ending Account Value 8/31/19 | | | Annualized Expense Ratio | | | Expenses Paid During Period 3/1/19 to 8/31/19* | |
Actual Fund return† | | | | | | | | | | | | | | | | |
Class A | | | $1,000.00 | | | | $1,058.60 | | | | 0.85% | | | | $4.41 | |
Class C | | | 1,000.00 | | | | 1,054.50 | | | | 1.60% | | | | 8.29 | |
Institutional Class | | | 1,000.00 | | | | 1,060.80 | | | | 0.60% | | | | 3.12 | |
|
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 | |
DelawareTax-Free Minnesota Intermediate Fund
Expense analysis of an investment of $1,000
| | | | | | | | | | | | | | | | |
| | | Beginning Account Value 3/1/19 | | | Ending Account Value 8/31/19 | | | Annualized Expense Ratio | | | Expenses Paid During Period 3/1/19 to 8/31/19* | |
Actual Fund return† | | | | | | | | | | | | | | | | |
Class A | | | $1,000.00 | | | | $1,051.50 | | | | 0.71% | | | | $3.67 | |
Class C | | | 1,000.00 | | | | 1,047.00 | | | | 1.56% | | | | 8.05 | |
Institutional Class | | | 1,000.00 | | | | 1,052.30 | | | | 0.56% | | | | 2.90 | |
Hypothetical 5% return(5% return before expenses) | | | | | | | | | | | | | |
Class A | | | $1,000.00 | | | | $1,021.63 | | | | 0.71% | | | | $3.62 | |
Class C | | | 1,000.00 | | | | 1,017.34 | | | | 1.56% | | | | 7.93 | |
Institutional Class | | | 1,000.00 | | | | 1,022.38 | | | | 0.56% | | | | 2.85 | |
19
Disclosure of Fund expenses
For thesix-month period from March 1, 2019 to August 31, 2019 (Unaudited)
Delaware Minnesota High-Yield Municipal Bond Fund
Expense analysis of an investment of $1,000
| | | | | | | | | | | | | | | | |
| | | Beginning Account Value 3/1/19 | | | Ending Account Value 8/31/19 | | | Annualized Expense Ratio | | | Expenses Paid During Period 3/1/19 to 8/31/19* | |
Actual Fund return† | | | | | | | | | | | | | | | | |
Class A | | | $1,000.00 | | | | $1,066.00 | | | | 0.89% | | | | $4.63 | |
Class C | | | 1,000.00 | | | | 1,061.90 | | | | 1.64% | | | | 8.52 | |
Institutional Class | | | 1,000.00 | | | | 1,067.30 | | | | 0.64% | | | | 3.33 | |
Hypothetical 5% return(5% return before expenses) | |
Class A | | | $1,000.00 | | | | $1,020.72 | | | | 0.89% | | | | $4.53 | |
Class C | | | 1,000.00 | | | | 1,016.94 | | | | 1.64% | | | | 8.34 | |
Institutional Class | | | 1,000.00 | | | | 1,021.98 | | | | 0.64% | | | | 3.26 | |
*“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 theone-half year period).
† Because actual returns reflect only the most recentsix-month period, the returns shown may differ significantly from fiscal year returns.
20
Security type / sector / state / territory allocations
| | |
| DelawareTax-Free Minnesota Fund | | As of August 31, 2019 (Unaudited) |
Sector designations may be different than the sector designations presented in other fund materials.
| | | | | | | | |
Security type / sector | | Percentage of net assets | | | | |
Municipal Bonds* | | | 103.05% | | | | | |
Corporate Revenue Bond | | | 0.62% | | | | | |
Education Revenue Bonds | | | 18.51% | | | | | |
Electric Revenue Bonds | | | 9.51% | | | | | |
Healthcare Revenue Bonds | | | 27.75% | | | | | |
Housing Revenue Bonds | | | 0.41% | | | | | |
Lease Revenue Bonds | | | 2.79% | | | | | |
Local General Obligation Bonds | | | 9.79% | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds | | | 7.78% | | | | | |
Special Tax Revenue Bonds | | | 3.03% | | | | | |
State General Obligation Bonds | | | 12.44% | | | | | |
Transportation Revenue Bonds | | | 7.35% | | | | | |
Water & Sewer Revenue Bonds | | | 3.07% | | | | | |
Short-Term Investments | | | 1.53% | | | | | |
Total Value of Securities | | | 104.58% | | | | | |
Liabilities Net of Receivables and Other Assets | | | (4.58%) | | | | | |
Total Net Assets | | | 100.00% | | | | | |
* As of the date of this report, DelawareTax-Free Minnesota Fund held bonds issued by or on behalf of territories and the states of the US as follows:
| | | | | | | | |
State / territory | | Percentage of net assets | | | | |
Guam | | | 0.38% | | | | | |
Minnesota | | | 101.78% | | | | | |
Puerto Rico | | | 2.06% | | | | | |
US Virgin Islands | | | 0.36% | | | | | |
Total Value of Securities | | | 104.58% | | | | | |
21
Security type / sector / state / territory allocations
| | |
| DelawareTax-Free Minnesota Intermediate Fund | | As of August 31, 2019 (Unaudited) |
Sector designations may be different than the sector designations presented in other fund materials.
| | | | | | | | |
Security type / sector | | Percentage of net assets | | | | |
Municipal Bonds* | | | 97.85% | | | | | |
Corporate Revenue Bond | | | 0.32% | | | | | |
Education Revenue Bonds | | | 15.20% | | | | | |
Electric Revenue Bonds | | | 10.09% | | | | | |
Healthcare Revenue Bonds | | | 31.14% | | | | | |
Housing Revenue Bond | | | 0.38% | | | | | |
Lease Revenue Bonds | | | 5.19% | | | | | |
Local General Obligation Bonds | | | 7.39% | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds | | | 7.08% | | | | | |
Special Tax Revenue Bonds | | | 2.26% | | | | | |
State General Obligation Bonds | | | 9.08% | | | | | |
Transportation Revenue Bonds | | | 8.04% | | | | | |
Water & Sewer Revenue Bonds | | | 1.68% | | | | | |
Short-Term Investments | | | 2.16% | | | | | |
Total Value of Securities | | | 100.01% | | | | | |
Liabilities Net of Receivables and Other Assets | | | (0.01%) | | | | | |
Total Net Assets | | | 100.00% | | | | | |
* As of the date of this report, DelawareTax-Free Minnesota 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 | | | | |
Minnesota | | | 98.48% | | | | | |
Puerto Rico | | | 1.53% | | | | | |
Total Value of Securities | | | 100.01% | | | | | |
22
Security type / sector / state / territory allocations
| | |
Delaware Minnesota High-Yield Municipal Bond Fund | | As of August 31, 2019 (Unaudited) |
Sector designations may be different than the sector designations presented in other fund materials.
| | | | | | | | |
Security type / sector | | Percentage of net assets | | | | |
Municipal Bonds* | | | 98.96% | | | | | |
Corporate Revenue Bond | | | 0.98% | | | | | |
Education Revenue Bonds | | | 19.80% | | | | | |
Electric Revenue Bonds | | | 7.78% | | | | | |
Healthcare Revenue Bonds | | | 33.97% | | | | | |
Housing Revenue Bonds | | | 1.81% | | | | | |
Lease Revenue Bonds | | | 2.39% | | | | | |
Local General Obligation Bonds | | | 7.50% | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds | | | 5.38% | | | | | |
Special Tax Revenue Bonds | | | 5.02% | | | | | |
State General Obligation Bonds | | | 8.43% | | | | | |
Transportation Revenue Bonds | | | 4.40% | | | | | |
Water & Sewer Revenue Bonds | | | 1.50% | | | | | |
Short-Term Investments | | | 1.59% | | | | | |
Total Value of Securities | | | 100.55% | | | | | |
Liabilities Net of Receivables and Other Assets | | | (0.55%) | | | | | |
Total Net Assets | | | 100.00% | | | | | |
* As of the date of this report, Delaware Minnesota 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 | | | | |
Guam | | | 0.34% | | | | | |
Minnesota | | | 96.22% | | | | | |
Puerto Rico | | | 3.99% | | | | | |
Total Value of Securities | | | 100.55% | | | | | |
23
Schedules of Investments
| | | | |
| DelawareTax-Free Minnesota Fund | | August 31, 2019 |
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds – 103.05% | | | | | | | | |
Corporate Revenue Bond – 0.62% | | | | | | | | |
St. Paul Port Authority Solid Waste Disposal Revenue | | | | | | | | |
(Gerdau St. Paul Steel Mill Project) | | | | | | | | |
Series 7 144A 4.50% 10/1/37 (AMT)# | | | 3,565,000 | | | $ | 3,621,149 | |
| | | | | | | | |
| | | | | | | 3,621,149 | |
| | | | | | | | |
Education Revenue Bonds – 18.51% | | | | | | | | |
Bethel Charter School Lease Revenue | | | | | | | | |
(Spectrum High School Project) | | | | | | | | |
Series A 4.00% 7/1/32 | | | 840,000 | | | | 906,175 | |
Series A 4.25% 7/1/47 | | | 1,550,000 | | | | 1,652,021 | |
Series A 4.375% 7/1/52 | | | 400,000 | | | | 428,412 | |
Brooklyn Park Charter School Lease Revenue | | | | | | | | |
(Prairie Seeds Academy Project) | | | | | | | | |
Series A 5.00% 3/1/34 | | | 2,260,000 | | | | 2,348,976 | |
Series A 5.00% 3/1/39 | | | 385,000 | | | | 395,969 | |
Cologne Charter School Lease Revenue | | | | | | | | |
(Cologne Academy Project) | | | | | | | | |
Series A 5.00% 7/1/34 | | | 250,000 | | | | 268,457 | |
Series A 5.00% 7/1/45 | | | 1,390,000 | | | | 1,470,995 | |
Deephaven Charter School Lease Revenue | | | | | | | | |
(Eagle Ridge Academy Project) Series A 5.50% 7/1/50 | | | 2,000,000 | | | | 2,199,960 | |
Duluth Housing & Redevelopment Authority Revenue | | | | | | | | |
(Duluth Public Schools Academy Project) | | | | | | | | |
Series A 5.00% 11/1/38 | | | 700,000 | | | | 778,281 | |
Series A 5.00% 11/1/48 | | | 2,800,000 | | | | 3,075,604 | |
Duluth Independent School District No. 709 Certificates of Participation | | | | | | | | |
Series B 5.00% 2/1/28 | | | 350,000 | | | | 441,529 | |
Forest Lake Charter School Lease Revenue Fund | | | | | | | | |
(Lakes International Language Academy Project) | | | | | | | | |
Series A 5.25% 8/1/43 | | | 400,000 | | | | 445,808 | |
Series A 5.375% 8/1/50 | | | 1,690,000 | | | | 1,889,217 | |
Series A 5.50% 8/1/36 | | | 580,000 | | | | 625,808 | |
Series A 5.75% 8/1/44 | | | 1,190,000 | | | | 1,283,177 | |
Ham Lake Charter School Lease Revenue | | | | | | | | |
(Davinci Academy Project) | | | | | | | | |
Series A 5.00% 7/1/36 | | | 765,000 | | | | 819,950 | |
Series A 5.00% 7/1/47 | | | 2,290,000 | | | | 2,426,873 | |
Hugo Charter School Lease Revenue | | | | | | | | |
(Noble Academy Project) | | | | | | | | |
Series A 5.00% 7/1/34 | | | 580,000 | | | | 619,620 | |
Series A 5.00% 7/1/44 | | | 1,770,000 | | | | 1,869,934 | |
24
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Education Revenue Bonds(continued) | | | | | | | | |
Minneapolis Charter School Lease Revenue | | | | | | | | |
(Hiawatha Academies Project) | | | | | | | | |
Series A 5.00% 7/1/31 | | | 885,000 | | | $ | 970,845 | |
Series A 5.00% 7/1/47 | | | 2,300,000 | | | | 2,469,441 | |
Minneapolis Student Housing Revenue (Riverton Community Housing Project) | | | | | | | | |
5.25% 8/1/39 | | | 470,000 | | | | 506,345 | |
5.50% 8/1/49 | | | 2,260,000 | | | | 2,449,433 | |
Minnesota Colleges & Universities Revenue Fund Series A 5.00% 10/1/26 | | | 4,990,000 | | | | 6,271,681 | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(Bethel University) | | | | | | | | |
5.00% 5/1/32 | | | 1,375,000 | | | | 1,639,124 | |
5.00% 5/1/37 | | | 1,250,000 | | | | 1,469,563 | |
5.00% 5/1/47 | | | 250,000 | | | | 289,045 | |
(Carleton College) | | | | | | | | |
4.00% 3/1/35 | | | 1,000,000 | | | | 1,146,610 | |
4.00% 3/1/36 | | | 415,000 | | | | 474,648 | |
5.00% 3/1/44 | | | 2,085,000 | | | | 2,534,463 | |
(College of St. Benedict) Series8-K 4.00% 3/1/43 | | | 1,000,000 | | | | 1,067,150 | |
(College of St. Scholastica) | | | | | | | | |
4.00% 12/1/29 | | | 280,000 | | | | 330,663 | |
4.00% 12/1/30 | | | 290,000 | | | | 339,425 | |
4.00% 12/1/33 | | | 500,000 | | | | 571,820 | |
4.00% 12/1/34 | | | 500,000 | | | | 569,220 | |
4.00% 12/1/40 | | | 1,200,000 | | | | 1,347,072 | |
(Gustavus Adolphus College) 5.00% 10/1/47 | | | 5,600,000 | | | | 6,625,696 | |
(St. Catherine University) | | | | | | | | |
Series A 4.00% 10/1/36 | | | 925,000 | | | | 1,017,111 | |
Series A 5.00% 10/1/35 | | | 875,000 | | | | 1,058,339 | |
Series A 5.00% 10/1/45 | | | 2,120,000 | | | | 2,512,645 | |
(St. John’s University) | | | | | | | | |
Series8-I 5.00% 10/1/32 | | | 500,000 | | | | 592,970 | |
Series8-I 5.00% 10/1/33 | | | 250,000 | | | | 295,825 | |
(St. Olaf College) | | | | | | | | |
Series8-G 5.00% 12/1/31 | | | 670,000 | | | | 804,824 | |
Series8-G 5.00% 12/1/32 | | | 670,000 | | | | 803,719 | |
Series8-N 4.00% 10/1/35 | | | 500,000 | | | | 568,315 | |
(St. Scholastica College) Series7-J 6.30% 12/1/40 | | | 1,800,000 | | | | 1,822,446 | |
(Trustees of The Hamline University) | | | | | | | | |
Series B 5.00% 10/1/37 | | | 955,000 | | | | 1,101,841 | |
25
DelawareTax-Free Minnesota Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Education Revenue Bonds(continued) | | | | | | | | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(Trustees of The Hamline University) | | | | | | | | |
Series B 5.00% 10/1/38 | | | 1,000,000 | | | $ | 1,150,760 | |
Series B 5.00% 10/1/39 | | | 170,000 | | | | 195,362 | |
Series B 5.00% 10/1/40 | | | 625,000 | | | | 716,881 | |
Series B 5.00% 10/1/47 | | | 1,060,000 | | | | 1,207,064 | |
(University of St. Thomas) | | | | | | | | |
4.00% 10/1/36 | | | 700,000 | | | | 822,815 | |
4.00% 10/1/37 | | | 750,000 | | | | 878,347 | |
4.00% 10/1/44 | | | 1,255,000 | | | | 1,439,949 | |
5.00% 10/1/40 | | | 500,000 | | | | 630,375 | |
Series8-L 5.00% 4/1/35 | | | 1,250,000 | | | | 1,494,813 | |
Series A 4.00% 10/1/34 | | | 400,000 | | | | 456,012 | |
Series A 4.00% 10/1/36 | | | 500,000 | | | | 567,740 | |
Otsego Charter School Lease Revenue | | | | | | | | |
(Kaleidoscope Charter School) | | | | | | | | |
Series A 5.00% 9/1/34 | | | 520,000 | | | | 555,682 | |
Series A 5.00% 9/1/44 | | | 1,165,000 | | | | 1,226,931 | |
Rice County Educational Facilities Revenue | | | | | | | | |
(Shattuck-St. Mary’s School) Series A 144A 5.00% 8/1/22 # | | | 2,855,000 | | | | 3,022,360 | |
St. Cloud Charter School Lease Revenue | | | | | | | | |
(Stride Academy Project) Series A 5.00% 4/1/46 | | | 875,000 | | | | 598,824 | |
St. Paul Housing & Redevelopment Authority Charter School Lease Revenue | | | | | | | | |
(Academia Cesar Chavez School Project) Series A 5.25% 7/1/50 | | | 1,945,000 | | | | 2,066,990 | |
(Great River School Project) | | | | | | | | |
Series A 144A 4.75% 7/1/29 # | | | 300,000 | | | | 323,544 | |
Series A 144A 5.50% 7/1/52 # | | | 735,000 | | | | 795,571 | |
(Nova Classical Academy Project) | | | | | | | | |
Series A 4.00% 9/1/36 | | | 500,000 | | | | 531,695 | |
Series A 4.125% 9/1/47 | | | 1,750,000 | | | | 1,843,853 | |
(Twin Cities Academy Project) Series A 5.30% 7/1/45 | | | 1,440,000 | | | | 1,550,275 | |
University of Minnesota | | | | | | | | |
Series A 5.00% 4/1/34 | | | 925,000 | | | | 1,127,418 | |
Series A 5.00% 9/1/34 | | | 2,625,000 | | | | 3,307,343 | |
Series A 5.00% 4/1/35 | | | 3,175,000 | | | | 3,860,483 | |
Series A 5.00% 4/1/36 | | | 2,650,000 | | | | 3,215,086 | |
Series A 5.00% 4/1/37 | | | 1,125,000 | | | | 1,361,666 | |
Series A 5.00% 9/1/40 | | | 1,560,000 | | | | 1,936,459 | |
Series A 5.00% 9/1/41 | | | 1,750,000 | | | | 2,168,967 | |
26
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Education Revenue Bonds(continued) | | | | | | | | |
University of Minnesota | | | | | | | | |
Series A 5.00% 4/1/44 | | | 3,000,000 | | | $ | 3,813,420 | |
| | | | | | | | |
| | | | | | | 108,463,730 | |
| | | | | | | | |
Electric Revenue Bonds – 9.51% | | | | | | | | |
Chaska Electric Revenue | | | | | | | | |
(Generating Facilities) Series A 5.00% 10/1/30 | | | 1,150,000 | | | | 1,377,987 | |
Minnesota Municipal Power Agency Electric Revenue | | | | | | | | |
4.00% 10/1/41 | | | 1,000,000 | | | | 1,114,160 | |
5.00% 10/1/29 | | | 395,000 | | | | 465,472 | |
5.00% 10/1/30 | | | 500,000 | | | | 587,990 | |
5.00% 10/1/33 | | | 1,205,000 | | | | 1,412,212 | |
5.00% 10/1/47 | | | 2,000,000 | | | | 2,387,780 | |
Series A 5.00% 10/1/30 | | | 1,060,000 | | | | 1,246,539 | |
Series A 5.00% 10/1/34 | | | 750,000 | | | | 878,400 | |
Series A 5.00% 10/1/35 | | | 1,525,000 | | | | 1,785,287 | |
Northern Municipal Power Agency Electric System Revenue | | | | | | | | |
5.00% 1/1/27 | | | 540,000 | | | | 657,007 | |
5.00% 1/1/28 | | | 350,000 | | | | 424,077 | |
5.00% 1/1/28 | | | 210,000 | | | | 261,101 | |
5.00% 1/1/29 | | | 585,000 | | | | 706,077 | |
5.00% 1/1/29 | | | 220,000 | | | | 272,334 | |
5.00% 1/1/30 | | | 520,000 | | | | 624,224 | |
5.00% 1/1/31 | | | 200,000 | | | | 244,602 | |
5.00% 1/1/32 | | | 210,000 | | | | 255,238 | |
5.00% 1/1/35 | | | 160,000 | | | | 192,610 | |
5.00% 1/1/36 | | | 180,000 | | | | 216,157 | |
5.00% 1/1/41 | | | 400,000 | | | | 476,016 | |
Series A 5.00% 1/1/25 | | | 125,000 | | | | 139,657 | |
Series A 5.00% 1/1/26 | | | 425,000 | | | | 473,658 | |
Series A 5.00% 1/1/31 | | | 520,000 | | | | 576,779 | |
Puerto Rico Electric Power Authority Revenue | | | | | | | | |
Series CCC 5.25% 7/1/27 ‡ | | | 1,255,000 | | | | 1,007,137 | |
Series WW 5.00% 7/1/28 ‡ | | | 1,775,000 | | | | 1,420,000 | |
Rochester Electric Utility Revenue | | | | | | | | |
Series A 5.00% 12/1/42 | | | 1,395,000 | | | | 1,679,636 | |
Series A 5.00% 12/1/47 | | | 2,265,000 | | | | 2,718,272 | |
Series B 5.00% 12/1/27 | | | 295,000 | | | | 339,734 | |
Series B 5.00% 12/1/28 | | | 275,000 | | | | 315,719 | |
Series B 5.00% 12/1/31 | | | 1,365,000 | | | | 1,562,870 | |
Series B 5.00% 12/1/33 | | | 300,000 | | | | 344,742 | |
27
DelawareTax-Free Minnesota Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Electric Revenue Bonds(continued) | | | | | | | | |
Southern Minnesota Municipal Power Agency Revenue | | | | | | | | |
Series A 5.00% 1/1/41 | | | 1,310,000 | | | $ | 1,545,053 | |
Series A 5.00% 1/1/42 | | | 1,500,000 | | | | 1,840,710 | |
Series A 5.00% 1/1/46 | | | 2,000,000 | | | | 2,353,220 | |
Series A 5.00% 1/1/47 | | | 3,130,000 | | | | 3,832,967 | |
Southern Minnesota Municipal Power Agency Revenue Capital Appreciation Series A 6.70% 1/1/25 (NATL)^ | | | 5,000,000 | | | | 4,631,050 | |
St. Paul Housing & Redevelopment Energy Revenue | | | | | | | | |
Series A 4.00% 10/1/30 | | | 1,235,000 | | | | 1,410,815 | |
Series A 4.00% 10/1/31 | | | 885,000 | | | | 1,002,740 | |
Series A 4.00% 10/1/33 | | | 365,000 | | | | 411,034 | |
Western Minnesota Municipal Power Agency Revenue | | | | | | | | |
Series A 5.00% 1/1/34 | | | 4,000,000 | | | | 4,590,960 | |
Series A 5.00% 1/1/40 | | | 3,935,000 | | | | 4,495,462 | |
Series A 5.00% 1/1/46 | | | 3,000,000 | | | | 3,417,540 | |
| | | | | | | | |
| | | | | | | 55,695,025 | |
| | | | | | | | |
Healthcare Revenue Bonds – 27.75% | | | | | | | | |
Anoka Healthcare & Housing Facilities Revenue | | | | | | | | |
(The Homestead at Anoka Project) | | | | | | | | |
5.125% 11/1/49 | | | 1,100,000 | | | | 1,166,572 | |
5.375% 11/1/34 | | | 320,000 | | | | 349,024 | |
Apple Valley Senior Housing Revenue | | | | | | | | |
(PHS Apple Valley Senior Housing, Inc. - Orchard Path Project) | | | | | | | | |
5.00% 9/1/43 | | | 465,000 | | | | 505,241 | |
5.00% 9/1/58 | | | 3,220,000 | | | | 3,479,661 | |
Apple Valley Senior Living Revenue | | | | | | | | |
(Senior Living LLC Project) | | | | | | | | |
2nd Tier Series B 5.00% 1/1/47 | | | 1,725,000 | | | | 1,757,033 | |
2nd Tier Series B 5.25% 1/1/37 | | | 510,000 | | | | 532,950 | |
4th Tier Series D 7.00% 1/1/37 | | | 1,665,000 | | | | 1,721,510 | |
4th Tier Series D 7.25% 1/1/52 | | | 2,500,000 | | | | 2,606,100 | |
Bethel Housing & Health Care Facilities Revenue | | | | | | | | |
(Benedictine Health System – St. Peter Communities Project) Series A 5.50% 12/1/48 | | | 2,350,000 | | | | 2,490,225 | |
Bethel Senior Housing Revenue | | | | | | | | |
(The Lodge at The Lakes at Stillwater Project) | | | | | | | | |
5.00% 6/1/38 | | | 450,000 | | | | 479,885 | |
5.00% 6/1/48 | | | 1,000,000 | | | | 1,059,520 | |
5.00% 6/1/53 | | | 600,000 | | | | 633,552 | |
28
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Healthcare Revenue Bonds(continued) | | | | | | | | |
Center City Health Care Facilities Revenue | | | | | | | | |
(Hazelden Betty Ford Foundation Project) | | | | | | | | |
4.00% 11/1/34 | | | 500,000 | | | $ | 572,460 | |
4.00% 11/1/41 | | | 800,000 | | | | 897,464 | |
5.00% 11/1/26 | | | 500,000 | | | | 581,495 | |
Crookston Health Care Facilities Revenue | | | | | | | | |
(Riverview Health Project) | | | | | | | | |
5.00% 5/1/38 | | | 100,000 | | | | 112,415 | |
5.00% 5/1/44 | | | 1,500,000 | | | | 1,663,260 | |
5.00% 5/1/51 | | | 1,585,000 | | | | 1,749,095 | |
Dakota County Community Development Agency Senior Housing Revenue | | | | | | | | |
(Walker Highview Hills Project) | | | | | | | | |
Series A 144A 5.00% 8/1/36 # | | | 280,000 | | | | 293,247 | |
Series A 144A 5.00% 8/1/46 # | | | 2,380,000 | | | | 2,473,153 | |
Deephaven Housing & Healthcare Revenue | | | | | | | | |
(St. Therese Senior Living Project) | | | | | | | | |
Series A 5.00% 4/1/38 | | | 730,000 | | | | 749,177 | |
Series A 5.00% 4/1/40 | | | 705,000 | | | | 723,048 | |
Series A 5.00% 4/1/48 | | | 315,000 | | | | 322,330 | |
Duluth Economic Development Authority | | | | | | | | |
(Essentia Health Obligated Group) Series A 5.00% 2/15/48 | | | 1,850,000 | | | | 2,198,743 | |
(St. Luke’s Hospital of Duluth Obligated Group) | | | | | | | | |
5.75% 6/15/32 | | | 1,850,000 | | | | 2,035,129 | |
6.00% 6/15/39 | | | 3,570,000 | | | | 3,961,201 | |
Glencoe Health Care Facilities Revenue | | | | | | | | |
(Glencoe Regional Health Services Project) | | | | | | | | |
4.00% 4/1/24 | | | 500,000 | | | | 526,995 | |
4.00% 4/1/25 | | | 660,000 | | | | 695,594 | |
4.00% 4/1/31 | | | 60,000 | | | | 62,795 | |
Hayward Health Care Facilities Revenue | | | | | | | | |
(American Baptist Homes Midwest Obligated Group) | | | | | | | | |
5.375% 8/1/34 | | | 660,000 | | | | 694,643 | |
5.75% 2/1/44 | | | 500,000 | | | | 527,905 | |
(St. John’s Lutheran Home of Albert Lea Project) 5.375% 10/1/44 | | | 575,000 | | | | 601,829 | |
Maple Grove Health Care Facilities Revenue | | | | | | | | |
(Maple Grove Hospital Corporation) | | | | | | | | |
4.00% 5/1/37 | | | 2,000,000 | | | | 2,216,940 | |
5.00% 5/1/27 | | | 1,400,000 | | | | 1,746,640 | |
5.00% 5/1/29 | | | 1,000,000 | | | | 1,232,540 | |
29
DelawareTax-Free Minnesota Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Healthcare Revenue Bonds(continued) | | | | | | | | |
Maple Grove Health Care Facilities Revenue | | | | | | | | |
(Maple Grove Hospital Corporation) | | | | | | | | |
5.00% 5/1/30 | | | 850,000 | | | $ | 1,042,746 | |
5.00% 5/1/31 | | | 500,000 | | | | 609,705 | |
5.00% 5/1/32 | | | 500,000 | | | | 607,015 | |
(North Memorial Health Care) | | | | | | | | |
5.00% 9/1/31 | | | 1,000,000 | | | | 1,179,110 | |
5.00% 9/1/32 | | | 1,000,000 | | | | 1,175,600 | |
Maple Plain Senior Housing & Health Care Revenue | | | | | | | | |
(Haven Homes Incorporate Project) 5.00% 7/1/54 | | | 3,500,000 | | | | 3,723,300 | |
Minneapolis Health Care System Revenue | | | | | | | | |
(Fairview Health Services) | | | | | | | | |
Series A 4.00% 11/15/48 | | | 5,600,000 | | | | 6,265,168 | |
Series A 5.00% 11/15/33 | | | 500,000 | | | | 595,145 | |
Series A 5.00% 11/15/34 | | | 500,000 | | | | 593,735 | |
Series A 5.00% 11/15/44 | | | 1,000,000 | | | | 1,170,140 | |
Series A 5.00% 11/15/49 | | | 3,475,000 | | | | 4,223,167 | |
Minneapolis Senior Housing & Healthcare Revenue | | | | | | | | |
(Ecumen-Abiitan Mill City Project) | | | | | | | | |
5.00% 11/1/35 | | | 500,000 | | | | 528,690 | |
5.25% 11/1/45 | | | 1,950,000 | | | | 2,055,846 | |
5.375% 11/1/50 | | | 455,000 | | | | 480,830 | |
Minneapolis – St. Paul Housing & Redevelopment Authority | | | | | | | | |
Health Care Facilities Revenue | | | | | | | | |
(Allina Health System) Series A 5.00% 11/15/28 | | | 1,550,000 | | | | 1,951,481 | |
(Children’s Health Care) Series A 5.25% 8/15/35 | | | 2,085,000 | | | | 2,160,665 | |
Minnesota Agricultural & Economic Development Board Revenue | | | | | | | | |
(Essenthia Health Obligated Group) | | | | | | | | |
SeriesC-1 5.00% 2/15/30 (AGC) | | | 5,725,000 | | | | 5,808,471 | |
SeriesC-1 5.25% 2/15/23 (AGC) | | | 5,000,000 | | | | 5,096,350 | |
SeriesC-1 5.50% 2/15/25 (AGC) | | | 5,120,000 | | | | 5,218,560 | |
Red Wing Senior Housing | | | | | | | | |
(Deer Crest Project) | | | | | | | | |
Series A 5.00% 11/1/27 | | | 430,000 | | | | 445,355 | |
Series A 5.00% 11/1/32 | | | 330,000 | | | | 341,326 | |
Series A 5.00% 11/1/42 | | | 1,250,000 | | | | 1,291,000 | |
Rochester Health Care & Housing Revenue | | | | | | | | |
(The Homestead at Rochester Project) Series A 6.875% 12/1/48 | | | 2,980,000 | | | | 3,271,951 | |
30
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds (continued) | | | | | | | | |
Healthcare Revenue Bonds(continued) | | | | | | | | |
Rochester Health Care Facilities Revenue | | | | | | | | |
(Mayo Clinic) 4.00% 11/15/41 | | | 4,515,000 | | | $ | 4,731,585 | |
Series D Remarketing 5.00% 11/15/38 | | | 6,405,000 | | | | 6,549,817 | |
(Olmsted Medical Center Project) | | | | | | | | |
5.00% 7/1/24 | | | 295,000 | | | | 334,751 | |
5.00% 7/1/33 | | | 650,000 | | | | 718,380 | |
5.875% 7/1/30 | | | 1,850,000 | | | | 1,915,915 | |
Sartell Health Care Facilities Revenue | | | | | | | | |
(Country Manor Campus Project) | | | | | | | | |
Series A 5.25% 9/1/27 | | | 1,280,000 | | | | 1,395,930 | |
Series A 5.30% 9/1/37 | | | 1,200,000 | | | | 1,317,792 | |
Sauk Rapids Health Care Housing Facilities Revenue | | | | | | | | |
(Good Shepherd Lutheran Home) 5.125% 1/1/39 | | | 1,350,000 | | | | 1,399,329 | |
Shakopee Health Care Facilities Revenue | | | | | | | | |
(St. Francis Regional Medical Center) | | | | | | | | |
4.00% 9/1/31 | | | 915,000 | | | | 991,549 | |
5.00% 9/1/24 | | | 575,000 | | | | 669,519 | |
5.00% 9/1/25 | | | 750,000 | | | | 874,365 | |
5.00% 9/1/26 | | | 575,000 | | | | 668,823 | |
5.00% 9/1/27 | | | 405,000 | | | | 469,804 | |
5.00% 9/1/28 | | | 425,000 | | | | 492,507 | |
5.00% 9/1/29 | | | 425,000 | | | | 491,313 | |
5.00% 9/1/34 | | | 730,000 | | | | 826,433 | |
St. Cloud Health Care Revenue | | | | | | | | |
(Centracare Health System Project) | | | | | | | | |
4.00% 5/1/49 | | | 4,315,000 | | | | 4,839,143 | |
5.00% 5/1/48 | | | 5,090,000 | | | | 6,287,321 | |
Series A 4.00% 5/1/37 | | | 965,000 | | | | 1,072,752 | |
Series A 5.00% 5/1/46 | | | 3,715,000 | | | | 4,383,849 | |
Unrefunded Balance 5.125% 5/1/30 | | | 740,000 | | | | 758,433 | |
St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Allina Health System) SeriesA-1 Unrefunded Balance 5.25% 11/15/29 | | | 2,825,000 | | | | 2,848,702 | |
(Fairview Health Services) | | | | | | | | |
Series A 4.00% 11/15/43 | | | 2,450,000 | | | | 2,733,343 | |
Series A 5.00% 11/15/47 | | | 1,560,000 | | | | 1,884,012 | |
(HealthPartners Obligated Group Project) | | | | | | | | |
Series A 5.00% 7/1/29 | | | 2,200,000 | | | | 2,609,882 | |
Series A 5.00% 7/1/32 | | | 3,000,000 | | | | 3,494,160 | |
Series A 5.00% 7/1/33 | | | 1,260,000 | | | | 1,461,411 | |
31
DelawareTax-Free Minnesota Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Healthcare Revenue Bonds(continued) | | | | | | | | |
St. Paul Housing & Redevelopment Authority Housing & Health Care Facilities Revenue | | | | | | | | |
(Episcopal Homes Project) 5.125% 5/1/48 | | | 3,100,000 | | | $ | 3,195,077 | |
St. Paul Housing & Redevelopment Authority Multifamily Housing Revenue | | | | | | | | |
(Marian Center Project) | | | | | | | | |
Series A 5.30% 11/1/30 | | | 500,000 | | | | 500,295 | |
Series A 5.375% 5/1/43 | | | 500,000 | | | | 500,150 | |
Wayzata Senior Housing Revenue | | | | | | | | |
(Folkestone Senior Living Community) | | | | | | | | |
3.75% 8/1/36 | | | 500,000 | | | | 518,485 | |
4.00% 8/1/44 | | | 800,000 | | | | 833,320 | |
5.00% 8/1/49 | | | 1,000,000 | | | | 1,106,450 | |
5.00% 8/1/54 | | | 875,000 | | | | 966,026 | |
West St. Paul Housing and Health Care Facilities Revenue | | | | | | | | |
(Walker Westwood Ridge Campus Project) | | | | | | | | |
4.50% 11/1/40 | | | 250,000 | | | | 261,475 | |
4.75% 11/1/52 | | | 750,000 | | | | 790,020 | |
Winona Health Care Facilities Revenue | | | | | | | | |
(Winona Health Obligation Group) | | | | | | | | |
4.50% 7/1/25 | | | 850,000 | | | | 882,496 | |
4.65% 7/1/26 | | | 540,000 | | | | 561,913 | |
Woodbury Housing & Redevelopment Authority Revenue | | | | | | | | |
(St. Therese of Woodbury) | | | | | | | | |
5.00% 12/1/34 | | | 500,000 | | | | 536,100 | |
5.125% 12/1/44 | | | 1,605,000 | | | | 1,703,547 | |
5.25% 12/1/49 | | | 750,000 | | | | 798,630 | |
| | | | | | | | |
| | | | | | | 162,629,531 | |
| | | | | | | | |
Housing Revenue Bonds – 0.41% | | | | | | | | |
Minnesota Housing Finance Agency Homeownership Finance (Mortgage-Backed Securities Program) | | | | | | | | |
Series D 4.70% 1/1/31 (GNMA) (FNMA) (FHLMC) | | | 965,000 | | | | 976,831 | |
Northwest Multi-County Housing & Redevelopment Authority | | | | | | | | |
(Pooled Housing Program) 5.50% 7/1/45 | | | 1,330,000 | | | | 1,428,979 | |
| | | | | | | | |
| | | | | | | 2,405,810 | |
| | | | | | | | |
Lease Revenue Bonds – 2.79% | | | | | | | | |
Minnesota General Fund Revenue Appropriations | | | | | | | | |
Series A 5.00% 6/1/38 | | | 1,250,000 | | | | 1,417,963 | |
Series A 5.00% 6/1/43 | | | 3,835,000 | | | | 4,341,680 | |
Series B 5.00% 3/1/28 | | | 2,500,000 | | | | 2,731,575 | |
32
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Lease Revenue Bonds(continued) | | | | | | | | |
Minnesota Housing Finance Agency | | | | | | | | |
(State Appropriation – Housing Infrastructure) | | | | | | | | |
Series C 5.00% 8/1/34 | | | 1,565,000 | | | $ | 1,829,047 | |
Series C 5.00% 8/1/35 | | | 1,645,000 | | | | 1,919,962 | |
University of Minnesota Special Purpose Revenue | | | | | | | | |
(State Supported Biomed Science Research Facilities Funding Project) | | | | | | | | |
Series A 5.00% 8/1/35 | | | 3,960,000 | | | | 4,093,294 | |
| | | | | | | | |
| | | | | | | 16,333,521 | |
| | | | | | | | |
Local General Obligation Bonds – 9.79% | | | | | | | | |
Brainerd Independent School District No. 181 | | | | | | | | |
(School Building) | | | | | | | | |
Series A 4.00% 2/1/38 | | | 1,500,000 | | | | 1,692,720 | |
Series A 4.00% 2/1/43 | | | 3,500,000 | | | | 3,911,390 | |
Burnsville-Eagan-Savage Independent School District No. 191 | | | | | | | | |
(Alternative Facilities) | | | | | | | | |
Series A 4.00% 2/1/28 | | | 920,000 | | | | 1,040,814 | |
Series A 4.00% 2/1/29 | | | 1,800,000 | | | | 2,033,226 | |
Chaska Independent School District No. 112 | | | | | | | | |
(School Building) Series A 5.00% 2/1/27 | | | 1,905,000 | | | | 2,351,227 | |
Duluth | | | | | | | | |
(DECC Improvement) | | | | | | | | |
Series A 5.00% 2/1/32 | | | 1,000,000 | | | | 1,212,030 | |
Series A 5.00% 2/1/33 | | | 3,585,000 | | | | 4,336,846 | |
Duluth Independent School District No. 709 | | | | | | | | |
Series A 4.00% 2/1/27 | | | 160,000 | | | | 181,293 | |
Series A 4.00% 2/1/28 | | | 1,250,000 | | | | 1,413,675 | |
Hennepin County | | | | | | | | |
Series A 5.00% 12/1/26 | | | 1,885,000 | | | | 2,398,022 | |
Series A 5.00% 12/1/36 | | | 940,000 | | | | 1,163,513 | |
Series A 5.00% 12/1/37 | | | 2,850,000 | | | | 3,597,527 | |
Series A 5.00% 12/1/37 | | | 2,645,000 | | | | 3,265,411 | |
Series A 5.00% 12/1/38 | | | 3,310,000 | | | | 4,168,548 | |
Series B 5.00% 12/1/30 | | | 1,000,000 | | | | 1,256,670 | |
Series B 5.00% 12/15/39 | | | 5,000,000 | | | | 6,426,350 | |
Series C 5.00% 12/1/28 | | | 1,500,000 | | | | 1,999,320 | |
Series C 5.00% 12/1/30 | | | 1,245,000 | | | | 1,564,554 | |
Series C 5.00% 12/1/37 | | | 3,000,000 | | | | 3,703,680 | |
Mounds View Independent School District No. 621 | | | | | | | | |
(Minnesota School District Credit Enhancement | | | | | | | | |
Program) Series A 4.00% 2/1/43 | | | 3,000,000 | | | | 3,348,270 | |
33
DelawareTax-Free Minnesota Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Local General Obligation Bonds(continued) | | | | | | | | |
Mountain Iron-Buhl Independent School District No. 712 | | | | | | | | |
(School Building) Series A 4.00% 2/1/26 | | | 1,315,000 | | | $ | 1,540,128 | |
St. Michael-Albertville Independent School District No. 885 | | | | | | | | |
(School Building) Series A 5.00% 2/1/27 | | | 1,865,000 | | | | 2,299,265 | |
Wayzata Independent School District No. 284 | | | | | | | | |
Series A 5.00% 2/1/28 | | | 1,950,000 | | | | 2,480,810 | |
| | | | | | | | |
| | | | | | | 57,385,289 | |
| | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds – 7.78% | | | | | | | | |
Anoka Health Care Facilities Revenue | | | | | | | | |
(The Homestead at Anoka Project) Series A 7.00%11/1/40-19§ | | | 1,000,000 | | | | 1,019,090 | |
Dakota & Washington Counties Housing & Redevelopment Authority Single Family Residential Mortgage Revenue | | | | | | | | |
(City of Anoka) 8.45% 9/1/19 (GNMA) (AMT) | | | 9,000,000 | | | | 9,000,000 | |
(City of Bloomington) | | | | | | | | |
Series B 8.375% 9/1/21 (GNMA) (AMT) | | | 14,115,000 | | | | 15,970,276 | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(St. Catherine University) | | | | | | | | |
Series7-Q 5.00%10/1/23-22§ | | | 350,000 | | | | 389,805 | |
Series7-Q 5.00%10/1/24-22§ | | | 475,000 | | | | 529,022 | |
Series7-Q 5.00%10/1/27-22§ | | | 200,000 | | | | 222,746 | |
Rochester Healthcare & Housing Revenue | | | | | | | | |
(Samaritan Bethany Project) Series A 7.375%12/1/41-19§ | | | 5,220,000 | | | | 5,297,256 | |
St. Paul Housing & Redevelopment Authority Hospital Facility Revenue | | | | | | | | |
(Healtheast Care System Project) | | | | | | | | |
Series A 5.00%11/15/29-25§ | | | 910,000 | | | | 1,114,695 | |
Series A 5.00%11/15/30-25§ | | | 670,000 | | | | 820,710 | |
University of Minnesota | | | | | | | | |
Series A 5.25%12/1/29-20§ | | | 1,850,000 | | | | 1,945,331 | |
Series A 5.50% 7/1/21 | | | 8,795,000 | | | | 9,281,276 | |
| | | | | | | | |
| | | | | | | 45,590,207 | |
| | | | | | | | |
Special Tax Revenue Bonds – 3.03% | | | | | | | | |
Minneapolis Development Revenue | | | | | | | | |
(Limited Tax Supported Common Bond Fund) | | | | | | | | |
Series2-A 6.00% 12/1/40 | | | 3,000,000 | | | | 3,174,090 | |
Minneapolis Revenue | | | | | | | | |
(YMCA Greater Twin Cities Project) 4.00% 6/1/30 | | | 250,000 | | | | 279,190 | |
Puerto Rico Sales Tax Financing Revenue | | | | | | | | |
(Capital Appreciation - Restructured) | | | | | | | | |
SeriesA-1 5.375% 7/1/46 ^ | | | 11,323,000 | | | | 3,040,678 | |
34
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Special Tax Revenue Bonds(continued) | | | | | | | | |
Puerto Rico Sales Tax Financing Revenue | | | | | | | | |
(Capital Appreciation - Restructured) | | | | | | | | |
SeriesA-1 5.625% 7/1/51 ^ | | | 12,906,000 | | | $ | 2,508,152 | |
(Restructured) | | | | | | | | |
SeriesA-1 4.75% 7/1/53 | | | 3,143,000 | | | | 3,230,407 | |
SeriesA-1 5.00% 7/1/58 | | | 835,000 | | | | 872,709 | |
St. Paul Sales Tax Revenue | | | | | | | | |
Series G 5.00% 11/1/30 | | | 655,000 | | | | 771,878 | |
Series G 5.00% 11/1/31 | | | 1,500,000 | | | | 1,760,760 | |
Virgin Islands Public Finance Authority | | | | | | | | |
(Matching Fund Senior Lien) 5.00% 10/1/29 (AGM) | | | 2,000,000 | | | | 2,130,480 | |
| | | | | | | | |
| | | | | | | 17,768,344 | |
| | | | | | | | |
State General Obligation Bonds – 12.44% | | | | | | | | |
Minnesota | | | | | | | | |
Series A Unrefunded Balance 5.00% 10/1/24 | | | 4,555,000 | | | | 4,922,133 | |
Series A Unrefunded Balance 5.00% 10/1/27 | | | 5,200,000 | | | | 5,610,176 | |
(State Trunk Highway) | | | | | | | | |
Series B 5.00% 10/1/29 | | | 5,000,000 | | | | 5,386,900 | |
Series E 5.00% 10/1/26 | | | 3,395,000 | | | | 4,298,579 | |
(Various Purposes) | | | | | | | | |
Series A 5.00% 8/1/25 | | | 5,545,000 | | | | 6,589,013 | |
Series A 5.00% 8/1/27 | | | 7,840,000 | | | | 9,582,989 | |
Series A 5.00% 8/1/29 | | | 2,500,000 | | | | 3,040,425 | |
Series A 5.00% 8/1/30 | | | 4,200,000 | | | | 4,937,940 | |
Series A 5.00% 8/1/32 | | | 3,875,000 | | | | 4,541,733 | |
Series A 5.00% 8/1/33 | | | 2,075,000 | | | | 2,693,599 | |
Series A 5.00% 10/1/33 | | | 1,000,000 | | | | 1,271,250 | |
Series A 5.00% 8/1/35 | | | 2,975,000 | | | | 3,837,780 | |
Series A 5.00% 8/1/38 | | | 3,450,000 | | | | 4,412,515 | |
Series A Unrefunded Balance 4.00% 8/1/27 | | | 955,000 | | | | 1,027,007 | |
Series D 5.00% 8/1/26 | | | 6,000,000 | | | | 7,563,780 | |
Series D 5.00% 8/1/27 | | | 2,525,000 | | | | 3,174,001 | |
| | | | | | | | |
| | | | | | | 72,889,820 | |
| | | | | | | | |
Transportation Revenue Bonds – 7.35% | | | | | | | | |
Minneapolis – St. Paul Metropolitan Airports Commission Revenue | | | | | | | | |
(Senior) | | | | | | | | |
Series A 5.00% 1/1/28 | | | 1,250,000 | | | | 1,265,750 | |
Series C 5.00% 1/1/29 | | | 350,000 | | | | 438,211 | |
Series C 5.00% 1/1/33 | | | 850,000 | | | | 1,045,899 | |
Series C 5.00% 1/1/36 | | | 600,000 | | | | 732,390 | |
Series C 5.00% 1/1/41 | | | 600,000 | | | | 724,398 | |
35
DelawareTax-Free Minnesota Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Transportation Revenue Bonds(continued) | | | | | | | | |
Minneapolis – St. Paul Metropolitan Airports Commission Revenue | | | | | | | | |
(Senior) | | | | | | | | |
Series C 5.00% 1/1/46 | | | 1,595,000 | | | $ | 1,913,266 | |
(Subordinate) | | | | | | | | |
Series A 5.00% 1/1/35 | | | 1,000,000 | | | | 1,138,250 | |
Series A 5.00% 1/1/44 | | | 3,000,000 | | | | 3,763,950 | |
Series A 5.00% 1/1/49 | | | 5,000,000 | | | | 6,229,000 | |
Series B 5.00% 1/1/26 | | | 575,000 | | | | 626,003 | |
Series B 5.00% 1/1/27 | | | 1,160,000 | | | | 1,261,210 | |
Series B 5.00% 1/1/28 | | | 2,750,000 | | | | 2,986,637 | |
Series B 5.00% 1/1/29 | | | 120,000 | | | | 130,152 | |
Series B 5.00% 1/1/30 | | | 1,675,000 | | | | 1,813,489 | |
Series B 5.00% 1/1/31 | | | 1,750,000 | | | | 1,891,347 | |
Series B 5.00% 1/1/44 (AMT) | | | 5,095,000 | | | | 6,301,292 | |
Series B 5.00% 1/1/49 (AMT) | | | 6,150,000 | | | | 7,570,650 | |
St. Paul Port Authority Revenue | | | | | | | | |
(Amherst H. Wilder Foundation) Series 3 5.00% 12/1/36 | | | 3,200,000 | | | | 3,254,528 | |
| | | | | | | | |
| | | | | | | 43,086,422 | |
| | | | | | | | |
Water & Sewer Revenue Bonds – 3.07% | | | | | | | | |
Guam Government Waterworks Authority 5.00% 7/1/40 | | | 1,930,000 | | | | 2,243,278 | |
Metropolitan Council General Obligation Wastewater Revenue | | | | | | | | |
(Minneapolis-St. Paul Metropolitan Area) | | | | | | | | |
Series B 4.00% 9/1/27 | | | 2,400,000 | | | | 2,609,640 | |
Series B 5.00% 9/1/25 | | | 2,000,000 | | | | 2,229,700 | |
Series C 4.00% 3/1/31 | | | 3,120,000 | | | | 3,686,498 | |
Series C 4.00% 3/1/32 | | | 3,225,000 | | | | 3,792,213 | |
Series E 5.00% 9/1/23 | | | 2,000,000 | | | | 2,230,320 | |
Minnesota Public Facilities Authority Series B 4.00% 3/1/26 | | | 1,000,000 | | | | 1,181,450 | |
| | | | | | | | |
| | | | | | | 17,973,099 | |
| | | | | | | | |
Total Municipal Bonds(cost $568,514,354) | | | | | | | 603,841,947 | |
| | | | | | | | |
36
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Short-Term Investments – 1.53% | | | | | | | | |
Variable Rate Demand Notes – 1.53%¤ | | | | | | | | |
Minneapolis Health Care System Revenue (Fairview Health Services) | | | | | | | | |
Series C 1.37% 11/15/48 (LOC – Wells Fargo Bank N.A.) | | | 3,825,000 | | | $ | 3,825,000 | |
Minneapolis – St. Paul Housing & Redevelopment Authority | | | | | | | | |
Health Care Facilities Revenue | | | | | | | | |
(Allina Health System) SeriesB-2 1.37% 11/15/35 | | | | | | | | |
(LOC – JPMorgan Chase Bank N.A.) | | | 2,950,000 | | | | 2,950,000 | |
(Children’s Hospitals and Clinics) | | | | | | | | |
Series A 0.75% 8/15/34 (AGM) (SPA - US Bank N.A.) | | | 1,000,000 | | | | 1,000,000 | |
SeriesA-2 0.75% 8/15/37 (AGM) (SPA - US Bank N.A.) | | | 1,000,000 | | | | 1,000,000 | |
Series B 0.74% 8/15/25 (AGM) (SPA - US Bank N.A.) | | | 200,000 | | | | 200,000 | |
| | | | | | | | |
Total Short-Term Investments(cost $8,975,000) | | | | | | | 8,975,000 | |
| | | | | | | | |
| | |
Total Value of Securities – 104.58%
(cost $577,489,354) | | | | | | $ | 612,816,947 | |
| | | | | | | | |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At Aug. 31, 2019, the aggregate value of Rule 144A securities was $10,529,024, which represents 1.80% of the Fund’s net assets. See Note 8 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, 2019. |
| § | Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. Forpre-refunded bonds, the stated maturity is followed by the year in which the bond will bepre-refunded. See Note 8 in “Notes to financial statements.” |
| ° | Principal amount shown is stated in USD unless noted that the security is denominated in another currency. |
| ‡ | Non-income producing security. Security is currently in default. |
| ^ | Zero-coupon security. The rate shown is the effective yield at the time of purchase. |
37
DelawareTax-Free Minnesota Fund
Summary of abbreviations:
AGC – Insured by Assured Guaranty Corporation
AGM – Insured by Assured Guaranty Municipal Corporation
AMT – Subject to Alternative Minimum Tax
FHLMC – Federal Home Loan Mortgage Corporation collateral
FNMA – Federal National Mortgage Association collateral
GNMA – Government National Mortgage Association collateral
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.
38
| | | | |
| Delaware Tax-Free Minnesota Intermediate Fund | | August 31, 2019 |
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds – 97.85% | | | | | | | | |
Corporate Revenue Bond – 0.32% | | | | | | | | |
St. Paul Port Authority Solid Waste Disposal Revenue | | | | | | | | |
(Gerdau St. Paul Steel Mill Project) Series 7 144A 4.50% 10/1/37 (AMT)# | | | 255,000 | | | $ | 259,016 | |
| | | | | | | | |
| | | | | | | 259,016 | |
| | | | | | | | |
Education Revenue Bonds – 15.20% | | | | | | | | |
Bethel Charter School Lease Revenue | | | | | | | | |
(Spectrum High School Project) Series A 4.00% 7/1/32 | | | 425,000 | | | | 458,481 | |
Brooklyn Park Charter School Lease Revenue | | | | | | | | |
(Prairie Seeds Academy Project) Series A 5.00% 3/1/34 | | | 485,000 | | | | 504,094 | |
Cologne Charter School Lease Revenue | | | | | | | | |
(Cologne Academy Project) Series A 5.00% 7/1/29 | | | 305,000 | | | | 332,057 | |
Duluth Housing & Redevelopment Authority Revenue | | | | | | | | |
(Duluth Public Schools Academy Project) Series A 5.00% 11/1/38 | | | 400,000 | | | | 444,732 | |
Forest Lake Charter School Lease Revenue Fund | | | | | | | | |
(Lakes International Language Academy Project) Series A 5.50% 8/1/36 | | | 420,000 | | | | 453,172 | |
Hugo Charter School Lease Revenue | | | | | | | | |
(Noble Academy Project) Series A 5.00% 7/1/29 | | | 530,000 | | | | 572,071 | |
Minneapolis Charter School Lease Revenue | | | | | | | | |
(Hiawatha Academies Project) Series A 5.00% 7/1/31 | | | 500,000 | | | | 548,500 | |
Minneapolis Student Housing Revenue | | | | | | | | |
(Riverton Community Housing Project) 5.25% 8/1/39 | | | 525,000 | | | | 565,598 | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(Bethel University) 5.00% 5/1/32 | | | 525,000 | | | | 625,847 | |
(Gustavus Adolphus College) 5.00% 10/1/34 | | | 435,000 | | | | 528,416 | |
5.00% 10/1/35 | | | 555,000 | | | | 671,905 | |
(St. Catherine University) Series A 5.00% 10/1/35 | | | 565,000 | | | | 683,384 | |
(St. John’s University) Series8-I 5.00% 10/1/31 | | | 130,000 | | | | 154,222 | |
(St. Olaf College) | | | | | | | | |
Series8-G 5.00% 12/1/31 | | | 125,000 | | | | 150,154 | |
Series8-G 5.00% 12/1/32 | | | 125,000 | | | | 149,947 | |
(St. Scholastica College) Series H 5.125% 12/1/30 | | | 1,000,000 | | | | 1,009,640 | |
(University of St. Thomas) | | | | | | | | |
4.00% 10/1/36 | | | 300,000 | | | | 352,635 | |
5.00% 10/1/34 | | | 350,000 | | | | 449,239 | |
5.00% 10/1/35 | | | 750,000 | | | | 959,505 | |
Series7-U 4.00% 4/1/26 | | | 1,400,000 | | | | 1,531,194 | |
Rice County Educational Facilities Revenue | | | | | | | | |
(Shattuck-St. Mary’s School) Series A 144A 5.00% 8/1/22 # | | | 325,000 | | | | 344,051 | |
39
DelawareTax-Free Minnesota Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Education Revenue Bonds(continued) | | | | |
St. Paul Housing & Redevelopment Authority Charter School Lease Revenue | | | | |
(Academia Cesar Chavez School Project) Series A 5.25% 7/1/50 | | | 340,000 | | | $ | 361,325 | |
(Great River School Project) Series A 144A 5.25% 7/1/33 # | | | 140,000 | | | | 153,423 | |
(Twin Cities Academy Project) Series A 5.30% 7/1/45 | | | 260,000 | | | | 279,911 | |
| | | | | | | | |
| | | | | | | 12,283,503 | |
| | | | | | | | |
Electric Revenue Bonds – 10.09% | | | | |
Central Minnesota Municipal Power Agency | | | | |
(Brookings Twin Cities Transmission Project) | | | | | | | | |
Series E 5.00% 1/1/21 | | | 1,095,000 | | | | 1,151,152 | |
Series E 5.00% 1/1/23 | | | 1,000,000 | | | | 1,085,670 | |
Chaska Electric Revenue | | | | | | | | |
Series A 5.00% 10/1/28 | | | 250,000 | | | | 302,147 | |
Minnesota Municipal Power Agency Electric Revenue | | | | | | | | |
Series A 5.00% 10/1/29 | | | 500,000 | | | | 589,205 | |
Series A 5.00% 10/1/30 | | | 240,000 | | | | 282,235 | |
Northern Municipal Power Agency Electric System Revenue | | | | | | | | |
5.00% 1/1/29 | | | 150,000 | | | | 181,045 | |
5.00% 1/1/30 | | | 235,000 | | | | 289,111 | |
5.00% 1/1/31 | | | 350,000 | | | | 417,970 | |
Series A 5.00% 1/1/25 | | | 200,000 | | | | 223,452 | |
Rochester Electric Utility Revenue | | | | | | | | |
Series A 5.00% 12/1/28 | | | 300,000 | | | | 376,326 | |
Series A 5.00% 12/1/29 | | | 500,000 | | | | 624,975 | |
Series A 5.00% 12/1/31 | | | 575,000 | | | | 710,413 | |
St. Paul Housing & Redevelopment Energy Revenue Series A 4.00% 10/1/30 | | | 425,000 | | | | 485,503 | |
Western Minnesota Municipal Power Agency Revenue Series A 5.00% 1/1/33 | | | 1,250,000 | | | | 1,435,538 | |
| | | | | | | | |
| | | | | | | 8,154,742 | |
| | | | | | | | |
Healthcare Revenue Bonds – 31.14% | | | | |
Anoka Healthcare & Housing Facilities Revenue | | | | | | | | |
(The Homestead at Anoka Project) 5.375% 11/1/34 | | | 270,000 | | | | 294,489 | |
Apple Valley Senior Living Revenue | | | | | | | | |
(Senior Living LLC Project) | | | | | | | | |
3rd Tier Series C 4.25% 1/1/27 | | | 500,000 | | | | 492,245 | |
3rd Tier Series C 5.00% 1/1/32 | | | 420,000 | | | | 420,882 | |
40
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Healthcare Revenue Bonds(continued) | | | | |
Bethel Housing & Health Care Facilities Revenue | | | | |
(Benedictine Health System - St. Peter Communities Project) Series A 5.50% 12/1/48 | | | 250,000 | | | $ | 264,917 | |
Bethel Senior Housing Revenue | | | | |
(The Lodge at the Lakes at Stillwater Project) 5.00% 6/1/38 | | | 250,000 | | | | 266,603 | |
Center City Health Care Facilities Revenue | | | | |
(Hazelden Betty Ford Foundation Project) 5.00% 11/1/24 | | | 600,000 | | | | 701,442 | |
Crookston Health Care Facilities Revenue | | | | |
(RiverView Health Project) 5.00% 5/1/38 | | | 400,000 | | | | 449,660 | |
Dakota County Community Development Agency Senior Housing Revenue | | | | |
(Walker Highview Hills Project) Series A 144A 5.00% 8/1/36 # | | | 480,000 | | | | 502,709 | |
Duluth Economic Development Authority | | | | |
(Essentia Health Obligated Group) Series A 5.00% 2/15/37 | | | 750,000 | | | | 906,630 | |
(St. Luke’s Hospital of Duluth Obligated Group) 5.75% 6/15/32 | | | 750,000 | | | | 825,053 | |
Glencoe Health Care Facilities Revenue | | | | |
(Glencoe Regional Health Services Project) 4.00% 4/1/26 | | | 270,000 | | | | 284,191 | |
Hayward Health Care Facilities Revenue | | | | |
(American Baptist Homes Midwest Obligated Group) 4.25% 8/1/24 | | | 568,334 | | | | 588,169 | |
Maple Grove Health Care Facilities Revenue | | | | |
(Maple Grove Hospital Corporation) | | | | | | | | |
4.00% 5/1/37 | | | 500,000 | | | | 554,235 | |
5.00% 5/1/28 | | | 1,000,000 | | | | 1,237,140 | |
(North Memorial Health Care) 5.00% 9/1/31 | | | 320,000 | | | | 377,315 | |
Minneapolis Health Care System Revenue | | | | |
(Fairview Health Services) | | | | | | | | |
Series A 5.00% 11/15/33 | | | 500,000 | | | | 595,145 | |
Series A 5.00% 11/15/34 | | | 500,000 | | | | 593,735 | |
Series A 5.00% 11/15/49 | | | 1,000,000 | | | | 1,215,300 | |
Minneapolis Senior Housing & Healthcare Revenue | | | | |
(Ecumen-Abiitan Mill City Project) 5.00% 11/1/35 | | | 530,000 | | | | 560,411 | |
Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | |
(Allina Health System) Series A 5.00% 11/15/27 | | | 1,205,000 | | | | 1,520,818 | |
(Children’s Health Care) Series A 5.25% 8/15/25 | | | 1,000,000 | | | | 1,036,380 | |
41
DelawareTax-Free Minnesota Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Healthcare Revenue Bonds(continued) | | | | |
Minnesota Agricultural & Economic Development Board Revenue | | | | |
(Essenthia Health Obligated Group) SeriesC-1 5.50% 2/15/25 (AGC) | | | 2,500,000 | | | $ | 2,548,125 | |
Rochester Health Care Facilities Revenue | | | | | | | | |
(Mayo Clinic) Series C 4.50% 11/15/38 • | | | 925,000 | | | | 990,296 | |
(Olmsted Medical Center Project) 5.125% 7/1/20 | | | 220,000 | | | | 227,231 | |
Sartell Health Care Facilities Revenue | | | | | | | | |
(Country Manor Campus Project) Series A 5.00% 9/1/21 | | | 1,050,000 | | | | 1,121,631 | |
Sauk Rapids Health Care Housing Facilities Revenue | | | | | | | | |
(Good Shepherd Lutheran Home) 5.125% 1/1/39 | | | 575,000 | | | | 596,011 | |
St. Cloud Health Care Revenue | | | | | | | | |
(Centracare Health System Project) 5.00% 5/1/48 | | | 810,000 | | | | 1,000,536 | |
Unrefunded Balance 5.125% 5/1/30 | | | 360,000 | | | | 368,968 | |
St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Allina Health System) Unrefunded Balance SeriesA-2 5.25% 11/15/28 | | | 975,000 | | | | 983,346 | |
(Fairview Health Services) Series A 5.00% 11/15/47 | | | 275,000 | | | | 332,118 | |
(HealthPartners Obligated Group Project) | | | | | | | | |
5.00% 7/1/32 | | | 1,000,000 | | | | 1,164,720 | |
5.00% 7/1/33 | | | 200,000 | | | | 231,970 | |
St. Paul Housing & Redevelopment Authority Housing & Health Care Facilities Revenue | | | | | | | | |
(Episcopal Homes Project) 5.00% 5/1/33 | | | 500,000 | | | | 524,470 | |
Wayzata Senior Housing Revenue | | | | | | | | |
(Folkestone Senior Living Community) | | | | | | | | |
5.00% 8/1/34 | | | 125,000 | | | | 140,569 | |
5.00% 8/1/35 | | | 150,000 | | | | 168,312 | |
West St. Paul, Housing and Health Care Facilities Revenue | | | | | | | | |
(Walker Westwood Ridge Campus Project) 5.00% 11/1/37 | | | 500,000 | | | | 542,070 | |
Woodbury Housing & Redevelopment Authority Revenue | | | | | | | | |
(St. Therese of Woodbury) 5.00% 12/1/34 | | | 500,000 | | | | 536,100 | |
| | | | | | | | |
| | | | | | | 25,163,942 | |
| | | | | | | | |
Housing Revenue Bond – 0.38% | | | | |
Northwest Multi-County Housing & Redevelopment Authority | | | | | | | | |
(Pooled Housing Program) 5.50% 7/1/45 | | | 285,000 | | | | 306,210 | |
| | | | | | | | |
| | | | | | | 306,210 | |
| | | | | | | | |
42
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Lease Revenue Bonds – 5.19% | | | | | | | | |
Minnesota General Fund Revenue Appropriations | | | | | | | | |
Series A 5.00% 6/1/38 | | | 1,100,000 | | | $ | 1,247,807 | |
Series A 5.00% 6/1/43 | | | 715,000 | | | | 809,466 | |
Series B 5.00% 3/1/27 | | | 1,000,000 | | | | 1,093,400 | |
St. Paul Housing & Redevelopment Authority | | | | | | | | |
(Minnesota Public Radio Project) 5.00% 12/1/25 | | | 1,000,000 | | | | 1,042,080 | |
| | | | | | | | |
| | | | | | | 4,192,753 | |
| | | | | | | | |
Local General Obligation Bonds – 7.39% | | | | | | | | |
Duluth Independent School District No. 709 | | | | | | | | |
Series A 4.00% 2/1/28 | | | 250,000 | | | | 282,735 | |
Hennepin County | | | | | | | | |
Series A 5.00% 12/1/36 | | | 1,500,000 | | | | 1,856,670 | |
Series A 5.00% 12/1/38 | | | 1,055,000 | | | | 1,328,646 | |
Series C 5.00% 12/1/30 | | | 1,500,000 | | | | 1,885,005 | |
St. Michael-Albertville Independent School District No. 885 | | | | | | | | |
(School Building) Series A 5.00% 2/1/27 | | | 500,000 | | | | 616,425 | |
| | | | | | | | |
| | | | | | | 5,969,481 | |
| | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds – 7.08% | | | | | | | | |
Anoka Housing Facilities Revenue | | | | | | | | |
(Senior Homestead Anoka Project) Series B 6.875%11/1/34-19§ | | | 750,000 | | | | 764,213 | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(St. Catherine University) Series7-Q 5.00% 10/1/22 | | | 425,000 | | | | 473,335 | |
Rochester Healthcare & Housing Revenue | | | | | | | | |
(Samaritan Bethany Project) Series A 6.875%12/1/29-19§ | | | 950,000 | | | | 963,015 | |
St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Allina Health System) SeriesA-2 5.25%11/15/28-19§ | | | 1,025,000 | | | | 1,033,313 | |
St. Paul Housing & Redevelopment Authority Hospital Revenue | | | | | | | | |
(Healtheast Care System Project) | | | | | | | | |
Series A 5.00%11/15/29-25§ | | | 165,000 | | | | 202,115 | |
Series A 5.00%11/15/30-25§ | | | 120,000 | | | | 146,993 | |
University of Minnesota | | | | | | | | |
Series A 5.00%12/1/23-20§ | | | 1,000,000 | | | | 1,048,460 | |
Series D 5.00%12/1/26-21§ | | | 1,000,000 | | | | 1,087,040 | |
| | | | | | | | |
| | | | | | | 5,718,484 | |
| | | | | | | | |
43
DelawareTax-Free Minnesota Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Special Tax Revenue Bonds – 2.26% | | | | | | | | |
Minneapolis Revenue | | | | | | | | |
(YMCA Greater Twin Cities Project) 4.00% 6/1/27 | | | 100,000 | | | $ | 113,210 | |
Puerto Rico Sales Tax Financing Revenue (Restructured) | | | | | | | | |
Series A1 4.55% 7/1/40 | | | 830,000 | | | | 856,718 | |
SeriesA-2 4.536% 7/1/53 | | | 378,000 | | | | 384,131 | |
St. Paul Sales Tax Revenue | | | | | | | | |
Series G 5.00% 11/1/28 | | | 400,000 | | | | 473,804 | |
| | | | | | | | |
| | | | | | | 1,827,863 | |
| | | | | | | | |
State General Obligation Bonds – 9.08% | | | | | | | | |
Minnesota | | | | | | | | |
Series A 5.00% 8/1/33 | | | 285,000 | | | | 369,964 | |
Series A 5.00% 8/1/34 | | | 1,000,000 | | | | 1,293,910 | |
Series D 5.00% 8/1/26 | | | 2,500,000 | | | | 3,151,575 | |
Series D 5.00% 8/1/27 | | | 1,500,000 | | | | 1,885,545 | |
Series E 5.00% 10/1/26 | | | 500,000 | | | | 633,075 | |
| | | | | | | | |
| | | | | | | 7,334,069 | |
| | | | | | | | |
Transportation Revenue Bonds – 8.04% | | | | | | | | |
Minneapolis – St. Paul Metropolitan Airports Commission Revenue | | | | | | | | |
(Senior) Series B 5.00% 1/1/22 (AMT) | | | 1,000,000 | | | | 1,002,690 | |
(Subordinate) | | | | | | | | |
Series B 5.00% 1/1/26 | | | 710,000 | | | | 772,977 | |
Series B 5.00% 1/1/31 | | | 750,000 | | | | 810,577 | |
Series B 5.00% 1/1/44 (AMT) | | | 1,100,000 | | | | 1,360,436 | |
Series D 5.00% 1/1/22 (AMT) | | | 1,000,000 | | | | 1,012,000 | |
St. Paul Housing & Redevelopment Authority | | | | | | | | |
(Parking Enterprise) | | | | | | | | |
Series A 4.00% 8/1/26 | | | 450,000 | | | | 517,631 | |
Series A 4.00% 8/1/27 | | | 545,000 | | | | 622,995 | |
Series A 4.00% 8/1/28 | | | 350,000 | | | | 398,727 | |
| | | | | | | | |
| | | | | | | 6,498,033 | |
| | | | | | | | |
Water & Sewer Revenue Bonds – 1.68% | | | | | | | | |
Metropolitan Council General Obligation Wastewater Revenue (Minneapolis – St. Paul Metropolitan Area) | | | | | | | | |
Series C 4.00% 3/1/31 | | | 565,000 | | | | 667,587 | |
Series C 4.00% 3/1/32 | | | 585,000 | | | | 687,890 | |
| | | | | | | | |
| | | | | | | 1,355,477 | |
| | | | | | | | |
Total Municipal Bonds(cost $74,495,308) | | | | | | | 79,063,573 | |
| | | | | | | | |
44
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Short-Term Investments – 2.16% | | | | | | | | |
Variable Rate Demand Notes – 2.16%¤ | | | | | | | | |
Minneapolis Health Care System Revenue (Fairview Health Services) | | | | | | | | |
Series C | | | | | | | | |
1.37% 11/15/48 (LOC – Wells Fargo Bank N.A.) | | | 500,000 | | | $ | 500,000 | |
Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Allina Health System) SeriesB-1 1.37% 11/15/35 | | | | | | | | |
(LOC – JPMorgan Chase Bank N.A.) | | | 250,000 | | | | 250,000 | |
(Children’s Hospitals & Clinics) Series B 0.74% 8/15/25 | | | | | | | | |
(AGM) (SPA – US Bank N.A.) | | | 1,000,000 | | | | 1,000,000 | |
| | | | | | | | |
Total Short-Term Investments(cost $1,750,000) | | | | | | | 1,750,000 | |
| | | | | | | | |
| | |
Total Value of Securities – 100.01%
(cost $76,245,308) | | | | | | $ | 80,813,573 | |
| | | | | | | | |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At Aug. 31, 2019, the aggregate value of Rule 144A securities was $1,259,199, which represents 1.56% of the Fund’s net assets. See Note 8 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, 2019. |
| § | Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. Forpre-refunded bonds, the stated maturity is followed by the year in which the bond will bepre-refunded. See Note 8 in “Notes to financial statements.” |
| ° | Principal amount shown is stated in USD 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, 2019. 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. |
45
DelawareTax-Free Minnesota Intermediate Fund
Summary of abbreviations:
AGC – Insured by Assured Guaranty Corporation
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
LOC – Letter of Credit
N.A. – National Association
SPA –Stand-by Purchase Agreement
USD – US Dollar
See accompanying notes, which are an integral part of the financial statements.
46
| | | | |
| Delaware Minnesota High-Yield Municipal Bond Fund | | August 31, 2019 |
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds – 98.96% | | | | | | | | |
Corporate Revenue Bond – 0.98% | | | | | | | | |
St. Paul Port Authority Solid Waste Disposal Revenue | | | | | | | | |
(Gerdau St. Paul Steel Mill Project) | | | | | | | | |
Series 7 144A 4.50% 10/1/37 (AMT)# | | | 1,920,000 | | | $ | 1,950,240 | |
| | | | | | | | |
| | | | | | | 1,950,240 | |
| | | | | | | | |
Education Revenue Bonds – 19.80% | | | | | | | | |
Bethel Charter School Lease Revenue | | | | | | | | |
(Spectrum High School Project) Series A 4.00% 7/1/37 | | | 850,000 | | | | 906,075 | |
Brooklyn Park Charter School Lease Revenue | | | | | | | | |
(Prairie Seeds Academy Project) Series A 5.00% 3/1/39 | | | 1,270,000 | | | | 1,306,182 | |
Cologne Charter School Lease Revenue | | | | | | | | |
(Cologne Academy Project) | | | | | | | | |
Series A 5.00% 7/1/34 | | | 250,000 | | | | 268,457 | |
Series A 5.00% 7/1/45 | | | 230,000 | | | | 243,402 | |
Deephaven Charter School Lease Revenue | | | | | | | | |
(Eagle Ridge Academy Project) Series A 5.50% 7/1/50 | | | 1,000,000 | | | | 1,099,980 | |
Duluth Housing & Redevelopment Authority Revenue | | | | | | | | |
(Duluth Public Schools Academy Project) Series A 5.00% 11/1/48 | | | 1,000,000 | | | | 1,098,430 | |
Forest Lake Charter School Lease Revenue Fund | | | | | | | | |
(Lakes International Language Academy) | | | | | | | | |
Series A 5.375% 8/1/50 | | | 660,000 | | | | 737,801 | |
Series A 5.75% 8/1/44 | | | 585,000 | | | | 630,805 | |
Ham Lake Charter School Lease Revenue | | | | | | | | |
(Davinci Academy Project) | | | | | | | | |
Series A 5.00% 7/1/36 | | | 235,000 | | | | 251,880 | |
Series A 5.00% 7/1/47 | | | 710,000 | | | | 752,437 | |
(Parnassus Preparatory School Project) Series A 5.00% 11/1/47 | | | 650,000 | | | | 694,668 | |
Hugo Charter School Lease Revenue | | | | | | | | |
(Noble Academy Project) | | | | | | | | |
Series A 5.00% 7/1/34 | | | 165,000 | | | | 176,271 | |
Series A 5.00% 7/1/44 | | | 495,000 | | | | 522,948 | |
Minneapolis Charter School Lease Revenue | | | | | | | | |
(Hiawatha Academies Project) | | | | | | | | |
Series A 5.00% 7/1/36 | | | 1,000,000 | | | | 1,085,260 | |
Series A 5.00% 7/1/47 | | | 800,000 | | | | 858,936 | |
Minneapolis Student Housing Revenue | | | | | | | | |
(Riverton Community Housing Project) | | | | | | | | |
144A 4.75% 8/1/43 # | | | 750,000 | | | | 800,355 | |
144A 5.00% 8/1/53 # | | | 570,000 | | | | 610,618 | |
5.25% 8/1/39 | | | 800,000 | | | | 861,864 | |
47
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Education Revenue Bonds(continued) | | | | | | | | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(Bethel University) 5.00% 5/1/47 | | | 1,500,000 | | | $ | 1,734,270 | |
(Carleton College) 4.00% 3/1/37 | | | 635,000 | | | | 724,332 | |
(Gustavus Adolphus College) 5.00% 10/1/47 | | | 1,000,000 | | | | 1,183,160 | |
(Minneapolis College of Art & Design) 4.00% 5/1/24 | | | 250,000 | | | | 268,527 | |
4.00% 5/1/25 | | | 200,000 | | | | 214,364 | |
4.00% 5/1/26 | | | 100,000 | | | | 107,019 | |
(St. Catherine University) | | | | | | | | |
Series A 4.00% 10/1/37 | | | 580,000 | | | | 636,115 | |
Series A 5.00% 10/1/45 | | | 670,000 | | | | 794,091 | |
(St. John’s University) Series8-I 5.00% 10/1/34 | | | 215,000 | | | | 253,945 | |
(St. Olaf College) | | | | | | | | |
Series8-G 5.00% 12/1/31 | | | 205,000 | | | | 246,252 | |
Series8-G 5.00% 12/1/32 | | | 205,000 | | | | 245,914 | |
Series8-N 4.00% 10/1/34 | | | 800,000 | | | | 910,424 | |
Series8-N 4.00% 10/1/35 | | | 590,000 | | | | 670,612 | |
(St. Scholastica College) Series H 5.125% 12/1/40 | | | 750,000 | | | | 757,230 | |
(Trustees of the Hamline University of Minnesota) | | | | | | | | |
Series B 5.00% 10/1/37 | | | 300,000 | | | | 346,128 | |
Series B 5.00% 10/1/39 | | | 770,000 | | | | 884,876 | |
(University of St. Thomas) | | | | | | | | |
4.00% 10/1/41 | | | 1,000,000 | | | | 1,159,340 | |
4.00% 10/1/44 | | | 850,000 | | | | 975,265 | |
Series A 4.00% 10/1/35 | | | 400,000 | | | | 455,380 | |
Otsego Charter School Lease Revenue | | | | |
(Kaleidoscope Charter School) Series A 5.00% 9/1/44 | | | 1,435,000 | | | | 1,511,285 | |
Rice County Educational Facilities Revenue | | | | |
(Shattuck-St. Mary’s School) Series A 144A 5.00% 8/1/22 # | | | 770,000 | | | | 815,137 | |
St. Cloud Charter School Lease Revenue | | | | |
(Stride Academy Project) Series A 5.00% 4/1/46 | | | 750,000 | | | | 513,277 | |
St. Paul Housing & Redevelopment Authority Charter School Lease Revenue | | | | |
(Academia Cesar Chavez School Project) Series A 5.25% 7/1/50 | | | 1,750,000 | | | | 1,859,760 | |
(Great River School Project) Series A 144A 5.50% 7/1/52 # | | | 265,000 | | | | 286,839 | |
(Hmong College Preparatory Academy Project) | | | | |
Series A 5.75% 9/1/46 | | | 500,000 | | | | 559,045 | |
Series A 6.00% 9/1/51 | | | 500,000 | | | | 565,020 | |
48
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Education Revenue Bonds(continued) | | | | | | | | |
St. Paul Housing & Redevelopment Authority Charter School Lease Revenue | | | | | | | | |
(Nova Classical Academy Project) | | | | | | | | |
Series A 4.00% 9/1/36 | | | 1,270,000 | | | $ | 1,350,505 | |
Series A 4.125% 9/1/47 | | | 500,000 | | | | 526,815 | |
(Twin Cities Academy Project) Series A 5.375% 7/1/50 | | | 1,500,000 | | | | 1,616,640 | |
University of Minnesota | | | | | | | | |
Series A 5.00% 4/1/34 | | | 2,115,000 | | | | 2,577,825 | |
Series A 5.00% 9/1/40 | | | 900,000 | | | | 1,117,188 | |
Series A 5.00% 9/1/41 | | | 620,000 | | | | 768,434 | |
| | | | | | | | |
| | | | | | | 39,541,383 | |
| | | | | | | | |
Electric Revenue Bonds – 7.78% | | | | |
Central Minnesota Municipal Power Agency | | | | |
(Brookings Twin Cities Transmission Project) 5.00% 1/1/42 | | | 1,500,000 | | | | 1,620,150 | |
Chaska Electric Revenue | | | | | | | | |
Series A 5.00% 10/1/28 | | | 350,000 | | | | 423,007 | |
Hutchinson Utilities Commission Revenue | | | | | | | | |
Series A 5.00% 12/1/22 | | | 490,000 | | | | 550,373 | |
Series A 5.00% 12/1/26 | | | 360,000 | | | | 401,184 | |
Minnesota Municipal Power Agency Electric Revenue | | | | | | | | |
5.00% 10/1/27 | | | 165,000 | | | | 194,877 | |
5.00% 10/1/47 | | | 745,000 | | | | 889,448 | |
Series A 5.00% 10/1/28 | | | 500,000 | | | | 590,150 | |
Northern Municipal Power Agency Electric System Revenue | | | | | | | | |
5.00% 1/1/26 | | | 500,000 | | | | 611,525 | |
5.00% 1/1/28 | | | 500,000 | | | | 605,825 | |
5.00% 1/1/29 | | | 470,000 | | | | 567,276 | |
5.00% 1/1/33 | | | 225,000 | | | | 272,021 | |
5.00% 1/1/34 | | | 200,000 | | | | 241,262 | |
Series A 5.00% 1/1/24 | | | 335,000 | | | | 375,096 | |
Puerto Rico Electric Power Authority | | | | | | | | |
Series CCC 5.25% 7/1/27 ‡ | | | 410,000 | | | | 329,025 | |
Series WW 5.00% 7/1/28 ‡ | | | 585,000 | | | | 468,000 | |
Rochester Electric Utility Revenue | | | | | | | | |
Series A 5.00% 12/1/34 | | | 450,000 | | | | 551,052 | |
Series A 5.00% 12/1/35 | | | 500,000 | | | | 610,785 | |
Series A 5.00% 12/1/36 | | | 520,000 | | | | 633,682 | |
Southern Minnesota Municipal Power Agency Revenue Series A 5.00% 1/1/41 | | | 400,000 | | | | 471,772 | |
49
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Electric Revenue Bonds(continued) | | | | | | | | |
St. Paul Housing & Redevelopment Energy Revenue Series A 4.00% 10/1/32 | | | 800,000 | | | $ | 901,624 | |
Western Minnesota Municipal Power Agency Revenue | | | | | | | | |
Series A 5.00% 1/1/30 | | | 500,000 | | | | 572,500 | |
Series A 5.00% 1/1/33 | | | 750,000 | | | | 861,323 | |
Series A 5.00% 1/1/34 | | | 450,000 | | | | 516,483 | |
Series A 5.00% 1/1/40 | | | 2,000,000 | | | | 2,284,860 | |
| | | | | | | | |
| | | | | | | 15,543,300 | |
| | | | | | | | |
Healthcare Revenue Bonds – 33.97% | | | | |
Anoka Healthcare & Housing Facilities Revenue | | | | |
(The Homestead at Anoka Project) 5.125% 11/1/49 | | | 400,000 | | | | 424,208 | |
Anoka Housing & Redevelopment Authority Revenue | | | | | | | | |
(Fridley Medical Center Project) Series A 6.875% 5/1/40 | | | 1,000,000 | | | | 1,018,620 | |
Apple Valley Senior Housing Revenue | | | | | | | | |
(PHS Senior Housing, Inc. Orchard Path Project) | | | | | | | | |
4.50% 9/1/53 | | | 840,000 | | | | 880,421 | |
5.00% 9/1/43 | | | 535,000 | | | | 581,299 | |
5.00% 9/1/58 | | | 1,175,000 | | | | 1,269,752 | |
Apple Valley Senior Living Revenue | | | | | | | | |
(Senior Living LLC Project) | | | | | | | | |
2nd Tier Series B 5.00% 1/1/47 | | | 560,000 | | | | 570,399 | |
4th Tier Series D 7.00% 1/1/37 | | | 515,000 | | | | 532,479 | |
4th Tier Series D 7.25% 1/1/52 | | | 1,500,000 | | | | 1,563,660 | |
Bethel Housing & Health Care Facilities Revenue | | | | | | | | |
(Benedictine Health System - St. Peter Communities | | | | | | | | |
Project) Series A 5.50% 12/1/48 | | | 1,280,000 | | | | 1,356,378 | |
Bethel Senior Housing Revenue | | | | | | | | |
(The Lodge at the Lakes at Stillwater Project) 5.25% 6/1/58 | | | 725,000 | | | | 771,799 | |
Brooklyn Center Multifamily Housing Revenue | | | | | | | | |
(Sanctuary at Brooklyn Center Project) Series A 5.50% 11/1/35 | | | 750,000 | | | | 778,057 | |
City of West St. Paul Minnesota | | | | | | | | |
(Walker Westwood Ridge Campus Project) 5.00% 11/1/49 | | | 1,500,000 | | | | 1,603,035 | |
Cloquet Housing Facilities | | | | | | | | |
(HADC Cloquet Project) Series A 5.00% 8/1/48 | | | 850,000 | | | | 867,629 | |
Crookston Health Care Facilities Revenue | | | | | | | | |
(Riverview Health Project) 5.00% 5/1/51 | | | 1,025,000 | | | | 1,131,118 | |
Dakota County Community Development Agency Senior Housing Revenue | | | | | | | | |
(Walker Highview Hills Project) Series A 144A 5.00% 8/1/51 # | | | 870,000 | | | | 902,834 | |
50
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Deephaven Housing & Healthcare Revenue | | | | | | | | |
(St. Therese Senior Living Project) | | | | | | | | |
Series A 5.00% 4/1/38 | | | 335,000 | | | $ | 343,800 | |
Series A 5.00% 4/1/40 | | | 315,000 | | | | 323,064 | |
Series A 5.00% 4/1/48 | | | 185,000 | | | | 189,305 | |
Duluth Economic Development Authority | | | | | | | | |
(Essentia Health Obligated Group) Series A 5.00% 2/15/48 | | | 590,000 | | | | 701,221 | |
(St. Luke’s Hospital of Duluth Obligated Group) | | | | | | | | |
5.75% 6/15/32 | | | 750,000 | | | | 825,053 | |
6.00% 6/15/39 | | | 1,000,000 | | | | 1,109,580 | |
Glencoe Health Care Facilities Revenue | | | | | | | | |
(Glencoe Regional Health Services Project) 4.00% 4/1/31 | | | 185,000 | | | | 193,617 | |
Hayward Health Care Facilities Revenue | | | | | | | | |
(American Baptist Homes Midwest Obligated Group) 5.375% 8/1/34 | | | 750,000 | | | | 789,367 | |
(St. John’s Lutheran Home of Albert Lea Project) 5.375% 10/1/44 | | | 165,000 | | | | 172,699 | |
Maple Grove Health Care Facilities Revenue | | | | | | | | |
(Maple Grove Hospital Corporation) | | | | | | | | |
4.00% 5/1/37 | | | 1,155,000 | | | | 1,280,283 | |
5.00% 5/1/26 | | | 1,300,000 | | | | 1,588,184 | |
5.00% 5/1/29 | | | 500,000 | | | | 616,270 | |
(North Memorial Health Care) 5.00% 9/1/30 | | | 610,000 | | | | 722,679 | |
Maple Plain Senior Housing & Health Care Revenue | | | | | | | | |
(Haven Homes Incorporate Project) 5.00% 7/1/49 | | | 1,000,000 | | | | 1,070,570 | |
Minneapolis Health Care System Revenue | | | | | | | | |
(Fairview Health Services) | | | | | | | | |
Series A 4.00% 11/15/48 | | | 1,000,000 | | | | 1,118,780 | |
Series A 5.00% 11/15/33 | | | 1,200,000 | | | | 1,428,348 | |
Series A 5.00% 11/15/34 | | | 500,000 | | | | 593,735 | |
Series A 5.00% 11/15/44 | | | 1,000,000 | | | | 1,170,140 | |
Series A 5.00% 11/15/49 | | | 1,450,000 | | | | 1,762,185 | |
Minneapolis Senior Housing & Healthcare Revenue | | | | | | | | |
(Ecumen-Abiitan Mill City Project) 5.375% 11/1/50 | | | 1,700,000 | | | | 1,796,509 | |
Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Allina Health System) Series A 5.00% 11/15/29 | | | 415,000 | | | | 519,862 | |
Morris Health Care Facilities Revenue | | | | | | | | |
(Farmington Health Services) | | | | | | | | |
4.10% 8/1/44 | | | 500,000 | | | | 504,430 | |
4.20% 8/1/49 | | | 1,500,000 | | | | 1,513,245 | |
51
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Healthcare Revenue Bonds(continued) | | | | | | | | |
Oakdale Senior Housing | | | | | | | | |
(Oak Meadows Project) 5.00% 4/1/34 | | | 500,000 | | | $ | 509,535 | |
Rochester Health Care & Housing Revenue | | | | | | | | |
(The Homestead at Rochester Project) | | | | | | | | |
Series A 5.25% 12/1/23 | | | 175,000 | | | | 188,036 | |
Series A 6.875% 12/1/48 | | | 800,000 | | | | 878,376 | |
Rochester Health Care Facilities Revenue | | | | | | | | |
(Mayo Clinic) 4.00% 11/15/41 | | | 1,790,000 | | | | 1,875,866 | |
(Olmsted Medical Center Project) | | | | | | | | |
5.00% 7/1/22 | | | 350,000 | | | | 385,525 | |
5.00% 7/1/27 | | | 245,000 | | | | 276,159 | |
5.00% 7/1/28 | | | 225,000 | | | | 252,902 | |
Sartell Health Care Facilities Revenue | | | | | | | | |
(Country Manor Campus Project) Series A 5.25% 9/1/22 | | | 1,080,000 | | | | 1,194,037 | |
Sauk Rapids Health Care Housing Facilities Revenue | | | | | | | | |
(Good Shepherd Lutheran Home) 5.125% 1/1/39 | | | 825,000 | | | | 855,145 | |
Shakopee Health Care Facilities Revenue | | | | | | | | |
(St. Francis Regional Medical Center) | | | | | | | | |
4.00% 9/1/31 | | | 130,000 | | | | 140,876 | |
5.00% 9/1/34 | | | 105,000 | | | | 118,871 | |
St. Cloud Health Care Revenue | | | | | | | | |
(Centracare Health System Project) | | | | | | | | |
4.00% 5/1/49 | | | 250,000 | | | | 280,367 | |
5.00% 5/1/48 | | | 3,900,000 | | | | 4,817,397 | |
Unrefunded Balance 5.125% 5/1/30 | | | 15,000 | | | | 15,374 | |
Series A 4.00% 5/1/37 | | | 1,440,000 | | | | 1,600,790 | |
Series A 5.00% 5/1/46 | | | 2,000,000 | | | | 2,360,080 | |
St. Joseph Senior Housing & Healthcare Revenue | | | | | | | | |
(Woodcrest Country Manor Project) 5.00% 7/1/55 | | | 1,000,000 | | | | 1,058,540 | |
St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue (Fairview Health Services) | | | | | | | | |
Series A 4.00% 11/15/43 | | | 645,000 | | | | 719,594 | |
Series A 5.00% 11/15/47 | | | 485,000 | | | | 585,735 | |
(HealthPartners Obligated Group Project) | | | | | | | | |
Series A 4.00% 7/1/33 | | | 1,320,000 | | | | 1,452,845 | |
Series A 5.00% 7/1/29 | | | 1,000,000 | | | | 1,186,310 | |
Series A 5.00% 7/1/32 | | | 900,000 | | | | 1,048,248 | |
Series A 5.00% 7/1/33 | | | 1,540,000 | | | | 1,786,169 | |
52
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Healthcare Revenue Bonds(continued) | | | | | | | | |
St. Paul Housing & Redevelopment Authority Housing & Health Care Facilities Revenue | | | | | | | | |
(Episcopal Homes Project) | | | | | | | | |
5.125% 5/1/48 | | | 1,700,000 | | | $ | 1,752,139 | |
Series A 5.15% 11/1/42 | | | 775,000 | | | | 782,145 | |
St. Paul Housing & Redevelopment Authority Multifamily Housing Revenue | | | | | | | | |
(Marian Center Project) Series A 5.375% 5/1/43 | | | 1,000,000 | | | | 1,000,300 | |
Twin Valley Congregate Housing Revenue | | | | | | | | |
(Living Options Project) 5.95% 11/1/28 | | | 1,825,000 | | | | 1,825,858 | |
Victoria Health Care Facilities Revenue | | | | | | | | |
(Augustana Emerald Care Project) 5.00% 8/1/39 | | | 1,500,000 | | | | 1,545,615 | |
Wayzata Senior Housing Revenue | | | | | | | | |
(Folkestone Senior Living Community) | | | | | | | | |
4.00% 8/1/38 | | | 250,000 | | | | 261,828 | |
4.00% 8/1/39 | | | 400,000 | | | | 417,916 | |
4.00% 8/1/44 | | | 350,000 | | | | 364,578 | |
5.00% 8/1/54 | | | 350,000 | | | | 386,411 | |
Woodbury Housing & Redevelopment Authority Revenue | | | | | | | | |
(St. Therese of Woodbury) 5.25% 12/1/49 | | | 1,250,000 | | | | 1,331,050 | |
| | | | | | | | |
| | | | | | | 67,839,231 | |
| | | | | | | | |
Housing Revenue Bonds – 1.81% | | | | |
Bethel Senior Housing Revenue | | | | |
(Birchwood Landing at the Lakes at Stillwater Project) 5.00% 5/1/54 | | | 1,000,000 | | | | 1,060,300 | |
Minneapolis Multifamily Housing Revenue | | | | | | | | |
(Olson Townhomes Project) 6.00% 12/1/19 (AMT) | | | 310,000 | | | | 310,688 | |
Minneapolis – St. Paul Housing Finance Board Single Family Mortgage-Backed Securities Program | | | | | | | | |
(City Living Project) SeriesA-2 5.00% 12/1/38 (GNMA) (FNMA) (FHLMC) (AMT) | | | 11,235 | | | | 11,242 | |
Minnesota Housing Finance Agency State Appropriation | | | | | | | | |
(Housing Infrastructure) Series C 5.00% 8/1/33 | | | 100,000 | | | | 116,994 | |
Northwest Multi-County Housing & Redevelopment Authority | | | | | | | | |
(Pooled Housing Program) 5.50% 7/1/45 | | | 1,275,000 | | | | 1,369,885 | |
Stillwater Multifamily Housing Revenue | | | | | | | | |
(Orleans Homes Project) 5.50% 2/1/42 (AMT) | | | 750,000 | | | | 750,667 | |
| | | | | | | | |
| | | | | | | 3,619,776 | |
| | | | | | | | |
53
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Lease Revenue Bonds – 2.39% | | | | | | | | |
Minnesota General Fund Revenue Appropriations | | | | | | | | |
Series A 5.00% 6/1/38 | | | 1,750,000 | | | $ | 1,985,147 | |
Series A 5.00% 6/1/43 | | | 1,000,000 | | | | 1,132,120 | |
Minnesota Housing Finance Agency State Appropriation | | | | | | | | |
(Housing Infrastructure) Series C 5.00% 8/1/32 | | | 1,415,000 | | | | 1,657,007 | |
| | | | | | | | |
| | | | | | | 4,774,274 | |
| | | | | | | | |
Local General Obligation Bonds – 7.50% | | | | |
Chaska Independent School District No. 112 | | | | |
(School Building) Series A 5.00% 2/1/28 | | | 1,000,000 | | | | 1,229,870 | |
Duluth General Obligation Entertainment Convention Center Improvement | | | | | | | | |
Series A 5.00% 2/1/34 | | | 1,000,000 | | | | 1,207,250 | |
Duluth Independent School District No. 709 | | | | | | | | |
Series A 4.00% 2/1/27 | | | 440,000 | | | | 498,555 | |
Series A 4.20% 3/1/34 | | | 750,000 | | | | 806,857 | |
Foley Independent School District No. 51 | | | | | | | | |
(School Building) Series A 5.00% 2/1/21 | | | 1,105,000 | | | | 1,108,326 | |
Hennepin County | | | | | | | | |
Series A 5.00% 12/1/26 | | | 750,000 | | | | 954,120 | |
Series A 5.00% 12/1/37 | | | 910,000 | | | | 1,148,684 | |
Series C 5.00% 12/1/37 | | | 2,500,000 | | | | 3,086,400 | |
Mahtomedi Independent School District No. 832 | | | | | | | | |
(School Building) | | | | | | | | |
Series A 5.00% 2/1/28 | | | 1,000,000 | | | | 1,195,230 | |
Series A 5.00% 2/1/29 | | | 1,000,000 | | | | 1,194,070 | |
Series A 5.00% 2/1/30 | | | 445,000 | | | | 531,103 | |
Series A 5.00% 2/1/31 | | | 1,000,000 | | | | 1,192,920 | |
Wayzata Independent School District No. 284 | | | | | | | | |
(School Building) Series A 5.00% 2/1/28 | | | 650,000 | | | | 826,937 | |
| | | | | | | | |
| | | | | | | 14,980,322 | |
| | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds – 5.38% | | | | |
Anoka Health Care Facilities Revenue | | | | |
(The Homestead at Anoka Project) Series A 7.00%11/1/46-19§ | | | 1,650,000 | | | | 1,681,499 | |
Deephaven Charter School Lease Revenue | | | | | | | | |
(Eagle Ridge Academy Project) Series A 5.50%7/1/43-23§ | | | 500,000 | | | | 581,765 | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(St. Catherine University) | | | | | | | | |
Series7-Q 5.00%10/1/25-22§ | | | 325,000 | | | | 361,962 | |
Series7-Q 5.00%10/1/26-22§ | | | 280,000 | | | | 311,844 | |
(University of St. Thomas) Series7-A 5.00%10/1/39-19§ | | | 1,000,000 | | | | 1,002,900 | |
54
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds(continued) | | | | | | | | |
Oak Park Heights Housing Revenue | | | | | | | | |
(Oakgreen Commons Project) 7.00%8/1/45-20§ | | | 1,500,000 | | | $ | 1,578,195 | |
Rochester Healthcare & Housing Revenue | | | | | | | | |
(Samaritan Bethany Project) | | | | | | | | |
Series A 6.875%12/1/29-19§ | | | 1,000,000 | | | | 1,013,700 | |
Series A 7.375%12/1/41-19§ | | | 375,000 | | | | 380,550 | |
St. Paul Housing & Redevelopment Authority Charter School Lease Revenue | | | | | | | | |
(Nova Classical Academy Project) Series A 6.625%9/1/42-21§ | | | 1,500,000 | | | | 1,660,620 | |
St. Paul Housing & Redevelopment Authority Hospital Facility Revenue | | | | | | | | |
(Healtheast Care System Project) | | | | | | | | |
Series A 5.00%11/15/29-25§ | | | 275,000 | | | | 336,859 | |
Series A 5.00%11/15/30-25§ | | | 205,000 | | | | 251,113 | |
University of Minnesota | | | | | | | | |
Series A 5.25%12/1/28-20§ | | | 1,500,000 | | | | 1,577,295 | |
| | | | | | | | |
| | | | | | | 10,738,302 | |
| | | | | | | | |
Special Tax Revenue Bonds – 5.02% | | | | |
Minneapolis Revenue | | | | |
(YMCA Greater Twin Cities Project) 4.00% 6/1/31 | | | 250,000 | | | | 278,003 | |
Minneapolis Tax Increment Revenue | | | | | | | | |
(Grant Park Project) | | | | | | | | |
4.00% 3/1/27 | | | 200,000 | | | | 208,404 | |
4.00% 3/1/30 | | | 260,000 | | | | 269,433 | |
(Village of St. Anthony Falls Project) | | | | | | | | |
4.00% 3/1/24 | | | 700,000 | | | | 725,627 | |
4.00% 3/1/27 | | | 650,000 | | | | 661,239 | |
Puerto Rico Sales Tax Financing Revenue | | | | | | | | |
(Capital Appreciation - Restructured) | | | | | | | | |
SeriesA-1 5.375% 7/1/46 ^ | | | 3,635,000 | | | | 976,143 | |
SeriesA-1 5.625% 7/1/51 ^ | | | 4,145,000 | | | | 805,539 | |
(Restructured) | | | | | | | | |
SeriesA-1 4.75% 7/1/53 | | | 2,005,000 | | | | 2,060,759 | |
SeriesA-1 5.00% 7/1/58 | | | 275,000 | | | | 287,419 | |
SeriesA-2 4.536% 7/1/53 | | | 3,000,000 | | | | 3,048,660 | |
St. Paul Sales Tax Revenue | | | | | | | | |
Series G 5.00% 11/1/28 | | | 600,000 | | | | 710,706 | |
| | | | | | | | |
| | | | | | | 10,031,932 | |
| | | | | | | | |
State General Obligation Bonds – 8.43% | | | | |
Minnesota | | | | |
Series A 5.00% 8/1/27 | | | 750,000 | | | | 916,740 | |
55
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Municipal Bonds(continued) | | | | | | | | |
State General Obligation Bonds(continued) | | | | | | | | |
Minnesota | | | | | | | | |
Series A 5.00% 8/1/29 | | | 1,000,000 | | | $ | 1,216,170 | |
Series A 5.00% 8/1/33 | | | 660,000 | | | | 856,759 | |
Series A 5.00% 10/1/33 | | | 2,000,000 | | | | 2,542,500 | |
Series A 5.00% 8/1/34 | | | 2,185,000 | | | | 2,827,193 | |
Series A 5.00% 8/1/38 | | | 1,000,000 | | | | 1,278,990 | |
Series A Unrefunded Balance 5.00% 10/1/24 | | | 985,000 | | | | 1,064,391 | |
Series D 5.00% 8/1/26 | | | 1,000,000 | | | | 1,260,630 | |
Series D 5.00% 8/1/27 | | | 1,000,000 | | | | 1,257,030 | |
Series E 5.00% 10/1/26 | | | 1,085,000 | | | | 1,373,773 | |
(Various Purposes) Series A 5.00% 8/1/32 | | | 1,915,000 | | | | 2,244,495 | |
| | | | | | | | |
| | | | | | | 16,838,671 | |
| | | | | | | | |
Transportation Revenue Bonds – 4.40% | | | | |
Minneapolis – St. Paul Metropolitan Airports Commission Revenue | | | | |
(Senior) | | | | | | | | |
Series A 5.00% 1/1/32 | | | 1,245,000 | | | | 1,538,185 | |
Series C 5.00% 1/1/46 | | | 185,000 | | | | 221,915 | |
(Subordinate) | | | | | | | | |
Series A 5.00% 1/1/22 | | | 1,000,000 | | | | 1,052,860 | |
Series A 5.00% 1/1/32 | | | 500,000 | | | | 572,050 | |
Series B 5.00% 1/1/29 | | | 2,130,000 | | | | 2,310,198 | |
Series B 5.00% 1/1/44 (AMT) | | | 1,000,000 | | | | 1,236,760 | |
Series B 5.00% 1/1/49 (AMT) | | | 1,500,000 | | | | 1,846,500 | |
| | | | | | | | |
| | | | | | | 8,778,468 | |
| | | | | | | | |
Water & Sewer Revenue Bonds – 1.50% | | | | |
Guam Government Waterworks Authority 5.00% 7/1/37 | | | 575,000 | | | | 672,756 | |
Metropolitan Council General Obligation Wastewater Revenue (Minneapolis – St. Paul Metropolitan Area) | | | | | | | | |
Series C 4.00% 3/1/31 | | | 965,000 | | | | 1,140,215 | |
Series C 4.00% 3/1/32 | | | 1,000,000 | | | | 1,175,880 | |
| | | | | | | | |
| | | | | | | 2,988,851 | |
| | | | | | | | |
Total Municipal Bonds(cost $186,145,079) | | | | | | | 197,624,750 | |
| | | | | | | | |
56
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
Short-Term Investments – 1.59% | | | | | | | | |
Variable Rate Demand Notes – 1.59%¤ | | | | | | | | |
Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Children’s Hospitals and Clinics) | | | | | | | | |
Series A 0.75% 8/15/34 (AGM) (SPA – US Bank N.A.) | | | 800,000 | | | $ | 800,000 | |
SeriesA-1 0.75% 8/15/37 (AGM) (SPA – US Bank N.A.) | | | 1,875,000 | | | | 1,875,000 | |
Series B 0.74% 8/15/25 (AGM) (SPA – US Bank N.A.) | | | 300,000 | | | | 300,000 | |
Minneapolis – St. Paul Housing & Redevelopment Authority | | | | | | | | |
Health Care Revenue (Allina Health System) SeriesB-1 1.37% 11/15/35 (LOC – JPMorgan Chase Bank N.A.) | | | 200,000 | | | | 200,000 | |
| | | | | | | | |
Total Short-Term Investments(cost $3,175,000) | | | | | | | 3,175,000 | |
| | | | | | | | |
| | |
Total Value of Securities – 100.55%
(cost $189,320,079) | | | | | | $ | 200,799,750 | |
| | | | | | | | |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At Aug. 31, 2019, the aggregate value of Rule 144A securities was $5,366,023, which represents 2.69% of the Fund’s net assets. See Note 8 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, 2019. |
| § | Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. Forpre-refunded bonds, the stated maturity is followed by the year in which the bond will bepre-refunded. See Note 8 in “Notes to financial statements.” |
| ° | Principal amount shown is stated in USD unless noted that the security is denominated in another currency. |
| ‡ | Non-income producing security. Security is currently in default. |
| ^ | 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
FHLMC – Federal Home Loan Mortgage Corporation collateral
FNMA – Federal National Mortgage Association collateral
GNMA – Government National Mortgage Association collateral
LOC – Letter of Credit
57
Delaware Minnesota High-Yield Municipal Bond Fund
Summary of abbreviations: (continued)
N.A. – National Association
SPA –Stand-by Purchase Agreement
USD – US Dollar
See accompanying notes, which are an integral part of the financial statements.
58
This page intentionally left blank.
Statements of assets and liabilities
August 31, 2019
| | | | | | | | | | | | |
| | | Delaware
Tax-Free
Minnesota Fund | | | Delaware
Tax-Free
Minnesota
Intermediate
Fund | | | Delaware
Minnesota High-Yield
Municipal Bond Fund | |
Assets: | | | | | | | | | | | | |
Investments, at value1 | | $ | 612,816,947 | | | $ | 80,813,573 | | | $ | 200,799,750 | |
Cash | | | 50,660 | | | | 178,359 | | | | 50,598 | |
Interest receivable | | | 6,919,317 | | | | 816,741 | | | | 2,224,509 | |
Receivable for fund shares sold | | | 476,137 | | | | 479,544 | | | | 48,647 | |
| | | | | | | | | | | | |
Total assets | | | 620,263,061 | | | | 82,288,217 | | | | 203,123,504 | |
| | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | |
Payable for securities purchased | | | 33,367,436 | | | | 1,358,984 | | | | 3,081,235 | |
Distribution payable | | | 381,672 | | | | 52,573 | | | | 134,386 | |
Investment management fees payable to affiliates | | | 197,067 | | | | 19,021 | | | | 62,166 | |
Payable for fund shares redeemed | | | 128,195 | | | | — | | | | 39,994 | |
Distribution fees payable to affiliates | | | 107,334 | | | | 13,233 | | | | 39,325 | |
Other accrued expenses | | | 104,445 | | | | 39,309 | | | | 61,309 | |
Dividend disbursing and transfer agent fees and expenses payable to affiliates | | | 4,885 | | | | 672 | | | | 1,645 | |
Trustees’ fees and expenses payable to affiliates | | | 4,289 | | | | 594 | | | | 1,432 | |
Accounting and administration expenses payable to affiliates | | | 2,211 | | | | 597 | | | | 970 | |
Legal fees payable to affiliates | | | 879 | | | | 122 | | | | 294 | |
Reports and statements to shareholders expenses payable to affiliates | | | 271 | | | | 37 | | | | 92 | |
| | | | | | | | | | | | |
Total liabilities | | | 34,298,684 | | | | 1,485,142 | | | | 3,422,848 | |
| | | | | | | | | | | | |
Total Net Assets | | $ | 585,964,377 | | | $ | 80,803,075 | | | $ | 199,700,656 | |
| | | | | | | | | | | | |
| | | |
Net Assets Consist of: | | | | | | | | | | | | |
Paid-in capital | | $ | 550,851,980 | | | $ | 76,335,861 | | | $ | 189,260,917 | |
Total distributable earnings (loss) | | | 35,112,397 | | | | 4,467,214 | | | | 10,439,739 | |
| | | | | | | | | | | | |
Total Net Assets | | $ | 585,964,377 | | | $ | 80,803,075 | | | $ | 199,700,656 | |
| | | | | | | | | | | | |
60
| | | | | | | | | | | | |
| | | Delaware
Tax-Free
Minnesota Fund | | | Delaware
Tax-Free
Minnesota
Intermediate
Fund | | | Delaware
Minnesota High-Yield
Municipal Bond Fund | |
Net Asset Value | | | | | | | | | | | | |
Class A: | | | | | | | | | | | | |
Net assets | | $ | 386,790,523 | | | $ | 55,917,764 | | | $ | 103,486,941 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | | | 30,499,990 | | | | 4,970,755 | | | | 9,232,846 | |
Net asset value per share | | $ | 12.68 | | | $ | 11.25 | | | $ | 11.21 | |
Sales charge | | | 4.50 | % | | | 2.75 | % | | | 4.50 | % |
Offering price per share, equal to net asset value per share/(1 – sales charge) | | $ | 13.28 | | | $ | 11.57 | | | $ | 11.74 | |
| | | |
Class C: | | | | | | | | | | | | |
Net assets | | $ | 29,932,934 | | | $ | 7,167,026 | | | $ | 21,058,429 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | | | 2,352,720 | | | | 635,845 | | | | 1,875,123 | |
Net asset value per share | | $ | 12.72 | | | $ | 11.27 | | | $ | 11.23 | |
| | | |
Institutional Class: | | | | | | | | | | | | |
Net assets | | $ | 169,240,920 | | | $ | 17,718,285 | | | $ | 75,155,286 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | | | 13,348,045 | | | | 1,574,493 | | | | 6,707,367 | |
Net asset value per share | | $ | 12.68 | | | $ | 11.25 | | | $ | 11.20 | |
| | | |
| | | | | | | | | | | | |
1Investments, at cost | | $ | 577,489,354 | | | $ | 76,245,308 | | | $ | 189,320,079 | |
See accompanying notes, which are an integral part of the financial statements.
61
Statements of operations
Year ended August 31, 2019
| | | | | | | | | | | | |
| | | Delaware
Tax-Free
Minnesota
Fund | | | Delaware
Tax-Free
Minnesota
Intermediate
Fund | | | Delaware
Minnesota
High-Yield
Municipal Bond Fund | |
Investment Income: | | | | | | | | | | | | |
Interest | | $ | 20,808,959 | | | $ | 2,772,625 | | | $ | 6,899,047 | |
| | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | |
Management fees | | | 3,006,000 | | | | 386,722 | | | | 981,891 | |
Distribution expenses—Class A | | | 941,672 | | | | 138,546 | | | | 242,471 | |
Distribution expenses—Class C | | | 309,709 | | | | 77,004 | | | | 203,445 | |
Dividend disbursing and transfer agent fees and expenses | | | 318,663 | | | | 50,739 | | | | 121,584 | |
Accounting and administration expenses | | | 139,913 | | | | 55,309 | | | | 73,368 | |
Registration fees | | | 71,809 | | | | 23,975 | | | | 20,945 | |
Reports and statements to shareholders expenses | | | 60,547 | | | | 15,265 | | | | 23,890 | |
Audit and tax fees | | | 46,673 | | | | 46,673 | | | | 46,673 | |
Legal fees | | | 39,441 | | | | 5,969 | | | | 11,158 | |
Trustees’ fees and expenses | | | 31,696 | | | | 4,451 | | | | 10,255 | |
Custodian fees | | | 14,487 | | | | 2,757 | | | | 6,163 | |
Other | | | 48,760 | | | | 17,659 | | | | 28,003 | |
| | | | | | | | | | | | |
| | | 5,029,370 | | | | 825,069 | | | | 1,769,846 | |
Less expenses waived | | | (464,307 | ) | | | (175,598 | ) | | | (180,699 | ) |
Less waived distribution expenses—Class A | | | — | | | | (55,419 | ) | | | — | |
Less expenses paid indirectly | | | (6,565 | ) | | | (632 | ) | | | (982 | ) |
| | | | | | | | | | | | |
Total operating expenses | | | 4,558,498 | | | | 593,420 | | | | 1,588,165 | |
| | | | | | | | | | | | |
Net Investment Income | | | 16,250,461 | | | | 2,179,205 | | | | 5,310,882 | |
| | | | | | | | | | | | |
| | | |
Net Realized and Unrealized Gain (Loss): | | | | | | | | | | | | |
Net realized gain (loss) on investments | | | 422,779 | | | | 5,373 | | | | (149,752 | ) |
Net change in unrealized appreciation (depreciation) of investments | | | 23,896,388 | | | | 2,996,731 | | | | 9,364,456 | |
| | | | | | | | | | | | |
Net Realized and Unrealized Gain | | | 24,319,167 | | | | 3,002,104 | | | | 9,214,704 | |
| | | | | | | | | | | | |
Net Increase in Net Assets Resulting from Operations | | $ | 40,569,628 | | | $ | 5,181,309 | | | $ | 14,525,586 | |
| | | | | | | | | | | | |
See accompanying notes, which are an integral part of the financial statements.
62
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Statements of changes in net assets
DelawareTax-Free Minnesota Fund
| | | | | | | | |
| | | Year ended | |
| | | 8/31/19 | | | 8/31/18 | |
Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
Net investment income | | $ | 16,250,461 | | | $ | 16,357,240 | |
Net realized gain | | | 422,779 | | | | 299,568 | |
Net change in unrealized appreciation (depreciation) | | | 23,896,388 | | | | (15,406,873 | ) |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 40,569,628 | | | | 1,249,935 | |
| | | | | | | | |
| | |
Dividends and Distributions to Shareholders from: | | | | | | | | |
Distributable earnings*: | | | | | | | | |
Class A | | | (11,013,173 | ) | | | (14,247,459 | ) |
Class C | | | (674,498 | ) | | | (1,274,213 | ) |
Institutional Class | | | (4,532,590 | ) | | | (3,638,192 | ) |
| | | | | | | | |
| | | (16,220,261 | ) | | | (19,159,864 | ) |
| | | | | | | | |
| | |
Capital Share Transactions: | | | | | | | | |
Proceeds from shares sold: | | | | | | | | |
Class A | | | 34,266,180 | | | | 38,349,082 | |
Class C | | | 3,098,448 | | | | 2,636,660 | |
Institutional Class | | | 83,152,024 | | | | 54,835,728 | |
| | |
Net asset value of shares issued upon reinvestment of dividends and distributions: | | | | | | | | |
Class A | | | 9,748,901 | | | | 12,235,255 | |
Class C | | | 653,678 | | | | 1,195,247 | |
Institutional Class | | | 3,221,296 | | | | 3,287,427 | |
| | | | | | | | |
| | | 134,140,527 | | | | 112,539,399 | |
| | | | | | | | |
64
| | | | | | | | |
| | | Year ended | |
| | | 8/31/19 | | | 8/31/18 | |
Capital Share Transactions (continued): | | | | | | | | |
Cost of shares redeemed: | | | | | | | | |
Class A | | $ | (63,834,709 | ) | | $ | (70,209,949 | ) |
Class C | | | (10,695,643 | ) | | | (17,670,338 | ) |
Institutional Class | | | (44,007,882 | ) | | | (24,104,373 | ) |
| | | | | | | | |
| | | (118,538,234 | ) | | | (111,984,660 | ) |
| | | | | | | | |
Increase in net assets derived from capital share transactions | | | 15,602,293 | | | | 554,739 | |
| | | | | | | | |
Net Increase (Decrease) in Net Assets | | | 39,951,660 | | | | (17,355,190 | ) |
| | |
Net Assets: | | | | | | | | |
Beginning of year | | | 546,012,717 | | | | 563,367,907 | |
| | | | | | | | |
End of year1 | | $ | 585,964,377 | | | $ | 546,012,717 | |
| | | | | | | | |
| 1 | Net Assets – End of year includes distributions in excess of net investment income of $240,388 in 2018. The Securities and Exchange Commission eliminated the requirement to disclose undistributed (distributions in excess of) net investment income in 2018. |
| * | For the year ended Aug. 31, 2019, the Fund has adopted amendments to RegulationS-X (see Note 10 in “Notes to financial statements”). For the year ended Aug. 31, 2018, the dividends and distributions to shareholders were as follows: |
| | | | | | | | | | | | |
| | | Class A | | | Class C | | | Institutional
Class | |
Dividends from net investment income | | $ | (12,134,393 | ) | | $ | (1,024,249 | ) | | $ | (3,183,679 | ) |
Distributions from net realized gains | | | (2,113,066 | ) | | | (249,964 | ) | | | (454,513 | ) |
See accompanying notes, which are an integral part of the financial statements.
65
Statements of changes in net assets
DelawareTax-Free Minnesota Intermediate Fund
| | | | | | | | |
| | | Year ended | |
| | | 8/31/19 | | | 8/31/18 | |
Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
Net investment income | | $ | 2,179,205 | | | $ | 2,428,417 | |
Net realized gain | | | 5,373 | | | | 72,266 | |
Net change in unrealized appreciation (depreciation) | | | 2,996,731 | | | | (2,687,546 | ) |
| | | | | | | | |
Net increase (decrease) in net assets resulting from operations | | | 5,181,309 | | | | (186,863 | ) |
| | | | | | | | |
| | |
Dividends and Distributions to Shareholders from: | | | | | | | | |
Distributable earnings*: | | | | | | | | |
Class A | | | (1,593,527 | ) | | | (2,031,660 | ) |
Class C | | | (156,332 | ) | | | (249,902 | ) |
Institutional Class | | | (428,375 | ) | | | (518,897 | ) |
| | | | | | | | |
| | | (2,178,234 | ) | | | (2,800,459 | ) |
| | | | | | | | |
| | |
Capital Share Transactions: | | | | | | | | |
Proceeds from shares sold: | | | | | | | | |
Class A | | | 5,671,277 | | | | 4,764,864 | |
Class C | | | 898,626 | | | | 670,790 | |
Institutional Class | | | 8,405,771 | | | | 5,446,733 | |
| | |
Net asset value of shares issued upon reinvestment of dividends and distributions: | | | | | | | | |
Class A | | | 1,357,246 | | | | 1,731,184 | |
Class C | | | 149,449 | | | | 237,000 | |
Institutional Class | | | 397,172 | | | | 499,540 | |
| | | | | | | | |
| | | 16,879,541 | | | | 13,350,111 | |
| | | | | | | | |
66
| | | | | | | | |
| | | Year ended | |
| | | 8/31/19 | | | 8/31/18 | |
Capital Share Transactions (continued): | | | | | | | | |
Cost of shares redeemed: | | | | | | | | |
Class A | | $ | (12,485,742 | ) | | $ | (14,067,022 | ) |
Class C | | | (2,719,349 | ) | | | (3,881,824 | ) |
Institutional Class | | | (3,186,459 | ) | | | (12,720,892 | ) |
| | | | | | | | |
| | | (18,391,550 | ) | | | (30,669,738 | ) |
| | | | | | | | |
Decrease in net assets derived from capital share transactions | | | (1,512,009 | ) | | | (17,319,627 | ) |
| | | | | | | | |
Net Increase (Decrease) in Net Assets | | | 1,491,066 | | | | (20,306,949 | ) |
| | |
Net Assets: | | | | | | | | |
Beginning of year | | | 79,312,009 | | | | 99,618,958 | |
| | | | | | | | |
End of year1 | | $ | 80,803,075 | | | $ | 79,312,009 | |
| | | | | | | | |
| 1 | Net Assets – End of year includes distributions in excess of net investment income of $4,190 in 2018. The Securities and Exchange Commission eliminated the requirement to disclose undistributed (distributions in excess of) net investment income in 2018. |
| * | For the year ended Aug. 31, 2019, the Fund has adopted amendments to RegulationS-X (see Note 10 in “Notes to financial statements”). For the year ended Aug. 31, 2018, the dividends and distributions to shareholders were as follows: |
| | | | | | | | | | | | |
| | | Class A | | | Class C | | | Institutional
Class | |
Dividends from net investment income | | $ | (1,771,652 | ) | | $ | (205,693 | ) | | $ | (450,722 | ) |
Distributions from net realized gain | | | (260,008 | ) | | | (44,209 | ) | | | (68,175 | ) |
See accompanying notes, which are an integral part of the financial statements.
67
Statements of changes in net assets
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Year ended | |
| | | 8/31/19 | | | 8/31/18 | |
Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
Net investment income | | $ | 5,310,882 | | | $ | 5,142,414 | |
Net realized loss | | | (149,752 | ) | | | (71,151 | ) |
Net change in unrealized appreciation (depreciation) | | | 9,364,456 | | | | (3,485,137 | ) |
| | | | | | | | |
Net increase in net assets resulting from operations | | | 14,525,586 | | | | 1,586,126 | |
| | | | | | | | |
| | |
Dividends and Distributions to Shareholders from: | | | | | | | | |
Distributable earnings*: | | | | | | | | |
Class A | | | (2,884,919 | ) | | | (2,914,141 | ) |
Class C | | | (452,855 | ) | | | (667,362 | ) |
Institutional Class | | | (1,963,896 | ) | | | (1,591,025 | ) |
| | | | | | | | |
| | | (5,301,670 | ) | | | (5,172,528 | ) |
| | | | | | | | |
| | |
Capital Share Transactions: | | | | | | | | |
Proceeds from shares sold: | | | | | | | | |
Class A | | | 11,808,073 | | | | 16,270,537 | |
Class C | | | 3,143,949 | | | | 3,339,629 | |
Institutional Class | | | 31,389,740 | | | | 24,537,706 | |
| | |
Net asset value of shares issued upon reinvestment of dividends and distributions: | | | | | | | | |
Class A | | | 2,586,210 | | | | 2,338,287 | |
Class C | | | 420,887 | | | | 598,928 | |
Institutional Class | | | 1,877,843 | | | | 1,536,871 | |
| | | | | | | | |
| | | 51,226,702 | | | | 48,621,958 | |
| | | | | | | | |
68
| | | | | | | | |
| | | Year ended | |
| | | 8/31/19 | | | 8/31/18 | |
Capital Share Transactions (continued): | | | | | | | | |
Cost of shares redeemed: | | | | | | | | |
Class A | | $ | (14,747,115 | ) | | $ | (16,152,757 | ) |
Class C | | | (5,154,694 | ) | | | (13,869,963 | ) |
Institutional Class | | | (14,980,335 | ) | | | (16,399,941 | ) |
| | | | | | | | |
| | | (34,882,144 | ) | | | (46,422,661 | ) |
| | | | | | | | |
Increase in net assets derived from capital share transactions | | | 16,344,558 | | | | 2,199,297 | |
| | | | | | | | |
Net Increase (Decrease) in Net Assets | | | 25,568,474 | | | | (1,387,105 | ) |
| | |
Net Assets: | | | | | | | | |
Beginning of year | | | 174,132,182 | | | | 175,519,287 | |
| | | | | | | | |
End of year1 | | $ | 199,700,656 | | | $ | 174,132,182 | |
| | | | | | | | |
| 1 | Net Assets - There was no undistributed net investment income in 2018. The Securities and Exchange Commission eliminated the requirement to disclose undistributed (distributions in excess of) net investment income in 2018. |
| * | For the year ended Aug. 31, 2019, the Fund has adopted amendments to RegulationS-X (see Note 10 in “Notes to financial statements”). For the year ended Aug. 31, 2018, the dividends and distributions to shareholders were as follows: |
| | | | | | | | | | | | |
| | | Class A | | | Class C | | | Institutional
Class | |
Dividends from net investment income | | $ | (2,914,141 | ) | | $ | (667,362 | ) | | $ | (1,591,025 | ) |
See accompanying notes, which are an integral part of the financial statements.
69
Financial highlights
DelawareTax-Free Minnesota 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 waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total 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 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. |
See accompanying notes, which are an integral part of the financial statements.
70
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Year ended | | | | | | | | | | | |
| | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | | | | | 8/31/15 | |
| | $ | 12.14 | | | | | $ | 12.54 | | | | | $ | 12.87 | | | | | $ | 12.60 | | | | | $ | 12.67 | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.36 | | | | | | 0.37 | | | | | | 0.38 | | | | | | 0.41 | | | | | | 0.44 | |
| | | 0.54 | | | | | | (0.34 | ) | | | | | (0.32 | ) | | | | | 0.28 | | | | | | (0.06 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.90 | | | | | | 0.03 | | | | | | 0.06 | | | | | | 0.69 | | | | | | 0.38 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.36 | ) | | | | | (0.37 | ) | | | | | (0.39 | ) | | | | | (0.42 | ) | | | | | (0.45 | ) |
| | | — | | | | | | (0.06 | ) | | | | | — | | | | | | — | | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.36 | ) | | | | | (0.43 | ) | | | | | (0.39 | ) | | | | | (0.42 | ) | | | | | (0.45 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 12.68 | | | | | $ | 12.14 | | | | | $ | 12.54 | | | | | $ | 12.87 | | | | | $ | 12.60 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 7.54% | | | | | | 0.26% | | | | | | 0.49% | | | | | | 5.52% | | | | | | 3.02% | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 386,790 | | | | | $ | 390,477 | | | | | $ | 423,497 | | | | | $ | 481,066 | | | | | $ | 479,275 | |
| | | 0.85% | | | | | | 0.85% | | | | | | 0.85% | | | | | | 0.85% | | | | | | 0.87% | |
| | | 0.93% | | | | | | 0.94% | | | | | | 0.95% | | | | | | 0.95% | | | | | | 0.96% | |
| | | 2.92% | | | | | | 2.99% | | | | | | 3.08% | | | | | | 3.25% | | | | | | 3.51% | |
| | | 2.84% | | | | | | 2.90% | | | | | | 2.98% | | | | | | 3.15% | | | | | | 3.42% | |
| | | | 13% | | | | | | 16% | | | | | | 17% | | | | | | 15% | | | | | | 11% | |
71
Financial highlights
DelawareTax-Free Minnesota 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 waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total 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 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. |
See accompanying notes, which are an integral part of the financial statements.
72
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Year ended | | | | | | | | | | | |
| | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | | | | | 8/31/15 | |
| | $ | 12.18 | | | | | $ | 12.58 | | | | | $ | 12.91 | | | | | $ | 12.64 | | | | | $ | 12.71 | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.27 | | | | | | 0.28 | | | | | | 0.29 | | | | | | 0.32 | | | | | | 0.35 | |
| | | 0.54 | | | | | | (0.34 | ) | | | | | (0.33 | ) | | | | | 0.27 | | | | | | (0.07 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.81 | | | | | | (0.06 | ) | | | | | (0.04 | ) | | | | | 0.59 | | | | | | 0.28 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.27 | ) | | | | | (0.28 | ) | | | | | (0.29 | ) | | | | | (0.32 | ) | | | | | (0.35 | ) |
| | | — | | | | | | (0.06 | ) | | | | | — | | | | | | — | | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.27 | ) | | | | | (0.34 | ) | | | | | (0.29 | ) | | | | | (0.32 | ) | | | | | (0.35 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 12.72 | | | | | $ | 12.18 | | | | | $ | 12.58 | | | | | $ | 12.91 | | | | | $ | 12.64 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 6.73% | | | | | | (0.49% | ) | | | | | (0.25% | ) | | | | | 4.73% | | | | | | 2.25% | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 29,933 | | | | | $ | 35,642 | | | | | $ | 51,045 | | | | | $ | 53,502 | | | | | $ | 45,393 | |
| | | 1.60% | | | | | | 1.60% | | | | | | 1.60% | | | | | | 1.60% | | | | | | 1.62% | |
| | | 1.68% | | | | | | 1.69% | | | | | | 1.70% | | | | | | 1.70% | | | | | | 1.71% | |
| | | 2.17% | | | | | | 2.24% | | | | | | 2.33% | | | | | | 2.50% | | | | | | 2.76% | |
| | | 2.09% | | | | | | 2.15% | | | | | | 2.23% | | | | | | 2.40% | | | | �� | | 2.67% | |
| | | | 13% | | | | | | 16% | | | | | | 17% | | | | | | 15% | | | | | | 11% | |
73
Financial highlights
DelawareTax-Free Minnesota 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 waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total 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 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. |
See accompanying notes, which are an integral part of the financial statements.
74
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Year ended | | | | | | | | | | | |
| | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | | | | | 8/31/15 | |
| | $ | 12.14 | | | | | $ | 12.54 | | | | | $ | 12.87 | | | | | $ | 12.59 | | | | | $ | 12.66 | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.39 | | | | | | 0.40 | | | | | | 0.41 | | | | | | 0.45 | | | | | | 0.48 | |
| | | 0.54 | | | | | | (0.34 | ) | | | | | (0.32 | ) | | | | | 0.28 | | | | | | (0.07 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.93 | | | | | | 0.06 | | | | | | 0.09 | | | | | | 0.73 | | | | | | 0.41 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.39 | ) | | | | | (0.40 | ) | | | | | (0.42 | ) | | | | | (0.45 | ) | | | | | (0.48 | ) |
| | | — | | | | | | (0.06 | ) | | | | | — | | | | | | — | | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.39 | ) | | | | | (0.46 | ) | | | | | (0.42 | ) | | | | | (0.45 | ) | | | | | (0.48 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 12.68 | | | | | $ | 12.14 | | | | | $ | 12.54 | | | | | $ | 12.87 | | | | | $ | 12.59 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 7.81% | | | | | | 0.51% | | | | | | 0.75% | | | | | | 5.87% | | | | | | 3.27% | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 169,241 | | | | | $ | 119,894 | | | | | $ | 88,826 | | | | | $ | 53,133 | | | | | $ | 32,084 | |
| | | 0.60% | | | | | | 0.60% | | | | | | 0.60% | | | | | | 0.60% | | | | | | 0.62% | |
| | | 0.68% | | | | | | 0.69% | | | | | | 0.70% | | | | | | 0.70% | | | | | | 0.71% | |
| | | 3.17% | | | | | | 3.24% | | | | | | 3.33% | | | | | | 3.50% | | | | | | 3.76% | |
| | | 3.09% | | | | | | 3.15% | | | | | | 3.23% | | | | | | 3.40% | | | | | | 3.67% | |
| | | | 13% | | | | | | 16% | | | | | | 17% | | | | | | 15% | | | | | | 11% | |
75
Financial highlights
DelawareTax-Free Minnesota 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 return2 |
|
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total 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 return during all of the periods reflects waivers by the manager and/or distributor. Performance would have been lower had the waivers not been in effect. |
See accompanying notes, which are an integral part of the financial statements.
76
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Year ended | | | | | | | | | | | |
| | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | | | | | 8/31/15 | |
| | $ | 10.82 | | | | | $ | 11.17 | | | | | $ | 11.44 | | | | | $ | 11.22 | | | | | $ | 11.32 | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.31 | | | | | | 0.30 | | | | | | 0.31 | | | | | | 0.33 | | | | | | 0.34 | |
| | | 0.43 | | | | | | (0.31 | ) | | | | | (0.25 | ) | | | | | 0.22 | | | | | | (0.10 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.74 | | | | | | (0.01 | ) | | | | | 0.06 | | | | | | 0.55 | | | | | | 0.24 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.31 | ) | | | | | (0.30 | ) | | | | | (0.31 | ) | | | | | (0.33 | ) | | | | | (0.34 | ) |
| | | — | | | | | | (0.04 | ) | | | | | (0.02 | ) | | | | | — | | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.31 | ) | | | | | (0.34 | ) | | | | | (0.33 | ) | | | | | (0.33 | ) | | | | | (0.34 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 11.25 | | | | | $ | 10.82 | | | | | $ | 11.17 | | | | | $ | 11.44 | | | | | $ | 11.22 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 7.00% | | | | | | (0.01%) | | | | | | 0.55% | | | | | | 4.98% | | | | | | 2.12% | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 55,918 | | | | | $ | 59,284 | | | | | $ | 68,934 | | | | | $ | 79,730 | | | | | $ | 84,663 | |
| | | 0.71% | | | | | | 0.79% | | | | | | 0.84% | | | | | | 0.84% | | | | | | 0.85% | |
| | | 1.04% | | | | | | 1.00% | | | | | | 0.99% | | | | | | 0.97% | | | | | | 0.98% | |
| | | 2.87% | | | | | | 2.77% | | | | | | 2.79% | | | | | | 2.92% | | | | | | 2.98% | |
| | | 2.54% | | | | | | 2.56% | | | | | | 2.64% | | | | | | 2.79% | | | | | | 2.85% | |
| | | | 19% | | | | | | 17% | | | | | | 22% | | | | | | 14% | | | | | | 14% | |
77
Financial highlights
DelawareTax-Free Minnesota 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 return2 |
|
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total 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 return during all of the periods shown reflects waivers by the manager. Performance would have been lower had the waivers not been in effect. |
See accompanying notes, which are an integral part of the financial statements.
78
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Year ended | | | | | | | | | | | |
| | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | | | | | 8/31/15 | |
| | $ | 10.84 | | | | | $ | 11.19 | | | | | $ | 11.47 | | | | | $ | 11.24 | | | | | $ | 11.35 | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.22 | | | | | | 0.21 | | | | | | 0.22 | | | | | | 0.24 | | | | | | 0.24 | |
| | | 0.43 | | | | | | (0.31 | ) | | | | | (0.26 | ) | | | | | 0.23 | | | | | | (0.11 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.65 | | | | | | (0.10 | ) | | | | | (0.04 | ) | | | | | 0.47 | | | | | | 0.13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.22 | ) | | | | | (0.21 | ) | | | | | (0.22 | ) | | | | | (0.24 | ) | | | | | (0.24 | ) |
| | | — | | | | | | (0.04 | ) | | | | | (0.02 | ) | | | | | — | | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.22 | ) | | | | | (0.25 | ) | | | | | (0.24 | ) | | | | | (0.24 | ) | | | | | (0.24 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 11.27 | | | | | $ | 10.84 | | | | | $ | 11.19 | | | | | $ | 11.47 | | | | | $ | 11.24 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 6.09% | | | | | | (0.86%) | | | | | | (0.39%) | | | | | | 4.17% | | | | | | 1.16% | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 7,167 | | | | | $ | 8,558 | | | | | $ | 11,885 | | | | | $ | 13,315 | | | | | $ | 11,740 | |
| | | 1.56% | | | | | | 1.64% | | | | | | 1.69% | | | | | | 1.69% | | | | | | 1.70% | |
| | | 1.79% | | | | | | 1.75% | | | | | | 1.74% | | | | | | 1.72% | | | | | | 1.73% | |
| | | 2.02% | | | | | | 1.92% | | | | | | 1.94% | | | | | | 2.07% | | | | | | 2.13% | |
| | | 1.79% | | | | | | 1.81% | | | | | | 1.89% | | | | | | 2.04% | | | | | | 2.10% | |
| | | | 19% | | | | | | 17% | | | | | | 22% | | | | | | 14% | | | | | | 14% | |
79
Financial highlights
DelawareTax-Free Minnesota 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 return2 |
|
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total 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 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. |
See accompanying notes, which are an integral part of the financial statements.
80
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Year ended | | | | | | | | | | | |
| | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | | | | | 8/31/15 | |
| | $ | 10.83 | | | | | $ | 11.17 | | | | | $ | 11.45 | | | | | $ | 11.22 | | | | | $ | 11.33 | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.33 | | | | | | 0.32 | | | | | | 0.33 | | | | | | 0.35 | | | | | | 0.35 | |
| | | 0.42 | | | | | | (0.30 | ) | | | | | (0.26 | ) | | | | | 0.23 | | | | | | (0.11 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.75 | | | | | | 0.02 | | | | | | 0.07 | | | | | | 0.58 | | | | | | 0.24 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.33 | ) | | | | | (0.32 | ) | | | | | (0.33 | ) | | | | | (0.35 | ) | | | | | (0.35 | ) |
| | | — | | | | | | (0.04 | ) | | | | | (0.02 | ) | | | | | — | | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.33 | ) | | | | | (0.36 | ) | | | | | (0.35 | ) | | | | | (0.35 | ) | | | | | (0.35 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 11.25 | | | | | $ | 10.83 | | | | | $ | 11.17 | | | | | $ | 11.45 | | | | | $ | 11.22 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 7.06% | | | | | | 0.23% | | | | | | 0.61% | | | | | | 5.22% | | | | | | 2.18% | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 17,718 | | | | | $ | 11,470 | | | | | $ | 18,800 | | | | | $ | 12,694 | | | | | $ | 4,402 | |
| | | 0.56% | | | | | | 0.64% | | | | | | 0.69% | | | | | | 0.69% | | | | | | 0.70% | |
| | | 0.79% | | | | | | 0.75% | | | | | | 0.74% | | | | | | 0.72% | | | | | | 0.73% | |
| | | 3.02% | | | | | | 2.92% | | | | | | 2.94% | | | | | | 3.07% | | | | | | 3.13% | |
| | | 2.79% | | | | | | 2.81% | | | | | | 2.89% | | | | | | 3.04% | | | | | | 3.10% | |
| | | | 19% | | | | | | 17% | | | | | | 22% | | | | | | 14% | | | | | | 14% | |
81
Financial highlights
Delaware Minnesota 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 waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total 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 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. |
See accompanying notes, which are an integral part of the financial statements.
82
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended | | | | | | | | | | | | | |
| | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | | | | | 8/31/15 | |
| | $ | 10.66 | | | | | $ | 10.88 | | | | | $ | 11.13 | | | | | $ | 10.84 | | | | | $ | 10.88 | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.32 | | | | | | 0.32 | | | | | | 0.33 | | | | | | 0.36 | | | | | | 0.38 | |
| | | 0.55 | | | | | | (0.22 | ) | | | | | (0.25 | ) | | | | | 0.29 | | | | | | (0.04 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.87 | | | | | | 0.10 | | | | | | 0.08 | | | | | | 0.65 | | | | | | 0.34 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.32 | ) | | | | | (0.32 | ) | | | | | (0.33 | ) | | | | | (0.36 | ) | | | | | (0.38 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.32 | ) | | | | | (0.32 | ) | | | | | (0.33 | ) | | | | | (0.36 | ) | | | | | (0.38 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 11.21 | | | | | $ | 10.66 | | | | | $ | 10.88 | | | | | $ | 11.13 | | | | | $ | 10.84 | |
| | | | | | | | | |
| | | 8.33 | % | | | | | 0.95 | % | | | | | 0.84 | % | | | | | 6.12 | % | | | | | 3.20 | % |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | $ | 103,487 | | | | | $ | 98,980 | | | | | $ | 98,491 | | | | | $ | 121,168 | | | | | $ | 122,618 | |
| | | 0.89% | | | | | | 0.89% | | | | | | 0.89% | | | | | | 0.89% | | | | | | 0.91% | |
| | | 0.99% | | | | | | 0.99% | | | | | | 0.99% | | | | | | 0.98% | | | | | | 1.01% | |
| | | 2.97% | | | | | | 2.98% | | | | | | 3.08% | | | | | | 3.23% | | | | | | 3.52% | |
| | | 2.87% | | | | | | 2.88% | | | | | | 2.98% | | | | | | 3.14% | | | | | | 3.42% | |
| | | | 12% | | | | | | 14% | | | | | | 19% | | | | | | 15% | | | | | | 16% | |
83
Financial highlights
Delaware Minnesota 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 waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total 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 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. |
See accompanying notes, which are an integral part of the financial statements.
84
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Year ended | |
| | | | 8/31/19 | | | | | | 8/31/18 | | | | | | 8/31/17 | | | | | | 8/31/16 | | | | | | 8/31/15 | |
| | | | | | | | | |
| | | | $ | 10.68 | | | | | | | $ | 10.90 | | | | | | | $ | 11.15 | | | | | | | $ | 10.87 | | | | | | | $ | 10.90 | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 0.24 | | | | | | | | 0.24 | | | | | | | | 0.25 | | | | | | | | 0.27 | | | | | | | | 0.30 | |
| | | | | 0.55 | | | | | | | | (0.22 | ) | | | | | | | (0.25 | ) | | | | | | | 0.29 | | | | | | | | (0.03 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 0.79 | | | | | | | | 0.02 | | | | | | | | — | | | | | | | | 0.56 | | | | | | | | 0.27 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | (0.24 | ) | | | | | | | (0.24 | ) | | | | | | | (0.25 | ) | | | | | | | (0.28 | ) | | | | | | | (0.30 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | (0.24 | ) | | | | | | | (0.24 | ) | | | | | | | (0.25 | ) | | | | | | | (0.28 | ) | | | | | | | (0.30 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | $ | 11.23 | | | | | | | $ | 10.68 | | | | | | | $ | 10.90 | | | | | | | $ | 11.15 | | | | | | | $ | 10.87 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | 7.51% | | | | | | | | 0.19% | | | | | | | | 0.09% | | | | | | | | 5.22% | | | | | | | | 2.53% | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | $ | 21,059 | | | | | | | $ | 21,651 | | | | | | | $ | 32,223 | | | | | | | $ | 35,751 | | | | | | | $ | 32,174 | |
| | | | | 1.64% | | | | | | | | 1.64% | | | | | | | | 1.64% | | | | | | | | 1.64% | | | | | | | | 1.66% | |
| | | | | 1.74% | | | | | | | | 1.74% | | | | | | | | 1.74% | | | | | | | | 1.73% | | | | | | | | 1.76% | |
| | | | | 2.22% | | | | | | | | 2.23% | | | | | | | | 2.33% | | | | | | | | 2.48% | | | | | | | | 2.77% | |
| | | | | 2.12% | | | | | | | | 2.13% | | | | | | | | 2.23% | | | | | | | | 2.39% | | | | | | | | 2.67% | |
| | | | | | 12% | | | | | | | | 14% | | | | | | | | 19% | | | | | | | | 15% | | | | | | | | 16% | |
85
Financial highlights
Delaware Minnesota 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 waived |
Ratio of net investment income to average net assets |
Ratio of net investment income to average net assets prior to fees waived |
Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total 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 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. |
See accompanying notes, which are an integral part of the financial statements.
86
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Year ended | |
| | | | 8/31/19 | | | | | | 8/31/18 | | | | | | 8/31/17 | | | | | | 8/31/16 | | | | | | 8/31/15 | |
| | | | $ | 10.66 | | | | | | | $ | 10.87 | | | | | | | $ | 11.12 | | | | | | | $ | 10.84 | | | | | | | $ | 10.88 | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 0.35 | | | | | | | | 0.35 | | | | | | | | 0.36 | | | | | | | | 0.38 | | | | | | | | 0.41 | |
| | | | | 0.54 | | | | | | | | (0.21 | ) | | | | | | | (0.25 | ) | | | | | | | 0.29 | | | | | | | | (0.04 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | 0.89 | | | | | | | | 0.14 | | | | | | | | 0.11 | | | | | | | | 0.67 | | | | | | | | 0.37 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | (0.35 | ) | | | | | | | (0.35 | ) | | | | | | | (0.36 | ) | | | | | | | (0.39 | ) | | | | | | | (0.41 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | (0.35 | ) | | | | | | | (0.35 | ) | | | | | | | (0.36 | ) | | | | | | | (0.39 | ) | | | | | | | (0.41 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | $ | 11.20 | | | | | | | $ | 10.66 | | | | | | | $ | 10.87 | | | | | | | $ | 11.12 | | | | | | | $ | 10.84 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | | | 8.50% | | | | | | | | 1.30% | | | | | | | | 1.09% | | | | | | | | 6.28% | | | | | | | | 3.46% | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | $ | 75,155 | | | | | | | $ | 53,501 | | | | | | | $ | 44,805 | | | | | | | $ | 31,206 | | | | | | | $ | 14,841 | |
| | | | | 0.64% | | | | | | | | 0.64% | | | | | | | | 0.64% | | | | | | | | 0.64% | | | | | | | | 0.66% | |
| | | | | 0.74% | | | | | | | | 0.74% | | | | | | | | 0.74% | | | | | | | | 0.73% | | | | | | | | 0.76% | |
| | | | | 3.22% | | | | | | | | 3.23% | | | | | | | | 3.33% | | | | | | | | 3.48% | | | | | | | | 3.77% | |
| | | | | 3.12% | | | | | | | | 3.13% | | | | | | | | 3.23% | | | | | | | | 3.39% | | | | | | | | 3.67% | |
| | | | | | 12% | | | | | | | | 14% | | | | | | | | 19% | | | | | | | | 15% | | | | | | | | 16% | |
87
| | |
Notes to financial statements | | |
Delaware Funds® by Macquarie Minnesota municipal bond funds | | August 31, 2019 |
Voyageur Mutual Funds is organized as a Delaware statutory trust and offers five series: Delaware Minnesota High-Yield Municipal Bond Fund, Delaware National High-Yield Municipal Bond Fund, DelawareTax-Free California Fund, DelawareTax-Free Idaho Fund, and DelawareTax-Free New York Fund. VoyageurTax-Free Funds is organized as a Delaware statutory trust and offers DelawareTax-Free Minnesota Fund. Voyageur IntermediateTax-Free Funds is organized as a Delaware statutory trust and offers DelawareTax-Free Minnesota Intermediate Fund. Voyageur Mutual Funds, VoyageurTax-Free Funds, and Voyageur IntermediateTax-Free Funds are each referred to as a Trust, or collectively, as the Trusts. These financial statements and the related notes pertain to DelawareTax-Free Minnesota Fund, DelawareTax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund (each a Fund, or collectively, the Funds). Each Fund is anopen-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 maximumfront-end sales charge of 4.50% for DelawareTax-Free Minnesota Fund and Delaware Minnesota High-Yield Municipal Bond Fund, and 2.75% for DelawareTax-Free Minnesota Intermediate Fund. Class A share purchases of $1,000,000 or more will incur a contingent deferred sales charge (CDSC) instead of afront-end sales charge of 1.00%, which will be incurred if redeemed during the first year, and 0.50% during the second year for DelawareTax-Free Minnesota Fund and Delaware Minnesota High-Yield Municipal Bond Fund, and 0.75% for DelawareTax-Free Minnesota 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 DelawareTax-Free Minnesota Fund is to seek as high a level of current income exempt from federal income tax and from Minnesota state personal income taxes as is consistent with preservation of capital.
The investment objective of DelawareTax-Free Minnesota Intermediate Fund is to seek to provide investors with preservation of capital and, secondarily, current income exempt from federal income tax and Minnesota state personal income taxes, by maintaining a dollar-weighted average effective portfolio maturity of 10 years or less.
The investment objective of Delaware Minnesota High-Yield Municipal Bond Fund is to seek a high level of current income exempt from federal income tax and from Minnesota state personal income taxes, primarily through investment in medium- and lower-grade municipal obligations.
1. Significant Accounting Policies
Each Fund follows accounting and reporting guidance under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services — Investment Companies. The following accounting policies are in accordance with US generally accepted accounting principles (US GAAP) and are consistently followed by the Funds.
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
88
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 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, 2019 and for all open tax years (years ended Aug. 31, 2016–Aug. 31, 2018), 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, 2019, 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— 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
89
Notes to financial statements
Delaware Funds® by Macquarie Minnesota municipal bond funds
1. Significant Accounting Policies (continued)
distribute more frequently, if necessary for tax purposes. Dividends and distributions, if any, are recorded on theex-dividend date.
Each Fund receives earnings credits from its custodian when positive cash balances are maintained, which may be used to offset custody fees. The expenses paid under this arrangement are included on the “Statements of operations” under “Custodian fees” with the corresponding expenses offset included under “Less expenses paid indirectly.” For the year ended Aug. 31, 2019, each Fund earned the following amounts under this arrangement:
| | | | | | |
| | | | | Delaware Tax-Free | | Delaware Minnesota |
| | | Delaware Tax-Free | | Minnesota | | High-Yield Municipal |
| | | Minnesota Fund | | Intermediate Fund | | Bond Fund |
| | $6,154 | | $557 | | $822 |
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 expenses paid under this arrangement are included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses” with the corresponding expenses offset included under “Less expenses paid indirectly.” For the year ended Aug. 31, 2019, each Fund earned the following amounts under this arrangement:
| | | | | | |
| | | | | Delaware Tax-Free | | Delaware Minnesota |
| | | Delaware Tax-Free | | Minnesota | | High-Yield Municipal |
| | | Minnesota Fund | | Intermediate Fund | | Bond Fund |
| | $411 | | $75 | | $160 |
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
Minnesota Fund | | Delaware Tax-Free
Minnesota
Intermediate Fund | | Delaware Minnesota
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 fees 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, taxes, interest, acquired fund fees and expenses, inverse floater program expenses, short sale, dividend and 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
90
following percentage of each Fund’s average daily net assets from Sept. 1, 2018 through Aug. 31, 2019.* These waivers and reimbursements apply only to expenses paid directly by each Fund and may only be terminated by agreement of DMC and each Fund. The waivers and reimbursements are accrued daily and received monthly.
| | | | | | |
| | | Delaware | | Delaware Tax-Free | | Delaware Minnesota |
| | | Tax-Free | | Minnesota | | High-Yield Municipal |
| | | Minnesota Fund | | Intermediate Fund | | Bond Fund |
Operating expense limitation as a percentage of average daily net assets | | 0.60% | | 0.56% | | 0.64% |
Delaware Investments Fund Services Company (DIFSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to each Fund. 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 rates: 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, 2019, each Fund was charged for these services as follows:
| | | | | | |
| | | Delaware | | Delaware Tax-Free | | Delaware Minnesota |
| | | Tax-Free | | Minnesota | | High-Yield Municipal |
| | | Minnesota Fund | | Intermediate Fund | | Bond Fund |
| | $24,864 | | $6,928 | | $10,757 |
DIFSC is also the transfer agent and dividend disbursing agent of the Funds. For these services, 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 rates: 0.014% of the first $20 billion; 0.011% of the next $5 billion; 0.007% of the next $5 billion; and 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 shareholder services 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 disbursing and transfer agent fees and expenses.” For the year ended Aug. 31, 2019, each Fund was charged for these services as follows:
| | | | | | |
| | | Delaware | | Delaware Tax-Free | | Delaware Minnesota |
| | | Tax-Free | | Minnesota | | High-Yield Municipal |
| | | Minnesota Fund | | Intermediate Fund | | Bond Fund |
| | $45,872 | | $6,381 | | $14,890 |
91
Notes to financial statements
Delaware Funds® by Macquarie Minnesota municipal bond funds
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)
Pursuant to asub-transfer agency agreement between DIFSC and BNY Mellon Investment Servicing (US) Inc. (BNYMIS), BNYMIS provides certainsub-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.” The fees that are calculated daily and paid as invoices are received on a monthly or quarterly basis.
Pursuant to a distribution agreement and distribution plan, each Fund pays DDLP, the distributor and an affiliate of DMC, an annual12b-1 fee of 0.25% of the average daily net assets of the Class A shares and 1.00% of the average daily net assets of the Class C shares. DDLP has contracted to waive DelawareTax-Free Minnesota Intermediate Fund’s Class A shares12b-1 fee to 0.15% of average daily net assets from Sept. 1, 2018 through Aug. 31, 2019.** The fees are calculated daily and paid monthly. Institutional Class shares do not pay12b-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, 2019, each Fund was charged for internal legal, tax, and regulatory reporting services provided by DMC and/or its affiliates’ employees as follows:
| | | | | | |
| | | Delaware | | Delaware Tax-Free | | Delaware Minnesota |
| | | Tax-Free | | Minnesota | | High-Yield Municipal |
| | | Minnesota Fund | | Intermediate Fund | | Bond Fund |
| | $15,228 | | $2,187 | | $4,948 |
For the year ended Aug. 31, 2019, DDLP earned commissions on sales of Class A shares for each Fund as follows:
| | | | | | |
| | | Delaware | | Delaware Tax-Free | | Delaware Minnesota |
| | | Tax-Free | | Minnesota | | High-Yield Municipal |
| | | Minnesota Fund | | Intermediate Fund | | Bond Fund |
| | $20,347 | | $4,240 | | $9,705 |
For the year ended Aug. 31, 2019, DDLP received gross CDSC commissions on redemptions of each Fund’s Class A and Class C shares, respectively, and these commissions were entirely used to offset upfront commissions previously paid by DDLP to broker/dealers on sales of those shares. The amounts received were as follows:
| | | | | | | | | | | | | | | |
| | | Delaware | | Delaware Tax-Free | | Delaware Minnesota |
| | | Tax-Free | | Minnesota | | High-Yield Municipal |
| | | Minnesota Fund | | Intermediate Fund | | Bond Fund |
Class A | | | $ | 1,061 | | | | $ | — | | | | $ | — | |
Class C | | | | 1,081 | | | | | 194 | | | | | 2,911 | |
92
Trustees’ fees include expenses accrued by each Fund 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, 2019, were executed by each Fund pursuant to procedures adopted by the Boards designed to ensure compliance with Rule17a-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, 2019, the Funds engaged in the following Rule17a-7 securities purchases and securities sales, which resulted in net realized gains (losses) as follows:
| | | | | | | | | | | | |
| | | Delaware | | | Delaware Tax-Free | | | Delaware Minnesota | |
| | | Tax-Free | | | Minnesota | | | High-Yield Municipal | |
| | | Minnesota Fund | | | Intermediate Fund | | | Bond Fund | |
Purchases | | $ | 13,471,671 | | | | $5,878,927 | | | | $9,560,504 | |
Sales | | | 5,720,495 | | | | 9,275,841 | | | | 11,656,149 | |
Net realized gains (losses) | | | (24,941 | ) | | | 13,949 | | | | (116,537 | ) |
*For DelawareTax-Free Minnesota Fund and Delaware Minnesota High-Yield Municipal Bond Fund, the aggregate contractual waiver period covering this report is from Dec. 29, 2017 through Dec. 28, 2019. For DelawareTax-Free Minnesota Intermediate Fund, the aggregate contractual waiver period covering this report is from April 1, 2018 through Dec. 28, 2019.
**For DelawareTax-Free Minnesota Intermediate Fund Class A shares, the aggregate contractual waiver period covering this report is from Dec. 29, 2017 through Dec. 28, 2019.
3. Investments
For the year ended Aug. 31, 2019, each Fund made purchases and sales of investment securities other than short-term investments as follows:
| | | | | | | | | | | | |
| | | Delaware | | | Delaware Tax-Free | | | Delaware Minnesota | |
| | | Tax-Free | | | Minnesota | | | High-Yield Municipal | |
| | | Minnesota Fund | | | Intermediate Fund | | | Bond Fund | |
Purchases | | $ | 117,050,659 | | | | $14,601,815 | | | | $37,830,477 | |
Sales | | | 73,153,557 | | | | 16,818,305 | | | | 21,643,593 | |
93
Notes to financial statements
Delaware Funds® by Macquarie Minnesota municipal bond funds
3. Investments (continued)
The tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be the 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, 2019, the cost and unrealized appreciation (depreciation) of investments for federal income tax purposes for each Fund were as follows:
| | | | | | | | | | | | |
| | | Delaware | | | Delaware Tax-Free | | | Delaware Minnesota | |
| | | Tax-Free | | | Minnesota | | | High-Yield Municipal | |
| | | Minnesota Fund | | | Intermediate Fund | | | Bond Fund | |
Cost of investments | | $ | 577,717,653 | | | $ | 76,244,130 | | | $ | 189,390,637 | |
| | | | | | | | | | | | |
Aggregate unrealized appreciation of investments | | $ | 35,567,984 | | | $ | 4,569,465 | | | $ | 11,716,394 | |
Aggregate unrealized depreciation of investments | | | (468,690 | ) | | | (22 | ) | | | (307,281 | ) |
| | | | | | | | | | | | |
Net unrealized appreciation of investments | | $ | 35,099,294 | | | $ | 4,569,443 | | | $ | 11,409,113 | |
| | | | | | | | | | | | |
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, and 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, and 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 and fair valued securities) |
94
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, 2019:
| | | | | |
| | | Delaware
Tax-Free
Minnesota Fund |
| |
| | | Level 2 |
Securities | | | | | |
Assets: | | | | | |
Municipal Bonds | | | $ | 603,841,947 | |
Short-Term Investments | | | | 8,975,000 | |
| | | | | |
Total Value of Securities | | | $ | 612,816,947 | |
| | | | | |
| |
| | | Delaware Tax-Free
Minnesota
Intermediate Fund |
| |
| | | Level 2 |
Securities | | | | | |
Assets: | | | | | |
Municipal Bonds | | | $ | 79,063,573 | |
Short-Term Investments | | | | 1,750,000 | |
| | | | | |
Total Value of Securities | | | $ | 80,813,573 | |
| | | | | |
| |
| | | Delaware Minnesota
High-Yield Municipal
Bond Fund |
| |
| | | Level 2 |
Securities | | | | | |
Assets: | | | | | |
Municipal Bonds | | | $ | 197,624,750 | |
Short-Term Investments | | | | 3,175,000 | |
| | | | | |
Total Value of Securities | | | $ | 200,799,750 | |
| | | | | |
During the year ended Aug. 31, 2019, 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.
95
Notes to financial statements
Delaware Funds® by Macquarie Minnesota municipal bond funds
3. Investments (continued)
A reconciliation of Level 3 investments is presented when each Fund has a significant amount of Level 3 investments at the beginning, interim, or end of the period in relation to each Fund’s net assets. During the year ended Aug. 31, 2019, 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, 2019 and 2018 were as follows:
| | | | | | | | | | | | | | | |
| | | Delaware | | Delaware Tax-Free | | Delaware Minnesota |
| | | Tax-Free | | Minnesota | | High-Yield Municipal |
| | | Minnesota Fund | | Intermediate Fund | | Bond Fund |
Year ended 8/31/19 | | | | | | | | | | | | | | | |
Ordinary income | | | $ | 57 | | | | $ | — | | | | $ | 19 | |
Tax-exempt income | | | | 16,220,204 | | | | | 2,178,234 | | | | | 5,301,651 | |
| | | | | | | | | | | | | | | |
Total | | | $ | 16,220,261 | | | | $ | 2,178,234 | | | | $ | 5,301,670 | |
| | | | | | | | | | | | | | | |
| | | |
Year ended 8/31/18 | | | | | | | | | | | | | | | |
Ordinary income | | | $ | 24,273 | | | | $ | — | | | | $ | 30,002 | |
Tax-exempt income | | | | 16,367,225 | | | | | 2,431,471 | | | | | 5,142,526 | |
Long-term capital gains | | | | 2,768,366 | | | | | 368,988 | | | | | — | |
| | | | | | | | | | | | | | | |
Total | | | $ | 19,159,864 | | | | $ | 2,800,459 | | | | $ | 5,172,528 | |
| | | | | | | | | | | | | | | |
96
5. Components of Net Assets on a Tax Basis
As of Aug. 31, 2019, the components of net assets on a tax basis were as follows:
| | | | | | | | | | | | | | | |
| | | Delaware | | Delaware Tax-Free | | Delaware Minnesota |
| | | Tax-Free | | Minnesota | | High-Yield Municipal |
| | | Minnesota Fund | | Intermediate Fund | | Bond Fund |
Shares of beneficial interest | | | $ | 550,851,980 | | | | $ | 76,335,861 | | | | $ | 189,260,917 | |
Undistributedtax-exempt income | | | | 141,285 | | | | | 48,383 | | | | | 134,386 | |
Undistributed long-term capital gains | | | | 253,490 | | | | | — | | | | | — | |
Capital loss carryforwards | | | | — | | | | | (98,039 | ) | | | | (969,374 | ) |
Distributions payable | | | | (381,672 | ) | | | | (52,573 | ) | | | | (134,386 | ) |
Unrealized appreciation of investments | | | | 35,099,294 | | | | | 4,569,443 | | | | | 11,409,113 | |
| | | | | | | | | | | | | | | |
Net assets | | | $ | 585,964,377 | | | | $ | 80,803,075 | | | | $ | 199,700,656 | |
| | | | | | | | | | | | | | | |
The differences between book basis and tax basis components of net assets are primarily attributable to tax treatment of market discount and premium on debt instruments and tax deferral of losses due to wash sales, if applicable.
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, 2019, DelawareTax-Free Minnesota Fund did not have any capital loss carryforwards.
At Aug. 31, 2019, capital loss carryforwards available to offset future realized capital gains for DelawareTax-Free Minnesota Intermediate Fund and Delaware Minnesota High-Yield Municipal Bond Fund were as follows:
| | | | | | | | | | | | | | | |
| | | Loss carryforward character |
| | | Short-term | | Long-term | | Total |
DelawareTax-Free Minnesota Intermediate Fund | | | $ | 98,039 | | | | $ | — | | | | $ | 98,039 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | 845,337 | | | | | 124,037 | | | | | 969,374 | |
97
Notes to financial statements
Delaware Funds® by Macquarie Minnesota municipal bond funds
6. Capital Shares
Transactions in capital shares were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Delaware Tax-Free | | | Delaware Minnesota | |
| | | Delaware Tax-Free | | | Minnesota | | | High-Yield Municipal | |
| | | Minnesota Fund | | | Intermediate Fund | | | Bond Fund | |
| | | Year ended | | | Year ended | | | Year ended | |
| | | 8/31/19 | | | 8/31/18 | | | 8/31/19 | | | 8/31/18 | | | 8/31/19 | | | 8/31/18 | |
Shares sold: | | | | | | | | | | | | | | | | | | | | | | | | |
Class A | | | 2,812,545 | | | | 3,125,082 | | | | 521,273 | | | | 436,654 | | | | 1,091,129 | | | | 1,521,905 | |
Class C | | | 252,325 | | | | 213,991 | | | | 82,541 | | | | 61,309 | | | | 291,127 | | | | 310,619 | |
Institutional Class | | | 6,847,310 | | | | 4,490,186 | | | | 773,437 | | | | 499,420 | | | | 2,920,048 | | | | 2,291,763 | |
|
Shares issued upon reinvestment of dividends and distributions: | |
Class A | | | 798,095 | | | | 996,278 | | | | 124,608 | | | | 158,251 | | | | 240,677 | | | | 218,090 | |
Class C | | | 53,400 | | | | 96,954 | | | | 13,717 | | | | 21,615 | | | | 39,113 | | | | 55,726 | |
Institutional Class | | | 263,476 | | | | 267,851 | | | | 36,374 | | | | 45,617 | | | | 174,526 | | | | 143,414 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | 11,027,151 | | | | 9,190,342 | | | | 1,551,950 | | | | 1,222,866 | | | | 4,756,620 | | | | 4,541,517 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Shares redeemed: | | | | | | | | | | | | | | | | | | | | | | | | |
Class A | | | (5,263,546 | ) | | | (5,728,359 | ) | | | (1,153,362 | ) | | | (1,288,814 | ) | | | (1,382,974 | ) | | | (1,510,584 | ) |
Class C | | | (878,285 | ) | | | (1,441,859 | ) | | | (249,651 | ) | | | (355,611 | ) | | | (481,931 | ) | | | (1,296,104 | ) |
Institutional Class | | | (3,637,252 | ) | | | (1,965,838 | ) | | | (294,820 | ) | | | (1,168,219 | ) | | | (1,406,980 | ) | | | (1,535,704 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (9,779,083 | ) | | | (9,136,056 | ) | | | (1,697,833 | ) | | | (2,812,644 | ) | | | (3,271,885 | ) | | | (4,342,392 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net increase (decrease) | | | 1,248,068 | | | | 54,286 | | | | (145,883 | ) | | | (1,589,778 | ) | | | 1,484,735 | | | | 199,125 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
100
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, 2019 and 2018, the Funds had the following exchange transactions:
| | | | | | | | | | | | | | | | | | | | |
| | | Year ended
8/31/19 | |
| | | Exchange
Redemptions | | | Exchange Subscriptions | | | | |
| | | Class A
Shares | | | Class C
Shares | | | Class A
Shares | | | Institutional
Class
Shares | | | Value | |
DelawareTax-Free Minnesota Fund | | | 59,365 | | | | 40,077 | | | | 31,466 | | | | 68,171 | | | $ | 1,220,708 | |
DelawareTax-Free Minnesota Intermediate Fund | | | 1,165 | | | | 9,191 | | | | 9,217 | | | | 1,165 | | | | 112,353 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | 26,086 | | | | 44,298 | | | | 9,709 | | | | 60,819 | | | | 745,406 | |
| | | Year ended
8/31/18 | |
| | | Exchange Redemptions | | | Exchange Subscriptions | | | | |
| | | Class A
Shares | | | Class C
Shares | | | Class A
Shares | | | Institutional
Class
Shares | | | Value | |
DelawareTax-Free Minnesota Fund | | | 179,677 | | | | 324,507 | | | | 282,986 | | | | 222,704 | | | $ | 6,195,653 | |
DelawareTax-Free Minnesota Intermediate Fund | | | 24,209 | | | | 52,010 | | | | 43,368 | | | | 33,036 | | | | 833,306 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | 47,282 | | | | 241,837 | | | | 232,144 | | | | 57,805 | | | | 3,092,167 | |
7. Line of Credit
Each Fund, along with certain other funds in the Delaware Funds (Participants), was a participant in a 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. The revolving line of credit available was reduced from $155,000,000 to $130,000,000 on Sept. 6, 2018. Under the agreement, the Participants were charged an annual commitment fee of 0.15%, which was 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 ofone-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. 5, 2018.
99
Notes to financial statements
Delaware Funds® by Macquarie Minnesota municipal bond funds
7. Line of Credit (continued)
On Nov. 5, 2018, the Participants entered into an amendment to the agreement for a $190,000,000 revolving line of credit. The revolving line of credit available was increased to $220,000,000 on Nov. 29, 2018. The revolving line of credit is to be used as described on the previous page and operates in substantially the same manner as the original agreement. The line of credit available under the agreement expires on Nov. 4, 2019.
The Funds had no amounts outstanding as of Aug. 31, 2019, or at any time during the year then ended.
8. 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, mainly in Minnesota, 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 state 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, 2019, the percentages of each Fund’s net assets insured by bond insurers are listed below, and these securities have been identified in the “Schedules of investments.”
| | | | | | | | | | | | | | | |
| | | Delaware | | Delaware Tax-Free | | Delaware Minnesota |
| | | Tax-Free | | Minnesota | | High-Yield Municipal |
| | | Minnesota Fund | | Intermediate Fund | | Bond Fund |
Assured Guaranty Corporation | | | | 2.75 | % | | | | 3.15 | % | | | | — | |
Assured Guaranty Municipal Corporation | | | | 0.74 | % | | | | 1.24 | % | | | | 1.49 | % |
National Public Finance Guarantee Corporation | | | | 0.79 | % | | | | — | | | | | — | |
| | | | | | | | | | | | | | | |
| | | | 4.28 | % | | | | 4.39 | % | | | | 1.49 | % |
| | | | | | | | | | | | | | | |
Each Fund invests a portion of its assets in high yield fixed income securities, which are securities rated lower thanBBB- 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.
100
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 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, each Board has delegated to DMC, theday-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 have been identified on the “Schedules of investments.” Restricted securities are valued pursuant to the security valuation procedures described in Note 1.
9. Contractual Obligations
Each Fund enters into contracts in the normal course of business that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, each
101
Notes to financial statements
Delaware Funds® by Macquarie Minnesota municipal bond funds
9. Contractual Obligations (continued)
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.
10. Recent Accounting Pronouncements
In March 2017, the FASB issued an Accounting Standards Update (ASU), ASU2017-08, Receivables — Nonrefundable Fees and Other Costs (Subtopic310-20), Premium Amortization on Purchased Callable Debt Securities which amends the amortization period for certain callable debt securities purchased at a premium, shortening such period to the earliest call date. The ASU2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. The ASU2017-08 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 ASU2018-13, which changes certain fair value measurement disclosure requirements. The ASU2018-13, 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 ASU2018-13 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.
In August 2018, the Securities and Exchange Commission (SEC) adopted amendments to RegulationS-X to update and simplify the disclosure requirements for registered investment companies by eliminating requirements that are redundant or duplicative of US GAAP requirements or other SEC disclosure requirements. The new amendments require the presentation of the total, rather than the components, of distributable earnings on the “Statements of assets and liabilities” and the total, rather than the components, of dividends from net investment income and distributions from net realized gains on the “Statements of changes in net assets.” The amendments also removed the requirement for the parenthetical disclosure of undistributed net investment income on the “Statements of changes in net assets” and certain tax adjustments that were reflected in the “Notes to financial statements.” All of these have been reflected in the Funds’ financial statements.
11. Subsequent Events
Management has determined that no material events or transactions occurred subsequent to Aug. 31, 2019, that would require recognition or disclosure in the Funds’ financial statements.
102
Report of independent
registered public accounting firm
To the Board of Trustees of VoyageurTax-Free Funds, Voyageur IntermediateTax-Free Funds and Voyageur Mutual Funds and Shareholders of DelawareTax-Free Minnesota Fund, DelawareTax-Free Minnesota Intermediate Fund and Delaware Minnesota 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 DelawareTax-Free Minnesota Fund (constituting VoyageurTax-Free Funds), DelawareTax-Free Minnesota Intermediate Fund (constituting Voyageur IntermediateTax-Free Funds) and Delaware Minnesota High-Yield Municipal Bond Fund (one of the funds constituting Voyageur Mutual Funds) (hereafter collectively referred to as the “Funds”) as of August 31, 2019, the related statements of operations for the year ended August 31, 2019, the statements of changes in net assets for each of the two years in the period ended August 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended August 31, 2019 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Funds as of August 31, 2019, 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, 2019 and each of the financial highlights for each of the five years in the period ended August 31, 2019 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, 2019 by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinions.
/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
October 16, 2019
We have served as the auditor of one or more investment companies in Delaware Funds® by Macquarie since 2010.
103
Other Fund information (Unaudited)
Delaware Funds® by Macquarie Minnesota municipal bond 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 the Funds. 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 the Funds to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.
For the fiscal year ended Aug. 31, 2019, each Fund reports distributions paid during the year as follows:
| | | | |
| | | (A) | | |
| | | Tax-Exempt | | |
| | | Income | | Total |
| | | Distributions | | Distributions |
| | | (Tax Basis) | | (Tax Basis) |
DelawareTax-Free Minnesota Fund | | 100.00% | | 100.00% |
DelawareTax-Free Minnesota Intermediate Fund | | 100.00% | | 100.00% |
Delaware Minnesota High-Yield Municipal Bond Fund | | 100.00% | | 100.00% |
(A) is based on a percentage of each Fund’s total distributions.
Board consideration of Investment Advisory agreements for DelawareTax-Free Minnesota Fund, DelawareTax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund at a meeting held on August21-22, 2019
At a meeting held on Aug.21-22, 2019 (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 DelawareTax-Free Minnesota Fund, DelawareTax-Free Minnesota Intermediate Fund, and Delaware Minnesota 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 contract. 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;
104
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 2019, 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 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 received assistance and advice 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 services.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 through (a) 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) 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
105
Other Fund information (Unaudited)
Delaware Funds® by Macquarie Minnesota municipal bond funds
Board consideration of Investment Advisory agreements for DelawareTax-Free Minnesota Fund, DelawareTax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund at a meeting held on August21-22, 2019 (continued)
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 past1-,3-,5-, and10-year periods, to the extent applicable, ended Jan. 31, 2019. The Board’s objective is that each Fund’s performance for the1-,3-, and5-year periods be at or above the median of its Performance Universe.
DelawareTax-Free Minnesota Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional Minnesota municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the1-year period was in the third quartile of its Performance Universe. The report further showed that the Fund’s total return for the3-,5-, and10-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.
DelawareTax-Free Minnesota Intermediate Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional “other states” intermediate municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the1-year period was in the third quartile of its Performance Universe. The report further showed that the Fund’s total return for the3-,5-, and10-year periods was in the first quartile of its Performance Universe. The Board was satisfied with performance.
Delaware Minnesota High-Yield Municipal Bond Fund – Broadridge currently classifies the Fund as a Minnesota municipal debt fund. However, Management believes that it is more appropriate to include the Fund in the high yield municipal debt funds category, to provide a comparison to a representative peer group based on credit quality instead of a peer group based on state of issuance. Accordingly, the Broadridge report prepared for the Fund compares the Fund’s performance to two separate Performance Universes – one consisting of the Fund and all retail and institutional Minnesota municipal debt funds and the other consisting of the Fund and all retail and institutional high yield municipal debt funds. When compared to Minnesota municipal debt funds, the Broadridge report comparison showed that the Fund’s total return for the1-,3-,5-, and10-year periods was in the first quartile of its Performance Universe. When compared to high yield municipal debt funds, the Broadridge report comparison showed that the Fund’s total return for the1-year period was in the third quartile of its Performance Universe and the Fund’s total return for the3-,5-, and10-year periods was in the fourth quartile of its Performance Universe. The Board observed that, when compared to other Minnesota municipal debt funds, the Fund’s performance was in line with the Board’s objective; however, when compared to other high yield municipal debt funds, the Fund’s performance results were not in line with the Board’s objective. In evaluating the Fund’s performance, the Board considered the numerous investment and performance reports and other information delivered by Management personnel to the Board’s Investments Committee. The Board was satisfied that Management was taking action to improve comparative Fund performance and to meet the Board’s performance objective.
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
106
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 including12b-1 andnon-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.
DelawareTax-Free Minnesota Fund – The expense comparisons for the Fund showed that its actual management fee was in the quartile with the second lowest expenses of its Expense Group and its total expenses were in the quartile with the 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 waivers in place through December 2019 and various initiatives implemented by Management, such as the negotiation of lower fees for fund accounting and fund accounting oversight 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.
DelawareTax-Free Minnesota Intermediate Fund – The expense comparisons for the Fund showed that its actual management fee was in the quartile with the second lowest expenses of its Expense Group and its total expenses were in the quartile with the 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.
Delaware Minnesota High-Yield Municipal Bond Fund – When compared to Minnesota municipal debt funds, the expense comparisons for the Fund showed that its actual management fee was in the quartile with the second lowest expenses in its Expense Group and its total expenses were in the quartile with the highest expenses of the Expense Group. When compared to high yield municipal debt funds, the expense comparisons for the Fund showed that its actual management fee was in the quartile with the highest expenses of its Expense Group and its total expenses were in the quartile with the second highest expenses of the Expense Group. The Board 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 2019 and various initiatives implemented by Management, such as the negotiation of lower fees for fund accounting, fund accounting oversight services, and custody, 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
107
Other Fund information (Unaudited)
Delaware Funds® by Macquarie Minnesota municipal bond funds
Board consideration of Investment Advisory agreements for DelawareTax-Free Minnesota Fund, DelawareTax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund at a meeting held on August21-22, 2019 (continued)
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 discussed with JDL personnel regarding 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 each Fund’s 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. Although, as of March 31, 2019, DelawareTax-Free Minnesota Intermediate Fund and Delaware Minnesota High-Yield Municipal Bond Fund had not reached a size at which they could take advantage of any breakpoints in the applicable fee schedule, the Board recognized that each Fund’s fee was structured so that, if the Fund increases sufficiently in size, then economies of scale may be shared. The Board noted that, as of March 31, 2019, DelawareTax-Free Minnesota Fund’s assets exceeded the first breakpoint level. The Board believed 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 Agreement provides a sharing of benefits with the Fund and its shareholders.
108
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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, | | Position(s) | | Length of |
| and Birth Date | | Held with Fund(s) | | Time Served |
Interested Trustee | | | | |
Shawn K. Lytle1 2005 Market Street Philadelphia, PA 19103 February 1970 | | President, Chief Executive Officer, and Trustee | | President and Chief Executive Officer since August 2015 |
| | | | Trustee since September 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 |
| Jerome D. Abernathy | | Trustee | | Since January 2019 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
July 1959 | | | | |
| Ann D. Borowiec | | Trustee | | Since March 2015 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
November 1958 | | | | |
| 1 | Shawn K. Lytle is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor. |
110
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.
| | | | |
| | | 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 — Macquarie | | 59 | | Trustee — UBS |
| Investment Management2 | | | | 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) | | | | |
| Managing Member, | | 59 | | None |
| Stonebrook Capital | | | | |
| Management, LLC (financial | | | | |
| technology: macro factors | | | | |
| and databases) | | | | |
(January 1993–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) |
| 2 | 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. |
111
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) | | | | |
| Joseph W. Chow | | Trustee | | Since January 2013 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
January 1953 | | | | |
| | |
| 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 | | | | |
112
| | | | |
| | | 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 |
| | | | |
| Private Investor | | 59 | | Director and Audit Committee |
| (April 2011–Present) | | | | Member — Hercules |
| | | | Technology Growth |
| | | | Capital, Inc. |
| | | | | (July 2004–July 2014) |
| President — | | 59 | | Director; Compensation |
| Drexel University | | | | Committee and |
| (August 2010–Present) | | | | Governance Committee |
| | | | Member — Community |
| President — | | | | Health Systems |
| Franklin & Marshall College | | | | (May 2004–present) |
| (July 2002–June 2010) | | | | |
| | | | Director — Drexel |
| | | | Morgan & Co. |
| | | | (2015–present) |
| | |
| | | | Director and Audit Committee |
| | | | Member — vTv |
| | | | Therapeutics Inc. |
| | | | (2017–present) |
| | |
| | | | Director and Audit Committee |
| | | | Member — FS Credit Real |
| | | | Estate Income Trust, Inc. |
| | | | | (2018–present) |
| Private Investor | | 59 | | None |
(2004–Present) | | | | |
113
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) | | | | |
| Frances A. Sevilla-Sacasa | | Trustee | | Since September 2011 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
January 1956 | | | | |
| Thomas K. Whitford | | Trustee | | Since January 2013 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
March 1956 | | | | |
114
| | | | |
| | | 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 |
| | | | |
| 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; Audit |
| | | | Committee Member — |
| Executive Advisor to Dean | | | | Carrizo Oil & Gas, Inc. |
| (August 2011–March 2012) | | | | (March 2018–Present) |
| 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) | | | | |
| Vice Chairman | | 59 | | Director — HSBC North |
| (2010–April 2013) — | | | | America Holdings Inc. |
| PNC Financial | | | | (December 2013–Present) |
| Services Group | | | | |
| | | | Director — HSBC USA Inc. |
| | | | (July 2014–Present) |
| | |
| | | | Director — |
| | | | HSBC Bank USA, |
| | | | National Association |
| | | | (July 2014–March 2017) |
| | |
| | | | Director — HSBC |
| | | | Finance Corporation |
| | | | | (December 2013–April 2018) |
115
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) | | | | |
| Christianna Wood | | Trustee | | Since January 2019 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
August 1959 | | | | |
116
| | | | |
| | | 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 |
| | | | |
| Chief Executive Officer | | 59 | | Director; Finance Committee |
| and President — | | | | and Audit Committee |
| Gore Creek | | | | Member — H&R |
| Capital, Ltd. | | | | Block Corporation |
| (August 2009–Present) | | | | (July 2008–Present) |
| | | | Director; Chair of Investments |
| | | | Committee and Audit |
| | | | Committee Member — |
| | | | Grange Insurance |
| | | | (2013–Present) |
| | | | Trustee; Chair of |
| | | | Nominating and Governance |
| | | | Committee and Audit |
| | | | Committee Member — |
| | | | The Merger Fund |
| | | | (2013–Present), |
| | | | The Merger Fund VL |
| | | | (2013-Present), |
| | | | WCM Alternatives: |
| | | | Event-Driven Fund |
| | | | (2013–Present), |
| | | | and WCM Alternatives: |
| | | | Credit Event Fund |
| | | | (December 2017–Present) |
| | | | Director; Chair of |
| | | | Governance Committee |
| | | | and Audit Committee |
| | | | Member — International |
| | | | Securities Exchange |
| | | | | (2010–2016) |
117
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) | | | | |
| 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 since |
| 2005 Market Street | | General Counsel, | | May 2013; General |
| Philadelphia, PA 19103 | | and Secretary | | Counsel since May 2015; |
| December 1963 | | | | 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 800523-1918.
118
| | | | |
| | | 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 |
| | | | |
| Vice President and Treasurer | | 59 | | Director; Personnel and |
| (January 2006–July 2012), | | | | Compensation Committee |
| Vice President — | | | | Chair; Member of Nominating, |
| Mergers & Acquisitions | | | | Investments, and Audit |
| (January 2003–January 2006), | | | | Committees for various |
| and Vice President | | | | periods throughout |
| and Treasurer | | | | directorship — |
| (July 1995–January 2003) — | | | | Okabena Company |
| 3M Company | | | | (2009–2017) |
| | | | |
| David F. Connor has served | | 59 | | None3 |
| in various capacities at | | | | |
| different times at | | | | |
| Macquarie Investment | | | | |
Management. | | | | |
| Daniel V. Geatens has served | | 59 | | None3 |
| in various capacities at | | | | |
| different times at | | | | |
| Macquarie Investment | | | | |
Management. | | | | |
| Richard Salus has served | | 59 | | None3 |
| in various capacities | | | | |
| at different times at | | | | |
| Macquarie Investment | | | | |
| Management. | | | | |
| 3 | 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. |
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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 Jerome D. Abernathy Managing Member Stonebrook Capital Management, LLC Jersey City, NJ | | 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 Christianna Wood Chief Executive Officer and President Gore Creek Capital, Ltd. Golden, CO Janet L. Yeomans Former Vice President and Treasurer 3M Company St. Paul, MN |
| Affiliated officers | | | | | | |
| | | |
| David F. Connor | | Daniel V. Geatens | | Richard Salus | | |
| Senior Vice President, | | Vice President and | | Senior Vice President and | | |
| General Counsel, | | Treasurer | | Chief Financial Officer | | |
| and Secretary | | Delaware Funds | | Delaware Funds | | |
| Delaware Funds | | by Macquarie | | by Macquarie | | |
| by Macquarie | | Philadelphia, PA | | Philadelphia, PA | | |
| Philadelphia, PA | | | | | | |
This annual report is for the information of DelawareTax-Free Minnesota Fund, DelawareTax-Free Minnesota Intermediate Fund, and Delaware Minnesota 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 FormN-Q or FormN-PORT (available for filings after March 31, 2019). Each Fund’s FormsN-Q or FormsN-PORT, 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 800523-1918; 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 FormN-Q or FormN-PORT are available without charge on the Funds’ website at delawarefunds.com/literature. Each Fund’s FormsN-Q and FormsN-PORT 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 800SEC-0330.
Information (if any) regarding how the Funds voted proxies relating to portfolio securities during the most recently disclosed12-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.
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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:
John A. Fry
Lucinda S. Landreth
Thomas K. Whitford
Christianna Wood
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 $40,400 for the fiscal year ended August 31, 2019.
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 $38,500 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, 2019.
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 tax-related services provided to the registrant’s investment 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, 2018. 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%.
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, 2019.
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 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, 2018. 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 $9,955,000 and $11,748,000 for the registrant’s fiscal years ended August 31, 2019 and August 31, 2018, 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 period covered by the report to stockholders included herein that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. 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.
