Item 1. Reports to Stockholders
Annual report
Fixed income mutual funds
Delaware Tax-Free Minnesota Fund
Delaware Tax-Free Minnesota Intermediate Fund
Delaware Minnesota High-Yield Municipal Bond Fund
August 31, 2020
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 800 523-1918. 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 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.
You can obtain shareholder reports and prospectuses online instead of in the mail. Visit delawarefunds.com/edelivery.
Experience Delaware Funds® by Macquarie
Macquarie Investment Management (MIM) is a global asset manager with offices in 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 Delaware Tax-Free Minnesota Fund, Delaware Tax-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 investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, and Macquarie Investment Management Europe S.A.
The Funds are distributed by Delaware Distributors, L.P.
(DDLP), an affiliate of MIMBT and Macquarie Group Limited.
Other than Macquarie Bank Limited (MBL), none of the entities noted are authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.
The Funds are governed by US laws and regulations.
Table of contents
Unless otherwise noted, views expressed herein are current as of August 31, 2020, 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.
© 2020 Macquarie Management Holdings, Inc.
| | |
| Portfolio management review | | |
| Delaware Funds® by Macquarie Minnesota municipal bond funds | | September 8, 2020 (Unaudited) |
| | | | |
Performance preview (for the year ended August 31, 2020) |
Delaware Tax-Free Minnesota Fund (Institutional Class shares) | | 1-year return | | +1.55% |
Delaware Tax-Free Minnesota Fund (Class A shares) | | 1-year return | | +1.30% |
Bloomberg Barclays Municipal Bond Index (benchmark) | | 1-year return | | +3.24% |
Lipper Minnesota Municipal Debt Funds Average | | 1-year return | | +2.00% |
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Tax-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 10 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
| | | | |
Delaware Tax-Free Minnesota Intermediate Fund (Institutional Class shares) | | 1-year return | | +1.23% |
Delaware Tax-Free Minnesota Intermediate Fund (Class A shares) | | 1-year return | | +1.08% |
Bloomberg Barclays 3–15 Year Blend Municipal Bond Index (benchmark) | | 1-year return | | +3.39% |
Lipper Other States Intermediate Municipal Debt Funds Average | | 1-year return | | +2.35% |
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Tax-Free Minnesota Intermediate Fund, please see the table on page 11.
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 15 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
| | | | |
Delaware Minnesota High-Yield Municipal Bond Fund (Institutional Class shares) | | 1-year return | | +1.15% |
Delaware Minnesota High-Yield Municipal Bond Fund (Class A shares) | | 1-year return | | +0.81% |
Bloomberg Barclays Municipal Bond Index (benchmark) | | 1-year return | | +3.24% |
Lipper Minnesota Municipal Debt Funds Average | | 1-year return | | +2.00% |
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 16.
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.
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Portfolio management review
Delaware Funds® by Macquarie Minnesota municipal bond funds
Please see page 20 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.
Investment objectives
Delaware Tax-Free Minnesota Fund seeks 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.
Delaware Tax-Free Minnesota Intermediate Fund seeks 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.
Delaware Minnesota High-Yield Municipal Bond Fund seeks a high level of current income that is exempt from federal income tax and from Minnesota state personal income taxes, primarily through investment in medium- and lower-grade municipal obligations.
Economic backdrop
For most of the first half of the fiscal year ended August 31, 2020, the US economy continued along its steady growth path with historically low unemployment. In both the third and fourth calendar quarters of 2019, the nation’s gross domestic product (GDP) – a measure of national economic output – rose by an annualized 2.1%. Meanwhile, the US jobless rate remained at or near a half-century low throughout 2019 and into 2020, reaching a low of 3.9% in September 2019.
Starting in February 2020, however, global economic conditions began to dramatically worsen as the full social and financial impact of the coronavirus pandemic became evident. Quarantine orders mounted across the country and around the world, economic activity ground to a halt, and job losses grew by the millions. US GDP shrank by an annualized 5.0% in the first quarter of 2020 and then by an annualized 31.7% in the second quarter, the worst quarterly economic contraction in US history.
Both the US Federal Reserve and the federal government took aggressive action to attempt to ease this economic damage. In early March, the Fed cut the federal funds rate, its benchmark short-term interest rate, by 0.50 percentage points. Two weeks later, it cut the federal funds
rate by another full percentage point, bringing it to essentially zero, where it stood throughout the remainder of the fiscal year. Further, in late March, the federal government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic stimulus bill focused on providing support to individuals and businesses hurt by the economic fallout.
After the United States lost 20.5 million jobs in April 2020, the US unemployment rate soared to 14.7%, the highest level seen since the Great Depression. As economies around the country gradually reopened, however, the national economic picture slowly improved. By August, the US jobless rate fell to 8.4% – still historically high, though a significant improvement from earlier in the year – as some workers returned to their positions after temporary layoffs.
Sources: US Bureau of Economic Analysis, US Bureau of Labor Statistics, and Bloomberg.
Municipal bond market conditions
Overall, the municipal bond market, as measured by the Bloomberg Barclays Municipal Bond Index, returned 3.24% for the fiscal year ended August 31, 2020.
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When describing market conditions, we can divide the fiscal year into three distinct periods. The first covers September 2019 through March 9, 2020, during which municipal bonds enjoyed solid performance amid favorable demand for tax-exempt securities, coupled with relatively limited supply. In this environment, longer-duration, lower-rated securities generally outperformed their shorter-maturity, more highly rated counterparts, as many investors accepted greater interest rate risk and credit risk in exchange for higher yields. During this period, the municipal bond market, as measured by the Bloomberg Barclays Municipal Bond Index, gained 3.04%.
Starting on March 10, however, conditions for investors in municipal bonds abruptly shifted. With mounting concern about the coronavirus, market volatility soared, liquidity dried up, and more highly leveraged institutional investors were forced to unload their municipal debt. Investors, eager for safety, bid up prices of more highly rated, shorter-term bonds, while lower-quality, longer-term issues lagged, reflecting their increased credit and duration risk. Between March 10 and April 30, the Bloomberg Barclays Municipal Bond Index declined 4.84%, with most of that loss coming during two especially difficult weeks in March. Lower-investment-grade and below-investment-grade bonds performed notably poorly during this roughly seven-week stretch, declining 11.85% and 14.00%, respectively.
Finally, between May and the end of the fiscal year on August 31, municipal securities rallied strongly, with the Bloomberg Barclays Municipal Bond Index gaining 5.29%. Better-than-expected national economic data and heightened demand for tax-exempt bonds, especially lower-rated issues that had fallen disproportionately during the market’s earlier downturn, boosted the asset class.
Looking at the full fiscal year, the following tables indicate that bonds with intermediate maturities
generally outperformed their shorter- and longer-dated counterparts, while more highly rated issues fared better than lower-rated bonds.
| | | | |
| Returns by maturity | | | | |
1 year | | | 1.95 | % |
3 years | | | 2.88 | % |
5 years | | | 3.51 | % |
10 years | | | 3.53 | % |
22+ years | | | 3.05 | % |
| |
| Returns by credit rating | | | | |
AAA | | | 4.03 | % |
AA | | | 3.58 | % |
A | | | 2.75 | % |
BBB | | | 1.33 | % |
| |
Source: Bloomberg. | | | | |
A consistent management approach
For all three Funds highlighted in this report, we maintained the same management strategy we employ in all market conditions. We follow a bottom-up (bond by bond) investment approach, which means we select bonds on an issuer-by-issuer basis, based on our team’s thorough credit research. We regularly seek bonds that offer the Funds’ shareholders what we view as an attractive trade-off between reward potential and risk.
Following this approach, we generally maintain less exposure to highly rated, lower yielding bonds and more exposure to bonds with lower-investment-grade or below-investment-grade credit ratings. We believe that by focusing on higher yielding securities that have solid underlying credit quality, we have more opportunity to add value for the Funds’ shareholders. That said, it can sometimes be difficult to add as many lower-rated, higher yielding bonds to these Funds’ portfolios as we would ordinarily prefer, as highly rated, lower-coupon general obligation district bonds tend to be prevalent in the Minnesota municipal bond market. In such an environment, we look to
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Portfolio management review
Delaware Funds® by Macquarie Minnesota municipal bond funds
achieve an appropriate balance of risk and reward in the Funds, while remaining ready to invest in suitable lower-rated issues when they present themselves.
As of fiscal year end on August 31, 2020, roughly 30.0% of the net assets of Delaware Tax-Free Minnesota Fund were invested in bonds with lower-investment-grade credit ratings (A and BBB), and approximately 35.5% of the net assets of Delaware Tax-Free Minnesota Intermediate Fund were invested in these same credit tiers. Both Funds also maintained allocations to high yield municipal bonds, those with credit ratings below BBB. As indicated in the prospectus, both Funds may hold up to 20% of their net assets in high yield debt, although these allocations remained below that threshold throughout the fiscal year. When investing in the high yield market segment, we thoroughly analyze the securities’ credit risk and emphasize those bonds that we believe offer a favorable risk-reward balance.
Consistent with its mandate, Delaware Minnesota High-Yield Municipal Bond Fund maintained the largest exposure to high yield bonds of the three Funds. As of August 31, 2020, more than 33.8% of the Fund’s portfolio were held in bonds with credit ratings below BBB-, including nonrated bonds.
Tactical investment opportunities
For the first part of the fiscal year – roughly the period between September 2019 and the pandemic-fueled market selloff in March 2020 – we tended to limit our selling activity in the Funds’ portfolios. This approach reflected our assessment that the Funds were well positioned with many older bonds that had been issued in times of higher interest rates. This meant they offered a level of income that would be difficult to replace through the purchase of newer bonds.
Market conditions shifted dramatically, however, with the arrival of the coronavirus. In March,
demand for municipal bonds suddenly weakened, and an environment of mutual fund inflows across the market turned into one of rapid outflows. We quickly determined this outflow trend was likely to worsen. As a result, we decided to raise cash in these Funds by selling bonds in an orderly way. Our goal was to preserve each Fund’s positioning as best we could, to be able to satisfy shareholder redemptions while avoiding having to sell securities at temporarily depressed prices. We believe these proactive sales worked to shareholders’ benefit, as the Funds had enough cash on hand to meet the redemption requests we received.
Beginning in April, municipal market conditions began to improve, reflecting aggressive economic stimulus and investors’ optimism about state economies around the country beginning to reopen. In this environment, we saw opportunities to purchase bonds priced significantly lower than what we believed was justified given these securities’ underlying credit quality. We embraced this strategy across all the Delaware Funds® by Macquarie funds we manage, even as supply constraints in the Minnesota municipal bond market sometimes made it difficult to execute it as frequently as we would have preferred.
We also employed a tax-loss swapping strategy to varying degrees in all three Funds. This approach entailed selling existing holdings at a loss (which can be applied against future capital gains) and using the sale proceeds to buy bonds with similar risk characteristics but higher yields.
Notable performance factors
For the fiscal year, longer-duration bonds – those with more sensitivity to interest rates – outperformed bonds with shorter durations. At the same time, bonds with higher credit ratings outperformed lower-quality bonds, which suffered disproportionately during the market’s March downturn. Many of the Funds’ strongest and
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weakest performers over the 12-month period reflected these performance trends.
Bonds for Stride Academy, a St. Cloud charter school, were the strongest-performing individual securities in both Delaware Tax-Free Minnesota Fund and Delaware Tax-Free Minnesota High-Yield Municipal Bond Fund. As the issuer’s credit fundamentals continued to gradually improve, these nonrated bonds experienced improved price performance, returning about 7% for the Funds’ fiscal year.
Puerto Rico sales-tax bonds, known as COFINA bonds, were also notably strong performers for Delaware Tax-Free Minnesota Fund, Delaware Minnesota High-Yield Municipal Bond Fund, and Delaware Tax-Free Minnesota Intermediate Fund, with gains that hovered around 7%. COFINA bonds benefited from strong investor demand due to the securities’ fully tax-exempt status (bonds of US territories are generally tax-exempt for residents in all 50 states), as well as Puerto Rico’s better-than-expected fiscal position.
Another individual contributor to Delaware Tax-Free Minnesota Intermediate Fund was an investment in public power bonds for District Energy of St. Paul. These bonds, with an A- credit rating and a 4% coupon, returned 5% for the Fund for the fiscal year.
Among the market’s weakest performers for the 12-month period were bonds of healthcare issuers, especially those of senior living operators, which struggled amid concern about how the coronavirus would affect their finances. The weak performers in this market area included Minnesota Senior Living bonds for Apple Valley, Minn. These bonds fell close to 30% in Delaware Tax-Free Minnesota Fund and Delaware Minnesota
High-Yield Municipal Bond Fund, and declined more than 20% in Delaware Tax-Free Minnesota Intermediate Fund.
Similarly, in Delaware Minnesota High-Yield Municipal Bond Fund, a position in bonds issued for Farmington Health Service, a continuing care retirement community, lagged the market, declining more than 10%. Nonrated hospital bonds for Riverview Healthcare Association lost more than 6% for Delaware Tax-Free Minnesota Intermediate Fund, while continuing care retirement community bonds for the St. Therese Senior Living project in Deephaven, Minn., fell more than 7%, detracting from the performance of Delaware Tax-Free Minnesota Fund.
Minnesota economic backdrop
Minnesota unemployment rates were lower than national levels before and during the coronavirus pandemic. Unemployment fell to 2.9% in March, from 3.1% in February, and then rose to 8.7% in April, 9.9% in May, 8.0% in June, and 7.7% in July. Minnesota has a biennial budget that lasts through June 2021. The state budget reserve is $2.4 billion, and the state received $1.9 billion in CARES Act funding. The July state revenue projection for fiscal year 2020 dropped from a projected $1.5 billion surplus to a $168 million surplus due to revenue declines related to the coronavirus pandemic, but Minnesota is one of only a handful of states that did not see fiscal year 2020 revenue losses. Sales tax revenues are expected to finish 2020 up 1.5%, corporate taxes up 1.9%, and personal income taxes up 0.7%. Minnesota is projecting a revenue decline of 7% for fiscal year 2021. (Sources: bls.gov, bea.gov, ncsl.org, Minnesota Management and Budget.)
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| | |
| Performance summaries | | |
| Delaware Tax-Free Minnesota Fund | | August 31, 2020 (Unaudited) |
The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.
| | | | | | | | | | | | | | | | |
| Fund and benchmark performance1,2 | | Average annual total returns through August 31, 2020 |
| | | 1 year | | 5 year | | 10 year | | Lifetime |
| | | | |
Class A (Est. February 27, 1984) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +1.30 | % | | | +2.98 | % | | | +3.49 | % | | | +6.05 | % |
Including sales charge | | | -3.28 | % | | | +2.04 | % | | | +3.02 | % | | | +5.92 | % |
| | | | |
Class C (Est. May 4, 1994) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +0.54 | % | | | +2.21 | % | | | +2.71 | % | | | +3.93 | % |
Including sales charge | | | -0.44 | % | | | +2.21 | % | | | +2.71 | % | | | +3.93 | % |
| | | | |
Institutional Class (Est. December 31, 2013) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +1.55 | % | | | +3.25 | % | | | — | | | | +4.08 | % |
Including sales charge | | | +1.55 | % | | | +3.25 | % | | | — | | | | +4.08 | % |
| | | | |
Bloomberg Barclays Municipal Bond Index | | | +3.24 | % | | | +3.99 | % | | | +3.98 | % | | | +4.48 | %* |
*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.
1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.
Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 8. 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 maximum front-end sales charge of 4.50%, and have an annual
12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-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
6
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 from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.
Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.
IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.
The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.
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.
7
Performance summaries
Delaware Tax-Free Minnesota Fund
2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale 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 from September 1, 2019 to August 31, 2020.* 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 (without fee waivers) | | 0.93% | | 1.68% | | 0.68% |
Net expenses (including fee waivers, if any) | | 0.85% | | 1.60% | | 0.60% |
Type of waiver | | Contractual | | Contractual | | Contractual |
*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.
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Performance of a $10,000 investment1
Class A shares
Average annual total returns from August 31, 2010 through August 31, 2020
| | | | |
| | | |
| For period beginning August 31, 2010 through August 31, 2020 | | Starting value | | Ending value |
| | |
 Bloomberg Barclays Municipal Bond Index
| | $10,000 | | $14,768 |
| | |
 Delaware Tax-Free Minnesota Fund — Class A shares
| | $9,550 | | $13,463 |
Institutional Class shares
Average annual total returns from December 31, 2013 (inception date) through August 31, 2020
| | | | |
| | | |
| For period beginning December 31, 2013 through August 31, 2020 | | Starting value | | Ending value |
| | |
Bloomberg Barclays Municipal Bond Index | | $10,000 | | $13,397 |
| | |
Delaware Tax-Free Minnesota Fund — Institutional Class shares | | $10,000 | | $13,059 |
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Performance summaries
Delaware Tax-Free Minnesota Fund
1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on August 31, 2010, 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 August 31, 2010.
The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on December 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 December 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 8. Please note additional details on pages 6 through 10.
The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund 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 | | |
| Delaware Tax-Free Minnesota Intermediate Fund | | August 31, 2020 (Unaudited) |
The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.
| | | | | | | | | | | | | | | | |
| Fund and benchmark performance1,2 | | Average annual total returns through August 31, 2020 | |
| | | 1 year | | | 5 year | | | 10 year | | | Lifetime | |
| | | | |
Class A (Est. October 27, 1985) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +1.08% | | | | +2.68% | | | | +2.87% | | | | +4.62% | |
Including sales charge | | | -1.72% | | | | +2.10% | | | | +2.58% | | | | +4.54% | |
| | | | |
Class C (Est. May 4, 1994) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +0.22% | | | | +1.81% | | | | +1.99% | | | | +3.19% | |
Including sales charge | | | -0.77% | | | | +1.81% | | | | +1.99% | | | | +3.19% | |
| | | | |
Institutional Class (Est. December 31, 2013) | | | | | | | | | | | | | | | | |
Excluding sales charge | | | +1.23% | | | | +2.83% | | | | — | | | | +3.33% | |
Including sales charge | | | +1.23% | | | | +2.83% | | | | — | | | | +3.33% | |
| | | | |
Bloomberg Barclays 3–15 Year Blend Municipal Bond Index | | | +3.39% | | | | +3.69% | | | | +3.61% | | | | +3.95% | * |
*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.
1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.
Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 13. 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 maximum front-end sales charge of 2.75%, and have an annual (12b-1) fee of 0.25% of average daily net assets. This fee was contractually limited to 0.15% of average daily net assets from September 1, 2019 through August 31, 2020.* Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-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
11
Performance summaries
Delaware Tax-Free Minnesota Intermediate Fund
conditions that hinder an issuer’s ability to make interest and principal payments on its debt.
The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.
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 from tax- free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.
Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.
IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates
could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.
The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.
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.
12
2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale 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 September 1, 2019 to August 31, 2020.* 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
(without fee waivers) | | 1.04% | | 1.79% | | 0.79% |
| | | |
Net expenses (including fee
waivers, if any) | | 0.71% | | 1.56% | | 0.56% |
| | | |
Type of waiver | | Contractual | | Contractual | | Contractual |
*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.
13
Performance summaries
Delaware Tax-Free Minnesota Intermediate Fund
Performance of a $10,000 investment1
Class A shares
Average annual total returns from August 31, 2010 through August 31, 2020
| | | | | | |
| For period beginning August 31, 2010 through August 31, 2020 | | Starting value | | | | Ending value |
| | | |
Bloomberg Barclays 3–15 Year Blend Municipal Bond Index | | $10,000 | | | | $14,251 |
| | | |
Delaware Tax-Free Minnesota Intermediate Fund — Class A shares | | $9,725 | | | | $12,906 |
Institutional Class shares
Average annual total returns from December 31, 2013 (inception date) through August 31, 2020
| | | | | | |
| For period beginning December 31, 2013 through August 31, 2020 | | Starting value | | | | Ending value |
| | | |
Bloomberg Barclays 3–15 Year Blend Municipal Bond Index | | $ 10,000 | | | | $ 12,948 |
| | | |
Delaware Tax-Free Minnesota Intermediate Fund — Institutional Class shares | | $ 10,000 | | | | $ 12,436 |
14
1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on August 31, 2010, 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 August 31, 2010.
The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on December 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 December 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 13. Please note additional details on pages 11 through 15.
The Bloomberg Barclays 3–15 Year Blend Municipal Bond Index measures the total return performance of investment grade, US tax-exempt bonds with maturities from 2 to 17 years.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund classes will vary due to different charges and expenses.
| | | | |
| | | Nasdaq symbols | | CUSIPs |
Class A | | DXCCX | | 928930106 |
Class C | | DVSCX | | 928930205 |
Institutional Class | | DMIIX | | 92910U109 |
15
| | |
| Performance summaries | | |
| Delaware Minnesota High-Yield Municipal Bond Fund | | August 31, 2020 (Unaudited) |
The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.
| | | | | | | | | | | | | | | | | | | | | | |
| Fund and benchmark performance1,2 | | Average annual total returns through August 31, 2020 | | |
| | | 1 year | | | | | 5 year | | | | | 10 year | | | | | Lifetime | | |
| | | | | | | | |
Class A (Est. June 4, 1996) | | | | | | | | | | | | | | | | | | | | | | |
Excluding sales charge | | +0.81% | | | | | | +3.36% | | | | | | +3.75% | | | | | | +4.92% | | |
Including sales charge | | -3.75% | | | | | | +2.41% | | | | | | +3.27% | | | | | | +4.72% | | |
| | | | | | | | |
Class C (Est. June 7, 1996) | | | | | | | | | | | | | | | | | | | | | | |
Excluding sales charge | | +0.05% | | | | | | +2.57% | | | | | | +2.97% | | | | | | +4.14% | | |
Including sales charge | | -0.93% | | | | | | +2.57% | | | | | | +2.97% | | | | | | +4.14% | | |
| | | | | | | | |
Institutional Class (Est. December 31, 2013) | | | | | | | | | | | | | | | | | | | | | | |
Excluding sales charge | | +1.15% | | | | | | +3.62% | | | | | | — | | | | | | +4.45% | | |
Including sales charge | | +1.15% | | | | | | +3.62% | | | | | | — | | | | | | +4.45% | | |
| | | | | | | | |
Bloomberg Barclays Municipal Bond Index | | +3.24% | | | | | | +3.99% | | | | | | +3.98% | | | | | | +4.48%* | | |
*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.
1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.
Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 18. 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 maximum front-end sales charge of 4.50%, and have an annual
12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-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
16
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 from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.
Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.
IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.
The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.
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.
17
Performance summaries
Delaware Minnesota High-Yield Municipal Bond Fund
2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale 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 from September 1, 2019 to August 31, 2020.* 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 (without fee waivers) | | 0.99% | | 1.74% | | 0.74% |
Net expenses (including fee waivers, if any) | | 0.89% | | 1.64% | | 0.64% |
| | | |
Type of waiver | | Contractual | | Contractual | | Contractual |
*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.
18
Performance of a $10,000 investment1
Class A shares
Average annual total returns from August 31, 2010 through August 31, 2020
| | | | | | |
| For period beginning August 31, 2010 through August 31, 2020 | | Starting value | | | | Ending value |
| | | |
Bloomberg Barclays Municipal Bond Index | | $10,000 | | | | $14,768 |
| | | |
Delaware Minnesota High-Yield Municipal Bond Fund — Class A shares | | $9,550 | | | | $13,800 |
Institutional Class shares
Average annual total returns from December 31, 2013 (inception date) through August 31, 2020
| | | | | | |
| For period beginning December 31, 2013 through August 31, 2020 | | Starting value | | | | Ending value |
| | | |
Bloomberg Barclays Municipal Bond Index | | $10,000 | | | | $13,397 |
| | | |
Delaware Minnesota High-Yield Municipal Bond Fund — Institutional Class shares | | $ 10,000 | | | | $13,371 |
19
Performance summaries
Delaware Minnesota High-Yield Municipal Bond Fund
1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on August 31, 2010, 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 August 31, 2010.
The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on December 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 December 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 18. Please note additional details on pages 16 through 20.
The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund classes will vary due to different charges and expenses.
| | | | |
| | | |
| | | Nasdaq symbols | | CUSIPs |
Class A | | DVMHX | | 928928316 |
Class C | | DVMMX | | 928928282 |
Institutional Class | | DMHIX | | 928928175 |
20
Disclosure of Fund expenses
For the six-month period from March 1, 2020 to August 31, 2020 (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. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period from March 1, 2020 to August 31, 2020.
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 a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s 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 each Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The Funds’ expenses shown in the tables reflect fee waivers in effect and assume reinvestment of all dividends and distributions.
21
Disclosure of Fund expenses
For the six-month period from March 1, 2020 to August 31, 2020 (Unaudited)
Delaware Tax-Free Minnesota Fund
Expense analysis of an investment of $1,000
| | | | | | | | | | | | | | | | | | | | |
| | | Beginning Account Value 3/1/20 | | Ending Account Value 8/31/20 | | Annualized Expense Ratio | | Expenses Paid During Period 3/1/20 to 8/31/20* |
| | | | |
Actual Fund return† | | | | | | | | | | | | | | | | | | | | |
Class A | | | | $1,000.00 | | | | | $988.20 | | | | | 0.85 | % | | | | $4.25 | |
Class C | | | | 1,000.00 | | | | | 984.60 | | | | | 1.60 | % | | | | 7.98 | |
Institutional Class | | | | 1,000.00 | | | | | 989.50 | | | | | 0.60 | % | | | | 3.00 | |
| | |
Hypothetical 5% return (5% return before expenses) | | | | | | | | | | | |
Class A | | | | $1,000.00 | | | | | $1,020.86 | | | | | 0.85 | % | | | | $4.32 | |
Class C | | | | 1,000.00 | | | | | 1,017.09 | | | | | 1.60 | % | | | | 8.11 | |
Institutional Class | | | | 1,000.00 | | | | | 1,022.12 | | | | | 0.60 | % | | | | 3.05 | |
| | | | |
Delaware Tax-Free Minnesota Intermediate Fund Expense analysis of an investment of $1,000 | | | | | | | | |
| | | Beginning Account Value 3/1/20 | | Ending Account Value 8/31/20 | | Annualized Expense Ratio | | Expenses Paid During Period 3/1/20 to 8/31/20* |
| | | | |
Actual Fund return† | | | | | | | | | | | | | | | | | | | | |
Class A | | | | $1,000.00 | | | | | $987.50 | | | | | 0.71 | % | | | | $3.55 | |
Class C | | | | 1,000.00 | | | | | 983.30 | | | | | 1.56 | % | | | | 7.78 | |
Institutional Class | | | | 1,000.00 | | | | | 987.40 | | | | | 0.56 | % | | | | 2.80 | |
| | |
Hypothetical 5% return (5% return before expenses) | | | | | | | | | | | |
Class A | | | | $1,000.00 | | | | | $1,021.57 | | | | | 0.71 | % | | | | $3.61 | |
Class C | | | | 1,000.00 | | | | | 1,017.29 | | | | | 1.56 | % | | | | 7.91 | |
Institutional Class | | | | 1,000.00 | | | | | 1,022.32 | | | | | 0.56 | % | | | | 2.85 | |
22
Delaware Minnesota High-Yield Municipal Bond Fund
Expense analysis of an investment of $1,000
| | | | | | | | | | | | | | | | | | | | |
| | | Beginning Account Value 3/1/20 | | Ending Account Value 8/31/20 | | Annualized Expense Ratio | | Expenses Paid During Period 3/1/20 to 8/31/20* |
| | | | |
Actual Fund return† | | | | | | | | | | | | | | | | | | | | |
Class A | | | | $1,000.00 | | | | | $979.30 | | | | | 0.89 | % | | | | $4.43 | |
Class C | | | | 1,000.00 | | | | | 975.60 | | | | | 1.64 | % | | | | 8.14 | |
Institutional Class | | | | 1,000.00 | | | | | 981.40 | | | | | 0.64 | % | | | | 3.19 | |
| | |
Hypothetical 5% return (5% return before expenses) | | | | | | | | | | | |
Class A | | | | $1,000.00 | | | | | $1,020.66 | | | | | 0.89 | % | | | | $4.52 | |
Class C | | | | 1,000.00 | | | | | 1,016.89 | | | | | 1.64 | % | | | | 8.31 | |
Institutional Class | | | | 1,000.00 | | | | | 1,021.92 | | | | | 0.64 | % | | | | 3.25 | |
| * | “Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period). |
| † | Because actual returns reflect only the most recent six-month period, the returns shown may differ significantly from fiscal year returns. |
23
| | |
| Security type / sector / state / territory allocations |
| Delaware Tax-Free Minnesota Fund | | As of August 31, 2020 (Unaudited) |
Sector designations may be different than the sector designations presented in other Fund materials.
| | | | | |
| Security type / sector | | Percentage of net assets |
Municipal Bonds* | | | | 97.84 | % |
Corporate Revenue Bond | | | | 0.76 | % |
Education Revenue Bonds | | | | 18.39 | % |
Electric Revenue Bonds | | | | 8.09 | % |
Healthcare Revenue Bonds | | | | 23.58 | % |
Housing Revenue Bonds | | | | 0.40 | % |
Lease Revenue Bonds | | | | 2.92 | % |
Local General Obligation Bonds | | | | 12.23 | % |
Pre-Refunded/Escrowed to Maturity Bonds | | | | 7.28 | % |
Special Tax Revenue Bonds | | | | 4.60 | % |
State General Obligation Bonds | | | | 9.80 | % |
Transportation Revenue Bonds | | | | 6.70 | % |
Water & Sewer Revenue Bonds | | | | 3.09 | % |
Short-Term Investments | | | | 1.08 | % |
Total Value of Securities | | | | 98.92 | % |
Receivables and Other Assets Net of Liabilities | | | | 1.08 | % |
Total Net Assets | | | | 100.00 | % |
*As of the date of this report, Delaware Tax-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 | | | | 0.39 | % |
Minnesota | | | | 93.67 | % |
Puerto Rico | | | | 4.51 | % |
US Virgin Islands | | | | 0.35 | % |
Total Value of Securities | | | | 98.92 | % |
24
| | |
| Security type / sector / state / territory allocations |
| Delaware Tax-Free Minnesota Intermediate Fund | | As of August 31, 2020 (Unaudited) |
Sector designations may be different than the sector designations presented in other Fund materials.
| | | | | |
| Security type / sector | | Percentage of net assets |
Municipal Bonds* | | | | 97.53 | % |
Corporate Revenue Bond | | | | 0.53 | % |
Education Revenue Bonds | | | | 13.28 | % |
Electric Revenue Bonds | | | | 7.59 | % |
Healthcare Revenue Bonds | | | | 24.67 | % |
Housing Revenue Bond | | | | 0.34 | % |
Lease Revenue Bonds | | | | 4.39 | % |
Local General Obligation Bonds | | | | 17.20 | % |
Pre-Refunded/Escrowed to Maturity Bonds | | | | 8.49 | % |
Special Tax Revenue Bonds | | | | 3.32 | % |
State General Obligation Bonds | | | | 9.81 | % |
Transportation Revenue Bonds | | | | 5.59 | % |
Water & Sewer Revenue Bonds | | | | 2.32 | % |
Short-Term Investments | | | | 1.34 | % |
Total Value of Securities | | | | 98.87 | % |
Receivables and Other Assets Net of Liabilities | | | | 1.13 | % |
Total Net Assets | | | | 100.00 | % |
*As of the date of this report, Delaware Tax-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 |
Guam | | | | 0.77 | % |
Minnesota | | | | 95.17 | % |
Puerto Rico | | | | 2.93 | % |
Total Value of Securities | | | | 98.87 | % |
25
| | |
| Security type / sector / state / territory allocations |
| Delaware Minnesota High-Yield Municipal Bond Fund | | As of August 31, 2020 (Unaudited) |
Sector designations may be different than the sector designations presented in other Fund materials.
| | | | | |
| Security type / sector | | Percentage of net assets |
Municipal Bonds* | | | | 97.87 | % |
Corporate Revenue Bond | | | | 1.32 | % |
Education Revenue Bonds | | | | 21.48 | % |
Electric Revenue Bonds | | | | 5.93 | % |
Healthcare Revenue Bonds | | | | 34.14 | % |
Housing Revenue Bonds | | | | 1.62 | % |
Lease Revenue Bonds | | | | 2.34 | % |
Local General Obligation Bonds | | | | 6.71 | % |
Pre-Refunded/Escrowed to Maturity Bonds | | | | 4.40 | % |
Special Tax Revenue Bonds | | | | 5.25 | % |
State General Obligation Bonds | | | | 7.00 | % |
Transportation Revenue Bonds | | | | 6.51 | % |
Water & Sewer Revenue Bonds | | | | 1.17 | % |
Short-Term Investments | | | | 0.70 | % |
Total Value of Securities | | | | 98.57 | % |
Receivables and Other Assets Net of Liabilities | | | | 1.43 | % |
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 |
Minnesota | | | | 93.55 | % |
Puerto Rico | | | | 5.02 | % |
Total Value of Securities | | | | 98.57 | % |
26
| | |
| Schedules of investments | | |
| Delaware Tax-Free Minnesota Fund | | August 31, 2020 |
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds — 97.84% | | | | | | | | |
| |
Corporate Revenue Bond — 0.76% | | | | | | | | |
St. Paul Port Authority Solid Waste Disposal Revenue | | | | | | | | |
(Gerdau St. Paul Steel Mill Project) | | | | | | | | |
Series 7 144A 4.50% 10/1/37 (AMT)# | | | 4,355,000 | | | $ | 4,387,009 | |
| | | | | | | | |
| | | | | | | 4,387,009 | |
| | | | | | | | |
Education Revenue Bonds — 18.39% | | | | | | | | |
Bethel Charter School Lease Revenue | | | | | | | | |
(Spectrum High School Project) | | | | | | | | |
Series A 4.00% 7/1/32 | | | 840,000 | | | | 876,708 | |
Series A 4.25% 7/1/47 | | | 1,550,000 | | | | 1,585,929 | |
Series A 4.375% 7/1/52 | | | 400,000 | | | | 411,036 | |
Brooklyn Park Charter School Lease Revenue | | | | | | | | |
(Prairie Seeds Academy Project) | | | | | | | | |
Series A 5.00% 3/1/34 | | | 2,260,000 | | | | 2,312,003 | |
Series A 5.00% 3/1/39 | | | 385,000 | | | | 390,255 | |
Cologne Charter School Lease Revenue | | | | | | | | |
(Cologne Academy Project) | | | | | | | | |
Series A 5.00% 7/1/34 | | | 250,000 | | | | 263,505 | |
Series A 5.00% 7/1/45 | | | 1,390,000 | | | | 1,445,850 | |
Deephaven Charter School Lease Revenue | | | | | | | | |
(Eagle Ridge Academy Project) | | | | | | | | |
Series A 5.50% 7/1/50 | | | 2,000,000 | | | | 2,167,000 | |
Duluth Housing & Redevelopment Authority Revenue | | | | | | | | |
(Duluth Public Schools Academy Project) | | | | | | | | |
Series A 5.00% 11/1/38 | | | 700,000 | | | | 749,819 | |
Series A 5.00% 11/1/48 | | | 2,800,000 | | | | 2,959,264 | |
Duluth Independent School District No. 709 Certificates of Participation | | | | | | | | |
Series B 5.00% 2/1/28 | | | 350,000 | | | | 445,942 | |
Forest Lake Charter School Lease Revenue Fund | | | | | | | | |
(Lakes International Language Academy Project) | | | | | | | | |
Series A 5.25% 8/1/43 | | | 400,000 | | | | 432,976 | |
Series A 5.375% 8/1/50 | | | 1,690,000 | | | | 1,834,444 | |
Series A 5.50% 8/1/36 | | | 580,000 | | | | 611,019 | |
Series A 5.75% 8/1/44 | | | 1,190,000 | | | | 1,258,187 | |
Ham Lake Charter School Lease Revenue | | | | | | | | |
(Davinci Academy Project) | | | | | | | | |
Series A 5.00% 7/1/36 | | | 765,000 | | | | 814,037 | |
Series A 5.00% 7/1/47 | | | 2,290,000 | | | | 2,406,698 | |
27
Schedules of investments
Delaware Tax-Free Minnesota Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Education Revenue Bonds (continued) | | | | | | | | |
Hugo Charter School Lease Revenue | | | | | | | | |
(Noble Academy Project) | | | | | | | | |
Series A 5.00% 7/1/34 | | | 580,000 | | | $ | 604,145 | |
Series A 5.00% 7/1/44 | | | 1,770,000 | | | | 1,819,525 | |
Minneapolis Charter School Lease Revenue | | | | | | | | |
(Hiawatha Academies Project) | | | | | | | | |
Series A 5.00% 7/1/31 | | | 885,000 | | | | 944,030 | |
Series A 5.00% 7/1/47 | | | 2,300,000 | | | | 2,383,306 | |
Minneapolis Student Housing Revenue | | | | | | | | |
(Riverton Community Housing Project) | | | | | | | | |
5.25% 8/1/39 | | | 470,000 | | | | 474,775 | |
5.50% 8/1/49 | | | 2,260,000 | | | | 2,294,804 | |
Minnesota Colleges & Universities Revenue Fund | | | | | | | | |
Series A 5.00% 10/1/26 | | | 4,990,000 | | | | 6,244,386 | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(Bethel University) | | | | | | | | |
5.00% 5/1/32 | | | 1,375,000 | | | | 1,521,602 | |
5.00% 5/1/37 | | | 1,250,000 | | | | 1,357,963 | |
5.00% 5/1/47 | | | 250,000 | | | | 266,955 | |
(Carleton College) | | | | | | | | |
4.00% 3/1/35 | | | 1,000,000 | | | | 1,155,700 | |
4.00% 3/1/36 | | | 415,000 | | | | 478,018 | |
5.00% 3/1/44 | | | 2,085,000 | | | | 2,500,123 | |
(College of St. Benedict) | | | | | | | | |
Series 8-K 4.00% 3/1/43 | | | 1,000,000 | | | | 1,021,060 | |
(College of St. Scholastica) | | | | | | | | |
4.00% 12/1/29 | | | 280,000 | | | | 310,828 | |
4.00% 12/1/30 | | | 290,000 | | | | 318,037 | |
4.00% 12/1/33 | | | 500,000 | | | | 532,550 | |
4.00% 12/1/34 | | | 500,000 | | | | 530,415 | |
4.00% 12/1/40 | | | 1,200,000 | | | | 1,258,224 | |
(Gustavus Adolphus College) | | | | | | | | |
5.00% 10/1/47 | | | 5,600,000 | | | | 6,309,352 | |
(St. Catherine University) | | | | | | | | |
Series A 4.00% 10/1/36 | | | 925,000 | | | | 982,211 | |
Series A 5.00% 10/1/35 | | | 875,000 | | | | 1,013,206 | |
Series A 5.00% 10/1/45 | | | 2,120,000 | | | | 2,394,370 | |
(St. John’s University) | | | | | | | | |
Series 8-I 5.00% 10/1/32 | | | 500,000 | | | | 575,575 | |
Series 8-I 5.00% 10/1/33 | | | 250,000 | | | | 286,900 | |
28
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Education Revenue Bonds (continued) | | | | | | | | |
(St. Olaf College) | | | | | | | | |
Series 8-G 5.00% 12/1/31 | | | 670,000 | | | $ | 788,664 | |
Series 8-G 5.00% 12/1/32 | | | 670,000 | | | | 785,334 | |
Series 8-N 4.00% 10/1/35 | | | 500,000 | | | | 556,020 | |
(Trustees of The Hamline University) | | | | | | | | |
Series B 5.00% 10/1/37 | | | 955,000 | | | | 1,030,579 | |
Series B 5.00% 10/1/38 | | | 1,000,000 | | | | 1,076,830 | |
Series B 5.00% 10/1/39 | | | 170,000 | | | | 182,599 | |
Series B 5.00% 10/1/40 | | | 625,000 | | | | 670,388 | |
Series B 5.00% 10/1/47 | | | 1,060,000 | | | | 1,126,059 | |
(University of St. Thomas) | | | | | | | | |
4.00% 10/1/36 | | | 1,450,000 | | | | 1,639,834 | |
4.00% 10/1/37 | | | 750,000 | | | | 845,333 | |
4.00% 10/1/44 | | | 1,255,000 | | | | 1,382,194 | |
5.00% 10/1/40 | | | 500,000 | | | | 603,380 | |
Series 8-L 5.00% 4/1/35 | | | 1,250,000 | | | | 1,446,875 | |
Series A 4.00% 10/1/34 | | | 400,000 | | | | 447,704 | |
Series A 4.00% 10/1/36 | | | 500,000 | | | | 555,670 | |
Minnesota Office of Higher Education Revenue | | | | | | | | |
(Senior Supplemental Student Loan Program) | | | | | | | | |
2.65% 11/1/38 (AMT) | | | 1,000,000 | | | | 994,940 | |
Otsego Charter School Lease Revenue | | | | | | | | |
(Kaleidoscope Charter School) | | | | | | | | |
Series A 5.00% 9/1/34 | | | 520,000 | | | | 534,581 | |
Series A 5.00% 9/1/44 | | | 1,165,000 | | | | 1,180,564 | |
Rice County Educational Facilities Revenue | | | | | | | | |
(Shattuck-St. Mary’s School) | | | | | | | | |
Series A 144A 5.00% 8/1/22 # | | | 2,855,000 | | | | 2,920,893 | |
St. Cloud Charter School Lease Revenue | | | | | | | | |
(Stride Academy Project) | | | | | | | | |
Series A 5.00% 4/1/46 | | | 875,000 | | | | 595,000 | |
St. Paul Housing & Redevelopment Authority Charter School Lease Revenue | | | | | | | | |
(Academia Cesar Chavez School Project) | | | | | | | | |
Series A 5.25% 7/1/50 | | | 1,945,000 | | | | 1,927,475 | |
(Great River School Project) | | | | | | | | |
Series A 144A 4.75% 7/1/29 # | | | 300,000 | | | | 317,250 | |
Series A 144A 5.50% 7/1/52 # | | | 735,000 | | | | 783,547 | |
(Hmong College Preparatory Academy Project) | | | | | | | | |
Series A 5.75% 9/1/46 | | | 1,000,000 | | | | 1,105,960 | |
(Nova Classical Academy Project) | | | | | | | | |
Series A 4.00% 9/1/36 | | | 500,000 | | | | 526,590 | |
29
Schedules of investments
Delaware Tax-Free Minnesota Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Education Revenue Bonds (continued) | | | | | | | | |
(Nova Classical Academy Project) | | | | | | | | |
Series A 4.125% 9/1/47 | | | 1,750,000 | | | $ | 1,818,337 | |
(Twin Cities Academy Project) | | | | | | | | |
Series A 5.30% 7/1/45 | | | 1,440,000 | | | | 1,518,826 | |
University of Minnesota | | | | | | | | |
Series A 5.00% 4/1/34 | | | 925,000 | | | | 1,141,191 | |
Series A 5.00% 9/1/34 | | | 2,625,000 | | | | 3,274,871 | |
Series A 5.00% 4/1/35 | | | 3,175,000 | | | | 3,907,282 | |
Series A 5.00% 4/1/36 | | | 2,650,000 | | | | 3,251,444 | |
Series A 5.00% 4/1/37 | | | 1,125,000 | | | | 1,376,888 | |
Series A 5.00% 9/1/40 | | | 1,560,000 | | | | 1,914,073 | |
Series A 5.00% 9/1/41 | | | 1,750,000 | | | | 2,141,510 | |
Series A 5.00% 4/1/44 | | | 3,000,000 | | | | 3,796,080 | |
| | | | | | | | |
| | | | | | | 106,707,497 | |
| | | | | | | | |
Electric Revenue Bonds — 8.09% | | | | | | | | |
Chaska Electric Revenue | | | | | | | | |
(Generating Facilities) | | | | | | | | |
Series A 5.00% 10/1/28 | | | 350,000 | | | | 422,772 | |
Series A 5.00% 10/1/30 | | | 1,150,000 | | | | 1,380,219 | |
Minnesota Municipal Power Agency Electric Revenue | | | | | | | | |
4.00% 10/1/41 | | | 1,000,000 | | | | 1,110,960 | |
5.00% 10/1/29 | | | 395,000 | | | | 463,536 | |
5.00% 10/1/30 | | | 500,000 | | | | 586,095 | |
5.00% 10/1/33 | | | 1,205,000 | | | | 1,409,838 | |
5.00% 10/1/47 | | | 2,000,000 | | | | 2,407,720 | |
Series A 5.00% 10/1/30 | | | 1,060,000 | | | | 1,242,521 | |
Series A 5.00% 10/1/34 | | | 750,000 | | | | 877,493 | |
Series A 5.00% 10/1/35 | | | 1,525,000 | | | | 1,784,235 | |
Northern Municipal Power Agency Electric System Revenue | | | | | | | | |
5.00% 1/1/27 | | | 540,000 | | | | 660,431 | |
5.00% 1/1/28 | | | 350,000 | | | | 426,013 | |
5.00% 1/1/28 | | | 210,000 | | | | 262,195 | |
5.00% 1/1/29 | | | 585,000 | | | | 708,306 | |
5.00% 1/1/29 | | | 220,000 | | | | 272,444 | |
5.00% 1/1/30 | | | 520,000 | | | | 626,002 | |
5.00% 1/1/31 | | | 200,000 | | | | 244,528 | |
5.00% 1/1/32 | | | 210,000 | | | | 255,257 | |
5.00% 1/1/35 | | | 160,000 | | | | 192,432 | |
5.00% 1/1/36 | | | 180,000 | | | | 215,791 | |
5.00% 1/1/41 | | | 400,000 | | | | 473,948 | |
30
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Electric Revenue Bonds (continued) | | | | | | | | |
Northern Municipal Power Agency Electric System Revenue | | | | | | | | |
Series A 5.00% 1/1/25 | | | 125,000 | | | $ | 137,793 | |
Series A 5.00% 1/1/26 | | | 425,000 | | | | 468,078 | |
Series A 5.00% 1/1/31 | | | 520,000 | | | | 568,766 | |
Puerto Rico Electric Power Authority Revenue | | | | | | | | |
Series A 5.05% 7/1/42 ‡ | | | 430,000 | | | | 296,700 | |
Series AAA 5.25% 7/1/25 ‡ | | | 250,000 | | | | 172,813 | |
Series CCC 5.25% 7/1/27 ‡ | | | 1,875,000 | | | | 1,296,094 | |
Series WW 5.00% 7/1/28 ‡ | | | 1,775,000 | | | | 1,224,750 | |
Series WW 5.25% 7/1/33 ‡ | | | 1,250,000 | | | | 864,062 | |
Series XX 4.75% 7/1/26 ‡ | | | 260,000 | | | | 178,100 | |
Series XX 5.25% 7/1/40 ‡ | | | 750,000 | | | | 518,437 | |
Series XX 5.75% 7/1/36 ‡ | | | 925,000 | | | | 645,187 | |
Series ZZ 4.75% 7/1/27 ‡ | | | 210,000 | | | | 143,850 | |
Series ZZ 5.25% 7/1/24 ‡ | | | 350,000 | | | | 241,938 | |
Rochester Electric Utility Revenue | | | | | | | | |
Series A 5.00% 12/1/42 | | | 1,395,000 | | | | 1,680,863 | |
Series A 5.00% 12/1/47 | | | 2,265,000 | | | | 2,712,723 | |
Series B 5.00% 12/1/27 | | | 295,000 | | | | 337,380 | |
Series B 5.00% 12/1/28 | | | 275,000 | | | | 314,218 | |
Series B 5.00% 12/1/31 | | | 1,365,000 | | | | 1,553,506 | |
Series B 5.00% 12/1/33 | | | 300,000 | | | | 339,978 | |
Southern Minnesota Municipal Power Agency Revenue | | | | | | | | |
Series A 5.00% 1/1/41 | | | 1,310,000 | | | | 1,554,603 | |
Series A 5.00% 1/1/42 | | | 1,500,000 | | | | 1,828,500 | |
Series A 5.00% 1/1/46 | | | 2,000,000 | | | | 2,361,020 | |
Series A 5.00% 1/1/47 | | | 3,130,000 | | | | 3,785,610 | |
Southern Minnesota Municipal Power Agency Revenue Capital Appreciation | | | | | | | | |
Series A 1.275% 1/1/25 (NATL)^ | | | 5,000,000 | | | | 4,836,200 | |
St. Paul Housing & Redevelopment Energy Revenue | | | | | | | | |
Series A 4.00% 10/1/30 | | | 1,235,000 | | | | 1,436,058 | |
Series A 4.00% 10/1/31 | | | 885,000 | | | | 1,020,688 | |
Series A 4.00% 10/1/33 | | | 365,000 | | | | 416,195 | |
| | | | | | | | |
| | | | | | | 46,956,846 | |
| | | | | | | | |
Healthcare Revenue Bonds — 23.58% | | | | | | | | |
Anoka Healthcare & Housing Facilities Revenue | | | | | | | | |
(The Homestead at Anoka Project) | | | | | | | | |
5.125% 11/1/49 | | | 1,100,000 | | | | 1,102,167 | |
5.375% 11/1/34 | | | 320,000 | | | | 330,381 | |
31
Schedules of investments
Delaware Tax-Free Minnesota Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Apple Valley Senior Housing Revenue | | | | | | | | |
(PHS Apple Valley Senior Housing, Inc. - Orchard Path Project) | | | | | | | | |
5.00% 9/1/43 | | | 465,000 | | | $ | 480,554 | |
5.00% 9/1/58 | | | 3,220,000 | | | | 3,301,466 | |
Apple Valley Senior Living Revenue | | | | | | | | |
(Senior Living LLC Project) | | | | | | | | |
2nd Tier Series B 5.00% 1/1/47 | | | 1,725,000 | | | | 1,144,865 | |
2nd Tier Series B 5.25% 1/1/37 | | | 505,000 | | | | 386,785 | |
4th Tier Series D 7.00% 1/1/37 | | | 1,665,000 | | | | 1,323,941 | |
4th Tier Series D 7.25% 1/1/52 | | | 2,500,000 | | | | 1,892,875 | |
Bethel Housing & Health Care Facilities Revenue | | | | | | | | |
(Benedictine Health System – St. Peter | | | | | | | | |
Communities Project) | | | | | | | | |
Series A 5.50% 12/1/48 | | | 2,350,000 | | | | 2,258,703 | |
Bethel Senior Housing Revenue | | | | | | | | |
(The Lodge at The Lakes at Stillwater Project) | | | | | | | | |
5.00% 6/1/38 | | | 450,000 | | | | 459,491 | |
5.00% 6/1/48 | | | 1,000,000 | | | | 1,007,900 | |
5.00% 6/1/53 | | | 2,450,000 | | | | 2,464,210 | |
Center City Health Care Facilities Revenue | | | | | | | | |
(Hazelden Betty Ford Foundation Project) | | | | | | | | |
4.00% 11/1/34 | | | 500,000 | | | | 559,655 | |
4.00% 11/1/41 | | | 800,000 | | | | 880,720 | |
5.00% 11/1/26 | | | 500,000 | | | | 567,165 | |
Chatfield Healthcare and Housing Facilities Revenue | | | | | | | | |
(Chosen Valley Care Center Project) | | | | | | | | |
5.00% 9/1/44 | | | 500,000 | | | | 470,710 | |
Crookston Health Care Facilities Revenue | | | | | | | | |
(Riverview Health Project) | | | | | | | | |
5.00% 5/1/38 | | | 100,000 | | | | 100,064 | |
5.00% 5/1/44 | | | 1,500,000 | | | | 1,487,730 | |
5.00% 5/1/51 | | | 1,585,000 | | | | 1,535,199 | |
Dakota County Community Development Agency Senior Housing Revenue | | | | | | | | |
(Walker Highview Hills Project) | | | | | | | | |
Series A 144A 5.00% 8/1/36 # | | | 280,000 | | | | 290,492 | |
Series A 144A 5.00% 8/1/46 # | | | 2,380,000 | | | | 2,457,516 | |
Deephaven Housing & Healthcare Revenue | | | | | | | | |
(St. Therese Senior Living Project) | | | | | | | | |
Series A 5.00% 4/1/38 | | | 730,000 | | | | 675,221 | |
Series A 5.00% 4/1/40 | | | 705,000 | | | | 644,088 | |
Series A 5.00% 4/1/48 | | | 315,000 | | | | 280,117 | |
32
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Duluth Economic Development Authority | | | | | | | | |
(Essentia Health Obligated Group) | | | | | | | | |
Series A 4.25% 2/15/43 | | | 2,000,000 | | | $ | 2,196,160 | |
Series A 5.00% 2/15/48 | | | 1,850,000 | | | | 2,130,848 | |
(St. Luke’s Hospital of Duluth Obligated Group) | | | | | | | | |
5.75% 6/15/32 | | | 3,750,000 | | | | 3,972,150 | |
6.00% 6/15/39 | | | 3,570,000 | | | | 3,779,095 | |
Glencoe Health Care Facilities Revenue | | | | | | | | |
(Glencoe Regional Health Services Project) | | | | | | | | |
4.00% 4/1/24 | | | 500,000 | | | | 523,850 | |
4.00% 4/1/25 | | | 660,000 | | | | 689,799 | |
4.00% 4/1/31 | | | 60,000 | | | | 61,808 | |
Hayward Health Care Facilities Revenue | | | | | | | | |
(American Baptist Homes Midwest Obligated Group) | | | | | | | | |
5.375% 8/1/34 | | | 660,000 | | | | 634,649 | |
5.75% 2/1/44 | | | 500,000 | | | | 483,745 | |
(St. John’s Lutheran Home of Albert Lea Project) | | | | | | | | |
5.375% 10/1/44 | | | 575,000 | | | | 535,026 | |
Maple Grove Health Care Facilities Revenue | | | | | | | | |
(Maple Grove Hospital Corporation) | | | | | | | | |
4.00% 5/1/37 | | | 2,000,000 | | | | 2,140,740 | |
5.00% 5/1/27 | | | 1,400,000 | | | | 1,669,248 | |
5.00% 5/1/29 | | | 1,000,000 | | | | 1,178,770 | |
5.00% 5/1/30 | | | 850,000 | | | | 998,129 | |
5.00% 5/1/31 | | | 500,000 | | | | 584,350 | |
5.00% 5/1/32 | | | 500,000 | | | | 581,295 | |
(North Memorial Health Care) | | | | | | | | |
5.00% 9/1/31 | | | 1,000,000 | | | | 1,132,580 | |
5.00% 9/1/32 | | | 1,000,000 | | | | 1,127,700 | |
Maple Plain Senior Housing & Health Care Revenue | | | | | | | | |
(Haven Homes Project) | | | | | | | | |
5.00% 7/1/54 | | | 3,500,000 | | | | 3,585,155 | |
Minneapolis Health Care System Revenue | | | | | | | | |
(Fairview Health Services) | | | | | | | | |
Series A 4.00% 11/15/48 | | | 5,600,000 | | | | 6,265,896 | |
Series A 5.00% 11/15/33 | | | 500,000 | | | | 580,735 | |
Series A 5.00% 11/15/34 | | | 500,000 | | | | 579,630 | |
Series A 5.00% 11/15/35 | | | 1,000,000 | | | | 1,239,650 | |
Series A 5.00% 11/15/44 | | | 1,000,000 | | | | 1,137,730 | |
Series A 5.00% 11/15/49 | | | 3,475,000 | | | | 4,183,344 | |
33
Schedules of investments
Delaware Tax-Free Minnesota Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Minneapolis Senior Housing & Healthcare Revenue | | | | | | | | |
(Ecumen-Abiitan Mill City Project) | | | | | | | | |
5.00% 11/1/35 | | | 500,000 | | | $ | 502,070 | |
5.25% 11/1/45 | | | 1,950,000 | | | | 1,954,173 | |
5.375% 11/1/50 | | | 455,000 | | | | 456,811 | |
Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Allina Health System) | | | | | | | | |
Series A 5.00% 11/15/28 | | | 1,550,000 | | | | 1,935,919 | |
Red Wing Senior Housing | | | | | | | | |
(Deer Crest Project) | | | | | | | | |
Series A 5.00% 11/1/27 | | | 430,000 | | | | 434,730 | |
Series A 5.00% 11/1/32 | | | 330,000 | | | | 333,590 | |
Series A 5.00% 11/1/42 | | | 1,250,000 | | | | 1,263,350 | |
Rochester Health Care & Housing Revenue | | | | | | | | |
(The Homestead at Rochester Project) | | | | | | | | |
Series A 6.875% 12/1/48 | | | 2,980,000 | | | | 3,206,242 | |
Rochester Health Care Facilities Revenue | | | | | | | | |
(Mayo Clinic) | | | | | | | | |
4.00% 11/15/41 | | | 4,515,000 | | | | 4,663,498 | |
(Olmsted Medical Center Project) | | | | | | | | |
5.00% 7/1/24 | | | 295,000 | | | | 329,524 | |
5.00% 7/1/33 | | | 650,000 | | | | 707,311 | |
5.875% 7/1/30 | | | 1,850,000 | | | | 1,856,623 | |
Sartell Health Care Facilities Revenue | | | | | | | | |
(Country Manor Campus Project) | | | | | | | | |
Series A 5.25% 9/1/27 | | | 1,280,000 | | | | 1,301,568 | |
Series A 5.30% 9/1/37 | | | 1,200,000 | | | | 1,215,228 | |
Sauk Rapids Health Care Housing Facilities Revenue | | | | | | | | |
(Good Shepherd Lutheran Home) | | | | | | | | |
5.125% 1/1/39 | | | 1,350,000 | | | | 1,331,748 | |
Shakopee Health Care Facilities Revenue | | | | | | | | |
(St. Francis Regional Medical Center) | | | | | | | | |
4.00% 9/1/31 | | | 915,000 | | | | 981,868 | |
5.00% 9/1/24 | | | 575,000 | | | | 665,770 | |
5.00% 9/1/25 | | | 750,000 | | | | 862,717 | |
5.00% 9/1/26 | | | 575,000 | | | | 658,231 | |
5.00% 9/1/27 | | | 405,000 | | | | 462,316 | |
5.00% 9/1/28 | | | 425,000 | | | | 481,534 | |
5.00% 9/1/29 | | | 425,000 | | | | 480,080 | |
5.00% 9/1/34 | | | 730,000 | | | | 805,489 | |
34
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Healthcare Revenue Bonds (continued) | | | | | | | | |
St. Cloud Health Care Revenue | | | | | | | | |
(Centracare Health System Project) | | | | | | | | |
4.00% 5/1/49 | | | 5,315,000 | | | $ | 5,930,743 | |
5.00% 5/1/48 | | | 5,090,000 | | | | 6,174,272 | |
Series A 4.00% 5/1/37 | | | 965,000 | | | | 1,058,991 | |
Series A 5.00% 5/1/46 | | | 3,715,000 | | | | 4,284,695 | |
Unrefunded Balance 5.125% 5/1/30 | | | 740,000 | | | | 742,286 | |
St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Fairview Health Services) | | | | | | | | |
Series A 4.00% 11/15/43 | | | 2,450,000 | | | | 2,723,836 | |
Series A 5.00% 11/15/47 | | | 1,560,000 | | | | 1,845,808 | |
(HealthPartners Obligated Group Project) | | | | | | | | |
Series A 5.00% 7/1/29 | | | 2,200,000 | | | | 2,564,892 | |
Series A 5.00% 7/1/32 | | | 3,000,000 | | | | 3,450,360 | |
Series A 5.00% 7/1/33 | | | 1,260,000 | | | | 1,444,414 | |
St. Paul Housing & Redevelopment Authority Housing & Health Care Facilities Revenue | | | | | | | | |
(Episcopal Homes Project) | | | 3,100,000 | | | | 2,881,543 | |
5.125% 5/1/48 | | | | | | | | |
St. Paul Housing & Redevelopment Authority Multifamily Housing Revenue | | | | | | | | |
(Marian Center Project) | | | | | | | | |
Series A 5.30% 11/1/30 | | | 500,000 | | | | 499,975 | |
Series A 5.375% 5/1/43 | | | 500,000 | | | | 469,155 | |
Wayzata Senior Housing Revenue | | | | | | | | |
(Folkestone Senior Living Community) | | | 500,000 | | | | 495,255 | |
3.75% 8/1/36 | | | | | | | | |
4.00% 8/1/44 | | | 800,000 | | | | 797,536 | |
5.00% 8/1/49 | | | 1,000,000 | | | | 1,048,410 | |
5.00% 8/1/54 | | | 875,000 | | | | 913,623 | |
West St. Paul Housing and Health Care Facilities Revenue | | | | | | | | |
(Walker Westwood Ridge Campus Project) | | | | | | | | |
4.50% 11/1/40 | | | 250,000 | | | | 241,618 | |
4.75% 11/1/52 | | | 750,000 | | | | 717,802 | |
Winona Health Care Facilities Revenue | | | | | | | | |
(Winona Health Obligation Group) | | | | | | | | |
4.50% 7/1/25 | | | 850,000 | | | | 871,743 | |
4.65% 7/1/26 | | | 540,000 | | | | 553,921 | |
35
Schedules of investments
Delaware Tax-Free Minnesota Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Woodbury Housing & Redevelopment Authority Revenue | | | | | | | | |
(St. Therese of Woodbury) | | | | | | | | |
5.00% 12/1/34 | | | 500,000 | | | $ | 510,115 | |
5.125% 12/1/44 | | | 1,605,000 | | | | 1,626,555 | |
| | | | | | | | |
| | | | | | | 136,832,035 | |
| | | | | | | | |
Housing Revenue Bonds — 0.40% | | | | | | | | |
Minnesota Housing Finance Agency | | | | | | | | |
Homeownership Finance (Mortgage-Backed Securities Program) | | | | | | | | |
Series D 4.70% 1/1/31 (GNMA) (FNMA) (FHLMC) | | | 920,000 | | | | 944,095 | |
Northwest Multi-County Housing & Redevelopment Authority | | | | | | | | |
(Pooled Housing Program) | | | | | | | | |
5.50% 7/1/45 | | | 1,330,000 | | | | 1,373,557 | |
| | | | | | | | |
| | | | | | | 2,317,652 | |
| | | | | | | | |
Lease Revenue Bonds — 2.92% | | | | | | | | |
Minnesota General Fund Revenue Appropriations | | | | | | | | |
Series A 5.00% 6/1/38 | | | 1,250,000 | | | | 1,374,900 | |
Series A 5.00% 6/1/43 | | | 3,835,000 | | | | 4,199,632 | |
Series B 5.00% 3/1/28 | | | 2,500,000 | | | | 2,666,200 | |
Series B 5.00% 3/1/29 | | | 1,000,000 | | | | 1,065,860 | |
Minnesota Housing Finance Agency | | | | | | | | |
(State Appropriation — Housing Infrastructure) | | | | | | | | |
Series C 5.00% 8/1/34 | | | 1,565,000 | | | | 1,801,957 | |
Series C 5.00% 8/1/35 | | | 1,645,000 | | | | 1,889,973 | |
University of Minnesota Special Purpose Revenue | | | | | | | | |
(State Supported Biomed Science Research | | | | | | | | |
Facilities Funding Project) | | | | | | | | |
Series A 5.00% 8/1/35 | | | 3,960,000 | | | | 3,974,414 | |
| | | | | | | | |
| | | | | | | 16,972,936 | |
| | | | | | | | |
Local General Obligation Bonds — 12.23% | | | | | | | | |
Brainerd Independent School District No. 181 | | | | | | | | |
(School Building) | | | | | | | | |
Series A 4.00% 2/1/38 | | | 1,500,000 | | | | 1,722,060 | |
Series A 4.00% 2/1/43 | | | 3,500,000 | | | | 3,975,300 | |
Burnsville-Eagan-Savage Independent School District No. 191 | | | | | | | | |
(Alternative Facilities) | | | | | | | | |
Series A 4.00% 2/1/28 | | | 920,000 | | | | 1,040,824 | |
Series A 4.00% 2/1/29 | | | 1,800,000 | | | | 2,030,166 | |
36
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Local General Obligation Bonds (continued) | | | | | | | | |
Chaska Independent School District No. 112 | | | | | | | | |
(School Building) | | | | | | | | |
Series A 5.00% 2/1/27 | | | 1,905,000 | | | $ | 2,347,665 | |
Duluth | | | | | | | | |
(DECC Improvement) | | | | | | | | |
Series A 5.00% 2/1/32 | | | 1,000,000 | | | | 1,219,260 | |
Series A 5.00% 2/1/33 | | | 3,585,000 | | | | 4,356,205 | |
Duluth Independent School District No. 709 | | | | | | | | |
Series A 4.00% 2/1/27 | | | 160,000 | | | | 184,590 | |
Series A 4.00% 2/1/28 | | | 1,250,000 | | | | 1,436,863 | |
Hennepin County | | | | | | | | |
Series A 5.00% 12/1/26 | | | 2,635,000 | | | | 3,366,028 | |
Series A 5.00% 12/1/36 | | | 940,000 | | | | 1,169,990 | |
Series A 5.00% 12/1/37 | | | 2,850,000 | | | | 3,602,200 | |
Series A 5.00% 12/1/37 | | | 2,645,000 | | | | 3,288,502 | |
Series A 5.00% 12/1/38 | | | 3,310,000 | | | | 4,173,016 | |
Series B 5.00% 12/1/30 | | | 1,000,000 | | | | 1,261,970 | |
Series C 5.00% 12/1/28 | | | 1,500,000 | | | | 2,018,070 | |
Series C 5.00% 12/1/30 | | | 1,245,000 | | | | 1,571,153 | |
Series C 5.00% 12/1/37 | | | 3,000,000 | | | | 3,729,870 | |
Mahtomedi Independent School District No. 832 | | | | | | | | |
(School Building) | | | | | | | | |
Series A 5.00% 2/1/30 | | | 445,000 | | | | 532,803 | |
Minneapolis Special School District No. 1 | | | | | | | | |
Series A 4.00% 2/1/36 | | | 450,000 | | | | 538,583 | |
Series A 4.00% 2/1/37 | | | 600,000 | | | | 715,422 | |
Series A 4.00% 2/1/38 | | | 625,000 | | | | 742,906 | |
Series B 4.00% 2/1/36 | | | 945,000 | | | | 1,131,023 | |
Series B 4.00% 2/1/37 | | | 1,255,000 | | | | 1,496,425 | |
Series B 4.00% 2/1/38 | | | 1,305,000 | | | | 1,551,188 | |
Mounds View Independent School District No. 621 | | | | | | | | |
(Minnesota School District Credit Enhancement Program) | | | | | | | | |
Series A 4.00% 2/1/43 | | | 3,000,000 | | | | 3,401,550 | |
Mountain Iron-Buhl Independent School District No. 712 | | | | | | | | |
(School Building) | | | | | | | | |
Series A 4.00% 2/1/26 | | | 1,315,000 | | | | 1,559,156 | |
St. Michael-Albertville Independent School District No. 885 | | | | | | | | |
(School Building) | | | | | | | | |
Series A 5.00% 2/1/27 | | | 1,865,000 | | | | 2,296,132 | |
37
Schedules of investments
Delaware Tax-Free Minnesota Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Local General Obligation Bonds (continued) | | | | | | | | |
Virginia, Minnesota Sales Tax Revenue | | | | | | | | |
(General Obligation Sales Tax) | | | | | | | | |
Series A 4.00% 2/1/35 (AGM) | | | 500,000 | | | $ | 579,295 | |
Wayzata Independent School District No. 284 | | | | | | | | |
Series A 5.00% 2/1/28 | | | 1,950,000 | | | | 2,492,685 | |
White Bear Lake Independent School District No. 624 | | | | | | | | |
Series A 3.00% 2/1/43 | | | 10,645,000 | | | | 11,403,775 | |
| | | | | | | | |
| | | | | | | 70,934,675 | |
| | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds — 7.28% | | | | | | | | |
Dakota & Washington Counties Housing & Redevelopment Authority Single Family Residential Mortgage Revenue | | | | | | | | |
(City of Bloomington) | | | | | | | | |
Series B 8.375% 9/1/21 (GNMA) (AMT) | | | 14,115,000 | | | | 15,188,163 | |
Minnesota | | | | | | | | |
Series A Unrefunded | | | | | | | | |
Balance 5.00% 10/1/24-21 § | | | 2,555,000 | | | | 2,688,167 | |
Series A Unrefunded | | | | | | | | |
Balance 5.00% 10/1/27-21 § | | | 5,200,000 | | | | 5,471,024 | |
(State Trunk Highway) | | | | | | | | |
Series B 5.00% 10/1/29-21 § | | | 5,000,000 | | | | 5,260,600 | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(St. Catherine University) | | | | | | | | |
Series 7-Q 5.00% 10/1/23-22 § | | | 350,000 | | | | 384,479 | |
Series 7-Q 5.00% 10/1/24-22 § | | | 475,000 | | | | 521,792 | |
Series 7-Q 5.00% 10/1/27-22 § | | | 200,000 | | | | 219,702 | |
St. Paul Housing & Redevelopment Authority Hospital Facility Revenue | | | | | | | | |
(Healtheast Care System Project) | | | | | | | | |
Series A 5.00% 11/15/29-25 § | | | 910,000 | | | | 1,126,380 | |
Series A 5.00% 11/15/30-25 § | | | 670,000 | | | | 829,312 | |
University of Minnesota | | | | | | | | |
Series A 5.50% 7/1/21 | | | 2,365,000 | | | | 2,462,675 | |
Western Minnesota Municipal Power Agency Revenue | | | | | | | | |
Series A 5.00% 1/1/34-24 § | | | 4,000,000 | | | | 4,625,440 | |
Series A 5.00% 1/1/46-24 § | | | 3,000,000 | | | | 3,469,080 | |
| | | | | | | | |
| | | | | | | 42,246,814 | |
| | | | | | | | |
38
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Special Tax Revenue Bonds — 4.60% | | | | | | | | |
Minneapolis Development Revenue | | | | | | | | |
(Limited Tax Supported Common Bond Fund) | | | | | | | | |
Series 2-A 6.00% 12/1/40 | | | 3,000,000 | | | $ | 3,041,670 | |
Minneapolis Revenue | | | | | | | | |
(YMCA Greater Twin Cities Project) | | | | | | | | |
4.00% 6/1/30 | | | 250,000 | | | | 271,160 | |
Puerto Rico Sales Tax Financing Revenue | | | | | | | | |
(Restructured) | | | | | | | | |
Series A-1 4.75% 7/1/53 | | | 17,908,000 | | | | 18,822,024 | |
St. Paul Sales Tax Revenue | | | | | | | | |
Series G 5.00% 11/1/30 | | | 655,000 | | | | 769,566 | |
Series G 5.00% 11/1/31 | | | 1,500,000 | | | | 1,758,990 | |
Virgin Islands Public Finance Authority | | | | | | | | |
(Matching Fund Senior Lien) | | | | | | | | |
5.00% 10/1/29 (AGM) | | | 2,000,000 | | | | 2,038,320 | |
| | | | | | | | |
| | | | | | | 26,701,730 | |
| | | | | | | | |
State General Obligation Bonds — 9.80% | | | | | | | | |
Commonwealth of Puerto Rico | | | | | | | | |
(Public Improvement) | | | | | | | | |
Series B 5.75% 7/1/38 ‡ | | | 2,530,000 | | | | 1,793,138 | |
Minnesota | | | | | | | | |
Series A 5.00% 8/1/40 | | | 1,750,000 | | | | 2,329,337 | |
(State Trunk Highway) | | | | | | | | |
Series E 5.00% 10/1/26 | | | 3,395,000 | | | | 4,324,857 | |
(Various Purposes) | | | | | | | | |
Series A 5.00% 8/1/27 | | | 7,590,000 | | | | 9,296,991 | |
Series A 5.00% 8/1/29 | | | 2,500,000 | | | | 3,048,625 | |
Series A 5.00% 8/1/30 | | | 4,200,000 | | | | 4,931,304 | |
Series A 5.00% 8/1/32 | | | 3,875,000 | | | | 4,531,619 | |
Series A 5.00% 8/1/33 | | | 2,075,000 | | | | 2,694,657 | |
Series A 5.00% 10/1/33 | | | 3,000,000 | | | | 3,812,340 | |
Series A 5.00% 8/1/35 | | | 2,975,000 | | | | 3,838,464 | |
Series A 5.00% 8/1/38 | | | 3,450,000 | | | | 4,408,341 | |
Series A Unrefunded Balance 4.00% 8/1/27 | | | 955,000 | | | | 1,018,517 | |
Series D 5.00% 8/1/26 | | | 6,000,000 | | | | 7,606,080 | |
Series D 5.00% 8/1/27 | | | 2,525,000 | | | | 3,195,842 | |
| | | | | | | | |
| | | | | | | 56,830,112 | |
| | | | | | | | |
Transportation Revenue Bonds — 6.70% | | | | | | | | |
Minneapolis – St. Paul Metropolitan Airports Commission Revenue | | | | | | | | |
(Senior) | | | | | | | | |
Series C 5.00% 1/1/29 | | | 350,000 | | | | 431,263 | |
39
Schedules of investments
Delaware Tax-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% 1/1/33 | | | 850,000 | | | $ | 1,025,865 | |
Series C 5.00% 1/1/36 | | | 600,000 | | | | 717,714 | |
Series C 5.00% 1/1/41 | | | 600,000 | | | | 709,350 | |
Series C 5.00% 1/1/46 | | | 1,595,000 | | | | 1,870,265 | |
(Subordinate) | | | | | | | | |
Series A 5.00% 1/1/35 | | | 1,000,000 | | | | 1,112,440 | |
Series A 5.00% 1/1/44 | | | 3,000,000 | | | | 3,646,500 | |
Series A 5.00% 1/1/49 | | | 5,000,000 | | | | 6,038,950 | |
Series B 5.00% 1/1/26 | | | 575,000 | | | | 606,625 | |
Series B 5.00% 1/1/27 | | | 1,160,000 | | | | 1,223,324 | |
Series B 5.00% 1/1/28 | | | 2,750,000 | | | | 2,898,225 | |
Series B 5.00% 1/1/29 | | | 120,000 | | | | 126,386 | |
Series B 5.00% 1/1/30 | | | 1,675,000 | | | | 1,762,770 | |
Series B 5.00% 1/1/31 | | | 1,750,000 | | | | 1,840,020 | |
Series B 5.00% 1/1/44 (AMT) | | | 3,595,000 | | | | 4,309,291 | |
Series B 5.00% 1/1/49 (AMT) | | | 6,150,000 | | | | 7,325,327 | |
St. Paul Port Authority Revenue | | | | | | | | |
(Amherst H. Wilder Foundation) | | | | | | | | |
Series 3 5.00% 12/1/36 | | | 3,200,000 | | | | 3,208,032 | |
| | | | | | | | |
| | | | | | | 38,852,347 | |
| | | | | | | | |
Water & Sewer Revenue Bonds — 3.09% | | | | | | | | |
Guam Government Waterworks Authority | | | | | | | | |
5.00% 7/1/40 | | | 1,930,000 | | | | 2,240,769 | |
Metropolitan Council General Obligation Wastewater Revenue | | | | | | | | |
(Minneapolis-St. Paul Metropolitan Area) | | | | | | | | |
Series B 4.00% 9/1/27 | | | 2,400,000 | | | | 2,567,664 | |
Series B 5.00% 9/1/25 | | | 2,000,000 | | | | 2,185,680 | |
Series C 4.00% 3/1/31 | | | 3,120,000 | | | | 3,714,921 | |
Series C 4.00% 3/1/32 | | | 3,225,000 | | | | 3,815,820 | |
Series E 5.00% 9/1/23 | | | 2,000,000 | | | | 2,190,320 | |
Minnesota Public Facilities Authority | | | | | | | | |
Series B 4.00% 3/1/26 | | | 1,000,000 | | | | 1,194,430 | |
| | | | | | | | |
| | | | | | | 17,909,604 | |
| | | | | | | | |
Total Municipal Bonds (cost $541,138,413) | | | | | | | 567,649,257 | |
| | | | | | | | |
40
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Short-Term Investments — 1.08% | | | | | | | | |
| |
Variable Rate Demand Notes — 1.08%¤ | | | | | | | | |
Minneapolis Health Care System Revenue | | | | | | | | |
(Fairview Health Services) Series C | | | | | | | | |
0.03% 11/15/48 (LOC – Wells Fargo Bank N.A.) | | | 100,000 | | | $ | 100,000 | |
Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Children’s Hospitals and Clinics) | | | | | | | | |
Series A-1 0.02% 8/15/37 (AGM) (SPA – US Bank N.A.) | | | 1,300,000 | | | | 1,300,000 | |
Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Revenue | | | | | | | | |
(Allina Health System) | | | | | | | | |
Series B-1 0.02% 11/15/35 (LOC – JPMorgan Chase Bank N.A.) | | | 4,850,000 | | | | 4,850,000 | |
| | | | | | | | |
Total Short-Term Investments (cost $6,250,000) | | | | | | | 6,250,000 | |
| | | | | | | | |
Total Value of Securities—98.92% | | | | | | | | |
(cost $547,388,413) | | | | | | $ | 573,899,257 | |
| | | | | | | | |
| ° | Principal amount shown is stated in USD unless noted that the security is denominated in another currency. |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $11,156,707, which represents 1.17% of the Fund’s net assets. See Note 8 in “Notes to financial statements.” |
| ‡ | Non-income producing security. Security is currently in default. |
| ^ | Zero-coupon security. The rate shown is the effective yield at the time of purchase. |
| § | Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 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 August 31, 2020. |
Summary of abbreviations:
AGM – Insured by Assured Guaranty Municipal Corporation
AMT – Subject to Alternative Minimum Tax
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
GNMA – Government National Mortgage Association
LLC – Limited Liability Corporation
41
Schedules of investments
Delaware Tax-Free Minnesota Fund
Summary of abbreviations: (continued)
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.
42
| | |
| Schedules of investments | | |
| Delaware Tax-Free Minnesota Intermediate Fund | | August 31, 2020 |
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds — 97.53% | | | | | | | | |
| |
Corporate Revenue Bond — 0.53% | | | | | | | | |
St. Paul Port Authority Solid Waste Disposal Revenue | | | | | | | | |
(Gerdau St. Paul Steel Mill Project) | | | | | | | | |
Series 7 144A 4.50% 10/1/37 (AMT)# | | | 460,000 | | | $ | 463,381 | |
| | | | | | | | |
| | | | | | | 463,381 | |
| | | | | | | | |
Education Revenue Bonds — 13.28% | | | | | | | | |
Bethel Charter School Lease Revenue | | | | | | | | |
(Spectrum High School Project) | | | | | | | | |
Series A 4.00% 7/1/32 | | | 425,000 | | | | 443,572 | |
Brooklyn Park Charter School Lease Revenue | | | | | | | | |
(Prairie Seeds Academy Project) | | | | | | | | |
Series A 5.00% 3/1/34 | | | 485,000 | | | | 496,160 | |
Cologne Charter School Lease Revenue | | | | | | | | |
(Cologne Academy Project) | | | | | | | | |
Series A 5.00% 7/1/29 | | | 305,000 | | | | 328,052 | |
Duluth Housing & Redevelopment Authority Revenue | | | | | | | | |
(Duluth Public Schools Academy Project) | | | | | | | | |
Series A 5.00% 11/1/38 | | | 400,000 | | | | 428,468 | |
Forest Lake Charter School Lease Revenue Fund | | | | | | | | |
(Lakes International Language Academy Project) | | | | | | | | |
Series A 5.50% 8/1/36 | | | 420,000 | | | | 442,462 | |
Hugo Charter School Lease Revenue | | | | | | | | |
(Noble Academy Project) | | | | | | | | |
Series A 5.00% 7/1/29 | | | 530,000 | | | | 562,738 | |
Minneapolis Charter School Lease Revenue | | | | | | | | |
(Hiawatha Academies Project) | | | | | | | | |
Series A 5.00% 7/1/31 | | | 500,000 | | | | 533,350 | |
Minneapolis Student Housing Revenue | | | | | | | | |
(Riverton Community Housing Project) | | | | | | | | |
5.25% 8/1/39 | | | 525,000 | | | | 530,334 | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(Bethel University) | | | | | | | | |
5.00% 5/1/32 | | | 525,000 | | | | 580,975 | |
(Gustavus Adolphus College) | | | | | | | | |
5.00% 10/1/34 | | | 435,000 | | | | 503,834 | |
5.00% 10/1/35 | | | 555,000 | | | | 640,553 | |
(St. Catherine University) | | | | | | | | |
Series A 5.00% 10/1/35 | | | 565,000 | | | | 654,242 | |
(St. John’s University) | | | | | | | | |
Series 8-I 5.00% 10/1/31 | | | 130,000 | | | | 150,294 | |
43
Schedules of investments
Delaware Tax-Free Minnesota Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Education Revenue Bonds (continued) | | | | | | | | |
(St. Olaf College) | | | | | | | | |
Series 8-G 5.00% 12/1/31 | | | 125,000 | | | $ | 147,139 | |
Series 8-G 5.00% 12/1/32 | | | 125,000 | | | | 146,518 | |
(University of St. Thomas) | | | | | | | | |
4.00% 10/1/36 | | | 300,000 | | | | 339,276 | |
5.00% 10/1/34 | | | 350,000 | | | | 434,378 | |
5.00% 10/1/35 | | | 750,000 | | | | 926,730 | |
Series 7-U 4.00% 4/1/26 | | | 1,400,000 | | | | 1,496,726 | |
Series A 5.00% 10/1/29 | | | 630,000 | | | | 772,626 | |
Rice County Educational Facilities Revenue | | | | | | | | |
(Shattuck-St. Mary’s School) | | | | | | | | |
Series A 144A 5.00% 8/1/22 # | | | 325,000 | | | | 332,501 | |
St. Paul Housing & Redevelopment Authority Charter School Lease Revenue | | | | | | | | |
(Academia Cesar Chavez School Project) | | | | | | | | |
Series A 5.25% 7/1/50 | | | 340,000 | | | | 336,937 | |
(Great River School Project) | | | | | | | | |
Series A 144A 5.25% 7/1/33 # | | | 140,000 | | | | 151,579 | |
(Twin Cities Academy Project) | | | | | | | | |
Series A 5.30% 7/1/45 | | | 260,000 | | | | 274,232 | |
| | | | | | | | |
| | | | | | | 11,653,676 | |
| | | | | | | | |
Electric Revenue Bonds — 7.59% | | | | | | | | |
Central Minnesota Municipal Power Agency | | | | | | | | |
(Brookings Twin Cities Transmission Project) | | | | | | | | |
Series E 5.00% 1/1/21 | | | 1,095,000 | | | | 1,111,841 | |
Series E 5.00% 1/1/23 | | | 1,000,000 | | | | 1,060,090 | |
Chaska Electric Revenue | | | | | | | | |
Series A 5.00% 10/1/28 | | | 250,000 | | | | 301,980 | |
Minnesota Municipal Power Agency Electric Revenue | | | | | | | | |
Series A 5.00% 10/1/29 | | | 500,000 | | | | 586,755 | |
Series A 5.00% 10/1/30 | | | 240,000 | | | | 281,326 | |
Northern Municipal Power Agency Electric System Revenue | | | | | | | | |
5.00% 1/1/29 | | | 150,000 | | | | 181,617 | |
5.00% 1/1/30 | | | 235,000 | | | | 289,010 | |
5.00% 1/1/31 | | | 350,000 | | | | 419,136 | |
Series A 5.00% 1/1/25 | | | 200,000 | | | | 220,468 | |
Rochester Electric Utility Revenue | | | | | | | | |
Series A 5.00% 12/1/28 | | | 300,000 | | | | 376,713 | |
Series A 5.00% 12/1/29 | | | 500,000 | | | | 626,125 | |
Series A 5.00% 12/1/31 | | | 575,000 | | | | 713,316 | |
44
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Electric Revenue Bonds (continued) | | | | | | | | |
St. Paul Housing & Redevelopment Energy Revenue | | | | | | | | |
Series A 4.00% 10/1/30 | | | 425,000 | | | $ | 494,190 | |
| | | | | | | | |
| | | | | | | 6,662,567 | |
| | | | | | | | |
Healthcare Revenue Bonds — 24.67% | | | | | | | | |
Anoka Healthcare & Housing Facilities Revenue | | | | | | | | |
(The Homestead at Anoka Project) | | | | | | | | |
5.375% 11/1/34 | | | 270,000 | | | | 278,759 | |
Apple Valley Senior Living Revenue | | | | | | | | |
(Senior Living LLC Project) | | | | | | | | |
3rd Tier Series C 4.25% 1/1/27 | | | 500,000 | | | | 396,710 | |
3rd Tier Series C 5.00% 1/1/32 | | | 420,000 | | | | 306,940 | |
Bethel Housing & Health Care Facilities Revenue | | | | | | | | |
(Benedictine Health System - St. Peter | | | | | | | | |
Communities Project) | | | | | | | | |
Series A 5.50% 12/1/48 | | | 250,000 | | | | 240,287 | |
Bethel Senior Housing Revenue | | | | | | | | |
(The Lodge at the Lakes at Stillwater Project) | | | | | | | | |
5.00% 6/1/38 | | | 250,000 | | | | 255,272 | |
Center City Health Care Facilities Revenue | | | | | | | | |
(Hazelden Betty Ford Foundation Project) | | | | | | | | |
5.00% 11/1/24 | | | 600,000 | | | | 684,912 | |
Chatfield Healthcare and Housing Facilities Revenue | | | | | | | | |
(Chosen Valley Care Center Project) | | | | | | | | |
4.00% 9/1/34 | | | 100,000 | | | | 86,997 | |
4.00% 9/1/39 | | | 100,000 | | | | 82,251 | |
Crookston Health Care Facilities Revenue | | | | | | | | |
(RiverView Health Project) | | | | | | | | |
5.00% 5/1/38 | | | 400,000 | | | | 400,256 | |
Dakota County Community Development Agency Senior Housing Revenue | | | | | | | | |
(Walker Highview Hills Project) | | | | | | | | |
Series A 144A 5.00% 8/1/36 # | | | 480,000 | | | | 497,986 | |
Duluth Economic Development Authority | | | | | | | | |
(Essentia Health Obligated Group) | | | | | | | | |
Series A 5.00% 2/15/37 | | | 750,000 | | | | 881,550 | |
Series A 5.00% 2/15/48 | | | 390,000 | | | | 449,206 | |
(St. Luke’s Hospital of Duluth Obligated Group) 5.75% 6/15/32 | | | 750,000 | | | | 794,430 | |
Glencoe Health Care Facilities Revenue | | | | | | | | |
(Glencoe Regional Health Services Project) | | | | | | | | |
4.00% 4/1/26 | | | 270,000 | | | | 281,715 | |
45
Schedules of investments
Delaware Tax-Free Minnesota Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Hayward Health Care Facilities Revenue | | | | | | | | |
(American Baptist Homes Midwest Obligated Group) | | | | | | | | |
4.25% 8/1/24 | | | 463,334 | | | $ | 449,184 | |
Maple Grove Health Care Facilities Revenue | | | | | | | | |
(Maple Grove Hospital Corporation) | | | | | | | | |
4.00% 5/1/37 | | | 500,000 | | | | 535,185 | |
5.00% 5/1/28 | | | 1,000,000 | | | | 1,184,880 | |
(North Memorial Health Care) | | | | | | | | |
5.00% 9/1/31 | | | 320,000 | | | | 362,426 | |
Minneapolis Health Care System Revenue | | | | | | | | |
(Fairview Health Services) | | | | | | | | |
Series A 5.00% 11/15/33 | | | 500,000 | | | | 580,735 | |
Series A 5.00% 11/15/34 | | | 500,000 | | | | 579,630 | |
Series A 5.00% 11/15/35 | | | 500,000 | | | | 619,825 | |
Series A 5.00% 11/15/49 | | | 1,000,000 | | | | 1,203,840 | |
Minneapolis Senior Housing & Healthcare Revenue | | | | | | | | |
(Ecumen-Abiitan Mill City Project) | | | | | | | | |
5.00% 11/1/35 | | | 530,000 | | | | 532,194 | |
Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Allina Health System) | | | | | | | | |
Series A 5.00% 11/15/27 | | | 1,205,000 | | | | 1,513,805 | |
Rochester Health Care Facilities Revenue | | | | | | | | |
(Mayo Clinic) | | | | | | | | |
Series C 4.50% 11/15/38 • | | | 925,000 | | | | 960,760 | |
Sartell Health Care Facilities Revenue | | | | | | | | |
(Country Manor Campus Project) | | | | | | | | |
Series A 5.00% 9/1/21 | | | 1,050,000 | | | | 1,060,878 | |
Sauk Rapids Health Care Housing Facilities Revenue | | | | | | | | |
(Good Shepherd Lutheran Home) | | | | | | | | |
5.125% 1/1/39 | | | 575,000 | | | | 567,226 | |
St. Cloud Health Care Revenue | | | | | | | | |
(Centracare Health System Project) | | | | | | | | |
5.00% 5/1/48 | | | 810,000 | | | | 982,546 | |
Unrefunded Balance 5.125% 5/1/30 | | | 360,000 | | | | 361,113 | |
St. Paul Housing & Redevelopment Authority | | | | | | | | |
(Minnesota Public Radio Project) | | | | | | | | |
5.00% 12/1/25 | | | 1,000,000 | | | | 1,010,620 | |
46
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Healthcare Revenue Bonds (continued) | | | | | | | | |
St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Fairview Health Services) | | | | | | | | |
Series A 5.00% 11/15/47 | | | 275,000 | | | $ | 325,383 | |
(HealthPartners Obligated Group Project) | | | | | | | | |
5.00% 7/1/32 | | | 1,000,000 | | | | 1,150,120 | |
5.00% 7/1/33 | | | 200,000 | | | | 229,272 | |
St. Paul Housing & Redevelopment Authority Housing & Health Care Facilities Revenue | | | | | | | | |
(Episcopal Homes Project) | | | | | | | | |
5.00% 5/1/33 | | | 500,000 | | | | 494,885 | |
Wayzata Senior Housing Revenue | | | | | | | | |
(Folkestone Senior Living Community) | | | | | | | | |
5.00% 8/1/34 | | | 125,000 | | | | 132,749 | |
5.00% 8/1/35 | | | 150,000 | | | | 159,186 | |
West St. Paul, Housing and Health Care Facilities Revenue | | | | | | | | |
(Walker Westwood Ridge Campus Project) | | | | | | | | |
5.00% 11/1/37 | | | 500,000 | | | | 508,380 | |
Woodbury Housing & Redevelopment Authority Revenue | | | | | | | | |
(St. Therese of Woodbury) | | | | | | | | |
5.00% 12/1/34 | | | 500,000 | | | | 510,115 | |
| | | | | | | | |
| | | | | | | 21,652,208 | |
| | | | | | | | |
Housing Revenue Bond — 0.34% | | | | | | | | |
Northwest Multi-County Housing & Redevelopment Authority | | | | | | | | |
(Pooled Housing Program) | | | | | | | | |
5.50% 7/1/45 | | | 285,000 | | | | 294,334 | |
| | | | | | | | |
| | | | | | | 294,334 | |
| | | | | | | | |
Lease Revenue Bonds — 4.39% | | | | | | | | |
Minnesota General Fund Revenue Appropriations | | | | | | | | |
Series A 5.00% 6/1/38 | | | 1,100,000 | | | | 1,209,912 | |
Series A 5.00% 6/1/43 | | | 715,000 | | | | 782,982 | |
Series B 5.00% 3/1/27 | | | 1,000,000 | | | | 1,067,100 | |
Minnesota Housing Finance Agency State Appropriation | | | | | | | | |
(Housing Infrastructure) | | | | | | | | |
Series A 4.00% 8/1/33 | | | 655,000 | | | | 796,847 | |
| | | | | | | | |
| | | | | | | 3,856,841 | |
| | | | | | | | |
47
Schedules of investments
Delaware Tax-Free Minnesota Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Local General Obligation Bonds — 17.20% | | | | | | | | |
Chaska Independent School District No. 112 | | | | | | | | |
(School Building) | | | | | | | | |
Series A 5.00% 2/1/28 | | | 1,000,000 | | | $ | 1,227,580 | |
Duluth Independent School District No. 709 | | | | | | | | |
Series A 4.00% 2/1/28 | | | 250,000 | | | | 287,372 | |
Hennepin County | | | | | | | | |
Series A 5.00% 12/1/36 | | | 1,500,000 | | | | 1,867,005 | |
Series A 5.00% 12/1/38 | | | 1,055,000 | | | | 1,330,070 | |
Series C 5.00% 12/1/30 | | | 1,500,000 | | | | 1,892,955 | |
Hennepin County Regional Railroad Authority | | | | | | | | |
Series D 5.00% 12/1/30 | | | 2,365,000 | | | | 3,319,041 | |
Minneapolis Special School District No. 1 | | | | | | | | |
Series A 4.00% 2/1/36 | | | 220,000 | | | | 263,307 | |
Series B 4.00% 2/1/36 | | | 465,000 | | | | 556,535 | |
St. Michael-Albertville Independent School District No. 885 | | | | | | | | |
(School Building) | | | | | | | | |
Series A 5.00% 2/1/27 | | | 500,000 | | | | 615,585 | |
Virginia, Minnesota | | | | | | | | |
(General Obligation Sales Tax Revenue) | | | | | | | | |
Series A 4.00% 2/1/38 (AGM) | | | 1,000,000 | | | | 1,147,180 | |
White Bear Lake Independent School District No. 624 | | | | | | | | |
Series A 3.00% 2/1/43 | | | 2,420,000 | | | | 2,592,498 | |
| | | | | | | | |
| | | | | | | 15,099,128 | |
| | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds — 8.49% | | | | | | | | |
Minnesota | | | | | | | | |
Series A 5.00% 10/1/24-21 § | | | 2,000,000 | | | | 2,104,240 | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(St. Catherine University) | | | | | | | | |
Series 7-Q 5.00% 10/1/22 | | | 425,000 | | | | 466,867 | |
St. Paul Housing & Redevelopment Authority Hospital Revenue | | | | | | | | |
(Healtheast Care System Project) | | | | | | | | |
Series A 5.00% 11/15/29-25 § | | | 165,000 | | | | 204,234 | |
Series A 5.00% 11/15/30-25 § | | | 120,000 | | | | 148,533 | |
University of Minnesota | | | | | | | | |
Series A 5.00% 12/1/23-20 § | | | 1,000,000 | | | | 1,011,910 | |
Series A 5.25% 12/1/29-20 § | | | 1,000,000 | | | | 1,012,520 | |
Series D 5.00% 12/1/26-21 § | | | 1,000,000 | | | | 1,059,370 | |
48
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Pre-Refunded/Escrowed to Maturity Bonds (continued) | | | | | | | | |
Western Minnesota Municipal Power Agency Revenue | | | | | | | | |
Series A 5.00% 1/1/33-24 § | | | 1,250,000 | | | $ | 1,445,450 | |
| | | | | | | | |
| | | | | | | 7,453,124 | |
| | | | | | | | |
Special Tax Revenue Bonds — 3.32% | | | | | | | | |
Minneapolis Revenue | | | | | | | | |
(YMCA Greater Twin Cities Project) | | | | | | | | |
4.00% 6/1/27 | | | 100,000 | | | | 111,789 | |
Puerto Rico Sales Tax Financing Revenue | | | | | | | | |
(Restructured) | | | | | | | | |
Series A1 4.55% 7/1/40 | | | 830,000 | | | | 883,934 | |
Series A-1 4.75% 7/1/53 | | | 1,005,000 | | | | 1,056,295 | |
Series A-2 4.536% 7/1/53 | | | 378,000 | | | | 391,899 | |
St. Paul Sales Tax Revenue | | | | | | | | |
Series G 5.00% 11/1/28 | | | 400,000 | | | | 471,768 | |
| | | | | | | | |
| | | | | | | 2,915,685 | |
| | | | | | | | |
State General Obligation Bonds — 9.81% | | | | | | | | |
Commonwealth of Puerto Rico | | | | | | | | |
(Public Improvement) | | | | | | | | |
Series B 5.75% 7/1/38 ‡ | | | 345,000 | | | | 244,519 | |
Minnesota | | | | | | | | |
Series A 5.00% 8/1/33 | | | 285,000 | | | | 370,110 | |
Series A 5.00% 8/1/34 | | | 1,000,000 | | | | 1,295,200 | |
Series A 5.00% 8/1/40 | | | 750,000 | | | | 998,287 | |
Series D 5.00% 8/1/26 | | | 2,500,000 | | | | 3,169,200 | |
Series D 5.00% 8/1/27 | | | 1,500,000 | | | | 1,898,520 | |
Series E 5.00% 10/1/26 | | | 500,000 | | | | 636,945 | |
| | | | | | | | |
| | | | | | | 8,612,781 | |
| | | | | | | | |
Transportation Revenue Bonds — 5.59% | | | | | | | | |
Minneapolis – St. Paul Metropolitan Airports Commission Revenue | | | | | | | | |
(Subordinate) | | | | | | | | |
Series B 5.00% 1/1/26 | | | 710,000 | | | | 749,050 | |
Series B 5.00% 1/1/31 | | | 750,000 | | | | 788,580 | |
Series B 5.00% 1/1/44 (AMT) | | | 1,600,000 | | | | 1,917,904 | |
St. Paul Housing & Redevelopment Authority | | | | | | | | |
(Parking Enterprise) | | | | | | | | |
Series A 4.00% 8/1/26 | | | 450,000 | | | | 489,641 | |
Series A 4.00% 8/1/27 | | | 545,000 | | | | 589,815 | |
Series A 4.00% 8/1/28 | | | 350,000 | | | | 376,544 | |
| | | | | | | | |
| | | | | | | 4,911,534 | |
| | | | | | | | |
49
Schedules of investments
Delaware Tax-Free Minnesota Intermediate Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Water & Sewer Revenue Bonds — 2.32% | | | | | | | | |
Guam Government Waterworks Authority Water & Wastewater System Revenue | | | | | | | | |
5.00% 7/1/37 | | | 575,000 | | | $ | 672,181 | |
Metropolitan Council General Obligation | | | | | | | | |
Wastewater Revenue (Minneapolis – St. Paul Metropolitan Area) | | | | | | | | |
Series C 4.00% 3/1/31 | | | 565,000 | | | | 672,734 | |
Series C 4.00% 3/1/32 | | | 585,000 | | | | 692,172 | |
| | | | | | | | |
| | | | | | | 2,037,087 | |
| | | | | | | | |
Total Municipal Bonds (cost $81,960,600) | | | | | | | 85,612,346 | |
| | | | | | | | |
| | | | | | | |
| |
Short-Term Investments — 1.34% | | | | | | | | |
| |
Variable Rate Demand Notes — 1.34%¤ | | | | | | | | |
Minneapolis Health Care System Revenue | | | | | | | | |
(Fairview Health Services) Series C | | | | | | | | |
0.03% 11/15/48 (LOC – Wells Fargo Bank N.A.) | | | 500,000 | | | | 500,000 | |
Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Children’s Hospitals and Clinics) | | | | | | | | |
Series A 0.02% 9/4/20 (AGM) (SPA – US Bank N.A.) | | | 240,000 | | | | 240,000 | |
Series A 0.02% 8/15/37 (AGM) (SPA – US Bank N.A.) | | | 200,000 | | | | 200,000 | |
(Allina Health System) | | | | | | | | |
Series B-2 0.02% 11/15/35 (LOC - JPMorgan Chase Bank N.A.) | | | 240,000 | | | | 240,000 | |
| | | | | | | | |
Total Short-Term Investments (cost $1,180,000) | | | | | | | 1,180,000 | |
| | | | | | | | |
Total Value of Securities—98.87%
(cost $83,140,600) | | | | | | $ | 86,792,346 | |
| | | | | | | | |
| ° | Principal amount shown is stated in USD unless noted that the security is denominated in another currency. |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $1,445,447, which represents 1.65% of the Fund’s net assets. See Note 8 in “Notes to financial statements.” |
50
| ● | Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at August 31, 2020. 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. |
| § | Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 8 in “Notes to financial statements.” |
| ‡ | Non-income producing security. Security is currently in default. |
| ¤ | 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 August 31, 2020. |
Summary of abbreviations:
AGM – Insured by Assured Guaranty Municipal Corporation
AMT – Subject to Alternative Minimum Tax
ICE – Intercontinental Exchange, Inc.
LIBOR – London interbank offered rate
LIBOR03M – ICE LIBOR USD 3 Month
LIBOR06M – ICE LIBOR USD 6 Month
LLC – Limited Liability Corporation
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.
51
| | |
| Schedules of investments | | |
| Delaware Minnesota High-Yield Municipal Bond Fund | | August 31, 2020 |
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds — 97.87% | | | | | | | | |
| |
Corporate Revenue Bond — 1.32% | | | | | | | | |
St. Paul Port Authority Solid Waste Disposal Revenue | | | | | | | | |
(Gerdau St. Paul Steel Mill Project) | | | | | | | | |
Series 7 144A 4.50% 10/1/37 (AMT)# | | | 2,600,000 | | | $ | 2,619,110 | |
| | | | | | | | |
| | | | | | | 2,619,110 | |
| | | | | | | | |
Education Revenue Bonds — 21.48% | | | | | | | | |
Bethel Charter School Lease Revenue | | | | | | | | |
(Spectrum High School Project) | | | | | | | | |
Series A 4.00% 7/1/37 | | | 850,000 | | | | 871,429 | |
Brooklyn Park Charter School Lease Revenue | | | | | | | | |
(Prairie Seeds Academy Project) | | | | | | | | |
Series A 5.00% 3/1/39 | | | 1,270,000 | | | | 1,287,336 | |
Cologne Charter School Lease Revenue | | | | | | | | |
(Cologne Academy Project) | | | | | | | | |
Series A 5.00% 7/1/34 | | | 250,000 | | | | 263,505 | |
Series A 5.00% 7/1/45 | | | 230,000 | | | | 239,241 | |
Columbia Heights, Minnesota Charter School Lease Revenue | | | | | | | | |
(Prodeo Academy Project) | | | | | | | | |
Series A 5.00% 7/1/54 | | | 1,000,000 | | | | 1,016,350 | |
Deephaven Charter School Lease Revenue | | | | | | | | |
(Eagle Ridge Academy Project) | | | | | | | | |
Series A 5.50% 7/1/50 | | | 1,000,000 | | | | 1,083,500 | |
Duluth Housing & Redevelopment Authority Revenue | | | | | | | | |
(Duluth Public Schools Academy Project) | | | | | | | | |
Series A 5.00% 11/1/48 | | | 1,000,000 | | | | 1,056,880 | |
Forest Lake Charter School Lease Revenue Fund | | | | | | | | |
(Lakes International Language Academy) | | | | | | | | |
Series A 5.375% 8/1/50 | | | 660,000 | | | | 716,410 | |
Series A 5.75% 8/1/44 | | | 585,000 | | | | 618,521 | |
Ham Lake Charter School Lease Revenue | | | | | | | | |
(Davinci Academy Project) | | | | | | | | |
Series A 5.00% 7/1/36 | | | 235,000 | | | | 250,063 | |
Series A 5.00% 7/1/47 | | | 710,000 | | | | 746,182 | |
(Parnassus Preparatory School Project) | | | | | | | | |
Series A 5.00% 11/1/47 | | | 650,000 | | | | 685,529 | |
Hugo Charter School Lease Revenue | | | | | | | | |
(Noble Academy Project) | | | | | | | | |
Series A 5.00% 7/1/34 | | | 165,000 | | | | 171,869 | |
Series A 5.00% 7/1/44 | | | 495,000 | | | | 508,850 | |
52
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Education Revenue Bonds (continued) | | | | | | | | |
Minneapolis Charter School Lease Revenue | | | | | | | | |
(Hiawatha Academies Project) | | | | | | | | |
Series A 5.00% 7/1/36 | | | 1,000,000 | | | $ | 1,048,310 | |
Series A 5.00% 7/1/47 | | | 800,000 | | | | 828,976 | |
Minneapolis Student Housing Revenue | | | | | | | | |
(Riverton Community Housing Project) | | | | | | | | |
5.25% 8/1/39 | | | 800,000 | | | | 808,128 | |
144A 4.75% 8/1/43 # | | | 750,000 | | | | 738,645 | |
144A 5.00% 8/1/53 # | | | 570,000 | | | | 576,076 | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(Bethel University) | | | | | | | | |
5.00% 5/1/47 | | | 1,500,000 | | | | 1,601,730 | |
(Carleton College) | | | | | | | | |
4.00% 3/1/37 | | | 635,000 | | | | 729,285 | |
(Gustavus Adolphus College) | | | | | | | | |
5.00% 10/1/47 | | | 1,000,000 | | | | 1,126,670 | |
(Minneapolis College of Art & Design) | | | | | | | | |
4.00% 5/1/24 | | | 250,000 | | | | 261,945 | |
4.00% 5/1/25 | | | 200,000 | | | | 209,118 | |
4.00% 5/1/26 | | | 100,000 | | | | 104,285 | |
(St. Catherine University) | | | | | | | | |
Series A 4.00% 10/1/37 | | | 580,000 | | | | 613,588 | |
Series A 5.00% 10/1/45 | | | 670,000 | | | | 756,711 | |
(St. John’s University) | | | | | | | | |
Series 8-I 5.00% 10/1/34 | | | 215,000 | | | | 246,306 | |
(St. Olaf College) | | | | | | | | |
Series 8-G 5.00% 12/1/31 | | | 205,000 | | | | 241,307 | |
Series 8-G 5.00% 12/1/32 | | | 205,000 | | | | 240,289 | |
Series 8-N 4.00% 10/1/34 | | | 800,000 | | | | 892,456 | |
Series 8-N 4.00% 10/1/35 | | | 590,000 | | | | 656,104 | |
(Trustees of the Hamline University of Minnesota) | | | | | | | | |
Series B 5.00% 10/1/37 | | | 300,000 | | | | 323,742 | |
Series B 5.00% 10/1/39 | | | 770,000 | | | | 827,065 | |
(University of St. Thomas) | | | | | | | | |
4.00% 10/1/37 | | | 500,000 | | | | 563,555 | |
4.00% 10/1/41 | | | 1,000,000 | | | | 1,109,190 | |
4.00% 10/1/44 | | | 950,000 | | | | 1,046,282 | |
Series A 4.00% 10/1/35 | | | 400,000 | | | | 446,080 | |
Otsego Charter School Lease Revenue | | | | | | | | |
(Kaleidoscope Charter School) | | | | | | | | |
Series A 5.00% 9/1/44 | | | 1,435,000 | | | | 1,454,172 | |
53
Schedules of investments
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Education Revenue Bonds (continued) | | | | | | | | |
Rice County Educational Facilities Revenue | | | | | | | | |
(Shattuck-St. Mary’s School) | | | | | | | | |
Series A 144A 5.00% 8/1/22 # | | | 770,000 | | | $ | 787,772 | |
St. Cloud Charter School Lease Revenue | | | | | | | | |
(Stride Academy Project) | | | | | | | | |
Series A 5.00% 4/1/46 | | | 750,000 | | | | 510,000 | |
St. Paul Housing & Redevelopment Authority Charter School Lease Revenue | | | | | | | | |
(Academia Cesar Chavez School Project) | | | | | | | | |
Series A 5.25% 7/1/50 | | | 1,750,000 | | | | 1,734,232 | |
(Great River School Project) | | | | | | | | |
Series A 144A 5.50% 7/1/52 # | | | 265,000 | | | | 282,503 | |
(Hmong College Preparatory Academy Project) | | | | | | | | |
Series A 5.75% 9/1/46 | | | 500,000 | | | | 552,980 | |
Series A 6.00% 9/1/51 | | | 3,500,000 | | | | 3,907,505 | |
(Nova Classical Academy Project) | | | | | | | | |
Series A 4.00% 9/1/36 | | | 1,270,000 | | | | 1,337,539 | |
Series A 4.125% 9/1/47 | | | 500,000 | | | | 519,525 | |
(Twin Cities Academy Project) | | | | | | | | |
Series A 5.375% 7/1/50 | | | 1,500,000 | | | | 1,583,625 | |
University of Minnesota | | | | | | | | |
Series A 5.00% 4/1/34 | | | 2,115,000 | | | | 2,609,318 | |
Series A 5.00% 9/1/40 | | | 900,000 | | | | 1,104,273 | |
Series A 5.00% 9/1/41 | | | 620,000 | | | | 758,706 | |
| | | | | | | | |
| | | | | | | 42,653,658 | |
| | | | | | | | |
Electric Revenue Bonds — 5.93% | | | | | | | | |
Central Minnesota Municipal Power Agency | | | | | | | | |
(Brookings Twin Cities Transmission Project) | | | | | | | | |
5.00% 1/1/42 | | | 1,500,000 | | | | 1,586,205 | |
Hutchinson Utilities Commission Revenue | | | | | | | | |
Series A 5.00% 12/1/22 | | | 490,000 | | | | 542,121 | |
Series A 5.00% 12/1/26 | | | 360,000 | | | | 396,238 | |
Minnesota Municipal Power Agency Electric Revenue | | | | | | | | |
5.00% 10/1/27 | | | 165,000 | | | | 193,994 | |
5.00% 10/1/47 | | | 745,000 | | | | 896,876 | |
Series A 5.00% 10/1/28 | | | 500,000 | | | | 587,420 | |
Northern Municipal Power Agency Electric System Revenue | | | | | | | | |
5.00% 1/1/26 | | | 500,000 | | | | 614,160 | |
5.00% 1/1/28 | | | 500,000 | | | | 608,590 | |
5.00% 1/1/29 | | | 470,000 | | | | 569,066 | |
54
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Electric Revenue Bonds (continued) | | | | | | | | |
Northern Municipal Power Agency Electric System Revenue | | | | | | | | |
5.00% 1/1/33 | | | 225,000 | | | $ | 272,158 | |
5.00% 1/1/34 | | | 200,000 | | | | 241,124 | |
Series A 5.00% 1/1/24 | | | 335,000 | | | | 370,028 | |
Puerto Rico Electric Power Authority | | | | | | | | |
Series A 5.05% 7/1/42 ‡ | | | 165,000 | | | | 113,850 | |
Series AAA 5.25% 7/1/25 ‡ | | | 95,000 | | | | 65,669 | |
Series CCC 5.25% 7/1/27 ‡ | | | 650,000 | | | | 449,312 | |
Series WW 5.00% 7/1/28 ‡ | | | 585,000 | | | | 403,650 | |
Series XX 4.75% 7/1/26 ‡ | | | 105,000 | | | | 71,925 | |
Series XX 5.25% 7/1/40 ‡ | | | 295,000 | | | | 203,919 | |
Series XX 5.75% 7/1/36 ‡ | | | 370,000 | | | | 258,075 | |
Series ZZ 4.75% 7/1/27 ‡ | | | 85,000 | | | | 58,225 | |
Series ZZ 5.25% 7/1/24 ‡ | | | 130,000 | | | | 89,862 | |
Rochester Electric Utility Revenue | | | | | | | | |
Series A 5.00% 12/1/34 | | | 450,000 | | | | 551,830 | |
Series A 5.00% 12/1/35 | | | 500,000 | | | | 611,125 | |
Series A 5.00% 12/1/36 | | | 520,000 | | | | 633,823 | |
Southern Minnesota Municipal Power Agency Revenue | | | | | | | | |
Series A 5.00% 1/1/41 | | | 400,000 | | | | 474,688 | |
St. Paul Housing & Redevelopment Energy Revenue | | | | | | | | |
Series A 4.00% 10/1/32 | | | 800,000 | | | | 914,936 | |
| | | | | | | | |
| | | | | | | 11,778,869 | |
| | | | | | | | |
Healthcare Revenue Bonds — 34.14% | | | | | | | | |
Anoka Healthcare & Housing Facilities Revenue | | | | | | | | |
(The Homestead at Anoka Project) | | | | | | | | |
5.125% 11/1/49 | | | 400,000 | | | | 400,788 | |
Apple Valley Senior Housing Revenue | | | | | | | | |
(PHS Senior Housing, Inc. Orchard Path Project) | | | | | | | | |
4.50% 9/1/53 | | | 840,000 | | | | 844,477 | |
5.00% 9/1/43 | | | 535,000 | | | | 552,896 | |
5.00% 9/1/58 | | | 1,175,000 | | | | 1,204,727 | |
Apple Valley Senior Living Revenue | | | | | | | | |
(Senior Living LLC Project) | | | | | | | | |
2nd Tier Series B 5.00% 1/1/47 | | | 560,000 | | | | 371,666 | |
4th Tier Series D 7.00% 1/1/37 | | | 515,000 | | | | 409,508 | |
4th Tier Series D 7.25% 1/1/52 | | | 1,500,000 | | | | 1,135,725 | |
55
Schedules of investments
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | 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 | | | 1,280,000 | | | $ | 1,230,272 | |
Bethel Senior Housing Revenue | | | | | | | | |
(The Lodge at the Lakes at Stillwater Project) | | | | | | | | |
5.25% 6/1/58 | | | 1,475,000 | | | | 1,495,886 | |
Brooklyn Center Multifamily Housing Revenue | | | | | | | | |
(Sanctuary at Brooklyn Center Project) | | | | | | | | |
Series A 5.50% 11/1/35 | | | 645,000 | | | | 592,058 | |
Chatfield Healthcare and Housing Facilities Revenue | | | | | | | | |
(Chosen Valley Care Center Project) | | | | | | | | |
4.00% 9/1/39 | | | 250,000 | | | | 205,627 | |
5.00% 9/1/52 | | | 1,500,000 | | | | 1,368,810 | |
City of West St. Paul Minnesota | | | | | | | | |
(Walker Westwood Ridge Campus Project) | | | | | | | | |
5.00% 11/1/49 | | | 1,500,000 | | | | 1,500,570 | |
Cloquet Housing Facilities | | | | | | | | |
(HADC Cloquet Project) | | | | | | | | |
Series A 5.00% 8/1/48 | | | 850,000 | | | | 836,137 | |
Crookston Health Care Facilities Revenue | | | | | | | | |
(Riverview Health Project) | | | | | | | | |
5.00% 5/1/51 | | | 1,025,000 | | | | 992,795 | |
Dakota County Community Development Agency | | | | | | | | |
Senior Housing Revenue | | | | | | | | |
(Walker Highview Hills Project) | | | | | | | | |
Series A 144A 5.00% 8/1/51 # | | | 870,000 | | | | 896,700 | |
Deephaven Housing & Healthcare Revenue | | | | | | | | |
(St. Therese Senior Living Project) | | | | | | | | |
Series A 5.00% 4/1/38 | | | 335,000 | | | | 309,862 | |
Series A 5.00% 4/1/40 | | | 315,000 | | | | 287,784 | |
Series A 5.00% 4/1/48 | | | 185,000 | | | | 164,513 | |
Duluth Economic Development Authority | | | | | | | | |
(Essentia Health Obligated Group) | | | | | | | | |
Series A 4.25% 2/15/43 | | | 2,500,000 | | | | 2,745,200 | |
Series A 5.00% 2/15/48 | | | 1,590,000 | | | | 1,831,378 | |
(St. Luke’s Hospital of Duluth Obligated Group) | | | | | | | | |
5.75% 6/15/32 | | | 2,000,000 | | | | 2,118,480 | |
6.00% 6/15/39 | | | 1,000,000 | | | | 1,058,570 | |
Glencoe Health Care Facilities Revenue | | | | | | | | |
(Glencoe Regional Health Services Project) | | | | | | | | |
4.00% 4/1/31 | | | 185,000 | | | | 190,574 | |
56
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Hayward Health Care Facilities Revenue | | | | | | | | |
(American Baptist Homes Midwest Obligated Group) | | | | | | | | |
5.375% 8/1/34 | | | 750,000 | | | $ | 721,193 | |
(St. John’s Lutheran Home of Albert Lea Project) | | | | | | | | |
5.375% 10/1/44 | | | 165,000 | | | | 153,529 | |
Maple Grove Health Care Facilities Revenue | | | | | | | | |
(Maple Grove Hospital Corporation) | | | | | | | | |
4.00% 5/1/37 | | | 1,155,000 | | | | 1,236,277 | |
5.00% 5/1/26 | | | 1,300,000 | | | | 1,528,345 | |
5.00% 5/1/29 | | | 500,000 | | | | 589,385 | |
(North Memorial Health Care) | | | | | | | | |
5.00% 9/1/30 | | | 610,000 | | | | 693,332 | |
Maple Plain Senior Housing & Health Care Revenue | | | | | | | | |
(Haven Homes Incorporate Project) | | | | | | | | |
5.00% 7/1/49 | | | 1,000,000 | | | | 1,027,290 | |
Minneapolis Health Care System Revenue | | | | | | | | |
(Fairview Health Services) | | | | | | | | |
Series A 4.00% 11/15/48 | | | 1,000,000 | | | | 1,118,910 | |
Series A 5.00% 11/15/33 | | | 1,200,000 | | | | 1,393,764 | |
Series A 5.00% 11/15/34 | | | 500,000 | | | | 579,630 | |
Series A 5.00% 11/15/44 | | | 1,000,000 | | | | 1,137,730 | |
Series A 5.00% 11/15/49 | | | 1,450,000 | | | | 1,745,568 | |
Minneapolis Senior Housing & Healthcare Revenue | | | | | | | | |
(Ecumen-Abiitan Mill City Project) | | | | | | | | |
5.375% 11/1/50 | | | 1,700,000 | | | | 1,706,766 | |
Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Allina Health System) | | | | | | | | |
Series A 5.00% 11/15/29 | | | 415,000 | | | | 515,791 | |
Morris Health Care Facilities Revenue | | | | | | | | |
(Farmington Health Services) | | | | | | | | |
4.10% 8/1/44 | | | 500,000 | | | | 437,610 | |
4.20% 8/1/49 | | | 1,500,000 | | | | 1,292,895 | |
Oakdale Senior Housing | | | | | | | | |
(Oak Meadows Project) | | | | | | | | |
5.00% 4/1/34 | | | 500,000 | | | | 495,120 | |
Rochester Health Care & Housing Revenue | | | | | | | | |
(The Homestead at Rochester Project) | | | | | | | | |
Series A 5.25% 12/1/23 | | | 175,000 | | | | 184,259 | |
Rochester Health Care Facilities Revenue | | | | | | | | |
(Mayo Clinic) | | | | | | | | |
4.00% 11/15/41 | | | 1,790,000 | | | | 1,848,873 | |
57
Schedules of investments
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Healthcare Revenue Bonds (continued) | | | | | | | | |
Rochester Health Care Facilities Revenue | | | | | | | | |
(Olmsted Medical Center Project) | | | | | | | | |
5.00% 7/1/22 | | | 350,000 | | | $ | 377,657 | |
5.00% 7/1/27 | | | 245,000 | | | | 270,855 | |
5.00% 7/1/28 | | | 225,000 | | | | 247,743 | |
Rochester, Minnesota | | | | | | | | |
(The Homestead at Rochester Project) | | | | | | | | |
Series A 6.875% 12/1/48 | | | 800,000 | | | | 860,736 | |
Sartell Health Care Facilities Revenue | | | | | | | | |
(Country Manor Campus Project) | | | | | | | | |
Series A 5.25% 9/1/22 | | | 1,080,000 | | | | 1,105,456 | |
Sauk Rapids Health Care Housing Facilities Revenue | | | | | | | | |
(Good Shepherd Lutheran Home) | | | | | | | | |
5.125% 1/1/39 | | | 825,000 | | | | 813,846 | |
Shakopee Health Care Facilities Revenue | | | | | | | | |
(St. Francis Regional Medical Center) | | | | | | | | |
4.00% 9/1/31 | | | 130,000 | | | | 139,500 | |
5.00% 9/1/34 | | | 105,000 | | | | 115,858 | |
St. Cloud Health Care Revenue | | | | | | | | |
(Centracare Health System Project) | | | | | | | | |
4.00% 5/1/49 | | | 250,000 | | | | 278,963 | |
5.00% 5/1/48 | | | 3,900,000 | | | | 4,730,778 | |
Series A 4.00% 5/1/37 | | | 1,440,000 | | | | 1,580,256 | |
Series A 5.00% 5/1/46 | | | 2,000,000 | | | | 2,306,700 | |
Unrefunded Balance 5.125% 5/1/30 | | | 15,000 | | | | 15,046 | |
St. Joseph Senior Housing & Healthcare Revenue | | | | | | | | |
(Woodcrest Country Manor Project) | | | | | | | | |
5.00% 7/1/55 | | | 1,000,000 | | | | 955,530 | |
St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Fairview Health Services) | | | | | | | | |
Series A 4.00% 11/15/43 | | | 645,000 | | | | 717,092 | |
Series A 5.00% 11/15/47 | | | 485,000 | | | | 573,857 | |
(HealthPartners Obligated Group Project) | | | | | | | | |
Series A 4.00% 7/1/33 | | | 1,320,000 | | | | 1,442,826 | |
Series A 5.00% 7/1/29 | | | 1,000,000 | | | | 1,165,860 | |
Series A 5.00% 7/1/32 | | | 900,000 | | | | 1,035,108 | |
Series A 5.00% 7/1/33 | | | 1,540,000 | | | | 1,765,394 | |
St. Paul Housing & Redevelopment Authority Housing & Health Care Facilities Revenue | | | | | | | | |
(Episcopal Homes Project) | | | | | | | | |
5.125% 5/1/48 | | | 1,700,000 | | | | 1,580,201 | |
58
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Healthcare Revenue Bonds (continued) | | | | | | | | |
St. Paul Housing & Redevelopment Authority Housing & Health Care Facilities Revenue | | | | | | | | |
(Episcopal Homes Project) | | | | | | | | |
Series A 5.15% 11/1/42 | | | 775,000 | | | $ | 775,411 | |
St. Paul Housing & Redevelopment Authority Multifamily Housing Revenue | | | | | | | | |
(Marian Center Project) | | | | | | | | |
Series A 5.375% 5/1/43 | | | 1,000,000 | | | | 938,310 | |
Victoria Health Care Facilities Revenue | | | | | | | | |
(Augustana Emerald Care Project) | | | | | | | | |
5.00% 8/1/39 | | | 1,500,000 | | | | 1,501,665 | |
Wayzata Senior Housing Revenue | | | | | | | | |
(Folkestone Senior Living Community) | | | | | | | | |
4.00% 8/1/38 | | | 250,000 | | | | 250,515 | |
4.00% 8/1/39 | | | 400,000 | | | | 400,824 | |
4.00% 8/1/44 | | | 350,000 | | | | 348,922 | |
5.00% 8/1/54 | | | 350,000 | | | | 365,449 | |
| | | | | | | | |
| | | | | | | 67,811,628 | |
| | | | | | | | |
Housing Revenue Bonds — 1.62% | | | | | | | | |
Bethel Senior Housing Revenue | | | | | | | | |
(Birchwood Landing at the Lakes at Stillwater Project) | | | | | | | | |
5.00% 5/1/54 | | | 1,000,000 | | | | 1,023,690 | |
Minneapolis – St. Paul Housing Finance Board | | | | | | | | |
Single Family Mortgage-Backed Securities Program | | | | | | | | |
(City Living Project) | | | | | | | | |
Series A-2 5.00% 12/1/38 (GNMA) (FNMA) | | | | | | | | |
(FHLMC) (AMT) | | | 998 | | | | 999 | |
Minnesota Housing Finance Agency State Appropriation | | | | | | | | |
(Housing Infrastructure) | | | | | | | | |
Series C 5.00% 8/1/33 | | | 100,000 | | | | 115,307 | |
Northwest Multi-County Housing & Redevelopment Authority | | | | | | | | |
(Pooled Housing Program) | | | | | | | | |
5.50% 7/1/45 | | | 1,275,000 | | | | 1,316,756 | |
Stillwater Multifamily Housing Revenue | | | | | | | | |
(Orleans Homes Project) | | | | | | | | |
5.50% 2/1/42 (AMT) | | | 750,000 | | | | 750,405 | |
| | | | | | | | |
| | | | | | | 3,207,157 | |
| | | | | | | | |
59
Schedules of investments
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Lease Revenue Bonds — 2.34% | | | | | | | | |
Minnesota General Fund Revenue Appropriations | | | | | | | | |
Series A 5.00% 6/1/38 | | | 1,750,000 | | | $ | 1,924,860 | |
Series A 5.00% 6/1/43 | | | 1,000,000 | | | | 1,095,080 | |
Minnesota Housing Finance Agency State Appropriation | | | | | | | | |
(Housing Infrastructure) | | | | | | | | |
Series C 5.00% 8/1/32 | | | 1,415,000 | | | | 1,636,320 | |
| | | | | | | | |
| | | | | | | 4,656,260 | |
| | | | | | | | |
Local General Obligation Bonds — 6.71% | | | | | | | | |
Duluth General Obligation Entertainment Convention Center Improvement | | | | | | | | |
Series A 5.00% 2/1/34 | | | 1,000,000 | | | | 1,211,590 | |
Duluth Independent School District No. 709 | | | | | | | | |
Series A 4.00% 2/1/27 | | | 440,000 | | | | 507,624 | |
Series A 4.20% 3/1/34 | | | 750,000 | | | | 723,742 | |
Hennepin County | | | | | | | | |
Series A 5.00% 12/1/37 | | | 910,000 | | | | 1,150,177 | |
Series C 5.00% 12/1/37 | | | 2,500,000 | | | | 3,108,225 | |
Mahtomedi Independent School District No. 832 | | | | | | | | |
(School Building) | | | | | | | | |
Series A 5.00% 2/1/28 | | | 1,000,000 | | | | 1,200,220 | |
Series A 5.00% 2/1/29 | | | 1,000,000 | | | | 1,198,760 | |
Series A 5.00% 2/1/31 | | | 1,000,000 | | | | 1,194,890 | |
Minneapolis Special School District No. 1 | | | | | | | | |
Series A 4.00% 2/1/36 | | | 160,000 | | | | 191,496 | |
Series A 4.00% 2/1/37 | | | 215,000 | | | | 256,359 | |
Series A 4.00% 2/1/38 | | | 220,000 | | | | 261,503 | |
Series B 4.00% 2/1/36 | | | 335,000 | | | | 400,945 | |
Series B 4.00% 2/1/37 | | | 445,000 | | | | 530,605 | |
Series B 4.00% 2/1/38 | | | 465,000 | | | | 552,722 | |
Wayzata Independent School District No. 284 | | | | | | | | |
(School Building) | | | | | | | | |
Series A 5.00% 2/1/28 | | | 650,000 | | | | 830,895 | |
| | | | | | | | |
| | | | | | | 13,319,753 | |
| | | | | | | | |
Pre-Refunded/Escrowed to Maturity Bonds — 4.40% | | | | | | | | |
Deephaven Charter School Lease Revenue | | | | | | | | |
(Eagle Ridge Academy Project) | | | | | | | | |
Series A 5.50% 7/1/43-23 § | | | 500,000 | | | | 571,545 | |
Minnesota | | | | | | | | |
Series A Unrefunded Balance 5.00% 10/1/24-21 § | | | 985,000 | | | | 1,036,338 | |
60
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
Pre-Refunded/Escrowed to Maturity Bonds (continued) | | | | | | | | |
Minnesota Higher Education Facilities Authority Revenue | | | | | | | | |
(St. Catherine University) | | | | | | | | |
Series 7-Q 5.00% 10/1/25-22 § | | | 325,000 | | | $ | 357,016 | |
Series 7-Q 5.00% 10/1/26-22 § | | | 280,000 | | | | 307,583 | |
St. Paul Housing & Redevelopment Authority Charter School Lease Revenue | | | | | | | | |
(Nova Classical Academy Project) | | | | | | | | |
Series A 6.625% 9/1/42-21 § | | | 1,500,000 | | | | 1,594,080 | |
St. Paul Housing & Redevelopment Authority Hospital Facility Revenue | | | | | | | | |
(Healtheast Care System Project) | | | | | | | | |
Series A 5.00% 11/15/29-25 § | | | 275,000 | | | | 340,389 | |
Series A 5.00% 11/15/30-25 § | | | 205,000 | | | | 253,745 | |
Western Minnesota Municipal Power Agency Revenue | | | | | | | | |
Series A 5.00% 1/1/30-24 § | | | 500,000 | | | | 578,180 | |
Series A 5.00% 1/1/33-24 § | | | 750,000 | | | | 867,270 | |
Series A 5.00% 1/1/34-24 § | | | 450,000 | | | | 520,362 | |
Series A 5.00% 1/1/40-24 § | | | 2,000,000 | | | | 2,312,720 | |
| | | | | | | | |
| | | | | | | 8,739,228 | |
| | | | | | | | |
Special Tax Revenue Bonds — 5.25% | | | | | | | | |
Minneapolis Revenue | | | | | | | | |
(YMCA Greater Twin Cities Project) | | | | | | | | |
4.00% 6/1/31 | | | 250,000 | | | | 268,632 | |
Minneapolis Tax Increment Revenue | | | | | | | | |
(Grant Park Project) | | | | | | | | |
4.00% 3/1/27 | | | 200,000 | | | | 203,572 | |
4.00% 3/1/30 | | | 260,000 | | | | 262,902 | |
(Village of St. Anthony Falls Project) | | | | | | | | |
4.00% 3/1/24 | | | 700,000 | | | | 711,991 | |
4.00% 3/1/27 | | | 650,000 | | | | 658,021 | |
Puerto Rico Sales Tax Financing Revenue | | | | | | | | |
(Restructured) | | | | | | | | |
Series A-1 4.75% 7/1/53 | | | 4,005,000 | | | | 4,209,415 | |
Series A-1 5.00% 7/1/58 | | | 275,000 | | | | 293,618 | |
Series A-2 4.536% 7/1/53 | | | 3,000,000 | | | | 3,110,310 | |
St. Paul Sales Tax Revenue | | | | | | | | |
Series G 5.00% 11/1/28 | | | 600,000 | | | | 707,652 | |
| | | | | | | | |
| | | | | | | 10,426,113 | |
| | | | | | | | |
61
Schedules of investments
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Principal amount° | | | Value (US $) | |
| |
Municipal Bonds (continued) | | | | | | | | |
| |
State General Obligation Bonds — 7.00% | | | | | | | | |
Commonwealth of Puerto Rico | | | | | | | | |
(Public Improvement) | | | | | | | | |
Series B 5.75% 7/1/38 ‡ | | | 920,000 | | | $ | 652,050 | |
Minnesota | | | | | | | | |
Series A 5.00% 8/1/27 | | | 750,000 | | | | 918,675 | |
Series A 5.00% 8/1/29 | | | 1,000,000 | | | | 1,219,450 | |
Series A 5.00% 8/1/33 | | | 660,000 | | | | 857,096 | |
Series A 5.00% 8/1/34 | | | 2,185,000 | | | | 2,830,012 | |
Series D 5.00% 8/1/26 | | | 1,000,000 | | | | 1,267,680 | |
Series D 5.00% 8/1/27 | | | 1,000,000 | | | | 1,265,680 | |
Series E 5.00% 10/1/26 | | | 1,085,000 | | | | 1,382,170 | |
(Various Purposes) | | | | | | | | |
Series A 5.00% 8/1/32 | | | 1,915,000 | | | | 2,239,497 | |
Series A 5.00% 8/1/38 | | | 1,000,000 | | | | 1,277,780 | |
| | | | | | | | |
| | | | | | | 13,910,090 | |
| | | | | | | | |
Transportation Revenue Bonds — 6.51% | | | | | | | | |
Minneapolis – St. Paul Metropolitan Airports Commission Revenue | | | | | | | | |
(Senior) | | | | | | | | |
Series A 5.00% 1/1/32 | | | 1,245,000 | | | | 1,509,948 | |
Series C 5.00% 1/1/46 | | | 185,000 | | | | 216,927 | |
(Subordinate) | | | | | | | | |
Series A 5.00% 1/1/32 | | | 500,000 | | | | 559,680 | |
Series A 5.00% 1/1/49 | | | 1,500,000 | | | | 1,811,685 | |
Series B 5.00% 1/1/29 | | | 2,130,000 | | | | 2,243,359 | |
Series B 5.00% 1/1/44 (AMT) | | | 4,000,000 | | | | 4,794,760 | |
Series B 5.00% 1/1/49 (AMT) | | | 1,500,000 | | | | 1,786,665 | |
| | | | | | | | |
| | | | | | | 12,923,024 | |
| | | | | | | | |
Water & Sewer Revenue Bonds — 1.17% | | | | | | | | |
Metropolitan Council General Obligation Wastewater Revenue (Minneapolis – St. Paul Metropolitan Area) | | | | | | | | |
Series C 4.00% 3/1/31 | | | 965,000 | | | | 1,149,006 | |
Series C 4.00% 3/1/32 | | | 1,000,000 | | | | 1,183,200 | |
| | | | | | | | |
| | | | | | | 2,332,206 | |
| | | | | | | | |
Total Municipal Bonds (cost $187,836,551) | | | | | | | 194,377,096 | |
| | | | | | | | |
62
| | | | | | | | |
| | | Principal amount | | | Value (US $) | |
| |
Short-Term Investments — 0.70% | | | | | | | | |
| |
Variable Rate Demand Notes — 0.70%¤ | | | | | | | | |
Minneapolis Health Care System Revenue | | | | | | | | |
(Fairview Health Services) Series C | | | | | | | | |
0.03% 11/15/48 (LOC – Wells Fargo Bank N.A.) | | | 200,000 | | | $ | 200,000 | |
Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue | | | | | | | | |
(Children’s Hospitals and Clinics) | | | | | | | | |
Series A-1 0.02% 8/15/37 (AGM) (SPA – US Bank N.A.) | | | 1,100,000 | | | | 1,100,000 | |
Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Revenue | | | | | | | | |
(Allina Health System) | | | | | | | | |
Series B-1 0.02% 11/15/35 (LOC – JPMorgan Chase Bank N.A.) | | | 100,000 | | | | 100,000 | |
| | | | | | | | |
Total Short-Term Investments (cost $1,400,000) | | | | | | | 1,400,000 | |
| | | | | | | | |
Total Value of Securities—98.57%
(cost $189,236,551) | | | | | | $ | 195,777,096 | |
| | | | | | | | |
| ° | Principal amount shown is stated in USD unless noted that the security is denominated in another currency. |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $5,900,806, which represents 2.97% of the Fund’s net assets. See Note 8 in “Notes to financial statements.” |
| ‡ | Non-income producing security. Security is currently in default. |
| § | Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 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 August 31, 2020. |
Summary of abbreviations:
AGM – Insured by Assured Guaranty Municipal Corporation
AMT – Subject to Alternative Minimum Tax
FHLMC – Federal Home Loan Mortgage Corporation
FNMA – Federal National Mortgage Association
GNMA – Government National Mortgage Association
LLC – Limited Liability Corporation
LOC – Letter of Credit
63
Schedules of investments
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.
64
| | |
| Statements of assets and liabilities | | August 31, 2020 |
| | | | | | | | | | | | |
| | | Delaware Tax-Free Minnesota Fund | | | Delaware Tax-Free Minnesota Intermediate Fund | | | Delaware Minnesota High-Yield Municipal Bond Fund | |
Assets: | | | | | | | | | | | | |
Investments, at value* | | $ | 573,899,257 | | | $ | 86,792,346 | | | $ | 195,777,096 | |
Cash | | | 153,994 | | | | 31,761 | | | | 836,801 | |
Interest receivable | | | 6,736,350 | | | | 924,630 | | | | 2,236,011 | |
Receivable for fund shares sold | | | 350,286 | | | | 150,250 | | | | 240,053 | |
| | | | | | | | | | | | |
Total Assets | | | 581,139,887 | | | | 87,898,987 | | | | 199,089,961 | |
| | | | | | | | | | | | |
Liabilities: | | | | | | | | | | | | |
Distribution payable | | | 311,554 | | | | 40,160 | | | | 116,406 | |
Investment management fees payable to affiliates | | | 235,628 | | | | 16,964 | | | | 82,889 | |
Payable for fund shares redeemed | | | 215,387 | | | | 4,000 | | | | 173,653 | |
Distribution fees payable to affiliates | | | 100,988 | | | | 11,839 | | | | 38,595 | |
Dividend disbursing and transfer agent fees and expenses payable to non-affiliates | | | 32,531 | | | | 5,877 | | | | 13,733 | |
Accounting and administration fees payable to non-affiliates | | | 31,250 | | | | 15,014 | | | | 18,664 | |
Reports and statements to shareholders expenses payable to affiliates | | | 24,864 | | | | 6,799 | | | | 10,546 | |
Other accrued expenses | | | 18,368 | | | | 5,658 | | | | 11,607 | |
Audit and tax fees payable | | | 5,500 | | | | 5,500 | | | | 5,500 | |
Dividend disbursing and transfer agent fees and expenses payable to affiliates | | | 4,566 | | | | 691 | | | | 1,560 | |
Trustees’ fees and expenses payable to affiliates | | | 4,248 | | | | 644 | | | | 1,453 | |
Accounting and administration expenses payable to affiliates | | | 2,019 | | | | 593 | | | | 913 | |
Legal fees payable to affiliates | | | 1,018 | | | | 154 | | | | 348 | |
| | | | | | | | | | | | |
Total Liabilities | | | 987,921 | | | | 113,893 | | | | 475,867 | |
| | | | | | | | | | | | |
Total Net Assets | | $ | 580,151,966 | | | $ | 87,785,094 | | | $ | 198,614,094 | |
| | | | | | | | | | | | |
| | | |
Net Assets Consist of: | | | | | | | | | | | | |
Paid-in capital | | $ | 554,460,569 | | | $ | 84,302,908 | | | $ | 192,917,782 | |
Total distributable earnings (loss) | | | 25,691,397 | | | | 3,482,186 | | | | 5,696,312 | |
| | | | | | | | | | | | |
Total Net Assets | | $ | 580,151,966 | | | $ | 87,785,094 | | | $ | 198,614,094 | |
| | | | | | | | | | | | |
65
Statements of assets and liabilities
| | | | | | | | | | | | |
| | | 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 | | $ | 373,691,067 | | | $ | 57,787,863 | | | $ | 103,912,819 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | | | 29,913,945 | | | | 5,206,013 | | | | 9,447,144 | |
Net asset value per share | | $ | 12.49 | | | $ | 11.10 | | | $ | 11.00 | |
Sales charge | | | 4.50 | % | | | 2.75 | % | | | 4.50 | % |
Offering price per share, equal to net asset value per share / (1 - sales charge) | | $ | 13.08 | | | $ | 11.41 | | | $ | 11.52 | |
Class C: | | | | | | | | | | | | |
Net assets | | $ | 25,218,994 | | | $ | 5,148,739 | | | $ | 19,376,304 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | | | 2,012,202 | | | | 462,912 | | | | 1,758,179 | |
Net asset value per share | | $ | 12.53 | | | $ | 11.12 | | | $ | 11.02 | |
Institutional Class: | | | | | | | | | | | | |
Net assets | | $ | 181,241,905 | | | $ | 24,848,492 | | | $ | 75,324,971 | |
Shares of beneficial interest outstanding, unlimited authorization, no par | | | 14,511,385 | | | | 2,237,750 | | | | 6,850,315 | |
Net asset value per share | | $ | 12.49 | | | $ | 11.10 | | | $ | 11.00 | |
*Investments, at cost | | $ | 547,388,413 | | | $ | 83,140,600 | | | $ | 189,236,551 | |
See accompanying notes, which are an integral part of the financial statements.
66
| | |
| Statements of operations | | Year ended August 31, 2020 |
| | | | | | | | | | | | |
| | | | | | | | | Delaware Minnesota | |
| | | | | | Delaware Tax-Free | | | High-Yield | |
| | | Delaware Tax-Free | | | Minnesota | | | Municipal Bond | |
| | | Minnesota Fund | | | Intermediate Fund | | | Fund | |
Investment Income: | | | | | | | | | | | | |
Interest | | $ | 19,581,428 | | | $ | 2,549,862 | | | $ | 7,302,458 | |
| | | |
Expenses: | | | | | | | | | | | | |
Management fees | | | 3,148,707 | | | | 410,716 | | | | 1,123,132 | |
Distribution expenses - Class A | | | 937,862 | | | | 140,355 | | | | 258,349 | |
Distribution expenses - Class C | | | 276,689 | | | | 63,142 | | | | 203,799 | |
Dividend disbursing and transfer agent fees and expenses | | | 346,297 | | | | 52,347 | | | | 140,085 | |
Accounting and administration expenses | | | 134,934 | | | | 52,630 | | | | 72,789 | |
Registration fees | | | 61,479 | | | | 26,476 | | | | 14,214 | |
Legal fees | | | 51,193 | | | | 7,227 | | | | 16,361 | |
Reports and statements to shareholders expenses | | | 51,011 | | | | 12,647 | | | | 20,458 | |
Audit and tax fees | | | 45,140 | | | | 45,140 | | | | 45,140 | |
Trustees’ fees and expenses | | | 33,434 | | | | 4,744 | | | | 11,765 | |
Custodian fees | | | 14,704 | | | | 1,681 | | | | 3,934 | |
Other | | | 55,037 | | | | 20,920 | | | | 34,205 | |
| | | | | | | | | | | | |
| | | 5,156,487 | | | | 838,025 | | | | 1,944,231 | |
Less expenses waived | | | (458,373 | ) | | | (173,534 | ) | | | (172,639 | ) |
Less waived distribution expenses - Class A | | | — | | | | (56,142 | ) | | | — | |
Less expenses paid indirectly | | | (4,158 | ) | | | (1,086 | ) | | | (2,400 | ) |
| | | | | | | | | | | | |
Total operating expenses | | | 4,693,956 | | | | 607,263 | | | | 1,769,192 | |
| | | | | | | | | | | | |
Net Investment Income | | | 14,887,472 | | | | 1,942,599 | | | | 5,533,266 | |
| | | | | | | | | | | | |
67
Statements of operations
| | | | | | | | | | | | |
| | | Delaware Tax-Free Minnesota Fund | | | Delaware Tax-Free Minnesota Intermediate Fund | | | Delaware Minnesota High-Yield Municipal Bond Fund | |
Net Realized and Unrealized Gain (Loss): | | | | | | | | | | | | |
Net realized gain (loss) on investments | | $ | 932,823 | | | $ | (68,890 | ) | | $ | 180,719 | |
Net change in unrealized appreciation (depreciation) of investments | | | (8,816,749 | ) | | | (916,519 | ) | | | (4,939,126 | ) |
| | | | | | | | | | | | |
Net Realized and Unrealized Loss | | | (7,883,926 | ) | | | (985,409 | ) | | | (4,758,407 | ) |
| | | | | | | | | | | | |
Net Increase in Net Assets Resulting from Operations | | $ | 7,003,546 | | | $ | 957,190 | | | $ | 774,859 | |
| | | | | | | | | | | | |
See accompanying notes, which are an integral part of the financial statements.
68
Statements of changes in net assets
Delaware Tax-Free Minnesota Fund
| | | | | | | | |
| | | Year ended | |
| | | 8/31/20 | | | 8/31/19 | |
Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
Net investment income | | $ | 14,887,472 | | | $ | 16,250,461 | |
Net realized gain | | | 932,823 | | | | 422,779 | |
Net change in unrealized appreciation (depreciation) | | | (8,816,749 | ) | | | 23,896,388 | |
| | | | | | | | |
| | |
Net increase in net assets resulting from operations | | | 7,003,546 | | | | 40,569,628 | |
| | | | | | | | |
| | |
Dividends and Distributions to Shareholders from: | | | | | | | | |
Distributable earnings: | | | | | | | | |
Class A | | | (10,479,934 | ) | | | (11,013,173 | ) |
Class C | | | (567,741 | ) | | | (674,498 | ) |
Institutional Class | | | (5,376,871 | ) | | | (4,532,590 | ) |
| | | | | | | | |
| | |
| | | (16,424,546 | ) | | | (16,220,261 | ) |
| | | | | | | | |
| | |
Capital Share Transactions: | | | | | | | | |
Proceeds from shares sold: | | | | | | | | |
Class A | | | 30,564,638 | | | | 34,266,180 | |
Class C | | | 2,044,174 | | | | 3,098,448 | |
Institutional Class | | | 49,162,276 | | | | 83,152,024 | |
| | |
Net asset value of shares issued upon reinvestment of dividends and distributions: | | | | | | | | |
Class A | | | 9,360,817 | | | | 9,748,901 | |
Class C | | | 554,458 | | | | 653,678 | |
Institutional Class | | | 3,892,433 | | | | 3,221,296 | |
| | | | | | | | |
| | |
| | | 95,578,796 | | | | 134,140,527 | |
| | | | | | | | |
69
Statements of changes in net assets
Delaware Tax-Free Minnesota Fund
| | | | | | | | |
| | | Year ended | |
| | | 8/31/20 | | | 8/31/19 | |
Capital Share Transactions (continued): | | | | | | | | |
Cost of shares redeemed: | | | | | | | | |
Class A | | $ | (47,198,375 | ) | | $ | (63,834,709 | ) |
Class C | | | (6,825,961 | ) | | | (10,695,643 | ) |
Institutional Class | | | (37,945,871 | ) | | | (44,007,882 | ) |
| | | | | | | | |
| | |
| | | (91,970,207 | ) | | | (118,538,234 | ) |
| | | | | | | | |
| | |
Increase in net assets derived from capital share transactions | | | 3,608,589 | | | | 15,602,293 | |
| | | | | | | | |
Net Increase (Decrease) in Net Assets | | | (5,812,411 | ) | | | 39,951,660 | |
| | |
Net Assets: | | | | | | | | |
Beginning of year | | | 585,964,377 | | | | 546,012,717 | |
| | | | | | | | |
| | |
End of year | | $ | 580,151,966 | | | $ | 585,964,377 | |
| | | | | | | | |
See accompanying notes, which are an integral part of the financial statements.
70
Statements of changes in net assets
Delaware Tax-Free Minnesota Intermediate Fund
| | | | | | | | |
| | | Year ended | |
| | | 8/31/20 | | | 8/31/19 | |
Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
Net investment income | | $ | 1,942,599 | | | $ | 2,179,205 | |
Net realized gain (loss) | | | (68,890 | ) | | | 5,373 | |
Net change in unrealized appreciation (depreciation) | | | (916,519 | ) | | | 2,996,731 | |
| | | | | | | | |
| | |
Net increase in net assets resulting from operations | | | 957,190 | | | | 5,181,309 | |
| | | | | | | | |
| | |
Dividends and Distributions to Shareholders from: | | | | | | | | |
Distributable earnings: | | | | | | | | |
Class A | | | (1,346,270 | ) | | | (1,593,527 | ) |
Class C | | | (98,584 | ) | | | (156,332 | ) |
Institutional Class | | | (497,364 | ) | | | (428,375 | ) |
| | | | | | | | |
| | |
| | | (1,942,218 | ) | | | (2,178,234 | ) |
| | | | | | | | |
| | |
Capital Share Transactions: | | | | | | | | |
Proceeds from shares sold: | | | | | | | | |
Class A | | | 8,419,718 | | | | 5,671,277 | |
Class C | | | 635,657 | | | | 898,626 | |
Institutional Class | | | 11,917,665 | | | | 8,405,771 | |
| | |
Net asset value of shares issued upon reinvestment of dividends and distributions: | | | | | | | | |
Class A | | | 1,146,384 | | | | 1,357,246 | |
Class C | | | 94,088 | | | | 149,449 | |
Institutional Class | | | 463,348 | | | | 397,172 | |
| | | | | | | | |
| | |
| | | 22,676,860 | | | | 16,879,541 | |
| | | | | | | | |
71
Statements of changes in net assets
Delaware Tax-Free Minnesota Intermediate Fund
| | | | | | | | |
| | | Year ended | |
| | | 8/31/20 | | | 8/31/19 | |
Capital Share Transactions (continued): | | | | | | | | |
Cost of shares redeemed: | | | | | | | | |
Class A | | $ | (6,850,828 | ) | | $ | (12,485,742 | ) |
Class C | | | (2,655,009 | ) | | | (2,719,349 | ) |
Institutional Class | | | (5,203,976 | ) | | | (3,186,459 | ) |
| | | | | | | | |
| | |
| | | (14,709,813 | ) | | | (18,391,550 | ) |
| | | | | | | | |
| | |
Increase (decrease) in net assets derived from capital share transactions | | | 7,967,047 | | | | (1,512,009 | ) |
| | | | | | | | |
Net Increase in Net Assets | | | 6,982,019 | | | | 1,491,066 | |
| | |
Net Assets: | | | | | | | | |
Beginning of year | | | 80,803,075 | | | | 79,312,009 | |
| | | | | | | | |
| | |
End of year | | $ | 87,785,094 | | | $ | 80,803,075 | |
| | | | | | | | |
See accompanying notes, which are an integral part of the financial statements.
72
Statements of changes in net assets
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Year ended | |
| | | 8/31/20 | | | 8/31/19 | |
Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
Net investment income | | $ | 5,533,266 | | | $ | 5,310,882 | |
Net realized gain (loss) | | | 180,719 | | | | (149,752 | ) |
Net change in unrealized appreciation (depreciation) | | | (4,939,126 | ) | | | 9,364,456 | |
| | | | | | | | |
| | |
Net increase in net assets resulting from operations | | | 774,859 | | | | 14,525,586 | |
| | | | | | | | |
| | |
Dividends and Distributions to Shareholders from: | | | | | | | | |
Distributable earnings: | | | | | | | | |
Class A | | | (2,770,295 | ) | | | (2,884,919 | ) |
Class C | | | (393,155 | ) | | | (452,855 | ) |
Institutional Class | | | (2,354,836 | ) | | | (1,963,896 | ) |
| | | | | | | | |
| | |
| | | (5,518,286 | ) | | | (5,301,670 | ) |
| | | | | | | | |
| | |
Capital Share Transactions: | | | | | | | | |
Proceeds from shares sold: | | | | | | | | |
Class A | | | 12,533,954 | | | | 11,808,073 | |
Class C | | | 3,689,377 | | | | 3,143,949 | |
Institutional Class | | | 28,268,095 | | | | 31,389,740 | |
| | |
Net asset value of shares issued upon reinvestment of dividends and distributions: | | | | | | | | |
Class A | | | 2,475,879 | | | | 2,586,210 | |
Class C | | | 369,511 | | | | 420,887 | |
Institutional Class | | | 2,262,483 | | | | 1,877,843 | |
| | | | | | | | |
| | |
| | | 49,599,299 | | | | 51,226,702 | |
| | | | | | | | |
73
Statements of changes in net assets
Delaware Minnesota High-Yield Municipal Bond Fund
| | | | | | | | |
| | | Year ended | |
| | | 8/31/20 | | | 8/31/19 | |
Capital Share Transactions (continued): | | | | | | | | |
Cost of shares redeemed: | | | | | | | | |
Class A | | $ | (12,513,039 | ) | | $ | (14,747,115 | ) |
Class C | | | (5,297,308 | ) | | | (5,154,694 | ) |
Institutional Class | | | (28,132,087 | ) | | | (14,980,335 | ) |
| | | | | | | | |
| | |
| | | (45,942,434 | ) | | | (34,882,144 | ) |
| | | | | | | | |
| | |
Increase in net assets derived from capital share transactions | | | 3,656,865 | | | | 16,344,558 | |
| | | | | | | | |
Net Increase (Decrease) in Net Assets | | | (1,086,562 | ) | | | 25,568,474 | |
| | |
Net Assets: | | | | | | | | |
Beginning of year | | | 199,700,656 | | | | 174,132,182 | |
| | | | | | | | |
| | |
End of year | | $ | 198,614,094 | | | $ | 199,700,656 | |
| | | | | | | | |
See accompanying notes, which are an integral part of the financial statements.
74
This page intentionally left blank.
Financial highlights
Delaware Tax-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.
76
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | | |
| | | 8/31/20 | | | | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | |
| |
| | $ | 12.68 | | | | | $ | 12.14 | | | | | $ | 12.54 | | | | | $ | 12.87 | | | | | $ | 12.60 | |
| | | | | | | | | |
| | | 0.31 | | | | | | 0.36 | | | | | | 0.37 | | | | | | 0.38 | | | | | | 0.41 | |
| | | (0.16 | ) | | | | | 0.54 | | | | | | (0.34 | ) | | | | | (0.32 | ) | | | | | 0.28 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.15 | | | | | | 0.90 | | | | | | 0.03 | | | | | | 0.06 | | | | | | 0.69 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | (0.31 | ) | | | | | (0.36 | ) | | | | | (0.37 | ) | | | | | (0.39 | ) | | | | | (0.42 | ) |
| | | (0.03 | ) | | | | | — | | | | | | (0.06 | ) | | | | | — | | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.34 | ) | | | | | (0.36 | ) | | | | | (0.43 | ) | | | | | (0.39 | ) | | | | | (0.42 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 12.49 | | | | | $ | 12.68 | | | | | $ | 12.14 | | | | | $ | 12.54 | | | | | $ | 12.87 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 1.30% | | | | | | 7.54% | | | | | | 0.26% | | | | | | 0.49% | | | | | | 5.52% | |
| | | | | | | | | |
| | $ | 373,691 | | | | | $ | 386,790 | | | | | $ | 390,477 | | | | | $ | 423,497 | | | | | $ | 481,066 | |
| | | 0.85% | | | | | | 0.85% | | | | | | 0.85% | | | | | | 0.85% | | | | | | 0.85% | |
| | | | | | | | | |
| | | 0.93% | | | | | | 0.93% | | | | | | 0.94% | | | | | | 0.95% | | | | | | 0.95% | |
| | | 2.53% | | | | | | 2.92% | | | | | | 2.99% | | | | | | 3.08% | | | | | | 3.25% | |
| | | | | | | | | |
| | | 2.45% | | | | | | 2.84% | | | | | | 2.90% | | | | | | 2.98% | | | | | | 3.15% | |
| | | 15% | | | | | | 13% | | | | | | 16% | | | | | | 17% | | | | | | 15% | |
|
| |
77
Financial highlights
Delaware Tax-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.
78
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | | |
| | | 8/31/20 | | | | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | |
| |
| | $ | 12.72 | | | | | $ | 12.18 | | | | | $ | 12.58 | | | | | $ | 12.91 | | | | | $ | 12.64 | |
| | | | | | | | | |
| | | 0.22 | | | | | | 0.27 | | | | | | 0.28 | | | | | | 0.29 | | | | | | 0.32 | |
| | | (0.16 | ) | | | | | 0.54 | | | | | | (0.34 | ) | | | | | (0.33 | ) | | | | | 0.27 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.06 | | | | | | 0.81 | | | | | | (0.06 | ) | | | | | (0.04 | ) | | | | | 0.59 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | (0.22 | ) | | | | | (0.27 | ) | | | | | (0.28 | ) | | | | | (0.29 | ) | | | | | (0.32 | ) |
| | | (0.03 | ) | | | | | — | | | | | | (0.06 | ) | | | | | — | | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.25 | ) | | | | | (0.27 | ) | | | | | (0.34 | ) | | | | | (0.29 | ) | | | | | (0.32 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 12.53 | | | | | $ | 12.72 | | | | | $ | 12.18 | | | | | $ | 12.58 | | | | | $ | 12.91 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 0.54% | | | | | | 6.73% | | | | | | (0.49% | ) | | | | | (0.25% | ) | | | | | 4.73% | |
| | | | | | | | | |
| | $ | 25,219 | | | | | $ | 29,933 | | | | | $ | 35,642 | | | | | $ | 51,045 | | | | | $ | 53,502 | |
| | | 1.60% | | | | | | 1.60% | | | | | | 1.60% | | | | | | 1.60% | | | | | | 1.60% | |
| | | | | | | | | |
| | | 1.68% | | | | | | 1.68% | | | | | | 1.69% | | | | | | 1.70% | | | | | | 1.70% | |
| | | 1.78% | | | | | | 2.17% | | | | | | 2.24% | | | | | | 2.33% | | | | | | 2.50% | |
| | | | | | | | | |
| | | 1.70% | | | | | | 2.09% | | | | | | 2.15% | | | | | | 2.23% | | | | | | 2.40% | |
| | | 15% | | | | | | 13% | | | | | | 16% | | | | | | 17% | | | | | | 15% | |
|
| |
79
Financial highlights
Delaware Tax-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.
80
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | Year ended | | | | | | | | | | | | | |
| | | | |
| | | 8/31/20 | | | | | | 8/31/19 | | | | | | 8/31/18 | | | | | | 8/31/17 | | | | | | 8/31/16 | |
| |
| | $ | 12.68 | | | | | | | $ | 12.14 | | | | | | | $ | 12.54 | | | | | | | $ | 12.87 | | | | | | | $ | 12.59 | |
| | | | | | | | | |
| | | 0.34 | | | | | | | | 0.39 | | | | | | | | 0.40 | | | | | | | | 0.41 | | | | | | | | 0.45 | |
| | | (0.16 | ) | | | | | | | 0.54 | | | | | | | | (0.34 | ) | | | | | | | (0.32 | ) | | | | | | | 0.28 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.18 | | | | | | | | 0.93 | | | | | | | | 0.06 | | | | | | | | 0.09 | | | | | | | | 0.73 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | (0.34 | ) | | | | | | | (0.39 | ) | | | | | | | (0.40 | ) | | | | | | | (0.42 | ) | | | | | | | (0.45 | ) |
| | | (0.03 | ) | | | | | | | — | | | | | | | | (0.06 | ) | | | | | | | — | | | | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.37 | ) | | | | | | | (0.39 | ) | | | | | | | (0.46 | ) | | | | | | | (0.42 | ) | | | | | | | (0.45 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 12.49 | | | | | | | $ | 12.68 | | | | | | | $ | 12.14 | | | | | | | $ | 12.54 | | | | | | | $ | 12.87 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 1.55% | | | | | | | | 7.81% | | | | | | | | 0.51% | | | | | | | | 0.75% | | | | | | | | 5.87% | |
| | | | | | | | | |
| | $ | 181,242 | | | | | | | $ | 169,241 | | | | | | | $ | 119,894 | | | | | | | $ | 88,826 | | | | | | | $ | 53,133 | |
| | | 0.60% | | | | | | | | 0.60% | | | | | | | | 0.60% | | | | | | | | 0.60% | | | | | | | | 0.60% | |
| | | | | | | | | |
| | | 0.68% | | | | | | | | 0.68% | | | | | | | | 0.69% | | | | | | | | 0.70% | | | | | | | | 0.70% | |
| | | 2.78% | | | | | | | | 3.17% | | | | | | | | 3.24% | | | | | | | | 3.33% | | | | | | | | 3.50% | |
| | | | | | | | | |
| | | 2.70% | | | | | | | | 3.09% | | | | | | | | 3.15% | | | | | | | | 3.23% | | | | | | | | 3.40% | |
| | | 15% | | | | | | | | 13% | | | | | | | | 16% | | | | | | | | 17% | | | | | | | | 15% | |
|
| |
81
Financial highlights
Delaware Tax-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 shown 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.
82
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | | |
| | | 8/31/20 | | | | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | |
| |
| | $ | 11.25 | | | | | $ | 10.82 | | | | | $ | 11.17 | | | | | $ | 11.44 | | | | | $ | 11.22 | |
| | | | | | | | | |
| | | 0.27 | | | | | | 0.31 | | | | | | 0.30 | | | | | | 0.31 | | | | | | 0.33 | |
| | | (0.15 | ) | | | | | 0.43 | | | | | | (0.31 | ) | | | | | (0.25 | ) | | | | | 0.22 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.12 | | | | | | 0.74 | | | | | | (0.01 | ) | | | | | 0.06 | | | | | | 0.55 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | (0.27 | ) | | | | | (0.31 | ) | | | | | (0.30 | ) | | | | | (0.31 | ) | | | | | (0.33 | ) |
| | | — | | | | | | — | | | | | | (0.04 | ) | | | | | (0.02 | ) | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.27 | ) | | | | | (0.31 | ) | | | | | (0.34 | ) | | | | | (0.33 | ) | | | | | (0.33 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 11.10 | | | | | $ | 11.25 | | | | | $ | 10.82 | | | | | $ | 11.17 | | | | | $ | 11.44 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 1.08% | | | | | | 7.00% | | | | | | (0.01% | ) | | | | | 0.55% | | | | | | 4.98% | |
| | | | | | | | | |
| | $ | 57,788 | | | | | $ | 55,918 | | | | | $ | 59,284 | | | | | $ | 68,934 | | | | | $ | 79,730 | |
| | | 0.71% | | | | | | 0.71% | | | | | | 0.79% | | | | | | 0.84% | | | | | | 0.84% | |
| | | | | | | | | |
| | | 1.02% | | | | | | 1.04% | | | | | | 1.00% | | | | | | 0.99% | | | | | | 0.97% | |
| | | 2.39% | | | | | | 2.87% | | | | | | 2.77% | | | | | | 2.79% | | | | | | 2.92% | |
| | | | | | | | | |
| | | 2.08% | | | | | | 2.54% | | | | | | 2.56% | | | | | | 2.64% | | | | | | 2.79% | |
| | | 20% | | | | | | 19% | | | | | | 17% | | | | | | 22% | | | | | | 14% | |
|
| |
83
Financial highlights
Delaware Tax-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 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 | |
| | | | |
| | | 8/31/20 | | | | | | 8/31/19 | | | | | | 8/31/18 | | | | | | 8/31/17 | | | | | | 8/31/16 | |
| |
| | $ | 11.27 | | | | | | | $ | 10.84 | | | | | | | $ | 11.19 | | | | | | | $ | 11.47 | | | | | | | $ | 11.24 | |
| | | | | | | | | |
| | | 0.17 | | | | | | | | 0.22 | | | | | | | | 0.21 | | | | | | | | 0.22 | | | | | | | | 0.24 | |
| | | (0.15 | ) | | | | | | | 0.43 | | | | | | | | (0.31 | ) | | | | | | | (0.26 | ) | | | | | | | 0.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.02 | | | | | | | | 0.65 | | | | | | | | (0.10 | ) | | | | | | | (0.04 | ) | | | | | | | 0.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | (0.17 | ) | | | | | | | (0.22 | ) | | | | | | | (0.21 | ) | | | | | | | (0.22 | ) | | | | | | | (0.24 | ) |
| | | — | | | | | | | | — | | | | | | | | (0.04 | ) | | | | | | | (0.02 | ) | | | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.17 | ) | | | | | | | (0.22 | ) | | | | | | | (0.25 | ) | | | | | | | (0.24 | ) | | | | | | | (0.24 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 11.12 | | | | | | | $ | 11.27 | | | | | | | $ | 10.84 | | | | | | | $ | 11.19 | | | | | | | $ | 11.47 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 0.22% | | | | | | | | 6.09% | | | | | | | | (0.86% | ) | | | | | | | (0.39% | ) | | | | | | | 4.17% | |
| | | | | | | | | |
| | $ | 5,149 | | | | | | | $ | 7,167 | | | | | | | $ | 8,558 | | | | | | | $ | 11,885 | | | | | | | $ | 13,315 | |
| | | 1.56% | | | | | | | | 1.56% | | | | | | | | 1.64% | | | | | | | | 1.69% | | | | | | | | 1.69% | |
| | | | | | | | | |
| | | 1.77% | | | | | | | | 1.79% | | | | | | | | 1.75% | | | | | | | | 1.74% | | | | | | | | 1.72% | |
| | | 1.54% | | | | | | | | 2.02% | | | | | | | | 1.92% | | | | | | | | 1.94% | | | | | | | | 2.07% | |
| | | | | | | | | |
| | | 1.33% | | | | | | | | 1.79% | | | | | | | | 1.81% | | | | | | | | 1.89% | | | | | | | | 2.04% | |
| | | 20% | | | | | | | | 19% | | | | | | | | 17% | | | | | | | | 22% | | | | | | | | 14% | |
|
| |
85
Financial highlights
Delaware Tax-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.
86
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | | |
| | | 8/31/20 | | | | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | |
| |
| | $ | 11.25 | | | | | $ | 10.83 | | | | | $ | 11.17 | | | | | $ | 11.45 | | | | | $ | 11.22 | |
| | | | | | | | | |
| | | 0.28 | | | | | | 0.33 | | | | | | 0.32 | | | | | | 0.33 | | | | | | 0.35 | |
| | | (0.15 | ) | | | | | 0.42 | | | | | | (0.30 | ) | | | | | (0.26 | ) | | | | | 0.23 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.13 | | | | | | 0.75 | | | | | | 0.02 | | | | | | 0.07 | | | | | | 0.58 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | (0.28 | ) | | | | | (0.33 | ) | | | | | (0.32 | ) | | | | | (0.33 | ) | | | | | (0.35 | ) |
| | | — | | | | | | — | | | | | | (0.04 | ) | | | | | (0.02 | ) | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.28 | ) | | | | | (0.33 | ) | | | | | (0.36 | ) | | | | | (0.35 | ) | | | | | (0.35 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 11.10 | | | | | $ | 11.25 | | | | | $ | 10.83 | | | | | $ | 11.17 | | | | | $ | 11.45 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 1.23% | | | | | | 7.06% | | | | | | 0.23% | | | | | | 0.61% | | | | | | 5.22% | |
| | | | | | | | | |
| | $ | 24,848 | | | | | $ | 17,718 | | | | | $ | 11,470 | | | | | $ | 18,800 | | | | | $ | 12,694 | |
| | | 0.56% | | | | | | 0.56% | | | | | | 0.64% | | | | | | 0.69% | | | | | | 0.69% | |
| | | | | | | | | |
| | | 0.77% | | | | | | 0.79% | | | | | | 0.75% | | | | | | 0.74% | | | | | | 0.72% | |
| | | 2.54% | | | | | | 3.02% | | | | | | 2.92% | | | | | | 2.94% | | | | | | 3.07% | |
| | | | | | | | | |
| | | 2.33% | | | | | | 2.79% | | | | | | 2.81% | | | | | | 2.89% | | | | | | 3.04% | |
| | | 20% | | | | | | 19% | | | | | | 17% | | | | | | 22% | | | | | | 14% | |
|
| |
87
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.
88
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | | |
| | | 8/31/20 | | | | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | |
| |
| | $ | 11.21 | | | | | $ | 10.66 | | | | | $ | 10.88 | | | | | $ | 11.13 | | | | | $ | 10.84 | |
| | | | | | | | | |
| | | 0.29 | | | | | | 0.32 | | | | | | 0.32 | | | | | | 0.33 | | | | | | 0.36 | |
| | | (0.21 | ) | | | | | 0.55 | | | | | | (0.22 | ) | | | | | (0.25 | ) | | | | | 0.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.08 | | | | | | 0.87 | | | | | | 0.10 | | | | | | 0.08 | | | | | | 0.65 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | (0.29 | ) | | | | | (0.32 | ) | | | | | (0.32 | ) | | | | | (0.33 | ) | | | | | (0.36 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.29 | ) | | | | | (0.32 | ) | | | | | (0.32 | ) | | | | | (0.33 | ) | | | | | (0.36 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 11.00 | | | | | $ | 11.21 | | | | | $ | 10.66 | | | | | $ | 10.88 | | | | | $ | 11.13 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 0.81% | | | | | | 8.33% | | | | | | 0.95% | | | | | | 0.84% | | | | | | 6.12% | |
| | | | | | | | | |
| | $ | 103,913 | | | | | $ | 103,487 | | | | | $ | 98,980 | | | | | $ | 98,491 | | | | | $ | 121,168 | |
| | | 0.89% | | | | | | 0.89% | | | | | | 0.89% | | | | | | 0.89% | | | | | | 0.89% | |
| | | | | | | | | |
| | | 0.97% | | | | | | 0.99% | | | | | | 0.99% | | | | | | 0.99% | | | | | | 0.98% | |
| | | 2.69% | | | | | | 2.97% | | | | | | 2.98% | | | | | | 3.08% | | | | | | 3.23% | |
| | | | | | | | | |
| | | 2.61% | | | | | | 2.87% | | | | | | 2.88% | | | | | | 2.98% | | | | | | 3.14% | |
| | | 18% | | | | | | 12% | | | | | | 14% | | | | | | 19% | | | | | | 15% | |
|
| |
89
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 return3 |
|
Ratios and supplemental data: |
Net assets, end of period (000 omitted) |
Ratio of expenses to average net assets |
Ratio of expenses to average net assets prior to fees 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 | Amount is less than $0.005 per share. |
| 3 | 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.
90
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | | |
| | | 8/31/20 | | | | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | |
| |
| | $ | 11.23 | | | | | $ | 10.68 | | | | | $ | 10.90 | | | | | $ | 11.15 | | | | | $ | 10.87 | |
| | | | | | | | | |
| | | 0.21 | | | | | | 0.24 | | | | | | 0.24 | | | | | | 0.25 | | | | | | 0.27 | |
| | | (0.21 | ) | | | | | 0.55 | | | | | | (0.22 | ) | | | | | (0.25 | ) | | | | | 0.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | — | 2 | | | | | 0.79 | | | | | | 0.02 | | | | | | — | 2 | | | | | 0.56 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | (0.21 | ) | | | | | (0.24 | ) | | | | | (0.24 | ) | | | | | (0.25 | ) | | | | | (0.28 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.21 | ) | | | | | (0.24 | ) | | | | | (0.24 | ) | | | | | (0.25 | ) | | | | | (0.28 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 11.02 | | | | | $ | 11.23 | | | | | $ | 10.68 | | | | | $ | 10.90 | | | | | $ | 11.15 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 0.05% | | | | | | 7.51% | | | | | | 0.19% | | | | | | 0.09% | | | | | | 5.22% | |
| | | | | | | | | |
| | $ | 19,376 | | | | | $ | 21,059 | | | | | $ | 21,651 | | | | | $ | 32,223 | | | | | $ | 35,751 | |
| | | 1.64% | | | | | | 1.64% | | | | | | 1.64% | | | | | | 1.64% | | | | | | 1.64% | |
| | | | | | | | | |
| | | 1.72% | | | | | | 1.74% | | | | | | 1.74% | | | | | | 1.74% | | | | | | 1.73% | |
| | | 1.94% | | | | | | 2.22% | | | | | | 2.23% | | | | | | 2.33% | | | | | | 2.48% | |
| | | | | | | | | |
| | | 1.86% | | | | | | 2.12% | | | | | | 2.13% | | | | | | 2.23% | | | | | | 2.39% | |
| | | 18% | | | | | | 12% | | | | | | 14% | | | | | | 19% | | | | | | 15% | |
|
| |
91
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.
92
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Year ended | |
| | | | |
| | | 8/31/20 | | | | | 8/31/19 | | | | | 8/31/18 | | | | | 8/31/17 | | | | | 8/31/16 | |
| |
| | $ | 11.20 | | | | | $ | 10.66 | | | | | $ | 10.87 | | | | | $ | 11.12 | | | | | $ | 10.84 | |
| | | | | | | | | |
| | | 0.32 | | | | | | 0.35 | | | | | | 0.35 | | | | | | 0.36 | | | | | | 0.38 | |
| | | (0.20 | ) | | | | | 0.54 | | | | | | (0.21 | ) | | | | | (0.25 | ) | | | | | 0.29 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 0.12 | | | | | | 0.89 | | | | | | 0.14 | | | | | | 0.11 | | | | | | 0.67 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | (0.32 | ) | | | | | (0.35 | ) | | | | | (0.35 | ) | | | | | (0.36 | ) | | | | | (0.39 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | (0.32 | ) | | | | | (0.35 | ) | | | | | (0.35 | ) | | | | | (0.36 | ) | | | | | (0.39 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | $ | 11.00 | | | | | $ | 11.20 | | | | | $ | 10.66 | | | | | $ | 10.87 | | | | | $ | 11.12 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
| | | 1.15% | | | | | | 8.50% | | | | | | 1.30% | | | | | | 1.09% | | | | | | 6.28% | |
| | | | | | | | | |
| | $ | 75,325 | | | | | $ | 75,155 | | | | | $ | 53,501 | | | | | $ | 44,805 | | | | | $ | 31,206 | |
| | | 0.64% | | | | | | 0.64% | | | | | | 0.64% | | | | | | 0.64% | | | | | | 0.64% | |
| | | | | | | | | |
| | | 0.72% | | | | | | 0.74% | | | | | | 0.74% | | | | | | 0.74% | | | | | | 0.73% | |
| | | 2.94% | | | | | | 3.22% | | | | | | 3.23% | | | | | | 3.33% | | | | | | 3.48% | |
| | | | | | | | | |
| | | 2.86% | | | | | | 3.12% | | | | | | 3.13% | | | | | | 3.23% | | | | | | 3.39% | |
| | | 18% | | | | | | 12% | | | | | | 14% | | | | | | 19% | | | | | | 15% | |
|
| |
93
| | |
| Notes to financial statements | | |
| Delaware Funds® by Macquarie Minnesota municipal bond funds | | August 31, 2020 |
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, Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund. Voyageur Tax-Free Funds is organized as a Delaware statutory trust and offers Delaware Tax-Free Minnesota Fund. Voyageur Intermediate Tax-Free Funds is organized as a Delaware statutory trust and offers Delaware Tax-Free Minnesota Intermediate Fund. Voyageur Mutual Funds, Voyageur Tax-Free Funds, and Voyageur Intermediate Tax-Free Funds are each referred to as a Trust, or collectively, as the Trusts. These financial statements and the related notes pertain to Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund (each a Fund, or together, the Funds). Each Trust is an open-end investment company. The Funds are considered diversified under the Investment Company Act of 1940, as amended (1940 Act), and offer Class A, Class C, and Institutional Class shares. Class A shares are sold with a maximum front-end sales charge of 4.50% for Delaware Tax-Free Minnesota Fund and Delaware Minnesota High-Yield Municipal Bond Fund, and 2.75% for Delaware Tax-Free Minnesota Intermediate Fund. Class A share purchases of $250,000 or more will incur a contingent deferred sales charge (CDSC) instead of a front-end sales charge of 1.00%, if redeemed during the first year, and 0.50% during the second year for Delaware Tax-Free Minnesota Fund and Delaware Minnesota High-Yield Municipal Bond Fund, and 0.75% for Delaware Tax-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.
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 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
94
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 August 31, 2020 and for all open tax years (years ended August 31, 2017–August 31, 2019), 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” on the “Statements of operations.” During the year ended August 31, 2020, 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 distribute more frequently, if necessary for tax purposes. Dividends and distributions, if any, are recorded on the ex-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
95
Notes to financial statements
Delaware Funds® by Macquarie Minnesota municipal bond funds
1. Significant Accounting Policies (continued)
under “Less expenses paid indirectly.” For the year ended August 31, 2020, each Fund earned the following amounts under this arrangement:
| | | | |
| Fund | | | | Custody Credits |
| | |
Delaware Tax-Free Minnesota Fund | | | | $3,690 |
Delaware Tax-Free Minnesota Intermediate Fund | | | | 1,005 |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | 2,222 |
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 August 31, 2020, each Fund earned the following amounts under this arrangement:
| | | | | | | |
| Fund | | | | Earnings Credits |
| | |
Delaware Tax-Free Minnesota Fund | | | | | | $468 | |
Delaware Tax-Free Minnesota Intermediate Fund | | | | | | 81 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | | | 178 | |
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 | | 0.5500% | | 0.5000% | | 0.5500% |
On the next $500 million | | 0.5000% | | 0.4750% | | 0.5000% |
On the next $1.5 billion | | 0.4500% | | 0.4500% | | 0.4500% |
In the excess of $2.5 billion | | 0.4250% | | 0.4250% | | 0.4250% |
DMC has contractually agreed to waive that portion, if any, of its management fee and/or pay/reimburse each Fund to the extent necessary to ensure that total annual operating expenses (excluding any distribution and service (12b-1) fees, 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 following percentage of each Fund’s average daily net assets from September 1, 2019 through
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August 31, 2020.* These waivers and reimbursements may be terminated only by agreement of DMC and each Fund. The waivers and reimbursements are accrued daily and received monthly.
| | | | |
| Fund | | | | Operating expense
limitation as
a percentage
of average
daily net assets |
| | |
Delaware Tax-Free Minnesota Fund | | | | 0.60% |
Delaware Tax-Free Minnesota Intermediate Fund | | | | 0.56% |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | 0.64% |
Delaware Investments Fund Services Company (DIFSC), an affiliate of DMC, provides fund accounting and financial administrative 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 August 31, 2020, each Fund was charged for these services as follows:
| | | | | | |
| Fund | | | | Fees | |
| | |
Delaware Tax-Free Minnesota Fund | | | | $ | 23,932 | |
Delaware Tax-Free Minnesota Intermediate Fund | | | | | 6,828 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | | 11,021 | |
DIFSC is also the transfer agent and dividend disbursing agent of each Fund. 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 August 31, 2020, each Fund was charged for these services as follows:
| | | | | | |
| Fund | | | | Fees | |
| | |
Delaware Tax-Free Minnesota Fund | | | | $ | 53,609 | |
Delaware Tax-Free Minnesota Intermediate Fund | | | | | 7,607 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | | 18,869 | |
Pursuant to a sub-transfer agency agreement between DIFSC and BNY Mellon Investment Servicing (US) Inc. (BNYMIS), BNYMIS provides certain sub-transfer agency services to each Fund. Sub-transfer agency fees are paid by each Fund and are also included on the “Statements of operations” under
97
Notes to financial statements
Delaware Funds® by Macquarie Minnesota municipal bond funds
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)
“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 annual 12b-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 Delaware Tax-Free Minnesota Intermediate Fund’s Class A shares 12b-1 fee to 0.15% of average daily net assets from September 1, 2019 through August 31, 2020.** The fees are calculated daily and paid monthly. Institutional Class shares do not pay 12b-1 fees.
As provided in the investment management agreement, each Fund bears a portion of the cost of certain resources shared with DMC, including the cost of internal personnel of DMC and/or its affiliates that provide legal, tax, and regulatory reporting services to each Fund. These amounts are included on the “Statements of operations” under “Legal fees.” For the year ended August 31, 2020, each Fund was charged for internal legal, tax, and regulatory reporting services provided by DMC and/or its affiliates’ employees as follows:
| | | | | | | |
| Fund | | | | Fees |
| | |
Delaware Tax-Free Minnesota Fund | | | | | $ | 17,067 | |
Delaware Tax-Free Minnesota Intermediate Fund | | | | | | 2,578 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | | | 6,143 | |
For the year ended August 31, 2020, DDLP earned commissions on sales of Class A shares for each Fund as follows:
| | | | | | | |
| Fund | | | | Commissions |
| | |
Delaware Tax-Free Minnesota Fund | | | | | $ | 26,419 | |
Delaware Tax-Free Minnesota Intermediate Fund | | | | | | 3,914 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | | | 9,196 | |
For the year ended August 31, 2020, 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:
| | | | | | | | | | |
| Fund | | | | Class A | | | Class C | |
| | | |
Delaware Tax-Free Minnesota Fund | | | | $ | 11,663 | | | $ | 585 | |
Delaware Tax-Free Minnesota Intermediate Fund | | | | | 2,136 | | | | 394 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | | 202 | | | | 1,107 | |
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 Trust. These officers and Trustees are paid no compensation by the Funds.
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Cross trades for the year ended August 31, 2020, were executed by each Fund pursuant to procedures adopted by the Boards designed to ensure compliance with Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds of investment companies, or between a fund of an investment company and another entity, that are or could be considered affiliates by virtue of having a common investment advisor (or affiliated investment advisors), common directors/trustees and/or common officers. At their regularly scheduled meetings, the Boards review such transactions for compliance with the procedures adopted by the Boards. Pursuant to these procedures, for the year ended August 31, 2020, the Funds engaged in the following Rule 17a-7 securities purchases and securities sales, which resulted in net realized gains (losses) as follows:
| | | | | | | | | | | | | | | |
| | | Purchases | | Sales | | Net realized gain (loss) |
| | | |
Delaware Tax-Free Minnesota Fund | | | $ | 30,345,289 | | | | $ | 20,969,732 | | | | $ | (543,316 | ) |
Delaware Tax-Free Minnesota Intermediate Fund | | | | 13,399,508 | | | | | 6,998,309 | | | | | 51,674 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | 13,078,149 | | | | | 13,542,941 | | | | | 429,455 | |
*For Delaware Tax-Free Minnesota Fund and Delaware Minnesota High-Yield Municipal Bond Fund, the aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020. For Delaware Tax-Free Minnesota Intermediate Fund, the aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.
**For Delaware Tax-Free Minnesota Intermediate Fund Class A shares, the aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.
3. Investments
For the year ended August 31, 2020, each Fund made purchases and sales of investment securities other than short-term investments as follows:
| | | | | | | | | | | | |
| Fund | | | | Purchases | | Sales |
| | | |
Delaware Tax-Free Minnesota Fund | | | | | $ | 88,635,235 | | | | $ | 111,434,127 | |
Delaware Tax-Free Minnesota Intermediate Fund | | | | | | 24,731,521 | | | | | 16,309,116 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | | | 38,287,730 | | | | | 35,147,130 | |
99
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 approximates the tax basis unrealized gains and losses that may be realized and distributed to shareholders. At August 31, 2020, the cost and unrealized appreciation (depreciation) of investments for federal income tax purposes for each Fund were as follows:
| | | | | | | | | | | | | | | | | | | | |
Fund | | Cost of investments | | Aggregate unrealized appreciation of investments | | Aggregate unrealized depreciation of investments | | Net unrealized appreciation of investments |
| | | | |
Delaware Tax-Free Minnesota Fund | | | $ | 547,560,824 | | | | $ | 30,862,437 | | | | $ | (4,524,004 | ) | | | $ | 26,338,433 | |
Delaware Tax-Free Minnesota Intermediate Fund | | | | 83,138,581 | | | | | 4,042,090 | | | | | (388,325 | ) | | | | 3,653,765 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | 189,290,759 | | | | | 9,005,320 | | | | | (2,518,983 | ) | | | | 6,486,337 | |
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 as follows:
| | | | |
| 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) |
100
| | | | |
| 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) |
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 August 31, 2020:
| | | | | |
| | | Delaware Tax-Free Minnesota Fund |
| |
| | | Level 2 |
Securities | | | | | |
Assets: | | | | | |
Municipal Bonds | | | $ | 567,649,257 | |
Short-Term Investments | | | | 6,250,000 | |
| | | | | |
Total Value of Securities | | | $ | 573,899,257 | |
| | | | | |
| | | | | |
| | | Delaware Tax-Free Minnesota Intermediate Fund |
| |
| | | Level 2 |
Securities | | | | | |
Assets: | | | | | |
Municipal Bonds | | | $ | 85,612,346 | |
Short-Term Investments | | | | 1,180,000 | |
| | | | | |
Total Value of Securities | | | $ | 86,792,346 | |
| | | | | |
| | | | | |
| |
| | | Delaware Minnesota High-Yield Municipal Bond Fund |
| |
| | | Level 2 |
Securities | | | | | |
Assets: | | | | | |
Municipal Bonds | | | $ | 194,377,096 | |
Short-Term Investments | | | | 1,400,000 | |
| | | | | |
Total Value of Securities | | | $ | 195,777,096 | |
| | | | | |
During the year ended August 31, 2020, there were no transfers into or out of Level 3 investments. Each Fund’s policy is to recognize transfers into or out of Level 3 investments based on fair value at the beginning of the reporting period.
101
Notes to financial statements
Delaware Funds® by Macquarie Minnesota municipal bond funds
3. Investments (continued)
A reconciliation of Level 3 investments is presented when a Fund has a significant amount of Level 3 investments at the beginning, interim, or end of the period in relation to that Fund’s net assets. During the year ended August 31, 2020, 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 August 31, 2020 and 2019 was as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | Tax-exempt
income | | Ordinary
income | | Long-term
capital
gains | | Total |
Year ended August 31, 2020: | | | | | | | | | | | | | | | | | | | | |
Delaware Tax-Free Minnesota Fund | | | $ | 14,903,273 | | | | $ | 843,521 | | | | $ | 677,752 | | | | $ | 16,424,546 | |
Delaware Tax-Free Minnesota Intermediate Fund | | | | 1,942,218 | | | | | — | | | | | — | | | | | 1,942,218 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | 5,518,266 | | | | | 20 | | | | | — | | | | | 5,518,286 | |
Year ended August 31, 2019: | | | | | | | | | | | | | | | | | | | | |
Delaware Tax-Free Minnesota Fund | | | | 16,220,204 | | | | | 57 | | | | | — | | | | | 16,220,261 | |
Delaware Tax-Free Minnesota Intermediate Fund | | | | 2,178,234 | | | | | — | | | | | — | | | | | 2,178,234 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | 5,301,651 | | | | | 19 | | | | | — | | | | | 5,301,670 | |
5. Components of Net Assets on a Tax Basis
As of August 31, 2020, the components of net assets on a tax basis were as follows:
| | | | | | | | | | | | | | | |
| | | Delaware Tax-Free
Minnesota Fund | | Delaware Tax-Free
Minnesota
Intermediate Fund | | Delaware Minnesota
High-Yield Municipal
Bond Fund |
Shares of beneficial interest | | | $ | 554,460,569 | | | | $ | 84,302,908 | | | | $ | 192,917,782 | |
Undistributed tax-exempt income | | | | 3,226 | | | | | 35,970 | | | | | 116,406 | |
Qualified late year loss deferrals | | | | (338,708 | ) | | | | — | | | | | — | |
Distributions payable | | | | (311,554 | ) | | | | (40,160 | ) | | | | (116,406 | ) |
Capital loss carryforwards | | | | — | | | | | (167,389 | ) | | | | (790,025 | ) |
Unrealized appreciation of investments | | | | 26,338,433 | | | | | 3,653,765 | | | | | 6,486,337 | |
| | | | | | | | | | | | | | | |
| | | |
Net assets | | | $ | 580,151,966 | | | | $ | 87,785,094 | | | | $ | 198,614,094 | |
| | | | | | | | | | | | | | | |
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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, as applicable.
Qualified late year ordinary and capital losses (including currency and specified gain (loss) items) represent losses realized from January 1, 2020 through August 31, 2020 and November 1, 2019 through August 31, 2020, respectively, that, in accordance with federal income tax regulations, the Funds have elected to defer and treat as having arisen in the following fiscal year.
For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. At August 31, 2020, Delaware Minnesota High-Yield Municipal Bond Fund utilized $179,349 of capital loss carryforwards.
At August 31, 2020, capital loss carryforwards available to offset future realized capital gains were as follows:
| | | | | | | | | | | | | | | |
| | | Loss carryforward character | | |
| | | |
| | | Short-term | | Long-term | | Total |
| | | |
Delaware Tax-Free Minnesota Intermediate Fund | | | $ | 167,389 | | | | $ | — | | | | $ | 167,389 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | 790,025 | | | | | — | | | | | 790,025 | |
At August 31, 2020, Delaware Tax-Free Minnesota Fund did not have any capital loss carryforwards.
103
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
Minnesota Fund | | | Delaware Tax-Free
Minnesota
Intermediate Fund | | | Delaware Minnesota
High-Yield Municipal
Bond Fund | |
| | | Year ended | | | Year ended | | | Year ended | |
| | | 8/31/20 | | | 8/31/19 | | | 8/31/20 | | | 8/31/19 | | | 8/31/20 | | | 8/31/19 | |
Shares sold: | | | | | | | | | | | | | | | | | | | | | | | | |
Class A | | | 2,470,484 | | | | 2,812,545 | | | | 760,322 | | | | 521,273 | | | | 1,132,737 | | | | 1,091,129 | |
Class C | | | 162,787 | | | | 252,325 | | | | 58,542 | | | | 82,541 | | | | 332,654 | | | | 291,127 | |
Institutional Class | | | 3,968,576 | | | | 6,847,310 | | | | 1,097,848 | | | | 773,437 | | | | 2,563,763 | | | | 2,920,048 | |
| | | |
Shares issued upon reinvestment of dividends and distributions: | | | | | | | | | | | | | |
Class A | | | 756,678 | | | | 798,095 | | | | 104,225 | | | | 124,608 | | | | 227,598 | | | | 240,677 | |
Class C | | | 44,653 | | | | 53,400 | | | | 8,531 | | | | 13,717 | | | | 33,910 | | | | 39,113 | |
Institutional Class | | | 314,844 | | | | 263,476 | | | | 42,075 | | | | 36,374 | | | | 208,101 | | | | 174,526 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | 7,718,022 | | | | 11,027,151 | | | | 2,071,543 | | | | 1,551,950 | | | | 4,498,763 | | | | 4,756,620 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Shares redeemed: | | | | | | | | | | | | | | | | | | | | | | | | |
Class A | | | (3,813,207 | ) | | | (5,263,546 | ) | | | (629,289 | ) | | | (1,153,362 | ) | | | (1,146,037 | ) | | | (1,382,974 | ) |
Class C | | | (547,958 | ) | | | (878,285 | ) | | | (240,006 | ) | | | (249,651 | ) | | | (483,508 | ) | | | (481,931 | ) |
Institutional Class | | | (3,120,080 | ) | | | (3,637,252 | ) | | | (476,666 | ) | | | (294,820 | ) | | | (2,628,916 | ) | | | (1,406,980 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
| | | (7,481,245 | ) | | | (9,779,083 | ) | | | (1,345,961 | ) | | | (1,697,833 | ) | | | (4,258,461 | ) | | | (3,271,885 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Net increase (decrease) | | | 236,777 | | | | 1,248,068 | | | | 725,582 | | | | (145,883 | ) | | | 240,302 | | | | 1,484,735 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
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 above and on the “Statements of changes in net assets.” For the years ended August 31, 2020 and 2019, each Fund had the following exchange transactions:
| | | | | | | | | | | | | | | | | | | | |
| | | Exchange Redemptions | | | Exchange Subscriptions | | | | |
| | | Class A
Shares | | | Class C
Shares | | | Class A
Shares | | | Institutional
Class
Shares | | | Value | |
Delaware Tax-Free Minnesota Fund | | | | | | | | | | | | | |
8/31/20 | | | 73,750 | | | | 57,333 | | | | 55,209 | | | | 76,105 | | | $ | 1,625,460 | |
8/31/19 | | | 59,365 | | | | 40,077 | | | | 31,466 | | | | 68,171 | | | | 1,220,708 | |
Delaware Tax-Free Minnesota Intermediate Fund | | | | | | | | | |
8/31/20 | | | — | | | | 20,392 | | | | 20,195 | | | | 252 | | | | 225,863 | |
8/31/19 | | | 1,165 | | | | 9,191 | | | | 9,217 | | | | 1,165 | | | | 112,353 | |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | | | | | | |
8/31/20 | | | 4,022 | | | | 46,853 | | | | 45,608 | | | | 5,405 | | | | 559,234 | |
8/31/19 | | | 26,086 | | | | 44,298 | | | | 9,709 | | | | 60,819 | | | | 745,406 | |
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7. Line of Credit
Each Fund, along with certain other funds in the Delaware Funds (Participants), was a participant in a $220,000,000 revolving line of credit intended to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. On November 4, 2019, the Participants entered into an amendment to the agreement for a $250,000,000 revolving line of credit (Agreement). The Agreement was increased to $275,000,000 on May 6, 2020. The Agreement is to be used as described below and operates in substantially the same manner as the original agreement. The line of credit available under the Agreement expires on November 2, 2020.
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 of one-third of their net assets under the Agreement. Each Participant was individually, and not jointly, liable for its particular advances, if any, under the line of credit. The line of credit available under the Agreement expired on November 4, 2019.
The Funds had no amounts outstanding as of August 31, 2020, or at any time during the year then ended.
8. Geographic, Credit, and Market Risks
Beginning in January 2020, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of a novel coronavirus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand and general market uncertainty. The effects of COVID-19 have and may continue to adversely affect the global economy, the economies of certain nations and individual issuers, all of which may negatively impact the Funds’ performance.
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.
IBOR risk is the risk that potential changes related to the use of the London interbank offered rate (LIBOR) could have adverse impacts on financial instruments that reference LIBOR. The potential abandonment of LIBOR could affect the value and liquidity of instruments that reference LIBOR. The use of alternative reference rate products may impact investment strategy performance. These risks may also apply with respect to changes in connection with other interbank offered rates (“IBORs”), such as the euro overnight index average (EONIA), which are also the subject of recent reform.
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
105
Notes to financial statements
Delaware Funds® by Macquarie Minnesota municipal bond funds
8. Geographic, Credit, and Market Risks (continued)
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 August 31, 2020, 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 Tax-Free
Minnesota Fund | | Delaware Tax-Free
Minnesota
Intermediate Fund | | Delaware Minnesota
High-Yield Municipal
Bond Fund |
Assured Guaranty Municipal Corporation | | | | 0.68 | % | | | | 1.81 | % | | | | 0.55 | % |
National Public Finance Guarantee Corporation | | | | 0.83 | % | | | | — | | | | | — | |
Total | | | | 1.51 | % | | | | 1.81 | % | | | | 0.55 | % |
Each Fund invests a portion of its assets in high yield fixed income securities, which are securities rated lower than BBB- by Standard & Poor’s Financial Services LLC (S&P), lower than Baa3 by Moody’s Investors Service Inc. (Moody’s), or similarly rated by another nationally recognized statistical rating organization. Investments in these higher yielding securities are generally accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.
Each Fund invests in certain obligations that may have liquidity protection designed to ensure that the receipt of payments due on the underlying security is timely. Such protection may be provided through guarantees, insurance policies, or letters of credit obtained by the issuer or sponsor through third parties, through various means of structuring the transaction or through a combination of such approaches. Each Fund will not pay any additional fees for such credit support, although the existence of credit support may increase the price of a security.
Each Fund may invest in advance refunded bonds, escrow secured bonds, or defeased bonds. Under current federal tax laws and regulations, state and local government borrowers are permitted to refinance outstanding bonds by issuing new bonds. The issuer refinances the outstanding debt to either reduce interest costs or to remove or alter restrictive covenants imposed by the bonds being refinanced. A refunding transaction where the municipal securities are being refunded within 90 days from the issuance of the refunding issue is known as a “current refunding.” Advance refunded bonds are bonds in which the refunded bond issue remains outstanding for more than 90 days following the issuance of the refunding issue. In an advance refunding, the issuer will use the proceeds of a new bond issue to purchase high grade interest-bearing debt securities, which are then deposited in an irrevocable escrow account held by an escrow agent to secure all future payments of principal and interest and bond premium of the advance refunded bond. Bonds are “escrowed to maturity” when the proceeds of the refunding issue are deposited in an escrow account for investment sufficient to pay all of the principal and interest on the original interest payment and maturity dates.
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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, the day-to-day functions of determining whether individual securities are liquid for purposes of each Fund’s limitation on investments in illiquid securities. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to each Fund’s 15% limit on investments in illiquid securities. Rule 144A securities have been identified on the “Schedules of investments.”
9. Contractual Obligations
Each Fund enters into contracts in the normal course of business that contain a variety of indemnifications. Each Fund’s maximum exposure under these arrangements is unknown. However, each Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed each Fund’s existing contracts and expects the risk of loss to be remote.
10. Recent Accounting Pronouncements
In March 2017, FASB issued Accounting Standards Update (ASU), ASU 2017-08, Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities which amends the amortization period for certain callable debt securities purchased at a premium, shortening such period to the earliest call date. ASU 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management has implemented ASU 2017-08 and determined that the impact of this guidance to each Fund’s net assets at the end of the period is not material.
In August 2018, FASB issued ASU 2018-13, which changes certain fair value measurement disclosure requirements. ASU 2018-13, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for the timing of transfers between levels and the valuation process for Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years,
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Notes to financial statements
Delaware Funds® by Macquarie Minnesota municipal bond funds
10. Recent Accounting Pronouncements (continued)
beginning after December 15, 2019. At this time, Management is evaluating the implications of these changes on the financial statements.
In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in ASU 2020-04 provide optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of LIBOR and other interbank-offered based reference rates as of the end of 2021. ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. As of the financial reporting period, Management is evaluating the impact of applying this ASU.
11. Subsequent Events
Management has determined that no material events or transactions occurred subsequent to August 31, 2020, that would require recognition or disclosure in the Funds’ financial statements.
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Report of independent
registered public accounting firm
To the Board of Trustees of Voyageur Tax-Free Funds, Voyageur Intermediate Tax-Free Funds and Voyageur Mutual Funds and Shareholders of Delaware Tax-Free Minnesota Fund, Delaware Tax-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 Delaware Tax-Free Minnesota Fund (constituting Voyageur Tax-Free Funds), Delaware Tax-Free Minnesota Intermediate Fund (constituting Voyageur Intermediate Tax-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, 2020, the related statements of operations for the year ended August 31, 2020, the statements of changes in net assets for each of the two years in the period ended August 31, 2020, including the related notes, and the financial highlights for each of the five years in the period ended August 31, 2020 (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, 2020, 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, 2020 and each of the financial highlights for each of the five years in the period ended August 31, 2020 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, 2020 by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinions.
/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
October 19, 2020
We have served as the auditor of one or more investment companies in Delaware Funds® by Macquarie since 2010.
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Other Fund information (Unaudited)
Delaware Funds® by Macquarie Minnesota municipal bond funds
Liquidity Risk Management Program
The Securities and Exchange Commission (the “SEC”) has adopted Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”), which requires all open-end funds (other than money market funds) to adopt and implement a program reasonably designed to assess and manage the fund’s “liquidity risk,” defined as the risk that the fund could not meet requests to redeem shares issued by the fund without significant dilution of remaining investors’ interests in the fund.
The Funds have adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the “Program”). The Board has designated the Division Director of the US Operational Risk Group of Macquarie Asset Management as the Program Administrator for each Fund in the Trust.
As required by the Liquidity Rule, the Program includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each of the Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of each Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting each Fund’s acquisition of Illiquid investments if, immediately after the acquisition, each Fund would hold more than 15% of its net assets in Illiquid assets. The Program also requires reporting to the SEC (on a non-public basis) and to the Board if each Fund’s holdings of Illiquid assets exceed 15% of each Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
In assessing and managing each Fund’s liquidity risk, the Program Administrator considers, as relevant, a variety of factors, including: (1) each Fund’s investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Funds during both normal and reasonably foreseeable stressed conditions; and (3) each Fund’s holdings of cash and cash equivalents and any borrowing arrangements. Classification of each Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or to sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value. Each Fund primarily holds assets that are classified as Highly Liquid, and therefore is not required to establish an HLIM.
At a meeting of the Board held on May 19-21, 2020, the Program Administrator provided a written report to the Board addressing the Program’s operation and assessing the adequacy and effectiveness of its implementation for the period from December 1, 2018 through March 31, 2020. The report concluded that the Program is appropriately designed and effectively implemented and that it meets the requirements of Rule 22e-4 and each Fund’s liquidity needs. Each Fund’s HLIM is set at an appropriate level and the Funds complied with its HLIM at all times during the reporting period.
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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 August 31, 2020, each Fund reports distributions paid during the year as follows:
| | | | | | | | | | | | | | | | | | | | |
| | | (A) Long-Term Capital Gains Distributions (Tax Basis) | | (B) Ordinary Income Distributions (Tax Basis) | | (C) Tax-Exempt Distributions (Tax Basis) | | Total Distributions (Tax Basis) |
Delaware Tax-Free Minnesota Fund | | | | 4.13 | % | | | | 5.13 | % | | | | 90.74 | % | | | | 100.00 | % |
Delaware Tax-Free Minnesota Intermediate Fund | | | | — | | | | | — | | | | | 100.00 | % | | | | 100.00 | % |
Delaware Minnesota High-Yield Municipal Bond Fund | | | | — | | | | | — | | | | | 100.00 | % | | | | 100.00 | % |
(A), (B) and (C) are based on a percentage of each Fund’s total distributions.
Board consideration of Investment Advisory Agreements for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund at a meeting held on August 11-13, 2020
At a meeting held on August 11-13, 2020 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory Agreements for Delaware Tax-Free Minnesota Fund, Delaware Tax-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 and sub-advisory contracts. Information furnished specifically in connection with the renewal of the Investment Management Agreement with Delaware Management Company (“DMC”), a series of Macquarie Investment Management Business Trust (“MIMBT”), included materials provided by DMC and its affiliates (collectively, “Macquarie Investment Management”) concerning, among other things, the
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Other Fund information (Unaudited)
Delaware Funds® by Macquarie Minnesota municipal bond funds
Board consideration of Investment Advisory Agreements for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund at a meeting held on August 11-13, 2020 (continued)
nature, extent, and quality of services provided to the Funds; the costs of such services to the Funds; economies of scale; and the investment manager’s financial condition and profitability. In addition, in connection with the Annual Meeting, materials were provided to the Trustees in May 2020, 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
112
the Annual Meeting. The Broadridge reports prepared for each Fund showed the investment performance of its Class A shares in comparison to a group of similar funds as selected by Broadridge (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for each Fund was shown for the past 1-, 3-, 5-, and 10-year periods, to the extent, applicable, ended January 31, 2020. The Board’s objective is that each Fund’s performance for the 1-, 3-, and 5-year periods be at or above the median of its Performance Universe.
Delaware Tax-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 the 1-year period was in the third quartile of its Performance Universe. The report further showed that the Fund’s total return for the 3-, 5-, and 10-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.
Delaware Tax-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 the 1- and 3-year periods was in the second quartile of its Performance Universe. The report further showed that the Fund’s total return for the 5- and 10-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 the 1-, 3-, 5-, and 10-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 the 1-, 3-, 5-, and 10-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 recently completed fiscal year. The Board also focused on the comparative analysis of effective
113
Other Fund information (Unaudited)
Delaware Funds® by Macquarie Minnesota municipal bond funds
Board consideration of Investment Advisory Agreements for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund at a meeting held on August 11-13, 2020 (continued)
management fees and total expense ratios of each Fund versus effective management fees and total expense ratios of a group of similar funds as selected by Broadridge (the “Expense Group”). In reviewing comparative costs, each Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. Each Fund’s total expenses were also compared with those of its Expense Group. The Broadridge total expenses, for comparative consistency, were shown by Broadridge for Class A shares and comparative total expenses including 12b-1 and non-12b-1 service fees. The Board’s objective is for each Fund’s total expense ratio to be competitive with those of the peer funds within its Expense Group.
Delaware Tax-Free Minnesota Fund – The expense comparisons for the Fund showed that its actual management fee and total expenses were in the quartile with the second highest expenses of its 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 waivers in place through December 2020 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.
Delaware Tax-Free Minnesota Intermediate Fund – The expense comparisons for the Fund showed that its actual management fee and 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 second lowest 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 2020 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
114
services to each of the individual funds and the Delaware Funds as a whole. Specific attention was given to the methodology used by DMC in allocating costs for the purpose of determining profitability. Management stated that the level of profits of DMC, to a certain extent, reflects recent operational cost savings and efficiencies initiated by DMC. The Board considered DMC’s efforts to improve services provided to Fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which DMC might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. As part of its work, the Board also reviewed a report prepared by JDL regarding MIMBT profitability as compared to certain peer fund complexes and the Independent Trustees met with JDL personnel to discuss DMC’s profitability in such context. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of DMC.
Economies of scale. The Trustees considered whether economies of scale are realized by DMC as each Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed 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, 2020, Delaware Tax-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, 2020, Delaware Tax-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.
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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 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.
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Name, Address, and Birth Date | | Position(s) Held with Fund(s) | | Length of Time Served | | Principal Occupation(s) During the Past Five Years | | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | | Other Directorships Held by Trustee or Officer |
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Interested Trustee |
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Shawn K. Lytle1 610 Market Street Philadelphia, PA 19106 February 1970 | | President, Chief Executive Officer, and Trustee | | President and Chief Executive Officer since August 2015 Trustee since September 2015 | | President — Macquarie Investment Management2 (June 2015–Present) Regional Head of Americas — UBS Global Asset Management (April 2010–May 2015) | | 93 | | Trustee —UBS Relationship Funds, SMA Relationship Trust, and UBS Funds (May 2010–April 2015) |
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Independent Trustees |
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Jerome D. Abernathy 610 Market Street Philadelphia, PA 19106 July 1959 | | Trustee | | Since January 2019 | | Managing Member, Stonebrook Capital Management, LLC (financial technology: macro factors and databases) (January 1993-Present) | | 93 | | None |
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Name, Address, and Birth Date | | Position(s) Held with Fund(s) | | Length of Time Served | | Principal Occupation(s) During the Past Five Years | | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | | Other Directorships Held by Trustee or Officer |
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Thomas L. Bennett 610 Market Street Philadelphia, PA 19106 October 1947 | | Chair and Trustee | | Trustee since March 2005 Chair since March 2015 | | Private Investor (March 2004–Present) | | 93 | | None |
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Ann D. Borowiec 610 Market Street Philadelphia, PA 19106 November 1958 | | Trustee | | Since March 2015 | | Chief Executive Officer, Private Wealth Management (2011–2013) and Market Manager, New Jersey Private Bank (2005–2011) — J.P. Morgan Chase & Co. | | 93 | | Director —Banco Santander International (October 2016–December 2019) Director — Santander Bank, N.A. (December 2016–December 2019) |
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Joseph W. Chow 610 Market Street Philadelphia, PA 19106 January 1953 | | Trustee | | Since January 2013 | | Private Investor (April 2011–Present) | | 93 | | Director and Audit Committee Member — Hercules Technology Growth Capital, Inc. (July 2004–July 2014) |
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Board of trustees / directors and officers addendum
Delaware Funds® by Macquarie
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Name, Address, and Birth Date | | Position(s) Held with Fund(s) | | Length of Time Served | | Principal Occupation(s) During the Past Five Years | | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | | Other Directorships Held by Trustee or Officer |
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John A. Fry 610 Market Street Philadelphia, PA 19106 May 1960 | | Trustee | | Since January 2001 | | President — Drexel University (August 2010–Present) President — Franklin & Marshall College (July 2002–June 2010) | | 93 | | Director; Compensation Committee and Governance Committee Member — Community Health Systems (May 2004–Present) Director — Drexel Morgan & Co. (2015–2019) Director and Audit Committee Member — vTv Therapeutics Inc. (2017–Present) Director and Audit Committee Member — FS Credit Real Estate Income Trust, Inc. (2018–Present) Director — Federal Reserve Bank of Philadelphia (January 2020–Present) |
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Lucinda S. Landreth 610 Market Street Philadelphia, PA 19106 June 1947 | | Trustee | | Since March 2005 | | Private Investor (2004–Present) | | 93 | | None |
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Name, Address, and Birth Date | | Position(s) Held with Fund(s) | | Length of Time Served | | Principal Occupation(s) During the Past Five Years | | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | | Other Directorships Held by Trustee or Officer |
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Frances A. Sevilla-Sacasa 610 Market Street Philadelphia, PA 19106 January 1956 | | Trustee | | Since September 2011 | | Private Investor (January 2017–Present) Chief Executive Officer —Banco Itaú International (April 2012–December 2016) Executive Advisor to Dean (August 2011–March 2012) and Interim Dean (January 2011–July 2011) — University of Miami School of Business Administration President — U.S. Trust, Bank of America Private Wealth Management (Private Banking) (July 2007-December 2008) | | 93 | | Trust Manager and Audit Committee Chair — Camden Property Trust (August 2011–Present) Director; Strategic Planning and Reserves Committee and Nominating and Governance Committee Member — Callon Petroleum Company (December 2019–Present) Director; Audit Committee Member — Carrizo Oil & Gas, Inc. (March 2018–December 2019) |
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Board of trustees / directors and officers addendum
Delaware Funds® by Macquarie
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Name, Address, and Birth Date | | Position(s) Held with Fund(s) | | Length of Time Served | | Principal Occupation(s) During the Past Five Years | | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | | Other Directorships Held by Trustee or Officer |
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Thomas K. Whitford 610 Market Street Philadelphia, PA 19106 March 1956 | | Trustee | | Since January 2013 | | Vice Chairman (2010–April 2013) — PNC Financial Services Group | | 93 | | Director — HSBC North America Holdings Inc. (December 2013–Present) 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) |
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Name, Address, and Birth Date | | Position(s) Held with Fund(s) | | Length of Time Served | | Principal Occupation(s) During the Past Five Years | | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | | Other Directorships Held by Trustee or Officer |
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Christianna Wood 610 Market Street Philadelphia, PA 19106 August 1959 | | Trustee | | Since January 2019 | | Chief Executive Officer and President �� Gore Creek Capital, Ltd. (August 2009–Present) | | 93 | | Director; Finance Committee and Audit Committee Member — H&R Block Corporation (July 2008–Present) Director; Investments Committee, Capital and Finance 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) |
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Board of trustees / directors and officers addendum
Delaware Funds® by Macquarie
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Name, Address, and Birth Date | | Position(s) Held with Fund(s) | | Length of Time Served | | Principal Occupation(s) During the Past Five Years | | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | | Other Directorships Held by Trustee or Officer |
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Janet L. Yeomans 610 Market Street Philadelphia, PA 19106 July 1948 | | Trustee | | Since April 1999 | | Vice President and Treasurer (January 2006–July 2012), Vice President — Mergers & Acquisitions (January 2003–January 2006), and Vice President and Treasurer (July 1995–January 2003) — 3M Company | | 93 | | Director; Personnel and Compensation Committee Chair; Member of Nominating, Investments, and Audit Committees for various periods throughout directorship — Okabena Company (2009–2017) |
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Officers |
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David F. Connor 610 Market Street Philadelphia, PA 19106 December 1963 | | Senior Vice President, General Counsel, and Secretary | | Senior Vice President, since May 2013; General Counsel since May 2015; Secretary since October 2005 | | David F. Connor has served in various capacities at different times at Macquarie Investment Management. | | 93 | | None3 |
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Daniel V. Geatens 610 Market Street Philadelphia, PA 19106 October 1972 | | Vice President and Treasurer | | Vice President and Treasurer since October 2007 | | Daniel V. Geatens has served in various capacities at different times at Macquarie Investment Management. | | 93 | | None3 |
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Name, Address, and Birth Date | | Position(s) Held with Fund(s) | | Length of Time Served | | Principal Occupation(s) During the Past Five Years | | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | | Other Directorships Held by Trustee or Officer |
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Richard Salus 610 Market Street Philadelphia, PA 19106 October 1963 | | Senior Vice President and Chief Financial Officer | | Senior Vice President and Chief Financial Officer since November 2006 | | Richard Salus has served in various capacities at different times at Macquarie Investment Management. | | 93 | | None |
1 Shawn K. Lytle is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor.
2 Macquarie Investment Management is the marketing name for Macquarie Management Holdings, Inc. and its subsidiaries, including the Fund’s(s’) investment manager, principal underwriter, and its transfer agent.
3 David F. Connor and Daniel V. Geatens 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 of the Optimum Fund Trust, and he is the Chief Financial Officer and Treasurer for Macquarie Global Infrastructure Total Return Fund Inc.
The Statement of Additional Information for the Fund(s) includes additional information about the Trustees and Officers and is available, without charge, upon request by calling 800 231-8002.
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About the organization
Board of trustees
Shawn K. Lytle
President and
Chief Executive Officer
Delaware Funds®
by Macquarie
Philadelphia, PA
Jerome D. Abernathy
Managing Member
Stonebrook Capital
Management, LLC
Jersey City, NJ
Thomas L. Bennett
Chairman of the Board
Delaware Funds
by Macquarie
Private Investor
Rosemont, PA
Ann D. Borowiec
Former Chief Executive
Officer
Private Wealth Management
J.P. Morgan Chase & Co.
New York, NY
Joseph W. Chow
Former Executive Vice
President
State Street Corporation
Boston, MA
John A. Fry
President
Drexel University
Philadelphia, PA
Lucinda S. Landreth
Former Chief Investment
Officer
Assurant, Inc.
New York, NY
Frances A.
Sevilla-Sacasa
Former Chief Executive
Officer
Banco Itaú International
Miami, FL
Thomas K. Whitford
Former Vice Chairman
PNC Financial Services Group
Pittsburgh, PA
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
Senior Vice President,
General Counsel,
and Secretary
Delaware Funds
by Macquarie
Philadelphia, PA
Daniel V. Geatens
Vice President and
Treasurer
Delaware Funds
by Macquarie
Philadelphia, PA
Richard Salus
Senior Vice President and
Chief Financial Officer
Delaware Funds
by Macquarie
Philadelphia, PA
This annual report is for the information of Delaware Tax-Free Minnesota Fund, Delaware Tax-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 Form N-PORT. Each Fund’s Forms N-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 800 523-1918; and (ii) on the SEC’s website at sec.gov. In addition, a description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities and the Schedules of Investments included in the Funds’ most recent Form N-PORT are available without charge on the Funds’ website at delawarefunds.com/literature. Each Fund’s Forms N-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 800 SEC-0330.
Information (if any) regarding how the Funds voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Funds’ website at delawarefunds.com/proxy; and (ii) on the SEC’s website at sec.gov.
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Item 2. Code of Ethics
Item 3. Audit Committee Financial Expert
The registrant’s Board of Trustees 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 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 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:
Jerome D. Abernathy
John A. Fry
Thomas K. Whitford, Chair
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 $39,640 for the fiscal year ended August 31, 2020.
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 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, 2020.
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 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, 2019. 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, 2020.
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.
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 $5,607,000 and $9,955,000 for the registrant’s fiscal years ended August 31, 2020 and August 31, 2019, 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 Companies and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures
The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
There were no significant changes in the registrant’s internal control over financial reporting that occurred during the 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. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits
Not applicable.
(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934.
Not applicable.
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.
