UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-4977
Exact name of registrant as specified in charter: Voyageur Insured Funds
Address of principal executive offices:
2005 Market Street
Philadelphia, PA 19103
Name and address of agent for service:
David F. Connor, Esq.
2005 Market Street
Philadelphia, PA 19103
Registrant’s telephone number, including area code: (800) 523-1918
Date of fiscal year end: August 31
Date of reporting period: February 28, 2007
Item 1. Reports to Stockholders
The Registrant's shareholder reports are combined with the shareholder reports of other investment company registrants. This Form N-CSR pertains to the DELAWARE TAX-FREE ARIZONA FUND and DELWARE TAX-FREE MINNESOTA INSURED FUND of the Registrant, information on which is included in the following shareholder reports.
| ||
Semiannual Report | Delaware | |
Tax-Free Arizona Fund | ||
(Formerly Delaware Tax-Free | ||
Arizona Insured Fund) | ||
Delaware | ||
Tax-Free California Fund | ||
Delaware | ||
Tax-Free Colorado Fund | ||
Delaware | ||
Tax-Free Idaho Fund | ||
February 28, 2007 | ||
Fixed income mutual funds
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Table of contents
> Disclosure of Fund expenses | 1 | ||
> Sector allocations and credit quality breakdowns | 3 | ||
> Statements of net assets | 5 | ||
> Statements of operations | 18 | ||
> Statements of changes in net assets | 19 | ||
> Financial highlights | 21 | ||
> Notes to financial statements | 33 | ||
> About the organization | 40 |
Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.
Mutual fund advisory services provided by Delaware Management Company, a series of Delaware Management
Business Trust, which is a registered investment advisor.
© 2007 Delaware Distributors, L.P.
Disclosure of Fund expenses
For the period September 1, 2006 to February 28, 2007
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. These following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period September 1, 2006 to February 28, 2007.
Actual Expenses
The first section of the tables shown, “Actual Fund Return,” provides information about actual account values and actual expenses. You may use the information in this section of the table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second section of the tables shown, “Hypothetical 5% Return,” provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. Each Fund’s actual expenses shown in the tables reflect fee waivers in effect. The expenses shown in each table assume reinvestment of all dividends and distributions.
“Expenses Paid During Period” are equal to the Funds’ annualized expense ratio, multiplied by the average account value over the period, multiplied by the 181/365 (to reflect the one-half year period).
Delaware Tax-Free Arizona Fund
Expense Analysis of an Investment of $1,000
Expenses | |||||||||||||
Beginning | Ending | Paid During | |||||||||||
Account | Account | Annualized | Period | ||||||||||
Value | Value | Expense | 9/1/06 to | ||||||||||
9/1/06 | 2/28/07 | Ratio | 2/28/07 | ||||||||||
Actual Fund Return | |||||||||||||
Class A | $ | 1,000.00 | $ | 1,026.70 | 0.77 | % | $ | 3.87 | |||||
Class B | 1,000.00 | 1,022.90 | 1.52 | % | 7.62 | ||||||||
Class C | 1,000.00 | 1,022.80 | 1.52 | % | 7.62 | ||||||||
Hypothetical 5% Return (5% return before expenses) | |||||||||||||
Class A | $ | 1,000.00 | $ | 1,020.98 | 0.77 | % | $ | 3.86 | |||||
Class B | 1,000.00 | 1,017.26 | 1.52 | % | 7.60 | ||||||||
Class C | 1,000.00 | 1,017.26 | 1.52 | % | 7.60 |
Delaware Tax-Free California Fund
Expense Analysis of an Investment of $1,000
Expenses | |||||||||||||
Beginning | Ending | Paid During | |||||||||||
Account | Account | Annualized | Period | ||||||||||
Value | Value | Expense | 9/1/06 to | ||||||||||
9/1/06 | 2/28/07 | Ratio | 2/28/07 | ||||||||||
Actual Fund Return | |||||||||||||
Class A | $ | 1,000.00 | $ | 1,032.10 | 0.90 | % | $ | 4.53 | |||||
Class B | 1,000.00 | 1,028.20 | 1.65 | % | 8.30 | ||||||||
Class C | 1,000.00 | 1,028.30 | 1.65 | % | 8.30 | ||||||||
Hypothetical 5% Return (5% return before expenses) | |||||||||||||
Class A | $ | 1,000.00 | $ | 1,020.33 | 0.90 | % | $ | 4.51 | |||||
Class B | 1,000.00 | 1,016.61 | 1.65 | % | 8.25 | ||||||||
Class C | 1,000.00 | 1,016.61 | 1.65 | % | 8.25 |
(continues) 1
Disclosure of Fund expenses
Delaware Tax-Free Colorado Fund
Expense Analysis of an Investment of $1,000
Expenses | |||||||||||||
Beginning | Ending | Paid During | |||||||||||
Account | Account | Annualized | Period | ||||||||||
Value | Value | Expense | 9/1/06 to | ||||||||||
9/1/06 | 2/28/07 | Ratio | 2/28/07 | ||||||||||
Actual Fund Return | |||||||||||||
Class A | $ | 1,000.00 | $ | 1,028.60 | 0.95 | % | $ | 4.78 | |||||
Class B | 1,000.00 | 1,024.80 | 1.70 | % | 8.53 | ||||||||
Class C | 1,000.00 | 1,024.70 | 1.70 | % | 8.53 | ||||||||
Hypothetical 5% Return (5% return before expenses) | |||||||||||||
Class A | $ | 1,000.00 | $ | 1,020.08 | 0.95 | % | $ | 4.76 | |||||
Class B | 1,000.00 | 1,016.36 | 1.70 | % | 8.50 | ||||||||
Class C | 1,000.00 | 1,016.36 | 1.70 | % | 8.50 |
Delaware Tax-Free Idaho Fund
Expense Analysis of an Investment of $1,000
Expenses | |||||||||||||
Beginning | Ending | Paid During | |||||||||||
Account | Account | Annualized | Period | ||||||||||
Value | Value | Expense | 9/1/06 to | ||||||||||
9/1/06 | 2/28/07 | Ratio | 2/28/07 | ||||||||||
Actual Fund Return | |||||||||||||
Class A | $ | 1,000.00 | $ | 1,027.50 | 0.87 | % | $ | 4.37 | |||||
Class B | 1,000.00 | 1,023.80 | 1.62 | % | 8.13 | ||||||||
Class C | 1,000.00 | 1,023.80 | 1.62 | % | 8.13 | ||||||||
Hypothetical 5% Return (5% return before expenses) | |||||||||||||
Class A | $ | 1,000.00 | $ | 1,020.48 | 0.87 | % | $ | 4.36 | |||||
Class B | 1,000.00 | 1,016.76 | 1.62 | % | 8.10 | ||||||||
Class C | 1,000.00 | 1,016.76 | 1.62 | % | 8.10 |
2
Sector allocations and credit quality breakdowns
As of February 28, 2007
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware Tax-Free Arizona Fund | |||
Percentage | |||
Sector | of Net Assets | ||
Municipal Bonds | 97.92% | ||
Corporate-Backed Revenue Bonds | 4.13% | ||
Education Revenue Bonds | 7.45% | ||
Electric Revenue Bonds | 4.49% | ||
Escrowed to Maturity Bonds | 0.54% | ||
Health Care Revenue Bonds | 8.80% | ||
Housing Revenue Bonds | 1.71% | ||
Lease Revenue Bonds | 12.25% | ||
Local General Obligation Bonds | 4.11% | ||
Pre-Refunded Bonds | 26.58% | ||
Special Tax Revenue Bonds | 5.34% | ||
State General Obligation Bonds | 4.26% | ||
Transportation Revenue Bonds | 12.64% | ||
Water & Sewer Revenue Bonds | 5.62% | ||
Short-Term Investments | 1.83% | ||
Total Value of Securities | 99.75% | ||
Receivables and Other Assets Net of Liabilities | 0.25% | ||
Total Net Assets | 100.00% | ||
Credit Quality Breakdown | |||
(as a % of fixed income investments) | |||
AAA | 80.32% | ||
AA | 4.09% | ||
A | 4.95% | ||
BBB | 9.29% | ||
NR | 1.35% | ||
Total | 100.00% |
Delaware Tax-Free California Fund | |||
Percentage | |||
Sector | of Net Assets | ||
Municipal Bonds | 98.12% | ||
Education Revenue Bonds | 12.71% | ||
Electric Revenue Bonds | 1.72% | ||
Health Care Revenue Bonds | 11.17% | ||
Housing Revenue Bonds | 7.36% | ||
Lease Revenue Bonds | 7.18% | ||
Local General Obligation Bonds | 18.08% | ||
Pre-Refunded Bonds | 15.03% | ||
Resource Recovery Revenue Bonds | 3.80% | ||
Special Tax Revenue Bonds | 2.17% | ||
State General Obligation Bonds | 7.37% | ||
Transportation Revenue Bonds | 4.74% | ||
Water & Sewer Revenue Bonds | 6.79% | ||
Short-Term Investments | 0.90% | ||
Total Value of Securities | 99.02% | ||
Receivables and Other Assets Net of Liabilities | 0.98% | ||
Total Net Assets | 100.00% | ||
Credit Quality Breakdown | |||
(as a % of fixed income investments) | |||
AAA | 41.12% | ||
AA | 11.96% | ||
A | 27.29% | ||
BBB | 11.33% | ||
NR | 8.30% | ||
Total | 100.00% |
(continues) 3
Sector allocations and credit quality breakdowns
As of February 28, 2007
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware Tax-Free Colorado Fund | |||
Percentage | |||
Sector | of Net Assets | ||
Municipal Bonds | 98.27% | ||
Education Revenue Bonds | 15.03% | ||
Electric Revenue Bonds | 1.86% | ||
Escrowed to Maturity Bonds | 2.17% | ||
Health Care Revenue Bonds | 14.40% | ||
Housing Revenue Bonds | 3.56% | ||
Lease Revenue Bonds | 5.30% | ||
Local General Obligation Bonds | 16.31% | ||
Pre-Refunded Bonds | 22.64% | ||
Special Tax Revenue Bonds | 2.72% | ||
State General Obligation Bonds | 3.64% | ||
Transportation Revenue Bonds | 9.53% | ||
Water & Sewer Revenue Bonds | 1.11% | ||
Short-Term Investments | 0.68% | ||
Total Value of Securities | 98.95% | ||
Receivables and Other Assets Net of Liabilities | 1.05% | ||
Total Net Assets | 100.00% | ||
Credit Quality Breakdown | |||
(as a % of fixed income investments) | |||
AAA | 46.43% | ||
AA | 19.36% | ||
A | 12.02% | ||
BBB | 14.74% | ||
B | 0.71% | ||
NR | 6.74% | ||
Total | 100.00% |
Delaware Tax-Free Idaho Fund | |||
Percentage | |||
Sector | of Net Assets | ||
Municipal Bonds | 97.36% | ||
Corporate-Backed Revenue Bonds | 7.51% | ||
Education Revenue Bonds | 14.95% | ||
Electric Revenue Bonds | 1.88% | ||
Escrowed to Maturity Bonds | 2.20% | ||
Health Care Revenue Bonds | 4.39% | ||
Housing Revenue Bonds | 7.94% | ||
Lease Revenue Bonds | 7.68% | ||
Local General Obligation Bonds | 24.34% | ||
Pre-Refunded Bonds | 10.00% | ||
Special Tax Revenue Bonds | 4.31% | ||
State General Obligation Bonds | 4.13% | ||
Transportation Revenue Bonds | 5.02% | ||
Water & Sewer Revenue Bonds | 3.01% | ||
Short-Term Investments | 0.32% | ||
Total Value of Securities | 97.68% | ||
Receivables and Other Assets Net of Liabilities | 2.32% | ||
Total Net Assets | 100.00% | ||
Credit Quality Breakdown | |||
(as a % of fixed income investments) | |||
AAA | 58.92% | ||
AA | 3.56% | ||
A | 8.03% | ||
BBB | 22.28% | ||
BB | 3.08% | ||
NR | 4.13% | ||
Total | 100.00% |
4
Statements of net assets
Delaware Tax-Free Arizona Fund
February 28, 2007 (Unaudited)
Principal | ||||||
Amount | Value | |||||
Municipal Bonds – 97.92% | ||||||
Corporate-Backed Revenue Bonds – 4.13% | ||||||
Maricopa County Pollution Control | ||||||
(Palo Verde Project) Series A | ||||||
5.05% 5/1/29 (AMBAC) | $ | 6,000,000 | $ | 6,322,920 | ||
6,322,920 | ||||||
Education Revenue Bonds – 7.45% | ||||||
Arizona State Board of Regents | ||||||
Certificates of Participation | ||||||
(University of Arizona - | ||||||
Main Campus) | ||||||
Series 2000 A-1 | ||||||
5.125% 6/1/25 (AMBAC) | 1,250,000 | 1,308,975 | ||||
Arizona State University | ||||||
Certificates of Participation | ||||||
(Research Infrastructure Project) | ||||||
5.00% 9/1/30 (AMBAC) | 3,000,000 | 3,177,930 | ||||
Glendale Industrial Development | ||||||
Authority Revenue | ||||||
(Midwestern University) | ||||||
Series A 5.875% 5/15/31 | 1,000,000 | 1,076,810 | ||||
Northern Arizona University | ||||||
Certificates of Participation | ||||||
(Northern Arizona University | ||||||
Research Project) | ||||||
5.00% 9/1/30 (AMBAC) | 1,500,000 | 1,598,910 | ||||
South Campus Group Student | ||||||
Housing Revenue (Arizona State | ||||||
University South Campus Project) | ||||||
5.625% 9/1/35 (MBIA) | 1,000,000 | 1,094,100 | ||||
Tucson Industrial Development | ||||||
Authority (University of Arizona - | ||||||
Marshall Foundation) | ||||||
Series B 5.00% 7/15/27 (AMBAC) | 1,000,000 | 1,048,920 | ||||
University of Arizona Certificates | ||||||
of Participation (University of | ||||||
Arizona Project) | ||||||
Series A 5.125% 6/1/21 (AMBAC) | 1,000,000 | 1,056,210 | ||||
Series B 5.125% 6/1/22 (AMBAC) | 1,000,000 | 1,055,240 | ||||
11,417,095 | ||||||
Electric Revenue Bonds – 4.49% | ||||||
Energy Management Services | ||||||
(Arizona State University - | ||||||
Main Campus) | ||||||
5.25% 7/1/17 (MBIA) | 1,500,000 | 1,601,190 | ||||
Puerto Rico Electric Power Authority | ||||||
Revenue Series NN | ||||||
5.00% 7/1/32 (MBIA) | 2,500,000 | 2,649,450 | ||||
Salt River Project Agricultural | ||||||
Improvement & Power District | ||||||
Electric System Revenue | ||||||
Series A 5.00% 1/1/31 | 500,000 | 525,525 | ||||
Series B 5.00% 1/1/31 (MBIA) | 2,000,000 | 2,104,240 | ||||
6,880,405 | ||||||
Escrowed to Maturity Bonds – 0.54% | ||||||
Maricopa County School District #14 | ||||||
(Creighton School Improvement | ||||||
Project of 1990) Series C | ||||||
6.50% 7/1/08 (FGIC) | 455,000 | 472,012 | ||||
Phoenix Street & Highway Revenue | ||||||
6.50% 7/1/09 (AMBAC) | 350,000 | 354,046 | ||||
826,058 | ||||||
Health Care Revenue Bonds – 8.80% | ||||||
Glendale Industrial Development | ||||||
Authority Hospital Revenue | ||||||
5.00% 12/1/35 | 1,000,000 | 1,029,950 | ||||
Maricopa County Industrial | ||||||
Development Authority Revenue | ||||||
(Catholic Healthcare West) | ||||||
Series A 5.50% 7/1/26 | 1,000,000 | 1,081,010 | ||||
(Mayo Clinic) 5.00% 11/15/36 | 1,000,000 | 1,058,580 | ||||
(Senior Living Healthcare) | ||||||
Series A 5.00% 8/20/35 (GNMA) | 1,000,000 | 1,049,770 | ||||
Phoenix Industrial Development | ||||||
Authority Hospital Revenue | ||||||
(John C. Lincoln Health) Series B | ||||||
5.75% 12/1/16 (Connie Lee) | 4,110,000 | 4,247,069 | ||||
University Medical Center | ||||||
Hospital Revenue | ||||||
5.00% 7/1/24 | 800,000 | 829,792 | ||||
5.00% 7/1/35 | 2,000,000 | 2,063,180 | ||||
Yavapai County Industrial | ||||||
Development Authority Revenue | ||||||
(Yavapai Regional Medical | ||||||
Center) Series A | ||||||
5.25% 8/1/21 (RADIAN) | 2,000,000 | 2,125,800 | ||||
13,485,151 | ||||||
Housing Revenue Bonds – 1.71% | ||||||
Pima County Industrial Development | ||||||
Authority Single Family Housing | ||||||
Revenue | ||||||
Series A-1 6.125% 11/1/33 | ||||||
(GNMA) (FNMA) (FHLMC) (AMT) | 20,000 | 20,077 | ||||
Series B-1 6.10% 5/1/31 | ||||||
(GNMA) (AMT) | 60,000 | 60,224 | ||||
Yuma Industrial Development | ||||||
Authority Multifamily Revenue | ||||||
Series A 6.10% 9/20/19 | ||||||
(GNMA) (AMT) | 2,340,000 | 2,547,629 | ||||
2,627,930 | ||||||
Lease Revenue Bonds – 12.25% | ||||||
Arizona Game & Fish Department & | ||||||
Community Beneficial | ||||||
Interest Certificates | ||||||
(Administration Building Project) | ||||||
5.00% 7/1/32 | 1,300,000 | 1,364,740 |
(continues) 5
Statements of net assets
Delaware Tax-Free Arizona Fund
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Lease Revenue Bonds (continued) | ||||||
Marana Property Corporation | ||||||
Municipal Facilities Revenue | ||||||
5.00% 7/1/28 (AMBAC) | $ | 575,000 | $ | 605,418 | ||
Maricopa County Industrial | ||||||
Development Authority | ||||||
Correctional Contract Revenue | ||||||
(Phoenix West Prison) Series B | ||||||
5.375% 7/1/22 (ACA) | 1,000,000 | 1,055,150 | ||||
Phoenix Industrial Development | ||||||
Authority Lease Revenue | ||||||
(Capitol Mall, LLC II Project) | ||||||
5.00% 9/15/28 (AMBAC) | 4,000,000 | 4,172,759 | ||||
Pinal County Certificates | ||||||
of Participation | ||||||
5.00% 12/1/29 | 1,300,000 | 1,364,662 | ||||
5.125% 6/1/21 (AMBAC) | 4,675,000 | 4,935,210 | ||||
Puerto Rico Public Buildings | ||||||
Authority Revenue (Guaranteed | ||||||
Government Facilities) | ||||||
Series D 5.25% 7/1/27 | 470,000 | 497,862 | ||||
Series D 5.25% 7/1/36 | 270,000 | 285,077 | ||||
Series I 5.25% 7/1/33 | 500,000 | 536,930 | ||||
Salt River Project Agricultural | ||||||
Improvement & Power District | ||||||
Certificates of Participation | ||||||
5.00% 12/1/18 (MBIA) | 1,500,000 | 1,601,340 | ||||
University of Arizona Certificates of | ||||||
Participation Series B | ||||||
5.00% 6/1/31 (AMBAC) | 2,250,000 | 2,362,545 | ||||
18,781,693 | ||||||
Local General Obligation Bonds – 4.11% | ||||||
Cochise County Unified School | ||||||
District #68 7.50% 7/1/10 (FGIC) | 1,000,000 | 1,118,850 | ||||
DC Ranch Community Facilities | ||||||
5.00% 7/15/27 (AMBAC) | 1,000,000 | 1,056,360 | ||||
Marana Tangerine Farm | ||||||
Improvement District Revenue | ||||||
�� 4.60% 1/1/26 | 1,000,000 | 1,011,160 | ||||
Maricopa County School District #14 | ||||||
(Creighton School Improvement | ||||||
Project of 1990) Series C | ||||||
6.50% 7/1/08 (FGIC) | 545,000 | 565,230 | ||||
Phoenix Variable Purpose Series B | ||||||
5.00% 7/1/27 | 2,435,000 | 2,553,341 | ||||
6,304,941 | ||||||
§Pre-Refunded Bonds – 26.58% | ||||||
Arizona Board of Regents (Northern | ||||||
Arizona University) | ||||||
5.00% 6/1/34-12 (FGIC) | 1,000,000 | 1,063,760 | ||||
5.50% 6/1/34-14 (FGIC) | 1,250,000 | 1,394,950 | ||||
Arizona State Transportation Board | ||||||
Highway Revenue Series B | ||||||
5.25% 7/1/22-12 | 1,000,000 | 1,076,710 | ||||
Maricopa County School District #3 | ||||||
(Tempe Elementary Project | ||||||
of 1997) Series E | ||||||
5.70% 7/1/16-09 (FGIC) | 1,025,000 | 1,081,703 | ||||
Mesa Industrial Development | ||||||
Authority Revenue (Discovery | ||||||
Health Systems) Series A | ||||||
5.625% 1/1/29-10 (MBIA) | 10,000,000 | 10,625,201 | ||||
Mohave County Community | ||||||
College District Revenue | ||||||
(State Board of Directors) | ||||||
6.00% 3/1/20-10 (MBIA) | 1,000,000 | 1,067,110 | ||||
Phoenix Industrial Development | ||||||
Authority Lease Revenue | ||||||
(Capitol Mall, LLC Project) | ||||||
5.50% 9/15/27-10 (AMBAC) | 5,000,000 | 5,309,350 | ||||
Phoenix Industrial Development | ||||||
Authority Multifamily Housing | ||||||
Revenue (Ventana Palms | ||||||
Apartments) Series A | ||||||
6.15% 10/1/29-09 (MBIA) | 510,000 | 550,458 | ||||
6.20% 10/1/34-09 (MBIA) | 940,000 | 1,015,717 | ||||
Puerto Rico Commonwealth | ||||||
Highway & Transportation | ||||||
Authority Revenue Series K | ||||||
5.00% 7/1/35-15 | 750,000 | 817,988 | ||||
Puerto Rico Commonwealth Public | ||||||
Improvement Revenue | ||||||
5.125% 7/1/30-11 (FSA) | 770,000 | 817,247 | ||||
Series A 5.00% 7/1/27-12 | 1,000,000 | 1,067,690 | ||||
Series A 5.125% 7/1/31-11 | 1,705,000 | 1,809,619 | ||||
Puerto Rico Public Buildings | ||||||
Authority Revenue (Guaranteed | ||||||
Government Facilities) Series D | ||||||
5.25% 7/1/27-12 | 1,280,000 | 1,377,549 | ||||
5.25% 7/1/36-12 | 730,000 | 785,633 | ||||
Scottsdale Industrial Development | ||||||
Authority Hospital Revenue | ||||||
(Scottsdale Healthcare) | ||||||
5.70% 12/1/21-11 | 500,000 | 547,090 | ||||
Sedona Partner Certificates of | ||||||
Participation 5.75% 7/1/16-09 | 500,000 | 527,870 | ||||
Southern Arizona Capital | ||||||
Facilities Finance (University of | ||||||
Arizona Project) | ||||||
5.10% 9/1/33-12 (MBIA) | 3,250,000 | 3,482,375 | ||||
Surprise Municipal Property | ||||||
Excise Tax Revenue | ||||||
5.70% 7/1/20-09 (FGIC) | 5,000,000 | 5,269,700 | ||||
University of Arizona | ||||||
Certificates of Participation | ||||||
(University of Arizona Parking & | ||||||
Student Housing) | ||||||
5.75% 6/1/19-09 (AMBAC) | 1,000,000 | 1,045,620 | ||||
40,733,340 |
6
Principal | ||||||||
Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Special Tax Revenue Bonds – 5.34% | ||||||||
Arizona Tourism & Sports Authority | ||||||||
Tax Revenue (Multipurpose | ||||||||
Stadium Facilities) Series A | ||||||||
5.00% 7/1/28 (MBIA) | $ | 2,500,000 | $ | 2,632,250 | ||||
5.00% 7/1/31 (MBIA) | 1,500,000 | 1,575,915 | ||||||
Glendale Municipal Property | ||||||||
Corporation Series A | ||||||||
5.00% 7/1/33 (AMBAC) | 1,000,000 | 1,056,050 | ||||||
Phoenix Civic Improvement | ||||||||
Corporation Distribution | ||||||||
Revenue (Civic Plaza) Series B | ||||||||
5.50% 7/1/31 (FGIC) | 1,500,000 | 1,337,910 | ||||||
San Luis Civic Improvement | ||||||||
Corporation Municipal Facilities | ||||||||
Excise Tax Revenue | ||||||||
5.00% 7/1/38 (XLCA) | 1,500,000 | 1,589,595 | ||||||
8,191,720 | ||||||||
State General Obligation Bonds – 4.26% | ||||||||
Puerto Rico Commonwealth Public | ||||||||
Improvement | ||||||||
Refunding Series A 5.50% 7/1/19 | 1,300,000 | 1,476,852 | ||||||
Unrefunded Balance Series A | ||||||||
5.125% 7/1/30 (FSA) | 480,000 | 502,666 | ||||||
5.125% 7/1/31 | 3,370,000 | 3,495,734 | ||||||
Virgin Islands Public Finance | ||||||||
Authority (Gross Receipts Taxes) | ||||||||
5.00% 10/1/31 (ACA) | 1,000,000 | 1,047,530 | ||||||
6,522,782 | ||||||||
Transportation Revenue Bonds – 12.64% | ||||||||
Arizona State Transportation Board | ||||||||
Highway Revenue Series A | ||||||||
5.00% 7/1/23 | 1,000,000 | 1,070,580 | ||||||
Phoenix Civic Improvement | ||||||||
Corporation Airport Revenue | ||||||||
Series B | ||||||||
5.25% 7/1/27 (FGIC) (AMT) | 1,000,000 | 1,051,920 | ||||||
5.25% 7/1/32 (FGIC) (AMT) | 10,300,000 | 10,817,163 | ||||||
Puerto Rico Commonwealth | ||||||||
Highway & Transportation | ||||||||
Authority Revenue Series N | ||||||||
5.25% 7/1/39 (FGIC) | 1,000,000 | 1,205,970 | ||||||
Tucson Airport Authority Senior | ||||||||
Lien Series 2001 5.35% 6/1/31 | ||||||||
(AMBAC) (AMT) | 5,000,000 | 5,228,300 | ||||||
19,373,933 | ||||||||
Water & Sewer Revenue Bonds – 5.62% | ||||||||
Gilbert Water Municipal Property | ||||||||
Corporation Wastewater System | ||||||||
& Utility Revenue (Development | ||||||||
Fee & Senior Lien) 4.90% 4/1/19 | 1,500,000 | 1,523,745 | ||||||
Glendale Water & Sewer Revenue | ||||||||
Senior Lien | ||||||||
5.00% 7/1/28 (AMBAC) | 2,000,000 | 2,112,100 | ||||||
Phoenix Civic Improvement | ||||||||
Corporation Wastewater | ||||||||
Systems Revenue Junior Lien | ||||||||
5.00% 7/1/24 (FGIC) | 1,000,000 | 1,043,090 | ||||||
5.00% 7/1/26 (FGIC) | 3,750,000 | 3,932,250 | ||||||
8,611,185 | ||||||||
Total Municipal Bonds | ||||||||
(cost $141,626,971) | 150,079,153 | |||||||
Short-Term Investments – 1.83% | ||||||||
•Variable Rate Demand Notes – 1.83% | ||||||||
Arizona Health Facilities Authority | ||||||||
Revenue (Catholic West Health | ||||||||
Facilities) Series B 3.50% 7/1/35 | ||||||||
(LOC – Bank of America N.A.) | 800,000 | 800,000 | ||||||
Scottsdale Industrial Development | ||||||||
Authority Hospital Revenue | ||||||||
(Scottsdale Healthcare) | ||||||||
Series A 3.51% 9/1/30 (FGIC) | 2,000,000 | 2,000,000 | ||||||
Total Short-Term Investments | ||||||||
(cost $2,800,000) | 2,800,000 | |||||||
Total Value of Securities – 99.75% | ||||||||
(cost $144,426,971) | 152,879,153 | |||||||
Receivables and Other Assets | ||||||||
Net of Liabilities – 0.25% | 389,024 | |||||||
Net Assets Applicable to 13,417,014 | ||||||||
Shares Outstanding – 100.00% | $ | 153,268,177 | ||||||
Net Asset Value – Delaware Tax-Free Arizona Fund | ||||||||
Class A ($130,222,061 / 11,401,775 Shares) | $11.42 | |||||||
Net Asset Value – Delaware Tax-Free Arizona Fund | ||||||||
Class B ($15,027,714 / 1,314,821 Shares) | $11.43 | |||||||
Net Asset Value – Delaware Tax-Free Arizona Fund | ||||||||
Class C ($8,018,402 / 700,418 Shares) | $11.45 | |||||||
Components of Net Assets at February 28, 2007: | ||||||||
Shares of beneficial interest | ||||||||
(unlimited authorization – no par) | $ | 147,487,298 | ||||||
Accumulated net realized loss on investments | (2,671,303 | ) | ||||||
Net unrealized appreciation of investments | 8,452,182 | |||||||
Total net assets | $ | 153,268,177 |
§ | Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S. Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to Financial Statements.” |
• | Variable rate security. The rate shown is the rate as of February 28, 2007. |
(continues) 7
Statements of net assets
Delaware Tax-Free Arizona Fund
Summary of Abbreviations: | |
ACA — Insured by American Capital Access | |
AMBAC — Insured by the AMBAC Assurance Corporation | |
AMT — Subject to Alternative Minimum Tax | |
Connie Lee — Insured by the College Construction Insurance Association | |
FGIC — Insured by the Financial Guaranty Insurance Company | |
FHLMC — Insured by the Federal Home Loan Mortgage Corporation | |
FNMA — Insured by Federal National Mortgage Association | |
FSA — Insured by Financial Security Assurance | |
GNMA — Insured by Government National Mortgage Association | |
LOC — Letter of Credit | |
MBIA — Insured by the Municipal Bond Insurance Association | |
RADIAN — Insured by Radian Asset Assurance | |
XLCA — Insured by XL Capital Assurance | |
Net Asset Value and Offering Price Per Share – | |
Delaware Tax-Free Arizona Fund | |
Net asset value Class A (A) | $11.42 |
Sales charge (4.50% of offering price) (B) | 0.54 |
Offering price | $11.96 |
(A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. | |
(B) | See the current prospectus for purchases of $100,000 or more. |
See accompanying notes
Delaware Tax-Free California Fund
February 28, 2007 (Unaudited)
Principal | ||||||
Amount | Value | |||||
Municipal Bonds – 98.12% | ||||||
Education Revenue Bonds – 12.71% | ||||||
California Educational Facilities | ||||||
Authority Revenue | ||||||
(Claremont Graduate | ||||||
University) Series A | ||||||
5.00% 3/1/37 | $ | 1,000,000 | $ | 1,047,320 | ||
(University of the Pacific) | ||||||
5.25% 5/1/34 | 1,000,000 | 1,063,160 | ||||
5.75% 11/1/30 (MBIA) | 310,000 | 331,740 | ||||
(Woodbury University) | ||||||
5.00% 1/1/36 | 1,000,000 | 1,032,340 | ||||
California Municipal Finance | ||||||
Authority Educational | ||||||
Revenue (American Heritage | ||||||
Foundation Project) | ||||||
Series A 5.25% 6/1/36 | 1,000,000 | 1,048,100 | ||||
California Public Works Board Lease | ||||||
Revenue (Various Universities of | ||||||
California Projects) | ||||||
Series D 5.00% 5/1/30 | 1,000,000 | 1,062,990 | ||||
Series F 5.00% 11/1/29 | 1,000,000 | 1,053,640 | ||||
California State University | ||||||
Systemwide Revenue Series A | ||||||
5.25% 11/1/20 (FSA) | 1,000,000 | 1,089,600 | ||||
California Statewide Communities | ||||||
Development Authority | ||||||
Revenue (Viewpoint School | ||||||
Project) 5.75% 10/1/33 (ACA) | 1,000,000 | 1,103,240 | ||||
California Statewide Communities | ||||||
Development Authority | ||||||
Student Housing Revenue | ||||||
(East Campus Apartments, LLC) | ||||||
Series A 5.625% 8/1/34 (ACA) | 1,000,000 | 1,070,460 | ||||
(Irvine, LLC - UCI East) | ||||||
5.00% 5/15/38 | 1,000,000 | 1,051,950 | ||||
San Diego County Certificates of | ||||||
Participation (University of San | ||||||
Diego) 5.375% 10/1/41 | 1,000,000 | 1,045,250 | ||||
University of California Revenue | ||||||
5.00% 5/15/33 (FSA) | 2,000,000 | 2,125,300 | ||||
14,125,090 | ||||||
Electric Revenue Bonds – 1.72% | ||||||
Puerto Rico Electric Power | ||||||
Authority Revenue Series OO | ||||||
5.00% 7/1/13 (CIFG) | 1,000,000 | 1,075,470 | ||||
Roseville National Gas Financing | ||||||
Authority Revenue | ||||||
5.00% 2/15/28 | 750,000 | 835,868 | ||||
1,911,338 |
8
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Health Care Revenue Bonds – 11.17% | ||||||
Abag Finance Authority of | ||||||
California (Nonprofit | ||||||
Corporations - San Diego | ||||||
Hospital Association) | ||||||
Series A 6.125% 8/15/20 | $ | 1,250,000 | $ | 1,357,138 | ||
California Health Facilities | ||||||
Financing Authority Revenue | ||||||
(Catholic Healthcare West) | ||||||
Series G 5.25% 7/1/23 | 1,000,000 | 1,066,010 | ||||
(Naveda - Methodist) | ||||||
5.00% 7/1/36 | 1,075,000 | 1,126,847 | ||||
(The Episcopal Home) Series A | ||||||
5.30% 2/1/32 (RADIAN) | 2,000,000 | 2,094,820 | ||||
California Infrastructure & | ||||||
Economic Development Bank | ||||||
Revenue (Kaiser Hospital | ||||||
Associates I, LLC) | ||||||
Series A 5.55% 8/1/31 | 1,000,000 | 1,065,620 | ||||
California Statewide Communities | ||||||
Development Authority | ||||||
Revenue | ||||||
(Health Facilities - Adventist | ||||||
Health) Series A 5.00% 3/1/35 | 2,000,000 | 2,079,560 | ||||
(Kaiser Permenante) | ||||||
5.25% 3/1/45 | 1,500,000 | 1,600,305 | ||||
Series B 4.371% 4/1/36 | 1,000,000 | 1,001,500 | ||||
(Presbyterian Homes) Series A | ||||||
4.875% 11/15/36 | 1,000,000 | 1,021,670 | ||||
12,413,470 | ||||||
Housing Revenue Bonds – 7.36% | ||||||
California State Department of | ||||||
Veteran Affairs Home Purpose | ||||||
Revenue Series A | ||||||
4.60% 12/1/28 | 2,000,000 | 2,023,260 | ||||
California Statewide Communities | ||||||
Development Authority | ||||||
Multifamily Housing Revenue | ||||||
(Citrus Gardens Apartments) | ||||||
Series D1 5.375% 7/1/32 | 1,800,000 | 1,877,994 | ||||
•(Silver Ridge Apartments) | ||||||
Series H 5.80% 8/1/33 | ||||||
(FNMA) (AMT) | 1,000,000 | 1,063,610 | ||||
Palm Springs Mobile Home Park | ||||||
Revenue (Sahara Mobile Home | ||||||
Park) Series A | ||||||
5.75% 5/15/37 | 1,000,000 | 1,067,270 | ||||
Santa Clara County Multifamily | ||||||
Housing Authority Revenue | ||||||
(Rivertown Apartments | ||||||
Project) Series A | ||||||
5.85% 8/1/31 (AMT) | 1,000,000 | 1,064,160 | ||||
Ventura County Area Multifamily | ||||||
Housing Authority Revenue | ||||||
(Glen Oaks Apartments) | ||||||
Series A 6.35% 7/20/34 (GNMA) | 990,000 | 1,089,020 | ||||
8,185,314 | ||||||
Lease Revenue Bonds – 7.18% | ||||||
California State Public Works | ||||||
Board Lease Revenue | ||||||
(Department of Corrections) | ||||||
Series A 5.00% 3/1/27 (AMBAC) | 1,000,000 | 1,045,670 | ||||
Series C 5.25% 6/1/28 | 1,500,000 | 1,603,110 | ||||
(Department of General | ||||||
Services - Butterfield) Series A | ||||||
5.25% 6/1/30 | 1,000,000 | 1,077,270 | ||||
Franklin-McKinley School District | ||||||
Certificates of Participation | ||||||
(Financing Project) Series B | ||||||
5.00% 9/1/27 (AMBAC) | 1,060,000 | 1,119,901 | ||||
San Diego County Certificates of | ||||||
Participation | ||||||
5.75% 7/1/31 (MBIA) | 1,000,000 | 1,078,560 | ||||
San Juan Basin Authority (Ground | ||||||
Water Recovery Project) | ||||||
5.00% 12/1/34 (AMBAC) | 1,000,000 | 1,048,090 | ||||
Stockton Unified School District | ||||||
Certificates of Participation | ||||||
(Capital Projects) | ||||||
4.50% 2/1/36 (AMBAC) | 1,000,000 | 1,008,340 | ||||
7,980,941 | ||||||
Local General Obligation Bonds – 18.08% | ||||||
^Anaheim School District Election | ||||||
2002 4.58% 8/1/25 (MBIA) | 1,250,000 | 562,213 | ||||
Commerce Joint Powers | ||||||
Financing Authority Revenue | ||||||
(Redevelopment Projects) | ||||||
Series A | ||||||
5.00% 8/1/28 (RADIAN) | 1,000,000 | 1,040,890 | ||||
Culver City Redevelopment Agency | ||||||
(Tax Allocation Redevelopment | ||||||
Project) Series A | ||||||
5.00% 11/1/25 (AMBAC) | 1,000,000 | 1,064,450 | ||||
Fairfield-Suisun Unified School | ||||||
District Election 2002 | ||||||
5.50% 8/1/28 (MBIA) | 500,000 | 554,695 | ||||
Fremont Community Facilities | ||||||
District #1 (Special Tax Pacific | ||||||
Commons) 5.375% 9/1/36 | 1,000,000 | 1,037,300 | ||||
Jurupa Community Services | ||||||
Special Tax Community | ||||||
Facilities District #19-Eastvale | ||||||
5.00% 9/1/36 | 500,000 | 508,135 | ||||
La Quinta Redevelopment Agency | ||||||
(Tax Allocation Redevelopment | ||||||
Project Area #1) | ||||||
Series A 5.10% 9/1/31 (AMBAC) | 2,000,000 | 2,121,760 | ||||
Lake Elsinore Public Financing | ||||||
Authority Tax Allocation Series A | ||||||
5.50% 9/1/30 | 1,000,000 | 1,036,540 |
(continues) 9
Statements of net assets
Delaware Tax-Free California Fund
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Local General Obligation Bonds (continued) | ||||||
Lammersville School District | ||||||
Special Tax Community | ||||||
Facilities District #2002 | ||||||
(Mountain House) | ||||||
5.125% 9/1/35 | $ | 500,000 | $ | 516,725 | ||
Lawndale Elementary School | ||||||
District 5.00% 8/1/32 (FSA) | 1,000,000 | 1,048,750 | ||||
Los Angeles Unified School District | ||||||
Series A-2 4.25% 1/1/28 (FGIC) | 1,000,000 | 997,890 | ||||
Modesto Special Tax Community | ||||||
Facilities District #04-1 Village 2 | ||||||
5.15% 9/1/36 | 1,000,000 | 1,027,620 | ||||
Poway Unified School District | ||||||
Community Facilities | ||||||
District #6 5.60% 9/1/33 | 1,000,000 | 1,037,950 | ||||
District #14 5.25% 9/1/36 | 1,000,000 | 1,032,100 | ||||
Riverside County Redevelopment | ||||||
Agency Tax Allocation | ||||||
(Jurupa Valley Project) | ||||||
5.25% 10/1/35 (AMBAC) | 1,590,000 | 1,707,406 | ||||
Roseville Westpark Special Tax | ||||||
Public Community Facilities | ||||||
District #1 5.25% 9/1/37 | 500,000 | 515,795 | ||||
San Bernardino County Special | ||||||
Tax Community Facilities | ||||||
District #2002-1 5.90% 9/1/33 | 2,000,000 | 2,141,699 | ||||
San Diego Unified School District | ||||||
Series E 5.00% 7/1/28 (FSA) | 2,000,000 | 2,146,259 | ||||
20,098,177 | ||||||
§Pre-Refunded Bonds – 15.03% | ||||||
California Educational Facilities | ||||||
Authority Revenue | ||||||
(Pepperdine University) Series A | ||||||
5.50% 8/1/32-09 | 1,000,000 | 1,044,950 | ||||
(University of the Pacific) | ||||||
5.75% 11/1/30-10 (MBIA) | 690,000 | 743,185 | ||||
California State Department | ||||||
Water Reserve Power Supply | ||||||
Revenue Series A | ||||||
5.375% 5/1/21-12 | 2,000,000 | 2,188,239 | ||||
Golden State Tobacco | ||||||
Securitization Corporation | ||||||
5.50% 6/1/43-13 (RADIAN) | 1,000,000 | 1,099,970 | ||||
5.625% 6/1/33-13 | 1,000,000 | 1,106,900 | ||||
Oakland Industrial Revenue | ||||||
(Harrison Foundation) Series B | ||||||
6.00% 1/1/29-10 (AMBAC) | 1,300,000 | 1,388,023 | ||||
Poway Redevelopment Agency | ||||||
Tax Allocation | ||||||
5.75% 6/15/33-10 (MBIA) | 1,400,000 | 1,523,508 | ||||
Puerto Rico Commonwealth | ||||||
Highway & Transportation | ||||||
Authority Revenue Series K | ||||||
5.00% 7/1/35-15 | 1,750,000 | 1,908,638 | ||||
5.00% 7/1/45-15 | 1,500,000 | 1,635,975 | ||||
San Diego County Certificates of | ||||||
Participation (The Burnham | ||||||
Institute) 6.25% 9/1/29-09 | 1,000,000 | 1,072,610 | ||||
San Francisco Bay Area Rapid | ||||||
Transit District Sales Tax Revenue | ||||||
5.125% 7/1/36-11 (AMBAC) | 740,000 | 787,242 | ||||
Sequoia Unified High School | ||||||
District Election 2001 | ||||||
5.125% 7/1/31-11 (FSA) | 1,000,000 | 1,081,030 | ||||
Southern California Logistics | ||||||
Airport Authority Tax | ||||||
Allocation 6.50% 12/1/31-11 | 1,000,000 | 1,131,530 | ||||
16,711,800 | ||||||
Resource Recovery Revenue Bonds – 3.80% | ||||||
Salinas Valley Solid Waste | ||||||
Authority Revenue | ||||||
5.25% 8/1/27 (AMBAC) (AMT) | 2,000,000 | 2,112,780 | ||||
5.25% 8/1/31 (AMBAC) (AMT) | 2,000,000 | 2,108,800 | ||||
4,221,580 | ||||||
Special Tax Revenue Bonds – 2.17% | ||||||
Palm Drive Health Care District | ||||||
Parcel Tax Revenue | ||||||
5.25% 4/1/30 | 2,000,000 | 2,145,060 | ||||
San Francisco Bay Area Rapid | ||||||
Transit District Sales Tax | ||||||
Revenue | ||||||
5.125% 7/1/36 (AMBAC) | 260,000 | 272,067 | ||||
2,417,127 | ||||||
State General Obligation Bonds – 7.37% | ||||||
California State | ||||||
5.00% 2/1/33 | 1,000,000 | 1,051,600 | ||||
5.50% 11/1/33 | 2,000,000 | 2,187,580 | ||||
California State Variable Purposes | ||||||
5.00% 6/1/31 | 1,000,000 | 1,061,370 | ||||
5.00% 8/1/35 | 1,000,000 | 1,060,980 | ||||
California State Veterans Series B | ||||||
5.70% 12/1/32 (AMT) | 640,000 | 653,523 | ||||
Puerto Rico Government | ||||||
Development Bank Senior | ||||||
Notes Series B 5.00% 12/1/14 | 1,000,000 | 1,072,760 | ||||
Puerto Rico Public Buildings | ||||||
Authority Revenue | ||||||
(Guaranteed Government | ||||||
Facility) Series I | ||||||
5.50% 7/1/23 | 1,000,000 | 1,102,240 | ||||
8,190,053 | ||||||
Transportation Revenue Bonds – 4.74% | ||||||
Bay Area Toll Authority Revenue | ||||||
5.00% 4/1/31 | 1,000,000 | 1,076,740 | ||||
Port of Oakland Revenue Series L | ||||||
5.375% 11/1/27 (FGIC) (AMT) | 1,000,000 | 1,066,780 |
10
Principal | ||||||||
Amount | Value | |||||||
Municipal Bonds (continued) | ||||||||
Transportation Revenue Bonds (continued) | ||||||||
Sacramento County Airport | ||||||||
System Revenue Series A | ||||||||
5.00% 7/1/32 (FSA) | $ | 1,000,000 | $ | 1,045,660 | ||||
San Diego Redevelopment Agency | ||||||||
(Centre City Redevelopment | ||||||||
Project) Series A | ||||||||
6.40% 9/1/25 | 1,000,000 | 1,049,330 | ||||||
San Jose Airport Revenue Series A | ||||||||
5.00% 3/1/31 (FGIC) | 1,000,000 | 1,035,380 | ||||||
5,273,890 | ||||||||
Water & Sewer Revenue Bonds – 6.79% | ||||||||
Banning Utilities Authority Water | ||||||||
Enterprise Revenue | ||||||||
5.25% 11/1/35 (FGIC) | 1,000,000 | 1,104,910 | ||||||
California State Department of | ||||||||
Water Resources Systems | ||||||||
Revenue (Central Valley | ||||||||
Project) Series X | ||||||||
5.00% 12/1/29 (FGIC) | 1,000,000 | 1,054,080 | ||||||
Clovis Public Financing Authority | ||||||||
Wastewater Revenue | ||||||||
5.25% 8/1/30 (MBIA) | 1,000,000 | 1,094,240 | ||||||
Metropolitan Water District | ||||||||
Southern California | ||||||||
Waterworks Authority | ||||||||
Revenue | ||||||||
Series B-1 5.00% 10/1/36 | ||||||||
(FGIC) | 1,000,000 | 1,058,000 | ||||||
Series C 5.00% 7/1/35 | 2,000,000 | 2,153,720 | ||||||
Sacramento County Sanitation | ||||||||
District Financing Authority | ||||||||
Revenue | ||||||||
5.00% 12/1/36 (FGIC) | 1,000,000 | 1,077,080 | ||||||
7,542,030 | ||||||||
Total Municipal Bonds | ||||||||
(cost $103,308,090) | 109,070,810 | |||||||
Short-Term Investments – 0.90% | ||||||||
•Variable Rate Demand Notes – 0.90% | ||||||||
Los Angeles Water & Power Revenue | ||||||||
Series B-1 3.55% 7/1/34 | 1,000,000 | 1,000,000 | ||||||
Total Short-Term Investments | ||||||||
(cost $1,000,000) | 1,000,000 | |||||||
Total Value of Securities – 99.02% | ||||||||
(cost $104,308,090) | 110,070,810 | |||||||
Receivables and Other Assets | ||||||||
Net of Liabilities – 0.98% | 1,085,646 | |||||||
Net Assets Applicable to 9,626,442 | ||||||||
Shares Outstanding – 100.00% | $ | 111,156,456 | ||||||
Net Asset Value – Delaware Tax-Free California Fund | ||||||||
Class A ($84,250,011 / 7,300,806 Shares) | $11.54 | |||||||
Net Asset Value – Delaware Tax-Free California Fund | ||||||||
Class B ($12,489,272 / 1,078,073 Shares) | $11.58 | |||||||
Net Asset Value – Delaware Tax-Free California Fund | ||||||||
Class C ($14,417,173 / 1,247,563 Shares) | $11.56 | |||||||
Components of Net Assets at February 28, 2007: | �� | |||||||
Shares of beneficial interest | ||||||||
(unlimited authorization – no par) | $ | 106,060,149 | ||||||
Undistributed net investment income | 1,300 | |||||||
Accumulated net realized loss on investments | (667,713 | ) | ||||||
Net unrealized appreciation of investments | 5,762,720 | |||||||
Total net assets | $ | 111,156,456 |
^ | Zero coupon security. The rate shown is the yield at the time of purchase. |
§ | Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S. Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to Financial Statements.” |
• | Variable rate security. The rate shown is the rate as of February 28, 2007. |
Summary of Abbreviations: ACA — Insured by American Capital Access AMBAC — Insured by the AMBAC Assurance Corporation AMT — Subject to Alternative Minimum Tax CIFG — CDC IXIS Financial Guaranty FGIC — Insured by the Financial Guaranty Insurance Company FNMA — Insured by Federal National Mortgage Association FSA — Insured by Financial Security Assurance GNMA — Insured by Government National Mortgage Association MBIA — Insured by the Municipal Bond Insurance Association RADIAN — Insured by Radian Asset Assurance | |
Net Asset Value and Offering Price Per Share – | |
Delaware Tax-Free California Fund | |
Net asset value Class A (A) | $11.54 |
Sales charge (4.50% of offering price) (B) | 0.54 |
Offering price | $12.08 |
(A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. | |
(B) | See the current prospectus for purchases of $100,000 or more. |
See accompanying notes
(continues) 11
Statements of net assets
Delaware Tax-Free Colorado Fund
February 28, 2007 (Unaudited)
Principal | ||||||
Amount | Value | |||||
Municipal Bonds – 98.27% | ||||||
Education Revenue Bonds – 15.03% | ||||||
Boulder County Development | ||||||
Revenue (University | ||||||
Corporation for Atmospheric | ||||||
Research) | ||||||
5.00% 9/1/33 (MBIA) | $ | 1,000,000 | $ | 1,050,010 | ||
5.00% 9/1/35 (AMBAC) | 2,000,000 | 2,114,780 | ||||
Colorado Educational & Cultural | ||||||
Facilities Authority Revenue | ||||||
(Charter School Project) | ||||||
5.50% 5/1/36 (XLCA) | 2,280,000 | 2,498,059 | ||||
(Johnson & Wales University | ||||||
Project) Series A | ||||||
5.00% 4/1/28 (XLCA) | 1,000,000 | 1,050,520 | ||||
(Liberty Common Charter | ||||||
School Project) | ||||||
5.125% 12/1/33 (XLCA) | 2,740,000 | 2,902,153 | ||||
(Montessori Districts Charter | ||||||
School Projects) Series A | ||||||
6.125% 7/15/32 | 5,590,000 | 5,833,612 | ||||
(Pinnacle Charter School | ||||||
Project) 5.00% 6/1/33 (XLCA) | 2,170,000 | 2,272,446 | ||||
(Regis University Project) | ||||||
5.00% 6/1/22 (RADIAN) | 1,820,000 | 1,914,240 | ||||
(Renaissance Charter School | ||||||
Project) 6.75% 6/1/29 | 2,000,000 | 1,964,720 | ||||
(University of Northern Colorado | ||||||
Student Housing Project) Series A | ||||||
5.125% 7/1/37 (MBIA) | 7,500,000 | 7,823,700 | ||||
(Woodrow Wilson Charter | ||||||
School Project) Series A | ||||||
5.25% 12/1/34 (XLCA) | 1,960,000 | 2,128,090 | ||||
Colorado School Mines Auxiliary | ||||||
Facilities Revenue | ||||||
5.00% 12/1/37 (AMBAC) | 3,130,000 | 3,292,666 | ||||
Colorado State Board of | ||||||
Governors University Enterprise | ||||||
System Revenue | ||||||
Series B 5.00% 3/1/35 (AMBAC) | 2,000,000 | 2,106,960 | ||||
University of Colorado Enterprise | ||||||
System Revenue Series A | ||||||
5.375% 6/1/26 | 1,000,000 | 1,054,080 | ||||
University of Puerto Rico Revenue | ||||||
Series Q 5.00% 6/1/36 | 3,750,000 | 3,973,500 | ||||
41,979,536 | ||||||
Electric Revenue Bonds – 1.86% | ||||||
Colorado Springs Utilities Revenue | ||||||
Series A 5.00% 11/15/29 | 5,000,000 | 5,198,400 | ||||
5,198,400 | ||||||
Escrowed to Maturity Bonds – 2.17% | ||||||
Colorado Health Facilities | ||||||
Authority Revenue (Catholic | ||||||
Health Initiatives) Series A | ||||||
5.50% 3/1/32 | 5,000,000 | 5,389,050 | ||||
Galleria Metropolitan District | ||||||
7.25% 12/1/09 | 645,000 | 674,535 | ||||
6,063,585 | ||||||
Health Care Revenue Bond – 14.40% | ||||||
Colorado Health Facilities | ||||||
Authority Revenue | ||||||
•(Adventist Health Project) | ||||||
Series D 5.25% 11/15/35 | 4,000,000 | 4,277,560 | ||||
(Catholic Health Initiatives) | ||||||
Series A 4.75% 9/1/40 | 3,000,000 | 3,062,160 | ||||
(Christian Living Community | ||||||
Project) Series A 5.75% 1/1/37 | 1,500,000 | 1,579,455 | ||||
(Covenant Retirement | ||||||
Communities) Series A | ||||||
5.50% 12/1/33 (RADIAN) | 5,000,000 | 5,359,450 | ||||
(Evangelical Lutheran) | ||||||
5.00% 6/1/35 | 2,000,000 | 2,083,360 | ||||
Series A 5.25% 6/1/34 | 2,750,000 | 2,887,610 | ||||
(Parkview Medical Center) | ||||||
5.00% 9/1/25 | 1,000,000 | 1,049,800 | ||||
(Porter Place) Series A | ||||||
6.00% 1/20/36 (GNMA) | 5,000,000 | 5,310,900 | ||||
(Vail Valley Medical Center | ||||||
Project) 5.80% 1/15/27 | 3,475,000 | 3,701,779 | ||||
Delta County Memorial Hospital | ||||||
District Enterprise Revenue | ||||||
5.35% 9/1/17 | 4,000,000 | 4,172,160 | ||||
Denver Health & Hospital Authority | ||||||
Healthcare Revenue Series A | ||||||
5.375% 12/1/28 (ACA) | 2,770,000 | 2,851,604 | ||||
Mesa County Residential Care | ||||||
Facilities Mortgage Revenue | ||||||
(Hilltop Community Resources) | ||||||
Series A 5.375% 12/1/28 | ||||||
(RADIAN) | 2,000,000 | 2,124,240 | ||||
University of Colorado Hospital | ||||||
Authority Revenue Series A | ||||||
5.00% 11/15/37 | 1,690,000 | 1,746,598 | ||||
40,206,676 | ||||||
Housing Revenue Bonds – 3.56% | ||||||
Colorado Housing & Finance | ||||||
Authority Revenue (Multifamily | ||||||
Housing Insured Mortgage) | ||||||
Series A-3 6.25% 10/1/26 (FHA) | 400,000 | 409,120 | ||||
Series C-3 6.15% 10/1/41 | 1,590,000 | 1,653,664 | ||||
Denver City & County Multifamily | ||||||
Federal Housing Authority | ||||||
Revenue (Insured Mortgage | ||||||
Loan - Garden Court) | ||||||
5.40% 7/1/39 (FHA) | 2,000,000 | 2,055,580 | ||||
Englewood Multifamily Housing | ||||||
Revenue (Marks Apartments | ||||||
Project) 6.65% 12/1/26 | 5,700,000 | 5,822,037 | ||||
9,940,401 |
12
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Lease Revenue Bonds – 5.30% | |||||
Colorado Educational & Cultural | |||||
National Conference of State | |||||
Legislatures Office Building | |||||
Facilities Authority Revenue | |||||
5.25% 6/1/21 | $ | 2,000,000 | $ | 2,091,280 | |
Conejos & Alamosa Counties | |||||
School District #11J | |||||
Certificates of Participation | |||||
6.50% 4/1/11 | 955,000 | 956,270 | |||
Denver Convention Center Hotel | |||||
Authority Revenue Series A | |||||
5.00% 12/1/35 (XLCA) | 3,000,000 | 3,192,720 | |||
El Paso County Certificates of | |||||
Participation | |||||
(Detention Facilities Project) | |||||
Series B | |||||
5.00% 12/1/27 (AMBAC) | 1,500,000 | 1,572,060 | |||
(Judicial Building Project) Series A | |||||
5.00% 12/1/27 (AMBAC) | 2,000,000 | 2,096,080 | |||
Fremont County Certificates of | |||||
Participation Refunding & | |||||
Improvement Series A | |||||
5.25% 12/15/24 (MBIA) | 3,045,000 | 3,272,218 | |||
Puerto Rico Public Buildings | |||||
Authority Revenue | |||||
(Guaranteed Government | |||||
Facilities) Series I 5.25% 7/1/33 | 1,500,000 | 1,610,790 | |||
14,791,418 | |||||
Local General Obligation Bonds – 16.31% | |||||
Adams County School District #14 | |||||
5.125% 12/1/31 (FSA) | 1,500,000 | 1,633,620 | |||
Arapahoe County Water | |||||
& Wastewater Public | |||||
Improvement District | |||||
Refunding Series A | |||||
5.125% 12/1/32 (MBIA) | 4,500,000 | 4,762,530 | |||
Bowles Metropolitan District | |||||
5.00% 12/1/33 (FSA) | 2,500,000 | 2,640,550 | |||
Denver West Metropolitan District | |||||
5.00% 12/1/33 (RADIAN) | 4,000,000 | 4,161,280 | |||
Douglas County School District #1 | |||||
Building (Douglas & Elbert | |||||
Counties) Series B | |||||
5.125% 12/15/25 (FSA) | 2,000,000 | 2,128,800 | |||
Eagle Bend Metropolitan District #2 | |||||
5.00% 12/1/35 (RADIAN) | 3,000,000 | 3,141,690 | |||
El Paso County School District #2 | |||||
(Harrison) | |||||
5.00% 12/1/27 (MBIA) | 2,115,000 | 2,224,917 | |||
Garfield County School District #2 | |||||
5.00% 12/1/25 (FSA) | 3,280,000 | 3,531,839 | |||
La Plata County School District #9-R | |||||
(Durango) | |||||
5.125% 11/1/24 (MBIA) | 1,000,000 | 1,070,540 | |||
Lincoln Park Metropolitan District | |||||
7.75% 12/1/26 | 2,500,000 | 2,734,125 | |||
Loveland Special Improvements | |||||
District #1 7.50% 7/1/29 | 5,540,000 | 5,562,271 | |||
Meridian Metropolitan District | |||||
Series A 5.00% 12/1/31 | |||||
(RADIAN) | 7,000,000 | 7,206,849 | |||
North Range Metropolitan District #1 | |||||
4.50% 12/15/31(ACA) | 1,500,000 | 1,495,470 | |||
Saddle Rock Colorado | |||||
Metropolitan District | |||||
5.35% 12/1/31 (RADIAN) | 1,580,000 | 1,657,041 | |||
Sand Creek Metropolitan District | |||||
Refunding & Improvement | |||||
5.00% 12/1/31 (XLCA) | 500,000 | 526,145 | |||
Vista Ridge Metropolitan District | |||||
Refunding & Improvement | |||||
(Limited Tax) Series A | |||||
5.125% 12/1/40 (RADIAN) | 1,000,000 | 1,059,880 | |||
45,537,547 | |||||
§Pre-Refunded Bonds – 22.64% | |||||
Aurora Certificates of Participation | |||||
5.50% 12/1/30-10 (AMBAC) | 8,000,000 | 8,507,679 | |||
Boulder County Hospital Revenue | |||||
(Development Longmont | |||||
United Hospital Project) | |||||
5.60% 12/1/27-07 (RADIAN) | 1,250,000 | 1,278,450 | |||
6.00% 12/1/30-10 (RADIAN) | 5,000,000 | 5,400,649 | |||
Burlingame Multifamily Housing | |||||
Revenue Series A | |||||
6.00% 11/1/29-09 (MBIA) | 1,250,000 | 1,335,325 | |||
Colorado Educational & Cultural | |||||
Facilities Authority Revenue | |||||
(Core Knowledge Charter | |||||
School Project) | |||||
7.00% 11/1/29-09 | 1,000,000 | 1,083,380 | |||
(Littleton Academy Charter | |||||
School Project) | |||||
6.125% 1/15/31-12 | 2,000,000 | 2,212,300 | |||
(Pinnacle Charter School | |||||
Project) 6.00% 12/1/21-11 | 1,750,000 | 1,922,813 | |||
(Stargate Charter School | |||||
Project) 6.125% 5/1/33-13 | 2,000,000 | 2,262,480 | |||
(University of Denver Project) | |||||
5.375% 3/1/23-11 (AMBAC) | 2,000,000 | 2,127,940 | |||
Series A 5.00% 3/1/27-12 | |||||
(MBIA) | 5,000,000 | 5,295,850 | |||
Series B 5.25% 3/1/35-16 | |||||
(FGIC) | 1,750,000 | 1,948,398 | |||
Colorado Springs Revenue | |||||
(Colorado College Project) | |||||
5.375% 6/1/32-09 | 2,570,000 | 2,690,225 | |||
E-470 Public Highway Authority | |||||
Revenue Series A | |||||
5.75% 9/1/35-10 (MBIA) | 3,100,000 | 3,364,492 |
(continues) 13
Statements of net assets
Delaware Tax-Free Colorado Fund
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
§Pre-Refunded Bonds (continued) | ||||||
El Paso County School District #49 | ||||||
(Falcon) | ||||||
5.50% 12/1/21-11 (FGIC) | $ | 3,580,000 | $ | 3,867,510 | ||
Fremont County School District #1 | ||||||
(Canon City) | ||||||
5.00% 12/1/24-13 (MBIA) | 1,735,000 | 1,872,447 | ||||
Garfield Pitkin & Eagle County | ||||||
School District #1 (Roaring | ||||||
Fork) Series A | ||||||
5.00% 12/15/27-14 (FSA) | 1,500,000 | 1,633,710 | ||||
Greeley Building Authority | ||||||
Certificates of Participation | ||||||
(Golf Course Lease Purchase) | ||||||
6.10% 8/15/16-07 | 2,600,000 | 2,629,250 | ||||
North Range Metropolitan District #1 | ||||||
7.25% 12/15/31-11 | 3,390,000 | 3,855,989 | ||||
Pueblo County Certificates of | ||||||
Participation 6.50% 12/1/24-10 | 5,460,000 | 5,992,458 | ||||
University of Colorado Hospital | ||||||
Authority Revenue Series A | ||||||
5.60% 11/15/31-11 | 3,650,000 | 3,930,065 | ||||
63,211,410 | ||||||
Special Tax Revenue Bonds – 2.72% | ||||||
Gypsum Sales Tax & General | ||||||
Funding Revenue 5.25% 6/1/30 | 2,690,000 | 2,941,165 | ||||
Puerto Rico Commonwealth | ||||||
Infrastructure Financing | ||||||
Authority Revenue Series B | ||||||
5.00% 7/1/46 | 1,200,000 | 1,266,264 | ||||
South Suburban Park & Recreation | ||||||
District (Golf Course & Ice | ||||||
Arena Facility) 6.00% 11/1/15 | 2,330,000 | 2,356,492 | ||||
Westminster Golf Course | ||||||
5.55% 12/1/23 (RADIAN) | 1,000,000 | 1,033,840 | ||||
7,597,761 | ||||||
State General Obligation Bonds – 3.64% | ||||||
Puerto Rico Commonwealth | ||||||
Series A 5.25% 7/1/30 | 2,000,000 | 2,177,700 | ||||
Series B 5.00% 7/1/35 | 500,000 | 530,025 | ||||
Puerto Rico Commonwealth | ||||||
Government Development | ||||||
Bank Senior Notes | ||||||
Series B 5.00% 12/1/14 | 1,000,000 | 1,072,760 | ||||
Puerto Rico Commonwealth | ||||||
Public Improvement Series A | ||||||
5.25% 7/1/21 | 4,000,000 | 4,290,120 | ||||
Virgin Islands Public Finance | ||||||
Authority (Gross Receipts | ||||||
Taxes) 5.00% 10/1/31 (ACA) | 2,000,000 | 2,095,060 | ||||
10,165,665 | ||||||
Transportation Revenue Bonds – 9.53% | ||||||
Denver City & County | ||||||
Airport Revenue | ||||||
Series A 5.00% 11/15/25 (FGIC) | 2,000,000 | 2,155,380 | ||||
Series B 5.00% 11/15/33 (XLCA) | 4,000,000 | 4,208,000 | ||||
Series E 5.25% 11/15/23 (MBIA) | 8,250,000 | 8,409,143 | ||||
Northwest Parkway Public | ||||||
Highway Authority Series A | ||||||
5.25% 6/15/41 (FSA) | 11,100,000 | 11,824,830 | ||||
26,597,353 | ||||||
Water & Sewer Revenue Bonds – 1.11% | ||||||
Ute Utility Water Conservancy | ||||||
District Revenue | ||||||
5.75% 6/15/20 (MBIA) | 2,900,000 | 3,106,132 | ||||
3,106,132 | ||||||
Total Municipal Bonds | ||||||
(cost $257,329,222) | 274,395,884 | |||||
Short-Term Investments – 0.68% | ||||||
•Variable Rate Demand Notes – 0.68% | ||||||
Colorado Springs Revenue | ||||||
(Colorado College Project) | ||||||
3.67% 6/1/29 | ||||||
(SPA – JPMorgan Chase) | 200,000 | 200,000 | ||||
Colorado Housing & Finance | ||||||
Authority Class I AA3 | ||||||
3.53% 5/1/36 | ||||||
(SPA – Landesbank Hessen) | 700,000 | 700,000 | ||||
Platte River Power Authority | ||||||
Electric Revenue Subordinate | ||||||
Lien Series S-1 3.51% 6/1/18 | ||||||
(SPA – Morgan Guaranty Trust) | 1,000,000 | 1,000,000 | ||||
Total Short-Term Investments | ||||||
(cost $1,900,000) | 1,900,000 | |||||
Total Value of Securities – 98.95% | ||||||
(cost $259,229,222) | 276,295,884 | |||||
Receivables and Other Assets | ||||||
Net of Liabilities – 1.05% | 2,921,915 | |||||
Net Assets Applicable to 25,098,719 | ||||||
Shares Outstanding – 100.00% | $ | 279,217,799 | ||||
Net Asset Value – Delaware Tax-Free Colorado Fund | ||||||
Class A ($262,342,050 / 23,583,975 Shares) | $11.12 | |||||
Net Asset Value – Delaware Tax-Free Colorado Fund | ||||||
Class B ($6,665,098 / 598,788 Shares) | $11.13 | |||||
Net Asset Value – Delaware Tax-Free Colorado Fund | ||||||
Class C ($10,210,651 / 915,956 Shares) | $11.15 |
14
Components of Net Assets at February 28, 2007: | |||
Shares of beneficial interest | |||
(unlimited authorization – no par) | $270,360,412 | ||
Accumulated net realized loss on investments | (8,209,275 | ) | |
Net unrealized appreciation of investments | 17,066,662 | ||
Total net assets | $279,217,799 | ||
§Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S. Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to Financial Statements.” | |||
•Variable rate security. The rate shown is the rate as of February 28, 2007. | |||
Summary of Abbreviations: | |||
ACA — Insured by American Capital Access AMBAC — Insured by the AMBAC Assurance Corporation FGIC — Insured by the Financial Guaranty Insurance Company FHA — Insured by the Federal Housing Administration FSA — Insured by Financial Security Assurance GNMA — Insured by Government National Mortgage Association MBIA — Insured by the Municipal Bond Insurance Association RADIAN — Insured by Radian Asset Assurance SPA — Stand-by Purchase Agreement XLCA — Insured by XL Capital Assurance | |||
Net Asset Value and Offering Price Per Share – | |||
Delaware Tax-Free Colorado Fund | |||
Net asset value Class A (A) | $11.12 | ||
Sales charge (4.50% of offering price) (B) | 0.52 | ||
Offering price | $11.64 |
(A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. | |
(B) | See the current prospectus for purchases of $100,000 or more. |
See accompanying notes
Delaware Tax-Free Idaho Fund | |||||
February 28, 2007 (Unaudited) | |||||
Principal | |||||
Amount | Value | ||||
Municipal Bonds – 97.36% | |||||
Corporate-Backed Revenue Bonds – 7.51% | |||||
Meridian Economic Development | |||||
Corporation Revenue | |||||
(Hi-Micro Project) | |||||
5.85% 8/15/11 (AMT) | $ | 1,250,000 | $ | 1,251,613 | |
Nez Perce County Pollution | |||||
Control Revenue (Potlatch | |||||
Corporation Project) | |||||
6.00% 10/1/24 | 2,535,000 | 2,580,909 | |||
Power County Pollution Control | |||||
Revenue (FMC Corporation | |||||
Project) 5.625% 10/1/14 | 2,475,000 | 2,541,899 | |||
6,374,421 | |||||
Education Revenue Bonds – 14.95% | |||||
Boise State University Revenue | |||||
5.00% 4/1/17 (AMBAC) | 500,000 | 532,340 | |||
5.00% 4/1/18 (FGIC) | 1,500,000 | 1,617,015 | |||
5.375% 4/1/22 (FGIC) | 15,000 | 16,048 | |||
Series A 4.25% 4/1/32 (MBIA) | 2,250,000 | 2,234,475 | |||
Idaho State University Revenue | |||||
Refunding & Improvement | |||||
5.00% 4/1/20 (FSA) | 1,130,000 | 1,204,038 | |||
5.00% 4/1/23 (FSA) | 2,115,000 | 2,246,468 | |||
North Idaho College Dormitory | |||||
Housing Certificate of | |||||
Participation 6.45% 10/1/16 | 1,000,000 | 1,012,220 | |||
University of Idaho Revenue | |||||
Series A 5.00% 4/1/21 (AMBAC) | 1,150,000 | 1,245,738 | |||
(Student Fee-Housing | |||||
Improvements Project) | |||||
5.25% 4/1/31 (FGIC) | 2,195,000 | 2,305,145 | |||
University of Puerto Rico Revenue | |||||
Series Q 5.00% 6/1/36 | 250,000 | 264,900 | |||
12,678,387 | |||||
Electric Revenue Bonds – 1.88% | |||||
Puerto Rico Electric Power | |||||
Authority Revenue | |||||
Series II 5.25% 7/1/31 | 1,000,000 | 1,063,900 | |||
Series NN 5.125% 7/1/29 | 500,000 | 528,195 | |||
1,592,095 | |||||
Escrowed to Maturity Bonds – 2.20% | |||||
Puerto Rico Commonwealth | |||||
Infrastructure Financing | |||||
Authority Revenue Series A | |||||
5.375% 10/1/24 | 1,750,000 | 1,871,870 | |||
1,871,870 | |||||
Health Care Revenue Bonds – 4.39% | |||||
Idaho Health Facilities Authority | |||||
Hospital Revenue | |||||
(Idaho Elks Rehabilitation | |||||
Hospital Project) | |||||
5.30% 7/15/18 | 625,000 | 638,131 | |||
5.45% 7/15/23 | 2,000,000 | 2,044,100 | |||
(Portneuf Medical Center Project) | |||||
Series A 5.00% 9/1/35 (RADIAN) | 1,000,000 | 1,043,900 | |||
3,726,131 |
(continues) 15
Statements of net assets
Delaware Tax-Free Idaho Fund
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Housing Revenue Bonds – 7.94% | |||||
Idaho Housing & Finance | |||||
Association Single Family | |||||
Mortgage | |||||
Series A Class III | |||||
4.875% 7/1/26 (AMT) | $ | 1,000,000 | $ | 1,020,180 | |
Series B Class I | |||||
5.00% 7/1/37 (AMT) | 1,000,000 | 1,029,010 | |||
Series C Class III | |||||
5.35% 1/1/25 (AMT) | 330,000 | 341,821 | |||
Series D Class III | |||||
5.45% 7/1/23 (AMT) | 1,275,000 | 1,325,337 | |||
Series E Class III | |||||
4.875% 1/1/26 (AMT) | 1,500,000 | 1,530,270 | |||
Series E Class III | |||||
5.00% 1/1/28 (AMT) | 1,000,000 | 1,019,690 | |||
Idaho State Housing Agency | |||||
Single Family Mortgage | |||||
Series A 6.05% 7/1/13 | |||||
(AMBAC) (FHA) (VA) (AMT) | 45,000 | 45,771 | |||
Series A 6.10% 7/1/16 | |||||
(FHA) (VA) (AMT) | 60,000 | 61,058 | |||
Series A-1 | |||||
6.85% 7/1/12 (AMT) | 5,000 | 5,123 | |||
Series B 6.45% 7/1/15 | |||||
(FHA) (VA) (AMT) | 25,000 | 25,088 | |||
Series C-2 | |||||
6.35% 7/1/15 (AMT) | 30,000 | 30,036 | |||
Series E 6.35% 7/1/15 | |||||
(FHA) (AMT) | 55,000 | 55,276 | |||
Series E-1 6.60% 7/1/11 | 10,000 | 10,225 | |||
Series G-2 6.15% 7/1/15 | |||||
(FHA) (VA) (AMT) | 230,000 | 234,170 | |||
6,733,055 | |||||
Lease Revenue Bonds – 7.68% | |||||
Blaine School District #61 | |||||
Certificate of Participation | |||||
5.00% 7/30/10 (AMBAC) | 750,000 | 782,888 | |||
Boise City Certificate of | |||||
Participation 5.375% 9/1/20 | |||||
(FGIC) (AMT) | 2,100,000 | 2,189,103 | |||
Boise City Revenue Series A | |||||
5.375% 12/1/31 (MBIA) | 500,000 | 532,165 | |||
Idaho State Building | |||||
Authority Revenue | |||||
Series A 5.00% 9/1/21 (MBIA) | 1,150,000 | 1,170,631 | |||
Series A 5.00% 9/1/43 (XLCA) | 1,000,000 | 1,050,210 | |||
Series B 5.00% 9/1/21 (MBIA) | 750,000 | 786,810 | |||
6,511,807 | |||||
Local General Obligation Bonds – 24.34% | |||||
Ada & Canyon Counties Joint | |||||
School District #2 Meridian | |||||
4.75% 2/15/20 | 1,000,000 | 1,060,860 | |||
5.00% 7/30/20 | 2,155,000 | 2,278,955 | |||
5.125% 7/30/19 | 1,005,000 | 1,069,923 | |||
5.50% 7/30/16 | 1,305,000 | 1,492,959 | |||
Bannock County School District #25 | |||||
(Pocatello Idaho School Board | |||||
Guaranteed Program) | |||||
5.00% 8/15/15 | 1,040,000 | 1,133,340 | |||
5.00% 8/15/16 | 1,100,000 | 1,196,470 | |||
Boise Urban Renewal Agency | |||||
Parking Revenue | |||||
(Tax Increment) | |||||
Series A 6.125% 9/1/15 | 1,845,000 | 1,873,450 | |||
Series B 6.125% 9/1/15 | 1,505,000 | 1,535,582 | |||
Bonner County Local | |||||
Improvement District #93-1 | |||||
6.40% 4/30/07 | 195,000 | 195,603 | |||
6.50% 4/30/08 | 110,000 | 110,353 | |||
6.50% 4/30/10 | 60,000 | 60,191 | |||
Canyon County School District #132 | |||||
(Caldwell) 5.00% 7/30/15 (FGIC) | 2,000,000 | 2,194,659 | |||
Coeur D’Alene Local | |||||
Improvement District #6 | |||||
Series 1995 6.00% 7/1/09 | 85,000 | 85,502 | |||
Series 1996 6.05% 7/1/10 | 90,000 | 90,544 | |||
Series 1997 6.10% 7/1/12 | 40,000 | 40,239 | |||
Series 1998 6.10% 7/1/14 | 45,000 | 45,275 | |||
Lemhi County 5.20% 8/1/27 (FSA) | 2,145,000 | 2,278,354 | |||
Nampa, Idaho 5.00% 8/1/21 (FGIC) | 2,475,000 | 2,688,270 | |||
Power & Cassia Counties Joint | |||||
School District #381 (American | |||||
Falls) 5.00% 8/1/17 | 1,155,000 | 1,213,813 | |||
20,644,342 | |||||
§Pre-Refunded Bonds – 10.00% | |||||
Ammon Urban Renewal Agency | |||||
Revenue Subordinate Lien Tax | |||||
Increment Series B | |||||
6.25% 8/1/18-07 | 445,000 | 449,859 | |||
Boise State University Revenue | |||||
Refunding & Improvement | |||||
5.125% 4/1/31-12 (FGIC) | 1,000,000 | 1,067,700 | |||
5.375% 4/1/22-12 (FGIC) | 985,000 | 1,063,032 | |||
Idaho Health Facilities Authority | |||||
Hospital Revenue (Bonner | |||||
General Hospital Project) | |||||
6.50% 10/1/28-07 | 1,500,000 | 1,553,775 | |||
Puerto Rico Commonwealth | |||||
Highway & Transportation | |||||
Authority Revenue | |||||
Series D 5.25% 7/1/38-12 | 1,000,000 | 1,079,740 | |||
Series Y 5.00% 7/1/36-16 | 2,000,000 | 2,194,560 | |||
Puerto Rico Commonwealth | |||||
Infrastructure Financing | |||||
Revenue Series A | |||||
5.125% 7/1/31-11 | 1,010,000 | 1,071,974 | |||
8,480,640 |
16
Principal | |||||||
Amount | Value | ||||||
Municipal Bonds (continued) | |||||||
Special Tax Revenue Bonds – 4.31% | |||||||
Idaho Board Bank Authority | |||||||
Revenue Series B | |||||||
4.125% 9/15/36 (MBIA) | $ | 755,000 | $ | 741,063 | |||
5.00% 9/15/30 (MBIA) | 725,000 | 782,949 | |||||
Puerto Rico Commonwealth | |||||||
Highway & Transportation | |||||||
Authority Revenue Series W | |||||||
5.50% 7/1/15 | 175,000 | 192,866 | |||||
Virgin Islands Public Finance | |||||||
Authority Revenue (Senior- | |||||||
Lien-Matching Fund Loan | |||||||
Note) Series A | |||||||
5.25% 10/1/20 | 500,000 | 538,180 | |||||
5.25% 10/1/21 | 500,000 | 538,520 | |||||
5.25% 10/1/24 | 800,000 | 860,552 | |||||
3,654,130 | |||||||
State General Obligation Bonds – 4.13% | |||||||
Puerto Rico Commonwealth | |||||||
Public Improvement Series A | |||||||
5.125% 7/1/31 | 2,315,000 | 2,401,373 | |||||
Puerto Rico Public Buildings | |||||||
Authority Revenue | |||||||
(Guaranteed Government | |||||||
Facility) Series I 5.50% 7/1/23 | 1,000,000 | 1,102,240 | |||||
3,503,613 | |||||||
Transportation Revenue Bonds – 5.02% | |||||||
Idaho Housing & Finance | |||||||
Association Highway Trust | |||||||
5.00% 7/15/24 (MBIA) | 2,000,000 | 2,168,920 | |||||
Puerto Rico Commonwealth | |||||||
Highway & Transportation | |||||||
Authority Revenue Series G | |||||||
5.00% 7/1/33 | 2,000,000 | 2,086,460 | |||||
4,255,380 | |||||||
Water & Sewer Revenue Bonds – 3.01% | |||||||
Chubbuck Water Revenue | |||||||
Certificates of Participation | |||||||
6.35% 4/1/08 | 125,000 | 125,204 | |||||
6.40% 4/1/10 | 135,000 | 135,224 | |||||
Moscow Sewer Revenue | |||||||
5.00% 11/1/22 (FSA) | 2,175,000 | 2,292,232 | |||||
2,552,660 | |||||||
Total Municipal Bonds | |||||||
(cost $79,491,466) | 82,578,531 | ||||||
Number of | |||||||
Shares | |||||||
Short-Term Investments – 0.32% | |||||||
Money Market Instruments – 0.32% | |||||||
Federated Minnesota Municipal | |||||||
Cash Trust | 270,669 | 270,669 | |||||
Total Short-Term Investments | |||||||
(cost $270,669) | 270,669 | ||||||
Total Value of Securities – 97.68% | |||||||
(cost $79,762,135) | $ | 82,849,200 | |||||
Receivables and Other Assets | |||||||
Net of Liabilities – 2.32% | 1,969,371 | ||||||
Net Assets Applicable to 7,354,046 | |||||||
Shares Outstanding – 100.00% | $ | 84,818,571 | |||||
Net Asset Value – Delaware Tax-Free Idaho Fund | |||||||
Class A ($64,910,649 / 5,626,642 Shares) | $11.54 | ||||||
Net Asset Value – Delaware Tax-Free Idaho Fund | |||||||
Class B ($7,549,174 / 655,468 Shares) | $11.52 | ||||||
Net Asset Value – Delaware Tax-Free Idaho Fund | |||||||
Class C ($12,358,748 / 1,071,936 Shares) | $11.53 | ||||||
Components of Net Assets at February 28, 2007: | |||||||
Shares of beneficial interest | |||||||
(unlimited authorization – no par) | $ | 82,137,560 | |||||
Distributions in excess of net investment income | (11,281 | ) | |||||
Accumulated net realized loss on investments | (394,773 | ) | |||||
Net unrealized appreciation of investments | 3,087,065 | ||||||
Total net assets | $ | 84,818,571 | |||||
§Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S. Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 8 in “Notes to Financial Statements.” | |||||||
Summary of Abbreviations: | |||||||
AMBAC — Insured by the AMBAC Assurance Corporation AMT — Subject to Alternative Minimum Tax FGIC — Insured by the Financial Guaranty Insurance Company FHA — Insured by the Federal Housing Administration FSA — Insured by Financial Security Assurance MBIA — Insured by the Municipal Bond Insurance Association RADIAN — Insured by Radian Asset Assurance VA — Insured by the Veterans Administration XLCA — Insured by XL Capital Assurance | |||||||
Net Asset Value and Offering Price Per Share – | |||||||
Delaware Tax-Free Idaho Fund | |||||||
Net asset value Class A (A) | $11.54 | ||||||
Sales charge (4.50% of offering price) (B) | 0.54 | ||||||
Offering price | $12.08 |
(A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. | |
(B) | See current prospectus for purchases of $100,000 or more. |
See accompanying notes
(continues) 17
Statements of operations
Six Months Ended February 28, 2007 (Unaudited)
Delaware | Delaware | Delaware | Delaware | |||||
Tax-Free | Tax-Free | Tax-Free | Tax-Free | |||||
Arizona | California | Colorado | Idaho | |||||
Fund | Fund | Fund | Fund | |||||
Investment Income: | ||||||||
Interest | $3,679,351 | $2,552,931 | $7,115,164 | $1,976,364 | ||||
Expenses: | ||||||||
Management fees | 379,636 | 291,797 | 754,533 | 227,987 | ||||
Distribution expenses – Class A | 160,651 | 98,800 | 321,491 | 78,231 | ||||
Distribution expenses – Class B | 77,330 | 68,690 | 36,310 | 38,082 | ||||
Distribution expenses – Class C | 39,503 | 65,926 | 49,423 | 63,452 | ||||
Dividend disbursing and transfer agent fees and expenses | 36,535 | 22,004 | 71,340 | 23,733 | ||||
Accounting and administration expenses | 30,371 | 21,222 | 54,875 | 16,581 | ||||
Trustees’ fees and benefits | 23,673 | 16,024 | 42,434 | 12,747 | ||||
Registration fees | 11,742 | 12,746 | 5,147 | 2,198 | ||||
Legal fees | 10,118 | 8,101 | 21,420 | 4,059 | ||||
Audit and taxes | 8,771 | 7,500 | 11,428 | 7,246 | ||||
Reports and statements to shareholders | 7,673 | 5,455 | 14,375 | 3,138 | ||||
Custodian fees | 2,839 | 3,357 | 7,793 | 3,050 | ||||
Insurance fees | 1,916 | 1,546 | 3,635 | 2,288 | ||||
Consulting fees | 1,793 | 1,215 | 3,203 | 639 | ||||
Pricing fees | 1,489 | 1,477 | 1,593 | 1,258 | ||||
Trustees’ expenses | 305 | 207 | 549 | 204 | ||||
Taxes (other than taxes on income) | 268 | 271 | 534 | 52 | ||||
Dues and services | 180 | 142 | 378 | 126 | ||||
794,793 | 626,480 | 1,400,461 | 485,071 | |||||
Less expenses absorbed or waived | (124,903 | ) | (50,206 | ) | (38,084 | ) | (49,864 | ) |
Less expense paid indirectly | (472 | ) | (645 | ) | (811 | ) | (168 | ) |
Total operating expenses | 669,418 | 575,629 | 1,361,566 | 435,039 | ||||
Net Investment Income | 3,009,933 | 1,977,302 | 5,753,598 | 1,541,325 | ||||
Net Realized and Unrealized Gain on Investments: | ||||||||
Net realized gain on investments | 74,662 | 84,494 | 649,140 | 11,195 | ||||
Net change in unrealized appreciation/depreciation of investments | 874,122 | 1,233,566 | 1,327,910 | 638,321 | ||||
Net Realized and Unrealized Gain on Investments | 948,784 | 1,318,060 | 1,977,050 | 649,516 | ||||
Net Increase in Net Assets Resulting from Operations | $3,958,717 | $3,295,362 | $7,730,648 | $2,190,841 | ||||
See accompanying notes |
18
Statements of changes in net assets
Delaware Tax-Free | Delaware Tax-Free | ||||||||||||||
Arizona Fund | California Fund | ||||||||||||||
Six Months | Six Months | ||||||||||||||
Ended | Year Ended | Ended | Year Ended | ||||||||||||
2/28/07 | 8/31/06 | 2/28/07 | 8/31/06 | ||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
Increase (Decrease) in Net Assets from Operations: | |||||||||||||||
Net investment income | $ | 3,009,933 | $ | 6,300,495 | $ | 1,977,302 | $ | 3,593,780 | |||||||
Net realized gain on investments | 74,662 | 43,501 | 84,494 | 54,668 | |||||||||||
Net change in unrealized appreciation/depreciation of investments | 874,122 | (2,942,259 | ) | 1,233,566 | (645,995 | ) | |||||||||
Net increase in net assets resulting from operations | 3,958,717 | 3,401,737 | 3,295,362 | 3,002,453 | |||||||||||
Dividends and Distributions to Shareholders from: | |||||||||||||||
Net investment income: | |||||||||||||||
Class A | (2,621,569 | ) | (5,426,852 | ) | (1,551,365 | ) | (2,700,721 | ) | |||||||
Class B | (257,218 | ) | (591,776 | ) | (216,941 | ) | (520,644 | ) | |||||||
Class C | (131,146 | ) | (281,867 | ) | (208,996 | ) | (372,415 | ) | |||||||
(3,009,933 | ) | (6,300,495 | ) | (1,977,302 | ) | (3,593,780 | ) | ||||||||
Capital Share Transactions: | |||||||||||||||
Proceeds from shares sold: | |||||||||||||||
Class A | 7,366,846 | 10,957,142 | 10,215,792 | 24,239,523 | |||||||||||
Class B | 40,903 | 142,404 | 133,174 | 930,739 | |||||||||||
Class C | 575,593 | 1,220,741 | 2,273,752 | 4,270,651 | |||||||||||
Net asset value of shares issued upon reinvestment of dividends | |||||||||||||||
and distributions: | |||||||||||||||
Class A | 1,356,136 | 2,827,580 | 870,133 | 1,330,584 | |||||||||||
Class B | 133,393 | 284,984 | 134,608 | 319,486 | |||||||||||
Class C | 74,948 | 181,106 | 143,106 | 245,798 | |||||||||||
9,547,819 | 15,613,957 | 13,770,565 | 31,336,781 | ||||||||||||
Cost of shares repurchased: | |||||||||||||||
Class A | (10,775,234 | ) | (14,796,665 | ) | (3,818,394 | ) | (9,948,784 | ) | |||||||
Class B | (1,651,550 | ) | (2,670,968 | ) | (2,862,327 | ) | (4,420,476 | ) | |||||||
Class C | (799,489 | ) | (1,720,211 | ) | (932,077 | ) | (1,449,969 | ) | |||||||
(13,226,273 | ) | (19,187,844 | ) | (7,612,798 | ) | (15,819,229 | ) | ||||||||
Increase (decrease) in net assets derived from capital share transactions | (3,678,454 | ) | (3,573,887 | ) | 6,157,767 | 15,517,552 | |||||||||
Net Increase (Decrease) in Net Assets | (2,729,670 | ) | (6,472,645 | ) | 7,475,827 | 14,926,225 | |||||||||
Net Assets: | |||||||||||||||
Beginning of period | 155,997,847 | 162,470,492 | 103,680,629 | 88,754,404 | |||||||||||
End of period1 | $ | 153,268,177 | $ | 155,997,847 | $ | 111,156,456 | $ | 103,680,629 | |||||||
1 Including undistributed net investment income | $ | — | $ | — | $ | 1,300 | $ | 1,300 | |||||||
See accompanying notes |
(continues) 19
Statements of changes in net assets
Delaware Tax-Free | Delaware Tax-Free | ||||||||||||||
Colorado Fund | Idaho Fund | ||||||||||||||
Six Months | Six Months | ||||||||||||||
Ended | Year Ended | Ended | Year Ended | ||||||||||||
2/28/07 | 8/31/06 | 2/28/07 | 8/31/06 | ||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
Increase (Decrease) in Net Assets from Operations: | |||||||||||||||
Net investment income | $ | 5,753,598 | $ | 12,314,501 | $ | 1,541,325 | $ | 3,239,586 | |||||||
Net realized gain (loss) on investments | 649,140 | 450,227 | 11,195 | (101,210 | ) | ||||||||||
Net change in unrealized appreciation/depreciation of investments | 1,327,910 | (4,436,948 | ) | 638,321 | (1,375,994 | ) | |||||||||
Net increase in net assets resulting from operations | 7,730,648 | 8,327,780 | 2,190,841 | 1,762,382 | |||||||||||
Dividends and Distributions to Shareholders from: | |||||||||||||||
Net investment income: | |||||||||||||||
Class A | (5,450,967 | ) | (11,609,299 | ) | (1,220,002 | ) | (2,474,619 | ) | |||||||
Class B | (126,562 | ) | (336,062 | ) | (120,141 | ) | (299,166 | ) | |||||||
Class C | (171,961 | ) | (361,239 | ) | (199,908 | ) | (463,351 | ) | |||||||
(5,749,490 | ) | (12,306,600 | ) | (1,540,051 | ) | (3,237,136 | ) | ||||||||
Capital Share Transactions: | |||||||||||||||
Proceeds from shares sold: | |||||||||||||||
Class A | 7,350,603 | 13,799,363 | 5,057,460 | 10,429,777 | |||||||||||
Class B | 21,499 | 33,782 | 330,800 | 124,022 | |||||||||||
Class C | 752,630 | 2,039,444 | 254,587 | 1,701,162 | |||||||||||
Net asset value of shares issued upon reinvestment of dividends | |||||||||||||||
and distributions: | |||||||||||||||
Class A | 3,538,744 | 7,376,964 | 795,988 | 1,606,348 | |||||||||||
Class B | 73,868 | 204,522 | 71,069 | 185,231 | |||||||||||
Class C | 123,738 | 246,055 | 126,399 | 289,646 | |||||||||||
11,861,082 | 23,700,130 | 6,636,303 | 14,336,186 | ||||||||||||
Cost of shares repurchased: | |||||||||||||||
Class A | (9,177,246 | ) | (28,843,934 | ) | (4,240,554 | ) | (8,767,129 | ) | |||||||
Class B | (1,703,197 | ) | (2,239,852 | ) | (804,690 | ) | (3,139,497 | ) | |||||||
Class C | (708,582 | ) | (1,361,492 | ) | (1,553,312 | ) | (3,967,817 | ) | |||||||
(11,589,025 | ) | (32,445,278 | ) | (6,598,556 | ) | (15,874,443 | ) | ||||||||
Increase (decrease) in net assets derived from capital share transactions | 272,057 | (8,745,148 | ) | 37,747 | (1,538,257 | ) | |||||||||
Net Increase (Decrease) in Net Assets | 2,253,215 | (12,723,968 | ) | 688,537 | (3,013,011 | ) | |||||||||
Net Assets: | |||||||||||||||
Beginning of period | 276,964,584 | 289,688,552 | 84,130,034 | 87,143,045 | |||||||||||
End of period1 | $ | 279,217,799 | $ | 276,964,584 | $ | 84,818,571 | $ | 84,130,034 | |||||||
1 Including distributions in excess of net investment income | $ | — | — | $ | (11,281 | ) | $ | (11,301 | ) | ||||||
See accompanying notes |
20
Financial highlights
Delaware Tax-Free Arizona Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.350 | $ 11.560 | $ 11.410 | $ 11.160 | $ 11.530 | $ 11.500 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.231 | 0.467 | 0.468 | 0.469 | 0.502 | 0.510 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.070 | (0.210 | ) | 0.174 | 0.308 | (0.253 | ) | 0.100 | |||||||||
Total from investment operations | 0.301 | 0.257 | 0.642 | 0.777 | 0.249 | 0.610 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.231 | ) | (0.467 | ) | (0.468 | ) | (0.469 | ) | (0.502 | ) | (0.510 | ) | |||||
Net realized gain on investments | — | — | (0.024 | ) | (0.058 | ) | (0.117 | ) | (0.070 | ) | |||||||
Total dividends and distributions | (0.231 | ) | (0.467 | ) | (0.492 | ) | (0.527 | ) | (0.619 | ) | (0.580 | ) | |||||
Net asset value, end of period | $ 11.420 | $ 11.350 | $ 11.560 | $ 11.410 | $ 11.160 | $ 11.530 | |||||||||||
Total return2 | 2.67% | 2.31% | 5.74% | 7.09% | 2.17% | 5.54% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $ 130,222 | $ 131,468 | $ 134,874 | $ 122,436 | $ 129,683 | $ 141,424 | |||||||||||
Ratio of expenses to average net assets | 0.77% | 0.76% | 0.80% | 0.90% | 0.86% | 0.90% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 0.93% | 0.91% | 0.91% | 0.90% | 0.91% | 0.90% | |||||||||||
Ratio of net investment income to average net assets | 4.08% | 4.12% | 4.07% | 4.14% | 4.37% | 4.50% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.92% | 3.97% | 3.96% | 4.14% | 4.32% | 4.50% | |||||||||||
Portfolio turnover | 5% | 8% | 3% | 19% | 29% | 46% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
(continues) 21
Financial highlights
Delaware Tax-Free Arizona Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $11.360 | $11.570 | $11.420 | $11.170 | $11.540 | $11.500 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.188 | 0.382 | 0.382 | 0.384 | 0.416 | 0.426 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.070 | (0.210 | ) | 0.174 | 0.308 | (0.253 | ) | 0.110 | |||||||||
Total from investment operations | 0.258 | 0.172 | 0.556 | 0.692 | 0.163 | 0.536 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.188 | ) | (0.382 | ) | (0.382 | ) | (0.384 | ) | (0.416 | ) | (0.426 | ) | |||||
Net realized gain on investments | — | — | (0.024 | ) | (0.058 | ) | (0.117 | ) | (0.070 | ) | |||||||
Total dividends and distributions | (0.188 | ) | (0.382 | ) | (0.406 | ) | (0.442 | ) | (0.533 | ) | (0.496 | ) | |||||
Net asset value, end of period | $11.430 | $11.360 | $11.570 | $11.420 | $11.170 | $11.540 | |||||||||||
Total return2 | 2.29% | 1.54% | 4.95% | 6.28% | 1.41% | 4.83% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $15,028 | $16,413 | $19,005 | $13,355 | $14,666 | $13,678 | |||||||||||
Ratio of expenses to average net assets | 1.52% | 1.51% | 1.55% | 1.65% | 1.61% | 1.65% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.68% | 1.66% | 1.66% | 1.65% | 1.66% | 1.65% | |||||||||||
Ratio of net investment income to average net assets | 3.33% | 3.37% | 3.32% | 3.39% | 3.62% | 3.75% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.17% | 3.22% | 3.21% | 3.39% | 3.57% | 3.75% | |||||||||||
Portfolio turnover | 5% | 8% | 3% | 19% | 29% | 46% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
22
Delaware Tax-Free Arizona Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.380 | $ 11.580 | $ 11.430 | $ 11.180 | $ 11.550 | $ 11.520 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.188 | 0.381 | 0.382 | 0.384 | 0.415 | 0.426 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.070 | (0.200 | ) | 0.174 | 0.308 | (0.253 | ) | 0.100 | |||||||||
Total from investment operations | 0.258 | 0.181 | 0.556 | 0.692 | 0.162 | 0.526 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.188 | ) | (0.381 | ) | (0.382 | ) | (0.384 | ) | (0.415 | ) | (0.426 | ) | |||||
Net realized gain on investments | — | — | (0.024 | ) | (0.058 | ) | (0.117 | ) | (0.070 | ) | |||||||
Total dividends and distributions | (0.188 | ) | (0.381 | ) | (0.406 | ) | (0.442 | ) | (0.532 | ) | (0.496 | ) | |||||
Net asset value, end of period | $ 11.450 | $ 11.380 | $ 11.580 | $ 11.430 | $ 11.180 | $ 11.550 | |||||||||||
Total return2 | 2.28% | 1.63% | 4.94% | 6.27% | 1.40% | 4.73% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $8,018 | $8,117 | $8,591 | $6,651 | $8,544 | $8,115 | |||||||||||
Ratio of expenses to average net assets | 1.52% | 1.51% | 1.55% | 1.65% | 1.61% | 1.65% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.68% | 1.66% | 1.66% | 1.65% | 1.66% | 1.65% | |||||||||||
Ratio of net investment income to average net assets | 3.33% | 3.37% | 3.32% | 3.39% | 3.62% | 3.75% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.17% | 3.22% | 3.21% | 3.39% | 3.57% | 3.75% | |||||||||||
Portfolio turnover | 5% | 8% | 3% | 19% | 29% | 46% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
(continues) 23
Financial highlights
Delaware Tax-Free California Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.400 | $ 11.490 | $ 11.110 | $ 10.750 | $ 11.010 | $ 10.950 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.223 | 0.450 | 0.462 | 0.518 | 0.537 | 0.546 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.140 | (0.090 | ) | 0.380 | 0.360 | (0.260 | ) | 0.060 | |||||||||
Total from investment operations | 0.363 | 0.360 | 0.842 | 0.878 | 0.277 | 0.606 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.223 | ) | (0.450 | ) | (0.462 | ) | (0.518 | ) | (0.537 | ) | (0.546 | ) | |||||
Total dividends and distributions | (0.223 | ) | (0.450 | ) | (0.462 | ) | (0.518 | ) | (0.537 | ) | (0.546 | ) | |||||
Net asset value, end of period | $ 11.540 | $ 11.400 | $ 11.490 | $ 11.110 | $ 10.750 | $ 11.010 | |||||||||||
Total return2 | 3.21% | 3.24% | 7.72% | 8.34% | 2.51% | 5.77% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $84,250 | $75,995 | $60,744 | $24,797 | $22,169 | $23,462 | |||||||||||
Ratio of expenses to average net assets | 0.90% | 0.88% | 0.84% | 0.50% | 0.50% | 0.50% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 0.99% | 0.97% | 1.06% | 0.96% | 0.93% | 0.97% | |||||||||||
Ratio of net investment income to average net assets | 3.91% | 3.97% | 4.03% | 4.72% | 4.84% | 5.05% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.82% | 3.88% | 3.81% | 4.26% | 4.41% | 4.58% | |||||||||||
Portfolio turnover | 9% | 14% | 11% | 48% | 56% | 93% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
24
Delaware Tax-Free California Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.440 | $ 11.530 | $ 11.160 | $ 10.790 | $ 11.050 | $ 10.990 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.180 | 0.365 | 0.377 | 0.436 | 0.453 | 0.465 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.140 | (0.090 | ) | 0.370 | 0.370 | (0.260 | ) | 0.060 | |||||||||
Total from investment operations | 0.320 | 0.275 | 0.747 | 0.806 | 0.193 | 0.525 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.180 | ) | (0.365 | ) | (0.377 | ) | (0.436 | ) | (0.453 | ) | (0.465 | ) | |||||
Total dividends and distributions | (0.180 | ) | (0.365 | ) | (0.377 | ) | (0.436 | ) | (0.453 | ) | (0.465 | ) | |||||
Net asset value, end of period | $ 11.580 | $ 11.440 | $ 11.530 | $ 11.160 | $ 10.790 | $ 11.050 | |||||||||||
Total return2 | 2.82% | 2.46% | 6.80% | 7.60% | 1.73% | 4.95% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $12,489 | $14,918 | $18,254 | $14,530 | $16,165 | $15,105 | |||||||||||
Ratio of expenses to average net assets | 1.65% | 1.63% | 1.59% | 1.25% | 1.25% | 1.25% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.74% | 1.72% | 1.81% | 1.71% | 1.68% | 1.72% | |||||||||||
Ratio of net investment income to average net assets | 3.16% | 3.22% | 3.28% | 3.97% | 4.09% | 4.30% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.07% | 3.13% | 3.06% | 3.51% | 3.66% | 3.83% | |||||||||||
Portfolio turnover | 9% | 14% | 11% | 48% | 56% | 93% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
(continues) 25
Financial highlights
Delaware Tax-Free California Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.420 | $ 11.500 | $ 11.130 | $ 10.760 | $ 11.020 | $ 10.970 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.180 | 0.365 | 0.377 | 0.436 | 0.454 | 0.465 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.140 | (0.080 | ) | 0.370 | 0.370 | (0.260 | ) | 0.050 | |||||||||
Total from investment operations | 0.320 | 0.285 | 0.747 | 0.806 | 0.194 | 0.515 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.180 | ) | (0.365 | ) | (0.377 | ) | (0.436 | ) | (0.454 | ) | (0.465 | ) | |||||
Total dividends and distributions | (0.180 | ) | (0.365 | ) | (0.377 | ) | (0.436 | ) | (0.454 | ) | (0.465 | ) | |||||
Net asset value, end of period | $ 11.560 | $ 11.420 | $ 11.500 | $ 11.130 | $ 10.760 | $ 11.020 | |||||||||||
Total return2 | 2.83% | 2.56% | 6.81% | 7.62% | 1.74% | 4.86% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $14,417 | $12,768 | $9,756 | $5,595 | $7,013 | $7,357 | |||||||||||
Ratio of expenses to average net assets | 1.65% | 1.63% | 1.59% | 1.25% | 1.25% | 1.25% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.74% | 1.72% | 1.81% | 1.71% | 1.68% | 1.72% | |||||||||||
Ratio of net investment income to average net assets | 3.16% | 3.22% | 3.28% | 3.97% | 4.09% | 4.30% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.07% | 3.13% | 3.06% | 3.51% | 3.66% | 3.83% | |||||||||||
Portfolio turnover | 9% | 14% | 11% | 48% | 56% | 93% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
26
Delaware Tax-Free Colorado Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.040 | $ 11.200 | $ 11.070 | $ 10.830 | $ 11.080 | $ 11.120 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.233 | 0.488 | 0.495 | 0.510 | 0.527 | 0.532 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.080 | (0.160 | ) | 0.130 | 0.240 | (0.250 | ) | (0.040 | ) | ||||||||
Total from investment operations | 0.313 | 0.328 | 0.625 | 0.750 | 0.277 | 0.492 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.233 | ) | (0.488 | ) | (0.495 | ) | (0.510 | ) | (0.527 | ) | (0.532 | ) | |||||
Total dividends and distributions | (0.233 | ) | (0.488 | ) | (0.495 | ) | (0.510 | ) | (0.527 | ) | (0.532 | ) | |||||
Net asset value, end of period | $ 11.120 | $ 11.040 | $ 11.200 | $ 11.070 | $ 10.830 | $ 11.080 | |||||||||||
Total return2 | 2.86% | 3.03% | 5.78% | 7.04% | 2.52% | 4.60% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $262,342 | $258,773 | $270,149 | $276,534 | $299,528 | $314,695 | |||||||||||
Ratio of expenses to average net assets | 0.95% | 0.93% | 0.94% | 0.95% | 0.99% | 0.95% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 0.98% | 0.94% | 0.94% | 0.95% | 0.99% | 0.95% | |||||||||||
Ratio of net investment income to average net assets | 4.24% | 4.43% | 4.46% | 4.63% | 4.76% | 4.86% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 4.21% | 4.42% | 4.46% | 4.63% | 4.76% | 4.86% | |||||||||||
Portfolio turnover | 16% | 8% | 8% | 13% | 30% | 36% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
(continues) 27
Financial highlights
Delaware Tax-Free Colorado Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.050 | $ 11.200 | $ 11.080 | $ 10.830 | $ 11.090 | $ 11,120 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.192 | 0.405 | 0.412 | 0.427 | 0.444 | 0.450 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.080 | (0.150 | ) | 0.120 | 0.250 | (0.260 | ) | (0.030 | ) | ||||||||
Total from investment operations | 0.272 | 0.255 | 0.532 | 0.677 | 0.184 | 0.420 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.192 | ) | (0.405 | ) | (0.412 | ) | (0.427 | ) | (0.444 | ) | (0.450 | ) | |||||
Total dividends and distributions | (0.192 | ) | (0.405 | ) | (0.412 | ) | (0.427 | ) | (0.444 | ) | (0.450 | ) | |||||
Net asset value, end of period | $ 11.130 | $ 11.050 | $ 11.200 | $ 11.080 | $ 10.830 | $ 11.090 | |||||||||||
Total return2 | 2.48% | 2.35% | 4.89% | 6.34% | 1.66% | 3.92% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $6,665 | $8,221 | $10,370 | $12,411 | $13,108 | $14,843 | |||||||||||
Ratio of expenses to average net assets | 1.70% | 1.68% | 1.69% | 1.70% | 1.74% | 1.70% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.73% | 1.69% | 1.69% | 1.70% | 1.74% | 1.70% | |||||||||||
Ratio of net investment income to average net assets | 3.49% | 3.68% | 3.71% | 3.88% | 4.01% | 4.11% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.46% | 3.67% | 3.71% | 3.88% | 4.01% | 4.11% | |||||||||||
Portfolio turnover | 16% | 8% | 8% | 13% | 30% | 36% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
28
Delaware Tax-Free Colorado Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.070 | $ 11.220 | $ 11.090 | $ 10.850 | $ 11.100 | $ 11.130 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.192 | 0.405 | 0.413 | 0.427 | 0.444 | 0.450 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.080 | (0.150 | ) | 0.130 | 0.240 | (0.250 | ) | (0.030 | ) | ||||||||
Total from investment operations | 0.272 | 0.255 | 0.543 | 0.667 | 0.194 | 0.420 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.192 | ) | (0.405 | ) | (0.413 | ) | (0.427 | ) | (0.444 | ) | (0.450 | ) | |||||
Total dividends and distributions | (0.192 | ) | (0.405 | ) | (0.413 | ) | (0.427 | ) | (0.444 | ) | (0.450 | ) | |||||
Net asset value, end of period | $ 11.150 | $ 11.070 | $ 11.220 | $ 11.090 | $ 10.850 | $ 11.100 | |||||||||||
Total return2 | 2.47% | 2.34% | 4.99% | 6.23% | 1.74% | 3.91% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $10,211 | $9,971 | $9,170 | $9,579 | $8,606 | $8,074 | |||||||||||
Ratio of expenses to average net assets | 1.70% | 1.68% | 1.69% | 1.70% | 1.74% | 1.70% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.73% | 1.69% | 1.69% | 1.70% | 1.74% | 1.70% | |||||||||||
Ratio of net investment income to average net assets | 3.49% | 3.68% | 3.71% | 3.88% | 4.01% | 4.11% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.46% | 3.67% | 3.71% | 3.88% | 4.01% | 4.11% | |||||||||||
Portfolio turnover | 16% | 8% | 8% | 13% | 30% | 36% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
(continues) 29
Financial highlights
Delaware Tax-Free Idaho Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.450 | $ 11.630 | $ 11.490 | $ 11.140 | $ 11.320 | $ 11.260 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.222 | 0.449 | 0.452 | 0.478 | 0.497 | 0.522 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.090 | (0.180 | ) | 0.140 | 0.353 | (0.181 | ) | 0.059 | |||||||||
Total from investment operations | 0.312 | 0.269 | 0.592 | 0.831 | 0.316 | 0.581 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.222 | ) | (0.449 | ) | (0.452 | ) | (0.481 | ) | (0.496 | ) | (0.521 | ) | |||||
Total dividends and distributions | (0.222 | ) | (0.449 | ) | (0.452 | ) | (0.481 | ) | (0.496 | ) | (0.521 | ) | |||||
Net asset value, end of period | $ 11.540 | $ 11.450 | $ 11.630 | $ 11.490 | $ 11.140 | $ 11.320 | |||||||||||
Total return2 | 2.75% | 2.40% | 5.25% | 7.58% | 2.81% | 5.36% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $64,911 | $62,808 | $60,554 | $55,572 | $51,682 | $45,108 | |||||||||||
Ratio of expenses to average net assets | 0.87% | 0.85% | 0.87% | 0.97% | 0.93% | 1.00% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 0.99% | 0.98% | 0.98% | 0.97% | 1.00% | 1.03% | |||||||||||
Ratio of net investment income to average net assets | 3.90% | 3.95% | 3.92% | 4.21% | 4.36% | 4.69% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.78% | 3.82% | 3.81% | 4.21% | 4.29% | 4.66% | |||||||||||
Portfolio turnover | 10% | 15% | 27% | 13% | 18% | 11% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
30
Delaware Tax-Free Idaho Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.430 | $ 11.610 | $ 11.480 | $ 11.130 | $ 11.310 | $ 11.250 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.180 | 0.364 | 0.366 | 0.393 | 0.412 | 0.439 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.090 | (0.180 | ) | 0.130 | 0.353 | (0.181 | ) | (0.059 | |||||||||
Total from investment operations | 0.270 | 0.184 | 0.496 | 0.746 | 0.231 | 0.498 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.180 | ) | (0.364 | ) | (0.366 | ) | (0.396 | ) | (0.411 | ) | (0.438 | ) | |||||
Total dividends and distributions | (0.180 | ) | (0.364 | ) | (0.366 | ) | (0.396 | ) | (0.411 | ) | (0.438 | ) | |||||
Net asset value, end of period | $ 11.520 | $ 11.430 | $ 11.610 | $ 11.480 | $ 11.130 | $ 11.310 | |||||||||||
Total return2 | 2.38% | 1.64% | 4.39% | 6.79% | 2.05% | 4.58% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $7,549 | $7,892 | $10,911 | $13,044 | $16,801 | $14,809 | |||||||||||
Ratio of expenses to average net assets | 1.62% | 1.60% | 1.62% | 1.72% | 1.68% | 1.75% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.74% | 1.73% | 1.73% | 1.72% | 1.75% | 1.78% | |||||||||||
Ratio of net investment income to average net assets | 3.15% | 3.20% | 3.17% | 3.46% | 3.61% | 3.94% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.03% | 3.07% | 3.06% | 3.46% | 3.54% | 3.91% | |||||||||||
Portfolio turnover | 10% | 15% | 27% | 13% | 18% | 11% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
(continues) 31
Financial highlights
Delaware Tax-Free Idaho Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 11.440 | $ 11.630 | $ 11.490 | $ 11.130 | $ 11.310 | $ 11.250 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.180 | 0.364 | 0.366 | 0.393 | 0.413 | 0.439 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.090 | (0.190 | ) | 0.140 | 0.362 | (0.181 | ) | (0.059 | |||||||||
Total from investment operations | 0.270 | 0.174 | 0.506 | 0.755 | 0.232 | 0.498 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.180 | ) | (0.364 | ) | (0.366 | ) | (0.395 | ) | (0.412 | ) | (0.438 | ) | |||||
Total dividends and distributions | (0.180 | ) | (0.364 | ) | (0.366 | ) | (0.395 | ) | (0.412 | ) | (0.438 | ) | |||||
Net asset value, end of period | $ 11.530 | $ 11.440 | $ 11.630 | $ 11.490 | $ 11.130 | $ 11.310 | |||||||||||
Total return2 | 2.38% | 1.56% | 4.47% | 6.87% | 2.05% | 4.57% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $12,359 | $13,430 | $15,678 | $15,041 | $16,296 | $9,829 | |||||||||||
Ratio of expenses to average net assets | 1.62% | 1.60% | 1.62% | 1.72% | 1.68% | 1.75% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 1.74% | 1.73% | 1.73% | 1.72% | 1.75% | 1.78% | |||||||||||
Ratio of net investment income to average net assets | 3.15% | 3.20% | 3.17% | 3.46% | 3.61% | 3.94% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.03% | 3.07% | 3.06% | 3.46% | 3.54% | 3.91% | |||||||||||
Portfolio turnover | 10% | 15% | 27% | 13% | 18% | 11% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. | |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
See accompanying notes
32
Notes to financial statements
Delaware Western States Funds
February 28, 2007 (Unaudited)
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 Mutual Funds II is organized as a Delaware statutory trust and offers one series: Delaware Tax-Free Colorado Fund. Voyageur Insured Funds is organized as a Delaware statutory trust and offers two series: Delaware Tax-Free Arizona Fund (formerly, Delaware Tax-Free Arizona Insured Fund) and Delaware Tax-Free Minnesota Insured Fund. Voyageur Mutual Funds, Voyageur Mutual Funds II, and Voyageur Insured Funds are individually referred to as a “Trust” and collectively as the “Trusts.” These financial statements and related notes pertain to Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, and Delaware Tax-Free Idaho Fund (each a “Fund” and, collectively, the “Funds”). The above Trusts are open-end investment companies. The Funds are considered non-diversified under the Investment Company Act of 1940, as amended, and offer Class A, Class B, and Class C shares. Class A shares are sold with a front-end sales charge of up to 4.50%. Class A share purchases of $1,000,000 or more will incur a contingent deferred sales charge of 1% if redeemed during the first year and 0.50% during the second year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Class B shares are sold with a contingent deferred sales charge that declines from 4% to zero depending upon the period of time the shares are held. Class B shares will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase. Class C shares are sold with a contingent deferred sales charge of 1%, if redeemed during the first 12 months.
The investment objective of the Funds is to seek as high a level of current income exempt from federal income tax and personal income tax in their respective states, as is consistent with preservation of capital.
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Funds.
Security Valuation — Long-term debt securities are valued by an independent pricing service and such prices are believed to reflect the fair value of such securities. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Open-end investment companies are valued at their published net asset value. Other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of each Fund’s Board of Trustees. In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures, aftermarket trading or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).
In September 2006, Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 “Fair Value Measurements” (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.
Federal Income Taxes — Each Fund intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.
On July 13, 2006, FASB released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Funds’ tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in Funds net asset value calculations as late as the Funds’ last net asset value calculation in the first required financial statement reporting period. As a result, the Funds will incorporate FIN 48 in their semiannual report on February 29, 2008. Although the Funds’ tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Funds’ financial statements.
Class Accounting — Investment income and common expenses are allocated to the classes of each Fund on the basis of “settled shares” of each class in relation to the net assets of each Fund. Realized and unrealized gain (loss) on investments are allocated to the various classes of each Fund on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.
Use of Estimates — The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Other — Expenses directly attributable to the Funds are charged directly to the Funds. Other expenses common to various funds within the Delaware Investments® Family of Funds are generally allocated amongst such funds on the basis of average net assets. Management fees and some other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Interest income is recorded on
(continues) 33
Notes to financial statements
Delaware Western States Funds
1. Significant Accounting Policies (continued)
the accrual basis. Discounts and premiums are amortized to interest income over the lives of the respective securities. Each Fund declares dividends daily from net investment income and pays such dividends monthly and declares and pays distributions from net realized gain on investments, if any, annually.
The Funds receive earnings credits from their custodian when positive cash balances are maintained, which are used to offset custody fees. The expenses paid under this arrangement are included in custodian fees on the Statements of Operations with the corresponding expense offset shown as “expense paid indirectly.”
2. Investment Management, Administration Agreements and Other Transactions with Affiliates
In accordance with the terms of its respective investment management agreement, each Fund pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee based on each Fund’s average daily net assets as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | ||||
Arizona Fund | California Fund | Colorado Fund | Idaho Fund | ||||
On the first $500 million | 0.500% | 0.550% | 0.550% | 0.550% | |||
On the next $500 million | 0.475% | 0.500% | 0.500% | 0.500% | |||
On the next $1.5 billion | 0.450% | 0.450% | 0.450% | 0.450% | |||
In excess of $2.5 billion | 0.425% | 0.425% | 0.425% | 0.425% |
DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse each Fund to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, 12b-1 plan expense, certain insurance costs and non-routine expenses or costs, do not exceed specified percentages of average daily net assets through December 31, 2007 as shown below:
Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | ||||
Arizona Fund | California Fund | Colorado Fund | Idaho Fund | ||||
0.50% | 0.63% | 0.68% | 0.60% |
Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. The Funds pay DSC a monthly fee computed at the annual rate of 0.04% of each Fund’s average daily net assets for accounting and administration services. Each Fund pays DSC a monthly fee based on the number of shareholder accounts for dividend disbursing and transfer agent services.
Pursuant to a distribution agreement and distribution plan, each Fund pays DDLP, the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.25% of the average daily net assets of the Class A shares and 1.00% of the average daily net assets of the Class B and C shares. At February 28, 2007, each Fund had liabilities payable to affiliates as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | ||||
Arizona Fund | California Fund | Colorado Fund | Idaho Fund | ||||
Investment management fees payable to DMC | $40,369 | $39,544 | $110,053 | $26,705 | |||
Dividend disbursing, transfer agent, | |||||||
accounting and administration fees, | |||||||
and other expenses payable to DSC | 23,386 | 16,013 | 43,514 | 14,717 | |||
Distribution fees payable to DDLP | 89,273 | 76,521 | 132,223 | 57,519 | |||
Other expenses payable to DMC and affiliates* | 9,580 | 4,239 | 10,170 | 3,303 |
*DMC, as part of its administrative services, pays operating expenses on behalf of each Fund and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, registration fees and trustees’ fees.
As provided in the investment management agreement, each Fund bears the cost of certain legal and tax services, including internal legal and tax services provided to each Fund by DMC and/or its affiliates’ employees. For the six months ended February 28, 2007, each Fund was charged internal legal and tax services provided by DMC and/or its affiliates’ employees as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | ||||
Arizona Fund | California Fund | Colorado Fund | Idaho Fund | ||||
$4,084 | $2,882 | $7,391 | $2,282 |
For the six months ended February 28, 2007, DDLP earned commissions on sales of Class A shares for each Fund as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | ||||
Arizona Fund | California Fund | Colorado Fund | Idaho Fund | ||||
$8,758 | $8,157 | $16,250 | $11,613 |
34
2. Investment Management, Administration Agreements and Other Transactions with Affiliates (continued)
For the six months ended February 28, 2007, DDLP received gross contingent deferred sales charge commissions on redemption of each Fund’s Class B and Class C shares, and these commissions were entirely used to offset up-front commissions previously paid by DDLP to broker-dealers on sales of those shares. The amounts received were as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | ||||
Arizona Fund | California Fund | Colorado Fund | Idaho Fund | ||||
Class B | $9,928 | $12,505 | $1,474 | $2,979 | |||
Class C | 398 | 64 | 610 | 24 |
Trustees’ fees and benefits include expenses accrued by the Funds for each Trustee’s retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service were eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit was determined based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees of the Funds unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits were made in 2007 to those independent trustees so entitled. The retirement benefit payouts were as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | ||||
Arizona Fund | California Fund | Colorado Fund | Idaho Fund | ||||
$19,419 | $13,082 | $34,628 | $10,469 |
Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Funds.
3. Investments
For the six months ended February 28, 2007, the Funds made purchases and sales of investment securities other than short-term investments as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | ||||
Arizona Fund | California Fund | Colorado Fund | Idaho Fund | ||||
Purchases | $3,534,445 | $11,932,383 | $21,374,786 | $4,222,600 | |||
Sales | 6,970,307 | 4,674,305 | 22,690,190 | 5,535,099 |
At February 28, 2007, the cost of investments for federal income tax purposes has been estimated since the final tax characteristics cannot be determined until fiscal year end. At February 28, 2007, the cost of investments and unrealized appreciation (depreciation) for each Fund were as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | |||||||
Arizona Fund | California Fund | Colorado Fund | Idaho Fund | |||||||
Cost of investments | $ 144,426,971 | $104,308,090 | $259,201,354 | $79,748,790 | ||||||
Aggregate unrealized appreciation | $ 8,452,182 | $ 5,764,681 | $ 17,129,810 | $ 3,110,121 | ||||||
Aggregate unrealized depreciation | — | (1,961 | ) | (35,280 | ) | (9,711 | ) | |||
Net unrealized appreciation | $ 8,452,182 | $ 5,762,720 | $ 17,094,530 | $ 3,100,410 |
4. Dividend and Distribution Information
Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles. Additionally, net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the six months ended February 28, 2007 and the year ended August 31, 2006 was as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | ||||
Arizona Fund | California Fund | Colorado Fund | Idaho Fund | ||||
Six Months Ended 2/28/07* | |||||||
Tax-exempt income | $3,009,933 | $1,977,302 | $5,749,490 | $1,540,051 | |||
Year Ended 8/31/06 | |||||||
Tax-exempt income | $6,300,495 | $3,593,780 | $12,306,600 | $3,237,136 |
*Tax information for the period ended February 28, 2007 is an estimate and the tax character of dividends and distributions may be redesignated at fiscal year end.
(continues) 35
Notes to financial statements
Delaware Western States Funds
5. Components of Net Assets on a Tax Basis
The components of net assets are estimated since the final tax characteristics cannot be determined until fiscal year end. As of February 28, 2007, the estimated components of net assets on a tax basis were as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | ||||||||
Arizona Fund | California Fund | Colorado Fund | Idaho Fund | ||||||||
Shares of beneficial interest | $147,487,298 | $106,060,149 | $270,360,412 | $82,137,560 | |||||||
Undistributed tax-exempt income | — | 1,300 | — | — | |||||||
Other temporary differences | — | — | — | (11,281 | ) | ||||||
Realized gains (losses) 9/1/06–2/28/07 | 74,662 | 84,494 | 649,140 | (56,876 | ) | ||||||
Post-October losses | — | — | — | (9,381 | ) | ||||||
Capital loss carryforwards as of 8/31/06 | (2,745,965 | )* | (752,207 | ) | (8,886,283 | ) | (341,861 | ) | |||
Unrealized appreciation of investments | 8,452,182 | 5,762,720 | 17,094,530 | 3,100,410 | |||||||
Net assets | $153,268,177 | $111,156,456 | $279,217,799 | $84,818,571 |
*The amount of this loss which can be utilized in subsequent years is subject to an annual limitation in accordance with the Internal Revenue Code due to the Fund (formerly, the Delaware Tax-Free Arizona Insured Fund) reorganization with the Delaware Tax-Free Arizona Fund.
The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales and tax treatment of market discount on debt instruments.
Post-October losses represent losses realized on investment transactions from November 1, 2006 through February 28, 2007 that, in accordance with federal income tax regulations, each Fund has elected to defer and treat as having arisen in the following fiscal year.
For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to tax treatment of market discount and premium on certain debt instruments. Results of operations and net assets were not affected by these reclassifications. For the six months ended February 28, 2007, the Funds recorded an estimate of these differences since the final tax characteristics cannot be determined until fiscal year end.
Delaware Tax-Free | Delaware Tax-Free | ||
Colorado Fund | Idaho Fund | ||
Distributions in excess of net investment income | $(4,108) | $(1,254) | |
Accumulated net realized gain (loss) | 4,108 | 1,254 |
For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. Capital loss carryforwards remaining at August 31, 2006 will expire as follows:
Year of | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | |||||||
Expiration | Arizona Fund | California Fund | Colorado Fund | Idaho Fund | |||||||
2008 | $ 985,821 | $ — | $ — | $ — | |||||||
2009 | — | 746,168 | $2,054,025 | 151,477 | |||||||
2010 | — | — | — | 166,949 | |||||||
2011 | 78,759 | 6,039 | — | — | |||||||
2012 | 1,681,385 | — | 4,571,043 | — | |||||||
2013 | — | — | 57,695 | — | |||||||
2014 | — | — | 2,203,520 | 23,435 | |||||||
Total | $2,745,965 | $752,207 | $8,886,283 | $341,861 |
For the six months ended February 28, 2007, each Fund had capital gains (losses), which may reduce (increase) the capital loss carryforwards as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | Delaware Tax-Free | ||||
Arizona Fund | California Fund | Colorado Fund | Idaho Fund | ||||
$74,662 | $84,494 | $649,140 | $(56,876) |
36
6. Capital Shares
Transactions in capital shares were as follows:
Delaware Tax-Free | Delaware Tax-Free | ||||||||||
Arizona Fund | California Fund | ||||||||||
Six Months | Six Months | ||||||||||
Ended | Year Ended | Ended | Year Ended | ||||||||
2/28/07 | 8/31/06 | 2/28/07 | 8/31/06 | ||||||||
Shares sold: | |||||||||||
Class A | 647,864 | 971,193 | 892,149 | 2,142,834 | |||||||
Class B | 3,600 | 12,623 | 11,584 | 81,632 | |||||||
Class C | 50,456 | 107,731 | 197,964 | 376,829 | |||||||
Shares issued upon reinvestment of dividends and distributions: | |||||||||||
Class A | 119,084 | 249,650 | 75,894 | 117,718 | |||||||
Class B | 11,705 | 25,147 | 11,694 | 28,142 | |||||||
Class C | 6,566 | 15,949 | 12,462 | 21,715 | |||||||
839,275 | 1,382,293 | 1,201,747 | 2,768,870 | ||||||||
Shares repurchased: | |||||||||||
Class A | (946,127 | ) | (1,309,086 | ) | (333,438 | ) | (881,647 | ) | |||
Class B | (145,225 | ) | (236,154 | ) | (248,760 | ) | (389,023 | ) | |||
Class C | (69,999 | ) | (151,943 | ) | (81,320 | ) | (128,171 | ) | |||
(1,161,351 | ) | (1,697,183 | ) | (663,518 | ) | (1,398,841 | ) | ||||
Net increase (decrease) | (322,076 | ) | (314,890 | ) | 538,229 | 1,370,029 | |||||
Delaware Tax-Free | Delaware Tax-Free | ||||||||||
Colorado Fund | Idaho Fund | ||||||||||
Six Months | Six Months | ||||||||||
Ended | Year Ended | Ended | Year Ended | ||||||||
2/28/07 | 8/31/06 | 2/28/07 | 8/31/06 | ||||||||
Shares sold: | |||||||||||
Class A | 663,177 | 1,253,924 | 440,234 | 909,746 | |||||||
Class B | 1,943 | 3,073 | 28,858 | 10,946 | |||||||
Class C | 67,705 | 184,841 | 22,206 | 148,802 | |||||||
Shares issued upon reinvestment of dividends and distributions: | |||||||||||
Class A | 319,386 | 669,689 | 69,277 | 140,782 | |||||||
Class B | 6,661 | 18,549 | 6,195 | 16,261 | |||||||
Class C | 11,143 | 22,293 | 11,009 | 25,408 | |||||||
1,070,015 | 2,152,369 | 577,779 | 1,251,945 | ||||||||
Shares repurchased: | |||||||||||
Class A | (828,117 | ) | (2,621,749 | ) | (369,445 | ) | (770,258 | ) | |||
Class B | (153,621 | ) | (203,332 | ) | (70,133 | ) | (276,018 | ) | |||
Class C | (63,779 | ) | (123,594 | ) | (135,120 | ) | (348,933 | ) | |||
(1,045,517 | ) | (2,948,675 | ) | (574,698 | ) | (1,395,209 | ) | ||||
Net increase (decrease) | 24,498 | (796,306 | ) | 3,081 | (143,264 | ) |
(continues) 37
Notes to financial statements
Delaware Western States Funds
6. Capital Shares (continued)
For the six months ended February 28, 2007 and the year ended August 31, 2006, the following shares and values were converted from Class B to Class A shares. The respective amounts are included in Class B redemptions and Class A subscriptions in the tables on the previous page and the Statements of Changes in Net Assets.
Six Months Ended | Year Ended | ||||||||||||
2/28/07 | 8/31/06 | ||||||||||||
Class B | Class A | Class B | Class A | ||||||||||
Shares | Shares | Value | Shares | Shares | Value | ||||||||
Delaware Tax-Free Arizona Fund | 34,361 | 34,367 | $ | 390,301 | 71,582 | 71,646 | $ | 812,252 | |||||
Delaware Tax-Free California Fund | 73,522 | 73,778 | 847,314 | 166,547 | 167,211 | 1,896,023 | |||||||
Delaware Tax-Free Colorado Fund | 37,842 | 37,859 | 419,104 | 101,489 | 101,560 | 1,116,940 | |||||||
Delaware Tax-Free Idaho Fund | 27,457 | 27,427 | 315,230 | 62,906 | 62,842 | 719,818 |
7. Line of Credit
Each Fund, along with certain other funds in the Delaware Investments® Family of Funds (the “Participants”), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant’s allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Funds had no amounts outstanding as of February 28, 2007, or at any time during the period then ended.
8. Credit and Market Risk
The Funds concentrate their investments in securities issued by municipalities. The value of these investments may be adversely affected by new legislation within the states, regional or local economic conditions, and differing levels of supply and demand for municipal bonds. Many municipalities insure repayment for their obligations. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons and there is no assurance that the insurance company will meet its obligations. These securities have been identified in the Statements of Net Assets.
The Funds may invest in advanced refunded bonds, escrow secured bonds or defeased bonds. Under current federal tax laws and regulations, state and local government borrowers are permitted to refinance outstanding bonds by issuing new bonds. The issuer refinances the outstanding debt to either reduce interest costs or to remove or alter restrictive covenants imposed by the bonds being refinanced. A refunding transaction where the municipal securities are being refunded within 90 days from the issuance of the refunding issue is known as a “current refunding.” Advance refunded bonds are bonds in which the refunded bond issue remains outstanding for more than 90 days following the issuance of the refunding issue. In an advance refunding, the issuer will use the proceeds of a new bond issue to purchase high grade interest bearing debt securities which are then deposited in an irrevocable escrow account held by an escrow agent to secure all future payments of principal and interest and bond premium of the advance refunded bond. Bonds are “escrowed to maturity” when the proceeds of the refunding issue are deposited in an escrow account for investment sufficient to pay all of the principal and interest on the original interest payment and maturity dates. Bonds are considered “pre-refunded” when the refunding issue’s proceeds are escrowed only until a permitted call date or dates on the refunded issue with the refunded issue being redeemed at the time, including any required premium. Bonds become “defeased” when the rights and interests of the bondholders and of their lien on the pledged revenues or other security under the terms of the bond contract are substituted with an alternative source of revenues (the escrow securities) sufficient to meet payments of principal and interest to maturity or to the first call dates. Escrowed secured bonds will often receive a rating of AAA from Moody’s Investors Service, Inc., Standard & Poor’s Ratings Group, and/or Fitch Ratings due to the strong credit quality of the escrow securities and the irrevocable nature of the escrow deposit agreement.
Each Fund may invest up to 15% of its total assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair each Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, each Fund’s Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of each Fund’s limitation on investments in illiquid assets. At February 28, 2007, there were no Rule 144A securities and no securities have been determined to be illiquid under each Fund’s Liquidity Procedures.
9. Contractual Obligations
The Funds enter into contracts in the normal course of business that contain a variety of indemnifications. The Funds’ maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts. Management has reviewed the Funds’ existing contracts and expects the risk of loss to be remote.
38
10. Subsequent Event
At a meeting on February 16, 2007, the Board of Trustees of Delaware Investments® Family of Funds approved the termination of new sales and most subsequent investments of Class B shares of each fund in the complex (each, a “Fund”). Effective at the close of business on May 31, 2007, no new or subsequent investments, including investments through automatic investment plans and by qualified retirement plans (such as 401(k) plans, 403(b) plans, or 457 plans), will be allowed in Class B shares of a Fund, except through a reinvestment of dividends or capital gains or permitted exchanges. Existing shareholders of Class B shares may continue to hold their Class B shares, reinvest dividends into Class B shares, and exchange their Class B shares of one Fund for Class B shares of another Fund, as permitted by existing exchange privileges. Existing Class B shareholders wishing to make subsequent purchases in a Fund’s shares will be permitted to invest in other classes of the Fund, subject to that class’ pricing structure and eligibility requirements, if any.
For Class B shares outstanding as of May 31, 2007 and Class B shares acquired upon reinvestment of dividends or capital gains, all Class B share attributes, including the contingent deferred sales charge (“CDSC”) schedules, conversion to Class A schedule, and distribution and service (12b-1) fees, will continue in their current form. However, effective at the close of business on May 31, 2007, reinvestment of redeemed shares with respect to Class B shares (which, as described in the prospectus, permits you to reinvest within 12 months of selling your shares and have any CDSC you paid on such shares credited back to your account) will be discontinued. In addition, because a Fund’s or its distributor’s ability to assess certain sales charges and fees is dependent on the sale of new shares, the termination of new purchases of Class B shares could ultimately lead to the elimination and/or reduction of such sales charges and fees. A Fund may not be able to provide shareholders with advance notice of the reduction in these sales charges and fees. You will be notified via a Prospectus Supplement if there are any changes to any attributes, sales charges, or fees.
39
About the organization
This semiannual report is for the information of Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, and Delaware Tax-Free Idaho Fund shareholders, but it may be used with prospective investors when preceded or accompanied by a current prospectus for Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, and Delaware Tax-Free Idaho Fund and the Delaware Investments® Performance Update for the most recently completed calendar quarter. The prospectus sets forth details about charges, expenses, investment objectives, and operating policies of the Funds. You should read the prospectus carefully before you invest. The figures in this report represent past results that are not a guarantee of future results. The return and principal value of an investment in the Funds will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
Board of trustees Patrick P. Coyne Thomas L. Bennett John A. Fry Anthony D. Knerr Lucinda S. Landreth Ann R. Leven Thomas F. Madison Janet L. Yeomans J. Richard Zecher | Affiliated officers David F. Connor David P. O’Connor John J. O’Connor Richard Salus | Contact information Investment manager National distributor Shareholder servicing, dividend For shareholders For securities dealers and financial Web site |
Delaware Investments is the marketing name of Delaware Management Holdings, Inc. and its subsidiaries.
Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. Each Fund’s Forms N-Q, as well as a description of the policies and procedures that each Fund uses to determine how to vote proxies (if any) relating to portfolio securities are available without charge (i) upon request, by calling 800 523-1918; (ii) on each Fund’s Web site at http://www.delawareinvestments.com; and (iii) on the Commission’s Web site at http://www.sec.gov. Each Fund’s Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330.
Information (if any) regarding how each Fund voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through each Fund’s Web site at http://www.delawareinvestments.com; and (ii) on the Commission’s Web site at http://www.sec.gov.
40
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Register for Account Access today! Please visit us at www.delawareinvestments.com, select Individual Investors, and click Account Access.
Please call our Shareholder Service Center at 800 523-1918 Monday through Friday from 8:00 a.m. to 7:00 p.m., Eastern Time, for assistance with any questions.
(1576) | Printed in the USA |
SA-WEST [2/07] CGI 4/07 | MF-07-03-148 PO11731 |
| ||
Semiannual Report | Delaware | |
Tax-Free Minnesota Fund | ||
Delaware | ||
Tax-Free Minnesota | ||
Insured Fund | ||
Delaware | ||
Tax-Free Minnesota | ||
Intermediate Fund | ||
Delaware | ||
Minnesota High-Yield | ||
Municipal Bond Fund | ||
February 28, 2007 | ||
|
Fixed income mutual funds
![]() | ![]() |
Table of contents
> Disclosure of Fund expenses | 1 | ||
> Sector allocations and credit quality breakdowns | 3 | ||
> Statements of net assets | 5 | ||
> Statements of operations | 21 | ||
> Statements of changes in net assets | 22 | ||
> Financial highlights | 24 | ||
> Notes to financial statements | 36 | ||
> About the organization | 44 |
Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.
Mutual fund advisory services provided by Delaware Management Company, a series of Delaware Management
Business Trust, which is a registered investment advisor.
© 2007 Delaware Distributors, L.P.
Disclosure of Fund expenses
For the period September 1, 2006 to February 28, 2007
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. 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 period September 1, 2006 to February 28, 2007.
Actual Expenses
The first section of the tables shown, “Actual Fund Return,” provides information about actual account values and actual expenses. You may use the information in this section of the table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second section of the tables shown, “Hypothetical 5% Return,” provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. Each Fund’s actual expenses shown in the tables reflect fee waivers in effect. The expenses shown in each table assume reinvestment of all dividends and distributions.
“Expenses Paid During Period” are equal to the Funds’ annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
Delaware Tax-Free Minnesota Fund
Expense Analysis of an Investment of $1,000
Expenses | ||||||||
Beginning | Ending | Paid During | ||||||
Account | Account | Annualized | Period | |||||
Value | Value | Expense | 9/1/06 to | |||||
9/1/06 | 2/28/07 | Ratio | 2/28/07 | |||||
Actual Fund Return | ||||||||
Class A | $1,000.00 | $1,028.60 | 1.24% | $6.24 | ||||
Class B | 1,000.00 | 1,024.80 | 1.99% | 9.99 | ||||
Class C | 1,000.00 | 1,024.70 | 1.99% | 9.99 | ||||
Hypothetical 5% Return (5% return before expenses) | ||||||||
Class A | $1,000.00 | $1,018.64 | 1.24% | $6.21 | ||||
Class B | 1,000.00 | 1,014.93 | 1.99% | 9.94 | ||||
Class C | 1,000.00 | 1,014.93 | 1.99% | 9.94 |
The expenses in the table above includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floaters programs. See Notes 1 and 7 in “Notes to Financial Statements.” |
Delaware Tax-Free Minnesota Insured Fund
Expense Analysis of an Investment of $1,000
Expenses | ||||||||
Beginning | Ending | Paid During | ||||||
Account | Account | Annualized | Period | |||||
Value | Value | Expense | 9/1/06 to | |||||
9/1/06 | 2/28/07 | Ratio | 2/28/07 | |||||
Actual Fund Return | ||||||||
Class A | $1,000.00 | $1,025.60 | 1.13% | $5.68 | ||||
Class B | 1,000.00 | 1,020.90 | 1.88% | 9.42 | ||||
Class C | 1,000.00 | 1,021.80 | 1.88% | 9.42 | ||||
Hypothetical 5% Return (5% return before expenses) | ||||||||
Class A | $1,000.00 | $1,019.19 | 1.13% | $5.66 | ||||
Class B | 1,000.00 | 1,015.47 | 1.88% | 9.39 | ||||
Class C | 1,000.00 | 1,015.47 | 1.88% | 9.39 |
The expenses in the table above includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floaters programs. See Notes 1 and 7 in “Notes to Financial Statements.” |
(continues) 1
Disclosure of Fund expenses
Delaware Tax-Free Minnesota Intermediate Fund
Expense Analysis of an Investment of $1,000
Expenses | ||||||||
Beginning | Ending | Paid During | ||||||
Account | Account | Annualized | Period | |||||
Value | Value | Expense | 9/1/06 to | |||||
9/1/06 | 2/28/07 | Ratio | 2/28/07 | |||||
Actual Fund Return | ||||||||
Class A | $1,000.00 | $1,025.10 | 0.77% | $3.87 | ||||
Class B | 1,000.00 | 1,020.70 | 1.62% | 8.12 | ||||
Class C | 1,000.00 | 1,020.80 | 1.62% | 8.12 | ||||
Hypothetical 5% Return (5% return before expenses) | ||||||||
Class A | $1,000.00 | $1,020.98 | 0.77% | $3.86 | ||||
Class B | 1,000.00 | 1,016.76 | 1.62% | 8.10 | ||||
Class C | 1,000.00 | 1,016.76 | 1.62% | 8.10 |
Delaware Minnesota High-Yield Municipal Bond Fund
Expense Analysis of an Investment of $1,000
Expenses | ||||||||
Beginning | Ending | Paid During | ||||||
Account | Account | Annualized | Period | |||||
Value | Value | Expense | 9/1/06 to | |||||
9/1/06 | 2/28/07 | Ratio | 2/28/07 | |||||
Actual Fund Return | ||||||||
Class A | $1,000.00 | $1,034.10 | 0.92% | $4.64 | ||||
Class B | 1,000.00 | 1,030.20 | 1.67% | 8.41 | ||||
Class C | 1,000.00 | 1,030.20 | 1.67% | 8.41 | ||||
Hypothetical 5% Return (5% return before expenses) | ||||||||
Class A | $1,000.00 | $1,020.23 | 0.92% | $4.61 | ||||
Class B | 1,000.00 | 1,016.51 | 1.67% | 8.35 | ||||
Class C | 1,000.00 | 1,016.51 | 1.67% | 8.35 |
The expenses in the table above includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floaters programs. See Notes 1 and 7 in “Notes to Financial Statements.” |
2
Sector allocations and credit quality breakdowns
As of February 28, 2007
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware Tax-Free Minnesota Fund | |
Percentage | |
Sector | of Net Assets |
Municipal Bonds | 106.04% |
Corporate-Backed Revenue Bonds | 6.12% |
Education Revenue Bonds | 6.27% |
Electric Revenue Bonds | 10.65% |
Escrowed to Maturity Bonds | 0.88% |
Health Care Revenue Bonds | 31.37% |
Housing Revenue Bonds | 8.73% |
Lease Revenue Bonds | 2.51% |
Local General Obligation Bonds | 15.46% |
Pre-Refunded Bonds | 12.69% |
Special Tax Bonds | 2.30% |
State General Obligation Bonds | 6.18% |
Transportation Revenue Bonds | 0.38% |
Water & Sewer Revenue Bonds | 2.50% |
Short-Term Investments | 0.53% |
Variable Rate Demand Notes | 0.53% |
Total Value of Securities | 106.57% |
Liabilities Net of Receivables and Other Assets | (6.57%) |
Total Net Assets | 100.00% |
Credit Quality Breakdown | |
(as a % of fixed income investments) | |
AAA | 35.24% |
AA | 16.86% |
A | 20.32% |
BBB | 14.66% |
BB | 1.65% |
Not Rated | 11.27% |
Total | 100.00% |
Delaware Tax-Free Minnesota Insured Fund | |
Percentage | |
Sector | of Net Assets |
Municipal Bonds | 104.68% |
Corporate-Backed Revenue Bonds | 0.81% |
Education Revenue Bonds | 6.14% |
Electric Revenue Bonds | 8.05% |
Escrowed to Maturity Bonds | 15.83% |
Health Care Revenue Bonds | 17.94% |
Housing Revenue Bonds | 4.21% |
Lease Revenue Bonds | 5.47% |
Local General Obligation Bonds | 27.77% |
Pre-Refunded Bonds | 14.20% |
Special Tax Bonds | 0.84% |
State General Obligation Bonds | 2.50% |
Transportation Revenue Bonds | 0.92% |
Total Value of Securities | 104.68% |
Liabilities Net of Receivables and Other Assets | (4.68%) |
Total Net Assets | 100.00% |
Credit Quality Breakdown | |
(as a % of fixed income investments) | |
AAA | 78.99% |
AA | 3.64% |
A | 12.99% |
BBB | 4.38% |
Total | 100.00% |
(continues) 3
Sector allocations and credit quality breakdowns
As of February 28, 2007
Sector designations may be different than the sector designations presented in other Fund materials.
Delaware Tax-Free Minnesota Intermediate Fund | |
Percentage | |
Sector | of Net Assets |
Municipal Bonds | 97.13% |
Corporate-Backed Revenue Bonds | 3.34% |
Education Revenue Bonds | 12.13% |
Electric Revenue Bonds | 1.97% |
Escrowed to Maturity Bonds | 2.11% |
Health Care Revenue Bonds | 23.29% |
Housing Revenue Bonds | 8.62% |
Lease Revenue Bonds | 3.87% |
Local General Obligation Bonds | 25.51% |
Pre-Refunded Bonds | 6.43% |
Special Tax Revenue Bonds | 1.54% |
State General Obligation Bonds | 6.86% |
Transportation Revenue Bonds | 1.46% |
Short-Term Investments | 2.28% |
Money Market Instrument | 0.28% |
Variable Rate Demand Notes | 2.00% |
Total Value of Securities | 99.41% |
Receivables and Other Assets Net of Liabilities | 0.59% |
Total Net Assets | 100.00% |
Credit Quality Breakdown | |
(as a % of fixed income investments) | |
AAA | 35.84% |
AA | 15.74% |
A | 18.76% |
BBB | 19.09% |
Not Rated | 10.57% |
Total | 100.00% |
Delaware Minnesota High-Yield Municipal Bond Fund | |
Percentage | |
Sector | of Net Assets |
Municipal Bonds | 97.38% |
Corporate-Backed Revenue Bonds | 3.80% |
Education Revenue Bonds | 7.71% |
Electric Revenue Bonds | 7.81% |
Health Care Revenue Bonds | 35.66% |
Housing Revenue Bonds | 15.59% |
Lease Revenue Bonds | 2.88% |
Local General Obligation Bonds | 11.66% |
Pre-Refunded Bonds | 5.96% |
Special Tax Bonds | 2.12% |
State General Obligation Bonds | 2.70% |
Transportation Revenue Bonds | 1.49% |
Short-Term Investments | 1.70% |
Variable Rate Demand Notes | 1.70% |
Total Value of Securities | 99.08% |
Receivables and Other Assets Net of Liabilities | 0.92% |
Total Net Assets | 100.00% |
Credit Quality Breakdown | |
(as a % of fixed income investments) | |
AAA | 17.18% |
AA | 18.11% |
A | 20.09% |
BBB | 16.52% |
BB | 1.32% |
Not Rated | 26.78% |
Total | 100.00% |
4
Statements of net assets
Delaware Tax-Free Minnesota Fund
February 28, 2007 (Unaudited)
Principal | |||||
Amount | Value | ||||
Municipal Bonds – 106.04% | |||||
Corporate-Backed Revenue Bonds – 6.12% | |||||
Cloquet Pollution Control Revenue | |||||
(Potlatch Corp. Project) | |||||
5.90% 10/1/26 | $ | 6,500,000 | $ | 6,672,185 | |
Laurentian Energy Authority I | |||||
Cogeneration Revenue | |||||
Series A 5.00% 12/1/21 | 8,000,000 | 8,271,760 | |||
Sartell Environmental Improvement | |||||
Revenue (International Paper) | |||||
Series A 5.20% 6/1/27 | 5,465,000 | 5,660,101 | |||
Seaway Port Authority of Duluth | |||||
Industrial Development Dock | |||||
& Wharf Revenues | |||||
(Cargill, Inc. Project) Series E | |||||
6.125% 11/1/14 | 4,500,000 | 4,598,010 | |||
25,202,056 | |||||
Education Revenue Bonds – 6.27% | |||||
Minnesota State Colleges & | |||||
Universities Revenue Fund | |||||
Series A 5.00% 10/1/29 (MBIA) | 1,665,000 | 1,784,364 | |||
Minnesota State Higher Education | |||||
Facilities Authority Revenue | |||||
(Augsburg College) | |||||
Series 6-C 5.00% 5/1/20 | 1,250,000 | 1,313,700 | |||
Series J1 5.00% 5/1/36 | 2,225,000 | 2,311,063 | |||
(College of St. Benedict) | |||||
Series 4-G 6.20% 3/1/16 | 1,000,000 | 1,001,710 | |||
(St. Catherine College) | |||||
Series 5-N1 | |||||
5.25% 10/1/22 | 1,500,000 | 1,579,230 | |||
5.375% 10/1/32 | 1,000,000 | 1,059,000 | |||
University of Minnesota | |||||
&15.50% 7/1/21 | 10,500,000 | 12,249,405 | |||
&25.75% 7/1/18 | 3,840,000 | 4,534,253 | |||
25,832,725 | |||||
Electric Revenue Bonds – 10.65% | |||||
Chaska Electric Revenue | |||||
(Generating Facilities) | |||||
Series A 5.00% 10/1/30 | 3,000,000 | 3,148,320 | |||
Minnesota State Municipal | |||||
Power Agency | |||||
5.00% 10/1/35 | 3,000,000 | 3,152,700 | |||
Series A 5.00% 10/1/34 | 4,250,000 | 4,444,990 | |||
Series A 5.125% 10/1/29 | 3,000,000 | 3,167,700 | |||
Northern Minnesota Municipal | |||||
Power Agency Electric | |||||
System Revenue | |||||
^Series A 5.849% 1/1/09 (AMBAC) | 3,815,000 | 3,563,324 | |||
Series B 4.75% 1/1/20 (AMBAC) | 2,500,000 | 2,561,600 | |||
Rochester Electric Utilities | |||||
Revenue 5.25% 12/1/30 | 4,915,000 | 5,120,988 | |||
Shakopee Public Utilities | |||||
Commission Revenue | |||||
5.125% 2/1/26 (MBIA) | 1,000,000 | 1,026,120 | |||
Southern Minnesota Municipal | |||||
Power Agency Supply | |||||
System Revenue Series A | |||||
^4.439% 1/1/25 (MBIA) | 5,000,000 | 2,373,450 | |||
5.25% 1/1/15 (AMBAC) | 3,000,000 | 3,312,780 | |||
5.75% 1/1/18 (MBIA) | 1,000,000 | 1,095,580 | |||
Southern Minnesota Municipal | |||||
Power Agency Supply | |||||
System Revenue | |||||
&35.25% 1/1/14 (AMBAC) | 4,000,000 | 4,377,840 | |||
&45.25% 1/1/15 (AMBAC) | 5,900,000 | 6,515,134 | |||
43,860,526 | |||||
Escrowed to Maturity Bonds – 0.88% | |||||
Southern Minnesota Municipal | |||||
Power Agency Supply System | |||||
Revenue Series B | |||||
5.50% 1/1/15 (AMBAC) | 990,000 | 1,027,699 | |||
University of Minnesota Series A | |||||
5.50% 7/1/21 | 2,000,000 | 2,333,240 | |||
Western Minnesota Municipal | |||||
Power Agency Supply Revenue | |||||
Series A 9.75% 1/1/16 (MBIA) | 185,000 | 263,242 | |||
3,624,181 | |||||
Health Care Revenue Bonds – 31.37% | |||||
Aitkin Health Care Facilities | |||||
Revenue (Riverwood Health | |||||
Care Center) 5.60% 2/1/32 | 1,500,000 | 1,553,505 | |||
Apple Valley Economic | |||||
Development Authority | |||||
Health Care Revenue | |||||
(Augustana Home St. Paul | |||||
Project) Series A | |||||
6.00% 1/1/40 | 2,700,000 | 2,787,750 | |||
(Evercare Senior Living | |||||
Project) Series A | |||||
6.125% 6/1/35 | 4,000,000 | 4,073,240 | |||
Bemidji Hospital Facilities First | |||||
Meeting Revenue (North | |||||
Country Health Services) | |||||
5.00% 9/1/24 (RADIAN) | 740,000 | 770,133 | |||
Bloomington Housing & | |||||
Redevelopment Authority | |||||
Housing Revenue (Senior | |||||
Summerhouse Bloomington | |||||
Project, Presbyterian Homes | |||||
Housing & Assisted Living) | |||||
6.125% 5/1/35 | 3,420,000 | 3,476,191 | |||
Breckenridge Catholic Health | |||||
Initiatives Series A | |||||
5.00% 5/1/30 | 2,500,000 | 2,626,600 |
(continues) 5
Statements of net assets
Delaware Tax-Free Minnesota Fund
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Health Care Revenue Bonds (continued) | |||||
Buffalo Health Care Revenue | |||||
(Central Minnesota Senior | |||||
Housing Project) Series A | |||||
5.50% 9/1/33 | $ | 1,270,000 | $ | 1,287,348 | |
Duluth Economic Development | |||||
Authority Health Care Facilities | |||||
Revenue Benedictine Health | |||||
System (St. Mary’s Hospital) | |||||
5.25% 2/15/33 | 10,000,000 | 10,507,999 | |||
5.50% 2/15/23 | 1,000,000 | 1,076,840 | |||
Maple Grove Health Care | |||||
Facilities Revenue (North | |||||
Memorial Health Care) | |||||
5.00% 9/1/29 | 1,000,000 | 1,050,890 | |||
5.00% 9/1/35 | 5,850,000 | 6,113,777 | |||
Minneapolis Health Care Facility | |||||
Revenue (Jones-Harrison | |||||
Residence Project) | |||||
5.60% 10/1/30 | 1,550,000 | 1,580,613 | |||
Minneapolis Health Care | |||||
System Revenue | |||||
(Allina Health Systems) | |||||
Series A 5.75% 11/15/32 | 9,500,000 | 10,303,224 | |||
(Fairview Health Services) | |||||
Series D | |||||
5.00% 11/15/30 (AMBAC) | 2,500,000 | 2,664,250 | |||
5.00% 11/15/34 (AMBAC) | 2,500,000 | 2,662,375 | |||
Minnesota Agricultural & | |||||
Economic Development | |||||
Board Revenue | |||||
(Benedictine Health Systems) | |||||
5.75% 2/1/29 | 1,895,000 | 1,937,884 | |||
(Fairview Health Care System) | |||||
Series A 6.375% 11/15/29 | 15,000 | 16,257 | |||
Northfield Hospital Revenue | |||||
5.375% 11/1/26 | 3,785,000 | 4,069,897 | |||
Northfield Housing & | |||||
Redevelopment Authority | |||||
Series A 5.375% 12/1/36 | 1,000,000 | 1,004,630 | |||
Prior Lake Senior Housing | |||||
Revenue (Shepherds Path | |||||
Senior Housing) Series B | |||||
5.70% 8/1/36 | 2,000,000 | 2,075,180 | |||
5.75% 8/1/41 | 1,000,000 | 1,026,130 | |||
Rochester Health Care | |||||
Facilities Revenue | |||||
(Mayo Clinic) 5.00% 11/15/36 | 7,000,000 | 7,415,520 | |||
(Mayo Foundation) Series B | |||||
5.50% 11/15/27 | 700,000 | 720,377 | |||
Rochester Health Care Facilities | |||||
Revenue (Mayo Foundation) | |||||
&5Series A 5.50% 11/15/27 | 4,200,000 | 4,322,262 | |||
&6Series B 5.50% 11/15/27 | 16,750,000 | 17,237,593 | |||
Shakopee Health Care Facilities | |||||
Revenue (St. Francis Regional | |||||
Medical Center) | |||||
5.10% 9/1/25 | 2,000,000 | 2,102,920 | |||
5.25% 9/1/34 | 7,000,000 | 7,379,190 | |||
Sherburne County Health Care | |||||
Facilities Revenue | |||||
(Guardian Angels Health | |||||
Services) 5.55% 10/1/36 | 1,500,000 | 1,529,955 | |||
St. Louis Park Health Care | |||||
Facilities Revenue | |||||
(Park Nicollet Health Services) | |||||
Series B 5.25% 7/1/30 | 9,420,000 | 9,992,923 | |||
St. Paul Housing & | |||||
Redevelopment Authority | |||||
Health Care Facilities Revenue | |||||
(Health Partners Obligation | |||||
Group Project) 5.25% 5/15/36 | 6,000,000 | 6,365,100 | |||
St. Paul Housing & | |||||
Redevelopment Authority | |||||
Hospital Revenue | |||||
(Health East Project) | |||||
6.00% 11/15/35 | 4,340,000 | 4,825,820 | |||
Series A 5.70% 11/1/15 | 1,300,000 | 1,336,400 | |||
Washington County Housing & | |||||
Redevelopment Authority | |||||
Hospital Facilities Revenue | |||||
(Health East Project) | |||||
5.50% 11/15/27 | 1,000,000 | 1,024,090 | |||
Woodbury Economic | |||||
Development Authority | |||||
Housing Revenue (Senior | |||||
Summerhouse Woodbury | |||||
Project) Series B | |||||
5.75% 6/1/41 | 2,250,000 | 2,324,925 | |||
129,241,788 | |||||
Housing Revenue Bonds – 8.73% | |||||
Brooklyn Center Multifamily Housing | |||||
Revenue (Shingle Creek) | |||||
5.40% 5/20/43 (GNMA) (AMT) | 1,000,000 | 1,037,510 | |||
Hopkins Multifamily Housing | |||||
Revenue (Hopkins Renaissance | |||||
Project-Section 8) 6.375% 4/1/20 | 1,000,000 | 1,021,990 | |||
@Hutchinson Multifamily | |||||
Housing Revenue (Evergreen | |||||
Apartments Project-Section 8) | |||||
5.75% 11/1/28 | 870,000 | 849,190 | |||
Minneapolis Multifamily | |||||
Housing Revenue | |||||
(Grant Street Apartments | |||||
Project) Series A | |||||
7.25% 11/1/29 | 750,000 | 780,368 | |||
(Seward Towers Project) | |||||
5.00% 5/20/36 (GNMA) | 4,000,000 | 4,170,920 |
6
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Housing Revenue Bonds (continued) | |||||
Minneapolis Multifamily | |||||
Housing Revenue (continued) | |||||
(Sumner Field) Series A | |||||
5.50% 11/20/26 | |||||
(GNMA) (AMT) | $ | 980,000 | $ | 1,030,695 | |
(Trinity Apartments-Section 8) | |||||
Series A 6.75% 5/1/21 | 1,750,000 | 1,833,160 | |||
Minnesota State Housing Finance | |||||
Agency Residential Housing | |||||
·Series D 4.80% 7/1/38 (AMT) | 2,500,000 | 2,524,800 | |||
Series I 5.15% 7/1/38 (AMT) | 5,550,000 | 5,778,382 | |||
Series M 4.875% 7/1/37 (AMT) | 4,500,000 | 4,593,734 | |||
Minnesota State Housing Finance | |||||
Agency Single Family Mortgage | |||||
Series A 5.30% 7/1/19 | 555,000 | 580,203 | |||
Series B 5.35% 1/1/33 (AMT) | 2,965,000 | 3,061,422 | |||
Series J 5.90% 7/1/28 (AMT) | 465,000 | 479,559 | |||
@Park Rapids Multifamily Revenue | |||||
(The Court Apartments | |||||
Project-Section 8) 6.30% 2/1/20 | 2,805,000 | 2,728,844 | |||
St. Cloud Housing & | |||||
Redevelopment Authority | |||||
Revenue (Sterling Heights | |||||
Apartments Project) | |||||
7.55% 4/1/39 (AMT) | 1,000,000 | 1,064,400 | |||
St. Louis Park Residential | |||||
Mortgage Revenue Series A | |||||
7.25% 4/20/23 (GNMA) | 13,000 | 13,178 | |||
Stillwater Multifamily Housing | |||||
Revenue (Stillwater | |||||
Cottages Project) | |||||
7.25% 11/1/27 (AMT) | 1,540,000 | 1,573,233 | |||
Series A 7.00% 11/1/27 | 1,000,000 | 1,021,470 | |||
Washington County Housing & | |||||
Redevelopment Authority | |||||
Governmental Revenue | |||||
(BriarPond) Series C | |||||
7.25% 8/20/34 | 950,000 | 928,426 | |||
Willmar Housing & Redevelopment | |||||
Authority Multifamily | |||||
Housing Revenue (Highland | |||||
Apartments-Section 8) | |||||
5.85% 6/1/19 | 910,000 | 910,137 | |||
35,981,621 | |||||
Lease Revenue Bonds – 2.51% | |||||
Puerto Rico Public Buildings | |||||
Authority Revenue | |||||
(Government Facilities) | |||||
Series D 5.25% 7/1/36 | 1,070,000 | 1,129,749 | |||
St. Paul Port Authority Lease | |||||
Revenue (Cedar Street Office | |||||
Building Project) | |||||
5.00% 12/1/22 | 2,500,000 | 2,636,500 | |||
5.125% 12/1/27 | 1,000,000 | 1,067,020 | |||
St. Paul Port Authority Lease | |||||
Revenue (continued) | |||||
(Robert Street Office | |||||
Building Project) | |||||
4.75% 12/1/23 | 2,000,000 | 2,077,740 | |||
5.00% 12/1/27 | 2,500,000 | 2,650,425 | |||
Series 9 5.25% 12/1/27 | 725,000 | 776,352 | |||
10,337,786 | |||||
Local General Obligation Bonds – 15.46% | |||||
Bloomington Independent | |||||
School District #271 Series B | |||||
5.00% 2/1/17 | 5,300,000 | 5,488,467 | |||
Cambridge Independent School | |||||
District #911 Series A | |||||
4.75% 2/1/30 (MBIA) | 1,035,000 | 1,074,061 | |||
Dakota County Capital | |||||
Improvement Series A | |||||
4.75% 2/1/26 | 1,000,000 | 1,027,150 | |||
Farmington Independent | |||||
School District #192 Series B | |||||
5.00% 2/1/27 (FSA) | 6,705,000 | 7,172,807 | |||
^Farmington Independent | |||||
School District #192 Capital | |||||
Appreciation Series B | |||||
5.422% 2/1/20 (FSA) | 1,650,000 | 878,757 | |||
5.34% 2/1/21 (FSA) | 1,500,000 | 756,675 | |||
Hennepin County Regional | |||||
Railroad Authority | |||||
5.00% 12/1/31 | 4,030,000 | 4,171,937 | |||
^Lakeville Independent School | |||||
District #194 Capital | |||||
Appreciation Series B | |||||
5.45% 2/1/19 (FSA) | 8,000,000 | 4,371,600 | |||
Lakeville Independent School | |||||
District #194 Series A | |||||
4.75% 2/1/22 (FSA) | 5,500,000 | 5,737,654 | |||
^Mahtomedi Independent | |||||
School District #832 Capital | |||||
Appreciation Series B | |||||
5.898% 2/1/14 (MBIA) | 1,540,000 | 1,176,175 | |||
Metropolitan Council Waste | |||||
Water Treatment Series B | |||||
5.00% 12/1/21 | 1,200,000 | 1,295,484 | |||
Minneapolis Library | |||||
5.00% 12/1/25 | 1,500,000 | 1,580,325 | |||
Minneapolis Tax Increment | |||||
Revenue (St. Anthony Falls | |||||
Project) 5.75% 2/1/27 | 1,000,000 | 1,036,590 | |||
New Brighton Tax Increment | |||||
Series A | |||||
5.00% 2/1/27 (MBIA) | 1,000,000 | 1,084,210 | |||
5.00% 2/1/28 (MBIA) | 1,000,000 | 1,081,650 | |||
Prior Lake Independent School | |||||
District #719 Series B | |||||
5.00% 2/1/19 (FSA) | 3,145,000 | 3,399,745 | |||
Ramsey County State Aid | |||||
Series C 5.00% 2/1/28 | 1,060,000 | 1,121,406 |
(continues) 7
Statements of net assets
Delaware Tax-Free Minnesota Fund
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Local General Obligation Bonds (continued) | |||||
&7Rockford Independent | |||||
School District #883 | |||||
5.625% 2/1/23 (FSA) | $ | 7,020,000 | $ | 7,390,165 | |
^Rosemont Independent School | |||||
District #196 Capital | |||||
Appreciation Series B | |||||
5.931% 4/1/11 (FSA) | 2,600,000 | 2,225,288 | |||
5.960% 4/1/12 (FSA) | 1,850,000 | 1,521,995 | |||
6.008% 4/1/13 (FSA) | 1,915,000 | 1,512,601 | |||
^Sartell Independent School | |||||
District #748 Capital | |||||
Appreciation Series B | |||||
5.976% 2/1/13 (MBIA) | 540,000 | 429,916 | |||
6.10% 2/1/15 (MBIA) | 1,075,000 | 790,609 | |||
6.15% 2/1/16 (MBIA) | 1,750,000 | 1,236,900 | |||
St. Peter’s Hospital Series A | |||||
5.00% 9/1/24 (MBIA) | 1,905,000 | 1,973,085 | |||
Todd Morrison Cass & Wadena | |||||
Counties United Hospital | |||||
District (Health Care | |||||
Facilities-Lakewood) | |||||
5.00% 12/1/21 | 2,000,000 | 2,083,360 | |||
5.00% 12/1/34 | 1,000,000 | 1,030,390 | |||
5.125% 12/1/24 | 1,000,000 | 1,051,170 | |||
63,700,172 | |||||
§Pre-Refunded Bonds – 12.69% | |||||
Chaska Electric Revenue Series A | |||||
6.00% 10/1/25-10 | 1,000,000 | 1,079,270 | |||
Little Canada Multifamily | |||||
Housing Revenue Alternative | |||||
Development (Montreal | |||||
Courts Apartments Project) | |||||
Series A | 1,190,000 | 1,204,637 | |||
6.099% 12/1/17-07 | |||||
6.25% 12/1/27-07 | 2,900,000 | 2,952,287 | |||
Marshall Medical Center Gross | |||||
Revenue (Weiner Memorial | |||||
Medical Center Project) | |||||
6.00% 11/1/28-09 | 1,000,000 | 1,050,320 | |||
Minneapolis Health Care | |||||
System Revenue (Fairview | |||||
Health Services) Series A | |||||
5.625% 5/15/32-12 | 11,525,000 | 12,665,630 | |||
Minneapolis Tax Increment | |||||
Revenue Series E | |||||
5.00% 3/1/13-09 | 6,265,000 | 6,432,839 | |||
Minneapolis/St. Paul Metropolitan | |||||
Airports Commission Revenue | |||||
Series A | |||||
5.00% 1/1/22-08 (AMBAC) | 3,440,000 | 3,512,378 | |||
5.25% 1/1/32-11 (FGIC) | 5,000,000 | 5,285,000 | |||
Series C | |||||
5.25% 1/1/32-11 (FGIC) | 2,250,000 | 2,378,250 | |||
5.50% 1/1/17-11 (FGIC) | 2,500,000 | 2,664,725 | |||
Minnesota Agricultural & | |||||
Economic Development | |||||
Board Revenue (Fairview | |||||
Health Care System) Series A | |||||
6.375% 11/15/29-10 | 485,000 | 534,276 | |||
Minnesota Public Facilities | |||||
Authority Water Pollution | |||||
Control Revenue | |||||
Series A 5.00% 3/1/20-10 | 3,000,000 | 3,116,550 | |||
Series B 4.75% 3/1/19-09 | 2,000,000 | 2,043,200 | |||
Puerto Rico Public Buildings | |||||
Authority Guaranteed | |||||
Government Facilities | |||||
Revenue Series D | |||||
5.25% 7/1/36-12 | 2,930,000 | 3,153,295 | |||
Rochester Multifamily | |||||
Housing Revenue (Wedum | |||||
Shorewood Campus Project) | |||||
6.60% 6/1/36-09 | 3,890,000 | 4,196,532 | |||
52,269,189 | |||||
Special Tax Bonds – 2.30% | |||||
^Minneapolis Community | |||||
Development Agency Tax | |||||
Increment Revenue | |||||
6.674% 9/1/09 (MBIA) | 5,750,000 | 5,238,365 | |||
Puerto Rico Commonwealth | |||||
Infrastructure Financing | |||||
Authority Revenue Series B | |||||
5.00% 7/1/46 | 4,000,000 | 4,220,880 | |||
9,459,245 | |||||
State General Obligation Bonds – 6.18% | |||||
Minnesota State | |||||
5.00% 11/1/20 (FSA) | 8,175,000 | 8,538,052 | |||
5.00% 8/1/21 | 2,400,000 | 2,536,296 | |||
Minnesota State Refunding | |||||
Various Purposes | |||||
5.00% 6/1/13 | 5,175,000 | 5,261,785 | |||
Puerto Rico Commonwealth | |||||
Public Improvement Series A | |||||
5.00% 7/1/34 | 4,500,000 | 4,720,815 | |||
5.50% 7/1/19 (MBIA) | 1,500,000 | 1,748,475 | |||
Puerto Rico Commonwealth | |||||
Series B 5.00% 7/1/35 | 1,500,000 | 1,590,075 | |||
Puerto Rico Government | |||||
Development Bank Senior | |||||
Notes Series B 5.00% 12/1/14 | 1,000,000 | 1,072,760 | |||
25,468,258 | |||||
Transportation Revenue Bonds – 0.38% | |||||
Minneapolis/St. Paul Metropolitan | |||||
Airports Commission Revenue | |||||
Series A 5.25% 1/1/16 (MBIA) | 1,460,000 | 1,571,077 | |||
1,571,077 |
8
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Water & Sewer Revenue Bonds – 2.50% | ||||||
&8Minnesota Public Facilities | ||||||
Authority Water Pollution | ||||||
Control Revenue | ||||||
5.25% 3/1/18 | $ | 10,000,000 | $ | 10,312,000 | ||
10,312,000 | ||||||
Total Municipal Bonds | ||||||
(cost $414,695,226) | 436,860,624 | |||||
Short-Term Investments – 0.53% | ||||||
·Variable Rate Demand Notes – 0.53% | ||||||
St. Paul Housing & | ||||||
Redevelopment Authority | ||||||
Revenue (Pur-Cretin-Derham | ||||||
Hall Project) 3.67% 2/1/26 | 300,000 | 300,000 | ||||
University of Minnesota Series C | ||||||
3.50% 12/1/36 | 1,900,000 | 1,900,000 | ||||
Total Short-Term Investments | ||||||
(cost $2,200,000) | 2,200,000 | |||||
Total Value of Securities – 106.57% | ||||||
(cost $416,895,226) | 439,060,624 | |||||
Liabilities Net of Receivables and | ||||||
Other Assets – (6.57%)* | (27,099,935) | |||||
Net Assets Applicable to 32,741,251 | ||||||
Shares Outstanding – 100.00% | $ | 411,960,689 | ||||
Net Asset Value – Delaware Tax-Free Minnesota | ||||||
Fund Class A ($385,360,481 / 30,631,114 Shares) | $12.58 | |||||
Net Asset Value – Delaware Tax-Free Minnesota | ||||||
Fund Class B ($10,614,930 / 843,097 Shares) | $12.59 | |||||
Net Asset Value – Delaware Tax-Free Minnesota | ||||||
Fund Class C ($15,985,278 / 1,267,040 Shares) | $12.62 | |||||
Components of Net Assets at February 28, 2007: | ||||||
Shares of beneficial interest | ||||||
(unlimited authorization - no par) | $ | 390,712,670 | ||||
Distributions in excess of net investment income | (22,418) | |||||
Accumulated net realized loss on investments | (894,961) | |||||
Net unrealized appreciation of investments | 22,165,398 | |||||
Total net assets | $ | 411,960,689 |
Summary of Abbreviations: | ||
AMBAC — Insured by the AMBAC Assurance Corporation | ||
AMT — Subject to Alternative Minimum Tax | ||
FGIC — Insured by the Financial Guaranty Insurance Company | ||
FSA — Insured by Financial Security Assurance | ||
GNMA — Insured by Government National Mortgage Association | ||
MBIA — Insured by the Municipal Bond Insurance Association | ||
RADIAN — Insured by Radian Asset Assurance | ||
@ | illiquid security. At February 28, 2007, the aggregate amount of illiquid securities equaled $3,578,034, which represented 0.87% of the Fund’s net assets. See Note 9 in “Notes to Financial Statements.” | |||
• | Variable rate security. The rate shown is the rate as of February 28, 2007. | |||
^ | Zero coupon security. The interest rate shown is the yield at the time of purchase. | |||
§ | Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S. Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 9 in “Notes to Financial Statements.” | |||
&1 | Security held in a trust in connection with the Inverse Floater security $5,250,000, 7.203%, 7/1/21. | |||
&2 | Security held in a trust in connection with the Inverse Floater security $1,920,000, 7.710%, 7/1/18. | |||
&3 | Security held in a trust in connection with the Inverse Floater security $2,000,000, 7.716%, 1/1/14. | |||
&4 | Security held in a trust in connection with the Inverse Floater security $2,950,000, 6.716%, 1/1/15. | |||
&5 | Security held in a trust in connection with the Inverse Floater security $2,100,000, 7.203%, 11/15/27. | |||
&6 | Security held in a trust in connection with the Inverse Floater security $8,375,000, 7.203%, 11/15/27. | |||
&7 | Security held in a trust in connection with the Inverse Floater security $3,510,000, 7.456%, 2/1/23. | |||
&8 | Security held in a trust in connection with the Inverse Floater security $5,000,000, 6.696%, 3/1/18. | |||
* | Includes $31,105,000 in liability for Inverse Floater programs. See Note 7 in “Notes to Financial Statements.” | |||
For additional information on the Inverse Floater programs, see Note 7 in “Notes to Financial Statements.” | ||||
Net Asset Value and Offering Price per Share – | ||||
Delaware Tax-Free Minnesota Fund | ||||
Net asset value Class A (A) | $ | 12.58 | ||
Sales charge (4.50% of offering price) (B) | 0.59 | |||
Offering price | $ | 13.17 | ||
(A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. | |||
(B) | See the current prospectus for purchases of $100,000 or more. | |||
See accompanying notes |
(continues) 9
Statements of net assets
Delaware Tax-Free Minnesota Insured Fund
February 28, 2007 (Unaudited)
Principal | |||||
Amount | Value | ||||
Municipal Bonds – 104.68% | |||||
Corporate-Backed Revenue Bonds – 0.81% | |||||
Sartell Environmental Improvement | |||||
Revenue (International Paper) | |||||
Series A 5.20% 6/1/27 | $ | 1,800,000 | $ | 1,864,260 | |
1,864,260 | |||||
Education Revenue Bonds – 6.14% | |||||
Minnesota State Colleges & | |||||
Universities Revenue Fund | |||||
Series A | |||||
5.00% 10/1/22 (FSA) | 5,135,000 | 5,408,233 | |||
5.00% 10/1/29 (MBIA) | 4,000,000 | 4,286,760 | |||
Minnesota State Higher Education | |||||
Facilities Authority Revenue | |||||
(St. Catherine College) | |||||
Series 5-N1 5.00% 10/1/18 | 2,200,000 | 2,296,844 | |||
St. Cloud Housing & | |||||
Redevelopment Authority | |||||
Revenue (State University | |||||
Foundation Project) | |||||
5.00% 5/1/23 | 2,000,000 | 2,100,660 | |||
14,092,497 | |||||
Electric Revenue Bonds – 8.05% | |||||
Minnesota State Municipal | |||||
Power Agency Series A | |||||
5.00% 10/1/34 | 2,000,000 | 2,091,760 | |||
&1Northern Municipal Power | |||||
Agency Electric System | |||||
Revenue 5.25% 1/1/13 (FSA) | 9,170,000 | 9,601,861 | |||
Puerto Rico Electric Power | |||||
Authority Power Revenue | |||||
Series GG 4.75% 9/1/21 (FSA) | 1,000,000 | 1,031,230 | |||
Series OO 5.00% 7/1/13 (CIFG) | 1,315,000 | 1,414,243 | |||
Shakopee Public Utilities | |||||
Commission Revenue | |||||
5.125% 2/1/26 (MBIA) | 1,850,000 | 1,898,322 | |||
Western Minnesota Municipal | |||||
Power Agency Revenue | |||||
5.00% 1/1/36 (FSA) | 2,250,000 | 2,419,133 | |||
18,456,549 | |||||
Escrowed to Maturity Bonds – 15.83% | |||||
Dakota/Washington | |||||
Counties Housing & | |||||
Redevelopment Authority | |||||
Anoka Single Family | |||||
Residential Mortgage Revenue | |||||
8.45% 9/1/19 (GNMA) (AMT) | 9,000,000 | 12,913,740 | |||
Bloomington Mortgage | |||||
Single Family Residential | |||||
Mortgage Revenue | |||||
8.15% 9/1/16 (MBIA) | |||||
(GNMA) (AMT) | 405,000 | 540,691 | |||
8.375% 9/1/21 (GNMA) | |||||
(FHA) (VA) (AMT) | 14,115,000 | 20,751,309 | |||
Western Minnesota Municipal | |||||
Power Agency Supply | |||||
Revenue Series A | |||||
6.60% 1/1/10 | 1,275,000 | 1,337,870 | |||
9.75% 1/1/16 (MBIA) | 530,000 | 754,153 | |||
36,297,763 | |||||
Health Care Revenue Bonds – 17.94% | |||||
Duluth Economic Development | |||||
Authority Health Care | |||||
Facilities Benedictine Health | |||||
System (St. Mary’s Hospital) | |||||
5.25% 2/15/28 | 8,500,000 | 8,994,444 | |||
Minneapolis Health Care | |||||
System Revenue | |||||
(Allina Health Systems) | |||||
Series A 5.75% 11/15/32 | 7,800,000 | 8,459,490 | |||
(Fairview Health Services) | |||||
Series D 5.00% 11/15/34 | |||||
(AMBAC) | 8,250,000 | 8,785,838 | |||
Minneapolis/St. Paul Housing | |||||
& Redevelopment Authority | |||||
Health Care System Revenue | |||||
(Allina Health System) | |||||
5.00% 11/15/13 (AMBAC) | 6,490,000 | 6,535,300 | |||
(Health Partners Obligation | |||||
Group Project) | |||||
5.625% 12/1/22 | 650,000 | 699,017 | |||
5.875% 12/1/29 | 1,000,000 | 1,089,310 | |||
Minnesota Agricultural & | |||||
Economic Development | |||||
Board Revenue (Fairview | |||||
Health Care System) Series A | |||||
5.75% 11/15/26 (MBIA) | 180,000 | 185,852 | |||
St. Louis Park Health Care | |||||
Facilities Revenue (Park | |||||
Nicollet Health Services) | |||||
Series B 5.50% 7/1/25 | 2,000,000 | 2,167,280 | |||
St. Paul Housing & Redevelopment | |||||
Authority Health Care Facilities | |||||
Revenue (Health Partners | |||||
Obligation Group Project) | |||||
5.25% 5/15/36 | 2,000,000 | 2,121,700 | |||
Willmar (Rice Memorial | |||||
Hospital Project) | |||||
5.00% 2/1/22 (FSA) | 1,000,000 | 1,061,740 | |||
5.00% 2/1/25 (FSA) | 1,000,000 | 1,058,480 | |||
41,158,451 | |||||
Housing Revenue Bonds – 4.21% | |||||
Dakota County Housing & | |||||
Redevelopment Authority | |||||
Single Family Mortgage | |||||
Revenue Series B | |||||
5.85% 10/1/30 (GNMA) | |||||
(FNMA) (AMT) | 221,000 | 225,572 |
10
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Housing Revenue Bonds (continued) | |||||
Eagan Multifamily Revenue | |||||
(Woodridge Apartments) | |||||
Series A 5.90% 8/1/20 (GNMA) | $ | 1,000,000 | $ | 1,021,340 | |
Minneapolis Multifamily | |||||
Housing Revenue | |||||
(Bottineau Commons Project) | |||||
5.45% 4/20/43 (GNMA) (AMT) | 1,500,000 | 1,578,975 | |||
(Seward Towers Project) | |||||
5.00% 5/20/36 (GNMA) | 4,000,000 | 4,170,920 | |||
Minnesota State Housing | |||||
Finance Agency Rental | |||||
Housing Revenue Series C-2 | |||||
5.95% 2/1/15 (AMBAC) | 1,642,000 | 1,644,299 | |||
White Bear Lake Multifamily | |||||
Revenue (Lake Square) | |||||
Series A 5.875% 2/1/15 (FHA) | 1,005,000 | 1,026,236 | |||
9,667,342 | |||||
Lease Revenue Bonds – 5.47% | |||||
Hopkins Housing & | |||||
Redevelopment Authority | |||||
Public Works and Fire Station | |||||
Series A 5.00% 2/1/23 (MBIA) | 1,210,000 | 1,281,414 | |||
Minneapolis Special School | |||||
District #001 Series A | |||||
5.00% 2/1/18 (FSA) | 1,545,000 | 1,629,295 | |||
5.00% 2/1/19 (FSA) | 1,535,000 | 1,616,631 | |||
5.00% 2/1/20 (FSA) | 1,690,000 | 1,779,874 | |||
St. Paul Port Authority Lease | |||||
Revenue (Cedar Street Office | |||||
Building Project) | |||||
5.125% 12/1/27 | 2,000,000 | 2,134,040 | |||
5.25% 12/1/27 | 3,840,000 | 4,097,703 | |||
12,538,957 | |||||
Local General Obligation Bonds – 27.77% | |||||
Big Lake Independent School | |||||
District #727 Series A | |||||
5.00% 2/1/17 (FSA) | 1,040,000 | 1,076,982 | |||
5.00% 2/1/20 (FSA) | 1,000,000 | 1,035,560 | |||
Centennial Independent School | |||||
District #012 Series A | |||||
5.00% 2/1/18 (FSA) | 1,270,000 | 1,339,291 | |||
Dakota County Community | |||||
Development Agency | |||||
Governmental Housing | |||||
Development 5.00% 1/1/21 | 1,275,000 | 1,337,131 | |||
Farmington Independent School | |||||
District #192 Series B | |||||
5.00% 2/1/27 (FSA) | 4,000,000 | 4,279,080 | |||
Lakeville Independent School | |||||
District #194 Series A | |||||
4.75% 2/1/22 (FSA) | 2,350,000 | 2,451,544 | |||
Morris Independent School | |||||
District #769 5.00% 2/1/24 | |||||
(MBIA) | 4,875,000 | 5,191,924 | |||
Mounds View Independent | |||||
School District #621 | |||||
5.00% 2/1/20 (MBIA) | 2,970,000 | 3,122,480 | |||
5.375% 2/1/24 (FGIC) | 6,170,000 | 6,540,693 | |||
New Brighton Tax Increment | |||||
Series A 5.00% 2/1/26 | |||||
(MBIA) | 1,185,000 | 1,287,834 | |||
Osseo Independent School | |||||
District #279 Series A | |||||
5.00% 2/1/21 (FSA) | 3,570,000 | 3,759,853 | |||
Robbinsdale Independent School | |||||
District #281 5.00% 2/1/21 | |||||
(FSA) | 1,310,000 | 1,379,666 | |||
&2Rockford Independent School | |||||
District #883 5.60% 2/1/21 | |||||
(FSA) | 3,210,000 | 3,377,064 | |||
^Rosemount Independent School | |||||
District #196 Series B | |||||
5.80% 4/1/09 (FSA) | 1,860,000 | 1,720,574 | |||
5.85% 4/1/10 (FSA) | 2,240,000 | 1,993,914 | |||
^Sauk Rapids Independent School | |||||
District #047 Series B | |||||
5.982% 2/1/15 (FSA) | 2,700,000 | 1,829,871 | |||
6.083% 2/1/17 (FSA) | 2,245,000 | 1,346,596 | |||
South Washington County | |||||
Independent School | |||||
District #833 | |||||
&35.60% 2/1/20 (MBIA) | 6,880,000 | 7,238,070 | |||
&45.60% 2/1/21 (MBIA) | 7,290,000 | 7,669,408 | |||
St. Michael Independent School | |||||
District #885 | |||||
5.00% 2/1/20 (FSA) | 1,970,000 | 2,082,014 | |||
5.00% 2/1/27 (FSA) | 3,435,000 | 3,630,314 | |||
63,689,863 | |||||
§Pre-Refunded Bonds – 14.20% | |||||
Minneapolis Community | |||||
Development Agency | |||||
(Supported Development | |||||
Revenue) Series G-3 | |||||
5.45% 12/1/31-11 | 2,000,000 | 2,152,660 | |||
Minneapolis Health Care System | |||||
Revenue (Fairview Health | |||||
Services) Series A | |||||
5.625% 5/15/32-12 | 5,400,000 | 5,934,438 | |||
Minneapolis/St. Paul Metropolitan | |||||
Airports Commission Revenue | |||||
Series A | |||||
5.125% 1/1/25-09 (FGIC) | 100,000 | 103,580 | |||
Series C | |||||
5.125% 1/1/20-11 (FGIC) | 2,000,000 | 2,105,120 | |||
5.25% 1/1/32-11 (FGIC) | 6,595,000 | 6,970,915 |
(continues) 11
Statements of net assets
Delaware Tax-Free Minnesota Insured Fund
Principal | |||||||
Amount | Value | ||||||
Municipal Bonds (continued) | |||||||
§Pre-Refunded Bonds (continued) | |||||||
Minnesota Agricultural & | |||||||
Economic Development | |||||||
Board Revenue (Fairview | |||||||
Health Care System) Series A | |||||||
5.75% 11/15/26-07 (MBIA) | $ | 10,070,000 | $ | 10,416,609 | |||
Southern Minnesota Municipal | |||||||
Power Agency Supply | |||||||
Revenue Series A | |||||||
5.75% 1/1/18-13 | 3,790,000 | 4,152,248 | |||||
5.75% 1/1/18-13 (AMBAC) | 670,000 | 734,039 | |||||
32,569,609 | |||||||
Special Tax Bonds – 0.84% | |||||||
Virgin Islands Public Finance | |||||||
Authority Revenue (Matching | |||||||
Fund Loan) Series A | |||||||
5.25% 10/1/22 | 1,785,000 | 1,920,107 | |||||
1,920,107 | |||||||
State General Obligation Bonds – 2.50% | |||||||
Minnesota State | |||||||
5.00% 11/1/20 (FSA) | 5,500,000 | 5,744,255 | |||||
5,744,255 | |||||||
Transportation Revenue Bonds – 0.92% | |||||||
Minneapolis/St. Paul | |||||||
Metropolitan Airports | |||||||
Commission Revenue Series A | |||||||
5.00% 1/1/22 (MBIA) | 2,000,000 | 2,111,160 | |||||
2,111,160 | |||||||
Total Municipal Bonds | |||||||
(cost $223,568,351) | 240,110,813 | ||||||
Total Value of Securities – 104.68% | |||||||
(cost $223,568,351) | 240,110,813 | ||||||
Liabilities Net of Receivables and | |||||||
Other Assets – (4.68%)* | (10,742,390 | ) | |||||
Net Assets Applicable to 20,955,147 | |||||||
Shares Outstanding – 100.00% | $ | 229,368,423 | |||||
Net Asset Value – Delaware Tax-Free Minnesota Insured | |||||||
Fund Class A ($208,106,704 / 19,013,548 Shares) | $10.95 | ||||||
Net Asset Value – Delaware Tax-Free Minnesota Insured | |||||||
Fund Class B ($9,185,628 / 840,057 Shares) | $10.93 | ||||||
Net Asset Value – Delaware Tax-Free Minnesota Insured | |||||||
Fund Class C ($12,076,091 / 1,101,542 Shares) | $10.96 | ||||||
Components of Net Assets at February 28, 2007: | |||||||
Shares of beneficial interest | |||||||
(unlimited authorization – no par) | $ | 212,843,046 | |||||
Accumulated net realized loss on investments | (17,085 | ) | |||||
Net unrealized appreciation of investments | 16,542,462 | ||||||
Total net assets | $ | 229,368,423 |
Summary of Abbreviations:
AMBAC — Insured by the AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
CIFG — CDC IXIS Financial Guaranty
FGIC — Insured by the Financial Guaranty Insurance Company
FHA — Insured by the Federal Housing Administration
FNMA — Insured by Federal National Mortgage Association
FSA — Insured by Financial Security Assurance
GNMA — Insured by Government National Mortgage Association
MBIA — Insured by the Municipal Bond Insurance Association
VA — Insured by the Veterans Administration
^ | Zero coupon security. The interest rate shown is the yield at the time of purchase. |
§ | Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S. Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 9 in “Notes to Financial Statements.” |
&1 | Security held in a trust in connection with the Inverse Floater security $4,585,000, 6.696%, 1/1/13. |
&2 | Security held in a trust in connection with the Inverse Floater security $1,605,000, 7.406%, 2/1/21. |
&3 | Security held in a trust in connection with the Inverse Floater security $3,440,000, 7.406%, 2/1/20. |
&4 | Security held in a trust in connection with the Inverse Floater security $3,645,000, 7.406%, 2/1/21. |
* | Includes $13,275,000 in liability for Inverse Floater programs. See Note 7 in “Notes to Financial Statements.” |
For additional information on the Inverse Floater programs, see Note 7 in “Notes to Financial Statements.” |
Net Asset Value and Offering Price Per Share – Delaware Tax-Free Minnesota Insured Fund | |
Net asset value Class A (A) | $10.95 |
Sales charge (4.50% of offering price) (B) | 0.52 |
Offering price | $11.47 |
(A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. | |
(B) | See the current prospectus for purchases of $100,000 or more. |
See accompanying notes
12
Delaware Tax-Free Minnesota Intermediate Fund
February 28, 2007 (Unaudited)
Principal | |||||
Amount | Value | ||||
Municipal Bonds – 97.13% | |||||
Corporate-Backed Revenue Bonds – 3.34% | |||||
Laurentian Energy Authority I | |||||
Cogeneration Revenue | |||||
Series A 5.00% 12/1/21 | $ | 750,000 | $ | 775,478 | |
Minneapolis Community | |||||
Development Agency | |||||
Supported Revenue | |||||
Common Bond Fund Series 4 | |||||
6.20% 6/1/17 | 1,055,000 | 1,059,937 | |||
1,835,415 | |||||
Education Revenue Bonds – 12.13% | |||||
Minneapolis Art Center Facilities | |||||
Revenue (Walker Art Center | |||||
Project) 5.125% 7/1/21 | 2,250,000 | 2,356,874 | |||
Minnesota State Higher Education | |||||
Facilities Authority Revenue | |||||
(Augsburg College) | |||||
Series 6-J1 5.00% 5/1/28 | 750,000 | 783,720 | |||
(Macalester College) | |||||
Series 6-P 4.25% 3/1/27 | 750,000 | 750,908 | |||
(University of St. Thomas) | |||||
Series 5-Y 5.25% 10/1/19 | 1,590,000 | 1,717,566 | |||
St. Cloud Housing & | |||||
Redevelopment Authority | |||||
Revenue (State University | |||||
Foundation Project) | |||||
5.00% 5/1/23 | 1,000,000 | 1,050,330 | |||
6,659,398 | |||||
Electric Revenue Bonds – 1.97% | |||||
Chaska Electric Revenue | |||||
(Generating Facilities) | |||||
Series A 5.25% 10/1/25 | 1,000,000 | 1,082,160 | |||
1,082,160 | |||||
Escrowed to Maturity Bonds – 2.11% | |||||
University of Minnesota Series A | |||||
5.75% 7/1/16 | 1,000,000 | 1,158,470 | |||
1,158,470 | |||||
Health Care Revenue Bonds – 23.29% | |||||
Apple Valley Economic | |||||
Development Authority | |||||
Health Care Revenue | |||||
(Evercare Senior Living | |||||
Projects) Series A | |||||
6.00% 12/1/25 | 500,000 | 508,355 | |||
Bemidji Hospital Facilities First | |||||
Meeting Revenue (North | |||||
Country Health Services) | |||||
5.00% 9/1/24 (RADIAN) | 500,000 | 520,360 | |||
Breckenridge Catholic Health | |||||
Initiatives Series A | |||||
5.00% 5/1/30 | 500,000 | 525,320 | |||
Glencoe Health Care Facilities | |||||
Revenue (Glencoe Regional | |||||
Health Services Project) | |||||
5.00% 4/1/20 | 1,250,000 | 1,301,963 | |||
Maple Grove Health Care | |||||
Facilities Revenue (North | |||||
Memorial Health Care) | |||||
5.00% 9/1/29 | 1,000,000 | 1,050,890 | |||
Minneapolis Health Care System | |||||
Revenue (Allina Health | |||||
Systems) Series A | |||||
5.75% 11/15/32 | 1,500,000 | 1,626,824 | |||
Minneapolis/St. Paul Housing | |||||
& Redevelopment Authority | |||||
Health Care System (Health | |||||
Partners Obligation Group | |||||
Project) 6.00% 12/1/17 | 1,125,000 | 1,240,695 | |||
Moorhead Economic Development | |||||
Authority Multifamily Revenue | |||||
(Eventide Lutheran Home | |||||
Project) 4.70% 6/1/18 | 475,000 | 475,865 | |||
Northfield Hospital Revenue | |||||
5.25% 11/1/21 | 1,000,000 | 1,066,730 | |||
Oakdale Elderly Housing | |||||
Revenue (PHM/Oakdale Inc. | |||||
Project) 5.75% 3/1/18 | 1,400,000 | 1,401,344 | |||
Sherburne County Health Care | |||||
Facilities Revenue (Guardian | |||||
Angel Health Services) | |||||
5.30% 10/1/26 | 250,000 | 254,473 | |||
St. Louis Park Health Care | |||||
Facilities Revenue (Park | |||||
Nicollet Health Services) | |||||
Series B 5.50% 7/1/25 | 1,500,000 | 1,625,459 | |||
St. Paul Housing & | |||||
Redevelopment Authority | |||||
Hospital Revenue (Health | |||||
East Project) Series B | |||||
5.85% 11/1/17 | 1,160,000 | 1,193,605 | |||
12,791,883 | |||||
Housing Revenue Bonds – 8.62% | |||||
Minneapolis Multifamily Housing | |||||
Revenue (Trinity Apartments- | |||||
Section 8) Series A | |||||
6.75% 5/1/21 | 1,820,000 | 1,906,486 | |||
Minnesota State Housing | |||||
Finance Agency | |||||
Residential Housing | |||||
Series I 5.10% 7/1/20 (AMT) | 785,000 | 810,670 | |||
Series M 4.85% 7/1/31 (AMT) | 1,000,000 | 1,022,380 | |||
Minnesota State Housing | |||||
Finance Agency Single Family | |||||
Mortgage Series J | |||||
5.90% 7/1/28 (AMT) | 420,000 | 433,150 | |||
@Park Rapids Multifamily Revenue | |||||
(The Court Apartments | |||||
Project-Section 8) | |||||
6.05% 8/1/12 | 570,000 | 559,541 | |||
4,732,227 |
(continues) 13
Statements of net assets
Delaware Tax-Free Minnesota Intermediate Fund
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Lease Revenue Bonds – 3.87% | |||||
Edina Housing & Redevelopment | |||||
Authority Public Project | |||||
Revenue (Appropriate Lease | |||||
Obligation) 5.125% 2/1/19 | $ | 1,000,000 | $ | 1,054,610 | |
Hibbing Economic Development | |||||
Authority Revenue | |||||
(Hibbing Lease Obligation) | |||||
6.10% 2/1/08 | 145,000 | 145,109 | |||
Virginia Housing & | |||||
Redevelopment Authority | |||||
Health Care Facility (Lease | |||||
Revenue) 5.25% 10/1/25 | 880,000 | 927,529 | |||
2,127,248 | |||||
Local General Obligation Bonds – 25.51% | |||||
Big Lake Independent School | |||||
District #727 Series C | |||||
5.00% 2/1/16 (FSA) | 1,180,000 | 1,234,658 | |||
5.00% 2/1/17 (FSA) | 1,000,000 | 1,044,090 | |||
Centennial Independent School | |||||
District #012 Series A | |||||
5.00% 2/1/18 (FSA) | 1,000,000 | 1,054,560 | |||
5.00% 2/1/20 (FSA) | 750,000 | 789,885 | |||
Dakota County Capital | |||||
Improvement Series A | |||||
4.75% 2/1/17 | 1,000,000 | 1,034,680 | |||
Dakota County Community | |||||
Development Agency | |||||
Governmental Housing Refunding | |||||
(Senior Housing Facilities) | |||||
Series A 5.00% 1/1/22 | 1,150,000 | 1,232,697 | |||
Hennepin County Series B | |||||
4.75% 12/1/14 | 1,000,000 | 1,037,790 | |||
Hopkins Independent | |||||
School District #270 | |||||
5.125% 2/1/17 (FGIC) | 2,000,000 | 2,124,879 | |||
Minneapolis Tax Increment | |||||
Revenue (Ivy Tower Project) | |||||
5.50% 2/1/22 | 415,000 | 422,989 | |||
Osseo Independent School | |||||
District #279 Series A | |||||
5.00% 2/1/21 (FSA) | 1,500,000 | 1,579,770 | |||
South Washington County | |||||
Independent School | |||||
District #833 Series B | |||||
5.00% 2/1/16 (FSA) | 1,560,000 | 1,644,036 | |||
St. Paul Independent School | |||||
District #625 Series B | |||||
5.00% 2/1/20 (FSA) | 750,000 | 811,335 | |||
14,011,369 | |||||
§Pre-Refunded Bonds – 6.43% | |||||
Minneapolis Health Care System | |||||
Revenue (Fairview Health | |||||
Services) Series A | |||||
5.625% 5/15/32-12 | 1,750,000 | 1,923,198 | |||
Minnesota State Higher | |||||
Education Facilities Authority | |||||
Revenue (College of Art & | |||||
Design Project) Series 5-D | |||||
6.625% 5/1/20-10 | 1,000,000 | 1,067,630 | |||
Puerto Rico Commonwealth | |||||
Highway & Transportation | |||||
Authority Transportation | |||||
Refunding Series D | |||||
5.25% 7/1/38-12 | 500,000 | 539,870 | |||
3,530,698 | |||||
Special Tax Revenue Bonds – 1.54% | |||||
Puerto Rico Commonwealth | |||||
Infrastructure Financing | |||||
Authority Special Revenue | |||||
Series B 5.00% 7/1/46 | 800,000 | 844,176 | |||
844,176 | |||||
State General Obligation Bonds – 6.86% | |||||
Minnesota State 5.00% 8/1/21 | 2,550,000 | 2,694,815 | |||
•Puerto Rico Public Finance | |||||
Corporation Commonwealth | |||||
Appropriation Series A | |||||
(LOC Puerto Rico Government Bank) | |||||
5.75% 8/1/27 | 1,000,000 | 1,074,950 | |||
3,769,765 | |||||
Transportation Revenue Bonds – 1.46% | |||||
Minneapolis/St. Paul | |||||
Metropolitan Airports | |||||
Commission Series 14 | |||||
5.50% 1/1/11 (AMT) | 750,000 | 798,998 | |||
798,998 | |||||
Total Municipal Bonds | |||||
(cost $51,067,826) | 53,341,807 | ||||
Number of | |||||
Shares | |||||
Short-Term Investments – 2.28% | |||||
Money Market Instrument – 0.28% | |||||
Federated Minnesota Municipal | |||||
Cash Trust | 155,375 | 155,375 | |||
Principal | |||||
Amount | |||||
•Variable Rate Demand Note – 2.00% | |||||
University of Minnesota Series C | |||||
3.50% 12/1/36 | $ | 1,100,000 | 1,100,000 | ||
Total Short-Term Investments | |||||
(cost $1,255,375) | 1,255,375 |
14
Total Value of Securities – 99.41% | |||
(cost $52,323,201) | $54,597,182 | ||
Receivables and Other Assets | |||
Net of Liabilities – 0.59% | 321,502 | ||
Net Assets Applicable to 5,031,509 | |||
Shares Outstanding – 100.00% | $54,918,684 | ||
Net Asset Value – Delaware Tax-Free Minnesota | |||
Intermediate Fund Class A | |||
($47,945,726 / 4,393,794 Shares) | $10.91 | ||
Net Asset Value – Delaware Tax-Free Minnesota | |||
Intermediate Fund Class B | |||
($1,869,359 / 170,871 Shares) | $10.94 | ||
Net Asset Value – Delaware Tax-Free Minnesota | |||
Intermediate Fund Class C | |||
($5,103,599 / 466,844 Shares) | $10.93 | ||
Components of Net Assets at February 28, 2007: | |||
Shares of beneficial interest | |||
(unlimited authorization – no par) | $54,115,490 | ||
Accumulated net realized loss on investments | (1,470,787 | ) | |
Net unrealized appreciation of investments | 2,273,981 | ||
Total net assets | $54,918,684 |
Summary of Abbreviations:
AMT — Subject to Alternative Minimum Tax
FGIC — Insured by the Financial Guaranty Insurance Company
FSA — Insured by Financial Security Assurance
LOC — Letter of Credit
RADIAN — Insured by Radian Asset Assurance
@ | Illiquid security. At February 28, 2007, the aggregate amount of illiquid securities equaled $559,541, which represented 1.02% of the Fund’s net assets. See Note 9 in “Notes to Financial Statements.” |
§ | Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S. Treasury bonds. For Pre-Refunded Bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 9 in “Notes to Financial Statements.” |
• | Variable rate security. The rate shown is the rate as of February 28, 2007. |
Net Asset Value and Offering Price Per Share – Delaware Tax-Free Minnesota Intermediate Fund | |
Net asset value Class A (A) | $10.91 |
Sales charge (2.75% of offering price) (B) | 0.31 |
Offering price | $11.22 |
(A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. | |
(B) | See the current prospectus for purchases of $100,000 or more. |
See accompanying notes
(continues) 15
Statements of net assets
Delaware Minnesota High-Yield Municipal Bond Fund
February 28, 2007 (Unaudited)
Principal | |||||
Amount | Value | ||||
Municipal Bonds – 97.38% | |||||
Corporate-Backed Revenue Bonds – 3.80% | |||||
Cloquet Pollution Control | |||||
Revenue (Potlatch Corp. | |||||
Project) 5.90% 10/1/26 | $ | 1,700,000 | $ | 1,745,033 | |
Laurentian Energy Authority I | |||||
Cogeneration Revenue | |||||
Series A 5.00% 12/1/21 | 1,750,000 | 1,809,448 | |||
Sartell Environmental Improvement | |||||
Revenue (International Paper) | |||||
Series A 5.20% 6/1/27 | 1,750,000 | 1,812,475 | |||
5,366,956 | |||||
Education Revenue Bonds – 7.71% | |||||
Minnesota State Colleges & | |||||
Universities Revenue Funding | |||||
Series A 4.50% 10/1/26 (FSA) | 1,000,000 | 1,026,230 | |||
Minnesota State Higher Education | |||||
Facilities Authority Revenue | |||||
(Augsburg College) | |||||
Series 6-C 5.00% 5/1/23 | 700,000 | 734,342 | |||
Series 6-J1 5.00% 5/1/36 | 1,000,000 | 1,038,680 | |||
(Macalester College) | |||||
Series 6-P 4.25% 3/1/32 | 1,500,000 | 1,480,650 | |||
(St. Catherine College) | |||||
Series 5-N1 5.375% 10/1/32 | 2,000,000 | 2,118,000 | |||
(University St. Thomas) | |||||
Series 6-I 5.00% 4/1/23 | 1,500,000 | 1,608,015 | |||
University of Minnesota Special | |||||
Purpose Revenue (Supported | |||||
Stadium Debt) 5.00% 8/1/29 | 2,660,000 | 2,861,681 | |||
10,867,598 | |||||
Electric Revenue Bonds – 7.81% | |||||
Chaska Electric Revenue | |||||
(Generating Facilities) | |||||
Series A 5.25% 10/1/25 | 1,000,000 | 1,082,160 | |||
Minnesota State Municipal Power | |||||
Agency Electric Revenue | |||||
5.00% 10/1/35 | 1,000,000 | 1,050,900 | |||
Series A 5.00% 10/1/34 | 2,750,000 | 2,876,170 | |||
Puerto Rico Electric Power | |||||
Authority Revenue Series II | |||||
5.25% 7/1/31 | 1,000,000 | 1,063,900 | |||
Southern Minnesota Municipal | |||||
Power Agency Supply System | |||||
Revenue Series A | |||||
5.25% 1/1/16 (AMBAC) | 1,000,000 | 1,113,140 | |||
Western Minnesota Municipal | |||||
Power Agency Revenue | |||||
5.00% 1/1/36 (FSA) | 2,250,000 | 2,419,133 | |||
Series A 5.00% 1/1/30 (MBIA) | 1,335,000 | 1,404,580 | |||
11,009,983 | |||||
Aitkin Health Care Facilities | |||||
Revenue (Riverwood Health | |||||
Care Center) 5.50% 2/1/24 | 700,000 | 723,394 | |||
Apple Valley Economic | |||||
Development Authority | |||||
Health Care Revenue | |||||
(Augustanna Home | |||||
St. Paul Project) Series A | |||||
5.80% 1/1/30 | 1,000,000 | 1,023,650 | |||
(Evercare Senior Living | |||||
Project) Series A | |||||
6.125% 6/1/35 | 1,000,000 | 1,018,310 | |||
Bemidji Health Care Facilities | |||||
First Meeting Revenue (North | |||||
Country Health Services) | |||||
5.00% 9/1/20 | 1,150,000 | 1,222,899 | |||
5.00% 9/1/31 (RADIAN) | 2,500,000 | 2,603,050 | |||
Breckenridge Catholic | |||||
Health Initiatives Series A | |||||
5.00% 5/1/30 | 2,000,000 | 2,101,280 | |||
Buffalo Health Care Revenue | |||||
(Central Minnesota Senior | |||||
Housing Project) Series A | |||||
5.375% 9/1/26 | 1,000,000 | 1,016,370 | |||
Detroit Lakes Housing & Health | |||||
Facilities Revenue Refunding | |||||
(Mankato Lutheran Homes) | |||||
Series D 5.50% 8/1/21 | 500,000 | 510,535 | |||
Duluth Economic Development | |||||
Authority Health Care | |||||
Facilities Revenue | |||||
(Benedictine Health System - | |||||
St. Mary’s Hospital) | |||||
5.25% 2/15/33 | 2,250,000 | 2,364,300 | |||
Glencoe Health Care Facilities | |||||
Revenue (Glencoe Regional | |||||
Health Services Project) | |||||
5.00% 4/1/31 | 1,965,000 | 2,030,945 | |||
Mahtomedi Senior Housing | |||||
Revenue (St. Andrews Village | |||||
Project) 5.75% 12/1/40 | 1,000,000 | 1,024,710 | |||
Maple Grove Health Care | |||||
Facilities Revenue (North | |||||
Memorial Health Care) | |||||
5.00% 9/1/35 | 3,590,000 | 3,751,872 | |||
Minneapolis Health Care | |||||
Facilities Revenue | |||||
(Augustana Chapel | |||||
View Homes) Series D | |||||
5.75% 6/1/29 | 1,000,000 | 1,034,830 | |||
(Jones-Harrison Residence | |||||
Project) 5.60% 10/1/30 | 1,500,000 | 1,529,625 |
16
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Health Care Revenue Bonds (continued) | |||||
Minneapolis Health Care | |||||
System Revenue | |||||
(Allina Health Systems) | |||||
Series A 5.75% 11/15/32 | $ | 2,000,000 | $ | 2,169,100 | |
(Fairview Health Services) | |||||
Series D 5.00% 11/15/34 | |||||
(AMBAC) | 1,000,000 | 1,064,950 | |||
Minneapolis/St. Paul Housing | |||||
& Redevelopment Authority | |||||
Health Care System (Health | |||||
Partners Obligation Group | |||||
Project) 6.00% 12/1/17 | 1,125,000 | 1,240,695 | |||
Minnesota Agricultural & | |||||
Economic Development | |||||
Board Revenue | |||||
(Benedictine Health Systems) | |||||
5.75% 2/1/29 | 1,000,000 | 1,022,630 | |||
Moorhead Economic Development | |||||
Authority Multifamily Revenue | |||||
(Eventide Project) Series A | |||||
5.15% 6/1/29 | 550,000 | 554,263 | |||
Northfield Hospital Revenue | |||||
5.375% 11/1/31 | 1,000,000 | 1,069,980 | |||
Northfield Housing & | |||||
Redevelopment Authority | |||||
(Northfield Retirement | |||||
Center) Series B | |||||
5.125% 12/1/26 | 750,000 | 748,095 | |||
Oakdale Elderly Housing | |||||
Revenue (PHM/Oakdale, Inc. | |||||
Project) 6.00% 3/1/28 | 1,800,000 | 1,802,088 | |||
Owatonna Senior Housing | |||||
Revenue (Senior Living | |||||
Project) Series A | |||||
5.80% 10/1/29 | 400,000 | 410,632 | |||
6.00% 4/1/41 | 1,250,000 | 1,295,800 | |||
Prior Lake Senior Housing | |||||
Revenue (Shepherds Path | |||||
Senior Housing) Series B | |||||
5.75% 8/1/41 | 1,000,000 | 1,026,130 | |||
Rochester Health Care Facilities | |||||
Revenue (Mayo Clinic) | |||||
5.00% 11/15/36 | 3,160,000 | 3,347,577 | |||
Shakopee Health Care Facilities | |||||
Revenue (St. Francis | |||||
Regional Medical Center) | |||||
5.25% 9/1/34 | 1,000,000 | 1,054,170 | |||
Shoreview Elderly Housing | |||||
Revenue (PHM/Shoreview | |||||
Inc. Project) 6.15% 12/1/33 | 1,250,000 | 1,275,975 | |||
St. Louis Park Health Care | |||||
Facilities Revenue (Park | |||||
Nicollet Health Services) | |||||
Series B 5.25% 7/1/30 | 1,000,000 | 1,060,820 | |||
St. Paul Housing & | |||||
Redevelopment Authority | |||||
Hospital Revenue (Health | |||||
East Project) | |||||
6.00% 11/15/25 | 1,000,000 | 1,121,230 | |||
Series A 5.70% 11/1/15 | 800,000 | 822,400 | |||
Series B 5.85% 11/1/17 | 250,000 | 257,243 | |||
St. Paul Housing & | |||||
Redevelopment Authority | |||||
Healthcare Facilities Revenue | |||||
(Health Partners Obligation | |||||
Group Project) | |||||
5.25% 5/15/36 | 1,000,000 | 1,060,850 | |||
Stillwater Health Care | |||||
Revenue (Health System | |||||
Obligation Group) | |||||
5.00% 6/1/25 | 2,000,000 | 2,099,880 | |||
5.00% 6/1/35 | 1,000,000 | 1,044,270 | |||
Twin Valley Congregate Housing | |||||
Revenue (Living Options, Inc. | |||||
Project) 5.95% 11/1/28 | 1,825,000 | 1,757,767 | |||
Woodbury Economic | |||||
Development Authority | |||||
Housing Revenue Refunding | |||||
5.65% 6/1/33 | 1,000,000 | 1,027,380 | |||
50,289,695 | |||||
Housing Revenue Bonds – 15.59% | |||||
Chanhassen Multifamily Housing | |||||
Revenue Refunding (Heritage | |||||
Park Apartments Project- | |||||
Section 8) 6.20% 7/1/30 | |||||
(FHA) (AMT) | 300,000 | 306,333 | |||
Chaska Multifamily Housing | |||||
Revenue (West Suburban | |||||
Housing Partners Project) | |||||
5.875% 3/1/31 (AMT) | 1,000,000 | 949,520 | |||
@Hutchinson Multifamily | |||||
Housing Revenue (Evergreen | |||||
Apartments Project- | |||||
Section 8) 5.75% 11/1/28 | 1,910,000 | 1,864,313 | |||
Minneapolis Multifamily | |||||
Housing Revenue | |||||
(Grant Street Apartments | |||||
Project) Series A | |||||
7.25% 11/1/29 | 2,085,000 | 2,169,422 | |||
(Olson Townhomes Project) | |||||
6.00% 12/1/19 (AMT) | 1,490,000 | 1,490,477 | |||
(Trinity Apartments-Section 8) | |||||
Series A 6.75% 5/1/21 | 665,000 | 696,601 | |||
Minneapolis/St. Paul Housing | |||||
Finance Board (Cityliving | |||||
Project) Series A-2 | |||||
5.00% 12/1/38 (FNMA) | |||||
(GNMA) (AMT) | 997,761 | 1,031,465 |
(continues) 17
Statements of net assets
Delaware Minnesota High-Yield Municipal Bond Fund
Principal | |||||
Amount | Value | ||||
Municipal Bonds (continued) | |||||
Housing Revenue Bonds (continued) | |||||
Minnesota State Housing Finance | |||||
Agency Rental Housing | |||||
Series A 4.875% 8/1/24 (AMT) | $ | 585,000 | $ | 597,267 | |
Series A-1 5.00% 8/1/40 (AMT) | 2,265,000 | 2,326,811 | |||
Minnesota State Housing Finance | |||||
Agency Residential Housing | |||||
Series G 5.00% 7/1/36 (AMT) | 1,000,000 | 1,027,740 | |||
Series M 4.875% 7/1/37 (AMT) | 2,500,000 | 2,552,074 | |||
Minnesota State Housing Finance | |||||
Agency Single Family Mortgage | |||||
Series E 6.25% 1/1/23 (AMT) | 10,000 | 10,113 | |||
Series J 5.90% 7/1/28 (AMT) | 650,000 | 670,352 | |||
Series M 5.875% 1/1/17 | 20,000 | 20,449 | |||
St. Cloud Housing & | |||||
Redevelopment Authority | |||||
Revenue (Sterling Heights | |||||
Apartments Project) | |||||
7.55% 4/1/39 (AMT) | 530,000 | 564,132 | |||
St. Paul Housing & | |||||
Redevelopment Authority | |||||
Multifamily Housing Revenue | |||||
(Shelby Grotto Housing | |||||
Project) 5.50% 9/20/44 | |||||
(GNMA) (FHA) (AMT) | 750,000 | 778,583 | |||
Stillwater Multifamily | |||||
Revenue Refunding | |||||
(Orleans Homes L P Project) | |||||
5.50% 2/1/42 (AMT) | 750,000 | 757,680 | |||
(Stillwater Cottages Project) | |||||
7.00% 11/1/16 (AMT) | 680,000 | 694,606 | |||
Series A 6.75% 11/1/11 | 205,000 | 209,373 | |||
Series A 7.00% 11/1/27 | 340,000 | 347,300 | |||
Washington County Housing & | |||||
Redevelopment Authority | |||||
Governmental Revenue | |||||
(Briar Pond Project) Series B | |||||
7.125% 8/20/34 | 835,000 | 808,639 | |||
(Woodland Park Apartments | |||||
Project) 4.70% 10/1/32 | 2,075,000 | 2,109,092 | |||
21,982,342 | |||||
Lease Revenue Bonds – 2.88% | |||||
Andover Economic Development | |||||
Authority Public Facilities | |||||
Lease Revenue (Andover | |||||
Community Center) | |||||
5.20% 2/1/34 | 1,000,000 | 1,060,750 | |||
Hibbing Economic Development | |||||
Authority Revenue (Hibbing | |||||
Lease Obligation Project) | |||||
6.40% 2/1/12 | 530,000 | 530,106 | |||
St. Paul Port Authority | |||||
Lease Revenue | |||||
(Regions Hospital Parking | |||||
Ramp Project) Series 1 | |||||
5.00% 8/1/36 | 1,375,000 | 1,405,539 | |||
(Robert Street Office Building | |||||
Project 3-11) 5.00% 12/1/27 | 1,000,000 | 1,060,170 | |||
4,056,565 | |||||
Local General Obligation Bonds – 11.66% | |||||
Chaska Independent School | |||||
District #112 Series A | |||||
4.50% 2/1/28 (MBIA) | 2,000,000 | 2,039,280 | |||
Farmington Independent School | |||||
District #192 Series B | |||||
5.00% 2/1/27 (FSA) | 1,000,000 | 1,069,770 | |||
Foley Independent School | |||||
District #51(Crossover School | |||||
Building) Refunding Series A | |||||
5.00% 2/1/21 | 1,105,000 | 1,198,008 | |||
Hopkins Independent School | |||||
District #270 Facilities | |||||
5.00% 2/1/26 (MBIA) | 1,055,000 | 1,130,833 | |||
Lakeville Independent School | |||||
District #194 Series A | |||||
4.75% 2/1/22 (FSA) | 1,000,000 | 1,043,210 | |||
Metropolitan Council Waste | |||||
Water Treatment Series B | |||||
4.375% 12/1/27 | 2,500,000 | 2,532,550 | |||
5.00% 12/1/21 | 500,000 | 539,785 | |||
Minneapolis Tax | |||||
Increment Revenue | |||||
(Ivory Tower Project) | |||||
5.70% 2/1/29 | 785,000 | 807,043 | |||
(St. Anthony Falls Project) | |||||
Refunding 5.65% 2/1/27 | 500,000 | 515,175 | |||
Moorhead Improvement Series B | |||||
5.00% 2/1/33 (MBIA) | 750,000 | 795,653 | |||
Perham Disposal System | |||||
6.00% 5/1/22 (AMT) | 1,500,000 | 1,583,490 | |||
St. Michael Independent School | |||||
District #885 Refunding | |||||
Series B 4.25% 2/1/27 (MBIA) | 1,000,000 | 1,004,770 | |||
St. Paul Independent School | |||||
District #625 Series B | |||||
5.00% 2/1/20 (FSA) | 750,000 | 811,335 |
18
Principal | ||||||
Amount | Value | |||||
Municipal Bonds (continued) | ||||||
Local General Obligation Bonds (continued) | ||||||
Todd Morrison Cass & Wadena | ||||||
Counties United Hospital | ||||||
District (Health Care | ||||||
Facilities-Lakewood) | ||||||
5.00% 12/1/21 | $ | 610,000 | $ | 635,425 | ||
5.125% 12/1/24 | 205,000 | 215,490 | ||||
5.25% 12/1/26 | 490,000 | 518,743 | ||||
16,440,560 | ||||||
§Pre-Refunded Bonds – 5.96% | ||||||
Little Canada Multifamily | ||||||
Housing Revenue Alternative | ||||||
Development (Montreal | ||||||
Courts Apartments Project) | ||||||
Series A 6.25% 12/1/27-07 | 1,250,000 | 1,272,538 | ||||
Minneapolis Community | ||||||
Development Agency | ||||||
(Supported Development | ||||||
Revenue) Series G-3 | ||||||
5.45% 12/1/31-11 | 1,000,000 | 1,076,330 | ||||
Minneapolis Health Care System | ||||||
Revenue (Fairview Health | ||||||
Services) Series A | ||||||
5.625% 5/15/32-12 | 2,000,000 | 2,197,939 | ||||
Minnesota State Higher | ||||||
Education Facilities Authority | ||||||
Revenue (College of Art & | ||||||
Design Project) Series 5-D | ||||||
6.75% 5/1/26-10 | 500,000 | 534,805 | ||||
Perham Hospital District Senior | ||||||
Congregate Housing Facilities | ||||||
Revenue (Briarwood Project) | ||||||
6.25% 11/1/22-07 | 620,000 | 629,263 | ||||
Puerto Rico Commonwealth | ||||||
Highway & Transportation | ||||||
Authority Transportation | ||||||
Refunding Series D | ||||||
5.25% 7/1/38-12 | 1,500,000 | 1,619,610 | ||||
Rochester Multifamily | ||||||
Housing Revenue (Wedum | ||||||
Shorewood Campus Project) | ||||||
6.60% 6/1/36-09 | 990,000 | 1,068,012 | ||||
8,398,497 | ||||||
Special Tax Bonds – 2.12% | ||||||
Puerto Rico Commonwealth | ||||||
Infrastructure Financing | ||||||
Authority Special Revenue | ||||||
Series B 5.00% 7/1/46 | 800,000 | 844,176 | ||||
St. Paul Port Authority | ||||||
(Brownfields Redevelopment | ||||||
Series 2 5.00% 3/1/37 | 1,000,000 | 1,070,300 | ||||
Virgin Islands Public Finance | ||||||
Authority Revenue (Senior- | ||||||
Lien-Matching Fund Loan | ||||||
Note) Series A 5.25% 10/1/24 | 1,000,000 | 1,075,690 | ||||
2,990,166 | ||||||
State General Obligation Bonds – 2.70% | ||||||
Minnesota State Refunding & | ||||||
Various Purposes | ||||||
5.625% 11/1/17 | 2,160,000 | 2,205,792 | ||||
Puerto Rico Commonwealth | ||||||
Public Improvement Series A | ||||||
5.00% 7/1/34 | 500,000 | 524,535 | ||||
Puerto Rico Government | ||||||
Development Bank Senior | ||||||
Notes Series B | ||||||
5.00% 12/1/14 | 1,000,000 | 1,072,760 | ||||
3,803,087 | ||||||
Transportation Revenue Bonds – 1.49% | ||||||
Minneapolis/St. Paul | ||||||
Metropolitan Airports | ||||||
Commission Revenue | ||||||
Series A 5.00% 1/1/28 | ||||||
(MBIA) | 2,000,000 | 2,099,440 | ||||
2,099,440 | ||||||
Total Municipal Bonds | ||||||
(cost $132,776,331) | 137,304,889 | |||||
Short-Term Investments – 1.70% | ||||||
•Variable Rate Demand Notes – 1.70% | ||||||
St. Paul Port Authority Industrial | ||||||
Development Revenue | ||||||
(Camada Limited Partnership- | ||||||
711) 3.75% 12/1/22 (AMT) | 100,000 | 100,000 | ||||
University of Minnesota Series C | ||||||
3.50% 12/1/36 | 2,300,000 | 2,300,000 | ||||
Total Short-Term Investments | ||||||
(cost $2,400,000) | 2,400,000 | |||||
Total Value of Securities – 99.08% | ||||||
(cost $135,176,331) | 139,704,889 | |||||
Receivables and Other Assets | ||||||
Net of Liabilities – 0.92% | 1,295,610 | |||||
Net Assets Applicable to 13,208,263 | ||||||
Shares Outstanding – 100.00% | $ | 141,000,499 | ||||
Net Asset Value – Delaware Minnesota High-Yield | ||||||
Municipal Bond Fund Class A | ||||||
($106,695,402 / 9,998,959 Shares) | $10.67 | |||||
Net Asset Value – Delaware Minnesota High-Yield | ||||||
Municipal Bond Fund Class B | ||||||
($9,402,725 / 879,865 Shares) | $10.69 | |||||
Net Asset Value – Delaware Minnesota High-Yield | ||||||
Municipal Bond Fund Class C | ||||||
($24,902,372 / 2,329,439 Shares) | $10.69 |
(continues) 19
Statements of net assets
Delaware Minnesota High-Yield Municipal Bond Fund
Components of Net Assets at February 28, 2007: | |||
Shares of beneficial interest | |||
(unlimited authorization – no par) | $ | 138,919,482 | |
Accumulated net realized loss on investments | (2,447,541 | ) | |
Net unrealized appreciation of investments | 4,528,558 | ||
Total net assets | $ | 141,000,499 |
Summary of Abbreviations:
AMBAC — Insured by the AMBAC Assurance Corporation
AMT — Subject to Alternative Minimum Tax
FHA — Insured by the Federal Housing Administration
FNMA — Insured by Federal National Mortgage Association
FSA — Insured by Financial Security Assurance
GNMA — Insured by Government National Mortgage Association
MBIA — Insured by the Municipal Bond Insurance Association
RADIAN — Insured by Radian Asset Assurance
§ | Pre-Refunded Bonds. Municipals that are generally backed or secured by U.S. Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond is pre-refunded. See Note 9 in “Notes to Financial Statements.” |
• | Variable rate security. The rate shown is the rate as of February 28, 2007. |
@ | Illiquid security. At February 28, 2007, the aggregate amount of illiquid securities equaled $1,864,313, which represented 1.32% of the Fund’s net assets. See Note 9 in “Notes to Financial Statements.” |
Net Asset Value and Offering Price Per Share – Delaware Minnesota High-Yield Municipal Bond Fund | |
Net asset value Class A (A) | $10.67 |
Sales charge (4.50% of offering price) (B) | 0.50 |
Offering price | $11.17 |
(A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. | |
(B) | See the current prospectus for purchases of $100,000 or more. |
See accompanying notes
20
Statements of operations
Six Months Ended February 28, 2007 (Unaudited)
Delaware | Delaware | |||||||||||
Delaware | Delaware | Tax-Free | Minnesota | |||||||||
Tax-Free | Tax-Free | Minnesota | High-Yield | |||||||||
Minnesota | Minnesota | Intermediate | Municipal | |||||||||
Fund | Insured Fund | Fund | Bond Fund | |||||||||
Investment Income: | ||||||||||||
Interest | $ | 10,749,190 | $ | 5,907,102 | $ | 1,313,231 | $ | 3,158,292 | ||||
Expenses: | ||||||||||||
Management fees | 1,114,793 | 575,312 | 135,296 | 346,286 | ||||||||
Interest and related expenses | 601,905 | 259,321 | — | 6,805 | ||||||||
Distribution expenses – Class A | 473,753 | 260,602 | 58,933 | 117,961 | ||||||||
Distribution expenses – Class B | 53,901 | 47,510 | 9,618 | 46,707 | ||||||||
Distribution expenses – Class C | 77,293 | 60,972 | 25,176 | 108,363 | ||||||||
Dividend disbursing and transfer agent fees and expenses | 101,824 | 64,594 | 18,431 | 36,896 | ||||||||
Accounting and administration expenses | 81,076 | 46,025 | 10,824 | 25,184 | ||||||||
Trustees’ fees and benefits | 64,092 | 35,561 | 8,652 | 18,850 | ||||||||
Legal fees | 25,677 | 19,505 | 8,986 | 7,644 | ||||||||
Audit and tax | 16,274 | 6,842 | 6,523 | 7,708 | ||||||||
Reports and statements to shareholders | 15,588 | 11,884 | 5,795 | 5,924 | ||||||||
Custodian fees | 13,985 | 6,962 | 2,167 | 3,593 | ||||||||
Registration fees | 13,303 | 9,012 | 8,686 | 15,448 | ||||||||
Insurance fees | 5,172 | 2,724 | 654 | 1,957 | ||||||||
Consulting fees | 4,055 | 3,579 | 980 | 1,156 | ||||||||
Pricing fees | 2,471 | 662 | 805 | 1,872 | ||||||||
Taxes (other than taxes on income) | 703 | 438 | — | 208 | ||||||||
Trustees’ expenses | 684 | 573 | 79 | 284 | ||||||||
Dues and services | 459 | 141 | 92 | 123 | ||||||||
2,667,008 | 1,412,219 | 301,697 | 752,969 | |||||||||
Less expenses absorbed or waived | (48,034 | ) | (28,431 | ) | (41,057 | ) | (60,186 | ) | ||||
Less waived distribution expenses – Class A | — | — | (23,573 | ) | — | |||||||
Less expense paid indirectly | (2,144 | ) | (405 | ) | (255 | ) | (985 | ) | ||||
Total expenses | 2,616,830 | 1,383,384 | 236,812 | 691,798 | ||||||||
Net Investment Income | 8,132,360 | 4,523,718 | 1,076,419 | 2,466,494 | ||||||||
Net Realized and Unrealized Gain (Loss) on Investments: | ||||||||||||
Net realized gain (loss) on investments | 39,222 | 68,924 | (14,575 | ) | 94,542 | |||||||
Net change in unrealized appreciation/depreciation of investments | 3,161,716 | 1,176,360 | 274,754 | 1,595,466 | ||||||||
Net Realized and Unrealized Gain on Investments | 3,200,938 | 1,245,284 | 260,179 | 1,690,008 | ||||||||
Net Increase in Net Assets Resulting from Operations | $ | 11,333,298 | $ | 5,769,002 | $ | 1,336,598 | $ | 4,156,502 |
See accompanying notes
21
Statements of changes in net assets
Delaware Tax-Free | Delaware Tax-Free Minnesota | |||||||||||
Minnesota Fund | Insured Fund | |||||||||||
Six Months | Six Months | |||||||||||
Ended | Year Ended | Ended | Year Ended | |||||||||
2/28/07 | 8/31/06 | 2/28/07 | 8/31/06 | |||||||||
(Unaudited) | (Unaudited) | |||||||||||
Increase (Decrease) in Net Assets from Operations: | ||||||||||||
Net investment income | $ | 8,132,360 | $ | 16,164,300 | $ | 4,523,718 | $ | 9,407,580 | ||||
Net realized gain (loss) on investments | 39,222 | 420,471 | 68,924 | (191,561 | ) | |||||||
Net change in unrealized appreciation/depreciation of investments | 3,161,716 | (5,618,279 | ) | 1,176,360 | (4,320,530 | ) | ||||||
Net increase in net assets resulting from operations | 11,333,298 | 10,966,492 | 5,769,002 | 4,895,489 | ||||||||
Dividends and Distributions to Shareholders from: | ||||||||||||
Net Investment Income: | ||||||||||||
Class A | (7,710,967 | ) | (15,322,571 | ) | (4,165,324 | ) | (8,597,833 | ) | ||||
Class B | (178,697 | ) | (413,101 | ) | (154,331 | ) | (363,586 | ) | ||||
Class C | (255,575 | ) | (487,162 | ) | (197,465 | ) | (397,631 | ) | ||||
Net realized gain on investments: | ||||||||||||
Class A | (332,881 | ) | (767,541 | ) | — | (438,581 | ) | |||||
Class B | (9,630 | ) | (26,047 | ) | — | (23,729 | ) | |||||
Class C | (13,628 | ) | (29,894 | ) | — | (24,664 | ) | |||||
(8,501,378 | ) | (17,046,316 | ) | (4,517,120 | ) | (9,846,024 | ) | |||||
Capital Share Transactions: | ||||||||||||
Proceeds from shares sold: | ||||||||||||
Class A | 20,721,096 | 46,525,876 | 3,341,396 | 11,550,587 | ||||||||
Class B | 386,721 | 806,782 | 125,800 | 359,427 | ||||||||
Class C | 2,161,626 | 4,424,369 | 267,412 | 1,930,187 | ||||||||
Net asset value of shares issued upon reinvestment of dividends | ||||||||||||
and distributions: | ||||||||||||
Class A | 5,229,279 | 10,254,675 | 2,788,871 | 6,080,360 | ||||||||
Class B | 117,007 | 273,926 | 117,205 | 294,382 | ||||||||
Class C | 217,067 | 399,762 | 137,458 | 296,875 | ||||||||
28,832,796 | 62,685,390 | 6,778,142 | 20,511,818 | |||||||||
Cost of shares repurchased: | ||||||||||||
Class A | (24,953,850 | ) | (33,894,118 | ) | (12,013,955 | ) | (26,983,677 | ) | ||||
Class B | (1,318,813 | ) | (2,326,335 | ) | (1,291,610 | ) | (2,559,927 | ) | ||||
Class C | (1,630,099 | ) | (3,458,556 | ) | (951,087 | ) | (1,699,163 | ) | ||||
(27,902,762 | ) | (39,679,009 | ) | (14,256,652 | ) | (31,242,767 | ) | |||||
Increase (decrease) in net assets derived from capital share transactions | 930,034 | 23,006,381 | (7,478,510 | ) | (10,730,949 | ) | ||||||
Net Increase (Decrease) in Net Assets | 3,761,954 | 16,926,557 | (6,226,628 | ) | (15,681,484 | ) | ||||||
Net Assets: | ||||||||||||
Beginning of period | 408,198,735 | 391,272,178 | 235,595,051 | 251,276,535 | ||||||||
End of period | $ | 411,960,689 | $ | 408,198,735 | $ | 229,368,423 | $ | 235,595,051 | ||||
Distributions in excess of net investment income | $ | (22,418 | ) | $ | (22,418 | ) | $ | — | $ | — | ||
See accompanying notes |
22
Delaware Tax-Free Minnesota | Delaware Minnesota High-Yield | ||||||||||||||
Intermediate Fund | Municipal Bond Fund | ||||||||||||||
Six Months | Six Months | ||||||||||||||
Ended | Year Ended | Ended | Year Ended | ||||||||||||
2/28/07 | 8/31/06 | 2/28/07 | 8/31/06 | ||||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
Increase (Decrease) in Net Assets from Operations: | |||||||||||||||
Net investment income | $ | 1,076,419 | $ | 2,195,840 | $ | 2,466,494 | $ | 4,085,620 | |||||||
Net realized gain (loss) on investments | (14,575 | ) | (181,095 | ) | 94,542 | (187,727 | ) | ||||||||
Net change in unrealized appreciation/depreciation of investments | 274,754 | (652,780 | ) | 1,595,466 | (226,433 | ) | |||||||||
Net increase in net assets resulting from operations | 1,336,598 | 1,361,965 | 4,156,502 | 3,671,460 | |||||||||||
Dividends and Distributions to Shareholders from: | |||||||||||||||
Net Investment Income: | |||||||||||||||
Class A | (964,007 | ) | (1,965,980 | ) | (1,937,397 | ) | (3,084,904 | ) | |||||||
Class B | (31,056 | ) | (71,129 | ) | (156,550 | ) | (353,881 | ) | |||||||
Class C | (81,356 | ) | (158,749 | ) | (362,844 | ) | (628,298 | ) | |||||||
(1,076,419 | ) | (2,195,858 | ) | (2,456,791 | ) | (4,067,083 | ) | ||||||||
Capital Share Transactions: | |||||||||||||||
Proceeds from shares sold: | |||||||||||||||
Class A | 2,835,032 | 4,468,732 | 21,183,319 | 33,135,160 | |||||||||||
Class B | 20,568 | 12,810 | 603,200 | 1,943,331 | |||||||||||
Class C | 191,747 | 1,086,994 | 5,803,604 | 7,697,199 | |||||||||||
Net asset value of shares issued upon reinvestment of dividends | |||||||||||||||
and distributions: | |||||||||||||||
Class A | 691,407 | 1,416,395 | 1,239,166 | 1,867,441 | |||||||||||
Class B | 24,240 | 53,171 | 106,570 | 227,202 | |||||||||||
Class C | 61,095 | 116,926 | 261,691 | 437,783 | |||||||||||
3,824,089 | 7,155,028 | 29,197,550 | 45,308,116 | ||||||||||||
Cost of shares repurchased: | |||||||||||||||
Class A | (4,105,054 | ) | (9,830,857 | ) | (4,506,819 | ) | (11,064,882 | ) | |||||||
Class B | (177,749 | ) | (841,634 | ) | (1,007,926 | ) | (3,010,441 | ) | |||||||
Class C | (334,492 | ) | (1,961,559 | ) | (1,980,215 | ) | (3,355,422 | ) | |||||||
(4,617,295 | ) | (12,634,050 | ) | (7,494,960 | ) | (17,430,745 | ) | ||||||||
Increase (decrease) in net assets derived from capital share transactions | (793,206 | ) | (5,479,022 | ) | 21,702,590 | 27,877,371 | |||||||||
Net Increase (Decrease) in Net Assets | (533,027 | ) | (6,312,915 | ) | 23,402,301 | 27,481,748 | |||||||||
Net Assets: | |||||||||||||||
Beginning of period | 55,451,711 | 61,764,626 | 117,598,198 | 90,116,450 | |||||||||||
End of period (there was no undistributed income at either period end) | $ | 54,918,684 | $ | 55,451,711 | $ | 141,000,499 | $ | 117,598,198 |
See accompanying notes
23
Financial highlights
Delaware Tax-Free Minnesota Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 12.490 | $ 12.690 | $ 12.620 | $ 12.450 | $ 12.610 | $ 12.570 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.252 | 0.511 | 0.527 | 0.590 | 0.622 | 0.634 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.102 | (0.172 | ) | 0.222 | 0.348 | (0.148 | ) | 0.037 | |||||||||
Total from investment operations | 0.354 | 0.339 | 0.749 | 0.938 | 0.474 | 0.671 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.253 | ) | (0.513 | ) | (0.526 | ) | (0.600 | ) | (0.625 | ) | (0.631 | ) | |||||
Net realized gain on investments | (0.011 | ) | (0.026 | ) | (0.153 | ) | (0.168 | ) | (0.009 | ) | — | ||||||
Total dividends and distributions | (0.264 | ) | (0.539 | ) | (0.679 | ) | (0.768 | ) | (0.634 | ) | (0.631 | ) | |||||
Net asset value, end of period | $ 12.580 | $ 12.490 | $ 12.690 | $ 12.620 | $ 12.450 | $ 12.610 | |||||||||||
Total return2 | 2.86% | 2.78% | 6.12% | 7.72% | 3.80% | 5.54% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $ 385,361 | $ 381,720 | $ 364,491 | $ 348,000 | $ 340,029 | $ 356,522 | |||||||||||
Ratio of expenses to average net assets3 | 1.24% | 1.19% | 1.12% | 1.08% | 1.17% | 1.18% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly3 | 1.27% | 1.20% | 1.13% | 1.08% | 1.17% | 1.18% | |||||||||||
Ratio of net investment income to average net assets | 4.06% | 4.11% | 4.19% | 4.68% | 4.90% | 5.11% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 4.03% | 4.10% | 4.18% | 4.68% | 4.90% | 5.11% | |||||||||||
Portfolio turnover | 9% | 13% | 10% | 25% | 27% | 13% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
3 The ratio of expenses to average net assets and ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floater programs. See Notes 1 and 7 in “Notes to Financial Statements”. |
See accompanying notes
24
Delaware Tax-Free Minnesota Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 12.500 | $ 12.700 | $ 12.630 | $ 12.460 | $ 12.620 | $ 12.580 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.205 | 0.418 | 0.433 | 0.496 | 0.529 | 0.540 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.102 | (0.172 | ) | 0.222 | 0.348 | (0.150 | ) | 0.037 | |||||||||
Total from investment operations | 0.307 | 0.246 | 0.655 | 0.844 | 0.379 | 0.577 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.206 | ) | (0.420 | ) | (0.432 | ) | (0.506 | ) | (0.530 | ) | (0.537 | ) | |||||
Net realized gain on investments | (0.011 | ) | (0.026 | ) | (0.153 | ) | (0.168 | ) | (0.009 | ) | — | ||||||
Total dividends and distributions | (0.217 | ) | (0.446 | ) | (0.585 | ) | (0.674 | ) | (0.539 | ) | (0.537 | ) | |||||
Net asset value, end of period | $ 12.590 | $ 12.500 | $ 12.700 | $ 12.630 | $ 12.460 | $ 12.620 | |||||||||||
Total return2 | 2.48% | 2.01% | 5.33% | 6.91% | 3.02% | 4.75% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $ 10,615 | $ 11,354 | $ 12,810 | $ 14,588 | $ 16,394 | $ 17,043 | |||||||||||
Ratio of expenses to average net assets3 | 1.99% | 1.94% | 1.87% | 1.83% | 1.92% | 1.93% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly3 | 2.02% | 1.95% | 1.88% | 1.83% | 1.92% | 1.93% | |||||||||||
Ratio of net investment income to average net assets | 3.31% | 3.36% | 3.44% | 3.93% | 4.15% | 4.36% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.28% | 3.35% | 3.43% | 3.93% | 4.15% | 4.36% | |||||||||||
Portfolio turnover | 9% | 13% | 10% | 25% | 27% | 13% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
3 The ratio of expenses to average net assets and ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floater programs. See Notes 1 and 7 in “Notes to Financial Statements”. |
See accompanying notes
(continues) 25
Financial highlights
Delaware Tax-Free Minnesota Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 12.530 | $ 12.720 | $ 12.650 | $ 12.480 | $ 12.640 | $ 12.590 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.205 | 0.418 | 0.433 | 0.495 | 0.529 | 0.540 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.102 | (0.162 | ) | 0.222 | 0.348 | (0.151 | ) | 0.047 | |||||||||
Total from investment operations | 0.307 | 0.256 | 0.655 | 0.843 | 0.378 | 0.587 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.206 | ) | (0.420 | ) | (0.432 | ) | (0.505 | ) | (0.529 | ) | (0.537 | ) | |||||
Net realized gain on investments | (0.011 | ) | (0.026 | ) | (0.153 | ) | (0.168 | ) | (0.009 | ) | — | ||||||
Total dividends and distributions | (0.217 | ) | (0.446 | ) | (0.585 | ) | (0.673 | ) | (0.538 | ) | (0.537 | ) | |||||
Net asset value, end of period | $ 12.620 | $ 12.530 | $ 12.720 | $ 12.650 | $ 12.480 | $ 12.640 | |||||||||||
Total return2 | 2.47% | 2.08% | 5.32% | 6.90% | 3.01% | 4.82% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $ 15,985 | $ 15,125 | $ 13,971 | $ 10,811 | $ 10,161 | $ 7,682 | |||||||||||
Ratio of expenses to average net assets3 | 1.99% | 1.94% | 1.87% | 1.83% | 1.92% | 1.93% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly3 | 2.02% | 1.95% | 1.88% | 1.83% | 1.92% | 1.93% | |||||||||||
Ratio of net investment income to average net assets | 3.31% | 3.36% | 3.44% | 3.93% | 4.15% | 4.36% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.28% | 3.35% | 3.43% | 3.93% | 4.15% | 4.36% | |||||||||||
Portfolio turnover | 9% | 13% | 10% | 25% | 27% | 13% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
3 The ratio of expenses to average net assets and ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floater programs. See Notes 1 and 7 in “Notes to Financial Statements”. |
See accompanying notes
26
Delaware Tax-Free Minnesota Insured Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 10.890 | $ 11.110 | $ 11.020 | $ 10.740 | $ 10.940 | $ 10.900 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.216 | 0.438 | 0.446 | 0.479 | 0.498 | 0.514 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.060 | (0.200 | ) | 0.138 | 0.282 | (0.197 | ) | 0.038 | |||||||||
Total from investment operations | 0.276 | 0.238 | 0.584 | 0.761 | 0.301 | 0.552 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.216 | ) | (0.436 | ) | (0.445 | ) | (0.481 | ) | (0.501 | ) | (0.512 | ) | |||||
Net realized gain on investments | — | (0.022 | ) | (0.049 | ) | — | — | — | |||||||||
Total dividends and distributions | (0.216 | ) | (0.458 | ) | (0.494 | ) | (0.481 | ) | (0.501 | ) | (0.512 | ) | |||||
Net asset value, end of period | $ 10.950 | $ 10.890 | $ 11.110 | $ 11.020 | $ 10.740 | $ 10.940 | |||||||||||
Total return2 | 2.56% | 2.23% | 5.42% | 7.20% | 2.75% | 5.25% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $ 208,107 | $ 212,859 | $ 226,671 | $ 227,018 | $ 231,738 | $ 239,763 | |||||||||||
Ratio of expenses to average net assets3 | 1.13% | 1.08% | 1.01% | 0.99% | 1.08% | 1.14% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly3 | 1.16% | 1.09% | 1.02% | 0.99% | 1.08% | 1.14% | |||||||||||
Ratio of net investment income to average net assets | 4.01% | 4.03% | 4.05% | 4.37% | 4.52% | 4.78% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.98% | 4.02% | 4.04% | 4.37% | 4.52% | 4.78% | |||||||||||
Portfolio turnover | 5% | 5% | 10% | 15% | 30% | 15% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
3 The ratio of expenses to average net assets and ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floater programs. See Notes 1 and 7 in “Notes to Financial Statements”. |
See accompanying notes
(continues) 27
Financial highlights
Delaware Tax-Free Minnesota Insured Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 10.880 | $ 11.100 | $ 11.010 | $ 10.730 | $ 10.940 | $ 10.890 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.176 | 0.357 | 0.364 | 0.397 | 0.415 | 0.433 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.050 | (0.200 | ) | 0.137 | 0.282 | (0.207 | ) | 0.048 | |||||||||
Total from investment operations | 0.226 | 0.157 | 0.501 | 0.679 | 0.208 | 0.481 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.176 | ) | (0.355 | ) | (0.362 | ) | (0.399 | ) | (0.418 | ) | (0.431 | ) | |||||
Net realized gain on investments | — | (0.022 | ) | (0.049 | ) | — | — | — | |||||||||
Total dividends and distributions | (0.176 | ) | (0.377 | ) | (0.411 | ) | (0.399 | ) | (0.418 | ) | (0.431 | ) | |||||
Net asset value, end of period | $ 10.930 | $ 10.880 | $ 11.100 | $ 11.010 | $ 10.730 | $ 10.940 | |||||||||||
Total return2 | 2.09% | 1.47% | 4.64% | 6.41% | 1.89% | 4.56% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $ 9,185 | $ 10,182 | $ 12,337 | $ 14,317 | $ 15,647 | $ 14,341 | |||||||||||
Ratio of expenses to average net assets3 | 1.88% | 1.83% | 1.76% | 1.74% | 1.83% | 1.89% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly3 | 1.91% | 1.84% | 1.77% | 1.74% | 1.83% | 1.89% | |||||||||||
Ratio of net investment income to average net assets | 3.26% | 3.28% | 3.30% | 3.62% | 3.77% | 4.03% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.23% | 3.27% | 3.29% | 3.62% | 3.77% | 4.03% | |||||||||||
Portfolio turnover | 5% | 5% | 10% | 15% | 30% | 15% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
3 The ratio of expenses to average net assets and ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floater programs. See Notes 1 and 7 in “Notes to Financial Statements”. |
See accompanying notes
28
Delaware Tax-Free Minnesota Insured Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 10.900 | $ 11.120 | $ 11.030 | $ 10.750 | $ 10.950 | $ 10.910 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.176 | 0.356 | 0.364 | 0.396 | 0.414 | 0.433 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.060 | (0.200 | ) | 0.137 | 0.282 | (0.197 | ) | 0.038 | |||||||||
Total from investment operations | 0.236 | 0.156 | 0.501 | 0.678 | 0.217 | 0.471 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.176 | ) | (0.354 | ) | (0.362 | ) | (0.398 | ) | (0.417 | ) | (0.431 | ) | |||||
Net realized gain on investments | — | (0.022 | ) | (0.049 | ) | — | — | — | |||||||||
Total dividends and distributions | (0.176 | ) | (0.376 | ) | (0.411 | ) | (0.398 | ) | (0.417 | ) | (0.431 | ) | |||||
Net asset value, end of period | $ 10.960 | $ 10.900 | $ 11.120 | $ 11.030 | $ 10.750 | $ 10.950 | |||||||||||
Total return2 | 2.18% | 1.46% | 4.63% | 6.39% | 1.97% | 4.46% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $ 12,076 | $ 12,554 | $ 12,269 | $ 12,028 | $ 11,966 | $ 6,083 | |||||||||||
Ratio of expenses to average net assets3 | 1.88% | 1.83% | 1.76% | 1.74% | 1.83% | 1.89% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly3 | 1.91% | 1.84% | 1.77% | 1.74% | 1.83% | 1.89% | |||||||||||
Ratio of net investment income to average net assets | 3.26% | 3.28% | 3.30% | 3.62% | 3.77% | 4.03% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.23% | 3.27% | 3.29% | 3.62% | 3.77% | 4.03% | |||||||||||
Portfolio turnover | 5% | 5% | 10% | 15% | 30% | 15% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
3 The ratio of expenses to average net assets and ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floater programs. See Notes 1 and 7 in “Notes to Financial Statements”. |
See accompanying notes
(continues) 29
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:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 10.860 | $ 11.010 | $ 10.890 | $ 10.630 | $ 10.720 | $ 10.580 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.221 | 0.429 | 0.407 | 0.444 | 0.469 | 0.512 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.050 | (0.150 | ) | 0.120 | 0.260 | (0.088 | ) | 0.138 | |||||||||
Total from investment operations | 0.271 | 0.279 | 0.527 | 0.704 | 0.381 | 0.650 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.221 | ) | (0.429 | ) | (0.407 | ) | (0.444 | ) | (0.471 | ) | (0.510 | ) | |||||
Total dividends and distributions | (0.221 | ) | (0.429 | ) | (0.407 | ) | (0.444 | ) | (0.471 | ) | (0.510 | ) | |||||
Net asset value, end of period | $ 10.910 | $ 10.860 | $ 11.010 | $ 10.890 | $ 10.630 | $ 10.720 | |||||||||||
Total return2 | 2.51% | 2.62% | 4.93% | 6.73% | 3.59% | 6.34% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $ 47,946 | $ 48,297 | $ 52,958 | $ 57,012 | $ 57,635 | $ 51,034 | |||||||||||
Ratio of expenses to average net assets3 | 0.77% | 0.75% | 0.79% | 0.89% | 0.96% | 0.98% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly3 | 1.02% | 0.97% | 0.95% | 1.00% | 1.06% | 0.98% | |||||||||||
Ratio of net investment income to average net assets | 4.08% | 3.96% | 3.72% | 4.10% | 4.32% | 4.86% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.83% | 3.74% | 3.56% | 3.99% | 4.22% | 4.86% | |||||||||||
Portfolio turnover | 14% | 11% | 25% | 30% | 23% | 35% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager and distributor, as applicable. Performance would have been lower had the expense limitation not been in effect. |
3 The ratio of expenses to average net assets and ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly for the years ended August 31, 2004, 2003, and 2002 includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floater programs. See Notes 1 and 7 in “Notes to Financial Statements”. |
See accompanying notes
30
Delaware Tax-Free Minnesota Intermediate Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 10.890 | $ 11.040 | $ 10.920 | $ 10.650 | $ 10.740 | $ 10.600 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.175 | 0.337 | 0.314 | 0.352 | 0.377 | 0.423 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.050 | (0.150 | ) | 0.120 | 0.270 | (0.088 | ) | 0.137 | |||||||||
Total from investment operations | 0.225 | 0.187 | 0.434 | 0.622 | 0.289 | 0.560 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.175 | ) | (0.337 | ) | (0.314 | ) | (0.352 | ) | (0.379 | ) | (0.420 | ) | |||||
Total dividends and distributions | (0.175 | ) | (0.337 | ) | (0.314 | ) | (0.352 | ) | (0.379 | ) | (0.420 | ) | |||||
Net asset value, end of period | $ 10.940 | $ 10.890 | $ 11.040 | $ 10.920 | $ 10.650 | $ 10.740 | |||||||||||
Total return2 | 2.07% | 1.75% | 4.03% | 5.91% | 2.70% | 5.43% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $ 1,869 | $ 1,993 | $ 2,811 | $ 3,224 | $ 4,002 | $ 2,852 | |||||||||||
Ratio of expenses to average net assets3 | 1.62% | 1.60% | 1.64% | 1.74% | 1.81% | 1.83% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly3 | 1.77% | 1.72% | 1.70% | 1.75% | 1.83% | 1.83% | |||||||||||
Ratio of net investment income to average net assets | 3.23% | 3.11% | 2.87% | 3.25% | 3.47% | 4.01% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.08% | 2.99% | 2.81% | 3.24% | 3.45% | 4.01% | |||||||||||
Portfolio turnover | 14% | 11% | 25% | 30% | 23% | 35% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
3 The ratio of expenses to average net assets and ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly for the years ended August 31, 2004, 2003, and 2002 includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floater programs. See Notes 1 and 7 in “Notes to Financial Statements”. |
See accompanying notes
(continues) 31
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:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 10.880 | $ 11.030 | $ 10.910 | $ 10.640 | $ 10.730 | $ 10.590 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.175 | 0.337 | 0.314 | 0.352 | 0.377 | 0.423 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.050 | (0.150 | ) | 0.120 | 0.270 | (0.088 | ) | 0.137 | |||||||||
Total from investment operations | 0.225 | 0.187 | 0.434 | 0.622 | 0.289 | 0.560 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.175 | ) | (0.337 | ) | (0.314 | ) | (0.352 | ) | (0.379 | ) | (0.420 | ) | |||||
Total dividends and distributions | (0.175 | ) | (0.337 | ) | (0.314 | ) | (0.352 | ) | (0.379 | ) | (0.420 | ) | |||||
Net asset value, end of period | $ 10.930 | $ 10.880 | $ 11.030 | $ 10.910 | $ 10.640 | $ 10.730 | |||||||||||
Total return2 | 2.08% | 1.75% | 4.04% | 5.91% | 2.71% | 5.44% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $ 5,104 | $ 5,162 | $ 5,996 | $ 7,188 | $ 6,544 | $ 4,887 | |||||||||||
Ratio of expenses to average net assets3 | 1.62% | 1.60% | 1.64% | 1.74% | 1.81% | 1.83% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly3 | 1.77% | 1.72% | 1.70% | 1.75% | 1.83% | 1.83% | |||||||||||
Ratio of net investment income to average net assets | 3.23% | 3.11% | 2.87% | 3.25% | 3.47% | 4.01% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.08% | 2.99% | 2.81% | 3.24% | 3.45% | 4.01% | |||||||||||
Portfolio turnover | 14% | 11% | 25% | 30% | 23% | 35% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager, as applicable. Performance would have been lower had the expense limitation not been in effect. |
3 The ratio of expenses to average net assets and ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly for the years ended August 31, 2004, 2003, and 2002 includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floater programs. See Notes 1 and 7 in “Notes to Financial Statements”. |
See accompanying notes
32
Delaware Minnesota High-Yield Municipal Bond Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 10.530 | $ 10.610 | $ 10.240 | $ 9.910 | $ 9.950 | $ 9.900 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.216 | 0.445 | 0.469 | 0.512 | 0.550 | 0.586 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.139 | (0.082 | ) | 0.372 | 0.328 | (0.030 | ) | 0.056 | |||||||||
Total from investment operations | 0.355 | 0.363 | 0.841 | 0.840 | 0.520 | 0.642 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.215 | ) | (0.443 | ) | (0.471 | ) | (0.510 | ) | (0.560 | ) | (0.592 | ) | |||||
Total dividends and distributions | (0.215 | ) | (0.443 | ) | (0.471 | ) | (0.510 | ) | (0.560 | ) | (0.592 | ) | |||||
Net asset value, end of period | $ 10.670 | $ 10.530 | $ 10.610 | $ 10.240 | $ 9.910 | $ 9.950 | |||||||||||
Total return2 | 3.41% | 3.54% | 8.40% | 8.65% | 5.33% | 6.74% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $ 106,695 | $ 87,504 | $ 63,802 | $ 42,636 | $ 36,644 | $ 34,867 | |||||||||||
Ratio of expenses to average net assets3 | 0.92% | 0.89% | 0.89% | 0.75% | 0.75% | 0.75% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly3 | 1.01% | 1.00% | 0.98% | 1.00% | 1.04% | 1.01% | |||||||||||
Ratio of net investment income to average net assets | 4.10% | 4.26% | 4.50% | 5.03% | 5.48% | 5.98% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 4.01% | 4.15% | 4.41% | 4.78% | 5.19% | 5.72% | |||||||||||
Portfolio turnover | 9% | 4% | 3% | 24% | 32% | 33% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. |
3 The ratio of expenses to average net assets and ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly for the period ended February 28, 2007, includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floater programs. See Notes 1 and 7 in “Notes to Financial Statements”. |
See accompanying notes
(continues) 33
Financial highlights
Delaware Minnesota High-Yield Municipal Bond Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||
Ended | Year Ended | ||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||
(Unaudited) | |||||||||||||||||
Net asset value, beginning of period | $ 10.550 | $ 10.630 | $ 10.250 | $ 9.930 | $ 9.970 | $ 9.910 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||
Net investment income | 0.177 | 0.367 | 0.391 | 0.435 | 0.475 | 0.513 | |||||||||||
Net realized and unrealized gain (loss) on investments | 0.139 | (0.082 | ) | 0.381 | 0.318 | (0.030 | ) | 0.063 | |||||||||
Total from investment operations | 0.316 | 0.285 | 0.772 | 0.753 | 0.445 | 0.576 | |||||||||||
Less dividends and distributions from: | |||||||||||||||||
Net investment income | (0.176 | ) | (0.365 | ) | (0.392 | ) | (0.433 | ) | (0.485 | ) | (0.516 | ) | |||||
Total dividends and distributions | (0.176 | ) | (0.365 | ) | (0.392 | ) | (0.433 | ) | (0.485 | ) | (0.516 | ) | |||||
Net asset value, end of period | $ 10.690 | $ 10.550 | $ 10.630 | $ 10.250 | $ 9.930 | $ 9.970 | |||||||||||
Total return3 | 3.02% | 2.77% | 7.68% | 7.71% | 4.55% | 6.03% | |||||||||||
Ratios and supplemental data: | |||||||||||||||||
Net assets, end of period (000 omitted) | $ 9,403 | $ 9,578 | $ 10,505 | $ 12,463 | $ 12,513 | $ 13,379 | |||||||||||
Ratio of expenses to average net assets3 | 1.67% | 1.64% | 1.64% | 1.50% | 1.50% | 1.50% | |||||||||||
Ratio of expenses to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly3 | 1.76% | 1.75% | 1.73% | 1.75% | 1.79% | 1.76% | |||||||||||
Ratio of net investment income to average net assets | 3.35% | 3.51% | 3.75% | 4.28% | 4.73% | 5.23% | |||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.26% | 3.40% | 3.66% | 4.03% | 4.44% | 4.97% | |||||||||||
Portfolio turnover | 9% | 4% | 3% | 24% | 32% | 33% | |||||||||||
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. |
3 The ratio of expenses to average net assets and ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly for the period ended February 28, 2007, includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floater programs. See Notes 1 and 7 in “Notes to Financial Statements”. |
See accompanying notes
34
Delaware Minnesota High-Yield Municipal Bond Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
Six Months | |||||||||||||||||||||||
Ended | Year Ended | ||||||||||||||||||||||
2/28/071 | 8/31/06 | 8/31/05 | 8/31/04 | 8/31/03 | 8/31/02 | ||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||
Net asset value, beginning of period | $ | 10.550 | $ | 10.630 | $ | 10.250 | $ | 9.930 | $ | 9.970 | $ | 9.910 | |||||||||||
Income (loss) from investment operations: | |||||||||||||||||||||||
Net investment income | 0.177 | 0.367 | 0.391 | 0.435 | 0.475 | 0.513 | |||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.139 | (0.082 | ) | 0.381 | 0.318 | (0.030 | ) | 0.063 | |||||||||||||||
Total from investment operations | 0.316 | 0.285 | 0.772 | 0.753 | 0.445 | 0.576 | |||||||||||||||||
Less dividends and distributions from: | |||||||||||||||||||||||
Net investment income | (0.176 | ) | (0.365 | ) | (0.392 | ) | (0.433 | ) | (0.485 | ) | (0.516 | ) | |||||||||||
Total dividends and distributions | (0.176 | ) | (0.365 | ) | (0.392 | ) | (0.433 | ) | (0.485 | ) | (0.516 | ) | |||||||||||
Net asset value, end of period | $ | 10.690 | $ | 10.550 | $ | 10.630 | $ | 10.250 | $ | 9.930 | $ | 9.970 | |||||||||||
Total return2 | 3.02% | 2.76% | 7.68% | 7.71% | 4.54% | 6.03% | |||||||||||||||||
Ratios and supplemental data: | |||||||||||||||||||||||
Net assets, end of period (000 omitted) | $ | 24,902 | $ | 20,516 | $ | 15,809 | $ | 11,435 | $ | 10,754 | $ | 7,840 | |||||||||||
Ratio of expenses to average net assets3 | 1.67% | 1.64% | 1.64% | 1.50% | 1.50% | 1.50% | |||||||||||||||||
Ratio of expenses to average net assets | |||||||||||||||||||||||
prior to expense limitation and expenses paid indirectly3 | 1.76% | 1.75% | 1.73% | 1.75% | 1.79% | 1.76% | |||||||||||||||||
Ratio of net investment income to average net assets | 3.35% | 3.51% | 3.75% | 4.28% | 4.73% | 5.23% | |||||||||||||||||
Ratio of net investment income to average net assets | |||||||||||||||||||||||
prior to expense limitation and expenses paid indirectly | 3.26% | 3.40% | 3.66% | 4.03% | 4.44% | 4.97% | |||||||||||||||||
Portfolio turnover | 9% | 4% | 3% | 24% | 32% | 33% |
1 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers and payment of fees by the manager. Performance would have been lower had the expense limitation not been in effect. |
3 The ratio of expenses to average net assets and ratio of expenses to average net assets prior to expense limitation and expenses paid indirectly for the period ended February 28, 2007, includes interest and related expenses which include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees in connection with the Fund’s participation in inverse floater programs. See Notes 1 and 7 in “Notes to Financial Statements”. |
See accompanying notes
35
Notes to financial statements
Delaware Minnesota Municipal Bond Funds
February 28, 2007 (Unaudited)
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 Insured Funds is organized as a Delaware statutory trust and offers two series: Delaware Tax-Free Arizona Insured Fund and Delaware Tax-Free Minnesota Insured Fund. Voyageur Tax Free Funds is organized as a Delaware statutory trust and offers the Delaware Tax-Free Minnesota Fund. Voyageur Intermediate Tax Free Funds is organized as a Delaware statutory trust and offers the Delaware Tax-Free Minnesota Intermediate Fund. Voyageur Mutual Funds, Voyageur Insured Funds, Voyageur Tax Free Funds and Voyageur Intermediate Tax Free Funds are individually referred to as “Trust” and collectively as the “the Trusts.” These financial statements and the related notes pertain to Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured Fund, Delaware Tax-Free Minnesota Intermediate Fund and Delaware Minnesota High-Yield Municipal Bond Fund (each referred to as a “Fund” or collectively as the “Funds”). The above Trusts are open-end investment companies. The Funds are considered non-diversified under the Investment Company Act of 1940, as amended, and offer Class A, Class B, and Class C shares. Class A shares are sold with a front-end sales charge of up to 4.50% for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured Fund and Delaware Minnesota High-Yield Municipal Bond Fund and up to 2.75% for Delaware Tax-Free Minnesota Intermediate Fund. Class A share purchases of $1,000,000 or more will incur a contingent deferred sales charge of 1% if redeemed during the first year and 0.50% during the second year, provided that Delaware Distributors, L. P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Class B shares are sold with a contingent deferred sales charge that declines from 4% to zero for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured Fund and Delaware Minnesota High-Yield Municipal Bond Fund and that declines from 2% to zero for Delaware Tax-Free Minnesota Intermediate Fund, depending upon the period of time the shares are held. Class B shares will automatically convert to Class A on a quarterly basis approximately eight years after purchase for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured Fund and Delaware Minnesota High-Yield Municipal Bond Fund and approximately five years after purchase for Delaware Tax-Free Minnesota Intermediate Fund. Class C shares are sold with a contingent deferred sales charge of 1%, if redeemed during the first twelve months.
The investment objective of Delaware Tax-Free Minnesota Fund and Delaware Tax-Free Minnesota Insured Fund is to seek as high a level of current income exempt from federal income tax and from the Minnesota state personal income tax, as is consistent with preservation of capital.
The investment objective of Delaware Tax-Free Minnesota Intermediate Fund is to seek to provide investors with preservation of capital and, secondarily, current income exempt from federal income tax and from the Minnesota state personal income tax, by maintaining a dollar-weighted average effective portfolio maturity of 10 years or less.
The investment objective of Delaware Minnesota High-Yield Municipal Bond Fund is to seek as high a level of current income exempt from federal income tax and from the Minnesota state personal income tax, primarily through investment in medium- and lower-grade municipal obligations.
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Funds.
Security Valuation — Long-term debt securities are valued by an independent pricing service and such prices are believed to reflect the fair value of such securities. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Open-end investment companies are valued at their published net asset value. Other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of each Fund’s Board of Trustees. In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures, aftermarket trading or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).
In September 2006, Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 “Fair Value Measurements” (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.
Federal Income Taxes — Each Fund intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.
On July 13, 2006, FASB released FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing 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 would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows implementing FIN 48 in each Fund’s net asset value calculations as late as each Fund’s last net asset value calculation in the first required financial statement reporting period. As a result, each Fund will incorporate FIN 48 in its semiannual report on February 28, 2008. Although each Fund’s tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on each Fund’s financial statements.
36
1. Significant Accounting Policies (continued)
Class Accounting — Investment income and common expenses are allocated to the classes of the Funds on the basis of “settled shares” of each class in relation to the net assets of the Funds. Realized and unrealized gain (loss) on investments are allocated to the various classes of the Funds on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.
Use of Estimates — The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Interest and Related Expenses — Interest and related expenses include, but are not limited to, interest expense, remarketing fees, liquidity fees, and trustees’ fees from the Delaware Tax-Free Minnesota Fund’s, Delaware Tax-Free Minnesota Insured Fund’s, and Delaware Minnesota High-Yield Municipal Bond Fund’s participation in inverse floater programs where the Funds have transferred their own bonds to a trust that issues floating rate securities with an aggregate principal amount equal to the principal of the transferred bonds. In consideration of the conveyance of the bond, the Funds receive the inverse floating rate securities and cash from the trust. As a result of certain rights retained by the Funds, the transfer of the bond is not considered a sale, but rather a form of financing for accounting purposes whereby the cash received is recorded as a liability and interest expense is recorded based on the interest rate of the floating rate securities. Remarketing fees, liquidity fees, and trustees’ fees expenses are recorded on the accrual basis.
For the six months ended February 28, 2007, Delaware Tax-Free Minnesota Fund and Delaware Tax-Free Minnesota Insured Fund had an average daily liability from the participation in inverse floater programs of $31,105,000 and $13,275,000, respectively, and recorded interest expense at an average rate of 3.91% and 3.94%, respectively.
For the period September 1, 2006 through October 30, 2006, Delaware Minnesota High-Yield Municipal Bond Fund had an average daily liability from the participation in inverse floater programs of $1,000,000 and recorded interest expense at an average rate of 4.07%.
Other — Expenses directly attributable to a Fund are charged directly to that Fund. Other expenses common to various funds within the Delaware Investments® Family of Funds are generally allocated amongst such funds on the basis of average net assets. Management fees and some other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Interest income is recorded on the accrual basis. Discounts and premiums are amortized to interest income over the lives of the respective securities. Each Fund declares dividends daily from net investment income and pays such dividends monthly and declares and pays distributions from net realized gain on investments, if any, annually.
The Funds receive earnings credits from their custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees and on the Statements of Operations with the corresponding expense offset shown as “expense paid indirectly.”
2. Investment Management, Administration Agreements and Other Transactions with Affiliates
In accordance with the terms of its respective investment management agreement, each Fund pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee based on each Fund’s average daily net assets as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Minnesota | ||||||||||||||
Delaware Tax-Free | Minnesota | Minnesota | High-Yield Municipal | |||||||||||||
Minnesota Fund | Insured Fund | Intermediate Fund | Bond Fund | |||||||||||||
On the first $500 million | 0.550% | 0.500% | 0.500% | 0.550% | ||||||||||||
On the next $500 million | 0.500% | 0.475% | 0.475% | 0.500% | ||||||||||||
On the next $1.5 billion | 0.450% | 0.450% | 0.450% | 0.450% | ||||||||||||
In excess of $2.5 billion | 0.425% | 0.425% | 0.425% | 0.425% |
DMC has contractually agreed to waive that portion, if any, of its management fee and reimburse each Fund to the extent necessary to ensure that annual operating expenses, exclusive of taxes, interest, brokerage commissions, 12b-1 plan expense, certain insurance costs and non-routine expenses or costs, do not exceed specified percentages of average daily net assets as shown below:
Delaware Tax-Free | Delaware Tax-Free | Delaware Minnesota | ||||||||||||||
Delaware Tax-Free | Minnesota | Minnesota | High-Yield Municipal | |||||||||||||
Minnesota Fund | Insured Fund | Intermediate Fund | Bond Fund | |||||||||||||
Operating expense limitation as a | ||||||||||||||||
percentage of average daily | ||||||||||||||||
net assets (per annum) | 0.68% | 0.64% | 0.60% | 0.64% | ||||||||||||
Expiration date | 12/31/07 | 12/31/07 | 12/31/07 | 12/31/07 |
(continues) 37
Notes to financial statements
Delaware Minnesota Municipal Bond Funds
2. Investment Management, Administration Agreements and Other Transactions with Affiliates (continued)
Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides accounting, administration, dividend disbursing and transfer agent services. Each Fund pays DSC a monthly fee computed at the annual rate of 0.04% of such Fund’s average daily net assets for accounting and administration services. Each Fund pays DSC a monthly fee based on the number of shareholder accounts for dividend disbursing and transfer agent services.
Pursuant to a distribution agreement and distribution plan, each Fund pays DDLP, the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.25% of the average daily net assets of the Class A shares and 1.00% of the average daily net assets of the Class B and C shares. DDLP has contracted to waive distribution and services fees through December 31, 2007 in order to prevent distribution and service fees of Class A shares from exceeding 0.15% of average daily net assets for Delaware Tax-Free Minnesota Intermediate Fund.
At February 28, 2007, each Fund had liabilities payable to affiliates as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Minnesota | ||||||||||||||
Delaware Tax-Free | Minnesota | Minnesota | High-Yield Municipal | |||||||||||||
Minnesota Fund | Insured Fund | Intermediate Fund | Bond Fund | |||||||||||||
Investment management fee payable | ||||||||||||||||
to DMC | $173,165 | $83,963 | $15,208 | $51,993 | ||||||||||||
Dividend disbursing, transfer agent, | ||||||||||||||||
accounting and administration fees | ||||||||||||||||
and expenses payable to DSC | 63,448 | 38,238 | 11,159 | 23,286 | ||||||||||||
Distribution fee payable to DDLP | 197,368 | 118,321 | 22,496 | 94,649 | ||||||||||||
Other expenses payable to | 18,874 | 9,474 | 3,376 | 5,219 | ||||||||||||
DMC and affiliates* |
*DMC, as part of its administrative services, pays operating expenses on behalf of each Fund and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, registration fees and trustees’ fees.
As provided in the investment management agreement, each Fund bears the cost of certain legal and tax services, including internal legal and tax services provided to each Fund by DMC and/or its affiliates’ employees. For the six months ended February 28, 2007, the Funds were charged internal legal and tax services provided by DMC and/or its affiliates’ employees as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Minnesota | ||||||||||||||
Delaware Tax-Free | Minnesota | Minnesota | High-Yield Municipal | |||||||||||||
Minnesota Fund | Insured Fund | Intermediate Fund | Bond Fund | |||||||||||||
$10,925 | $6,176 | $1,459 | $3,280 |
For the six months ended February 28, 2007, DDLP earned commissions on sales of Class A shares for each Fund as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Minnesota | ||||||||||||||
Delaware Tax-Free | Minnesota | Minnesota | High-Yield Municipal | |||||||||||||
Minnesota Fund | Insured Fund | Intermediate Fund | Bond Fund | |||||||||||||
$29,363 | $7,179 | $4,521 | $35,942 |
For the six months ended February 28, 2007, DDLP received gross contingent deferred sales charge commissions on redemption of each Fund’s Class A, Class B and Class C shares, respectively. These commissions were entirely used to offset up-front commissions previously paid by DDLP to broker-dealers on sales of those shares. The amounts received were as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Minnesota | ||||||||||||||
Delaware Tax-Free | Minnesota | Minnesota | High-Yield Municipal | |||||||||||||
Minnesota Fund | Insured Fund | Intermediate Fund | Bond Fund | |||||||||||||
Class A | $11,877 | $ 20 | $ — | $ — | ||||||||||||
Class B | 4,356 | 4,589 | 10 | 4,332 | ||||||||||||
Class C | 157 | 586 | 410 | 2,096 |
38
2. Investment Management, Administration Agreements and Other Transactions with Affiliates (continued)
Trustees’ fees and benefits include expenses accrued by the Funds for each Trustee’s retainer, per meeting fees and retirement benefits. Independent Trustees with over five years of uninterrupted service were eligible to participate in a retirement plan that provides for the payment of benefits upon retirement. The amount of the retirement benefit was determined based on factors set forth in the plan, including the number of years of service. On November 16, 2006, the Board of Trustees unanimously voted to terminate the retirement plan. Payments equal to the net present value of the earned benefits were made in 2007 to those independent trustees so entitled. For the six months ended February 28, 2007, the retirement benefit payouts were as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Minnesota | ||||||||||||||
Delaware Tax-Free | Minnesota | Minnesota | High-Yield Municipal | |||||||||||||
Minnesota Fund | Insured Fund | Intermediate Fund | Bond Fund | |||||||||||||
$50,888 | $29,233 | $6,902 | $14,909 |
Certain officers of DMC, DSC and DDLP are officers and/or trustees of the Trust. These officers and trustees are paid no compensation by the Funds.
3. Investments
For the six months ended February 28, 2007, the Funds made purchases and sales of investment securities other than short-term investments as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Minnesota | ||||||||||||||
Delaware Tax-Free | Minnesota | Minnesota | High-Yield Municipal | |||||||||||||
Minnesota Fund | Insured Fund | Intermediate Fund | Bond Fund | |||||||||||||
Purchases | $22,678,010 | $5,278,370 | $3,797,229 | $28,950,926 | ||||||||||||
Sales | 16,956,061 | 5,440,025 | 5,552,177 | 5,261,159 |
At February 28, 2007, the cost of investments for federal income tax purposes has been estimated since the final tax characteristics cannot be determined until fiscal year end. At February 28, 2007 the cost of investments and unrealized appreciation (depreciation) for each Fund were as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Minnesota | ||||||||||||||
Delaware Tax-Free | Minnesota | Minnesota | High-Yield Municipal | |||||||||||||
Minnesota Fund | Insured Fund | Intermediate Fund | Bond Fund | |||||||||||||
Cost of investments | $386,674,594 | $210,184,210 | $52,323,201 | $135,095,477 | ||||||||||||
Aggregate unrealized appreciation | $ 21,389,411 | $ 16,654,244 | $ 2,285,091 | $ 4,799,173 | ||||||||||||
Aggregate unrealized depreciation | (108,381 | ) | (2,641 | ) | (11,110 | ) | (189,761 | ) | ||||||||
Net unrealized appreciation | $ 21,281,030 | $ 16,651,603 | $ 2,273,981 | $ 4,609,412 |
4. Dividend and Distribution Information
Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles. Additionally, net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the six months ended February 28, 2007 and year ended August 31, 2006 was as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Minnesota | ||||||||||||||
Delaware Tax-Free | Minnesota | Minnesota | High-Yield Municipal | |||||||||||||
Minnesota Fund | Insured Fund | Intermediate Fund | Bond Fund | |||||||||||||
Six Months Ended 2/28/07* | ||||||||||||||||
Tax-exempt income | $ 8,145,239 | $4,517,120 | $1,076,419 | $2,456,791 | ||||||||||||
Long-term capital gain | 356,139 | — | — | — | ||||||||||||
Total | $ 8,501,378 | $4,517,120 | $1,076,419 | $2,456,791 | ||||||||||||
Year Ended 8/31/06 | ||||||||||||||||
Tax-exempt income | $16,312,106 | $9,369,886 | $2,195,858 | $4,067,083 | ||||||||||||
Ordinary income | 106,715 | — | — | — | ||||||||||||
Long-term capital gain | 627,495 | 476,138 | — | — | ||||||||||||
Total | $17,046,316 | $9,846,024 | $2,195,858 | $4,067,083 |
*Tax information for the period ended February 28, 2007 is an estimate and the tax character of dividends and distributions may be redesignated at fiscal year end.
(continues) 39
Notes to financial statements
Delaware Minnesota Municipal Bond Funds
5. Components of Net Assets on a Tax Basis
The components of net assets are estimated since final tax characteristics cannot be determined until fiscal year end. As of February 28, 2007, the estimated components of net assets on a tax basis were as follows:
Delaware Tax-Free | Delaware Tax-Free | Delaware Minnesota | ||||||||||||||
Delaware Tax-Free | Minnesota | Minnesota | High-Yield Municipal | |||||||||||||
Minnesota Fund | Insured Fund | Intermediate Fund | Bond Fund | |||||||||||||
Shares of beneficial interest | $ 390,712,670 | $212,843,046 | $54,115,490 | $138,919,482 | ||||||||||||
Accumulated tax-exempt income | (22,418 | ) | — | — | — | |||||||||||
Capital loss carryforwards as of 2/28/07 | — | — | (1,356,875 | ) | (2,432,446 | ) | ||||||||||
Realized gains (losses) 9/1/06-2/28/07 | 12,634 | (126,226 | ) | (109,745 | ) | (95,949 | ) | |||||||||
Post-October losses | (23,227 | ) | — | (4,167 | ) | — | ||||||||||
Unrealized appreciation of investments | 21,281,030 | 16,651,603 | 2,273,981 | 4,609,412 | ||||||||||||
Net assets | $411,960,689 | $229,368,423 | $54,918,684 | $141,000,499 |
The differences between book basis and tax basis components of net assets are primarily attributable to tax treatment of market discount on debt instruments and tax treatment of the inverse floater program.
Post-October losses represent losses realized on investment transactions from November 1, 2006 through February 28, 2007 that, in accordance with federal income tax regulations, each Fund has elected to defer and treat as having arisen in the following fiscal year.
For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to tax treatment of market discount on certain debt instruments. Results of operations and net assets were not affected by these reclassifications. For the six months ended February 28, 2007, the Funds recorded an estimate of these differences since the final tax characteristics cannot be determined until fiscal year end.
Delaware Tax-Free | Delaware Tax-Free | Delaware Minnesota | ||||||||||||||
Delaware Tax-Free | Minnesota | Minnesota | High-Yield Municipal | |||||||||||||
Minnesota Fund | Insured Fund | Intermediate Fund | Bond Fund | |||||||||||||
Undistributed (Accumulated) | ||||||||||||||||
net investment income (loss) | $ 16,237 | $ 12,956 | $ — | $(9,703 | ) | |||||||||||
Accumulated realized gain (loss) | (16,237 | ) | (12,956 | ) | — | 9,703 |
For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. Capital loss carryforwards remaining at August 31, 2006 will expire as follows:
Delaware Tax-Free | Delaware Tax-Free | ||||||||
Minnesota | Minnesota High-Yield | ||||||||
Year of Expiration | Intermediate Fund | Municipal Bond Fund | |||||||
2008 | $ — | $ 179,791 | |||||||
2009 | 1,024,839 | 1,267,552 | |||||||
2010 | 4,037 | 57,521 | |||||||
2011 | 246,659 | 243,334 | |||||||
2012 | — | 684,248 | |||||||
2014 | 81,340 | — | |||||||
Total | $1,356,875 | $2,432,446 |
For the six months ended February 28, 2007, the Delaware Tax-Free Minnesota Fund had capital gains of $12,634, which may reduce capital loss carryforwards. Delaware Tax-Free Minnesota Insured Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund had capital losses of $126,226, $109,745 and $95,949 respectively, which may increase the capital loss carryforwards.
40
6. Capital Shares
Transactions in capital shares were as follows:
Delaware Tax-Free | Delaware Tax-Free | ||||||||||
Minnesota Fund | Insured Fund | ||||||||||
Six Months | Six Months | ||||||||||
Ended | Year Ended | Ended | Year Ended | ||||||||
2/28/07 | 8/31/06 | 2/28/07 | 8/31/06 | ||||||||
Shares sold: | |||||||||||
Class A | 1,653,901 | 3,740,009 | 305,747 | 1,066,208 | |||||||
Class B | 30,853 | 64,648 | 11,531 | 32,933 | |||||||
Class C | 172,021 | 354,758 | 24,490 | 177,451 | |||||||
Shares issued upon reinvestments of dividends and distributions: | |||||||||||
Class A | 417,044 | 824,435 | 255,507 | 559,513 | |||||||
Class B | 9,325 | 22,000 | 10,748 | 27,111 | |||||||
Class C | 17,263 | 32,061 | 12,571 | 27,286 | |||||||
2,300,407 | 5,037,911 | 620,594 | 1,890,502 | ||||||||
Shares repurchased: | |||||||||||
Class A | (1,992,111 | ) | (2,730,163 | ) | (1,100,358 | ) | (2,484,487 | ) | |||
Class B | (105,102 | ) | (187,143 | ) | (118,431 | ) | (235,722 | ) | |||
Class C | (129,556 | ) | (277,488 | ) | (86,864 | ) | (156,558 | ) | |||
(2,226,769 | ) | (3,194,794 | ) | (1,305,653 | ) | (2,876,767 | ) | ||||
Net increase (decrease) | 73,638 | 1,843,117 | (685,059 | ) | (986,265 | ) | |||||
Delaware Tax-Free Minnesota | Delaware Minnesota High-Yield | ||||||||||
Intermediate Fund | Municipal Fund | ||||||||||
Six Months | Six Months | ||||||||||
Ended | Year Ended | Ended | Year Ended | ||||||||
2/28/07 | 8/31/06 | 2/28/07 | 8/31/06 | ||||||||
Shares sold: | |||||||||||
Class A | 260,561 | 413,224 | 1,998,730 | 3,175,962 | |||||||
Class B | 1,884 | 1,162 | 56,884 | 185,827 | |||||||
Class C | 17,547 | 100,419 | 546,952 | 736,336 | |||||||
Shares issued upon reinvestment of dividends and distributions: | |||||||||||
Class A | 63,508 | 130,882 | 116,932 | 178,840 | |||||||
Class B | 2,220 | 4,900 | 10,043 | 21,720 | |||||||
Class C | 5,602 | 10,784 | 24,652 | 41,851 | |||||||
351,322 | 661,371 | 2,754,193 | 4,340,536 | ||||||||
Shares repurchased: | |||||||||||
Class A | (377,075 | ) | (907,954 | ) | (425,701 | ) | (1,059,998 | ) | |||
Class B | (16,285 | ) | (77,656 | ) | (95,126 | ) | (288,064 | ) | |||
Class C | (30,686 | ) | (180,541 | ) | (186,802 | ) | (321,249 | ) | |||
(424,046 | ) | (1,166,151 | ) | (707,629 | ) | (1,669,311 | ) | ||||
Net increase (decrease) | (72,724 | ) | (504,780 | ) | 2,046,564 | 2,671,225 |
(continues) 41
Notes to financial statements
Delaware Minnesota Municipal Bond Funds
6. Capital Shares (continued)
For the six months ended February 28, 2007 and year ended August 31, 2006, the following shares and values were converted from Class B to Class A shares. The respective amounts are included in Class B redemptions and Class A subscriptions in the tables on the previous page and the Statements of Changes in Net Assets.
Six Months Ended | Year Ended | ||||||||||
2/28/07 | 8/31/06 | ||||||||||
Class B | Class A | Class B | Class A | ||||||||
Shares | Shares | Value | Shares | Shares | Value | ||||||
Delaware Tax-Free Minnesota Fund | 55,356 | 55,398 | $694,909 | 66,784 | 66,836 | $ 831,110 | |||||
Delaware Tax-Free Minnesota | |||||||||||
Insured Fund | 53,333 | 53,284 | 582,512 | 80,959 | 80,882 | 878,177 | |||||
Delaware Tax-Free Minnesota | |||||||||||
Intermediate Fund | 8,462 | 8,479 | 92,427 | 18,914 | 18,958 | 203,874 | |||||
Delaware Minnesota High-Yield | |||||||||||
Municipal Bond Fund | 57,202 | 57,284 | 606,039 | 167,328 | 167,637 | 1,747,428 |
7. Inverse Floaters
The Funds may participate in inverse floater programs where a fund transfers its own bonds to a trust that issues floating rate securities and inverse floating rate securities (“inverse floaters”) with an aggregate principal amount equal to the principal of the transferred bonds. The inverse floaters received by the Funds are derivative tax-exempt obligations with floating or variable interest rates that move in the opposite direction of short-term interest rates, usually at an accelerated speed. Consequently, the market values of the inverse floaters will generally be more volatile than other tax-exempt investments. The Funds typically use inverse floaters to adjust the duration of its portfolio. Duration measures a portfolio’s sensitivity to changes in interest rates. By holding inverse floaters with a different duration than the underlying bonds that the Funds transferred to the trust, the Funds seek to adjust its portfolio’s sensitivity to changes in interest rates. The Funds may also invest in inverse floaters to add additional income to the Funds or to adjust the Funds’ exposure to a specific segment of the yield curve. Securities held in trust relating to inverse floater programs are identified on the Statements of Net Assets.
Previously, the Funds treated these transactions as a sale of the bonds and as a purchase of the inverse floating rate securities. Under Statement of Financial Accounting Standards No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (FAS 140), the transfer of the bonds is not considered a sale, but rather a form of financing for accounting purposes.
8. Line of Credit
Each Fund, along with certain other funds in the Delaware Investments® Family of Funds (the “Participants”), participates in a $225,000,000 revolving line of credit facility to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each participant’s allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The Funds had no amounts outstanding as of February 28, 2007 or at any time during the period then ended.
9. Credit and Market Risk
The Funds concentrate their investments in securities issued by municipalities, mainly in Minnesota. The value of these investments may be adversely affected by new legislation within the state, regional or local economic conditions, and differing levels of supply and demand for municipal bonds. Many municipalities insure repayment for their obligations. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons and there is no assurance that the insurance company will meet its obligations. These securities have been identified in the Statements of Net Assets.
The Funds may invest in advanced refunded bonds, escrow secured bonds or defeased bonds. Under current federal tax laws and regulations, state and local government borrowers are permitted to refinance outstanding bonds by issuing new bonds. The issuer refinances the outstanding debt to either reduce interest costs or to remove or alter restrictive covenants imposed by the bonds being refinanced. A refunding transaction where the municipal securities are being refunded within 90 days from the issuance of the refunding issue is known as a “current refunding”. “Advance refunded bonds” are bonds in which the refunded bond issue remains outstanding for more than 90 days following the issuance of the refunding issue. In an advance refunding, the issuer will use the proceeds of a new bond issue to purchase high grade interest bearing debt securities which are then deposited in an irrevocable escrow account held by an escrow agent to secure all future payments of principal and interest and bond premium of the advance refunded bond. Bonds are “escrowed to maturity” when the proceeds of the refunding issue are deposited in an escrow account for investment sufficient to pay all of the principal and interest on the original interest payment and maturity dates. Bonds are considered “pre-refunded” when the refunding issue’s
42
9. Credit and Market Risk (continued)
proceeds are escrowed only until a permitted call date or dates on the refunded issue with the refunded issue being redeemed at the time, including any required premium. Bonds become “defeased” when the rights and interests of the bondholders and of their lien on the pledged revenues or other security under the terms of the bond contract and are substituted with an alternative source of revenues (the escrow securities) sufficient to meet payments of principal and interest to maturity or to the first call dates. Escrowed secured bonds will often receive a rating of AAA from Moody’s Investors Service, Inc., Standard & Poor’s Ratings Group, and/or Fitch Ratings due to the strong credit quality of the escrow securities and the irrevocable nature of the escrow deposit agreement. The Tax Free Minnesota Insured Funds will purchase escrow secured bonds without additional insurance only where the escrow is invested in securities of the U.S. government or agencies or instrumentalities of the U.S. government.
Each Fund may invest up to 15% of its total assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair each Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, each Fund’s Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of each Fund’s limitation on investments in illiquid assets. At February 28, 2007, there were no Rule 144A securities. Illiquid securities have been identified on the Statements of Net Assets.
10. Contractual Obligations
The Funds enter into contracts in the normal course of business that contain a variety of indemnifications. The Funds’ maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts. Management has reviewed each Fund’s existing contracts and expects the risk of loss to be remote.
11. Fund Reorganization
On August 17, 2006, the Board of Trustees responsible for Delaware Tax-Free Minnesota Insured Fund (the “Reorganizing Fund”) approved a proposal to reorganize the Reorganizing Fund with and into the Delaware Tax-Free Minnesota Fund (the “Acquiring Fund”) subject to shareholder approval. The Board of Trustees responsible for the Delaware Tax-Free Minnesota Fund also approved the reorganization. On September 1, 2006, the Reorganizing Fund was closed to new investors. On March 30, 2007, the shareholders of the Reorganizing Fund approved the reorganization of their Fund. The reorganization took place on April 13, 2007.
12. Subsequent Event
At a meeting on February 16, 2007, the Board of Trustees of Delaware Investments Family of Funds approved the termination of new sales and most subsequent investments of Class B shares of each fund in the complex (each, a “Fund”). Effective at the close of business on May 31, 2007, no new or subsequent investments, including investments through automatic investment plans and by qualified retirement plans (such as 401(k) plans, 403(b) plans, or 457 plans), will be allowed in Class B shares of a Fund, except through a reinvestment of dividends or capital gains or permitted exchanges. Existing shareholders of Class B shares may continue to hold their Class B shares, reinvest dividends into Class B shares, and exchange their Class B shares of one Fund for Class B shares of another Fund, as permitted by existing exchange privileges. Existing Class B shareholders wishing to make subsequent purchases in a Fund’s shares will be permitted to invest in other classes of the Fund, subject to that class’ pricing structure and eligibility requirements, if any.
For Class B shares outstanding as of May 31, 2007 and Class B shares acquired upon reinvestment of dividends or capital gains, all Class B share attributes, including the contingent deferred sales charge (“CDSC”) schedules, conversion to Class A schedule, and distribution and service (12b-1) fees, will continue in their current form. However, effective at the close of business on May 31, 2007, reinvestment of redeemed shares with respect to Class B shares (which, as described in the prospectus, permits you to reinvest within 12 months of selling your shares and have any CDSC you paid on such shares credited back to your account) will be discontinued. In addition, because a Fund’s or its distributor’s ability to assess certain sales charges and fees is dependent on the sale of new shares, the termination of new purchases of Class B shares could ultimately lead to the elimination and/or reduction of such sales charges and fees. A Fund may not be able to provide shareholders with advance notice of the reduction in these sales charges and fees. You will be notified via a Prospectus Supplement if there are any changes to any attributes, sales charges, or fees.
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About the organization
This semiannual report is for the information of Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured 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 a current prospectus for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Insured Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund and the Delaware Investments® Performance Update for the most recently completed calendar quarter. The prospectus sets forth details about charges, expenses, investment objectives, and operating policies of the Fund. You should read the prospectus carefully before you invest. The figures in this report represent past results that are not a guarantee of future results. The return and principal value of an investment in the Fund will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
Board of trustees Patrick P. Coyne Thomas L. Bennett John A. Fry Anthony D. Knerr Lucinda S. Landreth Ann R. Leven Thomas F. Madison Janet L. Yeomans J. Richard Zecher | Affiliated officers David F. Connor David P. O’Connor John J. O’Connor Richard Salus | Contact information Investment manager National distributor Shareholder servicing, dividend For shareholders For securities dealers and financial Web site |
Delaware Investments is the marketing name of Delaware Management Holdings, Inc. and its subsidiaries.
Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. Each Fund’s Forms N-Q, as well as a description of the policies and procedures that each Fund uses to determine how to vote proxies (if any) relating to portfolio securities are available without charge (i) upon request, by calling 800 523-1918; (ii) on each Fund’s Web site at http://www.delawareinvestments.com; and (iii) on the Commission’s Web site at http://www.sec.gov. Each Fund’s Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330.
Information (if any) regarding how each Fund voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through each Fund’s Web site at http://www.delawareinvestments.com; and (ii) on the Commission’s Web site at http://www.sec.gov.
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Register for Account Access today! Please visit us at www.delawareinvestments.com, select Individual Investors, and click Account Access.
Please call our Shareholder Service Center at 800 523-1918 Monday through Friday from 8:00 a.m. to 7:00 p.m., Eastern Time, for assistance with any questions.
(1579) | Printed in the USA |
SA-MNALL [2/07] CGI 4/07 | MF-07-03-147 PO11732 |
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Included as part of report to shareholders filed under Item 1 of this Form N-CSR.
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.
Management has made changes that have materially affected, or are reasonably likely to materially affect, registrant's internal controls over financial reporting. To seek to increase the controls' effectiveness, these changes provide for enhanced review of contracts relating to complex transactions and the applicability of generally accepted accounting principles to such transactions, including enhanced consultation with registrant's independent public accountants in connection with such reviews.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Item 12. Exhibits
(a) (1) Code of Ethics | ||
Not applicable. | ||
(2) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are attached hereto as Exhibit 99.CERT. | ||
(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934. | ||
Not applicable. | ||
(b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are furnished herewith as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf, by the undersigned, thereunto duly authorized.
Name of Registrant: Voyageur Insured Funds
PATRICK P. COYNE | |
By: | Patrick P. Coyne |
Title: | Chief Executive Officer |
Date: | May 4, 2007 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
PATRICK P. COYNE | |
By: | Patrick P. Coyne |
Title: | Chief Executive Officer |
Date: | May 4, 2007 |
RICHARD SALUS | |
By: | Richard Salus |
Title: | Chief Financial Officer |
Date: | May 4, 2007 |