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: | 811-07410 |
| Exact name of registrant as specified in charter: | Delaware Investments® National Municipal |
| Income Fund | |
| Address of principal executive offices: | 610 Market Street |
| Philadelphia, PA 19106 | |
| Name and address of agent for service: | David F. Connor, Esq. |
| 610 Market Street | |
| Philadelphia, PA 19106 | |
| Registrant’s telephone number, including area code: | (800) 523-1918 |
| Date of fiscal year end: | March 31 |
| Date of reporting period: | March 31, 2022 |
Item 1. Reports to Stockholders
 |  |
Annual report
Closed-end fund
Delaware Investments® National Municipal Income Fund
March 31, 2022
Macquarie Asset Management (MAM) is the asset management division of Macquarie Group. MAM is a full-service asset manager offering a diverse range of products across public and private markets including fixed income, equities, multi-asset solutions, private credit, infrastructure, renewables, natural assets, real estate, and asset finance. The Public Investments business is a part of MAM and includes the following investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, and Macquarie Investment Management Europe S.A.
Unless otherwise noted, views expressed herein are current as of March 31, 2022, and subject to change for events occurring after such date.
The Fund is not FDIC insured and is not guaranteed. It is possible to lose the principal amount invested.
Advisory services provided by Delaware Management Company, a series of MIMBT, a US registered investment advisor.
Other than Macquarie Bank Limited ABN 46 008 583 542 ("Macquarie Bank"), any Macquarie Group entity noted in this document is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these other Macquarie Group entities do not represent deposits or other liabilities of Macquarie Bank. Macquarie Bank does not guarantee or otherwise provide assurance in respect of the obligations of these other Macquarie Group entities. In addition, if this document relates to an investment, (a) the investor is subject to investment risk including possible delays in repayment and loss of income and principal invested and (b) none of Macquarie Bank or any other Macquarie Group entity guarantees any particular rate of return on or the performance of the investment, nor do they guarantee repayment of capital in respect of the investment.
The Fund is governed by US laws and regulations.
All third-party marks cited are the property of their respective owners.
©2022 Macquarie Management Holdings, Inc.
Portfolio management review
Delaware Investments ® National Municipal Income Fund
March 31, 2022 (Unaudited)
| Performance preview (for the year ended March 31, 2022) | |||
| Delaware Investments National Municipal Income Fund @ market price | 1-year return | +0.92 | % |
| Delaware Investments National Municipal Income Fund @ NAV | 1-year return | -3.87 | % |
| Lipper Closed-end General and Insured Municipal Debt Funds Average (Leveraged) @ market price | 1-year return | -8.88 | % |
| Lipper Closed-end General and Insured Municipal Debt Funds Average (Leveraged) @ NAV | 1-year return | -5.81 | % |
Past performance does not guarantee future results.
Performance at market price will differ from performance at net asset value (NAV). Although market price returns tend to reflect investment results over time, during shorter periods returns at market price can also be influenced by factors such as changing views about the Fund, market conditions, supply and demand for the Fund’s shares, or changes in the Fund’s distribution rate.
For complete, annualized performance for Delaware Investments National Municipal Income Fund, please see the table on page 3.
Economic backdrop
During the Fund’s fiscal year ended March 31, 2022, the US economy continued to bounce back from its sharp decline at the start of the coronavirus pandemic in 2020, benefiting as states and municipalities reopened their economies.
COVID-19 vaccines had promised to lower virus cases and hospitalization rates while boosting economic growth. New variants of the coronavirus, however, complicated the picture. The Delta variant emerged in the summer and fall. Then, in late 2021 and early 2022, the fast-spreading Omicron variant emerged, although it proved less likely than earlier variants to lead to severe health outcomes.
Despite these multiple coronavirus waves, the US economy had strong growth for the fiscal year. In the second quarter of 2021, the country’s gross domestic product (GDP) expanded by an annualized 6.7%. In the third quarter, US GDP growth slowed to 2.3%, as the Delta variant alongside supply-chain concerns weighed on economic activity. By the fourth quarter of 2021, however, national growth reached an estimated 6.9%. Robust consumer and business spending drove the increase, which came despite rising Omicron cases, a sharp pickup in inflation, and expectations for several US Federal Reserve interest rate hikes. The US economy grew by 5.7% in 2021, the country’s strongest growth for any calendar year since 1984.
As the economy continued to expand, the employment situation similarly improved throughout the fiscal year. The US jobless rate, which began the 12-month period at 6.0%, fell steadily and by March had reached 3.6% – the lowest level seen since the start of the pandemic.
As inflation accelerated, the Fed signaled it would raise interest rates off its historic lows. In March 2022, the Fed raised its federal funds short-term interest rate by 0.25 percentage points. This was the central bank’s first rate increase since late 2018. The Fed also signaled that multiple additional interest rate increases were likely to follow in 2022.
Municipal bond market conditions
The municipal bond market, as measured by the Bloomberg Municipal Bond Index, returned -4.47% for the fiscal year. That decline came amid sharply rising interest rates in the first quarter of 2022.
During the fiscal year, investors experienced two different sets of market conditions. For roughly the first three quarters of the fiscal year, municipal bonds benefited from a favorable technical backdrop – robust demand for tax-exempt debt alongside constrained supply. Other factors that boosted the performance of municipal bonds during this time frame included investors’ continued confidence in issuers’ underlying credit quality, ample fiscal stimulus from the federal government, higher-than-anticipated state and local tax collections, and expectations for higher future tax rates. With interest rates remaining low during the 12-month period, longer-dated, lower-rated municipal bonds were especially in demand due to their higher yields.
Starting in late 2021 and persisting through the rest of the fiscal year, market conditions shifted, as the Fed pivoted from seeing inflation as transitory to acting aggressively to slow rising prices. Meanwhile, concern about the Russia-Ukraine war added further uncertainty to the global economic environment. As rates in the US rose and investors expected more Fed rate hikes to come, the demand for municipal bonds steadily declined, leading to a less favorable technical backdrop for the asset class.
Yields on tax-exempt bonds rose for the fiscal year, while the municipal yield curve flattened, indicating that rates on shorter-term bonds rose more than on longer-dated bonds. Bonds with shorter maturities generally outperformed their intermediate- and longer-dated counterparts, while lower-rated bonds tended to outpace higher-quality issues.
These tables show municipal bond returns by maturity length and by credit quality for the fiscal year.
1
Portfolio management review
Delaware Investments ® National Municipal Income Fund
The following tables show the returns experienced by municipal bonds of varying maturity lengths and credit ratings for the Fund's fiscal year ended March 31, 2022:
| Returns by maturity | |||
| 1 year | (1.51 | )% | |
| 3 years | (3.31 | )% | |
| 5 years | (4.48 | )% | |
| 10 years | (4.79 | )% | |
| 22+ years | (5.30 | )% | |
| Returns by credit rating | |||
| AAA | (4.84 | )% | |
| AA | (4.59 | )% | |
| A | (4.23 | )% | |
| BBB | (3.85 | )% |
Source: Bloomberg.
A consistent management approach
We continue to manage the Fund following the same strategy we use regardless of the market backdrop. We emphasize a bottom-up investment approach, relying on our team’s thorough credit research to choose bonds on an issuer-by-issuer basis. We regularly seek tax-exempt bonds that offer the Fund’s shareholders what we see as an attractive trade-off between return opportunity and risk.
Pursuing this approach, we tend to maintain relatively less exposure to high-rated, lower-yielding bonds. Instead, we prefer to overweight bonds with lower-investment-grade or below-investment-grade credit ratings and solid underlying credit quality. We prefer to own lower-rated issues because we believe they provide the Fund with greater opportunity to add long-term value for shareholders.
For the first three-quarters of this fiscal year in particular, our purchase activity for the Fund was relatively limited. With credit spreads narrowing and interest rates falling, we saw little need to make large portfolio adjustments because the bonds we already owned in the Fund were generally more attractive to us than the new opportunities the market was offering.
When we did have funds available to invest via the proceeds of bond calls, maturities, or income payments, we sought to take advantage of attractive new issues available in the marketplace. When appropriate, we invested in longer-dated bonds in an effort to keep the Fund’s duration (interest-rate sensitivity) at our desired level.
In the first three months of 2022, as interest rates and bond yields rose and credit spreads widened, we engaged in various tax-loss swaps. With this strategy, we took advantage of opportunities to exchange bonds with lower yields for those with similar risk characteristics but higher yields. With this strategy, we improved the Fund’s income profile while also incurring a tax loss that we believe we may be able to apply to future gains.
Many of our swaps reflected a desire to enhance the Fund’s diversification. In February, the Fund acquired the assets of two state-specific tax-exempt bond funds: Delaware Investments® Minnesota Municipal Income Fund II, Inc. and Delaware Investments®Colorado Municipal Income Fund, Inc. As a result of this reorganization, the Fund gained more exposure to the Minnesota and Colorado state marketplaces than we found optimal. Thus, we quickly prioritized efforts to moderate that exposure. We swapped some Minnesota and Colorado holdings with newer ones that allowed us to achieve our diversification objectives while enhancing the Fund’s income profile. During the quarter, we made considerable progress in diversifying the Fund’s assets. We do, however, expect the diversification process to take time, given that the Minnesota and Colorado funds included various older bonds issued in much higher-interest rate environments, making them more difficult to replace in today’s lower-rate environment.
Individual performance effects
The performers for Delaware Investments National Municipal Income Fund were bonds issued for the Brightline high-speed rail project in South Florida. These nonrated bonds gained 14% for the Fund this fiscal year, far outpacing the Fund’s benchmark return. The bonds benefited from their relatively high income and limited interest rate sensitivity, as well as improved investor optimism about Brightline’s expanding market opportunity.
Bonds for the Legacy Cares athletic complex project in Mesa, Arizona also contributed to the Fund performance, gaining 11% for the fiscal year. These bonds gained ground as the issuer saw more credit improvement than investors had apparently expected. A high coupon and near-term call date also provided additional cushion for the bonds in a rising interest rate environment.
In contrast, bonds for the Chiara Communities senior housing project in Waukesha, Wisconsin, hampered results, returning -19% for the fiscal year and significantly lagging the benchmark. These bonds lagged as the issuer faced ongoing credit challenges owing to difficulties ramping up occupancy in its retirement community following the difficult pandemic years.
Other detractors from the Fund’s performance were University of North Carolina hospital bonds (-10%). These high-quality, non-callable issues struggled, largely due to their relatively extended duration, which proved a negative performance factor as interest rates rose.
2
Performance summary
Delaware Investments® National Municipal Income Fund
March 31, 2022 (Unaudited)
The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Please obtain the most recent performance data by calling 866 437-0252 or visiting our website at delawarefunds.com/closed-end.
| Fund performance | ||||||||||||
| Average annual total returns through March 31, 2022 | 1 year | 5 year | 10 year | Lifetime | ||||||||
| At market price | +0.92 | % | +4.31 | % | +4.65 | % | +4.69 | %* | ||||
| At net asset value | -3.87 | %** | +3.78 | % | +4.83 | % | +4.78 | %* | ||||
| * | The inception date of the performance shown is May 14, 1998. The Fund commenced operations on February 26, 1993. |
| ** | Total returns for the report period presented in the table differs from the return in “Financial highlights.” The total returns presented in the above table are calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total returns presented in “Financial highlights” are calculated in the same manner, but also takes into account certain adjustments that are necessary under US generally accepted accounting principles (US GAAP) required in the annual report. |
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.
The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.
High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds. Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.
Funds that have a significant percentage of assets allocated to one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than more geographically diversified funds.
The Fund may experience portfolio turnover in excess of 100%, which could result in higher transaction costs and tax liability.
The Fund’s use of leverage may expose common shareholders to additional volatility, and cause the Fund to incur certain costs. In the event that the Fund is unable to meet certain criteria (including, but not limited to, maintaining certain ratings with Fitch Ratings (Fitch), funding dividend payments or funding redemptions), the Fund will pay additional fees with respect to the leverage.
Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.
IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.
The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.
This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s (S&P), Moody’s Investors Service, and Fitch. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds
3
Performance summary
Delaware Investments® National Municipal Income Fund
rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.
Closed-end fund shares do not represent a deposit or obligation of, and are not guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation or any other government agency.
Closed-end funds, unlike open-end funds, are not continuously offered. After being issued during a one-time-only public offering, shares of closed-end funds are sold in the open market through a securities exchange. Net asset value (NAV) is calculated by subtracting total liabilities by total assets, then dividing by the number of shares outstanding. At the time of sale, your shares may have a market price that is above or below NAV, and may be worth more or less than your original investment.
The Bloomberg Municipal Bond Index, mentioned on page 1, measures the total return performance of the long-term investment grade tax-exempt bond market.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
The “Fund performance” table and the “Performance of a $10,000 investment” graph do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.
Returns reflect the reinvestment of all distributions. Dividends and distributions, if any, are assumed, for the purpose of this calculation to be reinvested at prices obtained under the Fund’s dividend reinvestment policy. Shares of the Fund were initially offered with a sales charge of 7%. Performance since inception does not include the sales charge or any other brokerage commission for purchases made since inception.
Past performance does not guarantee future results.
Market price versus net asset value (see notes on next page)
March 31, 2021 through March 31, 2022
| For period beginning March 31, 2012 through March 31, 2022 | Starting value | Ending value | |||
 | Delaware Investments National Municipal Income Fund @ NAV | $14.84 | $13.63 | ||
 | Delaware Investments National Municipal Income Fund @ market price | $13.12 | $12.65 | ||
Past performance is not a guarantee of future results.
4
Performance of a $10,000 Investment
Average annual total returns from March 31, 2012 through March 31, 2022
| For period beginning March 31, 2012 through March 31, 2022 | Starting value | Ending value | |||
| Delaware Investments® National Municipal Income Fund @ NAV | $10,000 | $16,032 | ||
| Lipper Closed-end General and Insured Municipal Debt Funds Average (Leveraged) @ NAV | $10,000 | $15,808 | ||
 | Delaware Investments National Municipal Income Fund @ market price | $10,000 | $15,761 | ||
 | Lipper Closed-end General and Insured Municipal Debt Funds Average (Leveraged) @ market price | $10,000 | $15,130 | ||
The “Performance of a $10,000 investment” graph assumes $10,000 invested in the Fund on March 31, 2011 and includes the reinvestment of all distributions at market value. The graph assumes $10,000 in the Lipper Closed-end General and Insured Municipal Debt Funds Average (Leveraged) at market price and at NAV. Performance of the Fund and the Lipper class at market value is based on market performance during the period. Performance of the Fund and Lipper class at NAV is based on the fluctuations in NAV during the period. Delaware Investments National Municipal Income Fund was initially offered with a sales charge of 7%. For market price, performance shown in both graphs above does not include fees, the initial sales charge, or any brokerage commissions on purchases. For NAV, performance shown in both graphs above includes fees, but does not include the initial sales charge or any brokerage commissions for purchases. Investments in the Fund are not available at NAV.
The Lipper Closed-end General and Insured Municipal Debt Funds Average (Leveraged) compares closed-end funds that either invest primarily in municipal debt issues rated in the top four credit ratings or invest primarily in municipal debt issues insured as to timely payment. These funds can be leveraged via use of debt, preferred equity, and/or reverse purchase agreements (source: Lipper).
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Market price is the price an investor would pay for shares of the Fund on the secondary market. NAV is the total value of one fund share, generally equal to a fund’s net assets divided by the number of shares outstanding.
Past performance does not guarantee future results.
5
Fund basics
As of March 31, 2022 (Unaudited)
Delaware Investments®
National Municipal Income Fund
Fund objective
The Fund seeks to provide current income exempt from regular
federal income tax, consistent with the preservation of capital.
Total Fund net assets
$285 million
Number of holdings
442
Fund start date
February 26, 1993
NYSE American symbol
VFL
CUSIP number
24610T108
6
Security type / sector / state / territory allocations
As of March 31, 2022 (Unaudited)
Sector designations may be different from the sector designations presented in other Fund materials.
Delaware Investments® National Municipal Income Fund
| Percentage | |||
| Security type / sector | of net assets | ||
| Municipal Bonds* | 146.96 | % | |
| Corporate Revenue Bonds | 6.63 | % | |
| Education Revenue Bonds | 19.16 | % | |
| Electric Revenue Bonds | 10.02 | % | |
| Healthcare Revenue Bonds | 40.06 | % | |
| Housing Revenue Bonds | 0.72 | % | |
| Lease Revenue Bonds | 7.83 | % | |
| Local General Obligation Bonds | 10.98 | % | |
| Pre-Refunded/Escrowed to Maturity Bonds | 9.33 | % | |
| Special Tax Revenue Bonds | 15.47 | % | |
| State General Obligation Bonds | 9.15 | % | |
| Transportation Revenue Bonds | 13.16 | % | |
| Water & Sewer Revenue Bonds | 4.45 | % | |
| Short-Term Investments | 1.51 | % | |
| Total Value of Securities | 148.47 | % | |
| Liquidation Value of Preferred** | (47.42 | %) | |
| Liabilities Net of Receivables and Other Assets | (1.05 | %) | |
| Total Net Assets | 100.00 | % | |
| * | As of the date of this report, Delaware Investments National Municipal Income Fund held bonds issued by or on behalf of territories and the states of the US as follows: |
| Percentage | |||
| State / territory | of net assets | ||
| Alabama | 0.18 | % | |
| Arizona | 2.09 | % | |
| California | 8.13 | % | |
| Colorado | 26.04 | % | |
| District of Columbia | 0.19 | % | |
| Florida | 2.78 | % | |
| Georgia | 1.33 | % | |
| Guam | 0.46 | % | |
| Illinois | 5.50 | % | |
| Indiana | 0.20 | % | |
| Kansas | 0.07 | % | |
| Louisiana | 0.73 | % | |
| Maryland | 0.27 | % | |
| Massachusetts | 0.19 | % | |
| Michigan | 0.38 | % | |
| Minnesota | 59.61 | % | |
| Mississippi | 0.35 | % | |
| Missouri | 0.53 | % | |
| Montana | 0.26 | % | |
| Nebraska | 0.09 | % | |
| New Jersey | 3.14 | % | |
| New York | 5.27 | % | |
| North Carolina | 0.22 | % | |
| Ohio | 0.87 | % | |
| Oregon | 0.19 | % | |
| Pennsylvania | 6.25 | % | |
| Puerto Rico | 19.16 | % | |
| Texas | 1.66 | % | |
| Utah | 0.24 | % | |
| Virginia | 0.85 | % | |
| Washington | 0.10 | % | |
| Wisconsin | 0.96 | % | |
| Wyoming | 0.18 | % | |
| Total Value of Securities | 148.47 | % | |
| ** | More information regarding the Fund’s use of preferred shares as leverage is included in Note 6 in “Notes to financial statements.” The Fund utilizes preferred shares as leverage in an attempt to obtain a higher return for the Fund. There is no assurance that the Fund will achieve its a higher return or its investment objectives through the use of such leverage. |
7
Schedule of investments
Delaware Investments® National Municipal Income Fund
March 31, 2022
| Principal | ||||||||
| amount° | Value (US $) | |||||||
| Municipal Bonds — 146.96% | ||||||||
| Corporate Revenue Bonds — 6.63% | ||||||||
| Arizona Industrial Development | ||||||||
| Authority Revenue | ||||||||
| (Legacy Cares, Inc. Project) | ||||||||
| Series A 144A 7.75% | ||||||||
| 7/1/50 # | 725,000 | $ | 821,809 | |||||
| Buckeye Tobacco Settlement | ||||||||
| Financing Authority | ||||||||
| (Senior) | ||||||||
| Series A-2 4.00% 6/1/48 | 900,000 | 903,690 | ||||||
| Central Plains Energy Project | ||||||||
| Revenue, Nebraska | ||||||||
| (Project No. 3) | ||||||||
| Series A 5.00% 9/1/36 | 225,000 | 263,419 | ||||||
| Commonwealth Financing | ||||||||
| Authority Revenue, | ||||||||
| Pennsylvania | ||||||||
| (Tobacco Master Settlement | ||||||||
| Payment) | ||||||||
| 4.00% 6/1/39 (AGM) | 1,015,000 | 1,065,506 | ||||||
| Denver City & County | ||||||||
| (United Airlines Project) | ||||||||
| 5.00% 10/1/32 (AMT) | 215,000 | 221,433 | ||||||
| Florida Development Finance | ||||||||
| Surface Transportation | ||||||||
| Facilities Revenue | ||||||||
| (Brightline Passenger Rail | ||||||||
| Project) | ||||||||
| Series B 144A 7.375% | ||||||||
| 1/1/49 (AMT) # | 680,000 | 718,427 | ||||||
| (Virgin Trains USA Passenger | ||||||||
| Rail Project) | ||||||||
| Series A 144A 6.50% | ||||||||
| 1/1/49 (AMT) # | 475,000 | 475,879 | ||||||
| George L Smith II Congress | ||||||||
| Center Authority Revenue | ||||||||
| (Convention Center Hotel) | ||||||||
| Series A 4.00% 1/1/54 | 2,750,000 | 2,697,612 | ||||||
| M-S-R Energy Authority, California | ||||||||
| Gas | ||||||||
| Series B 6.50% 11/1/39 | 250,000 | 339,247 | ||||||
| Series C 7.00% 11/1/34 | 1,000,000 | 1,334,610 | ||||||
| New York Transportation | ||||||||
| Development | ||||||||
| (Delta Air Lines, Inc. - | ||||||||
| LaGuardia Airport Terminals | ||||||||
| C&D Redevelopment | ||||||||
| Project) | ||||||||
| 4.00% 1/1/36 (AMT) | 750,000 | 767,115 | ||||||
| Public Authority for Colorado | ||||||||
| Energy Natural Gas Revenue | ||||||||
| 6.25% 11/15/28 | 865,000 | 1,002,743 | ||||||
| 6.50% 11/15/38 | 2,250,000 | 3,032,100 | ||||||
| Public Finance Authority, | ||||||||
| Wisconsin Airport Facilities | ||||||||
| Revenue | ||||||||
| (Grand Hyatt San Antonio Hotel | ||||||||
| Acquisition Project) | ||||||||
| 5.00% 2/1/62 | 1,475,000 | 1,546,111 | ||||||
| Shoals, Indiana | ||||||||
| (National Gypsum Project) | ||||||||
| 7.25% 11/1/43 (AMT) | 310,000 | 323,767 | ||||||
| St. Paul Port Authority Solid Waste | ||||||||
| Disposal Revenue | ||||||||
| (Gerdau St. Paul Steel Mill | ||||||||
| Project) | ||||||||
| Series 7 144A 4.50% | ||||||||
| 10/1/37 (AMT) # | 2,415,000 | 2,422,414 | ||||||
| Tobacco Settlement Financing | ||||||||
| Corporation, Louisiana | ||||||||
| Asset-Backed Note | ||||||||
| Series A 5.25% 5/15/35 | 460,000 | 479,131 | ||||||
| Tobacco Settlement Financing | ||||||||
| Corporation, New Jersey | ||||||||
| Series A 5.00% 6/1/46 | 130,000 | 141,539 | ||||||
| TSASC Revenue, New York | ||||||||
| (Settlement) | ||||||||
| Series A 5.00% 6/1/41 | 60,000 | 65,036 | ||||||
| Valparaiso, Indiana | ||||||||
| (Pratt Paper Project) | ||||||||
| 7.00% 1/1/44 (AMT) | 240,000 | 254,935 | ||||||
| 18,876,523 | ||||||||
| Education Revenue Bonds — 19.16% | ||||||||
| Arizona Industrial Development | ||||||||
| Authority Revenue | ||||||||
| (American Charter Schools | ||||||||
| Foundation Project) | ||||||||
| 144A 6.00% 7/1/47 # | 330,000 | 366,066 | ||||||
8
| Principal | ||||||||
| amount° | Value (US $) | |||||||
| Municipal Bonds (continued) | ||||||||
| Education Revenue Bonds (continued) | ||||||||
| Bethel Charter School Lease | ||||||||
| Revenue | ||||||||
| (Spectrum High School Project) | ||||||||
| Series A 4.375% 7/1/52 | 1,100,000 | $ | 1,103,762 | |||||
| Board of Trustees For Colorado | ||||||||
| Mesa University Enterprise | ||||||||
| Revenue | ||||||||
| Series B 5.00% 5/15/49 | 750,000 | 861,240 | ||||||
| Brooklyn Park Charter School | ||||||||
| Lease Revenue | ||||||||
| (Prairie Seeds Academy | ||||||||
| Project) | ||||||||
| Series A 5.00% 3/1/34 | 990,000 | 1,005,196 | ||||||
| Series A 5.00% 3/1/39 | 170,000 | 171,639 | ||||||
| California Educational Facilities | ||||||||
| Authority Revenue | ||||||||
| (Loma Linda University) | ||||||||
| Series A 5.00% 4/1/47 | 500,000 | 547,980 | ||||||
| (Stanford University) | ||||||||
| Series V-1 5.00% 5/1/49 | 900,000 | 1,181,295 | ||||||
| Series V-2 2.25% 4/1/51 | 500,000 | 376,650 | ||||||
| California School Finance | ||||||||
| Authority Revenue | ||||||||
| (Russell Westbrook Why Not? | ||||||||
| Academy - Obligated Group) | ||||||||
| Series A 144A 4.00% | ||||||||
| 6/1/51 # | 500,000 | 440,390 | ||||||
| Cologne Charter School Lease | ||||||||
| Revenue | ||||||||
| (Cologne Academy Project) | ||||||||
| Series A 5.00% 7/1/29 | 270,000 | 279,588 | ||||||
| Series A 5.00% 7/1/45 | 445,000 | 453,655 | ||||||
| Colorado Educational & Cultural | ||||||||
| Facilities Authority Revenue | ||||||||
| 144A 5.00% 7/1/36 # | 500,000 | 517,950 | ||||||
| 5.125% 11/1/49 | 765,000 | 798,316 | ||||||
| 144A 5.25% 7/1/46 # | 500,000 | 516,180 | ||||||
| (Alexander Dawson School- | ||||||||
| Nevada Project) | ||||||||
| 5.00% 5/15/29 | 760,000 | 829,639 | ||||||
| (Aspen View Academy Project) | ||||||||
| 4.00% 5/1/41 | 175,000 | 177,445 | ||||||
| (Charter School - Atlas | ||||||||
| Preparatory School) | ||||||||
| 144A 5.25% 4/1/45 # | 700,000 | 700,756 | ||||||
| (Charter School - Community | ||||||||
| Leadership Academy) | ||||||||
| 7.45% 8/1/48 | 500,000 | 524,850 | ||||||
| (Charter School - Peak to Peak | ||||||||
| Charter) | ||||||||
| 5.00% 8/15/34 | 1,000,000 | 1,051,280 | ||||||
| (Global Village Academy - | ||||||||
| Northglenn Project) | ||||||||
| 144A 5.00% 12/1/50 # | 475,000 | 465,747 | ||||||
| (Improvement - Charter School | ||||||||
| - University Lab School | ||||||||
| Building) | ||||||||
| 5.00% 12/15/45 | 500,000 | 527,435 | ||||||
| (Liberty Charter School) | ||||||||
| Series A 5.00% 1/15/44 | 1,000,000 | 1,026,160 | ||||||
| (Loveland Classical Schools) | ||||||||
| 144A 5.00% 7/1/36 # | 625,000 | 654,087 | ||||||
| (Science Technology | ||||||||
| Engineering and Math | ||||||||
| (Stem) School Project) | ||||||||
| 5.00% 11/1/54 | 700,000 | 727,237 | ||||||
| (Skyview Charter School) | ||||||||
| 144A 5.50% 7/1/49 # | 750,000 | 772,380 | ||||||
| (Vail Mountain School Project) | ||||||||
| 4.00% 5/1/46 | 25,000 | 24,760 | ||||||
| Colorado School of Mines | ||||||||
| Series B 5.00% 12/1/42 | 270,000 | 275,856 | ||||||
| Deephaven Charter School | ||||||||
| (Eagle Ridge Academy Project) | ||||||||
| Series A 5.25% 7/1/37 | 590,000 | 626,368 | ||||||
| Series A 5.25% 7/1/40 | 500,000 | 528,765 | ||||||
| Duluth Housing & Redevelopment | ||||||||
| Authority | ||||||||
| (Duluth Public Schools | ||||||||
| Academy Project) | ||||||||
| Series A 5.00% 11/1/48 | 1,200,000 | 1,232,400 | ||||||
| Florida Development Finance | ||||||||
| Surface Transportation | ||||||||
| Facilities Revenue | ||||||||
| (River City Education Services | ||||||||
| Project) | ||||||||
| Series A-1 5.00% 7/1/51 | 395,000 | 421,749 | ||||||
| Series A-1 5.00% 7/1/51 | 1,330,000 | 1,356,494 | ||||||
| Series A-1 5.00% 2/1/57 | 575,000 | 607,160 | ||||||
| Forest Lake Minnesota Charter | ||||||||
| School Revenue | ||||||||
| (Lake International Language | ||||||||
| Academy) | ||||||||
| Series A 5.375% 8/1/50 | 915,000 | 979,526 | ||||||
| Series A 5.75% 8/1/44 | 705,000 | 723,555 | ||||||
9
Schedule of investments
Delaware Investments® National Municipal Income Fund
| Principal | ||||||||
| amount° | Value (US $) | |||||||
| Municipal Bonds (continued) | ||||||||
| Education Revenue Bonds (continued) | ||||||||
| Health & Educational Facilities | ||||||||
| Authority of the State of | ||||||||
| Missouri | ||||||||
| (St. Louis College of Pharmacy | ||||||||
| Project) | ||||||||
| 5.25% 5/1/33 | 500,000 | $ | 518,545 | |||||
| Hugo Charter School Lease | ||||||||
| Revenue | ||||||||
| (Noble Academy Project) | ||||||||
| Series A 5.00% 7/1/34 | 255,000 | 260,454 | ||||||
| Series A 5.00% 7/1/44 | 775,000 | 784,765 | ||||||
| Illinois Finance Authority Revenue | ||||||||
| (CHF - Chicago, L.L.C. - | ||||||||
| University Of Illinois at | ||||||||
| Chicago Project) | ||||||||
| Series A 5.00% 2/15/50 | 460,000 | 489,983 | ||||||
| (Chicago International Charter | ||||||||
| School Project) | ||||||||
| 5.00% 12/1/47 | 535,000 | 574,140 | ||||||
| Louisiana Public Facilities | ||||||||
| Authority Revenue | ||||||||
| (Provident Group-Flagship | ||||||||
| Properties) | ||||||||
| Series A 5.00% 7/1/56 | 500,000 | 531,730 | ||||||
| Massachusetts Development | ||||||||
| Finance Agency | ||||||||
| (Umass Boston Student | ||||||||
| Housing Project) | ||||||||
| 5.00% 10/1/48 | 285,000 | 305,315 | ||||||
| Minneapolis Charter School Lease | ||||||||
| Revenue | ||||||||
| (Hiawatha Academies Project) | ||||||||
| Series A 5.00% 7/1/36 | 750,000 | 776,280 | ||||||
| Series A 5.00% 7/1/47 | 900,000 | 922,725 | ||||||
| Minneapolis Student Housing | ||||||||
| Revenue | ||||||||
| (Riverton Community Housing | ||||||||
| Project) | ||||||||
| 5.25% 8/1/39 | 205,000 | 211,312 | ||||||
| 5.50% 8/1/49 | 990,000 | 1,020,819 | ||||||
| Minnesota Higher Education | ||||||||
| Facilities Authority Revenue | ||||||||
| (Carleton College) | ||||||||
| 4.00% 3/1/36 | 485,000 | 516,210 | ||||||
| 5.00% 3/1/44 | 905,000 | 1,016,939 | ||||||
| (College of St. Benedict) | ||||||||
| 4.00% 3/1/36 | 410,000 | 426,962 | ||||||
| (Gustavus Adolphus College) | ||||||||
| 5.00% 10/1/47 | 2,600,000 | 2,879,526 | ||||||
| (Macalester College) | ||||||||
| 4.00% 3/1/42 | 900,000 | 958,887 | ||||||
| 4.00% 3/1/48 | 600,000 | 638,904 | ||||||
| (St. Catherine University) | ||||||||
| Series A 4.00% 10/1/38 | 920,000 | 961,529 | ||||||
| Series A 5.00% 10/1/45 | 785,000 | 865,957 | ||||||
| (St. Johns University) | ||||||||
| Series 8-I 5.00% 10/1/31 | 235,000 | 256,077 | ||||||
| Series 8-I 5.00% 10/1/34 | 35,000 | 38,086 | ||||||
| (St. Olaf College) | ||||||||
| Series 8-N 4.00% 10/1/35 | 590,000 | 624,090 | ||||||
| (Trustees Of The Hamline | ||||||||
| University Of Minnesota) | ||||||||
| Series B 5.00% 10/1/47 | 1,055,000 | 1,094,024 | ||||||
| (University of St. Thomas) | ||||||||
| 4.00% 10/1/44 | 645,000 | 673,928 | ||||||
| 5.00% 10/1/40 | 750,000 | 857,168 | ||||||
| Series A 4.00% 10/1/37 | 500,000 | 532,135 | ||||||
| Otsego Charter School | ||||||||
| (Kaleidoscope Charter School) | ||||||||
| Series A 5.00% 9/1/34 | 230,000 | 233,742 | ||||||
| Series A 5.00% 9/1/44 | 400,000 | 402,864 | ||||||
| Philadelphia, Pennsylvania | ||||||||
| Authority for Industrial | ||||||||
| Development | ||||||||
| (1st Philadelphia Preparatory | ||||||||
| College) | ||||||||
| Series A 7.25% 6/15/43 | 370,000 | 401,935 | ||||||
| Phoenix, Arizona Industrial | ||||||||
| Development Authority | ||||||||
| Revenue | ||||||||
| (Rowan University Project) | ||||||||
| 5.00% 6/1/42 | 1,000,000 | 1,004,870 | ||||||
| Pima County, Arizona Industrial | ||||||||
| Development Authority | ||||||||
| (Edkey Charter Schools | ||||||||
| Project) | ||||||||
| 144A 5.00% 7/1/49 # | 500,000 | 507,335 | ||||||
| St. Cloud Charter School Lease | ||||||||
| Revenue | ||||||||
| (Stride Academy Project) | ||||||||
| Series A 5.00% 4/1/46 | 375,000 | 300,938 | ||||||
10
| Principal | |||||||
| amount° | Value (US $) | ||||||
| Municipal Bonds (continued) | |||||||
| Education Revenue Bonds (continued) | |||||||
| St. Paul Housing & | |||||||
| Redevelopment Authority | |||||||
| Charter School Lease Revenue | |||||||
| (Academia Cesar Chavez | |||||||
| School Project) | |||||||
| Series A 5.25% 7/1/50 | 825,000 | $ | 829,076 | ||||
| (Great River School Project) | |||||||
| Series A 144A 4.75% 7/1/29 # | 100,000 | 103,444 | |||||
| Series A 144A 5.50% 7/1/38 # | 240,000 | 255,686 | |||||
| (Twin Cities Academy Project) | |||||||
| Series A 5.30% 7/1/45 | 630,000 | 659,503 | |||||
| University of California | |||||||
| Series AI 5.00% 5/15/32 | 1,000,000 | 1,036,000 | |||||
| University of Minnesota | |||||||
| Series A 5.00% 9/1/40 | 1,240,000 | 1,408,863 | |||||
| Series A 5.00% 9/1/42 | 2,000,000 | 2,269,620 | |||||
| Series A 5.00% 4/1/44 | 1,500,000 | 1,739,310 | |||||
| University of Texas System Board | |||||||
| of Regents | |||||||
| Series B 5.00% 8/15/49 | 1,000,000 | 1,295,260 | |||||
| University of Wyoming | |||||||
| Series C 4.00% 6/1/43 (AGM) | 460,000 | 499,132 | |||||
| 54,537,624 | |||||||
| Electric Revenue Bonds – 10.02% | |||||||
| Central Minnesota Municipal | |||||||
| Power Agency | |||||||
| (Brookings - Southeast Twin | |||||||
| Cities Transmission Project) | |||||||
| 3.00% 1/1/38 (AGM) | 300,000 | 299,109 | |||||
| Chaska Electric Revenue | |||||||
| Series A 5.00% 10/1/28 | 445,000 | 486,260 | |||||
| City of Fort Collins Electric Utility | |||||||
| Enterprise Revenue | |||||||
| Series A 5.00% 12/1/42 | 500,000 | 573,625 | |||||
| City of Loveland Colorado Electric | |||||||
| & Communications Enterprise | |||||||
| Revenue | |||||||
| Series A 5.00% 12/1/44 | 1,060,000 | 1,213,965 | |||||
| Long Island Power Authority, New | |||||||
| York Electric System Revenue | |||||||
| 5.00% 9/1/47 | 305,000 | 341,603 | |||||
| Series A 5.00% 9/1/44 | 250,000 | 265,355 | |||||
| Series B 5.00% 9/1/46 | 130,000 | 143,350 | |||||
| Minnesota Municipal Power | |||||||
| Agency Electric Revenue | |||||||
| 5.00% 10/1/25 | 500,000 | 536,965 | |||||
| 5.00% 10/1/26 | 500,000 | 536,210 | |||||
| 5.00% 10/1/27 | 320,000 | 343,011 | |||||
| 5.00% 10/1/47 | 1,755,000 | 1,921,743 | |||||
| Northern Municipal Power Agency | |||||||
| Series A 5.00% 1/1/26 | 100,000 | 102,404 | |||||
| Series A 5.00% 1/1/30 | 340,000 | 348,174 | |||||
| Philadelphia, Pennsylvania Gas | |||||||
| Works Revenue | |||||||
| (1998 General Ordinance | |||||||
| Fifteenth Series) | |||||||
| 5.00% 8/1/47 | 500,000 | 547,580 | |||||
| Puerto Rico Electric Power | |||||||
| Authority Revenue | |||||||
| Series A 5.05% 7/1/42 ‡ | 320,000 | 306,400 | |||||
| Series AAA 5.25% 7/1/25 ‡ | 180,000 | 173,250 | |||||
| Series CCC 5.25% 7/1/27 | 1,450,000 | 1,395,625 | |||||
| Series WW 5.00% 7/1/28 ‡ | 1,400,000 | 1,340,500 | |||||
| Series WW 5.25% 7/1/33 | 95,000 | 91,438 | |||||
| Series WW 5.50% 7/1/17 ‡ | 210,000 | 202,387 | |||||
| Series WW 5.50% 7/1/19 ‡ | 160,000 | 154,200 | |||||
| Series XX 4.75% 7/1/26 ‡ | 190,000 | 181,213 | |||||
| Series XX 5.25% 7/1/40 | 2,305,000 | 2,218,562 | |||||
| Series XX 5.75% 7/1/36 ‡ | 680,000 | 659,600 | |||||
| Series ZZ 4.75% 7/1/27 ‡ | 155,000 | 147,831 | |||||
| Series ZZ 5.00% 7/1/19 ‡ | 280,000 | 267,400 | |||||
| Series ZZ 5.25% 7/1/24 ‡ | 250,000 | 240,625 | |||||
| Rochester Electric Utility Revenue | |||||||
| Series A 5.00% 12/1/42 | 605,000 | 669,808 | |||||
| Series A 5.00% 12/1/47 | 985,000 | 1,082,328 | |||||
| Southern Minnesota Municipal | |||||||
| Power Agency Supply Revenue | |||||||
| Series A 5.00% 1/1/41 | 240,000 | 261,170 | |||||
| Series A 5.00% 1/1/47 | 1,650,000 | 1,851,465 | |||||
| St. Paul Housing & | |||||||
| Redevelopment Authority | |||||||
| Charter School Lease Revenue | |||||||
| Series A 4.00% 10/1/33 | 285,000 | 298,848 | |||||
| Series B 4.00% 10/1/37 | 800,000 | 834,344 | |||||
| Western Minnesota Municipal | |||||||
| Power Agency Supply Revenue | |||||||
| Series A 5.00% 1/1/25 | 3,000,000 | 3,076,170 | |||||
| Series A 5.00% 1/1/26 | 1,000,000 | 1,025,090 | |||||
| Series A 5.00% 1/1/49 | 3,860,000 | 4,389,360 | |||||
| 28,526,968 | |||||||
| Healthcare Revenue Bonds – 40.06% | |||||||
| Alabama Special Care Facilities | |||||||
| Financing Authority- | |||||||
| Birmingham Alabama | |||||||
| (Methodist Home for the Aging) | |||||||
| 6.00% 6/1/50 | 500,000 | 511,580 | |||||
11
Schedule of investments
Delaware Investments® National Municipal Income Fund
| Principal | |||||||
| amount° | Value (US $) | ||||||
| Municipal Bonds (continued) | |||||||
| Healthcare Revenue Bonds (continued) | |||||||
| Allegheny County Hospital, | |||||||
| Pennsylvania Development | |||||||
| Authority | |||||||
| (Allegheny Health Network | |||||||
| Obligated Group Issue) | |||||||
| Series A 4.00% 4/1/44 | 300,000 | $ | 313,509 | ||||
| Anoka Health Care Facilities | |||||||
| Revenue | |||||||
| 5.375% 11/1/34 | 610,000 | 629,404 | |||||
| Apple Valley Senior Housing | |||||||
| Revenue | |||||||
| (PHS Senior Housing, Inc. | |||||||
| Orchard Path Project) | |||||||
| 4.50% 9/1/53 | 1,160,000 | 1,165,951 | |||||
| 5.00% 9/1/58 | 1,605,000 | 1,611,404 | |||||
| Apple Valley Senior Living | |||||||
| Revenue | |||||||
| (Senior Living LLC Project) | |||||||
| Series B 5.00% 1/1/47 | 715,000 | 481,881 | |||||
| 4th Tier | |||||||
| Series D 7.00% 1/1/37 | 685,000 | 507,023 | |||||
| Series D 7.25% 1/1/52 | 1,035,000 | 712,743 | |||||
| Arizona Industrial Development | |||||||
| Authority Revenue | |||||||
| (Great Lakes Senior Living | |||||||
| Communities LLC Project) | |||||||
| Series B 5.00% 1/1/49 | 70,000 | 50,227 | |||||
| Series D-2 144A 7.75% 1/1/54 # | 50,000 | 35,132 | |||||
| (Phoenix Children's Hospital) | |||||||
| Series A 4.00% 2/1/50 | 755,000 | 782,580 | |||||
| Bethel Housing & Health Care | |||||||
| Facilities Revenue | |||||||
| (Benedictine Health System- | |||||||
| St. Peter Communities | |||||||
| Project) | |||||||
| Series A 5.50% 12/1/48 | 500,000 | 489,015 | |||||
| Brookhaven Development | |||||||
| Authority Revenue, Georgia | |||||||
| (Children's Healthcare of | |||||||
| Atlanta) | |||||||
| Series A 4.00% 7/1/49 | 30,000 | 31,610 | |||||
| California Health Facilities | |||||||
| Financing Authority | |||||||
| Series A 4.00% 4/1/49 | 1,000,000 | 1,018,200 | |||||
| California Health Facilities | |||||||
| Financing Authority Revenue | |||||||
| (Kaiser Permanente) | |||||||
| Series A-2 5.00% 11/1/47 | 1,030,000 | 1,305,937 | |||||
| Center City Health Care Facilities | |||||||
| Revenue | |||||||
| (Hazelden Betty Ford | |||||||
| Foundation Project) | |||||||
| 5.00% 11/1/27 | 500,000 | 532,780 | |||||
| City of Bethel | |||||||
| (The Lodge at Lakes at | |||||||
| Stillwater Project) | |||||||
| 5.25% 6/1/58 | 1,775,000 | 1,741,026 | |||||
| City of Center City, Minnesota | |||||||
| Healthcare Facilities Revenue | |||||||
| Refunding | |||||||
| (Hazelden Betty Ford | |||||||
| Foundation Project) | |||||||
| 4.00% 11/1/41 | 200,000 | 210,270 | |||||
| City of Crookston, Minnesota | |||||||
| Health Care Facilities Revenue | |||||||
| (Riverview Health Project) | |||||||
| 5.00% 5/1/51 | 1,390,000 | 1,354,597 | |||||
| Colorado Health Facilities | |||||||
| Authority Revenue | |||||||
| (Aberdeen Ridge) | |||||||
| Series A 5.00% 5/15/49 | 500,000 | 478,520 | |||||
| (AdventHealth Obligated | |||||||
| Group) | |||||||
| Series A 3.00% 11/15/51 | 500,000 | 441,875 | |||||
| Series A 4.00% 11/15/43 | 1,000,000 | 1,058,250 | |||||
| (Adventist Health System/ | |||||||
| Sunbelt Obligated Group) | |||||||
| Series A 5.00% 11/15/48 | 1,000,000 | 1,122,540 | |||||
| (Bethesda Project) | |||||||
| Series A-1 5.00% 9/15/48 | 750,000 | 798,368 | |||||
| (Boulder Community Health | |||||||
| Project) | |||||||
| 4.00% 10/1/38 | 250,000 | 267,385 | |||||
| 4.00% 10/1/39 | 250,000 | 266,965 | |||||
| 4.00% 10/1/40 | 280,000 | 298,323 | |||||
| (Cappella of Grand Junction | |||||||
| Project) | |||||||
| 144A 5.00% 12/1/54 # | 695,000 | 586,365 | |||||
| (CommonSpirit Health) | |||||||
| Series A-1 4.00% 8/1/39 | 550,000 | 577,209 | |||||
| Series A-2 4.00% 8/1/49 | 2,500,000 | 2,594,075 | |||||
| Series A-2 5.00% 8/1/39 | 1,500,000 | 1,698,495 | |||||
| Series A-2 5.00% 8/1/44 | 1,500,000 | 1,681,365 | |||||
| (Covenant Living Communities | |||||||
| and Services) | |||||||
| Series A 4.00% 12/1/40 | 750,000 | 809,355 | |||||
12
| Principal | ||||||||
| amount° | Value (US $) | |||||||
| Municipal Bonds (continued) | ||||||||
| Healthcare Revenue Bonds (continued) | ||||||||
| Colorado Health Facilities | ||||||||
| Authority Revenue | ||||||||
| (Covenant Retirement | ||||||||
| Communities Inc.) | ||||||||
| 5.00% 12/1/35 | 1,000,000 | $ | 1,069,090 | |||||
| (Healthcare Facilities - | ||||||||
| American Baptist) | ||||||||
| 8.00% 8/1/43 | 830,000 | 861,523 | ||||||
| (Mental Health Center of | ||||||||
| Denver Project) | ||||||||
| Series A 5.75% 2/1/44 | 1,500,000 | 1,559,880 | ||||||
| (National Jewish Health | ||||||||
| Project) | ||||||||
| 5.00% 1/1/27 | 500,000 | 501,015 | ||||||
| (Sanford Health) | ||||||||
| Series A 5.00% 11/1/44 | 2,000,000 | 2,249,180 | ||||||
| (SCL Health System) | ||||||||
| Series A 4.00% 1/1/37 | 575,000 | 613,962 | ||||||
| Series A 4.00% 1/1/38 | 1,950,000 | 2,076,301 | ||||||
| Series A 4.00% 1/1/39 | 465,000 | 494,397 | ||||||
| (Sunny Vista Living Center) | ||||||||
| Series A 144A 6.25% | ||||||||
| 12/1/50 # | 505,000 | 442,355 | ||||||
| (Vail Valley Medical Center | ||||||||
| Project) | ||||||||
| 5.00% 1/15/35 | 1,250,000 | 1,356,125 | ||||||
| Cuyahoga County, Ohio Hospital | ||||||||
| Revenue | ||||||||
| (The Metrohealth System) | ||||||||
| 5.50% 2/15/57 | 1,000,000 | 1,110,520 | ||||||
| Dakota County Community | ||||||||
| Development Agency Senior | ||||||||
| Housing Revenue | ||||||||
| (Walker Highview Hills Project) | ||||||||
| Series A 144A 5.00% 8/1/46 # | 370,000 | 371,121 | ||||||
| Series A 144A 5.00% 8/1/51 # | 755,000 | 757,159 | ||||||
| Deephaven Housing & Healthcare | ||||||||
| Revenue | ||||||||
| (St. Therese Senior Living | ||||||||
| Project) | ||||||||
| Series A 5.00% 4/1/38 | 280,000 | 270,721 | ||||||
| Series A 5.00% 4/1/40 | 270,000 | 257,963 | ||||||
| Denver Health & Hospital | ||||||||
| Authority Health Care Revenue | ||||||||
| Series A 4.00% 12/1/40 | 500,000 | 525,335 | ||||||
| Duluth Economic Development | ||||||||
| Authority | ||||||||
| (Essentia Health Obligated | ||||||||
| Group) | ||||||||
| Series A 5.00% 2/15/48 | 810,000 | 903,199 | ||||||
| (St. Luke’s Hospital of Duluth | ||||||||
| Obligated Group) | ||||||||
| Unrefunded Balance 6.00% | ||||||||
| 6/15/39 | 980,000 | 989,427 | ||||||
| Escambia County Health Facilities | ||||||||
| Authority Revenue | ||||||||
| (Healthcare Facilities - Baptist) | ||||||||
| Series A 4.00% 8/15/50 | 1,540,000 | 1,565,687 | ||||||
| Glendale, Arizona Industrial | ||||||||
| Development Authority | ||||||||
| (Royal Oaks - Inspirata Pointe | ||||||||
| Project) | ||||||||
| Series A 5.00% 5/15/56 | 500,000 | 531,940 | ||||||
| Hamilton County, Ohio Hospital | ||||||||
| Revenue | ||||||||
| (Cincinnati Children's Hospital | ||||||||
| Medical Center Project) | ||||||||
| Series CC 5.00% 11/15/49 | 345,000 | 442,297 | ||||||
| Hayward | ||||||||
| (American Baptist Homes | ||||||||
| Midwest) | ||||||||
| 5.75% 2/1/44 | 500,000 | 459,805 | ||||||
| Hayward Health Care Facilities | ||||||||
| Revenue | ||||||||
| (St. John's Lutheran Home of | ||||||||
| Albert Lea) | ||||||||
| 5.375% 10/1/44 | 260,000 | 237,687 | ||||||
| Housing & Redevelopment | ||||||||
| Authority of The City of St Paul | ||||||||
| Minnesota | ||||||||
| Series A 5.00% 12/1/30 | 300,000 | 342,981 | ||||||
| Illinois Finance Authority Revenue | ||||||||
| (NorthShore - Edward-Elmhurst | ||||||||
| Health Credit Group) | ||||||||
| Series A 5.00% 8/15/47 | 3,355,000 | 3,882,775 | ||||||
| Kalispell, Montana | ||||||||
| (Immanuel Lutheran | ||||||||
| Corporation Project) | ||||||||
| Series A 5.25% 5/15/37 | 700,000 | 731,507 | ||||||
13
Schedule of investments
Delaware Investments® National Municipal Income Fund
| Principal | |||||||
| amount° | Value (US $) | ||||||
| Municipal Bonds (continued) | |||||||
| Healthcare Revenue Bonds (continued) | |||||||
| Lancaster County Hospital | |||||||
| Authority | |||||||
| (Penn State Health) | |||||||
| 5.00% 11/1/51 | 2,345,000 | $ | 2,628,628 | ||||
| Maple Grove Health Care | |||||||
| Facilities Revenue | |||||||
| (Maple Grove Hospital | |||||||
| Corporation) | |||||||
| 4.00% 5/1/37 | 1,000,000 | 1,058,240 | |||||
| (North Memorial Health Care) | |||||||
| 5.00% 9/1/30 | 865,000 | 935,420 | |||||
| Maple Plain Senior Housing & | |||||||
| Health Care Revenue | |||||||
| (Haven Homes Project) | |||||||
| 5.00% 7/1/54 | 1,500,000 | 1,506,045 | |||||
| Maryland Health & Higher | |||||||
| Educational Facilities Authority | |||||||
| (University of Maryland Medical | |||||||
| System Issue) | |||||||
| Series D 4.00% 7/1/48 | 255,000 | 267,737 | |||||
| Miami-Dade County, Florida | |||||||
| Health Facilities Authority | |||||||
| Revenue | |||||||
| (Nicklaus Children's Hospital | |||||||
| Project) | |||||||
| 5.00% 8/1/47 | 200,000 | 221,520 | |||||
| Michigan Finance Authority | |||||||
| Revenue | |||||||
| (Beaumont Health Credit | |||||||
| Group) | |||||||
| 5.00% 11/1/44 | 1,000,000 | 1,083,970 | |||||
| Minneapolis Health Care System | |||||||
| Revenue | |||||||
| (Fairview Health Services) | |||||||
| Series A 4.00% 11/15/48 | 2,855,000 | 2,914,098 | |||||
| Series A 5.00% 11/15/33 | 500,000 | 543,110 | |||||
| Series A 5.00% 11/15/34 | 500,000 | 543,110 | |||||
| Series A 5.00% 11/15/49 | 2,000,000 | 2,254,340 | |||||
| Minneapolis Senior Housing & | |||||||
| Healthcare Revenue | |||||||
| (Ecumen Mill City Quarter) | |||||||
| 5.25% 11/1/45 | 850,000 | 850,221 | |||||
| 5.375% 11/1/50 | 200,000 | 200,166 | |||||
| (Ecumen-Abiitan Mill City | |||||||
| Project) | |||||||
| 5.00% 11/1/35 | 220,000 | 219,776 | |||||
| Minneapolis – St. Paul Housing & | |||||||
| Redevelopment Authority | |||||||
| Health Care Revenue | |||||||
| (Allina Health System) | |||||||
| Series A 5.00% 11/15/29 | 585,000 | 661,910 | |||||
| Monroe County, New York | |||||||
| Industrial Development | |||||||
| Revenue | |||||||
| (Rochester Regional Health | |||||||
| Project) | |||||||
| Series A 4.00% 12/1/46 | 440,000 | 453,218 | |||||
| Montgomery County Higher | |||||||
| Education and Health Authority | |||||||
| (Thomas Jefferson University) | |||||||
| Series A 4.00% 9/1/49 | 750,000 | 770,715 | |||||
| Series B 4.00% 5/1/56 | 1,000,000 | 1,017,620 | |||||
| Moon, Pennsylvania Industrial | |||||||
| Development Authority | |||||||
| (Baptist Homes Society | |||||||
| Obligation) | |||||||
| 6.125% 7/1/50 | 750,000 | 776,025 | |||||
| New Hope, Texas Cultural | |||||||
| Education Facilities | |||||||
| (Cardinal Bay Inc.) | |||||||
| Series A1 5.00% 7/1/51 ‡ | 135,000 | 102,600 | |||||
| Series B 4.75% 7/1/51 | 160,000 | 88,000 | |||||
| New Jersey Health Care Facilities | |||||||
| Financing Authority Revenue | |||||||
| (St. Peters University Hospital) | |||||||
| 6.25% 7/1/35 | 300,000 | 300,678 | |||||
| (Valley Health System | |||||||
| Obligated) | |||||||
| 4.00% 7/1/44 | 475,000 | 509,570 | |||||
| New York State Dormitory | |||||||
| Authority | |||||||
| Series A 4.00% 7/1/53 | 355,000 | 367,400 | |||||
| (Orange Regional Medical | |||||||
| Center) | |||||||
| 144A 5.00% 12/1/35 # | 500,000 | 557,520 | |||||
| (Personal Income Tax) | |||||||
| 4.00% 3/15/48 | 4,000,000 | 4,182,340 | |||||
| Oregon State Facilities Authority | |||||||
| Revenue | |||||||
| (Peacehealth Project) | |||||||
| Series A 5.00% 11/15/29 | 500,000 | 529,905 | |||||
| Palomar Health, California | |||||||
| 5.00% 11/1/39 | 130,000 | 142,401 | |||||
14
| Principal | ||||||||
| amount° | Value (US $) | |||||||
| Municipal Bonds (continued) | ||||||||
| Healthcare Revenue Bonds (continued) | ||||||||
| Pennsylvania Higher Educational | ||||||||
| Facilities Authority Revenue | ||||||||
| (University of Pennsylvania | ||||||||
| Health System) | ||||||||
| Series A 4.00% 8/15/43 | 1,905,000 | $ | 2,025,244 | |||||
| Rochester Health Care & Housing | ||||||||
| Revenue | ||||||||
| (The Homestead at Rochester | ||||||||
| Project) | ||||||||
| Series A 6.875% 12/1/48 | 1,220,000 | 1,260,175 | ||||||
| Rochester Health Care Facilities | ||||||||
| Revenue | ||||||||
| (Mayo Clinic) | ||||||||
| 4.00% 11/15/41 | 4,860,000 | 4,874,871 | ||||||
| 5.00% 11/15/57 | 2,175,000 | 2,537,551 | ||||||
| Sartell Health Care Facilities | ||||||||
| Revenue | ||||||||
| (Country Manor Campus | ||||||||
| Project) | ||||||||
| Series A 5.25% 9/1/30 | 1,000,000 | 1,001,660 | ||||||
| Series A 5.30% 9/1/37 | 600,000 | 601,500 | ||||||
| Shakopee Health Care Facilities | ||||||||
| Revenue | ||||||||
| (St. Francis Regional Medical | ||||||||
| Center) | ||||||||
| 4.00% 9/1/31 | 205,000 | 213,020 | ||||||
| 5.00% 9/1/34 | 165,000 | 175,441 | ||||||
| St. Cloud Health Care Revenue | ||||||||
| (Centracare Health System | ||||||||
| Project) | ||||||||
| 4.00% 5/1/49 | 1,585,000 | 1,673,475 | ||||||
| 5.00% 5/1/48 | 3,150,000 | 3,569,359 | ||||||
| Series A 4.00% 5/1/37 | 1,295,000 | 1,366,614 | ||||||
| Series A 5.00% 5/1/46 | 4,800,000 | 5,247,120 | ||||||
| Series B 5.00% 5/1/24 | 1,400,000 | 1,482,026 | ||||||
| St. Paul Housing & | ||||||||
| Redevelopment Authority | ||||||||
| Health Care Facilities Revenue | ||||||||
| (Fairview Health Services) | ||||||||
| Series A 4.00% 11/15/43 | 905,000 | 930,476 | ||||||
| Series A 5.00% 11/15/47 | 680,000 | 755,976 | ||||||
| (Health Partners Obligation | ||||||||
| Group Project) | ||||||||
| Series A 5.00% 7/1/29 | 2,000,000 | 2,165,960 | ||||||
| Series A 5.00% 7/1/32 | 1,100,000 | 1,189,122 | ||||||
| St. Paul Housing & | ||||||||
| Redevelopment Authority | ||||||||
| Housing & Health Care | ||||||||
| Facilities Revenue | ||||||||
| Series A 5.00% 12/1/36 | 750,000 | 838,717 | ||||||
| (Senior Episcopal Homes | ||||||||
| Project) | ||||||||
| 5.125% 5/1/48 | 1,200,000 | 1,206,240 | ||||||
| Tarrant County, Texas Cultural | ||||||||
| Education Facilities Finance | ||||||||
| (Buckner Senior Living - | ||||||||
| Ventana Project) | ||||||||
| Series A 6.75% 11/15/47 | 250,000 | 266,725 | ||||||
| University of North Carolina Board | ||||||||
| of Governors | ||||||||
| 5.00% 2/1/49 | 500,000 | 620,310 | ||||||
| Washington Health Care Facilities | ||||||||
| Authority Revenue | ||||||||
| (CommonSpirit Health) | ||||||||
| Series A-2 5.00% 8/1/38 | 250,000 | 283,465 | ||||||
| Westminster, Maryland | ||||||||
| (Lutheran Village Millers Grant) | ||||||||
| Series A 6.00% 7/1/34 | 500,000 | 526,360 | ||||||
| Wisconsin Health & Educational | ||||||||
| Facilities Authority | ||||||||
| (Covenant Communities, Inc. | ||||||||
| Project) | ||||||||
| Series B 5.00% 7/1/53 | 1,000,000 | 786,080 | ||||||
| Woodbury Housing & | ||||||||
| Redevelopment Authority | ||||||||
| Revenue | ||||||||
| (St. Therese of Woodbury) | ||||||||
| 5.125% 12/1/44 | 1,250,000 | 1,255,912 | ||||||
| Yavapai County, Arizona Industrial | ||||||||
| Development Authority | ||||||||
| Revenue | ||||||||
| (Yavapai Regional Medical | ||||||||
| Center) | ||||||||
| Series A 5.00% 8/1/28 | 720,000 | 749,657 | ||||||
| 114,057,250 | ||||||||
| Housing Revenue Bonds – 0.72% | ||||||||
| Minnesota Housing Finance | ||||||||
| Agency | ||||||||
| (Non Ace - State Appropriated | ||||||||
| Housing) | ||||||||
| Series C 5.00% 8/1/33 | 1,390,000 | 1,475,902 | ||||||
15
Schedule of investments
Delaware Investments® National Municipal Income Fund
| Principal | ||||||||
| amount° | Value (US $) | |||||||
| Municipal Bonds (continued) | ||||||||
| Housing Revenue Bonds (continued) | ||||||||
| Northwest Multi-County Housing & | ||||||||
| Redevelopment Authority | ||||||||
| (Pooled Housing Program) | ||||||||
| 5.50% 7/1/45 | 560,000 | $ | 563,298 | |||||
| 2,039,200 | ||||||||
| Lease Revenue Bonds – 7.83% | ||||||||
| Denver Health & Hospital | ||||||||
| Authority | ||||||||
| (550 ACOMA, Inc.) | ||||||||
| 4.00% 12/1/38 | 500,000 | 525,220 | ||||||
| Metropolitan Pier & | ||||||||
| Exposition Authority Illinois | ||||||||
| Revenue | ||||||||
| (McCormick Place Expansion) | ||||||||
| 4.00% 6/15/50 | 1,375,000 | 1,367,066 | ||||||
| 5.00% 6/15/50 | 290,000 | 309,433 | ||||||
| Series B 2.855% 12/15/54 (BAM) ^ | 990,000 | 243,362 | ||||||
| Minnesota State General Fund | ||||||||
| Revenue Appropriations | ||||||||
| Series A 5.00% 6/1/32 | 780,000 | 807,620 | ||||||
| Series A 5.00% 6/1/38 | 5,500,000 | 5,692,170 | ||||||
| Series A 5.00% 6/1/43 | 1,750,000 | 1,808,905 | ||||||
| Minnesota State Housing Finance | ||||||||
| Agency | ||||||||
| (Non Ace - State Appropriated | ||||||||
| Housing) | ||||||||
| Series C 5.00% 8/1/36 | 1,000,000 | 1,060,400 | ||||||
| New Jersey Economic | ||||||||
| Development Authority | ||||||||
| (Transit Transportation Project) | ||||||||
| Series A 4.00% 11/1/44 | 400,000 | 408,984 | ||||||
| New Jersey State Transportation | ||||||||
| Trust Fund Authority | ||||||||
| (Capital Appreciation) | ||||||||
| Series A 3.114% | ||||||||
| 12/15/39 (BAM) ^ | 5,290,000 | 2,776,721 | ||||||
| (Transportation Program) | ||||||||
| Series B 4.00% 6/15/50 | 1,000,000 | 1,010,650 | ||||||
| New York Liberty Development | ||||||||
| Revenue | ||||||||
| (4 World Trade Center Project) | ||||||||
| Series A 3.00% 11/15/51 | 3,640,000 | 3,149,328 | ||||||
| State of Colorado Department of | ||||||||
| Transportation | ||||||||
| Certificates of Participation | ||||||||
| 5.00% 6/15/34 | 340,000 | 374,184 | ||||||
| 5.00% 6/15/36 | 545,000 | 597,968 | ||||||
| Virginia Commonwealth | ||||||||
| Transportation Board | ||||||||
| (U.S. Route 58 Corridor | ||||||||
| Development Program) | ||||||||
| 4.00% 5/15/47 | 2,000,000 | 2,155,140 | ||||||
| 22,287,151 | ||||||||
| Local General Obligation Bonds – 10.98% | ||||||||
| Adams & Weld Counties School | ||||||||
| District No 27J Brighton | ||||||||
| 4.00% 12/1/30 | 700,000 | 747,579 | ||||||
| Arapahoe County School District | ||||||||
| No. 6 Littleton | ||||||||
| Series A 5.50% 12/1/38 | 650,000 | 778,876 | ||||||
| Beacon Point Metropolitan District | ||||||||
| 5.00% 12/1/30 (AGM) | 600,000 | 659,370 | ||||||
| Boulder Valley School District No | ||||||||
| RE-2 Boulder | ||||||||
| Series A 4.00% 12/1/48 | 500,000 | 543,585 | ||||||
| Brainerd Independent School | ||||||||
| District No. 181 | ||||||||
| (General Obligation School | ||||||||
| Building Bonds) | ||||||||
| Series A 4.00% 2/1/38 | 1,500,000 | 1,597,110 | ||||||
| Series A 4.00% 2/1/43 | 1,500,000 | 1,586,625 | ||||||
| Chicago Board of Education, | ||||||||
| Illinois | ||||||||
| 5.00% 4/1/42 | 205,000 | 218,870 | ||||||
| 5.00% 4/1/46 | 210,000 | 223,526 | ||||||
| Chicago, Illinois | ||||||||
| Series A 5.50% 1/1/34 | 225,000 | 241,090 | ||||||
| Series C 5.00% 1/1/38 | 500,000 | 532,625 | ||||||
| Duluth Independent School | ||||||||
| District No. 709 | ||||||||
| Series A 4.00% 2/1/27 | 600,000 | 639,924 | ||||||
| Duluth, Minnesota | ||||||||
| (Improvement DECC) | ||||||||
| Series A 5.00% 2/1/34 | 545,000 | 600,530 | ||||||
| Edina Independent School District | ||||||||
| No. 273 | ||||||||
| Series A 5.00% 2/1/27 | 1,500,000 | 1,626,525 | ||||||
| Grand River Hospital District | ||||||||
| 5.25% 12/1/37 (AGM) | 675,000 | 766,814 | ||||||
| Hennepin County | ||||||||
| Series A 5.00% 12/1/36 | 300,000 | 337,896 | ||||||
| Series A 5.00% 12/1/37 | 1,240,000 | 1,421,487 | ||||||
| Series A 5.00% 12/1/41 | 1,060,000 | 1,189,394 | ||||||
16
| Principal | |||||||
| amount° | Value (US $) | ||||||
| Municipal Bonds (continued) | |||||||
| Local General Obligation Bonds (continued) | |||||||
| Jefferson County School District | |||||||
| No. R-1 | |||||||
| 5.25% 12/15/24 | 750,000 | $ | 816,375 | ||||
| Mahtomedi Independent School | |||||||
| District No. 832 | |||||||
| (School Building) | |||||||
| Series A 5.00% 2/1/28 | 515,000 | 557,554 | |||||
| Mesa County Valley School | |||||||
| District No. 51 Grand Junction | |||||||
| 4.00% 12/1/41 | 1,000,000 | 1,102,150 | |||||
| Minneapolis Special School | |||||||
| District No. 1 | |||||||
| Series A 4.00% 2/1/36 | 190,000 | 208,103 | |||||
| Series A 4.00% 2/1/37 | 250,000 | 273,195 | |||||
| Series A 4.00% 2/1/38 | 260,000 | 283,408 | |||||
| Series B 4.00% 2/1/36 | 400,000 | 438,112 | |||||
| Series B 4.00% 2/1/37 | 530,000 | 579,173 | |||||
| Series B 4.00% 2/1/38 | 550,000 | 599,517 | |||||
| Mounds View Independent School | |||||||
| District No. 621 | |||||||
| (School Building) | |||||||
| Series A 4.00% 2/1/43 | 2,000,000 | 2,109,000 | |||||
| New York City, New York | |||||||
| Series C 5.00% 8/1/43 | 500,000 | 573,020 | |||||
| St. Michael-Albertville | |||||||
| Independent School District No. | |||||||
| 885 | |||||||
| (School Building) | |||||||
| Series A 5.00% 2/1/27 | 1,300,000 | 1,446,601 | |||||
| St. Paul Independent School | |||||||
| District No. 625 | |||||||
| (School Building) | |||||||
| Series B 5.00% 2/1/26 | 1,000,000 | 1,028,350 | |||||
| Verve Metropolitan District No 1 | |||||||
| 5.00% 12/1/51 | 1,000,000 | 1,009,270 | |||||
| Weld County School District No. | |||||||
| RE-1 | |||||||
| 5.00% 12/15/30 (AGM) | 500,000 | 559,340 | |||||
| Weld County School District No. | |||||||
| RE-2 Eaton | |||||||
| Series 2 5.00% 12/1/44 | 1,250,000 | 1,469,512 | |||||
| Weld County School District No. | |||||||
| RE-3J | |||||||
| 5.00% 12/15/34 (BAM) | 1,000,000 | 1,115,850 | |||||
| Weld County School District No. | |||||||
| RE-8 | |||||||
| 5.00% 12/1/31 | 510,000 | 573,459 | |||||
| 5.00% 12/1/32 | 340,000 | 381,987 | |||||
| White Bear Lake Independent | |||||||
| School District No. 624 | |||||||
| Series A 3.00% 2/1/43 | 2,595,000 | 2,433,591 | |||||
| 31,269,393 | |||||||
| Pre-Refunded/Escrowed to Maturity Bonds – 9.33% | |||||||
| Colorado Educational & Cultural | |||||||
| Facilities Authority Revenue | |||||||
| (Johnson & Wales University) | |||||||
| Series A 5.25% 4/1/37-23 § | 900,000 | 930,213 | |||||
| Colorado Health Facilities | |||||||
| Authority Revenue | |||||||
| (Covenant Retirement | |||||||
| Communities Inc.) | |||||||
| Series A 5.75% | |||||||
| 12/1/36-23 § | 1,000,000 | 1,064,980 | |||||
| (Evangelical Lutheran Good | |||||||
| Samaritan Society) | |||||||
| 5.00% 6/1/28-23 § | 1,250,000 | 1,296,750 | |||||
| 5.50% 6/1/33-23 § | 2,000,000 | 2,086,220 | |||||
| 5.625% 6/1/43-23 § | 1,000,000 | 1,044,540 | |||||
| (Frasier Meadows Retirement | |||||||
| Community Project) | |||||||
| Series B 5.00% 5/15/48 | 340,000 | 351,937 | |||||
| Colorado School of Mines | |||||||
| Series B 5.00% 12/1/42-22 § | 1,115,000 | 1,141,258 | |||||
| Commerce City | |||||||
| 5.00% 8/1/44-24 (AGM) § | 1,000,000 | 1,055,970 | |||||
| Deephaven Charter School | |||||||
| (Eagle Ridge Academy Project) | |||||||
| Series A 5.50% 7/1/43-23 § | 500,000 | 522,950 | |||||
| Denver City & County Airport | |||||||
| System Revenue | |||||||
| Series B 5.00% 11/15/37-22 § | 1,700,000 | 1,738,624 | |||||
| Duluth Economic Development | |||||||
| Authority | |||||||
| (St. Luke’s Hospital of Duluth | |||||||
| Obligated Group) | |||||||
| 6.00% 6/15/39-22 | 20,000 | 20,192 | |||||
| East Hempfield Township, | |||||||
| Pennsylvania Industrial | |||||||
| Development Authority | |||||||
| (Student Services Income - | |||||||
| Student Housing Project) | |||||||
| 5.00% 7/1/35-23 § | 1,000,000 | 1,040,410 | |||||
| Eaton Area Park & Recreation | |||||||
| District | |||||||
| 5.25% 12/1/34-22 § | 190,000 | 194,849 | |||||
| JEA Electric System Revenue, | |||||||
| Florida | |||||||
| Series A 5.00% 10/1/33-23 § | 645,000 | 675,618 | |||||
17
Schedule of investments
Delaware Investments® National Municipal Income Fund
| Principal | |||||||
| amount° | Value (US $) | ||||||
| Municipal Bonds (continued) | |||||||
| Pre-Refunded/Escrowed to Maturity Bonds (continued) | |||||||
| Minnesota Higher Education | |||||||
| Facilities Authority Revenue | |||||||
| (St. Catherine University) | |||||||
| Series 7-Q 5.00% | |||||||
| 10/1/32-22 § | 700,000 | $ | 712,971 | ||||
| New Hope, Texas Cultural | |||||||
| Education Facilities | |||||||
| (Chief-Collegiate Housing- | |||||||
| Tarleton St.) | |||||||
| Series A 5.00% 4/1/34-24 § | 1,000,000 | 1,059,220 | |||||
| New Jersey Economic | |||||||
| Development Authority | |||||||
| Series WW 5.25% | |||||||
| 6/15/30-25 § | 1,000,000 | 1,099,040 | |||||
| New Jersey Economic | |||||||
| Development Authority | |||||||
| Revenue | |||||||
| (Cigarette Tax) | |||||||
| 5.00% 6/15/28-22 § | 200,000 | 201,596 | |||||
| 5.00% 6/15/29-22 § | 800,000 | 806,384 | |||||
| Palm Beach County Health | |||||||
| Facilities Authority, Florida | |||||||
| (Sinai Residences Boca Raton | |||||||
| Project) | |||||||
| Series A 7.50% 6/1/49 | 105,000 | 108,150 | |||||
| Philadelphia, Pennsylvania Water | |||||||
| & Wastewater Revenue | |||||||
| Series A 5.00% 7/1/45-24 § | 500,000 | 533,620 | |||||
| Rice County Educational Facilities | |||||||
| Revenue | |||||||
| (Shattuck-St. Mary's School) | |||||||
| Series A 144A 5.00% | |||||||
| 8/1/22 # | 900,000 | 911,601 | |||||
| Rochester Electric Utility Revenue | |||||||
| Series B 5.00% 12/1/30-23 § | 1,300,000 | 1,368,614 | |||||
| Series B 5.00% 12/1/43-23 § | 1,000,000 | 1,052,780 | |||||
| St. Paul Housing & | |||||||
| Redevelopment Authority | |||||||
| Hospital Facility | |||||||
| (Healtheast Care System | |||||||
| Project) | |||||||
| Series A 5.00% 11/15/29-25 § | 395,000 | 435,409 | |||||
| Series A 5.00% 11/15/30-25 § | 290,000 | 319,667 | |||||
| Tallyn's Reach Metropolitan | |||||||
| District No. 3 | |||||||
| (Limited Tax Convertible) | |||||||
| 5.125% 11/1/38-23 § | 295,000 | 309,187 | |||||
| Western Minnesota Municipal | |||||||
| Power Agency Supply Revenue | |||||||
| Series A 5.00% 1/1/33-24 § | 1,000,000 | 1,054,820 | |||||
| Series A 5.00% 1/1/40-24 § | 750,000 | 791,115 | |||||
| Series A 5.00% 1/1/46-24 § | 2,500,000 | 2,637,050 | |||||
| 26,565,735 | |||||||
| Special Tax Revenue Bonds – 15.47% | |||||||
| Central Platte Valley Metropolitan | |||||||
| District | |||||||
| 5.00% 12/1/43 | 375,000 | 381,758 | |||||
| Fountain Urban Renewal Authority | |||||||
| Tax Increment Revenue | |||||||
| (Academy Highlands Project) | |||||||
| Series A 5.50% 11/1/44 | 655,000 | 659,821 | |||||
| GDB Debt Recovery Authority of | |||||||
| Puerto Rico | |||||||
| 7.50% 8/20/40 | 4,542,695 | 4,270,133 | |||||
| Lincoln Park Metropolitan District | |||||||
| 5.00% 12/1/46 (AGM) | 500,000 | 552,870 | |||||
| Massachusetts Bay Transportation | |||||||
| Authority Senior | |||||||
| Series A 5.25% 7/1/29 | 200,000 | 239,862 | |||||
| Miami-Dade County | |||||||
| (Capital Appreciation) | |||||||
| 0.00% 10/1/37 (BAM) ^ | 3,000,000 | 1,723,050 | |||||
| Minneapolis Revenue | |||||||
| (YMCA Greater Twin Cities | |||||||
| Project) | |||||||
| 4.00% 6/1/29 | 165,000 | 168,411 | |||||
| Northampton County, | |||||||
| Pennsylvania Industrial | |||||||
| Development Authority | |||||||
| Revenue | |||||||
| (Route 33 Project) | |||||||
| 7.00% 7/1/32 | 205,000 | 213,196 | |||||
| Prairie Center Metropolitan District | |||||||
| No. 3 | |||||||
| Series A 144A 5.00% | |||||||
| 12/15/41 # | 500,000 | 510,570 | |||||
| Public Finance Authority, | |||||||
| Wisconsin Airport Facilities | |||||||
| Revenue | |||||||
| (American Dream @ | |||||||
| Meadowlands Project) | |||||||
| 144A 7.00% 12/1/50 # | 380,000 | 385,069 | |||||
18
| Principal | |||||||
| amount° | Value (US $) | ||||||
| Municipal Bonds (continued) | |||||||
| Special Tax Revenue Bonds (continued) | |||||||
| Puerto Rico Sales Tax Financing | |||||||
| Revenue | |||||||
| (Restructured) | |||||||
| Series A-1 4.55% 7/1/40 | 2,250,000 | $ | 2,362,320 | ||||
| Series A-1 4.558% 7/1/46 ^ | 14,315,000 | 4,392,414 | |||||
| Series A-1 4.75% 7/1/53 | 6,460,000 | 6,793,788 | |||||
| Series A-1 4.906% 7/1/51 ^ | 34,247,000 | 7,624,410 | |||||
| Series A-1 5.00% 7/1/58 | 7,272,000 | 7,749,698 | |||||
| Series A-2 4.329% 7/1/40 | 595,000 | 616,997 | |||||
| Series A-2 4.784% 7/1/58 | 1,100,000 | 1,159,202 | |||||
| Regional Transportation District | |||||||
| Sales Tax Revenue | |||||||
| (FasTracks Project) | |||||||
| Series A 5.00% 11/1/30 | 330,000 | 371,197 | |||||
| Series A 5.00% 11/1/31 | 755,000 | 847,850 | |||||
| Sales Tax Securitization, Illinois | |||||||
| Series A 5.00% 1/1/40 | 500,000 | 554,955 | |||||
| Southlands Metropolitan District | |||||||
| No. 1 | |||||||
| Series A-1 5.00% 12/1/37 | 200,000 | 210,040 | |||||
| Series A-1 5.00% 12/1/47 | 300,000 | 311,040 | |||||
| St. Paul Sales Tax Revenue | |||||||
| Series G 5.00% 11/1/30 | 935,000 | 998,935 | |||||
| Thornton Development Authority | |||||||
| (East 144th Avenue & I- | |||||||
| 25 Project) | |||||||
| Series B 5.00% 12/1/35 | 265,000 | 282,516 | |||||
| Series B 5.00% 12/1/36 | 440,000 | 468,732 | |||||
| Wyandotte County, Kansas City, | |||||||
| Kansas Unified Government | |||||||
| Special Obligation Revenue | |||||||
| (Sales Tax - Vacation Village | |||||||
| Project A) | |||||||
| Series A 5.75% 9/1/32 | 220,000 | 208,919 | |||||
| 44,057,753 | |||||||
| State General Obligation Bonds – 9.15% | |||||||
| California State | |||||||
| (CommonSpirit Health) | |||||||
| 5.00% 4/1/42 | 1,000,000 | 1,203,930 | |||||
| (Various Purposes) | |||||||
| 5.00% 11/1/47 | 1,000,000 | 1,119,960 | |||||
| Commonwealth of Puerto Rico | |||||||
| (Custodial Receipts) | |||||||
| Series A 144A 5.50% | |||||||
| 6/1/22 # | 1,215,000 | 1,237,781 | |||||
| (Restructured) | |||||||
| 0.01% 11/1/51 | 3,261,751 | 1,577,872 | |||||
| Series A 0.000% 7/1/33 ^ | 711,554 | 412,033 | |||||
| Series A 2.993% 7/1/24 ^ | 284,418 | 259,699 | |||||
| Series A1 4.00% 7/1/33 | 552,919 | 541,214 | |||||
| Series A1 4.00% 7/1/35 | 496,999 | 481,060 | |||||
| Series A1 4.00% 7/1/37 | 426,556 | 410,944 | |||||
| Series A1 4.00% 7/1/41 | 579,952 | 552,915 | |||||
| Series A1 4.00% 7/1/46 | 603,144 | 569,947 | |||||
| Series A1 5.25% 7/1/23 | 617,527 | 632,737 | |||||
| Series A1 5.375% 7/1/25 | 615,797 | 650,269 | |||||
| Series A1 5.625% 7/1/27 | 610,217 | 667,199 | |||||
| Series A1 5.625% 7/1/29 | 600,319 | 670,676 | |||||
| Series A1 5.75% 7/1/31 | 583,086 | 665,587 | |||||
| Series C 2.646% 11/1/43 | 2,848,740 | 1,534,759 | |||||
| (Various Custodial Receipts) | |||||||
| 144A 0.01% 6/1/22 # | 1,360,000 | 1,349,800 | |||||
| Illinois State | |||||||
| 5.00% 1/1/28 | 285,000 | 307,706 | |||||
| 5.00% 5/1/36 | 90,000 | 94,867 | |||||
| 5.00% 11/1/36 | 1,170,000 | 1,263,073 | |||||
| 5.00% 2/1/39 | 160,000 | 167,613 | |||||
| 5.50% 5/1/39 | 500,000 | 565,535 | |||||
| Series A 5.00% 4/1/38 | 170,000 | 175,510 | |||||
| Series A 5.125% 12/1/29 | 310,000 | 343,015 | |||||
| Series C 4.00% 10/1/41 | 1,500,000 | 1,516,155 | |||||
| (Rebuild Illinois Program) | |||||||
| Series B 4.00% 11/1/39 | 1,300,000 | 1,320,540 | |||||
| Minnesota State | |||||||
| Series E 5.00% 10/1/26 | 1,480,000 | 1,670,668 | |||||
| (Various Purposes) | |||||||
| Series F 5.00% 10/1/22 | 4,000,000 | 4,075,520 | |||||
| 26,038,584 | |||||||
| Transportation Revenue Bonds – 13.16% | |||||||
| Alameda Corridor, California | |||||||
| Transportation Authority | |||||||
| (2nd Sub Lien) | |||||||
| Series B 5.00% 10/1/37 | 430,000 | 470,583 | |||||
| Atlanta, Georgia Department of | |||||||
| Aviation | |||||||
| Series B 5.00% 1/1/29 | 1,000,000 | 1,051,290 | |||||
| California Municipal Finance | |||||||
| Authority Mobile Home Park | |||||||
| Revenue | |||||||
| (LINXS APM Project) | |||||||
| Series A 5.00% | |||||||
| 12/31/47 (AMT) | 615,000 | 664,840 | |||||
| Chicago, Illinois O'Hare | |||||||
| International Airport Revenue | |||||||
| (General-Senior Lien) | |||||||
| Series A 5.00% 1/1/48 (AMT) | 250,000 | 272,263 | |||||
19
Schedule of investments
Delaware Investments® National Municipal Income Fund
| Principal | |||||||
| amount° | Value (US $) | ||||||
| Municipal Bonds (continued) | |||||||
| Transportation Revenue Bonds (continued) | |||||||
| Chicago, Illinois O'Hare | |||||||
| International Airport Revenue | |||||||
| (General-Senior Lien) | |||||||
| Series D 5.25% 1/1/34 | 1,000,000 | $ | 1,023,850 | ||||
| Colorado High Performance | |||||||
| Transportation Enterprise | |||||||
| Revenue | |||||||
| (C-470 Express Lanes) | |||||||
| 5.00% 12/31/56 | 1,000,000 | 1,076,470 | |||||
| (Senior U.S. 36 & I- | |||||||
| 25 Managed Lanes) | |||||||
| 5.75% 1/1/44 (AMT) | 1,110,000 | 1,142,201 | |||||
| Denver City & County Airport | |||||||
| System Revenue | |||||||
| Series A 5.00% 12/1/29 (AMT) | 270,000 | 305,065 | |||||
| Series A 5.00% 12/1/48 (AMT) | 1,000,000 | 1,098,670 | |||||
| Foothill-Eastern Transportation | |||||||
| Corridor Agency | |||||||
| Series A 4.00% 1/15/46 | 1,000,000 | 1,045,740 | |||||
| Series C 4.00% 1/15/43 | 2,000,000 | 2,082,080 | |||||
| Harris County, Texas Toll Road | |||||||
| Authority Revenue | |||||||
| (Senior Lien) | |||||||
| Series A 4.00% 8/15/48 | 500,000 | 534,895 | |||||
| Metropolitan Transportation | |||||||
| Authority Revenue, | |||||||
| New York | |||||||
| (Green Bond) | |||||||
| Series A-1 5.00% 11/15/47 | 1,000,000 | 1,092,620 | |||||
| Series C-1 5.25% 11/15/55 | 750,000 | 829,957 | |||||
| Metropolitan Washington D.C. | |||||||
| Airports Authority Dulles Toll | |||||||
| Road Revenue | |||||||
| (Dulles Metrorail and Capital | |||||||
| Improvement Projects) | |||||||
| Series B 4.00% 10/1/49 | 510,000 | 528,569 | |||||
| Minneapolis – St. Paul | |||||||
| Metropolitan Airports | |||||||
| Commission Revenue | |||||||
| (Subordinate) | |||||||
| Series A 5.00% 1/1/31 | 410,000 | 454,993 | |||||
| Series A 5.00% 1/1/32 | 1,255,000 | 1,391,055 | |||||
| Series A 5.00% 1/1/49 | 2,095,000 | 2,334,856 | |||||
| Series B 5.00% 1/1/26 (AMT) | 500,000 | 521,700 | |||||
| Series C 5.00% 1/1/33 | 2,000,000 | 2,214,440 | |||||
| Series C 5.00% 1/1/36 | 1,000,000 | 1,104,830 | |||||
| Series C 5.00% 1/1/46 | 1,245,000 | 1,359,254 | |||||
| New Jersey Turnpike Authority | |||||||
| Series A 4.00% 1/1/48 | 1,000,000 | 1,052,810 | |||||
| Series B 5.00% 1/1/40 | 250,000 | 281,987 | |||||
| New Orleans, Louisiana Aviation | |||||||
| Board | |||||||
| Series B 5.00% 1/1/45 (AMT) | 1,000,000 | 1,056,220 | |||||
| New York Transportation | |||||||
| Development | |||||||
| (La Guardia Airport) | |||||||
| Series A 5.25% | |||||||
| 1/1/50 (AMT) | 700,000 | 732,585 | |||||
| (Terminal 4 John F. Kennedy | |||||||
| International Airport Project)) | |||||||
| Series C 4.00% 12/1/41 | 65,000 | 67,181 | |||||
| Pennsylvania Turnpike | |||||||
| Commission Subordinate | |||||||
| Series A 5.00% 12/1/48 | 5,000,000 | 5,691,650 | |||||
| Series A-1 5.00% 12/1/43 | 500,000 | 534,785 | |||||
| Series A-1 5.00% 12/1/47 | 210,000 | 235,110 | |||||
| Phoenix City, Arizona Civic | |||||||
| Improvement Airport Revenue | |||||||
| Series B 5.00% 7/1/49 (AMT) | 1,000,000 | 1,099,570 | |||||
| Salt Lake City, Utah Airport | |||||||
| Revenue | |||||||
| Series B 5.00% 7/1/42 | 625,000 | 689,906 | |||||
| South Jersey Port Corporation | |||||||
| (Subordinated Marine Terminal | |||||||
| Revenue) | |||||||
| Series B 5.00% | |||||||
| 1/1/48 (AMT) | 195,000 | 208,270 | |||||
| South Jersey Port, New Jersey | |||||||
| (Subordinated Marine Terminal | |||||||
| Revenue) | |||||||
| Series A 5.00% 1/1/49 | 85,000 | 91,826 | |||||
| Series B 5.00% 1/1/42 (AMT) | 85,000 | 91,129 | |||||
| St. Louis, Missouri Airport | |||||||
| Revenue | |||||||
| (Lambert St. Louis | |||||||
| International) | |||||||
| 5.00% 7/1/32 (AMT) | 1,000,000 | 1,006,440 | |||||
| Texas Private Activity Bond | |||||||
| Surface Transportation | |||||||
| Corporate Senior Lien Revenue | |||||||
| (Blueridge Transportation | |||||||
| Group) | |||||||
| 5.00% 12/31/40 (AMT) | 110,000 | 117,740 | |||||
| 5.00% 12/31/45 (AMT) | 110,000 | 117,179 | |||||
20
| Principal | |||||||
| amount° | Value (US $) | ||||||
| Municipal Bonds (continued) | |||||||
| Transportation Revenue Bonds (continued) | |||||||
| Texas Private Activity Bond | |||||||
| Surface Transportation | |||||||
| Corporate Senior Lien Revenue | |||||||
| (Blueridge Transportation | |||||||
| Group) | |||||||
| 5.00% 12/31/50 (AMT) | 160,000 | $ | 169,998 | ||||
| (NTE Mobility Partners | |||||||
| Segments 3 LLC Segment | |||||||
| 3C Project) | |||||||
| 5.00% 6/30/58 (AMT) | 500,000 | 549,580 | |||||
| (NTE Mobility Partners) | |||||||
| 6.75% 6/30/43 (AMT) | 225,000 | 239,940 | |||||
| 7.00% 12/31/38 (AMT) | 165,000 | 176,599 | |||||
| Triborough Bridge & Tunnel | |||||||
| Authority Revenue, New York | |||||||
| (MTA Bridges And Tunnels) | |||||||
| Series A 5.00% 11/15/49 | 350,000 | 400,369 | |||||
| Virginia Small Business Financing | |||||||
| Authority | |||||||
| (Transform 66 P3 Project) | |||||||
| 5.00% 12/31/56 (AMT) | 235,000 | 260,107 | |||||
| 37,471,202 | |||||||
| Water & Sewer Revenue Bonds – 4.45% | |||||||
| Arapahoe County Water & | |||||||
| Wastewater Authority Revenue | |||||||
| Series A 4.00% 12/1/39 | 1,250,000 | 1,357,613 | |||||
| Guam Government Waterworks | |||||||
| Authority | |||||||
| 5.00% 7/1/40 | 1,200,000 | 1,317,576 | |||||
| Metropolitan Council Waste Water | |||||||
| Revenue | |||||||
| Series B 4.00% 9/1/27 | 1,145,000 | 1,158,099 | |||||
| Series C 4.00% 3/1/31 | 355,000 | 383,737 | |||||
| Series C 4.00% 3/1/32 | 1,405,000 | 1,517,372 | |||||
| Morgan County Quality Water | |||||||
| District | |||||||
| 4.00% 12/1/50 (AGM) | 365,000 | 384,867 | |||||
| New York City, New York Water & | |||||||
| Sewer System Revenue | |||||||
| Series GG-1 4.00% 6/15/50 | 500,000 | 526,315 | |||||
| (Unrefunded Balance) | |||||||
| 5.00% 6/15/47 | 185,000 | 191,564 | |||||
| Sacramento County Sanitation | |||||||
| Districts Financing Authority | |||||||
| Series A 5.00% 12/1/50 | 5,000,000 | 5,839,359 | |||||
| 12,676,502 | |||||||
| Total Municipal Bonds | |||||||
| (cost $416,192,765) | 418,403,885 | ||||||
| Short-Term Investments – 1.51% | |||||||
| Variable Rate Demand Notes – 1.51%¤ | |||||||
| Los Angeles Department of Water | |||||||
| & Power Revenue | |||||||
| Subordinate Series A-1 0.31% | |||||||
| 7/1/50 (SPA - Royal Bank Of | |||||||
| Canada) | 3,000,000 | 3,000,000 | |||||
| Mississippi Business Finance | |||||||
| Corporation Gulf Opportunity | |||||||
| Zone Industrial Development | |||||||
| Revenue | |||||||
| (Chevron U.S.A. Inc. Project) | |||||||
| Series B 0.37% 12/1/30 | 1,000,000 | 1,000,000 | |||||
| New York City, New York | |||||||
| Subordinate Series E-5 0.36% | |||||||
| 3/1/48 (LOC - TD Bank N.A.) | 300,000 | 300,000 | |||||
| Total Short-Term Investments | |||||||
| (cost $4,300,000) | 4,300,000 | ||||||
| Total Value of Securities–148.47% | |||||||
| (cost $420,492,765) | $ | 422,703,885 | |||||
| ° | Principal amount shown is stated in USD unless noted that the security is denominated in another currency. |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At March 31, 2022, the aggregate value of Rule 144A securities was $16,883,023, which represents 5.93% of the Fund's net assets. See Note 8 in “Notes to financial statements.” |
| ‡ | Non-income producing security. Security is currently in default. |
| ^ | Zero-coupon security. The rate shown is the effective yield at the time of purchase. |
| § | Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 8 in “Notes to financial statements.” |
| ¤ | Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of March 31, 2022. |
Summary of abbreviations:
AGM – Insured by Assured Guaranty Municipal Corporation
AMT – Subject to Alternative Minimum Tax
BAM – Insured by Build America Mutual Assurance
CHF – Collegiate Housing Foundation
ICE – Intercontinental Exchange, Inc.
LIBOR – London Interbank Offered Rate
LIBOR03M – ICE LIBOR USD 3 Month
21
Schedule of investments
Delaware Investments® National Municipal Income Fund
LIBOR06M – ICE LIBOR USD 6 Month
LLC – Limited Liability Corporation
LOC – Letter of Credit
N.A. – National Association
SPA – Stand-by Purchase Agreement
USD – US Dollar
See accompanying notes, which are an integral part of the financial statements.
22
Statement of assets and liabilities
Delaware Investments® National Municipal Income Fund
March 31, 2022
| Assets: | |||||
| Investments, at value* | $ | 422,703,885 | |||
| Cash | 3,221,860 | ||||
| Receivable for securities sold | 22,064,142 | ||||
| Interest receivable | 5,043,118 | ||||
| Prepaid rating agency fee | 43,740 | ||||
| Offering cost for preferred shareholders | 198,666 | ||||
| Other assets | 402,996 | ||||
| Total Assets | 453,678,407 | ||||
| Liabilities: | |||||
| Liquidation value of preferred stock | 135,000,000 | ||||
| Payable for securities purchased | 33,738,753 | ||||
| Investment management fees payable to affiliates | 144,916 | ||||
| Audit and tax fees payable | 44,046 | ||||
| Other accrued expenses | 28,421 | ||||
| Legal fees payable to affiliates | 13,380 | ||||
| Trustees’ fees and expenses payable to affiliates | 1,418 | ||||
| Accounting and administration expenses payable to affiliates | 1,349 | ||||
| Reports and statements to shareholders expenses payable to affiliates | 145 | ||||
| Total Liabilities | 168,972,428 | ||||
| Total Net Assets Applicable to Common Shareholders | $ | 284,705,979 | |||
| Net Assets Applicable to Common Shareholders Consist of: | |||||
| Paid-in capital ($0.001 par value)●, ϕ | $ | 285,042,589 | |||
| Total distributable earnings (loss) | (336,610 | ) | |||
| Total Net Assets Applicable to Common Shareholders | $ | 284,705,979 | |||
| Net Asset Value per Common Share | $ | 13.59 | |||
| * | Investments, at cost | $ | 420,492,765 | ||
| ● | Common shares outstanding | 20,956,695 | |||
| ϕ | Common shares authorized | unlimited | |||
See accompanying notes, which are an integral part of the financial statements.
23
Statement of operations
Delaware Investments® National Municipal Income Fund
Year ended March 31, 2022
| Investment Income: | |||||
| Interest | $ | 4,879,305 | |||
| Expenses: | |||||
| Management fees | 562,082 | ||||
| Interest expense | 508,966 | ||||
| Legal fees | 156,770 | ||||
| Dividend disbursing and transfer agent fees and expenses | 64,444 | ||||
| Accounting and administration expenses | 58,941 | ||||
| Reports and statements to shareholders expenses | 42,526 | ||||
| Audit and tax fees | 40,058 | ||||
| Rating agency fees | 37,916 | ||||
| Offering costs | 8,141 | ||||
| Stock exchange fees | 6,391 | ||||
| Trustees’ fees and expenses | 3,240 | ||||
| Custodian fees | 2,585 | ||||
| Registration fees | 450 | ||||
| Other | 30,239 | ||||
| Total operating expenses | 1,522,749 | ||||
| Net Investment Income | 3,356,556 | ||||
| Net Realized and Unrealized Loss: | |||||
| Net realized loss on investments | (2,015,982 | ) | |||
| Net change in unrealized appreciation (depreciation) of investments | (15,173,054 | ) | |||
| Net Realized and Unrealized Loss | (17,189,036 | ) | |||
| Net Decrease in Net Assets Resulting from Operations | $ | (13,832,480 | ) | ||
See accompanying notes, which are an integral part of the financial statements.
24
Statements of changes in net assets
Delaware Investments® National Municipal Income Fund
| Year ended | ||||||||
| 3/31/22 | 3/31/21 | |||||||
| Increase (Decrease) in Net Assets from Operations: | ||||||||
| Net investment income | $ | 3,356,556 | $ | 2,624,735 | ||||
| Net realized gain (loss) | (2,015,982 | ) | 189,105 | |||||
| Net change in unrealized appreciation (depreciation) | (15,173,054 | ) | 4,860,673 | |||||
| Net increase (decrease) in net assets resulting from operations | (13,832,480 | ) | 7,674,513 | |||||
| Dividends and Distributions to Common Shareholders from: | ||||||||
| Distributable earnings | (4,399,567 | ) | (2,576,684 | ) | ||||
| Total dividends and distributions to shareholders | (4,399,567 | ) | (2,576,684 | ) | ||||
| Net assets from merger | 235,755,536 | — | ||||||
| Increase in net assets derived from capital share transactions | 235,755,536 | — | ||||||
| Net Increase in Net Assets Applicable to Common Shareholders | 217,523,489 | 5,097,829 | ||||||
| Net Assets Applicable to Common Shareholders: | ||||||||
| Beginning of year | 67,182,490 | 62,084,661 | ||||||
| End of year | $ | 284,705,979 | $ | 67,182,490 | ||||
See accompanying notes, which are an integral part of the financial statements.
25
Statement of cash flows
Delaware Investments® National Municipal Income Fund
Year ended March 31, 2022
| Cash Flows Provided by (Used for) Operating Activities: | ||||||
| Net increase (decrease) in net assets resulting from operations | $ | (13,832,480 | ) | |||
| Adjustments to reconcile net increase (decrease) in net assets from operations to | ||||||
| net cash provided by (used for) operating activities: | ||||||
| Amortization of premium and accretion of discount on investments | 794,988 | |||||
| Proceeds from disposition of investment securities | 110,828,798 | |||||
| Purchase of investment securities | (112,993,458 | ) | ||||
| (Purchase) proceeds from disposition of short-term investment securities, net | (2,962,560 | ) | ||||
| Net realized (gain) loss on investments | 2,015,982 | |||||
| Net change in unrealized (appreciation) depreciation of investments | 15,173,054 | |||||
| (Increase) decrease in other assets | (467 | ) | ||||
| (Increase) decrease in receivable for securities sold | (22,064,142 | ) | ||||
| (Increase) decrease in dividends and interest receivable | (1,014,400 | ) | ||||
| (Increase) decrease in offering cost for preferred shareholders | 410,111 | |||||
| Increase (decrease) in prepaid rating agency fee | (393,205 | ) | ||||
| Increase (decrease) in payable for securities purchased | 33,738,753 | |||||
| Increase (decrease) in Trustees' fees and expenses payable to affiliates | (501 | ) | ||||
| Increase (decrease) in accounting and administration expenses payable to affiliates | (2,199 | ) | ||||
| Increase (decrease) in investment management fees payable to affiliates | 63,009 | |||||
| Increase (decrease) in reports and statements to shareholders expenses payable to affiliates | (233 | ) | ||||
| Increase (decrease) in audit and tax fees payable | 34,246 | |||||
| Increase (decrease) in legal fees payable to affiliates | 4,153 | |||||
| Increase (decrease) in other accrued expenses payable | (28,530 | ) | ||||
| Total adjustments | 23,603,399 | |||||
| Net cash provided by (used for) operating activities | 9,770,919 | |||||
| Cash provided by (used for) financing activities: | ||||||
| Cash dividends and distributions paid to common shareholders and preferred shareholders | (4,399,567 | ) | ||||
| Decrease in cash from plan of reorganization | (1,965,800 | ) | ||||
| Increase (decrease) in bank overdraft | (183,692 | ) | ||||
| Net cash provided by (used for) financing activities | (6,549,059 | ) | ||||
| Net increase (decrease) in cash | 3,221,860 | |||||
| Cash at beginning of year | $ | -- | ||||
| Cash at end of year | $ | 3,221,860 | ||||
| Cash paid during the period for interest expense from borrowings | $ | 508,966 | ||||
| Noncash transactions from plan of reorganization: | ||||||
| Investment in securities, cost | $ | 328,313,576 | ||||
| Other assets | $ | 3,246,741 | ||||
| Value of preferred shares acquired | $ | 105,000,000 | ||||
| Other liabilities | $ | 10,493 | ||||
| Capital | $ | 235,786,202 | ||||
See accompanying notes, which are an integral part of the financial statements.
26
Financial highlights
Delaware Investments® National Municipal Income Fund
Selected data for each share of the Fund outstanding throughout each period were as follows:
| Year ended | ||||||||||||||||||||
| 3/31/22 | 3/31/21 | 3/31/20 | 3/31/19 | 3/31/18 | ||||||||||||||||
| Net asset value, beginning of period | $ | 14.84 | $ | 13.71 | $ | 14.44 | $ | 14.34 | $ | 14.31 | ||||||||||
| Income (loss) from investment operations: | ||||||||||||||||||||
| Net investment income1 | 0.51 | 0.58 | 0.54 | 0.59 | 0.64 | |||||||||||||||
| Net realized and unrealized gain (loss) | (1.12 | ) | 1.12 | (0.57 | ) | 0.11 | (0.01 | ) | ||||||||||||
| Total from investment operations | (0.61 | ) | 1.70 | (0.03 | ) | 0.70 | 0.63 | |||||||||||||
| Less dividends and distributions to common shareholders | ||||||||||||||||||||
| from: | ||||||||||||||||||||
| Net investment income | (0.54 | ) | (0.51 | ) | (0.55 | ) | (0.60 | ) | (0.60 | ) | ||||||||||
| Net realized gain | (0.10 | ) | (0.06 | ) | (0.15 | ) | — | — | ||||||||||||
| Total dividends and distributions | (0.64 | ) | (0.57 | ) | (0.70 | ) | (0.60 | ) | (0.60 | ) | ||||||||||
| Net asset value, end of period | $ | 13.59 | $ | 14.84 | $ | 13.71 | $ | 14.44 | $ | 14.34 | ||||||||||
| Market value, end of period | $ | 12.65 | $ | 13.12 | $ | 12.24 | $ | 12.69 | $ | 12.62 | ||||||||||
| Total return based on:2 | ||||||||||||||||||||
| Net asset value | (4.15% | ) | 13.20% | (0.24% | ) | 5.71% | 4.84% | |||||||||||||
| Market value | 0.92% | 12.11% | 1.35% | 5.56% | 2.04% | |||||||||||||||
| Ratios and supplemental data: | ||||||||||||||||||||
| Net assets applicable to common shares, end of period | ||||||||||||||||||||
| (000 omitted) | $ | 284,706 | $ | 67,182 | $ | 62,085 | $ | 65,399 | $ | 64,924 | ||||||||||
| Ratio of expenses to average net assets applicable to common | ||||||||||||||||||||
| shareholders3 | 1.57% | 1.66% | 2.27% | 2.31% | 1.97% | |||||||||||||||
| Ratio of net investment income to average net assets applicable | ||||||||||||||||||||
| to common shareholders4 | 3.45% | 4.03% | 3.69% | 4.19% | 4.36% | |||||||||||||||
| Portfolio turnover | 75% | 19% | 33% | 16% | 50% | |||||||||||||||
| Leverage analysis: | ||||||||||||||||||||
| Value of preferred shares outstanding (000 omitted)5 | 135,000 | 30,000 | 30,000 | 30,000 | 30,000 | |||||||||||||||
| Net asset coverage per share of preferred shares, end of period5 | 310,893 | 323,942 | 306,949 | 317,996 | 316,412 | |||||||||||||||
| Liquidation value per share of preferred shares5 | 100,000 | 100,000 | 100,000 | 100,000 | 100,000 | |||||||||||||||
| 1 | Net investment income is reduced by dividends paid to preferred shareholders from net investment income of $0.08, $0.08, $0.17, $0.18, and $0.14 per share for the years ended March 31, 2022, 2021, 2020, 2019, and 2018, respectively. |
| 2 | Total investment return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any, are assumed for the purposes of this calculation to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Generally, total investment return based on net asset value will be higher than total investment return based on market value in periods where there is an increase in the discount or a decrease in the premium of the market value to the net asset value from the beginning to the end of such periods. Conversely, total investment return based on net asset value will be lower than total investment return based on market value in periods where there is a decrease in the discount or an increase in the premium of the market value to the net asset value from the beginning to the end of such periods. |
| 3 | The ratio of expenses to average net assets applicable to common shareholders excluding interest expense for the years ended March 31, 2022, 2021, 2020, 2019, and 2018 were 1.04%, 1.02%, 1.11%, 1.05%, and 0.98%, respectively. |
| 4 | The ratio of net investment income excluding interest expense to average net assets for the years ended March 31, 2022, 2021, 2020, 2019, and 2018 were 3.98%, 4.67%, 4.84%, 5.45%, and 5.35%, respectively. |
| 5 | In March 2012, the Fund issued a series of 300 variable rate preferred shares, with a liquidation preference of $100,000 per share (Series 2017 Shares). The Series 2017 Shares were redeemed on February 2, 2016 and replaced with Series 2021 Shares, which were the same amount and value as the Fund’s Series 2017 Shares. On April 25, 2019, the Fund redeemed the Series 2021 Shares, and replaced them with Series 2049 Muni-MultiMode Preferred Shares (Series 2049), which have the same amount and value as the Series 2021 Shares. When the Fund acquired Delaware Investments Colorado Municipal Income Fund, Inc. and Delaware Investments Minnesota Municipal Income Fund II, Inc. on February 11, 2022, it also acquired the Series 2049 preferred shares used as leverage by those funds, which are reflected in the value of preferred shares outstanding in the table above for March 31, 2022. |
See accompanying notes, which are an integral part of the financial statements.
27
Notes to financial statements
Delaware Investments® National Municipal Income Fund
March 31, 2022
Delaware Investments National Municipal Income Fund (Fund) is organized as a Massachusetts business trust, and is a diversified closed-end management investment company under the Investment Company Act of 1940, as amended (1940 Act). The Fund’s shares trade on the NYSE American, the successor to the American Stock Exchange, formerly known as NYSE Market.
1. Significant Accounting Policies
The Fund follows accounting and reporting guidance under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services — Investment Companies. The following accounting policies are in accordance with US generally accepted accounting principles (US GAAP) and are consistently followed by the Fund.
Security Valuation — Debt securities are valued based upon valuations provided by an independent pricing service or broker and reviewed by management. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. Valuations for fixed income securities utilize matrix systems, which reflect such factors as security prices, yields, maturities, and ratings, and are supplemented by dealer and exchange quotations. Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of Fund’s Board of Trustees (Board). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security. Restricted securities are valued at fair value using methods approved by the Board.
Federal and Foreign Income Taxes — No provision for federal income taxes has been made as the Fund intends to continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. The Fund evaluates tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. Management has analyzed the Fund’s tax positions taken or expected to be taken on the Fund’s federal income tax returns through the year ended March 31, 2022 and for all open tax years (years ended March 31, 2019–March 31, 2021), and has concluded that no provision for federal income tax is required in the Fund’s financial statements. If applicable, the Fund recognizes interest accrued on unrecognized tax benefits in interest expense and penalties in "Other" on the “Statement of operations.” During the year ended March 31, 2022, the Fund did not incur any interest or tax penalties.
Cash and Cash Equivalents — Cash and cash equivalents include deposits held at financial institutions, which are available for the Fund’s use with no restrictions, with original maturities of 90 days or less.
Use of Estimates — The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the fair value of investments, the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the differences could be material.
Other — Expenses directly attributable to a Fund are charged directly to that Fund. Other expenses common to various funds within the Delaware Funds by Macquarie® (Delaware Funds) are generally allocated among such funds on the basis of average net assets. Management fees and certain other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Interest income is recorded on the accrual basis. Discounts and premiums on debt securities are accreted or amortized to interest income, respectively, over the lives of the respective securities using the effective interest method. Premiums on callable debt securities are amortized to interest income to the earliest call date using the effective interest method. The Fund declares and pays dividends from net investment income monthly and distributions from net realized gain on investments, if any, annually. The Fund may distribute more frequently, if necessary for tax purposes. Dividends and distributions, if any, are recorded on the ex-dividend date.
The Fund receives earnings credits from its custodian when positive cash balances are maintained, which may be used to offset custody fees. The expenses paid under this arrangement are included on the “Statement of operations” under “Custodian fees” with the corresponding expenses offset included under “Less expenses paid indirectly.” There were no such earnings credits for the year ended March 31, 2022.
28
2. Investment Management, Administration Agreements and Other Transactions with Affiliates
In accordance with the terms of its investment management agreement, the Fund pays Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust and the investment manager, an annual fee of 0.40% which is calculated based on the Fund’s adjusted average daily net assets.
Delaware Investments Fund Services Company (DIFSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to the Fund. For these services, DIFSC’s fees are calculated daily and paid monthly based on the aggregate daily net assets of all funds within the Delaware Funds at the following annual rates: 0.00475% of the first $35 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $45 billion (Total Fee). Each fund in the Delaware Funds pays a minimum of $4,000, which, in aggregate, is subtracted from the Total Fee. Each fund then pays its portion of the remainder of the Total Fee on a relative net asset value (NAV) basis. These amounts are included on the “Statement of operations” under “Accounting and administration expenses.” For the year ended March 31, 2022, the Fund was charged $8,622 for these services.
As provided in the investment management agreement, the Fund bears a portion of the cost of certain resources shared with DMC, including the cost of internal personnel of DMC and/or its affiliates that provide legal and regulatory reporting services to the Fund. These amounts are included on the “Statement of operations” under “Legal fees.” For the year ended March 31, 2022, the Fund was charged $47,249 for internal legal and regulatory reporting services provided by DMC and/or its affiliates’ employees.
Trustees’ fees include expenses accrued by the Fund for each Trustee’s retainer and meeting fees. Certain officers of DMC and DIFSC are officers and/or Trustees of the Fund. These officers and Trustees are paid no compensation by the Fund.
Cross trades for the year ended March 31, 2022, were executed by the Fund pursuant to procedures adopted by the Board designed to ensure compliance with Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds of investment companies, or between a fund of an investment company and another entity, that are or could be considered affiliates by virtue of having a common investment advisor (or affiliated investment advisors), common trustees and/or common officers. At their regularly scheduled meetings, the Board reviews a report related to the Fund’s compliance with the procedures adopted by the Board. Pursuant to these procedures, for the year ended March 31, 2022, the Fund engaged in Rule 17a-7 securities purchases of $19,005,768. For the year ended March 31, 2022, the Fund engaged in Rule 17a-7 securities sales of $21,462,044, resulting in net losses of $227,293.
3. Investments
For the year ended March 31, 2022, the Fund made purchases and sales of investment securities other than short-term investments as follows:
| Purchases | $ | 112,993,458 | |
| Sales | 110,828,798 |
The tax cost of investments includes adjustments to net unrealized appreciation (depreciation), which may not necessarily be the final tax cost basis adjustments but which approximate the tax basis unrealized gains and losses that may be realized and distributed to shareholders. At March 31, 2022, the cost and unrealized appreciation (depreciation) of investments for federal income tax purpose for the Fund were as follows:
| Cost of investments | $ | 420,659,655 | ||
| Aggregate unrealized appreciation of investments | $ | 9,251,557 | ||
| Aggregate unrealized depreciation of investments | (7,207,327 | ) | ||
| Net unrealized appreciation of investments | $ | 2,044,230 |
US GAAP defines fair value as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A three-level hierarchy for fair value measurements has been established based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions
29
Notes to financial statements
Delaware Investments® National Municipal Income Fund
3. Investments (continued) market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances. The Fund's investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-level hierarchy of inputs is summarized as follows:
| Level 1 – | Inputs are quoted prices in active markets for identical investments. (Examples: equity securities, open-end investment companies, futures contracts, and exchange-traded options contracts) |
Level 2 – | Other observable inputs, including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs. (Examples: debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, and fair valued securities) |
Level 3 – | Significant unobservable inputs, including the Fund's own assumptions used to determine the fair value of investments. (Examples: broker-quoted securities and fair valued securities) |
Level 3 investments are valued using significant unobservable inputs. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Valuations may also be based upon current market prices of securities that are comparable in coupon, rating, maturity, and industry. The derived value of a Level 3 investment may not represent the value which is received upon disposition and this could impact the results of operations.
| Level 2 | |||||
| Securities | |||||
| Assets: | |||||
| Municipal Bonds | $ | 418,403,885 | |||
| Short-Term Investments | 4,300,000 | ||||
| Total Value of Securities | $ | 422,703,885 | |||
During the year ended March 31, 2022, there were no transfers into or out of Level 3 investments. The Fund's policy is to recognize transfers into or out of Level 3 investments based on fair value at the beginning of the reporting period.
A reconciliation of Level 3 investments is presented when the Fund has a significant amount of Level 3 investments at the beginning or end of the year in relation to the Fund's net assets. During the year ended March 31, 2022, there were no Level 3 investments.
30
4. Dividend and Distribution Information
Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Additionally, distributions from net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the years ended March 31, 2022 and 2021 were as follows:
| Year ended | ||||||
| 3/31/22 | 3/31/21 | |||||
| Tax-exempt income | $ | 3,946,579 | $ | 2,723,922 | ||
| Ordinary income | 576 | — | ||||
| Long-term capital gains | 452,412 | 267,178 | ||||
| Total | $ | 4,399,567 | $ | 2,991,100 | ||
5. Components of Net Assets on a Tax Basis
As of March 31, 2022, the components of net assets on a tax basis were as follows:
| Shares of beneficial interest | $ | 285,042,589 | ||
| Undistributed tax-exempt income | 11,421 | |||
| Qualified late year loss deferrals | (2,372,110 | ) | ||
| Capital loss carryforwards* | (20,151 | ) | ||
| Net unrealized appreciation on investments and foreign currencies | 2,044,230 | |||
| Net assets | $ | 284,705,979 |
| * | A portion of the Fund's capital loss carryforward is subject to limitation under the Internal Revenue Code and related regulations. |
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 deferral of wash sales.
Qualified late year ordinary and capital losses (including currency and specified gain/loss items) represent losses realized from January 1, 2022 through March 31, 2022 and November 1, 2021 through March 31, 2022, respectively, that, in accordance with federal income tax regulations, the 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 reorganization-related adjustments and tax treatment of payments to preferred shareholders. Results of operations and net assets were not affected by these reclassifications. For the year ended March 31, 2022, the Fund recorded the following reclassifications:
| Paid-in capital | $ | 279,643 | ||
| Total distributable earnings (loss) | (279,643 | ) |
For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. At March 31, 2022, the Fund utilized $43,702 of capital loss carryforwards.
At March 31, 2022, capital loss carryforwards available to offset future realized capital gains are as follows:
| Loss carryforward character | ||||
| Short-term | Long-term | Total | ||
| $20,151 | $— | $20,151 | ||
31
Notes to financial statements
Delaware Investments® National Municipal Income Fund
6. Capital Stock
Pursuant to its declaration of trust, the Fund has been authorized to issue an unlimited amount of $0.01 par value common shares. Shares issuable under the Fund’s dividend reinvestment plan are purchased by the Fund’s transfer agent, Computershare, Inc., in the open market. During the year ended March 31, 2022 and 2021, the Fund did not issue any shares under its dividend reinvestment plan.
On April 25, 2019, the Fund priced private offerings to a qualified institutional buyer, as defined pursuant to Rule 144A under the Securities Act of 1933, of approximately $30 million of Muni-MultiMode Preferred Shares, Series 2049 (MMP), with a $100,000 liquidation value per share. The Fund used the net proceeds from each offering to redeem its outstanding Variable Rate MuniFund Term Preferred Shares, Series 2021 (VMTP). The MMP shares was the same amount and value as the respective Fund’s VMTP shares. On February 11, 2022, the Fund acquired the assets of Delaware Investments Colorado Municipal Income Fund, Inc. (“VCF”) and Delaware Investments Minnesota Municipal Income Fund II, Inc. (“VMM”), which included Series 2049 MMP preferred shares issued by each fund used as leverage (the “Reorganization”). The Reorganization caused the Fund’s total preferred shares outstanding to equal $135 million, with VCF’s Series 2049 MMP preferred shares becoming Series 2 and VMM’s Series 2049 MMP preferred shares becoming Series 3 of the MMP shares issued by the Fund. The Fund’s original tranche of Series 2049 MMP preferred shares is Series 1. The terms of the acquired funds’ MMP shares are substantially similar to those of the Fund. For more information on the Reorganization see Note 7.
The MMP shares are a floating rate form of preferred stock with a mandatory term redemption. The mandatory term redemption date for these offerings is April 1, 2049. MMP shares have the option at either the request of the purchaser or issuer to be converted to a variable rate demand preferred (“VRDP”) structure. The converted VRDP shares could then be offered for sale to certain institutional investors. The VRDP could continue to remain outstanding for the remainder of the MMP shares’ 30-year term. MMP dividends are set weekly at a spread to the Securities Industry and Financial Markets Association Municipal Swap Index. MMP shares represent the preferred stock of the Fund and are senior, with priority in all respects, to the Fund’s common shares as to payments of dividends. MMP shares are redeemable at par. The Fund may be obligated to redeem certain of the MMP shares if the Fund fails to maintain certain asset coverage and leverage ratio requirements and such failures are not cured by the applicable cure date. The redemption price per share is equal to the sum of the liquidation value per share plus any accumulated but unpaid dividends. Dividends on MMP shares are set weekly, and are based on a short-term index rate plus an additional spread that is subject to adjustment in certain circumstances, including a change in the credit rating assigned to the MMP shares by Fitch Ratings (“Fitch”).
The weighted average dividend rate for the year ended March 31, 2022 is as follows:
| Delaware Investments National Municipal Income Fund | 0.38% |
The Fund uses leverage because its managers believe that, over time, leveraging may provide opportunities for additional income and total return for common shareholders. However, the use of leverage also can expose common shareholders to additional volatility. For example, as the prices of securities held by the Fund decline, the negative impact of these valuation changes on common share net asset value and common shareholder total return is magnified by the use of leverage; accordingly, the use of structural leverage may hurt the Fund’s overall performance.
Leverage may also cause the Fund to incur certain costs. In the event that the Fund is unable to meet certain criteria (including, but not limited to, maintaining certain ratings with Fitch, funding dividend payments, or funding redemptions), the Fund will pay additional fees with respect to the leverage.
For financial reporting purposes, the MMP shares are considered debt of the issuer; therefore, the liquidation value which approximates fair value of the MMP shares is recorded as a liability in the "Statement of assets and liabilities". Dividends accrued and paid on the MMP shares are included as a component of interest expense in the "Statement of operations". The MMP shares are treated as equity for legal and tax purposes. Dividends paid to holders of the MMP shares are generally classified as tax-exempt income for tax-reporting purposes.
Offering costs for MMP shares are recorded as a deferred charge and amortized over the 30-year life of the MMP shares. These are presented as “Offering cost for preferred shareholders” on the “Statement of assets and liabilities” and “Offering costs” on the “Statement of operations.”
32
7. Reorganization
On November 9, 2021, the Board approved a proposal to reorganize (the “Reorganization”) Delaware Investments® Colorado Municipal Income Fund, Inc. and Delaware Investments Minnesota Municipal Income Fund II, Inc. (the “Acquired Funds”), each organized as Minnesota corporations, with and into Delaware Investments National Municipal Income Fund (the “Acquiring Fund”), organized as a Massachusetts business trust. Pursuant to an Agreement and Plan of Reorganization (the “Plan”): (i) all of the property, assets, and goodwill of the Acquired Funds were acquired by the Acquiring Fund, and (ii) the Trust, on behalf of the Acquiring Fund, assumed the liabilities of the Acquired Funds, in exchange for shares of the Acquiring Fund. In accordance with the Plan, the Acquired Funds liquidated and dissolved following the Reorganization. The purpose of the transaction was to allow shareholders of the Acquired Funds to own shares of the Acquiring Fund, and the Acquiring Fund to achieve a larger asset level, which could potentially reduce its discounts as well as fixed expenses, greater liquidity to facilitate larger trading volumes, stronger investment opportunities due to scale and having a national investment focus, and the ability to implement other forms of leverage. The Reorganization was accomplished by a tax-free exchange of shares on February 11, 2022. For financial reporting purposes, assets received and shares issued by the Acquiring Fund were recorded at fair value; however, the cost basis of the investments received from the Acquired Funds was carried forward to align ongoing reporting of the Acquiring Fund's realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes.
The share transactions associated with the Reorganization are as follows:
| Shares | ||||||||||
| Acquired | Acquired | Converted | Acquiring | |||||||
| Funds | Fund Shares | to Acquiring | Fund | Conversion | ||||||
| Net Assets | Outstanding | Fund | Net Assets | Ratio | ||||||
| Delaware Investments Colorado | Delaware Investments National | |||||||||
| Municipal Income Fund, Inc. | Municipal Income Fund | |||||||||
| Common Shares | $71,680,609 | 4,837,100 | 4,995,164 | $64,997,119 | 1.0327 | |||||
| Shares | ||||||||||
| Acquired | Acquired | Converted | Acquiring | |||||||
| Funds | Fund Shares | to Acquiring | Fund | Conversion | ||||||
| Net Assets | Outstanding | Fund | Net Assets | Ratio | ||||||
| Delaware Investments Minnesota | Delaware Investments National | |||||||||
| Municipal Income Fund II | Municipal Income Fund | |||||||||
| Common Shares | 164,074,927 | 11,504,975 | 11,433,793 | 64,997,119 | 0.9938 | |||||
The net assets of the Acquired Funds before the Reorganization were $235,755,536. The net assets of the Acquiring Fund immediately following the Reorganization were $300,752,655.
Assuming the Reorganization had been completed on April 1, 2021, the Acquiring Fund's pro forma results of operations for the year ended March 31, 2022, would have been as follows:
| Delaware Investments National Municipal Income Fund | ||||||
| Net investment income | $ | 10,353,883 | ||||
| Net realized loss on investments | (2,024,210 | ) | ||||
| Net change in unrealized appreciation (depreciation) | (22,051,855 | ) | ||||
| Net decrease in net assets resulting from operations | $ | (13,722,182 | ) | |||
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practical to separate the amounts of revenue and earnings of the Acquired Funds that have been included in the Acquiring Fund's Statement of Operations since the Reorganization was consummated on March 31, 2022.
8. Geographic, Credit, and Market Risks
Beginning in January 2020, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of a novel coronavirus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines,
33
Notes to financial statements
Delaware Investments® National Municipal Income Fund
8. Geographic, Credit, and Market Risks (continued)
supply chain disruptions, lower consumer demand and general market uncertainty. The effects of COVID-19 have and may continue to adversely affect the global economy, the economies of certain nations, and individual issuers, all of which may negatively impact the Fund's performance.
IBOR is the risk that changes related to the use of the London interbank offered rate (LIBOR) and other interbank offered rate (collectively, IBORs) could have adverse impacts on financial instruments that reference LIBOR (or the corresponding IBOR). The abandonment of LIBOR could affect the value and liquidity of instruments that reference LIBOR. The use of alternative reference rate products may impact investment strategy performance. These risks may also apply with respect to changes in connection with other IBORs, such as the euro overnight index average (EONIA), which are also the subject of recent reform.
The Fund concentrates its investments in securities issued by municipalities. Any downgrade to the credit rating of the securities issued by the US government may result in a downgrade of securities issued by the states or US territories. The Fund will be subject to these risks as well but to a lesser extent because it invests at least 80% of its net assets in securities, the income from which is exempt from federal income tax and is not limited to investing substantially all of its assets in municipal obligations of a single state. From time to time and consistent with its investment policies, the Fund may invest a considerable portion of its assets in certain municipalities. As of March 31, 2022, the Fund has invested 59.61%, 26.04%, and 19.16% (each as a percentage of net assets) in securities issued by the State of Colorado, the State of Minnesota, and the Commonwealth of Puerto Rico, respectively. These investments could make the Fund more sensitive to economic conditions in those states than other more geographically diversified national municipal income funds. For a complete list of the Fund's holdings by state/territory, please see page 7.
The Fund may invest a percentage of assets in obligations of governments of US territories, commonwealths, and possessions such as Puerto Rico, the US Virgin Islands, or Guam. To the extent the Fund invests in such obligations, the Fund may be adversely affected by local political and economic conditions and developments within these US territories, commonwealths, and possessions.
From time to time, the Fund may invest in industrial development bonds (IDBs) or pollution control revenue (PCR) bonds that are issued by a conduit authority on behalf of a corporation that is either foreign owned or has international affiliates or operations. While the bonds may be issued to finance a facility located in the United States, the bonds may be secured by a payment obligation or guaranty of the corporation. To the extent the Fund invests in such securities, that Fund may be exposed to risks associated with international investments. The risk of international investments not ordinarily associated with US investments includes fluctuation in currency values, differences in accounting principles, and/or economic or political instability in other nations.
In particular, there recently has been speculation that due to a weak economic outlook, high government debt levels, and credit rating downgrades by S&P and Moody’s, Puerto Rican debt obligations may be subject to a greater risk of default. In striving to manage geographic concentration risk for a Fund, DMC carefully monitors the economies of each state, region, and US territory and possession in which the Fund invests or may invest. In general, DMC believes these economies are broad enough to satisfy the Fund’s investment needs. However, there is no way to eliminate this risk when investing with a concentration in certain geographic areas.
The Fund invests a portion of its assets in high yield fixed income securities, which are securities rated BB or lower by Standard & Poor’s (S&P) and/or Ba or lower by Moody’s, or similarly rated by another nationally recognized statistical rating organization. Investments in these higher yielding securities are generally accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.
The Fund may invest in advance refunded bonds, escrow secured bonds, or defeased bonds. Under current federal tax laws and regulations, state and local government borrowers are permitted to refinance outstanding bonds by issuing new bonds. The issuer refinances the outstanding debt to either reduce interest costs or to remove or alter restrictive covenants imposed by the bonds being refinanced. A refunding transaction where the municipal securities are being refunded within 90 days from the issuance of the refunding issue is known as a “current refunding.” Advance refunded bonds are bonds in which the refunded bond issue remains outstanding for more than 90 days following the issuance of the refunding issue. In an advance refunding, the issuer will use the proceeds of a new bond issue to purchase high-grade interest-bearing debt securities, which are then deposited in an irrevocable escrow account held by an escrow agent to secure all future
34
payments of principal and interest and bond premium of the advance refunded bond. Bonds are “escrowed to maturity” when the proceeds of the refunding issue are deposited in an escrow account for investment sufficient to pay all of the principal and interest on the original interest payment and maturity dates.
Bonds are considered “pre-refunded” when the refunding issue’s proceeds are escrowed only until a permitted call date or dates on the refunded issue with the refunded issue being redeemed at the time, including any required premium. Bonds become “defeased” when the rights and interests of the bondholders and of their lien on the pledged revenues or other security under the terms of the bond contract are substituted with an alternative source of revenues (the escrow securities) sufficient to meet payments of principal and interest to maturity or to the first call dates. Escrowed secured bonds will often receive a rating of AAA from Moody’s, S&P, and/or Fitch Ratings due to the strong credit quality of the escrow securities and the irrevocable nature of the escrow deposit agreement.
To the extent that the Fund invests in securities with longer duration, it may be more sensitive to fluctuation of interest rates.
The Fund invests in certain obligations that may have liquidity protection designed to ensure that the receipt of payments due on the underlying security is timely. Such protection may be provided through guarantees, insurance policies, or letters of credit obtained by the issuer or sponsor from third parties, through various means of structuring the transaction, or through a combination of such approaches. The Fund will not pay any additional fees for such credit support, although the existence of credit support may increase the price of a security.
The Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A promulgated under the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair the Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Board has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Fund’s limitation on investments in illiquid securities. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to the Fund’s 15% limit on investments in illiquid securities. Rule 144A securities held by the Fund have been identified on the “Schedule of investments.”
9. Contractual Obligations
The Fund enters into contracts in the normal course of business that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed the Fund's existing contracts and expects the risk of loss to be remote.
10. Recent Accounting Pronouncements
In March 2020, FASB issued an Accounting Standards Update (ASU), ASU 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in ASU 2020-04 provide optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of LIBOR and other interbank-offered based reference rates as of the end of 2021. ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. As of the financial reporting period, Management is evaluating the impact of applying this ASU.
11. Subsequent Events
Management has determined that no material events or transactions occurred subsequent to March 31, 2022, that would require recognition or disclosure in the Fund's financial statements.
35
Report of independent
registered public accounting firm
To the Board of Trustees and Shareholders of Delaware Investments® National Municipal Income Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Delaware Investments® National Municipal Income Fund (the “Fund”) as of March 31, 2022, the related statements of operations and cash flows for the year ended March 31, 2022, the statements of changes in net assets for each of the two years in the period ended March 31, 2022, including the related notes, and the financial highlights for each of the five years in the period ended March 31, 2022 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of March 31, 2022, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period ended March 31, 2022 and the financial highlights for each of the five years in the period ended March 31, 2022 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2022 by correspondence with the custodian, transfer agents and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
May 31, 2022
We have served as the auditor of one or more investment companies in Delaware Funds by Macquarie® since 2010.
36
Other Fund information (Unaudited)
Tax Information (Unaudited)
The information set forth below is for the Fund’s fiscal year as required by federal income tax laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of a fund. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in January of each year. Please consult your tax advisor for proper treatment of this information.
All disclosures are based on financial information available as of the date of this annual report and, accordingly are subject to change. For any and all items requiring reporting, it is the intention of the Fund to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.
For the year ended March 31, 2022, the Fund reported distributions paid during the year as follows:
| (A) | (B) | |||||||
| Long-Term | Ordinary | (C) | ||||||
| Capital Gains | Income | Tax-Exempt | Total | |||||
| Distributions | Distributions | Distributions | Distributions | |||||
| (Tax Basis) | (Tax Basis) | (Tax Basis) | (Tax Basis) | |||||
| 10.28% | 0.01% | 89.71% | 100.00% |
(A), (B), and (C) are based on a percentage of the Fund’s total distributions.
Fund management
Gregory A. Gizzi
Managing Director, Head of Municipal Bonds, Senior Portfolio Manager
Gregory A. Gizzi is head of municipal bonds for Macquarie Asset Management Fixed Income (MFI) in the Americas, a role he assumed in February 2019. In this role, he is responsible for the overall operation of the strategy and is team lead on several of the tax-exempt strategies. Additionally, Gizzi continues to be responsible for MFI’s taxable municipal business and the marketing efforts for the municipal product. Previously, Gizzi was co-portfolio manager of the firm’s municipal bond funds and several client accounts, a role he held since November 2011. Before joining Macquarie Asset Management in January 2008 as head of municipal bond trading, he spent six years as a vice president at Lehman Brothers for the firm’s tax-exempt institutional sales effort. Prior to that, he spent two years trading corporate bonds for UBS before joining Lehman Brothers in a sales capacity. Gizzi has more than 20 years of trading experience in the municipal securities industry, beginning at Kidder Peabody in 1984, where he started as a municipal bond trader and worked his way up to institutional block trading desk manager. He later worked in the same capacity at Dillon Read. Gizzi earned his bachelor’s degree in economics from Harvard University.
Stephen J. Czepiel
Managing Director, Head of Municipal Bonds Portfolio Management, Senior Portfolio Manager
Stephen J. Czepiel leads the portfolio management of the firm’s municipal bonds strategies for Macquarie Asset Management Fixed Income (MFI) in the Americas, a role he assumed in February 2019. He is a co-portfolio manager of the firm’s municipal bond funds and client accounts, a role he has held since August 2007. He joined Macquarie Asset Management in July 2004 as a senior bond trader. Previously, he was vice president at both Mesirow Financial and Loop Capital Markets. He began his career in the securities industry in 1982 as a municipal bond trader at Kidder Peabody and now has more than 20 years of experience in the municipal securities industry. Czepiel earned his bachelor’s degree in finance and economics from Duquesne University.
Jake van Roden
Managing Director, Senior Portfolio Manager
Jake van Roden is a member of the municipal bond department within Macquarie Asset Management Fixed Income (MFI) in the Americas. He is a portfolio manager for MFI’s nine open-end state-specific municipal bond funds, as well as for several municipal bond client accounts, a role he assumed in December 2017. In February 2019, his portfolio management role expanded to include MFI’s closed-end municipal bond funds and the three national municipal open-end funds. He joined the municipal department in July 2004 as a generalist and became head of municipal
37
Other Fund information (Unaudited)
Fund management (continued)
trading in December 2012. Before that, van Roden interned at Macquarie Asset Management in the client services department. He received a bachelor’s degree in American studies with a minor in government from Franklin & Marshall College.
Fund strategies and risks
What are the Fund’s principal investment strategies?
The Fund seeks to achieve its investment objective by investing under normal circumstances, substantially all (at least 80%) of its net assets in “Municipal Obligations.” “Municipal Obligations” are debt obligations issued by or on behalf of a state or territory or its agencies, instrumentalities, municipalities and political subdivisions, the interest payable on which is, in the opinion of bond counsel, excludable from gross income for purposes of federal income taxation (except, in certain instances, the alternative minimum tax, depending upon the shareholder’s tax status). The Fund may invest up to 20% of the Fund’s assets in securities that generate interest that is subject to federal alternative minimum tax (“AMT”). The Fund may invest without limitation in uninsured, “investment grade” Municipal Obligations. “Investment grade” means that, at the time of investment, a Municipal Obligation has a credit rating of at least Baa by Moody’s, or BBB by Standard & Poor’s Financial Services LLC (“S&P”), or is unrated but judged by the Manager, to be of comparable quality. The Fund may invest up to 20% of its net assets in Municipal Obligations that are rated below investment grade or that are unrated but judged by the Manager to be of comparable quality.
The Manager analyzes economic and market conditions, seeking to identify the securities or market sectors that the Manager thinks are the best investments for the Fund. The Fund generally invests in debt obligations issued by state and local governments and their political subdivisions, agencies, authorities, and instrumentalities that are exempt from federal income tax. The Fund may also invest in debt obligations issued by or for the District of Columbia, and its political subdivisions, agencies, authorities, and instrumentalities or territories and possessions of the United States that are exempt from federal income tax.
The Fund will generally invest in securities for income rather than seeking capital appreciation through active trading. However, the Fund may sell securities for a variety of reasons, such as to reinvest the proceeds in higher yielding securities, to eliminate investments not consistent with the preservation of capital, to fund tender offers, or to address a weakening credit situation.
The Fund invests its assets in securities with maturities of various lengths, depending on market conditions, but will have a dollar-weighted average effective maturity of between 20 and 30 years. The Manager will adjust the average maturity of the bonds in the Fund’s portfolio to attempt to provide a current tax-exempt income, consistent with preservation of capital. The Fund may focus its investments in certain types of bonds or in a certain segment of the municipal bond market when the supply of bonds in other sectors do not suit its investment needs.
The Fund may invest without limitation in general obligation bonds in the top four quality grades or bonds that are unrated, but which the Manager determines to be of equal quality. The Fund may invest without limitation in revenue bonds in the top four quality grades or bonds that are unrated, but which the Manager determines to be of equal quality.
The Fund may invest without limitation in insured Municipal Obligations. In addition, insurance is available on uninsured bonds and the Fund may purchase such insurance directly. The Manager will generally do so only if it believes that purchasing and insuring a Municipal Obligation provides an investment opportunity at least comparable to owning other available insured Municipal Obligations.
Private activity or private placement bonds are municipal bond issues whose proceeds are used to finance certain nongovernment activities, including some types of industrial revenue bonds such as privately owned sports and convention facilities. The Tax Reform Act of 1986 subjects interest income from these bonds to the federal alternative minimum tax and makes the tax-exempt status of certain bonds dependent on the issuer’s compliance with specific requirements after the bonds are issued. As described above, the Fund may invest up to 20% of its assets in bonds whose income is subject to the federal alternative minimum tax. This means that a portion of the Fund’s distributions could be subject to the federal alternative minimum tax that applies to certain taxpayers.
The Fund may invest without limit in advance refunded bonds.
The Fund may invest without limitation in high-quality, short-term tax-free instruments.
38
The Fund may invest in privately placed securities, including those that are eligible for resale only among certain institutional buyers without registration, commonly known as “Rule 144A Securities.” Restricted securities that are determined to be illiquid may not exceed the Fund’s 15% limit on investments in illiquid securities.
The Fund may invest without limitation in municipal lease obligations, primarily through certificates of participation rated in the top four quality grades by S&P or another nationally recognized statistical rating agency. As with the Fund’s other investments, the Manager expects that investments in municipal lease obligations will be exempt from regular federal income taxes. The Fund will rely on the opinion of the bond issuer’s counsel for a determination of the bond’s tax-exempt status.
The Fund may invest in zero coupon bonds.
Credit quality restrictions for the Fund apply only at the time of purchase. The Fund may continue to hold a security whose quality rating has been lowered or, in the case of an unrated bond, after the Manager has changed its assessment of its credit quality.
The Fund may buy or sell securities on a when-issued or delayed-delivery basis; that is, paying for securities before delivery or taking delivery at a later date. The Fund will designate cash or securities in amounts sufficient to cover its obligations, and will value the designated assets daily.
Where the Manager feels there is a limited supply of appropriate investments, the Fund may invest more than 25% of its total assets in Municipal Obligations relating to similar types of projects or with other similar economic, business, or political characteristics (such as bonds of housing finance agencies or healthcare facilities). In addition, the Fund may invest more than 25% of its assets in industrial development bonds or, in the case of the Fund, pollution control bonds, which may be backed only by the assets and revenues of a nongovernmental issuer. The Fund will not, however, invest more than 25% of its total assets in bonds issued for companies in the same business sector.
The Fund may borrow money from banks as a temporary measure for extraordinary or emergency purposes but normally does not do so. The Fund will not borrow money in excess of one-third of the value of its assets.
In response to unfavorable market conditions, the Fund may invest in taxable instruments for temporary defensive purposes. These could include obligations of the US government, its agencies and instrumentalities, commercial paper, cash, certificates of deposit of domestic banks, repurchase agreements, reverse repurchase agreements, other cash equivalents, and other debt instruments. These investments may not be consistent with the Fund’s investment objective. To the extent that the Fund holds such investments, it may be unable to achieve its investment objective.
What are the principal risks of investing in the Fund?
Investing in any closed-end fund involves the risk that you may lose part or all of the money you invest. Over time, the value of your investment in the Fund will increase and decrease according to changes in the value of the securities in the Fund’s portfolio. An investment in the Fund may not be appropriate for all investors. The Fund’s principal risks include:
Net asset value discount risk — The risk that a closed-end investment company will trade at a discount from its net asset value (NAV).
Market risk — The risk that all or a majority of the securities in a certain market—such as the stock or bond market—will decline in value because of factors such as adverse political or economic conditions, future expectations, investor confidence, or heavy institutional selling.
Interest rate risk — The risk that the prices of bonds and other fixed income securities will increase as interest rates fall and decrease as interest rates rise. Interest rate changes are influenced by a number of factors, such as government policy, monetary policy, inflation expectations, and the supply and demand of bonds. Bonds and other fixed income securities with longer maturities or duration generally are more sensitive to interest rate changes. A fund may be subject to a greater risk of rising interest rates due to the current period of historically low interest rates.
Security risk — The risk that the value of an individual stock or bond will decline because of changing expectations for the performance of the individual company issuing the stock or bond (due to situations that could range from decreased sales to events such as a pending merger or actual or threatened bankruptcy).
High yield (junk bond) risk — The risk that high yield securities, commonly known as “junk bonds,” are subject to reduced creditworthiness of issuers, increased risk of default, and a more limited and less liquid secondary market. High yield securities may also be subject to greater price
39
Other Fund information (Unaudited)
Fund management (continued)
volatility and risk of loss of income and principal than are higher-rated securities. High yield bonds are sometimes issued by municipalities that have less financial strength and therefore have less ability to make projected debt payments on the bonds.
Industry and sector risk — The risk that the value of securities in a particular industry or sector will decline because of changing expectations for the performance of that industry or sector.
Geographic concentration risk — The risk that heightened sensitivity to regional, state, US territories or possessions (such as the Commonwealth of Puerto Rico, Guam, or the US Virgin Islands), and local political and economic conditions could adversely affect the holdings in and performance of a fund. There is also the risk that there could be an inadequate supply of municipal bonds in a particular state or US territory or possession. For a further discussion of geographic, credit and market risks, see Note 8 in “Notes to financial statements.”
Credit risk — The risk that an issuer of a debt security, including a governmental issuer or an entity that insures a bond, may be unable to make interest payments and/or repay principal in a timely manner.
Leveraging risk — The risk that certain fund transactions, such as the issuance of preferred shares, may give rise to leverage, causing a fund to be more volatile than if it had not been leveraged, which may result in increased losses to the fund.
Call risk — The risk that a bond issuer will prepay the bond during periods of low interest rates, forcing a fund to reinvest that money at interest rates that might be lower than rates on the called bond.
Alternative minimum tax risk — If a fund invests in bonds whose income is subject to the alternative minimum tax, that portion of the fund’s distributions would be taxable for shareholders who are subject to this tax.
Government and regulatory risk — The risk that governments or regulatory authorities may take actions that could adversely affect various sectors of the securities markets and affect fund performance. For example, a tax-exempt security may be reclassified by the Internal Revenue Service or a state tax authority as taxable, and/or future legislative, administrative, or court actions could cause interest from a tax-exempt security to become taxable, possibly retroactively.
Liquidity risk — The possibility that investments cannot be readily sold within seven calendar days at approximately the price at which a fund has valued them.
IBOR risk — The risk that changes related to the use of the London Interbank Offered Rate (LIBOR) or similar interbank offered rates (“IBORs,” such as the Euro Overnight Index Average (EONIA)) could have adverse impacts on financial instruments that reference LIBOR or a similar rate. While some instruments may contemplate a scenario where LIBOR or a similar rate is no longer available by providing for an alternative rate setting methodology, not all instruments have such fallback provisions and the effectiveness of replacement rates is uncertain. The abandonment of LIBOR and similar rates could affect the value and liquidity of instruments that reference such rates, especially those that do not have fallback provisions. The use of alternative reference rate products may impact investment strategy performance.
Active management and selection risk — The risk that the securities selected by a fund’s management will underperform the markets, the relevant indices, or the securities selected by other funds with similar investment objectives and investment strategies. The securities and sectors selected may vary from the securities and sectors included in the relevant index.
40
Board of trustees / directors and officers addendum
Delaware Funds by Macquarie®
A mutual fund is governed by a Board of Trustees (“Trustees”), which has oversight responsibility for the management of a fund’s business affairs. Trustees establish procedures and oversee and review the performance of the investment manager and others who perform services for the fund. The independent fund trustees, in particular, are advocates for shareholder interests. Each trustee has served in that capacity since he or she was elected to or appointed to the Board of Trustees, and will continue to serve until his or her retirement or the election of a new trustee in his or her place. The following is a list of the Trustees and Officers with certain background and related information.
| Number of | Other | |||||||||
| Principal | Portfolios in Fund | Directorships | ||||||||
| Name, | Position(s) | Occupation(s) | Complex Overseen | Held by | ||||||
| Address, | Held with | Length of Time | During the | by Trustee | Trustee | |||||
| and Birth Date | Fund(s) | Served | Past Five Years | or Officer | or Officer | |||||
| Interested Trustee | ||||||||||
| Shawn K. Lytle1 | President, | President and | Global Head of Macquarie Asset Management2 | 146 | Trustee — UBS | |||||
| 610 Market Street | Chief Executive Officer, | Chief Executive Officer | (January 2019–Present) | Relationship Funds, SMA | ||||||
| Philadelphia, PA | and Trustee | since August 2015 | Head of Americas of | Relationship Trust, and | ||||||
| 19106-2354 | Trustee since | Macquarie Group | UBS Funds | |||||||
| February 1970 | September 2015 | (December 2017–Present) | (May 2010–April 2015) | |||||||
| Deputy Global Head of Macquarie Asset | ||||||||||
| Management | ||||||||||
| (2017–2019) | ||||||||||
| Head of Macquarie Asset Management | ||||||||||
| Americas | ||||||||||
| (2015–2017) | ||||||||||
| Independent Trustees | ||||||||||
| Jerome D. Abernathy | Trustee | Since January 2019 | Managing Member, Stonebrook Capital | 146 | None | |||||
| 610 Market Street | Management, LLC (financial | |||||||||
| Philadelphia, PA | technology: macro factors and databases) | |||||||||
| 19106-2354 | (January 1993-Present) | |||||||||
| July 1959 | ||||||||||
| Thomas L. Bennett | Chair and Trustee | Trustee since March | Private Investor | 146 | None | |||||
| 610 Market Street | 2005 | (March 2004–Present) | ||||||||
| Philadelphia, PA | Chair since March 2015 | |||||||||
| 19106-2354 | ||||||||||
| October 1947 | ||||||||||
| Ann D. Borowiec | Trustee | Since March 2015 | Chief Executive Officer, Private Wealth | 146 | Director — Banco | |||||
| 610 Market Street | Management (2011–2013) and Market | Santander International | ||||||||
| Philadelphia, PA | Manager, New Jersey Private Bank (2005– | (October 2016–December | ||||||||
| 19106-2354 | 2011) — J.P. Morgan Chase & Co. | 2019) | ||||||||
| November 1958 | Director — Santander | |||||||||
| Bank, N.A. (December | ||||||||||
| 2016–December 2019) | ||||||||||
| Joseph W. Chow | Trustee | Since January 2013 | Private Investor | 146 | Director and Audit | |||||
| 610 Market Street | (April 2011–Present) | Committee Member — | ||||||||
| Philadelphia, PA | Hercules Technology | |||||||||
| 19106-2354 | Growth Capital, Inc. | |||||||||
| January 1953 | (July 2004–July 2014) |
41
Board of trustees / directors and officers addendum
Delaware Funds by Macquarie®
| Number of | Other | |||||||||
| Principal | Portfolios in Fund | Directorships | ||||||||
| Name, | Position(s) | Occupation(s) | Complex Overseen | Held by | ||||||
| Address, | Held with | Length of Time | During the | by Trustee | Trustee | |||||
| and Birth Date | Fund(s) | Served | Past Five Years | or Officer | or Officer | |||||
| H. Jeffrey Dobbs3 | Trustee | Since April 2021 | Global Sector Chairman, Industrial | 146 | Director, Valparaiso | |||||
| 610 Market Street | Manufacturing, KPMG LLP | University | ||||||||
| Philadelphia, PA | (2010–2015) | (2012–Present) | ||||||||
| 19106-2354 | Director, TechAccel LLC | |||||||||
| May 1955 | (2015–Present) (Tech | |||||||||
| R&D) | ||||||||||
| Board Member, Kansas | ||||||||||
| City Repertory Theatre | ||||||||||
| (2015–Present) | ||||||||||
| Board Member, | ||||||||||
| PatientsVoices, Inc. | ||||||||||
| (healthcare) | ||||||||||
| (2018–Present) | ||||||||||
| Kansas City Campus for | ||||||||||
| Animal Care | ||||||||||
| (2018–Present) | ||||||||||
| Director, National | ||||||||||
| Association of | ||||||||||
| Manufacturers | ||||||||||
| (2010–2015) | ||||||||||
| Director, The Children’s | ||||||||||
| Center | ||||||||||
| (2003-2015) | ||||||||||
| Director, Metropolitan | ||||||||||
| Affairs Coalition | ||||||||||
| (2003–2015) | ||||||||||
| Director, Michigan | ||||||||||
| Roundtable for Diversity | ||||||||||
| and Inclusion | ||||||||||
| (2003–2015) | ||||||||||
| Trustee, Ivy Funds | ||||||||||
| Complex | ||||||||||
| (2019–2021) | ||||||||||
| John A. Fry | Trustee | Since January 2001 | President — Drexel University | 146 | Director; Compensation | |||||
| 610 Market Street | (August 2010–Present) | Committee and | ||||||||
| Philadelphia, PA | President — Franklin & Marshall College | Governance Committee | ||||||||
| 19106-2354 | (July 2002–June 2010) | Member — Community | ||||||||
| }May 1960 | Health Systems | |||||||||
| (May 2004–Present) | ||||||||||
| Director — Drexel Morgan | ||||||||||
| & Co. (2015–2019) | ||||||||||
| Director, Audit and | ||||||||||
| Compensation Committee | ||||||||||
| Member — vTv | ||||||||||
| Therapeutics Inc. | ||||||||||
| (2017–Present) | ||||||||||
| Director and Audit | ||||||||||
| Committee Member — FS | ||||||||||
| Credit Real Estate Income | ||||||||||
| Trust, Inc. (2018–Present) | ||||||||||
| Director — Federal | ||||||||||
| Reserve | ||||||||||
| Bank of Philadelphia | ||||||||||
| (January 2020–Present) |
42
| Number of | Other | |||||||||
| Principal | Portfolios in Fund | Directorships | ||||||||
| Name, | Position(s) | Occupation(s) | Complex Overseen | Held by | ||||||
| Address, | Held with | Length of Time | During the | by Trustee | Trustee | |||||
| and Birth Date | Fund(s) | Served | Past Five Years | or Officer | or Officer | |||||
| Joseph Harroz, Jr.3 | Trustee | Since April 2021 | President (2020–Present), Interim President | 146 | Director, OU Medicine, Inc | |||||
| 610 Market Street | (2019–2020), Vice President (2010–2019) and | (2020–Present) | ||||||||
| Philadelphia, PA | Dean, College of Law (2010–2019), University | Director and Shareholder, | ||||||||
| 19106-2354 | of Oklahoma; Managing Member, Harroz | Valliance Bank | ||||||||
| January 1967 | Investments, LLC, (commercial enterprises) | (2007–Present) | ||||||||
| (1998–2019); Managing Member, St. Clair, | Director, Foundation | |||||||||
| LLC (commercial enterprises) (2019–Present) | Healthcare (formerly | |||||||||
| Graymark HealthCare) | ||||||||||
| (2008–2017) | ||||||||||
| Trustee, the Mewbourne | ||||||||||
| Family Support | ||||||||||
| Organization (2006–- | ||||||||||
| Present) (non-profit) | ||||||||||
| Independent Director, LSQ | ||||||||||
| Manager, Inc. (real estate) | ||||||||||
| (2007–2016) | ||||||||||
| Director, Oklahoma | ||||||||||
| Foundation for Excellence | ||||||||||
| (non-profit) | ||||||||||
| (2008–Present) | ||||||||||
| Trustee, Ivy Funds | ||||||||||
| Complex (1998–2021) |
43
Board of trustees / directors and officers addendum
Delaware Funds by Macquarie®
| Number of | Other | |||||||||
| Principal | Portfolios in Fund | Directorships | ||||||||
| Name, | Position(s) | Occupation(s) | Complex Overseen | Held by | ||||||
| Address, | Held with | Length of Time | During the | by Trustee | Trustee | |||||
| and Birth Date | Fund(s) | Served | Past Five Years | or Officer | or Officer | |||||
| Sandra A.J. Lawrence3 | Trustee | Since April 2021 | Chief Administrative Officer, Children’s Mercy | 146 | Director, Hall Family | |||||
| 610 Market Street | Hospitals and Clinics (2016–2019); CFO, | Foundation | ||||||||
| Philadelphia, PA | Children’s Mercy Hospitals and Clinics (2005– | (1993–Present) | ||||||||
| 19106-2354 | 2016) | Director, Westar Energy | ||||||||
| September 1957 | (utility) (2004–2018) | |||||||||
| Trustee, Nelson-Atkins | ||||||||||
| Museum of Art (non-profit) | ||||||||||
| (2021–Present) | ||||||||||
| (2007–2020) | ||||||||||
| Director, Turn the Page | ||||||||||
| KC (non-profit) | ||||||||||
| (2012–2016) | ||||||||||
| Director, Kansas | ||||||||||
| Metropolitan Business and | ||||||||||
| Healthcare Coalition (non- | ||||||||||
| profit) (2017–2019) | ||||||||||
| Director, National | ||||||||||
| Association of Corporate | ||||||||||
| Directors (non-profit) | ||||||||||
| National Board (2022- | ||||||||||
| Present); Regional Board | ||||||||||
| (2017–2021) | ||||||||||
| Director, American Shared | ||||||||||
| Hospital Services (medical | ||||||||||
| device) (2017–2021) | ||||||||||
| Director, Evergy, Inc., | ||||||||||
| Kansas City Power & Light | ||||||||||
| Company, KCP&L Greater | ||||||||||
| Missouri Operations | ||||||||||
| Company, Westar Energy, | ||||||||||
| Inc. and Kansas Gas and | ||||||||||
| Electric Company (related | ||||||||||
| utility companies) | ||||||||||
| (2018–Present) | ||||||||||
| Director, Stowers | ||||||||||
| (research) (2018) | ||||||||||
| Co-Chair, Women | ||||||||||
| Corporate Directors | ||||||||||
| (director education) | ||||||||||
| (2018–2020) | ||||||||||
| Trustee, Ivy Funds | ||||||||||
| Complex (2019–2021) | ||||||||||
| Director, Brixmor Property | ||||||||||
| Group Inc. (2021–Present) | ||||||||||
| Director, Sera | ||||||||||
| Prognostics Inc. | ||||||||||
| (biotechnology) | ||||||||||
| (2021–Present) | ||||||||||
| Director, Recology | ||||||||||
| (resource recovery) | ||||||||||
| (2021–Present) | ||||||||||
44
| Number of | Other | |||||||||
| Principal | Portfolios in Fund | Directorships | ||||||||
| Name, | Position(s) | Occupation(s) | Complex Overseen | Held by | ||||||
| Address, | Held with | Length of Time | During the | by Trustee | Trustee | |||||
| and Birth Date | Fund(s) | Served | Past Five Years | or Officer | or Officer | |||||
| Frances A. | Trustee | Since September 2011 | Private Investor | 146 | Trust Manager and Audit | |||||
| Sevilla-Sacasa | (January 2017–Present) | Committee Chair — | ||||||||
| 610 Market Street | Chief Executive Officer — Banco Itaú | Camden Property Trust | ||||||||
| Philadelphia, PA | International | (August 2011–Present) | ||||||||
| 19106-2354 | (April 2012–December 2016) | Director; Audit | ||||||||
| January 1956 | Executive Advisor to Dean (August 2011– | and Compensation | ||||||||
| March 2012) and Interim Dean | Committee Member — | |||||||||
| (January 2011–July 2011) — University of | Callon Petroleum | |||||||||
| Miami School of Business Administration | Company | |||||||||
| President — U.S. Trust, Bank of America | (December 2019–Present) | |||||||||
| Private Wealth Management (Private Banking) | Director — New Senior | |||||||||
| (July 2007-December 2008) | Investment Group Inc. | |||||||||
| (January 2021–September | ||||||||||
| 2021) | ||||||||||
| Director; Audit Committee | ||||||||||
| Member — Carrizo Oil & | ||||||||||
| Gas, Inc. (March 2018– | ||||||||||
| December 2019) | ||||||||||
| Thomas K. Whitford | Trustee | Since January 2013 | Vice Chairman — PNC | 146 | Director — HSBC North | |||||
| 610 Market Street | Financial Services Group | America Holdings Inc. | ||||||||
| Philadelphia, PA | (2010–April 2013) | (December 2013–Present) | ||||||||
| 19106-2354 | Director — HSBC | |||||||||
| March 1956 | USA Inc. | |||||||||
| (July 2014–Present) | ||||||||||
| Director — HSBC Bank | ||||||||||
| USA, National Association | ||||||||||
| (July 2014–March 2017) | ||||||||||
| Director — HSBC Finance | ||||||||||
| Corporation | ||||||||||
| (December 2013–April | ||||||||||
| 2018) | ||||||||||
45
Board of trustees / directors and officers addendum
Delaware Funds by Macquarie®
| Number of | Other | |||||||||
| Principal | Portfolios in Fund | Directorships | ||||||||
| Name, | Position(s) | Occupation(s) | Complex Overseen | Held by | ||||||
| Address, | Held with | Length of Time | During the | by Trustee | Trustee | |||||
| and Birth Date | Fund(s) | Served | Past Five Years | or Officer | or Officer | |||||
| Christianna Wood | Trustee | Since January 2019 | Chief Executive Officer and | 146 | Director; Finance | |||||
| 610 Market Street | President — Gore Creek Capital, Ltd. | Committee and Audit | ||||||||
| Philadelphia, PA | (August 2009–Present) | Committee Member — | ||||||||
| 19106-2354 | H&R Block Corporation | |||||||||
| August 1959 | (July 2008–Present) | |||||||||
| Director; Investments | ||||||||||
| Committee, Capital and | ||||||||||
| Finance Committee, and | ||||||||||
| Audit Committee Member | ||||||||||
| — Grange Insurance | ||||||||||
| (2013–Present) | ||||||||||
| Trustee; Chair of | ||||||||||
| Nominating and | ||||||||||
| Governance Committee | ||||||||||
| and Audit Committee | ||||||||||
| Member — The Merger | ||||||||||
| Fund (2013–October | ||||||||||
| 2021), The Merger Fund | ||||||||||
| VL (2013–October 2021); | ||||||||||
| WCM Alternatives: Event- | ||||||||||
| Driven Fund (2013– | ||||||||||
| October 2021), and WCM | ||||||||||
| Alternatives: Credit Event | ||||||||||
| Fund (December 2017– | ||||||||||
| October 2021) | ||||||||||
| Director; Chair of | ||||||||||
| Governance Committee | ||||||||||
| and Audit Committee | ||||||||||
| Member — International | ||||||||||
| Securities Exchange | ||||||||||
| (2010–2016) | ||||||||||
| Janet L. Yeomans | Trustee | Since April 1999 | Vice President and Treasurer (January 2006– | 146 | Director; Personnel and | |||||
| 610 Market Street | July 2012), Vice President — Mergers & | Compensation Committee | ||||||||
| Philadelphia, PA | Acquisitions | Chair; Member of | ||||||||
| 19106-2354 | (January 2003–January 2006), and Vice | Nominating, Investments, | ||||||||
| July 1948 | President and Treasurer | and Audit Committees for | ||||||||
| (July 1995–January 2003) — 3M Company | various periods throughout | |||||||||
| directorship — Okabena | ||||||||||
| Company (2009–2017) | ||||||||||
| Officers | ||||||||||
| David F. Connor | Senior Vice President, | Senior Vice President, | David F. Connor has served in various | 146 | None4 | |||||
| 610 Market Street | General Counsel, and | since May 2013; General | capacities at different times at Macquarie Asset | |||||||
| Philadelphia, PA | Secretary | Counsel since May | Management. | |||||||
| 19106-2354 | 2015; Secretary since | |||||||||
| December 1963 | October 2005 | |||||||||
| Daniel V. Geatens | Senior Vice President | Senior Vice President | Daniel V. Geatens has served in various | 146 | None4 | |||||
| 610 Market Street | and Treasurer | and Treasurer since | capacities at different times at Macquarie Asset | |||||||
| Philadelphia, PA | October 2007 | Management. | ||||||||
| 19106-2354 | ||||||||||
| October 1972 | ||||||||||
| Richard Salus | Senior Vice President | Senior Vice President | Richard Salus has served in various capacities | 146 | None | |||||
| 610 Market Street | and Chief Financial | and Chief Financial | at different times at Macquarie Asset | |||||||
| Philadelphia, PA | Officer | Officer since November | Management. | |||||||
| 19106-2354 | 2006 | |||||||||
| October 1963 | ||||||||||
| 1 | Shawn K. Lytle is considered to be an “Interested Trustee” because he is an executive officer of the Manager. |
| 2 | Macquarie Asset Management is the marketing name for certain companies comprising the asset management division of Macquarie Group, including the Fund's Manager, principal underwriter, and transfer agent. |
46
| 3 | Messrs. Dobbs and Harroz and Ms. Lawrence were appointed as Trustees of the Trust effective April 30, 2021. |
| 4 | David F. Connor and Daniel V. Geatens serve in similar capacities for the six portfolios of the Optimum Fund Trust, which have the same investment manager, principal underwriter, and transfer agent as the Fund. Mr. Geatens also serves as the Chief Financial Officer of the Optimum Fund Trust, and he is the Chief Financial Officer and Treasurer for Macquarie Global Infrastructure Total Return Fund Inc., which has the same investment manager as the Fund. |
47
This annual report is for the information of Delaware Investments® National Municipal Income Fund shareholders.
Board of directors/trustees Shawn K. Lytle Jerome D. Abernathy Thomas L. Bennett Ann D. Borowiec Joseph W. Chow H. Jeffrey Dobbs* John A. Fry* Joseph Harroz, Jr. Sandra A.J. Lawrence* * Audit committee member | Frances A. Sevilla-Sacasa* Thomas K. Whitford Christianna Wood Janet L. Yeomans Affiliated officers David F. Connor Daniel V. Geatens Richard Salus Investment manager Principal office of the Fund Independent registered public | Registrar and stock transfer agent For securities dealers and financial Website Number of recordholders as of Your reinvestment options The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT. The Fund’s Forms N-PORT, as well as a description of the policies and procedures that the Fund uses to determine how to vote proxies (if any) relating to portfolio securities, are available without charge (i) upon request, by calling 866 437-0252; and (ii) on the SEC’s website at sec.gov. In addition, a description of the policies and procedures that the Fund uses to determine how to vote proxies (if any) relating to portfolio securities and the Schedules of Investments included in the Fund's most recent Forms N-PORT are available without charge on the Fund's website at delawarefunds.com/closed-end. The Fund’s Forms N-PORT may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330. Information (if any) regarding how the Fund voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Fund's website at delawarefunds.com/proxy; and (ii) on the SEC’s website at sec.gov. |
48
Item 2. Code of Ethics
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. A copy of the registrant’s Code of Business Ethics has been posted on the Delaware Funds by Macquarie® Internet Web site at www.delawarefunds.com. Any amendments to the Code of Business Ethics, and information on any waiver from its provisions granted by the registrant, will also be posted on this Web site within five business days of such amendment or waiver and will remain on the Web site for at least 12 months.
Item 3. Audit Committee Financial Expert
The registrant’s Board of Trustees has determined that certain members of the registrant’s Audit Committee are audit committee financial experts, as defined below. For purposes of this item, an “audit committee financial expert” is a person who has the following attributes:
a. An understanding of generally accepted accounting principles and financial statements;
b. The ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves;
c. Experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements, or experience actively supervising one or more persons engaged in such activities;
d. An understanding of internal controls and procedures for financial reporting; and
e. An understanding of audit committee functions.
An “audit committee financial expert” shall have acquired such attributes through:
a. Education and experience as a principal financial officer, principal accounting officer, controller, public accountant, or auditor or experience in one or more positions that involve the performance of similar functions;
b. Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor, or person performing similar functions;
c. Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing, or evaluation of financial statements; or
d. Other relevant experience.
The registrant’s Board of Trustees has also determined that each member of the registrant’s Audit Committee is independent. In order to be “independent” for purposes of this item, the Audit Committee member may not: (i) other than in his or her capacity as a member of the Board of Trustees or any committee thereof, accept directly or indirectly any consulting, advisory or other compensatory fee from the issuer; or (ii) be an “interested person” of the registrant as defined in Section 2(a)(19) of the Investment Company Act of 1940.
The names of the audit committee financial experts on the registrant’s Audit Committee are set forth below:
H. Jeffrey Dobbs
John A. Fry
Sandra A.J. Lawrence
Frances Sevilla-Sacasa, Chair
Item 4. Principal Accountant Fees and Services
(a) Audit fees.
The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $34,596 for the fiscal year ended March 31, 2022.
The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $38,440 for the fiscal year ended March 31, 2021.
(b) Audit-related fees.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended March 31, 2022.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $1,134,001 for the registrant’s fiscal year ended March 31, 2022. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: year-end audit procedures; group reporting and subsidiary statutory audits.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended March 31, 2021.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $903,282 for the registrant’s fiscal year ended March 31, 2021. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: year-end audit procedures; group reporting and subsidiary statutory audits.
(c) Tax fees.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $3,150 for the fiscal year ended March 31, 2022. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended March 31, 2022. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $3,500 for the fiscal year ended March 31, 2021. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended March 31, 2021. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.
(d) All other fees.
The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended March 31, 2022.
The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended March 31, 2022. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.
The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended March 31, 2021.
The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended March 31, 2021. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.
(e) The registrant’s Audit Committee has established pre-approval policies and procedures as permitted by Rule 2-01(c)(7)(i)(B) of Regulation S-X (the “Pre-Approval Policy”) with respect to services provided by the registrant’s independent auditors. Pursuant to the Pre-Approval Policy, the Audit Committee has pre-approved the services set forth in the table below with respect to the registrant up to the specified fee limits. Certain fee limits are based on aggregate fees to the registrant and other registrants within the Delaware Funds by Macquarie®.
| Service | Range of Fees |
| Audit Services | |
| Statutory audits or financial audits for new Funds | up to $50,000 per Fund |
| Services associated with SEC registration statements (e.g., Form N-1A, Form N-14, etc.), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters for closed-end Fund offerings, consents), and assistance in responding to SEC comment letters | up to $10,000 per Fund |
| Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit-related services” rather than “audit services”) | up to $25,000 in the aggregate |
| Audit-Related Services | |
| Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and /or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit services” rather than “audit-related services”) | up to $25,000 in the aggregate |
| Tax Services | |
| U.S. federal, state and local and international tax planning and advice (e.g., consulting on statutory, regulatory or administrative developments, evaluation of Funds’ tax compliance function, etc.) | up to $25,000 in the aggregate |
| U.S. federal, state and local tax compliance (e.g., excise distribution reviews, etc.) | up to $5,000 per Fund |
| Review of federal, state, local and international income, franchise and other tax returns | up to $5,000 per Fund |
Under the Pre-Approval Policy, the Audit Committee has also pre-approved the services set forth in the table below with respect to the registrant’s investment adviser and other entities controlling, controlled by or under common control with the investment adviser that provide ongoing services to the registrant (the “Control Affiliates”) up to the specified fee limit. This fee limit is based on aggregate fees to the investment adviser and its Control Affiliates.
| Service | Range of Fees |
| Non-Audit Services | |
| Services associated with periodic reports and other documents filed with the SEC and assistance in responding to SEC comment letters | up to $10,000 in the aggregate |
The Pre-Approval Policy requires the registrant’s independent auditors to report to the Audit Committee at each of its regular meetings regarding all services initiated since the last such report was rendered, including those services authorized by the Pre-Approval Policy.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s independent auditors for services rendered to the registrant and to its investment adviser and other service providers under common control with the adviser were $9,044,000 and $8,455,000 for the registrant’s fiscal years ended March 31, 2022 and March 31, 2021, respectively.
(h) In connection with its selection of the independent auditors, the registrant’s Audit Committee has considered the independent auditors’ provision of non-audit services to the registrant’s investment adviser and other service providers under common control with the adviser that were not required to be pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X. The Audit Committee has determined that the independent auditors’ provision of these services is compatible with maintaining the auditors’ independence.
Item 5. Audit Committee of Listed Registrants
The registrant has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The members of the registrant’s Audit Committee are H. Jeffrey Dobbs, John A. Fry, Sandra A.J. Lawrence, and Frances Sevilla-Sacasa .
Item 6. Investments
(a) Included as part of report to shareholders filed under Item 1 of this Form N-CSR.
(b) Divestment of securities in accordance with Section 13(c) of the Investment Company Act of 1940.
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
The registrant has formally delegated to its investment adviser, Delaware Management Company, a series of Macquarie Investment Management Business Trust (the “Adviser”) the responsibility for making all proxy voting decisions in relation to portfolio securities held by the registrant. If and when proxies need to be voted on behalf of the registrant, the Adviser and any Macquarie affiliates advising the registrant will vote such proxies pursuant to its Proxy Voting Policies and Procedures (the “Procedures”). The Adviser has established a Proxy Voting Committee (the “Committee”), which is responsible for overseeing the Adviser’s proxy voting process for the registrant. One of the main responsibilities of the Committee is to review and approve the Procedures to ensure that the Procedures are designed to allow the Adviser to vote proxies in a manner consistent with the goal of voting in the best interests of the registrant.
In order to facilitate the actual process of voting proxies, the Adviser has contracted with proxy advisory firms to analyze proxy statements on behalf of the registrant and other Adviser clients and provide the Adviser with research recommendations on upcoming proxy votes in accordance with the Procedures. The Committee is responsible for overseeing the proxy advisory firm’s services. If a proxy has been voted for the registrant, the proxy advisory firm will create a record of the vote. By no later than August 31 of each year, information (if any) regarding how the registrant voted proxies relating to portfolio securities during the most recently disclosed 12- month period ended June 30 is available without charge (i) through the registrant’s website at http://delawarefunds.com/proxy; and (ii) on the Securities and Exchange Commission’s website at http://www.sec.gov.
When determining whether to invest in a particular company, one of the factors the Adviser may consider is the quality and depth of the company’s management. As a result, the Adviser believes that recommendations of management on any issue (particularly routine issues) should be given a fair amount of weight in determining how proxy issues should be voted. Thus, on many issues, the Adviser’s votes are cast in accordance with the recommendations of the company’s management. However, the Adviser may vote against management’s position when it runs counter to its specific Proxy Voting Guidelines (the “Guidelines”), and the Adviser will also vote against management’s recommendation when it believes that such position is not in the best interests of the registrant.
As stated above, the Procedures also list specific Guidelines on how to vote proxies on behalf of the registrant. Some examples of the Guidelines are as follows: (i) generally vote for shareholder proposals asking that a majority or more of directors be independent; (ii) generally vote for management or shareholder proposals to reduce supermajority vote requirements, taking into account: ownership structure; quorum requirements; and vote requirements; (iii) votes on mergers and acquisitions should be considered on a case-by-case basis; (iv) generally vote re-incorporation proposals on a case-by-case basis; (v) votes with respect to equity-based compensation plans are generally determined on a case-by-case basis; (vi) generally vote for proposals requesting that a company report on its policies, initiatives, oversight mechanisms, and ethical standards related to social, economic, and environmental sustainability, unless company already provides similar reports through other means or the company has formally committed to the implementation of a reporting program based on Global Reporting Initiative guidelines or a similar standard; and (vii) generally vote for management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms.
Because the registrant has delegated proxy voting to the Adviser, the registrant is not expected to encounter any conflict of interest issues regarding proxy voting and therefore does not have procedures regarding this matter. However, the Adviser does have a section in its Procedures that addresses the possibility of conflicts of interest. Most of the proxies which the Adviser receives on behalf of its clients are voted in accordance with the Procedures. Since the Procedures are pre-determined by the Committee, application of the Procedures by the Adviser’s portfolio management teams when voting proxies after reviewing the proxy and research provided by the proxy advisory firm should in most instances adequately address any potential conflicts of interest. If the Adviser becomes aware of a conflict of interest in an upcoming proxy vote, the proxy vote will generally be referred to the Committee or the Committee’s delegates for review. If the portfolio management team for such proxy intends to vote in accordance with the proxy advisory firm’s recommendation pursuant to our Procedures, then no further action is needed to be taken by the Committee. If the Adviser’s portfolio management team is considering voting a proxy contrary to the proxy advisory firm’s research recommendation under the Procedures, the Committee or its delegates will assess the proposed vote to determine if it is reasonable. The Committee or its delegates will also assess whether any business or other material relationships between the Adviser and a portfolio company (unrelated to the ownership of the portfolio company’s securities) could have influenced an inconsistent vote on that company’s proxy. If the Committee or its delegates determines that the proposed proxy vote is unreasonable or unduly influenced by a conflict, the portfolio management team will be required to vote the proxy in accordance with the proxy advisory firm’s research recommendation or abstain from voting.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
The information in the annual report under “Other Fund information – Fund management” is incorporated by reference into this Item 8.
Other Accounts Managed
The following chart lists certain information about types of other accounts for which each portfolio manager is primarily responsible as of March 31, 2022, unless otherwise noted. Any accounts managed in a personal capacity appear under “Other Accounts” along with the other accounts managed on a professional basis.
| No. of Accounts with | Total Assets in Accounts | |||
| No. of | Total Assets | Performance- | with Performance- | |
| Accounts | Managed | Based Fees | Based Fees | |
| Gregory A. Gizzi | ||||
| Registered Investment | 19 | $8.7 billion | 0 | $0 |
| Companies | ||||
| Other Pooled | 0 | $0 | 0 | $0 |
| Investment Vehicles | ||||
| Other Accounts | 37 | $4.0 billion | 0 | $0 |
| Stephen J. Czepiel | ||||
| Registered Investment | 19 | $8.7 billion | 0 | $0 |
| Companies | ||||
| Other Pooled | 0 | $0 | 0 | $0 |
| Investment Vehicles | ||||
| Other Accounts | 26 | $4.3 billion | 0 | $0 |
| Jake van Roden | ||||
| Registered Investment | 18 | $8.0 billion | 0 | $0 |
| Companies | ||||
| Other Pooled | 0 | $0 | 0 | $0 |
| Investment Vehicles | ||||
| Other Accounts | 1 | $125.1 million | 0 | $0 |
DESCRIPTION OF MATERIAL CONFLICTS OF INTEREST
Individual portfolio managers may perform investment management services for other funds or accounts similar to those provided to the Funds and the investment action for such other fund or account and the Funds may differ. For example, an account or fund may be selling a security, while another account or fund may be purchasing or holding the same security. As a result, transactions executed for one fund or account may adversely affect the value of securities held by another fund, account or the Funds. Additionally, the management of multiple other funds or accounts and the Funds may give rise to potential conflicts of interest, as a portfolio manager must allocate time and effort to multiple other funds or accounts and the Funds. A portfolio manager may discover an investment opportunity that may be suitable for more than one account or fund. The investment opportunity may be limited, however, so that all funds or accounts for which the investment would be suitable may not be able to participate. The Adviser has adopted procedures designed to allocate investments fairly across multiple funds or accounts.
Accounts managed by the portfolio managers may have a performance-based fee. This compensation structure presents a potential conflict of interest. The portfolio manager has an incentive to manage this account so as to enhance its performance, to the possible detriment of other accounts for which the investment manager does not receive a performance-based fee.
A portfolio manager’s management of personal accounts also may present certain conflicts of interest. While Delaware’s code of ethics is designed to address these potential conflicts, there is no guarantee that it will do so.
Compensation Structure
Each portfolio’s manager’s compensation consists of the following:
Base Salary - Each named portfolio manager receives a fixed base salary. Salaries are determined by a comparison to industry data prepared by third parties to ensure that portfolio manager salaries are in line with salaries paid at peer investment advisory firms.
Bonus - An objective component is added to the bonus for each manager that is reflective of account performance relative to an appropriate peer group or database. The following paragraph describes the structure of the non-guaranteed bonus.
Each portfolio manager is eligible to receive an annual cash bonus, which is based on quantitative and qualitative factors. There is one pool for bonus payments for the fixed income department. The pool is allotted based on subjective factors and objective factors. The amount of the pool for bonus payments is determined by assets managed (including investment companies, insurance product-related accounts and other separate accounts), management fees and related expenses (including fund waiver expenses) for registered investment companies, pooled vehicles, and managed separate accounts. For investment companies, each manager is compensated according to the Fund’s Broadridge Financial Solutions, Inc. (formerly, Lipper Inc.) or Morningstar peer group percentile ranking on a 1-, 3-, and 5-year basis, with longer term performance more heavily weighted. For managed separate accounts the portfolio managers are compensated according to the composite percentile ranking against the eVestment Alliance database (or similar sources of relative performance data) on a one-, three-, and five-year basis, with longer term performance more heavily weighted; composite performance relative to the benchmark is also evaluated for the same time periods. Incentives reach maximum potential at the top 25th-30th percentile. The remaining portion of the bonus is discretionary as determined by Macquarie Investment Management and takes into account subjective factors.
For new and recently transitioned portfolio managers, the compensation may be weighted more heavily towards a portfolio manager’s actual contribution and ability to influence performance, rather than longer-term performance. Management intends to move the compensation structure towards longer-term performance for these portfolio managers over time.
Portfolio managers participate in retention programs, including the Macquarie Asset Management Public Investments Notional Investment Plan and the Macquarie Group Employee Retained Equity Plan, for alignment of interest purposes.
Macquarie Asset Management Public Investments Notional Investment Plan — A portion of a portfolio manager’s retained profit share may be notionally exposed to the return of certain funds within MAM Funds pursuant to the terms of the Macquarie Asset Management Public Investments Notional Investment Plan. The retained amount will vest in equal tranches over a period ranging from four to five years after the date of investment (depending on the level of the employee).
Macquarie Group Employee Retained Equity Plan — A portion of a portfolio manager’s retained profit share may be invested in the Macquarie Group Employee Retained Equity Plan (“MEREP”), which is used to deliver remuneration in the form of Macquarie equity. The main type of award currently being offered under the MEREP is units comprising a beneficial interest in a Macquarie share held in a trust for the employee, subject to the vesting and forfeiture provisions of the MEREP. Subject to vesting conditions, vesting and release of the shares occurs in a period ranging from four to five years after the date of investment (depending on the level of the employee).
Other Compensation - Portfolio managers may also participate in benefit plans and programs available generally to all similarly situated employees.
Ownership of Securities
As of March 31, 2022, the portfolio managers did not own any shares of the Fund.
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 officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing of this report, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the Investment Company Act of 1940 (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d15( b)) and provide reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
There were no significant changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d)) that occurred during the period covered by the report to stockholders included herein that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits
(a) (1) Code of Ethics
Not applicable.
(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934.
Not applicable.
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.
DELAWARE INVESTMENTS® NATIONAL MUNICIPAL INCOME FUND
| /s/SHAWN K. LYTLE | |
| By: | Shawn K. Lytle |
| Title: | President and Chief Executive Officer |
| Date: | June 7, 2022 |
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.
| /s/SHAWN K. LYTLE | |
| By: | Shawn K. Lytle |
| Title: | President and Chief Executive Officer |
| Date: | June 7, 2022 |
| /s/RICHARD SALUS | |
| By: | Richard Salus |
| Title: | Chief Financial Officer |
| Date: | June 7, 2022 |