N-CSR/A 1 vmf3815966-ncsra.htm AMENDMENT TO CERTIFIED SHAREHOLDER REPORT

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:       811-07742
 
Exact name of registrant as specified in charter: Voyageur Mutual Funds
 
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: August 31
 
Date of reporting period: August 31, 2020

Item 1. Reports to Stockholders

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LOGO    LOGO

Annual report    

Fixed income mutual funds

Delaware Tax-Free Minnesota Fund

Delaware Tax-Free Minnesota Intermediate Fund

Delaware Minnesota High-Yield Municipal Bond Fund

August 31, 2020

 

Beginning on or about June 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of your Fund’s shareholder reports will no longer be sent to you by mail, unless you specifically request them from the Fund or from your financial intermediary, such as a broker/dealer, bank, or insurance company. Instead, you will be notified by mail each time a report is posted on the website and provided with a link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you do not need to take any action. You may elect to receive shareholder reports and other communications from the Fund electronically by signing up at delawarefunds.com/edelivery. If you own these shares through a financial intermediary, you may contact your financial intermediary.

You may elect to receive paper copies of all future shareholder reports free of charge. You can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by contacting us at 800 523-1918. If you own these shares through a financial intermediary, you may contact your financial intermediary to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with the Delaware Funds® by Macquarie or your financial intermediary.

Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Funds’ prospectus and their summary prospectuses, which may be obtained by visiting delawarefunds.com/literature or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.

You can obtain shareholder reports and prospectuses online instead of in the mail. Visit delawarefunds.com/edelivery.

 

                

 

 

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Experience Delaware Funds® by Macquarie

Macquarie Investment Management (MIM) is a global asset manager with offices in the United States, Europe, Asia, and Australia. As active managers, we prioritize autonomy and accountability at the investment team level in pursuit of opportunities that matter for clients. Delaware Funds is one of the longest-standing mutual fund families, with more than 80 years in existence.

If you are interested in learning more about creating an investment plan, contact your financial advisor.

You can learn more about Delaware Funds or obtain a prospectus for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund at delawarefunds.com/literature.

 

Manage your account online

 

·   Check your account balance and transactions

 

·   View statements and tax forms

 

·   Make purchases and redemptions

Visit delawarefunds.com/account-access.

Macquarie Asset Management (MAM) offers a diverse range of products including securities investment management, infrastructure and real asset management, and fund and equity-based structured products. MIM is the marketing name for certain companies comprising the asset management division of Macquarie Group. This includes the following investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, and Macquarie Investment Management Europe S.A.

The Funds are distributed by Delaware Distributors, L.P.

(DDLP), an affiliate of MIMBT and Macquarie Group Limited.

Other than Macquarie Bank Limited (MBL), none of the entities noted are authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.

The Funds are governed by US laws and regulations.

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Portfolio management review

      1  

Performance summaries

      6  

Disclosure of Fund expenses

      21  

Security type / sector / state / territory allocations

      24  

Schedules of investments

      27  

Statements of assets and liabilities

      65  

Statements of operations

      67  

Statements of changes in net assets

      69  

Financial highlights

      76  

Notes to financial statements

      94  

Report of independent registered public accounting firm

      109  

Other Fund information

      110  

Board of trustees / directors and officers addendum

      116  

About the organization

      124  

Unless otherwise noted, views expressed herein are current as of August 31, 2020, and subject to change for events occurring after such date.

The Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.

Advisory services provided by Delaware Management Company, a series of MIMBT, a US registered investment advisor.

All third-party marks cited are the property of their respective owners.

© 2020 Macquarie Management Holdings, Inc.

 

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Portfolio management review   
Delaware Funds® by Macquarie Minnesota municipal bond funds    September 8, 2020 (Unaudited)

 

Performance preview (for the year ended August 31, 2020)

 

Delaware Tax-Free Minnesota Fund (Institutional Class shares)

    1-year return    +1.55%  

Delaware Tax-Free Minnesota Fund (Class A shares)

    1-year return    +1.30%  

Bloomberg Barclays Municipal Bond Index (benchmark)

    1-year return    +3.24%  

Lipper Minnesota Municipal Debt Funds Average

    1-year return    +2.00%  

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free Minnesota Fund, please see the table on page 6.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.

The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.

The Lipper Minnesota Municipal Debt Funds Average compares funds that invest primarily in municipal debt issues that are exempt from taxation in Minnesota.

Please see page 10 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

 

Delaware Tax-Free Minnesota Intermediate Fund (Institutional Class shares)

    1-year return    +1.23%  

Delaware Tax-Free Minnesota Intermediate Fund (Class A shares)

    1-year return    +1.08%  

Bloomberg Barclays 3–15 Year Blend Municipal Bond Index (benchmark)

    1-year return    +3.39%  

Lipper Other States Intermediate Municipal Debt Funds Average

    1-year return    +2.35%  

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free Minnesota Intermediate Fund, please see the table on page 11.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.

The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.

The Lipper Other States Intermediate Municipal Debt Funds Average compares funds that invest in municipal debt issues with dollar-weighted average maturities of 5 to 10 years and are exempt from taxation on a specified city or state basis.

Please see page 15 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

 

Delaware Minnesota High-Yield Municipal Bond Fund (Institutional Class shares)

    1-year return    +1.15%  

Delaware Minnesota High-Yield Municipal Bond Fund (Class A shares)

    1-year return    +0.81%  

Bloomberg Barclays Municipal Bond Index (benchmark)

    1-year return    +3.24%  

Lipper Minnesota Municipal Debt Funds Average

    1-year return    +2.00%  

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Minnesota High-Yield Municipal Bond Fund, please see the table on page 16.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.

The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.

The Lipper Minnesota Municipal Debt Funds Average compares funds that invest primarily in municipal debt issues that are exempt from taxation in Minnesota.

 

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Portfolio management review

Delaware Funds® by Macquarie Minnesota municipal bond funds

 

Please see page 20 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

Investment objectives

Delaware Tax-Free Minnesota Fund seeks as high a level of current income exempt from federal income tax and from Minnesota state personal income taxes as is consistent with preservation of capital.

Delaware Tax-Free Minnesota Intermediate Fund seeks to provide investors with preservation of capital and, secondarily, current income exempt from federal income tax and Minnesota state personal income taxes, by maintaining a dollar-weighted average effective portfolio maturity of 10 years or less.

Delaware Minnesota High-Yield Municipal Bond Fund seeks a high level of current income that is exempt from federal income tax and from Minnesota state personal income taxes, primarily through investment in medium- and lower-grade municipal obligations.

 

Economic backdrop

For most of the first half of the fiscal year ended August 31, 2020, the US economy continued along its steady growth path with historically low unemployment. In both the third and fourth calendar quarters of 2019, the nation’s gross domestic product (GDP) – a measure of national economic output – rose by an annualized 2.1%. Meanwhile, the US jobless rate remained at or near a half-century low throughout 2019 and into 2020, reaching a low of 3.9% in September 2019.

Starting in February 2020, however, global economic conditions began to dramatically worsen as the full social and financial impact of the coronavirus pandemic became evident. Quarantine orders mounted across the country and around the world, economic activity ground to a halt, and job losses grew by the millions. US GDP shrank by an annualized 5.0% in the first quarter of 2020 and then by an annualized 31.7% in the second quarter, the worst quarterly economic contraction in US history.

Both the US Federal Reserve and the federal government took aggressive action to attempt to ease this economic damage. In early March, the Fed cut the federal funds rate, its benchmark short-term interest rate, by 0.50 percentage points. Two weeks later, it cut the federal funds

rate by another full percentage point, bringing it to essentially zero, where it stood throughout the remainder of the fiscal year. Further, in late March, the federal government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic stimulus bill focused on providing support to individuals and businesses hurt by the economic fallout.

After the United States lost 20.5 million jobs in April 2020, the US unemployment rate soared to 14.7%, the highest level seen since the Great Depression. As economies around the country gradually reopened, however, the national economic picture slowly improved. By August, the US jobless rate fell to 8.4% – still historically high, though a significant improvement from earlier in the year – as some workers returned to their positions after temporary layoffs.

Sources: US Bureau of Economic Analysis, US Bureau of Labor Statistics, and Bloomberg.

Municipal bond market conditions

Overall, the municipal bond market, as measured by the Bloomberg Barclays Municipal Bond Index, returned 3.24% for the fiscal year ended August 31, 2020.

 

 

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When describing market conditions, we can divide the fiscal year into three distinct periods. The first covers September 2019 through March 9, 2020, during which municipal bonds enjoyed solid performance amid favorable demand for tax-exempt securities, coupled with relatively limited supply. In this environment, longer-duration, lower-rated securities generally outperformed their shorter-maturity, more highly rated counterparts, as many investors accepted greater interest rate risk and credit risk in exchange for higher yields. During this period, the municipal bond market, as measured by the Bloomberg Barclays Municipal Bond Index, gained 3.04%.

Starting on March 10, however, conditions for investors in municipal bonds abruptly shifted. With mounting concern about the coronavirus, market volatility soared, liquidity dried up, and more highly leveraged institutional investors were forced to unload their municipal debt. Investors, eager for safety, bid up prices of more highly rated, shorter-term bonds, while lower-quality, longer-term issues lagged, reflecting their increased credit and duration risk. Between March 10 and April 30, the Bloomberg Barclays Municipal Bond Index declined 4.84%, with most of that loss coming during two especially difficult weeks in March. Lower-investment-grade and below-investment-grade bonds performed notably poorly during this roughly seven-week stretch, declining 11.85% and 14.00%, respectively.

Finally, between May and the end of the fiscal year on August 31, municipal securities rallied strongly, with the Bloomberg Barclays Municipal Bond Index gaining 5.29%. Better-than-expected national economic data and heightened demand for tax-exempt bonds, especially lower-rated issues that had fallen disproportionately during the market’s earlier downturn, boosted the asset class.

Looking at the full fiscal year, the following tables indicate that bonds with intermediate maturities

generally outperformed their shorter- and longer-dated counterparts, while more highly rated issues fared better than lower-rated bonds.

 

Returns by maturity   

1 year

      1.95 % 

3 years

      2.88 % 

5 years

      3.51 % 

10 years

      3.53 % 

22+ years

      3.05 % 
Returns by credit rating   

AAA

      4.03 % 

AA

      3.58 % 

A

      2.75 % 

BBB

      1.33 % 

Source: Bloomberg.

   

A consistent management approach

For all three Funds highlighted in this report, we maintained the same management strategy we employ in all market conditions. We follow a bottom-up (bond by bond) investment approach, which means we select bonds on an issuer-by-issuer basis, based on our team’s thorough credit research. We regularly seek bonds that offer the Funds’ shareholders what we view as an attractive trade-off between reward potential and risk.

Following this approach, we generally maintain less exposure to highly rated, lower yielding bonds and more exposure to bonds with lower-investment-grade or below-investment-grade credit ratings. We believe that by focusing on higher yielding securities that have solid underlying credit quality, we have more opportunity to add value for the Funds’ shareholders. That said, it can sometimes be difficult to add as many lower-rated, higher yielding bonds to these Funds’ portfolios as we would ordinarily prefer, as highly rated, lower-coupon general obligation district bonds tend to be prevalent in the Minnesota municipal bond market. In such an environment, we look to

 

 

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Portfolio management review

Delaware Funds® by Macquarie Minnesota municipal bond funds

 

achieve an appropriate balance of risk and reward in the Funds, while remaining ready to invest in suitable lower-rated issues when they present themselves.

As of fiscal year end on August 31, 2020, roughly 30.0% of the net assets of Delaware Tax-Free Minnesota Fund were invested in bonds with lower-investment-grade credit ratings (A and BBB), and approximately 35.5% of the net assets of Delaware Tax-Free Minnesota Intermediate Fund were invested in these same credit tiers. Both Funds also maintained allocations to high yield municipal bonds, those with credit ratings below BBB. As indicated in the prospectus, both Funds may hold up to 20% of their net assets in high yield debt, although these allocations remained below that threshold throughout the fiscal year. When investing in the high yield market segment, we thoroughly analyze the securities’ credit risk and emphasize those bonds that we believe offer a favorable risk-reward balance.

Consistent with its mandate, Delaware Minnesota High-Yield Municipal Bond Fund maintained the largest exposure to high yield bonds of the three Funds. As of August 31, 2020, more than 33.8% of the Fund’s portfolio were held in bonds with credit ratings below BBB-, including nonrated bonds.

Tactical investment opportunities

For the first part of the fiscal year – roughly the period between September 2019 and the pandemic-fueled market selloff in March 2020 – we tended to limit our selling activity in the Funds’ portfolios. This approach reflected our assessment that the Funds were well positioned with many older bonds that had been issued in times of higher interest rates. This meant they offered a level of income that would be difficult to replace through the purchase of newer bonds.

Market conditions shifted dramatically, however, with the arrival of the coronavirus. In March,

demand for municipal bonds suddenly weakened, and an environment of mutual fund inflows across the market turned into one of rapid outflows. We quickly determined this outflow trend was likely to worsen. As a result, we decided to raise cash in these Funds by selling bonds in an orderly way. Our goal was to preserve each Fund’s positioning as best we could, to be able to satisfy shareholder redemptions while avoiding having to sell securities at temporarily depressed prices. We believe these proactive sales worked to shareholders’ benefit, as the Funds had enough cash on hand to meet the redemption requests we received.

Beginning in April, municipal market conditions began to improve, reflecting aggressive economic stimulus and investors’ optimism about state economies around the country beginning to reopen. In this environment, we saw opportunities to purchase bonds priced significantly lower than what we believed was justified given these securities’ underlying credit quality. We embraced this strategy across all the Delaware Funds® by Macquarie funds we manage, even as supply constraints in the Minnesota municipal bond market sometimes made it difficult to execute it as frequently as we would have preferred.

We also employed a tax-loss swapping strategy to varying degrees in all three Funds. This approach entailed selling existing holdings at a loss (which can be applied against future capital gains) and using the sale proceeds to buy bonds with similar risk characteristics but higher yields.

Notable performance factors

For the fiscal year, longer-duration bonds – those with more sensitivity to interest rates – outperformed bonds with shorter durations. At the same time, bonds with higher credit ratings outperformed lower-quality bonds, which suffered disproportionately during the market’s March downturn. Many of the Funds’ strongest and

 

 

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weakest performers over the 12-month period reflected these performance trends.

Bonds for Stride Academy, a St. Cloud charter school, were the strongest-performing individual securities in both Delaware Tax-Free Minnesota Fund and Delaware Tax-Free Minnesota High-Yield Municipal Bond Fund. As the issuer’s credit fundamentals continued to gradually improve, these nonrated bonds experienced improved price performance, returning about 7% for the Funds’ fiscal year.

Puerto Rico sales-tax bonds, known as COFINA bonds, were also notably strong performers for Delaware Tax-Free Minnesota Fund, Delaware Minnesota High-Yield Municipal Bond Fund, and Delaware Tax-Free Minnesota Intermediate Fund, with gains that hovered around 7%. COFINA bonds benefited from strong investor demand due to the securities’ fully tax-exempt status (bonds of US territories are generally tax-exempt for residents in all 50 states), as well as Puerto Rico’s better-than-expected fiscal position.

Another individual contributor to Delaware Tax-Free Minnesota Intermediate Fund was an investment in public power bonds for District Energy of St. Paul. These bonds, with an A- credit rating and a 4% coupon, returned 5% for the Fund for the fiscal year.

Among the market’s weakest performers for the 12-month period were bonds of healthcare issuers, especially those of senior living operators, which struggled amid concern about how the coronavirus would affect their finances. The weak performers in this market area included Minnesota Senior Living bonds for Apple Valley, Minn. These bonds fell close to 30% in Delaware Tax-Free Minnesota Fund and Delaware Minnesota

High-Yield Municipal Bond Fund, and declined more than 20% in Delaware Tax-Free Minnesota Intermediate Fund.

Similarly, in Delaware Minnesota High-Yield Municipal Bond Fund, a position in bonds issued for Farmington Health Service, a continuing care retirement community, lagged the market, declining more than 10%. Nonrated hospital bonds for Riverview Healthcare Association lost more than 6% for Delaware Tax-Free Minnesota Intermediate Fund, while continuing care retirement community bonds for the St. Therese Senior Living project in Deephaven, Minn., fell more than 7%, detracting from the performance of Delaware Tax-Free Minnesota Fund.

Minnesota economic backdrop

Minnesota unemployment rates were lower than national levels before and during the coronavirus pandemic. Unemployment fell to 2.9% in March, from 3.1% in February, and then rose to 8.7% in April, 9.9% in May, 8.0% in June, and 7.7% in July. Minnesota has a biennial budget that lasts through June 2021. The state budget reserve is $2.4 billion, and the state received $1.9 billion in CARES Act funding. The July state revenue projection for fiscal year 2020 dropped from a projected $1.5 billion surplus to a $168 million surplus due to revenue declines related to the coronavirus pandemic, but Minnesota is one of only a handful of states that did not see fiscal year 2020 revenue losses. Sales tax revenues are expected to finish 2020 up 1.5%, corporate taxes up 1.9%, and personal income taxes up 0.7%. Minnesota is projecting a revenue decline of 7% for fiscal year 2021. (Sources: bls.gov, bea.gov, ncsl.org, Minnesota Management and Budget.)

 

 

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Performance summaries   
Delaware Tax-Free Minnesota Fund    August 31, 2020 (Unaudited)

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.

 

Fund and benchmark performance1,2    Average annual total returns through August 31, 2020     
          1 year           5 year           10 year           Lifetime    

Class A (Est. February 27, 1984)

         

Excluding sales charge

      +1.30 %      +2.98 %      +3.49 %      +6.05 % 

Including sales charge

      -3.28 %      +2.04 %      +3.02 %      +5.92 % 

Class C (Est. May 4, 1994)

         

Excluding sales charge

      +0.54 %      +2.21 %      +2.71 %      +3.93 % 

Including sales charge

      -0.44 %        +2.21 %        +2.71 %        +3.93 %   

Institutional Class (Est. December 31, 2013)

         

Excluding sales charge

      +1.55 %      +3.25 %      —       +4.08 % 

Including sales charge

      +1.55 %      +3.25 %      —       +4.08 % 

Bloomberg Barclays Municipal Bond Index

      +3.24 %      +3.99 %      +3.98 %      +4.48 %* 

*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.

 

1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 8. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual

12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the

 

 

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time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than geographically diversified funds.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.

 

 

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Performance summaries

Delaware Tax-Free Minnesota Fund

 

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding 0.60% of the Fund’s average daily net assets from September 1, 2019 to August 31, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.

 

Fund expense ratios    Class A   Class C   Institutional Class

Total annual operating expenses (without fee waivers)

    0.93%   1.68%   0.68%

Net expenses (including fee waivers, if any)

    0.85%   1.60%   0.60%

Type of waiver

          Contractual               Contractual               Contractual      

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

 

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Performance of a $10,000 investment1

Class A shares

Average annual total returns from August 31, 2010 through August 31, 2020

 

LOGO

 

     
For period beginning August 31, 2010 through August 31, 2020    Starting value    Ending value

LOGO Bloomberg Barclays Municipal Bond Index

    $10,000    $14,768

LOGO  Delaware Tax-Free Minnesota Fund — Class A shares

    $9,550    $13,463

Institutional Class shares

Average annual total returns from December 31, 2013 (inception date) through August 31, 2020

 

LOGO

 

     
For period beginning December 31, 2013 through August 31, 2020    Starting value    Ending value

LOGO Bloomberg Barclays Municipal Bond Index

    $10,000    $13,397

LOGO  Delaware Tax-Free Minnesota Fund — Institutional Class shares

    $10,000    $13,059

 

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Performance summaries

Delaware Tax-Free Minnesota Fund

 

1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on August 31, 2010, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of August 31, 2010.

The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on December 31, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of December 31, 2013.

The graphs do not reflect the deduction of taxes the shareholders would pay on Fund distributions

or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 8. Please note additional details on pages 6 through 10.

The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

 

 

     
    Nasdaq symbols   CUSIPs

Class A

   DEFFX   928918101

Class C

   DMOCX   928918408

Institutional Class

 

  

DMNIX

 

  

928918705

 

 

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Performance summaries   
Delaware Tax-Free Minnesota Intermediate Fund    August 31, 2020 (Unaudited)

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.

 

Fund and benchmark performance1,2    Average annual total returns through August 31, 2020        
      1 year        5 year        10 year        Lifetime  

Class A (Est. October 27, 1985)

            

Excluding sales charge

      +1.08%        +2.68%        +2.87%        +4.62%  

Including sales charge

      -1.72%        +2.10%        +2.58%        +4.54%  

Class C (Est. May 4, 1994)

            

Excluding sales charge

      +0.22%        +1.81%        +1.99%        +3.19%  

Including sales charge

      -0.77%        +1.81%        +1.99%        +3.19%  

Institutional Class (Est. December 31, 2013)

            

Excluding sales charge

      +1.23%        +2.83%        —        +3.33%  

Including sales charge

      +1.23%        +2.83%        —        +3.33%  

Bloomberg Barclays 3–15 Year Blend Municipal Bond Index

      +3.39%        +3.69%        +3.61%        +3.95% * 

*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.

 

1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 13. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 2.75%, and have an annual (12b-1) fee of 0.25% of average daily net assets. This fee was contractually limited to 0.15% of average daily net assets from September 1, 2019 through August 31, 2020.* Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic

 

 

11

Table of Contents

Performance summaries

Delaware Tax-Free Minnesota Intermediate Fund

 

conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than geographically diversified funds.

Substantially all dividend income derived from tax- free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates

could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.

 

 

12

Table of Contents

    

    

 

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding 0.56% of the Fund’s average daily net assets during the period from September 1, 2019 to August 31, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.

 

Fund expense ratios   Class A   Class C   Institutional Class

Total annual operating expenses
(without fee waivers)

   1.04%   1.79%   0.79%

Net expenses (including fee
waivers, if any)

   0.71%   1.56%   0.56%

Type of waiver

   Contractual   Contractual   Contractual

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

 

13

Table of Contents

Performance summaries

Delaware Tax-Free Minnesota Intermediate Fund

 

Performance of a $10,000 investment1

Class A shares

Average annual total returns from August 31, 2010 through August 31, 2020

LOGO

 

For period beginning August 31, 2010 through August 31, 2020    Starting value          Ending value

LOGO Bloomberg Barclays 3–15 Year Blend Municipal Bond Index

    $10,000       $14,251

LOGO Delaware Tax-Free Minnesota Intermediate Fund — Class A

       shares

    $9,725         $12,906

Institutional Class shares

Average annual total returns from December 31, 2013 (inception date) through August 31, 2020

LOGO

 

For period beginning December 31, 2013 through August 31, 2020    Starting value          Ending value

LOGO Bloomberg Barclays 3–15 Year Blend Municipal Bond Index

    $ 10,000       $ 12,948

LOGO Delaware Tax-Free Minnesota Intermediate Fund — Institutional

       Class shares

    $ 10,000         $ 12,436

 

14

Table of Contents

    

    

 

1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on August 31, 2010, and includes the effect of a 2.75% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays 3–15 Year Blend Municipal Bond Index as of August 31, 2010.

The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on December 31, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays 3–15 Year Blend Municipal Bond Index as of December 31, 2013.

The graphs do not reflect the deduction of taxes the shareholders would pay on Fund distributions

or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 13. Please note additional details on pages 11 through 15.

The Bloomberg Barclays 3–15 Year Blend Municipal Bond Index measures the total return performance of investment grade, US tax-exempt bonds with maturities from 2 to 17 years.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

 

 

     Nasdaq symbols   CUSIPs

Class A

   DXCCX   928930106

Class C

   DVSCX   928930205

Institutional Class

   DMIIX   92910U109

 

15

Table of Contents
Performance summaries   
Delaware Minnesota High-Yield Municipal Bond Fund    August 31, 2020 (Unaudited)

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.

 

Fund and benchmark performance1,2    Average annual total returns through August 31, 2020       
      1 year            5 year            10 year            Lifetime      

Class A (Est. June 4, 1996)

                        

Excluding sales charge

    +0.81%       +3.36%       +3.75%       +4.92%   

Including sales charge

    -3.75%             +2.41%             +3.27%             +4.72%     

Class C (Est. June 7, 1996)

                        

Excluding sales charge

    +0.05%       +2.57%       +2.97%       +4.14%   

Including sales charge

    -0.93%             +2.57%             +2.97%             +4.14%     

Institutional Class (Est. December 31, 2013)

                        

Excluding sales charge

    +1.15%       +3.62%       —       +4.45%   

Including sales charge

    +1.15%             +3.62%             —             +4.45%     

Bloomberg Barclays Municipal Bond Index

    +3.24%             +3.99%             +3.98%             +4.48%*     

*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.

 

1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 18. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual

 

12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the

 

 

16

Table of Contents

    

    

 

time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than geographically diversified funds.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

 

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.

 

 

17

Table of Contents

Performance summaries

Delaware Minnesota High-Yield Municipal Bond Fund

 

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding 0.64% of the Fund’s average daily net assets from September 1, 2019 to August 31, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.

 

Fund expense ratios   Class A   Class C   Institutional Class

Total annual operating expenses (without fee waivers)

   0.99%   1.74%   0.74%

Net expenses (including fee waivers, if any)

   0.89%   1.64%   0.64%

Type of waiver

   Contractual   Contractual   Contractual

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

 

18

Table of Contents

    

    

 

Performance of a $10,000 investment1

Class A shares

Average annual total returns from August 31, 2010 through August 31, 2020

 

LOGO

 

For period beginning August 31, 2010 through August 31, 2020    Starting value          Ending value

LOGO Bloomberg Barclays Municipal Bond Index

    $10,000       $14,768

LOGO Delaware Minnesota High-Yield Municipal Bond Fund — Class A shares

    $9,550         $13,800

Institutional Class shares

Average annual total returns from December 31, 2013 (inception date) through August 31, 2020

 

LOGO

For period beginning December 31, 2013 through August 31, 2020    Starting value          Ending value

LOGO Bloomberg Barclays Municipal Bond Index

    $10,000       $13,397

LOGO Delaware Minnesota High-Yield Municipal Bond Fund — Institutional Class shares

    $ 10,000         $13,371

 

19

Table of Contents

Performance summaries

Delaware Minnesota High-Yield Municipal Bond Fund

 

1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on August 31, 2010, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of August 31, 2010.

The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on December 31, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of December 31, 2013.

The graphs do not reflect the deduction of taxes the shareholders would pay on Fund distributions

or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 18. Please note additional details on pages 16 through 20.

The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

 

 

     
    Nasdaq symbols   CUSIPs

Class A

   DVMHX   928928316

Class C

   DVMMX   928928282

Institutional Class

 

  

DMHIX

 

  

928928175

 

 

20

Table of Contents

Disclosure of Fund expenses

For the six-month period from March 1, 2020 to August 31, 2020 (Unaudited)

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other Fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period from March 1, 2020 to August 31, 2020.

Actual expenses

The first section of the tables shown, “Actual Fund return,” provides information about actual account values and actual expenses. You may use the information in this section of the table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes

The second section of the tables shown, “Hypothetical 5% return,” provides information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The Funds’ expenses shown in the tables reflect fee waivers in effect and assume reinvestment of all dividends and distributions.

 

21

Table of Contents

Disclosure of Fund expenses

For the six-month period from March 1, 2020 to August 31, 2020 (Unaudited)

 

Delaware Tax-Free Minnesota Fund

Expense analysis of an investment of $1,000

 

     

Beginning

Account Value

3/1/20

   

Ending

Account Value

8/31/20

   

Annualized

Expense Ratio

  

Expenses

Paid During Period

3/1/20 to 8/31/20*

Actual Fund return†

                  

Class A

        $1,000.00         $988.20        0.85 %       $4.25

Class C

        1,000.00         984.60        1.60 %       7.98

Institutional Class

        1,000.00         989.50        0.60 %       3.00

Hypothetical 5% return (5% return before expenses)

 

         

Class A

        $1,000.00         $1,020.86        0.85 %       $4.32

Class C

        1,000.00         1,017.09        1.60 %       8.11

Institutional Class

        1,000.00         1,022.12        0.60 %       3.05

Delaware Tax-Free Minnesota Intermediate Fund

Expense analysis of an investment of $1,000

                   
     

Beginning

Account Value

3/1/20

   

Ending

Account Value

8/31/20

   

Annualized

Expense Ratio

  

Expenses

Paid During Period

3/1/20 to 8/31/20*

Actual Fund return†

                  

Class A

        $1,000.00         $987.50        0.71 %       $3.55

Class C

        1,000.00         983.30        1.56 %       7.78

Institutional Class

        1,000.00         987.40        0.56 %       2.80

Hypothetical 5% return (5% return before expenses)

 

         

Class A

        $1,000.00         $1,021.57        0.71 %       $3.61

Class C

        1,000.00         1,017.29        1.56 %       7.91

Institutional Class

        1,000.00         1,022.32        0.56 %       2.85

 

22

Table of Contents

    

    

 

Delaware Minnesota High-Yield Municipal Bond Fund

Expense analysis of an investment of $1,000

 

     

Beginning

Account Value

3/1/20

   

Ending

Account Value

8/31/20

   

Annualized

Expense Ratio

  

Expenses

Paid During Period

3/1/20 to 8/31/20*

Actual Fund return†

                  

Class A

        $1,000.00        $979.30        0.89 %       $4.43

Class C

        1,000.00        975.60        1.64 %       8.14

Institutional Class

        1,000.00        981.40        0.64 %       3.19

Hypothetical 5% return (5% return before expenses)

 

         

Class A

        $1,000.00        $1,020.66        0.89 %       $4.52

Class C

        1,000.00        1,016.89        1.64 %       8.31

Institutional Class

        1,000.00        1,021.92        0.64 %       3.25

 

*

“Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).

 

† 

Because actual returns reflect only the most recent six-month period, the returns shown may differ significantly from fiscal year returns.

 

23

Table of Contents
Security type / sector / state / territory allocations
Delaware Tax-Free Minnesota Fund    As of August 31, 2020 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

 

Security type / sector            Percentage of net assets         

Municipal Bonds*

        97.84 %

Corporate Revenue Bond

        0.76 %

Education Revenue Bonds

        18.39 %

Electric Revenue Bonds

        8.09 %

Healthcare Revenue Bonds

        23.58 %

Housing Revenue Bonds

        0.40 %

Lease Revenue Bonds

        2.92 %

Local General Obligation Bonds

        12.23 %

Pre-Refunded/Escrowed to Maturity Bonds

        7.28 %

Special Tax Revenue Bonds

        4.60 %

State General Obligation Bonds

        9.80 %

Transportation Revenue Bonds

        6.70 %

Water & Sewer Revenue Bonds

        3.09 %

Short-Term Investments

        1.08 %

Total Value of Securities

        98.92 %

Receivables and Other Assets Net of Liabilities

        1.08 %

Total Net Assets

        100.00 %

*As of the date of this report, Delaware Tax-Free Minnesota Fund held bonds issued by or on behalf of territories and the states of the US as follows:

 

State / territory            Percentage of net assets         

Guam

        0.39 %

Minnesota

        93.67 %

Puerto Rico

        4.51 %

US Virgin Islands

        0.35 %

Total Value of Securities

        98.92 %

 

24

Table of Contents
Security type / sector / state / territory allocations
Delaware Tax-Free Minnesota Intermediate Fund    As of August 31, 2020 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

 

Security type / sector            Percentage of net assets         

Municipal Bonds*

        97.53 %

Corporate Revenue Bond

        0.53 %

Education Revenue Bonds

        13.28 %

Electric Revenue Bonds

        7.59 %

Healthcare Revenue Bonds

        24.67 %

Housing Revenue Bond

        0.34 %

Lease Revenue Bonds

        4.39 %

Local General Obligation Bonds

        17.20 %

Pre-Refunded/Escrowed to Maturity Bonds

        8.49 %

Special Tax Revenue Bonds

        3.32 %

State General Obligation Bonds

        9.81 %

Transportation Revenue Bonds

        5.59 %

Water & Sewer Revenue Bonds

        2.32 %

Short-Term Investments

        1.34 %

Total Value of Securities

        98.87 %

Receivables and Other Assets Net of Liabilities

        1.13 %

Total Net Assets

        100.00 %

*As of the date of this report, Delaware Tax-Free Minnesota Intermediate Fund held bonds issued by or on behalf of territories and the states of the US as follows:

 

State / territory            Percentage of net assets         

Guam

        0.77 %

Minnesota

        95.17 %

Puerto Rico

        2.93 %

Total Value of Securities

        98.87 %

 

25

Table of Contents
Security type / sector / state / territory allocations
Delaware Minnesota High-Yield Municipal Bond Fund    As of August 31, 2020 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

 

Security type / sector            Percentage of net assets         

Municipal Bonds*

        97.87 %

Corporate Revenue Bond

        1.32 %

Education Revenue Bonds

        21.48 %

Electric Revenue Bonds

        5.93 %

Healthcare Revenue Bonds

        34.14 %

Housing Revenue Bonds

        1.62 %

Lease Revenue Bonds

        2.34 %

Local General Obligation Bonds

        6.71 %

Pre-Refunded/Escrowed to Maturity Bonds

        4.40 %

Special Tax Revenue Bonds

        5.25 %

State General Obligation Bonds

        7.00 %

Transportation Revenue Bonds

        6.51 %

Water & Sewer Revenue Bonds

        1.17 %

Short-Term Investments

        0.70 %

Total Value of Securities

        98.57 %

Receivables and Other Assets Net of Liabilities

        1.43 %

Total Net Assets

        100.00 %

*As of the date of this report, Delaware Minnesota High-Yield Municipal Bond Fund held bonds issued by or on behalf of territories and the states of the US as follows:

 

State / territory            Percentage of net assets         

Minnesota

        93.55 %

Puerto Rico

        5.02 %

Total Value of Securities

        98.57 %

 

26

Table of Contents
Schedules of investments   
Delaware Tax-Free Minnesota Fund    August 31, 2020

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds — 97.84%

      

 

  

Corporate Revenue Bond — 0.76%

      

St. Paul Port Authority Solid Waste Disposal Revenue

      

(Gerdau St. Paul Steel Mill Project)

      

Series 7 144A 4.50% 10/1/37 (AMT)#

      4,355,000      $ 4,387,009  
     

 

 

  
        4,387,009  
     

 

 

  

Education Revenue Bonds — 18.39%

      

Bethel Charter School Lease Revenue

      

(Spectrum High School Project)

      

Series A 4.00% 7/1/32

      840,000        876,708  

Series A 4.25% 7/1/47

      1,550,000              1,585,929  

Series A 4.375% 7/1/52

      400,000        411,036  

Brooklyn Park Charter School Lease Revenue

      

(Prairie Seeds Academy Project)

      

Series A 5.00% 3/1/34

      2,260,000        2,312,003  

Series A 5.00% 3/1/39

      385,000        390,255  

Cologne Charter School Lease Revenue

      

(Cologne Academy Project)

      

Series A 5.00% 7/1/34

      250,000        263,505  

Series A 5.00% 7/1/45

      1,390,000        1,445,850  

Deephaven Charter School Lease Revenue

      

(Eagle Ridge Academy Project)

      

Series A 5.50% 7/1/50

      2,000,000        2,167,000  

Duluth Housing & Redevelopment Authority Revenue

      

(Duluth Public Schools Academy Project)

      

Series A 5.00% 11/1/38

      700,000        749,819  

Series A 5.00% 11/1/48

      2,800,000        2,959,264  

Duluth Independent School District No. 709 Certificates of Participation

      

Series B 5.00% 2/1/28

      350,000        445,942  

Forest Lake Charter School Lease Revenue Fund

      

(Lakes International Language Academy Project)

      

Series A 5.25% 8/1/43

      400,000        432,976  

Series A 5.375% 8/1/50

      1,690,000        1,834,444  

Series A 5.50% 8/1/36

      580,000        611,019  

Series A 5.75% 8/1/44

      1,190,000        1,258,187  

Ham Lake Charter School Lease Revenue

      

(Davinci Academy Project)

      

Series A 5.00% 7/1/36

      765,000        814,037  

Series A 5.00% 7/1/47

      2,290,000        2,406,698  

 

27

Table of Contents

Schedules of investments

Delaware Tax-Free Minnesota Fund

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Education Revenue Bonds (continued)

      

Hugo Charter School Lease Revenue

      

(Noble Academy Project)

      

Series A 5.00% 7/1/34

      580,000      $ 604,145  

Series A 5.00% 7/1/44

      1,770,000        1,819,525  

Minneapolis Charter School Lease Revenue

      

(Hiawatha Academies Project)

      

Series A 5.00% 7/1/31

      885,000        944,030  

Series A 5.00% 7/1/47

      2,300,000        2,383,306  

Minneapolis Student Housing Revenue

      

(Riverton Community Housing Project)

      

5.25% 8/1/39

      470,000        474,775  

5.50% 8/1/49

      2,260,000        2,294,804  

Minnesota Colleges & Universities Revenue Fund

      

Series A 5.00% 10/1/26

      4,990,000              6,244,386  

Minnesota Higher Education Facilities Authority Revenue

      

(Bethel University)

      

5.00% 5/1/32

      1,375,000        1,521,602  

5.00% 5/1/37

      1,250,000        1,357,963  

5.00% 5/1/47

      250,000        266,955  

(Carleton College)

      

4.00% 3/1/35

      1,000,000        1,155,700  

4.00% 3/1/36

      415,000        478,018  

5.00% 3/1/44

      2,085,000        2,500,123  

(College of St. Benedict)

      

Series 8-K 4.00% 3/1/43

      1,000,000        1,021,060  

(College of St. Scholastica)

      

4.00% 12/1/29

      280,000        310,828  

4.00% 12/1/30

      290,000        318,037  

4.00% 12/1/33

      500,000        532,550  

4.00% 12/1/34

      500,000        530,415  

4.00% 12/1/40

      1,200,000        1,258,224  

(Gustavus Adolphus College)

      

5.00% 10/1/47

      5,600,000        6,309,352  

(St. Catherine University)

      

Series A 4.00% 10/1/36

      925,000        982,211  

Series A 5.00% 10/1/35

      875,000        1,013,206  

Series A 5.00% 10/1/45

      2,120,000        2,394,370  

(St. John’s University)

      

Series 8-I 5.00% 10/1/32

      500,000        575,575  

Series 8-I 5.00% 10/1/33

      250,000        286,900  

 

28

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Education Revenue Bonds (continued)

      

(St. Olaf College)

      

Series 8-G 5.00% 12/1/31

      670,000      $         788,664  

Series 8-G 5.00% 12/1/32

      670,000        785,334  

Series 8-N 4.00% 10/1/35

      500,000        556,020  

(Trustees of The Hamline University)

      

Series B 5.00% 10/1/37

      955,000        1,030,579  

Series B 5.00% 10/1/38

      1,000,000        1,076,830  

Series B 5.00% 10/1/39

      170,000        182,599  

Series B 5.00% 10/1/40

      625,000        670,388  

Series B 5.00% 10/1/47

      1,060,000        1,126,059  

(University of St. Thomas)

      

4.00% 10/1/36

      1,450,000        1,639,834  

4.00% 10/1/37

      750,000        845,333  

4.00% 10/1/44

      1,255,000        1,382,194  

5.00% 10/1/40

      500,000        603,380  

Series 8-L 5.00% 4/1/35

      1,250,000        1,446,875  

Series A 4.00% 10/1/34

      400,000        447,704  

Series A 4.00% 10/1/36

      500,000        555,670  

Minnesota Office of Higher Education Revenue

      

(Senior Supplemental Student Loan Program)

      

2.65% 11/1/38 (AMT)

      1,000,000        994,940  

Otsego Charter School Lease Revenue

      

(Kaleidoscope Charter School)

      

Series A 5.00% 9/1/34

      520,000        534,581  

Series A 5.00% 9/1/44

      1,165,000        1,180,564  

Rice County Educational Facilities Revenue

      

(Shattuck-St. Mary’s School)

      

Series A 144A 5.00% 8/1/22 #

      2,855,000        2,920,893  

St. Cloud Charter School Lease Revenue

      

(Stride Academy Project)

      

Series A 5.00% 4/1/46

      875,000        595,000  

St. Paul Housing & Redevelopment Authority Charter School Lease Revenue

      

(Academia Cesar Chavez School Project)

      

Series A 5.25% 7/1/50

      1,945,000        1,927,475  

(Great River School Project)

      

Series A 144A 4.75% 7/1/29 #

      300,000        317,250  

Series A 144A 5.50% 7/1/52 #

      735,000        783,547  

(Hmong College Preparatory Academy Project)

      

Series A 5.75% 9/1/46

      1,000,000        1,105,960  

(Nova Classical Academy Project)

      

Series A 4.00% 9/1/36

      500,000        526,590  

 

29

Table of Contents

Schedules of investments

Delaware Tax-Free Minnesota Fund

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Education Revenue Bonds (continued)

      

(Nova Classical Academy Project)

      

Series A 4.125% 9/1/47

      1,750,000      $ 1,818,337  

(Twin Cities Academy Project)

      

Series A 5.30% 7/1/45

      1,440,000        1,518,826  

University of Minnesota

      

Series A 5.00% 4/1/34

      925,000        1,141,191  

Series A 5.00% 9/1/34

      2,625,000        3,274,871  

Series A 5.00% 4/1/35

      3,175,000        3,907,282  

Series A 5.00% 4/1/36

      2,650,000        3,251,444  

Series A 5.00% 4/1/37

      1,125,000        1,376,888  

Series A 5.00% 9/1/40

      1,560,000        1,914,073  

Series A 5.00% 9/1/41

      1,750,000        2,141,510  

Series A 5.00% 4/1/44

      3,000,000        3,796,080  
     

 

 

  
                106,707,497  
     

 

 

  

Electric Revenue Bonds — 8.09%

      

Chaska Electric Revenue

      

(Generating Facilities)

      

Series A 5.00% 10/1/28

      350,000        422,772  

Series A 5.00% 10/1/30

      1,150,000        1,380,219  

Minnesota Municipal Power Agency Electric Revenue

      

4.00% 10/1/41

      1,000,000        1,110,960  

5.00% 10/1/29

      395,000        463,536  

5.00% 10/1/30

      500,000        586,095  

5.00% 10/1/33

      1,205,000        1,409,838  

5.00% 10/1/47

      2,000,000        2,407,720  

Series A 5.00% 10/1/30

      1,060,000        1,242,521  

Series A 5.00% 10/1/34

      750,000        877,493  

Series A 5.00% 10/1/35

      1,525,000        1,784,235  

Northern Municipal Power Agency Electric System Revenue

      

5.00% 1/1/27

      540,000        660,431  

5.00% 1/1/28

      350,000        426,013  

5.00% 1/1/28

      210,000        262,195  

5.00% 1/1/29

      585,000        708,306  

5.00% 1/1/29

      220,000        272,444  

5.00% 1/1/30

      520,000        626,002  

5.00% 1/1/31

      200,000        244,528  

5.00% 1/1/32

      210,000        255,257  

5.00% 1/1/35

      160,000        192,432  

5.00% 1/1/36

      180,000        215,791  

5.00% 1/1/41

      400,000        473,948  

 

30

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Electric Revenue Bonds (continued)

      

Northern Municipal Power Agency Electric System Revenue

      

Series A 5.00% 1/1/25

      125,000      $ 137,793  

Series A 5.00% 1/1/26

      425,000        468,078  

Series A 5.00% 1/1/31

      520,000        568,766  

Puerto Rico Electric Power Authority Revenue

      

Series A 5.05% 7/1/42 ‡

      430,000        296,700  

Series AAA 5.25% 7/1/25 ‡

      250,000        172,813  

Series CCC 5.25% 7/1/27 ‡

      1,875,000        1,296,094  

Series WW 5.00% 7/1/28 ‡

      1,775,000        1,224,750  

Series WW 5.25% 7/1/33 ‡

      1,250,000        864,062  

Series XX 4.75% 7/1/26 ‡

      260,000        178,100  

Series XX 5.25% 7/1/40 ‡

      750,000        518,437  

Series XX 5.75% 7/1/36 ‡

      925,000        645,187  

Series ZZ 4.75% 7/1/27 ‡

      210,000        143,850  

Series ZZ 5.25% 7/1/24 ‡

      350,000        241,938  

Rochester Electric Utility Revenue

      

Series A 5.00% 12/1/42

      1,395,000        1,680,863  

Series A 5.00% 12/1/47

      2,265,000        2,712,723  

Series B 5.00% 12/1/27

      295,000        337,380  

Series B 5.00% 12/1/28

      275,000        314,218  

Series B 5.00% 12/1/31

      1,365,000        1,553,506  

Series B 5.00% 12/1/33

      300,000        339,978  

Southern Minnesota Municipal Power Agency Revenue

      

Series A 5.00% 1/1/41

      1,310,000        1,554,603  

Series A 5.00% 1/1/42

      1,500,000        1,828,500  

Series A 5.00% 1/1/46

      2,000,000        2,361,020  

Series A 5.00% 1/1/47

      3,130,000        3,785,610  

Southern Minnesota Municipal Power Agency Revenue Capital Appreciation

      

Series A 1.275% 1/1/25 (NATL)^

      5,000,000        4,836,200  

St. Paul Housing & Redevelopment Energy Revenue

      

Series A 4.00% 10/1/30

      1,235,000        1,436,058  

Series A 4.00% 10/1/31

      885,000        1,020,688  

Series A 4.00% 10/1/33

      365,000        416,195  
     

 

 

  
                46,956,846  
     

 

 

  

Healthcare Revenue Bonds — 23.58%

      

Anoka Healthcare & Housing Facilities Revenue

      

(The Homestead at Anoka Project)

      

5.125% 11/1/49

      1,100,000        1,102,167  

5.375% 11/1/34

      320,000        330,381  

 

31

Table of Contents

Schedules of investments

Delaware Tax-Free Minnesota Fund

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Apple Valley Senior Housing Revenue

      

(PHS Apple Valley Senior Housing, Inc. - Orchard Path Project)

      

5.00% 9/1/43

      465,000      $ 480,554  

5.00% 9/1/58

      3,220,000                3,301,466  

Apple Valley Senior Living Revenue

      

(Senior Living LLC Project)

      

2nd Tier Series B 5.00% 1/1/47

      1,725,000        1,144,865  

2nd Tier Series B 5.25% 1/1/37

      505,000        386,785  

4th Tier Series D 7.00% 1/1/37

      1,665,000        1,323,941  

4th Tier Series D 7.25% 1/1/52

      2,500,000        1,892,875  

Bethel Housing & Health Care Facilities Revenue

      

(Benedictine Health System – St. Peter

      

Communities Project)

      

Series A 5.50% 12/1/48

      2,350,000        2,258,703  

Bethel Senior Housing Revenue

      

(The Lodge at The Lakes at Stillwater Project)

      

5.00% 6/1/38

      450,000        459,491  

5.00% 6/1/48

      1,000,000        1,007,900  

5.00% 6/1/53

      2,450,000        2,464,210  

Center City Health Care Facilities Revenue

      

(Hazelden Betty Ford Foundation Project)

      

4.00% 11/1/34

      500,000        559,655  

4.00% 11/1/41

      800,000        880,720  

5.00% 11/1/26

      500,000        567,165  

Chatfield Healthcare and Housing Facilities Revenue

      

(Chosen Valley Care Center Project)

      

5.00% 9/1/44

      500,000        470,710  

Crookston Health Care Facilities Revenue

      

(Riverview Health Project)

      

5.00% 5/1/38

      100,000        100,064  

5.00% 5/1/44

      1,500,000        1,487,730  

5.00% 5/1/51

      1,585,000        1,535,199  

Dakota County Community Development Agency Senior Housing Revenue

      

(Walker Highview Hills Project)

      

Series A 144A 5.00% 8/1/36 #

      280,000        290,492  

Series A 144A 5.00% 8/1/46 #

      2,380,000        2,457,516  

Deephaven Housing & Healthcare Revenue

      

(St. Therese Senior Living Project)

      

Series A 5.00% 4/1/38

      730,000        675,221  

Series A 5.00% 4/1/40

      705,000        644,088  

Series A 5.00% 4/1/48

      315,000        280,117  

 

32

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Duluth Economic Development Authority

      

(Essentia Health Obligated Group)

      

Series A 4.25% 2/15/43

      2,000,000      $ 2,196,160  

Series A 5.00% 2/15/48

      1,850,000        2,130,848  

(St. Luke’s Hospital of Duluth Obligated Group)

      

5.75% 6/15/32

      3,750,000        3,972,150  

6.00% 6/15/39

      3,570,000        3,779,095  

Glencoe Health Care Facilities Revenue

      

(Glencoe Regional Health Services Project)

      

4.00% 4/1/24

      500,000        523,850  

4.00% 4/1/25

      660,000        689,799  

4.00% 4/1/31

      60,000        61,808  

Hayward Health Care Facilities Revenue

      

(American Baptist Homes Midwest Obligated Group)

      

5.375% 8/1/34

      660,000        634,649  

5.75% 2/1/44

      500,000        483,745  

(St. John’s Lutheran Home of Albert Lea Project)

      

5.375% 10/1/44

      575,000        535,026  

Maple Grove Health Care Facilities Revenue

      

(Maple Grove Hospital Corporation)

      

4.00% 5/1/37

      2,000,000                2,140,740  

5.00% 5/1/27

      1,400,000        1,669,248  

5.00% 5/1/29

      1,000,000        1,178,770  

5.00% 5/1/30

      850,000        998,129  

5.00% 5/1/31

      500,000        584,350  

5.00% 5/1/32

      500,000        581,295  

(North Memorial Health Care)

      

5.00% 9/1/31

      1,000,000        1,132,580  

5.00% 9/1/32

      1,000,000        1,127,700  

Maple Plain Senior Housing & Health Care Revenue

      

(Haven Homes Project)

      

5.00% 7/1/54

      3,500,000        3,585,155  

Minneapolis Health Care System Revenue

      

(Fairview Health Services)

      

Series A 4.00% 11/15/48

      5,600,000        6,265,896  

Series A 5.00% 11/15/33

      500,000        580,735  

Series A 5.00% 11/15/34

      500,000        579,630  

Series A 5.00% 11/15/35

      1,000,000        1,239,650  

Series A 5.00% 11/15/44

      1,000,000        1,137,730  

Series A 5.00% 11/15/49

      3,475,000        4,183,344  

 

33

Table of Contents

Schedules of investments

Delaware Tax-Free Minnesota Fund

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Minneapolis Senior Housing & Healthcare Revenue

      

(Ecumen-Abiitan Mill City Project)

      

5.00% 11/1/35

      500,000      $         502,070  

5.25% 11/1/45

      1,950,000        1,954,173  

5.375% 11/1/50

      455,000        456,811  

Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue

      

(Allina Health System)

      

Series A 5.00% 11/15/28

      1,550,000        1,935,919  

Red Wing Senior Housing

      

(Deer Crest Project)

      

Series A 5.00% 11/1/27

      430,000        434,730  

Series A 5.00% 11/1/32

      330,000        333,590  

Series A 5.00% 11/1/42

      1,250,000        1,263,350  

Rochester Health Care & Housing Revenue

      

(The Homestead at Rochester Project)

      

Series A 6.875% 12/1/48

      2,980,000        3,206,242  

Rochester Health Care Facilities Revenue

      

(Mayo Clinic)

      

4.00% 11/15/41

      4,515,000        4,663,498  

(Olmsted Medical Center Project)

      

5.00% 7/1/24

      295,000        329,524  

5.00% 7/1/33

      650,000        707,311  

5.875% 7/1/30

      1,850,000        1,856,623  

Sartell Health Care Facilities Revenue

      

(Country Manor Campus Project)

      

Series A 5.25% 9/1/27

      1,280,000        1,301,568  

Series A 5.30% 9/1/37

      1,200,000        1,215,228  

Sauk Rapids Health Care Housing Facilities Revenue

      

(Good Shepherd Lutheran Home)

      

5.125% 1/1/39

      1,350,000        1,331,748  

Shakopee Health Care Facilities Revenue

      

(St. Francis Regional Medical Center)

      

4.00% 9/1/31

      915,000        981,868  

5.00% 9/1/24

      575,000        665,770  

5.00% 9/1/25

      750,000        862,717  

5.00% 9/1/26

      575,000        658,231  

5.00% 9/1/27

      405,000        462,316  

5.00% 9/1/28

      425,000        481,534  

5.00% 9/1/29

      425,000        480,080  

5.00% 9/1/34

      730,000        805,489  

 

34

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

St. Cloud Health Care Revenue

      

(Centracare Health System Project)

      

4.00% 5/1/49

      5,315,000      $         5,930,743  

5.00% 5/1/48

      5,090,000        6,174,272  

Series A 4.00% 5/1/37

      965,000        1,058,991  

Series A 5.00% 5/1/46

      3,715,000        4,284,695  

Unrefunded Balance 5.125% 5/1/30

      740,000        742,286  

St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue

      

(Fairview Health Services)

      

Series A 4.00% 11/15/43

      2,450,000        2,723,836  

Series A 5.00% 11/15/47

      1,560,000        1,845,808  

(HealthPartners Obligated Group Project)

      

Series A 5.00% 7/1/29

      2,200,000        2,564,892  

Series A 5.00% 7/1/32

      3,000,000        3,450,360  

Series A 5.00% 7/1/33

      1,260,000        1,444,414  

St. Paul Housing & Redevelopment Authority Housing & Health Care Facilities Revenue

      

(Episcopal Homes Project)

     3,100,000        2,881,543  

5.125% 5/1/48

      

St. Paul Housing & Redevelopment Authority Multifamily Housing Revenue

      

(Marian Center Project)

      

Series A 5.30% 11/1/30

      500,000        499,975  

Series A 5.375% 5/1/43

      500,000        469,155  

Wayzata Senior Housing Revenue

      

(Folkestone Senior Living Community)

     500,000        495,255  

3.75% 8/1/36

      

4.00% 8/1/44

      800,000        797,536  

5.00% 8/1/49

      1,000,000        1,048,410  

5.00% 8/1/54

      875,000        913,623  

West St. Paul Housing and Health Care Facilities Revenue

      

(Walker Westwood Ridge Campus Project)

      

4.50% 11/1/40

      250,000        241,618  

4.75% 11/1/52

      750,000        717,802  

Winona Health Care Facilities Revenue

      

(Winona Health Obligation Group)

      

4.50% 7/1/25

      850,000        871,743  

4.65% 7/1/26

      540,000        553,921  

 

35

Table of Contents

Schedules of investments

Delaware Tax-Free Minnesota Fund

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Woodbury Housing & Redevelopment Authority Revenue

      

(St. Therese of Woodbury)

      

5.00% 12/1/34

      500,000      $         510,115  

5.125% 12/1/44

      1,605,000        1,626,555  
     

 

 

  
        136,832,035  
     

 

 

  

Housing Revenue Bonds — 0.40%

      

Minnesota Housing Finance Agency

      

Homeownership Finance (Mortgage-Backed Securities Program)

      

Series D 4.70% 1/1/31 (GNMA) (FNMA) (FHLMC)

      920,000        944,095  

Northwest Multi-County Housing & Redevelopment Authority

      

(Pooled Housing Program)

      

5.50% 7/1/45

      1,330,000        1,373,557  
     

 

 

  
        2,317,652  
     

 

 

  

Lease Revenue Bonds — 2.92%

      

Minnesota General Fund Revenue Appropriations

      

Series A 5.00% 6/1/38

      1,250,000        1,374,900  

Series A 5.00% 6/1/43

      3,835,000        4,199,632  

Series B 5.00% 3/1/28

      2,500,000        2,666,200  

Series B 5.00% 3/1/29

      1,000,000        1,065,860  

Minnesota Housing Finance Agency

      

(State Appropriation — Housing Infrastructure)

      

Series C 5.00% 8/1/34

      1,565,000        1,801,957  

Series C 5.00% 8/1/35

      1,645,000        1,889,973  

University of Minnesota Special Purpose Revenue

      

(State Supported Biomed Science Research

      

Facilities Funding Project)

      

Series A 5.00% 8/1/35

      3,960,000        3,974,414  
     

 

 

  
        16,972,936  
     

 

 

  

Local General Obligation Bonds — 12.23%

      

Brainerd Independent School District No. 181

      

(School Building)

      

Series A 4.00% 2/1/38

      1,500,000        1,722,060  

Series A 4.00% 2/1/43

      3,500,000        3,975,300  

Burnsville-Eagan-Savage Independent School District No. 191

      

(Alternative Facilities)

      

Series A 4.00% 2/1/28

      920,000        1,040,824  

Series A 4.00% 2/1/29

      1,800,000        2,030,166  

 

36

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Local General Obligation Bonds (continued)

      

Chaska Independent School District No. 112

      

(School Building)

      

Series A 5.00% 2/1/27

      1,905,000      $         2,347,665  

Duluth

      

(DECC Improvement)

      

Series A 5.00% 2/1/32

      1,000,000        1,219,260  

Series A 5.00% 2/1/33

      3,585,000        4,356,205  

Duluth Independent School District No. 709

      

Series A 4.00% 2/1/27

      160,000        184,590  

Series A 4.00% 2/1/28

      1,250,000        1,436,863  

Hennepin County

      

Series A 5.00% 12/1/26

      2,635,000        3,366,028  

Series A 5.00% 12/1/36

      940,000        1,169,990  

Series A 5.00% 12/1/37

      2,850,000        3,602,200  

Series A 5.00% 12/1/37

      2,645,000        3,288,502  

Series A 5.00% 12/1/38

      3,310,000        4,173,016  

Series B 5.00% 12/1/30

      1,000,000        1,261,970  

Series C 5.00% 12/1/28

      1,500,000        2,018,070  

Series C 5.00% 12/1/30

      1,245,000        1,571,153  

Series C 5.00% 12/1/37

      3,000,000        3,729,870  

Mahtomedi Independent School District No. 832

      

(School Building)

      

Series A 5.00% 2/1/30

      445,000        532,803  

Minneapolis Special School District No. 1

      

Series A 4.00% 2/1/36

      450,000        538,583  

Series A 4.00% 2/1/37

      600,000        715,422  

Series A 4.00% 2/1/38

      625,000        742,906  

Series B 4.00% 2/1/36

      945,000        1,131,023  

Series B 4.00% 2/1/37

      1,255,000        1,496,425  

Series B 4.00% 2/1/38

      1,305,000        1,551,188  

Mounds View Independent School District No. 621

      

(Minnesota School District Credit Enhancement Program)

      

Series A 4.00% 2/1/43

      3,000,000        3,401,550  

Mountain Iron-Buhl Independent School District No. 712

      

(School Building)

      

Series A 4.00% 2/1/26

      1,315,000        1,559,156  

St. Michael-Albertville Independent School District No. 885

      

(School Building)

      

Series A 5.00% 2/1/27

      1,865,000        2,296,132  

 

37

Table of Contents

Schedules of investments

Delaware Tax-Free Minnesota Fund

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Local General Obligation Bonds (continued)

      

Virginia, Minnesota Sales Tax Revenue

      

(General Obligation Sales Tax)

      

Series A 4.00% 2/1/35 (AGM)

      500,000      $         579,295  

Wayzata Independent School District No. 284

      

Series A 5.00% 2/1/28

      1,950,000        2,492,685  

White Bear Lake Independent School District No. 624

      

Series A 3.00% 2/1/43

      10,645,000        11,403,775  
     

 

 

  
        70,934,675  
     

 

 

  

Pre-Refunded/Escrowed to Maturity Bonds — 7.28%

      

Dakota & Washington Counties Housing & Redevelopment Authority Single Family Residential Mortgage Revenue

      

(City of Bloomington)

      

Series B 8.375% 9/1/21 (GNMA) (AMT)

      14,115,000        15,188,163  

Minnesota

      

Series A Unrefunded

      

Balance 5.00% 10/1/24-21 §

      2,555,000        2,688,167  

Series A Unrefunded

      

Balance 5.00% 10/1/27-21 §

      5,200,000        5,471,024  

(State Trunk Highway)

      

Series B 5.00% 10/1/29-21 §

      5,000,000        5,260,600  

Minnesota Higher Education Facilities Authority Revenue

      

(St. Catherine University)

      

Series 7-Q 5.00% 10/1/23-22 §

      350,000        384,479  

Series 7-Q 5.00% 10/1/24-22 §

      475,000        521,792  

Series 7-Q 5.00% 10/1/27-22 §

      200,000        219,702  

St. Paul Housing & Redevelopment Authority Hospital Facility Revenue

      

(Healtheast Care System Project)

      

Series A 5.00% 11/15/29-25 §

      910,000        1,126,380  

Series A 5.00% 11/15/30-25 §

      670,000        829,312  

University of Minnesota

      

Series A 5.50% 7/1/21

      2,365,000        2,462,675  

Western Minnesota Municipal Power Agency Revenue

      

Series A 5.00% 1/1/34-24 §

      4,000,000        4,625,440  

Series A 5.00% 1/1/46-24 §

      3,000,000        3,469,080  
     

 

 

  
        42,246,814  
     

 

 

  

 

38

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Special Tax Revenue Bonds — 4.60%

      

Minneapolis Development Revenue

      

(Limited Tax Supported Common Bond Fund)

      

Series 2-A 6.00% 12/1/40

      3,000,000      $         3,041,670  

Minneapolis Revenue

      

(YMCA Greater Twin Cities Project)

      

4.00% 6/1/30

      250,000        271,160  

Puerto Rico Sales Tax Financing Revenue

      

(Restructured)

      

Series A-1 4.75% 7/1/53

      17,908,000        18,822,024  

St. Paul Sales Tax Revenue

      

Series G 5.00% 11/1/30

      655,000        769,566  

Series G 5.00% 11/1/31

      1,500,000        1,758,990  

Virgin Islands Public Finance Authority

      

(Matching Fund Senior Lien)

      

5.00% 10/1/29 (AGM)

      2,000,000        2,038,320  
     

 

 

  
        26,701,730  
     

 

 

  

State General Obligation Bonds — 9.80%

      

Commonwealth of Puerto Rico

      

(Public Improvement)

      

Series B 5.75% 7/1/38 ‡

      2,530,000        1,793,138  

Minnesota

      

Series A 5.00% 8/1/40

      1,750,000        2,329,337  

(State Trunk Highway)

      

Series E 5.00% 10/1/26

      3,395,000        4,324,857  

(Various Purposes)

      

Series A 5.00% 8/1/27

      7,590,000        9,296,991  

Series A 5.00% 8/1/29

      2,500,000        3,048,625  

Series A 5.00% 8/1/30

      4,200,000        4,931,304  

Series A 5.00% 8/1/32

      3,875,000        4,531,619  

Series A 5.00% 8/1/33

      2,075,000        2,694,657  

Series A 5.00% 10/1/33

      3,000,000        3,812,340  

Series A 5.00% 8/1/35

      2,975,000        3,838,464  

Series A 5.00% 8/1/38

      3,450,000        4,408,341  

Series A Unrefunded Balance 4.00% 8/1/27

      955,000        1,018,517  

Series D 5.00% 8/1/26

      6,000,000        7,606,080  

Series D 5.00% 8/1/27

      2,525,000        3,195,842  
     

 

 

  
        56,830,112  
     

 

 

  

Transportation Revenue Bonds — 6.70%

      

Minneapolis – St. Paul Metropolitan Airports Commission Revenue

      

(Senior)

      

Series C 5.00% 1/1/29

      350,000        431,263  

 

39

Table of Contents

Schedules of investments

Delaware Tax-Free Minnesota Fund

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Transportation Revenue Bonds (continued)

      

Minneapolis – St. Paul Metropolitan Airports

      

Commission Revenue

      

(Senior)

      

Series C 5.00% 1/1/33

      850,000      $         1,025,865  

Series C 5.00% 1/1/36

      600,000        717,714  

Series C 5.00% 1/1/41

      600,000        709,350  

Series C 5.00% 1/1/46

      1,595,000        1,870,265  

(Subordinate)

      

Series A 5.00% 1/1/35

      1,000,000        1,112,440  

Series A 5.00% 1/1/44

      3,000,000        3,646,500  

Series A 5.00% 1/1/49

      5,000,000        6,038,950  

Series B 5.00% 1/1/26

      575,000        606,625  

Series B 5.00% 1/1/27

      1,160,000        1,223,324  

Series B 5.00% 1/1/28

      2,750,000        2,898,225  

Series B 5.00% 1/1/29

      120,000        126,386  

Series B 5.00% 1/1/30

      1,675,000        1,762,770  

Series B 5.00% 1/1/31

      1,750,000        1,840,020  

Series B 5.00% 1/1/44 (AMT)

      3,595,000        4,309,291  

Series B 5.00% 1/1/49 (AMT)

      6,150,000        7,325,327  

St. Paul Port Authority Revenue

      

(Amherst H. Wilder Foundation)

      

Series 3 5.00% 12/1/36

      3,200,000        3,208,032  
     

 

 

  
        38,852,347  
     

 

 

  

Water & Sewer Revenue Bonds — 3.09%

      

Guam Government Waterworks Authority

      

5.00% 7/1/40

      1,930,000        2,240,769  

Metropolitan Council General Obligation Wastewater Revenue

      

(Minneapolis-St. Paul Metropolitan Area)

      

Series B 4.00% 9/1/27

      2,400,000        2,567,664  

Series B 5.00% 9/1/25

      2,000,000        2,185,680  

Series C 4.00% 3/1/31

      3,120,000        3,714,921  

Series C 4.00% 3/1/32

      3,225,000        3,815,820  

Series E 5.00% 9/1/23

      2,000,000        2,190,320  

Minnesota Public Facilities Authority

      

Series B 4.00% 3/1/26

      1,000,000        1,194,430  
     

 

 

  
        17,909,604  
     

 

 

  

Total Municipal Bonds (cost $541,138,413)

         567,649,257  
     

 

 

  

 

40

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

 

  

Short-Term Investments — 1.08%

      

 

  

Variable Rate Demand Notes — 1.08%¤

      

Minneapolis Health Care System Revenue

      

(Fairview Health Services) Series C

      

0.03% 11/15/48 (LOC – Wells Fargo Bank N.A.)

      100,000      $ 100,000  

Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue

      

(Children’s Hospitals and Clinics)

      

Series A-1 0.02% 8/15/37 (AGM) (SPA – US Bank N.A.)

      1,300,000        1,300,000  

Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Revenue

      

(Allina Health System)

      

Series B-1 0.02% 11/15/35 (LOC – JPMorgan Chase Bank N.A.)

      4,850,000        4,850,000  
     

 

 

  

Total Short-Term Investments (cost $6,250,000)

         6,250,000  
     

 

 

  

Total Value of Securities—98.92%

      

(cost $547,388,413)

       $       573,899,257  
     

 

 

  

 

°

Principal amount shown is stated in USD unless noted that the security is denominated in another currency.

 

#

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $11,156,707, which represents 1.17% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”

 

‡

Non-income producing security. Security is currently in default.

 

^

Zero-coupon security. The rate shown is the effective yield at the time of purchase.

 

§

Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 8 in “Notes to financial statements.”

 

¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of August 31, 2020.

Summary of abbreviations:

AGM – Insured by Assured Guaranty Municipal Corporation

AMT – Subject to Alternative Minimum Tax

FHLMC – Federal Home Loan Mortgage Corporation

FNMA – Federal National Mortgage Association

GNMA – Government National Mortgage Association

LLC – Limited Liability Corporation

 

41

Table of Contents

Schedules of investments

Delaware Tax-Free Minnesota Fund

 

Summary of abbreviations: (continued)

LOC – Letter of Credit

N.A. – National Association

NATL – Insured by National Public Finance Guarantee Corporation

SPA – Stand-by Purchase Agreement

USD – US Dollar

See accompanying notes, which are an integral part of the financial statements.

 

42

Table of Contents
Schedules of investments   
Delaware Tax-Free Minnesota Intermediate Fund    August 31, 2020

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds — 97.53%

      

 

  

Corporate Revenue Bond — 0.53%

      

St. Paul Port Authority Solid Waste Disposal Revenue

      

(Gerdau St. Paul Steel Mill Project)

      

Series 7 144A 4.50% 10/1/37 (AMT)#

      460,000      $             463,381  
     

 

 

  
        463,381  
     

 

 

  

Education Revenue Bonds — 13.28%

      

Bethel Charter School Lease Revenue

      

(Spectrum High School Project)

      

Series A 4.00% 7/1/32

      425,000        443,572  

Brooklyn Park Charter School Lease Revenue

      

(Prairie Seeds Academy Project)

      

Series A 5.00% 3/1/34

      485,000        496,160  

Cologne Charter School Lease Revenue

      

(Cologne Academy Project)

      

Series A 5.00% 7/1/29

      305,000        328,052  

Duluth Housing & Redevelopment Authority Revenue

      

(Duluth Public Schools Academy Project)

      

Series A 5.00% 11/1/38

      400,000        428,468  

Forest Lake Charter School Lease Revenue Fund

      

(Lakes International Language Academy Project)

      

Series A 5.50% 8/1/36

      420,000        442,462  

Hugo Charter School Lease Revenue

      

(Noble Academy Project)

      

Series A 5.00% 7/1/29

      530,000        562,738  

Minneapolis Charter School Lease Revenue

      

(Hiawatha Academies Project)

      

Series A 5.00% 7/1/31

      500,000        533,350  

Minneapolis Student Housing Revenue

      

(Riverton Community Housing Project)

      

5.25% 8/1/39

      525,000        530,334  

Minnesota Higher Education Facilities Authority Revenue

      

(Bethel University)

      

5.00% 5/1/32

      525,000        580,975  

(Gustavus Adolphus College)

      

5.00% 10/1/34

      435,000        503,834  

5.00% 10/1/35

      555,000        640,553  

(St. Catherine University)

      

Series A 5.00% 10/1/35

      565,000        654,242  

(St. John’s University)

      

Series 8-I 5.00% 10/1/31

      130,000        150,294  

 

43

Table of Contents

Schedules of investments

Delaware Tax-Free Minnesota Intermediate Fund

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Education Revenue Bonds (continued)

      

(St. Olaf College)

      

Series 8-G 5.00% 12/1/31

      125,000      $ 147,139  

Series 8-G 5.00% 12/1/32

      125,000        146,518  

(University of St. Thomas)

      

4.00% 10/1/36

      300,000        339,276  

5.00% 10/1/34

      350,000        434,378  

5.00% 10/1/35

      750,000        926,730  

Series 7-U 4.00% 4/1/26

      1,400,000              1,496,726  

Series A 5.00% 10/1/29

      630,000        772,626  

Rice County Educational Facilities Revenue

      

(Shattuck-St. Mary’s School)

      

Series A 144A 5.00% 8/1/22 #

      325,000        332,501  

St. Paul Housing & Redevelopment Authority Charter School Lease Revenue

      

(Academia Cesar Chavez School Project)

      

Series A 5.25% 7/1/50

      340,000        336,937  

(Great River School Project)

      

Series A 144A 5.25% 7/1/33 #

      140,000        151,579  

(Twin Cities Academy Project)

      

Series A 5.30% 7/1/45

      260,000        274,232  
     

 

 

  
        11,653,676  
     

 

 

  

Electric Revenue Bonds — 7.59%

      

Central Minnesota Municipal Power Agency

      

(Brookings Twin Cities Transmission Project)

      

Series E 5.00% 1/1/21

      1,095,000        1,111,841  

Series E 5.00% 1/1/23

      1,000,000        1,060,090  

Chaska Electric Revenue

      

Series A 5.00% 10/1/28

      250,000        301,980  

Minnesota Municipal Power Agency Electric Revenue

      

Series A 5.00% 10/1/29

      500,000        586,755  

Series A 5.00% 10/1/30

      240,000        281,326  

Northern Municipal Power Agency Electric System Revenue

      

5.00% 1/1/29

      150,000        181,617  

5.00% 1/1/30

      235,000        289,010  

5.00% 1/1/31

      350,000        419,136  

Series A 5.00% 1/1/25

      200,000        220,468  

Rochester Electric Utility Revenue

      

Series A 5.00% 12/1/28

      300,000        376,713  

Series A 5.00% 12/1/29

      500,000        626,125  

Series A 5.00% 12/1/31

      575,000        713,316  

 

44

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Electric Revenue Bonds (continued)

      

St. Paul Housing & Redevelopment Energy Revenue

      

Series A 4.00% 10/1/30

      425,000      $ 494,190  
     

 

 

  
              6,662,567  
     

 

 

  

Healthcare Revenue Bonds — 24.67%

      

Anoka Healthcare & Housing Facilities Revenue

      

(The Homestead at Anoka Project)

      

5.375% 11/1/34

      270,000        278,759  

Apple Valley Senior Living Revenue

      

(Senior Living LLC Project)

      

3rd Tier Series C 4.25% 1/1/27

      500,000        396,710  

3rd Tier Series C 5.00% 1/1/32

      420,000        306,940  

Bethel Housing & Health Care Facilities Revenue

      

(Benedictine Health System - St. Peter

      

Communities Project)

      

Series A 5.50% 12/1/48

      250,000        240,287  

Bethel Senior Housing Revenue

      

(The Lodge at the Lakes at Stillwater Project)

      

5.00% 6/1/38

      250,000        255,272  

Center City Health Care Facilities Revenue

      

(Hazelden Betty Ford Foundation Project)

      

5.00% 11/1/24

      600,000        684,912  

Chatfield Healthcare and Housing Facilities Revenue

      

(Chosen Valley Care Center Project)

      

4.00% 9/1/34

      100,000        86,997  

4.00% 9/1/39

      100,000        82,251  

Crookston Health Care Facilities Revenue

      

(RiverView Health Project)

      

5.00% 5/1/38

      400,000        400,256  

Dakota County Community Development Agency Senior Housing Revenue

      

(Walker Highview Hills Project)

      

Series A 144A 5.00% 8/1/36 #

      480,000        497,986  

Duluth Economic Development Authority

      

(Essentia Health Obligated Group)

      

Series A 5.00% 2/15/37

      750,000        881,550  

Series A 5.00% 2/15/48

      390,000        449,206  

(St. Luke’s Hospital of Duluth Obligated Group) 5.75% 6/15/32

      750,000        794,430  

Glencoe Health Care Facilities Revenue

      

(Glencoe Regional Health Services Project)

      

4.00% 4/1/26

      270,000        281,715  

 

45

Table of Contents

Schedules of investments

Delaware Tax-Free Minnesota Intermediate Fund

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Hayward Health Care Facilities Revenue

      

(American Baptist Homes Midwest Obligated Group)

      

4.25% 8/1/24

      463,334      $ 449,184  

Maple Grove Health Care Facilities Revenue

      

(Maple Grove Hospital Corporation)

      

4.00% 5/1/37

      500,000        535,185  

5.00% 5/1/28

      1,000,000              1,184,880  

(North Memorial Health Care)

      

5.00% 9/1/31

      320,000        362,426  

Minneapolis Health Care System Revenue

      

(Fairview Health Services)

      

Series A 5.00% 11/15/33

      500,000        580,735  

Series A 5.00% 11/15/34

      500,000        579,630  

Series A 5.00% 11/15/35

      500,000        619,825  

Series A 5.00% 11/15/49

      1,000,000        1,203,840  

Minneapolis Senior Housing & Healthcare Revenue

      

(Ecumen-Abiitan Mill City Project)

      

5.00% 11/1/35

      530,000        532,194  

Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue

      

(Allina Health System)

      

Series A 5.00% 11/15/27

      1,205,000        1,513,805  

Rochester Health Care Facilities Revenue

      

(Mayo Clinic)

      

Series C 4.50% 11/15/38 •

      925,000        960,760  

Sartell Health Care Facilities Revenue

      

(Country Manor Campus Project)

      

Series A 5.00% 9/1/21

      1,050,000        1,060,878  

Sauk Rapids Health Care Housing Facilities Revenue

      

(Good Shepherd Lutheran Home)

      

5.125% 1/1/39

      575,000        567,226  

St. Cloud Health Care Revenue

      

(Centracare Health System Project)

      

5.00% 5/1/48

      810,000        982,546  

Unrefunded Balance 5.125% 5/1/30

      360,000        361,113  

St. Paul Housing & Redevelopment Authority

      

(Minnesota Public Radio Project)

      

5.00% 12/1/25

      1,000,000        1,010,620  

 

46

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue

      

(Fairview Health Services)

      

Series A 5.00% 11/15/47

      275,000      $ 325,383  

(HealthPartners Obligated Group Project)

      

5.00% 7/1/32

      1,000,000        1,150,120  

5.00% 7/1/33

      200,000        229,272  

St. Paul Housing & Redevelopment Authority Housing & Health Care Facilities Revenue

      

(Episcopal Homes Project)

      

5.00% 5/1/33

      500,000        494,885  

Wayzata Senior Housing Revenue

      

(Folkestone Senior Living Community)

      

5.00% 8/1/34

      125,000        132,749  

5.00% 8/1/35

      150,000        159,186  

West St. Paul, Housing and Health Care Facilities Revenue

      

(Walker Westwood Ridge Campus Project)

      

5.00% 11/1/37

      500,000        508,380  

Woodbury Housing & Redevelopment Authority Revenue

      

(St. Therese of Woodbury)

      

5.00% 12/1/34

      500,000        510,115  
     

 

 

  
        21,652,208  
     

 

 

  

Housing Revenue Bond — 0.34%

      

Northwest Multi-County Housing & Redevelopment Authority

      

(Pooled Housing Program)

      

5.50% 7/1/45

      285,000        294,334  
     

 

 

  
        294,334  
     

 

 

  

Lease Revenue Bonds — 4.39%

      

Minnesota General Fund Revenue Appropriations

      

Series A 5.00% 6/1/38

      1,100,000        1,209,912  

Series A 5.00% 6/1/43

      715,000        782,982  

Series B 5.00% 3/1/27

      1,000,000              1,067,100  

Minnesota Housing Finance Agency State Appropriation

      

(Housing Infrastructure)

      

Series A 4.00% 8/1/33

      655,000        796,847  
     

 

 

  
        3,856,841  
     

 

 

  

 

47

Table of Contents

Schedules of investments

Delaware Tax-Free Minnesota Intermediate Fund

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Local General Obligation Bonds — 17.20%

      

Chaska Independent School District No. 112

      

(School Building)

      

Series A 5.00% 2/1/28

      1,000,000      $ 1,227,580  

Duluth Independent School District No. 709

      

Series A 4.00% 2/1/28

      250,000        287,372  

Hennepin County

      

Series A 5.00% 12/1/36

      1,500,000        1,867,005  

Series A 5.00% 12/1/38

      1,055,000        1,330,070  

Series C 5.00% 12/1/30

      1,500,000        1,892,955  

Hennepin County Regional Railroad Authority

      

Series D 5.00% 12/1/30

      2,365,000        3,319,041  

Minneapolis Special School District No. 1

      

Series A 4.00% 2/1/36

      220,000        263,307  

Series B 4.00% 2/1/36

      465,000        556,535  

St. Michael-Albertville Independent School District No. 885

      

(School Building)

      

Series A 5.00% 2/1/27

      500,000        615,585  

Virginia, Minnesota

      

(General Obligation Sales Tax Revenue)

      

Series A 4.00% 2/1/38 (AGM)

      1,000,000        1,147,180  

White Bear Lake Independent School District No. 624

      

Series A 3.00% 2/1/43

      2,420,000              2,592,498  
     

 

 

  
        15,099,128  
     

 

 

  

Pre-Refunded/Escrowed to Maturity Bonds — 8.49%

      

Minnesota

      

Series A 5.00% 10/1/24-21 §

      2,000,000        2,104,240  

Minnesota Higher Education Facilities Authority Revenue

      

(St. Catherine University)

      

Series 7-Q 5.00% 10/1/22

      425,000        466,867  

St. Paul Housing & Redevelopment Authority Hospital Revenue

      

(Healtheast Care System Project)

      

Series A 5.00% 11/15/29-25 §

      165,000        204,234  

Series A 5.00% 11/15/30-25 §

      120,000        148,533  

University of Minnesota

      

Series A 5.00% 12/1/23-20 §

      1,000,000        1,011,910  

Series A 5.25% 12/1/29-20 §

      1,000,000        1,012,520  

Series D 5.00% 12/1/26-21 §

      1,000,000        1,059,370  

 

48

Table of Contents

    

    

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Pre-Refunded/Escrowed to Maturity Bonds (continued)

      

Western Minnesota Municipal Power Agency Revenue

      

Series A 5.00% 1/1/33-24 §

      1,250,000      $ 1,445,450  
     

 

 

  
        7,453,124  
     

 

 

  

Special Tax Revenue Bonds — 3.32%

      

Minneapolis Revenue

      

(YMCA Greater Twin Cities Project)

      

4.00% 6/1/27

      100,000        111,789  

Puerto Rico Sales Tax Financing Revenue

      

(Restructured)

      

Series A1 4.55% 7/1/40

      830,000        883,934  

Series A-1 4.75% 7/1/53

      1,005,000        1,056,295  

Series A-2 4.536% 7/1/53

      378,000        391,899  

St. Paul Sales Tax Revenue

      

Series G 5.00% 11/1/28

      400,000        471,768  
     

 

 

  
        2,915,685  
     

 

 

  

State General Obligation Bonds — 9.81%

      

Commonwealth of Puerto Rico

      

(Public Improvement)

      

Series B 5.75% 7/1/38 ‡

      345,000        244,519  

Minnesota

      

Series A 5.00% 8/1/33

      285,000        370,110  

Series A 5.00% 8/1/34

      1,000,000        1,295,200  

Series A 5.00% 8/1/40

      750,000        998,287  

Series D 5.00% 8/1/26

      2,500,000        3,169,200  

Series D 5.00% 8/1/27

      1,500,000        1,898,520  

Series E 5.00% 10/1/26

      500,000        636,945  
     

 

 

  
        8,612,781  
     

 

 

  

Transportation Revenue Bonds — 5.59%

      

Minneapolis – St. Paul Metropolitan Airports Commission Revenue

      

(Subordinate)

      

Series B 5.00% 1/1/26

      710,000        749,050  

Series B 5.00% 1/1/31

      750,000        788,580  

Series B 5.00% 1/1/44 (AMT)

      1,600,000        1,917,904  

St. Paul Housing & Redevelopment Authority

      

(Parking Enterprise)

      

Series A 4.00% 8/1/26

      450,000        489,641  

Series A 4.00% 8/1/27

      545,000        589,815  

Series A 4.00% 8/1/28

      350,000        376,544  
     

 

 

  
        4,911,534  
     

 

 

  

 

49

Table of Contents

Schedules of investments

Delaware Tax-Free Minnesota Intermediate Fund

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Water & Sewer Revenue Bonds — 2.32%

      

Guam Government Waterworks Authority Water & Wastewater System Revenue

      

5.00% 7/1/37

      575,000      $ 672,181  

Metropolitan Council General Obligation

      

Wastewater Revenue (Minneapolis – St. Paul Metropolitan Area)

      

Series C 4.00% 3/1/31

      565,000        672,734  

Series C 4.00% 3/1/32

      585,000        692,172  
     

 

 

  
        2,037,087  
     

 

 

  

Total Municipal Bonds (cost $81,960,600)

         85,612,346  
     

 

 

  
               

 

  

Short-Term Investments — 1.34%

      

 

  

Variable Rate Demand Notes — 1.34%¤

      

Minneapolis Health Care System Revenue

      

(Fairview Health Services) Series C

      

0.03% 11/15/48 (LOC – Wells Fargo Bank N.A.)

      500,000        500,000  

Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue

      

(Children’s Hospitals and Clinics)

      

Series A 0.02% 9/4/20 (AGM) (SPA – US Bank N.A.)

      240,000        240,000  

Series A 0.02% 8/15/37 (AGM) (SPA – US Bank N.A.)

      200,000        200,000  

(Allina Health System)

      

Series B-2 0.02% 11/15/35 (LOC - JPMorgan Chase Bank N.A.)

      240,000        240,000  
     

 

 

  

Total Short-Term Investments (cost $1,180,000)

         1,180,000  
     

 

 

  

Total Value of Securities—98.87%
(cost $83,140,600)

       $ 86,792,346  
     

 

 

  

 

°

Principal amount shown is stated in USD unless noted that the security is denominated in another currency.

 

#

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $1,445,447, which represents 1.65% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”

 

50

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●

Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at August 31, 2020. For securities based on a published reference rate and spread, the reference rate and spread are indicated in their description above. The reference rate descriptions (i.e. LIBOR03M, LIBOR06M, etc.) used in this report are identical for different securities, but the underlying reference rates may differ due to the timing of the reset period. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their description above.

 

§

Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 8 in “Notes to financial statements.”

 

‡

Non-income producing security. Security is currently in default.

 

¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of August 31, 2020.

Summary of abbreviations:

AGM – Insured by Assured Guaranty Municipal Corporation

AMT – Subject to Alternative Minimum Tax

ICE – Intercontinental Exchange, Inc.

LIBOR – London interbank offered rate

LIBOR03M – ICE LIBOR USD 3 Month

LIBOR06M – ICE LIBOR USD 6 Month

LLC – Limited Liability Corporation

LOC – Letter of Credit

N.A. – National Association

SPA – Stand-by Purchase Agreement

USD – US Dollar

See accompanying notes, which are an integral part of the financial statements.

 

51

Table of Contents
Schedules of investments   
Delaware Minnesota High-Yield Municipal Bond Fund    August 31, 2020

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds — 97.87%

      

 

  

Corporate Revenue Bond — 1.32%

      

St. Paul Port Authority Solid Waste Disposal Revenue

      

(Gerdau St. Paul Steel Mill Project)

      

Series 7 144A 4.50% 10/1/37 (AMT)#

      2,600,000      $ 2,619,110  
     

 

 

  
        2,619,110  
     

 

 

  

Education Revenue Bonds — 21.48%

      

Bethel Charter School Lease Revenue

      

(Spectrum High School Project)

      

Series A 4.00% 7/1/37

      850,000        871,429  

Brooklyn Park Charter School Lease Revenue

      

(Prairie Seeds Academy Project)

      

Series A 5.00% 3/1/39

      1,270,000        1,287,336  

Cologne Charter School Lease Revenue

      

(Cologne Academy Project)

      

Series A 5.00% 7/1/34

      250,000        263,505  

Series A 5.00% 7/1/45

      230,000        239,241  

Columbia Heights, Minnesota Charter School Lease Revenue

      

(Prodeo Academy Project)

      

Series A 5.00% 7/1/54

      1,000,000        1,016,350  

Deephaven Charter School Lease Revenue

      

(Eagle Ridge Academy Project)

      

Series A 5.50% 7/1/50

      1,000,000        1,083,500  

Duluth Housing & Redevelopment Authority Revenue

      

(Duluth Public Schools Academy Project)

      

Series A 5.00% 11/1/48

      1,000,000        1,056,880  

Forest Lake Charter School Lease Revenue Fund

      

(Lakes International Language Academy)

      

Series A 5.375% 8/1/50

      660,000        716,410  

Series A 5.75% 8/1/44

      585,000        618,521  

Ham Lake Charter School Lease Revenue

      

(Davinci Academy Project)

      

Series A 5.00% 7/1/36

      235,000        250,063  

Series A 5.00% 7/1/47

      710,000        746,182  

(Parnassus Preparatory School Project)

      

Series A 5.00% 11/1/47

      650,000        685,529  

Hugo Charter School Lease Revenue

      

(Noble Academy Project)

      

Series A 5.00% 7/1/34

      165,000        171,869  

Series A 5.00% 7/1/44

      495,000        508,850  

 

52

Table of Contents

    

    

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Education Revenue Bonds (continued)

      

Minneapolis Charter School Lease Revenue

      

(Hiawatha Academies Project)

      

Series A 5.00% 7/1/36

      1,000,000      $ 1,048,310  

Series A 5.00% 7/1/47

      800,000        828,976  

Minneapolis Student Housing Revenue

      

(Riverton Community Housing Project)

      

5.25% 8/1/39

      800,000        808,128  

144A 4.75% 8/1/43 #

      750,000        738,645  

144A 5.00% 8/1/53 #

      570,000        576,076  

Minnesota Higher Education Facilities Authority Revenue

      

(Bethel University)

      

5.00% 5/1/47

      1,500,000        1,601,730  

(Carleton College)

      

4.00% 3/1/37

      635,000        729,285  

(Gustavus Adolphus College)

      

5.00% 10/1/47

      1,000,000        1,126,670  

(Minneapolis College of Art & Design)

      

4.00% 5/1/24

      250,000        261,945  

4.00% 5/1/25

      200,000        209,118  

4.00% 5/1/26

      100,000        104,285  

(St. Catherine University)

      

Series A 4.00% 10/1/37

      580,000        613,588  

Series A 5.00% 10/1/45

      670,000        756,711  

(St. John’s University)

      

Series 8-I 5.00% 10/1/34

      215,000        246,306  

(St. Olaf College)

      

Series 8-G 5.00% 12/1/31

      205,000        241,307  

Series 8-G 5.00% 12/1/32

      205,000        240,289  

Series 8-N 4.00% 10/1/34

      800,000        892,456  

Series 8-N 4.00% 10/1/35

      590,000        656,104  

(Trustees of the Hamline University of Minnesota)

      

Series B 5.00% 10/1/37

      300,000        323,742  

Series B 5.00% 10/1/39

      770,000        827,065  

(University of St. Thomas)

      

4.00% 10/1/37

      500,000        563,555  

4.00% 10/1/41

      1,000,000        1,109,190  

4.00% 10/1/44

      950,000        1,046,282  

Series A 4.00% 10/1/35

      400,000        446,080  

Otsego Charter School Lease Revenue

      

(Kaleidoscope Charter School)

      

Series A 5.00% 9/1/44

      1,435,000        1,454,172  

 

53

Table of Contents

Schedules of investments

Delaware Minnesota High-Yield Municipal Bond Fund

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Education Revenue Bonds (continued)

      

Rice County Educational Facilities Revenue

      

(Shattuck-St. Mary’s School)

      

Series A 144A 5.00% 8/1/22 #

      770,000      $ 787,772  

St. Cloud Charter School Lease Revenue

      

(Stride Academy Project)

      

Series A 5.00% 4/1/46

      750,000        510,000  

St. Paul Housing & Redevelopment Authority Charter School Lease Revenue

      

(Academia Cesar Chavez School Project)

      

Series A 5.25% 7/1/50

      1,750,000        1,734,232  

(Great River School Project)

      

Series A 144A 5.50% 7/1/52 #

      265,000        282,503  

(Hmong College Preparatory Academy Project)

      

Series A 5.75% 9/1/46

      500,000        552,980  

Series A 6.00% 9/1/51

      3,500,000        3,907,505  

(Nova Classical Academy Project)

      

Series A 4.00% 9/1/36

      1,270,000        1,337,539  

Series A 4.125% 9/1/47

      500,000        519,525  

(Twin Cities Academy Project)

      

Series A 5.375% 7/1/50

      1,500,000        1,583,625  

University of Minnesota

      

Series A 5.00% 4/1/34

      2,115,000        2,609,318  

Series A 5.00% 9/1/40

      900,000        1,104,273  

Series A 5.00% 9/1/41

      620,000        758,706  
     

 

 

  
        42,653,658  
     

 

 

  

Electric Revenue Bonds — 5.93%

      

Central Minnesota Municipal Power Agency

      

(Brookings Twin Cities Transmission Project)

      

5.00% 1/1/42

      1,500,000        1,586,205  

Hutchinson Utilities Commission Revenue

      

Series A 5.00% 12/1/22

      490,000        542,121  

Series A 5.00% 12/1/26

      360,000        396,238  

Minnesota Municipal Power Agency Electric Revenue

      

5.00% 10/1/27

      165,000        193,994  

5.00% 10/1/47

      745,000        896,876  

Series A 5.00% 10/1/28

      500,000        587,420  

Northern Municipal Power Agency Electric System Revenue

      

5.00% 1/1/26

      500,000        614,160  

5.00% 1/1/28

      500,000        608,590  

5.00% 1/1/29

      470,000        569,066  

 

54

Table of Contents

    

    

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Electric Revenue Bonds (continued)

      

Northern Municipal Power Agency Electric System Revenue

      

5.00% 1/1/33

      225,000      $ 272,158  

5.00% 1/1/34

      200,000        241,124  

Series A 5.00% 1/1/24

      335,000        370,028  

Puerto Rico Electric Power Authority

      

Series A 5.05% 7/1/42 ‡

      165,000        113,850  

Series AAA 5.25% 7/1/25 ‡

      95,000        65,669  

Series CCC 5.25% 7/1/27 ‡

      650,000        449,312  

Series WW 5.00% 7/1/28 ‡

      585,000        403,650  

Series XX 4.75% 7/1/26 ‡

      105,000        71,925  

Series XX 5.25% 7/1/40 ‡

      295,000        203,919  

Series XX 5.75% 7/1/36 ‡

      370,000        258,075  

Series ZZ 4.75% 7/1/27 ‡

      85,000        58,225  

Series ZZ 5.25% 7/1/24 ‡

      130,000        89,862  

Rochester Electric Utility Revenue

      

Series A 5.00% 12/1/34

      450,000        551,830  

Series A 5.00% 12/1/35

      500,000        611,125  

Series A 5.00% 12/1/36

      520,000        633,823  

Southern Minnesota Municipal Power Agency Revenue

      

Series A 5.00% 1/1/41

      400,000        474,688  

St. Paul Housing & Redevelopment Energy Revenue

      

Series A 4.00% 10/1/32

      800,000        914,936  
     

 

 

  
        11,778,869  
     

 

 

  

Healthcare Revenue Bonds — 34.14%

      

Anoka Healthcare & Housing Facilities Revenue

      

(The Homestead at Anoka Project)

      

5.125% 11/1/49

      400,000        400,788  

Apple Valley Senior Housing Revenue

      

(PHS Senior Housing, Inc. Orchard Path Project)

      

4.50% 9/1/53

      840,000        844,477  

5.00% 9/1/43

      535,000        552,896  

5.00% 9/1/58

      1,175,000        1,204,727  

Apple Valley Senior Living Revenue

      

(Senior Living LLC Project)

      

2nd Tier Series B 5.00% 1/1/47

      560,000        371,666  

4th Tier Series D 7.00% 1/1/37

      515,000        409,508  

4th Tier Series D 7.25% 1/1/52

      1,500,000        1,135,725  

 

55

Table of Contents

Schedules of investments

Delaware Minnesota High-Yield Municipal Bond Fund

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Bethel Housing & Health Care Facilities Revenue

      

(Benedictine Health System - St. Peter Communities Project)

      

Series A 5.50% 12/1/48

      1,280,000      $ 1,230,272  

Bethel Senior Housing Revenue

      

(The Lodge at the Lakes at Stillwater Project)

      

5.25% 6/1/58

      1,475,000        1,495,886  

Brooklyn Center Multifamily Housing Revenue

      

(Sanctuary at Brooklyn Center Project)

      

Series A 5.50% 11/1/35

      645,000        592,058  

Chatfield Healthcare and Housing Facilities Revenue

      

(Chosen Valley Care Center Project)

      

4.00% 9/1/39

      250,000        205,627  

5.00% 9/1/52

      1,500,000        1,368,810  

City of West St. Paul Minnesota

      

(Walker Westwood Ridge Campus Project)

      

5.00% 11/1/49

      1,500,000        1,500,570  

Cloquet Housing Facilities

      

(HADC Cloquet Project)

      

Series A 5.00% 8/1/48

      850,000        836,137  

Crookston Health Care Facilities Revenue

      

(Riverview Health Project)

      

5.00% 5/1/51

      1,025,000        992,795  

Dakota County Community Development Agency

      

Senior Housing Revenue

      

(Walker Highview Hills Project)

      

Series A 144A 5.00% 8/1/51 #

      870,000        896,700  

Deephaven Housing & Healthcare Revenue

      

(St. Therese Senior Living Project)

      

Series A 5.00% 4/1/38

      335,000        309,862  

Series A 5.00% 4/1/40

      315,000        287,784  

Series A 5.00% 4/1/48

      185,000        164,513  

Duluth Economic Development Authority

      

(Essentia Health Obligated Group)

      

Series A 4.25% 2/15/43

      2,500,000        2,745,200  

Series A 5.00% 2/15/48

      1,590,000        1,831,378  

(St. Luke’s Hospital of Duluth Obligated Group)

      

5.75% 6/15/32

      2,000,000        2,118,480  

6.00% 6/15/39

      1,000,000        1,058,570  

Glencoe Health Care Facilities Revenue

      

(Glencoe Regional Health Services Project)

      

4.00% 4/1/31

      185,000        190,574  

 

56

Table of Contents

    

    

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Hayward Health Care Facilities Revenue

      

(American Baptist Homes Midwest Obligated Group)

      

5.375% 8/1/34

      750,000      $ 721,193  

(St. John’s Lutheran Home of Albert Lea Project)

      

5.375% 10/1/44

      165,000        153,529  

Maple Grove Health Care Facilities Revenue

      

(Maple Grove Hospital Corporation)

      

4.00% 5/1/37

      1,155,000        1,236,277  

5.00% 5/1/26

      1,300,000        1,528,345  

5.00% 5/1/29

      500,000        589,385  

(North Memorial Health Care)

      

5.00% 9/1/30

      610,000        693,332  

Maple Plain Senior Housing & Health Care Revenue

      

(Haven Homes Incorporate Project)

      

5.00% 7/1/49

      1,000,000        1,027,290  

Minneapolis Health Care System Revenue

      

(Fairview Health Services)

      

Series A 4.00% 11/15/48

      1,000,000        1,118,910  

Series A 5.00% 11/15/33

      1,200,000        1,393,764  

Series A 5.00% 11/15/34

      500,000        579,630  

Series A 5.00% 11/15/44

      1,000,000        1,137,730  

Series A 5.00% 11/15/49

      1,450,000        1,745,568  

Minneapolis Senior Housing & Healthcare Revenue

      

(Ecumen-Abiitan Mill City Project)

      

5.375% 11/1/50

      1,700,000        1,706,766  

Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue

      

(Allina Health System)

      

Series A 5.00% 11/15/29

      415,000        515,791  

Morris Health Care Facilities Revenue

      

(Farmington Health Services)

      

4.10% 8/1/44

      500,000        437,610  

4.20% 8/1/49

      1,500,000        1,292,895  

Oakdale Senior Housing

      

(Oak Meadows Project)

      

5.00% 4/1/34

      500,000        495,120  

Rochester Health Care & Housing Revenue

      

(The Homestead at Rochester Project)

      

Series A 5.25% 12/1/23

      175,000        184,259  

Rochester Health Care Facilities Revenue

      

(Mayo Clinic)

      

4.00% 11/15/41

      1,790,000        1,848,873  

 

57

Table of Contents

Schedules of investments

Delaware Minnesota High-Yield Municipal Bond Fund

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Rochester Health Care Facilities Revenue

      

(Olmsted Medical Center Project)

      

5.00% 7/1/22

      350,000      $ 377,657  

5.00% 7/1/27

      245,000        270,855  

5.00% 7/1/28

      225,000        247,743  

Rochester, Minnesota

      

(The Homestead at Rochester Project)

      

Series A 6.875% 12/1/48

      800,000        860,736  

Sartell Health Care Facilities Revenue

      

(Country Manor Campus Project)

      

Series A 5.25% 9/1/22

      1,080,000        1,105,456  

Sauk Rapids Health Care Housing Facilities Revenue

      

(Good Shepherd Lutheran Home)

      

5.125% 1/1/39

      825,000        813,846  

Shakopee Health Care Facilities Revenue

      

(St. Francis Regional Medical Center)

      

4.00% 9/1/31

      130,000        139,500  

5.00% 9/1/34

      105,000        115,858  

St. Cloud Health Care Revenue

      

(Centracare Health System Project)

      

4.00% 5/1/49

      250,000        278,963  

5.00% 5/1/48

      3,900,000        4,730,778  

Series A 4.00% 5/1/37

      1,440,000        1,580,256  

Series A 5.00% 5/1/46

      2,000,000        2,306,700  

Unrefunded Balance 5.125% 5/1/30

      15,000        15,046  

St. Joseph Senior Housing & Healthcare Revenue

      

(Woodcrest Country Manor Project)

      

5.00% 7/1/55

      1,000,000        955,530  

St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue

      

(Fairview Health Services)

      

Series A 4.00% 11/15/43

      645,000        717,092  

Series A 5.00% 11/15/47

      485,000        573,857  

(HealthPartners Obligated Group Project)

      

Series A 4.00% 7/1/33

      1,320,000        1,442,826  

Series A 5.00% 7/1/29

      1,000,000        1,165,860  

Series A 5.00% 7/1/32

      900,000        1,035,108  

Series A 5.00% 7/1/33

      1,540,000        1,765,394  

St. Paul Housing & Redevelopment Authority Housing & Health Care Facilities Revenue

      

(Episcopal Homes Project)

      

5.125% 5/1/48

      1,700,000        1,580,201  

 

58

Table of Contents

    

    

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

St. Paul Housing & Redevelopment Authority Housing & Health Care Facilities Revenue

      

(Episcopal Homes Project)

      

Series A 5.15% 11/1/42

      775,000      $ 775,411  

St. Paul Housing & Redevelopment Authority Multifamily Housing Revenue

      

(Marian Center Project)

      

Series A 5.375% 5/1/43

      1,000,000        938,310  

Victoria Health Care Facilities Revenue

      

(Augustana Emerald Care Project)

      

5.00% 8/1/39

      1,500,000        1,501,665  

Wayzata Senior Housing Revenue

      

(Folkestone Senior Living Community)

      

4.00% 8/1/38

      250,000        250,515  

4.00% 8/1/39

      400,000        400,824  

4.00% 8/1/44

      350,000        348,922  

5.00% 8/1/54

      350,000        365,449  
     

 

 

  
     

 

 

 

67,811,628

 

 

     

 

 

  

Housing Revenue Bonds — 1.62%

      

Bethel Senior Housing Revenue

      

(Birchwood Landing at the Lakes at Stillwater Project)

      

5.00% 5/1/54

      1,000,000        1,023,690  

Minneapolis – St. Paul Housing Finance Board

      

Single Family Mortgage-Backed Securities Program

      

(City Living Project)

      

Series A-2 5.00% 12/1/38 (GNMA) (FNMA)

      

(FHLMC) (AMT)

      998        999  

Minnesota Housing Finance Agency State Appropriation

      

(Housing Infrastructure)

      

Series C 5.00% 8/1/33

      100,000        115,307  

Northwest Multi-County Housing & Redevelopment Authority

      

(Pooled Housing Program)

      

5.50% 7/1/45

      1,275,000        1,316,756  

Stillwater Multifamily Housing Revenue

      

(Orleans Homes Project)

      

5.50% 2/1/42 (AMT)

      750,000        750,405  
     

 

 

  
        3,207,157  
     

 

 

  

 

59

Table of Contents

Schedules of investments

Delaware Minnesota High-Yield Municipal Bond Fund

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Lease Revenue Bonds — 2.34%

      

Minnesota General Fund Revenue Appropriations

      

Series A 5.00% 6/1/38

      1,750,000      $ 1,924,860  

Series A 5.00% 6/1/43

      1,000,000        1,095,080  

Minnesota Housing Finance Agency State Appropriation

      

(Housing Infrastructure)

      

Series C 5.00% 8/1/32

      1,415,000        1,636,320  
     

 

 

  
        4,656,260  
     

 

 

  

Local General Obligation Bonds — 6.71%

      

Duluth General Obligation Entertainment Convention Center Improvement

      

Series A 5.00% 2/1/34

      1,000,000        1,211,590  

Duluth Independent School District No. 709

      

Series A 4.00% 2/1/27

      440,000        507,624  

Series A 4.20% 3/1/34

      750,000        723,742  

Hennepin County

      

Series A 5.00% 12/1/37

      910,000        1,150,177  

Series C 5.00% 12/1/37

      2,500,000        3,108,225  

Mahtomedi Independent School District No. 832

      

(School Building)

      

Series A 5.00% 2/1/28

      1,000,000        1,200,220  

Series A 5.00% 2/1/29

      1,000,000        1,198,760  

Series A 5.00% 2/1/31

      1,000,000        1,194,890  

Minneapolis Special School District No. 1

      

Series A 4.00% 2/1/36

      160,000        191,496  

Series A 4.00% 2/1/37

      215,000        256,359  

Series A 4.00% 2/1/38

      220,000        261,503  

Series B 4.00% 2/1/36

      335,000        400,945  

Series B 4.00% 2/1/37

      445,000        530,605  

Series B 4.00% 2/1/38

      465,000        552,722  

Wayzata Independent School District No. 284

      

(School Building)

      

Series A 5.00% 2/1/28

      650,000        830,895  
     

 

 

  
        13,319,753  
     

 

 

  

Pre-Refunded/Escrowed to Maturity Bonds — 4.40%

      

Deephaven Charter School Lease Revenue

      

(Eagle Ridge Academy Project)

      

Series A 5.50% 7/1/43-23 §

      500,000        571,545  

Minnesota

      

Series A Unrefunded Balance 5.00% 10/1/24-21 §

      985,000        1,036,338  

 

60

Table of Contents

    

    

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Pre-Refunded/Escrowed to Maturity Bonds (continued)

      

Minnesota Higher Education Facilities Authority Revenue

      

(St. Catherine University)

      

Series 7-Q 5.00% 10/1/25-22 §

      325,000      $ 357,016  

Series 7-Q 5.00% 10/1/26-22 §

      280,000        307,583  

St. Paul Housing & Redevelopment Authority Charter School Lease Revenue

      

(Nova Classical Academy Project)

      

Series A 6.625% 9/1/42-21 §

      1,500,000        1,594,080  

St. Paul Housing & Redevelopment Authority Hospital Facility Revenue

      

(Healtheast Care System Project)

      

Series A 5.00% 11/15/29-25 §

      275,000        340,389  

Series A 5.00% 11/15/30-25 §

      205,000        253,745  

Western Minnesota Municipal Power Agency Revenue

      

Series A 5.00% 1/1/30-24 §

      500,000        578,180  

Series A 5.00% 1/1/33-24 §

      750,000        867,270  

Series A 5.00% 1/1/34-24 §

      450,000        520,362  

Series A 5.00% 1/1/40-24 §

      2,000,000        2,312,720  
     

 

 

  
        8,739,228  
     

 

 

  

Special Tax Revenue Bonds — 5.25%

      

Minneapolis Revenue

      

(YMCA Greater Twin Cities Project)

      

4.00% 6/1/31

      250,000        268,632  

Minneapolis Tax Increment Revenue

      

(Grant Park Project)

      

4.00% 3/1/27

      200,000        203,572  

4.00% 3/1/30

      260,000        262,902  

(Village of St. Anthony Falls Project)

      

4.00% 3/1/24

      700,000        711,991  

4.00% 3/1/27

      650,000        658,021  

Puerto Rico Sales Tax Financing Revenue

      

(Restructured)

      

Series A-1 4.75% 7/1/53

      4,005,000        4,209,415  

Series A-1 5.00% 7/1/58

      275,000        293,618  

Series A-2 4.536% 7/1/53

      3,000,000        3,110,310  

St. Paul Sales Tax Revenue

      

Series G 5.00% 11/1/28

      600,000        707,652  
     

 

 

  
        10,426,113  
     

 

 

  

 

61

Table of Contents

Schedules of investments

Delaware Minnesota High-Yield Municipal Bond Fund

 

     Principal amount°                  Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

State General Obligation Bonds — 7.00%

      

Commonwealth of Puerto Rico

      

(Public Improvement)

      

Series B 5.75% 7/1/38 ‡

      920,000      $ 652,050  

Minnesota

      

Series A 5.00% 8/1/27

      750,000        918,675  

Series A 5.00% 8/1/29

      1,000,000        1,219,450  

Series A 5.00% 8/1/33

      660,000        857,096  

Series A 5.00% 8/1/34

      2,185,000        2,830,012  

Series D 5.00% 8/1/26

      1,000,000        1,267,680  

Series D 5.00% 8/1/27

      1,000,000        1,265,680  

Series E 5.00% 10/1/26

      1,085,000        1,382,170  

(Various Purposes)

      

Series A 5.00% 8/1/32

      1,915,000        2,239,497  

Series A 5.00% 8/1/38

      1,000,000        1,277,780  
     

 

 

  
        13,910,090  
     

 

 

  

Transportation Revenue Bonds — 6.51%

      

Minneapolis – St. Paul Metropolitan Airports Commission Revenue

      

(Senior)

      

Series A 5.00% 1/1/32

      1,245,000        1,509,948  

Series C 5.00% 1/1/46

      185,000        216,927  

(Subordinate)

      

Series A 5.00% 1/1/32

      500,000        559,680  

Series A 5.00% 1/1/49

      1,500,000        1,811,685  

Series B 5.00% 1/1/29

      2,130,000        2,243,359  

Series B 5.00% 1/1/44 (AMT)

      4,000,000        4,794,760  

Series B 5.00% 1/1/49 (AMT)

      1,500,000        1,786,665  
     

 

 

  
        12,923,024  
     

 

 

  

Water & Sewer Revenue Bonds — 1.17%

      

Metropolitan Council General Obligation Wastewater Revenue (Minneapolis – St. Paul Metropolitan Area)

      

Series C 4.00% 3/1/31

      965,000        1,149,006  

Series C 4.00% 3/1/32

      1,000,000        1,183,200  
     

 

 

  
        2,332,206  
     

 

 

  

Total Municipal Bonds (cost $187,836,551)

         194,377,096  
     

 

 

  

 

62

Table of Contents

    

    

 

     Principal amount                  Value (US $)  

 

  

Short-Term Investments — 0.70%

      

 

  

Variable Rate Demand Notes — 0.70%¤

      

Minneapolis Health Care System Revenue

      

(Fairview Health Services) Series C

      

0.03% 11/15/48 (LOC – Wells Fargo Bank N.A.)

      200,000      $ 200,000  

Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Facilities Revenue

      

(Children’s Hospitals and Clinics)

      

Series A-1 0.02% 8/15/37 (AGM) (SPA – US Bank N.A.)

      1,100,000        1,100,000  

Minneapolis – St. Paul Housing & Redevelopment Authority Health Care Revenue

      

(Allina Health System)

      

Series B-1 0.02% 11/15/35 (LOC – JPMorgan Chase Bank N.A.)

      100,000        100,000  
     

 

 

  

Total Short-Term Investments (cost $1,400,000)

         1,400,000  
     

 

 

  

Total Value of Securities—98.57%
(cost $189,236,551)

       $ 195,777,096  
     

 

 

  

 

°

Principal amount shown is stated in USD unless noted that the security is denominated in another currency.

 

#

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $5,900,806, which represents 2.97% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”

 

‡

Non-income producing security. Security is currently in default.

 

§

Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 8 in “Notes to financial statements.”

 

¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of August 31, 2020.

Summary of abbreviations:

AGM – Insured by Assured Guaranty Municipal Corporation

AMT – Subject to Alternative Minimum Tax

FHLMC – Federal Home Loan Mortgage Corporation

FNMA – Federal National Mortgage Association

GNMA – Government National Mortgage Association

LLC – Limited Liability Corporation

LOC – Letter of Credit

 

63

Table of Contents

Schedules of investments

Delaware Minnesota High-Yield Municipal Bond Fund

 

Summary of abbreviations: (continued)

N.A. – National Association

SPA – Stand-by Purchase Agreement

USD – US Dollar

See accompanying notes, which are an integral part of the financial statements.

 

64

Table of Contents
Statements of assets and liabilities    August 31, 2020

 

    

Delaware Tax-Free

Minnesota Fund

     

Delaware Tax-Free

Minnesota

Intermediate Fund

     

Delaware Minnesota

High-Yield Municipal

Bond Fund

  

Assets:

         

Investments, at value*

    $ 573,899,257      $ 86,792,346      $ 195,777,096  

Cash

      153,994        31,761        836,801  

Interest receivable

      6,736,350        924,630        2,236,011  

Receivable for fund shares sold

      350,286        150,250        240,053  
  

 

 

     

 

 

     

 

 

  

Total Assets

      581,139,887        87,898,987        199,089,961  
  

 

 

     

 

 

     

 

 

  

Liabilities:

         

Distribution payable

      311,554        40,160        116,406  

Investment management fees payable to affiliates

      235,628        16,964        82,889  

Payable for fund shares redeemed

      215,387        4,000        173,653  

Distribution fees payable to affiliates

      100,988        11,839        38,595  

Dividend disbursing and transfer agent fees and expenses payable to non-affiliates

      32,531        5,877        13,733  

Accounting and administration fees payable to non-affiliates

      31,250        15,014        18,664  

Reports and statements to shareholders expenses payable to affiliates

      24,864        6,799        10,546  

Other accrued expenses

      18,368        5,658        11,607  

Audit and tax fees payable

      5,500        5,500        5,500  

Dividend disbursing and transfer agent fees and expenses payable to affiliates

      4,566        691        1,560  

Trustees’ fees and expenses payable to affiliates

      4,248        644        1,453  

Accounting and administration expenses payable to affiliates

      2,019        593        913  

Legal fees payable to affiliates

      1,018        154        348  
  

 

 

     

 

 

     

 

 

  

Total Liabilities

      987,921        113,893        475,867  
  

 

 

     

 

 

     

 

 

  

Total Net Assets

    $       580,151,966      $       87,785,094      $       198,614,094  
  

 

 

     

 

 

     

 

 

  

Net Assets Consist of:

         

Paid-in capital

    $ 554,460,569      $ 84,302,908      $ 192,917,782  

Total distributable earnings (loss)

      25,691,397        3,482,186        5,696,312  
  

 

 

     

 

 

     

 

 

  

Total Net Assets

    $ 580,151,966      $ 87,785,094      $ 198,614,094  
  

 

 

     

 

 

     

 

 

  

 

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Statements of assets and liabilities

 

    

Delaware Tax-Free

Minnesota Fund

    

Delaware Tax-Free

Minnesota

Intermediate Fund

    

Delaware Minnesota

High-Yield Municipal

Bond Fund

  

Net Asset Value

       

Class A:

       

Net assets

    $         373,691,067     $         57,787,863     $         103,912,819  

Shares of beneficial interest outstanding, unlimited authorization, no par

      29,913,945       5,206,013       9,447,144  

Net asset value per share

    $ 12.49     $ 11.10     $ 11.00  

Sales charge

      4.50 %      2.75 %      4.50 % 

Offering price per share, equal to net asset value per share / (1 - sales charge)

    $ 13.08     $ 11.41     $ 11.52  

Class C:

       

Net assets

    $ 25,218,994     $ 5,148,739     $ 19,376,304  

Shares of beneficial interest outstanding, unlimited authorization, no par

      2,012,202       462,912       1,758,179  

Net asset value per share

    $ 12.53     $ 11.12     $ 11.02  

Institutional Class:

       

Net assets

    $ 181,241,905     $ 24,848,492     $ 75,324,971  

Shares of beneficial interest outstanding, unlimited authorization, no par

      14,511,385       2,237,750       6,850,315  

Net asset value per share

    $ 12.49     $ 11.10     $ 11.00  

                                                                                                      

*Investments, at cost

    $ 547,388,413     $ 83,140,600     $ 189,236,551  

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of operations    Year ended August 31, 2020

 

                 Delaware Minnesota  
           Delaware Tax-Free     High-Yield  
     Delaware Tax-Free     Minnesota     Municipal Bond  
     Minnesota Fund     Intermediate Fund     Fund  

Investment Income:

       

Interest

    $ 19,581,428     $ 2,549,862     $ 7,302,458  

Expenses:

       

Management fees

      3,148,707       410,716       1,123,132  

Distribution expenses - Class A

      937,862       140,355       258,349  

Distribution expenses - Class C

      276,689       63,142       203,799  

Dividend disbursing and transfer agent fees and expenses

      346,297       52,347       140,085  

Accounting and administration expenses

      134,934       52,630       72,789  

Registration fees

      61,479       26,476       14,214  

Legal fees

      51,193       7,227       16,361  

Reports and statements to shareholders expenses

      51,011       12,647       20,458  

Audit and tax fees

      45,140       45,140       45,140  

Trustees’ fees and expenses

      33,434       4,744       11,765  

Custodian fees

      14,704       1,681       3,934  

Other

      55,037       20,920       34,205  
  

 

 

    

 

 

    

 

 

  
     5,156,487       838,025       1,944,231  

Less expenses waived

      (458,373 )      (173,534 )      (172,639 ) 

Less waived distribution expenses - Class A

      —       (56,142 )      —  

Less expenses paid indirectly

      (4,158 )      (1,086 )      (2,400 ) 
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      4,693,956       607,263       1,769,192  
  

 

 

    

 

 

    

 

 

  

Net Investment Income

             14,887,472              1,942,599              5,533,266  
  

 

 

    

 

 

    

 

 

  

 

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Table of Contents

Statements of operations

 

    

Delaware Tax-Free

Minnesota Fund

    

Delaware Tax-Free

Minnesota

Intermediate Fund

    

Delaware Minnesota

High-Yield

Municipal Bond

Fund

  

Net Realized and Unrealized Gain (Loss):

       

Net realized gain (loss) on investments

    $ 932,823     $ (68,890 )    $ 180,719  

Net change in unrealized appreciation (depreciation) of investments

      (8,816,749 )      (916,519 )      (4,939,126 ) 
  

 

 

    

 

 

    

 

 

  

Net Realized and Unrealized Loss

      (7,883,926 )      (985,409 )              (4,758,407 ) 
  

 

 

    

 

 

    

 

 

  

Net Increase in Net Assets Resulting from Operations

    $         7,003,546     $         957,190     $ 774,859  
  

 

 

    

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of changes in net assets

Delaware Tax-Free Minnesota Fund

 

     Year ended  
     8/31/20     8/31/19  

Increase (Decrease) in Net Assets from Operations:

     

Net investment income

    $ 14,887,472     $ 16,250,461  

Net realized gain

      932,823       422,779  

Net change in unrealized appreciation (depreciation)

      (8,816,749 )      23,896,388  
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      7,003,546       40,569,628  
  

 

 

    

 

 

  

Dividends and Distributions to Shareholders from:

     

Distributable earnings:

     

Class A

      (10,479,934 )      (11,013,173 ) 

Class C

      (567,741 )      (674,498 ) 

Institutional Class

      (5,376,871 )      (4,532,590 ) 
  

 

 

    

 

 

  
     (16,424,546 )      (16,220,261 ) 
  

 

 

    

 

 

  

Capital Share Transactions:

     

Proceeds from shares sold:

     

Class A

      30,564,638       34,266,180  

Class C

      2,044,174       3,098,448  

Institutional Class

      49,162,276       83,152,024  

Net asset value of shares issued upon reinvestment of dividends and distributions:

     

Class A

      9,360,817       9,748,901  

Class C

      554,458       653,678  

Institutional Class

      3,892,433       3,221,296  
  

 

 

    

 

 

  
               95,578,796                 134,140,527  
  

 

 

    

 

 

  

 

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Statements of changes in net assets

Delaware Tax-Free Minnesota Fund

 

     Year ended  
     8/31/20     8/31/19  

Capital Share Transactions (continued):

     

Cost of shares redeemed:

     

Class A

    $ (47,198,375 )    $ (63,834,709 ) 

Class C

      (6,825,961 )      (10,695,643 ) 

Institutional Class

      (37,945,871 )      (44,007,882 ) 
  

 

 

    

 

 

  
     (91,970,207 )      (118,538,234 ) 
  

 

 

    

 

 

  

Increase in net assets derived from capital share transactions

      3,608,589       15,602,293  
  

 

 

    

 

 

  

Net Increase (Decrease) in Net Assets

      (5,812,411 )      39,951,660  

Net Assets:

     

Beginning of year

      585,964,377       546,012,717  
  

 

 

    

 

 

  

End of year

    $         580,151,966     $         585,964,377  
  

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of changes in net assets

Delaware Tax-Free Minnesota Intermediate Fund

 

     Year ended  
     8/31/20     8/31/19  

Increase (Decrease) in Net Assets from Operations:

     

Net investment income

    $ 1,942,599     $ 2,179,205  

Net realized gain (loss)

      (68,890 )      5,373  

Net change in unrealized appreciation (depreciation)

      (916,519 )      2,996,731  
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      957,190       5,181,309  
  

 

 

    

 

 

  

Dividends and Distributions to Shareholders from:

     

Distributable earnings:

     

Class A

      (1,346,270 )      (1,593,527 ) 

Class C

      (98,584 )      (156,332 ) 

Institutional Class

      (497,364 )      (428,375 ) 
  

 

 

    

 

 

  
     (1,942,218 )      (2,178,234 ) 
  

 

 

    

 

 

  

Capital Share Transactions:

     

Proceeds from shares sold:

     

Class A

      8,419,718       5,671,277  

Class C

      635,657       898,626  

Institutional Class

      11,917,665       8,405,771  

Net asset value of shares issued upon reinvestment of dividends and distributions:

     

Class A

      1,146,384       1,357,246  

Class C

      94,088       149,449  

Institutional Class

      463,348       397,172  
  

 

 

    

 

 

  
               22,676,860                 16,879,541  
  

 

 

    

 

 

  

 

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Statements of changes in net assets

Delaware Tax-Free Minnesota Intermediate Fund

 

     Year ended  
     8/31/20     8/31/19  

Capital Share Transactions (continued):

     

Cost of shares redeemed:

     

Class A

    $ (6,850,828 )    $ (12,485,742 ) 

Class C

      (2,655,009 )      (2,719,349 ) 

Institutional Class

      (5,203,976 )      (3,186,459 ) 
  

 

 

    

 

 

  
     (14,709,813 )      (18,391,550 ) 
  

 

 

    

 

 

  

Increase (decrease) in net assets derived from capital share transactions

      7,967,047       (1,512,009 ) 
  

 

 

    

 

 

  

Net Increase in Net Assets

      6,982,019       1,491,066  

Net Assets:

     

Beginning of year

      80,803,075       79,312,009  
  

 

 

    

 

 

  

End of year

    $           87,785,094     $           80,803,075  
  

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of changes in net assets

Delaware Minnesota High-Yield Municipal Bond Fund

 

     Year ended  
     8/31/20     8/31/19  

Increase (Decrease) in Net Assets from Operations:

     

Net investment income

    $ 5,533,266     $ 5,310,882  

Net realized gain (loss)

      180,719       (149,752 ) 

Net change in unrealized appreciation (depreciation)

      (4,939,126 )      9,364,456  
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      774,859       14,525,586  
  

 

 

    

 

 

  

Dividends and Distributions to Shareholders from:

     

Distributable earnings:

     

Class A

      (2,770,295 )      (2,884,919 ) 

Class C

      (393,155 )      (452,855 ) 

Institutional Class

      (2,354,836 )      (1,963,896 ) 
  

 

 

    

 

 

  
     (5,518,286 )      (5,301,670 ) 
  

 

 

    

 

 

  

Capital Share Transactions:

     

Proceeds from shares sold:

     

Class A

      12,533,954       11,808,073  

Class C

      3,689,377       3,143,949  

Institutional Class

      28,268,095       31,389,740  

Net asset value of shares issued upon reinvestment of dividends and distributions:

     

Class A

      2,475,879       2,586,210  

Class C

      369,511       420,887  

Institutional Class

      2,262,483       1,877,843  
  

 

 

    

 

 

  
               49,599,299                 51,226,702  
  

 

 

    

 

 

  

 

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Table of Contents

Statements of changes in net assets

Delaware Minnesota High-Yield Municipal Bond Fund

 

     Year ended  
     8/31/20     8/31/19  

Capital Share Transactions (continued):

     

Cost of shares redeemed:

     

Class A

    $ (12,513,039 )    $ (14,747,115 ) 

Class C

      (5,297,308 )      (5,154,694 ) 

Institutional Class

      (28,132,087 )      (14,980,335 ) 
  

 

 

    

 

 

  
     (45,942,434 )      (34,882,144 ) 
  

 

 

    

 

 

  

Increase in net assets derived from capital share transactions

      3,656,865       16,344,558  
  

 

 

    

 

 

  

Net Increase (Decrease) in Net Assets

      (1,086,562 )      25,568,474  

Net Assets:

     

Beginning of year

      199,700,656       174,132,182  
  

 

 

    

 

 

  

End of year

    $         198,614,094     $         199,700,656  
  

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

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Table of Contents

Financial highlights

Delaware Tax-Free Minnesota Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

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Table of Contents

    

    

 

    Year ended  
 

 

 

  
    8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
  $ 12.68        $ 12.14        $ 12.54        $ 12.87        $ 12.60  
    0.31                       0.36                       0.37                       0.38                       0.41  
    (0.16 )         0.54          (0.34 )         (0.32 )         0.28  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    0.15          0.90          0.03          0.06          0.69  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.31 )         (0.36 )         (0.37 )         (0.39 )         (0.42 ) 
    (0.03 )         —          (0.06 )         —          —  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.34 )         (0.36 )         (0.43 )         (0.39 )         (0.42 ) 
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
  $ 12.49        $ 12.68        $ 12.14        $ 12.54        $ 12.87  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    1.30%          7.54%          0.26%          0.49%          5.52%  
  $ 373,691        $ 386,790        $ 390,477        $ 423,497        $ 481,066  
    0.85%          0.85%          0.85%          0.85%          0.85%  
    0.93%          0.93%          0.94%          0.95%          0.95%  
    2.53%          2.92%          2.99%          3.08%          3.25%  
    2.45%          2.84%          2.90%          2.98%          3.15%  
    15%          13%          16%          17%          15%  

 

  

 

77

Table of Contents

Financial highlights

Delaware Tax-Free Minnesota Fund Class C

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

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    Year ended  
 

 

 

  
    8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
  $ 12.72        $ 12.18        $ 12.58        $ 12.91        $ 12.64  
    0.22          0.27          0.28          0.29          0.32  
    (0.16 )                      0.54                       (0.34 )                      (0.33 )                      0.27  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    0.06          0.81          (0.06 )         (0.04 )         0.59  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.22 )         (0.27 )         (0.28 )         (0.29 )         (0.32 ) 
    (0.03 )         —          (0.06 )         —          —  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.25 )         (0.27 )         (0.34 )         (0.29 )         (0.32 ) 
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
  $ 12.53        $ 12.72        $ 12.18        $ 12.58        $ 12.91  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    0.54%          6.73%          (0.49% )         (0.25% )         4.73%  
  $ 25,219        $ 29,933        $ 35,642        $ 51,045        $ 53,502  
    1.60%          1.60%          1.60%          1.60%          1.60%  
    1.68%          1.68%          1.69%          1.70%          1.70%  
    1.78%          2.17%          2.24%          2.33%          2.50%  
    1.70%          2.09%          2.15%          2.23%          2.40%  
    15%          13%          16%          17%          15%  

 

  

 

79

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Financial highlights

Delaware Tax-Free Minnesota Fund Institutional Class

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

80

Table of Contents

    

    

 

            Year ended                            
  

 

 

  
     8/31/20            8/31/19            8/31/18            8/31/17            8/31/16  

 

  
   $ 12.68                         $ 12.14                         $ 12.54                         $ 12.87                         $ 12.59  
     0.34          0.39          0.40          0.41          0.45  
     (0.16 )         0.54          (0.34 )         (0.32 )         0.28  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.18          0.93          0.06          0.09          0.73  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.34 )         (0.39 )         (0.40 )         (0.42 )         (0.45 ) 
     (0.03 )         —          (0.06 )         —          —  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.37 )         (0.39 )         (0.46 )         (0.42 )         (0.45 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 12.49        $ 12.68        $ 12.14        $ 12.54        $ 12.87  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     1.55%          7.81%          0.51%          0.75%          5.87%  
   $ 181,242        $ 169,241        $ 119,894        $ 88,826        $ 53,133  
     0.60%          0.60%          0.60%          0.60%          0.60%  
     0.68%          0.68%          0.69%          0.70%          0.70%  
     2.78%          3.17%          3.24%          3.33%          3.50%  
     2.70%          3.09%          3.15%          3.23%          3.40%  
     15%          13%          16%          17%          15%  

 

  

 

81

Table of Contents

Financial highlights

Delaware Tax-Free Minnesota Intermediate Fund Class A

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects waivers by the manager and/or distributor. Performance would have been lower had the waivers not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

82

Table of Contents

    

    

 

    Year ended  
 

 

 

  
    8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
  $ 11.25        $ 10.82        $ 11.17        $ 11.44        $ 11.22  
    0.27          0.31          0.30          0.31          0.33  
    (0.15 )         0.43          (0.31 )         (0.25 )         0.22  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    0.12          0.74          (0.01 )         0.06          0.55  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.27 )         (0.31 )         (0.30 )         (0.31 )         (0.33 ) 
    —          —          (0.04 )         (0.02 )         —  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.27 )         (0.31 )         (0.34 )         (0.33 )         (0.33 ) 
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
  $ 11.10        $ 11.25        $ 10.82        $ 11.17        $ 11.44  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    1.08%          7.00%          (0.01% )         0.55%          4.98%  
  $ 57,788        $ 55,918        $ 59,284        $ 68,934        $ 79,730  
    0.71%          0.71%          0.79%          0.84%          0.84%  
    1.02%          1.04%          1.00%          0.99%          0.97%  
    2.39%          2.87%          2.77%          2.79%          2.92%  
    2.08%          2.54%          2.56%          2.64%          2.79%  
    20%          19%          17%          22%          14%  

 

  

 

83

Table of Contents

Financial highlights

Delaware Tax-Free Minnesota Intermediate Fund Class C

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

84

Table of Contents

    

    

 

     Year ended          
  

 

 

  
     8/31/20            8/31/19            8/31/18            8/31/17            8/31/16  

 

  
   $ 11.27        $ 10.84        $ 11.19        $ 11.47        $ 11.24  
     0.17          0.22          0.21          0.22          0.24  
     (0.15 )         0.43          (0.31 )         (0.26 )         0.23  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.02          0.65          (0.10 )         (0.04 )         0.47  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.17 )         (0.22 )         (0.21 )         (0.22 )         (0.24 ) 
     —          —          (0.04 )         (0.02 )         —  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.17 )         (0.22 )         (0.25 )         (0.24 )         (0.24 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.12        $ 11.27        $ 10.84        $ 11.19        $ 11.47  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.22%          6.09%          (0.86% )         (0.39% )         4.17%  
   $ 5,149        $ 7,167        $ 8,558        $ 11,885        $ 13,315  
     1.56%          1.56%          1.64%          1.69%          1.69%  
     1.77%          1.79%          1.75%          1.74%          1.72%  
     1.54%          2.02%          1.92%          1.94%          2.07%  
     1.33%          1.79%          1.81%          1.89%          2.04%  
     20%          19%          17%          22%          14%  

 

  

 

85

Table of Contents

Financial highlights

Delaware Tax-Free Minnesota Intermediate Fund Institutional Class

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

86

Table of Contents

    

    

 

    Year ended  
 

 

 

  
    8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
  $ 11.25        $ 10.83        $ 11.17        $ 11.45        $ 11.22  
    0.28          0.33          0.32          0.33          0.35  
    (0.15 )         0.42          (0.30 )         (0.26 )         0.23  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    0.13          0.75          0.02          0.07          0.58  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.28 )         (0.33 )         (0.32 )         (0.33 )         (0.35 ) 
    —          —          (0.04 )         (0.02 )         —  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.28 )         (0.33 )         (0.36 )         (0.35 )         (0.35 ) 
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
  $ 11.10        $ 11.25        $ 10.83        $ 11.17        $ 11.45  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    1.23%          7.06%          0.23%          0.61%          5.22%  
  $ 24,848        $ 17,718        $ 11,470        $ 18,800        $ 12,694  
    0.56%          0.56%          0.64%          0.69%          0.69%  
    0.77%          0.79%          0.75%          0.74%          0.72%  
    2.54%          3.02%          2.92%          2.94%          3.07%  
    2.33%          2.79%          2.81%          2.89%          3.04%  
    20%          19%          17%          22%          14%  

 

  

 

87

Table of Contents

Financial highlights

Delaware Minnesota High-Yield Municipal Bond Fund Class A

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

1 

The average shares outstanding have been applied for per share information.

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

88

Table of Contents

    

    

 

    Year ended  
 

 

 

  
    8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
  $ 11.21        $ 10.66        $ 10.88        $ 11.13        $ 10.84  
    0.29          0.32          0.32          0.33          0.36  
    (0.21 )         0.55          (0.22 )         (0.25 )         0.29  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    0.08          0.87          0.10          0.08          0.65  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.29 )         (0.32 )         (0.32 )         (0.33 )         (0.36 ) 
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.29 )         (0.32 )         (0.32 )         (0.33 )         (0.36 ) 
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
  $ 11.00        $ 11.21        $ 10.66        $ 10.88        $ 11.13  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    0.81%          8.33%          0.95%          0.84%          6.12%  
  $ 103,913        $ 103,487        $ 98,980        $ 98,491        $ 121,168  
    0.89%          0.89%          0.89%          0.89%          0.89%  
    0.97%          0.99%          0.99%          0.99%          0.98%  
    2.69%          2.97%          2.98%          3.08%          3.23%  
    2.61%          2.87%          2.88%          2.98%          3.14%  
    18%          12%          14%          19%          15%  

 

  

 

89

Table of Contents

Financial highlights

Delaware Minnesota High-Yield Municipal Bond Fund Class C

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return3

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Amount is less than $0.005 per share.

 

3 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

90

Table of Contents

    

    

 

    Year ended  
 

 

 

  
    8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
  $ 11.23        $ 10.68        $ 10.90        $ 11.15        $ 10.87  
    0.21          0.24          0.24          0.25          0.27  
    (0.21 )         0.55          (0.22 )         (0.25 )         0.29  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    — 2          0.79          0.02          — 2          0.56  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.21 )         (0.24 )         (0.24 )         (0.25 )         (0.28 ) 
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.21 )         (0.24 )         (0.24 )         (0.25 )         (0.28 ) 
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
  $ 11.02        $ 11.23        $ 10.68        $ 10.90        $ 11.15  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    0.05%          7.51%          0.19%          0.09%          5.22%  
  $ 19,376        $ 21,059        $ 21,651        $ 32,223        $ 35,751  
    1.64%          1.64%          1.64%          1.64%          1.64%  
    1.72%          1.74%          1.74%          1.74%          1.73%  
    1.94%          2.22%          2.23%          2.33%          2.48%  
    1.86%          2.12%          2.13%          2.23%          2.39%  
    18%          12%          14%          19%          15%  

 

  

 

91

Table of Contents

Financial highlights

Delaware Minnesota High-Yield Municipal Bond Fund Institutional Class

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

92

Table of Contents

    

    

 

    Year ended  
 

 

 

  
    8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
  $ 11.20        $ 10.66        $ 10.87        $ 11.12        $ 10.84  
    0.32          0.35          0.35          0.36          0.38  
    (0.20 )         0.54          (0.21 )         (0.25 )         0.29  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    0.12          0.89          0.14          0.11          0.67  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.32 )         (0.35 )         (0.35 )         (0.36 )         (0.39 ) 
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    (0.32 )         (0.35 )         (0.35 )         (0.36 )         (0.39 ) 
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
  $ 11.00        $ 11.20        $ 10.66        $ 10.87        $ 11.12  
 

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
    1.15%          8.50%          1.30%          1.09%          6.28%  
  $ 75,325        $ 75,155        $ 53,501        $ 44,805        $ 31,206  
    0.64%          0.64%          0.64%          0.64%          0.64%  
    0.72%          0.74%          0.74%          0.74%          0.73%  
    2.94%          3.22%          3.23%          3.33%          3.48%  
    2.86%          3.12%          3.13%          3.23%          3.39%  
    18%          12%          14%          19%          15%  

 

  

 

93

Table of Contents
Notes to financial statements   
Delaware Funds® by Macquarie Minnesota municipal bond funds    August 31, 2020

Voyageur Mutual Funds is organized as a Delaware statutory trust and offers five series: Delaware Minnesota High-Yield Municipal Bond Fund, Delaware National High-Yield Municipal Bond Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund. Voyageur Tax-Free Funds is organized as a Delaware statutory trust and offers Delaware Tax-Free Minnesota Fund. Voyageur Intermediate Tax-Free Funds is organized as a Delaware statutory trust and offers Delaware Tax-Free Minnesota Intermediate Fund. Voyageur Mutual Funds, Voyageur Tax-Free Funds, and Voyageur Intermediate Tax-Free Funds are each referred to as a Trust, or collectively, as the Trusts. These financial statements and the related notes pertain to Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund (each a Fund, or together, the Funds). Each Trust is an open-end investment company. The Funds are considered diversified under the Investment Company Act of 1940, as amended (1940 Act), and offer Class A, Class C, and Institutional Class shares. Class A shares are sold with a maximum front-end sales charge of 4.50% for Delaware Tax-Free Minnesota Fund and Delaware Minnesota High-Yield Municipal Bond Fund, and 2.75% for Delaware Tax-Free Minnesota Intermediate Fund. Class A share purchases of $250,000 or more will incur a contingent deferred sales charge (CDSC) instead of a front-end sales charge of 1.00%, if redeemed during the first year, and 0.50% during the second year for Delaware Tax-Free Minnesota Fund and Delaware Minnesota High-Yield Municipal Bond Fund, and 0.75% for Delaware Tax-Free Minnesota Intermediate Fund, if redeemed within the first year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Class C shares are sold with a CDSC of 1.00%, which will be incurred if redeemed during the first 12 months. Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors.

1. Significant Accounting Policies

Each Fund follows accounting and reporting guidance under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. The following accounting policies are in accordance with US generally accepted accounting principles (US GAAP) and are consistently followed by the Funds.

Security Valuation — Debt securities are valued based upon valuations provided by an independent pricing service or broker and reviewed by management. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. Valuations for fixed income securities utilize matrix systems, which reflect such factors as security prices, yields, maturities, and ratings, and are supplemented by dealer and exchange quotations. Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of each Trust’s Board of Trustees (each, a Board, or collectively, the Boards). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security. Restricted securities are valued at fair value using methods approved by the Boards.

Federal Income Taxes — No provision for federal income taxes has been made as each Fund intends to continue to qualify for federal income tax purposes as a regulated investment company under

 

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Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. Each Fund evaluates tax positions taken or expected to be taken in the course of preparing each Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. Management has analyzed each Fund’s tax positions taken or expected to be taken on each Fund’s federal income tax returns through the year ended August 31, 2020 and for all open tax years (years ended August 31, 2017–August 31, 2019), and has concluded that no provision for federal income tax is required in each Fund’s financial statements. If applicable, each Fund recognizes interest accrued on unrecognized tax benefits in interest expense and penalties in “Other” on the “Statements of operations.” During the year ended August 31, 2020, the Funds did not incur any interest or tax penalties.

Class Accounting — Investment income and common expenses are allocated to the various classes of each Fund on the basis of “settled shares” of each class in relation to the net assets of each Fund. Realized and unrealized gain (loss) on investments are allocated to the various classes of each Fund on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Use of Estimates — The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the fair value of investments, the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the differences could be material.

Other — Expenses directly attributable to a Fund are charged directly to that Fund. Other expenses common to various funds within the Delaware Funds® by Macquarie (Delaware Funds) are generally allocated among such funds on the basis of average net assets. Management fees and certain other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Interest income is recorded on the accrual basis. Discounts and premiums on debt securities are accreted or amortized to interest income, respectively, over the lives of the respective securities using the effective interest method. Each Fund declares dividends daily from net investment income and pays the dividends monthly and declares and pays distributions from net realized gain on investments, if any, annually. Each Fund may distribute more frequently, if necessary for tax purposes. Dividends and distributions, if any, are recorded on the ex-dividend date.

Each Fund receives earnings credits from its custodian when positive cash balances are maintained, which may be used to offset custody fees. The expenses paid under this arrangement are included on the “Statements of operations” under “Custodian fees” with the corresponding expenses offset included

 

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Notes to financial statements

Delaware Funds® by Macquarie Minnesota municipal bond funds

 

1. Significant Accounting Policies (continued)

 

under “Less expenses paid indirectly.” For the year ended August 31, 2020, each Fund earned the following amounts under this arrangement:

 

Fund        Custody Credits

Delaware Tax-Free Minnesota Fund

      $3,690

Delaware Tax-Free Minnesota Intermediate Fund

      1,005

Delaware Minnesota High-Yield Municipal Bond Fund

      2,222

Each Fund receives earnings credits from its transfer agent when positive cash balances are maintained, which may be used to offset transfer agent fees. If the amount earned is greater than $1, the expenses paid under this arrangement are included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses” with the corresponding expenses offset included under “Less expenses paid indirectly.” For the year ended August 31, 2020, each Fund earned the following amounts under this arrangement:

 

Fund        Earnings Credits

Delaware Tax-Free Minnesota Fund

          $468

Delaware Tax-Free Minnesota Intermediate Fund

          81

Delaware Minnesota High-Yield Municipal Bond Fund

          178

2. Investment Management, Administration Agreements, and Other Transactions with Affiliates

In accordance with the terms of its respective investment management agreement, each Fund pays Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust and the investment manager, an annual fee which is calculated daily and paid monthly based on each Fund’s average daily net assets as follows:

 

             Delaware Tax-Free         
Minnesota Fund		         Delaware Tax-Free      
Minnesota
Intermediate Fund		         Delaware Minnesota      
High-Yield Municipal
Bond Fund

On the first $500 million

    0.5500%   0.5000%   0.5500%

On the next $500 million

    0.5000%   0.4750%   0.5000%

On the next $1.5 billion

    0.4500%   0.4500%   0.4500%

In the excess of $2.5 billion

    0.4250%   0.4250%   0.4250%

DMC has contractually agreed to waive that portion, if any, of its management fee and/or pay/reimburse each Fund to the extent necessary to ensure that total annual operating expenses (excluding any distribution and service (12b-1) fees, taxes, interest, acquired fund fees and expenses, inverse floater program expenses, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations), do not exceed the following percentage of each Fund’s average daily net assets from September 1, 2019 through

 

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August 31, 2020.* These waivers and reimbursements may be terminated only by agreement of DMC and each Fund. The waivers and reimbursements are accrued daily and received monthly.

 

Fund         Operating expense
limitation as
a percentage
of average
daily net assets

Delaware Tax-Free Minnesota Fund

       0.60%

Delaware Tax-Free Minnesota Intermediate Fund

       0.56%

Delaware Minnesota High-Yield Municipal Bond Fund

       0.64%

Delaware Investments Fund Services Company (DIFSC), an affiliate of DMC, provides fund accounting and financial administrative oversight services to each Fund. For these services, DIFSC’s fees are calculated daily and paid monthly based on the aggregate daily net assets of all funds within the Delaware Funds at the following annual rates: 0.00475% of the first $35 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $45 billion (Total Fee). Each fund in the Delaware Funds pays a minimum of $4,000, which, in aggregate, is subtracted from the Total Fee. Each fund then pays its portion of the remainder of the Total Fee on a relative net asset value (NAV) basis. These amounts are included on the “Statements of operations” under “Accounting and administration expenses.” For the year ended August 31, 2020, each Fund was charged for these services as follows:

 

Fund        Fees  

Delaware Tax-Free Minnesota Fund

      $ 23,932  

Delaware Tax-Free Minnesota Intermediate Fund

        6,828  

Delaware Minnesota High-Yield Municipal Bond Fund

        11,021  

DIFSC is also the transfer agent and dividend disbursing agent of each Fund. For these services, DIFSC’s fees are calculated daily and paid monthly based on the aggregate daily net assets of the retail funds within the Delaware Funds at the following annual rates: 0.014% of the first $20 billion; 0.011% of the next $5 billion; 0.007% of the next $5 billion; and 0.005% of the next $20 billion; and 0.0025% of average daily net assets in excess of $50 billion. The fees payable to DIFSC under the shareholder services agreement described above are allocated among all retail funds in the Delaware Funds on a relative NAV basis. These amounts are included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses.” For the year ended August 31, 2020, each Fund was charged for these services as follows:

 

Fund         Fees  

Delaware Tax-Free Minnesota Fund

       $ 53,609  

Delaware Tax-Free Minnesota Intermediate Fund

         7,607  

Delaware Minnesota High-Yield Municipal Bond Fund

         18,869  

Pursuant to a sub-transfer agency agreement between DIFSC and BNY Mellon Investment Servicing (US) Inc. (BNYMIS), BNYMIS provides certain sub-transfer agency services to each Fund. Sub-transfer agency fees are paid by each Fund and are also included on the “Statements of operations” under

 

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Notes to financial statements

Delaware Funds® by Macquarie Minnesota municipal bond funds

 

2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)

 

“Dividend disbursing and transfer agent fees and expenses.” The fees that are calculated daily and paid as invoices are received on a monthly or quarterly basis.

Pursuant to a distribution agreement and distribution plan, each Fund pays DDLP, the distributor and an affiliate of DMC, an annual 12b-1 fee of 0.25% of the average daily net assets of the Class A shares and 1.00% of the average daily net assets of the Class C shares. DDLP has contracted to waive Delaware Tax-Free Minnesota Intermediate Fund’s Class A shares 12b-1 fee to 0.15% of average daily net assets from September 1, 2019 through August 31, 2020.** The fees are calculated daily and paid monthly. Institutional Class shares do not pay 12b-1 fees.

As provided in the investment management agreement, each Fund bears a portion of the cost of certain resources shared with DMC, including the cost of internal personnel of DMC and/or its affiliates that provide legal, tax, and regulatory reporting services to each Fund. These amounts are included on the “Statements of operations” under “Legal fees.” For the year ended August 31, 2020, each Fund was charged for internal legal, tax, and regulatory reporting services provided by DMC and/or its affiliates’ employees as follows:

 

Fund        Fees

Delaware Tax-Free Minnesota Fund

        $ 17,067

Delaware Tax-Free Minnesota Intermediate Fund

          2,578

Delaware Minnesota High-Yield Municipal Bond Fund

          6,143

For the year ended August 31, 2020, DDLP earned commissions on sales of Class A shares for each Fund as follows:

 

Fund        Commissions

Delaware Tax-Free Minnesota Fund

        $ 26,419

Delaware Tax-Free Minnesota Intermediate Fund

          3,914

Delaware Minnesota High-Yield Municipal Bond Fund

          9,196

For the year ended August 31, 2020, DDLP received gross CDSC commissions on redemptions of each Fund’s Class A and Class C shares, respectively, and these commissions were entirely used to offset upfront commissions previously paid by DDLP to broker/dealers on sales of those shares. The amounts received were as follows:

 

Fund        Class A        Class C  

Delaware Tax-Free Minnesota Fund

      $ 11,663        $ 585  

Delaware Tax-Free Minnesota Intermediate Fund

        2,136          394  

Delaware Minnesota High-Yield Municipal Bond Fund

        202          1,107  

Trustees’ fees include expenses accrued by each Fund for each Trustee’s retainer and meeting fees. Certain officers of DMC, DIFSC, and DDLP are officers and/or Trustees of the Trust. These officers and Trustees are paid no compensation by the Funds.

 

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Cross trades for the year ended August 31, 2020, were executed by each Fund pursuant to procedures adopted by the Boards designed to ensure compliance with Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds of investment companies, or between a fund of an investment company and another entity, that are or could be considered affiliates by virtue of having a common investment advisor (or affiliated investment advisors), common directors/trustees and/or common officers. At their regularly scheduled meetings, the Boards review such transactions for compliance with the procedures adopted by the Boards. Pursuant to these procedures, for the year ended August 31, 2020, the Funds engaged in the following Rule 17a-7 securities purchases and securities sales, which resulted in net realized gains (losses) as follows:

 

     Purchases    Sales    Net realized gain (loss)

Delaware Tax-Free Minnesota Fund

      $ 30,345,289      $ 20,969,732      $ (543,316 )

Delaware Tax-Free Minnesota Intermediate Fund

        13,399,508        6,998,309        51,674

Delaware Minnesota High-Yield Municipal Bond Fund

        13,078,149        13,542,941        429,455

 

*For Delaware Tax-Free Minnesota Fund and Delaware Minnesota High-Yield Municipal Bond Fund, the aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020. For Delaware Tax-Free Minnesota Intermediate Fund, the aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

**For Delaware Tax-Free Minnesota Intermediate Fund Class A shares, the aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

3. Investments

For the year ended August 31, 2020, each Fund made purchases and sales of investment securities other than short-term investments as follows:

 

Fund                               Purchases      Sales

Delaware Tax-Free Minnesota Fund

        $ 88,635,235        $ 111,434,127

Delaware Tax-Free Minnesota Intermediate Fund

          24,731,521          16,309,116

Delaware Minnesota High-Yield Municipal Bond Fund

          38,287,730          35,147,130

 

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Notes to financial statements

Delaware Funds® by Macquarie Minnesota municipal bond funds

 

3. Investments (continued)

 

The tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be the final tax cost basis adjustments, but approximates the tax basis unrealized gains and losses that may be realized and distributed to shareholders. At August 31, 2020, the cost and unrealized appreciation (depreciation) of investments for federal income tax purposes for each Fund were as follows:

 

Fund                                                                                              

   

Cost of

  investments  

     

Aggregate

unrealized

appreciation

of investments

     

Aggregate

unrealized

depreciation

of investments

   

Net unrealized

appreciation

of investments

Delaware Tax-Free Minnesota Fund

      $ 547,560,824        $ 30,862,437        $ (4,524,004 )      $ 26,338,433

Delaware Tax-Free Minnesota Intermediate Fund

        83,138,581          4,042,090          (388,325 )        3,653,765

Delaware Minnesota High-Yield Municipal Bond Fund

        189,290,759          9,005,320          (2,518,983 )        6,486,337

US GAAP defines fair value as the price that each Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A three-level hierarchy for fair value measurements has been established based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances. Each Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-level hierarchy of inputs is summarized as follows:

 

Level 1   

–

   Inputs are quoted prices in active markets for identical investments. (Examples: equity securities, open-end investment companies, futures contracts, and exchange-traded options contracts)
Level 2    –   Other observable inputs, including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs. (Examples: debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, and fair valued securities)

 

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Level 3   

–

    Significant unobservable inputs, including each Fund’s own assumptions used to determine the fair value of investments. (Examples: broker-quoted securities and fair valued securities)

Level 3 investments are valued using significant unobservable inputs. Each Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Valuations may also be based upon current market prices of securities that are comparable in coupon, rating, maturity, and industry. The derived value of a Level 3 investment may not represent the value which is received upon disposition and this could impact the results of operations.

The following tables summarize the valuation of each Fund’s investments by fair value hierarchy levels as of August 31, 2020:

 

     Delaware Tax-Free Minnesota Fund
     Level 2

Securities

     

Assets:

     

Municipal Bonds

      $ 567,649,257

Short-Term Investments

        6,250,000
    

 

 

  

Total Value of Securities

      $ 573,899,257
    

 

 

  

 

     Delaware Tax-Free Minnesota Intermediate  Fund
     Level 2

Securities

     

Assets:

     

Municipal Bonds

      $ 85,612,346

Short-Term Investments

        1,180,000
    

 

 

  

Total Value of Securities

      $ 86,792,346
    

 

 

  
     Delaware Minnesota High-Yield Municipal Bond  Fund
     Level 2

Securities

     

Assets:

     

Municipal Bonds

      $ 194,377,096

Short-Term Investments

        1,400,000
    

 

 

  

Total Value of Securities

      $ 195,777,096
    

 

 

  

During the year ended August 31, 2020, there were no transfers into or out of Level 3 investments. Each Fund’s policy is to recognize transfers into or out of Level 3 investments based on fair value at the beginning of the reporting period.

 

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Notes to financial statements

Delaware Funds® by Macquarie Minnesota municipal bond funds

 

3. Investments (continued)

 

A reconciliation of Level 3 investments is presented when a Fund has a significant amount of Level 3 investments at the beginning, interim, or end of the period in relation to that Fund’s net assets. During the year ended August 31, 2020, there were no Level 3 investments.

4. Dividend and Distribution Information

Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Additionally, distributions from net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the years ended August 31, 2020 and 2019 was as follows:

 

     Tax-exempt
income		    Ordinary
income		    Long-term
capital
gains 		   Total

Year ended August 31, 2020:

                    

Delaware Tax-Free Minnesota Fund

      $ 14,903,273      $ 843,521      $ 677,752      $ 16,424,546

Delaware Tax-Free Minnesota Intermediate Fund

        1,942,218        —        —        1,942,218

Delaware Minnesota High-Yield Municipal Bond Fund

        5,518,266        20        —        5,518,286

Year ended August 31, 2019:

                    

Delaware Tax-Free Minnesota Fund

        16,220,204        57        —        16,220,261

Delaware Tax-Free Minnesota Intermediate Fund

        2,178,234        —        —        2,178,234

Delaware Minnesota High-Yield Municipal Bond Fund

        5,301,651        19        —        5,301,670

5. Components of Net Assets on a Tax Basis

As of August 31, 2020, the components of net assets on a tax basis were as follows:

 

           Delaware Tax-Free       
Minnesota Fund		         Delaware Tax-Free       
Minnesota
Intermediate Fund		         Delaware Minnesota      
High-Yield Municipal
Bond Fund

Shares of beneficial interest

      $ 554,460,569     $ 84,302,908     $ 192,917,782

Undistributed tax-exempt income

        3,226       35,970       116,406

Qualified late year loss deferrals

        (338,708 )       —       —

Distributions payable

        (311,554 )       (40,160 )       (116,406 )

Capital loss carryforwards

        —       (167,389 )       (790,025 )

Unrealized appreciation of investments

        26,338,433       3,653,765       6,486,337
    

 

 

      

 

 

      

 

 

  

Net assets

      $ 580,151,966     $ 87,785,094     $ 198,614,094
    

 

 

      

 

 

      

 

 

  

 

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The differences between book basis and tax basis components of net assets are primarily attributable to tax treatment of market discount and premium on debt instruments and tax deferral of losses due to wash sales, as applicable.

Qualified late year ordinary and capital losses (including currency and specified gain (loss) items) represent losses realized from January 1, 2020 through August 31, 2020 and November 1, 2019 through August 31, 2020, respectively, that, in accordance with federal income tax regulations, the Funds have elected to defer and treat as having arisen in the following fiscal year.

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. At August 31, 2020, Delaware Minnesota High-Yield Municipal Bond Fund utilized $179,349 of capital loss carryforwards.

At August 31, 2020, capital loss carryforwards available to offset future realized capital gains were as follows:

 

     Loss carryforward character       
     Short-term      Long-term      Total

Delaware Tax-Free Minnesota Intermediate Fund

      $ 167,389        $ —        $ 167,389

Delaware Minnesota High-Yield Municipal Bond Fund

        790,025          —          790,025

At August 31, 2020, Delaware Tax-Free Minnesota Fund did not have any capital loss carryforwards.

 

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Notes to financial statements

Delaware Funds® by Macquarie Minnesota municipal bond funds

 

    

 

6. Capital Shares

Transactions in capital shares were as follows:

 

     Delaware  Tax-Free
Minnesota Fund		     Delaware  Tax-Free
Minnesota
Intermediate Fund		     Delaware Minnesota
High-Yield Municipal
Bond Fund		  
     Year ended     Year ended     Year ended  
     8/31/20     8/31/19     8/31/20     8/31/19     8/31/20     8/31/19  

Shares sold:

             

Class A

      2,470,484       2,812,545       760,322       521,273       1,132,737       1,091,129  

Class C

      162,787       252,325       58,542       82,541       332,654       291,127  

Institutional Class

      3,968,576       6,847,310       1,097,848       773,437       2,563,763       2,920,048  

Shares issued upon reinvestment of dividends and distributions:

 

      

Class A

      756,678       798,095       104,225       124,608       227,598       240,677  

Class C

      44,653       53,400       8,531       13,717       33,910       39,113  

Institutional Class

      314,844       263,476       42,075       36,374       208,101       174,526  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     7,718,022       11,027,151       2,071,543       1,551,950       4,498,763       4,756,620  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Shares redeemed:

             

Class A

      (3,813,207 )      (5,263,546 )      (629,289 )      (1,153,362 )      (1,146,037 )      (1,382,974 ) 

Class C

      (547,958 )      (878,285 )      (240,006 )      (249,651 )      (483,508 )      (481,931 ) 

Institutional Class

      (3,120,080 )      (3,637,252 )      (476,666 )      (294,820 )      (2,628,916 )      (1,406,980 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     (7,481,245 )      (9,779,083 )      (1,345,961 )      (1,697,833 )      (4,258,461 )      (3,271,885 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease)

      236,777       1,248,068       725,582       (145,883 )      240,302       1,484,735  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Certain shareholders may exchange shares of one class for shares of another class in the same Fund. These exchange transactions are included as subscriptions and redemptions in the tables above and on the “Statements of changes in net assets.” For the years ended August 31, 2020 and 2019, each Fund had the following exchange transactions:

 

     Exchange Redemptions      Exchange Subscriptions         
     Class A
  Shares  		      Class C
  Shares  		      Class A
  Shares  		      Institutional
Class
  Shares  		      Value  

Delaware Tax-Free Minnesota Fund

 

         

8/31/20

      73,750        57,333        55,209        76,105      $ 1,625,460  

8/31/19

      59,365        40,077        31,466        68,171        1,220,708  

Delaware Tax-Free Minnesota Intermediate Fund

 

      

8/31/20

      —        20,392        20,195        252        225,863  

8/31/19

      1,165        9,191        9,217        1,165        112,353  

Delaware Minnesota High-Yield Municipal Bond Fund

 

      

8/31/20

      4,022        46,853        45,608        5,405        559,234  

8/31/19

      26,086        44,298        9,709        60,819        745,406  

 

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7. Line of Credit

Each Fund, along with certain other funds in the Delaware Funds (Participants), was a participant in a $220,000,000 revolving line of credit intended to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. On November 4, 2019, the Participants entered into an amendment to the agreement for a $250,000,000 revolving line of credit (Agreement). The Agreement was increased to $275,000,000 on May 6, 2020. The Agreement is to be used as described below and operates in substantially the same manner as the original agreement. The line of credit available under the Agreement expires on November 2, 2020.

Under the Agreement, the Participants were charged an annual commitment fee of 0.15%, which was allocated across the Participants based on a weighted average of the respective net assets of each Participant. The Participants were permitted to borrow up to a maximum of one-third of their net assets under the Agreement. Each Participant was individually, and not jointly, liable for its particular advances, if any, under the line of credit. The line of credit available under the Agreement expired on November 4, 2019.

The Funds had no amounts outstanding as of August 31, 2020, or at any time during the year then ended.

8. Geographic, Credit, and Market Risks

Beginning in January 2020, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of a novel coronavirus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand and general market uncertainty. The effects of COVID-19 have and may continue to adversely affect the global economy, the economies of certain nations and individual issuers, all of which may negatively impact the Funds’ performance.

When interest rates rise, fixed income securities (i.e. debt obligations) generally will decline in value. These declines in value are greater for fixed income securities with longer maturities or durations.

IBOR risk is the risk that potential changes related to the use of the London interbank offered rate (LIBOR) could have adverse impacts on financial instruments that reference LIBOR. The potential abandonment of LIBOR could affect the value and liquidity of instruments that reference LIBOR. The use of alternative reference rate products may impact investment strategy performance. These risks may also apply with respect to changes in connection with other interbank offered rates (“IBORs”), such as the euro overnight index average (EONIA), which are also the subject of recent reform.

The Funds concentrate their investments in securities issued by municipalities, mainly in Minnesota, and may be subject to geographic concentration risk. In addition, the Funds have the flexibility to invest in issuers in US territories and possessions such as the Commonwealth of Puerto Rico, the US Virgin Islands, and Guam, whose bonds are also free of federal and individual state income taxes.

The value of the Funds’ investments may be adversely affected by new legislation within the US state or territories, regional or local economic conditions, and differing levels of supply and demand for municipal bonds. Many municipalities insure repayment for their obligations. Although bond insurance reduces the

 

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Notes to financial statements

Delaware Funds® by Macquarie Minnesota municipal bond funds

 

8. Geographic, Credit, and Market Risks (continued)

 

risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons, and there is no certainty that the insurance company will meet its obligations. A real or perceived decline in creditworthiness of a bond insurer can have an adverse impact on the value of insured bonds held in each Fund. At August 31, 2020, the percentages of each Fund’s net assets insured by bond insurers are listed below, and these securities have been identified in the “Schedules of investments.”

 

     Delaware  Tax-Free
Minnesota Fund		   Delaware  Tax-Free
Minnesota
Intermediate Fund		   Delaware  Minnesota
High-Yield Municipal
Bond Fund

Assured Guaranty Municipal Corporation

        0.68 %       1.81 %       0.55 %

National Public Finance Guarantee Corporation

        0.83 %          —          —

Total

        1.51 %       1.81 %       0.55 %

Each Fund invests a portion of its assets in high yield fixed income securities, which are securities rated lower than BBB- by Standard & Poor’s Financial Services LLC (S&P), lower than Baa3 by Moody’s Investors Service Inc. (Moody’s), or similarly rated by another nationally recognized statistical rating organization. Investments in these higher yielding securities are generally accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.

Each Fund invests in certain obligations that may have liquidity protection designed to ensure that the receipt of payments due on the underlying security is timely. Such protection may be provided through guarantees, insurance policies, or letters of credit obtained by the issuer or sponsor through third parties, through various means of structuring the transaction or through a combination of such approaches. Each Fund will not pay any additional fees for such credit support, although the existence of credit support may increase the price of a security.

Each Fund may invest in advance refunded bonds, escrow secured bonds, or defeased bonds. Under current federal tax laws and regulations, state and local government borrowers are permitted to refinance outstanding bonds by issuing new bonds. The issuer refinances the outstanding debt to either reduce interest costs or to remove or alter restrictive covenants imposed by the bonds being refinanced. A refunding transaction where the municipal securities are being refunded within 90 days from the issuance of the refunding issue is known as a “current refunding.” Advance refunded bonds are bonds in which the refunded bond issue remains outstanding for more than 90 days following the issuance of the refunding issue. In an advance refunding, the issuer will use the proceeds of a new bond issue to purchase high grade interest-bearing debt securities, which are then deposited in an irrevocable escrow account held by an escrow agent to secure all future payments of principal and interest and bond premium of the advance refunded bond. Bonds are “escrowed to maturity” when the proceeds of the refunding issue are deposited in an escrow account for investment sufficient to pay all of the principal and interest on the original interest payment and maturity dates.

 

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Bonds are considered “pre-refunded” when the refunding issue’s proceeds are escrowed only until a permitted call date or dates on the refunded issue with the refunded issue being redeemed at the time, including any required premium. Bonds become “defeased” when the rights and interests of the bondholders and of their lien on the pledged revenues or other security under the terms of the bond contract are substituted with an alternative source of revenues (the escrow securities) sufficient to meet payments of principal and interest to maturity or to the first call dates. Escrowed secured bonds will often receive a rating of AAA from Moody’s, S&P, and/or Fitch Ratings due to the strong credit quality of the escrow securities and the irrevocable nature of the escrow deposit agreement.

Each Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A, promulgated under the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair each Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, each Board has delegated to DMC, the day-to-day functions of determining whether individual securities are liquid for purposes of each Fund’s limitation on investments in illiquid securities. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to each Fund’s 15% limit on investments in illiquid securities. Rule 144A securities have been identified on the “Schedules of investments.”

9. Contractual Obligations

Each Fund enters into contracts in the normal course of business that contain a variety of indemnifications. Each Fund’s maximum exposure under these arrangements is unknown. However, each Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed each Fund’s existing contracts and expects the risk of loss to be remote.

10. Recent Accounting Pronouncements

In March 2017, FASB issued Accounting Standards Update (ASU), ASU 2017-08, Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities which amends the amortization period for certain callable debt securities purchased at a premium, shortening such period to the earliest call date. ASU 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management has implemented ASU 2017-08 and determined that the impact of this guidance to each Fund’s net assets at the end of the period is not material.

In August 2018, FASB issued ASU 2018-13, which changes certain fair value measurement disclosure requirements. ASU 2018-13, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for the timing of transfers between levels and the valuation process for Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years,

 

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Notes to financial statements

Delaware Funds® by Macquarie Minnesota municipal bond funds

 

10. Recent Accounting Pronouncements (continued)

 

beginning after December 15, 2019. At this time, Management is evaluating the implications of these changes on the financial statements.

In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in ASU 2020-04 provide optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of LIBOR and other interbank-offered based reference rates as of the end of 2021. ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. As of the financial reporting period, Management is evaluating the impact of applying this ASU.

11. Subsequent Events

Management has determined that no material events or transactions occurred subsequent to August 31, 2020, that would require recognition or disclosure in the Funds’ financial statements.

 

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Report of independent

registered public accounting firm

To the Board of Trustees of Voyageur Tax-Free Funds, Voyageur Intermediate Tax-Free Funds and Voyageur Mutual Funds and Shareholders of Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Intermediate Fund and Delaware Minnesota High-Yield Municipal Bond Fund

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Delaware Tax-Free Minnesota Fund (constituting Voyageur Tax-Free Funds), Delaware Tax-Free Minnesota Intermediate Fund (constituting Voyageur Intermediate Tax-Free Funds) and Delaware Minnesota High-Yield Municipal Bond Fund (one of the funds constituting Voyageur Mutual Funds) (hereafter collectively referred to as the “Funds”) as of August 31, 2020, the related statements of operations for the year ended August 31, 2020, the statements of changes in net assets for each of the two years in the period ended August 31, 2020, including the related notes, and the financial highlights for each of the five years in the period ended August 31, 2020 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Funds as of August 31, 2020, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended August 31, 2020 and each of the financial highlights for each of the five years in the period ended August 31, 2020 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinions

These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of August 31, 2020 by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinions.

/s/ PricewaterhouseCoopers LLP

Philadelphia, Pennsylvania

October 19, 2020

We have served as the auditor of one or more investment companies in Delaware Funds® by Macquarie since 2010.

 

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Other Fund information (Unaudited)

Delaware Funds® by Macquarie Minnesota municipal bond funds

Liquidity Risk Management Program

The Securities and Exchange Commission (the “SEC”) has adopted Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”), which requires all open-end funds (other than money market funds) to adopt and implement a program reasonably designed to assess and manage the fund’s “liquidity risk,” defined as the risk that the fund could not meet requests to redeem shares issued by the fund without significant dilution of remaining investors’ interests in the fund.

The Funds have adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the “Program”). The Board has designated the Division Director of the US Operational Risk Group of Macquarie Asset Management as the Program Administrator for each Fund in the Trust.

As required by the Liquidity Rule, the Program includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each of the Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of each Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting each Fund’s acquisition of Illiquid investments if, immediately after the acquisition, each Fund would hold more than 15% of its net assets in Illiquid assets. The Program also requires reporting to the SEC (on a non-public basis) and to the Board if each Fund’s holdings of Illiquid assets exceed 15% of each Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).

In assessing and managing each Fund’s liquidity risk, the Program Administrator considers, as relevant, a variety of factors, including: (1) each Fund’s investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Funds during both normal and reasonably foreseeable stressed conditions; and (3) each Fund’s holdings of cash and cash equivalents and any borrowing arrangements. Classification of each Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or to sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value. Each Fund primarily holds assets that are classified as Highly Liquid, and therefore is not required to establish an HLIM.

At a meeting of the Board held on May 19-21, 2020, the Program Administrator provided a written report to the Board addressing the Program’s operation and assessing the adequacy and effectiveness of its implementation for the period from December 1, 2018 through March 31, 2020. The report concluded that the Program is appropriately designed and effectively implemented and that it meets the requirements of Rule 22e-4 and each Fund’s liquidity needs. Each Fund’s HLIM is set at an appropriate level and the Funds complied with its HLIM at all times during the reporting period.

 

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Tax Information

The information set forth below is for each Fund’s fiscal year as required by federal income tax laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of the Funds. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in January of each year. Please consult your tax advisor for proper treatment of this information.

All disclosures are based on financial information available as of the date of this annual report and, accordingly are subject to change. For any and all items requiring reporting, it is the intention of the Funds to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.

For the fiscal year ended August 31, 2020, each Fund reports distributions paid during the year as follows:

 

    

(A)

Long-Term

Capital Gains

Distributions

(Tax Basis)

  

(B)

Ordinary Income

Distributions

(Tax Basis)

  

(C)

Tax-Exempt

Distributions

(Tax Basis)

  

Total

Distributions

(Tax Basis)

Delaware Tax-Free Minnesota Fund

        4.13 %       5.13 %       90.74 %       100.00 %

Delaware Tax-Free Minnesota Intermediate Fund

        —       —       100.00 %       100.00 %

Delaware Minnesota High-Yield Municipal Bond Fund

        —       —       100.00 %       100.00 %

                                                 

(A), (B) and (C) are based on a percentage of each Fund’s total distributions.

Board consideration of Investment Advisory Agreements for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund at a meeting held on August 11-13, 2020

At a meeting held on August 11-13, 2020 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory Agreements for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund (each, a “Fund” and together, the “Funds”). In making its decision, the Board considered information furnished at regular quarterly Board meetings, including reports detailing Fund performance, investment strategies, and expenses, as well as information prepared specifically in connection with the renewal of the investment advisory and sub-advisory contracts. Information furnished specifically in connection with the renewal of the Investment Management Agreement with Delaware Management Company (“DMC”), a series of Macquarie Investment Management Business Trust (“MIMBT”), included materials provided by DMC and its affiliates (collectively, “Macquarie Investment Management”) concerning, among other things, the

 

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Other Fund information (Unaudited)

Delaware Funds® by Macquarie Minnesota municipal bond funds

 

Board consideration of Investment Advisory Agreements for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund at a meeting held on August 11-13, 2020 (continued)

nature, extent, and quality of services provided to the Funds; the costs of such services to the Funds; economies of scale; and the investment manager’s financial condition and profitability. In addition, in connection with the Annual Meeting, materials were provided to the Trustees in May 2020, including reports provided by Broadridge Financial Solutions (“Broadridge”). The Broadridge reports compared each Fund’s investment performance and expenses with those of other comparable mutual funds. The Independent Trustees reviewed and discussed the Broadridge reports with independent legal counsel to the Independent Trustees. In addition to the information noted above, the Board also requested and received information regarding DMC’s policy with respect to advisory fee levels and its breakpoint philosophy, the structure of portfolio manager compensation, comparative client fee information, and any constraints or limitations on the availability of securities for certain investment styles, which had in the past year inhibited, or which were likely in the future to inhibit, the investment manager’s ability to invest fully in accordance with Fund policies.

In considering information relating to the approval of each Fund’s advisory agreement, the Independent Trustees received assistance and advice from and met separately with independent legal counsel to the Independent Trustees and also received assistance and advice from an experienced and knowledgeable independent fund consultant, JDL Consultants, LLC (“JDL”). Although the Board gave attention to all information furnished, the following discussion identifies, under separate headings, the primary factors taken into account by the Board during its contract renewal considerations.

Nature, extent, and quality of services. The Board considered the services provided by DMC to the Funds and their shareholders. In reviewing the nature, extent, and quality of services, the Board considered reports furnished to it throughout the year, which covered matters such as the relative performance of the Funds; compliance of portfolio managers with the investment policies, strategies, and restrictions for the Funds; compliance by DMC and Delaware Distributors, L.P. (together, “Management”) personnel with the Code of Ethics adopted throughout the Delaware Funds® by Macquarie (“Delaware Funds”); and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of DMC and the emphasis placed on research in the investment process. The Board recognized DMC’s receipt of certain favorable industry distinctions during the past several years. The Board gave favorable consideration to DMC’s efforts to control expenses while maintaining service levels committed to Fund matters. The Board also noted the benefits provided to Fund shareholders through (a) each shareholder’s ability to: (i) exchange an investment in one Delaware Fund for the same class of shares in another Delaware Fund without a sales charge, or (ii) reinvest Fund dividends into additional shares of the Fund or into additional shares of other Delaware Funds, and (b) the privilege to combine holdings in other Delaware Funds to obtain a reduced sales charge. The Board was satisfied with the nature, extent, and quality of the overall services provided by DMC.

Investment performance. The Board placed significant emphasis on the investment performance of the Funds in view of the importance of investment performance to shareholders. Although the Board considered performance reports and discussions with portfolio managers at Investment Committee meetings throughout the year, the Board gave particular weight to the Broadridge reports furnished for

 

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the Annual Meeting. The Broadridge reports prepared for each Fund showed the investment performance of its Class A shares in comparison to a group of similar funds as selected by Broadridge (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for each Fund was shown for the past 1-, 3-, 5-, and 10-year periods, to the extent, applicable, ended January 31, 2020. The Board’s objective is that each Fund’s performance for the 1-, 3-, and 5-year periods be at or above the median of its Performance Universe.

Delaware Tax-Free Minnesota Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional Minnesota municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1-year period was in the third quartile of its Performance Universe. The report further showed that the Fund’s total return for the 3-, 5-, and 10-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.

Delaware Tax-Free Minnesota Intermediate Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional “other states” intermediate municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1- and 3-year periods was in the second quartile of its Performance Universe. The report further showed that the Fund’s total return for the 5- and 10-year periods was in the first quartile of its Performance Universe. The Board was satisfied with performance.

Delaware Minnesota High-Yield Municipal Bond Fund – Broadridge currently classifies the Fund as a Minnesota municipal debt fund. However, Management believes that it is more appropriate to include the Fund in the high yield municipal debt funds category, to provide a comparison to a representative peer group based on credit quality instead of a peer group based on state of issuance. Accordingly, the Broadridge report prepared for the Fund compares the Fund’s performance to two separate Performance Universes – one consisting of the Fund and all retail and institutional Minnesota municipal debt funds and the other consisting of the Fund and all retail and institutional high yield municipal debt funds. When compared to Minnesota municipal debt funds, the Broadridge report comparison showed that the Fund’s total return for the 1-, 3-, 5-, and 10-year periods was in the first quartile of its Performance Universe. When compared to high yield municipal debt funds, the Broadridge report comparison showed that the Fund’s total return for the 1-, 3-, 5-, and 10-year periods was in the fourth quartile of its Performance Universe. The Board observed that, when compared to other Minnesota municipal debt funds, the Fund’s performance was in line with the Board’s objective; however, when compared to other high yield municipal debt funds, the Fund’s performance results were not in line with the Board’s objective. In evaluating the Fund’s performance, the Board considered the numerous investment and performance reports and other information delivered by Management personnel to the Board’s Investments Committee. The Board was satisfied that Management was taking action to improve comparative Fund performance and to meet the Board’s performance objective.

Comparative expenses. The Board considered expense data for the Delaware Funds. Management provided the Board with information on pricing levels and fee structures for each Fund as of its most recently completed fiscal year. The Board also focused on the comparative analysis of effective

 

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Other Fund information (Unaudited)

Delaware Funds® by Macquarie Minnesota municipal bond funds

 

Board consideration of Investment Advisory Agreements for Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund at a meeting held on August 11-13, 2020 (continued)

management fees and total expense ratios of each Fund versus effective management fees and total expense ratios of a group of similar funds as selected by Broadridge (the “Expense Group”). In reviewing comparative costs, each Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. Each Fund’s total expenses were also compared with those of its Expense Group. The Broadridge total expenses, for comparative consistency, were shown by Broadridge for Class A shares and comparative total expenses including 12b-1 and non-12b-1 service fees. The Board’s objective is for each Fund’s total expense ratio to be competitive with those of the peer funds within its Expense Group.

Delaware Tax-Free Minnesota Fund – The expense comparisons for the Fund showed that its actual management fee and total expenses were in the quartile with the second highest expenses of its Expense Group. The Board noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered waivers in place through December 2020 and various initiatives implemented by Management, such as the negotiation of lower fees for fund accounting and fund accounting oversight services, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.

Delaware Tax-Free Minnesota Intermediate Fund – The expense comparisons for the Fund showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Fund in comparison to those of its Expense Group as shown in the Broadridge report.

Delaware Minnesota High-Yield Municipal Bond Fund – When compared to Minnesota municipal debt funds, the expense comparisons for the Fund showed that its actual management fee was in the quartile with the second lowest expenses in its Expense Group and its total expenses were in the quartile with the highest expenses of the Expense Group. When compared to high yield municipal debt funds, the expense comparisons for the Fund showed that its actual management fee was in the quartile with the second lowest expenses of its Expense Group and its total expenses were in the quartile with the second highest expenses of the Expense Group. The Board noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered fee waivers in place through December 2020 and various initiatives implemented by Management, such as the negotiation of lower fees for fund accounting, fund accounting oversight services, and custody, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.

Management profitability. The Board considered the level of profits realized by DMC in connection with the operation of the Funds. In this respect, the Board reviewed the Investment Management Profitability Analysis that addressed the overall profitability of DMC’s business in providing management and other

 

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services to each of the individual funds and the Delaware Funds as a whole. Specific attention was given to the methodology used by DMC in allocating costs for the purpose of determining profitability. Management stated that the level of profits of DMC, to a certain extent, reflects recent operational cost savings and efficiencies initiated by DMC. The Board considered DMC’s efforts to improve services provided to Fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which DMC might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. As part of its work, the Board also reviewed a report prepared by JDL regarding MIMBT profitability as compared to certain peer fund complexes and the Independent Trustees met with JDL personnel to discuss DMC’s profitability in such context. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of DMC.

Economies of scale. The Trustees considered whether economies of scale are realized by DMC as each Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed each Fund’s advisory fee pricing and structure, approved by the Board and shareholders, which includes breakpoints, and which applies to most funds in the Delaware Funds complex. Breakpoints in the advisory fee occur when the advisory fee rate is reduced on assets in excess of specified levels. Breakpoints result in a lower advisory fee than would otherwise be the case in the absence of breakpoints, when the asset levels specified in the breakpoints are exceeded. Although, as of March 31, 2020, Delaware Tax-Free Minnesota Intermediate Fund and Delaware Minnesota High-Yield Municipal Bond Fund had not reached a size at which they could take advantage of any breakpoints in the applicable fee schedule, the Board recognized that each Fund’s fee was structured so that, if the Fund increases sufficiently in size, then economies of scale may be shared. The Board noted that, as of March 31, 2020, Delaware Tax-Free Minnesota Fund’s assets exceeded the first breakpoint level. The Board believed that, given the extent to which economies of scale might be realized by DMC and its affiliates, the schedule of fees under the Investment Management Agreement provides a sharing of benefits with the Fund and its shareholders.

 

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Board of trustees / directors and officers addendum

Delaware Funds® by Macquarie

A mutual fund is governed by a Board of Trustees/Directors (“Trustees”), which has oversight responsibility for the management of a fund’s business affairs. Trustees establish procedures and oversee and review the performance of the investment manager, the distributor, and others who perform services for the fund. The independent fund trustees, in particular, are advocates for shareholder interests. Each trustee has served in that capacity since he or she was elected to or appointed to the Board of Trustees, and will continue to serve until his or her retirement or the election of a new trustee in his or her place. The following is a list of the Trustees and Officers with certain background and related information.

 

Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Interested Trustee

Shawn K. Lytle1

610 Market Street

Philadelphia, PA

19106

February 1970

    President, Chief Executive Officer, and Trustee    President and Chief Executive Officer since August 2015 Trustee since September 2015    President — Macquarie Investment Management2 (June 2015–Present) Regional Head of Americas — UBS Global Asset Management (April 2010–May 2015)    93    Trustee —UBS Relationship Funds, SMA Relationship Trust, and UBS Funds (May 2010–April 2015)
 

Independent Trustees

Jerome D. Abernathy

610 Market Street

Philadelphia, PA

19106

July 1959

    Trustee    Since January 2019    Managing Member, Stonebrook Capital Management, LLC (financial technology: macro factors and databases) (January 1993-Present)    93    None

 

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Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Thomas L. Bennett

610 Market Street

Philadelphia, PA

19106

October 1947

    Chair and Trustee    Trustee since March 2005 Chair since March 2015    Private Investor (March 2004–Present)    93    None

Ann D. Borowiec

610 Market Street

Philadelphia, PA

19106

November 1958

    Trustee    Since March 2015    Chief Executive Officer, Private Wealth Management (2011–2013) and Market Manager, New Jersey Private Bank (2005–2011) — J.P. Morgan Chase & Co.    93    Director —Banco Santander International (October 2016–December 2019) Director — Santander Bank, N.A. (December 2016–December 2019)

Joseph W. Chow

610 Market Street

Philadelphia, PA

19106

January 1953

    Trustee    Since January 2013    Private Investor (April 2011–Present)    93    Director and Audit Committee Member — Hercules Technology Growth Capital, Inc. (July 2004–July 2014)

 

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Board of trustees / directors and officers addendum

Delaware Funds® by Macquarie

 

Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

John A. Fry

610 Market Street

Philadelphia, PA

19106

May 1960

    Trustee    Since January 2001    President — Drexel University (August 2010–Present) President — Franklin & Marshall College (July 2002–June 2010)    93    Director; Compensation Committee and Governance Committee Member — Community Health Systems (May 2004–Present) Director — Drexel Morgan & Co. (2015–2019) Director and Audit Committee Member — vTv Therapeutics Inc. (2017–Present) Director and Audit Committee Member — FS Credit Real Estate Income Trust, Inc. (2018–Present) Director — Federal Reserve Bank of Philadelphia (January 2020–Present)

Lucinda S. Landreth

610 Market Street

Philadelphia, PA

19106

June 1947

    Trustee    Since March 2005    Private Investor (2004–Present)    93    None

 

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Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Frances A.

Sevilla-Sacasa

610 Market Street

Philadelphia, PA

19106

January 1956

    Trustee    Since September 2011   

Private Investor

(January 2017–Present)

Chief Executive Officer —Banco Itaú International

(April 2012–December 2016)

Executive Advisor to Dean (August 2011–March 2012) and Interim Dean

(January 2011–July 2011) — University of Miami School of Business Administration

President — U.S. Trust, Bank of America Private Wealth Management (Private Banking) (July 2007-December 2008)

    93   

Trust Manager and Audit Committee Chair — Camden Property Trust

(August 2011–Present)

Director; Strategic

Planning and Reserves

Committee and Nominating

and Governance

Committee Member —

Callon Petroleum Company

(December 2019–Present)

Director; Audit Committee Member — Carrizo Oil & Gas, Inc. (March 2018–December 2019)

 

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Board of trustees / directors and officers addendum

Delaware Funds® by Macquarie

 

Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Thomas K. Whitford

610 Market Street

Philadelphia, PA

19106

March 1956

    Trustee    Since January 2013    Vice Chairman (2010–April 2013) — PNC Financial Services Group    93   

Director — HSBC North America Holdings Inc.

(December 2013–Present)

Director — HSBC USA Inc.

(July 2014–Present)

Director — HSBC Bank USA, National Association

(July 2014–March 2017)

Director — HSBC Finance Corporation

(December 2013–April 2018)

 

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Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Christianna Wood

610 Market Street

Philadelphia, PA

19106

August 1959

    Trustee    Since January 2019    Chief Executive Officer and President — Gore Creek Capital, Ltd. (August 2009–Present)    93   

Director; Finance Committee and Audit Committee Member — H&R Block Corporation

(July 2008–Present)

Director; Investments Committee, Capital and Finance Committee, and Audit Committee Member — Grange Insurance (2013–Present)

Trustee; Chair of Nominating and Governance Committee and Audit Committee Member — The Merger Fund (2013–Present), The Merger Fund VL (2013–Present); WCM Alternatives: Event-Driven Fund (2013–Present), and WCM Alternatives: Credit Event Fund (December 2017–Present)

Director; Chair of Governance Committee and Audit Committee Member — International Securities Exchange (2010–2016)

 

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Board of trustees / directors and officers addendum

Delaware Funds® by Macquarie

 

Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Janet L. Yeomans

610 Market Street

Philadelphia, PA 19106

July 1948

    Trustee    Since April 1999   

Vice President and Treasurer (January 2006–July 2012), Vice President — Mergers & Acquisitions

(January 2003–January 2006), and Vice President and Treasurer

(July 1995–January 2003) — 3M Company

    93    Director; Personnel and Compensation Committee Chair; Member of Nominating, Investments, and Audit Committees for various periods throughout directorship — Okabena Company (2009–2017)
 

Officers

David F. Connor

610 Market Street

Philadelphia, PA 19106

December 1963

    Senior Vice President, General Counsel, and Secretary    Senior Vice President, since May 2013; General Counsel since May 2015; Secretary since October 2005    David F. Connor has served in various capacities at different times at Macquarie Investment Management.    93    None3

Daniel V. Geatens

610 Market Street

Philadelphia, PA 19106

October 1972

    Vice President and Treasurer    Vice President and Treasurer since October 2007    Daniel V. Geatens has served in various capacities at different times at Macquarie Investment Management.    93    None3

 

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Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Richard Salus

610 Market Street

Philadelphia, PA 19106

October 1963

    Senior Vice President and Chief Financial Officer    Senior Vice President and Chief Financial Officer since November 2006    Richard Salus has served in various capacities at different times at Macquarie Investment Management.    93    None

1 Shawn K. Lytle is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor.

2 Macquarie Investment Management is the marketing name for Macquarie Management Holdings, Inc. and its subsidiaries, including the Fund’s(s’) investment manager, principal underwriter, and its transfer agent.

3 David F. Connor and Daniel V. Geatens serve in similar capacities for the six portfolios of the Optimum Fund Trust, which have the same investment advisor, principal underwriter, and transfer agent as the registrant. Mr. Geatens also serves as the Chief Financial Officer of the Optimum Fund Trust, and he is the Chief Financial Officer and Treasurer for Macquarie Global Infrastructure Total Return Fund Inc.

The Statement of Additional Information for the Fund(s) includes additional information about the Trustees and Officers and is available, without charge, upon request by calling 800 231-8002.

 

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About the organization

Board of trustees

 

Shawn K. Lytle

President and

Chief Executive Officer

Delaware Funds®

by Macquarie

Philadelphia, PA

Jerome D. Abernathy

Managing Member

Stonebrook Capital

Management, LLC

Jersey City, NJ

Thomas L. Bennett

Chairman of the Board

Delaware Funds

by Macquarie

Private Investor

Rosemont, PA

Ann D. Borowiec

Former Chief Executive

Officer

Private Wealth Management

J.P. Morgan Chase & Co.

New York, NY

Joseph W. Chow

Former Executive Vice

President

State Street Corporation

Boston, MA

John A. Fry

President

Drexel University

Philadelphia, PA

Lucinda S. Landreth

Former Chief Investment

Officer

Assurant, Inc.

New York, NY

Frances A.

Sevilla-Sacasa

Former Chief Executive

Officer

Banco Itaú International

Miami, FL

Thomas K. Whitford

Former Vice Chairman

PNC Financial Services Group

Pittsburgh, PA

Christianna Wood

Chief Executive Officer

and President

Gore Creek Capital, Ltd.

Golden, CO

Janet L. Yeomans

Former Vice President and

Treasurer

3M Company

St. Paul, MN

 

 

Affiliated officers

David F. Connor

Senior Vice President,

General Counsel,

and Secretary

Delaware Funds

by Macquarie

Philadelphia, PA

Daniel V. Geatens

Vice President and

Treasurer

Delaware Funds

by Macquarie

Philadelphia, PA

Richard Salus

Senior Vice President and

Chief Financial Officer

Delaware Funds

by Macquarie

Philadelphia, PA

        

 

 

This annual report is for the information of Delaware Tax-Free Minnesota Fund, Delaware Tax-Free Minnesota Intermediate Fund, and Delaware Minnesota High-Yield Municipal Bond Fund shareholders, but it may be used with prospective investors when preceded or accompanied by the Delaware Fund fact sheet for the most recently completed calendar quarter. These documents are available at delawarefunds.com/literature.

 

 

Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT. Each Fund’s Forms N-PORT, as well as a description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities, are available without charge (i) upon request, by calling 800 523-1918; and (ii) on the SEC’s website at sec.gov. In addition, a description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities and the Schedules of Investments included in the Funds’ most recent Form N-PORT are available without charge on the Funds’ website at delawarefunds.com/literature. Each Fund’s Forms N-PORT may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330.

Information (if any) regarding how the Funds voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Funds’ website at delawarefunds.com/proxy; and (ii) on the SEC’s website at sec.gov.

 

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LOGO    LOGO

Annual report        

Fixed income mutual funds

Delaware Tax-Free USA Fund

Delaware Tax-Free USA Intermediate Fund

Delaware National High-Yield Municipal Bond Fund

August 31, 2020

 

 

Beginning on or about June 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of your Fund’s shareholder reports will no longer be sent to you by mail, unless you specifically request them from the Fund or from your financial intermediary, such as a broker/dealer, bank, or insurance company. Instead, you will be notified by mail each time a report is posted on the website and provided with a link to access the report.

 

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you do not need to take any action. You may elect to receive shareholder reports and other communications from the Fund electronically by signing up at delawarefunds.com/edelivery. If you own these shares through a financial intermediary, you may contact your financial intermediary.

 

You may elect to receive paper copies of all future shareholder reports free of charge. You can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by contacting us at 800 523-1918. If you own these shares through a financial intermediary, you may contact your financial intermediary to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with the Delaware Funds® by Macquarie or your financial intermediary.

 

 

 

Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Funds’ prospectus and their summary prospectuses, which may be obtained by visiting delawarefunds.com/literature or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.

You can obtain shareholder reports and prospectuses online instead of in the mail. Visit delawarefunds.com/edelivery.

 

    

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Experience Delaware Funds® by Macquarie

Macquarie Investment Management (MIM) is a global asset manager with offices in the United States, Europe, Asia, and Australia. As active managers, we prioritize autonomy and accountability at the investment team level in pursuit of opportunities that matter for clients. Delaware Funds is one of the longest-standing mutual fund families, with more than 80 years in existence.

If you are interested in learning more about creating an investment plan, contact your financial advisor.

You can learn more about Delaware Funds or obtain a prospectus for Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund at delawarefunds.com/literature.

 

Manage your account online

 

●   Check your account balance and transactions

 

●   View statements and tax forms

 

●   Make purchases and redemptions

Visit delawarefunds.com/account-access.

Macquarie Asset Management (MAM) offers a diverse range of products including securities investment management, infrastructure and real asset management, and fund and equity-based structured products. MIM is the marketing name for certain companies comprising the asset management division of Macquarie Group. This includes the following investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, and Macquarie Investment Management Europe S.A.

The Funds are distributed by Delaware Distributors, L.P. (DDLP), an affiliate of MIMBT and Macquarie Group Limited.

Other than Macquarie Bank Limited (MBL), none of the entities noted are authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.

The Funds are governed by US laws and regulations.

Table of contents

 

Portfolio management review

      1  

Performance summaries

      6  

Disclosure of Fund expenses

      21  

Security type / sector / state / territory allocations

      24  

Schedules of investments

      30  

Statements of assets and liabilities

      88  

Statements of operations

      90  

Statements of changes in net assets

      91  

Financial highlights

      98  

Notes to financial statements

      116  

Report of independent registered public accounting firm

      133  

Other Fund information

      134  

Board of trustees / directors and officers addendum

      140  

About the organization

      148  

Unless otherwise noted, views expressed herein are current as of August 31, 2020, and subject to change for events occurring after such date.

The Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.

Advisory services provided by Delaware Management Company, a series of MIMBT, a US registered investment advisor.

All third-party marks cited are the property of their respective owners.

© 2020 Macquarie Management Holdings, Inc.

 

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Portfolio management review

 

Delaware Funds® by Macquarie national tax-free funds    September 8, 2020 (Unaudited)

 

Performance preview (for the year ended August 31, 2020)

 

 

Delaware Tax-Free USA Fund (Institutional Class shares)

      1-year return          +3.70%    

Delaware Tax-Free USA Fund (Class A shares)

      1-year return          +3.44%    

Bloomberg Barclays Municipal Bond Index (benchmark)

      1-year return          +3.24%    

Lipper General & Insured Municipal Debt Funds Average

      1-year return          +2.10%    

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free USA Fund, please see the table on page 6.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.

The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.

The Lipper General & Insured Municipal Debt Funds Average compares funds that either invest primarily in municipal debt issues in the top three credit ratings or invest primarily in municipal debt issues insured as to timely payment.

Please see page 9 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

 

Delaware Tax-Free USA Intermediate Fund (Institutional Class shares)

      1-year return          +2.92%    

Delaware Tax-Free USA Intermediate Fund (Class A shares)

      1-year return          +2.76%    

Bloomberg Barclays 3–15 Year Blend Municipal Bond Index (benchmark)

      1-year return          +3.39%    

Lipper Intermediate Municipal Debt Funds Average

      1-year return          +2.28%    

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free USA Intermediate Fund, please see the table on page 11.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.

The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.

The Lipper Intermediate Municipal Debt Funds Average compares funds that invest in municipal debt issues with dollar-weighted average maturities of 5 to 10 years.

Please see page 14 for a description of the Index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

 

Delaware National High-Yield Municipal Bond Fund (Institutional Class shares)

      1-year return          +1.44%    

Delaware National High-Yield Municipal Bond Fund (Class A shares)

      1-year return          +1.06%    

Bloomberg Barclays Municipal Bond Index (benchmark)

      1-year return          +3.24%    

Lipper High Yield Municipal Debt Funds Average

      1-year return          -0.02%    

Past performance does not guarantee future results.

For complete, annualized performance for Delaware National High-Yield Municipal Bond Fund, please see the table on page 16.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.

The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.

The Lipper High Yield Municipal Debt Funds Average compares funds that invest at least 50% of assets in lower-rated municipal debt issues.

Please see page 19 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

 

1

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Portfolio management review

Delaware Funds® by Macquarie national tax-free funds

 

Investment objectives

Delaware Tax-Free USA Fund seeks as high a level of current interest income exempt from federal income tax as is available from municipal obligations and as is consistent with prudent investment management and preservation of capital.

Delaware Tax-Free USA Intermediate Fund seeks as high a level of current interest income exempt from federal income tax as is available from municipal obligations and as is consistent with prudent investment management and preservation of capital.

Delaware National High-Yield Municipal Income Fund seeks a high level of current income exempt from federal income tax primarily through investment in medium- and lower-grade municipal obligations.

 

Economic backdrop

For most of the first half of the fiscal year ended August 31, 2020, the US economy continued along its steady growth path with historically low unemployment. In both the third and fourth calendar quarters of 2019, the nation’s gross domestic product (GDP) – a measure of national economic output – rose by an annualized 2.1%. Meanwhile, the US jobless rate remained at or near a half-century low throughout 2019 and into 2020, reaching a low of 3.9% in September 2019.

Starting in February 2020, however, global economic conditions began to dramatically worsen as the full social and financial impact of the coronavirus pandemic became evident. Quarantine orders mounted across the country and around the world, economic activity ground to a halt, and job losses grew by the millions. US GDP shrank by an annualized 5.0% in the first quarter of 2020 and then by an annualized 31.7% in the second quarter, the worst quarterly economic contraction in US history.

Both the US Federal Reserve and the federal government took aggressive action to attempt to ease this economic damage. In early March, the Fed cut the federal funds rate, its benchmark short-term interest rate, by 0.50 percentage points. Two weeks later, it cut the federal funds rate by another full percentage point, bringing it to essentially zero, where it stood throughout the

remainder of the fiscal year. Further, in late March, the federal government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic stimulus bill focused on providing support to individuals and businesses hurt by the economic fallout.

After the United States lost 20.5 million jobs in April 2020, the US unemployment rate soared to 14.7%, the highest level seen since the Great Depression. As economies around the country gradually reopened, however, the national economic picture slowly improved. By August, the US jobless rate fell to 8.4% – still historically high, though a significant improvement from earlier in the year – as some workers returned to their positions after temporary layoffs.

Sources: US Bureau of Economic Analysis, US Bureau of Labor Statistics, and Bloomberg.

Municipal bond market conditions

Overall, the municipal bond market, as measured by the Bloomberg Barclays Municipal Bond Index, returned 3.24% for the fiscal year ended August 31, 2020.

When describing market conditions, we can divide the fiscal year into three distinct periods. The first covers September 2019 through March 9, 2020, during which municipal bonds enjoyed solid performance amid favorable demand for tax-exempt securities, coupled with relatively

 

 

2

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limited supply. In this environment, longer-duration, lower-rated securities generally outperformed their shorter-maturity, more highly rated counterparts, as many investors accepted greater interest rate risk and credit risk in exchange for higher yields. During this period, the municipal bond market, as measured by the Bloomberg Barclays Municipal Bond Index, gained 3.04%.

Starting on March 10, however, conditions for investors in municipal bonds abruptly shifted. With mounting concern about the coronavirus, market volatility soared, liquidity dried up, and more highly leveraged institutional investors were forced to unload their municipal debt. Investors, eager for safety, bid up prices of more highly rated, shorter-term bonds, while lower-quality, longer-term issues lagged, reflecting their increased credit and duration risk. Between March 10 and April 30, the Bloomberg Barclays Municipal Bond Index declined 4.84%, with most of that loss coming during two especially difficult weeks in March. Lower-investment-grade and below-investment-grade bonds performed poorly during this roughly seven-week stretch, declining 11.85% and 14.00%, respectively.

Finally, between May and the end of the fiscal year on August 31, municipal securities rallied strongly, with the Bloomberg Barclays Municipal Bond Index gaining 5.29%. Better-than-expected national economic data and heightened demand for tax-exempt bonds, especially lower-rated issues that had fallen disproportionately during the market’s earlier downturn, boosted the asset class.

Looking at the full fiscal year, the following tables indicate that bonds with intermediate maturities generally outperformed their shorter- and longer-dated counterparts, while more highly rated issues fared better than lower-rated bonds.

 

Returns by maturity   

1 year

      1.95 % 

3 years

      2.88 % 

5 years

      3.51 % 

10 years

      3.53 % 

22+ years

      3.05 % 
Returns by credit rating   

AAA

      4.03 % 

AA

      3.58 % 

A

      2.75 % 

BBB

      1.33 % 
Source: Bloomberg.   

A consistent management approach

For all three Funds highlighted in this report, we maintained the same management strategy we employ in all market conditions. We follow a bottom-up (bond by bond) investment approach, which means we select bonds on an issuer-by-issuer basis, based on our team’s thorough credit research. We regularly seek bonds that offer the Funds’ shareholders what we view as an attractive trade-off between reward potential and risk.

Following this approach, we generally maintain less exposure to highly rated, lower-yielding bonds and more exposure to bonds with lower-investment-grade or below-investment-grade credit ratings. We believe that by focusing on higher yielding securities that have solid underlying credit quality, we have more opportunity to add value for the Funds’ shareholders.

As of fiscal year end on August 31, 2020, roughly 48.5% of the net assets of Delaware Tax-Free

 

 

3

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Portfolio management review

Delaware Funds® by Macquarie national tax-free funds

 

USA Fund were invested in bonds with lower-investment-grade credit ratings (A and BBB), and approximately 42.4% of the net assets of Delaware Tax-Free USA Intermediate Fund were invested in these same credit tiers. Both Funds also maintained allocations to high yield municipal bonds, those with credit ratings below BBB-. Both Funds may hold up to 20% of their net assets in high yield debt, although these allocations remained below that threshold throughout the fiscal year. When investing in the high yield market segment, we thoroughly analyze the securities’ credit risk and emphasize those bonds that we believe offer a favorable risk-reward balance.

Consistent with its mandate, Delaware National High-Yield Municipal Bond Fund maintained the largest exposure to high yield bonds of the three Funds. As of August 31, 2020, more than 61.7% of the Fund’s portfolio was held in bonds with credit ratings below BBB-, including nonrated bonds.

Tactical investment opportunities

For the first part of the fiscal year – roughly the period between September 2019 and the pandemic-fueled market selloff in March 2020 – we tended to limit our selling activity in the Funds’ portfolios. This approach reflected our assessment that the Funds were well positioned with many older bonds that had been issued in times of higher interest rates. This meant they offered a level of income that would be difficult to replace through the purchase of newer bonds.

Market conditions shifted dramatically, however, with the arrival of the coronavirus. In March, demand for municipal bonds suddenly weakened, and an environment of mutual fund inflows across the market turned into one of rapid outflows. We quickly determined this outflow trend was likely to worsen. As a result, we decided to raise cash in these Funds by selling bonds in an orderly way.

Our goal was to preserve each Fund’s positioning as best we could, to be able to satisfy shareholder redemptions while avoiding having to sell securities at temporarily depressed prices. We believe these proactive sales worked to shareholders’ benefit, as the Funds had enough cash on hand to meet the redemption requests we received.

Beginning in April, municipal market conditions began to improve, reflecting aggressive economic stimulus and investors’ optimism about state economies around the country beginning to reopen. In this environment, we saw opportunities to purchase bonds priced significantly lower than what we believed was justified given these securities’ underlying credit quality. Many of these new purchases took place in the healthcare and charter school sectors, which had been more economically vulnerable amid the spread of the coronavirus and where we believed the opportunity for price recovery appeared to be the greatest.

We also employed a tax-loss swapping strategy to varying degrees in all three Funds. This approach entailed selling existing holdings at a loss (which can be applied against future capital gains) and using the sale proceeds to buy bonds with similar risk characteristics but higher yields.

Notable performance factors

For the fiscal year, longer-duration bonds – those with more sensitivity to interest rates – outperformed bonds with shorter durations. At the same time, bonds with higher credit ratings outperformed lower-quality bonds, which suffered disproportionately during the market’s March downturn. Many of the Funds’ strongest and weakest performers during the fiscal year reflected these performance trends.

For the 12-month period, tobacco-securitization bonds were among the strongest performers overall in the municipal bond marketplace and

 

 

4

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also for the three Funds. These securities have benefited as tobacco consumption trends have weakened more slowly than expected. In addition, because many tobacco issuers have refinanced their outstanding debt, older, higher yielding bonds have benefited from their scarcity. Delaware Tax-Free USA Fund, Delaware National High-Yield Municipal Bond Fund, and Delaware Tax-Free USA Intermediate Fund each held zero-coupon Virginia and California tobacco bonds. In addition to benefiting from the factors lifting the overall tobacco sector, these securities were further helped by their high durations (indicating interest rate sensitivity), which lifted performance as rates declined.

Puerto Rico sales-tax bonds, known as COFINA bonds, were also notably strong performers for Delaware Tax-Free USA Fund and Delaware Tax-Free USA Intermediate Fund, returning more than 7% for the Funds’ fiscal year. COFINA bonds benefited from strong investor demand due to the securities’ fully tax-exempt status (bonds of US territories are generally tax-exempt for residents in all 50 states), as well as Puerto Rico’s better-than-expected fiscal position.

Bonds of Idaho’s Nampa Development Corp., an urban renewal agency, contributed to the performance of Delaware National High-Yield Municipal Bond Fund. These A-rated bonds were refunded during the fiscal year, resulting in a more than 16% gain for the Fund.

Turning to individual detractors, Delaware Tax-Free USA Fund and Delaware Tax-Free USA Intermediate Fund saw negative results from an investment in bonds for the American Dream retail

and entertainment project. Bonds for this massive development in the Meadowlands, N.J., lost more than 20% for the Funds, reflecting the need to delay the facility’s scheduled opening due to the coronavirus pandemic. Despite these difficulties and the challenging business environment for retailers, we note that most of this development consists of entertainment facilities that we expect to recover as concern about the pandemic eases.

Among the market’s weakest performers were bonds of healthcare issuers, especially those of senior living operators, which struggled amid concern about how the coronavirus would affect their finances. Notable weak performers in this market area included Minnesota Senior Living bonds for Apple Valley. These bonds, paying a 5% coupon and maturing in 2047, fell close to 30% for Delaware Tax-Free USA Fund and Delaware National High-Yield Municipal Bond Fund.

Meanwhile, Delaware Tax-Free USA Intermediate Fund saw difficult performance from nonrated debt of Tuscan Gardens of Venetia Bay, a Florida senior living project whose bonds declined nearly 25%.

In Delaware National High-Yield Municipal Bond Fund, the largest decline came from California State Pollution Control Financing Authority bonds for a plant that develops medium-density fiberboard. Due to the need for additional working capital to make the plant, the issuer took on more debt, resulting in a 40% loss for the bonds during the Funds’ fiscal year. Based on our credit research, we remain confident in the long-term financial viability of this facility.

 

 

5

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Performance summaries

 

Delaware Tax-Free USA Fund    August 31, 2020 (Unaudited)

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.

 

Fund and benchmark performance1,2        Average annual total returns through August 31, 2020      
      1 year          5 year          10 year          Lifetime      

Class A (Est. January 11, 1984)

            

Excluding sales charge

      +3.44%        +4.08%        +4.31%        +6.38%  

Including sales charge

      -1.19%        +3.12%        +3.83%        +6.25%  

Class C (Est. November 28, 1995)

            

Excluding sales charge

      +2.66%        +3.30%        +3.53%        +3.80%  

Including sales charge

      +1.66%        +3.30%        +3.53%        +3.80%  

Institutional Class (Est. December 30, 2008)

            

Excluding sales charge

      +3.70%        +4.35%        +4.56%        +6.01%  

Including sales charge

      +3.70%        +4.35%        +4.56%        +6.01%  

Bloomberg Barclays Municipal Bond Index

      +3.24%        +3.99%        +3.98%        +5.09%*  

*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.

 

1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the "Fund and benchmark performance" table. Expenses for each class are listed on the "Fund expense ratios" table on page 8. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual

12b-1 fee of 0.25% of average daily net assets. The Fund’s Class A shares are currently subject to a blended 12b-1 fee equal to the sum of: (i) 0.10% of average daily net assets representing shares acquired prior to June 1, 1992, and (ii) 0.25% of average daily net assets representing shares acquired on or after June 1, 1992. All Class A shares currently bear 12b-1 fees at the same rate, the blended rate, currently 0.25% of average daily net assets, based on the formula described above. This method of calculating Class A 12b-1 fees may be discontinued at the sole discretion of the Board. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales

 

 

6

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charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.

 

 

7

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Performance summaries

Delaware Tax-Free USA Fund

 

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale and dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding 0.56% of the Fund’s average daily net assets during the period from September 1, 2019 to August 31, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.

 

Fund expense ratios    Class A    Class C    Institutional Class

Total annual operating expenses
(without fee waivers)

    0.95%    1.70%    0.70%

Net expenses
(including fee waivers, if any)

    0.81%    1.56%    0.56%

Type of waiver

    Contractual    Contractual    Contractual

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

 

8

Table of Contents

    

    

 

Performance of a $10,000 investment1

Average annual total returns from August 31, 2010 through August 31, 2020

 

LOGO

For period beginning August 31, 2010 through August 31, 2020    Starting value        Ending value  

 

LOGO

 

Delaware Tax-Free USA Fund — Institutional Class shares

      $10,000               $15,622      

 

LOGO

 

Bloomberg Barclays Municipal Bond Index

      $10,000               $14,768      

 

LOGO

  Delaware Tax-Free USA Fund — Class A shares      $9,550               $14,563      

 

1The “Performance of a $10,000 investment” graph assumes $10,000 invested in Institutional Class and Class A shares of the Fund on August 31, 2010, and includes the effect of a 4.50% front-end sales charge (for Class A shares) and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 8. Please note additional details on pages 6 through 10.

The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of August 31, 2010. The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

 

 

9

Table of Contents

Performance summaries

Delaware Tax-Free USA Fund

 

      Nasdaq symbols    CUSIPs

Class A

    DMTFX    245909106

Class C

    DUSCX    245909700

Institutional Class

 

    DTFIX

 

    24610H104

 

 

10

Table of Contents

Performance summaries

Delaware Tax-Free USA Intermediate Fund

    August 31, 2020 (Unaudited)

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.

 

Fund and benchmark performance1,2      Average annual total returns through August 31, 2020      
        1 year        5 year        10 year        Lifetime        

Class A (Est. January 7, 1993)

              

Excluding sales charge

        +2.76%        +3.40%        +3.13%        +4.64%      

Including sales charge

        -0.09%        +2.82%        +2.85%        +4.54%      

Class C (Est. November 28, 1995)

              

Excluding sales charge

        +1.89%        +2.52%        +2.25%        +3.49%      

Including sales charge

        +0.89%        +2.52%        +2.25%        +3.49%      

Institutional Class (Est. December 30, 2008)

              

Excluding sales charge

        +2.92%        +3.55%        +3.29%        +4.45%      

Including sales charge

        +2.92%        +3.55%        +3.29%        +4.45%      

Bloomberg Barclays 3–15 Year Blend Municipal Bond Index

        +3.39 %       +3.69 %       +3.61 %       +4.47%*      

*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.

 

1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 13. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 2.75%, and have an annual 12b-1 fee of 0.25% of average daily net assets. This fee was contractually limited to 0.15% of average daily net assets from September 1, 2019 through August 31, 2020.* Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic

 

 

11

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Performance summaries

Delaware Tax-Free USA Intermediate Fund

 

conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local taxes and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have

adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.

 

 

12

Table of Contents

    

    

 

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale and dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding 0.50% of the Fund’s average daily net assets during the period from September 1, 2019 to August 31, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.

 

Fund expense ratios    Class A     Class C           Institutional Class        

Total annual operating expenses

    (without fee waivers)

      0.91%       1.66%       0.66%  

Net expenses

    (including fee waivers, if any)

      0.65%       1.50%       0.50%  

Type of waiver

            Contractual                   Contractual                 Contractual        

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

 

13

Table of Contents

Performance summaries

Delaware Tax-Free USA Intermediate Fund

 

Performance of a $10,000 investment1

Average annual total returns from August 31, 2010 through August 31, 2020

 

LOGO

 

For period beginning August 31, 2010 through August 31, 2020    Starting value        Ending value  

 

LOGO

  Bloomberg Barclays 3–15 Year Blend Municipal Bond Index      $10,000               $14,251      

 

LOGO

  Delaware Tax-Free USA Intermediate Fund — Institutional Class shares      $10,000               $13,819      

 

LOGO

  Delaware Tax-Free USA Intermediate Fund — Class A shares      $9,725               $13,243      

 

1The “Performance of a $10,000 investment” graph assumes $10,000 invested in Institutional Class and Class A shares of the Fund on August 31, 2010, and includes the effect of a 2.75% front-end sales charge (for Class A shares) and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 13. Please note additional details on pages 11 through 15.

The graph also assumes $10,000 invested in the Bloomberg Barclays 3–15 Year Blend Municipal Bond Index as of August 31, 2010. The Bloomberg Barclays 3–15 Year Blend Municipal Bond Index measures the total return performance of investment grade, US tax-exempt bonds with maturities from 2 to 17 years.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

 

 

14

Table of Contents

    

    

 

      Nasdaq symbols    CUSIPs

Class A

    DMUSX    245909304

Class C

    DUICX    245909882

Institutional Class

 

    DUSIX

 

    24610H203

 

 

15

Table of Contents

Performance summaries

Delaware National High-Yield Municipal Bond Fund

    August 31, 2020 (Unaudited)

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.

 

Fund and benchmark performance1,2      Average annual total returns through August 31, 2020  
        1 year          5 year          10 year          Lifetime    

Class A (Est. September 22, 1986)

                    

Excluding sales charge

        +1.06%          +4.86%          +5.36%          +6.14%    

Including sales charge

        -3.48%          +3.89%          +4.87%          +6.00%    

Class C (Est. May 26, 1997)

                    

Excluding sales charge

        +0.41%          +4.07%          +4.58%          +4.52%    

Including sales charge

        -0.57%          +4.07%          +4.58%          +4.52%      

Institutional Class (Est. December 31, 2008)

                    

Excluding sales charge

        +1.44%          +5.13%          +5.62%          +8.37%    

Including sales charge

        +1.44%          +5.13%          +5.62%          +8.37%    

Bloomberg Barclays Municipal Bond Index

        +3.24%          +3.99%          +3.98%          +5.09%*    

*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.

 

1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 18. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual

12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the

 

 

16

Table of Contents

    

    

 

time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local taxes and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment

of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.

 

 

17

Table of Contents

Performance summaries

Delaware National High-Yield Municipal Bond Fund

 

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale and dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding 0.60% of the Fund’s average daily net assets during the period from September 1, 2019 to August 31, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.

 

Fund expense ratios    Class A   Class C         Institutional Class      

Total annual operating expenses

    (without fee waivers)

    0.90%   1.65%   0.65%

Net expenses

    (including fee waivers, if any)

    0.85%   1.60%   0.60%

Type of waiver

          Contractual               Contractual             Contractual    

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

 

18

Table of Contents

    

    

 

Performance of a $10,000 investment1

Average annual total returns from August 31, 2010 through August 31, 2020

 

LOGO

 

 

For period beginning August 31, 2010 through August 31, 2020

 

    Starting value    Ending value

LOGO Delaware National High-Yield Municipal Bond Fund — Institutional Class shares

        $10,000        $17,284

LOGO Delaware National High-Yield Municipal Bond Fund — Class A shares

        $9,550        $16,096

LOGO Bloomberg Barclays Municipal Bond Index

        $10,000        $14,768

 

1The “Performance of a $10,000 investment” graph assumes $10,000 invested in Institutional Class and Class A shares of the Fund on August 31, 2010, and includes the effect of a 4.50% front-end sales charge (for Class A shares) and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 18. Please note additional details on pages 16 through 20.

The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of August 31, 2010. The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

 

 

19

Table of Contents

Performance summaries

Delaware National High-Yield Municipal Bond Fund

 

      Nasdaq symbols    CUSIPs

Class A

    CXHYX    928928241

Class C

    DVHCX    928928225

Institutional Class

    DVHIX      24610H302

 

20

Table of Contents

Disclosure of Fund expenses

For the six-month period from March 1, 2020 to August 31, 2020 (Unaudited)

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other Fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period from March 1, 2020 to August 31, 2020.

Actual expenses

The first section of the tables shown, “Actual Fund return,” provides information about actual account values and actual expenses. You may use the information in this section of the table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes

The second section of the tables shown, “Hypothetical 5% return,” provides information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The Funds’ expenses shown in the tables reflect fee waivers in effect and assume reinvestment of all dividends and distributions.

 

21

Table of Contents

Disclosure of Fund expenses

For the six-month period from March 1, 2020 to August 31, 2020 (Unaudited)

 

Delaware Tax-Free USA Fund

Expense analysis of an investment of $1,000

 

     

Beginning
  Account Value  

3/1/20

   

Ending
  Account Value  

8/31/20

    Annualized
  Expense Ratio  		  

Expenses
  Paid During Period  

3/1/20 to 8/31/20*

Actual Fund return†

                  

Class A

        $1,000.00        $987.80        0.81 %       $4.05

Class C

        1,000.00        984.10        1.56 %       7.78

Institutional Class

        1,000.00        989.30        0.56 %       2.80

Hypothetical 5% return (5% return before expenses)

 

         

Class A

        $1,000.00        $1,021.06        0.81 %       $4.12

Class C

        1,000.00        1,017.29        1.56 %       7.91

Institutional Class

        1,000.00        1,022.32        0.56 %       2.85
Delaware Tax-Free USA Intermediate Fund

 

Expense analysis of an investment of $1,000

 

     

Beginning
  Account Value  

3/1/20

      Ending
Account Value
8/31/20		   

Annualized

  Expense Ratio  

  

Expenses

  Paid During Period  

3/1/20 to 8/31/20*

Actual Fund return†

                  

Class A

        $1,000.00        $992.80        0.65 %       $3.26

Class C

        1,000.00        987.80        1.50 %       7.49

Institutional Class

        1,000.00        993.80        0.50 %       2.51

Hypothetical 5% return (5% return before expenses)

 

Class A

        $1,000.00        $1,021.87        0.65 %       $3.30

Class C

        1,000.00        1,017.60        1.50 %       7.61

Institutional Class

        1,000.00        1,022.62        0.50 %       2.54

 

22

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Delaware National High-Yield Municipal Bond Fund

Expense analysis of an investment of $1,000

 

      Beginning
  Account Value  
3/1/20		    Ending
  Account Value  
8/31/20		    Annualized
  Expense Ratio  		   Expenses
  Paid During Period  
3/1/20 to 8/31/20*

Actual Fund return†

                  

Class A

        $1,000.00        $957.00        0.85 %       $4.18

Class C

        1,000.00        953.60        1.60 %       7.86

Institutional Class

        1,000.00        958.80        0.60 %       2.95

Hypothetical 5% return (5% return before expenses)

 

         

Class A

        $1,000.00        $1,020.86        0.85 %       $4.32

Class C

        1,000.00        1,017.09        1.60 %       8.11

Institutional Class

        1,000.00        1,022.12        0.60 %       3.05

 

*

“Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).

 

† 

Because actual returns reflect only the most recent six-month period, the returns shown may differ significantly from fiscal year returns.

 

23

Table of Contents
Security type / sector / state / territory allocations
Delaware Tax-Free USA Fund    As of August 31, 2020 (Unaudited)

Sector designations may be different than the sector designations presented in other Fund materials.

 

Security type / sector      Percentage of net assets      

Municipal Bonds*

    98.22%    

Corporate Revenue Bonds

      16.96%    

Education Revenue Bonds

        7.14%    

Electric Revenue Bonds

        3.60%    

Healthcare Revenue Bonds

      13.53%    

Lease Revenue Bonds

        1.89%    

Local General Obligation Bonds

        6.55%    

Pre-Refunded/Escrowed to Maturity Bonds

        5.20%    

Special Tax Revenue Bonds

      14.94%    

State General Obligation Bonds

      12.94%    

Transportation Revenue Bonds

      15.08%    

Water & Sewer Revenue Bond

        0.39%    

Short-Term Investments

        0.86%    

Total Value of Securities

      99.08%    

Receivables and Other Assets Net of Liabilities

        0.92%    

Total Net Assets

    100.00%    

*As of the date of this report, Delaware Tax-Free USA Fund held bonds issued by or on behalf of territories and the states of the US as follows:

 

State / territory      Percentage of net assets      

Alabama

      2.56%    

Arizona

      3.91%    

California

      9.70%    

Colorado

      4.05%    

Connecticut

      1.41%    

District of Columbia

      1.07%    

Florida

      2.71%    

Georgia

      0.83%    

Guam

      0.39%    

Hawaii

      0.68%    

Illinois

      9.21%    

Indiana

      1.11%    

Kansas

      0.47%    

Louisiana

      1.18%    

Maryland

      2.00%    

Massachusetts

      0.48%    

Minnesota

      1.03%    

Mississippi

      0.81%    

Missouri

      0.32%    

 

24

Table of Contents

    

    

 

State / territory      Percentage of net assets      

Nebraska

      1.05%    

New Jersey

      3.42%    

New York

    12.35%    

North Carolina

      2.06%    

Ohio

      3.08%    

Oklahoma

      2.33%    

Oregon

      0.06%    

Pennsylvania

      3.75%    

Puerto Rico

    11.98%    

Texas

    11.16%    

Utah

      0.90%    

Virginia

      2.53%    

Washington

      0.19%    

Wisconsin

      0.30%    

Total Value of Securities

    99.08%    

 

25

Table of Contents

Security type / sector / state / territory allocations

Delaware Tax-Free USA Intermediate Fund    As of August 31, 2020 (Unaudited)

 

Sector designations may be different than the sector designations presented in other Fund materials.

 

Security type / sector      Percentage of net assets      

Municipal Bonds*

      96.82%    

Corporate Revenue Bonds

      13.55%    

Education Revenue Bonds

        5.05%    

Electric Revenue Bonds

        4.35%    

Healthcare Revenue Bonds

        9.78%    

Lease Revenue Bonds

        4.65%    

Local General Obligation Bonds

        6.59%    

Pre-Refunded/Escrowed to Maturity Bonds

        7.19%    

Special Tax Revenue Bonds

      14.27%    

State General Obligation Bonds

      14.93%    

Transportation Revenue Bonds

      14.91%    

Water & Sewer Revenue Bonds

      1.55%    

Short-Term Investments

        2.32%    

Total Value of Securities

      99.14%    

Receivables and Other Assets Net of Liabilities

        0.86%    

Total Net Assets

    100.00%    

*As of the date of this report, Delaware Tax-Free USA Intermediate Fund held bonds issued by or on behalf of territories and the states of the US as follows:

 

State / territory      Percentage of net assets      

Alabama

      1.47%    

Arizona

      8.57%    

California

    14.05%    

Colorado

      1.74%    

Connecticut

      1.38%    

Delaware

      0.05%    

District of Columbia

      0.30%    

Florida

      2.10%    

Georgia

      1.79%    

Hawaii

      0.63%    

Idaho

      0.45%    

Illinois

      8.17%    

Iowa

      0.09%    

Kansas

      0.23%    

Kentucky

      0.99%    

Louisiana

      3.55%    

Maryland

      0.89%    

Massachusetts

      2.43%    

Michigan

      0.78%    

 

26

Table of Contents

    

    

 

State / territory      Percentage of net assets      

Minnesota

      0.54%    

Mississippi

      2.23%    

Missouri

      0.25%    

Montana

      0.08%    

New Jersey

      4.07%    

New York

    16.23%    

North Carolina

      0.72%    

Ohio

      0.96%    

Oklahoma

      0.37%    

Oregon

      1.55%    

Pennsylvania

      5.33%    

Puerto Rico

      2.80%    

South Carolina

      0.24%    

Tennessee

      0.74%    

Texas

      8.61%    

Utah

      0.45%    

Virginia

      2.42%    

Washington

      1.24%    

Wisconsin

      0.65%    

Total Value of Securities

      99.14%      

 

27

Table of Contents

Security type / sector / state / territory allocations

Delaware National High-Yield Municipal Bond Fund    As of August 31, 2020 (Unaudited)

 

Sector designations may be different than the sector designations presented in other Fund materials.

 

Security type / sector      Percentage of net assets      

Municipal Bonds*

      97.46%    

Corporate Revenue Bonds

      19.39%    

Education Revenue Bonds

      18.50%    

Electric Revenue Bonds

        2.96%    

Healthcare Revenue Bonds

      25.41%    

Housing Revenue Bond

        0.06%    

Lease Revenue Bonds

        3.63%    

Local General Obligation Bonds

        1.65%    

Pre-Refunded/Escrowed to Maturity Bonds

        3.11%    

Resource Recovery Revenue Bonds

        0.75%    

Special Tax Revenue Bonds

        9.08%    

State General Obligation Bonds

        7.84%    

Transportation Revenue Bonds

        2.18%    

Water & Sewer Revenue Bonds

        2.90%    

Short-Term Investments

      1.44%    

Total Value of Securities

    98.90%    

Receivables and Other Assets Net of Liabilities

      1.10%    

Total Net Assets

    100.00%    

*As of the date of this report, Delaware National High-Yield Municipal Bond Fund held bonds issued by or on behalf of territories and the states of the US as follows:

 

State / territory      Percentage of net assets      

Alabama

      3.51%    

Arizona

      6.90%    

Arkansas

      0.38%    

California

    12.00%    

Colorado

      1.88%    

Delaware

      0.08%    

District of Columbia

      0.30%    

Florida

      4.17%    

Georgia

      0.51%    

Hawaii

      0.23%    

Idaho

      0.62%    

Illinois

      7.06%    

Indiana

      1.63%    

Iowa

      0.63%    

Kansas

      0.31%    

Kentucky

      0.62%    

Louisiana

      1.47%    

 

28

Table of Contents

    

    

 

State / territory    Percentage of net assets

Maine

      0.13%  

Maryland

      0.56%  

Massachusetts

      0.48%  

Michigan

      0.75%  

Minnesota

      1.59%  

Mississippi

      0.61%  

Missouri

      1.75%  

Montana

      0.10%  

Nevada

      0.69%  

New Hampshire

      0.44%  

New Jersey

      3.62%  

New York

      4.36%  

North Carolina

      2.58%  

Ohio

      4.98%  

Oklahoma

      0.15%  

Oregon

      0.47%  

Pennsylvania

      5.47%  

Puerto Rico

      10.62%  

South Carolina

      0.40%  

Tennessee

      0.59%  

Texas

      7.70%  

Utah

      0.34%  

Virginia

      3.93%  

Washington

      1.31%  

West Virginia

      0.19%  

Wisconsin

      2.71%  

Wyoming

      0.08%  

Total Value of Securities

      98.90%          

 

29

Table of Contents
Schedules of investments   
Delaware Tax-Free USA Fund    August 31, 2020

 

    Principal amount°                 Value (US $)  

Municipal Bonds — 98.22%

                

Corporate Revenue Bonds — 16.96%

    

Buckeye, Ohio Tobacco Settlement Financing Authority

    

(Asset-Backed Senior)

    

Series B-2 5.00% 6/1/55

     2,815,000     $ 3,096,500  

(Senior)

    

Series A-2 3.00% 6/1/48

     4,000,000       3,962,640  

Series A-2 4.00% 6/1/48

     5,550,000       6,139,466  

Central Plains, Nebraska Energy Project

    

(Project No. 3)

    

Series A 5.00% 9/1/31

     2,810,000       3,659,491  

Series A 5.00% 9/1/35

     2,160,000       2,920,104  

Erie, New York Tobacco Asset Securitization

    

(Capital Appreciation-Asset-Backed)

    

Series A 1.536% 6/1/60 ^

     57,695,000       2,622,238  

Florida Development Finance Surface Transportation Facilities Revenue

    

(Virgin Trains USA Passenger Rail Project)

    

Series A 144A 6.50% 1/1/49 (AMT)#, •

     3,245,000       2,812,506  

Golden State, California Tobacco Securitization Corporate Settlement Revenue

    

(Capital Appreciation-Asset-Backed)

    

Series B 1.473% 6/1/47 ^

     10,210,000       2,155,637  

Hoover, Alabama Industrial Development Board

    

(United States Steel Corporation Project)

    

5.75% 10/1/49 (AMT)

     5,000,000       4,357,850  

Indiana Finance Authority Exempt Facility Revenue

    

(Polyflow Indiana Project - Green Bond)

    

144A 7.00% 3/1/39 (AMT)#

     3,030,000       2,859,563  

Inland, California Empire Tobacco Securitization

    

(Capital Appreciation-Turbo-Asset-Backed)

    

Series E 144A 0.967% 6/1/57 #, ^

     105,485,000       5,782,688  

Series F 144A 1.453% 6/1/57 #, ^

     48,985,000       1,991,730  

Lower Alabama Gas District

    

Series A 5.00% 9/1/34

     4,400,000       5,903,392  

Series A 5.00% 9/1/46

     2,500,000       3,528,875  

M-S-R Energy Authority, California Gas Revenue

    

Series A 6.125% 11/1/29

     1,890,000       2,408,068  

Series B 6.50% 11/1/39

     5,000,000       7,965,650  

Series C 6.50% 11/1/39

     1,500,000       2,389,695  

New Jersey Economic Development Authority Revenue

    

(Continental Airlines Project)

    

Series B 5.625% 11/15/30 (AMT)

     1,365,000       1,417,443  

 

30

Table of Contents

    

    

 

    Principal amount°                 Value (US $)  

Municipal Bonds (continued)

                

Corporate Revenue Bonds (continued)

    

New York Liberty Development Revenue

    

(Bank of America Tower At One Bryant Park Project)

    

Class 3 2.80% 9/15/69

     7,500,000     $ 7,214,550  

New York Transportation Development Corporation Special Facility Revenue

    

(Delta Air Lines, Inc. - LaGuardia Airport Terminals C&D Redevelopment Project)

    

Series 2018 4.00% 1/1/36 (AMT)

     910,000       920,665  

Public Authority for Colorado Energy Natural Gas Revenue

    

6.50% 11/15/38

     5,000,000       7,972,150  

Salt Verde, Arizona Financial Senior Gas Revenue

    

5.00% 12/1/37

     1,600,000       2,190,608  

Shoals, Indiana

    

(National Gypsum Co. Project)

    

7.25% 11/1/43 (AMT)

     1,940,000       2,049,823  

St. John Baptist Parish, Louisiana

    

(Marathon Oil Corporation Project)

    

Series B-2 2.375% 6/1/37 •

     5,000,000       5,072,250  

Tobacco Securitization Authority of Southern California

    

(Capital Appreciation-2nd Subordinate Lien)

    

Series C 0.558% 6/1/46 ^

     10,570,000       2,008,829  

(Capital Appreciation-3rd Subordinate Lien)

    

Series D 0.307% 6/1/46 ^

     1,740,000       288,666  

Valparaiso, Indiana

    

(Pratt Paper, LLC Project)

    

7.00% 1/1/44 (AMT)

     1,780,000       1,975,319  

Virginia Tobacco Settlement Financing

    

(Capital Appreciation)

    

Series C 2.419% 6/1/47 ^

     31,035,000       6,172,551  

Series D 2.545% 6/1/47 ^

     22,300,000       4,224,512  
   

 

 

  
      106,063,459  
   

 

 

  

Education Revenue Bonds — 7.14%

    

Arizona Industrial Development Authority Revenue

    

(American Charter Schools Foundation Project)

    

144A 6.00% 7/1/47 #

     1,385,000       1,521,229  

Auburn University, Alabama General Fee Revenue

    

Series A 5.00% 6/1/33

     1,720,000       2,186,860  

 

31

Table of Contents

Schedules of investments

Delaware Tax-Free USA Fund

 

    Principal amount°                 Value (US $)  

Municipal Bonds (continued)

                

Education Revenue Bonds (continued)

    

California Educational Facilities Authority Revenue

    

(Loma Linda University)

    

Series A 5.00% 4/1/47

     1,000,000     $ 1,129,740  

(Stanford University)

    

Series V-1 5.00% 5/1/49

     6,325,000       10,308,928  

Capital Trust Agency, Florida

    

(Liza Jackson Preparatory School, Inc. Project)

    

Series A 5.00% 8/1/40

     300,000       350,556  

Series A 5.00% 8/1/55

     800,000       914,216  

(University Bridge, LLC Student Housing Project)

    

Series A 144A 5.25% 12/1/58 #

     1,750,000       1,683,517  

District of Columbia Revenue

    

(KIPP DC Issue)

    

4.00% 7/1/44

     500,000       537,100  

4.00% 7/1/49

     1,375,000       1,470,205  

Illinois Finance Authority Revenue

    

(University of Illinois at Chicago Project)

    

Series A 5.00% 2/15/47

     1,860,000       1,781,062  

Series A 5.00% 2/15/50

     540,000       513,653  

Monroe County Industrial Development Revenue, New York

    

(True North Rochester Preparatory Charter School Project)

    

Series A 144A 5.00% 6/1/40 #

     1,000,000       1,170,900  

Series A 144A 5.00% 6/1/59 #

     1,075,000       1,232,982  

New Jersey Economic Development Authority

    

(Provident Group - Montclair State University)

    

5.00% 6/1/42 (AGM)

     1,250,000       1,449,512  

Pima County, Arizona Industrial Development Authority Education Revenue

    

(American Leadership Academy Project)

    

144A 5.00% 6/15/52 #

     560,000       561,187  

University of Texas System Board of Regents

    

Series B 5.00% 8/15/49

     10,000,000       16,178,300  

Utah Charter School Finance Authority Revenue

    

(Wallace Stegner Academy Project)

    

Series A 144A 5.00% 6/15/49 #

     1,590,000       1,635,935  
   

 

 

  
      44,625,882  
   

 

 

  

Electric Revenue Bonds — 3.60%

    

Electric and Gas Systems Revenue San Antonio, Texas

    

5.25% 2/1/24

     2,500,000       2,921,250  

 

32

Table of Contents

    

    

 

    Principal amount°                 Value (US $)  

Municipal Bonds (continued)

                

Electric Revenue Bonds (continued)

    

Long Island, New York Power Authority Electric System Revenue

    

5.00% 9/1/47

     1,605,000     $ 1,936,609  

Municipal Electric Authority of Georgia

    

(Plant Vogtle Units 3 & 4 Project)

    

Series A 5.00% 1/1/56

     2,600,000       3,137,524  

Puerto Rico Electric Power Authority Revenue

    

Series A 5.05% 7/1/42 ‡

     130,000       89,700  

Series A 6.75% 7/1/36 ‡

     500,000       352,500  

Series AAA 5.25% 7/1/25 ‡

     75,000       51,844  

Series CCC 5.25% 7/1/27 ‡

     2,570,000       1,776,513  

Series TT 5.00% 7/1/32 ‡

     3,165,000       2,183,850  

Series WW 5.00% 7/1/28 ‡

     400,000       276,000  

Series XX 4.75% 7/1/26 ‡

     265,000       181,525  

Series XX 5.25% 7/1/40 ‡

     1,285,000       888,256  

Series XX 5.75% 7/1/36 ‡

     940,000       655,650  

Series ZZ 4.75% 7/1/27 ‡

     210,000       143,850  

Series ZZ 5.25% 7/1/24 ‡

     105,000       72,581  

Salt River, Arizona Project Agricultural Improvement
& Power District Electric Systems Revenue

    

(Salt River Project Electric System)

    

Series A 5.00% 1/1/30

     6,000,000       7,812,120  
   

 

 

  
      22,479,772  
   

 

 

  

Healthcare Revenue Bonds — 13.53%

    

Alachua County, Florida Health Facilities Authority

    

(Oak Hammock University)

    

Series A 8.00% 10/1/42

     1,000,000       1,098,310  

Allegheny County, Pennsylvania Hospital Development Authority Revenue

    

(Allegheny Health Network Obligated Group Issue)

    

Series A 5.00% 4/1/47

     1,800,000       2,132,820  

Apple Valley, Minnesota

    

(Senior Living, LLC Project Fourth Tier)

    

Series D 7.25% 1/1/52

     2,500,000       1,892,875  

(Senior Living, LLC Project Second Tier)

    

Series B 5.00% 1/1/47

     2,500,000       1,659,225  

Arizona Industrial Development Authority Revenue

    

(Great Lakes Senior Living Communities LLC Project)

    

Series A 5.00% 1/1/54

     1,070,000       937,192  

 

33

Table of Contents

Schedules of investments

Delaware Tax-Free USA Fund

 

    Principal amount°                 Value (US $)  

Municipal Bonds (continued)

                

Healthcare Revenue Bonds (continued)

    

Arizona Industrial Development Authority Revenue

    

(Legacy Cares, Inc. Project)

    

Series A 144A 7.75% 7/1/50 #

     5,330,000     $ 5,274,088  

(Phoenix Children’s Hospital)

    

Series A 4.00% 2/1/50

     1,700,000       1,936,436  

(Second Tier - Great Lakes Senior Living Communities LLC Project)

    

Series B 5.00% 1/1/49

     400,000       336,740  

Series B 5.125% 1/1/54

     470,000       396,807  

Brookhaven Development Authority Revenue, Georgia

    

(Children’s Healthcare of Atlanta)

    

Series A 4.00% 7/1/49

     1,810,000       2,045,734  

California Health Facilities Financing Authority Revenue

    

(Kaiser Permanente)

    

Series A-2 5.00% 11/1/47

     2,105,000       3,287,336  

(Sutter Health)

    

Series A 5.00% 11/15/38

     1,000,000       1,220,010  

California Municipal Finance Authority Revenue

    

(Community Medical Centers)

    

Series A 5.00% 2/1/42

     2,550,000       2,950,070  

Colorado Health Facilities Authority Revenue

    

(AdventHealth Obligated Group)

    

Series A 4.00% 11/15/43

     3,000,000       3,432,390  

(American Baptist)

    

8.00% 8/1/43

     2,040,000       2,169,907  

(Cappella of Grand Junction Project)

    

144A 5.00% 12/1/54 #

     2,100,000       2,049,390  

(CommonSpirit Health)

    

Series A-2 4.00% 8/1/49

     3,750,000       4,134,150  

Series A-2 5.00% 8/1/44

     3,000,000       3,617,760  

(Mental Health Center Denver Project)

    

Series A 5.75% 2/1/44

     1,875,000       1,989,113  

Cuyahoga County, Ohio

    

(The Metro Health System)

    

5.25% 2/15/47

     2,235,000       2,569,848  

5.50% 2/15/57

     3,000,000       3,461,670  

Maricopa County, Arizona Industrial Development
Authority Senior Living Facility Revenue Bonds

    

(Christian Care Surprise, Inc. Project)

    

144A 6.00% 1/1/48 #

     1,195,000       1,155,971  

 

34

Table of Contents

    

    

 

    Principal amount°                 Value (US $)  

Municipal Bonds (continued)

                

Healthcare Revenue Bonds (continued)

    

Maryland Health & Higher Educational Facilities Authority Revenue

    

(Adventist Healthcare Obligated)

    

Series A 5.50% 1/1/46

     2,000,000     $ 2,224,520  

Montgomery County, Pennsylvania Industrial Development Authority Revenue

    

(Foulkeways At Gwynedd Project)

    

5.00% 12/1/46

     1,500,000       1,578,615  

Moon, Pennsylvania Industrial Development Authority

    

(Baptist Homes Society Obligation)

    

6.125% 7/1/50

     2,250,000       2,334,780  

New York State Dormitory Authority

    

(Orange Regional Medical Center)

    

144A 5.00% 12/1/34 #

     400,000       465,412  

144A 5.00% 12/1/35 #

     1,200,000       1,391,520  

144A 5.00% 12/1/37 #

     800,000       921,392  

Orange County, New York Funding Corporation Assisted Living Residence Revenue

    

6.50% 1/1/46

     3,000,000       3,006,690  

Oregon Health & Science University Revenue

    

(Capital Appreciation Insured)

    

Series A 10.285% 7/1/21 (NATL)^

     400,000       399,104  

Palm Beach County, Florida Health Facilities Authority

    

(Sinai Residences Boca Raton Project)

    

Series A 7.25% 6/1/34

     120,000       128,156  

Series A 7.50% 6/1/49

     610,000       649,833  

Pennsylvania Economic Development Financing Authority First Mortgage Revenue

    

(Tapestry Moon Senior Housing Project)

    

Series A 144A 6.50% 12/1/38 #

     1,785,000       1,754,852  

Series A 144A 6.75% 12/1/53 #

     3,115,000       3,018,497  

Pennsylvania Higher Educational Facilities Authority Revenue

    

(Thomas Jefferson University)

    

Series A 5.00% 9/1/45

     2,000,000       2,265,120  

(University Of Pennsylvania Health System)

    

4.00% 8/15/49

     5,000,000       5,701,600  

Rochester, Minnesota

    

(The Homestead at Rochester)

    

Series A 6.875% 12/1/48

     2,350,000       2,528,412  

 

35

Table of Contents

Schedules of investments

Delaware Tax-Free USA Fund

 

    Principal amount°                 Value (US $)  

Municipal Bonds (continued)

                

Healthcare Revenue Bonds (continued)

    

Seminole County, Florida Industrial Development Authority Revenue

    

(Legacy Pointe at UCF Project)

    

Series A 5.50% 11/15/49

     2,000,000     $ 1,824,460  

Tarrant County, Texas Cultural Education Facilities Finance Corporation Retirement Facility Revenue

    

(Buckner Senior Living - Ventana Project)

    

6.625% 11/15/37

     1,000,000       1,090,890  

Tempe, Arizona Industrial Development Authority Revenue

    

(Friendship Village)

    

Series A 6.25% 12/1/46

     1,000,000       1,014,230  

(Mirabella At ASU Project)

    

Series A 144A 6.125% 10/1/52 #

     1,290,000       1,326,030  

Washington State Housing Finance Commission

    

(Heron’s Key Senior Living)

    

Series A 144A 7.00% 7/1/45 #

     1,125,000       1,212,401  
   

 

 

  
      84,584,356  
   

 

 

  

Lease Revenue Bonds — 1.89%

    

Metropolitan Pier & Exposition Authority, Illinois

    

(McCormick Place Expansion Project)

    

Series A 4.00% 6/15/50

     1,000,000       1,027,310  

Series A 5.00% 6/15/50

     1,000,000       1,127,190  

Series A 5.00% 6/15/57

     1,620,000       1,781,239  

New Jersey Economic Development Authority

    

(State Government Buildings Project)

    

Series A 5.00% 6/15/47

     2,250,000       2,557,620  

New Jersey Transportation Trust Fund Authority

    

(Transportation Program)

    

Series AA 5.00% 6/15/24

     5,000,000       5,318,800  
   

 

 

  
      11,812,159  
   

 

 

  

Local General Obligation Bonds — 6.55%

    

Chicago, Illinois

    

Series A 5.25% 1/1/29

     2,020,000       2,182,166  

Series A 5.50% 1/1/49

     1,000,000       1,134,880  

Series A 6.00% 1/1/38

     525,000       606,007  

Chicago, Illinois Board of Education

    

5.00% 4/1/42

     1,060,000       1,158,358  

5.00% 4/1/46

     1,085,000       1,178,896  

Honolulu City & County, Hawaii

    

Series C 4.00% 7/1/39

     1,205,000       1,457,243  

Series C 4.00% 7/1/40

     1,345,000       1,614,914  

 

36

Table of Contents

    

    

 

    Principal amount°                 Value (US $)  

Municipal Bonds (continued)

                

Local General Obligation Bonds (continued)

    

Honolulu City & County, Hawaii

    

Series C 4.00% 7/1/41

     1,000,000     $ 1,196,430  

Los Angeles, California Community College District

    

Series C 5.00% 8/1/25

     2,500,000       3,089,750  

Mecklenburg County, North Carolina

    

Series A 5.00% 4/1/25

     2,500,000       3,039,200  

Series A 5.00% 9/1/25

     8,000,000       9,866,720  

New York City, New York

    

Series E-1 5.00% 3/1/44

     5,000,000       6,018,200  

Series F-1 5.00% 4/1/45

     5,355,000       6,445,599  

Subseries D-1 4.00% 12/1/42

     1,700,000       1,936,895  

Subseries D-1 5.00% 10/1/36

     30,000       31,356  
   

 

 

  
      40,956,614  
   

 

 

  

Pre-Refunded/Escrowed to Maturity Bonds — 5.20%

    

Central Texas Regional Mobility Authority Revenue

    

Senior Lien 6.00% 1/1/41-21 §

     1,680,000       1,712,407  

Illinois Railsplitter Tobacco Settlement Authority

    

6.00% 6/1/28-21 §

     6,000,000       6,261,060  

Louisiana Public Facilities Authority Revenue

    

(Ochsner Clinic Foundation Project)

    

6.50% 5/15/37-21 §

     2,190,000       2,286,207  

New York City, New York

    

Subseries D-1 5.00% 10/1/36-21 §

     5,000,000       5,256,100  

Oklahoma State Turnpike Authority Revenue

    

(First Senior)

    

6.00% 1/1/22

     13,535,000       14,564,337  

Southwestern Illinois Development Authority Revenue

    

(Memorial Group)

    

7.125% 11/1/43-23 §

     2,000,000       2,420,320  
   

 

 

  
      32,500,431  
   

 

 

  

Special Tax Revenue Bonds — 14.94%

    

Allentown, Pennsylvania Neighborhood Improvement Zone Development Authority Tax Revenue

    

(City Center Project)

    

144A 5.375% 5/1/42 #

     1,525,000       1,599,542  

Conley Road Transportation Development District, Missouri

    

5.375% 5/1/47

     2,000,000       2,009,240  

GDB Debt Recovery Authority of Puerto Rico

    

7.50% 8/20/40

     5,946,113       4,080,520  

 

37

Table of Contents

Schedules of investments

Delaware Tax-Free USA Fund

 

    Principal amount°                 Value (US $)  

Municipal Bonds (continued)

                

Special Tax Revenue Bonds (continued)

    

Massachusetts School Building Authority

    

Series C 5.00% 8/15/31

     2,500,000     $ 3,027,625  

Mosaic, Virginia District Community Development Authority Revenue

    

Series A 6.875% 3/1/36

     3,980,000       4,041,690  

New Jersey Economic Development Authority Revenue

    

(Cigarette Tax)

    

5.00% 6/15/28

     2,695,000       2,765,043  

New York City, New York Industrial Development Agency

    

(Yankee Stadium)

    

7.00% 3/1/49 (AGC)

     1,000,000       1,005,540  

New York City, New York Transitional Finance Authority

    

(Future Tax Secured Fiscal 2011)

    

Series C 5.25% 11/1/25

     4,430,000       4,467,389  

Series D-1 5.00% 2/1/26

     3,000,000       3,059,040  

(Future Tax Secured Fiscal 2014)

    

Series A-1 5.00% 11/1/42

     10,000,000       11,212,900  

Public Finance Authority, Wisconsin

    

(American Dream @ Meadowlands Project)

    

144A 7.00% 12/1/50 #

     2,155,000       1,873,406  

Puerto Rico Sales Tax Financing Revenue

    

(Restructured)

    

Series A-1 4.55% 7/1/40

     1,456,000       1,550,611  

Series A-1 4.75% 7/1/53

     10,423,000       10,954,990  

Series A-1 5.00% 7/1/58

     9,965,000       10,639,630  

Series A-1 5.303% 7/1/46 ^

     33,250,000       9,538,428  

Series A-2 4.329% 7/1/40

     7,234,000       7,595,772  

Series A-2 4.329% 7/1/40

     2,500,000       2,625,025  

Series A-2 4.784% 7/1/58

     8,000,000       8,426,480  

Wyandotte County, Kansas City, Kansas Unified Government Special Obligation Revenue

    

(Sales Tax - Vacation Village Project Area 1 and 2A)

    

Series 2015A 5.75% 9/1/32

     3,280,000       2,970,499  
   

 

 

  
      93,443,370  
   

 

 

  

State General Obligation Bonds — 12.94%

    

California State

    

(Various Purpose)

    

 5.00% 8/1/27

     2,500,000       3,150,875  

 5.00% 3/1/30

     5,000,000       5,993,500  

 

38

Table of Contents

    

    

 

     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

State General Obligation Bonds (continued)

      

California State

      

  (Various Purpose)

     

5.00% 4/1/32

      1,400,000      $ 1,993,768  

5.00% 10/1/47

      2,145,000        2,586,312  

Commonwealth of Pennsylvania

      

5.00% 9/15/26

      2,500,000        3,139,675  

Commonwealth of Puerto Rico

      

Series A 5.25% 7/1/30 ‡

      3,700,000        2,640,875  

Series A 8.00% 7/1/35 ‡

      4,615,000        2,820,919  

Series B 5.00% 7/1/35 ‡

      800,000        569,000  

(Public Improvement)

      

Series A 5.00% 7/1/24 ‡

      1,180,000        839,275  

Series A 5.00% 7/1/41 ‡

      3,220,000        2,016,525  

Series A 5.125% 7/1/37 ‡

      1,330,000        864,500  

Series A 5.25% 7/1/31 ‡

      785,000        560,294  

Series A 5.25% 7/1/34 ‡

      970,000        692,338  

Series A 5.375% 7/1/33 ‡

      880,000        621,500  

Series A 5.50% 7/1/39 ‡

      1,785,000        1,182,562  

Connecticut State

      

Series B 5.00% 6/15/35

      2,475,000        2,884,167  

Series E 5.00% 9/15/35

      2,500,000        3,130,150  

Series E 5.00% 9/15/37

      2,250,000        2,797,943  

Florida State

      

(Department Of Transportation Right-of-Way Acquisition and Bridge Construction)

      

Series A 4.00% 7/1/33

      2,500,000        3,057,075  

Series A 4.00% 7/1/34

      3,660,000        4,410,812  

Illinois State

      

5.00% 5/1/36

      480,000        506,803  

5.00% 11/1/36

      1,780,000        1,937,922  

5.00% 2/1/39

      830,000        870,106  

5.50% 5/1/39

      5,000,000        5,847,300  

Series A 5.00% 4/1/38

      785,000        816,698  

Series D 5.00% 11/1/27

      3,500,000        3,955,315  

(Rebuild Illinois Program)

      

Series B 4.00% 11/1/39

      8,380,000        8,564,695  

Maryland State

      

Series A 5.00% 3/15/26

      5,000,000        6,275,550  

Series A 5.00% 3/15/28

      3,000,000        3,974,520  

 

39

Table of Contents

Schedules of investments

Delaware Tax-Free USA Fund

 

     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

State General Obligation Bonds (continued)

      

Texas State

      

(Transportation Commission Mobility)

      

Series A 5.00% 10/1/33

      1,755,000      $ 2,228,850  
     

 

 

  
        80,929,824  
     

 

 

  

Transportation Revenue Bonds — 15.08%

      

Chicago, Illinois Midway International Airport

      

Series A 5.00% 1/1/28 (AMT)

      2,025,000        2,254,797  

Chicago, Illinois O’Hare International Airport

      

Series B 5.00% 1/1/33

      2,345,000        2,716,612  

Series D 5.25% 1/1/42

      2,000,000        2,355,000  

Chicago, Illinois Transit Authority Revenue

      

Series A 4.00% 12/1/50

      2,000,000        2,202,300  

Series A 4.00% 12/1/55

      1,750,000        1,918,420  

Series A 5.00% 12/1/45

      2,000,000        2,411,340  

Grand Parkway, Texas Transportation Revenue

      

(Grand Parkway System-First Tier Toll)

      

Series C 4.00% 10/1/49

      5,000,000        5,824,450  

Harris County, Texas Toll Road Authority

      

Senior Lien Series A 5.00% 8/15/27

      3,750,000        4,828,500  

Love Field Airport Modernization, Texas General Airport Revenue Bonds

      

5.00% 11/1/35 (AMT)

      1,000,000        1,157,020  

5.00% 11/1/36 (AMT)

      1,000,000        1,153,620  

Metropolitan Transportation Authority Revenue, New York

      

Series D 5.00% 11/15/33

      1,485,000        1,652,196  

Metropolitan Washington, D.C. Airports Authority Dulles Toll Road Revenue

      

(Dulles Metrorail and Capital Improvement Projects)

      

Series B 4.00% 10/1/49

      4,280,000        4,703,078  

New Jersey Turnpike Authority

      

Series A 5.00% 1/1/28

      5,000,000        5,753,950  

New York Transportation Development Corporation Special Facilities Revenue

      

(LaGuardia Airport Terminal B Redevelopment Project)

      

Series A 5.00% 7/1/46 (AMT)

      3,000,000        3,217,080  

North Texas Tollway Authority Revenue

      

(Second Tier) Series A 5.00% 1/1/34

      5,000,000        5,813,000  

Series A 5.00% 1/1/43

      7,000,000        8,542,730  

 

40

Table of Contents

    

    

 

     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

Transportation Revenue Bonds (continued)

      

Port Authority of New York & New Jersey

      

(Consolidated Bonds)

      

Series 221 4.00% 7/15/45 (AMT)

      1,500,000      $ 1,682,100  

Port Authority of New York & New Jersey Special Project

      

(JFK International Air Terminal)

      

Series 8 6.00% 12/1/42

      4,735,000        4,792,909  

Series 8 6.50% 12/1/28

      5,500,000        5,573,865  

Salt Lake City, Utah Airport Revenue

      

Series B 5.00% 7/1/42

      3,350,000        3,992,396  

South Jersey Port, New Jersey

      

(Subordinated Marine Terminal)

      

Series A 5.00% 1/1/49

      450,000        511,213  

Series B 5.00% 1/1/42 (AMT)

      450,000        494,748  

Series B 5.00% 1/1/48 (AMT)

      1,035,000        1,128,078  

Texas Private Activity Bond Surface Transportation Corporate Senior Lien

      

(LBJ Infrastructure)

      

7.50% 6/30/33

      1,560,000        1,568,642  

(NTE Mobility Partners Segments 3 LLC Segment 3A and 3B Facility)

      

  6.75% 6/30/43 (AMT)

      2,490,000        2,840,219  

  7.00% 12/31/38 (AMT)

      1,830,000        2,103,548  

(NTE Mobility Partners Segments 3 LLC Segment 3C Project)

      

5.00% 6/30/58 (AMT)

      10,000,000        11,744,000  

Virginia Small Business Financing Authority Revenue

      

(Transform 66 P3 Project)

      

5.00% 12/31/56 (AMT)

      1,220,000        1,372,793  
     

 

 

  
        94,308,604  
     

 

 

  

Water & Sewer Revenue Bond — 0.39%

      

Guam Government Waterworks Authority

      

Series A 5.00% 1/1/50

      2,000,000        2,434,520  
     

 

 

  
        2,434,520  
     

 

 

  

Total Municipal Bonds (cost $571,056,612)

         614,138,991  
     

 

 

  

 

41

Table of Contents

Schedules of investments

Delaware Tax-Free USA Fund

 

    

Principal amount° 

                  Value (US $)  

Short-Term Investments — 0.86%

                  

Variable Rate Demand Notes — 0.86%¤

      

Minneapolis & St. Paul, Minnesota Housing & Redevelopment Authority Health Care Revenue

      

(Allina Health System)

      

Series B-2 0.02% 11/15/35 (LOC - JPMorgan Chase Bank N.A.)

      300,000      $ 300,000  

Mississippi Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue

      

(Chevron USA Project)

      

Series B 0.03% 12/1/30

      1,760,000        1,760,000  

Series C 0.03% 12/1/30

      230,000        230,000  

Series F 0.03% 12/1/30

      400,000        400,000  

Series G 0.03% 11/1/35

      2,445,000        2,445,000  

Series K 0.03% 11/1/35

      200,000        200,000  
     

 

 

  

Total Short-Term Investments (cost $5,335,000)

         5,335,000  
     

 

 

  

Total Value of Securities — 99.08%
(cost $576,391,612)

       $ 619,473,991  
     

 

 

  

 

°

Principal amount shown is stated in USD unless noted that the security is denominated in another currency.

 

^

Zero-coupon security. The rate shown is the effective yield at the time of purchase.

 

#

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $43,294,738, which represents 6.92% of the Fund’s net assets. See Note 9 in “Notes to financial statements.”

 

•

Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at August 31, 2020. For securities based on a published reference rate and spread, the reference rate and spread are indicated in their description above. The reference rate descriptions (i.e. LIBOR03M, LIBOR06M, etc.) used in this report are identical for different securities, but the underlying reference rates may differ due to the timing of the reset period. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their description above.

 

‡

Non-income producing security. Security is currently in default.

 

§

Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 9 in “Notes to financial statements.”

 

42

Table of Contents

    

    

 

¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of August 31, 2020.

Summary of abbreviations:

AGC – Insured by Assured Guaranty Corporation

AGM – Insured by Assured Guaranty Municipal Corporation

AMT – Subject to Alternative Minimum Tax

ICE – Intercontinental Exchange, Inc.

KIPP – Knowledge is Power Program

LIBOR – London interbank offered rate

LIBOR03M – ICE LIBOR USD 3 Month

LIBOR06M – ICE LIBOR USD 6 Month

LLC – Limited Liability Corporation

LOC – Letter of Credit

N.A. – National Association

NATL – Insured by National Public Finance Guarantee Corporation

USD – US Dollar

See accompanying notes, which are an integral part of the financial statements.

 

43

Table of Contents
Schedules of investments   
Delaware Tax-Free USA Intermediate Fund    August 31, 2020

 

     Principal amount°                  Value (US $)  

Municipal Bonds — 96.82%

                  

Corporate Revenue Bonds — 13.55%

      

Black Belt Energy Gas District, Alabama

      

(Project No. 4)

      

Series A 4.00% 6/1/25

      1,655,000      $ 1,905,104  

Buckeye, Ohio Tobacco Settlement Financing Authority

      

Series A-2 4.00% 6/1/38

      420,000        489,497  

Series A-2 5.00% 6/1/32

      1,270,000        1,660,919  

Series A-2 5.00% 6/1/33

      850,000        1,102,730  

Series A-2 5.00% 6/1/35

      850,000        1,092,055  

Chandler, Arizona Industrial Development Revenue Bonds

      

(Intel Corporation Project)

      

2.70% 12/1/37 (AMT)•

      3,000,000        3,161,130  

Commonwealth of Pennsylvania Financing Authority

      

(Tobacco Master Settlement Payment)

      

5.00% 6/1/27

      2,000,000        2,522,280  

Denver City & County, Colorado Special Facilities Airport Revenue

      

(United Airlines Project)

      

5.00% 10/1/32 (AMT)

      1,190,000        1,204,232  

Florida Development Finance Corporation Surface Transportation Facility Revenue

      

(Virgin Trains USA Passenger Rail Project)

      

Series A 144A 6.50% 1/1/49 (AMT)#, •

      1,710,000        1,482,091  

Golden State, California Tobacco Securitization Corporate Settlement Revenue

      

(Asset-Backed Bonds)

      

Series A-1 5.00% 6/1/26

      850,000        1,037,824  

Series A-1 5.25% 6/1/47

      750,000        773,558  

(Capital Appreciation-Asset-Backed)

      

Series B 1.548% 6/1/47^

      5,885,000        1,242,500  

Houston, Texas Airport System Revenue

      

(United Airlines)

      

5.00% 7/1/29 (AMT)

      3,010,000        3,119,534  

Kentucky Public Energy Authority

      

(Gas Supply Revenue Bonds)

      

Series C-1 4.00% 12/1/49 •

      5,000,000        5,659,050  

Lower Alabama Gas District

      

Series A 5.00% 9/1/34

      4,850,000        6,507,148  

Michigan Tobacco Settlement Finance Authority

      

Series A 6.00% 6/1/34

      810,000        812,365  

M-S-R Energy Authority, California Gas Revenue

      

Series B 6.50% 11/1/39

      3,485,000        5,552,058  

 

44

Table of Contents

    

    

 

     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

Corporate Revenue Bonds (continued)

      

New Jersey Economic Development Authority Special Facilities Revenue

      

(Continental Airlines Project)

      

Series B 5.625% 11/15/30 (AMT)

      1,890,000      $ 1,962,614  

New Jersey Tobacco Settlement Financing

      

Subordinate Series B 5.00% 6/1/46

      3,105,000        3,519,828  

New York Liberty Development Revenue

      

(Bank of America Tower at One Bryant Park Project)

      

2.80% 9/15/69

      3,850,000        3,703,469  

(Goldman Sachs Headquarters)

      

5.25% 10/1/35

      3,405,000        4,752,052  

Salt Verde, Arizona Financial Corporation Senior Gas Revenue

      

5.00% 12/1/32

      3,850,000        5,074,839  

5.00% 12/1/37

      2,500,000        3,422,825  

5.25% 12/1/24

      3,050,000        3,574,600  

St. James Parish, Louisiana

      

(NuStar Logistics, LP Project)

      

144A 6.10% 6/1/38 #, •

      385,000        455,852  

Series A 144A 6.35% 10/1/40 #

      1,630,000        1,940,922  

Series B 144A 6.10% 12/1/40 #, •

      385,000        455,852  

St. John Baptist Parish, Louisiana

      

(Marathon Oil Corporation Project)

      

Series B-2 2.125% 6/1/37 •

      2,250,000        2,264,445  

TSASC, New York

      

Series A 5.00% 6/1/30

      475,000        573,838  

Series A 5.00% 6/1/31

      475,000        570,831  

Virginia Tobacco Settlement Financing Corporation

      

(Capital Appreciation Asset-Backed)

      

Series C 2.419% 6/1/47 ^

      29,400,000        5,847,366  
     

 

 

  
        77,443,408  
     

 

 

  

Education Revenue Bonds — 5.05%

      

Arizona Industrial Development Authority Revenue

      

(American Charter Schools Foundation Project)

      

144A 6.00% 7/1/37 #

      1,420,000        1,584,592  

Bucks County, Pennsylvania Industrial Development Authority Revenue

      

(School Lane Charter School Project)

      

5.125% 3/15/36

      2,000,000        2,241,980  

California Educational Facilities Authority Revenue

      

(Stanford University)

      

Series V-1 5.00% 5/1/49

      1,000,000        1,629,870  

 

45

Table of Contents

Schedules of investments

Delaware Tax-Free USA Intermediate Fund

 

     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

Education Revenue Bonds (continued)

      

California State University

      

(Systemwide)

      

Series A 5.00% 11/1/31

      2,000,000      $ 2,529,040  

California Statewide Communities Development Authority Revenue

      

(California Baptist University)

      

Series A 6.125% 11/1/33

      2,215,000        2,420,242  

(Green Dot Public Schools - Animo Inglewood Charter High School Project)

      

Series A 7.25% 8/1/41

      500,000        520,660  

Colorado Educational & Cultural Facilities Authority Revenue

      

(Rocky Mountain Classical Academy Project)

      

144A 5.00% 10/1/29 #

      425,000        460,666  

144A 5.00% 10/1/39 #

      425,000        446,156  

144A 5.00% 10/1/49 #

      990,000        1,025,155  

Illinois Finance Authority Revenue

      

(University of Illinois at Chicago)

      

Series A 5.00% 2/15/26

      400,000        416,828  

Series A 5.00% 2/15/29

      400,000        412,540  

Series A 5.00% 2/15/31

      365,000        372,508  

Series A 5.00% 2/15/37

      430,000        429,987  

Kent County, Delaware

      

(Delaware State University Project)

      

Series A 5.00% 7/1/40

      310,000        299,758  

Miami-Dade County, Florida Educational Facilities Authority

      

(University of Miami)

      

Series A 5.00% 4/1/30

      520,000        594,844  

Series A 5.00% 4/1/31

      1,090,000        1,242,589  

New York City, New York Trust for Cultural Resources

      

(Whitney Museum of American Art)

      

5.00% 7/1/21

      3,025,000        3,068,348  

New York State Dormitory Authority Revenue

      

(Touro College & University System)

      

Series A 5.25% 1/1/34

      1,335,000        1,421,828  

Phoenix, Arizona Industrial Development Authority Housing Revenue

      

(Downtown Phoenix Student Housing, LLC-Arizona State University Project)

      

Series A 5.00% 7/1/30

      350,000        386,176  

Series A 5.00% 7/1/32

      235,000        256,594  

 

46

Table of Contents

    

    

 

     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

Education Revenue Bonds (continued)

      

Pima County, Arizona Industrial Development Authority Education Revenue

      

(Facility American Leadership Academy Project)

      

144A 5.00% 6/15/47 #

      745,000      $ 747,213  

144A 5.00% 6/15/52 #

      640,000        641,357  

South Carolina Jobs - Economic Development Authority Educational Facilities Revenue

      

(High Point Academy Project)

      

Series A 144A 5.75% 6/15/39 #

      1,245,000        1,367,135  

University of Texas Permanent University Fund

      

Series B 5.00% 7/1/27

      3,715,000        4,334,699  
     

 

 

  
        28,850,765  
     

 

 

  

Electric Revenue Bonds — 4.35%

      

Long Island, New York Power Authority

      

5.00% 9/1/33

      250,000        311,255  

5.00% 9/1/35

      1,000,000        1,237,130  

Municipal Electric Authority of Georgia

      

(Plant Vogtle Units 3&4 Project)

      

Series A 4.00% 1/1/44 (AGM)

      2,250,000        2,583,360  

Series A 5.00% 1/1/39

      6,250,000        7,652,500  

New York State Utility Debt Securitization Authority

      

(Restructuring Bonds)

      

5.00% 12/15/33

      1,500,000        1,821,855  

Salt River, Arizona Project Agricultural Improvement & Power District Electric Systems Revenue

      

Series A 5.00% 12/1/35

      4,000,000        4,772,080  

(Salt River Project Electric System)

      

5.00% 1/1/30

      5,000,000        6,510,100  
     

 

 

  
        24,888,280  
     

 

 

  

Healthcare Revenue Bonds — 9.78%

      

Apple Valley, Minnesota

      

(Minnesota Senior Living LLC Project)

      

Series B 5.25% 1/1/37

      965,000        739,103  

Arizona Health Facilities Authority

      

(Scottsdale Lincoln Hospital Project)

      

5.00% 12/1/30

      5,000,000        5,705,100  

Arizona Industrial Development Authority Revenue

      

(Legacy Cares, Inc. Project)

      

Series A 144A 7.75% 7/1/50#

      2,920,000        2,889,369  

California Health Facilities Financing Authority

      

(Kaiser Permanente)

      

Series A-1 5.00% 11/1/27

      4,100,000        5,300,398  

 

47

Table of Contents

Schedules of investments

Delaware Tax-Free USA Intermediate Fund

 

     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

Healthcare Revenue Bonds (continued)

      

California Statewide Communities Development Authority

      

(Loma Linda University Medical Center)

      

Series A 144A 5.00% 12/1/33 #

      260,000      $ 286,226  

Series A 144A 5.00% 12/1/41 #

      1,685,000        1,839,767  

Series A 5.25% 12/1/34

      2,790,000        3,050,893  

Capital Trust Agency, Florida

      

(Tuscan Gardens Senior Living Center)

      

Series A 7.00% 4/1/35

      1,630,000        1,144,374  

Colorado Health Facilities Authority Revenue

      

(CommonSpirit Health)

      

Series A 4.00% 8/1/37

      500,000        565,380  

Series A 4.00% 8/1/38

      500,000        563,615  

Cuyahoga County, Ohio

      

(The Metrohealth System)

      

5.00% 2/15/37

      1,000,000        1,138,270  

Iowa Finance Authority Senior Housing Revenue Bonds

      

(PHS Council Bluffs, Inc. Project)

      

5.00% 8/1/33

      500,000        509,345  

Kalispell, Montana

      

(Immanuel Lutheran Corporation Project)

      

Series A 5.25% 5/15/32

      435,000        448,085  

Lancaster County, Pennsylvania Hospital Authority

      

(Brethren Village Project)

      

5.00% 7/1/31

      440,000        466,858  

5.00% 7/1/32

      440,000        463,896  

(University of Pennsylvania Health System Obligation)

      

Series A 5.00% 8/15/33

      2,430,000        2,931,139  

Maricopa County, Arizona Industrial Development Authority Revenue

      

(Banner Health Obligation Group)

      

Series A 5.00% 1/1/32

      3,000,000        3,644,490  

(Christian Care Surprise, Inc. Project)

      

144A 5.75% 1/1/36 #

      1,540,000        1,556,940  

Maryland Health & Higher Educational Facilities Authority Revenue

      

(Adventist Healthcare Obligated)

      

Series A 5.50% 1/1/36

      2,000,000        2,265,800  

Massachusetts Development Finance Agency Revenue

      

Series A-2 4.00% 7/1/40

      1,000,000        1,156,810  

 

48

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Healthcare Revenue Bonds (continued)

      

Massachusetts Development Finance Agency Revenue

      

Series A-2 4.00% 7/1/41

      875,000      $ 1,008,805  

Minneapolis, Minnesota Health Care System Revenue

      

(Fairview Health Services)

      

Series A 5.00% 11/15/35

      1,500,000        1,859,475  

Moon, Pennsylvania Industrial Development Authority

      

(Baptist Homes Society Obligation)

      

5.625% 7/1/30

      2,440,000        2,565,392  

New York State Dormitory Authority Revenue

      

(Orange Regional Medical Center)

      

144A 5.00% 12/1/31 #

      1,000,000        1,178,140  

144A 5.00% 12/1/32 #

      1,100,000        1,288,408  

144A 5.00% 12/1/33 #

      1,000,000        1,167,050  

Oklahoma Development Finance Authority Health System Revenue

      

(OU Medicine Project)

      

Series B 5.25% 8/15/43

      1,790,000        2,099,473  

Prince George’s County, Maryland

      

(Collington Episcopal Life Care Community)

      

5.00% 4/1/31

      2,000,000        2,057,480  

Public Finance Authority, Wisconsin Senior Living Revenue

      

(Mary’s Woods at Marylhurst Project)

      

144A 5.00% 5/15/29 #

      500,000        535,760  

Seminole County, Florida Industrial Development Authority

      

(Legacy Pointe at UCF Project)

      

Series A 5.25% 11/15/39

      2,630,000                2,440,588  

Series B-1 4.25% 11/15/26

      1,000,000        943,020  

Tempe, Arizona Industrial Development Authority

      

(Mirabella at ASU Project)

      

Series A 144A 6.00% 10/1/37 #

      1,200,000        1,249,716  

Wisconsin Health & Educational Facilities Authority Revenue

      

(St. Camillus Health System)

      

Series A 5.00% 11/1/39

      815,000        862,221  
     

 

 

  
        55,921,386  
     

 

 

  

 

49

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Schedules of investments

Delaware Tax-Free USA Intermediate Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Lease Revenue Bonds — 4.65%

      

California Statewide Communities Development Authority Revenue

      

(Lancer Plaza Project)

      

5.125% 11/1/23

      330,000      $ 340,916  

Golden State, California Tobacco Securitization Corporate Settlement Revenue

      

(Asset-Backed Enhanced)

      

Series A 5.00% 6/1/35

      3,000,000        3,525,630  

Idaho Building Authority Revenue

      

(Health & Welfare Project)

      

Series A 5.00% 9/1/24

      2,380,000        2,598,198  

Los Angeles County, California

      

(Disney Concert Hall Parking)

      

5.00% 3/1/23

      2,395,000        2,667,336  

New Jersey State Economic Development Authority

      

(NJ Transit Transportation Project)

      

Series A 4.00% 11/1/38

      1,000,000        1,078,300  

Series A 4.00% 11/1/39

      1,000,000        1,076,780  

New Jersey State Transportation Trust Fund Authority

      

Series B 5.50% 6/15/31

      5,000,000        5,131,800  

(Highway Reimbursement)

      

Series A 5.00% 6/15/30

      2,415,000        2,792,199  

New York Liberty Development Revenue

      

(World Trade Center Project)

      

Class 2 144A 5.15% 11/15/34 #

      1,000,000        1,058,300  

New York State Dormitory Authority Revenue

      

(Health Facilities Improvement Program)

      

Series 1 5.00% 1/15/28

      750,000        947,415  

Series 1 5.00% 1/15/29

      3,100,000        3,889,756  

Public Finance Authority, Wisconsin Airport Facilities Revenue

      

(AFCO Investors II Portfolio)

      

144A 5.00% 10/1/23 (AMT)#

      1,430,000        1,470,483  
     

 

 

  
              26,577,113  
     

 

 

  

Local General Obligation Bonds — 6.59%

      

Chesterfield County, Virginia

      

Series B 5.00% 1/1/22

      4,070,000        4,332,841  

Chicago, Illinois

      

Series A 5.25% 1/1/29

      640,000        691,379  

Series A 5.50% 1/1/35

      1,980,000        2,320,818  

Series C 5.00% 1/1/26

      1,280,000        1,439,232  

 

50

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     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Local General Obligation Bonds (continued)

      

Chicago, Illinois Board of Education

      

  5.00% 4/1/35

      825,000      $ 909,100  

  5.00% 4/1/36

      320,000        352,522  

(Dedicated Revenues)

      

Series C 5.00% 12/1/34

      2,160,000        2,413,411  

Series D 5.00% 12/1/31

      2,160,000        2,442,463  

Fort Worth, Texas Independent School District

      

(School Building)

      

5.00% 2/15/27 (PSF)

      2,000,000        2,329,560  

New York City, New York

      

Series D-1 5.00% 10/1/30

      2,260,000        2,370,695  

Series E 5.00% 8/1/23

      3,685,000        4,168,545  

Subseries D-1 4.00% 12/1/42

      4,300,000        4,899,205  

San Francisco, California Bay Area Rapid Transit District

      

(Election 2004)

      

Series D 5.00% 8/1/31

      4,000,000        4,886,480  

Wake County, North Carolina

      

Series A 5.00% 3/1/27

      3,200,000        4,129,472  
     

 

 

  
              37,685,723  
     

 

 

  

Pre-Refunded/Escrowed to Maturity Bonds — 7.19%

      

California State Department of Water Resources

     

(Water System)

      

Series AS 5.00% 12/1/29-24 §

      15,000        17,952  

Series AS 5.00% 12/1/29-24 §

      2,680,000        3,219,993  

Clifton, Texas Higher Education Finance Corporation Revenue

      

(Uplift Education)

      

Series A 6.00% 12/1/30-20 §

      1,100,000        1,115,620  

New York City, New York

      

Series D-1 5.00% 10/1/30-21 §

      1,740,000        1,829,123  

New York State

      

Series A 5.00% 2/15/28-21 §

      5,000,000        5,110,400  

New York State Dormitory Authority Revenue

      

(North Shore Long Island Jewish Health System)

      

Series A 5.00% 5/1/23-21 §

      4,000,000        4,128,120  

Oregon State

      

Series L 5.00% 5/1/26-21 §

      6,000,000        6,193,440  

 

51

Table of Contents

Schedules of investments

Delaware Tax-Free USA Intermediate Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Pre-Refunded/Escrowed to Maturity Bonds (continued)

      

Pennsylvania Higher Educational Facilities Authority Revenue

      

(Drexel University)

      

Series A 5.25% 5/1/25-21 §

      4,980,000      $ 5,148,822  

(Unrefunded Drexel University)

      

Series A 5.25% 5/1/25-21 §

      310,000        320,401  

Sacramento, California Water Revenue

      

5.00% 9/1/26-23 §

      3,160,000        3,604,865  

San Francisco, California City & County Airports Commission

      

Series D 5.00% 5/1/25-21 §

      570,000        588,491  

Southwestern Illinois Development Authority

      

(Memorial Group)

      

7.125% 11/1/30-23 §

      2,190,000        2,650,250  

Texas State

      

(Transportation Commission Highway Improvement)

      

5.00% 4/1/29-24 §

      3,000,000        3,509,970  

Virginia Commonwealth Transportation Board

      

(Gans-Garvee)

      

5.00% 3/15/24-23 §

      3,250,000        3,644,420  
     

 

 

  
              41,081,867  
     

 

 

  

Special Tax Revenue Bonds — 14.27%

      

Allentown, Pennsylvania Neighborhood Improvement Zone Development
Authority Tax Revenue

      

(City Center Project)

      

144A 5.00% 5/1/28 #

      750,000        833,535  

144A 5.00% 5/1/33 #

      650,000        692,653  

Baltimore, Maryland

      

(Senior Lien-Harbor Point Project)

      

Series A 144A 3.25% 6/1/31 #

      95,000        91,234  

Series A 144A 3.30% 6/1/32 #

      105,000        99,580  

Series A 144A 3.35% 6/1/33 #

      110,000        103,752  

Series A 144A 3.40% 6/1/34 #

      115,000        108,102  

Series A 144A 3.45% 6/1/35 #

      130,000        121,810  

Series A 144A 3.50% 6/1/39 #

      270,000        250,949  

Celebration Pointe, Florida Community Development District

      

  4.75% 5/1/24

      375,000        394,796  

  5.00% 5/1/34

      830,000        862,860  

Connecticut State Transportation Infrastructure

      

Series B 5.00% 10/1/30

      3,375,000        4,335,221  

 

52

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Special Tax Revenue Bonds (continued)

      

Dallas, Texas Convention Center Hotel Development Revenue

      

Series A 5.00% 1/1/24

      3,420,000      $       3,425,301  

Series A 5.25% 1/1/23

      5,375,000        5,384,353  

Denver, Colorado Convention Center Hotel Authority

      

  5.00% 12/1/26

      1,270,000        1,392,733  

  5.00% 12/1/29

      305,000        330,467  

  5.00% 12/1/31

      460,000        496,542  

  5.00% 12/1/32

      920,000        991,475  

  5.00% 12/1/34

      765,000        821,159  

  5.00% 12/1/35

      610,000        653,792  

  5.00% 12/1/36

      460,000        491,607  

Ernest N Morail-New Orleans, Louisiana Exhibition Hall Authority Special Tax Revenue

      

5.00% 7/15/26

      2,330,000        2,497,178  

Harris County-Houston, Texas Sports Authority

     

(Senior Lien)

      

Series A 5.00% 11/15/30

      1,805,000        1,924,256  

Kansas City, Missouri Land Clearance Redevelopment Authority Revenue

      

(Convention Center Hotel Project – TIF Financing)

      

Series B 144A 4.375% 2/1/31 #

      400,000        414,468  

Series B 144A 5.00% 2/1/40 #

      200,000        209,718  

Louisiana State Highway Improvement Revenue

      

Series A 5.00% 6/15/29

      5,195,000        6,011,238  

Massachusetts School Building Authority

      

Series C 5.00% 8/15/29

      1,630,000        1,980,923  

Miami-Dade County, Florida Transit System Revenue

      

Series B 2.60% 7/1/42

      2,500,000        2,459,800  

New Jersey Economic Development Authority Revenue

      

(Cigarette Tax)

      

  5.00% 6/15/22

      1,750,000        1,817,813  

  5.00% 6/15/23

      1,250,000        1,295,375  

New York City, New York Transitional Finance Authority Building Aid Revenue

      

Subordinate Subseries S-3A 5.00% 7/15/28

      4,400,000        5,741,252  

New York City, New York Transitional Finance Authority Future Tax Secured

      

Subseries A-1 5.00% 11/1/23

      2,865,000        3,283,892  

Subseries C 5.00% 11/1/27

      4,150,000        4,814,954  

Subseries E-1 5.00% 2/1/26

      4,020,000        4,283,109  

 

53

Table of Contents

Schedules of investments

Delaware Tax-Free USA Intermediate Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Special Tax Revenue Bonds (continued)

      

New York State Urban Development Revenue

      

(General Purpose)

      

Series C 5.00% 3/15/33

      3,000,000      $ 3,984,840  

Public Finance Authority, Wisconsin

      

(American Dream @ Meadowlands Project)

      

144A 7.00% 12/1/50 #

      1,010,000        878,023  

Puerto Rico Sales Tax Financing Revenue

      

(Restructured)

      

Series A-1 4.55% 7/1/40

      6,015,000        6,405,855  

Series A-1 5.389% 7/1/46 ^

      8,785,000        2,520,153  

Series A-2 4.329% 7/1/40

      1,125,000        1,181,261  

Series A-2 4.329% 7/1/40

      5,636,000        5,917,856  

Richmond Heights, Missouri Tax Increment & Transaction Sales Tax Revenue Refunding & Improvement

      

(Francis Place Redevelopment Project)

      

5.625% 11/1/25

      795,000        795,095  

Wyandotte County, Kansas City, Kansas Unified Government Special Obligation Revenue

      

(Sales Tax - Vacation Village Project Area 1 and 2A)

      

Series 2015A 5.00% 9/1/27

      1,355,000        1,304,675  
     

 

 

  
              81,603,655  
     

 

 

  

State General Obligation Bonds — 14.93%

      

California State

      

(Various Purpose)

      

  5.00% 8/1/26

      3,120,000        3,944,741  

  5.00% 8/1/28

      3,000,000        3,989,730  

  5.00% 9/1/30

      1,715,000        2,151,467  

  5.00% 4/1/32

      1,410,000        2,008,009  

  5.00% 9/1/32

      4,100,000        5,107,944  

  5.25% 9/1/28

      7,750,000        8,128,510  

Series C 5.00% 9/1/30

      5,985,000        7,295,057  

Commonwealth of Massachusetts

      

Series A 5.00% 1/1/35

      7,500,000        9,740,400  

Commonwealth of Pennsylvania

      

  5.00% 9/15/26

      2,500,000        3,139,675  

  5.00% 7/15/28

      3,870,000        5,044,855  

Connecticut State

      

Series F 5.00% 9/15/27

      2,790,000        3,564,839  

Hawaii State

      

Series FW 4.00% 1/1/34

      3,010,000        3,611,699  

 

54

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

State General Obligation Bonds (continued)

      

Illinois State

      

  5.00% 1/1/28

      1,630,000      $ 1,810,995  

  5.00% 3/1/36

      960,000        985,680  

  5.00% 11/1/36

      1,965,000        2,139,335  

  5.25% 2/1/30

      1,295,000        1,393,873  

  5.25% 2/1/32

      435,000        464,972  

  5.25% 2/1/33

      270,000        288,279  

  5.50% 5/1/39

      2,500,000        2,923,650  

Series A 5.125% 12/1/29

      1,770,000              2,023,198  

Series B 4.00% 11/1/34

      2,130,000        2,216,286  

Series B 4.00% 11/1/35

      2,200,000        2,278,958  

Series D 5.00% 11/1/25

      1,220,000        1,351,882  

Oregon State

      

(Article XI-Q State Projects)

      

Series A 5.00% 5/1/28

      2,000,000        2,659,880  

Washington State

      

Series R-2015E 5.00% 7/1/31

      3,000,000        3,583,230  

(Various Purpose)

      

Series 2015-A-1 5.00% 8/1/30

      3,000,000        3,535,140  
     

 

 

  
        85,382,284  
     

 

 

  

Transportation Revenue Bonds — 14.91%

      

Bay Area, California Toll Authority

      

(San Francisco Bay Area)

      

Series S-7 4.00% 4/1/34

      1,000,000        1,159,940  

Chicago, Illinois Midway International Airport

      

Series A 5.00% 1/1/28 (AMT)

      1,905,000        2,121,179  

Chicago, Illinois O’Hare International Airport Revenue

      

Series B 5.00% 1/1/32

      1,000,000        1,160,770  

Series B 5.00% 1/1/33

      1,520,000        1,760,874  

(General-Airport-Senior Lien)

      

Series B 5.00% 1/1/36

      2,500,000        3,078,000  

Series B 5.00% 1/1/37

      3,000,000        3,680,010  

(General-Airport-Third Lien)

      

Series C 5.25% 1/1/28

      2,150,000        2,158,385  

Dallas/Fort Worth International Airport, Texas

      

Series A 4.00% 11/1/34

      2,500,000        2,996,325  

Series A 4.00% 11/1/35

      1,000,000        1,192,590  

Series B 4.00% 11/1/35

      2,500,000        2,981,475  

Hillsborough County, Florida Port District

      

(Tampa Port Authority Project)

      

Series B 5.00% 6/1/28 (AMT)

      375,000        461,134  

 

55

Table of Contents

Schedules of investments

Delaware Tax-Free USA Intermediate Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Transportation Revenue Bonds (continued)

      

Houston, Texas Airports Commission Revenue

      

Series B 5.00% 7/1/25

      1,000,000      $       1,036,390  

Series B 5.00% 7/1/26

      3,000,000        3,106,620  

Memphis-Shelby County, Tennessee Airport Authority Revenue

      

Series D 5.00% 7/1/24

      4,110,000        4,252,905  

Metropolitan Washington D.C. Airports Authority Dulles Toll Road Revenue

      

(Dulles Metrorail and Capital Improvement Project)

      

Series B 4.00% 10/1/37

      1,500,000        1,690,665  

New Jersey State Turnpike Authority Turnpike Revenue

      

Series A 5.00% 1/1/33

      1,770,000        2,120,867  

New Orleans, Louisiana Aviation Board

      

(North Terminal Project)

      

Series B 5.00% 1/1/32 (AGM) (AMT)

      2,900,000        3,321,283  

Series B 5.00% 1/1/33 (AGM) (AMT)

      2,900,000        3,309,509  

New York State Thruway Authority

      

Series J 5.00% 1/1/27

      5,705,000        6,500,163  

New York Transportation Development Special Facilities Revenue

      

(Delta Airlines, Inc.-LaGuardia Airport Terminals C&D Redevelopment Project)

      

5.00% 1/1/34 (AMT)

      3,000,000        3,230,280  

Pennsylvania State Turnpike Commission Revenue

      

Subordinate Series A-1 5.00% 12/1/29

      3,590,000        4,125,951  

Phoenix, Arizona Civic Improvement Corporation Airport Revenue

      

(Junior Lien)

      

Series A 5.00% 7/1/33

      3,355,000        3,889,988  

Port Authority of New York & New Jersey

      

(194th Series)

      

5.00% 10/15/32

      2,500,000        2,966,325  

(JFK International Air Terminal)

      

Series 8 6.50% 12/1/28

      8,300,000        8,411,469  

Salt Lake City, Utah Airport Revenue

      

Series B 5.00% 7/1/31

      500,000        616,060  

Series B 5.00% 7/1/32

      600,000        735,168  

Series B 5.00% 7/1/33

      1,000,000        1,219,830  

San Francisco, California City & County Airport Commission - San Francisco International Airport

      

Series D 5.00% 5/1/25

      1,430,000        1,471,613  

 

56

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Transportation Revenue Bonds (continued)

      

South Jersey Port, New Jersey

      

(Subordinated Marine Terminal)

      

Series B 5.00% 1/1/32 (AMT)

      215,000      $ 243,470  

Series B 5.00% 1/1/33 (AMT)

      315,000        354,848  

Series B 5.00% 1/1/34 (AMT)

      430,000        482,666  

Series B 5.00% 1/1/35 (AMT)

      430,000        481,196  

Series B 5.00% 1/1/36 (AMT)

      430,000        479,635  

Series B 5.00% 1/1/37 (AMT)

      430,000        478,250  

Texas Private Activity Bond Surface Transportation Corporate Senior Lien Revenue

      

(LBJ Infrastructure)

      

7.50% 6/30/33

      3,625,000        3,645,083  

(NTE Mobility Partners Segments 3 LLC Segment 3A and 3B Facility)

      

7.00% 12/31/38 (AMT)

      3,750,000        4,310,550  
     

 

 

  
        85,231,466  
     

 

 

  

Water & Sewer Revenue Bonds — 1.55%

      

Dominion, Colorado Water & Sanitation District

      

5.25% 12/1/27

      500,000        523,180  

Great Lakes, Michigan Water Authority Water Supply System Revenue

      

(Senior Lien Bond)

      

Series C 5.00% 7/1/31

      3,000,000        3,654,720  

San Antonio, Texas Water System Revenue

      

Series A 5.00% 5/15/32

      1,500,000        1,884,345  

Series A 5.00% 5/15/33

      2,250,000        2,813,558  
     

 

 

  
        8,875,803  
     

 

 

  

Total Municipal Bonds (cost $514,578,126)

         553,541,750  
     

 

 

  

    

      

Short-Term Investments — 2.32%

                  

Variable Rate Demand Notes — 2.32%¤

      

Minneapolis & St. Paul, Minnesota Housing & Redevelopment Authority Health Care Revenue

      

(Allina Health System)

      

Series B-2 0.02% 11/15/35 (LOC - JPMorgan Chase Bank N.A.)

      500,000        500,000  

 

57

Table of Contents

Schedules of investments

Delaware Tax-Free USA Intermediate Fund

 

     Principal amount°      Value (US $)  

Short-Term Investments (continued)

                  

Mississippi Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue

      

(Chevron U.S.A. Inc. Project)

      

Series A 0.03% 12/1/30

      1,150,000      $ 1,150,000  

Series A 0.03% 11/1/35

      2,390,000        2,390,000  

Series B 0.03% 12/1/30

      700,000        700,000  

Series B 0.03% 12/1/30

      1,885,000        1,885,000  

Series G 0.03% 11/1/35

      1,795,000        1,795,000  

Series G 0.03% 11/1/35

      2,300,000        2,300,000  

Series H 0.03% 11/1/35

      1,430,000        1,430,000  

Series L 0.03% 11/1/35

      1,100,000        1,100,000  
     

 

 

  

Total Short-Term Investments (cost $13,250,000)

         13,250,000  
     

 

 

  

Total Value of Securities — 99.14%
(cost $527,828,126)

       $       566,791,750  
     

 

 

  

 

°

Principal amount shown is stated in USD unless noted that the security is denominated in another currency.

 

●  

Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at August 31, 2020. For securities based on a published reference rate and spread, the reference rate and spread are indicated in their description above. The reference rate descriptions (i.e. LIBOR03M, LIBOR06M, etc.) used in this report are identical for different securities, but the underlying reference rates may differ due to the timing of the reset period. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their description above.

 

#

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $28,930,974, which represents 5.06% of the Fund’s net assets. See Note 9 in “Notes to financial statements.”

 

^

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 9 in “Notes to financial statements.”

 

¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of August 31, 2020.

 

58

Table of Contents

    

    

 

Summary of abbreviations:

AGM – Insured by Assured Guaranty Municipal Corporation

AMT – Subject to Alternative Minimum Tax

ICE – Intercontinental Exchange, Inc.

LIBOR – London interbank offered rate

LIBOR03M – ICE LIBOR USD 3 Month

LIBOR06M – ICE LIBOR USD 6 Month

LLC – Limited Liability Corporation

LOC – Letter of Credit

N.A. – National Association

PSF – Guaranteed by Permanent School Fund

USD – US Dollar

See accompanying notes, which are an integral part of the financial statements.

 

59

Table of Contents
Schedules of investments   
Delaware National High-Yield Municipal Bond Fund    August 31, 2020

 

     Principal amount°      Value (US $)  

Municipal Bonds — 97.46%

                  

Corporate Revenue Bonds — 19.39%

      

Allegheny County, Pennsylvania Industrial Development Authority Revenue

      

(Environmental Improvement - US Steel Corp. Project)

      

5.75% 8/1/42 (AMT)

      2,000,000      $ 1,803,300  

Anuvia, Florida

      

144A 5.00% 1/1/29 #, =

      127,762        95,822  

Arkansas Development Finance Authority Revenue

      

(Big River Steel Project)

      

Series A 144A 4.50% 9/1/49 (AMT)#

      5,000,000        5,057,350  

Buckeye, Ohio Tobacco Settlement Financing Authority

      

(Asset-Backed Senior)

      

Series B-2 5.00% 6/1/55

      34,375,000            37,812,500  

California County Tobacco Securitization Agency Settlement Revenue

      

(Capital Appreciation Bond - Fresno County Tobacco Funding Corporation)

      

0.83% 6/1/55 ^

      100,000,000        7,122,000  

California Pollution Control Financing Authority Revenue

      

(Calplant I Project)

      

144A 8.00% 7/1/39 (AMT)#, ‡

      5,250,000        3,045,000  

California State Enterprise Development Authority Revenue

      

(Sunpower Corp. - Recovery Zone Facility)

      

8.50% 4/1/31

      1,000,000        1,011,070  

Children’s Trust Fund

      

(Asset-Backed)

      

Series B 0.485% 5/15/57 ^

      3,420,000        137,552  

Erie, New York Tobacco Asset Securitization

      

(Asset-Backed)

      

Series A 1.536% 6/1/60 ^

      192,305,000        8,740,262  

Florida Development Finance Corporation Surface Transportation Facility Revenue

      

(Virgin Trains USA Passenger Rail Project)

      

Series A 144A 6.25% 1/1/49 (AMT)#, ●

      4,000,000        3,526,680  

Series A 144A 6.50% 1/1/49 (AMT)#, ●

      10,000,000        8,667,200  

 

60

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Corporate Revenue Bonds (continued)

      

Golden State, California Tobacco Securitization Corporate Settlement Revenue

      

(Asset-Backed)

      

Series A-2 5.00% 6/1/47

      4,000,000      $ 4,112,880  

(Capital Appreciation - Asset-Backed-1st Subordinate)

      

Series B 1.548% 6/1/47 ^

      30,145,000        6,364,514  

Hoover, Alabama Industrial Development Board

      

(United States Steel Corporation Project)

      

5.75% 10/1/49 (AMT)

      12,800,000        11,156,096  

Houston, Texas Airport System Revenue

      

Series B-1 5.00% 7/15/35 (AMT)

      3,000,000        3,068,070  

(Special Facilities Continental Airlines, Inc. Terminal Improvements Projects)

      

Series 2011 6.625% 7/15/38 (AMT)

      2,000,000        2,035,800  

(United Airlines Inc.)

      

5.00% 7/1/29 (AMT)

      1,150,000        1,191,849  

Indiana Finance Authority Exempt Facility Revenue

      

(Polyflow Indiana Project - Green Bond)

      

144A 7.00% 3/1/39 (AMT)#

      13,035,000            12,301,781  

Inland, California Empire Tobacco Securitization

      

(Capital Appreciation-Asset-Backed)

      

  144A 0.967% 6/1/57 #, ^

      351,610,000        19,275,260  

  144A 1.453% 6/1/57 #, ^

      163,290,000        6,639,372  

Main Street Natural Gas Project Revenue, Georgia

      

Series A 5.50% 9/15/23

      40,000        45,595  

Michigan Tobacco Settlement Financing Authority Revenue Asset-Backed

      

Series A 6.00% 6/1/48

      1,255,000        1,261,212  

Nevada State Department of Business & Industry

      

(Green Fulcrum Sierra Biofuels Project)

      

144A 6.25% 12/15/37 (AMT)#

      2,500,000        2,425,275  

New Jersey Economic Development Authority Special Facility Revenue

      

(Continental Airlines Project)

      

5.25% 9/15/29 (AMT)

      4,000,000        4,093,840  

Series B 5.625% 11/15/30 (AMT)

      1,270,000        1,318,794  

New Jersey Tobacco Settlement Financing Subordinate

      

Series B 5.00% 6/1/46

      4,440,000        5,033,184  

New York Transportation Development

      

(American Airlines Inc. John F. Kennedy International Airport Project)

      

5.375% 8/1/36 (AMT)

      1,000,000        1,037,360  

 

61

Table of Contents

Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Corporate Revenue Bonds (continued)

      

Pennsylvania Economic Development Financing Authority

      

(CarbonLite P, LLC Project)

      

144A 5.75% 6/1/36 (AMT)#

      7,625,000      $ 7,507,956  

(National Gypsum)

      

5.50% 11/1/44 (AMT)

      4,500,000        4,624,110  

Port of Seattle, Washington Industrial Development Corporation Special Facilities Revenue

      

(Delta Airlines)

      

5.00% 4/1/30 (AMT)

      2,000,000        2,056,200  

Public Authority for Colorado Energy Natural Gas Revenue

      

Series 28 6.50% 11/15/38

      2,000,000        3,188,860  

Salt Verde, Arizona Financial Senior Gas Revenue

      

  5.00% 12/1/37

      9,250,000            12,664,453  

  5.25% 12/1/27

      2,235,000        2,819,497  

  5.25% 12/1/28

      1,050,000        1,350,090  

  5.50% 12/1/29

      765,000        1,016,662  

Shoals, Indiana

      

(National Gypsum Co. Project)

      

7.25% 11/1/43 (AMT)

      1,625,000        1,716,991  

St. James Parish, Louisiana

      

(NuStar Logistics, LP Project)

      

144A 6.10% 6/1/38 #, ●

      1,000,000        1,184,030  

144A 6.35% 7/1/40 #

      3,600,000        4,286,700  

Series B 144A 6.10% 12/1/40 #, ●

      1,630,000        1,929,969  

Tennessee State Energy Acquisition Gas Revenue

      

Series A 4.00% 5/1/48 ●

      720,000        778,097  

Series C 5.00% 2/1/27

      2,940,000        3,615,347  

TSASC, New York

      

Series A 5.00% 6/1/41

      705,000        795,564  

Tulsa, Oklahoma Municipal Airports Improvement Trust Revenue

      

Series A 5.50% 6/1/35 (AMT)

      2,000,000        2,022,140  

Valparaiso, Indiana

      

(Pratt Paper LLC Project)

      

7.00% 1/1/44 (AMT)

      2,865,000        3,179,377  

Virginia Tobacco Settlement Financing Corporation

      

Series B-1 5.00% 6/1/47

      2,000,000        2,009,900  

Series C 2.419% 6/1/47 ^

      66,475,000        13,221,213  

Series D 2.567% 6/1/47 ^

      151,255,000        28,653,747  

 

62

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Corporate Revenue Bonds (continued)

      

Washington Economic Development Finance Authority Revenue

      

(Columbia Pulp I, LLC Project)

      

Series 2017A 144A 7.50% 1/1/32 (AMT)#

      4,800,000      $ 4,080,000  
     

 

 

  
            261,080,521  
     

 

 

  

Education Revenue Bonds — 18.50%

      

Arizona Industrial Development Authority Revenue

      

(ACCEL Schools Project)

      

Series A 144A 5.25% 8/1/48 #

      3,200,000        3,332,224  

(American Charter Schools Foundation Project)

      

144A 6.00% 7/1/37 #

      1,205,000        1,344,672  

144A 6.00% 7/1/47 #

      4,735,000        5,200,735  

(Basis Schools Projects)

      

Series A 144A 5.125% 7/1/37 #

      750,000        807,592  

(Kaizen Education Foundation Project)

      

144A 5.80% 7/1/52#

      4,000,000        4,278,600  

(Pinecrest Academy Nevada-Horizon, Inspirada)

      

Series A 144A 5.75% 7/15/48#

      2,250,000        2,463,907  

Arlington, Texas Higher Education Finance

      

(Leadership Preparatory School)

      

Series A 5.00% 6/15/36

      700,000        704,347  

Series A 5.00% 6/15/46

      1,425,000        1,430,458  

Build NYC Resource, New York

      

5.00% 11/1/39

      1,000,000        1,041,460  

(Inwood Academy for Leadership Charter School Project)

      

Series A 144A 5.125% 5/1/38 #

      575,000        614,175  

Series A 144A 5.50% 5/1/48 #

      1,500,000        1,614,345  

(New Dawn Charter Schools Project)

      

144A 5.625% 2/1/39 #

      1,290,000        1,355,828  

144A 5.75% 2/1/49 #

      2,700,000        2,824,821  

Burbank, Illinois

      

(Intercultural Montessori Language)

      

144A 6.25% 9/1/45 #

      4,000,000        4,275,120  

California Educational Facilities Authority Revenue

      

(Stanford University)

      

Series V-1 5.00% 5/1/49

      17,050,000        27,789,283  

California Municipal Finance Authority Revenue

      

(California Baptist University)

      

Series A 144A 5.50% 11/1/45 #

      4,000,000        4,221,800  

(Julian Charter School Project)

      

Series A 144A 5.625% 3/1/45 #

      5,250,000        5,297,460  

 

63

Table of Contents

Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Education Revenue Bonds (continued)

      

California Municipal Finance Authority Revenue

      

(Partnership Uplift Community Project)

      

Series A 5.25% 8/1/42

      1,700,000      $     1,729,920  

(Santa Rosa Academy Project)

      

Series A 6.00% 7/1/42

      1,250,000        1,308,275  

(Southwestern Law School)

      

6.50% 11/1/41

      1,500,000        1,579,500  

California School Finance Authority

      

(Aspire Public Schools)

      

Series A 144A 5.00% 8/1/35 #

      585,000        661,992  

Series A 144A 5.00% 8/1/40 #

      605,000        677,787  

(Encore Education Obligated Group)

      

Series A 144A 5.00% 6/1/52 #

      1,000,000        903,130  

(Escuela Popular Project)

      

144A 6.50% 7/1/50 #

      2,500,000        2,725,075  

(New Designs Charter School)

      

Series A 5.50% 6/1/42

      1,750,000        1,790,792  

(View Park Elementary & Middle Schools)

      

Series A 5.875% 10/1/44

      1,000,000        1,073,800  

Series A 6.00% 10/1/49

      720,000        776,506  

California State University

      

(Systemwide)

      

Series A 5.00% 11/1/26

      2,000,000        2,562,580  

California Statewide Communities Development Authority Charter School Revenue

      

(Green Dot Public Schools)

      

Series A 7.25% 8/1/41

      1,915,000        1,994,128  

California Statewide Communities Development Authority Revenue

      

(Lancer Educational Student Housing Project)

      

Series A 144A 5.00% 6/1/46 #

      1,500,000        1,520,070  

Capital Trust Agency, Florida

      

(Pineapple Cove Classical Academy Inc. Project)

      

Series A 144A 5.375% 7/1/54 #

      6,000,000        6,267,720  

(River City Education Services Project)

      

Series A 5.375% 2/1/35

      870,000        899,780  

Series A 5.625% 2/1/45

      1,500,000        1,544,430  

(The Pepin Academies Inc. Project)

      

Series A 5.75% 7/1/55

      2,625,000        2,686,110  

(University Bridge, LLC Student Housing Project)

      

Series A 144A 5.25% 12/1/58 #

      8,000,000        7,696,080  

 

64

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Education Revenue Bonds (continued)

      

Colorado Educational & Cultural Facilities Authority Revenue

      

(Charter School - Community Leadership Academy)

      

7.45% 8/1/48

      2,000,000      $     2,202,960  

(Charter School - Loveland Classical School)

      

144A 5.00% 7/1/46 #

      1,500,000        1,508,175  

(Skyview Charter School)

      

144A 5.375% 7/1/44 #

      500,000        510,615  

(Windsor Charter Academy Project)

      

Series 2016 144A 5.00% 9/1/36 #

      1,000,000        1,003,660  

Columbia Heights, Minnesota Charter School Lease Revenue

      

(Prodeo Academy Project)

      

Series A 5.00% 7/1/49

      1,000,000        1,019,960  

Series A 5.00% 7/1/54

      1,000,000        1,016,350  

East Hempfield Township, Pennsylvania Industrial Development Authority

      

(Student Services Income - Student Housing Project)

      

5.00% 7/1/30

      1,000,000        1,018,680  

Hawaii State Department of Budget & Finance

      

(Hawaii Pacific University)

      

Series A 6.875% 7/1/43

      2,000,000        2,058,320  

Henderson, Nevada Public Improvement Trust

      

(Touro College & University System)

      

Series A 5.50% 1/1/39

      560,000        594,748  

Series A 5.50% 1/1/44

      2,000,000        2,110,160  

Idaho Housing & Finance Association

      

(Compass Public Charter School)

      

Series A 144A 5.00% 7/1/54 #

      860,000        894,391  

(Idaho Arts Charter School)

      

144A 5.00% 12/1/36 #

      715,000        780,837  

(North Star Charter School)

      

Capital Appreciation Subordinate Series B

      

144A 4.88% 7/1/49 #, ^

      2,888,155        484,373  

Series A 6.75% 7/1/48

      529,150        572,419  

(Xavier Charter School Project)

      

Series A 5.00% 6/1/50

      1,000,000        1,083,330  

Illinois Finance Authority Charter School Revenue

      

(Chicago International Charter School Project)

      

5.00% 12/1/47

      2,805,000        3,026,988  

(Uno Charter School)

      

Series A 7.125% 10/1/41

      1,000,000        1,036,450  

 

65

Table of Contents

Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Education Revenue Bonds (continued)

      

Illinois Finance Authority Revenue

      

(Lake Forest College)

      

Series A 6.00% 10/1/48

      1,000,000      $     1,035,830  

(Rogers Park Montessori)

      

6.00% 2/1/34

      675,000        715,662  

6.125% 2/1/45

      1,800,000        1,893,276  

Illinois Finance Authority Student Housing & Academic Facility Revenue

      

(University of Illinois at Chicago Project)

      

Series A 5.00% 2/15/47

      3,500,000        3,351,460  

Illinois Finance Authority Student Housing Revenue

      

(Dekalb II - Northern Illinois University Project)

      

6.875% 10/1/43

      1,000,000        1,024,080  

Indiana State Finance Authority Revenue

      

Educational Facilities

      

(Drexel Foundation - Thea Bowman Academy Charter School)

      

Series A 7.00% 10/1/39

      1,000,000        1,001,620  

Kanawha, West Virginia

      

(West Virginia University Foundation Project)

      

6.75% 7/1/45

      2,500,000        2,576,025  

Kent County, Delaware Student Housing and Dining Facilities Revenue

      

(Delaware State University Project)

      

Series A 5.00% 7/1/58

      1,250,000        1,139,813  

Louisiana Public Facilities Authority Revenue

      

(Lake Charles Charter Academy Foundation Project)

      

8.00% 12/15/41

      1,500,000        1,570,110  

Macomb County, Michigan State Public School Academy Revenue

      

(Academy Of Warren)

      

Series A 144A 5.50% 5/1/50 #

      1,810,000        1,823,901  

Macon-Bibb County, Georgia Urban Development Authority Revenue

      

(Academy for Classical Education)

      

Series A 144A 5.875% 6/15/47 #

      1,680,000        1,702,781  

Series A 144A 6.00% 6/15/52 #

      1,530,000        1,557,096  

Miami-Dade County, Florida Industrial Development Authority

      

(Youth Co-Op Charter School)

      

Series A 144A 5.75% 9/15/35 #

      1,000,000        1,052,990  

Series A 144A 6.00% 9/15/45 #

      1,000,000        1,047,640  

 

66

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     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Education Revenue Bonds (continued)

      

Michigan Finance Authority Limited Obligation Revenue

      

(Public School Academy Old Redford)

      

Series A 6.50% 12/1/40

      900,000      $ 901,971  

(Landmark Academy Project)

      

5.00% 6/1/45

      2,000,000            2,013,660  

Nevada State Department of Business & Industry

      

(Somerset Academy)

      

Series A 144A 5.00% 12/15/35 #

      1,595,000        1,639,596  

Series A 144A 5.125% 12/15/45 #

      2,515,000        2,558,459  

New Jersey State Higher Education Student

      

Assistance Authority Student Loan Revenue

      

Series 1B 5.75% 12/1/39 (AMT)

      1,250,000        1,339,713  

New York State Dormitory Authority

      

(Touro College & University System)

      

Series A 5.50% 1/1/44

      2,875,000        3,043,878  

Pennsylvania State Higher Educational Facilities Authority Revenue

      

(Foundation Indiana University)

      

Series A 1.61% 7/1/39 (AGC)●

      2,400,000        2,177,712  

Philadelphia, Pennsylvania Authority for Industrial Development Revenue

      

(1st Philadelphia Preparatory)

      

Series A 7.25% 6/15/43

      1,230,000        1,375,927  

(Global Leadership Academy Project)

      

6.375% 11/15/40

      1,000,000        1,004,420  

(Green Woods Charter School Project)

      

Series A 5.75% 6/15/42

      1,600,000        1,637,984  

(Tacony Academy Charter School Project)

      

7.00% 6/15/43

      1,540,000        1,660,120  

Phoenix, Arizona Industrial Development Authority Education Revenue

      

(Basic Schools Project)

      

Series 2015A 144A 5.00% 7/1/46 #

      4,000,000        4,184,640  

Series 2016A 144A 5.00% 7/1/45 #

      2,000,000        2,093,220  

(Choice Academies Project)

      

5.375% 9/1/32

      1,000,000        1,021,710  

5.625% 9/1/42

      600,000        612,636  

(Eagle College Preparatory Project)

      

Series A 5.00% 7/1/43

      450,000        454,122  

 

67

Table of Contents

Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Education Revenue Bonds (continued)

      

Pima County, Arizona Industrial Development Authority Education Revenue

      

(American Leadership Academy Project)

      

144A 5.00% 6/15/47 #

      1,630,000      $ 1,634,841  

144A 5.00% 6/15/52 #

      1,400,000        1,402,968  

(Career Success Schools Project)

      

144A 5.50% 5/1/40 #

      500,000        525,250  

144A 5.75% 5/1/50 #

      1,630,000        1,711,614  

(Edkey Charter Schools Project)

      

6.00% 7/1/43

      2,000,000        2,028,240  

Pottsboro, Texas Higher Education Finance Authority Revenue

      

Series A 5.00% 8/15/36

      755,000        789,745  

Series A 5.00% 8/15/46

      1,000,000            1,028,460  

Private Colleges & Universities Authority, Georgia Revenue

      

(Mercer University)

      

Series A 5.00% 10/1/32

      1,005,000        1,029,241  

Public Finance Authority Revenue, Wisconsin

      

(Goodwill Industries of Southern Nevada Project)

      

Series A 5.50% 12/1/38

      2,572,956        2,267,521  

Series A 5.75% 12/1/48

      2,576,272        2,218,273  

(Minnesota College of Osteopathic Medicine)

      

Series A-1 144A 5.50% 12/1/48 #, ‡

      125,529        62,764  

Subordinate Series B 144A 7.75% 12/1/48 #, ●

      2,500,000        250,000  

(Wilson Preparatory Academy)

      

Series A 144A 4.125% 6/15/29 #

      505,000        512,378  

Series A 144A 5.00% 6/15/39 #

      500,000        510,790  

Series A 144A 5.00% 6/15/49 #

      1,100,000        1,110,923  

South Carolina Jobs-Economic Development Authority Educational Facilities Revenue

      

(High Point Academy Project)

      

Series A 144A 5.75% 6/15/49 #

      5,000,000        5,421,050  

St. Paul, Minnesota Housing & Redevelopment Authority Charter School Lease Revenue

      

(Academia Cesar Chavez School Project)

      

Series A 5.25% 7/1/50

      2,560,000        2,536,934  

University of Texas System Board of Regents

      

Series B 5.00% 8/15/49

      21,400,000        34,621,562  

Utah State Charter School Finance Authority Revenue

      

(Leadership Learning Academy Project)

      

Series A 144A 5.00% 6/15/39 #

      1,000,000        1,049,960  

 

68

Table of Contents

    

    

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Education Revenue Bonds (continued)

      

Utah State Charter School Finance Authority Revenue

      

(Leadership Learning Academy Project)

      

Series A 144A 5.00% 6/15/50 #

      2,200,000      $ 2,272,512  

(North Davis Preparatory)

      

6.375% 7/15/40

      1,290,000        1,293,509  

Wisconsin Public Finance Authority Revenue

      

(Pine Lake Preparatory)

      

144A 5.50% 3/1/45 #

      3,460,000        3,603,728  

(Roseman University Health Sciences Project)

      

5.75% 4/1/42

      2,000,000        2,056,420  

Wyoming Community Development Authority Student Housing Revenue

      

(CHF-Wyoming LLC)

      

6.50% 7/1/43

      1,000,000        1,016,230  

Yonkers, New York Economic Development Corporation Education Revenue

      

(Charter School Educational Excellence)

      

Series A 6.25% 10/15/40

      595,000        597,243  

(Lamartine/Warburton LLC - Charter School of Educational Excellence Project)

      

Series A 5.00% 10/15/54

      465,000        483,623  
     

 

 

  
              249,164,749  
     

 

 

  

Electric Revenue Bonds — 2.96%

      

Build NYC Resource, New York

      

(Brooklyn Navy Yard Cogeneration Partners, L.P. Project)

      

144A 5.25% 12/31/33 (AMT)#

      4,520,000        4,798,206  

Puerto Rico Electric Power Authority Revenue

      

Series A 5.00% 7/1/42 ‡

      7,740,000        5,340,600  

Series A 5.05% 7/1/42 ‡

      4,590,000        3,167,100  

Series A 6.75% 7/1/36 ‡

      1,500,000        1,057,500  

Series AAA 5.25% 7/1/25 ‡

      925,000        639,406  

Series AAA 5.25% 7/1/26 ‡

      1,030,000        711,988  

Series AAA 5.25% 7/1/27 ‡

      5,330,000        3,684,362  

Series AAA 5.25% 7/1/28 ‡

      1,205,000        832,956  

Series CCC 5.25% 7/1/27 ‡

      3,025,000        2,091,031  

Series WW 5.00% 7/1/28 ‡

      990,000        683,100  

Series WW 5.25% 7/1/25 ‡

      1,530,000        1,057,613  

Series XX 4.75% 7/1/26 ‡

      920,000        630,200  

Series XX 5.25% 7/1/40 ‡

      9,795,000        6,770,794  

Series XX 5.75% 7/1/36 ‡

      3,340,000        2,329,650  

Series ZZ 4.75% 7/1/27 ‡

      760,000        520,600  

 

69

Table of Contents

Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Electric Revenue Bonds (continued)

      

Puerto Rico Electric Power Authority Revenue

      

Series ZZ 5.25% 7/1/24 ‡

      1,275,000      $ 881,344  

Series ZZ 5.25% 7/1/26 ‡

      2,005,000        1,385,956  

Salt River Project Agricultural Improvement & Power District, Arizona

      

(Salt River Project)

      

Series A 5.00% 1/1/31

      2,520,000        3,263,350  
     

 

 

  
              39,845,756  
     

 

 

  

Healthcare Revenue Bonds — 25.41%

      

Alachua County, Florida Health Facilities Authority

      

(Oak Hammock University)

      

Series A 8.00% 10/1/42

      1,000,000        1,098,310  

Series A 8.00% 10/1/46

      1,500,000        1,644,600  

Allen County, Indiana Economic Development Revenue

      

(StoryPoint Fort Wayne Project)

      

Series A-1 144A 6.875% 1/15/52 #

      1,650,000        1,563,623  

Apple Valley, Minnesota

      

(Minnesota Senior Living LLC, Project)

      

Series B 5.00% 1/1/47

      2,500,000        1,659,225  

Series B 5.25% 1/1/37

      440,000        337,000  

Series D 7.25% 1/1/52

      7,290,000        5,519,624  

Arizona Industrial Development Authority Revenue

      

(Great Lakes Senior Living Communities LLC Project 1st Tier)

      

Series A 5.00% 1/1/54

      2,595,000        2,272,909  

(Great Lakes Senior Living Communities LLC Project 2nd Tier)

      

Series B 5.00% 1/1/49

      975,000        820,804  

Series B 5.125% 1/1/54

      1,130,000        954,025  

(Great Lakes Senior Living Communities LLC Project 3rd Tier)

      

Series C 144A 5.00% 1/1/49 #

      1,000,000        796,000  

Series C 144A 5.50% 1/1/54 #

      4,000,000        3,386,040  

(Great Lakes Senior Living Communities LLC Project 4th Tier)

      

Series D 144A 7.25% 1/1/54 #

      2,500,000        2,164,600  

(Legacy Cares Inc. Project)

      

Series A 144A 7.75% 7/1/50#

      11,530,000        11,409,050  

Berks County, Pennsylvania Industrial Development Authority Revenue

      

(Tower Health Project)

      

5.00% 11/1/47

      2,000,000        2,145,120  

 

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     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Healthcare Revenue Bonds (continued)

      

Bexar County, Texas Health Facilities Development

      

(Army Retirement Residence Foundation Project)

      

Series 2010 5.875% 7/1/30

      155,000      $ 155,260  

Birmingham, Alabama Special Care Facilities Financing Authority

      

(Methodist Home for the Aging)

      

  5.50% 6/1/30

      1,850,000              1,930,272  

  5.75% 6/1/35

      1,500,000        1,553,190  

  5.75% 6/1/45

      2,500,000        2,543,750  

  6.00% 6/1/50

      2,650,000        2,727,406  

Butler County, Ohio Port Authority

      

(StoryPoint Fairfield Project)

      

Series A-1 144A 6.50% 1/15/52 #

      650,000        615,908  

California Health Facilities Financing Authority Revenue

      

(Kaiser Permanente)

      

Series A-2 5.00% 11/1/47

      4,870,000        7,605,382  

California Municipal Finance Authority Revenue

      

(Northbay Healthcare Group)

      

Series A 5.25% 11/1/47

      500,000        550,985  

California Statewide Communities Development Authority Revenue

      

(Loma Linda University Medical Center)

      

Series A 144A 5.25% 12/1/56 #

      4,500,000        4,845,735  

Series A 144A 5.50% 12/1/58 #

      4,600,000        5,065,060  

Camden County, New Jersey Improvement Authority Revenue

      

(Cooper Health System Obligation Group)

      

5.75% 2/15/42

      2,050,000        2,215,066  

Capital Trust Agency, Florida

      

(Elim Senior Housing Inc. Project)

      

144A 5.875% 8/1/52 #

      2,500,000        1,874,250  

(Tuscan Gardens Senior Living Center)

      

Series A 7.00% 4/1/49

      5,000,000        3,508,200  

Chesterfield County, Virginia Economic Development Authority Revenue

      

(1st Mortgage - Brandermill Woods Project)

      

5.125% 1/1/43

      1,030,000        1,034,851  

Chesterton, Indiana

      

(StoryPoint Chesterton Project)

      

Series A-1 144A 6.375% 1/15/51 #

      1,000,000        947,540  

 

71

Table of Contents

Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Healthcare Revenue Bonds (continued)

      

Clackamas County, Oregon Hospital Facility Authority

      

(Rose Villa Project)

      

Series A 5.25% 11/15/50

      1,000,000      $       1,060,790  

Series A 5.375% 11/15/55

      1,000,000        1,065,120  

Cobb County, Georgia Development Authority

      

(Provident Village at Creekside Project)

      

Series A 144A 6.00% 7/1/51 #

      3,500,000        2,537,815  

Colorado Health Facilities Authority Revenue

      

(American Baptist)

      

8.00% 8/1/43

      2,500,000        2,659,200  

(Mental Health Center Denver Project)

      

Series A 5.75% 2/1/44

      500,000        530,430  

(Sunny Vista Living Center)

      

Series A 144A 5.50% 12/1/30 #

      750,000        758,092  

Series A 144A 5.75% 12/1/35 #

      1,150,000        1,151,426  

Series A 144A 6.125% 12/1/45 #

      1,200,000        1,201,188  

Series A 144A 6.25% 12/1/50 #

      560,000        562,414  

Cumberland County, Pennsylvania Municipal Authority Revenue

      

(Asbury Pennsylvania Obligated Group)

      

  5.25% 1/1/27

      1,275,000        1,285,328  

  5.25% 1/1/32

      1,265,000        1,271,350  

  5.25% 1/1/41

      1,005,000        1,007,100  

Cuyahoga County, Ohio Hospital Revenue

      

(The Metrohealth System)

      

  5.25% 2/15/47

      4,000,000        4,599,280  

  5.50% 2/15/52

      4,655,000        5,396,728  

  5.50% 2/15/57

      6,365,000        7,344,510  

Decatur, Texas Hospital Authority

      

(Wise Regional Health Systems)

      

Series A 5.00% 9/1/34

      1,000,000        1,091,010  

Series A 5.25% 9/1/29

      500,000        559,325  

Series A 5.25% 9/1/44

      2,000,000        2,152,660  

Florida Development Finance

      

(UF Health - Jacksonville Project)

      

Series A 6.00% 2/1/33

      490,000        517,773  

Glendale, Arizona Industrial Development Authority Revenue

      

(Glencroft Retirement Community Project)

      

  5.00% 11/15/36

      830,000        812,794  

  5.25% 11/15/51

      1,350,000        1,290,128  

 

72

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     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Healthcare Revenue Bonds (continued)

      

Guilderland, New York Industrial Development Agency

      

Series A 144A 5.875% 1/1/52 #, ‡

      6,000,000      $       4,500,000  

Hawaii State Department of Budget & Finance Special Purpose Senior Living Revenue

      

(Kahala Nui)

      

5.25% 11/15/37

      1,000,000        1,074,010  

Hospital Facilities Authority of Multnomah County, Oregon

      

(Mirabella at South Waterfront)

      

5.50% 10/1/49

      2,400,000        2,504,832  

Idaho Health Facilities Authority Revenue

      

(St. Luke’s Health System Project)

      

Series A 5.00% 3/1/33

      485,000        594,168  

(Valley Vista Care Corporation)

      

Series A 5.00% 11/15/32

      455,000        444,012  

Illinois Finance Authority Revenue

      

(The Admiral at the Lake Project)

      

  5.25% 5/15/42

      900,000        847,719  

  5.25% 5/15/54

      5,600,000        5,061,952  

Illinois Housing Development Authority

      

(Stonebridge of Gurnee Project)

      

Series A 144A 5.45% 1/1/46 #

      2,500,000        2,416,550  

Series A 144A 5.60% 1/1/56 #

      2,630,000        2,589,971  

Indiana Finance Authority Revenue

      

(Marquette Project)

      

5.00% 3/1/39

      1,250,000        1,272,000  

Iowa Finance Authority

      

(PHS Council Bluffs Project)

      

  5.125% 8/1/48

      1,650,000        1,659,520  

  5.25% 8/1/55

      2,500,000        2,514,925  

(Sunrise Retirement Community)

      

5.75% 9/1/43

      4,700,000        4,324,188  

Kalispell, Montana

      

(Immanuel Lutheran Corporation Project)

      

Series A 5.25% 5/15/47

      1,300,000        1,298,037  

Kentucky Economic Development Finance Authority Healthcare Revenue

      

(Rosedale Green Project)

      

  5.50% 11/15/35

      1,310,000        1,248,915  

  5.75% 11/15/45

      2,500,000        2,324,225  

  5.75% 11/15/50

      1,600,000        1,467,536  

 

73

Table of Contents

Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Healthcare Revenue Bonds (continued)

      

Kentwood, Michigan Economic Development Corporation Revenue

      

(Limited Obligation - Holland Home)

      

5.625% 11/15/41

      1,250,000      $       1,284,275  

Kirkwood, Missouri Industrial Development Authority

      

(Aberdeen Heights)

      

Series A 5.25% 5/15/50

      6,000,000        6,053,460  

Louisiana Local Government Environmental Facilities & Community Development Authority Revenue

      

(The Glen Retirement System Project)

      

Series A 5.00% 1/1/49

      2,500,000        2,179,525  

Series A 5.00% 1/1/55

      2,635,000        2,236,562  

Lucas County, Ohio Health Care Facilities Revenue

      

(Sunset Retirement Communities)

      

5.50% 8/15/30

      1,000,000        1,028,060  

Maine Health & Higher Educational Facilities Authority Revenue

      

(Maine General Medical Center)

      

6.75% 7/1/41

      1,700,000        1,743,894  

Maricopa County, Arizona Industrial Development Authority

      

(Christian Care Surprise Project)

      

Series 2016 144A 6.00% 1/1/48 #

      5,645,000        5,460,634  

Michigan State Strategic Fund Limited Revenue

      

(Evangelical Homes)

      

5.50% 6/1/47

      2,750,000        2,788,115  

Missouri State Health & Educational Facilities Authority Revenue

      

(Lutheran Senior Services)

      

6.00% 2/1/41

      1,000,000        1,014,450  

Montgomery County, Pennsylvania Industrial Development Authority Revenue

      

(Whitemarsh Continuing Care)

      

  5.25% 1/1/40

      1,550,000        1,574,459  

  5.375% 1/1/50

      6,250,000        6,330,062  

Series A 5.375% 1/1/51

      1,750,000        1,779,418  

Moon, Pennsylvania Industrial Development Authority

      

(Baptist Homes Society Obligation)

      

6.125% 7/1/50

      8,500,000        8,820,280  

 

74

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     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Healthcare Revenue Bonds (continued)

      

National Finance Authority Revenue, New Hampshire

      

(The Vista Project)

      

Series A 144A 5.25% 7/1/39 #

      1,515,000      $       1,540,164  

Series A 144A 5.625% 7/1/46 #

      1,000,000        1,027,620  

Series A 144A 5.75% 7/1/54 #

      2,000,000        2,060,780  

New Hampshire Health & Education Facilities Authority

      

(Rivermeade)

      

Series A 6.875% 7/1/41

      1,380,000        1,401,790  

New Hope, Texas Cultural Education Facilities Finance

      

(Cardinal Bay - Village on the Park)

      

Series A1 5.00% 7/1/46

      660,000        645,896  

Series A1 5.00% 7/1/51

      1,575,000        1,485,288  

Series B 4.00% 7/1/31

      635,000        548,608  

Series B 4.75% 7/1/51

      1,915,000        1,450,555  

Series C 5.00% 7/1/31

      250,000        224,378  

Series C 5.25% 7/1/36

      350,000        306,796  

Series C 5.50% 7/1/46

      1,250,000        1,053,387  

Series C 5.75% 7/1/51

      1,000,000        853,810  

Series D 6.00% 7/1/26

      105,000        99,647  

Series D 7.00% 7/1/51

      1,350,000        1,163,484  

(Legacy Midtown Park Project)

      

Series A 5.50% 7/1/54

      5,000,000        4,757,050  

New Jersey Economic Development Authority

      

(Black Horse EHT Urban Renewal LLC Project)

      

Series A 144A 5.00% 10/1/39 #

      3,125,000        3,005,906  

(Lions Gate Project)

      

5.25% 1/1/44

      2,000,000        1,939,680  

New Jersey Health Care Facilities Financing Authority Revenue

      

(Barnabas Health Services)

      

Series A 4.00% 7/1/26

      980,000        1,034,057  

(St. Peters University Hospital)

      

6.25% 7/1/35

      2,700,000        2,788,101  

New York State Dormitory Authority

      

(Orange Regional Medical Center)

      

144A 5.00% 12/1/40 #

      1,100,000        1,218,492  

Northampton County, Pennsylvania Industrial Development Authority Revenue

      

(Morningstar Senior Living)

      

5.00% 7/1/36

      2,000,000        2,023,920  

 

75

Table of Contents

Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Healthcare Revenue Bonds (continued)

      

Northampton County, Pennsylvania Industrial Development Authority Revenue

      

(Morningstar Senior Living)

      

  5.00% 11/1/49

      1,830,000      $       1,871,742  

Orange County, New York Funding Corporation Assisted Living Residence Revenue

      

6.50% 1/1/46

      3,700,000        3,708,251  

Palm Beach County, Florida Health Facilities Authority

      

(Sinai Residences Boca Raton Project)

      

Series A 7.25% 6/1/34

      285,000        304,371  

Series A 7.50% 6/1/49

      2,920,000        3,110,676  

Payne County, Oklahoma Economic Development Authority

      

(Epworth Living at the Ranch)

      

Series A 7.00% 11/1/51 ‡

      961,600        2,404  

Pennsylvania Economic Development Financing Authority

      

(Tapestry Moon Senior Housing Project)

      

Series 2018A 144A 6.75% 12/1/53 #

      9,495,000        9,200,845  

Prince George’s County, Maryland

      

(Collington Episcopal Life Care Community)

      

5.25% 4/1/47

      2,000,000        2,020,960  

Public Finance Authority, Wisconsin

      

(Bancroft Neurohealth Project)

      

Series A 144A 5.00% 6/1/36 #

      960,000        1,032,778  

Series A 144A 5.125% 6/1/48 #

      1,375,000        1,466,726  

Puerto Rico Industrial Tourist Educational Medical & Environmental Control Facilities Financing Authority

      

(Auxilio Mutuo)

      

Series A 6.00% 7/1/33

      5,630,000        5,778,013  

Rochester, Minnesota

      

(The Homestead at Rochester)

      

Series A 6.875% 12/1/48

      2,500,000        2,689,800  

Salem, Oregon Hospital Facility Authority Revenue

      

(Capital Manor)

      

6.00% 5/15/47

      1,500,000        1,568,220  

San Buenaventura, California Revenue

      

(Community Memorial Health System)

      

7.50% 12/1/41

      4,475,000        4,711,235  

 

76

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     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Healthcare Revenue Bonds (continued)

      

Seminole County, Florida Industrial Development Authority Revenue

      

(Legacy Pointe at UCF Project)

      

Series A 5.50% 11/15/49

      1,500,000      $           1,368,345  

Series A 5.75% 11/15/54

      6,000,000        5,538,300  

Shelby County, Tennessee Health Educational & Housing Facilities Board Revenue

      

(The Farms at Bailey Station Project)

      

5.75% 10/1/59

      3,670,000        3,463,783  

Southeastern Ohio Port Authority

      

(Memorial Health Systems)

      

  5.00% 12/1/43

      805,000        812,672  

  5.50% 12/1/43

      1,250,000        1,302,262  

St. Louis County, Missouri Industrial Development Authority

      

(Nazareth Living Center Project)

      

Series A 5.00% 8/15/35

      600,000        607,326  

Series A 5.125% 8/15/45

      1,800,000        1,809,720  

Suffolk County, New York Economic Development Corporation Revenue

      

(Peconic Landing Southland)

      

6.00% 12/1/40

      575,000        582,975  

Tarrant County, Texas Cultural Education Facilities Finance

      

(Buckingham Senior Living Community)

      

5.50% 11/15/45 ‡

      3,000,000        1,950,000  

(Buckner Senior Living - Ventana Project)

      

  6.75% 11/15/47

      1,850,000        1,998,407  

  6.75% 11/15/52

      3,300,000        3,562,812  

Tempe, Arizona Industrial Development Authority Revenue

      

(Friendship Village)

      

Series A 6.25% 12/1/46

      500,000        507,115  

(Mirabella at ASU Project)

      

Series A 144A 6.125% 10/1/47 #

      2,150,000        2,216,371  

Series A 144A 6.125% 10/1/52 #

      2,570,000        2,641,780  

University of North Carolina Board of Governors

      

5.00% 2/1/49

      21,855,000        34,740,271  

Washington State Housing Finance Commission

      

(Heron’s Key)

      

Series A 144A 7.00% 7/1/45 #

      1,000,000        1,077,690  

Series A 144A 7.00% 7/1/50 #

      3,625,000        3,890,640  

 

77

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Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Healthcare Revenue Bonds (continued)

      

Westminster, Maryland

      

(Lutheran Village Millers Grant)

      

  6.00% 7/1/34

      800,000      $ 837,152  

Series A 5.00% 7/1/24

      1,185,000        1,230,089  

Series A 6.125% 7/1/39

      750,000        782,738  

Series A 6.25% 7/1/44

      2,500,000        2,610,150  

Wisconsin Health & Educational Facilities Authority

      

(Covenant Communities Project)

      

Series B 5.00% 7/1/48

      1,000,000        970,680  

Series B 5.00% 7/1/53

      945,000        908,145  

Series C 7.00% 7/1/43

      900,000        807,858  

Series C 7.50% 7/1/53

      1,000,000        907,030  

(St. Camillus Health System)

      

Series A 5.00% 11/1/46

      2,000,000        2,086,520  

Series A 5.00% 11/1/54

      2,500,000        2,583,375  

Wisconsin Public Finance Authority

      

(Rose Villa Project)

      

Series A 144A 5.75% 11/15/44 #

      2,000,000        2,136,420  
     

 

 

  
              342,260,056  
     

 

 

  

Housing Revenue Bond — 0.06%

      

Independent Cities Finance Authority, California

      

Series A 5.25% 5/15/44

      750,000        815,272  
     

 

 

  
        815,272  
     

 

 

  

Lease Revenue Bonds — 3.63%

      

California Municipal Finance Authority Revenue

      

(Goodwill Industry Sacramento Valley)

      

5.25% 1/1/45

      1,295,000        1,065,656  

(Goodwill Industry Sacramento Valley and

      

Northern Nevada Project)

      

Series A 144A 6.625% 1/1/32 #

      500,000        492,345  

Series A 144A 6.875% 1/1/42 #

      1,500,000        1,464,570  

California Statewide Communities Development Authority Revenue

      

(Lancer Plaza Project)

      

5.875% 11/1/43

      1,875,000        1,971,563  

Industrial Development Authority of Phoenix, Arizona

      

  5.125% 2/1/34

      1,000,000        1,017,400  

  5.375% 2/1/41

      1,300,000        1,319,903  

Metropolitan Pier & Exposition Authority, Illinois

      

(McCormick Place Expansion Project)

      

Series A 5.00% 6/15/50

      4,135,000        4,660,930  

 

78

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     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

Lease Revenue Bonds (continued)

      

Metropolitan Pier & Exposition Authority, Illinois

      

(McCormick Place Expansion Project)

      

Series A 5.00% 6/15/57

      3,975,000      $ 4,370,632  

New Jersey Economic Development Authority

      

Special Facility Revenue

      

Series WW 5.25% 6/15/30

      5,000,000        5,673,000  

New Jersey Transportation Trust Fund Authority

      

(Federal Highway Reimbursement Revenue)

      

Series A 5.00% 6/15/31

      5,450,000        6,268,753  

(Transportation Program)

      

Series AA 5.00% 6/15/25

      1,000,000        1,155,300  

Series AA 5.00% 6/15/44

      2,900,000        3,127,360  

New York Liberty Development Revenue

      

(Class 3-3 World Trade Center Project)

      

144A 7.25% 11/15/44 #

      8,000,000        8,667,600  

Public Finance Authority, Wisconsin Airport Facilities Revenue

      

(AFCO Investors II Portfolio)

      

144A 5.75% 10/1/31 (AMT)#

      3,775,000        3,914,449  

(Senior Obligation Group)

      

Series B 5.00% 7/1/42 (AMT)

      2,625,000        2,713,751  

Wise County, Texas

      

(Parker County Junior College District)

      

8.00% 8/15/34

      1,000,000        1,033,670  
     

 

 

  
        48,916,882  
     

 

 

  

Local General Obligation Bonds — 1.65%

      

Chicago, Illinois

      

Series 2005D 5.50% 1/1/37

      2,280,000        2,484,767  

Series 2005D 5.50% 1/1/40

      3,000,000        3,255,420  

Series 2007E 5.50% 1/1/42

      1,900,000        2,057,586  

Series 2007F 5.50% 1/1/42

      1,250,000        1,353,675  

Series A 5.50% 1/1/49

      770,000        873,857  

Series C 5.00% 1/1/26

      500,000        562,200  

Chicago, Illinois Board of Education

      

Series A 144A 7.00% 12/1/46 #

      2,500,000        3,146,850  

Series G 5.00% 12/1/44

      2,445,000        2,665,612  

Series H 5.00% 12/1/46

      4,225,000        4,596,209  

Harris County, Texas Humble Independent School District

      

Series A 4.00% 2/15/33

      1,000,000        1,248,070  
     

 

 

  
        22,244,246  
     

 

 

  

 

79

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Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

Pre-Refunded/Escrowed to Maturity Bonds — 3.11%

      

California Municipal Finance Authority Revenue

      

(Azusa Pacific University Project)

      

Series B 144A 7.75% 4/1/31-21 #, §

      750,000      $ 782,925  

California Statewide Communities Development Authority Revenue

      

(California Baptist University Project)

      

7.50% 11/1/41-21 §

      1,000,000        1,083,460  

Central Texas Regional Mobility Authority Revenue

      

Senior Lien 6.00% 1/1/41-21 §

      1,890,000        1,926,458  

Subordinate Lien 6.75% 1/1/41-21 §

      1,000,000        1,021,390  

Clifton, Texas Higher Education Finance Corporation Revenue

      

(Idea Public Schools)

      

5.75% 8/15/41-21 §

      1,000,000        1,051,610  

(Uplift Education)

      

Series A 6.25% 12/1/45-20 §

      1,000,000        1,014,810  

District of Columbia Revenue

      

(Center of Strategic & International Studies)

      

6.625% 3/1/41-21 §

      2,235,000        2,305,291  

(KIPP Charter School)

      

6.00% 7/1/48-23 §

      1,450,000        1,682,768  

Foothill-Eastern Transportation Corridor Agency, California

      

Series A 6.00% 1/15/49-24 §

      7,690,000        9,175,554  

Illinois Railsplitter Tobacco Settlement Authority

      

6.00% 6/1/28-21 §

      1,455,000        1,518,307  

Louisiana Public Facilities Authority Revenue

      

(Ochsner Clinic Foundation Project)

      

6.50% 5/15/37-21 §

      1,705,000        1,779,901  

Martin County, Florida Health Facilities Authority Revenue

      

(Martin Memorial Medical Center)

      

5.50% 11/15/42-21 §

      1,000,000        1,063,380  

Nampa Development Corporation, Idaho Revenue 144A

      

5.00% 9/1/31-24 #, §

      2,940,000        3,546,787  

New York State

      

Series A 5.25% 2/15/24-21 §

      2,000,000        2,046,420  

North Texas Education Finance Revenue

      

(Uplift Education)

      

Series A 5.25% 12/1/47-22 §

      2,100,000        2,270,226  

Onondaga, New York Civic Development Revenue

      

(St. Joseph’s Hospital Health Center Project)

      

4.50% 7/1/32-22 §

      1,000,000        1,075,460  

 

80

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     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

Pre-Refunded/Escrowed to Maturity Bonds (continued)

      

Philadelphia, Pennsylvania Authority for Industrial Development Revenue

      

(New Foundation Charter School Project)

      

6.625% 12/15/41-22 §

      1,000,000      $ 1,140,770  

Southwestern Illinois Development Authority Revenue

      

(Memorial Group)

      

7.125% 11/1/30-23 §

      1,420,000        1,718,427  

7.125% 11/1/43-23 §

      2,500,000        3,025,400  

Travis County, Texas Health Facilities Development Corporation Revenue

      

(Westminster Manor Project)

      

7.125% 11/1/40-20 §

      1,000,000        1,011,080  

University of Arizona Medical Center Hospital Revenue

      

6.00% 7/1/39-21 §

      1,500,000        1,572,420  
     

 

 

  
        41,812,844  
     

 

 

  

Resource Recovery Revenue Bonds — 0.75%

      

Blythe Township, Pennsylvania Solid Waste Authority Revenue

      

7.75% 12/1/37 (AMT)

      3,000,000        3,313,740  

Orange County, Florida Industrial Development Authority Revenue

      

(Anuvia Florida LLC Project)

      

Series A 144A 4.00% 7/1/48 (AMT)#

      2,665,000        199,875  

Union County, New Jersey Improvement Authority

      

(Aries Linden, LLC Project) 144A

      

6.75% 12/1/41 (AMT)#

      7,000,000        6,586,510  
     

 

 

  
        10,100,125  
     

 

 

  

Special Tax Revenue Bonds — 9.08%

      

Celebration Pointe, Florida Community Development District

      

5.125% 5/1/45

      1,915,000        1,978,406  

Cherry Hill, Virginia Community Development Authority

      

(Potomac Shores Project)

      

144A 5.15% 3/1/35 #

      1,000,000        1,018,050  

144A 5.40% 3/1/45 #

      2,000,000        2,031,860  

Conley Road Transportation Development District, Missouri

      

5.375% 5/1/47

      5,200,000        5,224,024  

 

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Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

Special Tax Revenue Bonds (continued)

      

Dutchess County, New York Local Development Corporation Revenue

      

(Anderson Center Services Inc. Project)

      

6.00% 10/1/30

      1,600,000      $ 1,602,480  

Fountain Urban Renewal Authority, Colorado

      

(Improvement - South Academy Highland)

      

Series A 5.50% 11/1/44

      3,750,000        3,844,912  

GDB Debt Recovery Authority of Puerto Rico

      

(Taxable)

      

7.50% 8/20/40

      8,000,000        5,490,000  

Glen Cove, New York Local Economic Assistance

      

(Garvies Point Public Improvement Project)

      

Series A 5.00% 1/1/56

      2,000,000        2,064,440  

Hickory Chase Community Authority Revenue, Ohio

      

(Hickory Chase Project)

      

Senior Series A 144A 5.00% 12/1/40 #

      1,410,000        1,431,263  

Juban Crossing Economic Development District, Louisiana

      

(General Infrastructure Projects)

      

Series C 144A 7.00% 9/15/44 #

      3,215,000        2,789,077  

(Road Projects)

      

Series A 144A 7.00% 9/15/44 #

      2,050,000        1,778,416  

Kansas City, Missouri Land Clearance Redevelopment Authority Revenue

      

(Convention Centre Hotel Project - TIF Financing)

      

Series B 144A 5.00% 2/1/40 #

      935,000        980,431  

Series B 144A 5.00% 2/1/50 #

      1,825,000        1,901,778  

Midtown Miami, Florida Community Development District

      

(Parking Garage Project)

      

Series A 5.00% 5/1/37

      500,000        516,575  

Mobile, Alabama Improvement District

      

(McGowin Park Project)

      

Series A 5.25% 8/1/30

      1,000,000        1,016,200  

Series A 5.50% 8/1/35

      1,300,000        1,312,064  

Mosaic District, Virginia Community Development Authority Revenue

      

Series A 6.875% 3/1/36

      1,500,000        1,523,250  

New York City, New York Industrial Development Agency

      

(Pilot - Queens Baseball Stadium)

      

5.00% 1/1/22 (AMBAC)

      1,000,000        1,000,210  

(Yankee Stadium)

      

7.00% 3/1/49 (AGC)

      1,000,000        1,005,540  

 

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     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

Special Tax Revenue Bonds (continued)

      

Northampton County, Pennsylvania Industrial Development Authority

      

(Route 33 Project)

      

7.00% 7/1/32

      2,260,000      $ 2,432,687  

Prairie Center Metropolitan District No 3, Colorado

      

Series A 144A 5.00% 12/15/41 #

      2,000,000        2,040,920  

Public Finance Authority Revenue, Wisconsin

      

(American Dream @ Meadowlands Project)

     

144A 7.00% 12/1/50 #

      5,065,000        4,403,156  

Puerto Rico Sales Tax Financing Revenue

      

(Restructured)

      

Series A-1 4.75% 7/1/53

      36,970,000        38,856,949  

Series A-1 5.00% 7/1/58

      15,610,000        16,666,797  

Series A-1 5.47% 7/1/46 ^

      19,225,000        5,515,076  

Series A-2 4.784% 7/1/58

      3,301,000        3,476,976  

Richmond Heights, Missouri Tax Increment & Transaction Sales Tax Revenue Improvement

      

(Francis Place Redevelopment Project)

      

5.625% 11/1/25

      955,000        955,115  

St. Louis County, Missouri Industrial Development Authority

      

(Manchester Ballas Community)

      

Series A 144A 5.00% 9/1/38 #

      1,050,000        1,020,054  

Series A 144A 5.25% 9/1/45 #

      3,540,000        3,406,577  

St. Louis, Missouri Industrial Development Authority Tax Increment Revenue Improvement

      

(Grand Center Redevelopment Project)

      

6.375% 12/1/25

      675,000        675,513  

Wyandotte County, Kansas City, Kansas Unified Government Special Obligation Revenue

      

(Sales Tax Vacation Village Project)

      

Series A 6.00% 9/1/35

      4,690,000        4,244,638  
     

 

 

  
        122,203,434  
     

 

 

  

State General Obligation Bonds — 7.84%

      

California State

      

Various Purposes

      

(Bid Group A)

      

5.00% 10/1/28

      5,000,000        6,676,150  

(Bid Group B)

      

5.00% 8/1/27

      5,000,000        6,301,750  

Commonwealth of Massachusetts

      

Series B 5.00% 1/1/32

      5,000,000        6,415,400  

 

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Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

State General Obligation Bonds (continued)

      

Commonwealth of Puerto Rico

      

Series A 5.25% 7/1/31 ‡

      6,980,000      $ 4,981,975  

Series A 5.375% 7/1/33 ‡

      900,000        635,625  

Series A 6.00% 7/1/38 ‡

      4,520,000        3,248,750  

Series A 8.00% 7/1/35 ‡

      9,140,000        5,586,825  

(Public Improvement)

      

Series A 5.00% 7/1/41 ‡

      4,525,000        2,833,781  

Series A 5.125% 7/1/37 ‡

      3,225,000        2,096,250  

Series A 5.25% 7/1/30 ‡

      1,955,000        1,395,381  

Series A 5.50% 7/1/39 ‡

      165,000        109,313  

Series C 6.00% 7/1/39 ‡

      9,486,000        6,675,773  

Series D 5.75% 7/1/41 ‡

      11,750,000        7,740,312  

Illinois State

      

 5.00% 1/1/28

      1,190,000        1,322,138  

 5.00% 5/1/36

      1,710,000        1,805,486  

 5.00% 11/1/36

      2,245,000        2,444,176  

 5.00% 2/1/39

      2,180,000        2,285,338  

 5.125% 12/1/29

      1,310,000        1,497,395  

 5.50% 5/1/39

      6,000,000        7,016,760  

Series A 5.00% 10/1/30

      2,000,000        2,286,180  

Series A 5.00% 12/1/34

      2,100,000        2,330,601  

Series A 5.00% 4/1/38

      2,805,000        2,918,266  

Series B 4.00% 11/1/35

      2,000,000        2,071,780  

Series D 5.00% 11/1/28

      4,700,000        5,279,181  

Minnesota State

      

Series A 5.00% 8/1/30

      5,000,000        6,603,600  

Ohio State

      

(Infrastructure Improvement)

      

Series A 5.00% 9/1/32

      5,000,000        6,497,150  

Washington State

      

(Various Purpose)

      

Series C 5.00% 2/1/28

      5,000,000        6,561,500  
     

 

 

  
        105,616,836  
     

 

 

  

Transportation Revenue Bonds — 2.18%

      

Dallas, Texas Fort Worth International Airport

      

Series B 5.00% 11/1/33

      5,000,000        6,617,200  

Denver, Colorado Airport System Revenue

      

Series A 5.00% 11/15/21 (AMT)

      55,000        57,998  

Houston, Texas Airport System Revenue

      

Subordinate Lien

      

Series A 5.00% 7/1/25 (AMT)

      1,000,000        1,033,580  

 

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     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

Transportation Revenue Bonds (continued)

      

Kentucky Public Transportation Infrastructure Authority

      

(1st Tier - Downtown Crossing)

      

Series A 5.75% 7/1/49

      1,800,000      $ 1,926,702  

Series A 6.00% 7/1/53

      1,290,000        1,385,847  

Long Beach, California Marina Revenue

      

5.00% 5/15/40

      1,000,000        1,086,960  

Phoenix, Arizona Civic Improvement

      

(Junior Lien)

      

Series A 5.00% 7/1/40

      30,000        34,317  

Port of Beaumont Navigation District of Jefferson County, Texas

      

(Jefferson Gulf Coast Energy Project)

      

Series A 144A 4.00% 1/1/50 (AMT)#

      3,875,000        3,882,479  

Riverside County, California Transportation Senior Lien

      

Series A 5.75% 6/1/48

      1,000,000        1,089,420  

South Jersey Port, New Jersey

      

(Subordinated Marine Terminal Revenue)

      

Series A 5.00% 1/1/49

      1,110,000        1,260,993  

Series B 5.00% 1/1/48 (AMT)

      2,000,000        2,179,860  

Texas Private Activity Bond Surface Transportation Corporate Senior Lien

      

(NTE Mobility Partners Segments 3 LLC Segment 3C Project)

      

5.00% 6/30/58 (AMT)

      1,500,000        1,761,600  

(NTE Mobility)

      

6.75% 6/30/43 (AMT)

      1,905,000        2,172,938  

7.00% 12/31/38 (AMT)

      1,335,000        1,534,556  

Virginia Small Business Financing Authority

      

(Transform 66 P3 Project)

      

5.00% 12/31/56 (AMT)

      2,975,000        3,347,589  
     

 

 

  
        29,372,039  
     

 

 

  

Water & Sewer Revenue Bonds — 2.90%

      

California State Department of Water Resources

      

Series BB 5.00% 12/1/35

      2,000,000        2,737,360  

Chicago, Illinois Waterworks Revenue

      

(2nd Lien)

      

5.00% 11/1/26

      180,000        215,682  

5.00% 11/1/28

      30,000        36,103  

Dominion, Colorado Water & Sanitation District Revenue

      

6.00% 12/1/46

      3,920,000        4,093,695  

 

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Schedules of investments

Delaware National High-Yield Municipal Bond Fund

 

     Principal amount°                  Value (US $)  

Municipal Bonds (continued)

                  

Water & Sewer Revenue Bonds (continued)

      

Jefferson County, Alabama Sewer Revenue

      

(Senior Lien-Warrants)

      

Series A 5.50% 10/1/53 (AGM)

      2,500,000      $ 2,791,025  

(Sub Lien-Warrants)

      

Series D 6.50% 10/1/53

      14,000,000        16,330,300  

Series D 7.00% 10/1/51

      5,000,000        5,911,000  

Texas Water Development Board

      

(Master Trust)

      

Series B 5.00% 4/15/31

      5,240,000        6,930,424  
     

 

 

  
        39,045,589  
     

 

 

  

Total Municipal Bonds (cost $1,259,502,446)

         1,312,478,349  
     

 

 

  
     

Short-Term Investments — 1.44%

                  

Variable Rate Demand Notes — 1.44%¤

      

Mississippi Business Finance Corporation Gulf Opportunity Zone Industrial Development Revenue

      

(Chevron U.S.A. Inc. Project)

      

Series B 0.03% 12/1/30

      600,000        600,000  

Series B 0.03% 11/1/35

      4,450,000        4,450,000  

Series G 0.03% 11/1/35

      1,600,000        1,600,000  

Series K 0.03% 11/1/35

      650,000        650,000  

Series L 0.03% 11/1/35

      1,000,000        1,000,000  

New York City, New York Water Finance Authority Water & Sewer System Revenue

      

Series D-22 0.02% 6/15/43 (SPA - JPMorgan Chase Bank N.A.)

      4,400,000        4,400,000  

Philadelphia, Pennsylvania Hospitals & Higher Education Facilities Authority

      

(The Children’s Hospital of Philadelphia Project)

      

Series B

      

 0.01% 7/1/41 (SPA - Bank Of America N.A.)

      6,700,000        6,700,000  
     

 

 

  

Total Short-Term Investments (cost $19,400,000)

         19,400,000  
     

 

 

  

Total Value of Securities — 98.90%
(cost $1,278,902,446)

       $ 1,331,878,349  
     

 

 

  

 

°

Principal amount shown is stated in USD unless noted that the security is denominated in another currency.

 

#

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $327,662,966, which represents 24.33% of the Fund’s net assets. See Note 9 in “Notes to financial statements.”

 

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=

The value of this security was determined using significant unobservable inputs and is reported as a Level 3 security in the disclosure table located in Note 3 in “Notes to financial statements.”

 

^

Zero-coupon security. The rate shown is the effective yield at the time of purchase.

 

‡

Non-income producing security. Security is currently in default.

 

•

Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at August 31, 2020. For securities based on a published reference rate and spread, the reference rate and spread are indicated in their description above. The reference rate descriptions (i.e. LIBOR03M, LIBOR06M, etc.) used in this report are identical for different securities, but the underlying reference rates may differ due to the timing of the reset period. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their description above.

 

§

Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 9 in “Notes to financial statements.”

 

¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of August 31, 2020.

Summary of abbreviations:

AGC – Insured by Assured Guaranty Corporation

AGM – Insured by Assured Guaranty Municipal Corporation

AMBAC – Insured by AMBAC Assurance Corporation

AMT – Subject to Alternative Minimum Tax

ICE – Intercontinental Exchange, Inc.

KIPP – Knowledge is Power Program

L.P. – Limited Partnership

LIBOR – London interbank offered rate

LIBOR03M – ICE LIBOR USD 3 Month

LIBOR06M – ICE LIBOR USD 6 Month

LLC – Limited Liability Corporation

N.A. – National Association

SPA – Stand-by Purchase Agreement

USD – US Dollar

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of assets and liabilities

    August 31, 2020

 

     Delaware      Delaware      Delaware  
     Tax-Free      Tax-Free USA      National High-Yield  
     USA Fund      Intermediate Fund      Municipal Bond Fund  

Assets:

         

Investments, at value*

    $ 619,473,991      $ 566,791,750      $ 1,331,878,349  

Cash

      5,877,768        582,942        3,017,000  

Receivable for securities sold

      —        3,683,000        —  

Interest receivable

      6,348,771        5,957,428        14,001,232  

Receivable for fund shares sold

      1,224,940        1,412,399        2,111,384  
  

 

 

     

 

 

     

 

 

  

Total Assets

      632,925,470        578,427,519        1,351,007,965  
  

 

 

     

 

 

     

 

 

  

Liabilities:

         

Payable for securities purchased

      6,396,580        5,386,126        —  

Distribution payable

      438,663        361,779        1,107,736  

Payable for fund shares redeemed

      379,093        627,054        2,063,058  

Investment management fees payable to affiliates

      217,881        165,603        551,144  

Distribution fees payable to affiliates

      108,914        23,756        98,570  

Other accrued expenses

      74,098        69,405        180,782  

Dividend disbursing and transfer agent fees and expenses payable to non-affiliates

      47,538        56,007        224,541  

Dividend disbursing and transfer agent fees and expenses payable to affiliates

      4,853        4,486        10,610  

Trustees’ fees and expenses payable to affiliates

      4,418        4,171        9,866  

Accounting and administration expenses payable to affiliates

      2,125        1,989        4,244  

Legal fees payable to affiliates

      1,059        1,000        2,365  
  

 

 

     

 

 

     

 

 

  

Total Liabilities

      7,675,222        6,701,376        4,252,916  
  

 

 

     

 

 

     

 

 

  

Total Net Assets

    $ 625,250,248      $ 571,726,143      $ 1,346,755,049  
  

 

 

     

 

 

     

 

 

  

Net Assets Consist of:

         

Paid-in capital

    $ 579,151,078      $ 534,506,859      $ 1,291,586,038  

Total distributable earnings (loss)

      46,099,170        37,219,284        55,169,011  
  

 

 

     

 

 

     

 

 

  

Total Net Assets

    $     625,250,248      $     571,726,143      $     1,346,755,049  
  

 

 

     

 

 

     

 

 

  

 

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Delaware

Tax-Free

USA Fund

    

Delaware

Tax-Free USA

Intermediate Fund

    

Delaware

National High-Yield

Municipal Bond Fund

  

Net Asset Value

       

Class A:

       

Net assets

    $     478,671,126     $     106,135,669     $ 182,214,447  

Shares of beneficial interest outstanding, unlimited authorization, no par

      40,081,462       8,656,126       16,337,369  

Net asset value per share

    $ 11.94     $ 12.26     $ 11.15  

Sales charge

      4.50 %      2.75 %      4.50 % 

Offering price per share, equal to net asset value per share / (1 - sales charge)

    $ 12.50     $ 12.61     $ 11.68  

Class C:

       

Net assets

    $ 10,778,023     $ 11,863,804     $ 68,992,718  

Shares of beneficial interest outstanding, unlimited authorization, no par

      902,340       968,222       6,161,571  

Net asset value per share

    $ 11.94     $ 12.25     $ 11.20  

Institutional Class:

       

Net assets

    $ 135,801,099     $ 453,726,670     $ 1,095,547,884  

Shares of beneficial interest outstanding, unlimited authorization, no par

      11,286,101       36,651,063       97,330,344  

Net asset value per share

    $ 12.03     $ 12.38     $ 11.26  

                                 

       

*Investments, at cost

    $ 576,391,612     $ 527,828,126     $ 1,278,902,446  

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of operations    Year ended August 31, 2020

 

    

Delaware

Tax-Free

USA Fund

    

Delaware

Tax-Free USA

Intermediate Fund

    

Delaware

National High-Yield

Municipal Bond

Fund

  

Investment Income:

       

Interest

    $     24,482,597     $ 19,306,347     $ 67,266,043  

Expenses:

       

Management fees

      3,275,489       2,727,019       7,004,860  

Distribution expenses - Class A

      1,122,683       276,522       492,324  

Distribution expenses - Class C

      135,167       182,819       826,809  

Dividend disbursing and transfer agent fees and expenses

      469,762       466,136       1,150,553  

Accounting and administration expenses

      139,050       129,686       268,583  

Registration fees

      86,088       74,622       138,344  

Legal fees

      49,282       44,491       126,058  

Audit and tax fees

      45,660       45,660       45,660  

Reports and statements to shareholders expenses

      37,166       32,562       73,126  

Trustees’ fees and expenses

      34,919       31,622       80,379  

Custodian fees

      21,935       15,766       172,350  

Other

      45,045       47,742       94,517  
  

 

 

    

 

 

    

 

 

  
     5,462,246       4,074,647       10,473,563  

Less expenses waived

      (812,197 )      (871,986 )      (809,915 ) 

Less waived distribution expenses - Class A

      —       (110,609 )      —  

Less expenses paid indirectly

      (3,260 )      (4,112 )      (829 ) 
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      4,646,789       3,087,940       9,662,819  
  

 

 

    

 

 

    

 

 

  

Net Investment Income

      19,835,808       16,218,407       57,603,224  
  

 

 

    

 

 

    

 

 

  

Net Realized and Unrealized Gain (Loss):

       

Net realized gain on investments

      3,980,350       126,778       13,180,732  

Net change in unrealized appreciation (depreciation) of investments

      (6,778,517 )      (1,616,337 )      (65,116,746 ) 
  

 

 

    

 

 

    

 

 

  

Net Realized and Unrealized Loss

      (2,798,167 )      (1,489,559 )      (51,936,014 ) 
  

 

 

    

 

 

    

 

 

  

Net Increase in Net Assets Resulting from Operations

    $ 17,037,641     $ 14,728,848     $ 5,667,210  
  

 

 

    

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

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Table of Contents

Statements of changes in net assets

Delaware Tax-Free USA Fund

 

    Year ended  
    8/31/20     8/31/19  

Increase (Decrease) in Net Assets from Operations:

    

Net investment income

   $ 19,835,808     $ 19,754,538  

Net realized gain

     3,980,350       1,048,183  

Net change in unrealized appreciation (depreciation)

     (6,778,517 )      23,917,474  
 

 

 

    

 

 

  

Net increase in net assets resulting from operations

     17,037,641       44,720,195  
 

 

 

    

 

 

  

Dividends and Distributions to Shareholders from:

    

Distributable earnings:

    

Class A

     (16,057,427 )      (16,273,524 ) 

Class C

     (377,485 )      (472,923 ) 

Institutional Class

     (5,191,254 )      (3,153,841 ) 
 

 

 

    

 

 

  
    (21,626,166 )      (19,900,288 ) 
 

 

 

    

 

 

  

Capital Share Transactions:

    

Proceeds from shares sold:

    

Class A

     94,406,974       109,025,107  

Class C

     2,492,529       2,698,828  

Institutional Class

     65,805,952       93,831,044  

Net asset value of shares issued upon reinvestment of dividends and distributions:

    

Class A

     14,383,519       14,655,203  

Class C

     329,893       404,200  

Institutional Class

     4,750,966       2,682,248  
 

 

 

    

 

 

  
            182,169,833               223,296,630  
 

 

 

    

 

 

  

 

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Statements of changes in net assets

Delaware Tax-Free USA Fund

 

    Year ended  
    8/31/20     8/31/19  

Capital Share Transactions (continued):

    

Cost of shares redeemed:

    

Class A

   $ (99,923,072 )    $ (152,307,083 ) 

Class C

     (7,874,648 )      (6,533,225 ) 

Institutional Class

     (66,849,145 )      (44,281,845 ) 
 

 

 

    

 

 

  
    (174,646,865 )      (203,122,153 ) 
 

 

 

    

 

 

  

Increase in net assets derived from capital share transactions

     7,522,968       20,174,477  
 

 

 

    

 

 

  

Net Increase in Net Assets

     2,934,443       44,994,384  

Net Assets:

    

Beginning of year

             622,315,805               577,321,421  
 

 

 

    

 

 

  

End of year

   $ 625,250,248     $ 622,315,805  
 

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

92

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Statements of changes in net assets

Delaware Tax-Free USA Intermediate Fund

 

     Year ended  
     8/31/20     8/31/19  

Increase (Decrease) in Net Assets from Operations:

     

Net investment income

    $ 16,218,407     $ 16,667,720  

Net realized gain

      126,778       1,077,571  

Net change in unrealized appreciation (depreciation)

      (1,616,337 )      21,366,521  
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      14,728,848       39,111,812  
  

 

 

    

 

 

  

Dividends and Distributions to Shareholders from:

     

Distributable earnings:

     

Class A

      (3,184,081 )      (3,886,242 ) 

Class C

      (370,025 )      (565,999 ) 

Institutional Class

      (12,664,301 )      (12,215,479 ) 
  

 

 

    

 

 

  
     (16,218,407 )      (16,667,720 ) 
  

 

 

    

 

 

  

Capital Share Transactions:

     

Proceeds from shares sold:

     

Class A

      30,135,038       27,623,937  

Class C

      1,791,499       3,447,342  

Institutional Class

      145,582,678               160,249,995  

Net asset value of shares issued upon reinvestment of dividends and distributions:

     

Class A

      2,926,566       3,607,123  

Class C

      333,101       508,002  

Institutional Class

              10,253,302       9,563,643  
  

 

 

    

 

 

  
     191,022,184       205,000,042  
  

 

 

    

 

 

  

 

93

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Statements of changes in net assets

Delaware Tax-Free USA Intermediate Fund

 

    Year ended  
    8/31/20     8/31/19  

Capital Share Transactions (continued):

    

Cost of shares redeemed:

    

Class A

   $ (50,173,924 )    $ (49,240,907 ) 

Class C

     (13,003,690 )      (10,079,399 ) 

Institutional Class

     (101,023,651 )      (163,828,572 ) 
 

 

 

    

 

 

  
    (164,201,265 )      (223,148,878 ) 
 

 

 

    

 

 

  

Increase (decrease) in net assets derived from capital share transactions

     26,820,919       (18,148,836 ) 
 

 

 

    

 

 

  

Net Increase in Net Assets

     25,331,360       4,295,256  

Net Assets:

    

Beginning of year

             546,394,783               542,099,527  
 

 

 

    

 

 

  

End of year

   $ 571,726,143     $ 546,394,783  
 

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

94

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Statements of changes in net assets

Delaware National High-Yield Municipal Bond Fund

 

    Year ended  
    8/31/20     8/31/19  

Increase (Decrease) in Net Assets from Operations:

    

Net investment income

   $ 57,603,224     $ 57,113,679  

Net realized gain

     13,180,732       3,014,071  

Net change in unrealized appreciation (depreciation)

     (65,116,746 )      55,266,412  
 

 

 

    

 

 

  

Net increase in net assets resulting from operations

     5,667,210       115,394,162  
 

 

 

    

 

 

  

Dividends and Distributions to Shareholders from:

    

Distributable earnings:

    

Class A

     (7,762,606 )      (8,113,223 ) 

Class C

     (2,642,753 )      (3,047,818 ) 

Institutional Class

     (46,586,746 )      (45,407,727 ) 
 

 

 

    

 

 

  
    (56,992,105 )      (56,568,768 ) 
 

 

 

    

 

 

  

Capital Share Transactions:

    

Proceeds from shares sold:

    

Class A

     64,182,912       54,097,913  

Class C

     10,269,059       14,629,646  

Institutional Class

     340,902,541       377,244,099  

Net asset value of shares issued upon reinvestment of dividends and distributions:

    

Class A

     7,046,701       7,392,441  

Class C

     2,408,413       2,752,227  

Institutional Class

     37,810,611       37,356,231  
 

 

 

    

 

 

  
            462,620,237               493,472,557  
 

 

 

    

 

 

  

 

95

Table of Contents

Statements of changes in net assets

Delaware National High-Yield Municipal Bond Fund

 

    Year ended  
    8/31/20     8/31/19  

Capital Share Transactions (continued):

    

Cost of shares redeemed:

    

Class A

   $ (88,787,279 )    $ (61,870,843 ) 

Class C

     (31,832,862 )      (22,089,760 ) 

Institutional Class

     (385,626,313 )      (336,446,245 ) 
 

 

 

    

 

 

  
    (506,246,454 )      (420,406,848 ) 
 

 

 

    

 

 

  

Increase (decrease) in net assets derived from capital share transactions

     (43,626,217 )      73,065,709  
 

 

 

    

 

 

  

Net Increase (Decrease) in Net Assets

     (94,951,112 )      131,891,103  

Net Assets:

    

Beginning of year

         1,441,706,161           1,309,815,058  
 

 

 

    

 

 

  

End of year

   $ 1,346,755,049     $ 1,441,706,161  
 

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

96

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This page intentionally left blank.

Table of Contents

Financial highlights

Delaware Tax-Free USA Fund Class A

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return3

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Amount is less than $0.005 per share.

 

3 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

98

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Year ended

  
    

 

 

  
       8/31/20        8/31/19        8/31/18        8/31/17        8/31/16  

 

  
     $ 11.96        $ 11.44        $ 11.70        $ 12.22        $ 11.83  
       0.38          0.41          0.42          0.43          0.42  
       0.01          0.52          (0.26 )         (0.40 )         0.39  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       0.39          0.93          0.16          0.03          0.81  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.38 )         (0.41 )         (0.42 )         (0.43 )         (0.42 ) 
       (0.03 )         — 2          —          (0.12 )         —  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.41 )         (0.41 )         (0.42 )         (0.55 )         (0.42 ) 
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     $ 11.94        $ 11.96        $ 11.44        $ 11.70        $ 12.22  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       3.44%          8.35%          1.44%          0.41%          7.00%  
     $ 478,671        $ 472,153        $ 481,117        $ 415,314        $ 493,408  
       0.81%          0.81%          0.81%          0.81%          0.81%  
       0.95%          0.95%          0.96%          0.96%          0.95%  
       3.24%          3.55%          3.66%          3.71%          3.52%  
       3.10%          3.41%          3.51%          3.56%          3.38%  
        

 

 77%

 

  

 

       

 

 43%

 

  

 

       

 

 42%

 

  

 

       

 

 33%

 

  

 

       

 

 33%

 

  

 

 

99

Table of Contents

Financial highlights

Delaware Tax-Free USA Fund Class C

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return3

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Amount is less than $0.005 per share.

 

3 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

100

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       Year ended  
    

 

 

  
       8/31/20        8/31/19        8/31/18        8/31/17        8/31/16  

 

  
     $ 11.96        $ 11.44        $ 11.70        $ 12.22        $ 11.83  
       0.29          0.32          0.34          0.34          0.33  
       0.01          0.52          (0.26 )         (0.40 )         0.39  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       0.30          0.84          0.08          (0.06 )         0.72  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.29 )         (0.32 )         (0.34 )         (0.34 )         (0.33 ) 
       (0.03 )         — 2          —          (0.12 )         —  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.32 )         (0.32 )         (0.34 )         (0.46 )         (0.33 ) 
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     $ 11.94        $ 11.96        $ 11.44        $ 11.70        $ 12.22  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       2.66%          7.55%          0.68%          (0.35% )         6.19%  
     $ 10,778        $ 16,051        $ 18,808        $ 27,397        $ 31,545  
       1.56%          1.56%          1.56%          1.56%          1.56%  
       1.70%          1.70%          1.71%          1.71%          1.70%  
       2.49%          2.80%          2.91%          2.96%          2.77%  
       2.35%          2.66%          2.76%          2.81%          2.63%  
        

 

 77%

 

  

 

       

 

 43%

 

  

 

       

 

 42%

 

  

 

       

 

 33%

 

  

 

       

 

 33%

 

  

 

 

101

Table of Contents

Financial highlights

Delaware Tax-Free USA Fund Institutional Class

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return3

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Amount is less than $0.005 per share.

 

3 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

102

Table of Contents

    

    

 

       Year ended  
    

 

 

  
       8/31/20        8/31/19        8/31/18        8/31/17        8/31/16  

 

  
    

 

$

 

12.05

 

 

     

 

$

 

11.52

 

 

     

 

$

 

11.79

 

 

     

 

$

 

12.31

 

 

     

 

$

 

11.91

 

 

       0.41          0.44          0.45          0.46          0.46  
       0.01          0.53          (0.27 )         (0.40 )         0.40  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       0.42          0.97          0.18          0.06          0.86  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.41 )         (0.44 )         (0.45 )         (0.46 )         (0.46 ) 
       (0.03 )         — 2          —          (0.12 )         —  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.44 )         (0.44 )         (0.45 )         (0.58 )         (0.46 ) 
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     $ 12.03        $ 12.05        $ 11.52        $ 11.79        $ 12.31  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       3.70%          8.68%          1.61%          0.68%          7.32%  
     $ 135,801        $ 134,112        $ 77,396        $ 62,872        $ 45,696  
       0.56%          0.56%          0.56%          0.56%          0.56%  
       0.70%          0.70%          0.71%          0.71%          0.70%  
       3.49%          3.80%          3.91%          3.96%          3.77%  
       3.35%          3.66%          3.76%          3.81%          3.63%  
        

 

 77%

 

  

 

       

 

 43%

 

  

 

       

 

 42%

 

  

 

       

 

 33%

 

  

 

       

 

 33%

 

  

 

 

103

Table of Contents

Financial highlights

Delaware Tax-Free USA Intermediate Fund Class A

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return3

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Amount is less than $0.005 per share.

 

3 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects waivers by the manager and/or distributor. Performance would have been lower had the waivers not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

104

Table of Contents

    

    

 

       Year ended  
    

 

 

  
       8/31/20        8/31/19        8/31/18        8/31/17        8/31/16  

 

  

    

      $ 12.28        $ 11.76        $ 12.06        $ 12.38        $ 12.04  
       0.35          0.37          0.37          0.35          0.35  
       (0.02 )         0.52          (0.30 )         (0.32 )         0.34  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       0.33          0.89          0.07          0.03          0.69  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.35 )         (0.37 )         (0.37 )         (0.35 )         (0.35 ) 
       —          —          —          — 2          —  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.35 )         (0.37 )         (0.37 )         (0.35 )         (0.35 ) 
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     $ 12.26        $ 12.28        $ 11.76        $ 12.06        $ 12.38  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       2.76%          7.71%          0.57%          0.35%          5.79%  
     $ 106,135        $ 123,691        $ 136,653        $ 164,154        $ 188,034  
       0.65%          0.65%          0.71%          0.75%          0.75%  
       0.91%          0.91%          0.92%          0.93%          0.92%  
       2.87%          3.11%          3.10%          2.92%          2.84%  
       2.61%          2.85%          2.89%          2.74%          2.67%  
         27%          25%          32%          26%          35%  

 

105

Table of Contents

Financial highlights

Delaware Tax-Free USA Intermediate Fund Class C

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return3

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Amount is less than $0.005 per share.

 

3 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

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Year ended

  
    

 

 

  
       8/31/20        8/31/19        8/31/18        8/31/17        8/31/16  

 

  
     $ 12.27        $ 11.75        $ 12.05        $ 12.37        $ 12.03  
       0.24          0.27          0.27          0.25          0.24  
       (0.02 )         0.52          (0.30 )         (0.32 )         0.35  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       0.22          0.79          (0.03 )         (0.07 )         0.59  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.24 )         (0.27 )         (0.27 )         0.25          (0.25 ) 
       —          —          —          — 2          —  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.24 )         (0.27 )         (0.27 )         (0.25 )         (0.25 ) 
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     $ 12.25        $ 12.27        $ 11.75        $ 12.05        $ 12.37  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       1.89%          6.81%          (0.28% )         (0.50% )         4.90%  
     $ 11,864        $ 22,874        $ 28,002        $ 40,402        $ 49,515  
       1.50%          1.50%          1.56%          1.60%          1.60%  
       1.66%          1.66%          1.67%          1.68%          1.67%  
       2.02%          2.26%          2.25%          2.07%          1.99%  
       1.86%          2.10%          2.14%          1.99%          1.92%  
         27%          25%          32%          26%          35%  

 

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Financial highlights

Delaware Tax-Free USA Intermediate Fund Institutional Class

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return3

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

1

The average shares outstanding have been applied for per share information.

 

2

Amount is less than $0.005 per share.

 

3

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

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Year ended

  
    

 

 

  
       8/31/20        8/31/19        8/31/18        8/31/17        8/31/16  

 

  
     $ 12.40        $ 11.87        $ 12.17        $ 12.50        $ 12.16  
       0.37          0.39          0.39          0.37          0.37  
       (0.02 )         0.53          (0.30 )         (0.33 )         0.34  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       0.35          0.92          0.09          0.04          0.71  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.37 )         (0.39 )         (0.39 )         (0.37 )         (0.37 ) 
       —          —          —          — 2          —  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.37 )         (0.39 )         (0.39 )         (0.37 )         (0.37 ) 
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     $ 12.38        $ 12.40        $ 11.87        $ 12.17        $ 12.50  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       2.92%          7.92%          0.75%          0.44%          5.92%  
     $ 453,727        $ 399,830        $ 377,445        $ 369,443        $ 479,172  
       0.50%          0.50%          0.56%          0.60%          0.60%  
       0.66%          0.66%          0.67%          0.68%          0.67%  
       3.02%          3.26%          3.25%          3.07%          2.99%  
       2.86%          3.10%          3.14%          2.99%          2.92%  
         27%          25%          32%          26%          35%  

 

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Financial highlights

Delaware National High-Yield Municipal Bond Fund Class A

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

1

The average shares outstanding have been applied for per share information.

 

2

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

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Year ended

  
    

 

 

  
       8/31/20        8/31/19        8/31/18        8/31/17        8/31/16  

 

  
     $ 11.48        $ 11.00        $ 11.05        $ 11.42        $ 10.75  
       0.44          0.46          0.46          0.44          0.41  
       (0.33 )         0.48          (0.05 )         (0.37 )         0.67  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       0.11          0.94          0.41          0.07          1.08  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.44 )         (0.46 )         (0.46 )         (0.44 )         (0.41 ) 
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.44 )         (0.46 )         (0.46 )         (0.44 )         (0.41 ) 
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     $ 11.15        $ 11.48        $ 11.00        $ 11.05        $ 11.42  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       1.06%          8.81%          3.80%          0.72%          10.25%  
     $ 182,214        $ 208,549        $ 200,493        $ 190,211        $ 250,810  
       0.85%          0.85%          0.85%          0.85%          0.85%  
       0.91%          0.90%          0.91%          0.94%          0.94%  
       3.99%          4.22%          4.19%          4.02%          3.73%  
       3.93%          4.17%          4.13%          3.93%          3.64%  
        

 

 44%

 

  

 

       

 

 33%

 

  

 

       

 

 19%

 

  

 

       

 

 27%

 

  

 

       

 

 13%

 

  

 

 

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Financial highlights

Delaware National High-Yield Municipal Bond Fund Class C

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

 

1

The average shares outstanding have been applied for per share information.

 

2

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager.

Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

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       Year ended  
    

 

 

  
       8/31/20        8/31/19        8/31/18        8/31/17        8/31/16  

 

  
     $ 11.52        $ 11.04        $ 11.09        $ 11.47        $ 10.80  
       0.36          0.38          0.38          0.36          0.33  
       (0.32 )         0.48          (0.05 )         (0.38 )         0.67  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       0.04          0.86          0.33          (0.02 )         1.00  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.36 )         (0.38 )         (0.38 )         (0.36 )         (0.33 ) 
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.36 )         (0.38 )         (0.38 )         (0.36 )         (0.33 ) 
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     $ 11.20        $ 11.52        $ 11.04        $ 11.09        $ 11.47  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       0.41%          7.98%          3.03%          (0.11% )         9.41%  
     $ 68,993        $ 91,184        $ 92,155        $ 97,974        $ 113,905  
       1.60%          1.60%          1.60%          1.60%          1.60%  
       1.66%          1.65%          1.66%          1.69%          1.69%  
       3.24%          3.47%          3.44%          3.27%          2.98%  
       3.18%          3.42%          3.38%          3.18%          2.89%  
         44%          33%          19%          27%          13%  

 

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Financial highlights

Delaware National High-Yield Municipal Bond Fund Institutional Class

 

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

 

1

The average shares outstanding have been applied for per share information.

 

2

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

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       Year ended  
    

 

 

  
       8/31/20        8/31/19        8/31/18        8/31/17        8/31/16  

 

  
     $ 11.58        $ 11.10        $ 11.15        $ 11.53        $ 10.85  
       0.47          0.49          0.49          0.47          0.45  
       (0.32 )         0.48          (0.05 )         (0.38 )         0.67  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       0.15          0.97          0.44          0.09          1.12  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.47 )         (0.49 )         (0.49 )         (0.47 )         (0.44 ) 
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       (0.47 )         (0.49 )         (0.49 )         (0.47 )         (0.44 ) 
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     $ 11.26        $ 11.58        $ 11.10        $ 11.15        $ 11.53  
    

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
       1.44%          9.03%          4.07%          0.92%          10.57%  
     $ 1,095,548        $ 1,141,973        $ 1,017,167        $ 932,716        $ 905,436  
       0.60%          0.60%          0.60%          0.60%          0.60%  
       0.66%          0.65%          0.66%          0.69%          0.69%  
       4.24%          4.47%          4.44%          4.27%          3.98%  
       4.18%          4.42%          4.38%          4.18%          3.89%  
         44%          33%          19%          27%          13%  

 

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Notes to financial statements   
Delaware Funds® by Macquarie national tax-free funds    August 31, 2020

 

Delaware Group® Tax-Free Fund is organized as a Delaware statutory trust and offers two series: Delaware Tax-Free USA Fund and Delaware Tax-Free USA Intermediate Fund. Voyageur Mutual Funds is organized as a Delaware statutory trust and offers five series: Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund, Delaware Minnesota High-Yield Municipal Bond Fund, Delaware National High-Yield Municipal Bond Fund, and Delaware Tax-Free New York Fund. Delaware Group Tax-Free Fund and Voyageur Mutual Funds are each referred to as a Trust, or collectively, as the Trusts. These financial statements and the related notes pertain to Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund (each a Fund, or together, the Funds). Each Trust is an open-end investment company. The Funds are considered diversified under the Investment Company Act of 1940, as amended (1940 Act), and offer Class A, Class C, and Institutional Class shares. Class A shares are sold with a maximum front-end sales charge of 4.50% for Delaware Tax-Free USA Fund and Delaware National High-Yield Municipal Bond Fund, and 2.75% for Delaware Tax-Free USA Intermediate Fund. Class A share purchases of $1,000,000 or more for Delaware Tax-Free USA Fund and $250,000 or more for Delaware National High-Yield Municipal Bond Fund will incur a contingent deferred sales charge (CDSC) instead of a front-end sales charge of 1.00%, if redeemed during the first year and 0.50% during the second year and 0.75% for Class A share purchases of $1,000,000 for Delaware Tax-Free USA Intermediate Fund if redeemed within the first year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Class C shares are sold with a CDSC of 1.00%, which will be incurred if redeemed during the first 12 months. Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors.

1. Significant Accounting Policies

Each Fund follows accounting and reporting guidance under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services – Investment Companies. The following accounting policies are in accordance with US generally accepted accounting principles (US GAAP) and are consistently followed by the Funds.

Security Valuation — Debt securities are valued based upon valuations provided by an independent pricing service or broker and reviewed by management. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. Valuations for fixed income securities utilize matrix systems, which reflect such factors as security prices, yields, maturities, and ratings, and are supplemented by dealer and exchange quotations. Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of each Trust’s Board of Trustees (each, a Board or, collectively, the Boards). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security. Restricted securities are valued at fair value using methods approved by the Boards.

Federal Income Taxes — No provision for federal income taxes has been made as each Fund intends to continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions

 

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to shareholders. Each Fund evaluates tax positions taken or expected to be taken in the course of preparing each Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. Management has analyzed each Fund’s tax positions taken or expected to be taken on each Fund’s federal income tax returns through the year ended August 31, 2020 and for all open tax years (years ended August 31, 2017–August 31, 2019), and has concluded that no provision for federal income tax is required in each Fund’s financial statements. If applicable, each Fund recognizes interest accrued on unrecognized tax benefits in interest expense and penalties in “Other” on the “Statements of operations.” During the year ended August 31, 2020, the Funds did not incur any interest or tax penalties.

Class Accounting — Investment income and common expenses are allocated to the various classes of each Fund on the basis of “settled shares” of each class in relation to the net assets of each Fund. Realized and unrealized gain (loss) on investments are allocated to the various classes of each Fund on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Use of Estimates — The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the fair value of investments, the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the differences could be material.

Other — Expenses directly attributable to a Fund are charged directly to that Fund. Other expenses common to various funds within the Delaware Funds® by Macquarie (Delaware Funds) are generally allocated among such funds on the basis of average net assets. Management fees and certain other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Interest income is recorded on the accrual basis. Discounts and premiums on debt securities are accreted or amortized to interest income, respectively, over the lives of the respective securities using the effective interest method. Each Fund declares dividends daily from net investment income and pays the dividends monthly and declares and pays distributions from net realized gain on investments, if any, annually. Each Fund may distribute more frequently, if necessary for tax purposes. Dividends and distributions, if any, are recorded on the ex-dividend date.

 

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Notes to financial statements

Delaware Funds® by Macquarie national tax-free funds

 

1. Significant Accounting Policies (continued)

 

Each Fund receives earnings credits from its custodian when positive cash balances are maintained, which may be used to offset custody fees. The expenses paid under this arrangement are included on the “Statements of operations” under “Custodian fees” with the corresponding expenses offset included under “Less expenses paid indirectly.” For the year ended August 31, 2020, each Fund earned the following amounts under this arrangement:

 

Fund

    Custody Credits

Delaware Tax-Free USA Fund

        $2,869

Delaware Tax-Free USA Intermediate Fund

        3,975

Delaware National High-Yield Municipal Bond Fund

        433

Each Fund receives earnings credits from its transfer agent when positive cash balances are maintained, which may be used to offset transfer agent fees. If the amount earned is greater than $1, the expenses paid under this arrangement are included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses” with the corresponding expenses offset included under “Less expenses paid indirectly.” For the year ended August 31, 2020, each Fund earned the following amounts under this arrangement:

 

Fund

    Earnings Credits

Delaware Tax-Free USA Fund

        $391

Delaware Tax-Free USA Intermediate Fund

        137

Delaware National High-Yield Municipal Bond Fund

        396

2. Investment Management, Administration Agreements, and Other Transactions with Affiliates

In accordance with the terms of its respective investment management agreement, each Fund pays Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust and the investment manager, an annual fee which is calculated daily and paid monthly based on each Fund’s average daily net assets as follows:

 

             Delaware Tax-Free         
USA Fund		           Delaware Tax-Free USA         
Intermediate Fund		   Delaware National
High-Yield
        Municipal Bond Fund        

On the first $500 million

        0.5500 %       0.5000 %       0.5500 %

On the next $500 million

        0.5000 %       0.4750 %       0.5000 %

On the next $1.5 billion

        0.4500 %       0.4500 %       0.4500 %

In the excess of $2.5 billion

        0.4250 %       0.4250 %       0.4250 %

DMC has contractually agreed to waive that portion, if any, of its management fee and/or pay/reimburse each Fund to the extent necessary to ensure that total annual operating expenses (excluding any distribution and service (12b-1) fees, acquired fund fees and expenses, taxes, interest, inverse floater program expenses, short sale and dividend interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) in order to prevent total annual fund operating expenses from exceeding the following percentage of each Fund’s average daily net assets

 

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from September 1, 2019 through August 31, 2020.* These expense waivers and reimbursements may only be terminated by agreement of DMC and each Fund. The waivers and reimbursements are accrued daily and received monthly.

 

Fund

    Operating expense
limitation as
a percentage
of average
daily net assets

Delaware Tax-Free USA Fund

        0.56 %

Delaware Tax-Free USA Intermediate Fund

        0.50 %

Delaware National High-Yield Municipal Bond Fund

        0.60 %

Delaware Investments Fund Services Company (DIFSC), an affiliate of DMC, provides fund accounting and financial administrative oversight services to each Fund. For these services, DIFSC’s fees are calculated daily and paid monthly based on the aggregate daily net assets of all funds within the Delaware Funds at the following annual rates: 0.00475% of the first $35 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $45 billion (Total Fee). Each fund in the Delaware Funds pays a minimum of $4,000, which, in aggregate, is subtracted from the Total Fee. Each fund then pays its portion of the remainder of the Total Fee on a relative net asset value (NAV) basis. These amounts are included on the “Statements of operations” under “Accounting and administration expenses.” For the year ended August 31, 2020, each Fund was charged for these services as follows:

 

Fund

    Fees  

Delaware Tax-Free USA Fund

      $24,798  

Delaware Tax-Free USA Intermediate Fund

      22,836  

Delaware National High-Yield Municipal Bond Fund

      51,751  

DIFSC is also the transfer agent and dividend disbursing agent of each Fund. For these services, DIFSC’s fees are calculated daily and paid monthly based on the aggregate daily net assets of the retail funds within the Delaware Funds at the following annual rates: 0.014% of the first $20 billion; 0.011% of the next $5 billion; 0.007% of the next $5 billion; and 0.005% of the next $20 billion; and 0.0025% of average daily net assets in excess of $50 billion. The fees payable to DIFSC under the shareholder services agreement described above are allocated among all retail funds in the Delaware Funds on a relative NAV basis. These amounts are included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses.” For the year ended August 31, 2020, each Fund was charged for these services as follows:

 

Fund

    Fees  

Delaware Tax-Free USA Fund

    $ 55,899  

Delaware Tax-Free USA Intermediate Fund

      50,685  

Delaware National High-Yield Municipal Bond Fund

      128,254  

Pursuant to a sub-transfer agency agreement between DIFSC and BNY Mellon Investment Servicing (US) Inc. (BNYMIS), BNYMIS provides certain sub-transfer agency services to each Fund. Sub-transfer

 

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2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)

 

agency fees are paid by each Fund and are also included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses.” The fees that are calculated daily and paid as invoices are received on a monthly or quarterly basis.

Pursuant to a distribution agreement and distribution plan, Delaware National High-Yield Municipal Bond Fund pays DDLP, the distributor and an affiliate of DMC, an annual 12b-1 fee of 0.25% of the average daily net assets of the Class A shares. The Board for Delaware Tax-Free USA Fund has adopted a formula for calculating 12b-1 fees for the Fund’s Class A shares that went into effect on June 1, 1992. The Fund’s Class A shares are currently subject to a blended 12b-1 fee equal to the sum of: (1) 0.10% of average daily net assets representing shares acquired prior to June 1, 1992, and (2) 0.25% of average daily net assets representing shares that were acquired on or after June 1, 1992. All of the Fund’s Class A shareholders bear 12b-1 fees at the same blended rate, currently 0.25% of average daily net assets, based on the formula described above. This method of calculating Class A 12b-1 fees may be discontinued at the sole discretion of the Board. The Class A shares of Delaware Tax-Free USA Intermediate Fund were subject to a 12b-1 fee of 0.25% of average daily net assets, which was contractually waived to 0.15% of average daily net assets from September 1, 2019 through August 31, 2020.* Each Fund pays 1.00% of the average daily net assets of the Class C shares. The fees are calculated daily and paid monthly. Institutional Class shares do not pay 12b-1 fees.

As provided in the investment management agreement, each Fund bears a portion of the cost of certain resources shared with DMC, including the cost of internal personnel of DMC and/or its affiliates that provide legal, tax, and regulatory reporting services to each Fund. These amounts are included on the “Statements of operations” under “Legal fees.” For the year ended August 31, 2020, each Fund was charged for internal legal, tax, and regulatory reporting services provided by DMC and/or its affiliates’ employees as follows:

 

Fund

    Fees  

Delaware Tax-Free USA Fund

      $17,756  

Delaware Tax-Free USA Intermediate Fund

      16,240  

Delaware National High-Yield Municipal Bond Fund

      40,764  

For the year ended August 31, 2020, DDLP earned commissions on sales of Class A shares for each Fund as follows:

 

Fund

    Commissions

Delaware Tax-Free USA Fund

        $25,177     

Delaware Tax-Free USA Intermediate Fund

        3,190

Delaware National High-Yield Municipal Bond Fund

        32,981

 

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For the year ended August 31, 2020, DDLP received gross CDSC commissions on redemptions of each Fund’s Class A and Class C shares, respectively, and these commissions were entirely used to offset upfront commissions previously paid by DDLP to broker/dealers on sales of those shares. The amounts received were as follows:

 

Fund

    Class A      Class C  

Delaware Tax-Free USA Fund

    $ 1,302      $ 371  

Delaware Tax-Free USA Intermediate Fund

      2,184        551  

Delaware National High-Yield Municipal Bond Fund

      100,809        5,339  

Trustees’ fees include expenses accrued by each Fund for each Trustee’s retainer and meeting fees. Certain officers of DMC, DIFSC, and DDLP are officers and/or Trustees of the Trust. These officers and Trustees are paid no compensation by the Funds.

Cross trades for the year ended August 31, 2020, were executed by each Fund pursuant to procedures adopted by the Boards designed to ensure compliance with Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds of investment companies, or between a fund of an investment company and another entity, that are or could be considered affiliates by virtue of having a common investment advisor (or affiliated investment advisors), common directors/trustees and/or common officers. At their regularly scheduled meetings, the Boards review such transactions for compliance with the procedures adopted by the Boards. Pursuant to these procedures, for the year ended August 31, 2020, the Funds engaged in the following Rule 17a-7 securities purchases and securities sales, which resulted in net realized gains (losses) as follows:

 

     Purchases      Sales      Net realized gain (loss)

Delaware Tax-Free USA Fund

    $ 69,506,902      $ 74,062,805            $(3,800,635 )     

Delaware Tax-Free USA Intermediate Fund

      39,617,341        32,391,009        (116,710 ) 

Delaware National High-Yield Municipal Bond Fund

      32,130,607        50,646,418        (1,380,159 ) 

                                     

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

3. Investments

For the year ended August 31, 2020, each Fund made purchases and sales of investment securities other than short-term investments as follows:

 

Fund

    Purchases      Sales  

Delaware Tax-Free USA Fund

      $466,677,424        $471,517,538  

Delaware Tax-Free USA Intermediate Fund

      167,542,910        146,740,097  

Delaware National High-Yield Municipal Bond Fund

      610,929,948        691,251,377  

 

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Delaware Funds® by Macquarie national tax-free funds

 

3. Investments (continued)

 

The tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be the final tax cost basis adjustments, but approximates the tax basis unrealized gains and losses that may be realized and distributed to shareholders. At August 31, 2020, the cost and unrealized appreciation (depreciation) of investments for federal income tax purposes for each Fund were as follows:

 

Fund

    Cost of
investments		      Aggregate
unrealized
appreciation
of investments		      Aggregate
unrealized
depreciation
of investments		     Net unrealized
appreciation
of investments		  

Delaware Tax-Free USA Fund

    $ 577,113,272      $ 49,193,246      $ (6,832,527 )      $42,360,719  

Delaware Tax-Free USA Intermediate Fund

      527,828,126        40,800,365        (1,836,741 )      38,963,624  

Delaware National High-Yield Municipal Bond Fund

      1,278,997,068        97,313,177        (44,431,896 )      52,881,281  

US GAAP defines fair value as the price that each Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A three-level hierarchy for fair value measurements has been established based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances. Each Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-level hierarchy of inputs is summarized as follows:

 

Level 1 –   Inputs are quoted prices in active markets for identical investments. (Examples: equity securities, open-end investment companies, futures contracts, and exchange-traded options contracts)
Level 2 –   Other observable inputs, including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs. (Examples: debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, and fair valued securities)

 

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Level 3 –   Significant unobservable inputs, including each Fund’s own assumptions used to determine the fair value of investments. (Examples: broker-quoted securities and fair valued securities)

Level 3 investments are valued using significant unobservable inputs. Each Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Valuations may also be based upon current market prices of securities that are comparable in coupon, rating, maturity, and industry. The derived value of a Level 3 investment may not represent the value which is received upon disposition and this could impact the results of operations.

The following tables summarize the valuation of each Fund’s investments by fair value hierarchy levels as of August 31, 2020:

 

     Delaware Tax-Free USA Fund
    

 

Level 2

Securities

     

Assets:

     

Municipal Bonds

        $614,138,991

Short-Term Investments

        5,335,000
    

 

 

  

Total Value of Securities

        $619,473,991
    

 

 

  

 

     Delaware Tax-Free USA Intermediate Fund
    

 

Level 2

Securities

     

Assets:

     

Municipal Bonds

      $ 553,541,750

Short-Term Investments

        13,250,000
    

 

 

  

Total Value of Securities

        $566,791,750
    

 

 

  

 

     Delaware National High-Yield Municipal Bond Fund
    

 

Level 2

   

 

Level 3

   

 

Total

Securities

               

Assets:

               

Municipal Bonds

      $ 1,312,382,527      $ 95,822      $ 1,312,478,349

Short-Term Investments

        19,400,000        —        19,400,000
    

 

 

       

 

 

       

 

 

  

Total Value of Securities

      $ 1,331,782,527      $ 95,822      $ 1,331,878,349
    

 

 

       

 

 

       

 

 

  

A reconciliation of Level 3 investments is presented when a Fund has a significant amount of Level 3 investments at the beginning, interim, or end of the period in relation to that Fund’s net assets. Management has determined not to provide a reconciliation of Level 3 investments as the Level 3 investments were not considered significant to the Fund’s net assets at the beginning, interim, or end of the year. Management has determined not to provide additional disclosure on Level 3 inputs since the Level 3 investments were not considered significant to the Fund’s net assets at the end of the year.

 

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4. Dividend and Distribution Information

Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Additionally, distributions from net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the years ended August 31, 2020 and 2019 was as follows:

 

     Tax-exempt
income		      Ordinary
income		      Long-term
capital
gains 		     Total  

Year ended August 31, 2020:

            

Delaware Tax-Free USA Fund

    $ 19,686,226      $ 676,158      $ 1,263,782      $ 21,626,166  

Delaware Tax-Free USA Intermediate Fund

      16,218,407        —        —        16,218,407  

Delaware National High-Yield Municipal Bond Fund

      56,742,285        249,820        —        56,992,105  

Year ended August 31, 2019:

            

Delaware Tax-Free USA Fund

      19,673,037        81,501        145,750        19,900,288  

Delaware Tax-Free USA Intermediate Fund

      16,667,720        —        —        16,667,720  

Delaware National High-Yield Municipal Bond Fund

      56,547,428        21,340        —        56,568,768  

 

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5. Components of Net Assets on a Tax Basis

As of August 31, 2020, the components of net assets on a tax basis were as follows:

 

             Delaware Tax-Free         
USA Fund		       Delaware Tax-Free USA    
Intermediate Fund		   Delaware National
High-Yield
    Municipal Bond Fund    

Shares of beneficial interest

      $ 579,151,078     $ 534,506,859     $ 1,291,586,038

Undistributed tax-exempt income

        373,189       328,668       1,126,049

Undistributed long-term capital gains

        4,371,985       —       2,269,417

Qualified late year loss deferrals

        (568,060 )       —       —

Distributions payable

        (438,663 )       (361,779 )       (1,107,736 )

Capital loss carryforwards

        —       (1,711,229 )       —

Unrealized appreciation of investments

        42,360,719       38,963,624       52,881,281
    

 

 

      

 

 

      

 

 

  

Net assets

      $ 625,250,248     $ 571,726,143     $ 1,346,755,049
    

 

 

      

 

 

      

 

 

  

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales and tax treatment of market discount and premium on debt instruments, if applicable.

Qualified late year ordinary and capital losses (including currency and specified gain (loss) items) represent losses realized from January 1, 2020 through August 31, 2020 and November 1, 2019 through August 31, 2020, respectively, that, in accordance with federal income tax regulations, the Funds have elected to defer and treat as having arisen in the following fiscal year.

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. At August 31, 2020, the Funds utilized capital loss carryforwards as follows:

 

Delaware Tax-Free USA Intermediate Fund

    $ 126,778  

Delaware National High-Yield Municipal Bond Fund

      13,029,258  

At August 31, 2020, capital loss carryforwards available to offset future realized capital gains, are as follows:

 

     Loss carryforward character          
     Short-term         Long-term         Total

Delaware Tax-Free USA Intermediate Fund

      $ 1,711,229             $—           $ 1,711,229

At August 31, 2020, there were no capital loss carryforwards for Delaware Tax-Free USA Fund.

 

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6. Capital Shares

Transactions in capital shares were as follows:

 

     Delaware Tax-Free
USA Fund 		    Delaware Tax-Free USA
Intermediate Fund 		   

Delaware National High-Yield

      Municipal Bond Fund      

  
    

 

Year ended

    

 

Year ended

    

 

Year ended

  
     8/31/20     8/31/19     8/31/20     8/31/19     8/31/20     8/31/19  

Shares sold:

             

Class A

      8,128,109       9,633,567       2,507,418       2,346,565       5,760,481       4,939,498  

Class C

      209,130       235,464       148,655       294,667       909,664       1,334,649  

Institutional Class

      5,517,306       8,058,705       11,945,089       13,507,386       30,588,566       34,265,773  

Shares issued upon reinvestment of dividends and distributions:

 

      

Class A

      1,237,423       1,282,034       243,247       305,278       640,413       675,346  

Class C

      28,406       35,429       27,722       43,148       218,235       250,585  

Institutional Class

      406,363       232,343       844,472       801,340       3,406,052       3,379,605  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     15,526,737       19,477,542       15,716,603       17,298,384       41,523,411       44,845,456  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Shares redeemed:

             

Class A

      (8,760,862 )      (13,496,639 )      (4,166,754 )      (4,200,242 )      (8,235,396 )      (5,676,550 ) 

Class C

      (677,015 )      (572,900 )      (1,072,043 )      (856,325 )      (2,879,671 )      (2,018,698 ) 

Institutional Class

      (5,767,214 )      (3,877,118 )      (8,385,796 )      (13,850,854 )      (35,257,417 )      (30,706,607 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     (15,205,091 )      (17,946,657 )      (13,624,593 )      (18,907,421 )      (46,372,484 )      (38,401,855 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease)

      321,646       1,530,885       2,092,010       (1,609,037 )      (4,849,073 )      6,443,601  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Certain shareholders may exchange shares of one class for shares of another class in the same Fund. These exchange transactions are included as subscriptions and redemptions in the tables above and on the “Statements of changes in net assets.” For the years ended August 31, 2020 and 2019, each Fund had the following exchange transactions:

 

     Exchange Redemptions      Exchange Subscriptions         
     Class A
Shares		      Class C
Shares		      Institutional
Class
Shares		      Class A
Shares		      Institutional
Class
Shares		      Value  

Delaware Tax-Free USA Fund

 

               

8/31/20

      118,464        60,517        —        60,554        117,593      $ 2,113,033  

8/31/19

      122,933        9,379        —        9,402        122,076        1,496,654  

Delaware Tax-Free USA Intermediate Fund

 

         

8/31/20

      119,341        17,213        —        17,222        118,367        1,660,124  

8/31/19

      1,189,029        4,719        6,641        11,435        1,178,174        13,998,550  

Delaware National High-Yield Municipal Bond Fund

 

         

8/31/20

      320,408        19,256        —        15,368        321,944        3,710,189  

8/31/19

      9,893        —        —        —        9,811        108,773  

 

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7. Line of Credit

Each Fund, along with certain other funds in the Delaware Funds (Participants), was a participant in a $220,000,000 revolving line of credit intended to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. On November 4, 2019, the Participants entered into an amendment to the agreement for a $250,000,000 revolving line of credit (Agreement). The Agreement was increased to $275,000,000 on May 6, 2020. The Agreement is to be used as described below and operates in substantially the same manner as the original agreement. The line of credit available under the Agreement expires on November 2, 2020.

Under the Agreement, the Participants were charged an annual commitment fee of 0.15%, which was allocated across the Participants based on a weighted average of the respective net assets of each Participant. The Participants were permitted to borrow up to a maximum of one-third of their net assets under the Agreement. Each Participant was individually, and not jointly, liable for its particular advances, if any, under the line of credit. The line of credit available under the Agreement expired on November 4, 2019.

The Funds had no amounts outstanding as of August 31, 2020, or at any time during the year then ended.

8. Securities Lending

Delaware Tax-Free USA Intermediate Fund, along with other funds in the Delaware Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with The Bank of New York Mellon (BNY Mellon). At the time a security is loaned, the borrower must post collateral equal to the required percentage of the market value of the loaned security, including any accrued interest. The required percentage is: (1) 102% with respect to US securities and foreign securities that are denominated and payable in US dollars; and (2) 105% with respect to foreign securities. With respect to each loan, if on any business day, the aggregate market value of securities collateral plus cash collateral held is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral by the end of the following business day, which, together with the collateral already held, will be not less than the applicable initial collateral requirements for such security loan. If the aggregate market value of securities collateral and cash collateral held with respect to a security loan exceeds the applicable initial collateral requirement, upon the request of the borrower, BNY Mellon must return enough collateral to the borrower by the end of the following business day to reduce the value of the remaining collateral to the applicable initial collateral requirement for such security loan. As a result of the foregoing, the value of the collateral held with respect to a loaned security on any particular day, may be more or less than the value of the security on loan. The collateral percentage with respect to the market value of the loaned security is determined by the security lending agent.

Cash collateral received by each fund of the Trust is generally invested in a series of individual separate accounts, each corresponding to a fund. The investment guidelines permit each separate account to hold certain securities that would be considered eligible securities for a money market fund. Cash collateral received is generally invested in government securities; certain obligations issued by

 

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8. Securities Lending (continued)

 

government sponsored enterprises; repurchase agreements collateralized by US Treasury securities; obligations issued by the central government of any Organization for Economic Cooperation and Development (OECD) country or its agencies, instrumentalities, or establishments; obligations of supranational organizations; commercial paper, notes, bonds, and other debt obligations; certificates of deposit, time deposits, and other bank obligations; and asset-backed securities. The Fund can also accept US government securities and letters of credit (non-cash collateral) in connection with securities loans.

In the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Fund or, at the discretion of the lending agent, replace the loaned securities. The Fund continues to record dividends or interest, as applicable, on the securities loaned and is subject to changes in value of the securities loaned that may occur during the term of the loan. The Fund has the right under the Lending Agreement to recover the securities from the borrower on demand. With respect to security loans collateralized by non-cash collateral, the Fund receives loan premiums paid by the borrower. With respect to security loans collateralized by cash collateral, the earnings from the collateral investments are shared among the Fund, the security lending agent, and the borrower. The Fund records security lending income net of allocations to the security lending agent and the borrower.

The Fund may incur investment losses as a result of investing securities lending collateral. This could occur if an investment in the collateral investment account defaulted or became impaired. Under those circumstances, the value of the Fund’s cash collateral account may be less than the amount the Fund would be required to return to the borrowers of the securities and the Fund would be required to make up for this shortfall.

During the year ended August 31, 2020, Delaware Tax-Free USA Intermediate Fund had no securities out on loan. For the year ended August 31, 2020, Delaware Tax-Fee USA Fund and Delaware National High-Yield Municipal Bond Fund were not included in the Lending Agreement.

9. Geographic, Credit, and Market Risks

Beginning in January 2020, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of a novel coronavirus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand and general market uncertainty. The effects of COVID-19 have and may continue to adversely affect the global economy, the economies of certain nations and individual issuers, all of which may negatively impact the Funds’ performance.

When interest rates rise, fixed income securities (i.e. debt obligations) generally will decline in value. These declines in value are greater for fixed income securities with longer maturities or durations.

 

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IBOR risk is the risk that potential changes related to the use of the London interbank offered rate (LIBOR) could have adverse impacts on financial instruments that reference LIBOR. The potential abandonment of LIBOR could affect the value and liquidity of instruments that reference LIBOR. The use of alternative reference rate products may impact investment strategy performance. These risks may also apply with respect to changes in connection with other interbank offered rates (“IBORs”), such as the euro overnight index average (EONIA), which are also the subject of recent reform.

The Funds concentrate their investments in securities issued by municipalities, and may be subject to geographic concentration risk. In addition, the Funds have the flexibility to invest in issuers in US territories and possessions such as the Commonwealth of Puerto Rico, the US Virgin Islands, and Guam, whose bonds are also free of federal and individual state income taxes.

The value of the Funds’ investments may be adversely affected by new legislation within the US states or territories, regional or local economic conditions, and differing levels of supply and demand for municipal bonds. Many municipalities insure repayment for their obligations. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons and there is no certainty that the insurance company will meet its obligations. A real or perceived decline in creditworthiness of a bond insurer can have an adverse impact on the value of insured bonds held in each Fund. At August 31, 2020, the percentage of each Fund’s net assets insured by bond issuers are listed on the next page and these securities have been identified on the “Schedules of investments.”

 

     Delaware Tax-Free
USA Fund		   Delaware Tax-Free USA
Intermediate Fund		   Delaware National High-Yield
Municipal Bond Fund

Assured Guaranty Corporation

        0.16 %       —       0.24 %

Assured Guaranty Municipal Corporation

        0.23 %       1.61 %       0.21 %

AMBAC Assurance Corporation

        —       —       0.07 %

National Public Finance Guarantee Corporation

        0.06 %       —       —
    

 

 

      

 

 

      

 

 

  

Total

        0.45 %       1.61 %       0.52 %
    

 

 

      

 

 

      

 

 

  

As of August 31, 2020, Delaware Tax-Free USA Fund invested in municipal bonds issued by the states of New York and Texas and territory of Puerto Rico, which constituted approximately 12.35%, 11.16%, and 11.98%, respectively, of the Fund’s net assets. As of August 31, 2020, Delaware Tax-Free USA Intermediate Fund invested in municipal bonds issued by the states of California and New York, which constituted approximately 14.04% and 16.23%, respectively, of the Fund’s net assets. As of August 31, 2020, Delaware National High-Yield Municipal Bond Fund invested in municipal bonds issued by the state of California and territory of Puerto Rico which constituted approximately 12.00% and 10.62%,

 

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Notes to financial statements

Delaware Funds® by Macquarie national tax-free funds

 

9. Geographic, Credit, and Market Risks (continued)

 

respectively, the Fund’s net assets. These investments could make each Fund more sensitive to economic conditions in those states than other more geographically diversified national municipal income funds.

Each Fund invests a portion of its assets in high yield fixed income securities, which are securities rated lower than BBB- by Standard & Poor’s Financial Services LLC (S&P), lower than Baa3 by Moody’s Investors Service, Inc. (Moody’s), or similarly rated by another nationally recognized statistical rating organization. Investments in these higher-yielding securities are generally accompanied by a greater degree of credit risk than higher-rated securities. Additionally, lower-rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.

Each Fund invests in certain obligations that may have liquidity protection designed to ensure that the receipt of payments due on the underlying security is timely. Such protection may be provided through guarantees, insurance policies, or letters of credit obtained by the issuer or sponsor through third parties, through various means of structuring the transaction or through a combination of such approaches. Each Fund will not pay any additional fees for such credit support, although the existence of credit support may increase the price of a security.

Each Fund may invest in advance refunded bonds, escrow secured bonds, or defeased bonds. Under current federal tax laws and regulations, state and local government borrowers are permitted to refinance outstanding bonds by issuing new bonds. The issuer refinances the outstanding debt to either reduce interest costs or to remove or alter restrictive covenants imposed by the bonds being refinanced. A refunding transaction where the municipal securities are being refunded within 90 days from the issuance of the refunding issue is known as a “current refunding.” “Advance refunded bonds” are bonds in which the refunded bond issue remains outstanding for more than 90 days following the issuance of the refunding issue. In an advance refunding, the issuer will use the proceeds of a new bond issue to purchase high grade interest-bearing debt securities, which are then deposited in an irrevocable escrow account held by an escrow agent to secure all future payments of principal and interest and bond premium of the advance refunded bond. Bonds are “escrowed to maturity” when the proceeds of the refunding issue are deposited in an escrow account for investment sufficient to pay all of the principal and interest on the original interest payment and maturity dates.

Bonds are considered “pre-refunded” when the refunding issue’s proceeds are escrowed only until a permitted call date or dates on the refunded issue with the refunded issue being redeemed at the time, including any required premium. Bonds become “defeased” when the rights and interests of the bondholders and of their lien on the pledged revenues or other security under the terms of the bond contract are substituted with an alternative source of revenues (the escrow securities) sufficient to meet payments of principal and interest to maturity or to the first call dates. Escrowed secured bonds will often receive a rating of AAA from Moody’s, S&P, and/or Fitch Ratings due to the strong credit quality of the escrow securities and the irrevocable nature of the escrow deposit agreement.

Each Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A, promulgated under the Securities Act of 1933, as amended, and other securities which may not be readily marketable.

 

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The relative illiquidity of these securities may impair each Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Boards have delegated to DMC, the day-to-day functions of determining whether individual securities are liquid for purposes of each Fund’s limitation on investments in illiquid securities. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to each Fund’s 15% limit on investments in illiquid securities. Rule 144A securities held by each Fund have been identified on the “Schedules of investments.”

10. Contractual Obligations

Each Fund enters into contracts in the normal course of business that contain a variety of indemnifications. Each Fund’s maximum exposure under these arrangements is unknown. However, each Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed each Fund’s existing contracts and expects the risk of loss to be remote.

11. Recent Accounting Pronouncements

In March 2017, FASB issued Accounting Standards Update (ASU), ASU 2017-08, Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities which amends the amortization period for certain callable debt securities purchased at a premium, shortening such period to the earliest call date. ASU 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management has implemented ASU 2017-08 and determined that the impact of this guidance to each Fund’s net assets at the end of the period is not material.

In August 2018, FASB issued ASU 2018-13, which changes certain fair value measurement disclosure requirements. ASU 2018-13, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for the timing of transfers between levels and the valuation process for Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. At this time, Management is evaluating the implications of these changes on the financial statements.

In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in ASU 2020-04 provide optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of LIBOR and other interbank-offered based reference rates as of the end of 2021. ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. As of the financial reporting period, Management is evaluating the impact of applying this ASU.

 

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Notes to financial statements

Delaware Funds® by Macquarie national tax-free funds

 

12. Subsequent Events

On August 12, 2020, the Board approved a proposal to reorganize the following acquired funds with and into the applicable acquiring funds as indicated below (each, a “Reorganization” and together, the “Reorganizations”):

 

Acquired Fund

 

   

Acquiring Fund

 

 

Delaware Tax-Exempt Income Fund, a

series of the Delaware Group Limited-Term

Government Funds

   

Delaware Tax-Free USA Intermediate

Fund, a series of the Trust

Delaware Tax-Exempt Opportunities Fund,

a series of the Delaware Group

Limited-Term Government Funds

 

   

Delaware Tax-Free USA

Fund, a series of the Trust

The proposal is not subject to shareholder approval. The Board of Trustees of Delaware Group Limited-Term Government Funds has determined that each Reorganization is in the best interests of the applicable Acquired Fund and that the interests of each Acquired Fund’s existing shareholders will not be diluted as a result of the Reorganization.

Effective a week before the Reorganizations, each Acquired Fund will be closed to new investors. Each Acquired Fund will continue to accept purchases (including reinvested dividends and capital gains) from existing shareholders until a week before the Reorganizations. Contingent deferred sales charges will be waived on redemptions from each Acquired Fund through the date of each Reorganization. The Reorganizations are expected to take place in December 2020.

Management has determined that no other material events or transactions occurred subsequent to August 31, 2020, that would require recognition or disclosure in the Funds’ financial statements.

 

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Report of independent

registered public accounting firm

 

To the Board of Trustees of Delaware Group® Tax-Free Fund and Voyageur Mutual Funds and Shareholders of Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund and Delaware National High-Yield Municipal Bond Fund

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund (constituting Delaware Group® Tax Free Fund) and Delaware National High-Yield Municipal Bond Fund (one of the funds constituting Voyageur Mutual Funds) (hereafter collectively referred to as the “Funds”) as of August 31, 2020, the related statements of operations for the year ended August 31, 2020, the statements of changes in net assets for each of the two years in the period ended August 31, 2020, including the related notes, and the financial highlights for each of the five years in the period ended August 31, 2020 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Funds as of August 31, 2020, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended August 31, 2020 and each of the financial highlights for each of the five years in the period ended August 31, 2020 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinions

These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of August 31, 2020 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinions.

 

/s/ PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
October 19, 2020

We have served as the auditor of one or more investment companies in Delaware Funds® by Macquarie since 2010.

 

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Other Fund information (Unaudited)

Delaware Funds® by Macquarie national tax-free funds

 

Liquidity Risk Management Program

The Securities and Exchange Commission (the “SEC”) has adopted Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”), which requires all open-end funds (other than money market funds) to adopt and implement a program reasonably designed to assess and manage the fund’s “liquidity risk,” defined as the risk that the fund could not meet requests to redeem shares issued by the fund without significant dilution of remaining investors’ interests in the fund.

The Funds have adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the “Program”). The Board has designated the Division Director of the US Operational Risk Group of Macquarie Asset Management as the Program Administrator for each Fund in the Trust.

As required by the Liquidity Rule, the Program includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each of the Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of each Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting each Fund’s acquisition of Illiquid investments if, immediately after the acquisition, each Fund would hold more than 15% of its net assets in Illiquid assets. The Program also requires reporting to the SEC (on a non-public basis) and to the Board if each Fund’s holdings of Illiquid assets exceed 15% of each Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).

In assessing and managing each Fund’s liquidity risk, the Program Administrator considers, as relevant, a variety of factors, including: (1) each Fund’s investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Funds during both normal and reasonably foreseeable stressed conditions; and (3) each Fund’s holdings of cash and cash equivalents and any borrowing arrangements. Classification of each Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or to sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value. Each Fund primarily holds assets that are classified as Highly Liquid, and therefore is not required to establish an HLIM.

At a meeting of the Board held on May 19-21, 2020, the Program Administrator provided a written report to the Board addressing the Program’s operation and assessing the adequacy and effectiveness of its implementation for the period from December 1, 2018 through March 31, 2020. The report concluded that the Program is appropriately designed and effectively implemented and that it meets the requirements of Rule 22e-4 and each Fund’s liquidity needs. Each Fund’s HLIM is set at an appropriate level and the Funds complied with its HLIM at all times during the reporting period.

 

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Tax Information

The information set forth below is for each Fund’s fiscal year as required by federal income tax laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of the Funds. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in January of each year. Please consult your tax advisor for proper treatment of this information.

All disclosures are based on financial information available as of the date of this annual report and, accordingly are subject to change. For any and all items requiring reporting, it is the intention of the Funds to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.

For the fiscal year ended August 31, 2020, each Fund reports distributions paid during the year as follows:

 

    

(A)

Long-Term

  Capital Gains  

Distributions

(Tax Basis)

  

(B)

  Ordinary Income  

Distributions

(Tax Basis)

  

(C)

Tax-Exempt

  Distributions  

(Tax Basis)

  

Total

  Distributions  

(Tax Basis)

Delaware Tax-Free USA Fund

    5.84%   3.13%   91.03%   100.00%

Delaware Tax-Free USA Intermediate Fund

    —   —   100.00%   100.00%

Delaware National High-Yield Municipal Bond Fund

    —   0.44%   99.56%   100.00%

 

(A), (B) and (C) are based on a percentage of each Fund’s total distributions.

Board consideration of Investment Advisory Agreements for Delaware National High-Yield Municipal Bond Fund, Delaware Tax-Free USA Fund, and Delaware Tax-Free USA Intermediate Fund at a meeting held on August 11-13, 2020

At a meeting held on August 11-13, 2020 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory Agreements for Delaware National High-Yield Municipal Bond Fund, Delaware Tax-Free USA Fund, and Delaware Tax-Free USA Intermediate Fund (each, a “Fund” and together, the “Funds”). In making its decision, the Board considered information furnished at regular quarterly Board meetings, including reports detailing Fund performance, investment strategies, and expenses, as well as information prepared specifically in connection with the renewal of the investment advisory and sub-advisory contracts. Information furnished specifically in connection with the renewal of the Investment Management Agreement with Delaware Management Company (“DMC”), a series of Macquarie Investment Management Business Trust (“MIMBT”), included materials provided by DMC and its affiliates (collectively, “Macquarie Investment Management”) concerning, among other things, the nature, extent, and quality of services provided to the Funds; the costs of such services to the Funds;

 

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Other Fund information (Unaudited)

Delaware Funds® by Macquarie national tax-free funds

 

Board consideration of Investment Advisory Agreements for Delaware National High-Yield Municipal Bond Fund, Delaware Tax-Free USA Fund, and Delaware Tax-Free USA Intermediate Fund at a meeting held on August 11-13, 2020 (continued)

economies of scale; and the investment manager’s financial condition and profitability. In addition, in connection with the Annual Meeting, materials were provided to the Trustees in May 2020, including reports provided by Broadridge Financial Solutions (“Broadridge”). The Broadridge reports compared each Fund’s investment performance and expenses with those of other comparable mutual funds. The Independent Trustees reviewed and discussed the Broadridge reports with independent legal counsel to the Independent Trustees. In addition to the information noted above, the Board also requested and received information regarding DMC’s policy with respect to advisory fee levels and its breakpoint philosophy, the structure of portfolio manager compensation, comparative client fee information, and any constraints or limitations on the availability of securities for certain investment styles, which had in the past year inhibited, or which were likely in the future to inhibit, the investment manager’s ability to invest fully in accordance with Fund policies.

In considering information relating to the approval of each Fund’s advisory agreement, the Independent Trustees received assistance and advice from and met separately with independent legal counsel to the Independent Trustees and also received assistance and advice from an experienced and knowledgeable independent fund consultant, JDL Consultants, LLC (“JDL”). Although the Board gave attention to all information furnished, the following discussion identifies, under separate headings, the primary factors taken into account by the Board during its contract renewal considerations.

Nature, extent, and quality of services. The Board considered the services provided by DMC to the Funds and their shareholders. In reviewing the nature, extent, and quality of services, the Board considered reports furnished to it throughout the year, which covered matters such as the relative performance of the Funds; compliance of portfolio managers with the investment policies, strategies, and restrictions for the Funds; compliance by DMC and Delaware Distributors, L.P. (together, “Management”) personnel with the Code of Ethics adopted throughout the Delaware Funds® by Macquarie (“Delaware Funds”); and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of DMC and the emphasis placed on research in the investment process. The Board recognized DMC’s receipt of certain favorable industry distinctions during the past several years. The Board gave favorable consideration to DMC’s efforts to control expenses while maintaining service levels committed to Fund matters. The Board also noted the benefits provided to Fund shareholders through (a) each shareholder’s ability to: (i) exchange an investment in one Delaware Fund for the same class of shares in another Delaware Fund without a sales charge, or (ii) reinvest Fund dividends into additional shares of the Fund or into additional shares of other Delaware Funds, and (b) the privilege to combine holdings in other Delaware Funds to obtain a reduced sales charge. The Board was satisfied with the nature, extent, and quality of the overall services provided by DMC.

Investment performance. The Board placed significant emphasis on the investment performance of the Funds in view of the importance of investment performance to shareholders. Although the Board considered performance reports and discussions with portfolio managers at Investment Committee meetings throughout the year, the Board gave particular weight to the Broadridge reports furnished for the Annual Meeting. The Broadridge reports prepared for each Fund showed the investment

 

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performance of its Class A shares in comparison to a group of similar funds as selected by Broadridge (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for each Fund was shown for the past 1-, 3-, 5-, and 10-year periods, to the extent, applicable, ended January 31, 2020. The Board’s objective is that each Fund’s performance for the 1-, 3-, and 5-year periods be at or above the median of its Performance Universe.

Delaware Tax-Free USA Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional general & insured municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1-, 3-, 5-, and 10-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.

Delaware Tax-Free USA Intermediate Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional intermediate municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1- and 3-year periods was in the first quartile of its Performance Universe. The report further showed that the Fund’s total return for the 5- and 10-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.

Delaware National High-Yield Municipal Bond Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional high yield municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1- and 10-year periods was in the first quartile of its Performance Universe. The report further showed that the Fund’s total return for the 3- and 5-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.

Comparative expenses. The Board considered expense data for the Delaware Funds. Management provided the Board with information on pricing levels and fee structures for each Fund as of its most recently completed fiscal year. The Board also focused on the comparative analysis of effective management fees and total expense ratios of each Fund versus effective management fees and total expense ratios of a group of similar funds as selected by Broadridge (the “Expense Group”). In reviewing comparative costs, each Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. Each Fund’s total expenses were also compared with those of its Expense Group. The Broadridge total expenses, for comparative consistency, were shown by Broadridge for Class A shares and comparative total expenses including 12b-1 and non-12b-1 service fees. The Board’s objective is for each Fund’s total expense ratio to be competitive with those of the peer funds within its Expense Group.

Delaware Tax-Free USA Fund – The expense comparisons for the Fund showed that its actual management fee was in the quartile with the lowest expenses of its Expense Group and its total expenses were in the quartile with the second lowest expenses of its Expense Group. The Board was

 

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Other Fund information (Unaudited)

Delaware Funds® by Macquarie national tax-free funds

 

Board consideration of Investment Advisory Agreements for Delaware National High-Yield Municipal Bond Fund, Delaware Tax-Free USA Fund, and Delaware Tax-Free USA Intermediate Fund at a meeting held on August 11-13, 2020 (continued)

satisfied with the management fee and total expenses of the Fund in comparison to those of its Expense Group as shown in the Broadridge report.

Delaware Tax-Free USA Intermediate Fund – The expense comparisons for the Fund showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Fund in comparison to those of its Expense Group as shown in the Broadridge report.

Delaware National High-Yield Municipal Bond Fund – The expense comparisons for the Fund showed that its actual management fee was in the quartile with the lowest expenses of its Expense Group and its total expenses were in the quartile with the second highest expenses of its Expense Group. The Board gave favorable consideration to the Fund’s management fee, but noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered fee waivers in place through December 2020 and various initiatives implemented by Management, such as the negotiation of lower fees for fund accounting, fund accounting oversight, and custody services, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.

Management profitability. The Board considered the level of profits realized by DMC in connection with the operation of the Funds. In this respect, the Board reviewed the Investment Management Profitability Analysis that addressed the overall profitability of DMC’s business in providing management and other services to each of the individual funds and the Delaware Funds as a whole. Specific attention was given to the methodology used by DMC in allocating costs for the purpose of determining profitability. Management stated that the level of profits of DMC, to a certain extent, reflects recent operational cost savings and efficiencies initiated by DMC. The Board considered DMC’s efforts to improve services provided to Fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which DMC might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. As part of its work, the Board also reviewed a report prepared by JDL regarding MIMBT profitability as compared to certain peer fund complexes and the Independent Trustees met with JDL personnel to discuss DMC’s profitability in such context. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of DMC.

Economies of scale. The Trustees considered whether economies of scale are realized by DMC as each Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed each Fund’s advisory fee pricing and structure, approved by the Board and shareholders, which includes breakpoints, and which applies to most funds in the Delaware Funds complex. Breakpoints in the advisory fee occur when the advisory fee rate is reduced on assets in excess of specified levels. Breakpoints result in a lower advisory fee than would

 

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otherwise be the case in the absence of breakpoints, when the asset levels specified in the breakpoints are exceeded. The Board noted that, as of March 31, 2020, Delaware Tax-Free USA Fund’s assets and Delaware Tax-Free USA Intermediate Fund’s assets exceeded the first breakpoint level. The Board also noted that, as of March 31, 2020, Delaware National High-Yield Municipal Bond Fund’s assets exceeded the second breakpoint level. The Board believed that, given the extent to which economies of scale might be realized by DMC and its affiliates, the schedule of fees under the Investment Management Agreement provides a sharing of benefits with the Funds and their shareholders.

 

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Board of trustees / directors and officers addendum

Delaware Funds® by Macquarie

 

A mutual fund is governed by a Board of Trustees/Directors (“Trustees”), which has oversight responsibility for the management of a fund’s business affairs. Trustees establish procedures and oversee and review the performance of the investment manager, the distributor, and others who perform services for the fund. The independent fund trustees, in particular, are advocates for shareholder interests. Each trustee has served in that capacity since he or she was elected to or appointed to the Board of Trustees, and will continue to serve until his or her retirement or the election of a new trustee in his or her place. The following is a list of the Trustees and Officers with certain background and related information.

 

Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Interested Trustee

                         

Shawn K. Lytle1

610 Market Street

Philadelphia, PA 19106

February 1970

    President, Chief Executive Officer, and Trustee    President and Chief Executive Officer since August 2015 Trustee since September 2015    President – Macquarie Investment Management2 (June 2015–Present) Regional Head of Americas – UBS Global Asset Management (April 2010–May 2015)    93    Trustee — UBS Relationship Funds, SMA Relationship Trust, and UBS Funds (May 2010–April 2015)
           

Independent Trustees

                         

Jerome D.

Abernathy

610 Market Street

Philadelphia, PA

19106

July 1959

    Trustee    Since January 2019    Managing Member, Stonebrook Capital Management, LLC (financial technology: macro factors and databases) (January 1993-Present)    93    None

 

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Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Thomas L. Bennett

610 Market Street

Philadelphia, PA

19106

October 1947

    Chair and Trustee    Trustee since March 2005 Chair since March 2015    Private Investor (March 2004–Present)    93    None

Ann D. Borowiec

610 Market Street

Philadelphia, PA

19106

November 1958

    Trustee    Since March 2015    Chief Executive Officer, Private Wealth Management (2011–2013) and Market Manager, New Jersey Private Bank (2005–2011) – J.P. Morgan Chase & Co.    93    Director — Banco Santander International (October 2016–December 2019) Director — Santander Bank, N.A. (December 2016–December 2019)

Joseph W. Chow

610 Market Street

Philadelphia, PA

19106

January 1953

    Trustee    Since January 2013    Private Investor (April 2011–Present)    93    Director and Audit Committee Member — Hercules Technology Growth Capital, Inc. (July 2004–July 2014)

 

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Board of trustees / directors and officers addendum

Delaware Funds® by Macquarie

 

Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

John A. Fry

610 Market Street

Philadelphia, PA

19106

May 1960

    Trustee    Since January 2001    President – Drexel University (August 2010–Present) President – Franklin & Marshall College (July 2002–June 2010)    93    Director; Compensation Committee and Governance Committee Member — Community Health Systems (May 2004–Present) Director — Drexel Morgan & Co. (2015–2019) Director and Audit Committee Member — vTv Therapeutics Inc. (2017–Present) Director and Audit Committee Member — FS Credit Real Estate Income Trust, Inc. (2018–Present) Director — Federal Reserve Bank of Philadelphia (January 2020–Present)

Lucinda S. Landreth

610 Market Street

Philadelphia, PA

19106

June 1947

    Trustee    Since March 2005    Private Investor (2004–Present)    93    None

 

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Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Frances A.

Sevilla-Sacasa

610 Market Street

Philadelphia, PA

19106

January 1956

    Trustee   

Since September

2011

   

Private Investor

(January 2017–Present) Chief Executive Officer — Banco Itaú International (April 2012–December 2016) Executive Advisor to Dean (August 2011–March 2012) and Interim Dean (January 2011–July 2011) — University of Miami School of Business Administration

President — U.S. Trust, Bank of America Private Wealth Management (Private Banking) (July 2007-December 2008)

    93   

Trust Manager and Audit Committee Chair — Camden Property Trust (August 2011–Present) Director; Strategic Planning and Reserves Committee and Nominating and Governance Committee Member — Callon Petroleum Company (December 2019–Present) Director; Audit Committee Member — Carrizo Oil & Gas, Inc.

(March 2018–December 2019)

 

143

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Board of trustees / directors and officers addendum

Delaware Funds® by Macquarie

 

Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Thomas K. Whitford

610 Market Street Philadelphia, PA

19106

March 1956

    Trustee    Since January 2013   

Vice Chairman (2010–April 2013)

— PNC Financial Services Group

    93   

Director — HSBC North America Holdings Inc.

(December 2013–Present) Director — HSBC USA Inc. (July 2014–Present)

Director — HSBC Bank USA, National Association

(July 2014–March 2017) Director — HSBC Finance Corporation (December 2013–April 2018)

 

144

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Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Christianna Wood

610 Market Street Philadelphia, PA 19106

August 1959

    Trustee    Since January 2019   

Chief Executive Officer and

President — Gore Creek Capital, Ltd. (August 2009–Present)

    93   

Director; Finance Committee and Audit Committee Member — H&R Block Corporation (July 2008–Present) Director; Investments Committee, Capital and Finance Committee, and Audit Committee Member — Grange Insurance (2013–Present) Trustee; Chair of Nominating and Governance Committee and Audit Committee Member — The Merger Fund

(2013–Present), The Merger Fund VL (2013–Present); WCM Alternatives: Event-Driven Fund

(2013–Present), and WCM Alternatives: Credit Event Fund (December 2017–Present) Director; Chair of Governance Committee and Audit Committee Member — International Securities Exchange (2010–2016)

 

145

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Board of trustees / directors and officers addendum

Delaware Funds® by Macquarie

 

Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Janet L. Yeomans

610 Market Street

Philadelphia, PA

19106

July 1948

    Trustee    Since April 1999    Vice President and Treasurer (January 2006–July 2012), Vice President — Mergers & Acquisitions (January 2003–January 2006), and Vice President and Treasurer (July 1995–January 2003) — 3M Company    93   

Director; Personnel and Compensation Committee Chair; Member of Nominating, Investments, and Audit Committees for various periods throughout directorship — Okabena Company (2009–2017)

 

         

Officers

                    

David F. Connor

610 Market Street

Philadelphia, PA

19106

December 1963

    Senior Vice President, General Counsel, and Secretary    Senior Vice President, since May 2013; General Counsel since May 2015; Secretary since October 2005    David F. Connor has served in various capacities at different times at Macquarie Investment Management.    93    None3

Daniel V. Geatens

610 Market Street

Philadelphia, PA

19106

October 1972

    Vice President and Treasurer    Vice President and Treasurer since October 2007    Daniel V. Geatens has served in various capacities at different times at Macquarie Investment Management.    93    None3

 

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Name,

Address,

and Birth Date

   

Position(s)

Held with

Fund(s)

   

Length of Time

Served

   

Principal

Occupation(s)

During the

Past Five Years

   

Number of

Portfolios in Fund

Complex Overseen

by Trustee

or Officer

   

Other

Directorships

Held by

Trustee

or Officer

Richard Salus

610 Market Street

Philadelphia, PA

19106

October 1963

    Senior Vice President and Chief Financial Officer    Senior Vice President and Chief Financial Officer since November 2006    Richard Salus has served in various capacities at different times at Macquarie Investment Management.    93    None

1 Shawn K. Lytle is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor.

2 Macquarie Investment Management is the marketing name for Macquarie Management Holdings, Inc. and its subsidiaries, including the Fund’s(s’) investment advisor, principal underwriter, and its transfer agent.

3 David F. Connor, Daniel V. Geatens, and Richard Salus serve in similar capacities for the six portfolios of the Optimum Fund Trust, which have the same investment advisor, principal underwriter, and transfer agent as the registrant. Mr. Geatens also serves as the Chief Financial Officer and Treasurer for Macquarie Global Infrastructure Total Return Fund Inc., which has an affiliated investment manager.

The Statement of Additional Information for the Fund(s) includes additional information about the Trustees and Officers and is available, without charge, upon request by calling 800 231-8002.

 

147

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About the organization

    

 

Board of trustees

 

Shawn K. Lytle

President and

Chief Executive Officer

Delaware Funds®

by Macquarie

Philadelphia, PA

 

Jerome D. Abernathy

Managing Member

Stonebrook Capital

Management, LLC

Jersey City, NJ

 

Thomas L. Bennett

Chairman of the Board

Delaware Funds

by Macquarie

Private Investor

Rosemont, PA

 

Affiliated officers

David F. Connor

Senior Vice President,

General Counsel,

and Secretary

Delaware Funds

by Macquarie

Philadelphia, PA

   

Ann D. Borowiec

Former Chief Executive

Officer

Private Wealth Management

J.P. Morgan Chase & Co.

New York, NY

 

Joseph W. Chow

Former Executive Vice President

State Street Corporation

Boston, MA

 

John A. Fry

President

Drexel University

Philadelphia, PA

 

Daniel V. Geatens

Vice President and

Treasurer

Delaware Funds

by Macquarie

Philadelphia, PA

   

Lucinda S. Landreth

Former Chief Investment

Officer

Assurant, Inc.

New York, NY

 

Frances A.

Sevilla-Sacasa

Former Chief Executive

Officer

Banco Itaú International

Miami, FL

 

 

Richard Salus

Senior Vice President and

Chief Financial Officer

Delaware Funds

by Macquarie

Philadelphia, PA

   

Thomas K. Whitford

Former Vice Chairman

PNC Financial Services Group

Pittsburgh, PA

 

Christianna Wood

Chief Executive Officer

and President

Gore Creek Capital, Ltd.

Golden, CO

 

Janet L. Yeomans

Former Vice President and

Treasurer

3M Company

St. Paul, MN

This annual report is for the information of Delaware Tax-Free USA Fund, Delaware Tax-Free USA Intermediate Fund, and Delaware National High-Yield Municipal Bond Fund shareholders, but it may be used with prospective investors when preceded or accompanied by the Delaware Fund fact sheet for the most recently completed calendar quarter. These documents are available at delawarefunds.com/literature.

 

 

Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT. Each Fund’s Forms N-PORT, as well as a description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities, are available without charge (i) upon request, by calling 800 523-1918; and (ii) on the SEC’s website at sec.gov. In addition, a description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities and the Schedules of Investments included in the Funds’ most recent Form N-PORT are available without charge on the Funds’ website at delawarefunds.com/literature. Each Fund’s Forms N-PORT may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330.

Information (if any) regarding how the Funds voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Funds’ website at delawarefunds.com/proxy; and (ii) on the SEC’s website at sec.gov.

 

148

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LOGO    LOGO

Annual report    

Fixed income mutual funds

Delaware Tax-Free Arizona Fund

Delaware Tax-Free California Fund

Delaware Tax-Free Colorado Fund

Delaware Tax-Free Idaho Fund

Delaware Tax-Free New York Fund

Delaware Tax-Free Pennsylvania Fund

August 31, 2020

 

Beginning on or about June 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of your Fund’s shareholder reports will no longer be sent to you by mail, unless you specifically request them from the Fund or from your financial intermediary, such as a broker/dealer, bank, or insurance company. Instead, you will be notified by mail each time a report is posted on the website and provided with a link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you do not need to take any action. You may elect to receive shareholder reports and other communications from the Fund electronically by signing up at delawarefunds.com/edelivery. If you own these shares through a financial intermediary, you may contact your financial intermediary.

You may elect to receive paper copies of all future shareholder reports free of charge. You can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by contacting us at 800 523-1918. If you own these shares through a financial intermediary, you may contact your financial intermediary to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with the Delaware Funds® by Macquarie or your financial intermediary.

Carefully consider the Funds’ investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Funds’ prospectus and their summary prospectuses, which may be obtained by visiting delawarefunds.com/literature or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.

You can obtain shareholder reports and prospectuses online instead of in the mail. Visit delawarefunds.com/edelivery.

 

        

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Experience Delaware Funds® by Macquarie

Macquarie Investment Management (MIM) is a global asset manager with offices in the United States, Europe, Asia, and Australia. As active managers, we prioritize autonomy and accountability at the investment team level in pursuit of opportunities that matter for clients. Delaware Funds is one of the longest-standing mutual fund families, with more than 80 years in existence.

If you are interested in learning more about creating an investment plan, contact your financial advisor.

You can learn more about Delaware Funds or obtain a prospectus for Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, Delaware Tax-Free New York Fund, and Delaware Tax-Free Pennsylvania Fund at delawarefunds.com/literature.

 

Manage your account online

 

●   Check your account balance and transactions

 

●   View statements and tax forms

 

●   Make purchases and redemptions

Visit delawarefunds.com/account-access.

Macquarie Asset Management (MAM) offers a diverse range of products including securities investment management, infrastructure and real asset management, and fund and equity-based structured products. MIM is the marketing name for certain companies comprising the asset management division of Macquarie Group. This includes the following investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, and Macquarie Investment Management Europe S.A.

The Funds are distributed by Delaware Distributors, L.P. (DDLP), an affiliate of MIMBT and Macquarie Group Limited.

Other than Macquarie Bank Limited (MBL), none of the entities noted are authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.

The Funds are governed by US laws and regulations.

Table of contents

 

Portfolio management review

      1  

Performance summaries

      10  

Disclosure of Fund expenses

      40  

Security type / sector / state / territory allocations

      44  

Schedules of investments

      50  

Statements of assets and liabilities

      104  

Statements of operations

      108  

Statements of changes in net assets

      110  

Financial highlights

      122  

Notes to financial statements

      158  

Report of independent registered public accounting firm

      178  

Other Fund information

      179  

Board of trustees / directors and officers addendum

      186  

About the organization

      194  

Unless otherwise noted, views expressed herein are current as of August 31, 2020, and subject to change for events occurring after such date.

The Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.

Advisory services provided by Delaware Management Company, a series of MIMBT, a US registered investment advisor.

All third-party marks cited are the property of their respective owners.

© 2020 Macquarie Management Holdings, Inc.

 

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Portfolio management review
Delaware Funds® by Macquarie state tax-free funds    September 8, 2020 (Unaudited)

 

Performance preview (for the year ended August 31, 2020)

 

Delaware Tax-Free Arizona Fund (Institutional Class shares)    1-year return    +2.05%    
Delaware Tax-Free Arizona Fund (Class A shares)    1-year return    +1.79%    
Bloomberg Barclays Municipal Bond Index (benchmark)    1-year return    +3.24%    
Lipper Other States Municipal Debt Funds Average    1-year return    +2.14%    

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free Arizona Fund, please see the table on page 10.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.

The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.

The Lipper Other States Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation on a specified city or state basis.

Please see page 14 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

Delaware Tax-Free California Fund (Institutional Class shares)    1-year return    +1.84%    
Delaware Tax-Free California Fund (Class A shares)    1-year return    +1.59%    
Bloomberg Barclays Municipal Bond Index (benchmark)    1-year return    +3.24%    
Lipper California Municipal Debt Funds Average    1-year return    +1.62%    

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free California Fund, please see the table on page 15.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.

The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.

The Lipper California Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation in California (double tax-exempt) or a city in California (triple tax-exempt).

Please see page 19 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

Delaware Tax-Free Colorado Fund (Institutional Class shares)    1-year return    +2.14%    
Delaware Tax-Free Colorado Fund (Class A shares)    1-year return    +1.88%    
Bloomberg Barclays Municipal Bond Index (benchmark)    1-year return    +3.24%    
Lipper Other States Municipal Debt Funds Average    1-year return    +2.14%    

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free Colorado Fund, please see the table on page 20.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.

The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.

The Lipper Other States Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation on a specified city or state basis.

Please see page 24 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

 

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Portfolio management review

Delaware Funds® by Macquarie state tax-free funds

 

        

 

Delaware Tax-Free Idaho Fund (Institutional Class shares)    1-year return    +2.02%    
Delaware Tax-Free Idaho Fund (Class A shares)    1-year return    +1.77%    
Bloomberg Barclays Municipal Bond Index (benchmark)    1-year return    +3.24%    
Lipper Other States Municipal Debt Funds Average    1-year return    +2.14%    

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free Idaho Fund, please see the table on page 25.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.

The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.

The Lipper Other States Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation on a specified city or state basis.

Please see page 29 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

Delaware Tax-Free New York Fund (Institutional Class shares)    1-year return    +2.03%    
Delaware Tax-Free New York Fund (Class A shares)    1-year return    +1.68%    
Bloomberg Barclays Municipal Bond Index (benchmark)    1-year return    +3.24%    
Lipper New York Municipal Debt Funds Average    1-year return    +0.95%    

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free New York Fund, please see the table on page 30.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.

The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.

The Lipper New York Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation in New York (double tax-exempt) or a city in New York (triple tax-exempt).

Please see page 34 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

Delaware Tax-Free Pennsylvania Fund (Institutional Class shares)    1-year return    +1.84%    
Delaware Tax-Free Pennsylvania Fund (Class A shares)    1-year return    +1.72%    
Bloomberg Barclays Municipal Bond Index (benchmark)    1-year return    +3.24%    
Lipper Pennsylvania Municipal Debt Funds Average    1-year return    +1.84%    

Past performance does not guarantee future results.

For complete, annualized performance for Delaware Tax-Free Pennsylvania Fund, please see the table on page 35.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.

The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.

The Lipper Pennsylvania Municipal Debt Funds Average compares funds that limit assets to those securities that are exempt from taxation in Pennsylvania (double tax-exempt) or a city in Pennsylvania (triple tax-exempt).

Please see page 39 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

 

2

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Investment objectives

Delaware Tax-Free Arizona Fund seeks as high a level of current income exempt from federal income tax and from the Arizona state personal income tax as is consistent with preservation of capital.

Delaware Tax-Free California Fund seeks as high a level of current income exempt from federal income tax and from the California state personal income tax as is consistent with preservation of capital.

Delaware Tax-Free Colorado Fund seeks as high a level of current income exempt from federal income tax and from the personal income tax in Colorado as is consistent with preservation of capital.

Delaware Tax-Free Idaho Fund seeks as high a level of current income exempt from federal income tax and from Idaho personal income taxes as is consistent with preservation of capital.

Delaware Tax-Free New York Fund seeks as high a level of current income exempt from federal income tax and from New York state personal income taxes as is consistent with preservation of capital.

Delaware Tax-Free Pennsylvania Fund seeks as high a level of current income exempt from federal income tax and from Pennsylvania state personal income tax as is consistent with preservation of capital.

 

 

Economic backdrop

For most of the first half of the fiscal year ended August 31, 2020, the US economy continued along its steady growth path with historically low unemployment. In both the third and fourth calendar quarters of 2019, the nation’s gross domestic product (GDP) – a measure of national economic output – rose by an annualized 2.1%. Meanwhile, the US jobless rate remained at or near a half-century low throughout 2019 and into 2020, reaching a low of 3.9% in September 2019.

Starting in February 2020, however, global economic conditions began to dramatically worsen as the full social and financial impact of the coronavirus pandemic became evident. Quarantine orders mounted across the country and around the world, economic activity ground to a halt, and job losses grew by the millions. US GDP shrank by an annualized 5.0% in the first quarter of 2020 and then by an annualized 31.7% in the second quarter, the worst quarterly economic contraction in US history.

Both the US Federal Reserve and the federal government took aggressive action to attempt to

ease this economic damage. In early March, the Fed cut the federal funds rate, its benchmark short-term interest rate, by 0.50 percentage points. Two weeks later, it cut the federal funds rate by another full percentage point, bringing it to essentially zero, where it stood throughout the remainder of the fiscal year. Further, in late March, the federal government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a $2 trillion economic stimulus bill focused on providing support to individuals and businesses hurt by the economic fallout.

After the United States lost 20.5 million jobs in April 2020, the US unemployment rate soared to 14.7%, the highest level seen since the Great Depression. As economies around the country gradually reopened, however, the national economic picture slowly improved. By August, the US jobless rate fell to 8.4% – still historically high, though a significant improvement from earlier in the year – as some workers returned to their positions after temporary layoffs.

Sources: US Bureau of Economic Analysis, US Bureau of Labor Statistics, and Bloomberg.

 

 

 

3

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Portfolio management review
Delaware Funds® by Macquarie state tax-free funds        

 

Municipal bond market conditions

Overall, the municipal bond market, as measured by the Bloomberg Barclays Municipal Bond Index, returned 3.24% for the fiscal year ended August 31, 2020.

When describing market conditions, we can divide the fiscal year into three distinct periods. The first covers September 2019 through March 9, 2020, during which municipal bonds enjoyed solid performance amid favorable demand for tax-exempt securities, coupled with relatively limited supply. In this environment, longer-duration, lower-rated securities generally outperformed their shorter-maturity, more highly rated counterparts, as many investors accepted greater interest rate risk and credit risk in exchange for higher yields. During this period, the municipal bond market, as measured by the Bloomberg Barclays Municipal Bond Index, gained 3.04%.

Starting on March 10, however, conditions for investors in municipal bonds abruptly shifted. With mounting concern about the coronavirus, market volatility soared, liquidity dried up, and more highly leveraged institutional investors were forced to unload their municipal debt. Investors, eager for safety, bid up prices of more highly rated, shorter-term bonds, while lower-quality, longer-term issues lagged, reflecting their increased credit and duration risk. Between March 10 and April 30, the Bloomberg Barclays Municipal Bond Index declined 4.84%, with most of that loss coming during two especially difficult weeks in March. Lower-investment-grade and below-investment-grade bonds performed notably poorly during this roughly seven-week stretch, declining 11.85% and 14.00%, respectively.

Finally, between May and the end of the fiscal year on August 31, municipal securities rallied strongly, with the Bloomberg Barclays Municipal Bond Index gaining 5.29%. Better-than-expected national economic data and heightened demand for tax-exempt bonds, especially lower-rated

issues that had fallen disproportionately during the market’s earlier downturn, boosted the asset class.

Looking at the full fiscal year, the following tables indicate that bonds with intermediate maturities generally outperformed their shorter- and longer-dated counterparts, while more highly rated issues fared better than lower-rated bonds.

 

Returns by maturity   

1 year

      1.95 % 

3 years

      2.88 % 

5 years

      3.51 % 

10 years

      3.53 % 

22+ years

      3.05 % 

 

Returns by credit rating   

AAA

      4.03 % 

AA

      3.58 % 

A

      2.75 % 

BBB

      1.33 % 

 

Source: Bloomberg.

Economic backdrop in the states

Arizona’s economy has shown some resilience relative to the national economy, even with the pandemic’s spread in the state. Its unemployment rate as of July was 10.6%, down from 12.6% in April, but above national levels. Arizona’s fiscal year 2020 revenues are expected to finish 8% below estimates due to the coronavirus, with fiscal year 2021 General Fund revenues down 7% from expectations. The two-year combined revenue loss is $1.63 billion. Arizona is getting $1.85 billion in CARES Act funding. The 2021 budget contains no new spending aside from teacher salary increases. In the second quarter of 2020, the governor added $55 million to spending for virus-related costs. (Sources: bls.gov, bea.gov, ncsl.org.)

California’s unemployment rate had been 3.9% from December 2019 to February 2020 before

 

 

 

4

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rising to 5.5% in March and 16.4% in April, then easing to 16.3% in May and 13.3% in July. Only Maine, New York, Massachusetts, Nevada, New Jersey, and Pennsylvania have higher unemployment rates. The fiscal year 2021 budget of $143 billion includes $14 billion of federal funding not yet approved. If not received by October, the state will have to cut the same amount out of the budget for the balance of the year. The 2021 budget is nearly $10 billion lower than original projections. The coronavirus pandemic has moved the state from a $17.9 billion surplus to a $16 billion deficit by fiscal year 2024, with a total of $54 billion in lost revenues due to the coronavirus. The budget surplus will be drawn over three years. The 2021 budget has personal tax revenues down 18.9% from 2020 and sales tax revenues down 17.4%. The 2021 budget has no decrease for K-12 education and community colleges but does cut university funding by $1 billion. In what could be a positive sign, state tax withholding revenues from March through June were down 3% from 2019. The state received $9.52 billion in CARES Act funding. (Sources: bls.gov, dof.ca.gov.)

Colorado’s General Fund revenue declines due to the pandemic in 2020-2022 fiscal years are $1.3 billion, $3.2 billion, and $2.4 billion, respectively. A total of $228.7 million of budget adjustments were made in the second quarter of 2020 to meet the balanced budget requirement for fiscal year 2020. Statutory budgeted reserves of 7.5% of expenditures for 2020 are $653 million below specifications at $340 million. In 2020, personal income tax revenues, sales taxes, and corporate taxes are 5.6%, 1.8%, and 37% below expectations, respectively. The state unemployment rate, which had been 2.5% for the three months before the pandemic, rose to 5.2% in March and 12.2% in April, then dropped to 10.2% in May and 7.4% in July, below national

levels. Colorado is receiving $1.67 billion in CARES Act funding. (Sources: bls.gov, bea.gov, ncsl.org.)

Idaho had several months of below 3% unemployment prior to the coronavirus. Its unemployment rate rose to 11.8% in April before falling to 8.9% in May and 5% in July, the third lowest of any state. Idaho state tax revenues in May came in $42.9 million above forecasts. The state General Fund shortfall through May was down to $313 million from $356 million a month earlier. June brought in more revenues than expected and the state rainy-day fund of $580 million will not be needed to cover any revenue shortfalls for fiscal year 2021. The governor had asked for across-the-board 1% spending cuts pre-pandemic, and while most states had pushed back their tax payment day by three months, from April 15 to July 15, Idaho moved it back only two months to keep the tax revenues in fiscal year 2020. Idaho received $1.25 billion in CARES Act funding. (Sources: bls.gov, dfm.idaho.gov.)

New York is the only state with a March 31 fiscal year, which caused immediate cuts to spending based on expected revenue losses from the coronavirus. Total revenue declines are expected to be $12 billion for fiscal year 2021 and as much as $69 billion through fiscal year 2024. Medicaid cuts for 2021 are $2.1 billion. The state is holding back aid to localities by 20%. New York is receiving 5% of the CARES Act funding ($5.2 billion), though it makes up 8% of national GDP and, at the peak, accounted for 15% of coronavirus cases. New York unemployment rose from 3.7% in February to 4.1% in March, then 15.3% in April, 14.5% in May, 15.6% in June, and 15.9% in July – the only state seeing unemployment rates higher in July than in June. New York City, which accounts for more than half of the state’s GDP, had an unemployment rate of 19.8% for July. (Sources: bls.gov, bea.gov, ncsl.org, budget.ny.gov.)

 

 

 

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Portfolio management review
Delaware Funds® by Macquarie state tax-free funds        

 

Pennsylvania passed a five-month temporary budget for fiscal year 2021 at frozen spending levels with no tax increases to get a better handle on projected revenue losses from the coronavirus pandemic for all departments except education and health and human services, which received 12-month funding. The fiscal year 2020 budget was in a $3.2 billion deficit with revenues down 9%. Fiscal year 2021 has projected revenue declines of $4.8 billion relative to original estimates. Pennsylvania received $3.9 billion in CARES Act funding. The state deposited $250 million into its rainy-day fund for 2021, which had fallen to $22.5 million. The state unemployment rate is falling more slowly than the rest of the nation, reaching a high of 15.1% in April and dropping to only 13.7% for July, more than 3% above national levels. Prior to the pandemic, per capita income growth in the first quarter of 2020 was 1.8%. Standard & Poor’s recently changed the commonwealth’s A+ rating outlook from stable to negative due to structural budget issues. (Sources: bls.gov, bea.gov, census.gov, ncsl.org, budget.pa.gov, revenue.pa.gov.)

A consistent management approach

For all the Funds highlighted in this report, we maintained the same management strategy we employ in all market conditions. We follow a bottom-up (bond by bond) investment approach, which means we select bonds on an issuer-by-issuer basis, based on our team’s thorough credit research. We regularly seek bonds that offer the Funds’ shareholders what we view as an attractive trade-off between reward potential and risk.

Following this approach, we generally maintain less exposure to highly rated, lower yielding bonds and more exposure to bonds with lower-investment-grade or below-investment-grade credit ratings. We believe that by focusing on higher yielding securities that have solid underlying credit quality, we have more

opportunity to add value for the Funds’ shareholders. That said, in certain states, particularly those with more constrained municipal supply, it can sometimes be difficult to add as many lower-rated, higher yielding bonds to these Funds’ portfolios as we would ordinarily prefer. In such an environment, we look to achieve an appropriate balance of risk and reward while remaining ready to invest in suitable lower-rated issues when they present themselves.

As of fiscal year end on August 31, 2020, roughly 42.2% of the net assets of Delaware Tax-Free Arizona Fund were invested in bonds with lower-investment-grade credit ratings (A and BBB). Approximately 47.9% of the net assets of Delaware Tax-Free California Fund were invested in these same credit tiers, while Delaware Tax-Free Colorado Fund’s holdings in lower-investment-grade bonds totaled about 42.5% of net assets. Meanwhile, Delaware Tax-Free Idaho Fund’s exposure to bonds rated A and BBB was roughly 39.5% of the Fund’s net assets, compared with about 50.0% and 50.3%, respectively, for Delaware Tax-Free New York Fund and Delaware Tax-Free Pennsylvania Fund.

All six Funds also maintained allocations to high yield municipal bonds, those with credit ratings below BBB. As indicated in the prospectus, the Funds may hold up to 20% of their net assets in high yield debt, although these allocations remained below that threshold throughout the fiscal year. When investing in the high yield market segment, we thoroughly analyze the securities’ credit risk and emphasize those bonds that we believe offer a favorable risk-reward balance.

Tactical investment opportunities

For the first part of the fiscal year – roughly the period between September 2019 and the pandemic-fueled market selloff in March – we tended to limit our activity in the Funds’ portfolios.

 

 

6

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This approach reflected our assessment that the Funds were well positioned with many older bonds that had been issued in times of higher interest rates. This meant they offered a level of income that would be difficult to replace through the purchase of newer bonds.

Market conditions shifted dramatically, however, with the arrival of the coronavirus. In March, demand for municipal bonds suddenly weakened, and an environment of mutual fund inflows across the market turned into one of rapid outflows. We quickly determined this outflow trend was likely to worsen. As a result, we decided to raise cash in these Funds by selling bonds in an orderly way. Our goal was to preserve each Fund’s positioning as best we could, to be able to satisfy shareholder redemptions while avoiding having to sell securities at temporarily depressed prices. We believe these proactive sales worked to shareholders’ benefit, as the Funds had enough cash on hand to meet the redemption requests we received.

Beginning in April, municipal market conditions began to improve, reflecting aggressive economic stimulus and investors’ optimism about state economies around the country beginning to reopen. In this environment, we saw opportunities to purchase bonds priced significantly lower than what we believed was justified given these securities’ underlying credit quality. We embraced this strategy across all the municipal mutual funds we manage, even as supply constraints in certain state municipal bond markets sometimes made it difficult to execute it as frequently as we would have preferred.

We also employed a tax-loss swapping strategy to varying degrees in all six Funds. This approach entailed selling existing holdings at a loss (which can be applied against future capital gains) and using the sale proceeds to buy bonds with similar risk characteristics but higher yields.

Notable performance factors

For the fiscal year, longer-duration bonds – those with more sensitivity to interest rates – outperformed bonds with shorter durations. At the same time, bonds with higher credit ratings outperformed lower-quality bonds, which suffered disproportionately during the market’s March downturn. Many of the Funds’ strongest and weakest performers during the fiscal year reflected these performance trends.

For the 12-month period, tobacco-securitization bonds were among the strongest performers overall in the municipal bond marketplace and for some of the Funds profiled in this report. These securities have benefited as tobacco consumption trends have weakened more slowly than expected. In addition, because many tobacco issuers have refinanced their outstanding debt, older, higher yielding bonds have benefited from their scarcity. The tobacco-bond positions in Delaware Tax-Free California Fund and Delaware Tax-Free New York Fund gained nearly 23% and more than 5%, respectively. Along with being helped by the factors that lifted the overall tobacco sector, the California securities further benefited from being zero-coupon bonds, which, owing to their high durations (interest rate sensitivity), rose to a greater extent as rates declined.

Puerto Rico sales-tax bonds, known as COFINA bonds, were also notably strong performers for Delaware Tax-Free Arizona Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund, with gains that hovered around 7%. COFINA bonds benefited from strong investor demand due to the securities’ fully tax-exempt status (bonds of US territories are generally tax-exempt for residents in all 50 states), as well as Puerto Rico’s better-than-expected fiscal position.

 

 

7

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Portfolio management review
Delaware Funds® by Macquarie state tax-free funds        

 

Bonds for the Edkey charter school project also contributed to performance for Delaware Tax-Free Arizona Fund. The Fund’s position in these bonds – which were rated BB-, with a final maturity date of 2048 and 6% coupon – gained more than 7% for the fiscal year, reflecting the issuer’s slow but steady fundamental improvement. Meanwhile, gradually better credit fundamentals helped lift the performance of a California charter school bond issue for Escuela Popular Del Pueblo, which gained 10% for Delaware Tax-Free California Fund.

The most notable individual contributor for Delaware Tax-Free Colorado Fund was a position in A-rated North Colorado Medical Center hospital bonds, with a 4% coupon and a 2032 final maturity date. These bonds were refunded during the fiscal year, resulting in a near 10% gain for the Fund.

In Delaware Tax-Free Idaho Fund, the Fund’s leading individual performer was an issue from Nampa Development Corp., an urban renewal agency in the state. These A-rated bonds were refunded during the fiscal year, resulting in a gain of more than 16% for the Fund.

In Delaware Tax-Free Pennsylvania Fund, the most notable individual performer was an investment in bonds issued for Procter & Gamble, rated AA- and which gained more than 6% due to their generally higher credit quality and noncallable nature. Healthcare bonds for Allegheny Health Network also added value to the Fund’s performance. These A-rated healthcare securities, which offered a 4% coupon and had a 2044 final maturity, gained more than 5% for the Fund.

Turning to detractors, many of the market’s weakest performers over the 12-month period included bonds of healthcare issuers, especially those of senior living operators, which struggled amid concern about how the coronavirus would affect their finances.

Delaware Tax-Free Arizona Fund, for example, showed particularly weak results from holdings in continuing care retirement community (CCRC) bonds for Great Lakes Senior Living Communities. These BBB-rated senior housing bonds lost more than 20% for the Fund. CCRC bonds for Mirabella at ASU, a privately owned retirement community on the campus of Arizona State University, also detracted from the Fund’s performance, declining close to 5%.

A position in Grand River Hospital District bonds, which fell more than 3%, weighed on Delaware Tax-Free Colorado Fund, while Valley Vista Care Corporation senior housing bonds, which lost more than 9%, were weak performers for Delaware Tax-Free Idaho Fund. The weakest-performing holding in Delaware Tax-Free New York Fund also came from the CCRC sector: bonds for Promenade Senior Living at University Place in Guilderland, N.Y., which declined nearly 22%.

The coronavirus pandemic also directly affected performance in other holdings in the Funds. For instance, in Delaware Tax-Free Pennsylvania Fund, we saw disappointing performance from lower-investment-grade higher education bonds for two Catholic liberal arts colleges, King’s College and Cabrini University. These and other smaller higher-education institutions with less certain financial positions have faced a particularly challenging operating environment during the fiscal year, and these issuers’ bond prices fell accordingly.

In Delaware Tax-Free California Fund, bonds of Goodwill Industries of Sacramento Valley and Northern Nevada struggled to a near 10% loss, as this operator of nonprofit retail facilities was forced to close its establishments for several months at the height of the pandemic.

 

 

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Delaware Tax-Free Colorado Fund’s holding in Denver Convention Center Hotel Authority bonds fell nearly 5%, reflecting a lack of hotel and convention business during the pandemic. Finally, in Delaware Tax-Free New York Fund, Metropolitan Transportation Authority bonds unsurprisingly struggled, falling close to 7%, as public transportation usage rapidly and sharply declined.

 

 

9

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Performance summaries
Delaware Tax-Free Arizona Fund    August 31, 2020 (Unaudited)

 

 

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.

 

Fund and benchmark performance1,2    Average annual total returns through August 31, 2020    
     1 year          5 year          10 year          Lifetime        

 

  

Class A (Est. April 1, 1991)

            

Excluding sales charge

      +1.79%        +3.44%        +3.51%        +5.12%    

Including sales charge

      -2.78%        +2.49%        +3.03%        +4.96%    

 

  

Class C (Est. May 25, 1994)

            

Excluding sales charge

      +1.03%        +2.67%        +2.73%        +3.94%    

Including sales charge

      +0.05%        +2.67%        +2.73%        +3.94%    

 

  

Institutional Class (Est. December 31, 2013)

            

Excluding sales charge

      +2.05%        +3.70%        –            +4.69%    

Including sales charge

      +2.05%        +3.70%        –            +4.69%    

 

  

Bloomberg Barclays Municipal Bond Index

      +3.24%        +3.99%        +3.98%        +4.48%*  

 

  

*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.

 

1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 12. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual

12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the

 

 

10

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time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than geographically diversified funds.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.

 

 

11

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Performance summaries

Delaware Tax-Free Arizona Fund

 

 

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding 0.59% of the Fund’s average daily net assets from September 1, 2019 to August 31, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.

 

Fund expense ratios    Class A   Class C       Institutional Class    

 

Total annual operating expenses
(without fee waivers)

    1.02%   1.77%   0.77%

Net expenses
(including fee waivers, if any)

    0.84%   1.59%   0.59%

Type of waiver

        Contractual           Contractual           Contractual    

 

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

 

12

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Performance of a $10,000 investment1 

Class A shares

Average annual total returns from August 31, 2010 through August 31, 2020

 

LOGO

 

 

For period beginning August 31, 2010 through August 31, 2020    Starting value    Ending value

 

 

LOGO  Bloomberg Barclays Municipal Bond Index

    $10,000    $14,768

LOGO Delaware Tax-Free Arizona Fund – Class A shares

      $9,550    $13,481

 

Institutional Class shares

Average annual total returns from December 31, 2013 (inception date) through August 31, 2020

 

 

LOGO

 

 

For period beginning December 31, 2013 through August 31, 2020    Starting value    Ending value

 

 

LOGO Delaware Tax-Free Arizona Fund – Institutional Class shares

    $10,000    $13,576

LOGO  Bloomberg Barclays Municipal Bond Index

    $10,000    $13,397

 

 

13

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Performance summaries

Delaware Tax-Free Arizona Fund

 

 

1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on August 31, 2010, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of August 31, 2010.

The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on December 31, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of December 31, 2013.

The graphs do not reflect the deduction of taxes the shareholders would pay on Fund distributions

or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 12. Please note additional details on pages 10 through 14.

The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

 

 

 

                     Nasdaq symbols                                CUSIPs            

Class A

    VAZIX      928916204

Class C

    DVACX    928916501

Institutional Class

    DAZIX      928916873

 

 

14

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Performance summaries
Delaware Tax-Free California Fund    August 31, 2020 (Unaudited)

 

 

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.

 

Fund and benchmark performance1,2    Average annual total returns through August 31, 2020    
     1 year          5 year          10 year          Lifetime        

 

  

Class A (Est. March 2, 1995)

            

Excluding sales charge

      +1.59%        +3.72%        +4.29%        +5.33%    

Including sales charge

      -3.00%        +2.77%        +3.81%        +5.14%    

 

  

Class C (Est. April 9, 1996)

            

Excluding sales charge

      +0.83%        +2.96%        +3.52%        +4.48%    

Including sales charge

      -0.15%        +2.96%        +3.52%        +4.48%    

 

  

Institutional Class (Est. December 31, 2013)

            

Excluding sales charge

      +1.84%        +3.98%        –            +5.08%    

Including sales charge

      +1.84%        +3.98%        –            +5.08%    

 

  

Bloomberg Barclays Municipal Bond Index

      +3.24%        +3.99%        +3.98%        +4.48%*  

 

  

*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.

 

1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 17. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual 12b-1

fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the

 

 

15

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Performance summaries

Delaware Tax-Free California Fund

 

 

time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than geographically diversified funds.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

 

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.

 

 

16

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2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding 0.57% of the Fund’s average daily net assets from September 1, 2019 to August 31, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.

 

Fund expense ratios    Class A   Class C       Institutional Class    

 

Total annual operating expenses
(without fee waivers)

    1.03%   1.78%   0.78%

Net expenses
(including fee waivers, if any)

    0.82%   1.57%   0.57%

Type of waiver

        Contractual           Contractual           Contractual    

 

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

 

17

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Performance summaries

Delaware Tax-Free California Fund

 

 

Performance of a $10,000 investment1 

Class A shares

Average annual total returns from August 31, 2010 through August 31, 2020

 

LOGO

 

 

For period beginning August 31, 2010 through August 31, 2020    Starting value    Ending value

 

 

LOGO  Bloomberg Barclays Municipal Bond Index

    $10,000    $14,768

LOGO Delaware Tax-Free California Fund – Class A shares

      $9,550    $14,529

 

Institutional Class shares

Average annual total returns from December 31, 2013 (inception date) through August 31, 2020

 

 

LOGO

 

 

For period beginning December 31, 2013 through August 31, 2020    Starting value    Ending value

 

 

LOGO Delaware Tax-Free California Fund — Institutional Class shares

    $10,000    $13,917

LOGO  Bloomberg Barclays Municipal Bond Index

    $10,000    $13,397

 

 

18

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1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on August 31, 2010, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of August 31, 2010.

The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on December 31, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of December 31, 2013.

The graphs do not reflect the deduction of taxes the shareholders would pay on Fund distributions

or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 17. Please note additional details on pages 15 through 19.

The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

 

 

 

                     Nasdaq symbols                                CUSIPs            

Class A

    DVTAX    928928829

Class C

    DVFTX    928928795

Institutional Class

    DCTIX      928928167

 

 

19

Table of Contents
Performance summaries
Delaware Tax-Free Colorado Fund    August 31, 2020 (Unaudited)

 

 

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.

 

Fund and benchmark performance1,2    Average annual total returns through August 31, 2020    
     1 year          5 year          10 year          Lifetime        

 

  

Class A (Est. April 23, 1987)

            

Excluding sales charge

      +1.88%        +3.59%        +3.70%        +5.56%    

Including sales charge

      -2.69%        +2.64%        +3.22%        +5.42%    

 

  

Class C (Est. May 5, 1994)

            

Excluding sales charge

      +1.12%        +2.81%        +2.92%        +4.03%    

Including sales charge

      +0.14%        +2.81%        +2.92%        +4.03%    

 

  

Institutional Class (Est. December 31, 2013)

            

Excluding sales charge

      +2.14%        +3.85%        –            +4.82%    

Including sales charge

      +2.14%        +3.85%        –            +4.82%    

 

  

Bloomberg Barclays Municipal Bond Index

      +3.24%        +3.99%        +3.98%        +4.48%*  

 

  

*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.

 

1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 22. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual 12b-1

fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the

 

 

20

Table of Contents

    

    

 

 

time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than geographically diversified funds.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.

 

 

21

Table of Contents

Performance summaries

Delaware Tax-Free Colorado Fund

 

 

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding 0.59% of the Fund’s average daily net assets from September 1, 2019 to August 31, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.

 

Fund expense ratios    Class A   Class C       Institutional Class    

 

Total annual operating expenses
(without fee waivers)

    0.97%   1.72%   0.72%

Net expenses
(including fee waivers, if any)

    0.84%   1.59%   0.59%

Type of waiver

        Contractual           Contractual           Contractual    

 

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

 

22

Table of Contents

    

    

 

 

Performance of a $10,000 investment1 

Class A shares

Average annual total returns from August 31, 2010 through August 31, 2020

 

LOGO

 

 

For period beginning August 31, 2010 through August 31, 2020    Starting value    Ending value

 

 

LOGO  Bloomberg Barclays Municipal Bond Index

    $10,000    $14,768

LOGO  Delaware Tax-Free Colorado Fund – Class A shares

      $9,550    $13,730

 

Institutional Class shares

Average annual total returns from December 31, 2013 (inception date) through August 31, 2020

 

LOGO

 

 

For period beginning December 31, 2013 through August 31, 2020    Starting value    Ending value

 

 

LOGO Delaware Tax-Free Colorado Fund – Institutional Class shares

    $10,000    $13,686

LOGO  Bloomberg Barclays Municipal Bond Index

    $10,000    $13,397

 

 

23

Table of Contents

Performance summaries

Delaware Tax-Free Colorado Fund

 

 

1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on August 31, 2010, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of August 31, 2010.

The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on December 31, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of December 31, 2013.

The graphs do not reflect the deduction of taxes the shareholders would pay on Fund distributions

or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 22. Please note additional details on pages 20 through 24.

The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

 

 

 

                     Nasdaq symbols                                CUSIPs            

Class A

    VCTFX    928920107

Class C

    DVCTX    92907R101

Institutional Class

    DCOIX    92907R200

 

 

24

Table of Contents
Performance summaries
Delaware Tax-Free Idaho Fund    August 31, 2020 (Unaudited)

 

 

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.

 

Fund and benchmark performance1,2    Average annual total returns through August 31, 2020    
     1 year          5 year          10 year          Lifetime        

 

  

Class A (Est. January 4, 1995)

            

Excluding sales charge

      +1.77%        +3.09%        +2.79%        +4.69%    

Including sales charge

      -2.82%        +2.15%        +2.31%        +4.51%    

 

  

Class C (Est. January 10, 1995)

            

Excluding sales charge

      +1.00%        +2.32%        +2.02%        +3.89%    

Including sales charge

      +0.02%        +2.32%        +2.02%        +3.89%    

 

  

Institutional Class (Est. December 31, 2013)

            

Excluding sales charge

      +2.02%        +3.35%        –            +4.04%    

Including sales charge

      +2.02%        +3.35%        –            +4.04%    

 

  

Bloomberg Barclays Municipal Bond Index

      +3.24%        +3.99%        +3.98%        +4.48%*  

 

  

*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.

 

1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 27. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual 12b-1

fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the

 

 

25

Table of Contents

Performance summaries

Delaware Tax-Free Idaho Fund

 

 

time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than geographically diversified funds.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.

 

 

26

Table of Contents

    

    

 

 

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding 0.61% of the Fund’s average daily net assets from September 1, 2019 to August 31, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.

 

Fund expense ratios    Class A   Class C       Institutional Class    

 

Total annual operating expenses
(without fee waivers)

    1.03%   1.78%   0.78%

Net expenses
(including fee waivers, if any)

    0.86%   1.61%   0.61%

Type of waiver

        Contractual           Contractual           Contractual    

 

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

 

27

Table of Contents

Performance summaries

Delaware Tax-Free Idaho Fund

 

 

Performance of a $10,000 investment1 

Class A shares

Average annual total returns from August 31, 2010 through August 31, 2020

 

LOGO

 

 

For period beginning August 31, 2010 through August 31, 2020    Starting value    Ending value

 

 

LOGO  Bloomberg Barclays Municipal Bond Index

    $10,000    $14,768

LOGO Delaware Tax-Free Idaho Fund – Class A shares

      $9,550    $12,572

 

Institutional Class shares

Average annual total returns from December 31, 2013 (inception date) through August 31, 2020

 

LOGO

 

 

For period beginning December 31, 2013 through August 31, 2020    Starting value    Ending value

 

 

LOGO  Bloomberg Barclays Municipal Bond Index

    $10,000    $13,397

LOGO Delaware Tax-Free Idaho Fund – Institutional Class shares

    $10,000    $13,022

 

 

28

Table of Contents

    

    

 

 

1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on August 31, 2010, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of August 31, 2010.

The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on December 31, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of December 31, 2013.

The graphs do not reflect the deduction of taxes the shareholders would pay on Fund distributions

or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 27. Please note additional details on pages 25 through 29.

The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

 

 

 

                     Nasdaq symbols                                CUSIPs            

Class A

    VIDAX    928928704

Class C

    DVICX    928928803

Institutional Class

    DTIDX    928928159

 

 

29

Table of Contents
Performance summaries
Delaware Tax-Free New York Fund    August 31, 2020 (Unaudited)

 

 

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.

 

Fund and benchmark performance1,2    Average annual total returns through August 31, 2020    
     1 year          5 year          10 year          Lifetime        

 

  

Class A (Est. November 6, 1987)

            

Excluding sales charge

      +1.68%        +3.52%        +3.84%        +5.45%    

Including sales charge

      -2.91%        +2.57%        +3.36%        +5.31%    

 

  

Class C (Est. April 26, 1995)

            

Excluding sales charge

      +0.92%        +2.75%        +3.06%        +3.88%    

Including sales charge

      -0.07%        +2.75%        +3.06%        +3.88%    

 

  

Institutional Class (Est. December 31, 2013)

            

Excluding sales charge

      +2.03%        +3.80%        –            +4.82%    

Including sales charge

      +2.03%        +3.80%        –            +4.82%    

 

  

Bloomberg Barclays Municipal Bond Index

      +3.24%        +3.99%        +3.98%        +4.48%*  

 

  

*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.

 

1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 32. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual 12b-1

fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the

 

 

30

Table of Contents

    

    

 

 

time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than geographically diversified funds.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.

 

 

31

Table of Contents

Performance summaries

Delaware Tax-Free New York Fund

 

 

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding 0.55% of the Fund’s average daily net assets from September 1, 2019 to August 31, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.

 

Fund expense ratios    Class A   Class C       Institutional Class    

 

Total annual operating expenses
(without fee waivers)

    1.07%   1.82%   0.82%

Net expenses
(including fee waivers, if any)

    0.80%   1.55%   0.55%

Type of waiver

        Contractual           Contractual       Contractual

 

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

 

32

Table of Contents

    

    

 

 

Performance of a $10,000 investment1 

Class A shares

Average annual total returns from August 31, 2010 through August 31, 2020

 

LOGO

 

 

For period beginning August 31, 2010 through August 31, 2020    Starting value    Ending value

 

 

LOGO  Bloomberg Barclays Municipal Bond Index

    $10,000    $14,768

LOGO Delaware Tax-Free New York Fund – Class A shares

      $9,550    $13,913

 

Institutional Class shares

Average annual total returns from December 31, 2013 (inception date) through August 31, 2020

 

LOGO

 

 

For period beginning December 31, 2013 through August 31, 2020    Starting value    Ending value

 

 

LOGO Delaware Tax-Free New York Fund – Institutional Class shares

    $10,000    $13,689

LOGO  Bloomberg Barclays Municipal Bond Index

    $10,000    $13,397

 

 

33

Table of Contents

Performance summaries

Delaware Tax-Free New York Fund

 

 

1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on August 31, 2010, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of August 31, 2010.

The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on December 31, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of December 31, 2013.

The graphs do not reflect the deduction of taxes the shareholders would pay on Fund distributions

or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 32. Please note additional details on pages 30 through 34.

The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

 

 

 

                     Nasdaq symbols                                CUSIPs            

Class A

    FTNYX    928928274

Class C

    DVFNX    928928258

Institutional Class

    DTNIX      928928142

 

 

34

Table of Contents
Performance summaries
Delaware Tax-Free Pennsylvania Fund    August 31, 2020 (Unaudited)

 

 

The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance quoted. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.

 

Fund and benchmark performance1,2    Average annual total returns through August 31, 2020    
     1 year      5 year      10 year      Lifetime  

 

  

Class A (Est. March 23, 1977)

            

Excluding sales charge

      +1.72%        +3.45%        +3.76%        +5.43%    

Including sales charge

      -2.87%        +2.51%        +3.29%        +5.32%    

 

  

Class C (Est. November 29, 1995)

            

Excluding sales charge

      +0.95%        +2.67%        +2.98%        +3.62%    

Including sales charge

      -0.03%        +2.67%        +2.98%        +3.62%    

 

  

Institutional Class (Est. December 31, 2013)

            

Excluding sales charge

      +1.84%        +3.70%        –            +4.71%    

Including sales charge

      +1.84%        +3.70%        –            +4.71%    

 

  

Bloomberg Barclays Municipal Bond Index

      +3.24%        +3.99%        +3.98%        +4.48%*  

 

  

*The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date.

 

1Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.

Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 37. Performance would have been lower had expense limitations not been in effect.

Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.

Class A shares are sold with a maximum front-end sales charge of 4.50%, and have an annual 12b-1

 

fee of 0.25% of average daily net assets. The Board has adopted a formula for calculating 12b-1 plan fees for the Fund’s Class A shares. The Fund’s Class A shares are currently subject to a blended 12b-1 fee equal to the sum of: (i) 0.10% of average daily net assets representing shares acquired prior to June 1, 1992, and (ii) 0.25% of average daily net assets representing shares acquired on or after June 1, 1992. All Class A shares currently bear 12b-1 fees at the same rate, the blended rate, currently 0.24% of average daily net assets, based on the formula described above. This method of calculating Class A 12b-1 fees may be discontinued at the sole discretion of the Board. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.

Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets.

 

 

35

Table of Contents

Performance summaries

Delaware Tax-Free Pennsylvania Fund

 

 

Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

Funds that invest primarily in one state may be more susceptible to the economic, regulatory, regional, and other factors of that state than geographically diversified funds.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local and/or the federal alternative minimum tax (AMT) that applies to certain investors. Capital gains, if any, are taxable.

Duration number will change as market conditions change. Therefore, duration should not be solely relied upon to indicate a municipal bond fund’s potential volatility.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR)

 

or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.

This document may mention bond ratings published by nationally recognized statistical rating organizations (NRSROs) Standard & Poor’s, Moody’s Investors Service, and Fitch, Inc. For securities rated by an NRSRO other than S&P, the rating is converted to the equivalent S&P credit rating. Bonds rated AAA are rated as having the highest quality and are generally considered to have the lowest degree of investment risk. Bonds rated AA are considered to be of high quality, but with a slightly higher degree of risk than bonds rated AAA. Bonds rated A are considered to have many favorable investment qualities, though they are somewhat more susceptible to adverse economic conditions. Bonds rated BBB are believed to be of medium-grade quality and generally riskier over the long term. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics, with BB indicating the least degree of speculation of the three.

 

 

36

Table of Contents

    

    

 

 

2The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) from exceeding 0.59% of the Fund’s average daily net assets from September 1, 2019 to August 31, 2020.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios.

 

Fund expense ratios    Class A   Class C       Institutional Class    

 

Total annual operating expenses
(without fee waivers)

    0.93%   1.69%   0.69%

Net expenses
(including fee waivers, if any)

    0.83%   1.59%   0.59%

Type of waiver

        Contractual           Contractual       Contractual

 

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

 

37

Table of Contents

Performance summaries

Delaware Tax-Free Pennsylvania Fund

 

 

Performance of a $10,000 investment1 

Class A shares

Average annual total returns from August 31, 2010 through August 31, 2020

 

 

LOGO

 

 

For period beginning August 31, 2010 through August 31, 2020    Starting value    Ending value

 

 

LOGO  Bloomberg Barclays Municipal Bond Index

    $10,000    $14,768

LOGO Delaware Tax-Free Pennsylvania Fund – Class A shares

      $9,550    $13,821

 

Institutional Class shares

Average annual total returns from December 31, 2013 (inception date) through August 31, 2020

 

LOGO

 

 

For period beginning December 31, 2013 through August 31, 2020    Starting value    Ending value

 

 

LOGO Delaware Tax-Free Pennsylvania Fund – Institutional Class shares

    $10,000    $13,590

LOGO  Bloomberg Barclays Municipal Bond Index

    $10,000    $13,397

 

 

38

Table of Contents

    

    

 

 

1The “Performance of a $10,000 investment” graph for Class A shares assumes $10,000 invested in Class A shares of the Fund on August 31, 2010, and includes the effect of a 4.50% front-end sales charge and the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of August 31, 2010.

The “Performance of a $10,000 investment” graph for Institutional Class shares assumes $10,000 invested in Institutional Class shares of the Fund on December 31, 2013, and includes the reinvestment of all distributions. The graph also assumes $10,000 invested in the Bloomberg Barclays Municipal Bond Index as of December 31, 2013.

The graphs do not reflect the deduction of taxes the shareholders would pay on Fund distributions

or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 37. Please note additional details on pages 35 through 39.

The Bloomberg Barclays Municipal Bond Index measures the total return performance of the long-term, investment grade tax-exempt bond market.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.

Performance of other Fund classes will vary due to different charges and expenses.

 

 

 

                     Nasdaq symbols                                CUSIPs            

Class A

    DELIX      233216100

Class C

    DPTCX    233216308

Institutional Class

    DTPIX      24609H701

 

 

39

Table of Contents

Disclosure of Fund expenses

For the six-month period from March 1, 2020 to August 31, 2020 (Unaudited)

 

 

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other Fund expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period from March 1, 2020 to August 31, 2020.

Actual expenses

The first section of the tables shown, “Actual Fund return,” provides information about actual account values and actual expenses. You may use the information in this section of the table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes

The second section of the tables shown, “Hypothetical 5% return,” provides information about hypothetical account values and hypothetical expenses based on a Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in each Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of each table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The Funds’ expenses shown in the tables reflect fee waivers in effect and assume reinvestment of all dividends and distributions.

 

40

Table of Contents

 

Delaware Tax-Free Arizona Fund

Expense analysis of an investment of $1,000

 

      Beginning
Account Value
3/1/20		    Ending
Account Value
8/31/20		    Annualized
Expense Ratio		    Expenses
Paid During Period
3/1/20 to 8/31/20*

Actual Fund return†

                    

Class A

        $1,000.00          $983.10          0.84%          $4.19  

Class C

        1,000.00          979.50          1.59%          7.91  

Institutional Class

        1,000.00          984.40          0.59%          2.94  

Hypothetical 5% return (5% return before expenses)

 

          

Class A

        $1,000.00          $1,020.91          0.84%          $4.27  

Class C

        1,000.00          1,017.14          1.59%          8.06  

Institutional Class

        1,000.00          1,022.17          0.59%          3.00  

Delaware Tax-Free California Fund

Expense analysis of an investment of $1,000

 

 

      Beginning
Account Value
3/1/20		    Ending
Account Value
8/31/20		    Annualized
Expense Ratio		    Expenses
Paid During Period
3/1/20 to 8/31/20*

Actual Fund return†

                    

Class A

        $1,000.00          $978.00          0.82%          $4.08  

Class C

        1,000.00          975.10          1.57%          7.79  

Institutional Class

        1,000.00          979.20          0.57%          2.84  

Hypothetical 5% return (5% return before expenses)

 

Class A

        $1,000.00          $1,021.01          0.82%          $4.17  

Class C

        1,000.00          1,017.24          1.57%          7.96  

Institutional Class

        1,000.00          1,022.27          0.57%          2.90  

 

41

Table of Contents

Disclosure of Fund expenses

For the six-month period from March 1, 2020 to August 31, 2020 (Unaudited)

 

 

Delaware Tax-Free Colorado Fund

Expense analysis of an investment of $1,000

 

      Beginning
Account Value
3/1/20		    Ending
Account Value
8/31/20		    Annualized
Expense Ratio		    Expenses
Paid During Period
3/1/20 to 8/31/20*

Actual Fund return†

                    

Class A

        $1,000.00          $986.90          0.84%          $4.20  

Class C

        1,000.00          983.30          1.59%          7.93  

Institutional Class

        1,000.00          988.20          0.59%          2.95  

Hypothetical 5% return (5% return before expenses)

 

          

Class A

        $1,000.00          $1,020.91          0.84%          $4.27  

Class C

        1,000.00          1,017.14          1.59%          8.06  

Institutional Class

        1,000.00          1,022.17          0.59%          3.00  

Delaware Tax-Free Idaho Fund

Expense analysis of an investment of $1,000

 

 

      Beginning
Account Value
3/1/20		    Ending
Account Value
8/31/20		    Annualized
Expense Ratio		    Expenses
Paid During Period
3/1/20 to 8/31/20*

Actual Fund return†

                    

Class A

        $1,000.00          $986.90          0.86%          $4.30  

Class C

        1,000.00          983.10          1.61%          8.03  

Institutional Class

        1,000.00          988.10          0.61%          3.05  

Hypothetical 5% return (5% return before expenses)

 

Class A

        $1,000.00          $1,020.81          0.86%          $4.37  

Class C

        1,000.00          1,017.04          1.61%          8.16  

Institutional Class

        1,000.00          1,022.07          0.61%          3.10  

 

42

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Delaware Tax-Free New York Fund

Expense analysis of an investment of $1,000

 

      Beginning
Account Value
3/1/20		    Ending
Account Value
8/31/20		    Annualized
Expense Ratio		   Expenses
Paid During Period
3/1/20 to 8/31/20*

Actual Fund return†

                   

Class A

      $ 1,000.00      $ 979.00        0.80 %     $ 3.98

Class C

        1,000.00        975.20        1.55 %       7.70

Institutional Class

        1,000.00        981.10        0.55 %       2.74

Hypothetical 5% return (5% return before expenses)

 

         

Class A

      $ 1,000.00      $ 1,021.11        0.80 %     $ 4.06

Class C

        1,000.00        1,017.34        1.55 %       7.86

Institutional Class

        1,000.00        1,022.37        0.55 %       2.80

Delaware Tax-Free Pennsylvania Fund

Expense analysis of an investment of $1,000

 

 

      Beginning
Account Value
3/1/20		    Ending
Account Value
8/31/20		    Annualized
Expense Ratio		   Expenses
Paid During Period
3/1/20 to 8/31/20*

Actual Fund return†

                   

Class A

      $ 1,000.00      $ 981.80        0.83 %     $ 4.13

Class C

        1,000.00        978.10        1.59 %       7.91

Institutional Class

        1,000.00        983.00        0.59 %       2.94

Hypothetical 5% return (5% return before expenses)

 

Class A

      $ 1,000.00      $ 1,020.96        0.83 %     $ 4.22

Class C

        1,000.00        1,017.14        1.59 %       8.06

Institutional Class

        1,000.00        1,022.17        0.59 %       3.00

 

*

“Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (to reflect the one-half year period).

 

†

Because actual returns reflect only the most recent six-month period, the returns shown may differ significantly from fiscal year returns.

In addition to the Funds’ expenses reflected above, each Fund also indirectly bears its portion of the fees and expenses of the investment companies (Underlying Funds) in which it invests. The tables above do not reflect the expenses of the Underlying Funds.

 

43

Table of Contents
Security type / sector / state / territory allocations
Delaware Tax-Free Arizona Fund    As of August 31, 2020 (Unaudited)

 

 

Sector designations may be different than the sector designations presented in other Fund materials.

 

Security type / sector    Percentage of net assets            

Municipal Bonds*

        97.90 %

Corporate Revenue Bonds

        6.76 %

Education Revenue Bonds

        24.46 %

Electric Revenue Bonds

        5.57 %

Healthcare Revenue Bonds

        21.20 %

Lease Revenue Bonds

        5.58 %

Local General Obligation Bonds

        4.36 %

Pre-Refunded Bonds

        4.34 %

Special Tax Revenue Bonds

        12.84 %

State General Obligation Bonds

        1.30 %

Transportation Revenue Bonds

        5.13 %

Water & Sewer Revenue Bonds

        6.36 %

Short-Term Investments

        1.25 %

Total Value of Securities

        99.15 %

Receivables and Other Assets Net of Liabilities

        0.85 %

Total Net Assets

        100.00 %                         

* As of the date of this report, Delaware Tax-Free Arizona Fund held bonds issued by or on behalf of territories and the states of the US as follows:

 

State / territory    Percentage of net assets            

Arizona

        85.87 %

Guam

        1.98 %

Puerto Rico

        11.30 %

Total Value of Securities

        99.15 %                        

 

44

Table of Contents
Security type / sector / state / territory allocations
Delaware Tax-Free California Fund    As of August 31, 2020 (Unaudited)

 

 

Sector designations may be different than the sector designations presented in other Fund materials.

 

Security type / sector    Percentage of net assets            

Municipal Bonds*

        96.90 %

Corporate Revenue Bonds

        7.31 %

Education Revenue Bonds

        31.34 %

Electric Revenue Bonds

        0.84 %

Healthcare Revenue Bonds

        17.58 %

Housing Revenue Bonds

        3.85 %

Lease Revenue Bonds

        7.08 %

Local General Obligation Bonds

        1.82 %

Pre-Refunded Bonds

        3.91 %

Special Tax Revenue Bonds

        9.04 %

State General Obligation Bonds

        4.83 %

Transportation Revenue Bonds

        9.30 %

Short-Term Investments

        1.12 %

Total Value of Securities

        98.02 %

Receivables and Other Assets Net of Liabilities

        1.98 %

Total Net Assets

        100.00 %                         

* As of the date of this report, Delaware Tax-Free California Fund held bonds issued by or on behalf of territories and the states of the US as follows:

 

State / territory    Percentage of net assets            

California

        88.43 %

Puerto Rico

        9.59 %

Total Value of Securities

        98.02 %                        

 

45

Table of Contents
Security type / sector / state / territory allocations
Delaware Tax-Free Colorado Fund    As of August 31, 2020 (Unaudited)

 

 

Sector designations may be different than the sector designations presented in other Fund materials.

 

Security type / sector    Percentage of net assets            

Municipal Bonds*

        98.60 %

Corporate Revenue Bonds

        3.23 %

Education Revenue Bonds

        11.94 %

Electric Revenue Bonds

        3.88 %

Healthcare Revenue Bonds

        25.76 %

Housing Revenue Bonds

        0.09 %

Lease Revenue Bonds

        2.04 %

Local General Obligation Bonds

        11.32 %

Pre-Refunded Bonds

        6.64 %

Special Tax Revenue Bonds

        18.84 %

State General Obligation Bonds

        1.32 %

Transportation Revenue Bonds

        11.03 %

Water & Sewer Revenue Bonds

        2.51 %

Short-Term Investments

        0.52 %

Total Value of Securities

        99.12 %

Receivables and Other Assets Net of Liabilities

        0.88 %

Total Net Assets

        100.00 %                         

* As of the date of this report, Delaware Tax-Free Colorado Fund held bonds issued by or on behalf of territories and the states of the US as follows:

 

State / territory    Percentage of net assets            

Colorado

        89.14 %

Guam

        1.70 %

Idaho

        0.29 %

Puerto Rico

        7.53 %

US Virgin Islands

        0.46 %

Total Value of Securities

        99.12 %                        

 

46

Table of Contents
Security type / sector / state / territory allocations
Delaware Tax-Free Idaho Fund    As of August 31, 2020 (Unaudited)

 

 

Sector designations may be different than the sector designations presented in other Fund materials.

 

Security type / sector    Percentage of net assets            

Municipal Bonds*

        97.15 %

Corporate Revenue Bonds

        3.11 %

Education Revenue Bonds

        14.92 %

Electric Revenue Bonds

        4.12 %

Healthcare Revenue Bonds

        9.33 %

Housing Revenue Bonds

        4.36 %

Lease Revenue Bonds

        10.67 %

Local General Obligation Bonds

        22.19 %

Pre-Refunded Bonds

        6.38 %

Special Tax Revenue Bonds

        16.31 %

State General Obligation Bonds

        1.77 %

Transportation Revenue Bonds

        2.69 %

Water & Sewer Revenue Bonds

        1.30 %

Short-Term Investments

        1.84 %

Total Value of Securities

        98.99 %

Receivables and Other Assets Net of Liabilities

        1.01 %

Total Net Assets

        100.00 %                         

* As of the date of this report, Delaware Tax-Free Idaho Fund held bonds issued by or on behalf of territories and the states of the US as follows:

 

State / territory    Percentage of net assets            

Guam

        4.99 %

Idaho

        81.81 %

Puerto Rico

        11.95 %

US Virgin Islands

        0.24 %

Total Value of Securities

        98.99 %                        

 

47

Table of Contents
Security type / sector / state / territory allocations
Delaware Tax-Free New York Fund    As of August 31, 2020 (Unaudited)

 

 

Sector designations may be different than the sector designations presented in other Fund materials.

 

Security type / sector    Percentage of net assets            

Municipal Bonds*

        98.59 %

Corporate Revenue Bonds

        6.11 %

Education Revenue Bonds

        19.36 %

Electric Revenue Bonds

        6.69 %

Healthcare Revenue Bonds

        13.77 %

Lease Revenue Bonds

        6.82 %

Local General Obligation Bond

        0.71 %

Pre-Refunded Bonds

        4.55 %

Resource Recovery Revenue Bond

        1.76 %

Special Tax Revenue Bonds

        19.01 %

State General Obligation Bonds

        1.29 %

Transportation Revenue Bonds

        11.89 %

Water & Sewer Revenue Bonds

        6.63 %

Short-Term Investments

        0.46 %

Total Value of Securities

        99.05 %

Receivables and Other Assets Net of Liabilities

        0.95 %

Total Net Assets

        100.00 %                        

* As of the date of this report, Delaware Tax-Free New York Fund held bonds issued by or on behalf of territories and the states of the US as follows:

 

State / territory    Percentage of net assets            

Guam

        0.28 %

New York

        89.88 %

Puerto Rico

        8.89 %

Total Value of Securities

        99.05 %                        

 

48

Table of Contents
Security type / sector / state / territory allocations
Delaware Tax-Free Pennsylvania Fund    As of August 31, 2020 (Unaudited)

 

 

Sector designations may be different than the sector designations presented in other Fund materials.

 

Security type / sector    Percentage of net assets            

Municipal Bonds*

        98.50 %

Corporate Revenue Bonds

        7.54 %

Education Revenue Bonds

        12.15 %

Electric Revenue Bonds

        0.86 %

Healthcare Revenue Bonds

        38.22 %

Housing Revenue Bond

        0.45 %

Lease Revenue Bonds

        1.16 %

Local General Obligation Bonds

        4.53 %

Pre-Refunded/Escrowed to Maturity Bonds

        8.01 %

Special Tax Revenue Bonds

        12.90 %

State General Obligation Bonds

        2.68 %

Transportation Revenue Bonds

        8.70 %

Water & Sewer Revenue Bonds

        1.30 %

Short-Term Investments

        0.35 %

Total Value of Securities

        98.85 %

Receivables and Other Assets Net of Liabilities

        1.15 %

Total Net Assets

        100.00 %                        

* As of the date of this report, Delaware Tax-Free Pennsylvania Fund held bonds issued by or on behalf of territories and the states of the US as follows:

 

State / territory    Percentage of net assets            

Pennsylvania

        87.85 %

Puerto Rico

        11.00 %

Total Value of Securities

        98.85 %                        

 

49

Table of Contents
Schedules of investments
Delaware Tax-Free Arizona Fund    August 31, 2020

 

 

     Principal amount°      Value (US $)  

Municipal Bonds – 97.90%

                  

Corporate Revenue Bonds – 6.76%

      

Chandler Industrial Development Authority Revenue

      

(Intel Corporation Project) 2.70% 12/1/37 (AMT)•

      1,000,000      $ 1,053,710  

Pima County Industrial Development Authority Pollution Control Revenue

      

(Tucson Electric Power) Series A 5.25% 10/1/40

      1,600,000        1,604,256  

Salt Verde Financial Senior Gas Revenue

      

5.00% 12/1/37

      2,000,000        2,738,260  
     

 

 

  
             5,396,226  
     

 

 

  

Education Revenue Bonds – 24.46%

      

Arizona Industrial Development Authority Revenue

      

(Academies of Math & Science Projects) Series A 5.00% 7/1/51

      1,000,000        1,151,400  

(ACCEL Schools Project) Series A 144A 5.25% 8/1/48 #

      350,000        364,462  

(American Charter Schools Foundation Project)

      

144A 6.00% 7/1/37 #

      250,000        278,977  

144A 6.00% 7/1/47 #

      400,000        439,344  

(Doral Academy of Nevada - Fire Mesa and Red Rock Campus Projects)
Series A 144A 5.00% 7/15/49 #

      375,000        390,199  

(Empower College Prep Project) 144A 6.00% 7/1/49 #

      500,000        529,810  

(Equitable School Revolving Fund) Series A 4.00% 11/1/49

      1,600,000        1,789,696  

(Odyssey Preparatory Academy Project) Series A 144A 5.50% 7/1/52 #

      375,000        403,301  

(Pinecrest Academy of Nevada-Horizon, Inspirada and St. Rose Campus Projects) Series A 144A 5.75% 7/15/48 #

      250,000        273,768  

(Somerset Academy of Las Vegas - Lone Mountain Campus Project) Series A 144A 5.00% 12/15/49 #

      500,000        506,390  

Arizona State University Energy Management Revenue

      

(Arizona State University Tempe Campus II Project)

      

4.50% 7/1/24

      1,000,000        1,003,310  

Glendale Industrial Development Authority Revenue

      

(Midwestern University)

      

5.00% 5/15/31

      645,000        673,767  

 

50

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

 

Education Revenue Bonds (continued)

      

Maricopa County Industrial Development Authority Revenue

      

(Arizona Autism Charter Schools Project)

      

Series A 144A 5.00% 7/1/40 #

      500,000      $           529,230  

(Creighton University Project) 4.00% 7/1/50

      1,000,000        1,079,250  

(GreatHearts Arizona Projects)

      

Series A 5.00% 7/1/52

      725,000        845,140  

(Reid Traditional Schools Projects) 5.00% 7/1/47

      785,000        861,428  

McAllister Academic Village Revenue

      

(Arizona State University Hassayampa Academic Village Project) 5.00% 7/1/31

      500,000        607,255  

Phoenix Industrial Development Authority

      

(Choice Academies Project) 5.625% 9/1/42

      1,250,000        1,276,325  

(Eagle College Preparatory Project) Series A 5.00% 7/1/43

      500,000        504,580  

(Great Hearts Academic Project) 5.00% 7/1/46

      1,000,000        1,075,020  

(Rowan University Project) 5.00% 6/1/42

      2,000,000        2,075,780  

Pima County Industrial Development Authority Education Revenue

      

(American Leadership Academy Project)

      

144A 5.00% 6/15/47 #

      100,000        100,297  

144A 5.00% 6/15/52 #

      90,000        90,191  

(Edkey Charter School Project) 6.00% 7/1/48

      1,000,000        1,012,710  

(Tucson Country Day School Project) 5.00% 6/1/37

      750,000        750,367  

University of Arizona Board of Regents

      

Series A 4.00% 6/1/44

      475,000        548,701  

Series A 5.00% 6/1/25

      335,000        361,924  
     

 

 

  
     19,522,622  
     

 

 

  

Electric Revenue Bonds – 5.57%

      

Puerto Rico Electric Power Authority Revenue

      

Series A 5.05% 7/1/42 ‡

      55,000        37,950  

Series AAA 5.25% 7/1/25 ‡

      35,000        24,194  

Series WW 5.00% 7/1/28 ‡

      245,000        169,050  

Series XX 4.75% 7/1/26 ‡

      35,000        23,975  

Series XX 5.25% 7/1/40 ‡

      355,000        245,394  

 

51

Table of Contents

Schedules of investments

Delaware Tax-Free Arizona Fund

 

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

 

Electric Revenue Bonds (continued)

      

Puerto Rico Electric Power Authority Revenue

      

Series XX 5.75% 7/1/36 ‡

      125,000      $           87,187  

Series ZZ 4.75% 7/1/27 ‡

      30,000        20,550  

Series ZZ 5.25% 7/1/24 ‡

      45,000        31,106  

Salt River Project Agricultural Improvement & Power District Electric System Revenue

      

Series A 5.00% 1/1/39

      2,000,000        2,512,340  

Series A 5.00% 1/1/47

      1,000,000        1,291,330  
     

 

 

  
     4,443,076  
     

 

 

  

Healthcare Revenue Bonds – 21.20%

      

Arizona Health Facilities Authority Hospital System Revenue

      

(Banner Health) Series A 5.00% 1/1/43

      500,000        521,745  

(Phoenix Children’s Hospital) Series A 5.00% 2/1/34

      995,000        1,046,442  

(Scottsdale Lincoln Hospital Project) 5.00% 12/1/42

      1,000,000        1,123,850  

Arizona Industrial Development Authority Revenue

      

(Great Lakes Senior Living Communities LLC Project First Tier) Series A
5.00% 1/1/54

      145,000        127,003  

(Great Lakes Senior Living Communities LLC Project Second Tier)

      

Series B 5.00% 1/1/49

      55,000        46,302  

Series B 5.125% 1/1/54

      65,000        54,877  

(Great Lakes Senior Living Communities LLC Project Third Tier) Series C 144A 5.00% 1/1/49 #

      500,000        398,000  

(Legacy Cares Project) Series A 144A 7.75% 7/1/50#

      285,000        282,010  

Glendale Industrial Development Authority Revenue

      

(Glencroft Retirement Community Project)

      

5.00% 11/15/36

      270,000        264,403  

5.25% 11/15/46

      415,000        400,653  

(Sun Health Services) Series A 5.00% 11/15/48

      1,000,000        1,125,640  

(The Beatitudes Campus Project)

      

5.00% 11/15/45

      200,000        207,076  

5.00% 11/15/53

      300,000        308,928  

(The Terraces of Phoenix Project) Series A 5.00% 7/1/48

      375,000        375,619  

 

52

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

 

Healthcare Revenue Bonds (continued)

      

Maricopa County Industrial Development Authority Health Facilities Revenue

      

(Banner Health)

      

Series A 4.00% 1/1/41

      1,000,000      $         1,124,270  

Series A 4.00% 1/1/44

      1,500,000        1,707,810  

Maricopa County Industrial Development Authority Senior Living Facility Revenue

      

(Christian Care Surprise Project) 144A 6.00% 1/1/48 #

      405,000        391,773  

Puerto Rico Industrial Tourist Educational Medical & Environmental Control Facilities Financing Authority

      

(Hospital Auxilio Mutuo Obligated Group Project) Series A 6.00% 7/1/33

      790,000        810,769  

Tempe Industrial Development Authority Revenue

      

(Friendship Village) Series A 6.25% 12/1/42

      1,200,000        1,218,384  

(Mirabella at ASU Project) Series A 144A 6.125% 10/1/52 #

      800,000        822,344  

Yavapai County Industrial Development Authority Hospital Facility

      

(Yavapai Regional Medical Center)

      

4.00% 8/1/43

      1,500,000        1,691,850  

Series A 5.25% 8/1/33

      2,000,000        2,201,200  

Yuma Industrial Development Authority Hospital Revenue

      

(Yuma Regional Medical Center)

      

Series A 5.00% 8/1/32

      295,000        332,500  

Series A 5.25% 8/1/32

      300,000        341,946  
     

 

 

  
     16,925,394  
     

 

 

  

Lease Revenue Bonds – 5.58%

      

Arizona Game & Fish Department & Community Beneficial Interest Certificates

      

(Administration Building Project) 5.00% 7/1/32

      1,000,000        1,003,710  

Arizona Sports & Tourism Authority Senior Revenue

      

(Multipurpose Stadium Facility) Series A 5.00% 7/1/36

      350,000        367,157  

Maricopa County Industrial Development Authority Correctional Contract Revenue

      

(Phoenix West Prison) Series B 5.375% 7/1/22 (ACA)

      685,000        687,007  

 

53

Table of Contents

Schedules of investments

Delaware Tax-Free Arizona Fund

 

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

 

Lease Revenue Bonds (continued)

      

Phoenix Civic Improvement Airport Revenue

      

(Junior Lien) Series A 5.00% 7/1/49

      2,000,000      $         2,396,140  
     

 

 

  
     4,454,014  
     

 

 

  

Local General Obligation Bonds – 4.36%

      

Maricopa County High School District No. 214 Tolleson Union High School

      

(School Improvement Project) Series B 4.00% 7/1/37

      1,000,000        1,170,300  

Maricopa County School District No. 3 Tempe Elementary

      

(School Improvement Project) Series B 5.00% 7/1/30

      560,000        722,411  

Maricopa County Unified School District No 69 Paradise Valley

      

4.00% 7/1/39

      600,000        715,368  

Maricopa County Unified School District No. 95 Queen Creek

      

(School Improvement) 4.00% 7/1/35

      500,000        587,285  

Pinal County Community College District

      

4.00% 7/1/31

      250,000        286,998  
     

 

 

  
     3,482,362  
     

 

 

  

Pre-Refunded Bonds – 4.34%

      

Northern Arizona University

      

5.00% 6/1/36-21 §

      475,000        491,829  

Phoenix Industrial Development Authority

      

(Great Hearts Academic Project)

      

6.30% 7/1/42-21 §

      500,000        524,090  

6.40% 7/1/47-21 §

      500,000        524,500  

Pinal County Electric District No. 3

      

Series A 5.25% 7/1/41-21 §

      750,000        781,672  

University of Arizona Board of Regents

      

Series A 5.00% 6/1/25-22 §

      10,000        10,804  

Series A 5.00% 6/1/38-23 §

      1,000,000        1,129,670  
     

 

 

  
     3,462,565  
     

 

 

  

Special Tax Revenue Bonds – 12.84%

      

GDB Debt Recovery Authority

      

(Taxable) 7.50% 8/20/40

      478,650        328,474  

 

54

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

 

Special Tax Revenue Bonds (continued)

      

Glendale Municipal Property Excise Tax Revenue

      

(Senior Lien) Series B 5.00% 7/1/33

      570,000      $             626,236  

Glendale Transportation Excise Tax Revenue

      

5.00% 7/1/30 (AGM)

      1,000,000        1,206,010  

Guam Government Business Privilege Tax Revenue

      

Series A 5.125% 1/1/42

      545,000        559,268  

Series A 5.25% 1/1/36

      705,000        727,038  

Puerto Rico Sales Tax Financing Revenue

      

(Restructured)

      

Series A-1 4.75% 7/1/53

      3,635,000        3,820,530  

Series A-1 5.00% 7/1/58

      750,000        800,775  

Series A-1 5.273% 7/1/46 ^

      970,000        278,264  

Series A-2 4.329% 7/1/40

      1,245,000        1,307,263  

Regional Public Transportation Authority

      

(Maricopa County Public Transportation) 5.25% 7/1/24

      500,000        595,685  
     

 

 

  
     10,249,543  
     

 

 

  

State General Obligation Bonds – 1.30%

      

Commonwealth of Puerto Rico

      

Series A 5.00% 7/1/41 ‡

      235,000        147,169  

Series A 5.375% 7/1/33 ‡

      270,000        190,687  

Series A 8.00% 7/1/35 ‡

      355,000        216,994  

Series B 5.75% 7/1/38 ‡

      680,000        481,950  
     

 

 

  
     1,036,800  
     

 

 

  

Transportation Revenue Bonds – 5.13%

      

Arizona Department of Transportation State Highway Fund Revenue

      

5.00% 7/1/35

      500,000        611,650  

Phoenix Civic Improvement Airport Revenue

      

(Senior Lien)

      

4.00% 7/1/48 (AMT)

      500,000        546,020  

5.00% 7/1/32 (AMT)

      500,000        549,500  

Series A 5.00% 7/1/36 (AMT)

      1,000,000        1,192,420  

Series B 5.00% 7/1/37

      1,000,000        1,192,690  
     

 

 

  
     4,092,280  
     

 

 

  

Water & Sewer Revenue Bonds – 6.36%

      

Arizona Water Infrastructure Finance Authority

      

(Water Quality Revenue) Series A 5.00% 10/1/26

      1,000,000        1,186,840  

 

55

Table of Contents

Schedules of investments

Delaware Tax-Free Arizona Fund

 

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

 

Water & Sewer Revenue Bonds (continued)

      

Central Arizona Water Conservation District

      

(Central Arizona Project) 5.00% 1/1/31

      600,000      $         733,812  

Guam Government Waterworks Authority Revenue

      

5.00% 7/1/37

      250,000        292,253  

Mesa Utility System Revenue

      

4.00% 7/1/31

      850,000        983,535  

Phoenix Civic Improvement Corporation

      

(Junior Lien)

      

5.00% 7/1/27

      1,000,000        1,256,140  

5.00% 7/1/31

      500,000        621,570  
     

 

 

  
     5,074,150  
     

 

 

  

Total Municipal Bonds (cost $74,051,044)

 

      78,139,032  
     

 

 

  
     
     

Short-Term Investments – 1.25%

                  

Variable Rate Demand Note – 1.25%¤

      

Phoenix Industrial Development Authority

      

(Mayo Clinic) Series B 0.01% 11/15/52 (SPA - Northern Trust Company)

      1,000,000        1,000,000  
     

 

 

  

Total Short-Term Investments (cost $1,000,000)

 

      1,000,000  
     

 

 

  

Total Value of Securities–99.15%
  (cost $75,051,044)

      $ 79,139,032  
     

 

 

  

 

°

Principal amount shown is stated in USD unless noted that the security is denominated in another currency.

 

●

Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at August 31, 2020. For securities based on a published reference rate and spread, the reference rate and spread are indicated in their description above. The reference rate descriptions (i.e. LIBOR03M, LIBOR06M, etc.) used in this report are identical for different securities, but the underlying reference rates may differ due to the timing of the reset period. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their description above.

 

#

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $5,800,096, which represents 7.27% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”

 

‡

Non-income producing security. Security is currently in default.

 

56

Table of Contents

    

    

 

 

§

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.”

 

^

Zero-coupon security. The rate shown is the effective yield at the time of purchase.

 

¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of August 31, 2020.

Summary of abbreviations:

ACA – Insured by American Capital Access

AGM – Insured by Assured Guaranty Municipal Corporation

AMT – Subject to Alternative Minimum Tax

ICE – Intercontinental Exchange, Inc.

LIBOR – London interbank offered rate

LIBOR03M – ICE LIBOR USD 3 Month

LIBOR06M – ICE LIBOR USD 6 Month

LLC – Limited Liability Corporation

SPA – Stand-by Purchase Agreement

USD – US Dollar

See accompanying notes, which are an integral part of the financial statements.

 

57

Table of Contents
Schedules of investments
Delaware Tax-Free California Fund    August 31, 2020

 

 

     Principal amount°      Value (US $)  

Municipal Bonds – 96.90%

                  

Corporate Revenue Bonds – 7.31%

      

Golden State Tobacco Securitization Settlement Revenue

      

(Asset-Backed) Series A-2 5.00% 6/1/47

      2,000,000      $ 2,056,440  

(Capital Appreciation Asset-Backed) Subordinate Series B
1.548% 6/1/47 ^

      1,615,000        340,975  

Inland Empire Tobacco Securitization Authority

      

(Capital Appreciation Turbo Asset-Backed) Series F 144A
1.46% 6/1/57 #, ^

      16,655,000        677,192  

M-S-R Energy Authority Revenue

      

Series B 6.50% 11/1/39

      500,000        796,565  

Tobacco Securitization Authority of Southern California

      

(San Diego County)

      

Capital Appreciation Second Subordinate Series C 0.558% 6/1/46 ^

      9,285,000        1,764,614  

Capital Appreciation Third Subordinate Series D 0.307% 6/1/46 ^

      3,460,000        574,014  
     

 

 

  
             6,209,800  
     

 

 

  

Education Revenue Bonds – 31.34%

      

California Educational Facilities Authority

      

(Loma Linda University) Series A 5.00% 4/1/47

      1,000,000        1,129,740  

(Stanford University)

      

Series U-1 5.25% 4/1/40

      775,000        1,211,519  

Series V-1 5.00% 5/1/49

      2,600,000        4,237,662  

California Municipal Finance Authority

      

(Bella Mente Montessori Academy Project) Series A 144A 5.00% 6/1/48 #

      500,000        523,325  

(Biola University) 5.00% 10/1/39

      1,000,000        1,130,100  

(California Baptist University) Series A 144A 5.375% 11/1/40 #

      1,000,000        1,056,350  

(CHF - Davis I, LLC - West Village Student Housing Project)
5.00% 5/15/48

      1,000,000        1,139,220  

(Creative Center of Los Altos Project - Pinewood School & Oakwood School) Series B 144A 4.50% 11/1/46 #

      500,000        495,415  

(Julian Charter School Project) Series A 144A 5.625% 3/1/45 #

      600,000        605,424  

 

58

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

 

Education Revenue Bonds (continued)

      

California Municipal Finance Authority

      

(Literacy First Charter Schools Project) Series A 5.00% 12/1/49

      750,000      $ 865,522  

(Southwestern Law School) 6.50% 11/1/41

      1,140,000                1,200,420  

California Public Finance Authority Educational Facilities Revenue

      

(Trinity Classical Academy Project) Series A 144A 5.00% 7/1/54 #

      500,000        510,745  

California School Finance Authority

      

(Aspire Public Schools - Obligated Group) Series A 144A
5.00% 8/1/45 #

      715,000        795,123  

(Encore Education Obligated Group) Series A 144A 5.00% 6/1/42 #

      500,000        467,870  

(Escuela Popular Project) 144A 6.50% 7/1/50 #

      250,000        272,508  

(Granada Hills Charter Obligated Group) 144A 5.00% 7/1/49 #

      475,000        524,452  

(Green Dot Public Schools Project) Series A 144A 5.00% 8/1/35 #

      1,000,000        1,116,760  

(Grimmway Schools - Obligated Group) Series A 144A 5.00% 7/1/36 #

      500,000        524,950  

(ICEF - View Park Elementary & Middle Schools) Series A 5.625% 10/1/34

      575,000        616,319  

(KIPP LA Projects) Series A 5.125% 7/1/44

      1,000,000        1,098,150  

(KIPP SoCal Projects) Series A 144A 5.00% 7/1/49 #

      1,000,000        1,185,870  

(Partnerships to Uplift Communities Valley Project) Series A 144A
6.75% 8/1/44 #

      1,000,000        1,094,920  

California State University Systemwide Revenue Series A 5.00% 11/1/47

      1,000,000        1,217,510  

California Statewide Communities Development Authority Charter School Revenue

      

(Green Dot Public Schools - Animo Inglewood Charter High School Project) Series A 7.25% 8/1/41

      300,000        312,396  

California Statewide Communities Development Authority Revenue

      

(California Baptist University) Series A 6.125% 11/1/33

      750,000        819,495  

 

59

Table of Contents

Schedules of investments

Delaware Tax-Free California Fund

 

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

 

Education Revenue Bonds (continued)

      

California Statewide Communities Development Authority Student Housing Revenue

      

(University of California Irvine East Campus Apartments) 5.375% 5/15/38

      1,000,000      $ 1,019,870  

Mt. San Antonio Community College District Convertible Capital Appreciation Election 2008

      

Series A 0.00% 8/1/28 ~

      1,000,000        1,161,450  

University of California

      

Series BE 5.00% 5/15/32

      220,000        301,341  
     

 

 

  
           26,634,426  
     

 

 

  

Electric Revenue Bonds – 0.84%

      

Puerto Rico Electric Power Authority Revenue

      

Series A 5.05% 7/1/42 ‡

      70,000        48,300  

Series AAA 5.25% 7/1/25 ‡

      40,000        27,650  

Series CCC 5.25% 7/1/27 ‡

      325,000        224,656  

Series WW 5.00% 7/1/28 ‡

      310,000        213,900  

Series XX 4.75% 7/1/26 ‡

      45,000        30,825  

Series XX 5.75% 7/1/36 ‡

      150,000        104,625  

Series ZZ 4.75% 7/1/27 ‡

      35,000        23,975  

Series ZZ 5.25% 7/1/24 ‡

      55,000        38,019  
     

 

 

  
     711,950  
     

 

 

  

Healthcare Revenue Bonds – 17.58%

      

ABAG Finance Authority for Nonprofit Corporations

      

(Episcopal Senior Communities) 6.125% 7/1/41

      850,000        866,481  

(Sharp HealthCare) Series A 5.00% 8/1/28

      250,000        265,075  

California Health Facilities Financing Authority Revenue

      

(Cedars-Sinai Medical Center) Series B 4.00% 8/15/36

      500,000        568,135  

(Children’s Hospital Los Angeles)

      

Series A 5.00% 11/15/34

      500,000        528,920  

Series A 5.00% 8/15/47

      500,000        562,355  

(Dignity Health) Series E 5.625% 7/1/25

      1,000,000        1,003,830  

(Kaiser Permanente) Subordinate Series A-2 4.00% 11/1/44

      1,005,000        1,126,143  

(Sutter Health) Series D 5.25% 8/15/31

      1,000,000        1,044,190  

 

60

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

 

Healthcare Revenue Bonds (continued)

      

California Municipal Finance Authority Revenue

      

(Community Medical Centers)

      

Series A 5.00% 2/1/42

      750,000      $ 867,668  

Series A 5.00% 2/1/47

      250,000        287,245  

(Goodwill Industry of Sacramento Valley & Northern Nevada Project) 5.00% 1/1/35

      635,000        549,808  

(Northbay Healthcare Group) Series A 5.25% 11/1/47

      500,000        550,985  

California Statewide Communities Development Authority Revenue

      

(Adventist Health System/West) Series A 4.00% 3/1/48

      1,000,000        1,112,460  

(Covenant Retirement Communities) Series C 5.625% 12/1/36

      1,000,000        1,091,280  

(Emanate Health) Series A 4.00% 4/1/45

      255,000        290,629  

(Episcopal Communities & Services) 5.00% 5/15/32

      600,000        631,026  

(Huntington Memorial Hospital) 4.00% 7/1/48

      500,000        556,095  

(Marin General Hospital - Green Bonds) Series A 4.00% 8/1/45

      500,000        522,545  

(Redlands Community Hospital) 5.00% 10/1/46

      1,000,000        1,110,980  

Palomar Health

      

5.00% 11/1/47 (AGM)

      500,000        576,145  

San Buenaventura

      

(Community Memorial Health System) 7.50% 12/1/41

      785,000        826,440  
     

 

 

  
             14,938,435  
     

 

 

  

Housing Revenue Bonds – 3.85%

      

California Municipal Finance Authority Mobile Home Park Revenue

      

(Caritas Projects) Series A 5.50% 8/15/47

      250,000        263,958  

Independent Cities Finance Authority Mobile Home Park Revenue

      

(Pillar Ridge)

      

Series A 5.25% 5/15/44

      1,000,000        1,087,030  

Series A 5.25% 5/15/49

      850,000        922,105  

 

61

Table of Contents

Schedules of investments

Delaware Tax-Free California Fund

 

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

 

Housing Revenue Bonds (continued)

      

Santa Clara County Multifamily Housing Authority Revenue

      

(RiverTown Apartments Project) Series A 5.85% 8/1/31 (AMT)

      1,000,000      $         1,003,450  
     

 

 

  
     3,276,543  
     

 

 

  

Lease Revenue Bonds – 7.08%

      

Abag Finance Authority for Nonprofit Corporations

      

(Jackson Laboratory) 5.00% 7/1/37

      1,000,000        1,055,110  

California Infrastructure & Economic Development Bank

      

(Academy of Motion Picture Arts & Sciences Obligated Group) Series A 5.00% 11/1/41

      1,000,000        1,112,360  

California State Public Works Board Lease Revenue

      

(Department of Corrections and Rehabilitation) Series C 5.00% 10/1/26

      1,000,000        1,050,090  

Golden State Tobacco Securitization Settlement Revenue

      

(Enhanced Asset-Backed) Series A 5.00% 6/1/29

      1,000,000        1,115,140  

Oceanside Public Financing Authority

      

(El Corazon Aquatics Center Project) 4.00% 11/1/49

      1,000,000        1,129,810  

San Jose Financing Authority Lease Revenue

      

(Civic Center Project) Series A 5.00% 6/1/33

      500,000        551,405  
     

 

 

  
     6,013,915  
     

 

 

  

Local General Obligation Bonds – 1.82%

      

Anaheim School District Capital Appreciation Election 2002

      

4.58% 8/1/25 (NATL)^

      1,000,000        959,350  

San Francisco Bay Area Rapid Transit District Election of 2016

      

(Green Bonds) Series B-1 4.00% 8/1/44

      500,000        591,665  
     

 

 

  
     1,551,015  
     

 

 

  

Pre-Refunded Bonds – 3.91%

      

Anaheim Public Financing Authority Revenue

      

(Anaheim Electric System Distribution Facilities) Series A 5.00% 10/1/25-21 §

      800,000        822,744  

 

62

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

 

Pre-Refunded Bonds (continued)

      

La Verne

      

(Brethren Hillcrest Homes) 5.00% 5/15/36-22 §

      750,000      $           817,418  

Pittsburg Unified School District Financing Authority Revenue

      

(Pittsburg Unified School District Bond Program) 5.50% 9/1/46-21 (AGM)§

      800,000        842,384  

Rancho Santa Fe Community Services District Financing Authority Revenue

      

(Superior Lien Bonds) Series A 5.75% 9/1/30-21 §

      800,000        843,960  
     

 

 

  
     3,326,506  
     

 

 

  

Special Tax Revenue Bonds – 9.04%

      

GDB Debt Recovery Authority of Puerto Rico

      

7.50% 8/20/40

      503,323        345,405  

Puerto Rico Sales Tax Financing Revenue

      

(Restructured)

      

Series A-1 4.75% 7/1/53

      1,745,000        1,834,065  

Series A-1 5.00% 7/1/58

      2,585,000        2,760,005  

Series A-1 5.349% 7/1/46 ^

      3,890,000        1,115,924  

Sacramento Transient Occupancy Tax Revenue

      

(Convention Center Complex) Senior Series A 5.00% 6/1/48

      1,000,000        1,109,020  

Yucaipa Special Tax Community Facilities District No. 98-1

      

(Chapman Heights) 5.375% 9/1/30

      500,000        520,910  
     

 

 

  
     7,685,329  
     

 

 

  

State General Obligation Bonds – 4.83%

      

California

      

(Various Purpose)

      

5.00% 4/1/32

      300,000        427,236  

5.00% 8/1/46

      1,000,000        1,218,640  

5.25% 4/1/35

      1,000,000        1,073,910  

Commonwealth of Puerto Rico

      

(Public Improvement)

      

Series A 5.00% 7/1/24 ‡

      185,000        131,581  

Series A 5.00% 7/1/41 ‡

      300,000        187,875  

Series A 5.25% 7/1/34 ‡

      155,000        110,631  

Series A 5.375% 7/1/33 ‡

      350,000        247,188  

Series B 5.75% 7/1/38 ‡

      430,000        304,763  

 

63

Table of Contents

Schedules of investments

Delaware Tax-Free California Fund

 

 

     Principal amount°      Value (US $)  

Municipal Bonds (continued)

 

State General Obligation Bonds (continued)

      

Commonwealth of Puerto Rico

      

(Public Improvement)

      

Series C 6.00% 7/1/39 ‡

      450,000      $ 316,687  

Unrefunded Series B 5.00% 7/1/35 ‡

      125,000        88,906  
     

 

 

  
     4,107,417  
     

 

 

  

Transportation Revenue Bonds – 9.30%

      

California Municipal Finance Authority Senior Lien

      

(LINXS APM Project) Series A 5.00% 12/31/47 (AMT)

      645,000        738,099  

Long Beach Marina Revenue

      

(Alamitos Bay Marina Project) 5.00% 5/15/45

      500,000        539,340  

Los Angeles Department of Airports

      

(Los Angeles International Airport) Senior Series D 5.00% 5/15/36 (AMT)

      1,000,000        1,152,930  

Riverside County Transportation Commission Senior Lien

      

(Current Interest Obligations) Series A 5.75% 6/1/44

      500,000        545,610  

Sacramento County Airport System Revenue

      

Series C 5.00% 7/1/39 (AMT)

      500,000        598,565  

Subordinate Series B 5.00% 7/1/41

      500,000        583,965  

San Diego Redevelopment Agency

      

(Centre City Redevelopment Project) Series A 6.40% 9/1/25

      870,000        874,307  

San Francisco City & County Airports Commission

      

(San Francisco International Airport)

      

Second Series A 5.00% 5/1/49 (AMT)

      1,000,000        1,207,140  

Second Series E 5.00% 5/1/50 (AMT)

      500,000        602,995  

San Francisco Municipal Transportation Agency Revenue

      

Series B 5.00% 3/1/37

      1,000,000        1,058,120  
     

 

 

  
     7,901,071  
     

 

 

  

Total Municipal Bonds (cost $77,333,851)

 

            82,356,407  
     

 

 

  
     
     

Short-Term Investments – 1.12%

                  

Variable Rate Demand Notes – 1.12%¤

      

California

      

Series A2 0.01% 5/1/34 (LOC - State Street Bank and Trust)

      150,000        150,000  

 

64

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

Short-Term Investments (continued)

 

University of California

      

Series AL-2 0.01% 5/15/48

      800,000      $ 800,000  
     

 

 

  

Total Short-Term Investments (cost $950,000)

 

      950,000  
     

 

 

  

Total Value of Securities–98.02%
  (cost $78,283,851)

      $       83,306,407  
     

 

 

  

 

°

Principal amount shown is stated in USD unless noted that the security is denominated in another currency.

 

^

Zero-coupon security. The rate shown is the effective yield at the time of purchase.

 

#

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $9,850,904, which represents 11.59% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”

 

~

Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Stated rate in effect at August 31, 2020.

 

‡

Non-income producing security. Security is currently in default.

 

§

Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 8 in “Notes to financial statements.”

 

¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of August 31, 2020.

Summary of abbreviations:

AGM – Insured by Assured Guaranty Municipal Corporation

AMT – Subject to Alternative Minimum Tax

CHF – Collegiate Housing Foundation

ICEF – Inner City Education Foundation

KIPP – Knowledge is Power Program

LLC – Limited Liability Corporation

LOC – Letter of Credit

NATL – Insured by National Public Finance Guarantee Corporation

USD – US Dollar

See accompanying notes, which are an integral part of the financial statements.

 

 

65

Table of Contents
Schedules of investments
Delaware Tax-Free Colorado Fund    August 31, 2020

 

 

      Principal amount°      Value (US $)  

Municipal Bonds – 98.60%

                  

Corporate Revenue Bonds – 3.23%

      

Denver City & County

      

(United Airlines Project) 5.00% 10/1/32 (AMT)

      415,000      $ 419,963  

Public Authority for Colorado Energy Natural Gas Revenue

      

6.50% 11/15/38

      4,250,000        6,776,328  
     

 

 

  
             7,196,291  
     

 

 

  

Education Revenue Bonds – 11.94%

      

Board of Governors of the Colorado State University

      

System Enterprise Revenue

      

Series A 5.00% 3/1/43

      2,480,000        3,619,783  

Board of Trustees For Colorado Mesa University Enterprise Revenue

      

Series B 5.00% 5/15/44

      1,000,000        1,247,410  

Series B 5.00% 5/15/49

      750,000        929,910  

Colorado Educational & Cultural Facilities Authority Revenue

      

(Alexander Dawson School-Nevada Project) 5.00% 5/15/29

      1,230,000        1,476,861  

(Aspen Ridge School Project)

      

Series A 144A 5.00% 7/1/36 #

      500,000        510,495  

Series A 144A 5.25% 7/1/46 #

      1,350,000        1,377,567  

(Atlas Preparatory Charter School) 144A 5.25% 4/1/45 #

      1,300,000        1,320,540  

(Charter School Project) 5.00% 7/15/37

      1,150,000        1,220,564  

(Community Leadership Academy, Inc. Second Campus Project)
7.45% 8/1/48

      1,000,000        1,101,480  

(Johnson & Wales University) Series A 5.25% 4/1/37

      1,790,000        1,909,482  

(Liberty Common Charter School Project) Series A 5.00% 1/15/39

      1,000,000        1,086,920  

(Littleton Preparatory Charter School Project)

      

5.00% 12/1/33

      450,000        458,874  

5.00% 12/1/42

      540,000        545,902  

(Loveland Classical Schools Project)

      

144A 5.00% 7/1/36 #

      625,000        638,900  

144A 5.00% 7/1/46 #

      500,000        502,725  

(Pinnacle Charter School Project) 5.00% 6/1/26

      700,000        766,444  

 

66

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      Principal amount°      Value (US $)  

  Municipal Bonds (continued)

                  

Education Revenue Bonds (continued)

      

(Science Technology Engineering and Math School Project)

      

5.00% 11/1/44

      890,000      $ 950,030  

5.00% 11/1/54

      1,500,000        1,594,665  

(Skyview Charter School)

      

144A 5.375% 7/1/44 #

      860,000        878,258  

144A 5.50% 7/1/49 #

      870,000        890,715  

(University of Denver Project)

      

Series A 4.00% 3/1/35

      400,000        448,572  

Series A 4.00% 3/1/36

      550,000        614,741  

(University of Lab Charter School) 5.00% 12/15/45

      500,000        539,755  

(Vail Mountain School Project)

      

4.00% 5/1/46

      80,000        78,577  

5.00% 5/1/31

      1,000,000        1,036,410  

(Windsor Charter Academy Project) 144A 5.00% 9/1/46 #

      890,000        891,024  
     

 

 

  
             26,636,604  
     

 

 

  

Electric Revenue Bonds – 3.88%

      

Loveland Colorado Electric & Communications Enterprise Revenue

      

Series A 5.00% 12/1/44

      2,185,000        2,711,935  

Platte River Power Authority Revenue

      

Series JJ 5.00% 6/1/27

      3,300,000        4,120,842  

Puerto Rico Electric Power Authority Revenue

      

Series A 5.05% 7/1/42 ‡

      170,000        117,300  

Series AAA 5.25% 7/1/25 ‡

      95,000        65,669  

Series CCC 5.25% 7/1/27 ‡

      705,000        487,331  

Series WW 5.00% 7/1/28 ‡

      660,000        455,400  

Series XX 4.75% 7/1/26 ‡

      105,000        71,925  

Series XX 5.25% 7/1/40 ‡

      295,000        203,919  

Series XX 5.75% 7/1/36 ‡

      365,000        254,587  

Series ZZ 4.75% 7/1/27 ‡

      85,000        58,225  

Series ZZ 5.25% 7/1/24 ‡

      140,000        96,775  
     

 

 

  
     8,643,908  
     

 

 

  

Healthcare Revenue Bonds – 25.76%

      

Colorado Health Facilities Authority Revenue

      

(AdventHealth Obligated Group) Series A 4.00% 11/15/43

      4,000,000        4,576,520  

(American Baptist)

      

7.625% 8/1/33

      150,000        158,928  

 

67

Table of Contents
Schedules of investments
Delaware Tax-Free Colorado Fund        

 

 

      Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Healthcare Revenue Bonds (continued)

      

Colorado Health Facilities Authority Revenue

      

(American Baptist)

      

8.00% 8/1/43

      1,000,000      $         1,063,680  

(Bethesda Project) Series A-1 5.00% 9/15/48

      2,250,000        2,414,498  

(Cappella of Grand Junction Project) 144A 5.00% 12/1/54 #

      1,000,000        975,900  

(Christian Living Community Project)

      

5.25% 1/1/37

      1,500,000        1,507,725  

6.375% 1/1/41

      1,000,000        1,030,930  

(CommonSpirit Health)

      

Series A-1 4.00% 8/1/39

      2,000,000        2,247,880  

Series A-1 4.00% 8/1/44

      2,000,000        2,218,460  

Series A-2 4.00% 8/1/49

      3,000,000        3,307,320  

Series A-2 5.00% 8/1/38

      1,500,000        1,832,070  

Series A-2 5.00% 8/1/39

      1,505,000        1,832,955  

(Covenant Retirement Communities)

      

Series A 5.00% 12/1/33

      4,000,000        4,167,120  

Series A 5.00% 12/1/35

      1,000,000        1,079,560  

(Craig Hospital Project) 5.00% 12/1/32

      3,500,000        3,755,185  

(Frasier Meadows Retirement Community Project) Series B 5.00% 5/15/48

      660,000        694,346  

(Mental Health Center Denver Project) Series A 5.75% 2/1/44

      2,000,000        2,121,720  

(National Jewish Health Project) 5.00% 1/1/27

      300,000        313,437  

(Sanford Health) Series A 5.00% 11/1/44

      4,500,000        5,547,285  

(SCL Health System)

      

Series A 4.00% 1/1/37

      2,150,000        2,514,597  

Series A 4.00% 1/1/38

      3,895,000        4,539,973  

Series A 5.00% 1/1/44

      3,050,000        3,352,621  

(Sunny Vista Living Center) Series A 144A 6.25% 12/1/50 #

      935,000        939,030  

(Vail Valley Medical Center Project) 5.00% 1/15/35

      1,000,000        1,163,590  

(Valley View Hospital Association Project) Series A 4.00% 5/15/35

      685,000        762,343  

Denver Health & Hospital Authority Health Care Revenue

      

Series A 4.00% 12/1/39

      1,000,000        1,069,670  

Series A 4.00% 12/1/40

      250,000        266,632  

 

 

68

Table of Contents
    
            

 

 

      Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Healthcare Revenue Bonds (continued)

      

Puerto Rico Industrial Tourist Educational Medical & Environmental Control Facilities Financing Authority

      

(Auxilio Mutuo)

      

Series A 6.00% 7/1/33

      1,945,000      $ 1,996,134  
     

 

 

  
             57,450,109  
     

 

 

  

Housing Revenue Bonds – 0.09%

      

Colorado Housing and Finance Authority

      

(Single Family Program Class 1)

      

Series AA 4.50% 5/1/23 (GNMA)

      95,000        95,549  

Series AA 4.50% 11/1/23 (GNMA)

      95,000        95,544  
     

 

 

  
     191,093  
     

 

 

  

Lease Revenue Bonds – 2.04%

      

Colorado Department of Transportation Certificates of Participation

      

5.00% 6/15/34

      660,000        806,098  

5.00% 6/15/36

      1,055,000        1,284,557  

Denver Health & Hospital Authority

      

4.00% 12/1/38

      750,000        802,230  

Regional Transportation District Certificates of Participation

      

Series A 5.00% 6/1/33

      1,500,000        1,655,025  
     

 

 

  
     4,547,910  
     

 

 

  

Local General Obligation Bonds – 11.32%

      

Adams & Weld Counties School District No. 27J Brighton

      

4.00% 12/1/30

      300,000        344,148  

4.00% 12/1/31

      1,000,000        1,145,300  

Arapahoe County School District No. 6 Littleton

      

(Littleton Public Schools)

      

Series A 5.50% 12/1/33

      1,000,000        1,337,470  

Series A 5.50% 12/1/38

      350,000        458,899  

Beacon Point Metropolitan District

      

5.00% 12/1/30 (AGM)

      1,130,000        1,351,796  

Boulder Valley School District No. Re-2 Boulder

      

Series A 4.00% 12/1/48

      1,370,000        1,601,393  

Central Colorado Water Conservancy District

      

(Limited Tax) 5.00% 12/1/33

      1,000,000        1,134,990  

 

69

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Schedules of investments
Delaware Tax-Free Colorado Fund        

 

 

      Principal amount°      Value (US $)  

  Municipal Bonds (continued)

                  

  Local General Obligation Bonds (continued)

      

Commerce City Northern Infrastructure General Improvement District

      

5.00% 12/1/32 (AGM)

      2,125,000      $ 2,337,904  

Denver International Business CenterMetropolitan District No. 1

      

5.00% 12/1/30

      350,000        352,065  

Eaton Area Park & Recreation District

      

5.25% 12/1/34

      360,000        369,479  

5.50% 12/1/38

      455,000        469,005  

El Paso County School District No 2. Harrison

      

5.00% 12/1/38

      1,000,000        1,276,020  

Grand River Hospital District

      

5.25% 12/1/35 (AGM)

      1,000,000        1,171,940  

Jefferson County School District No. R-1

      

5.25% 12/15/24

      1,250,000        1,514,662  

Leyden Rock Metropolitan District No. 10

      

Series A 5.00% 12/1/45

      1,000,000        1,026,510  

Sierra Ridge Metropolitan District No. 2

      

Series A 5.50% 12/1/46

      1,000,000        1,031,360  

Weld County Reorganized School District No. Re-8

      

5.00% 12/1/31

      990,000        1,234,263  

5.00% 12/1/32

      660,000        818,763  

Weld County School District No. Re-1

      

5.00% 12/15/31 (AGM)

      1,000,000        1,247,980  

Weld County School District No. Re-2 Eaton

      

5.00% 12/1/44

      2,000,000        2,563,440  

Weld County School District No. Re-3J

      

5.00% 12/15/34 (BAM)

      2,000,000        2,468,440  
     

 

 

  
            25,255,827  
     

 

 

  

Pre-Refunded Bonds – 6.64%

      

Colorado Health Facilities Authority Revenue

      

(Catholic Health Initiatives)

      

Series A 5.00% 2/1/41-21 §

      2,250,000        2,294,280  

Series A 5.25% 2/1/33-21 §

      1,000,000        1,020,710  

Series A 5.25% 1/1/45-23 §

      2,000,000        2,227,260  

(NCMC Project) 4.00% 5/15/32-26 §

      2,000,000        2,395,560  

 

 

70

Table of Contents
    
            

 

 

      Principal amount°      Value (US $)  

  Municipal Bonds (continued)

                  

  Pre-Refunded Bonds (continued)

      

(The Evangelical Lutheran Good Samaritan Society Project) 5.625% 6/1/43-23 §

      1,150,000      $ 1,318,774  

(Total Long-Term Care National Obligated Group Project) Series A 6.25% 11/15/40-20 §

      750,000        759,127  

Denver Health & Hospital Authority Health Care Revenue

      

(Recovery Zone Facilities) 5.625% 12/1/40-20 §

      2,500,000        2,533,000  

University of Colorado

      

Series A 5.00% 6/1/33-23 §

      2,000,000        2,262,280  
     

 

 

  
            14,810,991  
     

 

 

  

Special Tax Revenue Bonds – 18.84%

      

Broomfield Colorado Sales & Use Tax Revenue

      

5.00% 12/1/33

      1,000,000        1,261,300  

Central Platte Valley Metropolitan District

      

5.00% 12/1/43

      725,000        748,838  

Commerce City

      

5.00% 8/1/44 (AGM)

      1,500,000        1,720,275  

Denver Convention Center Hotel Authority Revenue

      

5.00% 12/1/40

      2,660,000        2,827,660  

Denver International Business CenterMetropolitan District No. 1

      

5.375% 12/1/35

      1,750,000        1,760,290  

Fountain Urban Renewal Authority Tax Increment Revenue

      

(Academy Highlands Project) Series A 5.50% 11/1/44

      1,375,000        1,409,801  

Guam Government Business Privilege Tax Revenue

      

Series A 5.125% 1/1/42

      1,250,000        1,282,725  

Series A 5.25% 1/1/36

      1,675,000        1,727,361  

Lincoln Park Metropolitan District

      

5.00% 12/1/46 (AGM)

      1,000,000        1,207,300  

Plaza Metropolitan District No. 1

      

144A 5.00% 12/1/40 #

      1,265,000        1,289,149  

Prairie Center Metropolitan District No. 3

      

Series A 144A 5.00% 12/15/41 #

      1,000,000        1,020,460  

Puerto Rico Sales Tax Financing Revenue

      

Series A-2 4.536% 7/1/53

      3,000,000        3,110,310  

(Restructured)

      

Series A-1 4.75% 7/1/53

      3,445,000        3,620,833  

 

71

Table of Contents
Schedules of investments
Delaware Tax-Free Colorado Fund        

 

 

      Principal amount°      Value (US $)  

  Municipal Bonds (continued)

                  

  Special Tax Revenue Bonds (continued)

      

Puerto Rico Sales Tax Financing Revenue

      

(Restructured)

      

Series A-1 5.00% 7/1/58

      3,122,000      $ 3,333,359  

Regional Transportation District

      

6.00% 1/15/34

      1,450,000        1,452,856  

6.00% 1/15/41

      2,400,000        2,404,728  

Regional Transportation District Sales Tax Revenue

      

Series A 5.00% 11/1/30

      670,000        827,611  

Series A 5.00% 11/1/31

      1,495,000        1,831,674  

Series A 5.00% 11/1/36

      2,750,000        3,309,460  

Solaris Metropolitan District No. 3

      

Series A 5.00% 12/1/46

      500,000        512,445  

Southlands Metropolitan District No. 1

      

Series A-1 5.00% 12/1/37

      300,000        320,472  

Series A-1 5.00% 12/1/47

      700,000        735,973  

Sterling Ranch Community Authority Board

      

Series A 5.75% 12/1/45

      975,000        1,007,204  

Tallyn’s Reach Metropolitan District No. 3

      

5.125% 11/1/38

      740,000        754,445  

Thornton Development Authority

      

Series B 5.00% 12/1/35

      485,000        570,244  

Series B 5.00% 12/1/36

      810,000        951,620  

Virgin Islands Public Finance Authority

      

5.00% 10/1/29 (AGM)

      1,000,000        1,019,160  
     

 

 

  
            42,017,553  
     

 

 

  

State General Obligation Bonds – 1.32%

      

Commonwealth of Puerto Rico

      

Series A 5.00% 7/1/41 ‡

      680,000        425,850  

Series A 5.375% 7/1/33 ‡

      675,000        476,719  

Series A 8.00% 7/1/35 ‡

      1,215,000        742,669  

Series B 5.75% 7/1/38 ‡

      960,000        680,400  

Series C 6.00% 7/1/39 ‡

      890,000        626,337  
     

 

 

  
     2,951,975  
     

 

 

  

Transportation Revenue Bonds – 11.03%

      

Colorado High Performance Transportation Enterprise Revenue

      

(C-470 Express Lanes) 5.00% 12/31/56

      2,000,000        2,154,380  

(Senior U.S. 36 & I-25 Managed Lanes) 5.75% 1/1/44 (AMT)

      2,140,000        2,293,310  

 

72

Table of Contents
    
            

 

 

      Principal amount°      Value (US $)  

  Municipal Bonds (continued)

                  

Transportation Revenue Bonds (continued)

      

Denver City & County Airport System Revenue

      

Series A 4.00% 12/1/48 (AMT)

      400,000      $ 439,904  

Series A 5.00% 11/15/30 (AMT)

      1,750,000        2,156,980  

Series A 5.00% 12/1/48 (AMT)

      2,000,000        2,387,700  

Series B 5.00% 11/15/30

      1,000,000        1,081,920  

Series B 5.00% 11/15/32

      1,000,000        1,077,600  

Series B 5.00% 11/15/37

      8,000,000        8,572,080  

E-470 Public Highway Authority

      

Series A 5.00% 9/1/34

      900,000        1,196,478  

Series A 5.00% 9/1/35

      400,000        529,216  

Series A 5.00% 9/1/36

      1,300,000        1,711,931  

Series C 5.375% 9/1/26

      1,000,000        1,000,000  
     

 

 

  
     24,601,499  
     

 

 

  

Water & Sewer Revenue Bonds – 2.51%

      

Arapahoe County Water & Wastewater Authority

      

4.00% 12/1/37

      1,000,000        1,221,060  

4.00% 12/1/38

      1,845,000        2,236,804  

Dominion Water & Sanitation District

      

6.00% 12/1/46

      735,000        767,568  

Douglas County Centennial Water & Sanitation District

      

4.00% 12/1/38

      500,000        586,940  

Guam Government Waterworks Authority Water & Wastewater System Revenue

      

5.00% 7/1/37

      675,000        789,082  
     

 

 

  
     5,601,454  
     

 

 

  

  Total Municipal Bonds (cost $208,297,962)

 

             219,905,214  
     

 

 

  
      Number of shares          

Short-Term Investments – 0.52%

 

Money Market Mutual Fund – 0.29%

      

Dreyfus AMT-Free Tax Exempt Cash Management Fund - Institutional Shares (seven-day effective yield 0.00%)

      653,583        653,583  
     

 

 

  
     653,583  
     

 

 

  

 

73

Table of Contents
Schedules of investments
Delaware Tax-Free Colorado Fund        

 

 

      Principal amount      Value (US $)  

Variable Rate Demand Note – 0.23%¤

      

Denver City & County

      

Series A 0.02% 12/1/31 (SPA - JPMorgan Chase Bank N.A.)

      500,000      $ 500,000  
     

 

 

  
     500,000  
     

 

 

  

Total Short-Term Investments (cost $1,153,583)

 

      1,153,583  
     

 

 

  

Total Value of Securities–99.12%
  (cost $209,451,545)

       $       221,058,797  
     

 

 

  

 

°

Principal amount shown is stated in USD unless noted that the security is denominated in another currency.

 

#

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $11,234,763, which represents 5.04% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”

 

‡

Non-income producing security. Security is currently in default.

 

§

Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 8 in “Notes to financial statements.”

 

¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of August 31, 2020.

Summary of abbreviations:

AGM – Insured by Assured Guaranty Municipal Corporation

AMT – Subject to Alternative Minimum Tax

BAM – Insured by Build America Mutual Assurance

GNMA – Government National Mortgage Association

N.A. – National Association

SPA – Stand-by Purchase Agreement

USD – US Dollar

See accompanying notes, which are an integral part of the financial statements.

 

 

74

Table of Contents
Schedules of investments
Delaware Tax-Free Idaho Fund    August 31, 2020

 

 

      Principal amount°      Value (US $)  

Municipal Bonds – 97.15%

 

Corporate Revenue Bonds – 3.11%

      

Nez Perce County Pollution Control Revenue

      

(Potlatch Project) 2.75% 10/1/24

      1,250,000      $ 1,272,263  

Power County Industrial Development Revenue

      

(FMC Project) 6.45% 8/1/32 (AMT)

      2,000,000        2,009,840  
     

 

 

  
             3,282,103  
     

 

 

  

Education Revenue Bonds – 14.92%

      

Boise State University Revenue

      

(General Project)

      

Series A 5.00% 4/1/47

      500,000        591,875  

Series A 5.00% 4/1/48

      1,000,000        1,207,240  

Idaho Housing & Finance Association

      

(Compass Public Charter School Project)

      

Series A 144A 5.00% 7/1/54 #

      1,000,000        1,039,990  

Series A 144A 6.00% 7/1/39 #

      370,000        422,244  

Series A 144A 6.00% 7/1/49 #

      595,000        669,607  

Series A 144A 6.00% 7/1/54 #

      570,000        639,443  

(Idaho Arts Charter School Project)

      

Series A 5.00% 12/1/38

      1,000,000        1,103,020  

Series A 144A 5.00% 12/1/46#

      1,000,000        1,074,180  

(North Star Charter School Project)

      

Capital Appreciation Subordinate Series B 144A 4.88% 7/1/49 #, ^

      2,888,155        484,372  

Series A 6.75% 7/1/48

      529,151        572,420  

(Victory Charter School Project) Series B 5.00% 7/1/39

      1,000,000        1,096,640  

(Xavier Charter School Project) Series A 5.00% 6/1/50

      1,275,000        1,381,246  

Idaho State University Revenue

      

3.00% 4/1/49

      1,700,000        1,741,140  

5.00% 4/1/40

      190,000        229,603  

5.00% 4/1/43

      250,000        299,760  

5.00% 4/1/44

      250,000        299,105  

University of Idaho

      

Series 2011 5.25% 4/1/41 •

      1,670,000        1,711,316  

Series A 5.00% 4/1/41

      1,000,000        1,183,110  
     

 

 

  
     15,746,311  
     

 

 

  

Electric Revenue Bonds – 4.12%

      

Boise-Kuna Irrigation District Revenue

      

(Idaho Arrowrock Hydroelectric Project) 5.00% 6/1/34

      2,000,000        2,339,640  

 

75

Table of Contents
Schedules of investments
Delaware Tax-Free Idaho Fund        

 

 

      Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Electric Revenue Bonds (continued)

      

Guam Power Authority Revenue

      

Series A 5.00% 10/1/40

      1,000,000      $ 1,151,020  

Puerto Rico Electric Power Authority Revenue

      

Series A 5.05% 7/1/42 ‡

      75,000        51,750  

Series AAA 5.25% 7/1/25 ‡

      45,000        31,106  

Series CCC 5.25% 7/1/27 ‡

      345,000        238,481  

Series WW 5.00% 7/1/28 ‡

      320,000        220,800  

Series XX 4.75% 7/1/26 ‡

      50,000        34,250  

Series XX 5.25% 7/1/40 ‡

      135,000        93,319  

Series XX 5.75% 7/1/36 ‡

      175,000        122,063  

Series ZZ 4.75% 7/1/27 ‡

      40,000        27,400  

Series ZZ 5.25% 7/1/24 ‡

      60,000        41,475  
     

 

 

  
             4,351,304  
     

 

 

  

Healthcare Revenue Bonds – 9.33%

      

Idaho Health Facilities Authority Revenue

      

(Madison Memorial Hospital Project) 5.00% 9/1/37

      1,350,000        1,513,093  

(St. Luke’s Health System Project)

      

Series A 5.00% 3/1/27

      1,000,000        1,232,080  

Series A 5.00% 3/1/47

      1,500,000        1,555,350  

(Trinity Health Credit Group)

      

Series A 5.00% 12/1/47

      390,000        467,618  

Series ID 4.00% 12/1/43

      1,000,000        1,136,050  

Series ID 5.00% 12/1/46

      750,000        890,213  

(Valley Vista Care Corporation)

      

Series A 5.25% 11/15/37

      1,005,000        968,539  

Series A 5.25% 11/15/47

      1,130,000        1,033,848  

Puerto Rico Industrial Tourist Educational Medical & Environmental Control Facilities Financing Authority

      

(Hospital Auxilio Mutuo Obligated Group Project) Series A 6.00% 7/1/33

      1,020,000        1,046,816  
     

 

 

  
     9,843,607  
     

 

 

  

Housing Revenue Bonds – 4.36%

      

Idaho Housing & Finance Association

      

Series A 4.50% 1/21/49 (GNMA)

      820,065        876,764  

Idaho Housing & Finance Association Single Family Mortgage Revenue

      

Series A 3.05% 7/1/39 (GNMA)

      1,665,000        1,772,060  

Series A 3.25% 1/1/43 (GNMA)

      820,000        870,446  

 

 

76

Table of Contents
    
            

 

 

      Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Housing Revenue Bonds (continued)

      

Idaho Housing & Finance Association Single Family Mortgage Revenue

      

Series A Class II 4.375% 7/1/32

      250,000      $ 250,343  

Series C 3.00% 1/1/43 (FHA)

      800,000        837,296  
     

 

 

  
             4,606,909  
     

 

 

  

Lease Revenue Bonds – 10.67%

      

Boise Urban Renewal Agency

      

5.00% 12/15/31

      750,000        870,750  

5.00% 12/15/32

      750,000        866,468  

Idaho Fish & Wildlife Foundation

      

(Idaho Department of Fish & Game Headquarters Office Project)

      

4.00% 12/1/36

      650,000        783,907  

4.00% 12/1/39

      1,545,000        1,845,502  

4.00% 12/1/42

      1,300,000        1,533,272  

4.00% 12/1/44

      250,000        292,355  

(Idaho Department of Fish & Game Nampa Regional Office Project) 5.00% 12/1/41

      200,000        247,796  

Idaho Housing & Finance Association Economic Development Facilities Revenue

      

(TDF Facilities Project)

      

Series A 6.50% 2/1/26

      1,350,000        1,373,638  

Series A 7.00% 2/1/36

      1,500,000        1,523,730  

Idaho State Building Authority Revenue

      

(Capitol Mall Parking Project)

      

Series A 4.50% 9/1/26

      485,000        541,958  

Series A 4.50% 9/1/27

      505,000        563,080  

(Department of Health & Welfare Project) Series B 4.00% 9/1/48

      750,000        823,245  
     

 

 

  
     11,265,701  
     

 

 

  

Local General Obligation Bonds – 22.19%

      

Ada & Boise Counties Independent School District Boise City

      

5.00% 8/1/33

      1,010,000        1,247,896  

5.00% 8/1/34

      1,500,000        1,849,230  

5.00% 8/1/35

      1,160,000        1,425,524  

5.00% 8/1/36

      500,000        612,480  

Ada & Canyon Counties Joint School District No. 3 Kuna

      

(Sales Tax & Credit Enhancement Guaranty)

      

Series B 5.00% 9/15/33

      1,000,000        1,242,900  

 

77

Table of Contents
Schedules of investments
Delaware Tax-Free Idaho Fund        

 

 

      Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Local General Obligation Bonds (continued)

      

Ada & Canyon Counties Joint School District No. 3 Kuna

      

(Sales Tax & Credit Enhancement Guaranty)

      

Series B 5.00% 9/15/35

      1,100,000      $ 1,359,721  

Canyon County School District No. 131 Nampa

      

(School Board Guaranteed) Series B 5.00% 8/15/23

      1,295,000        1,462,223  

Canyon County School District No. 132 Caldwell

      

Series A 5.00% 9/15/22 (AGM)

      1,725,000        1,731,607  

Series A 5.00% 9/15/23 (AGM)

      1,810,000        1,816,878  

Canyon County School District No. 139 Vallivue

      

(School Board Guaranteed)

      

5.00% 9/15/33

      1,000,000        1,131,690  

Series B 5.00% 9/15/24

      1,480,000        1,621,310  

Idaho Bond Bank Authority Revenue

      

Series A 4.00% 9/15/33

      530,000        614,567  

Series A 4.00% 9/15/37

      1,000,000        1,146,400  

Series C 5.00% 9/15/42

      500,000        614,175  

Madison County School District No. 321 Rexburg

      

(Sales Tax & Credit Enhancement Guaranty)

      

Series B 5.00% 8/15/25

      1,080,000        1,325,203  

Series B 5.00% 8/15/26

      500,000        631,845  

Nez Perce County Independent School District No. 1

      

(Sales Tax & Credit Enhancement Guaranty)

      

Series B 5.00% 9/15/36

      1,000,000        1,230,020  

Series B 5.00% 9/15/37

      1,000,000        1,225,530  

Twin Falls County School District No. 411

      

(School Board Guaranteed) Series A 4.75% 9/15/37

      1,000,000        1,128,930  
     

 

 

  
        23,418,129  
     

 

 

  

Pre-Refunded Bonds – 6.38%

      

Boise State University Revenue

      

(General Project)

      

Series A 4.00% 4/1/37-22 §

      1,250,000        1,322,262  

Series A 5.00% 4/1/42-22 §

      1,350,000        1,449,306  

Idaho Health Facilities Authority Revenue

      

(Trinity Health Credit Group)

      

Series D 4.50% 12/1/37-20 §

      1,385,000        1,399,778  

Series ID 5.00% 12/1/32-22 §

      1,000,000        1,081,290  

Idaho State Building Authority Revenue

      

Series B 5.00% 9/1/40-22 §

      250,000        273,960  

 

78

Table of Contents
    
            

 

 

      Principal amount°      Value (US $)  

Municipal Bonds (continued)

                  

Pre-Refunded Bonds (continued)

      

Nampa Development Corporation Revenue

      

(Library Square Project) 144A 5.00% 9/1/31-24 #, §

      1,000,000      $ 1,206,390  
     

 

 

  
     6,732,986  
     

 

 

  

Special Tax Revenue Bonds – 16.31%

      

GDB Debt Recovery Authority of Puerto Rico

      

7.50% 8/20/40

      631,620        433,449  

Guam Government Business Privilege Tax Revenue

      

Series A 5.125% 1/1/42

      545,000        559,268  

Series A 5.25% 1/1/36

      705,000        727,038  

Series B-1 5.00% 1/1/42

      1,425,000        1,459,642  

Idaho Water Resource Board Loan Program Revenue

      

(Ground Water Rights Mitigation) Series A 5.00% 9/1/32

      3,565,000        3,872,802  

Ketchum Urban Renewal Agency Tax Increment Revenue

      

5.50% 10/15/34

      1,500,000        1,501,725  

Puerto Rico Sales Tax Financing Revenue

      

(Restructured)

      

Series A-1 4.55% 7/1/40

      875,000        931,858  

Series A-1 4.75% 7/1/53

      3,485,000        3,662,874  

Series A-1 5.00% 7/1/58

      1,531,000        1,634,649  

Series A-1 5.273% 7/1/46 ^

      1,240,000        355,719  

Series A-2 4.329% 7/1/40

      730,000        766,507  

Series A-2 4.784% 7/1/58

      1,000,000        1,053,310  

Virgin Islands Public Finance Authority Revenue

      

(Senior Lien-Matching Fund Loan Note) 5.00% 10/1/29 (AGM)

      250,000        254,790  
     

 

 

  
          17,213,631  
     

 

 

  

State General Obligation Bonds – 1.77%

      

Commonwealth of Puerto Rico

      

Series A 8.00% 7/1/35 ‡

      610,000        372,863  

Series B 5.00% 7/1/35 ‡

      145,000        103,131  

Series B 5.75% 7/1/38 ‡

      460,000        326,025  

Series C 6.00% 7/1/39 ‡

      465,000        327,244  

(Public Improvement)

      

Series A 5.00% 7/1/24 ‡

      210,000        149,363  

Series A 5.00% 7/1/41 ‡

      325,000        203,531  

 

79

Table of Contents
Schedules of investments
Delaware Tax-Free Idaho Fund        

 

 

      Principal amount°      Value (US $)  

  Municipal Bonds (continued)

 

State General Obligation Bonds (continued)

      

Commonwealth of Puerto Rico

      

(Public Improvement)

      

Series A 5.25% 7/1/34 ‡

      175,000      $ 124,906  

Series A 5.375% 7/1/33 ‡

      365,000        257,781  
     

 

 

  
             1,864,844  
     

 

 

  

Transportation Revenue Bonds – 2.69%

      

Boise City Airport Revenue

      

(Air Terminal Facilities Project) 5.75% 9/1/20 (AGM) (AMT)

      500,000        500,000  

(Parking Facilities Project) 4.00% 9/1/32

      2,180,000        2,235,023  

Idaho Housing & Finance Association

      

(Federal Highway Trust Fund) Series A 5.00% 7/15/31

      80,000        100,488  
     

 

 

  
     2,835,511  
     

 

 

  

Water & Sewer Revenue Bonds – 1.30%

      

Guam Government Waterworks Authority

      

5.00% 7/1/40

      370,000        429,578  

5.00% 1/1/46

      835,000        944,368  
     

 

 

  
     1,373,946  
     

 

 

  

Total Municipal Bonds (cost $97,617,536)

        102,534,982  
     

 

 

  
      Number of shares          

  Short-Term Investments – 1.84%

 

Money Market Mutual Fund – 1.44%

      

Dreyfus AMT-Free Tax Exempt Cash Management Fund - Institutional Shares (seven-day effective yield 0.00%)

      1,516,489        1,516,489  
     

 

 

  
     1,516,489  
     

 

 

  

 

 

80

Table of Contents
    
            

 

 

      Principal amount°      Value (US $)  

  Variable Rate Demand Notes – 0.40%¤

      

Idaho Health Facilities Authority Revenue

      

(St. Luke’s Health System Project) Series C 0.02% 3/1/48 (LOC – US Bank N.A.)

      425,000      $ 425,000  
     

 

 

  
     425,000  
     

 

 

  

  Total Short-Term Investments (cost $1,941,489)

 

      1,941,489  
     

 

 

  

  Total Value of Securities–98.99%
  (cost $99,559,025)

      $       104,476,471  
     

 

 

  

 

°

Principal amount shown is stated in USD unless noted that the security is denominated in another currency.

 

#

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $5,536,226, which represents 5.25% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”

 

^

Zero-coupon security. The rate shown is the effective yield at the time of purchase.

 

•

Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at August 31, 2020. For securities based on a published reference rate and spread, the reference rate and spread are indicated in their description above. The reference rate descriptions (i.e. LIBOR03M, LIBOR06M, etc.) used in this report are identical for different securities, but the underlying reference rates may differ due to the timing of the reset period. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their description above.

 

‡

Non-income producing security. Security is currently in default.

 

§

Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 8 in “Notes to financial statements.”

 

¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of August 31, 2020.

Summary of abbreviations:

AGM – Insured by Assured Guaranty Municipal Corporation

AMT – Subject to Alternative Minimum Tax

FHA – Federal Housing Administration

GNMA – Government National Mortgage Association

ICE – Intercontinental Exchange, Inc.

 

81

Table of Contents
Schedules of investments
Delaware Tax-Free Idaho Fund        

 

 

Summary of abbreviations: (continued)

LIBOR – London interbank offered rate

LIBOR03M – ICE LIBOR USD 3 Month

LIBOR06M – ICE LIBOR USD 6 Month

LOC – Letter of Credit

N.A. – National Association

USD – US Dollar

See accompanying notes, which are an integral part of the financial statements.

 

82

Table of Contents
Schedules of investments
Delaware Tax-Free New York Fund    August 31, 2020

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds – 98.59%

      

 

  

Corporate Revenue Bonds – 6.11%

      

Erie County Tobacco Asset Securitization

      

(Asset-Backed) Series A 1.53% 6/1/60 ^

      25,400,000      $ 1,154,430  

New York Liberty Development

      

(Goldman Sachs Headquarters Issue) 5.25% 10/1/35

      1,000,000        1,395,610  

New York Transportation Development Corporation Special Facilities Revenue

      

(Delta Air Lines - LaGuardia Airport Terminals C&D Redevelopment Project) 5.00% 1/1/36 (AMT)

      1,000,000        1,080,080  

Suffolk Tobacco Asset Securitization

      

Series B 5.25% 6/1/37

      700,000        726,705  

TSASC Revenue

      

(Senior) Fiscal 2017 Series A 5.00% 6/1/41

      900,000        1,015,614  
     

 

 

  
                5,372,439  
     

 

 

  

Education Revenue Bonds – 19.36%

      

Albany Industrial Development Agency Civic Facilities Revenue

      

(Brighter Choice Charter School) Series A 5.00% 4/1/37

      250,000        250,108  

Buffalo & Erie County Industrial Land Development

      

(Tapestry Charter School Project) Series A 5.00% 8/1/52

      500,000        519,815  

Build NYC Resource

      

(Bronx Charter School for Excellence Project)

      

Series A 5.00% 4/1/33

      500,000        526,770  

Series A 5.50% 4/1/43

      500,000        527,270  

(Inwood Academy for Leadership Charter School Project)

      

Series A 144A 5.50% 5/1/48 #

      500,000        538,115  

(Manhattan College Project) 5.00% 8/1/47

      500,000        569,750  

(Metropolitan College of New York Project) 5.50% 11/1/44

      600,000        632,052  

(Metropolitan Lighthouse Charter School Project)

      

Series A 144A 5.00% 6/1/52 #

      250,000        263,130  

(New Dawn Charter Schools Project) 144A 5.75% 2/1/49 #

      500,000        523,115  

(The Packer Collegiate Institute Project) 5.00% 6/1/40

      750,000        831,525  

 

83

Table of Contents
Schedules of investments
Delaware Tax-Free New York Fund   

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Education Revenue Bonds (continued)

      

Dutchess County Local Development

      

(The Culinary Institute of America Project) Series A-1 5.00% 7/1/46

      300,000      $ 321,639  

Hempstead Town Local Development

      

(Hofstra University Project) 5.00% 7/1/42

      500,000        584,395  

Monroe County Industrial Development Revenue

      

(St. John Fisher College Project) Series A 5.50% 6/1/39

      300,000        329,421  

(University of Rochester Project) Series C 4.00% 7/1/43

      500,000        562,010  

New York City Trust for Cultural Resources

      

(Alvin Ailey Dance Foundation) Series A 4.00% 7/1/46

      1,000,000        1,062,680  

(Whitney Museum of American Art) 5.00% 7/1/31

      500,000        506,005  

New York State Dormitory Authority

      

(Barnard College) Series A 5.00% 7/1/35

      400,000        458,612  

(Fordham University) 5.00% 7/1/44

      650,000        723,444  

(Marymount Manhattan College) 5.00% 7/1/24

      285,000        285,618  

(New York University) 5.50% 7/1/40 (AMBAC)

      740,000        1,078,987  

(Pratt Institute) Series A 5.00% 7/1/34

      500,000        556,160  

(Touro College & University) Series A 5.50% 1/1/44

      1,000,000        1,058,740  

(University of Rochester Project) Unrefunded Series A 5.125% 7/1/39

      20,000        20,019  

Onondaga Civic Development Revenue

      

(Le Moyne College Project)

      

Series B 4.00% 7/1/39

      325,000        343,934  

Series B 4.00% 7/1/40

      300,000        316,542  

St. Lawrence County Industrial Development Agency Civic Development Revenue

      

(St. Lawrence University Project) Series A 4.00% 7/1/43

      1,000,000                1,068,830  

Tompkins County Development

      

(Ithaca College Project)

      

5.00% 7/1/34

      750,000        855,225  

5.00% 7/1/41

      500,000        592,075  

 

84

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Education Revenue Bonds (continued)

      

Troy Industrial Development Authority

      

(Rensselaer Polytechnic Institute Project) Series E 5.20% 4/1/37

      500,000      $ 513,665  

Yonkers Economic Development Educational Revenue

      

(Charter School of Educational Excellence Project)

      

Series A 6.25% 10/15/40

      600,000        602,262  
     

 

 

  
        17,021,913  
     

 

 

  

Electric Revenue Bonds – 6.69%

      

Build NYC Resource

      

(Brooklyn Navy Yard Cogeneration Partners, L.P. Project) 144A 5.25% 12/31/33 (AMT)#

      500,000        530,775  

Long Island Power Authority Electric System Revenue

      

5.00% 9/1/37

      450,000        565,272  

5.00% 9/1/47

      500,000        603,305  

Series A 5.00% 9/1/44

      750,000        860,445  

New York State Power Authority Revenue

      

Series A 4.00% 11/15/50

      1,000,000        1,182,110  

Series A 5.00% 11/15/38

      500,000        527,300  

Puerto Rico Electric Power Authority Revenue

      

Series A 5.05% 7/1/42 ‡

      65,000        44,850  

Series AAA 5.25% 7/1/25 ‡

      35,000        24,194  

Series WW 5.00% 7/1/28 ‡

      270,000        186,300  

Series XX 4.75% 7/1/26 ‡

      40,000        27,400  

Series XX 5.25% 7/1/40 ‡

      390,000        269,587  

Series XX 5.75% 7/1/36 ‡

      140,000        97,650  

Series ZZ 4.75% 7/1/27 ‡

      30,000        20,550  

Series ZZ 5.25% 7/1/24 ‡

      50,000        34,563  

Utility Debt Securitization Authority

      

(Restructuring Bonds) 5.00% 12/15/37

      750,000        904,462  
     

 

 

  
                5,878,763  
     

 

 

  

Healthcare Revenue Bonds – 13.77%

      

Buffalo & Erie County Industrial Land Development

      

(Catholic Health System Project) 5.25% 7/1/35

      250,000        285,405  

Build NYC Resource

      

(The Children’s Aid Society Project) 4.00% 7/1/49

      1,000,000        1,121,760  

 

85

Table of Contents
Schedules of investments
Delaware Tax-Free New York Fund   

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Dutchess County Local Development

      

(Nuvance Health) Series B 4.00% 7/1/49

      1,000,000      $ 1,088,590  

Guilderland Industrial Development Agency

      

(Albany Place Development Project) Series A 144A 5.875% 1/1/52 #, ‡

      500,000        375,000  

Monroe County Industrial Development

      

(The Rochester General Hospital Project)

      

5.00% 12/1/36

      405,000        471,744  

5.00% 12/1/46

      540,000        621,265  

(The Unity Hospital of Rochester Project) 5.50% 8/15/40 (FHA)

      585,000        594,945  

Nassau County Local Economic Assistance

      

(Catholic Health Services of Long Island Obligated Group Project) 5.00% 7/1/33

      725,000        809,897  

New York City Trust for Cultural Resources

      

(Carnegie Hall) 5.00% 12/1/39

      250,000        302,545  

New York State Dormitory Authority

      

(Montefiore Obligated Group)

      

Series A 4.00% 8/1/38

      1,000,000                1,090,900  

Series A 4.00% 9/1/50

      1,000,000        1,081,230  

(NYU Langone Hospitals Obligated Group) Series A 4.00% 7/1/53

      500,000        562,275  

New York State Dormitory Authority Revenue Non-State Supported Debt

      

(New York University Hospitals Center) Series A 4.00% 7/1/40

      465,000        511,170  

(Orange Regional Medical Center Obligated Group)

      

144A 5.00% 12/1/34 #

      500,000        581,765  

144A 5.00% 12/1/45 #

      700,000        769,468  

Orange County Funding Assisted Living Residence Revenue

      

(The Hamlet at Wallkill Assisted Living Project) 6.50% 1/1/46

      400,000        400,892  

Southold Local Development Revenue

      

(Peconic Landing at Southold Project) 5.00% 12/1/45

      750,000        783,157  

 

86

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Suffolk County Economic Development Revenue

      

(Peconic Landing at Southhold Project) 6.00% 12/1/40

      650,000      $ 659,016  
     

 

 

  
                12,111,024  
     

 

 

  

Lease Revenue Bonds – 6.82%

      

Hudson Yards Infrastructure

      

Unrefunded Fiscal 2012 Series A 5.75% 2/15/47

      385,000        393,932  

MTA Hudson Rail Yards Trust Obligations

      

(The Metropolitan Transportation Authority) Series A 5.00% 11/15/56

      710,000        789,286  

New York City Industrial Development Agency

      

(Senior Trips) Series A 5.00% 7/1/28 (AMT)

      1,500,000        1,578,300  

New York City Transitional Finance Authority Revenue

      

(Building Aid) Fiscal 2020 Subordinate Series S-1B 4.00% 7/15/45

      445,000        506,624  

New York Liberty Development

      

(4 World Trade Center Project) 5.00% 11/15/31

      500,000        524,030  

(Class 1 - 3 World Trade Center Project) 144A 5.00% 11/15/44 #

      1,500,000        1,591,965  

(Class 2 - 3 World Trade Center Project) 144A 5.375% 11/15/40 #

      500,000        528,285  

New York State Dormitory Authority

      

(State Sales Tax) Series A 4.00% 3/15/48

      80,000        89,446  
     

 

 

  
        6,001,868  
     

 

 

  

Local General Obligation Bond – 0.71%

      

New York City

      

Subordinate Series E-1 5.25% 3/1/35

      500,000        625,335  
     

 

 

  
        625,335  
     

 

 

  

Pre-Refunded Bonds – 4.55%

      

Buffalo & Erie County Industrial Land Development

      

(Buffalo State College Foundation Housing Project)

      

Series A 6.00% 10/1/31-21 §

      525,000        542,687  

Dutchess County Local Development

      

(Health Quest Systems Project) Series A 5.00% 7/1/44-24 §

      1,000,000        1,178,030  

 

87

Table of Contents
Schedules of investments
Delaware Tax-Free New York Fund   

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Pre-Refunded Bonds (continued)

      

Monroe County Industrial Development Revenue

      

(Nazareth College of Rochester Project)

      

5.25% 10/1/31-21 §

      500,000      $ 526,960  

5.50% 10/1/41-21 §

      500,000        528,310  

Onondaga Civic Development Revenue

      

(St. Joseph’s Hospital Health Center Project)

      

4.50% 7/1/32-22 §

      380,000        408,675  

5.00% 7/1/42-22 §

      750,000        813,435  
     

 

 

  
                3,998,097  
     

 

 

  

Resource Recovery Revenue Bond – 1.76%

      

Niagara Area Development Revenue

      

(Covanta Project) Series A 144A 4.75% 11/1/42 (AMT)#

      1,500,000        1,551,270  
     

 

 

  
        1,551,270  
     

 

 

  

Special Tax Revenue Bonds – 19.01%

      

Build NYC Resource

      

(YMCA of Greater New York Project) 5.00% 8/1/40

      450,000        497,538  

Glen Cove Local Economic Assistance

      

(Garvies Point Public Improvement Project) Series A 5.00% 1/1/56

      250,000        258,055  

Guam Government Business Privilege Tax Revenue

      

Series A 5.25% 1/1/36

      240,000        247,502  

New York City Transitional Finance Authority Revenue

      

(Building Aid)

      

Fiscal 2012 Subordinate Series S-1A 5.25% 7/15/37

      1,000,000        1,038,920  

Fiscal 2015 Subordinate Series S-1 5.00% 7/15/43

      1,000,000        1,153,720  

(Future Tax Secured)

      

Fiscal 2014 Subordinate Series A-1 5.00% 11/1/42

      750,000        840,967  

Fiscal 2014 Subordinate Series B-1 5.00% 11/1/40

      750,000        855,495  

Fiscal 2015 Subordinate Series E-1 5.00% 2/1/41

      1,000,000        1,159,270  

Fiscal 2016 Subordinate Series C-1 4.00% 11/1/42

      500,000        573,845  

Fiscal 2017 Subordinate Series A-1 4.00% 5/1/42

      500,000        552,205  

Fiscal 2017 Subordinate Series E-1 5.00% 2/1/43

      1,000,000        1,189,530  

Unrefunded Fiscal 2011 Subordinate Series D-1 5.25% 2/1/29

      195,000        198,916  

 

88

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Special Tax Revenue Bonds (continued)

      

New York Convention Center Development Revenue

      

(Hotel Unit Fee Secured) 5.00% 11/15/35

      1,000,000      $ 1,108,400  

New York State Dormitory Authority Revenue

      

(General Purpose) Series C 5.00% 3/15/34

      500,000        511,865  

New York State Urban Development Revenue

      

(General Purpose) Series A 4.00% 3/15/36

      500,000        560,295  

Puerto Rico Sales Tax Financing Revenue

      

(Restructured)

      

Series A-1 4.55% 7/1/40

      425,000        452,617  

Series A-1 4.75% 7/1/53

      1,475,000        1,550,284  

Series A-1 5.00% 7/1/58

      2,745,000        2,930,836  

Series A-2 4.536% 7/1/53

      1,000,000        1,036,770  
     

 

 

  
             16,717,030  
     

 

 

  

State General Obligation Bonds – 1.29%

      

Commonwealth of Puerto Rico

      

Series A 8.00% 7/1/35 ‡

      465,000        284,232  

(Public Improvement)

      

Series A 5.00% 7/1/41 ‡

      265,000        165,956  

Series A 5.375% 7/1/33 ‡

      260,000        183,625  

Series B 5.75% 7/1/38 ‡

      35,000        24,806  

Series C 6.00% 7/1/39 ‡

      680,000        478,550  
     

 

 

  
     1,137,169  
     

 

 

  

Transportation Revenue Bonds – 11.89%

      

Buffalo & Fort Erie Public Bridge Authority

      

5.00% 1/1/47

      435,000        515,279  

Metropolitan Transportation Authority Revenue

      

Series D 5.00% 11/15/32

      500,000        518,370  

(Green Bonds)

      

Series B 4.00% 11/15/50

      1,000,000        1,004,840  

Series C-1 5.25% 11/15/55

      750,000        844,245  

New York State Thruway Authority General Revenue

      

Series B 4.00% 1/1/50

      1,000,000        1,141,640  

Series L 5.00% 1/1/35

      100,000        122,976  

(Junior Indebtedness Obligation) Series A 5.25% 1/1/56

      1,000,000        1,150,400  

 

89

Table of Contents
Schedules of investments
Delaware Tax-Free New York Fund   

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Transportation Revenue Bonds (continued)

      

Port Authority of New York & New Jersey

      

(Consolidated Bonds - Two Hundred Seventeen Series) 4.00% 11/1/49

      1,000,000      $ 1,147,520  

(Consolidated Bonds - Two Hundred Sixteen Series) 4.00% 9/1/49

      1,000,000        1,145,260  

(JFK International Air Terminal Project)

      

Series 8 6.00% 12/1/42

      700,000        708,561  

Series 8 6.50% 12/1/28

      550,000        557,387  

Triborough Bridge & Tunnel Authority

      

(MTA Bridges and Tunnels)

      

Series A 5.00% 11/15/47

      1,000,000        1,191,310  

Series A 5.00% 11/15/49

      325,000        411,388  
     

 

 

  
                10,459,176  
     

 

 

  

Water & Sewer Revenue Bonds – 6.63%

      

New York City Municipal Water Finance Authority Water & Sewer System Revenue

      

(Second General Resolution)

      

Fiscal 2017 Series DD 5.00% 6/15/47

      1,000,000        1,218,610  

Fiscal 2019 Subordinate Series FF-1 4.00% 6/15/49

      1,000,000        1,154,600  

Fiscal 2020 Series AA 4.00% 6/15/40

      1,000,000        1,182,130  

Fiscal 2020 Series GG-1 4.00% 6/15/50

      500,000        584,675  

New York State Environmental Facilities Clean Water and Drinking Water Revenue

      

(New York City Municipal Water Finance Authority Projects - Second Resolution)

      

Fiscal 2011 Series B 5.00% 6/15/30

      500,000        517,870  

Series B 4.00% 6/15/49

      1,000,000        1,173,010  
     

 

 

  
     5,830,895  
     

 

 

  

Total Municipal Bonds (cost $83,036,135)

 

      86,704,979  
     

 

 

  
     

 

  

Short-Term Investments – 0.46%

      

 

  

Variable Rate Demand Notes – 0.46%¤

      

New York City Municipal Water Finance Authority Water & Sewer System Revenue

      

(Second General Resolution) Fiscal 2011 Subordinate Series DD-2 0.02% 6/15/43 (SPA - JPMorgan Chase Bank N.A.)

      200,000        200,000  

 

90

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

 

  

Short-Term Investments (continued)

      

 

  

New York City Transitional Finance Authority Revenue

      

Fiscal 2013 Subordinate Series A-4 0.02% 8/1/39 (SPA - JPMorgan Chase Bank N.A.)

      200,000      $ 200,000  
     

 

 

  

Total Short-Term Investments (cost $400,000)

                  400,000  
     

 

 

  

Total Value of Securities–99.05%
    (cost $83,436,135)

      $ 87,104,979  
     

 

 

  

 

°

Principal amount shown is stated in USD unless noted that the security is denominated in another currency.

 

^

Zero-coupon security. The rate shown is the effective yield at the time of purchase.

 

#

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $7,252,888, which represents 8.25% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”

 

‡

Non-income producing security. Security is currently in default.

 

§

Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 8 in “Notes to financial statements.”

 

¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of August 31, 2020.

Summary of abbreviations:

AMBAC – Insured by AMBAC Assurance Corporation

AMT – Subject to Alternative Minimum Tax

FHA – Federal Housing Administration

L.P. – Limited Partnership

N.A. – National Association

SPA – Stand-by Purchase Agreement

USD – US Dollar

See accompanying notes, which are an integral part of the financial statements.

 

91

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Schedules of investments
Delaware Tax-Free Pennsylvania Fund    August 31, 2020

 

 

     Principal amount°        Value (US $)  

 

  

Municipal Bonds – 98.50%

      

 

  

Corporate Revenue Bonds – 7.54%

      

Allegheny County Industrial Development Authority Revenue

      

(United States Steel Corporation Project)

      

4.875% 11/1/24

      3,900,000      $ 3,714,633  

5.125% 5/1/30

      600,000        541,824  

Pennsylvania Commonwealth Financing Authority Revenue

      

(Tobacco Master Settlement Payment Revenue) 4.00% 6/1/39 (AGM)

      5,045,000        5,727,841  

Pennsylvania Economic Development Financing Authority

      

(National Gypsum) 5.50% 11/1/44 (AMT)

      4,000,000        4,110,320  

Pennsylvania Economic Development Financing Authority Solid Waste Disposal Revenue

      

(CarbonLite P, LLC Project)

      

144A 5.25% 6/1/26 (AMT)#

      1,750,000        1,745,555  

144A 5.75% 6/1/36 (AMT)#

      2,375,000        2,338,543  

(Proctor & Gamble Paper Project) 5.375% 3/1/31 (AMT)

      11,000,000        14,953,290  
     

 

 

  
             33,132,006  
     

 

 

  

Education Revenue Bonds – 12.15%

      

Allegheny County Higher Education Building Authority Revenue

      

(Carnegie Mellon University) Series A 5.00% 3/1/24

      1,000,000        1,071,630  

(Chatham University) Series A 5.00% 9/1/30

      1,500,000        1,539,075  

(Robert Morris University)

      

5.00% 10/15/47

      1,500,000        1,560,000  

Series A 5.50% 10/15/30

      1,275,000        1,279,067  

Series A 5.75% 10/15/40

      2,200,000        2,206,160  

Bucks County Industrial Development Authority Revenue

      

(George School Project) 5.00% 9/15/36

      4,455,000        4,661,400  

(School Lane Charter School Project) Series A 5.125% 3/15/46

      2,500,000        2,749,250  

Chester County Industrial Development Authority Revenue

      

(Avon Grove Charter School Project)

      

Series A 5.00% 12/15/47

      1,160,000        1,275,478  

Series A 5.00% 12/15/51

      770,000        844,551  

 

92

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Education Revenue Bonds (continued)

      

Chester County Industrial Development Authority Revenue

      

(Renaissance Academy Charter School Project)

      

5.00% 10/1/34

      1,000,000      $ 1,077,710  

5.00% 10/1/39

      1,250,000        1,336,875  

5.00% 10/1/44

      1,000,000        1,062,340  

Chester County Industrial Development Authority Student Housing Revenue

      

(University Student Housing Project at West Chester University)

      

Series A 5.00% 8/1/30

      1,100,000        1,139,479  

Series A 5.00% 8/1/45

      1,250,000        1,267,988  

Delaware County Authority Revenue

      

(Cabrini University) 5.00% 7/1/47

      2,000,000        2,084,380  

East Hempfield Township Industrial Development Authority

      

(Student Services - Student Housing Project at Millersville University)

      

5.00% 7/1/39

      875,000        889,569  

5.00% 7/1/45

      2,500,000        2,524,125  

5.00% 7/1/46

      1,425,000                1,442,727  

5.00% 7/1/47

      1,000,000        1,014,920  

Montgomery County Higher Education and Health Authority

      

(Arcadia University) 5.75% 4/1/40

      2,000,000        2,155,120  

Northeastern Pennsylvania Hospital and Education Authority Revenue

      

(King’s College Project) 5.00% 5/1/44

      1,000,000        1,082,960  

Pennsylvania Higher Educational Facilities Authority College & University Revenue

      

(Drexel University) 5.00% 5/1/41

      1,000,000        1,193,220  

Philadelphia Authority for Industrial Development Revenue

      

(First Philadelphia Preparatory Charter School Project)

      

Series A 7.25% 6/15/43

      2,500,000        2,796,600  

(Green Woods Charter School Project)

      

Series A 5.50% 6/15/22

      390,000        401,665  

Series A 5.75% 6/15/42

      2,500,000        2,559,350  

 

93

Table of Contents
Schedules of investments
Delaware Tax-Free Pennsylvania Fund   

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Education Revenue Bonds (continued)

      

Philadelphia Authority for Industrial Development Revenue

      

(International Apartments of Temple University)

      

Series A 5.375% 6/15/30

      1,500,000      $ 1,502,490  

Series A 5.625% 6/15/42

      3,000,000        3,003,870  

(Philadelphia Performing Arts Charter School Project) 144A 6.75% 6/15/43 #

      2,550,000        2,555,839  

(Tacony Academy Charter School Project)

      

Series A-1 6.75% 6/15/33

      1,020,000        1,104,946  

Series A-1 7.00% 6/15/43

      1,535,000        1,654,730  

State Public School Building Authority

      

(Montgomery County Community College) 5.00% 5/1/28

      2,000,000        2,335,740  
     

 

 

  
             53,373,254  
     

 

 

  

Electric Revenue Bonds – 0.86%

      

Puerto Rico Electric Power Authority

      

Series A 5.05% 7/1/42 ‡

      400,000        276,000  

Series AAA 5.25% 7/1/25 ‡

      225,000        155,531  

Series WW 5.00% 7/1/28 ‡

      1,385,000        955,650  

Series XX 4.75% 7/1/26 ‡

      185,000        126,725  

Series XX 5.25% 7/1/40 ‡

      2,160,000        1,493,100  

Series XX 5.75% 7/1/36 ‡

      655,000        456,863  

Series ZZ 4.75% 7/1/27 ‡

      145,000        99,325  

Series ZZ 5.25% 7/1/24 ‡

      315,000        217,744  
     

 

 

  
     3,780,938  
     

 

 

  

Healthcare Revenue Bonds – 38.22%

      

Allegheny County Hospital Development Authority Revenue

      

(Allegheny Health Network Obligated Group Issue) Series A 4.00% 4/1/44

      1,350,000        1,497,110  

(University of Pittsburgh Medical Center)

      

Series A 4.00% 7/15/36

      1,750,000        2,016,735  

Series A 4.00% 7/15/37

      1,500,000        1,722,660  

Berks County Industrial Development Authority Revenue

      

(The Highlands at Wyomissing)

      

5.00% 5/15/38

      415,000        443,564  

5.00% 5/15/43

      500,000        530,320  

5.00% 5/15/48

      1,000,000        1,055,820  

Series A 5.00% 5/15/37

      1,365,000        1,466,065  

Series A 5.00% 5/15/42

      500,000        531,230  

 

94

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     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Berks County Industrial Development Authority Revenue

      

(The Highlands at Wyomissing)

      

Series A 5.00% 5/15/47

      600,000      $ 633,852  

Series C 5.00% 5/15/42

      1,000,000        1,062,450  

Series C 5.00% 5/15/47

      1,000,000        1,056,420  

(Tower Health Project)

      

4.00% 11/1/47

      2,500,000        2,487,025  

5.00% 11/1/47

      4,500,000        4,826,520  

5.00% 11/1/50

      5,105,000        5,458,725  

Bucks County Industrial Development Authority Revenue

      

(Saint Luke’s University Health Network Project)

      

4.00% 8/15/44

      2,400,000        2,625,696  

4.00% 8/15/50

      1,400,000        1,522,150  

Butler County Hospital Authority Revenue

      

(Butler Health System Project) Series A 5.00% 7/1/39

      1,625,000                1,770,015  

Centre County Hospital Authority Revenue

      

(Mount Nittany Medical Center Project) Series A 4.00% 11/15/47

      1,400,000        1,549,100  

Chester County Health and Education Facilities Authority

      

(Main Line Health System) Series A 4.00% 9/1/50

      3,500,000        4,005,085  

Cumberland County Municipal Authority Revenue

      

(Asbury Pennsylvania Obligated Group) 5.00% 1/1/45

      3,000,000        2,897,400  

(Diakon Lutheran Social Ministries Project) 5.00% 1/1/38

      2,000,000        2,106,340  

(Penn State Health) 4.00% 11/1/49

      9,825,000        11,100,383  

DuBois Hospital Authority

      

(Penn Highlands Healthcare) 4.00% 7/15/48

      2,000,000        2,175,620  

Franklin County Industrial Development Authority Revenue

      

(Menno-Haven Project) 5.00% 12/1/53

      1,900,000        1,908,778  

Geisinger Authority Health System Revenue

      

(Geisinger Health System)

      

Series A-1 5.00% 2/15/45

      5,000,000        5,907,300  

Series A-1 5.125% 6/1/41

      4,000,000        4,102,200  

 

95

Table of Contents
Schedules of investments
Delaware Tax-Free Pennsylvania Fund   

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

General Authority of Southcentral Pennsylvania Revenue

      

(WellSpan Health Obligated Group)

      

Series A 5.00% 6/1/38

      1,000,000      $         1,254,330  

Series A 5.00% 6/1/39

      5,000,000        6,253,800  

Indiana County Hospital Authority Revenue

      

(Indiana Regional Medical Center) Series A 6.00% 6/1/39

      1,625,000        1,729,650  

Lancaster County Hospital Authority Revenue

      

(Brethren Village Project)

      

5.25% 7/1/35

      250,000        257,825  

5.25% 7/1/41

      1,000,000        1,041,230  

5.50% 7/1/45

      1,000,000        1,029,360  

(Landis Homes Retirement Community Project) Series A 5.00% 7/1/45

      2,000,000        2,052,460  

(Masonic Villages Project)

      

5.00% 11/1/35

      1,000,000        1,157,330  

5.00% 11/1/36

      510,000        588,795  

5.00% 11/1/37

      250,000        288,097  

(St. Anne’s Retirement Community Project) 5.00% 4/1/33

      1,830,000        1,855,181  

Lehigh County General Purpose Authority Revenue

      

(Bible Fellowship Church Homes Project)

      

5.125% 7/1/32

      1,000,000        1,026,550  

5.25% 7/1/42

      1,500,000        1,531,095  

Lehigh County General Purpose Hospital Authority Revenue

      

(Lehigh Valley Health Network) Series A 4.00% 7/1/49

      5,000,000        5,566,800  

Monroe County Hospital Authority Revenue

      

(Pocono Medical Center)

      

5.00% 7/1/36

      1,710,000        2,003,864  

5.00% 7/1/41

      1,000,000        1,159,550  

Monroeville Finance Authority

      

(University of Pittsburgh Medical Center) 5.00% 2/15/25

      1,000,000        1,185,260  

Montgomery County Higher Education and Health Authority

      

(Thomas Jefferson University)

      

5.00% 9/1/51

      2,000,000        2,402,360  

Series A 4.00% 9/1/49

      2,500,000        2,711,600  

 

96

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     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Montgomery County Industrial Development Authority Revenue

      

(Albert Einstein Healthcare Network) Series A 5.25% 1/15/45

      2,500,000      $         2,634,500  

(Waverly Heights Project)

      

5.00% 12/1/44

      500,000        554,540  

5.00% 12/1/49

      1,250,000        1,381,850  

(Whitemarsh Continuing Care Retirement Community Project)

      

4.00% 1/1/25

      530,000        532,162  

5.375% 1/1/50

      4,000,000        4,051,240  

Series A 5.375% 1/1/51

      1,500,000        1,525,215  

Moon Industrial Development Authority Revenue

      

(Baptist Homes Society) 6.125% 7/1/50

      4,000,000        4,150,720  

Northampton County Industrial Development Authority

      

(Morningstar Senior Living Project) 5.00% 11/1/44

      1,000,000        1,028,070  

Pennsylvania Economic Development Financing Authority First Mortgage Revenue

      

(Tapestry Moon Senior Housing Project)

      

Series A 144A 6.50% 12/1/38 #

      715,000        702,924  

Series A 144A 6.75% 12/1/53 #

      5,400,000        5,232,708  

Pennsylvania Economic Development Financing Authority Revenue

      

(University of Pittsburgh Medical Center) Series A 5.00% 7/1/43

      1,265,000        1,393,334  

Pennsylvania Higher Educational Facilities Authority College & University Revenue

      

(Thomas Jefferson University)

      

Series A 5.00% 9/1/45

      5,000,000        5,662,800  

Series A 5.25% 9/1/50

      2,500,000        2,850,075  

Pennsylvania Higher Educational Facilities Authority Revenue

      

(University of Pennsylvania Health System)

      

4.00% 8/15/49

      6,000,000        6,841,920  

5.00% 8/15/49

      6,000,000        7,435,440  

Series A 4.00% 8/15/42

      4,000,000        4,506,400  

Philadelphia Authority for Industrial Development Revenue

      

(Children’s Hospital of Philadelphia Project) 5.00% 7/1/34

      5,000,000        6,116,600  

 

97

Table of Contents
Schedules of investments
Delaware Tax-Free Pennsylvania Fund   

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Healthcare Revenue Bonds (continued)

      

Philadelphia Authority for Industrial Development Revenue

      

(Thomas Jefferson University) Series A 5.00% 9/1/47

      2,500,000      $ 2,885,700  

(Wesley Enhanced Living Obligated Group) Series A 5.00% 7/1/49

      2,500,000        2,447,500  

Pocono Mountains Industrial Park Authority Revenue

      

(St. Luke’s Hospital - Monroe Project) Series A 5.00% 8/15/40

      4,000,000        4,456,080  
     

 

 

  
             167,943,478  
     

 

 

  

Housing Revenue Bond – 0.45%

      

Philadelphia Authority for Industrial Development Revenue

      

(The PresbyHomes Germantown Project) Series A 5.625% 7/1/35 (HUD)

      1,990,000        1,990,557  
     

 

 

  
     1,990,557  
     

 

 

  

Lease Revenue Bonds – 1.16%

      

Pennsylvania Economic Development Financing Authority Tax-Exempt Private Activity Revenue

      

(The Pennsylvania Rapid Bridge Replacement Project) 5.00% 12/31/29 (AMT)

      500,000        583,110  

Philadelphia Municipal Authority Revenue

      

(Juvenile Justice Services Center)

      

5.00% 4/1/37

      1,250,000        1,505,813  

5.00% 4/1/38

      1,000,000        1,201,730  

5.00% 4/1/39

      1,500,000        1,798,530  
     

 

 

  
     5,089,183  
     

 

 

  

Local General Obligation Bonds – 4.53%

      

Allegheny County

      

Series C-77 5.00% 11/1/43

      4,535,000        5,649,567  

Chester County

      

4.00% 7/15/32

      1,000,000        1,220,590  

City of Philadelphia

      

5.00% 8/1/41

      1,260,000        1,509,833  

Series A 5.00% 8/1/37

      1,750,000        2,117,027  

Series A 5.25% 7/15/29

      2,500,000        2,881,250  

Philadelphia School District

      

Series F 5.00% 9/1/36

      2,000,000        2,386,860  

 

98

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Local General Obligation Bonds (continued)

      

Philadelphia School District

      

Series F 5.00% 9/1/37

      1,500,000      $ 1,785,420  

Series F 5.00% 9/1/38

      2,000,000        2,375,520  
     

 

 

  
             19,926,067  
     

 

 

  

Pre-Refunded/Escrowed to Maturity Bonds – 8.01%

      

Allegheny County

      

Series C-69 5.00% 12/1/28-22 §

      1,000,000        1,107,570  

Series C-70 5.00% 12/1/33-22 §

      2,205,000        2,442,192  

Allegheny County Higher Education Building Authority Revenue

      

(Carlow University Project)

      

6.75% 11/1/31-21 §

      750,000        805,972  

7.00% 11/1/40-21 §

      1,000,000        1,077,170  

Central Bradford Progress Authority

      

(Guthrie Health Issue) 5.375% 12/1/41-21§

      1,000,000        1,062,740  

City of Pittsburgh

      

Series B 5.00% 9/1/26-22 §

      3,000,000        3,284,340  

Delaware County Regional Water Quality Control Authority

      

5.00% 5/1/32-23 §

      2,000,000        2,254,920  

Monroe County Hospital Authority

      

(Pocono Medical Center)

      

Series A 5.00% 1/1/32-22 §

      1,150,000        1,220,437  

Series A 5.00% 1/1/41-22 §

      1,500,000        1,591,875  

Montgomery County Industrial Development Authority Retirement Community Revenue

      

(ACTS Retirement Life Communities Obligated Group)

      

5.00% 11/15/27-22 §

      1,250,000        1,350,150  

5.00% 11/15/28-22 §

      1,600,000        1,728,192  

5.00% 11/15/29-22 §

      680,000        734,482  

Pennsylvania Higher Educational Facilities Authority College & University Revenue

      

(AICUP Financing Program - St. Francis University Project) Series JJ2 6.25% 11/1/41-21 §

      2,355,000        2,519,403  

(Indiana University - Student Housing Project)

      

Series A 5.00% 7/1/27-22 §

      1,740,000        1,884,820  

Series A 5.00% 7/1/41-22 §

      1,500,000        1,624,845  

(Philadelphia University) 5.00% 6/1/32-23 §

      2,000,000        2,259,340  

 

99

Table of Contents
Schedules of investments
Delaware Tax-Free Pennsylvania Fund   

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Pre-Refunded/Escrowed to Maturity Bonds (continued)

      

(Shippensburg University - Student Housing Project) 6.25% 10/1/43-21 §

      2,000,000      $ 2,125,120  

(University of the Arts) 5.20% 3/15/25 (AGC)

      4,490,000        4,989,827  

Philadelphia Authority for Industrial Development Revenue

      

(New Foundations Charter School Project) 6.625% 12/15/41-22 §

      1,000,000        1,140,770  
     

 

 

  
             35,204,165  
     

 

 

  

Special Tax Revenue Bonds – 12.90%

      

Allentown Neighborhood Improvement Zone Development Authority Revenue

      

Series A 5.00% 5/1/42

      2,500,000        2,597,900  

(City Center Project) 144A 5.375% 5/1/42 #

      3,900,000        4,090,632  

(City Center Refunding Project) 144A 5.00% 5/1/42 #

      2,500,000        2,612,100  

Chester County Industrial Development Authority Special Obligation Revenue

      

(Woodlands at Greystone Project)

      

144A 5.00% 3/1/38 #

      560,000        567,336  

144A 5.125% 3/1/48 #

      1,000,000        1,006,490  

GDB Debt Recovery Authority

      

(Taxable) 7.50% 8/20/40

      4,175,172        2,865,212  

Northampton County Industrial Development Authority

      

(Route 33 Project) 7.00% 7/1/32

      1,800,000        1,937,538  

Port Authority of Allegheny County

      

5.75% 3/1/29

      5,200,000        5,334,368  

Puerto Rico Sales Tax Financing Revenue

      

(Restructured)

      

Series A-1 4.75% 7/1/53

      7,958,000        8,364,176  

Series A-1 5.00% 7/1/58

      13,591,000        14,511,111  

Series A-1 5.381% 7/1/46 ^

      24,055,000        6,900,658  

Series A-2 4.329% 7/1/40

      3,150,000        3,307,531  

Series A-2 4.536% 7/1/53

      1,000,000        1,036,770  

 

100

Table of Contents

    

    

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Special Tax Revenue Bonds (continued)

      

Washington County Redevelopment Authority Revenue

      

(Victory Centre Tax Increment Financing Project) 5.00% 7/1/35

      1,500,000      $ 1,532,205  
     

 

 

  
             56,664,027  
     

 

 

  

State General Obligation Bonds – 2.68%

      

Commonwealth of Pennsylvania

      

5.00% 9/15/26

      3,340,000        4,194,606  

Commonwealth of Puerto Rico

      

Series A 8.00% 7/1/35 ‡

      2,175,000        1,329,469  

Series B 5.00% 7/1/35 ‡

      605,000        430,306  

Series C 6.00% 7/1/39 ‡

      1,880,000        1,323,050  

(Public Improvement)

      

Series A 5.00% 7/1/24 ‡

      890,000        633,012  

Series A 5.125% 7/1/37 ‡

      1,340,000        871,000  

Series A 5.25% 7/1/34 ‡

      725,000        517,469  

Series A 5.375% 7/1/33 ‡

      600,000        423,750  

Series A 6.00% 7/1/38 ‡

      880,000        632,500  

Series B 5.75% 7/1/38 ‡

      2,000,000        1,417,500  
     

 

 

  
     11,772,662  
     

 

 

  

Transportation Revenue Bonds – 8.70%

      

Delaware River Joint Toll Bridge Commission

      

(Pennsylvania - New Jersey) 5.00% 7/1/47

      5,000,000        6,049,700  

Pennsylvania Economic Development Financing Authority Exempt Facilities Revenue

      

(Amtrak Project)

      

Series A 5.00% 11/1/32 (AMT)

      3,500,000        3,798,340  

Series A 5.00% 11/1/41 (AMT)

      5,000,000        5,382,550  

Pennsylvania Economic Development Financing Authority Tax-Exempt Private Activity Revenue

      

(The Pennsylvania Rapid Bridge Replacement Project) 5.00% 12/31/34 (AMT)

      2,115,000        2,421,252  

Pennsylvania Turnpike Commission Revenue

      

Series A 5.00% 12/1/23

      2,450,000        2,799,394  

Series A 5.00% 12/1/49

      2,000,000        2,446,860  

Series C 5.00% 12/1/44

      5,000,000        5,608,750  

Philadelphia Airport Revenue

      

Series A 5.00% 7/1/47

      3,750,000        4,366,463  

Series B 5.00% 7/1/47 (AMT)

      3,000,000        3,450,300  

 

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Schedules of investments
Delaware Tax-Free Pennsylvania Fund   

 

 

     Principal amount°      Value (US $)  

 

  

Municipal Bonds (continued)

      

 

  

Transportation Revenue Bonds (continued)

      

Susquehanna Area Regional Airport Authority Revenue

      

5.00% 1/1/35 (AMT)

      800,000      $ 857,808  

5.00% 1/1/38 (AMT)

      1,000,000        1,062,840  
     

 

 

  
             38,244,257  
     

 

 

  

Water & Sewer Revenue Bonds – 1.30%

      

Allegheny County Sanitary Authority

      

5.00% 12/1/28 (BAM)

      2,345,000        2,872,297  

Philadelphia Water & Wastewater Revenue

      

Series A 5.00% 7/1/45

      2,500,000        2,829,550  
     

 

 

  
     5,701,847  
     

 

 

  

Total Municipal Bonds (cost $407,528,531)

 

      432,822,441  
     

 

 

  
     

 

  

Short-Term Investments – 0.35%

      

 

  

Variable Rate Demand Notes – 0.35%¤

      

Philadelphia Hospitals & Higher Education Facilities Authority Revenue

      

(Children’s Hospital of Philadelphia Project)

      

Series A 0.01% 2/15/21 (SPA - Wells Fargo Bank, N.A.)

      645,000        645,000  

Series B 0.01% 7/1/41 (SPA - Bank of America, N.A.)

      900,000        900,000  
     

 

 

  

Total Short-Term Investments (cost $1,545,000)

 

      1,545,000  
     

 

 

  

Total Value of Securities–98.85%
    (cost $409,073,531)

      $ 434,367,441  
     

 

 

  

 

°

Principal amount shown is stated in USD unless noted that the security is denominated in another currency.

 

#

Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2020, the aggregate value of Rule 144A securities was $20,852,127, which represents 4.75% of the Fund’s net assets. See Note 8 in “Notes to financial statements.”

 

‡

Non-income producing security. Security is currently in default.

 

§

Pre-refunded bonds. Municipal bonds that are generally backed or secured by US Treasury bonds. For pre-refunded bonds, the stated maturity is followed by the year in which the bond will be pre-refunded. See Note 8 in “Notes to financial statements.”

 

^

Zero-coupon security. The rate shown is the effective yield at the time of purchase.

 

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¤

Tax-exempt obligations that contain a floating or variable interest rate adjustment formula and an unconditional right of demand to receive payment of the unpaid principal balance plus accrued interest upon a short notice period (generally up to 30 days) prior to specified dates either from the issuer or by drawing on a bank letter of credit, a guarantee, or insurance issued with respect to such instrument. Each rate shown is as of August 31, 2020.

Summary of abbreviations:

AGC – Insured by Assured Guaranty Corporation

AGM – Insured by Assured Guaranty Municipal Corporation

AMT – Subject to Alternative Minimum Tax

BAM – Insured by Build America Mutual Assurance

HUD – Housing and Urban Development Section 8

LLC – Limited Liability Corporation

N.A. – National Association

SPA – Stand-by Purchase Agreement

USD – US Dollar

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of assets and liabilities
        August 31, 2020

 

 

     Delaware Tax-Free
Arizona Fund		      Delaware Tax-Free
California Fund		      Delaware Tax-Free
Colorado Fund		  

Assets:

         

Investments, at value*

    $ 79,139,032      $ 83,306,407      $ 221,058,797  

Cash

      107,337        862,654        —  

Dividend and interest receivable

      676,333        907,049        2,273,235  

Receivable for fund shares sold

      21,765        233,147        61,071  
  

 

 

     

 

 

     

 

 

  

Total Assets

      79,944,467        85,309,257        223,393,103  
  

 

 

     

 

 

     

 

 

  

Liabilities:

         

Cash due to custodian

      —        —        11,626  

Distribution payable

      49,924        54,873        140,201  

Investment management fee payable

      22,442        25,477        79,721  

Distribution fees payable to affiliates

      15,376        15,263        41,737  

Accounting and administration expenses payable to non-affiliates

      14,760        14,899        19,482  

Reports and statements to shareholders expenses payable to non-affiliates

      7,018        7,412        12,725  

Audit and tax fees payable

      5,500        5,500        5,500  

Other accrued expenses

      4,524        5,408        8,822  

Dividend disbursing and transfer agent fees and expenses payable to non-affiliates

      3,524        4,765        12,431  

Dividend disbursing and transfer agent fees and expenses payable to affiliates

      629        667        1,756  

Trustees’ fees and expenses payable to affiliates

      585        625        1,635  

Accounting and administration expenses payable to affiliates

      570        584        985  

Legal fees payable to affiliates

      140        150        392  

Payable for fund shares redeemed

      58        187,612        39,013  
  

 

 

     

 

 

     

 

 

  

Total Liabilities

      125,050        323,235        376,026  
  

 

 

     

 

 

     

 

 

  

Total Net Assets

    $ 79,819,417      $ 84,986,022      $ 223,017,077  
  

 

 

     

 

 

     

 

 

  

Net Assets Consist of:

         

Paid-in capital

    $ 75,762,289      $ 80,243,932      $ 213,401,580  

Total distributable earnings (loss)

      4,057,128        4,742,090        9,615,497  
  

 

 

     

 

 

     

 

 

  

Total Net Assets

    $ 79,819,417      $ 84,986,022      $       223,017,077  
  

 

 

     

 

 

     

 

 

  

 

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     Delaware Tax-Free
Arizona Fund		     Delaware Tax-Free
California Fund		     Delaware Tax-Free
Colorado Fund		  

Net Asset Value

       

Class A:

       

Net assets

    $ 62,185,962     $ 44,058,928     $ 162,954,732  

Shares of beneficial interest outstanding, unlimited authorization, no par

      5,382,419       3,616,196       14,340,121  

Net asset value per share

    $ 11.55     $ 12.18     $ 11.36  

Sales charge

      4.50 %      4.50 %      4.50 % 

Offering price per share, equal to net asset value per share / (1 - sales charge)

    $ 12.09     $ 12.75     $ 11.90  

Class C:

       

Net assets

    $ 2,561,400     $ 6,829,148     $ 8,121,250  

Shares of beneficial interest outstanding, unlimited authorization, no par

      221,134       559,530       712,849  

Net asset value per share

    $ 11.58     $ 12.21     $ 11.39  

Institutional Class:

       

Net assets

    $     15,072,055     $       34,097,946     $       51,941,095  

Shares of beneficial interest outstanding, unlimited authorization, no par

      1,304,391       2,798,826       4,571,050  

Net asset value per share

    $ 11.55     $ 12.18     $ 11.36  

                                 

       

*Investments, at cost

    $ 75,051,044     $ 78,283,851     $ 209,451,545  

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of assets and liabilities

 

 

     Delaware Tax-Free
Idaho Fund		      Delaware Tax-Free
New York Fund		      Delaware Tax-Free
Pennsylvania Fund		  

Assets:

         

Investments, at value*

    $ 104,476,471      $ 87,104,979      $ 434,367,441  

Cash

      —        77,946        90,741  

Dividend and interest receivable

      1,265,877        867,665        5,094,433  

Receivable for fund shares sold

      132,155        506,928        838,767  
  

 

 

     

 

 

     

 

 

  

Total Assets

      105,874,503        88,557,518        440,391,382  
  

 

 

     

 

 

     

 

 

  

Liabilities:

         

Cash due to custodian

      36,084        —        —  

Payable for fund shares redeemed

      133,546        480,513        323,754  

Distribution payable

      64,060        52,158        293,350  

Investment management fee payable

      35,779        24,011        171,677  

Distribution fees payable to affiliates

      20,482        15,215        91,752  

Accounting and administration expenses payable to non-affiliates

      15,571        15,047        26,621  

Reports and statements to shareholders expenses payable to non-affiliates

      7,455        6,648        23,204  

Dividend disbursing and transfer agent fees and expenses payable to non-affiliates

      5,537        5,542        24,157  

Audit and tax fees payable

      5,500        5,500        5,500  

Other accrued expenses

      5,336        6,001        14,624  

Dividend disbursing and transfer agent fees and expenses payable to affiliates

      830        695        3,461  

Trustees’ fees and expenses payable to affiliates

      773        645        3,228  

Accounting and administration expenses payable to affiliates

      645        594        1,612  

Legal fees payable to affiliates

      185        155        774  
  

 

 

     

 

 

     

 

 

  

Total Liabilities

      331,783        612,724        983,714  
  

 

 

     

 

 

     

 

 

  

Total Net Assets

    $ 105,542,720      $ 87,944,794      $ 439,407,668  
  

 

 

     

 

 

     

 

 

  

Net Assets Consist of:

         

Paid-in capital

    $ 105,528,187      $ 83,950,452      $ 414,133,959  

Total distributable earnings (loss)

      14,533        3,994,342        25,273,709  
  

 

 

     

 

 

     

 

 

  

Total Net Assets

    $       105,542,720      $       87,944,794      $         439,407,668  
  

 

 

     

 

 

     

 

 

  

 

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     Delaware Tax-Free
Idaho Fund		     Delaware Tax-Free
New York Fund		     Delaware Tax-Free
Pennsylvania Fund		  

Net Asset Value

       

Class A:

       

Net assets

    $ 60,666,830     $ 42,513,909     $ 364,480,386  

Shares of beneficial interest outstanding, unlimited authorization, no par

      5,265,789       3,645,081       45,225,844  

Net asset value per share

    $ 11.52     $ 11.66     $ 8.06  

Sales charge

      4.50 %      4.50 %      4.50 % 

Offering price per share, equal to net asset value per share / (1 - sales charge)

    $ 12.06     $ 12.21     $ 8.44  

Class C:

       

Net assets

    $ 8,818,730     $ 7,037,107     $ 19,008,521  

Shares of beneficial interest outstanding, unlimited authorization, no par

      766,037       604,930       2,358,083  

Net asset value per share

    $ 11.51     $ 11.63     $ 8.06  

Institutional Class:

       

Net assets

    $ 36,057,160     $ 38,393,778     $ 55,918,761  

Shares of beneficial interest outstanding, unlimited authorization, no par

      3,129,040       3,293,490       6,943,439  

Net asset value per share

    $ 11.52     $ 11.66     $ 8.05  

                                 

       

*Investments, at cost

    $       99,559,025     $       83,436,135     $       409,073,531  

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of operations
        Year ended August 31, 2020

 

 

     Delaware Tax-Free
Arizona Fund		     Delaware Tax-Free
California Fund		     Delaware Tax-Free
Colorado Fund		  

Investment Income:

       

Interest

    $ 2,925,011     $ 3,683,059     $ 8,280,628  

Dividends

      —       —       10,372  
  

 

 

    

 

 

    

 

 

  
     2,925,011     3,683,059     8,291,000  
  

 

 

    

 

 

    

 

 

  

Expenses:

       

Management fees

      394,491       508,126       1,215,638  

Distribution expenses - Class A

      152,308       104,214       410,237  

Distribution expenses - Class C

      27,288       99,899       93,560  

Accounting and administration expenses

      52,082       54,282       75,591  

Audit and tax fees

      45,140       45,140       45,140  

Dividend disbursing and transfer agent fees and expenses

      42,899       49,529       128,526  

Registration fees

      16,847       10,890       11,795  

Reports and statements to shareholders expenses

      13,270       14,292       24,675  

Legal fees

      9,542       10,632       21,810  

Trustees’ fees and expenses

      4,558       5,321       12,748  

Custodian fees

      2,535       2,927       6,318  

Other

      17,573       19,433       27,383  
  

 

 

    

 

 

    

 

 

  
     778,533       924,685       2,073,421  

Less expenses waived

      (132,505 )      (192,366 )      (264,839 ) 

Less expenses paid indirectly

      (871 )      (1,131 )      (532 ) 
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      645,157       731,188       1,808,050  
  

 

 

    

 

 

    

 

 

  

Net Investment Income

      2,279,854       2,951,871       6,482,950  
  

 

 

    

 

 

    

 

 

  

Net Realized and Unrealized Gain (Loss):

       

Net realized gain (loss) on investments

      142,666       (75,285 )      841,092  

Net change in unrealized appreciation (depreciation) of investments

      (1,042,553 )      (2,508,025 )      (3,462,710 ) 
  

 

 

    

 

 

    

 

 

  

Net Realized and Unrealized Loss

      (899,887 )      (2,583,310 )      (2,621,618 ) 
  

 

 

    

 

 

    

 

 

  

Net Increase in Net Assets Resulting from Operations

    $         1,379,967     $         368,561     $         3,861,332  
  

 

 

    

 

 

    

 

 

  

 

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     Delaware Tax-Free
Idaho Fund		     Delaware Tax-Free
New York Fund		     Delaware Tax-Free
Pennsylvania Fund		  

Investment Income:

       

Interest

    $ 3,894,208     $ 3,193,813     $ 17,212,774  

Dividends

      8,647       —       —  
  

 

 

    

 

 

    

 

 

  
     3,902,855       3,193,813       17,212,774  
  

 

 

    

 

 

    

 

 

  

Expenses:

       

Management fees

      575,159       480,384       2,415,901  

Distribution expenses - Class A

      142,451       93,792       893,208  

Distribution expenses - Class C

      109,362       112,954       216,851  

Accounting and administration expenses

      56,320       53,481       111,689  

Audit and tax fees

      45,140       45,140       45,140  

Dividend disbursing and transfer agent fees and expenses

      64,640       53,231       249,565  

Registration fees

      9,965       17,455       21,209  

Reports and statements to shareholders expenses

      13,632       13,079       45,103  

Legal fees

      11,110       9,395       39,957  

Trustees’ fees and expenses

      6,015       5,031       25,362  

Custodian fees

      3,449       3,008       16,761  

Other

      17,997       20,663       36,587  
  

 

 

    

 

 

    

 

 

  
     1,055,240       907,613       4,117,333  

Less expenses waived

      (164,889 )      (219,323 )      (412,925 ) 

Less expenses paid indirectly

      (567 )      (1,057 )      (1,926 ) 
  

 

 

    

 

 

    

 

 

  

Total operating expenses

      889,784       687,233       3,702,482  
  

 

 

    

 

 

    

 

 

  

Net Investment Income

      3,013,071       2,506,580       13,510,292  
  

 

 

    

 

 

    

 

 

  

Net Realized and Unrealized Gain (Loss):

       

Net realized gain (loss) on investments

      (436,187 )      721,770       1,773,628  

Net change in unrealized appreciation (depreciation) of investments

      (1,157,926 )      (1,943,082 )      (8,662,514 ) 
  

 

 

    

 

 

    

 

 

  

Net Realized and Unrealized Loss

      (1,594,113 )      (1,221,312 )      (6,888,886 ) 
  

 

 

    

 

 

    

 

 

  

Net Increase in Net Assets Resulting from Operations

    $         1,418,958     $         1,285,268     $         6,621,406  
  

 

 

    

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of changes in net assets

Delaware Tax-Free Arizona Fund

 

 

     Year ended  
     8/31/20     8/31/19  

Increase (Decrease) in Net Assets from Operations:

     

Net investment income

    $ 2,279,854     $ 2,491,421  

Net realized gain

      142,666       393,695  

Net change in unrealized appreciation (depreciation)

      (1,042,553 )      2,638,928  
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      1,379,967       5,524,044  
  

 

 

    

 

 

  

Dividends and Distributions to Shareholders from:

     

Distributable earnings:

     

Class A

      (1,860,733 )      (1,967,135 ) 

Class C

      (63,009 )      (76,738 ) 

Institutional Class

      (503,085 )      (409,955 ) 
  

 

 

    

 

 

  
     (2,426,827 )      (2,453,828 ) 
  

 

 

    

 

 

  

Capital Share Transactions:

     

Proceeds from shares sold:

     

Class A

      4,040,085       2,955,388  

Class C

      475,896       480,567  

Institutional Class

      4,314,261       6,622,321  

Net asset value of shares issued upon reinvestment of dividends and distributions:

     

Class A

      1,492,624       1,574,396  

Class C

      58,762       72,176  

Institutional Class

      476,431       386,192  
  

 

 

    

 

 

  
               10,858,059                 12,091,040  
  

 

 

    

 

 

  

 

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     Year ended  
     8/31/20     8/31/19  

Capital Share Transactions (continued):

     

Cost of shares redeemed:

     

Class A

    $ (4,618,457 )    $ (8,235,796 ) 

Class C

      (1,028,355 )      (701,906 ) 

Institutional Class

      (3,614,076 )      (3,500,751 ) 
  

 

 

    

 

 

  
     (9,260,888 )      (12,438,453 ) 
  

 

 

    

 

 

  

Increase (decrease) in net assets derived from capital share transactions

      1,597,171       (347,413 ) 
  

 

 

    

 

 

  

Net Increase in Net Assets

      550,311       2,722,803  

Net Assets:

     

Beginning of year

      79,269,106       76,546,303  
  

 

 

    

 

 

  

End of year

    $           79,819,417     $           79,269,106  
  

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of changes in net assets

Delaware Tax-Free California Fund

 

 

     Year ended  
     8/31/20     8/31/19  

Increase (Decrease) in Net Assets from Operations:

     

Net investment income

    $ 2,951,871     $ 3,217,006  

Net realized gain (loss)

      (75,285 )      685,110  

Net change in unrealized appreciation (depreciation)

      (2,508,025 )      3,465,712  
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      368,561       7,367,828  
  

 

 

    

 

 

  

Dividends and Distributions to Shareholders from:

     

Distributable earnings:

     

Class A

      (1,696,888 )      (1,658,408 ) 

Class C

      (337,450 )      (324,849 ) 

Institutional Class

      (1,813,306 )      (1,388,704 ) 
  

 

 

    

 

 

  
     (3,847,644 )      (3,371,961 ) 
  

 

 

    

 

 

  

Capital Share Transactions:

     

Proceeds from shares sold:

     

Class A

      9,654,592       2,965,405  

Class C

      600,032       1,612,305  

Institutional Class

      21,957,497       24,977,510  

Net asset value of shares issued upon reinvestment of dividends and distributions:

     

Class A

      1,518,859       1,478,640  

Class C

      281,331       268,745  

Institutional Class

      1,276,762       941,368  
  

 

 

    

 

 

  
               35,289,073                 32,243,973  
  

 

 

    

 

 

  

 

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     Year ended  
     8/31/20     8/31/19  

Capital Share Transactions (continued):

     

Cost of shares redeemed:

     

Class A

    $ (8,275,307 )    $ (17,173,906 ) 

Class C

      (5,300,634 )      (3,810,193 ) 

Institutional Class

      (31,647,616 )      (15,995,310 ) 
  

 

 

    

 

 

  
     (45,223,557 )      (36,979,409 ) 
  

 

 

    

 

 

  

Decrease in net assets derived from capital share transactions

      (9,934,484 )      (4,735,436 ) 
  

 

 

    

 

 

  

Net Decrease in Net Assets

      (13,413,567 )      (739,569 ) 

Net Assets:

     

Beginning of year

      98,399,589       99,139,158  
  

 

 

    

 

 

  

End of year

    $           84,986,022     $           98,399,589  
  

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of changes in net assets

Delaware Tax-Free Colorado Fund

 

 

     Year ended  
     8/31/20     8/31/19  

Increase (Decrease) in Net Assets from Operations:

     

Net investment income

    $ 6,482,950     $ 6,761,506  

Net realized gain

      841,092       680,050  

Net change in unrealized appreciation (depreciation)

      (3,462,710 )      7,595,228  
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      3,861,332       15,036,784  
  

 

 

    

 

 

  

Dividends and Distributions to Shareholders from:

     

Distributable earnings:

     

Class A

      (4,770,153 )      (5,362,602 ) 

Class C

      (201,810 )      (259,844 ) 

Institutional Class

      (1,499,974 )      (1,136,337 ) 
  

 

 

    

 

 

  
     (6,471,937 )      (6,758,783 ) 
  

 

 

    

 

 

  

Capital Share Transactions:

     

Proceeds from shares sold:

     

Class A

      13,355,973       10,480,175  

Class C

      755,250       1,296,364  

Institutional Class

      23,852,027       21,425,538  

Net asset value of shares issued upon reinvestment of dividends and distributions:

     

Class A

      4,244,536       4,775,340  

Class C

      195,451       246,683  

Institutional Class

      1,381,497       1,026,471  
  

 

 

    

 

 

  
               43,784,734                 39,250,571  
  

 

 

    

 

 

  

 

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     Year ended  
     8/31/20     8/31/19  

Capital Share Transactions (continued):

     

Cost of shares redeemed:

     

Class A

    $ (19,822,488 )    $ (18,606,927 ) 

Class C

      (3,060,813 )      (2,489,442 ) 

Institutional Class

      (15,090,632 )      (9,058,719 ) 
  

 

 

    

 

 

  
     (37,973,933 )      (30,155,088 ) 
  

 

 

    

 

 

  

Increase in net assets derived from capital share transactions

      5,810,801       9,095,483  
  

 

 

    

 

 

  

Net Increase in Net Assets

                3,200,196                 17,373,484  

Net Assets:

     

Beginning of year

      219,816,881       202,443,397  
  

 

 

    

 

 

  

End of year

    $     223,017,077     $     219,816,881  
  

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of changes in net assets

Delaware Tax-Free Idaho Fund

 

 

     Year ended  
     8/31/20     8/31/19  

Increase (Decrease) in Net Assets from Operations:

     

Net investment income

    $ 3,013,071     $ 3,022,948  

Net realized gain (loss)

      (436,187 )      124,264  

Net change in unrealized appreciation (depreciation)

      (1,157,926 )      3,691,615  
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      1,418,958       6,838,827  
  

 

 

    

 

 

  

Dividends and Distributions to Shareholders from:

     

Distributable earnings:

     

Class A

      (1,630,043 )      (1,747,356 ) 

Class C

      (231,712 )      (348,293 ) 

Institutional Class

      (1,140,918 )      (919,443 ) 
  

 

 

    

 

 

  
     (3,002,673 )      (3,015,092 ) 
  

 

 

    

 

 

  

Capital Share Transactions:

     

Proceeds from shares sold:

     

Class A

      11,036,343       5,186,079  

Class C

      1,110,294       981,176  

Institutional Class

      12,301,476       21,084,240  

Net asset value of shares issued upon reinvestment of dividends and distributions:

     

Class A

      1,518,853       1,618,585  

Class C

      222,405       337,431  

Institutional Class

      1,009,131       786,152  
  

 

 

    

 

 

  
               27,198,502                 29,993,663  
  

 

 

    

 

 

  

 

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     Year ended  
     8/31/20     8/31/19  

Capital Share Transactions (continued):

     

Cost of shares redeemed:

     

Class A

    $ (6,770,542 )    $ (12,821,129 ) 

Class C

      (5,190,934 )      (6,549,156 ) 

Institutional Class

      (11,622,682 )      (9,266,863 ) 
  

 

 

    

 

 

  
     (23,584,158 )      (28,637,148 ) 
  

 

 

    

 

 

  

Increase in net assets derived from capital share transactions

                3,614,344       1,356,515  
  

 

 

    

 

 

  

Net Increase in Net Assets

      2,030,629                 5,180,250  

Net Assets:

     

Beginning of year

      103,512,091       98,331,841  
  

 

 

    

 

 

  

End of year

    $ 105,542,720     $ 103,512,091  
  

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

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Statements of changes in net assets

Delaware Tax-Free New York Fund

 

 

     Year ended  
     8/31/20     8/31/19  

Increase (Decrease) in Net Assets from Operations:

     

Net investment income

    $ 2,506,580     $ 2,622,309  

Net realized gain

      721,770       585,562  

Net change in unrealized appreciation (depreciation)

      (1,943,082 )      3,228,074  
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      1,285,268       6,435,945  
  

 

 

    

 

 

  

Dividends and Distributions to Shareholders from:

     

Distributable earnings:

     

Class A

      (1,250,944 )      (1,100,376 ) 

Class C

      (299,096 )      (331,625 ) 

Institutional Class

      (1,387,966 )      (1,194,609 ) 
  

 

 

    

 

 

  
     (2,938,006 )      (2,626,610 ) 
  

 

 

    

 

 

  

Capital Share Transactions:

     

Proceeds from shares sold:

     

Class A

      11,463,562       6,693,985  

Class C

      553,210       1,503,175  

Institutional Class

      9,818,570       16,439,856  

Net asset value of shares issued upon reinvestment of dividends and distributions:

     

Class A

      1,098,145       1,011,485  

Class C

      204,540       232,362  

Institutional Class

      1,267,893       1,065,959  
  

 

 

    

 

 

  
               24,405,920                 26,946,822  
  

 

 

    

 

 

  

 

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     Year ended  
     8/31/20     8/31/19  

Capital Share Transactions (continued):

     

Cost of shares redeemed:

     

Class A

    $ (5,523,695 )    $ (11,304,145 ) 

Class C

      (6,950,159 )      (3,817,643 ) 

Institutional Class

      (11,214,772 )      (12,814,924 ) 
  

 

 

    

 

 

  
     (23,688,626 )      (27,936,712 ) 
  

 

 

    

 

 

  

Increase (decrease) in net assets derived from capital share transactions

      717,294       (989,890 ) 
  

 

 

    

 

 

  

Net Increase (Decrease) in Net Assets

      (935,444 )      2,819,445  

Net Assets:

     

Beginning of year

      88,880,238       86,060,793  
  

 

 

    

 

 

  

End of year

    $           87,944,794     $           88,880,238  
  

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

119

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Statements of changes in net assets

Delaware Tax-Free Pennsylvania Fund

 

 

     Year ended  
     8/31/20     8/31/19  

Increase (Decrease) in Net Assets from Operations:

     

Net investment income

    $         13,510,292     $       15,062,570  

Net realized gain

      1,773,628       2,465,773  

Net change in unrealized appreciation (depreciation)

      (8,662,514 )      14,954,570  
  

 

 

    

 

 

  

Net increase in net assets resulting from operations

      6,621,406       32,482,913  
  

 

 

    

 

 

  

Dividends and Distributions to Shareholders from:

     

Distributable earnings:

     

Class A

      (14,779,475 )      (12,803,560 ) 

Class C

      (710,638 )      (683,223 ) 

Institutional Class

      (2,147,319 )      (1,575,787 ) 
  

 

 

    

 

 

  
     (17,637,432 )      (15,062,570 ) 
  

 

 

    

 

 

  

Capital Share Transactions:

     

Proceeds from shares sold:

     

Class A

      34,845,316       30,339,814  

Class C

      2,876,652       2,951,101  

Institutional Class

      14,679,950       19,813,229  

Net asset value of shares issued upon reinvestment of dividends and distributions:

     

Class A

      13,086,822       11,094,776  

Class C

      679,779       645,844  

Institutional Class

      1,843,684       1,355,377  
  

 

 

    

 

 

  
               68,012,203                 66,200,141  
  

 

 

    

 

 

  

 

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     Year ended  
     8/31/20     8/31/19  

Capital Share Transactions (continued):

     

Cost of shares redeemed:

     

Class A

    $ (51,146,281 )    $ (57,138,828 ) 

Class C

      (8,994,602 )      (5,875,403 ) 

Institutional Class

      (6,718,565 )      (17,175,868 ) 
  

 

 

    

 

 

  
     (66,859,448 )      (80,190,099 ) 
  

 

 

    

 

 

  

Increase (decrease) in net assets derived from capital share transactions

                1,152,755       (13,989,958 ) 
  

 

 

    

 

 

  

Net Increase (Decrease) in Net Assets

      (9,863,271 )                3,430,385  

Net Assets:

     

Beginning of year

      449,270,939       445,840,554  
  

 

 

    

 

 

  

End of year

    $ 439,407,668     $ 449,270,939  
  

 

 

    

 

 

  

See accompanying notes, which are an integral part of the financial statements.

 

121

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Financial highlights

Delaware Tax-Free Arizona Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

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     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 11.70        $ 11.24        $ 11.48        $ 11.83        $ 11.44  
                             
     0.33          0.37          0.36          0.37          0.38  
     (0.13 )         0.46          (0.24 )         (0.35 )         0.39  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.20          0.83          0.12          0.02          0.77  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                                 
     (0.35 )         (0.37 )         (0.36 )         (0.37 )         (0.38 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.35 )         (0.37 )         (0.36 )         (0.37 )         (0.38 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.55        $ 11.70        $ 11.24        $ 11.48        $ 11.83  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     1.79%          7.51%          1.11%          0.24%          6.79%  
                                 
   $ 62,186        $ 62,033        $ 63,327        $ 66,839        $ 74,556  
     0.84%          0.84%          0.84%          0.84%          0.84%  
     1.01%          1.02%          1.00%          0.97%          0.96%  
     2.87%          3.29%          3.23%          3.25%          3.23%  
     2.70%          3.11%          3.07%          3.12%          3.11%  
     36%          31%          6%          9%          14%  
                      

 

  

 

123

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Financial highlights

Delaware Tax-Free Arizona Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

  

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

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     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 11.73        $ 11.27        $ 11.51        $ 11.87        $ 11.47  
                             
     0.24          0.28          0.28          0.29          0.29  
     (0.12 )         0.46          (0.24 )         (0.37 )         0.40  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.12          0.74          0.04          (0.08 )         0.69  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                             
     (0.27 )         (0.28 )         (0.28 )         (0.28 )         (0.29 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.27 )         (0.28 )         (0.28 )         (0.28 )         (0.29 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.58        $ 11.73        $ 11.27        $ 11.51        $ 11.87  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     1.03%          6.70%          0.36%          (0.59% )         6.07%  
                             
   $ 2,561        $ 3,100        $ 3,122        $ 5,215        $ 6,816  
     1.59%          1.59%          1.59%          1.59%          1.59%  
     1.76%          1.77%          1.75%          1.72%          1.71%  
     2.12%          2.54%          2.48%          2.50%          2.48%  
     1.95%          2.36%          2.32%          2.37%          2.36%  
     36%          31%          6%          9%          14%  
                      

 

  

 

125

Table of Contents

Financial highlights

Delaware Tax-Free Arizona Fund Institutional Class

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

  

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

126

Table of Contents

    

 

    

 

    

 

                                                    
     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 11.70        $ 11.24        $ 11.48        $ 11.84        $ 11.44  
                             
     0.36          0.39          0.39          0.40          0.41  
     (0.13 )         0.46          (0.24 )         (0.36 )         0.39  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.23          0.85          0.15          0.04          0.80  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                             
     (0.38 )         (0.39 )         (0.39 )         (0.40 )         (0.40 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.38 )         (0.39 )         (0.39 )         (0.40 )         (0.40 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.55        $ 11.70        $ 11.24        $ 11.48        $ 11.84  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     2.05%          7.78%          1.36%          0.40%          7.14%  
                             
   $ 15,072        $ 14,136        $ 10,097        $ 7,080        $ 3,645  
     0.59%          0.59%          0.59%          0.59%          0.59%  
     0.76%          0.77%          0.75%          0.72%          0.71%  
     3.12%          3.54%          3.48%          3.50%          3.48%  
     2.95%          3.36%          3.32%          3.37%          3.36%  
     36%          31%          6%          9%          14%  
                      

 

  

 

127

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Financial highlights

Delaware Tax-Free California Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

Net realized gain

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

128

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     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 12.49        $ 11.98        $ 12.26        $ 12.60        $ 12.11  
                      
     0.38          0.40          0.40          0.41          0.43  
     (0.20 )         0.53          (0.28 )         (0.34 )         0.48  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.18          0.93          0.12          0.07          0.91  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                             
     (0.38 )         (0.40 )         (0.40 )         (0.41 )         (0.42 ) 
     (0.11 )         (0.02 )         —          —          —  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.49 )         (0.42 )         (0.40 )         (0.41 )         (0.42 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 12.18        $ 12.49        $ 11.98        $ 12.26        $ 12.60  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     1.59%          7.99%          1.00%          0.63%          7.67%  
                             
   $ 44,059        $ 42,203        $ 53,171        $ 54,076        $ 63,284  
     0.82%          0.82%          0.82%          0.82%          0.82%  
     1.03%          1.03%          1.02%          1.01%          1.01%  
     3.17%          3.36%          3.30%          3.36%          3.43%  
     2.96%          3.15%          3.10%          3.17%          3.24%  
     36%          32%          16%          27%          18%  
                      

 

  

 

129

Table of Contents

Financial highlights

Delaware Tax-Free California Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

Net realized gain

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

130

Table of Contents

    

 

    

 

    

 

                                                       
     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 12.52        $ 12.00        $ 12.28        $ 12.62        $ 12.13  
                             
     0.29          0.32          0.31          0.32          0.33  
     (0.20 )         0.54          (0.28 )         (0.34 )         0.49  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.09          0.86          0.03          (0.02 )         0.82  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                             
     (0.29 )         (0.32 )         (0.31 )         (0.32 )         (0.33 ) 
     (0.11 )         (0.02 )         —          —          —  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.40 )         (0.34 )         (0.31 )         (0.32 )         (0.33 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 12.21        $ 12.52        $ 12.00        $ 12.28        $ 12.62  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.83%          7.26%          0.25%          (0.12% )         6.86%  
                             
   $ 6,829        $ 11,551        $ 13,015        $ 16,473        $ 18,827  
     1.57%          1.57%          1.57%          1.57%          1.57%  
     1.78%          1.78%          1.77%          1.76%          1.76%  
     2.42%          2.61%          2.55%          2.61%          2.68%  
     2.21%          2.40%          2.35%          2.42%          2.49%  
     36%          32%          16%          27%          18%  
                           

 

  

 

131

Table of Contents

Financial highlights

Delaware Tax-Free California Fund Institutional Class

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

Total from investment operations

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

132

Table of Contents

    

 

    

 

    

 

                                                       
     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 12.49        $ 11.98        $ 12.26        $ 12.60        $ 12.11  
                             
     0.41          0.43          0.43          0.44          0.46  
     (0.20 )         0.53          (0.28 )         (0.34 )         0.49  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.21          0.96          0.15          0.10          0.95  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                             
     (0.41 )         (0.43 )         (0.43 )         (0.44 )         (0.46 ) 
     (0.11 )         (0.02 )         —          —          —  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.52 )         (0.45 )         (0.43 )         (0.44 )         (0.46 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 12.18        $ 12.49        $ 11.98        $ 12.26        $ 12.60  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     1.84%          8.25%          1.26%          0.89%          7.94%  
                             
   $ 34,098        $ 44,646        $ 32,953        $ 28,209        $ 17,410  
     0.57%          0.57%          0.57%          0.57%          0.57%  
     0.78%          0.78%          0.77%          0.76%          0.76%  
     3.42%          3.61%          3.55%          3.61%          3.68%  
     3.21%          3.40%          3.35%          3.42%          3.49%  
     36%          32%          16%          27%          18%  
                           

 

  

 

133

Table of Contents

Financial highlights

Delaware Tax-Free Colorado Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets3

Ratio of expenses to average net assets prior to fees waived3

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

 

3 

Expense ratios do not include expenses of the Underlying Funds in which the Fund invests.

See accompanying notes, which are an integral part of the financial statements.

 

134

Table of Contents

    

 

    

 

    

 

                                                       
          Year ended                        
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 11.48        $ 11.04        $ 11.28        $ 11.65        $ 11.24  
                             
     0.33          0.37          0.37          0.39          0.40  
     (0.12 )         0.44          (0.24 )         (0.37 )         0.41  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.21          0.81          0.13          0.02          0.81  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                             
     (0.33 )         (0.37 )         (0.37 )         (0.39 )         (0.40 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.33 )         (0.37 )         (0.37 )         (0.39 )         (0.40 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.36        $ 11.48        $ 11.04        $ 11.28        $ 11.65  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     1.88%          7.48%          1.22%          0.26%          7.33%  
                             
   $ 162,955        $ 167,136        $ 164,087        $ 165,554        $ 182,764  
     0.84%          0.84%          0.84%          0.84%          0.84%  
     0.96%          0.97%          0.97%          0.96%          0.96%  
     2.91%          3.31%          3.36%          3.48%          3.50%  
     2.79%          3.18%          3.23%          3.36%          3.38%  
     18%          16%          6%          17%          6%  
                           

 

  

 

135

Table of Contents

Financial highlights

Delaware Tax-Free Colorado Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets3

Ratio of expenses to average net assets prior to fees waived3

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

 

3 

Expense ratios do not include expenses of the Underlying Funds in which the Fund invests.

See accompanying notes, which are an integral part of the financial statements.

 

136

Table of Contents

    

 

    

 

    

 

                                                       
     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 11.51        $ 11.07        $ 11.31        $ 11.68        $ 11.27  
                             
     0.24          0.29          0.29          0.31          0.32  
     (0.12 )         0.44          (0.24 )         (0.37 )         0.41  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.12          0.73          0.05          (0.06 )         0.73  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                             
     (0.24 )         (0.29 )         (0.29 )         (0.31 )         (0.32 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.24 )         (0.29 )         (0.29 )         (0.31 )         (0.32 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.39        $ 11.51        $ 11.07        $ 11.31        $ 11.68  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     1.12%          6.67%          0.47%          (0.48% )         6.52%  
                             
   $ 8,121        $ 10,364        $ 10,923        $ 15,975        $ 16,461  
     1.59%          1.59%          1.59%          1.59%          1.59%  
     1.71%          1.72%          1.72%          1.71%          1.71%  
     2.16%          2.56%          2.61%          2.73%          2.75%  
     2.04%          2.43%          2.48%          2.61%          2.63%  
     18%          16%          6%          17%          6%  
                           

 

  

 

137

Table of Contents

Financial highlights

Delaware Tax-Free Colorado Fund Institutional Class

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets3

Ratio of expenses to average net assets prior to fees waived3

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

 

3 

Expense ratios do not include expenses of the Underlying Funds in which the Fund invests.

See accompanying notes, which are an integral part of the financial statements.

 

138

Table of Contents

    

 

    

 

    

 

                                                       
     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 11.48        $ 11.04        $ 11.28        $ 11.65        $ 11.24  
                             
     0.36          0.40          0.40          0.42          0.43  
     (0.12 )         0.44          (0.24 )         (0.37 )         0.41  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.24          0.84          0.16          0.05          0.84  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                             
     (0.36 )         (0.40 )         (0.40 )         (0.42 )         (0.43 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.36 )         (0.40 )         (0.40 )         (0.42 )         (0.43 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.36        $ 11.48        $ 11.04        $ 11.28        $ 11.65  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     2.14%          7.74%          1.47%          0.51%          7.60%  
                             
   $ 51,941        $ 42,317        $ 27,433        $ 19,788        $ 12,211  
     0.59%          0.59%          0.59%          0.59%          0.59%  
     0.71%          0.72%          0.72%          0.71%          0.71%  
     3.16%          3.56%          3.61%          3.73%          3.75%  
     3.04%          3.43%          3.48%          3.61%          3.63%  
     18%          16%          6%          17%          6%  
                           

 

  

 

139

Table of Contents

Financial highlights

Delaware Tax-Free Idaho Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets3

Ratio of expenses to average net assets prior to fees waived3

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

 

3 

Expense ratios do not include expenses of the Underlying Funds in which the Fund invests.

See accompanying notes, which are an integral part of the financial statements.

 

140

Table of Contents

    

 

    

 

    

 

                                                    
     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 11.65        $ 11.21        $ 11.49        $ 11.79        $ 11.51  
                      
     0.33          0.35          0.34          0.35          0.36  
     (0.13 )         0.44          (0.28 )         (0.30 )         0.28  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.20          0.79          0.06          0.05          0.64  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                      
     (0.33 )         (0.35 )         (0.34 )         (0.35 )         (0.36 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.33 )         (0.35 )         (0.34 )         (0.35 )         (0.36 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.52        $ 11.65        $ 11.21        $ 11.49        $ 11.79  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     1.77%          7.19%          0.56%          0.47%          5.66%  
                      
   $ 60,667        $ 55,480        $ 59,425        $ 67,907        $ 70,306  
     0.86%          0.86%          0.86%          0.86%          0.86%  
     1.02%          1.03%          1.01%          1.00%          0.99%  
     2.87%          3.11%          3.04%          3.03%          3.11%  
     2.71%          2.94%          2.89%          2.89%          2.98%  
     22%          14%          11%          10%          11%  
                      

 

  

 

141

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Financial highlights

Delaware Tax-Free Idaho Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets3

Ratio of expenses to average net assets prior to fees waived3

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

 

3 

Expense ratios do not include expenses of the Underlying Funds in which the Fund invests.

See accompanying notes, which are an integral part of the financial statements.

 

142

Table of Contents

    

 

    

 

    

 

                                                    
     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 11.64        $ 11.20        $ 11.48        $ 11.78        $ 11.50  
                      
     0.24          0.27          0.26          0.26          0.27  
     (0.13 )         0.44          (0.28 )         (0.30 )         0.28  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.11          0.71          (0.02 )         (0.04 )         0.55  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                      
     (0.24 )         (0.27 )         (0.26 )         (0.26 )         (0.27 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.24 )         (0.27 )         (0.26 )         (0.26 )         (0.27 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.51        $ 11.64        $ 11.20        $ 11.48        $ 11.78  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     1.00%          6.40%          (0.19% )         (0.29% )         4.88%  
                      
   $ 8,819        $ 12,875        $ 17,597        $ 29,375        $ 30,834  
     1.61%          1.61%          1.61%          1.61%          1.61%  
     1.77%          1.78%          1.76%          1.75%          1.74%  
     2.12%          2.36%          2.29%          2.28%          2.36%  
     1.96%          2.19%          2.14%          2.14%          2.23%  
     22%          14%          11%          10%          11%  
                      

 

  

 

143

Table of Contents

Financial highlights

Delaware Tax-Free Idaho Fund Institutional Class

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

Total dividends and distributions

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets3

Ratio of expenses to average net assets prior to fees waived3

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

 

3 

Expense ratios do not include expenses of the Underlying Funds in which the Fund invests.

See accompanying notes, which are an integral part of the financial statements.

 

144

Table of Contents

    

 

    

 

    

 

                                                    
     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 11.65        $ 11.21        $ 11.49        $ 11.79        $ 11.51  
                      
     0.36          0.38          0.37          0.37          0.39  
     (0.13 )         0.44          (0.28 )         (0.29 )         0.28  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.23          0.82          0.09          0.08          0.67  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                      
     (0.36 )         (0.38 )         (0.37 )         (0.38 )         (0.39 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.36 )         (0.38 )         (0.37 )         (0.38 )         (0.39 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.52        $ 11.65        $ 11.21        $ 11.49        $ 11.79  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     2.02%          7.46%          0.82%          0.71%          5.92%  
                      
   $ 36,057        $ 35,157        $ 21,310        $ 12,090        $ 10,248  
     0.61%          0.61%          0.61%          0.61%          0.61%  
     0.77%          0.78%          0.76%          0.75%          0.74%  
     3.12%          3.36%          3.29%          3.28%          3.36%  
     2.96%          3.19%          3.14%          3.14%          3.23%  
     22%          14%          11%          10%          11%  
                      

 

  

 

145

Table of Contents

Financial highlights

Delaware Tax-Free New York Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

Net realized gain

Total dividends and distributions

 

Net asset value, end of period

 

Total return3

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Amount is less than $0.005 per share.

 

3 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

146

Table of Contents

    

 

    

 

    

 

                                                       
     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 11.86        $ 11.33        $ 11.62        $ 11.98        $ 11.48  
                      
     0.33          0.36          0.36          0.35          0.36  
     (0.14 )         0.53          (0.29 )         (0.35 )         0.50  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.19          0.89          0.07          — 2         0.86  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                      
     (0.33 )         (0.36 )         (0.36 )         (0.36 )         (0.36 ) 
     (0.06 )         —          —          —          —  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.39 )         (0.36 )         (0.36 )         (0.36 )         (0.36 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.66        $ 11.86        $ 11.33        $ 11.62        $ 11.98  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     1.68%          8.00%          0.60%          0.05%          7.57%  
                      
   $ 42,514        $ 36,058        $ 38,139        $ 40,647        $ 55,418  
     0.80%          0.80%          0.80%          0.80%          0.80%  
     1.05%          1.07%          1.08%          1.03%          1.02%  
     2.86%          3.12%          3.10%          3.04%          3.06%  
     2.61%          2.85%          2.82%          2.81%          2.84%  
     31%          21%          10%          14%          8%  
                      

 

  

 

147

Table of Contents

Financial highlights

Delaware Tax-Free New York Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

Net realized gain

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

148

Table of Contents

    

 

    

 

    

 

           
     Year ended  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 11.83        $ 11.30        $ 11.59        $ 11.95        $ 11.45  
                      
     0.24          0.27          0.27          0.26          0.27  
     (0.14 )         0.53          (0.29 )         (0.35 )         0.50  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.10          0.80          (0.02 )         (0.09 )         0.77  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                      
     (0.24 )         (0.27 )         (0.27 )         (0.27 )         (0.27 ) 
     (0.06 )         —          —          —          —  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.30 )         (0.27 )         (0.27 )         (0.27 )         (0.27 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.63        $ 11.83        $ 11.30        $ 11.59        $ 11.95  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.92%          7.20%          (0.16% )         (0.71% )         6.78%  
                      
   $ 7,037        $ 13,459        $ 14,941        $ 17,073        $ 20,899  
     1.55%          1.55%          1.55%          1.55%          1.55%  
     1.80%          1.82%          1.83%          1.78%          1.77%  
     2.11%          2.37%          2.35%          2.29%          2.31%  
     1.86%          2.10%          2.07%          2.06%          2.09%  
     31%          21%          10%          14%          8%  

    

                       

 

  

 

149

Table of Contents

Financial highlights

Delaware Tax-Free New York Fund Institutional Class

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

Net realized gain

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

150

Table of Contents

    

 

    

 

    

 

                                                    
     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
          $ 11.85        $ 11.33        $ 11.61        $ 11.97        $ 11.47  
                      
     0.36          0.38          0.39          0.38          0.39  
     (0.13 )         0.52          (0.28 )         (0.35 )         0.50  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.23          0.90          0.11          0.03          0.89  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                      
     (0.36 )         (0.38 )         (0.39 )         (0.39 )         (0.39 ) 
     (0.06 )         —          —          —          —  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.42 )         (0.38 )         (0.39 )         (0.39 )         (0.39 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 11.66        $ 11.85        $ 11.33        $ 11.61        $ 11.97  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     2.03%          8.17%          0.93%          0.29%          7.84%  
                      
   $ 38,394        $ 39,363        $ 32,981        $ 32,192        $ 19,929  
     0.55%          0.55%          0.55%          0.55%          0.55%  
     0.80%          0.82%          0.83%          0.78%          0.77%  
     3.11%          3.37%          3.35%          3.29%          3.31%  
     2.86%          3.10%          3.07%          3.06%          3.09%  
     31%          21%          10%          14%          8%  
                           

 

  

 

151

Table of Contents

Financial highlights

Delaware Tax-Free Pennsylvania Fund Class A

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

Net realized gain

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

152

Table of Contents

    

 

    

 

    

 

                                                    
     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
          $ 8.25        $ 7.93        $ 8.14        $ 8.39        $ 8.15  
                      
     0.25          0.28          0.28          0.28          0.29  
     (0.11 )         0.32          (0.20 )         (0.25 )         0.24  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.14          0.60          0.08          0.03          0.53  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                      
     (0.25 )         (0.28 )         (0.28 )         (0.28 )         (0.29 ) 
     (0.08 )         —          (0.01 )         —          —  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.33 )         (0.28 )         (0.29 )         (0.28 )         (0.29 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 8.06        $ 8.25        $ 7.93        $ 8.14        $ 8.39  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     1.72%          7.72%          0.93%          0.48%          6.60%  
                      
   $ 364,480        $ 376,965        $ 378,038        $ 399,001        $ 439,379  
     0.83%          0.85%          0.88%          0.88%          0.88%  
     0.92%          0.93%          0.93%          0.94%          0.94%  
     3.09%          3.49%          3.48%          3.51%          3.50%  
     3.00%          3.41%          3.43%          3.45%          3.44%  
     40%          23%          19%          15%          14%  
                           

 

  

 

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Financial highlights

Delaware Tax-Free Pennsylvania Fund Class C

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

Net realized gain

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

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            Year ended  
     

 

 

  
            8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

 

  
                 $ 8.25        $ 7.93        $ 8.14        $ 8.39        $ 8.15  
                         
        0.19          0.22          0.22          0.22          0.23  
        (0.11 )         0.32          (0.20 )         (0.25 )         0.24  
     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
        0.08          0.54          0.02          (0.03 )         0.47  
     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                         
        (0.19 )         (0.22 )         (0.22 )         (0.22 )         (0.23 ) 
        (0.08 )         —          (0.01 )         —          —  
     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
        (0.27 )         (0.22 )         (0.23 )         (0.22 )         (0.23 ) 
     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
      $ 8.06        $ 8.25        $ 7.93        $ 8.14        $ 8.39  
     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
        0.95%          6.91%          0.16%          (0.27% )         5.79%  
                         
      $ 19,009        $ 25,065        $ 26,376        $ 33,298        $ 36,215  
        1.59%          1.61%          1.64%          1.64%          1.64%  
        1.68%          1.69%          1.69%          1.70%          1.70%  
        2.33%          2.73%          2.72%          2.75%          2.74%  
        2.24%          2.65%          2.67%          2.69%          2.68%  
        40%          23%          19%          15%          14%  
                                  

 

 

  

 

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Financial highlights

Delaware Tax-Free Pennsylvania Fund Institutional Class

Selected data for each share of the Fund outstanding throughout each period were as follows:

 

  
  

 

Net asset value, beginning of period

Income (loss) from investment operations:

Net investment income1

Net realized and unrealized gain (loss)

 

Total from investment operations

 

Less dividends and distributions from:

Net investment income

Net realized gain

 

Total dividends and distributions

 

Net asset value, end of period

 

Total return2

Ratios and supplemental data:

Net assets, end of period (000 omitted)

Ratio of expenses to average net assets

Ratio of expenses to average net assets prior to fees waived

Ratio of net investment income to average net assets

Ratio of net investment income to average net assets prior to fees waived

Portfolio turnover

    

 

 

1 

The average shares outstanding have been applied for per share information.

 

2 

Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect.

See accompanying notes, which are an integral part of the financial statements.

 

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     Year ended  
  

 

 

  
     8/31/20          8/31/19          8/31/18          8/31/17          8/31/16  

 

  
   $ 8.25        $ 7.92        $ 8.13        $ 8.38        $ 8.14  
                      
     0.27          0.30          0.30          0.30          0.31  
     (0.12 )         0.33          (0.20 )         (0.25 )         0.24  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     0.15          0.63          0.10          0.05          0.55  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
                      
     (0.27 )         (0.30 )         (0.30 )         (0.30 )         (0.31 ) 
     (0.08 )         —          (0.01 )         —          —  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     (0.35 )         (0.30 )         (0.31 )         (0.30 )         (0.31 ) 
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
   $ 8.05        $ 8.25        $ 7.92        $ 8.13        $ 8.38  
  

 

 

       

 

 

       

 

 

       

 

 

       

 

 

  
     1.84%          8.12%          1.16%          0.73%          6.86%  
                      
   $ 55,919        $ 47,241        $ 41,427        $ 33,373        $ 26,372  
     0.59%          0.61%          0.64%          0.64%          0.64%  
     0.68%          0.69%          0.69%          0.70%          0.70%  
     3.33%          3.73%          3.72%          3.75%          3.74%  
     3.24%          3.65%          3.67%          3.69%          3.68%  
     40%          23%          19%          15%          14%  
                           

 

  

 

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Notes to financial statements
Delaware Funds® by Macquarie state tax-free funds    August 31, 2020

 

 

Voyageur Insured Funds is organized as a Delaware statutory trust and offers one series: Delaware Tax-Free Arizona Fund. Voyageur Mutual Funds is organized as a Delaware statutory trust and offers five series: Delaware Minnesota High-Yield Municipal Bond Fund, Delaware National High-Yield Municipal Bond Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free New York Fund. Voyageur Mutual Funds II is organized as a Delaware statutory trust and offers one series: Delaware Tax-Free Colorado Fund. Delaware Group® State Tax-Free Income Trust is organized as a Delaware statutory trust and offers one series: Delaware Tax-Free Pennsylvania Fund. Voyageur Insured Funds, Voyageur Mutual Funds, Voyageur Mutual Funds II, and Delaware Group State Tax-Free Income Trust are each referred to as a Trust, or collectively as the Trusts. These financial statements and the related notes pertain to Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, Delaware Tax-Free New York Fund, and Delaware Tax-Free Pennsylvania Fund (each a Fund, or together, the Funds). Each Trust is an open-end investment company. Each Fund is considered diversified under the Investment Company Act of 1940, as amended (1940 Act), and offers Class A, Class C, and Institutional Class shares. Class A shares are sold with a maximum front-end sales charge of 4.50%. Class A share purchases of $1,000,000 or more for Delaware Tax-Free California Fund and Delaware Tax-Free New York Fund and $250,000 or more for Delaware Tax-Free Arizona Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, and Delaware Tax-Free Pennsylvania Fund, will incur a contingent deferred sales charge (CDSC) instead of a front-end sales charge of 1.00%, if redeemed during the first year, and 0.50% during the second year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Class C shares are sold with a CDSC of 1.00%, which will be incurred if redeemed during the first 12 months. Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors.

1. Significant Accounting Policies

Each Fund follows accounting and reporting guidance under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services - Investment Companies. The following accounting policies are in accordance with US generally accepted accounting principles (US GAAP) and are consistently followed by the Funds.

Security Valuation — Debt securities are valued based upon valuations provided by an independent pricing service or broker and reviewed by management. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. Valuations for fixed income securities utilize matrix systems, which reflect such factors as security prices, yields, maturities, and ratings, and are supplemented by dealer and exchange quotations. Open-end investment companies are valued at their published net asset value (NAV). Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of each Trust’s Board of Trustees (each, a Board or, collectively, the Boards). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security. Restricted securities are valued at fair value using methods approved by the Boards.

 

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Federal Income Taxes — No provision for federal income taxes has been made as each Fund intends to continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. Each Fund evaluates tax positions taken or expected to be taken in the course of preparing each Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. Management has analyzed each Fund’s tax positions taken or expected to be taken on each Fund’s federal income tax returns through the year ended August 31, 2020 and for all open tax years (years ended August 31, 2017–August 31, 2019), and has concluded that no provision for federal income tax is required in each Fund’s financial statements. If applicable, each Fund recognizes interest accrued on unrecognized tax benefits in interest expense and penalties in “Other” on the “Statements of operations.” During the year ended August 31, 2020, the Funds did not incur any interest or tax penalties.

Class Accounting — Investment income and common expenses are allocated to the various classes of each Fund on the basis of “settled shares” of each class in relation to the net assets of each Fund. Realized and unrealized gain (loss) on investments are allocated to the various classes of each Fund on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.

Use of Estimates — The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the fair value of investments, the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the differences could be material.

Other — Expenses directly attributable to a Fund are charged directly to that Fund. Other expenses common to various funds within the Delaware Funds® by Macquarie (Delaware Funds) are generally allocated among such funds on the basis of average net assets. Management fees and certain other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Interest income is recorded on the accrual basis. Discounts and premiums on debt securities are accreted or amortized to interest income, respectively, over the lives of the respective securities using the effective interest method. Each Fund declares dividends daily from net investment income and pays the dividends monthly and declares and pays distributions from net realized gain on investments, if any, annually. Each Fund may distribute more frequently, if necessary for tax purposes. Dividends and distributions, if any, are recorded on the ex-dividend date.

Each Fund receives earnings credits from its custodian when positive cash balances are maintained, which may be used to offset custody fees. The expenses paid under this arrangement are included on the “Statements of operations” under “Custodian fees” with the corresponding expenses offset included

 

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Notes to financial statements
Delaware Funds® by Macquarie state tax-free funds        

 

 

1. Significant Accounting Policies (continued)

under “Less expenses paid indirectly.” For the year ended August 31, 2020, each Fund earned the following amounts under this arrangement:

 

Fund

    Custody Credits

Delaware Tax-Free Arizona Fund

      $ 828

Delaware Tax-Free California Fund

        1,099

Delaware Tax-Free Colorado Fund

        392

Delaware Tax-Free Idaho Fund

        505

Delaware Tax-Free New York Fund

        1,015

Delaware Tax-Free Pennsylvania Fund

        1,549

Each Fund receives earnings credits from its transfer agent when positive cash balances are maintained, which may be used to offset transfer agent fees. If the amount earned is greater than $1, the expenses paid under this arrangement are included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses” with the corresponding expenses offset included under “Less expenses paid indirectly.” For the year ended August 31, 2020, each Fund earned the following amounts under this arrangement:

 

Fund

    Earnings Credits

Delaware Tax-Free Arizona Fund

      $ 43

Delaware Tax-Free California Fund

        32

Delaware Tax-Free Colorado Fund

        140

Delaware Tax-Free Idaho Fund

        62

Delaware Tax-Free New York Fund

        42

Delaware Tax-Free Pennsylvania Fund

        377

2. Investment Management, Administration Agreements, and Other Transactions with Affiliates

In accordance with the terms of its respective investment management agreement, each Fund pays Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust and the investment manager, an annual fee which is calculated daily and paid monthly based on each Fund’s average daily net assets as follows:

 

     Delaware
Tax-Free
  Arizona  
Fund		    Delaware
Tax-Free
  California  
Fund		    Delaware
Tax-Free
  Colorado  
Fund		    Delaware
Tax-Free
  Idaho Fund  		    Delaware
Tax-Free
  New York  
Fund		    Delaware
Tax-Free
  Pennsylvania  
Fund

On the first $500 million

        0.5000%        0.5500%        0.5500%        0.5500%        0.5500%        0.5500%

On the next $500 million

        0.4750%        0.5000%        0.5000%        0.5000%        0.5000%        0.5000%

On the next $1.5 billion

        0.4500%        0.4500%        0.4500%        0.4500%        0.4500%        0.4500%

In the excess of $2.5 billion

        0.4250%        0.4250%        0.4250%        0.4250%        0.4250%        0.4250%

DMC has contractually agreed to waive all or a portion, if any, of its management fee and/or pay/reimburse each Fund to the extent necessary to ensure total annual operating expenses (excluding any distribution and service (12b-1) fees, acquired fund fees and expenses, taxes, interest, inverse floater

 

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program expenses, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations), do not exceed the following percentage of each Fund’s average daily net assets from September 1, 2019 through August 31, 2020.* These expense waivers and reimbursements may be terminated only by agreement of DMC and each Fund. The waivers and reimbursements are accrued daily and received monthly.

 

Fund

    Operating expense
limitation as
a percentage
of average
daily net assets

Delaware Tax-Free Arizona Fund

        0.59%

Delaware Tax-Free California Fund

        0.57%

Delaware Tax-Free Colorado Fund

        0.59%

Delaware Tax-Free Idaho Fund

        0.61%

Delaware Tax-Free New York Fund

        0.55%

Delaware Tax-Free Pennsylvania Fund

        0.59%

Delaware Investments Fund Services Company (DIFSC), an affiliate of DMC, provides fund accounting and financial administrative oversight services to each Fund. For these services, DIFSC’s fees are calculated daily and paid monthly based on the aggregate daily net assets of all funds within the Delaware Funds at the following annual rates: 0.00475% of the first $35 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $45 billion (Total Fee). Each fund in the Delaware Funds pays a minimum of $4,000, which, in aggregate, is subtracted from the Total Fee. Each fund then pays its portion of the remainder of the Total Fee on a relative NAV basis. These amounts are included on the “Statements of operations” under “Accounting and administration expenses.” For the year ended August 31, 2020, each Fund was charged for these services as follows:

 

Fund

    Fees  

Delaware Tax-Free Arizona Fund

    $ 6,716  

Delaware Tax-Free California Fund

      7,178  

Delaware Tax-Free Colorado Fund

      11,601  

Delaware Tax-Free Idaho Fund

      7,598  

Delaware Tax-Free New York Fund

      7,007  

Delaware Tax-Free Pennsylvania Fund

      19,104  

DIFSC is also the transfer agent and dividend disbursing agent of each Fund. For these services, DIFSC’s fees are calculated daily and paid monthly based on the aggregate daily net assets of the retail funds within the Delaware Funds at the following annual rates: 0.014% of the first $20 billion; 0.011% of the next $5 billion; 0.007% of the next $5 billion; and 0.005% of the next $20 billion; and 0.0025% of average daily net assets in excess of $50 billion. The fees payable to DIFSC under the shareholder services agreement described above are allocated among all retail funds in the Delaware Funds on a relative NAV basis. These amounts are included on the “Statements of operations” under “Dividend

 

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Notes to financial statements
Delaware Funds® by Macquarie state tax-free funds        

 

 

2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)

disbursing and transfer agent fees and expenses.” For the year ended August 31, 2020, each Fund was charged for these services as follows:

 

Fund

    Fees  

Delaware Tax-Free Arizona Fund

    $ 7,298  

Delaware Tax-Free California Fund

      8,522  

Delaware Tax-Free Colorado Fund

      20,439  

Delaware Tax-Free Idaho Fund

      9,666  

Delaware Tax-Free New York Fund

      8,081  

Delaware Tax-Free Pennsylvania Fund

      40,615  

Pursuant to a sub-transfer agency agreement between DIFSC and BNY Mellon Investment Servicing (US) Inc. (BNYMIS), BNYMIS provides certain sub-transfer agency services to the Funds. Sub-transfer agency fees are paid by the Funds and are also included on the “Statements of operations” under “Dividend disbursing and transfer agent fees and expenses.” The fees that are calculated daily and paid as invoices are received on a monthly or quarterly basis.

Pursuant to a distribution agreement and distribution plan, each Fund pays DDLP, the distributor and an affiliate of DMC, an annual 12b-1 fee of 0.25% of the average daily net assets of the Class A shares (except for Delaware Tax-Free Pennsylvania Fund). The Board for Delaware Tax-Free Pennsylvania Fund has adopted a formula for calculating 12b-1 fees for the Fund’s Class A shares that went into effect on June 1, 1992. The Fund’s Class A shares are currently subject to a blended 12b-1 fee equal to the sum of: (i) 0.10% of average daily net assets representing shares acquired prior to June 1, 1992, and (ii) 0.25% of average daily net assets representing shares acquired on or after June 1, 1992. All of the Fund’s Class A shareholders bear 12b-1 fees at the same blended rate, currently 0.24% of average daily net assets, based on the formula described above. This method of calculating Class A 12b-1 fees may be discontinued at the sole discretion of the Board. Each Fund pays 1.00% of the average daily net assets of the Class C shares. The fees are calculated daily and paid monthly. Institutional Class shares do not pay 12b-1 fees.

 

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As provided in the investment management agreement, each Fund bears a portion of the cost of certain resources shared with DMC, including the cost of internal personnel of DMC and/or its affiliates that provide legal, tax, and regulatory reporting services to the Funds. These amounts are included on the “Statements of operations” under “Legal fees.” For the year ended August 31, 2020, each Fund was charged for internal legal, tax, and regulatory services provided by DMC and/or its affiliates’ employees as follows:

 

Fund

    Fees  

Delaware Tax-Free Arizona Fund

    $ 2,478  

Delaware Tax-Free California Fund

      2,865  

Delaware Tax-Free Colorado Fund

      6,649  

Delaware Tax-Free Idaho Fund

      3,231  

Delaware Tax-Free New York Fund

      2,731  

Delaware Tax-Free Pennsylvania Fund

      13,036  

For the year ended August 31, 2020, DDLP earned commissions on sales of Class A shares for each Fund as follows:

 

Fund

    Commissions

Delaware Tax-Free Arizona Fund

      $ 2,660

Delaware Tax-Free California Fund

        1,741

Delaware Tax-Free Colorado Fund

        8,962

Delaware Tax-Free Idaho Fund

        13,935

Delaware Tax-Free New York Fund

        1,771

Delaware Tax-Free Pennsylvania Fund

        22,943

For the year ended August 31, 2020, DDLP received gross CDSC commissions on redemptions of each Fund’s Class A and Class C shares, respectively, and these commissions were entirely used to offset upfront commissions previously paid by DDLP to broker/dealers on sales of those shares. The amounts received were as follows:

 

Fund

    Class A      Class C  

Delaware Tax-Free Arizona Fund

    $       —      $   196  

Delaware Tax-Free Colorado Fund

      27,501        —  

Delaware Tax-Free Idaho Fund

      —        1,311  

Delaware Tax-Free Pennsylvania Fund

      —        340  

Trustees’ fees include expenses accrued by each Fund for each Trustee’s retainer and meeting fees. Certain officers of DMC, DIFSC, and DDLP are officers and/or Trustees of the Trust. These officers and Trustees are paid no compensation by the Funds.

 

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Notes to financial statements
Delaware Funds® by Macquarie state tax-free funds        

 

 

2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)

Cross trades for the year ended August 31, 2020, were executed by the Funds pursuant to procedures adopted by the Boards designed to ensure compliance with Rule 17a-7 under the 1940 Act. Cross trading is the buying or selling of portfolio securities between funds of investment companies, or between a fund of an investment company and another entity, that are or could be considered affiliates by virtue of having a common investment advisor (or affiliated investment advisors), common directors/trustees and/or common officers. At their regularly scheduled meetings, the Boards review such transactions for compliance with the procedures adopted by the Boards. Pursuant to these procedures, for the year ended August 31, 2020, the following Funds engaged in Rule 17a-7 securities purchases and securities sales, as follows:

 

       Purchases      Sales    Net realized gain (loss)

Delaware Tax-Free Arizona Fund

      $ 5,672,581      $ 7,401,587      $ (334,007 )

Delaware Tax-Free California Fund

        4,900,461        6,876,211        (62,680 )

Delaware Tax-Free Colorado Fund

        4,235,550        5,020,730        (140,579 )

Delaware Tax-Free Idaho Fund

        2,508,965        2,299,859        (45,199 )

Delaware Tax-Free New York Fund

        5,501,167        3,275,482        (80,388 )

Delaware Tax-Free Pennsylvania Fund

        33,376,235        42,425,659        (3,016,448 )

In addition to the management fees and other expenses of a Fund, a Fund indirectly bears the investment management fees and other expenses of the investment companies (Underlying Funds) in which it invests. The amount of these fees and expenses incurred indirectly by a Fund will vary based upon the expense and fee levels of the Underlying Funds and the number of shares that are owned of the Underlying Funds at different times.

 

 

*The aggregate contractual waiver period covering this report is from December 28, 2018 through December 28, 2020.

3. Investments

For the year ended August 31, 2020, each Fund made purchases and sales of investment securities other than short-term investments as follows:

 

Fund

    Purchases      Sales  

Delaware Tax-Free Arizona Fund

    $ 29,041,721      $ 28,008,486  

Delaware Tax-Free California Fund

      32,756,713        47,163,370  

Delaware Tax-Free Colorado Fund

      39,570,833        40,253,358  

Delaware Tax-Free Idaho Fund

      25,573,608        22,545,917  

Delaware Tax-Free New York Fund

      27,040,439        26,419,878  

Delaware Tax-Free Pennsylvania Fund

      174,670,498        180,230,327  

 

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The tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be the final tax cost basis adjustments, but approximates the tax basis unrealized gains and losses that may be realized and distributed to shareholders. At August 31, 2020, the cost and unrealized appreciation (depreciation) of investments for federal income tax purposes for each Fund were as follows:

 

Fund

    Cost of
investments		      Aggregate
unrealized
appreciation
of investments		      Aggregate
unrealized
depreciation
of investments		      Net unrealized
appreciation
of investments		  

Delaware Tax-Free Arizona Fund

    $ 75,015,204      $ 4,513,289      $ (389,461)      $ 4,123,828  

Delaware Tax-Free California Fund

      78,256,202        5,475,124        (424,919)        5,050,205  

Delaware Tax-Free Colorado Fund

      209,484,826        12,666,262        (1,092,291)        11,573,971  

Delaware Tax-Free Idaho Fund

      99,525,434        5,574,001        (622,964)        4,951,037  

Delaware Tax-Free New York Fund

      83,427,027        4,303,197        (625,245)        3,677,952  

Delaware Tax-Free Pennsylvania Fund

      409,118,762        27,355,753        (2,107,074)        25,248,679  

US GAAP defines fair value as the price that each Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A three-level hierarchy for fair value measurements has been established based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances. Each Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-level hierarchy of inputs is summarized as follows:

 

Level 1 –   Inputs are quoted prices in active markets for identical investments. (Examples: equity securities, open-end investment companies, futures contracts, and exchange-traded options contracts)
Level 2 –   Other observable inputs, including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs. (Examples: debt

 

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3. Investments (continued)

 

  securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, and fair valued securities)
Level 3 –   Significant unobservable inputs, including each Fund’s own assumptions used to determine the fair value of investments. (Examples: broker-quoted securities and fair valued securities)

Level 3 investments are valued using significant unobservable inputs. Each Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Valuations may also be based upon current market prices of securities that are comparable in coupon, rating, maturity, and industry. The derived value of a Level 3 investment may not represent the value which is received upon disposition and this could impact the results of operations.

The following tables summarize the valuation of each Fund’s investments by fair value hierarchy levels as of August 31, 2020:

 

    

Delaware Tax-Free Arizona  Fund

    

 

Level 2

Securities

     

Assets:

     

Municipal Bonds

        $78,139,032

Short-Term Investments

        1,000,000
    

 

 

  

Total Value of Securities

        $79,139,032
    

 

 

  

 

    

Delaware Tax-Free California  Fund

    

 

Level 2

Securities

     

Assets:

     

Municipal Bonds

        $82,356,407

Short-Term Investments

        950,000
    

 

 

  

Total Value of Securities

        $83,306,407
    

 

 

  

 

     Delaware Tax-Free Colorado Fund  
    

 

Level 1

     

 

Level 2

     

 

Total

  

Securities

         

Assets:

         

Municipal Bonds

    $ —      $ 219,905,214      $ 219,905,214  

Short-Term Investments1

      653,583        500,000        1,153,583  
  

 

 

     

 

 

     

 

 

  

Total Value of Securities

    $ 653,583      $ 220,405,214      $ 221,058,797  
  

 

 

     

 

 

     

 

 

  

 

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     Delaware Tax-Free Idaho Fund  
     Level 1      Level 2      Total  

Securities

         

Assets:

         

Municipal Bonds

    $           —      $ 102,534,982      $ 102,534,982  

Short-Term Investments1

      1,516,489        425,000        1,941,489  
  

 

 

     

 

 

     

 

 

  

Total Value of Securities

    $ 1,516,489      $ 102,959,982      $ 104,476,471  

 

    

Delaware Tax-Free New York  Fund

     Level 2

Securities

     

Assets:

     

Municipal Bonds

        $86,704,979

Short-Term Investments

        400,000
    

 

 

  

Total Value of Securities

        $87,104,979  
    

 

 

  

 

    

Delaware Tax-Free Pennsylvania  Fund

     Level 2

Securities

     

Assets:

     

Municipal Bonds

        $432,822,441

Short-Term Investments

        1,545,000
    

 

 

  

Total Value of Securities

        $434,367,441  
    

 

 

  

 

1 

Security type is valued across multiple levels. Level 1 investments represent exchange-traded investments, Level 2 investments represent investments with observable inputs or matrix-priced investments, and Level 3 investments represent investments without observable inputs. The amounts attributed to Level 1 investments, Level 2 investments, and Level 3 investments represent the following percentages of the total market value of these security types:

 

     Delaware Tax-Free
Colorado Fund		  
     Level 1     Level 2     Total  

Short-Term Investments

      56.66 %      43.34 %      100.00 % 

 

     Delaware Tax-Free
Idaho Fund		  
     Level 1     Level 2     Total  

Short-Term Investments

      78.11 %      21.89 %      100.00 % 

During the year ended August 31, 2020, there were no transfers into or out of Level 3 investments. Each Fund’s policy is to recognize transfers into or out of Level 3 investments based on fair value at the beginning of the reporting period.

 

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3. Investments (continued)

A reconciliation of Level 3 investments is presented when a Fund has a significant amount of Level 3 investments at the beginning, interim, or end of the period in relation to that Fund’s net assets. During the year ended August 31, 2020, there were no Level 3 investments.

4. Dividend and Distribution Information

Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Additionally, distributions from net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the years ended August 31, 2020 and 2019 was as follows:

 

     Tax-exempt
income		      Ordinary
income		      Long-term
capital
gains		      Total  

Year ended August 31, 2020:

            

Delaware Tax-Free Arizona Fund

    $ 2,294,008      $ 132,819      $ —      $ 2,426,827  

Delaware Tax-Free California Fund

      2,942,472        328,078        577,094        3,847,644  

Delaware Tax-Free Colorado Fund

      6,470,990        947        —        6,471,937  

Delaware Tax-Free Idaho Fund

      3,002,673        —        —        3,002,673  

Delaware Tax-Free New York Fund

      2,498,126        291,958        147,922        2,938,006  

Delaware Tax-Free Pennsylvania Fund

      13,525,071        1,397,137        2,715,224        17,637,432  

Year ended August 31, 2019:

            

Delaware Tax-Free Arizona Fund

      2,453,828        —        —        2,453,828  

Delaware Tax-Free California Fund

      3,230,687        —        141,274        3,371,961  

Delaware Tax-Free Colorado Fund

      6,757,874        909        —        6,758,783  

Delaware Tax-Free Idaho Fund

      3,015,084        8        —        3,015,092  

Delaware Tax-Free New York Fund

      2,626,610        —        —        2,626,610  

Delaware Tax-Free Pennsylvania Fund

      15,062,570        —        —        15,062,570  

 

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5. Components of Net Assets on a Tax Basis

As of August 31, 2020, the components of net assets on a tax basis were as follows:

 

     Delaware Tax-Free
Arizona Fund		   Delaware Tax-Free
California Fund		   Delaware Tax-Free
Colorado Fund

Shares of beneficial interest

      $ 75,762,289     $ 80,243,932     $ 213,401,580

Undistributed tax-exempt income

        69,805       65,562       492,759

Undistributed long-term capital gains

        —       —       —

Qualified late year loss deferrals

        —       (318,804 )       —

Distributions payable

        (49,924 )       (54,873 )       (140,201 )

Capital loss carryforwards

        (86,581 )       —       (2,311,032 )

Unrealized appreciation of investments

        4,123,828       5,050,205       11,573,971
    

 

 

      

 

 

      

 

 

  

Net assets

      $ 79,819,417     $ 84,986,022     $ 223,017,077
    

 

 

      

 

 

      

 

 

  

 

     Delaware Tax-Free
Idaho Fund		   Delaware Tax-Free
New York Fund		   Delaware Tax-Free
Pennsylvania Fund

Shares of beneficial interest

      $ 105,528,187     $ 83,950,452     $ 414,133,959

Undistributed tax-exempt income

        47,351       53,291       142,880

Undistributed long-term capital gains

        —       359,294       2,336,190

Qualified late year loss deferrals

        —       (44,037 )       (2,160,690 )

Distributions payable

        (64,060 )       (52,158 )       (293,350 )

Capital loss carryforwards

        (4,919,795 )       —       —

Unrealized appreciation of investments

        4,951,037       3,677,952       25,248,679
    

 

 

      

 

 

      

 

 

  

Net assets

      $ 105,542,720     $ 87,944,794     $ 439,407,668
    

 

 

      

 

 

      

 

 

  

The differences between book basis and tax basis components of net assets are primarily attributable to tax treatment of market discount and premium on debt instruments and tax deferral of losses due to wash sales, as applicable.

Qualified late year ordinary and capital losses (including currency and specified gain (loss) items) represent losses realized from January 1, 2020 through August 31, 2020 and November 1, 2019 through August 31, 2020, respectively, that, in accordance with federal income tax regulations, the Funds have elected to defer and treat as having arisen in the following fiscal year.

 

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5. Components of Net Assets on a Tax Basis (continued)

For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. At August 31, 2020, the Funds utilized capital loss carryforwards as follows:

 

Delaware Tax-Free Arizona Fund

      $141,726  

Delaware Tax-Free Colorado Fund

      887,138  

At August 31, 2020, capital loss carryforwards available to offset future realized capital gains, are as follows:

 

     Loss carryforward character         
     Short-term      Long-term      Total  

Delaware Tax-Free Arizona Fund

    $ 86,581      $ —      $ 86,581  

Delaware Tax-Free Colorado Fund

      2,311,032        —        2,311,032  

Delaware Tax-Free Idaho Fund

      2,504,581        2,415,214        4,919,795  

At August 31, 2020, there were no capital loss carryforwards for Delaware Tax-Free California Fund, Delaware Tax-Free New York Fund, and Delaware Tax-Free Pennsylvania Fund.

 

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6. Capital Shares

Transactions in capital shares were as follows:

 

     Delaware Tax-Free
Arizona Fund		     Delaware Tax-Free
California Fund		     Delaware Tax-Free
Colorado Fund		  
     Year ended     Year ended     Year ended  
     8/31/20     8/31/19     8/31/20     8/31/19     8/31/20     8/31/19  

Shares sold:

             

Class A

      349,787       262,361       798,154       246,328       1,177,515       946,719  

Class C

      41,794       42,564       48,347       135,650       66,422       115,864  

Institutional Class

      372,503       589,377       1,795,851       2,089,874       2,117,070       1,931,423  

Shares issued upon reinvestment of dividends and distributions:

 

        

Class A

      130,770       139,629       125,573       123,662       378,666       430,740  

Class C

      5,131       6,385       23,216       22,436       17,390       22,232  

Institutional Class

      41,773       34,201       105,460       78,502       123,322       92,420  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     941,758       1,074,517       2,896,601       2,696,452       3,880,385       3,539,398  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Shares redeemed:

             

Class A

      (400,570 )      (735,173 )      (685,580 )      (1,431,252 )      (1,773,322 )      (1,685,496 ) 

Class C

      (90,096 )      (61,785 )      (434,992 )      (319,827 )      (271,283 )      (224,664 ) 

Institutional Class

      (318,049 )      (313,916 )      (2,676,045 )      (1,346,002 )      (1,355,362 )      (823,168 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     (808,715 )      (1,110,874 )      (3,796,617 )      (3,097,081 )      (3,399,967 )      (2,733,328 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease)

      133,043       (36,357 )      (900,016 )      (400,629 )      480,418       806,070  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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6. Capital Shares (continued)

 

     Delaware Tax-Free
Idaho Fund		     Delaware Tax-Free
New York Fund		     Delaware Tax-Free
Pennsylvania Fund		  
     Year ended     Year ended     Year ended  
     8/31/20     8/31/19     8/31/20     8/31/19     8/31/20     8/31/19  

Shares sold:

             

Class A

      959,882       459,129       995,411       591,017       4,314,169       3,832,279  

Class C

      95,887       86,983       47,380       133,092       354,617       371,898  

Institutional Class

      1,075,303       1,875,734       842,455       1,449,261       1,831,656       2,517,108  

Shares issued upon reinvestment of dividends and distributions:

 

        

Class A

      133,062       143,675       95,051       88,863       1,636,289       1,397,399  

Class C

      19,494       30,006       17,739       20,484       84,927       81,414  

Institutional Class

      88,432       69,543       109,851       93,585       230,937       170,595  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     2,372,060       2,665,070       2,107,887       2,376,302       8,452,595       8,370,693  

Shares redeemed:

             

Class A

      (589,708 )      (1,140,741 )      (486,526 )      (1,003,925 )      (6,405,705 )      (7,228,804 ) 

Class C

      (455,467 )      (581,720 )      (598,180 )      (337,176 )      (1,117,945 )      (742,301 ) 

Institutional Class

      (1,052,192 )      (828,173 )      (980,134 )      (1,133,073 )      (847,916 )      (2,187,569 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
     (2,097,367 )      (2,550,634 )      (2,064,840 )      (2,474,174 )      (8,371,566 )      (10,158,674 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net increase (decrease)

      274,693       114,436       43,047       (97,872 )      81,029       (1,787,981 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

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Certain shareholders may exchange shares of one class for shares of another class in the same Fund. These exchange transactions are included as subscriptions and redemptions in the tables on the previous page and on the “Statements of changes in net assets.” For the years ended August 31, 2020 and 2019, each Fund had the following exchange transactions:

 

     Exchange Redemptions      Exchange Subscriptions         
     Class A
Shares		      Class C
Shares		      Class A
Shares		      Institutional
Class
Shares		      Value  

Delaware Tax-Free California Fund

               

8/31/20

      41,500        —        —        41,591      $ 497,495  

8/31/19

      94,289        4,281        —        98,582        1,213,599  

Delaware Tax-Free Colorado Fund

               

8/31/20

      14,854        —        —        14,879        162,881  

8/31/19

      10,452        5,036        4,754        10,763        172,380  

Delaware Tax-Free Idaho Fund

               

8/31/20

      975        47        47        976        11,445  

8/31/19

      19,800        —        —        19,815        226,175  

Delaware Tax-Free New York Fund

               

8/31/20

      —        689        687        —        7,995  

8/31/19

      6,590        —        —        6,591        73,949  

Delaware Tax-Free Pennsylvania Fund

               

8/31/20

      178,615        34,561        27,646        185,745        1,704,166  

8/31/19

      83,022        15,097        15,121        83,103        778,069  

Delaware Tax-Free Arizona Fund did not have any exchange transactions for the years ended August 31, 2020 and 2019.

7. Line of Credit

Each Fund, along with certain other funds in the Delaware Funds (Participants), was a participant in a $220,000,000 revolving line of credit intended to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. On November 4, 2019, the Participants entered into an amendment to the agreement for a $250,000,000 revolving line of credit (Agreement). The Agreement was increased to $275,000,000 on May 6, 2020. The Agreement is to be used as described below and operates in substantially the same manner as the original agreement. The line of credit available under the Agreement expires on November 2, 2020.

Under the Agreement, the Participants were charged an annual commitment fee of 0.15%, which was allocated across the Participants based on a weighted average of the respective net assets of each Participant. The Participants were permitted to borrow up to a maximum of one-third of their net assets under the Agreement. Each Participant was individually, and not jointly, liable for its particular advances, if any, under the line of credit. The line of credit available under the Agreement expired on November 4, 2019.

 

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Notes to financial statements
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7. Line of Credit (continued)

The Funds had no amounts outstanding as of August 31, 2020, or at any time during the year then ended.

8. Geographic, Credit, and Market Risks

Beginning in January 2020, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of a novel coronavirus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand and general market uncertainty. The effects of COVID-19 have and may continue to adversely affect the global economy, the economies of certain nations and individual issuers, all of which may negatively impact the Funds’ performance.

When interest rates rise, fixed income securities (i.e. debt obligations) generally will decline in value. These declines in value are greater for fixed income securities with longer maturities or durations.

IBOR risk is the risk that potential changes related to the use of the London interbank offered rate (LIBOR) could have adverse impacts on financial instruments that reference LIBOR. The potential abandonment of LIBOR could affect the value and liquidity of instruments that reference LIBOR. The use of alternative reference rate products may impact investment strategy performance. These risks may also apply with respect to changes in connection with other interbank offered rates (“IBORs”), such as the euro overnight index average (EONIA), which are also the subject of recent reform.

The Funds concentrate their investments in securities issued by each corresponding state’s municipalities. The Funds invest primarily in a specific state and may be subject to geographic concentration risk. In addition, the Funds have the flexibility to invest in issuers in US territories and possessions such as the Commonwealth of Puerto Rico, the US Virgin Islands, and Guam whose bonds are also free of federal and individual state income taxes. The value of the Funds’ investments may be adversely affected by new legislation within the states or US territories, regional or local economic conditions, and differing levels of supply and demand for municipal bonds. Many municipalities insure repayment for their obligations. Although bond insurance reduces the risk of loss due to default by an issuer, such bonds remain subject to the risk that value may fluctuate for other reasons and there is no certainty that the insurance company will meet its obligations. A real or perceived decline in creditworthiness of a bond insurer can have an adverse impact on the value of insured bonds held in each Fund.

 

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At August 31, 2020, the percentages of each Fund’s net assets insured by bond insurers are listed below and these securities have been identified on the “Schedules of investments.”

 

     Delaware Tax-Free
Arizona Fund		   Delaware Tax-Free
California Fund		   Delaware Tax-Free
Colorado Fund
American Capital Access        0.86 %       —       —
Assured Guaranty Municipal Corporation        1.51 %       1.67 %       4.51 %
Build America Mutual Assurance        —       —       1.11 %
National Public Finance Guarantee Corporation        —       1.13 %       —
    

 

 

      

 

 

      

 

 

  
Total        2.37 %       2.80 %       5.62 %
    

 

 

      

 

 

      

 

 

  
     Delaware Tax-Free
Idaho Fund		   Delaware Tax-Free
New York Fund		   Delaware Tax-Free
Pennsylvania Fund
Assured Guaranty Corporation        —       —       1.14 %
Assured Guaranty Municipal Corporation        4.08 %       —       1.30 %
AMBAC Assurance Corporation        —       1.23 %       —
Build America Mutual Assurance        —       —       0.65 %
    

 

 

      

 

 

      

 

 

  
Total        4.08 %       1.23 %       3.09 %
    

 

 

      

 

 

      

 

 

  

Each Fund invests a portion of its assets in high yield fixed income securities, which are securities rated lower than BBB- by Standard & Poor’s Financial Services LLC (S&P), lower than Baa3 by Moody’s Investors Service, Inc. (Moody’s), or similarly rated by another nationally recognized statistical rating organization. Investments in these higher yielding securities are generally accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.

Each Fund invests in certain obligations that may have liquidity protection designed to ensure that the receipt of payments due on the underlying security is timely. Such protection may be provided through guarantees, insurance policies, or letters of credit obtained by the issuer or sponsor through third parties, through various means of structuring the transaction, or through a combination of such approaches. The Funds will not pay any additional fees for such credit support, although the existence of credit support may increase the price of a security.

Each Fund may invest in advanced refunded bonds, escrow secured bonds, or defeased bonds. Under current federal tax laws and regulations, state and local government borrowers are permitted to refinance outstanding bonds by issuing new bonds. The issuer refinances the outstanding debt to either reduce interest costs or to remove or alter restrictive covenants imposed by the bonds being refinanced. A refunding transaction where the municipal securities are being refunded within 90 days from the issuance of the refunding issue is known as a “current refunding.” “Advance refunded bonds” are bonds in which the refunded bond issue remains outstanding for more than 90 days following the issuance of the refunding issue. In an advance refunding, the issuer will use the proceeds of a new bond issue to purchase high grade interest bearing debt securities, which are then deposited in an irrevocable escrow

 

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Notes to financial statements
Delaware Funds® by Macquarie state tax-free funds        

 

 

8. Geographic, Credit, and Market Risks (continued)

account held by an escrow agent to secure all future payments of principal and interest and bond premium of the advance refunded bond. Bonds are “escrowed to maturity” when the proceeds of the refunding issue are deposited in an escrow account for investment sufficient to pay all of the principal and interest on the original interest payment and maturity dates.

Bonds are considered “pre-refunded” when the refunding issue’s proceeds are escrowed only until a permitted call date or dates on the refunded issue with the refunded issue being redeemed at the time, including any required premium. Bonds become “defeased” when the rights and interests of the bondholders and of their lien on the pledged revenues or other security under the terms of the bond contract are substituted with an alternative source of revenues (the escrow securities) sufficient to meet payments of principal and interest to maturity or to the first call dates. Escrowed secured bonds will often receive a rating of AAA from Moody’s, S&P, and/or Fitch Ratings due to the strong credit quality of the escrow securities and the irrevocable nature of the escrow deposit agreement.

Each Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A promulgated under the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair each Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, each Board has delegated to DMC, the day-to-day functions of determining whether individual securities are liquid for purposes of the Funds’ 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 Funds’ 15% limit on investments in illiquid securities. Rule 144A securities have been identified on the “Schedules of investments.”

9. Contractual Obligations

Each Fund enters into contracts in the normal course of business that contain a variety of indemnifications. Each Fund’s maximum exposure under these arrangements is unknown. However, each Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed each Fund’s existing contracts and expects the risk of loss to be remote.

10. Recent Accounting Pronouncements

In March 2017, FASB issued Accounting Standards Update (ASU), ASU 2017-08, Receivables — Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities which amends the amortization period for certain callable debt securities purchased at a premium, shortening such period to the earliest call date. ASU 2017-08 does not require any accounting change for debt securities held at a discount; the discount continues to be amortized to maturity. ASU 2017-08 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Management has implemented ASU 2017-08 and determined that the impact of this guidance to each Fund’s net assets at the end of the period is not material.

 

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In August 2018, FASB issued ASU 2018-13, which changes certain fair value measurement disclosure requirements. ASU 2018-13, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for the timing of transfers between levels and the valuation process for Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. At this time, Management is evaluating the implications of these changes on the financial statements.

In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in ASU 2020-04 provide optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of LIBOR and other interbank-offered based reference rates as of the end of 2021. ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. As of the financial reporting period, Management is evaluating the impact of applying this ASU.

11. Subsequent Events

On August 12, 2020, the Board approved a proposal to reorganize the following acquired funds with and into the applicable acquiring funds as indicated below (each, a “Reorganization” and together, the “Reorganizations”):

 

Acquired Fund    Acquiring Fund
Delaware Tax-Free California II Fund, a series of the Delaware Group Limited-Term Government Funds    Delaware Tax-Free California
Fund, a series of the Trust
Delaware Tax-Free New York II Fund, a series of the Delaware Group Limited-Term Government Funds    Delaware Tax-Free New York
Fund, a series of the Trust

The proposal is not subject to shareholder approval. The Board of Trustees of Delaware Group Limited-Term Government Funds has determined that each Reorganization is in the best interests of the applicable Acquired Fund and that the interests of each Acquired Fund’s existing shareholders will not be diluted as a result of the Reorganization.

Effective a week before the Reorganizations, each Acquired Fund will be closed to new investors. Each Acquired Fund will continue to accept purchases (including reinvested dividends and capital gains) from existing shareholders until a week before the Reorganizations. Contingent deferred sales charges will be waived on redemptions from each Acquired Fund through the date of each Reorganization. The Reorganizations are expected to take place in December 2020.

Management has determined that no other material events or transactions occurred subsequent to August 31, 2020, that would require recognition or disclosure in the Funds’ financial statements.

 

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Report of independent

registered public accounting firm

 

To the Board of Trustees of Voyageur Insured Funds, Voyageur Mutual Funds, Voyageur Mutual Funds II and Delaware Group® State Tax-Free Income Trust and Shareholders of Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund, Delaware Tax-Free New York Fund, Delaware Tax-Free Colorado Fund and Delaware Tax-Free Pennsylvania Fund

Opinions on the Financial Statements

We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of Delaware Tax-Free Arizona Fund (constituting Voyageur Insured Funds), Delaware Tax-Free California Fund, Delaware Tax-Free Idaho Fund, Delaware Tax-Free New York Fund (three of the funds constituting Voyageur Mutual Funds), Delaware Tax-Free Colorado Fund (constituting Voyageur Mutual Funds II) and Delaware Tax-Free Pennsylvania Fund (constituting Delaware Group® State Tax-Free Income Trust) (hereafter collectively referred to as the “Funds”) as of August 31, 2020, the related statements of operations for the year ended August 31, 2020, the statements of changes in net assets for each of the two years in the period ended August 31, 2020, including the related notes, and the financial highlights for each of the five years in the period ended August 31, 2020 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Funds as of August 31, 2020, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period ended August 31, 2020 and each of the financial highlights for each of the five years in the period ended August 31, 2020 in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinions

These financial statements are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of August 31, 2020 by correspondence with the custodian and transfer agent. We believe that our audits provide a reasonable basis for our opinions.

 

/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
October 19, 2020

We have served as the auditor of one or more investment companies in Delaware Funds® by Macquarie since 2010.

 

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Delaware Funds® by Macquarie state tax-free funds        

 

 

Liquidity Risk Management Program

The Securities and Exchange Commission (the “SEC”) has adopted Rule 22e-4 under the Investment Company Act of 1940 (the “Liquidity Rule”), which requires all open-end funds (other than money market funds) to adopt and implement a program reasonably designed to assess and manage the fund’s “liquidity risk,” defined as the risk that the fund could not meet requests to redeem shares issued by the fund without significant dilution of remaining investors’ interests in the fund.

The Funds have adopted and implemented a liquidity risk management program in accordance with the Liquidity Rule (the “Program”). The Board has designated the Division Director of the US Operational Risk Group of Macquarie Asset Management as the Program Administrator for each Fund in the Trust.

As required by the Liquidity Rule, the Program includes policies and procedures that provide for: (1) assessment, management, and review (no less frequently than annually) of each Fund’s liquidity risk; (2) classification of each of the Fund’s portfolio holdings into one of four liquidity categories (Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of each Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting each Fund’s acquisition of Illiquid investments if, immediately after the acquisition, each Fund would hold more than 15% of its net assets in Illiquid assets. The Program also requires reporting to the SEC (on a non-public basis) and to the Board if each Fund’s holdings of Illiquid assets exceed 15% of each Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).

In assessing and managing each Fund’s liquidity risk, the Program Administrator considers, as relevant, a variety of factors, including: (1) each Fund’s investment strategy and liquidity of portfolio investments during both normal and reasonably foreseeable stressed conditions; (2) short-term and long-term cash flow projections for the Funds during both normal and reasonably foreseeable stressed conditions; and (3) each Fund’s holdings of cash and cash equivalents and any borrowing arrangements. Classification of each Fund’s portfolio holdings in the four liquidity categories is based on the number of days it is reasonably expected to take to convert the investment to cash (for Highly Liquid and Moderately Liquid holdings) or to sell or dispose of the investment (for Less Liquid and Illiquid investments), in current market conditions without significantly changing the investment’s market value. Each Fund primarily holds assets that are classified as Highly Liquid, and therefore is not required to establish an HLIM.

At a meeting of the Board held on May 19-21, 2020, the Program Administrator provided a written report to the Board addressing the Program’s operation and assessing the adequacy and effectiveness of its implementation for the period from December 1, 2018 through March 31, 2020. The report concluded that the Program is appropriately designed and effectively implemented and that it meets the requirements of Rule 22e-4 and each Fund’s liquidity needs. Each Fund’s HLIM is set at an appropriate level and the Funds complied with its HLIM at all times during the reporting period.

 

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Tax Information

The information set forth below is for each Fund’s fiscal year as required by federal income tax laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of the Funds. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in January of each year. Please consult your tax advisor for proper treatment of this information.

All disclosures are based on financial information available as of the date of this annual report and, accordingly are subject to change. For any and all items requiring reporting, it is the intention of the Funds to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.

For the fiscal year ended August 31, 2020, each Fund reports distributions paid during the year as follows:

 

     (A)
Long-Term
Capital Gains
Distributions
(Tax Basis)		   (B)
Ordinary Income
Distributions
(Tax Basis)		   (C)
Tax-Exempt
Distributions
(Tax Basis)		   Total
Distributions
(Tax Basis)

Delaware Tax-Free Arizona Fund

    —   5.47%   94.53%   100.00%

Delaware Tax-Free California Fund

    15.00%   8.53%   76.47%   100.00%

Delaware Tax-Free Colorado Fund

    —   0.01%   99.99%   100.00%

Delaware Tax-Free Idaho Fund

    —   —   100.00%   100.00%

Delaware Tax-Free New York Fund

    5.03%   9.94%   85.03%   100.00%

Delaware Tax-Free Pennsylvania Fund

    15.40%   7.92%   76.68%   100.00%

 

 

(A), (B) and (C) are based on a percentage of each Fund’s total distributions.

 

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Board consideration of Investment Advisory Agreements for Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, Delaware Tax-Free New York Fund, and Delaware Tax-Free Pennsylvania Fund at a meeting held on August 11-13, 2020

At a meeting held on August 11-13, 2020 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory Agreements for Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, Delaware Tax-Free New York Fund, and Delaware Tax-Free Pennsylvania Fund (each, a “Fund” and together, the “Funds”). In making its decision, the Board considered information furnished at regular quarterly Board meetings, including reports detailing Fund performance, investment strategies, and expenses, as well as information prepared specifically in connection with the renewal of the investment advisory and sub-advisory contracts. Information furnished specifically in connection with the renewal of the Investment Management Agreement with Delaware Management Company (“DMC”), a series of Macquarie Investment Management Business Trust (“MIMBT”), included materials provided by DMC and its affiliates (collectively, “Macquarie Investment Management”) concerning, among other things, the nature, extent, and quality of services provided to the Funds; the costs of such services to the Funds; economies of scale; and the investment manager’s financial condition and profitability. In addition, in connection with the Annual Meeting, materials were provided to the Trustees in May 2020, including reports provided by Broadridge Financial Solutions (“Broadridge”). The Broadridge reports compared each Fund’s investment performance and expenses with those of other comparable mutual funds. The Independent Trustees reviewed and discussed the Broadridge reports with independent legal counsel to the Independent Trustees. In addition to the information noted above, the Board also requested and received information regarding DMC’s policy with respect to advisory fee levels and its breakpoint philosophy, the structure of portfolio manager compensation, comparative client fee information, and any constraints or limitations on the availability of securities for certain investment styles, which had in the past year inhibited, or which were likely in the future to inhibit, the investment manager’s ability to invest fully in accordance with Fund policies.

In considering information relating to the approval of each Fund’s advisory agreement, the Independent Trustees received assistance and advice from and met separately with independent legal counsel to the Independent Trustees and also received assistance and advice from an experienced and knowledgeable independent fund consultant, JDL Consultants, LLC (“JDL”). Although the Board gave attention to all information furnished, the following discussion identifies, under separate headings, the primary factors taken into account by the Board during its contract renewal considerations.

Nature, extent, and quality of services. The Board considered the services provided by DMC to the Funds and their shareholders. In reviewing the nature, extent, and quality of services, the Board considered reports furnished to it throughout the year, which covered matters such as the relative performance of the Funds; compliance of portfolio managers with the investment policies, strategies, and restrictions for the Funds; compliance by DMC and Delaware Distributors, L.P. (together, “Management”) personnel with the Code of Ethics adopted throughout the Delaware Funds® by Macquarie (“Delaware Funds”); and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of DMC and the emphasis placed on research in

 

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Board consideration of Investment Advisory Agreements for Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, Delaware Tax-Free New York Fund, and Delaware Tax-Free Pennsylvania Fund at a meeting held on August 11-13, 2020 (continued)

the investment process. The Board recognized DMC’s receipt of certain favorable industry distinctions during the past several years. The Board gave favorable consideration to DMC’s efforts to control expenses while maintaining service levels committed to Fund matters. The Board also noted the benefits provided to Fund shareholders through (a) each shareholder’s ability to: (i) exchange an investment in one Delaware Fund for the same class of shares in another Delaware Fund without a sales charge, or (ii) reinvest Fund dividends into additional shares of the Fund or into additional shares of other Delaware Funds, and (b) the privilege to combine holdings in other Delaware Funds to obtain a reduced sales charge. The Board was satisfied with the nature, extent, and quality of the overall services provided by DMC.

Investment performance. The Board placed significant emphasis on the investment performance of the Funds in view of the importance of investment performance to shareholders. Although the Board considered performance reports and discussions with portfolio managers at Investment Committee meetings throughout the year, the Board gave particular weight to the Broadridge reports furnished for the Annual Meeting. The Broadridge reports prepared for each Fund showed the investment performance of its Class A shares in comparison to a group of similar funds as selected by Broadridge (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for each Fund was shown for the past 1-, 3-, 5-, and 10-year periods, to the extent, applicable, ended January 31, 2020. The Board’s objective is that each Fund’s performance for the 1-, 3-, and 5-year periods be at or above the median of its Performance Universe.

Delaware Tax-Free Arizona Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional “other states” municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1-, 3-, 5-, and 10-year periods was in the first quartile of its Performance Universe. The Board was satisfied with performance.

Delaware Tax-Free California Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional California municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1-, 3-, 5-, and 10-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.

Delaware Tax-Free Colorado Fund –The Performance Universe for the Fund consisted of the Fund and all retail and institutional “other states” municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1-, 3-, 5-, and 10-year periods was in the first quartile of its Performance Universe. The Board was satisfied with performance.

Delaware Tax-Free Idaho Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional “other states” municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1-, 3-, and 5-year periods was in the

 

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second quartile of its Performance Universe. The report further showed that the Fund’s total return for the 10-year period was in the third quartile of its Performance Universe. The Board was satisfied with performance.

Delaware Tax-Free New York Fund –The Performance Universe for the Fund consisted of the Fund and all retail and institutional New York municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1-, 3-, 5-, and 10-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.

Delaware Tax-Free Pennsylvania Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional Pennsylvania municipal debt funds as selected by Broadridge. The Broadridge report comparison showed that the Fund’s total return for the 1-, 3-, 5-, and 10-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.

Comparative expenses. The Board considered expense data for the Delaware Funds. Management provided the Board with information on pricing levels and fee structures for each Fund as of its most recently completed fiscal year. The Board also focused on the comparative analysis of effective management fees and total expense ratios of each Fund versus effective management fees and total expense ratios of a group of similar funds as selected by Broadridge (the “Expense Group”). In reviewing comparative costs, each Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. Each Fund’s total expenses were also compared with those of its Expense Group. The Broadridge total expenses, for comparative consistency, were shown by Broadridge for Class A shares and comparative total expenses including 12b-1 and non-12b-1 service fees. The Board’s objective is for each Fund’s total expense ratio to be competitive with those of the peer funds within its Expense Group.

Delaware Tax-Free Arizona Fund – The expense comparisons for the Fund showed that its actual management fee was in the quartile with the second lowest expenses of its Expense Group and its total expenses were in the quartile with the second highest expenses of its Expense Group. The Board gave favorable consideration to the Fund’s management fee, but noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered fee waivers in place through December 2020 and various initiatives implemented by Management, such as the negotiation of lower fees for fund accounting, fund accounting oversight services, and custody, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.

Delaware Tax-Free California Fund – The expense comparisons for the Fund showed that its actual management fee was in the quartile with the lowest expenses of its Expense Group and its total expenses were in the quartile with the second highest expenses of its Expense Group. The Board gave favorable consideration to the Fund’s management fee, but noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered favorably fee waivers in place through December 2020 and various initiatives implemented by Management, such as a negotiation of lower fees for fund accounting, fund accounting oversight services, and custody,

 

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Board consideration of Investment Advisory Agreements for Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, Delaware Tax-Free New York Fund, and Delaware Tax-Free Pennsylvania Fund at a meeting held on August 11-13, 2020 (continued)

which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.

Delaware Tax-Free Colorado Fund – The expense comparisons for the Fund showed that its actual management fee was in the quartile with the second lowest expenses of its Expense Group and its total expenses were in the quartile with the highest expenses of its Expense Group. The Board noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered favorably fee waivers in place through December 2020 and various initiatives implemented by Management, such as a negotiation of lower fees for fund accounting, fund accounting oversight services, and custody, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.

Delaware Tax-Free Idaho Fund – The expense comparisons for the Fund showed that its actual management fee and total expenses were in the quartile with the second highest expenses of its Expense Group. The Board noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered waivers in place through December 2020 and various initiatives implemented by Management, such as the negotiation of lower fees for fund accounting, fund accounting oversight services, and custody, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.

Delaware Tax-Free New York Fund – The expense comparisons for the Fund showed that its actual management fee was in the quartile with the lowest expenses of its Expense Group and its total expenses were in the quartile with the second highest expenses of its Expense Group. The Board gave favorable consideration to the Fund’s management fee, but noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered fee waivers in place through December 2020 and various initiatives implemented by Management, such as the negotiation of lower fees for fund accounting, fund accounting oversight services, and custody, which had created an opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.

Delaware Tax-Free Pennsylvania Fund – The expense comparisons for the Fund showed that its actual management fee and total expenses were in the quartile with the second highest expenses of its Expense Group. The Board noted that the Fund’s management fee and total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered fee waivers in place through December 2020 and various initiatives implemented by Management, such as the negotiation of lower fees for fund accounting, fund accounting oversight services, and custody, which had created an

 

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opportunity for a further reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and to bring it in line with the Board’s objective.

Management profitability. The Board considered the level of profits realized by DMC in connection with the operation of the Funds. In this respect, the Board reviewed the Investment Management Profitability Analysis that addressed the overall profitability of DMC’s business in providing management and other services to each of the individual funds and the Delaware Funds as a whole. Specific attention was given to the methodology used by DMC in allocating costs for the purpose of determining profitability. Management stated that the level of profits of DMC, to a certain extent, reflects recent operational cost savings and efficiencies initiated by DMC. The Board considered DMC’s efforts to improve services provided to Fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which DMC might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. As part of its work, the Board also reviewed a report prepared by JDL regarding MIMBT profitability as compared to certain peer fund complexes and the Independent Trustees met with JDL personnel to discuss DMC’s profitability in such context. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of DMC.

Economies of scale. The Trustees considered whether economies of scale are realized by DMC as each Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed each Fund’s advisory fee pricing and structure, approved by the Board and shareholders, which includes breakpoints, and which applies to most funds in the Delaware Funds complex. Breakpoints in the advisory fee occur when the advisory fee rate is reduced on assets in excess of specified levels. Breakpoints result in a lower advisory fee than would otherwise be the case in the absence of breakpoints, when the asset levels specified in the breakpoints are exceeded. Although, as of March 31, 2020, the Funds had not reached a size at which they could take advantage of any breakpoints in the applicable fee schedule, the Board recognized that each Fund’s fee was structured so that, if the Fund increases sufficiently in size, then economies of scale may be shared.

 

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Board of trustees / directors and officers addendum

Delaware Funds® by Macquarie

 

 

A mutual fund is governed by a Board of Trustees/Directors (“Trustees”), which has oversight responsibility for the management of a fund’s business affairs. Trustees establish procedures and oversee and review the performance of the investment manager, the distributor, and others who perform services for the fund. The independent fund trustees, in particular, are advocates for shareholder interests. Each trustee has served in that capacity since he or she was elected to or appointed to the Board of Trustees, and will continue to serve until his or her retirement or the election of a new trustee in his or her place. The following is a list of the Trustees and Officers with certain background and related information.

 

Name,
Address,
and Birth Date		   Position(s)
Held with
Fund(s)		   Length of Time
Served		   Principal
Occupation(s)
During the
Past Five Years		   Number of
Portfolios in Fund
Complex Overseen
by Trustee
or Officer		   Other
Directorships
Held by
Trustee
or Officer

Interested Trustee

Shawn K. Lytle1
610 Market Street
Philadelphia, PA 19106
February 1970

   President,
Chief Executive Officer,
and Trustee		   President and
Chief Executive Officer
since August 2015
Trustee since
September 2015		  

President — Macquarie

Investment Management2

(June 2015–Present)

Regional Head of Americas —

UBS Global Asset Management

(April 2010–May 2015)

   93  

Trustee — UBS Relationship

Funds, SMA Relationship Trust,

and UBS Funds

(May 2010–April 2015)

Independent Trustees

Jerome D. Abernathy
610 Market Street
Philadelphia, PA 19106
July 1959

   Trustee   Since January 2019  

Managing Member, Stonebrook Capital Management, LLC (financial technology: macro

factors and databases)

(January 1993-Present)

   93   None

 

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Name,
Address,
and Birth Date		   Position(s)
Held with
Fund(s)		   Length of Time
Served		   Principal
Occupation(s)
During the
Past Five Years		   Number of
Portfolios in Fund
Complex Overseen
by Trustee
or Officer		   Other
Directorships
Held by
Trustee
or Officer

Thomas L. Bennett
610 Market Street
Philadelphia, PA 19106
October 1947

   Chair and Trustee  

Trustee since March 2005

Chair since March

2015

   Private Investor
(March 2004–Present)		   93   None

Ann D. Borowiec
610 Market Street
Philadelphia, PA 19106
November 1958

   Trustee   Since March 2015  

Chief Executive Officer, Private

Wealth Management

(2011–2013) and Market

Manager, New Jersey Private

Bank (2005–2011) — J.P.

Morgan Chase & Co.

   93  

Director — Banco Santander

International

(October 2016–December 2019)
Director — Santander Bank, N.A. (December 2016–December

2019)

Joseph W. Chow
610 Market Street
Philadelphia, PA 19106
January 1953

   Trustee   Since January 2013   Private Investor
(April 2011–Present)		   93  

Director and Audit Committee

Member — Hercules Technology

Growth Capital, Inc.

(July 2004–July 2014)

 

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Board of trustees / directors and officers addendum

Delaware Funds® by Macquarie

 

 

Name,
Address,
and Birth Date		   Position(s)
Held with
Fund(s)		   Length of Time
Served		   Principal
Occupation(s)
During the
Past Five Years		   Number of
Portfolios in Fund
Complex Overseen
by Trustee
or Officer		   Other
Directorships
Held by
Trustee
or Officer

John A. Fry
610 Market Street
Philadelphia, PA 19106
May 1960

   Trustee   Since January 2001  

President — Drexel University

(August 2010–Present)

President — Franklin & Marshall

College (July 2002–June 2010)

   93  

Director; Compensation

Committee and Governance

Committee Member —

Community Health Systems

(May 2004–Present)

Director — Drexel Morgan & Co.

(2015–2019)

Director and Audit Committee

Member — vTv Therapeutics Inc.

(2017–Present)
Director and Audit Committee

Member — FS Credit Real Estate

Income Trust, Inc.

(2018–Present)
Director — Federal Reserve

Bank of Philadelphia

(January 2020–Present)

Lucinda S. Landreth
610 Market Street
Philadelphia, PA 19106
June 1947

   Trustee   Since March 2005   Private Investor (2004–Present)   93   None

 

188

Table of Contents
Name,
Address,
and Birth Date		   Position(s)
Held with
Fund(s)		   Length of Time
Served		   Principal
Occupation(s)
During the
Past Five Years		   Number of
Portfolios in Fund
Complex Overseen
by Trustee
or Officer		   Other
Directorships
Held by
Trustee
or Officer

Frances A. Sevilla-Sacasa
610 Market Street
Philadelphia, PA 19106
January 1956

   Trustee   Since September 2011  

Private Investor
(January 2017–Present)
Chief Executive Officer — Banco

Itaú International

(April 2012–December 2016)
Executive Advisor to Dean

(August 2011–March 2012) and
Interim Dean

(January 2011–July 2011) — University of Miami School of

Business Administration

President — U.S. Trust, Bank of
America Private Wealth

Management (Private Banking)

(July 2007-December 2008)

   93  

Trust Manager and Audit

Committee Chair — Camden
Property Trust

(August 2011–Present)

Director; Strategic

Planning and Reserves
Committee and Nominating
and Governance
Committee Member —
Callon Petroleum Company
(December 2019–Present)
Director; Audit Committee Member — Carrizo Oil & Gas,

Inc. (March 2018–December 2019)

 

189

Table of Contents

Board of trustees / directors and officers addendum

Delaware Funds® by Macquarie

 

 

Name,
Address,
and Birth Date		   Position(s)
Held with
Fund(s)		   Length of Time
Served		   Principal
Occupation(s)
During the
Past Five Years		   Number of
Portfolios in Fund
Complex Overseen
by Trustee
or Officer		   Other
Directorships
Held by
Trustee
or Officer

Thomas K. Whitford
610 Market Street
Philadelphia, PA 19106
March 1956

   Trustee   Since January 2013   Vice Chairman (2010–April 2013)
— PNC Financial Services Group		   93   Director — HSBC North America Holdings Inc.
(December 2013–Present)
Director — HSBC USA Inc.
(July 2014–Present)
Director — HSBC Bank USA, National Association
(July 2014–March 2017)
Director — HSBC Finance Corporation
(December 2013–April 2018)

 

190

Table of Contents
Name,
Address,
and Birth Date		   Position(s)
Held with
Fund(s)		   Length of Time
Served		   Principal
Occupation(s)
During the
Past Five Years		   Number of
Portfolios in Fund
Complex Overseen
by Trustee
or Officer		   Other
Directorships
Held by
Trustee
or Officer

Christianna Wood
610 Market Street
Philadelphia, PA 19106
August 1959

   Trustee   Since January 2019   Chief Executive Officer and
President — Gore Creek Capital,
Ltd. (August 2009–Present)		   93   Director; Finance Committee and
Audit Committee Member —
H&R Block Corporation
(July 2008–Present)
Director; Investments
Committee, Capital and Finance
Committee, and Audit
Committee Member — Grange
Insurance (2013–Present)
Trustee; Chair of Nominating and
Governance Committee and
Audit Committee Member — The
Merger Fund (2013–Present), The
Merger Fund VL (2013–Present);
WCM Alternatives: Event-Driven
Fund (2013–Present), and WCM
Alternatives: Credit Event Fund
(December 2017–Present)
Director; Chair of Governance
Committee and Audit Committee
Member — International
Securities Exchange (2010–2016)

 

191

Table of Contents

Board of trustees / directors and officers addendum

Delaware Funds® by Macquarie

 

 

Name,
Address,
and Birth Date		   Position(s)
Held with
Fund(s)		   Length of Time
Served		   Principal
Occupation(s)
During the
Past Five Years		   Number of
Portfolios in Fund
Complex Overseen
by Trustee
or Officer		   Other
Directorships
Held by
Trustee
or Officer

Janet L. Yeomans
610 Market Street
Philadelphia, PA 19106
July 1948

   Trustee   Since April 1999   Vice President and Treasurer
(January 2006–July 2012), Vice
President — Mergers &
Acquisitions
(January 2003–January 2006),
and Vice President and Treasurer
(July 1995–January 2003) — 3M
Company		   93   Director; Personnel and
Compensation Committee Chair;
Member of Nominating,
Investments, and Audit
Committees for various  periods
throughout directorship —
Okabena Company (2009–2017)
           

Officers

                    

David F. Connor
610 Market Street
Philadelphia, PA 19106
December 1963

   Senior Vice President,
General Counsel, and
Secretary		   Senior Vice President,
since May 2013;
General Counsel
since May 2015;
Secretary since
October 2005		   David F. Connor has served in
various capacities at different
times at Macquarie Investment
Management.		   93   None3

Daniel V. Geatens
610 Market Street
Philadelphia, PA 19106
October 1972

   Vice President and
Treasurer		   Vice President and
Treasurer since
October 2007		   Daniel V. Geatens has served in
various capacities at different
times at Macquarie Investment
Management.		   93   None3

 

192

Table of Contents
Name,
Address,
and Birth Date		   Position(s)
Held with
Fund(s)		   Length of Time
Served		   Principal
Occupation(s)
During the
Past Five Years		   Number of
Portfolios in Fund
Complex Overseen
by Trustee
or Officer		   Other
Directorships
Held by
Trustee
or Officer

Richard Salus
610 Market Street
Philadelphia, PA 19106
October 1963

   Senior Vice President
and Chief Financial
Officer		   Senior Vice President
and Chief Financial
Officer since
November 2006		   Richard Salus has served in
various capacities at different
times at Macquarie Investment
Management.		   93   None

1 Shawn K. Lytle is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor.

2 Macquarie Investment Management is the marketing name for Macquarie Management Holdings, Inc. and its subsidiaries, including the Fund’s(s’) investment manager, principal underwriter, and its transfer agent.

3 David F. Connor and Daniel V. Geatens serve in similar capacities for the six portfolios of the Optimum Fund Trust, which have the same investment advisor, principal underwriter, and transfer agent as the registrant. Mr. Geatens also serves as the Chief Financial Officer of the Optimum Fund Trust, and he is the Chief Financial Officer and Treasurer for Macquarie Global Infrastructure Total Return Fund Inc.

The Statement of Additional Information for the Fund(s) includes additional information about the Trustees and Officers and is available, without charge, upon request by calling 800 231-8002.

 

193

Table of Contents

About the organization

Board of trustees

Shawn K. Lytle

President and

Chief Executive Officer

Delaware Funds®

by Macquarie

Philadelphia, PA

Jerome D. Abernathy

Managing Member

Stonebrook Capital

Management, LLC

Jersey City, NJ

Thomas L. Bennett

Chairman of the Board

Delaware Funds

by Macquarie

Private Investor

Rosemont, PA

Ann D. Borowiec

Former Chief Executive

Officer

Private Wealth Management

J.P. Morgan Chase & Co.

New York, NY

Joseph W. Chow

Former Executive Vice

President

State Street Corporation

Boston, MA

John A. Fry

President

Drexel University

Philadelphia, PA

Lucinda S. Landreth

Former Chief Investment

Officer

Assurant, Inc.

New York, NY

Frances A. Sevilla-Sacasa

Former Chief Executive Officer Banco Itaú International Miami, FL

Thomas K. Whitford

Former Vice Chairman

PNC Financial Services Group

Pittsburgh, PA

Christianna Wood

Chief Executive Officer

and President

Gore Creek Capital, Ltd.

Golden, CO

Janet L. Yeomans

Former Vice President and

Treasurer

3M Company

St. Paul, MN

 

Affiliated officers

David F. Connor

Senior Vice President,

General Counsel,

and Secretary

Delaware Funds

by Macquarie

Philadelphia, PA

Daniel V. Geatens

Vice President and

Treasurer

Delaware Funds

by Macquarie

Philadelphia, PA

Richard Salus

Senior Vice President and

Chief Financial Officer

Delaware Funds

by Macquarie

Philadelphia, PA

 

 

This annual report is for the information of Delaware Tax-Free Arizona Fund, Delaware Tax-Free California Fund, Delaware Tax-Free Colorado Fund, Delaware Tax-Free Idaho Fund, Delaware Tax-Free New York Fund, and Delaware Tax-Free Pennsylvania Fund shareholders, but it may be used with prospective investors when preceded or accompanied by the Delaware Fund fact sheet for the most recently completed calendar quarter. These documents are available at delawarefunds.com/literature.

 

 

Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT. Each Fund’s Forms N-PORT, as well as a description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities, are available without charge (i) upon request, by calling 800 523-1918; and (ii) on the SEC’s website at sec.gov. In addition, a description of the policies and procedures that the Funds use to determine how to vote proxies (if any) relating to portfolio securities and the Schedules of Investments included in the Funds’ most recent Form N-PORT are available without charge on the Funds’ website at delawarefunds.com/literature. Each Fund’s Forms N-PORT may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330.

Information (if any) regarding how the Funds voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Funds’ website at delawarefunds.com/proxy; and (ii) on the SEC’s website at sec.gov.

 

194

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/Directors has determined that certain members of the registrant’s Audit Committee are audit committee financial experts, as defined below. For purposes of this item, an “audit committee financial expert” is a person who has the following attributes:

a. An understanding of generally accepted accounting principles and financial statements;

b. The ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves;

c. Experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements, or experience actively supervising one or more persons engaged in such activities;

d. An understanding of internal controls and procedures for financial reporting; and

e. An understanding of audit committee functions.

An “audit committee financial expert” shall have acquired such attributes through:

a. Education and experience as a principal financial officer, principal accounting officer, controller, public accountant, or auditor or experience in one or more positions that involve the performance of similar functions;

b. Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor, or person performing similar functions;

c. Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing, or evaluation of financial statements; or

d. Other relevant experience.

The registrant’s Board of Trustees/Directors has also determined that each member of the registrant’s Audit Committee is independent. In order to be “independent” for purposes of this item, the Audit Committee member may not: (i) other than in his or her capacity as a member of the Board of Trustees/Directors or any committee thereof, accept directly or indirectly any consulting, advisory or other compensatory fee from the issuer; or (ii) be an “interested person” of the registrant as defined in Section 2(a)(19) of the Investment Company Act of 1940.

The names of the audit committee financial experts on the registrant’s Audit Committee are set forth below:

Jerome D. Abernathy
John A. Fry
Thomas K. Whitford, Chair
Christianna Wood

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 $198,720 for the fiscal year ended August 31, 2020.

The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $202,520 for the fiscal year ended August 31, 2019.

(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 August 31, 2020.

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 August 31, 2020. 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 August 31, 2019.

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 $909,000 for the registrant’s fiscal year ended August 31, 2019. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. 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 $27,500 for the fiscal year ended August 31, 2020. 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 August 31, 2020. 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 $27,500 for the fiscal year ended August 31, 2019. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. 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 August 31, 2019. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.

(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 August 31, 2020.

The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended August 31, 2020. 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 $0 for the fiscal year ended August 31, 2019.

The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended August 31, 2019. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.

(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 $40,000 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 $5,607,000 and $9,955,000 for the registrant’s fiscal years ended August 31, 2020 and August 31, 2019, respectively.

(h) In connection with its selection of the independent auditors, the registrant’s Audit Committee has considered the independent auditors’ provision of non-audit services to the registrant’s investment adviser and other service providers under common control with the adviser that were not required to be pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X. The Audit Committee has determined that the independent auditors’ provision of these services is compatible with maintaining the auditors’ independence.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Investments

(a) Included as part of report to shareholders filed under Item 1 of this Form N-CSR.

(b) Divestment of securities in accordance with Section 13(c) of the Investment Company Act of 1940.

Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders

Not applicable.

Item 11. Controls and Procedures

The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

There were no significant changes in the registrant’s internal control over financial reporting that occurred during the period covered by the report to stockholders included herein that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies

Not applicable.

Item 13. Exhibits

(a)   (1) Code of Ethics
 
       Not applicable.
 
(2) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are attached hereto as Exhibit 99.CERT.
   
(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934.
 
       Not applicable.
 
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are furnished herewith as Exhibit 99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf, by the undersigned, thereunto duly authorized.


VOYAGEUR MUTUAL FUNDS


/s/ SHAWN K. LYTLE
By: Shawn K. Lytle
Title:      President and Chief Executive Officer
Date: November 6, 2020

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: November 6, 2020
 
 
/s/ RICHARD SALUS
By: Richard Salus
Title:      Chief Financial Officer
Date: November 6, 2020