Delaware Tax-Free USA Intermediate Fund

Objective

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.

Strategy

The Fund primarily invests in debt obligations issued by various US state and local governments that provide income exempt from federal income taxes. By focusing on municipal bonds of intermediate maturity, the Fund seeks to balance relatively high tax-free income and capital preservation.

Key features

  • Income-driven, risk-controlled approach
  • Disciplined, bottom-up research-driven process
  • Experienced management team dedicated solely to municipal bond investing
Fund information
Inception date12/31/2008
Dividends paid (if any)Monthly
Capital gains paid (if any)December
Fund identifiers
NASDAQDUSIX
CUSIP24610H203

Institutional Class shares available only available to certain investors. See the prospectus for more information.

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.

Total returns may reflect waivers and/or expense reimbursements by the manager and/or distributor for some or all of the periods shown. Performance would have been lower without such waivers and reimbursements.

Average annual total return

as of month-end (05/31/2018)

as of quarter-end (03/31/2018)

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)0.02%1.35%2.32%2.24%n/a4.31%12/31/2008
Bloomberg Barclays 3-15 Year Blend Municipal Bond Index-0.36%0.44%2.40%2.56%n/a4.24%
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-0.89%2.57%1.77%2.00%n/a4.29%12/31/2008
Bloomberg Barclays 3-15 Year Blend Municipal Bond Index-1.07%1.96%1.91%2.37%n/a4.24%

Returns for less than one year are not annualized.

Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.

Expense ratio
Gross0.68%
Net0.50%

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursements from April 1, 2018 through April 1, 2019. Please see the fee table in the Fund's prospectus for more information.

Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
2018-0.89%n/an/an/an/a
20171.64%1.89%1.12%0.44%5.18%
20161.48%2.10%-0.17%-3.93%-0.62%
20150.80%-0.94%1.31%1.37%2.55%
20142.27%2.17%1.23%1.15%6.98%
20130.47%-2.89%-0.14%0.18%-2.40%
20121.18%1.85%2.33%0.50%5.97%
20110.16%3.10%2.87%2.48%8.86%
20101.51%2.04%3.44%-4.05%2.80%
20093.12%1.90%6.88%-0.32%11.95%

Institutional Class shares available only available to certain investors. See the prospectus for more information.

Portfolio characteristics - as of 05/31/2018Bloomberg Barclays 3-15 Year Blend Municipal Bond Index
Number of holdings22138,524
Portfolio turnover (last fiscal year)26%n/a
Modified duration (view definition)4.93 years4.82 years
Effective maturity (weighted average) (view definition)6.28 years8.65 years
Yield to maturity (view definition)3.62%3.00%
Average market price (view definition)$110.34$109.17
Average coupon (view definition)5.24%4.71%
Yield to worst (view definition)1.96%2.48%
Alternative minimum tax6.24%3.43%
SEC 30-day yield with waiver (view definition)2.56%
SEC 30-day yield without waiver (view definition)2.39%
Annualized standard deviation, 3 years (view definition)3.08n/a
Portfolio composition as of 05/31/2018Total may not equal 100% due to rounding.
Municipal bonds98.9%
Cash and cash equivalents1.1%

Cash and cash equivalents include accruals on bonds and long-term receivables.

Top 10 fixed income holdings as of 05/31/2018

Holdings are as of the date indicated and subject to change.

List excludes cash and cash equivalents.

Holding% of portfolio
State of Minnesota 5.000 10/1/20221.65%
Port Authority of New York & New Jersey 6.500 12/1/20281.59%
State of California 5.250 9/1/20281.57%
City of San Francisco CA Public Utilities Commission Water Revenue 5.000 11/1/20271.51%
City of Phoenix Civic Improvement Corp. 5.000 7/1/20261.46%
Railsplitter Tobacco Settlement Authority 5.250 6/1/20201.39%
State of California 5.000 9/1/20301.29%
Buckeye Tobacco Settlement Financing Authority 5.875 6/1/20471.29%
Public Authority for Colorado Energy 6.500 11/15/20381.29%
State of Oregon 5.000 5/1/20261.19%
Total % Portfolio in Top 10 holdings14.23%

Fixed income sectors as of 05/31/2018

List may exclude cash, cash equivalents, and exchanged-traded funds (ETFs) that are used for cash management purposes. Please see the Fund’s complete list of holdings for more information.
SectorFund
Transportation16.4%
IDR/PCR (corporate)16.0%
State general obligations12.0%
Pre-refunded11.3%
Special tax10.1%
Hospital9.4%
Education6.8%
Local general obligations6.5%
Water & sewer3.6%
Electric3.5%
Leasing3.3%
Credit quality as of 05/31/2018
RatingFundBenchmark
AAA12.2%15.6%
AA28.2%53.7%
A26.1%23.7%
BBB16.6%7.1%
BB3.6%0.0%
B4.3%0.0%
CCC0.8%0.0%
Not rated8.3%0.0%

Total may not equal 100% due to rounding. The Fund’s investment manager, Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust, receives “Credit Quality” ratings for the underlying securities held by the Fund from three “nationally recognized statistical rating organizations” (NRSROs): Standard & Poor’s (S&P), Moody’s Investors Service, and Fitch, Inc. The credit quality breakdown is calculated by DMC based on the NRSRO ratings. If two or more NRSROs have assigned a rating to a security the higher rating (lower value) is used. If only one NRSRO rates a security, that rating is used. Securities that are unrated by any of the three NRSROs are included in the “not rated” category when applicable. Unrated securities do not necessarily indicate low quality. More information about securities ratings is contained in the Fund’s Statement of Additional Information.

Top 10 states as of 05/31/2018
State% of portfolio
New York15.2%
California15.1%
Arizona10.0%
Texas9.5%
Illinois7.2%
Pennsylvania5.9%
New Jersey4.9%
Ohio2.9%
Louisiana2.7%
Minnesota2.7%
Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20180.0000.157
20170.0000.381
20160.0040.359
20150.0000.378
20140.0000.360
20130.0000.363
20120.0000.381
20110.0000.388
20100.0000.431
20090.0000.395
20080.0000.000

1If a Fund makes a distribution from any source other than net income, it is required to provide shareholders with a notice disclosing the source of such distribution (each a "Notice"). The amounts and sources of distributions reported above and in each Notice are only estimates and are not provided for tax reporting purposes. Each Fund will send each shareholder a Form 1099 DIV for the calendar year that will provide definitive information on how to report the Fund's distributions for federal income tax purposes. The information in the table above will not be updated to reflect any subsequent recharacterization of dividends and distributions. Click here to see recent Notices pertaining to the Fund (if any).

2Information on return of capital distributions (if any) is only provided from June 1, 2014 onward.

3Includes both short- and long-term capital gains.

Institutional Class shares available only available to certain investors. See the prospectus for more information.

Joe Baxter

Joe Baxter  

Senior Vice President, Senior Portfolio Manager, Head of Municipal Bond Department — Macquarie Investment Management, Americas

Start date on the Fund: January 2003

Years of industry experience: 33

(View bio)


Steve Czepiel

Steve Czepiel  

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: July 2007

Years of industry experience: 36

(View bio)


Greg Gizzi

Greg Gizzi 

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: December 2012

Years of industry experience: 34

(View bio)


Institutional Class shares available only available to certain investors. See the prospectus for more information.

The table below describes the fees and expenses that you may pay if you buy and hold shares of the Fund.

Shareholder fees
Maximum sales charge (load) imposed on purchases as a percentage of offering pricenone
Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lowernone
Annual fund operating expenses
Management fees0.50%
Distribution and service (12b-1) feesnone
Other expenses0.18%
Total annual fund operating expenses0.68%
Fee waivers and expense reimbursements(0.18%)
Total annual fund operating expenses after fee waivers0.50%

Institutional Class shares available only available to certain investors. See the prospectus for more information.

1The Fund’s investment manager, Delaware Management Company (Manager), has contractually agreed to waive all or a portion of its investment advisory fees and/or pay/reimburse expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, 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) in order to prevent total annual fund operating expenses from exceeding 0.50% of the Fund’s average daily net assets from April 1, 2018 through April 1, 2019. These waivers and reimbursements may only be terminated by agreement of the Manager and the Fund.

Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Fund’s prospectus and its summary prospectus, which may be obtained by clicking the prospectus link located in the right-hand sidebar or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.

Investing involves risk, including the possible loss of principal.

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

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

High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds.

Substantially all dividend income derived from tax-free funds is exempt from federal income tax. Some income may be subject to state or local 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.

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

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 06/20/2018)

Institutional ClassPriceNet change
NAV$11.89no chg
Max offer price$11.89n/a

Total net assets (as of 05/31/2018)

$545.8 million all share classes

Overall Morningstar RatingTM

 
Institutional Class shares (as of 05/31/2018)
RatingNo. of funds
Overall4256
3 Yrs4256
5 Yrs4228
10 Yrs4150
Morningstar categoryMorningstar Muni National Intermediate Category

(View Morningstar disclosure)

The Morningstar rating is based on risk-adjusted returns.

Morningstar ranking (as of 05/31/2018)

YTD ranking46 / 310
1 year75 / 299
3 years93 / 256
5 years100 / 228
10 yearsn/a
Morningstar categoryMorningstar Muni National Intermediate Category

(View Morningstar disclosure)

The Morningstar ranking is based on historical total returns.

Lipper ranking (as of 05/31/2018)

YTD ranking38 / 226
1 year40 / 218
3 years53 / 192
5 years60 / 177
10 yearsn/a
Lipper classificationLipper Intermediate Municipal Debt Funds Average

(View Lipper disclosure)

The Lipper ranking is based on historical total returns.

Benchmark, peer group

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

Morningstar Muni National Intermediate Category (view definition)

Lipper Intermediate Municipal Debt Funds Average (view definition)

Additional information