Delaware Tax-Free USA Intermediate Fund

Client-focused consistency

Get a firsthand look at the Delaware Investments municipal bond group and see what drives its passion for performance.

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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 U.S. 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.

Fund information
Inception date01/07/1993
Dividends paid (if any)Monthly
Capital gains paid (if any)December
Fund identifiers
NASDAQDMUSX
CUSIP245909304
Investment minimums
Initial investment$1,000
Subsequent Investments$100
Systematic withdrawal balance$5,000
Account features
CheckwritingNo
Payroll DeductionYes
IRAsNo

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 (07/31/2014)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)4.69%4.99%4.02%4.61%4.18%5.05%01/07/1993
Max offer price1.83%2.07%3.07%4.03%3.88%4.92%
Barclays 3-15 Year Blend Municipal Bond Index4.84%6.09%4.38%4.85%4.70%n/a
Average annual total return as of quarter-end (06/30/2014)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)2.14%4.52%4.47%4.29%4.89%4.30%5.06%01/07/1993
Max offer price-0.69%1.67%1.57%3.33%4.30%4.01%4.93%
Barclays 3-15 Year Blend Municipal Bond Index2.10%4.62%5.63%4.64%5.19%4.81%n/a

Returns for less than one year are not annualized.

Class A shares have a maximum up-front sales charge of 2.75% and are subject to an annual distribution fee.

Expense ratio
Gross0.92%
Net0.75%

Net expense ratio reflects contractual waivers of certain fees and/or expense reimbursements from Dec. 27, 2013 through Dec. 29, 2014. Please see the fee table in the Fund’s prospectus for more information.

Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
20142.33%2.14%n/an/an/a
20130.43%-2.96%-0.11%0.05%-2.59%
20121.06%1.82%2.30%0.46%5.76%
20110.11%3.09%2.76%2.54%8.75%
20101.08%1.93%3.43%-4.05%2.24%
20093.18%1.78%6.88%-0.77%11.38%
2008-0.04%0.22%-1.72%0.53%-1.02%
20070.72%-0.69%1.08%0.62%1.74%
20060.33%-0.15%3.06%0.93%4.20%
2005-0.16%3.20%-0.24%0.65%3.45%
20041.89%-2.15%3.75%1.44%4.93%
Portfolio characteristics - as of 07/31/2014
Share assets$283.4 million
Number of holdings196
Effective maturity (weighted average) (view definition)5.43 years
Modified duration (view definition)4.53 years
Annualized standard deviation, 3 years (view definition)3.64
SEC 30-day yield with waiver (view definition)1.50%
SEC 30-day yield without waiver (view definition)1.32%
Portfolio turnover (last fiscal year)23%
Portfolio composition as of 07/31/2014Total may not equal 100% due to rounding.
Municipal bonds96.8%
Cash and cash equivalents3.2%

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

Top 10 holdings as of 07/31/2014
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
County of Fairfax VA 5.000 4/1/20201.6%
State of Minnesota 5.000 10/1/20221.3%
New York Local Government Assistance Corp. 5.000 4/1/20171.3%
State of California 5.250 9/1/20281.2%
State of Hawaii 5.000 8/1/20191.2%
Port Authority of New York & New Jersey 6.500 12/1/20281.2%
City of San Francisco CA Public Utilities Commission Water Revenue 5.000 11/1/20271.2%
City of Phoenix Civic Improvement Corp. 5.000 7/1/20261.2%
State of New Jersey 5.000 8/15/20191.2%
New York State Thruway Authority 5.000 5/1/20191.2%
Total % Portfolio in Top 10 holdings12.6%
Top sectors as of 06/30/2014
List excludes cash, accruals on bonds, and cash equivalents.
Sector% of portfolio
State general obligation16.4%
Transportation15.6%
Special Tax15.5%
Corporate12.0%
Hospital9.0%
Local general obligation7.3%
Education6.9%
Water/sewer5.2%
Leasing3.5%
Pre-refunded/ETM2.8%
Top 10 states
Distribution history - annual distributions (Class A)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20140.0000.227
20130.0000.342
20120.0000.359
20110.0000.367
20100.0000.415
20090.0000.403
20080.0000.379
20070.0000.406
20060.0000.411
20050.0000.411
20040.0000.417

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 is only provided from June 1, 2014 onward.

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

Joe Baxter

Joe Baxter  

Senior Vice President, Head of Municipal Bond Department, Senior Portfolio Manager

Start date on the Fund: January 2003

(View bio)


Steve Czepiel

Steve Czepiel  

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: July 2007

(View bio)


Greg Gizzi

Greg Gizzi 

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: December 2012

(View bio)


You may qualify for sales-charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in Delaware Investments® Funds. More information about these and other discounts is available from your financial advisor, in the Fund's prospectus under the section entitled "About your account," and in the Fund's statement of additional information under the section entitled "Purchasing shares."

Shareholder fees
Maximum sales charge (load) imposed on purchases as a percentage of offering price2.75%
Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lowernone
Annual fund operating expenses
Management fees0.49%
Distribution and service (12b-1) fees0.25%
Other expenses0.18%
Total annual fund operating expenses0.92%
Fee waivers and expense reimbursements(0.17%)
Total annual fund operating expenses after fee waivers and expense reimbursements0.75%

1The Class A shares' distribution and service (12b-1) fees have been revised to reflect a permanent reduction in their fees to 0.25%.

2The Fund's investment manager, Delaware Management Company (Manager), is contractually waiving its investment advisory fees and/or paying expenses (excluding any 12b-1 fees, taxes, interest, inverse floater program expenses, acquired fund fees and 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) to the extent necessary to prevent total annual fund operating expenses from exceeding 0.60% of the Fund's average daily net assets from Dec. 27, 2013 through Dec. 29, 2014. The Fund's distributor, Delaware Distributors, L.P. (Distributor), has contracted to limit the Class A shares' 12b-1 fees to no more than 0.15% of the Class A shares' average daily net assets from Dec. 27, 2013 through Dec. 29, 2014. These waivers and reimbursements may only be terminated by agreement of the Manager or Distributor, as applicable, 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 fixed income security that is held by the Fund may be prepaid prior to maturity, potentially forcing the Fund to reinvest that money at a lower interest rate.

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

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

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.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 08/29/2014)

Class APriceNet changeYTD
NAV$12.210.015.80%
Max offer price$12.56n/an/a

Total net assets (as of 07/31/2014)

$730.9 million all share classes

Overall Morningstar RatingTM

Load waived

With load

Class A shares (as of 07/31/2014)

Load waivedWith loadNo. of funds
Overall33253
3 Yrs32253
5 Yrs33206
10 Yrs33148
Morningstar categoryMuni National Interm

(View Morningstar disclosure)

Lipper ranking (as of 07/31/2014)

YTD ranking86 / 206
1 year121 / 203
3 years66 / 176
5 years57 / 134
10 years25 / 99
Lipper classificationIntmdt Muni Debt Funds

(View Lipper disclosure)

Benchmark, peer group

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

Lipper Intermediate Municipal Debt Funds Average (view)

Additional information