Delaware Tax-Free Colorado Fund

1Q 2016 wrap-up: Municipal bonds

Senior Portfolio Manager Greg Gizzi discusses how drivers within the municipal asset class affected the marketplace during the first quarter of 2016. [Runtime: 2:15]

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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.


The Fund primarily invests in Colorado state and local municipal bonds with various maturities, the income from which is exempt from federal income tax and Colorado state personal income taxes.

Fund information
Inception date04/23/1987
Dividends paid (if any)Monthly
Capital gains paid (if any)December
Fund identifiers
Investment minimums
Initial investment$1,000
Subsequent Investments$100
Systematic withdrawal balance$5,000
Account features
Payroll DeductionYes

On Sept. 25, 2014, Class B shares of the Fund converted to Class A shares.

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 (04/30/2016)

as of quarter-end (03/31/2016)

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)2.59%5.57%3.31%5.74%4.58%5.96%04/23/1987
Max offer price-2.06%0.85%1.73%4.78%4.10%5.79%
Barclays Municipal Bond Index2.42%5.29%3.51%5.37%4.94%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)1.95%4.20%3.49%5.88%4.52%5.95%04/23/1987
Max offer price-2.68%-0.50%1.93%4.91%4.03%5.78%
Barclays Municipal Bond Index1.67%3.98%3.63%5.59%4.86%n/a

Returns for less than one year are not annualized.

Class A shares have a maximum up-front sales charge of 4.50% and are subject to an annual distribution fee.

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

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursements from Dec. 29, 2015 through Dec. 29, 2016. Please see the fee table in the Fund’s prospectus for more information.

Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
Portfolio characteristics - as of 04/30/2016Barclays Municipal Bond Index
Number of holdings11748,863
Portfolio turnover (last fiscal year)10%n/a
Modified duration (view definition)4.98 years4.78 years
Effective maturity (weighted average) (view definition)6.38 years12.99 years
Average market price (view definition)$113.64n/a
Average coupon (view definition)5.29%4.79%
Yield to worst (view definition)2.60%1.84%
Alternative minimum tax1.15%3.70%
SEC 30-day yield with waiver (view definition)1.68%
SEC 30-day yield without waiver (view definition)1.57%
Annualized standard deviation, 3 years (view definition)4.30n/a
Portfolio composition as of 04/30/2016Total may not equal 100% due to rounding.
Municipal bonds98.6%
Cash and cash equivalents1.4%

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

List excludes cash and cash equivalents.

Top 10 fixed income holdings as of 04/30/2016
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
City & County of Denver CO Airport System Revenue 5.000 11/15/20374.7%
Colorado Health Facilities Authority 5.000 12/1/20332.2%
Public Authority for Colorado Energy 6.500 11/15/20382.1%
Colorado Health Facilities Authority 5.000 12/1/20322.0%
Denver Convention Center Hotel Authority 5.000 12/1/20351.8%
City of Colorado Springs CO Utilities System Revenue 5.500 11/15/20481.8%
City & County of Denver CO 5.000 8/1/20251.8%
Colorado Health Facilities Authority 5.000 1/1/20441.7%
Colorado Health Facilities Authority 5.250 1/1/20451.7%
Platte River Power Authority 5.000 6/1/20271.6%
Total % Portfolio in Top 10 holdings21.4%

Fixed income sectors as of 04/30/2016

List excludes cash and cash equivalents.

Special tax15.6%9.6%
Local general obligations12.7%12.4%
IDR/PCR (corporate)2.1%2.9%
Water & sewer0.1%8.6%
Credit quality as of 04/30/2016
Not rated12.0%0.0%

Total may not equal 100% due to rounding. The Fund’s investment manager, Delaware Management Company (DMC), a series of Delaware 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.

Distribution history - annual distributions (Class A)1,2
Distributions ($ per share)
YearCapital gains3Net investment

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.

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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Joe Baxter

Joe Baxter  

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

Start date on the Fund: April 2004

Years of industry experience: 31

(View bio)

Steve Czepiel

Steve Czepiel  

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: July 2007

Years of industry experience: 34

(View bio)

Greg Gizzi

Greg Gizzi 

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: December 2012

Years of industry experience: 31

(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 intermediary, in the Fund's prospectus under the section entitled "About your account," and in the Fund's statement of additional information (SAI) under the section entitled "Purchasing Shares."

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 price4.50%
Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lowernone
Annual fund operating expenses
Management fees0.55%
Distribution and service (12b-1) fees0.25%
Other expenses0.17%
Total annual fund operating expenses0.97%
Fee waivers and expense reimbursements(0.13%)
Total annual fund operating expenses after fee waivers and expense reimbursements0.84%

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 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 0.59% of the Fund's average daily net assets from Dec. 29, 2015 through Dec. 29, 2016. 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 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.

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

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.

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 05/27/2016)

Class APriceNet change
NAV$11.55no chg
Max offer price$12.09n/a

Total net assets (as of 04/30/2016)

$202.9 million all share classes

Overall Morningstar RatingTM

Load waived

With load

Class A shares (as of 04/30/2016)
Load waivedWith loadNo. of funds
3 Yrs43268
5 Yrs43263
10 Yrs43216
Morningstar categoryMuni Single State Long

(View Morningstar disclosure)

Lipper ranking (as of 04/30/2016)

YTD ranking14 / 266
1 year23 / 266
3 years43 / 237
5 years26 / 234
10 years32 / 194
Lipper classificationOther States Muni Debt

(View Lipper disclosure)

Benchmark, peer group

Barclays Municipal Bond Index (view definition)

Lipper Other States Municipal Debt Funds Average (view definition)

Additional information