Delaware Minnesota High-Yield Municipal Bond Fund

Objective

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.

Strategy

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

Fund information
Inception date12/31/2013
Dividends paid (if any)Monthly
Capital gains paid (if any)December
Fund identifiers
NASDAQDMHIX
CUSIP928928175

Institutional Class shares are 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 (11/30/2016)

as of quarter-end (09/30/2016)

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-0.41%0.17%n/an/an/a4.47%12/31/2013
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-0.15%5.38%n/an/an/a6.42%12/31/2013
Bloomberg Barclays Municipal Bond Index-0.30%5.58%n/an/an/a5.93%

Returns for less than one year are not annualized.

Benchmark lifetime returns are as of the Fund's inception date.

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
Gross0.74%
Net0.64%

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
20161.36%2.79%-0.15%n/an/a
20151.01%-0.25%1.40%1.30%3.50%
20143.76%2.73%1.83%1.43%10.10%

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

Portfolio characteristics - as of 10/31/2016Bloomberg Barclays Municipal Bond Index
Number of holdings18450,263
Portfolio turnover (last fiscal year)16%n/a
Modified duration (view definition)4.93 years4.99 years
Effective maturity (weighted average) (view definition)6.22 years12.94 years
Yield to maturity (view definition)3.68%2.89%
Average market price (view definition)$110.62$110.19
Average coupon (view definition)5.08%4.77%
Yield to worst (view definition)2.68%2.01%
Alternative minimum tax2.52%3.69%
Convexity-13.00%n/a
SEC 30-day yield with waiver (view definition)2.04%
SEC 30-day yield without waiver (view definition)1.95%
Annualized standard deviation, 3 years (view definition)2.15n/a
Portfolio composition as of 11/30/2016Total may not equal 100% due to rounding.
Municipal bonds97.7%
Cash and cash equivalents2.3%

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

Top 10 fixed income holdings as of 11/30/2016
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
City of St Cloud MN 5.125 5/1/20301.9%
City of St Louis Park MN 5.750 7/1/20391.9%
Chaska Independent School District No 112 5.000 2/1/20281.5%
State of Minnesota 5.000 8/1/20271.4%
University of Minnesota 5.000 4/1/20341.4%
Minneapolis-St Paul Metropolitan Airports Commission 5.000 1/1/20291.3%
City of St Cloud MN 5.000 5/1/20231.3%
City of Maple Grove MN 5.250 5/1/20281.2%
Western Minnesota Municipal Power Agency 5.000 1/1/20401.2%
State of Minnesota 5.000 8/1/20321.2%
Total % Portfolio in Top 10 holdings14.3%

Fixed income sectors as of 10/31/2016

List excludes cash and cash equivalents.

SectorFundBenchmark
Hospital28.8%8.7%
Education19.6%6.8%
Local general obligations11.7%12.0%
Pre-refunded9.7%7.9%
Electric7.7%5.5%
Special tax5.2%9.6%
State general obligations4.3%14.8%
Leasing3.0%6.5%
Transportation2.7%15.5%
Housing2.1%1.3%
IDR/PCR (corporate)1.5%2.7%
Water & sewer1.3%8.7%
Credit quality as of 10/31/2016
RatingFundBenchmark
AAA9.3%14.0%
AA29.5%53.6%
A21.1%26.8%
BBB8.2%5.6%
BB7.5%0.0%
Not rated24.5%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 (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20160.0000.347
20150.0000.405
20140.0000.439
20130.0000.000
20120.0000.000
20110.0000.000
20100.0000.000
20090.0000.000
20080.0000.000
20070.0000.000
20060.0000.000

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 are only available to certain investors. See the prospectus for more information. 

Joe Baxter

Joe Baxter  

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

Start date on the Fund: May 2003

Years of industry experience: 32

(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: 32

(View bio)


Institutional Class shares are 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 fees0.55%
Distribution and service (12b-1) feesnone
Other expenses0.19%
Total annual fund operating expenses0.74%
Fee waivers and expense reimbursements(0.10%)
Total annual fund operating expenses after fee waivers and expense reimbursements0.64%

Institutional Class shares are 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 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 0.64% 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 800 362-7500. 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.

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.

The Funds are distributed by Delaware Distributors L.P., an affiliate of Delaware Management Holdings, Inc., and Macquarie Group Limited.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 12/02/2016)

Institutional ClassPriceNet change
NAV$10.480.01
Max offer price$10.48n/a

Total net assets (as of 11/30/2016)

$179.0 million all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 10/31/2016)
RatingNo. of funds
Overall560
3 Yrs560
5 Yrs557
10 Yrs445
Morningstar categoryMuni Minnesota

(View Morningstar disclosure)

Morningstar ranking (as of 10/31/2016)

YTD ranking9 / 66
1 year9 / 66
3 yearsn/a
5 yearsn/a
10 yearsn/a
Morningstar categoryMuni Minnesota

(View Morningstar disclosure)

Lipper ranking (as of 10/31/2016)

YTD ranking5 / 45
1 year8 / 45
3 yearsn/a
5 yearsn/a
10 yearsn/a
Lipper classificationMN Muni Debt Funds

Benchmark, peer group

Bloomberg Barclays Municipal Bond Index (view definition)

Morningstar Muni Minnesota Category (view definition)

Lipper Minnesota Municipal Debt Funds Average (view definition)

Additional information