A word about current market volatility

Financial markets have reacted severely in recent sessions as soft economic readings have been accompanied by political uncertainty in many countries across the developed world, further inflating investor anxieties. Amid this increasing unease, markets felt particularly acute pressure as August got underway: on Friday, August 5, Standard & Poor's (S&P) issued a downgrade of long-term debt issued by the United States, then on Monday issued additional downgrades of entities that are linked in some way with U.S. debt (including clearing houses and well-known agencies like Freddie Mac and Fannie Mae). (It is important to note that Fitch and Moody’s, the other two major rating agencies, reaffirmed the United States’ top tier credit rating.)

The downgrades reflect the serious, long-term concerns shared by many analysts regarding the U.S. government's ability to address its budget deficit. In its research report, for example, S&P highlighted the fiscal consolidation plan that Congress and the Obama Administration recently agreed to as "falling short of what, in our view, would be necessary to stabilize the government's medium-term debt dynamics." To be sure, it will take time to fully understand what the ultimate effects of Friday's downgrade and the subsequent downgrades of today could be.

At Delaware Investments, our eight investment teams have a wide variety of opinions on the potential implications of the downgrades as well as how they may impact their broader investment outlooks for the remainder of 2011. As has been the case since the founding of our predecessor firm during the Great Depression, however, each team shares a commitment to managing assets in a way that is focused on meeting our clients' investment objectives.

Issues related to the U.S. government's finances are being factored in to our investment teams' risk measurements, and are part of their daily analyses of securities markets. As always, each team will continue monitoring the situation, conducting research, and adapting its risk assumptions, as appropriate.

While we don't want to downplay the risk aversion that has overcome markets in recent days, we want to reiterate our firm's long-held commitment to investing for the long term. For our investment teams, this includes staying true to their investment philosophies and processes where consistent with clients' investment objectives. Based on this commitment, we will strive to manage the risk associated with the current market volatility to the best of our ability.

The views expressed were current as of Aug. 9, 2011, and are subject to change at any time.

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

IMPORTANT RISK CONSIDERATIONS

Investing involves risk, including the possible loss of principal.

This report does not take into account the investment objectives, financial situation, or particular needs of any particular person. Investing in securities or financial products entails certain risks, including the possible loss of the entire principal amount invested. Investors should consult their own investment professionals regarding their individual investment programs.

Delaware Investments has no duty to update this report, and the opinions, estimates, and other view expressed in this report may change without notice. No liability whatsoever is accepted for any loss (whether direct, indirect, or consequential) that may arise from any use of the information contained in or derived from this report.

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