Delaware Inflation Protected Bond Fund


Delaware Inflation Protected Bond Fund seeks to provide inflation protection and current income.


The Fund primarily invests in inflation-indexed bonds issued by the U.S. government, its agencies and instrumentalities, and corporations.

Fund information
Inception date12/01/2004
Dividends paid*Monthly
Capital gains paid*December

*If any.

Fund identifiers
Investment minimums
Initial investment$1,000
Subsequent Investments$100
Systematic withdrawal balance$5,000
Account features
Payroll DeductionYes

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 (03/31/2014)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)1.01%-10.87%0.13%2.92%n/a3.64%12/01/2004
Max offer pricen/a-14.91%-1.39%1.97%n/a3.13%
Barclays U.S. TIPS Index1.95%-6.49%3.50%4.90%n/an/a
Average annual total return as of quarter-end (03/31/2014)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)1.01%1.01%-10.87%0.13%2.92%n/a3.64%12/01/2004
Max offer price-3.53%-3.53%-14.91%-1.39%1.97%n/a3.13%
Barclays U.S. TIPS Index1.95%1.95%-6.49%3.50%4.90%n/an/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.

Prior to May 1, 2005, the Fund had not engaged in a broad distribution effort of its shares and had been subject to limited redemption requests. The returns reflect expense limitations that were in effect during certain periods and which may have been lower than the Fund's current expenses. The returns would have been lower without such expense limitations.

Expense ratio

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursement from Nov. 27, 2013 through Nov. 28, 2014. 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 03/31/2014
Share assets$48.8 million
Number of holdings25
Effective maturity (weighted average) (view definition)10.38 years
Effective duration (weighted average) (view definition)4.88 years
Annualized standard deviation, 3 years (view definition)5.60
SEC 30-day yield with waiver (view definition)2.58%
SEC 30-day yield without waiver (view definition)2.24%
Portfolio turnover (last fiscal year)322%

The SEC 30-day yield is an SEC standardized formula based on yield to maturity of a fund’s investments over a 30-day period. The SEC yield for the Fund is the yield on the securities within the portfolio adjusted for inflation. Because the Fund has a significant investment in Treasury Inflation-Protected Securities (TIPS), it is highly influenced by the TIPS market and the monthly inflation adjustments on these securities. This 30-day yield, because of the adjustment, may be more volatile than SEC 30-day yields of funds that do not have significant holdings of TIPS, and the Fund may not be able to repeat any exceptionally high yields produced by the Fund.

Portfolio composition as of 03/31/2014Total may not equal 100% due to rounding.
U.S. government securities74.6%
Asset-backed securities19.3%
Cash and cash equivalents3.6%
Corporate bonds2.6%
Top 10 holdings as of 03/31/2014
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
United States Treasury Inflation Indexed Bonds 1.125 1/15/202117.2%
United States Treasury Inflation Indexed Bonds 0.125 1/15/202313.2%
United States Treasury Inflation Indexed Bonds 2.375 1/15/202513.0%
United States Treasury Inflation Indexed Bonds 1.375 2/15/204410.9%
United States Treasury Note/Bond 2.375 8/31/20149.1%
United States Treasury Note/Bond 3.750 11/15/20434.5%
United States Treasury Inflation Indexed Bonds 0.125 4/15/20183.5%
United States Treasury Inflation Indexed Bonds 2.500 1/15/20293.5%
VWMT 2011-1A NOTE2.9%
CABMT 2012-1A A22.6%
Total % Portfolio in Top 10 holdings80.4%

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

Top sectors as of 03/31/2014
List excludes cash and cash equivalents.
Sector% of portfolio
Treasury inflation-protected securities60.9%
Asset-backed securities19.3%
U.S. Treasury securities13.7%
High yield credits2.6%
Distribution history - annual distributions (Class A)
Distributions ($ per share)
YearCapital gainsDividends
Roger Early

Roger Early, CPA, CFA, CFP

Co-Chief Investment Officer — Total Return Fixed Income Strategy

Start date on the Fund: May 2007

(View bio)

Paul Grillo

Paul Grillo, CFA

Co-Chief Investment Officer — Total Return Fixed Income Strategy

Start date on the Fund: May 2007

(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 statutory prospectus under the section entitled "About your account," and in the Fund's statement of additional information under the section entitled "Purchasing shares."

The following table 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 fees0.45%
Distribution and service (12b-1) fees0.25%
Other expenses0.28%
Total annual fund operating expenses0.98%
Fee waivers and expense reimbursements(0.14%)
Total annual fund operating expenses after fee waivers and expense reimbursements0.84%

1The Class A shares' distribution and service (12b-1) fees have been restated 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, acquired fund fees and expenses, taxes, interest, inverse floater program expenses, short sale and dividend interest expenses, brokerage fees, certain insurance costs, 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 0.59% of the Fund's average daily net assets from Nov. 27, 2013 through Nov. 28, 2014. These waivers and reimbursements may only be terminated by agreement of the Manager or Distributor, as applicable, and the Fund.

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Delaware Inflation Protected Bond Fund Quarterly commentary March 31, 2014 Class A (DIPAX)


The first quarter of 2014 presented several hurdles to the U.S. economy and to business, consumer, and investor confidence. Ukraine tensions, China economic challenges, the Federal Reserve’s apparent consensus for a mid-2015 (or earlier) shift to a regime of policy tightening, and lingering fears of euro-zone deflation all created challenges for financial markets.

In that environment, nominal yields declined on longer-term maturities, with 10- to 30-year Treasury bonds experiencing the biggest drop in rates (30 to 40 basis points) during the period. (A basis point equals one one-hundredth of a percentage point.) Responding to a shift in Fed messaging, however, short-term rates were volatile — and higher. Accordingly, the 2-year to 10-year portion of the Treasury curve flattened by 35 basis points, to 230 basis points during the quarter.

Yields on 10-year Treasury inflation-protected securities (TIPS) mostly followed those on equivalent-maturity nominal Treasury securities as break-even inflation rates fell from 2.26% to 2.14%, and real yields fell from 0.76% to 0.58% (source: Bloomberg).

Within the Fund

For the first quarter of 2014, Delaware Inflation Protected Bond Fund (Class A shares at net asset value) generated a positive total return but underperformed its benchmark, the Barclays U.S. TIPS Index.

The TIPS market performed well during the quarter, following the 5- to 30-year part of the Treasury bond market to slightly lower yields and stronger prices. The Fund participated in this market strength; however, its defensive duration (shorter than the index) during the quarter caused performance to lag the index.

In an effort to reduce exposure to currency volatility, the Fund eliminated its exposure to non-U.S. inflation-linked bonds during the quarter. The Fund’s positioning continued to reflect our desire to avoid excessive break-even rate volatility in an environment that is experiencing lower-than-normal inflation and carries with it the potential risks of deflation.


Fed forecasts still suggest that short-term rates should stay near zero until at least late in the first half of 2015. This factor, along with a very modest inflation outlook, should help keep 10-year Treasury yields below 3.5% during 2014. Stronger-than-expected economic growth could trigger a test of this upper band, while a re-emergence of sentiment favoring a flight-to-quality and liquidity could create a rally that tests yield levels below 2.5%, or even 2.0%.

To date, market reaction to the tapering of Fed asset purchases has been rather modest. We believe that TIPS are still close to full value given the potential for a continuing softness in inflation.


The views expressed represent the Manager's assessment of the Fund and market environment as of the date indicated, and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Information is as of the date indicated and subject to change.

Document must be used in its entirety.

Prior to May 1, 2005, the Fund had not engaged in a broad distribution effort of its shares and had been subject to limited redemption requests. The returns reflect expense limitations that were in effect during certain periods and which may have been lower than the Fund's current expenses. The returns would have been lower without such expense limitations.

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.

Interest payments on inflation-indexed debt securities will vary as the principal and/or interest is adjusted for inflation.

The Fund may experience portfolio turnover in excess of 100%, which could result in higher transaction costs and tax liability.

The Funds may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivative transaction depends upon the counterparties’ ability to fulfill their contractual obligations.

International investments entail risks not ordinarily associated with U.S. investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations.

If and when the Fund invests in forward foreign currency contracts or uses other investments to hedge against currency risks, the Fund will be subject to special risks, including counterparty risk.

Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility and lower trading volume.

Diversification may not protect against market risk.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 04/16/2014)

Class APriceNet changeYTD
Max offer price$9.53n/an/a

Total net assets (as of 03/31/2014)

$114.6 million all share classes

Lipper ranking (as of 03/31/2014)

YTD ranking168 / 212
1 year200 / 206
3 years165 / 167
5 years126 / 129
10 yearsn/a
Lipper classificationInflation Protected Bond

(View Lipper disclosure)


Prospectuses and reports

Benchmark, peer group

Barclays U.S. Treasury Inflation-Protected Securities (TIPS) Index (view)

Lipper Treasury Inflation-Protected Securities (TIPS) Funds Average (view)

Additional information