Delaware Focus Global Growth Fund

Objective

Delaware Focus Global Growth Fund seeks long-term capital appreciation.

Strategy

The Fund invests primarily in common stocks of U.S. and non-U.S. companies, which may include companies located or operating in developed or emerging markets. Under normal circumstances, the Fund will invest in equity securities of issuers located throughout the world, including the United States, and the Fund will invest at least 40% of its net assets in non-U.S. securities. The Fund may invest in companies across all market capitalizations but will primarily invest in mid- and large-cap equity securities.

Fund information
Inception date12/29/2008
Dividends paid*Annually
Capital gains paid*Annually

*If any.

Fund identifiers
NASDAQDGGAX
CUSIP246118541
Investment minimums
Initial investment$1,000
Subsequent Investments$100
Systematic withdrawal balance$5,000
Account features
CheckwritingNo
Payroll DeductionYes
IRAsYes

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)-1.34%15.46%10.29%21.07%n/a20.14%12/29/2008
Max offer pricen/a8.81%8.14%19.65%n/a18.79%
MSCI World Index (Gross)1.40%19.72%10.86%18.94%n/an/a
MSCI World Index (Net)1.26%19.07%10.23%18.28%n/an/a
Average annual total return as of quarter-end (03/31/2014)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-1.34%-1.34%15.46%10.29%21.07%n/a20.14%12/29/2008
Max offer price-7.00%-7.00%8.81%8.14%19.65%n/a18.79%
MSCI World Index (Gross)1.40%1.40%19.72%10.86%18.94%n/an/a
MSCI World Index (Net)1.26%1.26%19.07%10.23%18.28%n/an/a

Returns for less than one year are not annualized.

Class A shares have a maximum up-front sales charge of 5.75% 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.

Prior to Dec. 29, 2010, the Fund had not engaged in a broad distribution of its shares and had been subject to limited redemption requests. The returns reflect expense limitations that were in effect during certain periods and that may have been lower than the Fund's current expenses. The returns would have been lower without the expense limitations.

Expense ratio
Gross1.51%
Net1.51%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
2014-1.34%n/an/an/an/a
20135.38%-1.60%10.56%7.58%23.33%
201216.54%-6.50%5.40%2.37%17.57%
20114.13%3.42%-15.41%7.21%-2.34%
20104.40%-8.51%18.42%8.25%22.44%
2009-0.46%21.59%15.55%8.24%51.36%
Portfolio characteristics - as of 03/31/2014
Share assets$48.7 million
Number of holdings38
Market cap (median)$21.90 billion
Market cap (weighted average)$62.43 billion
Portfolio turnover (last fiscal year)36%
P/E ratio (weighted average trailing 12 months) (view definition)28.17x
Beta (relative to MSCI World Index (Gross)) (view definition)1.03
Annualized standard deviation, 3 years (view definition)15.14
Portfolio composition as of 03/31/2014Total may not equal 100% due to rounding.
Domestic equities53.0%
International equities & depository receipts44.4%
Cash and cash equivalents2.6%
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
priceline.com Inc.3.9%
QUALCOMM Inc.3.7%
MasterCard Inc.3.6%
Microsoft Corp.3.4%
Core Laboratories NV3.3%
Celgene Corp.3.2%
VeriFone Systems Inc.3.2%
eBay Inc.3.1%
EOG Resources Inc.3.1%
Google Inc.3.1%
Total % Portfolio in Top 10 holdings33.6%

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

Top 10 countries as of 03/31/2014List excludes cash and cash equivalents.
Country% of portfolio
United States53.0%
United Kingdom14.7%
Japan6.5%
Switzerland4.8%
Brazil4.1%
Denmark2.7%
France2.6%
Spain2.4%
India2.3%
Finland2.2%
Distribution history - annual distributions (Class A)
Distributions ($ per share)
YearCapital gainsDividends
20140.0000.000
20130.3230.000
20120.0000.000
20110.1110.000
20100.4060.028
20091.1700.027
20080.0000.000
20070.0000.000
20060.0000.000
20050.0000.000
20040.0000.000
Greg Heywood

Gregory M. Heywood, CFA

Portfolio Manager, Equity Analyst

Start date on the Fund: December 2008

(View bio)


Patrick Fortier

Patrick G. Fortier, CFA

Portfolio Manager, Equity Analyst

Start date on the Fund: December 2008

(View bio)


Chris Bonavico

Christopher J. Bonavico, CFA

Senior Portfolio Manager, Equity Analyst

Start date on the Fund: December 2008

(View bio)


You may qualify for sales-charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 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 (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 price5.75%
Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lowernone
Annual fund operating expenses
Management fees0.85%
Distribution and service (12b-1) fees0.25%
Other expenses0.41%
Total annual fund operating expenses1.51%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements1.51%

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, taxes, interest, short sale and dividend interest expenses, brokerage fees, certain insurance costs, acquired fund fees and expenses, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) in order to prevent annual fund operating expenses from exceeding 1.30% of the Fund's average daily net assets from March 28, 2014 through March 30, 2015. This waiver and/or reimbursement may only be terminated by agreement of the Manager and the Fund.

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Delaware Focus Global Growth Fund Quarterly commentary March 31, 2014 Class A (DGGAX)

Within the Fund

For the first quarter of 2014, Delaware Focus Global Growth Fund (Class A shares at net asset value) posted a negative return and underperformed its benchmark, the MSCI World Index (net). Strong relative performance in the energy sector was unable to overcome weak relative performance in the financials and consumer discretionary sectors.

VeriFone Systems was a strong contributor to performance during the quarter.The company reported financial results that beat consensus expectations and continues to recover after a period of fundamental difficulty. We believe management is showing solid execution in the company’s international expansion as well as realizing synergies from recent strategic initiatives. Additionally, the company could see some upside as the industry moves towards more secure payment methods in the wake of several high profile credit card “hacking” incidents that could require customers to upgrade point of sale terminals with tighter security standards and capabilities.

Novo Nordisk also contributed to performance during the quarter. The company is a leading developer, manufacturer, and marketer of diabetes drug care. The stock performed well during the quarter as the company reported fourth quarter financial results that beat consensus expectations. We believe the company should continue to see a growing need for its products — diabetes is growing globally due to rising obesity rates in developing markets and a growing middle class in the emerging markets, which tends to result in a more protein-based diet.

EOG Resources was a strong contributor to performance during the quarter. In our view, company is well positioned to provide exposure to the North American shale oil and gas industry, which we believe is an attractive secular growth area in energy. While the stock benefited from natural gas prices rising to a four-year high during the period, it's important to note that although the stock can, at times, be affected by fluctuations in the price of oil and natural gas, we don't believe that the company's long-term intrinsic business value is dependent solely on commodity prices. Rather, we believe that the company's management team has a unique capital allocation discipline relative to other energy companies that increases its potential to perform and add value through a variety of commodity prices and economic environments.

NeuStar detracted from performance during the quarter. The stock declined as the approval process allowing the company to remain the sole database provider of cell phone numbers and other related information for the North American wireless carrier industry is still in negotiations. We believe NeuStar will likely get approval to renew its contract in the first half of 2014, but there is more uncertainty surrounding the process than investors originally expected. We believe the company has attractive business model characteristics and an attractive cash flow-based valuation; however, we trimmed the Fund’s weight in the position to account for a higher risk profile.

Celgene detracted from the Fund’s performance during the quarter. The company is a leading player in the treatment of blood cancers, and has a growing product pipeline in breast, lung, and pancreatic cancer. The stock experienced weakness as investors may have looked to lock in gains after the company reported somewhat underwhelming fourth quarter financial results and forward guidance. Additionally, the company received an unfavorable preliminary decision from British regulators for expanded use of one of the company’s drug products as well as the prospect of an early patent expiration on that same drug. We feel investors may have overreacted to recent developments — we continue to believe Celgene has the potential to benefit from large growth prospects driven by additional indications of its drugs, by increased usage of existing drugs, and by international growth opportunities.

Finally, Pearson, a U.K.-based publisher of education textbooks and learning materials, detracted from performance during the quarter. The stock fell as the company reported financial results that showed decreases in operating profits and margins. The company is currently undergoing a long-term strategic transformation from all paper-based products to an increasing percentage of digital content. We believe the transition could, in time, result in more attractive financial characteristics and also move them in-line with long-term secular trends in the education industry. However, the transition may take longer than originally anticipated — therefore we exited the Fund’s position in order to allocate to what we viewed as more attractive opportunities.

Outlook

Despite positive absolute returns in the equity market during the past few years, we believe the many short-term swings in market sentiment demonstrate that there are more than just fundamental factors affecting stock prices. Rather, recent equity market volatility suggests to us that many investors appear to be struggling with accurately predicting the pace of global economic recovery and are assessing factors that threaten economic fundamentals (for example, central bank actions and fiscal policy debates across the globe). While some fundamentals in various geographies may be trending in a positive direction (from a very low base during the global financial crisis in 2008-2009), we don’t believe we are entering into a typical post-recessionary global boom cycle. Rather, we believe the lingering effects of the credit crisis years ago could lead to moderate growth, at best. In such a tenuous environment, we believe the quality of a company’s business model, competitive position, and management may prove to be of utmost importance.

Regardless of the economic outcome, we remain consistent in our long-term investment philosophy: We want to own what we view as strong secular-growth companies with solid business models and competitive positions that we believe can grow market share and have the potential to deliver shareholder value in a variety of market environments.

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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.

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.

Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.

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.

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

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 04/23/2014)

Class APriceNet changeYTD
NAV$19.22-0.01-0.88%
Max offer price$20.39n/an/a

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

$123.2 million all share classes

Overall Morningstar RatingTM

Load waived

With load

Class A shares (as of 03/31/2014)

Load waivedWith loadNo. of funds
Overall43804
3 Yrs32804
5 Yrs44642
Morningstar categoryWorld Stock

(View Morningstar disclosure)

Lipper ranking (as of 03/31/2014)

YTD ranking204 / 236
1 year181 / 226
3 years62 / 179
5 years23 / 124
10 yearsn/a
Lipper classificationGlobal Multi-Cap Growth

(View Lipper disclosure)

Literature

Prospectuses and reports

Benchmark, peer group

MSCI World Index (view)

Lipper Global Multi-Cap Growth Funds Average (view)

Additional information