Delaware International Value Equity Fund

Opportunity through adversity — international value investing at Delaware Investments

"Buying stocks that appear risky, when in fact they are far less risky than people think” is at the heart of the Global and International Value Equity team's philosophy. Watch the team elaborate on its investment process as well as the unique chemistry that helps make the team work.

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Delaware International Value Equity Fund seeks long-term growth without undue risk to principal.


The Fund invests primarily in equity securities that are organized, have a majority of their assets, or generate the majority of their operating income outside the United States, and that provide the potential for capital appreciation.

Fund information
Inception date10/31/1991
Dividends paid (if any)Annually
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 (02/28/2015)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)8.41%-1.57%7.61%6.64%3.64%6.44%10/31/1991
Max offer price2.15%-7.21%5.50%5.38%3.03%6.17%
MSCI EAFE Index (Gross)6.52%0.39%9.90%8.27%5.32%n/a
MSCI EAFE Index (Net)6.50%-0.03%9.41%7.78%4.84%n/a
Average annual total return as of quarter-end (12/31/2014)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-6.92%-8.82%-8.82%8.58%3.80%3.09%6.11%10/31/1991
Max offer price-12.26%-14.06%-14.06%6.47%2.58%2.48%5.84%
MSCI EAFE Index (Gross)-3.53%-4.48%-4.48%11.56%5.81%4.91%n/a
MSCI EAFE Index (Net)-3.57%-4.90%-4.90%11.06%5.33%4.43%n/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.

Expense ratio

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursements from March 28, 2014 to March 30, 2015. 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 02/28/2015
Number of holdings48
Market cap (median)$22.75 billion
Market cap (weighted average)$50.99 billion
Portfolio turnover (last fiscal year)26%
Beta (relative to MSCI EAFE Index (Gross)) (view definition)0.93
Annualized standard deviation, 3 years (view definition)12.54
Portfolio composition as of 02/28/2015Total may not equal 100% due to rounding.
International equities & depositary receipts99.5%
Cash and cash equivalents0.5%
Top 10 holdings as of 02/28/2015
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Novartis AG4.4%
Teva Pharmaceutical Industries Ltd.4.1%
Mitsubishi UFJ Financial Group Inc.3.7%
Nordea Bank AB3.6%
AXA S.A.3.6%
Toyota Motor Corp.3.5%
CGI Group Inc.3.1%
Nippon Telegraph & Telephone Corp.3.0%
Total % Portfolio in Top 10 holdings35.6%

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

Top 10 countries as of 02/28/2015List excludes cash and cash equivalents.
Country% of portfolio
United Kingdom11.2%
Hong Kong3.9%
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.

Ned Gray

Ned Gray, CFA

Senior Vice President, Chief Investment Officer — Global and International Value Equity

Start date on the Fund: May 2006

Years of industry experience: 28

(View bio)

Todd Bassion

Todd A. Bassion, CFA

Vice President, Portfolio Manager

Start date on the Fund: May 2006

Years of industry experience: 14

(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 expenses0.37%
Total annual fund operating expenses1.47%
Fee waivers and expense reimbursements(0.01%)
Total annual fund operating expenses after fee waivers and expense reimbursements1.46%

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 total annual fund operating expenses from exceeding 1.21% of the Fund’s average daily net assets from March 28, 2014 through March 30, 2015. These waivers and reimbursements may only be terminated by agreement of the Manager or the Distributor, as applicable, and the Fund.

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Delaware International Value Equity Fund Quarterly commentary December 31, 2014

Within the Fund

For the fourth quarter of 2014, Delaware International Value Equity Fund (Class A shares at net asset value and Institutional Class shares) lagged its benchmark, the MSCI EAFE Index, primarily due to adverse stock selection.

On a sector basis, unfavorable stock selection in telecommunications, financials, energy, and consumer staples more than offset strong stock selection in information technology and industrials. Overall sector allocation was positive due to favorable overweight exposures to consumer discretionary and information technology. On a regional basis, adverse stock selection in Europe, the United Kingdom, and Japan more than offset strong stock selection in Asia Pacific ex-Japan. Overall regional allocation was negative, with adverse exposure to Russia more than offsetting the favorable effects of exposure to Canada and an underweight exposure to the U.K.

Net currency effect was positive primarily due to favorable exposure to the U.S., Canadian, and Hong Kong dollars.

General outlook

We believe that successful value investing requires both a sharp attention to developing valuation disparities across industries and regions and a clear-eyed view to the varying levels of secular growth and cyclical mean reversion that may justify those disparities. In our previous two quarterly updates, we indicated the attractive valuations to be found in both Europe and Japan, but with the caveats that European cyclical recovery and Japanese structural improvements would likely be needed to support the expansion of those valuation metrics. In the interim, neither region has seen substantial progress on these issues, and both have lagged U.S. market performance. The United States, by contrast, after enjoying a longer and stronger market up-cycle, appeared among the most richly valued of the world’s major markets (source: MSCI).

The euro zone’s weak overall returns in U.S. dollars mask considerable variation across the region, and though overall returns were down, local investors were spared most of the decline, and thus valuations changed little. Japan’s returns in yen again put that country at the top of major market rankings for local-currency performance, up more than 6%, with a slight increase in underlying valuations (source: MSCI). In the U.S., the market gain is reflected in higher valuations.

For U.S. optimists, though these valuations appear well above historical median levels, they are still well below prior peaks and may reflect the greater stability and secular growth prospects that the U.S. currently enjoys versus many other developed as well as emerging markets. Perhaps they are right. As global stock pickers, what we find intriguing is this: in an interconnected global market, domicile does not limit opportunity. If a European multinational trades at a recessionary valuation multiple but has competitive positions in the world’s strongest growth markets, that company’s investors can enjoy the benefits of both valuation and strong fundamentals. As global equity managers taking a contrarian approach to bottom-up (stock-by-stock) security selection, we use the uncertainty of macroeconomic and valuation cycles to help bring to light what we view as attractive opportunities at the company level, because it is there, we believe, that close analysis can provide the best and most consistent returns.


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.

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 03/25/2015)

Class APriceNet changeYTD
Max offer price$14.59n/an/a

Total net assets (as of 02/28/2015)

$281.3 million all share classes

Lipper ranking (as of 02/28/2015)

YTD ranking3 / 188
1 year45 / 162
3 years83 / 130
5 years59 / 106
10 years37 / 63
Lipper classificationInternational Multi-Cap Value

(View Lipper disclosure)

Benchmark, peer group

MSCI EAFE (Europe, Australasia, Far East) Index (view)

Lipper International Multi-Cap Value Funds Average (view)

Additional information