Delaware Dividend Income Fund


Delaware Dividend Income Fund seeks to provide high current income and an investment that has the potential for capital appreciation.


The Fund invests primarily in income generating securities (debt and equity), which may include equity securities of large, well-established companies, and debt securities, including high yield, high-risk corporate bonds, investment grade fixed income securities, and U.S. government securities.

Fund information
Inception date12/02/1996
Dividends paid (if any)Monthly
Capital gains paid (if any)November or 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 (06/30/2015)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-0.46%0.36%10.97%11.54%6.20%8.08%12/02/1996
Max offer price-6.18%-5.38%8.78%10.22%5.57%7.73%
S&P 500 Index1.23%7.42%17.31%17.34%7.89%n/a
Average annual total return as of quarter-end (06/30/2015)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-1.91%-0.46%0.36%10.97%11.54%6.20%8.08%12/02/1996
Max offer price-7.56%-6.18%-5.38%8.78%10.22%5.57%7.73%
S&P 500 Index0.28%1.23%7.42%17.31%17.34%7.89%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.

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
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
Portfolio characteristics - as of 06/30/2015
Number of holdings465
Market cap (median)$10.42 billion
Market cap (weighted average)$71.18 billion
Portfolio turnover (last fiscal year)56%
Beta, 3 years (relative to S&P 500 Index) (view definition)0.63
Annualized standard deviation, 3 years (view definition)5.87
SEC 30-day yield with waiver (view definition)2.18%
SEC 30-day yield without waiver (view definition)2.18%
Portfolio composition as of 06/30/2015Total may not equal 100% due to rounding.
Large cap value52.4%
High yield bonds16.9%
Cash and cash equivalents11.1%
Convertible securities10.1%
Real estate7.6%
Top 10 holdings as of 06/30/2015
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Baxter International Inc.1.4%
Occidental Petroleum Corp.1.4%
AT&T Inc.1.3%
Mondelez International Inc.1.3%
CVS Health Corp.1.3%
Kraft Foods Group Inc.1.3%
BB&T Corp.1.3%
Bank of New York Mellon Corp.1.3%
Northrop Grumman Corp.1.3%
Quest Diagnostics Inc.1.3%
Total % Portfolio in Top 10 holdings13.2%

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

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.

Bob Zenouzi

Bob Zenouzi 

Senior Vice President, Chief Investment Officer — Real Estate Securities and Income Solutions (RESIS)

Start date on the Fund: May 2006

Years of industry experience: 29

(View bio)

Damon Andres

Damon J. Andres, CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: December 1996

Years of industry experience: 24

(View bio)

Wayne Anglace

Wayne A. Anglace, CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: March 2010

Years of industry experience: 17

(View bio)

Kristen Bartholdson

Kristen E. Bartholdson 

Vice President, Senior Portfolio Manager

Start date on the Fund: December 2008

Years of industry experience: 15

(View bio)

Craig Dembeck

Craig C. Dembek, CFA

Senior Vice President, Co-Head of Credit Research, Senior Research Analyst

Start date on the Fund: December 2012

Years of industry experience: 21

(View bio)

Ned Gray

Ned A. Gray, CFA

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

Start date on the Fund: March 2011

Years of industry experience: 29

(View bio)

Nik Lalvani

Nikhil G. Lalvani, CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: October 2006

Years of industry experience: 18

(View bio)

Anthony Lombardi

Anthony A. Lombardi, CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: March 2005

Years of industry experience: 26

(View bio)

Paul Matlack

Paul A. Matlack, CFA

Senior Vice President, Senior Portfolio Manager, Fixed Income Strategist

Start date on the Fund: December 2012

Years of industry experience: 30

(View bio)

John McCarthy

John P. McCarthy, CFA

Senior Vice President, Co-Head of Credit Research, Senior Research Analyst

Start date on the Fund: December 2012

Years of industry experience: 28

(View bio)

Ty Nutt

Ty Nutt  

Senior Vice President, Senior Portfolio Manager, Team Leader

Start date on the Fund: March 2005

Years of industry experience: 32

(View bio)

Christopher Testa

Christopher M. Testa, CFA

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: June 2014

Years of industry experience: 28

(View bio)

Bob Vogel

Robert A. Vogel Jr., CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: March 2005

Years of industry experience: 23

(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 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 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 fees0.64%
Distribution and service (12b-1) fees0.25%
Other expenses0.21%
Total annual fund operating expenses1.10%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements1.10%

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Delaware Dividend Income Fund Quarterly commentary March 31, 2015

Within the Fund

For the first quarter of 2015, Delaware Dividend Income Fund (Institutional Class shares and Class A shares at net asset value) outperformed its benchmark, the S&P 500® Index.

Large-cap value equity

Within the large-cap value equity portion of the Fund, investments in consumer staples and industrials contributed the most to performance. The big story in consumer staples was Kraft Foods Group. In late March, the company agreed to merge with H.J. Heinz in a deal led by 3G Capital and Berkshire Hathaway. Kraft shares rose 35% on the day of the announcement and were up 39% for the quarter. We’ll want to get a better idea of the valuation of the new company to see if there’s a compelling reason to own the shares over the long term. In industrials, each of the three stocks outperformed, led by defense contractor Northrop Grumman, up 9.7%. The company reported solid quarterly results and raised its full-year guidance for both sales and per-share earnings.

Investments in materials and energy caused the largest drags on returns. The one materials sector holding, specialty chemical company DuPont, trailed the broader sector, -2.7% versus 0.5%. An overweight allocation in energy detracted from the large-cap value portfolio of the Fund.

Real estate investment trusts (REITs)

Within the equity real estate investment trust (REIT) portion of the Fund, investments in the retail, shopping centers, and apartments sectors detracted most from performance during the quarter.  Wheeler Real Estate Investment Trust in the retail sector was the bottom performer among the Fund’s REIT holdings. In addition, poor stock selection in shopping centers and apartments, along with an unhelpful underweight in the strong-performing apartments sector, hurt performance.

Stock selection in the specialty, mixed, and industrial REIT sectors aided performance. In the mixed sector, CyrusOne, a data center owner and operator, and Duke Realty, a company that owns industrial and medical office properties, had strong quarters. Duke Realty has transformed itself over the past five years. Historically, Duke had been a Midwest suburban office company. Recognizing the low growth of that asset class, the company began investing in higher-growth medical office and industrial properties. Today, its exposure to suburban offices is just 15% of total assets.

International value equity

The Fund’s international value equity portion performed well during the quarter due to strong stock selection and favorable regional and sector allocation. Positive stock selection in financials, information technology, and telecommunications more than offset weakness in consumer staples and industrials. Sector allocation was positive primarily due to a favorable underweight exposure to utilities. On a regional basis, strong stock selection in Japan and the United Kingdom more than offset weakness in continental Europe. Regional allocation was positive primarily due to an underweight exposure to the U.K. and strong performance by emerging market holdings. Net currency effect was negative primarily due an adverse exposure to the Canadian dollar.

Fixed income

Within the Fund’s high yield bond portion, top sector contributors were media, retail, and utilities, while the top individual contributors were Calumet Specialty Products (refining), Northern Oil and Gas (exploration and production), and Wind Telecommunications (European wireless provider). Calumet Specialty Products and Northern Oil advanced as a result of stronger-than-expected earnings reported during the period. Wind Telecommunications advanced on the announcement of a partial tender for its bonds.

Conversely, the largest sector detractors were energy, leisure, and telecommunications. The biggest individual detractors were Intelsat (satellite operator), CHC Helicopter (oilfield services), and Ocean Rig (offshore drilling services). Intelsat declined due to lower-than-expected 2015 forward guidance, while CHC Helicopter and Ocean Rig declined due to persistently low energy prices and slowing drilling activity.

The Fund’s portion in emerging market debt had a slight negative effect on performance for the quarter. Emerging market investments remain challenged by the significant move in both currencies and commodities.


Moving into the second quarter of 2015, several notable themes, possibilities, and developments bear monitoring. These include the following:

  • Despite its modest return in the first quarter of 2015, the broad U.S. market has made substantial gains since bottoming in March 2009. The annualized total return for the S&P 500 Index for the six years ended March 31, 2015 has been 19.7%. Given our belief that higher starting valuations lead to lower long-term returns, we’re anticipating mid-single-digit annualized returns over the next five-plus years. Near term, the market environment appears more uncertain to us. In any event, we think owning what we view as higher-quality U.S. stocks with attractive valuations and favorable risk/reward profiles gives us a better chance to deliver competitive returns.
  • REITs have continued to rise, propelled by low rates, limited supply, and investors’ seemingly unquenchable thirst for yield. With interest rates even lower in Europe and Japan, the result has been a global rally in real estate securities. Many companies can now cross borders and raise cheap capital, even after paying to hedge foreign currencies against the strong dollar. We believe that our philosophy — that it’s important to understand the cost and availability of debt and equity capital — is being adopted by others on a global scale. Investors who have been waiting for real estate fundamentals to improve missed the first quarter gains in European real estate markets. Regardless of the region, we believe a balanced approach to capital markets and real estate analysis is prudent in identifying under- and overvaluation in real estate securities.
  • The United States is the relative star in an environment of historically low global bond yields and weak economic growth, implying sustained demand for U.S. credit and the potential for reasonably rapid recoveries from market declines. Credit metrics remain sound outside of commodity-based companies, and barring a significant and sustained rise in leveraged buyout (LBO) activity or an unexpected U.S. slowdown, we believe baseline returns for high yield bonds should continue to be centered on the coupon.

In light of these circumstances, we believe there is a strong argument for seeking companies that, in our view, have most or all of the following characteristics: they (1) appear undervalued, (2) have strong cash flows, (3) maintain manageable debt levels, (4) operate diversified businesses, and (5) have a history of delivering consistent dividends.

Diversification may not protect against market risk.


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.

The Fund may invest up to 45% of its net assets in high yield, higher-risk corporate bonds.

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.

High yielding, noninvestment grade bonds (junk bonds) involve higher risk than investment grade bonds.

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.

All third-party marks cited are the property of their respective owners.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 07/29/2015)

Class APriceNet changeYTD
Max offer price$14.26n/an/a

Total net assets (as of 06/30/2015)

$791.6 million all share classes

Lipper ranking (as of 06/30/2015)

YTD ranking450 / 590
1 year195 / 537
3 years63 / 388
5 years42 / 247
10 years38 / 115
Lipper classificationFlexible Portfolio Funds

(View Lipper disclosure)

Benchmark, peer group

S&P 500® Index (view definition)

Lipper Flexible Portfolio Funds Average (view definition)

Additional information