Delaware Foundation® Moderate Allocation Fund


Delaware Foundation Moderate Allocation Fund seeks capital appreciation with current income as a secondary objective.


The Fund invests in a combination of underlying securities, using an active allocation approach and representing a variety of asset classes and investment styles that are managed by the advisor.

Fund information
Inception date12/31/1997
Dividends paid (if any)Quarterly
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 (08/31/2014)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)5.82%14.41%10.21%10.19%7.01%5.33%12/31/1997
Max offer price-0.28%7.83%8.05%8.89%6.38%4.95%
Barclays U.S. Aggregate Index4.81%5.66%2.91%4.48%4.72%n/a
S&P 500 Index9.89%25.25%20.61%16.88%8.38%n/a
Average annual total return as of quarter-end (06/30/2014)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)4.00%5.25%15.99%8.23%11.94%6.82%5.35%12/31/1997
Max offer price-1.95%-0.82%9.29%6.12%10.62%6.19%4.97%
Barclays U.S. Aggregate Index2.04%3.93%4.37%3.66%4.85%4.93%n/a
S&P 500 Index5.23%7.14%24.61%16.58%18.83%7.78%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 Jan. 28, 2014 through Jan. 28, 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 08/31/2014
Share assets$206.1 million
Number of holdings1,387
Portfolio turnover (last fiscal year)135%
Annualized standard deviation, 3 years (view definition)8.18
SEC 30-day yield with waiver (view definition)1.45%
SEC 30-day yield without waiver (view definition)1.40%
Asset allocations* (as of June 30, 2014)
  Range Strategic policy weight Actual**
Equity asset class (total) 40-70% 60% 61.1%
U.S. equity asset class 10-40% 30% 31.6%
U.S. Large Cap Core     6.8%
U.S. Large Cap Growth     10.2%
U.S Large Cap Value     10.3%
U.S. Small Cap Core     4.3%
International equity asset class 10-40% 22.5% 18.9%
International Growth     8.3%
International Value     10.6%
Global real estate equity asset class 0-15% 0% 1.9%
U.S. real estate     1.9%
Global ex-U.S. real estate     0.0%
Emerging markets asset class 0-15% 7.5% 8.7%
Fixed income asset class (total) 30-60% 40% 39.2%
Diversified fixed income asset class 30-60% 40% 39.2%
Diversified fixed income 20-50% 38% 38.8%
Money market / cash equivalents 0-15% 2% 0.4%

*The percentages listed in this chart for "Range," "Strategic policy weight," and "Actual" represent the proportion of the Fund's assets allocated to the portfolio manager responsible for investing in a particular asset class or investment style. Each individual manager is responsible for determining how his or her assets are invested, subject to the constraints outlined in the Fund's prospectus. The "Range" and "Strategic policy weight" are as of the prospectus date. 

**Total may not equal 100% due to rounding.

Top 10 holdings as of 08/31/2014
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Microsoft Corp.0.8%
Celgene Corp.0.7%
Teva Pharmaceutical Industries Ltd.0.7%
EOG Resources Inc.0.6%
Baidu Inc.0.6%
Novartis AG0.5%
Allergan Inc.0.5%
Visa Inc.0.5%
MasterCard Inc.0.5%
Total % Portfolio in Top 10 holdings6.0%

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 is only provided from June 1, 2014 onward.

3Includes both short- and long-term capital gains.

Jackson Square Partners, LLC (JSP) is the sub-advisor to the Fund’s U.S. large-cap growth sleeve. As sub-advisor, JSP is responsible for day-to-day management of its portion of the Fund’s assets. Although JSP serves as sub-advisor, the investment manager, Delaware Management Company, a series of Delaware Management Business Trust, has ultimate responsibility for all investment advisory services with JSP.

Mike Hogan

Michael J. Hogan, CFA

Executive Vice President, Head of Equity Investments

Start date on the Fund: June 2007

Years of industry experience: 27

(View bio)

Paul Grillo

Paul Grillo, CFA

Senior Vice President, Co-Chief Investment Officer — Total Return Fixed Income Strategy

Start date on the Fund: September 2008

Years of industry experience: 33

(View bio)

Sharon Hill

Sharon Hill, Ph.D.

Senior Vice President, Head of Equity Quantitative Research and Analytics

Start date on the Fund: September 2008

Years of industry experience: 16

(View bio)

Francis X. Morris

Francis X. Morris 

Senior Vice President, Chief Investment Officer – Core Equity

Start date on the Fund: May 2004

Years of industry experience: 31

(View bio)

Bob Zenouzi

Bob Zenouzi 

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

Start date on the Fund: September 2008

Years of industry experience: 28

(View bio)

Investment manager

Delaware Management Company, a series of Delaware Management Business Trust


Jackson Square Partners, LLC

Jeff VanHarte

Jeffrey S. Van Harte, CFA

Chairman, Chief Investment Officer — Jackson Square Partners, LLC

Start date on the Fund: May 2014

Years of industry experience: 33

(View bio)

Chris Bonavico

Christopher J. Bonavico, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: May 2014

Years of industry experience: 26

(View bio)

Chris Ericksen

Christopher M. Ericksen, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: May 2014

Years of industry experience: 20

(View bio)

Daniel J. Prislin, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: May 2014

Years of industry experience: 21

(View bio)

Jackson Square Partners, LLC (JSP) is the sub-advisor to the Fund’s U.S. large-cap growth sleeve. As sub-advisor, JSP is responsible for day-to-day management of its portion of the Fund’s assets. Although JSP serves as sub-advisor, the investment manager, Delaware Management Company, a series of Delaware Management Business Trust, has ultimate responsibility for all investment advisory services with JSP.

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 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 fees0.65%
Distribution and service (12b-1) fees0.25%
Other expenses0.32%
Total annual fund operating expenses1.22%
Fee waivers and expense reimbursements(0.07%)
Total annual fund operating expenses after fee waivers and expense reimbursements1.15%

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, 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 0.90% of the Fund's average daily net assets from Jan. 28, 2014 through Jan. 28, 2015. These waivers and reimbursements may only be terminated by agreement of the Manager or Distributor, as applicable, and the Fund. Additionally, the Fund's Class A shares are subject to a blended 12b-1 fee of 0.10% on all shares acquired prior to June 1, 1992, and 0.25% on all shares acquired on or after June 1, 1992.

Delaware Foundation® Moderate Allocation Fund Quarterly commentary June 30, 2014 Class A (DFBAX)

View printable commentary E-mail this page

This commentary is currently not available. Please check back later.

Economic overview

During the second quarter of 2014, there was a modest improvement in both business confidence and consumer confidence around the globe. The Organization for Economic Cooperation and Development (OECD) compiles composite leading indicators to reflect business and consumer confidence for individual member countries and for the whole organization. The most recently available data indicate that during the quarter, business confidence and consumer confidence rose in most developed economies. In Europe, the rise in consumer confidence was larger than the improvement in business confidence, whereas in the United States the converse was true.

The International Monetary Fund (IMF) maintains and regularly updates a set of short-term forecasts covering the global economy and individual countries and regions. As of the date of this commentary, the most recent IMF projections were those issued in April 2014, which were also discussed in the commentary for the first quarter of 2014. The IMF continues to believe that that in many developed countries, inflation is low, output gaps are large, and fiscal consolidation is continuing. In the IMF’s view, monetary authorities need to continue providing support while economic recovery is not fully secure.

Projected economic growth rate 2014 estimate 2015 estimate
Oct 2013 Apr 2014 Oct 2013 Apr 2014
World 3.6% 3.6% 3.9% 3.9%
Advanced economies 2.0% 2.2% 2.5% 2.3%
United States 2.6% 2.8% 3.4% 3.0%
Euro area 1.0% 1.2% 1.3% 1.5%
Japan 1.2% 1.4% 1.2% 1.0%
United Kingdom 1.9% 2.9% 2.0% 2.5%
Emerging and developing economies 5.1% 4.9% 5.3% 5.3%
Brazil 2.5% 1.8% 3.2% 2.7%
China 7.3% 7.5% 7.1% 7.3%
India 5.1% 5.4% 6.3% 6.4%
Russia 3.0% 1.3% 3.5% 2.3%

Source: International Monetary Fund, World Economic Outlook, October 2013 and April 2014

The currency markets experienced some movement during the second quarter of 2014. The Delaware Foundation Funds® generally focus on trade-weighted currencies, which represent a composite value relative to each country’s major trading partners. The second quarter continued the pattern from the first quarter, in which the trade-weighted British pound and the trade-weighted yen both strengthened, while the trade-weighted euro weakened. However, whereas the trade-weighted dollar had strengthened slightly during the first quarter, it weakened a little during the second quarter. In general, an economy’s competitiveness tends to be enhanced by currency depreciation, and tends to be impaired by currency appreciation.

Trade-weighted currency Source 3/31/14 6/30/14 Change
U.S. dollar (USD) U.S. Treasury via Bloomberg 80.1 79.8 -0.5%
Euro (EUR) Bank of England via Bloomberg 97.0 95.7 -1.3%
Sterling (GBP) Bank of England via Bloomberg 85.4 87.7 +2.6%
Japanese yen (JPY) Bank of England via Bloomberg 135.5 137.7 +1.5%

Source: Bloomberg, July 2014

The prices of many commodities rose during the second quarter. There were increases in the Thomson Reuters/CoreCommodity CRB Index and the S&P GSCI® Index, which are both broad commodity indices, and also in the spot prices of crude oil and gold. All else equal, we believe a rise in commodity prices is likely to mean better profits for materials companies, but lower margins for industrials companies.

Category Benchmark 3/31/14 6/30/14 Change
Broad commodities S&P GSCI 648.9 658.6 +1.5%
Broad commodities Thomson Reuters/CoreCommodity CRB Index 304.7 308.2 +1.2%
Crude oil West Texas Intermediate spot 101.58 105.37 +3.7%
Gold New York spot price 1284.01 1327.32 +3.4%

Source: Bloomberg, July 2014

The available statistical data suggest that the U.S. economy continued to expand during the quarter. The Federal Reserve’s “beige book,” covering the period ending May 2014, reported that consumer spending and manufacturing had increased in most districts. The Fed also reported that conditions were improving in both residential and commercial real estate. The Bureau of Labor Statistics (BLS) of the U.S. Commerce Department estimated that the seasonally adjusted U.S. unemployment rate in June 2014 was 6.1%, down from the 6.7% level that was reported for March 2014.

Market overview

During the second quarter of 2014, all of the major indices that we track produced positive total returns. The strongest performing benchmark was emerging market equities, followed by U.S. large-cap growth and value equities, and developed market value equities. Global fixed income investment grade securities generated stronger returns than their U.S. peers during the quarter.

Style Benchmark Index return for 2Q14 (in USD)
U.S. large-cap growth Russell 1000® Growth Index +5.1%
U.S. large-cap value Russell 1000® Value Index +5.1%
U.S. small-cap  Russell 2000® Index  +2.0%
International growth MSCI EAFE Growth Index (gross) +3.7%
International value MSCI EAFE Value Index (gross) +5.0%
Emerging markets MSCI Emerging Markets Index (gross) +6.7%
U.S. fixed income Barclays U.S. Aggregate Index
Global fixed income Barclays Global Aggregate Index

Sources: Bloomberg, Barclays, MSCI, and Russell, July 2014

Within the Funds

The Asset Allocation Committee’s decisions are taken collectively, and the weightings assigned to individual asset classes reflect the consensus of opinion across the Committee. Sentiment across the Committee weakened during the quarter, resulting in a decision to reduce slightly the tactical allocation to emerging market equities. In addition, the Committee decided to partially hedge exposure to global equity markets by means of short positions in equity index futures. The portfolios remain overweight in fixed income securities and emerging market equities, underweight in international growth and international value, and roughly neutral in U.S. equities, though with a greater allocation to the concentrated large-cap growth and large-cap value sleeves.

Relative to strategic policy weights
Asset class Comment Underweight Neutral Overweight
U.S. large-cap core Remain broadly diversified
U.S. large-cap growth Underweight energy, industrials
U.S. large-cap value Underweight financials
U.S. small-cap core Remain broadly diversified
International growth Low active weights by sector and region
International value Underweight financials
Emerging markets Underweight financials
Diversified fixed income Focusing on corporates and selective opportunities in high yield
Cash and cash equivalents Yields continue to be quite low

Notes: The graphic above is based on tactical positions of Delaware Foundation Funds relative to the strategic policy weights for each Fund, with tactical and strategic weights adjusted by total assets under management (AUM) in each Fund, and breakpoints at 0.5%, 1%, and 3%; weights reflect tactical positioning as of June 30, 2014; actual sleeve weights may deviate from tactical weights due to different rates of asset appreciation and other factors; tactical weights may vary from time to time, and Delaware Investments makes no commitment to update this information in a timely manner; tactical weights are provided for information purposes only and should not be construed as asset allocation advice.

The Funds also continued to be underweight in cash, reflecting the low yields currently available for cash-like instruments. Within the equity sleeves, most of the investment teams remained underweight in financial sector stocks during the quarter, reflecting their continued concern about the risks associated with these securities. Conversely, the majority of the equity investment teams continued to be overweight in technology and healthcare during the quarter.


As noted above, business sentiment and consumer sentiment in many developed economies generally improved during the second quarter of 2014. The Committee continues to believe that global economic recovery will likely require consumers to begin spending more freely, and the Fed’s beige book indicates continuing evidence that this is occurring in the U.S. economy, despite falling public-sector expenditures. There is still good reason to be apprehensive about the economic outlook for Europe, where austerity-based policies have generally been associated with deteriorating conditions. There is also some justification for mild concern about the current political situation in the U.S., where certain political actors appear decreasingly willing to maintain the historical commitment to compromise among the different branches of government. However, the Committee continues to believe that the global economy is gradually moving toward more normal conditions.

As described above, the Delaware Foundation Funds continue to have a slightly defensive position relative to their strategic policy weights. Nevertheless, the Committee continues to believe that the global macroeconomic environment may continue to improve, though probably at a rather slow pace. The market fluctuations of the past few years have tended to confirm the Committee’s view that over the medium term, the Funds’ commitment to global diversification may prove beneficial, as participating in a large number of different markets may help reduce the risk that any single market might deliver disappointing performance during any particular period.


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.

This Fund is subject to the same risks as the underlying styles in which it invests.

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.

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.

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.

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

Risk controls and asset allocation models do not promise any level of performance or guarantee against loss of principal. Each Fund has a different level of risk.

Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors.

REIT investments are subject to many of the risks associated with direct real estate ownership, including changes in economic conditions, credit risk, and interest rate fluctuations.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 09/29/2014)

Class APriceNet changeYTD
Max offer price$13.50n/an/a

Total net assets (as of 08/31/2014)

$345.5 million all share classes

Lipper ranking (as of 08/31/2014)

YTD ranking256 / 537
1 year234 / 525
3 years238 / 449
5 years162 / 394
10 years58 / 257
Lipper classificationMixed-Asset Target Allocation Moderate

(View Lipper disclosure)

Benchmark, peer group

S&P 500® Index (view)

Barclays U.S. Aggregate Index (view)

Lipper Mixed-Asset Target Allocation Moderate Funds Average (view)

Additional information