Delaware Mid Cap Value Fund


 Delaware Mid Cap Value Fund seeks capital appreciation. 


The Fund invests primarily in investments of medium-sized companies whose stock prices appear low relative to their underlying value or future potential. 

Fund information
Inception date02/01/2008
Dividends paid (if any)Annually
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

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)2.97%7.86%13.25%13.52%n/a7.57%02/01/2008
Max offer price-2.99%1.59%11.04%12.17%n/a6.67%
Russell Midcap Value Index2.61%13.63%19.57%17.53%n/an/a
Average annual total return as of quarter-end (12/31/2014)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)3.03%6.71%6.71%15.87%13.35%n/a7.29%02/01/2008
Max offer price-2.87%0.55%0.55%13.62%12.00%n/a6.37%
Russell Midcap Value Index6.05%14.75%14.75%21.98%17.43%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.

Prior to July 31, 2008, 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 which may have been lower than the Fund’s current expenses. The returns would have been lower without expense limitations.

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

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursements from Feb. 27, 2015 through Feb. 29, 2016. 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 holdings83
Market cap (median)$7.24 billion
Market cap (weighted average)$12.54 billion
Portfolio turnover (last fiscal year)28%
Beta - (relative to Russell Midcap Value Index) (view definition)1.05
Annualized standard deviation, 3 years (view definition)11.00
Portfolio composition as of 02/28/2015Total may not equal 100% due to rounding.
Domestic equities97.6%
Cash and cash equivalents1.4%
International equities & depositary receipts1.0%
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
East West Bancorp Inc.2.9%
American Financial Group Inc.2.7%
United Rentals Inc.2.3%
Torchmark Corp.2.1%
Fiserv Inc.2.1%
Comerica Inc.2.1%
Cytec Industries Inc.2.0%
HCC Insurance Holdings Inc.2.0%
Raymond James Financial Inc.2.0%
Reinsurance Group of America Inc.1.9%
Total % Portfolio in Top 10 holdings22.1%

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

Top sectors as of 02/28/2015
List excludes cash and cash equivalents.
Sector% of portfolio
Financial Services22.7%
Health Care10.1%
Basic Industry9.2%
Consumer Services8.2%
Capital Spending6.4%
Consumer Cyclical4.9%
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.

Chris Beck

Christopher S. Beck, CFA

Senior Vice President, Chief Investment Officer — Small-Cap Value / Mid-Cap Value Equity

Start date on the Fund: February 2008

Years of industry experience: 34

(View bio)

Steve Catricks

Steven G. Catricks, CFA

Vice President, Portfolio Manager, Equity Analyst

Start date on the Fund: July 2012

Years of industry experience: 16

(View bio)

Kent Madden

Kent P. Madden, CFA

Vice President, Portfolio Manager, Equity Analyst

Start date on the Fund: July 2012

Years of industry experience: 18

(View bio)

Kelly McKee

Kelley A. McKee, CFA

Vice President, Portfolio Manager, Equity Analyst

Start date on the Fund: July 2012

Years of industry experience: 12

(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 fees0.75%
Distribution and service (12b-1) fees0.25%
Other expenses3.34%
Total annual fund operating expenses4.34%
Fee waivers and expense reimbursements(3.09%)
Total annual fund operating expenses after fee waivers and expense reimbursements1.25%

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, acquired fund fees and expenses, 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 1.00% of the Fund's average daily net assets from Feb. 27, 2015 through Feb. 29, 2016. These waivers and reimbursements may only be terminated by agreement of the Manager and the Fund.

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Delaware Mid Cap Value Fund Quarterly commentary December 31, 2014

Within the Fund

Delaware Mid Cap Value Fund (Class A shares at net asset value and Institutional Class shares) underperformed its benchmark, the Russell Midcap® Value Index, during the fourth quarter of 2014. Stock selection in the energy and capital spending sectors detracted the most from the Fund’s return. The Fund’s underweight allocation to real estate investments trusts (REITs) also detracted from performance as the sector generally outperformed most. Stock selection in the consumer services, healthcare, and basic industry sectors were the most positive contributors to relative returns.

During the fourth quarter, performance was hampered by several energy stocks, led by Whiting Petroleum, an exploration and production company with primary operations in the Bakken Shale formation and the Rocky Mountains. While we had reduced the Fund’s position in Whiting Petroleum during the third quarter of 2014 (after the company announced its plan to acquire Kodiak Oil & Gas) we retained a smaller position due to the relative valuation versus other oil and gas companies, and the expected growth from the acquisition. The stock fell 57% during the quarter as the price of oil had a significant decline following the decision by the Organization of the Petroleum Exporting Countries (OPEC) not to cut production. With oil being the vast majority of the company’s production, the stock suffered more than most did in the sector.

Chicago Bridge & Iron is an engineering and construction company with significant exposure to the energy sector. During the quarter, the stock declined 27% in reaction to declining oil and gas prices and concerns of postponement or cancellation of Gulf Coast energy projects. We maintain the Fund’s position in the stock due to the attractive relative valuation and our constructive long-term view of the global energy sector.

Comerica is a regional bank with primary operations in Michigan, California, and Texas. The stock declined 6% during the quarter as investors continued to worry that the U.S. Federal Reserve will maintain extremely low rates longer than forecast. In the near term, investors are concerned that the decline in the price of oil could slow loan growth in Texas, which has been a successful market for the bank in recent years. Additionally, in the longer-term (if oil prices stay low) the number of nonperforming loans at the bank could increase. We maintained the Fund’s position due to the bank’s relative valuation and its asset sensitivity.

Among the stocks that contributed to performance was Bloomin’ Brands, a casual dining chain that operates Outback Steakhouse, Bonefish Grill, and Carrabba’s restaurants. The stock appreciated 35% during the quarter as the company announced solid third quarter earnings after a miss in the second quarter. We maintained the Fund’s position in Bloomin’ Brands during the quarter as we are attracted to the company’s strong brand names, attractive valuation, and healthy free cash flow. 

Becton Dickinson, a medical device and instruments company, advanced 23% during the fourth quarter as investors were pleased with the announcement of an accretive acquisition of CareFusion for cash and stock. CareFusion sells medical technology products that are complementary to those that Becton Dickinson currently produces. In our view, the transaction should help the company leverage a combined infrastructure. We maintained the Fund’s position in Becton Dickinson as we believe the proposed transaction could result in significant synergies. In addition, the company’s valuation looks attractive to us and we think the company will seek to delever its balance sheet after the deal closes.

Tesoro is a major petroleum refiner in the United States with primary operations on the west coast. The stock rose 22% during the quarter as earnings came in well above expectations and the company increased its guidance for free cash flow over the next few years. We reduced the Fund’s position during the quarter as the stock was approaching our target price.


We believe that the outlook for the economy and equities remains favorable. As we enter 2015, we believe the economy should continue to grow at a moderate pace as employment trends, manufacturing data, and consumer spending continue to improve. We expect this positive economic backdrop to provide the opportunity for companies to continue on an earnings growth path in 2015 which should help to support equity markets.

In the fourth quarter, the Fed ended its quantitative easing program and, as a result, monetary policy has become slightly less accommodative. In this type of environment, we believe that higher-quality companies, which we define as those with strong free cash flow and solid balance sheets, should outperform lower-quality, more speculative companies. The Fund’s positioning coming into 2015 remains largely unchanged with overweights in basic industries, capital spending, and technology. We remain underweight traditionally defensive sectors including utilities and REITs, where we do not view valuations as attractive. We will continue to identify what we view as high-quality companies that are likely to deploy their cash in shareholder-friendly ways such as dividends or share repurchases.


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.

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 03/27/2015)

Class APriceNet changeYTD
Max offer price$5.45n/an/a

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

$5.5 million all share classes

Lipper ranking (as of 02/28/2015)

YTD ranking256 / 404
1 year270 / 388
3 years307 / 351
5 years257 / 305
10 yearsn/a
Lipper classificationMid-Cap Core Funds

(View Lipper disclosure)

Benchmark, peer group

Russell Midcap® Value Index (view)

Lipper Mid-Cap Core Funds Average (view)

Additional information