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*Annually
Capital gains paid*December

*If any.

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 (03/31/2014)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)3.23%19.43%9.67%21.47%n/a7.63%02/01/2008
Max offer pricen/a12.57%7.52%20.02%n/a6.60%
Russell Midcap Value Index5.22%22.95%15.17%26.35%n/an/a
Average annual total return as of quarter-end (03/31/2014)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)3.23%3.23%19.43%9.67%21.47%n/a7.63%02/01/2008
Max offer price-2.72%-2.72%12.57%7.52%20.02%n/a6.60%
Russell Midcap Value Index5.22%5.22%22.95%15.17%26.35%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, 2014 through Feb. 27, 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 03/31/2014
Share assets$3.5 million
Number of holdings82
Market cap (median)$7.76 billion
Market cap (weighted average)$11.26 billion
Portfolio turnover (last fiscal year)22%
P/E ratio (weighted average FY1) (view definition)15.18x
Beta (relative to Russell Midcap Value Index) (view definition)1.11
Annualized standard deviation, 3 years (view definition)16.12
Portfolio composition as of 03/31/2014Total may not equal 100% due to rounding.
Domestic equities95.5%
Cash and cash equivalents3.6%
International equities & depository receipts0.9%
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
East West Bancorp Inc.2.5%
United Rentals Inc.2.4%
American Financial Group Inc.2.3%
Whiting Petroleum Corp.2.3%
Comerica Inc.2.3%
Torchmark Corp.2.0%
Celanese Corp.2.0%
Cytec Industries Inc.1.8%
Raymond James Financial Inc.1.8%
WR Grace & Co.1.8%
Total % Portfolio in Top 10 holdings21.2%

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

Top sectors as of 03/31/2014
List excludes cash and cash equivalents.
Sector% of portfolio
Financial Services20.3%
Basic Industry9.9%
Consumer Services8.7%
Capital Spending8.2%
Health Care7.3%
Consumer Cyclical4.6%
Distribution history - annual distributions (Class A)
Distributions ($ per share)
YearCapital gainsDividends
Chris Beck

Chris Beck, CFA

Chief Investment Officer — Small-Cap Value / Mid-Cap Value Equity

Start date on the Fund: February 2008

(View bio)

Steve Catricks

Steven G. Catricks, CFA

Portfolio Manager, Equity Analyst

Start date on the Fund: July 2012

(View bio)

Kent Madden

Kent P. Madden, CFA

Portfolio Manager, Equity Analyst

Start date on the Fund: July 2012

(View bio)

Kelly McKee

Kelley A. McKee, CFA

Portfolio Manager, Equity Analyst

Start date on the Fund: July 2012

(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 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 fees0.75%
Distribution and service (12b-1) fees0.25%
Other expenses1.22%
Total annual fund operating expenses2.22%
Fee waivers and expense reimbursements(0.97%)
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, 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 1.00% of the Fund's average daily net assets from Feb. 27, 2014 through Feb. 27, 2015. 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 March 31, 2014 Class A (DLMAX)

Within the Fund

Delaware Mid Cap Value Fund (Class A shares at net asset value) posted a positive return but underperformed its benchmark, the Russell Midcap® Value Index, during the first quarter of 2014.

Stock selection in consumer staples, energy, and financial services contributed the most to relative performance. The Fund underperformed the index in technology, real estate investments trusts (REITs), and transportation. The transportation sector posted the highest absolute return in the index driven by airlines, an area in which the Fund's portfolio is underweight. The REIT sector posted the next highest absolute return in the index. The Fund's returns were strong in the REIT sector, but failed to keep pace with those of the index; in addition, an underweight allocation to REITs detracted from relative performance.

The Fund had several individual contributors to performance during the quarter. Oil and gas exploration and production company Newfield Exploration increased more than 25% during the quarter. Production guidance improved and the company announced that two recent asset plays are on track to potentially add significant value. Monetization of noncore assets continues; we maintained the Fund's position as Newfield continues to sell at a discount to the group.

Edison International is an electric utility in Southern California. The stock increased more than 20% during the quarter — the company reported fourth quarter 2013 earnings above expectations on good cost controls at the regulated utility and provided constructive 2014 guidance. Two events during the quarter also removed an overhang on the stock that has lingered for quite some time: The first event was the resolution of the Edison Mission Energy bankruptcy (its separate unregulated power entity) and the unit's subsequent approval of sale to NRG Energy. The second event was an agreed upon settlement with key parties in the utility commission's investigation into the San Onofre Nuclear Generating System (SONGS) shutdown.

Premium spirits company Beam appreciated more than 20% during the quarter as it announced that it would sell to Suntory Holdings Limited, a leading Japanese beverage company. We sold the Fund's shares in Beam during the quarter as we believed that the price offered was fair and other bidders will not emerge.

Several stocks detracted from Fund performance during the quarter, including office supply retailer Staples. Staples was down nearly 30% during the quarter due primarily to a weak fourth quarter earnings report and first quarter outlook. A recovering white collar job market has not been enough to offset a decline in sales of office products. We continue to hold shares of Staples as the company is aggressively downsizing its store base and cutting costs. In addition, we believe the company has an attractive free cash flow yield and dividend yield.

KBR is a construction and engineering firm with significant energy end market exposure. Lower-than-expected fourth quarter 2013 earnings, as well as 2014 guidance, pushed the stock down more than 15% during the quarter. Large liquefied natural gas projects that the company was bidding for ended up being awarded to competitors, leaving KBR unlikely to win any large project awards in 2014. KBR also continues to struggle with some execution and utilization issues that are burdening costs. The company recently announced a new CEO and stock repurchase program. We continue to think that the company is well positioned in attractive growth end markets and that new management will be an additional catalyst.

Symantec provides security, storage, and systems management solutions. On March 20, Symantec announced that President and CEO, Steve Bennett, had been terminated. Though it was clear that operational improvements were necessary at the company, the changes and plan that Bennett had put in place reflected a rate of change that was likely too aggressive for the Board. Although the company remains committed to previously set financial goals, the stock declined 15% during the quarter. We continue to hold shares of Symantec as we believe the company's longer-term positioning in the industry and the current valuation still support the potential for share price improvement and cash flow growth.


We continue to believe that the outlook for mid-cap equities is favorable. We believe that the U.S. economy should continue to grow at a moderate pace as employment trends, consumer spending, and bank lending continue to improve. Additionally, the Federal Reserve appears to be committed to accommodative monetary policy going forward.

We have begun to see some signs that investor sentiment is shifting from lower-quality equities to higher-quality equities. In this type of environment, we believe that stocks with strong free cash flow have the potential to outperform the more speculative areas of the market, where valuations remain stretched. The Fund's positioning remains largely the same with overweights in basic industries, capital spending, and consumer services, with corresponding underweights in utilities and REITs.

We will continue to seek what we view as higher-quality stocks, with a particular emphasis on companies that, in our opinion, generate strong free-cash flow and are in a position to raise or initiate a dividend or buyback shares. Also in accordance with our long-held preferences, we continue to underweight companies that, in our view, are excessively levered.


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 04/17/2014)

Class APriceNet changeYTD
Max offer price$6.37n/an/a

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

$5.1 million all share classes

Lipper ranking (as of 03/31/2014)

YTD ranking120 / 223
1 year195 / 213
3 years179 / 182
5 years138 / 159
10 yearsn/a
Lipper classificationMid-Cap Value Funds

(View Lipper disclosure)


Prospectuses and reports

Benchmark, peer group

Russell Midcap® Value Index (view)

Lipper Mid-Cap Value Funds Average (view)

Additional information