The Emerging Markets Portfolio (closed to new investors)

Objective

The Emerging Markets Portfolio seeks long-term capital appreciation.

Strategy

The Emerging Markets Portfolio is an international fund. The Portfolio generally invests in equity securities of companies organized in, having a majority of their assets in, or deriving a majority of their operating income from, emerging countries. Equity securities include, but are not limited to, common stocks, preferred stocks, convertible securities, certain nontraditional equity securities, and warrants. To the extent that this Portfolio invests in convertible debt securities, those securities will be purchased on the basis of their equity characteristics, and ratings of those securities, if any, will not be an important factor in their selection.

Under normal circumstances, the Portfolio will invest at least 80% of its net assets, plus any borrowings for investment purposes, in investments of emerging market issuers (80% Policy). The Portfolio's 80% Policy may be changed without shareholder approval. However, shareholders will be given notice at least 60 days prior to any such change. Under normal circumstances, the Portfolio will invest at least 40% of its total assets in securities of non-U.S. issuers. This policy is in addition to the 80% Policy.

The Portfolio considers an "emerging country" to be any country that is generally recognized to be an emerging or developing country by the international financial community, including the World Bank and the International Finance Corporation, as well as countries that are classified by the United Nations as developing. In addition, any country that is included in the International Finance Corporation Free Index or MSCI Emerging Markets Index will be considered to be an "emerging country." There are more than 130 countries that are generally considered to be emerging or developing countries by the international financial community, approximately 40 of which currently have stock markets. Almost every nation in the world is included within this group of developing or emerging countries except the United States, Canada, Japan, Australia, New Zealand, and nations located in Western Europe.

The Portfolio will focus its investments in those emerging countries where the Portfolio's sub-advisor, Mondrian Investment Partners, Limited (Sub-advisor), considers the economies to be developing strongly and where the markets are becoming more sophisticated. Currently, investing in many other emerging countries is not feasible, or may, in the Sub-advisor's opinion, involve unacceptable political risks. The Sub-advisor believes that investment opportunities may result from an evolving long-term international trend favoring more market-oriented economies, a trend that may particularly benefit certain countries having developing markets. This trend may be facilitated by local or international political, economic, or financial developments that could benefit the capital markets in such countries.

In considering possible emerging countries in which the Portfolio may invest, the Sub-advisor will place particular emphasis on factors such as economic conditions (including growth trends, inflation rates, and trade balances), regulatory and currency controls, accounting standards, and political and social conditions.The Sub-advisor currently anticipates that the countries in which the Portfolio may invest will include, among others, Argentina, Brazil, Chile, China, Colombia, Croatia, the Czech Republic, Egypt, Estonia, Ghana, Hong Kong, Hungary, India, Indonesia, Israel, Jordan, Kazakhstan, Kenya, Malaysia, Mexico, Morocco, North Korea, Pakistan, Panama, Peru, the Philippines, Poland, Romania, Russia, Slovenia, South Africa, South Korea, Sri Lanka, Taiwan, Thailand, Turkey, Ukraine, Venezuela, Vietnam, and Zimbabwe. As markets in other emerging countries develop, the Sub-advisor expects to expand and further diversify the countries in which the Portfolio invests.

Although this is not an exclusive list, the Sub-advisor considers an emerging country equity security to be one that is issued by a company that exhibits one or more of the following characteristics: (1) its principal securities trading market is in an emerging country, as defined above; (2) while traded in any market, alone or on a consolidated basis, the company derives 50% or more of its annual revenues from either goods produced, sales made, or services performed in emerging countries; or (3) it is organized under the laws of, and has a principal office in, an emerging country. The Sub-advisor will determine eligibility based on publicly available information and inquiries made of the companies.

Up to 35% of the Portfolio's net assets may be invested in debt securities issued by emerging country companies, and foreign governments, their agencies, instrumentalities, or political subdivisions, all of which may be high yield, high-risk fixed income securities rated lower than BBB- by Standard & Poor's and lower than Baa3 by Moody's, or similarly rated by another Nationally Recognized Statistical Rating Organization (NRSRO). The Portfolio may also invest in zero-coupon bonds. The Portfolio may invest in securities issued in any currency and may hold foreign currency. Securities of issuers within a given country may be denominated in the currency of another country or in multinational currency units, including the euro. For temporary defensive purposes, the Portfolio may invest all or a substantial portion of its assets in high-quality debt instruments.

Currency considerations carry a special risk for a portfolio of international securities. The Sub-advisor uses a purchasing power parity approach to evaluate currency risk. In this regard, the Portfolio may actively carry on hedging activities, and may invest in forward foreign currency exchange contracts to hedge currency risks associated with the purchase of individual securities denominated in a particular currency.

Portfolio information
Inception date04/16/1997
Dividends paid (if any)Annually
Capital gains paid (if any)December
Portfolio identifiers
NASDAQDPEMX
CUSIP246248843

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 (07/31/2014)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)9.11%10.84%2.27%7.67%12.28%9.15%04/16/1997
MSCI Emerging Markets Index (Gross)8.46%15.72%0.74%7.68%12.72%n/a
MSCI Emerging Markets Index (Net)8.19%15.32%0.40%7.34%12.36%n/a
Average annual total return as of quarter-end (06/30/2014)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)7.83%9.00%9.24%2.32%10.01%12.58%9.19%04/16/1997
MSCI Emerging Markets Index (Gross)6.71%6.32%14.68%-0.06%9.58%12.30%n/a
MSCI Emerging Markets Index (Net)6.59%6.14%14.31%-0.39%9.24%11.94%n/a

Returns for less than one year are not annualized.

Expense ratio
Gross1.20%
Net1.20%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
20141.08%7.83%n/an/an/a
20131.52%-9.17%-0.51%0.74%-7.58%
201214.38%-7.60%6.65%8.19%21.94%
20110.62%0.44%-18.40%6.88%-11.86%
20102.31%-7.38%18.47%4.74%17.59%
20090.17%32.73%19.43%5.95%68.22%
2008-4.91%0.38%-22.84%-25.15%-44.88%
20072.68%13.83%8.12%1.86%28.72%
20069.80%-5.52%4.69%16.66%26.70%
20052.32%4.27%16.25%2.73%27.41%
20047.57%-5.70%11.75%19.27%35.21%
Portfolio characteristics - as of 07/31/2014
Share assets$349.4 million
Number of holdings79
Market cap (median)$11.61 billion
Market cap (weighted average)$39.58 billion
Portfolio turnover (last fiscal year)40%
Beta (relative to MSCI Emerging Markets Index (Gross)) (view definition)0.90
Annualized standard deviation, 3 years (view definition)18.25
Top 10 holdings as of 07/31/2014
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
China Mobile Ltd.3.5%
Hyundai Mobis3.3%
Samsung Electronics Co. Ltd.3.1%
Fibra Uno Administracion S.A. de CV2.9%
Taiwan Semiconductor Manufacturing Co. Ltd.2.7%
Unilever PLC2.6%
Tupras Turkiye Petrol Rafinerileri AS2.6%
PTT PCL2.6%
Philippine Long Distance Telephone Co.2.2%
Yum! Brands Inc.2.2%
Total % Portfolio in Top 10 holdings27.7%

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

Top 10 countries as of 07/31/2014List excludes cash and cash equivalents.
Country% of portfolio
China16.4%
Brazil10.6%
South Korea8.5%
Mexico8.3%
India7.6%
Taiwan6.9%
Malaysia5.0%
Turkey4.9%
Indonesia4.2%
South Africa3.9%
Distribution history - annual distributions (Original Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20140.0000.000
20130.3340.178
20120.1640.239
20110.7980.220
20100.0000.330
20090.0000.212
20081.2680.303
20073.4470.402
20062.7270.369
20054.6370.540
20040.9480.242

1If a Portfolio 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 Portfolio will send each shareholder a Form 1099 DIV for the calendar year that will provide definitive information on how to report the Portfolio'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 Portfolio (if any).

2Information on return of capital distributions is only provided from June 1, 2014 onward.

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

Investment manager

Delaware Management Company, a series of Delaware Management Business Trust.

Sub-advisors

Mondrian Investment Partners Ltd.

Ginny Chong

Ginny Chong, CFA 

Senior Portfolio Manager

(View bio)


Clive Gillmore

Clive A. Gillmore 

Chief Executive Officer

(View bio)


Gregory Halton

Gregory J.P. Halton, CFA 

Senior Portfolio Manager

(View bio)


Andrew Miller

Andrew Miller, CFA 

Chief Investment Officer — Emerging Market Equities

(View bio)


The following table describes the fees and expenses that you may pay if you buy and hold shares of the Portfolio.

Shareholder fees
Maximum sales charge (load) imposed on purchases as a percentage of offering pricenone
Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lowernone
Purchase reimbursement fees0.55%
Redemption reimbursement fees10.55%
Annual portfolio operating expenses
Management fees1.00%
Distribution and service (12b-1) feesnone
Other expenses0.20%
Total annual portfolio operating expenses1.20%
Fee waivers and expense reimbursementsnone
Total annual portfolio operating expenses after fee waivers and expense reimbursements1.20%

1The purchase reimbursement fees and redemption reimbursement fees are paid to the Portfolio. These fees are designed to reflect an approximation of the brokerage and other transaction costs associated with the investment of an investor's purchase amount or the disposition of assets to meet redemptions, and to limit the extent to which the Portfolio (and, indirectly, the Portfolio's existing shareholders) would have to bear such costs. In lieu of the reimbursement fees, investors in The Emerging Markets Portfolio may be permitted to utilize alternative purchase and redemption methods designed to accomplish the same economic effect as the reimbursement fees.

Carefully consider the Portfolio's investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Portfolio's prospectus, if available, its summary prospectus, which may be obtained by clicking the prospectus link located in the right-hand sidebar or calling 800 231-8002. Investors should read the prospectus, and, if available, 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.

If and when the Portfolio invests in forward foreign currency contracts or use other investments to hedge against currency risks, the Portfolio will be subject to special risks, including counterparty risk.

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 Portfolio may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Portfolio may be prepaid prior to maturity, potentially forcing the Portfolio to reinvest that money at a lower interest rate.

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

The MSCI Emerging Markets Index measures equity market performance across emerging market countries worldwide.

The Portfolio is distributed by Delaware Distributors L.P., an affiliate of Delaware Management Holdings, Inc., and Macquarie Group Limited.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 08/21/2014)

Original ClassPriceNet changeYTD
NAV$10.28no chg11.50%
Max offer price$10.28n/an/a

Total net assets (as of 07/31/2014)

$349.4 million all share classes

Lipper ranking (as of 07/31/2014)

YTD ranking113 / 734
1 year441 / 656
3 years109 / 461
5 years125 / 317
10 years39 / 152
Lipper classificationEmerging Markets Funds

(View Lipper disclosure)

Benchmark, peer group

MSCI Emerging Markets Index (view)

Lipper Emerging Markets Funds Average (view)

Additional information