Delaware Corporate Bond Fund


Delaware Corporate Bond Fund seeks to provide investors with total return.


The Fund primarily invests in corporate bonds, with a focus on bonds that have investment grade credit ratings. The Fund seeks total return through a combination of income and capital appreciation.

Fund information
Inception date09/15/1998
Dividends paid (if any)Monthly
Capital gains paid (if any)December
Fund identifiers

Institutional Class shares are only available to certain investors. See the prospectus for more information. 

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 (10/31/2015)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)0.02%-0.44%2.43%5.32%6.97%7.02%09/15/1998
Barclays U.S. Corporate Investment Grade Index0.32%1.05%1.93%4.38%5.56%n/a
Average annual total return as of quarter-end (09/30/2015)
Last quarter1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-0.88%-0.60%2.70%5.37%6.76%7.00%09/15/1998
Barclays U.S. Corporate Investment Grade Index0.83%1.66%2.23%4.32%5.39%n/a

Returns for less than one year are not annualized.

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 Nov. 28, 2014 through Nov. 30, 2015. Please see the fee table in the Fund's prospectus for more information.

Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return

Institutional Class shares are only available to certain investors. See the prospectus for more information. 

Portfolio characteristics - as of 10/31/2015
Number of holdings298
Effective maturity (weighted average) (view definition)10.70 years
Effective duration (weighted average) (view definition)7.06 years
Annualized standard deviation, 3 years (view definition)4.32
SEC 30-day yield with waiver (view definition)3.83%
SEC 30-day yield without waiver (view definition)3.82%
Portfolio turnover (last fiscal year)215%
Portfolio composition as of 10/31/2015Total may not equal 100% due to rounding.
U.S. government securities6.5%
Municipal bonds0.7%
Top 10 holdings as of 10/31/2015
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
United States Treasury Note/Bond 2.000 8/15/20251.4%
Regency Energy Partners LP / Regency Energy Finance Corp. 5.875 3/1/20221.0%
Verizon Communications Inc. 4.862 8/21/20461.0%
CSX Corp. 3.350 11/1/20250.9%
AT&T Inc. 4.750 5/15/20460.9%
Omega Healthcare Investors Inc. 4.500 1/15/20250.9%
Apple Inc. 3.450 2/9/20450.8%
KeyBank NA/Cleveland OH 3.300 6/1/20250.8%
JPMorgan Chase & Co. 4.250 10/1/20270.8%
Regions Bank/Birmingham AL 2.250 9/14/20180.8%
Total % Portfolio in Top 10 holdings9.3%

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

Top sectors as of 10/31/2015
List excludes cash and cash equivalents.
Sector% of portfolio
Financial institutions29.6%
Consumer cyclical6.0%
Basic Industry5.5%
Consumer noncyclical5.1%
Distribution history - annual distributions (Institutional Class)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.

Institutional Class shares are only available to certain investors. See the prospectus for more information. 

Mike Wildstein

Michael G. Wildstein, CFA

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: November 2014

Years of industry experience: 14

(View bio)

Roger Early

Roger A. Early, CPA, CFA

Managing Director, Head of Fixed Income Investments, Executive Vice President, Co-Chief Investment Officer — Total Return Fixed Income Strategy

Start date on the Fund: May 2007

Years of industry experience: 39

(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)

J. David Hillmeyer

J. David Hillmeyer, CFA

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: November 2014

Years of industry experience: 22

(View bio)

Kashif Ishaq

Kashif Ishaq 

Senior Vice President, Head of Investment Grade Corporate Bond Trading

Start date on the Fund: November 2013

Years of industry experience: 13

(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)

Christopher Testa

Christopher M. Testa, CFA

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: June 2014

Years of industry experience: 29

(View bio)

Institutional Class shares are only available to certain investors. See the prospectus for more information. 

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 pricenone
Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lowernone
Annual fund operating expenses
Management fees0.48%
Distribution and service (12b-1) feesnone
Other expenses0.22%
Total annual fund operating expenses0.70%
Fee waivers and expense reimbursements(0.01%)
Total annual fund operating expenses after fee waivers and expense reimbursements0.69%

Institutional Class shares are only available to certain investors. See the prospectus for more information. 

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 0.69% of the Fund's average daily net assets from Nov. 28, 2014 through Nov. 30, 2015. These waivers and reimbursements may only be terminated by agreement of the Manager and the Fund.

View printable commentary E-mail this page

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Delaware Corporate Bond Fund Quarterly commentary September 30, 2015


During the third quarter of 2015, the markets experienced significant swings in the level of rates, the shape of the yield curve, and the valuation of risk assets. By the end of the quarter, “up in quality” outperformed, intermediate and long maturities registered a meaningful drop in yields, and shorter-term rates treaded water. Global factors had a major impact on all parts of the markets. The U.S. dollar was unchanged against a developed markets currency basket, but showed strength against emerging markets currencies. The quarter also saw a renewal of the downtrend in energy prices and broad weakness across most commodity prices. During the quarter, the U.S. Federal Reserve pointed to moderate growth conditions but seemed concerned with both below-target inflation and turbulent global markets. Several Fed members, including chairwoman Janet Yellen, have pointed to a late 2015 “liftoff” in short-term rates. This Fed scenario still seems potentially off track to us, as it would come despite a strong U.S. dollar, lower commodity prices, and below-target inflation statistics. Rarely has the Fed begun to tighten in the face of these types of factors

It seems clear to us that the employment situation is no longer the major factor driving the Fed; inflation has become a larger factor. Current inflation results, along with the intermediate outlook for both U.S. and global inflation, strongly suggest that the Fed will have to take a cautious track on any tightening. Yellen has pointed to the potential for rising resource utilization as a future source of upward pressure on wages and overall inflation. In Yellen’s view, this could be the driver that moves inflation back to the Fed’s target 2% level. However, it is interesting that Fed projections for inflation do not reach the 2% target until 2018. In addition, Mario Draghi of the European Central Bank (ECB) recently projected an upcoming shift to negative inflation rates in Europe. Given the Fed’s propensity for having to reduce overly optimistic forecasts during this entire economic expansion, even its call for a 2018 return to target inflation could prove to be premature.

Domestically, the majority of economic indicators suggest modest growth and a stabilizing economy. The U.S. Commerce Department revised second-quarter gross domestic product (GDP) growth upward in September to 3.9% (from the previous reading of 3.7%), revealing a somewhat more positive view of U.S. economic growth heading into midyear. Additionally, the latest report on jobless claims suggests that the labor market maintains positive momentum, while initial claims data and the continuing claims report provided further support for an improved outlook on labor markets. In the wake of this positive tone, the Conference Board Consumer Confidence Index® rose in September to the highest level since January. Although most U.S. economic indicators were favorable, these positives were offset by heightened concerns surrounding the slowdown in China and emerging market economies, and subsequent volatility in the equity and commodity markets. Additionally, inflation remains benign and is being restrained by the plunge in energy costs and the stronger dollar. The most recent personal consumption expenditures price index (core PCE) data release of 1.3% remains below the Federal Open Market Committees (FOMC’s) 2.0% objective.

Within the Fund

For the third quarter of 2015, Delaware Corporate Bond Fund (Institutional Class shares and Class A shares at net asset value) underperformed its benchmark, the Barclays U.S. Corporate Investment Grade Index. The Fund’s performance was negatively affected by exposures to high yield, emerging market debt, and energy exposures, with high yield representing an average of about 12% of the Fund’s portfolio for the period.

Investment grade credit markets experienced another volatile quarter, as heavy supply was the primary factor weighing on spreads. Merger and acquisition activity has been the main driver of the heavy supply because financing conditions remain favorable and companies seek to gain scale efficiencies before the Fed embarks on policy normalization. Spreads widened from 1.45 percentage points to 1.69 percentage points over the quarter, led by significant weakness in metals/mining and energy as fears associated with deteriorating fundamentals in China and slowing global growth have collapsed commodity markets.

Against the backdrop of a global equity selloff, declining Chinese growth, falling commodity prices, uncertainty about the Fed’s liftoff date, and heavy mutual fund redemptions, high yield bonds returned -4.9% (as measured by the BofA Merrill Lynch U.S. High Yield Constrained Index) during the third quarter, while safe-haven assets such as Treasurys and municipal debt outperformed. The quarter’s weakest performers were energy (-16.0%), metals and mining (-15.0%), and chemicals (-8.5%). The communications sector suffered the spillover effects of Moody’s unexpected two-notch downgrade to Sprint’s capital structure, based on risk factors. Emerging markets continued to be affected by weak commodity prices, and many have seen their currencies depreciate sharply as the Fed prepares to lift rates. Downward revisions to emerging markets growth continued in September as China showed additional signs of deceleration.

From a duration standpoint, the Fund’s overweight to the intermediate segment — or the “belly” of the curve — and a corresponding underweight to the long end benefited performance as the curve flattened (with the majority of the rate action concentrated in the belly of the curve) amid heightened market volatility, global growth weakness, and the Fed’s dovish outlook on future growth prospects. We continued to use interest rate futures to manage curve and overall portfolio duration deviations relative to the index.


Given the weak global growth backdrop and commodity volatility, we expect the FOMC to remain cautious and move only slowly in its policy normalization, eventually reaching rate liftoff by December at the earliest. However, the impact of weaker global growth on the U.S. economic recovery and low inflation are risks to rate hikes in 2015. In our view, modest U.S. growth and Fed tightening support higher Treasury yields by year end 2015.

A further slowdown in global growth could weigh on U.S. growth and commodity-driven sectors. China’s further deteriorating growth trajectory remains a key risk for global growth and commodity prices. Commodities could also continue to be pressured by a stronger dollar. Shareholder-friendly activity and limited earnings growth remain risks for corporate issuers and spreads. However, geopolitical risk accelerating in Europe and the Middle East could drive demand for “safe haven” assets, which could lead to lower rates and a widening of credit spreads. Finally, unprecedented stimulus by global central banks, at various phases, hiking or easing, could lead to lower-for-longer Treasury yields.

The Conference Board Consumer Confidence Index is a barometer of the health of the U.S. economy from the perspective of the consumer. The index is based on consumers’ perceptions of current business and employment conditions, as well as their expectations for six months hence regarding business conditions, employment, and income.

The BofA Merrill Lynch U.S. High Yield Constrained Index tracks the performance of U.S. dollar–denominated high yield corporate debt publicly issued in the U.S. domestic market, but caps individual issuer exposure at 2% of the benchmark.

The personal consumption expenditures price index (core PCE) consists of the actual and imputed expenditures of households and includes data pertaining to durable and non-durable goods and services. It is essentially a measure of goods and services targeted towards individuals and consumed by individuals.


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 800 362-7500. Investors should read the prospectus and the summary prospectus carefully before investing.

Investing involves risk, including the possible loss of principal.

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.

The Fund may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivative transaction depends upon the counterparties’ ability to fulfill their contractual obligations.

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.

The Funds are 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 11/24/2015)

Institutional ClassPriceNet changeYTD
NAV$5.67no chg-0.74%
Max offer price$5.67n/an/a

Total net assets (as of 10/31/2015)

$1.4 billion all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 10/31/2015)
RatingNo. of funds
3 Yrs4156
5 Yrs4145
10 Yrs594
Morningstar categoryCorporate Bond

(View Morningstar disclosure)

Lipper ranking (as of 10/31/2015)

YTD ranking106 / 209
1 year153 / 207
3 years37 / 176
5 years21 / 157
10 years10 / 106
Lipper classificationCorp Debt BBB Rated Fds

(View Lipper disclosure)

Benchmark, peer group

Barclays U.S. Corporate Investment Grade Index (view definition)

Lipper Corporate Debt Funds BBB-Rated Average (view definition)

Additional information