Delaware High-Yield Opportunities Fund


Delaware High-Yield Opportunities Fund seeks total return and, as a secondary objective, high current income.


The Fund primarily invests in high yield corporate bonds. The Fund’s manager engages thorough credit research to attempt to capture the high yield bond market’s premium return potential.

Fund information
Inception date12/30/1996
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 (11/30/2014)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)1.69%2.68%10.41%9.95%7.68%7.58%12/30/1996
BofA Merrill Lynch U.S. High Yield Constrained Index4.04%4.61%9.79%9.85%7.93%n/a
Average annual total return as of quarter-end (09/30/2014)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-2.19%3.13%7.30%12.44%10.81%8.24%7.74%12/30/1996
BofA Merrill Lynch U.S. High Yield Constrained Index-1.92%3.61%7.23%10.94%10.36%8.21%n/a

Returns for less than one year are not annualized.

Expense ratio

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursement 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 11/30/2014
Share assets$237.2 million
Number of holdings248
Effective maturity (weighted average) (view definition)5.98 years
Effective duration (weighted average) (view definition)4.75 years
Annualized standard deviation, 3 years (view definition)5.21
SEC 30-day yield with waiver (view definition)6.02%
SEC 30-day yield without waiver (view definition)5.96%
Portfolio turnover (last fiscal year)105%
Portfolio composition as of 11/30/2014Total may not equal 100% due to rounding.
Foreign bonds23.3%
Cash and cash equivalents4.8%
Top 10 holdings as of 11/30/2014
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Intelsat Luxembourg S.A. 8.125 6/1/20231.4%
Ally Financial Inc.1.0%
Par Pharmaceutical Cos Inc. 7.375 10/15/20201.0%
Landry's Inc. 9.375 5/1/20200.9%
BWAY Holding Co. 9.125 8/15/20210.8%
First Data Corp. 11.750 8/15/20210.8%
Digicel Group Ltd. 8.250 9/30/20200.8%
Columbus International Inc. 7.375 3/30/20210.8%
VTR Finance BV 6.875 1/15/20240.8%
Gates Global LLC / Gates Global Co. 6.000 7/15/20220.8%
Total % Portfolio in Top 10 holdings9.1%

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

Top sectors as of 11/30/2014
List excludes cash and cash equivalents.
Sector% of portfolio
Basic industry11.8%
Capital goods6.9%
Technology & electric5.4%
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. 

Paul Matlack

Paul Matlack, CFA

Senior Vice President, Senior Portfolio Manager, Fixed Income Strategist

Start date on the Fund: December 2012

Years of industry experience: 29

(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: 20

(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: 27

(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: 28

(View bio)

Adam Brown

Adam H. Brown, CFA

Vice President, Portfolio Manager

Start date on the Fund: November 2014

Years of industry experience: 16

(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 fees0.64%
Distribution and service (12b-1) feesnone
Other expenses0.22%
Total annual fund operating expenses0.86%
Fee waivers and expense reimbursements(0.06%)
Total annual fund operating expenses after fee waivers and expense reimbursements0.80%

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 0.80% 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 High-Yield Opportunities Fund Quarterly commentary September 30, 2014


High yield bonds and loans returned -1.9% and -0.3% during the third quarter, bringing year-to-date returns to 3.7% and 2.1%, respectively. Geopolitical issues, rate fears, equity and Treasury market volatility, mutual fund outflows, and heavy new supply all contributed to the quarter’s negative performance. Returns were positively correlated with credit quality, with BB-rated issues leading at -1.3% compared to -1.7% for B-rated issues and -3.5% for CCC-rated securities.

All industry sectors were negative for the quarter, with particular weakness in gaming and metals and mining, and relative strength in utilities and financials. High yield bond yields rose by 117 basis points to 6.4%, while spreads widened 87 basis points, to 492 basis points. Loan yields rose 71 basis points to 5.67%, while loan spreads widened by 42 basis points to 441 basis points. (A basis point equals one one-hundredth of a percentage point.) The average bond price fell $3.78 to $101.96, while the average loan price fell $0.28 to $98.22. (Data: Merrill Lynch and J.P. Morgan.)

The third quarter proved to be a roller coaster for the high yield bond market, with heavy redemptions in July leading to a 1.2% loss, followed by +1.5% snapback in August and a further 2.5% loss in September. While movements in July and August were largely attributable to technical conditions associated with the ebb and flow of retail demand, September’s weakness had more complex roots. The resumption of U.S. military activity in the Mideast, the simmering Russia-Ukraine conflict, rate fears as Federal Reserve tapering nears an end, uncertainty over coming European Central Bank rate moves, and political and economic uncertainties both in Brazil and China all helped to spike volatility in the U.S. equity and Treasury markets, and led to $3.3 billion of fund outflows during the month. At the same time, new issuance surged from just $5 billion in seasonally slow August to $43 billion in September, adding a negative supply-demand dynamic to an already challenging environment. The net result was that the market finished the quarter with the highest spread and yield, and lowest dollar price, in nearly 12 months. (Data: Merrill Lynch and J.P. Morgan.)

Within the Fund

For the third quarter of 2014, Delaware High-Yield Opportunities Fund (Class A and Institutional Class shares at net asset value) posted a negative return and underperformed its benchmark, the BofA Merrill Lynch U.S. High Yield Constrained Index.

The Fund’s top sector contributors were basic industry, financial services, and gaming. The top individual contributors were Salix Pharmaceuticals (gastrointestinal drugs), BWAY Holding (metal/plastic containers), and Hanesbrands (apparel). Salix gained on successful drug trials and merger-and-acquisition activity, BWAY launched a new debt issue that traded to a premium over issue price, and Hanesbrands gained on expanding margins and an accretive acquisition.

The Fund’s largest detractors on a relative basis during the quarter came from the energy, media, and retail sectors. Bottom individual credits were Hercules Offshore (energy contract driller), Caesars Growth Properties (casino operator), and Midstates Petroleum (energy exploration and production). Hercules declined due to the unexpected loss of several drilling contracts, Caesars declined due to debt-restructuring negotiations at an affiliate, and Midstates declined due to the nearly $15-a-barrel decline in oil prices since mid-June.


Given the impressive lineup of political and economic uncertainties facing the world, we believe “risk-off” trades and elevated high yield volatility will continue, particularly as we approach year end when underwriters try to lock in gains and trading liquidity tends to experience normal seasonal erosion. Thus, technical conditions should remain challenging.

However, with the U.S. economy on a moderate, noninflationary growth track, and with a majority of new high yield issuance dedicated to refinancing, we believe stable credit trends and the current low default environment should persist well into 2015. Accordingly, while spreads are wide relative to expected default losses, we believe they are probably appropriate relative to challenging liquidity conditions, and thus, we believe returns may approximate the market yield.

Bond ratings are determined by a nationally recognized statistical rating organization (NRSRO).

Per Standard & Poor’s credit rating agency, bonds rated below AAA are more susceptible to the adverse effects of changes in circumstances and economic conditions than those in higher-rated categories, but the obligor’s capacity to meet its financial commitment on the obligation is still strong. Bonds rated BBB exhibit adequate protection parameters, although adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics with BB indicating the least degree of speculation of the three.


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 high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.

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 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 12/17/2014)

Institutional ClassPriceNet changeYTD
Max offer price$3.95n/an/a

Total net assets (as of 11/30/2014)

$631.0 million all share classes

Lipper ranking (as of 11/30/2014)

YTD ranking499 / 623
1 year442 / 618
3 years71 / 479
5 years59 / 418
10 years30 / 281
Lipper classificationHigh Yield Funds

(View Lipper disclosure)

Benchmark, peer group

BofA Merrill Lynch U.S. High Yield Constrained Index (view)

Lipper High Yield Funds Average (view)

Additional information

Any Macquarie Group entity or fund noted on this page is not an authorized deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia) and that entity's obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542 (MBL). MBL does not guarantee or otherwise provide assurance in respect of the obligations of that entity, unless noted otherwise. 

Delaware Investments refers to Delaware Management Holdings, Inc. (DMHI) and its subsidiaries. Delaware Investments is a member of Macquarie Group. Macquarie Group refers to Macquarie Group Limited (MGL) and its subsidiaries and affiliates worldwide.

© 2014 Delaware Management Holdings, Inc.