Delaware U.S. Growth Fund

Objective

Delaware U.S. Growth Fund seeks long-term capital appreciation by investing in equity securities of companies we believe have the potential for sustainable free cash flow growth.

Strategy

The Fund invests in stocks of medium- to large-sized companies that are believed to have long-term capital appreciation potential and are expected to grow faster than the U.S. economy.

Fund information
Inception date02/03/1994
Dividends paid (if any)Annually
Capital gains paid (if any)November or December
Fund identifiers
NASDAQDEUIX
CUSIP245917802

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 (07/31/2015)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)8.21%16.93%19.64%19.76%8.85%8.12%02/03/1994
Russell 1000 Growth Index7.49%16.08%18.78%17.75%8.95%n/a
Average annual total return as of quarter-end (06/30/2015)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)1.43%4.25%11.75%18.50%19.99%9.29%7.96%02/03/1994
Russell 1000 Growth Index0.12%3.96%10.56%17.99%18.59%9.10%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
Gross0.81%
Net0.81%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
20152.78%1.43%n/an/an/a
2014-0.04%5.17%0.57%6.58%12.69%
201310.05%0.05%9.81%10.98%34.19%
201215.94%-5.21%6.29%-0.70%15.99%
20115.98%1.71%-10.34%11.75%8.00%
20102.45%-11.44%14.86%9.65%14.27%
2009-0.11%15.60%12.82%10.77%44.30%
2008-11.03%-3.85%-15.00%-22.31%-43.51%
20070.49%4.21%8.08%0.00%13.19%
20063.91%-6.06%-0.89%6.06%2.61%
2005-4.04%4.38%9.71%3.68%13.93%

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

Portfolio characteristics - as of 07/31/2015
Number of holdings32
Market cap (median)$47.48 billion
Market cap (weighted average)$104.94 billion
Portfolio turnover (last fiscal year)25%
Beta, 3 years (relative to Russell 1000 Growth Index) (view definition)1.02
Annualized standard deviation, 3 years (view definition)9.68
Portfolio composition as of 07/31/2015Total may not equal 100% due to rounding.
Domestic equities92.8%
International equities & depositary receipts5.5%
Cash and cash equivalents1.7%
Top 10 holdings as of 07/31/2015
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
QUALCOMM Inc.6.1%
Celgene Corp.6.1%
Visa Inc.5.4%
Walgreens Boots Alliance Inc.4.9%
Equinix Inc.4.6%
MasterCard Inc.4.6%
Allergan plc4.5%
Valeant Pharmaceuticals International Inc.4.3%
Liberty Interactive Corp. QVC Group3.8%
PayPal Holdings Inc.3.8%
Total % Portfolio in Top 10 holdings48.1%
Top sectors as of 07/31/2015
List excludes cash and cash equivalents.
Sector% of portfolio
Financial Services24.7%
Technology24.1%
Health Care21.1%
Consumer Discretionary20.5%
Consumer Staples4.9%
Energy3.0%
Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20150.0000.000
20140.6950.118
20130.0000.019
20120.0000.028
20110.0000.021
20100.0000.022
20090.0000.009
20080.0000.017
20070.0000.000
20060.0000.000
20050.0000.000

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. 

Investment manager

Delaware Management Company, a series of Delaware Management Business Trust

Sub-advisor

Jackson Square Partners, LLC


Jeff VanHarte

Jeffrey S. Van Harte, CFA

Chairman, Chief Investment Officer — Jackson Square Partners, LLC

Start date on the Fund: April 2005

Years of industry experience: 34

(View bio)


Chris Bonavico

Christopher J. Bonavico, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: April 2005

Years of industry experience: 27

(View bio)


Chris Ericksen

Christopher M. Ericksen, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: September 2005

Years of industry experience: 21

(View bio)


Daniel J. Prislin, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: April 2005

Years of industry experience: 21

(View bio)


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

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 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 fees0.57%
Distribution and service (12b-1) feesnone
Other expenses0.24%
Total annual fund operating expenses0.81%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements0.81%

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

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Delaware U.S. Growth Fund Quarterly commentary June 30, 2015

Within the Fund

For the second quarter of 2015, Delaware U.S. Growth Fund (Institutional Class shares and Class A shares at net asset value) outperformed its benchmark, the Russell 1000® Growth Index. Strong relative performance in the financial services and our lack of exposure to producer durables was partially offset by weak relative performance in the consumer discretionary sector.

Valeant Pharmaceuticals International contributed to the Fund’s performance during the quarter. We believe the stock strength was driven, in part, by the company’s continued acquisition strategy and strong reported financial results. Additionally, the company received FDA approval for a drug to help treat irritable bowel syndrome (IBS) that was acquired through the company’s recent acquisition of Salix. Valeant is looking to grow by acquiring smaller and more nimble companies that it can integrate into its platform. In general, we don’t favor companies that are growing through acquisitions — they often have a difficult time generating the types of returns on investment that we find attractive and are inherently difficult to research given their acquisition approach. However, Valeant has a disciplined capital allocation approach with an attractive acquisition track record. We believe we are already seeing benefits of this recent acquisition and we are supportive of the company’s acquisition strategy going forward.

Equinix also contributed to performance during the quarter. The stock rose, in part, as the company received a favorable real estate investment trust (REIT) status ruling from the IRS. The company also reported financial results that beat consensus estimates and is in talks to buy a peer data-center company based out of Europe that should further strengthen its global presence. The company continues to benefit from significant opportunities associated with cloud computing and its disruption in the information technology supply chain. Increased globalization and the robust need for a secure and accessible network to meet the needs of a dispersed user base seems to be creating significant demand for a company like Equinix. We believe its innovative product offerings could allow the company to be positioned well in a technology spending environment that is focused on addressing the needs of enterprises struggling to maintain the highest level of network performance and quality of service for global users.

Electronic Arts was a contributor to performance during the quarter. The company reported better-than-expected financial results and forward guidance driven, in part, by several individual game titles, cost controls, and growth in digital game sales. Additionally, the company had a particularly strong showing at this year’s Electronic Entertainment Expo (E3) after its upcoming game, “Star Wars: Battlefront,” received positive reviews. We believe the company should continue to benefit from upcoming and established game franchises and its growth within the digital downloads and mobile phone gaming channels, which will likely be increasingly important for the company's growth moving forward.

QUALCOMM detracted from the Fund’s performance during the quarter. The stock experienced weakness amid an increasingly competitive environment within the semiconductor space. Recently there has been a wave of mergers among peers which could lead to further cost-cutting synergies and scale among rivals. In order to stay competitive, there is pressure for QUALCOMM to pursue various strategies including a potential acquisition, spin-out of the company’s chip business and patent-licensing business, or funding of aggressive share buybacks. While we are closely monitoring the company for any future developments, we believe QUALCOMM continues to benefit from its unique intellectual property and patent position in the semiconductor industry, as well as its technology applications to aid in the significant growth and proliferation of wireless devices.

L Brands also detracted from performance during the quarter. Despite reporting relatively strong financial results, the stock experienced weakness as future guidance fell below consensus expectations. Despite this, we are encouraged by the company’s strong international sales in both Victoria’s Secret and Bath & Body Works. The company’s international business — which we believe should become a material source of long-term growth for the company — continues to experience progress.

Finally, Wynn Resorts was a detractor from performance during the quarter. The stock reported financial results that fell below consensus estimates and also cut its dividend. The company’s Macau location continues to experience weakness and uncertainty due, in part, to China’s anti-corruption campaign, which seems to be deterring VIP visits. We feel the Macau location is especially attractive given its geographic proximity to the South China mainland and the growing middle class and underpenetration within China. We believe Wynn Resorts is the most attractive operator in the Macau market based on its product differentiation and focus on the consumer experience versus other operators. We believe we have the stock appropriately weighted in the portfolio to mitigate what we believe to be transitory weakness and the uncertainty surrounding the government’s plans for Macau.

Outlook

Despite positive absolute returns in the equity market during the past few years, we believe the relatively tepid market sentiment demonstrate that there are more than just fundamental factors affecting stock prices. A lack of significant bull market sentiment suggests to us that many investors appear to be struggling with accurately predicting the pace of global economic recovery and are assessing factors that threaten economic fundamentals (for example, central bank actions and fiscal policy debates across the globe). While some fundamentals in various geographies may be trending in a positive direction (from a very low base during the global financial crisis in 2008-2009), we don’t believe we are entering into a typical post-recessionary global boom cycle. Rather, we believe the lingering effects of the credit crisis years ago could lead to moderate growth, at best, for the intermediate term. In such a tenuous environment, we believe the quality of a company’s business model, competitive position, and management may prove to be of utmost importance.

Regardless of the economic outcome, we remain consistent in our long-term investment philosophy: We want to own what we view as strong secular-growth companies with solid business models and competitive positions that we believe can grow market share and have the potential to deliver shareholder value in a variety of market environments.

[14838]

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.

Jackson Square Partners, LLC (JSP), a U.S. registered investment advisor, is the sub-advisor to the Fund. As sub-advisor, JSP is responsible for day-to-day management of the Fund’s assets. Although JSP serves as sub-advisor, the investment manager, Delaware Management Company (DMC), a series of Delaware Management Business Trust, has ultimate responsibility for all investment advisory services.

All third-party marks cited are the property of their respective owners.

Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group.

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.

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 09/01/2015)

Institutional ClassPriceNet changeYTD
NAV$26.74-0.68-2.05%
Max offer price$26.74n/an/a

Total net assets (as of 07/31/2015)

$4.0 billion all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 07/31/2015)
RatingNo. of funds
Overall41530
3 Yrs41530
5 Yrs51327
10 Yrs4925
Morningstar categoryLarge Growth

(View Morningstar disclosure)

Lipper ranking (as of 07/31/2015)

YTD ranking286 / 688
1 year254 / 678
3 years199 / 607
5 years17 / 526
10 years116 / 388
Lipper classificationLarge-Cap Growth Funds

(View Lipper disclosure)

Benchmark, peer group

Russell 1000® Growth Index (view definition)

Lipper Large-Cap Growth Funds Average (view definition)

Additional information