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 (02/28/2015)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)3.88%14.05%17.50%18.20%9.55%8.07%02/03/1994
Russell 1000 Growth Index5.03%16.24%18.05%17.21%9.28%n/a
Average annual total return as of quarter-end (12/31/2014)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)6.58%12.69%12.69%20.60%16.70%8.85%7.94%02/03/1994
Russell 1000 Growth Index4.78%13.05%13.05%20.26%15.81%8.49%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
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 02/28/2015
Number of holdings33
Market cap (median)$49.21 billion
Market cap (weighted average)$89.25 billion
Portfolio turnover (last fiscal year)25%
Beta - (relative to Russell 1000 Growth Index) (view definition)1.03
Annualized standard deviation, 3 years (view definition)10.59
Portfolio composition as of 02/28/2015Total may not equal 100% due to rounding.
Domestic equities91.1%
International equities & depositary receipts7.7%
Cash and cash equivalents1.2%
Top 10 holdings as of 02/28/2015
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Celgene Corp.5.8%
Allergan Inc.5.5%
Visa Inc.5.1%
Walgreens Boots Alliance Inc.4.9%
QUALCOMM Inc.4.6%
eBay Inc.4.6%
Microsoft Corp.4.4%
MasterCard Inc.4.4%
Liberty Interactive Corp.4.0%
Crown Castle International Corp.3.9%
Total % Portfolio in Top 10 holdings47.2%
Top sectors as of 02/28/2015
List excludes cash and cash equivalents.
Sector% of portfolio
Consumer Discretionary24.7%
Technology23.6%
Financial Services20.2%
Health Care18.5%
Energy7.0%
Consumer Staples4.9%
Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ 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: 20

(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. 

View printable commentary E-mail this page

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Delaware U.S. Growth Fund Quarterly commentary December 31, 2014

Within the Fund

For the fourth quarter of 2014, Delaware U.S. Growth Fund (Class A and Institutional Class shares at net asset value) outperformed its benchmark, the Russell 1000® Growth Index. Strong relative performance in the consumer staples and financial services sectors was partially offset by weak relative performance in the technology sector as well as lack of exposure to the producer durables sector.

Walgreens Boots Alliance was a strong contributor to the Fund’s performance during the fourth quarter of 2014. The stock recovered from relative weakness during the prior quarter due to mixed operating results and the announcement that the company would not be pursuing a corporate tax inversion through its acquisition of Alliance Boots. During this period, the company reported stronger-than-expected financial results driven, in part, by the expansion of healthcare coverage under the Affordable Care Act. We believe the recent partnership with Alliance Boots is already creating value with executive management appointments and merger synergies that could lead to upside in certain financial metrics. Additionally, we believe recent activist activity surrounding the company should help with management’s focus and urgency in unlocking additional value for shareholders.

L Brands was a contributor to performance during the quarter. The stock rose, in part, as the company reported stronger-than-expected financial results and strong sales through November’s holiday season. The company’s focus on effectively managing costs, inventory, and the speed at which it brings new initiatives and products to market has been an important factor during a relatively soft consumer spending environment. Additionally, the company’s international business — which we believe should become a material source of long term growth for the company — continues to experience attractive progress.

Celgene also contributed to performance during the quarter. The company reported financial results that beat consensus expectations and increased future guidance. The company also reported strong phase-2 trial results for a Crohn’s disease drug that supported Celgene’s strategy of diversifying its product offerings — in this case, diseases affecting the immune system. Celgene remains a leading player in the treatment of blood cancers with a growing product pipeline in breast, lung, and pancreatic cancer treatments. Additionally, the company continues to benefit from large growth prospects driven by additional indications of its drugs, by increased usage of existing drugs, and by international growth opportunities.

Williams Companies was a significant detractor from performance during the quarter. The stock, along with others within the oil and natural gas industry, experienced weakness resulting from falling oil and natural gas prices and the Organization of Petroleum Exporting Countries (OPEC)’s decision not to cut production. We are willing to live with a certain degree of cyclicality in the energy cycle given that this company operates as an energy infrastructure provider through its natural gas pipeline system, processing facilities, and storage facilities throughout the United States — therefore it should be somewhat buffered by swings in industry spending patterns. We believe natural gas distribution is a gating factor to the increased potential use of natural gas in the North American energy grid and Williams Companies seems to have an attractive competitive position in which to take advantage of this industry structure.

Novo Nordisk was a detractor from performance during the quarter. The stock experienced weakness after the company lowered forward sales guidance due, in part, to lower growth expectations in China and continued pressure from generic competition. Despite the latest stock weakness, we continue to believe the company should continue to see a growing need for its products. Unfortunately, diabetes is increasing globally due to rising obesity rates in developing markets and the growth of a middle class in emerging markets that tends to result in a more protein-based diet.

Finally, EOG Resources was also a detractor from performance during the quarter. Similar to Williams Companies, the stock experienced weakness resulting from falling oil and natural gas prices. We continue to believe that the company is well positioned to provide exposure to the North American shale oil and gas industry which, in our view, is an attractive secular growth area in energy. It's important to note that although the stock can, at times, be affected by fluctuations in the price of oil and natural gas, we don't believe that the company's long-term intrinsic business value is dependent solely on commodity prices. Rather, we believe EOG's management team has a unique capital allocation discipline relative to other energy companies that could increase the company's potential to perform and add value through a variety of commodity prices and economic environments.

Outlook

Despite positive absolute returns in the equity market during the past few years, we believe the relatively tepid market sentiment demonstrates to us 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.

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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) 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, a series of Delaware Management Business Trust, has ultimate responsibility for all investment advisory services.

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 03/27/2015)

Institutional ClassPriceNet changeYTD
NAV$28.060.112.78%
Max offer price$28.06n/an/a

Total net assets (as of 02/28/2015)

$3.7 billion all share classes

Lipper ranking (as of 02/28/2015)

YTD ranking556 / 725
1 year265 / 697
3 years252 / 616
5 years45 / 542
10 years72 / 386
Lipper classificationLarge-Cap Growth Funds

(View Lipper disclosure)

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.

© 2015 Delaware Management Holdings, Inc.

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