Delaware Value® Fund

Objective

Delaware Value® Fund seeks long-term capital appreciation.

Strategy

The Fund invests in large-capitalization companies, seeking consistent long-term performance. The Fund follows a traditional value-oriented investment philosophy using a research-intensive approach.

Fund information
Inception date09/15/1998
Dividends paid (if any)Quarterly
Capital gains paid (if any)November or December
Fund identifiers
NASDAQDDVIX
CUSIP24610C857

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 (01/31/2016)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-4.49%-2.58%11.04%12.09%6.88%7.09%09/15/1998
Russell 1000 Value Index-5.17%-5.00%8.79%9.61%5.19%n/a
Average annual total return as of quarter-end (12/31/2015)
Current quarter1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)7.33%-0.35%14.77%13.56%7.63%7.41%09/15/1998
Russell 1000 Value Index5.64%-3.83%13.08%11.27%6.16%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
Gross0.74%
Net0.74%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
20151.83%-1.67%-7.28%7.33%-0.35%
20142.79%5.51%1.74%3.05%13.69%
201312.24%3.91%4.47%9.52%33.44%
20128.25%-0.42%4.79%1.35%14.48%
20117.86%1.71%-12.91%14.23%9.14%
20103.75%-9.68%12.60%9.96%16.03%
2009-10.67%10.53%11.45%7.03%17.77%
2008-9.70%-5.74%-8.79%-13.55%-32.88%
20070.45%6.44%-2.85%-6.39%-2.77%
20066.33%0.34%8.44%7.07%23.88%

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

Portfolio characteristics - as of 01/31/2016
Number of holdings33
Market cap (median)$39.31 billion
Market cap (weighted average)$74.31 billion
Portfolio turnover (last fiscal year)12%
Beta, 3 years (relative to Russell 1000 Value Index) (view definition)0.92
Annualized standard deviation, 3 years (view definition)10.48
Portfolio composition as of 01/31/2016Total may not equal 100% due to rounding.
Domestic equities98.8%
Cash and cash equivalents1.2%
Top 10 holdings as of 01/31/2016
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Baxalta Inc.3.4%
ConocoPhillips3.3%
Raytheon Co.3.2%
Verizon Communications Inc.3.2%
Halliburton Co.3.2%
AT&T Inc.3.1%
Johnson & Johnson3.1%
Occidental Petroleum Corp.3.1%
CA Inc.3.1%
Kraft Heinz Co.3.1%
Total % Portfolio in Top 10 holdings31.8%

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

Top sectors as of 01/31/2016
List excludes cash and cash equivalents.
Sector% of portfolio
Healthcare21.4%
Energy13.5%
Consumer staples12.2%
Information technology12.2%
Financials12.0%
Industrials9.2%
Telecommunication services6.3%
Consumer discretionary6.0%
Utilities3.1%
Materials3.0%
Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20160.0000.000
20150.2430.332
20140.0000.289
20130.0000.258
20120.0000.199
20110.0000.221
20100.0000.202
20090.0000.209
20080.0000.279
20070.6500.274
20060.2240.223

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. 

The process is our star

The Large-Cap Value team at Delaware Investments discusses why a fundamental research-driven process, with roots going back to the 1970s, is the true star of the team.

Watch the video

Read video transcript

Ty Nutt

Ty Nutt  

Senior Vice President, Senior Portfolio Manager, Team Leader

Start date on the Fund: July 2004

Years of industry experience: 33

(View bio)


Kristen Bartholdson

Kristen E. Bartholdson 

Vice President, Senior Portfolio Manager

Start date on the Fund: December 2008

Years of industry experience: 15

(View bio)


Nik Lalvani

Nikhil G. Lalvani, CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: October 2006

Years of industry experience: 19

(View bio)


Bob Vogel

Robert A. Vogel Jr., CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: July 2004

Years of industry experience: 24

(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 fees0.54%
Distribution and service (12b-1) feesnone
Other expenses0.20%
Total annual fund operating expenses0.74%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements0.74%

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

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Delaware Value® Fund Quarterly commentary December 31, 2015

Within the Fund

For the fourth quarter of 2015, Delaware Value Fund (Institutional Class shares and Class A shares at net asset value) outperformed its benchmark, the Russell 1000® Value Index. Stock selection was the main driver of outperformance; sector allocations were also a source of positive attribution.

Investments in consumer staples and utilities caused the largest drags on relative returns in the fourth quarter, primarily because of stock selection. The Fund’s four staples holdings trailed those in the benchmark. Shares of grain processor and agricultural services provider Archer Daniels Midland, down -10.9%, led the sector lower and were among the weakest of all portfolio holdings. In November, the company reported quarterly results that fell short of consensus expectations. The strong U.S. dollar has hurt agricultural commodity prices and dented the company’s revenues from outside the United States. Furthermore, lower fuel prices have been detrimental to margins in the company’s ethanol business, and softer global demand for North American grain led to lower export volumes. In the utilities sector, the Fund’s lone holding, California-based Edison International, fell -5.4% compared to a gain of 1.5% for the sector in the benchmark. The shares fell after the company reported quarterly results in late October that were slightly below analysts’ consensus and again in early November after the company’s general rate case decision was issued by the regulator. In December, the company raised its dividend 15%.

Investments in the healthcare and materials sectors contributed most to relative performance during the quarter. The Fund also benefited from an overweight in healthcare. Baxalta — a biopharmaceuticals manufacturer that was formed in July when Baxter International split into two companies — led the sector higher with a gain of 24.1%. Ireland-based Shire PLC has been pursuing Baxalta as a potential acquisition target. The companies appeared to be making progress in their negotiation, which helped push Baxalta’s shares higher. In the materials sector, the Fund’s lone holding, DuPont, rebounded in early October after the company announced the retirement of its CEO and its plan to increase expense savings targets and accelerate the timeframe for those savings. In December, DuPont declared its intention to merge with Dow Chemical in a deal that would be valued at approximately $120 billion. The combined company would then look to divide into three separate, publicly-traded businesses. In the quarter, DuPont rose 39.0% versus a gain of 8.6% for the materials sector in the benchmark.

We sold the Fund’s partial position in Baxter International in October and used the proceeds to round up Baxalta to a full 3% target weight position. We had purchased Baxter in July 2010 and had previously owned it between 2002 and 2008. In mid-2010, the company faced investor concerns about market pricing for a key immunology drug, had to recall one of its infusion pumps, and reduced its earnings guidance, leading to a significant share price decline. Baxter appeared attractively valued at the lower price, especially with its history of solid revenue, earnings, and dividend growth. In mid-summer 2015, after approximately five years in the Fund’s portfolio, Baxter was about 15% from its price target. After the split into two companies, we evaluated the potential long-term attractiveness of each business as a stand-alone investment. To us, Baxalta represented a more compelling risk-reward opportunity for several reasons, including a more attractive valuation relative to its growth prospects; improving free cash flow dynamics given expectations for declining capital expenditures; a product portfolio focused on three growing and sustainable therapeutic areas: hematology, immunology, and oncology; our belief that a key drug franchise (Advate) was more durable versus market expectations and that Baxalta’s stock price reflected those overly draconian market share assumptions; and potential for more limited downside risk because of acquisition interest from Shire.

In November, we made decisions to round up all but one of the portfolio’s five energy stocks. In most cases, this meant adding to Chevron, ConocoPhillips, and Halliburton since Occidental Petroleum was already at its targeted position weight. We developed new intrinsic value price targets using lower oil price assumptions and concluded that the longer-term risk-reward profile of each of these holdings remained attractive. We believed a bottoming process in oil prices was starting to emerge. Spare capacity within the Organization of Petroleum Exporting Companies (OPEC) was at the low end of its historical range and, more broadly, exploration and production companies were continuing to make substantial cuts to their capital expenditure budgets. We were seeing smaller, more highly-leveraged producers experience financial stress, and there appeared to be more fear gripping the energy market. Meanwhile, the chaos in the Middle East wasn’t being priced into crude oil, in our view. The one energy position that was not rounded up and remains on hold is Marathon Oil. We are looking for evidence that the company can work through the execution challenges it’s been experiencing in one of the main basins in which it operates.

Outlook

Looking out over the next five years or longer, we are cautiously optimistic about the prospects for equities, especially those of higher-quality companies that are trading below their long-term average valuation multiples. While we think annualized total returns for U.S. equities during this period could be below average, it’s our belief that these modest returns should be competitive versus other asset classes. What’s behind our thinking? Primarily, the stock market’s stretched valuation. Historically, elevated starting valuations have resulted in below-average long-term total returns.

In light of relatively high valuations across much of the U.S. equity market, it’s been difficult for us to identify undervalued purchase candidates with attractive quality metrics. We’ve begun researching a few opportunities in the consumer discretionary sector and are considering some longer-range ideas in consumer staples, financials, and industrials. Overall, we expect to maintain a defensive tilt in the portfolio, with overweight allocations in consumer staples, healthcare, and telecommunication services, and underweights in some of the more-cyclical areas of the market.

[15831]

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.

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.

Because the Fund expects to hold a concentrated portfolio of a limited number of securities, the Fund's risk is increased because each investment has a greater effect on the Fund's overall performance.

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 02/12/2016)

Institutional ClassPriceNet change
NAV$16.240.26
Max offer price$16.24n/a

Total net assets (as of 01/31/2016)

$9.7 billion all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 01/31/2016)
RatingNo. of funds
Overall51190
3 Yrs51190
5 Yrs51040
10 Yrs5757
Morningstar categoryLarge Value

(View Morningstar disclosure)

Lipper ranking (as of 01/31/2016)

YTD ranking107 / 558
1 year46 / 510
3 years11 / 452
5 years5 / 406
10 years8 / 298
Lipper classificationLarge-Cap Value Funds

(View Lipper disclosure)

Benchmark, peer group

Russell 1000® Value Index (view definition)

Lipper Large-Cap Value Funds Average (view definition)

Additional information