Optimum Fixed Income Fund

Objective

Optimum Fixed Income Fund seeks a high level of income. The Fund may also seek growth of capital.

Strategy

Under normal circumstances, the Fund invests at least 80% of its net assets (plus borrowings for investment purposes) in fixed income securities. This policy may be changed only upon 60 days’ prior notice to shareholders. The Fund focuses on securities issued or guaranteed by the U.S. Government or its agencies or instrumentalities, corporate debt securities, taxable and tax-exempt municipal securities, and mortgage-backed and asset-backed securities.

The Fund invests primarily in investment-grade fixed income securities (that is, those rated BBB- or higher by Standard & Poor’s Ratings Services (S&P), Baa3 or higher by Moody’s Investors Service, Inc. (Moody’s), or similarly rated by another nationally recognized statistical rating organization (NRSRO), or, if unrated, those determined by Delaware Management Company (Manager) or a sub-adviser to be of comparable quality).

The Fund may also invest in high yield securities (commonly known as junk bonds) rated lower than BBB- by S&P or lower than Baa3 by Moody's or similarly rated by another NRSRO, or, if unrated, determined by the Manager or the sub-adviser to be of comparable quality. The Fund may invest in securities denominated in foreign currencies and U.S. dollar-denominated securities of foreign issuers. The Fund may also invest in banks loans and other floating-rate securities, preferred stocks, and structured product securities. In keeping with the Fund's investment objective, the Fund may also invest in futures, options, credit default swaps, and other derivative instruments. The Fund may purchase individual securities of any maturity.

The Manager has selected Pacific Investment Management Company LLC (PIMCO) to serve as the Fund’s sub-adviser. The sub-adviser is responsible for the day-to-day investment management of the portion of the Fund’s assets that the Manager allocates to the sub-adviser. The Manager also is responsible for the day-to-day investment management of a portion of the Fund’s assets. Within their respective portions of the Fund assets, both the Manager and PIMCO each manage an intermediate-term fixed income strategy. In addition, the Manager invests a portion of the Fund's assets in its diversified floating-rate strategy, and PIMCO manages a portion of its Fund assets in its low duration strategy. The Manager may change the allocation between the Manager and sub-adviser and the various strategies noted herein at any time. The relative values of the Manager’s and sub-adviser’s share of the Fund’s assets also may change over time. The Manager and the sub-adviser each select investments for their respective portions of the Fund based on their own investment style and strategy as described below.

In managing its intermediate-term portion of the Fund’s assets, the Manager allocates investments principally among the following four sectors of the fixed income securities market: (1) the U.S. investment grade sector; (2) the U.S. high yield sector; (3) the international developed markets sector; and (4) the emerging markets sector. The Manager determines how much to allocate to each of these sectors based on its evaluation of economic and market conditions and its assessment of the returns and potential for appreciation that can be achieved from investments in each of the sectors.

In managing its diversified floating-rate portion of the Fund's assets, the Manager principally invests in a diversified group of floating-rate securities, including but not limited to, investment grade corporate bonds, bank loans, high yield bonds, nonagency mortgage-backed securities, asset-backed securities, securities issued or guaranteed by the U.S. government, municipal bonds, and securities of foreign issuers in both developed and emerging markets. These floating-rate securities generally pay interest at rates that adjust whenever a specified interest rate changes and/or is reset on predetermined dates (such as the last day of a month or calendar quarter). Derivative instruments may also be utilized to effectively convert the fixed-rate interest payments from a group of certain Fund portfolio securities into floating-rate interest payments. Currently, the average duration of the Manager's diversified floating-rate portion of the Fund will generally not exceed one year. The average duration for the Manager's diversified floating-rate strategy will normally be lower than the Manager's intermediate-term strategy.

In selecting securities for both its intermediate-term and low duration portions of the Fund, PIMCO develops an outlook for interest rates, currency exchange rates and the economy; analyzes credit and call risks, and uses other security selection techniques. The proportion of the Fund’s assets committed to investment in securities with particular characteristics (such as quality, sector, interest rate or maturity) varies based on PIMCO’s outlook for the U.S. economy and the economies of other countries in the world, the financial markets and other factors.

PIMCO attempts to identify areas of the bond market that are undervalued relative to the rest of the market. PIMCO identifies these areas by grouping bonds into sectors such as money markets, governments, corporates, mortgages, asset-backed and international. Sophisticated proprietary software then assists in evaluating sectors and pricing specific securities. Once investment opportunities are identified, PIMCO will shift assets among sectors depending upon changes in relative valuations and credit spreads. There is no guarantee that PIMCO’s security selection techniques will produce the desired results.

Although PIMCO utilizes the above investment philosophy and process across all of the assets it manages for the Fund, the low duration portion of the assets that PIMCO manages will normally have a lower average duration than its intermediate-term portion of the Fund. Currently, PIMCO's low duration portion of its Fund assets has an average duration which ranges from one to three years based on PIMCO's forecast for interest rates.

Duration is a measure used to determine the sensitivity of a security's price to changes in interest rates. The longer a security's duration, the more sensitive it will be to changes in interest rates. The shorter a security's duration, the less sensitive it will be to changes in interest rates.

In response to market, economic, political, or other conditions, the Manager or the sub-adviser may temporarily use a different investment strategy for defensive purposes. If the Manager or the sub-adviser does so, different factors could affect the Fund’s performance and the Fund may not achieve its investment objective. The Fund’s investment objective is nonfundamental and may be changed without shareholder approval. However, the Fund’s Board of Trustees must approve any changes to nonfundamental investment objectives, and the Fund will notify shareholders at least 60 days prior to a material change in the Fund’s objective.

Fund information
Inception date08/01/2003
Dividends paid*Annually
Capital gains paid*December

*If any.

Fund identifiers
NASDAQOAFIX
CUSIP246118681
Investment minimums
Initial investment$2,500
Subsequent Investments$100
Account features
CheckwritingNo
Payroll DeductionNo
IRAsYes

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 (03/31/2014)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)1.81%-1.40%3.53%8.77%5.00%5.33%08/01/2003
Max offer pricen/a-5.80%1.95%7.77%4.52%4.88%
Barclays U.S. Aggregate Index1.84%-0.10%3.75%4.80%4.46%n/a
Average annual total return as of quarter-end (03/31/2014)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)1.81%1.81%-1.40%3.53%8.77%5.00%5.33%08/01/2003
Max offer price-2.75%-2.75%-5.80%1.95%7.77%4.52%4.88%
Barclays U.S. Aggregate Index1.84%1.84%-0.10%3.75%4.80%4.46%n/a

Returns for less than one year are not annualized.

Class A shares have a maximum up-front sales charge of 4.50% and are subject to an annual distribution fee.

Expense ratio
Gross1.30%
Net1.25%

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursements from July 29, 2013 to July 29, 2014. Please see the fee table in the Fund's prospectus for more information.

Performance characteristics - as of 03/31/2014
Annualized standard deviation, 3 years (view definition)3.28
SEC 30-day yield with waiver (view definition)2.16%
SEC 30-day yield without waiver (view definition)2.16%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
20141.81%n/an/an/an/a
20130.10%-3.53%0.21%0.17%-3.06%
20121.25%2.59%2.13%0.56%6.68%
20111.27%1.96%1.66%1.68%6.74%
20103.45%2.85%3.62%-0.85%9.32%
20091.31%9.23%9.75%3.40%25.58%
20080.11%-1.04%-3.11%-5.10%-8.91%
20071.91%-0.30%2.23%1.71%5.65%
2006-0.11%-0.23%3.80%1.94%5.45%
2005-0.78%2.30%-1.00%0.15%0.63%
20042.39%-2.24%3.45%2.23%5.86%

Investment managers

Paul Grillo

Paul Grillo, CFA

Co-Chief Investment Officer — Total Return Fixed Income Strategy

Start date on the Fund: August 2003

(View bio)


Thomas Chow

Thomas H. Chow, CFA

Chief Investment Officer — Corporate Credit

Start date on the Fund: May 2007

(View bio)


Roger Early

Roger Early, CPA, CFA, CFP

Co-Chief Investment Officer — Total Return Fixed Income Strategy

Start date on the Fund: May 2007

(View bio)


Wen-Dar Chen

Wen-Dar Chen, Ph.D.

Portfolio Manager — International Debt

Start date on the Fund: May 2007

(View bio)


David Hillmeyer

David Hillmeyer, CFA

Senior Portfolio Manager

Start date on the Fund: April 2011

(View bio)


Steven Landis

Steven A. Landis 

Senior Portfolio Manager — Emerging Markets Debt

Start date on the Fund: September 2013

(View bio)


Sub-advisor

Pacific Investment Management Company, LLC (PIMCO)

Saumil H. Parikh

Managing Director and Portfolio Manager

Start date on the Fund: April 2010

Saumil H. Parikh is primarily responsible for the day-to-day management of PIMCO’s share of the Fund’s assets. Parikh is a managing director and generalist portfolio manager in the Newport Beach office, focusing on asset allocation, multisector fixed income and absolute return portfolios. He previously was a member of the short-term, mortgage and global specialist portfolio management teams. Prior to joining PIMCO in 2000, Parikh was a financial economist and market strategist at UBS Warburg. He has 14 years of investment experience and holds undergraduate degrees in economics and biology from Grinnell College.

You may qualify for sales-charge discounts if you and your family invest, or agree to invest in the future, at least $100,000 in the Optimum Funds. More information about these and other discounts is available from your financial advisor, in the Fund's prospectus under the section entitled "About your account," and in the Fund's statement of additional information under the section entitled "Purchasing shares."

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 price4.50%
Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lowernone
Annual fund operating expenses
Management fees0.56%
Distribution and service (12b-1) fees0.25%
Other expenses0.49%
Total annual fund operating expenses1.30%
Fee waivers and expense reimbursements(0.05%)
Total annual fund operating expenses after fee waivers and expense reimbursements1.25%

1The Fund’s investment manager, Delaware Management Company (Manager), is contractually waiving its investment advisory fees and/or paying 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 1.00% of the Fund’s average daily net assets from July 29, 2013 through July 29, 2014. The waiver and reimbursement may be terminated only by agreement of the Manager and the Fund.

The chart below lists the percentage of the Fund's total assets under management that each sub-advisor manages on behalf of the Fund. The percentages include securities, cash, and any other assets managed by each sub-advisor in its sleeve of the Fund. These percentage allocations should be updated some time after 30 days following a given month end.

Date Delaware
Management Company
PIMCO Total
Strategy Multisector Floating-rate
multisector
Total return Low duration
03/31/2013 51.46% 0.00% 48.54% 0.00% 100%
04/30/2013 51.50% 0.00% 48.50% 0.00% 100%
05/31/2013 51.41% 0.00% 48.59% 0.00% 100%
06/30/2013 51.35% 0.00% 48.65% 0.00% 100%
07/31/2013 51.46% 0.00% 48.54% 0.00% 100%
08/31/2013 51.44% 0.00% 48.56% 0.00% 100%
09/30/2013 51.43% 0.00% 48.57% 0.00% 100%
10/31/2013 51.56% 0.00% 48.44% 0.00% 100%
11/30/2013 51.56% 0.00% 48.44% 0.00% 100%
12/31/2013 51.77% 0.00% 48.23% 0.00% 100%
01/31/2014 46.51% 5.13% 43.55% 4.82% 100%
02/28/2014 46.59% 5.18% 43.44% 4.79% 100%

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, if available, its summary prospectus, which may be obtained by visiting the fund literature page or calling 800 914-0278. Investors should read the prospectus and, if available, 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.

The Funds 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.

Securities in the lowest of the rating categories considered to be investment grade (that is, Baa or BBB) have some speculative characteristics.

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.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 04/15/2014)

Class APriceNet changeYTD
NAV$9.59no chg2.35%
Max offer price$10.04n/an/a

Total net assets (as of 03/31/2014)

$1.7 billion all share classes

Lipper ranking (as of 03/31/2014)

YTD ranking377 / 531
1 year475 / 507
3 years305 / 456
5 years26 / 392
10 years33 / 276
Lipper classificationCore Bond Funds

(View Lipper disclosure)

Holdings

Benchmark, peer group

Barclays U.S. Aggregate Index (view)

Lipper Core Bond Funds Average (view)