Optimum Small-Mid Cap Value Fund seeks long-term growth of capital.
Under normal circumstances, the Fund invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in securities of small- and mid-market capitalization companies (80% policy). This policy may be changed only upon 60 days' prior notice to shareholders. For purposes of this Fund, small-market capitalization companies are those companies whose market capitalization is similar to the market capitalization of companies in the Russell 2000® Value Index, and mid-market capitalization companies are those companies whose market capitalization is similar to the market capitalization of companies in the Russell Midcap® Value Index. As of June 30, 2015, the Russell 2000 Value Index had a market capitalization range between $87.6 million and $4.4 billion, and the Russell Midcap Value Index had a market capitalization range between $1.6 billion and $27.5 billion. The market capitalization ranges for these Indices will change on a periodic basis. A company's market capitalization is based on its current market capitalization or its market capitalization at the time of the Fund's investment. Companies whose market capitalization no longer meets the respective definition above after purchase continue to be considered either small- or mid-capitalization companies, as applicable, for purposes of this 80% policy.
The Fund intends to invest primarily in common stocks of U.S. companies, but it may also invest in other securities that the sub-advisors believe provide opportunities for capital growth, such as preferred stocks, warrants, and securities convertible into common stocks. In keeping with the Fund's investment objective, the Fund may also invest in foreign securities, including American Depositary Receipts (ADRs) and other depositary receipts and shares; futures, options, and other derivatives; and fixed income securities, including those rated below investment grade.
The Fund's manager, Delaware Management Company (Manager), has selected The Delafield Group, a division of Tocqueville Asset Management L.P. (The Delafield Group of Tocqueville or Tocqueville), The Killen Group, Inc. (Killen), and Westwood Management Corp. (Westwood) to serve as the Fund's sub-advisors. Each sub-advisor is responsible for the day-to-day investment management of the portion of the Fund's assets that the Manager allocates to the sub-advisor. The Manager may change the allocation at any time. The relative values of each sub-advisor's share of the Fund's assets also may change over time. Each sub-advisor selects investments for its portion of the Fund based on its own investment style and strategy.
In managing its portion of the Fund's assets, The Delafield Group of Tocqueville considers factors including the value of individual securities relative to other investment alternatives, trends in the determinants of corporate profits, corporate cash flow, balance sheet changes, management capability and practices, and the economic and political outlook. Although the balance sheet of a company is important to the sub-advisor's analysis, the sub-advisor may invest in financially troubled companies if the sub-advisor believes that the underlying assets are worth far more than the market price of the shares. In addition, companies generating free cash flow will be considered attractive. Securities will also be assessed upon their earning power, stated asset value, and off-the-balance sheet values. The Delafield Group of Tocqueville intends to invest in companies that are managed for the benefit of their shareholders and not by management that believes the most important measure of a company's success is its size.
In managing its portion of the Fund's assets, Killen adheres to the principles of value investing, using a fundamental, bottom-up approach. Investment research is conducted and produced internally by Killen's own staff. Killen seeks to buy securities that it believes to be undervalued and that offer the potential for long-term capital gains. Generally, the sub-advisor's average holding period for securities is three to four years. Killen will typically hold approximately 40 stocks in its portion of the Fund's assets.
In managing its portion of the Fund's assets, Westwood utilizes a value style of investing in choosing common stocks that it believes have limited downside risk and it believes are currently undervalued in the market. Other key metrics for evaluating the risk/return profile of an investment may include, but are not limited to, strong free cash flow; an improving return on equity; a declining debt/equity ratio; and in the case of common equities, positive earnings surprises without a corresponding increase in Wall Street estimates. Westwood also has disciplines in place that generally serve as sell signals, such as a security reaching a predetermined price target or a change to a company's fundamentals that negatively impacts the original investment thesis.
In response to market, economic, political, or other conditions, a sub-advisor may temporarily use a different investment strategy for defensive purposes. If a sub-advisor 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 can be changed without shareholder approval. However, the Fund's Board of Trustees must approve any changes to nonfundamental investment objectives, and the Fund's shareholders would be given at least 60 days' notice prior to any such change.
|Dividends paid (if any)||Annually|
|Capital gains paid (if any)||November or December|
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 (09/30/2015)|
|YTD||1 year||3 year||5 year||10 year||Lifetime||Inception date|
|NAV (view definition)||-11.85%||-9.69%||6.84%||8.58%||3.74%||7.07%||08/01/2003|
|Max offer price||-16.92%||-14.90%||4.77%||7.30%||3.13%||6.55%|
|Russell 2500 Value Index||-8.04%||-2.44%||11.00%||11.49%||6.31%||n/a|
|Average annual total return as of quarter-end (09/30/2015)|
|Current quarter||YTD||1 year||3 year||5 year||10 year||Lifetime||Inception date|
|NAV (view definition)||-13.08%||-11.85%||-9.69%||6.84%||8.58%||3.74%||7.07%||08/01/2003|
|Max offer price||-18.08%||n/a||-14.90%||4.77%||7.30%||3.13%||6.55%|
|Russell 2500 Value Index||n/a||-8.04%||-2.44%||11.00%||11.49%||6.31%||n/a|
Returns for less than one year are not annualized.
Class A shares have a maximum up-front sales charge of 5.75% and are subject to an annual distribution fee.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursements from July 29, 2015 to July 29, 2016. Please see the fee table in the Fund’s prospectus for more information.
|Performance characteristics - as of 09/30/2015|
|Annualized standard deviation, 3 years (view definition)||12.58|
|Quarterly total returns @ NAV|
|Year||1st quarter||2nd quarter||3rd quarter||4th quarter||Annual return|
Delaware Management Company
The Delafield Group, a division of Tocqueville Asset Management, L.P.
J. Dennis Delafield, CFA
Start date on the Fund: August 2003
J. Dennis Delafield shares primary responsibility for the day-to-day management of The Delafield Group of Tocqueville’s share of the Fund’s assets. Delafield is a managing director of Tocqueville and has been associated with Tocqueville since September 2009. Prior to joining Tocqueville, Delafield was a managing director of Reich & Tang Asset Management, LLC. He has held Fund responsibilities since the Fund’s inception.
Vincent Sellecchia, CFA
Start date on the Fund: August 2003
Vincent Sellecchia shares primary responsibility for the day-to-day management of The Delafield Group of Tocqueville’s share of the Fund’s assets. Sellecchia is a managing director of Tocqueville and has been associated with the firm since September 2009. Prior to joining Tocqueville, Sellecchia was a managing director of Reich & Tang Asset Management, LLC. He has held Fund responsibilities since the Fund’s inception.
The Killen Group, Inc.
Lee S. Grout, CFA
Executive Vice President and Head of Investment Research
Start date on the Fund: January 2006
Lee S. Grout shares primary responsibility for the day-to-day management of Killen’s share of the Fund’s assets. He is vice president and head of investment research at Killen, which he joined in 1997. Grout has held his Fund responsibilities since January 2006.
Robert E. Killen
Chief Executive Officer and Founder
Start date on the Fund: January 2006
Robert E. Killen shares primary responsibility for the day-to-day management of Killen’s share of the Fund’s assets. Killen is chairman, CEO, and founder of Killen, and has held Fund responsibilities since January 2006.
Westwood Management Corp.
Prashant Inamdar, CFA
Vice President, Portfolio Manager
Start date on the Fund: December 2013
Prashant Inamdar is part of a team of portfolio managers primarily responsible for the day-to-day management of Westwood’s share of the Fund’s assets. All of the portfolio team members participate in the investment decision process when determining the stock selection for the portfolio and the appropriate weight of the stocks selected. Inamdar is a vice president and portfolio manager who joined Westwood in December 2013. Prior to joining Westwood, Inamdar worked at Chilton Investment Company as a vice president in the research department from 2010 to 2012. Most recently, he served as senior analyst at 3 Twelve Capital from 2012 to 2013. Inamdar has held his Fund responsibilities since December 2013.
Tom Lieu, CFA
Senior Vice President, Portfolio Manager
Start date on the Fund: January 2011
Tom Lieu is part of a team of portfolio managers primarily responsible for the day-to-day management of Westwood's share of the Fund's assets. All of the portfolio team members participate in the investment process when determining the stock selection for the portfolio and the appropriate weight of the stocks selected. Lieu is a senior vice president and portfolio manager who joined the Westwood team in 2010. Prior to joining Westwood, Lieu held positions at Lazard and Bank of America. Most recently, he served as a research analyst at Persistency Capital, LLC, in New York City. He has held his Fund responsibilities since January 2011.
Susan Schmidt, CFA
Senior Vice President, Portfolio Manager
Start date on the Fund: August 2015
Susan Schmidt is part of a team of portfolio managers primarily responsible for the day-to-day management of Westwood’s share of the Fund’s assets. All of the portfolio team members participate in the investment decision process when determining the stock selection for the portfolio and the appropriate weight of the stocks selected. Schmidt is a senior vice president and portfolio manager who joined Westwood in 2015. Prior to joining Westwood, Schmidt worked at Essex Investment Management Company from 2008 to 2009, and most recently, served as portfolio manager at Mesirow Financial from 2009 to 2015. She has held her Fund responsibilities since August 2015.
Grant Taber, CFA
Senior Vice President, Portfolio Manager
Start date on the Fund: December 2008
Grant Taber is part of a team of portfolio managers primarily responsible for the day-to-day management of Westwood’s share of the Fund’s assets. All of the portfolio team members participate in the investment decision process when determining the stock selection for the portfolio and the appropriate weight of the stocks selected. Taber is a senior vice president and portfolio manager who joined Westwood in 2008. Prior to joining Westwood, Taber worked at Bessemer Trust Company from 2004 until 2008, where he served as vice president, Large Cap Research Analyst. He has held his Fund responsibilities since December 2008.
You may qualify for sales-charge discounts if you and your family invest, or agree to invest in the future, at least $75,000 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 (SAI) under the section entitled "Purchasing shares."
The table below describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
|Maximum sales charge (load) imposed on purchases as a percentage of offering price||5.75%|
|Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lower||none|
|Annual fund operating expenses|
|Distribution and service (12b-1) fees||0.25%|
|Total annual fund operating expenses||1.68%|
|Fee waivers and expense reimbursements||(0.16%)|
|Total annual fund operating expenses after fee waivers and expense reimbursements||1.52%|
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||The Killen Group||Delafield Group of Tocqueville Asset Management||Westwood Management Corporation||Total|
Total may not equal 100% due to rounding.
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.
Investing involves risk, including the possible loss of principal.
Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.
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.
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.
Liquidity risk is the possibility that securities cannot be readily sold within seven days at approximately the price at which a fund has valued them.