Delaware Investments U.S. Large Cap Growth Fund (Closed to new subscriptions)

Investment objective

The investment objective of the Delaware Investments U.S. Large Cap Growth Fund (Fund) is to aim to achieve long-term capital appreciation. The focus of the Fund’s investments is on equity securities (shares and other similar instruments) of large U.S. companies, the value of which is expected to grow faster than the U.S. economy.

Philosophy

The Focus Growth Equity investment team bases its investment strategy and process on the belief that attractive returns can be realized by maintaining a concentrated portfolio of companies that the team believes have advantaged business models and opportunities to generate consistent, long-term growth of intrinsic business value.

  • Concentration
    In the investment team’s view, portfolios should be constructed with a strong emphasis on the highest-conviction companies in a manager’s coverage universe. 
  • Consistent, long-term
    The investment team generally prefers to hold companies with steady, consistent business models and end markets, and to hold them for three to five years or more. We believe this focus on the long term gives us a "time arbitrage" opportunity over short-term investors. The increasing flow of investment dollars toward hedge funds and others that pursue short-term strategies is, in the team’s opinion, generating more disconnects between near-term perception and long-term fundamentals, which in turn may create more attractive opportunities for the team’s approach. 
  • Intrinsic business value 
    While the investment team, like many other growth investors, invests with the expectation of attractive revenue and earnings growth from the companies they own, a company’s cash economics – its returns on invested capital and its ability to generate free cash flow, i.e., its intrinsic business value – is key to its evaluation. 

With more assets flowing to short term-driven, trading-oriented strategies every day, we believe its core philosophical tenets continue to differentiate its approach from that of most other equity market participants.

Equity investment process

The investment team's company-by-company fundamental analysis focuses on three key areas:

  • Fundamental change
    In the investment team’s view, positive change is required in order to create opportunities for growth. We tend to see change occurring in one of three primary areas: at the industry level, the product level, or within the management team.
  • Business model 
    The investment team evaluates each company from the perspective of a business owner and undertakes a rigorous strategic analysis culminating in a Porter Five Forces summary. We seek sustainable competitive advantages, such as network effects, dominant market share, strong brand equity, proprietary products, and low-cost models. The quantitative validation of competitive advantage is, in its opinion, the long-term generation of returns on invested capital in excess of the company’s cost of capital. To that end, when evaluating a company’s management teams, we closely scrutinize its capital allocation strategy and financial acumen.
  • Valuation/validation
    In order to validate not only the market’s valuation but also its qualitative investment thesis, the investment team projects each company’s cash economics out over a five- to ten-year period, seeking attractive absolute valuations. Further, thecompany’s accounting earnings must reconcile with its cash economics.

Performance as of 30 June 2014

  June 2Q14 1 year 3 year 5 year Since inception(24/12/2007)
Delaware Investments U.S. Large Cap Growth Fund
(Class F $ (accumulating) shares, net of fees)
2.37% 4.18% 30.76% 16.47% 18.75% 6.10%
Russell 1000® Growth Index 1.95% 5.13% 26.92% 16.26% 19.24% 7.82%

The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted.

The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. It is an unmanaged index and a theoretical measure of stock-market performance than an actual available instrument. You cannot invest directly in an index.

Portfolio characteristics as of 30 June 2014

Benchmark Index: Russell 1000 ® Growth Index

  Fund Index
5-year average EPS growth rate 15.4% 15.3%
Weighted average P/E ratio (1 yr. fwd.) 20.5x 17.7x
Weighted average price/book ratio 3.8x 4.5x
Number of holdings 31 672
Weighted average market capitalization (millions) $84,701 $110,329
Median market capitalization (millions) $35,990 $9,465

Sector weightings as of 30 June 2014

  Fund Index
Technology 29.2% 23.3%
Financial services 20.7% 7.7%
Consumer discretionary 18.1% 20.5%
Healthcare 15.6% 12.6%
Energy 7.7% 6.4%
Consumer staples 5.2% 9.7%
Materials and processing 1.7% 5.1%
Cash 1.8% 0.0%

The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. It is an unmanaged index and a theoretical measure of stock-market performance than an actual available instrument. You cannot invest directly in an index.

Investment manager

Delaware Management Company, a series of Delaware Management Business Trust

Sub-advisors

Jackson Square Partners, LLC


Jeff VanHarte

Jeffrey S. Van Harte, CFA

Chairman, Chief Investment Officer — Jackson Square Partners, LLC

Start date on the Fund: June 2014

(View bio)


Chris Bonavico

Christopher J. Bonavico, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: June 2014

(View bio)


Chris Ericksen

Christopher M. Ericksen, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: June 2014

(View bio)


Daniel J. Prislin, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: June 2014

(View bio)


Portfolio holdings are as of the date noted above and are subject to change at any time. Holdings may not be representative of current or future investments and may not include the entire investment portfolio. Holdings information is made available to the public 30 calendar days after the most recent month-end for monthly holdings and 30 calendar days after the most recent quarter-end for quarterly holdings.

Holdings data is for informational purposes only, and is not intended as a recommendation, offer, or solicitation for the purchase or sale of any specific security. By accessing the portfolio holdings, you agree not to reproduce, distribute or disseminate the portfolio holdings, in whole or part. In no event shall the Macquarie Collective Funds plc or its affiliates have any liability relating to the use of the portfolio holdings.

On 30 April 2014, Delaware Investments and its Growth Equity team formed a joint venture, Jackson Square Partners, LLC (JSP). All team members became part of JSP on 1 May 2014. JSP, a U.S.-registered investment advisor, is the sub-investment manager of the Delaware Investments U.S. Large Cap Growth Fund. JSP has been approved to act as an investment manager of Irish authorised collective investment schemes.

Investors should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and Key Investor Information Documents (KIIDs) contain this and other important information about the Fund and can be obtained by clicking the prospectus link located in the right-hand sidebar or calling +353-1-483-2429. Investors should read the prospectus carefully before investing or sending money.

There are risks involved with investing in the Fund, including loss of principal.

Because the Fund expects to hold a concentrated portfolio of a limited number of securities, the Fund's risk may be increased because each investment has greater effect on the Fund's overall performance. We maintain a diversified portfolio representing a number of different industries, which helps to minimise the impact that any one industry could have on the portfolio.

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Current tax levels and relief may change. Depending on individual circumstances, this may affect investment returns.

Fund Finder

Daily pricing (as of 22/07/2014)

ClassPriceNet changeYTD
F USD Acc.$14.950.136.33%
C GBP Dist.$22.860.212.88%
I GBP Acc.$21.850.203.85%
I USD Dist.$29.970.266.73%
I GBP Dist.$25.950.243.59%

Class F $ Accumulating*

Currency USD
ISIN IE00B29Q9V65
Sedol B29Q9V6
CUSIP G2774C130
Bloomberg ID DLLCGFA

Fees and expenses

Management fee 1.35%
Expense ratio 1.70%

Literature

Prospectuses and reports

Visit our Literature page for Key Investor Information Documents (KIIDs).

* For information on other share classes, please contact Delaware Investments at +1 215 255 1505 or at delawareoffshore@delinvest.com