Delaware Diversified Income Fund

Objective

Delaware Diversified Income Fund seeks maximum long-term total return, consistent with reasonable risk.

Strategy

The Fund invests in four sectors — U.S. investment grade sector, U.S. high yield sector, international developed markets sector, and emerging markets sector.

Fund information
Inception date12/29/1997
Dividends paid (if any)Monthly
Capital gains paid (if any)December
Fund identifiers
NASDAQDPDFX
CUSIP246248744
Investment minimums
Initial investment$1,000
Subsequent Investments$100
Systematic withdrawal balance$5,000
Account features
CheckwritingNo
Payroll DeductionYes
IRAsYes

On Sept. 25, 2014, Class B shares of the Fund converted to Class A shares.

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 (01/31/2015)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)1.97%5.98%3.70%5.04%6.02%7.43%12/29/1997
Max offer price-2.59%1.24%2.10%4.09%5.54%7.14%
Barclays U.S. Aggregate Index2.10%6.61%3.07%4.57%4.86%n/a
Average annual total return as of quarter-end (12/31/2014)
QTDYTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)0.57%5.11%5.11%3.48%4.90%5.79%7.34%12/29/1997
Max offer price-4.00%0.37%0.37%1.91%3.94%5.31%7.05%
Barclays U.S. Aggregate Index1.79%5.97%5.97%2.66%4.45%4.71%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.

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
Gross0.90%
Net0.90%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
20142.45%2.50%-0.47%0.57%5.11%
20130.32%-3.63%0.83%1.17%-1.37%
20121.29%2.24%2.65%0.55%6.88%
20111.23%2.00%0.79%2.22%6.38%
20103.06%1.09%3.79%-0.32%7.77%
20090.44%10.21%9.67%3.28%25.38%
20082.31%-1.79%-3.93%-0.77%-4.20%
20072.74%0.18%2.56%1.77%7.43%
20060.81%0.19%3.81%2.96%7.94%
2005-1.12%1.38%-0.77%-0.21%-0.73%
Portfolio characteristics - as of 01/31/2015
Number of holdings1,491
Effective maturity (weighted average) (view definition)8.05 years
Effective duration (weighted average) (view definition)5.61 years
Annualized standard deviation, 3 years (view definition)3.56
SEC 30-day yield with waiver (view definition)2.70%
SEC 30-day yield without waiver (view definition)2.70%
Portfolio turnover (last fiscal year)189%
Portfolio composition as of 01/31/2015Total may not equal 100% due to rounding.
High grade securities70.9%
High yield securities18.8%
Emerging markets8.3%
International developed2.0%
Top 10 holdings as of 01/31/2015
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
FNCL MAR TBA3.8%
United States Treasury Note/Bond 3.000 11/15/20442.7%
United States Treasury Note/Bond 1.625 12/31/20192.0%
FNCL AX53161.2%
FNCL AB65890.9%
Dow Chemical Co. 8.550 5/15/20190.7%
Pride International Inc. 6.875 8/15/20200.6%
FNCL MAR TBA0.6%
ERAC USA Finance LLC 5.250 10/1/20200.5%
FNCL AL56160.5%
Total % Portfolio in Top 10 holdings13.5%

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

Top sectors as of 01/31/2015
List excludes cash and cash equivalents.
Sector% of portfolio
Investment grade credits36.9%
MBS and CMOs19.5%
High yield credits17.9%
Emerging markets8.3%
Commercial mortgage-backed securities5.5%
U.S. Treasury securities4.9%
Asset-backed securities2.1%
International developed2.0%
Municipal bonds0.4%
Agency bonds0.1%
Distribution history - annual distributions (Class A)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20150.0000.053
20140.0320.339
20130.0000.330
20120.0900.341
20110.2340.393
20100.3670.456
20090.0680.484
20080.0000.521
20070.0810.514
20060.0000.458
20050.0000.375

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.

Roger Early

Roger A. Early, CPA, CFA

Managing Director, Head of Fixed Income Investments, Senior Vice President, Co-Chief Investment Officer — Total Return Fixed Income Strategy

Start date on the Fund: May 2007

Years of industry experience: 38

(View bio)