Delaware International Value Equity Fund

Objective

Delaware International Value Equity Fund seeks long-term growth without undue risk to principal.

Strategy

The Fund invests primarily in equity securities that are organized, have a majority of their assets, or generate the majority of their operating income outside the United States, and that provide the potential for capital appreciation.

Fund information
Inception date10/31/1991
Dividends paid (if any)Annually
Capital gains paid (if any)November or December
Fund identifiers
NASDAQDEGIX
CUSIP245914106
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 (08/31/2016)

as of quarter-end (06/30/2016)

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)4.36%2.39%1.99%4.00%1.33%5.89%10/31/1991
Max offer price-1.64%-3.53%0.00%2.78%0.73%5.64%
MSCI EAFE Index (Gross)0.92%0.38%2.93%5.48%2.18%n/a
MSCI EAFE Index (Net)0.49%-0.12%2.47%5.00%1.71%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)0.65%-6.84%2.13%-0.17%1.21%5.70%10/31/1991
Max offer price-5.17%-12.21%0.13%-1.35%0.61%5.44%
MSCI EAFE Index (Gross)-1.19%-9.72%2.52%2.15%2.05%n/a
MSCI EAFE Index (Net)-1.46%-10.16%2.06%1.68%1.58%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.

Expense ratio
Gross1.36%
Net1.36%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
2016-1.90%0.65%n/an/an/a
20155.74%0.74%-8.63%3.27%0.51%
2014-0.56%5.58%-6.68%-6.92%-8.82%
20136.46%-2.39%11.37%5.72%22.33%
201211.07%-7.71%6.39%5.24%14.76%
20117.46%2.26%-25.22%4.39%-14.22%
20102.03%-13.31%17.65%5.47%9.75%
2009-11.63%22.07%20.91%4.28%36.02%
2008-8.40%-6.54%-16.81%-19.30%-42.52%
20073.92%6.80%-2.08%-3.72%4.63%
20068.02%-1.29%4.95%9.86%22.93%
Portfolio characteristics - as of 08/31/2016MSCI EAFE Index (Net)
Number of holdings48926
Market cap (median)$22.82 billion$9.02 billion
Market cap (weighted average)$49.28 billion$53.49 billion
Portfolio turnover (last fiscal year)13%n/a
Beta (relative to MSCI EAFE Index (Net)) (view definition)0.92n/a
SEC 30-day yield with waiver (view definition)1.36%
SEC 30-day yield without waiver (view definition)1.36%
Annualized standard deviation, 3 years (view definition)12.69n/a
Portfolio composition as of 08/31/2016Total may not equal 100% due to rounding.
International equities & depositary receipts97.5%
Cash and cash equivalents2.5%
Top 10 equity holdings as of 08/31/2016
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Yue Yuen Industrial Holdings Ltd.3.5%
Toyota Motor Corp.3.4%
Mitsubishi UFJ Financial Group Inc.3.4%
Nippon Telegraph & Telephone Corp.3.3%
Vinci S.A.3.2%
Sanofi3.1%
Novartis AG3.1%
Teva Pharmaceutical Industries Ltd.3.0%
Samsung Electronics Co. Ltd.3.0%
CGI Group Inc.2.9%
Total % Portfolio in Top 10 holdings31.9%

Top 10 countries as of 08/31/2016

List excludes cash and cash equivalents.

Country% of portfolio
Japan23.1%
France16.9%
United Kingdom11.2%
Germany6.7%
Canada5.6%
Hong Kong5.4%
Switzerland4.8%
Sweden4.5%
Netherlands4.4%
Israel3.0%
Distribution history - annual distributions (Class A)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20160.0000.000
20150.0000.164
20140.0000.267
20130.0000.145
20120.0000.153
20110.0000.193
20100.0000.105
20090.0000.232
20080.0000.307
20070.7190.204
20065.3370.174

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.

Opportunity through adversity — international value investing at Delaware Investments

Buying stocks that appear risky, when in fact they are far less risky than people think is at the heart of the Global and International Value Equity team's philosophy. Watch the team elaborate on its investment process as well as the unique chemistry that helps make the team work.

Watch the video

Ned Gray

Ned A. Gray, CFA

Senior Vice President, Chief Investment Officer — Global and International Value Equity

Start date on the Fund: May 2006

Years of industry experience: 30

(View bio)


Todd Bassion

Todd A. Bassion, CFA

Vice President, Portfolio Manager

Start date on the Fund: May 2006

Years of industry experience: 16

(View bio)


You may qualify for sales-charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Delaware Investments® Funds. More information about these and other discounts is available from your financial intermediary, 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.

Shareholder fees
Maximum sales charge (load) imposed on purchases as a percentage of offering price5.75%
Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lowernone
Annual fund operating expenses
Management fees0.85%
Distribution and service (12b-1) fees0.25%
Other expenses0.26%
Total annual fund operating expenses1.36%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements1.36%

1The Fund's investment manager, Delaware Management Company (Manager), has contractually agreed to waive all or a portion of its investment advisory fees and/or pay/reimburse 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 1.21% of the Fund’s average daily net assets from May 2, 2016 through May 2, 2017. These waivers and reimbursements may only be terminated by agreement of the Manager and the Fund.

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Delaware International Value Equity Fund Quarterly commentary June 30, 2016

Within the Fund

Delaware International Value Equity Fund outperformed its benchmark, the MSCI EAFE Index, for the second quarter of 2016. On a regional basis, strong stock selection in the euro zone, Asia Pacific ex Japan, and Japan more than offset weak stock selection in Europe ex euro zone and the United Kingdom. Overall regional allocation was negative, with the favorable effect from exposure to emerging markets and Canada being more than offset by the adverse effect of an underweight exposure to the U.K. and Asia ex Japan relative to the benchmark. On a sector basis, strong stock selection in consumer discretionary, materials, and healthcare more than offset weak stock selection in consumer staples, energy, and financials. Overall sector allocation was negative, with the favorable effect from a relative underweight exposure to financials being more than offset by the adverse effect of an overweight exposure to consumer discretionary. Net currency effect was positive due to an underweight exposure to the British pound and Australian dollar.

Prospective global market drivers and general outlook

The internal market dynamics we encountered during the quarter provided the opportunity to pare back some of our successful investments that were approaching their targets and to redeploy the proceeds at attractive valuations. This activity has included reduced positions in Japan, Canada, Europe, and the U.K., and corresponding additions to new and existing positions in Europe, Japan, and the U.K.

In seeking to understand the changing dynamics of global equity markets, we often find it useful to consider possible scenarios that fit with the pattern of valuations that the market is producing. Today’s circumstance of negative bond yields across several major developed markets has little precedent, but it suggests to us that there is little expectation of inflationary pressure out to any reasonable time horizon. The concern is that lack of inflation also implies lack of growth, and that these two together suggest an environment in which investment returns will be modest at best. Japan provides a test case demonstrating that such a scenario can endure for a long time. The current array of equity-market valuations reveals a U.S. market selling at a premium to the rest of the world, while Japan and Europe are selling at substantial discounts. These gaps presumably reflect diverging expectations of growth potential and risk. For active managers, though, there is another critical distinction to make: stocks reflect stakes in dynamic enterprises that can change and adapt to shifting circumstances. Success in equity investing, in our view, reflects the varying manners in which company managements navigate these changes as well as the efficiency and focus with which they do so. We believe that the qualities that drive this success can be recognized and, when accompanied by attractive valuation, can lead to strong and sustained outperformance.

[17162]

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.

Document must be used in its entirety.

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 877 693-3546. Investors should read the prospectus and the summary prospectus carefully before investing.

Investing involves risk, including the possible loss of principal.

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.

All third-party marks cited are the property of their respective owners.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 09/28/2016)

Class APriceNet change
NAV$13.390.10
Max offer price$14.21n/a

Total net assets (as of 08/31/2016)

$250.2 million all share classes

Overall Morningstar RatingTM

Load waived

With load

Class A shares (as of 08/31/2016)
Load waivedWith loadNo. of funds
Overall33286
3 Yrs32286
5 Yrs32236
10 Yrs33143
Morningstar categoryForeign Large Value

(View Morningstar disclosure)

Morningstar ranking (as of 08/31/2016)

YTD ranking77 / 363
1 year66 / 360
3 years90 / 286
5 years99 / 236
10 years45 / 143
Morningstar categoryForeign Large Value

(View Morningstar disclosure)

Lipper ranking (as of 08/31/2016)

YTD ranking32 / 162
1 year27 / 162
3 years45 / 135
5 years48 / 112
10 years23 / 72
Lipper classificationInternational Multi-Cap Value

(View Lipper disclosure)

Benchmark, peer group

MSCI EAFE Index (view definition)

Morningstar Foreign Large Value Category (view definition)

Lipper International Multi-Cap Value Funds Average (view definition)

Additional information