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 (01/31/2016)
YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-5.78%-5.38%0.09%-0.23%0.87%5.59%10/31/1991
Max offer price-11.19%-10.83%-1.88%-1.40%0.27%5.34%
Average annual total return as of quarter-end (12/31/2015)
Current quarter1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)3.27%0.51%3.89%1.99%1.99%5.87%10/31/1991
Max offer price-2.70%-5.29%1.85%0.80%1.39%5.61%
MSCI EAFE Index (Gross)4.75%-0.39%5.46%4.07%3.50%n/a
MSCI EAFE Index (Net)n/a-0.81%5.01%3.60%3.03%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
Gross1.42%
Net1.42%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
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 01/31/2016
Number of holdings50
Market cap (median)$18.54 billion
Market cap (weighted average)$45.37 billion
Portfolio turnover (last fiscal year)13%
Beta, 3 years (relative to MSCI EAFE Index (Gross)) (view definition)0.93
Annualized standard deviation, 3 years (view definition)12.70
Portfolio composition as of 01/31/2016Total may not equal 100% due to rounding.
International equities & depositary receipts98.2%
Cash and cash equivalents1.8%
Top 10 holdings as of 01/31/2016
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Nippon Telegraph & Telephone Corp.4.0%
Teva Pharmaceutical Industries Ltd.3.9%
Toyota Motor Corp.3.6%
CGI Group Inc.3.6%
Sanofi3.6%
Mitsubishi UFJ Financial Group Inc.3.3%
Novartis AG3.2%
Nordea Bank AB3.1%
Vinci S.A.3.0%
East Japan Railway Co.3.0%
Total % Portfolio in Top 10 holdings34.3%

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

Top 10 countries as of 01/31/2016List excludes cash and cash equivalents.
Country% of portfolio
Japan23.4%
France16.9%
United Kingdom11.2%
Canada6.1%
Switzerland6.0%
Germany5.8%
Sweden4.9%
Hong Kong4.8%
Netherlands4.2%
Israel3.9%
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: 29

(View bio)


Todd Bassion

Todd A. Bassion, CFA

Vice President, Portfolio Manager

Start date on the Fund: May 2006

Years of industry experience: 15

(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 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.

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 expenses0.32%
Total annual fund operating expenses1.42%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements1.42%

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 March 30, 2015 through March 30, 2016. 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 December 31, 2015

Within the Fund

For the quarter ended Dec. 31, 2015, Delaware International Value Equity Fund (Institutional Class shares and Class A shares at net asset value) underperformed its benchmark, the MSCI EAFE Index. Stock selection on a regional basis was slightly negative, with strong stock selection in Europe ex–euro zone and Japan being more than offset by adverse stock selection in the United Kingdom and Asia Pacific ex Japan. Overall regional allocation was slightly positive, primarily due to an underweight position in the U.K. Stock selection on a sector basis was negative, with strong stock selection in consumer staples being more than offset by adverse stock selection in consumer discretionary, industrials, and healthcare. Overall sector allocation was positive, primarily due to an overweight position in information technology and underweight positions in materials and financials. Net currency effect was neutral.

Prospective global market drivers and general outlook

As in the previous quarter, global equity markets appeared to be governed by the twin poles of the United States and China. Each of these two colossal markets is currently shifting policies to address distinct concerns, while the rest of the world faces the prospect of adapting to the ensuing result. With U.S. Federal Reserve rate policy having finally moved off of the near-zero bound that it had occupied since 2008, market watchers weigh the question of whether the current recovery, tepid compared to the cyclical norm, will be sufficient to sustain itself for an extended period. Are we laying the foundation for another leg up in equity performance, or do current market harbingers such as heightened credit spreads and underperformance of procyclical industry sectors portend a “failure to launch,” as some skeptics predict?

China’s increasing intervention to dampen the rate of its economic slowdown and bolster itself against the effects of deteriorating confidence is clearly aimed at a very different kind of problem. The country’s policy makers have substantial levers at their disposal, with resources to back them up. Some success is a plausible outcome, one with powerful consequences if it were to allow declining business sentiment to reverse course and join the positive trends apparent elsewhere in the world. As a major end market for capital as well as consumer goods from elsewhere, notably Europe and Japan, and the world’s principal demand driver for raw materials, a positive inflection in China could help facilitate a recasting of market leadership worldwide. No market exists in a vacuum, however, and one economy’s policy prescription may be another’s poison. Consider, for example, the possible effect of China’s liquidation of a portion of its foreign exchange reserves to support its currency. The sale of billions of dollars in U.S. Treasury bonds could drain liquidity from our own domestic economy, creating a monetary tightening arguably more significant than the Fed’s quarter-point increase in rates that has received so much attention.

From the perspectives of equity markets that are neither American nor Chinese, we believe there are mixed blessings. Less-pressing cyclical concerns from their domestic economies — recoveries in Europe and Japan are far less advanced than in the U.S. — are offset by their reliance on the network of global economies, both as end markets and as sources of raw materials and locations for manufacturing. Valuations outside the U.S. remain relatively subdued in comparison both to U.S. equities and to their own histories, providing further comfort for the risk-averse investor. Given the preponderance of economic news from the U.S. and China, we believe it is a happy circumstance that companies domiciled in Europe and Japan have always occupied a world dominated by economies centered elsewhere, and have both survived and thrived with the imperative that they adapt to that condition.

As bottom-up stock pickers, we appreciate that regardless of the macroeconomic winds, this strength and adaptability can be recognized at the company level, and it is these qualities that we believe have the potential to facilitate long-term success under a variety of economic outcomes that may be difficult to envision today.

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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 02/05/2016)

Class APriceNet changeYTD
NAV$11.64-0.15-7.84%
Max offer price$12.35n/an/a

Total net assets (as of 01/31/2016)

$248.2 million all share classes

Lipper ranking (as of 01/31/2016)

YTD ranking79 / 183
1 year39 / 174
3 years67 / 140
5 years72 / 117
10 years36 / 67
Lipper classificationInternational Multi-Cap Value

(View Lipper disclosure)

Benchmark, peer group

MSCI EAFE Index (view definition)

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

Additional information