Delaware Investments Delaware Investments Delaware Investments
Print Banner

Print commentary

View printable commentary E-mail this page

This commentary is currently not available. Please check back later.

Delaware International Value Equity Fund Quarterly commentary December 31, 2016

Within the Fund

Delaware International Value Equity Fund (Institutional Class shares and Class A shares at net asset value) underperformed its benchmark, the MSCI EAFE Index, for the fourth quarter of 2016.

On a sector basis, strong stock selection in financials, industrials, consumer staples, and telecommunications more than offset weak stock selection in consumer discretionary, materials, and healthcare. Overall sector allocation was neutral. The favorable effect from an underweight exposure to consumer staples, real estate, and utilities, and an overweight exposure to consumer discretionary slightly offset the adverse effect of underweight exposures to financials and materials.

On a regional basis, strong stock selection in the euro zone and Japan more than offset weak stock selection in Asia Pacific ex Japan, Europe ex–euro zone, and the United Kingdom. Net currency effect was positive. Exposure to the Canadian dollar, and an overweight exposure the Hong Kong dollar and U.S. dollar more than offset the adverse effect from an underweight exposure to the British pound and Australian dollar.

Prospective global market drivers and general outlook

The Fund’s trading activity during the year was centered on paring back some of our successful investments that were approaching their targets and redeploying the proceeds on what we viewed as more attractively valued stocks. This activity involved positions across a variety of sectors and regions, but did not result in material changes to portfolio positioning with respect to those measures.

While we are encouraged by the market’s strong performance beyond the volatility of February and June 2016, some elements of the global financial picture remain uncertain. Even after the November surge, bond yields remain historically low. This, combined with persistently slow growth, suggests to us an environment in which investment returns may be modest. The market has been facing a conundrum: both a scarcity of conviction that economies will reaccelerate along the lines of past cycles, as well as central bank efforts to prevent further weakness.

Recent market action suggests to us a greater sense of optimism in the air, but much remains to be proven. At the current level of equity valuations, the current landscape reveals a U.S. market selling at a premium to the rest of the world, while Japan and Europe sell at substantial discounts. These gaps appear to reflect diverging expectations of growth potential and risk, and have changed little since June. What also remains intact, though, is that for active managers, stocks reflect stakes in dynamic enterprises that can change and adapt to shifting circumstances. While the market presents us with uncertainty, we are confident that success in equity investing reflects the varying ways in which company managements navigate these changes, and how efficient and focused they are in doing so. We believe that the qualities that drive this success can be recognized and, when accompanied by attractive valuation, can potentially lead to strong and sustained long-term outperformance.


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.


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.

Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting

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 quarter-end (12/31/2016)
YTD1 year3 year5 year10 yearLifetimeInception
Class A (NAV)-0.84%4.74%4.74%-1.35%6.15%0.37%5.83%10/31/1991
Class A (at offer)-6.51%-1.28%-1.28%-3.28%4.91%-0.22%5.58%
Institutional Class shares-0.74%5.06%5.06%-1.10%6.43%0.65%6.58%11/09/1992
MSCI EAFE Index (Gross)-0.68%1.51%1.51%-1.15%7.02%1.22%n/a
MSCI EAFE Index (Net)-0.71%1.00%1.00%-1.60%6.53%0.75%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.

MSCI EAFE Index (view definition)

Expense ratio
Class A (Gross)1.36%
Class A (Net)1.36%
Institutional Class shares (Gross)1.11%
Institutional Class shares (Net)1.11%
Share class ticker symbols
Institutional ClassDEQIX
Top 10 holdings as of 02/28/2017
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Mitsubishi UFJ Financial Group Inc.4.0%
Samsung Electronics Co. Ltd.3.4%
ITOCHU Corp.3.4%
Nordea Bank AB3.3%
Nippon Telegraph & Telephone Corp.3.1%
Toyota Motor Corp.3.1%
Novartis AG3.0%
Vinci S.A.3.0%
East Japan Railway Co.2.7%
Total % Portfolio in Top 10 holdings32.4%

Institutional Class shares are only available to certain investors. See the prospectus for more information. 

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

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 800 523-1918. 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