Delaware Emerging Markets Fund

Objective

Delaware Emerging Markets Fund seeks long-term capital appreciation.

Strategy

The Fund invests primarily in a broad range of equity securities of companies located in emerging market countries.

Fund information
Inception date06/10/1996
Dividends paid (if any)Annually
Capital gains paid (if any)November or December
Fund identifiers
NASDAQDEMIX
CUSIP245914817

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

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 (04/30/2016)

as of quarter-end (03/31/2016)

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)9.71%-10.73%-1.58%-2.94%4.13%7.28%06/10/1996
MSCI Emerging Markets Index (Gross)6.35%-17.56%-4.23%-4.28%2.69%n/a
MSCI Emerging Markets Index (Net)6.29%-17.87%-4.57%-4.61%2.36%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)5.54%-5.25%-2.30%-3.16%4.26%7.10%06/10/1996
MSCI Emerging Markets Index (Gross)5.75%-11.70%-4.15%-3.80%3.34%n/a
MSCI Emerging Markets Index (Net)n/a-12.03%-4.50%-4.13%3.01%n/a

Returns for less than one year are not annualized.

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
Gross1.48%
Net1.45%

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursements from March 29, 2016 through March 30, 2017. Please see the fee table in the Fund’s prospectus for more information.

Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
20165.54%n/an/an/an/a
2015-3.93%4.81%-21.66%9.34%-13.75%
2014-1.41%7.92%-3.41%-10.66%-8.18%
20132.15%-5.16%13.61%3.57%13.99%
201212.11%-11.73%9.48%7.73%16.72%
20113.60%-3.96%-25.47%6.98%-20.66%
20102.71%-10.48%18.01%9.54%18.85%
2009-0.91%35.18%22.81%8.59%78.62%
2008-9.65%1.79%-26.84%-26.59%-50.61%
20073.17%17.54%11.10%4.59%40.92%
20069.43%-5.92%4.58%18.38%27.45%

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

Portfolio characteristics - as of 04/30/2016MSCI Emerging Markets Index (Net)
Number of holdings95644
Market cap (median)$4.00 billion$5.54 billion
Market cap (weighted average)$35.72 billion$46.43 billion
Portfolio turnover (last fiscal year)12%n/a
Beta (relative to MSCI Emerging Markets Index (Net)) (view definition)1.18n/a
Annualized standard deviation, 3 years (view definition)20.66n/a
Portfolio composition as of 04/30/2016Total may not equal 100% due to rounding.Values in excess of 100% and negative values may appear as the result of certain assets and liabilities.
International equities & depositary receipts98.0%
Domestic equities1.2%
Cash and cash equivalents0.7%
Top 10 equity holdings as of 04/30/2016
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holdings based by issuer.
Holding% of portfolio
Reliance Industries Ltd5.8%
SINA Corp/China5.3%
Samsung Electronics Co Ltd4.9%
Sohu.com Inc4.6%
Baidu Inc4.4%
SK Telecom Co Ltd3.1%
Itau Unibanco Holding SA2.8%
Rosneft OAO2.8%
Yandex NV2.7%
Tencent Holdings Ltd2.7%
Total % Portfolio in Top 10 holdings39.1%

Top 10 countries as of 04/30/2016

List excludes cash and cash equivalents.

Country% of portfolio
China27.1%
Brazil15.5%
Russia13.1%
South Korea12.0%
India8.2%
Taiwan5.6%
Turkey5.0%
Mexico4.7%
Argentina3.4%
United States1.2%
Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
Return of
capital
20160.0000.0000.000
20150.0000.0140.024
20140.3480.1060.000
20130.0000.1540.000
20120.0000.1420.000
20110.1390.1670.000
20100.0000.1200.000
20090.0000.0310.000
20080.8230.0510.000
20075.4810.2830.000
20065.2980.5710.000

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.

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

Liu-Er Chen

Liu-Er Chen, CFA

Senior Vice President, Chief Investment Officer — Emerging Markets and Healthcare

Start date on the Fund: September 2006

Years of industry experience: 20

(View bio)


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

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 pricenone
Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lowernone
Annual fund operating expenses
Management fees1.18%
Distribution and service (12b-1) feesnone
Other expenses0.30%
Total annual fund operating expenses1.48%
Fee waivers and expense reimbursements(0.03%)
Total annual fund operating expenses after fee waivers and expense reimbursements1.45%

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

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 1.45% of the Fund's average daily net assets from March 29, 2016 through March 30, 2017. These waivers and reimbursements may only be terminated by agreement of the Manager and the Fund.

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Delaware Emerging Markets Fund Quarterly commentary March 31, 2016

Within the Fund

Delaware Emerging Markets Fund (Institutional Class shares and Class A shares at net asset value) underperformed its benchmark, the MSCI Emerging Markets Index, during the first quarter of 2016.

South Africa detracted the most from performance due to unfavorable asset allocation. The commodity-led rally in that market is unlikely to be sustained, in our view. Elsewhere, China and India also weighed on performance. In China, the Fund’s holdings in the Internet sector, including Sohu.com, SINA, and Baidu, underperformed due to the dual impacts of the slowing Chinese economy on advertising revenue, as well as currency depreciation. Shares of Sohu.com particularly underperformed as the company provided weak guidance. In India, stock selection was unfavorable. Shares of Reliance Communications declined due to lackluster operational performance and concerns about rising competition. Reliance Industries delivered slightly positive returns this quarter, but did not participate in the rally witnessed in the upstream energy and commodities sectors. In the financials sector, shares of ICICI Bank declined due to asset quality concerns. India’s central bank is encouraging lenders to recognize nonperforming loans more aggressively.

Brazil was the main contributor to performance. On the back of rising hopes for changes in government leadership and policy, financial stocks such as Itau Unibanco and Banco Santander Brasil posted strong returns. Telecom stocks including Telefonica Brasil and Tim Participacoes benefited from currency appreciation. Shares of Hypermarcas rose as the company continued to divest assets and reduce debt.

Other contributors to performance included Turkey and Russia. In both of these markets, the Fund’s overweight positions were favorable in terms of asset allocation. In Turkey, the Fund’s investments in Akbank and Turkcell both outperformed. In Russia, the Fund’s investment in Rosneft benefited from rising oil prices.

Among sectors, financials contributed the most to performance due to a substantial underweight position in Chinese financials, as well as the Fund’s overweight positions in Itau Unibanco, Akbank, and Sberbank. Telecom also outperformed due to the Fund’s holdings in Brazil and Turkey. In contrast, technology detracted the most from performance due to the Fund’s holdings in the Chinese Internet sector. In addition, an underweight stance in the materials sector was unfavorable for the Fund in terms of asset allocation.

Outlook

We expect emerging markets to remain volatile, yet our long-term positive view remains intact. While economic growth may continue to face near-term headwinds, we believe that monetary and fiscal policies, coupled with government reform measures, will provide support. With respect to China, we continue to believe that the economy will muddle through, supported by structural growth in consumption, improvement in living standards, and selective policy support from the government.

Despite a challenging macroeconomic backdrop, we believe that there are pockets of opportunities for long-term stock appreciation driven by structural demographic shifts, technology adoption, implementation of government policy, improvement in corporate governance, and industry consolidation. Our investment approach remains centered on identifying individual companies that we believe possess sustainable franchises and favorable long-term growth prospects and that trade at significant discounts to their intrinsic value. We are particularly focused on companies that we believe should benefit from long-term changes in how people in emerging markets live and work. Sectors we currently favor include technology and telecom.

[16429]

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 800 362-7500. 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.

The Funds are distributed by Delaware Distributors L.P., an affiliate of Delaware Management Holdings, Inc., and Macquarie Group Limited.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 05/27/2016)

Institutional ClassPriceNet change
NAV$12.970.07
Max offer price$12.97n/a

Total net assets (as of 04/30/2016)

$1.5 billion all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 04/30/2016)
RatingNo. of funds
Overall4584
3 Yrs4584
5 Yrs3408
10 Yrs4176
Morningstar categoryDiversified Emerging Mkts

(View Morningstar disclosure)

Lipper ranking (as of 04/30/2016)

YTD ranking130 / 891
1 year101 / 814
3 years70 / 570
5 years94 / 400
10 years19 / 161
Lipper classificationEmerging Markets Funds

(View Lipper disclosure)

Benchmark, peer group

MSCI Emerging Markets Index (view definition)

Lipper Emerging Markets Funds Average (view definition)

Additional information