Delaware Focus Global Growth Fund

Objective

Delaware Focus Global Growth Fund seeks long-term capital appreciation.

Strategy

The Fund invests primarily in common stocks of U.S. and non-U.S. companies, which may include companies located or operating in developed or emerging markets. Under normal circumstances, the Fund will invest at least 40% of its net assets in non-U.S. securities. The Fund may invest in companies across all market capitalizations but will primarily invest in mid- and large-cap equity securities.

Fund information
Inception date12/29/2008
Dividends paid (if any)Annually
Capital gains paid (if any)December
Fund identifiers
NASDAQDGGIX
CUSIP246118517

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 (08/31/2016)

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

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)4.77%8.56%7.13%8.21%n/a14.66%12/29/2008
MSCI World Index (Gross)5.45%7.32%7.99%10.14%n/a11.46%
MSCI World Index (Net)4.99%6.68%7.39%9.51%n/a10.83%
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-0.91%-5.83%5.44%5.42%n/a13.79%12/29/2008
MSCI World Index (Gross)1.21%-2.19%7.54%7.23%n/a11.09%
MSCI World Index (Net)1.01%-2.78%6.95%6.63%n/a10.46%

Returns for less than one year are not annualized.

Benchmark lifetime returns are as of the month end after the Fund's inception date.

Prior to Dec. 29, 2010, the Fund had not engaged in a broad distribution of its shares and had been subject to limited redemption requests. The returns reflect expense limitations that were in effect during certain periods and that may have been lower than the Fund's current expenses. The returns would have been lower without the expense limitations.

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
Gross1.19%
Net1.19%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
2016-2.41%-0.91%n/an/an/a
20151.16%1.05%-10.26%8.52%-0.45%
2014-1.33%4.26%-3.83%3.33%2.21%
20135.41%-1.53%10.67%7.66%23.67%
201216.58%-6.36%5.38%2.49%17.90%
20114.13%3.49%-15.32%7.19%-2.20%
20104.40%-8.51%18.42%8.32%22.53%
2009-0.46%21.59%15.55%8.24%51.36%

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

Portfolio characteristics - as of 08/31/2016MSCI World Index (Net)
Number of holdings40986
Market cap (median)$26.47 billionn/a
Market cap (weighted average)$85.51 billionn/a
Portfolio turnover (last fiscal year)41%n/a
Beta (relative to MSCI World Index (Net)) (view definition)1.15n/a
Annualized standard deviation, 3 years (view definition)13.85n/a
Portfolio composition as of 08/31/2016Total may not equal 100% due to rounding.
Domestic equities59.6%
International equities & depositary receipts36.7%
Cash and cash equivalents3.8%
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
PayPal Holdings Inc.3.8%
Celgene Corp.3.6%
Visa Inc.3.4%
QUALCOMM Inc.3.4%
NXP Semiconductors NV3.3%
Baidu Inc.3.2%
Experian PLC3.1%
Intercontinental Exchange Inc.3.1%
MasterCard Inc.3.1%
Microsoft Corp.3.0%
Total % Portfolio in Top 10 holdings33.0%

Top 10 countries as of 08/31/2016

List excludes cash and cash equivalents.

Country% of portfolio
United States59.6%
United Kingdom8.1%
China5.9%
Spain4.8%
Netherlands3.3%
Japan3.0%
Denmark2.4%
Taiwan2.3%
Mexico2.3%
India1.6%
Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20160.0000.000
20150.6680.000
20140.0000.124
20130.3230.014
20120.0000.000
20110.1110.000
20100.4060.028
20091.1700.027
20080.0000.000
20070.0000.000
20060.0000.000

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. 

Investment manager

Delaware Management Company, a series of Delaware Management Business Trust (a Delaware statutory trust)

Sub-advisor

Jackson Square Partners, LLC


Chris Bonavico

Christopher J. Bonavico, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: December 2008

Years of industry experience: 28

(View bio)


Patrick Fortier

Patrick G. Fortier, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: December 2008

Years of industry experience: 21

(View bio)


Greg Heywood

Gregory M. Heywood, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: December 2008

Years of industry experience: 22

(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 fees0.85%
Distribution and service (12b-1) feesnone
Other expenses0.34%
Total annual fund operating expenses1.19%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements1.19%

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 1.30% of the Fund's average daily net assets from March 1, 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 Focus Global Growth Fund Quarterly commentary June 30, 2016

Within the Fund

For the second quarter of 2016, Delaware Focus Global Growth Fund (Institutional Class shares and Class A shares at net asset value) underperformed its benchmark, the MSCI World Index (net). While performance was largely driven by our stock exposure, on a sector level, healthcare and information technology were the largest detractors from performance. The currency risk factor also had a negative effect on performance.

Start Today contributed to the Fund’s performance during the quarter. The company has continued to expand its on-line store count and plans for additional strategic initiatives and promotional activity, and has made significant progress towards adapting its e-commerce platform towards wireless devices (smartphones and tablets). While increased capital expenditure into this segment may decrease margins in the short term, we believe it should lead to increased growth potential in the long term, given strong secular demand for wireless and streaming technologies within the region. Additionally, its consignment business has been expanding, which we believe could be a significant driver of future growth.

Localiza Rent a Car was a contributor to performance during the quarter. While the company reported somewhat mixed financial results, it exceeded consensus estimates on earnings driven, in part, by lower-than-expected financial expenses and foreign currency tailwinds. Despite a somewhat challenging Brazilian economic environment, the rental car industry in Brazil typically grows faster than the general economy; therefore, we believe the growth outlook is quite favorable for a company like this. In addition, we believe that Localiza Rent a Car has shown its ability to shift from managing for growth to generating high cash flow streams in uncertain economic periods; this generally allows a company to earn positive returns on capital in a variety of macro environments — a key characteristic for the Fund’s holdings.

Electronic Arts was a contributor to performance during the quarter. The company reported positive quarterly earnings, beating on both the revenue and margin front. Performance was driven by the company’s strong sport franchises and Star Wars Battlefront game. Additionally, digital and mobile games were key contributors to growth. We continue to believe the company should benefit from upcoming and established game franchises and from its growth within the digital downloads and mobile phone gaming channels, which will be increasingly important for the company’s growth moving forward.

VeriFone Systems detracted from the Fund’s performance during the quarter. The company missed earnings and lowered revenue guidance for the year, due to ongoing softness in media and advertising sales, next-generation hardware certification delays in the U.S. small/mid-size business market and resulting product shift, more competitive pricing dynamics, and a general slowdown in emerging markets (for example, Brazil). The company is responding by reducing headcount and performing a strategic review to address underperforming areas of the business. VeriFone is now seen by some as an attractive target for private equity interest. We continue to believe the company is well positioned to benefit from the secular trend towards electronic forms of payments despite these temporary setbacks. We anticipate that higher margin, next generation products should have meaningful impact in 2017.

Zebra Technologies was a detractor from performance during the quarter. The company saw revenue fall 5% during the quarter as pipeline sale conversions have reached all-time lows. The decline in organic revenue seems to be a result of the sales environment and destocking by channel partners rather than a loss in competitive position. We continue to believe the acquired technology from the Motorola deal should allow the company to offer enhanced next-generation products to fulfil today’s needs, despite near term drops in demand.

Baidu was also a detractor from performance during the quarter due to lower second quarter revenue guidance. More than half of the company’s medical customers reduced advertising spending while they waited for clarity on regulation requirements for medical advertising(resumption of advertising spending over time is expected). The company also reduced the number of sponsored links across the platform in an effort to improve customer experience. We continue to believe that Baidu stands to benefit from the proliferation of wireless and streaming technologies in China, making the company’s services even more accessible. We feel the company has upside potential given the sheer size of the Chinese market population, along with ancillary businesses that are becoming significant drivers of growth including social media, multimedia sharing services, and mobile search.

Outlook

Despite positive absolute returns in the equity market during recent years, we believe the ever-changing market sentiment demonstrates that there are more than just fundamental factors affecting stock prices. A lack of confidence in the fundamental outlook suggests to us that many investors appear to be struggling with accurately predicting the pace of global economic recovery and are assessing external factors that threaten economic fundamentals (for example, central bank actions and fiscal policy debates across the globe). While some fundamentals in various geographies may be trending in a positive direction (from a very low base during the global financial crisis in 2008–2009), we don’t believe we are entering into a typical post-recessionary global boom cycle. Rather, we believe the lingering effects of the credit crisis could lead to moderate growth, at best, for the intermediate term. In such a tenuous environment, we believe the quality of a company’s business model, competitive position, and management may prove to be of utmost importance.

Regardless of the economic outcome, we remain consistent in our long-term investment philosophy: We want to own what we view as strong secular-growth companies with solid business models and competitive positions that we believe can grow market share and have the potential to deliver shareholder value in a variety of market environments.

[17123]

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.

Jackson Square Partners, LLC (JSP), a U.S. registered investment advisor, is the sub-advisor to the Fund. As sub-advisor, JSP is responsible for day-to-day management of the Fund’s assets. Although JSP serves as sub-advisor, the investment manager, Delaware Management Company (DMC), a series of Delaware Management Business Trust, has ultimate responsibility for all investment advisory services.

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.

Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.

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 09/23/2016)

Institutional ClassPriceNet change
NAV$20.35-0.12
Max offer price$20.35n/a

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

$99.2 million all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 08/31/2016)
RatingNo. of funds
Overall3942
3 Yrs3942
5 Yrs3735
Morningstar categoryWorld Stock

(View Morningstar disclosure)

Morningstar ranking (as of 08/31/2016)

YTD ranking577 / 1163
1 year290 / 1126
3 years315 / 942
5 years421 / 735
10 yearsn/a
Morningstar categoryWorld Stock

(View Morningstar disclosure)

Lipper ranking (as of 08/31/2016)

YTD ranking76 / 233
1 year64 / 225
3 years84 / 194
5 years103 / 166
10 yearsn/a
Lipper classificationGlobal Multi-Cap Growth

(View Lipper disclosure)

Benchmark, peer group

MSCI World Index (view definition)

Morningstar World Stock Category (view definition)

Lipper Global Multi-Cap Growth Funds Average (view definition)

Additional information