Delaware Global Real Estate Opportunities Fund

Objective

Delaware Global Real Estate Opportunities Fund seeks maximum long-term total return through a combination of current income and capital appreciation.

Strategy

The Fund invests primarily in securities issued by U.S. and non-U.S. real estate and real estate-related companies.

Fund information
Inception date01/10/2007
Dividends paid (if any)Quarterly
Capital gains paid (if any)November or December
Fund identifiers
NASDAQDGROX
CUSIP245917620

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 (05/31/2016)

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

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)5.14%4.34%6.63%7.65%n/a2.34%01/10/2007
FTSE EPRA/NAREIT Developed Index5.43%4.29%6.64%7.29%n/a2.53%
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)3.86%0.01%5.87%8.66%n/a2.25%01/10/2007
FTSE EPRA/NAREIT Developed Index5.43%1.27%6.30%8.46%n/a2.58%

Returns for less than one year are not annualized.

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

The Delaware Global Real Estate Opportunities Fund's performance information for periods prior to Sept. 28, 2012, reflects the performance of The Global Real Estate Securities Portfolio (the “Portfolio”) of Delaware Pooled® Trust, which merged into Delaware Global Real Estate Opportunities Fund (the “Fund”) as of that date. The performance information for Class A shares at offer has been adjusted to reflect the Fund’s current maximum sales charge. The Fund also has higher expenses than the Portfolio, including a Rule 12b-1 fee to which the Institutional Class of the Portfolio was not subject. Historical performance results at net asset value and offer prior to Sept. 28, 2012 have not been recalculated to reflect these expenses, but future results will be affected by them. The historical performance of the Portfolio would have been lower had it been subject to the Fund’s expense ratio.

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
Gross1.47%
Net1.15%

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursements from Feb. 26, 2016 through Feb. 28, 2017. Please see the fee table in the Fund's prospectus for more information.

Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
20163.86%n/an/an/an/a
20153.67%-7.06%-0.11%3.73%-0.18%
20144.70%7.13%-3.94%7.85%16.21%
20136.06%-3.20%1.34%0.40%4.46%
201211.90%2.70%4.56%7.49%29.16%
20113.15%3.95%-16.58%7.49%-3.86%
20103.43%-7.23%17.89%5.76%19.64%
2009-21.32%31.78%21.99%3.32%30.67%
2008-7.61%-8.10%-8.35%-31.03%-46.33%
2007n/a-4.55%4.05%-8.94%n/a

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

Portfolio characteristics - as of 05/31/2016FTSE EPRA/NAREIT Developed Index
Number of holdings77322
Market cap (median)$6.81 billion$3.64 billion
Market cap (weighted average)$14.11 billion$15.37 billion
Portfolio turnover (last fiscal year)116%n/a
Beta (relative to FTSE EPRA/NAREIT Developed Index) (view definition)0.95n/a
Annualized standard deviation, 3 years (view definition)11.79n/a
Portfolio composition as of 05/31/2016Total may not equal 100% due to rounding.
Domestic equities59.4%
International equities & depositary receipts34.1%
Cash and cash equivalents6.5%
Top 10 equity holdings as of 05/31/2016
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Simon Property Group Inc.5.0%
Mitsui Fudosan Co. Ltd.3.0%
Vonovia SE2.3%
AvalonBay Communities Inc.2.1%
Scentre Group2.1%
Duke Realty Corp.2.0%
Alexandria Real Estate Equities Inc.1.9%
Equinix Inc.1.8%
Mitsubishi Estate Co. Ltd.1.7%
Prologis Inc.1.7%
Total % Portfolio in Top 10 holdings23.6%

Top 10 countries as of 05/31/2016

List excludes cash and cash equivalents.

Country% of portfolio
United States59.4%
United Kingdom6.7%
Japan6.2%
Australia5.2%
Hong Kong4.8%
Germany4.5%
France3.4%
Spain1.3%
Singapore1.2%
Canada0.9%
Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20160.0000.043
20150.0000.088
20140.0000.168
20130.0000.206
20120.0000.160
20110.0000.226
20100.0000.502
20090.0000.373
20080.0000.009
20070.0000.336
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. 

Bob Zenouzi

Bob Zenouzi 

Senior Vice President, Chief Investment Officer — Real Estate Securities and Income Solutions (RESIS)

Start date on the Fund: September 2012

Years of industry experience: 29

(View bio)


Damon Andres

Damon J. Andres, CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: September 2012

Years of industry experience: 25

(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 fees0.99%
Distribution and service (12b-1) feesnone
Other expenses0.48%
Total annual fund operating expenses1.47%
Fee waivers and expense reimbursements(0.32%)
Total annual fund operating expenses after fee waivers and expense reimbursements1.15%

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 1.15% of the Fund's average daily net assets from Feb. 26, 2016 through Feb. 28, 2017. These waivers and reimbursements may only be terminated by agreement of the Manager and the Fund.

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Delaware Global Real Estate Opportunities Fund Quarterly commentary March 31, 2016

Within the Fund

For the first quarter of 2016, Delaware Global Real Estate Opportunities Fund (Institutional Class shares and Class A shares at net asset value) underperformed its benchmark, the FTSE EPRA/NAREIT Developed Index.

As commodities rallied, commodity-based countries including Canada, Australia, and Norway performed particularly well. In general, the Fund remains underweight in these countries as the fundamentals continue to deteriorate with job losses, rising vacancies, and weakening retail sales. While we are not interested in forecasting the price of oil or other commodities, we believe the fundamentals in these countries should continue to weaken. Despite the recent rally in many commodities, companies across these regions have continued to rightsize their businesses, which is putting downward pressure on fundamentals. Germany, an area we are positive on, also performed well as investors searched for stable yield. As the German residential market remains dominated by renters, the multifamily sector continued to post solid returns due to its strong fundamental backdrop. The United States slightly outperformed the overall index; however, our stock selection in the U.S. detracted from the Fund’s relative performance. Some of the U.S. stocks with significant structural headwinds, such as healthcare real estate investment trusts (REITs), bounced back significantly, and the Fund’s underweight hurt relative performance. We believe these headwinds will continue to place downward pressure on healthcare REITs, and we remain cautious.

The United Kingdom, Ireland, Spain, Italy, and Hong Kong all declined for the quarter. Of these, the largest underperformer by a significant amount was the U.K., which can be attributed to a combination of slightly elevated stock prices and fear over the U.K. exiting the European Union (EU), the so-called “Brexit.” As the potential for a Brexit has increased noticeably over the past six months, the stocks have sold off significantly and are now one of the least expensive areas across the globe. If the U.K. remains in the EU, we believe the stocks could have meaningful upside considering their current discounts. Italy and Spain underperformed as is common when the euro area has a growth concern. Italy, in particular, seems to be of concern to us as its banking sector does not appear to be as strong as other countries’ within the euro zone. We grew incrementally more cautious on Italian financing and ultimately exited the Fund’s sole position in the region. Despite the rally, Hong Kong significantly lagged. Hong Kong has shown significant weakness with retail sales down more than 20% year over year and home prices down 13% from their peak. Hong Kong fundamentals continue to remain challenged.

Outlook

We believe volatility across markets is likely to continue throughout 2016. Investors across the globe appear to be chasing the stability of real estate cash flows in search of yield. Given the slower global growth backdrop, we believe real estate has the potential to offer many investors attractive yield with some potential growth. We will continue to monitor the widening of credit spreads, which have retreated from their recent peaks but remain elevated.

We continue to maintain the Fund’s overweight in the U.S. given solid fundamentals of low supply and reasonable rental growth, while the cost and availability of capital remain favorable. The Fund will also continue to invest in Europe because we see gradual but positive fundamental recovery in Spain, Germany, and France. The Fund’s European positioning is tilted toward large-cap retail in German residential markets, as well as general exposure to multiple property sectors in Spain. In late 2015, we reduced the Fund’s position in the U.K. given strong outperformance, but with the significant fall in stock prices, the region has become more attractive to us again.

The Fund continues to be underweight in China, as the country’s slowdown has affected most of the region. While stocks have cheapened, the significant slowdown in the economy and significant debt growth since 2008 have raised concerns. Hong Kong faces a difficult outlook, and we expect to see continued downward pressure on Hong Kong home prices. In addition, the slowdown in China has had a negative effect on tourism in Hong Kong. Japan, which has performed well year-to-date, is of particular concern. The economic numbers reported by Japan continue to worsen despite continuous attempts by the Bank of Japan to revive growth. If one looks at how Japan’s stock market has performed year to date, most sectors are down 12–20%, with banks among the weakest. Japanese REITs (J-REITs) remarkably turned in a strong gain for the first quarter, and they have the most expensive valuations in the global real estate universe. We question how long J-REITs can continue to perform well with expensive valuations and with a poor bank-lending market due to negative interest rates. We continue to believe a more defensive positioning is appropriate for the Fund.

[16600]

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.

Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors.

REIT investments are subject to many of the risks associated with direct real estate ownership, including changes in economic conditions, credit risk, and interest rate fluctuations.

A REIT fund's tax status as a regulated investment company could be jeopardized if it holds real estate directly, as a result of defaults, or receives rental income from real estate holdings.

“Nondiversified” funds may allocate more of their net assets to investments in single securities than “diversified” funds. Resulting adverse effects may subject these funds to greater risks and volatility.

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 06/24/2016)

Institutional ClassPriceNet change
NAV$7.36-0.26
Max offer price$7.36n/a

Total net assets (as of 05/31/2016)

$60.7 million all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 05/31/2016)
RatingNo. of funds
Overall5208
3 Yrs4208
5 Yrs5165
Morningstar categoryGlobal Real Estate

(View Morningstar disclosure)

Lipper ranking (as of 05/31/2016)

YTD ranking35 / 186
1 year30 / 167
3 years26 / 128
5 years6 / 96
10 yearsn/a
Lipper classificationGlobal Real Estate Funds

(View Lipper disclosure)

Benchmark

FTSE EPRA/NAREIT Developed Index (view definition)

Lipper Global Real Estate Funds Average (view definition)

Additional information