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 (06/30/2016)

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

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)9.13%13.07%8.80%8.90%n/a2.73%01/10/2007
FTSE EPRA/NAREIT Developed Index9.38%12.57%8.94%8.62%n/a2.91%
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)5.08%13.07%8.80%8.90%n/a2.73%01/10/2007
FTSE EPRA/NAREIT Developed Index3.74%12.57%8.94%8.62%n/a2.91%

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%5.08%n/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 06/30/2016FTSE EPRA/NAREIT Developed Index
Number of holdings82326
Market cap (median)$6.90 billion$3.62 billion
Market cap (weighted average)$14.22 billion$15.82 billion
Portfolio turnover (last fiscal year)116%n/a
Beta (relative to FTSE EPRA/NAREIT Developed Index) (view definition)0.96n/a
Annualized standard deviation, 3 years (view definition)11.80n/a
Portfolio composition as of 06/30/2016Total may not equal 100% due to rounding.
Domestic equities60.6%
International equities & depositary receipts33.8%
Cash and cash equivalents5.6%
Top 10 equity holdings as of 06/30/2016
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Simon Property Group Inc.4.9%
Vonovia SE2.4%
Mitsui Fudosan Co. Ltd.2.4%
Duke Realty Corp.2.2%
Alexandria Real Estate Equities Inc.2.1%
Equinix Inc.1.9%
Scentre Group1.9%
Vornado Realty Trust1.9%
General Growth Properties Inc.1.8%
Digital Realty Trust Inc.1.8%
Total % Portfolio in Top 10 holdings23.3%

Top 10 countries as of 06/30/2016

List excludes cash and cash equivalents.

Country% of portfolio
United States60.6%
Australia6.4%
Japan5.4%
Hong Kong5.2%
Germany4.7%
United Kingdom4.6%
France3.3%
Canada1.1%
Spain1.1%
Singapore1.1%
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: 30

(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)


Scott Hastings

Scott P. Hastings, CFA, CPA

Vice President, Portfolio Manager

Start date on the Fund: July 2016

Years of industry experience: 13

(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 June 30, 2016

Within the Fund

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

The Fund benefited from its U.S. exposure due to an overweight allocation and strong stock selection. Strong-performing companies in the data center, industrial, and shopping center sectors included Digital Realty Trust, First Industrial Realty Trust, and Urban Edge Properties, respectively. In addition, MGM Growth Properties — which we added to the Fund’s portfolio during the quarter — performed strongly. MGM Growth Properties is an owner of gaming properties managed by MGM Resorts International (for now) that was attractively valued and which we believe offers good income and growth prospects. The Fund also benefited from stock selection in Singapore. Overall, Singapore has been a lackluster performer suffering from demand problems associated with the greater Asian region. However, we believe some of its companies remain attractive, including Fund holding Mapletree Commercial Trust, which has a supportive valuation for growth and a solid dividend yield.

The Fund’s exposure in Japan was a drag on performance for the quarter. While the Fund’s meaningful underweight was a positive, it was completely offset by the wild currency shift of a stronger Japanese yen in the last few days of the quarter, following Britain’s “Brexit” vote to leave the European Union (EU). Unfortunately, while currency and allocation offset each other, our stock selection was not optimal. As an example, Mitsui Fudosan, which has property and development exposure in the United Kingdom, fell 9.0%. While the company’s U.K. and European exposure is relatively small (around 3%), the macro implications of Brexit were still concerning to investors. In addition, investments in the U.K. impaired the Fund’s performance. We significantly reduced the Fund’s overweight to the U.K. throughout the quarter, which neutralized our allocation, but security selection still detracted from performance. Despite only a modest overweight in Derwent London and Great Portland Estates, their large selloffs during the quarter detracted from Fund performance. Both companies have West End London office exposure, which is a large area of concern for us following the Brexit decision.

Outlook

Volatility has certainly re-emerged following the U.K.’s decision to exit the EU. Time will tell if it was the right decision for the country or if this is the start of the unraveling of the EU (as some have suggested). What we do know is that it will create uncertainty, which is not a positive for real estate fundamentals. We believe companies will be a bit more cautious when making longer-term decisions, particularly in Europe and the U.K. On the positive side, the recent global events should keep the U.S. Federal Reserve on hold from raising rates further in the near term, which may bode well for U.S. and Hong Kong real estate investment trusts (REITs).

We continue to maintain the Fund’s overweight in the United States, given solid fundamentals, low supply, and reasonable rental growth, while the cost and availability of capital remain favorable. We have taken a more defensive position within the U.S., however, as many of the shorter-duration sectors have shown signs of slowing growth. The Fund will continue to invest selectively in Europe due to gradual but positive fundamental recoveries in Spain, Germany, and France. The Fund’s positioning in Europe is weighted toward large-cap retail in German residential markets and general exposure to multiple property sectors in Spain.

We have been adding to the Fund’s exposure in Australia as we continue to see more evidence of capitalization rate compression (higher values) driven by an easing bias by the Reserve Bank of Australia. Hong Kong continues to face a difficult outlook with falling home prices, which have fallen 12% from their peak, yet are still almost twice as expensive as they were in 2007. We expect to see continued downward pressure on Hong Kong home prices. Further, the slowdown in China is having a negative effect on tourism in Hong Kong. The reduced odds of a near-term rate hike in the U.S. by the Fed should help ease a bit of pressure on Hong Kong, though the fundamentals still remain challenged, in our view. Japan, which has performed well year-to-date, remains a concern to us. 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 significantly, with banks being among the weakest. Japanese REITs or J-REITs, remarkably, are up more than 11% year-to-date and have the most expensive valuations in the global real estate universe. We question how long J-REITs can continue to perform with expensive valuations and a poor bank-lending market due to negative interest rates. We continue to believe a more defensive positioning is appropriate.

[17066]

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 07/27/2016)

Institutional ClassPriceNet change
NAV$7.84-0.02
Max offer price$7.84n/a

Total net assets (as of 06/30/2016)

$63.8 million all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 06/30/2016)
RatingNo. of funds
Overall5208
3 Yrs4208
5 Yrs5165
Morningstar categoryGlobal Real Estate

(View Morningstar disclosure)

Morningstar ranking (as of 06/30/2016)

YTD ranking34 / 274
1 year29 / 254
3 years24 / 208
5 years9 / 165
10 yearsn/a
Morningstar categoryGlobal Real Estate

(View Morningstar disclosure)

Lipper ranking (as of 06/30/2016)

YTD ranking29 / 186
1 year27 / 170
3 years20 / 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