Delaware Select Growth Fund*

Objective

Delaware Select Growth Fund seeks long-term capital appreciation.

Strategy

The Fund invests in companies of any size or market capitalization that its portfolio managers believe have long-term capital appreciation potential and are expected to grow faster than the U.S. economy.

Fund information
Inception date08/28/1997
Dividends paid (if any)Annually
Capital gains paid (if any)November or December
Fund identifiers
NASDAQVAGGX
CUSIP928931757

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)-4.77%-10.91%6.24%8.29%7.99%7.58%08/28/1997
Russell 3000 Growth Index1.54%0.74%12.12%11.79%8.65%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-6.03%-9.43%6.94%8.45%7.01%7.57%08/28/1997
Russell 3000 Growth Index0.34%1.34%13.16%12.00%8.09%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
Gross0.98%
Net0.98%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
2016-6.03%n/an/an/an/a
20153.55%0.81%-10.47%6.78%-0.21%
2014-1.16%3.51%-3.10%7.98%7.05%
20138.22%1.04%10.66%8.96%31.84%
201217.73%-5.09%4.47%-0.97%15.60%
20119.84%2.27%-11.17%7.93%7.70%
20106.29%-6.16%15.14%10.23%26.58%
20090.53%23.34%15.57%9.80%57.35%
2008-9.16%-3.86%-14.85%-24.91%-44.16%
20070.62%3.83%7.45%-2.11%9.89%
20063.84%-7.57%-1.46%7.38%1.55%

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

Portfolio characteristics - as of 05/31/2016Russell 3000 Growth Index
Number of holdings661,804
Market cap (median)$13.39 billion$1.35 billion
Market cap (weighted average)$83.94 billion$125.95 billion
Portfolio turnover (last fiscal year)46%n/a
Beta (relative to Russell 3000 Growth Index) (view definition)0.97n/a
Annualized standard deviation, 3 years (view definition)12.91n/a
Portfolio composition as of 05/31/2016Total may not equal 100% due to rounding.
Domestic equities91.9%
International equities & depositary receipts7.3%
Cash and cash equivalents0.8%
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
Celgene Corp.5.0%
Microsoft Corp.4.9%
Allergan plc4.5%
Biogen Inc.4.1%
PayPal Holdings Inc.4.0%
QUALCOMM Inc.3.7%
Sally Beauty Holdings Inc.3.1%
Pandora Media Inc.2.6%
Alphabet Inc.2.5%
Liberty Interactive Corp. QVC Group2.4%
Total % Portfolio in Top 10 holdings36.8%

Equity sectors as of 05/31/2016

List excludes cash and cash equivalents.

SectorFundBenchmark
Technology28.2%0.0%
Consumer discretionary28.0%0.0%
Financial services18.3%0.0%
Healthcare17.4%0.0%
Producer durables2.6%0.0%
Consumer staples1.9%0.0%
Utilities1.5%0.0%
Energy1.3%0.0%
Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20160.0000.000
20159.7200.000
20145.7790.216
20131.7770.000
20120.0000.000
20110.0000.000
20100.0000.000
20090.0000.000
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


Jeff VanHarte

Jeffrey S. Van Harte, CFA

Chairman, Chief Investment Officer — Jackson Square Partners, LLC

Start date on the Fund: May 2005

Years of industry experience: 35

(View bio)


Chris Bonavico

Christopher J. Bonavico, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: May 2005

Years of industry experience: 28

(View bio)


Ken Broad

Kenneth F. Broad, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: May 2005

Years of industry experience: 27

(View bio)


Chris Ericksen

Christopher M. Ericksen, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: July 2007

Years of industry experience: 21

(View bio)


Ian Ferry

Ian D. Ferry 

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: January 2013

Years of industry experience: 12

(View bio)


Patrick Fortier

Patrick G. Fortier, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: May 2005

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: August 2006

Years of industry experience: 22

(View bio)


Daniel J. Prislin, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: May 2005

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 fees0.72%
Distribution and service (12b-1) feesnone
Other expenses0.26%
Total annual fund operating expenses0.98%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements0.98%

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

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Delaware Select Growth Fund* Quarterly commentary March 31, 2016

Within the Fund

For the first quarter of 2016, Delaware Select Growth Fund (Institutional Class shares and Class A shares at net asset value) underperformed its benchmark, the Russell 3000® Growth Index. While performance was largely driven by our stock exposure, on a sector level, weak relative performance in the healthcare and utilities sectors were the main detractors.

Sally Beauty Holdings contributed to the Fund’s performance during the quarter. The stock rose after the company reported relatively strong financial results that beat consensus expectations. The company appears to be experiencing encouraging results from initiatives that the company started in 2015. Management continues to develop future strategic initiatives that we believe could add additional value. We continue to believe that this beauty supply retailer is a relatively steady growth business due to aging demographics and a relatively low level of discretionary income needed for beauty enhancement and maintenance for the company’s target customer base.

Quotient Technology, formerly known as Coupons.com, was a contributor to performance during the quarter. The stock rose after the company’s better-than-expected financial results and its announcement of a new stock repurchase program. The company continues to have an established position as a key player in the secular growth trend of paper coupons moving toward mobile coupon distribution. We believe the company should see continued growth as its products continue to deliver an attractive return on investment by increasing customer traffic for its clients.

Shutterstock was also a contributor to performance during the quarter. The stock rose, in part, after the company announced a partnership agreement with BFA, a New York-based agency that focuses on fashion, events, and entertainment photography. This partnership appears to be mutually beneficial as it helps strengthen Shutterstock’s expansion into high-end editorial content and provides BFA with increased distribution. We continue to believe that Shutterstock provides an attractive alternative to traditional licensed digital image and sound providers by providing a pure-pricing model and relatively transparent terms at a lower cost compared to existing companies. Despite new entrants to the market (including Adobe) and increased competition, we believe recent acquisitions and strategic partnerships should help the company further strengthen its competitive position.

Valeant Pharmaceuticals International detracted from the Fund’s performance during the quarter, as the company experienced multiple market moving events. The company released disappointing earnings and forward guidance and announced a delayed timeline to release its audited financials, which heightened investor concerns about a possible technical default on its bank debt. A “perfect storm” of negative fundamental developments has occurred at Valeant over the past several months — many of which we believe were caused by the company, but some of which were exacerbated by industry dynamics and negative investor sentiment toward healthcare stocks more broadly. Our target weight over the period has not exceeded a mid-portfolio weight. It is currently a low weight in the portfolio to reflect a higher risk-reward profile. The situation with Valeant is extremely fluid and we continue to closely monitor near-term data points.

Celgene was a detractor from performance during the quarter. The company reported weaker-than-expected earnings results and forward guidance driven, in part, by negative foreign currency effects, an increase in research and developments costs, and slowing sales in its key cancer drug, Revlimid. Additionally, the company announced changes to its senior management. We are not overly concerned with the news and feel the long-term prospects for the company’s key drug continue to appear robust, as the drug seems poised to gain approval for new indications within new markets. Celgene continues to be a leader in the treatment of blood cancer with a growing pipeline of breast, lung, and pancreatic cancer treatments. We believe that the company is well positioned to continue to benefit from growth prospects driven by additional indications for its drugs, by increased use of existing drugs, and by international growth opportunities.

Allergan also detracted from performance during the quarter. The stock, along with others in the pharmaceutical industry, experienced weakness due, in part, to larger specialty pharmaceutical companies being under intensified pressure in the wake of Valeant Pharmaceutical’s ongoing issues. Additionally, investors grew concerned about the proposed merger between Pfizer and Allergan. We continue to believe that Allergan operates at a high level, driven by the core ophthalmology franchise and by the broader use of Botox in both cosmetic and other medical indications. Since Allergan recently merged with Actavis, we continue to assess the investment merits of a combined Allergan/Actavis entity.

Outlook

Despite positive absolute returns in the equity market during recent years, the ever-changing market sentiment demonstrates to us that there are more than just fundamental factors affecting stock prices. In our view, a lack of confidence in the fundamental outlook suggests 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.

[16397]

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.

*Effective after the close of business on June 8, 2012, Delaware Select Growth Fund was closed to new investors. Existing shareholders of the Fund; certain retirement plans and IRA transfers and rollovers from these plans; and certain advisory or fee-based programs sponsored by and/or controlled by financial intermediaries where the financial intermediary has entered into an arrangement with the Fund’s Distributor or transfer agent (mutual fund wrap accounts) may continue to purchase shares. Please read the latest prospectus and the summary prospectus for more information concerning this event.

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.

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

Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group.

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.

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

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.

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 06/28/2016)

Institutional ClassPriceNet change
NAV$37.120.83
Max offer price$37.12n/a

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

$648.7 million all share classes

Lipper ranking (as of 05/31/2016)

YTD ranking581 / 630
1 year561 / 606
3 years477 / 528
5 years311 / 450
10 years108 / 321
Lipper classificationMulti-Cap Growth Funds

(View Lipper disclosure)

Benchmark, peer group

Russell 3000® Growth Index (view definition)

Lipper Multi-Cap Growth Funds Average (view definition)

Additional information