Delaware Small Cap Core Fund


Delaware Small Cap Core Fund seeks long-term capital appreciation.


The Fund invests in stocks of small companies believed to have a combination of attractive valuations, growth prospects, and strong cash flows.

Fund information
Inception date12/29/1998
Dividends paid (if any)Annually
Capital gains paid (if any)November or December
Fund identifiers

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)-0.32%-3.75%10.48%9.14%6.10%10.20%12/29/1998
Russell 2000 Index0.03%-5.94%7.53%6.98%5.42%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-1.16%-7.35%9.61%9.92%6.17%10.19%12/29/1998
Russell 2000 Index-1.52%-9.76%6.84%7.20%5.26%n/a

Returns for less than one year are not annualized.

Prior to Aug. 1, 2005, the Fund had not engaged in a broad distribution effort of its shares and had been subject to limited redemption requests. 12b-1 fees were waived for this period. Had 12b-1 fees been applied, performance would have been lower. Expense waivers were in effect for the periods shown. Performance would have been lower if waivers did not apply.

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
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return

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

Portfolio characteristics - as of 04/30/2016Russell 2000 Index
Number of holdings1351,950
Market cap (median)$1.74 billion$0.68 billion
Market cap (weighted average)$2.03 billion$1.90 billion
Portfolio turnover (last fiscal year)38%n/a
Beta (relative to Russell 2000 Index) (view definition)0.93n/a
Annualized standard deviation, 3 years (view definition)14.48n/a
Portfolio composition as of 04/30/2016Total may not equal 100% due to rounding.
Domestic equities98.0%
International equities & depositary receipts1.7%
Cash and cash equivalents0.4%
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.
Holding% of portfolio
West Pharmaceutical Services Inc.1.3%
Granite Construction Inc.1.1%
Tenneco Inc.1.1%
Ligand Pharmaceuticals Inc.1.1%
Proofpoint Inc.1.1%
Worthington Industries Inc.1.1%
WellCare Health Plans Inc.1.1%
Prosperity Bancshares Inc.1.1%
EPR Properties1.1%
Applied Industrial Technologies Inc.1.1%
Total % Portfolio in Top 10 holdings11.2%

Equity sectors as of 04/30/2016

List excludes cash and cash equivalents.

Capital goods9.9%0.0%
Basic materials7.4%0.0%
Business services6.1%0.0%
Consumer services3.8%0.0%
Consumer discretionary3.5%0.0%
Consumer staples2.5%0.0%
Communications services1.4%0.0%
Credit cyclicals1.1%0.0%
Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment

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. 

A blended approach

The Core Equity team blends growth and value stocks from across the small-cap universe. Learn more about the team’s differentiated stock-selection process. [Runtime: 2:29]

Watch the video

Read video transcript

Francis X. Morris

Francis X. Morris 

Senior Vice President, Chief Investment Officer — Core Equity

Start date on the Fund: November 2004

Years of industry experience: 32

(View bio)

Chris Adams

Christopher S. Adams, CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: November 2004

Years of industry experience: 27

(View bio)

Mike Morris

Michael S. Morris, CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: November 2004

Years of industry experience: 23

(View bio)

Donald Padilla

Donald G. Padilla, CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: November 2004

Years of industry experience: 29

(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 fees0.73%
Distribution and service (12b-1) feesnone
Other expenses0.29%
Total annual fund operating expenses1.02%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements1.02%

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

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Delaware Small Cap Core Fund Quarterly commentary March 31, 2016

Within the Fund

For the first quarter of 2016, Delaware Small Cap Core Fund (Institutional Class shares and Class A shares at net asset value) declined but outperformed its benchmark, the Russell 2000® Index. The most significant contributor to outperformance during the quarter was stock selection within the healthcare sector. In particular, the Fund’s holdings in the biotechnology and medical products industries relatively outperformed those tracked by the benchmark. Also contributing to relative returns was stock selection in the basic materials sector, particularly holdings within the chemicals industry. Stock selection in the transportation, energy, and capital goods sectors also contributed to relative returns.

At the same time, technology stocks detracted from relative performance, particularly those within the software, communications equipment, and internet industries. Stock selection in the finance sector also detracted from relative returns, as did consumer services stocks, primarily those within the restaurant industry. The utilities sector generated the strongest return within the benchmark for the quarter. While stock selection was strong within the Fund, an underweight allocation detracted from relative returns.

Individual stocks that contributed to outperformance included Minerals Technologies, which develops, produces, and markets various limestone and clay-based materials. The company’s stock appreciated by 24% during the quarter as earnings exceeded expectations. The company remains well positioned as it generates strong free cash flow and is realizing synergies from its 2015 acquisition of AMCOL, a competitor with high-quality sodium bentonite (clay) reserves. Another top performer from the basic materials sector was Worthington Industries, a steel manufacturing company, which appreciated 19% during the quarter. Worthington has a number of joint ventures which continue to grow revenue. The company has a strong financial position and trades at an attractive valuation relative to its peers.

In the capital goods sector, AAON, a manufacturer of air-conditioning and heating equipment, appreciated 21%. AAON reported strong earnings growth for its fiscal fourth quarter. Sales of the company’s heating and cooling units continue to grow. Additionally, the company is benefitting from sales of water heat pumps, a product that provides further opportunity for revenue growth. We maintain a positive outlook on AAON as the company has a strong product suite and continues to develop new equipment for its sales force to distribute.

Broadly speaking, stock selection in the healthcare sector was the top contributor to excess performance. However, within the sector, biotechnology firm Acorda Therapeutics detracted, as the stock fell by -38%. The firm specializes in therapies for neurological diseases, particularly multiple sclerosis. Acorda’s multiple sclerosis drug, Ampyra, continues to outsell expectations; however, news that a hedge fund filed an inter partes review (IPR) to challenge the company’s patents put pressure on the stock. An IPR process begins with a third party filing a petition with the U.S. Patent and Trademark Office and does not invalidate the company’s patents in any way. This will be the second filing against the company in a one-year period. The first was dismissed by the Patent Trial and Appeal Board (PTAB) in August of 2015. Still, we maintain a favorable outlook for Acorda as the company continues to progress with trials of Ampyra for the treatment of other neurological diseases and has had success with the PTAB before.

In the technology sector, shares of j2 Global declined 25%. The company provides business cloud services and digital media advertising, in addition to its once-core online fax business (eFax). Controversy has recently focused on the company’s patent expirations; however, the company believes it is protected for at least 10 more years. This controversy has put pressure on the stock and led to its decline. We have seen the company make smart use of its free cash flow by executing acquisitions to diversify the business.

In the finance sector, Stifel Financial, the full service mid-market broker/dealer, fell 30%. The company reported lower revenues and higher expenses. The firm has passed the crucial $10 billion Dodd-Frank Act stress testing (DFAST) and Comprehensive Capital Analysis and Review level. This adds additional cost for capital stress testing. While that will create a headwind to earnings, the company has a number of positives which keep us in favor of the stock. Stifel is acquiring Barclays’ U.S. Wealth Management, which is expected to increase revenue. The larger asset base will allow the company to better leverage its equity and add more quality assets to its balance sheet. The company currently trades at a discount to its peers and is well positioned for future asset growth.


Consumer confidence remains high, gasoline prices are low, and wage growth and household net worth are strong. As mentioned earlier, we need to see top-line growth, which is dependent upon consumer and corporate spending. The unsettled macroeconomic environment has put additional pressure on companies and their earnings. Going forward, it will be important for companies to meet or exceed expectations, or they could see added pressure on their stock. Broadly speaking, the forward price-to-earnings ratio on the Russell 2000 Index has come down, partly due to a slight uptick in forward earnings estimates. The relative premium for small-cap stocks to large-cap stocks is below the long-term average. This could lead to future investments within the size segment.

The correlation of returns for the stocks in the benchmark remains relatively low, which has historically benefited active management. We will continue to apply our investment process, which focuses on thorough company-by-company analysis and disciplined portfolio construction. The Fund’s largest overweight sectors are capital goods, basic materials, finance, healthcare, and technology. The Fund remains underweight in the yield sensitive real estate investment trusts (REITs) and utilities sectors. We intend to focus our research efforts on identifying what we view as great companies that we believe offer sustainable competitive advantages, strong balance sheets, healthy cash flows, and high-quality management teams with the potential to outperform over the long term.


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.

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.

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

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

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.

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 05/23/2016)

Institutional ClassPriceNet change
Max offer price$18.70n/a

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

$1.2 billion all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 04/30/2016)
RatingNo. of funds
3 Yrs5646
5 Yrs4562
10 Yrs3371
Morningstar categorySmall Blend

(View Morningstar disclosure)

Lipper ranking (as of 04/30/2016)

YTD ranking680 / 865
1 year291 / 803
3 years39 / 703
5 years62 / 618
10 years125 / 410
Lipper classificationSmall-Cap Core Funds

(View Lipper disclosure)

Benchmark, peer group

Russell 2000® Index (view definition)

Lipper Small-Cap Core Funds Average (view definition)

Additional information