Delaware Smid Cap Growth Fund


Delaware Smid Cap Growth Fund seeks long-term capital appreciation.


The Fund invests primarily in common stocks of growth-oriented companies that its portfolio managers believe have long-term capital appreciation potential and expect to grow faster than the U.S. economy. The portfolio managers particularly seek small to mid-sized companies.

Fund information
Inception date11/09/1992
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 (08/31/2016)

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

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)8.82%12.01%11.43%13.51%11.06%10.34%11/09/1992
Russell 2500 Growth Index6.64%4.65%9.57%13.49%8.95%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)0.09%0.39%11.25%9.92%9.67%10.08%11/09/1992
Russell 2500 Growth Index2.70%-7.69%9.06%9.27%7.96%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
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 08/31/2016Russell 2500 Growth Index
Number of holdings391,452
Market cap (median)$4.00 billion$1.21 billion
Market cap (weighted average)$4.95 billion$4.25 billion
Portfolio turnover (last fiscal year)24%n/a
Beta (relative to Russell 2500 Growth Index) (view definition)0.69n/a
Annualized standard deviation, 3 years (view definition)11.39n/a
Portfolio composition as of 08/31/2016Total may not equal 100% due to rounding.
Domestic equities94.7%
International equities & depositary receipts4.8%
Cash and cash equivalents0.5%
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
United Rentals Inc.5.8%
Mobileye NV4.8%
Ambarella Inc.4.3%
Intercept Pharmaceuticals Inc.3.8%
Jack in the Box Inc.3.8%
Acacia Communications Inc.3.7%
Align Technology Inc.3.5%
Lennox International Inc.3.4%
Pacira Pharmaceuticals Inc. DE3.4%
American Woodmark Corp.3.3%
Total % Portfolio in Top 10 holdings39.8%

Equity sectors as of 08/31/2016

List excludes cash and cash equivalents.

Information technology29.4%0.0%
Consumer discretionary13.8%0.0%
Consumer staples2.9%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. 

Alexander Ely

Alex Ely 

Senior Vice President, Chief Investment Officer — Small/Mid-Cap Growth Equity

Start date on the Fund: July 2016

Years of industry experience: 24

(View bio)

Effective July 1, 2016, the Small/Mid-Cap Growth team, of Delaware Management Company, replaced the Fund's sub-advisor, Jackson Square Partners, LLC. In connection with the investment team change, the board approved certain changes to the Fund's investment strategy. These changes may result in higher portfolio turnover in the near term. 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 877 693-3546800 523-1918800 362-7500. These changes are significant and may affect future performance, as well as create tax implications.

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 fees0.71%
Distribution and service (12b-1) feesnone
Other expenses0.23%
Total annual fund operating expenses0.94%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements0.94%

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

View printable commentary E-mail this page

This commentary is currently not available. Please check back later.

Delaware Smid Cap Growth Fund Quarterly commentary June 30, 2016

Within the Fund

For the second quarter of 2016, Delaware Smid Cap Growth Fund (Institutional Class shares and Class A shares at net asset value) underperformed its benchmark, the Russell 2500TM Growth Index. While performance was largely driven by stock exposure, on a sector level, consumer discretionary and financials were the largest detractors from performance.

Bio-Techne was a contributor to the Fund’s performance during the quarter as the company reported that its organic revenue increased by 8%. The company had positive performance in China despite a currency drag overall. Prospects for Maurice, a newer Protein Platform instrument, is exceeding expectations. We believe Bio-Techne holds a unique competitive position in manufacturing biotechnology cultures and other products that are instrumental to drug discovery and treatment.

Pandora Media was a contributor to performance during the quarter. A 13D filing by Corvex Management, an activist hedge fund, revealed that it had taken an 8.3% stake in Pandora; Corvex is pushing the company towards a sale, which should increase pressure on Pandora’s management to deliver shareholder value in a timely manner. Additionally, there appears to be a strong likelihood that Pandora will negotiate some on-demand direct deals with major labels. While there are ongoing concerns about increased competition in the streaming music service environment, we continue to believe that Pandora offers a differentiated user experience. We believe that the company, as an industry leader in streaming music services, should continue to benefit from the proliferation of wireless and streaming devices that makes Pandora’s services even more accessible, whether as a standalone entity or acquisition target.

Yelp also contributed to performance during the quarter as the company’s earnings beat expectations and forward guidance. Local advertising revenue was strong. Additionally, the company hired a new CFO, Lanny Baker, who intends to focus on driving more merchants through self-serve portals as well as transactions across all verticals.

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 to 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.

LendingClub was a detractor to performance during the quarter. Early in May, CEO Renaud Laplanche was asked to step down as a result of an internal review that discovered control deficiencies and found that he had violated firm business practices. The company has come under regulatory scrutiny as a result of its actions and because the online lending industry is in the development stages. While an increasingly competitive environment had been making it more difficult for LendingClub in the last year, these recent concerns could shake investor confidence and threaten the lending base overall. The company announced Scott Sanborn as the permanent CEO and set expectations that second quarter originations would be one-third lower than the previous quarter. Despite these setbacks, we believe the company is positioned well to benefit from the shift from local banks and other lenders towards an online commoditized marketplace.


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.


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.

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

Holding a relatively concentrated portfolio of a limited number of securities may increase risk because each investment has a greater effect on the Fund’s overall performance than would be the case for a more diversified fund.

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
Max offer price$34.61n/a

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

$1.2 billion all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 08/31/2016)
RatingNo. of funds
3 Yrs5662
5 Yrs4582
10 Yrs5433
Morningstar categoryMid-Cap Growth

(View Morningstar disclosure)

Morningstar ranking (as of 08/31/2016)

YTD ranking68 / 732
1 year30 / 730
3 years74 / 662
5 years110 / 582
10 years7 / 433
Morningstar categoryMid-Cap Growth

(View Morningstar disclosure)

Lipper ranking (as of 08/31/2016)

YTD ranking92 / 569
1 year29 / 561
3 years15 / 498
5 years82 / 443
10 years6 / 316
Lipper classificationSmall-Cap Growth Funds

(View Lipper disclosure)

Benchmark, peer group

Russell 2500 Growth Index (view definition)

Morningstar Mid-Cap Growth Category (view definition)

Lipper Small-Cap Growth Funds Average (view definition)

Additional information