Delaware U.S. Growth Fund

Objective

Delaware U.S. Growth Fund seeks long-term capital appreciation by investing in equity securities of companies we believe have the potential for sustainable free cash flow growth.

Strategy

The Fund invests in stocks of medium- to large-sized companies that its portfolio managers believe to have long-term capital appreciation potential and are expected to grow faster than the U.S. economy.

Fund information
Inception date02/03/1994
Dividends paid (if any)Annually
Capital gains paid (if any)November or December
Fund identifiers
NASDAQDEUIX
CUSIP245917802

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)-7.65%-6.84%10.08%11.28%7.38%7.25%02/03/1994
Russell 1000 Growth Index1.36%3.02%13.07%12.35%8.78%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-1.34%-6.84%10.08%11.28%7.38%7.25%02/03/1994
Russell 1000 Growth Index0.61%3.02%13.07%12.35%8.78%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
Gross0.79%
Net0.79%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
2016-6.40%-1.34%n/an/an/a
20152.78%1.43%-7.24%8.75%5.16%
2014-0.04%5.17%0.57%6.58%12.69%
201310.05%0.05%9.81%10.98%34.19%
201215.94%-5.21%6.29%-0.70%15.99%
20115.98%1.71%-10.34%11.75%8.00%
20102.45%-11.44%14.86%9.65%14.27%
2009-0.11%15.60%12.82%10.77%44.30%
2008-11.03%-3.85%-15.00%-22.31%-43.51%
20070.49%4.21%8.08%0.00%13.19%
20063.91%-6.06%-0.89%6.06%2.61%

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

Portfolio characteristics - as of 06/30/2016Russell 1000 Growth Index
Number of holdings32599
Market cap (median)$31.48 billion$7.99 billion
Market cap (weighted average)$112.54 billion$133.05 billion
Portfolio turnover (last fiscal year)40%n/a
Beta (relative to Russell 1000 Growth Index) (view definition)0.99n/a
Annualized standard deviation, 3 years (view definition)12.61n/a
Portfolio composition as of 06/30/2016Total may not equal 100% due to rounding.
Domestic equities95.7%
International equities & depositary receipts2.7%
Cash and cash equivalents1.5%
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
Visa Inc.5.7%
Crown Castle International Corp.5.5%
Celgene Corp.5.1%
QUALCOMM Inc.4.9%
PayPal Holdings Inc.4.8%
Electronic Arts Inc.4.8%
Allergan plc4.8%
Microsoft Corp.4.6%
Liberty Interactive Corp. QVC Group4.5%
Walgreens Boots Alliance Inc.4.4%
Total % Portfolio in Top 10 holdings49.1%

Equity sectors as of 06/30/2016

List excludes cash and cash equivalents.

SectorFundBenchmark
Technology27.5%0.0%
Financial services27.0%0.0%
Consumer discretionary20.7%0.0%
Healthcare18.8%0.0%
Consumer staples4.4%0.0%
Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20160.0000.000
20152.9520.142
20140.6950.118
20130.0000.019
20120.0000.028
20110.0000.021
20100.0000.022
20090.0000.009
20080.0000.017
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: April 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: April 2005

Years of industry experience: 28

(View bio)


Chris Ericksen

Christopher M. Ericksen, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: September 2005

Years of industry experience: 22

(View bio)


Daniel J. Prislin, CFA

Portfolio Manager, Equity Analyst — Jackson Square Partners, LLC

Start date on the Fund: April 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 fees0.55%
Distribution and service (12b-1) feesnone
Other expenses0.24%
Total annual fund operating expenses0.79%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements0.79%

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

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Delaware U.S. Growth Fund Quarterly commentary June 30, 2016

Within the Fund

For the second quarter of 2016, Delaware U.S. Growth Fund (Institutional Class shares and Class A shares at net asset value) underperformed its benchmark, the Russell 1000® Growth Index. While performance was largely driven by our stock exposure, on a sector level, healthcare and consumer discretionary were the largest detractors from performance.

Crown Castle International was one of the largest contributors to the Fund’s performance during the quarter. The company reported better-than-expected financial results and revised guidance upward for the rest of 2016. Organic site rental revenue was up by 8%, driven by delayed churn. Post the acquisition of Tower Development Corporation in April 2016, the company also added additional disclosures exposing a strong, 23% small cell business growth rate. The proliferation of wireless devices (smartphones and tablets) continues to be in strong secular demand and we believe the company is the industry leader of wireless towers in North America.

Electronic Arts was a contributor to performance during the quarter. The company reported positive quarterly earnings, beating on both the revenue and margin front. Performance was driven by the company’s strong sport franchises and Star Wars Battlefront game. Additionally, digital and mobile games were key contributors to growth. We continue to believe the company should benefit from upcoming and established game franchises and from its growth within the digital downloads and mobile phone gaming channels, which will be increasingly important for the company’s growth moving forward.

Equinix also contributed to performance during the quarter. The company announced further expansion plans which include additional data centers, the selling off of certain data centers to Digital Realty, and a strategic partnership with Datang Telecom Group in China. Increased globalization, combined with the need for a secure and accessible networks to meet the needs of clients’ geographically dispersed workforces, continue to create significant demand. We believe its innovative product offerings allow Equinix to be well positioned in a technology spending environment that is focused on addressing the needs of enterprises, specifically those that are struggling to maintain the highest level of network performance and quality of service for global users.

Allergan was one of the largest detractors from the Fund’s performance during the quarter. The stock experienced weakness, along with others in the pharmaceutical industry. The planned merger between Pfizer and Allergan was called off in early April due to implications of the U.S. Treasury Department’s new three-year-look-back rule for tax inversion transactions. 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 in other medical indications. In addition, the company is in the midst of a sale of its generics business to Teva Pharmaceutical Industries, which could result in as much as $18 billion of cash — capital that could be efficiently allocated to increase shareholder value through stock buybacks or other strategic investments.

L Brands detracted from performance during the period. Despite a record year in 2015, the stock’s overall weakness in 2016 was exasperated by a few announcements that seemed to create investor uncertainty. Most notably, Victoria’s Secret will be exiting swimwear, discontinuing the use of a print catalogue, and restructuring into three key operational segments (core lingerie, beauty, and PINK). Changes in L Brands’ promotional strategy and overall repositioning seem to have affected management’s visibility in same-store comparisons. We met with management and believe that the disruptions currently affecting the company’s profit and loss are temporary. Additionally, management has a plan for returning Victoria’s Secret to its historical growth algorithm and believes that this restructuring should increase defensibility once complete.

Liberty Global — a U.K.-based cable services provider operating in the United Kingdom and Europe — was a detractor from performance during the quarter. The British vote to leave the European Union (Brexit) has created uncertainty about the economy in the U.K. and European Union (EU) for the short and long term. Since the company receives 35% of its revenues in the British pound and there is speculation about a U.K. recession, the company’s stock was hurt as a result. There is also speculation that Brexit could alter the process for the EU review of the proposed Vodafone and Liberty Global joint venture. Nonetheless, we believe the company has an advantageous network with sustainable pricing power.

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.

[17121]

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.

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.

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 07/25/2016)

Institutional ClassPriceNet change
NAV$25.14-0.02
Max offer price$25.14n/a

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

$2.9 billion all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 06/30/2016)
RatingNo. of funds
Overall31483
3 Yrs31483
5 Yrs41289
10 Yrs3931
Morningstar categoryLarge Growth

(View Morningstar disclosure)

Morningstar ranking (as of 06/30/2016)

YTD ranking1626 / 1683
1 year1417 / 1627
3 years927 / 1483
5 years293 / 1289
10 years442 / 931
Morningstar categoryLarge Growth

(View Morningstar disclosure)

Lipper ranking (as of 06/30/2016)

YTD ranking692 / 715
1 year612 / 678
3 years472 / 621
5 years154 / 547
10 years212 / 395
Lipper classificationLarge-Cap Growth Funds

(View Lipper disclosure)

Benchmark, peer group

Russell 1000® Growth Index (view definition)

Lipper Large-Cap Growth Funds Average (view definition)

Additional information