Delaware Value® Fund

Objective

Delaware Value® Fund seeks long-term capital appreciation.

Strategy

The Fund invests in large-capitalization companies, seeking consistent long-term performance. The Fund follows a traditional value-oriented investment philosophy using a research-intensive approach.

Fund information
Inception date09/15/1998
Dividends paid (if any)Quarterly
Capital gains paid (if any)November or December
Fund identifiers
NASDAQDDVIX
CUSIP24610C857

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 (07/31/2016)

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

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)12.37%10.50%11.72%15.17%7.94%7.86%09/15/1998
Russell 1000 Value Index9.38%5.38%8.99%12.75%6.18%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)8.98%10.30%12.84%13.80%8.04%7.82%09/15/1998
Russell 1000 Value Index4.58%2.86%9.87%11.35%6.13%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
Gross0.72%
Net0.72%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
20161.69%8.98%n/an/an/a
20151.83%-1.67%-7.28%7.33%-0.35%
20142.79%5.51%1.74%3.05%13.69%
201312.24%3.91%4.47%9.52%33.44%
20128.25%-0.42%4.79%1.35%14.48%
20117.86%1.71%-12.91%14.23%9.14%
20103.75%-9.68%12.60%9.96%16.03%
2009-10.67%10.53%11.45%7.03%17.77%
2008-9.70%-5.74%-8.79%-13.55%-32.88%
20070.45%6.44%-2.85%-6.39%-2.77%
20066.33%0.34%8.44%7.07%23.88%

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

Portfolio characteristics - as of 07/31/2016Russell 1000 Value Index
Number of holdings33692
Market cap (median)$47.94 billion$7.87 billion
Market cap (weighted average)$87.17 billion$113.65 billion
Portfolio turnover (last fiscal year)12%n/a
Beta (relative to Russell 1000 Value Index) (view definition)0.92n/a
SEC 30-day yield with waiver (view definition)1.74%
SEC 30-day yield without waiver (view definition)1.74%
Annualized standard deviation, 3 years (view definition)10.61n/a
Portfolio composition as of 07/31/2016Total may not equal 100% due to rounding.
Domestic equities96.7%
Cash and cash equivalents3.3%
Top 10 equity holdings as of 07/31/2016
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Archer-Daniels-Midland Co.3.2%
EI du Pont de Nemours & Co.3.2%
Pfizer Inc.3.2%
Intel Corp.3.2%
Quest Diagnostics Inc.3.1%
Johnson Controls Inc.3.1%
Cardinal Health Inc.3.1%
AT&T Inc.3.1%
Johnson & Johnson3.1%
Cisco Systems Inc.3.1%
Total % Portfolio in Top 10 holdings31.4%

Equity sectors as of 07/31/2016

List excludes cash and cash equivalents.

SectorFundBenchmark
Healthcare19.5%0.0%
Energy13.1%0.0%
Information technology12.3%0.0%
Consumer staples12.2%0.0%
Financials12.0%0.0%
Industrials9.1%0.0%
Consumer discretionary6.2%0.0%
Telecommunication services6.1%0.0%
Materials3.2%0.0%
Utilities3.1%0.0%
Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20160.0000.166
20150.2430.332
20140.0000.289
20130.0000.258
20120.0000.199
20110.0000.221
20100.0000.202
20090.0000.209
20080.0000.279
20070.6500.274
20060.2240.223

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. 

The process is our star

The Large-Cap Value team at Delaware Investments discusses why a fundamental research-driven process, with roots going back to the 1970s, is the true star of the team.

Watch the video

Read video transcript

Ty Nutt

Ty Nutt  

Senior Vice President, Senior Portfolio Manager, Team Leader

Start date on the Fund: July 2004

Years of industry experience: 33

(View bio)


Kristen Bartholdson

Kristen E. Bartholdson 

Vice President, Senior Portfolio Manager

Start date on the Fund: December 2008

Years of industry experience: 16

(View bio)


Nik Lalvani

Nikhil G. Lalvani, CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: October 2006

Years of industry experience: 19

(View bio)


Bob Vogel

Robert A. Vogel Jr., CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: July 2004

Years of industry experience: 24

(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 fees0.52%
Distribution and service (12b-1) feesnone
Other expenses0.20%
Total annual fund operating expenses0.72%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements0.72%

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

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Delaware Value® Fund Quarterly commentary June 30, 2016

Within the Fund

For the second quarter of 2016, Delaware Value Fund (Institutional Class shares and Class A at net asset value) outperformed its benchmark, the Russell 1000® Value Index. At the portfolio level, stock selection was the main contributor, accounting for approximately 80% of excess return. The remainder came from sector allocation.

Investments in information technology and materials caused the largest drags on relative returns. As a group, the Fund’s four technology holdings trailed those in the benchmark, down -0.7% versus a 1.2% gain for the sector in the benchmark. Shares of Xerox — a provider of document management and business processing services — were weakest, down -14.2%. In its most recent quarterly report, issued in April, the company indicated that restructuring costs associated with its impending split into two separate companies would be higher than anticipated. Xerox also lowered its cash flow forecast, and its management team said it would not repurchase shares this year. The stock fell -13% the day of the announcement. In the materials sector, the Fund’s one holding, DuPont, gained 2.9% compared to a 6.3% return for the sector in the benchmark. As a diversified, global producer of agricultural products and specialty materials, DuPont did not benefit from the rally in commodity prices as much as the sector, more broadly. Also, there remains some uncertainty around the company’s direction because it is in the midst of pursuing a merger of equals with Dow Chemical.

Investments in the financial and consumer discretionary sectors contributed most to relative performance. In financials, the portfolio benefited from stock selection and an underweight allocation. The Fund’s four financial stocks rose 7.9%, on average, compared to 2.2% for the sector in the benchmark. Insurance broker and professional services provider Marsh & McLennan Cos. was the portfolio’s strongest holding in the sector, up 13.2%. In late April, the company reported results for the first quarter, which showed steady year-over-year revenue growth of 4% along with solid gains in earnings. In May, Marsh & McLennan Cos. announced it would increase its quarterly dividend by 9.7%. Together, the Fund’s two consumer discretionary holdings were up 9.5% versus a decline of -5.6% for the sector in the benchmark. Johnson Controls, a provider of automotive interiors and batteries, and building efficiency systems, led the sector higher, up 14.3%. In its most recent quarterly report, Johnson Controls raised its earnings-per-share guidance for the coming quarter and full fiscal year. The company remains on track to merge with Tyco International later this year. As part of this combination, Johnson Controls’ automotive interiors business will be spun off into a separate company called Adient.

We made one full-position sale in the second quarter. In early June, the Fund’s holding in biopharmaceutical maker Baxalta was sold as a result of its acquisition by Ireland-based Shire PLC. Baxalta (which formed when Baxter International divided into two separate companies) first came into the Fund when the split occurred in July 2015. That October, after evaluating the long-term potential of each business as a stand-alone investment, we made the decision to sell “new” Baxter and use the proceeds to round up Baxalta to a full 3% position. At the time, we believed the company had a more attractive valuation relative to its growth prospects; improving free cash flow dynamics; exposure to three, important therapeutic areas; a better chance of retaining market share in a key drug franchise than the market was expecting; and the potential for more limited downside because of Shire’s acquisition interest. As it turns out, Shire and Baxalta agreed on a deal in January 2016. For the nearly one-year period that Baxalta was held in the Fund, it was the strongest performer among all positions, with a total return of 45%. The decision to sell was made because Baxalta (now Shire) was no longer domiciled in the United States, which by our own guidelines, made it ineligible for the Fund. We are in the process of completing in-depth research on a replacement candidate and expect to make a decision on that stock in the coming quarter.

Outlook

The broad market’s 2.5% return in the second quarter was accompanied by an expansion in price multiples. The price-earnings (P/E) ratio for the S&P 500® Index based on 12-month trailing reported earnings rose to 24x from 22x. Similarly, the price-cash-flow-ratio for the S&P 500 Index moved higher, to 11.4x from 10.9x. In our view, U.S. stock market valuations are stretched and have been so for several years. Along with rising price multiples, we’re seeing declining profit margins. Based on reported earnings per share, the four-quarter trailing average profit margin of the S&P 500 Index has fallen to 7.7% from a peak of more than 9% in 2014. We think this is partly attributable to higher corporate debt levels (up 10%, year over year, marking the highest aggregate debt level in more than 10 years), and rising employment costs (median year-over-year wage growth was 3.5% through May 2016, up from 2.8% at the end of 2014). (Sources: Ned Davis Research, Yardeni Research, FactSet Research Systems, Federal Reserve Bank of Atlanta.)

We expect to maintain our long established defensive tilt in the Fund’s portfolio, with overweight allocations in consumer staples, healthcare, and telecommunication services and underweights in most of the more-cyclical areas of the market. In addition to conducting in-depth research on a company in the healthcare sector, we are currently focusing on new opportunities in consumer discretionary and information technology.

[17088]

The S&P 500 Index measures the performance of 500 mostly large-cap stocks weighted by market value, and is often used to represent performance of the U.S. stock market.

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.

Because the Fund expects to hold a concentrated portfolio of a limited number of securities, the Fund's risk is increased because each investment has a greater effect on the Fund's overall performance.

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 08/26/2016)

Institutional ClassPriceNet change
NAV$19.38-0.06
Max offer price$19.38n/a

Total net assets (as of 07/31/2016)

$12.6 billion all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 07/31/2016)
RatingNo. of funds
Overall51173
3 Yrs51173
5 Yrs51030
10 Yrs5760
Morningstar categoryLarge Value

(View Morningstar disclosure)

Morningstar ranking (as of 07/31/2016)

YTD ranking111 / 1412
1 year67 / 1378
3 years19 / 1173
5 years7 / 1030
10 years45 / 760
Morningstar categoryLarge Value

(View Morningstar disclosure)

Lipper ranking (as of 07/31/2016)

YTD ranking13 / 525
1 year10 / 508
3 years2 / 443
5 years3 / 399
10 years14 / 288
Lipper classificationLarge-Cap Value Funds

(View Lipper disclosure)

Benchmark, peer group

Russell 1000® Value Index (view definition)

Morningstar Large Value Category (view definition)

Lipper Large-Cap Value Funds Average (view definition)

Additional information