Delaware Healthcare Fund

Key features

  • Actively managed, globally oriented fund with focused exposure to an industry with significant long-term growth potential
  • Emphasis on companies with franchise sustainability and attractive valuations
  • Portfolio manager with extensive experience in both the healthcare and asset management industries
Fund information
Inception date09/28/2007
Dividends paid (if any)Annually
Capital gains paid (if any)December
Fund identifiers
Investment minimums
Initial investment$1,000
Subsequent investments$100
Systematic withdrawal balance$5,000
Account features
Payroll deductionYes

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 (12/31/2019)

as of quarter-end (12/31/2019)

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)31.53%31.53%19.84%12.90%16.44%16.67%09/28/2007
Max offer price23.97%23.97%17.49%11.58%15.75%16.10%
Russell 3000 Healthcare Index22.11%22.11%16.67%10.47%15.23%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)20.69%31.53%19.84%12.90%16.44%16.67%09/28/2007
Max offer price13.75%23.97%17.49%11.58%15.75%16.10%
Russell 3000 Healthcare Index14.93%22.11%16.67%10.47%15.23%n/a

Returns for less than one year are not annualized.

Class A shares have a maximum up-front sales charge of 5.75% and are subject to an annual distribution fee.

Prior to Jan. 28, 2010, the Fund had not engaged in a broad distribution effort of its shares and had been subject to limited redemption requests. The returns reflect expense limitations that were in effect during certain periods and which may have been lower than the Fund's current expenses. The returns would have been lower without expense limitations.

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
Portfolio characteristics - as of 12/31/2019Russell 3000 Healthcare Index
Number of holdings107386
Market cap (median) Source: FactSet$3.8 billion993761500.000000000
Market cap (weighted average) Source: FactSet$82.7 billion125879557210.210000000
Portfolio turnover (last fiscal year)33%n/a
Beta (relative to Russell 3000 Healthcare Index) (view definition)1.05n/a
Annualized standard deviation, 3 years (view definition)15.57n/a
Portfolio composition as of 12/31/2019Total may not equal 100% due to rounding.
Domestic equities72.6%
International equities & depositary receipts27.9%
Cash and cash equivalents-0.5%

Values in excess of 100% and negative values may appear as the result of certain assets and liabilities. See the Fund's prospectus for securities in which the Fund would typically invest.

Top 10 holdings as of 12/31/2019

Holdings are as of the date indicated and subject to change.

List may exclude cash, cash equivalents, and exchange-traded funds (ETFs) that are used for cash management purposes. Please see the Fund’s complete list of holdings for more information.

Holdings based by issuer.

Holding% of portfolio
Sanofi S.A.9.98%
Amgen Inc.5.61%
Roche Holding AG5.51%
uniQure NV4.70%
Regeneron Pharmaceuticals Inc.3.57%
UnitedHealth Group Inc.3.32%
Chugai Pharmaceutical Co. Ltd.2.86%
CVS Health Corp.2.41%
Total % Portfolio in Top 10 holdings44.73%
Sector allocation as of 12/31/2019

List may exclude cash, cash equivalents, and exchanged-traded funds (ETFs) that are used for cash management purposes. Please see the Fund’s complete list of holdings for more information.

Blue chip medical products42.3%
Healthcare services10.2%
Small/mid-cap medical products6.8%
Medical distributors0.2%
Distribution history - annual distributions (Class A)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.

Liu-Er Chen

Liu-Er Chen, CFA

Senior Vice President, Chief Investment Officer — Emerging Markets and Healthcare

Start date on the Fund: September 2007

Years of industry experience: 24

(View bio)

You may qualify for sales-charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in Delaware Funds® by Macquarie. More information about these and other discounts is available from your financial intermediary, in the Fund's Prospectus under the section entitled "About your account," and in the Fund's statement of additional information (SAI) under the section entitled "Purchasing Shares."

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 price5.75%
Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lowernone
Annual fund operating expenses
Management fees0.83%
Distribution and service (12b-1) fees0.25%
Other expenses0.20%
Total annual fund operating expenses1.28%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements1.28%
This commentary is currently not available. Please check back later.

Delaware Healthcare Fund Quarterly commentary March 31, 2018

Market Review

Global healthcare stocks declined slightly during the first quarter of 2018 amid an overall volatile quarter for equity markets. Declines in February and March followed January’s strong market rise. Rising interest rates and inflation fears drove February’s selloff. As markets began to settle, volatility returned in March driven by an increase in the US federal funds rate and rising trade tensions fueled by protectionist measures proposed by the Trump administration.

Within the Fund

Among sectors, the Fund’s holdings in biotechnology contributed the most to relative performance versus its benchmark, the Russell 3000® Healthcare Index, primarily due to favorable asset allocation and stock selection. The Fund’s overweight in ImmunoGen Inc. contributed to performance. Immunogen has made significant progress on its main pipeline candidate, mirvetuximab soravtansine, a treatment for platinum-resistant ovarian cancer. The Fund also had a large overweight in MorphoSys AG, which continued its strong performance. Morphosys remains one of the few antibody technology platforms that has not been acquired by a large pharmaceutical company, and shares have performed well due to continued progress the company has made on its proprietary cancer pipeline. Additionally, the company announced plans to raise capital through an initial public offering (IPO) of its shares in the United States. Shares of uniQure NV, the market leader in gene therapy, also contributed to the Fund’s performance. We think recent clinical trials indicate potential success for uniQure’s gene therapy platform. Underperformance from Tesaro Inc. somewhat muted uniQure’s relative outperformance. News emerged that a clinical study of its drug used to treat ovarian cancer patients had produced mixed results, causing shares of Tesaro to decline recently.

In the blue-chip medical products sector, the Fund’s lack of exposure to Johnson & Johnson and Celgene Corp. contributed to relative outperformance. In contrast, the Fund’s overweight in Sanofi declined after the company reported weak quarterly earnings results and guidance for the year.

The Fund’s positioning in the small- to mid-cap medical-products sector detracted the most from relative performance. The Fund had underweight positions in several companies that performed well. In the healthcare services sector, shares of CVS Health Corp. declined due to concerns that Amazon’s proposed low-cost healthcare venture could lead to increased competition. Shares of DaVita Inc. continued to decline as increased regulation created downward pressure on earnings growth. However, we think DaVita continues to be a dominant player in commercial renal dialysis, and is strongly positioned for long-term growth. We believe the stock trades at a discount to its intrinsic value.

Finally, Chinese Internet company Inc. reported mixed financial results as the company faces near-term headwinds within its mobile game business and continues to invest in traffic acquisition in its search business. We believe that shares of remain undervalued and that the company is well positioned over the long term to potentially benefit from rising consumption and Internet engagement in China.


For global healthcare investors, there are risks that short-term legislative and judicial action could overshadow the positive long-term fundamentals of the sector and of specific companies. Nevertheless, we continue to see long-term opportunities in the global healthcare asset class. The baby-boom generation in the United States is aging, implying expanding demand for healthcare products and services for decades to come. At the same time, middle classes in countries with emerging economies (notably India and China) are growing rapidly, creating big appetites for Western-style medicine. We remain positive on the healthcare sector and its growth opportunities.

Despite some increased volatility last year due to uncertainty surrounding plans for a repeal and replace measure for the Affordable Care Act (ACA), we believe that healthcare remains one of the few growth sectors in the economy. We continue to see many attractive opportunities in the healthcare sector, particularly in biotechnology, where we see potential for continued innovation in cancer treatments and gene therapy technology. We remain overweight in the biotechnology sector, particularly in small- to mid-cap companies, where we see potential for technological breakthroughs.

We continue to put a premium on disciplined, intensive research when analyzing investment opportunities for the Fund. We favor companies that exhibit such traits as:

  • proven competitiveness
  • seasoned management teams, and
  • stock valuations that are discounted meaningfully from our estimates of intrinsic value.

These characteristics are part of our daily considerations as we follow our conservative, stock-by-stock approach to portfolio management.

Past performance is not an indicator of future results.

The Russell 3000® Healthcare Index measures the performance of all healthcare holdings included in the Russell 3000 Index, which represents the 3,000 largest US companies based on total market capitalization.

Index performance returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index.

[475134] 04/18

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.

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

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 877 693-3546. Investors should read the prospectus and the summary prospectus carefully before investing.

The Fund’s investment manager, Delaware Management Company (Manager), may permit its affiliates, Macquarie Investment Management Global Limited (MIMGL) and Macquarie Funds Management Hong Kong Limited, to execute Fund security trades on behalf of the Manager. The Manager may also seek quantitative support from MIMGL.

Investing involves risk, including the possible loss of principal.

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

Healthcare companies are subject to extensive government regulation and their profitability can be affected by restrictions on government reimbursement for medical expenses, rising costs of medical products and services, pricing pressure, and malpractice or other litigation.

International investments entail risks not ordinarily associated with US 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.

“Non-diversified” funds may allocate more of their net assets to investments in single securities than “diversified” funds. Resulting adverse effects may subject these funds to greater risks and volatility.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 01/23/2020)

Class APriceNet change
Max offer price$27.92n/a

Total net assets (as of 12/31/2019)

$1.1 billion all share classes

Overall Morningstar RatingTM

Class A shares (as of 12/31/2019)
Class ANo. of funds
3 Yrs4135
5 Yrs5125
10 Yrs4102
Morningstar categoryMorningstar Health Category

(View Morningstar disclosure)

The Morningstar rating is based on risk-adjusted returns.

Morningstar ranking (as of 12/31/2019)

YTD ranking36 / 145
1 year36 / 145
3 years19 / 135
5 years10 / 125
10 years25 / 102
Morningstar categoryMorningstar Health Category

(View Morningstar disclosure)

The Morningstar ranking is based on historical total returns.

Lipper ranking (as of 12/31/2019)

YTD ranking20 / 104
1 year20 / 104
3 years18 / 97
5 years10 / 84
10 years19 / 63
Lipper classificationLipper Health/Biotechnology Funds Average

(View Lipper disclosure)

The Lipper ranking is based on historical total returns.

Benchmark and peer group

Russell 3000® Healthcare Index (view definition)

Morningstar Health Category (view definition)

Lipper Health/Biotechnology Funds Average (view definition)

Additional information