Delaware International Value Equity Fund

Objective

Delaware International Value Equity Fund seeks long-term growth without undue risk to principal.

Strategy

The Fund invests primarily in equity securities that are organized, have a majority of their assets, or generate the majority of their operating income outside the United States, and that provide the potential for capital appreciation.

Fund information
Inception date10/31/1991
Dividends paid (if any)Annually
Capital gains paid (if any)November or December
Fund identifiers
NASDAQDEGIX
CUSIP245914106
Investment minimums
Initial investment$1,000
Subsequent Investments$100
Systematic withdrawal balance$5,000
Account features
CheckwritingNo
Payroll DeductionYes
IRAsYes

On Sept. 25, 2014, Class B shares of the Fund converted to Class A shares.

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 (03/31/2017)

as of quarter-end (03/31/2017)

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)6.40%13.60%0.90%5.24%0.61%6.03%10/31/1991
Max offer price0.29%7.04%-1.07%4.01%0.01%5.78%
MSCI EAFE Index (Gross)7.39%12.25%0.96%6.32%1.53%n/a
MSCI EAFE Index (Net)7.25%11.67%0.50%5.83%1.05%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)6.40%13.60%0.90%5.24%0.61%6.03%10/31/1991
Max offer price0.29%7.04%-1.07%4.01%0.01%5.78%
MSCI EAFE Index (Gross)7.39%12.25%0.96%6.32%1.53%n/a
MSCI EAFE Index (Net)7.25%11.67%0.50%5.83%1.05%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.

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
Gross1.36%
Net1.36%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
20176.40%n/an/an/an/a
2016-1.90%0.65%6.98%-0.84%4.74%
20155.74%0.74%-8.63%3.27%0.51%
2014-0.56%5.58%-6.68%-6.92%-8.82%
20136.46%-2.39%11.37%5.72%22.33%
201211.07%-7.71%6.39%5.24%14.76%
20117.46%2.26%-25.22%4.39%-14.22%
20102.03%-13.31%17.65%5.47%9.75%
2009-11.63%22.07%20.91%4.28%36.02%
2008-8.40%-6.54%-16.81%-19.30%-42.52%
20073.92%6.80%-2.08%-3.72%4.63%
Portfolio characteristics - as of 03/31/2017MSCI EAFE Index (Net)
Number of holdings48924
Market cap (median)$29.49 billion$9.68 billion
Market cap (weighted average)$53.99 billion$55.27 billion
Portfolio turnover (last fiscal year)13%n/a
Beta (relative to MSCI EAFE Index (Net)) (view definition)0.93n/a
SEC 30-day yield with waiver (view definition)1.22%
SEC 30-day yield without waiver (view definition)1.22%
Annualized standard deviation, 3 years (view definition)11.91n/a
Portfolio composition as of 03/31/2017Total may not equal 100% due to rounding.
International equities & depositary receipts97.5%
Cash and cash equivalents2.5%
Top 10 equity holdings as of 03/31/2017
Holdings are as of the date indicated and subject to change.
List excludes cash and cash equivalents.
Holding% of portfolio
Mitsubishi UFJ Financial Group Inc.3.6%
Sanofi3.6%
ITOCHU Corp.3.3%
Samsung Electronics Co. Ltd.3.2%
Vinci S.A.3.2%
Nordea Bank AB3.2%
Nippon Telegraph & Telephone Corp.3.1%
Toyota Motor Corp.3.0%
Yue Yuen Industrial Holdings Ltd.2.8%
Novartis AG2.8%
Total % Portfolio in Top 10 holdings31.8%

Top 10 countries as of 03/31/2017

List excludes cash and cash equivalents.

Country% of portfolio
Japan23.2%
France18.6%
United Kingdom11.9%
Sweden5.1%
Netherlands4.9%
Germany4.7%
Hong Kong4.7%
Canada4.6%
Switzerland4.1%
South Korea3.2%
Distribution history - annual distributions (Class A)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20170.0000.000
20160.0000.268
20150.0000.164
20140.0000.267
20130.0000.145
20120.0000.153
20110.0000.193
20100.0000.105
20090.0000.232
20080.0000.307
20070.7190.204

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.

Ned Gray

Ned A. Gray, CFA

Senior Vice President, Chief Investment Officer — Global and International Value Equity

Start date on the Fund: May 2006

Years of industry experience: 30

(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 fees0.85%
Distribution and service (12b-1) fees0.25%
Other expenses0.26%
Total annual fund operating expenses1.36%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements1.36%

1The Fund's investment manager, Delaware Management Company (Manager), has contractually agreed to waive all or a portion of its investment advisory fees and/or pay/reimburse expenses (excluding any 12b-1 fees, acquired fund fees and expenses, taxes, interest, short sale dividend and interest expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations) in order to prevent total annual fund operating expenses from exceeding 1.20% of the Fund’s average daily net assets from March 28, 2017 through March 28, 2018. These waivers and reimbursements may only be terminated by agreement of the Manager and the Fund.

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Delaware International Value Equity Fund Quarterly commentary March 31, 2017

Within the Fund

Despite strong stock selection in a variety of sectors, including telecommunications, industrials, and financials, the Fund’s poorly performing holdings in consumer staples and healthcare more than offset this strength. Overall sector allocation was neutral, as the favorable effect from overweight exposures to industrials and technology and an underweight exposure to real estate offset the adverse effect of overweight exposures to consumer discretionary and telecommunications and an underweight exposure to consumer staples.

On a regional basis, strong stock selection in the United Kingdom, Japan, and Asia ex Japan failed to overcome the negative impact of holdings in Europe ex euro zone. The regional allocation effect was neutral. Net currency effect was negative, primarily due to underweight exposure to the Australian dollar and overweight exposure to the Canadian dollar.

The Fund added two new names and sold two others during the quarter. Other activity included trimming positions and redeploying the proceeds at attractive valuations. This activity has involved positions across a variety of sectors and regions, but hasn’t resulted in material changes to portfolio positioning.

Prospective global market drivers and general outlook

It is comforting that the first quarter’s strong equity performance took place against a broadly improving economic backdrop, as defined by a diverse set of metrics. In examining the nuances that characterize different segments of the global market, though, one finds important differences. One may argue that the longevity and magnitude of outperformance by US equities versus their non-US peers are justified by the combination of more favorable demographics, business culture, and regulatory regimes. Even conceding a measure of truth to these arguments, though, one must come to terms with other constraints, including the increasing presence of late-cycle indicators such as rising unit labor costs, which threaten to limit the rate of US improvement, if not presage its reversal. Perhaps of greater significance within a long-term market view is the very high level of US valuations, relative to their own history and versus non-US alternatives. According to MSCI data, as of March 31 US stocks traded at a more expensive valuation on trailing earnings than in all but 13% of the months going back to 1974. By contrast, markets such as Japan and the euro zone have valuations low enough to support additional price gains before reaching historical norms, combined with cyclical recovery potential to facilitate market appreciation still further.

While the valuation of aggregate data grouped by regional markets suggests compelling opportunities outside the United States, we as managers of concentrated, active portfolios remain focused on the power of individual companies to transcend their country-specific prospects. Their success is driven not by the narrow circumstances of their home countries, but by the full range of global markets that drive their revenue growth and profitability. We believe that the qualities that drive this success can be recognized and, when accompanied by attractive valuation, can potentially lead to strong and sustained outperformance.

[19111]

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.

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.

Investing involves risk, including the possible loss of principal.

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.

All third-party marks cited are the property of their respective owners.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 04/21/2017)

Class APriceNet change
NAV$13.69-0.03
Max offer price$14.53n/a

Total net assets (as of 03/31/2017)

$272.9 million all share classes

Overall Morningstar RatingTM

 
Class A shares (as of 03/31/2017)
Class ANo. of funds
Overall3269
3 Yrs4269
5 Yrs3223
10 Yrs3136
Morningstar categoryForeign Large Value

(View Morningstar disclosure)

Morningstar ranking (as of 03/31/2017)

YTD ranking250 / 344
1 year111 / 328
3 years56 / 269
5 years84 / 223
10 years53 / 136
Morningstar categoryForeign Large Value

(View Morningstar disclosure)

Lipper ranking (as of 03/31/2017)

YTD ranking136 / 161
1 year56 / 151
3 years32 / 125
5 years45 / 107
10 years25 / 67
Lipper classificationInternational Multi-Cap Value

(View Lipper disclosure)

Benchmark, peer group

MSCI EAFE Index (view definition)

Morningstar Foreign Large Value Category (view definition)

Lipper International Multi-Cap Value Funds Average (view definition)

Additional information