Delaware Value® Fund

Key features

  • Focus on high-quality companies with attractive valuations
  • A diversified portfolio with exposure to all major economic sectors, seeking protection from downside risks
  • Team-based consensus-driven process that has been consistently applied for over 35 years
Fund information
Inception date09/15/1998
Dividends paid (if any)Quarterly
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

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 (12/31/2019)

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

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)19.94%19.94%9.62%8.44%12.53%7.87%09/15/1998
Max offer price13.01%13.01%7.48%7.16%11.87%7.57%
Russell 1000 Value Index26.54%26.54%9.68%8.29%11.80%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)6.17%19.94%9.62%8.44%12.53%7.87%09/15/1998
Max offer price0.08%13.01%7.48%7.16%11.87%7.57%
Russell 1000 Value Index7.41%26.54%9.68%8.29%11.80%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
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
Portfolio characteristics - as of 12/31/2019Russell 1000 Value Index
Number of holdings33746
Market cap (median) Source: FactSet$58.0 billion9781860000.000000000
Market cap (weighted average) Source: FactSet$102.0 billion130790235132.350000000
Portfolio turnover (last fiscal year)20%n/a
Beta (relative to Russell 1000 Value Index) (view definition)0.95n/a
SEC 30-day yield with waiver (view definition)1.55%
SEC 30-day yield without waiver (view definition)1.55%
Annualized standard deviation, 3 years (view definition)11.84n/a
Portfolio composition as of 12/31/2019Total may not equal 100% due to rounding.
Domestic equities98.6%
Cash and cash equivalents1.4%
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 exchanged-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
CVS Health Corp.3.17%
Cigna Holding Co.3.15%
Bank of New York Mellon Corp.3.13%
Conagra Brands Inc.3.12%
Total % Portfolio in Top 10 holdings31.38%
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.

Information technology11.8%
Consumer staples9.3%
Communication services6.1%
Consumer discretionary5.7%
Real estate2.8%
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.

Nik Lalvani

Nikhil G. Lalvani, CFA

Vice President, Senior Portfolio Manager, Team Leader

Start date on the Fund: October 2006

Years of industry experience: 23

(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: 28

(View bio)

Kristen Bartholdson

Kristen E. Bartholdson 

Vice President, Senior Portfolio Manager

Start date on the Fund: December 2008

Years of industry experience: 19

(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 fees0.51%
Distribution and service (12b-1) fees0.25%
Other expenses0.17%
Total annual fund operating expenses0.93%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers and expense reimbursements0.93%
This commentary is currently not available. Please check back later.

Delaware Value® Fund*Quarterly commentary March 31, 2018

Market Review

After a prolonged absence, stock market volatility made a comeback in the first quarter. The broad market S&P 500® Index experienced several large, one-day moves and two, brief corrective phases of approximately -10% and -7%. Along with the Dow Jones Industrial Average, the S&P 500 Index had more than twice the number of +/-1% one-day moves in the first quarter of 2018 than in all of 2017. While it’s difficult to pinpoint the reasons for increased volatility — perhaps, volatility had simply been too low for too long — several developments appeared to put investors on edge, including rising interest rates, high-level White House and Cabinet turnover, steel and aluminum import tariffs levied by the Trump administration, concerns about rising deficits and debt, waning Federal Reserve stimulus, and the potential for higher inflation. For the quarter, the S&P 500 Index lost -0.8%, ending a streak of nine consecutive quarterly gains (sources: MarketWatch, FactSet Research Systems).

Under the Fed’s new chairman, Jerome Powell, the Federal Open Market Committee (FOMC) voted unanimously for another 0.25 percentage point increase in the federal funds rate, further extending the central bank’s slow-moving tightening cycle. This was the sixth 0.25 percentage point move since December 2015, taking the federal funds rate to a target range between 1.50% and 1.75%. In its accompanying economic projection, the FOMC raised its real gross domestic product (GDP) forecast to 2.7% for 2018 and 2.4% for 2019, but kept its long-run annualized growth projection at 1.8%. The Committee also voted to reduce the Fed’s balance sheet holdings in Treasury and agency bonds by a combined $30 billion per month, beginning in April, up from $20 billion in each of the first three months of the year. At the end of February 2018, the Fed held $4.19 trillion in Treasury and agency securities on its balance sheet; the figure was $1.22 trillion at the beginning of the current expansion in June 2009. (Source: The Board of Governors of the Federal Reserve System.)

The yield on the benchmark 10-year Treasury note settled at 2.74%, up from 2.43% when the year began, but below its February peak of 2.94%. Notably, the yield curve continued to flatten, though only modestly, as the spread between the 2-year and 10-year Treasury notes fell to 0.48% from 0.52% in December. Still, the spread had not dipped below 0.50% since 2007. The ongoing flattening seems to hint at some level of market skepticism about the economy’s longer-term trajectory. Recent inflation data, too, appear to be contributing to the merely modest rise in longer-term yields. Through February, the Core Personal Consumption Expenditures (PCE) Price Index (the Fed’s preferred inflation gauge) advanced 1.6% year over year. For comparison, the year-over-year gain in December was 1.5%. An increase in foreign demand for US government debt in the first quarter also helped to keep yields in check. (Sources: Cornerstone Macro, Dow Jones, FactSet Research Systems.)

In its third and final estimate of economic growth for the fourth quarter of 2017, the US Commerce Department reported that real GDP expanded 2.9% at a seasonally adjusted annual rate. This put year-over-year growth at 2.6%, an improvement on the 2.2% average annual rate of expansion that’s occurred since June 2009. Bright spots included personal consumption expenditures, up 4.0% at an annual rate, and nonresidential fixed investment (capital expenditures), up 6.8%. Employment gains continued at a solid pace in the January-to-March period, rising an average of 202,000 per month. The threat of an acceleration in wages appeared to be contained. Through March, average hourly earnings rose 2.7% on a year-over-year basis. Separately, the March unemployment rate remained at 4.1%. (Source: Bureau of Labor Statistics.)

Within the Fund

Stock selection accounted for nearly all of the Fund’s relative outperformance during the first quarter of 2018.

The Fund’s investments in the consumer discretionary and financials sectors caused the largest drags on relative returns during the quarter. In the consumer discretionary sector, the Fund’s two holdings declined -8.3%, on average, versus -2.7% for the sector in the Fund’s benchmark, the Russell 1000 Value Index. Discount variety retailer Dollar Tree Inc. was one of the weaker performers, falling -11.6%, retracing some of the strong gains from the second half of 2017. The market’s negative reaction to Dollar Tree’s earnings results sent the shares down nearly -15%. While revenues, earnings, and margins came in at the high end of management’s previous guidance range, they were below Street expectations. (During each of the past two quarters, Dollar Tree’s results had surpassed Street expectations, giving the shares a considerable boost.) Management also offered conservative guidance for the coming fiscal year, in part because of investments it will be making in the company’s Family Dollar subsidiary. The plan is to use $100 million of approximately $250 million in tax savings to invest in workforce and benefits with the idea that stores with more stable employee teams might have better productivity, longer term. While this could pressure margins in the short run, we believe it should contribute to the ongoing turnaround in the Family Dollar business.

In the financial sector, the Fund’s four holdings lagged those in the benchmark, falling -1.5% versus -1.2%. The Fund’s underweight allocation was the main detractor from relative performance as the sector was the second-strongest performer in the benchmark despite its negative return. Shares of multiline insurer Allstate Corp. led the group lower, down -9.0%. The stock sold off approximately -7% on the day that Allstate announced its most-recent quarterly results. Investors reacted negatively to a slower rate of price increases and management’s conservative guidance for the company’s full-year combined ratio (essentially losses as a percentage of premiums). Additionally, insurers were generally challenged by rising interest rates, which can negatively affect bond holdings in their investment portfolios. Over time, however, rising rates can benefit insurers as they allow for reinvestment at higher yields. We think Allstate could be well positioned to continue benefiting from strong property and casualty industry fundamentals. The company also increased its quarterly dividend by 24%.

Elsewhere in the portfolio, CVS Health Corp., an integrated retail pharmacy chain and pharmacy benefit manager (PBM), was a significant detractor from performance. Its shares dropped -13.7%. After rebounding in January, CVS Health came under renewed pressure owing to several developments. One was an announcement by Amazon, Berkshire Hathaway, and JPMorgan Chase that they were forming a consortium to explore how to lower healthcare costs for their employees. The initiative was perceived as a competitive threat to a variety of healthcare companies, PBMs in particular. In its quarterly earnings announcement in early February, CVS lowered its fiscal year guidance for growth in operating profit by 2.5% as it expects to use approximately $275 million of its $1.2 billion in tax-cut proceeds to invest in its business (much of the remainder will be used for debt reduction). CVS also sold $44 billion in bonds to help fund its acquisition of Aetna, expected to close later this year. That prompted Standard & Poor’s to lower CVS’s bond rating to BBB from BBB+. The deal with Aetna reflects CVS’s commitment to transform its business based on where it sees healthcare going in the future. The combined company will be able to offer multiple touchpoints for delivering healthcare products and services in addition to having greater scale and purchasing power. At present, we have a positive outlook for the CVS-Aetna combination; however, we will continue analyzing its potential merits as a long-term investment as the deal moves toward its closing date.

Another large detractor was Occidental Petroleum Corp., an energy exploration and production company that also has chemical and midstream businesses. Although the Fund’s energy sector exposure contributed to relative returns (as a group, the portfolio’s five energy stocks fell -3.6% versus -5.8% for the sector in the benchmark), Occidental’s shares fell -10.7%. Interestingly, oil prices rose during the quarter, with Brent crude (the primary global benchmark) up 4.4% and West Texas Intermediate (the primary domestic benchmark) up 7.5%. Still, investor concerns about increasing US shale production, along with mixed data on domestic inventory levels, helped push the broader sector lower. In Occidental Petroleum’s case, the company’s guidance for 2018 production was fairly conservative, particularly for the first half of 2018, which, given the reactionary nature of the current energy investing environment, appeared to put a larger-than-average dent in the shares. The softer guidance was due, in part, to expenses associated with the buildout of a new logistics hub, based in New Mexico, that is expected to be fully up and running by the end of the second quarter of 2018. We believe Occidental Petroleum remains an attractive long-term opportunity in the energy sector because of its higher-quality production assets (especially its Permian Basin acreage), solid execution, and balance sheet strength. We think the company’s cash flow generation should continue to improve. Currently, the stock offers a dividend yield of 4.7%.

Investments in the industrials and consumer staples sectors contributed the most to the Fund’s relative performance. The Fund’s three industrial stocks gained 9.0%, on average, compared to a loss of -4.4% for the sector in the benchmark. Defense contractors Northrop Grumman Corp. and Raytheon Co. were the strongest performers in the sector and in the overall portfolio, up 14.1% and 15.4%, respectively. Both companies have seen steady demand for their products and services amid rising geopolitical tensions. At Northrop Grumman, manned and un-manned aircraft have been areas of particular strength, while Raytheon continues to see strong order growth in its missile systems segment, including growing demand from overseas. Both companies, along with others in the aerospace and defense industry, are set to benefit from the federal government’s $1.3 trillion omnibus spending bill, signed into law in late March, which boosts defense department spending, including a significant allocation for military equipment procurement. Additionally, Northrop Grumman’s and Raytheon’s businesses are somewhat less sensitive to the effects of tariffs and restrictive trade policies than the broader industrials sector, which likely contributed to their relative outperformance. Both companies raised their dividends during the quarter, Northrop by 10.0% and Raytheon by 8.8%.

In the consumer staples sector, the Fund’s three stocks were down -2.4%, on average, versus a loss of -8.4% for the sector in the benchmark. Archer-Daniels-Midland Co., a leading global processor of agricultural commodities, was the strongest performer with a gain of 9.0%. The company’s revenue has been under pressure following several years of robust global grain harvests, which resulted in a weak pricing environment and low grain-price volatility. In response, Archer-Daniels-Midland has been focused on managing costs and improving operational efficiencies. It has also been reshaping its business and investing in higher-margin, specialty offerings. Its shares got a lift following reports that it was in talks to acquire its smaller agribusiness rival, Bunge Ltd., which could potentially result in a stronger company with greater scale and cost-saving opportunities. Those talks appear to have stalled. Also, modest improvements in earnings and return on invested capital last quarter seemed to boost investor sentiment as Archer-Daniels-Midland moved higher following its earnings report. Additionally, a drought in Argentina, which is adversely affecting the country’s soy harvest, is expected to lead to improved margins in the company’s oilseeds processing business. In our view, Archer-Daniels-Midland is positioned to potentially benefit from a normalization in the global supply of agricultural commodities. Meanwhile, valuation remains attractive as does the stock’s dividend yield of 3.0%.

Another strong contributor was global semiconductor manufacturer Intel Corp., which rose 13.6%. The company posted another quarter of solid results, exceeding analysts’ expectations for revenue, earnings per share, and gross margin. Intel continues to shift its business away from the slowing PC market, toward growth areas including chips for data-center servers, the Internet of Things (IoT), and autonomous driving. Last quarter, non-PC-related revenue rose to 47%. The company’s guidance for the current quarter was conservative, especially for gross margin, largely because of start-up costs for new chip fabrication. A lower tax rate, courtesy of the new tax legislation, should help offset some of these expenses, however, as Intel’s current rate is expected to fall from approximately 21% to 14%. We continue to like Intel for its relatively stable revenue and cash flow generation. Additionally, the stock is trading at a discount to semiconductor peers and the technology sector, overall, and offers a dividend yield of 2.1%.

There were no full-position purchases or sales in the Fund during the quarter.


Optimism was high for tax-cut-induced economic growth to start the year, but this seemed to fade as the quarter unfolded. Near-term benefits from the cuts — such as income gains for consumers and stronger earnings and cash flow for companies, along with regulatory reform and accelerating global growth — have created a positive backdrop that remains in place. However, we question how much of the tax cut consumers will spend and the extent to which capital investments by corporations will lead to increased productivity, higher wages, and stronger growth. We wonder if there is sufficient pent-up demand in the economy to really move the needle on US growth given the length of the current expansion (nearly nine years), and the exceptionally easy credit conditions that have accompanied it. Further complicating matters, the Fed remains in tightening mode, the Trump administration is threatening to pursue a broader set of restrictive trade policies, and rising federal deficits are set to add to excessive indebtedness.

Over the short- to intermediate-term, the balance of risks for the US stock market appears to be skewed to the downside. Longer term, we expect to see below-average total returns because of high current valuations and the strong performance that’s occurred since the March 9, 2009 market low (18.7% annualized total return for the S&P 500 Index). In the Fund, we’re continuing to emphasize what we view as higher-quality businesses that offer attractive relative value and less potential for downside risk. With the exception of our energy weighting, our sector positioning has a defensive bias. Currently, we have in-depth research underway on opportunities in the consumer discretionary and financial sectors.

Past performance is not a guarantee of future results.

Index definitions

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 US stock market.

The Dow Jones Industrial Average is an often-quoted market indicator that comprises 30 widely held US blue-chip stocks.

The Core Personal Consumption Expenditures Price (PCE) Index measures the prices paid by consumers for goods and services, excluding food and energy prices because of the volatility caused by movements in food and energy prices, to reveal underlying inflation trends.

Gross domestic product is a measure of all goods and services produced by a nation in a year.

[469179] 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.

Risk is increased in a concentrated portfolio since it holds a limited number of securities with each investment having a greater effect on the overall performance.

Diversification may not protect against market risk.

Not FDIC Insured | No Bank Guarantee | May Lose Value

Fund Finder

Daily pricing (as of 01/17/2020)

Class APriceNet change
Max offer price$24.12n/a

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

$15.1 billion all share classes

Overall Morningstar RatingTM

Class A shares (as of 12/31/2019)
Class ANo. of funds
3 Yrs31091
5 Yrs3945
10 Yrs5690
Morningstar categoryMorningstar Large Value Category

(View Morningstar disclosure)

The Morningstar rating is based on risk-adjusted returns.

Morningstar ranking (as of 12/31/2019)

YTD ranking1119 / 1209
1 year1119 / 1209
3 years593 / 1091
5 years348 / 945
10 years49 / 690
Morningstar categoryMorningstar Large Value Category

(View Morningstar disclosure)

The Morningstar ranking is based on historical total returns.

Lipper ranking (as of 12/31/2019)

YTD ranking420 / 444
1 year420 / 444
3 years249 / 418
5 years142 / 379
10 years26 / 285
Lipper classificationLipper Large-Cap Value Funds Average

(View Lipper disclosure)

The Lipper ranking is based on historical total returns.

Benchmark and peer group

Russell 1000® Value Index (view definition)

Morningstar Large Value Category (view definition)

Lipper Large-Cap Value Funds Average (view definition)

Additional information