Think less risk means less reward?
Think again.
Think international value

Protecting when the markets are down helps lead to stronger long-term performance.

At Delaware Funds® by Macquarie, we have a truly active approach balancing valuation and quality – we are investing for the future.

Delaware International Value Equity Fund

Truly active

Focusing on a small number of high-conviction positions in non-US companies, the team avoids sectors and industries that it views as too risky or too richly priced, integrating environmental, social, and governance (ESG) into every investment decision.

Unique view on risk

The team’s analysis focuses on understanding how businesses create value, with a focus on quality and sustainability.

Downside protection

In the first quarter of 2020, the Fund outperformed on 64% of the days that the MSCI EAFE Index had a negative return and 73% of the days that the MSCI EAFE Value Index had a negative return.1

The team’s focus on downside protection helps enable clients to have more invested when markets recover, which can enhance total return over time.

1. During the unprecedented events of the first quarter of 2020, Delaware International Value Equity Fund outperformed on 21 of the 33 days that the MSCI EAFE Index experienced a negative return and 27 of the 37 days that the MSCI EAFE Value Index experienced a negative return.

Quarterly fund audio update

as of June 30, 2020

In this brief update, hear from Markus Wiering, director, client relations, as he provides insights on recent market activity, performance and positioning, and an investment outlook.

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Delaware International Value Equity Fund

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Ranked in the top 10% for sustainability2

Truly active

Active management matters

Delaware International Value Equity Fund represents a high-conviction portfolio that seeks to avoid unattractive pockets of the market and areas that the team perceives as too risky (such as financials) or expensive.

Environmental, social and governance (ESG) analysis is integrated into every investment decision and the 5 globe Morningstar Sustainability RatingTM ranks the Fund in the top 10% (out of 6,000+ funds2).

2. Historical Sustainability Score percent rank of 7 out of 6,658 Funds in Global Category. Source: Morningstar/Sustainalytics. As of May 31, 2020. The Morningstar Sustainability Rating is a measure of the financially material environmental, social, and governance, or ESG, risks in a portfolio relative to a portfolio's peer group. The rating is a historical holdings-based calculation using the company-level ESG Risk Rating from Sustainalytics, a leading provider of ESG research. It is calculated for managed products and indexes globally using Morningstar’s portfolio holdings database.

3. Source: FactSet. As of June 30, 2020. Active weight is Fund weight minus benchmark weight.

4. Source: Morningstar/Sustainalytics.

In our view, risk is not the movement of a stock’s price or the potential for a company to become unprofitable

Lower-risk companies have historically generated higher returns

Based on the team’s risk classification1 and categories2 (A-E)

Unique view on risk

A focus on high-quality companies with stable earnings

While economic theory would suggest that higher risk equals higher returns, the earnings stable companies in which we seek to invest have historically offered higher returns with lower fundamental risk. Through this approach, it can be possible for lower risk areas of the market to potentially provide higher returns.

Source: FactSet and Macquarie Investment Management. Annualized risk and return in US dollars. Sub-industries are rated on an as-was basis. Stocks are equal-weighted with monthly rebalance. 20 years ended June 30, 2020.

Past performance is neither indicative nor a guarantee of future returns.

1. Risk classification: Screen global universe of about 5,000 largest non-financial companies measured by enterprise value (above €500m), representing 129/158 GICS® sub-industries ex-financials and real estate. Focus of the risk classification system is on the fundamental (accounting) view of risk, as the team aims to establish risk categories attainable for companies classified into sub-industries. Default classification would normally be applied to most companies that belong to a particular sub-industry. After an in-depth analysis, particular companies that do not fit the default subindustry profile may be downgraded to a higher-risk category.

2. Risk category: As a shareholder and owner of a company, the relevant risk is related to the volatility in earnings. How fast, and how sure can investors be to get their money back from the future earnings. Five risk categories have been established A, B, C, D and E, where A is the least cyclical companies, and E the most cyclical companies. In order to limit the downside risk of the portfolio, at least two-thirds of the portfolio must, at any time, be invested in the risk categories A, B and C.

Fund returns fell 80% less than the peer group year to date

Year-to-date performance

As of August 31, 2020

Downside protection

Source: Morningstar. YTD performance data as of Aug. 31, 2020. Downside capture ratio for 3-year period as of Aug. 31, 2020 versus the Morningstar Foreign Large Value Category. Past performance does not guarantee future results. Investing involves risk, including the possible loss of principal.

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. Performance data for all share classes current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance. 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.

Downside risk management matters

During the unprecedented worldwide economic shock that has occurred in 2020, the Fund has held up significantly better than the market/benchmark and peers.

We have also seen the Fund provide strong downside protection versus peers, with a 3-year downside capture ratio of 88.54 versus 116.61.

The team views this downside protection as key to achieving strong long-term results.

Interested in learning more?

Contact a Delaware Funds by Macquarie regional director at 877 693-3546
or visit the product page:

Delaware International Value Equity Fund

Past performance is not a guarantee of future results.

As of July 31, 2020. Delaware International Value Equity Fund was rated against the following numbers of Foreign Large Value funds over the following time periods: 321 funds in the last three years, 269 funds in the last five years, and 177 funds in the last 10 years. The calculation is based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance. Past performance is no guarantee of future results.

Morningstar proprietary ratings reflect historical risk-adjusted performance as of July 31, 2020. For each fund with at least a three-year history, Morningstar calculates a Morningstar RatingTM based on a Morningstar Risk-adjusted Return measure that accounts for variation in a fund's monthly performance (including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. Morningstar load-waived ratings do not take into account Class A sales charges. Class A shares without a sales charge (load) are not available to all investors.

The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The Overall Morningstar Rating for a fund is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

© 2020 Morningstar, Inc. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

The Morningstar Foreign Large Value Category compares funds that invest mainly in big international stocks that are less expensive or growing more slowly than other large-cap stocks. Most of these funds divide their assets among a dozen or more developed markets, including Japan, Britain, France, and Germany, and typically will have less than 20% of their assets invested in US stocks.

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 visiting delawarefunds.com/literature, 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.

International investments entail risks including fluctuation in currency values, differences in accounting principles, or economic or political instability. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility, lower trading volume, and higher risk of market closures. In many emerging markets, there is substantially less publicly available information and the available information may be incomplete or misleading. Legal claims are generally more difficult to pursue.

Natural or environmental disasters, such as earthquakes, fires, floods, hurricanes, tsunamis, and other severe weather-related phenomena generally, and widespread disease, including pandemics and epidemics, have been and can be highly disruptive to economies and markets, adversely impacting individual companies, sectors, industries, markets, currencies, interest and inflation rates, credit ratings, investor sentiment, and other factors affecting the value of the Fund’s investments. Given the increasing interdependence among global economies and markets, conditions in one country, market, or region are increasingly likely to adversely affect markets, issuers, and/or foreign exchange rates in other countries. These disruptions could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective. Any such event(s) could have a significant adverse impact on the value and risk profile of the Fund.

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

The MSCI EAFE (Europe, Australasia, Far East) Index represents large- and mid-cap stocks across 21 developed markets, excluding the United States and Canada. The index covers approximately 85% of the free float-adjusted market capitalization in each country.

The MSCI EAFE (Europe, Australasia, Far East) Value Index represents large- and mid-cap stocks exhibiting overall value style across developed market countries around the world, excluding the United States and Canada. The value investment style characteristics for index construction are defined using three variables: book value to price, 12-month forward earnings to price and dividend yield.

Index “net” return approximates the minimum possible dividend reinvestment, after deduction of withholding tax at the highest possible rate.

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

Not FDIC Insured • No Bank Guarantee • May Lose Value

Nothing presented should be construed as a recommendation to purchase or sell any security or follow any investment technique or strategy.

[1316630] 09/20

Nothing presented should be construed as a recommendation to purchase or sell any security or follow any investment technique or strategy.

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