Earnings point to continued modest growth

Christopher S. Beck
Chief Investment Officer — Small-Cap Value / Mid-Cap Value Equity

Last week was very interesting for the market, in the sense that the earnings season finally finished. That means that the companies reporting earnings, we finally got done hearing about how the earnings went, and for the most part, they were actually fairly positive. Expectations had been low but the economy has tended to respond in a fairly decent way. We’ve seen some statistics last week that would support that, in terms of consumer credit. We had a payrolls number, which was very good for the jobs market, and then in the coming week we’ll have a couple statistics that will lead us for the consumer and manufacturing. We have capacity utilization, industrial production, new home sales and permits — it’s very important to see how the consumer responds in this environment of lower interest rates, and we’re hoping that the housing market continues to respond at least in a modest fashion, which it has been so far.

Now all these numbers have been pretty good for us on the small-cap value side. We’re expecting modest growth in the economy, modest earnings growth, and we expect that that will reinforce our positioning being more procyclical, meaning basic industries, capital spending, technology. And we expect the financials will also respond positively to this, so we expect to be keeping our positions the way that they have been.

The views expressed represent the Manager’s assessment of the market environment as of May 2015, 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. Views are subject to change without notice and may not reflect the Manager’s current views. The views expressed are general in nature and do not relate to a particular mutual fund.

Carefully consider the Funds' investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Funds' prospectuses and their summary prospectuses, which may be obtained by visiting delawarefunds.com/literature or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.


Investing involves risk, including the possible loss of principal.

Past performance does not guarantee future results.

Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.


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