Delaware Global Real Estate Opportunities Fund

Objective

Delaware Global Real Estate Opportunities Fund seeks maximum long-term total return through a combination of current income and capital appreciation.

Strategy

The Fund invests primarily in securities issued by U.S. and non-U.S. real estate and real estate-related companies.

Fund information
Inception date01/10/2007
Dividends paid (if any)Quarterly
Capital gains paid (if any)November or December
Fund identifiers
NASDAQDGRPX
CUSIP245917653
Investment minimums
Initial investment$1,000
Subsequent Investments$100
Systematic withdrawal balance$5,000
Account features
CheckwritingNo
Payroll DeductionYes
IRAsYes

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)1.42%1.41%5.10%7.90%1.66%1.96%01/10/2007
Max offer price-4.43%-4.47%3.06%6.62%1.05%1.37%
FTSE EPRA/NAREIT Developed Index2.30%1.86%6.18%8.18%1.85%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)1.42%1.41%5.10%7.90%1.66%1.96%01/10/2007
Max offer price-4.43%-4.47%3.06%6.62%1.05%1.37%
FTSE EPRA/NAREIT Developed Index2.30%1.86%6.18%8.18%1.85%n/a

Returns for less than one year are not annualized.

Benchmark lifetime returns are as of the Fund's inception date.

The Delaware Global Real Estate Opportunities Fund's performance information for periods prior to Sept. 28, 2012, reflects the performance of The Global Real Estate Securities Portfolio (the “Portfolio”) of Delaware Pooled® Trust, which merged into Delaware Global Real Estate Opportunities Fund (the “Fund”) as of that date. The performance information for Class A shares at offer has been adjusted to reflect the Fund’s current maximum sales charge. The Fund also has higher expenses than the Portfolio, including a Rule 12b-1 fee to which the Institutional Class of the Portfolio was not subject. Historical performance results at net asset value and offer prior to Sept. 28, 2012 have not been recalculated to reflect these expenses, but future results will be affected by them. The historical performance of the Portfolio would have been lower had it been subject to the Fund’s expense ratio.

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
Gross1.72%
Net1.40%

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursements from Feb. 28, 2017 through Feb. 28, 2018. Please see the fee table in the Fund's prospectus for more information.

Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
20171.42%n/an/an/an/a
20163.78%5.02%0.70%-5.46%3.76%
20153.60%-6.98%-0.17%3.65%-0.29%
20144.62%7.06%-4.14%7.79%15.74%
20136.00%-3.11%1.27%0.34%4.36%
201211.69%2.71%4.57%7.43%28.87%
20112.96%3.96%-16.78%7.63%-4.13%
20103.43%-7.42%17.93%5.72%19.39%
2009-21.32%31.78%21.75%3.31%30.40%
2008-7.74%-8.11%-8.36%-31.08%-46.46%
2007n/a-4.66%4.18%-9.08%n/a
Portfolio characteristics - as of 03/31/2017FTSE EPRA/NAREIT Developed Index
Number of holdings72335
Market cap (median)$6.56 billion$3.81 billion
Market cap (weighted average)$13.84 billion$14.56 billion
Portfolio turnover (last fiscal year)193%n/a
Beta (relative to FTSE EPRA/NAREIT Developed Index) (view definition)0.94n/a
Annualized standard deviation, 3 years (view definition)11.76n/a
Portfolio composition as of 03/31/2017Total may not equal 100% due to rounding.
Domestic equities56.6%
International equities & depositary receipts39.5%
Cash and cash equivalents3.9%
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
Simon Property Group Inc.3.2%
Welltower Inc.3.1%
AvalonBay Communities Inc.2.9%
Cheung Kong Property Holdings Ltd.2.6%
Sun Hung Kai Properties Ltd.2.6%
HCP Inc.2.6%
Brookdale Senior Living Inc.2.5%
Goodman Group2.4%
City Developments Ltd.2.0%
Grainger PLC2.0%
Total % Portfolio in Top 10 holdings25.9%

Top 10 countries as of 03/31/2017

List excludes cash and cash equivalents.

Country% of portfolio
United States56.6%
Hong Kong8.1%
United Kingdom6.7%
Australia6.4%
Japan4.6%
Singapore4.4%
France3.0%
Germany2.5%
Spain1.5%
Canada1.3%
Distribution history - annual distributions (Class A)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20170.0000.022
20160.0000.153
20150.0000.070
20140.0000.151
20130.0000.190
20120.0000.146
20110.0000.212
20100.0000.489
20090.0000.362
20080.0000.000
20070.0000.315

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.

A nimble approach

The Real Estate Securities and Income Solutions team (RESIS) at Delaware Investments sits together, in one office in Philadelphia. This unique setup helps differentiate the team from many of its peers and enhances its decision-making process. [Runtime: 2:18]

Watch the video

Read video transcript

Bob Zenouzi

Bob Zenouzi 

Senior Vice President, Chief Investment Officer — Real Estate Securities and Income Solutions (RESIS)

Start date on the Fund: September 2012

Years of industry experience: 30

(View bio)


Damon Andres

Damon J. Andres, CFA

Vice President, Senior Portfolio Manager

Start date on the Fund: September 2012

Years of industry experience: 26

(View bio)


Scott Hastings

Scott P. Hastings, CFA, CPA

Vice President, Portfolio Manager

Start date on the Fund: July 2016

Years of industry experience: 14

(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 fees0.99%
Distribution and service (12b-1) fees0.25%
Other expenses0.48%
Total annual fund operating expenses1.72%
Fee waivers and expense reimbursements(0.32%)
Total annual fund operating expenses after fee waivers and expense reimbursements1.40%

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 1.15% of the Fund's average daily net assets from Feb. 28, 2017 through Feb. 28, 2018. These waivers and reimbursements may only be terminated by agreement of the Manager and the Fund.

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Delaware Global Real Estate Opportunities Fund Quarterly commentary December 31, 2016

Within the Fund

For the fourth quarter of 2016, Delaware Global Real Estate Opportunities Fund Institutional Class shares outperformed the Fund’s benchmark, the FTSE EPRA/NAREIT Developed Index, and the Fund’s Class A shares at net asset value underperformed the benchmark.

The Fund’s quarterly returns were driven by strong stock selection in the United States and Japan and an underweight position in Hong Kong. Within the U.S., lodging stocks performed particularly strongly, driven by investor expectations of higher growth. Sunstone Hotel Investors was one of the Fund’s stronger performers, rising more than 20% during the quarter. Following the U.S. election, many economically sensitive sectors rallied on the belief that President-elect Trump would reinvigorate the economy. Lodging stocks immediately reacted, and Sunstone Hotel Investors was well positioned because of the quality and geography of its properties. Additionally, Fund performance was boosted by an underweight in some of the more interest-rate-sensitive, longer-duration lease sectors such as healthcare, as the rise in bond yields caused these stocks to fall during the quarter.

Within Japan, developer companies significantly outperformed Japanese REITs (or J-REITs, which are landlord companies), as developers are generally better able to offset the cost of higher debt. Coming off a strong quarter, Hong Kong real estate stocks fell by double digits during the fourth quarter. Much of Hong Kong’s real estate stocks’ rally in the middle part of 2016 was due the expectation that U.S. debt costs would remain low for a long time. As the potential for higher interest rates in the U.S. increased, the stocks fell. Because the Hong Kong dollar is pegged to the U.S. dollar, any rise in interest rates in the U.S. results in a rise in local funding costs. In addition, Hong Kong mortgages are short in duration and have floating rates, so they feel the impact of rising rates relatively quickly.

The Fund’s overweight position in Germany and poor stock selection in Singapore and the United Kingdom detracted from performance. Within Germany, the residential stocks corrected the most despite having good fundamentals. Germany’s Vonovia SE proved to be one of the Fund’s weakest performers, falling close to 14% during the quarter. German residential real estate benefited from investors’ desire for safety. As bond yields rose and investors sought higher returns in more risky investments, these stocks came under pressure. Within the U.K., Shaftesbury, a street retail landlord, fell more than 10% during the quarter. Shaftesbury owns what we view as some of the most attractive street retail properties throughout London, which performed well in the aftermath of the Brexit result, when investors sought safety. As investors targeted higher growth markets, the defensiveness of Shaftesbury became less important and the stock fell.

Outlook

The fourth quarter of 2016, and much of 2016 for that matter, proved to be quite a volatile period. Events occurred that many thought were improbable. Central banks seemed to be trying to step back from influencing the markets, whether through “normalizing” rates or by through less quantitative easing, for example. While this has certainly increased volatility, we believe some positives may arise. In our opinion, an environment in which companies are rewarded or punished for their capital decisions is a much healthier environment than one in which companies are rewarded simply because of central bank policies.

The big question for 2017 and onward, in our view, is how will the world handle higher bond yields? Will growth surprise to the upside or disappoint? We expect higher volatility across most markets to continue throughout 2017. Bond market volatility has increased noticeably in the past few months, but so far credit has remained strong. We are closely watching the credit markets, which tend to signal any early signs of stress or disappointments in growth.

We continue to maintain the Fund’s large overweight in the U.S., given solid fundamentals of low supply and reasonable rental growth, and while the cost and availability of capital are still favorable. The Fund continues to invest in Europe, due to gradual but positive fundamental recovery in Spain, Germany, and France. The Fund’s positioning is weighted toward French office names and general exposure to multiple property sectors in Spain. We have started increasing the Fund’s exposure to certain areas in the West End of London given the large discounts there.

We maintain the Fund’s cautious positioning in Asia and the emerging markets. China’s slowdown has been managed thus far; however, risks have increased due to capital flight and continual government intervention. Despite Hong Kong’s recent rebound in home prices, we remain concerned about the longer-term prospects. Until stabilization is evident, we consider Asia a “value trap.” We intend to maintain the Fund’s underweight to Japan, Hong Kong, and most of Southeast Asia. The Fund currently has no investments in emerging markets given slowing growth and rising debt levels.

[18560]

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 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.

Investing involves risk, including the possible loss of principal.

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

REIT investments are subject to many of the risks associated with direct real estate ownership, including changes in economic conditions, credit risk, and interest rate fluctuations.

A REIT fund's tax status as a regulated investment company could be jeopardized if it holds real estate directly, as a result of defaults, or receives rental income from real estate holdings.

“Nondiversified” 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.

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$7.42-0.03
Max offer price$7.87n/a

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

$68.3 million all share classes

Overall Morningstar RatingTM

 
Class A shares (as of 03/31/2017)
Class ANo. of funds
Overall4185
3 Yrs3185
5 Yrs4150
10 Yrs483
Morningstar categoryGlobal Real Estate

(View Morningstar disclosure)

Morningstar ranking (as of 03/31/2017)

YTD ranking205 / 252
1 year80 / 242
3 years60 / 185
5 years28 / 150
10 years16 / 83
Morningstar categoryGlobal Real Estate

(View Morningstar disclosure)

Lipper ranking (as of 03/31/2017)

YTD ranking149 / 191
1 year60 / 183
3 years57 / 133
5 years23 / 102
10 years13 / 57
Lipper classificationGlobal Real Estate Funds

(View Lipper disclosure)

Benchmark

FTSE EPRA/NAREIT Developed Index (view definition)

Morningstar Global Real Estate Category (view definition)

Lipper Global Real Estate Funds Average (view definition)

Additional information