Delaware High-Yield Opportunities Fund

Key features

  • A research-driven high yield bond fund designed for long-term growth and income
  • Leverages the team’s deep credit expertise and sizable presence in corporate bond market
  • An experienced management team with more than 25 years average industry experience
Fund information
Inception date12/30/1996
Dividends paid (if any)Monthly
Capital gains paid (if any)December
Fund identifiers

Institutional Class shares are available only to certain investors.

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 (10/31/2019)

as of quarter-end (09/30/2019)

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)13.61%9.76%5.78%3.59%6.98%6.79%12/30/1996
ICE BofAML US High Yield Constrained Index11.76%8.32%6.04%5.18%7.67%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)1.39%7.16%5.69%3.50%7.10%6.80%12/30/1996
ICE BofAML US High Yield Constrained Index1.22%6.30%6.07%5.37%7.84%n/a

Returns for less than one year are not annualized.

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

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursements from Nov. 28, 2018 through Nov. 28, 2019. Please see the fee table in the Fund's prospectus for more information.

Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return

Institutional Class shares are available only to certain investors.

Portfolio characteristics - as of 10/31/2019ICE BofAML US High Yield Constrained Index
Number of holdings1961,772
Number of credit issuers144
Portfolio turnover (last fiscal year)76%%
Effective duration (weighted average) (view definition)3.22 yearsn/a
Effective maturity (weighted average) (view definition)4.20 yearsn/a
Yield to maturity (view definition)5.77%n/a
Average market price (view definition)$100.29n/a
Average coupon (view definition)6.36%n/a
Yield to worst (view definition)4.97%n/a
SEC 30-day yield with waiver (view definition)4.72%
SEC 30-day yield without waiver (view definition)4.49%
Annualized standard deviation, 3 years (view definition)4.48n/a
Portfolio composition as of 10/31/2019Total may not equal 100% due to rounding.
Foreign bonds13.6%
Cash and cash equivalents3.0%
Top 10 fixed income holdings as of 10/31/2019

Holdings are as of the date indicated and subject to change.

List excludes cash and cash equivalents.

Holding% of portfolio
Tenet Healthcare Corporation 8.125 4/1/20221.17%
Bausch Health Companies Inc. 5.500 11/1/20251.11%
Popular Inc. 6.125 9/14/20231.05%
Charles River Laboratories Interna 5.500 4/1/20261.04%
Standard Industries Inc. (delaware) 6.000 10/15/20251.04%
Royal Bank of Scotland Group Plc 8.625 12/31/20491.03%
Applied Systems Inc. 8.320 9/15/20251.03%
Cco Holdings Llc 5.750 2/15/20261.02%
Wellcare Health Plans Inc. 5.375 8/15/20260.96%
Nexstar Escrow Inc. 5.625 7/15/20270.93%
Total % Portfolio in Top 10 holdings10.38%
Fixed income sectors as of 10/31/2019

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.

Basic industry11.1%
Technology & electric6.6%
Emerging markets5.2%
Capital goods5.0%
Consumer goods1.7%
Financial services1.4%
Real estate0.9%
Credit quality as of 10/31/2019

Total may not equal 100% due to rounding. The Fund’s investment manager, Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust, receives “Credit Quality” ratings for the underlying securities held by the Fund from three “nationally recognized statistical rating organizations” (NRSROs): Standard & Poor’s (S&P), Moody’s Investors Service, and Fitch, Inc. The credit quality breakdown is calculated by DMC based on the NRSRO ratings. If two or more NRSROs have assigned a rating to a security the higher rating (lower value) is used. If only one NRSRO rates a security, that rating is used. For securities rated by an NRSRO other than S&P, that rating is converted to the equivalent S&P credit rating. Securities that are unrated by any of the three NRSROs are included in the “not rated” category when applicable. Unrated securities do not necessarily indicate low quality. More information about securities ratings is contained in the Fund’s Statement of Additional Information.

Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
Return of

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.

Institutional Class shares are available only to certain investors.

Adam Brown

Adam H. Brown, CFA

Managing Director, Senior Portfolio Manager

Start date on the Fund: November 2014

Years of industry experience: 21

(View bio)

John McCarthy

John P. McCarthy, CFA

Managing Director, Senior Portfolio Manager

Start date on the Fund: December 2012

Years of industry experience: 32

(View bio)

Craig Dembeck

Craig C. Dembek, CFA

Senior Managing Director, Head of Credit Research

Start date on the Fund: December 2012

Years of industry experience: 25

(View bio)

Paul Matlack

Paul A. Matlack, CFA

Managing Director, Senior Client Portfolio Manager

Start date on the Fund: December 2012

Years of industry experience: 34

(View bio)

Institutional Class shares are available only to certain investors.

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 pricenone
Maximum contingent deferred sales charge (load) as a percentage of original purchase price or redemption price, whichever is lowernone
Annual fund operating expenses
Management fees0.65%
Distribution and service (12b-1) feesnone
Other expenses0.25%
Total annual fund operating expenses0.90%
Fee waivers and expense reimbursements(0.21%)
Total annual fund operating expenses after fee waivers and expense reimbursements0.69%

Institutional Class shares are available only to certain investors.

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 0.69% of the Fund’s average daily net assets from Nov. 28, 2018 through Nov. 28, 2019. These waivers and reimbursements may only be terminated by agreement of the Manager and the Fund.

This commentary is currently not available. Please check back later.

Delaware High-Yield Opportunities Fund Quarterly commentary March 31, 2018


US high yield bonds, as measured by the ICE BofAML US High Yield Constrained Index, returned -0.91% for the first quarter, while European and global high yield bonds returned -0.48% and -0.71%, respectively, based on ICE BofAML indices.

The US high yield market returned 0.64% during January as a solid fundamental backdrop provided support for lower-quality/higher-beta names. CCC-rated bonds returned +2.31%, B-rated bonds returned +0.82%, and BB-rated bonds returned +0.11%. The market turned negative in February (-0.82%) as the rapid increase in Treasury yields put pressure on higher-quality duration-sensitive bonds, paving the way for CCC-rated bonds (-0.73%) and B-rated bonds (-0.77%) to once again outpace bonds rated BB (-1.16%) for the month. Prices again declined in March (-0.62%), as falling equity prices reset equity valuation multiples, putting pressure on more highly leveraged credits, while uncertainty surrounding the short-term direction of interest rates continued to weigh on higher-quality credits. In March, BB-rated bonds returned -0.61%, B-rated bonds returned -0.49%, and CCC-rated bonds returned -0.91%.

Risk trumped quality during the quarter, with CCC-rated bonds returning +0.54%, followed by B-rated bonds at -0.40%, and BB-rated bonds at -1.66%. The strongest-performing sectors were department stores (+4.74%), aerospace/defense (+1.57%), and medical products (+1.15%), while cable/satellite (-2.59%), banking (-2.63%), and automotive (-2.32%) lagged.

New issuance totaled $73 billion for the quarter, down 26% from the same period in 2017. Refinancing and general corporate purposes (GCP) represented 86% of issuance, with just 12% slated for leveraged buyout (LBO) and merger and acquisition activity. The US high yield default rate currently stands at 2.21%, with an expected 2018 default rate of 2.5%.

Sources: Bank of America Merrill Lynch, Bloomberg, and J.P. Morgan.

Within the Fund

The Fund’s strongest sector contributors were software services, cable/satellite TV, and automotive. In software services, the Fund outperformed the benchmark due to strong credit selection and an overweight to the sector. Outperformance from the cable/satellite TV sector came from strong credit selection and an underweight versus the benchmark. The Fund’s underweight to the higher-quality, long-duration automotive sector — combined with strong credit selection — resulted in outperformance for the quarter.

The Fund’s largest detractors for the quarter were chemicals, energy exploration and production (E&P), and support services. Chemicals and support services were both hurt by overweights to higher-quality, longer-duration securities. E&P underperformance came from an overweight to the sector combined with poor credit selection, primarily in credits exposed to declining gas prices.


Although fundamentals remain supportive, we believe valuations within the high yield market combined with central bank tightening warrant a cautious approach to constructing our portfolios. We expect both equity markets and interest rates to remain volatile in 2018, weighing on high yield returns.

We do believe the current credit cycle will continue through 2018. Corporate leverage profiles remain stable, tax reform is likely to bolster growth and reinvestment, refinancings remain the lion’s share of new-issue proceeds, and the default rate remains low. As such, we believe the backdrop for 2018 high yield returns remains positive.

Our biggest challenge for the year, in our view, will be properly balancing risk and duration in the portfolios. Inflation and interest rate outlooks will likely remain moving targets throughout the year, creating volatility within higher-quality ratings segments, while fundamentals remain supportive of lower-quality ratings segments.

Past performance is not a guarantee of future results.

The ICE BofAML US High Yield Constrained Index (formerly known as the BofA Merrill Lynch US High Yield Constrained Index) tracks the performance of US dollar–denominated high yield corporate debt publicly issued in the US domestic market, but caps individual issuer exposure at 2% of the benchmark.

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

[469871] 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.

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.

The Fund's investment manager, Delaware Management Company (Manager), may seek investment advice and recommendations from its affiliates: Macquarie Investment Management Europe Limited, Macquarie Investment Management Austria Kapitalanlage AG, and Macquarie Investment Management Global Limited (together, the “Affiliated Sub-Advisors”). The Manager may also permit these Affiliated Sub-Advisors to execute Fund security trades on behalf of the Manager and exercise investment discretion for securities in certain markets where DMC believes it will be beneficial to utilize an Affiliated Sub-Advisor’s specialized market knowledge.

Investing involves risk, including the possible loss of principal.

Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.

The Fund may also be subject to prepayment risk, the risk that the principal of a bond that is held by a portfolio will be prepaid prior to maturity, at the time when interest rates are lower than what the bond was paying. A portfolio may then have to reinvest that money at a lower interest rate.

High yielding, non-investment-grade bonds (junk bonds) involve higher risk than investment grade bonds.

The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.

The Fund may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivatives transaction depends upon the counterparties’ ability to fulfill their contractual obligations.

International investments entail risks not ordinarily associated with US 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 11/15/2019)

Institutional ClassPriceNet change
NAV$3.76no chg
Max offer price$3.76n/a

Total net assets (as of 10/31/2019)

$187.7 million all share classes

Overall Morningstar RatingTM

Institutional Class shares (as of 10/31/2019)
RatingNo. of funds
3 Yrs4610
5 Yrs2536
10 Yrs3340
Morningstar categoryMorningstar High-Yield Bond Category

(View Morningstar disclosure)

The Morningstar rating is based on risk-adjusted returns.

Morningstar ranking (as of 10/31/2019)

YTD ranking25 / 715
1 year57 / 708
3 years127 / 610
5 years374 / 536
10 years119 / 340
Morningstar categoryMorningstar High-Yield Bond Category

(View Morningstar disclosure)

The Morningstar ranking is based on historical total returns.

Lipper ranking (as of 10/31/2019)

YTD ranking24 / 506
1 year44 / 494
3 years97 / 416
5 years284 / 371
10 years99 / 275
Lipper classificationLipper High Yield Funds Average

(View Lipper disclosure)

The Lipper ranking is based on historical total returns.

Benchmark, peer group

ICE BofAML US High Yield Constrained Index (view definition)

Morningstar High-Yield Bond Category (view definition)

Lipper High Yield Funds Average (view definition)

Additional information