Delaware International Value Equity Fund

Key features

  • Disciplined value-driven investment process
  • Believe that adversity creates opportunity and that transitory problems can be overcome by well-managed companies
  • Team of experienced stock pickers seek the best values in the global equity markets
Fund information
Inception date11/09/1992
Dividends paid (if any)Annually
Capital gains paid (if any)November or December
Fund identifiers
NASDAQDEQIX
CUSIP245914403

Institutional Class shares available only available to certain investors. See the prospectus for more information.

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 (09/30/2018)

as of quarter-end (09/30/2018)

YTD1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)-5.42%-3.43%7.98%3.50%5.15%6.74%11/09/1992
MSCI EAFE Index (Net)-1.43%2.74%9.23%4.42%5.38%n/a
MSCI EAFE Index (Gross)-0.98%3.25%9.77%4.90%5.87%n/a
1 year3 year5 year10 yearLifetimeInception date
NAV (view definition)0.82%-3.43%7.98%3.50%5.15%6.74%11/09/1992
MSCI EAFE Index (Net)1.35%2.74%9.23%4.42%5.38%n/a
MSCI EAFE Index (Gross)1.42%3.25%9.77%4.90%5.87%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
Gross1.10%
Net1.10%
Quarterly total returns @ NAV
Year1st quarter2nd quarter3rd quarter4th quarterAnnual return
2018-2.04%-4.23%0.82%n/an/a
20176.46%7.01%5.47%2.11%22.69%
2016-1.82%0.73%7.03%-0.74%5.06%
20155.80%0.81%-8.59%3.28%0.69%
2014-0.49%5.63%-6.66%-6.79%-8.55%
20136.53%-2.31%11.40%5.79%22.65%
201211.24%-7.69%6.36%5.39%15.11%
20117.60%2.33%-25.18%4.44%-13.97%
20102.02%-13.19%17.68%5.56%10.01%
2009-11.61%22.15%20.96%4.43%36.38%
2008-8.37%-6.44%-16.73%-19.21%-42.33%

Institutional Class shares available only available to certain investors. See the prospectus for more information.

Portfolio characteristics - as of 09/30/2018MSCI EAFE Index (Net)
Number of holdings49900
Market cap (median) Source: FactSet$26.5 billion11068284702.240000000
Market cap (weighted average) Source: FactSet$46.4 billion60495178486.670000000
Portfolio turnover (last fiscal year)15%n/a
Beta (relative to MSCI EAFE Index (Net)) (view definition)0.90n/a
SEC 30-day yield with waiver (view definition)2.00%
SEC 30-day yield without waiver (view definition)2.00%
Annualized standard deviation, 3 years (view definition)9.93n/a
Portfolio composition as of 09/30/2018Total may not equal 100% due to rounding.
International equities & depositary receipts98.1%
Cash and cash equivalents1.9%
Top 10 holdings as of 09/30/2018

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
ITOCHU Corp.3.96%
MINEBEA MITSUMI Inc.3.61%
Imperial Brands PLC3.46%
Mitsubishi UFJ Financial Group Inc.3.33%
Koninklijke Philips NV3.30%
Toyota Motor Corp.3.20%
Novartis AG3.07%
Vinci S.A.2.94%
Nordea Bank AB2.85%
Yue Yuen Industrial Holdings Ltd.2.79%
Total % Portfolio in Top 10 holdings32.51%

Top 10 countries as of 09/30/2018

List may exclude cash, cash equivalents, and exchanged-traded funds (ETFs) that are used for cash management purposes.

Country% of portfolio
Japan20.9%
France18.7%
United Kingdom14.6%
Hong Kong5.5%
Netherlands5.2%
Canada5.0%
Germany4.5%
Sweden3.9%
Italy3.3%
Switzerland3.1%
Distribution history - annual distributions (Institutional Class)1,2
Distributions ($ per share)
YearCapital gains3Net investment
income
20180.0000.000
20170.0000.268
20160.0000.300
20150.0000.197
20140.0000.302
20130.0000.178
20120.0000.182
20110.0000.230
20100.0000.138
20090.0000.260
20080.0000.344

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 available only available to certain investors. See the prospectus for more information.

Ned Gray

Ned A. Gray, CFA

Senior Vice President, Chief Investment Officer — Global and International Value Equity

Start date on the Fund: May 2006

Years of industry experience: 32

(View bio)


Institutional Class shares available only available to certain investors. See the prospectus for more information.

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 fees0.85%
Distribution and service (12b-1) feesnone
Other expenses0.25%
Total annual fund operating expenses1.10%
Fee waivers and expense reimbursementsnone
Total annual fund operating expenses after fee waivers1.10%

Institutional Class shares available only available to certain investors. See the prospectus for more information.

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 1.16% of the Fund’s average daily net assets from March 29, 2018 through March 29, 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 International Value Equity Fund Quarterly commentary March 31, 2018

Economic developments / market drivers

The steady upward continuity of equity market returns that distinguished the year 2017 required just more than a month into 2018 to come unglued. Volatility, mostly tame since just after the Brexit shock of 2016, returned dramatically in early February and remained among the market’s most prominent features through quarter’s end. Against a backdrop of solid and ubiquitous economic expansion, the market demonstrated once again that too much of a good thing leads to its own reversal, or at least to a fear that such a course is in the offing. For the world’s developed markets, the result was the weakest quarter in US dollar terms since 2015, and the only down quarter of the past eight, as represented by the MSCI World Index.

  • After a notable string of successive positive months, the United States stood out in its display of renewed market volatility. Inflationary fears gained attention as new US Federal Reserve Chairman Jerome Powell signaled continued upward moves in interest rates at the same time that economic indicators, particularly employment data coupled with wage gains, suggested accelerating expansion. Geopolitical tensions and tough rhetoric on trade policy further undermined market complacency. Public scrutiny of the index-heavy major technology companies, such as Facebook (which is not held in the Fund), magnified the effect, producing a nearly threefold increase in market volatility relative to the prior quarter (source: MSCI Index data, Macquarie analysis).
  • Europe’s results reflected a story with two distinct narratives: Initially, January’s good economic underpinnings, coupled with interest rates moving up from a low base and appreciation of the euro, corresponded to strong equity performance — both absolute and relative to other regions. Those strong economic fundamentals also favored cyclical stocks, especially financials. These early gains placed the region’s performance ahead of the MSCI World Index for the quarter overall. Later in the quarter, economic survey data reversed moderately, and rates eased. With the euro remaining relatively strong, threatening export competitiveness, the region’s stocks declined slightly more than the overall market, and sector performance shifted in a decidedly defensive direction, with utilities assuming the leadership role and financials suffering.
  • While Japan’s economic readings failed to distinguish themselves in absolute terms, their steady growth proved generally supportive as uncertainty increased around the world. Elements of the so-called “Abenomics” reform package continued to take shape, with positive results for both corporate performance and sentiment. Japanese stocks led the rest of the developed world for much of the quarter, and stood out particularly well in the February-March period, when volatility and risk aversion gained prominence. Japan was the only developed market region to retain its positive absolute return through the quarter’s end.
  • Emerging market stocks continued to perform well in absolute and relative terms, though this pattern weakened during the quarter’s final days as the combination of trade tensions and reversals in the technology sector found their way into emerging market stock prices. Among major country contributors, Brazil led strongly as the local cyclical recovery gathered pace, while India lagged and the major East Asian markets including China were mixed.

Within the Fund

For the first quarter, the Fund underperformed its benchmark, the MSCI EAFE Index, primarily due to adverse stock selection. On a sector basis, weak stock selection in financials, consumer staples, and consumer discretionary more than offset strong stock selection in telecommunications, energy, and information technology. Overall sector allocation was positive. The favorable effect of an underweight exposure to materials and an overweight exposure to consumer discretionary more than offset the negative effect of an underweight exposure to utilities. On a regional basis, stock selection was negative. Weak stock selection in the euro zone, United Kingdom, and Japan more than offset strong stock selection in Europe ex euro zone. Overall regional allocation was positive due to the favorable effect of exposure to emerging markets and Canada. An average cash position of 2.2% during the quarter also had a beneficial effect.

Net currency effect was negative. The adverse effect of exposure to the Canadian dollar and an overweight exposure to the Hong Kong dollar more than offset the positive effect of an underweight exposure to the Australian dollar.

Trading activity during the quarter included trimming positions and redeploying the proceeds at attractive valuations. This activity involved positions across a variety of sectors and regions, but did not result in material changes to the Fund’s positioning with respect to those measures.

Prospective global market drivers and general outlook

In prior communications we have addressed the interaction of cyclical drivers with measures of valuation, finding that in most markets, price gains in 2017 were supported more by underlying improvement in corporate profitability and broader economic growth than by stretched valuations. However, there existed then, and remain now, considerable divergences across markets in both cyclical positioning and valuation versus long-term norms.

The US remains at the high end of the historical valuation scale, while its economic cycle is of longer duration than nearly all of its developed peers. Other regions appear to have greater scope for both the longevity of their economic cycle and potential for revaluation. The declining market in the first quarter has eased pressure on valuations slightly in many global markets, including the US, but the pull-through of fundamental improvement has tended to have a greater impact on those valuations, and that impact is more clearly apparent in Japan and Europe than in the US.

Of course, historical patterns do not dictate the course of future events, and each cycle has its own characteristics. Declining valuations in the face of improving fundamentals may imply market skepticism regarding the durability of those improvements. In the case of the US, the market’s dramatic reaction to what may seem like minor cracks in the armor of economic recovery — namely inflationary fears grounded in the combination of incipient wage gains with strong job growth — may also be seen as classic harbingers of a cyclical top, which the market is correctly discounting. We find the weight of evidence remains in favor of continued improvement, particularly outside the US, but we remain alert to any signals to the contrary.

As always, while mindful of the potential of macro drivers to steer markets both up and down, as managers of concentrated, active portfolios, we remain focused on the power of individual companies to transcend the speculative cycles to which they happen to have some exposure. We believe the success of strong managements and strong franchises can transcend cyclical noise, and we believe that the qualities that drive this success can be recognized and, when accompanied by attractive valuation, can potentially lead to strong and sustained outperformance.

Past performance is not a guarantee of future results.

The MSCI World Index is a free float-adjusted market capitalization weighted index designed to measure equity market performance across developed markets worldwide.

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

[475065] 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.

Investing involves risk, including the possible loss of principal.

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 10/15/2018)

Institutional ClassPriceNet change
NAV$13.93no chg
Max offer price$13.93n/a

Total net assets (as of 09/30/2018)

$327.6 million all share classes

Overall Morningstar RatingTM

 
Institutional Class shares (as of 09/30/2018)
RatingNo. of funds
Overall4276
3 Yrs3276
5 Yrs3225
10 Yrs4146
Morningstar categoryMorningstar Foreign Large Value Category

(View Morningstar disclosure)

The Morningstar rating is based on risk-adjusted returns.

Morningstar ranking (as of 09/30/2018)

YTD ranking258 / 318
1 year266 / 317
3 years101 / 276
5 years68 / 225
10 years26 / 146
Morningstar categoryMorningstar Foreign Large Value Category

(View Morningstar disclosure)

The Morningstar ranking is based on historical total returns.

Lipper ranking (as of 09/30/2018)

YTD ranking149 / 186
1 year141 / 184
3 years65 / 153
5 years50 / 124
10 years15 / 79
Lipper classificationLipper International Multi-Cap Value Funds Average

(View Lipper disclosure)

The Lipper ranking is based on historical total returns.

Benchmark, peer group

MSCI EAFE (Europe, Australasia, Far East) Index (view definition)

Morningstar Foreign Large Value Category (view definition)

Lipper International Multi-Cap Value Funds Average (view definition)

Additional information