Delaware VIP® Covered Call Strategy Series (closed to new investors)

Key features

US large-cap equity exposure to help participate in market growth

Utilizes an options-based strategy with the goal of providing downside protection

Seeks consistent equity-like returns with lower volatility to help weather market cycles

Daily pricing as of 12/01/2020

NAV
NAV 1-day net change
Max offer price
$11.94

Total net assets as of 10/31/2020

All share classes
$17.8 million

Overview

Series information
Inception date05/02/2016
Dividends paid (if any)Annually
Capital gains paid (if any)Annually
Series identifiers
CUSIP246493530

Benchmark

CBOE S&P 500® BuyWrite Index (view definition)

S&P 500® Index (view definition)

Performance

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 (10/31/2020)

Returns for less than one year are not annualized.

Benchmark lifetime returns are as of the month end prior to the Fund's inception date.

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

Performance shown prior to Oct. 4, 2019, are as of the predecessor fund and investment team. Please see the Updated Significant Fund Event and prospectus for more information.

Average annual total return as of quarter-end (09/30/2020)

Returns for less than one year are not annualized.

Benchmark lifetime returns are as of the month end prior to the Series' inception date.

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

Performance shown prior to Oct. 4, 2019, are as of the predecessor series and investment team. Please see the Updated Significant Series Event and prospectus for more information.

Expense ratio

Gross
1.23%
Net
0.90%

Net expense ratio reflects a contractual waiver of certain fees and/or expense reimbursements from Oct. 4, 2019 through Oct. 31, 2021. Please see the fee table in the Series' prospectus for more information.

The performance and expense ratio information shown represent the performance and fees as they relate to actual shares of the Series. These examples do not include any fees or sales charges imposed by the variable insurance contract for which the Series is an investment option. If they were included, your costs would be higher and performance would be lower. Investors should consult the contract prospectus or disclosure documents for more information.

Calendar year total returns @ NAV

Year
Annual return
Year
Annual return
2019
21.37%
2018
-9.99%
2017
11.07%

Portfolio

Portfolio characteristics as of 10/31/2020

Number of holdings
68
Market cap (median) Source: FactSet
$133.9 billion
Market cap (weighted average) Source: FactSet
$463.3 billion
Portfolio turnover (last fiscal year)
56%
Beta (relative to CBOE S&P 500 BuyWrite Index) (view definition)
1.11
Annualized standard deviation, 3 years (view definition)
15.76

Portfolio composition as of 10/31/2020
Total may not equal 100% due to rounding.

Domestic equities
98.9%
Cash and cash equivalents
1.4%
International equities & depositary receipts
-0.3%

Values in excess of 100% and negative values may appear as the result of certain assets and liabilities. See the Series' prospectus for securities in which the Series would typically invest.

Top 10 holdings as of 10/31/2020

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

List may exclude cash, cash equivalents, and exchange-traded funds (ETFs) that are used for cash management purposes. Please see the Series' complete list of holdings for more information.

Holdings based by issuer.

Holding
% of portfolio
Holding
% of portfolio
Apple Inc.
8.31
MICROSOFT CORP
7.96
HOME DEPOT INC
6.29
BlackRock Inc.
4.71
COSTCO WHSLE CORP
4.62
Facebook Inc.
4.58
Texas Instruments Inc.
4.55
Alphabet Inc.
4.54
BROADCOM INC
4.52
Medtronic PLC
4.46

Total % Portfolio in Top 10 holdings - 54.54%

List of monthly holdingsList of quarterly holdings

Sector allocation as of 10/31/2020

List may exclude cash, cash equivalents, and exchange-traded funds (ETFs) that are used for cash management purposes. Please see the Series’ complete list of holdings for more information.

Sector
% of portfolio
Sector
% of portfolio
Information technology
35.6%
Communication services
11.3%
Healthcare
10.4%
Consumer discretionary
10.0%
Industrials
9.1%
Consumer staples
7.9%
Financials
7.6%
Utilities
2.4%
Energy
2.3%
Materials
2.2%

Management

Investment manager

Delaware Management Company (DMC)

Sub-advisor

Ziegler Capital Management

Wiley D Angell

Wiley D. Angell 

  • Chief Investment Officer, Senior Portfolio Manager — Ziegler Capital Management, LLC
  • Start date on the Fund: October 2019
  • Years of industry experience: 35
  • Read bio
Sean C Hughes

Sean C. Hughes, CFA

  • Senior Portfolio Manager — Ziegler Capital Management, LLC
  • Start date on the Fund: October 2019
  • Years of industry experience: 16
  • Read bio

Fees

Annual series operating expenses
Management fees0.75%
Distribution and service (12b-1) feesnone
Other expenses0.48%
Total annual Series operating expenses1.23%
Fee waivers and expense reimbursements1(0.33%)
Total annual series operating expenses after fee waivers and expense reimbursements0.90%

1The Series’ 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 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 series operating expenses from exceeding 0.90% of the Series’ average daily net assets from Oct. 4, 2019 through Oct. 31, 2021. These waivers and reimbursements may only be terminated by agreement of the Manager and the Series.

Resources

*The Series changed its broad-based securities index to the CBOE S&P 500 BuyWrite Index as of Oct. 4, 2019. The Fund elected to use the new index because it more closely reflected the Series investment strategies.

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

Ziegler Capital Management, LLC (ZCM), a US registered investment advisor, is the sub-advisor to the Series. As sub-advisor, Ziegler Capital Management, LLC (ZCM) is responsible for day-to-day management of the Series' assets. Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust (MIMBT), has ultimate responsibility for all investment advisory services.

Carefully consider the Series' investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Series' prospectus and its summary prospectus, which may be obtained by visiting delawarefunds.com/vip-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.

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

The Series may experience portfolio turnover in excess of 100%, which could result in higher transaction costs and tax liability.

Writing call options involves risks, such as potential losses if equity markets or an individual equity security do not move as expected and the potential for greater losses than if these techniques had not been used.

At times, the Fund may not be able to identify attractive dividend-paying stocks. The income received by the Fund will also fluctuate due to the amount of dividends that companies elect to pay, which could adversely affect the Fund’s ability to pay dividends and its share price.

A covered call is a transaction in which the investor selling call options owns the equivalent amount of the underlying security. Call options are financial contracts that give the option buyer the right, but not the obligation, to buy a security at a specified price within a specific time period. The investor's long position in the asset is the "cover" because it means the seller can deliver the shares if the buyer of the call option chooses to exercise.

By writing covered call options, the Fund will give up the opportunity to benefit from potential increases in the value of a Fund asset above the exercise price, but will bear the risk of declines in the value of the asset. Writing call options may expose the Fund to significant additional costs. Derivatives may be difficult to sell, unwind or value.

Writing call options involves risks. Writing call options may significantly reduce or eliminate the amount of Series dividends that qualify to be taxed to non-corporate shareholders at a lower rate. Covered calls also are subject to federal tax rules that may: (1) limit the allowance of certain losses or deductions by the Series (2) convert the Series’ long-term capital gains into higher taxed short-term capital gains or ordinary income; (3) convert the Series’s ordinary losses or deductions to capital losses, the deductibility of which is more limited; and/or (4) cause the Series to recognize income or gains without a corresponding receipt of cash.

An exchange-traded fund (ETF) is a security that represents all the stocks on a given exchange. ETF shares can be bought, sold, short-sold, traded on margin, and generally function as if they were stocks.

Liquidity risk is the possibility that securities cannot be readily sold within seven days at approximately the price at which a fund has valued them.

“Non-diversified” 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.

The Series 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.

Delaware VIP® Series refers to Delaware VIP Funds. Delaware VIP Funds are not available for direct investment except for issuers of variable insurance product contracts. They are available only through the purchase of certain variable insurance products.

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 Series’ 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 Series from executing advantageous investment decisions in a timely manner and could negatively impact the Series’ ability to achieve its investment objective. Any such event(s) could have a significant adverse impact on the value and risk profile of the Series.

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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