Delaware VIP® Fund for Income Series

Key features

A research-driven high yield bond fund seeking long-term growth and income

Leverages the team’s deep credit expertise and sizable presence in the corporate bond market

An experienced management team with more than 25 years average industry experience

Daily pricing as of 10/26/2020

NAV
NAV 1-day net change
Max offer price
$6.16

Total net assets as of 09/30/2020

All share classes
$95.2 million

Overview

Series information
Inception date11/09/1987
Dividends paid (if any)Annually
Capital gains paid (if any)Annually
Series identifiers
CUSIP246493522

Benchmark

ICE BofA US High Yield Constrained Index (primary) (view definition)

ICE BofA BB-B US Cash Pay High Yield Constrained 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 (09/30/2020)

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.

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.

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
0.83%
Net
0.83%

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
12.78%
2018
-2.58%
2017
6.82%
2016
11.12%
2015
-1.85%
2014
0.79%
2013
6.88%
2012
13.51%
2011
5.66%
2010
13.71%

Portfolio

Portfolio characteristics as of 09/30/2020

Number of holdings
230
Portfolio turnover (last fiscal year)
115%
Effective duration (weighted average) (view definition)
4.11 years
Effective maturity (weighted average) (view definition)
4.99 years
SEC 30-day yield with waiver (view definition)
4.34%
SEC 30-day yield without waiver (view definition)
4.31%
Annualized standard deviation, 3 years (view definition)
8.32

Portfolio composition as of 09/30/2020
Total may not equal 100% due to rounding.

Credits
77.3%
Foreign bonds
18.3%
Cash and cash equivalents
4.5%

Top 10 fixed income holdings as of 09/30/2020

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

List excludes cash and cash equivalents.

Holding
% of portfolio
Holding
% of portfolio
Popular Inc. 6.125 9/14/2023
1.37
Sprint Corp. 7.875 9/15/2023
1.19
Cco Holdings Llc 4.500 8/15/2030
1.18
Csc Holdings Llc 4.625 12/1/2030
1.16
Freeport-mcmoran Copper & Gold Inc. 5.450 3/15/2043
1.15
Connect Finco Sarl 6.750 10/1/2026
1.10
Ypso Finance Bis S.A. 6.000 2/15/2028
1.06
Reynolds Group Issuer Llc 4.000 10/15/2027
1.02
United Rentals (north America) Inc. 5.250 1/15/2030
1.02
Hub International Ltd. 7.000 5/1/2026
0.99

Total % Portfolio in Top 10 holdings - 11.24%

List of monthly holdingsList of quarterly holdings

Sector allocation as of 09/30/2020

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
Energy
11.1%
Telecommunications
10.6%
Healthcare
8.3%
Technology & electric
7.9%
Basic industry
7.8%
Capital goods
7.4%
Media
7.1%
Services
6.6%
Emerging markets
4.7%
Leisure
3.9%
Consumer goods
3.2%
Automotive
2.7%
Utility
2.7%
Transportation
2.5%
Real estate
2.2%
Insurance
2.0%
Banking
2.0%
Retail
1.5%
Financial services
1.4%

Credit quality as of 09/30/2020

Rating
Series
Rating
Series
AAA
4.5%
BBB
8.6%
BB
44.5%
B
29.9%
CCC
12.4%
Not rated
0.2%

Total may not equal 100% due to rounding. The Series’ 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 Series’ Statement of Additional Information.

Management

John McCarthy

John P. McCarthy, CFA

  • Managing Director, Senior Portfolio Manager
  • Start date on the Fund: October 2019
  • Years of industry experience: 33
  • Read bio
Adam Brown

Adam H. Brown, CFA

  • Managing Director, Senior Portfolio Manager
  • Start date on the Fund: October 2019
  • Years of industry experience: 22
  • Read bio

Fees

Annual series operating expenses
Management fees0.65%
Distribution and service (12b-1) feesnone
Other expenses0.18%
Total annual Series operating expenses0.83%
Fee waivers and expense reimbursements1none
Total annual series operating expenses after fee waivers and expense reimbursements0.83%

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 0.83% 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 ICE BofA US High Yield Constrained Index as of Oct. 4, 2019. The Series 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.

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.

The Series' 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 Series security trades on behalf of the Manager and exercise investment discretion for securities in certain markets where the Manager 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 Series may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Series may be prepaid prior to maturity, potentially forcing the Series to reinvest that money at a lower interest rate.

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

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 Series to obtain precise valuations of the high yield securities in its portfolio.

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.

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.

IBOR risk is the risk that changes related to the use of the London interbank offered rate (LIBOR) or similar rates (such as EONIA) could have adverse impacts on financial instruments that reference these rates. The potential abandonment of these rates and transition to alternative rates could affect the value and liquidity of instruments that reference them and could affect investment strategy performance.

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.

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.

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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