Delaware Investments Corporate Bond Fund

Investment objective

The investment objective of Delaware Investments Corporate Bond Fund is to aim to achieve total return (income plus capital appreciation).

Philosophy

The investment manager analyses economic and market conditions, seeking to identify the securities or market sectors that it thinks are the best investments for the Fund. Before selecting corporate bonds, the investment manager evaluates each individual bond, including its income potential and the size of the bond issuance. The investment manager carries out a credit analysis of the issuer to determine whether the company has the financial ability to meet the bond's repayments. The investment manager seeks to maintain a well-diversified portfolio of bonds that represents many different sectors and industries.

Performance as of 31 January 2018

  January 1 Year 3 Year Since inception(15/12/2014)
Delaware Investments Corporate Bond Fund
(Class I USD (Accumulating) shares, net of fees, in US dollars)
-0.98% 5.28% 2.51% 3.60%
Primary benchmark: Bloomberg Barclays US Corporate Investment Grade Index -0.96% 5.08% 2.54% 3.45%
Secondary benchmark: Bloomberg Barclays Global Aggregate Corporate Index 0.58% 8.77% 3.19% 3.04%

As of 30 September 2017, Delaware Investments Corporate Bond Fund had 4,524,571.487 settled shares, and a total balance of shares in issue of 4,524,571.487 across all share classes of the Fund.

The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted.

The Bloomberg Barclays US Corporate Investment Grade Index is composed of US dollar-denominated, investment grade, US Securities and Exchange Commission (SEC)-registered corporate bonds issued by industrial, utility, and financial companies. All bonds in the index have at least one year to maturity.

The Bloomberg Barclays Global Aggregate Corporate Index is composed of investment grade fixed-rate corporate bonds issued by corporations in emerging and developed markets worldwide. All bonds in the index have at least one year to maturity.

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

Portfolio characteristics as of 31 January 2018

Primary benchmark: Bloomberg Barclays US Corporate Investment Grade Index

Secondary benchmark: Bloomberg Barclays Global Aggregate Corporate Index

  Fund Primary
benchmark
Secondary
benchmark
Effective maturity 11.8 yrs 10.9 yrs 9.0 yrs
Effective duration 7.3 yrs 7.5 yrs 6.7 yrs
Current yield 4.0% 3.8% 3.3%
Yield to worst 3.8% 3.5% 2.7%
Number of securities 278 5,598 10,960

Top 10 sector weightings as of 31 January 2018

  Fund Primary
benchmark
Secondary
benchmark
Banking 23.9% 23.4% 27.0%
Electric 12.1% 6.3% 5.7%
Communications 8.6% 9.5% 8.8%
Energy 8.6% 9.3% 7.3%
Consumer non-cyclical 7.0% 15.3% 13.3%
Capital goods 6.9% 4.9% 4.6%
Basic industry 4.8% 3.3% 3.5%
Technology 4.8% 8.7% 5.6%
Insurance 3.5% 4.4% 5.8%
REITs 3.4% 2.5% 2.5%

Credit quality as of 31 January 2018

  Fund Primary
benchmark
Secondary
benchmark
AAA 4.4% 2.1% 1.4%
AA 1.5% 8.2% 9.2%
A 18.1% 41.9% 40.6%
BBB 62.8% 47.8% 48.8%
Below BBB 13.2% 0.0% 0.0%

Total may not equal 100% due to rounding. The Fund’s investment manager, MIMA (Macquarie Investment Management Advisers) (formerly known as Delaware Investment Advisers (DIA)), a series of Macquarie Investment Management Business Trust (MIMBT) (formerly known as Delaware Management Business Trust) receives “Credit Quality” ratings for the underlaying securities held by the Fund from three “Nationally Recognized Statistical Rating Agencies” (NRSROs) — Standard & Poor’s (S&P), Moody’s Investors Services, and Fitch, Inc. The credit quality breakdown is calculated by MIMA 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 agencies are included in the “not rated” category when applicable. Unrated securities do not necessarily indicate low quality.

Per Standard & Poor’s credit rating agency, bonds rated below AAA are more susceptible to the adverse effects of changes in circumstances and economic conditions than those in higher rated categories, but the obligor’s capacity to meet its financial commitment on the obligation is still strong. Bonds rated BBB exhibit adequate protection parameters, although adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments. Bonds rated BB, B, and CCC are regarded as having significant speculative characteristics with BB indicating the least degree of speculation.

The Bloomberg Barclays US Corporate Investment Grade Index is composed of US dollar-denominated, investment grade, US Securities and Exchange Commission (SEC)-registered corporate bonds issued by industrial, utility, and financial companies. All bonds in the index have at least one year to maturity.

The Bloomberg Barclays Global Aggregate Corporate Index is composed of investment grade fixed-rate corporate bonds issued by corporations in emerging and developed markets worldwide. All bonds in the index have at least one year to maturity.

Mike Wildstein

Michael G. Wildstein, CFA

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: December 2014

Years of industry experience: 16

(View bio)


Wayne Anglace

Wayne A. Anglace, CFA

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: July 2016

Years of industry experience: 19

(View bio)


J. David Hillmeyer

David Hillmeyer, CFA

Senior Vice President, Senior Portfolio Manager

Start date on the Fund: December 2014

Years of industry experience: 25

(View bio)


Kashif Ishaq

Kashif Ishaq 

Senior Vice President, Head of Investment Grade Corporate Bond Trading — Macquarie Investment Management, Americas

Start date on the Fund: December 2014

Years of industry experience: 15

(View bio)


Paul Matlack

Paul A. Matlack, CFA

Senior Vice President, Senior Portfolio Manager, Fixed Income Strategist

Start date on the Fund: December 2014

Years of industry experience: 32

(View bio)


Portfolio holdings are as of the date noted above and are subject to change at any time. Holdings may not be representative of current or future investments and may not include the entire investment portfolio. Holdings information is made available to the public 30 calendar days after the most recent month-end for monthly holdings and 30 calendar days after the most recent quarter-end for quarterly holdings.

Holdings data is for informational purposes only, and is not intended as a recommendation, offer, or solicitation for the purchase or sale of any specific security. By accessing the portfolio holdings, you agree not to reproduce, distribute or disseminate the portfolio holdings, in whole or part. In no event shall the Macquarie Collective Funds plc or its affiliates have any liability relating to the use of the portfolio holdings.

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

Investors should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and Key Investor Information Documents (KIIDs) contain this and other important information about the Fund. You can request a prospectus, fund supplement, and/or KIID free of charge by calling +353-1-483-2429, visiting delawarefunds.com/ucits/literature or by contacting your applicable local agent. Investors should read the prospectus, fund and country supplements (if applicable), and KIIDs carefully before investing or sending money.

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.

Because the Fund may invest in bank loans and other direct indebtedness, it is subject to the risk that the fund will not receive payment of principal, interest, and other amounts due in connection with these investments, which primarily depend on the financial condition of the borrower and the lending institution.

Each Fund is exposed to the risk that a counterparty will not settle a transaction due to a credit or liquidity problem. In the case of a default, the Fund could be subject to adverse market movements while replacement transactions are executed. This may be accentuated for contracts with longer maturities, or where there are concentrated transactions with a small group of counterparties.

Interest rates are determined by factors of supply and demand in the international money markets which are influenced by macro economic factors, speculation and central bank and government intervention. Fluctuations in short-term and/or long-term interest rates may affect the value of the Shares. Fluctuations in interest rates of the currency in which the Shares are denominated and/or fluctuations in interest rates of the currency or currencies in which a Fund’s assets are denominated may affect the value of the Shares.

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.

Supranational Organisations are entities designated or supported by governments or governmental entities to promote economic development, and include the Asian Development Bank, the European Community, the European Investment Bank, the Inter-American Development Bank, the International Monetary Fund, the United Nations, the International Bank for Reconstruction and Development (“World Bank”), and the European Bank for Reconstruction and Development. These organisations have no taxing authority and are dependent upon their members for payments of interest and principal. The lending activities of such supra-national entities are limited to a percentage of their total capital (including “callable capital”) contributed by members at an entity’s call, reserves, and net income.

The Funds that invest in debt securities and hold active currency positions may be exposed to currency exchange risk. Currency exchange rates may fluctuate over short periods of time. A Fund may engage in non-U.S. currency transactions in order to hedge against currency fluctuations. Hedging transactions, while potentially reducing the currency risks to which the Fund would otherwise be exposed, involve certain other risks, including the risk of a default by a counterparty.

Non-publicly traded and Rule 144A Securities may involve a high degree of business and financial risk and may result in substantial losses. These securities may be less liquid than publicly traded securities. Although these securities may be resold in privately negotiated transactions, the prices realised from these sales could be less than those originally paid by a Fund.

Prices of derivatives may move in unexpected ways. Some derivatives are “leveraged” and may magnify or otherwise increase investment losses. A liquid secondary market may not always exist for the Funds’ derivatives positions and may not be able to be “closed out” when desired. Derivatives involve legal risk, the risk of loss due to the unexpected application of a law or regulation, or because contracts are not legally enforceable or documented correctly.

Trading in options can cause the Fund’s Net Asset Value to experience more frequent and wider fluctuations than if the Fund did not utilise options. No assurance can be given that the Funds will be able to effect closing transactions at a time when they wish to do so. The Fund may be required to hold assets that it would otherwise have sold and continue to be at market risk on such assets encurring higher transaction costs. Options that are not exchange traded will subject a Fund to risks relating to its counterparty, such as the counterparty’s bankruptcy, insolvency, or refusal to honour its contractual obligations.

The use of swaps involves investment techniques and risks different from and potentially greater than those associated with ordinary portfolio securities transactions. There is no assurance that swap contract counterparties will be able to meet their obligations or in the event of default, the Fund will succeed in pursuing contractual remedies. There also may be circumstances in which it would be impossible for a Fund to close out its obligations under the swap contract.

Zero coupon bonds and payment-in-kind (PIK) bonds are considered to be more interest rate-sensitive and more speculative than interest-bearing bonds and may subject the Fund to adverse conditions under certain circumstances.

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.

Companies involved in Initial Public Offerings generally have limited operating histories, and prospects for future profitability are uncertain. Prices of IPOs may also be unstable because of the absence of a prior public market, the small number of shares available for trading, and limited investor information. IPOs will frequently be sold within 12 months of purchase.

Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.

In the event of bankruptcy or other default of a borrower of portfolio securities, a Fund could experience both delays in liquidating the loan collateral or recovering the loaned securities. Possible losses include (a) decline in the value of the collateral or in the value of the securities loaned during the period which the Fund seeks to enforce its rights thereto, (b) sub-normal levels of income and lack of access to income during this period, and (c) expenses of enforcing its rights.

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.

Fund finder

Daily pricing (as of 22/02/2018)

ClassPriceNet changeYTD
I USD (Acc.)$10.950.01-2.93%
F USD (Acc.)$10.640.01-2.92%

Class I$*

(Accumulating)

Currency USD
ISIN IE00BRYG7Z67
Sedol BRYG7Z6
CUSIP G5735R591
Bloomberg ID DELCBIU

Fees and expenses

Management fee 0.40%
Expense ratio 0.62%

Literature

Fund documents

Visit our Literature page for Key Investor Information Documents (KIIDs).

* For information on other share classes, please contact Delaware Investments at +1 215 255-1505 or at MacquarieUCITS@macquarie.com.