Item 1. Reports to Stockholders
Annual report
Multi-asset mutual fund
Delaware Strategic Allocation Fund
March 31, 2021
Beginning on or about June 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of your Fund’s shareholder reports will no longer be sent to you by mail, unless you specifically request them from the Fund or from your financial intermediary, such as a broker/dealer, bank, or insurance company. Instead, you will be notified by mail each time a report is posted on the website and provided with a link to access the report. If you already elected to receive shareholder reports electronically, you will not be affected by this change and you do not need to take any action. You may elect to receive shareholder reports and other communications from the Fund electronically by signing up at delawarefunds.com/edelivery. If you own these shares through a financial intermediary, you may contact your financial intermediary. You may elect to receive paper copies of all future shareholder reports free of charge. You can inform the Fund that you wish to continue receiving paper copies of your shareholder reports by contacting us at 800 523-1918. If you own these shares through a financial intermediary, you may contact your financial intermediary to elect to continue to receive paper copies of your shareholder reports. Your election to receive reports in paper will apply to all funds held with the Delaware Funds® by Macquarie or your financial intermediary. |
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 visiting delawarefunds.com/literature or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.
You can obtain shareholder reports and prospectuses online instead of in the mail.
Visit delawarefunds.com/edelivery.
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Experience Delaware Funds® by Macquarie
Macquarie Investment Management (MIM) is a global asset manager with offices in the United States, Europe, Asia, and Australia. As active managers, we prioritize autonomy and accountability at the investment team level in pursuit of opportunities that matter for clients. Delaware Funds is one of the longest-standing mutual fund families, with more than 80 years in existence.
If you are interested in learning more about creating an investment plan, contact your financial advisor.
You can learn more about Delaware Funds or obtain a prospectus for Delaware Strategic Allocation Fund at delawarefunds.com/literature.
Manage your account online
| ● | Check your account balance and transactions |
| ● | View statements and tax forms |
| ● | Make purchases and redemptions |
Visit delawarefunds.com/account-access.
Macquarie Asset Management (MAM) offers a diverse range of products including securities investment management, infrastructure and real asset management, and fund and equity-based structured products. MIM is the marketing name for certain companies comprising the asset management division of Macquarie Group. This includes the following investment advisers: Macquarie Investment Management Business Trust (MIMBT), Macquarie Funds Management Hong Kong Limited, Macquarie Investment Management Austria Kapitalanlage AG, Macquarie Investment Management Global Limited, Macquarie Investment Management Europe Limited, and Macquarie Investment Management Europe S.A.
The Fund is distributed by Delaware Distributors, L.P. (DDLP), an affiliate of MIMBT and Macquarie Group Limited.
Other than Macquarie Bank Limited (MBL), none of the entities noted are authorized deposit-taking institutions for the purposes of the Banking Act 1959 (Commonwealth of Australia). The obligations of these entities do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of these entities, unless noted otherwise.
The Fund is governed by US laws and regulations.
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Unless otherwise noted, views expressed herein are current as of March 31, 2021, and subject to change for events occurring after such date.
The Fund is not FDIC insured and is not guaranteed. It is possible to lose the principal amount invested.
Advisory services provided by Delaware Management Company, a series of MIMBT, a US registered investment advisor.
All third-party marks cited are the property of their respective owners.
© 2021 Macquarie Management Holdings, Inc.
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| Portfolio management review | |
| Delaware Strategic Allocation Fund | March 31, 2021 (Unaudited) |
| Performance preview (for the year ended March 31, 2021) | | | | | |
| Delaware Strategic Allocation Fund (Institutional Class shares) | | 1-year return | | +35.54 | % |
| Delaware Strategic Allocation Fund (Class A shares) | | 1-year return | | +35.37 | % |
| Bloomberg Barclays US Aggregate Index (benchmark) | | 1-year return | | +0.71 | % |
| S&P 500® Index (benchmark) | | 1-year return | | +56.35 | % |
Past performance does not guarantee future results.
For complete, annualized performance for Delaware Strategic Allocation Fund, please see the table on page 5. Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service fee.
The performance of Class A shares excludes the applicable sales charge. Both Institutional Class shares and Class A shares reflect the reinvestment of all distributions.
Please see page 8 for a description of the indices. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Investment objective
The Fund seeks capital appreciation with current income as a secondary objective.
Market review
The fiscal year ended March 31, 2021, was mixed from a performance perspective, with risk assets in positive territory overall, albeit with heightened volatility. Just weeks before the period began, in mid-January 2020, the COVID-19 pandemic emerged in China. As reported cases around the globe increased significantly, it soon became clear that the virus would not be contained and, beginning in February, financial markets plunged worldwide. Then just weeks into the fiscal period, governments and central banks worldwide began providing unprecedented levels of fiscal and monetary support, setting the stage for a remarkable rebound in financial markets.
Contrasting themes marked the latter half of the fiscal year as equities recovered and pushed toward all-time highs despite virus cases increasing in the United States, Europe, and Asia. Investors focused instead on the improving economic data, the abundant liquidity provided by central banks, and the prospect of additional fiscal stimulus. Optimism faded in September as a resurgence in coronavirus cases, political uncertainty about the US presidential election, and continued US-China tensions concerned investors.
As 2020 drew to a close, even as COVID-19 cases were worsening globally, investors were buoyed by positive news on coronavirus vaccine development and clarity on the US election results. An unprecedented rally for risk assets resulted. Shortly after the election, two COVID-19 vaccines developed by Pfizer and Moderna, with higher-than-expected efficacy rates of about 95%, were granted Emergency Use Authorization by the Food and Drug Administration. The initial rollout of the vaccines was slow, however, and US case trends worsened. Some states added or reinstated restrictions as new cases and hospitalizations hit record highs daily. Holiday travel may have accelerated the spread.
In the first quarter of 2021, markets focused on key support themes. A stronger-than-expected US and European earnings season, the acceleration of the COVID-19 vaccine rollout globally, declining infection rates, and an ultra-accommodative monetary policy drove the markets. Against the positive economic backdrop, interest rates, which had slowly risen, increased their upward movement in the latter half of the quarter. As a result, markets sold off somewhat, and volatility
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Portfolio management review
Delaware Strategic Allocation Fund
picked up as a global bond market rout ensued with the 10-year US Treasury rate climbing above 1.7% on an intraday basis.
The question now, in our view, is no longer whether the economic glass is half full or half empty, but whether the stimulating monetary and fiscal policy may make the glass overflow.
Within the Fund
For the fiscal year ended March 31, 2021, Delaware Strategic Allocation Fund underperformed its primary benchmark, the S&P 500® Index, and outperformed its other benchmark, the Bloomberg Barclays US Aggregate Index. The Fund’s Institutional Class shares gained 35.54%. The Fund’s Class A shares advanced 35.37% at net asset value and 27.54% at maximum offer price. These figures reflect all distributions reinvested. During the same period, the S&P 500 Index gained 56.35% and the Bloomberg Barclays US Aggregate Index advanced 0.71%. For complete, annualized performance of Delaware Strategic Allocation Fund, please see the table on page 5.
At the overall portfolio level, overweights to structured finance, public corporates, and cash securities drove underperformance relative to the primary benchmark. Security selection in equities partially offset this.
The Fund seeks capital appreciation with current income as a secondary objective by investing in a combination of underlying securities representing a variety of asset classes and investment styles. The Fund will typically target about 60% of its net assets in equity securities and about 40% of its net assets in fixed income securities.
During the period, fixed income underperformed equities as rising interest rates negatively affected bond prices while equities continued to rally on hopes that the economy was recovering. As such, the Fund’s allocation to fixed income caused the largest drag on relative performance during the period. Within fixed income, an overweight to structured finance and US Treasurys drove underperformance.
The Fund continued to maintain a modestly conservative tilt toward international exposure relative to the benchmark. This international exposure also detracted, as it underperformed US equities during the period. Despite an accelerated rollout of vaccines for COVID-19 globally, many developed economies, including within Europe, were slow to implement vaccination programs and, with rising infection rates, government-imposed lockdowns continued to weigh across the region. As a result of the delayed normalization in some parts of the world, international equities lagged US equities for the period.
Another detractor from relative performance was the Fund’s exposure to US growth equities. Although they were up sharply throughout 2020, they lagged in the latter half of the investment period when investors took profits and reallocated to more cyclical stocks such as value equities. Rising interest rates negatively affected many growth companies, further hurting performance during the period.
At the sector level within the Fund’s corporate securities (equities, public corporates, and convertibles), underperformance was offset by investments in consumer staples and healthcare. Investments in the consumer staples sector made the largest contribution to relative performance during the period. Within the sector, exposure to household products, beverages, and food & staples retailing supported performance. The inelastic demand for these staples, along with recent stimulus checks sent to many US households, lifted the group higher.
The healthcare sector also contributed to relative performance. Exposure to biotechnology and healthcare equipment added to performance. During the period, as healthcare companies and governments raced to find a vaccine or other
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effective treatment for COVID-19, investors rotated into the space to take advantage of the sector’s defensive nature and the potential for a COVID-19 cure.
We periodically examine the contribution of derivatives to the Fund’s performance. Based on the available information, during the 12 months ended March 31, 2021, the Fund’s combination of futures, options, swaps, and currency positions had only a limited positive impact on performance.
Portfolio positioning
The Fund’s strategic policy weights reflect a commitment to seeking diversification across geographies and asset classes. As such, the Fund continued to maintain a modestly conservative tilt toward risk assets (equities) but adjusted the exposure during the period.
The most notable change was trimming exposure in fixed income and rotating into equities. As markets recovered from the initial decline induced by COVID-19, the Fund was able to take advantage of investments with what we viewed as attractive valuations. As such, the Fund decreased its exposure to investment grade fixed income and structure finance during the period.
Within equities, the Fund increased its international exposure. The increase reflects our base scenario of a broad global economic recovery in 2021 and 2022 and adds to the allocation of more cyclical market segments that have, in our estimation, attractive valuation levels relative to the US.
Outlook
We remain optimistic about the economic recovery. There are signs that new virus cases are declining globally even as many COVID-19-related challenges remain. Among them is the recent rise in global yields, which appear to be “normalizing” after the dramatic downturn at this point last year. We think this normalization is warranted by a vaccine-based recovery and the eventual tightening by central banks. With the economic recovery strengthening, we think the positive catalysts to an economic recovery may outweigh the risks to rising rates.
Rising real yields may provide a tailwind for pro-cyclical and pro-inflation parts of the market (including commodities, value, and small-cap equities) when consumers resume normal activities. With COVID-19 cases down as vaccines roll out, consumers are expected to spend some of their surging incomes (and savings) on getaways. Longer term, we remain optimistic about consumer spending, abnormally high savings, the vaccine rollout, and continued fiscal stimulus driving economic growth. Markets are starting to shift focus from the growth and technology companies boosted by COVID-19 to the value and cyclical companies that the pandemic hurt.
That said, the pandemic accelerated the adoption of technology throughout our daily lives, and we believe many of these structural changes may remain indefinitely, offsetting some upside inflation risks. We believe technological growth is extremely important since it drives productivity growth, which, in turn, drives potential gross domestic product (GDP) growth, possibly increasing the headroom for non-inflationary real growth.
We are still in early stages of the global vaccination and COVID-19 reopening programs. Even if lockdowns are implemented again in some regions before a full reopening (especially in Europe), we think that investors will look through the short-term noise and buy potential dips in the reopening trade. While many of the developed markets face challenges the pandemic caused, the economic recovery in China continues. As business there returns to a new normal, we think the interest and attention of the global investor
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Portfolio management review
Delaware Strategic Allocation Fund
community is now focused on accessing what are viewed as growing opportunities in China.
We believe fixed income markets got a bit ahead of themselves about the speed and magnitude of recent yield increases. While the market seems to test the Fed’s willingness to tolerate higher inflation rates, we still believe that policy makers will remain accommodative. Within fixed income, we find that the appeal of investment grade credit has declined considerably, and we believe corporate spreads are already in their late-stage cycle. Low interest rates and high government spending are likely to persist, in our view, as policymakers attempt to mitigate the economic effects of pandemic control measures. We view the current fixed income backdrop as an opportunity to diversify out of low yielding cash and bonds.
The current economic environment is unprecedented as companies’ fundamentals may be affected most by vaccines, fiscal stimulus, and continued central bank support. As economies look to recover, nearly every sector faces significant financial hardship with market volatility lingering for longer than many have felt in some time. Investors globally must now grapple with anticipating and planning for what may come next. Nonetheless we remain positive on global growth and company earnings with the re-opening gaining traction.
We think a thoughtful, active management approach is needed given today’s increased political, economic, and market uncertainty. The Multi-Asset team’s decisions are taken collectively, and the weightings assigned to individual asset classes reflect our unique asset class ranking methodology, highlighted by our distinctive pairwise approach, which includes assessment of one asset class versus another on a head-to-head basis. Vigilant and continuous assessment of the current market environment may offer opportunities to take advantage of market dislocations and has the potential to achieve attractive risk-adjusted returns through an active focus on portfolio risk and diversification.
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| Performance summary | |
| Delaware Strategic Allocation Fund | March 31, 2021 (Unaudited) |
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. Performance data current to the most recent month end may be obtained by calling 800 523-1918 or visiting delawarefunds.com/performance.
| Fund and benchmark performance1,2 | | Average annual total returns through March 31, 2021 |
| | 1 year | | 5 year | | 10 year | | Lifetime |
| Class A (Est. December 31, 1997) | | | | | | | | | |
| Excluding sales charge | | +35.37% | | +8.09% | �� | +6.39% | | +5.42% | |
| Including sales charge | | +27.54% | | +6.82% | | +5.76% | | +5.15% | |
| Class C (Est. December 31, 1997) | | | | | | | | | |
| Excluding sales charge | | +34.26% | | +7.26% | | +5.57% | | +4.64% | |
| Including sales charge | | +33.26% | | +7.26% | | +5.57% | | +4.64% | |
| Class R (Est. June 2, 2003) | | | | | | | | | |
| Excluding sales charge | | +34.94% | | +7.80% | | +6.10% | | +6.37% | |
| Including sales charge | | +34.94% | | +7.80% | | +6.10% | | +6.37% | |
| Institutional Class (Est. December 31, 1997) | | | | | | | | | |
| Excluding sales charge | | +35.54% | | +8.35% | | +6.63% | | +5.67% | |
| Including sales charge | | +35.54% | | +8.35% | | +6.63% | | +5.67% | |
| Bloomberg Barclays US Aggregate Index | | +0.71% | | +3.10% | | +3.44% | | +4.82% | * |
| S&P 500 Index | | +56.35% | | +16.29% | | +19.91% | | +8.27% | * |
| * | The benchmark lifetime returns are for Institutional Class share comparison only and are calculated using the last business day in the month of the Fund’s Institutional Class inception date. |
| 1 | Returns reflect the reinvestment of all distributions and are presented both with and without the applicable sales charges described below. Returns do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares. |
Expense limitations were in effect for certain classes during some or all of the periods shown in the “Fund and benchmark performance” table. Expenses for each class are listed on the “Fund expense ratios” table on page 7. Performance would have been lower had expense limitations not been in effect.
Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. In addition, Institutional Class shares pay no distribution and service (12b-1) fee.
Class A shares are sold with a maximum front-end sales charge of 5.75%, and have an annual 12b-1 fee of 0.25% of average daily net assets. In connection with the merger with Delaware Balanced Fund, the Board has adopted a formula for calculating 12b-1 plan fees for the Fund’s Class A shares. The Fund’s Class A shares are currently subject to a blended 12b-1 fee equal to the sum of: (i) 0.10% of average daily net assets representing shares acquired prior to June 1, 1992, and (ii) 0.25% of average daily net assets representing shares acquired on or after June 1, 1992. All Class A shares currently bear
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Performance summary
Delaware Strategic Allocation Fund
12b-1 fees at the same rate, the blended rate, currently 0.25% of average daily net assets, based on the formula described above. This method of calculating Class A 12b-1 fees may be discontinued at the sole discretion of the Board. Performance for Class A shares, excluding sales charges, assumes that no front-end sales charge applied.
Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual 12b-1 fee of 1.00% of average daily net assets. Performance for Class C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.
Class R shares are available only for certain retirement plan products. They are sold without a sales charge and have an annual 12b-1 fee of 0.50% of average daily net assets.
This Fund is subject to the same risks as the underlying investment styles in which it invests.
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.
If and when the Fund invests in forward foreign currency contracts or uses other investments to hedge against currency risks, the Fund will be subject to special risks, including counterparty risk.
International investments entail risks including fluctuation in currency values, differences in accounting principles, or economic or political instability. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility, lower trading volume, and higher risk of market closures. In many emerging markets, there is substantially less publicly available information and the available information may be incomplete or misleading. Legal claims are generally more difficult to pursue.
Risk controls and asset allocation models do not promise any level of performance or guarantee against loss of principal.
Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors.
REIT investments are subject to many of the risks associated with direct real estate ownership, including changes in economic conditions, credit risk, and interest rate fluctuations.
The Fund may experience portfolio turnover in excess of 100%, which could result in higher transaction costs and tax liability.
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 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.
The disruptions caused by natural disasters, pandemics, or similar events could prevent the Fund from executing advantageous investment decisions in a timely manner and could negatively impact the Fund’s ability to achieve its investment objective and the value of the Fund’s investments.
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| 2 | The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Management Company has agreed to reimburse certain expenses and/or waive certain fees in order to prevent total annual fund operating 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 (collectively, nonroutine expenses)) from exceeding 0.90% of the Fund’s average daily net assets from April 1, 2020 to March 31, 2021.* Please see the most recent prospectus and any applicable supplement(s) for additional information on these fee waivers and/or reimbursements. Please see the “Financial highlights” section in this report for the most recent expense ratios. |
| | | | | | | | Institutional |
| Fund expense ratios | | Class A | | Class C | | Class R | | Class |
| Total annual operating expenses | | | | | | | | |
| (without fee waivers) | | 1.18% | | 1.94% | | 1.44% | | 0.94% |
| Net expenses (including fee | | | | | | | | |
| waivers, if any) | | 1.14% | | 1.90% | | 1.40% | | 0.90% |
| Type of waiver | | Contractual | | Contractual | | Contractual | | Contractual |
| * | The aggregate contractual waiver period covering this report is from July 26, 2019 through July 29, 2021. |
Performance of a $10,000 investment1
Average annual total returns from March 31, 2011 through March 31, 2021
| For period beginning March 31, 2011 through March 31, 2021 | | Starting value | | Ending value |
 | S&P 500 Index | | | $10,000 | | | | $36,788 | |
 | Delaware Strategic Allocation Fund – Institutional Class shares | | | $10,000 | | | | $19,005 | |
 | Delaware Strategic Allocation Fund – Class A shares | | | $9,425 | | | | $17,500 | |
 | Bloomberg Barclays US Aggregate Index | | | $10,000 | | | | $14,025 | |
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Performance summary
Delaware Strategic Allocation Fund
| 1 | The “Performance of a $10,000 investment” graph assumes $10,000 invested in Institutional Class and Class A shares of the Fund on March 31, 2011, and includes the effect of a 5.75% front-end sales charge (for Class A shares) and the reinvestment of all distributions. The graph does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares. Expense limitations were in effect for some or all of the periods shown. Performance would have been lower had expense limitations not been in effect. Expenses are listed in the “Fund expense ratios” table on page 7. Please note additional details on pages 5 through 8. |
The graph also assumes $10,000 invested in the Bloomberg Barclays US Aggregate Index and the S&P 500 Index as of March 31, 2011.
The S&P 500 Index measures the performance of 500 mostly large-cap stocks weighted by market value, and is often used to represent performance of the US stock market.
The Bloomberg Barclays US Aggregate Index is a broad composite that tracks the investment grade domestic bond market.
Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund classes will vary due to different charges and expenses.
| | Nasdaq symbols | | CUSIPs |
| Class A | | DFBAX | | 245918503 |
| Class C | | DFBCX | | 245918701 |
| Class R | | DFBRX | | 245918834 |
| Institutional Class | | DFFIX | | 245918800 |
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Disclosure of Fund expenses
For the six-month period from October 1, 2020 to March 31, 2021 (Unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period from October 1, 2020 to March 31, 2021.
Actual expenses
The first section of the table shown, “Actual Fund return,” provides information about actual account values and actual expenses. You may use the information in this section of the table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The second section of the table shown, “Hypothetical 5% return,” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The Fund’s expenses shown in the table reflect fee waivers in effect and assume reinvestment of all dividends and distributions.
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Disclosure of Fund expenses
For the six-month period from October 1, 2020 to March 31, 2021 (Unaudited)
Delaware Strategic Allocation Fund
Expense analysis of an investment of $1,000
| | Beginning | | Ending | | | | | | | Expenses |
| | Account Value | | Account Value | | Annualized | | Paid During Period |
| | 10/1/20 | | 3/31/21 | | Expense Ratio | | 10/1/20 to 3/31/21* |
| Actual Fund return† | | | | | | | | | | | | | | | | | | | | |
| Class A | | | $ | 1,000.00 | | | | $ | 1,145.30 | | | | 1.14 | % | | | | $ | 6.10 | |
| Class C | | | | 1,000.00 | | | | | 1,140.50 | | | | 1.90 | % | | | | | 10.14 | |
| Class R | | | | 1,000.00 | | | | | 1,142.60 | | | | 1.40 | % | | | | | 7.48 | |
| Institutional Class | | | | 1,000.00 | | | | | 1,145.60 | | | | 0.90 | % | | | | | 4.81 | |
| Hypothetical 5% return (5% return before expenses) | | | | | | | | | | | |
| Class A | | | $ | 1,000.00 | | | | $ | 1,019.25 | | | | 1.14 | % | | | | $ | 5.74 | |
| Class C | | | | 1,000.00 | | | | | 1,015.46 | | | | 1.90 | % | | | | | 9.55 | |
| Class R | | | | 1,000.00 | | | | | 1,017.95 | | | | 1.40 | % | | | | | 7.04 | |
| Institutional Class | | | | 1,000.00 | | | | | 1,020.44 | | | | 0.90 | % | | | | | 4.53 | |
| * | “Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period). |
| † | Because actual returns reflect only the most recent six-month period, the returns shown may differ significantly from fiscal year returns. |
In addition to the Fund’s expenses reflected above, the Fund also indirectly bears its portion of the fees and expenses of the investment companies, including exchange-traded funds (Underlying Funds) in which it invests. The table above does not reflect the expenses of the Underlying Funds.
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Security type / sector allocation, country
allocation and top 10 equity holdings |
| Delaware Strategic Allocation Fund | March 31, 2021 (Unaudited) |
Sector designations may be different from the sector designations presented in other Fund materials. The sector designations may represent the investment manager’s internal sector classifications.
| Security type / sector | | Percentage of net assets |
| Common Stock | | | 58.07 | % | |
| US Markets | | | 27.09 | % | |
| Communication Services | | | 2.20 | % | |
| Consumer Discretionary | | | 3.06 | % | |
| Consumer Staples | | | 1.37 | % | |
| Energy | | | 0.62 | % | |
| Financials | | | 3.90 | % | |
| Healthcare | | | 4.29 | % | |
| Industrials | | | 3.59 | % | |
| Information Technology | | | 5.43 | % | |
| Materials | | | 1.17 | % | |
| Real Estate | | | 0.92 | % | |
| Utilities | | | 0.54 | % | |
| Developed Markets | | | 22.12 | % | |
| Communication Services | | | 0.89 | % | |
| Consumer Discretionary | | | 2.13 | % | |
| Consumer Staples | | | 2.41 | % | |
| Energy | | | 0.43 | % | |
| Financials | | | 4.34 | % | |
| Healthcare | | | 2.98 | % | |
| Industrials | | | 3.74 | % | |
| Information Technology | | | 2.04 | % | |
| Materials | | | 1.74 | % | |
| Real Estate | | | 0.57 | % | |
| Utilities | | | 0.85 | % | |
| Emerging Markets | | | 8.86 | % | |
| Communication Services | | | 1.96 | % | |
| Consumer Discretionary | | | 1.29 | % | |
| Consumer Staples | | | 0.53 | % | |
| Energy | | | 0.96 | % | |
| Financials | | | 0.54 | % | |
| Healthcare | | | 0.05 | % | |
| Information Technology | | | 3.18 | % | |
| Materials | | | 0.29 | % | |
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Security type / sector allocation, country
allocation and top 10 equity holdings
Delaware Strategic Allocation Fund
| Security type / sector | | Percentage of net assets |
| Real Estate | | | 0.02 | % | |
| Utilities | | | 0.04 | % | |
| Exchange-Traded Funds | | | 7.87 | % | |
| Agency Collateralized Mortgage Obligations | | | 0.70 | % | |
| Agency Commercial Mortgage-Backed Securities | | | 0.19 | % | |
| Agency Mortgage-Backed Securities | | | 9.98 | % | |
| Collateralized Debt Obligations | | | 1.23 | % | |
| Corporate Bonds | | | 9.16 | % | |
| Banking | | | 2.31 | % | |
| Basic Industry | | | 0.30 | % | |
| Capital Goods | | | 0.16 | % | |
| Communications | | | 1.96 | % | |
| Consumer Cyclical | | | 0.38 | % | |
| Consumer Non-Cyclical | | | 0.72 | % | |
| Energy | | | 0.83 | % | |
| Financials | | | 0.38 | % | |
| Real Estate | | | 0.21 | % | |
| Technology | | | 0.65 | % | |
| Transportation | | | 0.06 | % | |
| Utilities | | | 1.20 | % | |
| Loan Agreements | | | 1.02 | % | |
| Municipal Bonds | | | 0.31 | % | |
| Non-Agency Asset-Backed Securities | | | 0.60 | % | |
| Non-Agency Collateralized Mortgage Obligations | | | 0.94 | % | |
| Non-Agency Commercial Mortgage-Backed Securities | | | 1.31 | % | |
| Rights | | | 0.00 | % | |
| Sovereign Bonds | | | 3.56 | % | |
| Preferred Stock | | | 0.30 | % | |
| US Treasury Obligations | | | 2.34 | % | |
| Short-Term Investments | | | 2.56 | % | |
| Total Value of Securities | | | 100.14 | % | |
| Liabilities Net of Receivables and Other Assets | | | (0.14 | )% | |
| Total Net Assets | | | 100.00 | % | |
| | Percentage |
| Country/Market* | | of net assets |
| Developed Markets | | | 28.40 | % | |
| Australia | | | 2.34 | % | |
| Austria | | | 0.35 | % | |
| Belgium | | | 0.41 | % | |
12
Table of Contents
| | Percentage |
| Country/Market* | | of net assets |
| Canada | | | 0.19 | % | |
| Cayman Islands | | | 1.23 | % | |
| Denmark | | | 0.52 | % | |
| Finland | | | 0.22 | % | |
| France | | | 2.76 | % | |
| Germany | | | 2.75 | % | |
| Hong Kong | | | 0.49 | % | |
| Ireland | | | 0.31 | % | |
| Israel | | | 0.30 | % | |
| Italy | | | 0.75 | % | |
| Japan | | | 6.56 | % | |
| Netherlands | | | 1.46 | % | |
| Portugal | | | 0.10 | % | |
| Singapore | | | 0.61 | % | |
| South Africa | | | 0.15 | % | |
| Spain | | | 0.85 | % | |
| Sweden | | | 0.54 | % | |
| Switzerland | | | 2.20 | % | |
| United Kingdom | | | 3.26 | % | |
| United States | | | 0.05 | % | |
| Emerging Markets | | | 9.35 | % | |
| Argentina | | | 0.02 | % | |
| Brazil | | | 0.57 | % | |
| Chile | | | 0.08 | % | |
| China | | | 2.24 | % | |
| China/Hong Kong | | | 0.64 | % | |
| Colombia | | | 0.02 | % | |
| India | | | 0.76 | % | |
| Indonesia | | | 0.13 | % | |
| Malaysia | | | 0.00 | % | |
| Mexico | | | 0.35 | % | |
| Peru | | | 0.05 | % | |
| Philippines | | | 0.08 | % | |
| Republic of Korea | | | 2.14 | % | |
| Russia | | | 0.48 | % | |
| Taiwan | | | 1.67 | % | |
| Turkey | | | 0.12 | % | |
| US Markets | | | 59.83 | % | |
| Total | | | 97.58 | % | |
13
Table of Contents
Security type / sector allocation, country allocation and top 10 equity holdings
Delaware Strategic Allocation Fund
Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.
| Top 10 equity holdings | | Percentage of net assets |
| Taiwan Semiconductor Manufacturing | | 0.89% |
| Samsung Electronics | | 0.80% |
| Tencent Holdings | | 0.78% |
| SK Hynix | | 0.65% |
| Microsoft | | 0.64% |
| Reliance Industries GDR | | 0.60% |
| Nestle | | 0.57% |
| Alphabet Class A | | 0.56% |
| MediaTek | | 0.55% |
| Alibaba Group Holding ADR | | 0.55% |
| * | Allocation includes all investments except for short-term. |
14
Table of Contents
| Schedule of investments | |
| Delaware Strategic Allocation Fund | March 31, 2021 |
| | | Number of shares | | Value (US $) |
| Common Stock – 58.07% | | | | | |
| US Markets – 27.09% | | | | | |
| Communication Services - 2.20% | | | | | |
| | Alphabet Class A † | | 685 | | $ | 1,412,826 |
| AT&T | | 8,828 | | | 267,224 |
| ATN International | | 1,138 | | | 55,899 |
| Bumble Class A † | | 24 | | | 1,497 |
| Century Communications =,† | | 25,000 | | | 0 |
| Cinemark Holdings | | 5,876 | | | 119,929 |
| Comcast Class A | | 20,332 | | | 1,100,164 |
| Facebook Class A † | | 1,671 | | | 492,160 |
| Nexstar Media Group Class A | | 535 | | | 75,130 |
| Upwork † | | 1,145 | | | 51,262 |
| Verizon Communications | | 11,300 | | | 657,095 |
| Walt Disney † | | 6,476 | | | 1,194,951 |
| Yelp † | | 2,947 | | | 114,933 |
| | | | | | 5,543,070 |
| Consumer Discretionary – 3.06% | | | | | |
| Amazon.com † | | 407 | | | 1,259,291 |
| American Eagle Outfitters | | 9,193 | | | 268,803 |
| Aramark | | 3,898 | | | 147,266 |
| At Home Group † | | 2,748 | | | 78,868 |
| BorgWarner | | 3,454 | | | 160,128 |
| Brinker International | | 1,620 | | | 115,117 |
| Children’s Place † | | 799 | | | 55,690 |
| Chuy’s Holdings † | | 1,888 | | | 83,676 |
| Dana | | 5,089 | | | 123,815 |
| Dick’s Sporting Goods | | 1,375 | | | 104,706 |
| Dollar Tree † | | 6,000 | | | 686,760 |
| DR Horton | | 1,850 | | | 164,872 |
| Five Below † | | 1,319 | | | 251,652 |
| Hibbett Sports † | | 1,144 | | | 78,810 |
| Home Depot | | 1,866 | | | 569,597 |
| Jack in the Box | | 1,432 | | | 157,205 |
| KB Home | | 3,559 | | | 165,600 |
| La-Z-Boy | | 2,007 | | | 85,257 |
| Lowe’s | | 3,700 | | | 703,666 |
| Malibu Boats Class A † | | 2,025 | | | 161,352 |
| NIKE Class B | | 2,860 | | | 380,065 |
| Sonic Automotive Class A | | 959 | | | 47,538 |
| Starbucks | | 3,072 | | | 335,678 |
| Steven Madden | | 5,651 | | | 210,556 |
| Taylor Morrison Home † | | 5,385 | | | 165,912 |
| Texas Roadhouse † | | 3,828 | | | 367,258 |
15
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| US Markets (continued) | | | | | |
| Consumer Discretionary (continued) | | | | | |
| | Toll Brothers | | 2,898 | | $ | 164,404 |
| Tractor Supply | | 1,943 | | | 344,067 |
| Waste Management | | 1,057 | | | 136,374 |
| Wendy’s | | 5,919 | | | 119,919 |
| | | | | | 7,693,902 |
| Consumer Staples – 1.37% | | | | | |
| Archer-Daniels-Midland | | 12,100 | | | 689,700 |
| BJ’s Wholesale Club Holdings † | | 3,748 | | | 168,135 |
| Casey’s General Stores | | 1,277 | | | 276,074 |
| Conagra Brands | | 17,798 | | | 669,205 |
| General Mills | | 3,113 | | | 190,889 |
| Helen of Troy † | | 789 | | | 166,211 |
| J & J Snack Foods | | 1,022 | | | 160,484 |
| Mondelez International Class A | | 11,273 | | | 659,809 |
| PepsiCo | | 2,324 | | | 328,730 |
| YETI Holdings † | | 2,018 | | | 145,720 |
| | | | | | 3,454,957 |
| Energy – 0.62% | | | | | |
| Chevron | | 4,449 | | | 466,211 |
| ConocoPhillips | | 16,507 | | | 874,376 |
| Earthstone Energy Class A † | | 2,438 | | | 17,431 |
| Patterson-UTI Energy | | 6,414 | | | 45,732 |
| PDC Energy † | | 4,811 | | | 165,498 |
| | | | | | 1,569,248 |
| Financials – 3.90% | | | | | |
| American Equity Investment Life Holding | | 2,803 | | | 88,379 |
| American International Group | | 15,200 | | | 702,392 |
| Axis Capital Holdings | | 2,824 | | | 139,986 |
| BlackRock | | 395 | | | 297,814 |
| Bryn Mawr Bank | | 1,304 | | | 59,345 |
| Capital One Financial | | 1,615 | | | 205,476 |
| City Holding | | 1,142 | | | 93,393 |
| Comerica | | 1,748 | | | 125,401 |
| Discover Financial Services | | 6,498 | | | 617,245 |
| East West Bancorp | | 3,568 | | | 263,318 |
| Enterprise Financial Services | | 1,049 | | | 51,862 |
| Essent Group | | 5,959 | | | 282,993 |
| First Bancorp (North Carolina) | | 2,344 | | | 101,964 |
| First Financial Bancorp | | 4,581 | | | 109,944 |
| First Foundation | | 1,235 | | | 28,973 |
16
Table of Contents
| | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| US Markets (continued) | | | | | |
| Financials (continued) | | | | | |
| | First Interstate BancSystem Class A | | 2,583 | | $ | 118,921 |
| Great Western Bancorp | | 2,717 | | | 82,298 |
| Hamilton Lane Class A | | 1,362 | | | 120,619 |
| Independent Bank | | 1,509 | | | 127,043 |
| Independent Bank Group | | 1,768 | | | 127,720 |
| Intercontinental Exchange | | 2,027 | | | 226,375 |
| JPMorgan Chase & Co. | | 5,016 | | | 763,586 |
| Kemper | | 651 | | | 51,898 |
| KeyCorp | | 8,909 | | | 178,002 |
| Lakeland Financial | | 360 | | | 24,908 |
| MetLife | | 11,813 | | | 718,112 |
| NMI Holdings Class A † | | 3,810 | | | 90,068 |
| Old National Bancorp | | 6,964 | | | 134,684 |
| Pacific Premier Bancorp | | 3,785 | | | 164,420 |
| Primerica | | 310 | | | 45,824 |
| Raymond James Financial | | 1,546 | | | 189,478 |
| Reinsurance Group of America | | 1,236 | | | 155,798 |
| RLI | | 741 | | | 82,673 |
| Selective Insurance Group | | 1,802 | | | 130,717 |
| South State | | 1,939 | | | 152,231 |
| State Street | | 2,611 | | | 219,350 |
| Stifel Financial | | 3,161 | | | 202,494 |
| Travelers | | 933 | | | 140,323 |
| Truist Financial | | 12,200 | | | 711,504 |
| Umpqua Holdings | | 5,885 | | | 103,282 |
| United Community Banks | | 4,283 | | | 146,136 |
| US Bancorp | | 17,586 | | | 972,682 |
| Valley National Bancorp | | 7,874 | | | 108,189 |
| Webster Financial | | 1,278 | | | 70,431 |
| WesBanco | | 3,260 | | | 117,556 |
| WSFS Financial | | 3,058 | | | 152,258 |
| | | | | | 9,798,065 |
| Healthcare – 4.29% | | | | | |
| Abbott Laboratories | | 2,816 | | | 337,469 |
| Agios Pharmaceuticals † | | 2,082 | | | 107,514 |
| Amicus Therapeutics † | | 10,659 | | | 105,311 |
| AtriCure † | | 1,415 | | | 92,711 |
| Becton Dickinson and Co. | | 930 | | | 226,129 |
| Blueprint Medicines † | | 1,462 | | | 142,150 |
| Cardinal Health | | 11,100 | | | 674,325 |
| Catalent † | | 1,251 | | | 131,743 |
17
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| US Markets (continued) | | | | | |
| Healthcare (continued) | | | | | |
| | ChemoCentryx † | | 2,361 | | $ | 120,978 |
| Cigna | | 4,350 | | | 1,051,569 |
| CONMED | | 1,442 | | | 188,311 |
| CryoLife † | | 4,353 | | | 98,291 |
| CVS Health | | 8,600 | | | 646,978 |
| Dexcom † | | 530 | | | 190,477 |
| Edwards Lifesciences † | | 2,484 | | | 207,762 |
| Exact Sciences † | | 1,374 | | | 181,066 |
| GenMark Diagnostics † | | 5,226 | | | 124,901 |
| Halozyme Therapeutics † | | 3,878 | | | 161,674 |
| Insmed † | | 530 | | | 18,052 |
| Intercept Pharmaceuticals † | | 1,382 | | | 31,897 |
| Johnson & Johnson | | 6,852 | | | 1,126,126 |
| Ligand Pharmaceuticals † | | 913 | | | 139,187 |
| Merck & Co. | | 11,652 | | | 898,253 |
| Merit Medical Systems † | | 2,985 | | | 178,742 |
| Natera † | | 2,334 | | | 236,994 |
| Neurocrine Biosciences † | | 1,600 | | | 155,600 |
| NuVasive † | | 2,365 | | | 155,049 |
| Omnicell † | | 927 | | | 120,389 |
| Pfizer | | 7,891 | | | 285,891 |
| Prestige Consumer Healthcare † | | 3,304 | | | 145,640 |
| PTC Therapeutics † | | 2,333 | | | 110,467 |
| Quidel † | | 714 | | | 91,342 |
| Repligen † | | 634 | | | 123,256 |
| Shockwave Medical † | | 1,149 | | | 149,669 |
| Spectrum Pharmaceuticals † | | 7,749 | | | 25,262 |
| Supernus Pharmaceuticals † | | 3,871 | | | 101,343 |
| Tabula Rasa HealthCare † | | 2,663 | | | 122,631 |
| Teladoc Health † | | 724 | | | 131,587 |
| Thermo Fisher Scientific | | 703 | | | 320,835 |
| TransMedics Group † | | 1,900 | | | 78,831 |
| Travere Therapeutics † | | 5,599 | | | 139,807 |
| Ultragenyx Pharmaceutical † | | 1,772 | | | 201,760 |
| Vanda Pharmaceuticals † | | 6,978 | | | 104,810 |
| Vertex Pharmaceuticals † | | 1,108 | | | 238,098 |
| Viatris † | | 40,106 | | | 560,281 |
| | | | | | 10,781,158 |
| Industrials – 3.59% | | | | | |
| ABM Industries | | 2,832 | | | 144,460 |
| Allegiant Travel † | | 964 | | | 235,274 |
18
Table of Contents
| | | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| US Markets (continued) | | | | | |
| Industrials (continued) | | | | | |
| Ameresco Class A † | | 4,096 | | $ | 199,189 |
| Applied Industrial Technologies | | 1,762 | | | 160,642 |
| ASGN † | | 2,016 | | | 192,407 |
| Barnes Group | | 1,681 | | | 83,277 |
| BrightView Holdings † | | 5,800 | | | 97,846 |
| Carlisle | | 652 | | | 107,306 |
| Casella Waste Systems Class A † | | 1,146 | | | 72,851 |
| Caterpillar | | 3,188 | | | 739,202 |
| Columbus McKinnon | | 2,809 | | | 148,203 |
| Deere | | 314 | | | 117,480 |
| Eaton | | 1,154 | | | 159,575 |
| Emerson Electric | | 1,610 | | | 145,254 |
| ESCO Technologies | | 935 | | | 101,812 |
| Federal Signal | | 3,978 | | | 152,357 |
| Gates Industrial † | | 4,435 | | | 70,916 |
| Generac Holdings † | | 291 | | | 95,288 |
| Honeywell International | | 4,161 | | | 903,228 |
| Hub Group Class A † | | 2,372 | | | 159,588 |
| Ichor Holdings † | | 899 | | | 48,366 |
| Ingersoll Rand † | | 1,040 | | | 51,178 |
| Kadant | | 819 | | | 151,523 |
| Knight-Swift Transportation Holdings | | 2,413 | | | 116,041 |
| Lockheed Martin | | 411 | | | 151,865 |
| MasTec † | | 2,298 | | | 215,323 |
| MYR Group † | | 2,893 | | | 207,341 |
| Northrop Grumman | | 2,100 | | | 679,644 |
| Oshkosh | | 1,575 | | | 186,890 |
| Parker-Hannifin | | 1,138 | | | 358,959 |
| Quanta Services | | 1,291 | | | 113,582 |
| Raytheon Technologies | | 11,279 | | | 871,528 |
| Rexnord | | 3,507 | | | 165,145 |
| Rockwell Automation | | 462 | | | 122,633 |
| Southwest Airlines | | 2,468 | | | 150,696 |
| Tetra Tech | | 1,492 | | | 202,494 |
| Trane Technologies | | 1,690 | | | 279,796 |
| Union Pacific | | 1,402 | | | 309,015 |
| US Ecology † | | 2,689 | | | 111,970 |
| Werner Enterprises | | 2,362 | | | 111,416 |
| WESCO International † | | 2,175 | | | 188,203 |
| WillScot Mobile Mini Holdings † | | 5,737 | | | 159,202 |
| | | | | | 9,038,965 |
19
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| US Markets (continued) | | | | | |
| Information Technology – 5.43% | | | | | |
| Accenture Class A | | 1,348 | | $ | 372,385 |
| Activision Blizzard | | 766 | | | 71,238 |
| Adobe † | | 862 | | | 409,769 |
| Apple | | 10,921 | | | 1,334,000 |
| Bandwidth Class A † | | 338 | | | 42,838 |
| Blackline † | | 568 | | | 61,571 |
| Box Class A † | | 1,933 | | | 44,382 |
| Broadcom | | 2,153 | | | 998,260 |
| Brooks Automation | | 3,271 | | | 267,077 |
| Cisco Systems | | 19,168 | | | 991,177 |
| Cognizant Technology Solutions Class A | | 7,873 | | | 615,039 |
| ExlService Holdings † | | 1,846 | | | 166,435 |
| Fidelity National Information Services | | 4,631 | | | 651,165 |
| II-VI † | | 2,182 | | | 149,183 |
| Intel | | 5,488 | | | 351,232 |
| Intuit | | 526 | | | 201,490 |
| J2 Global † | | 1,634 | | | 195,851 |
| KBR | | 3,496 | | | 134,212 |
| MACOM Technology Solutions Holdings † | | 876 | | | 50,826 |
| MaxLinear † | | 3,856 | | | 131,413 |
| Microsoft | | 6,772 | | | 1,596,635 |
| Mimecast † | | 1,755 | | | 70,569 |
| Motorola Solutions | | 3,627 | | | 682,057 |
| NETGEAR † | | 1,994 | | | 81,953 |
| Oracle | | 10,200 | | | 715,734 |
| Plantronics † | | 310 | | | 12,062 |
| PTC † | | 1,894 | | | 260,709 |
| Q2 Holdings † | | 1,635 | | | 163,827 |
| Rapid7 † | | 2,463 | | | 183,764 |
| Roper Technologies | | 245 | | | 98,818 |
| salesforce.com † | | 1,451 | | | 307,423 |
| Semtech † | | 1,718 | | | 118,542 |
| ServiceNow † | | 513 | | | 256,557 |
| Silicon Laboratories † | | 960 | | | 135,427 |
| Sprout Social Class A † | | 850 | | | 49,096 |
| SS&C Technologies Holdings | | 4,109 | | | 287,096 |
| Texas Instruments | | 1,494 | | | 282,351 |
| Tyler Technologies † | | 908 | | | 385,473 |
| Uber Technologies † | | 1,445 | | | 78,767 |
20
Table of Contents
| | | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| US Markets (continued) | | | | | |
| Information Technology (continued) | | | | | |
| Varonis Systems † | | 1,992 | | $ | 102,269 |
| Visa Class A | | 2,634 | | | 557,697 |
| | | | | | 13,666,369 |
| Materials – 1.17% | | | | | |
| Balchem | | 700 | | | 87,787 |
| Boise Cascade | | 3,878 | | | 232,021 |
| Coeur Mining † | | 3,536 | | | 31,930 |
| Corteva | | 3,053 | | | 142,331 |
| Dow | | 2,287 | | | 146,231 |
| DuPont de Nemours | | 10,611 | | | 820,018 |
| Eastman Chemical | | 1,447 | | | 159,344 |
| Ferro † | | 5,615 | | | 94,669 |
| Kaiser Aluminum | | 1,399 | | | 154,590 |
| Minerals Technologies | | 2,504 | | | 188,601 |
| Neenah | | 2,356 | | | 121,051 |
| Quaker Chemical | | 586 | | | 142,849 |
| Reliance Steel & Aluminum | | 766 | | | 116,654 |
| Summit Materials Class A † | | 2,722 | | | 76,270 |
| Westrock | | 4,566 | | | 237,660 |
| Worthington Industries | | 2,797 | | | 187,651 |
| | | | | | 2,939,657 |
| Real Estate – 0.92% | | | | | |
| American Assets Trust | | 2,580 | | | 83,695 |
| American Tower | | 1,218 | | | 291,175 |
| Armada Hoffler Properties | | 5,663 | | | 71,014 |
| Brixmor Property Group | | 6,115 | | | 123,706 |
| Camden Property Trust | | 1,106 | | | 121,561 |
| Cousins Properties | | 1,508 | | | 53,308 |
| DiamondRock Hospitality † | | 7,045 | | | 72,564 |
| EastGroup Properties | | 948 | | | 135,829 |
| Equity Residential | | 10,045 | | | 719,523 |
| First Industrial Realty Trust | | 2,288 | | | 104,768 |
| Kite Realty Group Trust | | 5,527 | | | 106,616 |
| Lexington Realty Trust | | 7,713 | | | 85,691 |
| National Storage Affiliates Trust | | 2,316 | | | 92,478 |
| Pebblebrook Hotel Trust | | 3,334 | | | 80,983 |
| Physicians Realty Trust | | 6,533 | | | 115,438 |
| RPT Realty | | 5,854 | | | 66,794 |
| Spirit MTA REIT =,† | | 677 | | | 0 |
| | | | | | 2,325,143 |
21
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| US Markets (continued) | | | | | |
| Utilities – 0.54% | | | | | |
| Black Hills | | 3,039 | | $ | 202,914 |
| Edison International | | 10,700 | | | 627,020 |
| NorthWestern | | 2,120 | | | 138,224 |
| South Jersey Industries | | 10,364 | | | 234,019 |
| Spire | | 2,065 | | | 152,583 |
| | | | | | 1,354,760 |
| Total US Markets (cost $39,150,520) | | | | | 68,165,294 |
| Developed Markets – 22.12%§ | | | | | |
| Communication Services – 0.89% | | | | | |
| Nippon Telegraph & Telephone | | 20,860 | | | 535,418 |
| PCCW | | 630,000 | | | 354,948 |
| Telefonica | | 64,432 | | | 288,410 |
| Telenet Group Holding | | 8,200 | | | 332,526 |
| Toho | | 6,400 | | | 259,526 |
| Vodafone Group | | 260,000 | | | 472,705 |
| | | | | | 2,243,533 |
| Consumer Discretionary – 2.13% | | | | | |
| Cie Generale des Etablissements Michelin | | 3,690 | | | 552,375 |
| Honda Motor | | 17,200 | | | 515,573 |
| Industria de Diseno Textil | | 11,790 | | | 388,514 |
| LVMH Moet Hennessy Louis Vuitton | | 640 | | | 426,375 |
| McDonald’s Holdings Co. Japan | | 7,700 | | | 354,662 |
| Persimmon | | 10,500 | | | 425,574 |
| Sony | | 8,000 | | | 837,751 |
| Stanley Electric | | 11,100 | | | 330,318 |
| Toyota Motor | | 11,888 | | | 925,058 |
| Wesfarmers | | 15,040 | | | 601,683 |
| | | | | | 5,357,883 |
| Consumer Staples – 2.41% | | | | | |
| Beiersdorf | | 3,170 | | | 334,943 |
| British American Tobacco | | 13,710 | | | 524,303 |
| Chocoladefabriken Lindt & Spruengli † | | 50 | | | 436,439 |
| Coles Group | | 29,430 | | | 357,880 |
| Essity Class B | | 11,200 | | | 353,821 |
| Koninklijke Ahold Delhaize | | 13,940 | | | 388,252 |
| L’Oreal | | 1,770 | | | 678,332 |
| Matsumotokiyoshi Holdings | | 7,000 | | | 311,673 |
| Nestle | | 12,780 | | | 1,424,372 |
| Sundrug | | 9,700 | | | 354,798 |
22
Table of Contents
| | | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| Developed Markets § (continued) | | | | | |
| Consumer Staples (continued) | | | | | |
| Suntory Beverage & Food | | 5,900 | | $ | 219,269 |
| Tate & Lyle | | 32,230 | | | 340,884 |
| Wm Morrison Supermarkets | | 130,000 | | | 326,983 |
| | | | | | 6,051,949 |
| Energy – 0.43% | | | | | |
| Galp Energia | | 21,400 | | | 248,950 |
| Royal Dutch Shell Class A | | 23,120 | | | 450,624 |
| Royal Dutch Shell Class B | | 20,740 | | | 381,705 |
| | | | | | 1,081,279 |
| Financials – 4.34% | | | | | |
| AIA Group | | 73,000 | | | 885,492 |
| Allianz | | 3,170 | | | 806,875 |
| Aviva | | 75,000 | | | 422,058 |
| Banco Bilbao Vizcaya Argentaria | | 100,000 | | | 519,037 |
| Banco Espirito Santo =,† | | 370,000 | | | 0 |
| Bank Leumi Le-Israel † | | 63,000 | | | 414,585 |
| BNP Paribas † | | 11,300 | | | 687,488 |
| Credit Suisse Group † | | 38,390 | | | 402,198 |
| Dai-ichi Life Holdings | | 17,300 | | | 297,174 |
| Daiwa Securities Group | | 74,100 | | | 382,864 |
| DBS Group Holdings | | 27,900 | | | 597,116 |
| Erste Group Bank † | | 12,890 | | | 437,158 |
| Investec | | 122,450 | | | 370,031 |
| KBC Group † | | 6,540 | | | 475,506 |
| Medibank | | 210,000 | | | 446,615 |
| Ninety One † | | 98,000 | | | 322,626 |
| Nordea Bank † | | 57,070 | | | 561,980 |
| QBE Insurance Group | | 34,193 | | | 249,844 |
| Sompo Holdings | | 10,100 | | | 386,942 |
| Standard Chartered | | 70,610 | | | 486,228 |
| Swiss Life Holding † | | 880 | | | 432,575 |
| UBS Group | | 35,320 | | | 546,906 |
| UniCredit † | | 27,150 | | | 286,963 |
| United Overseas Bank | | 26,400 | | | 506,922 |
| | | | | | 10,925,183 |
| Healthcare – 2.98% | | | | | |
| Alfresa Holdings | | 14,200 | | | 273,548 |
| Astellas Pharma | | 25,100 | | | 385,822 |
| AstraZeneca | | 8,800 | | | 879,183 |
| Daiichi Sankyo | | 11,700 | | | 340,777 |
23
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| Developed Markets § (continued) | | | | | |
| Healthcare (continued) | | | | | |
| | GlaxoSmithKline | | 38,450 | | $ | 682,732 |
| Koninklijke Philips † | | 9,647 | | | 550,662 |
| Kyowa Kirin | | 9,700 | | | 289,971 |
| Nippon Shinyaku | | 4,700 | | | 349,343 |
| Novartis | | 11,740 | | | 1,003,269 |
| Novo Nordisk Class B | | 11,800 | | | 799,440 |
| Roche Holding | | 1,750 | | | 565,558 |
| Sanofi | | 7,290 | | | 720,252 |
| Smith & Nephew | | 19,790 | | | 375,953 |
| Sumitomo Dainippon Pharma | | 16,000 | | | 278,456 |
| | | | | | 7,494,966 |
| Industrials – 3.74% | | | | | |
| AGC | | 10,400 | | | 434,879 |
| ANDRITZ | | 10,140 | | | 455,908 |
| BAE Systems | | 71,400 | | | 497,082 |
| Brenntag | | 5,200 | | | 443,937 |
| Deutsche Lufthansa † | | 17,620 | | | 233,595 |
| Deutsche Post | | 10,630 | | | 582,402 |
| East Japan Railway | | 5,166 | | | 365,738 |
| Eiffage † | | 3,800 | | | 380,386 |
| Intertek Group | | 3,680 | | | 284,203 |
| ITOCHU | | 16,586 | | | 537,313 |
| Japan Airlines † | | 10,400 | | | 231,998 |
| Mitsubishi | | 20,700 | | | 585,153 |
| Miura | | 7,400 | | | 399,657 |
| Schneider Electric | | 4,250 | | | 649,163 |
| Siemens | | 4,940 | | | 811,039 |
| Teleperformance | | 750 | | | 273,356 |
| Vestas Wind Systems | | 2,250 | | | 461,830 |
| Vinci | | 5,040 | | | 516,333 |
| Volvo Class B † | | 21,990 | | | 556,205 |
| West Japan Railway | | 5,000 | | | 277,038 |
| Wolters Kluwer | | 4,870 | | | 423,303 |
| | | | | | 9,400,518 |
| Information Technology – 2.04% | | | | | |
| ASML Holding (New York Shares) | | 2,040 | | | 1,236,823 |
| Capgemini | | 2,580 | | | 439,010 |
| Computershare | | 35,100 | | | 400,969 |
| Nice † | | 1,560 | | | 336,909 |
| Obic | | 2,200 | | | 401,951 |
24
Table of Contents
| | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| Developed Markets § (continued) | | | | | |
| Information Technology (continued) | | | | | |
| | Omron | | 4,000 | | $ | 312,125 |
| SAP | | 7,070 | | | 865,745 |
| Tokyo Electron | | 1,700 | | | 718,383 |
| Venture | | 27,900 | | | 416,053 |
| | | | | | 5,127,968 |
| Materials – 1.74% | | | | | |
| BlueScope Steel | | 28,390 | | | 417,256 |
| Boliden | | 11,530 | | | 427,748 |
| Covestro 144A # | | 3,800 | | | 255,522 |
| CRH | | 12,400 | | | 581,223 |
| Givaudan † | | 140 | | | 539,470 |
| LANXESS | | 6,570 | | | 484,314 |
| Linde | | 507 | | | 142,031 |
| Rio Tinto | | 7,790 | | | 596,031 |
| Shin-Etsu Chemical | | 2,900 | | | 487,415 |
| South32 | | 209,460 | | | 447,058 |
| | | | | | 4,378,068 |
| Real Estate – 0.57% | | | | | |
| Daito Trust Construction | | 3,400 | | | 393,967 |
| Grand City Properties | | 10,190 | | | 255,248 |
| Klepierre | | 16,760 | | | 390,829 |
| Mirvac Group | | 204,620 | | | 388,548 |
| | | | | | 1,428,592 |
| Utilities – 0.85% | | | | | |
| AusNet Services | | 195,880 | | | 273,013 |
| Centrica † | | 370,000 | | | 276,158 |
| E.ON | | 48,000 | | | 558,618 |
| Enel | | 70,990 | | | 707,042 |
| Tokyo Gas | | 14,900 | | | 331,373 |
| | | | | | 2,146,204 |
| Total Developed Markets (cost $45,594,284) | | | | | 55,636,143 |
| Emerging Markets - 8.86%@ | | | | | |
| Communication Services – 1.96% | | | | | |
| America Movil ADR Class L | | 6,429 | | | 87,306 |
| Baidu ADR † | | 2,422 | | | 526,906 |
| Grupo Televisa ADR † | | 18,488 | | | 163,804 |
| iQIYI ADR † | | 1,826 | | | 30,348 |
| LG Uplus | | 8,694 | | | 94,103 |
| Mail.Ru Group GDR † | | 3,046 | | | 69,753 |
25
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| Emerging Markets @ (continued) | | | | | |
| Communication Services (continued) | | | | | |
| | NAVER | | 592 | | $ | 197,203 |
| SK Telecom ADR | | 42,555 | | | 1,158,773 |
| Sohu.com ADR † | | 8,688 | | | 136,575 |
| Telefonica Brasil ADR | | 9,422 | | | 74,151 |
| Tencent Holdings | | 24,900 | | | 1,953,795 |
| Tencent Music Entertainment Group ADR † | | 7 | | | 143 |
| TIM ADR | | 8,073 | | | 91,629 |
| Turkcell Iletisim Hizmetleri ADR | | 12,791 | | | 59,734 |
| Weibo ADR † | | 1,972 | | | 99,507 |
| Yandex Class A † | | 3,024 | | | 193,718 |
| | | | | | 4,937,448 |
| Consumer Discretionary – 1.29% | | | | | |
| Alibaba Group Holding ADR † | | 6,138 | | | 1,391,669 |
| Arcos Dorados Holdings Class A | | 8,245 | | | 41,967 |
| Astra International | | 312,200 | | | 113,381 |
| B2W Cia Digital † | | 40,090 | | | 433,475 |
| JD.com ADR † | | 11,936 | | | 1,006,563 |
| LG Electronics | | 1,067 | | | 141,418 |
| Trip.com Group ADR † | | 2,961 | | | 117,344 |
| | | | | | 3,245,817 |
| Consumer Staples – 0.53% | | | | | |
| BRF ADR † | | 25,034 | | | 112,403 |
| Cia Cervecerias Unidas ADR | | 3,537 | | | 62,499 |
| Coca-Cola Femsa ADR | | 5,174 | | | 239,039 |
| Fomento Economico Mexicano ADR | | 1,012 | | | 76,234 |
| Tata Consumer Products | | 13,320 | | | 116,396 |
| Tingyi Cayman Islands Holding | | 143,724 | | | 264,002 |
| Tsingtao Brewery Class H | | 29,400 | | | 260,565 |
| Uni-President China Holdings | | 163,600 | | | 199,078 |
| | | | | | 1,330,216 |
| Energy - 0.96% | | | | | |
| China Petroleum & Chemical Class H | | 246,200 | | | 131,111 |
| Gazprom PJSC ADR | | 50,460 | | | 300,943 |
| Petroleo Brasileiro ADR | | 13,098 | | | 111,071 |
| Reliance Industries GDR 144A # | | 27,156 | | | 1,501,727 |
| Rosneft Oil PJSC GDR | | 47,967 | | | 362,726 |
| | | | | | 2,407,578 |
| Financials – 0.54% | | | | | |
| Akbank TAS † | | 65,566 | | | 37,241 |
26
Table of Contents
| | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| Emerging Markets @ (continued) | | | | | |
| Financials (continued) | | | | | |
| | Banco Bradesco ADR | | 22,220 | | $ | 104,434 |
| Banco Santander Brasil ADR | | 11,302 | | | 79,679 |
| Banco Santander Mexico ADR † | | 30,062 | | | 165,341 |
| Grupo Financiero Banorte Class O † | | 14,685 | | | 82,803 |
| Itau Unibanco Holding ADR | | 29,636 | | | 146,995 |
| Ping An Insurance Group Co. of China Class H | | 31,000 | | | 369,052 |
| Samsung Life Insurance | | 1,972 | | | 136,084 |
| Sberbank of Russia PJSC = | | 60,901 | | | 233,793 |
| | | | | | 1,355,422 |
| Healthcare – 0.05% | | | | | |
| BeiGene ADR † | | 356 | | | 123,916 |
| Joinn Laboratories China Class H 144A #,† | | 100 | | | 1,729 |
| | | | | | 125,645 |
| Information Technology – 3.18% | | | | | |
| Hon Hai Precision Industry | | 133,582 | | | 580,527 |
| MediaTek | | 41,000 | | | 1,392,388 |
| Samsung Electronics | | 28,001 | | | 2,013,944 |
| SK Hynix | | 13,902 | | | 1,627,581 |
| Taiwan Semiconductor Manufacturing | | 109,069 | | | 2,243,840 |
| WNS Holdings ADR † | | 1,982 | | | 143,576 |
| Zhihu ADR † | | 500 | | | 4,055 |
| | | | | | 8,005,911 |
| Materials – 0.29% | | | | | |
| Cemex ADR † | | 12,322 | | | 85,884 |
| Cia de Minas Buenaventura ADR † | | 11,225 | | | 112,587 |
| Sociedad Quimica y Minera de Chile ADR | | 3,027 | | | 160,643 |
| Tata Chemicals | | 11,685 | | | 120,152 |
| Vale ADR | | 14,223 | | | 247,196 |
| | | | | | 726,462 |
| Real Estate – 0.02% | | | | | |
| Etalon Group GDR 144A #,† | | 20,100 | | | 32,461 |
| IRSA Inversiones y Representaciones ADR † | | 4,584 | | | 17,832 |
| IRSA Propiedades Comerciales ADR | | 221 | | | 2,177 |
| UEM Sunrise † | | 113,419 | | | 11,899 |
| | | | | | 64,369 |
27
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | Number of shares | | Value (US $) |
| Common Stock (continued) | | | | | |
| Emerging Markets @ (continued) | | | | | |
| Utilities – 0.04% | | | | | |
| | Kunlun Energy | | 86,000 | | $ | 90,380 |
| | | | | | 90,380 |
| Total Emerging Markets (cost $11,379,725) | | | | | 22,289,248 |
| Total Common Stock (cost $96,124,529) | | | | | 146,090,685 |
| | |
| Exchange-Traded Funds – 7.87% | | | | | |
| iShares MSCI EAFE ETF | | 12,350 | | | 936,994 |
| iShares Russell 1000 Growth ETF | | 51,170 | | | 12,436,357 |
| Vanguard FTSE Developed Markets ETF | | 21,500 | | | 1,055,865 |
| Vanguard Mega Cap Growth ETF | | 24,813 | | | 5,138,028 |
| Vanguard Russell 1000 Growth ETF | | 900 | | | 225,009 |
| Total Exchange-Traded Funds (cost $12,603,075) | | | | | 19,792,253 |
| | |
| | | Principal amount° | | | |
| Agency Collateralized Mortgage Obligations – 0.70% | | | | | |
| Fannie Mae REMICs | | | | | |
| Series 2013-44 DI 3.00% 5/25/33 Σ | | 411,123 | | | 44,209 |
| Freddie Mac REMICs | | | | | |
| Series 5092 WG 1.00% 4/25/31 = | | 330,000 | | | 331,908 |
| Freddie Mac Structured Agency Credit Risk REMIC | | | | | |
| Trust | | | | | |
| Series 2021-DNA1 M1 144A 0.667% (SOFR + | | | | | |
| 0.65%) 1/25/51 #,● | | 500,000 | | | 499,400 |
| Series 2021-HQA1 M1 144A 0.717% (SOFR + | | | | | |
| 0.70%) 8/25/33 #,● | | 400,000 | | | 399,502 |
| GNMA | | | | | |
| Series 2013-113 LY 3.00% 5/20/43 | | 450,000 | | | 476,162 |
| Series 2017-10 KZ 3.00% 1/20/47 | | 1,133 | | | 1,187 |
| Total Agency Collateralized Mortgage Obligations (cost $1,754,025) | | | | | 1,752,368 |
| |
| Agency Commercial Mortgage-Backed Securities – 0.19% | | | | | |
| Freddie Mac Multifamily Structured Pass Through | | | | | |
| Certificates | | | | | |
| Series K729 A2 3.136% 10/25/24 ◆ | | 100,000 | | | 107,725 |
| FREMF Mortgage Trust | | | | | |
| Series 2011-K15 B 144A 4.986% 8/25/44 #,● | | 20,000 | | | 20,198 |
| Series 2012-K22 B 144A 3.686% 8/25/45 #,● | | 145,000 | | | 150,644 |
28
Table of Contents
| | | | | Principal amount° | | Value (US $) |
| Agency Commercial Mortgage-Backed Securities (continued) | | | | | |
| FREMF Mortgage Trust | | | | | |
| | Series 2014-K717 B 144A 3.625% 11/25/47 #,● | | 140,000 | | $ | 141,472 |
| | Series 2014-K717 C 144A 3.625% 11/25/47 #,● | | 60,000 | | | 60,476 |
| Total Agency Commercial Mortgage-Backed Securities (cost $480,358) | | | | | 480,515 |
| | | | | | | |
| Agency Mortgage-Backed Securities – 9.98% | | | | | |
| Fannie Mae S.F. 30 yr | | | | | |
| | 2.00% 12/1/50 | | 65,172 | | | 65,134 |
| | 2.00% 1/1/51 | | 24,827 | | | 24,815 |
| | 2.00% 2/1/51 | | 1,183,188 | | | 1,182,148 |
| | 2.50% 7/1/50 | | 489,292 | | | 504,279 |
| | 2.50% 10/1/50 | | 842,870 | | | 867,182 |
| | 2.50% 11/1/50 | | 539,128 | | | 553,855 |
| | 2.50% 2/1/51 | | 1,569,744 | | | 1,612,323 |
| | 3.00% 12/1/46 | | 831,961 | | | 876,922 |
| | 3.00% 1/1/47 | | 277,402 | | | 293,516 |
| | 3.00% 11/1/49 | | 389,922 | | | 413,221 |
| | 3.00% 3/1/50 | | 319,878 | | | 338,414 |
| | 3.00% 7/1/50 | | 127,511 | | | 133,703 |
| | 3.00% 8/1/50 | | 425,334 | | | 450,942 |
| | 3.50% 7/1/47 | | 121,550 | | | 130,618 |
| | 3.50% 11/1/48 | | 66,888 | | | 70,747 |
| | 3.50% 3/1/50 | | 30,846 | | | 32,650 |
| | 3.50% 7/1/50 | | 479,628 | | | 513,731 |
| | 3.50% 9/1/50 | | 830,457 | | | 906,661 |
| | 4.00% 10/1/48 | | 515,207 | | | 567,315 |
| | 4.50% 4/1/44 | | 48,759 | | | 54,962 |
| | 4.50% 10/1/45 | | 291,336 | | | 323,837 |
| | 4.50% 5/1/46 | | 395,672 | | | 445,195 |
| | 4.50% 9/1/48 | | 1,050,891 | | | 1,160,541 |
| | 4.50% 9/1/49 | | 417,651 | | | 461,062 |
| | 5.00% 7/1/47 | | 626,843 | | | 728,517 |
| | 5.00% 8/1/49 | | 1,382,623 | | | 1,564,121 |
| | 5.50% 5/1/44 | | 2,381,365 | | | 2,786,966 |
| | 6.00% 10/1/38 | | 580,906 | | | 694,271 |
| | 6.00% 6/1/41 | | 29,004 | | | 34,646 |
| | 6.00% 7/1/41 | | 987,466 | | | 1,180,473 |
| | 6.00% 1/1/42 | | 35,303 | | | 42,176 |
| Fannie Mae S.F. 30 yr TBA | | | | | |
| | 2.00% 4/1/51 | | 1,452,000 | | | 1,449,278 |
| | 2.50% 4/1/51 | | 1,026,000 | | | 1,052,852 |
29
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | | | Principal amount° | | Value (US $) |
| Agency Mortgage-Backed Securities (continued) | | | | | |
| Freddie Mac S.F. 30 yr | | | | | |
| | 2.00% 11/1/50 | | 549,750 | | $ | 549,773 |
| | 2.00% 12/1/50 | | 112,601 | | | 111,488 |
| | 2.00% 4/1/51 | | 73,000 | | | 72,277 |
| | 2.50% 11/1/50 | | 214,588 | | | 221,181 |
| | 2.50% 2/1/51 | | 1,052,182 | | | 1,089,360 |
| | 3.00% 7/1/50 | | 596,593 | | | 622,621 |
| | 3.00% 12/1/50 | | 573,465 | | | 609,654 |
| | 4.50% 8/1/48 | | 150,699 | | | 165,444 |
| | 4.50% 1/1/49 | | 55,040 | | | 61,498 |
| | 5.50% 9/1/41 | | 35,287 | | | 41,414 |
| GNMA II S.F. 30 yr | | | | | |
| | 5.50% 5/20/37 | | 10,395 | | | 11,858 |
| | 6.50% 6/20/39 | | 21,486 | | | 25,265 |
| Total Agency Mortgage-Backed Securities (cost $24,990,629) | | | | | 25,098,906 |
| | | | | | | |
| Collateralized Debt Obligations – 1.23% | | | | | |
| Cedar Funding IX CLO | | | | | |
| | Series 2018-9A A1 144A 1.204% (LIBOR03M + | | | | | |
| | 0.98%, Floor 0.98%) 4/20/31 #,● | | 250,000 | | | 250,185 |
| Galaxy XXI CLO | | | | | |
| | Series 2015-21A AR 144A 1.244% (LIBOR03M + | | | | | |
| | 1.02%) 4/20/31 #,● | | 600,000 | | | 600,474 |
| Neuberger Berman Loan Advisers CLO 36 | | | | | |
| | Series 2020-36A A1R 144A 1.474% (LIBOR03M + | | | | | |
| | 1.25%, Floor 1.25%) 4/20/33 #,● | | 250,000 | | | 249,937 |
| Northwoods Capital XV | | | | | |
| | Series 2017-15A A 144A 1.487% (LIBOR03M + | | | | | |
| | 1.30%) 6/20/29 #,● | | 248,335 | | | 248,754 |
| Octagon Investment Partners 33 | | | | | |
| | Series 2017-1A A1 144A 1.414% (LIBOR03M + | | | | | |
| | 1.19%) 1/20/31 #,● | | 250,000 | | | 250,268 |
| Octagon Investment Partners 48 | | | | | |
| | Series 2020-3A A 144A 1.732% (LIBOR03M + | | | | | |
| | 1.50%, Floor 1.50%) 10/20/31 #,● | | 250,000 | | | 250,631 |
| Park Avenue Institutional Advisers CLO | | | | | |
| | Series 2021-1A A1A 144A 1.595% (LIBOR03M + | | | | | |
| | 1.39%, Floor 1.39%) 1/20/34 #,● | | 250,000 | | | 249,934 |
| Signal Peak CLO 5 | | | | | |
| | Series 2018-5A A 144A 1.328% (LIBOR03M + | | | | | |
| | 1.11%, Floor 1.11%) 4/25/31 #,● | | 250,000 | | | 250,437 |
| Sound Point CLO XXI | | | | | |
| | Series 2018-3A A1A 144A 1.395% (LIBOR03M + | | | | | |
| | 1.18%, Floor 1.18%) 10/26/31 #,● | | 250,000 | | | 250,427 |
30
Table of Contents
| | | | | Principal amount° | | Value (US $) |
| Collateralized Debt Obligations (continued) | | | | | |
| Venture 34 CLO | | | | | |
| | Series 2018-34A A 144A 1.471% (LIBOR03M + | | | | | |
| | 1.23%, Floor 1.23%) 10/15/31 #,● | | 250,000 | | $ | 250,427 |
| Venture 42 CLO | | | | | |
| | Series 2021-42A A1A 144A 1.13% (LIBOR03M + | | | | | |
| | 1.13%, Floor 1.13%) 4/15/34 #,● | | 250,000 | | | 249,937 |
| Total Collateralized Debt Obligations (cost $3,088,285) | | | | | 3,101,411 |
| | | | | | | |
| Corporate Bonds – 9.16% | | | | | |
| Banking – 2.31% | | | | | |
| Banco Santander 2.706% 6/27/24 | | 200,000 | | | 211,129 |
| Bank of America | | | | | |
| | 1.658% 3/11/27 µ | | 105,000 | | | 105,392 |
| | 1.898% 7/23/31 µ | | 115,000 | | | 108,115 |
| | 2.676% 6/19/41 µ | | 125,000 | | | 117,282 |
| | 2.831% 10/24/51 µ | | 20,000 | | | 18,397 |
| | 3.458% 3/15/25 µ | | 215,000 | | | 230,958 |
| Bank of Montreal 1.850% 5/1/25 | | 210,000 | | | 215,382 |
| BBVA USA 3.875% 4/10/25 | | 250,000 | | | 273,299 |
| Citizens Financial Group 2.850% 7/27/26 | | 345,000 | | | 366,283 |
| Credit Suisse Group 144A 5.100% 1/24/30 #,µ,ψ | | 200,000 | | | 193,300 |
| Goldman Sachs Group | | | | | |
| | 1.992% 1/27/32 µ | | 65,000 | | | 61,742 |
| | 2.600% 2/7/30 | | 70,000 | | | 70,906 |
| | 3.500% 4/1/25 | | 40,000 | | | 43,352 |
| JPMorgan Chase & Co. | | | | | |
| | 1.040% 2/4/27 µ | | 40,000 | | | 39,032 |
| | 1.953% 2/4/32 µ | | 45,000 | | | 42,687 |
| | 2.522% 4/22/31 µ | | 80,000 | | | 79,896 |
| | 3.109% 4/22/41 µ | | 45,000 | | | 44,841 |
| | 3.702% 5/6/30 µ | | 400,000 | | | 436,292 |
| | 4.023% 12/5/24 µ | | 75,000 | | | 81,400 |
| | 4.600% 2/1/25 µ,ψ | | 30,000 | | | 30,375 |
| | 5.000% 8/1/24 µ,ψ | | 50,000 | | | 51,727 |
| KeyBank 3.400% 5/20/26 | | 500,000 | | | 539,761 |
| Morgan Stanley | | | | | |
| | 1.413% (LIBOR03M + 1.22%) 5/8/24 ● | | 650,000 | | | 660,359 |
| | 1.794% 2/13/32 µ | | 5,000 | | | 4,671 |
| | 2.750% 5/19/22 | | 200,000 | | | 205,445 |
| | 5.000% 11/24/25 | | 30,000 | | | 34,515 |
| PNC Bank 2.700% 11/1/22 | | 250,000 | | | 258,785 |
| PNC Financial Services Group 2.600% 7/23/26 | | 175,000 | | | 185,000 |
31
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | | | Principal amount° | | Value (US $) |
| Corporate Bonds (continued) | | | | | |
| Banking (continued) | | | | | |
| Regions Financial 3.800% 8/14/23 | | 80,000 | | $ | 85,846 |
| Santander UK 144A 5.000% 11/7/23 # | | 90,000 | | | 98,646 |
| State Street 3.300% 12/16/24 | | 260,000 | | | 283,711 |
| SVB Financial Group | | | | | |
| | 1.800% 2/2/31 | | 45,000 | | | 41,583 |
| | 4.100% 2/15/31 µ,ψ | | 135,000 | | | 135,422 |
| Truist Bank | | | | | |
| | 2.450% 8/1/22 | | 85,000 | | | 87,303 |
| | 2.636% 9/17/29 µ | | 73,000 | | | 76,561 |
| Truist Financial 2.700% 1/27/22 | | 105,000 | | | 106,914 |
| USB Capital IX 3.500% (LIBOR03M + | | | | | |
| | 1.02%) 5/10/21 ψ,● | | 138,000 | | | 132,825 |
| Wells Fargo & Co. 3.900% 3/15/26 µ,ψ | | 50,000 | | | 50,526 |
| | | | | | | 5,809,660 |
| Basic Industry – 0.30% | | | | | |
| Georgia-Pacific 8.000% 1/15/24 | | 355,000 | | | 425,661 |
| LyondellBasell Industries 4.625% 2/26/55 | | 100,000 | | | 111,585 |
| Newmont | | | | | |
| | 2.250% 10/1/30 | | 80,000 | | | 77,997 |
| | 2.800% 10/1/29 | | 140,000 | | | 144,146 |
| | | | | | | 759,389 |
| Capital Goods – 0.16% | | | | | |
| Otis Worldwide | | | | | |
| | 3.112% 2/15/40 | | 60,000 | | | 59,235 |
| | 3.362% 2/15/50 | | 40,000 | | | 39,182 |
| Reynolds Group Issuer 144A 4.000% 10/15/27 # | | 100,000 | | | 98,125 |
| Teledyne Technologies | | | | | |
| | 2.250% 4/1/28 | | 115,000 | | | 114,519 |
| | 2.750% 4/1/31 | | 100,000 | | | 99,766 |
| | | | | | | 410,827 |
| Communications – 1.96% | | | | | |
| American Tower Trust #1 144A 3.070% 3/15/48 # | | 240,000 | | | 243,098 |
| AT&T | | | | | |
| | 3.100% 2/1/43 | | 59,000 | | | 55,179 |
| | 3.500% 6/1/41 | | 31,000 | | | 30,645 |
| | 144A 3.500% 9/15/53 # | | 85,000 | | | 78,699 |
| | 4.300% 2/15/30 | | 60,000 | | | 67,595 |
| CCO Holdings 144A 4.500% 8/15/30 # | | 250,000 | | | 255,114 |
| Charter Communications Operating | | | | | |
| | 3.700% 4/1/51 | | 110,000 | | | 103,064 |
32
Table of Contents
| | | | | | | Principal amount° | | Value (US $) |
| Corporate Bonds (continued) | | | | | | | |
| Communications (continued) | | | | | | | |
| Charter Communications Operating | | | | | | | |
| | 4.500% 2/1/24 | | | | 145,000 | | $ | 158,675 |
| | 5.050% 3/30/29 | | | | 250,000 | | | 287,635 |
| Comcast | | | | | | | |
| | 3.200% 7/15/36 | | | | 65,000 | | | 67,946 |
| | 3.700% 4/15/24 | | | | 550,000 | | | 600,840 |
| Discovery Communications | | | | | | | |
| | 144A 4.000% 9/15/55 # | | | | 20,000 | | | 19,723 |
| | 4.125% 5/15/29 | | | | 85,000 | | | 94,009 |
| | 5.200% 9/20/47 | | | | 35,000 | | | 41,558 |
| Gray Television 144A 4.750% 10/15/30 # | | | | 98,000 | | | 97,326 |
| Sprint Spectrum 144A 4.738% 3/20/25 # | | | | 220,000 | | | 236,241 |
| Time Warner Entertainment 8.375% 3/15/23 | | | | 575,000 | | | 659,528 |
| T-Mobile USA | | | | | | | |
| | 144A 1.500% 2/15/26 # | | | | 50,000 | | | 49,606 |
| | 144A 2.550% 2/15/31 # | | | | 40,000 | | | 39,238 |
| | 144A 3.000% 2/15/41 # | | | | 50,000 | | | 46,501 |
| | 144A 3.500% 4/15/25 # | | | | 65,000 | | | 70,192 |
| | 144A 3.750% 4/15/27 # | | | | 65,000 | | | 71,120 |
| | 144A 3.875% 4/15/30 # | | | | 155,000 | | | 168,424 |
| Turkcell Iletisim Hizmetleri 144A 5.800% 4/11/28 # | | | | 200,000 | | | 202,634 |
| Verizon Communications | | | | | | | |
| | 2.100% 3/22/28 | | | | 30,000 | | | 30,145 |
| | 2.550% 3/21/31 | | | | 60,000 | | | 59,998 |
| | 3.400% 3/22/41 | | | | 55,000 | | | 55,915 |
| | 3.550% 3/22/51 | | | | 55,000 | | | 55,024 |
| | 4.500% 8/10/33 | | | | 540,000 | | | 627,830 |
| ViacomCBS | | | | | | | |
| | 4.375% 3/15/43 | | | | 240,000 | | | 259,348 |
| | 4.950% 1/15/31 | | | | 45,000 | | | 53,134 |
| Vodafone Group 4.875% 6/19/49 | | | | 35,000 | | | 41,655 |
| | | | | | | | | 4,927,639 |
| Consumer Cyclical – 0.38% | | | | | | | |
| Allison Transmission 144A 3.750% 1/30/31 # | | | | 250,000 | | | 242,656 |
| Caesars Entertainment 144A 6.250% 7/1/25 # | | | | 103,000 | | | 109,929 |
| Faurecia 3.750% 6/15/28 | | EUR | | 100,000 | | | 124,696 |
| General Motors 5.000% 10/1/28 | | | | 4,000 | | | 4,587 |
| General Motors Financial | | | | | | | |
| | 3.450% 4/10/22 | | | | 440,000 | | | 450,411 |
| | 5.250% 3/1/26 | | | | 11,000 | | | 12,609 |
| | | | | | | | | 944,888 |
33
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | | | Principal amount° | | Value (US $) |
| Corporate Bonds (continued) | | | | | |
| Consumer Non-Cyclical – 0.72% | | | | | |
| AbbVie 2.950% 11/21/26 | | 190,000 | | $ | 202,443 |
| Amgen 2.450% 2/21/30 | | 115,000 | | | 115,976 |
| Anheuser-Busch InBev Worldwide 4.150% 1/23/25 | | 110,000 | | | 122,307 |
| Bristol-Myers Squibb 2.900% 7/26/24 | | 131,000 | | | 140,055 |
| Cigna | | | | | |
| | 1.131% (LIBOR03M + 0.89%) 7/15/23 ● | | 260,000 | | | 263,253 |
| | 3.200% 3/15/40 | | 45,000 | | | 45,126 |
| | 4.125% 11/15/25 | | 107,000 | | | 119,379 |
| CVS Health | | | | | |
| | 1.300% 8/21/27 | | 35,000 | | | 33,653 |
| | 1.875% 2/28/31 | | 20,000 | | | 18,802 |
| | 3.700% 3/9/23 | | 44,000 | | | 46,708 |
| | 3.750% 4/1/30 | | 55,000 | | | 60,065 |
| Energizer Holdings 144A 4.375% 3/31/29 # | | 100,000 | | | 100,500 |
| New York and Presbyterian Hospital 4.063% 8/1/56 | | 140,000 | | | 162,696 |
| Regeneron Pharmaceuticals 1.750% 9/15/30 | | 50,000 | | | 46,301 |
| Takeda Pharmaceutical 4.400% 11/26/23 | | 210,000 | | | 229,722 |
| Viatris | | | | | |
| | 144A 1.650% 6/22/25 # | | 20,000 | | | 20,091 |
| | 144A 2.300% 6/22/27 # | | 15,000 | | | 15,147 |
| | 144A 2.700% 6/22/30 # | | 30,000 | | | 29,660 |
| | 144A 4.000% 6/22/50 # | | 25,000 | | | 25,542 |
| | | | | | | 1,797,426 |
| Energy – 0.83% | | | | | |
| BP Capital Markets 4.875% 3/22/30 µ,ψ | | 70,000 | | | 75,162 |
| Chevron USA 3.900% 11/15/24 | | 200,000 | | | 220,321 |
| Ecopetrol 6.875% 4/29/30 | | 45,000 | | | 54,873 |
| Energy Transfer 5.250% 4/15/29 | | 40,000 | | | 45,561 |
| Energy Transfer Operating 7.125% 5/15/30 µ,ψ | | 135,000 | | | 131,868 |
| Kinder Morgan 3.600% 2/15/51 | | 75,000 | | | 70,006 |
| Marathon Oil | | | | | |
| | 2.800% 11/1/22 | | 55,000 | | | 56,429 |
| | 4.400% 7/15/27 | | 65,000 | | | 71,610 |
| MPLX | | | | | |
| | 1.750% 3/1/26 | | 40,000 | | | 40,089 |
| | 4.000% 3/15/28 | | 35,000 | | | 38,676 |
| | 4.125% 3/1/27 | | 160,000 | | | 177,755 |
| Occidental Petroleum 2.900% 8/15/24 | | 100,000 | | | 99,029 |
| ONEOK 7.500% 9/1/23 | | 330,000 | | | 376,472 |
| Sabine Pass Liquefaction 5.750% 5/15/24 | | 334,000 | | | 377,070 |
34
Table of Contents
| | | | | Principal amount° | | Value (US $) |
| Corporate Bonds (continued) | | | | | |
| Energy (continued) | | | | | |
| Schlumberger Holdings 144A 3.750% 5/1/24 # | | 95,000 | | $ | 102,529 |
| Tennessee Gas Pipeline 144A 2.900% 3/1/30 # | | 145,000 | | | 144,547 |
| | | | | | | 2,081,997 |
| Financials – 0.38% | | | | | |
| AerCap Ireland Capital DAC 3.650% 7/21/27 | | 200,000 | | | 210,036 |
| Air Lease | | | | | |
| | 2.875% 1/15/26 | | 115,000 | | | 119,405 |
| | 3.000% 2/1/30 | | 130,000 | | | 127,428 |
| Charles Schwab | | | | | |
| | 4.000% 6/1/26 µ,ψ | | 55,000 | | | 55,951 |
| | 4.000% 12/1/30 µ,ψ | | 45,000 | | | 44,291 |
| Jefferies Group | | | | | |
| | 4.150% 1/23/30 | | 75,000 | | | 82,500 |
| | 6.450% 6/8/27 | | 80,000 | | | 99,849 |
| | 6.500% 1/20/43 | | 65,000 | | | 83,275 |
| MetLife 6.400% 12/15/36 | | 110,000 | | | 138,347 |
| | | | | | | 961,082 |
| Real Estate – 0.21% | | | | | |
| American Tower 1.875% 10/15/30 | | 100,000 | | | 93,673 |
| CubeSmart | | | | | |
| | 3.000% 2/15/30 | | 43,000 | | | 43,738 |
| | 3.125% 9/1/26 | | 115,000 | | | 122,415 |
| Global Net Lease 144A 3.750% 12/15/27 # | | 140,000 | | | 136,621 |
| LifeStorage 3.500% 7/1/26 | | 130,000 | | | 141,362 |
| | | | | | | 537,809 |
| Technology – 0.65% | | | | | |
| International Business Machines 1.950% 5/15/30 | | 100,000 | | | 96,880 |
| Microchip Technology | | | | | |
| | 3.922% 6/1/21 | | 65,000 | | | 65,378 |
| | 4.333% 6/1/23 | | 185,000 | | | 198,539 |
| NXP | | | | | |
| | 144A 2.700% 5/1/25 # | | 10,000 | | | 10,496 |
| | 144A 3.400% 5/1/30 # | | 25,000 | | | 26,439 |
| | 144A 4.300% 6/18/29 # | | 12,000 | | | 13,444 |
| | 144A 4.875% 3/1/24 # | | 370,000 | | | 411,403 |
| Oracle | | | | | |
| | 2.875% 3/25/31 | | 80,000 | | | 81,504 |
| | 2.950% 4/1/30 | | 95,000 | | | 98,034 |
| | 3.650% 3/25/41 | | 45,000 | | | 45,600 |
35
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | | | Principal amount° | | Value (US $) |
| Corporate Bonds (continued) | | | | | |
| Technology (continued) | | | | | |
| Oracle | | | | | |
| | 3.950% 3/25/51 | | 45,000 | | $ | 46,470 |
| Tencent Holdings 144A 3.280% 4/11/24 # | | 500,000 | | | 533,140 |
| | | | | | | 1,627,327 |
| Transportation – 0.06% | | | | | |
| United Airlines 2014-1 | | | | | |
| | Class A Pass Through Trust 4.000% 4/11/26 ◆ | | 48,764 | | | 50,558 |
| United Airlines 2014-2 | | | | | |
| | Class A Pass Through Trust 3.750% 9/3/26 ◆ | | 107,020 | | | 111,292 |
| | | | | | | 161,850 |
| Utilities – 1.20% | | | | | |
| American Transmission Systems 144A 5.250% | | | | | |
| | 1/15/22 # | | 40,000 | | | 41,261 |
| Atlantic City Electric 4.000% 10/15/28 | | 75,000 | | | 83,848 |
| CenterPoint Energy 3.850% 2/1/24 | | 164,000 | | | 177,768 |
| Duke Energy 4.875% 9/16/24 µ,ψ | | 130,000 | | | 137,670 |
| Entergy Arkansas 4.200% 4/1/49 | | 190,000 | | | 213,201 |
| Entergy Louisiana | | | | | |
| | 4.000% 3/15/33 | | 90,000 | | | 102,652 |
| | 4.050% 9/1/23 | | 25,000 | | | 26,893 |
| | 4.950% 1/15/45 | | 15,000 | | | 16,277 |
| Evergy 4.850% 6/1/21 | | 60,000 | | | 60,000 |
| Evergy Metro 3.650% 8/15/25 | | 270,000 | | | 295,664 |
| Exelon 3.950% 6/15/25 | | 35,000 | | | 38,282 |
| LG&E and KU Energy 4.375% 10/1/21 | | 485,000 | | | 489,283 |
| NextEra Energy Capital Holdings | | | | | |
| | 2.250% 6/1/30 | | 85,000 | | | 83,233 |
| | 3.150% 4/1/24 | | 45,000 | | | 47,990 |
| NiSource | | | | | |
| | 0.950% 8/15/25 | | 45,000 | | | 44,172 |
| | 5.650% 6/15/23 µ,ψ | | 120,000 | | | 124,050 |
| Pacific Gas and Electric | | | | | |
| | 2.100% 8/1/27 | | 30,000 | | | 29,415 |
| | 2.500% 2/1/31 | | 45,000 | | | 42,494 |
| | 3.250% 6/1/31 | | 25,000 | | | 24,943 |
| | 3.300% 8/1/40 | | 20,000 | | | 18,165 |
| PacifiCorp | | | | | |
| | 2.700% 9/15/30 | | 20,000 | | | 20,534 |
| | 3.300% 3/15/51 | | 30,000 | | | 29,656 |
| | 3.500% 6/15/29 | | 255,000 | | | 278,111 |
36
Table of Contents
| | | | | Principal amount° | | Value (US $) |
| Corporate Bonds (continued) | | | | | |
| Utilities (continued) | | | | | |
| Perusahaan Listrik Negara 144A 4.125% 5/15/27 # | | 200,000 | | $ | 215,283 |
| Southern California Edison 4.875% 3/1/49 | | 30,000 | | | 34,908 |
| Vistra Operations | | | | | |
| | 144A 3.550% 7/15/24 # | | 120,000 | | | 125,651 |
| | 144A 4.300% 7/15/29 # | | 215,000 | | | 227,411 |
| | | | | | | 3,028,815 |
| Total Corporate Bonds (cost $22,096,100) | | | | | 23,048,709 |
| | | | | | | |
| Loan Agreements – 1.02% | | | | | |
| Applied Systems TBD X | | 300,000 | | | 299,391 |
| Asplundh Tree Expert TBD 9/7/27 X | | 200,000 | | | 199,732 |
| DaVita Tranche B-1 1.859% (LIBOR01M + 1.75%) | | | | | |
| | 8/12/26 ● | | 348,494 | | | 346,921 |
| HCA Tranche B13 1.859% (LIBOR01M + 1.75%) | | | | | |
| | 3/18/26 ● | | 396,713 | | | 397,178 |
| KFC Holding Tranche B 1.856% (LIBOR01M + | | | | | |
| | 1.75%) 3/15/28 ● | | 100,000 | | | 100,134 |
| Lamar Media Tranche B 1.604% (LIBOR01M + | | | | | |
| | 1.50%) 2/5/27 ● | | 171,938 | | | 171,293 |
| Logmein 1st Lien 4.854% (LIBOR01M + 4.75%) | | | | | |
| | 8/31/27● | | 49,875 | | | 49,817 |
| Pretium PKG Holdings 1st Lien 4.75% (LIBOR06M + | | | | | |
| | 4.00%) 11/5/27 ● | | 249,375 | | | 249,479 |
| SS&C Technologies Tranche B-3 1.859% | | | | | |
| | (LIBOR01M + 1.75%) 4/16/25 ● | | 50,122 | | | 49,684 |
| SS&C Technologies Tranche B-4 1.859% | | | | | |
| | (LIBOR01M + 1.75%) 4/16/25 ● | | 37,424 | | | 37,099 |
| Triton Water Holdings 1st Lien TBD 3/31/28 X | | 145,000 | | | 144,676 |
| W.R. Grace & Co. Tranche B-1 1.953% (LIBOR03M | | | | | |
| | + 1.75%) 4/3/25 ● | | 98,783 | | | 98,289 |
| W.R. Grace & Co. Tranche B-2 1.953% (LIBOR03M | | | | | |
| | + 1.75%) 4/3/25 ● | | 169,342 | | | 168,495 |
| Whole Earth Brands 5.50% (PRIME03M + 4.50%) | | | | | |
| | 2/2/28 ● | | 250,000 | | | 248,750 |
| Total Loan Agreements (cost $2,567,442) | | | | | 2,560,938 |
| | | | | | | |
| Municipal Bonds – 0.31% | | | | | |
| Bay Area, California Toll Authority | | | | | |
| | (Build America Bonds) Series S3 6.907% | | | | | |
| | 10/1/50 | | 185,000 | | | 305,890 |
37
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | | | Principal amount° | | Value (US $) |
| Municipal Bonds (continued) | | | | | |
| New Jersey Turnpike Authority | | | | | |
| | (Build America Bonds) Series A 7.102% 1/1/41 | | 105,000 | | $ | 160,938 |
| Oregon State Taxable Pension | | | | | |
| | 5.892% 6/1/27 | | 200,000 | | | 244,206 |
| South Carolina Public Service Authority | | | | | |
| | (Santee Cooper) Series D 4.77% 12/1/45 | | 60,000 | | | 72,112 |
| Total Municipal Bonds (cost $698,455) | | | | | 783,146 |
| | | | | | | |
| Non-Agency Asset-Backed Securities – 0.60% | | | | | |
| American Express Credit Account Master Trust | | | | | |
| | Series 2017-5 A 0.486% (LIBOR01M + 0.38%) | | | | | |
| | 2/18/25 ● | | 235,000 | | | 235,999 |
| Ford Credit Auto Owner Trust | | | | | |
| | Series 2021-A B 0.70% 10/15/26 | | 140,000 | | | 138,909 |
| GM Financial Leasing Trust | | | | | |
| | Series 2021-1 B 0.54% 2/20/25 | | 210,000 | | | 209,239 |
| HOA Funding | | | | | |
| | Series 2014-1A A2 144A 4.846% 8/20/44 # | | 478,500 | | | 473,107 |
| Mercedes-Benz Master Owner Trust | | | | | |
| | Series 2019-BA A 144A 2.61% 5/15/24 # | | 200,000 | | | 205,112 |
| Tesla Auto Lease Trust | | | | | |
| | Series 2021-A A2 144A 0.36% 3/20/25 # | | 100,000 | | | 99,989 |
| Towd Point Mortgage Trust | | | | | |
| | Series 2015-5 A1B 144A 2.75% 5/25/55 #,● | | 13,285 | | | 13,317 |
| | Series 2015-6 A1B 144A 2.75% 4/25/55 #,● | | 29,622 | | | 29,827 |
| | Series 2017-1 A1 144A 2.75% 10/25/56 #,● | | 30,301 | | | 30,819 |
| | Series 2017-2 A1 144A 2.75% 4/25/57 #,● | | 31,875 | | | 32,352 |
| | Series 2018-1 A1 144A 3.00% 1/25/58 #,● | | 49,937 | | | 51,429 |
| Total Non-Agency Asset-Backed Securities (cost $1,522,538) | | | | | 1,520,099 |
| | | | | | | |
| Non-Agency Collateralized Mortgage Obligations – 0.94% | | | | | |
| Credit Suisse First Boston Mortgage Securities | | | | | |
| | Series 2005-5 6A3 5.00% 7/25/35 | | 23,139 | | | 23,452 |
| JPMorgan Mortgage Trust | | | | | |
| | Series 2006-S1 1A1 6.00% 4/25/36 | | 46,799 | | | 48,121 |
| | Series 2014-2 B1 144A 3.411% 6/25/29 #,● | | 77,427 | | | 79,578 |
| | Series 2014-2 B2 144A 3.411% 6/25/29 #,● | | 77,427 | | | 79,266 |
| | Series 2015-4 B1 144A 3.601% 6/25/45 #,● | | 151,816 | | | 157,584 |
| | Series 2015-4 B2 144A 3.601% 6/25/45 #,● | | 151,816 | | | 156,704 |
| | Series 2015-5 B2 144A 2.482% 5/25/45 #,● | | 169,260 | | | 173,739 |
| | Series 2015-6 B1 144A 3.55% 10/25/45 #,● | | 151,103 | | | 156,556 |
| | Series 2015-6 B2 144A 3.55% 10/25/45 #,● | | 151,103 | | | 155,800 |
38
Table of Contents
| | | | | Principal amount° | | Value (US $) |
| Non-Agency Collateralized Mortgage Obligations (continued) | | | | |
| Sequoia Mortgage Trust | | | | |
| | Series 2015-1 B2 144A 3.893% 1/25/45 #,● | | 40,273 | | $ | 41,374 |
| Wells Fargo Mortgage-Backed Securities Trust | | | | |
| | Series 2006-AR5 2A1 2.803% 4/25/36 ● | | 6,420 | | | 6,357 |
| WST Trust | | | | |
| | Series 2019-1 A 1.09% (BBSW1M + 1.08%) | | | | | |
| | 8/18/50 ● | | 1,672,376 | | | 1,291,846 |
| Total Non-Agency Collateralized Mortgage Obligations (cost $2,141,345) | | | 2,370,377 |
| | | |
| Non-Agency Commercial Mortgage-Backed Securities – 1.31% | | | |
| Banc of America Commercial Mortgage Trust | | | | |
| | Series 2017-BNK3 B 3.879% 2/15/50 ● | | 340,000 | | | 365,385 |
| COMM Mortgage Trust | | | | | |
| | Series 2014-CR20 AM 3.938% 11/10/47 | | 345,000 | | | 371,721 |
| | Series 2015-3BP A 144A 3.178% 2/10/35 # | | 500,000 | | | 530,755 |
| GS Mortgage Securities Trust | | | | | |
| | Series 2019-GC39 A4 3.567% 5/10/52 | | 580,000 | | | 633,538 |
| | Series 2019-GC42 A4 3.001% 9/1/52 | | 430,000 | | | 452,860 |
| JPMorgan Chase Commercial Mortgage Securities | | | | |
| | Trust | | | | | |
| | Series 2013-LC11 B 3.499% 4/15/46 | | 125,000 | | | 124,662 |
| LB-UBS Commercial Mortgage Trust | | | | | |
| | Series 2006-C6 AJ 5.452% 9/15/39 ● | | 92,752 | | | 53,751 |
| Morgan Stanley Capital I Trust | | | | | |
| | Series 2006-HQ10 B 5.448% 11/12/41 ● | | 248,013 | | | 244,222 |
| Wells Fargo Commercial Mortgage Trust | | | | | |
| | Series 2016-BNK1 A3 2.652% 8/15/49 | | 485,000 | | | 509,511 |
| Total Non-Agency Commercial Mortgage-Backed Securities (cost $3,243,447) | | | 3,286,405 |
| | | |
| | | | Number of shares | | | |
| Rights – 0.00% | | | | | |
| Sociedad Quimica y Minera de Chile | | | | | |
| | exercise price $3.10, expiration date 4/15/21 † | | 564 | | | 1,750 |
| Total Rights (cost $0) | | | | | 1,750 |
| | | |
| | | | Principal amount° | | | |
| Sovereign Bonds – 3.56% | | | | |
| Argentina – 0.01% | | | | |
| Argentine Republic Government International Bonds | | | | |
| | 0.125% 7/9/30 ~ | | 87,300 | | | 29,381 |
| | 1.00% 7/9/29 | | 3,033 | | | 1,093 |
| | | | | | | 30,474 |
39
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | | | | | Principal amount° | | Value (US $) |
| Sovereign Bonds (continued) | | | | |
| Australia – 0.15% | | | | |
| Australia Government Bonds | | | | |
| | 0.25% 11/21/25 | | AUD | | 225,000 | | $ | 167,767 |
| | 1.50% 6/21/31 | | AUD | | 130,000 | | | 96,123 |
| | 1.75% 6/21/51 | | AUD | | 55,000 | | | 33,462 |
| | 2.25% 11/21/22 | | AUD | | 90,000 | | | 70,780 |
| | | | | | | | | 368,132 |
| Belgium – 0.09% | | | | |
| Kingdom of Belgium Government Bonds | | | | |
| | 0.10% 6/22/30 | | EUR | | 60,000 | | | 71,870 |
| | 144A 0.40% 6/22/40 # | | EUR | | 40,000 | | | 46,030 |
| | 144A 0.80% 6/22/25 # | | EUR | | 35,000 | | | 43,462 |
| | 144A 1.70% 6/22/50 # | | EUR | | 20,000 | | | 29,131 |
| | 144A 4.25% 9/28/22 # | | EUR | | 25,000 | | | 31,476 |
| | | | | | | | | 221,969 |
| Canada – 0.10% | | | | |
| Canadian When Issued Government Bonds | | | | |
| | 0.50% 9/1/25 | | CAD | | 55,000 | | | 43,037 |
| | 1.00% 9/1/22 | | CAD | | 160,000 | | | 128,801 |
| | 1.25% 6/1/30 | | CAD | | 55,000 | | | 42,925 |
| | 2.00% 12/1/51 | | CAD | | 45,000 | | | 35,699 |
| | | | | | | | | 250,462 |
| Denmark – 0.02% | | | | |
| Denmark Government Bonds | | | | |
| | 144A 0.25% 11/15/52 # | | DKK | | 60,000 | | | 8,990 |
| | 0.50% 11/15/27 | | DKK | | 235,000 | | | 39,080 |
| | 4.50% 11/15/39 | | DKK | | 30,000 | | | 8,425 |
| | | | | | | | | 56,495 |
| France – 0.42% | | | | |
| French Republic Government Bonds OAT | | | | |
| | 0.000% 2/25/23 ^ | | EUR | | 140,000 | | | 166,278 |
| | 0.000% 11/25/30 ^ | | EUR | | 180,000 | | | 212,172 |
| | 0.25% 11/25/26 | | EUR | | 105,000 | | | 128,001 |
| | 0.50% 5/25/25 | | EUR | | 210,000 | | | 257,349 |
| | 0.75% 11/25/28 | | EUR | | 135,000 | | | 170,588 |
| | 144A 0.75% 5/25/52 # | | EUR | | 110,000 | | | 127,042 |
| | | | | | | | | 1,061,430 |
40
Table of Contents
| | | | | | | Principal amount° | | Value (US $) |
| Sovereign Bonds (continued) | | | | | | | |
| Germany – 0.26% | | | | | | | |
| Bundesrepublik Deutschland Bundesanleihe | | | | | | | |
| | 0.000% 8/15/30 ^ | | EUR | | 140,000 | | $ | 169,476 |
| | 0.000% 5/15/35 ^ | | EUR | | 100,000 | | | 118,256 |
| | 1.00% 8/15/25 | | EUR | | 120,000 | | | 151,251 |
| | 1.50% 9/4/22 | | EUR | | 130,000 | | | 157,229 |
| | 2.50% 8/15/46 | | EUR | | 35,000 | | | 65,018 |
| | | | | | | | | 661,230 |
| Italy – 0.36% | | | | | | | |
| Italy Buoni Poliennali Del Tesoro | | | | | | | |
| | 144A 0.85% 1/15/27 # | | EUR | | 80,000 | | | 97,645 |
| | 0.95% 8/1/30 | | EUR | | 130,000 | | | 157,549 |
| | 1.35% 4/15/22 | | EUR | | 110,000 | | | 131,365 |
| | 1.45% 11/15/24 | | EUR | | 180,000 | | | 223,519 |
| | 144A 2.25% 9/1/36 # | | EUR | | 220,000 | | | 300,840 |
| | | | | | | | | 910,918 |
| Japan – 1.27% | | | | | | | |
| Japan Government Forty Year Bond 0.50% 3/20/60 | | JPY | | 7,400,000 | | | 62,478 |
| Japan Government Ten Year Bonds | | | | | | | |
| | 0.10% 9/20/27 | | JPY | | 99,600,000 | | | 908,121 |
| | 0.10% 12/20/29 | | JPY | | 94,250,000 | | | 855,861 |
| Japan Government Thirty Year Bond 0.60% | | | | | | | |
| | 6/20/50 | | JPY | | 24,100,000 | | | 214,192 |
| Japan Government Twenty Year Bonds | | | | | | | |
| | 0.40% 6/20/40 | | JPY | | 58,000,000 | | | 517,787 |
| | 1.70% 6/20/32 | | JPY | | 60,350,000 | | | 639,024 |
| | | | | | | | | 3,197,463 |
| Netherlands – 0.06% | | | | | | | |
| Netherlands Government Bonds | | | | | | | |
| | 144A 0.000% 7/15/30 #,^ | | EUR | | 25,000 | | | 29,987 |
| | 144A 0.000% 1/15/52 #,^ | | EUR | | 30,000 | | | 31,834 |
| | 144A 0.25% 7/15/25 # | | EUR | | 35,000 | | | 42,625 |
| | 144A 1.75% 7/15/23 # | | EUR | | 30,000 | | | 37,166 |
| | | | | | | | | 141,612 |
| Philippines – 0.08% | | | | | | | |
| Philippine Government International Bond 2.457% | | | | |
| | 5/5/30 | | | | 200,000 | | | 202,650 |
| | | | | | | | | 202,650 |
41
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| | | | | | | Principal amount° | | Value (US $) |
| Sovereign Bonds (continued) | | | | | | | |
| Spain – 0.29% | | | | | | | |
| Spain Government Bonds | | | | | | | |
| | 0.000% 4/30/23 ^ | | EUR | | 65,000 | | $ | 77,011 |
| | 144A 0.60% 10/31/29 # | | EUR | | 135,000 | | | 164,389 |
| | 144A 0.80% 7/30/27 # | | EUR | | 60,000 | | | 74,405 |
| | 144A 2.35% 7/30/33 # | | EUR | | 155,000 | | | 221,626 |
| | 144A 3.80% 4/30/24 # | | EUR | | 135,000 | | | 179,157 |
| | | | | | | | | 716,588 |
| Sweden – 0.01% | | | | | | | |
| Sweden Government Bonds | | | | | | | |
| | 144A 0.125% 5/12/31 # | | SEK | | 130,000 | | | 14,487 |
| | 144A 1.50% 11/13/23 # | | SEK | | 90,000 | | | 10,788 |
| | 2.50% 5/12/25 | | SEK | | 60,000 | | | 7,630 |
| | | | | | | | | 32,905 |
| United Kingdom – 0.44% | | | | | | | |
| United Kingdom Gilt | | | | | | | |
| | 0.125% 1/30/26 | | GBP | | 70,000 | | | 95,330 |
| | 0.875% 10/22/29 | | GBP | | 125,000 | | | 173,733 |
| | 1.25% 7/22/27 | | GBP | | 55,000 | | | 79,199 |
| | 1.75% 9/7/22 | | GBP | | 80,000 | | | 113,011 |
| | 1.75% 7/22/57 | | GBP | | 95,000 | | | 147,250 |
| | 4.25% 3/7/36 | | GBP | | 170,000 | | | 333,311 |
| | 4.25% 12/7/46 | | GBP | | 75,000 | | | 167,423 |
| | | | | | | | | 1,109,257 |
| Total Sovereign Bonds (cost $9,216,716) | | | | | | | 8,961,585 |
| | |
| | | | | | Number of shares | | | |
| Preferred Stock – 0.30% | | | | | | | |
| USB Realty 144A 1.388% (LIBOR03M + | | | | | | | |
| | 1.147%) 1/15/22 #,ψ,● | | | | 100,000 | | | 77,750 |
| Volkswagen 2.030% | | | | 2,430 | | | 679,929 |
| Total Preferred Stock (cost $480,818) | | | | | | | 757,679 |
| | |
| | | | | | Principal amount° | | | |
| US Treasury Obligations – 2.34% | | | | | | | |
| US Treasury Floating Rate Notes | | | | | | | |
| | 0.069% (USBMMY3M + 0.049%) 1/31/23 ● | | | | 3,565,000 | | | 3,566,942 |
| | 0.075% (USBMMY3M + 0.055%) 7/31/22 ● | | | | 245,000 | | | 245,133 |
| US Treasury Notes | | | | | | | |
| | 0.125% 3/31/23 | | | | 690,000 | | | 689,569 |
| | 0.25% 3/15/24 | | | | 470,000 | | | 468,770 |
42
Table of Contents
| | | | | Principal amount° | | Value (US $) |
| US Treasury Obligations (continued) | | | | | |
| US Treasury Notes | | | | | |
| | 0.75% 1/31/28 | | 65,000 | | $ | 62,329 |
| | 1.125% 2/15/31 | | 910,000 | | | 859,879 |
| Total US Treasury Obligations (cost $5,917,015) | | | | | 5,892,622 |
| | |
| | | | Number of shares | | | |
| Short-Term Investments – 2.56% | | | | | |
| Money Market Mutual Funds – 2.56% | | | | | |
| BlackRock FedFund – Institutional Shares | | | | | |
| | (seven-day effective yield 0.01%) | | 1,610,229 | | | 1,610,229 |
| Fidelity Investments Money Market Government | | | | | |
| | Portfolio – Class I (seven-day effective yield | | | | | |
| | 0.01%) | | 1,610,229 | | | 1,610,229 |
| GS Financial Square Government Fund – | | | | | |
| | Institutional Shares (seven-day effective yield | | | | | |
| | 0.03%) | | 1,610,229 | | | 1,610,229 |
| Morgan Stanley Government Portfolio – Institutional | | | | | |
| | Share Class (seven-day effective yield 0.00%) | | 1,610,229 | | | 1,610,229 |
| Total Short-Term Investments (cost $6,440,916) | | | | | 6,440,916 |
| Total Value of Securities–100.14% | | | | | |
| (cost $193,365,693) | | | | $ | 251,940,364 |
| † | Non-income producing security. |
| = | The value of this security was determined using significant unobservable inputs and is reported as a Level 3 security in the disclosure table located in Note 3 in “Notes to financial statements.” |
| § | Developed Markets – countries that are thought to be most developed and therefore less risky than emerging markets. |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At March 31, 2021, the aggregate value of Rule 144A securities was $14,700,417, which represents 5.84% of the Fund’s net assets. See Note 11 in “Notes to financial statements.” |
| @ | Emerging Markets – developing countries with relatively low per capita income, often with above-average economic growth potential but with more risk. |
| ° | Principal amount shown is stated in USD unless noted that the security is denominated in another currency. |
| Σ | Interest only security. An interest only security is the interest only portion of a fixed income security, which is separated and sold individually from the principal portion of the security. |
43
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| ● | Variable rate investment. Rates reset periodically. Rate shown reflects the rate in effect at March 31, 2021. For securities based on a published reference rate and spread, the reference rate and spread are indicated in their descriptions. The reference rate descriptions (i.e. LIBOR03M, LIBOR06M, etc.) used in this report are identical for different securities, but the underlying reference rates may differ due to the timing of the reset period. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions, or for mortgage-backed securities, are impacted by the individual mortgages which are paying off over time. These securities do not indicate a reference rate and spread in their descriptions. |
| ◆ | Pass Through Agreement. Security represents the contractual right to receive a proportionate amount of underlying payments due to the counterparty pursuant to various agreements related to the rescheduling of obligations and the exchange of certain notes. |
| µ | Fixed to variable rate investment. The rate shown reflects the fixed rate in effect at March 31, 2021. Rate will reset at a future date. |
| ψ | Perpetual security. Maturity date represents next call date. |
| X | This loan will settle after March 31, 2021, at which time the interest rate, based on the LIBOR and the agreed upon spread on trade date, will be reflected. |
| ~ | Step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Stated rate in effect at March 31, 2021. |
| ^ | Zero-coupon security. The rate shown is the effective yield at the time of purchase. |
The following foreign currency exchange contracts, futures contracts and swap contracts were outstanding at March 31, 2021:1
Foreign Currency Exchange Contracts
| | Currency to | | | | | | | Settlement | | Unrealized | | Unrealized |
| Counterparty | | Receive (Deliver) | | In Exchange For | | Date | | Appreciation | | Depreciation |
| BNYM | | AUD | | (13,235 | ) | | USD | | 10,079 | | | 4/1/21 | | $ | 27 | | $ | — | |
| BNYM | | CHF | | 507,994 | | | USD | | (539,198 | ) | | 4/1/21 | | | — | | | (1,709 | ) |
| BNYM | | SEK | | (52,920 | ) | | USD | | 6,063 | | | 4/1/21 | | | 4 | | | — | |
| JPMCB | | EUR | | (115,000 | ) | | USD | | 140,201 | | | 4/8/21 | | | 5,319 | | | — | |
| JPMCB | | JPY | | (360,000,000 | ) | | USD | | 3,455,624 | | | 4/8/21 | | | 204,041 | | | — | |
| TD | | AUD | | (2,145,000 | ) | | USD | | 1,649,418 | | | 4/8/21 | | | 20,090 | | | — | |
| TD | | CAD | | (335,000 | ) | | USD | | 261,585 | | | 4/8/21 | | | — | | | (4,992 | ) |
| TD | | DKK | | (375,000 | ) | | USD | | 61,341 | | | 4/8/21 | | | 2,216 | | | — | |
| TD | | EUR | | (3,225,000 | ) | | USD | | 3,931,597 | | | 4/8/21 | | | 149,013 | | | — | |
| TD | | GBP | | (870,000 | ) | | USD | | 1,173,369 | | | 4/8/21 | | | — | | | (26,043 | ) |
| TD | | SEK | | (300,000 | ) | | USD | | 36,174 | | | 4/8/21 | | | 1,821 | | | — | |
| Total Foreign Currency Exchange Contracts | | $ | 382,531 | | $ | (32,744 | ) |
44
Table of Contents
Futures Contracts
Exchange-Traded
| | | | | | | | | | | | Variation |
| | | | | | | | | | | | Margin |
| | | | | | Notional | | | | Value/ | | Due from |
| | | | Notional | | Cost | | Expiration | | Unrealized | | (Due to) |
| Contracts to Buy (Sell) | | Amount | | (Proceeds) | | Date | | Appreciation | | Brokers |
| (45) | | US Treasury 5 yr Notes | | $ | (5,552,930 | ) | | $ | (5,580,503 | ) | | 6/30/21 | | $ | 27,573 | | $ | 7,383 |
| (50) | | US Treasury 10 yr Notes | | | (6,546,875 | ) | | | (6,697,345 | ) | | 6/21/21 | | | 150,470 | | | 12,500 |
| (16) | | US Treasury 10 yr Ultra Notes | | | (2,299,000 | ) | | | (2,379,836 | ) | | 6/21/21 | | | 80,836 | | | 5,500 |
| (5) | | US Treasury Long Bonds | | | (772,969 | ) | | | (801,386 | ) | | 6/21/21 | | | 28,417 | | | 2,187 |
| Total Futures Contracts | | | | | | $ | (15,459,070 | ) | | | | $ | 287,296 | | $ | 27,570 |
Swap Contracts
IRS Contracts2
| Reference | | | | | | | | | | | | | | | | | | | | | |
| Obligation/ | | | | | | | | | | | | | | | | | | | | | |
| Termination | | | | Fixed/ | | | | | | | | | | | | | | | | | |
| Date/ | | | | Floating | | | | | | | | | | | | | | | | Variation |
| Payment | | | | Interest | | | | | | Upfront | | | | | | | | | Margin |
| Frequency | | | | Rate | | | | | | Payments | | | | | | | | | Due from |
| (Fixed Rate/ | | Notional | | Paid | | | | | | Paid | | Unrealized | | Unrealized | | (Due to |
| Floating Rate) | | Amount | | (Received) | | Value | | (Received) | | Appreciation3 | | Depreciation3 | | Brokers) |
| Centrally Cleared: | | | | | | | | | | | | | | | | | | | | | |
| IRS 10/2/234 - | | | | | | | | | | | | | | | | | | | | | |
| (Annually/ | | | | 0.041%/ | | | | | | | | | | | | | | | | | |
| Annually) | | 2,225,000 | | (0.01)% | | $ | 9,347 | | | $ | — | | $ | 9,347 | | $ | — | | | $ | 455 |
| IRS 10/1/254 - | | | | | | | | | | | | | | | | | | | | | |
| (Annually/ | | | | 0.115%/ | | | | | | | | | | | | | | | | | |
| Annually) | | 725,000 | | (0.01)% | | | 19,049 | | | | — | | | 19,049 | | | — | | | | 1,359 |
| IRS 2/1/265 - | | | | | | | | | | | | | | | | | | | | | |
| (Semiannually/ | | | | (0.838)%/ | | | | | | | | | | | | | | | | | |
| Semiannually) | | AUD 7,820,000 | | 0.015% | | | (90,642 | ) | | | — | | | — | | | (90,642 | ) | | | 1,931 |
| IRS 10/1/274 - | | | | | | | | | | | | | | | | | | | | | |
| (Annually/ | | | | 0.251%/ | | | | | | | | | | | | | | | | | |
| Annually) | | 3,745,000 | | (0.01)% | | | 208,429 | | | | — | | | 208,429 | | | — | | | | 14,727 |
| IRS 10/1/304 - | | | | | | | | | | | | | | | | | | | | | |
| (Annually/ | | | | 0.449%/ | | | | | | | | | | | | | | | | | |
| Annually) | | 2,155,000 | | (0.01)% | | | 202,402 | | | | — | | | 202,402 | | | — | | | | 11,657 |
| IRS 10/1/404 - | | | | | | | | | | | | | | | | | | | | | |
| (Annually/ | | | | 0.761%/ | | | | | | | | | | | | | | | | | |
| Annually) | | 570,000 | | (0.01)% | | | 107,718 | | | | — | | | 107,718 | | | — | | | | 6,088 |
45
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
IRS Contracts2
| Reference | | | | | | | | | | | | | | | | | | | | |
| Obligation/ | | | | | | | | | | | | | | | | | | | | |
| Termination | | | | Fixed/ | | | | | | | | | | | | | | | | |
| Date/ | | | | Floating | | | | | | | | | | | | | | | Variation |
| Payment | | | | Interest | | | | | Upfront | | | | | | | | | Margin |
| Frequency | | | | Rate | | | | | Payments | | | | | | | | | Due from |
| (Fixed Rate/ | | Notional | | Paid | | | | | Paid | | Unrealized | | Unrealized | | (Due to |
| Floating Rate) | | Amount | | (Received) | | Value | | (Received) | | Appreciation3 | | Depreciation3 | | Brokers) |
| Centrally Cleared (continued): | | | | | | | | | | | | | | | | | | | | |
| IRS 10/1/454 - | | | | | | | | | | | | | | | | | | | | |
| (Annually/ | | | | 0.793%/ | | | | | | | | | | | | | | | | |
| Annually) | | 255,000 | | (0.01)% | | $ | 57,751 | | $ | — | | $ | 57,751 | | $ | — | | | $ | 3,465 |
| IRS 10/1/504 - | | | | | | | | | | | | | | | | | | | | |
| (Annually/ | | | | 0.812%/ | | | | | | | | | | | | | | | | |
| Annually) | | 560,000 | | (0.01)% | | | 144,603 | | | — | | | 144,603 | | | — | | | | 9,266 |
| Total IRS | | | | | | | | | | | | | | | | | | | | |
| Contracts | | | | | | $ | 658,657 | | $ | — | | $ | 749,299 | | $ | (90,642 | ) | | $ | 48,948 |
The use of foreign currency exchange contracts, futures contracts, and swap contracts involve elements of market risk and risks in excess of the amounts disclosed in these financial statements. The foreign currency exchange contracts and notional amounts presented on the previous page represent the Fund’s total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) and variation margin are reflected in the Fund’s net assets.
| 1 | See Note 8 in “Notes to Financial statements”. |
| 2 | An IRS agreement is an exchange of interest rates between counterparties. Periodic payments (receipt) on such contracts are accrued daily and recorded as unrealized appreciation (depreciation) on swap contracts. Upon periodic payment (receipt) or termination of the contract, such amounts are recorded as realized gains (losses) on swap contracts. |
| 3 | Unrealized appreciation (depreciation) does not include periodic interest payments (receipt) on swap contracts accrued daily in the amount of $(4,446). |
| 4 | Rate resets based on SOFR. |
| 5 | Rate resets based on BBSW6M. |
| Summary of abbreviations: |
| ADR – American Depositary Receipt |
| BBSW1M – Bank Bill Swap Rate 1 Month |
| BBSW6M – Bank Bill Swap Rate 6 Month |
| BNYM – Bank of New York Mellon |
| CLO – Collateralized Loan Obligation |
| DAC – Designated Activity Company |
| EAFE – Europe, Australasia, and Far East |
46
Table of Contents
| Summary of abbreviations: (continued) |
| ETF – Exchange-Traded Fund |
| FREMF – Freddie Mac Multifamily |
| FTSE – Financial Times Stock Exchange |
| GDR – Global Depositary Receipt |
| GNMA – Government National Mortgage Association |
| GS – Goldman Sachs |
| ICE – Intercontinental Exchange, Inc. |
| IRS – Interest Rate Swap |
| JPMCB – JPMorgan Chase Bank |
| LIBOR – London interbank offered rate |
| LIBOR01M – ICE LIBOR USD 1 Month |
| LIBOR03M – ICE LIBOR USD 3 Month |
| LIBOR06M – ICE LIBOR USD 6 Month |
| MSCI – Morgan Stanley Capital International |
| OAT – Obligations Assimilables du Tresor |
| PJSC – Private Joint Stock Company |
| REIT – Real Estate Investment Trust |
| REMIC – Real Estate Mortgage Investment Conduit |
| S.F. – Single Family |
| SOFR – Secured Overnight Financing Rate |
| TBA – To be announced |
| TBD – To be determined |
| TD – TD Bank |
| USBMMY3M – US Treasury 3 Month Bill Money Market Yield |
| yr – Year |
| Summary of currencies: |
| AUD – Australian Dollar |
| CAD – Canadian Dollar |
| CHF – Swiss Franc |
| DKK – Danish Krone |
| EUR – European Monetary Unit |
| GBP – British Pound Sterling |
| JPY – Japanese Yen |
| SEK – Swedish Krona |
47
Table of Contents
Schedule of investments
Delaware Strategic Allocation Fund
| Summary of currencies: (continued) |
| USD – US Dollar |
See accompanying notes, which are an integral part of the financial statements.
48
Table of Contents
| Statement of assets and liabilities |
| Delaware Strategic Allocation Fund | March 31, 2021 |
| Assets: | | | |
| Investments, at value* | | $ | 251,940,364 |
| | Cash | | | 1,204,349 |
| Cash collateral due from brokers | | | 624,233 |
| Foreign currencies, at valueΔ | | | 731,150 |
| Receivable for securities sold | | | 1,484,396 |
| Dividends and interest receivable | | | 687,134 |
| Unrealized appreciation on foreign currency exchange contracts | | | 382,531 |
| Foreign tax reclaims receivable | | | 209,493 |
| Variation margin due from brokers on centrally cleared interest rate swap | | | |
| contracts | | | 48,948 |
| Variation margin due from broker on futures contracts | | | 27,570 |
| Receivable for fund shares sold | | | 17,548 |
| Total Assets | | | 257,357,716 |
| Liabilities: | | | |
| Payable for securities purchased | | | 4,965,244 |
| Cash collateral due to brokers | | | 290,000 |
| Other accrued expenses | | | 173,124 |
| Investment management fees payable to affiliates | | | 117,221 |
| Payable for fund shares redeemed | | | 102,310 |
| Distribution fees payable to affiliates | | | 51,197 |
| Unrealized depreciation on foreign currency exchange contracts | | | 32,744 |
| Capital gains tax accrued | | | 17,335 |
| Swap payments payable | | | 4,591 |
| Dividend disbursing and transfer agent fees and expenses payable to affiliates | | | 1,782 |
| Trustees’ fees and expenses payable to affiliates | | | 1,377 |
| Accounting and administration expenses payable to affiliates | | | 1,055 |
| Reports and statements to shareholders expenses payable to affiliates | | | 362 |
| Legal fees payable to affiliates | | | 304 |
| Total Liabilities | | | 5,758,646 |
| Total Net Assets | | $ | 251,599,070 |
| | |
| Net Assets Consist of: | | | |
| Paid-in capital | | $ | 180,156,434 |
| Total distributable earnings (loss) | | | 71,442,636 |
| Total Net Assets | | $ | 251,599,070 |
49
Table of Contents
Statement of assets and liabilities
Delaware Strategic Allocation Fund
| Net Asset Value | | | | |
| Class A: | | | | |
| Net assets | | $ | 198,448,027 | |
| Shares of beneficial interest outstanding, unlimited authorization, no par | | | 16,361,762 | |
| Net asset value per share | | $ | 12.13 | |
| Sales charge | | | 5.75 | % |
| Offering price per share, equal to net asset value per share / (1 - sales charge) | | $ | 12.87 | |
| | | | | |
| Class C: | | | | |
| Net assets | | $ | 11,062,426 | |
| Shares of beneficial interest outstanding, unlimited authorization, no par | | | 912,638 | |
| Net asset value per share | | $ | 12.12 | |
| | | | | |
| Class R: | | | | |
| Net assets | | $ | 1,509,327 | |
| Shares of beneficial interest outstanding, unlimited authorization, no par | | | 125,020 | |
| Net asset value per share | | $ | 12.07 | |
| | | | | |
| Institutional Class: | | | | |
| Net assets | | $ | 40,579,290 | |
| Shares of beneficial interest outstanding, unlimited authorization, no par | | | 3,344,331 | |
| Net asset value per share | | $ | 12.13 | |
| ____________________ |
*Investments, at cost | | $ | 193,365,693 | |
| ΔForeign currencies, at cost | | | 742,621 | |
See accompanying notes, which are an integral part of the financial statements.
50
Table of Contents
| Statement of operations |
| Delaware Strategic Allocation Fund | Year ended March 31, 2021 |
| Investment Income: | | | | |
| | Dividends | | $ | 3,120,774 | |
| Interest | | | 1,366,266 | |
| Foreign tax withheld | | | (182,276 | ) |
| | | | 4,304,764 | |
| |
| Expenses: | | | | |
| Management fees | | | 1,547,921 | |
| Distribution expenses — Class A | | | 438,092 | |
| Distribution expenses — Class C | | | 168,749 | |
| Distribution expenses — Class R | | | 7,226 | |
| Dividend disbursing and transfer agent fees and expenses | | | 199,501 | |
| Accounting and administration expenses | | | 79,834 | |
| Registration fees | | | 70,234 | |
| Reports and statements to shareholders expenses | | | 66,925 | |
| Audit and tax fees | | | 66,582 | |
| Custodian fees | | | 58,048 | |
| Legal fees | | | 51,670 | |
| Trustees’ fees and expenses | | | 13,472 | |
| Other | | | 75,318 | |
| | | | 2,843,572 | |
| Less expenses waived | | | (114,390 | ) |
| Less expenses paid indirectly | | | (583 | ) |
| Total operating expenses | | | 2,728,599 | |
| Net Investment Income | | | 1,576,165 | |
51
Table of Contents
Statement of operations
Delaware Strategic Allocation Fund
| Net Realized and Unrealized Gain (Loss): | | | | |
| | Net realized gain (loss) on: | | | | |
| | Investments1 | | $ | 19,258,234 | |
| | Distributions from investment companies | | | 6 | |
| | Foreign currencies | | | 32,094 | |
| | Foreign currency exchange contracts | | | (527,008 | ) |
| | Futures contracts | | | 166,534 | |
| | Options purchased | | | (583 | ) |
| | Swap contracts | | | (1,924,418 | ) |
| Net realized gain | | | 17,004,859 | |
| | | |
| Net change in unrealized appreciation (depreciation) of: | | | | |
| | Investments2 | | | 48,879,013 | |
| | Foreign currencies | | | 4,862 | |
| | Foreign currency exchange contracts | | | 240,318 | |
| | Futures contracts | | | 362,019 | |
| | Swap contracts | | | 2,391,255 | |
| Net change in unrealized appreciation (depreciation) | | | 51,877,467 | |
| Net Realized and Unrealized Gain | | | 68,882,326 | |
| Net Increase in Net Assets Resulting from Operations | | $ | 70,458,491 | |
| 1 | Includes $(8,768) capital gains tax paid. |
| 2 | Includes $(17,335) capital gains tax accrued. |
See accompanying notes, which are an integral part of the financial statements.
52
Table of Contents
Statements of changes in net assets
Delaware Strategic Allocation Fund
| | | | Year ended |
| | | | | 3/31/21 | | | 3/31/20 |
| Increase (Decrease) in Net Assets from Operations: | | | | | | | | |
| | Net investment income | | $ | 1,576,165 | | | $ | 4,165,719 | |
| Net realized gain | | | 17,004,859 | | | | 4,600,201 | |
| Net change in unrealized appreciation (depreciation) | | | 51,877,467 | | | | (30,169,919 | ) |
| Net increase (decrease) in net assets resulting from | | | | | | | | |
| | operations | | | 70,458,491 | | | | (21,403,999 | ) |
| | |
| Dividends and Distributions to Shareholders from: | | | | | | | | |
| Distributable earnings: | | | | | | | | |
| | Class A | | | (3,243,998 | ) | | | (15,220,592 | ) |
| | Class C | | | (198,993 | ) | | | (1,757,045 | ) |
| | Class R | | | (21,677 | ) | | | (154,159 | ) |
| | Institutional Class | | | (780,561 | ) | | | (3,648,848 | ) |
| | | | | (4,245,229 | ) | | | (20,780,644 | ) |
| | |
| Capital Share Transactions: | | | | | | | | |
| Proceeds from shares sold: | | | | | | | | |
| | Class A | | | 13,222,381 | | | | 5,525,466 | |
| | Class C | | | 562,315 | | | | 944,147 | |
| | Class R | | | 146,410 | | | | 121,937 | |
| | Institutional Class | | | 2,759,469 | | | | 5,143,725 | |
| | | | | | | | | | | |
| Net asset value of shares issued upon reinvestment of | | | | | | | | |
| | dividends and distributions: | | | | | | | | |
| | Class A | | | 2,989,600 | | | | 14,133,230 | |
| | Class C | | | 196,435 | | | | 1,732,225 | |
| | Class R | | | 21,676 | | | | 154,156 | |
| | Institutional Class | | | 454,837 | | | | 1,875,646 | |
| | | | | 20,353,123 | | | | 29,630,532 | |
53
Table of Contents
Statements of changes in net assets
Delaware Strategic Allocation Fund
| | | Year ended |
| | 3/31/21 | | 3/31/20 |
| Capital Share Transactions (continued): | | | | | | | | |
| Cost of shares redeemed: | | | | | | | | |
| Class A | | $ | (24,282,501 | ) | | $ | (27,546,571 | ) |
| Class C | | | (12,524,201 | ) | | | (8,472,813 | ) |
| Class R | | | (628,376 | ) | | | (367,100 | ) |
| Institutional Class | | | (7,745,864 | ) | | | (13,500,491 | ) |
| | | (45,180,942 | ) | | | (49,886,975 | ) |
| Decrease in net assets derived from capital share | | | | | | | | |
| transactions | | | (24,827,819 | ) | | | (20,256,443 | ) |
| Net Increase (Decrease) in Net Assets | | | 41,385,443 | | | | (62,441,086 | ) |
| | | | | | | | | |
| Net Assets: | | | | | | | | |
| Beginning of year | | | 210,213,627 | | | | 272,654,713 | |
| End of year | | $ | 251,599,070 | | | $ | 210,213,627 | |
See accompanying notes, which are an integral part of the financial statements.
54
Table of Contents
Financial highlights
Delaware Strategic Allocation Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
| Net asset value, beginning of period |
| |
| Income (loss) from investment operations: |
| Net investment income1 |
| Net realized and unrealized gain (loss) |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| Ratios and supplemental data: |
| Net assets, end of period (000 omitted) |
| Ratio of expenses to average net assets3 |
| Ratio of expenses to average net assets prior to fees waived3 |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets prior to fees waived |
| Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
| 3 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
56
Table of Contents
| | Year ended |
| | 3/31/21 | | 3/31/20 | | 3/31/19 | | 3/31/18 | | 3/31/17 |
| | $ | 9.12 | | | $ | 10.94 | | | $ | 11.46 | | | $ | 11.42 | | | $ | 10.80 | |
| |
| |
| | | 0.07 | | | | 0.18 | | | | 0.22 | | | | 0.21 | | | | 0.17 | |
| | | 3.14 | | | | (1.13 | ) | | | (0.05 | ) | | | 0.71 | | | | 0.84 | |
| | | 3.21 | | | | (0.95 | ) | | | 0.17 | | | | 0.92 | | | | 1.01 | |
| |
| |
| | | (0.11 | ) | | | (0.19 | ) | | | (0.20 | ) | | | (0.21 | ) | | | (0.24 | ) |
| | | (0.09 | ) | | | (0.68 | ) | | | (0.49 | ) | | | (0.67 | ) | | | (0.15 | ) |
| | | (0.20 | ) | | | (0.87 | ) | | | (0.69 | ) | | | (0.88 | ) | | | (0.39 | ) |
| |
| | $ | 12.13 | | | $ | 9.12 | | | $ | 10.94 | | | $ | 11.46 | | | $ | 11.42 | |
| |
| | | 35.37% | | | | (9.55% | ) | | | 1.63% | | | | 8.35% | | | | 9.45% | |
| |
| |
| | $ | 198,448 | | | $ | 156,436 | | | $ | 195,484 | | | $ | 172,750 | | | $ | 170,801 | |
| | | 1.14% | | | | 1.13% | | | | 1.16% | | | | 1.14% | | | | 1.14% | |
| | | 1.18% | | | | 1.18% | | | | 1.22% | | | | 1.17% | | | | 1.18% | |
| | | 0.67% | | | | 1.66% | | | | 2.00% | | | | 1.79% | | | | 1.49% | |
| | | 0.63% | | | | 1.61% | | | | 1.94% | | | | 1.76% | | | | 1.45% | |
| | | 77% | | | | 103% | | | | 97% | | | | 93% | | | | 133% | |
57
Table of Contents
Financial highlights
Delaware Strategic Allocation Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
| Net asset value, beginning of period |
| |
| Income (loss) from investment operations: |
| Net investment income (loss)1 |
| Net realized and unrealized gain (loss) |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| Ratios and supplemental data: |
| Net assets, end of period (000 omitted) |
| Ratio of expenses to average net assets3 |
| Ratio of expenses to average net assets prior to fees waived3 |
| Ratio of net investment income (loss) to average net assets |
| Ratio of net investment income (loss) to average net assets |
| prior to fees waived |
| Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
| 3 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
58
Table of Contents
| | Year ended |
| | 3/31/21 | | 3/31/20 | | 3/31/19 | | 3/31/18 | | 3/31/17 |
| | $ | 9.13 | | | $ | 10.94 | | | $ | 11.46 | | | $ | 11.42 | | | $ | 10.80 | |
| | | |
| | | |
| | | (0.01 | ) | | | 0.10 | | | | 0.14 | | | | 0.12 | | | | 0.08 | |
| | | 3.13 | | | | (1.12 | ) | | | (0.05 | ) | | | 0.71 | | | | 0.84 | |
| | | 3.12 | | | | (1.02 | ) | | | 0.09 | | | | 0.83 | | | | 0.92 | |
| | |
| | |
| | | (0.04 | ) | | | (0.11 | ) | | | (0.12 | ) | | | (0.12 | ) | | | (0.15 | ) |
| | | (0.09 | ) | | | (0.68 | ) | | | (0.49 | ) | | | (0.67 | ) | | | (0.15 | ) |
| | | (0.13 | ) | | | (0.79 | ) | | | (0.61 | ) | | | (0.79 | ) | | | (0.30 | ) |
| | |
| | $ | 12.12 | | | $ | 9.13 | | | $ | 10.94 | | | $ | 11.46 | | | $ | 11.42 | |
| | |
| | | 34.26% | | | | (10.19% | ) | | | 0.82% | | | | 7.53% | | | | 8.62% | |
| | |
| | | |
| | $ | 11,063 | | | $ | 17,822 | | | $ | 27,275 | | | $ | 21,096 | | | $ | 22,602 | |
| | | 1.90% | | | | 1.89% | | | | 1.92% | | | | 1.90% | | | | 1.90% | |
| | | 1.94% | | | | 1.94% | | | | 1.98% | | | | 1.93% | | | | 1.94% | |
| | | (0.09% | ) | | | 0.90% | | | | 1.24% | | | | 1.03% | | | | 0.73% | |
| | |
| | | (0.13% | ) | | | 0.85% | | | | 1.18% | | | | 1.00% | | | | 0.69% | |
| | | 77% | | | | 103% | | | | 97% | | | | 93% | | | | 133% | |
59
Table of Contents
Financial highlights
Delaware Strategic Allocation Fund Class R
Selected data for each share of the Fund outstanding throughout each period were as follows:
| Net asset value, beginning of period |
| |
| Income (loss) from investment operations: |
| Net investment income1 |
| Net realized and unrealized gain (loss) |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| Ratios and supplemental data: |
| Net assets, end of period (000 omitted) |
| Ratio of expenses to average net assets3 |
| Ratio of expenses to average net assets prior to fees waived3 |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to fees waived |
| Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
| 3 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
60
Table of Contents
| | Year ended |
| | 3/31/21 | | 3/31/20 | | 3/31/19 | | 3/31/18 | | 3/31/17 |
| | $ | 9.08 | | | $ | 10.90 | | | $ | 11.40 | | | $ | 11.37 | | | $ | 10.76 | |
| | |
| | | |
| | | 0.04 | | | | 0.15 | | | | 0.19 | | | | 0.18 | | | | 0.14 | |
| | | 3.12 | | | | (1.12 | ) | | | (0.03 | ) | | | 0.70 | | | | 0.83 | |
| | | 3.16 | | | | (0.97 | ) | | | 0.16 | | | | 0.88 | | | | 0.97 | |
| | |
| | |
| | | (0.08 | ) | | | (0.17 | ) | | | (0.17 | ) | | | (0.18 | ) | | | (0.21 | ) |
| | | (0.09 | ) | | | (0.68 | ) | | | (0.49 | ) | | | (0.67 | ) | | | (0.15 | ) |
| | | (0.17 | ) | | | (0.85 | ) | | | (0.66 | ) | | | (0.85 | ) | | | (0.36 | ) |
| | |
| | $ | 12.07 | | | $ | 9.08 | | | $ | 10.90 | | | $ | 11.40 | | | $ | 11.37 | |
| | |
| | | 34.94% | | | | (9.82% | ) | | | 1.54% | | | | 8.01% | | | | 9.11% | |
| | |
| | | |
| | $ | 1,509 | | | $ | 1,564 | | | $ | 1,986 | | | $ | 1,580 | | | $ | 1,801 | |
| | | 1.40% | | | | 1.39% | | | | 1.42% | | | | 1.40% | | | | 1.40% | |
| | | 1.44% | | | | 1.44% | | | | 1.48% | | | | 1.43% | | | | 1.44% | |
| | | 0.41% | | | | 1.40% | | | | 1.74% | | | | 1.53% | | | | 1.23% | |
| | |
| | | 0.37% | | | | 1.35% | | | | 1.68% | | | | 1.50% | | | | 1.19% | |
| | | 77% | | | | 103% | | | | 97% | | | | 93% | | | | 133% | |
61
Table of Contents
Financial highlights
Delaware Strategic Allocation Fund Institutional Class
Selected data for each share of the Fund outstanding throughout each period were as follows:
| Net asset value, beginning of period |
| |
| Income (loss) from investment operations: |
| Net investment income1 |
| Net realized and unrealized gain (loss) |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| Ratios and supplemental data: |
| Net assets, end of period (000 omitted) |
| Ratio of expenses to average net assets3 |
| Ratio of expenses to average net assets prior to fees waived3 |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets prior to fees waived |
| Portfolio turnover |
| 1 | The average shares outstanding have been applied for per share information. |
| 2 | Total return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total return during all of the periods shown reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
| 3 | Expense ratios do not include expenses of the Underlying Funds in which the Fund invests. |
See accompanying notes, which are an integral part of the financial statements.
62
Table of Contents
| | Year ended |
| | 3/31/21 | | 3/31/20 | | 3/31/19 | | 3/31/18 | | 3/31/17 |
| | $ | 9.13 | | | $ | 10.95 | | | $ | 11.46 | | | $ | 11.42 | | | $ | 10.80 | |
| | |
| | |
| | | 0.10 | | | | 0.20 | | | | 0.25 | | | | 0.24 | | | | 0.19 | |
| | | 3.12 | | | | (1.12 | ) | | | (0.04 | ) | | | 0.71 | | | | 0.84 | |
| | | 3.22 | | | | (0.92 | ) | | | 0.21 | | | | 0.95 | | | | 1.03 | |
| | |
| | |
| | | (0.13 | ) | | | (0.22 | ) | | | (0.23 | ) | | | (0.24 | ) | | | (0.26 | ) |
| | | (0.09 | ) | | | (0.68 | ) | | | (0.49 | ) | | | (0.67 | ) | | | (0.15 | ) |
| | | (0.22 | ) | | | (0.90 | ) | | | (0.72 | ) | | | (0.91 | ) | | | (0.41 | ) |
| | |
| | $ | 12.13 | | | $ | 9.13 | | | $ | 10.95 | | | $ | 11.46 | | | $ | 11.42 | |
| | |
| | | 35.54% | | | | (9.29% | ) | | | 1.96% | | | | 8.60% | | | | 9.70% | |
| | |
| | |
| | $ | 40,579 | | | $ | 34,392 | | | $ | 47,910 | | | $ | 63,346 | | | $ | 79,009 | |
| | | 0.90% | | | | 0.89% | | | | 0.92% | | | | 0.90% | | | | 0.90% | |
| | | 0.94% | | | | 0.94% | | | | 0.98% | | | | 0.93% | | | | 0.94% | |
| | | 0.91% | | | | 1.90% | | | | 2.24% | | | | 2.03% | | | | 1.73% | |
| | | 0.87% | | | | 1.85% | | | | 2.18% | | | | 2.00% | | | | 1.69% | |
| | | 77% | | | | 103% | | | | 97% | | | | 93% | | | | 133% | |
63
Table of Contents
| Notes to financial statements | |
| Delaware Strategic Allocation Fund | March 31, 2021 |
Delaware Group® Foundation Funds (Trust) is organized as a Delaware statutory trust and offers one fund: Delaware Strategic Allocation Fund. The Trust is an open-end investment company. The Fund is considered diversified under the Investment Company Act of 1940, as amended (1940 Act), and offers Class A, Class C, Class R, and Institutional Class shares. Class A shares are sold with a maximum front-end sales charge of 5.75%. There is no front-end sales charge when you purchase $1,000,000 or more of Class A shares. However, if Delaware Distributors, L.P. (DDLP) paid your financial intermediary a commission on your purchase of $1,000,000 or more of Class A shares, for shares purchased prior to July 1, 2020, you will have to pay a limited contingent deferred sales charge (“Limited CDSC”) of 1.00% if you redeem these shares within the first year after your purchase and 0.50% if you redeem shares within the second year and for shares purchased on or after July 1, 2020, you will have to pay a Limited CDSC of 1.00% if you redeem these shares within the first 18 months after your purchase; unless a specific waiver of the Limited CDSC applies. Class C shares are sold with a CDSC of 1.00%, which will be incurred if redeemed during the first 12 months. Class R and Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors.
1. Significant Accounting Policies
The Fund follows accounting and reporting guidance under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 946, Financial Services — Investment Companies. The following accounting policies are in accordance with US generally accepted accounting principles (US GAAP) and are consistently followed by the Fund.
Security Valuation — Equity securities and exchange-traded funds (ETFs), except those traded on the Nasdaq Stock Market LLC (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange on the valuation date. Equity securities and ETFs traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If, on a particular day, an equity security or ETF does not trade, the mean between the bid and ask prices will be used, which approximates fair value. Equity securities listed on a foreign exchange are normally valued at the last quoted sales price on the valuation date. Debt securities, credit default swap (CDS) contracts, and interest rate swap contracts are valued based upon valuations provided by an independent pricing service or broker/counterparty and reviewed by management. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. US government and agency securities are valued at the mean between the bid and ask prices, which approximates fair value. Valuations for fixed income securities utilize matrix systems, which reflect such factors as security prices, yields, maturities, and ratings, and are supplemented by dealer and exchange quotations. For asset-backed securities, collateralized mortgage obligations (CMOs), commercial mortgage securities, and US government agency mortgage securities, pricing vendors utilize matrix pricing which considers prepayment speed, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity, and type as well as broker/dealer-supplied prices. Swap prices are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows, trades, and values of the underlying reference instruments. Foreign currency exchange contracts are valued at the mean between the bid and ask prices, which approximates fair value. Interpolated values
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are derived when the settlement date of the contract is an interim date for which quotations are not available. Futures contracts are valued at the daily quoted settlement prices. Exchange-traded options are valued at the last reported sale price or, if no sales are reported, at the mean between the last reported bid and ask prices, which approximates fair value. Open-end investment companies are valued at their published net asset value (NAV). Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Trust’s Board of Trustees (Board). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security. The Fund may use fair value pricing more frequently for securities traded primarily in non-US markets because, among other things, most foreign markets close well before the Fund values its securities, generally as of 4:00pm Eastern time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, government actions or pronouncements, aftermarket trading, or news events may have occurred in the interim. Whenever such a significant event occurs, the Fund may value foreign securities using fair value prices based on third-party vendor modeling tools (international fair value pricing). Restricted securities are valued at fair value using methods approved by the Board.
Federal and Foreign Income Taxes — No provision for federal income taxes has been made as the Fund intends to continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. The Fund evaluates tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the “more-likely-than-not” threshold are recorded as a tax benefit or expense in the current year. Management has analyzed the Fund’s tax positions taken or expected to be taken on the Fund’s federal income tax returns through the year ended March 31, 2021 and for all open tax years (years ended March 31, 2018–March 31, 2020), and has concluded that no provision for federal income tax is required in the Fund’s financial statements. In regard to foreign taxes only, the Fund has open tax years in certain foreign countries in which it invests in that may date back to the inception of the Fund. If applicable, the Fund recognizes interest accrued on unrecognized tax benefits in interest expense and penalties in “Other” on the “Statement of operations.” During the year ended March 31, 2021, the Fund did not incur any interest or tax penalties.
Class Accounting — Investment income, common expenses, and realized and unrealized gain (loss) on investments are allocated to the various classes of the Fund on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.
Underlying Funds — The Fund may invest in other investment companies (Underlying Funds) to the extent permitted by the 1940 Act. The Underlying Funds in which the Fund may invest include ETFs. The Fund will indirectly bear the investment management fees and other expenses of the Underlying Funds.
To Be Announced Trades (TBA) — The Fund may contract to purchase or sell securities for a fixed price at a transaction date beyond the customary settlement period (examples: when issued, delayed delivery, forward commitment, or TBA transactions) consistent with the Fund’s ability to manage its
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Notes to financial statements
Delaware Strategic Allocation Fund
1. Significant Accounting Policies (continued)
investment portfolio and meet redemption requests. These transactions involve a commitment by the Fund to purchase or sell securities for a predetermined price or yield with payment and delivery taking place more than three days in the future, or after a period longer than the customary settlement period for that type of security. No interest will be earned by the Fund on such purchases until the securities are delivered or the transaction is completed; however, the market value may change prior to delivery.
Foreign Currency Transactions — Transactions denominated in foreign currencies are recorded at the prevailing exchange rates on the valuation date in accordance with the Fund’s prospectus. The value of all assets and liabilities denominated in foreign currencies is translated daily into US dollars at the exchange rate of such currencies against the US dollar. Transaction gains or losses resulting from changes in exchange rates during the reporting period or upon settlement of the foreign currency transaction are reported in operations for the current period. The Fund generally bifurcates that portion of realized gains and losses on investments in debt securities which is due to changes in foreign exchange rates from that which is due to changes in market prices of debt securities. That portion of gains (losses), attributable to changes in foreign exchange rates, is included on the “Statement of operations” under “Net realized gain (loss) on foreign currencies.” For foreign equity securities, the realized gains and losses are included on the “Statement of operations” under “Net realized and unrealized gain (loss) on investments.” The Fund reports certain foreign currency related transactions as components of realized gains (losses) for financial reporting purposes, whereas such components are treated as ordinary income (loss) for federal income tax purposes.
Use of Estimates — The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the fair value of investments, the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and the differences could be material.
Other — Expenses directly attributable to the Fund are charged directly to the Fund. Other expenses common to various funds within the Delaware Funds® by Macquarie (Delaware Funds) are generally allocated among such fund on the basis of average net assets. Management fees and certain other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Discounts and premiums on debt securities are accreted or amortized to interest income, respectively, over the lives of the respective securities using the effective interest method. Premiums on callable debt securities are amortized to interest income to the earliest call date using the effective interest method. Realized gains (losses) on paydowns of asset-and mortgage-backed securities are classified as interest income. Distributions received from investments in real estate investment trusts (REITs) are recorded as dividend income on the ex-dividend date, subject to reclassification upon notice of the character of such distributions by the issuer. Foreign dividends are also recorded on the ex-dividend date or as soon after the ex-dividend date that the Fund is aware of such dividends, net of all tax withholdings, a portion of
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which may be reclaimable. Withholding taxes and reclaims on foreign dividends have been recorded in accordance with the Fund’s understanding of the applicable country’s tax rules and rates. The Fund may pay foreign capital gains taxes on certain foreign securities held, which are reported as components of realized losses for financial reporting purposes, whereas such components are treated as ordinary loss for federal income tax purposes. The Fund will accrue such taxes as applicable based upon current interpretations of the tax rules and regulations that exist in the markets in which it invests. The Fund declares and pays dividends from net investment income quarterly and distributions from net realized gain on investments, if any, annually. The Fund may distribute more frequently, if necessary for tax purposes. Dividends and distributions, if any, are recorded on the ex-dividend date.
The Fund receives earnings credits from its custodian when positive cash balances are maintained, which may be used to offset custody fees. There were no such earnings credits for the year ended March 31, 2021.
The Fund receives earnings credits from its transfer agent when positive cash balances are maintained, which may be used to offset transfer agent fees. If the amount earned is greater than $1, the expenses paid under this arrangement are included on the “Statement of operations” under “Dividend disbursing and transfer agent fees and expenses” with the corresponding expenses offset included under “Less expenses paid indirectly.” For the year ended March 31, 2021, the Fund earned $583 under this arrangement.
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates
In accordance with the terms of its investment management agreement, the Fund pays Delaware Management Company (DMC), a series of Macquarie Investment Management Business Trust and the investment manager, an annual fee which is calculated daily and paid monthly at the rates of 0.65% on the first $500 million of average daily net assets of the Fund, 0.60% on the next $500 million, 0.55% on the next $1.5 billion, and 0.50% on average daily net assets in excess of $2.5 billion.
DMC has contractually agreed to waive all or a portion of its management fee and/or pay/reimburse expenses (excluding any distribution and service (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 0.90% of the Fund’s average daily net assets from April 1, 2020 through March 31, 2021.* These waivers and reimbursements may only be terminated by agreement of DMC and the Fund. The waivers and reimbursements are accrued daily and received monthly.
Macquarie Investment Management Austria Kapitalanlage AG (MIMAK) is primarily responsible for the day-to-day management of the Fund’s portfolio and determines its asset allocation. For these services, DMC, not the Fund, pays MIMAK a fee, which is 0.12% of the average daily net assets of the Fund.
As determined by MIMAK from time to time, Macquarie Investment Management Global Limited (MIMGL) is responsible for managing real estate investment trust securities and other equity asset classes to which MIMAK may allocate assets. In addition, MIMAK may seek investment advice and recommendations from DMC’s affiliates: Macquarie Investment Management Europe Limited (MIMEL)
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Notes to financial statements
Delaware Strategic Allocation Fund
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)
and MIMGL. MIMAK may also permit MIMEL, MIMGL, and Macquarie Fund Management Hong Kong Limited (together, the “Affiliated Sub-Advisors”) to execute Fund security trades on behalf of MIMAK. MIMAK may also permit MIMEL and MIMGL to exercise investment discretion for securities in certain markets where MIMAK believes it will be beneficial to utilize MIMEL’s or MIMGL’s specialized market knowledge, and MIMAK may also seek quantitative support from MIMGL. Although the Affiliated Sub-Advisors serve as sub-advisors, DMC has ultimate responsibility for all investment advisory services. For these services, DMC, not the Fund, may pay each Affiliated Sub-Advisor a portion of its investment management fee.
Delaware Investments Fund Services Company (DIFSC), an affiliate of DMC, provides fund accounting and financial administrative oversight services to the Fund. For these services, DIFSC’s fees are calculated daily and paid monthly, based on the aggregate daily net assets of all funds within the Delaware Funds at the following annual rates: 0.00475% of the first $35 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $45 billion (Total Fee). Each fund in the Delaware Funds pays a minimum of $4,000, which, in aggregate, is subtracted from the Total Fee. Each fund then pays its portion of the remainder of the Total Fee on a relative NAV basis. This amount is included on the “Statement of operations” under “Accounting and administration expenses.” For the year ended March 31, 2021, the Fund was charged $12,091 for these services.
DIFSC is also the transfer agent and dividend disbursing agent of the Fund. For these services, DIFSC’s fees are calculated daily and paid monthly, based on the aggregate daily net assets of the retail funds within the Delaware Funds at the following annual rates: 0.014% of the first $20 billion; 0.011% of the next $5 billion; 0.007% of the next $5 billion; 0.005% of the next $20 billion; and 0.0025% of average daily net assets in excess of $50 billion. The fees payable to DIFSC under the shareholder services agreement described above are allocated among all retail funds in the Delaware Funds on a relative NAV basis. This amount is included on the “Statement of operations” under “Dividend disbursing and transfer agent fees and expenses.” For the year ended March 31, 2021, the Fund was charged $21,592 for these services. Pursuant to a sub-transfer agency agreement between DIFSC and BNY Mellon Investment Servicing (US) Inc. (BNYMIS), BNYMIS provides certain sub-transfer agency services to the Fund. Sub-transfer agency fees are paid by the Fund and are also included on the “Statement of operations” under “Dividend disbursing and transfer agent fees and expenses.” The fees that are calculated daily and paid as invoices are received on a monthly or quarterly basis.
Pursuant to a distribution agreement and distribution plan, the Fund pays DDLP, the distributor and an affiliate of DMC, annual 12b-1 fees of 1.00% and 0.50% of the average daily net assets of Class C and Class R shares, respectively. The fees are calculated daily and paid monthly. Institutional Class shares do not pay 12b-1 fee.
In connection with the merger with Delaware Balanced Fund, the Board has adopted a formula for calculating 12b-1 plan fees for the Fund’s Class A shares that went into effect on June 1, 1992. The Fund’s Class A shares are currently subject to a blended 12b-1 fee equal to the sum of: (1) 0.10% of the average daily net assets representing shares that were acquired prior to June 1, 1992, and (2) 0.25% of
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the average daily net assets representing shares that were acquired on or after June 1, 1992. All Class A shares will bear 12b-1 fees at the same blended rate, currently 0.24% of average daily net assets, based upon the allocation of the rates described on the previous page. This method of calculating Class A 12b-1 fees may be discontinued at the sole discretion of the Board. These fees are calculated daily and paid monthly.
As provided in the investment management agreement, the Fund bears a portion of the cost of certain resources shared with DMC, including the cost of internal personnel of DMC and/or its affiliates that provide legal, tax, and regulatory reporting services to the Fund. For the year ended March 31, 2021, the Fund was charged $14,180 for internal legal, tax, and regulatory reporting services provided by DMC and/or its affiliates’ employees. This amount is included on the “Statement of operations” under “Legal fees.”
For the year ended March 31, 2021, DDLP earned $8,566 for commissions on sales of the Fund’s Class A shares. For the year ended March 31, 2021, DDLP received gross CDSC commissions of $38 and $5,693 on redemptions of the Fund’s Class A and Class C shares, respectively, and these commissions were entirely used to offset upfront commissions previously paid by DDLP to broker/dealers on sales of those shares.
Trustees’ fees include expenses accrued by the Fund for each Trustee’s retainer and meeting fees. Certain officers of DMC, DIFSC, and DDLP are officers and/or Trustees of the Trust. These officers and Trustees are paid no compensation by the Fund.
In addition to the management fees and other expenses of the Fund, the Fund indirectly bears the investment management fees and other expenses of the investment companies (Underlying Funds) in which it invests. The amount of these fees and expenses incurred indirectly by the Fund will vary based upon the expense and fee levels of the Underlying Funds and the number of shares that are owned of the Underlying Funds at different times.
____________________
| * | The aggregate contractual waiver period covering this report is from July 26, 2019 through July 29, 2021. |
3. Investments
For the year ended March 31, 2021, the Fund made purchases and sales of investment securities other than short-term investments as follows:
| Purchases other than US government securities | | $ | 93,359,828 |
| Purchases of US government securities | | | 82,858,801 |
| Sales other than US government securities | | | 116,174,542 |
| Sales of US government securities | | | 84,691,214 |
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Notes to financial statements
Delaware Strategic Allocation Fund
3. Investments (continued)
The tax cost of investments includes adjustments to net unrealized appreciation (depreciation) which may not necessarily be the final tax cost basis adjustments, but approximates the tax basis unrealized gains and losses that may be realized and distributed to shareholders. At March 31, 2021, the cost and unrealized appreciation (depreciation) of investments and derivatives for federal income tax purposes for the Fund were as follows:
| Cost of investments and derivatives | | $ | 195,537,658 | |
| Aggregate unrealized appreciation of investments and derivatives | | $ | 65,450,773 | |
| Aggregate unrealized depreciation of investments and derivatives | | | (7,752,327 | ) |
| Net unrealized appreciation of investments and derivatives | | $ | 57,698,446 | |
US GAAP defines fair value as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A three-level hierarchy for fair value measurements has been established based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances. The Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-level hierarchy of inputs is summarized as follows:
| Level 1 – | Inputs are quoted prices in active markets for identical investments. (Examples: equity securities, open-end investment companies, futures contracts, and exchange-traded options contracts) |
| Level 2 – | Other observable inputs, including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or other market-corroborated inputs. (Examples: debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing, broker-quoted securities, and fair valued securities) |
| Level 3 – | Significant unobservable inputs, including the Fund’s own assumptions used to determine the fair value of investments. (Examples: broker-quoted securities and fair valued securities) |
Level 3 investments are valued using significant unobservable inputs. The Fund may also use an income-based valuation approach in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied due to the nature or duration of any restrictions on the disposition of the investments. Valuations may also be based upon current market
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prices of securities that are comparable in coupon, rating, maturity, and industry. The derived value of a Level 3 investment may not represent the value which is received upon disposition and this could impact the results of operations.
The following table summarizes the valuation of the Fund’s investments by fair value hierarchy levels as of March 31, 2021:
| | Level 1 | | Level 2 | | Level 3 | | Total |
| Securities | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | |
| Agency Collateralized Mortgage Obligations1 | | $ | — | | $ | 1,420,460 | | $ | 331,908 | | $ | 1,752,368 |
Agency Commercial Mortgage-Backed
Securities | | | — | | | 480,515 | | | — | | | 480,515 |
| Agency Mortgage-Backed Securities | | | — | | | 25,098,906 | | | — | | | 25,098,906 |
| Collateralized Debt Obligations | | | — | | | 3,101,411 | | | — | | | 3,101,411 |
| Common Stock | | | | | | | | | | | | |
| Communication Services | | | 12,724,051 | | | — | | | — | | | 12,724,051 |
| Consumer Discretionary | | | 16,297,602 | | | — | | | — | | | 16,297,602 |
| Consumer Staples | | | 10,837,122 | | | — | | | — | | | 10,837,122 |
| Energy | | | 5,058,105 | | | — | | | — | | | 5,058,105 |
| Financials | | | 21,844,877 | | | — | | | 233,793 | | | 22,078,670 |
| Healthcare | | | 18,401,769 | | | — | | | — | | | 18,401,769 |
| Industrials | | | 18,439,483 | | | — | | | — | | | 18,439,483 |
| Information Technology | | | 26,800,248 | | | — | | | — | | | 26,800,248 |
| Materials | | | 8,044,187 | | | — | | | — | | | 8,044,187 |
| Real Estate | | | 3,785,643 | | | 32,461 | | | — | | | 3,818,104 |
| Utilities | | | 3,591,344 | | | — | | | — | | | 3,591,344 |
| Corporate Bonds | | | — | | | 23,048,709 | | | — | | | 23,048,709 |
| Exchange-Traded Funds | | | 19,792,253 | | | — | | | — | | | 19,792,253 |
| Loan Agreements | | | — | | | 2,560,938 | | | — | | | 2,560,938 |
| Municipal Bonds | | | — | | | 783,146 | | | — | | | 783,146 |
| Non-Agency Asset-Backed Securities | | | — | | | 1,520,099 | | | — | | | 1,520,099 |
Non-Agency Collateralized Mortgage
Obligations | | | — | | | 2,370,377 | | | — | | | 2,370,377 |
Non-Agency Commercial Mortgage-Backed
Securities | | | — | | | 3,286,405 | | | — | | | 3,286,405 |
| Preferred Stock1 | | | 679,929 | | | 77,750 | | | — | | | 757,679 |
| Rights | | | 1,750 | | | — | | | — | | | 1,750 |
| Sovereign Bonds | | | — | | | 8,961,585 | | | — | | | 8,961,585 |
| US Treasury Obligations | | | — | | | 5,892,622 | | | — | | | 5,892,622 |
| Short-Term Investments | | | 6,440,916 | | | — | | | — | | | 6,440,916 |
| Total Value of Securities | | $ | 172,739,279 | | $ | 78,635,384 | | $ | 565,701 | | $ | 251,940,364 |
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Notes to financial statements
Delaware Strategic Allocation Fund
3. Investments (continued)
| | Level 1 | | Level 2 | | Level 3 | | Total |
| Derivatives2 | | | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | | | |
| Futures Contracts | | $ | 287,296 | | $ | — | | | $ | — | | $ | 287,296 | |
| Swap Contracts | | | — | | | 749,299 | | | | — | | | 749,299 | |
| Foreign Currency Exchange Contracts | | | — | | | 382,531 | | | | — | | | 382,531 | |
| Liabilities: | | | | | | | | | | | | | | |
| Foreign Currency Exchange Contracts | | $ | — | | $ | (32,744 | ) | | $ | — | | $ | (32,744 | ) |
| Swap Contracts | | | — | | | (90,642 | ) | | | — | | | (90,642 | ) |
| 1 | Security type is valued across multiple levels. Level 1 investments represent exchange-traded investments, Level 2 investments represent investments with observable inputs or matrix-priced investments, and Level 3 investments represent investments without observable inputs. The amounts attributed to Level 1 investments, Level 2 investments, and Level 3 investments represent the following percentages of the total market value of these security types: |
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
| Agency Collateralized Mortgage Obligations | | — | | | 81.06 | % | | 18.94 | % | | 100.00 | % |
| Preferred Stock | | 89.74 | % | | 10.26 | % | | — | | | 100.00 | % |
| Common Stock | | 99.82 | % | | 0.02 | % | | 0.16 | % | | 100.00 | % |
| 2 | Foreign currency exchange contracts, futures contracts and swap contracts are valued at the unrealized appreciation (depreciation) on the instrument at the year end. |
The security that has been valued at zero on the “Schedule of investments” is considered to be Level 3 investment in this table.
During the year ended March 31, 2021, there were no transfers into or out of Level 3 investments. The Fund’s policy is to recognize transfers into or out of Level 3 investments based on fair value at the beginning of the reporting period.
A reconciliation of Level 3 investments is presented when the Fund has a significant amount of Level 3 investments at the beginning, interim, or end of the period in relation to the Fund’s net assets. Management has determined not to provide a reconciliation of Level 3 investments as the Level 3 investments were not considered significant to the Fund’s net assets at the beginning, interim, or end of the year. Management has determined not to provide additional disclosure on Level 3 inputs since the Level 3 investments were not considered significant to the Fund’s net assets at the end of the year.
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4. Dividend and Distribution Information
Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP. Additionally, distributions from net gains on foreign currency transactions and net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the years ended March 31, 2021 and 2020 were as follows:
| Year ended |
| 3/31/21 | | 3/31/20 |
| Ordinary income | $ | 2,571,842 | | $ | 4,733,759 |
| Long-term capital gains | | 1,673,387 | | | 16,046,885 |
| Total | $ | 4,245,229 | | $ | 20,780,644 |
5. Components of Net Assets on a Tax Basis
As of March 31, 2021, the components of net assets on a tax basis were as follows:
| Shares of beneficial interest | | $ | 180,156,434 |
| Undistributed ordinary income | | | 4,778,247 |
| Undistributed long-term capital gains | | | 8,965,943 |
| Unrealized appreciation of investments, foreign currencies, and derivatives | | | 57,698,446 |
| Net assets | | $ | 251,599,070 |
The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales, partnership income, market discount and premium on debt instruments, mark-to-market of foreign currency exchange contracts, tax treatment of passive foreign investment companies (PFICs) and securities no longer considered to be PFICs, tax deferral of losses on straddles, mark-to-market on futures, and tax treatment of swap contracts.
For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Results of operations and net assets were not affected by these reclassifications. For the year ended March 31, 2021, the Fund had no reclassifications.
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Notes to financial statements
Delaware Strategic Allocation Fund
6. Capital Shares
Transactions in capital shares were as follows:
| | | Year ended | |
| | 3/31/21 | | 3/31/20 | |
| Shares sold: | | | | | |
| Class A | | 1,164,865 | | 522,851 | |
| Class C | | 51,963 | | 88,141 | |
| Class R | | 13,378 | | 11,461 | |
| Institutional Class | | 251,515 | | 472,279 | |
| | | | | | |
| Shares issued upon reinvestment of dividends and distributions: | | | | | |
| Class A | | 267,012 | | 1,338,660 | |
| Class C | | 17,486 | | 163,197 | |
| Class R | | 1,948 | | 14,655 | |
| Institutional Class | | 40,601 | | 177,920 | |
| | 1,808,768 | | 2,789,164 | |
| | | | | | |
| Shares redeemed: | | | | | |
| Class A | | (2,220,630 | ) | (2,578,339 | ) |
| Class C | | (1,109,200 | ) | (791,327 | ) |
| Class R | | (62,561 | ) | (36,121 | ) |
| Institutional Class | | (716,479 | ) | (1,257,360 | ) |
| | (4,108,870 | ) | (4,663,147 | ) |
| Net decrease | | (2,300,102 | ) | (1,873,983 | ) |
Certain shareholders may exchange shares of one class for shares of another class in the same Fund. These exchange transactions are included as subscriptions and redemptions in the table above and on the “Statements of changes in net assets.” For the years ended March 31, 2021 and 2020, the Fund had the following exchange transactions:
| | Exchange Redemptions | | Exchange Subscriptions | | | | | |
| | | | | | | | | | | | | | Institutional | | | | | |
| | Class A | | Class C | | Class A | | Class | | | | | |
| | Shares | | Shares | | Shares | | Shares | | Value |
| Year ended | | | | | | | | | | | | | | | | | | | | | |
| 3/31/21 | | | 6,725 | | | | 195,166 | | | | 194,977 | | | | 6,719 | | | | $ | 2,390,829 | |
| Year ended | | | | | | | | | | | | | | | | | | | | | |
| 3/31/20 | | | 9,498 | | | | 37,071 | | | | 28,422 | | | | 18,126 | | | | | 505,356 | |
7. Line of Credit
The Fund, along with certain other funds in the Delaware Funds (Participants), was a participant in a $250,000,000 revolving line of credit (Agreement) intended to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. The Agreement was
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increased to $275,000,000 on May 6, 2020. Under the Agreement, the Participants were charged an annual commitment fee of 0.15%, which was allocated across the Participants based on a weighted average of the respective net assets of each Participant. The Participants were permitted to borrow up to a maximum of one-third of their net assets under the Agreement. Each Participant was individually, and not jointly, liable for its particular advances, if any, under the line of credit. The line of credit available under the Agreement expired on November 2, 2020.
On November 2, 2020, the Fund, along with the other Participants entered into an amendment to the Agreement for an amount of $225,000,000 to be used as described above. It operates in substantially the same manner as the original Agreement with the addition of an upfront fee of 0.05%, which was allocated across the Participants. The line of credit available under the Agreement expires on November 1, 2021.
The Fund had no amounts outstanding as of March 31, 2021, or at any time during the year then ended.
8. Derivatives
US GAAP requires disclosures that enable investors to understand: (1) how and why an entity uses derivatives; (2) how they are accounted for; and (3) how they affect an entity’s results of operations and financial position.
Foreign Currency Exchange Contracts — The Fund may enter into foreign currency exchange contracts and foreign cross currency exchange contracts as a way of managing foreign exchange rate risk. The Fund may enter into these contracts to fix the US dollar value of a security that it has agreed to buy or sell for the period between the date the trade was entered into and the date the security is delivered and paid for. The Fund may also enter into these contracts to hedge the US dollar value of securities it already owns that are denominated in foreign currencies. In addition, the Fund may enter into these contracts to facilitate or expedite the settlement of portfolio transactions. The change in value is recorded as an unrealized gain or loss. When the contract is closed, a realized gain or loss is recorded equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
The use of foreign currency exchange contracts and foreign cross currency exchange contracts does not eliminate fluctuations in the underlying prices of the securities, but does establish a rate of exchange that can be achieved in the future. Although foreign currency exchange contracts and foreign cross currency exchange contracts limit the risk of loss due to an unfavorable change in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency change favorably. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. The Fund’s maximum risk of loss from counterparty credit risk is the value of its currency exchanged with the counterparty. The risk is generally mitigated by having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to the Fund to cover the Fund’s exposure to the counterparty.
At March 31, 2021, the Fund received $290,000 in cash collateral for open foreign currency exchange contracts, which is included in “Cash collateral due to brokers” on the “Statement of assets and liabilities.”
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Notes to financial statements
Delaware Strategic Allocation Fund
8. Derivatives (continued)
During the year ended March 31, 2021, the Fund entered into foreign currency exchange contracts to hedge the U.S. dollar value of securities it already owns that are denominated in foreign currencies to increase/decrease exposure to foreign currencies, to fix the U.S. dollar value of a security between trade date and settlement date, and to facilitate or expedite the settlement of portfolio transactions.
Futures Contracts — A futures contract is an agreement in which the writer (or seller) of the contract agrees to deliver to the buyer an amount of cash or securities equal to a specific dollar amount times the difference between the value of a specific security or index at the close of the last trading day of the contract and the price at which the agreement is made. The Fund may use futures in the normal course of pursuing its investment objective. The Fund may invest in futures contracts to hedge its existing portfolio securities against fluctuations in value caused by changes in interest rates or market conditions. Upon entering into a futures contract, the Fund deposits cash or pledges US government securities to a broker, equal to the minimum “initial margin” requirements of the exchange on which the contract is traded. Subsequent payments are received from the broker or paid to the broker each day, based on the daily fluctuation in the market value of the contract. These receipts or payments are known as “variation margin” and are recorded daily by the Fund as unrealized gains or losses until the contracts are closed. When the contracts are closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Risks of entering into futures contracts include potential imperfect correlation between the futures contracts and the underlying securities and the possibility of an illiquid secondary market for these instruments. When investing in futures, there is reduced counterparty credit risk to the Fund because futures are exchange-traded and the exchange’s clearinghouse, as counterparty to all exchange-traded futures, guarantees against default. At March 31, 2021, the Fund posted $181,720 in cash as collateral for open futures contracts, which is presented as “Cash collateral due from broker” on the “Statement of assets and liabilities.”
During the year ended March 31, 2021, the Fund used futures contracts to hedge the Fund’s existing portfolio securities against fluctuations in value caused by changes in interest rates or market conditions.
Options Contracts — The Fund may enter into options contracts in the normal course of pursuing its investment objective. The Fund may buy or write options contracts for any number of reasons, including without limitation: to manage the Fund’s exposure to changes in securities prices caused by interest rates or market conditions and foreign currencies; as an efficient means of adjusting the Fund’s overall exposure to certain markets; to protect the value of portfolio securities; and as a cash management tool. The Fund may buy or write call or put options on securities, futures, swaps, swaptions, financial indices, and foreign currencies. When the Fund buys an option, a premium is paid and an asset is recorded and adjusted on a daily basis to reflect the current market value of the option purchased. When the Fund writes an option, a premium is received and a liability is recorded and adjusted on a daily basis to reflect the current market value of the option written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is treated as realized gain or loss. If a call option is exercised, the premium is added to the
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proceeds from the sale of the underlying security in determining whether the Fund has a realized gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund, as writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option. When writing options, the Fund is subject to minimal counterparty risk because the counterparty is only obligated to pay premiums and does not bear the market risk of an unfavorable market change. There were no transactions in options written during the year ended March 31, 2021.
During the year ended March 31, 2021, the Fund used options contracts to manage the Fund’s exposure to changes in securities prices caused by interest rates or market conditions.
Swap Contracts — The Fund may enter into interest rate swap contracts and CDS contracts in the normal course of pursuing its investment objective. The Fund may enter into interest rate swaps to manage its sensitivity to interest rates or to hedge against changes in interest rates. The Fund may enter into CDS contracts in order to hedge against a credit event, to enhance total return or to gain exposure to certain securities or markets. The Fund will not be permitted to enter into any swap transactions unless, at the time of entering into such transactions, the unsecured long-term debt of the actual counterparty, combined with any credit enhancements, is rated at least BBB- by Standard & Poor’s Financial Services LLC (S&P) or Baa3 by Moody’s Investors Service, Inc. (Moody’s) or is determined to be of equivalent credit quality by DMC.
Interest Rate Swaps. An interest rate swap contract is an exchange of interest rates between counterparties. In one instance, an interest rate swap involves payments received by the Fund from another party based on a variable or floating interest rate, in return for making payments based on a fixed interest rate. An interest rate swap can also work in reverse with the Fund receiving payments based on a fixed interest rate and making payments based on a variable or floating interest rate. Interest rate swaps may be used to adjust the Fund’s sensitivity to interest rates or to hedge against changes in interest rates. Periodic payments on such contracts are accrued daily and recorded as unrealized appreciation (depreciation) on swap contracts. Upon periodic payment (receipt) or termination of the contract, such amounts are recorded as realized gains or losses on swap contracts. The Fund’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from/paid to the counterparty over the interest rate swap contract’s remaining life, to the extent that the amount is positive. This risk is mitigated by (1) for bilateral swap contracts, having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to the Fund to cover the Fund’s exposure to the counterparty, and (2) for cleared swaps, trading these instruments through a central counterparty.
During the year ended March 31, 2021, the Fund entered into interest rate swap contracts to manage the Fund’s sensitivity to interest rates or to hedge against changes in interest rates.
Credit Default Swaps. A CDS contract is a risk-transfer instrument through which one party (purchaser of protection) transfers to another party (seller of protection) the financial risk of a credit event (as defined in the CDS agreement), as it relates to a particular reference security or basket of securities (such as an index). In exchange for the protection offered by the seller of protection, the purchaser of protection agrees to pay the seller of protection a periodic amount at a stated rate that is applied to the notional
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Notes to financial statements
Delaware Strategic Allocation Fund
8. Derivatives (continued)
amount of the CDS contract. In addition, an upfront payment may be made or received by the Fund in connection with an unwinding or assignment of a CDS contract. Upon the occurrence of a credit event, the seller of protection would pay the par (or other agreed-upon) value of the reference security (or basket of securities) to the counterparty. Credit events generally include, among others, bankruptcy, failure to pay, and obligation default.
During the year ended March 31, 2021, the Fund entered into CDS contracts as a purchaser of protection. Periodic payments (receipts) on such contracts are accrued daily and recorded as unrealized losses (gains) on swap contracts. Upon payment (receipt), such amounts are recorded as realized losses (gains) on swap contracts. Upfront payments made or received in connection with CDS contracts are amortized over the expected life of the CDS contracts as unrealized losses (gains) on swap contracts. The change in value of CDS contracts is recorded daily as unrealized appreciation or depreciation. A realized gain or loss is recorded upon a credit event (as defined in the CDS agreement) or the maturity or termination of the agreement. Initial margin and variation margin are posted to central counterparties for centrally cleared CDS basket trades, as determined by the applicable central counterparty. During the year ended March 31, 2021, the Fund did not enter into any CDS contracts as a seller of protection.
CDS contracts may involve greater risks than if the Fund had invested in the reference obligation directly. CDS contracts are subject to general market risk, liquidity risk, counterparty risk, and credit risk. The Fund’s maximum risk of loss from counterparty credit risk, either as the seller of protection or the buyer of protection, is the fair value of the contract. This risk is mitigated by (1) for bilateral swap contracts, having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to the Fund to cover the Fund’s exposure to the counterparty, and (2) for cleared swaps, trading these instruments through a central counterparty.
During the year ended March 31, 2021, the Fund entered into CDS contracts to hedge against credit events.
Swaps Generally. For centrally cleared swaps, payments are received from the broker or paid to the broker each day, based on the daily fluctuation in the market value of the contract. These receipts or payments are known as “variation margin” and are recorded by the Fund as unrealized gains or losses until the contracts are closed. When the contracts are closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The value of open swaps may differ from that which would be realized in the event the Fund terminated its position in the contract on a given day. Risks of entering into these contracts include the potential inability of the counterparty to meet the terms of the contracts. This type of risk is generally limited to the amount of favorable movement in the value of the underlying security, instrument, or basket of instruments, if any, at the day of default. Risks also arise from potential losses from adverse market movements and such losses could exceed the unrealized amounts shown on the “Schedule of investments.”
At March 31, 2021, for bilateral derivative contracts, Fund posted $442,513 in cash collateral for open centrally cleared interest rate swap contracts, which is included in “Cash collateral due from brokers” on the “Statement of assets and liabilities.”
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Fair values of derivative instruments as of March 31, 2021 were as follows:
| | Asset Derivatives Fair Value |
| | | | | | | | | | Interest | | | | | | | | |
| Statement of Assets and | | Currency | | Equity | | Rate | | Credit | | | |
| Liabilities Location | | Contracts | | Contracts | | Contracts | | Contracts | | Total |
| Unrealized appreciation on | | | | | | | | | | | | | | | | | | | |
| foreign currency | | | | | | | | | | | | | | | | | | | |
| exchange contracts | | $ | 382,531 | | | $ | — | | | $ | — | | | $ | — | | | $ | 382,531 |
| Variation margin due from | | | | | | | | | | | | | | | | | | | |
| broker on futures | | | | | | | | | | | | | | | | | | | |
| contracts** | | | — | | | | — | | | | 287,296 | | | | — | | | | 287,296 |
| Variation margin due from | | | | | | | | | | | | | | | | | | | |
| brokers on centrally | | | | | | | | | | | | | | | | | | | |
| cleared interest rate swap | | | | | | | | | | | | | | | | | | | |
| contracts** | | | — | | | | — | | | | 749,299 | | | | — | | | | 749,299 |
| Total | | $ | 382,531 | | | $ | — | | | $ | 1,036,595 | | | $ | — | | | $ | 1,419,126 |
| ** | Includes cumulative appreciation (depreciation) of centrally cleared swap contracts from the date the contracts were opened through March 31, 2021. Only current day variation margin is reported on Delaware Strategic Allocation Fund’s “Statements of assets and liabilities.” |
| | Liability Derivatives Fair Value |
| | | | | | | | | | | Interest | | | | | | | | | |
| Statement of Assets and | | Currency | | Equity | | Rate | | Credit | | | | |
| Liabilities Location | | Contracts | | Contracts | | Contracts | | Contracts | | Total |
| Unrealized depreciation on | | | | | | | | | | | | | | | | | | | | | | |
| foreign currency | | | | | | | | | | | | | | | | | | | | | | |
| exchange contracts | | $ | (32,744 | ) | | | $ | — | | | $ | — | | | | $ | — | | | $ | (32,744 | ) |
| Variation margin due to | | | | | | | | | | | | | | | | | | | | | | |
| brokers on centrally | | | | | | | | | | | | | | | | | | | | | | |
| cleared credit default | | | | | | | | | | | | | | | | | | | | | | |
| swap contracts** | | | — | | | | | — | | | | (90,642 | ) | | | | — | | | | (90,642 | ) |
| Total | | $ | (32,744 | ) | | | $ | — | | | $ | (90,642 | ) | | | $ | — | | | $ | (123,386 | ) |
| ** | Includes cumulative appreciation (depreciation) of centrally cleared swap contracts from the date the contracts were opened through March 31, 2021. Only current day variation margin is reported on Delaware Strategic Allocation Fund’s “Statements of assets and liabilities.” |
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Notes to financial statements
Delaware Strategic Allocation Fund
8. Derivatives (continued)
The effect of derivative instruments on the “Statement of operations” for the year ended March 31, 2021 was as follows:
| | Net Realized Gain (Loss) on: | | | | |
| | Foreign | | | | | | | | | | | | | | | | | |
| | Currency | | | | | | | | | | | | | | | | | |
| | Exchange | | Futures | | Options | | Swap | | | | |
| | Contracts | | Contracts | | Purchased | | Contracts | | Total |
| Currency contracts | | $ | (527,008 | ) | | $ | — | | | $ | — | | | | $ | — | | | $ | (527,008 | ) |
| Interest rate contracts | | | — | | | | 166,534 | | | | — | | | | | (2,027,422 | ) | | | (1,860,888 | ) |
| Equity contracts | | | — | | | | — | | | | (583 | ) | | | | — | | | | (583 | ) |
| Credit contracts | | | — | | | | — | | | | — | | | | | 103,004 | | | | 103,004 | |
| Total | | $ | (527,008 | ) | | $ | 166,534 | | | $ | (583 | ) | | | $ | (1,924,418 | ) | | $ | (2,285,475 | ) |
| | Net Change in Unrealized Appreciation (Depreciation) of: | | | | |
| | Foreign | | | | | | | | | | | | | | | |
| | Currency | | | | | | | | | | | | | | | |
| | Exchange | | Futures | | Swap | | | | |
| | Contracts | | Contracts | | Contracts | | Total |
| Currency contracts | | | $ | 240,318 | | | | $ | — | | | | $ | — | | | | $ | 240,318 | |
| Interest rate contracts | | | | — | | | | | 362,019 | | | | | 2,594,403 | | | | | 2,956,422 | |
| Credit contracts | | | | — | | | | | — | | | | | (203,148 | ) | | | | (203,148 | ) |
| Total | | | $ | 240,318 | | | | $ | 362,019 | | | | $ | 2,391,255 | | | | $ | 2,993,592 | |
The table below summarizes the average balance of derivative holdings by the Fund during the year ended March 31, 2021:
| | Long Derivative | | Short Derivative |
| | Volume | | Volume |
| Foreign currency exchange contracts (average notional value) | | | $ | 90,837 | | | | $ | 6,205,304 |
| Futures contracts (average notional value) | | | | 1,104,498 | | | | | 6,298,886 |
| Options contracts (average notional value)* | | | | 9 | | | | | — |
| CDS contracts (average notional value)** | | | | 2,143,016 | | | | | — |
| Interest rate swap contracts (average notional value)*** | | | | — | | | | | 17,452,956 |
| Interest rate swap contracts (average notional value)*** | | | | — | | | AUD | | 1,334,365 |
| * | Long represents purchased options and short represents written options. |
| ** | Long represents buying protection and short represents selling protection. |
| *** | Long represents receiving fixed interest payments and short represents paying fixed interest payments. |
9. Offsetting
The Fund entered into an International Swaps and Derivatives Association, Inc. Master Agreement (ISDA Master Agreement) or a similar agreement with certain of its derivative contract counterparties in order to
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better define its contractual rights and to secure rights that will help the Fund mitigate its counterparty risk. An ISDA Master Agreement is a bilateral agreement between the Fund and a counterparty that governs over-the-counter (OTC) derivatives and foreign exchange contracts and typically contains, among other things, collateral posting items and netting provisions in the event of a default and/or termination event. Under an ISDA Master Agreement, the Fund may, under certain circumstances, offset with the counterparty certain derivative financial instruments’ payables and/or receivables with collateral held and/or posted and create one single net payment. The provisions of the ISDA Master Agreement typically permit a single net payment in the event of default (close-out), including the bankruptcy or insolvency of the counterparty. However, bankruptcy or insolvency laws of a particular jurisdiction may impose restrictions on or prohibitions against the right of offset in bankruptcy, insolvency, or other events.
For financial reporting purposes, the Fund does not offset derivative assets and derivative liabilities that are subject to netting arrangements on the “Statement of assets and liabilities.”
At March 31, 2021, the Fund had the following assets and liabilities subject to offsetting provisions:
Offsetting of Financial Assets and Liabilities and Derivative Assets and Liabilities
| | Gross Value of | | Gross Value of | | | | |
| Counterparty | | Derivative Asset | | Derivative Liability | | Net Position |
| Bank of New York Mellon | | | $ | 31 | | | | $ | (1,709 | ) | | | $ | (1,678 | ) |
| JPMorgan Chase Bank | | | | 209,360 | | | | | — | | | | | 209,360 | |
| TD Bank | | | | 173,140 | | | | | (31,035 | ) | | | | 142,105 | |
| Total | | | $ | 382,531 | | | | $ | (32,744 | ) | | | $ | 349,787 | |
| | | | | | Fair Value of | | | | | | | | Fair Value of | | | | | | | | | | | |
| | | | | | Non-Cash | | Cash Collateral | | Non-Cash | | Cash Collateral | | | | | | |
| Counterparty | | Net Position | | Collateral Received | | Received(a) | | Collateral Pledged | | Pledged | | Net Exposure(b) |
| Bank of New York | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Mellon | | $ | (1,678 | ) | | | $ | — | | | | $ | — | | | | | $ | — | | | | $ | — | | | | $ | (1,678 | ) | |
| JPMorgan Chase | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Bank | | | 209,360 | | | | | — | | | | | (180,000 | ) | | | | | — | | | | | — | | | | | 29,360 | | |
| TD Bank | | | 142,105 | | | | | — | | | | | (110,000 | ) | | | | | — | | | | | — | | | | | 32,105 | | |
| Total | | $ | 349,787 | | | | $ | — | | | | $ | (290,000 | ) | | | | $ | — | | | | $ | — | | | | $ | 59,787 | | |
| (a) | The value of the related collateral exceeded the value of the derivatives as of March 31, 2021, as applicable. |
| (b) | Net exposure represents the receivable (payable) that would be due from (to) the counterparty in the event of default. |
10. Securities Lending
The Fund, along with other funds in the Delaware Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with The Bank of New York Mellon (BNY Mellon). At the time a security is loaned, the borrower must post collateral equal to the required percentage of the market value
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Notes to financial statements
Delaware Strategic Allocation Fund
10. Securities Lending (continued)
of the loaned security, including any accrued interest. The required percentage is: (1) 102% with respect to US securities and foreign securities that are denominated and payable in US dollars; and (2) 105% with respect to foreign securities. With respect to each loan, if on any business day the aggregate market value of securities collateral plus cash collateral held is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral by the end of the following business day, which, together with the collateral already held, will be not less than the applicable initial collateral requirements for such security loan. If the aggregate market value of securities collateral and cash collateral held with respect to a security loan exceeds the applicable initial collateral requirement, upon the request of the borrower, BNY Mellon must return enough collateral to the borrower by the end of the following business day to reduce the value of the remaining collateral to the applicable initial collateral requirement for such security loan. As a result of the foregoing, the value of the collateral held with respect to a loaned security on any particular day, may be more or less than the value of the security on loan. The collateral percentage with respect to the market value of the loaned security is determined by the security lending agent.
Cash collateral received by each fund of the Trust is generally invested in a series of individual separate accounts, each corresponding to a fund. The investment guidelines permit each separate account to hold certain securities that would be considered eligible securities for a money market fund. Cash collateral received is generally invested in government securities; certain obligations issued by government sponsored enterprises; repurchase agreements collateralized by US Treasury securities; obligations issued by the central government of any Organization for Economic Cooperation and Development (OECD) country or its agencies, instrumentalities, or establishments; obligations of supranational organizations; commercial paper, notes, bonds, and other debt obligations; certificates of deposit, time deposits, and other bank obligations; and asset-backed securities. A fund can also accept US government securities and letters of credit (non-cash collateral) in connection with securities loans.
In the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Fund or, at the discretion of the lending agent, replace the loaned securities. The Fund continues to record dividends or interest, as applicable, on the securities loaned and is subject to changes in value of the securities loaned that may occur during the term of the loan. The Fund has the right under the Lending Agreement to recover the securities from the borrower on demand. With respect to security loans collateralized by non-cash collateral, the Fund receives loan premiums paid by the borrower. With respect to security loans collateralized by cash collateral, the earnings from the collateral investments are shared among the Fund, the security lending agent, and the borrower. The Fund records security lending income net of allocations to the security lending agent and the borrower.
The Fund may incur investment losses as a result of investing securities lending collateral. This could occur if an investment in the collateral investment account defaulted or became impaired. Under those
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circumstances, the value of the Fund’s cash collateral account may be less than the amount the Fund would be required to return to the borrowers of the securities and the Fund would be required to make up for this shortfall.
During the year ended March 31, 2021, the Fund had no securities out on loan.
11. Credit and Market Risk
Beginning in January 2020, global financial markets have experienced and may continue to experience significant volatility resulting from the spread of a novel coronavirus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand, and general market uncertainty. The effects of COVID-19 have and may continue to adversely affect the global economy, the economies of certain nations, and individual issuers, all of which may negatively impact the Fund’s performance.
Investments in equity securities in general are subject to market risks that may cause their prices to fluctuate over time. Fluctuations in the value of equity securities in which the Funds invests will cause the NAV of the Funds to fluctuate.
When interest rates rise, fixed income securities (i.e., debt obligations) generally will decline in value. These declines in value are greater for fixed income securities with longer maturities or durations.
IBOR is the risk that changes related to the use of the London interbank offered rate (LIBOR) and other interbank offered rate (collectively, IBORs ) could have adverse impacts on financial instruments that reference LIBOR (or the corresponding IBOR). The abandonment of LIBOR could affect the value and liquidity of instruments that reference LIBOR. The use of alternative reference rate products may impact investment strategy performance. These risks may also apply with respect to changes in connection with other IBORs, such as the euro overnight index average (EONIA), which are also the subject of recent reform.
Some countries in which the Fund may invest require governmental approval for the repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, if there is deterioration in a country’s balance of payments or for other reasons, a country may impose temporary restrictions on foreign capital remittances abroad.
The securities exchanges of certain foreign markets are substantially smaller, less liquid, and more volatile than the major securities markets in the US. Consequently, acquisition and disposition of securities by the Fund may be inhibited. In addition, a significant portion of the aggregate market value of equity securities listed on the major securities exchanges in emerging markets is held by a smaller number of investors. This may limit the number of shares available for acquisition or disposition by the Fund.
The Fund invests a portion of its assets in high yield fixed income securities, which are securities rated lower than BBB- by S&P and Baa3 by Moody’s, or similarly rated by another nationally recognized statistical rating organization. Investments in these higher yielding securities are generally accompanied
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Notes to financial statements
Delaware Strategic Allocation Fund
11. Credit and Market Risk (continued)
by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.
The Fund invests a significant portion of its assets in small companies and may be subject to certain risks associated with ownership of securities of such companies. Investments in small-sized companies may be more volatile than investments in larger companies for a number of reasons, which include limited financial resources or a dependence on narrow product lines.
The Fund invests in fixed income securities whose value is derived from an underlying pool of mortgages or consumer loans. The value of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be adversely affected by shifts in the market’s perception of the issuers and changes in interest rates. Investors receive principal and interest payments as the underlying mortgages and consumer loans are paid back. Some of these securities are CMOs. CMOs are debt securities issued by US government agencies or by financial institutions and other mortgage lenders, which are collateralized by a pool of mortgages held under an indenture. Prepayment of mortgages may shorten the stated maturity of the obligations and can result in a loss of premium, if any has been paid. Certain of these securities may be stripped (securities which provide only the principal or interest feature of the underlying security). The yield to maturity on an interest-only CMO is extremely sensitive not only to changes in prevailing interest rates, but also to the rate of principal payments (including prepayments) on the related underlying mortgage assets. A rapid rate of principal payments may have a material adverse effect on the Fund’s yield to maturity. If the underlying mortgage assets experience greater than anticipated prepayments of principal, the Fund may fail to fully recoup its initial investment in these securities even if the securities are rated in the highest rating categories.
The Fund invests in REITs and is subject to the risks associated with that industry. If the Fund holds real estate directly as a result of defaults or receives rental income directly from real estate holdings, its tax status as a regulated investment company may be jeopardized. There were no direct real estate holdings during the year ended March 31, 2021. The Fund’s REIT holdings are also affected by interest rate changes, particularly if the REITs it holds use floating rate debt to finance their ongoing operations.
The Fund invests in certain obligations that may have liquidity protection designed to ensure that the receipt of payments due on the underlying security is timely. Such protection may be provided through guarantees, insurance policies, or letters of credit obtained by the issuer or sponsor through third parties, through various means of structuring the transaction, or through a combination of such approaches. The Fund will not pay any additional fees for such credit support, although the existence of credit support may increase the price of the security.
The Fund invests in bank loans and other securities that may subject it to direct indebtedness risk, the risk that the Fund will not receive payment of principal, interest, and other amounts due in connection with these investments and will depend primarily on the financial condition of the borrower. Loans that are fully secured offer the Fund more protection than unsecured loans in the event of nonpayment of scheduled interest or principal, although there is no assurance that the liquidation of collateral from a secured loan would satisfy the corporate borrower’s obligation, or that the collateral can be liquidated.
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Some loans or claims may be in default at the time of purchase. Certain of the loans and the other direct indebtedness acquired by the Fund may involve revolving credit facilities or other standby financing commitments that obligate the Fund to pay additional cash on a certain date or on demand. These commitments may require the Fund to increase its investment in a company at a time when the Fund might not otherwise decide to do so (including at a time when the company’s financial condition makes it unlikely that such amounts will be repaid). To the extent that the Fund is committed to advance additional funds, it will at all times hold and maintain cash or other high-grade debt obligations in an amount sufficient to meet such commitments. When a loan agreement is purchased, the Fund may pay an assignment fee. On an ongoing basis, the Fund may receive a commitment fee based on the undrawn portion of the underlying line of credit portion of a loan agreement. Prepayment penalty fees are received upon the prepayment of a loan agreement by the borrower. Prepayment penalty, facility, commitment, consent and amendment fees are recorded to income as earned or paid.
As the Fund may be required to rely upon another lending institution to collect and pass on to the Fund amounts payable with respect to the loan and to enforce the Fund’s rights under the loan and other direct indebtedness, an insolvency, bankruptcy, or reorganization of the lending institution may delay or prevent the Fund from receiving such amounts. The highly leveraged nature of many loans may make them especially vulnerable to adverse changes in economic or market conditions. Investments in such loans and other direct indebtedness may involve additional risk to the Fund.
The Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A promulgated under the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair the Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Board has delegated to DMC, the day-to-day functions of determining whether individual securities are liquid for purposes of the Fund’s limitation on investments in illiquid securities. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to the Fund’s 15% limit on investments in illiquid securities. Rule 144A securities have been identified on the “Schedule of investments.”
12. Contractual Obligations
The Fund enters into contracts in the normal course of business that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
13. Recent Accounting Pronouncements
In August 2018, FASB issued an Accounting Standards Update (ASU), ASU 2018-13, which changes certain fair value measurement disclosure requirements. ASU 2018-13, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for the timing of transfers between levels and
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Notes to financial statements
Delaware Strategic Allocation Fund
13. Recent Accounting Pronouncements (continued)
the valuation process for Level 3 fair value measurements. ASU 2018-13 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. Management has implemented ASU 2018-13 on the financial statements.
In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in ASU 2020-04 provide optional temporary financial reporting relief from the effect of certain types of contract modifications due to the planned discontinuation of LIBOR and other interbank-offered based reference rates as of the end of 2021. ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period March 12, 2020 through December 31, 2022. As of the financial reporting period, Management is evaluating the impact of applying this ASU.
14. Subsequent Events
On December 2, 2020, Waddell & Reed Financial, Inc. (WDR), the parent company of Ivy Investment Management Company, the investment adviser of the Ivy Funds Complex (the Ivy Funds), and Macquarie Management Holdings, Inc., the U.S. holding company for Macquarie Group Limited’s U.S. asset management business (Macquarie), announced that they had entered into an agreement whereby Macquarie would acquire the investment management business of WDR (the “Transaction”). The Transaction closed on April 30, 2021. The Ivy Funds, as part of Delaware Funds® by Macquarie, are now managed by DMC and distributed by DDLP.
Management has determined that no other material events or transactions occurred subsequent to March 31, 2021, that would require recognition or disclosure in the Fund’s financial statements.
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Report of independent
registered public accounting firm
To the Board of Trustees of Delaware Group® Foundation Funds and Shareholders of Delaware Strategic Allocation Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of Delaware Strategic Allocation Fund (the “Fund”) as of March 31, 2021, the related statement of operations for the year ended March 31, 2021, the statements of changes in net assets for each of the two years in the period ended March 31, 2021, including the related notes, and the financial highlights for each of the five years in the period ended March 31, 2021 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of March 31, 2021, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period ended March 31, 2021 and the financial highlights for each of the five years in the period ended March 31, 2021 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation of securities owned as of March 31, 2021 by correspondence with the custodian, transfer agents and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
May 20, 2021
We have served as the auditor of one or more investment companies in Delaware Funds® by Macquarie since 2010.
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Other Fund information (Unaudited)
Delaware Strategic Allocation Fund
Tax Information
The information set forth below is for the Fund’s fiscal year as required by federal income tax laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of the Fund. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in January of each year. Please consult your tax advisor for proper treatment of this information.
All disclosures are based on financial information available as of the date of this annual report and, accordingly are subject to change. For any and all items requiring reporting, it is the intention of the Fund to report the maximum amount permitted under the Internal Revenue Code and the regulations thereunder.
For the fiscal year ended March 31, 2021, the Fund reports distributions paid during the year as follows:
| (A) Long-Term Capital Gain Distributions (Tax Basis) | | 39.42 | % |
| (B) Ordinary Income Distributions (Tax Basis)* | | 60.58 | % |
| Total Distributions (Tax Basis) | | 100.00 | % |
| (C) Qualified Dividends1 | | 40.49 | % |
____________________
| (A) and (B) are based on a percentage of the Fund’s total distributions. |
| (C) is based on the Fund’s ordinary income distributions. |
| 1 | Qualified dividends represent dividends which qualify for the corporate dividends received deduction. |
| * | For the fiscal year ended March 31, 2021, certain dividends paid by the Fund may be subject to a maximum tax rate of 20%. The percentage of dividends paid by the Fund from ordinary income reported as qualified dividend income is 99.79%. Complete information will be computed and reported in conjunction with your 2021 Form 1099-DIV, as applicable. |
For the fiscal year ended March 31, 2021, certain interest income paid by the Fund, determined to be Qualified Interest Income or Qualified Short-term Capital Gains may be subject to relief from US withholding for foreign shareholders, as provided by the American Jobs Creation Act of 2004; the Tax Relief Unemployment Insurance Reauthorization, and Job Creation Act of 2010; and as extended by the American Taxpayer Relief Act of 2012. For the year ended March 31, 2021, the Fund has reported maximum distributions of Qualified Interest Income of $1,547,629 and Qualified Short-Term Capital Gains of $4,984,542.
The percentage of the ordinary dividends reported by the fund that is treated as a Section 163(j) interest dividend and thus is eligible to be treated as interest income for purposes of Section 163(j) and the regulations thereunder is 67.40%.
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Board consideration of Investment Sub-Advisory Agreement for Delaware Strategic Allocation Fund at a meeting held November 17-19, 2020
At a meeting held on November 17-19, 2020 (the “Meeting”), the Board of Trustees (the “Board”) of Delaware Strategic Allocation Fund (the “Fund”), including a majority of non-interested or independent Trustees (the “Independent Trustees”), approved a new Sub-Advisory Agreement between Delaware Management Company (“DMC” or “Management”) and Macquarie Investment Management Austria Kapitalanlage AG (“MIMAK”).
In reaching the decision to approve the Sub-Advisory Agreement, the Board considered and reviewed information about MIMAK, including its personnel, operations, and financial condition, which had been provided by MIMAK. The Board also reviewed material furnished by DMC in advance of the meeting, including: a memorandum from DMC reviewing the Sub-Advisory Agreement and the various services proposed to be rendered by MIMAK; information concerning MIMAK’s organizational structure and the experience of their key investment management personnel; copies of MIMAK’s Form ADV, financial statements, compliance policies and procedures, and Codes of Ethics; relevant performance information provided with respect to MIMAK; and a copy of the Sub-Advisory Agreement.
In considering such information and materials, the Independent Trustees received assistance and advice from and met separately with their independent counsel. While attention was given to all information furnished, the following discusses some primary factors relevant to the Board’s decision to approve the Sub-Advisory Agreement. This discussion of the information and factors considered by the Board is not intended to be exhaustive, but rather summarizes certain factors considered by the Board. In view of the wide variety of factors considered, the Board did not, unless otherwise noted, find it practicable to quantify or otherwise assign relative weights to the following factors. In addition, individual Trustees may have assigned different weights to various factors.
Nature, extent, and quality of services. In considering the nature, extent, and quality of the services to be provided by MIMAK, the Board reviewed the services to be provided by MIMAK pursuant to the Sub-Advisory Agreement as described at the Meeting. The Board reviewed materials provided by MIMAK regarding the experience and qualifications of the personnel who will be responsible for providing services to the Fund. The Board also considered relevant performance information provided with respect to MIMAK. In discussing the nature of the services proposed to be provided by MIMAK, it was observed that the Sub-Advisory Agreement will expand the sub-advisory services already provided by MIMAK to include the provision of discretionary investment management services as well as asset allocation services. Based upon these considerations, the Board was satisfied with the nature and quality of the overall services to be provided by MIMAK to the Fund and its shareholders and was confident in the abilities of MIMAK to provide quality services to the Fund and its shareholders.
Investment performance. In regard to the appointment of MIMAK for the Fund, the Board reviewed information on prior performance for MIMAK. In evaluating performance, the Board considered its previous approval of MIMAK to provide fully discretionary services to other Delaware Funds.
Sub-advisory fees. The Board considered that DMC would pay MIMAK a discretionary investment sub-advisory fee based on the extent to which MIMAK provides services to the Fund as described in the Sub-Advisory Agreement, in addition to the asset allocation sub-advisory fee previously approved. In considering the appropriateness of the sub-advisory fees, the Board also reviewed and considered the
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Other Fund information (Unaudited)
Delaware Strategic Allocation Fund
Board consideration of Investment Sub-Advisory Agreement for Delaware Strategic Allocation Fund at a meeting held November 17-19, 2020 (continued)
fees in light of the nature, extent, and quality of the sub-advisory services to be provided by MIMAK. The Board noted that the sub-advisory fees are paid by DMC to MIMAK and are not additional fees borne by the Fund, and that the management fee paid by the Fund to DMC would stay the same at current asset levels. The Board concluded that, in light of the quality and extent of the services to be provided and the business relationships between DMC and MIMAK, the proposed fee arrangement was understandable and reasonable.
Profitability, economies of scale and fall out benefits. Trustees were also given available information on profits being realized by MIMAK in relation to the services being provided to the Fund and in relation to MIMAK’s overall investment advisory business, but believed such information to be of limited relevance because the sub-advisory fees are paid by DMC out of its management fee, and changes in the level of sub-advisory fees have no impact on Fund expenses. The Board was also provided with, and considered, information on potential fall-out benefits derived or to be derived by MIMAK in connection with its relationship to the Fund. The Board considered the potential benefit to DMC and MIMAK of marketing a global approach on the portfolio management of their fixed income investment strategies. The Trustees also noted that economies of scale are shared with the Fund and its shareholders through investment management fee breakpoints in DMC’s fee schedule for the Fund so that as the Fund grows in size, its effective investment management fee rates decline.
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Board of trustees / directors and officers addendum
Delaware Funds® by Macquarie
A mutual fund is governed by a Board of Trustees/Directors (“Trustees”), which has oversight responsibility for the management of a fund’s business affairs. Trustees establish procedures and oversee and review the performance of the investment manager, the distributor, and others who perform services for the fund. The independent fund trustees, in particular, are advocates for shareholder interests. Each trustee has served in that capacity since he or she was elected to or appointed to the Board of Trustees, and will continue to serve until his or her retirement or the election of a new trustee in his or her place. The following is a list of the Trustees and Officers with certain background and related information.
| | | | | | | | Number of | | Other |
| | | | | | Principal | | Portfolios in Fund | | Directorships |
| Name, | | Position(s) | | | | Occupation(s) | | Complex Overseen | | Held by |
| Address, | | Held with | | Length of Time | | During the | | by Trustee | | Trustee |
| and Birth Date | | Fund(s) | | Served | | Past Five Years | | or Officer | | or Officer |
| Interested Trustee | | | | | | | | | | |
| | | | | | | | | | | |
| Shawn K. Lytle1 | | President, | | President and | | Global Head of Macquarie | | 160 | | Trustee — UBS Relationship |
| 610 Market Street | | Chief Executive | | Chief Executive | | Investment Management2 | | | | Funds, SMA Relationship Trust, |
| Philadelphia, PA | | Officer, | | Officer | | (January 2019–Present) | | | | and UBS Funds |
| 19106-2354 | | and Trustee | | since August 2015 | | Head of Americas of | | | | (May 2010–April 2015) |
| February 1970 | | | | Trustee since | | Macquarie Group | | | | |
| | | | September 2015 | | (December 2017–Present) | | | | |
| | | | | | Deputy Global Head of | | | | |
| | | | | | Macquarie Investment | | | | |
| | | | | | Management | | | | |
| | | | | | (2017–2019) | | | | |
| | | | | | Head of Macquarie Investment | | | | |
| | | | | | Management Americas | | | | |
| | | | | | (2015–2017) | | | | |
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Board of trustees / directors and officers addendum
Delaware Funds® by Macquarie
| | | | | | | | Number of | | Other |
| | | | | | Principal | | Portfolios in Fund | | Directorships |
| Name, | | Position(s) | | | | Occupation(s) | | Complex Overseen | | Held by |
| Address, | | Held with | | Length of Time | | During the | | by Trustee | | Trustee |
| and Birth Date | | Fund(s) | | Served | | Past Five Years | | or Officer | | or Officer |
| Independent Trustees | | | | | | | | | | |
| | | | | | | | | | | |
| Jerome D. | | Trustee | | Since January 2019 | | Managing Member, Stonebrook | | 160 | | None |
| Abernathy | | | | | | Capital Management, LLC | | | | |
| 610 Market Street | | | | | | (financial technology: macro | | | | |
| Philadelphia, PA | | | | | | factors and databases) | | | | |
| 19106-2354 | | | | | | (January 1993-Present) | | | | |
| July 1959 | | | | | | | | | | |
| | | | | | | | | | | |
| Thomas L. Bennett | | Chair and Trustee | | Trustee since March | | Private Investor | | 160 | | None |
| 610 Market Street | | | | 2005 | | (March 2004–Present) | | | | |
| Philadelphia, PA | | | | Chair since March | | | | | | |
| 19106-2354 | | | | 2015 | | | | | | |
| October 1947 | | | | | | | | | | |
| | | | | | | | | | | |
| Ann D. Borowiec | | Trustee | | Since March 2015 | | Chief Executive Officer, Private | | 160 | | Director — Banco Santander |
| 610 Market Street | | | | | | Wealth Management | | | | International |
| Philadelphia, PA | | | | | | (2011–2013) and Market | | | | (October 2016–December 2019) |
| 19106-2354 | | | | | | Manager, New Jersey Private | | | | Director — Santander Bank, N.A. |
| November 1958 | | | | | | Bank (2005–2011) — J.P. | | | | (December 2016–December |
| | | | | | Morgan Chase & Co. | | | | 2019) |
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| | | | | | | | Number of | | Other |
| | | | | | Principal | | Portfolios in Fund | | Directorships |
| Name, | | Position(s) | | | | Occupation(s) | | Complex Overseen | | Held by |
| Address, | | Held with | | Length of Time | | During the | | by Trustee | | Trustee |
| and Birth Date | | Fund(s) | | Served | | Past Five Years | | or Officer | | or Officer |
| | | | | | | | | | | |
| Joseph W. Chow | | Trustee | | Since January 2013 | | Private Investor | | 160 | | Director and Audit Committee |
| 610 Market Street | | | | | | (April 2011–Present) | | | | Member — Hercules Technology |
| Philadelphia, PA | | | | | | | | | | Growth Capital, Inc. |
| 19106-2354 | | | | | | | | | | (July 2004–July 2014) |
| January 1953 | | | | | | | | | | |
| | | | | | | | | | | |
| John A. Fry | | Trustee | | Since January 2001 | | President — Drexel University | | 160 | | Director; Compensation |
| 610 Market Street | | | | | | (August 2010–Present) | | | | Committee and Governance |
| Philadelphia, PA | | | | | | President — Franklin & Marshall | | | | Committee Member — |
| 19106-2354 | | | | | | College (July 2002–June 2010) | | | | Community Health Systems |
| May 1960 | | | | | | | | | | (May 2004–Present) |
| | | | | | | | | | Director — Drexel Morgan & Co. |
| | | | | | | | | | (2015–2019) |
| | | | | | | | | | Director, Audit and |
| | | | | | | | | | Compensation Committee |
| | | | | | | | | | Member — vTv Therapeutics Inc. |
| | | | | | | | | | (2017–Present) |
| | | | | | | | | | Director and Audit Committee |
| | | | | | | | | | Member — FS Credit Real Estate |
| | | | | | | | | | Income Trust, Inc. |
| | | | | | | | | | (2018–Present) |
| | | | | | | | | | Director — Federal Reserve |
| | | | | | | | | | Bank of Philadelphia |
| | | | | | | | | | (January 2020–Present) |
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Board of trustees / directors and officers addendum
Delaware Funds® by Macquarie
| | | | | | | | Number of | | Other |
| | | | | | Principal | | Portfolios in Fund | | Directorships |
| Name, | | Position(s) | | | | Occupation(s) | | Complex Overseen | | Held by |
| Address, | | Held with | | Length of Time | | During the | | by Trustee | | Trustee |
| and Birth Date | | Fund(s) | | Served | | Past Five Years | | or Officer | | or Officer |
| | | | | | | | | | | |
| Frances A. | | Trustee | | Since September | | Private Investor | | 160 | | Trust Manager and Audit |
| Sevilla-Sacasa | | | | 2011 | | (January 2017–Present) | | | | Committee Chair — Camden |
| 610 Market Street | | | | | | Chief Executive Officer — Banco | | | | Property Trust |
| Philadelphia, PA | | | | | | Itaú International | | | | (August 2011–Present) |
| 19106-2354 | | | | | | (April 2012–December 2016) | | | | Director; Strategic |
| January 1956 | | | | | | Executive Advisor to Dean | | | | Planning and Reserves |
| | | | | | (August 2011–March 2012) and | | | | Committee and Nominating |
| | | | | | Interim Dean | | | | and Governance |
| | | | | | (January 2011–July 2011) — | | | | Committee Member — |
| | | | | | University of Miami School of | | | | Callon Petroleum Company |
| | | | | | Business Administration | | | | (December 2019–Present) |
| | | | | | President — U.S. Trust, Bank of | | | | Director — New Senior |
| | | | | | America Private Wealth | | | | Investment Group Inc. |
| | | | | | Management (Private Banking) | | | | (January 2021–Present) |
| | | | | | (July 2007-December 2008) | | | | Director; Audit Committee |
| | | | | | | | | | Member — Carrizo Oil & Gas, |
| | | | | | | | | | Inc. (March 2018–December |
| | | | | | | | | | 2019) |
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| | | | | | | | Number of | | Other |
| | | | | | Principal | | Portfolios in Fund | | Directorships |
| Name, | | Position(s) | | | | Occupation(s) | | Complex Overseen | | Held by |
| Address, | | Held with | | Length of Time | | During the | | by Trustee | | Trustee |
| and Birth Date | | Fund(s) | | Served | | Past Five Years | | or Officer | | or Officer |
| |
| Thomas K. Whitford | | Trustee | | Since January 2013 | | Vice Chairman (2010–April 2013) | | 160 | | Director — HSBC North America |
| 610 Market Street | | | | | | — PNC Financial Services Group | | | | Holdings Inc. |
| Philadelphia, PA | | | | | | | | | | (December 2013–Present) |
| 19106-2354 | | | | | | | | | | Director — HSBC USA Inc. |
| March 1956 | | | | | | | | | | (July 2014–Present) |
| | | | | | | | | | Director — HSBC Bank USA, |
| | | | | | | | | | National Association |
| | | | | | | | | | (July 2014–March 2017) |
| | | | | | | | | | Director — HSBC Finance |
| | | | | | | | | | Corporation |
| | | | | | | | | | (December 2013–April 2018) |
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Board of trustees / directors and officers addendum
Delaware Funds® by Macquarie
| | | | | | | | Number of | | Other |
| | | | | | Principal | | Portfolios in Fund | | Directorships |
| Name, | | Position(s) | | | | Occupation(s) | | Complex Overseen | | Held by |
| Address, | | Held with | | Length of Time | | During the | | by Trustee | | Trustee |
| and Birth Date | | Fund(s) | | Served | | Past Five Years | | or Officer | | or Officer |
| |
| Christianna Wood | | Trustee | | Since January 2019 | | Chief Executive Officer and | | 160 | | Director; Finance Committee and |
| 610 Market Street | | | | | | President — Gore Creek Capital, | | | | Audit Committee Member — |
| Philadelphia, PA | | | | | | Ltd. (August 2009–Present) | | | | H&R Block Corporation |
| 19106-2354 | | | | | | | | | | (July 2008–Present) |
| August 1959 | | | | | | | | | | Director; Investments |
| | | | | | | | | | Committee, Capital and Finance |
| | | | | | | | | | Committee, and Audit |
| | | | | | | | | | Committee Member — Grange |
| | | | | | | | | | Insurance (2013–Present) |
| | | | | | | | | | Trustee; Chair of Nominating and |
| | | | | | | | | | Governance Committee and |
| | | | | | | | | | Audit Committee Member — The |
| | | | | | | | | | Merger Fund (2013–Present), The |
| | | | | | | | | | Merger Fund VL (2013–Present); |
| | | | | | | | | | WCM Alternatives: Event-Driven |
| | | | | | | | | | Fund (2013–Present), and WCM |
| | | | | | | | | | Alternatives: Credit Event Fund |
| | | | | | | | | | (December 2017–Present) |
| | | | | | | | | | Director; Chair of Governance |
| | | | | | | | | | Committee and Audit Committee |
| | | | | | | | | | Member — International |
| | | | | | | | | | Securities Exchange (2010–2016) |
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| | | | | | | | Number of | | Other |
| | | | | | Principal | | Portfolios in Fund | | Directorships |
| Name, | | Position(s) | | | | Occupation(s) | | Complex Overseen | | Held by |
| Address, | | Held with | | Length of Time | | During the | | by Trustee | | Trustee |
| and Birth Date | | Fund(s) | | Served | | Past Five Years | | or Officer | | or Officer |
| |
| Janet L. Yeomans | | Trustee | | Since April 1999 | | Vice President and Treasurer | | 160 | | Director; Personnel and |
| 610 Market Street | | | | | | (January 2006–July 2012), Vice | | | | Compensation Committee Chair; |
| Philadelphia, PA | | | | | | President — Mergers & | | | | Member of Nominating, |
| 19106-2354 | | | | | | Acquisitions | | | | Investments, and Audit |
| July 1948 | | | | | | (January 2003–January 2006), | | | | Committees for various periods |
| | | | | | and Vice President and Treasurer | | | | throughout directorship — |
| | | | | | (July 1995–January 2003) — 3M | | | | Okabena Company (2009–2017) |
| | | | | | Company | | | | |
| |
| Officers | | | | | | | | | | |
| |
| David F. Connor | | Senior Vice President, | | Senior Vice President, | | David F. Connor has served in | | 160 | | None3 |
| 610 Market Street | | General Counsel, and | | since May 2013; | | various capacities at different | | | | |
| Philadelphia, PA | | Secretary | | General Counsel | | times at Macquarie Investment | | | | |
| 19106-2354 | | | | since May 2015; | | Management. | | | | |
| December 1963 | | | | Secretary since | | | | | | |
| | | | October 2005 | | | | | | |
| |
| Daniel V. Geatens | | Senior Vice President | | Senior Vice President | | Daniel V. Geatens has served in | | 160 | | None3 |
| 610 Market Street | | and Treasurer | | and Treasurer since | | various capacities at different | | | | |
| Philadelphia, PA | | | | October 2007 | | times at Macquarie Investment | | | | |
| 19106-2354 | | | | | | Management. | | | | |
| October 1972 | | | | | | | | | | |
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Board of trustees / directors and officers addendum
Delaware Funds® by Macquarie
| | | | | | | | Number of | | Other |
| | | | | | Principal | | Portfolios in Fund | | Directorships |
| Name, | | Position(s) | | | | Occupation(s) | | Complex Overseen | | Held by |
| Address, | | Held with | | Length of Time | | During the | | by Trustee | | Trustee |
| and Birth Date | | Fund(s) | | Served | | Past Five Years | | or Officer | | or Officer |
| |
| Richard Salus | | Senior Vice President | | Senior Vice President | | Richard Salus has served in | | 160 | | None |
| 610 Market Street | | and Chief Financial | | and Chief Financial | | various capacities at different | | | | |
| Philadelphia, PA | | Officer | | Officer since | | times at Macquarie Investment | | | | |
| 19106-2354 | | | | November 2006 | | Management. | | | | |
| October 1963 | | | | | | | | | | |
| 1 | Shawn K. Lytle is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor. |
| 2 | Macquarie Investment Management is the marketing name for Macquarie Management Holdings, Inc. and its subsidiaries, including the Fund’s(s’) investment advisor, principal underwriter, and its transfer agent. |
| 3 | David F. Connor and Daniel V. Geatens serve in similar capacities for the six portfolios of the Optimum Fund Trust, which have the same investment advisor, principal underwriter, and transfer agent as the registrant. Mr. Geatens also serves as the Chief Financial Officer of the Optimum Fund Trust and he is the Chief Financial Officer and Treasurer for Macquarie Global Infrastructure Total Return Fund Inc. |
The Statement of Additional Information for the Fund(s) includes additional information about the Trustees and Officers and is available, without charge, upon request by calling 800 523-1918.
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Table of Contents
| About the organization | | | | |
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| |
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| Board of trustees | | | | | | |
| | | | | | | |
| Shawn K. Lytle | | Ann D. Borowiec | | Frances A. | | Christianna Wood |
| President and | | Former Chief Executive | | Sevilla-Sacasa | | Chief Executive Officer |
| Chief Executive Officer | | Officer | | Former Chief Executive | | and President |
| Delaware Funds® | | Private Wealth Management | | Officer | | Gore Creek Capital, Ltd. |
| by Macquarie | | J.P. Morgan Chase & Co. | | Banco Itaú International | | Golden, CO |
| Philadelphia, PA | | New York, NY | | Miami, FL | | |
| | | | | | | Janet L. Yeomans |
| Jerome D. Abernathy | | Joseph W. Chow | | Thomas K. Whitford | | Former Vice President and |
| Managing Member, | | Former Executive Vice | | Former Vice Chairman | | Treasurer |
| Stonebrook Capital | | President | | PNC Financial Services | | 3M Company |
| Management, LLC | | State Street Corporation | | Group | | St. Paul, MN |
| Jersey City, NJ | | Boston, MA | | Pittsburgh, PA | | |
| | | | | | | |
| Thomas L. Bennett | | John A. Fry | | | | |
| Chairman of the Board | | President | | | | |
| Delaware Funds | | Drexel University | | | | |
| by Macquarie | | Philadelphia, PA | | | | |
| Private Investor | | | | | | |
| Rosemont, PA | | | | | | |
| |
| Affiliated officers | | | | | | |
| | | | | | | |
| David F. Connor | | Daniel V. Geatens | | Richard Salus | | |
| Senior Vice President, | | Senior Vice President and | | Senior Vice President and | | |
| General Counsel, | | Treasurer | | Chief Financial Officer | | |
| and Secretary | | Delaware Funds | | Delaware Funds | | |
| Delaware Funds | | by Macquarie | | by Macquarie | | |
| by Macquarie | | Philadelphia, PA | | Philadelphia, PA | | |
| Philadelphia, PA | | | | | | |
| | | | | | | |
| This annual report is for the information of Delaware Strategic Allocation Fund shareholders, but it may be used with prospective investors when preceded or accompanied by the Delaware Fund fact sheet for the most recently completed calendar quarter. These documents are available at delawarefunds.com/literature. |
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT. The Fund’s Forms N-PORT, as well as a description of the policies and procedures that the Fund uses to determine how to vote proxies (if any) relating to portfolio securities, are available without charge (i) upon request, by calling 800 523-1918; and (ii) on the SEC’s website at sec.gov. In addition, a description of the policies and procedures that the Fund uses to determine how to vote proxies (if any) relating to portfolio securities and the Schedule of Investments included in the Fund’s most recent Form N-PORT are available without charge on the Fund’s website at delawarefunds.com/literature. The Fund’s Forms N-PORT may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330.
Information (if any) regarding how the Fund voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Fund’s website at delawarefunds.com/proxy; and (ii) on the SEC’s website at sec.gov.
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Item 2. Code of Ethics
Item 3. Audit Committee Financial Expert
The registrant’s Board of Trustees has determined that certain members of the registrant’s Audit Committee are audit committee financial experts, as defined below. For purposes of this item, an “audit committee financial expert” is a person who has the following attributes:
a. An understanding of generally accepted accounting principles and financial statements;
b. The ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves;
c. Experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements, or experience actively supervising one or more persons engaged in such activities;
d. An understanding of internal controls and procedures for financial reporting; and
e. An understanding of audit committee functions.
An “audit committee financial expert” shall have acquired such attributes through:
a. Education and experience as a principal financial officer, principal accounting officer, controller, public accountant, or auditor or experience in one or more positions that involve the performance of similar functions;
b. Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor, or person performing similar functions;
c. Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing, or evaluation of financial statements; or
d. Other relevant experience.
The registrant’s Board of Trustees has also determined that each member of the registrant’s Audit Committee is independent. In order to be “independent” for purposes of this item, the Audit Committee member may not: (i) other than in his or her capacity as a member of the Board of Trustees or any committee thereof, accept directly or indirectly any consulting, advisory or other compensatory fee from the issuer; or (ii) be an “interested person” of the registrant as defined in Section 2(a)(19) of the Investment Company Act of 1940.
The names of the audit committee financial experts on the registrant’s Audit Committee are set forth below:
Jerome D. Abernathy
John A. Fry
Thomas K. Whitford, Chair
Christianna Wood
Item 4. Principal Accountant Fees and Services
The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $48,480 for the fiscal year ended March 31, 2021.
The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $49,240 for the fiscal year ended March 31, 2020.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended March 31, 2021.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended March 31, 2020.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended March 31, 2021.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended March 31, 2020.
The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended March 31, 2021.
The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended March 31, 2020.
Under the Pre-Approval Policy, the Audit Committee has also pre-approved the services set forth in the table below with respect to the registrant’s investment adviser and other entities controlling, controlled by or under common control with the investment adviser that provide ongoing services to the registrant (the “Control Affiliates”) up to the specified fee limit. This fee limit is based on aggregate fees to the investment adviser and its Control Affiliates.
The Pre-Approval Policy requires the registrant’s independent auditors to report to the Audit Committee at each of its regular meetings regarding all services initiated since the last such report was rendered, including those services authorized by the Pre-Approval Policy.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s independent auditors for services rendered to the registrant and to its investment adviser and other service providers under common control with the adviser were $8,455,000 and $4,687,000 for the registrant’s fiscal years ended March 31, 2021 and March 31, 2020, respectively.
(h) In connection with its selection of the independent auditors, the registrant’s Audit Committee has considered the independent auditors’ provision of non-audit services to the registrant’s investment adviser and other service providers under common control with the adviser that were not required to be pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X. The Audit Committee has determined that the independent auditors’ provision of these services is compatible with maintaining the auditors’ independence.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
(a) Included as part of report to shareholders filed under Item 1 of this Form N-CSR.
(b) Divestment of securities in accordance with Section 13(c) of the Investment Company Act of 1940.
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures
The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
There were no significant changes in the registrant’s internal control over financial reporting that occurred during the period covered by the report to stockholders included herein that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 13. Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf, by the undersigned, thereunto duly authorized.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
