UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: | 811-04547 | |
Exact name of registrant as specified in charter: | Voyageur Mutual Funds III | |
Address of principal executive offices: | 610 Market Street | |
Philadelphia, PA 19106 | ||
Name and address of agent for service: | David F. Connor, Esq. | |
610 Market Street | ||
Philadelphia, PA 19106 | ||
Registrant’s telephone number, including area code: | (800) 523-1918 | |
Date of fiscal year end: | October 31 | |
Date of reporting period: | October 31, 2020 |
Item 1. Reports to Stockholders
Visit delawarefunds.com/edelivery.
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.
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Delaware Select Growth Fund | November 10, 2020 (Unaudited) |
Delaware Select Growth Fund(Institutional Class shares)* | 1-year return | +27.89% |
Delaware Select Growth Fund(Class A shares)* | 1-year return | +27.59% |
Russell 3000® Growth Index (benchmark) | 1-year return | +28.20% |
The performance of Class A shares excludes the applicable sales charge. The performance of both Institutional Class shares and Class A shares reflects the reinvestment of all distributions.
Please see page 7 for a description of the index. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
*Total returns for the report period presented in the table differs from the return in “Financial highlights.” The total returns presented in the above table are calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total returns presented in “Financial highlights” are calculated in the same manner, but also takes into account certain adjustments that are necessary under US generally accepted accounting principles (US GAAP) required in the annual report.
mid-March, stay-at-home orders devastated the
second quarter.
COVID-19 cases and uncertainty over the US election. Even so, the US economy ended the period in solidly favorable territory. Overseas, meanwhile, international markets had the same struggles as the US, but didn’t recover quite as well. The MSCI EAFE Index lost 6.86% during the fiscal year. Emerging markets participated in post-March market gains and ended the 12-month period up 8.25%.
Delaware Select Growth Fund | October 31, 2020 (Unaudited) |
Fund and benchmark performance1,2 | Average annual total returns through October 31, 2020 | |||
1 year | 5 year | 10 year | Lifetime | |
Class A (Est. May 16, 1994) | ||||
Excluding sales charge | +27.59%* | +12.65% | +12.62% | +10.73% |
Including sales charge | +20.23% | +11.32% | +11.96% | +10.49% |
Class C (Est. May 20, 1994) | ||||
Excluding sales charge | +26.65%* | +11.82% | +11.79% | +9.91% |
Including sales charge | +25.97% | +11.82% | +11.79% | +9.91% |
Class R (Est. June 2, 2003) | ||||
Excluding sales charge | +27.24%* | +12.37% | +12.34% | +9.93% |
Including sales charge | +27.24% | +12.37% | +12.34% | +9.93% |
Institutional Class (Est. August 28, 1997) | ||||
Excluding sales charge | +27.89%* | +12.94% | +12.90% | +9.08% |
Including sales charge | +27.89% | +12.94% | +12.90% | +9.08% |
Russell 3000 Growth Index | +28.20% | +16.84% | +16.00% | +8.26%** |
*Total returns for the report period presented in the table differs from the return in “Financial highlights.” The total returns presented in the above table are calculated based on the net asset value (NAV) at which shareholder transactions were processed. The total returns presented in “Financial highlights” are calculated in the same manner, but also takes into account certain adjustments that are necessary under US generally accepted accounting principles (US GAAP) required in the annual report. |
**The benchmark lifetime return is for Institutional Class share comparison only and is calculated using the last business day in the month of the Fund’s Institutional Class inception date. |
12b-1 fee of 0.25% of average daily net assets. Performance for Class A shares, excluding sales
charge applied.
Fund expense ratios | Class A | Class C | Class R | Institutional Class |
Total annual operating expenses (without fee waivers) | 1.25% | 2.00% | 1.50% | 1.00% |
Net expenses (including fee waivers, if any) | 1.25% | 2.00% | 1.50% | 1.00% |
Type of waiver | Contractual | Contractual | Contractual | Contractual |
For period beginning October 31, 2010 through October 31, 2020 | Starting value | Ending value | |
Russell 3000 Growth Index | $10,000 | $44,109 | |
Delaware Select Growth Fund — Institutional Class shares | $10,000 | $33,661 | |
Delaware Select Growth Fund — Class A shares | $9,425 | $30,942 |
through 8.
price-to-book ratios and higher forecasted
growth values.
large-cap stocks weighted by market value, and is often used to represent performance of the US stock market.
Nasdaq symbols | CUSIPs | |
Class A | DVEAX | 928931104 |
Class C | DVECX | 928931203 |
Class R | DFSRX | 928931740 |
Institutional Class | VAGGX | 928931757 |
(in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
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.
Expense analysis of an investment of $1,000
Beginning Account Value 5/1/20 | Ending Account Value 10/31/20 | Annualized Expense Ratio | Expenses Paid During Period 5/1/20 to 10/31/20* | |
Actual Fund return† | ||||
Class A | $1,000.00 | $1,279.70 | 1.23% | $7.05 |
Class C | 1,000.00 | 1,275.60 | 1.98% | 11.33 |
Class R | 1,000.00 | 1,278.40 | 1.48% | 8.48 |
Institutional Class | 1,000.00 | 1,281.20 | 0.98% | 5.62 |
Hypothetical 5% return (5% return before expenses) | ||||
Class A | $1,000.00 | $1,018.95 | 1.23% | $6.24 |
Class C | 1,000.00 | 1,015.18 | 1.98% | 10.03 |
Class R | 1,000.00 | 1,017.70 | 1.48% | 7.51 |
Institutional Class | 1,000.00 | 1,020.21 | 0.98% | 4.98 |
*“Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/366 (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. |
Delaware Select Growth Fund | As of October 31, 2020 (Unaudited) |
Security type / sector | Percentage of net assets |
Common Stock♦ | 100.11% |
Communication Services | 9.15% |
Consumer Discretionary | 21.29% |
Consumer Staples | 5.29% |
Healthcare | 12.98% |
Industrials | 9.41% |
Technology* | 41.99% |
Total Value of Securities | 100.11% |
Liabilities Net of Receivables and Other Assets | (0.11%) |
Total Net Assets | 100.00% |
♦Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
*To monitor compliance with the Fund's concentration guidelines as described in the Fund's Prospectus and Statement of Additional Information, the Technology sector (as disclosed herein for financial reporting purposes) is subdivided into a variety of “industries” (in accordance with the requirements of the Investment Company Act of 1940, as amended). The Technology sector consisted of advertising, commercial services, computers, semiconductors and software. As of October 31, 2020, such amounts, as a percentage of total net assets were 3.67%, 7.24%, 1.99%, 6.56%, and 22.53%, respectively. The percentage in any such single industry will comply with the Fund’s concentration policy even if the percentage in the Technology sector for financial reporting purposes may exceed 25%. |
Top 10 equity holdings | Percentage of net assets |
Boston Beer Class A | 5.29% |
Exact Sciences | 5.07% |
YETI Holdings | 4.50% |
Match Group | 4.42% |
ServiceNow | 4.03% |
Uber Technologies | 3.96% |
Twilio Class A | 3.93% |
Trade Desk Class A | 3.68% |
RingCentral Class A | 3.57% |
NVIDIA | 3.32% |
Delaware Select Growth Fund | October 31, 2020 |
Number of shares | Value (US $) | ||
Common Stock — 100.11%♦ | |||
Communication Services — 9.15% | |||
Match Group † | 118,586 | $13,848,473 | |
Netflix † | 21,382 | 10,172,273 | |
Spotify Technology † | 19,525 | 4,683,852 | |
28,704,598 | |||
Consumer Discretionary — 21.29% | |||
Amazon.com † | 3,276 | 9,946,427 | |
Burlington Stores † | 8,415 | 1,628,976 | |
Chipotle Mexican Grill † | 7,480 | 8,987,070 | |
Domino's Pizza | 8,575 | 3,244,094 | |
DR Horton | 141,280 | 9,438,917 | |
DraftKings Class A † | 231,675 | 8,201,295 | |
Lululemon Athletica † | 31,285 | 9,988,988 | |
Tesla † | 3,240 | 1,257,250 | |
YETI Holdings † | 285,271 | 14,115,209 | |
66,808,226 | |||
Consumer Staples — 5.29% | |||
Boston Beer Class A † | 15,975 | 16,600,901 | |
16,600,901 | |||
Healthcare — 12.98% | |||
DexCom † | 21,765 | 6,955,659 | |
Exact Sciences † | 128,501 | 15,912,279 | |
IQVIA Holdings † | 51,163 | 7,878,590 | |
Teladoc Health † | 6,760 | 1,328,070 | |
Vertex Pharmaceuticals † | 19,215 | 4,003,637 | |
Zoetis | 29,410 | 4,662,955 | |
40,741,190 | |||
Industrials — 9.41% | |||
Cintas | 23,250 | 7,313,287 | |
SiteOne Landscape Supply † | 82,121 | 9,812,638 | |
Uber Technologies † | 371,670 | 12,417,495 | |
29,543,420 | |||
Technology — 41.99% | |||
Adobe † | 16,543 | 7,396,375 | |
Apple | 57,265 | 6,233,868 | |
Coupa Software † | 31,362 | 8,395,607 | |
DocuSign † | 40,585 | 8,208,316 | |
Global Payments | 33,905 | 5,348,175 | |
Marvell Technology Group | 271,040 | 10,166,711 | |
Microsoft | 31,337 | 6,344,802 | |
NVIDIA | 20,785 | 10,420,768 |
Number of shares | Value (US $) | ||
Common Stock♦ (continued) | |||
Technology (continued) | |||
PayPal Holdings † | 37,407 | $6,962,565 | |
RingCentral Class A † | 43,352 | 11,199,556 | |
ServiceNow † | 25,453 | 12,664,649 | |
Snowflake Class A † | 16,700 | 4,175,334 | |
Square Class A † | 67,225 | 10,411,808 | |
Trade Desk Class A † | 20,365 | 11,535,754 | |
Twilio Class A † | 44,166 | 12,320,989 | |
131,785,277 | |||
Total Common Stock (cost $282,764,883) | 314,183,612 | ||
Total Value of Securities—100.11% (cost $282,764,883) | $314,183,612 |
♦ | Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
† | Non-income producing security. |
Delaware Select Growth Fund | October 31, 2020 |
Assets: | |
Investments, at value* | $314,183,612 |
Receivable for securities sold | 5,381,492 |
Interest receivable | 5,564 |
Foreign tax reclaims receivable | 67,454 |
Receivable for fund shares sold | 339,926 |
Total Assets | 319,978,048 |
Liabilities: | |
Due to custodian | 238,127 |
Payable for securities purchased | 4,920,583 |
Payable for fund shares redeemed | 607,157 |
Investment management fees payable to affiliates | 214,396 |
Other accrued expenses | 87,556 |
Distribution fees payable to affiliates | 64,592 |
Audit and tax fees payable | 4,850 |
Dividend disbursing and transfer agent fees and expenses payable to affiliates | 2,624 |
Accounting and administration expenses payable to affiliates | 1,308 |
Trustees' fees and expenses payable to affiliates | 1,298 |
Legal fees payable to affiliates | 353 |
Reports and statements to shareholders expenses payable to affiliates | 319 |
Total Liabilities | 6,143,163 |
Total Net Assets | $313,834,885 |
Net Assets Consist of: | |
Paid-in capital | $279,906,357 |
Total distributable earnings (loss) | 33,928,528 |
Total Net Assets | $313,834,885 |
Net Asset Value | |
Class A: | |
Net assets | $256,347,803 |
Shares of beneficial interest outstanding, unlimited authorization, no par | 8,262,304 |
Net asset value per share | $31.03 |
Sales charge | 5.75% |
Offering price per share, equal to net asset value per share / (1 - sales charge) | $32.92 |
Class C: | |
Net assets | $7,086,346 |
Shares of beneficial interest outstanding, unlimited authorization, no par | 511,449 |
Net asset value per share | $13.86 |
Class R: | |
Net assets | $2,446,975 |
Shares of beneficial interest outstanding, unlimited authorization, no par | 89,449 |
Net asset value per share | $27.36 |
Institutional Class: | |
Net assets | $47,953,761 |
Shares of beneficial interest outstanding, unlimited authorization, no par | 1,318,512 |
Net asset value per share | $36.37 |
*Investments, at cost | $282,764,883 |
Delaware Select Growth Fund | Year ended October 31, 2020 |
Investment Income: | |
Dividends | $1,420,042 |
Foreign tax withheld | (4,616) |
1,415,426 | |
Expenses: | |
Management fees | 2,215,136 |
Distribution expenses — Class A | 596,163 |
Distribution expenses — Class C | 81,232 |
Distribution expenses — Class R | 13,481 |
Dividend disbursing and transfer agent fees and expenses | 343,289 |
Accounting and administration expenses | 87,643 |
Reports and statements to shareholders expenses | 78,406 |
Registration fees | 64,947 |
Legal fees | 60,275 |
Audit and tax fees | 36,330 |
Trustees' fees and expenses | 16,939 |
Custodian fees | 16,539 |
Other | 19,752 |
3,630,132 | |
Less expenses paid indirectly | (1,852) |
Total operating expenses | 3,628,280 |
Net Investment Loss | (2,212,854) |
Net Realized and Unrealized Gain (Loss): | |
Net realized gain (loss) on: | |
Investments | $82,834,158 |
Foreign currencies | 109,246 |
Foreign currency exchange contracts | (94,557) |
Net realized gain | 82,848,847 |
Net change in unrealized appreciation (depreciation) of: | |
Investments | (8,658,102) |
Foreign currencies | 3,055 |
Net change in unrealized appreciation (depreciation) | (8,655,047) |
Net Realized and Unrealized Gain | 74,193,800 |
Net Increase in Net Assets Resulting from Operations | $71,980,946 |
Year ended | |||
10/31/20 | 10/31/19 | ||
Increase (Decrease) in Net Assets from Operations: | |||
Net investment loss | $(2,212,854) | $(1,415,789) | |
Net realized gain | 82,848,847 | 23,330,758 | |
Net change in unrealized appreciation (depreciation) | (8,655,047) | 10,679,610 | |
Net increase in net assets resulting from operations | 71,980,946 | 32,594,579 | |
Dividends and Distributions to Shareholders from: | |||
Distributable earnings: | |||
Class A | (79,512,497) | (57,743,174) | |
Class C | (4,310,286) | (4,583,459) | |
Class R | (882,727) | (1,037,563) | |
Institutional Class | (13,278,030) | (10,974,061) | |
(97,983,540) | (74,338,257) | ||
Capital Share Transactions: | |||
Proceeds from shares sold: | |||
Class A | 7,140,349 | 5,585,208 | |
Class C | 591,754 | 192,623 | |
Class R | 392,117 | 472,527 | |
Institutional Class | 8,913,139 | 7,040,232 | |
Net asset value of shares issued upon reinvestment of dividends and distributions: | |||
Class A | 78,478,504 | 56,868,379 | |
Class C | 4,283,744 | 4,468,307 | |
Class R | 881,162 | 1,031,887 | |
Institutional Class | 13,162,549 | 10,841,155 | |
113,843,318 | 86,500,318 |
Year ended | |||
10/31/20 | 10/31/19 | ||
Capital Share Transactions (continued): | |||
Cost of shares redeemed: | |||
Class A | $(39,311,399) | $(40,320,309) | |
Class C | (4,979,914) | (5,531,390) | |
Class R | (1,417,079) | (2,066,114) | |
Institutional Class | (17,885,269) | (16,405,588) | |
(63,593,661) | (64,323,401) | ||
Increase in net assets derived from capital share transactions | 50,249,657 | 22,176,917 | |
Net Increase (Decrease) in Net Assets | 24,247,063 | (19,566,761) | |
Net Assets: | |||
Beginning of year | 289,587,822 | 309,154,583 | |
End of year | $313,834,885 | $289,587,822 |
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment loss1 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
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 assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment loss to average net assets |
Ratio of net investment loss to average net assets prior to fees waived |
Portfolio turnover |
1 | The average shares outstanding method has 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. |
3 | Total return during the period reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
4 | The Fund’s portfolio turnover rate increased substantially during the year ended October 31, 2020 due to a change in the Fund’s portfolio managers and associated repositioning. |
Year ended | ||||||||
10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | 10/31/16 | ||||
$33.70 | $39.74 | $39.46 | $37.68 | $47.82 | ||||
(0.26) | (0.16) | (0.17) | (0.14) | (0.11) | ||||
9.64 | 3.75 | 2.69 | 7.13 | (0.31) | ||||
9.38 | 3.59 | 2.52 | 6.99 | (0.42) | ||||
(12.05) | (9.63) | (2.24) | (5.21) | (9.72) | ||||
(12.05) | (9.63) | (2.24) | (5.21) | (9.72) | ||||
$31.03 | $33.70 | $39.74 | $39.46 | $37.68 | ||||
27.51% | 11.42%3 | 6.84%3 | 21.43%3 | (1.63%)3 | ||||
$256,348 | $231,410 | $241,009 | $237,363 | $253,027 | ||||
1.24% | 1.25% | 1.24% | 1.25% | 1.26% | ||||
1.24% | 1.25% | 1.24% | 1.28% | 1.28% | ||||
(0.76%) | (0.48%) | (0.42%) | (0.39%) | (0.30%) | ||||
(0.76%) | (0.48%) | (0.42%) | (0.42%) | (0.32%) | ||||
134%4 | 48% | 51% | 35% | 33% |
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment loss1 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
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 assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment loss to average net assets |
Ratio of net investment loss to average net assets prior to fees waived |
Portfolio turnover |
1 | The average shares outstanding method has 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. |
3 | Total return during the period reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
4 | The Fund’s portfolio turnover rate increased substantially during the year ended October 31, 2020 due to a change in the Fund’s portfolio managers and associated repositioning. |
Year ended | ||||||||
10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | 10/31/16 | ||||
$20.37 | $27.92 | $28.60 | $28.91 | $39.13 | ||||
(0.29) | (0.25) | (0.33) | (0.30) | (0.31) | ||||
5.83 | 2.33 | 1.89 | 5.20 | (0.19) | ||||
5.54 | 2.08 | 1.56 | 4.90 | (0.50) | ||||
(12.05) | (9.63) | (2.24) | (5.21) | (9.72) | ||||
(12.05) | (9.63) | (2.24) | (5.21) | (9.72) | ||||
$13.86 | $20.37 | $27.92 | $28.60 | $28.91 | ||||
26.55% | 10.61%3 | 6.02%3 | 20.57%3 | (2.36%)3 | ||||
$7,086 | $9,578 | $13,759 | $44,775 | $60,815 | ||||
1.99% | 2.00% | 1.99% | 2.00% | 2.01% | ||||
1.99% | 2.00% | 1.99% | 2.03% | 2.03% | ||||
(1.51%) | (1.23%) | (1.17%) | (1.14%) | (1.05%) | ||||
(1.51%) | (1.23%) | (1.17%) | (1.17%) | (1.07%) | ||||
134%4 | 48% | 51% | 35% | 33% |
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment loss1 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
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 assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment loss to average net assets |
Ratio of net investment loss to average net assets prior to fees waived |
Portfolio turnover |
1 | The average shares outstanding method has 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. |
3 | Total return during the period reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
4 | The Fund’s portfolio turnover rate increased substantially during the year ended October 31, 2020 due to a change in the Fund’s portfolio managers and associated repositioning. |
Year ended | ||||||||
10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | 10/31/16 | ||||
$30.90 | $37.29 | $37.26 | $35.94 | $46.15 | ||||
(0.32) | (0.22) | (0.25) | (0.22) | (0.20) | ||||
8.83 | 3.46 | 2.52 | 6.75 | (0.29) | ||||
8.51 | 3.24 | 2.27 | 6.53 | (0.49) | ||||
(12.05) | (9.63) | (2.24) | (5.21) | (9.72) | ||||
(12.05) | (9.63) | (2.24) | (5.21) | (9.72) | ||||
$27.36 | $30.90 | $37.29 | $37.26 | $35.94 | ||||
27.15% | 11.17%3 | 6.55%3 | 21.16%3 | (1.87%)3 | ||||
$2,447 | $2,882 | $4,100 | $4,913 | $11,487 | ||||
1.49% | 1.50% | 1.49% | 1.50% | 1.51% | ||||
1.49% | 1.50% | 1.49% | 1.53% | 1.53% | ||||
(1.01%) | (0.73%) | (0.67%) | (0.64%) | (0.55%) | ||||
(1.01%) | (0.73%) | (0.67%) | (0.67%) | (0.57%) | ||||
134%4 | 48% | 51% | 35% | 33% |
Net asset value, beginning of period |
Income (loss) from investment operations: |
Net investment loss1 |
Net realized and unrealized gain (loss) |
Total from investment operations |
Less dividends and distributions from: |
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 assets |
Ratio of expenses to average net assets prior to fees waived |
Ratio of net investment loss to average net assets |
Ratio of net investment loss to average net assets prior to fees waived |
Portfolio turnover |
1 | The average shares outstanding method has 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. |
3 | Total return during the period reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
4 | The Fund’s portfolio turnover rate increased substantially during the year ended October 31, 2020 due to a change in the Fund’s portfolio managers and associated repositioning. |
Year ended | ||||||||
10/31/20 | 10/31/19 | 10/31/18 | 10/31/17 | 10/31/16 | ||||
$37.81 | $43.34 | $42.73 | $40.27 | $50.35 | ||||
(0.20) | (0.08) | (0.07) | (0.05) | (0.02) | ||||
10.81 | 4.18 | 2.92 | 7.72 | (0.34) | ||||
10.61 | 4.10 | 2.85 | 7.67 | (0.36) | ||||
(12.05) | (9.63) | (2.24) | (5.21) | (9.72) | ||||
(12.05) | (9.63) | (2.24) | (5.21) | (9.72) | ||||
$36.37 | $37.81 | $43.34 | $42.73 | $40.27 | ||||
27.78% | 11.71%3 | 7.10%3 | 21.76%3 | (1.37%)3 | ||||
$47,954 | $45,718 | $50,287 | $103,570 | $170,029 | ||||
0.99% | 1.00% | 0.99% | 1.00% | 1.01% | ||||
0.99% | 1.00% | 0.99% | 1.03% | 1.03% | ||||
(0.51%) | (0.23%) | (0.17%) | (0.14%) | (0.05%) | ||||
(0.51%) | (0.23%) | (0.17%) | (0.17%) | (0.07%) | ||||
134%4 | 48% | 51% | 35% | 33% |
Delaware Select Growth Fund | October 31, 2020 |
Delaware Select Growth Fund (Fund). The Trust is an open-end investment company. The Fund is considered diversified under the Investment Company Act of 1940, as amended, 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%. Class A share purchases of $1,000,000 or more will incur a contingent deferred sales charge (CDSC) instead of a front-end sales charge of 1.00%, if redeemed during the first year, and 0.50% during the second year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. 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.
(US GAAP) and are consistently followed by the Fund.
“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 October 31, 2020 and for all open tax years (years ended October 31, 2017–October 31, 2019), and has concluded that no provision for federal income tax is required in the Fund’s financial statements. If applicable, the Fund recognizes interest accrued on unrecognized tax benefits in interest expense and penalties in “Other” on the “Statements of operations.” During the year ended October 31, 2020, the Fund did not incur any interest or tax penalties. 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.
tax purposes.
under this arrangement.
DMC and/or its affiliates’ employees. This amount is included on the “Statement of operations” under
“Legal fees.”
Purchases | $388,248,735 |
Sales | 434,142,128 |
Cost of investments | $282,767,045 |
Aggregate unrealized appreciation of investments | $43,887,929 |
Aggregate unrealized depreciation of investments | (12,471,362) |
Net unrealized appreciation of investments | $31,416,567 |
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 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.
Level 1 | |
Securities | |
Assets: | |
Common Stock | $314,183,612 |
Year ended | |||
10/31/20 | 10/31/19 | ||
Ordinary income | $25,002,264 | $10,289,289 | |
Long-term capital gains | 72,981,276 | 64,048,968 | |
Total | $97,983,540 | $74,338,257 |
Shares of beneficial interest | $279,906,357 |
Undistributed ordinary income | 900,724 |
Undistributed long-term capital gains | 1,611,237 |
Unrealized appreciation (depreciation) of investments and foreign currencies | 31,416,567 |
Net assets | $313,834,885 |
Year ended | |||
10/31/20 | 10/31/19 | ||
Shares sold: | |||
Class A | 201,758 | 168,743 | |
Class C | 28,501 | 9,702 | |
Class R | 12,678 | 14,527 | |
Institutional Class | 221,199 | 184,373 | |
Shares issued upon reinvestment of dividends and distributions: | |||
Class A | 2,357,986 | 1,852,994 | |
Class C | 271,069 | 239,316 | |
Class R | 29,830 | 36,592 | |
Institutional Class | 340,441 | 315,609 | |
3,463,462 | 2,821,856 | ||
Shares redeemed: | |||
Class A | (1,163,332) | (1,220,193) | |
Class C | (258,365) | (271,595) | |
Class R | (46,316) | (67,800) | |
Institutional Class | (452,305) | (451,127) | |
(1,920,318) | (2,010,715) | ||
Net increase | 1,543,144 | 811,141 |
Exchange Redemptions | Exchange Subscriptions | |||||||||||
Class A Shares | Class C Shares | Class A Shares | Institutional Class Shares | Value | ||||||||
Year ended | ||||||||||||
10/31/20 | 3,035 | 16,110 | 9,062 | 2,688 | $415,846 | |||||||
Year ended | ||||||||||||
10/31/19 | 7,958 | 27,796 | 17,085 | 7,112 | 833,525 |
then ended.
Long Derivative Volume | Short Derivative Volume | ||||
Foreign currency exchange contracts (average cost) | $19,837 | $68,351 |
short term.
small- or mid-sized companies may be more volatile than investments in larger companies for a number of reasons, which include more limited financial resources or a dependence on narrow product lines.
the Fund.
October 31, 2020, that would require recognition or disclosure in the Fund's financial statements.
Philadelphia, Pennsylvania
December 21, 2020
(Highly Liquid, Moderately Liquid, Less Liquid, and Illiquid); (3) for funds that do not primarily hold assets that are Highly Liquid, establishing and maintaining a minimum percentage of the Fund’s net assets in Highly Liquid investments (called a “Highly Liquid Investment Minimum” or “HLIM”); and (4) prohibiting the Fund’s acquisition of Illiquid investments if, immediately after the acquisition, the Fund would hold more than 15% of its net assets in Illiquid assets. The Program also requires reporting to the SEC (on a
non-public basis) and to the Board if the Fund’s holdings of Illiquid assets exceed 15% of the Fund’s net assets. Funds with HLIMs must have procedures for addressing HLIM shortfalls, including reporting to the Board and, with respect to HLIM shortfalls lasting more than seven consecutive calendar days, reporting to the SEC (on a non-public basis).
Fund to report the maximum amount permitted under the Internal Revenue Code and the
regulations thereunder.
as follows:
(A) Long-Term Capital Gain Distributions (Tax Basis) | 74.48% |
(B) Ordinary Income Distributions (Tax Basis) | 25.52% |
Total Distributions (Tax Basis) | 100.00% |
an experienced and knowledgeable independent fund consultant, JDL Consultants, LLC (“JDL”).
Although the Board gave attention to all information furnished, the following discussion identifies, under
separate headings, the primary factors taken into account by the Board during its contract renewal considerations.
Sub-Adviser to the Fund. In reviewing the nature, extent, and quality of services, the Board considered reports furnished to it throughout the year at regular Board Meetings covering matters such as relative performance of the Fund; compliance of portfolio managers with the investment policies, strategies, and restrictions for the Fund; the compliance of Sub-Adviser personnel with its Code of Ethics; and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of the Sub-Advisers and the emphasis placed on research in the investment process.
The Board was satisfied with the nature, extent, and quality of the overall services provided by the
Sub-Advisers.
the Fund in view of the importance of investment performance to shareholders. Although the Board considered performance reports and discussions with portfolio managers at Investment Committee meetings throughout the year, the Board gave particular weight to the Broadridge reports furnished
for the Annual Meeting. The Broadridge reports prepared for the Fund showed the investment performance of its Class A shares in comparison to a group of similar funds as selected by Broadridge
poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for each Fund was shown for the past 1-, 3-, 5-, and 10-year periods, to the extent, applicable, ended January 31, 2020. The Board’s objective is that the Fund’s performance for the 1-, 3-, and 5-year periods be at or above the median of its Performance Universe.
the Board’s objective. In evaluating the Fund’s performance, the Board considered the performance attribution included in the Meeting materials, as well as the numerous investment and performance reports delivered by Management personnel to the Board’s Investments Committee. The Board was satisfied that Management was taking action to improve Fund performance and to meet the Board’s performance objective.
Name, Address, and Birth Date | Position(s) Held with Fund(s) | Length of Time Served | Principal Occupation(s) During the Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | Other Directorships Held by Trustee or Officer |
Interested Trustee | |||||
Shawn K. Lytle1 610 Market Street Philadelphia, PA 19106-2354 February 1970 | President, Chief Executive Officer, and Trustee | President and Chief Executive Officer since August 2015 Trustee since September 2015 | President — Macquarie Investment Management2 (June 2015–Present) Regional Head of Americas — UBS Global Asset Management (April 2010–May 2015) | 85 | Trustee — UBS Relationship Funds, SMA Relationship Trust, and UBS Funds (May 2010–April 2015) |
Independent Trustees | |||||
Jerome D. Abernathy 610 Market Street Philadelphia, PA 19106-2354 July 1959 | Trustee | Since January 2019 | Managing Member, Stonebrook Capital Management, LLC (financial technology: macro factors and databases) (January 1993-Present) | 85 | None |
Name, Address, and Birth Date | Position(s) Held with Fund(s) | Length of Time Served | Principal Occupation(s) During the Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | Other Directorships Held by Trustee or Officer |
Thomas L. Bennett 610 Market Street Philadelphia, PA 19106-2354 October 1947 | Chair and Trustee | Trustee since March 2005 Chair since March 2015 | Private Investor (March 2004–Present) | 85 | None |
Ann D. Borowiec 610 Market Street Philadelphia, PA 19106-2354 November 1958 | Trustee | Since March 2015 | Chief Executive Officer, Private Wealth Management (2011–2013) and Market Manager, New Jersey Private Bank (2005–2011) — J.P. Morgan Chase & Co. | 85 | Director — Banco Santander International (October 2016–December 2019) Director — Santander Bank, N.A. (December 2016–December 2019) |
Joseph W. Chow 610 Market Street Philadelphia, PA 19106-2354 January 1953 | Trustee | Since January 2013 | Private Investor (April 2011–Present) | 85 | Director and Audit Committee Member — Hercules Technology Growth Capital, Inc. (July 2004–July 2014) |
Name, Address, and Birth Date | Position(s) Held with Fund(s) | Length of Time Served | Principal Occupation(s) During the Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | Other Directorships Held by Trustee or Officer |
John A. Fry 610 Market Street Philadelphia, PA 19106-2354 May 1960 | Trustee | Since January 2001 | President — Drexel University (August 2010–Present) President — Franklin & Marshall College (July 2002–June 2010) | 85 | Director; Compensation Committee and Governance Committee Member — Community Health Systems (May 2004–Present) Director — Drexel Morgan & Co. (2015–2019) Director and Audit 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) |
Lucinda S. Landreth 610 Market Street Philadelphia, PA 19106-2354 June 1947 | Trustee | Since March 2005 | Private Investor (2004–Present) | 85 | None |
Name, Address, and Birth Date | Position(s) Held with Fund(s) | Length of Time Served | Principal Occupation(s) During the Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | Other Directorships Held by Trustee or Officer |
Frances A. Sevilla-Sacasa 610 Market Street Philadelphia, PA 19106-2354 January 1956 | Trustee | Since September 2011 | Private Investor (January 2017–Present) Chief Executive Officer — Banco Itaú International (April 2012–December 2016) Executive Advisor to Dean (August 2011–March 2012) and Interim Dean (January 2011–July 2011) — University of Miami School of Business Administration President — U.S. Trust, Bank of America Private Wealth Management (Private Banking) (July 2007-December 2008) | 85 | Trust Manager and Audit Committee Chair — Camden Property Trust (August 2011–Present) Director; Strategic Planning and Reserves Committee and Nominating and Governance Committee Member — Callon Petroleum Company (December 2019–Present) Director; Audit Committee Member — Carrizo Oil & Gas, Inc. (March 2018–December 2019) |
Name, Address, and Birth Date | Position(s) Held with Fund(s) | Length of Time Served | Principal Occupation(s) During the Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | Other Directorships Held by Trustee or Officer |
Thomas K. Whitford 610 Market Street Philadelphia, PA 19106-2354 March 1956 | Trustee | Since January 2013 | Vice Chairman (2010–April 2013) — PNC Financial Services Group | 85 | Director — HSBC North America Holdings Inc. (December 2013–Present) Director — HSBC USA Inc. (July 2014–Present) Director — HSBC Bank USA, National Association (July 2014–March 2017) Director — HSBC Finance Corporation (December 2013–April 2018) |
Name, Address, and Birth Date | Position(s) Held with Fund(s) | Length of Time Served | Principal Occupation(s) During the Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | Other Directorships Held by Trustee or Officer |
Christianna Wood 610 Market Street Philadelphia, PA 19106-2354 August 1959 | Trustee | Since January 2019 | Chief Executive Officer and President — Gore Creek Capital, Ltd. (August 2009–Present) | 85 | Director; Finance Committee and Audit Committee Member — H&R Block Corporation (July 2008–Present) 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) |
Name, Address, and Birth Date | Position(s) Held with Fund(s) | Length of Time Served | Principal Occupation(s) During the Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | Other Directorships Held by Trustee or Officer |
Janet L. Yeomans 610 Market Street Philadelphia, PA 19106-2354 July 1948 | Trustee | Since April 1999 | Vice President and Treasurer (January 2006–July 2012), Vice President — Mergers & Acquisitions (January 2003–January 2006), and Vice President and Treasurer (July 1995–January 2003) — 3M Company | 85 | Director; Personnel and Compensation Committee Chair; Member of Nominating, Investments, and Audit Committees for various periods throughout directorship — Okabena Company (2009–2017) |
Officers | |||||
David F. Connor 610 Market Street Philadelphia, PA 19106-2354 December 1963 | Senior Vice President, General Counsel, and Secretary | Senior Vice President, since May 2013; General Counsel since May 2015; Secretary since October 2005 | David F. Connor has served in various capacities at different times at Macquarie Investment Management. | 85 | None3 |
Daniel V. Geatens 610 Market Street Philadelphia, PA 19106-2354 October 1972 | Vice President and Treasurer | Vice President and Treasurer since October 2007 | Daniel V. Geatens has served in various capacities at different times at Macquarie Investment Management. | 85 | None3 |
Name, Address, and Birth Date | Position(s) Held with Fund(s) | Length of Time Served | Principal Occupation(s) During the Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee or Officer | Other Directorships Held by Trustee or Officer |
Richard Salus 610 Market Street Philadelphia, PA 19106-2354 October 1963 | Senior Vice President and Chief Financial Officer | Senior Vice President and Chief Financial Officer since November 2006 | Richard Salus has served in various capacities at different times at Macquarie Investment Management. | 85 | None |
Chief Executive Officer
Delaware Funds®
by Macquarie
Philadelphia, PA
Stonebrook Capital
Management, LLC
Jersey City, NJ
Delaware Funds
by Macquarie
Private Investor
Rosemont, PA
Officer
Private Wealth Management
J.P. Morgan Chase & Co.
New York, NY
President
State Street Corporation
Boston, MA
Drexel University
Philadelphia, PA
Officer
Assurant, Inc.
New York, NY
Sevilla-Sacasa
Officer
Banco Itaú International
Miami, FL
PNC Financial Services Group
Pittsburgh, PA
and President
Gore Creek Capital, Ltd.
Golden, CO
Treasurer
3M Company
St. Paul, MN
General Counsel,
and Secretary
Delaware Funds
by Macquarie
Philadelphia, PA
Treasurer
Delaware Funds
by Macquarie
Philadelphia, PA
Chief Financial Officer
Delaware Funds
by Macquarie
Philadelphia, PA
and use
broker/dealers; and other financial services companies with whom we have joint marketing agreements). Our service providers also include nonfinancial companies and individuals (for example, consultants; information services vendors; and companies that perform mailing or marketing services on our behalf). Information obtained from a report prepared by a service provider may be kept by the service provider and shared with other persons; however, we require our service providers to protect your personal information and to use or disclose it only for the work they are performing for us, or as permitted by law.
This and other information can be found in the Fund’s prospectus and, if available, its summary prospectus.
A Delaware Funds by Macquarie prospectus may be obtained by visiting delawarefunds.com/literature or
calling 800 523-1918. Investors should read the prospectus and, if available, the summary prospectus carefully
before investing.
Municipal fixed income funds
out the convenient options provided by Macquarie Investment Management. We try to make it easy for you to avoid some of the sales charges that you might otherwise have to pay when you withdraw and invest your money with another firm.
exchange all or part of your shares in one Delaware Funds® by Macquarie mutual fund for shares of the same class of another fund without paying a front-end sales charge or a contingent deferred sales charge (CDSC).
any changes:
or $75 quarterly. If the annual amount you withdraw is less than 12% of your account balance at the time the systematic withdrawal plan is established, the CDSC ordinarily applicable to certain fund classes will be waived. More details are available in your prospectus or at
delawarefunds.com/literature.
read it carefully before buying shares through an exchange.
800 523-1918, weekdays from 8:30am to
6:00pm ET
institutions representatives only
800 362-7500
P.O. Box 9876
Providence, RI 02940-8076
4400 Computer Drive
Westborough, MA 01581-1722
Macquarie Investment Management (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.
Item 2. Code of Ethics
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. A copy of the registrant’s Code of Business Ethics has been posted on the Delaware Funds® by Macquarie Internet Web site at www.delawarefunds.com. Any amendments to the Code of Business Ethics, and information on any waiver from its provisions granted by the registrant, will also be posted on this Web site within five business days of such amendment or waiver and will remain on the Web site for at least 12 months.
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
(a) Audit fees.
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 $30,870 for the fiscal year ended October 31, 2020.
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 $31,630 for the fiscal year ended October 31, 2019.
(b) Audit-related fees.
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 October 31, 2020.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of 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 $903,282 for the registrant’s fiscal year ended October 31, 2020. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: year end audit procedures; group reporting and subsidiary statutory audits.
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 October 31, 2019.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of 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 $909,000 for the registrant’s fiscal year ended October 31, 2019. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: year end audit procedures; group reporting and subsidiary statutory audits.
(c) Tax fees.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $4,850 for the fiscal year ended October 31, 2020. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations.
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 October 31, 2020.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $4,850 for the fiscal year ended October 31, 2019. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations.
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 October 31, 2019.
(d) All other fees.
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 October 31, 2020.
The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s 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 October 31, 2020. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.
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 October 31, 2019.
The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s 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 October 31, 2019. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%.
(e) The registrant’s Audit Committee has established pre-approval policies and procedures as permitted by Rule 2-01(c)(7)(i)(B) of Regulation S-X (the “Pre-Approval Policy”) with respect to services provided by the registrant’s independent auditors. Pursuant to the Pre-Approval Policy, the Audit Committee has pre-approved the services set forth in the table below with respect to the registrant up to the specified fee limits. Certain fee limits are based on aggregate fees to the registrant and other registrants within the Delaware Funds® by Macquarie.
Service | Range of Fees |
Audit Services | |
Statutory audits or financial audits for new Funds | up to $40,000 per Fund |
Services associated with SEC registration statements (e.g., Form N-1A, Form N-14, etc.), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters for closed-end Fund offerings, consents), and assistance in responding to SEC comment letters | up to $10,000 per Fund |
Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit-related services” rather than “audit services”) | up to $25,000 in the aggregate |
Audit-Related Services | |
Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and /or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit services” rather than “audit-related services”) | up to $25,000 in the aggregate |
Tax Services | |
U.S. federal, state and local and international tax planning and advice (e.g., consulting on statutory, regulatory or administrative developments, evaluation of Funds’ tax compliance function, etc.) | up to $25,000 in the aggregate |
U.S. federal, state and local tax compliance (e.g., excise distribution reviews, etc.) | up to $5,000 per Fund |
Review of federal, state, local and international income, franchise and other tax returns | up to $5,000 per Fund |
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.
Service | Range of Fees |
Non-Audit Services | |
Services associated with periodic reports and other documents filed with the SEC and assistance in responding to SEC comment letters | up to $10,000 in the aggregate |
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 $5,607,000 and $9,955,000 for the registrant’s fiscal years ended October 31, 2020 and October 31, 2019, 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 Companies 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
(a) | (1) Code of Ethics |
Not applicable. | |
(2) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are attached hereto as Exhibit 99.CERT. | |
(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934. | |
Not applicable. | |
(b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are furnished herewith as Exhibit 99.906CERT. |
SIGNATURES
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.
VOYAGEUR MUTUAL FUNDS III
/s/ SHAWN K. LYTLE | |
By: | Shawn K. Lytle |
Title: | President and Chief Executive Officer |
Date: | January 4, 2021 |
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.
/s/ SHAWN K. LYTLE | |
By: | Shawn K. Lytle |
Title: | President and Chief Executive Officer |
Date: | January 4, 2021 |
/s/ RICHARD SALUS | |
By: | Richard Salus |
Title: | Chief Financial Officer |
Date: | January 4, 2021 |